Peak Oil News: 12/01/2004 - 01/01/2005

Wednesday, December 29, 2004

Current Situation & 2005 Projections

From The Wilderness

This past year we have seen how volatile the oil market has become as the world approaches peak oil production. But the recent softening of oil prices demonstrates that we have not yet peaked. What we are experiencing right now is a tight oil market. Production can still increase, but not by much and only with difficulty. The good news is that we are producing more oil than ever before. The bad news is that production is barely keeping up with consumption, and the decline is still ahead of us.

In this tight situation, anything which disrupts oil production around the globe has an effect on prices. This year oil prices were driven up by the triple whammy of the Iraq invasion, civil unrest leading to production disruption in Nigeria, and hurricanes in the Gulf. Production could not increase enough to cover all of those shortages. But now the hurricane season is long over, and Nigeria is back in business. Barring further disruptions - such as the horror of a 9.0 earthquake in the Indian Ocean - prices should remain soft for the short term.

In fact, oil prices might drop back below $20/barrel before 2005 is over - depending on circumstances. Several new large fields should come online this year, adding extra capacity. These are the last of the 500 million barrel mega fields, since none has been discovered in the past few years. Eighteen new mega projects are due to start producing this year, followed by eleven more is 2006. However, 2007 will see the opening of only three new projects, followed by three more in 2008. This will not keep up with declining production in older fields, much less the increase in demand.


Tuesday, December 28, 2004

Follow the pipeline

South Florida Sun-Sentinel

The recent presidential campaign revolved around many issues, but the elephant in the room -- the prospect of wars without end to maintain U.S. control of the world's oil supply -- was ignored.

A neocon think tank, Project for the New American Century, had published a report in 2000 about the necessity to secure Caspian and Iraqi oil and cited "a new Pearl Harbor" that could ignite the fuse for military action. U.S. plans to depose the Taliban in Afghanistan were in place in conjunction with the Afghan Northern Alliance when 9-11 obliged.

In a few short months -- before Afghanistan was secure and Osama bin Laden's al-Qaida had been eliminated -- the Bush administration activated its plan for an invasion of Iraq, using deception to build public consensus. Its first priorities revealed its true motives -- takeover of oil export facilities, destruction of ministries except for oil and the hiring of mercenaries to guard pipelines.

It's now apparent that the Bush administration's Afghan invasion had two purposes, one laudable and unfinished -- the destruction of al-Qaida -- and the other for the site of a Central Asian pipeline. And also obvious, the "war on terror" invasion of Iraq was based on fabrication rather than the reality of consolidating U.S. control of Middle Eastern oil.

Fossil fuels are on the way to rapid depletion. Immediate conservation with available technology and development of alternative renewable energy in the immediate future -- not endless war for oil -- should be American policy.


Monday, December 27, 2004

Action Alert - Help Support Renewable Energy

Save Our Environment Action Center


Dear Reader,
Turbine


Right now Senate leaders are poised to make a big mistake by overlooking renewable energy and energy efficiency in favor of dirty, expensive, foreign fossil fuels.  We need your help to convince them to reduce our energy bills and increase renewable energy usage at the same time!

Senator Pete Domenici from New Mexico is the Chairman of the Senate Energy Committee, and he wants to hear YOUR ideas on the best way to bring down the cost of natural gas before noon on January 7th.

Click here to tell Senator Domenici that the best way to reduce energy costs is to increase the use of solar, wind, and other renewable sources of energy and increase the use of energy efficiency!


How vulnerable are we to oil?

DailyPress.com

The great peak oil debate among resource experts has produced two camps: those who believe that global peak oil is decades away, and those who see it occurring before 2010. The optimists are largely economists and statisticians; the pessimists are almost all experienced petroleum geologists. Available data strongly support the latter group.

Annual world oil discovery rates peaked in the early '60s at more than 40 billion barrels per year (bbl/yr), but since then have steadily declined to under 8 billion bbl/yr. By contrast, world oil demand continues to grow, due especially to accelerating industrial development in China and India. Current world oil production (demand) of 83 million bbl/day means that world inventories decrease by 30 billion bbl/year. Less than a one-fourth of this amount is replaced by new discoveries.

Can the trends outlined above be reversed by advances in oil exploration and production technology? The answer is negative for a variety of reasons. Much of the world's oil inventory resides in relatively few giant fields that represent large targets to exploration: one such giant, the East Texas field, discovered in the 1930s is in excess of 30 miles across. Despite numerous technological advances, the volume of new oil discovered keeps declining. For example, of the 130 recent oil field discoveries currently undergoing development, few are slated to produce more than 200,000 bbl/day, and none more than 250,000 bbl/day.

The implications of this world oil scenario for America are grave, given that we account for 25 percent (>20 million bbl/d) of world oil consumption. Our attraction to heavy-powered vehicles, combined with long average commutes and the inadequate public transit systems of most cities, results in our strong and highly inelastic appetite for oil. Due to the depletion of domestic reserves we now import more than two-thirds of our current needs, at a cost of well over $100 billion per year.

Furthermore, we are increasingly dependent on oil from the countries surrounding the Persian Gulf, where the bulk of the world's oil reserves reside. Many of these nations are politically unstable and tend to be anti-American. One thing seems certain: World oil production will peak in the near future, initiating a wide gap between supply and demand, and this will in turn set the stage for price escalation and probable supply interruptions. Except for the Strategic Petroleum Reserve, few visible moves by either government or corporate entities have been made to anticipate such eventualities.


Sunday, December 26, 2004

Time to prepare for the coming peak in world oil production

News-Miner - Opinion


I recently saw the movie "The End of Suburbia" at the University of Alaska Fairbanks, sponsored by the Interior Alaska Outpost of the Post Carbon Institute (Alaska.postcarbon.org). The Post Carbon Institute is a national grass-roots organization that educates citizens about the imminent oil crisis.

I only wish that when I was a student such an organization existed. They are committed to talking about energy scarcity problems--problems that every single one of us will have to face in the next few years. The movie and the organization are about looking to the future to see what we as a civilization will do when oil prices start to increase substantially. "The End of Suburbia" offers insights on how our economy depends on oil and why world oil production will soon peak and cause high prices.


I concur with their analysis. In my own book, "Scarcity and Growth Considering Oil and Energy," I highlight other, more complex, arguments behind the peak, but nevertheless a peak in world production will soon be upon us and will hit today's economy even as hard as the 1930s Great Depression. In fact, I predict that an oil price shock will happen in one to five years.

Another organization, the Association for the Study of Peak Oil, also supports this timeline. Unfortunately, most government and nongovernment reports support a 10- to 30-year time frame before oil shortages occur. Even so, we must start preparing now for that eventuality, and organizations like the Post Carbon Institute are helping people to do that.

Immediately upon hearing about the peak in oil production, most people argue that hydrogen fuel cells, corn-based methanol, or solar energy will be developed to replace oil. In fact, most members in my own professional organization, the International Association for Energy Economics, believe that technology can overcome any resource shortage, even an oil shortage.

Yet economic evidence shows that high oil prices indeed negatively and substantially affect the economy. Here again the movie does a good job of showing just how difficult it will be for these alternatives to replace oil. If you look at such concepts as the energy per acre of a corn field versus an oil field, then it is clear how inadequate these alternatives are compared with oil.

The one alternative, though, that I believe will be used to replace oil, which the movie does not talk about, is coal--the miracle energy of the 19th century--even with its environmental negatives. Fortunately, Alaska has hundreds of years of reserves.

One interesting issue surrounding the coming peak in oil that the movie brings up is the international situation in the Middle East and Iraq. "The End of Suburbia" portrays today's war in Iraq as a conspiracy to make oil profits.

However, that explanation is too simple. The Middle East does confront us with certain dilemmas. For example, Saddam Hussein's goal in invading Kuwait in 1990 was to increase his market power, thereby raising oil prices. The world cannot allow any one country to take control of other oil-producing countries, because that would lead to a monopoly situation and further reduce oil supplies and increase oil prices. We are going to have an oil price shock soon as it is due to the world's oil production reaching a peak. Therefore, it is all the more important that the major five oil producers in the Middle East keep their borders' integrity.

We cannot afford to have a worldwide oil peak and simultaneously have an invasion of one oil producer by another. That would exacerbate the peak in oil production and create an even larger oil price shock.

In general though, the movie confronts our societal love of the automobile. It shows that we need to start thinking more seriously about resource shortages, especially oil, and how to handle them on a personal level. It suggests that the solution to adapting to such a crisis is for each local region to start creating alternative transportation and living arrangements.

I agree with this idea. I think that it is important for our borough to consider preparing for high oil prices and the types of infrastructure we will need (more busses, more well-kept bicycle paths, and the greater use of firewood and coal for heating). On the other hand, markets will also help: As oil prices get higher, people will naturally find ways to adapt. This is one reason that I ride my bike to work every day, even in the winter.

Doug Reynolds is an associate professor of oil and energy economics at the University of Alaska Fairbanks and author of "Scarcity and Growth Considering Oil and Energy", and "Alaska and North Slope Natural Gas." His e-mail address is ffdbr@uaf.edu.


Wednesday, December 22, 2004

A Midwinter Night's Mare

Unscrewing The Inscrutable

Over fifty percent of the almost 100 million barrels of oil the world uses every day comes from a handful of irreplaceable fields in five tiny regions of the world. And the story is the same in every one of them. Greed, profit motive, impatience, arrogance, and out and out ignorance, have deprived future generations of what could have been while saddling them with the debt for what was. Saddam cranked his wells past recommended production limits as a result of years of UN Sanctions and to generate badly needed cash, ironically, and perhaps fittingly, leaving the US move to grab the energy reserves little to show for the endless procession of dead and maimed bodies. Our blood-soaked gory prizes in Rumulia and Kirkuk are sandy formations saturated with brine coughing up smelly, water-tainted crude, half of which is lost through cracking pipes and rusted pump stations targeted for destruction by furious insurgents. Kuwaiti fields are in about the same shape as Ghawar, same for the fields in the UAE. We know little about the state of Awiz these days, the largest reserve in Iran, but it's a pretty safe guess that since all these fields have been operating as long as Ghawar and managed by the same inept corrupt chimpanzee conglomerates who managed Saudi Arabia's only treasure, that the story is the same. Outside of the Middle East, Mexico's Cantarell field has recently just peaked and is now in decline, and the Venezuelan fields are likely to be at or near peak. Despite new finds in the North Sea the UK is now a net importer and the same goes for Norway. China has a large producing field but they use every liter of it and no one expects them to start sharing. Russia is nearing that same limit. No matter how many new finds you read about, if the country of origin uses more than they produce, it doesn't do the US a damn bit of good.

Looking at what are called 'oil reserves' gives a false sense of comfort as, at best, no more than half of the oil shown can be recovered, and in practice it's far less. The only thing that matters is how much we can bring to market and at what pace. In some cases, none of the oil presented is recoverable at meaningful rates, as is the case in the trillion barrel Orinoco Tar Belts. Sounds pretty good, right? It's nonsense; we cannot produce significant crude with current methods or foreseeable technology from these deposits. The tar is nothing but natural asphalt, way too thick to pump and far too deep to mine. Domestic Reserves in the Arctic and elsewhere sound like a lot, but even if we could extract the ideal quantity possible, the most we could get after subtracting the energy investment to run the machinery needed to harvest the oil is only enough to power our nation for a few months, maybe a year or two, tops. And that production would be spread over a decade.

This is the first part of my darkdream; half the oil in the world comes from a score of large fields which have been producing for more than fifty years. They're in bad shape. No comparable reserves have been found, and we've looked everywhere there is to look. New finds are almost meaningless in terms of world consumption, they're peanuts compared to what is needed. Nuclear fusion is a dream and fission too expensive, and besides, we're too far behind the construction curve to start now; grain ethanol takes more oil invested than it produces; solar panels would have to cover 10% of the country and manufacturing them takes oil, exotic materials, and produces toxic chemical byproducts; hydrogen fuel cells are offered as a solution only by those who lack the basic physics to understand their limitations.

Most of the time I trust primate ingenuity. I'm an optimist. Our ancestors survived many threats in the past and I think we will prevail over this as well, in the long run anyway. And it bears pointing out that we do have enough coal, oil, natural gas, alternative energy resources, and (hopefully) brain power in the US to at least keep the electricity on, the trucks, ships, and trains full of food and supplies moving, the farms churning out produce, and the water flowing, for a few decades more. If we're careful we can bridge this shortfall until we find a solution and keep ourselves afloat.

But are we that smart? Are we willing to give up our SUV's, air conditioning, and winter grapefruit, right now, so that we can have the barest essentials for a few decades? Or will we bury our heads in the sand with what is left of the oil and scream "IS NOT" until the shit hits the fan so hard it splatters us with economic collapse and starvation? Normally I'm a positive thinker. But late at night, unable to sleep, the darkdream takes over ...


Tuesday, December 21, 2004

War on Plastic - Rejecting the toxic plague

Jan Lundberg


One must acknowledge today's extreme dependence on plastics. They are pervasive, cheap, effective, and even "essential." The list of plastic types goes far beyond what we can start listing off the top of our heads. If a product or solid synthetic material is not clearly wood or metal, chances are it is plastic -- almost entirely from petroleum. Computers, telephones, cars, boats, teflon cookery, toys, packaging, kitchen appliances and tools, and imitations of a multitude of natural items, are but part of the world of plastics. Living without them would seem unthinkable. However, these plastics are essential to what? Answer: essential to a lifestyle that is fleeting -- historically speaking.

There are people who say they cannot live without something, and those who yearn to do so. People think it is a matter of choice. However, when the coming petroleum supply crunch hits and cannot be alleviated by more production -- world extraction is soon passing its peak -- a combination of factors will deprive global consumers of the constant flow of new products now taken for granted. Therefore, we will not have a choice when we must do without.


Monday, December 20, 2004

Big Oil Wields Ultra Deep Influence

The Center for Public Integrity


Opinions may differ on exactly when the Earth will pass its peak in oil production, but there is consensus that the day is unnervingly near: the U.S. Department of Energy and the International Energy Agency date it sometime after 2030 , while controversial “peak oil” theorists place it at 2008. In even the most optimistic scenario, humans will have extracted more than half the earth’s oil within the next three decades, after which oil production will begin its inevitable decline. Yet the world’s energy needs will be almost 60 percent higher at that time, according to the IEA.

That peak will arrive even faster in the United States, the Energy Department says. U.S. petroleum production will reach its apex at 9.8 million barrels per day in 2009, falling to 8.8 million barrels per day by 2025. Yet domestic demand will increase by almost 40 percent in that period. Similarly, demand for natural gas is projected to increase by 40 percent, while domestic production will only increase by 14 percent.

This double whammy of declining production and increasing demand is creating an even greater dependence on imported energy: Net oil imports, which rose from 37 percent of total U.S. petroleum consumption in 1980 to 56 percent in 2003, are projected to account for 68 percent of consumption in 2025. Twenty-one percent of America’s gas will be imported by that year as well.

U.S. leaders call this dependence on foreign energy a major national security concern, because of the vulnerability to supply disruptions. Insurgency campaigns in Iraq, pipeline sabotage in Colombia and civil unrest in Nigeria are just a few recent examples of supply interruptions that helped push the price of oil to record highs. Reducing U.S. energy dependency has been a chief priority of administrations dating back to the oil shocks of the 1970s.

Reducing dependency on foreign sources of energy means, above all, squeezing every last drop out of domestic ones. But America’s onshore sources are nearly tapped out: oil production from wells on land, for example, fell by 30 percent between 1986 and 1996. Luckily, the United States holds claim to one of the world’s richest oil deposits: the Gulf of Mexico.


Suburbs doomed!

phillyBurbs.com


Soon, oil will vanish and so will suburbia.

The McHouses of tract developments will be slums.

Interstate highways will crumble. That magnificent transportation system that allows Pennsylvanians to eat inexpensive Caesar salads grown by Californians 3,000 miles away will be no more.

We'll be forced to grow crops on our front lawns. Even so, we won't be able to feed our children.

Gasoline shortages will bring bloodshed at gas stations as suburbanites battle for dwindling supplies.

Billions of dollars will be sucked from the economy. Political upheavals will come.

The middle class will be mired in economic depression.

Sound nuts? It got serious consideration in Philadelphia last week by the Regional Citizens Committee of the Delaware Valley Regional Planning Commission.

The group viewed the documentary "The End of Suburbia: Oil Depletion and the End of the American Dream."

The film states unequivocally that these catastrophes will come "within our lifetimes."

I had to bite my tongue to keep from laughing aloud at the film's junk science premise that the trigger for this apocalypse will be the end of oil, which powers the suburban lifestyle.

The film's parade of experts, critics and authors claim that the Earth's oil reserves are tapped out and world oil production has peaked, even as demand rises.

Or maybe oil is nearly tapped out and production is nearly peaked.

Or maybe there will always be oil, but it will be too expensive for any of us to afford.

I can't say for sure. The film is incoherent on its chief point, a fact that environmental activists and their sympathizers will ignore, no doubt.

But the film spends plenty of time ridiculing suburbanites.


Saturday, December 18, 2004

American Energy Policy

Freezerbox


The human race has just completed the first high-energy century in history, and its accomplishments were significant. Crop productivity shot up more than fourfold with the massive increase is fossil fuels and electricity used in agriculture. Longer and healthier average lives can also be linked to better nutrition and medical advances that depend on energy, including everything from food pasteurization to vaccine refrigeration. The current unprecedented mobility in people, goods and information is also dependent on energy created by fossil fuels. Unless you live in a hut and take principled stands against penicillin, there is simply no disputing the long-term benefits of the dirty Industrial Revolution its technological spawn.

But uncritical hymns to the miracles of energy-driven growth are anachronisms. Although success has done much to inflate modern man's hubris in his conquest of nature, it is now apparent that he cannot continue with the same tools or the same abandon as in the 20th century. Doing so now risks undoing all of our gains. This is so for two fundamental reasons, both long established but gaining new clarity and force with each passing day.

First, we are using energy much faster than we are replacing it with new reserves. Fossil fuels are finite resources. The world is currently consuming four times more oil than it is finding, and the gap will increase exponentially in the coming years as demand and supply run in opposite directions. Thus the current fossil fuel driven world economy just can't be sustained, even if it were desirable that it should. Sober and respected energy analysts like Mamdouh G. Salameh expect chronic shortages of oil to develop as early as 2010.

The second reason why we "can't" maintain the status quo is less easy to predict with pinpoint accuracy, but still rooted in science. As surely as we are running out of oil, so too are we increasing the amount of carbon gasses in the atmosphere and raising the earth's temperature. It is impossible to gauge the exact consequences of this, but there is a consensus that the effect will be a qualitative change, of a degree dependent upon current and future emissions. This temperature change will most likely have severe effects on every aspect of life on earth; it is hard to imagine that any of them will be good.

These would seem two unanswerable arguments against continuing down the path that served us so well in the last century. What could be more compelling than these two declarative statements? 1) It is technically impossible for us to continue indefinitely, and 2) even if we could it would kill us. Threatened by this double-whammy, the US government--representing the world's largest economy and hence the largest possible engine for change--has a choice. It can dig into a fantasy world in which the status-quo is permanently maintained through a combination of supply-side policies, increasingly perilous games of geopolitical chess, and rapid environmental degradation, or it can tap the huge potential of demand-side manipulation, throw massive resources into the development of sustainable sources of energy and begin to lessen the world's growing dependence on diminishing reserves of Middle East and--coming soon to a nightmare near you--Central Asian oil. It is a choice between willfully ignorant and enlightened leadership; between representing your colleagues in the oil business and representing the human race.

Famously, the Bush Administration has chosen the first of these and is following it to a pathological extreme. It is common knowledge that this administration is in the well-lined pockets of the oil industry, but the depth and baseness of these connections are breathtaking and bear constant repeating over the public megaphone. The President, like his father, is a proud Texas oilman; his National Security Advisor sat on a major oil board and has a Chevron oil tanker in her name; the Vice President was CEO of one of the world's largest energy services company months before assuming office. In fact, the speech Dick Cheney gave last March outlining the Bush energy plan could have been lifted in parts from a speech he gave in 1999 to the London branch of the Institute of Petroleum, an industry group that included Cheney on its board of directors until last year. Cheney is the driving creative force behind the Administration's energy policy, and his "coming out" speech of March 2001 shed a harsh light on what we should have already known.

In his speech, Cheney called for more exploration and drilling and summarily dismissed the idea that conservation could be a significant pillar in a coherent energy program. In a memorable and revealing line, he mocked belief in the potential of both conservation and efficiency as "70s era thinking." The widespread employment of alternative energy sources was downplayed as unfeasible, and funding for their development was slashed to make sure it doesn't become feasible anytime soon. It is hard to disagree with Ralph Nader that the Cheney proposals prove the Bush team consists of "dinosaurs living in the age of mammals." The speech and the subsequent plan aren't surprising, yet somehow shock all the same. If the dinosaurs hold the reigns of power, then the rest of us are forced to live in a world of their creation. And if we must wait for a meteor to make the dinosaurs extinct, let us pray that it comes soon.


Thursday, December 16, 2004

We're either in a boom or bust

USATODAY.com


Q: What is the effect of higher oil prices on drilling in the USA?

A: It's had a dramatic effect on the industry here. You have to put things in perspective. We had a significant price increase in 1999, and we immediately saw dramatic increases in the number of wells being dug — from a low of 745 to a little under 1,300. That has not happened this time. That's because by the time all 1,300 wells were up and running back then, the price (of oil) had already fallen down below where it had been before.

This industry has always gone jumping up and down. We're either in a boom or bust. We don't do so well leveling things out. But that has changed. We were so recently hurt by the fall in prices in 2000 that things are moving a lot slower now. We're approaching 1,300 rigs, but we're not there yet.

Q: Why so cautious?

A: One significant reason is that when everything went downhill, people who had lost their jobs or their money said they'd had enough of this, and they left the industry. Now, when we have the money to drill, we have a people shortage. It's hard to train people to run rigs, train them so they don't get hurt. It's a dangerous job.

For the first time, even though we've increased by 80% the number of actively drilling rigs, we've seen almost no increase in production. We're maintaining what we had been producing. No significant new reserves (in the USA) have been brought on line. That's because North America is a mature province; 1998 was the peak in production for natural gas, and 1970 was the peak for oil. We're having to drill deeper, which is more expensive and takes longer, and for smaller reserves.


Wednesday, December 15, 2004

Scientists debate decline of oil stores: Sooner or later?

SFGate.com

Scientists meeting at the American Geophysical Union conference in San Francisco debated Tuesday whether the world has plenty of oil for centuries to come -- or if it faces impending shortages that might trigger economic chaos, even war, in coming decades.

On the one hand, optimists are confident that vast untapped oil reserves and continual improvement in drilling methods will assure plenty of cheap, abundant oil for Earth through this century and perhaps the next.

On the other hand, some experts fear a global-scale repeat of scientists' past failure, in the 1950s, to heed a warning from the Cassandra of petroleum geology: M. King Hubbert, who prophesied the oil shocks of the 1970s.

The most immediate danger is posed by the surging reliance of industrializing nations, especially China, on imported oil from other lands, not just oil in general, Stanford geophysicist Amos Nur warned the standing- room-only audience at the Marriott hotel, across the street from the conference's main headquarters at Moscone Center.

Nur pointed out that the United States had long imported more oil than it produced domestically. Likewise, China is becoming reliant on imported fuel to support its industrial expansion.

In what Nur called a future international "panic moment," both nations might take military action to protect their access to oil -- just as, he said, oil is probably the covert agenda in the United States' current war in Iraq.

Nur addressed a packed session titled: "Running on Empty? Oil: How Much, Where and at What Cost?" The questions posed in the session's name have been debated by petroleum geologists, economists and other experts since 1956, when Hubbert -- who worked for Shell Oil and, later, the U.S. Geological Survey - - forecast U.S. oil production would peak around 1970, then decline. He proved to be right; the oil embargoes of the 1970s brought long lines to U.S. gas stations.

Since then, experts have debated whether a similar peak and decline will come within a few decades for worldwide oil exploration.

On Tuesday, a spokesperson for the optimists was William L. Fisher, a professor of geology at the University of Texas at Austin. He chairs a National Academy of Engineering committee that advises the U.S. government on petroleum exploration.

"Relax, the end is not near," Fisher assured the audience. He said there would be plenty of oil to meet human needs until the planet transitions to energy sources largely reliant on methane and hydrogen gases later this century.

Historically, experts have seriously underestimated how much recoverable oil is stored within Earth's rocks, Fisher said. For example, today's proven oil reserves are "substantially higher than 20 years ago."

But unlike Fisher, Nur foresees big trouble ahead.

Chinese oil consumption "has begun to increase exponentially. ... Today, China is importing close to 40 percent of its oil from other places on Earth," said Nur, who has twice served as geophysics chair at Stanford.

And China's appetite for foreign fuel is growing: China plans to import half its oil by 2020, the Chinese Peoples Daily quoted a Chinese official as saying shortly after the Sept. 11 terrorist attacks, Nur said. At that time, the same official told the newspaper that the Sept. 11 attacks gave the United States the "pretext to enter Central Asia" to ensure its oil supplies, and that the U.S. military actions would "have far-reaching significance" for China's ability to ensure its own access to oil.

Nur said he suspected the diplomatically worded Chinese statement carried a veiled implication: that China recognizes the legitimacy of a nation's taking military action to ensure oil supplies. Conceivably, Nur said, that means that China, too, would be willing to take military action to maintain its oil imports.

"This is a potentially emerging conflict that is huge in magnitude," Nur said. "The finiteness of recoverable oil and gas reserves is a fact. ... There doesn't have to be a third world war for oil, but there could be."

Other speakers at Tuesday's session warned audience members to heed the lessons of history. In 1956, when Hubbert forecast a decline of U.S. oil production, "almost everyone, inside and outside the oil industry, rejected Hubbert's analysis," says an abstract of a paper given by geoscience Professor Kenneth S. Deffeyes of Princeton University.

The controversy raged until 1970, when the U.S. production of crude oil started to fall. Hubbert was right.

"Around 1995," Deffeyes said, "several analysts began applying Hubbert's method to world oil production, and most of them estimate that the peak year for world oil will be between 2004 and 2008. ... None of our political leaders seem to be paying attention. If the predictions are correct, there will be enormous effects on the world economy."


Tuesday, December 14, 2004

End of Oil Could Fuel 'End of Civilization as We Know It'

Livescience.com


Opponents in a long-running debate over when the world will run out of oil squared off Tuesday in a crowded room of scientists, reaching only one conclusion: The supply of fossil fuels is fixed and the world economy will eventually have to wean itself from oil.


The most dire and perhaps speculative forecast calls for global oil production to peak next year -- specifically on Thanksgiving.


Others say the end can't be accurately predicted, but that it is likely decades rather then centuries away, and that the consequences will be grave: huge inflation, global resource wars -- China vs. the United States was emphasized as a possibility -- and the end of civilization as we know it.


Other experts at the face-off, held here during a meeting of the American Geophysical Union, said there is nothing to worry about in the short term.


After Oil Peaks, Geonomics Wins the Next Wave

Progress.org


It seems we must run out of oil -- and not a minute too soon, if there is any chance of stopping harmful climate change. While oil is not the lifeblood of industrial economies, energy is. Machines don't care if their power comes from fossil fuel or chicken manure -- but the ecosystem does.


To hasten and ease the transition to alternative energy sources, we could use geonomics. That is, we'd collect the annual rental value of oil, of all natural resources, even of surface land -- trillions of dollars each year -- use the proceeds to pay ourselves a dividend a la Alaska's but heftier, and meanwhile quit taxing our efforts and quit subsidizing social services (albeit corporate welfare is not exactly a true 'service'). Geonomics -- replacing taxes with land dues, and replacing government subsidies with “Rent” dividends for all -- lets industrial economies cure themselves of their addiction to oil both economically and politically.


Monday, December 13, 2004

As The World Burns

Axis Of Logic

As The World Burns
By Michael C. Ruppert, Editor, Publisher
Dec 13, 2004, 11:24

But when the run on the dollar begins, OPEC will inevitably at some point switch its pricing to the Euro, which the entire world is wrangling - much to Europe's chagrin - into not only a safe-haven currency, but a profitable one. The next house is being built before the old one is abandoned. When the run on the dollar begins, it will be as if the rest of the world declared war on the United States of America by launching a missile, dropping a bomb, or landing an army at Bethany Beach, Delaware. That this will lead ultimately to widespread global warfare seems certain. This is exactly the way the administration is setting it up to appear to the American people. Think of 9/11 times fifty.

The rest of the world is merely defending itself with non-violent means - for the moment. But it will be portrayed as an attack upon the US. "Why?" George Bush will ask, rhetorically. "They hate us because of our freedom."

And, barring a miracle, the end results will be exactly the same as from a physical attack: devastation so complete and unthinkable - magnified by the brutal impacts of Peak Oil - that only a few will even try to prepare for it. That is sad because preparation will make all the difference (barring luck or divine intervention) in who survives and to what extent they remain intact and functioning afterwards.

Run on the Dollar Imminent - The American People and Economy Will Be Among the First Casualties

The World Draws a Line in the Sand Around Iran - There will be No Invasion

Ukraine Possible Sarajevo for Global Conflict; Africa Ready to Explode in Proxy Wars; Latin America Heats

US Strategic Abandonment of the Korean Peninsula Inevitable; Taiwan Likely

Permanent Blackouts in Industrialized Nations Possible by 2008

John Lennon wrote, "Life is what happens while you're busy making other plans."

Since the US general election, while many in the US and around the world have been recovering from a gut shot which left them gasping for breath, an "asymmetrical" mobilization for global conflict has begun at warp speed. While many of the world's citizens and nations were unprepared for a second-straight US presidential election theft, it is obvious that many of the world's more powerful governments were anticipating and preparing for it for some time. They had their track shoes on and were in the starting blocks on November 3rd. There is no other explanation for the pace at which economic, political, military and energy events have moved around the world in the three weeks since November 2nd. The end of the world "as we know it" is very close. There may be nothing that can be done to prevent it and only little that will soften its impact. This places even greater importance on what FTW has been advocating for many years: personal and community preparedness.

This article constitutes FTW's third-ever economic warning to its subscribers. The first, published on September 9, 2001 was followed two days later by the "attacks" on the World Trade Center and Pentagon. The second was on July 8, 2002 just before a precipitous drop in the Dow of more than 1400 points and the wiping out of more than a trillion dollars of shareholder equity, especially from pension funds.

One key to grasping the interrelatedness of these developments is to understand that dramatic economic collapse, especially in the case of a super power or an Empire, has historically created a power vacuum which has resulted in war. If, as von Clausewitz said, "war is a continuation of politics by other means," then we must also admit that politics is a continuation of economics; and economics is a continuation of energy. All economics (at least in this world) is founded upon energy, whether it is hydrocarbon energy or physical labor (food calories). There are 10 calories of hydrocarbon energy in every calorie of food consumed.

Energy is the ability to do work; it is, in effect, the ability to survive. Energy is economics. Now, economic warfare several orders of magnitude above that which has occurred since 9/11 is underway. As much of the world hoped it would soon be dealing with a Kerry presidency that might have provided a partner still worth working with, it refrained from making economic moves that might permanently damage the US.

There was no point in destroying the US economy until it became clear that the election was rigged and the neocons had been moving ahead with a hostile agenda all along. For the world, November 2nd represented yet another Rubicon: there is no longer any hope of "peaceful coexistence" with the American Empire. Ultimately this conflict must become a physical one.

This apparently was what the neocons wanted to make clear as well. This is what they intend (it was what they meant by the phrase "nothing will stop us," repeated four times in Bush's RNC speech). They also wanted it understood that the Empire would willingly sacrifice its own people in a test of wills much as the Soviet Union did in World War II. As such, only the global elites, defined by money and power rather than nationality, stand to benefit in the short term. Indeed, given the nuclear threat involved, it is now debatable whether there will even be much of a long term (twenty years hence) to prognosticate about.

An all-out run on the dollar is imminent and from the moment that begins we will be living in a whole new ruthless and unforgiving world. The best way to weaken the American military before fighting it is to eliminate as much of its funding as possible.

If my warning seems hyperbolic to you, then consider just one statement made by someone whose job it is to avoid hyperbole.

On November 23rd the Boston Herald reported on a shocking statement made by Stephen Roach, the chief economist for investment banking giant Morgan Stanley. "Roach met selected groups of fund managers downtown last week, including a group at Fidelity. His prediction: America has no better than a 10 per cent chance of avoiding economic "Armageddon."

Press were not allowed into the meetings. But the Herald has obtained a copy of Roach's presentation. A stunned source who was at one meeting said, "it struck me how extreme he was - much more, it seemed to me, than in public." Roach sees a 30 percent chance of a slump soon and a 60 per cent chance that "we'll muddle through for a while and delay the eventual Armageddon."

The core of Roach's analysis is the simple fact that, in order to keep the US economy afloat and maintain even moderate faith in the dollar, it must secure $2.8 billion dollars a day in foreign direct investment (FDI), largely through the purchase of Treasury notes to service its bubble economy. Other sources have placed the required FDI at $4 billion per day.

What is the sense of this as the Bush administration raised the US debt ceiling by 800 billion on November 19th and continues to pull the rug out from under the dollar while at the same time cutting taxes and increasing spending? There were warning signs that these wellpublicized moves were dangerous for Americans and their wallets more than two months ago when, on September 9th, the routine daily T-Bill auction at the US Treasury opened and no one showed up to buy. Marshall Auerback - one of FTW's favorite economic analysts - writing for Prudent Bear (www.prudentbear.com) on Nov 16th reported:

Suppose they had a bond auction and everybody stayed home? We had a variant on that theme a few months ago. During a routine sale of U.S. Treasury bonds in early September, one of the essential pillars holding up the economy suddenly disappeared. Foreigners, who had hitherto been regularly buying nearly half of all debt issued by the U.S. government stayed home on September 9th.

"Thoughts of panic flickered out there," said Sadakichi Robbins, head of global fixed-income trading at Bank Julius Baer. To be sure, the foreigners returned in force at the next Treasury auction, and Sept. 9 was quickly dismissed as an aberration.

But the episode demonstrated something we have repeated on these pages ad nauseum: the extent to which the US remains dependent on the kindness of strangers in terms of sustaining its very way of life. We have posited the notion that a buyers' strike, a foreign creditors' revulsion, could arrive as a sudden thunderclap of financial crisis--spiking interest rates, swooning stock market and crashing home prices, a scenario which will not seem so absurd if we have a few more days like September 9th.

In the midst of these developments - common knowledge in Wall Street's boardrooms - Reuters reported on November 15th that bonuses for Wall Street executives were set to jump by 10% to 15% this year. Almost simultaneously, the New York Times reported on November 21st, "Soaring Interest Compounds Credit Card Pain for Millions." The latter story revealed that in recent months credit card companies have unilaterally increased (in some cases doubled) interest rates on credit card debt without notice. The net result has been drastic increases in minimum monthly payments and interest rates that have soared in some states to as high as 28%. What would you do if your monthly minimum on one card went from $460 to $780 dollars?

Most Americans today cannot dig out from that kind of debt and this is a sure indicator that the weight of a major economic meltdown will be placed on the shoulders of consumers instead of corporations - at first. Consumers will never be able to dig out when the economy collapses. As Catherine Austin Fitts points out, lenders have an obligation to exercise diligence to see that borrowers are able to repay loans before making them.

What is happening is that lenders are at one and the same time encouraging people to borrow while systematically undermining - universally - their ability to repay those loans. Americans are still being encouraged to borrow and spend when they should be being warned to cut back and decrease debt. The main reason is because soon - in the blink of an eye - the world is going to stop underwriting this binge-bubble economy and there will be no safety net for those weighed down by debt. Why? It's called a wealth transfer. It happened in the Great Depression and FTW described it thoroughly in its analysis of the crack cocaine epidemic in South Central LA in the 1980s. The trillions stolen from the US Treasury, looted by stock manipulations and derivative-based investment bubbles, will be available to buy back our devalued assets at pennies on the dollar after the collapse. This is the sickness of America's (and the world's) governing economic paradigm. This is also a sickness that is rushing the world toward the kind of war that spreads beyond human control very rapidly: World War I on steroids and amphetamines.

PRELUDE TO WAR - Dumping the Dollar

According to a Plan - Iran in a Bubble

What has happened since November 2nd is that the entire world has been telegraphing a clear intent to stop providing America with its FDI subsidy. What has also been telegraphed is the administration's encouragement of this. The dollar will have to crash. But when? How far?

The rest of the world has realized that military confrontation with the US is not practical. Yes, it is true that the US military cannot wage a global war on many fronts. It is having a hard enough time holding its own in Iraq and Afghanistan. There will be no invasion of Iran. China has just signed a $200 billion investment agreement with its government (Asia Times, Nov. 6th). India, Germany and Russia are signing oil and gas deals with Iran hand over fist. This is global insurance for Iran, which plans to open an oil futures trading bourse priced in Euros in 2005.

The US (Britain and Israel) cannot afford to attack hundreds of billions of dollars in Chinese, Russian, Indian, German and other foreign investments. It will not. There are as yet no volunteers from among the other nations to suffer the carnage necessary to break the US military's back in an open firefight. But there are nonviolent ways to fight the Empire which are in fact precursors to military confrontations. At some point the Empire will resort to what it knows, maybe in the Ukraine, maybe in Africa, maybe in Latin America. At some point after that, unless something is done, the safeties will come off nuclear and biological weapons. The unthinkable will become a rational option.

All of that may take less than a year. In the meantime the trick for the rest of the world is how to get out of the dollar before it plummets and thus protect foreign currency holdings.

Catch 22? Maybe not. Many countries are now signaling that they are willing to take a little shot in order to give the US a very big one. That's what November 2nd told Wall Street, the Treasury and the Fed. And - according to a November 29th AP story reprinted in Forbes - China's Central Bank has now moved in to try and manage the dollar's decline by buying and selling them through its four largest banks. The likely intent is to allow all the other nations aligning with this plan to get out safely with minimal losses. Only China has currency reserves (approximately US $175 billion) and an economy big enough (even as Peak Oil is just beginning to hit home) to underwrite the switch and make it palatable to those taking the risk. It appears that since November 2nd the rest of the world feels it has much less to lose. They are correct. The oil and gas supplied by Iran are essential to the survival of many countries.

But China is also facing increasingly frequent blackouts due to energy shortages. If it is going to move on the dollar it must move before its economy slows and the US, Koreans, Europe, Japan, Canada, and the rest of the industrialized world start to shut down their factories there and withdraw their investments. In short, China must strike at the dollar while China stands a chance of winning. It will never have a better opportunity than right now.

The following story excerpts from Britain's Telegraph paint the picture.

 

--------------------------------------------------------------------------------


Tension rises as China scours the globe for energy

By Richard Spencer

(Filed: 19/11/2004)

China's insatiable demand for energy is prompting fears of financial and diplomatic collisions around the globe as it seeks reliable supplies of oil from as far away as Brazil and Sudan. An intrusion into Japanese territorial waters by a Chinese nuclear submarine last week and a trade deal with Brazil are the latest apparently unconnected consequences of China's soaring economic growth.

The connection, however, lies in an order issued last year by President Hu Jintao to seek secure oil supplies abroad - preferably ones which could not be stopped by America in case of conflict over Taiwan.

The submarine incident was put down to a "technical error" by the Chinese government, which apologised to Japan.

But even before the incident the People's Daily, the government mouthpiece, had commented that competition over the East China Sea between the two countries was "only a prelude of the game between China and Japan in the arena of international energy."

The Brazil trade deal included funding for a joint oil-drilling and pipeline programme at a cost that experts said would add up to three times the cost of simply buying oil on the market. The West, however, has paid little attention to these developments. For the United States and Europe are far more concerned with the even more sensitive issues of China's relations with "pariah states."

In September, China threatened to veto any move to impose sanctions on Sudan over the atrocities in Darfur. It has invested $3 billion in the African country's oil industry, which supplies it with seven per cent of its needs.

Then, this month, it said that it opposed moves to refer Iran's nuclear stand-off with the International Atomic Energy Agency to the United Nations Security Council.

A week before, China's second biggest state oil firm had signed a $70 billion deal for oilfield and natural gas development with Iran, which already supplies 13 per cent of China's needs. China has its own reserves of oil and natural gas and once was a net oil exporter. But as its economy has expanded by an average of nine per cent per year for the last two decades, so has its demand for energy.

Its projected demand, boosted by a huge rise in natives to polluting coal for electricity generation, has contributed to the surge in the price of oil this year.

Shortages are already leading to power cuts in the big cities.

Since President Hu ordered state-owned oil firms to "go abroad" to ensure supply, they have begun drilling for gas in the East China Sea, just west of the line that Japan regards as its border. Japan protested, to no avail, that the project should be a joint one.

The two are also set to clash over Russia's oil wealth. China is furious that Japan has outbid it in their battle to determine the route of the pipeline that Russia intends to build to the Far East. Japan favoured a route to the sea, enabling oil to be shipped to both Japan and China. China wanted an overland route through its own territory, which would give it ultimate control if hostilities broke out.

Increasingly, analysts are saying that China's efforts have gone beyond what is safe or even in its own interests.

Claude Mandil, the executive director of the International Energy Agency in Paris, said the reserves in the East China Sea were hardly worth the trouble.

"Nobody thinks that there will be a lot of oil and gas in this part of the world," he said... "If China's economy falters, which, in my view, appears increasingly likely, then commodity prices will plummet, and with them, the value of the assets that produce them," Jason Kindopp, Eurasia's lead China analyst, said.

"Beijing may end up in an early 1990s Japan situation, where it is forced to sell recently purchased overseas assets for a fraction of what it paid for them."

China's wider aggression to secure oil and gas was the greatest threat to its international standing in the next decade.

"Sudan is the primary example," he said.

"It marks the first time in recent years that China has promised to wield its veto power in the UN Security Council against a petition initiated by the United States and backed by France and Great Britain."

 

--------------------------------------------------------------------------------


According to Bloomberg on November 12th, China has just signed a $10 billion investment deal with Brazil to finance everything from factories to forestry, to ports to railroads, to energy prospecting. The key is not so much the assets; it's the combined economic power moving into a new power block and away from the US. For three years FTW has been writing that China would be the endgame in the struggle for oil. If we were correct when we wrote that then the end game has arrived much sooner than we expected. The impacts of Peak Oil are magnified as they move through a complex, interdependent system of economic, political and military competition. In warfare (and that's what this is) the rule when both enemies are trying to take the same objective is that if you can't get it, you must deny it to your opponent also.

IF I CAN'T HAVE IT

In other words, "If I can't have it then nobody can." What a magnificent statement of the current evolutionary state of mankind. Were the human race to have a tombstone, this might make an appropriate epitaph.

The signs are unmistakable that a rapid move away from the dollar is underway as other currencies like the Euro, the Yen and the Yuan show increasing strength. The Euro is becoming a hostage currency which the EU wants to weaken so as not to be priced out of the world exports markets. But I would not be surprised if strategic European thinkers - knowing that the Euro (either singly or in a basket with other currencies) is destined to become the currency of energy - are quietly supporting these moves. Every region is going to take some lumps here. The questions are when, where and how bad? Rumors are again surfacing of the possible birth of an Islamic gold dinar. The dinar is a double whammy as globally the lid is being ripped off a decades-long conspiracy to suppress the price of gold. Gold has hit 16 year highs recently of over $455 per once. Central banks, including the Fed, may soon be forced to reveal how much gold they have, or don't have. They will do anything to avoid disclosing where it went and why it isn't there. When that happens, the world - especially the American people - might be in for a real shock as we learn the truth about where "our" gold isn't. The collapse deepens. Tens of millions of unemployed, especially the young, might face a choice between starvation and enlistment in the military. Maybe we won't need a draft after all. Maybe that's why both Bush and Kerry were so certain about it.

New and previously unthinkable economic and military alliances are rapidly emerging as geostrategic fault lines (e.g. the Ukraine) portend massive earthquakes, and as the US Federal Reserve has basically indicated that it will make no effort to support a dollar which is now beginning a freefall. That does not mean that there will not be corrections as the dollar occasionally bucks the trend, but the trend must ultimately prove to be mightier than the dollar because of American debt. Once a revolt like this is unleashed there is no turning back. The world will have to destroy America or be destroyed itself. The battle to control oil reserves continues. Oil is money. Money is valueless without oil.

Russia, China, India, Brazil, and now Venezuela

The first task is for the world's major economic players to begin divesting dollars before they crash even further. Russia, Indonesia, Japan, Mexico and India have already begun such moves. The Financial Times reported on November 26th that mere whispers in China that its central bank might approve dollar (T-Bill) sales caused a near panic in financial markets until the rumor - an obvious trial balloon - was denied. The moment China starts selling dollars the rest of the world will crash down the doors of the bank to get rid of theirs as quickly as possible. The run on the dollar will be short, bloody and catastrophic.

 

--------------------------------------------------------------------------------


Chinese Whispers Frighten Currency Markets

By Chris Giles

Financial Times London Friday, November 26, 2004 The dollar fell to new lows on Friday on rumours that China might shift some of its currency reserves away from the greenback, highlighting the dollar-related jitters in financial markets. The fragility in currency and bond markets has centered on fears that Asian central banks might dump US assets to avoid large losses as the dollar's value falls. The markets' nerves were highlighted by Friday's investor reaction to a report, later retracted, that China's central bank was offloading US Treasury bonds. On Tuesday, the first deputy chairman of the Russian central bank said it might increase the proportion of its reserves held in euros. Investors have taken the comments as a signal that the Chinese and Japanese central banks might also be considering their asset holdings. If either began to shift into European or Asian assets, the dollar would plunge.

The bubble of protection surrounding Iran just gets bigger and stronger. It is obvious that the entire world is drawing a line in the sand over Iran beyond which the Empire knows it faces a fight to the death. Yet, in every public posturing the Cheney-Bush dynasty has made it clear that this fight is exactly what it wants, is seeking, and is prepared for.

 

--------------------------------------------------------------------------------


Iran, Venezuela discuss oil price in Tehran

LONDON, Nov 29 (IranMania) - Venezuelan President Hugo Chavez arrived in Tehran Sunday for two days of high level talks, with discussions including the oil price ahead of next month's OPEC meeting, according to AFP. "The topics of discussion will include oil relations between the two countries in OPEC and defending the oil price," Chavez told reporters in brief comments before he sat down for a meeting with Iranian President Mohammad Khatami. Chavez, who is heading a high-level political and economic delegation, gave no further details. OPEC has signaled it will stick with the dollar and there is a motive for this consistent with the dollar's ultimate demise. The Sydney Morning Herald reported on November 25th that OPEC president Purnomo Yusgiantoro has announced that OPEC will continue pricing oil in dollars because dollar denominated oil allows less affluent countries to arbitrage stronger currencies (i.e. the Euro) before converting to weaker dollars for oil purchases. While this will nominally hurt oil exporters like Saudi Arabia, Venezuela, Iraq and Iran in the short term, it will also be a way of sharing the already enormous wealth transfer underway as oil hovers near $50 a barrel with less powerful nations and binding them into the new block. It is OPEC actually taking care of the rest of the world (for a while) and whether it is for altruistic or Machiavellian purposes makes little difference. An Empire that cannot protect its vassal and tributary states is no longer an Empire but a carcass ripe for picking. This is how the world is beginning to see the United States from a geostrategic standpoint.

When the run on the dollar begins, OPEC will inevitably at some point switch its pricing to the Euro, which the entire world is wrangling - much to Europe's chagrin - into not only a safe-haven currency, but a profitable one. The next house is being built before the old one is abandoned. When the run on the dollar begins, it will be as if the rest of the world declared war on the United States of America by launching a missile, dropping a bomb, or landing an army at Bethany Beach, Delaware. That this will lead ultimately to widespread global warfare seems certain. This is exactly the way the administration is setting it up to appear to the American people. Think of 9/11 times fifty. The rest of the world is merely defending itself with nonviolent means - for the moment. But it will be portrayed as an attack upon the US. "Why?" George Bush will ask, rhetorically. "They hate us because of our freedom." And, barring a miracle, the end results will be exactly the same as from a physical attack: devastation so complete and unthinkable - magnified by the brutal impacts of Peak Oil - that only a few will even try to prepare for it. That is sad because preparation will make all the difference (barring luck or divine intervention) in who survives and to what extent they remain intact and functioning afterwards. Berlin and Dresden at the very end of World War II, Stalingrad in 1942, and the cities of Hiroshima and Nagasaki, are the only earthly landscapes I can imagine which might be worse. This time however, most of the buildings will remain standing, empty and decayed; possibly the self-created tombstones of an ultimately selfdestructive species. This is the horror of Peak Oil that I and many other researchers have foreseen and warned about for so long - some, like Richard Duncan (below) for much longer than others. At some point however, likely within the next year, the all-out run on the dollar will take place and then the financial embers will burst into flames, perhaps even military confrontation. The latter will likely begin as "lowintensity" surrogate conflicts in Africa, Saudi Arabia, Eastern Europe and South America before the almost certain eruption of large-scale military conflict. Some of us can and will prepare to one degree or another for this. FTW's main obligation and commitment to our subscribers is to provide them with information that makes them better informed, safer, more prepared and aware of what is really going on around them. For the eighty-one months that we have been publishing I can safely say that nothing we have ever published is as urgent or as clear as the warning we publish in this article. Things have changed. No longer can I or FTW invest long periods of time to write the detailed and lengthy analyses which have become our hallmark. The world is changing too fast for that. There is only time to make you aware of patterns and breaking news stories in a way that no other publication is doing. Raising our vision a little higher, and looking further down the road, the best service we can provide you is to focus more on breaking news and to integrate fast-breaking developments into what we hope is the map we have successfully drawn for you over almost seven years.

PEAK OIL IN OVERDRIVE - THE OLDUVAI CLIFF APPROACHES

Within two weeks of the publication of this warning, legendary oil geologist Richard Duncan will publish a new paper titled The Olduvai Cliff Event: ca. 2007 after a peer review of Duncan's work is completed. FTW will bring that paper to you as soon as it becomes available. Excerpts from that paper read as follows: The Olduvai theory states that the lifeexpectancy of Industrial Civilization, defined in terms of world energy use per capita ("e"), is less than or equal to 100 years. History: We know that the peak of "e" [per capita hydrocarbon production] occurred in 1979 and that "e" declined from 1979 to 1999 (the 'slope'). Future: The Olduvai theory predicts that "e" will decline even faster from 2000 to the so-named 'cliff event' (the 'slide'). A previous study put the 'cliff event' in year 2012 (Duncan, 2001). However, it now appears that 2012 was too optimistic. The following study indicates that the 'cliff event' will occur about 5 years earlier than 2012 due to an epidemic of 'rolling blackouts' that have already begun in the US. This 'electrical epidemic' spreads nationwide, then worldwide, and by ca. 2007 most of the blackouts are permanent. The 'modern way of life' is history by ca. 2025. [emphasis added] Postulate 2 of the Olduvai theory states, "Energy production per capita (e) will decline exponentially from the cliff event circa 2008 to 2030." If that is true, then the population in the world's industrial nations, we argue, will go from about 3.3 billion in 2008 to about 0.9 billion in 2030, a net die-off of about 300,000 people per day in the 22 years from 2008 to 2030. [emphasis added].

Most Peak Oil advocates will think that this pushing up of the date is perhaps unjustified. I do not and neither does Richard Duncan whom I spoke with by telephone on November 29th. Almost all oil geologists understand and acknowledge that applying technology such as secondary recovery via water injection and horizontal bottle- brush drilling actually accelerates a field's decline by destroying the source rock. The same analogy applies to the ever more intense fight to either wrest oil supplies away from competitors or, failing that, to ensure that competitors cannot gain access to what you are denied. Iraq is a case in point, where the insurgency is routinely blowing up oil infrastructure to keep the US from benefiting from cheap oil. Peak Oil is more than just a geological event. It is rapidly coming to be understood as an economic, political and military event as well [that's why we capitalize it - Editor]. This is the focus that FTW has pioneered, especially in our analysis of September 11th 2001.

It can take ten years to bring a new so-called "mega field" of 500 million barrels (Mb) online. The average is three to five years. Oil discoveries have been in a steady decline since 1964. No new mega fields have been discovered in more than a year and we know which fields are scheduled to come online and when. Previously FTW's Dale Allen Pfeiffer had calculated that by 2007 it was a mathematical certainty - all things remaining equal - that there would be absolute and unavoidable shortfalls of production.

But all things are not equal. Warfare, whether economic or military, destroys production capacity. It either blows up infrastructure, keeps fields from being developed, or robs nations and economies with capital and expertise of the ability to go out and even develop the few small fields remaining to be found.

Once major blackouts start hitting; once the US economy tanks and millions become unemployed; once banks and pension funds fail and the housing market collapses, a cycle will have begun which can only compound itself - thus preventing what would be the "ordinary" development of remaining fields. Human civilization may self-destruct before declining oil would have made it necessary. If the world is engulfed in war then neither the LNG tankers necessary to bring natural gas to the US nor the LNG terminals needed to receive it will be built. There won't be enough capital. There won't be enough remaining expertise. There won't be enough social order to complete even these stopgap measures. If Peak Oil does not destroy civilization, then our chosen course of waging war to get oil most certainly will both accelerate and worsen its impact.

And that is why we - as a species - stand on the brink of a very real Armageddon.

A FLOOD OF BREAKING NEWS

Stories are now breaking so fast that I cannot begin to process them all. FTW is going to have to reorganize and grow because the coverage of breaking news is now more important to you and to us than the detailed analyses and "mapmaking" we have worked so hard at for seven years. The best I can do as I conclude this warning is list some of the other recent developments which have caught my eye and offer a few brief comments. In the context with what I have written above, these developments should reinforce the urgency of this message.

Warnings have recently been issued that Medicare, Medicaid and the Pension Benefit Guaranty Corporation may soon be insolvent (see Crossing the Rubicon). Climate change and the possibility of a climatological collapse have accelerated as the Arctic ice cap is receding faster than anticipated. Publications from the Christian Science Monitor to Al Jazeera are publicizing reports from scientific institutes that the change is accelerating and even causing glaciers to melt in the Himalayas. The savage irony of this is that the oil industry is cheering this on because it will open up a Northwest Passage for shipping which will make it even easier to extract the few hundred million barrels of oil in the Arctic National Wildlife Refuge and open up sea lanes for faster transport of oil from Russia and Norway over the pole.

The Wall Street Journal reported on November 29th that China is acquiring submarines at a breakneck pace and this is causing alarm all over Southwest Pacific. The World Trade organization has just slapped the US with first-ever punitive sanctions that may cost up to $150 million per year for illegally protecting US steel makers from competition.

Warnings of a bird flu epidemic that could kill seven million people in the next year are being circulated by the WHO and major governments around the world. Russia has announced that it will stop pegging the ruble to the dollar and Russian bonds have just been upgraded to investment grade by major rating agencies like Fitch; Standard and Poor's has announced it may follow suit.

All nuclear weapons research contracts held by the Lawrence Livermore Laboratories and the University of California have just been transferred to the University of Texas.

Housing Bubble -- On Nov. 16, according to the Associated Press, Fannie Mae, currently under investigation for cooked books, admitted a possible $9 billion loss from derivatives as it auditor KPMG refused to sign off on its accounting sheets.

The Association of Southeast Asian nations (ASEAN) is mounting a diplomatic effort against Myanmar (Burma), allegedly over human rights reforms. But this happens just on the heels of an announcement that China is seeking to build a pipeline through Burma to the Indian Ocean to shorten tanker routes and avoid potentially troubled waters in the straits of Malacca and the South China Sea.

Guerilla insurgencies and US military involvement are spreading throughout Latin America as the US is pushing governments there to change their laws and procedures to permit more aggressive suppression of dissent, mislabeled as terrorism.

In Africa investment dollars from a multitude of countries including the US, Europe, China, India and around the world are flooding the continent as political instability, strikes, guerilla revolts and coup attempts have been reported in at least eight countries in the last three months. This will, of necessity, be the subject of an upcoming FTW series.

The Ukraine, a geostrategically vital pivot nation is becoming a battleground between the Bush and Putin regimes as Russia urgently seeks to extend its regional influence into Europe and keep open pipeline routes for Caspian oil to the Black Sea and its vital ports. Without Ukraine in its sphere of influence, Russia will revert to being only an Asian power instead of an Asian and a European power. The dispute over the recent election results by Viktor Yankuovych (pro-Moscow) and Viktor Yushchenko (pro-US) may lead to civil war and partition of the country. Do not be surprised if the Ukrainian conflict leads to a military confrontation between NATO and Moscow. The stakes are that high (watch for a coming article by Larry Chin of the Online Journal on this important subject).

As the US cuts back on troop deployments in South Korea, both halves of the divided peninsula have signaled an interest in reunification. This is a prelude to a strategic US withdrawal from the peninsula for the simple reason the US cannot, in today's world, possibly hope to defend it. The same might also be true for Taiwan if things get dicey. Recent massive US Naval exercises involving seven carrier battle groups not far from Taiwan (Operation Summer Pulse) revealed the importance of a region which includes oil deposits so small that International Energy Agency Chief Claude Mandil basically called them insignificant. How nervous would a US withdrawal from Korea make Japan? Taiwan? At what point will the line be drawn when the nukes come out? These are all questions that need to be answered. I could not help but chuckle when I heard a recent announcement that "small but significant" oil discoveries had recently been made in the Falkland Islands (those grains of sand near Antarctica, for which Britain went to war with Argentina in 1982) and in Bosnia where hundreds of thousands of lives were sacrificed during the 1990s. Coincidence?

IMMEDIATE ADVICE

Take this to heart as if your welfare depended upon it. Do it as if the crisis was upon you today. These are only immediate steps. FTW is about to undergo a major reorganization so that we may bring you better real-time information and more solutions or options as they become available.

1. Curtail all unnecessary spending.

2. Reduce credit card balances.

3. Get to know and become friends with your neighbors on all sides.

4. Keep (at least) a week's worth of cash and food in your home.

5. Look at your residence and ask yourself what you could do to improve it if there were no heat and no electricity. Start preparing for both. Look at your insulation (if you own), your windows, curtains (a great source of heat loss) and roof.

6. Buy physical gold, not paper gold. I am convinced that we will see gold reach at least $600 per ounce in 2005. It's a great way to hedge against a falling dollar.

These steps may not seem like much on paper. But when the deluge comes they will give you a head start that may save your life.

More to follow

Michael C. Ruppert
Publisher/Editor

 


Thursday, December 09, 2004

Martis Valley

The proposed 25,000 acre Martis Valley Community Plan calls for the development of over 6,000 new housing units – enough development for a total urban population of around 20,000 – plus up to 600,000 square feet of stores and restaurants, and three golf courses, on 25,500 acres along California Highway 267. This stretch of grassy plain and mountain pine woods is located next to Truckee, California, and is just over a Sierra mountain ridge from beautiful Lake Tahoe. The average altitude is just over 6,000 feet. Martis Valley, which is generally warm and dry in the Summer, is usually cold and covered with snow in the winter.


The Martis Valley Community Plan is very typical of development proposals now before County and Municipal agencies throughout the United States. It assumes there will always be enough fuel to heat the planned homes and commercial space, as well as enough fuel to support the transportation needs of the community. Propane, natural gas, gasoline and diesel are the petroleum lifeline of any community. They will be especially important to the people who buy homes and businesses in Martis Valley because this is a very energy intensive development. The warm summers will prompt the demand for air conditioning. The cold winters will place a heavy burden on fuel for heat. For most of the residents, Martis Valley will be a second home and the assumption is that they will commute from 90 to 500 miles every time they want to use it.


We need to remember that any new development now going through the approval process will be expected to provide residential housing and commercial space for a period of more than 50 years. It is therefore incumbent on planners to give careful consideration to the following long term questions: What will these people use for heat? How will they cook their food? Are there adequate resources for diesel and gasoline fuels? If there are petroleum shortages, will they be able to use wood and coal for heat?


The Sierra Club objects to the Martis Valley Community Plan for the usual environmental reasons, calling the plan illegal and irresponsible. They never made their case. For what ever reason, the Sierra Club appears determined to ignore the key issue of petroleum resource depletion and the human suffering it will inevitably cause.


California Attorney General Bill Lockyer came closer to the key issue. He fired off a letter to the Placer County Board of Supervisors, telling them their Martis Valley Community Plan  fails to meet the requirements of the California Environmental Quality Act (CEQA) which requires a ''good-faith effort at full disclosure'' of ''potential impacts of development,'' ….


The Placer County Board of Supervisors has jurisdiction over the approval process. Like most American county and municipal governments, it is not required to address – or even acknowledge – the impact of oil and natural gas depletion on the project, the environment, or the people who will live and work in the development after it has been completed. There is no mechanism for addressing petroleum resource depletion in the development approval process.


We should be wary of this omission.  The development plan for Martis Valley is a really good example of obsolete public policy. In an era when we Americans should be developing a less energy intensive culture, our political leaders want us to believe there is an unlimited supply of natural gas and oil to sustain whatever lifestyle we chose.


If the Martis Valley Community Plan ignores the reality of oil and natural gas depletion, then what are the probable consequences?  What desperate measures will people will take when they are freezing? What chaos will ensue when they realize that fuel shortages have actually trapped them in a cold and unforgiving environment?  Are we not forgetting what happened in nearby Donner Pass?


When there is a shortage of fuel for heat and cooking, these home owners will do what man has always done – they will use wood for fuel. And then they will discover that coal works better as a fuel because it is a more efficient source of heat. The ensuing pollution will blanket Martis Valley in a thick, dirty, smog. In the winter, large areas of white snow will become a blackened mass of frozen soot.


Is that what we want?


Of course, environmentalists in Sacramento will pass a law prohibiting the use of coal. And the folks on the Air Resources Board will have a collective bureaucratic paroxysm. Unfortunately, both groups will miss the point. The people who are left in Martis Valley will resist any attempts to prevent them from using wood and coal. Half frozen fingers can still pull the trigger.


I know what you are thinking.  This all sounds really, really far fetched.


OK.  Don't believe me.  Go ahead.   Dismiss my commentary.  Feign ignorance.  Espouse denial.  All this depletion stuff is nonsense.  Right?  Oil depletion is a politically incorrect subject. Considering the potential use of coal to keep people warm is political suicide.  Pretend there will always be enough petroleum to meet our needs.  Keep on approving energy intensive projects.


To be on the safe side, our political leaders should protect themselves from the ferocious criticism that will fall like hail when petroleum shortages inflame the electorate. Failure to prepare for the future will come back to haunt incumbents at all levels of government.  Feigned ignorance will not provide any protection.  Voters will ask one simple question: "Why did you let this happen to us?"  Our political leaders will not be able to escape the pointed finger of accusation. Too many voices have warned that oil depletion is upon us and natural gas depletion will follow in a heart beat.


Petroleum resource depletion must be addressed in the legislative process. Energy conservation and production must become an essential element of public policy. The future of our country is at stake.


I have three concrete proposals for the Washington political establishment. 


First: If we are going to save our collective butts in a timely fashion, resource depletion and energy production must be a non-partisan effort. We are not Democrats, Republicans, Conservatives or Liberals.  We are Americans.  If we run out of petroleum, all of us will be cold, hungry and stranded.


Second: Ask the Department of Energy (DOE) to lay it all out for us. Examine the probabilities of oil and natural gas depletion. Build on the existing DOE data base with a set of credible scenarios. Pull together a realistic assessment of our energy alternatives.  Assemble a team of geologists, economists, and industry personnel at a conference in 2005 to explain the results. The first step in dealing with any complex problem is to clearly define the key issues. Then we can quantify and qualify the steps that must be answered in order to avoid economic and cultural chaos.


Third: Recognize that it will take a BIG, well managed, dedicated and focused organization to manage the ensuing program. Instead of throwing money at a bunch of nice ideas, plan on establishing a carefully crafted program of energy research, development, production and distribution. The details of this program should be a natural result of the DOE/EIA study.


Then make the right decisions.  Favor no one.  Promote goodwill to all.


Is that too much to ask?


It's time to put our collective pressure on the Washington political establishment. We must shift from an energy intensive culture to an energy prudent culture.  Let Martis Valley be our example of bad planning. If we fail, public policy will continue to encourage an energy intensive culture –


until it falls off a cliff.


Ronald R. Cooke


The Cultural Economist


Ron is the author of "Oil, Jihad and Destiny", a book which provides an assessment of world oil production, characterizes the economic devastation of oil depletion and suggests solutions to the emerging energy crisis. 


Details of Oil, Jihad and Destiny may be found at www.futurereality.blogspot.com. It is available for purchase at www.booksurge.com


 


The Decline of Oil

Coast To Coast AM
(Click link to listen to streaming audio of this broadcast)

Editor of Museletter, Richard Heinberg shared an in-depth look at the decline of oil production which he suggested was likely to occur before 2010. Among the ramifications of this would be the steep rise in price of gas, food, and other products, and the lowering of our standard of living, he said. "Planned war" with other countries over the remaining oil resources, was another likely outcome, he added.

"No one wants to tell us that our lifestyle is fundamentally unsustainable," but eventually people will begin buying small hybrid cars and using energy more conservatively, said Heinberg. And as prices go up, citizens will be motivated to find better political leadership on energy issues, he continued. What passes for an energy policy in the U.S. now is a "cruel joke," he declared.

In order to properly deal with the coming energy crisis, we need an effort on the scale of World War 2, he said, with hundreds of billions of dollars spent per year in building alternative energy infrastructure. Solar and wind power could be developed to a much higher degree on a local level, and home building materials such as straw bale can be used to conserve more energy, Heinberg detailed.


Wednesday, December 08, 2004

No Escape from Dependency

MotherJones.com

When George W. Bush entered the White House in early 2001, the nation was suffering from a severe "energy crisis" brought on by high gasoline prices, regional shortages of natural gas, and rolling blackouts in California. Most notable was the artificial scarcity of natural gas orchestrated by the Enron Corporation in its rapacious drive for mammoth profits. In response, the President promised to make energy modernization one of his top concerns. However, aside from proposing the initiation of oil drilling in Alaska's Arctic National Wildlife Refuge, he did little to ameliorate the country's energy woes during his first four years in office. Luckily for him, the energy situation improved slightly as a national economic slowdown depressed demand, leading to a temporary decline in gasoline prices. But now, as Bush approaches his second term in office, another energy crisis looms on the horizon -- one not likely to dissipate of its own accord.

The onset of this new energy crisis was first signaled in January 2004, when Royal Dutch/Shell -- one of the world's leading energy firms – revealed that it had overstated its oil and natural gas reserves by about 20%, the net equivalent of 3.9 billion barrels of oil or the total annual consumption of China and Japan combined. Another indication of crisis came only one month later, when the New York Times revealed that prominent American energy analysts now believe Saudi Arabia, the world's largest oil producer, had exaggerated its future oil production capacity and could soon be facing the wholesale exhaustion of some of its most prolific older fields. Although officials at the U.S. Department of Energy (DoE) insisted that these developments did not foreshadow a near-term contraction in the global supply of energy, warnings increased from energy experts of the imminent arrival of "peak" oil -- the point at which the world's known petroleum fields will attain their highest sustainable yield and commence a long, irreversible decline.

How imminent that peak-oil moment may in fact be has generated considerable debate and disagreement within the specialist community, and the topic has begun to seep into public consciousness. A number of books on peak oil -- Out of Gas by David Goodstein, The End of Oil by Paul Roberts, and The Party's Over by Richard Heinberg, among others -- have appeared in recent months, and a related documentary film, The End of Suburbia, has gained a broad underground audience. As if to acknowledge the seriousness of this debate, the Wall Street Journal reported in September that evidence of a global slowdown in petroleum output can no longer be ignored. While no one can say with certainty that recent developments portend the imminent arrival of peak oil output, there can be no question that global supply shortages will prove increasingly common in the future.

Nor is the evidence of a slowdown in oil output the only sign of an unfolding energy crisis. Of no less significance is the dramatic increase in energy demand from newly-industrialized nations -- especially China. As recently as 1990, the older industrialized countries (including the former Soviet Union) accounted for approximately three-quarters of total worldwide oil consumption. But the consumption of petroleum in developing nations is growing so rapidly -- at three times the rate for developed countries -- that it is soon expected to draw even.

W are more dependent on foreign oil in 2004 than we were in 2001, and all the indicators suggest that this dependency will only become more pronounced during Bush's second term. Yes, the administration has proposed modest investment in the development of hydrogen-powered fuel cells and other new energy systems; but, at current rates of development, these new technologies will not prove capable of substituting for oil on a significant scale during the next few decades. This means that we will face our looming energy crisis with no viable fallback measures in sight. We remain trapped in our dependence on imported oil. In the long run, the only conceivable result of this will be sustained crisis and deprivation.

When, and in just what form, the United States enters the coming energy crisis cannot be foreseen. Perhaps it will be provoked by a coup d'état in Nigeria, a civil war in Venezuela, or a feud among senior princes in the Saudi royal family (possibly brought on by the impending death of King Fahd). Or it could be thanks to a major act of terrorism or a catastrophic climate event. Whatever the case, our existing energy system, already stretched to its limits, will not be able to absorb a major blow like this without considerable readjustment and pain -- or worse. While President Bush is likely to respond to a new energy crisis, as he has in the past, with renewed calls for drilling in ANWR and the further relaxation of U.S. environmental standards, nothing he has proposed to date even suggests a viable exit strategy from perpetual crisis.


Tuesday, December 07, 2004

The End of Fossil Fuels - How Long the Twilight?

npg.org

World crude oil production rose from negligible in 1900 to about 80 million barrels per day (mbpd) a century later. U.S. consumption of crude oil and natural gas have both risen more than 100-fold since 1900. In that period, world and U.S. populations nearly quadrupled, but the dramatic per-capita increase in petroleum use lies at the heart of "The American Century."

The age of reliance on fossil fuels has been extraordinary both for its swift rise and its prospective brevity. It has supported a remarkable growth in prosperity in the industrial world. The return to reliance on the sun's annual radiation of energy to the Earth will be a painful comedown.

Our political and business "leaders" seem generally oblivious to the unique character of the fossil fuel age. They consider growth the natural and desirable order of affairs and call for more of it - an outlook influenced more by greed than reflection. When warned of the brevity of the fossil era and the dangers it is creating, they defend the status quo or, when pressed, offer simplistic panaceas such as the hope that hydrogen or wind and solar energy will solve our problems. By themselves, they will not.

Fossil and Renewable Fuels in the U.S. In the United States, we consume 97 quads (quadrillion British Thermal Units) or 102 exajoules (quintillion joules) of commercial energy each year. Of that, petroleum furnishes 39 percent, natural gas 24 percent, and coal 23 percent. Taken together, fossil fuels contribute over 86 percent of our total energy. Nuclear power, which is a fossil fuel in the sense that it relies on ores from earlier geological times, provides another 8 percent. Renewable energy provides just 6 percent, almost entirely from hydroelectric power and biomass; wind energy provides 0.1 percent and solar electricity - which is presently much in vogue - much less than that, or 1/1500th of the total.

Fossil Fuels' Role in the Economy. The U.S. economy is built on fossil fuels. Of those 97 quads of total primary energy, 40 percent (mostly from coal, natural gas and nuclear energy) goes to produce electricity, which of course is then used throughout the economy, 27 percent (almost all of it petroleum) goes directly to transportation, and 22 percent goes to industry and agriculture (divided about equally between petroleum and natural gas). The remaining 11 percent goes to the household and commercial sectors.

Fossil fuels provide services other than energy. About 9 percent of total primary fossil fuel use is used as industrial feedstocks, not as energy: fertilizer, pesticides, pharmaceuticals, plastics, textiles and artificial leathers, tires, asphalt, lubricants and waxes - many of the things we rely on. Roughly 28 percent of those feedstocks come from petroleum, 24 percent from natural gas liquids, 11 percent from natural gas itself, 9 percent from coal, and the remaining 28 percent from cellulose materials such as wood scraps, sawdust, other by-products of the lumber industry, cane sugar bagasse and paper mill pulp. No discussion of the role of fossil fuels in modern economies can afford to ignore their role as feedstocks.

The Future of Oil and Gas

What Energy Transition? The experts say that, so far, the world has consumed less than half, and perhaps less than one-third, of recoverable petroleum resources. Why are they so worried about running out of oil? The answer lies in the astonishing growth of the enterprise. The oil era really got under way only about 1940, and yet already - because of the speed at which consumption has grown - we can foresee the end of the petroleum era and of the economic system that has grown on it. For the United States, the domestic game is about over. Our crude oil production has been declining at an accelerating rate for thirty years. We now import 62 percent of our crude oil and, with less than 5 percent of the world's population, we consume one-quarter of world production. We can eke out a few decades of dependence on oil and gas only if we can import it.

Worldwide discoveries of new oil fields peaked over 40 years ago, despite intensified and increasingly sophisticated exploration efforts and extraction techniques. Non-OPEC production has probably peaked, and worldwide production is expected to peak very soon.


Totalitarian Agriculture

(Totalitarian agriculture is a close cousin to peak oil)

Ishmael.org

Food DISTRIBUTION is not the issue. Nor is "dependence on agriculture" the issue. Just as the people of our culture believe that we are humanity itself, we have the idea that the agriculture we practice is agriculture itself. Let's start with that. Agriculture is simply a means of promoting the regrowth of the foods people favor. In that sense, virtually all Leaver peoples practice or practiced agriculture. But merely promoting the regrowth of the foods you favor doesn't automatically make you totally dependent on agriculture. One people may grow very little; another may grow a bit more; another a bit more still; another quite a lot. There is no single degree of production that makes you an agriculturalist. (Even we don't grow 100% of our food.) Leaver peoples around the world have lived for thousands of years as agriculturalists (to answer your question about whether it's "possible for a society dependent upon agriculture to live sustainably").

We practice a unique form of agriculture that I've called Totalitarian Agriculture, which is based on the idea that, since the world itself belongs to us, all the food in it belongs to us as well. In other words, we can (1) take any food formerly available to other species and lock it up for our exclusive use, (2) destroy any species that competes with us for our food, and (3) clear any piece of land of food formerly available to other species and use that land to grow food for our exclusive use.

Totalitarian Agriculture began to be practiced among us at a time when the world wasn't thought of as having any limits. It was assumed (even if it was never explicitly so stated) that the world was of infinite extent, and if this were the case, there would be no problem. In fact, however, the world is a place of distinctly finite limits. There is only so much food-bearing land (land that will sustain life) and only so much food-bearing water. We can't increase either of these commodities (though we can reduce them and ARE reducing them), and we can't increase the amount of sunlight that falls on our planet, from which ultimately all life (and therefore all food) derives.

Here's another way of saying this: at any one time, there's only so much biomass on earth (biomass being the mass of living material). The amount of biomass varies, but only over very long periods. When we cleared the Great Plains of all the plants and wildlife that was living there and converted this land to the growth of human food, we didn't increase the biomass of this region, we merely converted the biomass that was already there into human food (and ultimately into human MASS).

Three million years ago, the percentage of biomass that was human mass was negligible (perhaps equivalent to the biomass of gorillas today). Ten thousand years ago the percentage of biomass that was human mass was still very small. But with the advent of Totalitarian Agriculture, that changed very rapidly. Humans (of our culture) now account for a very sizable percentage of the earth's biomass (and that percentage increases daily). It's estimated that, with our population at six billion, as many as 200 species become extinct every day as a result of our impact on the world. When these species become extinct, their biomass doesn't disappear; it's simply converted into human food and ultimately into human mass. When we cut down a million-acre rain forest to put the land to the plow or to turn it into pasturage for cows, its biomass is turned into human food and ultimately into US. As our population increases, the number of disappearing species will increase (and probably geometrically).

Even though there are hundreds of millions of species, it can't be imagined that eliminating 200 every single day is a sustainable way to live. The community of life as a whole is what makes this planet livable, and it's absurd to imagine that we can reduce that community to ourselves and a few hundred food species we like to eat. We're like people living at the top of a tall building who every day go downstairs and knock 200 bricks out of the walls here and there. For a time (since there are hundreds of thousands of bricks in those walls), no change appears. But if this goes on long enough, the structure itself must inevitably collapse--and not in a gradual way. We live in a period of mass extinctions, brought on by our own actions, estimated to be a thousand times greater than in normal times. The victims of this mass extinction are not just going to be species we imagine we can live without (hornets, rattlesnakes, gophers, sharks, rats, poison ivy), they're going to be species upon which ALL "higher" life forms depend--including us. It isn't as though we're able to pick and choose which species are to disappear. Ultimately, if we go on in this way, the human species will disappear along with the rest, leaving the cockroaches in command.

This by no means answers all questions on this topic. Those who want more information might have a look at FOOD PRODUCTION AND POPULATION GROWTH, a three-hour video I produced with conservation biologist Alan D. Thornhill, available at http://www.newtribalventures.com/market/.