Category Archives: Peak Oil

King Romney’s Dream for America: Slave Labor in Barb-Wired Factories & a Double Down on Fossil Fuels

26 Sunday Aug 2012

Posted by in Capitalism, Corporate State, Environmental Degradation, Inequality, Peak Oil, Wall Street Fraud

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On the Labor front….

I came across the above video yesterday evening. It’s a recording of Mitt Romney recounting his days at Bain Capital when he was off-shoring U.S. manufacturing to slave labor camps in China. From the video I’m assuming that America’s gift to the world, as Romney refers to it, is neoliberal capitalism and the privilege that economic system brings to the masses who can enjoy working for pennies per hour in a sweatshop factory complete with dormitories holding “12 girls per room”, all of which is enclosed by barb-wired fencing. And as Romney relates, the fences are to keep the hoards of people out who are dying to fill a position in the factory as soon as someone falls over. For Romney and the typical vulture capitalist, this is a wet dream: endless numbers of cheap laborers ready to fill assembly-line positions which are unencumbered by unions, safety regulations, and basic rights for workers. In such factories humans are reduced to cattle in order to extract the maximum profit. A Foxconn executive expressed the general sentiment of corporate capitalists when he referred to his workers as “animals” earlier this year. Despite recent reports by the Fair Labor Association (FLA) on the heels of an eye-opening report on labor conditions, the reality on the ground, as Romney can attest to from his days at Bain, is the same as it ever was:

As reported here, China Labour Watch is claiming that bribery is undermining the audit system. China Labour Watch founder Li Qiang has not minced his words: “Although the working hours at Foxconn have been reduced to less than 60 hours per week, the intensity of the hourly work has been increased. According to our follow-up investigation, the workers have to complete the workload of 66 hours before within 60 hours now per week. As a result, the workers get lower wages but have to work much harder and they are not satisfied with the current situation. The harsh working conditions are by no means isolated to just Foxconn but exist throughout Apple’s supply chain. However, that report only focused on Foxconn factories. It is Apple’s entire supply chain system that should be responsible for the squeezing of workers.”

On the Energy Front:

King Romney is going to double down on fossil fuels in America, further dismantling regulations and awarding more tax breaks for Big Oil:

Romney unveiled his energy plan, which makes no mention of climate change and focuses on reaching energy independence by 2020 through increased extraction and use of oil, gas and coal, accompanied by reduced regulation for these industries.

The plan underlines the fact that the Republican Party and the oil, gas and coal industries, long in agreement on policy and ideology, have grown closer than ever before. Romney, whose top energy adviser is the wealthiest oilman in the country, is on pace to raise more money from these industries than either George W. Bush or Sen. John McCain (R-Ariz.) did when he ran for president. The industries are also pumping millions into the new unlimited money vehicles, super PACs and dark money nonprofits, that are spending tens of millions of dollars per month to influence the election…

…A central part of the plan is taking the power to permit and license new onshore drilling on federal lands out of the hands of the federal government and putting it into the hands of the states. That means that states like Alaska or North Dakota, which is enjoying a massive oil boom under the current regulatory regime, would be able to allow drilling on federal lands with no oversight from Washington.

North Dakota stands out, in particular, as it is where Romney’s top energy adviser, oil billionaire Harold Hamm, is making his fortune. Hamm, whose stump speech is only three words, “Beat Barack Obama,” has given $985,000 to Restore Our Future and raised money for the Romney campaign. He would profit greatly from this change in policy as his company, Continental Resources, would be freed to drill beyond the Bakken fields in North Dakota using techniques including hydraulic fracking and horizontal drilling….

…Among many other policies supporting the industry, Romney calls for a repeal of regulations limiting the amount of mercury, a hazardous pollutant, that can be emitted from coal and oil power plants…

Overlooking the catastrophic externality of climate change, notice that Romney is heralding America’s energy independence through his plan of ‘Drill, Baby, Drill’ of fossil fuels. If you look at the following graph, you’ll see that there is no amount of drilling we could do within America to achieve fossil fuel energy independence:

As you can see, America hit peak oil around 1970 at 9.637 mbpd (million barrels per day), as predicted by Hubbert, and then in 1993 America’s domestic oil production was surpassed by consumption, a point from which we have never recovered. Even with the recent drastic drop in consumption due to an anemic economy, we are still importing around 10 to 11 MBPD while domestic production is somewhere between 7 to 8 MBPD. Domestic production would have to double from the current rate or total consumption, which sits currently at roughly 18 to 19 MBPD, would have to be halved while allowing for the requisite economic growth that we worship. That’s not going to happen. As Loren Steffy explains, “U.S. oil production gains are like water pumps on the Titanic“:

…The much-ballyhooed increase in U.S. production simply isn’t enough to have a meaningful effect on global oil prices, which doubled from 2005 to 2011. That ultimately is the biggest factor in setting prices for retail gasoline.

U.S. production gains look impressive, but much of it offsets declines earlier in the decade because of major hurricanes that disrupted offshore and Gulf Coast facilities. Domestic production was 7.5 million barrels a day in 2010, according to the Energy Information Administration, and that number probably increased to about 7.7 million barrels last year, estimates Jeffrey Brown, an independent petroleum geologist in Fort Worth who writes frequently on oil issues.

In 2004, before the spate of hurricanes, production was 7.2 million barrels. That means domestic production hasn’t increased more than about 500,000 barrels a day despite the fracking binge and other efforts to encourage drilling. During the same period, net exports for all countries in North America — including Canada, Mexico and Venezuela, some of our biggest suppliers — fell by 1.4 million barrels, or 23 percent, according to Brown’s analysis.

Brown compares the situation to water flowing into the Titanic after it hit the iceberg.

“Let’s assume that water is pouring into the ship 10 times faster than than water is being pumped out,” he said. “The water being pumped out is analogous to the slow increase in U.S. crude oil production. The water flowing in is analogous to declining annual net exports. Guess which metric most people seem to be focused on?”

That doesn’t even account for China, India and other rapidly developing countries, whose oil imports are rising sharply, increasing the competition for oil with countries like the U.S.

“So, while slowly increasing U.S. crude oil production is very important, the dominant trend we are seeing is that developed oil importing countries like the U.S. are being gradually priced out of the global market for exported oil,” Brown said…

King Romney, nevertheless, will use the rallying call of his energy plan to increase domestic oil production, with its attached gifts of even more environmentally destructive deregulation and kleptocratic giveaways to Big Oil from the taxpayer, as a reason for voters to put him into the White House. But as pointed out at Fair.org, this is all a smokescreen manipulating public perception:

In a New York Times story (8/24/12) about Mitt Romney’s energy proposals, reporters Eric Lipton and Clifford Krauss make this observation:

With gasoline prices again approaching $4 a gallon, Mr. Romney, the presumptive Republican nominee, is also trying to merge energy and economic policy in a way that will make voters see increased energy production as a pocketbook issue.

Note that Lipton and Krauss don’t say that increased U.S. energy production will actually affect the $4-a-gallon price of gas and hence the voters’ pocketbooks; that would be inaccurate, since oil is a global commodity and it’s impossible for the U.S. to increase its production enough to change it substantially. In fact, with the formulation “in a way that will make voters see,” the Times  reporters suggest that they are well aware that increased oil drilling will not actually alter gas prices–that this is a matter of changing public perceptions, not economic realities.

But then, Lipton and Krass don’t do anything in their piece to let the reader know that the implied connection between increased drilling and lower gas prices is fraudulent…

The doublespeak used by politicians of all stripes to bend reality is the same as it ever was.

The System Has Reached Entropy

24 Friday Aug 2012

Posted by in Capitalism, Climate Change, Consumerism, Corporate State, Empire, Environmental Degradation, Inequality, Military Industrial Complex, Peak Oil, Pollution, Wall Street Fraud

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Click to Enlarge…

Getting It Wrong on Natural Gas

21 Tuesday Aug 2012

Posted by in Capitalism, Corporate State, Environmental Degradation, Peak Oil, Pollution, Wall Street Fraud

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This guy Friedman sparked my interest from the last post on America’s corporate talking heads, so I looked to see what Tom has been writing about recently (Get It Right on Gas) and thought I’d dispel Tom’s delusional corporate-funded views about natural gas in America. But before I do that, I little history on Tom:

Thomas L. Friedman won the 2002 Pulitzer Prize for commentary, his third Pulitzer for The New York Times. He became the paper’s foreign-affairs Op-Ed columnist in 1995. Previously, he served as chief economic correspondent in the Washington bureau and before that he was the chief White House correspondent. In 2005, Mr. Friedman was elected as a member of the Pulitzer Prize Board.

In a recent essay, Glenn Greenwald, who by the way is now writing for the UK Guardian, described Friedman in the following manner:

If I had to pick just a single fact that most powerfully reflects the nature of America’s political and media class in order to explain the cause of the nation’s imperial decline, it would be that, in those classes, Tom Friedman is the country’s most influential and most decorated “foreign policy expert.”

Now on to Friedman’s misinformed article about natural gas in America, Get It Right on Gas, which gets it totally wrong on natural gas. In the article, Friedman calls America’s natural gas deposits a “potential game changer” and that it “may soon be powering cars, trucks and ships as well.” It’s the usual spiel we’ve been hearing for several years now. The reality is that the supposed natural gas boom is indeed a financial Ponzi scheme on a grand scale based on false claims of economically recoverable reserves. Remember last year the news story about internal documents from financial insiders and experts of gas drillers that surfaced? Various internal memos said the following:

An August 2009 memo from the firm IHS Drilling Data says, “The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work.” Earlier this year, an analyst at PNC Wealth Management compared natural gas projects to the dot-com boom, saying, “money is pouring in” even though drilling is “inherently unprofitable.” In another memo, a retired geologist for a major oil giant writes, “These corporate giants are having an Enron moment… They want to bend light to hide the truth.”

Off the back of that news story from last year comes the following revelation from business insider Wolf Richter, as quoted in an Automatic Earth article:

…thanks to the Feds zero-interest-rate policy and the trillions it has handed over to its cronies since late 2008, the sweeps of creative destruction have broken down. Instead, boundless sums of money have been searching for a place to go, and they’re chasing yield when there is none, and so they’re taking risks, any kind of risks, in their vain battle to come out ahead…

…But the money has dried up. And drilling for natural gas is collapsing. Last week, there were only 562 rigs drilling for dry natural gas, the lowest number since September 1999…

…At $2.53 per million Btu at the Henry Hub, the price of natural gas is up 33% from the April low of $1.90 per million Btu, a number not seen in a decade.

…even if it doubled, it would still be below the cost of production. And if it tripled, it might still be below the cost of production for most producers. That’s how mispriced the commodity has become.

The economics of fracking are horrid. All wells have decline rates where production drops over time. But instead of decades for traditional wells, decline rates in horizontal fracking are measured in weeks and months: production falls off a cliff from day one and continues for a year or so until it levels out at about 10% of initial production. To be in the black over its life under these circumstances, a well in the Barnett Shale would have to sell its production for about $8 per million Btu, pricing models have shown….

…Drilling is destroying capital at an astonishing rate, and drillers are left with a mountain of debt just when decline rates are starting to wreak their havoc. To keep the decline rates from mucking up income statements, companies had to drill more and more, with new wells making up for the declining production of old wells. Alas, the scheme hit a wall, namely reality…

It’s interesting to note that the Russian gas company, Gazprom, hired an American consulting firm just 20 miles from the White House in Fairfax, Virginia to analyze the economic viability of the natural gas “boom” in America. With the data collected by Pace Global Energy Services, Gazprom concluded the following:

“We think the current US gas market model is unsustainable in the medium and long term,” Komlev told Platts via email. “We forecast that soon, the disparity between the shale gas costs and sales price will disappear. When it happens, it will make the US plans to become a major gas exporter economically unviable.”

…Based largely on Pace’s review of quarterly earnings reports and other financial data from US gas companies, Gazprom says the true costs of shale-gas production are upwards of 150% higher than the revenues its practitioners have been reaping in the last few years. But companies are continuing to use the approach for now, Komlev says, because they are also producing some higher-priced gas liquids in the process.

Gazprom also believes that shale-gas drillers will incur additional costs to ensure that the chemicals they use in the fracking process will not contaminate underground sources of drinking water.

In a May 2012 article, Dmitry Orlov quotes Gazprom’s chairman, Alexei Miller:

“Shale gas is a well-organized global PR-campaign. There are many of them: global cooling, biofuels.” He pointed out that the technology for producing gas from shale is many decades old, and suggested the US turned to it out of desperation.

In addition to the poor or nonexistent EROEI and short life of shale gas wells in the U.S., Orlov also brings up a problem I was not aware of with Marcellus Shale, and that is its radioactivity:

Thanks to Marcellus shale gas, radioactive radon gas is being delivered directly to your kitchen, via the burners of your stove, or to a power plant smokestack upwind from where you live. This is expected to result in increased lung cancer rates in the coming years.

Michael Miller, writing an article for the Anton News of New York, had this to say about the natural gas bubble:

Last week, three Bradford County families reached a $1.6 million settlement with Chesapeake Energy of Oklahoma City (“America’s Champion of Natural Gas”), compensation for the ruination of their water wells by methane gas migrations from nearby high volume hydraulic fracturing (“fracking”) operations. This is the first time ever that details of a Marcellus Shale settlement have been revealed to the public, at the insistence of the families…

…Gas companies sold large chunks of futures last year at more than $5 per million BTU. Even if they’re still doing well on paper, these prices are far below the cost of production. Chesapeake Energy now leases drilling rights on over 15 million acres of land (more than eight times the area of Nassau and Suffolk Counties) and makes its profits mostly by flipping properties. In 2010, the company sold land it had purchased in Texas for $2,000 an acre to a large Chinese oil company for $11,000 an acre, making a profit of $2.2 billion…

…Natural gas wells can’t compete for investment capital with oil wells, which have a much higher “Energy Returned On Energy Invested” ratio (after only several months, sometimes only several weeks, production from fracked wells falls off the table and levels off at about 10 percent of initial production). That’s why gas companies are flooding daytime television and the halls of the State Capitol in Albany with millions of dollars in advertising and lobbying power, trolling for small investors and warning off politicians who might be tempted to meddle. And this has been working.

Many of us, exposed to the incessant propaganda, think that America is poised to become the energy-exporting powerhouse it once was, if only the government would get out of the way. In fact, the natural gas industry as we know it wouldn’t exist without massive subsidies and tax breaks. Last week, it was reported that since its founding 23 years ago, Chesapeake Energy has paid only $53 million on its $5.5 billion in profits.

The U.S. Department of Energy has cut its estimate of gas available in the Marcellus Shale by nearly 70 percent. A Colorado School of Mines report estimates that the U.S. has a recoverable gas supply of 23 years, not the “near 100-year supply” that President Obama still talks about as a centerpiece of his energy plan.

Recently, a coalition of 55 institutional investors with over $1 trillion in assets called on companies involved with shale gas fracking to police themselves and reign in the tactics that are turning off America and putting everybody’s money at risk. T. Boone Pickens, the billionaire who toured the country promoting natural gas as the answer to our country’s energy problems, announced in May that he was “out of the natural gas stocks…We didn’t like natural gas.”

The money is talking.

There are no easy answers to our energy, climate and fiscal situations, and fossil fuels are made mostly of carbon, not magic.

I contacted Michael Miller by email and asked for his sources which he emailed me, also telling me other sources included personal contacts of “people in government, particularly Albany.” So there you have it. The natural gas boom is pretty much a bust egged on by low-interest loans by the Fed, financial shenanigans of energy corporation executives, and America’s desperation for energy in the age of peak oil. I did not get into the other major environmental disasters of gas fracking in this post, but I have talked about them in Profiting Off Acts of Desperation, and I posted the mini-documentary “The Sky is Pink” here. I noticed that Josh Fox, producer of the aforementioned documentary, made a comment on Tom Friedman’s article:

Recently, politicians and publications have conditionally endorsed so-called “safe fracking” as a part of the nation’s energy mix. But safe fracking is an impossibility, and the industry’s claims for it are knowingly based on false premises.

Chief among them is the notion that a “leakproof well” is possible. We’ve heard time again that strict regulation is the key to moving forward on fracking, and that new regulations should make sure that industry constructs leakproof wells that do not pollute the water table. There is no such thing as a leakproof gas well. The gas industry knows this; in fact, it has known it for decades.

I recently made a short film addressing the well casing failure issue called THE SKY IS PINK and you can watch it here: www.pinkskyny.com.

A 2003 joint industry publication from Schlumberger, the world’s No. 1 fracking company, cites astronomical failure rates of 60 percent over a 30-year span. To imagine gas companies voluntarily committing to an eternity of costly maintenance on wells failing at ever-increasing rates is beyond credulity. “Safe fracking” is a contradiction in terms.

Leaking gas wells at these rates mean thousands across the nation have enough contaminants in their water and land to render them unfit for residential use.

It’s not only the gas wells that have integrity problems; it is the oil and gas industry itself. We can believe in their self-interested assertions of leakproof wells about as much as we can expect pigs to fly.

In addition to what Josh mentioned above, a 2009 Cornell University study suggests that Shale Gas may be worse than coal as far as greenhouse gas emissions are concerned, with substantial levels of methane leaks traced back to underground Shale Gas operations. Will America’s natural gas reserves make it energy independent? I’ll believe that when pigs fly.

Post Script: I just noticed that the other major corporate mouthpiece, Fareed Zakaria, is also singing the praises of America’s wondrous bounty of natural gas…

As long as there’s sheople to fleece, you’ll have people like Thomas Friedman and Fareed Zakaria filling the corporate airways.

Also see:

Is Fracking DOA in NYS? 

Update on the Embattled Water-Energy-Food Nexus

18 Saturday Aug 2012

Posted by in Climate Change, Ecological Overshoot, Environmental Degradation, Peak Oil, Pollution

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I’m working on adding graphics and trimming down a couple videos made from an extraenvironmentalist podcast of interviews with energy specialists Chris Nelder and Gregor Macdonald; but in the meantime, here is an update on the water-energy-food nexus exacerbated by climate change which I blogged about here. The social consequences are spelled out:

…US farms are already crippled: the Department of Agriculture says the corn (maize) crop is likely to be the worst since 1995. As a result, the Food Price Index (FPI) of the United Nations Food and Agriculture Organization rose 6 per cent in July, to 213.

That is dangerously high, says Yaneer Bar-Yam of the New England Complex Systems Institute in Massachusetts. He has found that if the FPI goes above 210, riots and unrest become more likely around the world. Both the 2011 Arab Spring and the 2008 riots in places such as Mexico, India, Russia and Belgium may have been partly triggered by high food prices.

More unrest is likely in the next year, although we cannot predict where, says Bar-Yam. That depends on how governments respond… – source

…and on the energy and water front:

…Power plants are a hidden casualty of droughts, says Barbara Carney of the National Energy Technology Laboratory (NETL) in Morgantown, West Virginia, because they are completely dependent on water for cooling and make up about half the water usage in the US. That makes them vulnerable in a heat wave. If water levels in the rivers that cool them drop too low, the power plant – already overworked from the heat – won’t be able to draw in enough water. In addition, if the cooling water discharged from a plant raises already-hot river temperatures above certain thresholds, environmental regulations require the plant to shut down.

One nuclear plant in Connecticut recently had to shut down because the sea water used for cooling was too warm. Nationwide, nuclear generation is at its lowest in a decade, with the plants operating at only 93 per cent of capacity.

Nuclear is the thirstiest power source. According to NETL, the average nuclear plant that generates 12.2 million megawatt hours of electricity requires far more water to cool its turbines than other power plants. Nuclear plants need 2725 litres of water per megawatt hour for cooling. Coal or natural gas plants need, on average, only 1890 and 719 litres respectively to produce the same amount of energy….

Bio fuel thirst

Reports of how much energy the US has generated this summer won’t be released for some months, he says. The North American Energy Reliability Corporation’s most recent report (PDF) calls the drought outlook “not optimistic” for energy, but says that most of the US should be able to meet its energy demands this year. The exception is Texas, where resources are expected to be tight.

Utility-scale power isn’t the only energy source being hurt by the drought, however. With corn harvests expected to be as low as 75 per cent of normal yields, biofuel production is also suffering. Compared to other energy sources, biofuel production requires the most water.

…Arjen Hoekstra of the University of Twente in the Netherlands calculates the total water use of different industries – including not just cooling but every step in the supply chain as well. According to his “water footprint calculator”, biofuels require orders of magnitude more water than any other energy source… – source

Some farmers profit from the energy industry’s scramble for water while other farmers are fearful, holding back water for their crops…

…Select Energy sources water for oil companies in drilling hotspots across the country, and some landowners can make between $70,000 and $85,000 over the course of a year and a half by selling the water in their ponds to the company, said Mike Wilson, a regional sales manager at Select Energy.

But many landowners aren’t as willing to give up their water now that supplies have become so scarce.

“Farmers are scared about the water supply, too,” said Jeff Gordon, CEO of Texas Coastal Energy Co., a small oil company that began exploring in Kansas last year. “They are now saying, ‘We need to save our water for our crop and our livestock.’ ”

Related: Farmers hit the jackpot in Kansas oil boom

With two oil wells slated to be drilled in the next month, Texas Coastal is considering drilling its own water well at a cost of between $10,000 and $25,000.

Otherwise, it would have to pay to truck water in from out of state or buy it from local farmers and ranchers. Either method could add 3% to 4% to the overall cost of drilling an oil well. Depending on the size of the well and the amount of water required, that could add up to between $20,000 and $200,000.

To the oil companies, it’s worth it. With oil prices hovering around $90 a barrel and the cost to produce a barrel of oil only around $15, the profits are huge, said Gordon, whose company is still aggressively leasing mineral rights, which gives it rights to drill on certain properties.

If the drought worsens or persists for too much longer, however, it could threaten the oil boom, particularly among the smaller drilling companies that can’t afford the added costs and delays, he said.

Related: Boom chasers, next stop Kansas

“That can cripple a drilling company, as lack of water can basically suspend operations,” he said.

Petro River’s Alba said the drought won’t affect his current drilling plans, but he will carefully assess water availability before expanding into other areas of Kansas.

Scrambling to get the oil companies to stay: Mike Lanie, the economic development director in Harper County, which is at the center of the oil boom, is determined to keep oil companies from pulling out. – source

The United Nations Food and Agriculture Organization as well as the American livestock industry have recently urged Congress to suspend the ethanol mandate.

The financial drain on the system from the drought…

The U.S. government recently announced it would buy $170 million in various meats to help drought-stricken farmers. Other costs to the taxpayer from this epic drought include payouts from federal crop insurance programs:

Crop insurance losses: Your tax dollars on the hook
The drought of 2012 is also likely to result in record payouts from the federal crop insurance program. This taxpayer-funded program subsidizes insurance for farmers and also partially compensates private insurers, with additional emergency assistance that kicks in during extreme events like the current drought.

Last year, weather-related events led to crop insurance claims of $10.7 billion as of April 30, 2012. According to Bruce Babcock, a professor of economics at Iowa State University, this year’s losses could add up to $30 to $40 billion. Gary Schnitkey, a University of Illinois extension economist, calculates that 2012 insurance payouts for Illinois corn alone could top $3.2 billion. – source

Our response to the primary underlying cause of these increasingly disastrous droughts has been to find more drought-resistant crops and livestock. I suppose this strategy will work up to a point, but it doesn’t get at the root of the problem which is industrial civilization’s unbreakable marriage to fossil fuels.

King Romney: Stuck in Cognitive Dissonance

12 Sunday Aug 2012

Posted by in Climate Change, Peak Oil

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I did not waste my time reading King Romney’s 2010 book No Apology; The Case for American Greatness, but someone who did sacrifice some eyesight to it has some interesting observations which I’ll comment on. Romney may be the only Presidential candidate to explicitly acknowledge in writing the fact of peak oil:

Many analysts predict that the world’s production of oil will peak in the next ten to twenty years, but oil expert Matt Simmons, author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, presents a compelling case that Middle Eastern oil production may have already reached its peak.  Simmons bases his contention on his investigation into the highly secretive matter of the level of reserves in the Saudi oil fields. But whether the peak is already past or will be reached within a few years, world oil supply will decline at some point, and no one predicts a corresponding decline in demand. If we want America to remain strong and wish to ensure that future generations have secure and prosperous lives, we must consider our current energy policies in the light of how these policies will affect our grandchildren. (pg 233)

Romney also acknowledges climate change, but then enunciates the contradiction the vast majority of the population cling to, which is the notion that we can limit GHG within our fossil-fuel based industrial civilization while maintaining economic growth and business as usual. This fantasy will never be, even if we were able to magically enlarge the planet and its resource base in order to accommodate more growth. So in the end, Romney is not a true Peak Oiler. His “energy policies” ultimately involve the ubiquitous growth imperative:

“It’s impossible not to take a look at our current energy policies without considering the question of climate change.  I believe that climate change is occurring – the reduction in the size of global ice caps is hard to ignore.  I also believe that human activity is a contributing factor.” (pg 227)

Romney hedges this statement in the next paragraph by saying he is “uncertain how much of the warming is attributable to man and how much is attributable to factors out of our control.” Three pages later, Mitt concludes his discussion of climate change saying that “Internationally, we should work to limit the increase in emissions in global green house gases, but in doing so, we shouldn’t put ourselves in a disadvantageous economic position that penalizes American jobs and economic growth.”  (pg 330)

Isn’t it amazing that a person who may be the next President (even though it is just a PR position for the corporatocracy) can talk about the reality of peak oil while still mouthing the imperatives of economic growth? How long will this cognitive dissonance hold out? I give it no more than a decade, at the most, if our financial system manages to be kept propped up for that long. For to finally come to grips with the finiteness of the earth and its resources and the illusoriness of the economic growth dictate is to admit that the “American way of life” never was “non-negotiable.”

Climate Chaos: The Monkey Wrench that Unravels Everything

11 Saturday Aug 2012

Posted by in Climate Change, Ecological Overshoot, Environmental Degradation, Peak Oil, Pollution

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“The end of the human race will be that it will eventually die of civilization.”
~ Ralph Waldo Emerson

The water-energy-food nexus is an interlocking problem. For example, biofuel production takes land and water away from food production. Besides the contamination to water reservoirs, the process of hydrofracking and tar sands utilizes massive amounts of water which could otherwise be saved for farming:

Oil sands extraction uses significant amounts of water (2-4.5 barrels per barrel of oil produced), which ends up in toxic tailings lagoons that have never been successfully reclaimed. An analysis using industry data estimated that these lagoons already leak over a billion gallons of contaminated water into the environment each year.
– source

Hydrofracking injects large volumes of water (up to six million gallons of water per gas well) mixed with sand and toxic chemical additives at high pressures to release the gas. Most of the water is then returned to the surface as polluted wastewater – that must be treated by wastewater treatment plants already overburdened and not necessarily designed to remove these chemicals. Industry analysts predict it will cost $3 billion to treat the industrial wastewater associated with Marcellus shale development…
Groundwater supplies may become contaminated with these chemicals as they already have in parts of Pennsylvania and other states. Currently, oil and gas companies that use hydraulic fracturing are exempt from regulations under the Safe Drinking Water Act that would require them to disclose the cocktail of chemicals they use.
– source

Scaling back on the production of these unconventional energy sources in order to conserve land and water for food will increase the cost of conventional oil, and thus food prices, since industrial agriculture is dependent on fossil fuels:

Due to the vast size of these [industrial] farms, the farms are operated in a similar manner to that of large industrial factories. And these “factories” require large quantities of synthetic fertilizers, pesticides, and fuel all derived from fossil fuels, which is a limited natural resource on our planet (Hidden Costs of Industrial Agriculture, 2008). “After cars, the food system uses more fossil fuel than any other sector of the economy — 19 percent.” This high dependence on fossil fuels makes industrial agriculture heavily unsustainable. “Twentieth-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food” (Pollan, 2008).

The monkey wrench of climate change is now thrown into the picture…

What happens to the stability of the world when fertile lands become dust bowls, when rainfall no longer follows its traditional seasonal pattern, when crop yield forecasts become less and less reliable as climate change begins to bite? We don’t have to look very far back to see the upheaval caused in countries whose majority population lives on the razor-edge of starvation:

2007–2008 – Food riots in India, Peru, Morocco, Egypt, Bangladesh, Pakistan, Zimbabwe, Mozambique, Namibia, 
Uzbekistan, Indonesia, Yemen, Guinea, Cameroon, 
Burkina Faso, Mauritania and Senegal. [64][65][66][67][68][69]

And again in 2010-2011: 

 
For those who think that adaption to climate change is feasible, please consider what Kurt Cobb articulates in a recent post:

…costly existing agricultural infrastructure won’t be easily moved or replaced. …soil quality is not uniform from place to place. [Do you] think that as temperatures warm and devastate the American grain belt with recurrent drought, we can simply transfer the growing of much of the world’s export grain crop north to the Canadian Shield which has soil so thin it has never supported agriculture?

The ‘Catch-22’ kicker is that the continued use of fossil fuels, the indispensable elixir of industrial civilization’s existence, is exactly what is causing climate chaos in the first place. And as I showed with one simple chart in a previous post, we are using more of this deadly ingredient than ever before. In his latest article ‘The hunger wars in our future’, Michael Klare warns us about the social disruptions that lie in the future as a result of the insidious water-energy-food nexus that grips our modern-day way of life:

…When we think about climate change (if we think about it at all), we envision rising temperatures, prolonged droughts, freakish storms, hellish wildfires, and rising sea levels. Among other things, this will result in damaged infrastructure and diminished food supplies. These are, of course, manifestations of warming in the physical world, not the social world we all inhabit and rely on for so many aspects of our daily well-being and survival. The purely physical effects of climate change will, no doubt, prove catastrophic. But the social effects including, somewhere down the line, food riots, mass starvation, state collapse, mass migrations, and conflicts of every sort, up to and including full-scale war, could prove even more disruptive and deadly…

At this point, the focus is understandably on the immediate consequences of the still ongoing Great Drought: dying crops, shrunken harvests, and rising food prices. But keep an eye out for the social and political effects that undoubtedly won’t begin to show up here or globally until later this year or 2013. Better than any academic study, these will offer us a hint of what we can expect in the coming decades from a hunger-games world of rising temperatures, persistent droughts, recurring food shortages, and billions of famished, desperate people.

Remember when both Bush, Cheney and Obama famously quipped that “the American way of life was non-negotiable.” Mother Nature and the Grim Reaper have rephrased that self-righteous slogan to read:

“The American way of life is unsustainable, non-redeemable, and a limited-time-only.”

Iran and Its Threat to the U.S. Dollar Hegemony

10 Friday Aug 2012

Posted by in Capitalism, Corporate State, Empire, Military Industrial Complex, Peak Oil

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In a recent article by Christopher Doran, author of Making the World Safe for Capitalism: How Iraq Threatened the US Economic Empire and had to be Destroyed, the underlying reasons for America’s bellicosity toward Iran are revealed. Threatening the status of the dollar as the world’s reserve currency seems to have resulted in a death sentence for a few countries, most recently Iraq and Libya:

…By accepting and encouraging countries to pay for its oil in currencies other than the U.S. dollar, Iran has deliberately taken the same action that, I argue in Making the World Safe for Capitalism, led directly to the U.S. invasion of Iraq. In September 2000, Saddam Hussein announced that Iraq would no longer accept the “currency of its enemy”, the U.S. dollar, and from that time onwards any country that wanted to purchase oil from Iraq would have to do so in euros. I further argue that the motivation for the United States’ invasion of Iraq was to eliminate the threats a post-U.N. sanctions Iraq posed to the key underpinnings of American economic hegemony, and to install a pro-U.S. client state and permanent American military presence in the region. The book examines how a post-U.N. sanctions Iraq either directly threatened the ongoing success of American economic power, or provided enormous opportunities to extend it.

All the same considerations are in play with Iran, starting with Iran’s direct threat to the dollar as the dominant global reserve currency. But that is just one aspect of the much larger issue: that Iran openly defies U.S. neoliberal hegemony. Like Iraq pre-invasion, Iran is not a member of the WTO, has not had any dealings with the IMF since 1984, and does not have any debt with it or the World Bank. Like Iraq before it, and evidenced by China’s oil development contracts, the U.S. and its oil companies are cut out of any future oil development in Iran. Like a post-sanctions Iraq, Iran has the potential to be the dominant power in the region and to provide development assistance on a vastly different model to that imposed by the WTO, World Bank and IMF, against which so much of the Middle East is rebelling….

The article details how the BRIC countries and many other nations are circumventing the U.S. sanctions with Iran and using gold as well as other commodities to buy Iranian oil. The sanctions have pretty much been rendered worthless because so many countries are defying what was designed to isolate and starve Iran into submission.

He explains how the Petrodollar System works:

In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.

This means that every country in the world that imports oil—which is the vast majority of the world’s nations—has to have immense quantities of dollars in reserve. These dollars of course are not hidden under the proverbial national mattress. They are invested. And because they are U.S. dollars, they are invested in U.S. Treasury bills and other interest bearing securities that can be easily converted to purchase dollar-priced commodities like oil. This is what has allowed the U.S. to run up trillions of dollars of debt: the rest of the world simply buys up that debt in the form of U.S. interest bearing securities.

The flip-side of this are the countries that produce and export oil, in particular Saudi Arabia and the other Arab producers. The only way the system can possibly work is if oil producers refuse to accept anything other than U.S. dollars as payment for their oil. This they have done since the Nixon Administration’s manipulation of the OPEC oil crisis in the mid-1970’s, which succeeded in getting Saudi Arabia, traditionally the world’s dominant producer, to agree to accept only dollars for oil. The Saudis used their influence to get the rest of OPEC to agree as well. In return, the U.S. offered to militarily defend not so much Saudi Arabia, but the horrifically repressive monarchy that ruled it.[11]

But there was a kicker: Nixon and his Secretary of State Henry Kissinger also got the Saudis to agree to invest their mega oil profits in the U.S. economy. In addition to buying interest bearing U.S. government securities, the Saudis also invested in New York banks. Because the OPEC oil embargo had quadrupled global oil prices, the Saudis and other Arab producers suddenly had a great deal of money to invest. The money parked in those New York banks then became available to be loaned to the rest of the world, which faced major financial crises due to—yes, you guessed it—the sudden quadrupling of oil prices. By the year 2000 and Iraq’s dramatic switch to selling Iraq’s oil in euros, Saudi Arabia had recycled as much as $1 trillion, primarily in the United States. Kuwait and the United Arab Emirates recycled $200–300 billion.[12]

And because those loans were in U.S. dollars, they had to be paid back in U.S. dollars. When U.S. interest rates skyrocketed to 21 percent in the early 1980’s, interest on the loans also skyrocketed. This in turn precipitated a third world debt crisis, which was mercilessly exploited by Wall Street and the U.S. In this case, the exploitation came in the form of requiring countries to “structurally adjust” their economies along neoliberal lines in return for World Bank and IMF bailout loans. By 2009, the total debt owed on these bailouts and other loans was an astounding $3.7 trillion. In 2008, they paid over $602 billion servicing these debts to rich countries, primarily the United States.[13] From 1980 to 2004, they paid an estimated $4.6 trillion.[14]

The history of how this came about is fascinating, and I discuss it in detail in Making the World Safe for Capitalism. The short version is that from the 1944 Bretton Woods agreement which set up the International Monetary Fund and the precursors to the World Bank and World Trade Organisation, the dollar was accepted as the international currency for all trade. Crucially though, the dollar was backed up by gold, which was fixed at $35 an ounce. This meant the U.S. had to have enough gold on hand to back up any and all dollars it printed.

Faced with escalating costs from the Vietnam War, in the early 1970s Nixon abandoned the gold standard and replaced it with the petrodollar system described above. Almost simultaneously, he abolished the IMF’s international capital constraints on American domestic banks, which in turn allowed Saudi Arabia and other Arab producers to recycle their petrodollars in New York banks.

The petrodollar system, and U.S. ability to manipulate the dollar as the global reserve currency and hence global debt, has been the bedrock of American economic power...

…But as the article explains, since the financial crisis of 2008, the status of the dollar as the reserve currency of the world has been thrown into question and challenged by even formerly staunch U.S. allies. As the lifeblood of a country’s economy, i.e. oil, becomes increasingly hard to come by, the demands of an old ‘friend’, named Uncle Sam, will likely fall on deaf ears, especially when he’s now seen by the rest of the world as a drunken, pickpocketing buffoon swinging at shadows.

Direct Democracy

29 Sunday Jul 2012

Posted by in Capitalism, Climate Change, Consumerism, Corporate State, Cyberwarfare, Ecological Overshoot, Empire, Environmental Degradation, Inequality, Intro, Military Industrial Complex, Neo-Colonialism, Peak Oil, Pollution, Wall Street Fraud

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I found this very interesting : –

I took a look into Direct Democracy for Switzerland at Wikipedia [link], where I found : –

In Switzerland, single majorities are sufficient at the town, city, and canton level, but at the national level, double majorities are required on constitutional matters. The intent of the double majorities is simply to ensure any citizen-made law’s legitimacy (Kobach, 1993).

Double majorities are, first, the approval by a majority of those voting, and, second, a majority of cantons in which a majority of those voting approve the ballot measure. A citizen-proposed law (i.e. initiative) cannot be passed in Switzerland at the national level if a majority of the people approve but a majority of the cantons disapprove (Kobach, 1993). For referendums or propositions in general terms (like the principle of a general revision of the Constitution), the majority of those voting is enough (Swiss constitution, 2005).

In 1890, when the provisions for Swiss national citizen lawmaking were being debated by civil society and government, the Swiss adopted the idea of double majorities from the United States Congess, in which House votes were to represent the people and Senate votes were to represent the states (Kobach, 1993). According to its supporters, this “legitimacy-rich” approach to national citizen lawmaking has been very successful. Kobach claims that Switzerland has had tandem successes both socially and economically which are matched by only a few other nations, and that the United States is not one of them. Kobach states at the end of his book, “Too often, observers deem Switzerland an oddity among political systems. It is more appropriate to regard it as a pioneer.”

Unfortunately, I found the political spin in the states worth giving emphasis from the same wikipedia link above : –

Direct democracy was very much opposed by the framers of the United States Constitution and some signers of the Declaration of Independence. They saw a danger in majorities forcing their will on minorities. As a result, they advocated a representative democracy in the form of a constitutional republic over a direct democracy. For example, James Madison, in Federalist No.10 advocates a constitutional republic over direct democracy precisely to protect the individual from the will of the majority. He says,

“A pure democracy can admit no cure for the mischiefs of faction. A common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party. Hence it is, that democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths.”

John Witherspoon, one of the signers of the Declaration of Independence said,

“Pure democracy cannot subsist long nor be carried far into the departments of state — it is very subject to caprice and the madness of popular rage.”

Alexander Hamilton said,

“That a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity…”

Interestingly, Edward Bernays, that wonderful spinmeister of double speak – worthy of debate, due to the outcome of much of his folly in the present world – had this to say at the opening of his (1928) book Propaganda [PDF] : –

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.

Our invisible governors are, in many cases, unaware of the identity of their fellow members in the inner cabinet.

They govern us by their qualities of natural leadership, their ability to supply needed ideas and by their key position in the social structure. Whatever attitude one chooses toward this condition, it remains a fact that in almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons-a trifling fraction of our hundred and twenty million-who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind, who harness old social forces and contrive new ways to bind and guide the world.

It is not usually realized how necessary these invisible governors are to the orderly functioning of our group life. In theory, every citizen may vote for whom he pleases. Our Constitution does not envisage political parties as part of the mechanism of government, and its framers seem not to have pictured to themselves the existence in our national politics of anything like the modern political machine. But the American voters soon found that without organization and direction their individual votes, cast, perhaps, for dozens of hundreds of candidates, would produce nothing but confusion. Invisible government, in the shape of rudimentary political parties, arose almost overnight. Ever since then we have agreed, for the sake of simplicity and practicality, that party machines should narrow down the field of choice to two candidates, or at most three or four.

In theory, every citizen makes up his mind on public questions and matters of private conduct. In practice, if all men had to study for themselves the abstruse economic, political, and ethical data involved in every question, they would find it impossible to come to a conclusion without anything. We have voluntarily agreed to let an invisible government sift the data and high-spot the outstanding issue so that our field of choice shall be narrowed to practical proportions. From our leaders and the media they use to reach the public, we accept the evidence and the demarcation of issues bearing upon public question; from some ethical teacher, be it a minister, a favorite essayist, or merely prevailing opinion, we accept a standardized code of social conduct to which we conform most of the time.

We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.

Which leads me to use a relevant passage from page 770 of Alexis de Tocqueville’s 1835 book On Democracy in America. : –

I therefore believe that the kind of oppression that threatens democratic peoples is unlike any the world has seen before. Our contemporaries will find no image of it in their memories. I search in vain for an expression that exactly reproduces my idea of it and captures it fully. The old words “despotism” and “tyranny” will not do. The thing is new, hence I must try to define it, since I cannot give it a name.

I am trying to imagine what new features despotism might have in today’s world: I see an innumerable host of men, all alike and equal, endlessly hastening after petty and vulgar pleasures with which they fill their souls. Each of them, withdrawn into himself, is virtually a stranger to the fate of all the others. For him, his children and personal friends comprise the entire human race. As for the remainder of his fellow citizens, he lives alongside them but does not see them. He touches them but does not feel them. He exists only in himself and for himself, and if he still has a family, he no longer has a country.

Over these men stands an immense tutelary power, which assumes sole responsibility for securing their pleasure and watching over their fate. It is absolute, meticulous, regular, provident, and mild. It would resemble paternal authority if only its purpose were the same, namely, to prepare men for manhood. But on the contrary, it seeks only to keep them in childhood irrevocably. It likes citizens to rejoice, provided they think only of rejoicing. It works willingly for their happiness. It provides for their security, foresees and takes care of their needs, facilitates their pleasures, manages their most important affairs, directs their industry, regulates their successions, and divides their inheritances. Why not relieve them entirely of the trouble of thinking and the difficulty of living?

Every day it thus makes man’s use of his free will rarer and more futile. It circumscribes the action of the will more narrowly, and little by little robs each citizen of the use of his own faculties. ~ Alexis de Tocqueville ~ 1835

I sense that the work is almost complete, since the exportation of most every wealth – with its replacement of exhorbitant debt – complete a nation without appeal to their constitutional rights – has squandered; for want of a stance in sensibility, even what abilities are left remaining to resolve it …

Invitations sent to Potential Contributors

29 Sunday Jul 2012

Posted by in Capitalism, Corporate State, Empire, Inequality, Military Industrial Complex, Peak Oil

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Dear potential contributors (DK, Tom Tom, Kramerfaust, Sunson),

I am going to send you an invitation tonight so that you can contribute. You’ll have to sign up with wordpress in order to submit your work to me. It looks like Kramerfaust already has a wordpress account set up. Per the WordPress staff:

Your new user will now be able to access your blog by visiting the My Blogs section of their dashboard when they log in to WordPress.com.

You won’t have to blog at the site you initially create; it’s just a required formality. Or you can simply email me at Collapsitarians@gmail.com. I’m looking forward to reading your posts. More voices means more worldly knowledge to glean from and different perspectives to appreciate.

Since I started this site, the stats tell me that the top four google searches which have brought people here are the following:

1.) collapse of industrial civilization

2.) the price of offshore revisited

3.) james holmes sociopath

4.) collapse peak oil

The first one is an obvious outcome. I was surprised this domain had not been previously claimed since it seems to be such a hackneyed phrase. As Greer has noted, in the twilight of past civilizations, the elite are increasingly seen as corrupt and stories of societal collapse become popular in the mainstream culture. The second one relates to my post about the trillions being hoarded in offshore tax havens by the 0.001%. Backed by the power of the State, the global elite live in a cocoon of cossetted comfort, indifferent to the hand-to-mouth existence of the majority. They’ve got the iron fist of the Military Industrial Complex and Police State to protect their wealth from the rest of humanity who will be falling off the net energy cliff into poverty and desperation.

The third google search phrase is apparent to all unless you have been living under a rock since July 20th. We have these mass shootings periodically here in the Land of the Second Amendment just as a reminder that guns don’t kill people. Guns are completely innocent in these mass bloodlettings and should not be denied their freedom of getting into the hands of every man, woman, and child in the country. The response by the public is simply to buy even more guns. Why refute such logic in a world that thinks more debt is the answer. More debt, more growth, more firepower, more people, more wars, more cars, more profit, more, more, and more…..

 
And the last google search is not a surprise either. Despite all the propaganda of another oil surfeit, educated peak-oilers have not been swayed.

Terrorism: The Existential Threat Used for Total Control Here and Abroad

23 Monday Jul 2012

Posted by in Capitalism, Corporate State, Empire, Inequality, Military Industrial Complex, Neo-Colonialism, Peak Oil

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Connecting the ‘War on Terror’ with the control of resources abroad and the crushing of dissent both here and overseas:

In order to overtake and dominate, sometimes you have to draw your opponent in close to you. Knowing that the oil and gas reserves of the Middle East make it an area of vital geopolitical and national security importance, an empire would use all available opportunities to insert itself there, even if it meant invasion under some false pretense. With the trumped-up claims of terrorist ties to Iraq and WMD, 9-11 gave the empire the pretense to invade. Today we can see the results here and here and here.

Zbigniew Brzezinski, political scientist, geostrategist, and statesman who worked for the NSA, laid out this general strategy in his book ‘The Grand Chessboard: American Primacy And It’s Geostrategic Imperatives‘.

A few quotes:

“Moreover, as America becomes an increasingly multi-cultural society, it may find it more difficult to fashion a consensus on foreign policy issues, except in the circumstance of a truly massive and widely perceived direct external threat.” (p. 211)

“Never before has a populist democracy attained international supremacy. But the pursuit of power is not a goal that commands popular passion, except in conditions of a sudden threat or challenge to the public’s sense of domestic well-being. The economic self-denial (that is, defense spending) and the human sacrifice (casualties, even among professional soldiers) required in the effort are uncongenial to democratic instincts. Democracy is inimical to imperial mobilization.” (p.35)

“To put it in a terminology that harkens back to the more brutal age of ancient empires, the three grand imperatives of imperial geostrategy are to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected(!), and to keep the barbarians from coming together.” (p.40)

Now we get to today’s video from Journeyman pictures which gives further evidence from a whistleblower that all the stops were pulled in order to make this ‘War on Terror’ fly. No more Geneva Convention, no more questioning of the efficacy or, for that matter, morality of the brutal torture done by countries we once condemned as barbaric:
 
 
And the War on Terror is being used to suppress dissent not just in the Middle East, but also here in the US and all other ‘developed countries’ where militarized local police departments have been given the latest armory and weapons to be unleashed on a growing population falling deeper and deeper into joblessness and destitution, the levels of which have not been seen in half a century.

The War on Terror was the perfect existential threat needed to prop up neoliberal capitalism and its resultant world of an opulently rich class ruling over the teeming masses of serfs. In a civilization dominated globally by such an economic system which is designed to funnel the shrinking wealth (i.e. energy) of society into the hands of a tiny elite, there can be no other future to look forward to for those at the bottom but despair and poverty: