King Romney’s Double Down Plan On What’s Left of Our Poor EROEI Pockets of Fossil Fuel

27 Monday Aug 2012

Tags

America's Car Culture, Chris Nelder, Collapse of Industrial Civilization, Drill Baby Drill, Emerging Market Oil Consumption, EROEI, Gregor Macdonald, Mitt Romney's Energy Plan, Peak Oil, U.S. Domestic Oil Production

This post is a sort of addendum to the last post about King Romney’s Energy Plan. Here’s the excerpt of what I said from that post which needs more elaboration:

…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“…

Of course EROEI should have also been mentioned in that discussion of King Romney’s frantic grab for what’s left of our bequeathment of the Earth’s ancient, high energy density, carbon-based fuel. A detailed report, entitled A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production, was published last year which sheds some light on this subject of what we are getting back from the investment spent extracting today’s fossil fuels. Here’s an abstract from the paper:

Oil and gas are the main sources of energy in the United States. Part of their appeal is the high Energy Return on Energy Investment (EROI) when procuring them. We assessed data from the United States Bureau of the Census of Mineral Industries, the Energy Information Administration (EIA), the Oil and Gas Journal for the years 1919–2007 and from oil analyst Jean Laherrere to derive EROI for both finding and producing oil and gas. We found two general patterns in the relation of energy gains compared to energy costs: a gradual secular decrease in EROI and an inverse relation to drilling effort. EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.

Now some graphs from the research:

(source: Guilford, Hall, Connor, Cleveland “A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production.” Sustainability 2011, 3, 1866-1887)

As you can see from the above chart, we’ve been bouncing along a tight EROEI corridor of between 3 and 10 compared to the glory days of the first half of the twentieth century when the low hanging fruit didn’t require taking great risks and enormous expense, ultimately resulting in such catastrophes as the Gulf Oil Spill. With Romney at the helm, do you think that risk will be diminished?

Additional charts from 8020 vision:

(source: Guilford, Hall, Connor, Cleveland “A New Long Term Assessment of Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production.” Sustainability 2011, 3, 1866-1887)

The EROI for Production is trending lower too. Variations in any given year are largely dependent on how much drilling it takes to produce the oil. Typically about 2 barrels of oil equivalent are consumed per foot of well drilled. In years where there was a lot of drilling, the EROI would be lower.

A more intuitive way to look at this trend is as dollars per barrel of oil. The chart below is from the Energy Information Administration (EIA) Annual Energy Review for 2011. It shows the cost to add each additional barrel of oil to US reserves.

COE (crude oil equivalent) measures the cost of adding 5.8 million BTUs regardless of whether the resource is oil, natural gas, or natural gas liquids. (source: EIA, 2011 Annual Energy Review)

And analysis on Chris Nelder’s excellent blog further explains the cost of new oil today…

…Globally, Skrebowki estimates that it costs $80 – $110 to bring a new barrel of production capacity online. Research from IEA and others shows that the more marginal liquids like Arctic oil, gas-to-liquids, coal-to-liquids, and biofuels are toward the top end of that range.

My own research suggests that $85 is really the comfortable global minimum. That’s the price now needed to break even in the Canadian tar sands, and it also seems to be roughly the level at which banks and major exploration companies are willing to commit the billions of dollars it takes to develop new projects….

Globally, the cost of drilling a new oil well has gone parabolic:

Source: EIA

The cost of adding a new barrel of reserves — drilling to prove that the oil is there and economically recoverable, before actually producing it — has also jumped sharply:

Source: EIA

(It’s unfortunate that EIA doesn’t have more recent data than 2008 for this analysis, because the sharp downturn at the end of this chart owed mostly to the economic crash in the latter half of that year. Analogous recent data from the oil patch suggests that the curves in the above chart should have resumed their previous, pre-crash trajectory by now.)

As production costs push ever closer to the retail price ceiling, profit margins fall. Consider Canada as an example. Oil production there will likely turn a mere 5 to 8 percent annual return on equity for the next several years, according to analysis by ARC Financial. Under $60 a barrel, they note, “the industry is broadly unprofitable” and would not be able to attract reinvestment. Similarly, University of Alberta energy economist Andrew Leach noted this week that the average operating profit margin of Canadian-owned oil and gas assets is now 7.7 percent, while foreign-owned assets offer only a 5.5 percent margin. A far cry from the heady, ultra-profitable years of 2003 – 2005.

So while the press, ever-anxious to assign blame for high oil prices, highlights the enormous profits that oil companies are making, the fact is that much of those profits owe to producing oil from wells drilled in a much cheaper era and selling it in the new high-priced era.

This will not remain the case for many more years.

The 2014 – 2015 tipping point

Unconventional oil is currently just 3 percent of global supply. The IEA projects that it will make up 6.5 percent of supply by 2020, and 10 percent by 2035. As it gradually replaces cheap oil conventional oil, its real production costs will continue to push oil prices up. Eventually, those costs will cross with the pain tolerance limit of consumers.

Skrebowski sees rising costs outrunning the ability of economies to adapt to higher oil prices by 2014, producing an “economically determined peak” in oil production. After that point, prices will remain economically destructive, and render sustained economic growth impossible. At the same time, it will make new oil production harder to finance.

This matches well with numerous analyses of oil supply that project a major tipping point around 2014 – 2015. At that point, as I have reminded readers repeatedly, we will likely begin down the back of Hubbert’s Curve and see net losses in global oil supply every year.

“Unless and until adaptive responses are large and fast enough to constrain the upward trend of oil prices, the primary adaptive response will be periodic economic crashes of a magnitude that depresses oil consumption and oil prices,” Skrebowski concludes. “These have the effect of shifting consumption from incumbent consumers — the advanced economies — to the new consumers in the developing economies.”

As I detailed last month (”Oil demand shift: Asia takes over“) that is precisely what has been happening since 2005. The world’s emerging markets are buying their first cars and their first trucking fleets, and those vehicles have much better fuel economy than ours. They will be able to pay a price for oil that we cannot tolerate. From 2015 on into the future, fuel will become increasingly unaffordable for U.S. drivers…

The demise of America’s car culture is unavoidable and won’t be saved by the flag-waving, slogan-cheering rhetoric of any politician.

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

26 Sunday Aug 2012

Posted by xraymike79 in Capitalism, Corporate State, Environmental Degradation, Inequality, Peak Oil, Wall Street Fraud

≈ 1 Comment

Tags

Bain Capital, Capitalism, Chinese Slave labor, Climate Change, Corporate State, Corporatocracy, Drill Baby Drill, Environmental Collapse, Financial Elite, Foxconn, Gross Inequality, Inverted Totalitarianism, Mitt Romney, Off-Shoring, Peak Oil, The Elite 1%, U.S. Domestic Oil Production, Wall Street Fraud

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.

Zen and the Art of Motorcycle Maintenance

24 Friday Aug 2012

Posted by kramerfaust in Capitalism, Consumerism, Corporate State, Empire, Inequality

≈ 3 Comments

When I agreed with Mike that I’d run with the baton for a lap or two on his website, I began to think of a way to conjure up a good reason why so many world ills could be written of to an audience in mute silence, even if provoked.

And so, here is my take on why too few understand, and why too many would stop reading this article at this point to find their entertainment elsewhere:

In his 1869 book The Man Who Laughs, Victor Hugo wrote:

In China, from time immemorial, they have possessed a certain refinement of industry and art. It is the art of molding a living man. They take a child, two or three years old, put him in a porcelain vase, more or less grotesque, which is made without top or bottom, to allow egress for the head and feet. During the day the vase is set upright, and at night is laid down to allow the child to sleep. Thus the child thickens without growing taller, filling up with his compressed flesh and distorted bones the reliefs in the vase. This development in a bottle continues many years.

After a certain time it becomes irreparable. When they consider that this is accomplished, and the monster made, they break the vase. The child comes out — and, behold, there is a man in the shape of a mug!

Give me the child under the age of seven, and I care not what you do with him after, has rung true with me for some time. I’ve written previous articles elsewhere to such effect. But after finding my own conclusions with the support of the author and school teacher John Taylor Gatto, whose article The Six Lesson Schoolteacher led me to his book Weapons of Mass Instruction, it appeared that even though it is a revelation, again, only a handful paid attention.

I had put the books down and was hoping to leave them be a while longer, becoming a people watcher and bystander, viewing the world and defining an answer, and I’d near given out.
Then, in June, BBC Radio 4 aired a radio play of Robert M. Pirsigs Zen and the Art of Motorcycle Maintenance, dramatized by Peter Flannery. I sat in my car in the UK for the full hour of the play, completely rapt with the broadcast, and afterward – aware that there is a limited time the BBC chooses to allow hearing it again on-line, I transcribed a salient part of it, hoping some day soon I’d find a place to post it:

Phaedrus arrived at the university of Chicago already in a world of thoughts so different from mine or yours I doubt we could understand it. He decided to write a doctorate or thesis on the meaning of Quality; but in which discipline? It would take quite a program to accept a PHD in which the candidate refused to define a central term. And then he found the Chicago Inter-disciplinary Program in analysis of ideas and study of methods.

Phaedrus – Professor?

Professor – Yes?

Phaedrus – I was told you wanted to see me about my application for a scholarship?

Professor – Aah, you are the gentleman who’s going to tell us all about quality.

Phaedrus – Well, I’d like to try.

Professor – Yes. I’m sure you would. There’s something I’m not clear about. What is your substantive field?

Phaedrus – English composition.

Professor – English composition is a methodological field, not a substantive one – (laughs) – I’m afraid I cannot recommend a scholarship. In fact, I cannot for the dear life of me understand how the university has admitted a candidate who is ignorant of the difference between method and substance. If you’ll excuse me.

Phaedrus – I do-not accept the division of method and substance. I think this is maybe where you’ve all been going wrong.

Professor – I beg your pardon?

Phaedrus – It is just an outgrowth of Aristotle’s ideas about form and substance. What I intend to show is that the concept of quality drops away with this dichotomy.

Professor – Oh! I See! You’ve managed to prove Aristotle wrong?

Phaedrus – I’m working on it. And where better to present this thesis than a great university like this?

Professor – Perhaps because it contradicts everything ‘we’ believe in?

Phaedrus – A university that can’t accept a thesis that contradicts its fundamental beliefs is in a rut, don’t you think?

Professor – A rut?

Phaedrus – Look at it this way; you want some other university to come up with an historic break-through between eastern and western philosophy? You want to be behind the game here? Besides, this is Chicago. This is where guys get rubbed out. It’s time Aristotle got his.

Megalomania. Delusions of grandeur. Though they couldn’t stop him from writing his thesis, Phaedrus was already done for. He had declared war on the ancient Greeks because they had invented reason. The analytical tool with which to understand and classify life and set it up over quality; the instinctive response to life that creates beauty and goodness and allows you to experience them.

In circus trapeze terms, everybody in life is either a catcher or a fly-er. In Greek philosophy terms, everybody is either a Platonist or an Aristotelian. Plato is the fly-er – the essential Buddhist seeker – soaring ever upward toward the ‘One’, and Aristotle is the catcher – the eternal motorcycle mechanic, endlessly sorting the things of life into piles and putting labels on them. It was ironic that Phaedrus – the teacher of rhetorical Greek soon revealed Plato’s hatred of all rhetoricians – especially those known as Sophists.

The Sophists were teachers of wisdom. But they didn’t teach fixed principles – truth for instance – they taught about the improvement of man – the good. A ready excellence. The duty of man to himself to be the best he could be. So a thousand years before Aristotle’s mind and matter, there had been a thing called ‘Excellence’, which sounded awfully like ‘Quality’.

He read it again. A ready excellence – duty of man towards himself – and saw this was an exact translation of the Sanskrit word ‘Dharma’ – sometimes described as ‘The One’. He stood for a moment – totally still – then lightening hit all around him. Quality and Excellence – Dharma – that’s what the Sophists had been teaching before the church of reason – before substance, before form – before mind and matter – a thousand years before dialectic itself. ‘Quality’ had been absolute.

Rain hits us like pellets. The twentieth century – that’s all around us now. The mediocre built-in towering edifice over the dust of the good. Time to finish this twentieth century Odyssey of Phaedrus the madman and have done with it.

The next time the class in Ideas on Methods met, they’d been assigned another Platonic dialogue which went by the name of Phaedrus. The young man Socrates is talking with. Our Phaedrus had read the dialogue so thoroughly, he practically knew it by heart.

He was ready.

Professor – – Well then, today we are to discuss the Phaedrus dialogue. Who would like to begin – Mr Quality, how would you characterize Phaedrus here?

Phaedrus – He prefers solitude – he is an outsider – he is aggressive.

Professor – He is indeed aggressive. Does he not threaten his master Socrates with violence at one point? I trust we’ll be having none of that? Phaedrus means what?

Phaedrus – Wolf.

Professor – Wolf.

Phaedrus – Umm hmm.

Professor – Indeed it is so. And with your long beard and your rather piercing eyes Mr Quality, there is something of the wolf in you. I will ask you to take us through the dialogue, if you’ll please, Mr Phaedrus.

Phaedrus – Plato was using his dialogue to allow Socrates to describe to us the soul – the One. What I have been referring to as Quality. The source of all things including reason – and therefore not something that can be understood or defined – or reached by reason.

Professor – Then it doesn’t exist. This is tiresome. But well done Socrates and Plato for somehow managing to agree with you three thousand years before you were born.

Phaedrus – No, I am simply pointing out that the ‘One’ in India and the ‘One’ in Greece must be the same entity, otherwise there would be Two. But though it cannot be defined, it can be described; approached, as it were. And in this dialogue Plato lets Socrates approach the idea of Quality by using the notion of two horses pulling a chariot. In the chariot is the seeker. His goal is the soul – the ‘One’ – Quality. The two horses are the white horse of reason and the black horse of passion. The dialects suggest that reason will be the truer guide to finding the ‘Oneness’ of existence, but of course all this is just an opinion …

Professor – Stop! Plato was not suggesting anything, and this is not simply Socrates opinion. Socrates has sworn to the gods that this is the truth. That reason – rational thought – is the only way to understand existence. If what he says is not the truth, then he is forfeiting his own soul.

Phaedrus – Well, ahh, no.

Professor – Socrates does not say it is the literal truth?

Phaedrus – Well, yes.

Professor – Thank you.

Phaedrus – But, two pages earlier he also tells us that it is all just an analogy; a way of describing the journey towards the ‘Oneness’ of existence. The white horse of reason is just an analogy; a figure of speech – therefore we are not being told that reason stands above everything, so why, I wonder, do you teach that when it isn’t true?

Professor – My Goodness – I thought all the Sophists were long dead.

Phaedrus – So did I, but there you sit, using the power of your words and of your authority in the church of reason to defend a palpably untrue position – that reason is everything – is a lie! But of course, it is a lie that keeps the world in the hands of guys like you.

Professor – Guys like me?

Phaedrus – Yeah. Intellectual bullies. Guys who can only function in a system based on weakness. What you really want from us here today isn’t ability, it’s inability. A truly able student is a threat to you. The perfect student in this institution is the one who is willing to accept the bowing and scraping and the intellectual prostration you need from us to maintain your power. Sheep is what you want. But mark what I’m saying here: sometimes the shepherd goes above the timber-line, and he calls and he calls for his sheep to come but he doesn’t find himself looking in the eyes of his sheep – he finds the eyes of a wolf – staring right back at him. So by all means, call me Phaedrus, if you’d like to.

Phaedrus looks at the professor struggling to make brave face of it but lost for words. When the bell rings to end the class, he walks out and leaves the university for ever.

Books and plays are likened to incendiary bombs. Sometimes when they are written and published they can change a world from a status where the sun goes around it as a flat earth held up on pillars, to a globe third in line from a sun that it orbits. A book can invert and disprove a lie with a truth, as much as it can conjure a proof in a lie as a truth. It is up to every reader to fight with facts over falsehood – then act – which requires inordinate energy to stand for a conviction, as those without proof defend as argument without basis of fact.

Many an ideology come and go. It is which that is fertile and which that is barren that can prove which is mankind’s sustainable path. That chosen path is the one instilled in our children of today who are the future generation, and our legacy of tomorrow.

The System Has Reached Entropy

24 Friday Aug 2012

Posted by xraymike79 in Capitalism, Climate Change, Consumerism, Corporate State, Empire, Environmental Degradation, Inequality, Military Industrial Complex, Peak Oil, Pollution, Wall Street Fraud

≈ 2 Comments

Tags

Capitalism, Climate Change, Collapse of Industrial Civilization, Corporate State, Corporatocracy, Economic Collapse, Financial Elite, Gross Inequality, Inverted Totalitarianism, Peak Oil, Police State, Resource Wars, Security and Surveillance State, The Elite 1%, Wall Street Fraud, War for Profit

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Getting It Wrong on Natural Gas

21 Tuesday Aug 2012

Posted by xraymike79 in Capitalism, Corporate State, Environmental Degradation, Peak Oil, Pollution, Wall Street Fraud

≈ 4 Comments

Tags

Chesapeake Energy, Climate Change, Colorado School of Mines, Corporate Mouthpiece, Dmitry Orlov, Fareed Zakaria, Gas Fracking, Gazprom, Glenn Greenwald, Josh Fox, Marcellus Shale, Michael Miller, T. Boone Pickens, The U.S. Department of Energy, Tom Friedman, Wall Street Fraud, Wolf Richter

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?

Transnational Capitalism’s ‘Great Wall of Propaganda’

19 Sunday Aug 2012

Posted by xraymike79 in Capitalism, Consumerism, Corporate State, Empire, Military Industrial Complex, Neo-Colonialism

≈ 5 Comments

Tags

Bread and Circus, Corporate State, Corporatocracy, Empire, Eric Zeusse, Fareed Zakaria, Financial Elite, Globalization, Gore Vidal, Inverted Totalitarianism, Jonathan Turley, Mass Media Manipulation, Matt Taibbi, Mike Spindell, The Elite 1%, The Federal Reserve, Thomas Friedman, Transnational Capitalism, TV Punditry, War for Profit

Imagine a world where the elite’s professional frontmen, aka TV pundits and ‘talking heads’, framed the public debate and steered public opinion for a nation of 350 million people. In such a world, journalism became an infomercial formulated by such apparatuses as spin alley and fed to the masses as expert opinion and deep intellectual insight. Now imagine that virtually the entire nation voluntarily bought an electronic device for their home that would pipe all these fabricated talking points, along with the mind-numbing bread & circus entertainment, into their living space. We have, as Gore Vidal described, entered a digital fun house from which we cannot escape.

A novelty called television had begun to appear in household after household, it’s cold, grey distorting eye relentlessly projecting a fun house view of the world. Those who followed the ugly, new-minted word media began to note that often while watching television we kept fading in and out of the chamber of horrors… ~ Vidal

Occasionally an insightful article will be written which lifts, if only briefly, the veil of the American hologram and allows, for those brave enough to look, a glimpse of the conniving little man behind the curtain furiously working the levers to create the Great and Powerful Oz. Depending on how much you reveal of the dark truths lurking behind the curtain, you may eventually find yourself subject to unrelenting persecution and holed up in a dark solitary cell or some South American embassy situated in a vassal state. The long arm of Empire has a way of reaching those who cross her.

Lawyer and blogger Jonathan Turley is someone I frequently follow. Amongst his humorous work he also posts about serious subjects, one of which is the recently published The Pretense of Punditry by guest blogger Mike Spindell. In this post, Mr. Spindell sheds light on the inner workings behind the face of TV punditry that bombards you 24/7 and molds the conventional wisdom of the day.

What all of these shows have in common is that they are repeatedly populated by the same people, whether politicians, journalists, economists or political operators. This link gives the background of the truth of Sunday morning “journalism”. The casts rarely change and in all but the rarest of cases these guests make up what could be called our nation’s “Pundit Class”. They are seen as the “Serious People”, who lead America’s national debate on vital issues. I’ve been a “political junkie” since the age of ten. For many years I was misled into believing that these “Serious People” were really my intellectual betters when it came to public affairs and that political discussion must only exist within the ground rules of debate established by our “Pundit Class”. Beginning with the murder of JFK and in the ensuing disillusionment of the Sixties I’ve come to see that not only is this “Pundit Class” inherently corrupt, but only a rare few can barely be called intellectually informative. This group is in reality the paid propagandists of the elite 1% that rule this country and their main task is to limit the scope of our national debate.

The essay then goes into the recent plagiarism case of one of the “most esteemed members of the Pundit Class, Fareed Zakaria.” Zakaria, born in India and from the elite group of that country, is a courtier to the present Transnational Capitalism & Globalization that has been wreaking havoc on the working class and natural environment of every nation on earth.

On 8/12/12 Eric Zeusse, an investigative historian, posted an article titled: “Fareed Zakaria Is Bitten by His Own Tale: How He Helped Create the System That Bit Him Back”. He began the article in this manner and in doing so exposed me to an idea that frankly hadn’t occurred to me.

“When Fareed Zakaria was suspended on Friday from Time and CNN, for plagiarism, this wasn’t merely justice, it was poetic justice: it rhymed. What it rhymed with was his own lifelong devotion to the global economic star system that he, as a born aristocrat in India, who has always been loyal to the aristocracy, inherited and has always helped to advance, at the expense of the public in every nation. He was suspended because, as a born aristocrat, who is a long-time member of the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, and many other of the global aristocracy’s primary organizations, he is so well-connected that his writing-commissions are more than any one person can possibly handle, and he consequently cannot possibly actually write all that is attributed to him. He certainly cannot research it all.”

As a paid public relations person for the corporatocracy, Fareed Zakaria is armed with a cadre of writers who produce the carefully vetted, status quo viewpoints that he spoon feeds his millions of viewers. As Spindell points out, it was no surprise that a few days after the plagiarism accusations, an article appeared which exonerates Zakaria and brushes the case under the proverbial rug.

I think back to graduate schools papers I’ve written and wonder how I would have fared if I had “made a terrible mistake” in them through plagiarism. Would an investigation of my “isolated incident” and remorse have allowed me to continue in school? However, protecting Mr. Zakaria, one of the chosen, is not only important for his sake, but for the sake of these “News Entities” that rely so heavily on the “connected” pundit class to provide their“cogent” analysis of major issues.

How many other “Pundits” acting as the “serious” people are setting the parameters of the national debate through their appearances on Sunday Morning talk shows, News Channels, the PBS News Hour and it appears as paid guest speakers at supposedly meaningful conferences and conventions? The person who first came to mind as I read this article on Zakaria was Thomas Friedman. Friedman is a son of privilege who married into a billionaire family. He has been a champion of “Globalization”, which to me has always meant unbridled support for the multinational Corporatocracy…

…what is obvious and known about Friedman is that he is a pundit star, ranking with, or possibly above Zakaria in the firmament of “Serious People” who frame our national debate and dominate our national media. This is really nothing new in our country. In the past the “serious people” were the likes of Walter Lippman, and Scotty Reston. These past pundits and “cold warriors”, share a commonality with Zakaria and Friedman, in that they all serve(d) the interests of the Corporate and Monied Elite that run this country from behind the scenes. Indeed, I’m sure that you the reader could expand this very small list of those who are deemed acceptable to lead the “serious” discussion of our national/international issues.

I assert that the entire Liberal versus Conservative debate in this country is but a smokescreen that distracts us from the one most vital issue. Our nation and indeed the world is and has been controlled by an Elite representing those with most money and power. Their first allegiance is to themselves, their class and to the belief that they alone are fit to rule us all. Call it what you will, but to me it is the continuation of feudalism in modern guise. Just as in feudalism there were “Courtiers” who gladly did the bidding of their “Royal Masters”, in order to enrich their own lives. Most of the “Courtiers” were either born to, or became part of the elite, while maintaining the pretense of speaking for the benefit of all humanity…we are surrounded by experts, who in reality are propagandists purveying non-existent mythology to keep us in the thrall of the Elite…

Interestingly, Matt Taibbi has also written about the fraudster Thomas Friedman, hypnotist to the boob-tube worshipping consumers, here and here:

When some time ago a friend of mine told me that Thomas Friedman’s new book, Hot, Flat, and Crowded, was going to be a kind of environmentalist clarion call against American consumerism, I almost died laughing.

Beautiful, I thought. Just when you begin to lose faith in America’s ability to fall for absolutely anything—just when you begin to think we Americans as a race might finally outgrow the lovable credulousness that leads us to fork over our credit card numbers to every half-baked TV pitchman hawking a magic dick-enlarging pill, or a way to make millions on the Internet while sitting at home and pounding doughnuts— along comes Thomas Friedman, porn-stached resident of a positively obscene 11,400 square foot suburban Maryland mega-monstro-mansion and husband to the heir of one of the largest shopping-mall chains in the world, reinventing himself as an oracle of anti-consumerist conservationism.

Where does a man who needs his own offshore drilling platform just to keep the east wing of his house heated get the balls to write a book chiding America for driving energy inefficient automobiles? Where does a guy whose family bulldozed 2.1 million square feet of pristine Hawaiian wilderness to put a Gap, an Old Navy, a Sears, an Abercrombie and even a motherfucking Foot Locker in paradise get off preaching to the rest of us about the need for a “Green Revolution”? Well, he’ll explain it all to you in 438 crisply written pages for just $27.95, $30.95 if you have the misfortune to be Canadian.

I’ve been unhealthily obsessed with Thomas Friedman for more than a decade now. For most of that time, I just thought he was funny. And admittedly, what I thought was funniest about him was the kind of stuff that only another writer would really care about—in particular his tortured use of the English language. Like George W. Bush with his Bushisms, Friedman came up with lines so hilarious you couldn’t make them up even if you were trying—and when you tried to actually picture the “illustrative” figures of speech he offered to explain himself, what you often ended up with was pure physical comedy of the Buster Keaton/Three Stooges school, with whole nations and peoples slipping and falling on the misplaced banana peels of his literary endeavors…

Matt has also written about the master propagandist Fareed Zakaria here:

From a distance I’ve always vaguely admired the skills of Newsweek’s Fareed Zakaria, who is maybe this country’s preeminent propagandist. Any writer who doesn’t admire what this guy does is probably not being honest with himself, because being the public face of conventional wisdom is an extremely difficult job — and as a man of letters Zakaria routinely succeeds, or pseudo-succeeds, at the most seemingly impossible literary tasks, making the sensational seem dull, the outrageous commonplace, and rendering horrifying absolutes ambigious and full of gray areas.

Wheras most writers grow up dreaming of using their talents to stir up the passions, to inflame and amuse and inspire, Zakaria shoots for the opposite effect, taking controversial and explosive topics and trying to help rattled readers somehow navigate their way through them to yawns, lower heart rates, and states of benign unconcern. He’s back at it again with a new piece about the financial crisis called “The Capitalist Manifesto,” which is one of the first serious attempts at restoring the battered image of global capitalism in the mainstream press.

This writer has done work like this before, using a big canvas to rework an uncooperative chunk of history in the wake of a crisis. Zakaria is probably best known for his post 9/11 “Why Do They Hate Us?” article, a sort of masterpiece of milquetoast propaganda that laid the intellectual foundation for a wide array of important War on Terror popular misconceptions, not the least of which being the whole “They hate us for our freedom” idea. One of Zakaria’s central arguments in that piece was that poor struggling Arabs were driven to envious violence by the endless pop-culture reminders of American affluence and progress. It was just too much to take, seeing all those cool blue jeans and all that great satellite TV.

In one exchange in that piece Zakaria talks with an elderly Arab intellectual who scoffs at Zakaria’s suggestion that Arab cities should try to be more like globalization-friendly capitals like Singapore, Seoul and Hong Kong. The old Arab protests that those cities are just cheap imitations of Houston and Dallas, and what great and ancient civilization would want that?

I thought the old Arab’s comment was funny, but Zakaria imbued it with serious significance. “This disillusionment with the West,” he wrote, “is at the heart of the Arab problem.” And while witty Arab potshots at tacky southern strip-mall meccas like Houston were significant enough to put high up in Newsweek’s seminal piece about the root causes of 9/11, things like America’s habitual toppling of sovereign Arab governments and installation of ruthless dictators like the Shah of Iran were left out more or less entirely (Zakaria managed to write a whole section on the Iranian revolution without even mentioning that the Shah come to power thanks to a CIA-backed overthrow of democratically-elected Mohammed Mosaddeq, whose crime was ejecting Western oil companies from Iran)…

Just as American journalism has become a paid spokesman for the exploitive economic system controlling the world, so too has the entire economic profession been bought off: How The Federal Reserve Bought The Economics Profession…

The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.

And for one more example, the Great Wall of Propaganda extends to our system’s need for perpetual war as well…

If it’s too loud- you’re too old.

19 Sunday Aug 2012

Posted by darbikrash in Capitalism, Consumerism, Corporate State

≈ 1 Comment

Tags

Chris Hedges, Déclassé Intellectuals, Dissent, Human Rights Foundation, Inverted Totalitarianism, Joseph Schumpeter, Kremlin, Marx, Moscow, Punk Rock, Pussy Riot, Putin, Revolution, Social Unrest

That epiphany from the ‘60’s would seem just as relevant today in separating the grey suited establishment war mongers from the more enlightened artistic underclass- if one is to follow the travails of the Russian all girl punk band, Pussy Riot.

MOSCOW — The face of dissent in Russia was once that of the outcast intellectual such as Nobel laureates Andrei Sakharov and Alexander Solzhenitsyn. Then it was the oligarch who grew rich in the post-Soviet chaos and used his wealth to challenge the Kremlin.
The torch was passed again on Friday.

A Moscow court convicted three young punk rockers, members of the provocatively named group Pussy Riot, of “premeditated hooliganism” and sentenced them to two years in prison. The crime: a February “punk prayer” at Moscow’s Christ the Savior Cathedral in which the balaclava-clad, mini-skirted rockers appealed for the downfall of President Vladimir Putin.

The litmus test for any societies tolerance for free speech and freedom of expression has for several decades been vulnerable to exposure by punk music. Designed specifically to shock and mobilize awareness, the overclass has historically been unable to process the messaging intrinsic to this form of expression, as its unformed, inchoate rage is destabilizing to a political economy that requires compliance, conformity, and coercion in addressing normative society.

A fiction writer from the Golden Age of Russian literature could never have dreamed up a scenario as absurd and a story as far-fetched as the persecution of the punk rock band Pussy Riot,” two activists with the Human Rights Foundation, chaired by Kasparov, wrote in an article for Forbes magazine’s website.

Sneering at the faux teen rebellion embodied by the ‘50’ and ‘60’s rock music movement, the punk movement disavowed any necessity to even play a musical instrument, as listening to a track or two from Pussy Riot will bear witness.

This result is confusing, and at the same time profoundly disturbing to the criminal overclass (deservedly) hypersensitive to the ground swell of unpredictable social movement as evidenced by recent OWS protests, riots in Paris suburbs, and similar uprisings across the world. These flare ups are symptomatic of a deep and profound buildup of rage that is slowly recognizing, en masse, the failure of capitalism and the rapidly manifesting loss of social mobility perhaps best expressed by the two word anthem of a violently nihilistic generation – No Future.

In an apparent show of solidarity, an apartment dweller across the street from the courtroom blared one of the group’s songs loud enough to disturb the judge’s reading of the verdict. Police scrambled to cut the electricity to the apartment and silence the protest.

Relatives, friends and other spectators in the courtroom shouted, “Shame!” when the judge imposed the sentence. Outside, police detained supporters thronging the building, roughing up and arresting at least 60, independent Russian media reported, including former world chess champion Garry Kasparov.

A generation that has lost hope is a dangerous generation indeed.

With its origins in places like Manchester, England, New York, and Los Angeles, disenfranchised youth banded together under the auspices of loud and violent music to commiserate, and at the same time ventilate, pent up fury upon discovery of the grim future first posited under the Reagan and concomitant Thatcher administrations. Lashing out first at any authority figures, the diffuse wave of anger soon settled on corporations and neo-liberal figureheads such as Reagan and Thatcher to receive the brunt of the vehemence.

This renewed focus soon enjoined the intelligentsia, always watchful for a grass roots movement to carry forth a sympathetic political message, the poli-sci majors and other college students soon joined their working class brethren to reject the on campus messaging of the likes of the Young Republicans and other social groups and class structures designed to advance the education, furtherance, and maintenance of the rentier class.

Austrian economist Joseph Schumpeter theorized in the late ‘30’s that Marx’s prediction of a revolt initiating from the working class was wrong, he disagreed, suggesting instead that the spark would come from déclassé intellectuals-a point furthered by Chris Hedges’ assertion that this movement would be joined by under utilized (and unemployed) professional workers.

Though the rockers’ plight could fade from public attention over time, they represent “a potential spark out there,” said Paul Gregory, a Russian scholar at Stanford’s Hoover Institution, pointing to the power of international cultural figures in the volatile political atmosphere in Russia.

But if something were to happen to one of the young rockers in prison, like a suspicious death or suicide, that could be “the kind of thing that could bring millions of people out on the streets,” Gregory said.

Indeed.

With names like The Slits, The Raincoats, Pylon, Au Pairs, Blood on the Saddle, Kleenex, and the Bush Tetras, the pioneering girl punk bands of the late ’70 and early ‘80’s brought a notable message to the scene.

The torch has been passed.

King Romney’s Turd on a Silver Platter: Paul Ryan

18 Saturday Aug 2012

Posted by xraymike79 in Capitalism, Corporate State, Empire, Inequality, Wall Street Fraud

≈ 3 Comments

Tags

America's Plutocratic Traditions, Ayn Rand, Corporatocracy, Financial Elite, Gross Inequality, Inverted Totalitarianism, Neoliberal Capitalism, Paul Ryan, Poverty, Privatization, Rage Against the Machine, Regulatory Capture, Security and Surveillance State, Taming Democracy, Terry Bouton, The Elite 1%, War for Profit

Just discovered this blog: The Paul Ryan Watch:

Paul Ryan, cool cat wannabe, loves Rage Against the Machine’s music, he says. He must not listen to the lyrics. Here’s what the band’s guitarist/activist Tom Morello has to say:

Ryan’s love of Rage Against the Machine is amusing, because he is the embodiment of the machine that our music has been raging against for two decades. Charles Manson loved the Beatles but didn’t understand them. Governor Chris Christie loves Bruce Springsteen but doesn’t understand him. And Paul Ryan is clueless about his favorite band, Rage Against the Machine.

Rolling Stone has more.

As Paul Ryan preaches to the masses about the evils of living on the dole of government largesse, it was revealed recently that his family’s fortune was made from contracts with the U.S. government.

And of course he had to recently disavow himself from his ethical and spiritual idol, Ayn Rand:

Such pompous, self-serving, and seemingly sociopathic behavior among the elite in capitalist America is nothing new. As a matter of fact, it seems to have always been the norm in American history:

America’s Plutocratic Traditions

I recently read a book by University of Maryland historian Terry Bouton, Taming Democracy, which is an account of the intense struggles over wealth and power that emerged in the earliest days of the United States. Bouton’s detailed research was focused on Pennsylvania, but he describes patterns that also appeared elsewhere in the infant republic.

The core of the story he tells is that the colonial coalition that made possible the political break with Britain fractured even while the Revolutionary War was still in progress, as wealthy interests in the colonies quickly had second thoughts about the democratic fervor that they had helped to set in motion and how it might jeopardize their ability to amass still more wealth….

…The story demonstrates that strong class consciousness and class-specific drivers of policy have been a major part of American politics since independence. A key part of that class struggle all along has been a strong sense among a wealthy elite of separateness from the non-wealthy, and of having a right to push hard for public policies that favor their own class even if they are clearly detrimental to others.

A major figure in Bouton’s account is the Philadelphia merchant and financier Robert Morris…

…An even more blatant ploy of using government to favor his own class’ interests at the expense of others concerned speculation in war debt. Amid poverty, scarcity of money, and uncertainty about government funding of debt, many holders of IOUs — who had furnished support to the war effort ranging from food to blacksmithing — sold them for cents on the dollar to speculators who hoped to redeem them eventually for much more than that.

Morris not only participated in this game but openly promoted it. He told the Continental Congress in 1782 that speculators should be encouraged to buy up the IOUs “at a considerable discount” and then have the government bring the pieces of paper “back to existence” by paying them off at top dollar.

This big transfer of wealth would provide the affluent with “those funds which are necessary to the full exercise of their skill and industry.” Bouton writes, “As Morris saw it, taking money from ordinary taxpayers to fund a huge windfall for war debt speculators was exactly the kind of thing that needed to be done to make America great.”

We have tended to whitewash such aspects of American history from our consciousness, for several reasons. One is the hagiography we customarily apply to the Founding Fathers. Another is that we lose sight of the connections between class consciousness of the past and that of today by euphemizing today’s version and espousing more subtle notions of trickle-down economics than the crude version that Morris espoused.

People of his economic stratum were known at the time as “gentlemen”; today they would more likely be called “job creators.” A further reason is Americans’ belief in the national myth that America is less stratified into classes, and exhibits more mobility between classes, than do other countries and especially the old countries of Europe. That myth has become increasingly distant from fact in recent decades…

For those who believe that class structure and the struggles therein do not exist in America, history shows that it has always been a part of our country, reasserting itself with a vengeance in recent times. With the elite having a lock on mass media and now the use of the empire’s security and surveillance state to squash dissenters, malcontents, and any challengers of the status quo, there does not seem to be any going back to a society embodied by a strong middle class, especially in an age where the economic pie is forever shrinking.

Update on the Embattled Water-Energy-Food Nexus

18 Saturday Aug 2012

Posted by xraymike79 in Climate Change, Ecological Overshoot, Environmental Degradation, Peak Oil, Pollution

≈ 2 Comments

Tags

American Livestock Industry, Biofuels, Climate Change, Collapse of Industrial Civilization, Drought in America's Bread basket, Ecological Overshoot, Environmental Collapse, Global Warming, Peak Oil, U.S. Department of Agriculture, United Nations Food and Agriculture Organization, Water-Energy-Food Nexus

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.

America’s Two-Headed Corporate Hydra Monster of Politics & the Abandonment of the People

16 Thursday Aug 2012

Posted by xraymike79 in Capitalism, Corporate State, Empire, Inequality, Wall Street Fraud

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Barack Obama, Chris Hedges, Collapse of Industrial Civilization, Corporate State, Cult of Individualism, Economic Collapse, Empire, Financial Elite, Gross Inequality, Inverted Totalitarianism, Jeffrey Sachs, Mitt Romney, Neoliberal Capitalism, Police State, Poverty, Privatization, Regulatory Capture, Security and Surveillance State, Social Unrest, The Elite 1%, Wall Street Fraud, War for Profit

Jeffrey Sachs’ op ed piece entitled “America Has Lost the battle Over Government” in the Financial Times explains how the budget plans of our two corporate candidate stooges are strikingly similar and offer no real choice for the American citizen. With the modern-day instruments of mass media manipulation being the most sophisticated tool for mind control in the history of man, you are made to think that the current election is an epic struggle between the forces of good and evil, but the American’s fate of joblessness, dwindling social assistance programs, a permanently growing underclass, and the slide into an oligarchic Third World country has already been written in stone by the transnational capitalist forces and its corporate state. Crime will surely go up, lifespan expectancy will go down for the underclass, and the infrastructure of the nation will continue its trajectory into dilapidation and decay. Sacrificing your body in the Empire’s foreign resource wars and geopolitical games will be one of the only jobs available for our debt-ridden youth:

…Mr Ryan’s plan calls for federal revenues of 18.4 per cent of gross domestic product in 2016 and 18.5 per cent in 2020 (though his lower tax rates would probably put those targets out of reach). His budget outlays come in at 19.7 per cent and 19.5 per cent in 2016 and 2020, respectively. Of the total outlays in 2016, Mr Ryan targets “discretionary” programmes at 5.9 per cent of GDP; social security, 5 per cent; Medicare, 3.2 per cent; other mandatory spending, 3.7 per cent; and interest payments, 1.9 per cent.

Now consider Mr Obama’s budget unveiled in February. Federal revenues are targeted at 19.1 per cent of GDP in 2016 and 19.7 per cent of GDP in 2020, only about 1 percentage point above Mr Ryan’s revenue targets. In Mr Obama’s 2016 budget targets, discretionary spending is set at 5.9 per cent of GDP; social security, 5 per cent; Medicare, 3.2 per cent; other mandatory spending, 5.8 per cent; and interest payments, 2.5 per cent.

In fact, Mr Obama’s overall discretionary spending targets are essentially the same as Mr Ryan’s. Whether Mr Obama or Mr Romney wins, the “non-security” discretionary budget – for education, job skills, infrastructure, science and technology, space, environmental protection, alternative energy and climate change adaptation – is on the chopping block. Mr Obama’s budget would shrink non-security discretionary programmes from an already insufficient 3.1 per cent of GDP in 2011 to 1.8 per cent in 2020. That is the “liberal” alternative.

In bemoaning Mr Obama’s budget, I do not mean to equate it with Mr Ryan’s. Mr Ryan’s budget is nothing short of heartless in the face of the dire crisis facing America’s poor. It is also reckless, guaranteed to leave millions of children without the quality of education and skills they will need as adults. Yet the sad truth is that the Democrats offer no progressive alternative. Both parties are accomplices to the premeditated asphyxiation of the state. Viewed from an international perspective, the constricted range of the US fiscal debate is striking. Total US government revenues (combining federal, state and local governments) in 2011 came in at about 32 per cent of GDP. This compares with an average of 44 per cent in the EU and 50 per cent in northern Europe.

Many Americans will say that they are dodging the European curse by keeping taxation so low but they should look again. Northern Europe (Germany, the Netherlands, Denmark, Finland, Norway and Sweden) gets great value for its tax revenues: lower budget deficits, lower unemployment rates, lower public debt-to-GDP ratios, lower poverty rates, greater social mobility, better job training, longer life expectancy, lower greenhouse gas emissions, higher reported life satisfaction and greater macroeconomic stability.

America’s two political parties depend on wealthy contributors to finance their presidential campaigns. These donors want and expect their taxes to stay low. As a result, social divisions, broken infrastructure, laggard educational attainments, high carbon emissions and chronic budget deficits are likely to continue no matter who is elected, even though the public supports higher taxes on corporations and the rich…

Chris Hedges was back in court over the government’s appeal of Judge Forrest’s earlier injunction of the NDAA. As a matter of fact, the government has refused to comply with the injunction. Hedges states he and the other plaintiffs “will most likely have to continue this fight in an appellate court and perhaps the Supreme Court.” He also notes that no matter the results of the rigged U.S. elections, no meaningful change will come to the deteriorating lives of ordinary Americans:

…The corporate state has convinced the masses, in essence, to clamor for their own enslavement. There is, in reality, no daylight between Mitt Romney and Obama about the inner workings of the corporate state. They each support this section within the NDAA and the widespread extinguishing of civil liberties. They each will continue to funnel hundreds of billions of wasted dollars to defense contractors, intelligence agencies and the military. They each intend to let Wall Street loot the U.S. Treasury with impunity. Neither will lift a finger to help the long-term unemployed and underemployed, those losing their homes to foreclosures or bank repossessions, those filing for bankruptcy because of medical bills or college students burdened by crippling debt. Listen to the anguished cries of partisans on either side of the election divide and you would think this was a battle between the forces of light and the forces of darkness. You would think voting in the rigged political theater of the corporate state actually makes a difference. The charade of junk politics is there not to offer a choice but to divert the crowd while our corporate masters move relentlessly forward, unimpeded by either party, to turn all dissent into a crime…

A lot of Americans buy into this “cult of individualism” and anti-government sentiment which the elites of the corporate state artfully peddle in order to dismantle any remnants of a functioning government that might serve the common good of its citizenry. In this way, the corporate state has convinced the masses to cheer the destruction of government and its beneficial roles. But of course we cannot call our lobbyist-infested, corporate-controlled government an actual representation of the people’s interests. Just as our two-partied presidential election is an orchestrated illusion of democracy, so is the false dichotomy of government and corporations which are merely separated by a revolving door. The government has become, for the most part, a tool for wealth extraction by multinational corporations. During a period of multiple civilization-ending crises when leadership is in dire need, the degeneration of government from a socially beneficial entity into a puppet of Wall Street’s rapacious greed is the greatest tragedy of our time.