My Daughter

My Daughter
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Wednesday, March 30, 2005

Pearls of Wisdom on Peak Oil

Today, I have put together a blog that is the cumulative utterances of a group of people who just don’t quite get it as yet. The only editing I have done is for spelling and pronouns; otherwise, it is unaltered.

I think the whole “Peak Oil” concept is full of shit. They seem to imply that a loss of oil as an abundant fuel source will cause a great collapse. I believe the loss itself will be insignificant. If we witness a decrease in the availability of oil it is doubtful it will be abrupt. The USA has a lead in technology and military forces which should allow us to control the sea lanes and the relative availability of energy. Alternative energy sources will be developed. Inefficient machines can be improved. It is not logical to assume we will not.

It is cheaper to import and drill outside of the US, thus the decline in domestic production. Plus, in some cases, it is easier to refine... how many capped wells are in the US? It is far cheaper to drill in third world countries than here, unless the well will produce several million barrels—which is why they are drilling in selective offshore sites. Domestic oil production is down because someone else will pump it for cheaper. If you haven't seen this, you really need to open your eyes. It’s called strategy. We save the domestic oil for war.

If oil goes away or becomes expensive—then so what? It’s inflation. What does that have to do with me starving to death? The possibility that the supply of oil may be declining is insignificant in comparison to the infinite number of responses to that decline. It is unforeseen what scientific, socio/political and military responses will arise out of that decline. We can run out of oil in 5 years and it won't be a problem...something else will come along, that's what they fail to understand. We invent things as needed and wanted. The invention of nuclear power means that energy IS an infinite resource.

It would require a truly non-trivial investment, but we could eliminate our dependency on mined petroleum products completely and synthesize all that we need. It starts by growing enormous quantities of vegetable matter of any kind. Whatever grows in considerable bulk in a short time is ideal. The rest is organic chemistry. [Peak oil is] nonsense...we have all the oil we need for thousands of years in the form of coal.

And how about water for fuel? I think it is called a water fuel cell. I'll tell you all a story... I used to work in the Indy car series for about 12 years (btw they use methanol or as some say alcohol). About 8 to 9 years ago, a friend contacted me about a "new" team starting up to run Indy and they were sure they could win this race because they could run the whole race on about 2 gals of "fuel" so less pit stops, tires only.

He begin to explain to me about a guy that has invented a way to extract or make hydrogen from water and the byproduct from the burn in a combustion chamber was water, hence no environmental hazards...all this sounds to good to be true. I had to keep this to myself and the government would post guards at the garage doors at the speedway to prevent someone from stealing the technology, etc.

Well it never happened, because I was told that the oil industry is so big that it would cause so many to lose jobs, money, etc and the economy would be hurt. This technology exists now...can you imagine going from, say New York to California, and stopping at a rest stop to "piss" in your tank so you can go a few hundred more miles? Sounds kinda neat to me.

God help us all.

Sunday, March 27, 2005

Weeping for the Future

In it's quest to define itself, each generation breaks through boundaries set by previous generations.

The young innovate, test limits, and challenge assumptions, driving the human race forward. All of us can point to historic figures who were seen as radical in their own time, who were venerated by later events and understanding. From Socrates to Einstein to Mozart, among countless others, harnessing this youthful abandon has fueled revolutions in human civilization.

These startling advances are born in the random chaos of youth, and mature with the generation which dared to dream it.

For countless eons, humanity has struggled generation by generation with this ancient formula. And as each generation is born matures and dies, they add to the tapestry of human endeavor. They leave their footprint upon history.

Casting our gaze back through time, we marvel at the rich and tragic adventures of our ancestors. From the obsessive and fierce warrior generations of ancient Sparta, to the sacrifice of the world war generations, to the selfish American 80's, all of this brings us to where we are today.

Today's young have striped the innocence of youth away, and replaced it with a brutal, quasi-pragmatic disdain for morality not only in practice, but as a principal itself.

As America causally embraces the values of it's new generations, as is the time honored tradition, it is changing our culture in fundamental ways. With Hip Hop & Rap music filling the air, angry young men & even young girls are being indoctrinated into a mindset of violence which exists in the moral vacuum which passes for a culture in today's America, and many other countries as well.

So enjoy yourselves America, as you sit ringside at the greatest show on Earth. I sincerely hope you are entertained by the antics of the violent, misogynistic, apathetic, immoral children you have sired.

Somebody get jiggy with something...


Feb. 2, 1996
Moses Lake, Wash. Two students and one teacher killed, one other wounded when 14-year-old Barry Loukaitis opened fire on his algebra class.
March 13, 1996
Dunblane, Scotland 16 children and one teacher killed at Dunblane Primary School by Thomas Hamilton, who then killed himself. 10 others wounded in attack.
Feb. 19, 1997
Bethel, Alaska Principal and one student killed, two others wounded by Evan Ramsey, 16.
March 1997
Sanaa, Yemen Eight people (six students and two others) at two schools killed by Mohammad Ahman al-Naziri.
Oct. 1, 1997
Pearl, Miss. Two students killed and seven wounded by Luke Woodham, 16, who was also accused of killing his mother. He and his friends were said to be outcasts who worshiped Satan.
Dec. 1, 1997
West Paducah, Ky. Three students killed, five wounded by Michael Carneal, 14, as they participated in a prayer circle at Heath High School.
Dec. 15, 1997
Stamps, Ark. Two students wounded. Colt Todd, 14, was hiding in the woods when he shot the students as they stood in the parking lot.
March 24, 1998
Jonesboro, Ark. Four students and one teacher killed, ten others wounded outside as Westside Middle School emptied during a false fire alarm. Mitchell Johnson, 13, and Andrew Golden, 11, shot at their classmates and teachers from the woods.
April 24, 1998
Edinboro, Pa. One teacher, John Gillette, killed, two students wounded at a dance at James W. Parker Middle School. Andrew Wurst, 14, was charged.
May 19, 1998
Fayetteville, Tenn. One student killed in the parking lot at Lincoln County High School three days before he was to graduate. The victim was dating the ex-girlfriend of his killer, 18-year-old honor student Jacob Davis.
May 21, 1998
Springfield, Ore. Two students killed, 22 others wounded in the cafeteria at Thurston High School by 15-year-old Kip Kinkel. Kinkel had been arrested and released a day earlier for bringing a gun to school. His parents were later found dead at home.
June 15, 1998
Richmond, Va. One teacher and one guidance counselor wounded by a 14-year-old boy in the school hallway.
April 20, 1999
Littleton, Colo. 14 students (including killers) and one teacher killed, 23 others wounded at Columbine High School in the nation's deadliest school shooting. Eric Harris, 18, and Dylan Klebold, 17, had plotted for a year to kill at least 500 and blow up their school. At the end of their hour-long rampage, they turned their guns on themselves.
April 28, 1999
Taber, Alberta, Canada One student killed, one wounded at W. R. Myers High School in first fatal high school shooting in Canada in 20 years. The suspect, a 14-year-old boy, had dropped out of school after he was severely ostracized by his classmates.
May 20, 1999
Conyers, Ga. Six students injured at Heritage High School by Thomas Solomon, 15, who was reportedly depressed after breaking up with his girlfriend.
Nov. 19, 1999
Deming, N.M. Victor Cordova Jr., 12, shot and killed Araceli Tena, 13, in the lobby of Deming Middle School.
Dec. 6, 1999
Fort Gibson, Okla. Four students wounded as Seth Trickey, 13, opened fire with a 9mm semiautomatic handgun at Fort Gibson Middle School.
Dec. 7, 1999
Veghel, Netherlands One teacher and three students wounded by a 17-year-old student.
Feb. 29, 2000
Mount Morris Township, Mich. Six-year-old Kayla Rolland shot dead at Buell Elementary School near Flint, Mich. The assailant was identified as a six-year-old boy with a .32-caliber handgun.
March 2000
Branneburg, Germany One teacher killed by a 15-year-old student, who then shot himself. The shooter has been in a coma ever since.
March 10, 2000
Savannah, Ga. Two students killed by Darrell Ingram, 19, while leaving a dance sponsored by Beach High School.
May 26, 2000
Lake Worth, Fla. One teacher, Barry Grunow, shot and killed at Lake Worth Middle School by Nate Brazill, 13, with .25-caliber semiautomatic pistol on the last day of classes.
Sept. 26, 2000
New Orleans, La. Two students wounded with the same gun during a fight at Woodson Middle School.
Jan. 17, 2001
Baltimore, Md. One student shot and killed in front of Lake Clifton Eastern High School.
Jan. 18, 2001
Jan, Sweden One student killed by two boys, ages 17 and 19.
March 5, 2001
Santee, Calif. Two killed and 13 wounded by Charles Andrew Williams, 15, firing from a bathroom at Santana High School.
March 7, 2001
Williamsport, Pa. Elizabeth Catherine Bush, 14, wounded student Kimberly Marchese in the cafeteria of Bishop Neumann High School; she was depressed and frequently teased.
March 22, 2001
Granite Hills, Calif. One teacher and three students wounded by Jason Hoffman, 18, at Granite Hills High School. A policeman shot and wounded Hoffman.
March 30, 2001
Gary, Ind. One student killed by Donald R. Burt, Jr., a 17-year-old student who had been expelled from Lew Wallace High School.
Nov. 12, 2001
Caro, Mich. Chris Buschbacher, 17, took two hostages at the Caro Learning Center before killing himself.
Jan. 15, 2002
New York, N.Y. A teenager wounded two students at Martin Luther King Jr. High School.
Feb. 19, 2002
Freising, Germany Two killed in Eching by a man at the factory from which he had been fired; he then traveled to Freising and killed the headmaster of the technical school from which he had been expelled. He also wounded another teacher before killing himself.
April 26, 2002
Erfurt, Germany 13 teachers, two students, and one policeman killed, ten wounded by Robert Steinhaeuser, 19, at the Johann Gutenberg secondary school. Steinhaeuser then killed himself.
April 29, 2002
Vlasenica, Bosnia-Herzegovina One teacher killed, one wounded by Dragoslav Petkovic, 17, who then killed himself.
April 14, 2003
New Orleans, La. One 15-year-old killed, and three students wounded at John McDonogh High School by gunfire from four teenagers (none were students at the school). The motive was gang-related.
April 24, 2003
Red Lion, Pa. James Sheets, 14, killed principal Eugene Segro of Red Lion Area Junior High School before killing himself.
Sept. 24, 2003
Cold Spring, Minn. Two students are killed at Rocori High School by John Jason McLaughlin, 15.
Sept. 28, 2004
Carmen de Patagones, Argentina Three students killed and 6 wounded by a 15-year-old Argentininan student in a town 620 miles south of Buenos Aires.
March 21, 2005
Red Lake, Minn. Jeff Weise, 16, killed grandfather and companion, then arrived at school where he killed a teacher, a security guard, 5 students, and finally himself, leaving a total of 10 dead.

Quid Pro Quo

Saturday, March 26, 2005

Peak Oil Solutions: Ideology versus Reality

We have come to that point in time where we must see the difference between finding ways of enlarging human carrying capacity and finding ways to exceed it. Even some “alarmists” or doomers have yet to fathom our present predicament. These conditions we are seeing are not of recent origin, and will not soon go away. Peak oil is more of a milestone, rather than an initiating event. We have been in overshoot for some time now, living precariously on a phantom carrying capacity through the advent of fossil fuels. We have disregarded a plethora of instances in which populations of organisms so changed their own environments that they undermined their ability to support them. Most of us didn’t know that this was what these examples were showing us—and we surely never thought the pattern would ever apply to us.

So, with the dawn of peak oil looming on the horizon, just what do we do? While there are many camps of thought and ideals, it seems that there are two that are dominating. Here are two quotes from William Catton, the author of Overshoot; the Ecological Basis of Evolutionary change to illustrate those two camps. If you have not read this book, I encourage you to do so. Some excerpts can be found here:

“… people continue to advocate further technological breakthroughs as the supposedly sure cure for carrying capacity deficits. The very idea that technology caused overshoot, and that it made us too colossal to endure, remains alien to too many minds for"de-colossalization" to be a really feasible alternative to literal die-off. There is a persistent drive to apply remedies that aggravate the problem.”

This is cargoism: A faith in technology will stave off institutional change. The mere idea of a “powerdown” and accepting finite limits runs counter grain to their way of thinking. This solution entails accelerating the drawdown. It remedies the near future problems by shortening our future.

”If any substantial fraction of the more colossal segments of humanity did conscientiously give up part of their resource-devouring extensions out of humane concern for their less colossal brethren, there is no guarantee that this would avert die-off. It might only postpone it, permitting human numbers to continue increasing a bit longer, or less colossal peoples to become a bit more colossal, before we crash all the more resoundingly. All this tends to be disregarded by advocates of a "return to the simple life" as a gentle way out of the human predicament.”]

While many might call this realism, feeling that major changes must take place, the advocacy by some of a “powerdown” also has its myopic components. We can’t continue to do the same thing, but just less so. And whatever we do, everyone must participate or it becomes a fool’s errand. Conservation and energy efficiency get you nowhere if Jevon’s Paradox gets a part in the play. There must be a paradigm shift in our view of the world about what is important and what is not. This entails learning to live within the carrying capacity without trying to enlarge it. We must rely on renewable resources consumed no faster than at sustained yields. We must be modest in our being.

So, just who is winning this “battle for a solution”? Neither camp. For now, it is an intellectual battle of ideals while another battle rages and dominates. We are reverting back to the time-honored and time-tested takeover method of enhancing human carrying capacity, albeit a rather focused one on who gets enhanced. That is the reality of the “solution” in progress.

“America, declared Paul Wolfowitz, must be ready to go to war, and many should be prepared to die.” “No threats to our “global dominance” will be tolerated - that will be the “dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources [oil] would, under consolidated control, be sufficient to generate global power.”

From society’s point of view, geopolitics is a Darwinian collective struggle for increased carrying capacity; but from the individual geostrategist’s viewpoint, it is a game they are convinced they can win. And that, my friends, is the game that is afoot. For the moment, we can forget a techno-fix or a powerdown, what we get instead as an answer and solution to Peak Oil is a Resource War disguised as a War on Terror.

Friday, March 25, 2005


Why does Peak Oil make me uncomfortable? It's really all about one thing: Fear.

As those who know me can attest, I'm not exactly one who's shy with my opinions in person. Yet, more a reader than a writer, I tend to chew my thoughts over obsessively before committing an essay to paper or screen. Often it's the key insight of a great writer who provides the final piece I need to understand how to express an idea I've been feeling an urge to share. Such was the case when I read Gore Vidal's latest interview by CityPages this morning.

Iraq is a symptom, not a cause. It's a symptom of the passion we have for oil, which is a declining resource in the world. Alternatives can be found, but they will not be found as long as there's one drop of oil or natural gas to be extracted from other nations, preferably by force by the current junta in charge of our affairs.

Although Vidal answers the interviewer's question in a matter-of-fact manner, his mention of Peak Oil, and even Iraq, is secondary to his larger point: we have allowed our national policies to be taken over by those who use fear as their motivator to achieve their own personal ends.

Fear of terrorism, fear of WMDs, fear of Muslims. Fear of penniless retirement. Fear of homosexuality, fear that God's very existence may be threatened by doubters.

Now, terrorism is a wonderful invention because it doesn't mean anything. It's an abstract noun. You can't have a war against an abstract noun; it's like having a war against dandruff. It's meaningless.

But you can terrify people. The art of government now, the art of control as practiced by the current junta, is: Keep the people frightened. It's exactly what Adolf Hitler and his gang did. Keep them frightened: The Russians are coming. The Poles are killing Germans who live within the borders of Poland. The Czechs are doing the same thing in the Sudetenland. These are evil people. We must go after them.

I've understood this viscerally, if not consciously, as it has grown around us over the last four years to become the modus operandi for US policy-making, or, more appropriately, policy-marketing to the public.

To the extent that the message of Peak Oil is one of alarm, and imminent catastrophe if we fail to act, I've felt a nameless discomfort in adding to the cries of warning. Not because the facts about Peak Oil are in doubt (to anyone who is "a reader", as Bill Hicks once confessed to be) but because without a clear plan for action, more fear is just more gasoline to the fire.

Fear, though, relies on disinformation to germinate and spread. Only Truth, delivered in calm tones, can dispel Fear. This is the vital contribution of you, the Peak Oil community, including this blog.

Keep everybody frightened, tell them lies--and the bigger the lie, the more they'll believe it. There's nothing the average American now believes (because he's been told it 10,000 times a day) that is true. Now how do you undo so much disinformation? Well, you have to have truth squads at work 24 hours a day every day. And we don't have them.

So let's go easy on the Fear, and think of ourselves as a Truth Squad. It's not too late to prevent things from going from bad to worse, but it can only be done by getting the real story out there. The challenge is to do it without adding to the fear, but by exposing the fear as a tool for control, and banishing it with facts and reason, we have a stronger chance for success.

A final valuable point Vidal makes that I think is worth stressing is the cost of the trade-offs we are already making. If presented with a choice, to spend the billions we are spending on "stability in the Middle East" (ok, quit chuckling) or on a long term solution to our energy needs, I confidently believe most Americans would choose the latter.

Ultimately the whole thing is about oil. We should be looking to hydrogen, or whatever is the latest replacement for fossil fuels. All the money we put into these wars in the Middle East, we should have put into that. Then we wouldn't be so desperate at the thought that in 2020, or in 2201 or whenever, there will be no more oil.

The only remaining question is whether the ever-present Fear, whipped up by a powerful few whose personal interests are opposed to such a solution, will be allowed to obscure the fact that it is our choice to make.

Wednesday, March 23, 2005

Walking Walmart

Don't ask why I was there...

But I was walking through Walmart today, and as anyone who has been to Walmart can attest, it's a vast sea of crap with the good stuff (read electronics, movies, games, etc...), all the way in the back, (So you have to walk past all their other stuff to get there).

So as I'm passing the children's clothes section, weaving in and around turnstiles of textile packed displays, it occurred to me that the tiny little skirts and shirts and blue jeans with the faded knees already in place, may well have been crafted by Chinese children no older than the kids who will eventually wear this stuff.

This grim image of impoverished children making clothes just their size, but which they could never afford, to be shipped to more fortunate American children...

If this already occurred to you and was no big deal... shame on you.

If you never thought of it like this before, try staring at a cute little kids outfit for a moment the next time you're in a Walmart.

You'll see yourself staring back...

Monday, March 21, 2005

Well well well...

"The Organization of Petroleum Exporting Countries agreed last week to boost its output quota by 500,000 barrels a day, or 1.9 percent. Members are already producing above their quotas."

"Joe says traders talked about that concept all last week (and remember this was the week that OPEC announced it was boosting production by 500,000 barrels a day) and the market proceeded to take oil to a new intraday high at $57.62 a barrel. "

Does anyone take these OPEC announcements seriously?

Wallstreet seems to doubt the authenticity of these promised increases.

It's a little difficult to believe that any producer anywhere is holding back production at these prices.

The sad truth is that the world is currently producing the most oil it is capable of.

With only a fraction of new fields scheduled to come online in the future needed to replace known depletion in existing fields, how can anyone doubt that we are seeing the global peak of hydrocarbon production right now?

This should be headline news around the globe every day.

The predictions of Simmons & Campbell et al, have seemingly materialized, and the nations of the world will soon have no choice but to acknowledge this reality.

OPEC members have misrepresented reserve figures.

New oil fields have failed to materialize as promised.

We are failing to replace oil lost to known depletion in existing fields.

It seems clear that 80 something mbpd is the most oil we will ever produce.

Peak Oil is now.

Saturday, March 19, 2005

Saudi Arabia's Secret Agenda

Nowhere on Earth can you name a more tightly held theocratic nation than Saudi Arabia.

Devoutly Muslim, Saudi Arabian government is based on the dictates set forth in the Quran centuries ago. While scholars argue aver the arcane trivia of this religious text, the Saudi's map their legal practices directly to the scripture. The standards set forth for justice in the Quran are literally embodied in Saudi law, as seen in it's many "unique" legal practices.

However, beheading and ritual torture are not the only principals described in the Quran.

Avoiding the trap of interpretation of specific passages, suffice to say there is no shortage of condemnation for the "lesser" religions of our world. Allah is the one true god, Islam is the one true path etc...

There is indeed a sentiment which prevails in the Quran, as well as many Muslim cultures, that these non-Muslim peoples will destroy themselves through their unholy ways basically. Ask any mainstream Muslim that question. After all the polite squirming and posturing is over, what emerges is that Islam is a superior way of life, and that sinners will suffer by their evil deeds.

So I picture myself in Riyadh, a devout Muslim with control over the primary energy resource for the world. I realize that if I ever withhold my oil for any serious period of time, I invite certain attack by nations like the US hungry for my oil. So an embargo or two besides... that's out. At some point I also realize that my vast oil fields won't last forever, and will actually "peak" in production at some point and decline afterward. I know if prices for oil rise too high, demand for my oil will be destroyed and oil alternatives encouraged, so my best bet is to find ways to keep my wellhead production at maximum levels unless prices drop. This allows me to maximize the amount of my original endowment of oil being sold for the most money by avoiding the demand destruction higher prices would bring.

I also know that Western cultures in their greedy and sinful lives, are utterly dependent on my oil for their economic health. If I allow natural depletion to gradually be absorbed by the world's economy through higher prices over decades, the impacts of this transition are minimized. However, what happens to these oil dependents if I artificially maintain production well past my field's natural peak production? Not only do I sell my oil for maximum profit today and tomorrow, but I can give the heathens enough rope... and let Allah do the rest.

It seems pretty unlikely to me that Saudi Arabia has never considered what significant drops in oil production numbers would do to many country's economies.

Given the certainty of peak production in any oil field, and the terrible consequences to global markets with commodity shortages, OPEC's policy of publishing only bland assurances of production capacity are a terrible gamble for our planet.

Can anyone name a more potent weapon?

I sometimes visit a local liquor store where a friendly Muslim man is the clerk. He's always polite and nice to everyone and does his job well. Being a good Muslim, he does not drink himself, and in fact considers it a sin. He's way too polite to ever say so out loud of course, but the unspoken fact of our relationship is that in his heart he considers me a sinner for buying & consuming his alcohol, and that I will get "what's coming to me" as a result.

Is the west being setup so we "get what's coming to us"?

Tuesday, March 15, 2005

Deus Ex Economy

"where an author uses some improbable (and often clumsy) plot device to work his or her way out of a difficult situation."

Literally "God from the Economy".

Deus Ex Machina originally referred to Greek plays where a Deity would descend from Olympus to drastically alter human lives and circumstance. The Greeks, like so many other cultures, firmly believed the gods took interest in human affairs, and actively participated in individual lives.

Centuries of human civilization, where the unexplained or unexpected was attributed to divine intervention.

And as they say... time passed.

Today's modern human is a far cry from the hardly and determined ancestors he descends from. But certain aspects of Hydrocarbon Man are recognizably rooted in our history. Various passions seem to withstand the test of time like hatred, greed, or lust. Some are learned habits such as our marvelous use of tools, while some are simple routines like braiding your hair. But all of these things stretch across thousands of unknown centuries and geographic boundaries and are as real today as they have ever been.

Perhaps our need to believe in some directed force guiding our lives is one such inherited trait?

Despite being expressed in as many different ways as their are people to experience it, today's predominant belief system is without question the world economy. Like fish immersed in water, we float almost unaware in a warm and sustaining sea of markets, and could scarcely imagine otherwise. So unfaltering is our belief in this system, that attempts to question it are viewed as absurd by many. Just like our Greek fore-bearers, we accept the pronouncements of the market without regard for it's credibility, and even in the face of clear evidence to the contrary.

We have become accustomed as a species to this "God from the Economy" world view, where we mortals enjoy the heavenly intervention of the all powerful market forces.

But is our common belief of Deus Ex Economy justified, or a dangerous and embarrassing hand me down from our past?

In view of hydrocarbon depletion, maybe it's just some implausible plot twist which will never happen?

Relax... You're soaking in it.

Monday, March 14, 2005

Paying the Piper

The exponential growth of capitalism and the increasing consumption of raw materials and energy that goes with it have resulted in a rapidly compounding environmental problem. Under capitalism, it is the production of goods and services that generate the most profits for capital that are promoted, not those most beneficial to humanity and the earth.

It is important to acknowledge that capitalism is a system that pursues accumulation and growth for its own sake. It is an entity, in of itself, which is driven by the single-minded need on the part of business for ever-greater accumulation of capital. Capitalists do not restrict their activities to the production of commodities that satisfy basic human needs, such as food, clothing, shelter, and the amenities essential to the reproduction of human beings and society. Instead, the production of more and more profits becomes an end in itself, and the types of goods produced or their ultimate usefulness becomes completely immaterial.

Consider my favorite; the leaf blower. I’m sure everyone has his or her own ridiculous item. Caught up in this unrelenting process of accumulation and creative destruction, the system runs roughshod over each and every thing that stands in its path: all human and natural requirements that interfere with the accumulation of capital are considered barriers to be overcome. Thus, every effort is made to avoid the true cost of production, whether at the expense of the environment in terms of pollution, or by ever increasing debt that is laid in the lap of future generations to absorb and deal with like a curse from the past. Capitalism’s private enterprise must be regarded as an economy of unpaid or externalized costs, unpaid in so far as a substantial portion of the true costs of production are shifted to third persons or ultimately borne by society as a whole.

Since this is a structural mindset of capitalism, what likelihood is there that new or newly applied technology will be able to prevent environmental degradation from expanding along with the economy? And I think this applies to techno-fixes, as well as, new primary science like fusion power. Already we are seeing renewed efforts to drill in the Alaska National Wildlife Refuge, along with pending legislation to overturn the ban on coastal offshore drilling. The next round of hurdles to overcome will be those regulations we have enacted to protect the environment, worker’s safety, and an individual’s rights to privacy and from the scourge of tyranny.

I rather doubt we could have ever achieved this level of technological prolific consumption and affluence if we had “paid the piper” as we went. Many businesses would not have been profitable without externalizing the costs. The time to “pay the piper” is upon us: global warming and dimming, lost of top soil, habitat and species loss, and 37 trillion dollars of debt with no end in sight. We have to disembark from the pursuit of short-term profit in the present that comes at the expense of a marginal existence for future generations, both ecologically and financially. This would entail a society governed not by the search for profit but by peoples’ genuine needs, and the requirements of socio-ecological sustainability. The likelihood of a consensus move in that direction taking place anytime soon is probably zero, but with the advent of peak oil on the near horizon, we just might end up there by default.

Friday, March 11, 2005

Sneaking a Quick Peak

Here we are on the upward slope of Hubbert’s Curve producing the most oil ever, at close to the highest prices ever, and yet the supply business is not doing its job at the behest of demand. Profits drive business, and the oil business is not an exception. Recent news has oil companies turning down offers to exploit certain oil deposits in the Caspian Sea area and in offshore tracts in Mexico. Oil executives state that it is not profitable to extract those reserves.

Obviously, the oil business’s major players know about the coming peak of oil production and have a lot to lose if they make poor investment choices. Oil prices have doubled since 2001, but oil companies have increased their budgets for exploration only slightly. Where once there were seven major oil companies, now there are four. Oil companies now increase their reserve holdings by mergers and acquisitions, not new oil finds. And to cap it off, British Petroleum (BP) has changed their name to “Beyond Petroleum”.

Currently, half of the 7,000 vessels in the world's oil tanker fleet are aging single-hull ships, some of them built in the 1950s. These outdated oil tankers are fully booked, but they are also being decommissioned faster than the new double-hull ones are being built. In April 2000, the General Accounting Office released a report prepared by the U.S. Coast Guard that surveyed the U.S. owners of single-hull oil tankers. What they found was that most of these companies are not replacing their tankers at all. Likewise, U.S. refineries are working close to capacity, yet no new refineries have been constructed since 1976. The industry “spin” is that the legal/regulatory environment is in the way. No new refineries are being built because (at a cost of around $150 million, with a 2-3 year lag time) the oil companies know that there won’t be enough future oil production to repay for the capital cost of building the new refineries. Same for the oil tankers.

What this leaves us with is a “sneak preview” of the coming attraction, “Peak Oil: The Day the Earth Stood Still”. Supply bottlenecks, refining capacity shortfall, and no new projects coming on line to help alleviate falling reserve capacity will surely push oil to a more expensive level. And isn’t that what peak oil is all about? The end of cheap oil?

With world oil demand increasing in correlation to population growth and the emerging global players of China and India, having an energy supply/infrastructure shortfall predicated upon an anticipation of peak oil seems a bit ironic. The geological peaking of oil production may, or may not, be already with us. But the pitfalls of not preparing for it may soon be.

Thursday, March 10, 2005

Sharecropper America

Using an analogy from the 1930s, the “Oracle of Omaha,” Warren Buffett said the US could be heading towards a ''sharecropper's society'', meaning that a great many Americans could have to pay a large proportion of their future incomes to absent, and in this case foreign, landlords. Sharecropping by definition is the working of a piece of land by a tenant in exchange for a portion, usually half, of the crops or the revenue that they bring in for the landowner. In return for the work on the land, the landowners supply the tenants and their families with living accommodations, seeds and fertilizer, tools, and food that can be bought in a commissary, charging fairly high interest rates to the tenants. These rates create an environment of debt and poverty that the sharecroppers have trouble escaping from.

America needs to do one of two things, or prepare for a third.

1) They must curb their consumption and start saving a part of their disposable income. Fat chance. .2% is what the savings rate was in 1933 in the depths of the Great Depression. That’s what it is now.

2) They must increase exports over imports to narrow the trade deficit. Since imports exceed exports by 52% and growing, that ain’t gonna happen. We have nothing to export except debt and Disneyland.

So, we are left with ever higher interest rates which will result in a massive transfer of wealth from the poor and middle class to the rich, as people default on the variable-rate mortgages they couldn’t afford, and shouldn't have qualified for, in the first place.

With the new bankruptcy legislation almost ready for the printer, Chapter 7’s will be harder to come by and the Chapter 13 recourse will put you on a repayment plan to the “bossman”of up to five years. In a Chapter 7 bankruptcy, your assets are liquidated and given to creditors, and many of your remaining debts are cancelled, giving you what's known as a "fresh start." Since many Chapter 7 filers don't have assets that qualify for liquidation, credit card companies and other creditors sometimes get nothing. If the bill passes into law, fewer people will be allowed to file under Chapter 7; more will be forced to file under Chapter 13.

As the real estate bubble reaches a crescendo, people looking to bail out of their over-leveraged situations will find a “fresh start” ever more elusive. Perhaps the most fundamental question one can ask about the bubble is how it could have happened in the first place. How could real estate prices be pushed up to such irrational and unsustainable levels? Few people would deny that fools and gamblers participate in the real estate market. But the participation of such irrational buyers does not necessarily imply that real estate prices themselves should be irrational.

I think the answer lies in the sense that people see this as “wealth creation” and not rampant inflation, the result of “easy credit” by the Fed. Most Americans know precious little about managing money, so when they are deceived into thinking they are artificially more wealthy than they actually are by way of deception disguised as “monetary policy,” they overspend and borrow and get themselves in too much debt.

Ah, but what the heck, real estate always goes up, right?

Tuesday, March 08, 2005

Juncture Recognition

To me, it seems quite obvious that we have reached an important juncture in the course of human history, whether it be the coming economic crisis or the energy production crunch. Yet, all around me I see nothing but people with their heads in the sand, seemingly completely oblivious to the signs of the times. Without an extraordinary event, our civilization is headed down the well-trodden path of decline. The same path trod by the Roman and the British empires along with the same arrogance and hubris, assertions of global hegemony, and imperial overstretch. By the end of the Roman Empire, citizens were loathe to join the legions and defend their country—the wars were fought with slaves. With a US desertion approaching 7,000 soldiers, and a recruitment shortfall of 27%, we are definitely at overstretch, with a whole of loathing going on. Yet, GW says invading Iran is “still on the table.”

Private savings in the United States make up a meager 0.2% of disposable income. In the EU, citizens lay by more than 10% of their income. The low level of private savings in the United States is most easily accounted for by the escalating prices in real estate. They look upon their equity increases as a substitute for savings. So, when they need a little “cash” to meet obligations—as real income is not rising—they go to the refi-ATM for that cash. One out of every three home purchases are by speculators to flip (sometimes even before they are built) or as a second or vacation home. How can people delude themselves twice in just five years? Did they learn nothing from the tech-stock fiasco? Where are the fundamentals? Oh yeah, I forgot, it‘s different his time.

Some might argue that while foreigners are happy to finance the US deficit by recycling their corresponding surpluses into dollar assets that somehow the situation is sustainable. But that argument ignores the huge transfer of wealth outside of the US that accompanies persistent large trade deficits. Remember, we have no way of redeeming that debt if it ever comes home to roost—no gold standard since 1971. Unlike stocks and housing, the dollar has no bottom, only inflation. Warren Buffet, Bill Gates, and George Soros are all shorting the dollar. Guess they don’t know what they are doing, huh?

Our industrial complex has caused us to become so specialized, that when you strip away what most people know about TV, sports, entertainment, and technology, you are left with a medieval understanding of the world. We have been reduced to lemmings. That just won’t cut it in the post-peak oil world.

Wednesday, March 02, 2005

The Supreme Court can Eat My Shorts

"By a 5-4 vote, the high court declared unconstitutional the juvenile death penalty, a decision that could affect about 70 death row inmates."

In Texas alone, almost 30 juvenile murders will be affected by this decision.

The court argued:

"Justice Anthony Kennedy (news - web sites), writing for the majority, said many juveniles lack maturity and intellectual development to understand the ramifications of their actions. "

Saying in effect that they don't know what they are doing.

Now I'm 40 years old myself, but I can still recall my own youth, and the experience of being a 17 year old young man. Granted I was a hormone pumping ignorant proto-adult, but I fully grasped the concept of killing by that time.

Perhaps some individuals are not capable of comprehending the consequences of their actions, which is argued in many murder cases regardless of age, but a blanket which is thrown over an age range bordering on adult ranges is absurd.

I argue that it is highly individual, and can only be discovered in the context of the circumstance in question.

The death penalty has opponents & supporters as always. But the liberal US Supreme Court has seen fit to further diminish the death penalty for capital crimes.

If a majority of Americans voted to eliminate the death penalty completely, I would support that majority consensus as an American, while still advocating it. But if we collectively continue support for a death penalty as a nation, no one who intentionally kills another, and understands what they were doing at the time, should escape our maximum penalty.

Regardless of age.