Stuck at Home in Suburbia
I have a friend, currently living in a great house Central City, Wellington. You can walk anywhere in town and the Midnight Expresso is just a stones throw away. My friend is going through a combo-crisis. She is approaching 40. And she is about to move to suburbia.
This frightening tension says a lot about the mid-life mystery. When multiple bathrooms, double garages, lawns that need to be mowed and room to park the Stabicraft replaces the urban alco-club induced hedonism of our 30s. Symbolically she is faced with letting go of her youth in two short punches.
People don't choose suburbia, it chooses them.
Not only has the hyper-suburbanisation of the cattle-class over the last 20 years essentially propped up the New Zealand economy but you can accurately measure the suburban fiasco by the number of other happy motorists interfering with your commuting pleasure. Suburban life isn't much fun in Auckland if you work in the city.
Our entire fucking economy is based on continued creation and maintenance of suburban sprawl and all the insidious bullshit (recreational shopping at the local Warehouse) that it entails - we're at the end of the civilisation cul-de-sac. The far flung exburbian outreaches of society will be the first to implode in the severe vacuum that will accompany disruptions to the oil markets that they depend upon thereby seriously impeding the 80k a day commute. All the morbidly obese brain-dead infotainment zombies and desparate soccer mum housewives who live in their three bathroom "internal access" McHouses will find themselves cut off from work and midweek tennis dates.
The suburbs are the slums of the future. Some won't have to wait that long. The story goes something like this. Gross devaluation accompanied by wholesale denial - what Kunstler terms the pyschology of previous investment will be dictate behaviour. Default, foreclosure, repossession, bankruptcy. And for some, attempts to fly out of office block windows as the reality dawns.
Cheap oil subsidised our way into sprawl, but cheap oil is gone. My advice to those not currently comatose, make plans to get out now. By the time you're spending a third of your weekly wages filling the Ford Explorer it will be too late.
Postscript
For my friend worried about the suburban choice - the intuition is right. However, suburbia has a knack of quickly dulling the senses.
...but don't take my word for it
Wednesday, May 24, 2006
Tuesday, May 23, 2006
5 Minute throw away thought.
For the wankers fascinated with non-sequiturs
Stu mentioned -
LibertyScott raises valid points though. What's our problem with people
living wherever they want and how they want. If these guys had their way,
the roads to those suburbs would be privately funded, through private
land. The people who lived there and built the roads would be the only
ones who fell over when the oil price goes through the roof.
To which I replied,
I don't think it's a valid point at all. Who decides that I can't build myself a bach with a view across Mt Aspiring. And whats the difference between the "good" that is a national park and the "good" that is productive farmland. Which is better?
Someone has to make decisions about where we live and what use land is put to. Most libertarian arguments quickly descend into absurdity with little more than a cursory look. Libertarians very rarely understand that their arguments wholly depend on the same normative bullshit that (for eg.) socialist arguments are based on. The decision about who says what goes and what doesn't. By arguing there is no place for me to make such judgements they are infact contradicting themselves.
There is no more foundational basis for the argument that I ought not make a value judgement about some behaviour or desire than I do.
Nothing pisses me off more than the facile truisms of libertarians.
For the wankers fascinated with non-sequiturs
Stu mentioned -
LibertyScott raises valid points though. What's our problem with people
living wherever they want and how they want. If these guys had their way,
the roads to those suburbs would be privately funded, through private
land. The people who lived there and built the roads would be the only
ones who fell over when the oil price goes through the roof.
To which I replied,
I don't think it's a valid point at all. Who decides that I can't build myself a bach with a view across Mt Aspiring. And whats the difference between the "good" that is a national park and the "good" that is productive farmland. Which is better?
Someone has to make decisions about where we live and what use land is put to. Most libertarian arguments quickly descend into absurdity with little more than a cursory look. Libertarians very rarely understand that their arguments wholly depend on the same normative bullshit that (for eg.) socialist arguments are based on. The decision about who says what goes and what doesn't. By arguing there is no place for me to make such judgements they are infact contradicting themselves.
There is no more foundational basis for the argument that I ought not make a value judgement about some behaviour or desire than I do.
Nothing pisses me off more than the facile truisms of libertarians.
Thursday, May 04, 2006
Stress Relief as Southern Lakes Fill
Warm Showers Forecast for Winter
I guess we have to be relieved that inflows into Tekapo and Pukaki have significantly "bumped" in the last couple of weeks. The inflows are approaching average again which means we can probably breathe easy this winter. Unlikely we'll be having cold showers, this year at least.
Warm Showers Forecast for Winter
I guess we have to be relieved that inflows into Tekapo and Pukaki have significantly "bumped" in the last couple of weeks. The inflows are approaching average again which means we can probably breathe easy this winter. Unlikely we'll be having cold showers, this year at least.
Oil Price Out of Control As World Pumps at Capacity
This was published on Scoop last week, I forgot to also publish here - here it is.
Powerless NZ
27 April 2006
As consumers around the world baulk at US$75 oil (per barrel) suspicion sets in that the oil companies are price gouging even when a few seconds rational thought informs us that oil is traded transparently on the open market to the highest bidder. Hilariously leading this crusade is President Bush himself. “Bush has ordered the US Federal Trade Commission to investigate whether the price of gasoline has been unfairly manipulated in any way since the hurricanes struck last year.” (Washington, April 25, 2006, AFP).
Interestingly in 1971 around the time US oil production peaked, the oil production regulatory agency announced that it would allow US oil companies to produce at 100% capacity. Prior to that oil production had been strictly regulated to prevent the price falling too low. After that event in 1971 the concept of marginal price for crude became irrelevant, oil became a tradeable commodity in the US on the open market, sold to the highest bidder. Shortly after this event oil production in the US peaked. Today the US produces less than 50% of the oil it consumes.
A similar event occurred in 2004 when in an attempt to quell volatile oil markets OPEC announced it would pump at capacity. At that point a marginal price for oil was no longer under OPECs control. Any first year student of economics could inform President Bush that the long run marginal cost means any additional costs or cost savings per barrel of additional or reduced production. Once the margin is gone and you are unable to increase production the marginal cost as a pricing mechanism or indicator of the same becomes irrelevant — it is simply sold to the highest bidder. The fact that the marginal cost of (Saudi) oil production is estimated to be between US$1.50 — US$3.00 per barrel must make consumers squirm (Littlejohn, 2004., Kudlow, 2001) but this is how the market works. If you don’t like the price you always have the option to purchase an alternative product, or simply not purchase at all.
OPEC has continually argued since late 2004 that they are pumping at capacity and are therefore unable to drive the price down. According to BP’s Statistical Review of World Energy, OECD oil is currently in decline to the tune of -1.9% per year. Since it seems the world is producing oil at maximum capacity or very close the concept of a marginal cost of crude is no longer relevant and because there are no swing producers, that is, no producer has the ability to control the price by flooding the market with cheap oil. Oil production is no longer at a margin of the total produced — result, the price cannot be controlled by the producer. Thus the market is sending a very clear signal that production is at a peak. Once over the peak we are on a declining trajectory forever, things are not going to get better.
OPEC’s official price range in 2005 was $22-$28, obviously with a marginal cost around 3 dollars a nice profit would have still been made. However the current price of oil is determined by free trade on futures markets with buyer knowledge that there is no excess capacity, and no one wants to miss out. The price is at the mercy of the market, surrendered to the whims of speculating traders and hedge fund managers who are increasingly fidgety due to an increasingly imaginative array of externalities such as production shutdowns in Nigeria, Iran, Iraqi civil war and Hurricanes or indeed any other perceived risk. It’s a bit like selling roses where everyday is Valentines Day.
There is currently enough oil to meet consumer demand, that will however change over the coming year or two as demand continues to grow and existing supply slowly but surely depletes. The price will remain highly volatile so long as the valves remain open at capacity. Economics relating to marginal concepts or a “fair price for oil” are no longer relevant because we are not producing a “margin” of the total producible; we are producing at the maximum, familiar market rules are out the window.
Steve McKinlay
Powerless NZ
27 April 2006
This was published on Scoop last week, I forgot to also publish here - here it is.
Powerless NZ
27 April 2006
As consumers around the world baulk at US$75 oil (per barrel) suspicion sets in that the oil companies are price gouging even when a few seconds rational thought informs us that oil is traded transparently on the open market to the highest bidder. Hilariously leading this crusade is President Bush himself. “Bush has ordered the US Federal Trade Commission to investigate whether the price of gasoline has been unfairly manipulated in any way since the hurricanes struck last year.” (Washington, April 25, 2006, AFP).
Interestingly in 1971 around the time US oil production peaked, the oil production regulatory agency announced that it would allow US oil companies to produce at 100% capacity. Prior to that oil production had been strictly regulated to prevent the price falling too low. After that event in 1971 the concept of marginal price for crude became irrelevant, oil became a tradeable commodity in the US on the open market, sold to the highest bidder. Shortly after this event oil production in the US peaked. Today the US produces less than 50% of the oil it consumes.
A similar event occurred in 2004 when in an attempt to quell volatile oil markets OPEC announced it would pump at capacity. At that point a marginal price for oil was no longer under OPECs control. Any first year student of economics could inform President Bush that the long run marginal cost means any additional costs or cost savings per barrel of additional or reduced production. Once the margin is gone and you are unable to increase production the marginal cost as a pricing mechanism or indicator of the same becomes irrelevant — it is simply sold to the highest bidder. The fact that the marginal cost of (Saudi) oil production is estimated to be between US$1.50 — US$3.00 per barrel must make consumers squirm (Littlejohn, 2004., Kudlow, 2001) but this is how the market works. If you don’t like the price you always have the option to purchase an alternative product, or simply not purchase at all.
OPEC has continually argued since late 2004 that they are pumping at capacity and are therefore unable to drive the price down. According to BP’s Statistical Review of World Energy, OECD oil is currently in decline to the tune of -1.9% per year. Since it seems the world is producing oil at maximum capacity or very close the concept of a marginal cost of crude is no longer relevant and because there are no swing producers, that is, no producer has the ability to control the price by flooding the market with cheap oil. Oil production is no longer at a margin of the total produced — result, the price cannot be controlled by the producer. Thus the market is sending a very clear signal that production is at a peak. Once over the peak we are on a declining trajectory forever, things are not going to get better.
OPEC’s official price range in 2005 was $22-$28, obviously with a marginal cost around 3 dollars a nice profit would have still been made. However the current price of oil is determined by free trade on futures markets with buyer knowledge that there is no excess capacity, and no one wants to miss out. The price is at the mercy of the market, surrendered to the whims of speculating traders and hedge fund managers who are increasingly fidgety due to an increasingly imaginative array of externalities such as production shutdowns in Nigeria, Iran, Iraqi civil war and Hurricanes or indeed any other perceived risk. It’s a bit like selling roses where everyday is Valentines Day.
There is currently enough oil to meet consumer demand, that will however change over the coming year or two as demand continues to grow and existing supply slowly but surely depletes. The price will remain highly volatile so long as the valves remain open at capacity. Economics relating to marginal concepts or a “fair price for oil” are no longer relevant because we are not producing a “margin” of the total producible; we are producing at the maximum, familiar market rules are out the window.
Steve McKinlay
Powerless NZ
27 April 2006
Monday, April 24, 2006
NZ Prime Minister out of the closet on Peak Oil
PowerLess NZ Press Release
21 April 2006
As the price of oil hangs at record heights, unmoving, like a pall threatening to choke economies and festering the sore that is inflation (October delivery contracts on the NYMEX are over US$75 a barrel), the cattle-class as well as the impotent media transfixed by daily trivialities and titillations by and large continue to remain clueless as to why we are paying almost $1.80 a litre at the pump.
Economists and “analysts” roll out the usual suspects whenever the price moves skyward, security worries in Nigeria, “weapons of mass destruction” in Iran, or was that Iraq, hurricanes in the gulf. The point today is any minor supply concern that results in a few thousand-barrel production cutback translates into a several dollar bull-run on oil on the mercantile exchange which is never clawed back. To say that “the end of cheap oil” is here is to merely state the bleeding obvious.
Matt Simmons energy investment banker and Peak Oil advocate argued that 2006 would be the year Peak Oil would be absorbed into the public consciousness as much as climate change and it seems he may be right. This week Helen Clark, New Zealand’s Prime Minister joined a rapidly growing but exclusive club, the penny has obviously dropped – she openly admitted the real reasons behind high oil prices, “because we're probably not too far short of peak production, if we're not already there” [1].
This watershed statement, which incidentally went over the heads of most of the media turkeys in attendance, has enormous economic and social implications. Firstly it absolves Trevor Mallard (acting Minister of Energy) from having to regurgitate International Energy Agency nonsense that Peak Oil is at least 30 years away. “Not too far short of peak production, if not already there” surely can’t mean the same thing as 30 years away. The minister can now base policy in geological reality rather than the flawed economic “business as usual” fantasy that has cheap abundant oil production growing alongside the economy for all eternity.
But will he? Will she?
I can already hear the screams of the damned led by Peter Dunne, all the way down every double-laned highway in the country. By this very admission the Prime Minister puts the Government in a very sticky situation. If indeed we are already at peak oil multi-billion dollar roading projects are about as sensible as New Zealand developing it’s own uranium enrichment program. But New Zealand is obsessed with the “growth” dilemma. Economic growth necessarily depends on a cheap energy subsidy, to grow economically one needs to increase energy consumption. As the price of oil continues to creep upwards the spectre of oil-shock induced stagflation looms. The economy is already stagnant. Interest rates are relatively high and inflation is expected to run at over 3% this year. Expect the ride to become somewhat bumpy over the next couple of years.
In light of Prime Minister Helen Clarks peak oil admission the concept of growth must be re-evaluated. Economic growth and oil production exhibit a linear relationship. As we enter the era of oil decline, Jim Kunstler argues the only growth we are likely to see is “growth in our exertions to stay where we are, and the truth is many of the weak will simply fall behind” [2].
If Helen Clark truly comprehends peak oil then momentous changes in public policy must follow, not to mitigate risk in light of such information incurs liability and, is arguably negligent.
The Clark led Government must start immediately with the recognition that we have adopted (and continue to develop at breakneck speeds) a suburban living arrangement for which the outlook is truly bleak. The public can no longer get what the public wants, the required message will not be popular.
Continuing to pump billions into roading projects, ultimately dependant upon the continued stream of cheap Middle Eastern oil after the Prime Ministers admission is moronic. With less oil being produced every year and as the price of petrol moves beyond Himalayan like territory, Transmission Gully (just picking one example), begins to look like a very expensive white elephant – a monument to the exuberant industrial age, as Kunstler would say, when there was always more of everything.
[1](2006) PM Talks Palestinian Aid, Health 'N' (Peak) Oil, Tuesday, 18 April 2006, 5:53 pm , Article: Scoop Audio., http://www.scoop.co.nz/stories/HL0604/S00206.htm
[2] Kunstler, J. (2006) April 3, Clusterfuck Nation Chronicles: Commentary on the Flux of Events., http://www.kunstler.com/
Steve McKinlay for
PowerLess NZ
PowerLess NZ is a growing group of scientists, energy analysts and concerned citizens whose principle objectives are to alert both Government and the general public to New Zealand’s looming energy crisis. Our aim is to support development of renewable energy resources at both a private and public level, as well as encourage a firm move away from dependence upon fossil fuels.
Steve’s blog is located at http://ontic.blogspot.com/
More information about global peak oil and resource depletion can be found at www.oilcrash.com
PowerLess NZ Press Release
21 April 2006
As the price of oil hangs at record heights, unmoving, like a pall threatening to choke economies and festering the sore that is inflation (October delivery contracts on the NYMEX are over US$75 a barrel), the cattle-class as well as the impotent media transfixed by daily trivialities and titillations by and large continue to remain clueless as to why we are paying almost $1.80 a litre at the pump.
Economists and “analysts” roll out the usual suspects whenever the price moves skyward, security worries in Nigeria, “weapons of mass destruction” in Iran, or was that Iraq, hurricanes in the gulf. The point today is any minor supply concern that results in a few thousand-barrel production cutback translates into a several dollar bull-run on oil on the mercantile exchange which is never clawed back. To say that “the end of cheap oil” is here is to merely state the bleeding obvious.
Matt Simmons energy investment banker and Peak Oil advocate argued that 2006 would be the year Peak Oil would be absorbed into the public consciousness as much as climate change and it seems he may be right. This week Helen Clark, New Zealand’s Prime Minister joined a rapidly growing but exclusive club, the penny has obviously dropped – she openly admitted the real reasons behind high oil prices, “because we're probably not too far short of peak production, if we're not already there” [1].
This watershed statement, which incidentally went over the heads of most of the media turkeys in attendance, has enormous economic and social implications. Firstly it absolves Trevor Mallard (acting Minister of Energy) from having to regurgitate International Energy Agency nonsense that Peak Oil is at least 30 years away. “Not too far short of peak production, if not already there” surely can’t mean the same thing as 30 years away. The minister can now base policy in geological reality rather than the flawed economic “business as usual” fantasy that has cheap abundant oil production growing alongside the economy for all eternity.
But will he? Will she?
I can already hear the screams of the damned led by Peter Dunne, all the way down every double-laned highway in the country. By this very admission the Prime Minister puts the Government in a very sticky situation. If indeed we are already at peak oil multi-billion dollar roading projects are about as sensible as New Zealand developing it’s own uranium enrichment program. But New Zealand is obsessed with the “growth” dilemma. Economic growth necessarily depends on a cheap energy subsidy, to grow economically one needs to increase energy consumption. As the price of oil continues to creep upwards the spectre of oil-shock induced stagflation looms. The economy is already stagnant. Interest rates are relatively high and inflation is expected to run at over 3% this year. Expect the ride to become somewhat bumpy over the next couple of years.
In light of Prime Minister Helen Clarks peak oil admission the concept of growth must be re-evaluated. Economic growth and oil production exhibit a linear relationship. As we enter the era of oil decline, Jim Kunstler argues the only growth we are likely to see is “growth in our exertions to stay where we are, and the truth is many of the weak will simply fall behind” [2].
If Helen Clark truly comprehends peak oil then momentous changes in public policy must follow, not to mitigate risk in light of such information incurs liability and, is arguably negligent.
The Clark led Government must start immediately with the recognition that we have adopted (and continue to develop at breakneck speeds) a suburban living arrangement for which the outlook is truly bleak. The public can no longer get what the public wants, the required message will not be popular.
Continuing to pump billions into roading projects, ultimately dependant upon the continued stream of cheap Middle Eastern oil after the Prime Ministers admission is moronic. With less oil being produced every year and as the price of petrol moves beyond Himalayan like territory, Transmission Gully (just picking one example), begins to look like a very expensive white elephant – a monument to the exuberant industrial age, as Kunstler would say, when there was always more of everything.
[1](2006) PM Talks Palestinian Aid, Health 'N' (Peak) Oil, Tuesday, 18 April 2006, 5:53 pm , Article: Scoop Audio., http://www.scoop.co.nz/stories/HL0604/S00206.htm
[2] Kunstler, J. (2006) April 3, Clusterfuck Nation Chronicles: Commentary on the Flux of Events., http://www.kunstler.com/
Steve McKinlay for
PowerLess NZ
PowerLess NZ is a growing group of scientists, energy analysts and concerned citizens whose principle objectives are to alert both Government and the general public to New Zealand’s looming energy crisis. Our aim is to support development of renewable energy resources at both a private and public level, as well as encourage a firm move away from dependence upon fossil fuels.
Steve’s blog is located at http://ontic.blogspot.com/
More information about global peak oil and resource depletion can be found at www.oilcrash.com
Tuesday, April 18, 2006
Oil Settles Over US$71.
Interestingly the media largely ignored the movement from around $62 a few weeks ago to the current 70 odd dollars a barrel. However the last 48 hours have seen all the usual excuses being rolled out, Nigerian concerns, Increasing descent into civil war in Iraq, Iranian Weapons of Mass Destruction etc.
So the average clueless punter queuing up at the pump is paying all time NZ record amount for petrol - almost $1.70 a litre.
Meanwhile the heavy machinery continues to roll around the Terrace Tunnel Wellington with the "bypass" well underway. It's hard not to question the sense in building all this shit. Millions of dollars building concrete ramps all for the holy grail, chopping 3 minutes off your commute time across town, by the time they are finished only the rich will be able to afford to drive on them. And I'm yet to see a single bio-fuel pump station pop into existence as the market promised. I guess there will be a run on used chip oil from the local greasy shop.
On another note, weeks ago I wrote to Trevor Mallard (acting Minister of Energy) with two points. 1. I pointed out the flaws in the MED Oil Pricing Assumptions and Modelling, I wrote a PowerLess NZ press release on this (follow the link). 2. I asked if the minister could assure me that appropriate transparent risk mitigation analysis be done before a billion tax payer dollars was spent on more roading (A billion dollars is the expected cost of the Transmission Gully road).
So far I recieved nothing although I was promised a reply. This from Bruce Donaldson, Trevor Mallards secretary.
Thanks Steve,
I can advise that a response is being prepared for the Acting Minister of Transport and will be copied to the Acting Minister of Energy for his information. The Acting Minister of Energy has noted your email Steve and is seperately enquiring of his MED officals the robustness of their and the IEAs modelling for his own information in light of your concerns.
Yours sincerely
Bruce Donaldson
Private Secretary to the Acting Minister of Energy, Hon Trevor Mallard
I wait with baited breath.
Cheers
Steve McKinlay
Interestingly the media largely ignored the movement from around $62 a few weeks ago to the current 70 odd dollars a barrel. However the last 48 hours have seen all the usual excuses being rolled out, Nigerian concerns, Increasing descent into civil war in Iraq, Iranian Weapons of Mass Destruction etc.
So the average clueless punter queuing up at the pump is paying all time NZ record amount for petrol - almost $1.70 a litre.
Meanwhile the heavy machinery continues to roll around the Terrace Tunnel Wellington with the "bypass" well underway. It's hard not to question the sense in building all this shit. Millions of dollars building concrete ramps all for the holy grail, chopping 3 minutes off your commute time across town, by the time they are finished only the rich will be able to afford to drive on them. And I'm yet to see a single bio-fuel pump station pop into existence as the market promised. I guess there will be a run on used chip oil from the local greasy shop.
On another note, weeks ago I wrote to Trevor Mallard (acting Minister of Energy) with two points. 1. I pointed out the flaws in the MED Oil Pricing Assumptions and Modelling, I wrote a PowerLess NZ press release on this (follow the link). 2. I asked if the minister could assure me that appropriate transparent risk mitigation analysis be done before a billion tax payer dollars was spent on more roading (A billion dollars is the expected cost of the Transmission Gully road).
So far I recieved nothing although I was promised a reply. This from Bruce Donaldson, Trevor Mallards secretary.
Thanks Steve,
I can advise that a response is being prepared for the Acting Minister of Transport and will be copied to the Acting Minister of Energy for his information. The Acting Minister of Energy has noted your email Steve and is seperately enquiring of his MED officals the robustness of their and the IEAs modelling for his own information in light of your concerns.
Yours sincerely
Bruce Donaldson
Private Secretary to the Acting Minister of Energy, Hon Trevor Mallard
I wait with baited breath.
Cheers
Steve McKinlay
Monday, March 20, 2006
NZ Ministry of Economic Development - US$40 Oil Soon.
Level 3 NCEA "Oil Forecasting"
This stuff always makes me laugh because economic arguments essentially display the classic characteristics of the Post-Hoc fallacy. "oil price plummets on increased stocks", followed closely by, "oil up after Bahgdad violence", and then today hilariously, "Oil trades near one-week low on speculation US supplies rose". Laugh if you like, yet this is how the MED's pseudo-scientifically titled "energy analysts" do their projections.
I can imagine headlines, "Oil price plummets after Federer wins Open", "Oil price reaches 6 week high after Mahmoud Abbas farts", "Oil price plummets after Sharon Stone wins Oscar". Ok, so I'm having some fun. However, such causal factors are quite possibly just as reliable as arguing because the NYMEX futures price for oil delivery 2011 is US$44.50, it shall be so. Or, as MED argues, this is the best way to figure out what oil will costs in 2011.
And there instantaneously is your justification for spending billions on Transmission Gully, by the end of the decade oil will be 40 bucks a barrel, how do you know? The futures market says so - excuse me but these fuckers are clueless.
The response to my email to the MED regarding where the get their figures from follows.
Forget any scientific basis for the models or the assumptions, forget any actual analysis. The only qualifications you'd need to be an energy analyst for this Government is the ability to use Microsoft Explorer.
My reply to Ralph Samuelson,
Ok, so I would be correct in assuming that the modelling is purely economically (ie. post-hoc) based.
I can't make the workshop although I did see it advertised, have classes to teach unfortunately. I think there is the "oil market" and then their are studies, figures and concerns of a more scientific nature which could validly inform modelling processes, perhaps that's outside your brief? At a minimum such scientific opinion could provide mitigating factors in your projections. I think the ASPO data and models are a good place to look first. It surprises me that (given we are supposed to living the "knowledge economy") that the MED use the futures markets to project the oil price, but fail to consider an international scientific bodys modelling and data.
That is, whatever the "market" says unless significant oil is discovered to offset current depletion rates the market might be in for a surprise. Ralph my argument is that the "market" assumes that oil is an infinite resource and it's just a case of getting it out of the ground. The EIA figures suggest this, when every single respected body on the planet are suggesting that by 2030 there will be significant structural supply issues in the oil market, yet the EIA (in AEO2006) have oil at (hopefully) US$33 bl. This is laughable. Are you able to do some modelling based on current depletion rates on all the majors against discoveries?
North Sea decline percentages are much higher than anticipated (7-8%) putting the UK on an increasing net import trajectory. News last month that Mexicos Canterell, third largest field I think is in decline, news in January that Kuwait's Burgen feild (second largest to Ghawar) is in decline. Rumour that the same thing is in store of Saudi's Ghawar very soon, I guess time will tell.
Both parties (the economists and the scientists) can't be correct in the long run (but I know who I'd rely on for reliable information). That is the economic arguments have oil returning to "normal" prices after 2010. How could that possibly be the case unless more oil the size of Saudi or Mexico is discovered based on current demand growth and offset against ever increasing depletion revelations (last year was the worse year for discovery since the second world war, in fact the price paid for exploration exceeded the value of the discoveries).
I would argue that to simply run with the economic arguments ignoring the scientific could be doing the country, the Government a big dis-service. Not sure what you think about this. As I say it's probably outside your brief to look beyond market indicators.
But Ralph, you have a very responsible job. You argue that oil will return to some reasonable figure by the end of the decade and the Government will pump billions into roads based on the data you guys provide. You present data however that oil won't return to 30 bucks a barrel, that it is on an upward trajectory, well over $100 a barrel by the end of the decade and investment in a more sustainable infrastructure might ensue.
Just on the EIA data again, the current AEO2006 high price scenario, that is the worst possble scenario $ value for oil projects the cost of oil at less than the current price. In fact the average of all the current figures is $31.91 (I quickly worked it out) - that's a discrepancy of 100%. They are all out by 30 odd dollars. They have been wrong for about 3 years now, how long do they all have to be wrong before you all start looking at the modelling? If you look to the last published (on the MED website) NZ Energy Outlook by your projections we all should be enjoying US$23 (from memory) a barrel oil right now.
How can all you guys be so consistently wrong? Have you considered that you're not taking into account what the scientific community is saying that we are on a irreversible upward trajectory ?
Steve McKinlay
Level 3 NCEA "Oil Forecasting"
"Both theory and empirical evidence suggests that oil futures markets are probably the best source of future oil price projections."
Oil Price Assumptions and Scenarios (Samuelson, 2005)
This report goes on to argue that after 2010 oil will drop back to around US$40 per barrel. I doubt Mr Samuelson would ever dare walk under a ladder or cross a black cat.
"Why are you whistling?", "Why to keep the elephants away of course." "But there aren't any elephants." "Ah you see it must be working".
For anyone aquainted with the topic of peak oil the above article makes interesting, if not comical reading. So, I recently asked Ralph Samuelson Senior Energy Analyst at the MED if he had any further information about their oil price projection modelling. What I wanted to know was how they go about coming up with the so far out of whack figures that are supposed to represent where the oil price should be.
This stuff always makes me laugh because economic arguments essentially display the classic characteristics of the Post-Hoc fallacy. "oil price plummets on increased stocks", followed closely by, "oil up after Bahgdad violence", and then today hilariously, "Oil trades near one-week low on speculation US supplies rose". Laugh if you like, yet this is how the MED's pseudo-scientifically titled "energy analysts" do their projections.
I can imagine headlines, "Oil price plummets after Federer wins Open", "Oil price reaches 6 week high after Mahmoud Abbas farts", "Oil price plummets after Sharon Stone wins Oscar". Ok, so I'm having some fun. However, such causal factors are quite possibly just as reliable as arguing because the NYMEX futures price for oil delivery 2011 is US$44.50, it shall be so. Or, as MED argues, this is the best way to figure out what oil will costs in 2011.
And there instantaneously is your justification for spending billions on Transmission Gully, by the end of the decade oil will be 40 bucks a barrel, how do you know? The futures market says so - excuse me but these fuckers are clueless.
The response to my email to the MED regarding where the get their figures from follows.
Hi Steve,
The assumptions shown in that document are still the ones we plan to use in Energy Outlook. Although the oil market is changing constantly, we believe the assumptions are still consistent
with the latest developments.For a recent comparison of what other modellers
are saying, see http://www.eia.doe.gov/oiaf/aeo/pdf/forecast.pdf, Table 20 (their p. 108).
For the latest futures market prices, see www.nymex.com and click on the “crude oil” link.
I hope to see you at this afternoon’s workshop: http://www.med.govt.nz/templates/StandardSummary____15339.aspx.
Cheers, Ralph
Forget any scientific basis for the models or the assumptions, forget any actual analysis. The only qualifications you'd need to be an energy analyst for this Government is the ability to use Microsoft Explorer.
My reply to Ralph Samuelson,
Ok, so I would be correct in assuming that the modelling is purely economically (ie. post-hoc) based.
I can't make the workshop although I did see it advertised, have classes to teach unfortunately. I think there is the "oil market" and then their are studies, figures and concerns of a more scientific nature which could validly inform modelling processes, perhaps that's outside your brief? At a minimum such scientific opinion could provide mitigating factors in your projections. I think the ASPO data and models are a good place to look first. It surprises me that (given we are supposed to living the "knowledge economy") that the MED use the futures markets to project the oil price, but fail to consider an international scientific bodys modelling and data.
That is, whatever the "market" says unless significant oil is discovered to offset current depletion rates the market might be in for a surprise. Ralph my argument is that the "market" assumes that oil is an infinite resource and it's just a case of getting it out of the ground. The EIA figures suggest this, when every single respected body on the planet are suggesting that by 2030 there will be significant structural supply issues in the oil market, yet the EIA (in AEO2006) have oil at (hopefully) US$33 bl. This is laughable. Are you able to do some modelling based on current depletion rates on all the majors against discoveries?
North Sea decline percentages are much higher than anticipated (7-8%) putting the UK on an increasing net import trajectory. News last month that Mexicos Canterell, third largest field I think is in decline, news in January that Kuwait's Burgen feild (second largest to Ghawar) is in decline. Rumour that the same thing is in store of Saudi's Ghawar very soon, I guess time will tell.
Both parties (the economists and the scientists) can't be correct in the long run (but I know who I'd rely on for reliable information). That is the economic arguments have oil returning to "normal" prices after 2010. How could that possibly be the case unless more oil the size of Saudi or Mexico is discovered based on current demand growth and offset against ever increasing depletion revelations (last year was the worse year for discovery since the second world war, in fact the price paid for exploration exceeded the value of the discoveries).
I would argue that to simply run with the economic arguments ignoring the scientific could be doing the country, the Government a big dis-service. Not sure what you think about this. As I say it's probably outside your brief to look beyond market indicators.
But Ralph, you have a very responsible job. You argue that oil will return to some reasonable figure by the end of the decade and the Government will pump billions into roads based on the data you guys provide. You present data however that oil won't return to 30 bucks a barrel, that it is on an upward trajectory, well over $100 a barrel by the end of the decade and investment in a more sustainable infrastructure might ensue.
Just on the EIA data again, the current AEO2006 high price scenario, that is the worst possble scenario $ value for oil projects the cost of oil at less than the current price. In fact the average of all the current figures is $31.91 (I quickly worked it out) - that's a discrepancy of 100%. They are all out by 30 odd dollars. They have been wrong for about 3 years now, how long do they all have to be wrong before you all start looking at the modelling? If you look to the last published (on the MED website) NZ Energy Outlook by your projections we all should be enjoying US$23 (from memory) a barrel oil right now.
How can all you guys be so consistently wrong? Have you considered that you're not taking into account what the scientific community is saying that we are on a irreversible upward trajectory ?
Steve McKinlay
Thursday, March 09, 2006
Roy Hemmingway Performs Korbut Flip
With a double salto ending in the lunge position.
Perhaps I'll leave it to you to judge.
Last Thursday
"Roy Hemmingway says it is a myth there is a high risk of Auckland blackouts from 2010 and another myth that there will not be enough power this winter"
and today,
"Electricity Commission chairman Roy Hemmingway said the situation had become a matter of concern. "
How can a myth be a matter of concern?
The NFI award of the week goes to Roy Hemmingway.
With a double salto ending in the lunge position.
Perhaps I'll leave it to you to judge.
Last Thursday
"Roy Hemmingway says it is a myth there is a high risk of Auckland blackouts from 2010 and another myth that there will not be enough power this winter"
and today,
"Electricity Commission chairman Roy Hemmingway said the situation had become a matter of concern. "
How can a myth be a matter of concern?
The NFI award of the week goes to Roy Hemmingway.
Tuesday, March 07, 2006
Oil, Simmons, Iraq and the forthcoming Electricity Crisis.
Matt Simmons and Peak Oil
There have been some very interesting articles written in recent days. Take Matt Simmons's very good article Outlook 2006 What a Difference 20 Years Makes in Crude Oil Prices. The key point to be taken from this article is how fundamentally wrong most economists got it over the last 20 years. Simmons illustrates how demand has exploded and new supply has shrunk. Typically Middle East oil made up any supply shortfalls however increasingly it seems we have already past the peak supply of sweet light crude, the easiest oil to produce, the simplest to refine into a final product.
By the middle of 2005 every rig capable of drilling in the world was in use, every key oil pipeline and processing facility is operating at 100%. Oil supply according to Simmons is tighter than it ever has been but more concerning;
Matt Simmons and Peak Oil
There have been some very interesting articles written in recent days. Take Matt Simmons's very good article Outlook 2006 What a Difference 20 Years Makes in Crude Oil Prices. The key point to be taken from this article is how fundamentally wrong most economists got it over the last 20 years. Simmons illustrates how demand has exploded and new supply has shrunk. Typically Middle East oil made up any supply shortfalls however increasingly it seems we have already past the peak supply of sweet light crude, the easiest oil to produce, the simplest to refine into a final product.
Until 2005, OPEC had risen to the occasion and supplied constant surges in unexpected demand. Now it is clear - for anyone closely studying OPEC production announcements and other data on the true status of OPEC oil output - that the countries comprising OPEC membership are all producing at maximum levels.
By the middle of 2005 every rig capable of drilling in the world was in use, every key oil pipeline and processing facility is operating at 100%. Oil supply according to Simmons is tighter than it ever has been but more concerning;
2005 will go down in history books as perhaps the poorest year for exploration success for both oil and gas since World War II. This dismal success was not for lack of effort. Record amounts of funds are being plowed into E&P capital spending, which is why all the world's rigs are now in use.
Peak oil advocates are always going head to head the Panglossian optimists, those that place their blind faith in the market, or argue that technology and science will come to the rescue, "the world won't run out of oil for another 70 years or so.." Most of this crowd don't actually understand what peak oil means, nor do they understand the fundamental problem increasingly complex societies are faced with.
Economic growth necessarily requires an energy subsidy, and as existing energy sources become scarce and marginal returns diminish due to increasing societal complexity a civilisation must find a cheaper more abundant energy source to replace the scarce one. Otherwise, economic growth flounders, empires shrink, political and civil disarray emerges. Even technological investment itself is subject to diminishing returns, 4-5% increases in investment in technology are needed to produce around 2% boosts in productivity, at this rate we'd all end up scientists.
2006, Simmons suggests will be the year the Peak Oil debate intensifies into a debate on the scale of climate change.
Another good article dicussing peak oil appears in Scientific American, with a link to the infamous Hirsch Report (which strangely appears back on a US DOE website after going AWOL for sometime during 2005) is titled Facing the Facts on Oil. Worth a read!
Someone way too frightened to face the facts on Peak Oil is Nathan Paulsen, Minnesota Daily. Nathan wrote an article entitled Complacent and Addicated. Showing some weak concern, hey I guess we can say Nathans heart is in the right place but he just couldn't face telling the truth. I know this because I emailed Nathan and he came back to me saying in a meek rodent kind of tone, writing the column caused him a lot of "anxiety", and "I imagined that not one in a hundred of my peers has ever heard of peak oil". A lame excuse for bullshit I say. Nathan argued with reference to the Hirsch report that according to "broad scientific consensus" peak oil will occur within the next 25 years. Fucking Bullshit!
Wake up Nathan! If you had actually read the Hirsch Report and done even a minimal level of research, you would have recognised (AND REPORTED) that the most optimistic suggestions by the discredited IEA themselves (International Energy Agency) is in fact 25 years, nothing like erring on the side of "don't scare the horses" or maybe Nathan is afraid that in Minnesota he'd be lynched by a mob of Ford Explorer Lumberjacks. The other crock of shite from the IEA is that only after several trillion dollars (13 from memory, yes trillion is what I said) has been invested, several mega-oil-fields are found, ones the size of the mighty Ghawar field in Saudi, and all this assumes Canada's oil tar sands can be bought on board meanwhile to make up the shortfall.
Get it right Nathan, peak oil according to broad scientific consensus will occur by the end of the decade, if not already, or else very shortly after. I hate to think what life might be like in 25 years. I had a go at predicting what it might be like in 15 years (two years ago) In 25 years time Nathan there'll be fuck all of anything left, but love, hope, kids, shelter and life, a life red in tooth and claw, nasty brutish and short. Chur Hobbes.
Iraq
There is an awakening backlash in the United States. People are sick of Iraq, not to mention the Iraqis are no doubt sick of the United States. This marriage made in hell is on the rocks and an ugly divorce is well overdue. After all ask yourself again why did they go there? Weapons of Mass Distruction? Terrorism. None of the 9/11 terrorists were from Iraq. There was no terrorism in Iraq before the US marched in. No, the US are there in an attempt to secure some large oil reserves. They've realised the project is a fucking failure and so just a week or two ago Bush announces we need to reduce our addiction to oil. A very good article predicting the downfall of the Bush regime was published on Scoop. Article by Bernard Weiner titled Conservatives Jumping Ship: Bush is Going Down. Essential reading!
Electricity Crisis Time! (already?!)
Roy Hemmingway Electricity Commissioner earlier last week inferred (my inference) that Meridian's Dr Keith Turner was an idiot. Well, lets face it if you have a theory or opinion and someone calls it a myth then they are calling you an idiot in a roundabout way.
Dr Keith Turner is warning of an electricity crisis due to low hydro lake levels, lake levels are similar to 1992 however electricity demand is much much greater today than 92. I like Keith Turner, he's committed Meridian to renewable energy development, he tells it as it is. He's not afraid of bad news.
But what I wanted to say was this.
If Keith Turner is right, he's warned everyone very clearly, that unless action is taken now there is a high probability of a very serious situation this winter, and Hemmingway is wrong
"Mr Hemmingway told the annual National Power Conference in Auckland yesterday that it was not the case that electricity supply would be short this winter."
"Roy Hemmingway says it is a myth there is a high risk of Auckland blackouts from 2010 and another myth that there will not be enough power this winter." (From Stuff)
If Hemmingway is wrong - he should resign.
Cheers
Steve McKinlay
PowerLess NZ
Thursday, March 02, 2006
Where's My Free Lunch?
The popular truism, merely a restatement of the laws of thermodynamics, that is (simply) that you can't get anything for nothing is at strangely at odds with the economists "market will always provide", dogma. It used to be God that would always provide, but we mustn't forget, as we are told, we live in a secular society. And so, religious fundamentalism has been replaced by a corporate version of the same thing. Of course the market won't provide for free. No, and we ought to remind ourselves there is a double cost. The price we pay, and the price the environment pays.
Nevertheless, don't worry about supply, or the economy we are told - science and technology, like superman or the cavalry will come to the rescue. And so as New Zealand ponders the implications of the worst trade deficit in the history of our nation, more household debt that could be squeezed into a black hole it's "business as usual" folks. We all need to be MORE optimistic Dr Cullen tells us - otherwise we'll talk ourselves into a shithole. Forget the fact that we are hocking ourselves into a shithole in the name of "progress". No one for a second considers the possibility that we are a nation (a planet) living well beyond our means. Not just financially but in terms of our ability to continue to consume finite resources that we a constantly reminded are not finite, they are only limited by our minds or our ingenuity.
Don't worry about supply the American Roy Hemmingway tells us, will we run out of electricity, it's a "myth" Hemmingway tells us. Don't listen to the doom and gloom merchants - there's plenty of everything to go round. So, keep the spa-pool plugged in and head out to the Warehouse this Saturday armed with your credit cards for some retail therapy, it will help keep the economy ticking along too.
I say "the American" because, culturally Roy Hemmingway has a lot to answer for. His nation wastes more of every concievable resource the planet has to offer, all in the name of the "American Fucking Way of Life". We ought to be wary of the opinions of "optimistic" consumption champions like Hemmingway.
So, while Westport and the southern lakes run out of water, and while the economy looks like a jumbo jet running on one dodgy engine, there is a bizzare rush to bizzarely, build more motorways, because what we all really need in these uncertain times is less commute time. Surely somehow a faster trip to work in the morning will equate to billions of dollars in increased gross domestic product.
Oil production is expected to peak soon, next year maybe, or by the end of the decade. So, the billions that are spent today discounting the future, building Aucklands highways, will still be being paid back as we are on the downside of the production curve. After peak oil global production will be some 3 or so percent less each year, while demand growth continues to run at more than 3% per annum. Once this time arrives there will be no more economic growth because growth requires increased consumption of energy, as we are forced by circumstance to use lesser and lesser amounts of energy so too will economic activity and inevitably population claw back.
So what of the future? Ah, don't worry economists will tell you. For a 150 years scientists have been making discoveries, "they'll come up with something", like the proverbial magician pulling the the rabbit out of the hat. If we don't build the roads now, we'll all be sitting in our solar powered cars bumper to bumper circa 2015.
The popular truism, merely a restatement of the laws of thermodynamics, that is (simply) that you can't get anything for nothing is at strangely at odds with the economists "market will always provide", dogma. It used to be God that would always provide, but we mustn't forget, as we are told, we live in a secular society. And so, religious fundamentalism has been replaced by a corporate version of the same thing. Of course the market won't provide for free. No, and we ought to remind ourselves there is a double cost. The price we pay, and the price the environment pays.
Nevertheless, don't worry about supply, or the economy we are told - science and technology, like superman or the cavalry will come to the rescue. And so as New Zealand ponders the implications of the worst trade deficit in the history of our nation, more household debt that could be squeezed into a black hole it's "business as usual" folks. We all need to be MORE optimistic Dr Cullen tells us - otherwise we'll talk ourselves into a shithole. Forget the fact that we are hocking ourselves into a shithole in the name of "progress". No one for a second considers the possibility that we are a nation (a planet) living well beyond our means. Not just financially but in terms of our ability to continue to consume finite resources that we a constantly reminded are not finite, they are only limited by our minds or our ingenuity.
Don't worry about supply the American Roy Hemmingway tells us, will we run out of electricity, it's a "myth" Hemmingway tells us. Don't listen to the doom and gloom merchants - there's plenty of everything to go round. So, keep the spa-pool plugged in and head out to the Warehouse this Saturday armed with your credit cards for some retail therapy, it will help keep the economy ticking along too.
I say "the American" because, culturally Roy Hemmingway has a lot to answer for. His nation wastes more of every concievable resource the planet has to offer, all in the name of the "American Fucking Way of Life". We ought to be wary of the opinions of "optimistic" consumption champions like Hemmingway.
So, while Westport and the southern lakes run out of water, and while the economy looks like a jumbo jet running on one dodgy engine, there is a bizzare rush to bizzarely, build more motorways, because what we all really need in these uncertain times is less commute time. Surely somehow a faster trip to work in the morning will equate to billions of dollars in increased gross domestic product.
Oil production is expected to peak soon, next year maybe, or by the end of the decade. So, the billions that are spent today discounting the future, building Aucklands highways, will still be being paid back as we are on the downside of the production curve. After peak oil global production will be some 3 or so percent less each year, while demand growth continues to run at more than 3% per annum. Once this time arrives there will be no more economic growth because growth requires increased consumption of energy, as we are forced by circumstance to use lesser and lesser amounts of energy so too will economic activity and inevitably population claw back.
So what of the future? Ah, don't worry economists will tell you. For a 150 years scientists have been making discoveries, "they'll come up with something", like the proverbial magician pulling the the rabbit out of the hat. If we don't build the roads now, we'll all be sitting in our solar powered cars bumper to bumper circa 2015.
Thursday, February 23, 2006
The Nuclear Ship Policy
The ACT party think that we ought to "debate" the nuclear ship policy. That is, they want the US Nuclear ships to come back to New Zealand, they want to turn the clock back so we can all belong to that cosy post-second world war ANZUS treaty again. Heather Roy, published this point of view in her weekly diary, it's now published as an ACT Press Release on Scoop.
Anyway, I disagree with ACT. Fuck America! Do we really want to be part of all that nonsense in the middle east. I wrote back to Heather Roy. Here's my email to her.
Dear Heather,
What are we to debate? Everyone agrees. Why would national or labour want to debate something that by far and away the majority of kiwis agree upon. Nobody (but ACT it seems) are interested in debating it, it's a dead horse. You want a referendum, get your petition boards out and get people signing for the referendum, I reckon you'd be lucky to get a few thousand signatures. No one is interested. We simply don't want American Warships here - and we all know deep down that's the issue.
The issue is not about whether or not nuclear radition is a problem with nuclear powered vessels, or even vessels carrying nuclear weapons - that's laughable. We've all moved on. The issue is an ideological one. Most New Zealanders are very very happy that we are not involved in Bush's debacle in the middle east. And, to be honest most New Zealanders I'm pretty sure are equally not interested in having the American war machine here.
America is our ally?, ok, that's fine, why should it be on their terms - why because we want a trade deal - (consider seriously the morality of that) What is America going to protect us from - terrorism, weapons of mass destruction? Look at the surge of nationalism in Australia - you want that here too? Or do you think we are more intelligent than Aussies, that it wouldn't happen in NZ. Any politician that wants to argue today that we should be in Iraq with Australia and the US is a dreamer - the war is a sham, it's not a war on terrorism, there was no terrorism in Iraq before America marched in, thus by implication any involvement with the US military machine is geo-politically is risky to say the least. What is ACT frightened of invasion by Indonesia? And do we seriously think America would come running to save us if that did happen?
The nuclear ship policy is just a face saving front. It means we can have this policy without having to tell America to f-off. It's called diplomacy - we are having our cake and eating it too - ACT seems to want to toss away that diplomatic balancing act. Clarke and Brash can hide behind their constituents by saying, "it's what the people want" - and it is what we want. We don't want to be part of the US's resource wars, wars for oil and "the american way of life that is not negotiable". I am happy to be a "very, very, very good friend" of the US as long as that means I don't have to participate in their illegal, un(UN)sanctioned, unilateral foriegn policy decisions.
We are living in a different time Heather, the rules have changed. Nation-state is a myth - the "threat" comes from within. With our "nation-state" allies who are we to combat today? The world today faces threats that are bourne out of wide reaching ideology not nationalistic fervour across the border, or English Channel. Furthermore, ok, the nuclear threat is much diminished as you say, but you don't make the point that no state is capable of defending it's own citizens. Having good allies didn't (and could never) prevent the Bali bombing, the London tube station bombing, 9/11, the Spanish train bombs, in fact you could argue it excacerbated the problem. These are not traditional conflicts between nations. The notion of nation allyhood is a historical curiosity.
Anyway, I don't want to be an ally of a nation that acts unilaterally, that holds other nations to standards it can't or won't hold itself, that refuses to cooperate on global initiatives, and that refrains from paying it's UN dues. fuck them Heather - they (the US) are a sick joke. We don't need them. And most New Zealanders while they are happy to listen to hip hop and eat McDonalds don't want a part of anything American. I can't remember who said it "America: the only nation in the world that went from barbarism to decadence, without civilisation in the middle."
Cheers
Steve McKinlay
The ACT party think that we ought to "debate" the nuclear ship policy. That is, they want the US Nuclear ships to come back to New Zealand, they want to turn the clock back so we can all belong to that cosy post-second world war ANZUS treaty again. Heather Roy, published this point of view in her weekly diary, it's now published as an ACT Press Release on Scoop.
Anyway, I disagree with ACT. Fuck America! Do we really want to be part of all that nonsense in the middle east. I wrote back to Heather Roy. Here's my email to her.
Dear Heather,
What are we to debate? Everyone agrees. Why would national or labour want to debate something that by far and away the majority of kiwis agree upon. Nobody (but ACT it seems) are interested in debating it, it's a dead horse. You want a referendum, get your petition boards out and get people signing for the referendum, I reckon you'd be lucky to get a few thousand signatures. No one is interested. We simply don't want American Warships here - and we all know deep down that's the issue.
The issue is not about whether or not nuclear radition is a problem with nuclear powered vessels, or even vessels carrying nuclear weapons - that's laughable. We've all moved on. The issue is an ideological one. Most New Zealanders are very very happy that we are not involved in Bush's debacle in the middle east. And, to be honest most New Zealanders I'm pretty sure are equally not interested in having the American war machine here.
America is our ally?, ok, that's fine, why should it be on their terms - why because we want a trade deal - (consider seriously the morality of that) What is America going to protect us from - terrorism, weapons of mass destruction? Look at the surge of nationalism in Australia - you want that here too? Or do you think we are more intelligent than Aussies, that it wouldn't happen in NZ. Any politician that wants to argue today that we should be in Iraq with Australia and the US is a dreamer - the war is a sham, it's not a war on terrorism, there was no terrorism in Iraq before America marched in, thus by implication any involvement with the US military machine is geo-politically is risky to say the least. What is ACT frightened of invasion by Indonesia? And do we seriously think America would come running to save us if that did happen?
The nuclear ship policy is just a face saving front. It means we can have this policy without having to tell America to f-off. It's called diplomacy - we are having our cake and eating it too - ACT seems to want to toss away that diplomatic balancing act. Clarke and Brash can hide behind their constituents by saying, "it's what the people want" - and it is what we want. We don't want to be part of the US's resource wars, wars for oil and "the american way of life that is not negotiable". I am happy to be a "very, very, very good friend" of the US as long as that means I don't have to participate in their illegal, un(UN)sanctioned, unilateral foriegn policy decisions.
We are living in a different time Heather, the rules have changed. Nation-state is a myth - the "threat" comes from within. With our "nation-state" allies who are we to combat today? The world today faces threats that are bourne out of wide reaching ideology not nationalistic fervour across the border, or English Channel. Furthermore, ok, the nuclear threat is much diminished as you say, but you don't make the point that no state is capable of defending it's own citizens. Having good allies didn't (and could never) prevent the Bali bombing, the London tube station bombing, 9/11, the Spanish train bombs, in fact you could argue it excacerbated the problem. These are not traditional conflicts between nations. The notion of nation allyhood is a historical curiosity.
Anyway, I don't want to be an ally of a nation that acts unilaterally, that holds other nations to standards it can't or won't hold itself, that refuses to cooperate on global initiatives, and that refrains from paying it's UN dues. fuck them Heather - they (the US) are a sick joke. We don't need them. And most New Zealanders while they are happy to listen to hip hop and eat McDonalds don't want a part of anything American. I can't remember who said it "America: the only nation in the world that went from barbarism to decadence, without civilisation in the middle."
Cheers
Steve McKinlay
Thursday, February 09, 2006
As good as it will ever get.
It always amazes and irritates me to listen to people who talk about the "future". This is the future, this is it now, this is as good as it gets. The real future, the actual future will be a regression. We'll never fly around in personal George Jetson jets. In the future there won't be economic growth. Things are not going to get better. There won't be the internet for everyone in the third world. Living standards are not going to improve, except perhaps on a minor regional or individual basis. World poverty will get worse, a whole lot worse, not better. We won't be living into our hundreds in 20 years time, we'll all be dying a lot younger. We won't be feeding the world, the world, in the future will be starving and cold.
The past, our mistake and we've left the future too late.
It always amazes and irritates me to listen to people who talk about the "future". This is the future, this is it now, this is as good as it gets. The real future, the actual future will be a regression. We'll never fly around in personal George Jetson jets. In the future there won't be economic growth. Things are not going to get better. There won't be the internet for everyone in the third world. Living standards are not going to improve, except perhaps on a minor regional or individual basis. World poverty will get worse, a whole lot worse, not better. We won't be living into our hundreds in 20 years time, we'll all be dying a lot younger. We won't be feeding the world, the world, in the future will be starving and cold.
The past, our mistake and we've left the future too late.
Monday, February 06, 2006
Addicted to the stuff?
I've just returned to work from a wonderful extended holiday, the weather has been brilliant - a long hot summer not unlike the ones I remember as a kid. Apart from busting my Acromo-Clavicular ligament (yes, the downside of the Vespa - it's a long boring story...) things have been great. Other than fat interest rates on the credit card, a nasty Christmas hangover for many happy shoppers our disposable lifestyle continues seemingly unabated. No real sign of the promised collapse of modern civilisation yet.
While we are all waiting...
The most interesting media statement in recent weeks has to be George Bush's statement in his "state of the union speech" - America is addicted to oil. The LA Times gets in on the act too, A Nation Addicted to Oil and Debt.
So, the cat, perhaps not quite out of the bag yet, it's certainly making a fair bloody racket. The ability to finance massive debt at a national level requires the continuation of supposedly endless economic growth or for the average mum and dad baby boomers, about to retire, more capital gain on their already leveraged to the hilt, residential property.
And as overall global oil production peaks over the next year or two this problem is going to become one big ugly festering fiscal sore as the debt/housing bubble pops like a bunker buster. Someday, pretty soon, the nightmare picture will begin to emerge. Petrol at $2 a litre. Massive redundancies occuring everywhere, the Reserve Bank Governer and Dr Cullen will admit we are entering a recessionary period. The party is drawing to a close.
The last place I'd want to be when this happens is "Riverstone Terraces" where you have to jump in your vehicle just to go get a bottle of milk, or somewhere up the Kapiti Coast, wishing I could ride my push bike to work.
In the meanwhile, enjoy the remaining days of summer.
I've just returned to work from a wonderful extended holiday, the weather has been brilliant - a long hot summer not unlike the ones I remember as a kid. Apart from busting my Acromo-Clavicular ligament (yes, the downside of the Vespa - it's a long boring story...) things have been great. Other than fat interest rates on the credit card, a nasty Christmas hangover for many happy shoppers our disposable lifestyle continues seemingly unabated. No real sign of the promised collapse of modern civilisation yet.
While we are all waiting...
The most interesting media statement in recent weeks has to be George Bush's statement in his "state of the union speech" - America is addicted to oil. The LA Times gets in on the act too, A Nation Addicted to Oil and Debt.
So, the cat, perhaps not quite out of the bag yet, it's certainly making a fair bloody racket. The ability to finance massive debt at a national level requires the continuation of supposedly endless economic growth or for the average mum and dad baby boomers, about to retire, more capital gain on their already leveraged to the hilt, residential property.
And as overall global oil production peaks over the next year or two this problem is going to become one big ugly festering fiscal sore as the debt/housing bubble pops like a bunker buster. Someday, pretty soon, the nightmare picture will begin to emerge. Petrol at $2 a litre. Massive redundancies occuring everywhere, the Reserve Bank Governer and Dr Cullen will admit we are entering a recessionary period. The party is drawing to a close.
The last place I'd want to be when this happens is "Riverstone Terraces" where you have to jump in your vehicle just to go get a bottle of milk, or somewhere up the Kapiti Coast, wishing I could ride my push bike to work.
In the meanwhile, enjoy the remaining days of summer.
Tuesday, December 13, 2005
Hiding from Reality
Against Libertarianism
Suzzane Wright on a blog site entitled The Whig had a good crack at the libertarian philosophy.
I couldn't help toss in my $0.02 worth. Being the lazy procrastinating sod that I am I've posted the comment. You can read Suzzane Wright's article if you like, it's just as interesting as her photo - on The Whig.
***
Against Libertarianism
Suzzane Wright on a blog site entitled The Whig had a good crack at the libertarian philosophy.
I couldn't help toss in my $0.02 worth. Being the lazy procrastinating sod that I am I've posted the comment. You can read Suzzane Wright's article if you like, it's just as interesting as her photo - on The Whig.
***
I think the reason libertarians (viewed in somewhat more general terms regarding their philsophy than say, Libertarianz!) get such little support is because at a very fundamental level by far the majority of the population have an intuition that the philosophy is flawed. And they are not far wrong.
If we assume libertarians advocate for the maximisation of individual rights and laissez-faire free market economics (I'm happy to be corrected) as well as private property rights. We can say this, these somewhat Benthamist ideals will of course benefit the individual but only insofar as he continues to deny the truth of such behaviours impact on society as a whole.The libertarian adheres to the utilitarian ideal that we all necessarily want to maximise our individual utlity largely regardless of any consequence (and if there is to be any consequence the market will indicate as such). Thus, such a philosophy has us all rushing toward a global shit heap at ever accelerating speeds.
This philosophy would argue that in order to solve the problem of a depleting resource (for example) we must simply deplete it at a quicker rate - the "market" in combination with technology, will continue to provide cheaper and more efficient substitutes. The corollary to this of course is that eventually technology will provide an infinite amount of energy (for example) for free, thus allowing economic growth to happily continue ad-infinitum.
Libertarian philosophy would defer action or recognition of future options until a crisis is so clear and evident that it becomes detectable through market and monetary mechanisms, by which time in reality, it is mostly too late.
How in a world supposedly guided by science and reason such an ideology would take precedence over other senses (those informed say, by science) has me baffled. The idealisation of the free market is bizzare given the markets inability to act as an indicator of anything at all in the longer term - Dotcom bubble, Enron and LTCM collapses come to mind.
The argument against libertarianism is well rehearsed, (Hardin's Tragedy of the Commons) "but", in Kuhns words, "there are always some men who cling to one or another of the older views, and they are simply read out of the profession, which thereafter ignores their work." ACT and Libertarianz showing in the recent election... Perhaps ironically a market indicator itself.
Monday, December 05, 2005
The Mumbo-Jumboism of Infinite Resources
The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn’t deliver the goods.
John Maynard Keynes
I often find myself having to "let go" of the irritation that builds up as a result of my increasing observations of abject stupidity, or is it just ignorance (otherwise known as wishful thinking) - perhaps a bit of both, not only in the general population but by those who ought to know better. I refer to a short article by Jerome Corsi on WorldNetDaily.com entitled Is Oil Peaking Today. Corsi, in an unabashed promotion of his own book Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil Corsi courageously argues that "energy resources are infinite not finite".
Given the inherent ambiguity of such a statement, clarification begs.
Surely the "energy resources" that we are interested in are the ones that we have access to. It may be interesting to assume that the entire energy resouces contained within the universe are infinite, but this does us no good. We can't mine uranium or pump oil off planets in other solar systems (let alone other planets within our own solar system), hence we must relegate such suggestions into the absurdity basket. Corsi could well be referring to solar power, seemingly infinite, however I'm yet to see an A320 Airbus running on solar panels.
In employing the popular straw man strategy, the obfuscationists tool of choice, and in order to set up comparisons to failed doomsday predictions Corsi argues "peak oil theorists argue we are running out of oil". No, we argue that global oil production is about to peak, we argue that new discoveries are not making up the shortfall between demand growth and currently depleting feilds.
Corsi like many of his contemporaries actually misses the point. In fact we began running out of oil the day the first barrel was pumped. But this isn't the point. See any of my previous and numerous blog entries for further explanation.
Most of the demand growth is coming from transitioning economies. China, India, many parts of "the third world" are barrelling at ever increasing speeds toward a western styled living arrangement, a goal that will never be realised. No one would argue that in order to develop economically nations must grow their energy consumption. It’s a simple fact, the worlds most developed nations consume the most energy. We can't increase economic growth and at the same time reduce energy consumption. Energy = Work, more work requires more energy.
Furthermore, if you want to believe that we can continue growing and expanding energy consumption infinitely upon a planet with a fixed surface area, let alone a finite mass then I suggest you see your psychotherapist, before returning to school to repeat elementary grade science.
Yet blinded by the mumbo jumbo of wishful thinking Corsi, fails to understand the most rudimentary principles of scientific methodology. It may well be desirable to concoct pseudo-scientific or teleological stories to suit our economic purposes however, nature does not adapt a resource to its artifactual function.
Corsi following (the discredited) Thomas Gold (abiotic oil thesis) (and sounding like a bit like Lamark) argues that fossil fuels aren’t even fossil fuels. You see it is this level of sheer fuckwittery that you need to descend to in order to refute the argument that such resources are finite. Unfortunately the abiotic oil thesis doesn’t have much to say about why the North Sea oil wells are depleting at almost 50% per year. As Jim Kunstler puts it, “because they were drilled so efficiently with the latest technology”. Nor does it explain why the majority of non-Opec oil is now in decline, nor why the massive Burgan Oil field in Kuwait (second largest oil field in the world) is in decline. If the abiotic oil thesis were true, why would it be that oil production in the US has been in steady decline since 1971.
Don’t worry folks, the answer (we are assured) to all these questions is “the market” and don’t forget “the markets” bosom-buddy “technology” – because as we all know the only way to solve the problem of a depleting resource is to deplete it at a faster rate. A bizzare piece of faith in a world supposedly informed by science and reason, that we would place our faith in some sign or signal from the free market as a long term indicator of anything at all and at the same time ignore explanations of a more scientific or geological nature.
We live in a world obsessed with individualism, clamouring for choice, economic growth, consumerism, suburban expansionism, globalisation, V8 drive-in heaven, yet by a elegant circular reasoning the same technology that makes our way of life possible, born of science itself seems to provide the hubris required to scoff in the face of reason.
Within this increasingly arational wacko-libertarian society characterised by diminishing returns on our investments in rapidly evolving societal complexity it is no longer acceptable to place limits upon anything. In contrast panglossian optimism and teleology has replaced logical validity. All we need to is wish a particular outcome into existance.
Thus the slogan of the new mumbo-jumboists : truth is a weak excuse for a lack of imagination. We might like to believe that there are no limits to human ingenuity. However this tragically does not translate to there no limits to anything - in attempting to solve unsolvable problems it seems we've adapted a popular childhood esteem building motto and applied it to industrial civilisation.
I cannae change the laws of physics Captain
Scotty to Captain Kirk (attributed).
Civilization exists by geological consent, subject to change without notice.
Will Durant
The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn’t deliver the goods.
John Maynard Keynes
I often find myself having to "let go" of the irritation that builds up as a result of my increasing observations of abject stupidity, or is it just ignorance (otherwise known as wishful thinking) - perhaps a bit of both, not only in the general population but by those who ought to know better. I refer to a short article by Jerome Corsi on WorldNetDaily.com entitled Is Oil Peaking Today. Corsi, in an unabashed promotion of his own book Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil Corsi courageously argues that "energy resources are infinite not finite".
Given the inherent ambiguity of such a statement, clarification begs.
Surely the "energy resources" that we are interested in are the ones that we have access to. It may be interesting to assume that the entire energy resouces contained within the universe are infinite, but this does us no good. We can't mine uranium or pump oil off planets in other solar systems (let alone other planets within our own solar system), hence we must relegate such suggestions into the absurdity basket. Corsi could well be referring to solar power, seemingly infinite, however I'm yet to see an A320 Airbus running on solar panels.
In employing the popular straw man strategy, the obfuscationists tool of choice, and in order to set up comparisons to failed doomsday predictions Corsi argues "peak oil theorists argue we are running out of oil". No, we argue that global oil production is about to peak, we argue that new discoveries are not making up the shortfall between demand growth and currently depleting feilds.
Corsi like many of his contemporaries actually misses the point. In fact we began running out of oil the day the first barrel was pumped. But this isn't the point. See any of my previous and numerous blog entries for further explanation.
Most of the demand growth is coming from transitioning economies. China, India, many parts of "the third world" are barrelling at ever increasing speeds toward a western styled living arrangement, a goal that will never be realised. No one would argue that in order to develop economically nations must grow their energy consumption. It’s a simple fact, the worlds most developed nations consume the most energy. We can't increase economic growth and at the same time reduce energy consumption. Energy = Work, more work requires more energy.
Furthermore, if you want to believe that we can continue growing and expanding energy consumption infinitely upon a planet with a fixed surface area, let alone a finite mass then I suggest you see your psychotherapist, before returning to school to repeat elementary grade science.
Yet blinded by the mumbo jumbo of wishful thinking Corsi, fails to understand the most rudimentary principles of scientific methodology. It may well be desirable to concoct pseudo-scientific or teleological stories to suit our economic purposes however, nature does not adapt a resource to its artifactual function.
Corsi following (the discredited) Thomas Gold (abiotic oil thesis) (and sounding like a bit like Lamark) argues that fossil fuels aren’t even fossil fuels. You see it is this level of sheer fuckwittery that you need to descend to in order to refute the argument that such resources are finite. Unfortunately the abiotic oil thesis doesn’t have much to say about why the North Sea oil wells are depleting at almost 50% per year. As Jim Kunstler puts it, “because they were drilled so efficiently with the latest technology”. Nor does it explain why the majority of non-Opec oil is now in decline, nor why the massive Burgan Oil field in Kuwait (second largest oil field in the world) is in decline. If the abiotic oil thesis were true, why would it be that oil production in the US has been in steady decline since 1971.
Don’t worry folks, the answer (we are assured) to all these questions is “the market” and don’t forget “the markets” bosom-buddy “technology” – because as we all know the only way to solve the problem of a depleting resource is to deplete it at a faster rate. A bizzare piece of faith in a world supposedly informed by science and reason, that we would place our faith in some sign or signal from the free market as a long term indicator of anything at all and at the same time ignore explanations of a more scientific or geological nature.
We live in a world obsessed with individualism, clamouring for choice, economic growth, consumerism, suburban expansionism, globalisation, V8 drive-in heaven, yet by a elegant circular reasoning the same technology that makes our way of life possible, born of science itself seems to provide the hubris required to scoff in the face of reason.
Within this increasingly arational wacko-libertarian society characterised by diminishing returns on our investments in rapidly evolving societal complexity it is no longer acceptable to place limits upon anything. In contrast panglossian optimism and teleology has replaced logical validity. All we need to is wish a particular outcome into existance.
Thus the slogan of the new mumbo-jumboists : truth is a weak excuse for a lack of imagination. We might like to believe that there are no limits to human ingenuity. However this tragically does not translate to there no limits to anything - in attempting to solve unsolvable problems it seems we've adapted a popular childhood esteem building motto and applied it to industrial civilisation.
I cannae change the laws of physics Captain
Scotty to Captain Kirk (attributed).
Civilization exists by geological consent, subject to change without notice.
Will Durant
Tuesday, November 29, 2005
Kuwaiti Burgan Oil Field Peaks
Rodney Hide buries head in the sand
Pumping oil for almost 60 years the Burgan oil field in Kuwait is the second largest in the world (second to the Saudi Ghawar field). In an interview with Bloomberg Farouk Al-Zanki Chairman of the Kuwait Oil Company described the field as "exhausted". After failed attempts to keep production at around 2 million barrels per day the production rate has fallen to around 1.7 million and the company is spending around 3 million per year simply to maintain current production. The future for the second largest oil producing field looks bleak.
With such revelations it is becoming increasingly difficult to deny the peak oil hypothesis yet Rodney Hide continues to scoff in the face of overwhelming evidence to the contrary. Makes one wonder what would have to actually happen for Rodney to accept that the times they are a changing. I imagine a NZ in the depths of depression, starved of the oil we are all totally dependant upon, hundreds of thousands unemployed with Rodney Hide arguing "it's all in people's heads, the market will provide"...
Hide's fallacious (straw man) attempt to refute todays claims based on incorrect argument's made in the 1940's is laughable (at least to any first year philosophy or logic student) - I guess that's what we call politics. I suggest Rodney Hide take a look at the most recent models provided by the ASPO. It is this data that requires refutation, it is this data that Hide needs to turn his attention to. Unfortunately in a typical Hidean post-hoc obfuscation we fail to detect any honest debate about peak oil. His entire rant is invalid. What we know about oil production, supply and demand today is considerably different to what we knew in the 40's.
Although much of the non OPEC oil has peaked and the production difficulties of the Arab nations are beginning to emerge those continuing to flatly deny the peak oil hypothesis are starting to develop an aura of abject stupidity. We can wish all we want, that won't change the facts.
Several nations (France, Sweden, Iceland) have already recognised peak oil and have began planning. We ought to join them.
Rodney Hide buries head in the sand
Pumping oil for almost 60 years the Burgan oil field in Kuwait is the second largest in the world (second to the Saudi Ghawar field). In an interview with Bloomberg Farouk Al-Zanki Chairman of the Kuwait Oil Company described the field as "exhausted". After failed attempts to keep production at around 2 million barrels per day the production rate has fallen to around 1.7 million and the company is spending around 3 million per year simply to maintain current production. The future for the second largest oil producing field looks bleak.
With such revelations it is becoming increasingly difficult to deny the peak oil hypothesis yet Rodney Hide continues to scoff in the face of overwhelming evidence to the contrary. Makes one wonder what would have to actually happen for Rodney to accept that the times they are a changing. I imagine a NZ in the depths of depression, starved of the oil we are all totally dependant upon, hundreds of thousands unemployed with Rodney Hide arguing "it's all in people's heads, the market will provide"...
Hide's fallacious (straw man) attempt to refute todays claims based on incorrect argument's made in the 1940's is laughable (at least to any first year philosophy or logic student) - I guess that's what we call politics. I suggest Rodney Hide take a look at the most recent models provided by the ASPO. It is this data that requires refutation, it is this data that Hide needs to turn his attention to. Unfortunately in a typical Hidean post-hoc obfuscation we fail to detect any honest debate about peak oil. His entire rant is invalid. What we know about oil production, supply and demand today is considerably different to what we knew in the 40's.
Although much of the non OPEC oil has peaked and the production difficulties of the Arab nations are beginning to emerge those continuing to flatly deny the peak oil hypothesis are starting to develop an aura of abject stupidity. We can wish all we want, that won't change the facts.
Several nations (France, Sweden, Iceland) have already recognised peak oil and have began planning. We ought to join them.
Sunday, November 20, 2005
Cluelessness, Democracy and Suburban Hell for Everyone
"Freedom is the recognition of necessity" (Hardin, 1968)
Those enamoured by liberal democracy (in an idealistic way) are often guilty of incorrectly assuming that (and I think I've said this a few times) contained within the slurry of half-arsed ideas that our information-overloaded society offers, there is at least one idea that if enough people believe it then it must be true.
Peter Cresswell who runs a NZ blog site called Not PC provides a good example of greed oriented fuckwittery and complete and utter lack of foresight, let alone "I want to leave a place that my kids or grand kids will want to live in".
Cresswell thinks suburban sprawl is a good thing! Cresswell opposes anyone and anything that seeks to slow development and growth in favour of "leaving it to the markets" - in other words leaving it to the greedy fucks that will turn the world into a shoebox apartment for a fast buck.
When people like Cresswell get his way, we simply decrease the amount of time between now and when we are all living in a shithole. If Cresswell had his way we'd do stupid things like slice up millions of hectares of currently productive farmland so him and his plonker libertarian mates can have (totally unproductive but esthetically pleasing) lifestyle blocks complete with Ford Explorers and McMansions - of course the poor people can all live an hours happy driving away from the city in exurbian ghettos.
Anyway, in response to his blog titled Countrywide Zoning is Unwanted Government Control I posted this comment.
If Cresswell and his obese on consumerism junkies ("because it's my choice") wish to continue with their plans for suburban sprawl then we'd better start sending troops to the middle east since the remaining (2/3's of the world's oil supply) is there and that's what it takes to sustain suburbia.
"Freedom is the recognition of necessity" (Hardin, 1968)
Those enamoured by liberal democracy (in an idealistic way) are often guilty of incorrectly assuming that (and I think I've said this a few times) contained within the slurry of half-arsed ideas that our information-overloaded society offers, there is at least one idea that if enough people believe it then it must be true.
Peter Cresswell who runs a NZ blog site called Not PC provides a good example of greed oriented fuckwittery and complete and utter lack of foresight, let alone "I want to leave a place that my kids or grand kids will want to live in".
Cresswell thinks suburban sprawl is a good thing! Cresswell opposes anyone and anything that seeks to slow development and growth in favour of "leaving it to the markets" - in other words leaving it to the greedy fucks that will turn the world into a shoebox apartment for a fast buck.
When people like Cresswell get his way, we simply decrease the amount of time between now and when we are all living in a shithole. If Cresswell had his way we'd do stupid things like slice up millions of hectares of currently productive farmland so him and his plonker libertarian mates can have (totally unproductive but esthetically pleasing) lifestyle blocks complete with Ford Explorers and McMansions - of course the poor people can all live an hours happy driving away from the city in exurbian ghettos.
Anyway, in response to his blog titled Countrywide Zoning is Unwanted Government Control I posted this comment.
Peter, I often read your blog, and I often think that instead of actually thinking about things you simply regurgitate misled dogma and flawed idealism. This article/blog entry and your recent obsession with endless economic growth predicated upon urban sprawl and the bloated property market confirms my observations.Interestingly there is an increasing group in society, those that anguish over such things as population growth but are loathe to relinquish any of the privileges that they now enjoy. Furthermore contrary to the techno-hubris that we've assumed over the last century, the set of "no technical solution problems" contains members. We do not, as libertarian economists would have you believe live on a planet that can sustain endless economic growth, or expansionism. If the people of china wish to live like all of us in the west we'd need about another 3 or 4 planets worth of resouces.
There are limits on a finite planet and I expect the consequences of pushing those limits are beginning to manifest themselves now. Recommended research, if you can be bothered (why would you, we live in a democracy, if enough people believe something it must be true aye.) The Tragedy of The Commons. (as a starting point). Suburban sprawl and growth is part of the problem. Not the solution. You can't solve the problem of depleting resources by depleting them at a faster rate.
Update 1. 22-11-05
As an epilogue to this, PC's mates compelled to illogically support their brain-dead leader continued for some time to regurgitate the "Suburban sprawl is good!" message under the weak guise of "choice". One respondant claimed "the law of abundance" to be a law of nature, see my first paragraph above for a response to that.
Actually what's going on here is the vehement defence of a living arrangement and economy that is increasingly disconnected with reality. Hardin (1968) argues
The difference between "choice" and a 6 and a half billion people owning a quarter acre block in suburbia seems to be something Peter Cresswell and his mates either haven't or don't want to consider, the latter a clear illustration of Hardin's point, the prior simple ignorance."natural selection favours the forces of pyschological denial. The individual benefits as an individual from his ability to deny the truth even though society as a whole, of which he is a part, suffers"
If Cresswell and his obese on consumerism junkies ("because it's my choice") wish to continue with their plans for suburban sprawl then we'd better start sending troops to the middle east since the remaining (2/3's of the world's oil supply) is there and that's what it takes to sustain suburbia.
Tuesday, November 08, 2005
Peak Oil: An Austere Future
by Steve McKinlay
This article was published by the NZ Futures Trust in their e-Future Times Journal, Volume 15, September 2005.
I recently noted the dead link - NZ Futures Trust have reorganised their web site. I have republished the article below.
Increasingly commanding world attention is the phenomenon of Peak Oil. Peak oil is the point at which the maximum production of oil is attained after which a gradual irrecoverable decline follows. Peak oil has enormous implications for modern industrial society, both economically and socially. The following article examines our society; it’s dependence on oil and the forthcoming peak.
The Age of Reason
The fundamental promise at the dawn of the 20th century was the democratisation of modernity. The ideology of modernity prescribes rational thought as the ultimate liberator informing us to the truth about the world and ourselves. The road to progress therefore would be one built upon true knowledge, knowledge informed by science and logic, free from superstition, dogma and ignorance. And lets face it science mostly delivered, not only did it put men on the moon but it laid the foundation for our modern all-mod-cons way of life. The last century, upon the foundations of science and logic was one characterised by great technological advancement. We have become accustomed to the belief consequently that there are technological solutions to all our problems, we like to call this human ingenuity.
However the 21st century dawns under the spectre of an ever-increasing pluralism. Science and rationalism is in decline in favour of baneful individualism.
The sciences popularly perceived as irrelevant by students and laymen are retreating into their respective labs and philosophy departments, in favour of a kind of pop-cultural post-modern relativism. In the wake of this retreat we are left with all manner of popular worldviews that by and large freely evolve within the democratized slurry of our suburban malls, determined by our SUV driven, recreational shopping lifestyles, mostly devoid of any rationality, selected for consumption by a corporatist media intent and dependant upon perpetuating a myth.
The myth itself is one of the most fundamental views to transpire within modern consumerist society. Supported by the mantras of neo-classic and supply-side economic theory and in conjunction with our newfound technological hubris emerges the unquestionable assumptions of perpetual growth and “endless substitution”. Essentially the myth embodies the faith that the “market” will always provide. New products and resources are always superseded by something cheaper, more efficient and much better than the previous. To economists natural resources are no exception to the rule. The market of course dictates, as productivity increases, prices drop, production increases, more exchange occurs and living standards rise for all involved. And on and on and on it goes, forever.
Neo-classic economic theory is the supposed perpetual motion machine of the globalised mass consumer fantasy, predicated by endless economic growth compounding at 3% or so a year, creating wealth via fractional reserve banking and fiat currency. Tomorrow’s expansion is the put-up collateral for today’s debt. According to modern economics there are no limits to this growth. Forget the sciences, unquestionable faith in technological progress will allow us to use fewer and fewer resources for greater and greater returns. The reductio ad absurdum of this bizarre form of reasoning is that technology will eventually enable us to use zero resources for infinite returns.
Both science and reason inform us otherwise. We only need consult the laws of thermodynamics in order to inform ourselves that any kind of perpetual motion machine is impossible. Energy is the capacity to do work. No energy equals no work. Thus our entire global economy much to the chagrin of voodoo economists is 100% dependant upon energy. In order to grow economically we must also grow our energy consumption.
It may be offensive to futurists, technologists and economists but the laws of thermodynamics inculcate that neither capital, labour nor technology can create energy. We cannot convert our supposed intelligence, our ability to find novel technological solutions into energy. Instead available energy must be expended in order to transform matter (e.g., oil, natural gas etc.) or to divert an existing energy flow (e.g., water, wind etc.) into more available energy. Furthermore energy resources must produce more energy than they consume. It would never be economic to expend more than one barrel of oil to extract one barrel of oil.
Oil
No other energy source comes anywhere near the level of convenience or economic value of oil. For this reason alone oil has become the most important form of energy we use. About 40% of all energy use on the planet comes from oil, it has been estimated that 95% of all transportation is powered by oil. The substance oozes all over modern civilisation. Not only is it responsible for plastics and petrol, but oil (and its close cousin natural gas) is critical to our food supply in the form of fertilisers, pesticides and irrigation. Mass agriculture is wholly dependant upon oil and natural gas. Take it away and we are faced an immediate return to small-scale organic gardening. Sounds like a romantic ideal but the infrastructure is not yet in place to implement in such a way that we could all feed ourselves. A change over will take time and while oil is cheap mass agriculture wins hands down on economies of scale.
All respected geologists and scientists agree that oil is a non-renewable resource the global demand for which is growing at a rate much faster than new supplies are being found. It is understood that the total world discovery of oil in 2004 was about 7Gb (billion barrels), approximately 2Gb of which were deepwater finds. However in 2004 we consumed about 30Gb thus we are burning between 4 and 5 barrels of oil for every one found. What is more interesting is that the cost of exploration in 2004 exceeded the net present value of the discoveries in absolute terms,[1] clear evidence for the claim that the cheap oil is already gone.
This trend is not new. Oil discovery across the globe peaked during 1965.
Since then discovery, on average has declined every year. Several groups of scientists, including oil exploration geologists and some brave financial analysts are now predicting a world-wide oil production peak between now and the end of the decade. “Peak Oil” as it is termed is used to describe the point at which half of all the oil in a particular region has been extracted after which a period of irrecoverable decline sets in until it is no longer possible to extract oil efficiently.
The term peak oil is derived from the graphed curve that can be observed when tracking all oil production. In 1956 Shell Oil geologist M. King Hubbert hypothesised that oil production roughly followed a bell shaped curve. He used this to successfully predict the peak in US oil in 1971.
Recent work by Dr Colin Campbell[2] suggests global peak oil this decade based on the Hubbert curve model (see fig1) the most probable year according to Campbell is expected to be 2007. These claims are not based upon any conspiracy theory, nor on popular belief, culture or economic dogma but on hard empirical evidence. Peak oil is a geological phenomenon immune to evolving relativistic views of politics and economics. The only point speculative in regard to peak oil is not if peak oil will occur but when. Regional peaks and subsequent decline in oil production particular in the non-OPEC states serve to support the peak oil model.
For example peak production modelling was used to accurately predict the US, North Sea, Norway and, Denmark amongst many others. It follows that the global peak can be predicted with some accuracy using the Hubbert/Campbell model.
Economic Growth / Supply and Demand
Western democracies have enjoyed unprecedented economic growth and the subsequent rise in living standards since the end of the Second World War. Suburban life, a 4WD in the driveway, mobile phones, holiday homes, web-surfing, LCD screen TV’s, DVDs, Playstations, iPods, and recreational shopping during the weekend are the reality if not the desire of many of us. As China, India and other transitioning economies race to industrialise their desire turns into economic demand. They want what we have. The growth rate for motor vehicle sales alone in China is around 50%. On the industrial front China needs to build in the vicinity of 60 power plants a year, each the equivalent of the Clutha dam to keep up with exploding electricity demand. If you want to grow a developing economy you need to grow your electricity sector.
According to International Energy Agency analysis the world currently consumes about 84 Million Barrels of oil per day (Mbd). Andrew McKillop[3] and Colin Campbell amongst others suggest absolute maximum oil production for the planet could not exceed around 90Mbd give or take a couple of million barrels. We have mentioned already that many of the non-OPEC nations are already in decline and as oil production follows a kind of bell shaped curve we are losing to depletion production from many of these wells.
Interestingly world demand in 2001 was around 76Mbd thus we have seen a growth rate of 8Mbd within 3 years. If we extrapolate the current growth trend factoring in some growth in demand we end up with a plausible consumption figure of around 94Mbd by 2008. It is exceedingly unlikely that this production capacity exists. Saudi Arabia the owner of the largest oil fields on the planet has admitted in numerous articles lately that they are pushing the limits of production. OPEC’s president Purnomo Yusgiantoro is on record as saying last year “there is no more supply.” OPEC is pumping at near capacity. It is entirely within the realms of reason that we will see structural supply deficits within a year or two.
If indeed the kind of oil required to meet exploding demand beyond a year or two is to materialise we first need to find oil in quantities larger than we are currently consuming, develop it and bring it into production. Even if we ignore current security concerns around the Middle East region this will be no mean feat, it can take several years to bring discovered oil into production. The amount of oil we are talking about, 8Mbd (required by 2008) is about the same as the entire production of Saudi Arabia. The vast bulk of Saudi oil was discovered during the 1940s and 50s. Before Iraq was liberated it produced about 2.2Mbd. Today a large oil field find is one that proves reserves of about 500 million barrels – about a weeks supply on the global market. Short of a miracle, a discovery of another Saudi Arabia, global oil supply will comfortably meet demand for a year or two at most. Beyond 2008 the picture grows even bleaker.
The Global Picture
Bush and Blair have been making plans for the day when oil production peaks, by seeking to secure the reserves of other nations.
George Monbiot, “Bottom of the Barrel”, The Guardian, Dec 2, 2003
Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil.
US deputy defence secretary, Paul Wolfowitz, June 1, 2003
The remainder of the world’s oil is coalescing around the OPEC nations of the Middle East. Previously the swing producer able to control the global price at levels around US$20bbl OPEC controls almost 40 percent of the world’s oil contrastingly the majority of the non-OPEC nations are now in decline. The United States is the largest consumer of oil on the planet but its reserves have been in decline since 1971. Increasingly the US is reliant upon imported oil, it imports over half of what it uses. Given that the entire global economy the US notwithstanding, is reliant upon oil to ensure future economic growth oil is an extremely strategic commodity.
The Bush-Cheney argument that the American way of life is not negotiable predicates the US’s presence in the Middle East. America’s willingness to use military force to control oil supplies goes back to the 1970’s when it threatened to seize Saudis and Kuwaiti oil fields during the Arab oil embargo. The Carter doctrine of the 1979 clearly indicated that the US would use the military to ensure access to Middle East oil[4].
Although it would be naive to argue that the Iraq invasion was solely about securing Iraqi oil there are certainly a variety of extant factors together, which make Iraq an obvious target of the US. The perceived or real threat (it doesn’t really matter, the American people were convinced) of terrorist activity within the area (although not previously in Iraq) is relevant in the sense that the war on terror at it’s heart is really a war about resources. The possibility of future resource induced conflicts and or destabilisation within the area as energy becomes scarcer made it desirable for the US to act first. These factors put the US in a relatively comfortable position having established a presence in this area.
Competition for resources will intensify as peak oil becomes self-evident. There is increased likelihood that conflict could appear within Venezuela, Iran, and African nations for example. Richard Heinberg argues that the 21st century has ushered in the final geopolitical struggle of the industrial age - the struggle for control of Eurasia and its energy sources[5]. If he is correct the Bush-Cheney claim that we won’t see the end of the war on “terrorism” in our lifetimes are sure to have secondary effects starting with economic hardship. Very recently George W. Bush announced massive domestic funding cuts from law enforcement to transit budgets, wastewater treatment, education, social programs, housing and medicare as national wealth is increasingly diverted into military budgets.
The Rickshaw Economy?
Whether the year of peak oil is 2007 or a few years later, or indeed if as some suggest that we are already past peak the point to be taken is that we are entering the second half of the oil age. This will be characterised by the gradual decline of oil and gas at around 3% per annum. Thus by 2020 production of all liquid hydro-carbons will have fallen to the levels of 1990[6]. Although this sounds rather benign it will have catastrophic consequences for our financial system that depends upon perpetual economic growth. Given that our present economy relies upon oil driven mobility provided by petrol and diesel combustion engines for which there appears no immediate alternative it would be foolish to rely upon the unscientific perpetual growth axiom for which there is no empirical evidence. As we continue depleting the supply of relatively cheap conventional oil at an astounding rate of 80 odd million barrels per day the world continues to economic and technological reliance upon oil. As long as the supply continues to meet the demand, for the next year or two, the world economy will continue to increase the dependence and no incentive to develop alternatives will emerge. Until the supply falters, at which point we will be technologically unprepared for the decline. Once the peak does occur the price for a commodity for which demand now supplants supply will result inevitably in lower or negative growth in demand. It follows by implication that lower or negative growth in the world economy will occur. Ironically the requirement for investment in alternatives will only occur at the time when economic recessions are already beginning to bite.
In 1976 M. King Hubbert (1903-1989) concluded his paper Exponential Growth
as a Transient Phenomenon in Human History with the following observations:
It appears therefore that one of the foremost problems confronting humanity today is how to make the transition from the precarious state that we are now in to this optimum future state by a least catastrophic progression. Our principal impediments at present are neither lack of energy or material resources nor of essential physical and biological knowledge. Our principal constraints are cultural. During the last two centuries we have known nothing but exponential growth and in parallel we have evolved what amounts to an exponential-growth culture, a culture so heavily dependent upon the continuance of exponential growth for its stability that it is incapable of reckoning with problems of nongrowth. Since the problems confronting us are not intrinsically insoluble, it behooves us, while there is yet time, to begin a serious examination of the nature of our cultural constraints and of the cultural adjustments necessary to permit us to deal effectively with the problems rapidly arising. Provided this can be done before unmanageable crises arise, there is promise that we could be on the threshold of achieving one of the greatest intellectual and cultural advances in human history.
It is clear that our window of opportunity is being rapidly drawn closed. Peak oil detractors are often heard quoting the following, “the stone age didn’t end because we ran out of stones, likewise the oil age won’t end because we will run out of oil”. It might be timely to remind such critics that the transition from tools such as axes and arrowheads made of stone to more effective weapons made from iron and bronze occurred over several centuries. We are looking to transition a planet of 8 billion people, a global economy based on cheap abundant oil technologies, inherently committed to continued economic growth for stability to one that is dependant on some other yet to be developed (or even identified) technology. All this must occur within a few short decades.
To the vast majority of us conditioned by an extended period of prosperity this is not welcome news. Peak oil will vastly change our current political, social and cultural landscapes and there seems to be no path forward that doesn't involve immeasurable stress. Changes need to begin immediately, however before any change can take place widespread acknowledgement of the looming crisis is required, presently this is the problem we seem to be grappling with.
[1] ASPO Newsletter 50 Feb 2005.
[2] Colin Campbell is the founder of the Association for the Study of Peak Oil and Gas, http://www.peakoil.net/
[3] Andrew McKillop is an energy economist and consultant who recently edited a book for Pluto Books, ISBN 0745320929, title 'The Final Energy Crisis' including articles by Colin Campbell and Edward R D Goldsmith. He has held posts in national, international and supranational (Euro Commission) energy, and energy policy divisions and agencies.
[4] Heinberg. R., (2004), Powerdown: Options and Actions for a Post Carbon World.
[5] http://www.museletter.com/archive/132.html
[6] Colin Campbell., ASPO Newsletter 50, Feb 2005
by Steve McKinlay
This article was published by the NZ Futures Trust in their e-Future Times Journal, Volume 15, September 2005.
I recently noted the dead link - NZ Futures Trust have reorganised their web site. I have republished the article below.
Peak Oil: Ramifications for NZ in the 21st Century
By Steve McKinlay
June 2005
By Steve McKinlay
June 2005
Increasingly commanding world attention is the phenomenon of Peak Oil. Peak oil is the point at which the maximum production of oil is attained after which a gradual irrecoverable decline follows. Peak oil has enormous implications for modern industrial society, both economically and socially. The following article examines our society; it’s dependence on oil and the forthcoming peak.
The Age of Reason
The fundamental promise at the dawn of the 20th century was the democratisation of modernity. The ideology of modernity prescribes rational thought as the ultimate liberator informing us to the truth about the world and ourselves. The road to progress therefore would be one built upon true knowledge, knowledge informed by science and logic, free from superstition, dogma and ignorance. And lets face it science mostly delivered, not only did it put men on the moon but it laid the foundation for our modern all-mod-cons way of life. The last century, upon the foundations of science and logic was one characterised by great technological advancement. We have become accustomed to the belief consequently that there are technological solutions to all our problems, we like to call this human ingenuity.
However the 21st century dawns under the spectre of an ever-increasing pluralism. Science and rationalism is in decline in favour of baneful individualism.
The sciences popularly perceived as irrelevant by students and laymen are retreating into their respective labs and philosophy departments, in favour of a kind of pop-cultural post-modern relativism. In the wake of this retreat we are left with all manner of popular worldviews that by and large freely evolve within the democratized slurry of our suburban malls, determined by our SUV driven, recreational shopping lifestyles, mostly devoid of any rationality, selected for consumption by a corporatist media intent and dependant upon perpetuating a myth.
The myth itself is one of the most fundamental views to transpire within modern consumerist society. Supported by the mantras of neo-classic and supply-side economic theory and in conjunction with our newfound technological hubris emerges the unquestionable assumptions of perpetual growth and “endless substitution”. Essentially the myth embodies the faith that the “market” will always provide. New products and resources are always superseded by something cheaper, more efficient and much better than the previous. To economists natural resources are no exception to the rule. The market of course dictates, as productivity increases, prices drop, production increases, more exchange occurs and living standards rise for all involved. And on and on and on it goes, forever.
Neo-classic economic theory is the supposed perpetual motion machine of the globalised mass consumer fantasy, predicated by endless economic growth compounding at 3% or so a year, creating wealth via fractional reserve banking and fiat currency. Tomorrow’s expansion is the put-up collateral for today’s debt. According to modern economics there are no limits to this growth. Forget the sciences, unquestionable faith in technological progress will allow us to use fewer and fewer resources for greater and greater returns. The reductio ad absurdum of this bizarre form of reasoning is that technology will eventually enable us to use zero resources for infinite returns.
Both science and reason inform us otherwise. We only need consult the laws of thermodynamics in order to inform ourselves that any kind of perpetual motion machine is impossible. Energy is the capacity to do work. No energy equals no work. Thus our entire global economy much to the chagrin of voodoo economists is 100% dependant upon energy. In order to grow economically we must also grow our energy consumption.
It may be offensive to futurists, technologists and economists but the laws of thermodynamics inculcate that neither capital, labour nor technology can create energy. We cannot convert our supposed intelligence, our ability to find novel technological solutions into energy. Instead available energy must be expended in order to transform matter (e.g., oil, natural gas etc.) or to divert an existing energy flow (e.g., water, wind etc.) into more available energy. Furthermore energy resources must produce more energy than they consume. It would never be economic to expend more than one barrel of oil to extract one barrel of oil.
Oil
No other energy source comes anywhere near the level of convenience or economic value of oil. For this reason alone oil has become the most important form of energy we use. About 40% of all energy use on the planet comes from oil, it has been estimated that 95% of all transportation is powered by oil. The substance oozes all over modern civilisation. Not only is it responsible for plastics and petrol, but oil (and its close cousin natural gas) is critical to our food supply in the form of fertilisers, pesticides and irrigation. Mass agriculture is wholly dependant upon oil and natural gas. Take it away and we are faced an immediate return to small-scale organic gardening. Sounds like a romantic ideal but the infrastructure is not yet in place to implement in such a way that we could all feed ourselves. A change over will take time and while oil is cheap mass agriculture wins hands down on economies of scale.
All respected geologists and scientists agree that oil is a non-renewable resource the global demand for which is growing at a rate much faster than new supplies are being found. It is understood that the total world discovery of oil in 2004 was about 7Gb (billion barrels), approximately 2Gb of which were deepwater finds. However in 2004 we consumed about 30Gb thus we are burning between 4 and 5 barrels of oil for every one found. What is more interesting is that the cost of exploration in 2004 exceeded the net present value of the discoveries in absolute terms,[1] clear evidence for the claim that the cheap oil is already gone.
This trend is not new. Oil discovery across the globe peaked during 1965.
Since then discovery, on average has declined every year. Several groups of scientists, including oil exploration geologists and some brave financial analysts are now predicting a world-wide oil production peak between now and the end of the decade. “Peak Oil” as it is termed is used to describe the point at which half of all the oil in a particular region has been extracted after which a period of irrecoverable decline sets in until it is no longer possible to extract oil efficiently.
The term peak oil is derived from the graphed curve that can be observed when tracking all oil production. In 1956 Shell Oil geologist M. King Hubbert hypothesised that oil production roughly followed a bell shaped curve. He used this to successfully predict the peak in US oil in 1971.
Recent work by Dr Colin Campbell[2] suggests global peak oil this decade based on the Hubbert curve model (see fig1) the most probable year according to Campbell is expected to be 2007. These claims are not based upon any conspiracy theory, nor on popular belief, culture or economic dogma but on hard empirical evidence. Peak oil is a geological phenomenon immune to evolving relativistic views of politics and economics. The only point speculative in regard to peak oil is not if peak oil will occur but when. Regional peaks and subsequent decline in oil production particular in the non-OPEC states serve to support the peak oil model.
For example peak production modelling was used to accurately predict the US, North Sea, Norway and, Denmark amongst many others. It follows that the global peak can be predicted with some accuracy using the Hubbert/Campbell model.
Economic Growth / Supply and Demand
Western democracies have enjoyed unprecedented economic growth and the subsequent rise in living standards since the end of the Second World War. Suburban life, a 4WD in the driveway, mobile phones, holiday homes, web-surfing, LCD screen TV’s, DVDs, Playstations, iPods, and recreational shopping during the weekend are the reality if not the desire of many of us. As China, India and other transitioning economies race to industrialise their desire turns into economic demand. They want what we have. The growth rate for motor vehicle sales alone in China is around 50%. On the industrial front China needs to build in the vicinity of 60 power plants a year, each the equivalent of the Clutha dam to keep up with exploding electricity demand. If you want to grow a developing economy you need to grow your electricity sector.
According to International Energy Agency analysis the world currently consumes about 84 Million Barrels of oil per day (Mbd). Andrew McKillop[3] and Colin Campbell amongst others suggest absolute maximum oil production for the planet could not exceed around 90Mbd give or take a couple of million barrels. We have mentioned already that many of the non-OPEC nations are already in decline and as oil production follows a kind of bell shaped curve we are losing to depletion production from many of these wells.
Interestingly world demand in 2001 was around 76Mbd thus we have seen a growth rate of 8Mbd within 3 years. If we extrapolate the current growth trend factoring in some growth in demand we end up with a plausible consumption figure of around 94Mbd by 2008. It is exceedingly unlikely that this production capacity exists. Saudi Arabia the owner of the largest oil fields on the planet has admitted in numerous articles lately that they are pushing the limits of production. OPEC’s president Purnomo Yusgiantoro is on record as saying last year “there is no more supply.” OPEC is pumping at near capacity. It is entirely within the realms of reason that we will see structural supply deficits within a year or two.
If indeed the kind of oil required to meet exploding demand beyond a year or two is to materialise we first need to find oil in quantities larger than we are currently consuming, develop it and bring it into production. Even if we ignore current security concerns around the Middle East region this will be no mean feat, it can take several years to bring discovered oil into production. The amount of oil we are talking about, 8Mbd (required by 2008) is about the same as the entire production of Saudi Arabia. The vast bulk of Saudi oil was discovered during the 1940s and 50s. Before Iraq was liberated it produced about 2.2Mbd. Today a large oil field find is one that proves reserves of about 500 million barrels – about a weeks supply on the global market. Short of a miracle, a discovery of another Saudi Arabia, global oil supply will comfortably meet demand for a year or two at most. Beyond 2008 the picture grows even bleaker.
The Global Picture
Bush and Blair have been making plans for the day when oil production peaks, by seeking to secure the reserves of other nations.
George Monbiot, “Bottom of the Barrel”, The Guardian, Dec 2, 2003
Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil.
US deputy defence secretary, Paul Wolfowitz, June 1, 2003
The remainder of the world’s oil is coalescing around the OPEC nations of the Middle East. Previously the swing producer able to control the global price at levels around US$20bbl OPEC controls almost 40 percent of the world’s oil contrastingly the majority of the non-OPEC nations are now in decline. The United States is the largest consumer of oil on the planet but its reserves have been in decline since 1971. Increasingly the US is reliant upon imported oil, it imports over half of what it uses. Given that the entire global economy the US notwithstanding, is reliant upon oil to ensure future economic growth oil is an extremely strategic commodity.
The Bush-Cheney argument that the American way of life is not negotiable predicates the US’s presence in the Middle East. America’s willingness to use military force to control oil supplies goes back to the 1970’s when it threatened to seize Saudis and Kuwaiti oil fields during the Arab oil embargo. The Carter doctrine of the 1979 clearly indicated that the US would use the military to ensure access to Middle East oil[4].
Although it would be naive to argue that the Iraq invasion was solely about securing Iraqi oil there are certainly a variety of extant factors together, which make Iraq an obvious target of the US. The perceived or real threat (it doesn’t really matter, the American people were convinced) of terrorist activity within the area (although not previously in Iraq) is relevant in the sense that the war on terror at it’s heart is really a war about resources. The possibility of future resource induced conflicts and or destabilisation within the area as energy becomes scarcer made it desirable for the US to act first. These factors put the US in a relatively comfortable position having established a presence in this area.
Competition for resources will intensify as peak oil becomes self-evident. There is increased likelihood that conflict could appear within Venezuela, Iran, and African nations for example. Richard Heinberg argues that the 21st century has ushered in the final geopolitical struggle of the industrial age - the struggle for control of Eurasia and its energy sources[5]. If he is correct the Bush-Cheney claim that we won’t see the end of the war on “terrorism” in our lifetimes are sure to have secondary effects starting with economic hardship. Very recently George W. Bush announced massive domestic funding cuts from law enforcement to transit budgets, wastewater treatment, education, social programs, housing and medicare as national wealth is increasingly diverted into military budgets.
The Rickshaw Economy?
Whether the year of peak oil is 2007 or a few years later, or indeed if as some suggest that we are already past peak the point to be taken is that we are entering the second half of the oil age. This will be characterised by the gradual decline of oil and gas at around 3% per annum. Thus by 2020 production of all liquid hydro-carbons will have fallen to the levels of 1990[6]. Although this sounds rather benign it will have catastrophic consequences for our financial system that depends upon perpetual economic growth. Given that our present economy relies upon oil driven mobility provided by petrol and diesel combustion engines for which there appears no immediate alternative it would be foolish to rely upon the unscientific perpetual growth axiom for which there is no empirical evidence. As we continue depleting the supply of relatively cheap conventional oil at an astounding rate of 80 odd million barrels per day the world continues to economic and technological reliance upon oil. As long as the supply continues to meet the demand, for the next year or two, the world economy will continue to increase the dependence and no incentive to develop alternatives will emerge. Until the supply falters, at which point we will be technologically unprepared for the decline. Once the peak does occur the price for a commodity for which demand now supplants supply will result inevitably in lower or negative growth in demand. It follows by implication that lower or negative growth in the world economy will occur. Ironically the requirement for investment in alternatives will only occur at the time when economic recessions are already beginning to bite.
In 1976 M. King Hubbert (1903-1989) concluded his paper Exponential Growth
as a Transient Phenomenon in Human History with the following observations:
It appears therefore that one of the foremost problems confronting humanity today is how to make the transition from the precarious state that we are now in to this optimum future state by a least catastrophic progression. Our principal impediments at present are neither lack of energy or material resources nor of essential physical and biological knowledge. Our principal constraints are cultural. During the last two centuries we have known nothing but exponential growth and in parallel we have evolved what amounts to an exponential-growth culture, a culture so heavily dependent upon the continuance of exponential growth for its stability that it is incapable of reckoning with problems of nongrowth. Since the problems confronting us are not intrinsically insoluble, it behooves us, while there is yet time, to begin a serious examination of the nature of our cultural constraints and of the cultural adjustments necessary to permit us to deal effectively with the problems rapidly arising. Provided this can be done before unmanageable crises arise, there is promise that we could be on the threshold of achieving one of the greatest intellectual and cultural advances in human history.
It is clear that our window of opportunity is being rapidly drawn closed. Peak oil detractors are often heard quoting the following, “the stone age didn’t end because we ran out of stones, likewise the oil age won’t end because we will run out of oil”. It might be timely to remind such critics that the transition from tools such as axes and arrowheads made of stone to more effective weapons made from iron and bronze occurred over several centuries. We are looking to transition a planet of 8 billion people, a global economy based on cheap abundant oil technologies, inherently committed to continued economic growth for stability to one that is dependant on some other yet to be developed (or even identified) technology. All this must occur within a few short decades.
To the vast majority of us conditioned by an extended period of prosperity this is not welcome news. Peak oil will vastly change our current political, social and cultural landscapes and there seems to be no path forward that doesn't involve immeasurable stress. Changes need to begin immediately, however before any change can take place widespread acknowledgement of the looming crisis is required, presently this is the problem we seem to be grappling with.
[1] ASPO Newsletter 50 Feb 2005.
[2] Colin Campbell is the founder of the Association for the Study of Peak Oil and Gas, http://www.peakoil.net/
[3] Andrew McKillop is an energy economist and consultant who recently edited a book for Pluto Books, ISBN 0745320929, title 'The Final Energy Crisis' including articles by Colin Campbell and Edward R D Goldsmith. He has held posts in national, international and supranational (Euro Commission) energy, and energy policy divisions and agencies.
[4] Heinberg. R., (2004), Powerdown: Options and Actions for a Post Carbon World.
[5] http://www.museletter.com/archive/132.html
[6] Colin Campbell., ASPO Newsletter 50, Feb 2005
Monday, November 07, 2005
Monday, October 31, 2005
The Second Coming of Jesus Christ and Bird Flu
...or, don't believe the hype, it's a sequel
The great thing about a blog site is that you get to make predictions which if you are correct, give you the ability to point everyone to the archived blog saying "told you so".
Here's my prediction. The so called bird flu, the chicken disease that has killed a wopping 59 people in the world, the disease that cannot (and will not) be transmitted from human to human, but is going to sweep the world. The chances of the bird flu becoming an international pandemic killing seqdrillions of us, crippling world economies, causing the closure of international borders and generally creating fear, panic and loathing not seen since the last witch was burnt or since we routinely expelled lepers from our midst, are negligible. This is not to say some variety of "the flu" will emerge, but this is extremely unlikely to have any of the virulence of the bird flu, I'll explain why in a minute.
Given the mass hysteria over this issue one must reasonably infer that the globalised project of dumbing down society to the point where it collectively gobbles up any and all shite that the media thrusts down its throat is all but complete. Makes you wonder if they've put something in the water. We have become as compliant as ewes happily marching off to braindeath by stupidity to the beat of media and authoritarian hype.
I have previously argued that science, rationality and critical thought seem not merely out of fashion but actively discouraged by proxy. In an almost Orwellian sense we favour a pernicious, postmodern, democratic approach to normative bullshit generation, the festering ground is suburbia, the genesis the six o'clock news. Prepare for certain death.
If enough people believe it, or if we read it in the paper it must be true. Never mind the fact that this virus has to first mutate (um, that means "evolve" folks) into a form that can be passed from person to person. One can't help but wonder how many individuals enamoured by "Intelligent Design" as an alternative to Evolutionary Theory have their medicine cupboards chocka with Tamiflu. As if the almighty himself has placed this virus here, just to smote us all down.
The twisted ethics of response to current mass panic about bird flu is equally dubious. A small company in Wellington is now selling survival kits for 500 bucks, cashing in on the bovine stupidity of a percentage of the population with IQ's close to their School Certificate maths marks. How much can a few of cans of baked beans, a box of panadol and some bottles of water cost. Apparently you can get the deluxe kit, it contains gourmet meals and a bottle of Lindaur Special Reserve - at least you'll enjoy the end of the world.
You get a sense of dejavue, I've been dreaming of the US suddenly finding weapons of mass destruction in Iraq. And I must admit, I myself profitted somewhat as a result of the Armageddon that was to follow the New Years Eve party of 1999 although I certainly didn't sell overpriced survival kits. I wonder if I'll be around for the second coming of Jesus Christ, and who I wonder will get the television rights. Flak jackets and fire extinguishers are bound to be hot commodities given the predicted amount of brimstone and flames.
Of course the whole scenario has replaced Iraq as the topic of choice for front page US newsprint. Interesting given Donald Rumsfeld, Secretary of Defence was a previous Chairman of Gilead Sciences, company that developed and owns the rights to Tamiflu, the only supposed "cure" for bird flu. Of course Roche who manufacture and market Tamiflu on behalf of Gilead can't supply enough to freaked out risk averse westerners around the globe - ripe for the plucking.
Currently the waiting list for the snake oil, (ah-hem Tamiflu) is about 3 months, of course the pandemic could have already swept through the globe killing trillions by then. If you'd rather be stacking bodies as opposed to being stacked yourself you could try eBay where Tamiflu is selling for up to NZ$260 a course.
...or, don't believe the hype, it's a sequel
The great thing about a blog site is that you get to make predictions which if you are correct, give you the ability to point everyone to the archived blog saying "told you so".
Here's my prediction. The so called bird flu, the chicken disease that has killed a wopping 59 people in the world, the disease that cannot (and will not) be transmitted from human to human, but is going to sweep the world. The chances of the bird flu becoming an international pandemic killing seqdrillions of us, crippling world economies, causing the closure of international borders and generally creating fear, panic and loathing not seen since the last witch was burnt or since we routinely expelled lepers from our midst, are negligible. This is not to say some variety of "the flu" will emerge, but this is extremely unlikely to have any of the virulence of the bird flu, I'll explain why in a minute.
Given the mass hysteria over this issue one must reasonably infer that the globalised project of dumbing down society to the point where it collectively gobbles up any and all shite that the media thrusts down its throat is all but complete. Makes you wonder if they've put something in the water. We have become as compliant as ewes happily marching off to braindeath by stupidity to the beat of media and authoritarian hype.
I have previously argued that science, rationality and critical thought seem not merely out of fashion but actively discouraged by proxy. In an almost Orwellian sense we favour a pernicious, postmodern, democratic approach to normative bullshit generation, the festering ground is suburbia, the genesis the six o'clock news. Prepare for certain death.
If enough people believe it, or if we read it in the paper it must be true. Never mind the fact that this virus has to first mutate (um, that means "evolve" folks) into a form that can be passed from person to person. One can't help but wonder how many individuals enamoured by "Intelligent Design" as an alternative to Evolutionary Theory have their medicine cupboards chocka with Tamiflu. As if the almighty himself has placed this virus here, just to smote us all down.
The twisted ethics of response to current mass panic about bird flu is equally dubious. A small company in Wellington is now selling survival kits for 500 bucks, cashing in on the bovine stupidity of a percentage of the population with IQ's close to their School Certificate maths marks. How much can a few of cans of baked beans, a box of panadol and some bottles of water cost. Apparently you can get the deluxe kit, it contains gourmet meals and a bottle of Lindaur Special Reserve - at least you'll enjoy the end of the world.
You get a sense of dejavue, I've been dreaming of the US suddenly finding weapons of mass destruction in Iraq. And I must admit, I myself profitted somewhat as a result of the Armageddon that was to follow the New Years Eve party of 1999 although I certainly didn't sell overpriced survival kits. I wonder if I'll be around for the second coming of Jesus Christ, and who I wonder will get the television rights. Flak jackets and fire extinguishers are bound to be hot commodities given the predicted amount of brimstone and flames.
Of course the whole scenario has replaced Iraq as the topic of choice for front page US newsprint. Interesting given Donald Rumsfeld, Secretary of Defence was a previous Chairman of Gilead Sciences, company that developed and owns the rights to Tamiflu, the only supposed "cure" for bird flu. Of course Roche who manufacture and market Tamiflu on behalf of Gilead can't supply enough to freaked out risk averse westerners around the globe - ripe for the plucking.
Currently the waiting list for the snake oil, (ah-hem Tamiflu) is about 3 months, of course the pandemic could have already swept through the globe killing trillions by then. If you'd rather be stacking bodies as opposed to being stacked yourself you could try eBay where Tamiflu is selling for up to NZ$260 a course.
Getting in on the act is the night in shining armour, the Risk Management Society of New Zealand, seemingly obsessed with Bird Flu busily publishing press releases I suppose they've found their mission, yet they've never heard of Peak Oil a real and tangible threat to our society and economy. A bunch of concerned middle class men in suits, accountants, lawyers and project managers are now telling us how we ought to combat a nonexistent pandemic. (reminds me of the "corporate" board of directors of Seatoun School who intelligently banned a lunch time chrisitian kids club, to a wannabe academic like myself the worrying words ring in my ears "I work in the real world mate, I know better" )
I want to finish with some rational comments on the evolution of Bird Flu. We must keep in mind that currently there is no (or very little) evidence to suggest that Bird Flu can move between human hosts, furthermore the virulence of the virus amongst bird (chicken) hosts is extremely high, that is it quickly immobilises (hospitalises) then kills it's host. The correlation between transmittability and virulence is important. For bird flu to become a pandemic amongst humans it first must mutate to a form that is easily transmittable, the host needs to remain mobile so the virus can spread around for a pandemic to emerge. It should be noted that a highly virulent virus (such as the current bird flu which of course cannot be transmitted between humans) kills it's host faster thereby accelerating it's own demise and reducing the time available for transmission.
A successful virus is one that is highly infectious but allows it's host to live as long as possible. Viruses that are highly virulent often quickly burn themselves out when hosts die. Thus less virulent forms of the virus will be selected for after initial localised outbreaks. My guess is that the correlation between transmissability and virulence will be negative. That is, the bird flu if ever it mutates into a form that can be transmitted from human to human host and thus emerges with pandemic characteristics there will be a significant reduction in the virulence of the virus. Very sick people will become immobilised, hospitalised and isolated. Lesser forms of the virus, which don't immobilise and hospitalise patients will quickly move through the population, those catching it will survive and develop antibody immunity.
There are more important things to worry about than bird flu. Hopefully in a few weeks or months I'll point those that need pointing, to this archived blog entry and say, told you so.
Cheers
Steve
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