Nicky Hager: Late-Capitalisms True Punk Rocker
Published on 1st Dec on Scoop

The fetish we call “freedom of speech” is resolutely defended in particular, we note, by the liberal right. Yet this creates a very uneasy tension. The pretence of the rational, utilitarian individual, very much aware of how things really are is contrasted heavily against the embodiment of the renounced belief in the fetish. We the public readily and eagerly (pretend to) accept the reality regurgitated weekly in the tabloid (and mainstream) press – a self-increasing spiral of production which perpetuates the very market it is responsible for creating, generating in the process of all manner of titillating, facile shite that many claim, we have the “right to know” – no matter how distasteful it is.

Hager playing the NZ media like Nintendo, is NZs answer to Malcolm McLaren, a rude, brazen punk with little regard for the public, politicians, the media or the truth. According to McLaren, “Stealing things is a glorious occupation, particularly in the art world”. Clearly we observe Hager at the peak of his art form, it’s hard not to admire his gall. The creation of a narrative that can topple political parties, must have the marketing gurus in a right tiss. In a world where the public gobble up any and all debris dished up to them by the braindead media - we deserve Hager, we need him and, we created him.

We live within an era of ambiguity between surplus-value and surplus-enjoyment. At the apogee of post-industrialism, a directionless society generates and consumes its own myths bringing forth into existence Marx’s vision of late capitalistic production – production creates the need for the consumption of the products it creates. Nicky Hager embodies this irony of capitalism. It’s hypocritical of those individuals who would enjoy the spoils of the fetish of freedom of speech, the West’s most overrated idea, whilst sneering at Hager. The great irony of capitalism, predicated on freedom, is that its most adherent proponents compulsively re-enslave themselves to its spoils. (cp. US’s entrenchment in a war against the "theft of enjoyment"). One can't help but wonder at the intellectual moralising of those that worship this fiasco. It's called freedom people, and it has you in chains.

In respect of Truth, it is irrelevant. Truth isn’t what Hager is about, Truth isn’t what anything is about. Truth is always balanced against the compulsion to enjoy. The stronger consumptive desire deprives us of autonomy turning us into clowns; it dresses us like babies and shoddier still – renders us manipulated, craving and drooling puppets.

The idiotic jouissance over Hager’s book is contra-posed against libertarian capitalistic ideals manifest in our so-called free “society of consumption”. We are obsessed with celebrity and scandal, we applaud individualism and freedom, we condemn governmentally imposed orders, yet seemingly the loudest cry of injustice regarding the Hager incident comes from the very group defending such idealism – no doubt because it has toppled their champion. I’m reminded of the old Marxist claim: capitalism unleashes a contradictory dynamic that it cannot contain. The ultimate obstacle to capitalism is capitalism itself.

Wednesday Morning Ramble, 29 Nov.

Seeking my muse, or in order to find inspiration to write about this I browsed PCs blog - the fatuous nature of a lot of his content usually irritates me enough to write, for that I guess he deserves thanks. Sure enough I found inspiration in footnotes titled Saturday Morning Ramble, 25 Nov. The informal blog begins with this rather facile truisim (paraphrased).

As the world becomes more technologically, scientifically and economically advanced ... what?

The overweening gleeful pride in this statement almost made me gag. And so an inspired rant begins.

I was reminded of my drive from Canberra to Sydney after meeting with my PhD supervisors in late August this year. Scrub and Australian gum trees skirt the road for hundreds of kilometres until you hit the hideous chain store corridors and seemingly endless "nappy valley" subdivision developments that is Sydneys 1.5 hour commute exurban sprawl. At one point, during the drive, I glanced at the road shoulder. The verge was littered with empty plastic and glass bottles, plastic bags, confectionary and fast food wrappings, all manner of trash. Kilometre after kilometre this continued. People (Australians), with absent regard, simply toss their rubbish out of their vehicles as they speed along at 110k towards Sydney, creating a roadside rubbish tip.

It makes me think this unrelenting march towards technological, scientific and economic utopia is ultimately a race to process as much natural resource turning it into eventual landfill (or highway verge) fodder as quickly and efficiently as possible - and this is supposed to be a good thing. I notice Walmart is entering the Indian market - in a bizzare kind of uroborian feedback cycle - the west sells the same shit back to those that produce it and steel the profit from the exercise.

Technological, scientific and economic advance blurs the senses, it distorts our sense of place within the world. It separates us and socialises away our connection with nature. The ultimately doomed project, apollonian idealism, is the driver of technological, scientific and economic advance - the re-birth of tragedy, hedonistic out of control desire surrenders to technological gadgets and the faux status symbols that fill the chain stores. It has turned us into clowns, made a circus of civil society, it dresses us like babys.

Western society knows by seeing. This perceptual vice is at the heart of our culture responsible for producing everything from monstrocities of titanic proportions to the electronic baubles and trinkets that consume us. Our attempts to distance ourselves from Darwinian waste and squalor drive us toward clown-like idiotic ritualised behaviour overtly emphasised in late-capitalisms consumptive society. Browsing with serious concern the endless array of crap we consume which don't actually meet or satisfy any actual need but indeed create the need they claim to satisfy.

The great irony of Capitalism, predicated on freedom is that its most adherent proponents compulsively re-enslave themselves to its spoils. (So much so that the US are now entrenched in a war against the "theft of enjoyment"). One can't help but wonder at the intellectual moralising of those that worship this fiasco. It's called freedom people, and it has you in chains.

New York Magic

I'd do anything to get to this.

If you are in New York - don't miss it, do not miss it! Weller truely captures the essence of a generation, from late 70s punk (The Jam), thru the 80s (Style Council) to the current rock revival with his solo work.

Black Out

As I drove my son home from swim squad tonight I (indicated then) pulled into a lane just in front of a morbidly obese brain-dead male driving a very new and expensive looking Mercedes Benz two door sport version - I mean the guy was so fat I'd have sworn someone had rammed a Humvee up his arse. I was (just) doing the speed limit. It really irritated him that I didn't accelerate away with the torque that no doubt his mostly pointless piece of German engineering could. So much so that he sat about a metre or two surging closer every now and then towards my towbar as we continued the short journey home.

I laughed to myself knowing he wouldn't dare risk hitting me, I could tell he cared a helluva lot more about his wanky status symbol than his health for a start. All this rekindled my wonder as to what would become of the ignorant, impatient obese in the coming long emergency. Fat and can afford to be tasteless is in for a shock.

Something I noticed in the news this evening confirmed the almost fatalistic course of events now unfolding subtley before our very eyes. The lights went out across Europe today in an unprecedented continent wide power outage - and the world barely blinked an eye.

Richard Duncan (2000) argues we are at the beginning of what he calls the olduvai slide. Marked ostensibly by the escalating violence in the middle east, the Jerusalem Jihad, we are at the beginning of ever increasing dysfunction across global energy markets. Financial markets will follow close behind.

The power shortages in California and elsewhere are the product of the nation's long economic boom, the increasing use of energy-guzzling computer devices, population growth and a slowdown in new power-plant construction amid the deregulation of the utility market. As the shortages threaten to spread eastward over the next few years, more Americans may face a tradeoff they would rather not make in the long-running conflict between energy and the environment: whether to build more power plants or to contend with the economic headaches and inconveniences of inadequate power supplies. (Carlton, 2000)

The electricity business has also run out of almost all-existing generating capacity, whether this capacity is a coal-fired plant, a nuclear plant or a dam. The electricity business has already responded to this shortage. Orders for a massive number of natural gas-fired plants have already been placed. But these new gas plants require an unbelievable amount of natural gas. This immediate need for so much incremental supply is simply not there. (Simmons, 2000)

Civilisation came to an abrupt halt (albeit a shortish pause) for most of Europe today. A cold snap encouraged millions of Germans to turn up the heating causing the electricity grid to collapse "like a house of cards" the guardian reported.

"One power company chief said the continent had been close to a total blackout"

Duncan argues Industrial Civilisation is beholden to electricity. What will modern cities be like to live in without electricity? Millions of people packed likes sardines into highrise apartment complexes - inherently everything connected to this way of life utterly and totally depends on electricity. Yet the average punter is totally clueless in regard to the complexity, the fragility and the implications of electricity and large cities.

The reliability of the worlds electricity networks is faltering. As an individual, and in light of Duncan's compelling argument, I urge you to consider what you might do.

Richard Duncan's Olduvai Theory
http://dieoff.com/page224.htm

All Quiet on the Industrial Front

People are probably wondering now, what use could a blog on peak oil be - the oil bubble has finally burst and we are seeing a return to normal prices, let the carbon monoxide flow... As consumer confidence perks it's time to go hoc a new plasma screen TV.

I could go on, I could attempt a rebut of the gloating haha's I hear from the students of professor Pangloss. But, to be honest James Kunster and Tom Whipple do it better than me.

The Twilight of Mechanized Lumpenleisure.
James Howard Kunstler
Among the many wonders and marvels of American life in the twentieth century, especially after World War Two, when our country ruled much of the world economically, was the astounding rise in standards of living among social classes who had hardly known leisure or had a dollar to spare on the accoutrements of it from time immemorial.

Continue reading The Twilight of Mechanized Lumpenleisure...


The Peak Oil Crisis: Turning Points
Tom Whipple
From a peak oil perspective, the last couple of weeks seemed pretty quiet. Oil prices continued to drift down into the $50s amid gloats from peak oil skeptics. The Dow Jones climbed to all-time highs, in part, due to optimism the "oil bubble" had finally burst and there would be lower inflation and lower interest rates ahead.

Continue reading The Peak Oil Crisis: Turning Points...


For those that were interested, the PhD topic, no not to do with Peak Oil. Have a read of Luciano Floridi's Problems in the Philosophy of Information, problem 13 and 14 in particular. Should epistemology be based upon a theory of information? Is science reducible to information modelling. (exciting stuff).

Steve

You could be excused for thinking I was dead.

I actually nearly almost was - well in a metaphorical way. I have officially started the PhD. In itself not so scary, you have to break it all down into easily digestable bits. So, at present it is reading, reading, reading - and worrying, about what I am reading, that is, if it is relevant. A this stage it probably doesn't matter toooo much. The idea initially is to develop a comprehensive annotated bibliography, one that summarises all the major angles around the topic one is studying. You need, I guess a hundred or so significant pieces of work that capture the main debates and wisdom of the area.

That's what I'm doing at present. I've discovered a cool piece of software called Scholars Aid which helps one do this very well. The chopped down freeware version (Scholars Aid Lite) is available.

The Topic!?
Ok, lets run a little competition here. If you think you know post a comment. Haha, no one will guess (that is no one that doesn't already know).

$80 a Barrel - Just around the Corner

Nymex Crude Futures currently trading at US$78.05

Watch for further rises at the pump by mid next week if we don't see a drop soon.

This spike has been building over the last couple of weeks. I suspect we'll see the psychological $80 a barrel mark tested. Before oil settles yet another $10 a barrel higher.

Fill up the Ford Explorer today folks.

... but don't worry people - your government has told you that oil will settle back to US$25 a barrel sometime soon and for the forseeable future.

Four Corners - Investigative Journalism - still - at its best.

Well done to ABC's premier current affairs show, breaking Peak Oil to Australia.

The wankers in New Zealand media should be ashamed. I've been begging them to run a story like this for several years.

Enjoy on broadband.
Highly Recommended.

http://abc.net.au/4corners/

NZ's Energy Problems Coming Home to Roost!


The trade deficit is out of control and while the evidence mounts that we are at peak oil now, or at least before the end of the decade rabid fuckwittery by the government is not in short supply with yet further announcements of motorway building spending sprees...
Trade deficit explodes Govt crosses its fingers












Aucklanders ought to prepare themselves for further power cuts this winter as energy consumption maxes out with tedious regularity.
Electricity demand hits another high

Don't expect to catch public transport - railway industrial action means there is no room on the trains.

And as the US "driving season" gets underway - expect further rises in the price of petrol.
Oil Prices Surge as Stocks Plunge

Yet the comatose obese public (continue to be fed by the equally corpulent, brain-dead media) all pimped out on "Dancing with the Stars" and Nicole Kidmans wedding worry about whether they should hock the mortgage to buy the new Ford Explorer, as they continue to munch down the Cheezels. Cluelessness abounds as we steadily march towards the cliff all the while extending the quarter acre suburban dream beyond the 1 hour commute barrier.

Don't worry punters "I'm sure they'll come up with something" (yeah right)

Hon Harry Duynhoven at odds with Prime Minister

I suggested to Harry Duynhoven that mainstream opinion about when peak oil might occur was not synonymous for bullshit "business as usual" international energy agency rhetoric. I pointed out to Harry that the Prime Minister agrees with me, not him nor the IEA. And I suggested he should garner the guts to say that the Prime Minister's opinion like mine and many others is just scaremongering nonsense as he (by inference) suggests?

Rt. Hon Helen Clark
18/04/2006
"we're probably not too far short of peak production, if we're not already there"

Hon Harry Duynhoven
8/04/2006
"Based on current advice, oil production seems likely to peak sometime between 2021 and 2067, with probability highest around 2037. It is not the mainstream opinion for oil to peak in this decade."

This morning I received a letter from the Hon Harry Duynhoven, it simply restated the above quote. It's hard to imagine Harry Duynhoven as anything more intelligent than a retarded parrot, furthermore by calling me stupid (by inference) he's in fact calling the Prime Minister stupid. She should sack him, he's a gutless waste of space.

Steve McKinlay

Major Electricity Crisis in Auckland Today!

If this isn't a wake up call what is?

It just shows what happens when the lights go out. The largest city in New Zealand has ground to complete a halt. Electricity has been out since this morning because a single 110-kilovolt feeder line broke.

Basically life is cancelled today in Auckland.

I wonder - will people get it? Will this wake up the comatose public as they walk up and down stairs to their highrises apartments. No infomercials on channel 1 tonight at 7pm. Some people couldn't even leave their buildings because the gates powered by electricity didn't work.

Traffic gridlock, total fucking chaos, and news that drivers are simply ignoring the law, driving the wrong way on way streets and road raging at blocked intersections. Civilisation exists on a razor edge - when the lights go out we are back in the dark ages.

Streaming now in Glorious Stereo - for anyone here.

NZ Time 5.30pm Sunday Evening

http://38.96.148.21:4610/ play URL in Winamp

Would be interested to know if anyone can get the alias going. tyrrell.serverroom.us:4610

(testing the winamp crossfader)

Classic rock playlist. Building up some more hardcore playlists - if you feel like something with a bit more punch - comment away...

For my fans (all three of you)

I'm now streaming (mainly cos I got a gig in Second Life dj'ing haha) audio. What that means is I am now able to inflict my music on you (if you so desire).

You just need Winamp (downloadable free via the link) and if you're not using it to play your music on your computer your just silly - it's way the best.

Once you've got winamp, or if you already have it. Then use this URL. http://tyrrell.serverroom.us:4610 or if you have no luck with that the IP version is

http://38.96.148.21:4610/ (click on the File menu then, Play URL, cut and paste the link in)

I'm not always streaming, but, well tune in and you'll find out. What will I be playing, check out my profile and you'll get an idea.

steve

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

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.

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.

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

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

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

NZ Ministry of Economic Development - US$40 Oil Soon.
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