Why has the U.S. mainstream media stopped cheerleading the fracking boom? Looks like production is no longer booming.
Why has the U.S. mainstream media stopped cheerleading the fracking boom? Looks like production is no longer booming.
"The advantage that oil distillates have is that the energy density (energy content/unit volume) of oil distillates is much greater than electric batteries and that advantage still exists. To reduce that disadvantage, auto makers now put as many battery cells in series as they can. Modern electric vehicles have the whole bottom of the vehicle covered with electric battery cells. Many electric vehicles now have a rated range of +300 miles.
The Electrical Trades Union is calling for an independent review of the entire National Electricity Market (NEM) following the Australian Energy Market Operator’s (AEMO) unprecedented decision to take over national energy supplies. AEMO has announced it will set administered prices for wholesale power in all regions of the market and take control of all generation plants to ensure the lights don’t go out for businesses and households.
Look at last night's fascinating discussion on The Duran (with Alex Christoforou and Alexander Mercouris) about the war in Ukraine and what is happening regarding the oil trade and currencies in the world outside US-NATO, in reaction to US-NATO sanctions.
I have just learned, regretfully, of the death of Jay Hanson. My first report was that it occurred in a diving accident. Subsequently it has been clarified that he fell ill after diving, and died that night. Jay Hanson lived in Hawaii. He was the founder of multiple energy resources or peak oil lists from the 1990s, starting with the incredibly popular Dieoff website and DieOff list which looked at peak oil, population numbers, and scarcity. An intermediate list was Killer Ape-Peak Oil. The last list of which we are aware was [America2Point0] which Hanson closed 'until further notice' on 20 December 2016. Hanson was teetotal for many years and studied evolutionary psychology. He believed that humans would be ultimately unable to deal with resource scarcity or human induced climate change because they could not cope with major environmental and evolutionary problems involving themselves.
His list gave rise to a number of other lists, such as EnergyResources and ERT, as people formed different views on the energy resources and human survival outlook.
Jay Hanson's dieoff page can be found in its old and new forms by clicking on the links: http://www.jayhanson.org/oldindex.htm and http://www.dieoff.org/. There is a 2003 interview by Scott Meredith at http://www.oilcrash.com/articles/hansn_02.htm. It was my own participation in the DieOff list and subsequent ones, especially EnergyResources, and then the Australian Running on Empty one (roeoz) that caused me to edit two editions of a multi-scientist authored book called The Final Energy Crisis, Pluto Press, UK, 2005 and 2008. The first edition was initiated and partly edited by Andrew McKillop, and finished by me, Sheila Newman, and the second edition, in 2008, was entirely edited by me, with mostly new articles.
The whole 'peak oil' and energy resources debate or story or study is not over by any means. Fracking is a desperate and ruinous sort of pause, which has been used to crank up demand. It seems that we have already entered the oil wars, however most of the public have little ability to understand this, due to the influence of the corporate press and similar on our education systems, which focus less and less on science and history. US-NATO activity in the Middle East, the East and South America - notably threats towards Venezuela - are signs of this.
Jay Hanson was a charismatic internet figure, and it seems odd today that his death is not being widely reported. He was likable, trenchant and a little despotic, with many avid and admiring acolytes and friends.
This article and obituary is a very quick response to the sad news. My condoleances to his family and close friends, and to the movement he began.
The marches yesterday were really impressive, but there is a way that school children could be many more times effective in carving out their future on these issues. Australian and State governments are pretty resistant against democratic protests, and anyhow, our governments at all levels don't have much of a clue about what to do about providing energy to our increasing populations. Schools and schoolchildren could exert much more pressure and constructive effort at a local level and we hope they will.
I am trying to imagine myself as a 15 year old back at school and trying to make my own decision regarding the Climate Change rally today, planned weeks in advance. How capable would I have been to assess the science on Climate Change? Actually, even now I don't think I can really independently assess the data. I understand that greenhouse gases accumulate in the atmosphere and are associated with higher temperatures. I understand that the world production of Greenhouse Gas Emissions (GGEs) is increasing and that they come from the burning of coal, oil, and wood or anything combustible and are mitigated by the process of photosynthesis performed by trees and in fact all plants including plankton in the sea. Thank you plants and trees!
In Melbourne we are reducing our tree cover hand over fist as we build over our gardened suburbs far more densely. We add more GGEs as we add more people, since they all use electricity, they all in one way or another use cars or other transport. They consume goods, the production of which causes GGEs.
So I imagine how I would respond to the choice of attending a large rally whose purpose is to send a message to our federal government seemingly thumbing its nose at concern over climate change. In my 15 years would I have noticed any changes personally? I read about melting ice at the poles, I see You-Tube videos of polar bears unable to hunt due to loss off their ice environment. I hear of terrible droughts and fires in Australia often attributed to climate change. My teachers appear to be in favour of students taking half a day off school to attend the rally. What do I do? The popular kids are all attending the rally. If I don't, how will I be seen? What will be the fallout? Whatever I do, will be public as far as my peers are concerned. I have to make a decision and make my first political statement.
People are talking about being "on the right side of history." Of course when my own children ask me what I did I will want to be on the right side of history. However, the issue is somewhat intangible, abstract and seems to rely on a leap of faith. I don't want to be called "climate change denier." That sounds very much on the wrong side of history! I need to be a "believer." A bit of self talk is needed. I feel passionately about the natural world and I see assaults on it every day even where I live. Climate change affects the natural world but the science is complex for me, I have to take it on faith and I don't feel comfortable with this. Despite my misgivings and insecurities, I'll have to go today and join my classmates. I'm taking a punt that I am on the "right side of history." My parents do not approve of my attending but have said it is up to me.
I'm ambivalent but I am going.
I am a schoolteacher, and I am on my way to the Climate Change march. I am also ambivalent.
What are the children going to be learning in their 'first political statement' based on righteous indignation and general demands? I'm afraid they are going to be learning their first lesson in their political impotence. Because, as an adult who has tried to stop over-population, over-development and habitat destruction in this city and this country, I know that the government and the press are entirely capable of ignoring indignation on the steps of parliament from multiple residents' action groups.
As a teacher, I also do not dare to question this approach to environmental concerns, because, if I do, I will become a pariah. However I will tell you what I think we should be doing:
Our schools should not be marching in the city. We should be marching, if we are going to march, to our respective local councils, with carefully thought out lists of demands. First, we should be asking our local councils to make laws against tree removal and habitat destruction. Next on our list would be to ask them to investigate and cost new alternative power options and local food production options. Our schools should then put their science and other teachers to work with the children to examine the logistics and possibilities of these new technologies in the field - locally. What better place for us to learn to be effective, and to engage politically on energy and production than in our own communities and biophysical environments? This would also open up local careers in alternative industry avenues in energy and resources and planning. Youth suicide rates would drop, since political engagement close to home is an antidote to feeling worthless and powerless.
How might we notify the community of our serious intent on these matters? School children should be turning up, with their teachers, to every attempt to remove a tree in their local community and stop it until it is carefully evaluated. Perhaps we could form tree councils with others in our localities in order to promote alternatives to moonscaping our neighbourhoods.
How long, I wonder, would it take before we all realised that there should be local limits to growth? That would put a spanner in the authoritarian regime of planning for population growth and development. Thereby, by combining local action all over the country, we would accomplish far more than any Paris climate change conference.
I guess that is why we are all marching instead.
In this 1973 video, the Club of Rome envision a world with far less need to work long hours and with a benign system of international cooperation. I think that they would be horrified if they could see what has actually happened, and the role that the IMF has taken. I think the Club of Rome got the material settings right, though.
This short Australian interview with men from the Club of Rome in 1973 is interesting in that the data seem right. It's 1973 and they are looking to 2040-ish. Population growth is coming right up against the time they expect it to be overwhelmed by deaths. The use of natural resources has happened as predicted as too the production of waste and the dwindling quality of life. Those interviewed advocate international cooperation to address global problems and cite the European Common Market as being a good start.
It's a good effort at looking into the future but I think things are worse than they thought. They are envisioning a world where a more sensible course is taken rather than the current mad rush to get as much out of the system as possible. They are seeing internationalism and international cooperation (re trade for example ) as an opportunity to avert catastrophe, rather than the hideous heartless, overblown monster that has actually emerged.
This interview happened in the year of the 1973 Oil Shock, just when various colonial oil-producers were declaring independence and nationalising their oil industries.
It is interesting to see how the man from the International Monetary Fund appears so much milder than his current manifestations, although we do hear him defend private enterprise over nationalisation of industries. And to think of how the United States and the EU are currently threatening Venezuela, one of the last countries to maintain a national oil-industry despite the constant efforts at take-over by US-NATO since 1973.
It seems that the Club of Rome did not predict the number at which global population might fall, but they show death-rates rising to the point that population numbers fall rapidly around 2020.
1973 saw many oil producing countries become independent and nationalise their oil. Some succeeded and others, like Australia, were brought to heal. Ever since 1973, the US and Europe have been trying to reverse these nationalisations. Venezuela is a case in point.
In a gesture befitting Lewis Carol's Queen of Hearts, the United States has suddenly abandoned all pretences of lawful procedure and common sense by officially declaring that opposition leader, Juan Guaidó is the real president of Venezuela, not Nicolás Maduro Moros, who was actually elected President by Venezuelans.
To put things in perspective: Getting rid of President Maduro because the 2015 parliamentary election placed his own party in the minority would be like making President Trump step down because the Democrats are now in the majority in Congress - to paraphrase Venezuela's diplomat to Russia.[Article by Sheila Newman with James Sinnamon]
It is also baffling to see French President Macron call for Maduro to step down when his own country is convulsing with Gilets jaunes (Yellow Vest) protests, who all call for Macron to step down. Don't politicians have any sense of irony?
Interesting also to see Turkish President Erdogan stick up for Maduro by saying nothing can be resolved democratically without an election.
Meanwhile South America: Columbia, Brazil, Chile, are also baying for Maduro to step down, as you would expect of US lackies.
Why should Maduro step down? Why is no-one talking about how US trade sanctions have impoverished Venezuela? The reason for these sanctions is that the US wants control over Venezuelan oil, which means that it must destroy the socialist government that nationalised oil. Will they go so far as to invade and bomb Venezuela like the did other oil-producers whose leaders they condemned, like Iraq, Libya, and Syria?
With the help of much money poured into Venezuela by the US Government agencies the United States government have succeeded in doing to Venezuela what they did to Ukraine in 2014 when Victoria Nuland promised the Maidan protesters face-to-face $5 billion to assist in "building democracy".
A propos of the US interference on Russia’s doorstep in Ukraine (and Georgia and the Middle East), there is symmetrical justice in Russia's plans to build a military base in Venezuela, although these may also have caused a panic in the US leading to this overt coup-attempt.
In Latin America, only Cuba, Bolivia and Mexico have defended Maduro. Mexican president, Lopez Obrador, said that Mexico has returned to the non-intervention policy Mexico practiced from the 1960s — when it resisted U.S. pressure to condemn or isolate Cuba — until 2000, when the conservative National Action Party began to adopt a more activist, U.S.-allied stance in foreign affairs. Russia, China, India and South Africa buy oil from Venezuela and are generally sympathetic or have a policy of non-interventionism.
The EU has called for new elections, but without condemning the United States meddling in Venezuela. This further reinforces the narrative or the claim that the democratically elected President Maduro is illegitimate. If new elections were called, in the current geopolitical circumstances, this would result in the ousting of President Maduro in an election rigged with many millions of United States dollars and with thousands of clandestine US intelligence agency operatives. The elections would also be conducted under the guns of the US Navy, Army, Air Force and Marine Corps in the Central American Carribean and neighboring countries on the South American continent.
This has all happened before, but unofficially and more covertly: In 2002, a group marched on the Presidential palace demanding Hugo Chávez’s resignation, which the President refused. He was arrested and imprisoned. Pedro Carmona, President of the Venezuelan Chamber of Commerce, which receives funding from the US National Endowment for Democracy (a right-wing regime-change NGO that calls economic liberalism 'democracy'), was installed as Venezuelan President on the 11th of April 2002. On the 12th of April, the US President’s spokesman, Ari Fleischer, endorsed the Carmona government. But, on the 13th of April the Presidential guard and the army arrested Carmona. Next the opposition collected signatures from 20 per cent of the electorate required under Chávez’s constitution to initiate a referendum to sack the president, but Chávez won the referendum.
The oil countershock of 1979 culminated in currency devaluation by one third and a change to a the Social Christians (SC) government, which remained in power until 1983, when Democratic Action (DA) or Acción Democrática, (AD) in Spanish, was returned under Jaime Lusinchi. Despite promises to diversify the economy and deliver on housing, public health and education, the situation continued to deteriorate. That is, the kind of government that the US wants to install, one that will privatise Venezuelan oil, failed to develop and diversify the economy, leaving it almost exclusively oil-dependent, with most of its population in poverty.
Hugo Chavez and Maduro were later both accused of causing this same problem of lack of economic diversification.In 2019, President Trump and Vice President Mike Pence were using it again as an excuse to rattle sabres and unilaterally denounce President Maduro and, bizarrely, recognise Juan Guaidó as the interim president of Venezuela.
Back to our history: Under Jaime Lusinchi and Acción Democrática, (AD), the Venezuelan economy was simply being mined by foreign interests, with no consideration for the self-determination of its population. In 1988 another DA president, Carlos Andrés Pérez, introduced an austerity regime, removing subsidies on gasoline as well as on a number of important consumables, culminating in hunger riots in Caracas, with a death toll of thousands.
Two attempted military coups took place against a background of continued repression in 1992 and Hugo Chávez led one of them. President Pérez later went to prison for 28 months with the government limping along under another recycled leader, Caldera, whose foreign policy was very USA friendly. In 1995, 103 per cent inflation hit the Venezuelan middle class. In 1997 doctors, university professors, and national telephone company workers went on strike. In December 1998 Hugo Chávez won the Presidency.
Hugo Chávez, the 45th President of Venezuela, died on 5 March 2013 at the age of 58. His death triggered a presidential election which was constitutionally required to be called within 30 days. Nicolás Maduro served as interim president following Chávez's death until 14 April, because the Vice President did not want to take charge of the country as Chávez had nominated Nicolas Maduro as a successor.
The Popular Will party came out of the Popular Will Movement, which was formed in 2009 by the usual suspects, including Democratic Action, the right-wing US business-backed party that had privatised oil.
The Democratic Unity Roundtable (Mesa de la Unidad Democrática (MUD) is a coalition of parties, notably Democratic Action, which formed in 2010 in opposition to Hugo Chavez's United Socialist Party of Venezuela.
Popular Will is supporting Juan Guaidó's Presidential Coup attempt.
Venezuela is situated at the very north of the South American continent on the southern shore of the Caribbean Sea. Venezuela is less than 2,000 kilometres south of the southern most tip of the United States, from which, since 1945, many wars against humanity have been launched since 1945. The sum total of deaths from these wars is in the millions.
Throughout Central America, the Carribbean and the South American continent are scattered a large number of United States' military bases from which further wars against Venezuela and other sovereign Latin American countries can be launched. Clearly any national government which wishes to govern in the interests of its people and not according to the dictates of the Unite States' elites, risks attracting US intervention to transform it into a client state, with a liberal economic economy, entailing debt and privatisations.
This part of the article is adapted from Sheila Newman, “Venezuela, Chavez & Latin-American oil on the world stage”, Chapter 10 in Sheila Newman (Ed.) The Final Energy Crisis, Second Edition, Pluto Press,2008.
“In 1998, or 168 years after independence, a tiny wealthy elite was separated by a vast chasm from the rest of the people, of whom one quarter were unemployed. This seems disgusting when you realize that Venezuela was then the second biggest [oil] exporter in the world and had received around 300 billion dollars in oil sales – or the equivalent of 20 Marshall Plans - over the preceding 25 years. It was in this context that Hugo Chávez and his social plan won the elections of 6 December 1998 with 56.24% of the votes.”  (Nicolas Lehoucq, Paris Institute for International Studies).
President Hugo Chávez, was a social revolutionary with a giant budget. In 2006 the EIA ranked Venezuela ninth in World Oil producers and sixth in World Oil Exporters.  For many of his countrymen, Chávez was seen as a towering figure of hope for rescue from a nightmare which began in 1498. But his Anglo critics portrayed him as an ogre treading clumsily over political alliances and destroying Venezuela’s oil-assets.
Clearly Venezuela was pursuing a different political paradigm from that of the North American-led Anglophone countries. The Chávez government endorsed a Christian socialist philosophy directly opposite to the Protestant capitalist one of a wealthy elite divinely elected on earth. In the Chávez philosophy, Christ was the first socialist, sharing wealth among the poor; a rich man might only enter heaven by giving away his possessions to the poor; a good leader should give everything to his country.
One political explanation for this difference is that Latin America ‘missed out’ on the progress model which dominates North America because, colonized by medieval Catholics, it was isolated from the development of Protestantism.
Sociologist, Max Weber, theorized in The Protestant Ethic and the Spirit of Capitalism (1906) that Calvinism was the midwife of capitalism, delivering to the world the concepts of the ‘work ethic’ and of election to earthly prosperity as a reflection of God’s grace.
The work of Australian engineer and social analyst, Sharon Beder, supports a contrary view that the work ethic plus the progress model are driving the world over a cliff and this is pretty much Chávez’s expressed view. Chávez also apparently shares a similar perspective to Al Gore’s on global warming, but that is where the similarities end.
From the 15th C the indigenous long-term stable clan and tribal populations of Chávez’s people were ravaged by invasion, immigration, disease, dispossession and slavery. The original peoples nearly died out, then, completely disorganized, ballooned in circumstances where child labour was the only source of additional income for low-wage landless people. What is now called Venezuela contained a stable population estimated at around 400,000 Amerindians in 1498. (In 2018 the population was over 28 million.) In the early 16th C King Charles Martel V granted Welsers German banking firm rights to exploit the people and resources of Venezuela in payment of a debt. The colony returned to the Spanish Crown within 20 years and hereditary land grants were made to conquistadores for a time, but later declared illegal. Meanwhile the Amerindians fought back until smallpox overwhelmed most of them in 1580. Not until 1821 did Simón Bolívar win the long indigenous struggle for independence.
In 1921 the discovery of oil permitted agricultural and industrial development. At the start of the Second World War Venezuela’s oil production was only exceeded by that of the United States. Much of the oil concession development involved attracted US, British, and Dutch companies. There was a period of dictatorship from 1948-1958, when Venezuela again became a democracy. It founded OPEC in 1960.
The historic inequities of colonial land distribution guaranteed a large population of impoverished rural labourers. As oil prices waxed and waned, productive agricultural holdings were neglected and waves of poor people left the country regions to look for work in the city, creating the slum of Caracas. Between 1959 and 1964 the government redistributed rural land to 150,000 families but many resold the land to speculators, it is said, because they had little education about farming and no ready market for their product. Other wealth redistribution and educative policies were carried out but these programs failed to establish themselves against a background of depressed commodity prices and political schism. Although the Democratic Action Party (DA) had played an important role in Venezuela’s first democratic period (1945-1948), in the early 1960s it was aligned with the USA, although many Venezuelans were sympathetic to the Castro regime in Cuba, which was charged with supplying arms to guerrillas in 1963. The DA government became increasingly repressive in the context of continued political unrest. In 1968 the Social Christians (SC) won government and remained in power until 1973.
In the wave of nationalizations following the first oil-shock, despite its US sympathies, the DA Government created the State-run oil and natural gas company, Petroleos de Venezuela SA (PdVSA) in 1975-1976. PdVSA is Venezuela’s largest employer and provides 80 per cent of export earnings but, reflecting later trends to privatization, government revenue declined from 70.6 per cent in 1981 to 38 per cent in 2000.
The oil countershock of 1979 culminated in currency devaluation by one third and a change to an SC government, which remained in power until 1983, when AD was returned under Jaime Lusinchi. Despite promises to diversify the economy and deliver on housing, public health and education, the situation continued to deteriorate.
Hugo Chavez and Maduro were later both accused of causing this same problem of lack of economic diversification. In 2019, President Trump and Vice President Mike Pence were using it again as an excuse to rattle sabres and unilaterally denounce President Maduro and, bizarrely, recognise Juan Guaidó as the interim president of Venezuela.
In 1988 another AD president, Carlos Andrés Pérez, introduced an austerity regime, removing subsidies on gasoline as well as on a number of important consumables, culminating in hunger riots in Caracas, with a death toll of thousands.
Two attempted military coups took place against a background of continued repression in 1992 and Hugo Chávez led one of them. President Pérez later went to prison for 28 months with the government limping along under another recycled leader, Caldera, whose foreign policy was very USA friendly. In 1995, 103 per cent inflation hit the Venezuelan middle class. In 1997 doctors, university professors, and national telephone company workers went on strike. In December 1998 Hugo Chávez won the Presidency.
On 30 December 1999 Venezuela’s 26th constitution was approved by 71 per cent of votes. The Senate was replaced by a single chamber National Assembly, and the Bolivarian Republic of Venezuela came into being, named after the National hero. Presidential terms increased from five to six years and limitations on presidents serving a second consecutive term were lifted, but it became possible for the public to sack a president through a publicly initiated referendum. Privatisation of the oil industry, social security, health care and other major state-owned sectors was outlawed.
According to the EIA, “Nearly one-half of PdVSA’s employees walked off the job on December 2, 2002 in protest against the rule of President Chávez.” But another report says that they were prevented from working in a ‘bosses lock-out’ where “a small group of managers, directors, supervisors and technicians organised the sabotage of production and brought the industry almost to a halt,” and Georgetown politics Professor commented that “The opposition (…) has also been extremely irresponsible in trying to demand [Chávez’s] resignation rather than trying to seek an electoral solution.” If we assume that PdVSA management was responsible for the declining returns to the State by PdVSA over the decades, then the view that this was a ‘lock-out’ to preserve an undemocratic status-quo by discrediting the Chávez Government, seems persuasive. Chávez had provoked US insecurity about oil supply by criticizing the Free Trade of the Americas Act (FTAA) and US foreign policy. The Chávez government had sacked some directors of PdVSA who were in political disagreement with the Venezuelan executive. These people then led calls for a general strike along with a variety of opposition parties and the Fedcamaras (Venezuelan Chamber of Commerce), who are supported by the US National Endowment for Democracy. A group marched on the Presidential palace demanding Chávez’s resignation, which the President refused. He was arrested and imprisoned. Pedro Carmona, President of the Venezuelan Chamber of Commerce, which receives funding from the US National Endowment for Democracy, was installed as Venezuelan President on the 11th of April. On the 12th of April, the US President’s spokesman, Ari Fleischer, endorsed the Carmona government. But, on the 13th of April the Presidential guard and the army arrested Carmona. Next the opposition collected signatures from 20 per cent of the electorate required under Chávez’s constitution to initiate a referendum to sack the president, but Chávez won the referendum.
The distribution of PdVSA income had been increasingly diverted to private concerns, with returns to the State falling from 70.6 per cent in 1981 to 38.6 per cent in 2000. Despite permanent damage to production from sabotage in the industrial disputes of December 2002, Chávez’s intervention had raised PdVSA returns to the state from 38.6 per cent to 50 per cent by 2004.
Venezuela had for some time been a food importer, due to the country’s very poor system of land management, which Chávez tried to rectify in a major scheme. He seemed to be seeking regional self-sufficiency, with protection for local production. He was opposed to overconsumption, openly warning about oil depletion. He was highly critical of US human rights abuses, at home and abroad, and opposed free-marketism.
Obviously Chávez’s regime threatened many established interests in a seething international struggle for resource hegemony. The economy was still in recession and maintenance and consolidation of the section of the population which supported Chávez would require that he carry out his promises. Chávez’s friendship with Castro was a source of survival skills. So was his policy of strengthening regional Hispanic alliances.
There were a number of likely candidates, including Mexico, which had begun to import food from the US under the American ‘free trade’ agreement. Brazil, however, sensibly seeking independence from petroleum, was apparently counselled to drop its independence policies in exchange for leniency on international debt.
Chávez actively sought more diversification in petroleum trading, initiating a ‘South-South diplomacy’ with sidelined and emerging polities in controversial and political oil-trade accords with Cuba, Argentina, Uruguay, Brazil, Spain, Iran, Libya, Nigeria, Qatar, India, China and Russia. An agreement in October 2004 meant that Russian oil sales to the US were actually honoured by Venezuelan oil and Venezuelan sales to Europe were supplied by Russian oil. The Chávez government paid off $538m of Argentinian debt and agreed to provide contracts worth $500 m to Argentina.
In a fascinating avoidance of petrodollars, Chávez supplied 80,000 barrels of oil to Cuba a day, at a friendly price, with 20 per cent of payment in the form of the supply of 150,000 Cuban doctors to Venezuelan health.
Most importantly, Chávez hoped to create a Latin American petroleum company, “Petrosur”, which would unite the public companies of Argentina, Bolivia, Brazil, Uruguay, Equator and Venezuela.
Mostly anglo-analysts intimated that anglo-oil companies would not touch Venezuela because of Chávez, and that the bitumus deposits of the Orinoco would not get developed, through lack of experts. But this began to look like sour grapes as plenty of the non-anglo oil companies – Russian LUKoil, China’s CNPC, Indian ONGC and Brazil’s Petrobas – did not seem to be put off.
Chávez did not neglect regional diplomacy among the underworld of arms trade and revolutionary militia. And, after an attempted putsch in 2002, Chávez relied on Cuban Intelligence for personal protection. Not surprisingly the US Government disapproved.
On December 4, 2006, Chávez won his third six year term as president. In 2007 a referendum to make Chávez president for life was democratically defeated by 51 per cent.
In the light of Venezuelan social and economic performance in the decades preceding Chávez it would have been hard for him to do worse than his predecessors and he seemed to be doing considerably better. Land redistribution is the basis of revolution and of social equity. Venezuela signed an accord to give effective rights to its indigenous peoples. Chávez allocated public and then private land to the landless in a program accompanied by massive agricultural education.  This was bound to upset the small elite of land-owners and speculators.
The Chávez government had better green credentials than any other petroleum producer. With an active commitment to mitigate the impacts of climate change and peak oil, it initiated new public transport, instituted organic farming as an important part of secondary school education, and facilitated a huge organic farm in the centre of Caracas. It also planned massive reforestation with the collection of 30 tonnes of seeds, and the planting of 100 million plants. 
The overwhelming positive signs of Chávez's example seemed to be what we needed for the 21st century.
In about 2010, the United States added to its traditional political harassment economic sanctions against Venezuela. The 2016 low oil-price agreement between Saudi Arabia and the United States then caused a huge reduction in Venezuela’s oil income. This massively depressed GDP and made it very hard for people to buy food and necessities.
In March 2013 Hugo Chavez died of cancer. He had nominated his successor as Maduro. Maduro ran for election and was elected President.
Unfortunately the United States stepped up its sanctions, making it even harder for Venezuela to operate. In the name of fighting communism and pretending it was motivated by humanitarian concerns, President Trump and Vice-President Pence spoke of regime-change overtly for the first time. Bizarrely, they ‘recognised’ the opposition leader as the true president, despite massive protests from Venezuelans.
 Various documents named beneath, many of which have also referred to Venezuelan President Hugo Chávez’s speech at the 60th General Assembly of the United Nations in New York, on 15 September 2005.
 Lehoucq. (Translated here by S.M. Newman.)
 (All hydrocarbon liquids) http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.htm
 For instance, the Economist unreasonably ignores the poverty of Venezuelan people under the old management of oil in a one-sided interpretation of events in “Oil's Dark Secret,” Aug 11 2006, Economist Intelligence Unit - Executive Briefing, http://www.economist.com/business/PrinterFriendly.cfm?story_id=7270301
 In The Pan-American Dream, US conservative writer, Lawrence Harrison, attempts to explain the differences in economy, government, human rights and standard of living in American Hispanic societies according to Weberian theory.
 Articles by Sharon Beder on the Work Ethic. http://homepage.mac.com/herinst/sbeder/home.html#work.
 UNICEF estimated that 9.9 percent of children ages 5 to 14 years in Venezuela were working in the year 2000. Government of Venezuela, Multiple Indicator Cluster Survey (MICS): Standard Tables for Venezuela and Annex I: Indicators for Monitoring Progress at End-Decade, UNICEF, 2000, www.childinfo.org/MICS2/newreports/venezuela/venezuela.htm and http://www.childinfo.org/MICS2/EDind/exdanx1.pdf.
Doepke hypothesised that fertility falls where policies, such as education subsidies and restrictions on child labour affect the opportunity cost of education. The populations of South Korea and Brazil had begun to grow rapidly around the same time, but South Korea had an effective public education system, and strongly enforced child-labour restrictions, whereas Brazil had a weak public education system and poorly enforced anti-child-labour laws. Doepke, M., Growth and Fertility in the Long Run, Mimeo, University of Chicago, 2000. available in reduced form in Doepke, M. "Accounting for Fertility Decline During the Transition to Growth", Journal of Economic Growth, 9(3), 347-383, September 2004.
 Seth DeLong, “Venezuela's Agrarian Land Reform: More like Lincoln than Lenin”, COHA, February 25th 2005, http://www.venezuelanalysis.com/analysis/963
 Ibid and Lehoucq, Nicolas, “La redéfinition du rôle géopolitique Vénézuelien,” Institut d'étude des Relations Internationales Paris, www.memoireonline.com/11/06/287/m_redefinition-role-geopolitique-venezuelien0.html (accessed 21/9/2007) and Doizy, Arnaud, “La politique étrangère des Etats-Unis au Venezuela, la période Chavez (1999- 2007)” Université Panthéon-Assas paris II, http://www.memoireonline.com/06/07/491/m_politique-etrangere-etats-unis-venezuela-periode-chavez2.html (Accessed 22/9/07)
 “Nearly one-half of PdVSA’s employees walked off the job on December 2, 2002 in protest against the rule of President Chavez.” EIA Reports : www.eia.doe.gov/emeu/cabs/Venezuela/Oil.html Some other anti-Chávez sources: http://marketplace.publicradio.org/display/web/2007/09/13/venezuelan_oil_expats_resurfacing/ Some comments on US stance:
Professor of Politics, Georgetown University, Arturo Valenzuela commented on the PBS Jim Lehrer Newshour, “Troubled Nation”, December 17, 2002, “…Unfortunately, the radicals on both sides are maintaining this conflict. The opposition, for example, in my view, has also been extremely irresponsible in trying to demand his resignation rather than trying to seek an electoral solution. In fact, the constitution as I said earlier does make it possible for to Chávez be submitted to a referendum in August of next year. It seems unreasonable not to focus on that. Chávez has said he would accept that as a possible outcome. The problem is that the opposition wants him out now. Chávez says I don't want to leave and the situation is getting worse day by day.” http://www.pbs.org/newshour/bb/latin_america/july-dec02/venezuela_12-17.htm
 Martin, Jorge, “Venezuela: Opposition "strike" or bosses lock out? An eyewitness account,” www.marxist.com/Latinam/venezuela_eyewitness0103.html. Some other sources: www.thirdworldtraveler.com/South_America/Venez_Coup_Countercoup.html
 Doizy, Arnaud, « La politique étrangère des Etats-Unis au Venezuela, la période Chavez (1999- 2007)» Université Panthéon-Assas paris II, www.memoireonline.com/06/07/491/m_politique-etrangere-etats-unis-venezuela-periode-chavez2.html
 Lehoucq, op.cit.
 It relies on uncompressed gas but also, unfortunately, on bio-fuels which will lead to tragic soil and forest destruction. Nicolas Lehoucq writes that Brasil had achieved a ‘quasi-independence from petroleum’ in the 1990s and has even developed cars which the driver can select to function by a simple switch from gasoline to non-liquefied gas to ethanol. “But this innovatory system was threatened by the World Bank. President Lula was attempting to obtain a partial cancellation of Brazil’s debt and the World Bank attempted to negotiate a deal whereby Brazil would cease its petroleum indendence program.” Lehoucq remarks that the World Bank is US dominated and wonders if the US uses petroleum as a means of control of third world countries. Lehoucq, op.cit.
 Lehoucq, op.cit.
 Lehoucq, op.cit.
 Cohen, D., “Venezuela -- Aló Presidente!”, ASPO USA publication, 29 August 2007 http://www.aspo-usa.com/index.php?option=com_content&task=view&id=202&Itemid=91]
 Lehoucq, op.cit.
 “Hugo Chavez's annus horribilis,” M&C, Americas news, Dec 14, 2007.
 A fact strangely overlooked in many studies of the French Revolution, where analysis of methods undertaken for the redistribution of land, affords a remarkable perspective.
 As with Australia’s terra nullius, no treaty had ever been undertaken with the indigenous people. Source: The Forest Peoples’ Program, “Protecting and encouraging customary use of biological resources: The Upper Caura, Venezuela,” www.forestpeoples.org/documents/conservation/Ven10c_jan04_ch6_eng.pdf
 Seth DeLong, “Venezuela's Agrarian Land Reform: More like Lincoln than Lenin,”
February 25th 2005, COHA, https://www.venezuelanalysis.com/analysis/963
 Derek Wall, “Viva Venezuela verde!” http://commentisfree.guardian.co.uk/derek_wall/2007/04/viva_verde_venezuela.html and Eva Golinger, “Venezuela’s Green Agenda: Chavez Should Be Named The ‘Environmental President’”, February 27th 2007, Venezuelanalysis.com venezuelanalysis.com/analysis/2244 (Accessed 22 Sept 2007)
This program from Press tv Iran is interesting and useful in bringing us up to date. Iranians know a thing or two about oil production and the oil market. The issues of peak demand and peak production are very hard to estimate and no-one here pretends to have the answers, but a number of factors are canvassed, including US President Trump. As usual, however, in such programs, population growth and economic growth are skirted around. Similarly, increasing efficiency among OECD countries is taken as a given, and increasing consumption among 'developing' countries is also taken as a given. The elephant in the room is, of course, when does peak demand meet peak production.
The projection stems from several factors. One of the major reasons is the expectation of a drastic rise in the number of vehicles on the roads.
Economic Divide caught up with Dr. Ali Shams Ardekani to discuss the future demand of oil. He should know a thing or two about the oil industry. He serves as the President of the Iran Business For Future.
He is the current head of the energy commission for the Ministry of Oil, Planning and Development and the Ministry of Industry and Mining in Iran. People across the world are getting more and more mobile. They are expected to use more cars for transportation and also trucks for transiting consumer goods as fast as possible.
Recently Donald Trump accused Germany of being dangerously dependent on fuel imported from Russia. The Russian foreign minister has responded to this sally by pointing out that Germany is still occupied militarily by the United States Army. As for importing fuel from Russia, Germany has done so for over 50 years, reliably, without interruption due to political differences. Trump wants to sell fracked fuel from the US to Germany and other parts of Europe. Inside is a video with the Russian foreign minister's comment.
The Australian Small Business and Family Enterprise Ombudsman has expressed dismay that politicians continue to argue over energy policy while small businesses suffer.
Ombudsman Kate Carnell said the latest East & Partners SME survey* of 1280 businesses showed 70 per cent would reduce investment in capital expenditure because of higher energy prices.
The survey shows that:
39.5 per cent of SMEs would scale back in the short term (long-term capex unchanged);
20.8 per cent would scale back in the long term (short-term capex unchanged); and
9.9 per cent would scale back capital expenditure in the short and long term.
Ms Carnell said that despite evidence of spiralling energy costs and reduced business confidence, politicians had not provided investment certainty.
In particular, she criticised State Governments for failing to agree with a national approach.
“The ACCC has revealed the impact of gas exploration bans on supply and distribution in Victoria and New South Wales, but these governments continue to shift the blame elsewhere,” she said.
“The Labor states talk about going alone on a clean energy target, which is putting politics ahead of the national interest.
“Meanwhile, businesses in South Australia may have to use dirty diesel generators to keep the lights on over summer.
“The Finkel Report provided a roadmap to repair the long-term damage of failed policies.
“All parties and all governments should endorse the report, remove bans on gas exploration and adopt a bipartisan approach to provide investment certainty.
“The danger with continued political bickering is that businesses will go to the wall, jobs will move offshore and be lost and consumers will feel even greater pain.”
* The energy question was asked as part of the East & Partners SME Transaction Banking survey, which examines and forecasts demand for transaction banking product lines and service offerings within Australia’s Small to Medium Enterprise (SME) segment (A$1-20 million turnover per annum).
Candobetter.net, whilst appreciating the importance and justice of this press release from the Australian Small Business and Family Enterprise Ombudsman, rang her press officer to express surprise that the Ombudsman had not commented on how the high cost of land, business premises and housing were also pushing businesses to the wall, since business-owners must pay for their homes and their business premises and provide salaries so that employees can meet their high rent costs. These things make Australia uncompetitive with comparable countries, such as France, which have much lower land-costs because of their slower population growth and different political systems. The rising cost of water is similarly concerning. I should have, but did not add, that artificially stimulated population growth was a major inflating factor behind all of these major costs peculiar to Australian business. See other articles on candobetter.net relating to small business here: /node/2601 and /node/1823.
Source: Press release:
13 Oct 2017 9:14 AM AEST - High energy costs slash small business investment
While the freefall of oil prices seems to have stopped for now, the inevitable rise of energy demand from developing economies may turn the current overflow into a critical shortage. How long before oil becomes a treasured resource in major demand again? And with new technology coming into play, how will the energy market affect our lives in the coming decades – will it fuel growth or new conflicts? Former Executive Director of the International Energy Agency Nobuo Tanaka is on SophieCo.
Sophie Shevardnadze: Nobuo Tanaka, the former Executive Director of the International Energy Agency, great to have you on our show. Welcome. So, in response to the low oil prices, what we’re seeing right now is companies are canceling new projects, investment is stalling, infrastructure is not being updated. The International Energy Agency says oil projects are at the lowest level in over 70 years. Right? So what I’m wondering - now we’re seeing an oversupply of oil, but without development, should we be bracing for a global shortage instead?
Nobuo Tanaka: Well, if the investment is declining these consecutive years, possible for the third year in this year, if that’s the case, the capacity will not increase as much to the level of the demand in the future. When economic growth is happening in emerging economies, we’re going to have a shortage. So the IEA is very concerned that low oil price is signaling the wrong idea for the investors in the energy sector. And almost all energy sector may have a small level of capacity increase for the future.
SS: Just lately OPEC dominance on the oil market was offset by the US shale oil production - and despite lower oil prices, the US shale oil production is still going strong.
NT: That’s true.
SS:Has OPEC - and Saudi Arabia - have sort of lost control of the oil market?
NT: Well this is interesting situation. Suddenly Saudi Arabia challenged the shale from the Unites States - how resilient it is. So Saudi kept the share of the market or in some level of the production and the price collapsed. So the shale started declining in 2015-2016. But thanks to the demand coming up and also OPEC countries together with non-OPEC like Russia tried to reduce the production from early this year. So the price is coming up. Now that shale production is recovering. So it is kind of testing the resilience and how far the price can go down to stop the shale production or not. This is a very new situation, nobody knows how strong, how resilient the shale is. So, you know, in a sense, the shale production is challenging OPEC policy. So OPEC is changing their policies, shale is changing. This is a kind of interesting area.
SS: So it’s interesting to see what the new reality is going to be, because we see the U.S. shale and OPEC officials meeting recently at the recent OPEC meeting. How do you think they are going to coexist? U.S. shale and OPEC? Or is there another battle in the cards?
NT: Well, the shale is increasing probably for some decades but not more than that, because shale development is a new technology and new potentials, but gas may continue longer, but shale oil may not stay forever. While the OPEC countries especially in the Middle East have huge resources. And definitely this is a short-term or a mid-term situation, not going forever, so Russia has huge potential and also Russia and Middle East have shale potential also. But you don’t need to, I mean, OPEC countries, Russia are not necessary to invest into the shale even though there’s the resources.
SS:Because they have so much resources...
NT: Exactly - conventional crude. So this is a kind of coexistence of different technologies in a different location in a similar market, so we will see.
SS:But for those countries, like the United States, who are still big on shale production, questions remain about the safety of shale oil and gas extraction.
NT: Environmental impact…
SS:Fracking has been proven to cause minor earthquakes, water pollution - so the environmental damage is absolutely undeniable. The question is are we going to ignore this damage and go for the profit?
NT: Yea, that’s a very good point. Certainly we cannot ignore the negative impacts by the development for the environment or safety issue. So the shale companies must invest for a much stronger or safer way of development and also prepare to stop the environmental pollution. So the cost of shale will increase by doing so. So by doing so the shale is getting less competitive technology.
SS: You know, I was thinking about this lately with oil resources slowly shrinking, you’d expect countries who are rich in those resources would be very well off. But then, you know you look at Venezuela, you look at South Sudan, you look at Gaza Strip, you look at Nigeria - and these countries are completely torn apart and they’re very poor. So it makes you wonder - is having oil or gas reserves a blessing or it’s actually not that good for a developing country?
NT: Well, some people say - “the resource curse”, because of the rich energy resources like oil, gas. If the country is not using the revenue for better purposes like reinvesting into the oil field or technologies or education of the people or the new industries, the country may suffer - if the location of the revenue is not in a good way. Just spending or wastefully consuming more, by controlling the price of oil lower in the domestic market rather than the wholesale market in the global, then you are just wasting the very important resources you are given by the God. So it’s a matter of the policy - how you spend wisely the revenue for the improvement of the future generation of the country. So this is a tough competition. Some of the producer countries like Norway or United Arab Emirates, even though they are small but they reserve some part of the revenue for investing for the future. This is a very clever way of using the huge revenues.
SS: But a vital resource like oil is a perfect conflict-starter, especially if you take into consideration that the population is growing and the resource in itself is shrinking do you feel like we’re going to see more wars break over it? And where geographically? South China Sea? Maybe Latin America?
NT: Yeah, sometimes the energy or the resources were the reason for wars, for conflict before in history. It is inevitable that for the sake of economic growth resources are very important, but now technologies make it very different - the energy situation now. The renewable sources like solar,wind are everywhere, nuclear power is very popular among emerging economies, even energy conservation is a very good way to increase security or efficiency. So with these new technologies some countries, even the Saudi Aramco is concerned that the decline in demand of petroleum may come sooner than later. Because peak concept is applied to the supply side, but the demand peak may come earlier, because I still remember the very interesting quote of the Saudi oil ministry Zaki Yamani, who said ‘The stone age was not over because we ran out of stones, so the oil age may disappear even though there's plenty of oil’. Because of the new technologies, the new energy resources...So, how to invest into the different new technologies is very important thing for the governments, oil producers should do.
SS: So you feel like the demand for oil may disappear while it’s still there?
NT: I think so. When will it happen? This is a very interesting question - I was asked this question in a very interesting way by Saudi Aramco. I said maybe it’s before 2030. Because in 2030 China will peak out the carbon dioxide emission in the COP 21, that means they will reduce consumption of coal, but probably oil also. If the largest consumer of oil will stop increasing the use of oil, this could be the peak demand of oil. Of course there are many emerging economies like india, African countries, some other Asian economies will continue to use for sure.
SS: You’re right because China has rolled out a plan to have a fifth of its car sales electric by 2025. And then alongside China you have India who wants to go fully electric by 2035. So you wonder what’s going to happen to the energy market, right? Because they are the biggest consumers.
NT: So I don’t know when, but we have to prepare for the situation like that. Consumer countries, as well as producer countries we have to prepare for the risk that these kind of big changes may happen in the energy market in the future.
SS: But you know, if things go according to your scenario, you’re wondering why people are looking for places to dig and drill. For instance, with the industry barely recovering from the oil slump, we see America drilling in the Arctic, Norway - in the Barents sea. And in places like the Arctic resources aren’t very easy to extract and it’s very expensive...
NT: Costs are very high.
SS: What’s the point? Why turn to the Arctic for oil?
NT: This is an interesting question. Yes, Arctic oil in a very deep sea area could be much more costly than conventional oil. The technology may make a breakthrough, even for oil, or even for coal - like these fossil fuels can be cleaner in the future. So that kind of technology together with the new development of the difficult areas - it all depends on the prices. Because if carbon prices get high enough to make the oil economies greener, it may be profitable to invest the big amount of money, the high costs for the difficult places, because the carbon price is so high that it legitimises the investment.
SS: I wanna ask you about climate change - you’ve touched upon it. Do you feel like climate change can actually unfreeze more energy resources in the North and maybe offset some of the shortage in the South?
NT: There’s some good part of the climate change in the future, you’re right.
SS:But then would it offset some shortage in the South, or not?
NT: Well, the Southern part - some of the small nations may suffer because of the sea level may go up. What does it mean for the consumption of energy or growth is another tricky question. So, yea, it may help, you’re right, it may help for more demand coming in the Southern part if you develop the Northern hemisphere or Arctic by cheaper costs - that’s also true. Yes, it’s also true. But there’s a change of cost by the climate change mitigation, new technologies may pave the wave new potential in the Arctic, that is also true.
SS: I want to touch upon another very important topic - despite the fact that ISIS is being bombed by half of the world, it’s being attacked on the ground on all sides, it still manages to sell oil and make money off it. I don’t understand how, but can the International Energy Agency do something about it? Somebody has to be buying that oil it’s selling?
NT: That is an interesting question. You know, they sell the oil -
SS: And somebody buys it.
NT: This is the problem, right. So it is a matter of political coalition - how we can isolate ISIS. Somebody’s not really doing their share.
SS: So it’s in someone’s interest?
SS:Do you think people higher up in a…
NT: I don’t know, this is a very tricky question.
SS: Have you thought about it?
NT: Well, you know, how could this kind of thing happen is very political question, but probably the political alliance surrounding ISIS is not enough. Is it a government that is controlling all private sector or somebody else is doing this, who knows. Because we don’t have any proof so we cannot say. You’re right, if this is really happening this is really unfortunate.
SS:But then you know oil’s black market is not just ISIS and ISIS selling and making money off illicit oil sales -- it’s stolen by drug lords in Mexico, pirates in Nigeria, Libyan smugglers etc. So when you think about it illicit oil is sold everywhere from Latin America to Western Europe, costing the industry billions and billions of dollars. Can a black market of an industry as big as the oil industry ever be defeated?
NT: Well, I don’t know. I don’t have the facts to make a comment. But you know the black market exists anywhere. If government has not enough control over the situation or if there is not enough coalition or regulation among the country. So we need a strong political will to stop that, otherwise, you know, it does exist.
SS: There was a research by Ernst & Young that says that more than half of the illicit oil dealings are actually related to corrupt officials. So I'm just wondering, is the oil industry corrupt beyond hope?
NT: I cannot generalise, there are always corrupt officials anywhere. So is the oil industry corrupt by this kind of custom? Or is it only oil industry? Or any other industries are not corrupt?
SS: It’s just very - It screams out because there's just so much money in it and there's so much conflict over it, so...
NT: Yeah well...
SS: Because the oil industry is not supposed to be something illegal. I mean you can combat drug trafficking to start with with something illegal. The oil industry is supposed to be: I sell and you pay me, we're both in profit. And then you have this other part of it: more than half of illicit oil sales are due to corrupt officials. So it just makes you wonder how corrupt is it really?
NT: How corrupt they are - we don't have any tests. You know... this governance of the government issue is very important and this is more the choice of the people, democracy, or a way the international community works. So if there are so many corrupt -- corruption happening, certainly this makes the kind of let's say detriment to anybody's let's say situation. I think this is a matter of definite political will: how can we manage this situation. And is it an industry issue, is that a government issue? It's both. We have to work out if we have to set a target and make international rules around them, and if we don't abide, the penalty should be there. But rules must be clear, what we have to do. Otherwise just complaining will not lead us anywhere.
SS:Mr. Tanaka, I know you are a strong advocate of Asian rising giants - like China and India - to be admitted to the International Energy Agency. So both of these countries consume an enormous amount of energy, why haven’t they been admitted already?
NT: When I was executive director, I invited China and India to join IEA. They are interested in it, so they come to learn what we are doing. So it's a matter of learning process. They learn about energy efficiency, clean coal technologies which China and India needs very much. They learn about strategic stockpiles of oil policy - how to do that, went to use it. So they learn a lot. So gradually they’re cooperating even without membership. So now they became so-called associate members. So it's a process of joining. When they come to learn enough I think they have to join, but the problem is the current statutory agreement requires the members to be the members of the OECD first to become a member of the IEA. But China or India are not interested in joining OECD, because OECD is a rich man's club.
SS: But if they're not admitted to the IEA then they'll just create their own structure. And who needs that fragmentation?
NT: We have to separate this OECD membership and IEA membership first. So this is what IEA members should do first and offer China or India to be full members to the IEA. Otherwise they may not come in.
SS:You also said that for a better energy management Russia should be readmitted to the G8. How would that help stabilise world energy flow? I mean isn't G20 already enough?
NT: G20 is focusing more on financial stability. It was created during the time of the Lehman shock or the very financial crisis, so it is representing macroeconomy or financial market situation, banking etc. They do sometimes energy, but energy is not really the focal point of the G20, so I think G7 or G8 with Russia may be a kind of forum to discuss the energy issues more. Of course why not Saudi Arabia why no one other major energy players to join, this is always the question raised. In energy issues the major players are the United States, Russia and China, India, of course as a consumer there. So we have to have some new configuration to discuss the energy issue. So G7+ or some kind of new format may be necessary
SS:Europe up to now still relies heavily on Russian gas, but plans to build a pipeline from Russia to Germany have met resistance among some of the EU members. EU officials are actually saying that this project - the Nord Stream 2 - is destabilising the EU economy and coming in the way of the union’s unity. The way I see it - Europe needs Russian gas because it relies on it, we would be more than happy to sell it to them, so why undermine a perfectly good beneficial - mutually beneficial energy deal with some political tensions?
NT: Yeah, geopolitics is inevitable, it’s happening in many places in many situations so we cannot solve that quickly, but still Europe is importing 30% of their oil and 30% of their gas from Russia, right? And Russia is a very stable supplier of gas and oil to Europe. Russia needs to diversify the target countries to Asia. So you are exporting to China or Asian countries, so it's a matter of diversification. So for Russia diversification of the demand countries is necessary. For Europe or for importing countries, like Japan, we need to diversify our sources. Europe wants to diversify more to other countries but Japan needs more diversification from Middle East, so we need more Russian gas, Russian oil. So it's a matter of degree - what situation the countries are put in.
SS: Mr. Tanaka, thank you so much for this interview. We wish you all the best.
NT: Thank you very much for having me.
Are the meltdowns at Fukushima Daiichi over? The answer is no. Made all the more prevalent a year out from it's initial release by the recent robotic expeditions into Reactor #2 which gave us a clearer picture on just how deadly the radiation levels are, watch Chief Engineer and nuclear expert Arnie Gundersen inform viewers on what’s going on at the Japanese nuclear meltdown site, Fukushima Daiichi. As the Japanese government and utility owner Tokyo Electric Power Company push for the quick decommissioning and dismantling of this man-made disaster, the press and scientists need to ask, “Why is the Ukrainian government waiting at least 100 years to attempt to decommission Chernobyl, while the Japanese Government and TEPCO claim that Fukushima Daiichi will be decommissioned and dismantled during the next 30 years?” Article and video from http://www.fairewinds.org/.
Like so many big government + big business controversies, the answer has nothing to do with science, and everything to do with politics and money. To understand Fukushima Daiichi, you need to follow the money.Follow
Whats Up With Fukushima Decommissioning
Pat Thurston recently interviewed Arnie Gundersen, chief engineer for
Fairewinds Energy Education on KGO radio to discuss the latest
challenging news from Japan about the Fukushima Daiichi atomic power
reactor including the high levels of radiation emanating from the
reactors, all the failed robotic expeditions, where we should go from
here, as well as how ongoing radioactive releases from the Fukushima
Daiichi site may be impacting the west coast of the United
Newsday: BBC Radio interviewed nuclear
engineer Arnie Gundersen to discuss TEPCO’s attempts to send a special
robot into Fukushima Daiichi Reactor #2 in Japan to investigate the
obstacles in the way of TEPCO’s progress determining the location and
condition of the atomic fuel. Unfortunately even this specially
designed robot failed in its attempt to clear the path for additional
investigations as the nuclear radioactivity was so high, it shut down
the robots before they could complete their mission.
Fairewinds in the News:
News: The astronomical radiation readings at Fukushima
Daiichi Reactor #2 of 530 Sv/hr complicate the already complex task of
decommissioning the plant. These levels are so radioactive that a
human would be dead within a minute of exposure and specially designed
robots can only survive for about 2 hours. Fairewinds chief engineer
Arnie Gundersen says that the best solution would be to entomb the
reactors, similar to the sarcophagus entombing Chernobyl, for at least
100-years, otherwise the radiation level that workers would be exposed
to is simply too dangerous.
the whole article here
Washington’s intention to overthrow Syria's legitimate and democratically-elected President Bashar al-Assad results from his refusal to back a Qatari gas pipeline project, an attorney says. Article first published by Iranian Press TV at http://www.presstv.ir/Detail/2016/03/03/453669/Washington-Bashar-alAssad-Qatari-gas-pipeline-project
According to an article published by Politico on Thursday, American attorney and nephew of US President John F. Kennedy, Robert F. Kennedy Jr., wrote that the US decided to topple Assad after he declined to back a gas pipeline project of the Qatari government. Article first published by Iranian Press TV at http://www.presstv.ir/Detail/2016/03/03/453669/Washington-Bashar-alAssad-Qatari-gas-pipeline-project
The project was aimed at building a gas link from Qatar through Saudi Arabia, Jordan, Syria and Turkey to Europe.
The $10 billion pipeline project first surfaced in 2000 and the CIA went ahead with the plan until nine years later Assad announced that he would not support the pipeline initiative, a move that could grant Qatar direct access to European energy markets via terminals in Turkey.
“Soon after that the CIA began funding opposition groups in Syria," said Kennedy.
“If completed, the project would have had major geopolitical implications. Ankara would have profited from rich transit fees. The project would have also given the Sunni kingdoms of the Persian Gulf decisive domination of world natural gas markets and strengthen Qatar, America's closest ally in the Arab world," he noted.
Kennedy added that the pipeline would have also strengthened Saudi Arabia by giving the kingdom additional leverage against Iran.
In a separate interview with Sputnik, Kennedy said, “If we study the history of America’s relation with Mideast and looking at the US’ violent intervention in Syria, Iraq, Jordan, Saudi Arabia and Egypt over time and the extraordinary and astonishing thing is the solid record of the cataclysmic failure every time we venture there in violent fashion. Most Americans are completely unaware of us attempting to overthrow the democratically elected government in Syria, contrary to our own state department policy and contrary to American values.”
Since March 2011, the United States and its regional allies, in particular Saudi Arabia, Qatar and Turkey, have been conducting a proxy war against Syria. The years-long conflict has left somewhere between 270,000 to 470,000 Syrians dead and half of the country’s population displaced.
Read comments on the original article here: http://www.presstv.ir/Detail/2016/03/03/453669/Washington-Bashar-alAssad-Qatari-gas-pipeline-project
The protection of owls might soon go to the Supreme Court and a proposed regulatory change will allow native forest wood to be burnt for electricity. It was been tabled in the House of Reps today, 27 May 2015. There is a danger that Bill Shorten's Labor Party might support the bill, despite what that says about our renewable energy scheme. Read on to find out how we might fight this.
The court-ordered mediation with the department and VicForests last week did not resolve.
The next step is a Directions hearing on the 26th of June to have the matter heard in the Supreme Court.
We can’t give you much more detail than that at this stage. In the meantime, #105ef3;font-weight:normal;text-decoration:underline" target="_blank">tell Minister Neville and her Department to protect our rare Owls and their forest in East Gippsland. And if you’d like to help us along with this 4th legal challenge (so far we’ve won or settled 3/3) #105ef3;font-weight:normal;text-decoration:underline" target="_blank">click here to make a tax-deductible donation.”
Read the background to this case #105ef3;font-weight:normal;text-decoration:underline" target="_blank">here
The regulatory change that will allow native forest wood to be burnt for electricity has been tabled in the House of Reps today.
It looks like Bill Shorten’s Labor Party might support the bill, even though it means undermining our renewable energy scheme. This is urgent. Please make a quick phone call to Bill Shorten's office and urge that Labor opposes this. (02) 6277 4022.
If Labor opposes this, the vote will be decided by the independents on the crossbench in the Senate. The Senate sits again on June 15, so contact the cross benchers and let them know that you want them to vote against the change to the regulation.
A few suggested points to raise are available #105ef3;font-weight:normal;text-decoration:underline" target="_blank">here
Some of the crossbenchers have been concerned that the industry will need certainty, and Labor could reverse the regulatory change next in government, so that uncertainty is a point to raise as well. Plus, many still believe the lie that the ‘waste’ will only be the heads and sweepings (!) There needs to be a very clear definition provided before anyone votes on this.
From our experience, emails are good but can get ‘lost’, so phone calls or tweets are better.
Ricky Muir (03) 5144 3639
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
Glenn Lazarus (07) 3001 8940
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
Nick Xenophon 08 8232 1144
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
John Madigan (03) 5331 2321
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
Dio Wang (08) 9221 2233
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
David Leyonhjelm (02) 9719 1078
#105ef3;font-weight:normal;text-decoration:underline" target="_blank">[email protected]
Update 1 June 2015: See new related articles: "Concern that Australian PM Abbott position on MH17 has no solid basis and is unfair to Russia" and "Anti-Russia Sanctions rely on False Statement by Julie Bishop, Australian Foreign Affairs and Trade Minister." This is an occasion for people to make factually based comments and inquiries to the Department of Foreign Affairs and Trade and the Prime Minister's Office on the way Australia is participating in what appear to be ill-based hostilities. See ABC Australia apologises for bias against Russia in reporting MH17 crash and general tag: http://candobetter.net/taxonomy/term/585. This human aspect, coupled with the involvement of oil industry concerns, highlights the problems associated with globalised, commercialised universities, globalisation and US/NATO alliances and energy resources. This is yet another warning signal of a population and economy in overshoot, locally and internationally. Expansionism is driving blocs of countries into a collision course. Our association with America has made us officially unfriendly with a large number of countries and complicit in the destruction of several. Human rights obligations are under scrutiny. We must pull back from escalations like these. [Ed. Broken link now fixed.]
We believe that some Australian universities may be sending away Russian PhD students, as under new sanctions they are not allowed to teach some of them.
Students must certify that they are not studying in any of the areas related to the new sanctions policy, otherwise their projects cannot be continued. See below statement by the University of Queensland, last updated: May 4, 2015 at http://www.uq.edu.au/grad-school/sanctions.
"The Regulation amends the Autonomous Sanctions Regulations 2011 (the Principal Regulations) by expanding the scope of existing measures in relation to Russia. These measures include an arms embargo, restrictions on the access of Russian state-owned banks to Australian capital markets, preventing the export of goods and services for use in Russia’s oil exploration or production, and restrictions on Australian trade and investment in Crimea." (Excerpt from the attached "Explanatory Statement to F2015L00356")
This document also goes into the possibility that the sanctions might contravene human rights obligations, but argues with itself that it does not:
"The human rights obligation that may possibly be affected by the amendment to the Regulation is the presumption of innocence. Article 14(2) of the International Covenant on Civil and Political Rights (ICCPR) provides that everyone charged with a criminal offence shall have the right to be presumed innocent until proven guilty according to law. As strict liability offences allow for the imposition of criminal liability without the need to prove fault, all strict liability offences engage the presumption of innocence in article 14(2) of the ICCPR. A strict liability offence will not necessarily violate the presumption of innocence provided that it is: (i) aimed at achieving a purpose which is legitimate; (ii) based on reasonable and objective criteria, and (iii) proportionate to the aim to be achieved.
Regulations 12, 12A, 13 and 13A of the Principal Regulation provide that strict liability applies to the circumstance that the sanctioned supply, sanctioned import, sanctioned service or sanctioned commercial activity is not authorised by a permit under regulation 18 of the Principal Regulation. The Amendment Regulation extends these provisions to certain supplies, imports, services or commercial activity in relation to Russia, Crimea and Sevastopol. The effect of this is that strict liability applies to the existence or otherwise of a sanctions permit. For an individual, strict liability will not to apply to any other element of the offence. The purpose of this provision is to prevent a spurious defence that a statement of the Minister could be taken as de facto authorisation to engage in conduct that is prohibited under the Act.
Either the permit exists or it does not exist." (Excerpt from the attached "Explanatory Statement to F2015L00356")
This news-article post is made quickly and without yet having absorbed the detail of allegations against Russia - if it is available in these documents or elsewhere.
See also Autonomous Sanctions (Russia, Crimea and Sevastopol) Specification 2015- F2015L00390 which is dated 1 March 2015 with the date to be ceased in 2025. It seems utterly amazing that we are cutting ourselves off from Russian and affiliated bloc knowledge and expertise gained independently and complemetarily to the familiar Western sources on the basis of extremely flimsy allegations.
One fervently hopes that Julia Bishop will show the initiative she has shown in Iran and seek detailed dialogue with Russia's foreign affairs and trade ministers and President Putin in these matters and that they will quickly be resolved. One also fervently hopes that the whole US/NATO incursion on Russia's borders and in the Middle East will be quickly scaled down, despite the growing influence of "Hawks" behind the United States' current expansive and warlike policies. As things seem to stand, our dependence on the United States looks like a liability and puts us at odds in many cases with Indonesia and other countries we have strong associations with, due to the US's anti-Russia attitude and its incursions in the Middle East.
Below is a quote from a statement by the University of Queensland, last updated: May 4, 2015 at http://www.uq.edu.au/grad-school/sanctions.
"Sanctions and UQ
Of particular relevance to UQ is the provision of technical training or assistance related to military activities and/or the provision, manufacture, maintenance or use of arms and related material of all types including; weapons, ammunition, military vehicles and equipment, paramilitary equipment, spare parts and accessories for the former. This includes goods present on the Defence and Strategic Goods List (DSGL), including ‘dual use goods’ which may not be of a military nature.
Iran, Syria, Russia and Ukraine also have specific sanctions in terms of ‘export sanctioned goods’. The provision of technical training or assistance in the use, development, manufacture or maintenance of these goods is also of relevance to the University.
Studying at UQ
For all applicants who are a citizen of a country listed above, including those who are a permanent resident or hold dual citizenship of Australia, the Graduate School is required to complete an assessment of the proposed research project against current sanction regimes. In some cases a review by the Department of Foreign Affairs and Trade (DFAT) is also required.
The assessment will include the nature of the research project as well as the goods and equipment that will be used throughout the program.
This will mean that an application for admission and scholarship will take longer to process. In order to assist UQ with the sanctions assessment applicants will need to submit a 2-4 page research proposal with their application.
Unfortunately some applicants may not be able to study their intended or preferred research topic, and a revision of the research project for Research Higher Degree study may be required."
We attach the government's "Explanatory Statement to F2015L00356" in regard to this matter.
Ernst and Young, leading consultants to the Queensland government have released a report claiming that electricity costs would be lower under privatisation. Although the report was commissioned by private infrastructure lobby group Infrastructure Partners Australia, it's just a rehash of the same line EY have been pushing for years in similar reports commissioned by pro-privatisation governments. The central claim is that electricity prices have risen more in Queensland and NSW, under corporatisation than in Victoria and SA, under privatisation. What they don't tell you is that this merely offsets increases imposed in the leadup to privatisation, with the result that retail prices are much the same in all four states, and far higher than when the process of market reform (supposedly to reduce prices through competition) began in the 1990s.
Professor John Quiggin, of the University of Queensland criticised the Ernst and Young report on privatisation of the electricity industry.
The Ernst and Young report ignores the biggest factor leading to higher electricity prices throughout Australia: the failed process of market reform, corporatisation and privatisation of which the LNP government’s asset sales is a part, rofessor Quiggin said.
Although the problems have differed from state to state, there is no evidence that states which undertook full scale privatisation in the 1990s have performed any better. South Australia has some of the highest electricity prices in the world, and Victorian prices are comparable to those in NSW and Queensland.
Candobetter.net's Editor's comment. There is a very good resource on privatisation here: http://www.herinst.org/BusinessManagedDemocracy/government/privatisation/risk.html
Lada Ray reports that Russia will stop transporting gas to Europe via Ukraine and redirect it through Turkey. She also describes Ukraine activities leading up to renewed war on East Ukraine, with the US, France and Poland having agreed to supply advanced arms to Ukraine. In addition, two ships, one from Australia and one from Canada docked in the Odessa port in the past week to two. Each was full of winter uniforms for the Ukraine army. The following article is from Lada Ray's English language blog at https://futuristrendcast.wordpress.com/2015/01/15/confirmed-russia-to-stop-transit-of-gas-to-europe-through-ukraine/
This is a bombshell that was dropped by Russia earlier today.
It has been officially confirmed! The head of Gazprom Alexei Miller announced that Russia would discontinue the Ukrainian route for Russian gas transit to the EU. I expected this announcement ever since I broke the news of the Turkey/Russia deal on 12/2/14, but I did expect it in a year or two: read here and here. Looks like the time is getting compressed and the pressure for change is intensifying.
I understand at this time the flow of gas through Ukraine has been restricted to 2/5th of the usual volume. However, it appears it will soon be stopped completely.
Russia to switch fully to the Turkish Stream to move the quantities necessary to satisfy all of European demand. Ukraine up till now was responsible for about 50% of the Russian gas transit to the EU, with Nord Stream, Belarus and Turkey accounting for the rest.
Ukraine, as always during the heating season, has been stealing Russian gas. This is in addition to massive debt Ukraine has with Russia. Russia is by far Ukraine’s largest creditor; gas debt alone constitutes nearly $5.5 bln. Total Ukraine’s debt to Russia, including corporate is well over $30 bln, according to Vladimir Putin.
This is a much bolder move than anyone expected. EU is in shock. According to Gazrpom’s head Alexei Miller, EU didn’t want South Stream Russia tried to build as partners together with the EU. Therefore, Russia will now deliver gas to Turkey, and then to the border between Turkey and Greece. From thereon, it will be EU’s responsibility to build pipelines through its territory.
Gazrpom is to become a big player in Turkey, and Turkey in return will enjoy massive gas price discounts and large profits from the resale of gas to the EU and other buyers.
Read related articles from 12/2/14: German Vice Chancellor: No Ukraine in NATO; Russia, Let’s Make Up! and from 12/5/14: Declaration of Cold War: What Chain of Events is US Provoking With New Hostile Move? In these I discuss in detail the Putin/Erdogan agreement on building the alternative pipeline to Turkey!
I see several interesting things at play here:
1. My predictions:
First of all, let’s recall that I said from the beginning of 2014 and many times throughout 2014 that when Russia feels even slightly inconvenienced by the West, off to the East they go. My prediction came true spectacularly within only two or three months, when in May 2014 Russia signed a number of mega-deals with China on gas supply, the Power of Siberia gas pipeline construction, high-speed railroad construction, and much more. Then, Putin also signed massive gas supply deal with Turkey to bypass the unfriendly EU, plus, a massive nuclear energy deal. Turkey is, of course, also a part of the East (Middle East).
Second prediction I made was that Europe would start experiencing gas shortages due to Russia’s re-orientation to the East. I said it would happen a few years from now. It appears my predictions’ time table is accelerating!
See the PREDICTIONS page on top navigation bar, as well as my 2014 articles under RUSSIA category for much more on that. Some of the articles are: What Brought Down Russian Satellite? Angela Merkel’s Biggest Fear? Plus Ukraine Election Prediction; Ukraine Part 7: Russia’s Geopolitics, USA’s Bluff and EU’s Big Mistake; Interview with predictions: The Road to Moscow Goes Through Kiev.
2. It seems Miller and Gazprom are very confident that EU has no alternative to the Russian gas at this time. For the longest time EU and Ukraine had been able to blackmail Russia every year, taking advantage of the fact that the EU was Russia’s largest customer and Ukraine – the largest transit artery.
Russia was customarily accused of various transgressions, the blame was yearly shifted to Russia for any gas flow disruptions due to Ukraine’s stealing of Russian gas; the expense for Ukraine’s theft was also placed on Russia’s shoulders alone, while EU denied any responsibility, always siding with Ukraine. It appears Russia/Gazprom feel that enough is enough and that it’s time to cut the Gordian Knot. The fact that Russia now has strategic agreements with Turkey and China helps Russia’s leverage.
3. This is where the economy and geopolitics mix. Russia warned a long time ago that should EU’s behavior not change, there would eventually be more return sanctions. It appears Russia wasn’t kidding!
Recent events, in which Ukraine and certain EU countries acted strangely, to say the least, apparently were the last drop, reinforcing Russia’s intentions. The events I am referring to were: Ukraine PM Yatsenyuk giving multiple interviews and speeches in Germany accusing Russia of attacking the Nazi Germany and Ukraine, while Merkel stood by him, failing to react to the outright lie. The recent Volnovakha, Donbass tragedy in which 10 people died and scores were wounded when a bus with Donetsk pensioners was hit by a bomb or a mine on the Ukraine side. This incident was immediately blamed on the Donbass self-defence. Ukraine tried to get EU to recognize LNR and DNR as terrorist organizations, while designating Russia as the state aiding terrorism, followed by a new round of sanctions. While the resolution failed, another resolution to adopt a new round of anti-Russian sanctions may pass (I don’t have the latest on that). Meanwhile, per reports, US, France and Poland, among others, have agreed to supply advanced arms to Ukraine. In addition, two ships, one from Australia and one from Canada docked in the Odessa port in the past week to two. Each was full of winter uniforms for the Ukraine army. Poroshenko went to Paris to participate in the Unity March together with Merkel and Hollande, as I wrote here, to express solidarity with the victims of the French terrorist acts, while hundreds and thousands were dying at home unnoticed by anyone. Poroshenko’s trip strangely coincided with Yatsenyuk trying to promote Russia as aggressor in Germany and the Volnovakha bus tragedy. Right after returning from France Poroshenko announced three new waves of mobilization to recruit over 200,000 soldiers – we now know that when they re-start the war with Donbass, they’ll be able to kill more efficiently thanks to all those Australian and Canadian uniforms keeping them nice and warm. In the meantime, the bombings of Donbass have intensified by 10-20 times. For the past week or so the number of dead and wounded from Ukraine’s shelling is greater than for the past 3-4 months combined – exact numbers are not known yet, but the preliminary number is 52 dead during the past few days. As a result of Poroshenko’s visit to Paris and the killing of 10 civilians in Volnovakha, the Astana, Kazakhstan peace conference planned for today, January 15, was cancelled. To wrap up the vicious cycle of events, the man who was instrumental in organizing the Astana peace conference was The French president, Hollande. Please refer back to my article: Urgent! Secret Link Between French False Flag Attacks and Ukraine, in which I also said that Hollande was wavering from the party line, trying to play peacemaker, and terror acts in France were meant to remind him to toe the line. Finally, S&P and other Western agencies are set to lower Russia’s rating to junk status: China/Russia to Launch Own Credit Rating Agency to Rival the Big Three.
4. US has been trying to squeeze Russia out of the EU gas market in order to sell to the EU its own, more expensive, shale gas. The shale industry in the US is in difficult circumstances and many fields have been conserved because of low prices and insufficient international demand for the US shale gas. The banks that financed fracking companies are afraid of not getting their money back; many are on the verge of bankruptcy. Obtaining the lucrative EU market is the best thing for the US. Of course the expensive US shale gas will undermine the EU economy, making EU products less competitive, which will help the US economy and keep EU on a short leash for the US purposes. However, building LNG terminals is expensive, they take a lot of valuable space near ports, and it takes time. Such infrastructure isn’t available for the time being. It appears that despite tough talk, EU is ‘stuck’ with cheaper and readily available Russian gas.
5. World Grand-Master Putin at work! Russia’s leverage has increased exponentially from signing strategic mega-deals with China last May and Turkey last December. It appears Putin has decided this was the right time to play one of Russia’s aces; or if you will, to play Russia’s Turkish Gambit!
6. Last fall, when Russia, Ukraine and EU negotiated, EU promised to vouch for Ukraine’s payment for the ongoing supply of Russian gas. In reality, Ukraine never re-paid $3.1 bln in past arrears due before New Year’s. EU also didn’t vouch for Ukraine’s payments past New Year’s. Therefore, any gas Ukraine receives now is unpaid for, which in itself triggers gas supply stoppage.
7. The Ukraine pipeline infrastructure is Soviet built and was never really maintained by Ukraine. It’s either time to fix it, or to abandon it. Perhaps this is the right time to abandon what cannot be fixed – and I am speaking broadly. Ukraine and EU’s behavior have gone far beyond any permissible or even conceivable. The way Ukraine and EU behave towards Russia can be expressed by the following Russian sayings: ‘to spit into a well from which you drink’ and ‘to saw off the branch you are sitting on.’ It appears that with those who don’t understand good will, reason or logic the only way is the way of an ultimatum.
Did the U.S. and the Saudis Conspire to Push Down Oil Prices? Article by Mike Whitney, republished with permission from Counterpunch.
“Saudi oil policy… has been subject to a great deal of wild and inaccurate conjecture in recent weeks. We do not seek to politicize oil… For us it’s a question of supply and demand, it’s purely business.”
– Ali al Naimi, Saudi Oil Minister
“There is no conspiracy, there is no targeting of anyone. This is a market and it goes up and down.”
– Suhail Bin Mohammed al-Mazroui, United Arab Emirates’ petroleum minister
“We all see the lowering of oil prices. There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.”
Are falling oil prices part of a US-Saudi plan to inflict economic damage on Russia, Iran and Venezuela?
Venezuelan President Nicolas Maduro seems to think so. In a recent interview that appeared in Reuters, Maduro said he thought the United States and Saudi Arabia wanted to drive down oil prices “to harm Russia.”
Bolivian President Evo Morales agrees with Maduro and told journalists at RT that: “The reduction in oil prices was provoked by the US as an attack on the economies of Venezuela and Russia. In the face of such economic and political attacks, the nations must be united.”
Iranian President Hassan Rouhani said the same thing,with a slightly different twist: “The main reason for (the oil price plunge) is a political conspiracy by certain countries against the interests of the region and the Islamic world … Iran and people of the region will not forget such … treachery against the interests of the Muslim world.”
US-Saudi “treachery”? Is that what’s really driving down oil prices?
Not according to Saudi Arabia’s Petroleum Minister Ali al-Naimi. Al-Naimi has repeatedly denied claims that the kingdom is involved in a conspiracy. He says the tumbling prices are the result of “A lack of cooperation by non-OPEC production nations, along with the spread of misinformation and speculator’s greed.” In other words, everyone else is to blame except the country that has historically kept prices high by controlling output. That’s a bit of a stretch, don’t you think? Especially since–according to the Financial Times — OPEC’s de facto leader has abandoned the cartel’s “traditional strategy” and announced that it won’t cut production even if prices drop to $20 per barrel.
Why? Why would the Saudis suddenly abandon a strategy that allowed them to rake in twice as much dough as they are today? Don’t they like money anymore?
And why would al-Naimi be so eager to crash prices, send Middle East stock markets into freefall, increase the kingdom’s budget deficits to a record-high 5 percent of GDP, and create widespread financial instability? Is grabbing “market share” really that important or is there something else going on here below the surface?
The Guardian’s Larry Elliot thinks the US and Saudi Arabia are engaged a conspiracy to push down oil prices. He points to a September meeting between John Kerry and Saudi King Abdullah where a deal was made to boost production in order to hurt Iran and Russia. Here’s a clip from the article titled “Stakes are high as US plays the oil card against Iran and Russia”:
“…with the help of its Saudi ally, Washington is trying to drive down the oil price by ?ooding an already weak market with crude. As the Russians and the Iranians are heavily dependent on oil exports, the assumption is that they will become easier to deal with…
John Kerry, the US secretary of state, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.
The Saudis did something similar in the mid-1980s. Then, the geopolitical motivation for a move that sent the oil price to below $10 a barrel was to destabilize Saddam Hussein’s regime. This time, according to Middle East specialists, the Saudis want to put pressure on Iran and to force Moscow to weaken its support for the Assad regime in Syria… (Stakes are high as US plays the oil card against Iran and Russia, Guardian)
That’s the gist of Elliot’s theory, but is he right?
Vladimir Putin isn’t so sure. Unlike Morales, Maduro and Rouhani, the Russian president has been reluctant to blame falling prices on US-Saudi collusion. In an article in Itar-Tass, Putin opined:
“There’s a lot of talk around” in what concerns the causes for the slide of oil prices, he said at a major annual news conference. “Some people say there is conspiracy between Saudi Arabia and the US in order to punish Iran or to depress the Russian economy or to exert impact on Venezuela.”
“It might be really so or might be different, or there might be the struggle of traditional producers of crude oil and shale oil,” Putin said. “Given the current situation on the market the production of shale oil and gas has practically reached the level of zero operating costs.” (Putin says oil market price conspiracy between Saudi Arabia and US not ruled out, Itar-Tass)
As always, Putin takes the most moderate position, that is, that Washington and the Saudis may be in cahoots, but that droopy prices might simply be a sign of over-supply and weakening demand. In other words, there could be a plot, but then again, maybe not. Putin is a man who avoids passing judgment without sufficient evidence.
The same can’t be said of the Washington Post. In a recent article, WP journalist Chris Mooney dismisses anyone who thinks oil prices are the result of US-Saudi collaboration as “kooky conspiracy theorists”. According to Mooney:
“The reasons for the sudden (price) swing are not particularly glamorous: They involve factors like supply and demand, oil companies having invested heavily in exploration several years ago to produce a glut of oil that has now hit the market — and then, perhaps, the “lack of cohesion” among the diverse members of OPEC.” (Why there are so many kooky conspiracy theories about oil, Washington Post)
Oddly enough, Mooney disproves his own theory a few paragraphs later in the same piece when he says:
“Oil producers really do coordinate. And then, there’s OPEC, which is widely referred to in the press as a “cartel,” and which states up front that its mission is to “coordinate and unify the petroleum policies” of its 12 member countries…. Again, there’s that veneer of plausibility to the idea of some grand oil related strategy.” (WP)
Let me get this straight: One the one hand Mooney agrees that OPEC is a cartel that “coordinates and unify the petroleum policies”, then on the other, he says that market fundamentals are at work. Can you see the disconnect? Cartels obstruct normal supply-demand dynamics by fixing prices, which Mooney seems to breezily ignore.
Also, he scoffs at the idea of “some grand oil related strategy” as if these cartel nations were philanthropic organizations operating in the service of humanity. Right. Someone needs to clue Mooney in on the fact that OPEC is not the Peace Corps. They are monopolizing amalgam of cutthroat extortionists whose only interest is maximizing profits while increasing their own political power. Surely, we can all agree on that fact.
What’s really wrong with Mooney’s article, is that he misses the point entirely. The debate is NOT between so-called “conspiracy theorists” and those who think market forces alone explain the falling prices. It’s between the people who think that the Saudis decision to flood the market is driven by politics rather than a desire to grab “market share.” That’s where people disagree. No denies that there’s manipulation; they merely disagree about the motive. This glaring fact seems to escape Mooney who is on a mission to discredit conspiracy theorists at all cost. Here’s more:
(There’s) “a long tradition of conspiracy theorists who have surmised that the world’s great oil powers — whether countries or mega-corporations — are secretly pulling strings to shape world events.”…
“A lot of conspiracy theories take as their premise that there’s a small group of people who are plotting to control something, to control the government, the banking system, or the main energy source, and they are doing this to the disadvantage of everybody else,” says University of California-Davis historian Kathy Olmsted, author of “Real Enemies: Conspiracy Theories and American Democracy, World War I to 9/11?. (Washington Post)
Got that? Now find me one person who doesn’t think the world is run by a small group of rich, powerful people who operate in their own best interests? Here’s more from the same article:
(Oil) “It’s the perfect lever for shifting world events. If you were a mad secret society with world-dominating aspirations and lots of power, how would you tweak the world to create cascading outcomes that could topple governments and enrich some at the expense of others? It’s hard to see a better lever than the price of oil, given its integral role in the world economy.” (WP)
“A mad secret society”? Has Mooney noticed that — in the last decade and a half — the US has only invaded nations that have huge natural resources (mainly oil and natural gas) or the geography for critical pipeline routes? There’s nothing particularly secret about it, is there?
The United States is not a “mad secret society with world-dominating aspirations”. It’s a empire with blatantly obvious “world-dominating aspirations” run by political puppets who do the work of wealthy elites and corporations. Any sentient being who’s bright enough to browse the daily headlines can figure that one out.
Mooney’s grand finale:
“So in sum, with a surprising and dramatic event like this year’s oil price decline, it would be shocking if it did not generate conspiracy theories. Humans believe them all too easily. And they’re a lot more colorful than a more technical (and accurate) story about supply and demand.” (WP)
Ah, yes. Now I see. Those darn “humans”. They’re so weak-minded they’ll believe anything you tell them, which is why they need someone as smart as Mooney tell them how the world really works.
Have you ever read such nonsense in your life? On top of that, he gets the whole story wrong. This isn’t about market fundamentals. It’s about manipulation. Are the Saudis manipulating supply to grab market share or for political reasons? THAT’S THE QUESTION. The fact that they ARE manipulating supply is not challenged by anyone including the uber-conservative Financial Times that deliberately pointed out that the Saudis had abandoned their traditional role of cutting supply to support prices. That’s what a “swing state” does; it manipulates supply keep prices higher than they would be if market forces were allowed to operate unimpeded.
So what is the motive driving the policy; that’s what we want to know?
Certainly there’s a strong case to be made for market share. No one denies that. If the Saudis keep prices at rock bottom for a prolonged period of time, then a high percentage of the producers (that can’t survive at prices below $70 per barrel) will default leaving OPEC with greater market share and more control over pricing.
So market share is certainly a factor. But is it the only factor?
Is it so far fetched to think that the United States–which in the last year has imposed harsh economic sanctions on Russia, made every effort to sabotage the South Stream pipeline, and toppled the government in Kiev so it could control the flow of Russian gas to countries in the EU–would coerce the Saudis into flooding the market with oil in order to decimate the Russian economy, savage the ruble, and create favorable conditions for regime change in Moscow? Is that so hard to believe?
Apparently New York Times columnist Thomas Freidman doesn’t think so. Here’s how he summed it up in a piece last month: “Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other?”
It sounds like Freidman has joined the conspiracy throng, doesn’t it? And he’s not alone either. This is from Alex Lantier at the World Socialist Web Site:
“While there are a host of global economic factors underlying the fall in oil prices, it is unquestionable that a major role in the commodity’s staggering plunge is Washington’s collaboration with OPEC and the Saudi monarchs in Riyadh to boost production and increase the glut on world oil markets.
As Obama traveled to Saudi Arabia after the outbreak of the Ukraine crisis last March, the Guardian wrote, “Angered by the Soviet invasion of Afghanistan in 1979, the Saudis turned on the oil taps, driving down the global price of crude until it reached $20 a barrel (in today’s prices) in the mid-1980s… [Today] the Saudis might be up for such a move—which would also boost global growth—in order to punish Putin over his support for the Assad regime in Syria. Has Washington floated this idea with Riyadh? It would be a surprise if it hasn’t.” (Alex Lantier, Imperialism and the ruble crisis, World Socialist Web Site)
And here’s an intriguing clip from an article at Reuters that suggests the Obama administration is behind the present Saudi policy:
“U.S. Secretary of State John Kerry sidestepped the issue (of a US-Saudi plot) after a trip to Saudi Arabia in September. Asked if past discussions with Riyadh had touched on Russia’s need for oil above $100 to balance its budget, he smiled and said: “They (Saudis) are very, very well aware of their ability to have an impact on global oil prices.” (Saudi oil policy uncertainty unleashes the conspiracy theorists, Reuters)
Of course, they’re in bed together. Saudi Arabia is a US client. It’s not autonomous or sovereign in any meaningful way. It’s a US protectorate, a satellite, a colony. They do what they’re told. Period. True, the relationship is complex, but let’s not be ridiculous. The Saudis are not calling the shots. The idea is absurd. Do you really think that Washington would let Riyadh fiddle prices in a way that destroyed critical US domestic energy industries, ravaged the junk bond market, and generated widespread financial instability without uttering a peep of protest on the matter?
Dream on! If the US was unhappy with the Saudis, we’d all know about it in short-order because it would be raining Daisy Cutters from the Persian Gulf to the Red Sea, which is the way that Washington normally expresses its displeasure on such matters. The fact that Obama has not even alluded to the shocking plunge in prices just proves that the policy coincides with Washington’s broader geopolitical strategy.
And let’s not forget that the Saudis have used oil as a political weapon before, many times before. Indeed, wreaking havoc is nothing new for our good buddies the Saudis. Check this out from Oil Price website:
“In 1973, Egyptian President Anwar Sadat convinced Saudi King Faisal to cut production and raise prices, then to go as far as embargoing oil exports, all with the goal of punishing the United States for supporting Israel against the Arab states. It worked. The “oil price shock” quadrupled prices.
It happened again in 1986, when Saudi Arabia-led OPEC allowed prices to drop precipitously, and then in 1990, when the Saudis sent prices plummeting as a way of taking out Russia, which was seen as a threat to their oil supremacy. In 1998, they succeeded. When the oil price was halved from $25 to $12, Russia defaulted on its debt.
The Saudis and other OPEC members have, of course, used the oil price for the obverse effect, that is, suppressing production to keep prices artificially high and member states swimming in “petrodollars”. In 2008, oil peaked at $147 a barrel.” (Did The Saudis And The US Collude In Dropping Oil Prices?, Oil Price)
1973, 1986, 1990, 1998 and 2008.
So, according to the author, the Saudis have manipulated oil prices at least five times in the past to achieve their foreign policy objectives. But, if that’s the case, then why does the media ridicule people who think the Saudis might be engaged in a similar strategy today?
Could it be that the media is trying to shape public opinion on the issue and, by doing so, actually contribute to the plunge in oil prices?
Bingo. Alert readers have probably noticed that the oil story has been splashed across the headlines for weeks even though the basic facts have not changed in the least. It’s all a rehash of the same tedious story reprinted over and over again. But, why? Why does the public need to have the same “Saudis refuse to cut production” story driven into their consciousness day after day like they’re part of some great collective brainwashing experiment? Could it be that every time the message is repeated, oil sells off, and prices go down? Is that it?
Precisely. For example, last week a refinery was attacked in Libya which pushed oil prices up almost immediately. Just hours later, however, another “Saudis refuse to cut production” story conveniently popped up in all the major US media which pushed prices in the direction the USG wants them to go, er, I mean, back down again.
This is how the media helps to reinforce government policy, by crafting a message that helps to push down prices and, thus, hurt “evil” Putin. (This is called “jawboning”) Keep in mind, that OPEC doesn’t meet again until June, 2015, so there’s nothing new to report on production levels. But that doesn’t mean we’re not going to get regular updates on the “Saudis refuse to cut production” story. Oh, no. The media is going to keep beating that drum until Putin cries “Uncle” and submits to US directives. Either that, or the bond market is going to blow up and take the whole damn global financial system along with it. One way or another, something’s got to give.
Bottom line: Falling oil prices and the plunging ruble are not some kind of free market accident brought on by oversupply and weak demand. That’s baloney. They’re part of a broader geopolitical strategy to strangle the Russian economy, topple Putin, and establish US hegemony across the Asian landmass. It’s all part of Washington’s plan to maintain its top-spot as the world’s only superpower even though its economy is in irreversible decline.
MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at [email protected].
The plain truth:
- 10,000 years ago humans and our livestock occupied just 0.01% of all the land-air vertebrate biomass on earth.
- Now humans and our livestock occupy 97% of all land-air vertebrate biomass.
- Humans and our livestock now consume over 40% of earth’s annual green land biomass production.
- 1 million people born every 4½ days. People live longer.
What does this mean?
- 50% of All Vertebrate Species will be gone by 2040.
There is no embed function for the following film, but it is very worth looking at:
What have we done?
- 90% of Big Ocean Fish gone since 1950.
- 50% of Great Barrier Reef gone since 1985.
- 50% of Fresh Water Fish gone since 1987.
- 30% of Marine Birds gone since 1995.
- 28% of Land Animals gone since 1970.
- 28% of All Marine Animals gone since 1970.
- 50% of Human Sperm Counts gone since 1950.
- 90% of Lions gone since 1993.
- 90% of Monarch Butterflies gone since 1995.
- 93 Elephants killed every single day.
- 2-3 Rhinos killed every single day.
- Bees die from malnutrition lacking bio-diverse pollen sources.
- Extinctions are 1000 times faster than normal.
What’s going to happen to us?
- Ocean acidification doubles by 2050.
- Ocean acidification triples by 2100.
- We are on track in just 13 years to lock in a near term 6°C earth temp rise.
- Mass Extinction will become unstoppable and irreversible in 40 years.
- Permian mass extinction of 95% of life took 60,000 years 250 million years ago.
- Dinosaurs mass extinction took 33,000 years after asteroid impact.
- Anthropogenic mass extinction will take 300 years max.
- This mass extinction is 100x faster than anything before us.
- Antarctic meltdown now irreversible and unstoppable.
- Arctic methane burst is irreversible and unstoppable within current system.
- It takes 10 times as much rated “green” energy to displace 1 unit of fossil energy.
- Efficiency and conservation only causes more growth within our current system.
World Bank says we have 5-10 years before we all fight for food and water.
What we are doing right now!
- We combine bacteria DNA with plant DNA and eat it.
- We are eating stuff that never, ever existed on earth before.
- We put man-made, computer designed, synthetic DNA into our food.
- We put nano metals and nano particles into our food.
- We put poisonous pesticides and herbicides directly into food cells.
- There are thousands of different chemicals in our foods.
- We are turning into genetic mutants because of our food.
- We are wiping out all life on earth because of our food.
- After mass extinction, genetically modified trees may be all we leave behind.
Our “green” energy hi-tech future requires:
- conflict minerals,
- rare earth elements,
- heavy metals,
- nano metals and graphite.
Search for “rare earth mining in China” on YouTube and see what special hell your solar panels and wind turbines produce in Mongolia. China can do this because they have undercut all the world’s production of Rare Earth Elements (REEs) with low wages, low currency and no environmental enforcement. They can do this because they ignore the radioactive thorium that comes with mining high-value, heavy rare earth elements. Rare earth elements can’t profitably be mined outside of China without using radioactive thorium, the mining by-product found with heavy rare earth elements. We can’t afford to mine REEs while treating thorium as radioactive waste instead of as a profitable energy source. Burning thorium will pay for heavy REEs and provide the low-carbon base power “green” energy requires.
Graphite is used in all of our so-called “green” powered batteries and is mined in China emitting deadly fine air particles resulting in a lethal smog that washes down from the skies in an ash laden rain that covers crops and water. China recently shut down several graphite mines because of the pervasive smog. Graphene, a nano-material produced for batteries, is water soluble and can cut through human/animal cells. Both graphite dust and graphene are deadly to humans because of their small size. You don’t want to breathe this stuff.
Solar cell manufacturing produces 3 green house gases that are over 10,000 times worse than C02. They require all kinds of deadly liquid acids to manufacture. Solar panels lose efficiency at the rate of 1% per year lasting 20-25 years. The expensive inverters they require have to be replaced every 5 to 10 years up to 4 times over the life of the panel. The new thin cell panels use nano materials and are even more toxic with shorter lifespans. It doesn’t matter how “clean” the latest experimental solar panels are because existing manufacturing plants will stay open to recoup major investments. Manufacturing just five wind turbines produces 1 ton of radioactive residue and 75 tons of toxic, acidic water used to leach out the required neodymium. Wind turbines only work at 25% of their rated capacity 90% of the time. Over 2 million children died in the Congo for the conflict minerals green energy needs. Thousands of people die in Chinese mines every year for the minerals green energy needs. Prof. Jian Shuisheng of the Jiatong-University estimates the production of just 6 solar panels requires one ton of coal. Since green power is intermittent, it would take at least 10 times the rated amount of “green” energy to displace just one equivalent unit of 24/7 fossil energy because your so-called 100 Watt solar panel delivers zero Watts at night and batteries are heavy toxic $energy hogs. One company in the U.S. cut down 5 acres of trees to build a solar farm to power a plant for the production of plastic bags. Green power will not be enough. Part-time energy and billions of batteries adds up to death to all life on earth just from destructive ecological inertia.
Ozzie Zehner explains “Green Illusions” in a series called, "Talks at Google":
Tim Garrett explains why in a three-part lecture:
- one dollar equals 10 milliwatts
- why we can’t decouple growth from emissions.
- why efficiency & conservation leads to more energy growth.
Did you know that the new $2 billion Ivanpah solar plant in the Mojave desert is a death ray that ignites birds in mid flight? When their bodies fall to the ground, they leave smoky trails in the sky called streamers. These birds are attracted to the bugs who are attracted to the shiny, pretty lights, just like us. It is estimated as many as 30,000 birds per year will die this way during huge migrations at just this one green power plant. Bigger solar plants of the same type are in the works including one near Joshua Tree, next to a wildlife sanctuary. During Ivanpah’s construction, up to 3,000 endangered desert tortoises suffered a temporary loss of legal protection and were allowed to be killed by heavy diesel equipment and materials. Thousands of slave workers die in China’s mines every single year to help produce the exotic minerals used in its construction. This is referred to as the “Green Economy”. If we changed the whole planet to green power, we would kill the earth we call home.
Civilization is slowly collapsing while the earth is quickly dying. My credentials? I cut grass in a trailer park in Canada.
Environment Minister Greg Hunt has caved to the mining industry and approved Indian mining giant Adani's monstrous Carmichael Mine, threatnening the Great Barrier Reef. The coal mine will be the biggest in Australia. It will pollute our climate with massive CO2 emissions for decades. It will mean massive and continual dredging and dumping in the Great Barrier Reef World Heritage Area and will fill the Reef with thousands of coal ships every year. Original article and petition from GetUp. Note that, if you sign, GetUp puts you on two mailing lists, however the situation is serious and their campaign may be effective.
The good news is that while Adani may have the approval, it still needs to find up to $10 billion before it can proceeed. This means the battle to protect the Reef from Adani is down to who can persuade investors, us or them.
Adani will try and convince investors to lend it $10 billion to wreck the Reef. We'll try and convince them Adani is a company with no public support who cannot be trusted. Game on.
Western support will allow more IMF and European lending to prop the Ukrainian currency so the Ukrainian oligarchs can move their money safely to British and US banks, economist and author Michael Hudson told RT’s Truthseeker.
RT:Could you summarize for us the tried and tested steps that will lead from IMF loans, to Ukraine’s best assets ending up in private Western hands – the IMF’s ‘knee-breaker’ role as you memorably described it as?
Michael Hudson: The basic principle to bear in mind is that finance today is war by non-military means. The aim of getting a country in debt is to obtain its economic surplus, ending up with its property. The main property to obtain is that which can produce exports and generate foreign exchange. For Ukraine, this means mainly the Eastern manufacturing and mining companies, which presently are held in the hands of the oligarchs. For foreign investors, the problem is how to transfer these assets and their revenue into foreign hands – in an economy whose international payments are in chronic deficit as a result of the failed post-1991 restructuring. That is where the IMF comes in.
The IMF was not set up to finance domestic government budget deficits. Its loans are earmarked to pay foreign creditors, mainly to maintain a country’s exchange rate. The effect usually is to subsidize flight capital out of the country – at a high exchange rate rather than depositors and creditors getting fewer dollars or euro. In Ukraine’s case, foreign creditors would include Gazprom, which already has been paid something. The IMF transfers a credit to its “Ukraine account,” which then pays foreign creditors. The money never really gets to Ukraine or to other IMF borrowers. It is paid to the accounts of foreigners, including foreign government creditors, as in IMF loans to Greece. Such loans come with“conditionalities” that impose austerity. This in turn drives the economy even further into debt – forcing the government to tighten the budget even more, run even smaller budget deficits and sell off public assets.
RT: Can Ukraine expect the so-called ‘IMF effect’ of 1 in 5 of the impoverished population emigrating to work abroad, and what consequence could this have on a country to lose its brightest minds?
MH: Ukraine already draws in foreign emigrants’ remittances equal to about 4% of its GDP. (About $10 billion a year.) Most of this money comes from Russia, the rest from Western Europe. The effect of IMF austerity plans is to drive more Ukrainians to emigrate in search of work. They will send some of their earnings back to their families, strengthening the Ukrainian currency vis-à-vis the ruble and euro.
RT: How are the IMF’s tools in reality “weapons of mass destruction” as you quoted it?
MH: Lower budget deficits cause even deeper austerity and unemployment. The result is a downward economic spiral. Lower incomes mean lower tax revenues. So governments are told to balance their budgets by selling off public assets – mainly natural monopolies whose buyers can raise excess prices to extract economic rent. The effect is to turn the economy into a renting “tollbooth economy.” Hitherto free public roads are turned into toll roads, and other transportation, water and sewer systems also are privatized. This raises the cost of living, and hence the cost of labor – while overall wage levels are squeezed by the financial austerity that shrinks markets and raises unemployment.
RT: The IMF’s perhaps also a weapon of mass destruction in a more literal sense. The organization has publicly threatened and blackmailed Ukraine that it will ‘re-design’ its aid package, unless Kiev goes to war on fellow Ukrainians in the East of the country and stops them protesting. Does that not make it now literally a criminal accomplice or instigator of war and murder?
MH: The IMF’s “conditionality” is that it “pacify” the East. Pacification may occur violently in today’s Orwellian rhetoric. The only way in which actual political and economic peace can be achieved is by a loose federalization of Ukraine, to make each region independent of the kleptocrats in Kiev, who are appointed mainly from the West.
As for accusations of criminality, this always depends on who is the prosecutor, and what is the court! No country has yet prosecuted the IMF. All that voters can do is reject governments submitting to IMF conditionalities. Many voters who are able will “vote with their feet” and simply leave the sinking economy. So the IMF’s defense is that Ukraine and other clients are voluntarily committing suicide rather than being murdered. Austerity is ultimately a policy – nobody is holding gun to their head, except when political leaders are assassinated as in Chile in 1974 under Pinochet with the US Government behind it. In this sense, Ukraine today is a replay of Chile four decades ago.
Participants in the nationwide Ukrainian rally against bank outrage and for the rights of borrowers under the slogan “No to currency slavery!” by the building of Ukraine’s Verkhovna Rada. (RIA Novosti)
RT: Everyone knows austerity’s effects on Greece and elsewhere; polls show most Ukrainians don’t want it; even the IMF itself now admits austerity doesn’t work. Why will Ukraine’s leaders allow it to happen, are they guaranteed a cushy job in the West when they’ve voted out or something?
MH: Ukraine’s leaders are mainly kleptocrats. Their aim is not to help the country, but to help consolidate their own power. George Soros has written that their best way to do this is to find Western partners. This will provide US and European backing for the kleptocrats tightening their hold on the economy. Western support will provide more IMF and European lending to support the currency so that the Ukrainian oligarchs can move their money safely to the West, to British banks and US banks.
RT: Do you think that the EU isn’t stupid enough to make Ukraine a full member, so under the one-sided association agreement, member states will just strip the country of its best assets, and use its workers as near slave labor, with Ukraine’s 91 US cents an hour minimum wage?
MH: The EU hardly can really make Ukraine a member. One reason is that a key policy underlying French and German creation of the original Common Market in 1957 was the Common Agricultural Policy (CAP). Ukraine has rich Western land, and that part of the country is largely still rural. Foreign investors would like to buy it out and “re-feudalize” it, creating large business farms. But the EU is unlikely to provide the subsidies that financed mechanization and capital investment in Western European agriculture.
The EU does not need to formally integrate with Ukraine to benefit from its inexpensive labor. Wrecking the economy Greek-style or Irish-style or Latvian-style is sufficient to send its workers to the West. And the most mobile traditionally are the best educated youth in their 20s, able to speak foreign languages and with skills in demand in the West.
RT: You noted Ukraine ‘must have asked the US first’ before blowing up that gas pipeline. Do you think NATO will support anything even terrorism to make Russian gas seem less reliable, especially while US fracking giants currently are waging a big PR campaign in Europe.
MH: The US has pressed Europe to make its own economy much more high-cost and to rely on US gas exports mainly in order to deprive Russia of foreign exchange. The NATO rationale is essentially that which Prime Minister Arseniy Yatsenyuk tweeted on Monday, June 16: Ukraine “won’t continue subsidizing Gazprom [to the tune of] $5 billion annually, so that Russia can arm itself against us [with this money].”
The US position today is what it was in 1991: Without manufacturing, Russia cannot be a serious military power to defend itself. And without purchasing foreign technology and without large state subsidy – as US and European governments provide their own economies – Russia cannot create a manufacturing economy. So NATO is trying to prevent Russia from earning enough money to modernize its economy, on the principle that any industrial power is potentially military, and any military power my potentially be used to achieve political independence from the US sphere.
RT: Anything else you would like to add?
MH: What is at issue is whether economies throughout the world will let financial leverage dismantle the power of elected governments, and hence of democracy. Governments are sovereign. No government actually needs to pay foreign debts or submit to policies that negate the three definitions of a state: to create its own money, to levy taxes, and to declare war.
At issue is who shall rule the world: the emerging 1% as a financial oligarchy, or elected governments. The two sets of aims are antithetical: rising living standards and national independence, or a renting economy, austerity and international dependency.
Today, June 4, 2014 there was a Snap rally to protest at Mining giant Whitehaven Coal is sending an army of bulldozers to flatten the ancient Leard Forest located in the North West of New South Wales. The rally took place at midday at Governor Phillip Tower, 1 Farrer Place, Sydney. Dozens of protesters at Whitehaven Coal's Maules Creek Mine have been arrested. A total of 82 protesters have been arrested and removed from Leard State Forest.
Dozens of protesters have been arrested at Whitehaven Coal's Maules Creek mine, near Boggabri in north-west New South Wales.
Police confirmed they entered the Leard State Forest this morning and occupied trucks, scrapers and road rollers to stop mine workers from clearing the land.
A total of 82 protesters were arrested and removed from the site.
Police say the charges relate to hindering the working of mining equipment, entering and remaining on enclosed lands without reasonable excuse, and resisting arrest.
Melbourne protester Phil Evans from the Leard Forest Alliance says police moved in about 10:00am (AEDT).
"The police have come along and we've had some folks, especially some of the older folks in our crew sitting down on the ground on chairs and they've actually been arrested, including our oldest member, 92-year-old Bill Ryan, who is a World War II Kokoda veteran," he said.
"I'm actually about four metres up off the ground on top of a machine at the moment.
"I would say there's probably around 20-25 police on site and I can actually see nine vehicles along with a very large police van obviously for transporting multiple people."
The protesters say the mine employees remain on site but no work has been done today.
However a Whitehaven spokesman says the protest has not disrupted work on the mine.
The protesters say on top of the arrests there have been 10 to 12 personal infringement notices issued which carry a fine of $350 each.
Those arrested have been issued with court attendance notices for the 29th of April.
Whitehaven received final government approval for its open-cut mine project at Maules Creek in February last year.
Photo: Protesters occupying vehicles at the Maules Creek mine, owned by Whitehaven Coal, near Boggabri in northern New South Wales.
The video here is from an earlier protest in October 2013.
#10;<a href=" http:="">http://www.abc.net.au/news/2013-07-19/whitehaven-to-push-ahead-with-maules-creek-mine-despite-legal-c/4830390
#10;Map: Boggabri 2382</p> </body></html>">
Russia, although it has known great hardship, has the benefited from this by being in touch with reality and knowing the value of good technological and scientific advice. Putin is highly intelligent and uses the media brilliantly, aiming at intellectuals who have become disgusted with the western mainstream media. He treats material in a complex and verifiable way, rather than relying on slogans and ideology. He has forged alliances all over the world with countries that the United States has alienated. Most of them have energy reserves of their own and want alternative markets.
The US has been touting itself as a future supplier of gas to Europe in what Max Keiser and Stacy Herbert have called, "A hoax energy policy in america using phoney numbers." You wonder how the United States itself, let alone Europe, the UK and various sycophants like Australia could have fallen for this. Are the US and EU leaders the actual fraudsters? Max Keiser thinks that these leaders are simply too economically and technologically uneducated to see through the bankster spin.
On 25 October 2013 in "EIA should provide data on cost of North American shale gas exploitation to make balanced reports," I asked EIA spokesman, Dr Fawsi, to tell me what the cost of production in fracking was. He said the EIA had the information but would not release it. However Bloomberg obtained the relevant information and published it in February under the headline: Bloomberg"Dream of US Oil independence slams against shale costs."
"Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back." And, "Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota's Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60."
The video linked to at the top of this article tells us how this works: Companies get finance for shale-oil/fracking schemes that cannot break even and then abandon the schemes and the financier and shareholders. They pocket all the financial fees from creating the debt and walk away from the ecological damage and the unrecoverable debt. Max Keisor aptly describes these actors as 'financial terrorists'.
Stacey Herbert asks Max Keiser, ""Who are these people that can spend a $1.50 to earn a dollar?"
Keiser replies, "Banks, which create the debt. It's like the old joke, you lose a dollar for every unit you sell, but you make up on the volume.""
It works the same way for big development schemes, which cannot make money for their investors for the same reason that fracking cannot, that is, because the real cost of materials and fuel have largely obliterated profit margins. We are in a post-cheap petroleum world where profits can only be puffed up by spin.
The East-West Link project which so many in Melbourne, Australia are protesting about, has been promoted with projections of fuel costs declining over the next ten years. You would not think that any competent government could believe such a scenario. Is it incompetence, ideology - or are our governments simply acting on behalf of the banksters when they force taxpayers to commit to massive structural engineering projects in the service of a ballooning population?
The Australian Government is proposing to get rid of two organisations: - the Australian Renewable Energy Agency and the Clean Energy Finance Corporation - that make money by investing in companies producing renewable energy products. They have rightly been criticised for this by Jenny Goldie, President of Sustainable Population Australia, who wrote on :
"There is no rational basis for this move, merely senseless ideology. Even if the government is so scientifically illiterate as to reject climate change, there is a need to shift to renewable energy in light of impending peaks of oil and gas." Jenny Goldie, The Age "Letters", 25 May 2014.
But, is it just ideology or it possible that the government actually believes that alternative energies represent a threat, as in competition, to their corporate friends who have invested in fossil fuels and nuclear? My understanding of flow energies and the finitude of uranium and untested nature of thorium supply and the commercial inviability of GenIV reactors leads me to believe that there is no competition with these fossil fuels, technologies and elements in terms of quantum of energy from flow energies.
Apart from not wanting to exacerbate climate change, the point of alternative/flow energies is that as fossil fuels become less and less available to people, they need alternatives to survive according to basic requirements.
Even so, those flow energies are not going to provide even the basics, if we do not allow population to decline.
Unfortunately the Australian government really seems to be taken in by economic dematerialisation spin on the one hand and by underestimates of likely draw-down on coal and other fossil fuels over the next fifty years as they are called upon to replace petroleum fuels. Our government - like the United States' - behaves as if gas is in endless supply and as if fracking will be an effortless bonanza. Perhaps this failure to carefully study the matter stems from the fact that Australians have not yet actually had to survive serious interruptions to fossil fuel supply... yet ... such as happened to European countries involved in WW1 and WW2, who take this prospect seriously. Australia's petroleum supplies have, however, more or less dried up. We are going to be relying on increasingly dirty fuels to supply power. We cannot afford to build anything like the quantity of nuclear power plants our population would require just to replace its current electricity consumption.
As an Australian, I do not crow about this, but I could see it coming a long time ago. I know that the world could, in theory, survive energy decline if the power-elite would only allow populations to decline in size; if the unions and business would allow us all to start working (and therefore producing and consuming) half as much. Without constant growth in population, prices for resources and housing would not keep climbing. Quite quickly housing prices would drop. Energy resources and water would reduce more slowly, in line with population. We would not need to work so many hours, each of us, merely to pay rent or mortgages. We would have time to live and engage politically in communities which themselves would naturally relocalise, in view of adapting to declining energy reserves less supportive of daily commuting and longer journeys. 
 "Russia Reveals Official Data on Oil and Hydrocarbon Reserves For The First Time", Oil & gas Eurasia, July 12, 2013.
 Sheila Newman, "France and Australia after oil," Chapter 19, Sheila Newman, Ed., The Final Energy Crisis, 2nd Ed., Pluto Press, 2008.
 "Countering propaganda with simple solutions: Propaganda about a ‘dematerialised economy’ makes it hard to establish the reality that material industrial productivity is not actually less reliant on burning fossil fuels than it was in the 1970s, and that drawdown on fossil fuels has in fact been multiplied by the needs of much greater populations. Similarly the obvious still needs to be pointed out that increasing productivity means burning more fuel and outputting more pollution, accelerating petroleum depletion and adding more greenhouse gases. Not only do we not need all the goods we produce for consumption at home or abroad, we do not need the income they bring, and their acquisition is a poor compensation for lives given to industry. Wonderful jobs are few and far between. No-one wants to give those up. Some people also derive much of their social life from work but they would derive similar benefits, and perhaps more status and satisfaction, from other community activities. And plenty of people reach a stage of maturity where childlike obedience to workplace regimes in the cause of producing more and more widgets in different colours, or processing more and more customers a day, with unflinching subservience, challenges every natural instinct.
Instead of those complicated international agreements about percentile reductions in emissions over the years to come, which are hardly enforceable or even measurable, remaining mostly in the control of the corporate emitters, the solution lies much closer at hand, and could ultimately be controlled at grass-roots levels by the masses themselves. Relocalisation is obviously the best way to develop the solidarity and self-sufficiency to reorganize work.
Political commentator and climate activist, Clive Hamilton, writes in Growth Fetish,
Reduction in working hours is the core demand for the transition to post-growth society. Overwork not only propels overconsumption but is the cause of severe social dysfunction, with ramifications for physical and psychological health as well as family and community life. The natural solution to this is the redistribution of work, a process that could benefit both the unemployed and the overworked. (Hamilton, Clive, Growth Fetish, Allen & Unwin, Australia, 2003 and Pluto Press UK, 2005, last chapter, especially, pp.218-220)
He remarks that “Moves to limit overwork … directly confront the obsession with growth at all costs,” and talks about the liberation of workers “from the compulsion to earn more than they need.”
Because growth is sustained by a constant ‘barrage of marketing and advertising’ Hamilton wants advertising taxed and removed from the public domain, and television broadcast hours limited so as to “allow people to cultivate their relationships, especially with children.”
It should be obvious that the slower we work, the more fuel will remain, the less greenhouse gas will be emitted. If the populations which have ballooned to unimaginable proportions since the 1950s were allowed to return (through natural attrition) to more natural sizes by 2050, and the economy permitted to slow, it would take the heat off the planet and us as well. With so much less effort we could make such a positive difference to the planet and to our personal effectiveness." Original Source: Sheila Newman, Ed., "101 Views from Hubbert's Peak,"Chapter 1, The Final Energy Crisis, Pluto Press, UK, 2008
Mark Jones was an author and novelist with a long-time interest in the political economy of oil. He lived and worked in the Soviet Union and in post-Soviet Russia, working for a time with the New Statesman, whilst researching archives newly opened under Gorbachev’s policy of Glasnost. He founded the Conference of Socialist Economists and their journal, Capital and Class, in the mid 1970s and in the 1980s he was remanded in custody for publishing Leon Trotsky’s writings. He sustained a deep interest and sympathy for communism, and was concerned by the limits to growth and believed that the US economy had an unsustainable but unstoppable need for oil. His novel Black Lightning, about the fall of the Soviet Union, was published in 1995 by Victor Gollancz. The original article of which excerpts are published here was published in the first and second editions of The Final Energy Crisis Pluto Press, UK, 2006, 2008. (First edition edited by Andrew McKillop and Sheila Newman; second edition by Sheila Newman, sole editor.)
Headings by candobetter.net editor
The middle decades of the last century might best be seen as an interregnum, during which time the declining and ascendant imperialist powers, Britain and the US, colluded and collaborated to fight rivals (Japan, Germany) and marginalize or contain rivals (Bolshevism). Once US hegemony was assured (by 1945) it was relatively straightforward to restructure the global system on a new, US-dominated basis, and to create the institutions and frameworks for global commerce and international law that secured unchallenged US hegemony. Except for two brief periods during the Korean and Vietnam wars, the USSR ceased to be a serious challenge after 1945, despite the much-vaunted menaces of the Cold War period.
In its heyday the British Empire was more powerful and effective than the US empire has been or is today. The British not only moved populations around in huge numbers; they also moved plant and animal species. The British did more to shift and transplant alien flora and fauna from one continent to another, thus reconstructing whole ecosystems, than any other empire, although the Romans did a lot more in that sphere than most people realize. It takes a lot of arrogance and certainty to do the kinds of things the British ever-so-freely took it upon themselves to do. They reshaped whole continents, from Australasia through Africa to Latin America. Successive waves of emigration from the homeland created a whole English-speaking world, of which the US was at first only a subset and which it finally inherited, but had not created. The British ploughed their way through every precapitalist social formation they encountered, and either wiped it out or, through colonialism, totally reconstructed it. Yet despite (or because of) these grandiose achievements the British Empire, which seemed so enduring, was a short-lived thing. There is nothing to suggest that the seeming permanence of the US imperium should be any less fleeting. There is also no reason to suppose that sheer self-interest might not drive Americans themselves into a recognition that the price of domination, alone and unchallenged, is too high, and that an accommodation must therefore eventually be made with a rival who might one day become a successor. Since the 1939–45 war, the US has in fact made a practice of co-opting present and potential rivals into junior partnership. It has done this not only to Britain, but also to Germany (1960s), Japan (1970s and 1980s) and latterly even to Russia (from 1991).
The US is now functionally locked into Chinese industrial capitalism; the two states are in a tight embrace, performing a minuet which is part dance of death and part marriage of convenience.
Both states face many common problems, and each needs the other because of complementarities and useful asymmetries. However, the radical contradictions between them ensure that they are imperial rivals. And the balance of power between them appears to be changing. US economic and therefore military growth significantly declined from the later 1980s through to 2002. China has been growing faster, and has now entered a decisive phase of industrialization, where its industry is so diverse, deep, broadly based and synergistic that it appears to be crossing a threshold, and is emerging as the world’s premier industrial power, eclipsing all others, with an R&D capability equivalent to that of the US or Japan. Many estimates indicate that Chinese industrial production will outstrip that of the US during the present decade. It seems clear that Asia as a whole is now poised on the cusp of precipitous changes, and that the US is now clearly the declining regional power, giving way to rising regional hegemony for China. It is surely arguable, or even likely, that China could become the dominant power in Asia without the need for war, and with the US being unable to prevent this. Once the economic facts are in place, can the geopolitical consequences be far behind? What can prevent the binding together and fusion of Chinese, Japanese and Taiwanese industry and capital, under Chinese hegemonic control?
Thus for the first time in its history, the US now faces the distinct possibility of the partial eclipse of its global power. I cannot predict what will happen, and I doubt whether anybody can know, but it is surely plausible that the US will be obliged to accept its strategic defeat with good grace, to accept a seismic change in its status and position, because the US is simply no longer powerful enough to resist. The rise of China to at least regional Asian ascendancy seems to be already in the script, an inevitable and unalterable outcome of present trends.
There is, however, one huge caveat to this whole line of argument. It does not take account of underlying, apolitical, extra-human and planetary limits, which will most certainly afflict the world system, and which mean we are entering a still more radical and decisive epoch of historical challenge, upheaval and transformation in everything from geopolitics to everyday life. As is indicated by the very title of this book, no geopolitical analysis can ignore the colossal threats posed by the storm of self-reinforcing crises – anthropogenic climate change, mass extinction of species, and destruction of the biosphere – all of which were enabled by fossil energy supplies, whose wipeout will be rapid. These factors form a vast backdrop to all world-system or economics-based considerations of inter-imperial rivalry à la Lenin. But before attempting to integrate this domain of issues into the discussion, let us consider again this central question: What if China emerges first from the probable imminent global economic slump?
This slump, if it occurs, will hit the US and Europe especially hard. The dollar will decline, industrial output will shrink, consumption levels and living standards will drop with incomes. The US economy will be first and hardest hit, notably because it is wildly unbalanced, extremely dependent on cheap energy, and equally dependent on the dollar’s “reserve currency” hegemony, which enables its payments deficit to be ignored. Any US economic slump will inevitably bring with it a collapse in personal and public consumption levels. Obviously this collapse in US demand will hit major exporters, China above all. China will then have to find other outlets for its huge industrial output. This means exporting to other regions which may be doing little better than the US, such as Europe and Japan, India, Southeast Asia, Russia, and the Latin American countries – but perhaps firstly, countries which export oil, minerals, metals, and agrocommodities, which profit from higher prices for these items.
Once you strip out dollar hegemony and the advantages of being the global reserve currency (or “currency of last resort”), you are left with a very naked emperor. Except for weaponry, control of the skies and sea lanes, control and surveillance of world information networks, and a powerful propaganda machine, the US has few cards left. Take away dollar hegemony and you have just another regional economy with its fair share of internal problems (soil exhaustion, aquifer depletion, near-exhaustion of domestic oil and gas reserves, lack of alternative energy supplies, a polluted environment, poor infrastructures, badly designed and expensive-to-maintain urban environments). If the US has to compete on a level playing field with the rest of the world, then it may find that its urban infrastructure is just as uneconomic and unsustainable as was the Soviet Union’s loss-making effort to base itself on the industrialization of the Urals and Siberia. The US currently uses twice as much energy and raw materials per capita as the EU-15 average, and more than ten times that of China. It is desperately uncompetitive. When the dollar has to be backed up by real values, US per capita GNP may fall by half in just a few years, as in the Great Depression. Under these conditions it is hard to see how the US can hope to maintain its global reach and present hegemonic position.
If, on the other hand, we are set on a course of global war, which was the outcome for “classic” economic depressions before 1914, and again through 1929–36, then Americans have only a very small window of opportunity (like Hitler enjoyed in 1939) before their military advantage evaporates.
Mark Jones wrote the above conclusion - the last three lines - in 2005. By his calculations, the United States would have used up most of the surplus energy that gave it any military advantage.
The bias in Australian news reporting on Russia and the Ukraine is profoundly depressing. There is no responsible analysis of the role of the then 'opposition', with members now in parliament, and the use of snipers to fire at police and protesters alike in provoking President Yannukovych to temporarily leave the Ukraine. [Note I have removed the term 'resignation' because he has not resigned. I apologise for the confusion - Sheila Newman] #fnSubj2" id="txtSubj2">2 There is no acknowledgement of how elected President Yannukovych formally requested Russia's help - or it is mentioned as if it were specious. Although there was an election due within a year, Yannukovych was forced to flee in peril of his life by the forces that put the current illegal government in place. There is no acknowledgement of the validity of a 97% Yes referendum in Crimea to join Russia.#fnSubj3" id="txtSubj3">3 There is no acknowledgement that Crimea already had separate administration within the Ukraine and that the great majority of its population identifies as Russian. There has been an over-emphasis on how a minority group of muslims said they had avoided voting and now complain that their needs were not met by the referendum and an underemphasis on how many voted and what they voted for. Little or no convincing evidence has been given for slurs implying that the referendum was either not legal or not well-managed. There is no acknowledgement of the reasonableness and democracy in calling a referendum, which is an example the increasingly undemocratic Anglophone West would do well to follow. There is hardly any mention in the Australian and other Anglophone press that the parliament of Acting President Oleksandr Turchynov, whom Obama greeted in the Whitehouse almost instantly #fnSubj4" id="txtSubj4">4 and whose government Australia supports in East Ukraine, contains six members with severe fascist and Nazi affiliations, which kind of explains how the use of snipers was part of the campaign to get rid of the elected government. The increasing evidence of US and NATO aligned Western powers provoking the Kiev coup is not being covered in the Australian and other Western press. There is also no mention that President Yannukovych had offered to bring on early elections to give the opposition a chance to win government legally. There is a constant use of the adjective 'aggressive' to describe Russia's actions in going, on invitation, into a largely ethnic Russian Crimea which had voted to rejoin Russia, in a region where European power-grabs threaten hard-won agreements between the many diverse countries involved in recovering and transporting oil and gas out of the Caspian Sea area.
Most of all, there has been a glaring failure of Australian and US and other Anglophone news sources and governments to report that getting power over this region means getting power over major oil and gas reserves in the Caspian Sea and pipelines leading from its shared shores through several different countries with destinations as far as Britain #fnSubj5" id="txtSubj5">5 and China. That is why dividing the Ukraine up between Western Europe and Russia is such a big deal.
The Caspian Sea: History, political borders, rights to mine etc.
The Caspian Sea is the largest inland sea. "Geographically, it is a salt-water inland sea or lake covering about 375,000 square kilometres, bordered by the Elburz Mountains of Iran to the south and the Caucasus to the northwest. The Volga River flows into it from the north, forming a large delta near Astrakhan, but evaporation is sufficient to counter the influx, leaving it some 30 meters below world sea level. It is flanked to the north by Russia itself, followed clockwise by Kazakhstan, Turkmenistan, Iran, and Azerbaijan. The three "-stans” gained independence following the fall of the Soviets in 1991. Dagestan and Chechnya, which are still Moslem provinces of Russia on the shores of the Caspian, are still seeking their independence, in a vicious campaign attended by many acts of terror. Under international law, ownership of the offshore mineral rights depends on whether it is deemed a lake or a sea. In the case of the lake, they belong jointly to the contiguous countries, whereas in the case of a sea they are divided up by median lines. The matter, which is no small issue, has yet to be fully resolved, but it seems in practice to be moving in the direction of the latter formula. It is worth noting here that Tehran, the capital of Iran, lies only 100km from the Caspian shore, so its role in the future of the region cannot be ignored." (Colin Campbell, "The Caspian Chimera," Chapter 5 in Sheila Newman, (Ed)., The Final Energy Crisis, 2nd Edition, Pluto Press, 2008."
Don't the Australian public deserve to know of the many geological reasons why this area is so politically fraught, instead of being subjected to incredibly superficial theories of ego and ethnicity, when any explanation is offered at all for territorial sensitivity in the region?
There is a fabulous and apocryphal geopolitical context to this vast oil and gas-bearing region that is the Middle East and Eastern Europe. Russia started the first pipeline there in the 1880s in Baku on the edge of the Caspian Sea, with a pipeline which carried kerosene a total of 835km to the Batumi, Georgia, a port on the Black Sea. It was the longest pipeline in the world at that time. Joseph Stalin actually led workers in the oil industry there.
"In the late 19th century Baku on the Caspian Sea was the site of a pipeline to the Black Sea, financed by Rothschild and Shell Oil. Joseph Stalin was a workers' leader there in an atrocious working environment. By the end of the Second World War, established easily accessible wells in the Caspian were less productive and, although the Soviet Union continued some new development there, including the building of off-shore platforms, it focused more on inland resources which did not require investment in offshore drilling equipment." (Colin Campbell, "The Caspian Chimera," Chapter 5 in Sheila Newman, (Ed)., The Final Energy Crisis, 2nd Edition, Pluto Press, 2008.)
Since the late 19th century this area has been the object of colonial exploitation and wars over its mineral wealth, with British and US exploration teams competing against each other and against Russia. President Trueman's duplicitous policies towards Russia and Ukraine are the subject of Oliver Stone's Untold History of the United States series (book and films). (See interview of Peter Kuznik, Oliver Stone's co-writer on this material here.) The political behaviour towards the region by the US between the First and Second World Wars was eerily similar to its behaviour today.
These geopolitical features have bred extremely tough political survival behaviour in associated royal and elected governments. The toughness is expressed in authoritarian government and sophisticated international relations with commercial organisations, international finance and international governments. Since the first oil shock in the early 1970s, the oil-exporting countries in this region have attempted to shrug off colonial rulers and assert independence. The political countershock from the West has been to fight those attempts. Gaddafi led the formation of OPEC which coordinated the policies of the oil-producing countries, with the aim of getting a steady income for its member states in return for secure supply of oil to oil importers. His efforts assisted independence amongst member oil-producing countries and a world price for oil. There was a brief period when it seemed that the West might respectfully integrate the leaders of those Eastern independence movements and the oil producing countries, but draw-down on world oil resources, through increased demand and finite supply, ever more expensively accessed, has coincided with escalating aggression on the part of the west. Russia and China, for their parts, are acting defensively to secure their geopolitical links with their neighbours.
Most important in the new problems with Syria and Ukraine and Crimea, is access to pipelines conveying oil and gas resources from the Caspian Sea region through surrounding countries, which have strategic power and risks. The absence of reporting on this crucial aspect of East-West hostilities in the Western media makes the Western powers and their media promoters and corporate supporters look guilty and the populations of Western countries look uneducated and incurious. Coverage from the Teheran Times and Russia Today is far more reality based.
"The recent U.S.-backed coup that toppled the former government in Ukraine has been couched in the noble rhetoric of democracy, humanitarian intervention and self-determination, but a closer examination reveals an ugly underside of realpolitik whose motive is energy dominance. Like Syria, Ukraine has one of the key gas pipeline corridors coveted by the U.S. and its NATO allies that is still under the influence of a so-called R&D (resistant and defiant) country such as Russia.
To understand what is happening in Ukraine and Syria, and how Qatar and Azerbaijan are involved, we must briefly look at regional energy developments following the dissolution of the former Soviet Union. While the Persian Gulf is well known for its abundant energy resources, the Caspian Sea Basin also has seen oil exploration and production since the early 1900s however the U.S. and the West had scant involvement there before the end of the Cold War. Since the breakup of the former Soviet Union, the United States and Russia have engaged in fierce competition to control the energy resources of the newly created Caspian Sea littoral states." Source: "The last Argument of Kings," Tehran Times, March 18, 2014 by stratagem, http://www.phantomreport.com/pipeline-predicament-the-ukraine-syria-russia-u-s-gas-nexus"
Russia's impending new contract to supply its neighbour China with gas for the next 30 years could be one of the things that caused Western powers to make desperate efforts at this time to get control of the Ukraine in order to influence oil supply contracts in the region. (Gazprom negotiations).
Supplying China has been an important goal of competing powers in the region because whoever supplies China has a very powerful friend. Even though contemporary oil-exploration is done by commercial corporations, states vie to develop and maintain relations with these companies. This need to dominate oil-exploration companies is likewise a major reason for US interference in South American and African politics and for South American states to make friends with Russian, Chinese and African states and their geo-exploration companies. Western powers are trying to destroy these alliances by using their own alliances which include supporting Israeli annexation of territories, amassing of arms, and Saudi Arabian attempts to religiously colonise free Arab states, like Syria.
We should all be trying to get along and to plan to downsize world economy in line with dwindling fuel resources, but half the world is doing the opposite.
There is no doubt that the world's industrial powers are encountering increasing trouble accessing affordable fossil fuel resources. All the signs are there: war, loss of democracy, environmental suicide.
A few years ago, the United States began using huge quantities of explosive material in order to crudely reopen old mines and start new ones in situations which it had not pursued before because of their inherent danger, pollution and landscape costs.
It is naive to accept the spin that the US puts on fracking for shale-oil and gas, by which it implies that it now has abundant fuels to supply growth indefinitely. The reality is that the U.S. has to spend more barrels of oil to get shale oil and gas than were ever required to get oil from wells. The reason the US is going after shale-oil and gas is because most remaining crude oil reserves are now very hard to get to, due to their inaccessible geological position and due to international political competition for these scarce resources. And getting shale oil and gas costs more than energy; it costs democracy and it has the capacity to ruin any resilience in the economy. See "Fracking Democracy". People are protesting across the US at how the government is permitting shale-oil and gas mines to take over their farms. They are afraid of pollution (notably of water), subsidence, and the truly awful scale of mining which is transforming landscape and politics, as well as air, soil and water, with massive emissions of carbon gases. Fracking has been banned in France, although the US-influenced EU is trying to overturn this, as it has overturned French law on use of hormone-based pesticides like Roundup and genetically modified crops. The Western powers have also tried to interest the Ukraine in giving them fracking rights in the Ukraine.
Unfortunately Australia is unwisely following the United States style on fossil fuel recovery. The EU, which tended to have more conservative, longer-view plans, is at risk of being dragged into the same profligate style due to the growing influence of a US-influenced banking system on the EU and the debts which this has already caused in European countries.
Australia, the United States, and Britain, have all exhausted their petroleum reserves by pursuing policies of economic and population growth in the face of common sense. They have also used an expensive and inefficient commercial approach to exploring for and mining petroleum at home and abroad. As oil geologist, Colin Campbell, put it, western oil-explorers "had to pretend that every borehole had a good chance of finding oil" [in order to attract investors], whereas their Soviet counterparts, "were very efficient explorers, as they were able to approach their task in a scientific manner, being able to drill holes to gather critical information" - which meant that, due to being state-financed, they didn't have to sink lots of unproductive and costly wells.
Colin Campbell describes the difficulties of oil and gas mining in the Caspian Sea, explaining how the countries of the region exploited oil resources that could be more conventionally mined. Much of the oil and gas reserves there are, not only under the sea, but deep under the sea-floor:
"In the years following World War II, they brought in the major producing provinces of the [Soviet] Union, finding most of the giant fields within them. Baku [on the Caspian Sea] was by now a mature province of secondary importance, although work continued to develop secondary prospects and begin to chase extensions offshore from platforms. The Soviet Union had ample onshore supplies, which meant that it had no particular incentive to invest in offshore drilling equipment. The Caspian itself was therefore largely left fallow, although the borderlands were thoroughly investigated. Of particular importance was the discovery of the Tengiz Field in 1979 in the prolific pre-Caspian basin of Kazakhstan, only some 70km from the shore. Silurian source-rocks had charged a carboniferous reef reservoir at a depth of about 4,500 meters beneath an effective seal of Permian salt. Initial estimates suggested a potential of about 6Gb, but the problem was that the oil has a sulphur content of as much as 16 per cent, calling for high-quality steel pipe and equipment, not then available to the Soviets. Development was accordingly postponed. The fall of the Soviet regime in 1991 opened the region to Western investment. " (Colin Campbell, "The Caspian Chimera," Chapter 5 in Sheila Newman, (Ed)., The Final Energy Crisis, 2nd Edition, Pluto Press, 2008.
A more cautious Soviet approach and the difficulty of access due to cold climate has meant that Russia has not used up all its oil and gas supplies. It has a good record of efficiency in the surrounding region. Due to the depletion of traditional oil reserves, the time has come when oil-exploration in these dangerous and icy regions nearby Russia will find finance.
We could go further and say that, as long as the Anglophone countries insist on growing their populations and their economies - which really means growing their need for energy resources and their output of pollution - and starting wars to fulfill these unwise policies of continued growth - they don't deserve what they are going after. We maybe should include India which, like Australia, as an ex-British colony, has all the problems of the Anglophone system where focused beneficiaries of population growth promote it in flagrant opposition to public opinion. The only obvious solution to the problem of finite resources can be to share remaining scarce resources equitably among polities which agree to stop engineering growth and demand upwards. That is a way to avoid continuing wars. In contrast to the rapid population growth in Anglophone countries and India, Russia's population is not growing fast and China has a responsible population policy.
The reason for the civil war in Syria almost certainly lies in the growing desperation by the United States and Europe about maintaining large supplies of cheap oil, in competition with China and Russia, with Russia relatively well-situated geopolitically. The United States trumpets its successful recovery through fracking as a cover but, as explained above, anyone who knows anything about oil knows that fracking oil and gas costs far more oil and gas than earlier methods of retrieving oil and gas, but the industries and governments just aren't revealing how much.
The two inland seas, the Black Sea and the Caspian Sea are the sites of major oil and gas exploration, although concerted exploration of the Black Sea is only just beginning, and expectations are modest.#fnSubj6" id="txtSubj6">6 The reserves in the Caspian, however, are enormous, but the question is how much can ever be accessed and mined. These reserves are deep, dirty, dangerous and nearly inaccessible deposits laced with highly poisonous hydrogen sulphide, however they are sufficiently important for commercial and government exploration to have persevered, leading to the construction of extremely long pipe-lines to transport gas across multiple countries, from Baku, Azerbaijan to the Mediterranean coast of Turkey; from Baku via Russia to Novorossiysk on the Black Sea, thence to Western Europe. Accompanying the longest of these pipelines, the Baku-Tbilisi-Ceyhan, which runs from Azerbaijan through Armenia and Turkey, to the South is Syria, Iraq and Iran, and, above them: Georgia, Russia and Ukraine, with Crimea just above Novorossiysk on the Black Sea. On the other side of the Black Sea is Ukraine, Romania and Bulgaria. On the other side of the Caspian Sea from the Russian side are Turkmenistan, Uzbekistan, and Kazakhstan.
The recent coup against the legitimate Ukraine Government has meant that Russia now has to consider building a very expensive new pipeline around the top of the Ukraine to avoid new incursions into its territory bordering on the Caspian Sea.
You can see from the map, "Proposed and actual gas pipelines," (Source: Wikipedia commons circa 2007 but still useful) how difficult it would be for Europeans to impose economic sanctions on Russia, for Russia is an important supplier of gas to the rest of Europe. This is likely to cause a split between America, Saudi Arabia, Canada and Australia, which do not have this relationship with Russia. The United States has, however, recently begun exporting shale gas to Europe, creating an impression that it has huge supplies and hoping to reduce Russia's income from and power derived from supplying Europe in the short term.#fnSubj7" id="txtSubj7">7 In the mean time, it seems the US is actually having problems supplying its own needs:
"U.S. Natural Gas Inventories
Natural gas working inventories fell by 74 Bcf to 822 Bcf during the week ending March 28, 2014. Colder-than-normal temperatures and a few late-season winter storms during the month resulted in increased heating demand, prompting larger-than-normal withdrawals. Stocks are now 878 Bcf less than last year at this time and 992 Bcf less than the five-year (2009-13) average for this time of year. Total stocks, as well as stocks in all three regions, are currently less than their five-year (2009-13) minimums." Source: Energy Information Agency, (EIA), http://www.eia.gov/forecasts/steo/report/natgas.cfm?src=Natural-b1
#fnSubj1" id="fnSubj1">1. #txtSubj1">⇑ Sheila Newman's research thesis for environmental sociology, "The Growth lobby in Australia and its Absence in France" (pdf - 100,000 words plus) , was about differences in the way that Australia and France adapted their population, housing and environmental policies after the first oil shock. It contains an historical comparison of pre-oil shock oil-economics in both countries. Later she was co-editor for the first edition of Andrew McKillop and Sheila Newman, The Final Energy Crisis, Pluto Press, UK, 2006; and sole editor for Sheila Newman (Ed. and Author), The Final Energy Crisis, 2nd Edition, Pluto Press, UK, 2008, which is a collection of her work plus scientific articles by nine scientists in disciplines ranging from particle physics through agriculture to environmental science and one economist. In 2013 she published, Demography, Territory, Law: The Rules of Animal and Human Populations, Countershock Press, 2013. [Paperback and Kindle.] The second in the Demography Territory Law series: Demography Territory Law 2: Land-tenure and the origins of Capitalism in Britain, is due for publication by June or July 2014 and asks whether the confluence of coal and iron in Britain caused its massive population growth, assisted it, or followed on from it, whether capitalism was inevitable and why it happened in Britain rather than elsewhere in Europe.
#fnSubj2" id="fnSubj2">2. #txtSubj2">⇑Ramazan Khalidov and Takeshi Hasegawa, "Ukraine Opposition Behind Snipers in Kiev According to a Leaked Phone Call, Modern Tokyo Times, March 6, 2014; "Recorded call reveals Ukraine opposition snipers, not Yanukovych, fired on protestors in Kiev," PR News Channel, March 6, 2014: "In the second leaked conversation regarding Ukraine in as many months, two top-level diplomats have been recorded discussing a potential bombshell in the crisis in Ukraine.
According to The Guardian, the 11-minute conversation between EU foreign affairs chief Catherine Ashton and Estonian foreign minister Urmas Paet details new allegations that the snipers who killed protestors in the Ukrainian capital were not agents of former president Viktor Yanukovych, but rather agents of the opposition forces.
"There is now stronger and stronger understanding that behind the snipers, it was not Yanukovych, but it was somebody from the new coalition,” Paet said during the conversation. [...] "Following the declaration, Paet went on to mention that the new Ukrainian government has heard the evidence, yet has shown no interest in investigating the claims.[...]"
#fnSubj3" id="fnSubj3">3. #txtSubj3">⇑ Mark Byrnes, "Crimea's Controversial Election Day," The Atlantic Cities, March 17, 2014.
#fnSubj4" id="fnSubj4">4. #txtSubj4">⇑ http://www.platts.com/latest-news/natural-gas/moscow/gazprom-says-expects-to-sign-gas-supply-deal-26644803 Matt Vasilogambros and Marina Koren, "White House: In Meeting With Obama, Ukraine's Prime Minister Embraces the West"National Journal.
#fnSubj5" id="fnSubj5">5. #txtSubj5">⇑ The Nord Stream gas pipeline takes gas to Germany, from where it is transported to Britain and other countries. I am not clear as to whether there are still plans to continue the pipeline underwater to Britain.
#fnSubj6" id="fnSubj6">6. #txtSubj6">⇑ The Black Sea has nothing comparable to the proven reserves in the Caspian Sea, but the need to find oil and gas is becoming so pressing that companies have taken out exploration licences for gas reserves they would previously not have bothered with. The Skifska natural gas field located on the continental shelf of the Black Sea was discovered in 2012 and there are other promising deposits offshore from Ukraine. "At the helm of the new energy diplomacy effort is Carlos Pascual, a former American ambassador to Ukraine, who leads the State Department’s Bureau of Energy Resources. The 85-person bureau was created in late 2011 by Hillary Rodham Clinton, the secretary of state at the time, for the purpose of channeling the domestic energy boom into a geopolitical tool to advance American interests around the world."
If you thought that the affairs of the Ukraine and Crimea were too abstract for you, maybe this will make you more curious. Natalya Poklonskaya is or was a government prosecutor in the Ukraine Crimea. She has been made into an anime character in a video. She made strong statements about upholding the rule of law and is now on the illegitimate coup-installed Ukraine government's wanted list. The Ukraine government came to power as a result of a US/NATO orchestrated coup in the resource depletion wars of the 21st century. Russia is defending its oil and gas pipelines in the region. Russia had the very first and the longest petroleum product pipeline in the world in the late 19th century and British, US and European governments and commercial interests have been plotting to get more control there ever since. The region is criss-crossed with oil and gas pipelines going in many directions from Baku to as far as Germany and China. Natalya Poklonskaya rightly wants her message to be heard and dismisses this video, however it may be the way to get her message better appreciated worldwide, so we are promoting it. And we include in this article a video with Poklonskaya's real speech, with English sub-titles.
[Candobetter.net editor: Retitled on 23/4/2014 from "Crimean prosecutor, Natalya Poklonskaya, celebrated as anime character," due to surprisingly few reads about this remarkable woman.]
The internet fame of Crimea’s chief prosecutor, Natalya Poklonskaya, rages on. A patchy music clip made from Poklonskaya’s videos has scored millions of views on YouTube, with a celebrity opposition figure calling the attorney a "sex symbol of Russia."
Here is the actual speech that Pokloskaya made to the press on 17 March 2014, with English subtitles.
Footage of Poklonskaya's emotional speech on the coup d’état and “chaos” in Ukraine has been making rounds on the internet since March, but this is the first time it has been set to music.
The chorus of the music mix, compiled by an anonymous internet DJ known only by his alias 'Enjoykin,' could certainly be described as simplistic.
In a combination of the official speech and several informal interviews, Poklonskaya appears to be singing: “Power. Blood. Nyash-myash. Blood. Power. Crimea is ours,” (which rhymes in Russian).
The “nyash-myash” bit was apparently taken out from Poklonskaya’s own reaction to her becoming an anime star and receiving a Russian nickname of
Nyasha – to which she replied that she would prefer to be perceived as a prosecutor and will not allow any “nyash” or “myash” while at her post.
On a more serious note, the rest of the clip offers cuts from Poklonskaya's solemn statement which said that “the anti-constitutional mayhem has led to a massive bloodshed...we have no moral right to step aside from our people...our task is to get the work of the prosecutor’s office back on track in this country.”
It also features some original Japanese-style animation of Poklonskaya fighting monsters and sending a toy boat of 'friendship' to a girl who is possibly representing Ukraine.
The video, which was uploaded to YouTube on Tuesday afternoon, managed to grasp 3,791,552 views and counting by Friday.
The 34-year-old blonde, who is piled up with work as the Republic of Crimea transitions into a Russian region, was shown the clip by Kseniya Sobchak – a Russian opposition activist, journalist, and celebrity.
Sobchak said she was proud to be “the first journalist who showed the beautiful prosecutor Natalya Poklonskaya the 'Nyash-myash' clip,” stating on Twitter that “she is so beautiful – the sex symbol of Russia.”
It is believed that Poklonskaya took the job after four of her male colleagues refused to take the risk days ahead of the March 16 Crimean referendum on independence from Ukraine, in which 96.77 percent of voters chose to join Russia. The Black Sea republic was then accepted into the Russian Federation on March 21.
The courageous blonde has said that she will “prove” she is worthy of the position, adding that she is not afraid of persecution by Kiev. Poklonskaya is wanted by the Security Service of Ukraine on charges of “violent overthrow of constitutional order and takeover of government power.”
This article has been adapted from one on Russia Today, entitled "Crimean prosecutor music clip hits 3.7 mn views in three days"
Inside a short video on privatisation of electricity. In 1994, the Kennett government disaggregated the SECV into five distribution and retail companies (absorbing the MEUs in the process), five generation companies, and a transmission company. Along with other state-owned utilities (such as the Gas and Fuel Corporation of Victoria), these businesses were all corporatised, then privatised between 1995 and 1999.
The only entities remaining in State Government ownership is the wholesale market operator Victorian Power Exchange (VPX) and the SECV shell which holds indentures for debts owed to it by brown coal development company HRL Limited, and pays Alcoa annual subsidies for its significant electricity needs. VPX was subsequently reorganised with its market and system operation functions being transferred to the National Electricity Market Management Company (NEMMCO) and its transmission planning functions being transferred to VENCorp (now Australian Energy Markets Operator - AEMO).
Currently, the Essential Services Commission of Victoria is responsible for the regulation retail businesses and the Australian Energy Regulator is responsible for regulating distribution, transmission and the wholesale electricity market. Source: http://en.wikipedia.org/wiki/State_Electricity_Commission_of_Victoria
Juhasz is visiting the South American nation in response to an invitation made by the National Secretariat of Communications of Ecuador to join the international campaign launched by President Rafael Correa in September to raise international awareness about the environmental disaster caused by the oil giant when it operated in the country between 1964 and 1990.
Antonia Juhasz is an oil and energy expert, author and investigative journalist. She is the author of three books related to the oil industry and the influence of multinational oil companies in international politics. Juhasz is a well-known critic of Chevron, having conducted years of extensive investigations into its operations, and writing about Chevron in each of her three books and in dozens of articles. In one of her earlier books, The Bush Agenda: Invading the World, One Economy at a Time, Juhasz exposed the use of corporate globalization policy as a weapon of war during the Bush administration, and the role that major corporations, like Chevron, played in the creation of this agenda.
Juhasz will visit one of the contaminated areas in the province of Sucumbios, where actor Danny Glover, visiting last week said that “Chevron must be held accountable” for the damages. Many of these oil pits were operated exclusively by Chevron-Texaco. Juhasz will be able to confirm first-hand a fact that Chevron fails to admit in its press releases, that during its operations in Ecuador, Chevron’s predecessor, Texaco, used substandard and outdated methods to handle the toxic wastes, and systematically dumped over 18 billion gallons of wastewater and oil by-products into unlined pits, that subsequently caused the contamination of the soil, rivers, streams and groundwater in the areas where the company operated.
In February of 2011, Ecuador’s Superior Court of Nueva Loja issued a judgment (Aguinda v. Chevron No. 2003-0002), ordering Chevron to pay $18.3 billion for damages to the environment and the health of the local communities. Chevron refuses to pay the award claiming that the ruling is illegitimate, and instead has filed a lawsuit in a federal court in New York against the Ecuadorians and their lawyers based on the Racketeering Influenced and Corrupt Organizations Act.
The trial began on October 15 in New York. The judge overseeing the trial, Lewis Kaplan, has been accused by the plaintiffs of bias in favor of Chevron through a petition for Writ of Mandamus, which was filed at the U.S. Court of Appeals. (11-2259) The case is Chevron Corp. v. Donziger et al., case number 2:11-cv-00691, in the U.S. District Court for the Southern District of New York.
Antonia Juhasz is promoted by her PR agency as a regular guest commentator on issues related to the energy industry, appearing on major U.S. TV networks and national radio. They add that "Her writings have appeared in many publications, including The Atlantic, Harper’s Magazine, The New York Times, Washington Post, The Huffington Post, International Herald Tribune, Rolling Stone Magazine, and others.
Images here were trawled for from Google Earth. The photos are by Marco Imbaguingo. They do not necessarily relate to the companies mentioned above, but give an idea of the terrain and of the size of some old explorations.
- To extract oil and other minerals from locations where extraction is very difficult, such as in shale formations, or very deep under the sea;
- To mitigate water shortages and pollution issues, using processes such as desalination and long distance transport of food; and
- To attempt to reduce future fossil fuel use, by building devices such as solar panels and electric cars that increase fossil fuel energy use now in the hope of reducing energy use later.
We have long known that the world is likely to eventually reach limits. In 1972, the book The Limits to Growth by Donella Meadows and others modeled the likely impact of growing population, limited resources, and rising pollution in a finite world. They considered a number of scenarios under a range of different assumptions. These models strongly suggested the world economy would begin to hit limits in the first half of the 21st century and would eventually collapse.
The indications of the 1972 analysis were considered nonsense by most. Clearly, the world would work its way around limits of the type suggested. The world would find additional resources in short supply. It would become more efficient at using resources and would tackle the problem of rising pollution. The free market would handle any problems that might arise.
The Limits to Growth analysis modeled the world economy in terms of flows; it did not try to model the financial system. In recent years, I have been looking at the situation and have discovered that as we hit limits in a finite world, the financial system is the most vulnerable part because of the system because it ties everything else together. Debt in particular is vulnerable because the time-shifting aspect of debt “works” much better in a rapidly growing economy than in an economy that is barely growing or shrinking.
The problem that now looks like it has the potential to push the world into financial collapse is something no one would have thought of—high oil pricesclip_image002 that take a slice out of the economy, without anything to show in return. Consumers find that their own salaries do not rise as oil prices rise. They find that they need to cut back on discretionary spending if they are to have adequate funds to pay for necessities produced using oil. Food is one such necessity; oil is used to run farm equipment, make herbicides and pesticides, and transport finished food products. The result of a cutback in discretionary spending is recession or near recession, and less job availability. Governments find themselves in financial distress from trying to mitigate the recession-like impacts without adequate tax revenue.
One of our big problems now is a lack of cheap substitutes for oil. Highly touted renewable energy sources such as wind and solar PV are not cheap. They also do not substitute directly for oil, and they increase near-term fossil fuel consumption. Ethanol can act as an “oil extender,” but it is not cheap. Battery powered cars are also not cheap.
The issue of rising oil prices is really a two-sided issue. The least expensive sources of oil tend to be extracted first. Thus, the cost of producing oil tends to rise over time. As a result, oil producers tend to require ever-rising oil prices to cover their costs. It is the interaction of these two forces that leads to the likelihood of financial collapse in the near term:
- Need for ever-rising oil prices by oil producers.
- The adverse impact of high-energy prices on consumers.
If a cheap substitute for oil had already come along in adequate quantity, there would be no problem. The issue is that no suitable substitute has been found, and financial problems are here already. In fact, collapse may very well come from oil prices not rising high enough to satisfy the needs of those extracting the oil, because of worldwide recession.
The fact that few stop to realize is that energy of the right type is absolutely essential for making goods and services of all kinds. Even if the services are simply typing numbers into a computer, we need energy of precisely the right kind for several different purposes:
- To make the computer and transport it to the current location.
- To build the building where the worker works.
- To light the building where the worker works.
- To heat or cool the building where the worker works.
- To transport the worker to the location where he works.
- To produce the foods that the worker eats.
- To produce the clothing that the worker wears.
Furthermore, the energy used needs to be inexpensive, for many reasons—so that the worker’s salary goes farther; so that the goods or services created are competitive in a world market; and so that governments can gain adequate tax revenue from taxing energy products. We don’t think of fossil fuel energy products as being a significant source of tax revenue, but they very often are, especially for exporters (Rodgers map of oil “government take” percentages).
Some of the energy listed above is paid for by the employer; some is paid for by the employee. This difference is irrelevant, since all are equally essential. Some energy is omitted from the above list, but is still very important. Energy to build roads, electric transmission lines, schools, and health care centers is essential if the current system is to be maintained. If energy prices rise, taxes and fees to pay for basic services such as these will likely need to rise.
For most primates, such as chimpanzees and gorillas, the number of the species fluctuates up and down within a range. Total population isn’t very high. If human population followed that of other large primates, there wouldn’t be more than a few million humans worldwide. They would likely live in one geographical area.
How did humans venture out of this mold? In my view, a likely way that humans were able to improve their dominance over other animals and plants was through the controlled use of fire, a skill they learned over one million years ago (Luke 2012). Controlled use of fire could be used for many purposes, including cooking food, providing heat in cool weather, and scaring away wild animals.
The earliest use of fire was in some sense very inexpensive. Dry sticks and leaves were close at hand. If humans used a technique such as twirling one stick against another with the right technique and the right kind of wood, such a fire could be made in less than a minute (Hough 1890). Once humans had discovered how to make fire, they could use it to leverage their meager muscular strength.
The benefits of the controlled use of fire are perhaps not as obvious to us as they would have been to the early users. When it became possible to cook food, a much wider variety of potential foodstuffs could be eaten. The nutrition from food was also better. There is even some evidence that cooking food allowed the human body to evolve in the direction of smaller chewing and digestive apparatus and a bigger brain (Wrangham 2009). A bigger brain would allow humans to outsmart their prey. (Dilworth 2010)
Cooking food allowed humans to spend much less time chewing food than previously—only one-tenth as much time according to one study (4.7% of daily activity vs. 48% of daily activity) (Organ et al. 2011). The reduction in chewing time left more time other activities, such as making tools and clothing.
Humans gradually increased their control over many additional energy sources. Training dogs to help in hunting came very early. Humans learned to make sailboats using wind energy. They learned to domesticate plants and animals, so that they could provide more food energy in the location where it was needed. Domesticated animals could also be used to pull loads.
Humans learned to use wind mills and water mills made from wood, and eventually learned to use coal, petroleum (also called oil), natural gas, and uranium. The availability of fossil fuels vastly increased our ability to make substances that require heating, including metals, glass, and concrete. Prior to this time, wood had been used as an energy source, leading to widespread deforestation.
With the availability of metals, glass, and concrete in quantity, it became possible to develop modern hydroelectric power plants and transmission lines to transmit this electricity. It also became possible to build railroads, steam-powered ships, better plows, and many other useful devices.
Population rose dramatically after fossil fuels were added, enabling better food production and transportation. This started about 1800.
All of these activities led to a very long history of what we today might call economic growth. Prior to the availability of fossil fuels, the majority of this growth was in population, rather than a major change in living standards. (The population was still very low compared to today.) In later years, increased energy use was still associated with increased population, but it was also associated with an increase in creature comforts—bigger homes, better transportation, heating and cooling of homes, and greater availability of services like education, medicine, and financial servicesclip_image002.
How Cheap Energy and Technology Combine to Lead to Economic Growth
Without external energy, all we have is the energy from our own bodies. We can perhaps leverage this energy a bit by picking up a stick and using it to hit something, or by picking up a rock and throwing it. In total, this leveraging of our own energy doesn’t get us very far—many animals do the same thing. Such tools provide some leverage, but they are not quite enough.
The next step up in leverage comes if we can find some sort of external energy to use to supplement our own energy when making goods and services. One example might be heat from a fire built with sticks used for baking bread; another example might be energy from an animal pulling a cart. This additional energy can’t take too much of (1) our human energy, (2) resources from the ground, or (3) financial capital, or we will have little to invest what we really want—technology that gives us the many goods we use, and services such as education, health care, and recreation.
The use of inexpensive energy led to a positive feedback loop: the value of the goods and service produced was sufficient to produce a profit when all costs were considered, thanks to the inexpensive cost of the energy used. This profit allowed additional investment, and contributed to further energy development and further growth. This profit also often led to rising salaries. The additional cheap energy use combined with greater technology produced the impression that humans were becoming more “productive.”
For a very long time, we were able to ramp up the amount of energy we used, worldwide. There were many civilizations that collapsed along the way, but in total, for all civilizations in the world combined, energy consumption, population, and goods and services produced tended to rise over time.
In the 1970s, we had our first experience with oil limits. US oil production started dropping in 1971. The drop in oil production set us up as easy prey for an oil embargo in 1973-1974, and oil prices spiked. We got around this problem, and more high price problems in the late 1970s by
- Starting work on new inexpensive oil production in the North Sea, Alaska, and Mexico.
- Adopting more fuel-efficient cars, already available in Japan.
- Switching from oil to nuclear or coal for electricity production.
- Cutting back on oil intensive activities, such as building new roads and doing heavy manufacturing in the United States.
The economy eventually more or less recovered, but men’s wages stagnated, and women found a need to join the workforce to maintain the standards of living of their families. Oil prices dropped back, but not quite a far as to prior level. The lack of energy intensive industries (powered by cheap oil) likely contributed to the stagnation of wages for men.
Recently, since about 2004, we have again been encountering high oil prices. Unfortunately, the easy options to fix them are mostly gone. We have run out of cheap energy options—tight oil from shale formations isn’t cheap. Wages again are stagnating, even worse than before. The positive feedback loop based on low energy prices that we had been experiencing when oil prices were low isn’t working nearly as well, and economic growth rates are falling.
The technical name for the problem we are running into with oil is diminishing marginal returns. This represents a situation where more and more inputs are used in extraction, but these additional inputs add very little more in the way of the desired output, which is oil. Oil companies find that an investment of a given amount, say $1,000 dollars, yields a much smaller amount of oil than it used to in the past—often less than a fourth as much. There are often more up-front expenses in drilling the wells, and less certainty about the length of time that oil can be extracted from a new well.
Oil that requires high up-front investment needs a high price to justify its extraction. When consumers pay the high oil price, the amount they have for discretionary goods drops. The feedback loop starts working the wrong direction—in the direction of more layoffs, and lower wages for those working. Companies, including oil companies, have a harder time making a profit. They find outsourcing labor costs to lower-cost parts of the world more attractive.
Even apart from the oil price problem, there are other reasons to think that growth cannot continue indefinitely in a finite world. For one thing, we are already running short of fresh water in many parts of the world, including China, India and the Middle East. Topsoil is eroding, and is being depleted of minerals. In addition, if population continues to rise, we will need a way to feed all of these people—either more arable land, or a way of producing more food per acre.
Pollution is another issue. One type is acidification of oceans; another leads to dead zones in oceans. Mercury pollution is a widespread problem. Fresh water that is available is often very polluted. Excess carbon dioxide in the atmosphere leads to concerns about climate change.
There is also an issue with humans crowding out other species. In the past, there have been five widespread die-offs of species, called “Mass Extinctions.” Humans seem now to be causing a Sixth Mass Extinction. Paleontologist Niles Eldredge describes the Sixth Mass Extinction as follows:
- Phase One began when first humans began to disperse to different parts of the world about 100,000 years ago. [We were still hunter-gatherers at that point, but we killed off large species for food as we went.]
- Phase Two began about 10,000 years ago, when humans turned to agriculture.
According to Eldredge, once we turned to agriculture, we stopped living within local ecosystems. We converted land to produce only one or two crops, and classified all unwanted species as “weeds”. Now with fossil fuels, we are bringing our attack on other species to a new higher level. For example, there is greater clearing of land for agriculture, overfishing, and too much forest use by humans (Eldredge 2005).
In many ways, the pattern of human population growth and growth of use of resources by humans are like a cancer. Growth has to stop for one reason or other—smothering other species, depletion of resources, or pollution.
The problem we are running into now is not an easy one to figure out because the problem crosses many disciplines. Is it a financial problem? Or a climate change problem? Or an oil depletion problem? It is hard to find individuals with knowledge across a range of fields.
There is also a strong bias against really understanding the problem, if the answer appears to be in the “very bad to truly awful” range. Politicians want a problem that is easily solvable. So do sustainability folks, and peak oil folks, and people writing academic papers. Those selling newspapers want answers that will please their advertisers. Academic book publishers want books that won’t scare potential buyers.
Another issue is that nature works on a flow basis. All we have in a given year in terms of resources is what we pull out in that year. If we use more resources for one thing–extracting oil, or making solar panels, it leaves less for other purposes. Consumers also work mostly from the income from their current paychecks. Even if we come up with what looks like wonderful solutions, in terms of an investment now for payback later, nature and consumers aren’t very co-operative in producing them.
Consumers need ever-more debt, to make the solutions sort of work. If one necessary resource–cheap oil–is in short supply, nature dictates that other resource uses shrink, to work within available balances. So there is more pressure toward collapse.
Virtually no one understands our complex problem. As a result, we end up with all kinds of stories about how we can fix our problem, none of which make sense:
“Humans don’t need fossil fuels; we can just walk away.” – But how do we feed 7 billion people? How long would our forests last before they are used for fuel?
“More wind and solar PV” – But these use fossil fuels now, and don’t fix oil prices.
“Climate change is our only problem.”—Climate change needs to be considered in conjunction with other limits, many of which are hitting very soon. Maybe there is good news about climate, but it likely will be more than offset by bad news from limits not considered in the model.
This article was originally published on 04.11.2013 on Gail Tverberg's blog, Our Finite World:
Gail Tverberg is an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. The financial system is also likely to be affected. Gail writes on these issues at Our Finite World.