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The Coming Energy Wars

Rana Foroohar, Newsweek
Oil prices could hit $200 a barrel in the next few months. How the spike changes everything.

This spring, America hit a historic point. With average gas prices per gallon edging toward $4, America’s notoriously profligate ways started to change fast. Americans are driving less, using mass transit more, buying fewer gas guzzlers, indeed shopping less wantonly in general, and lowering their previously unshakable confidence as consumers. Suddenly, Americans are acting differently; if not exactly like Swedes, then not quite like themselves, either. It’s a shift that could change the world.

… “We sailed through $80 a barrel,” notes energy authority Daniel Yergin, author of “The Prize: The Epic Quest for Oil, Money and Power” and chairman of Cambridge Energy Research Associates. “But that doesn’t mean we’ll sail through $200 a barrel. That sort of price would have enormous global consequences.”

… No industry will be unaffected. Any company that moves goods or people needs oil. At $200 oil could make the long-predicted death of Detroit, or at least one of its Big Three, a reality. Airlines are vulnerable too.

… Indeed, there’s concern that as higher oil prices force many Asian economies to reduce or even cut their generous fuel subsidies, growth will slow sharply, and there could be social unrest as the world’s poorest become more desperate. The political ramifications of this (which already include moves away from free trade), combined with the ever-rising costs of doing business as usual, could force a retrenchment from globalization.

… Worse conflicts are possible. “As areas like the Mideast and Africa, Russia and Venezuela continue to rise, you’re going to see increasing energy greed, aggressive behaviors and neocolonial actions on the part of various countries,” predicts Scott Nyquist, the head of McKinsey’s energy practice. As Iran gets richer, Hizbullah might get stronger. China will clearly wield more might in Africa. Western ideas about civil society, the environment and women’s rights could be displaced with new sets of values.
(9 June 2008 issue)
Cover story. Nice round-up of some of the trends that accompany rising oil prices. Alas, the term “peak oil” is still taboo. -BA

How Will Gas Prices affect the Blue Collar/Poor

Noah Cicero, The Outsider (blog)
There is a lot of talk about how gas prices affect stock brokers, middle-class homeowners, corporations, and people who can afford Hummers. But how much can the blue collar/poor take? Where do they stand in all this? What are their views on the gas prices? Will they eventually start rioting? What will make them riot?

Now we must not take into consideration the science, the geology of Peak Oil nor take into account the price of a barrel of oil when discussing blue collar/poor people’s view on oil. The only thing that affects them is price. They have been trained to be consumers, they view themselves as consumers. They view this problem in terms of consumption.

… The Blue Collar/Poor View: There are three main views.

1.Gas prices are so high because corporations are doing it to make a profit. They do not understand economics and that the ways to make a profit are through cheaper machinery, cheaper labor, advertising, and coupons. It is absurd to raise the price of a product by 100 percent in one year. That will only cause a decrease in sales. Most blue collar/poor have no idea how capitalism works.

2.There is oil in Alaska and in the gulf and “tree-huggers” will not let us use it. Even though the science shows that there isn’t that much oil there and it is expensive to get it out and refine.

3.I have heard many white males say that it is because of the blacks in Nigeria and the Arabs who hate American freedom. (The racist theory of oil prices.)

Blue collar/poor people have no interest in alternative energy sources. I have never heard the phrase “alternative energy source” come out of a blue collar/poor person’s mouth. That phrase is used by upper class people who have an invested interest in our current way of life.

… The Blue collar/poor will get hurt bad: The trucking industry employs 9 million people. 3.3 million of them are truckers.

… The construction business will be hurt. There is obviously no need to build any new houses. We have so many houses we don’t even know what to do with them.

… There is one final thing to be noted. What if the television is turned off? Blue collar/poor rely on television like 1250 A.D. Europeans relied on the church. The television tells them what to do, what to think, what to purchase.

… Concerning the question will the blue collar/poor be able to adapt. There are many poor who do not have cars now. Many of the blue collar/poor know how to garden, hunt, carpentry, they are used to hard work and suffering. But I will not say there is an American or blue collar “spirit” involved that could help them. I think those who will adapt to a new world, will come from every class and ethnic group and the important factor will be if they make the personal choice to change.
(26 May 2008)
Long essay. I don’t agree with the gloomy judgments of working class people, perhaps because when I was in labouring jobs (60s and 70s), people had not been beaten down so much and there were traditions of unionism and self-respect. At least Noah Cicero is talking about the issue — no one else except Joe Bageant seems to be tackling it.

According to Wikipedia: “Noah Cicero (born 1980) is an American novelist, essayist, playwright, short-story writer, and poet. He lives in Youngstown, Ohio, and is the author of four books of fiction.”

Fuel Costs Incite Protests by Fishermen in Europe

Alan Cowell, New York Times
PARIS – Commercial fishermen across Europe carried out new protests on Friday against soaring fuel bills, blockading ports and refineries in France and handing out fresh fish in Madrid.

The protests against diesel fuel costs have been simmering all week, with truckers in Britain blocking highways and fishing vessels halting port traffic on the English Channel in France.

… The Spanish government did not respond to the protests, and more trouble was on the way: Truck and taxi drivers were threatening a strike next week.
(31 May 2008)

Living with petrol at $3/litre

David Nankervis, Adelaide Now
AUSTRALIANS will increasingly be forced to adopt European-style lifestyles because of skyrocketing petrol prices which could hit $3 a litre, experts believe.
While life won’t quite come to a halt when petrol hits $3 a litre, it will no longer be lived as we know it, social analysts and economists say.

They predict massive changes, from the type of cars Australians drive, to where we live and how we work and play. DAVID NANKERVIS reports:


MANY Europeans already live with petrol prices approaching $3 a litre, and countries like Britain and the Czech Republic provide pointers to our future, according to respected demographer Bernard Salt.

The State Government could look to this region for solutions to the huge pressure public transport would be under if petrol prices were to double by 2013, Mr Salt said.

“Demand for public transport will soar and more people will be getting crammed on to buses and trains,” he said.

“So maybe the Government should look at (the Czech capital) Prague. It has a population of around one million and has a three-line metro system – maybe Adelaide public transport could go underground too?
(1 May 2008)
Contributor Michael Lardelli writes:
Published in Adelaide’s Sunday tabloid. Interesting because the article is written in a non-sensationalist style. The tone is more one of acceptance of what the future holds and that there will be change. I also noticed a couple of very good letters in the peak oil vein in the Saturday paper from people outside of the “peak oil” community that I am aware of. I get a very strong feeling that the “tipping point” (sorry about the cliché) has been reached in terms of awareness that we are moving into an age of expensive fuel. This is also shown by most media’s negative attitude to the silly debate between the two major political parties over how to reduce the price of fuel by a few cents. The debate is widely recognised as not addressing the longer term issue of how to cope with rising fuel prices.

Gates Warns China Not to Bully Region on Energy

Eric Schmitt, New York Times
Defense Secretary Robert M. Gates issued a set of thinly veiled warnings to China on Saturday, cautioning that it could risk its share of further gains in Asia’s economic prosperity if it bullied its neighbors over natural resources in contested areas like the South China Sea.

… He said that in his four trips to Asia since becoming defense secretary 18 months ago, several countries had expressed concern about “the security implications of rising demand for resources” (translation: China’s voracious quest for new sources of energy) and about “coercive diplomacy” (translation: China’s contested claims of resource-rich territorial waters).
(31 May 2008)