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The Giant Sucking Sound
Roland Watson, New Era Investor
There has been an increase in the volume recently of that “giant sucking sound” that has generally prevailed over the world for decades now. It is known more popularly by the term “American oil demand” and it stands at about 24% of crude oil world production.
Ross Perot may not have had oil on his mind when he coined that colourful 1992 phrase (he was referring to American jobs and NAFTA), but the giant straw has now been heard sucking loudly in the Rotterdam spot markets in Europe. Refinery hits by Hurricane Katrina in Louisiana may seem an American issue but the effects are global. Gasoline prices (or “petrol” in Britain and “essence” in France) have gone up in Europe in response to the European markets tightening with the arrival of the representatives of America’s SUV owners. They have one thing that Europeans have less off and that is buying power and it showed as prices at pumps across Europe went up as the gasoline barrels changed direction to head West to the USA across the Atlantic.
It’s a sellers’ market and Europeans are beginning to learn a little of what poorer nations in Guatemala, Nigeria and Indonesia already know. When the big bucks arrive, the oil departs. In a free market, highest bidder wins and with a $12 trillion economy in a $50 trillion world economy, the United States of America beats all bidders hands down!
In those poorer countries, the losing bidders rioted in the streets. In Britain, France and Germany, so far, the outbidden check their disposable income and merely grumble. I would only mention that last time petrol prices got too high, truckers blockaded various roads and refineries in Britain in protest. The Chancellor of the Exchequer “generously” agreed not to further increase fuel duty. When Peak Oil blows in, we can expect him to start reducing fuel duty forever or he will find Downing Street itself blockaded.
(4 September 2005)
4%, 11%, Who the Hell Cares?
Stuart Staniford, The Oil Drum
Who cares about the depletion rate? It’s some small fussy number that we don’t know, right? Peak Oil is PEAK OIL! Once we hit the peak all bets are off.
Wrong, I say. Once we are post-peak, the depletion rate is going to be the single most important variable by far. I argue it controls whether peak oil is minor unpleasantness, or Overshoot-style die-off. If we understand these issues, I think it can help to clarify exactly why one might choose to live at one or other end of the peak-oil spectrum – complacency or panic.
(6 September 2005)
In the Background
James Howard Kunstler, Clusterf*ck Nation
We’ve entered the blame-o-rama phase of Hurricane Katrina. I actually heard Homeland Security Secretary Michael Chertoff sparring with NPR’s Robert Siegal on the air last Thursday, and a more weasily performance than Chertoff’s would be hard to find in any bureaucratic circle of hell.
FEMA chief Michael Brown gave new dimension to the word “clusterfuck” by blocking private charity shipments of food and water into New Orleans and making the armed forces “work around” his agency in order to get anything done. And it was revealed yesterday that a navy hospital ship idled with empty beds off the Louisiana coast without orders while old people died slow deaths on the sidewalks outside the Convention Center.
There has already been one proposal for rebuilding the city, from Daniel Libeskind, whose proposal for turning the World Trade Center site into the set for a German expressionist horror movie won the hearts and minds of the architectural mandarins in New York. Libeskind said that New Orleans should adopt a jazz theme. Wow! Maybe they should think about serving Creole food to go with it.
The actual tendency in practice, is to build back pretty much what was there before, because the insurance companies demand it. If a strip mall was washed away, then the insurer will only finance the rebuilding of a strip mall. This is most unfortunate, particularly for those places further east of New Orleans along the Gulf Coast, and a hundred miles inland, because they were composed primarily of suburban sprawl. If they rebuild along that template, they will do so in the face of strong signals from reality that the age of Easy Motoring is over. The romance of the car may be too great to overcome in Dixie.
(6 September 2005)
Global warming hits New Orleans: the controversy after the storm
Jeremy Rifkin, The Chosun (Korea) via Common Dreams
First the deafening roar of Katrina bearing down at 145 miles per hour on the gulf coast of the United States. Now the eerie silence, as victims wash ashore and out to sea. And in the aftermath, it seems that all of official Washington is holding its breath, less the dirty little secret gets out: that Katrina is the entropy bill for increasing CO2 emissions and global warming. The scientists have been warning us for years. They said to keep our eyes on the Caribbean where the dramatic effects of climate change are first likely to show up in the form of more severe and even catastrophic hurricanes. Indeed. Over the course of the past several years, hurricane activity and intensity has picked up in the Caribbean basin. Now the killer storm Katrina has hit with a vengeance, exacting incomprehensible devastation on a wide swath of the southeastern portion of the United States.
The reality is, Katrina will be looked back on as a “tipping point” of the fossil fuel era the moment when the American public began to discard the comfortable myth that the end of the oil era and the cataclysmic effects of global warming lie far in the distant future. The future arrived on the shores of Lake Ponchartrain with a giant wave of water rushing through the streets of New Orleans, wreaking destruction and havoc on the low-lying lands of the Mississippi gulf region on Monday, August 29th and the result is that America and the world have changed forever.
(6 September 2005)
The End of Oil
H.D.S. Greenway, Boston Globe via Common Dreams
Some time ago National Public Radio collected the recorded voices of the last five or six American presidents and broadcast them, each with his own distinctive tone, all saying exactly the same thing: America has to end its dependency on foreign oil.
Today President Bush makes much the same kind of statements as his predecessors did, but the measures he recommends hold only a little promise. And today the problem is rapidly becoming not just foreign oil, but oil itself.
To be fair, the president is absolutely right when he says that our energy problems cannot be solved overnight. ”Most of the serious problems, such as high gasoline costs or the rising dependence on foreign oil have developed over decades. It’s going to take years of focused effort to alleviate those problems.”
His critics have said that the $14.5 billion energy bill is a giveaway of tax breaks to energy companies, including nuclear, but the world is going to need all the oil it can get in the next three or four decades, and alternatives have to be financially encouraged. The trouble comes when the ”focused effort” wanes, and politicians become unwilling to pay even a short-term price for a long-term gain.
(6 September 2005)
Peak oil, Business As Usual, and Katrina
Bill Henderson, Al-Jazeerah
The world’s capital stock doesn’t turnover over night. Those who bought SUVs made a big capital investment. In the short-run, they have to pay up to reap any benefit from that investment. The composition of the US auto fleet changes slowly, and that same is true globally. Moreover, Detroit now makes a lot of SUVs, and it cannot suddenly shift to making hybrids. Capital investment and sunk costs and the like. So it is giving the SUVs away at cost, more or less – further delaying the shift in the composition of the US fleet.
…There is a bigger picture here: EO Wilson’s Bottleneck, Bill Catton Jrs OVERSHOOT, the once and forever end of oil. There is a dawning appreciation of what good government should be but isn’t, and how close we are all to chaos and cruel inhumanity when calamity strikes, and the importance of strong institutions and the rule of law.
But, like peak oil and Iraq, most of us will only awaken to reality in the wake of the storm surge.
(5 September 2005)
The Silent Oil Crisis
James Howard, PowerSwitch
In this article we look at how just because developed economies are not suffering like they did during the 1970s that the oil crisis has not already begun. The final oil crisis has begun, silent to us, but dangerously there.
Adjusted to modern day prices, the historical record price for oil was $80 as a result of the second 1970’s oil crisis – a crisis brought about by political circumstances, not geological realities. The 25th August 2005 saw the price for a barrel of oil pass $68, just $12 from that high. Lessons from history suggest that high oil prices mean bad news for the economy, thus our jobs and way of life.
(5 September 2005)
A correspondent reports Eritea has resumed private gasoline sales.-LJ
