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Why North Korea Was a Global Crisis Canary
John Feffer, TomDispatch
Mother Earth’s Triple Whammy
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Gas prices are above $4 a gallon; global food prices surged 39% last year; and an environmental disaster looms as carbon emissions continue to spiral upward. The global economy appears on the verge of a TKO, a triple whammy from energy, agriculture, and climate-change trends. Right now you may be grumbling about the extra bucks you’re shelling out at the pump and the grocery store; but, unless policymakers begin to address all three of these trends as one major crisis, it could get a whole lot worse.
Just ask the North Koreans.
In the 1990s, North Korea was the world’s canary. The famine that killed as much as 10% of the North Korean population in those years was, it turns out, a harbinger of the crisis that now grips the globe — though few saw it that way at the time.
That small Northeast Asian land, one of the last putatively communist countries on the planet, faced the same three converging factors as we do now — escalating energy prices, a reduction in food supplies, and impending environmental catastrophe. At the time, of course, all the knowing analysts and pundits dismissed what was happening in that country as the inevitable breakdown of an archaic economic system presided over by a crackpot dictator.
They were wrong. The collapse of North Korean agriculture in the 1990s was not the result of backwardness. In fact, North Korea boasted one of the most mechanized agricultures in Asia. Despite claims of self-sufficiency, the North Koreans were actually heavily dependent on cheap fuel imports. (Does that already ring a bell?)
(17 June 2008)
Introduction by TD editor Tom Engelhardt at the original, with the title, “Are We All North Koreans Now?” . Essay is also posted at Gristmill.
Five questions with Tom Petrie
As price rations consumption, ‘it’s not all a bad thing’ for oil
Tom Fowler, Houston Chronicle
After 38 years in the energy business, Tom Petrie has a unique view, but he was hardly alone in predicting sub-$100 oil earlier this year. The co-founder of advisory firm Petrie Parkman & Co., now a vice chairman with Merrill Lynch following its 2006 acquisition of his firm, says the oil market has confounded many this year as it continues into uncharted territory.
… Q: Are speculators playing a role in the high prices?
A: Quite clearly there are financial players, and those financial players might be labeled speculators, but they are also subject to the same drivers of resource maturation and resource nationalism by countries like Russia, Venezuela and Nigeria. So, are they a factor? Yes. They operate with some leverage, but there is a risk in overstating that. There are really serious issues that are putting us at the point of practical peak oil. That’s different than geologic peak oil, but the impact is the same.
Q: Are you concerned the high prices will trigger retraction or demand destruction?
A: They will, and frankly, we need it to happen. If we don’t destroy some demand and therefore change patterns of consumption in this country, I don’t see how we really can balance the equation this time. If I’m half right about this idea of practical peak oil, then we need to use price as a way to ration consumption. It’s not all a bad thing.
(17 June 2008)
The Next Challenge For the Maintenance Department
Brendan Casey, Machinery Lubrication
… The fact you’re reading this tells me you are involved in industry, directly or indirectly. And there’s no escaping the fact that industry is a huge consumer of energy. If peak oil and global warming are real issues – and there’s a growing body of evidence to suggest they are – then I predict energy management will become a major issue for industry over the next decade and beyond. At least some of this burden will fall on the maintenance department.
… Having reliable machines will not be enough. Highly efficient, reliable machines will be required. Some who achieve it will gain a real advantage. For others, it will be mandatory just to remain competitive.
This begs the question: How efficient are your machines? If your current focus is on keeping your machines running, then it’s an issue you probably don’t think much about.
Brendan Casey has more than 19 years experience in the maintenance, repair and overhaul of mobile and industrial hydraulic equipment.
(May 2008)
Dutch government acknowledges peak gas
Rembrandt Koppelaar, The Oil Drum: Europe
Today a historic moment took place. The Dutch government acknowledged in its new energy strategy that Dutch natural gas production has passed its peak (file in Dutch here). Stating that the peak occurred in 2007/2008 and the Netherlands will have become a net importer of natural gas by 2025.
The forecast as presented is quite similar to a forecast I made two years ago which can be viewed here in Euan Mearns’ excellent European Gas overview. The conclusion I made back then was derived from Dutch gas reserve figures, expected discoveries and the production cap on the Slochteren field. Dutch gas reserves have been declining since the 1980s.
As a policy response the Dutch government wants to channel more of its income derived from natural gas production to sustainable energy
(18 June 2008)
Can A ‘Shadow OPEC’ of ‘Global Guerrillas’ Set Global Oil Prices?
John Robb, The Oil Drum
The run-up in oil prices over the last four years is usually framed, likely correctly, as a combination of torrential demand from developing countries (China and India), speculation, and peak supply. Other analysis indicates that production is also being damaged due to NOC mismanagement, political instability, and rapid increases in domestic consumption within oil exporting countries.
However, the rapidity and volatility of current oil prices may be due to a more narrow set of factors surrounding the production of light sweet crude: the comparative quality and scarcity of light sweet crude, world demand, and guerrilla systems disruption.
… 3) Guerrilla systems disruption. Much of our global production of light sweet crude is located in countries where small bands of guerrillas, loosely organized within what’s called an open source insurgency, have been disrupting production and preventing investment. The cumulative impact of this activity may constitute a “Shadow OPEC” (akin to the impact of thousands of ants vs. that of an elephant). Let’s look at this in detail.
A Concentration of Disruption
The war in Iraq has proven to be a proving ground for the strategies and tactics of 21st Century warfare, much like the Spanish Civil War was for WW2. Unfortunately, the bulk of the improvement has been in how small groups of guerrillas/terrorists can defeat a nation-state. Of particular note has been the increasing use of sabotage and targeted violence to induce systemic failures in critical infrastructure. These use of these methods have been concentrated in many of the states that produce light sweet crude.
John Robb is an author, an entrepreneur, a blogger at Global Guerrillas, and a former USAF pilot in special operations. His book, Brave New War was published in April 2007 by Wiley, which can be purchased here. The book apparently is influential, since Robb was named one of the “Best and Brightest” by Esquire Magazine and invited to speak at a plethora of venues (the DoD, CIA, NSA, NIC, Highlands Forum, Center for Biosecurity, and many more). The book is also being used in universities from the Naval Post Graduate School to Johns Hopkins.
(18 June 2008)
Oil Crunch Trumping Climate Concerns?
Andrew C. Revkinn, Dot Earth, New York Times
In 2006, I interviewed dozens of experts on energy, climate, and the economy for a story in our ongoing Energy Challenge series, and more than a few warned then that, in the world of politics and policy, the need to deal with a growing global oil crunch could well trump the need to curb greenhouse gases and limit long-term climate risks.
President Bush’s statement today on oil could be interpreted by some as proof positive, at least for the final months of this administration, that oil still trumps broader energy and climate issues. In his Rose Garden speech, Mr. Bush briefly noted a planned boost in fuel-mileage standards for vehicles and technologies that might move the country away from petroleum in coming decades. But the four prongs of the speech were not about using less fuel, but boosting supplies: drilling offshore, extracting oil from shale, drilling on the coast of the Arctic National Wildlife Refuge, and adding refineries.
(18 June 2008)
