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Peak Oil (was "petroleum geologist explains US war policy")

I would like to see my govt. spending less money, time and resources digging for gold, and more time, money and resources coming up with alternatives...like less expensive electric cars, solar cars possibly.
However, money rules politics, and industry owns a few...they would not want to front the money to convert to alternatives.
 
Err.

I would just like to say, that people who critisize renewables as being uneconomic are doing so at present day prices, and ignoring the possibility of fossil fuels becoming relatively more expensive.

newharper
 
Some good analysis in this lil ole thread!

Here is some extra headline news for you all to ponder on.

China grew by over 8% this year and their productivity is skyrocketing, etc.

U.N.: World can't afford rich China

SYDNEY, Australia (Reuters) -- China's ambitious economic growth plans are environmentally unachievable because the world does not have enough resources to allow its 1.3 billion people to become Western-style consumers, a U.N. official has said.

http://edition.cnn.com/2003/TECH/science/07/16/china.un.reut/index.html
 
Newharper - Trouble is that `alternative` energy sources USE oil. Firstly in raw materials (metals, plastics etc), secondly in manafacture, third in transportation and fourth in running costs (lubrication, repair etc).

So its not about judging it at present day prices, its about whether the inflated costs will be affordable to ordinary people when depletion `commences`/is recognised etc etc.

It does appear that, because the `alternative` infrastructure simply does not exist (see the markets/politicans lack of planning etc), `alternatives` will continue to rise in price ahead of gasoline/natural gas. Making it even more expensive. To reduce the price of alternatives would need giant investment straight away, which doesnt appear likely.

Hence countries (well one really, France) with nuclear energy may find themsleves in fortunate positions.
 
Just for infos sake, and coz this thread is so good, here's a link to the other one `what if its all about oil`...
http://www.urban75.net/vbulletin/showthread.php?s=&threadid=47493&perpage=20&pagenumber=2

----------------------
And today, it is interesting to note this:

the US have stockpiled a lot of natural gas for the winter which has reduced the futures price (anticipating lower demand one would guess) but the oil futures price continues to edge upwards, its rather mixed, but if the markets were working theoretically as they `should` (ie in strict Thatcherite terms) the price of oil futures should also have fallen (energy demand is demand)...>>

US oil market
The August contract for benchmark US light, sweet crudes gained 35¢ to $31.62/bbl Tuesday on NYMEX, while the September position advanced by 6¢ to $31.11/bbl. Heating oil for August delivery jumped by 0.71¢ to 81.33¢/gal. Unleaded gasoline for the same month fell by 0.92¢ to 93.23¢/gal.

In its annual report, the National Petrochemical & Refiners Association said Wednesday there were 149 operable refineries in the US at the start of this year, down from 153 a year earlier. It said US refining capacity slipped by 28,000 b/d to 16.8 million b/d at the start of this year but remained above capacity levels reported for 1999-2001.

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=182136
 
The biggest worry for the near future right now is natural gas. A lot of users have been switching to oil ever since NG prices skyrocketed/doubled earlier this summer. I think every summer from now on when suppliers try to fill their inventories you're going to see this shock getting worse and worse, and it will also be evident if we have cold winters. Real estate has been booming and a lot of them are powered by NG. When prices don't subside enough most will probably switch to oil only putting more demand on oil.

The American Petroleum Institute, the most influential US energy trade group, is expected to launch today its fiercest criticism yet of US policy, calling on the administration to combat the country's growing natural gas shortage.
http://news.ft.com/servlet/ContentS...StoryFT/FullStory&c=StoryFT&cid=1057562445087
http://www.kplctv.com/Global/story.asp?S=1337317&nav=0nqxGaje
 
Flip - not the day to day price the futures price, the anticipated delivery price for later in the year (sept), those who trade in oil (and yes they could be wrong) forsee no dip in price in fact the opposite...
 
Here we go:

-----------------------------

"So in all, compared to 2000, we are starting at a similar price level, with lower inventories in total, significantly higher demand, and less slack in OPEC," he said. "In that light, the bull case for $37(/bbl) does not look impossible, even if we cannot at this moment make it a base case."

Such a jump in oil prices "becomes more likely the colder is the US winter, the more refinery accidents and hurricanes happen, the more the geopolitics of the market remain turbulent, the more oil demand continues to be bolstered by substitution from natural gas, and the more pronounced is the US economic upturn," Horsnell said.

http://ogj.pennnet.com/articles/web_article_display.cfm?ARTICLE_CATEGORY=GenIn&ARTICLE_ID=182207

---------------------------
 
UK Nuclear Industry angle:

This is from here.

Note: 'British Energy Plc' is what used to be 'BNFL' (British Nuclear Fuels) prior to privatisation.


A mortgaged future? - the consequences of UK energy policy (Warning - 1Mb PDF)

Key points from a seminar held in London on wednesday 14th february 2001 - distributed by British Energy plc

Introduction: Peter Hollins, Chief Executive, British Energy plc:
What follows challenges the proposition that cheap is good and cheapest is best - at least so far as energy policy is concerned. There are serious tensions in government policy between the desire to drive down energy prices, and the effects this has on the environment.

Dynamics of the UK Energy Market: Neil Hirst, Deputy Director General, Energy, Department of Trade & Industry
The [scenarios] most clearly founded on proven current technology rests to a very substantial degree on nuclear energy... Nuclear is a perfectly legitimate technology...


Energy Policy and Environmental Impacts: Dr Dieter Helm, Director, OXERA:
More worrying is the idea that consumers don’t have to do anything about climate change - only big bad business has to address the issue. A great deal of public education is required to persuade people that they too must make their contribution to combating global warming...
...The electricity industry has had a remarkably low rate of technical change at a time of otherwise remarkable technological progress.


Lessons From Abroad?: Malcolm Keay, Deputy Head, Energy & Environment Programme, Royal Institute of International Affairs:
There is a quite staggering gap between rhetoric and reality on fossil fuels both in Britain and abroad. The decline in nuclear generation will mean that British use of fossil fuels will increase over the next 20 years or so and this is true of the OECD as a whole, short of a quite staggering change in policy.

Renewables like firewood are being increasingly replaced in the developing world by commercial fuels such as oil.
It is interesting to note that China - everyone’s whipping boy when it comes to climate change - has achieved an absolute reduction in energy consumption over the last 5 years or so.
Coal consumption has fallen even faster, gas and hydro output has increased and the country is gradually moving to a less carbon intensive economy. China is the one nation moving in the direction which others say they want but are doing little to achieve.

(ain't that right, flippant?)

...There is a need for a thorough review of energy policy not only in Britain but world-wide.


Exploring Public Attitudes to Energy and the Environment: Tom Bentley, Director, Demos:
polls suggest that between 30% and 60% of British people are willing to change their behaviour to accommodate environmental priorities...
There has been a shift towards “post materialist” values.


A Political Perspective: Martin O’Neill MP:
So we keep coming back to the nuclear option. It may be the last resort, it may be the one that people don’t want to talk about, yet I suspect that 4-5 years from now the prospects of new nuclear build will be better than they have been for many years. It will, however, be necessary to sort out the waste management problem.


Interesting to note that there is quite a consistent effort made to deny that there is any sort of problem concerning resource depletion. (eg)
 
come on you oilists...

This piece relies on very shaky BP data...

http://news.bbc.co.uk/2/hi/business/3075521.stm

"The country should be widely opened to the private sector to accelerate the range of investments so that Iraq can benefit from its huge potential wealth buried under ground," he said.

Iraqi oil consultant Dr Ali Hussein agreed that "Iraq will have to ask international oil companies to invest".

Dr Chalabi was made under-secretary of oil at Iraq's Ministry of Oil in 1973, before later becoming acting general secretary of the oil cartel Opec in the 1980s.

------------------------------

A rather confused piece here

http://news.bbc.co.uk/2/hi/business/3088919.stm

The announcement that Uday and Qusay Hussein - two of the old regime's most feared leaders - were dead raised hopes that efforts to get Iraqi oil flowing again might make faster progress.

The price of crude oil in New York slid $1.59 to $30.19 a barrel on Tuesday night, having hit five-week highs earlier in the week, while London prices dropped $1.20 to $27.49.
(snip)
But not everyone was convinced that the demise of Uday and Qusay was what was moving the market.

Soaring energy costs - the price of oil is up more than a quarter over the past two months - have accompanied massive buying of oil futures by investment funds, meaning some profit-taking was only to be expected.

And prices in Asia crept back up early on Wednesday, ahead of the release of oil inventory data for the US due later in the day.

"I'm quite surprised at the logic," connecting the Iraq news to oil prices, one Singapore dealer told the AFP news agency.

"I think it's a bit stretched."
 
Hey oilists!! Where u all gone dudes? Oilists is da new rock n roll innit!!

http://news.bbc.co.uk/1/hi/business/3106419.stm

BBC - Strong oil prices in the wake of the Iraq war have helped push profits 42% higher at BP.
The British oil giant posted profits of $3.12bn (£1.95bn) in April, May and June, up from $2.19bn a year ago.

The figure represented a drop from BP's record profits of $3.73bn in the first three months of the year, but was at the top end of analyst forecasts.

Fears that the end of the Iraq war would see crude prices collapse as Iraqi exports flooded back onto the market failed to materialise.
 
Iraqi exports are not flooding the market, yet.
Hopefully when they do it will break the back of OPEC
 
No one is going to break the back of OPEC thats just silly.

By 2010 five countries will have 40% of the worlds oil reserves, Iraq, Iran, Abu Dhabi, Kuwait and Qatar...all in OPEC (maybe not iraq by then).

Iraq oil is not going to `flood` the market its also daft. Oil companies dont want low oil prices, you may also note the widespread falsity of Iraqi reserves.

Sorry this isnt a place for mass media stupidity to be repeated, this is a decent thread.
 
this isnt a place for mass media stupidity to be repeated

..but no reason why it shouldn't be discussed, as it's come up. :)

What is the basis of the system of indoctrination one must endure to be able to read all of the information and analysis on this thread, then advocate mearly (;)) increasing consumption as a solution?

:confused:

More to the point - which aspects of the energy issue are the easiest to digest, and should therefore be discussed or pursued politically?
 
Adam and Bandit,

So glad to see you two carrying the torch of oil conspiracy theories. However you need to work on looking surprised… “uncertainty increases, prices go up!”. Well, yeah, obviously.

Markets will do what markets do: speculate. If there was no war, we’d be sitting here discussing when the sanctions will ultimately break, and how that would effect world oil prices. It’s all really quite predictable, which of course is why markets are great. There’s no need to look for shady motives in the shadows, everyone knows what the game is for: profit.

However American foreign policy is a bit more complex. I seriously doubt they want to ‘break’ OPEC, for they rely on it too much, and in turn, OPEC relies on America. It’s a symbiotic relationship, sure bitter at times, but ultimately they need each other. America wants stable gas production at sub 30 bucks a barrel. However, America also wants Saudi Arabia, and the other states to survive. An increasingly likely economic break down looks possible as demographic trends and government debt destroys the cradle to grave welfare systems built up with petro dollars. Thus these states need at minimum more than 20 bucks a barrel, probably higher, much higher.
 
Backatcha - yea ok youre right. In that case what i meant to say to mears is `bollocks mate`.

Nano - come on argue nicely. No need for `conspiracy theories` jibe is there, no one is arguing for a `conspiracy`. Thats just neo-con code for thigh slapping guffaws etc...we're talking about oil production and its effect on policy. We all agree oil is a very major part of many countries foriegn policy and probably the single most important trade on the planet right? Keep it clean dude, ive seen your pecs!! ;)

Especially when you basically argue a similar point in your par `However American foreign policy is a bit...higher, much higher.`

My basic unerlying principle behind my interest in oil is this...
Oil production is not just about `markets` and predicting future prices it is about ordinary people's lives, our lives, your life Nanz. Thats the point i make about oil. We see people saying things like `much higher` prices. Now, those prices effect ordinary people, our parents, aunties, pals etc...right? Its not an abstract, its a basic reality.

Now, prices of around $30pb are always going to `knock on` to the public (parents/aunties etc). Usually it takes some time for that effect to be felt, as with all economic indicators.

So...we all understand the `symbiotic relationship` between consumers (USA etc) and producers (OPEC, Russia etc). What I am trying to say, through evidence of instability, shortages, gas volatility and so on, is that this relationship, eventually, is going to be very damaging for ordinary joes. Especially in low tax arenas like the US consumer market, the Italian and Spanish consumer markets in the EU, airlines and so on.

The UK is going to start importing oil in around 2006-2008 because of the rapid decline (7% pa) of the Nth Sea. That means higher costs, (to buy it) lower tax takes (from decreased production). Or take Gabon, pitifully poor, 80% of whose exports are oil, who will be totally dry in about 5 yrs...thats a more dangerous scenario.

`Markets` will only value products, (Sometimes as seen in the recent crash of 2001-03 very very badly) not protect ordinary people (see private equity based pensions for example).

I take everything you say on board about `markets`its just that you cant eat them or fill your car up with them...
 
AP,

I’ve noticed there’s a little star on this thread, so apparently some moderator is convinced this is worth saving… I’m not so sure.

You are arguing the obvious that high oil prices adversely affect the lives of consumers, and low prices the lives of producers. And thus your proposal to give my auntie a hand, and employ all those jobless young saudies is to…..

Look, of course the fluctuation of prices adversely affects one side, that’s the way markets work, and that’s how change is initiated. As long as oil prices are low, what incentive do American consumers have to purchase small fuel efficient vehicles? As long as oil prices are high what incentive do Saudis have to diversify their economy and stop importing labour to do everything for them?

You, Bandit, and Bernie (or A,B,&B) have been arguing with me for 2 years now that the end of the world is near because we will run out of oil. Perhaps. But if you truly believe this, than perhaps rather than arguing on urban, you should be building a fall-out shelter in the country somewhere and await the apocalypse.

I don’t dispute that change will be difficult from an economy based on fossil fuels to alternatives. Aunties will certainly find it more difficult to warm their old brick houses in the winter. But this will happen regardless if we have a economy based on markets or whatever system your advocating this week.

Thus, rather than perpetuate this, perhaps for once you could explain to me how you would ‘solve’ this problem in such a way as to ‘protect ordinary people’.
 
Nano, you are the one who seems to want to make this an issue about the panacea capabilities of 'markets.' Global markets will clearly do something in response to significant changes in the availability of oil resources. I think you'd have to be working from some kind of quasi-religious certainty to be sure that the response of the markets will necessarily be both entirely beneficial and sufficient to this problem, as you seem to do.

The question from my point of view is not whether the sacred power of markets will make everything turn out for the best automatically. I think that unlikely for a variety of reasons, in much the same way as I think Resurrection and Virgin Birth unlikely. Free market theology aside though, I think that markets will clearly play a significant role in responding to oil and gas depletion, but I think it's unlikely to be a uniformly positive one.

I also recognise that arguing with you about markets is completely pointless nano and don't particularly want to do it, tempting as it might be to talk about Keynes' 'thundering herd' and his suggestion that markets 'ape unreason proleptically'.

Political-military rather than economic responses may also occur. I started this thread, hoping to disuss what you might want to call the geopolitical implications of oil depletion. Dr Campbell implies that political-military competition for these rapidly depleting but utterly essential resources is very likely, may already be occurring and that it will tend to cause war and suffering (accurate so far)

As to the 'end of the world' I don't recall ever mentioning it. What I might have done, is discuss things like the petroleum energy requirements of industrial agriculture, and suggest that where industrial agriculture is practiced, the demand for petroleum energy is both high and inelastic, with worrying implications for food security as global reserves become sigificantly depleted.

Right now we are in a steady state where we and billions like us mostly live on food grown using high oil-input agriculture. That looks to me very like a system that might fail catastrophically given the appropriate conditions. Those conditions might not be met, but I think the science says that such conditions could exist.

Let's take an extremely hypothetical case, imagine that some mad scientist had created a fleet of invisible submarines, which sank every single oil tanker that sailed from producing countries, and an army of invisible commandos, who blew up every single pipeline. Then they just keep on doing it, and nobody can stop them (because they're invisible, yes, I said it was hypothetical)

In such conditions, it seems likely, given that it takes ten units of oil energy to put one unit of food energy on our tables, that we'd see catastrophic global food security problems after a certain period. So as a limiting case, I think industrial agriculture could fail catastrophically, if oil supplies were cut off totally and suddenly.

In the real world, energy supplies will probably not be cut off so suddenly and totally, but then the question arises, just how drastic would the onset of oil scarcity have to be, before a catastrophic failure of industrial agriculture is likely to occur?

That wars are apparently already being fought over these resources, suggests to me that extreme conditions might occur.

I think that when you suggest that this is a matter that can be handled by the working of markets, you're in effect assuming a steady-state case, and you may be right. That doesn't mean that catastrophic cases can't arise. Nor does it mean that the 'civilised' rules of the markets game can't get suspended in favour of the use of force to simply appropriate these indispensable resources.
 
The emphasis isnt on doubters to come up with something. Instead (just as in religion) it is incumbent upon those who demand that markets are allowed to do everything, that they prove why this is the best way. To prove their assertions. Instead of just saying `i believe it will`. Which is just another fundemenalist mantra.

No one is talking about the end of the world nor have we been arguing over this for two years.

There are no signs of bridge fuels that can move the world from oil to (say) wind/solar/biomass without titanic and painful changes. Thats from the oil industry.

The `market` (TM) will not cater to the change due to market pressures. Just as it has not done in say AIDS, the market only cares about profit not social responsibility (see AIDS again). So there will be no incentive to help out the Chinese or Indian economies at all. In fact in purely market terms there may well be incentives to allow massive disruption, starvation and death just as there has been in the former Soviet Union or Africa. To keep them in their place. Indeed that incentive may also be applied nationally, internally within western countries.

If you are pushing for an alternative, i see no reason to give one, but it would be this. Rationing. As suggested by many capitalist economists and oil industry people. Without rationing the oil will end up in the hands of the people who can afford it, meaning that at least half the worlds population will be denied it. Of course that means taking oil away from the people who control it at the moment and giving it up to actual civillian-led democracy and regulation. Something I find extremely unliklely.

If you want prediction, and really even i dont care about my own predictions, its so dull. (I just cant help being right the whole time ;) ) It will be a long slow decline which will be a marginal topic in the west. It will only add to the general contraction of all markets as increased costs are of course socialised and met by ordinary people. So their standard of living will gradually fall, slowly the idea of middle class existence will be undone (as in reality it already has) and one will move towards societies that are closer south America/middle east and russia. Hugely rich elites, tiny middle classes clinging on (and very bitter to those who threaten their fragile existrence) and huge swathes of hand to mouth populations. I think this can be carried off by the market as the decline will be a long slow one, along the way no doubt that contraction will be put down to many other factors. Foreigners, preceived threats and mainly blaming ordinary people for their own problems (losers are losers etc) and so on when in reality the current economic system will continue to consolidate.

The idea that there will be social change because of it is spurious and not proven at all, see Africa for example.

The combination of longer life expectancy and lower mortality in the west coupled with the Liberianisation of the third world will in the end mean a rapid decline in the human population in the second half of this century.

One good thing, all those dead humans and no oil will mean grenhouse gasses go down...arf arf...always look on the bright side...
 
Ahh, Nano... Has it really been that long?

2 years spent trying to convince you that there is indeed a problem.

2 years, and your only concession so far towards admitting that there is a catastrophe looming with regard to consequences of resource depletion is 'Perhaps'.

Well, it's a start. :)


Interesting that now, having apparently finally taken on board the simple fact that 'the market' may not be able to provide an appropriate solution (as promised), you immediately demand that we supply a 'solution' to the problem.

As AP points out above, the onus to provide workable solutions to the crisis does not lie with those that merely wish to highlight the fact that the problem exists, although I understand why you may feel that it does.

So anyway, I'll have a go...


The first step towards solving any problem is to first recognise that there is one, and to then try to gain an understanding of it's nature and causes.

So the first step towards a solution must be in raising awareness of the finite nature of the resource, the extent of our dependence upon it and the effects of it's supply being interupted (takes hat off to Bernie's above post).

The cause of this particular problem obviously lie with the patterns of consumption, so we need to look at ways that we can modify these patterns.

Economists like to point out that people act 'rationally' when making choices with regard to their consumptive habits (although they would like us to believe that 'economics' is the sole criteria for this rationality).

The key to being able to make a 'rational decision' is in the information available to an individual, on which this 'rational decision' is to be made.

When an individual is fed incorrect or misleading information, the rationality of such decisions made on such a basis is going to be questionable to say the least.

So to have any hope of the problem being addressed, we need to stop repeating the incorrect information (such as ficticious reserve figures and forecasts made on the backs of these) and revise the information to be assured of it's accuracy.

Basically, we need to show the lies up for what they are.


Once people are adequatley informed of the facts surrounding the issue, solutions will manifest themselves as part of the process of 'rational' decision making.

perhaps rather than arguing on urban, you should be building a fall-out shelter in the country somewhere and await the apocalypse.

It is my belief that arguing with you here on urban75 is part of the solution - as are my other activities, which as you well know, do not include building a fallout shelter - (a course of action more reminicent of what the powerful elites are up to) - but are rather more proactive and practical.

Footnote:
For a glimpse of how misinformation (in this case between UKGOV departments) affects the devolopment of viable, sustainable alternatives, take a look through this.
 
Originally posted by adzp
It will be a long slow decline which will be a marginal topic in the west. It will only add to the general contraction of all markets as increased costs are of course socialised and met by ordinary people. So their standard of living will gradually fall, slowly the idea of middle class existence will be undone (as in reality it already has) and one will move towards societies that are closer south America/middle east and russia. Hugely rich elites, tiny middle classes clinging on (and very bitter to those who threaten their fragile existrence) and huge swathes of hand to mouth populations. I think this can be carried off by the market as the decline will be a long slow one, along the way no doubt that contraction will be put down to many other factors. Foreigners, preceived threats and mainly blaming ordinary people for their own problems (losers are losers etc) and so on when in reality the current economic system will continue to consolidate.
This is consistent with my own vision of what will happen (is happening -- e.g., the "circling of the wagons" metaphor I use in an earlier post). I've been calling what's happening in the U.S. the "Latin Americanization of America". I mean the evolution of similar socioeconomic structures abetted and enforced by the same repressive and controlling tools and techniques we helped put in place in L.A. twenty years ago. I think its no small coincidence that people like Abrams, Reich, and Negroponte -- architects of our L.A. policies back then -- have been brought back into positions of power in the current regime.

I'd like to point out, also, that the mythical "middle class", implying a relatively egalitarian distribution of societal resources, was a temporary historical abberation, existing in numbers roughly from the end of WWII and reaching its peak around 1973, facing a steady decline since. Such a large and prosperous middle class has never existed at any other time in history. But things change: We have returned to pre-1929 distributions of wealth here in America, and I venture to say that's probably the case in the U.K., too. We're returning to the more common capitalist-feudal two-tiered structure of wealthy elites (with a thin sliver of magistrates and managers), served by the bulk of additional and disposable human biomass.

The idea that there will be social change because of it is spurious and not proven at all, see Africa for example.
And thus my despair and cynicism. I have children. Knowing that life for them will be markedly more difficult than it has been for me, and that it grows bleaker still for their children, does not make for a happy meditation.

The actions of George Walker Bush countered by the Rovian media machine have affirmed for me how effective elite control can be; Bush still holds around a 60% popularity figure. The recent "16 words" media buzz has long been replaced by the convenient murders of Saddam's sons and the latest Al Qaeda "threat". If Bush's popularity continues to drop, I expect one hell of an October Surprise. (Hold onto your hats, everyone!) But he only needs to maintain an illusion of slight popularity, as we continue to install unauditable electronic voting machines around our country. Bush in 2004; the Republican's hold the Senate and House; the 5-4 SCOTUS majority moves to 6-3 or 7-2, with repressive consequences for non-elites -- just not a pretty picture. And all to preserve the rapacious consumption of the few while allowing the standard of living of the many to decline, any serious dissent to be squelched under the grinding jack-boot of a stealth-passed Patriot Act II. Choco rations, anyone?

And as for the speed in which this happens, adzp -- if we're truly to slide down the backward tail of Hubbert's Peak over the next few decades, what else awaits us but strife, war, totalitarianism, and die-off?

I think current events defeat nano's faith in market mechanisms. Kind of like the Martyrs praying desperately while waiting to be devoured by hungry Roman lions.

(BTW, Bernie, adzp (Adam?), and BB, really excellent posts, I thank you for them.)
 
Bernie, Adam, and Bandit,

You three certainly seem to enjoy tormenting me, thus I feel compelled to provide you with more fodder, if only to give you a reason to come out of your fall-out shelters for pints.

Bernie,

I disagree with your analysis of a military struggle over oil, at least in terms major power blocks. The first gulf war need I remind you had the full backing of the UN, and there is a reason for that. Oil security is in everyone’s interest. Oil is a commodity. The price Americans pay for a barrel is the same the Chinese pay. There is no yankee ‘discount’ for having Abrams tanks in Baghdad.

Oil security is a collective need, not just an American one. China does not win if America’s economy goes into the shitter, and vice-versa. America, as is every other country, is part of an increasingly global economy where contagion is becoming more of a reality. Thus, despite efforts of various countries to have control over the selling of the oil, it is in everyone’s interest to ensure everyone can buy it.

This is why military intervention between the powers is unlikely, but rather, like the first gulf war, the powers will more likely unite. They have no other choice.

Now, Bernie, Adam, and Bandit, you state that the onus is on me to prove that markets can ‘solve’ the coming energy crisis, and thus save the world from massive starvation and poverty. Well, you three are correct, markets acting alone cannot ‘solve’ this problem, but they will be necessary.

Problems occur when you attempt to circumvent markets with rigidity, which is precisely what quotas and rationing do. There are far more efficient means of promoting alternatives: a carbon tax for instance in which the proceeds can go towards research and development of new energy production means.

What is needed is government polices which promote conservation and flexibility. This is not easy, as citizens are often of the opinion that they have a god given right to consume as much as they see fit. What is needed is a change in culture. You need to instill upon individuals the cost associated with the long term environmental and economic consequences of energy consumption. And nothing works better than a hit to the pocket book. This is why markets are needed.

[ edited to add: I see Dave has entered the fray... 4 against 1 eh? S'ok.. I can take you lot on. ;) ]
 
What is needed is government polices which promote conservation and flexibility. This is not easy, as citizens are often of the opinion that they have a god given right to consume as much as they see fit. What is needed is a change in culture. You need to instill upon individuals the cost associated with the long term environmental and economic consequences of energy consumption.

I agree with this, Nano.

This 'cost' - we're talking about... it's the costs other than the purely economic, right?

As 'the market' is concerned with the economics alone, I fail to see how it will help to change the present culture (burn whatever you can afford) to one where the true costs (environmental, social, geopolitical) are properly accounted for.

Again, 'the market' is not the appropriate tool for this - it fails to provide appropriate indicators of the true 'value' (or 'cost') of the energy resource until it is too late to build sufficient infrastructure and capacity in alternative energy production.

Besides which, as Bernie points out, 'the market' is corrupted by the fact that resources are secured through force of arms.
 
Here's an excellent ZNet article moving along a similar line to the discussion on this thread.

Somebody please tell the president of the United States that whatever political and economic system we create, human beings cannot change the 1st law of thermodynamics. We can't create energy from thin air. Big business may be able to swindle the American electorate, but it can't repeal the law of diminishing returns._

Capitalism has developed, and our population has grown from one to six billion by drawing down a massive natural gift of energy in the form of cheap crude oil._

It's half gone. Since the mid 1990s Petroleum geologists have known that global oil production would peak in the first decade of the 21st century and decline forever thereafter. There is no adequate substitute for oil energy. The peaking of production means the further growth of energy demand, and thus of the global capitalist economy, is physically impossible. No energy - no economy._

Mathew Simmons, CEO of Simmons and Co, a global energy investment bank knows it. Simmons was a member of Dick Cheney's Energy Task Force. "Without volume energy we have no sustainable water, we have no sustainable food, we now have no sustainable healthcare. What peaking does mean, in energy terms, is that once you've peaked, further growth in supply, is over… and the issue then, is the world's biggest serious question," he declared in April.

Scarey stuff indeed.
 
The subject is now in New Scientist 2nd August issue (the one before the one thats out now)...bastards beat me to it !!! Damn lead times!! Heheh...

Here's some latest stuff: although its not some kind of cataclysmic rise in prices its interesting to note that the general trend at the moment (especially with global warming kicking in increasing fuel demand) is for increased gas and oil prices. Especially when one remembers the promises of the `Iraq bonus` that was supposed to be in play this summer with oil at "$20 a barrell...better than any tax cut" R. Murdoch.....adz

From O&GJ
---------------------------------

The price surge for natural gas futures also pulled along the competitive September heating oil contract, which shot up 2.05¢ to 85.45¢/gal. Unleaded gasoline for the same month gained 1.63¢ to 96.35¢/gal.

The September contract for benchmark US light, sweet crudes increased by 69¢ to $32.39/bbl on NYMEX, while the October position jumped ahead by 77¢ to $32.23/bbl. The bomb attack Thursday on the Jordan embassy in Baghdad that killed 11 people and wounded 50 also contributed to the rise in oil prices, signaling possibly more delays in full resumption of oil exports from Iraq, analysts said.

In London, the September contract for North Sea Brent oil jumped by 77¢ to $30.25/bbl on the International Petroleum Exchange. The September natural gas contract surged by 4.6¢ to the equivalent of $2.56/Mcf on IPE.

Industry sources Friday also reported oil price gains in Asian futures markets "during 3 of the 5 trading days" this week, primarily because of rebounding demand for petroleum products in that area and increased uncertainty over oil supplies as a result of recent terrorist attacks.
 
This from the Guardian last week:

Bush's oil move backfires - Now he will have to try diplomacy
In a dream ending for the chapter of history being written now in Iraq, neo-conservatives fantasised before the war about a privatised, pro-American Iraqi oil industry. This would have access to the world's second largest hydrocarbon reserves and produce so much oil that Saudi Arabia, in charge of Opec, would lose its grip on petrol prices.

The world would then be swimming in inexpensive petrol - the cost of which would be dictated by the market, not by an anti-American price-fixing club run by Riyadh. Low prices would also mean falling revenues for oil-producers, which in the Middle East might precipitate the collapse of regimes hostile to the US. These hopes are now being dissipated like sand before the desert wind.

Oil is dribbling, rather than pumping, from Iraq's bomb-blasted oil industry. Sabotage and theft mean Iraq's oil production remains at a fraction of the levels achieved under Saddam. With reconstruction failing to take off, there is little sign of a post-Ba'athist dividend in the form of low oil prices. The result is that US action in Iraq has not weakened Opec, and hence Saudi Arabia, but strengthened it.
 
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