Letters to the Editor
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The Insidious Transfer of Wealth to Our Enemies
"The principal recipients of petro-dollars -- the major oil-producing states of the Persian Gulf, the former Soviet Union and Latin America -- will undoubtedly use their accumulating wealth to purchase big chunks of prime American assets or, as in the case of Hugo Chavez of Venezuela or the Saudi princes, pursue political aims inconsistent with American foreign policy objectives. America's vaunted status as the world's "sole superpower" will prove increasingly ephemeral as new "petro-superpowers" -- a term coined by Sen. Richard Lugar of Indiana -- come to dominate the geopolitical landscape.
The above is the only noteworthy paragraph in the article. Though filled with data (numbers) the rest of the article is the same erroneous--time adjusted--information we got from "oil industry experts" back in the 1970s. They were not only wrong, but turned out to be the antithesis of what the oil market actually did in the 1980s and 1990s.
The real crisis lies within the quoted paragraph. Namely, the insidious transfer of wealth from the consuming to the producing nations currently taking place. The USA is the largest consumer nation and the House of Saud and the House of Putin are the number one and two producer nations respectively.
Public pronouncements aside, neither of these countries is an obvious ally of the West. Some may argue that they are philosophically and/or militarily the enemies of the USA and our true allies.
Saudi funds the jihadists, period. Saudi itself is governed by the Islamist Law so revered by the Islamic Terror Movement. Only the pretended and convenient "alliance" between the House of Saud and the USA make Saudi Arabia a target themselves of radical Muslimism.
KGB-Russia adds the sweet touch of its USSR legacy of nuclear weapons to the mix.
The transfer of Western wealth to these and other oil producers, and the investments those nations, under the cover of Sovereign Investment Funds (SIF), should be of great concern to all citizens of the Western democracies, particularly the USA.
The investment in real estate, in shopping centers in non-essential industries in the West is a welcome development. But now these SIF are buying huge chunks of the Western financial system--Citigroup, Morgan, Stanley, Merrill Lynch, UBS--as that system teeters on the edge of collapse. It's the functional equivalent of the KGB owning Boeing or General Dynamics---it's a national security issue.
The Bush Administration sleepwalks through the crisis; and probably their "solution" would be some idiotic, doomed from the start, military solution.
This writer at least has the smarts to understand the gravity of the situation(s) confronting the USA and it allies. The solutions are way beyond his pay-grade.
[My Blog: proteanPerspectives]
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Specter, schmecter
If we put our asses into gear, we can find, develop and put into use different ways of motating ourselves to and from work, the store, etc. And we will, because the price is rising. The only real shame is that we didn't have a government with enough balls to put a significant tax on oil ten or twenty years ago and use the income to fund this development.
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Tar Sands
Even though the article didn't mention Canada once, you do realize that the US imports more oil from Canada than anywhere else, by a rather large margin. And no mention of the tar sands either, where the proven reserves are equal to the rest of the world's combined (yes you read that right). (Incidentally, Venezuela has equally big deposits.) True, none of it is extractable at much below $30/barrel, and but an awful lot of it is at $100, and if/as the price goes up, more and more of it will come on line. The world ain't running out of oil any time soon, just cheap oil.
And good old Canada is actually pretty politically stable, first-world, western oriented, and has an economy that is not petro-dollar dependent. I guess it doesn't fit in with the story line very well.
Tar sands oil has a reputation as expensive oil, but average production costs these days are running at about $28/barrel, which puts some of the exotic fields the article discusses to shame. Royal Dutch Shell, in 2006, got an annual profit from its tar sands operations of a little under $22/barrel; it averaged a little under $12.50/barrel from its conventional operations.
I just don't see how you can have a discussion of "peak oil" and US energy imports without any mention of this at all.
And of course, neither any mention of the hideous environmental impact, particularly in terms of global warming gases, working the tar sands has.
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we're running out of cheap oil, not out of all oil
"A Billion Angry Bees" writes:
@ $110/bbl those poor sources are economically viable for the first time
So in other words all those expensive sites are now practical. Similarly, tar sands are now economically viable for the first time. In fact a whole host of oil sources once thought useless are now economically viable when crude is that expensive. Which means there are new untapped sources.
Absolutely correct, but beside the point. No one is arguing that the world is running out of oil. Indeed, at the point where oil production peaks, perhaps half of all extractable oil is still left in the ground. However, the world is running out of cheap oil.
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no cornucopians yet? C'mon guys, where are you?
No cornucopians have weighed in yet? What a surprise.
No suggestions for how we'll "find more????" Except for a billion angry bees, who apparently hasn't the faintest idea what he/she is talking about most of the time, so we need not be taking anything from that source very seriously.
So where are all the cornucopians? Feeling shy?
You should. You were wrong. You were always wrong. But I don't imagine we'll be getting any apologies. Cornucopians just skulk off and try to make it look like they weren't so unbelievably stupid.
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Neither cornucopian or Pollyanna...
I am not a cornucopian when it comes to the subject/concept of peak oil. I do agree that the era of cheap oil is coming to an end, but I am hopeful that this new era of high prices does two things: first and foremost is to get Americans to realize that we are all in this together and start to conserve & decrease usage/increase efficiency of fossil fuels as well as to support measures that will not just decrease our use of 'foreign oil' - but eventually from most oil/fossil fuels. Yes, Americans will piss and moan and shake their fists at the sky and OPEC and the oil companies, but eventually - sooner rather than later I think - we will collectively change. And although they provide an essential service in bringing resource depletion to our attention, there is an awful lot of self-righteousness, 'I am right and you are wrong.' and 'We are all f***ed!' on the part of people like Klare and others. This is unhelpful. There is also a very strong streak of survivalism and nihilism for some doomsayers and unrepentant pessimists like Savinar at LATOC (where he's also selling you survival equipment and food) and Kunstler's misanthropism at Clusterf***Nation.com. Humans are notoriously bad at predicting the future. I wonder why they're not advocating that we all eat a bullet now to save ourselves and our families the horrors to come?
Where's the truth? Probably like most things, somewhere in the middle. The transition will be painful, and involve major changes in our society - not all of them bad. Perhaps I am the one hopelessly deluded but I just can't see us devolving into some dark, Mad Max dystopia.
The second thing that I hope/trust that increasing fuel prices causes is a 'tipping point' in Americans understanding of the new energy reality; an increase and usage in mass transit & light rail, hybrid & electric vehicle technology, (maybe even biofuels); a shift to wind & solar thermal and PV, geothermal & ocean energy can all be accomplished to ease the transition. I am not a Pollyanna either with regard to these technologies. I understand that there will be problems - but none that can't be overcome with a combination of government policies and free market forces, and the resilience of the American people. It's the only way toward a decent future.
Meanwhile, I and my family will do what we can to do our part. Even though I just purchased a hybrid vehicle I will endeavor to live as close to my work as possible - leaving me the option of walking or taking the bus or riding my bicycle. We'll shop locally and support local farmers. We'll recycle and decrease any unnecessary use of water. We'll support a gas tax. We'll support local, state and national politicians who not only understand this new energy reality, but tell citizens what they need to hear and actually work to achieve it. We'll do these things and anything more that we can.
Otherwise, what's the point?