Peak Oil News: Peak Oil & 9/11 - Michael Ruppert Announces A New Book

Thursday, September 02, 2004

Peak Oil & 9/11 - Michael Ruppert Announces A New Book

EXCERPT FROM THE ADDRESS OF MICHAEL C. RUPPERT

FOR THE COMMONWEALTH CLUB – SAN FRANCISCO

TUESDAY AUGUST 31, 2004

OIL AND NATURAL GAS ARE INDISPENSABLE TO OUR WAY OF LIFE. THE WORLD CONSUMES TEN CALORIES OF HYDROCARBON ENERGY FOR EVERY CALORIE OF FOOD THAT IS EATEN. ALL COMMERCIAL FERTILIZERS ARE MADE FROM NATURAL GAS. ALL PESTICIDES ARE MADE FROM PETROLEUM. ALL IRRIGATION, PLOWING, HARVESTING 39 AND TRANSPORT IS ACCOMPLISHED BY EITHER OIL POWERED MACHINERY OR OIL OR NATURAL GAS GENERATED ELECTRICITY.  THERE ARE BETWEEN 600 AND 700 MILLION INTERNAL COMBUSTION POWERED VEHICLES ON THE PLANET AND THE DEMAND FOR THEM IS EXPLODING EXPONENTIALLY, ESPECIALLY IN CHINA WHERE GM’S SALES ROSE 300% IN ONE YEAR ALONE. ACCORDING TO THE NATIONAL GEOGRAPHIC THIS LAST JUNE THERE ARE SEVEN GALLONS OF OIL IN EVERY TIRE. WANT TO SUDDENLY BUILD 600 MILLION NEW VEHICLES THAT RUN ON SOMETHING ELSE, HYDROGEN PERHAPS? HOW MUCH OIL WILL BE REQUIRED TO DO THAT? TO MINE AND MELT THE ORE? TO TRANSPORT IT TO FACTORIES THAT DON’T EXIST, USING ELECTRICITY THAT ISN’T THERE? TO MAKE THE PAINTS, SOLVENTS AND ALL OF THE PLASTIC NEEDED? ALL PLASTIC IS MADE FROM OIL.  HYDROGEN IS A CRUEL JOKE THAT CREATES FALSE HOPE. A RECENT STUDY FROM EV MAGAZINE REPORTED THAT THE AVERAGE LIFE EXPECTANCY OF A VERY EXPENSIVE FUEL CELL ENGINE WAS JUST 200 HOURS. COMMERCIAL HYDROGEN IS NOW MADE FROM NATURAL GAS.  WE’RE NEARLY OUT OF THAT TOO.

CHINA’S ECONOMIC GROWTH HAS SEEN IT REPLACE JAPAN AS THE WORLD’S SECOND LARGEST IMPORTER OF OIL AND CHINA IS NOW COMING INTO DIRECT ECONOMIC AND POLITICAL COMPETITION WITH THE US FOR WHAT OIL REMAINS.

I HAVE ATTENDED TWO INTERNATIONAL CONFERENCES ON THE SUBJECT OF PEAK OIL AND ITS IMPLICATIONS FOR CIVILIZATION; ONE IN PARIS IN 2003 AND ONE IN BERLIN THIS YEAR. FOR ALMOST THE ENTIRE YEAR BETWEEN THE PARIS AND BERLIN CONFERENCES THE ICONS OF THE MAINSTREAM PRESS – THE ONES KNOWN AND EMPLOYED TO 40 MOLD PUBLIC AND BUSINESS PERCEPTION – HAVE BEEN ACKNOWLEDGING PEAK OIL’S REALITY, SOMETIMES RELUCTANTLY, SOMETIMES LESS THAN DIRECTLY, BUT ALSO SOMETIMES VERY BOLDLY. CNN, THE BBC, THE NEW YORK TIMES, THE ECONOMIST;

DOZENS OF MEDIA GIANTS HAD BEGUN TO RESPOND, LIKE A GIANT SHIP TURNING SLOWLY IN THE WATER. THE SHIP HAS CLEARLY CHANGED COURSE, BUT WAS IT ENOUGH? WAS IT IN TIME? I HAVE SAVED CLOSE TO 200 OF THESE STORIES.

LOOKING AT JUST A FEW OF THEM MAKES THE POINT WELL ENOUGH.

·        “THE END OF CHEAP OIL” – NATIONAL GEOGRAPHIC (COVER STORY) – JUNE 2004.

·        “WHAT TO USE WHEN THE OIL RUNS OUT” – BBC – APRIL 22, 2004

·        “ADIOS CHEAP OIL” – INTERPRESS NEWS AGENCY – APRIL 27, 2004

·        “G7: OIL PRICE THREATENS WORLD ECONOMY” – MOSCOW TIMES 4/26/04

·        “WORLD OIL CRISIS LOOMS” – JANE’S -- 4/21/04

·        “US PROCURING THE WORLD’S OIL” – FOREIGN POLICY IN FOCUS JANUARY 2004

·        “ARE WE RUNNING OUT OF OIL? SCIENTIST WARNS OF LOOMING CRISIS” – ABC NEWS.COM – 2/11/04

·        “BLOOD, MONEY, AND OIL” – US NEWS – 8/18/03

·        “SOARING GLOBAL DEMAND FOR OIL STRAINS PRODUCTION CAPACITY” – WALL STREET JOURNAL – 3/22/04

·        “CHECK THAT OIL” – WASHINGTON POST – 11/14/03

·        “CHINA’S DEMAND FOR FOREIGN OIL RISES AT BREAKNECK PACE” KNIGHT RIDDER –1/26/04

·        ’WORLD OIL AND GAS RUNNING OUT’ – CNN – 10/02/03

·        “DEBATE RAGES ON OIL OUTPUT BY SAUDIS IN FUTURE” – THE NEW YORK TIMES – 2/25/04

·        “FOSSIL-FUEL DEPENDENCY: DO OIL RESERVES FORETELL BLEAK FUTURE?” – SAN FRANCISCO CHRONICLE – 4/02/04

·        “THE END OF THE OIL AGE: WAYS TO BREAK THE TYRANNY OF OIL ARE COMING INTO VIEW. GOVERNMENTS NEED TO PROMOTE THEM” – THE ECONOMIST – 10/23/03

 

THE SUBJECT OF PEAK OIL IS ONE WHICH REQUIRES A LITTLE STUDY TO GET YOUR BRAIN AROUND. IT DOES NOT, HOWEVER, REQUIRE MUCH SCIENCE EXCEPT FOR BASIC ARITHMETIC.

DISCOVERIES OF LARGE OIL DEPOSITS HAVE BEEN IN STEEP DECLINE SINCE 1962. DEMAND, ON THE OTHER HAND, HAS BEEN SOARING.  TO QUOTE MY ENERGY EDITOR DALE ALLEN PFEIFFER, A GEOLOGIST:

IT APPEARS THAT THE YEAR 2007 WILL BE IMPORTANT. A NEW STUDY PUBLISHED IN PETROLEUM REVIEW SUGGESTS THAT PRODUCTION MIGHT NOT BE ABLE TO KEEP UP WITH DEMAND BY 2007. THE STUDY IS A SURVEY OF MEGA PROJECTS (THOSE WITH RESERVES OF OVER 500 MILLION BARRELS) AND THE POTENTIAL TO PRODUCE OVER 100,000 BARRELS PER DAY OF OIL). MEGA PROJECTS ARE IMPORTANT NOT ONLY BECAUSE THEY PROVIDE THE BULK OF WORLD OIL PRODUCTION, BUT ALSO BECAUSE THEY HAVE A BETTER NET ENERGY PROFILE THAN SMALLER PROJECTS, AND THEY PROVIDE A MORE SUBSTANTIAL PROFIT THAN SMALLER PROJECTS.

BEAR IN MIND THAT THE PLANET CONSUMES A BILLION BARRELS OF OIL (OR TWO MEGA FIELDS) EVERY ELEVEN AND ONE HALF DAYS.  THE DISCOVERY RATE FOR MEGA PROJECTS HAS DWINDLED TO ALMOST NOTHING. THIS CAN BE SEEN IN THE DATA FOR THE LAST FEW YEARS. IN 2000, THERE WERE 16 DISCOVERIES OF OVER 500 MB; IN 2001 THERE WERE ONLY 8 NEW DISCOVERIES, AND IN 2002 THERE WERE ONLY 3 SUCH DISCOVERIES. FROM FIRST DISCOVERY TO FIRST PRODUCTION GENERALLY TAKES ABOUT 6 YEARS. IF THE NEW PROJECT CAN MAKE USE OF EXISTING INFRASTRUCTURE, THEN THE START UP TIME MIGHT BE CUT TO 4 YEARS.  IN 2003 SEVEN NEW MEGA PROJECTS WERE BROUGHT ON STREAM.

2004 EXPECTS TO SEE ANOTHER 11 PROJECTS START PRODUCING.  2005 WILL BE THE PEAK YEAR FOR BRINGING NEW PROJECTS ON 42 STREAM, WITH 18 NEW PROJECTS EXPECTED TO BE BROUGHT ON STREAM IN THAT YEAR. IN 2006, THE PACE DROPS BACK TO 11 NEW PROJECTS. BUT IN 2007 THERE ARE ONLY 3 NEW PROJECTS SCHEDULED TO BEGIN PRODUCTION, FOLLOWED BY 3 MORE IN 2008.  THERE ARE NO NEW PROJECTS ON TRACK FOR 2009 OR 2010. AND ANY NEW MEGA PROJECT SANCTIONED NOW COULD NOT POSSIBLY COME ON STREAM ANY SOONER THAN 2008.

THE STUDY POINTS OUT THAT CURRENTLY ABOUT A THIRD OF THE WORLD’S OIL PRODUCTION COMES FROM DECLINING FIELDS, WITH A LIKELY OVERALL DECLINE RATE OF ABOUT 4%. AS A RESULT, GLOBAL PRODUCTION CAPACITY IS CONTRACTING BY OVER 1 MILLION BARRELS PER DAY EVERY YEAR. NEW PRODUCTION IS THE ONLY THING OFFSETTING THIS DECLINE.

OF COURSE RECENT EVENTS HAVE CLEARLY DEMONSTRATED THE FRAGILITY OF A GLOBAL PRODUCTION SYSTEM THAT IS OPERATING AT FULL TILT. SABOTAGE AN IRAQI PIPELINE ONE DAY THE PRICE GOES UP. ANNOUNCE THAT VLADIMIR PUTIN IS EASING UP ON RUSSIAN OIL GIANT YUKOS AND THE PRICE DROPS. ANNOUNCE THAT PUTIN IS MOVING TO SELL OF ITS ASSETS AND CONFISCATE ITS CASH, THE PRICE SOARS. WORRY THAT HUGO CHAVEZ OF VENEZUELA MIGHT BE OUSTED IN A VIOLENT COUP AND THE PRICE JUMPS. WATCH CHAVEZ –

WHO IS DESPISED BY THE BUSH ADMINISTRATION – WIN HIS SEVENTH ELECTION IN AS MANY YEARS AND THE PRICE DROPS.  BY THE WAY, THAT IS SEVEN MORE ELECTIONS THAN GEORGE BUSH HAS WON.

IN SPITE OF REPEATED ASSURANCES FROM THE SAUDI GOVERNMENT THAT THEY CAN AND ARE INCREASING PRODUCTION THE EVIDENCE IS GROWING THAT THEY CANNOT. FTW WAS THE FIRST TO REPORT, A 43 YEAR BEFORE THE NEW YORK TIMES DID, THAT SAUDI ARABIA MAY HAVE ACTUALLY PEAKED. NEW STUDIES ARE REPORTING THAT SAUDI WELLS IN THE MOTHER OF ALL OIL FIELDS GHAWAR ARE SHOWING 55% WATER CUT. THAT MEANS THAT 55% OF WHAT IS PUMPED OUT EVERY DAY IS THE SAME SEAWATER THAT WAS PUMPED IN TO PUSH THE OIL UP. EXPERIENCE HAS SHOWN THAT WHEN THE WATER CUT GETS TO BETWEEN 70 AND 80% THE FIELD COLLAPSES.  THE RUSH TO PRODUCE MORE OIL IS HASTENING THE DESTRUCTION OF FIELDS THAT COULD LAST LONGER OTHERWISE.  EVENTS THEN SEEM TO CONFIRM THESE WORRIES ABOUT SAUDI ARABIA. SAUDI REASSURANCES ARE NOW BEING CHUCKLED AT BY MAJOR FINANCIAL COMMENTATORS, AND SAUDI PLEDGES TO INCREASE PRODUCTION ARE HAVING LESS AND LESS EFFECT ON THE MARKETS.  GHAWAR, THE SUPER GIANT OF ALL FIELDS WAS DISCOVERED MORE THAN 60 YEARS AGO. IT HAD ESTIMATED RESERVES OF ALMOST 100 BILLION BARRELS OF OIL. PROFESSOR MICHAEL KLARE HAS TOLD US THAT, IN ORDER TO KEEP PACE WITH ACCELERATING OIL DEMAND, THE WORLD WILL HAVE TO DISCOVER THREE NEW GHAWARS IN THE NEXT 10 TO 15 YEARS JUST TO MEET DEMAND. THERE WAS ONLY ONE GHAWAR. THERE HASN’T BEEN ANOTHER ONE SINCE.  SO WHEN WE LOOK AT THE PALTRY AND RAPIDLY DIMINISHING RATE OF DISCOVERY FOR THE SO-CALLED MEGA FIELDS, THE PROSPECTS BECOME JUST A BIT MORE CHILLING. IN THE YEAR 2003, FOR THE FIRST TIME SINCE THE 1920s ACCORDING TO A LEADING PETROLEUM CONSULTING FIRM, NOT A SINGLE SO-CALLED MEGA FIELD – 500 MILLION BARRELS OR MORE – WAS DISCOVERED.

BY 2007, PRODUCTION CAPACITY WILL HAVE DECLINED BY 3-4MN B/D, YET THIS DECLINE WILL BE OFFSET BY 8MN B/D OF NEW CAPACITY.

DRAWN FROM THE MANY NEW PROJECTS EXPECTED TO COME ON STREAM OVER THE NEXT FEW YEARS. THIS LEAVES A SURPLUS OF 4MN B/D IN SPARE CAPACITY. YET GLOBAL DEMAND IS GROWING BY OVER 1 MBPD EACH YEAR. SO 3 YEARS OF DEMAND GROWTH WILL REDUCE OUR SPARE CAPACITY TO 1MN B/D BY THE START OF 2007. AS VERY LITTLE NEW CAPACITY IS SET TO COME ON STREAM IN 2007, THAT REMAINING 1 MBPD SPARE CAPACITY WILL LIKELY DISAPPEAR BEFORE 2008.

IN THE SHORT TERM OIL PRICES ARE GOVERNED BY MARKET FORCES RATHER THAN GEOLOGY WHICH WILL TELL US, AS OPPOSED TO INVESTMENT AND ECONOMICS, HOW MUCH OIL WE CAN ULTIMATELY EXTRACT. THE IRONY IS THAT WHEN THREE NEW MEGA FIELDS COME ONLINE ALL AT ONCE THE PRICES MAY ACTUALLY DROP. THAT WILL NOT CHANGE THE OUTCOME. SPECULATION AT PRESENT IS NOT A BIG A FACTOR AS IT COULD BE. I WHOLEHEARTEDLY AGREE WITH INVESTMENT BANKER MATTHEW SIMMONS THAT A MARGIN REQUIREMENT OF 50% SHOULD BE PLACED ON ALL OIL FUTURES TRADING WORLDWIDE.

THE UPSHOT OF ALL THIS IS THAT THE OIL SUPPLY APPEARS SUSTAINABLE, BARRING MAJOR WARS OR DESTRUCTION ON INFRASTRUCTURE UNTIL 2007. WITH SO MUCH NEW PRODUCTION COMING ON STREAM, THERE MAY EVEN BE PERIODS OF PRICE WEAKNESS. HOWEVER, IT IS LIKELY THAT WE WILL BEGIN SUFFERING OIL SHORTAGES AFTER 2007, ESPECIALLY IF ANYTHING HAPPENS TO DISRUPT A PORTION OF THE PRODUCTION. IF NEW PROJECTS ARE NOT FOUND, AND ONLINE BY 2008, THEN BY THE END OF THAT YEAR WE ARE CERTAIN TO SEE SEVERE SHORTAGES WITHOUT ANY CAUSE OTHER THAN RISING DEMAND.

BUT THERE IS ANOTHER FACTOR TO THIS OIL CALCULUS. SO MANY COMPLAINTS ARE BEING VOICED THAT A MAJOR PART OF THE PROBLEM WITH CURRENT OIL PRICES HAS TO DO WITH A LACK OF REFINERIES. PEOPLE POINT OUT THAT THERE ARE 18 DIFFERENT GRADES OF GASOLINE IN THIS COUNTRY MATCHING VARIOUS STATE LAWS. WHY, THEY DEMAND, ARE NO MORE REFINERIES BEING BUILT.  THE ANSWER IS SIMPLE AND IT IS A DIRECT AND IRREFUTABLE CONFIRMATION OF PEAK OIL. THE RETURN ON INVESTMENT – AS MATTHEW SIMMONS SAYS – IS UNCERTAIN. ACCORDING TO SIMMONS IT TAKES 5-7 YEARS AND ABOUT $150 MILLION TO BRING A COMPLEX REFINERY ONLINE. THE COST OF THE REFINERY IS PAID FOR BY THE SALE OF THE OIL.

THE REFINERIES ARE NOT BEING BUILT AND MASSIVE EXPENSIVE EXPLORATION PROJECTS ARE NOT BEING UNDERTAKEN BECAUSE THE OIL COMPANIES UNDERSTAND THAT THERE IS VERY LITTLE OIL LEFT TO FIND.

FINDING 10 NEW NORTH SEA FIELDS… SOMEWHERE

BY 2015, GLOBAL OIL DEMAND IS EXPECTED TO INCREASE BY OVER TWO-THIRDS, THAT IS 60 MBPD BEYOND CURRENT GLOBAL CONSUMPTION OF BETWEEN 75 AND 80 MBPD. TO MEET THAT DEMAND WE WILL HAVE TO FIND THE EQUIVALENT OF 10 NEW NORTH SEA OIL FIELDS WITHIN A DECADE. IN THE MEANTIME BRITAIN’S NORTH SEA, JUST LIKE ALASKA’S NORTH SLOPE DID A DECADE AGO, IS RUNNING DRY. RIGS ARE SHUTTING DOWN AND EMPLOYEES ARE BEING LAID OFF. YET WE ARE HARD PRESSED NOW TO DISCOVER EVEN ANOTHER MEGA-SIZED FIELD.

TO QUOTE FORMER BRITISH ENVIRONMENTAL MINISTER MICHAEL MEACHER, WE ARE FACING, “THE SHARPEST AND PERHAPS THE MOST VIOLENT DISLOCATION (OF SOCIETY) IN RECENT HISTORY.” I SHOULD ADD THE MEACHER, ALONG WITH FORMER GERMAN CABINET MINISTER AND FORMER PARLIAMENTARY SECRETARY ANDREAS VON BUELOW HAS STATED PUBLICLY AND IN WRITING THAT THE ATTACKS OF SEPTEMBER 11TH WERE PERPETRATED BY THE US GOVERNMENT.  THERE ARE MANY OUT THERE WHO JUST REFUSE TO BELIEVE THAT OIL AND NATURAL GAS ARE RUNNING OUT. SOME INSIST THAT OIL IS CREATED AUTOMATICALLY AND INFINITELY BY THE EARTH’S CORE, DISPUTING ALL KNOWN SCIENCE SHOWING OTHERWISE. THERE ARE THOSE WHO INSIST THAT ALTERNATIVE ENERGIES CAN BE SNAPPED INTO PLACE IMMEDIATELY TO ALLOW FOR INFINITE ECONOMIC AND POPULATION GROWTH.

ASIDE FROM LOOKING AT THE EVENTS SINCE 9/11 AND SEEING THAT THEY MATCH A WORLD OF DIMINISHING ENERGY LET’S TAKE A LOOK AT SOME RECENT DEVELOPMENTS AROUND THE WORLD AND SEE WHAT THEY TELL US.

BRITAIN’S LARGEST ELECTRICITY PROVIDER HAS ANNOUNCED THAT PRICES WILL SOAR AS MUCH AS 40% NEXT YEAR. WHOLESALE ENERGY PRICES HAVE DOUBLED IN THE LAST YEAR AS BLOOMBERG HAS ANNOUNCED THAT THE DECLINE IN NORTH SEA PRODUCTION IS CREATING A TRADE GAP WHICH IS NOW THREATENING TO CAUSE WIDESPREAD UNEMPLOYMENT.

IN MARCH REUTERS REPORTED THAT ARGENTINA, FACING ITS WORST ENERGY CRISIS IN15 YEARS, IS BECOMING UNSTABLE TO THE POINT OF THREATENING THE SECURITY OF THE ENTIRE REGION. IT HAS CUT ITS 47 NATURAL GAS EXPORTS TO CHILE BY 15%, WHICH IS THREATENING CHILEAN POWER GENERATION. ARGENTINA IS NOW MOVING INTO THE WORLD OIL MARKET IN SEARCH OF OIL FOR POWER GENERATION AND TRANSPORTATION AS ITS OWN DOMESTIC SUPPLIES HAVE DWINDLED.  THE BBC REPORTED RECENTLY THAT HIGH OIL PRICES ARE THREATENING MANY ASIAN ECONOMIES.

JUST TWO WEEKS AGO THE AUSTRALIAN GOVERNMENT ORDERED AN EMERGENCY FUEL REVIEW IN ANTICIPATION OF FUTURE CRISES. IN JUNE IT CONDUCTED A TEST TO SEE HOW THE GOVERNMENT AND COUNTRY WOULD RESPOND TO A “DISRUPTION” IN OIL SUPPLIES.  ON AUGUST 25TH IT WAS REPORTED THE BRAZIL WAS OPENING NEGOTIATIONS WITH ECUADOR TO REPLACE DIMINISHING OIL SUPPLIES.

CHINA, IN THE MIDST OF RAPIDLY DIMINISHING HARVESTS, A GROWING ECONOMY AND EXPANDING POPULATION IS FEARING A MAJOR FOOD CRISIS. THIS, EVEN AS HONG KONG, HANGZHOU, AND SHANGHAI ARE FACING MANDATORY BLACKOUTS WHICH ARE DISRUPTING MANUFACTURING, TRADE AND RETAIL ACTIVITY. CHINESE OIL IMPORTS HAVE INCREASED BY 15% IN JUST THE FIRST QUARTER OF 2004 ALONE.  GERMANY HAS MOVED TO INSTITUTE HOME ENERGY PASSPORTS, AND UNDERTAKEN SERIOUS AND WELL PLANNED EFFORTS TO REDUCE ENERGY CONSUMPTION. CHANCELLOR SCHROEDER, IN THE WAKE OF RECENT REVELATIONS THAT SHELL – WHICH DOWNWARDLY REVISED ITS RESERVE ESTIMATES FOUR TIMES IN ONE YEAR – CALLED UPON THE G8 NATIONS TO MOVE TO MANDATE TOTAL AND VERIFIABLE TRANSPARENCY IN ALL OIL RESERVE FIGURES.

INDIA, WHOSE OIL IMPORTS JUMPED 23% IN ONE MONTH, HAS MOVED TO CREATE A STRATEGIC PETROLEUM RESERVE.  INDONESIA, A MEMBER OF OPEC HAS ANNOUNCED THAT ITS OIL PRODUCTION WILL DROP SIGNIFICANTLY BY 2008.  JAPAN, IGNORING STIFF OPPOSITION FROM WASHINGTON, HAS SIGNED A MAJOR OIL CONTRACT WITH IRAN, AT THE SAME TIME THAT IT IS FEUDING WITH CHINA, VIETNAM AND THE PHILIPPINES OVER RELATIVELY SMALL OIL AND GAS DEPOSITS IN THE SPRATLY ISLANDS OF THE SOUTH CHINA SEA. IN ANTICIPATION OF PENDING MILITARY CONFLICT IN THE REGION CHINA HAS DECIDED TO BUILD A PIPELINE THROUGH BURMA TO THE INDIAN OCEAN SO THAT TANKERS SUPPLYING CHINA’S GROWING THIRST WILL NOT HAVE TO TRAVEL THROUGH A REGION THAT IS BECOMING INCREASINGLY DANGEROUS.  THREE BILLS HAVE BEEN INTRODUCED IN THE JAPANESE PARLIAMENT THAT WOULD SUSPEND ITS NON-VIOLENT CONSTITUTION AND PERMIT A FULL SCALE REARMAMENT.

RUSSIA, HAVING RECENTLY ADMITTED THAT ITS OIL RESERVES WERE FINITE AND THAT PRODUCTION MIGHT START TO DECLINE SHARPLY WITHIN THE NEXT FIVE YEARS HAS ANNOUNCED THAT IT WILL BUILD A PIPELINE FROM ITS SIBERIAN FIELDS TO THE PACIFIC PORTS OF VLADIVOSTOK AND SAKHALIN THUS AGREEING TO SELL ITS OIL TO JAPAN, KOREA AND THE PHILIPPINES. RUSSIA’S OTHER CHOICE WAS TO HAVE THE PIPELINE TERMINATE IN CENTRAL CHINA.  THIS WEEK IN PETROLEUM, AN INDUSTRY JOURNAL HAS REPORTED THAT NON OECD COUNTRIES HAVE BEGUN TO HOARD PETROLEUM AND 49 ARE BUYING ALL THEY CAN EVEN AT WHAT SOME ANALYSTS CALL “INFLATED” PRICES.

IN THAILAND, MANDATORY EVENING CURFEWS HAVE BEEN IMPOSED TWO NIGHTS A WEEK REQUIRING ALL BUSINESSES TO SHUT DOWN IN ORDER TO CONSERVE ENERGY.

ON AUGUST 24TH BRITAIN’S OIL DEPLETION ANALYSIS CENTER CONFIRMED, CITING DATA FROM PETROLEUM REVIEW THAT DAILY OIL DEPLETION IS NOW EXCEEDING ONE MILLION BARRELS PER DAY. IN OTHER WORDS, EVERY DAY, THE WORLD IS PRODUCING 1.14 MILLION BARRELS PER DAY LESS THAN IT DID THE DAY BEFORE. BY ANALYZING DATA FROM THE 18 LARGEST OIL PRODUCING NATIONS PETROLEUM REVIEW CALCULATED THAT PRODUCTION FROM THESE COUNTRIES PEAKED IN 1997 AT 24.7 MILLION BARRELS PER DAY AND THAT BY 2003 IT HAD FALLEN TO 22.1 MILLION BARRELS PER DAY.  ON AUGUST 21 THE HOUSTON CHRONICLE POSED A GREAT QUESTION.  IF OIL PRICES ARE SOARING AND THERE’S INSATIABLE DEMAND, WHY ISN’T THERE A BOOM IN HIRING AND CORPORATE EXPANSION? THE CHRONICLE, PAYING DUE HEED TO THE FINANCIAL MARKETS, OFFERED THE DUBIOUS EXPLANATION THAT THE OIL COMPANIES JUST DIDN’T WANT TO OVERDO THINGS AND LOOK GREEDY. IN FACT, ALL OVER THE WORLD OIL COMPANIES ARE DOWNSIZING, SELLING OFF ASSETS, LAYING OFF EMPLOYEES AND MERGING. JUST LAST WEEK IT WAS ANNOUNCED THAT FRENCH GIANT TOTAL WAS CONSIDERING A TENDER OFFER TO PURCHASE ROYAL DUTCH SHELL.  AND HERE IN THE UNITED STATES, RISING OIL PRICES HAVE FORCED MAJOR AIRLINES LIKE UNITED TO CONSIDER RAIDING CORPORATE 50 PENSION FUNDS IN ORDER TO OFFSET RISING OIL COSTS AS AN ALTERNATIVE TO BANKRUPTCY.

IN THE MEANTIME, IN THE WEST AFRICAN COUNTRY OF LIBERIA, THERE ARE REPORTS OF 10 YEAR-OLD MERCENARIES BEING RECRUITED TO FIGHT IN GUERILLA CONFLICTS IN NEIGHBORING COUNTRIES AND THERE IS NO SHORTAGE OF RECRUITS. I WONDER IF SENATOR CHUCK HAGEL OF NEBRASKA WILL SEE ANY OF THEM. HE JUST LEFT ON AN ENERGY “SAFARI” TO SCOUT WEST AFRICAN PROSPECTS, JUST ABOUT A YEAR AFTER NATO ANNOUNCED IT WAS SHIFTING ITS FOCUS TO WEST AFRICA AND THE US DELIVERED SIX OBSOLETE WARSHIPS TO THE NIGERIAN NAVY.

THIS, LADIES AND GENTLEMEN, IS JUST THE BEGINNING. AND NEITHER PRESIDENTIAL CANDIDATE HAS EVEN REMOTELY ADDRESSED THE REAL ISSUES OR DARED TO TELL THE AMERICAN PEOPLE THE WORST.  THE ONE OVERRIDING CONCERN I HAVE SEEN EXPRESSED EVERYWHERE IS “OH, NO. WE CAN’T DO THAT. IT WILL CRASH THE MARKETS.”

IS THAT THE SUM TOTAL OF HUMAN EXPRESSION AND ACHIEVEMENT? THE MARKETS?


0 Comments:

Post a Comment

<< Home