Peak Oil News: Uncharted Territory

Wednesday, December 07, 2005

Uncharted Territory

Clusterfk Nation

By Jim Kunstler

When people of any political persuasion cry for America to pull out of Iraq, what do they suppose will be the result? That America will go back to being the same nation of easy-motoring, McMansion-buying consumpto-trons we were in 1999? Things have changed.

The world oil markets have changed. Their stability through the 1990s was a transient phenomenon, and a circumstance which, unfortunately, put us to sleep. During that time, OPEC, led by Saudi Arabia, was the world's "swing producer" -- the oil producer with spare capacity that could always open the valves and pump more. And they did, even cheating on their own official quotas, which only had the effect of flooding the market with "product" and driving down the prices -- so by the end of the last century oil had sunk to $10 a barrel.

That was great for America in the short term. It reinforced the widespread illusion that the oil disruptions of the 1970s were a shuck and jive. We ramped up all our car-dependent behavior, built more malls and "lifestyle centers," carved more housing subdivisions in the farthest-out asteroid belts of the metroplexes, bought cars the size of tactical military vehicles, and acted as if this was a way of life with a future.

Many things have changed. One is that a potent segment of the Islamic world declared war on the west (jihad). Another is that OPEC, led by Saudi Arabia, has apparently lost its spare capacity, and therefore its role as the world's swing producer of oil. Another is that the North Sea and Alaskan oil fields have passed their production peaks and are depleting at phenomenal rates -- in the case of Great Britain's fields, up to 50 percent a year -- because they were drilled so efficiently with the latest technology. Yet Another is that rising ocean temperatures have led to several years of massive hurricanes wreaking havoc among the oil and gas platforms of the US Gulf Coast. Still another is the industrial turbo-expansion of China and India, taking advantage of their ultracheap labor to become the world's factories and back-offices, while jacking up their oil consumption.

Oil trade has now become a dead heat race between supply and demand, with demand looking like the stronger horse coming into the home stretch. As it overtakes supply, even more strange changes will unfold on the world scene. These are likely to take the form of fierce geopolitical struggles to gain favor in or control those regions that still have a lot of oil, foremost the Middle East, with Iraq located at dead center of it.

There is really only one condition that will allow us to pull out of Iraq. That is if we make an enormous collective effort to change our behavior here in North America; if we break free from an economy pegged to suburban sprawl, reform the way we do agriculture and retail trade, make substantial investments in public transit and railroads in particular, and practice fiscal restraint at every scale, including an end to the reckless creation of mortgages. Unless we face these facts and the tasks associated with them, then we will find ourselves at the center of that geopolitical struggle.

Right now, nobody from any political stance is talking about these facts and these tasks. Those in the anti-war movement are by-and-large people who enjoy the same suburban "entitlements" as the war-hawks. The anti-war leadership is even worse than the pro-war leadership, because the war-hawks don't even pretend to be interested in reforming the way we live -- they've declared it "non-negotiable."

If the anti-war movement has a different idea, they sure haven't expressed it. If the Democratic party were to take the lead in the anti-war movement, they would have to start negotiations for changing the way we live in this country. To evade the responsibility for this would simply be cowardice. Leading sometimes means taking public opinion into territory it hasn't been to before.

We're now entering that territory, by the way. Stealthily over the past week, the price of natural gas has crept above $14 a unit (one million btu's). Half the houses in America are heated with the stuff. 90 percent of America's farm fertilizers are made out of it. Above $14 really is uncharted territory.


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