Monday, October 20, 2008

Speculation: Inept Idiots or Wise Fools

Speculation, in regards to the manipulation of oil markets, does deserve, and has received, a good deal of attention due to the recent onset of record price volatility. People have begun speculating on the role that speculation plays. We can hypothesize about such topics, but until we are given time and hindsight, we would be incorrect in assuming that our views are paramount. It is in this definition of speculation, the process of gathering information to reach an array of possible conclusions – conclusions that are still hypotheses in themselves – that this article will be devoted to. In particular, I wish to speculate on the competency of America’s leaders in the 21st century.

It has become common wisdom that the Bush Administration’s foreign occupations are epic failures. Some naively argue that the Bush Administration tried, and failed to provide democracy to the people of Afghanistan and Iraq. More knowledgeable observers say that the Bush Administration led the United States down a path of imperial hubris that has brought upon large deficits and ‘unwinnable wars.’ These escapades, particularly the Iraq War, have become the Achilles heel of the American empire, and are quickly catalyzing its inevitable decline. This view is accepted not only by the Administration’s mainstream political opposition, but also by the vast majority of its most ardent critics. The Bush Administration is incompetent, end of story, or is it?

Let it be known, no one knows.

For the sake of speculation, let’s assume they are not incompetent. Let’s assume they are intelligent, conniving thugs who know exactly what they are doing. Is it possible that the Administration has, in a barbaric sense, effectively prepared for a post-peak world? That would explain the permanent military bases that have been established ‘where the prize lies.’ It could also explain why Iraqi production has stagnated since the invasion. Could maintaining such low rates be an intentional effort to save crude for a time when oil markets have dissolved? If this theory was entirely true, it could also explicate why the administration has complete disregard for budget balancing. What is debt when there remains no financial system to enforce it?

If the Administration had the foresight and intelligence to carry out all of the above, they probably would have had the political acumen to actually mitigate Peak Oil through means of conservation and alternative energy investment. This does not mean however that certain aspects of this alternative theory could be correct. The American elite have such an insatiable desire for profit, it seems near impossible that they could resist immediately tapping into Iraq’s reserves, so it seems that Iraqi production is indeed down because of pipeline disruptions, and not intentional postponement. Likewise, it would seem quite a stretch that any Administration would bet the farm on Peak Oil dismantling finance as we know it, and previous Administrations have shown that neglecting the burden of debt has become an institutionalized problem, and not some random occurrence. And that leaves us with the permanent bases. They, in the near future, will either be abandoned memorial sites of past exploitation, like the sinking, graffiti ridden concrete forts of Normandy, or they will remain functioning hubs of imperial occupation. And it is here that many Peak Oil analysts disagree.

Some analysts envision a century of relentless resource wars, while others believe that the Iraq war has proven that such wars are not practicable – in a sense, they are saying that these wars have a negative EROEI. As Robert Hirsch has repeatedly stated, if we look at studies like Oil Shockwave, and briefly examine the failure of Iraq or Nigeria’s oil production, we will realize how vulnerable pipelines and production are. If Hirsch is right, the Iraq war will go down in history as just another example of imperial overextension.

Why then do so many others predict a century of blood and war?

Since we are speculating, we should put all options, even the most bizarre on the table. Perhaps some believe that there is already a grand conspiracy in place in which the U.S. is siphoning Iraqi oil out of the country, and out of reach of the free market. The likelihood that this scenario is occurring is extremely low, yet it is still technically feasible. More realistically, people whom prophesize a violent 21st century envision a post-peak world where the moral restrictions of war that exist today, albeit in tiny amounts, have been thrown out the window in pursuit of survival. Having created more than 4 million refugees, and having killed up to 1 million civilians, what moral restrictions have not already been violated by the United States?

We have not seen large-scale bombings on civilian populations to wipe out resistance, nor large-scale chemical weapons use, nor nuclear warfare… yet. Given the right circumstances, human beings can commit acts of evil towards one another on a vast scale. There is no need to cite historical precedent here; everyone knows how pernicious our species can be. What makes our current situation so frightening however is that, as many Peak Oil analysts will tell you, there is no historical precedent for the Peak Oil era. If human beings have already proven their capacity for evil in a world of cheap energy and expanding markets, what will we be capable of in a crashing, survival of the fittest environment?

So, have America’s leaders already confirmed their incompetence, or will the future verify that they are wise fools? Will Iraq be the center of western oil imperialism for decades to come, or will it succumb to a strengthened insurgency? We can speculate, but only time will tell. It is necessary however to keep an open mind on the subject, and to not disregard opinions that counter our own simply because President Bush has an offensive inability to speak the English language, or because we have preconceived notions that colonialism has succeeded in the past, and therefore will triumph once again.

Even if the Iraq experiment ‘succeeds’ in the coming years, and the powers that be are able to extract the oil they ‘need,’ America’s leaders are fools regardless, for the finite nature of resource extraction that led them to invade Iraq in the first place will inevitably affect production there too.

Most importantly, they are fools for not comprehending the value of human life.

Peak Oil Note - Come Join Us!

*** I wrote this 'note' on facebook on April 26th, 2008, to recruit more students to the Peak Oil cause at UT. Although the economy started slipping in August of 2007, last April we were financially far better off than we are now, so the note is still, if not more so applicable. The Peak Oil Club of UT had a fun tabling session the following week.

Peak Oil Note - Come Join Us!

If you’ve been paying attention to the economy, you’re probably a little anxious to say the least. We’ve never lived through a lasting economic downturn. We know only of expanding markets, prosperity, and exponential consumption. We are growing to learn, however, that our world has limits, and that our current lifestyles are not only unsustainable, they are destructive to the human ethic.

There are many reasons for the documented slowing of the global economy. Freshwater, which we have falsely assumed is infinitely accessible, is proving to be scarce, and is being extracted from aquifers across the globe at unsustainable levels. Biofuels, like corn ethanol, are failing to be the energy panacea many had hoped they would become, and are taking valuable land and food resources away from the hungry – it is important to note that America, because of our rich soils and powerful trade agreements, truly is the world’s bread basket. Climate change is no longer discussed by scientists in the future tense, but instead the present. Approximately 15 of the 24 ecosystems we depend on as a species for survival are being dismantled by the unaccounted byproducts, like plastic waste, of our throw-away economy. These are all imminent, real, and terribly important issues that need to be addressed. There is one issue though that’s synergetic qualities unite all the problems listed above together, and is proving to be the defining concept of our generation.

Peak Oil will affect every individual on this planet in a big way. If you need the clarification, Peak Oil is “the simplest label for the problem of energy resource depletion, or more specifically, the peak in global oil production. Oil is a finite, non-renewable resource, one that has powered phenomenal economic and population growth over the last century and a half. The rate of oil 'production', meaning extraction and refining (currently about 85 million barrels/day), has grown almost every year of the last century. Once we have used up about half of the original reserves, oil production becomes ever more likely to stop growing and begin a terminal decline, hence 'peak'. The peak in oil production does not signify 'running out of oil', but it does mean the end of cheap oil, as we switch from a buyers' to a sellers' market. For economies leveraged on ever increasing quantities of cheap oil, the consequences may be dire. Without significant successful cultural reform, severe economic and social consequences seem inevitable” (

The computer that you are reading this off of took ten times its weight in oil to produce. In our current agricultural system, for every one calorie of food we consume, it takes 10 calories of fossil fuel input to get that food on our plate. The implications of these facts are stark. What will we do when fossil fuel input is in decline?

The process of understanding Peak Oil is tumultuous. Many people get stuck at the first stage of denial. It’s hard to accept the fact that our current lifestyles are not only harmful for the future, but are impossible to maintain in the present. Whether we deny the facts or not, facts are facts, and in the end, denial will prove to be a short-term solution to a long-term problem. The truth is, we must start taking action, and we must do so immediately.

I understand the tendency to gravitate towards apathy. Please avoid doing so. It is our lawmakers’ responsibility to change the system from the bottom up, and begin diverting substantial amounts of money into the development of alternative energy technologies. It is our responsibility to make those lawmakers aware of why failing to do so would be catastrophic. So, come join us!

This Monday, April 28th and Wednesday April 30th, the Peak Oil Club will be collecting emails and signatures at the West Mall. This upcoming year – being an ‘on’ year for the state legislature – will define the fate of Texas for many years to come. The Peak Oil Club will be distributing Peak Oil information packets to each member of the state legislature, to other important Texan political figures like Governor Rick Perry, and to an array of federal representatives. Our message will gain strength with each member that joins.

So, come help us table if you would like, or simply just sign up. If you want to simplify things you can just message me and I’ll add you to the member list.


P.S. if you aren’t a UT student and feel alarmed by this issue, there are many active groups around the country working to mitigate Peak Oil. Just google search peak oil and your city, and most likely something will pop up.

Friday, February 22, 2008

A Debating Myth

Yesterday at UT, Obamarama arrived, and it came with a bang. Face paint, bumper stickers, large cardboard signs with amusing slogans like “Obama has love like a Mama,” and other emblems of enthusiasm could be seen in every direction. The hope was palpable, the change foreseeable. I could hear the chants and cheers from across campus, yet curiously, I couldn’t help but feel morose. What will these happy faces look like four years from now?

With oil closing over $100 a barrel two days prior to the debate, the warning signs of peak oil stagflation could not be clearer. These supply shocks are going to hit, and they are going to hit hard. The idealism, or more commonly the ignorance, that enables people to believe that our empire will forfeit the world’s largest unproven reserves during such turbulent times is laughable. Just three days before the presidential debate, 70 firms registered to bid for Iraq oil contracts. Just three weeks before the debate, President Bush announced that he would bypass provisions of the National Defense Authorization Act that prohibits taxpayer money from being spent on the construction of permanent military bases. According to the Washington Times, eight months into 2007, Iraq had only spent 4.4% of its $10 billion budget for capital projects on rebuilding the country, while 7 of that 10 billion was invested in U.S. treasuries – undoubtedly such statistics represent only the tip of the corruption iceberg.

There is a common misconception amongst liberals that the root of America’s economic woes is the war in Iraq, and that an immediate withdrawal will result in soaring surpluses and a booming economy. Everyone by now knows the saying, “Iraq is bankrupting our economy.” We read it in our newspapers and magazines. We hear it from political pundits, and even from our presidential candidates. This view, however popular it might be, is remarkably simplistic, and ignores the geopolitical interdependence of the world we live in. Unfortunately, the truth is quite the opposite: Iraq is our economy.

That statement is obviously hyperbole, but there is truth in every jest. On the eve of September 11th, while enduring its 3rd consecutive quarter of economic contraction, the U.S. was headed for an economic recession. By the 4th quarter however, the GDP was back on an expansionary track. A war economy built upon an exponential expansion of surveillance technology and mercenary contracting, in conjunction with the conventional growth of the military-industrial-congressional complex, temporarily rescued American economic hegemony. Five years later, the fuel of that economy is running low, and one of the only places to find it in large quantities anymore is right under the feet upon which that economy stands - Iraq. And although the democratic candidates might ignore this fact on the public stage of debate, their true intentions of how to cope with this unsolvable dilemma is still visible - business and usual. By supporting a sustained military presence to protect our 104 acre embassy, among other 'menial tasks' like fighting off Al Qaeda, Senators Clinton and Obama are confirming the continuation of our imperial occupation.

I’m a fan of hope, without it humanity is destitute, and at times I can’t help but say to myself, “Yes, We Can,” but when it comes to Iraq, the only words I can utter are, “No, We Can’t,” or more fittingly, “No, We Won’t.”