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.

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