The End of the World as You Know It

by on April 15, 2008 · 1 comment

in Environment, War and Peace

…and the Rise of the New Energy World Order

By Michael T. Klare

Oil at $110 a barrel. Gasoline at $3.35 (or more) per gallon. Diesel fuel at $4 per gallon. Independent truckers forced off the road. Home heating oil rising to unconscionable price levels. Jet fuel so expensive that three low-cost airlines stopped flying in the past few weeks. This is just a taste of the latest energy news, signaling a profound change in how all of us, in this country and around the world, are going to live — trends that, so far as anyone can predict, will only become more pronounced as energy supplies dwindle and the global struggle over their allocation intensifies.

Energy of all sorts was once hugely abundant, making possible the worldwide economic expansion of the past six decades. This expansion benefited the United States above all — along with its “First World” allies in Europe and the Pacific. Recently, however, a select group of former “Third World” countries — China and India in particular — have sought to participate in this energy bonanza by industrializing their economies and selling a wide range of goods to international markets. This, in turn, has led to an unprecedented spurt in global energy consumption — a 47% rise in the past 20 years alone, according to the U.S. Department of Energy (DoE). [For the rest of this article, go here to TomDispatch.com.]

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avatar atheo April 17, 2008 at 4:32 pm

The sky is falling!!!

“An increase of this sort would not be a matter of deep anxiety if the world’s primary energy suppliers were capable of producing the needed additional fuels. Instead, we face a frightening reality: a marked slowdown in the expansion of global energy supplies just as demand rises precipitously. These supplies are not exactly disappearing — though that will occur sooner or later — but they are not growing fast enough to satisfy soaring global demand.”

In fact Klare offers no evidence that suppliers are incapable. Certainly at the present, supply is gaining on demand. This article is more alarmist disinformation.

“The combination of rising demand, the emergence of powerful new energy consumers, and the contraction of the global energy supply is demolishing the energy-abundant world we are familiar with and creating in its place a new world order…This new world order will be characterized by fierce international competition for dwindling stocks”

More xenophobic fearmongering. Supply is clearly not contracting. Yet more lies.

“These rising economic dynamos will have to compete with the mature economic powers for access to remaining untapped reserves of exportable energy — in many cases, bought up long ago by the private energy firms of the mature powers like Exxon Mobil, Chevron, BP, Total of France, and Royal Dutch Shell.”

Yes, “many cases” 3% of proven reserves to be exact.

“Several of these state-owned firms, including CNPC and India’s Oil and Natural Gas Corporation, are now set to collaborate with Petróleos de Venezuela S.A. in developing the extra-heavy crude of the Orinoco belt once controlled by Chevron. In this new stage of energy competition, the advantages long enjoyed by Western energy majors has been eroded by vigorous, state-backed upstarts from the developing world.”

More xenophobic claptrap. Western big oil has for decades relied on fees, markups and “spreads” for it’s earnings. They are happy to generate income from transport, refining and retailing. Expansion of supply only reduces their margins. They are happy to let others make these risky development investments. When supply eventually exceeds demand they can pick up these assets for pennies on the dollar from upstarts that depend on higher prices. Oil like any commodity IS cyclical. The history of the industry contains six similar cycles.

“By all accounts,[???] the global supply of oil will expand for perhaps another half-decade before reaching a peak and beginning to decline.”

This is nothing more than the gospel according to Klare.

“Most [any evidence???] energy professionals, however, consider this estimate highly unrealistic. “One hundred million barrels for 2030 is now in my view an optimistic case”

First he claims that production will peak shortly from the current 85 million barrels, then he claims that one estimation of 100 million barrels in 2030 supports his contention. His readers are required to have an awfully short attention span, though I guess he could be relying on their ignorance of current levels.

“major energy firms…drill in the deep and difficult waters of the Gulf of Mexico and the Atlantic Ocean. The result? A few more barrels of oil or cubic feet of natural gas at exorbitant prices”

Actually the production cost of deep water oil is under $25/barrel hardly “exorbitant”. “A few more barrels” is Klare’s terminology for hundreds of billions of barrels.

“Will energy-deficit states launch campaigns to wrest the oil and gas reserves of surplus states from their control — the Bush administration’s war in Iraq might already be thought of as one such attempt — or to eliminate competitors among their deficit-state rivals?
The high costs and risks of modern warfare are well known and there is a widespread perception that energy problems can best be solved through economic means, not military ones. Nevertheless, the major powers are employing military means in their efforts to gain advantage in the global struggle for energy, and no one should be deluded on the subject.”

Here it is Klare who is attempting to “delude” his readers by pretending that the wars in the Middle East are for “control of oil.”

“What this adds up to is simple and sobering: the end of the world as you’ve known it.”

Klare uses the words “dire” and “catastrophe” in almost every paragraph throughout the article and finally closes with a baseless Malthusian prognosis.

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