The Empire Declines

Here's a special issue of the Edge, dedicated to the declining US. First, a somewhat long and thoughtful article on the new world order (sorry), you know, the one that arose while the US was busy "projecting" American power by starting up and continuing wars throughout the globe, ignoring vital needs at home, becoming the most despised evil empire abroad, and just generally doing what empires do before they collapse. Kindly ignore the "prescriptions" at the end; they will not be undertaken in any event. Up next is the oft-cited Chalmers Johnson, author of the Blowback trilogy, and general chronicler of US military overreach, on how the vast sums spent on the US military will be the downfall of the Empire (and who could doubt it, really?). Do not fail to click on the embedded video interview link within the post; the man makes for a fascinating subject.

The Consequences Of Believing In Fairy Tales

Something Chaos has said for quite some time, in slightly different words, has been confirmed by an actual report. In this article,which wrings its hands about the US' loss of dominance in math and science (itself a rather dated story), we find out the truth, as is often the case, at the bottom:

"Many Americans remain ignorant about much of science, the board said. Many are unable to answer correctly when asked whether Earth moves around the Sun (it does).

They are not noticeably more ignorant than people in other developed countries except on two subjects, evolution and the Big Bang. Although these ideas are organizing principles underlying modern biology and physics, many Americans do not accept them.

“These differences probably indicate that many Americans hold religious beliefs that cause them to be skeptical of established scientific ideas,” the report said, “even when they have some basic familiarity with those ideas.”

Well, Chaos has nothing particular to add to this...

Quotes Of The Day

"If it hurts, make it hurt more."

"Any race you can walk away from, is a bad race."

News Release You Won't Read In The News

One of the most useful links here at The Edge is TheOilDrum.com. Providing a plethora of energy and collapse news and articles daily, it's an addicting read. If you've noticed that the price of oil recently has hit new highs, you're not alone. Here, in its entirety, is the news release by the editors of The Oil Drum (note the realistic, fact-based view of the situation):

A Signal Ignored

Coming as it does on the eve of the Iowa caucuses, the breaking of the $100 dollar barrier for oil prices will likely be treated by many as an almost imperceptible change in our world. By Friday it will likely be lost in the discussion of the political events unfolding.

The $100 a barrel price is a sign that times will never be the same again. According to TheOilDrum.com, the world is entering a new era, where the supply of energy will come to dominate the political landscape in a way that is currently not recognized by any of the leading candidates.

Over the past two years, citizens have been repeatedly assured that there is no problem with future oil supply. Because of a perceived need to present both sides of the argument, the public has heard false promises of lower future prices, and been beguiled by the possibility of a price collapse in the face of excess supply.

Recently, various qualifiers have started to appear in oil discussions. These qualifiers include the need for increased investment in exploration and improved production technologies. The media fails to mention that the needed investment will be at an increasingly diminished rate of return, to the point where it becomes economically unattractive to search harder and harder for very small quantities of oil and gas.

Both oil and natural gas resources around the world are found in underground reservoirs of a finite size. Many of these oil reservoirs have now been producing for over fifty years. In that time, the vast quantities of oil that were in place have been reduced. As the quantity of oil remaining in place falls, the rate at which oil can be recovered also falls. This makes it necessary to drill additional wells into the reservoir in order to maintain the level of output.

According to TheOilDrum.com, at some point enough oil will have been extracted that no matter how many more wells are drilled, overall production from the field will go into irreversible decline. And as field after field reaches this condition, the overall production of oil for the region will begin to fall. This happened to the United States in 1970 when oil production reached a peak. US production has since declined from a maximum of over 9.6 million barrels a day (mbd), to the current level of around 5 mbd. More recently, the oil fields of the North Sea, the Alaskan fields on the North Slope, and the huge Cantarell field in Mexico have entered irreversible decline.

As these fields deplete, smaller fields have been brought into production, but these small fields do not last as long. Drilling activity must be increased in order to find even smaller fields. These, in turn, deplete more and more rapidly, exacerbating the need for new wells.

According to TheOilDrum.com, the world is now reaching the point where all of the oil fields of the world are in aggregate coming to peak production. As peak world production draws near, the rate of increase in oil production can be expected to stall because of constrained resources. This can happen even with rising demand. Once production falls short of what is needed, oil prices can be expected to increase, so that demand is brought in line with available supply.

At this point, countries that still have a surplus of oil to export are seeing their economies boom. This growth brings an increase in their own demand for oil, which reduces the amount that can be made available for export. This higher oil use by exporting countries reduces the available supply to importing countries, further accelerating the rise in price. The countries least able to afford the increase are likely to be affected most.

The consequences of energy supply shortages can be surprisingly great. Energy shortages can lead to public unrest, such as occurred recently in Myanmar. In times of inclement weather, energy shortages can lead to a loss of export supply, if the supplier finds that domestic demand is consuming all that is available. Problems for importing nations then suddenly become worse. One such example is the Iranian gas import situation this past week, and the consequent cut in exports to Turkey.

According to TheOilDrum.com, the world has now entered a period of fragile balance between demand and available supply. Unfortunately the situation cannot be expected to improve. The increasingly limited ability of nations such as Saudi Arabia and Russia to increase oil production is already becoming evident, leading to a reduced potential for raising world production.

It now appears unlikely that the world will ever see a daily oil production rate of 90 mbd, even when natural gas liquids and condensate are included. Thus, future projections that speak glibly of numbers above this level are foisting a canard on the world's population that all will come to regret.

In the coming months, the $100 per barrel marker will be lost in the debate over other issues. According to TheOilDrum.com, limited oil supply is not an issue that will go away. Rather, it is an issue that will steadily increase in importance. Eventually, the cries for action, and for culprits to blame will become over-riding -- at a time well within the first term of the presidential candidates.

These candidates now pay little attention to energy policy, but that must and will change. Hopefully, greater concern for energy policy will occur before events force a change, but so far the grim markers along the way have largely been ignored.

Now, contrast that with this clueless MSM article which appeared in the local rag a couple of days ago:

$100 oil likely to hit pocketbooks soon

Web Posted: 01/06/2008 08:08 PM CST

Brett Clanton
Houston Chronicle

U.S. consumers are likely to feel the sting of $100 oil soon, and in perhaps more ways than they realize.

Crude reached the symbolic milestone, albeit briefly, a couple of times last week, before closing Friday at $97.91.

More directly ominous for consumers, AAA reported Friday that the average price for a gallon of regular gasoline nationwide was $3.07, up from $2.32 a year ago. In Houston, the average price at the end of the week was $2.92, up from $2.18 last January. (San Antonio: $2.94, compared to $2.17)

Higher gasoline prices likely will pinch consumers the most as more crude costs are passed through to drivers, analysts said.

But if oil prices stay up, Americans also may see higher prices for a host of other petroleum-derived products, from lightbulbs and paint to golf balls and deodorant.

"There's oil in everything around us," said Edward Morse, chief energy economist at Lehman Bros. in New York. So it's impossible not to be touched in some way by $100 oil.

"Whether it's the direct impact of heating oil or diesel or gasoline, the indirect impact is sort of ubiquitous in the world we live in," he said. "And it affects everyone's pocketbook because it affects the amount we can spend on the things we need and want."

Oil prices continued their ascent in the first days of this year after climbing nearly 60 percent in 2007 amid rising global energy demands, geopolitical tensions and betting by speculators in commodity markets.

Yet the effects of the sharp increase in oil prices have been slow to hit consumers.

Profits dipped for most major oil companies in late 2007 because crude oil costs rose faster than their refining operations could pass those costs on, leaving the companies stuck with the bill. Other industries also have been absorbing higher energy costs to avoid raising prices for their products, analysts said.

"But somewhere down the line, if (oil) prices are sustained at where they are today, you'll probably start to see it creep into consumers' pocketbooks," said Brian Youngberg, energy analyst at Edward Jones in St. Louis.

That creep is well under way at the gas pump.

It was on the minds of drivers late last week at a Shell station in southwest Houston, where regular unleaded sold for $3.14 a gallon.

"It takes a toll," Chris Emuchay, 20, a security guard, said as he gassed up his aging Cadillac Sedan DeVille. "It makes you worry about just going to work and getting home."

David Dixon, 37, said higher energy costs have spurred him to hunt for bargains at gas stations, to install more energy-efficient appliances at his home in Pearland and to cut unnecessary spending.

"Anything we don't need to spend money on, we're trying not to," said Dixon, a service manager at a local sign manufacturer, who was filling up his 1992 Mitsubishi Montero SUV.

Dixon may not be alone. Recently, the Federal Reserve has warned that higher energy costs could force many consumers to pull back spending in other areas and lead to a broader slowdown of the U.S. economy.

That worry has deepened in recent weeks amid signs of slower growth in several parts of the economy, prompting speculation by analysts that a recession is near. Those signs include softer growth in retail sales, continued trouble in the housing market, declining industrial production and slower job growth.

Many eyes also remain on consumer spending, which accounts for about two-thirds of the U.S. economy.

Growth in consumer spending, at 4 percent in the first quarter of 2007, fell to about 1.4 percent in the second quarter amid higher gas prices, but then recovered to 3 percent in the third quarter. Economists expect consumer spending numbers for the fourth quarter, which have not yet been released, to show slower growth.

"You would not expect high gas prices to depress consumer spending growth forever," said Nigel Gault, an analyst with economic forecaster Global Insight. "What we would expect to see is if gasoline prices go up, that squeezes spendable income. People adjust to that."

For some, that may mean driving less. During the last four weeks, as pump prices have climbed, U.S. gasoline demand rose only 0.1 percent compared to the same period a year ago. Analysts consider year-over-year demand growth of less than 1.5 percent to be soft.

A similar pullback occurred last spring and early summer when gasoline prices hit record levels, said Michael McNamara, vice president of research and analysis at MasterCard Advisors, which collects data on gasoline demand based on MasterCard receipts and other payment types.

"In 2007, it seemed to be that at the $3.00 to $3.10 per gallon level, people began to pump less gas," he said.

While $3 gas has appeared during the peak summer driving season in recent years, prices always fell again in the fall on softer demand for motor fuels. But in November and December of 2007, average prices surpassed the $3 mark for the first time ever in each of those months, AAA said.

If oil stays high, gasoline prices could continue their march upward, hitting new records, analysts said.

The record national average of $3.23 per gallon was set May 24, according to AAA.

Tom Kloza, oil analyst with the Oil Price Information Service in Wall, N.J., believes gas prices could keep rising this year, but probably won't reach $4 a gallon.

"I think a range of $3.25-$3.75 is a reasonable guess of where gasoline prices may peak in 2008," he said.

About 3.5 percent of U.S. household budgets now goes to gasoline and fuel costs, up from 3 percent in the fourth quarter of 2006, according to the U.S. Bureau of Economic Analysis.

From early 1986 to 2004, families never dedicated more than an average of 3 percent of their total spending to gasoline. In the fall of 2006, gasoline expenditures jumped to 3.8 percent. The record was 5.2 percent in 1981, when oil prices, adjusted for inflation, were about where they are today.

With gasoline price spikes in recent years, Americans have responded by cutting vacations, saving less and borrowing more on credit cards, said Christian E. Weller, a senior fellow at the Center for American Progress, a Washington, D.C., think tank, and professor at the University of Massachusetts Boston.

"The main point still holds that families cannot adequately plan for large jumps in gasoline prices," Weller said. "And that they will have to cut back elsewhere."

Very few facts here, mostly just spin for the masses. Let's not inquire too closely into the actual situation, folks, the entire economy depends mostly on "confidence" (now there's a loaded term).

Two Views On Population: What We Cannot Say

It is not news to regular readers that Chaos wholeheartedly agrees with Dr. Bartlett's assertion that overpopulation (along with exponential growth) constitutes the root of most of humanity's troubles. Equally clear is the fact that these topics are not permitted to be discussed on any level; don't look for your favorite presidential candidate to add them to a stump speech, or your favorite flavor of political party to adopt them as 'planks' in their 'platforms.' Why not? Well, read Kurt Cobb's explanation of what happens when you do bring up the issue. Along the way, the author provides an excellent overview of the concept of "carrying capacity" and how OECD countries export their resource degradation to the rest of the world. Another view of the issue comes from this op-ed in the nation's paper of record by the eminent anthropologist Jared Diamond. Diamond reflects the current understanding among those concerned about the natural world that one's resource 'footprint' is more important than the numbers of humans inhabiting the planet. An other wise insightful article is marred towards the end by the now almost obligatory references to hopeful examples of growing awareness of the problems (along with an exhortation that diminished resource consumption need not constitute a diminished lifestyle, a ridiculous assertion but one necessary to publish in a mainstream newspaper, because nobody wants to hear anything like they might have to live differently than they do now), which Chaos found to be underwhelming at best, and mendacious at worst. Chaos' own view is that both population control and resource conservation are essential components of an effective strategy of solving the current woes, but not to worry: the Cobb article explains quite clearly that even a discussion of these is not ever going to happen.