More Energy Giants Form As Consolidation Continues

Elaine Meinel Supkis

The other day, I referred to an old article about hurricanes Rita and Wilma and noted that everyone was in a tizzy over oil prices rising to over $50 a barrel. That was 2 years ago. Today, if it drops below $70 a barrel, everyone rejoices and the Fed says there is a drop in inflation which was little to begin with. This year, we see a continuation of mega-mergers of all energy systems as they swell in size as the price of energy relentlessly rises and this causes more convergence and less and less competition even as we should have spent the last 10 years putting solar panels on all our McMansions instead of building fancy kitchens. Time to talk about energy trends and politics.

From Yahoo.com:

Suez SA and state-owned Gaz de France plan to form a global energy giant that they say will be better placed to compete against players such as Russia's OAO Gazprom.

The outlines of the new company, to be called GDF Suez after the deal is expected to be completed in 2008, was approved by Suez and GDF boards late Sunday after active brokering by President Nicolas Sarkozy.

With a combined market value of $123.3 billion and revenue of $98.7 billion, it will be one of the top three listed utilities worldwide, Gaz de France and Suez said Monday in a joint statement. The deal includes a spin-off of Suez' environment activities which have North American water interests, and would leave the French state as the new company's largest shareholder with a 35 percent stake.
*snip*
The deal gives France a second global player in the politically sensitive energy market, along with Electricite de France, Europe's largest power generator. It comes at a time when Europe is seeking to lessen its dependence on Russian gas and protect energy security.

If all the empires take over all the energy systems then they can push each other around and I get a very strong wiff of WWI here. The desire to be big so one can push around someone else is very strong and usually when people are feeling their oats and think they can muscle someone else, they are tempted to do this. Russia was dismembered after surrendering in the Cold War conflict. The Germans began the process of loosening Russia's grip on Eastern Germany by both paying bribes to remove Russian troops and by negotiating a natural gas pipeline over the loud objections of the American empire.

Starting with the various Middle Eastern wars, Europe has felt very vulnerable to oil insecurities concerning the Middle East. The increasing battle for dominance going on there which deeply involves the US empire in a futile struggle to destroy Islamic resurgence. But as more oil money pours into that sector of the world, the ability to project power struggles over ancient religious conflicts rise, not fall. Let's look for a minute at Europe in 1500: the discovery of the gold hoards in the New World meant loot poured into Europe at a mad rate. Unlike the depressed situation in pre-Columbian Europe, suddenly there was a great surplus of wealth and what did Europe do with it?

Why, they began huge religious wars! I repeat, 'HUGE RELIGIOUS WARS.' These tore apart the maps of Europe, killed massive numbers of people. Unlike the pre-Columbian wars where knights had to physically slay every individual with some degree of effort and risk, after all this gold poured in, the ability to make many cannons and other new weapons systems meant the ability to kill masses of people and to hire masses of mercenaries to run riot all over the place, all of Europe was destabilized! Nearly half of the poor souls in the now defunct Bohemian Kingdom were starved to death or killed. One third of Germany's people especially in the Black Forest region, were killed.

I lived there once and would visit old farms dating back to the 1600's. The families would cheerfully tell me stories of what happened back then. 'And then they came and chopped down all the lime trees and burned them and ate the cattle. Our family hid in the woods with the foxes and the bears and ate berries and mushrooms,' one Bebenhauser family told me.

So we should not be amazed to see the rise in wealth in Muslim lands leading to lethal wars. The Protestant/Catholic wars of post-Columbian Europe should give us a good idea how vicious this can be and probably, how inevitable. The Russian empire, cut out of trade by the sailing ships set out by first, Portugal then Spain and finally, all of Europe, became weaker even as it expanded via incursions into the Ottoman Empire and the various Mongol empires starting with the reconquest of Kiev and the Ukraine. Once Russia dominated control of the very ancient Silk Road, Russia's riches began to climb as they improved transportation and safety via land.

So here we are, on the verge of another global/religious conflict based on trade imbalances and power politics clashing with resource allotments and population pressures. The 1600's conflicts were resolved in Europe and then blew up again with the French and American revolutions. The country most pressed by this was Britain which ended up trading with everyone and stealing as much as possible in the grand tradition of the Vikings who either made business deals or put the town to the torch.

So here we are today, the US empire is going bankrupt and everyone will now see who the next global power will be and I would bet on the Chinese and probably in alliance with other Asians, will be the next up at bat. But they don't have energy. And so there is the possibility that energy producers can contest control of the planet with the Chinese and this means either Russia or the Middle East. The US has considerable energy reserves left so we would still be quite powerful in the future except we foolishly put ourselves very deeply into debt with Asia so whatever we have will end up in their control over time and this is why, out of pure patriotism, I keep talking about controlling energy because this is the only way we can avoid falling into the hands of others.

But this requires us to curb our energy use and to expand our own production for each home which is why, despite the seeming cost, I harp about solar energy on all roofs. This will secure our energy systems somewhat and strengthen our nation and we could have easily done this during the Greenspan Cheap 1% Interest Regime. Our refusal has sealed our fates. The growth of the mega-energy entities has not slowed down but is actually speeding up as the price of energy rises and the race to secure future energy sources and systems rises. The winners in this race will be the world's rulers in the future. The hitch here is this sort of race historically creates the mega-religious wars I mentioned earlier so the Hubbert Oil Peak may be totally warped by the looming Sunni-Shi'a-Zionist struggle over Jerusalem and Mecca (Makkar). Like Europe after the discovery of America, this war can decimate the population in the Middle East and also destroy the downslope of the Hubbert Oil Peak reserves left there since this will be a nuclear war.

The reason this will be a nuclear war is simple: no one disarmed after Russia surrendered to the US. Quite the contrary, more countries have more nukes today than back then! And the Sunni-Shi'a-Zionist wars also will trigger the Muslim-Hindu struggles and this is why atheistic China will probably be the world power when it all ends. If we don't annhilate ourselves. And this does happen. When the Europeans came to the New World, they instantly depopulated it pretty severely. 90% of the natives were eliminated over 200 years time!

I'm sorry about not sounding cheerful but anyone who takes history seriously has to look at these downsides. Europeans are perfectly happy today after utterly destroying themselves not once but several significant times, each time, killing or destroying more than the previous times! For four years in Europe, they sent millions of young and then older and older men to die in these filthy trenches. In WWII, they ran death camps and tried to annihilate various religious and ethnic minorities as well as bombing cities. The Japanese did the same and the US won by doing the same even more so when we dropped bombs that nearly completely annihilated all civilians in two cities, these same nuclear bombs that will wipe out Jerusalem and Makka in the future if we continue this historic course.

This is why the growth of monopolies controlled by governments are frightful. The US doesn't control its energy giants, they control IT. This is why they were so eager to invade Iraq to seize the oil there that was under government controls. This is why we see constant agitation to nuke Iran, kill off most of the people there and our payment for doing this for the Sunni rulers of the oil kingdoms will be, we shall be allowed to steal all the oil there.

Which will be a real trick if this attempt at nuking Iran leads Iran to destroy Makkar and Jerusalem in order to 'cleanse' them. This is why these various struggles for energy dominance coupled with religious madness will be so destructive and why I oppose military action in all these places. The various invasions and schemes are exactly like the ones that preceded the 30 Years War or WWI and WWII. Back to Russia: when they surrendered and we didn't, Russia was ripped apart rapidly and the population began to die due to loss of social services and outright theft of national resources. Under Putin, this came to a screeching halt and Russia has prospered since. The unease this causes Europe is tremendous. They thought they put Russia down for good. But the US going into deep debt with our huge trade deficits and budget deficits caused by us being the only empire on earth for a brief while, has exposed Europe to grave danger from Russia who intends to dominate Europe again.

The madcap solution to Russia's greater and greater control of energy has been 'solved' by the US with a simple plan: put nuclear missiles and antimissile systems right on Russia's front door and then talk wildly of preemptive strikes and the right to nuke nuclear nations! This insanity may have backfired since Europe belately realized after Putin told them outright, they were doomed, that any war launched by the US against Russia would end with the annilation of all of Europe for all eternity and it would be occupied by cockroaches and three headed black dogs.

Now for a look back in time to see how this process is working: From Green Car Congress:

18 December 2006

The Boards of Directors of Norwegian companies Hydro and Statoil have agreed to recommend to their shareholders a merger of Hydro’s oil and gas activities with Statoil, thereby creating the world's largest offshore operator.

The resulting new company will have a combined production of 1.9 million barrels per day in 2007 and proven oil and gas reserves of 6.3 billion barrels of oil equivalents. Hydro will continue as the world’s third-largest integrated aluminium company. Hydro’s hydropower and solar activities will also remain with Hydro.

This is a typical example and multiply it over and over and we see what is going on. This consolidation/merger stuff has been also fuelled by the carry trade from Japan which still has utterly laughable interest rates. The open wound of the carry trade has acted like the gold from the New World acted on Europe: it is a pool of endless money that enables everyone to build up rapid mega-systems. The weakening agent here is the US: all this comes out of our trade deficit with Asia. Ergo: it is a huge desabilization force that is also causing things to become stronger so long as they don't conflict with Asian desires of world dominance but within Asia, China and Japan are in a race for dominance that even extends to the moon itself. Both want to build bases there so they can dominate the earth....a topic I used to lecture on in public many years ago.

The moon is a harsh mistress and She would rule the earth due to the simple fact, She can lob bombs down on us and doing the reverse is much harder due to the harsh reality of the gravitational pool. Also, She has lots of mineral wealth which can be 'dropped' to the earth but then, if we mine the moon too much, it becomes swiss cheese, so to speak, and thus, destabilizes and then what if it falls into our gravitational pool, too? Not to mention other unpleasant things that could happen. We don't know. All I know is, we meddle with this, we better be very cautious. All the molecular mass on earth except for a few space craft, remain here. But we mine the moon, it goes off-surface and away!

From Wikipedia:

Exxon Mobil Corporation or ExxonMobil (NYSE: XOM), a multi-national American corporation and a direct descendant of John D. Rockefeller's Standard Oil company[2], is the largest publicly traded integrated petroleum and natural gas company in the world, formed on November 30, 1999, by the merger of Exxon and Mobil. ExxonMobil is the world's largest company by revenue, at $377.6 billion in its fiscal year of 2006. It is also the largest corporation by market capitalization, at $517.92 billion on July 20, 2007. It is the largest of the six oil supermajors with daily production of 6.5m boe (barrels of oil equivalent). ExxonMobil ranks first in the world in proven oil and gas reserves among corporate oil producers, though it is still eclipsed by several of the largest state petroleum producers.

At the beginning of our present fake boom, the biggest energy companies were merging like crazy. Since the 2000 election was handed over arbitrarily to Bush and the oil gangs, all questions about forming cartels and monopolies has collapsed and they now control our government from within even as they get stronger but this hasn't made America stronger for the simple reason, they must make their money off of Americans so we are the milch kuhs of this organized gang. This is why we are losing economic ground at home and why they encouraged Greenspan to lower interest rates to 1% to boost spending and why all our rulers constantly worry about and demand we spend rather than save.

This makes them richer and more powerful. They installed Bernanke because he promised to helicopter dollars upon them if they chose him as the Fed leader. Then he turns around and refuses to drop interest rates for them! HAHAHA. Love it. But he will, he isn't very strong or maybe he will do a suicide charge and fight them? That would be most amusing. These guys find it much easier to buy each other out and make themselves bigger than most nations if money is super-cheap. This is why they love Japan's sub-1% interest rates.

Exxon/Mobil's merger meant higher prices and so we have had higher prices ever since that day. And this increased their political heft and it shows all over the place, how many candidates at the top talk about breaking up these mega-energy organizations? Only the ones the media ignores, talk about this.

From Oil Voice:

Grove Energy Limited has entered into a definitive Heads of Agreement (HOA) with Virgo Energy Limited and Nido Petroleum Limited (Nido) to merge their UK E&P assets and to subsequently list the combined company on the Alternative Investment Market (AIM) of the London Stock Exchange plc during the first half of 2006. The new London based company will be called Virgo Energy plc (Virgo).

Here is yet another example. The Europeans are seeing a push towards a one-Europe energy consortium that would be in the control of the biggest nations, namely Germany and France. Europe is basically rebuilding the Holy Roman Empire and they figure, if they can do this while still pretending to be individual countries, they can then win a struggle for power with Russia who has actual power of two sorts: energy reserves and nuclear bombs. I still place my bets on Russia winning this struggle.

From Energy Business Review:

28th September 2006

Gazprom's plans to expand downstream into the Italian energy market have again encountered resistance from regulators, with the Italian Antitrust Authority voicing concerns over a cooperation deal with Eni. While such a deal would undoubtedly be beneficial to both Gazprom and its proposed partner Eni, the benefits to consumers are less discernable.

'Content The head of Italy's Antitrust Authority, Antonio Catricala, has voiced fears over the anti-competitive implications of the proposed cooperation between Eni and Gazprom. Mr Catricala has been quoted as saying that, while the agreement would enable a major new operator to enter the Italian market, the cooperation between Gazprom and Eni would mean that competition would not be injected into the market with this new entry, making the deal disadvantageous from a competition perspective.

Note how Putin got two Italian companies to be fronts for his takeover of Russia's energy systems? It is also hilarious to see the Europeans who are madly consolidating their energy systems, accuse Russia of preventing 'competition.' Has competition grown in the US? Nope. It is also consolidating. If the world is worried about competition, this is pure hype. Throughout history, if someone had a trade advantage, they would try to extend it. Capitalism is all about doing this as much as possible. The struggle to gain access to profits is all about politics which is why we see revolutions and wars like clockwork. Europe could set an example to Russia by breaking up their huge energy consortiums. But they are doing the exact opposite.

One rule in life, when facing danger, if one shows fear, the attackers will attack. Europe is obviously very afraid of Russia since Russia is, unlike the US, physically close at hand. Europe can lock out the US (note: they all have trade surpluses with us!) but they can't lock out Russia. Borders are too easily breeched and if they irritate Russia, Russia can retaliate on many fronts. Europe gets no energy from the US but they get much of their energy from Russia, just for example. They have a trade DEFICIT with Russia. Another important point here.

From Japan Times:

Fukui Prefecture hosts 15 nuclear power plants — the largest concentration in Japan — including the Monju plutonium fast-breeder reactor in Tsuruga.
*snip*
Hanging on the wall beside the Monju model are display panels that explain why Japan needs a plutonium reactor. As of 2006, the panels warn, the world had only enough oil for another 40 years, enough natural gas for another 65 years, enough coal for another 155 years, and only enough uranium for conventional nuclear plants to last another 85 years.

"Japan is a poor country in natural resources, importing 99.8 percent of its oil, 96.6 percent of its natural gas, 98.4 percent of its coal and 100 percent of its uranium. Therefore, Monju, a plutonium burning reactor, is necessary because plutonium can be used for thousands of years," the panels say.

What a bleak picture! If there is only 40 years of oil, why are the Japanese building 10 million Toyotas a year? Wouldn't they want to RESTRICT this? And all the hooey about other nations building plutonium plants, wouldn't we be rather worried that one of the earth's most destabilized lands that is criss-crossed by both a million fault lines and dozens of volcanoes, is building plutonium plants everywhere? Eh? The hysteria about Iran is dwarfed by Japan's push to build these things like mad! One plutonium accident and Japan might have to worry about three headed dogs and giant cockroaches or Godzilla, the animators for years have destroyed Japan this way thousands of times. Yet the government continues to push these programs and I sense some strong cultural schizophrenia here.

I don't want people to read this with despair! The solutions are rather simple. Even Japan could do this. For one thing, we must decentralize energy production which is why I am a huge fan of spreading the use of solar energy, just for example. I want to own my own power and control it and be in charge of it. It is more trouble in some ways but very rewarding in the long run. After all, taking charge of one's own fate is better than letting others drive us to doom! And the US is uniquely positioned to take charge in this way! We have the suburban roofs, we have the solar potential in more than half of the nation, all of the Southwest should have had these put on all roofs everywhere for the last 30 years! There should be no houses in California, Arizona, New Mexico, Nevada, Texas or other states, just to name the obvious ones, that shouldn't have required all houses built in the last 30 years to have this!

The cost of housing jumped by 200% during the last 20 years and adding an extra $10,000 to the price for the energy that pays for itself in 10 years, would have NOT killed the real estate market. It would have annoyed developers for about a year. But look at the profits there! Countrywide's criminal officers skimmed over $600 million from their scam and walked away with the loot! Imagine if this money was used to install energy systems instead. I makes me really angry. This is LIFE AND DEATH for our empire.

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Comments

[TL]

Nice, solar makes too much sense the government has to figure out how to squeeze more fees out of consumers. The government stopped giving breaks for hybrid cars too. Usual beauraecratic horseshit, speaches and finger wagging.

.http://www.environmentcalifornia.org/in-the-news/energy/energy/rebate-rule-chills-sales-of-solar

[Elaine Meinel Supkis]

Alas, TL, you are totally right here. Isn't this pathetic.

[Liberal AND Proud]

Isn't everything that is happening now pretty much in line with the predictions of the experts that identified the Hubbert Oil Peak?

Just askin'.

I think it's clear that we are on the downside of the slope, the peak was predicted to have occurred somewhere around 2000 if memory serves.

[Liberal AND Proud]

And while I'm on this kick, I will now be spewing this mantra ad nauseum.

The issue is NOT oil. The issue is the internal combustion engine, which is essentially unchanged since its creation at the turn of the last century.

Alternative fuels are a stop gap, and a poor one at that as most are less efficient, in terms of energy used for production of the fuel, than oil.

The POWERPLANT needs to be replaced. Battery power is inefficient. Solar power is inefficient in terms of its use for long distance travel and transcontinental travel.

We need NEW technology. It's time to think outside the box.

[Canuck]

Well ,well, Exxon Mobil Chairman Rex Tillerson saunters up to Alberta to warn (threaten) Albertan’s away from changing our energy royalty structure. One week prior to the release of the Alberta government’s royalty review report. So nice he’s got our best interests at heart, not wanting to see anything unfortunate might happen if we make the wrong kind of royalty adjustments (upward).

http://www.canada.com/edmontonjournal/
news/cityplus_alberta/
story.html?
id=330e986c-9b02-4158-
91ef-98271247d184

Please note the Good ole Rex from Tex head of one of the largest corporations on the planet states; “I cannot explain to you why we have $70 oil today”! Of course this is a pure admission that Exxon Mobil will not withdraw from the Canadian Energy scene if energy costs stay high regardless of royalty structures. This is a backstopping statement to keep him from looking like a complete idiot, he knows his threats are empty in the face of high energy costs.

http://www.canada.com/edmontonjournal/
news/local/story.html?
id=1f2474a8-cf76-4aca-
8875-9fd36a125531&k=27035

[Elaine Meinel Supkis]

thanks for the update, Canuck!