Energy News

Engdahl Can't Comprehend Hubbert Oil PEAK

Elaine Meinel Supkis

Several readers brought to my attention an article by a big-time writer who claims the whole idea of the Hubbert Oil Peak is bunk. Mr. Engdahl makes a very common and quite stupid mistake: he and a host of others think that Peak Oil is when oil runs out! This is so easy to refute, I wonder how anyone can fail to understand and then I remember how most economists operate: in clueless vapidity. For some reason, people look at words and like the Caterpillar in Alice in Wonderland, decide to append their own definitions, ipso facto. A warning: Peaks are BIG. They are when things are at their most, not their least.

From Engdahl, famous author:

The good news is that panic scenarios about the world running out of oil anytime soon are wrong. The bad news is that the price of oil is going to continue to rise. Peak Oil is not our problem. Politics is. Big Oil wants to sustain high oil prices. Dick Cheney and friends are all too willing to assist.

On a personal note, I’ve researched questions of petroleum, since the first oil shocks of the 1970’s. I was intrigued in 2003 with something called Peak Oil theory. It seemed to explain the otherwise inexplicable decision by Washington to risk all in a military move on Iraq.

Peak Oil advocates, led by former BP geologist Colin Campbell, and Texas banker Matt Simmons, argued that the world faced a new crisis, an end to cheap oil, or Absolute Peak Oil, perhaps by 2012, perhaps by 2007. Oil was supposedly on its last drops. They pointed to our soaring gasoline and oil prices, to the declines in output of North Sea and Alaska and other fields as proof they were right.

Way back when I was very young, I used to lecture about the Hubbert Oil Peak before many people could figure out what on earth this was. I hung out with some very fine geologists at the University of Arizona, for example, and we discussed the new fangled idea of tectonic plate movement and the dynamics of the Hubbert Oil Peak. Over the years, I have been hammered repeatedly by people claiming I am stupid because how can we have a peak when there is more oil than ever before?

DUH! Why on earth do humans think that a peak is a valley? This always puzzles me yet it happens over and over again. Also, making fine points is often pointless since people can't grasp two ideas at once without falling flat on their faces. So it is time to again, review geology and peaks.

The Hubbert Oil Peak hit in America in 1972-1974. We were able to easily pump a lot of oil. From then on, we pumped less and less oil. Very simple, no? This Engdahl person can't understand that the easy oil is gone and the oil is now harder and harder to get and more and more expensive to pump and there is overall, less and less each year. This is now painfully obvious. He talks about all the marginal wells that have been capped as if they are the key to infinite oil. They aren't.

No way would oil companies spend billions to build ocean platforms that are prey to the angry seas and hurricanes if there was tons of oil just waiting to be pumped...on land! The concept of the Peak Oil business is that the easy oil goes first, then it gets harder and harder and more importantly, the finds are smaller and smaller.

For example, the Arctic ocean probably sits on a lot of oil. It hasn't been explored yet for obvious reasons. When it is explored and oil is found, it will be a lot of oil. BUT by then, the Ghawar oil field will probably be pumping mostly sea water that is pumped in. Whatever is found in the Artic will be much more expensive and difficult to extract than the oil in Saudi Arabia. This is the logic of the Hubbert model: the easy oil runs out faster than new fields are found once we hit the peak.

Also, consumption rises while oil pumping begins to fall. This logic is impeccable. There is a simple rule of thumb here: creatures always consume as much as they can and their ability to consume is infinite while the supply of consumables is FINITE. Period. By definition, this earth is a finite entity. There is no nonstop-anything here, this is a closed system except for two things: the sun's energy pours in and of course, asteroids and other extraterrestrial things can come crashing in, too.

When the first OPEC oil crisis hit, it was led by King Faisal who wanted to punish the West for supporting colonial wars in the Holy Land. The US paid a heavy price for this because even though we only imported 5% of our oil, this was a critical 5% we couldn't replace so easily. Nixon decided to force down inflation by basically nationalizing the value of oil pumped in the US. In retaliation, the oil companies slowed down production and we had oil rationing which was very unpoplar.

And we got inflation when the price of oil was released in order to get pumping going again. This scared many Americans for it was a preview of what the world oil VALLEY would look like. I used to make many speeches back then: 'We have a window of opportunity. If we conserve oil and build a sane society that uses energy wisely, we can push the global Hubbert Oil Peak back to well within the 21st century. But our window of opportunity to do this will begin to close in 2000!'

Note that the window is beginning to slam shut on our fingers. Instead of understanding this obvious lesson, the US went oil-mad when Russia began to release its vast oil reserves to an eager West who abused this by using oil like it was water. Our latest building boom has been focused mostly on building houses that have almost no energy systems of any sort that aren't the wasteful, older systems using electricity, oil, coal, etc. Built where there was little to no public transportation, much of the housing developments were energy gluttons. Now we will be stuck with the window of opportunity closing on us while the windows on our houses let in freezing air or broiling hot summer heat.

There is energy in our earth! Aside from coal, oil or uranium. There is wood and other plant life, for example, I heat with wood from my forest. But aside from that, there is energy one can get by running pipes into the deeper earth, down 100' for example, and using a pump system and a compressor, the heat or cooling differential in the earth can run our climate control systems. Not that we need this so badly all the time, I lived in a tent on a mountain for ten years. The desire for a controlled environment is a fancy of the 20th century. One can live quite well without it, thank you.

And indeed, houses should be built to run with minimal energy! My basement is very cool in summer. I pump the air upstairs using fans! And in winter, if the sun shines, my solar heating rooms heat the whole building to well above 70 degrees when it is below zero outside! All one has to do is build correctly!

But back to the abiotic oil business: the earth does have energy within itself, proof of this is tectonic plate movements and volcanic activity. This is a dynamic planet! Thanks to the great oceans, the huge moon relative to our own size, the proximity of the sun, this planet is quite active and generates energetic systems, look at any compass or look at the Van Allen Belt or anything to do with our magnetic poles! The atmosphere is energetic----especially when the sun is energetic! Anyone living on the poles knows the amazing lights of the aurora borealis displays are quite electrical. Hell, lightning is the embodiment of energy! Zap!

Ditto, chemistry! And our delightful planet is filled with energy systems from the smallest living creature to the greatest oceans! From far into space all the way down to the core, the earth is dynamic, alive and full of energy!

And some of this we can tap. But the kicker here is....how well? How expensive? How safe? And how many other uses are there?

Way, way long ago, I said we are burning our great resource, oil! It can be used for many important processes and things and we are BURNING IT! Future generations will curse us for this. We can mine the moon, utilize Mars, Venus and the asteroids but NONE OF THEM will have oil! The biological goo is the remains of an incredible number of living things, mostly swamp creatures, that died for eons and were covered by salt or limestone which are trillions of dead water living creatures! There is no way around this.

The Engdahl guy takes the stories of deep oil put out by the Russians line, hook and sinker. This is because he wants to believe in Santa Claus. We all want Santa Claus. But we must remember, change the letters and 'Santa' becomes 'Satan.'

The story about the Caspian Sea area is intresting to me. I have written about it in the past. The Caspian is the remants of a much bigger sea like the Mediterranean. But Africa and India both have collided with the collection of land masses that are Europe and Asia. The Mediterranean Sea is being crushed between these two millstones, Africa and Europe. The Caspian has a dual process at work: it is shrinking and the sea is rising but whereever land rises, mountains form and like a cake that rises in an oven and then suddenly falls in the center, the land behind these rising mountains collapses. For example, the Central Valleys of both Chile and California are much lower than the mountains on the shorelines or 100 miles inland! These deep valleys between mountains are all over the place: Tibet, for example, the plateau is much lower than the surrounding mountains.

In the Caspian area, the earth's crust is disarranged and since oil is liquid, if there are fissures and such, oil can move from one place to another. Scientists in the West have not taken the claims of the Russians very seriously since they have virtually no geological information to back up their contention that the oil they find in the lower levels is abiotic rather than displaced oil.

We also know that the earth is warmer, the lower one goes. Oil can't exist where it is too hot for oil. Quite simply. Gas trapped in various rock formations also has an organic origin. The fact is, one can't drill all over kingdom come and get oil or something resembling oil. The energy in the earth can be tapped just like we get energy from hot springs, for example. But even these run out! The act of pumping them alters their ecological balance and they cease to operate efficiently or even shut down.

The dream and desire for infinite energy and for infinite anything always makes me rather ill. There should be some sort of limit! Infinity isn't our friend.

From the Gulf Daily News:

TEHRAN: Iran yesterday expressed impatience with India over the finalising of a multi-billion dollar gas pipeline deal via Pakistan, warning that it could go ahead with Pakistan alone if India procrastinated.

Caretaker Oil Minister Gholam Hossein Nozari said New Delhi and Islamabad were still in discussions over the payment of transit fees by India to Pakistan for Iranian gas from the so-called "peace pipeline".

He said Pakistani officials were certain to come to Iran next week for talks to finalise the project but the attendance of Indian representatives was still unconfirmed.

"Our preference is to have a tripartite negotiation. (But) the trend is moving faster with the Pakistanis," Nozari said.

Last week, the guy running France startled the rest of the earth when he openly declared war on Iran. Over nukes, no less. This outrageous verbal assault was reprimanded by the head of the UN nuclear commission. France has a long history of using nukes, blowing up islands in the Pacific just like England and the US as well as Russia and China set off quite a few nuclear bombs which are probably partially responsible for the cancer epidemic that still rages.

France has just a long history of invading Muslim and other lands as the other European empires. As we approach the global Hubbert Oil Peak, I don't see the US or France or anyone seeking abiotic oil. They are trying to find some way of stealing oil closer to real ooze, not fantasy stuff. Iran is trying to do business and this irritates the Sunnis as well as the Zionists, the US imperialists, European powers and just about anyone and everyone.

Iran's inability to do business will not end the way we want. They know that Saudi Arabia is pumping oil like crazy to keep the present status quo going in the West and this isn't working anymore because Saudi Arabia is at its own Hubbert Oil Peak! Indonesia passed its peak back in 1985. Mexico reached their peak about two years ago.

And the news that rebels blew up the pipelines from the Cantrell Fields barely made the news here! In Nigeria, this happens like clockwork. In Iraq, most of our energy is misspent trying to protect the oil and the pipelines.

For the last three years, Saudi Arabia announces they will increase oil pumping and it goes down. When they boasted they could make 12 million barrels appear, the amount dropped to 10 million. When they said they could pump 10 million, the amount fell to 9 million. The situation there is top secret but many observers believe they are just past peak. Remember: peak means there is the MOST oil, not the least.

We already know the North Sea fields are way past peak and their collapse has been faster than most every field so far, a very dangerous sign. Due to all systems needing oil, the downslope of the Hubbert Peak will be steeper than the upslope.

From the Independent:

Lord Oxburgh, the former chairman of Shell, has issued a stark warning that the price of oil could hit $150 per barrel, with oil production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the depletion of supplies, and warned: "We may be sleepwalking into a problem which is actually going to be very serious and it may be too late to do anything about it by the time we are fully aware."

In an interview with The Independent on Sunday ahead of his address to the Association for the Study of Peak Oil in Ireland this week, Lord Oxburgh, one of the most respected names in the energy industry, said a rapid increase in the price of oil was inevitable as demand continued to outstrip supply. He said: "We can probably go on extracting oil from the ground for a very long time, but it is going to get very expensive indeed.

"And once you see oil prices in excess of $100 or $150 a barrel, the alternatives simply become more attractive on price grounds if on no others."

If we kill the dollar, even if oil is still flowing like crazy, we will be paying $150 a barrel. And the logic of cost effectiveness says, retrofitting our culture to use other energy systems becomes harder and harder and more and more expensive the longer we wait! The time to act was 7 years ago when the government could have chosen the Other Way: instead of wars for oil, if we used all that trillions of war dollars and house beautification dollars and spent them on energy systems like solar cells on every roof, we would be sittting pretty today instead of deep in debt to the world, our systems heading towards future collapse, our money totally misspent.

The war in Iraq has cost us our own energy independence. How are we going to do this if we are deep in debt? Where will the money come from for this? Who can afford this? All of this is part of the trap we are in today. We wasted everything on fun and games from Satanic Santa. And he said, all we had to do was march into Iraq and suck up all that oil. And now he is whispering for us to invade Iran. And I will note here that Greenspan even admitted we invaded Iraq illegally, seeking oil.

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Saudi Arabia Dreams Of Pumping Infinite Oil

Elaine Meinel Supkis

World oil prices rise ever higher and the fiction of no inflation continues to roll as the inevitable sales bring down the price of nonessentials. Hello, good old stagflation! Stagflation isn't when bucks go into rut but when the bucks fall into a rut. (Joke) Terrorism in Mexico, OPEC has to let Saudi Arabia sell more oil because they want to crush Iran Kitty by cutting the cat's return on fuel but there is an irritable bear in Russia who just might make yet another squeeze play in the energy pricing game?

From Forbes:

Six explosions ripped apart pipelines for Mexico's state oil monopoly early Monday, the company said. The blasts were believed to be sabotage and 12,000 people were evacuated afterward.

A small, left-wing guerrilla group claimed to have attacked a major gas pipeline for the Mexican state oil monopoly Petroleos Mexicanos, or Pemex, in July and at the time at least a dozen major companies were forced to suspend or scale back operations.

Pemex issued a statement saying it believed Monday's explosions were also sabotage. Government officials said 12,000 people were evacuated after the blasts.

The smaller the political guerilla group, the harder to stop. Traditional insurrectionists operate in groups of three or like the 9/11 guys, in overlapping groups of three headed by Atta reporting to who knows... the fact that this operation was hatched and grown in the one place on earth with more retired and present CIA operatives outside of Langley should alert us to some connections here that we can't prove except, geeze, that part of Florida is 100% Bush territory! More than Texas! Where the oil is, by the way.

The US has no terrorists attacking our oil facilities but we don't control all the people living around oil as we can see in Iraq, we have precious little control over anything oily or watery. The US helped the ruling elites retain control of the Cantrell oil fields despite obvious signs the elections there were as fake as our own and as corrupt. Now, the opposition isn't resting at home like here, in Mexico, the movers and shakers will move about like shadows in the dark and shake everyone up, big time. Their chances of disrupting things badly is fairly high. This is due to the difficulty of penetrating organizations of three or five people. The government will probably kill more teachers and filmakers in a blundering attempt at scaring these obviously well-armed and well-trained fighters who probably learned things from the masters over in the Middle East who, on a daily basis, show everyone how to deal with the oil-hungry imperialists.

Each day that we squat in Iraq, getting blown away, the oil shutting down then spurting, the oil pumpers in the region as frightened as fat rabbits, as the individuals doing this mock the US via bin Laden and his terrorist news service online, as Nigeria struggles to stop insurrectionists from wrecking havoc there, oil prices soar. And the goal of all these people messing with our oil spider web are doing this in order to drive up the price of oil. Iran, for example, is perfectly happy to see the price of oil go up and up. The US has tried every trick in the book and Israel, every threat possible including nuclear war, to stop Iran from interfering with our illicit oil extraction in Iraq. But Iran doesn't have to do much at all, the people interfering with us are people who also want us good and dead: other Iraqis irritated that we are handing over the prize to Iran when we leave. Yet they can't let us stay since our sole reason to be there is to steal all the oil and then drop the place like Haiti, to die or starve to death while we totter off, rubbing our fat bellies.

Mexico's oil flows north and the Mexican people see few benefits from this. One thing they did get was the right to illegally enter the US and do whatever they wanted. But this is being withdrawn and so they are back to square one: the US is buying their one-time resource that is irreplacable and giving them increasingly weaker dollars in return.

Here is the list of the top 20 nations and their FOREX reserves:

I love to check to see who is doing what with their FOREX reserves for this is a clue to what might happen next not only with oil but other things. First off, note how energy-seller, Russia, has amassed an awesome reserve that keeps the euro strong since he is holding euros, not dollars, in vast amounts. The Europeans may want their euros to stay strong against Russia because, as with the weak dollar, they can buy energy super-cheap. But the downside, their export sales are turning nasty, fast, is one they just are coming to grips with this last 2 months, quite belatedly, I might add.

Mexico is the other energy exporter that has a big FOREX reserve even though it is dwarfed by Russia's, Japan's and obviously the super-giant, China. Incidently, Iran's reserves are nearly as big as the mighty USA's reserves. I see so many hideous problems with all this, it troubles my sleep. Oil pumpers Libya, Nigeria and Norway have nearly identical FOREX reserves as Iran. Their FOREX holdings are the same size as all of Europe's joint holdings. I will note here that both the USA and Europe dumped $500, maybe to $1 trillion dollars into the banking system without drawing a pfenning out of their own FOREX reserves which are supposed to protect currencies from runs on their banks, etc. I smell a big rat here, namely, someone who used to rule the world or who still thinks they rule the world, cheating.

Now we come the the big OPEC oil sheikhdoms and kingdoms and CIAdoms. And at the top of the list, Venezuela. Venezuela has lower standing than Mexico, less than 1/3rd of Mexico's FOREX reserves. Do note, of course, bombs are going off in Mexico and teachers are being shot, etc. Rough monetarist policies at work. The three big oil pumping OPEC kingdoms together have the reserves of Mexico.

From Bloomberg:

Crude oil rose to a record close of $78.23 a barrel in New York on speculation that OPEC's agreement to increase production by 500,000 barrels a day will be insufficient to meet strengthening demand.

``We are going to need more than 500,000 barrels to meet rising demand,'' said Tom Bentz, a broker at BNP Paribas in New York. ``We are also up on speculation that the interest rates will be cut, which would help the economy and lead to higher demand for oil.''

OPEC doesn't control oil markets anymore thanks to Russia. Saudi Arabia may choose to pump themselves dry faster, this is a foolish thing but then, the king is a very corrupt creature. His plans for the future are for them to all move to Europe or other climes after destroying their home base. They really can't stand it there, anyway. I don't think most of them live there much, anymore, except they have to have some presence or they will lose control of the money stream and that is all that matters to them. This bounty must flow and they are most anxious to set up some sort of financial base in Europe and America so they can shed their identity and become fully cosmopolitan and do as they wish which is to live with no rules or restrictions. This is why they killed Faisal. He was very strict. And he worried about the oil being pumped out too fast.

Unlike Bin Laden, they want the West to be rich or rather, for their enterprises in the West to make them richer and if this means pumping Saudi Arabia dry in 15 years, they will do this. The whole world economic system is based increasingly on exploiting things to the maximum for personal gain, not planning for the far future for national benefit. The Saudi grip of reality is not very good, I might add. If Iran doesn't pump dry but instead, invests internally, they will be much stronger in 15 years than Saudi Arabia. If the US goes bankrupt, Iran doesn't care if it is selling oil to China, Japan or Europe. They know they must sell enough oil to build a powerful deterrent force at home because their Sunni neighbors are prone to attack them.

But in the long run, if they withhold oil while Saudi Arabia pumps like mad, they win.

From Bloomberg:

Crude oil traded near a record in New York on speculation increased OPEC production won't build sufficient global stockpiles for the fourth-quarter demand peak.

Oil rose yesterday after the Organization of Petroleum Exporting Countries, producer of 40 percent of the world's oil, said it will pump an extra 500,000 barrels a day starting in November. Prices also gained on speculation an Energy Department report today will show oil inventories in the U.S., the world's largest consumer, fell for the ninth week in 10.

What is going on? Normally, the US has to prepare enough oil reserves for old man winter. The Russians know victory comes to them when they trust this same old man. Winter, I assure people in the south, can be very challenging here in the north! Many people heat their houses with oil. I use firewood because I have a forest available. And meat on the hoof, we have one big, big buck here this fall and I watch him every morning. Along with the wild turkeys. Back to the oil: we use more than we produce on every level. And our trade deficit depends on oil being cheap and the Saudis have a lot of money invested on Wall Street and it irritates them to see it go down. Iran has no money invested on Wall Street so they want it to go down and I detect a similar situation to the Japan/China currency games being played in Asia, wrecking monetary matters in the US and Europe. Namely, everyone's tit for tat games are destabilizing the world's financial systems which are very vulnerable due to the central banks playing inflation number games and interest rate magic games designed to make money appear out of thin air.

These sorts of situations always end up with sudden direct confrontations at sword's point. And the US has been agitating for exactly this, with Iran.

Another thing wrong with today's stories about the king of Saudi Arabia thwarting bin Laden by pumping lots and lots of extra oil: this story appears like clockwork! Just three months ago, the fat little king squeaked he would flood the world's oil markets to punish Iran kitty! And the cat laughed and dared him to try. And then what happened? Did world oil prices fall fast? No?

They went up! This is simple: there isn't any extra 500,000 barrels of oil in Saudi oil fields to pump out on a daily basis! It is all fantasy. I begin to suspect the old king is playing a bluffing game. I notice someone is selling on Wall Street and I bet anything that the various financial houses owned by these Saudis are selling while the king talks about cheaper oil which sends the market soaring as fools who bought shares in Pirate LLP stocks rush to buy what the king is selling! Seriously, he knows how the market works. So before everyone rushes to get a new Hummer, just remember: PEOPLE LIE. And they make fake moves! And they cheat outsiders. And the Saudis hate us, even the ones pretending to love us, hate us. So we should treat this news as mostly feed for the geese that will be eaten by the wolves.

Bloomberg:

Saudi Arabia persuaded OPEC members to increase production for the first time in a year, seeking to reduce the record price of oil, over the objections of Iran, Qatar, Venezuela, Libya and Algeria.

Saudi Arabia, the group's biggest exporter, wanted to boost supplies after crude prices gained 28 percent this year to $78 a barrel, said Iraqi Oil Minister Hussain al-Shahristani. The 500,000 barrel-a-day increase will be on top of a current quota of 25.8 million barrels a day, according to Kuwait's acting oil minister, Mohammed Abdullah al-Aleem.

As recently as last week, most ministers from the 12-member Organization of Petroleum Exporting Countries said there would be no change to quotas during meetings in Vienna that concluded yesterday. Supplies were sufficient to meet demand, the OPEC officials said.

This story is just to show the permutations here. The Iraqi oil chief who is a US puppet has assured us, this new oil will flow like mother's milk. And the Saudis want us in Iraq because the minute we leave, they will be destroyed by the Shi'ites who will overrun them. And of course, like Japan, they must also pretend to be protecting our economy as they destroy it. We should figure this out some day when it dawns on us, our buddies are our worst enemies. Friends who push you off a cliff aren't friends.

Algerian Oil Minister Chakib Khelil said yesterday that OPEC should be wary of repeating the ``wrong decision'' it took in late 1997 at a meeting in Jakarta, when it boosted output just before an Asian economic crisis curbed oil demand, leading to a price slump to $10 a barrel.

That was PRE-PUTIN!! Oil didn't fall because of OPEC, it fell because Yeltsin allowed the oil to flow like mad out of Russia no matter what. Putin took care of this. There will be no flood of cheap, easy oil, trust me, again. Unlike the various oil kingdoms, Russia is not just a big producer but is also a miltary power as well as other big things like 'empire' big. And unlike Saudi Arabia, Russia has many friends and allies who are either non-OPEC, opposed to OPEC or are in OPEC but are pissed about the Saudis using OPEC to feather their US/UK nests.

Venezuela will make more money per barrel if they coordinate their pumping with Russia. Any excess from the dying Ghawar fields will fail in the mission of lowering prices if the other three big producers cut their production. For they want 'x' # of $ in total so if they keep up the price, cutting production won't matter too much if they also have industry which Russia certainly has. This ends up being 'money in the bank' as future oil production while the Ghawar fields suddenly collapse from too-fast pumping.

From Rian.Russia:

TEHRAN, September 11 (RIA Novosti) -Iranian Foreign Minister Manouchehr Mottaki will arrive in Moscow Tuesday to attend a session of the Iran-Russia Joint Economic Commission, the Iranian agency IRNA said.

Mottaki is expected to meet with the Russian Prime Minister, Mikhail Fradkov, the speaker of the State Duma, Boris Gryzlov, and the Director of the Federal Atomic Energy Agency (Rosatom), Sergei Kiriyenko.

The officials will also discuss regional issues and the summit of the Caspian Sea region nations in Tehran to be held mid-October.

See? They are coordinating their response. As I fully expected. And this is the problem for the US: we can't just shove Mexico and Saudi Arabia to feed our fantastical appetite for more and more energy. They can't support us anymore than Japan can support our banking needs. We must do business with China and Russia and obviously, Venezuela. And we don't want to do it, we want to rule them. This lunatic desire to have all things our own way is very childish and dangerous.

From Xinhua:

China will vigorously promote energy conservation and emissions reduction to tackle climate change and promote sustainable development, Vice Premier Zeng Peiyan said on Tuesday.

"In order to ease the conflict between economic development and environmental protection, China will stick to the concept of human-oriented and scientific development," Zeng told the opening ceremony of an international forum of Nobel laureates and world-renowned economists.

And what if China finally begins their long-planned (again, since 1980) push to have 50% of their energy come from wind and solar? They have been intent on this for a long time and they knew they had to do other things first, I told them, 'Use the cheap oil energy but plan to begin replacing it by 2010.' I told the US, 'The window of opportunity will begin to close on our fingers after 2000 and before 2010!'

And here we are, wasting our time, building houses in inappropriate places with inappropriate architecture.

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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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