Spiegel Online International reports A confidential German army study, warning of a looming oil crisis which could have dramatic political and economic consequences, has been leaked. The study – a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military – depicts the consequences of an irreversible depletion of raw materials.

According to Spiegel Online, the report concludes there is “some probability that peak oil will occur around the year 2010 and that the impact on security is expected to be felt 15 to 30 years later”. The study warns of:

[S]hifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

The article provides the following summary of the report’s main points:

• Oil will determine power: The Bundeswehr Transformation Center writes that oil will become one decisive factor in determining the new landscape of international relations: “The relative importance of the oil producing nations in the international system is growing. These nations are using the advantages resulting from this to expand the scope of their domestic and foreign policies and establish themselves as a new or resurgent regional, or in some cases even global leading power.”
• Increasing importance of oil exporters: For importers of oil more competition for resources will mean an increase in the number of nations competing for favor with oil producing nations. For the latter this opens up a window of opportunity which can be used to implement political, economic or ideological aims. As this window of time will only be open for a limited period, “this could result in a more aggressive assertion of national interests on the part of the oil producing nations.”
• Politics in place of the market: The Bundeswehr Transformation Center expects that a supply crisis would roll back the liberalization of the energy market. “The proportion of oil traded on the global, freely accessible oil market will diminish as more oil is traded through bi-national contracts,” the study states. In the long run, the study goes on, the global oil market will only be able to follow the laws of the free market in a restricted way. “Bilateral, conditioned supply agreements and privileged partnerships, such as those seen prior to the oil crises of the seventies, will once again come to the fore.”
• Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. “Shortages in the supply of vital goods could arise” as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95% of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. “In the medium term the global economic system and every market-oriented national economy would collapse.”
• Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a “partial or complete failure of markets,” says the study. “A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis.”
• Global chain reaction: “A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil,” says the study. “It is likely that a large number of states will not be in a position to make the necessary investments in time,” or with “sufficient magnitude.” If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it’s so tightly integrated into the global economy.
• Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could comprehend the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government.” Fragmentation of the affected population is likely and could “in extreme cases lead to open conflict.”

The study, Peak Oil: Sicherheitspolitische Implikationen knapper Ressourcen, is available here (unfortunately in German). Robert Rapier has posted a translation of the major points in the report at his R Squared Energy Blog.

China has overtaken the United States as the world’s largest consumer of energy, according to data from Paris-based International Energy Agency. The IEA said China consumed the equivalent of 2.25 billion tons of oil last year, slightly above U.S. consumption of 2.17 billion tons. The measure includes all types of energy: oil, nuclear, coal, natural gas and renewable energy sources.

This chart is posted at The Daily Reckoning:

As this chart posted at The Daily Reckoning shows, China has a long way to go to catch up with U.S. per capita energy consumption:

40% of the world’s population – China and India – uses two barrels of oil per person per day. In the US, we use 25.

China dismissed the IEA’s analysis, saying the IEA data on China’s energy use is unreliable. China’s National Bureau of Statistics said in a report in February that China’s energy consumption last year stood at 3.1 billion tons of standard coal equivalent, or 2.132 billion tons of oil equivalent. Even by China’s reckoning, China is fast approaching U.S. energy consumption levels.

In June, China consumed approximately 9.4 million barrels each and every day. Of this total, they imported 5.44 million barrels. Between them, China and India together now consume about 28 million barrels-per-day, nearly 33% of the world total.

But while China’s oil consumption is rising and China is busy locking up future oil supplies around the world, U.S. oil consumption is declining – and improved efficiency has nothing to do with it. Oil consumption has likely peaked in the United States because our economy is trashed and likely to remain so. In 2007, the last year before the crash, American oil consumption often exceeded 21 million barrels per day. Those days are over. U.S. consumption is now bouncing around 19 mbd, a decline of ~10%.

Andrew Rivken at the New York Times asks, is last year’s drop in U.S. CO2 emissions a blip or a trend?

According to the EIA report U.S. Carbon Dioxide Emissions in 2009: A Retrospective Review, U.S. energy-related carbon dioxide emissions fell by 7.0% last year. The downturn of the economy was responsible for only 2.4% of that reduction.

Population, per capita GDP, energy intensity of the economy, and carbon intensity of the energy supply all contribute to emissions. The only factor that increased in 2009 was population, by 0.9%. The remaining three factors – GDP, energy intensity, and carbon intensity – combined in roughly equal proportions to cause emissions to fall by 7.0%

The financial crisis hit the industrial sector of the economy the hardest, and energy usage by industry correspondingly fell the most – by 9.9%. Output from energy-intensive industries such as primary metals (-33.9%) and nonmetallic minerals (-17.4%) fell much faster than total industrial production, reflecting the fact that we’re outsourcing such production at the same time the service sector has been growing relative to the industrial sector of the U.S. economy. Also, carbon intensity fell due to fuel switching as the price of coal rose 6.8% from 2008 to 2009 while the comparable price of natural gas fell 48% on a per Btu basis.

But where CO₂ emissions occur doesn’t matter to the climate system. The fact that U.S. emissions (or those of other developed nations) are falling doesn’t matter much if those emissions are merely being “exported” elsewhere, primarily to China. And we’re exporting more than industrial production – we’re exporting energy and carbon intensity, as well. The result? China has now overtaken the U.S. to become the world’s biggest emitter of greenhouse gases – and shows no sign of easing off. Coal is the basis of the Chinese economy, fueling over 80% of electricity generation. China’s already-enormous coal consumption – now three times U.S. consumption – is still growing, for example at an astonishing rate 28.1% from first quarter 2009 to first quarter 2010.

Even if falling U.S. emissions are a trend and not just a recession-related blip, falling U.S. emissions mean nothing if global emissions continue to rise.

As Gail the Actuary points out at The Oil Drum, what can’t happen, won’t:

Combine unprecedented consumption levels with furious growth rates and you quickly arrive at absurdities and impossibilities. As in, it won’t happen. The wheels will fall off the wagon first.

Reducing emissions will require reducing the production of “stuff” – and not only in the U.S., but also around the world. Global economic shrinkage is the only way out of our climate predicament, and our current focus on economic growth will have to be replaced by concern with economic justice.

Limited supplies of fossil fuels mean that “economic growth” as we know it will come to an end, sooner or later, whether we like it or not. The question that remains to be answered is, before the wheels do come off, will we have already set the world on a path to unstoppable warming? Or will we accept the inevitable and act in time to save the ecosystem that sustains us?

A recent post pointed out our actions belied any intention to actually do anything about global warming – we’re not really serious. Here’s another example.

First, Bloomberg reports Chinese president’s special envoy Xie Zhenhua vowing to “vigorously” fight “world scale climate destruction”:

The scale of economic destruction would be equivalent to that of the two world wars and the Great Depression combined” if global temperatures rise by 3 degrees (5.4 Fahrenheit) to 4 degrees Celsius, Xie said. “Human beings and the Earth cannot afford such disasters.

On the very same day, China Daily reports a huge jump in Chinese coal production:

China’s coal output grew 28.1 percent year-on-year to well over 751 million tons in the first quarter, the National Bureau of Statistics said Thursday. . . .

The report estimates China’s total coal production capacity has exceeded 3.6 billion tons.

Channeling Groucho Marx:  who are you to going to believe, Xie or your lying eyes?

Developed countries are “outsourcing” more than a third of their carbon emissions associated with products and services to other countries, according to a new study by scientists at the Carnegie Institution for Science. To be meaningful, regional climate policy thus needs to take into account emissions embodied in trade, not just domestic emissions.

This map shows the flow of carbon emissions embodied in trade among the major exporting and importing countries. Net exporting countries are in blue and net importers in red. China is by far the largest exporter of carbon dioxide emissions. Arrows indicate direction and magnitude of flow; numbers are megatonnes. (Steven Davis/Carnegie Institution for Science)

The study finds that, per person, about 2.5 tons of carbon dioxide are consumed in the U.S. but produced somewhere else. The United States is both a major importer and a major exporter of emissions embodied in trade. The net result is that the U.S. outsources about 11% of total consumption-based emissions, primarily to the developing world.

Says co-author Ken Caldeira, a researcher in the Carnegie Institution’s Department of Global Ecology:

Instead of looking at carbon dioxide emissions only in terms of what is released inside our borders, we also looked at the amount of carbon dioxide released during the production of the things that we consume.

Caldeira and lead author Steven Davis, also at Carnegie, used published trade data from 2004 to create a global model of the flow of products across 57 industry sectors and 113 countries or regions. By allocating carbon emissions to particular products and sources, the researchers were able to calculate the net emissions “imported” or “exported” by specific countries.

For Europeans, the figure can exceed four tons per person. In Switzerland and several other small countries, outsourced emissions exceeded the amount of carbon dioxide emitted within national borders. Most of these emissions are outsourced to developing countries, especially China.

Davis explains:

Just like the electricity that you use in your home probably causes CO2 emissions at a coal-burning power plant somewhere else, we found that the products imported by the developed countries of western Europe, Japan, and the United States cause substantial emissions in other countries, especially China. On the flip side, nearly a quarter of the emissions produced in China are ultimately exported.

Where CO2 emissions occur doesn’t matter to the climate system. Effective policy must have global scope. To the extent that constraints on developing countries’ emissions are the major impediment to effective international climate policy, allocating responsibility for some portion of these emissions to final consumers elsewhere may represent an opportunity for compromise.

The report is published online in the March 8, 2010 Proceedings of the National Academy of Sciences.

The U.S. posted its biggest-ever decline in CO2 emissions from fossil fuels in 2009, according to the Energy Information Administration (EIA). But the reductions are not expected to continue:

CO2 emissions from fossil fuels fell by an estimated 6.3 percent in 2009. Emissions from coal led the drop in 2009 CO2 emissions, falling by nearly 11 percent. Declines in energy consumption in the industrial sector (a result of the weak economy) and changes in electricity generation sources are the primary reasons for the decline in CO2 emissions (U.S. Carbon Dioxide Emissions Growth Chart). Looking forward, projected improvements in the economy contribute to an expected 1.5-percent increase in CO2 emissions in 2010. Increased use of coal in the electric-power sector, and continued economic growth, combined with the expansion of travel-related petroleum consumption, lead to a 1.3-percent increase in CO2 emissions in 2011. However, even with increases in 2010 and 2011, projected CO2 emissions in 2011 are lower than annual emissions from 1999 through 2008.

The drop in emissions in 2009 was the biggest since data collection began in 1949. The Great Recession was primarily responsible, as U.S. real gross domestic product dropped 2.4% in 2009, in the biggest decline since 1946. Emissions dropped 5.8% in 2008.

It’s hard enough to imagine the U.S. and other developed nations voluntarily sacrificing economic growth, much less embracing voluntary frugality. Can you even conceive that China and India would voluntarily give up their ambitions to join the developed world? The entire world has joined in a suicide pact.

It’s beginning to look like the only thing that will save humans and other living things from the ravages of global warming is global economic collapse.

Stuart Staniford at Early Warning has posted some revealing graphs showing past carbon emissions – and projected future carbon emissions from China.

First, a history of carbon emissions. Notice emissions didn’t really start to take off until the 1950s.

Next, a closer look at emissions since 1965, broken out by major contributors.

Future Chinese emissions make doubtful any prospect of avoiding dangerous or even catastrophic global warming, whether or not the Chinese economy continues along its current growth path.

Exactly how is the world going to achieve 20% cuts (from 1990 levels) by 2020, much less 80% by 2050? Copenhagen sure doesn’t leave much room for optimism.

Amanda Gelder has a great interview with Jeremy Rifkin at Culturelab. What I find most intriguing are the connections Rifken draws among psychology, politics, and economics. We find ourselves in a pickle of historic proportions at the moment at least in part because of errors in thinking about these things.

I’ll try to pull together a couple of threads to focus on economic thinking and its relationship to the global crisis we face:

The Enlightenment view is that human beings are rational, detached agents that pursue our own self-interests and our nation states reflect that view. . .

A lot of interesting new discoveries in evolutionary biology, neuroscience, child development, anthropology and more suggest that human nature might not be what Enlightenment philosophers suggested. For instance, the discovery of mirror neurons suggests that we are not wired for autonomy or utility but for empathic distress; we are a social species.

* * *

Geopolitics is an extension of the Enlightenment view of human nature, the idea that we pursue our utilitarian pleasures and individual self-interests. In geopolitics, the nation-state becomes a macro view of that. Nations deal with nations by being rational, detached and calculating, pursuing self-interests, excercising power and acquiring more capital and wealth. That’s why Copenhagen failed. The world leaders weren’t thinking biosphere, they were thinking geopolitics. Everyone was looking out for their nation’s self-interest.

* * *

A lot of business people would say that you can’t be empathic in the market. But the market is a secondary institution–it’s an extension of culture. The real invisible hand of the market is trust, which is the result of empathic engagement. The only way you can have a market is if you have a shared narrative. The market is not a utilitarian frame of reference, it only exists by the social trust that allows people to engage in anonymous settings and believe that their engagements will be honored. When that trust fails, markets collapse and that’s what is happening now.

Rifken thinks the new world of distributed knowledge and distributed energy means we’ve moving from Homo sapien to Homo empathicus. His vision is attractive. I wish I could share his optimism. Still, we too often forget that philosophy does not live just in acedemia – it has real world implications. The “market” we have come to deify today is really nothing more than a myth, a powerful one that has turned destructive and threatens to consume civilization itself.

Rifkin has just published a new 600-page book, The Empathic Civilization: The Race to Global Consciousness in a World in Crisis, in which he expands on the ideas explored in the interview. I recall in my college days (note we were flower children of the 60s) reading books about evolving human consciousness.  Pierre Teilhard de Chardin’s  The Phenomenon of Man. Lancelot Law Whyte’s The Next Development in Man. Remember Charles Reich’s The Greening of America? Answer: not without some embarrassment.

So count me skeptical. My remaining aspirations are much less ambitious than forging a new human consciousness, rather just to eat well and live warmly in an increasingly uncertain world.

Osama bin Laden in a new tape blames the industrialized states and the U.S. in particular for causing climate change:

This is a message to the whole world about those responsible for climate change and its repercussions – whether intentionally or unintentionally - and about the action we must take.  Speaking about climate change is not a matter of intellectual luxury - the phenomenon is an actual fact.

Bin Laden gives European nations a bit of credit for signing the Kyoto Protocol and agreeing “to curb the emission of harmful gases” but puts the finger on Bush and global corporations:

George Bush junior, preceded by [the US] congress, dismissed the agreement to placate giant corporations. And they are themselves standing behind speculation, monopoly and soaring living costs. They are also behind ‘globalisation and its tragic implications’. And whenever the perpetrators are found guilty, the heads of state rush to rescue them using public money.

Bin Laden calls for targeting the U.S. economy in retribution by boycotting American products and ending dollar hegemony:

They are the true terrorists and therefore we should refrain from dealing in the US dollar and should try to get rid of this currency as early as possible. I am certain that such actions will have grave repercussions and huge impact.

It’s hard to argue with the facts. Here’s a chart of cumulative emissions from 1900 through 2002.

The fact that Chinese emissions are growing fast and have now overtaken U.S. emissions on an annual basis doesn’t do much to relieve the U.S. of its overall responsibility.

Micronesia is forging new precedent in global environmental law by claiming it is adversely affected by a Czech coal-fired power plant and thus entitled to relief under Czech law.

Micronesia filed a plea with the Czech environment ministry using a measure designed originally to settle disputes between near neighbors, arguing:

The Federated States of Micronesia is seriously endangered by the impacts of climate change, including the flooding of its entire territory and the eventual disappearance of a portion of its state. . . . The commissioning or retrofit of any large coal power plant could play a relevant role in the destruction of the entire environment of our state.

It may be too late for Micronesia. A new study suggests that Antarctica’s Pine Island glacier has passed its tipping point and is poised to collapse in a catastrophe that could raise global sea levels by 24 centimeters.

Pine Island glacier is but one of many at the fringes of the West Antarctic ice sheet. Climate change is warming the Amundsen Sea, which is at the southern margin of the Pacific Ocean. As rising sea levels push the warm water beneath the ice shelves, it melts them from below, pushing the grounding line higher up the continental shelf.

By raising sea levels, and therefore the grounding line, in their model, the scientists identified a point of no return beyond which the glacier would be unable to recover.

The Antarctic sea bed has a small lip in it: it rises slowly up the continental shelf, then makes a slight dip before rising again to the shoreline. The researchers found that as long as the grounding line is on the outer rise of the sea bed, before the lip, small changes in climate lead to correspondingly small changes in the glacier’s ice volume. But as soon as the grounding line moves over the lip and starts to move down into the dip in the sea bed, the situation changes critically. Once the grounding line passes the crest, a small change in the climate causes a rapid and irreversible loss of ice.

News isn’t good from the other pole, either. Scientists at the University of California, Berkeley,  predict that replacing tundra with trees will melt sea ice and greatly enhance warming over the entire Arctic region.

Because trees are darker than the bare tundra, scientists previously have thought that the northward expansion of trees would result in more absorption of sunlight and a consequent local warming.

During past episodes of warming, broad-leaved deciduous trees expanded their range north even more quickly than needle-leaved trees. While not not as dark as evergreen trees, broad-leaved trees transpire a lot more water. Water vapor is a greenhouse gas that becomes well-mixed throughout the Arctic.

Taking account of this in a standard model of global warming, the researchers discovered that, while broad-leaved trees do absorb some additional sunlight, the water vapor they pump into the atmosphere causes a more widespread warming.

The increased water vapor would melt more sea ice, resulting in more absorption of sunlight by the open ocean and dumping more water vapor into the atmosphere. This positive feedback will warm the land even more and encourage faster, more efficient tree growth and perhaps an even faster expansion of trees into the Arctic.