But wait a minute. The same report projects Saudi demand to grow as well, leaving less than ever for export. The report forecasts domestic use of crude – which averaged 2.4 million bpd in 2010, up from 1.9 million bpd in 2007 and 1.6 million bpd in 2003 – to swell to 3.1 million bpd in 2015, to 3.9 million bpd in 2020, to 5.1 million bpd in 2025 and 6.5 million bpd in 2030.

Oil exports fell from about 7.5 million bpd in 2005 to 5.8 million bpd in 2010. Exports are projected to dip from current levels to six million bpd in 2015, to 5.6 million bpd in 2020, and to as low as 4.9 million bpd in 2030.

Earlier this month, the OPEC Monthly Oil Market Report (MOMR) reports that Saudi production rate exceeded 9.4 million bpd. In late 2004, Saudi Arabia reached a plateau of 9.5 million bpd, but then production fell right at the end of 2004. Production slowly recovered to 9.5 million bpd in summer 2008 – at which point, as the global financial crisis hit, demand fell and production was sharply reduced. Stuart Staniford suspects Saudi Arabia’s sustainable capacity has eroded from ~9.5 million bpd in 2008 to ~8.8 million bpd today.

But who knows for sure? Staniford points out that historically the Saudis have never maintained this level of production for very long, never mind gone beyond it.

The International Energy Agency (IEA) in its most recent report (Energy Outlook 2010, published last November) projected Saudi production would increase by 5 million bpd to 14.6 mbd by 2035.  Even Saudis are calling out the IEA’s numbers as nothing more than wishful thinking.

Even if we accept the optimistic view that Saudi Arabia will in fact increase production by 2 mbd more than they’ve ever been able to do before, the bad news is this: less will be available for oil consuming countries, including the U.S.

For the U.S., peak oil is here.Peak VMT is here. Peak economy is here: “recovery” remains elusive, as oil prices remain extraordinarily high (~$100 WTI, ~$118 Brent) despite faltering demand in the developed nations.

In Washington, the big debate is what policies need to be followed to get us out of the doldrums and back on the road to economic growth. The right asserts all we have to do is get government out of the way, pare taxes and government expenditures to the bone, shovel money in the hands of the masters of the universe who are the “job creators”, and the so-called “free market” will do the rest. The more that experience proves this a fantasy – witness the last three decades of declining real income except for the very rich, real unemployment/underemployment (U6) stubbornly stuck at ~16%, and the most extreme disparity in wealth since the ’20s; coupled with a devastated ecosystem, most catastrophically embodied in climate change, that promises to destroy civilization itself, for rich and poor alike – the more desperately the right clings to its dogma.  The argues that a healthy dose of fiscal stimulus will get the economy going again – like it did for St. Roosevelt back in the ’30s – and that the resulting robust economic growth will raise all boats while filling government coffers, making it possible to resume robust economic growth and pay back the debt incurred. Believing this requires ignoring the fact that the U.S. is no longer the virgin nation it once was, rich in promise and untapped resources. The land is now raped and pillaged, too exhausted and too bitter to respond to caress or cajoling.

In Europe, reality is just as studiously ignored: the huge debts that have been run up by financiers in quest of speculative returns require renewed, robust economic growth if they are to be repaid. The required economic growth will never be forthcoming. Piling new debt onto old will just make the crash bigger when it comes.

The debate amongst economists and politicians in Washington and Europe is like a debate amongst scholastics: how many angels can dance on the head of a pin? St. Thomas at last had an epiphany, that all was so much straw. We should be so lucky.

In July 2008 – just before the big crash – gasoline prices exceeded $4.15 a gallon and gas station sales accounted for 12.47% of retail sales. When gasoline prices last rose to $3.25 a gallon, in March 2008, gas station sales accounted for 11.55% of all retail sales – significantly more than now.

Fuel prices aren’t all that’s been soaring – food prices have, too. The United Nations Food and Agriculture Organization reports global food prices reached an all-time high in January 2011.

Last year, unusual and extreme weather – too hot or cold, or too dry or wet, due in part to global warming-induced climate change – affected major food producers and exporters around the world, from Russia and Ukraine to Canada and the U.S., Germany, Australia, Pakistan, Argentina and the countries of Southeast Asia.

Food riots have started again. Political unrest, stoked by rising food prices, is sweeping the Middle East and North Africa, threatening the stability of the world’s oil supplies. Egypt, Tunisia, Yemen, Libya and Bahrain have seen political uprisings. There have been demonstrations in Algeria, Jordan, Iraq, Morocco, and now Oman. Were instability to spread to Saudi Arabia, the world would tremble indeed.

The world’s food supply is highly dependent on oil.  In a back-of-the-envelope calculation, Paul Chefurka estimates the operation of the world’s food supply consumes about 23% of the world’s oil.

Oil shortages mean food shortages. Food shortages lead to political upheaval, disrupting oil production. Meanwhile in the U.S., we’re burning over one-third of our corn crop – one-sixth of the world’s supply of corn – to run our cars.  This chart is via Early Warning.

Running our cars and trucks is once again on the verge of becoming so expensive that the cost will blow up the economy.

And oh yes, in the U.S. the disparity of wealth between the rich and the rest has never been greater.

Leading indicators of revolt in the Middle East and North Africa include corruption, unemployment, and the percentage of household income spent on food.

Rising inequality in the U.S. is one measure of corruption. As the hijacking of the bailout by the banksters conclusively evidences, democracy in the U.S.  – with a big assist from the Supreme Court in Bush v. Gore and Citizens United – is nothing more than a sideshow and the U.S. is now demonstrably an oligarchy.

Unemployment? While the “official” rate is stated to have fallen to 9.0% – but that number would be over 11% were it not for millions of people allegedly dropping out of the labor force over the last year. And the more revealing U-6 rate is running at 16.1%.

And food costs? Over the 12 months, the food index has risen 1.8% with the “food at home” index up 2.1%; both 12-month changes are the highest since 2009. More tellingly, there has been a dramatic increase in hunger in the United States in the last three years and a record 14+% of the population is on food stamps. Maybe the rich can still buy food, but it’s getting harder and harder for everybody else as their incomes are dropping even as food prices rise.

If food prices are not yet making Americans scream, Americans are much more sensitive to rising prices at the pump – God help anyone who would interfere with our love affair with our cars. The energy index has increased 7.3% over the last 12 months, with the gasoline index up 13.4%. Crude oil prices have been fluctuating around levels last seen just before the 2008 spike to $147/barrel. One additional geopolitical spark could set off an explosion, the likes of which we’ve never before seen.

How long before growing inequality in the U.S. results in riots and unrest?  Is what we’re seeing in Wisconsin a mere harbinger of more serious struggles to come?

Our politics – whether local, national, or international – is laughably incapable of confronting reality. Here in Oregon, even a “progressive” governor has abandoned his environmental roots and embraced “economic development,” a policy direction reiterated by his newly-appointed natural resources adviser saying the focus will be “on jobs, not mainstream environmental issues.”

Lives, both of humans and political entities, are now at stake. But we’re still thinking within the old paradigm of “growth.” How long can it be before we at last drop the pretense, and acknowledge, and openly and honestly deal with the new paradigm reality has dealt us?

What’s notable in the report is recognition of the correlation between economic activity and greenhouse gas emissions. The lesson is, if we are to shrink emissions we’re going to have to shrink the economy.

Saving the Earth means not only saying goodbye to growth.  It means embracing economic contraction. As economic growth has historically reflected increased energy consumption, peak oil and growing constraints on other energy sources imply that the shrinking of the economy will happen whether we like it or not. It won’t require political will – it will result from bumping up against the cold, hard reality of declining energy resources.

Chaney was speaking for hundreds of millions of Americans when he stated the American way of life was not negotiable. The odds that America will gracefully let go of the idea of growth and embrace an era of limits are slim.

The U.S. diplomatic cables published by the Guardian reveal Saudi officials concede global oil production will soon peak, possible as early as 2012. The cables relate that Saudi Arabia is not only struggling to maintain production, but that increasing domestic demand is leaving less oil available for export.

The Oil Drum observes that real world data supports what is secretly being said and has posted this chart from Energy Exports Databrowser showing not only that production has been dropping but that net exports are dropping even faster as internal consumption rises.

The situation in the Middle East overall isn’t much better: while production may or may not have peaked, exports are down significantly from the 1970s because of rising consumption.

]]> http://casafoodshed.org/archives/2011/02/09/wikileaks-reveals-saudis-admit-peak-oil-is-nigh/feed/ 0 http://casafoodshed.org/archives/2011/01/14/the-u-s-in-2011-unprecedented-inequality/ http://casafoodshed.org/archives/2011/01/14/the-u-s-in-2011-unprecedented-inequality/#comments Sat, 15 Jan 2011 01:00:13 +0000 jim http://casafoodshed.org/?p=6120 These graphs posted by Charles Hugh Smith at Of Two Minds show just how skewed the distribution of wealth has become in the U.S over the past 40+ years.

The vast majority of assets held by the Baby Boom generation are in the top 5% of households, and most of the remaining assets are owned by the 15% tranch just beneath the top 5%. The bottom 80% don’t have much home equity or directly owned bonds or stocks.As Abraham Lincoln stated in the Gettysburg Address, our nation was founded on the proposition that all men are created equal. A nation so unequal as the U.S. has become cannot long endure.

This graph puts the US “defense” budget at $US 711 billion in 2009. But that doesn’t include a number of “off-budget” items that, on some estimates, push US “defense” spending above $US1.3 trillion.

And hardly a peep from anybody in the U.S., politicians or citizens alike, that there’s anything wrong here, that such misdirected profligacy is anything but normal and necessary. At the same time – thanks in no small part to military spending – U.S. government debt has spun beyond any point where servicing that debt might seem a reasonable possibility. Increasingly, state and local governments are facing bankruptcy. With President Obama himself leading the charge, social safety net programs protecting low and middle income people – most appallingly, social security – are under attack while the wealthy get more and more – and Obama’s undeclared war on social security is set to be escalated. Public employee pension programs are under attack, and private pensions are disappearing. And the division of wealth in this country has reached extremes not seen since the Gilded Age of the late 1920s. This growing inequality of wealth is itself a major cause of the financial crisis.

Credit: The Nation

Matt Taibbi observes in his new book Griftopia:

What has taken place over the last generation is a highly complicated merger of crime and policy, of stealing and government. . . . The financial leaders of America and their political servants have seemingly reached the cynical conclusion that our society is not worth saving and have taken on a new mission that involves not creating wealth for all, but simply absconding with whatever wealth remains in our hollowed-out economy. They don’t feed us, we feed them.

The reality is, there is zero chance that the U.S. political system will act, any time in the foreseeable future, to reign in, much less dismantle, the American Empire; or to restore democracy and redress the redistribution of wealth towards the wealthy that has occurred in this country over the last 30 years. It’s time to admit the sad truth: the quiet coup is a fait accompli. The Republic is dead.

Don’t be too quick to hail, “long live the Empire.”  The days of the Empire are numbered.

]]> http://casafoodshed.org/archives/2010/12/21/state-of-the-union-completely-whacked/feed/ 0 http://casafoodshed.org/archives/2010/12/14/fossil-fuel-subsidies-dwarf-renewable-subsidies/ http://casafoodshed.org/archives/2010/12/14/fossil-fuel-subsidies-dwarf-renewable-subsidies/#comments Wed, 15 Dec 2010 00:04:24 +0000 jim http://casafoodshed.org/?p=6014 The Environmental Law Institute recently conducted a review of U.S. government fossil fuel and renewable energy subsidies for Fiscal Years 2002-2008. The findings are presented in the paper, Estimating U.S. Government Subsidies to Energy Sources: 2002-2008 – and illustrated in the graphic “Energy Subsidies Black, Not Green.”

Key findings include:

• The vast majority of federal subsidies for fossil fuels and renewable energy supported energy sources that emit high levels of greenhouse gases when used as fuel.
• The federal government provided substantially larger subsidies to fossil fuels than to renewables. Subsidies to fossil fuels – approximately $72 billion over the study period, as opposed to $29 billion for renewables.
• Almost half of the subsidies for renewables went to corn-based ethanol [which at best has a barely positive EROEI, and whose climate and environmental consequences are questionable].
• The largest subsidies to fossil fuels were written into the U.S. Tax Code as permanent provisions. By comparison, many subsidies for renewables are time-limited initiatives implemented through energy bills, with expiration dates that limit their usefulness to the renewables industry.
• The vast majority of subsidy dollars to fossil fuels can be attributed to just a handful of tax breaks, such as the Foreign Tax Credit ($15.3 billion) and the Credit for Production of Nonconventional Fuels ($14.1 billion, though this credit has since been phased out).

The agreement produced in the early hours of Saturday reinforces the promise made by rich countries at Copenhagen last year to mobilize billions for a green climate fund to help poor countries defend themselves against climate damage.

It was not clear how the funds would be raised. At Copenhagen last year, rich countries agreed to raise $100bn (£63bn) a year by 2020 for the fund. However, US officials said at the weekend that most of this would come from the private sector.

Like, we’re going to pass the hat around to corporations?

Cancún’s most significant result was putting off the tough decisions until next year’s UN summit in South Africa.

Environmental groups blamed the US for taking a hard line at the talks. But all ended well:

Despite those tensions, however, America and China avoided the mood of confrontation that undermined the talks at Copenhagen last year.

Now there’s real progress for you!

Grist reports that the talks ushered in a “a new era in international cooperation on climate change.” Kumbaya! All the nations of the world have now agreed to cooperate in doing nothing significant or effective!

Bolivia didn’t sound ready to jump on the self-congratulatory bandwagon. The agreement embraces a policy on “deforestation mitigation” known as REDD, Reducing Emissions from Deforestation and Forest Degradation in Developing Countries. This gives polluters in the north a chance to buy carbon credits for protecting forests in the global south.

Bolivia, and most organizations on the ground and in the streets of Cancún for the past two weeks, object to REDD on the grounds that it commodifies the forests of the global South, endangers indigenous control over the forests and their right to livelihood, and allows northern polluters to keep polluting. Bolivian negotiator Pablo Solon said handing out carbon credits for protecting forests makes it easier for industrialized nations to achieve their emissions reductions targets without taking domestic action to rein in greenhouse gases.

Bolivian President Evo Morales gave an impassioned speech at the conference that refused to cut the industrial powers any slack:

We came to Cancún to save nature, forests, planet Earth. We are not here to convert nature into a commodity. We have not come here to revitalize capitalism with carbon markets . . .

We are familiar with the slogan “Country or Death,” but it is better now to talk about “Planet or Death.” To try and look for an intermediary solution is to trick people. It is the major powers here that need to abandon their arrogance in the face of the peoples of the world.

Dan Weintraub argues at The Automatic Earth that the folks in charge really know better. They’re embracing “extend and pretend” fiscal policies in the present because they are deathly afraid of the alternative. They’re kicking the fiscal can down the road for a while longer so as head off the discontent and civil strife that always accompanies increases in austerity along with its attendant human suffering. The ruling elite understands all too well that present fiscal and monetary policies will fail to fix the underlying and most fundamental and socially destructive of all economic ills – those of an ever-widening gap between rich and poor, and the absolute disaster caused by an ever-shrinking, formerly self-sustaining American middle class. According to Weintraub, Krugman advocates for, and Bernanke is pursuing, policies whose aim is to keep civil strife from destroying, in the near term, the very fabric of American society. Weintraub errs, I think, only in failing to include Obama in his circle of conspirators.

As Tom Whipple observes, what we’re experiencing isn’t a routine downturn in the business cycle which can be cured by Keynesian stimuli favored by the Democrats or tax cuts favored by the Republicans. Rather, it’s the ending of a period of 200 years of abundant energy that allowed us to build an extremely complex civilization based on dozens of interrelated systems without which we can no longer live. The most important and the most overlooked system is the global biosphere. The consequences of its devastation for humans and all life on Earth are only now, too late, beginning to become evident.  At the same time our very complex civilization has begun to exhaust the sources of energy and numerous other raw materials that built and maintained it.

In our politics, we are struggling to return to a civilization which is no longer possible – and the inevitable failure of that effort is likely to be explosive. Whipple seconds Weintraub’s warnings of impending social chaos:

If anyone thinks the employment situation is difficult, wait a few years until the very high priced motor fuels makes discretionary car travel unaffordable. Millions upon millions of jobs in the retail, travel, hospitality, recreational, and dozens of other industries will be lost.The current efforts by various levels of government to stimulate job creation or save people from home foreclosures will prove to be ridiculously inadequate. A completely new paradigm of what we do to sustain life is going to have to emerge or things will become far worse than most of us have ever known. Modern civilization simply cannot stand a situation in which a substantial share of its people is destitute. The potential for social disorder is too great.

“A completely new paradigm” – doesn’t that sound lovely? Carolyn Baker is more blunt: what we are experiencing is the collapse of industrial civilization. And while we we can wax eloquent about rebirth, we absolutely refuse to acknowledge the death that makes it possible.  We don’t dare talk about the pain and suffering that collapse will entail. Any transition to a new paradigm of resilience and self-sufficiency won’t be accomplished without great suffering and painful loss. The path leads where it will, whether we like it or not. As Baker reminds us, transition requires an internal journey as well – a journey of the human spirit, the hero’s journey. And each of us is being called.

The Report takes for a given the science:

• Temperatures will increase on average around 0.2-1°F per decade.
• Summers will be warmer and dryer.
• Extreme precipitation events will likely increase.
• Sea levels will rise, probably by 2 – 4 feet by 2100.

What will the consequences of climate change mean for Oregon?

Summer water supply will decrease as a result of reduced snowpack and summer precipitation. This will be tough on agriculture in Oregon, impacting the availability, quality and cost of water for irrigation. Wildfires will pose a bigger threat to Oregon’s forests. Coastal communities will be increasingly vulnerable to flooding and erosion. Many plant and animal species may have to pick up and move – if they can – or die, as their habitat shifts. Ocean waters will become warmer, and more acidic – and thus corrosive to certain species.

The Report emphasizes that we are already experiencing the impacts of climate change in Oregon.

Given the parade of horribles in the Report, you’d think the Report might urge strong action.  Think again.

The studies and projects discussed above present different lenses for examining public understanding and reactions to climate change. Although these studies and projects use different approaches, measures, and methods, commonalities are revealed; it is likely many Oregonians perceive climate change as a problem although they may not know the scientific details. There are cognitive and perceptual barriers that need to be addressed if we expect individuals or groups to change behaviors for either mitigating or adapting to climate change, although there appears to be general acceptance of and desire for government efforts that will direct such behavioral change. It may be possible to use existing state assessment and monitoring programs to monitor climate change impacts on cultural resources, built environments, and public health.

We need additional research to set baselines in order to monitor changes over time to understand more fully: (1) how a wide range of Oregonians who are likely to be affected by climate change due to the place they live, the job they hold, or the organization they work for experience climate change impacts; (2) the acceptability of specific policy and behavioral changes to a wide range of Oregonians; and (3) the barriers faced by individuals, groups, and organizations, including state agencies, as they start to respond to the observed impacts of climate change in Oregon.

That’s the recommended course of action? Wait until we “understand more fully” how and where Oregonians might be effected; what actions might prove acceptable, and when; and where and how strong the opposition is  to any action at all?

Pretty weak broth, following really sterling work laying out the situation.

A legislative summary of the report is available here.