A Drop of Rain

In the previous posting, I took a look at the notion of humanity digging itself down into a pit. The more I consider this view, the better a model I find it to describe the actions, thinking, and economic/political activities of modern humankind.

I’ve been following, as I noted in the previous posting, the writings of a wide variety of so called Peak Theorists/Commentators, and began to note certain… how to put this nicely?… let’s call it, oddities, about their views. Certain things don’t fit the facts, that is. This is not to discount the actual substance of the analysis presented, for example, as this recent WikiLeaks Cable clearly shows (story), the views criticized by the establishment as ‘nutty’ or ‘deluded’ are in fact basically exactly right. In this case, the leaked cable shows that the Saudis admit they have both overstated their reserves, by about 40%, exactly as it was said they had, and are lying about their ability to generate new supplies in terms of daily production rates.

So there’s no problem with most of the core engineering facts related to various so called ‘peak’ issues.

No, the problem lies much more deeply in my opinion, and that problem is rooted in how we as humans are chosing to view this situation. By projecting everything upwards, we in turn manage to suggest we are progressing. But we are not progressing, if we were, our planet would not be losing its ability to support life, the resources we are extracting at breakneck speeds would not be hitting extraction maxima, the ecosystem would be thriving, not dying off and losing diversity at record rates, and so on.

There is another serious problem with viewing matters as if we had attained some height, and that is that it suggests that all we need now to do is to step down from the peak and make our way back to the lower realms. In other words, don’t worry, gravity will pretty much take care of things for us.

I’ll be investigating these matters for a while, so I hope a few of you will bear with me, and possibly even contribute thoughts of value to the process. Please note that repeating dogmas and propaganda generated by the corporate media, especially the right-wing corporate media, is not a positive contribution, but it will be one of the areas I examine in the coming postings, if things go as planned.
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Now and then I come across a posting made by someone that is so perfect in terms of how it explains a problem I have to post the entire thing, with little further commentary. In general I’m not going get as much into specifics like this in the future, unless the points are exceptionally well and clearly stated, as this one is. RockyMtnGuy is a petroleum engineer from Canada, by the way.

This one is from TheOilDrum.com Feb 8, 2011 Drumbeat

RockyMtnGuy on February 8, 2011 – 10:22am Permalink | Subthread | Parent | Parent subthread | Comments top

“I’ve lived in a few countries, and in every single one of them, I paid tax in order to have health care on demand.” [quoted from a posting above this one]

In most countries, health care is considered an entitlement. If you live there, you are entitled to health care, although how it is paid for varies considerably.

It is like paying for the roads in the US. The US built a very impressive Interstate highway system. If you lived there, not paying for it was not an option. It came out of your taxes, or out of user fees such as gasoline taxes. Nobody had to sign up for the right to drive on an Interstate highway, nor did they have the right to opt out of the system on the grounds the didn’t want to use it. Everyone in the US can use the Interstate highways “for free” because not paying for them was not an option.

In other developed countries, the medical insurance programs are funded much like the US Interstate highway system. Not paying for them is not an option.

The difficulty the US has is that many people do not want to or cannot afford to pay for medical services – the 45 million people who do not have medical insurance. The real difficulty is that these people might well die due to lack of services, so there are systems such as “Medicaid” which pays for families with low incomes, and “Medicare” for people who are aged 65 and over, all funded by the taxpayer.

In the US, the insurance companies get to “cherry pick” the low-risk population and pay for about half of the total costs, and the government gets stuck with the other half of the costs incurred by the high-risk welfare and elderly population. In other countries, “cherry picking” is not allowed.

Cherry picking – the activity of pursuing the most lucrative, advantageous, or profitable among various options and leaving the less attractive ones for others.

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I’ve been giving some thought to the way the discussion about our present and future are engaged in online especially, also of course in print. A few things have struck me after tracking the main authors and sites (see right sidebar for some fo the better representatives of this genre) for a few years, most started by a sneaking suspicion that there is something wrong in the mindset that is driving the discussion. Some of these problems are somewhat obvious, for example authors who benefit from attracting attention to themselves, which in turn sells books. Others are less obvious, and quite a bit more insideous, since they actually make it hard for us to even see what the problem is.

Given the degree of the problem, one thing is becoming more obvious: any changes to come are going to happen in totally unexpected ways. Why? Because we are entering into uncharted territories when it comes to how we believe the world works versus how the world actually works. The key word here of course is sustainability. If you can come to understand this word, you are pretty much most of the way home.

Near term it’s hard to see anything positive happening politically in the USA, unless you consider a non-stop barrage of instigation to violence from the neo-con far right, resulting in, surprise, violence, as a positive. That model is tried and true, admittedly, worked well for the brown shirts too. Personally I’d suggest anyone with any integrity distance themselves from such types, unless that’s the future you want of course.

Or the idea that force-feeding even more capital into large corporate systems (aka, health care ‘reform’ [pray tell, how is forcing more money into the HMO system, thus making it stronger, reform?], military outsourcing, etc) is somehow going to help actually solve our problems.

The main structural problem the EU will face is lack of domestically produced resources. The main positive the core European nations possess: a reasonably coherent political system, and reasonably rational voters who actually understand things when pushed, and of course, a sense of place, of history, mental, linguistic horizons broader than the local walmart parking lot or corporate funded tv/radio shows…

Almost the opposite of the US, oddly.
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Whatever you do, don’t miss this recent long interview with Robert Hirsh. He is interviewed by Jim Puplava. You can listen to the stream or download the mp3.

Hirsh has just written a new book called, of course, The Impending World Energy Mess [amazon].

If you take the time to stop watching fantasy news, left or right, and read a few serious people, like Hirsh, you’ll soon find there is exactly zero room for optimism about our energy future. Once your realize this, you may start taking steps that actually correspond somewhat to the future that is coming. In other words, steps that lead away from an unsustainable present. What Hirsh presents are just boring objective facts, and solid, workman-like analysis.

Refreshing, of course, in the way someone talking about something that actually resembles reality when everyone else is trying to make up an alternate reality. This reality is now being admitted by among others, the US Military, the German Military, the British Government, and an ever expanding group of somewhat rational cities around the planet.

Hirsh was the main author of the US government sponsored ‘The Hirsh Report’, which about 5 years ago outlined what was coming.

He has just written a new book that analyzes where we are at now, which is tipping on the edge of the peak, which further means, we’re about to start on the downhill side.

He covers all the current fantasies, wind power, solar, etc, as well as the past oil production, current oil production, and anticipated future production, including the current plateau of production we’ve been on now for about 5 years. Exactly as Deffeyes predicted, and pretty close to what Hubbert predicted some decades ago.

I really like Hirsh because he’s so solid, so non-dramatic, and he’s basically just interested in reality, not making up fairytales about how everything will be just fine when the as of yet undiscovered new energy source saves the day.

And this doesn’t even talk about over-population.

Sometimes it’s useful to stop thinking abstractly, and to stop guessing on a future we can as of yet only faintly make the outlines of in our daily lives, and to just see what’s going on here, now, today.

I like Bloomberg.com as a news site, because it aims at capitalists, and the USA is a capitalist country, so news pointed at them tends to be more accurate than most standard corporate mass media. This doesn’t mean you can turn off your critical thinking, but the news there is often real, and points to larger trends, since such trends are exactly what businessmen need to have a solid understanding of in order to hope to make good decisions.

So it struck me when I read Airline Era Ends as Carriers Cull 50-Seat Jets ‘Nobody Wants’ .

The 50-seat jets once prized by carriers such as Delta Air Lines Inc. are being culled from U.S. fleets as higher fuel and maintenance bills make them too expensive to fly.

By 2015, U.S. airlines will have about 200 jets with 50 or fewer seats, down from about 1,200, said Michael Boyd, president of consultant Boyd Group International Inc. in Evergreen, Colorado. More than 80 have been scrapped in 2010, he said.

Got that? I don’t know if you followed the airline industry when oil went to $147 a barrel, in 2008, but one prominent airline CEO stated that the global airline industry becomes non-viable at oil prices over $100 per barrel. This is because of economies of scale certain pricing models enable. In other words, airlines have basically three fixed costs: 1. the physical airplane, 2. fuel, and 3. labor/corporate. Debt costs would mainly be centered around the cost of the aircraft.
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Is he right, is he wrong? I’m guessing more right than wrong, sadly, since pretty much everything he’s saying in this interview is true.

The fake “recovery” was nice while it lasted, says famous apocalyptic forecaster Gerald Celente, founder of the Trends Research Institute. But now the fun’s over, and we’re headed for what Celente describes as the “Greatest Depression.” Specifically, the always startling Celente says the country is headed for rising unemployment, poverty, and violent class warfare as the government efforts to keep the economy going begin to fail.

The crux of the problem, Celente argues, is that the middle class has been wiped out. America used to be a land of opportunity for all, where hard-working people could build their own small businesses in their own communities and live prosperous and fulfilling lives.

But now a collusion of state and corporate interests that Celente describes as “fascism” have conspired to help only the biggest companies and the richest Americans. This has put a shocking amount of the country’s wealth in the hands of a privileged few and left the rest of the country to subsist on chicken-feed wages and low job satisfaction as Wal-Mart “associates” — or worse.

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There’s a lot of stuff going on right now in the economy, I’ll post some more soon, but for now let’s take a listen to one of the few coherent voices out there, William Black.

The Obama Administration says the recently signed Dodd-Frank Law, the biggest bank overhaul in decades, will ensure against another financial crisis.  William Black Associate Professor of Economics and Law at the University of Missouri-Kansas City couldn’t disagree more.

“They haven’t dealt with any of the fundamental perverse incentive structures that cause these recurrent, intensifying crises,” he tells Tech Ticker. In other words, the incentive to take excessive short-term risk in exchange for a multi-million dollar bonus is still very much intact. “Your pay should be based on long term performance instead of short term results which are easy to gimmick through accounting,” he says. 

Excessive pay on Wall Street, which Black says is the biggest culprit of the financial crisis, is just one reason we’re likely to witness another crisis in the not so distant future. Financial regulation reform also fails to deal with the “professional compensation” structure, says Black, a former federal regulator during the Savings & Loan Scandal. By that, he means the continued reliance on lawyers, appraisers, rating agencies and auditors ensures these professionals will remain the “most valuable allies to the frauds.”

We’re also no safer with the Dodd-Frank law than without it simply because, as a whole, the financial system doesn’t believe in regulation, Black observes. “It’s the ideology [which says] ‘you can never regulate effectively’, so why bother to try.” Finally, Black says, the law fails to end ‘Too Big to Fail’. As long as this policy exists we’re guaranteed to face more bailouts. “Why would we allow these systemically dangerous institutions to continue?,” he wonders.
Wall Street’s “Perverse Incentive Structures” Guarantee Another Crisis, Says Bill Black
by Peter Gorenstein – Yahoo

I’m just going to quote this in-depth. Even though the person being interviewed is promoting his own interests, nothing he is saying as far as i can tell is inaccurate, and I’ve read the same thing elsewhere, repeatedly.

See:

• URANIUM RESOURCES AND NUCLEAR ENERGY – Energy Watch Group 2006
• theoildrum.com Uranium Depletion and Nuclear Power: Are We at Peak Uranium? March 21, 2007

So without further ado, here’s part of an interview with Bill Powers (please note that this appears to be an automatically generated transcription, ie, it’s not very accurate):

Interviewer: A whole lot of newsletters cover oil and gas, but you picked uranium, which hardly anyone was covering until recently?

Bill Powers: I feel the uranium market right now could be the world’s most unbalanced commodity market. Inside a sense, the planet, by means of the nuclear power industry, consumes approximately 172 million pounds of uranium per year, as well as the planet only produces about 92 million pounds of uranium per year. The supply deficit is produced up through above-ground inventories, which are becoming worked down pretty quickly. Individuals numbers were supplied by Uranium Info Center. A great deal of my information arrives through the U.S. Department of Energy (DOE) or the Nuclear Regulatory Commission. For example, I discovered from them that the U.S. made, through the 1980s, about 43.seven million pounds of uranium. And by 2002, the U.S. only created about 2.34 million pounds of uranium.

Interviewer: Exactly where is uranium being created in the United States?

Bill Powers: Wyoming. There’s also a uranium facility in Nebraska. I think there are two in-situ leach plants in Wyoming and an additional 1 in Nebraska. There are a couple of phosphate farmers in Florida who generate uranium. I believe there can be a facility in Texas that also produces uranium. For that most part, the uranium business in New Mexico has just about been wiped out. The extremely low rates that we’ve seen, for about twenty years, have pretty a lot wiped out the entire U.S. uranium market. To go from over 43 million pounds to less than 2.five million pounds, it has truly only allowed the most productive, highest margin and most efficient mines in the nation to continue operating in that environment.
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If you follow energy matters, you might have heard about the new shale gas extraction methods.

Allegedly the near cornucopia of free energy, the new methods, asides from using extremely toxic liquid materials to fracture the rock formations to let the gas slip out to the well bore, for extraction, have been promoted by people like T. Boone Pickens as the source for future US energy needs in the transport sector. The latter by switching the truck/heavy equipment fleet to natural gas power.

This is supposed to be a good idea because it’s supposedly a 100 year’s supply. As usual, sadly, with such rosy predictions, the real numbers, when re-examined in the light of non-delusional, somewhat sane, thinking, simply do not hold up.

A current theoildrum.com posting highlights this issue.

Arthur Berman talks about Shale Gas

If you investigate the origin of this supposed 100-year supply of natural gas…where does this come from? If you go back to the Potential Gas Committee’s [PGC] report, which is where I believe it comes from, and if you look at the magnitude of the technically recoverable resource they describe and you divide it by annual US consumption, you come up with 90 years, not 100. Some would say that’s splitting hairs, yet 10% is 10%. But if you go on and you actually read the report, they say that the probable number-I think they call it the P-2 number-is closer to 450 Tcf as opposed to roughly 1800 Tcf. What they’re saying is that if you pin this thing down where there have actually been some wells drilled that have actually produced some gas, the technically recoverable resource is closer to 450. And if you divide that by three, which is the component that is shale gas, you get about 150 Tcf and that’s about 7 year’s worth of US supply from shale. I happen to think that that’s a pretty darn realistic estimate. And remember that that’s a resource number, not a reserve number; it has nothing to do with commercial extractability. So the gross resource from shale is probably about 7 years worth of supply.

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Recently I read a response to a fairly typical corporate type apologist in theoildrum.com comment thread. If you don’t follow theoildrum.com, it has a real problem, as do many US based forums/blogs that cater to any industry, with libertarian neo-conservative ant-government/deregulation notions among some, luckily not all, of its members.

This is about the most concise, accurate, rebuttal of the deregulation position I’ve ever seen.

syncro on July 13, 2010 – 8:53pm
Obeying regs is not going to provide a defense. But I am more interested in your point that

“BP’s response plan was filed and APPROVED by MMS as good enough. It wasn’t but that’s not BP’s fault…”

What catches my interest is that a lot of the conservative politicians argue that we should have less regulation. Some even say no regulation. Throw in the problem of the undue influence of corporate lobbyists and political cash. You wind up with a weak regulatory body that is instructed by the president to basically act as a force for promoting drilling. The new head cuts back funding for enforcement. Regs. are loosely enforced if at all. In other words, it is an ideal regulatory body from the point of view of the politicians who preach against regulation. And then when the corporate citizen causes a disaster through reckless conduct, you blame the hollowed-out regulatory body and let the corp. off the hook entirely.

It’s a bit hypocritical, no?

While the comment ends there, it’s worth looking at the question a bit more. The essence, as far as I can tell of all libertarian thinking is NOT, repeat, not, a true desire to achieve freedom for all. No, it’s rather the desire to achieve freedom to achieve wealth/power using whatever means necessary.
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