Energy & Bubble & Other Stuff

Read the links.

Goes to show you... if you reject the underlying assumptions and look into things on your own, you can be a better predictor of events than mainstream journalists, think-tank denizens, CIA analysts, economists, or computer modeling.

It's Sunday; I'm tired; so I am going to engage in some plain old I-told-you-so's, not caring if it comes off wrong. Given the rest of the predictions we might base on past successful ones, I'd love to believe these were luck. My prognoses are not celebratory. I see hard, hard times ahead... and lots of sadness.

In August last year, I published a piece on Balochistan. In that analysis, I claimed that the Pakistani army attack that killed Bolochistani Nawab Akbar Bugti may have been another invisible historic bifurcation -- a small event that could have wide-ranging implications as its ramifications spread into the future. The person who was standing under that creaking ledge was Pakistani President Pervez Musharraf.

This is the Law of Unintended Consequences point; or the "sensitivity to initial conditions" point.

Musharraf has lived in political purgatory ever since 9-11. On the one hand, Pakistan has a substantial population of Pashtuns who are sympathetic to the Taliban who remain hostile to Musharraf for his acquiescence to the US. His own security and intelligence apparatuses are full of political Islamists; and the two attempts on his life in December 2003 were almost certainly inside jobs, or his locations during each would not have been known. The attack that killed Bugti, speculates Syed Saleem Shahzad, Asia Times Online's Pakistan Bureau Chief, was intentionally committed by members of the Army, against orders, with the goal of destabilizing Musharraf.

Already, a state of virtual martial law has been imposed, as protests have spread to Karachi. The American FBI, that was operating in Balochistan, has been effectively neutralized; and there are suggestions that well-armed Balochi nationalists will soon be assisting in a fresh Taliban offensive against NATO occupation forces.

That was the prediction... not by a professional, but by one of us feral types.

Recently the mainstream press was surprised by the Lal Masjid (Red Mosque) incident, as if it were suddenly born under a cabbage.

In September last year, I published a piece on India that went into Russian machinations in Central and South Asia. In it, I quoted Henry Liu, on the development of the Shanghai Cooperation Organization (SCO) and the oil-backing of the Russian currency (ruble):

Russian oil denominated in rubles will create a global demand for the ruble to make it an alternative reserve currency for international trade, given that Russia is the second-largest oil producer after Saudi Arabia and the Russian economy, unlike that of the Saudis, is big enough to absorb huge amounts of rubles the Russian government can print. This will transform Russia overnight into a global financial power.

Since then, the ruble (or "rouble," as some spell it) has leaped in value, and the SCO just completed a summit (as member states conducted a joint military training venture) where Russia and Khazakstan made mention of an "Asian Energy Club."

In 2004, I had written in an article on liquidity-crisis-imperialism:

[T]his system is itself now exhausted, as was indicated by the Asian meltdown's unintended threat to the US economy and by the dot-com bust of 2000. This same debt-liquidity crisis is re-forming now in the US as a real estate bubble that will just as certainly burst.

That was when the mainstream press had plenty of articles calling us "housing bubble chicken littles."

Now the New York Times headlines a story Waking Up to the Real Estate Nightmare.

For the last few years, any of us who have suggested that there is such a thing as "peak oil" are pretty much members of the tin-hat crew.

Now, Michael Klare's latest at Asia Times shows that the energy companies and our energy-company government are quietly revising their views:

Recently, however, a spate of high-level government and industry reports have begun to suggest that the original peak-oil theorists were far closer to the grim reality of global oil availability than industry analysts were willing to admit. Industry optimism regarding long-term energy-supply prospects, these official reports indicate, has now given way to a deep-seated pessimism, even in the biggest of Big Oil corporate headquarters...

...Read deep into the report, though, and these optimistic words begin to dissolve as its emphasis switches to the growing difficulties (and costs) of extracting oil and gas from less-than-favorable locations and the geopolitical risks associated with a growing global reliance on potentially hostile, unstable suppliers.

Again, the numbers involved are staggering. According to the NPC, an estimated $20 trillion in new investment (that's trillion, not billion) will be needed between now and 2030 to ensure sufficient energy for anticipated demand. This works out to "$3,000 per person alive today" in a world in which a good half of humanity earns substantially less than that each year.

These funds, which can only come from those of us in the wealthier countries, will be needed, the council notes, in "building new, multibillion-dollar oil platforms in water thousands of feet deep, laying pipelines in difficult terrain and across country borders, expanding refineries, constructing vessels and terminals to ship and store liquefied natural gas, building railroads to transport coal and biomass, and stringing new high-voltage transmission lines from remote wind farms". Adding to the magnitude of this challenge, "future projects are likely to be more complex and remote, resulting in higher costs per unit of energy produced". Again, think tough oil.

So there are a few things, one tin-hat lunatic to the next.

Let the denials begin! Make me feel good! Take Valium! Vote!

Comments

[Pakdemocrat]

You quote a source saying: 'The attack that killed Bugti, speculates Syed Saleem Shahzad, Asia Times Online's Pakistan Bureau Chief, was intentionally committed by members of the Army, against orders, with the goal of destabilizing Musharraf.'

Not so. The plan to kill Bugti had been hatched by Musharraf and his Director General of Military Intelligence, a major-general who happens to be relative of his.

My sources tell me that the both of them went to hill resort near Islamabad where they were receiving hourly from the troops who had surrounded the 80 year-old Baloch leader.

Saleem Shahzad of Asia Times Online writing can at times be a bit flaky and speculative, so I would not put too much store by him.

Now finally Musharraf is getting his just desserts. The Pakistanis have had enough of him. It's a pity that Bush seems to think that the dictator remains US's only option, but then your president is well known for burying himself in big holes created by his own stupidity.

[SmackwaterJack]

An "I told ya so" is good for ones soul. :)

[Spookcatcher]

The whole oil and investment scenario is a point blank sham. If we wanted to produce more refined oil we could build more refineries in MONTHS! The industry has been CLOSING down refineries. The industry has sufficient money to drill and explore. They want to squeeze us, just like the drug dealer once you are "hooked. We have the ability to quit using 50% of our fossil fiel in 30 DAYS if we had leadership that wasn't tied to money from the existing energy industries, banks, and military industrial complex. The global domination theory through energy control is an old think tank conclusion that was first practised by J.P. Morgan and the Rockefellars.

[GeorgeMead]

"an estimated $20 trillion in new investment (that's trillion, not billion) will be needed between now and 2030 to ensure sufficient energy for anticipated demand"

Thats about a TRILLION DOLLARS a year for the next twenty years, just to maintain a system that is ultimately doomed anyway! For less than what Dubya has already squandered in the desert, we could build a domestic alternative energy industry that would solve this problem in half the time for a tenth the cost.

[altohone]

The taboo on I told you so's is as unwelcome as Bush.

We need more of it.

Those who have been wrong exploit the taboo to maintain their prognostication roles and shove more rubish on the heap.

Just today, Kagan of AEI was quoted repeatedly in an Iraq optimism piece by the AP. To paraphrase the last sentence in the article, a Kagan quote-
"Some say this and that may happen... I don't think it will".

The corporate media desperately needs writers, editors, publishers and broadcasters who will point out how wrong the pundits have been, and save the last word for wisdom from Stan Goff and others that knew better.

[Craig]

I wonder what it would cost to convert our transportation sectors (ex aviation) to electric- and hydrogen-powered? I've read some numbers but they were so low compared to what we're spending in Iraq that I am suspicious. I suspect it would be a lot cheaper than buying foreign oil--increasing our trade surplus, reducing the value of the dollar, increasing our military spending to protect our overseas suppliers, and to support our belligernt foreign policies.

[BadChristian]

I don't think that predicting the "experts" are wrong is a feat anymore.

The feat is figuring out who is actually an expert. Look at who these people are counting on for justice... Pat Roberts University? For the upper class, colleges are just away camps for troubled aristocrats, where they can trash stuff and blow off steam until they get handed a degree and placed in a "job."


This administrations experts probably can't sleep at night, worrying the sun is gone forever this time.

[BadChristian]

I'd love to hear more people concentrating on influence peddling in the modern broadcast world.

Without the idiots of television media to call him brilliant, people would have simply looked at Bush and seen a dolt. But there they were telling everyone how he is deceptive like that... He loves to be "misunderestimated." He may look like an dolt, sound like a dolt and hang out with NeoCon dolts, but don't let that fool you...

[oldpotsmuggler]

THE MORAL SUPERIORITY OF LIBERALS

Defeatocrats: Those who believe that resorting to use of the overwhelming military might of the U.S. is not a “card” to be “played”, and that the shedding of our own, and others, blood must be reserved for those rare occasions when there is clearly no other reasonable course of action.

Chickenhawks: Those for whom military aggression serves as a blood sport, but even then in instances where they are able to remain only as spectators.

Things have now devolved to the point where there is near universal agreement that future prospects for the current chaos in Iraq are no better than a crapshoot. We currently face an absolute impossibility on the part of anyone to connect any particular action on our part with the reasonable attainment of any favorable, positive, or beneficial occurrence or outcome. We “surge” and then we guess, we hope, we believe that conditions will become better in some way that escapes description. At least if there is anyone out there who is saying “we can pretty much count on this particular favorable accomplishment by this definite point in time”, I’m not hearing it.

In short, we are committing troops under conditions where there is the certainty of fatalities, and no certainty that these ultimate sacrifices will not prove to have been in vain. Put bluntly, that is immoral. Further, there is no question that this situation is not acceptable to liberals. And that it is so acceptable to conservatives that they wouldn’t have things be any other way right now.

I have never been able to figure out what it is about the conservative mentality that permits them to gamble so cavalierly with the lives of soldiers. Take Viet Nam. The stakes in terms of body count were far greater, but the clarity of the error of continued hostilities just as indisputable. And still the right wingers chose to gamble all against the possibility that even winning would provide no discernible reward. And they still sat safely at home while “playing” the ultimate game of life or death for others.