31 May 2008
In his sixth book, Powerdown, Richard Heinberg
lays out four alternative future scenarios for how society will deal with
the energy crisis. His premise is that oil production is set to plateau
then decline and that energy use by humanity will decline along with it.
Note that even if alternative energy sources could offset depletion of
petroleum reservoirs, per capita energy consumption would still decline
due to increasing population. Heinberg's four scenarios
are:
Last One Standing – where nations fight over
dwindling resources.
Powerdown – where everyone cooperates
to reduce resource consumption.
Waiting for a Magic Elixir
– where everyone lives in fantasyland until the shit hits the fan,
and
Building Lifeboats – where the ships of state go down
and a few manage to survive on rafts.
I think another
unacknowledged assumption here is nationalism. Heinberg implicitly assumes
that nation states will continue to act as discrete entities. But to me it
looks like that notion has started to become archaic over the past couple
of decades. Look at the former Soviet Union, for example. It broke up into
how many 'stans? Then Yugoslavia taught us about Balkanization. Over the
same period all of the former warring nations of Europe decided to become
a Union. So I'm going to dredge up another archaic idea, a class society,
propose a fifth alternative future scenario, and call it
Superclass.
Throughout most of civilization people were born into
classes or castes and stayed there all their lives. In Western Europe
there were the nobility. In Egypt the Pharaohs. In India the Untouchables.
Hardly anyone ever went from peasant to software mogul. Nowadays, even
though we cling to a Horatio Alger myth in America and idolize common
folks – mostly athletes, actors, and musicians – who have made it big,
nearly everyone is stuck pretty close to their status at birth. Apples
don't fall far from the tree. We also see that the rich get richer and the
poor get poorer. The minimum wage hasn't gone anywhere in decades while,
at the same time, corporate executive salaries are on the order of tens to
hundreds of millions of dollars a year. In the U.S. less than 1% of the
population controls over a third of the wealth. There are about 1000
billionaires in the world. Keep in mind that a billionaire is one thousand
times richer than a millionaire. And perhaps 10,000 people control most of
the resources on the planet. Members of this Superclass have much more in
common with each other than they do with people in their own nation,
country, and hometown.
Now if you look at dwindling resources on a
per capita basis, there's plenty to go around for 10,000 people if the
rest of us 6.7 billion all live in mud huts on a bowl of rice and cup of
water a day. No doubt the Superclass can fly their Gulfstreams around the
world to poker parties with each other until the sun burns out. Peak oil
would mean nothing. All they have to do is concentrate the wealth and keep
the masses pacified. And it doesn't have to be a conspiracy, merely a
natural evolution. So what kind of evidence might you look for to support
or refute this hypothesis? You would look for evidence of concentration of
wealth and pacification of the masses. How about lots of people on mood
drugs like Prozac? More money to big pharma and lots of happy zombies. How
about millions of people addicted to teevee and all the broadcasters owned
by a few big corporations? African Americans have been one class with a
rebellious streak, perhaps because of their treatment, and hard to pacify.
How about a lot of them locked up in prisons operated by big corporations?
Debt servitude. How about lots of people in over their heads on mortgages
and credit card debt they can't pay off and a bankruptcy law written by
the bankers? Wars. Notice how most of the soldiers are people seeking
economic improvement and big corporations get the multibillion dollar
no-bid contracts? Dieoff. Starve a lot of the very poor and make health
care too expensive for the rest. Here it seems almost as if Mother Nature
is in cahoots with the Superclass. Every time there is a tidal wave,
typhoon, or earthquake it takes another 100,000. Look around and I think
you'll find more evidence.
In this scenario peak oil is not
an issue for the Superclass. Maybe that explains why you don't hear much
about it in the media.
- teosinte @ 20:07
29 May 2008
Throughout the years I've been reminded
repeatedly that democracy is the best form of government and capitalism is
the only sure way to run an economy. On both of these points I have only
two thoughts: one, I don't know, and two, I'd like to find out. Consider
the argument for democracy here in the world's greatest. As I understand
it, democracy is rule by the people. Or in a more modern sense, the people
vote to elect representatives to carry their water at a parliamentary
governing body. One person, one vote. But what have we this year? I hear
on the news that Florida and Michigan are being "punished." You can't
punish a state, you can only punish the people living in that state. So
sorry people in Florida and Michigan. You don't get to choose between the
woman whose spouse is a former president and the man of partial African
American descent. You've been ruled out of the "democracy" by a small
committee of powerful people somewhere. And what are these beasts called
Super Delegates? It would appear as though the votes of some of the
Superclass are worth more than hundreds of thousands of the votes of
ordinary people. Unless you live in Florida or Michigan. Then your votes
aren't worth anything at all. As Sheldon Wolin
puts it, we live in a managed democracy where the façade of democracy is
useful as it provides an illusion of legitimacy to those who hold power
over us. Most of the common people have figured this out and don't even
bother. But, wouldn't you know it, their apathy is also useful to those
who hold power. It makes the system easier to manage. For all
practical intents and purposes it appears that our economy is more
centrally managed than the Soviet Union's ever was. Adam Smith had this
idea that individual buyers and sellers, each offering what they had and
bidding for what they needed, was an invisible guiding hand that directed
goods and services from producers to consumers in the most efficient
possible manner at the right price. But you and I don't sell watermelons
or buy shoes from the cobbler. We sell our time and buy our necessities
from a few major, globalized corporations whose board members all sit on
each other's boards. They give us options as a multiple choice. Coke or
Pepsi? Would you like fries with that? They tell us what we should
want on teevee, where they own all of the wavelengths. They set the prices
and we can either pay or not. Move up the scale and what's the most
important price of all? It's the price of money. Is that set in the
marketplace between buyers and sellers? No. It's set in a secret meeting
of a small committee of bankers called the Federal Reserve. All of the
other big players: Goldman Sachs, Lehman Brothers, JP Morgan, etcetera
wait outside the door for the whisper then the markets react. How is this
all that different from the centrally planned Soviet system, which we were
told caused that Union to disband? Democracy and Capitalism
are probably good ideas. I really would like to find out. But it's
unlikely that we ever will. Scarcity will come because of peak oil. Hunger
and want will stalk the poor. Foundations of McMansions will settle and
crack on poor soil. And when it's time for the mask of Managed Democracy
to drop and reveal its true face of Inverted Totalitarianism, the people
won't resist. No, they will rush forward to embrace the new police state.
If there is not an official place to rat out one's neighbor, who might be
engaged in the subversive practice of growing watermelons to buy shoes,
the people will demand that one be
established.
- teosinte @ 22:07
28 May 2008
Dmitry Orlov makes a recommendation in his new
book, Reinventing Collapse, that is sure to win over the law and order
crowd. Orlov claims we're going to have to release convicts from prison
sooner or later so we ought to do it sooner and gradually rather than
later and all in a big whoosh. His point is very practical. Once our
complex society can no longer support a large percentage of our population
on free room and board they're going to be cut loose. And when that
happens there'll be a spree like we've never seen before.
How did
America, land of the free and home of the brave, come to have the largest
percentage of its population incarcerated of any nation in the world?
Larger even than South Africa and Communist China. One factor is that
politicians can always run a 'crack down on crime' campaign and get
elected. Law abiding folks, who are most of the voters, want their
neighborhoods to be safe and sane. Next the newly elected Congress
Critters pass laws making common activities illegal. People get sent to
jail for having a few seeds of a plant that grows wild along roadsides in
the Midwest and happens to make you hungry when you smoke it. One strike
you're in and three strikes you're really in, forever. Draconian
sentencing laws can send someone to prison for life for borrowing a
bicycle if they happened to have screwed up a few times in the past.
Finally, we turned the prisons over to corporations to run in a
businesslike manner. And what do businesses need most? More
customers.
Yesterday I answered the call to perform my sacred civic
duty to serve on a jury of an accused person's peers. As far as the legal
system is concerned, I'm the flip side of the same coin. Just like the
accused, I get told when and where to appear and if I don't show up on
time then all of a sudden I'm on the other side of the coin. Most of the
people who are summoned want nothing more than to be excused. You can see
them visibly squirm as they lie to the judge. Anything to get out and get
away, back to their mundane existences. The pool of potential jurors was
so small in the courtroom, and so many people had excuses, that there
weren't twelve people sufficient to start the trial. You could see the
judge's frustration. Then I was the last one up and started an argument
about a finer point of principle. Contrary the judge's instructions, I
will decide the case on the basis of both the facts and the
law.
"The jury has a right to judge both the law as well as the
facts in controversy."
John Jay, First Chief Justice
U.S. Supreme Court, 1789.
"The jury has the right to determine
both the law and the facts."
Samuel Chase, U.S. Supreme
Court Justice, 1796.
"The jury has the power to bring a verdict
in the teeth of both law and fact."
Oliver Wendell
Holmes U.S. Supreme Court Justice, 1902.
"The law itself is on
trial quite as much as the cause which is to be
decided."
Harlan F. Stone, Twelfth Chief Justice U.S.
Supreme Court 1941.
It looked like the judge wanted to come over
the bench and strangle me. First I got a long lecture and then, when I
persisted, another long lecture. I was dismissed and a jury wasn't
seated.
More and more people live in prison, in a kind of
graduate school for learning the criminal trade. When they get out they
know more about their careers than when they went in. Having half of the
criminal population in prison at any one time means the resource (i.e. the
victims) can support twice the overall size of the criminal population.
More people with a criminal record means fewer people qualified to serve
on juries (and keep in mind the minimum mandatory ratio is 12 to 1). So
when do we reach the tipping point or are we already there? Those same
people who sit on juries also pay taxes for the upkeep of the convicted.
If prison corporations aren't making a profit they can tell the
politicians, "pay us more or we'll start opening cell doors." It looks to
me like privately run prisons can both incarcerate the convicts and hold
the people and politicians hostage. And if we don't pay up they will cut
'em loose and go into business posting armed guards around the mansions of
the rich.
- teosinte @ 18:58
26 May 2008
The ancient Greeks were so perceptive of the
human condition that everyone since, from Shakespeare to the Ottoman
Turks, has studied their writings. In the Aeneid as told by Virgil,
Cassandra, daughter of King Priam and Queen Hecuba of Troy, spurns the
love of Apollo, god of light and reason. Out of spite he curses her to
foretell the future but be believed by no one. Poor Cassandra foresaw the
coming of the Greeks and the fall of Troy. She saw through the ploy of the
Trojan Horse while everyone around her thought she was mad.
In
every culture from ancient history on there are tales of those who said
aloud that shit was going to happen only to find themselves mocked and
ostracized or worse. Jeremiah told the Israelites they were about to be
carried off to Babylon and the governor's son had him arrested. The story
of Henny Penny comes down to us from the Jataka Tales of Buddhist Indian
folklore circa sixth century BCE. Crying "wolf" too many times
characterizes our disdain for the bearer, or worse prophesier, of bad news
because we all know the boy was just doing it to entertain himself. For
balance I'm looking around to find tales of someone seeing a dark future,
everyone gathering around to do their best, work together, and forestall
the worst of it. I'm still looking.
So why would anyone stick their
neck out and say out loud in a public way that our multitudes swarming
over the planet, our rapacious consumption of resources, our dominion over
fish and fowl to the point of extinction, all the markers of our very
success as a species, are the harbingers of our own doom? Some of these
modern day Cassandras are tenured professors and more or less untouchable.
But I know from observation that they take serious hits to their career by
speaking thusly. I suppose one could make an evolutionary argument –
groups that listened to the voices of doom avoided catastrophe and went on
to propagate their genes yada yada. But if that were really the case then
those myths would dominate our collective memories and not Chicken Little.
Personally, I think the Greeks were right. We, the Cassandras, have been
cursed by the god of reason.
In the months after September
11, 2001, I started to share with a few colleagues my thoughts on energy
flows through our complex society and what that foretold for our likely
future scenarios. "Look at this," I said as we bombed down I-40 in two
tons of hurtling Chevy Tahoe. "Do you think that this can go on forever
and what happens if it can't?" Needless to say, I quickly developed a
reputation as a Conspiracy Theorist. That's our culture's way of
marginalizing anyone who doesn't parrot the daily wisdom emanating from
the teevee. Now a funny thing. Those very same people come sneaking back
into my office wanting to borrow books on peak oil. They want to know how
high the price of oil has to go before all of those alternative sources
they've been promised suddenly come on line. They even listen to the
subversive concept of "energy return on energy invested." You know what
this means, don't you? This means it's too late to do anything about it.
And when you hear about it on teevee, that means the horse got out of the
barn.
- teosinte @ 19:35
24 May 2008
Resilient is a new buzz word in ecology. And it
seems like only yesterday when ecology was a buzz word. A resilient
ecosystem is said to be able withstand shocks and rebuild itself when
necessary, or have adaptive capacity. The economy might be thought of as
human ecology. After all, they have the same Greek root
– eikos meaning house. When a coyote eats a rabbit that's
part of the ecosystem. When a human eats a rabbit it's part of the
economy, where the rabbit may have been raised by a Burmese farmer,
prepared by a French Chef in New York and served to a Saudi on a cheap
American vacation.
The Native Americans had a resilient economy. If
the crops went bad maybe the Mesquite beans up in the hills were doing OK.
Hopefully some buck bagged a deer on the hike up there to find out. When
the Mesquite beans played out it was time to roast agave and pick prickly
pear. They had alternatives. They had plans B and C and D. They had
adaptive capacity. Modern Americans believe we have resilience because we
go through this charade of a presidential election every four years. Nixon
was pretty bad, remember? But whew! We elected Jimmy Carter and it was a
whole new era until the Shah was overthrown, the American hostages were
held on teevee for months, the helicopters burned in the desert, and the
price of gas went through the roof. I suppose most of us middle aged
people remember the gas lines best. But then it was a "new morning in
America" and the Gipper told Gorby to "tear down that wall." Oh never mind
that Iran Contra stuff going on in the basement. After all we whupped
Grenada's butt, the only successful U.S. invasion of a country full of
poor people in my lifetime. Then there was a standing ovation in Congress
for the wimp who ripped Saddam a new one and eight years of Bubba's
peccadilloes. Now after 7 years of Dubya we just know things have to go
better with Barry. We also believe we have a good personal financial plan
if we buy lottery tickets every week on our credit cards.
Do you
think about diesel when you go grocery shopping? How many people think
about groceries when they get cut off on I-15 by a semi? Instead what do
we do? We heave ourselves out of the car, waddle into the supermarket,
pull frozen boxes out of the freezer aisle, and swipe our plastic card.
Maybe we're in a hurry so we drive through Mickey Dee's. We know nothing
else. Prehistoric people were hunter gatherers. Our ancestors were
farmers. We're shopper gatherers. Our ecology is diesel tractors, natural
gas fertilizers, diesel combines, diesel semi trucks, and the checkout
line. There is no alternative. We have no plan B. Diesel goes to $4 a
gallon. There's grumbling and resentment. Diesel goes to $4.50. Congress
has to do something. Diesel goes to $5. Fear is on people's faces. Diesel
goes to $6. Any little blip: an explosion, a pipeline, an assassination;
little old ladies get trampled in a panic and the shelves go bare. What
are you going to do?
- teosinte @ 21:03
22 May 2008
There is a class of American, and probably
other elites, who are the Been Theres. You'll know them by their
discussion of geography. You might mention Costa Rica in some casual
conversation and they'll say, "Oh yes, I've Been There." Or mention Italy
and you'll hear, "we've Been There. We went last summer on our
anniversary." They might know nothing at all about the people or the
culture but they can probably tell you a good place to eat. We were
interviewing a German this week and I happened to ask, "what part of
Germany are you from?" "Dusseldorf," he replied. "Oh that's one place in
Germany I've never been," my co-interviewer cut in. "But I have been to
Munich," he continued, making sure we both knew of his Been There
credentials.
The culture of the Been Theres is wide and
shallow. They know mostly about the hotel where they stayed, the
restaurants where they ate, the airports, and maybe a few well known
tourists attractions. They know little about the people or local history
because one has to live in a place for some time to experience that. I
stayed in a hotel in Boston one night, near the Logan Airport, then drove
up to a private high school for rich kids in Andover, New Hampshire. I was
there for a Gordon Conference but I didn't learn as much about the area as
I would have by studying a map and doing a web search. A few years later I
was back and this time drove south to Plymouth. There I saw the Rock that
is one of the foundation myths of America. Oh what a farce. Pick a rock,
any rock, and there it is. God's destiny for his sole, chosen
people.
My Grandparents never aspired to
Been There status. In his later years my Father's Father would venture off
the ranch to visit his offspring diaspora and return so thankful to be
home that he would swear to never pass through the gate and onto the
highway again. You can see a photo of the windblown sandhills he loved so
much at this link. My Mother's parents made their annual trip to the
West Coast to see their daughter and grandkids so many times that they had
each stop memorized, kind of like my annual trip to the Midwest now to see
them. Only one in our family has made it to the Been There league and
she's in Honduras this weekBut the Been Theres have
some hard times coming. Their ranks will be squeezed. The Middle Class
riff raff will soon become former Been Theres (Has Been Theres?). Big silver birds are landing for the last time;
the corporations that fly them are merging and folding. Soon an
airplane ticket will once again be a real status symbol. In the back
you'll see the business class wadded into fetal positions, their knees
under their chins, and up front will ride the Superclass, having grapes on
gold platters peeled for them by voluptuous serving wenches. Who knows,
maybe the engines will be running on biodiesel made from grain that poor
starving wretches are not eating.
Me, I have no
more desire than my Grandparents. I look at my small patch of windblown
dirt and see the whole richness of the Earth. I look up at the Newberry
Mountains and see exotic horizons. I look around at my neighbors and see
all of the diversity of humanity. It's an ego that needs a passport. It's
a mind that needs a place
19 May 2008
At our core we as a people are having a
discussion about the very nature of reality. I owe this thought to John Michael Greer, writing about second hand ideas (or
in this case third hand ideas or perhaps recycled beer cans). On one hand
we have the "better and better" crowd where America is the best. On the
other hand we have people's careers invested in collapse. Personally, I'd
rather have my career invested in a big retirement stash. How can you go
your whole life predicting the end, being mocked and ridiculed as Chicken
Little, only to have everything turn out fine and for everyone to live
happily every after? You know then that you are damned sure vested in the
end times, if only for vindication. As Greer points out, this discussion
has gone on since Cassandra went moping about Troy, going on and on about
how the Greeks were coming. Nobody, however, who is going hungry at the
moment, and of this I am very sure, has any doubt about reality. USA Today ran a piece (link might not work) on bread
lines. Some people even called to see if someone would pay their cable
bill. Having gone hungry myself a few times in my first few years out of
the nest I can attest to its marvelous capacity to focus one attention on
the truly important things in life from an ecological and sustainability
point of view. The panicked screeching from the cable teevee folks, I'll
bet, is caused by the psychological realization that they are gradually
moving towards a lifestyle more common in Bangladesh rather than
hunger. Then today in the mail comes a letter from my dear old
Uncle Sammy with butter for the soup kitchen bread. What about tax relief,
I wonder? How about a good ole tax rebate? But no, this is a stimulus
payment. Our Uncle is borrowing money from someone, maybe the Chinese, to
pay us to be stimulated. I feel a heady rush of excitement coming on. Why
can't we stimulate the economy the old fashioned way by fighting wars that
nobody wants or buying weapons that no one should ever use? Or maybe we
are and even that's not working. So it's time to butter the bread
lines.
- teosinte @ 19:17
17 May 2008
Please, please," said Dubya, "please pump more
oil" on his knees before the King. U.S. President George W. Bush
met Saudi King Abdullah in Riyadh earlier on Friday to ask for more oil
from OPEC to tame record oil prices. (Reuters) "Supply and demand are in balance
today," said Saudi Oil Minister Ali al-Naimi. Of course. Supply and
demand are always in balance with the sliding scale of price. And price is
sliding up. Oh it's the speculators. No it's the weak dollar. What does
investment banker Matthew Simmons think? Could it be supply? Perish the thought. In the gay nineties
you couldn't find a single party goer who thought the music would ever
stop. Now we've "hit a rough patch," as our dear retro leader tells us.
And you can't throw a rock without hitting a doom and gloomer. Once upon I
time I was the only one in these parts, known contemptuously as Dr. Doom
around the office; believer in Conspiracy Theories. Now I'm an optimist by
comparison. On the other side you'll always have the cornucopians.
Technology will save us because "we have big brains" (anonymous BLM
employee). But the discussion now seems to come down to how bad is it
going to be? We have the hard landers, the soft landers, the skeptics, and
the clueless. And we aren't even in an officially declared recession yet.
How will it play out? If we only knew. There are about 6.5 billion
people on this planet and probably 10,000 or less control most of the
resources. You know you are one of this superclass if you travel around in
your private Gulfstream jet. One likely option is that this superclass
diverts grain out of the stomachs of poor people and into the tanks of
their Gulfstreams. This option is ecofacism. Don't hold your breath for equality.
Democracy is doomed, if it ever existed. The superclass is going to need a
police state to keep the masses under control and there will be a lot of
goons for hire. I see enormous motorhomes driving down Newberry
Road pulling oversized SUVs and I wonder what the drivers think about all
of this. Maybe: 1) gas is high, 2) Arabs have all of the oil, and 3) they
are evil.
- teosinte @ 22:59
15 May 2008
One might look up and think there's a new gold rush going on in the
Mojave. Folks are lined up in a long queue with sun farm applications at
the Bureau of Land Management for every open spot of desert. A few days
ago I made the outrageous, heretical claim that alternative energy would
not be profitable anytime in the next few decades, or at least that's what
Exxon Mobil thinks. Now here we have famed oilman T. Boone Pickens buying
wind turbines. What gives? Well, most likely, I was wrong. But there's
more to the story, as always. First there was the Energy Act of 2005 that
cuts tax breaks and has a "soft" requirement to implement "renewables".
Next there's the California's Renewables Portfolio Standard that was
established by Senate Bill 1078, which requires the state's retail sellers
of electricity - investor-owned utilities, electric service providers, and
community choice aggregators, to get 20 percent of their retail
electricity sales from eligible sources of renewable energy by 2017.
California's energy agencies subsequently committed to achieving the 20
percent target by 2010; seven years early. This is not market demand, it's
central government planning – that horrible committee we claimed brought
down the Soviet Union. This isn't necessarily a bad thing, though. After
all, solar probably has an energy return on energy investment of about 10
or so. Still, if you try to go off the grid with solar and batteries you
are going to be paying a lot more for juice and have a big maintenance
headache on you hands. This problem is particularly acute in the need for
batteries. You could spend $2000 for just enough lead acid batteries to
run a freezer and they'll last maybe three or four years. By then the
price could double.
But enough of these laws and tax incentives.
The whole Earth is a solar collector and has been for four billion years.
Nearly every likely spot on the planet is covered with solar receptors
called plants that turn radiation into energy called carbohydrates.
Already we intercept 40% or more of the planet's primary productivity for
our mass of humanity. Now we're going to intercept the rest for the
machine? Let's hope not. Let's collect solar on the margins where it is of
no use to the ecosystem. That means solar on our roofs, not virgin desert.
My recommendation – lobby for a law to force the power companies to buy
surplus electricity from individually owned sources at the peak retail
rate. Then plant panels and wind towers where ever they fit into your
landscaping and have the checks direct deposited.
11 May 2008
Free speech radio (KPFA) is in its spring fund raising season and there
are a few new documentaries to check out. The first two thirds of The Eleventh Hour,
narrated by Leonardo DiCapprio, seemed nearly truthful; albeit breathless
in a dramatic orchestra pounding panic. Yes it's getting a little warm and
the ice is melting but this film is a tornado siren in Oklahoma. Then it
waltzes off into fantasy land. All we have to do, you see, is restructure
our economy, relocalize, and start using all of that abundant, renewable,
clean energy that's out there for the taking. The last hour was a rapid
fire of half truths and make believe. Yes there is enough solar energy
falling on planet Earth to power all our cars, trucks, tankers, industry,
electrical grid, and then some. We know that. If you can't do the
calculation for yourself I'm sure you can find it on the web. That's not
the point. How do you propose to cover the Earth with solar collectors and
still leave room for the ecosystem? What do you plan to eat after farms
are converted to power plants? Did you factor in the efficiency loss of
converting solar to electricity to hydrogen then distributing it to a
transportation network? How much energy and materials will it take to
build that infrastructure and where will it come from? Yes we could save a
lot by localizing our living spaces and restructuring the economy. But do
you think that you'll just wake up one morning and it will be done? These
people are actors not engineers. Next they have to explain why the economy
and civilization are not moving in the direction of all that clean,
abundant, renewable energy. It's those evil corporations, you see. They've
addicted us to oil and now they're deliberately squeezing the supply to
drive up prices and obscene profits.
We have here the beginning of
a new and powerful myth. When something goes wrong, and especially when it
happens to us, we expect two things. We expect someone to bail us out and
we need someone to blame. Exxon Mobil is a perfect villain. Not only is it
the largest corporation in the world but its first quarter revenue was up
34% to $117 billion and profit was up 17% to $10.9 billion. We're the
damsel in distress and who will be the white knight riding to save
us?
But whether you think capitalism and profits are good or evil,
I'm sure we can agree that Exxon Mobil is out to make a profit, which
leads to some questions. Exxon Mobil's production is declining so why
isn't it plowing all that profit into exploration? If there is all that
clean, abundant, renewable energy out there then why isn't Exxon Mobil
moving into that market? It seems that if we are suddenly going to
transition to solar, wind, and biomass then the biggest energy company in
the world would want to be our supplier. What is Exxon Mobil doing with
its profits? Well, it seems that Exxon Mobil is buying its own
stock.
In the spirit of Bill of Occam I offer a few answers. Exxon
Mobil is not plowing money into exploration because it is not a good
return on investment. At some point we know that it will take more energy
to find and produce a barrel of oil than comes out of that barrel of oil.
Likewise at some point it also costs more. Exxon Mobil thinks we are at
the point where the rate of return, i.e. the profit, is too small. Why
isn't Exxon Mobil moving into the clean, abundant, renewable energy
market? Because that market is not profitable and will not be anytime in
the next few decades. Anyone who thinks wind, solar, and biomass are
profitable is welcome to put solar panels on their roof, a wind turbine in
their backyard, and an ethanol plant in their garage. Keep track of your
receipts and you'll find it's a conceit. Why is Exxon Mobil buying its own
stock? Obviously because it thinks it's a good deal. As we slide down the
oil curve those proven reserves will become precious. As the oil fields
are depleted the price will skyrocket. Finally, why does Exxon Mobil tell
analysts like Jim Jubak that it's long term planning is for oil at $50
per barrel? Because he is a useful idiot.
It is a philosophy of deception. Sun Tzu, The Art of
War.
- teosinte @ 19:08
9 May 2008
Everyone was talking about the stock market and
their portfolios in 1997 when I flew to Tucson for a job interview. That's
all the couple in the seats behind me on the airplane talked about – how
much their stocks were up, what to buy next, hot tips. The next morning
when I stopped for coffee on my way to the Harshbarger Building the people
at the next table over were talking about the stock market. Even then, as
a bottom-feeding graduate student, I could see it was time to sell. In
2006 I stopped at a Borders book store in Bakersfield. Nearly every book
on face display in the business section was about how to flip houses. The
gig's up, I thought. Time to pay down the mortgage and credit cards. The
crowds rush to every good thing and trample it to death until it's not a
good thing anymore; everyone looking around at his neighbors to see if
they have found a better deal. Recall the gold rushes of the nineteenth
century. Hordes rushed to Sutter's Mill, they dashed to Comstock, they
pounded dirt at Cripple Creek and everywhere they went they left behind
holes in the earth and piles of tin cans. Now everyone is talking about
the high price of gasoline. Is it time to sell commodities? Is a crash in
oil and grain futures coming? Should we sell the silverware and pawn our
gold jewelry while we still have a chance at the high prices?
One
is up, the other is down, and they're not symmetrical. Think of it this
way. People are notoriously bitter complainers. Any little slight is a
serious insult and by God we are entitled to our entitlements. We may pay
only as third as much for gas here as they do in Europe but if gas goes to
four bucks this summer, watch it become the campaign issue. Both
candidates, heads and tails, will promise to make it right. House prices
go down a little and house owners start screaming. Then comes Uncle Sammy
riding to the rescue. Does this mean house prices will go back up? Or does
it simply mean that people whine? If someone found the Comstock Lode under
his house you could be damn certain he'd keep quiet about it. That is
until his snoopy neighbor found out and the rush was on. Hold on to
commodities or buy in because we've got a long way to go. And get some
earplugs unless you want to go deaf from the howling.
We've got a
long ways to go down this curve of dissipating energy and everyone will
expect a bailout. As I look out the window I see U.S. military garrisons
around the world. I see six lane freeways packed full of cars and trucks.
I see outwardly rational people believing that we are in a little dip and
things will soon get better. I see a delusional fantasy of the world's
sole remaining superpower running F-16s and Abrams tanks on solar panels.
I see glassy eyed suburbanites believing they're going to go buy a nice
little hydrogen powered antigravity pod to zip around in once gas gets too
expensive. No, I don't think it's time to sell commodities. I think it's
about time to get ready to duck when these people wake up.
- teosinte @ 20:55
3 May 2008
How clear that single note sounds from the Mighty Wurlitzer Organ that
is the mainstream media. If your information source is Cable News you
quickly realize there is only one correct way to view the world. No matter
where you turn, CNN, FOX, ABC, CBS, MSNBC, PBS, NPR, the song is the same.
Only the tempo and pitch vary. If, on the other hand, your information
source is the internet you find a fractured, kaleidoscope of alternate
views. A lot of truth can be found on Democratic websites such as
buzzflash.com that tell you Democrats are good and guns are bad. But if
you're like me you think having a gun around the house is about like
having a hammer, and almost as useful. Democrats and Republicans look like
two sides of the same coin. Many good websites will tell you about the
evils of central banking. I certainly think fractional reserve banking, up
to and including the Federal Reserve Act of 1913, is part of the problem.
But they lose me with the argument that peak oil and climate change are
smokescreens for conspiracy. One good site that I read often is obsessed
with Israel. No doubt it's a thorn in the side of a sensitive part of the
world. I can wade through that to find bits and pieces of news hard to
find elsewhere. It loses credibility, though, by taking the position that
global warming is part of a plan to raise taxes. Climate change is one
place where I think we should stick to the data and models. Contrarian
views should be examined, of course, but scientifically where hypotheses
must be testable and falsifiable.
Contrast this Tower of Babel to
the clarity of greed and ambition. No wonder those whose sole motivation
is accumulation of wealth and power can submerse their differences in
unity of purpose. That's why the course of the nation will not change no
matter who is elected in November. The only discussion will be about
methods, not objectives. The real discussions go on in private and the
objectives are drowned out by all that organ music.
- teosinte @ 15:28
2 May 2008
It's tough to make predictions, especially about the
future.
Yogi Berra
That's why I tend to cut the
pundits some slack in their endless prognosticating. Maybe we are on the
brink of recession, maybe the next boom is about to begin. We are either
at death's door, the doorstep of Heaven, or both. But it seems at first
glance that the present and recent past should be easier to call, at least
until one looks at the conflicting reports coming in. Then the present and
recent past appear as cloudy as the future. This has been the character of
American life for my entire existence. For example, why did John's head
jerk backwards in the first Kennedy assassination if the bullet hit him
from behind? I was five years old and even then I knew that if you hit a
ball with a stick it went away, not towards you. Anyone who paid attention
in the later part of September, 2001 knows the facts can be muddled. And I
couldn't possibly hope to chronicle all the bizarre statements that have
issued forth hence from the almighty authorities. Now here we have the
so-called "DC Madame", Deborah Jeane Palfrey hanging herself in her
mother's garage. She did indeed have dirt on the high and mighty. How
convenient. I wouldn't think so much about this, after all. Let the
investigation take it's course. But almost before she could be pronounced
dead the media found someone to quote that she'd been planning it all
along while a radio clip posted on the web had her saying she'd never kill
herself and if she was found dead it would look like a suicide. Then it
all goes down the memory hole. That was Winston Smith's job at the
Ministry of Truth in George Orwell's novel, 1984. Winston Smith was a
petty bureaucrat with the job of rewriting history as it happened. Now we
see that this wasn't a novel so much as it was either a prediction or a
plan. First we smell the bullshit then we get used to it. What's next?
|
LinksEnergy Water Gardening History
BlogsThe Oil
Drum Energy
Bulletin The Daily Reckoning What Really
Happened Nature Bats Last Joe Bageant Life After the Oil Crash
NewsReuters
Bloomberg
Recent Posts
Archives
|