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What makes the Kochs and the neocons nervous enough to spend so much money

by David Seaton 9/4/2010 - 4:08 pm
peak oil

If you study the following two clippings from the UK's Guardian and from Germany's Der Spiegel you can why the Kochs, libertarians of every stripe, AIPAC and the neocons, have every reason to have (as the British would put it) their knickers in a twist.
Speculation that government ministers are far more concerned about a future supply crunch than they have admitted has been fueled by the revelation that they are canvassing views from industry and the scientific community about "peak oil".(...) Experts say they have received a letter from David Mackay, chief scientific adviser to the DECC, asking for information and advice on peak oil amid a growing campaign from industrialists such as Sir Richard Branson for the government to put contingency plans in place to deal with any future crisis. Guardian
A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.(...) The scenarios outlined by the Bundeswehr Transformation Center are drastic. Even more explosive, politically, are recommendations to the government that the energy experts have put forward based on these scenarios. They argue that "states dependent on oil imports" will be forced to "show more pragmatism toward oil-producing states in their foreign policy." Political priorities will have to be somewhat subordinated, they claim, to the overriding concern of securing energy supplies. (Germany) would also have to show more restraint in its foreign policy toward Israel, to avoid alienating Arab oil-producing nations. Unconditional support for Israel and its right to exist is currently a cornerstone of German foreign policy. (...) "A readjustment of Germany's Middle East policy … in favor of more intensive relations with producer countries such as Iran and Saudi Arabia, which have the largest conventional oil reserves in the region, might put a strain on German-Israeli relations, depending on the intensity of the policy change," the authors write. Der Spiegel
I don't ever write about Peak Oil, because, among my many odd jobs, (some odder than others), for over ten years I have been doing news aggregation for a major Spanish energy futures portal and have had to read hundreds and hundreds of articles about oil during those years. I also have friends who are real industry experts on the subject (I just know what I read in the papers) and up till now "received" opinion is that Peak Oil is tinfoil-hatsville, and so I stay away from it. But, these two articles in publications that I respect have made me realize that the subject is now being discussed at (gasp) the highest levels.

OK, so the cat is out of the bag.

Let's look at what this might entail. As the first clipping from Der Spiegel points out, Peak Oil's effects touch the Zionist third rail of course, which explains some of the neocon's skittishness, but what about the Koch's end of the coalition of freedom loving Americans?

Der Spiegel with Teutonic thoroughness, spells out what The Guardian, with British understatement merely hints at. Check this list. I have taken the liberty of putting some emphasis here and there.
  • Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95% of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."
  • Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."(five year plans?)
  • Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could comprehend the upheaval trigged by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."
What does all this mean, really

Doomsters like James Kunstler and Dimitri Orlov, especially Kuntsler, paint the oil-less future as some sort of survivalist's Arcadia, where self-reliant citizens, grow vegetables,  sew their own clothes and do a lot of carpentry without power tools. I think the post-Peak Oil world will look more like the following story:

A man is walking home from work, when he sees a long line forming in front of a government store, he asks the people what they are in line for and they tell him "lemons"... Frantically he runs home, arriving much earlier than normal, and finds his wife in bed with his next door neighbor, confronting them furiously he shouts:
What are you doing here, don't you know that today they are selling lemons?

This is a classic joke from the now defunct German Democratic Republic.

What brought the GDR down and the rest of Really Existing Socialism, including the USSR along with it, was not really people's chaffing under the repression of totalitarianism, but rather our system's miraculous ability to produce and distribute an infinite variety of affordable consumer goods, which their godless, planned economy couldn't. Free health care, social equality, guaranteed employment, good schools (Angela Merkel graduated from the University of Leipzig) and guaranteed housing couldn't compete with our cornucopia.

The essence of our system is a quite recent -- and never before in history achieved -- endless variety of things, many of them amazingly cheap, to choose from.  Think about it, you wander into a shopping mall looking to buy some deodorant and you'll be forced to choose between dozens of different brands at many different prices until you find exactly the one that suits your pocketbook or your "unique lifestyle" and image. You can eat your favorite fruit at any time of the year, flown in from the other side of the planet. This is freedom! This cornucopic miracle is all about logistics and logistics depends on oil.

No oil means either starvation or what are you doing here, don't you know that today they are selling lemons?

If Peak Oil finally happens we will be looking at some stark choices: whether we serve the Koch's as slaves or serve the Kochs boiled, baked or fricasseed. I can easily imagine which outcome they would prefer we chose.

I'm sure the Kochs know more about oil than Britain's Department of Energy and Climate Change or Germany's Bundeswehr combined and the Koch family's intervention in America's political life may be explained by that knowledge and by every good businessman's effort to produce predictable outcomes.

Cross posted from: http://seaton-newslinks.blogspot.com

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The truth hurts.

First off, they don't take into consideration the slow rise to the apex of the bubble that the downward slope will be just as gradual in the beginning. There should be time enough to re-arrange the deck chairs.

Europeans already pays out the nose for gasoline at the pump whereas Americans still pay the bare minimum. Guess who's gonna be screaming the loudest once peak oil is announced and the price at the pump goes over $10 a gallon?

Europe is in better shape to weather an oil peak than the US. I can see fuel being rationed to citizens and more being funneled to farmers. Truckers will be off the autobahns and trains will be the mover of goods with trucks only used for local delivery services. Trains will be back in vogue and perhaps many of the small lines that were up-railed will be put back into service. Buses are always plentiful still between small communities near a rail head.

The real trick is what to do about all those items we've all become accustomed to that require oil in one form or another? How does one synthesis oil? Can one? Or is there a substitute material for oil that could be used?

I wonder if peak oil is around the corner or will be in 10 years from now. That's the problem...the governmnets...all of them...know far more about the peak oil crisis than they are letting on to and they're being tight lipped not letting their citizens in on the problem.

So let the panic begin!

by Beetlejuice 9/5/2010 - 9:27 am

Despite being made up of 27 countries, the EU doesn't seem to suffer the same sort of political paralysis that the US does and the ultra-right hasn't the same kind of power in most of Europe as it does in the USA.

by David Seaton 9/5/2010 - 10:10 am (re: Beetlejuice)

The real trick in the US is the Democrats know but are holding back so as not to panic the public, whereas the if the republicans were in power, they'd let it out so the markets could absorb what little consumer cash is still in the hands of the public.

by Beetlejuice 9/5/2010 - 11:21 am (re: David Seaton)

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