@CP
These hothouse the Gaza imperialists are building now to get compensation later, will of course be destroyed when the “settlers” leave. Otherwise, the palestines would use them to grow granates.

Posted by: b | Aug 18 2004 18:49 utc | 3

@B:on Oil Stans
What Do You Think of the concept of a New Great Game? I don’t understand it all, but it seems plausible.
The New Great Game

Posted by: FlashHarry | Aug 18 2004 19:17 utc | 5

@Flash Harry.
The great game, from Mother Jones, April 2003, by R. Dreyfuss:
The Thirty-Year Itch
…Three decades ago, in the throes of the energy crisis, Washington’s hawks conceived of a strategy for US control of the Persian Gulf’s oil. Now, with the same strategists firmly in control of the White House, the Bush administration is playing out their script for global dominance.
Excerpt:
…Akins learned a hard lesson about the politics of oil when he served as a U.S. envoy in Kuwait and Iraq, and ultimately as ambassador to Saudi Arabia during the oil crisis of 1973 and ’74. At his home in Washington, D.C., shelves filled with Middle Eastern pottery and other memorabilia cover the walls, souvenirs of his years in the Foreign Service. Nearly three decades later, he still gets worked up while recalling his first encounter with the idea that the United States should be prepared to occupy Arab oil-producing countries.
In 1975, while Akins was ambassador in Saudi Arabia, an article headlined “Seizing Arab Oil” appeared in Harper’s. The author, who used the pseudonym Miles Ignotus, was identified as “a Washington-based professor and defense consultant with intimate links to high-level U.S. policymakers.” The article outlined, as Akins puts it, “how we could solve all our economic and political problems by taking over the Arab oil fields [and] bringing in Texans and Oklahomans to operate them.” ….
Link

Posted by: Blackie | Aug 18 2004 20:00 utc | 7

Bernhard – thanks for starting the oil thread. I will post several small posts with various upbeat messages…
The first one is a reaction to the most catastrophist and pessimist commenters around here and at the Whiskey Annex (referring amongst other things to Peak oil and its possible consequences) is – the absolute worst case scenario is not so bad.
It means relying only on really renewable energies like hydro, wind and solar. Large hydro is the cheapest energy around and can offer storage capacity (just pump the water back upwards). Wind costs today at most 20-50% than coal pr gas-fired power plants (wit hlast years’s commodity prices…) Solar panel kWh still cost today 10 times more than gas or coal fired plants but can be used anywhere.
We can do pretty much everything with electricity, including private transportation (maybe not with as much flexibilty – yet – as gas fuelled cars, but enough for most needs already) with today’s technology, and we can expect serious improvements if incentives suddenly favor non-oil energy sources. We can use electricity to recycle whatever materials become rare.
This means that in the very worst case, our energy bill goes up by 5-10 times. Is it disruptive? Yes. Would it cause a major economic crisis? Probably. Would it be the end of the world, or at least of civilisation as we know it? No.
Our past and current growth has been artificially accelerated by unsustainably low transportation costs, but this artificial wealth will allow us to pour the necessary resources into improving the existing renewable energy sources which already exist today.
So let’s not despair yet…

Posted by: Jérôme | Aug 18 2004 20:12 utc | 9

Jérôme: As far as I’m concerned, the possibility of going on with individual cars is NOT a good news for me; that is one of the biggest and most insane invention the sick human mind ever came up with, imho – for a wide range of reasons, from pollution to urban sprawl to mere waste of good metal that is basically used 2% of the time, not to mention health issues related or non-related to car accidents.
“The US will try to split China through cival unrest”
Yep, civil war in China is clearly the simplest and best way of making sure they can’t become a superpower, at least not now when there’s still something to rule over. I’ve always wondered how many leaders in the West could worry that much about China. It’s exactly like the current problems the US has with Arabs and islamists: they created it. For the Arabs, it was with the stupid oil addiction, that funded the Saudis and then most of the area and every single islamist organisation in the world. For China, it’s by outsourcing and moving there factories. If the West didn’t want to make quick easy money by buying Chinese stuff, but instead worked the huge internal divides of China, it wouldn’t be too hard to bring them back to what they were in 1920. Not that I’m advocating it, but I just want to point that it’s their own greed that actually causes what worries so much the Western wealthy elites.

Posted by: Clueless Joe | Aug 18 2004 20:25 utc | 11

Jérôme: Hmmm, I’ve read a few articles hinting that the Caspian reserves weren’t as easy to tap and as huge as first expected; still big and worth pumping, but definitely not a new Persian Gulf. If you can actually comment about this (I don’t want you to get into trouble by spreading unauthorised info), I’d like to have it (no need to make a long detailed reply of course).
Your comments about wind were timely: Spanish socialist govt plans to triple wind power. Will be just 12%, which isn’t much compared to what nuclear and oil power can bring, but a pretty impressive result nonetheless; and if there are actual measures for energy conservation, this will be even more effective and useful.
(oh yeah, and why could Spain actually produce greehouse gas 15% above 1990 level, when the average European aim is something like -8%? It’s not as if they’re a 3rd world country that is still in the first stages of industrailisation)

Posted by: Clueless Joe | Aug 18 2004 20:43 utc | 13

@Jerome:
I’m not a catastrophist, either, so after reading your link, perhaps I won’t have to clutch my teddy bear so tight tonight.
The ultimate problem is, I think, not so much what the “reality” is–and I’m sure you’ve got a real good grip on the reality; the problem is the “reality” that resides in the NeoClowns minds.
I hope to hell I’m wrong.

Posted by: FlashHarry | Aug 18 2004 20:57 utc | 15

@Flash Harry
The percieved reality – that´s where I see the problem too. Bush said something like “the US life style is not negotiable” and that sentence does get a majority in the US. That lifestyle depends on cheap oil, so cheap oil is “not negotiable”.
The problem is that cheap oil is naturally not negotiable in the sense that there is now way except massive, massive bloody fighting, to keep oil cheap. I am deeply concerned that the US will go exactly that bloody way. Capitalisms rules, free oil markets, are not accepted if it means $10.00/g at the pump.
“Lets nuke them” will be a general demand – and the nukes or equivelants will not go to the producers of the commodity in question, but to foreign consumers of that commodity – that´s any bigger country from China over India to Europe.
The US rules the seas and most the skys. The Europeans, ex some northern islands, should focus on their land connections to the east for friends and partners to counter this threat.
Too much fiction? Maybe, but being paranoid doesn´t mean you do NOT have possible enemies.

Posted by: b | Aug 18 2004 21:34 utc | 17

come-on people. Man, how bad can life be? With some of the post above, chicken little has nothing on you.
I must agree with Jerome again. All of this talk of peak oil is bullshit. Peak oil will be reached around 2020 to 2030. Peak natural gas could be as far off as 2050.
As far as Caspian reserves go, there is some very interesting politics going on there. First, in the early 1990s, oil companies gushed over how much possible oil was there. Then unrest came to the area and the logistics of moving the oil from the area hit home. This caused a downgrade on the reserves in the area. Now, the area has stabilized some, and a new pipeline has opened letting oil and gas flow. Also, the Afgan pipeline looks to be realistic now and that will run through Pakistan to a liquified natural gas facility which in turn will head to the industrialized countries. Alan Greenspan said in testimony to congress last winter that liquified natural gas is the future.
Now, to alternative energy sources. I have never seen so much negativity in my life. The factoid is, wind power is waiting to be harnessed. Micro-hydro is so under-utilized its sickening. These micro-hydro units are not some Hoover Dam that will disrupt fish habitat. They take up little room in a steam, they can even go into a culvert, and provide cheap energy.
On the solar front. Solar is much more efficient than twenty years ago. And, with time will become more viable. In the southwest and south, solar technology is the answer. I believe over time, with research, solar can fill many gaps in the energy grid. Worrying about how much energy it takes tomake solar panels is usless at this point. In twenty years, it may e a problem.
In the mean time, until we hit peak oil, and we are on the downward slide of fossil fuels, we must move critically fast to a more technology based energy policy.
Also, lets not forget, there are other places beyond earth to find resources.

Posted by: jdp | Aug 19 2004 0:54 utc | 19

great thread. my favourite vexing issues, interesting new info, different perspectives. it’s great drinking w/you guys.
strangely, despite admitted tendencies towards doomsaying, I don’t think our situation is quite irretrievable yet — not technically — with regard to energy and transport. what I fear is the tremendous inertia of an American (and other privileged nations) public that has, frankly, become nothing but a big spoilt child cosseted and courted by corrupt politicians. the Mob of Rome never had it so good.
Chasing the SUV Vote is the political reality here in the US today and, I fear, for some time to come.
a responsible leadership would be advocating strongly for smaller cars and fewer cars, more efficient heating and cooking, less waste in every area (the sheer waste in US industry, Gummint, and private life is inconceivable, the scale of it, the outrageous profligacy) — we’d see Kerry and Bush competing to offer the finest national public transit system (state owned vs privately chartered no doubt, but a flagship system in either case), and the whole nine yards. can you imagine it though? I fear US politicians learnt from the fate of Jimmy Carter that to tell the spoilt-brat public they have to economise or conserve is the kiss of death to your political career. so there is not one pol at the higher levels who dares to tell the people the truth: the era of super-cheap just-pump-it-out-of-a-hole-in-the-ground energy is over, O, V, E, R, over, get used to it.
it’s this tremendous lag between reality and the protected, fictionalised pseudo-reality fed to the US public by the US corporate media that worries me. the whole country is imho in danger of becoming a “Denial Nation,” a sort of N Korea stuck in a time warp, expending tremendous resources and violence to maintain an outdated fantasy.
so technically I’m with Jerome and jdp — we’ve got a good shot at a soft landing. sociopolitically I fear that the pathological denial, plus the weird brew of Patriotism and Consumerism (buying an SUV shows you’re Proud to be Amurkan!), is enough to shove the US into a desperate holding pattern — Real Men don’t screw around with sissy efficient technologies, they go out and kill brown people and steal their oil! — for long enough to make a soft landing impossible.
PS CluelessJoe — I’m with you 110 percent. one of the silliest technological dead-ends of all time, the private auto. basically it’s a horse carriage minus the horse — so incredibly unimaginative, a real case of “paving the cow path” if you’ll forgive a mixed animal metaphor. steel/steel rail was a far more radical idea, and the velocipede and its descendants are imho one of the most brilliant developments in human technohistory 🙂 right up there with the aero/hydrofoil.

Posted by: DeAnander | Aug 19 2004 3:56 utc | 21

@CP re Spanish Wind. My bank has participated to the financing of 2,300 MW of wind power in Spain (and close to 5,000 MW world wide, with Italy, the US and the UK most active for us). This means we have financed about 40% of Spain’s current installed wind capacity (also about 5000 MW) and we are plan to continue on doing so; we like the regulatory framework they have put in place, which is enough to be an incentive, but not so onerous that the electricity distributors complain. Plus, they’ve quickly built a strong manufacturing base (wind, as an added benefit, creates the most jobs per kWh, and it’s well qualified jobs), so it’s very positive for them.
As an addendum on the big 5 Caspian projects, I should have noted that they each require some 10-20b$ of investment each. The production costs are fairly low (2-5$/b), which makes the oil still cheap on the world markets (5-10$/b to bring it to the Mediterranean, including pipeline costs) (I have more precise numbers but cannot give them here).
So you have the following very simplified numbers:
1b$ gets you 100,000b/d of oil (36mboe/y)
1b$ gets you 1mcf/d of gas (63mboe/y), which gets you 5000GWh (with 50ish% load factor, and requiring another 300m$ investment in a power plant)
1b$ = 1000 MW of onshore wind power = 2500 GWh of electricity, with almost no additional cost and no pollution. (or 500 MW – 2000 GWh offshore)
These are very simplified numbers, but show that wind is not far from being competitive on its own, without subsidies AND without taking into account externalities such as pollution, security of supply, import dependency, and job content…
A few years of subsidies/carbon tax/military tax on hydrocarbons will help make the switch painless. Of course, wind cannot go beyond 20% of overall generation because of its intermittent nature (it produces when there is wind, not when you need it), but this is a worthy – and easy goal.

Posted by: Jérôme | Aug 19 2004 11:53 utc | 23

@LG:
My order of current threats to US and proximity thereof would be N. Korea,Pakistan-India blowing up nuclear, Russia, Iran, then China.
Really good thoughts there on Russia.
I’d like to hear Jerome’s thoughts on this too.

Posted by: FlashHarry | Aug 19 2004 13:10 utc | 25

I agree that a US-China hot war is still a long way off, but I would argue that the reason is Chinese weakness, not the other way round.
I don’t know much about China, but I would imagine that they must be close to panic when they look at their oil situation. They suddenly need a LOT of imported oil (and they maybe need it more than other countries because it is their industry – and thus their growth, which is energy intensive), and they have no easy way to get it except on the open market. They do not yet have big majors active around the world (they are trying to build them now, but end up paying a lot for their assets) and they see the US Navy sitting on their shipping routes, with no similar military capacity on their side.
Their attempts to build pipelines to Russia and Kazakhstan have not yet been very successful, and their attempts to buy in the assets (Kashagan in Kazakhstan, Slavneft in Russia last year, and apparently Yuganskneftegaz, Yukos’s main affiliate now) have not been successful either.
9/11 bought them three years of quiet in the strategic rivalry with the US (I am sure they could not believe their luck when this happened), which has given them time to grow and develop, but the oil situation has caught up on them too soon for their taste, I’d say. And they NEED growth to avoid massive domestic turmoil.
I personnally doubt very much that the renminbi will be a major currency, even in the long term. You can have a dominant currency if you dominate trade patterns AND if people can trust the currency – i.e. can trust the institutions of the country. Actually, the situation where the biggest economy of the world is still seen as a mediocre political risk (because it is, don’t mistake size for trustworthiness) will be quite unprecedented and interesting to watch.
I’m still betting on the Euro, currency-wise.
Regarding Russia, I am still a pessimist. The country is a mess (it is hard to understand to what extent unless you have actually seen industrial sites or the country side). At best, it is the Netherlands in the middle of Zaire, i.e. one very wealthy market/city (with a few others) in the middle of a country slowly falling back into the middle age (with no public services, electricity only until the spare parts available locally exist because they will not be replaced, and an aging dying population). Putin is seen as an improvement because order is an improvement over chaos for the population, and he has been blessed with high oil prices. These might stay (as discussed elsewhere in this thread…), but there is not much else in the country that has a lot of potential or is not stifled by the bureaucracy.
As far as Russian strategy is concerned, their main “tool” is still their nukes, and more generally their ability to be a nuisance to the US (selling weapons or nuclear plants to the Axis of Evil). In the oil & gas sector, this has worked only in the gas sector, where they have such a huge advantage with their existing infrastructure (and a very “misunderestimated” company in Gazprom). In the oil sector, their policy of being a nuisance and their less strong grip on infrastructural options has led Western developers to avoid Russia for their new projects, focusing their upstream investment in Azerbaijan and Kazakhstan, and their pipe routes on Turkey (BTC).
Russia will keep on being a nuisance, which allows them to partially live off / racketeer the West and “exist”, but this is not how you get to be a serious player.
The interaction between Russia and China in Siberia (lots of resources, almost no population, but fiercely nationalist) will be an issue to watch – and this may be a “hot” war at some point. I expect the West to take Russia’s side, and I probably support that.

Posted by: Jérôme | Aug 19 2004 14:06 utc | 27

interesting alternatives:
SOLAR CHIMNEY:
http://www.solarmissiontechnologies.com/project-pilotplant.htm
http://www.enviromission.com.au/index1.htm
http://www.visionengineer.com/env/solar_flue.shtml
pictures:
pic,pic, pic,pic,
pic,pic,pic
SAHARA WIND:
http://www.saharawind.com/HVDCenergytransfer.htm
http://www.risoe.dk/konferencer/energyconf/presentations/giebel.pdf
SAHARA SOLAR:
http://www.waterstof.org/20030725EHECO5-54.pdf
http://www.f1.fhtw-berlin.de/studiengang/ut/publis/2004/SPS04.pdf

Posted by: MarcinGomulka | Aug 19 2004 14:38 utc | 29

A broken record: Oil up again New record tops $48-barrel as violence flares in Iraq, adding to supply concerns.
Evidence is mounting that China’s fast-growing economy is spurring on oil demand, intensifying competition for supply with established oil consumers like the United States and Japan.
Reuters reports that China’s refineries have processed 17.2 percent more crude so far this year than in 2003, citing the State Statistical Bureau. Crude imports have soared nearly 40 percent from last year.
And China plans to spend about $3.4 billion to lay 6,000 miles of oil pipelines over the next three years, more than the total pipeline built in the past three decades.
Fellow emerging economy India said its biggest refiner, State-run Indian Oil Corp. Ltd., expects the nation’s crude oil imports to rise by 11 percent between 2004 and 2005 with demand rising by nearly 4 percent.
Demand in the world’s largest oil consuming nation, the U.S., has jumped 3.4 percent this year. Inventory building slowed as rising consumption absorbed extra imports.
Prices have peaked in all but one of the past 15 trading sessions and are up more than $10 a barrel, or 28 percent, since the end of June.

Posted by: Jérôme | Aug 19 2004 15:49 utc | 31

Putin: I’d say, try to imagine a mix of Ivan the Terrible and Peter the Great.
What I wonder is if we could see an alignment between Russia and China; or, otherwise, if an India-China agreement and loose alliance could happen – both needing cheap energy and having basically no oil, not to mention troubled neighbors and fearing some Islamist threat.
Concerning Russia, as Jérôme said, the nukes are still one of the biggest asset. I’ve long thought that in the medium-term a European-Russian deal may well be done: Europe brings the money to support Russia, Russia brings the nukes to protect both.

Posted by: CluelessJoe | Aug 19 2004 16:30 utc | 33

Clueless Joe,
the alliances and adversaries are currently as follows:
* India VS Pakistan (Kashmir)
* China SUPPORTS Pakistan (nuclear and conv.)
Apparently China would like to “contain” India.
* Russia SUPPORTS India (already cooperated to create a super-cruisemissile, 3 times as fast as a Tomahawk)
* Russia SUPPORTS Iran (nuclear reactor)
* OTOH, US SUPPORTS Pakistan
* Russia SUPPORTS China (a limited naval-military and space cooperation)

Posted by: MarcinGomulka | Aug 19 2004 18:19 utc | 35

Basra – Iraq’s South Oil Co. headquarters torched

Posted by: Nemo | Aug 19 2004 19:04 utc | 37

China will slow down its economic growth. They know it is not sustainable this way and they do think longterm.
Zhou Enlai, asked about the impact of the French Revolution of 1789 he replied “It is too soon to say.”
@Jérôme
At what price is it feasable to convert coal to oil? China has plenty of coal and in WW II Germany did this extensivly.

Posted by: b | Aug 19 2004 19:13 utc | 39

Very interesting discussion here. As always, Jerome’s insights on oil and energy policy are invaluable.
When it comes to soft landings, though, I remain firmly in the gloom-and-doom crowd’s column. This is because of what I call “The Alligator Effect” (derived from the old Southern proverb: “When you’re up to your ass in alligators, it’s hard to remember that your original objective was to drain the swamp”).
If the only problem we faced as a civilization was increasing demand for this finite resource, then I’d be a lot more optimistic about technical fixes. What makes me a pessimist, though, is that there’s a hell of a lot of other resource problems (alligators, if you will) that are slithering around in the planetary swamp.
These are global problems, which can only be resolved on a global scale. (Ex: It doesn’t matter how energy-efficient/renewable Europe gets, if the Chinese start driving SUVs.) This will require unprecedented levels of cooperation between nations.
How this cooperation can occur, between nations armed to the teeth with the most destructive weapons in all of human history, each of them demanding a bigger share of a smaller pie, is something that I have yet to hear anyone address convincingly.
If you look back in history, most civilizations crash not because of a single cause, but a constellation of dilemmas. Their lucky streak comes to an end and they end up with snake-eyes on just about every throw of the dice.

Posted by: prof fate | Aug 19 2004 19:44 utc | 41

@ DeAnander
there was na excellent interview with Jean-Luc Domenach, the french sinologe and historian in the polish press. my quick translation:

What is China’s policy on international arena?
– They are looking forward to the showdown with the USA. They know, that they will have to wait 40 years for that moment, when China becomes an economic superpower. I have no doubt about that and every discussion with the people in power confirms my belief. The Chinese thinking is dominated by dialectics in line with the logic, ally with whom against whom. This kind of thinking led the Soviet Union to the Molotow-Ribbentrop Pact [ August 1939, a secret pact with the 3rd Reich; determined spheres of influence ].
Where do these emotions come from?
– China wants a historic revenge with The West for past humiliations, for opium wars, for everything, that we forgot about, but they did not.
Is this part of the American Right Wing, which tells us to fear China, right ?
– Yes and no. In 30-40 years, when China grows in power, it will have new rulers- satisfied, young, luxus fancing, softened by prosperity. They will be the offspring of today’s corrupt elite. Money has different consequences- both civilisation, but also moral decay. Their parents are buying flats on Champs Elysees and are setting up accounts in Swiss banks. The future generation will not want war.

Posted by: MarcinGomulka | Aug 19 2004 20:03 utc | 43

@jdp
we will still be used as the wotlds policeman. – who asks for this?
We spend more on defense than the next fifeteen countries combined – who pays for this?
Germany, total population:
1949 68.108,0
1960 72.973,3
1970 78.069,5
1980 78.397,4
1985 77.675,7
1989 79.145,8
1990 79.753,2
1991 80.274,6
1992 80.974,6
1993 81.338,1
1994 81.538,6
1995 81.817,5
1996 82.000,0 (est.)
Slow, steady growth and increasable at will.

Posted by: b | Aug 19 2004 20:38 utc | 45