The Peak Oil Paradox Revisited, by Raúl Ilargi Meijer

source: The Automatic Earth

M. King Hubbert
M. King Hubbert

It’s been a while since we posted an article by our friend Euan Mearns, who was active at The Oil Drum at the same time Nicole and I were. Is it really 11 years ago that started, and almost 9 since we left? You know the drill: we ‘departed’ because they didn’t want us to cover finance, which we said was the more immediate crisis, yada yada. Euan stayed on for longer, and the once unequalled Oil Drum is no more.

On one of our long tours, which were based around Nicole’s brilliant public speaking engagements, we went to see Euan in Scotland, he teaches at Aberdeen University. I think it was 2011?! An honor. Anyway, always a friend.

And there’s ono-one I can think of who’d be better at explaining the Peak Oil Paradox in today’s context. So here’s a good friend of the Automatic Earth, Euan Mearns:


Euan Mearns:
Back in the mid-noughties the peak oil meme gained significant traction in part due to The Oil Drum blog where I played a prominent role. Sharply rising oil price, OPEC spare capacity falling below 2 Mbpd and the decline of the North Sea were definite signs of scarcity and many believed that peak oil was at hand and the world as we knew it was about to end. Forecasts of oil production crashing in the coming months were ten a penny. And yet between 2008, when the oil price peaked, and 2015, global crude+condensate+NGL (C+C+NGL) production has risen by 8.85 Mbpd to 91.67 Mbpd. That is by over 10%. Peak oilers need to admit they were wrong then. Or were they?

Introduction

It is useful to begin with a look at what peak oil was all about. This definition from Wikipediais as good as any:

Peak oil, an event based on M. King Hubbert’s theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. Peak oil theory is based on the observed rise, peak, fall, and depletion of aggregate production rate in oilfields over time.

Those who engaged in the debate can be divided into two broad classes of individual: 1) those who wanted to try and understand oil resources, reserves, production and depletion rates based on a myriad of data sets and analysis techniques with a view to predicting when peak oil may occur and 2) those who speculated about the consequences of peak oil upon society. Such speculation normally warned of dire consequences of a world running short of transport fuel and affordable energy leading to resource wars and general mayhem. And none of this ever came to pass unless we want to link mayhem in Iraq*, Syria, Yemen, Sudan and Nigeria to high food prices and hence peak oil. In which case we may also want to link the European migrant crisis and Brexit to the same.

[* One needs to recall that GWI was precipitated over Kuwait stealing oil from Iraq, from a shared field on the Kuwait-Iraq border, leading to the Iraqi invasion of 1991.]

The peak oil debate on The Oil Drum was a lightning conductor for doomers of every flavour – peak oil doom (broadened to resource depletion doom), economic doom and environmental doom being the three main courses on the menu. The discussion was eventually hijacked by Greens and Green thinkers, who, not content with waiting for doomsday to happen, set about manufacturing arguments and data to hasten the day. For example, fossil fuel scarcity has morphed into stranded fossil fuel reserves that cannot be burned because of the CO2 produced, accompanied by recommendations to divest fossil fuel companies from public portfolios. Somewhat surprisingly, these ideas have gained traction in The United Nations, The European Union and Academia.

It is not my intention to dig too deeply into the past. Firmly belonging to the group of data analysts, in this post I want to take a look at two different data sets to explore where peak oil stands today. Is it dead and buried forever, or is it lurking in the shadows, waiting to derail the global economy again?

The USA and Hubbert’s Peak

The USA once was the poster child of peak oil. The Peak Oil theory was first formulated there by M. King Hubbert who in 1956 famously forecast that US production would peak around 1970 and thereafter enter an era of never-ending decline (Figure 1). Hubbert’s original paper is well worth a read.

hubbert1956

Figure 1 From Hubbert’s 1956 paper shows the peak and fall in US production for ultimate recovery of 150 and 200 billion barrels. The 200 billion barrel model shows a peak of 8.2 Mbpd around 1970 that proved to be uncannily accurate.

Continue reading The Peak Oil Paradox Revisited, by Raúl Ilargi Meijer

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The Pearl River Delta showcases the Chinese Dream, by Pepe Escobar

Source: RT

Buildings are seen through thick haze at the central business district in Guangzhou, Guangdong province © Alex Lee / Reuters
Buildings are seen through thick haze at the central business district in Guangzhou, Guangdong province © Alex Lee / Reuters

As President Putin, post-Brexit, rushed to discuss all matters pertaining to Eurasia integration with President Xi Jinping in Beijing, I embarked on a connected, parallel southern China journey.

From my base in Hong Kong, I set out on a Pearl River Delta loop, hitting Shenzhen and Dongguan and then Guangzhou, Zhuhai and Macau.

Why? Because this unprecedented, interconnected story of breakneck urbanization, technological innovation and post-modern megacity sprawl showcases no less than the future dreamed up by the collective leadership in Beijing. And it doesn’t hurt that southern China is the starting point of the Maritime Silk Road.

I was very privileged to visit Shenzhen and Guangzhou only a few days after the Little Helmsman Deng Xiaoping, then 88, embarked on his legendary six-week “southern tour” in January-February 1992. His target at the time was to turbo-charge the “get rich is glorious” Chinese manufacturing miracle, still in its infancy.

In the early 1990s, agriculture, mining and fishing were responsible for 27 percent of the Chinese economy, while manufacturing and construction accounted for 40 percent, and services for 30 percent, according to Hong Kong banking sources. At the start of the 2010s, agriculture was already down to only 10 percent, with manufacturing at 46 percent and services at 44 percent. A generation of business leaders often referred to as the “Gang of 92” – when many of them started – were imprinting their mark on a new China.

Now the Pearl River Delta – China’s number one hub of labor-intensive manufacturing – is in the process of replacing workers with robots on a large scale, a further sign that China is about to take off technologically, big time. And that’s all part of a “Made in China 2025” strategy announced only two months ago by Beijing, centered on relentless innovation – and commercialization. The China 2.0 new industrial revolution is a go – with a bang.

The megacity confederation

China today, on the ground, looks and feels like a confederation of megacities fiercely competing with each other for everything; investment (internal and foreign), industries, tech talent, global visibility. Beijing does support provinces and regions – much as the Song dynasty did – but up to a point. China, de facto, is already federalized. It’s up to each province to determine its own economic strategy.

That’s a long and winding road since the 1960s – when China was under the yoke of the Cultural Revolution (to seize the seismic shift, check out The Cultural Revolution: A People’s History 1962-1976, by University of Hong Kong professor Frank Dikotter, based on previously classified party documents). It’s also enlightening to compare it with the fact that the UN, during the 1960s, was starting to promote the concept of the Special Economic Zone (SEZ) as an infrastructure and growth template.

Now there are more than 4,000 SEZs scattered all across the world – living and breathing experiments of strategic investment bound to absorb working masses and turbo-charge modernity. And Shenzhen, of course, is the mother of all SEZs.

Continue reading The Pearl River Delta showcases the Chinese Dream, by Pepe Escobar

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ISIS is a US proxy army, by Tate Ulsaker

At some point, people are going to have to confront their own denial and admit that the US government is directly funding ISIS. These “accidental” transfers are made to look indirect. They are not indirect, they are directly moving from the US through US intermediaries to ISIS. What is so complicated about that?

If it happened once, maybe that could be called an accident.

If twice, there should be some court hearings and firings and possibly war crimes tribunals for those involved, but it still might be called an accident.

But you don’t call it an accident if the US is “accidentally” losing constant flows of small arms and money and convoys of artillery and missiles to ISIS through US paid intermediaries in Syria.

6 guardian

Experiment:
* Go to Google
* Type: US fund isis
* See result: https://www.google.co.nz/#q=us+fund+isis

What are the top 10 organic results today?:

1) Global Research – “America Created Al-Qaeda and the ISIS Terror Group” – http://www.globalresearch.ca/america-created-al-qaeda-and-the-isis-terror-group/5402881

Continue reading ISIS is a US proxy army, by Tate Ulsaker

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The new British Foreign Policy, by Thierry Meyssan

Source: Voltairenet

The Western Press keeps repeating the same message – by leaving the European Union, the British have isolated themselves from the rest of the world, and will have to deal with terrible economic consequences. And yet, the fall in the Pound could be an advantage within the Commonwealth, which is a far greater family than the Union, and present on all six continents. Famous for its pragmatism, the City could quickly become the international centre for the yuan and implant the Chinese currency in the very heart of the Union.

Elizabeth II, Queen of the United Kingdom of Great Britain and Northern Ireland, Antigua and Barbuda, Australia, the Bahamas, Barbados, Belize, Canada, Grenada, the Solomon Islands, Jamaica, New Zealand, Papua New Guinea, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, and Tuvalu.
Elizabeth II, Queen of the United Kingdom of Great Britain and Northern Ireland, Antigua and Barbuda, Australia, the Bahamas, Barbados, Belize, Canada, Grenada, the Solomon Islands, Jamaica, New Zealand, Papua New Guinea, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia, and Tuvalu.

The United States remain uncertain of their capacity to convince the European Union to participate actively in NATO, and the will of the United Kingdom to pursue the military alliance that they have been building together since 1941 for the purpose of dominating the world. Because despite the allegations of the European leaders, the Brexit does not isolate the United Kingdom, but enables it to turn to the Commonwealth and to create links with China and Russia.

Press-ganging the Europeans into NATO

The United States and the United Kingdom had planned to push the members of the Union to announce the increase of their military budget to 2% of their GDP during the Alliance summit in Warsaw (8 and 9 July). Besides this, there were plans for the adoption of a strategy for deploying forces at the Russian border, including the creation of a joint NATO–EU logistical unit which would enable the collective use of helicopters, ships, drones and satellites.

Until now, the United Kingdom was the most important contributor of the Union in matters of Defence, providing close to 15% of the EU defence budget. Apart from this, it was in charge of Operation Atalanta for the protection of maritime transports off the coast of the Horn of Africa, and had made its ships available in the Mediterranean. And finally, it was planned that the UK would furnish troops for the constitution of EU combat groups. With the Brexit, all these engagements are now null and void.

For Washington, the question is now whether London will or will not accept to increase its direct investment in NATO, of which it is already the second most important contributor, to compensate for the part it played in the EU – but without gaining any particular advantage by doing so. Although Michael Fallon, the current British Minister of Defence, has promised not to weaken the common efforts of NATO and the EU, no-one can see why London would agree to place new troops under foreign command.

As a result, and above all, Washington is questioning the will of London to pursue the military alliance that it has been building with the Crown since 1941. Of course, we should not rule out the possibility that the Brexit may be a British trick enabling them to renegotiate their «special relation» with «the Americans» to their advantage. However, it is much more probable that London hopes to extend its relations to Beijing and Moscow without necessarily forgoing the advantages of its entente with Washington.

The Anglo-Saxon secret agencies

During the Second World War, and even before they joined the war, the United States concluded a pact with the United Kingdom which was clearly laid out in the specifics of the Atlantic Charter [1]. It called for the two countries to unite in order to guarantee freedom of maritime circulation and the extension of free trade.

This alliance was implemented by the «Five Eyes» agreement, which currently serves as the basis for the cooperation between 17 Intelligence agencies from 5 different states (the United States and the United Kingdom, as well as three other members of the Commonwealth – Australia, Canada and New Zealand).

The documents revealed by Edward Snowden attest that the Echelon network in its current form constitutes «a supranational Intelligence agency which is independent of the laws of its own member states». So the «Five Eyes» have been able to spy on personalities like the Secretary General of the UNO and the German Chancellor, and at the same time, carry out mass surveillance on their own citizens.

Continue reading The new British Foreign Policy, by Thierry Meyssan

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The Three Harpies are Back!, by Pepe Escobar

Source: counterpunch

shutterstock_386144401-2-1

Those were the days when Libya (“We came, we saw, he died”) offered to the world a full-blooded humanitarian imperialist spectacle starring Three American Harpies: Hillary Clinton, Samantha Power and Susan Rice, actually four if Hillary’s mentorette and soul mate, Madeleine Albright, was included.

Pop cynics felt tempted at the time to coin those Amazons-in-waiting Brunhilde and the Valkyries. Or at least to qualify perma-smirker Hillary as Attila The Hen.

So let’s kill the suspense. There will be, predictably, a sequel. And it even comes with a somewhat highbrow preview, titled Expanding American Power, published by the Center for a New American Security (CNAS) think tank .CNAS happens to be co-founded – and led – by former Undersecretary of Defense Michele Flournoy, who served in the Obama Administration under Leon Panetta.

Also predictably, CNAS and its combative paper read as a sort of grand PNAC remixed – including some of those same old neocon/neoliberalcon faces; Elliot Abrams, Robert Zoellick, Martin Indyk, Dennis Ross, and of course Flournoy herself, who a Beltway consensus already identifies as the next Pentagon head under a President Clinton.

In this context, Exceptionalistan rules in all its forms – from thejuicy defense contractor donor list to the emphasis on NATO on trade via the Trans-pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). After Brexit though, implementing TTIP will be a tall order – and that’s a mighty understatement.

Pentagon-in-waiting Flournoy was recently quoted as willing to send “more American troops into combat against ISIS and the Assad regime than the Obama administration has been willing to commit.”

Well, not really. She actually responded to the piece, arguing she’s in favor of “increasing U.S. military support to moderate Syrian opposition groups fighting ISIS and the Assad regime, like the Southern Front, not asking U.S. troops to do the fighting in their stead.”

Continue reading The Three Harpies are Back!, by Pepe Escobar

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John Pilger: Why the British Said No to Europe, by John Pilger

Source: telesur

John Pilger strikes a blow to the hypocrisy of a wider political culture that apologizes for the crimes of the EU while denigrating the nation’s poor.

The majority vote by Britons to leave the European Union was an act of raw democracy. Millions of ordinary people refused to be bullied, intimidated and dismissed with open contempt by their presumed betters in the major parties, the leaders of the business and banking oligarchy and the media.

This was, in great part, a vote by those angered and demoralized by the sheer arrogance of the apologists for the “remain” campaign and the dismemberment of a socially just civil life in Britain. The last bastion of the historic reforms of 1945, the National Health Service, has been so subverted by Tory and Labour-supported privateers it is fighting for its life.

A forewarning came when the treasurer, George Osborne, the embodiment of both Britain’s ancient regime and the banking mafia in Europe, threatened to cut 30 billion pounds from public services if people voted the wrong way; it was blackmail on a shocking scale.

Immigration was exploited in the campaign with consummate cynicism, not only by populist politicians from the lunar right, but by Labour politicians drawing on their own venerable tradition of promoting and nurturing racism, a symptom of corruption not at the bottom but at the top. The reason millions of refugees have fled the Middle East—first Iraq, now Syria—are the invasions and imperial mayhem of Britain, the United States, France, the European Union and Nato. Before that, there was the willful destruction of Yugoslavia. Before that, there was the theft of Palestine and the imposition of Israel.

The pith helmets may have long gone, but the blood has never dried. A nineteenth century contempt for countries and peoples, depending on their degree of colonial usefulness, remains a centerpiece of modern “globalization,” with its perverse socialism for the rich and capitalism for the poor: its freedom for capital and denial of freedom to labor; its perfidious politicians and politicized civil servants.

All this has now come home to Europe, enriching the likes of Tony Blair and impoverishing and disempowering millions. On 23 June, the British said no more.

The most effective propagandists of the “European ideal” have not been the far right, but an insufferably patrician class for whom metropolitan London is the United Kingdom. Its leading members see themselves as liberal, enlightened, cultivated tribunes of the 21st century zeitgeist, even “cool.” What they really are is a bourgeoisie with insatiable consumerist tastes and ancient instincts of their own superiority. In their house paper, The Guardian, they have gloated, day after day, at those who would even consider the EU profoundly undemocratic, a source of social injustice and a virulent extremism known as “neoliberalism.”

Continue reading John Pilger: Why the British Said No to Europe, by John Pilger

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BREXIT – LET THE UK SCREW ITSELF!, by Andre Vltchek

ONCE AGAIN, EUROPEAN BIGOTRY EXPOSED!

By: Andre Vltchek

Oh that poor old United Kingdom! Armies of political commentators based on all continents are now feverishly trying to define to what extent the Brits got fooled, or how severely they will soon get punished for their ‘bold move’.

All over Europe, the neo-Nazis and other right-wingers are celebrating, while most of ‘liberals’ are panic-stricken, running around like a herd of headless chickens, or howling at the moon at night in despair. The Euro-left (as pathetic and bogus as “Euro business class” on domestic European flights) is trying to put the recent referendum into some sort of philosophical perspective, blabbering something about a working class rebellion against the ruling elites.

Some Europeans are even blaming Mr. Putin for the outcome of the referendum, while others see behind the outcome of the vote the specter of an “American conspiracy” or even a “Zionist lobby”.

Things are much more simple. A few million bigoted British voters, many of them old retirees and traditionally conservative, even racist bunch, got scared that their country was soon about to be invaded by unkempt hordes of refugees, or more precisely – by ‘un-people’ (to borrow from George Orwell’s lexicon). While for others, the referendum became a way to express their frustration with the fact that the British working class has lately been getting an increasingly awful deal (read: an increasingly smaller cut from that enormous global loot plundered by both Europe and North America).

Don’t search for any flickers of internationalism or traditional Left-wing ideals in the hearts of those who voted for “Exit”. A great majority of the anti-EU warriors was simply demanding better benefits for itself (the “British people”), as well as “Britain for the Brits” (whatever that really means in this increasingly multi-racial nation).

Of course, the same can be said about the opposite camp! Those who were voting for remaining in the Union were doing so for strictly practical reasons.

Almost no commentator bothered to notice what was truly shocking about the entire referendum process: an absolute lack of progressive ideology, of internationalism and concern for the world as a whole. Both sides (and were there really two sides there) presented a fireworks of shallow selfishness and of pettiness. The profound moral corruption of the West was clearly exposed.

Continue reading BREXIT – LET THE UK SCREW ITSELF!, by Andre Vltchek

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Russia’s Achilles Heel – Reflections from St. Petersburg, by F. William Engdahl

Source: New Eastern Outlook

For three days this month, June 16-18, I had the opportunity to participate as a panelist in the annual St. Petersburg International Economic Forum in Russia. I’ve been in Russia many times since the Ukraine US-backed coup d’état of February 2014, and the deliberate escalations of NATO military and economic tensions and sanctions against the Russian Federation. This year’s forum, my second as participant, gave me a rare opportunity to speak with leading representatives from every sector of the Russian economy- from CEOs of the energy sector to the Russian Railways to the national Russia Grid electricity provider to numerous small and mid-sized businessmen, to a wide range of economists. It sharpened my perception of just how precarious the situation of Russia today is.

What became clearer to me in the course of the three days of discussions in St Petersburg is precisely how vulnerable Russia is. Her Achilles Heel is the reigning ideology that controls every key economic post of the Government of the Russian Federation under Prime Minister Dmitry Medvedev. Under the terms of the Russian Constitution adopted in the chaos of the Yeltsin years and enormously influenced, if not literally drafted, by Russia’s foreign IMF advisers, economic policy is the portfolio responsibility of the Prime Minister and his various ministers of Economics, Finance and so forth. The Russian President, today Vladimir Putin, is responsible for defense and foreign policy.

Making the job virtually impossible of reviving credit flows to fuel genuine real investment in urgently needed infrastructure across the vast land expanse of Russia is the Central Bank of Russia. The Central Bank of Russia was given two constitutionally-mandated tasks when it was created as an entity independent from the Russian Government in the first months of the Russian Federation following the breakup of the Soviet Union. It must control Russian domestic inflation and it must stabilize the Ruble against major foreign currencies. Like western central banks, its role is almost purely monetary, not economic.

In June, 2015 as I participated the first time in the St Petersburg forum, the Russian Central Bank base rate, interest charged to banks, was 11%. In the peak of the so-called Ruble crisis in January 2015 it had reached 17%. Expectations last summer were that Elvira Nabiullina, the central bank governor since 2013, would begin to bring central rates rather rapidly down to manageable levels, especially at a time when central banks such as the European Central Bank, the US Fed and the Bank of Japan were lowest in some 500 years at zero or even negative. Further, since January 2016 oil prices, a significant factor in the Ruble strength as Russia is the world’s largest oil exporter, began a rise of more than 60% from lows below $30 a barrel in early January to levels near $50 six months later.

That lowering of rates by the Central Bank hasn’t happened. Instead it is slowly killing the economy. One year later, in early June, 2016 the Russian Central Bank under Governor Nabiullina made the first rate cut since June 2015…to a still-deadly 10.5%. Perhaps it’s notable that monetarist Nabiullina was named by the London Euromoney magazine as their 2015 Central Bank Governor of the Year. That should be seen as a bad omen for Russia. Equally ominous was the fulsome praise the head of Washington’s IMF had for Nabiullina’s monetarist handling of the early 2015 Ruble crisis.

Continue reading Russia’s Achilles Heel – Reflections from St. Petersburg, by F. William Engdahl

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