The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Friday, April 5, 2013

Oil Prices: Once Bitumen Twice as High.

Wants Bitumen; Price High

In the last week, there has been a plethora of disconnected connectedness that would give James Burke of that wonderful BBC series, "Connections" an entire season of work. 

First, Chris Hedges gives the elites of the Left a well-deserved slap with his piece featured on Paul Craig Roberts' website posted on "Common Dreams", entitled "The Treason of Intellectuals", in which he spares none of the Iraq apologists who ten years ago,  "acted not only as cheerleaders for war; in most cases they ridiculed and attempted to discredit anyone who questioned the call to invade Iraq. Kristof, in The New York Times, attacked the filmmaker Michael Moore as a conspiracy theorist and wrote that anti-war voices were only polarizing what he termed “the political cesspool.” Hitchens said that those who opposed the attack on Iraq “do not think that Saddam Hussein is a bad guy at all.” He called the typical anti-war protester a “blithering ex-flower child or ranting neo-Stalinist.” The halfhearted mea culpas by many of these courtiers a decade later always fail to mention the most pernicious and fundamental role they played in the buildup to the war—shutting down public debate. Those of us who spoke out against the war, faced with the onslaught of right-wing “patriots” and their liberal apologists, became pariahs".

The "Shutting down  public debate" clause then connects us to William Greider's excellent article, published in the Nation posted and on Yves Smith's Naked Capitalism blog, that so-called 'conscience of a gliberal", Ms. Paul, The Krug, in which Greider reminds us that those who disagreed with Krugman on 'Free Trade', using common sense and knowledge of how real capitalism works as opposed to the pollyanna version of it, to predict that moving industries to a communist totalitarian regime where labor is powerless to make demands for a safe work environment, unpolluted water and air, never mind living wages, would of necessity drive down wages in American companies that were moving their entire manufacturing facilities to China. Instead, Ms. Paul insisted that it would have no downward pressure on wages in the USA, stating that, “A likely outcome is that high-tech goods will be produced only in the North [the advanced industrial economies], low-tech goods only in the South [low-wage developing economies], proving that a liberal conscience can accommodate a liberal dose of racist attitudes, while spouting absolute nonsense in the process. The way he shut down public debate was by, as Greider notes, ridiculing opponents like organized labor as being typically backward Luddites, promoting what Krugman called “disguised protectionism.” That label scared off major media. Reporters take their cues from the “supposed authority” of business leaders and scholarly experts. At the most prestigious newspapers, reporters and editors simply ignored the substantive critiques of free trade orthodoxy as not worthy of their investigation. After thirty years, the case against free trade is still a taboo subject in respectable circles."

By 'respectable circles', he, of course, means those same vapid, bankrupt intellectuals who cowardly folded to the Bush regime's war-mongering and went along with it, as they cheekily described War as only a 'cakewalk', a little lark, a walk in the park to clear out the cobwebs. The utter destruction to be visited upon the Iraqi people was given nary a thought as we demonstrated once again Democratic institutions' impotence at stopping arbitrary aggression while simultaneously using the supposed desire to impose Democracy on Iraq as one of the trumped-up pretexts for the invasion.  Never mind that the powers in Europe were dead-set against it before WW2, and it was the fight against it, often disguised as a fight against Communism (England's Cliveden set, for one, considered Democracy and Communism to amount to much the same thing), left Europe in utter ruin. 

And you can't mention Iraq War without mentioning oil, and Peak Oil in particular. 

For a world heading pell mell into disaster because of the burning of fossil fuels, since the turn of the millennium the burning of the dirtiest of these, Coal, has doubled, while Exxon, for one, denies there's any such thing as peak oil. Yet now, per Exxon, as revealed in an article in Commondreams regarding an oil spill in Arkansas, diluted bitumen from Alberta tar sands' heavy crude, is mysteriously not classified as oil, because, according to the U.S. Department of Energy, these unconventional oils cannot be produced, transported, and/or refined using traditional techniques. They require new, highly energy intensive production techniques and new processes to deal with their inaccessible placements and unusual compositions. 

So, if there is in fact, no such thing as Peak Oil, why would a capitalistic system choose to instead, knowing the escalating costs and increasing frequency of climate change events, choose to arbitrarily use the dirtiest energy source known to man, and these unconventional 'oils', which are, Exxon admits, not oil at all, when there is no such phenomena as Peak Oil? Why aren't they extracting all this supposed oil and using it for our transportation and electric production instead of unconscionably accelerating the world's warming by producing these esoteric and much more energy-intensive (ie they must burn even MORE oil just to transport and refine them) products? What possible reason can there be, when, if they are to be believed,  simply pumping out all that oil they insist is there for the taking will meet our energy needs in a much cleaner, cheaper and less disastrous manner?

The answer to that is reflected in the escalation in oil prices since the turn of the millennium. When GW took office in 2001, the price per barrel of oil was $11. $11! It is now averaging closer to $111.00. The costs of providing energy to our economies has increased by a factor of TEN. (their productivity, however, is in an historical decline no amount of QE can disguise).  But, apparently NOT because there is a dwindling amount of oil, there's no such thing as peak oil, remember?  There's plenty of it. we're awash in the stuff, per Cera's "the oil is surgin'" Yergin, and Rob Wile the author of, "Peak oil is dead," sentiments echoed by Colin Sullivan, who says,per an article on, that it has "gone the way of the Flat Earth Society", writing that "Those behind the theory appear to have been dead wrong", even as every single one of the results expected and predicted by such prognosticators as Michael Klare, Colin Campbell, and Matt Savinar, to name a few, have come to a disastrous fruition and resulted in, because the obvious was denied, an intractable global depression. A phenomena that is, in turn, denied, even as Central Banks around the globe debauch their currencies and Sovereign States subject their citizens to crippling austerity in a bid to pretend everything is normal: "Move along folks, nothing to see here".

Denying the obvious has gotten us to this place in history and will bring us to the place we're heading to in 2014: the same one, as i have said in the past, it got us to in 1914. Rather than admit the failure of the uber-energy consuming paradigm of the world that the US created after WW2, the puerile "Jetson" fantasies of hyper-mobility for all, we will heedlessly speed into the wall of resource constraint that will end up the only way it has always ended up: World War, so that we can annihilate all the 'excess  population" in order to make our expectations of those who survive the slaughter fit in with our pre-determined concept of what a motorized life should be. In the process, we will go on denying the truth: there is no Peak oil, oil is not oil, the banks are not insolvent, only Dictatorships cause Wars, everyone should drive ever-larger vehicles everywhere they go, that will get ever-increasing gas mileage while more and more roads being paved over arable land won't impact our food supply, nor will growing acre upon acre of corn to burn up as fuel, after being processed in a coal-fired plant, 1000 of which were built during the Bush administration, even as China halted their own ethanol program (WHY oh WHY does an 'energy independent' USA have to make ANY gasoline from food?). Lies matter. They compound one upon the other until Exxon can tell us oil is not oil. Yeah, and deficits don't matter, War is a cakewalk, this 2-bedroom shack is worth half a million dollars, teachers should be armed in the classroom, the Defense Department increases our security, TBTF banking isn't, like 'extend and pretend' accounting, simply a euphemism for fraud, you have deposit insurance, and all debts will be paid, and we just shrug. Whatever. TGIF. I need a drink.

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