A barrel of Brent Crude (the truest indicator of worldwide oil scarcity) sits at $118, up from $75 per barrel in July 2010 – a 57% increase in eleven months. In the U.S., the average price of gasoline is $3.69 per gallon this week, up 37% in the last year and up 100% in the last 30 months.
The pundits and politicians are responding predictably. They blame the Libyan revolution, the dreaded speculators and that old fallback – Big Oil. When the Middle East turmoil began in earnest in January, gas prices had already risen 15% in three months, spurred by increased worldwide demand and by Ben Bernanke’s printing press. Congressmen have reacted in their usual kneejerk politically motivated fashion by demanding that supplies be released from the Strategic Oil Reserve.
Congress has a little trouble with the concept of “strategic.” They also have difficulty dealing with a reality that has been staring them in the face for decades. Politicians will always disregard prudent, long-term planning for vote-generating talk and gestures.
The Long Term
Peak oil has been a mathematically predictable occurrence since American geophysicist M. King Hubbert figured out the process in 1956. His model predicted that oil production in the United States would peak in 1970. He wasn’t far off. In 1971, when the U.S. was producing 88% of its oil needs, domestic production approached 10 million barrels per day and has been in decline ever since.
The Department of Energy was established in 1977 with a mandate to lessen our dependence on foreign oil. At the time, the U.S. was importing 6.5 million barrels per day. In 1985 the country was still able to produce enough to cover 75% of its needs. Today, 34 years later, the U.S. imports 10 million barrels per day, almost half of what it uses.
President Obama’s 2011 Budget proposal included priorities for the DOE:
Positions the United States to be the global leader in the new energy economy by developing new ways to produce and use clean and renewable energy.
Expands the use of clean, renewable energy sources such as solar, wind and geothermal while supporting the Administration’s goal to develop a smart, strong and secure electricity grid.
Promotes innovation in the renewable energy sectors through the use of expanded loan guarantee authority.
That’s what goes on in talk space.
Back on planet Earth, not a single U.S. oil refinery or nuclear power plant has been built since 1977. Decades of inaction and denial have left our energy infrastructure obsolescent and decaying. Pipelines, tanks, drilling rigs, refineries and tankers have passed their original design lives. The oil industry is manned by an aging workforce of geologists, engineers and refinery hands. Many are nearing retirement, and there are few skilled personnel to replace them.
Denial of peak oil becomes more dangerous by the day. The Obama administration prattles about clean energy, solar, wind and ethanol, when petroleum powers 96% of the transportation sector and 44% of the industrial sector. Coal provides 51% of the country’s electricity, and nuclear accounts for another 21%. Renewable energy contributes only 6.7% of the country’s energy needs, mostly from hydroelectric facilities.
Ethanol works nicely as a slogan but poorly as a solution. The ethanol boondoggle diverts 40% of the U.S. corn crop to fuel production. The real cost to produce a gallon of ethanol (tariffs, lost energy, higher food costs) exceeds $7 and has contributed to the price of corn rising 112% in the last year. The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 would have been enough to feed 330 million people for one year.
The most worrisome aspect of peak oil is that our government leaders have known of it and have chosen to do nothing. The Department of Energy requested a report from widely respected energy expert Robert Hirsch in 2005. The report clearly laid out the dire situation:
The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
World oil peaking is going to happen, and will likely be abrupt. World production of conventional oil will reach a maximum and decline thereafter.
Oil peaking will adversely affect global economies, particularly the U.S. Over the past century, the U.S. economy has been shaped by the availability of low-cost oil. The economic loss to the United States could be measured on a trillion-dollar scale.
The problem is liquid fuels for transportation. The lifetimes of transportation equipment are measured in decades. Rapid changeover in transportation equipment is inherently impossible. Motor vehicles, aircraft, trains and ships have no ready alternative to liquid fuels.
Mitigation efforts will require substantial time. Waiting until production peaks would leave the world with a liquid fuel deficit for 20 years. Initiating a crash program 10 years before peaking leaves a liquid fuels shortfall of a decade. Initiating a crash program 20 years before peaking could avoid a world liquid fuels shortfall.
World liquid oil production has never exceeded the level reached in 2005. It becomes more evident by the day that worldwide production has peaked. Robert Hirsch was correct. The world will have a liquid fuel deficit for decades.
The Short Term
The International Energy Agency has been increasing its estimates for world oil consumption to over 90 million barrels per day by the 4th quarter of 2011, led by strong demand from China, India and the rest of the emerging world. World supply was already straining to keep up with this demand before the recent tumult in the Middle East. The mayhem in Tunisia, Egypt, Libya, Bahrain, Yemen and Iran has already taken 1.5 million barrels per day off the market, according to the IEA.
The Obama administration and mainstream media continue to downplay the economic impact of the conflagration spreading around the world. The risk that oil prices gush toward the 2008 highs is much greater than the likelihood that this turmoil will subside and oil prices fall back to $80 per barrel. As the following chart shows, the daily oil supply coming from countries already experiencing revolution or in danger of uprisings is nearly 8 million barrels per day, or 9% of world supply. No country can ramp up production to make up for that shortfall.
Proven Oil
Oil
Country
Reserves (billion barrels)
Production Per Day
Saudi Arabia
265
9,000,000
Iran
137
3,700,000
Iraq
115
2,700,000
UAE
98
2,300,000
Kuwait
102
2,300,000
Libya
46
1,600,000
Algeria
12
1,300,000
Qatar
25
820,000
Oman
6
810,000
Egypt
4
742,000
Syria
3
376,000
Yemen
3
298,000
The Washington DC spin doctors are now assuring the American people that Saudi Arabia can make up for any oil shortfall. Saudi Arabia has declared it has already turned the spigot on and will produce 10.0 million bpd, up from 8.5 million bpd.
Is this replacement production real? A leading industry expert revealed that the Saudis were already producing 8.9 million bpd in January. Hype and misinformation won’t fill your SUV with cheap gas. Saudi production peaked at 9.8 million bpd in 2005. When prices spiked to $147 per barrel in early 2008, their production grew only to 9.5 million bpd. Saudi oil fields are 40 years old and are in terminal decline. Their “spare capacity” doesn’t exist.
And the media ignore the quality difference between Libyan crude and Saudi crude. Libya’s oil is a perfect feedstock for ultra-low-sulfur diesel. The oil Saudi Arabia will supply to replace it is not. It takes three barrels of Saudi crude to yield the same quantity of diesel fuel as one Libyan barrel of crude, and only specially designed refineries can process high-sulfur Saudi oil.
The problem isn’t just turmoil in the Middle East. The Persian Gulf provides 17% of U.S. imports; 22% comes from Africa, 10% from Venezuela and 15% from Mexico. Many of these countries hate us. Mexico, although a relatively friendly country, will become a net importer of oil in the next five years, as its Cantarell oil field is in rapid decline. They’ll have nothing to sell to us.
The long and the short of it is that sunshine, corn and wind will not keep Americans from paying $5 per gallon or more for gas in the near future. The financial implications are that oil and energy investments will produce solid returns over the coming years.
This article was originally published in the Casey Report.
The two articles below paint a bleak picture for the owners of SUVs, pickup trucks, Hummers and sports cars.
The Arabs are liars. They know that Americans are dupes and will believe any story that makes them feel comfortable. OPEC hates America. They have been lying about their oil reserves for years. They are lying now. Saudi Arabia declared a couple months ago that they would make up for the 1.5 million barrels per day that left the market when Libya erupted in war. It didn’t happen. They have now declared they will produce 10 million barrels per day. One small problem. They can’t. They have never ever produced more than 9.6 million barrels per month and that was when prices reached $140 per barrel. Their oil fields are 40 years old. They are depleting. That is what happens to oil wells. They run out.
You have the biggest producer in the world that can barely increase production (of sour oil) and you have China and India increasing their demand by double digits. Then you have Saudi Arabia spending $150 billion per year on their military as they prepare for a major war in the Middle East. You already have civil war in all the countries surrounding Saudi Arabia. The rumblings about Israel attacking Iran grow louder. Do you think Iran has any missiles pointed at Saudi oil fields and refineries?
Anyone who thinks this Fourth Turning is going to ratchet down in intensity, just ain’t paying attention. When the Middle East explodes, the US economy will blow sky high. When the price of oil hits $200 per barrel, the American way of life implodes. Nothing will work at $200 per barrel. Riots, looting, and general all around chaos will be unleashed. It should be fun.
Saudi oil spare capacity shrinking fast
Reuters Jun 14, 2011 – 8:05 AM ET | Last Updated: Jun 14, 2011 10:20 AM ET
By Barbara Lewis and Braden Reddall
LONDON/HOUSTON — Saudi Arabia’s cushion of spare oil capacity is thinning far faster than widely believed, threatening to trigger price spikes in the months ahead, energy industry experts warned at the Reuters Global Energy and Climate Summit on Monday.
Concerns are growing over the kingdom’s ability to pump more oil beyond an anticipated summer boost, leaving the world exposed to any further unexpected disruptions. The world’s top exporter promised to produce as much oil as the market needs after the Organization of the Petroleum Exporting Countries last week failed to reach a deal.
Saudi newspaper al-Hayat reported Saudi Arabia would boost output to 10 million barrels per day (bpd) in July, which Goldman Sachs’ global head of commodities research Jeff Currie said would leave only 500,000 bpd spare. Currie and his team have warned for months about overstated Saudi output capacity.
“If you get up to (10 mln bpd), you start to really create a very tight market relative to spare capacity,” he told the Reuters Global Energy and Climate Summit in London.
“But the question that’s more appropriate is when do you get to 9.5, when do you get to 10? Because when you start to look out over the horizon, their ability to create more flexibility in spare capacity increases tremendously.”
Peter Oosterveer, group president for energy and chemicals with global engineering giant Fluor Corp, recently met with executives in the Middle East, and returned with a feeling that Saudi Arabia’s capacity was not as large as some estimates.
He did not provide any specific numbers on the kingdom’s overall production, but said workable spare capacity was in the range of 1.5 to 2 million bpd.
“That doesn’t mean to say that it isn’t ultimately available,” Oosterveer said at the Summit. He added that there did not seem to be a great deal of concern in Saudi Arabia about the current level of capacity.
“There’s always a lot of activity in Saudi, and there’s still a lot of activity in Saudi as we speak,” he added, with more focus there on exploration and production projects compared with two or three years ago.
Saudi Arabia is the only country in the world with a significant base of idle capacity, and therefore can act as a supplier of last resort in times of crisis. It has already ramped up output following the halt in Libya’s over 1 million bpd of oil exports, and is expected to pump more shortly.
Following a wave of investment as oil surged to a record high US$147 a barrel in 2008, Saudi Arabia says its capacity stands at 12.5 million bpd, giving it a comfortable cushion based on recent output estimates.
But analysts are still beginning to debate the risk of a repeat of the last decade, when years of underinvestment and a surge in Chinese demand forced OPEC to pump nearly flat out, drawing down their reserve to less than 1 million bpd.
That fundamental tightness underpinned the five-year rally that lifted prices six-fold until 2008. While few expect that to recur as spectacularly, some are warning of spikes.
“Once spare capacity falls below 2 million bpd, which will be sometime next year, then we will see substantial spikes in the oil price from time to time,” Robeco fund manager Peter Csoregh told the Summit.
“There’s an inherent bias, especially in the Middle East and Saudi Arabia, to overstate their spare capacity.”
Saudi Arabia Prepares for a Crude Oil War
Justice Litle, Editorial Director, Taipan Publishing Group
Monday, 13 June 2011
In a truly alarming development, Saudi Arabia is gearing up for all-out crude oil war in the Middle East.
Right now, the world is in a deflationary state.
While countless other outlets have gone on endlessly about inflation, we have warned repeatedly in these pages that the “D” word is not dead. U.S. Treasury bond yields, a harbinger of deflation, have been falling, not rising. Now the broad markets are falling too.
There is hope that emerging markets (particularly China) will be able to bail out the world, once again, if the West slows down and falls back into a funk. But it is a weak, false hope.
China ginned up the economic juice of recent years through a massive 2009 half-trillion-dollar stimulus program — far, far bigger than America’s stimulus program, relative to the size of the Chinese economy. China can’t do that again without unleashing melt-your-eyeballs inflation.
The Federal Reserve is similarly “out of bullets”… and Quantitative Easing 2 did not help the real economy anyway. So now things are slowing down again, with crisis in the wings. Deflation pressures are back, as monetary velocity threatens to stall out.
All of the above is very bearish for the price of crude oil. It explains why crude oil could fall all the way back to $60 a barrel under the right combination of events, with long-side commodity bulls getting crushed to powder.
But there is one very big reason to be bullish on the crude oil price — or at least not bearish: The Middle East could soon be in flames.
(Don’t forget, you can sign up for Taipan Daily to receive all of my and fellow editor Joseph McBrennan’s investment commentary.)
Did you watch the Lord of the Rings movies? Do you remember the scene where the wizard Saruman is building his subhuman army, preparing weapons in deep fire pits on a mass scale?
Your editor was reminded of that imagery on reading about Saudi Arabia’s latest. The following, via CNN, is from Nawaf Obaid, a Senior Fellow at the King Faisal Center in Riyadh:
As the birthplace of Islam and the leader of the Muslim and Arab worlds, Saudi Arabia has a unique responsibility to aid states in the region, assisting them in their gradual evolution toward more sustainable political systems and preventing them from collapsing and spreading further disorder.
That the Kingdom has the ability to implement this foreign policy goal should not be in doubt – it is backed by significant military and economic strength.
The foundation for this more robust strategic posture is Saudi Arabia’s investment of around $150 billion in its military. This includes a potential expansion of the National Guard and Armed Forces by at least 120,000 troops, and a further 60,000 troops for the security services at the Interior Ministry, notably in the special and various police forces. A portion of these will join units that could be deployed beyond the Kingdom’s borders.
In addition, approximately 1,000 new state-of-the-art combat tanks may be added to the Army, and the Air Force will see its capabilities significantly improve with the doubling of its high quality combat airplanes to about 500 advanced aircraft.
A massive new missile defense system is in the works. Finally, the two main fleets of the Navy will undergo extensive expansion and a complete refurbishment of existing assets.
As part of this new defense doctrine, the leadership has decided to meet the country’s growing needs for new equipment by diversifying among American, European and Asian military suppliers.
Few countries are able to support such considerable military investment, but Saudi Arabia occupies a unique position in that it has sufficient reserves and revenues to carry out the above plans…
Read it again. Consider the implications. Saudi Arabia is preparing for WAR.
Mr. Obaid, taking the Saudi point of view, sees it as a good thing that The Kingdom has the resources to implement “peace through superior firepower” in the Middle East.
But the whole point is that the Saudis see the need to gear up for war in the first place…
The Middle East is a long-simmering cauldron of ancient hatreds and deadly conflicts. The two major players are the Saudis — who are Sunni Muslim — and the Iranians, who are Shia.
Saudi Arabia and Iran hate each other. They are the Hatfields and McCoys of the region, on a far more serious scale.
And Saudi Arabia has good reason to loathe and fear Iran. Were the Saudi power structure to be toppled, that would leave the Sunni branch of Islam decapitated… allowing Shia Iran to dominate.
The “Arab Spring” of uprisings and turmoil is going to lead to war because significant interests in the region want war. They want conflict. The turmoil and uncertainty of toppling regimes has created a golden opportunity. Out of chaos and rubble, new structures can emerge. New power brokers can replace the old.
As the rich player with the most to lose, Saudi Arabia knows all this. And the Saudis are terrified. That is why they are ordering a thousand tanks. That is why they are building “a massive new missile defense system.”
The Kingdom is preparing for local Armageddon. Too bad all that preparation won’t help them, though, because warfare is no longer broad-based and symmetrical. It is more about terrorism and guerilla ambush than full-scale attack.
Except when it comes to one country attacking another in response to a clearly instigated terrorist event… like the destruction of a major Saudi oil facility…
And by the way, because we are talking Middle East here, local Armageddon means global Armageddon (as far as crude oil prices go).
With deflationary pressures building, Western economies slowing, and the China miracle threatening to stall, a spike in crude oil to $200 a barrel as the Middle East erupts in a giant fireball would be just about the worst scenario imaginable for the global economy.
Crude oil spiking to that price would act like a massive non-optional transaction tax. Millions of Americans would lose the ability to fill up their cars with gas. The transport cost of goods would go through the roof. Store shelves would be left unstocked, as the goods became too expensive to shift and a panicked populace had stopped buying them anyway.
It would be nice if this were all a bad dream, or just some fantastical movie plot. But it isn’t. It is very, very real.
What the Saudis are telling us is that, sooner rather than later, the Middle East could explode… and we understand the rationale as to why.
Will you be ready when the price of crude oil goes to $200 overnight? Ready or not, we may have no choice.
UN vote is at 6:00 pm. Get ready for fireworks. Remember Colin Powell’s sage advice. “If you break it, you buy it.” Expect Iran to take advantage of our distracted naval forces.
As the uprising in Libya continues, we update you with the latest developments from our correspondents, news agencies and citizens across the globe. Al Jazeera is not responsible for content derived from external sites.
The head of the Benghazi-based Libyan National Council says that the opposition’s fighters will “stand firm” and not be deterred by Gaddafi’s threats, Reuters reports.
Timestamp: 10:41pm
Gaddafi did an interview with RTP, a Portuguese television station, this evening. In it, he said:
The Security Council has not got the right to interfere in the internal affairs of any state. It would be a flagrant colonisation, without any justification. A serious and grave [inaudible]. This is craziness, madness, arrogance. If the world gets crazy with us, we will get crazy too…”
Asked what he means by ‘get crazy’, Gaddafi said:
We will respond. We will make their lives hell, because they are making our lives hell. They will never have peace.”
Timestamp: 10:27pm
Francois Fillon, the French prime minister, has added his voice to French chorus asserting that his government wishes to see immediate military action of the UN Security Council adopts a resolution on Libya.
Timestamp: 10:23pm
A Libyan government spokesman says that any UN action against Libya would be “illegal and immoral”. Mussa Ibrahim, the spokesman, said:
That would be illegal and immoral. It’s an armed rebellion. Any country would’ve fought against that. They are basing their decision on media reports.
“This should not happen. It would harm the Libyan people. It would only strengthen our internal position because Libyans will have an external enemy and act as one.”
Timestamp: 10:15pm
AFP has released some excerpts from the draft UN resolution. They are reproduced below. The resolution:
Demands the immediate establishment of a ceasefire and a complete end to violence and all attacks against, and abuses of, civilians;
“Stresses the need to intensify efforts to find a solution to the crisis which responds to the legitimate demands of the Libyan people and notes the decisions of the Secretary-General to send his Special Envoy to Libya and of the Peace and Security Council of the African Union to send its ad hoc High Level Committee to Libya with the aim of facilitating dialogue to lead to the political reforms necessary to find a peaceful and sustainable solution;
“Demands that the Libyan authorities comply with their obligations under international law, including international humanitarian law, human rights and refugee law and take all measures to protect civilians and meet their basic needs, and to ensure the rapid and unimpeded passage of humanitarian assistance;
“Authorises member states … to take all necessary measures … to protect civilians and civilian populated areas under threat of attack in the Libyan Arab Jamahiriya, including Benghazi, while excluding a foreign
occupation force of any form on any part of Libyan territory…;
“Decides to establish a ban on all flights in the airspace of the Libyan Arab Jamahiriya in order to help protect civilians;
“Calls upon all member states, acting nationally or through regional organisations or arrangements, to provide assistance, including any necessary over-flight approvals, for the purposes of implementing” the no-fly zone.
“Calls upon all member states, in particular states of the region, acting nationally or through regional organisations or arrangements, in order to ensure strict implementation of the arms embargo established (by Resolution 1970) to inspect in their territory, including seaports and airports, and on the high seas, vessels and aircraft bound to or from the Libyan Arab Jamahiriya…
“Deplores the continuing flows of mercenaries into the Libyan Arab Jamahiriya and calls upon all member states to comply strictly with their obligations under (Resolution 1970) to prevent the supply of armed mercenary personnel to the Libyan Arab Jamahiriya;
“Decides that all states shall deny permission to any aircraft registered in the Libyan Arab Jamahiriya or owned or operated by Libyan nationals or companies to take off from, land in or overfly their territory
unless the particular flight has been approved in advance by the Committee, or in the case of an emergency landing;
“Decides that all States shall deny permission to any aircraft to take off from, land in or overfly their territory, if they have information that provides reasonable grounds to believe that the aircraft contains items the
supply, sale, transfer, or export of which is prohibited … including the provision of armed mercenary personnel, except in the case of an emergency landing;
“Decides that the asset freeze imposed by (Resolution 1970) shall apply to all funds, other financial assets and economic resources which are on their territories, which are owned or controlled, directly or indirectly, by the Libyan authorities … or by individuals or entities acting on their behalf or at their direction…
“Affirms its determination to ensure that assets frozen pursuant to (Resolution 1970) shall, at a later stage, as soon as possible be made available to and for the benefit of the people of the Libyan Arab Jamahiriya.”
Timestamp: 9:47pm
AFP now quotes Alain Juppe, the French foreign minister, as saying that military strikes could quickly follow after a UN security council resolution on Libya.
Timestamp: 9:39pm
Citing sources in the French government, AFP reports that air raids on Libyan army positions could begin as soon as the UN Security Council approves the use of force in Libya.
“From the moment the resolution is adopted, military actions could begin in the hours that follow,” a diplomatic source said.
Timestamp: 9:35pm
The Associated Press reports that the closest known position of pro-Gaddafi ground forces to Benghazi is about 130km to the south.
Timestamp: 9:26pm
Here’s a screen grab from our live feed from Benghazi, where residents were both angry, but also in a celebratory mood, during and after Gaddafi’s speech.
Timestamp: 9:17pm
Marwan Bishara, Al Jazeera’s senior political analyst, says that this speech will likely affect the deliberations at the United Nations, emphasising the urgency that is required regarding action to safeguard civilians.
He also opines that this will be seen as an “act of desperation”.
Timestamp: 9:10pm
Al Jazeera’s Tony Birtley in Benghazi says that he travelled as far as 50km outside of Benghazi a few hours ago, and saw no evidence of any pro-Gaddafi forces approaching the city.
Al Jazeera’s Anita McNaught in Tripoli reports that just a little while before his radio address to Benghazi, Gaddafi had spoken to Lebanese television saying that he would not be launching any military operation on Benghazi in the immediate term.
She also reports that “it’s impossible to know how many people really love him … and how many people don’t want him at all” because security forces control the capital.
Timestamp: 9:07pm
Quite clear from that speech that Gaddafi says he intends to launch an operation on Benghazi tonight, and he would like the city taken by tomorrow. It is not immediately clear if this rhetoric, or if residents of the city are preparing for a possible assault.
Timestamp: 9:02pm
Those quotes below, of course, are from Muammar Gaddafi’s speech to the residents of Benghazi. Meanwhile, live pictures from Benghazi show massive crowds of people, chanting angry slogans in opposition to him.
Marwan Bishara, Al Jazeera’s senior political analyst, says that there is a striking similarity between the statements made by Gaddafi and those made by Hosni Mubarak, the former Egyptian president, before he stepped down from power.
Timestamp: 9:01pm
They are finished, they are wiped out. From tomorrow you will only find our people. You all go out and cleanse the city of Benghazi. A small problem that has become an international issue. And they are voting on it tonight … because they are determined. As I have said, we are determined. We will track them down, and search for them, alley by alley, road by road, the Libyan people all of them together will be crawling out. Massive waves of people will be crawling out to rescue the people of Benghazi, who are calling out for help, asking us to rescue them. We should come to their rescue.
“And I, Muammar Gaddafi, I will die for my people. With Allah’s help.
“No more fear, no more hesitation, we are no longer reluctant. The moment of truth has come. If you see the cars with loudspeakers, destroy them, destroy their communications points that are spreading lies to you. Our children are the one’s who have destroyed these planes.
“Just like Franco in Spain, who rolled into Madrid with external support. And they asked how did you manage to liberate Madrid? He said: ‘There was a fifth column, the people of the city.’ You are the fifth column within the city. This is the day on which we should liberate the city. We’ve been looking forward to that day. And tomorrow we will communicate again, and our cause will continue towards the south.
“With our bare chests and heads we were confronting the dangers, facing the challenge, we did not initiate this violence, they started it. Of course, these words will have an impact on the traitors and infidels. Tonight they will panic and they will collapse.
“You are capable of doing it. You are capable of achieving this. Let’s set our women and daughters free from those traitors.
“God is great.”
Timestamp: 8:46pm
“Throw away your arms and find a way out of the city, and then you are saved. Those young men who have been taken advantage of – those infidels who are attempting to burn down our country to the ground, we should have no mercy on them. Those are the traitors, used and abused by those infidels from Qatar, unfortunately, Kuwait and other countries. How stupid can you become to be taken advantage of to that extent in Benghazi? Now you’re hungry and thirsty – we don’t have a natural disaster like the one that happened in Japan recently … but those infidels and traitors we promise to deal with. But the peaceful individuals of our people … should put down their weapons, there is no danger. They should not feel unsafe. There is not a single officer in Benghazi who did not call us, who have been warning us that they have been threatened by people like Zarkawi of being slaughtered.
“Those who have been forced to follow those infidels … those also will be forgiven, granted amnesty, those are my children, and we should not leave those children to distort the image of our country after such a bright history. You have been forced.
One of the companions of the prophets who was tortured who was forced to say he did not believe in the Prophet Muhammad, and he could not face the Prophet afterwards. And the Prophet said don’t worry, God has forgiven you. Except those who were forced to utter things against their hearts. Even those of you who were forced to say things against myself, you are my children, and those in the special forces, the free officers of this country, you have sworn to defend the revolution of September. To fight the enemies. We are coming your rescue. And we will turn the sad situation into celebrations. We will wipe out this black page of our history.
“To all those honest, brave officers, members of the revolutionary committees, university students, and female revolutionary committees, get ready to rebel against those traitors. The world has to see this tomorrow… that Benghazi is not a city of traitors.
“Benghazi, I have liberated it myself earlier with my gun.
“Those, the people who we have seen from one of the city to the other. Destroy any fortified points that you can get to, and if they run away, you take their weapons and you can occupy them.
“The Jawazi tribes, those are brave tribes, we have been proud of. They have an honourable history before the whole world. Let the world witness one more good deed.
“From tonight, those who decide to flee, you take their weapons, and you keep them safe.
“Is it possible that each plane that flies crashes? Is that real? Can that happen?
“There is a cemetary that has been bombed. Is that possible? How can you bomb a cemetary? You are bombing dead people. Your grandparents are buried there. …
“These planes are supposed to be liberating Palestine, or confronting imperialism. Is it possible that our planes are fighting each other? Is it real?
“All people should surround the traitors, to tell them that there is no way out.
“What indicates to us about this current enemy, where are they, where are they hiding, in what room? They are cheating you to tell you that a plane has been able to hit Bab Al-Aziziya, where I live. It has been the centre of celebrations.”
Timestamp: 8:43pm
Gaddafi says he has received thousands of phone calls from families in Benghazi, asking to be rescued.
He alleges that “they” want to make Libya “like Somalia”, adding that Libya is a rich country, but the flow of oil has been stopped.
He has accused Qatar of fueling unrest in the country, and wanting Libya to “surrender it’s dignity” to Qatar.
Gaddafi has also offered “amnesty” to “those who put down their weapons”, adding that people who are fighting have been “fooled”.
He said that fighters should put down their weapons and they would be safe – if they did not, they would be treated as “enemies”.
Timestamp: 8:41pm
Gaddafi says that those fighting in Benghazi are criminals who have been released from prison – that they are “drug addicts” and “murderers” who have been released and handed weapons to fight.
Timestamp: 8:40pm
Libyan leader Muammar Gaddafi is addressing residents of Benghazi via radio and television now.
Timestamp: 8:24pm
More on that Gaddafi address: state television reports that his comments will be broadcast on both radio and television.
Timestamp: 8:23pm
Wondering what the complexities involved in setting up a no-fly zone are? Wonder no longer – Al Jazeera’s Jacqueline Head has prepared a handy guide.
Timestamp: 8:22pm
Andreas Oess, of Swiss Humanitarian Aid, says that if Benghazi were to fall, about 40,000-100,000 people would be expected to flood towards the border with Egypt.
“We are not ready” for those kinds of numbers, he said.
Timestamp: 8:05pm
Diplomats have told Al Jazeera that there has been agreement over most of the draft resolution, but there is still concern over one paragraph, reproduced below, which deals with taking “all necessary measures” to protect Libyan civilians, short of an “occupation force”.
Authorises member states that have notified the Secretary-General and the Secretary-General of the League of Arab States, acting nationally or through regional organisations or arrangements, and acting in cooperation with the S-G, to take all necessary measures, notwithstanding paragraph 9 of Resolution 1970, to protect cilivians and civilian populated areas under threat of attack in the Libyan Arab Jamarhiya, including Benghazi, while excluding an occupation force and requests the member states concerned to inform the S-G immediately of the measures they take pursuant to the authorisation conferred by this paragraph which shall immediately reported to the security council.
Timestamp: 8:03pm
AFP reports that Muammar Gaddafi is to address the people of Benghazi, according to state television.
Timestamp: 8:01pm
Jay Carney, the White House spokesperson, says the US is acting with “urgency” on the situation in Libya.
We are very concerned about the situation in Libya and the violence that is being perpetrated by the Gaddafi regime against its people. We are acting with a great sense of urgency together with our international partners to take the kinds of actions that we believe will protect Libyan citizens and move towards a
situation where Gaddafi is no longer in power.”
Timestamp: 7:51pm
The UN Security Council session has been adjourned until 2200GMT, when ambassadors will go straight into a vote, Benedict Moran, an Al Jazeera producer in New York, reports.
Timestamp: 7:21pm
The official Jana news agency reports that Libya is warning it could target air and sea traffic in the Mediterranean if a foreign military intervention is staged.
Meanwhile, Russia says that it still has unanswered questions regarding the imposition of a no-fly zone over Libya.
“What type of control mechanisms … does it have? Who will be implementing it, by what means, in what format?,” foreign ministry spokesman Alexander Lukashevich demanded.
Timestamp: 7:11pm
Mark Lyall Grant, the UK’s ambassador to the United Nations, says that the UN Security Council has scheduled a vote on a resolution for 2200GMT (6pm local time in New York), Reuters reports.
Timestamp: 7:09pm
A UN draft resolution to be discussed in New York today by the UN Security Council must authorise action against Libya, “including a no-fly zone”, Hillary Clinton, the US Secretary of State, says.
Our goal in the Security Council today is to convince the Security Council to authorise more actions, including a no-fly zone, but other actions as well, and then to see how many countries are willing to actually do what the Security Council has authorised us to do.”
Timestamp: 7:05pm
Muammar Gaddafi is likely to “cause trouble” for neighbouring countries if he is allowed to stay in power, Hillary Clinton, the US Secretary of State, says. During a televised question & answer program with Tunisians, she said:
Tunisia knows very well that if Gaddafi does not go, he will most likely cause trouble for you, for Egypt and for
everybody else. That is just his nature. You know, there are some creatures that are like that.”
Timestamp: 6:37pm
At least two Arab states have said they will participate in a no-fly zone over Libya, the Arab League says.
Yahya Mahmassani, the bloc’s envoy to the United Nations, said that the United Arab Emirates and Qatar “may be” among those participating.
Timestamp: 6:25pm
The United States has joined France, Britain and Lebanon in pressing for timely approval of the UN Security Council’s draft resolution on intervention in Libya, and it appears that the United States is now pushing for additional measures to a no-fly zone to be adopted, including possible strikes against ground and sea targets to protect civilians.
This would be a change in the policy the US has been adopting so far, when it has urged caution in even advocating a no-fly zone.
Timestamp: 6:21pm
Egypt says that it will not intervene militarily in Libya. Responding to Hillary Clinton, the US secretary of state’s, comments earlier about possible “Arab involvement” in military action, Menha Bakhoum, an Egyptian foreign ministry spokesperson told Reuters:
Egypt will not be among those Arab states. We will not be involved in any military intervention. No intervention, period.”
Timestamp: 6:16pm
The Pentagon has voiced “concern about conducting military operations inside Libya”.
“It would be logical if one of [US Defence Secretary Robert Gates’] concerns about a no-fly zone is the element of attacking Libyan air defenses, then an option of air strikes would be pretty similar,” Colonel David Lapan, a spokesman, said, adding that there was concern regarding the conduct of such operations.
Timestamp: 5:44pm
Consultations on the draft UN Security Council resolution in New York have just begun.
Timestamp: 5:38pm
US State department official William Burns says the opposition Libyan National Council may set up an office in Washington DC, the American capital.
Timestamp: 5:34pm
New York-based rights group Human Rights Watch warns of “atrocities” if Benghazi is taken by forces loyal to Gaddafi.
Fred Abrahams, a special advisor to the group, says:
Our main concern is the extreme violence and potential for retribution by Gaddafi’s forces if he succeeds in retaking the area. This is a clarion call given the potential for very grave and very widespread abuses if he retakes Benghazi.
“He [Gaddafi] won’t hesitate to use violence against this rebellious city … we’re simply saying that Benghazi and the eastern cities face the risk of serious violations, perhaps even atrocities.
“We know that the rebels in Benghazi are better armed and more professional, not like the other young men who ran to the front. We know the people who started this will stay until the end, but people are deeply afraid. They know Gaddafi and they know this kind of rebellion can only end in victory or defeat.”
Donatella Rovera, an Amnesty International research in Tobruk, says that is been impossible to contact residents of Ajdabiyah, the site of fierce clashes, on Thursday.
I’ve talked to people who have recently left Ajdabiyah and who say that the situation there is extremely tense. They are scared, there were hits around the town.”
Timestamp: 5:32pm
The possible direct involvement of Arab nations in any international military intervention in Libya is currently being discussed, Hillary Clinton, the US secretary of state, says during a press conference in the Tunisian capital, Tunis.
Timestamp: 5:29pm
Opposition fighters in Benghazi say they have shot down two warplanes piloted by officers loyal to Gaddafi. Essam Gheirani, a spokesperson, said that one was shot down near Benina airport, and the other in the Buatani area, on the outskirts of the city.
Earlier in the day, Al Jazeera’s Tony Birtley reported that he went to the area where opposition fighters said they had shot down one of the planes, and could find no trace of it.
Timestamp: 5:23pm
Al Jazeera’s Scott Heidler in New York reports that the United Nations Security Council is still discussing developments in Afghanistan, with deputy ambassadors present. The formal, closed-door consultations on Libya have not yet begun.
Timestamp: 5:18pm
You can watch that ongoing hearing with William Burns, the US Undersecretary of State for Political Affairs, live here.
Timestamp: 5:15pm
A high-level panel of the African Union is due to hold a meeting on Saturday in, Nouakchott, the Mauritanian capital, to discuss development in Libya. The five-member heads of state committee of the AU will “determine the modalities of the implementation of its mandate”, according to an AU statement.
Timestamp: 5:11pm
More from that continuing statement from US Undersecretary of State William Burns. He says that there is a “danger of [Gaddafi] returning to terrorism and violent extremism” if he suceeds in his battle against opposition forces.
Timestamp: 5:06pm
General Norton Schwartz, the chief of the US air force, says that imposing a no-fly zone over Libya would “not be sufficient” to reverse the advance of Muammar Gaddafi’s forces on opposition strongholds.
Speaking to the Senate Armed Services Committee, he said that it could take “upwards of a week” to set up a no-fly zone.
He said that if the US were to get involved in international efforts to set up the no-fly zone, aircraft based in Europe and in the United States would be use, but some resources currently being used in the wars in Afghanistan and Iraq would also be used.
Timestamp: 5:02pm
Reuters reports that France wants the UN Security Council to vote on a resolution authorising a no-fly zone, according to Gerard Araud, the French ambassador to the UN.
I would say that we are asking for a vote at 6:00pm [2200 GMT]. You know the United Nations, it can drift but we are going to ask for a vote at 6:00pm.”
Members of China’s delegation to the UN have told Al Jazeera that they, too, will be looking for consensus to be reached today, though they did not say if they would now be back the imposition of a no-fly zone, a step they had expressed concern over earlier.
Timestamp: 5:00pm
Opposition fighters in the western city of Zintan (120km southwest of Tripoli) say they are bracing for an attack by forces loyal to Gaddafi.
A witness told AFP:
According to the fighters, forces loyal to Kadhafi are trying to encircle Zintan. There are troop movements around the north and southwest. They expect a big attack on the city. I heard no gunfire this morning. They say they blocked the main column [of tanks] during the night.
“Yesterday there was major fighting about 20 kilometres southwest of Zintan. It lasted a good part of the night. According to fighters, there were very heavy weapons.”
Timestamp: 4:50pm
Guido Westerwelle, the German foreign minister, has proposed a strengthening of sanctions on Libya, while US Undersecretary of State Burns says that the US wants “an active Arab partnership” regarding further steps in Libya.
Timestamp: 4:48pm
William Burns, the US Undersecretary of State has warned that Muammar Gaddafi’s forces are making “significant” gains. He was speaking to the Senate Foreign Relations Committee.
Gaddafi’s forces have made significant strides o the ground. I believe they are only about 160km from Benghazi right now.”
Timestamp: 4:31pm
William Hague, the UK’s foreign minister, says that the United States proposed a strengthening of the UN security council resolution during deliberations yesterday.
Susan Rice, the US ambassador to the UN, says that a no-fly zone is one of a “range of actions”, but that it has “inherent limitations in terms of protection of civilians at immediate risk”.
Timestamp: 4:30pm
NATO chief Anders Fogh Rasmussen says that the military alliance is not seeking to “intervene in Libya”, but wishes to be prepared if action is needed.
Timestamp: 4:28pm
More on that statement regarding a possible ceasefire. The Jana state news agency says:
The provisional general committee [ministry] of defence has decided to halt military operations against the armed terrorist bands from midnight on Sunday [2200 GMT] … to give a chance to lay down their arms and benefit from a general amnesty.”
Timestamp: 4:27pm
Residential areas in Ajdabiyah are coming under continued heavy aerial bombardment, Reuters reports, citing witnesses speaking to satellite television networks.
Timestamp: 4:22pm
Al Jazeera’s James Bays in Tobruk has the latest:
No-one really knows which way Gaddafi’s forces will go next. Ajdabiyah still has fighting taking place around it. We know that there’s fighting in terms of air strikes now on Benghazi … that suggests that Gaddafi’s forces are going to make their way along the coast. But they have another option, there is a road that goes straight from Ajdabiyah right here to Tobruk. It is, if you drive it, about 4 hours of desert road, no towns along it at all, so no really early warning for the opposition if Gaddafi’s forces take that road.
“It’s a road or a route … that’s certainly been used in history. In the second World War, that’s where Rommel’s Panzer tanks came along. So I think it is a possibility that he may try to cut off all of the rebel-held towns along the coast line. The main reason for doing that … here in Tobruk, we’re very close to the Egyptian border, and I think Gaddafi would like nothing better than to close that border, because that closes the supply line to the opposition forces.
Asked how Gaddafi has managed to make gains so far, Bays said:
Well, what’s he’s done with most of these towns and places that he’s gone through, is that he’s basically frightened the people into submission. He’s gone to a place like Ajdabiyah and he’s used bombardment at the edge of the town, and then frightened the people into submission in places like Brega and then moved on to the next place.
“Will he do that in Benghazi? Already the air strikes have started around Benghazi, and I can tell you that both here and in Benghazi, the opposition politicians are very upbeat, the opposition military commanders, they say that the big cities are different and they’ll fight him off.”
Timestamp: 4:17pm
AFP, quoting the state news agency Jana, says that the Libyan army will halt military operations from Sunday in order to give opposition fighters a chance to lay down their arms and benefit from an amnesty.
More on this report as and when it comes through.
Timestamp: 4:00pm
That statement from NATO chief Anders Fogh Rasmussen:
It is absolutely outrageous to see the Libyan regime systematically attack its own civilian population. These acts may amount to crimes against humanity.”
Timestamp: 3:53pm
The attacks by forces loyal to Muammar Gaddafi on civilians may be “crimes against humanity”, NATO chief Anders Fogh Rasmussen says, according to the AFP news agency.
Timestamp: 3:51pm
More on the airstrikes in Benghazi, from an opposition spokesman.
We have no evidence that any of the strikes caused any damage. It seems to us like a warning, a challenge to the international community.”
He said one of the raids struck near Benina airport, but that airport officials told him no damage had been incurred. Another strike hti Buatani, to the city’s east, and a third in the northwest. The fourth target was near the town of Qaminis, about 50km south of the city.
Timestamp: 3:49pm
A government spokesman says that Libyan military operations in Misurata will be completed by tomorrow.
Mussa Ibrahim, the spokesman, said:
It’s almost entirely under control. This is the final stage. It should be over by tomorrow morning.”
Timestamp: 3:48pm
Muammar Gaddafi says that his forces are set to regain control over the opposition-held towns of Misurata and Benghazi, Al Arabiya television reports.
Gaddafi said that the battle for Misurata will be decided today, while Benghazi would fall without fighting, the satellite television channel says.
Timestamp: 3:45pm
The statement from NATO chief Rasmussen:
Time is of the essence, time is rapidly running out, but I don’t think it’s too late. Very much will depend on the UN Security Council decision.
“I can imagine the international community and the United Nations standing strongly together behind the Libyan people if the weakened regime continues to attack its own people.”
Timestamp: 3:44pm
Anders Fogh Rasmussen, NATO’s secretary-general, has warned that the UN Security Council must act quickly to agree a resolution on Libya, as “time is running out” to stop Muammar Gaddafi from prevailing over opposition fighters.
Timestamp: 3:42pm
Essam Gheriani, a spokesman for pro-democracy fighters in Benghazi, says Gaddafi’s troops are “no where near Benghazi”. He says that pro-Gaddafi troops have approached the oil town of Zueitina, but that they “have been surrounded by the revolutionary forces and are being dealt with”.
Timestamp: 3:33pm
Al Jazeera’s James Bays reports with the latest from the eastern rebel-held town of Tobruk:
There have been fresh air strikes we understand in the last few minutes in Benghazi. One of those airstrikes, another one, taking place on the main airport there. And we’re hearing this time from our team that were there … that there have been casualties this time.
“The opposition are claiming that they’ve made some successes as well, they’re claiming that they’ve shot down a MiG aircraft. I have to say that our correspondent Tony Birtley has been to the scene where this MiG aircraft is supposed to have been shot down, and he can find no sign of it at all.”
Asked about the situation in Tobruk, he said:
It is a long way away, but I think they are still concerned, and they’re concerned because Gaddafi’s forces in the last few days have been pounding Ajdabiyah. Now that is the gateway to Benghazi, but it’s also the gateway to Tobruk, because there’s another road that goes through the desert that goes … to here. And there is some suggestion that possibly one of the things that Gaddafi might consider is to try and seal off the whole of this peninsula by taking that road. Not actually going into Benghazi, but sealing off Benghazi and the other cities along the coast and possibly even closing the border.
“I spoke a short time ago to a Major-General who has come back from the front line, and he says that … they are prepared in Benghazi, but they’re also prepared here, because they know that that is one possible option of Gaddafi to send forces this way and then to try and encircle all of the rebel troops.
“There’s a very defiant mood here, and a lot of support for those opposed to Gaddafi. But you go out on the streets, you go to the edge of town … and really no evidence of any defences at all that I could see, right at the edge of the town in the last few hours, we went out there to the airport, which is on the very edge of the town, that’s the way Gaddafi’s forces would come if they came all the way to Tobruk. And there were just a few fighters, one of them couldn’t have been more than about 12 years old … so not strong defences.
“And I can tell you that when you speak to the people here, they say they’re winning, they say they’re beating back Gaddafi. Then you ask them the question should the international community do more, and they say ‘Yes, we’re all going to die if they don’t help’. So very contradictory answers to those questions.
Timestamp: 3:19pm
Al Jazeera’s James Bays in Tobruk reports that fresh air strikes have taken place in Benghazi in the last few minutes, with the airport being targetted in one of the attacks. Al Jazeera’s Tony Birtley in Benghazi says that there have been casualties, though the exact numbers are unclear at this early stage.
Timestamp: 3:02pm
William Hague, the UK’s foreign minister, says there is now nothing holding the US back on supporting calls for a no-fly zone over Libya, Reuters reports.
Timestamp: 3:00pm
Aid agencies say that there are more Libyan families fleeing the country’s east into Egypt than before, but that there is still not a major outflow.
Sybella Wilkes, spokesperson for the UN High Commissioner for Refugees (UNHCR) told Reuters:
We’re seeing higher numbers of Libyans going out. Some are leaving Benghazi saying they fear it might be bombed and the road to the border might be blocked.”
Marcal Izard, a spokesperson for the International Committee of the Red Cross (ICRC), said there is “no major movement of displaced” people towards the border.
Timestamp: 2:43pm
Libyan state television reports that forces loyal to Muammar Gaddafi have recaptured Zueitina, a major oil terminal, and are advancing towards the outskirts of Benghazi.
There is no immediate confirmation of this report.
Timestamp: 2:41pm
Residents of the western town of Misurata say they are preparing for a new attack by pro-Gaddafi forces.
Saadoun, a Misurata resident, told the Reuters news agency:
There were two more rounds of shelling last night. But things are quiet so far. We are hearing that tanks are moving … We believe they will attack the city again. We are not sure if they will do it right now or if they will wait for more reinforcement from Tripoli, especially after their defeat yesterday.”
Timestamp: 2:11pm A senior hospital official told The Associated Press that 30 people have been killed since Tuesday night in fighting for the gateway to rebel-held territory.
Libya’s opposition battled to keep Gaddafi’s forces at the city of Ajdabiya on Thursday, hoping for help from the UN Security Council before his tanks and troops break through.
The official said at least 80 were hurt and hospitalised and many more of the wounded could not reach the hospital. He spoke on condition of anonymity for fear of official retaliation.
Gaddafi’s rapid advance on the rebels appears to have spurred the United States to leave behind weeks of doubts about a no-fly zone in Libya, and start pushing for broader UN authorisation for international air, sea and land forces. Timestamp: 1:40pm Libyan state television said on Thursday that forces loyal to Gaddafi had recaptured the western city of Misurata, but residents and rebels in the city denied the report. State television said the armed forces had retaken control of Misurata and it was now being “sterilised from those criminal armed gangs”.
But three residents told the Reuters news agency the rebels still controlled the city.
“This [state TV] is not true. They are lying. Misurata is quiet and there is no sound of any bombing,” resident Mohamed said.
Timestamp: 1:35pm Fighting between Libyan rebels and Gaddafi’s troops near the eastern town of Ajdabiyah killed at least 30 women, children and elderly men, according to reports. Libyan rebels have been trying to halt Gaddafi’s troops’ push towards the insurgent capital of Benghazi. Timestamp: 1:23pm
Libyan State TV says gunfire and explosions are being heard at the airport near Benghazi.
Timestamp: 1:21pm
At least 30 people are dead in hospital in the eastern Libyan town of Ajdabiyah, according to reports.
Timestamp: 1:18pm
Conflicting reports: Libyan State TV is reporting that Gaddafi’s forces are in control of the western city of Misurata. However, rebel fighters deny the report, saying they are still in control of the city.
Timestamp: 12:00pm Gaddafi fighter jets have bombarded Benina airport, 10km south of Benghazi city, Al Jazeera’s correspondent reports. Timestamp: 10:00am On the move and on a mission to crush the opposition – Libyan forces loyal to Gaddafi head east.
Al Jazeera’s Tony Birtley has the latest on the uprising:
Timestamp: 9:15am
Medical sources in Misurata told Al Jazeera that at least 80 members of Gaddafi’s forces were killed during yesterday’s fighting.
Timestamp: 7:40am In Benghazi – Libya’s rebel-controlled second largest city – opposition protesters are buoyed by news that fighters in a nearby town have beaten back an offensive by Gaddafi’s forces.
While some in the city are apprehensive that the war may still come to their door step, they remain defiant, vowing to fight on to defeat Gaddafi’s troops.
Al Jazeera’s Tony Birtley reports from Benghazi:
Timestamp: 6:12am Gaddafi said his forces would fight a “decisive battle” on Thursday, as diplomats backing a no-fly zone to rein him in pressed for a vote at the UN Security Council. Timestamp: 3:30am
Al Jazeera’s Scott Heidler said that Rice’s call for “a resolution that should go beyond a no-fly zone, is something that we haven’t heard before.
“We are hearing from diplomatic sources that change came over night on Tuesday when an initial draft resolution presented and discussed yesterday afternoon.
“She came into the discussions today [Wednesday] with a different point of view. And that was yes no-fly zone and even a step further beyond a no-fly zone.”
Timestamp: 3:00am
France, Britain and the United States have pressed for a UN Security Council vote on Thursday on a no fly zone to halt Muammar Gaddafi’s attacks on rebels.
Council ambassadors met behind closed doors to debate the text for more than eight hours on Wednesday, and said they would return on Thursday morning.
Timestamp: 1:53am
The UN Security Council may need to take measures in Libya that go beyond a no-fly zone in Libya, the US envoy to the United Nations said Wednesday.
Timestamp: 1:47am
The US ambassador to the United Nations has said that the Security Council will continue the negotiations on Libya Thursday.
“My hope that we are able to reach a serious resolution.”
Timestamp: 1:29am
The AFP news agency reported on Wednesday that the UN Security Council have reached an agreement on the text of a draft resolution on Libya, which will be put to a vote on Thursday, diplomats said.
Timestamp: 1:00am
Reuters news agency has reported that the Libyan army has set an ultimatum on Wednesday to clear Benghazi by 2200 GMT, Libyan television reported.
A text on the screen of Al-Libya television addressed the residents of Benghazi saying:
“The army is coming to support you and to cleanse your city from armed gangs.
“It urges you to keep out by midnight of areas where the armed men and weapon storage areas are located.”
One or both countries are led by maniacs (Hitler, Stalin, Tojo)
Opposing political systems (Capitalism, Communism)
Necessity for resources or land (Japan, Germany)
Accident due to treaties & alliances (WWI)
Seccession or internal political issues (Revolutionary War, Civil War)
China is tired of playing second fiddle to the U.S. They are already kicking our asses economically. They have us by the balls as they own $900 billion of our debt. We need to issue $1.5 trillion of new debt every year for the next 5 years. We need the Chinese to buy a good chunk of this debt. The Chinese know that. They also know that Bernanke is trying to screw them by devaluing the USD.
They are converting their USD into hard assets. They are buying up natural resouces like mines and oil wells. They are signing deals with Iran, Venezuela, and African nations to tie up oil resources. They are buying gold. They have most of the rare earths in the world and aren’t sharing. Now it seems they are using those USD to build missiles and other high tech military hardware.
The US Navy revolves around their 11 aircraft carriers. We are in the process of building 3 new aircraft carriers at a cost of $14 billion each. The Chinese have perfected a new missile that will put these outmoded WWII antiques at the bottom of the sea. The US is preparing for the last war. China is preparing for cyber war using satellites, computer hackers, and high tech missiles.
China and the US both need oil. The supplies of oil are depleting. Economic tensions are already high. As oil becomes more precious, the US and China will be competing for the same supply sources. Any economic collapse experienced by either country will significantly increase tensions between the countries. These issues are a powder-keg and both countries will be lighting matches. I expect armed conflict with China to commence between 2015 and 2020, as would be expected in the Fourth Turning Crisis. World War erupted 12 years after the onset of the last Fourth Turning. A similar scenario would result in major war around the year 2017. It is our destiny.
China preparing for armed conflict ‘in every direction’
China is preparing for conflict ‘in every direction’, the defence minister said on Wednesday in remarks that threaten to overshadow a visit to Beijing by his US counterpart next month.
“In the coming five years, our military will push forward preparations for military conflict in every strategic direction,” said Liang Guanglie in an interview published by several state-backed newspapers in China. “We may be living in peaceful times, but we can never forget war, never send the horses south or put the bayonets and guns away,” Mr Liang added.
China repeatedly says it is planning a “peaceful rise” but the recent pace and scale of its military modernisation has alarmed many of its neighbours in the Asia-Pacific, including Japan which described China’s military build-up as a “global concern” this month.
Mr Liang’s remarks come at a time of increasingly difficult relations between the Chinese and US armed forces which a three-day visit by his counterpart Robert Gates is intended to address. A year ago China froze substantive military relations in protest at US arms sales to Taiwan and relations deteriorated further this summer when China objected to US plans to deploy one of its nuclear supercarriers, the USS George Washington, into the Yellow Sea off the Korean peninsula.
China also announced this month that it was preparing to launch its own aircraft carrier next year in a signal that China is determined to punch its weight as a rising superpower. The news came a year earlier than many US defence analysts had predicted.
China is also working on a “carrier-killing” ballistic missile that could sink US carriers from afar, fundamentally reordering the balance of power in a region that has been dominated by the US since the end of the Second World War.
A US Navy commander, Admiral Robert Willard, told Japan’s Asahi Shimbun newspaper this week that he believes the Chinese anti-ship missile, the Dong Feng 21, has already achieved “initial operational capability”, although it would require years of testing.
Analysts remain divided over whether China is initiating an Asian arms race. Even allowing for undeclared spending, China’s annual defence budget is still less than one-sixth of America’s $663bn a year, or less than half the US figure when expressed as a percentage of GDP.
However in a speech earlier this year Mr Gates warned that China’s new weapons, including its carrier-killing missile, “threaten America’s primary way to project power and help allies in the Pacific”, underscoring the difficulties that lie ahead as China and the US seek to contain growing strategic frictions.
As China modernises, Mr Liang pledged that its armed forces would also increasingly use homegrown Chinese technology, which analysts say still lags behind Western technology even as China races to catch up.
“The modernisation of the Chinese military cannot depend on others, and cannot be bought,” Mr Liang added, “In the next five years, our economy and society will develop faster, boosting comprehensive national power. We will take the opportunity and speed up modernisation of the military.”
Chinese missile shifts power in Pacific
By Kathrin Hille in Beijing
Published: December 28 2010 11:58 | Last updated: December 28 2010 11:58
A new Chinese anti-ship missile that will significantly alter the balance of military power in the Pacific is now operational, according to a senior US commander.
Admiral Robert Willard, the top US commander in the Pacific, said the Chinese ballistic missile, which was designed to threaten US aircraft carriers in the region, had reached “initial operational capability”.
His remarks signal that China is challenging the US ability to project military power in Asia much sooner than many had expected.
“So now we know – China’s [anti-ship ballistic missile] is no longer aspirational,” Andrew Erickson, an expert on the Chinese military at the US Naval War College, said in response to Adm Willard’s comments to the Asahi newspaper.
Defence analysts have called the Dongfeng 21 D missile a “game changer” since it could force US aircraft carriers to stay away from waters where China does not want to see them. These include the Taiwan Strait where a potential conflict could develop over the self-ruled island which China claims.
The land-based missile is designed to target and track aircraft carrier groups with the help of satellites, unmanned aerial vehicles and over-the-horizon radar. Aircraft carriers and their accompanying ships are unable to defend themselves against such a threat.
Aware of the missile’s development, the Pentagon has already started considering ways to counter the new threat, including a new concept for more closely integrated navy and air force operations.
Robert Gates, US defence secretary, said in September, the development of such a missile would force the Pentagon to rethink the way carriers were deployed.
“If the Chinese or somebody else has a highly accurate anti-ship cruise or ballistic missile that can take out a carrier at hundreds of miles of ranges and therefore in Asia puts us back behind the second island chain, how then do you use carriers differently in the future?” Mr Gates asked.
The second chain of islands runs from the Bonins along the Marianas, Guam and Palau, forming a north-south line east of Japan and the Philippines. This line defines what China sees as its “near seas” – waters in which the US navy now frequently operates and are home to US naval bases and allies such as Japan and South Korea.
Adm Willard noted this year that China’s anti-ship ballistic missile was undergoing extensive testing and was close to deployment. Observers believe China started production of missile motors last year and that the Chinese military is preparing a nuclear missile base in the southern city of Shaoguan for their deployment.
Defence analysts have also linked several missile flight tests this year to the new weapon but no conclusive evidence has been available to date.
Adm Willard’s latest comments appear to remove any doubts. The term “initial operational capability” as used by the Pentagon indicates that some military units have started deployment of the weapon and are capable of using it.
Mr Erickson said: “Beijing has successfully developed, tested, and deployed the world’s first weapons system capable of targeting a moving carrier strike group from long-range, land-based mobile launchers.” .
Adm Willard said the new Chinese weapon was still not fully-operational and would probably undergo testing for “several more years”. The key remaining step is a comprehensive test of the entire system at sea, which is much more difficult than test flights over land.
China also needs to deploy more satellites to ensure seamless tracking of a moving target at sea. But defence experts warn that the weapon would immediately be a threat to US carriers because China could make up for a lack in accuracy by launching larger numbers of missiles.
Written 9 days after the US invasion of Iraq. I’m sure glad we would never go to war for oil.
The Thirty-Year Itch By Robert Dreyfuss, Mother Jones, 29 March 2003
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.If you were to spin the globe and look for real estate critical to building an American empire, your first stop would have to be the Persian Gulf. The desert sands of this region hold two of every three barrels of oil in the world — Iraq’s reserves alone are equal, by some estimates, to those of Russia, the United States, China, and Mexico combined. For the past 30 years, the Gulf has been in the crosshairs of an influential group of Washington foreign-policy strategists, who believe that in order to ensure its global dominance, the United States must seize control of the region and its oil. Born during the energy crisis of the 1970s and refined since then by a generation of policymakers, this approach is finding its boldest expression yet in the Bush administration — which, with its plan to invade Iraq and install a regime beholden to Washington, has moved closer than any of its predecessors to transforming the Gulf into an American protectorate.
In the geopolitical vision driving current U.S. policy toward Iraq, the key to national security is global hegemony — dominance over any and all potential rivals. To that end, the United States must not only be able to project its military forces anywhere, at any time. It must also control key resources, chief among them oil — and especially Gulf oil. To the hawks who now set the tone at the White House and the Pentagon, the region is crucial not simply for its share of the U.S. oil supply (other sources have become more important over the years), but because it would allow the United States to maintain a lock on the world’s energy lifeline and potentially deny access to its global competitors. The administration “believes you have to control resources in order to have access to them,” says Chas Freeman, who served as U.S. ambassador to Saudi Arabia under the first President Bush. “They are taken with the idea that the end of the Cold War left the United States able to impose its will globally — and that those who have the ability to shape events with power have the duty to do so. It’s ideology.”
Iraq, in this view, is a strategic prize of unparalleled importance. Unlike the oil beneath Alaska’s frozen tundra, locked away in the steppes of central Asia, or buried under stormy seas, Iraq’s crude is readily accessible and, at less than $1.50 a barrel, some of the cheapest in the world to produce. Already, over the past several months, Western companies have been meeting with Iraqi exiles to try to stake a claim to that bonanza.
But while the companies hope to cash in on an American-controlled Iraq, the push to remove Saddam Hussein hasn’t been driven by oil executives, many of whom are worried about the consequences of war. Nor are Vice President Cheney and President Bush, both former oilmen, looking at the Gulf simply for the profits that can be earned there. The administration is thinking bigger, much bigger, than that.
“Controlling Iraq is about oil as power, rather than oil as fuel,” says Michael Klare, professor of peace and world security studies at Hampshire College and author of Resource Wars. “Control over the Persian Gulf translates into control over Europe, Japan, and China. It’s having our hand on the spigot.”
Ever since the oil shocks of the 1970s, the United States has steadily been accumulating military muscle in the Gulf by building bases, selling weaponry, and forging military partnerships. Now, it is poised to consolidate its might in a place that will be a fulcrum of the world’s balance of power for decades to come. At a stroke, by taking control of Iraq, the Bush administration can solidify a long-running strategic design. “It’s the Kissinger plan,” says James Akins, a former U.S. diplomat. “I thought it had been killed, but it’s back.”
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.” Simultaneously, a rash of similar stories appeared in other magazines and newspapers. “I knew that it had to have been the result of a deep background briefing,” Akins says. “You don’t have eight people coming up with the same screwy idea at the same time, independently.
“Then I made a fatal mistake,” Akins continues. “I said on television that anyone who would propose that is either a madman, a criminal, or an agent of the Soviet Union.” Soon afterward, he says, he learned that the background briefing had been conducted by his boss, then-Secretary of State Henry Kissinger. Akins was fired later that year.
Kissinger has never acknowledged having planted the seeds for the article. But in an interview with Business Week that same year, he delivered a thinly veiled threat to the Saudis, musing about bringing oil prices down through “massive political warfare against countries like Saudi Arabia and Iran to make them risk their political stability and maybe their security if they did not cooperate.”
In the 1970s, America’s military presence in the Gulf was virtually nil, so the idea of seizing control of its oil was a pipe dream. Still, starting with the Miles Ignotus article, and a parallel one by conservative strategist and Johns Hopkins University professor Robert W. Tucker in Commentary, the idea began to gain favor among a feisty group of hardline, pro-Israeli thinkers, especially the hawkish circle aligned with Democratic senators Henry Jackson of Washington and Daniel Patrick Moynihan of New York.
Eventually, this amalgam of strategists came to be known as “neoconservatives,” and they played important roles in President Reagan’s Defense Department and at think tanks and academic policy centers in the 1980s. Led by Richard Perle, chairman of the Pentagon’s influential Defense Policy Board, and Deputy Secretary of Defense Paul Wolfowitz, they now occupy several dozen key posts in the White House, the Pentagon, and the State Department. At the top, they are closest to Vice President Cheney and Defense Secretary Donald Rumsfeld, who have been closely aligned since both men served in the White House under President Ford in the mid-1970s. They also clustered around Cheney when he served as secretary of defense during the Gulf War in 1991.
Throughout those years, and especially after the Gulf War, U.S. forces have steadily encroached on the Gulf and the surrounding region, from the Horn of Africa to Central Asia. In preparing for an invasion and occupation of Iraq, the administration has been building on the steps taken by military and policy planners over the past quarter century.
Step one: The Rapid Deployment Force In 1973 and ’74, and again in 1979, political upheavals in the Middle East led to huge spikes in oil prices, which rose fifteenfold over the decade and focused new attention on the Persian Gulf. In January 1980, President Carter effectively declared the Gulf a zone of U.S. influence, especially against encroachment from the Soviet Union. “Let our position be absolutely clear,” he said, announcing what came to be known as the Carter Doctrine. “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.” To back up this doctrine, Carter created the Rapid Deployment Force, an “over-the-horizon” military unit capable of rushing several thousand U.S. troops to the Gulf in a crisis.
Step two: The Central Command In the 1980s, under President Reagan, the United States began pressing countries in the Gulf for access to bases and support facilities. The Rapid Deployment Force was transformed into the Central Command, a new U.S. military command authority with responsibility for the Gulf and the surrounding region from eastern Africa to Afghanistan. Reagan tried to organize a “strategic consensus” of anti-Soviet allies, including Turkey, Israel, and Saudi Arabia. The United States sold billions of dollars’ worth of arms to the Saudis in the early ’80s, from AWACS surveillance aircraft to F-15 fighters. And in 1987, at the height of the war between Iraq and Iran, the U.S. Navy created the Joint Task Force-Middle East to protect oil tankers plying the waters of the Gulf, thus expanding a U.S. naval presence of just three or four warships into a flotilla of 40-plus aircraft carriers, battleships, and cruisers.
Step three: The Gulf War Until 1991, the United States was unable to persuade the Arab Gulf states to allow a permanent American presence on their soil. Meanwhile, Saudi Arabia, while maintaining its close relationship with the United States, began to diversify its commercial and military ties; by the time U.S. Ambassador Chas Freeman arrived there in the late Ô80s, the United States had fallen to fourth place among arms suppliers to the kingdom. “The United States was being supplanted even in commercial terms by the British, the French, even the Chinese,” Freeman notes.
All that changed with the Gulf War. Saudi Arabia and other Gulf states no longer opposed a direct U.S. military presence, and American troops, construction squads, arms salesmen, and military assistance teams rushed in. “The Gulf War put Saudi Arabia back on the map and revived a relationship that had been severely attrited,” says Freeman.
In the decade after the war, the United States sold more than $43 billion worth of weapons, equipment, and military construction projects to Saudi Arabia, and $16 billion more to Kuwait, Qatar, Bahrain, and the United Arab Emirates, according to data compiled by the Federation of American Scientists. Before Operation Desert Storm, the U.S. military enjoyed the right to stockpile, or “pre-position,” military supplies only in the comparatively remote Gulf state of Oman on the Indian Ocean. After the war, nearly every country in the region began conducting joint military exercises, hosting U.S. naval units and Air Force squadrons, and granting the United States pre-positioning rights. “Our military presence in the Middle East has increased dramatically,” then-Defense Secretary William Cohen boasted in 1995.
Another boost to the U.S. presence was the unilateral imposition, in 1991, of no-fly zones in northern and southern Iraq, enforced mostly by U.S. aircraft from bases in Turkey and Saudi Arabia. “There was a massive buildup, especially around Incirlik in Turkey, to police the northern no-fly zone, and around [the Saudi capital of] Riyadh, to police the southern no-fly zone,” says Colin Robinson of the Center for Defense Information, a Washington think tank. A billion-dollar, high-tech command center was built by Saudi Arabia near Riyadh, and over the past two years the United States has secretly been completing another one in Qatar. The Saudi facilities “were built with capacities far beyond the ability of Saudi Arabia to use them,” Robinson says. “And that’s exactly what Qatar is doing now.”
Step four: Afghanistan The war in Afghanistan — and the open-ended war on terrorism, which has led to U.S strikes in Yemen, Pakistan, and elsewhere — further boosted America’s strength in the region. The administration has won large increases in the defense budget — which now stands at about $400 billion, up from just over $300 billion in 2000 — and a huge chunk of that budget, perhaps as much as $60 billion, is slated to support U.S. forces in and around the Persian Gulf. Military facilities on the perimeter of the Gulf, from Djibouti in the Horn of Africa to the island of Diego Garcia in the Indian Ocean, have been expanded, and a web of bases and training missions has extended the U.S. presence deep into central Asia. From Afghanistan to the landlocked former Soviet republics of Uzbekistan and Kyrgyzstan, U.S. forces have established themselves in an area that had long been in Russia’s sphere of influence. Oil-rich in its own right, and strategically vital, central Asia is now the eastern link in a nearly continuous chain of U.S. bases, facilities, and allies stretching from the Mediterranean and the Red Sea far into the Asian hinterland.
Step five: Iraq Removing Saddam Hussein could be the final piece of the puzzle, cementing an American imperial presence. It is “highly possible” that the United States will maintain military bases in Iraq, Robert Kagan, a leading neoconservative strategist, recently told the Atlanta Journal-Constitution. “We will probably need a major concentration of forces in the Middle East over a long period of time,” he said. “When we have economic problems, it’s been caused by disruptions in our oil supply. If we have a force in Iraq, there will be no disruption in oil supplies.”
Kagan, along with William Kristol of the Weekly Standard, is a founder of the think tank Project for the New American Century, an assembly of foreign-policy hawks whose supporters include the Pentagon’s Perle, New Republic publisher Martin Peretz, and former Central Intelligence Agency director James Woolsey. Among the group’s affiliates in the Bush administration are Cheney, Rumsfeld, and Wolfowitz; I. Lewis Libby, the vice president’s chief of staff; Elliott Abrams, the Middle East director at the National Security Council; and Zalmay Khalilzad, the White House liaison to the Iraqi opposition groups. Kagan’s group, tied to a web of similar neoconservative, pro-Israeli organizations, represents the constellation of thinkers whose ideological affinity was forged in the Nixon and Ford administrations.
To Akins, who has just returned from Saudi Arabia, it’s a team that looks all too familiar, seeking to implement the plan first outlined back in 1975. “It’ll be easier once we have Iraq,” he says. “Kuwait, we already have. Qatar and Bahrain, too. So it’s only Saudi Arabia we’re talking about, and the United Arab Emirates falls into place.”
LAST SUMMER, Perle provided a brief glimpse into his circle’s thinking when he invited rand Corporation strategist Laurent Murawiec to make a presentation to his Defense Policy Board, a committee of former senior officials and generals that advises the Pentagon on big-picture policy ideas. Murawiec’s closed-door briefing provoked a storm of criticism when it was leaked to the media; he described Saudi Arabia as the “kernel of evil,” suggested that the Saudi royal family should be replaced or overthrown, and raised the idea of a U.S. occupation of Saudi oil fields. He ultimately lost his job when rand decided he was too controversial.
Murawiec is part of a Washington school of thought that views virtually all of the nations in the Gulf as unstable “failed states” and maintains that only the United States has the power to forcibly reorganize and rebuild them. In this view, the arms systems and bases that were put in place to defend the region also provide a ready-made infrastructure for taking over countries and their oil fields in the event of a crisis.
The Defense Department likely has contingency plans to occupy Saudi Arabia, says Robert E. Ebel, director of the energy program at the Center for Strategic and International Studies (CSIS), a Washington think tank whose advisers include Kissinger; former Defense Secretary and CIA director James Schlesinger; and Zbigniew Brzezinski, Carter’s national security adviser. “If something happens in Saudi Arabia,” Ebel says, “if the ruling family is ousted, if they decide to shut off the oil supply, we have to go in.”
Two years ago, Ebel, a former mid-level CIA official, oversaw a CSIS task force that included several members of Congress as well as representatives from industry including ExxonMobil, Arco, BP, Shell, Texaco, and the American Petroleum Institute. Its report, “The Geopolitics of Energy Into the 21st Century,” concluded that the world will find itself dependent for many years on unstable oil-producing nations, around which conflicts and wars are bound to swirl. “Oil is high-profile stuff,” Ebel says. “Oil fuels military power, national treasuries, and international politics. It is no longer a commodity to be bought and sold within the confines of traditional energy supply and demand balances. Rather, it has been transformed into a determinant of well-being, of national security, and of international power.”
As vital as the Persian Gulf is now, its strategic importance is likely to grow exponentially in the next 20 years. Nearly one out of every three barrels of oil reserves in the world lie under just two countries: Saudi Arabia (with 259 billion barrels of proven reserves) and Iraq (112 billion). Those figures may understate Iraq’s largely unexplored reserves, which according to U.S. government estimates may hold as many as 432 billion barrels.
With supplies in many other regions, especially the United States and the North Sea, nearly exhausted, oil from Saudi Arabia and Iraq is becoming ever more critical — a fact duly noted in the administration’s National Energy Policy, released in 2001 by a White House task force. By 2020, the Gulf will supply between 54 percent and 67 percent of the world’s crude, the document said, making the region “vital to U.S. interests.” According to G. Daniel Butler, an oil-markets analyst at the U.S. Energy Information Administration (EIA), Saudi Arabia’s production capacity will rise from its current 9.4 million barrels a day to 22.1 million over the next 17 years. Iraq, which in 2002 produced a mere 2 million barrels a day, “could easily be a double-digit producer by 2020,” says Butler.
U.S. strategists aren’t worried primarily about America’s own oil supplies; for decades, the United States has worked to diversify its sources of oil, with Venezuela, Nigeria, Mexico, and other countries growing in importance. But for Western Europe and Japan, as well as the developing industrial powers of eastern Asia, the Gulf is all-important. Whoever controls it will maintain crucial global leverage for decades to come.
Today, notes the EIA’s Butler, two-thirds of Gulf oil goes to Western industrial nations. By 2015, according to a study by the CIA’s National Intelligence Council, three-quarters of the Gulf’s oil will go to Asia, chiefly to China. China’s growing dependence on the Gulf could cause it to develop closer military and political ties with countries such as Iran and Iraq, according to the report produced by Ebel’s CSIS task force. “They have different political interests in the Gulf than we do,” Ebel says. “Is it to our advantage to have another competitor for oil in the Persian Gulf?”
David Long, who served as a U.S. diplomat in Saudi Arabia and as chief of the Near East division in the State Department’s Bureau of Intelligence and Research during the Reagan administration, likens the Bush administration’s approach to the philosophy of Admiral Mahan, the 19th-century military strategist who advocated the use of naval power to create a global American empire. “They want to be the world’s enforcer,” he says. “It’s a worldview, a geopolitical position. They say, ‘We need hegemony in the region.'”
UNTIL THE 1970s, the face of American power in the Gulf was the U.S. oil industry, led by Exxon, Mobil, Chevron, Texaco, and Gulf, all of whom competed fiercely with Britain’s BP and Anglo-Dutch Shell. But in the early ’70s, Iraq, Saudi Arabia, and the other Gulf states nationalized their oil industries, setting up state-run companies to run wells, pipelines, and production facilities. Not only did that enhance the power of opec, enabling that organization to force a series of sharp price increases, but it alarmed U.S. policymakers.
Today, a growing number of Washington strategists are advocating a direct U.S. challenge to state-owned petroleum industries in oil-producing countries, especially the Persian Gulf. Think tanks such as the American Enterprise Institute, the Heritage Foundation, and CSIS are conducting discussions about privatizing Iraq’s oil industry. Some of them have put forward detailed plans outlining how Iraq, Saudi Arabia, and other nations could be forced to open up their oil and gas industries to foreign investment. The Bush administration itself has been careful not to say much about what might happen to Iraq’s oil. But State Department officials have had preliminary talks about the oil industry with Iraqi exiles, and there have been reports that the U.S. military wants to use at least part of the country’s oil revenue to pay for the cost of military occupation.
“One of the major problems with the Persian Gulf is that the means of production are in the hands of the state,” Rob Sobhani, an oil-industry consultant, told an American Enterprise Institute conference last fall in Washington. Already, he noted, several U.S. oil companies are studying the possibility of privatization in the Gulf. Dismantling government-owned oil companies, Sobhani argued, could also force political changes in the region. “The beginning of liberal democracy can be achieved if you take the means of production out of the hands of the state,” he said, acknowledging that Arabs would resist that idea. “It’s going to take a lot of selling, a lot of marketing,” he concluded.
Just which companies would get to claim Iraq’s oil has been a subject of much debate. After a war, the contracts that Iraq’s state-owned oil company has signed with European, Russian, and Chinese oil firms might well be abrogated, leaving the field to U.S. oil companies. “What they have in mind is denationalization, and then parceling Iraqi oil out to American oil companies,” says Akins. “The American oil companies are going to be the main beneficiaries of this war.”
The would-be rulers of a post-Saddam Iraq have been thinking along the same lines. “American oil companies will have a big shot at Iraqi oil,” says Ahmad Chalabi, leader of the Iraqi National Congress, a group of aristocrats and wealthy Iraqis who fled the country when its repressive monarchy was overthrown in 1958. During a visit to Washington last fall, Chalabi held meetings with at least three major U.S. oil companies, trying to enlist their support. Similar meetings between Iraqi exiles and U.S. companies have also been taking place in Europe.
“Iraqi exiles have approached us, saying, ‘You can have our oil if we can get back in there,'” says R. Gerald Bailey, who headed Exxon’s Middle East operations until 1997. “All the major American companies have met with them in Paris, London, Brussels, all over. They’re all jockeying for position. You can’t ignore it, but you’ve got to do it on the QT. And you can’t wait till it gets too far along.”
But the companies are also anxious about the consequences of war, according to many experts, oil-company executives, and former State Department officials. “The oil companies are caught in the middle,” says Bailey. Executives fear that war could create havoc in the region, turning Arab states against the United States and Western oil companies. On the other hand, should a U.S. invasion of Iraq be successful, they want to be there when the oil is divvied up. Says David Long, the former U.S. diplomat, “It’s greed versus fear.”
Ibrahim Oweiss, a Middle East specialist at Georgetown University who coined the term “petrodollar” and has also been a consultant to Occidental and BP, has been closely watching the cautious maneuvering by the companies. “I know that the oil companies are scared about the outcome of this,” he says. “They are not at all sure this is in the best interests of the oil industry.”
Anne Joyce, an editor at the Washington-based Middle East Policy Council who has spoken privately to top Exxon officials, says it’s clear that most oil-industry executives “are afraid” of what a war in the Persian Gulf could mean in the long term — especially if tensions in the region spiral out of control. “They see it as much too risky, and they are risk averse,” she says. “They think it has ‘fiasco’ written all over it.”
Among many other things, I am a Fisherman. Even on the frozen lake outside my cabin now as the cold blankets the Last Great Frontier, I will Fish. 20 Below Zero, I will put on my Red Fox Fur Mittens, and I will still fish. I cut a small hole in the Ice, and I drop in my line to see what comes up. Its cold here in Alaska now in December, and often I come up empty, but still I will fish. I do this because I am a Fisherman.
Here on the pages of TBP, I am a Fisher of Men. It can be cold here on these pages also, and here also I often come up empty. I seek no money, I have no PayPal account for donations. I don’t even get a kickback from your clicks on Amazon as JimQ does. I have only one reason for what I write, for why I fish on these pages, and that is to Save as Many as I Can. With that purpose in mind, tonight I will write for you a parable of the Fisherman.
I will begin this essay tonight with a song from Billy Joel about the Fishermen of Long Island, the “Downeaster Alexa”:
Well I’m on the Downeaster Alexa
And I’m cruising through Block Island Sound
I have charted a course to the Vineyard
But tonight I am Nantucket bound
We took on diesel back in Montauk yesterday
And left this morning from the bell in Gardiner’s Bay
Like all the locals here I’ve had to sell my home
Too proud to leave I worked my fingers to the bone
So I could own my Downeaster Alexa
And I go where the ocean is deep
There are giants out there in the canyons
And a good captain can’t fall asleep
I’ve got bills to pay and children who need clothes
I know there’s fish out there but where God only knows
They say these waters aren’t what they used to be
But I’ve got people back on land who count on me
So if you see my Downeaster Alexa
And if you work with the rod and the reel
Tell my wife I am trolling Atlantis
And I still have my hands on the wheel
Now I drive my Downeaster Alexa
More and more miles from shore every year
Since they tell me I can’t sell no stripers
And there’s no luck in swordfishing here
I was a bayman like my father was before
Can’t make a living as a bayman anymore
There ain’t much future for a man who works the sea
But there ain’t no island left for islanders like me
Over in “The Real Terrorists” thread based on a Gonzalo Lira article, Stuck and I began discussing the moral and ethical issues involved in becoming a Soldier, which can label you either a Terrorist or Patriot, depending on the perspective of who writes the History Books, or who issues the current Propaganda. I pulled in a Pop Culture reference, the tag line from the AI WOPR program in the film “Wargames”, where the only “solution” the WOPR Computer found to the problem of Tic Tac Toe was not to play the game at all. Smokey of course flamed the reference, because understanding pop culture metaphors and their significance is beyond the intellectual capacity of the mentally challenged. Regardless of what such dimwitted, ethically bankrupt and morally repulsive Napalm Artists will write here though, not playing the game is a possible choice in many ways as we proceed through this spin down. In this post, I will present a few LEGAL means by which an individual can attempt to remove himself as much as possible from the “grid”, and not be forced into becoming a Tool for Evil.
As Stuck indicated in his posting, the choice of not playing the game isn’t always available. For the Iraqui or Afghani who has Ruskie or FSofA Soldiers occupying his towns and raping his wives and daughters, he’s got no choice, he has to fight, or surrender and become a Slave to the Conquistadores.
For the Sons and Daughters of J6P when Conscription starts, their choices will also be limited, as it will probably be a whole lot harder in this go round to escape to Canada than it was in the Vietnam Era, not to mention the Hosers will probably be conscripting up Soldiers as well. However, at least for the moment while the Military remains a Mercenary Force here, our young adults still do have the Choice available not to play the game. The guys who are sitting behind consoles at Norfolk or aboard Carriers flying drones didn’t HAVE to sign up, although with fewer Jobs available all the time besides selling your soul to become an Illuminati Killing Machine they are in a sense forced into this choice. Not quite so directly as someone living in the War Zone is though.
Much more than in previous Fourth Turning cycles, because of the Internet many more people are becoming aware now that this fight isn’t so much between Nation States as it is a fight between the Haves and the Have Nots. This knowledge is likely to become more widespread as the economic spin down proceeds, and it will be very interesting to see how the newly conscripted soldiers will handle what will increasingly become maintaining a Police State inside their own home countries, rather than fighting foreign wars. As with the Collapse of the Roman Empire, my guess would be that the Army will eventually break up into factions, and there will be many Assassinations of Illuminati by Rogue Generals in the various Armies seeking Power for themselves. Locally, said incipient Warlords will confiscate the property of most typical biz owners and landholders, creating small Feudal type states.
Now, in this scenario, at the beginning those who Rebel against the Illuminati and Boil them in Oil are the Good Guys. However, they can quickly Morph into being the Bad Guys once they become the Oppressors in their own local neighborhoods, so in many cases the process will repeat itself in a Fractal fashion as along the way former Good Guys are corrupted by Evil and become Bad Guys.
Remaining Alive as a Good Guy through this whole deal is a matter of luck for the most part, although good Planning and Preparation can help you in Not Playing the Game for a while, until the Big Show comes directly to a Theatre Near You. You can also help yourself by making Connections inside your local community and beginning the process of transitioning to a locally sustainable economy.
What are the most important Choices a Young Adult can make today to remain on the Good side of the line, and not end up becoming a Killing Machine for the Illuminati, and becoming Damned to Everlasting Torment Burning in the Fires of Hell? The first thing would be to move as far away as you can from the center of industrial society. The second would be to operate in all Cash, cashing your paychecks as soon as you get them if you are still employed. This will make your life harder to track in a database .Third would be getting rid of any Internet Accounts in your name, and a Cell Phone in your name. Use a prepaid Cell Phone for communications, and buy the minutes with Cash. Be ready to dispose of the Phone when TSHTF.
Buy a laptop at Walmart with Cash. Only sign on to the internet from Publicly Available WiFi locations, for so long as they still exist. To do Transactions on the Internet, use prepaid Visa Cards you buy with Cash, for as long as those are available. Set up 2 or 3 separate Google Accounts using different prepaid Cell Phone numbers and do it from different computers you do not own, preferably in widely dispersed locations as you move outward from the center of civilization.
None of this is Illegal, its just making yourself as Anonymous as possible in the Digital Age. There are of course still other ways you can be tracked, such as with your Car and its Registration. If you have an Older Relative, preferably not with the same last name or better yet just a friend of an older relative (more removal), ask that person to register a used car you buy with Cash from an individual seller, not a Car Lot. Give this Older person Cash to pay the insurance. Somebody in a Nursing Home is a very good choice for this. Again this is not illegal, the Old Person is just “loaning” you his car, since he is not able to use it while stuck in the Nursing Home on a Respirator.
Do not Buy Property, and if possible do not even sign a Rental lease anywhere, find someplace you can rent month to month, or look in the classifieds for people seeking roommates, and again pay your share of the rent to them in CASH. Avoid putting your name or signature on ANYTHING. No loans, no leases, no bank accounts, NADA. Anything that requires a Signature, avoid like the PLAGUE. There shouldn’t be too much need for you to use Snail Mail, but if you do need to set up a Post Office Box and be ready to abandon it when TSHTF. Still, I would advise against setting one up because it will pin down your location.
Your Driver’s License is your greatest Vulnerability, and Driving is your greatest Risk in trying to stay Anonymous and off the radar. Go in TODAY and re-up your license for as long as you can, some States its 6 years before you have to go in and show up at the DMV to renew. However, once TSHTF, if you are Dodging the Draft, the minute you get pulled over for having a broken tail light is the minute you end up getting a Buzz Cut for Boot Camp when the Gestapo asks to see your Driver’s License. So practice being SCRUPULOUSLY legal when you drive, and limit your driving as much as possible. Do as much of your Commuting as you can by Bicycle or Public Transportation. Reserve your Car only for Emergency Bug Outs.
Obviously, if you are Employed anywhere you collect a Regular Paycheck attached to your Social Security Number, you are immediately Vulnerable. So the sooner you get off the grid of regular jobs with regular paychecks the better, though this is of course pretty difficult. However, there are many things you can do for CASH if you are young and strong, once you migrate out to the boonies you can do yard work, do painting or other house maintenance tasks or make like an Illegal Alien and follow the Ag Seasons, doing work harvesting or planting in various locales. If you are a good Mechanic, drop cards all around the neighborhood letting people know you will fix their cars CHEAP. My nephew who was UE for a few months kept his head above water this way. He raced on Dirt Tracks in better times, so his Garage is practically as good as a commercial one. He can yank out an engine and disassemble and reassemble it in a day. He had to do that after almost every race anyhow with his race car. If you are really bright with some money to wager, you might even stay ahead by front running the Fed for a while longer here. LOL. Of course, doing that through an anonymous account is quite difficult I am sure.
Ultimately of course, the best option is to get off the grid of money altogether and be able to find food yourself to barter with. I cannot recommend more anything for a young adult than becoming a Fisherman with your own boat, and moving to a location where there is still good fisherie. I have one friend who lives this way, he has a 30’ Downeaster he uses to fish all summer, he sells most of his catch for CASH. Winters, he plows snow, also for CASH. Sadly, we haven’t had a lot of snow so far this winter, so he is hurting some, but he has plenty of food in the larder, so his family is not starving here, and no SNAP card either. I started this post with Billy Joel’s sad paean to the Fisherman of Montauk and Long Island Sound, but to my mind it is the Fishermen who will make it though the Zero Point here. To do this though, you must place yourself in a neighborhood where there is still a good fisherie. The GOM is NOT a good choice here, unless you figure Corexit is a good Vitamin Supplement. I would advise though outfitting your Downeaster for a Sail Rig of course.
Like Bruce Springsteen in “My Home Town”, in the song the “Downeaster Alexa”, Billy Joel explores the loss of a livelihood as industrialization and financialization stole a way of life from the working man in this country. The Fishing Grounds of Montauk and the properties in the Hamptons these folks lived on became priced out of their affordability as the Pigmen of Wall Street made this property their Playground. For the Steel Mills of Pittsburgh and the Factories of Atlantic City, The Boss was RIGHT. Those jobs ain’t never coming back to these shores. For the Fishermen in Long Island Sound though? It may take some time, but one day they WILL return, far into the future no doubt.
I was eight years old and running with a dime in my hand
Into the bus stop to pick up a paper for my old man
Id sit on his lap in that big old buick and steer as we drove through town
Hed tousle my hair and say son take a good look around
This is your hometown, this is your hometown
This is your hometown, this is your hometown
In `65 tension was running high at my high school
There was a lot of fights between the black and white
There was nothing you could do
Two cars at a light on a saturday night in the back seat there was a gun
Words were passed in a shotgun blast
Troubled times had come to my hometown
My hometown, my hometown, my hometown
Now main streets whitewashed windows and vacant stores
Seems like there aint nobody wants to come down here no more
They’re closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they aint coming back to
Your hometown, your hometown, your hometown, your hometown
Last night me and kate we laid in bed talking about getting out
Packing up our bags maybe heading south
Im thirty-five we got a boy of our own now
Last night I sat him up behind the wheel and said son take a good
Look around
This is your hometown
Decreasing opportunities for “paying” jobs will force many people off the monetary grid. In the end, this is how this monetary system will be destroyed, regardless of what Helicopter Ben does here. You will have to find ways to earn your living that are local and do not demand money as an intermediary. To truly KILL the Banksters, you have to “Go Galt”, and stop using their money. You will be forced into it eventually, but if you start NOW learning how to do it, you might be able to NOT PLAY THE GAME. For a while anyhow, until the Big Show Comes to a Theatre Near You. Then you will have to make your choices, and staying on the Good side of the line will always be difficult. It may cost you your life to stay on that side of the line, but its worth it for your Everlasting Soul to do so, even if you do not believe in the Afterlife. After all, if this is the ONLY life you will ever get and you only have ONE chance going out of it to be on the side of Good or Evil, do you want to leave the earth and your corporeal existence as an enabler of EVIL? I sure don’t. When the Big Show Comes to a Theatre Near You, when your own existence and that of your loved ones is Threatened, there is no more Hiding. Then you pull out ALL the stops, and you TAKE NO PRISONERS. Pick a means to fight and make your Final Stand against Evil. Whatever means you pick, make sure you take out as many of the Enemy as possible before you go to Glory in the Kingdom of Heaven. That is just the way I see it though, I can’t speak for everyone of course, and Jesus Christ probably would not agree with that philosophy. But then, Jesus lived 2000 years ago, not now, and he was thoroughly immersed in the paradigm of the Ag Society as it had developed in his time. We are in the post Ag Society now, on our way BACK and REVERSE ENGINEERING our way to a much different lifestyle than we have known over the last couple of centuries. If the good guys WIN this battle, for all our children who make it through the Zero Point it will be a Better Tomorrow.
The recent flare up of the long running conflict in NK-SK led me to thinking about all the Proxy Wars that have been fought since the end of WWII in all the “undeveloped” nations of the world, including all the African and South American ones along with the Southeast Asian ones.
Now of course I don’t know exactly what the state of the Politics in any of those countries was prior to WWII, but as far as I know from the history books following colonial expansion, most of these countries were more or less stable, not really nation states as we think of them now but rather rough geographic areas “claimed” by one of the original colonial powers but for the most part the people living there lived as they had for centuries, in a semi stable Feudal kind of manner balanced against local Tribal interests.
The Post WWII period though began the real period of Globalism, as Corporate interests sought to acquire the resources of each of these portions of the Globe not yet part of the Global Banking system. It is at this point in each location the societies bifurcated. Along what lines? Basically, Haves and Have Nots, where local Haves wanted to Join Up and become a part of the Big Ponzi, and local Have Nots who weren’t going to get any benefit from having their land raped for resources.
So in most of those countries since this was a Haves v Have Nots battle, the Have Nots were supported by the Global Communists, either Russia or China at the time. The Haves of course were supported by the Global Capitalists, led by the Anglo-American Illuminati for the most part. For Americans growing up through this period, this was the Cold War and the fight to stop Communist Dominoes from falling in all these countries, a fight to bring them Freedom and Liberation from Oppression. It was of course precisely the opposite, to enslave all these countries under the economic slavery of Capitalism.
Of course the alternative they actually had of the kind of Communism run by Russia and China was itself a form of slavery and Totalitarianism, so they were pretty much between a Rock and a Hard Place. Lots of nice peaceful folks, subsistence farmers mainly forced to choose between two Evils, being Raped by Capitalists or subjugated to the will of the State in Centralized Communism. Once these two juggernauts got rolling, there no longer was a real choice possible to have a small Goobermint for your local area, you had to side up with one or the other of the Big Boys. No other source of weapons you could fight with that would be effective in maintaining your Freedom of course.
The collapse of the Soviet Union and the transformation of China from Communism to a hybrid Mercantilist model left the whole philosophy of communism high and dry as pretty much a failed system. In the heady days for Capitalistas following the fall of the Berlin Wall, they appeared to have successfully won the battle of who has the Better System, and Euphoria was at an all time high. I remember some academic declaring it was the “End of History” with Pax Americana. Talk about being WRONG WRONG WRONG. LOL.
However, now with the World as their Oyster, the Capitalistas did what they do, which is to build bigger Ponzis all the time, and they revved up the Loan making bizness to a level never seen before in the entire history of Homo Sapiens on Earth. “Investment” and big money loans went out to every ex-Commie country in Eastern Europe, Brasil turned into a Resource mine to suck dry and even Ruskie Gangsters got their share of Illuminati Investment turning ex-KGB apparatchiks into Billionaires virtually overnight. I remember reading just a couple of years ago that Moscow had more Billionaires than any other city on Earth. Imagine that! In just a little over a decade, Mother Russia long the home of Communism was making more Billionaires then the FSofA, home of Capitalism!
Well of course it wasn’t the End of History, and this huge expansion of the Ponzi to encompass every last square inch of the surface of the Earth is now rapidly collapsing as all those loans which created all that “wealth” aren’t returning on the investment. Why? Because the whole paradigm was based on a never ending source of cheap energy, Oil. Black Gold. Texas Tea. It wasn’t a more sustainable system than Communism, it was just a more successful system at sucking what wealth there was in the earth up faster, and so Communism went into Failure mode first.
The current failure of the Capitalist model now leaves a real Vacuum on a philosophical and economic level in all the countries that were either one or the other for a while, and whose internal populations have been fighting battles ever since base on the Capitalist-Communist dichotomy of available systems. NK is a relic of the heady days of Chinese Communism; SK is a relic of the heady days of Capitalist expansion. The country got physically divided with the Haves on one side of the line, the Have Nots on the other. Now as Capitalism fails, the Have Nots over in NK sense weakness, and besides that are being used as a Proxy by the Chinese on a geopolitical level.
Thing is here, on both sides of that line, nobody really knows what they are fighting for anymore. No real vision of the future has been presented by the leadership on EITHER side of these battle lines to give J6P or Chen Rice Wine a reason to fight anymore. For the typical Proletariat in the Communist society, Communism failed miserably. For the typical Consumer in the Capitalist society, Capitalism failed miserably. Just look at the pics in JimQs Black Friday post. If that isn’t EPIC fail, I don’t know what is.
So here we are, on the Cusp of another World War, and nobody knows what the hell they are fighting for anymore, other than personal survival. At least as of yet, there is no great Movement of people drawn to Philosophy they can fight for with passion. No Great Leaders, no Prophets of the Fourth Turning kind have emerged yet on EITHER side to provide a real vision of the future people will line up to fight for. Oh sure, on both sides here J6P and Chen Rice Wine will be conscripted up as Cannon Fodder, but do you think any J6P is going to go into Battle here the way his Grandfather in the Greatest Generation did, feeling Righteous about saving the world from Totalitarianism? J6P himself is now just a machine part in the Totalitarian State run by the Illuminati, and he KNOWS it. Every time his children get on an airplane and are frisked down to make sure there isn’t a bomb secreted in their private parts he knows it. Soon to be every time you board a subway train or bus also.
Of course he will for the most part still go into battle, his battle juices revved up into high gear by some false flag, a few Car Bombs driven into Elementary Schools around the country one day soon. How are TSA Scanners going to stop that one? Its utterly stupid to think you can prevent a terrorist attack, there are just too many targets. Besides, your REAL Terrorists are the Intelligence Agencies like the CIA and MI5 which have the resources to make any kind of event like this happen anytime they want to, as a means to push around the psychology of whole populations.
For the time being, until a Prophet does arrive here, for most everyone on either side of the old divide of Capitalism and Communism, the only reasonable choice is to run away from this battle, as far as you can, as fast as you can. There is no good justification to fight for either side in this battle. The only solution is to hunker down and wait until the fighting comes to your neighborhood, and then fight for what is truly important, family and community. Then you can go out and fight with passion for something you truly believe in. Then you can go out with GLORY, and in the end win this battle against Evil which so consumes us now. For the Meek Shall Inherit the Earth. Right AFTER the Meek get Very, VERY ANGRY.
The American way of life – which is now virtually synonymous with suburbia – can run only on reliable supplies of dependably cheap oil and gas. Even mild to moderate deviations in either price or supply will crush our economy and make the logistics of daily life impossible. – Jim Kunstler – The Long Emergency
Here we stand
Like an Adam and an Eve
Waterfalls
The Garden of Eden
Two fools in love
So beautiful and strong
The birds in the trees
Are smiling upon them
From the age of the dinosaurs
Cars have run on gasoline
Where, where have they gone?
Now, it’s nothing but flowers
America was a Garden of Eden with nothing but flowers, trees and vegetation. We bit into the forbidden fruit of oil over a century ago. It has been a deal with the Devil. Oil brought immense wealth, rapid industrialization, 2.7 million miles of paved roads, and enormous power to America. But, now the SUV is running on empty. In the not too distant future the downside of the deal with the Devil will reveal itself. America was the land of the free and home of the brave. Now it is the land of the Range Rover and home of the BMW. In a few years it could be the land of the forlorn and home of the broken down. Our entire society has been built upon a foundation of cheap oil. The discovery of oil in Titusville, PA in 1859 turbo charged the Industrial Revolution in the U.S. The development of our sprawling suburban culture was dependent upon cheap oil. Americans could not survive for a week without oil. Commerce in the U.S. depends upon long haul truckers. Food is transported thousands of miles to grocery stores. The cheap Wal-Mart crap is transported thousands of miles across the seas from China. Americans believe it is our God given right to cheap oil. We are the chosen people. Kevin Phillips, in his brilliant book American Theocracy describes our love affair with cheap oil:
Americans constitute the world’s most intensive motoring culture. For reasons of history and past abundance, no other national population has clumped so complacently around so fuelish a lifestyle. For many citizens the century of oil has brought surfeit: gas-guzzling mobile fortresses, family excursions on twenty thousand-thousand-gallons-per-hour jet aircraft, and lavishly lit McMansions in glittering, mall packed exurbs along outer beltways. Against a backdrop of declining national oil and gas output, Americans consume 25% of world energy while holding just 5% of its energy resources. As the new century began, Americans enjoyed a lifestyle roughly twice as energy intensive as those in Europe and Japan, some ten times the global average. Of the world’s 520 million automobiles, unsurprisingly, more than 200 million were driven in the United States, and the U.S. car population was increasing at five times the rate of the human population. How long that could continue was not clear.
John and Jane Q. Citizen mostly ignore these trends and details, and know nothing of geologist Hubbert’s bell-shaped charts of peak oil. Senior oil executives sometimes discuss them in industry conferences, but elected officials – many with decades of energy platitudes under their belts – typically shrink from opening what would be a Pandora’s Box of political consequences. Oil was there for our grandfathers, they insist, and it will be there for our grandchildren; it is part of the American way.
Ignoring the facts and pretending that we can count on cheap oil for eternity is delusional. It is also the American way. The age of oil is coming to an end.
There are consequences to every action. There are also consequences to every inaction. Over the next decade Americans will experience the dire consequences of inaction. The implications of peak cheap oil have been apparent for decades. The Department of Energy was created in 1977. The Department of Energy’s overarching mission was to advance the national, economic, and energy security of the United States. In 1970, the U.S. imported only 24% of its oil. There were 108 million motor vehicles in the U.S., or .53 vehicles per person in the U.S. Today, the U.S. imports 70% of its oil and there are 260 million vehicles, or .84 vehicles per person. Jim Kunstler describes our bleak future in The Long Emergency:
“American people are sleepwalking into a future of hardship and turbulence. The Long Emergency will change everything. Globalism will wither. Life will become profoundly and intensely local. The consumer economy will be a strange memory. Suburbia – considered a birthright and a reality by millions of Americans – will become untenable. We will struggle to feed ourselves. We may exhaust and bankrupt ourselves in the effort to prop up the unsustainable. And finally, the United States may not hold together as a nation. We are entering an uncharted territory of history.”
The land of the delusional has no inkling that their lives of happy motoring are winding down. The vast majority of Americans believe that oil is abundant and limitless. Their leaders have lied to them. They will be completely blindsided by the coming age of hardship.
Factories & Shopping Malls
There was a factory
Now there are mountains and rivers
you got it, you got it
We caught a rattlesnake
Now we got something for dinner
we got it, we got it
There was a shopping mall
Now it’s all covered with flowers
you’ve got it, you’ve got it
If this is paradise
I wish I had a lawnmower
you’ve got it, you’ve got it
If Americans had any sense of history longer than last week’s episode of Dancing with the Stars (how about that Bristol Palin!), they may have noticed that the modern age has lasted a mere 150 years and has been completely dependent upon cheap plentiful oil. This is a mere eye blink in the history of mankind. American exceptionalism refers to the opinion that the United States is qualitatively different from other nations. Its exceptionalism is claimed to stem from its emergence from a revolution, becoming “the first new nation” and developing “a unique American ideology, based on liberty, egalitarianism, individualism, populism and laissez-faire”. This feeling of superiority stems from the belief that we have a moral superiority and God has chosen our country to be a shining symbol for the rest of the world. It is the ultimate in hubris to think that we are the chosen ones. An enormous amount of credit for the American Century (1900 – 2000) must be given to pure and simple luck.
Everything characteristic about the condition we call modern life has been a direct result of our access to abundant supplies of cheap fossil fuels. Fossil fuels have permitted us to fly, to go where we want to go rapidly, and move things easily from place to place. Fossil fuels rescued us from the despotic darkness of the night. They have made the pharaonic scale of building commonplace everywhere. They have allowed a fractionally tiny percentage of our swollen populations to produce massive amounts of food. All of the marvels and miracles of the twentieth century were enabled by our access to abundant supplies of cheap fossil fuels. The age of fossil fuels is about to end. There is no replacement for them at hand. These facts are poorly understood by the global population preoccupied with the thrum of daily life, but tragically, too, by the educated classes in the United States, who continue to be by far the greatest squanderers of fossil fuels. – Jim Kunstler – The Long Emergency
Every accomplishment, invention, and discovery of the 20th Century was due to cheap accessible fossil fuels. The American industrial age was powered by cheap plentiful oil. One hundred and ten years after the discovery of oil in Titusville, PA an American walked on the moon. We harnessed the immense power of oil and rode it hard. An empire was born and grew to the greatest in history through the utilization of oil and oil byproducts. It is no coincidence that U.S. GDP has been dependent upon the growth in fossil fuel consumption over the last 150 years.
The self centered delusional myopic American citizenry see no parallel between the American Empire built on a foundation of oil and the Dutch Empire built upon wind and water or the British Empire established on the discovery of vast quantities of coal. The Dutch Empire of the 1600s had 6,000 ships and 1,000 windmills generating power. The British Empire used coal to power steam engines, pumps, locomotives and ships and forged a great empire in the 1700s and 1800s. Today, the Netherlands has a GDP lower than Mexico. The U.K. has a GDP on par with Italy. You can be sure you are no longer an empire when your GDP is on par with Mexico and Italy. The United States has grown its GDP to $14.7 trillion by exploiting fossil fuels. The American Empire is clearly waning as its dependence on foreign oil slowly bankrupts the country. We consume 140 billion gallons of gasoline every year keeping our suburban sprawl mall based lifestyle viable.
Cars, Highways & Billboards
Years ago
I was an angry young man
I’d pretend
That I was a billboard
Standing tall
By the side of the road
I fell in love
With a beautiful highway
This used to be real estate
Now it’s only fields and trees
Where, where is the town
Now, it’s nothing but flowers
The highways and cars
Were sacrificed for agriculture
I thought that we’d start over
But I guess I was wrong
Americans believe our ingenuity, brilliance and blessings from God have led to the elevation of our country to eminence as the greatest empire in history. But, in reality it was due to a black sticky substance that we stumbled across in 1859. Those who believe in American Exceptionalism scoff at the idea that our empire would not exist without oil. They prefer to ignore and downplay the impact of oil on our society. Too bad. Here are the facts from www.lifeaftertheoilcrash.net/.
Approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US.
Pesticides and agro-chemicals are made from oil.
Commercial fertilizers are made from ammonia, which is made from natural gas.
Most farming implements such as tractors and trailers are constructed and powered using oil-derived fuels.
Food storage systems such as refrigerators are manufactured in oil-powered plants, distributed using oil-powered transportation networks and usually run on electricity, which most often comes from natural gas or coal.
The average piece of food is transported almost 1,500 miles before it gets to your plate.
In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices.
The construction of an average car consumes the energy equivalent of approximately 20 barrels of oil.
The construction of the average desktop computer consumes ten times its weight in fossil fuels.
According to the American Chemical Society, the construction of single 32 megabyte DRAM chip requires 3.5 pounds of fossil fuels.
Recent estimates indicate the infrastructure necessary to support the internet consumes 10% of all the electricity produced in the United States.
The manufacturing of one ton of cement requires 4.7 million BTUs of energy, which is the amount contained in about 45 gallons of oil.
Our entire civilization will collapse in a week without oil. Try to imagine life if the 159,000 gas stations in the country ran dry. We are running on fumes and refuse to acknowledge that fact. We sooth our psyche with delusions of green energy (solar, wind, ethanol); drill, drill, drill mantras; abiotic oil theories; and vast quantities of shale gas. The concept of energy required to extract an amount of energy completely goes over the head of media pundits and those who prefer not to think. If you expend 2 gallons of gasoline in your effort to extract 1 gallon of gasoline, you’ve hit the wall. We have sacrificed our future in order to maximize our present, as William James concluded in the late 1800s:
“The most significant characteristic of modern civilization is the sacrifice of the future for the present, and all the power of science has been prostituted to this purpose.”
Americans have a fatal character flaw of desiring others to think they are successful because they drive an expensive gas guzzling automobile and reside in an immense energy intensive McMansion in suburbs 30 miles from civilization. Delusional Americans have convinced themselves that the appearance of success is success. Leasing $50,000 BMWs for decades and borrowing $500,000 to live in a $300,000 house has already pushed millions of egotistical to the edge. Of the 250 million passenger vehicles on the road today, 100 million are SUVs or pickup trucks. The average fuel mileage is 17 mpg. Approximately 70% of Americans drive to work every day, with 85% driving alone. They spend 45 minutes on average commuting to and from work and drive 15 miles to work. The average home size increased from 1,400 sq ft in 1970 to 2,300 sq ft today, despite the fact that the average household size decreased from 3.1 to 2.6. The bigger is better fantasy will be devastating on the downward slope of peak oil.
Pizza Huts, Dairy Queens & 7 Elevens
Once there were parking lots
Now it’s a peaceful oasis
you got it, you got it
This was a Pizza Hut
Now it’s all covered with daisies
you got it, you got it
I miss the honky tonks,
Dairy Queens, and 7-Elevens
you got it, you got it
And as things fell apart
Nobody paid much attention
you got it, you got it
How will Americans survive without the 7,500 Pizza Huts, 5,000 Dairy Queens, and 8,000 7-11s that dot our highways? The average Joe is so busy tweeting, texting, and face-booking on their iPads, Blackberries, and laptops, watching Dancing With the Stars on their 52 inch HDTV bought on credit, or cruising superhighways in their leased Hummers to one of the 1,100 malls or 46,000 shopping centers, that they haven’t paid much attention as peak oil crept up on them. The globalization miracle of cheap goods produced in China and shipped across the world by cargo ship and then trucked thousands of miles to your local Wal-Mart is wholly reliant upon cheap oil. Our own military has concluded that:
By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. – Joint Operating Environment Report
When worldwide oil demand slightly exceeded worldwide oil supply in 2008, prices surged to $145 per barrel. A 10 million barrel per day shortfall is unfathomable by the purposefully ignorant masses. The sprawling suburbia that now houses the American population will become not viable when oil prices rise above $200 per barrel. Out-of-town shopping and entertainment malls will be deserted. The prosperity borne from the advent of oil is waning. Jim Kunstler explains the end game in The Long Emergency:
The entropic mess that our economy has become is in the final blow-off of late oil-based industrialism. The destructive practices known as “free market globalism” were engendered by our run-up to and arrival at the world oil production peak. It was the logical climax of the oil “story”. It required the breakdown of all previous constraints – logistical, political, moral, cultural – to maximize the present at the expense of the future, and to do so for the benefit of the very few at the expense of the many. Even mild to moderate deviations in either price or supply [of oil and gas] will crush our economy and make the logistics of daily life impossible.
The United States is already tottering, as the oligarchy of the Wall Street banking syndicate, global mega-corporations and corrupt political hacks in Washington DC have pillaged the wealth of the country and left a middle class gasping for air. The mood of the country is already darkening as The Fourth Turning gathers steam. The recognition by the masses that peak cheap oil is a fact will contribute greatly to the next stage of this Crisis. Fourth Turning periods always lead to war. American troops are not in the Middle East to spread democracy. They are the forward vanguard in the coming clash over depleting oil resources. We are entering an era of strife, war, chaos and destruction. The facts of who controls oil supply and who needs oil (U.S. – 25%, China – 10%) are clear. Kunstler bluntly deals with the facts:
Fossil fuel reserves are not scattered equitably around the world. They tend to be concentrated in places where the native peoples don’t like the West in general or America in particular, places physically very remote, places where we realistically can exercise little control (even if we wish to). The decline of fossil fuels is certain to ignite chronic strife between nations contesting the remaining supplies. These resource wars have already begun. There will be more of them. They are very likely to grind on and on for decades. They will only aggravate a situation that, in and of itself, could bring down civilizations. The extent of suffering in our country will certainly depend on how tenaciously we attempt to cling to obsolete habits, customs, and assumptions – for instance, how fiercely Americans decide to fight to maintain suburban lifestyles that simply cannot be rationalized any longer. – Jim Kunstler – The Long Emergency
Mr. Kunstler believes that the U.S. will be forced to downscale, localize and adapt to a new reality. I wholly support his attempt to warn the American people and would urge those who chose to think that preparing for a more agrarian lifestyle that will be forced upon us by circumstances is essential. No technological miracle will save us from our fate. Decades of inaction will have a price. I truly hope that his optimism that hardship will renew the American spirit will reveal itself:
“But I don’t doubt that the hardships of the future will draw even the most secular spirits into an emergent spiritual practice of some kind.”
As I live in the outer suburbs and commute 30 miles per day into the decrepit decaying city of Philadelphia every day, I’m less optimistic that the transition will be smooth or even possible. Kunstler’s view of the suburbs is accurate:
“The state-of-the-art mega suburbs of recent decades have produced horrendous levels of alienation, loneliness, anomie, anxiety, and depression.”
Families stay huddled in their McMansions, protected from phantoms by state of the art security systems. Their interaction with the world is through their electronic gadgets. Neighborhoods of cookie cutter 4,000 sq ft mansions appear deserted. Human interaction is rare. Happiness is in short supply. As I sit in miles of traffic every morning during my soul destroying trek to work I observe the thousands of cars, SUVs, and trucks and wonder how this can possibly work when the peak oil tsunami washes over our society in the next few years. Then I reach the bowels of the inner city and my pessimism grows. This concrete jungle is occupied by hundreds of thousands of uneducated, unmotivated, wards of the state. They live a bleak existence in bleak surroundings and depend upon subsistence payments from the depressed suburbanites to keep them alive. How will they survive in a post peak oil world? They won’t.
The Hirsch Report and Jim Kunstler’s The Long Emergency both were published in 2005. M. King Hubbert warned U.S. leaders decades in advance about the expected timing of peak oil. The warnings have fallen on deaf ears. We were busy with our wars of choice, home price wealth, gays in the military, and the latest episode of Jersey Shore.
And as things fell apart
Nobody paid much attention
David Walker, the former Comptroller of the United States from 1998 until 2008, has been warning politicians, the media, and the American public for over a decade that we are off course and headed for disaster. In August 2007, before the financial system meltdown of 2008, Mr. Walker declared:
The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon. There are striking similarities between America’s current situation and the factors that brought down Rome, including declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government. The fiscal imbalance meant the US was on a path toward an explosion of debt. With the looming retirement of baby boomers, spiraling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks. Current US policy on education, energy, the environment, immigration and Iraq also was on an unsustainable path. Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernize everything from highways and airports to water and sewage systems.
Three years have passed since Mr. Walker sounded the alarm and issued his dire warning. The National Debt in August 2007 was $8.9 trillion. Today it stands at $13.6 trillion, a 53% increase in just over 3 years. It took 205 years as a country to accumulate $4.7 trillion of debt. We’ve added $4.7 trillion in the last 38 months. It doesn’t appear that anyone in government heeded Mr. Walker’s warnings.
The perpetually optimistic pundits that occupy the positions of influence on CNBC and the other MSM networks try to paint a rosy picture of the American state of affairs day after day. They urge citizens to spend money they don’t have. They are sure that extending unemployment benefits to 99 weeks will improve the unemployment situation. They declare that Cash for Clunkers and the Home Buyer Tax Credit were successful government programs. They are sure that invading countries in the Middle East will make America safer. Nobel Prize winners in economics declare that the government should undertake another $8 to $10 trillion of money printing because the first $5 trillion wasn’t enough.
The Federal Reserve is pulling out all the stops in attempting to invigorate the American economy. The stock market is surging. Everything is surging. The optimists are crowing that all is well. Deficits don’t matter. We can borrow our way to prosperity. Cutting taxes will not add $4 trillion to the National Debt if not paid for with spending cuts. All is well. So, the question remains. Was David Walker wrong? Are we actually on a perfectly sturdy solid platform? Or, are we on the Deepwater Horizon as it burns and crumbles into the sea? Let’s examine both storylines and decide which is true.
AMERICA ON A STURDY PLATFORM
The National Debt of $13.6 trillion is manageable because interest rates remain at historic low levels.
The addition of $1.6 trillion in debt per year is necessary because government must step in for the lack of spending in the private sector. This will jump start the economy. This is Keynesianism 101.
The debt to GDP ratio of 93% is not dangerous. Japan has a debt to GDP ratio of 200% and they are doing fine. This proves we have plenty of room to grow our debt.
The US dollar is the reserve currency for the entire world. We can systematically devalue the USD, which will reduce our foreign debt burden over time. The foreigners who leant us the money are on the hook and they have no way out.
A depreciating dollar will help our manufacturing industry by making American exports cheaper in foreign markets.
The $700 billion TARP plan saved the American financial system. The American taxpayer will end up making a profit in the long run from this program.
Cash for Clunkers was an astounding success. It increased demand for autos dramatically.
The Homebuyer Tax Credits resulted in a surge in home sales and stabilization of home prices.
The $800 billion Stimulus plan saved America from a 2nd Great Depression. Without it, we would have lost millions of jobs.
Consumer spending accounting for 70% of GDP is sustainable and desirable. If we can just get credit flowing again and encourage consumers that it is safe to use their credit cards to spend, the economy will come roaring back.
This is not the time to save. Nobel Prize winners in economics urge Americans to spend because of the Paradox of Thrift. It may be smart for one person to save more than they spend, but if everyone does it a consumer society will collapse. We can save later is the recommendation.
A QE2 of $8 to $10 trillion would surely increase the animal spirits of the dejected American people. The stock market would soar to 20,000 and everyone would feel rich. Spending would surge. All would be well again.
The Social Security Trust Fund is not broke. The money contributed by Americans over the decades is in a lockbox and the fund will be solvent for decades. A few tweaks and it will be solvent forever.
Medicare has been one of the best government programs ever conceived. It has sustained our senior citizens and delivered high quality care to all at a reasonable cost.
Baby Boomers are rational and realistic. The statistics that show they have not saved enough to sustain them in retirement is overblown. Social Security will suffice. If not, they’ll just work a little longer. No worries.
Obamacare will reduce healthcare costs, improve service, cover more people, and reduce the profits of insurance companies and drug companies.
We have the best educational system in the entire world. People from all over the world want to get into our best Universities. No Child Left Behind has been a huge success.
We are safer today than we were on September 11, 2001. We won the Iraq War and freed the Iraqis from the clutches of a madman. We are fighting them over there so we don’t have to fight them over here. The terrorists are in disarray and retreat.
The $1.1 trillion spent on the Middle East Wars, the trillions spent on the Dept of Homeland Security, and the expansion of government ability to protect its citizens through enhanced surveillance techniques and enhanced interrogation techniques on suspected terrorists has been beneficial to the safety and security of the American people.
A Defense budget of $900 billion per year is essential to our national security. We are surrounded by potential enemies.
It is a net positive for the US to allow illegal immigrants to stay in the country. Who else would we get to work in the fields picking lettuce and cutting our suburban lawns?
Gasoline is only $2.70 a gallon. We are awash in supplies of oil. Peak oil is a myth perpetuated by environmental nuts. We have centuries worth of oil in the Bakken Shale. If we would just open up Alaska to drilling, our troubles would be gone. Drill, Baby, Drill.
Our crumbling infrastructure is actually a fantastic opportunity. A 2nd Stimulus program to upgrade our infrastructure would create millions of high paying jobs.
AMERICA ON A BURNING PLATFORM
The National Debt is $13.6 trillion today. Interest expense for fiscal 2010 totaled $414 billion. Based upon the current spending path and assuming that the Bush tax cuts are extended, the National Debt will exceed $20 trillion by 2015. A reasonable expectation of 5% interest rates would result in annual interest expense of $1 trillion. The entire budgeted outlays of the US government are $3.5 trillion today.
Deficits exceeding $1 trillion per year are baked into the cake for the next decade. Non-Defense discretionary spending totals only $700 billion. Defense spending totals $900 billion. The remaining $1.9 trillion is on automatic pilot for Social Security, Medicare, Medicaid, and other entitlement programs. Politicians declaring they will freeze discretionary spending are treating you like fools. It will solve nothing.
Debt as a percentage of GDP will exceed 125% of GDP by 2015. Rogoff & Reinhart in their book This Time is Different point out the dangers once debt surpasses 90% of GDP: The relationship between government debt and real GDP growth is weak for debt/GDP ratios below 90% of GDP. Above the threshold of 90%, median growth rates fall by 1%, and average growth falls considerably more. The chances of bad things happening to a country increase dramatically after the 90% level is surpassed.
Japan began their 20 years of tears with a debt to GDP ratio of 52% and a National Savings rate of 15%. The Japanese people bought 90% of the debt that the government issued. Today, the debt to GDP ratio is 200% and the National Savings rate is 2%. The US entered this crisis with a debt to GDP ratio of 80% and a National Savings rate of 1%. We depend on foreigners to buy more than 50% of our new debt. We do not control our own destiny.
A depreciating US dollar is already creating inflation in many assets. Gold, silver, oil, and agricultural commodities are increasing in price faster than the stock market. The policy of the US government and Federal Reserve of devaluing the currency is being matched by similar efforts in countries across the globe. The result is a flood of liquidity creating bubbles which will pop. The American middle class will be squeezed harder as their wages stagnate, while their food, energy, and costs at Wal-Mart go higher.
TARP, the purchase of $1.5 trillion of Mortgage Backed Securities by the Federal Reserve, 0% interest rates, and accounting rule changes by the FASB have done nothing but paper over the fact that the biggest financial institutions in the US are insolvent. The assets on their books are worth 50% less than they are reporting. They are zombie banks. Their losses on residential real estate, commercial real estate and consumer credit continue to grow. The only beneficiaries of keeping zombie banks alive are the bankers who are receiving billions in compensation while the middle class dies a slow painful death.
Cash For Clunkers, Home Buyer Tax Credit and energy efficiency credits did nothing but shift demand forward and cost the American taxpayer $25 billion. The estimated cost to the tax payer per incremental home sold was $100,000. Auto sales and home sales plunged as soon as the credits ran out. Home prices are falling and used car prices have soared due to less supply, hurting the poor.
The borrowing of $800 billion from the Chinese to dole out to unions and political hacks all over the country has been a complete disaster. Unemployment has gone up by over 4 million since the stimulus was passed. Government spending has crowded out private spending. The economy hasn’t recovered because it was never allowed to bottom. Why look for a job when the government pays you for two years to watch Oprah in a house where you haven’t made a mortgage payment in 18 months?
Consumers’ spending money they don’t have, saving less than 5% of their disposable income, and putting away nothing for their retirement is unsustainable. The average credit card debt per household is about $15,700. In 1968, consumers’ total credit debt was $8 billion (in current dollars). Now the total exceeds $880 billion. Americans currently owe $917 billion on revolving credit lines and $80 billion of it is past due, according to the latest Federal Reserve statistics.
A scaling back of consumer spending to a sustainable 64% of GDP would reduce consumer spending by $500 billion per year. This would allow Americans to save and invest in the country. This is considered crazy talk in the Keynesian economic circles.
The anticipation of QE2 has already made the dollar drop 10% and gold, silver and oil jump 10%. Ben Bernanke and the Federal Reserve are conducting an experiment on the American people. What they are doing today has never been attempted in human history. It boils down to whether the authorities can cure a disease brought on by too much debt by doubling and tripling the dosage of debt. If this experiment fails, the dollar collapse and possible hyperinflation would lead to anarchy. Ben is confident it might work. Are you?
Social Security and Medicare have an unfunded liability exceeding $100 trillion. There is no money in a lockbox. Congress opened the lockbox and spent the money. Baby boomers are turning 50 years old at a rate of 10,000 per day. There is no possibility that the promises made to Americans by politicians can be honored. No politician of either party will tell the truth to the American public. A massive reduction in benefits or a massive increase in taxes would be required to deliver on this promise.
The 2,000 page Obamacare bill that no one in Congress read was sold to the American people as a cost saving, care enhancing package of goodies. The reality is that it will increase the national debt by hundreds of billions, ration care, drive more doctors into retirement, strangle small business with onerous regulations and enrich the insurance companies and drug companies. The unintended consequences will be devastating.
Total military expenditures for the entire world are $1.9 trillion annually. The US accounts for $900 billion of this expenditure. This is 7 times as much as the next largest spender – China.
The wars of choice in the Middle East since 2001 have cost unborn generations of Americans $1.1 trillion so far, with a final cost likely reaching $3 trillion. Just like Donald Rumsfeld estimated. Over 5,700 Americans have lost their lives and another 39,000 have been wounded. The casualties in the countries that have been invaded number in the hundreds of thousands. Are we better off than we were on September 10, 2001?
Defense spending in 2000 was $359 billion or 3.6% of GDP. Today it is $900 billion or 6.1% of GDP. Every dime of these expenditures is borrowed. Are we safer today?
The Department of Energy was created in 1979 in order to create an energy policy that would reduce our dependence on foreign oil. The United States, which makes up 4% of the world’s population, consumes 25% of the world’s oil on a daily basis. In 1970 we imported 24% of our oil. Today we import 70% of our oil.
Over 50% of our oil imports come from countries whose populations hate the US. Mexico, which accounts for 9% of our current oil supply, will become a net importer by 2015.
The US has not built a new nuclear power plant or oil refinery since 1980.
The existing energy infrastructure is rusting away. 80% to 90% of the system must be rebuilt. The cost of rebuilding the infrastructure will be $50 – $100 trillion. We have no blueprints, few supplies and fewer trained engineers and construction workers.
Peak oil is a fact. World liquid oil production peaked at 86 million barrels per day in 2006. It has not reached that level since, even when prices soared to $145 per barrel. Demand will move relentlessly upward as China and India and the rest of the developing world march forward.
The US Military has concluded in a report put out a few months ago that by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. A severe energy crunch is inevitable without a massive expansion of production and refining capacity. While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds.
THE SHIP OF STATE
David Walker was in a ship well ahead of the US Titanic crossing the Atlantic. He saw the dangerous icebergs floating in the ocean. He sent a message to the Captains (Bush, Obama) and Executive Officers (Greenspan, Bernanke, Paulson, Geithner) of the US Titianic that there was danger ahead. They should have reduced speed and doubled the lookouts. Instead they listened to the Managing Director of the cruise line (Wall Street) and increased speed. The US Titanic was unsinkable. When the inevitable collision with the iceberg occurred, those in command chose to disbelieve the possibility that the mighty ship could sink. The nearest ship was four hours away. If the US Titanic had stopped immediately after striking the iceberg, it would have remained afloat until the rescue ship arrived. Instead, the masters of the ship chose to keep going as the compartments below the surface continued to fill with water. Reputation and hubris drove them to take these actions.
Those in command knew that there was only room on the lifeboats for 1,100 people. There were 2,200 people onboard. It is interesting to note that 60% of the First Class (the ruling elite) passengers survived the sinking, while less than 25% of the Third Class (working middle class) and crew survived.
David Walker has presented a case for inter-generational sacrifice. Are today’s generations willing to keep robbing future generations of Americans by being fiscally irresponsible today? Every borrowed dollar spent today is a tax on future generations. Are we selfish enough to leave our children and grandchildren with an un-payable burden so that we can live well today? Don’t the Wall Street bankers and Washington politicians have children and grandchildren? It is immoral and despicable that American leaders and its citizens aren’t willing or able to make the tough choices needed to save the ship of state. Every great empire withered away due to the accumulation of bad decisions. Ask yourself whether this country has made the right choices in the last 30 years. Are we making the right choices today? If you are honest, the answer is NO. We’ve hit the iceberg. The ending is unavoidable.
Sing us a song of the century
That’s louder than bombs and eternity
The era of static and contraband
That’s leading us into the promised land
Tell us a story that’s by candlelight
Waging a war and losing the fight
They’re playing the song of the century
of panic and promise and prosperity
Tell me a story into that goodnight
I read the article in the Atlantic about Israel attacking Iran by Jeffrey Goldberg. It attempted to be a propaganda piece on Israel and their dire predicament in the Middle East. The same Israel that possesses 100 nuclear warheads. They are truly in mortal danger from Iran. By the way, Mr Goldberg, who served in the Israeli Army, wrote an article in 2002 saying that Sadaam Hussein had links to al Qaeda, so we know he never gets his facts mixed up with lies and propaganda. The article actually makes Netenyahu look like a nutjob seeking his 100 year old daddy’s approval. His “reasoning” for going to war with Iran is based on emotional proclamations about the Holocaust. When you don’t have facts to back up your position, fall back on mushroom clouds and the holocaust. That is the Israeli playbook.
Mr. Wright does a fantastic job pointing out that all of the Israeli arguments for attacking Iran are weak, invalid, and based upon false propaganda. The Israelis don’t care. They are on a mission to destroy Iran. They know that Obama is a weak man. They will attack without his approval and force him into conflict with Iran. Obama, being the weak political hack that he is, may actually think an attack will benefit him politically. When your domestic agenda is in tatters, find a foreign bogeyman to distract the masses. The Jewish controlled media in the US supports war with Iran. They blare the propaganda from the loudspeakers 24 hours a day.
News stories are slanted to make the masses think Iran is actually a threat to the US. Recent polls show 60% approval for attacking Iran. It is beyond delusional that a country that spends $2.5 billion per year on their military is a threat to a country that spends $895 billion per year on their military. Our military spends $2.5 billion on toilet seats.
The part of the story that no one addresses are the unintended consequences of attacking Iran. Neo-cons aren’t big on thinking through the consequences of their actions. It gets too messy for their neat little world domination game of Risk. Before I get to the unintended consequences, let’s address the known consequences:
The US military is already fighting 2 wars and has stretched our soldiers beyond the breaking point. I wonder if the neo-cons are ready to re-institute the draft for more cannon fodder. It is much easier to set up recruiting stations in poor neighborhoods where youth unemployment is 50%. See, there are benefits to a depression.
We’ve borrowed $1.067 trillion from the Chinese to fight our two current wars of choice. How many more billions will it cost to destroy Iran. Maybe we should ask Donald Rumsfeld. Secretary Rumsfeld estimated the costs of the Iraq War to be in the range of $50 to $60 billion, a portion of which they believed would be financed by other countries. Pretty close for a government bureaucrat.
The combination of further borrowing with a definite spike in oil prices to over $100 a barrel would be the final nail in the coffin for the US Economy. A deep lasting Depression would ensue and unemployment would soar.
There is no doubt that air strikes by Israel and/or the US would set back the Iranian nuclear program for years. The MSM would declare success and the Neo-cons on Fox News would be doing back flips. Then reality would set in. the Iranian leaders have plenty of options to make life really miserable for the US and Israel. Here are possible unintended consequences:
Iran would immediately launch a torrent of long range missiles into the Green Zone and other US bases in Iraq where 65,000 troops sit. Thousands of American casualties would result.
Iranian fighter jets would launch Exocet missiles at every oil tanker within reach in the Strait of Hormuz and possibly block the Strait.
Iranians would unleash thousands of mines into the Strait of Hormuz, effectively stopping the shipments of oil to the world.
Iranian fighters would fire their Russian built Sunburn missiles that fly just above the surface of the water and sink a couple of our multi-billion dollar aircraft carriers.
Insurgents in Iraq would start blowing up everything that moved in Baghdad. Shias and Sunnis would be at war within hours of the attack on Iran.
Hezbollah would launch thousands of missiles into Israel and the all out war would resume in Lebanon and Gaza.
Venezuela would declare an oil embargo on the US. Gas prices in the US would go from $2.75 to $5.00 overnight.
Pro-Iranian factions within Pakistan would topple the American supported President. Nuclear weapons would now be in the hands of Iranian sympathizers. India would immediately mobilize for possible war.
Pro-Iranian factions within Saudi Arabia and other unstable Middle East countries would unleash their fury on anyone supporting Israel or the US.
Russia and China would condemn the actions of the US and Israel and offer no support within the United Nations.
North Korea would use this opportunity to ratchet up tensions with South Korea and possible war.
If the oil flow from the Middle East is interrupted for longer than a week, the US economy will come to a grinding halt. Gas lines will form. Riots would ensue when food is unable to be transported to grocery stores.
$200 oil would break the back of the fragile US economic system. Gold prices would soar.
Muslims in Europe would take to the streets in violent protests.
Sleeper cells of Muslim terrorists would be activated in the US and bombs would go off on subways and in shopping malls.
Will all of these things happen? No. Will some of them happen? Yes. Are there other possible consequences I haven’t considered? Yes. An attack on Iran would be an extremely stupid thing to do with the world economic situation so fragile and tensions already high. I believe it will happen in the near future. I also believe it will mark the start of the violent portion of the Fourth Turning. Below is a link to a war game conducted by the Brookings Institute earlier this year. Enjoy.
Has the Atlantic magazine become a propaganda tool — “a de facto party to the neoconservative and Israeli campaign to initiate a global war with Iran”? That question was being discussed last week on The Atlantic’s own Web site, among other places, after the magazine unveiled a cover story saying that Israel is likely to bomb Iran within a year.
The article wasn’t an argument for bombing, just a report on Israel’s state of mind. So why all the outrage — why, for example, did Glenn Greenwald of Salon title his slashing assessment of the Atlantic article “How Propaganda Works: Exhibit A”?
In part because the author of the article is Jeffrey Goldberg, who has previously been accused of pushing a pro-war agenda via ostensibly reportorial journalism. His 2002 New Yorker piece claiming to have found evidence linking Saddam Hussein to al Qaeda is remembered on the left as a monument to consequential wrongness. And suspicions of Goldberg’s motivations only grow when he writes about Israel. He served in the Israeli army, and he has more than once been accused of channeling Prime Minister Bibi Netanyahu.
There is certainly a bit of channeling in Goldberg’s Atlantic piece.For example: “Netanyahu’s belief is that Iran is not Israel’s problem alone; it is the world’s problem, and the world, led by the United States, is duty-bound to grapple with it.” Still, the piece is no simple propaganda exercise. Indeed, what’s striking is that, for all the space given to the views of hawkish Israeli officials, they don’t wind up looking very good, and neither does their case for bombing Iran. The overall impression is that, as Paul Pillar, a former C.I.A. official, put it after reading Goldberg’s piece, Israel’s inclination to attack Iran is “more a matter of the amygdala and emotion than of the cortex and thought.”
For starters, Netanyahu comes off in Goldberg’s article as so psychologically enslaved by his uberhawk father as to be incapable of making autonomous policy decisions. (One Israeli politician told Goldberg that there can be no two-state solution until the 100-year-old father dies.) So the elder Netanyahu’s manifest enthusiasm for military action against Iran may be one of the most powerful forces behind it. This shouldn’t inspire American confidence in such a policy — and one thing the Atlantic article drives home is that Israel very much wants America to support air strikes or, better yet, actually conduct them.
The debate becomes about who should bomb Iran, not about whether Iran should be bombed.
When the subject turns from Netanyahu’s psychology to Israel’s psychology, the inclination to bomb Iran still looks none too cerebral. One of the prime movers behind it is that Israel’s regional nuclear monopoly has “near-sanctity, in the public’s mind” because it has “allowed the Jewish state to recover from the wounds of the Holocaust.” This is an understandable reaction to the trauma of the Shoah, and it helps explain the political pressure to bomb Iran, but it’s not a sound strategic reason to do so.
Memory of the Holocaust also, of course, informs Israel’s Iran policy in another way. “The Jews had no power to stop Hitler from annihilating us,” an anonymous Israeli official tells Goldberg. “Today, 6 million Jews live in Israel, and someone is threatening them with annihilation. But now we have the power to stop them. Bibi knows that this is the choice.”
Actually, my own sources tell me that, though many Israelis take seriously this prospect of Iran trying to annihilate them, Israel’s policy elites by and large don’t. They realize that Iranian leaders aren’t suicidal and so wouldn’t launch a nuclear strike against a country with at least 100 nukes. On close reading, as others have noted, the Atlantic piece suggests that this sober view indeed prevails in Israel’s higher echelons. Though Netanyahu warns us about a “messianic apocalyptic cult” possessing nuclear weapons, he doesn’t seem to be seriously imagining the “cult” launching a first strike. Goldberg writes: “The challenges posed by a nuclear Iran are more subtle than a direct attack, Netanyahu told me.”
So what are those challenges? For one thing, “Iran’s militant proxies would be able to fire rockets and engage in other terror activities while enjoying a nuclear umbrella.” Whether heading off this prospect would justify bombing Iran is an interesting question, but we don’t need to ask it, because the prospect isn’t real. There’s no way Iran’s having a nuclear weapon would keep Israel from taking out Hezbollah missile sites in Lebanon as missiles from them rained down on Tel Aviv. If the Holocaust has left Israelis with an exaggerated fear of Iran’s intentions, it has also left them with an absolute refusal to be cowed.
One “existential” threat that Israel’s policy elites do seem to take seriously is that a nuclear Iran might render Israel such a scary place to live as to induce a brain drain. “The real threat to Zionism is the dilution of quality,” defense minister Ehud Barak tells Goldberg. Here again, I think the threat is overstated. After a year or two, Iran’s possession of nukes would become background noise for the average Israeli, less salient than periodic flurries of missiles from Lebanon or Gaza — flurries that so far have failed to noticeably drain Israel of intellectual capital.
The “brain drain” issue illustrates what weak “propaganda” much of Goldberg’s piece is: America is supposed to support — or even conduct — a military attack designed to keep talented people from immigrating to America? If I were Israel, I’d hire a new propagandist.
So, if this piece, read closely, makes for such an ineffectual pro-bombing pamphlet, why is Goldberg being pilloried as a propagandist?
For starters, there’s the claim that, though he spends a fair number of bullet points on the blowback from an attack on Iran, he still understates it. No mention, for example, of how an American-backed attack (and America would surely stand by Israel in the end) would feed the war-on-Islam narrative that is already starting to fuel home-grown terrorism in America.
But the main charges against Goldberg aren’t about loading the cost-benefit analysis. They’re about framing the future debate. His piece leaves you thinking that Israel will attack Iran very soon unless America does the honors. So the debate becomes about who should bomb Iran, not about whether Iran should be bombed.
And this is the way Israel’s hawks want the debate framed. That way either they get their wish and America does the bombing, or, worst case, they inure Americans to the prospect of a bombing and thus mute the outrage that might otherwise ensue after a surprise Israeli attack draws America into war. No wonder dozens of Israeli officials were willing to share their assessments with Goldberg, and no wonder “a consensus emerged that there is a better than 50 percent chance that Israel will launch a strike by next July.”
Yossi Alpher, an Israeli peace activist and a 12-year veteran of the Mossad, has opined that Goldberg was “naïve” in not realizing that these officials were using him as part of a public relations campaign. As accusations against Goldberg go, “naïve” is pretty flattering, and I do think it may be more apt than “cynical.” I’ve long felt that most ulterior motives are subconscious, and Goldberg seems to be a case in point. Back in 2002, when he was vociferously arguing for an invasion of Iraq, he just wanted to believe that his Kurdish sources were giving him solid evidence of Saddam Hussein’s links to Al Qaeda — notwithstanding the fact that they, as fellow invasion advocates, had an interest in fabricating evidence. Now Goldberg again seems eager to accept the testimony of people whose testimony is obviously suspect.
In any event, his article shouldn’t distract Americans from the real question: Given that the United States would almost certainly be drawn into war with Iran in the wake of an Israeli strike, and given that America would be blamed for the strike whether or not it had green-lighted it, and given the many ways this would be bad for national security, how can American leaders keep it from happening?
Here, at least, Goldberg has performed a service. His article, read closely, suggests that even from Israel’s point of view, there’s no sound rationale for bombing Iran, especially when you consider the long-term downside: an attack would radically dim what prospects there are for lasting peace in the Middle East; Israel’s downward spiral — in which regional hostility toward it leads to conflicts that only deepen the hostility — would be sustained big time. If appealing to America’s interests isn’t enough to keep Israel from attacking Iran, maybe appealing to Israel’s interests will help.
Postscript: If you want to read a more ringing defense of Goldberg’s journalistic integrity than I am able to mount, here is The Atlantic’s James Fallows on the subject, and here is Time’s Joe Klein.
Attack Iran? Don’t even consider it
August 03, 2010 6:00 AM
THE POINT — An already overextended military and budget means we can’t afford another war.
U.S. Rep. Ron Paul, a conservative champion of free markets and limited government, explained in 2007 how our government’s foreign policy would inevitably get us into war with Iran. Paul, of course, opposes interventionist wars.
As a nation, we can hope the wise physician was wrong. More and more, he looks like a prophet.
Newspapers throughout the country recently carried an Associated Press story about an interview CNN conducted with Michael Hayden, former head of the CIA under president George W. Bush. Hayden said a U.S.-led attack on Iran was low priority during his tenure. Today, said the AP story, Hayden believes war with Iran is “inexorable.”
A spokesperson for Hayden later said the statement was misrepresented; Hayden meant Iran’s completion of a nuclear program, not war with Iran, seems inexorable. Either way, considering U.S. policy regarding the Middle East, an intervention in Iran seems likely. As Paul said in 2007: “I think if our policies don’t change it’s about as inevitable as you can expect because we’re unwilling to talk to them and every week we’re passing more sanctions and rules and intimidations and accusations and provocations…. The American people don’t know how we have been involved since 1953 in interfering with their government and it has hurt us.”
Hayden predicts Iran will build its nuclear program to the point where it’s just below having weapons. That would destabilize the region, he said. Considering the fact U.S. foreign policy is first and foremost obsessed with more stability in the Middle East, not less, it’s hard to imagine President Barack Obama, Secretary of State Hillary Rodham Clinton, the Department of Defense and our allies will resist the urge to use force. U.S. officials have said as much, assuring the world that military action remains on the table if sanctions continue failing to deter Iran — which they will.
So the writing is on the wall. Iran continues advancing a nuclear program the United States will not tolerate and our foreign policy has become no less interventionist under Obama and Clinton.
Let’s hope our nation’s leaders will let facts stand in their way. Here are the facts:
1. We cannot afford another war because we are far beyond broke, buried under debt;
2. Iran would be a more difficult foe than Afghanistan or Iraq;
3. The wars we’re fighting have crippled our economy and taken the lives of American men and women for little in return;
4. A nation cannot prosper while remaining in a perpetual state of war because death and destruction, while sometimes essential for a nation’s survival, do not produce wealth. The list could go on.
Iran will have nuclear capacity and we must accept that fact. Fortunately, the United States, Israel and other U.S. allies are capable of deterring aggression with threats of retaliation so forceful it’s unthinkable. We cannot afford to impose our agenda on every rogue nation that develops nuclear power. If we do, we will destroy ourselves Soviet style. We will fritter time, energy and wealth on interventionist adventures. Attack Iran preemptively? No way.
In a truly alarming development, Saudi Arabia is gearing up for all-out crude oil war in the Middle East.
