Summary: One of the world’s great energy experts reports on the view from a energy conference in Qatar. Oil is the fountain of their prosperity, and they well understand how brief the Age of Oil will be.
Reflections by Robert Hirsch on the Conference “Peak Oil: Challenges and Opportunities for the GCC Countries”.
Held at Doha, Qatar on 2-4 April 2013.
Posted with his generous permission.
I was fortunate to be among the few westerners invited to attend and speak at this first-of-its kind “peak oil” (PO) conference in a Middle East. The fact that a major Middle East oil exporter would hold such a conference on what has long been a verboten subject was quite remarkable and a dramatic change from decades of PO denial. The two and a half day meeting was well attended by people from the GCC as well as other regional countries.
The going-in assumption was that “peak oil” will occur in the near future. The timing of the impending onset of world oil decline was not an issue at the conference, rather the main focus was what the GCC countries should do soon to ensure a prosperous, long-term future. To many of us who have long suffered the vociferous denial of PO by Gulf Cooperation Council (GCC) and OPEC countries, this conference represented a major change. In the words of Kjell Aleklett (Professor of Physics at Uppsala University, Sweden), who summarized highlights of the conference, the meeting was “an historic event.”
While many PO aficionados have been focused on the impacts and the mitigation of “peak oil” in the importing countries, most attendees at this conference were concerned with the impact that finite oil and gas reserves will have on the long-term future of their own exporting countries. They see the depletion of their large-but-limited reserves as affording their countries a period of time in which they either develop their countries into sustainable entities able to continue into the long term future or they lapse back into the poor, nomadic circumstances that existed prior to the discovery of oil/gas. Accordingly, much of the conference focus was on how the GCC countries might use their current and near-term largesse to build sustainable economic and government futures.
A flavor of the conference can be gotten from the following loosely translated, random quotations:
Summary: The people in Europe’s periphery suffer from a lack of alternatives. This locks them into two ugly choices: suffer years of austerity (with no end in sight), or futile (perhaps nihilistic) protests. In fact, the West as a whole has a lack of alternatives. Here we discuss that problem, and possible solutions.
- The importance of alternatives
- We yearn from change. And we get…
- What comes next?
- For More Information
(1) The importance of alternatives
“There is no alternative.
Either society has laws, or it has not. If it has not, there can be no order, no certainty, no system in its phenomena. If it has, then are they like the other laws of the universe-sure, inflexible, ever active, and having no exceptions.”
— Herbert Spencer’s Social Statics (1851) — He laid the foundations for modern conservatism. He also coined the phrase “survival of the fittest” in 1864.
“Because there really is no alternative.”
— Catch phrase of the late UK Prime Minister Margaret Thatcher, about the necessity to adopt conservative and neoliberal economic measures for the maintenance of capitalism.
Social evolution runs far faster than Darwinian evolution because its teleological. When people have a vision of a better society, sometimes they are willing to risk large rapid changes to achieve it. But this requires an alternative that looks better than what they have, attainable, and practical. Otherwise political progress either runs slowly, or stagnates entirely. For example, monarchies worked poorly Europe during the millennium in which they were the dominant political form. There were alternatives (eg, the Republic of Venice, the Swiss Confederacy), but these were not considered realistic by a sufficiently large combination of the elites and masses. Various belief structures precluded experimentation with other forms of politics.
- A belief that society was an organic whole like the body, with differentiated organs (as described in Shakespeare’s Coriolanus 1. 95-156).
- The commandment in Romans 13 to unconditionally obey rulers.
- The divine right of Kings
The potential for overthrow of these regimes came with the long strain of philosophical work beginning with Machiavelli’s The Prince and Thomas Hobbes’ Leviathan (see Wikipedia) in 1651. Once the first regime fell in 1783, the evolutionary process accelerated with fantastic speed — with most monarchies replaced in the following 140 years.
The development of Marxism (and its successors) accelerated the pace of social evolution again, so that the conflict among different social forms bathed the 20 century in blood on a scale seldom seen in history. The result gave a clear winner: various combinations of free-market capitalism and representative democracy (each having a wide range of forms). Various rear-guard retreats are still fought with some intensity, such as by evangelical Christians and Salafist Moslems — but their difficulty coping with modernity gives them low odds of gaining power.
But what happens as the contradictions and flaws accumulate in free market republics? In what direction does the arrow of evolution point? What political model motivates and directs social reform?
(2) We yearn from change. And we get…
Summary: The fate of Europe depends on many factors, not least on the support of the people in Europe’s periphery for the European Union. Today we have an excerpt from Truth & Beauty that gives an accurate picture of conditions in this pivotal region, with a comparison to Russia’s time of troubles.
This is a follow-up to Social unrest coming to Europe? If not, why not?, 21 March 20013.
- A missing element in our world
- Down and Out In Madrid & Lombardia
- About Truth & Beauty
- About the author
- For More Information about Russia
(1) A missing element in our world
As the long economic crisis continues — with stability maintained in the developed nations only through unsustainable levels of fiscal and monetary stimulus – one barrier to change becomes ever more obvious: the lack of alternative ideas for organizing the political and economic machinery of society. That is, finding new modes of social organization that are attractive to some combination of the our elites and the mass public.
Without new alternatives we might remain locked in a crisis with no exit. Our only hope lies with the eventual success of conventional economic policies — and the political apparatus that implements them. Or the ability of our societies to recover (ie, heal themselves), eventually.
To illustrate the abyss into which this has plunged the worst affected nations, today we have an excerpt from “A Hard Rain (’s a Gonna Fall)“, the April 5 issue of Truth & Beauty, by Eric Kraus and Alexander Teddy. They shine the clear light of common sense on the world, cutting through the fog of misinformation emitted by the western news media. This is reprinted with their generous permission.
(2) Excerpt from T&BL “Down and Out – In Madrid and Lombardia”
T&B has been on the road in Southern Europe. We find nothing remotely encouraging to say – this year, not even the weather was significantly better than Moscow – and the employment situation far, far worse. If the situation were not so grim, there would be something funny about the governments of a continent in deep recession (or depression, in its South/ Western corner) lecturing Russia – with its slow–but positive growth and 5% unemployment – about the virtues of a liberal economic policy.
Perhaps surprisingly, nowhere in Europe is the popular mood one of rebellion or of any longing for a violent overthrow of the existing order – there is no Marxist revolution anywhere on the horizon; rather, one senses a quiet despair, escapism and cynical pessimism. Unemployment is endemic and systematic, in Spain and Portugal the unemployed do not even hope to find a job. People find ways to cope – the welfare state, the informal economy and family structures provide some support – but in terms of building a career, family and future, the prospects are grim.
Summary: The news media focuses on the month-to-month changes in the jobs report, which consist mostly of noise. Strong months confirm the optimists; weak months confirm the pessimists. The trend of growth remains the real story, with the US economy near stall speed — supported only (like the other developed nations) by massive multi-year fiscal and monetary stimulus. Slow growth bought at great cost. A cost we cannot long continue to pay, borrowing and squandering the money ($ which instead could be rebuilding America). Just like Japan since 1989.
- About the recovery
- Household survey
- Establishment survey
- Other important metrics
- For more information about US economy
Here we examine the March employment report from the Bureau of Labor Statistics. They conduct two surveys: one of households, one of businesses. They are not directly comparable, each giving different perspectives on the US economy. This report paints a picture consistent with the many other streams of information about the economy: slow growth. Slowing slow growth, as shown by this from ECRI:
(2) About the recovery
To understand the jobs report one must first understand the recovery of which it is one aspect: during this period the government’s public debt increased $1.1 trillion — 6.8% of GDP (see debt here and GDP here), one of the higher fiscal deficits in the world. Our shiny recovery results from massive borrowing and spending.
In other words, organic growth has not yet resumed. The US economy has stabilized and slowly improves only due to the massive “drugs” of monetary and fiscal stimulus (the former boosted with QE3 as the latter winds down). Both have severe side-effects, which at some unknown point in the future will become problematic or untenable. But the worst side effect was unexpected: the stimulus eliminated pressure for reform. We have had the New Deal stimulus without the New Deal reforms (some of which failed, but the others laid the foundation for the great post-war boom).
(3) The Household survey
The Current Population survey is a simple survey of households, with large error bars but no revisions. It’s worth watching because it’s the basis for the headline unemployment rate, it gives some useful data not in the more-accurate business (establishment) survey, and because some research suggests that the household report shows inflection points before the establishment survey.
Here are the numbers, in thousands, not seasonally adjusted. Note that 1/3 of the new jobs during the past year are part-time jobs.
Summary: Our military and national security gurus love crises for like that now in Korea. As does the news media, which overflows with fear-mongering laced with war-mongering. Both feed modern America’s defining characteristic: bellicose insecurity. Here we review some general lessons from history, and point to some sources of reliable information and analysis about North Korea.
What do we do about a problem like Kim Jong Un? A crazy guy with a massive army, nukes, and rockets oh my?
- Hints from history
- An expert’s analysis
- For More Information
- A lesson from Oz
(1) Hints from history
The US military has taken a wide range of prudent steps — complacency is a big danger with respect to these kind of threats. But that doesn’t mean the hysteria that dominates much of the news media is appropriate, except as a useful tool of social control to keep US citizens in a fearful, hence subservient, frame of mind. While defensive actions should be — and have been — taken, history gives us a few tips about what’s likely to happen.
(a) Small nations run by tyrants seldom take bold actions that risk destruction of the regime. As Mel Brooks said, it’s good to be the king!
(b) Bold actions are more often taken by small nations with support of powerful allies. Examples are Serbia vs. Austria 1914, North Korea 1950, North Vietnam, perhaps even Iraq 1990 (if Saddam though he had tacit approval of the US).
(c) Bold actions are most often taken by powerful nations. The Confederacy firing on Ft Sumter in 1861. Germany in 1870, 1914, 1939. The many US strikes in Latin America and Russia in Eastern Europe.
(d) Nations taking bold risks usually seek tactical surprise. Like most of the wars between Arab nations vs Israel: Israel attacking in 1967, and the Arabs attacking in 1973 on Yom Kipur. If you plan to bite, don’t alter the foe by barking.
(e) Despite their reputation, tyrants seldom have secure internal foundations — hence their love of foreign distractions, and reluctance to incur the stress of war.
(f) But sometimes situations spin out of control. Sometimes wars result.
(2) An expert’s analysis
Excerpts from two articles by Steven Haggard, Prof International Relations, UC San Diego.
(a) “Kim Jong Un is not crazy“, CNN, 2 April 2013: