No. 160 - August 2005 by Richard Heinberg

How to Avoid Oil Wars, Terrorism, and Economic Collapse

By now most well-informed people are aware that global oil production may soon reach its all-time peak, and that the consequences will likely be severe.

Already many important oil-producing nations (such as the United States, Indonesia, and Iran) and some whole regions (such as the North Sea) are past their production maximums. With nearly every passing year another country reaches a production plateau or begins its terminal decline.

Meanwhile global rates of oil discovery have been falling since the early 1960s, as has been confirmed by ExxonMobil. All of the 100 or so supergiant fields that are collectively responsible for about half of current world production were discovered in the 1940s, '50s, '60s, and '70s. No fields of comparable size have been found since then; instead, exploration during recent years has turned up only much smaller fields that deplete relatively quickly. The result is that today only one new barrel of oil is being discovered for every four that are extracted and used.

World leaders are hampered in their ability to assess the situation by a lack of consistent data. Proven petroleum reserve figures look reassuring: the world has roughly a trillion barrels yet to produce, perhaps more; indeed, official reserves figures have never been higher. However, circumstantial evidence suggests that some of the largest producing nations have inflated their reserves figures for political reasons. Meanwhile oil companies routinely (and legitimately) report reserve growth for fields discovered decades ago. In addition, reserves figures are often muddied by the inclusion of non-conventional petroleum resources, such oil sands - which do need to be taken into account, but in a separate category, as their rates of extraction are limited by factors different from those that constrain the production of conventional crude. As a consequence of all of these practices, oil reserves data tend to give an impression of expansion and plenty, while discovery and depletion data do the opposite.

This apparent conflict in the data invites dispute among experts as to when the global oil peak is likely to occur. Some analysts say that the world is virtually at its peak of production now; others contend that the event can be delayed for two decades or more through enhanced investment in exploration, the adoption of new extraction technologies, and the substitution of non-conventional petroleum sources (oil sands, natural gas condensates, and heavy oil) for conventional crude.

However, there is little or no disagreement that a series of production peaks is now within sight - first, for conventional non-OPEC oil; then for conventional oil globally; and finally for all global conventional and non-conventional petroleum sources combined.

Moreover, even though there may be dispute as to the timing of these events, it is becoming widely acknowledged that the world peak in all combined petroleum sources will have significant global economic consequences. Mitigation efforts will require many years of work and trillions of dollars in investment. Even if optimistic forecasts of the timing of the global production peak turn out to be accurate, the world is facing an historic change that is unprecedented in scope and depth of impact.

Due to systemic dependence on oil for transportation, agriculture, and the production of plastics and chemicals, every sector of every society will be affected. Efforts will be needed to create alternative sources of energy, to reduce demand for oil through heightened energy efficiency, and to redesign entire systems (including cities) to operate with less petroleum.

These efforts will be challenging enough in the context of a stable economic environment. However, if prices for oil become extremely volatile, mitigation programs could be undermined. While high but stable prices would encourage conservation and investment in alternatives, prices that repeatedly skyrocket and then plummet could devastate entire economies and discourage long-term investment. Actual shortages of oil - of which price shocks would be only a symptom - would be even more devastating. The worst impacts would be suffered by those nations, and those aspects of national economies, that could not obtain oil at any price affordable to them. Supply interruptions would likely occur with greater frequency and for increasing lengths of time as global oil production gradually waned.

Efforts to plan a long-term energy transition would be frustrated, in both importing and exporting countries. Meanwhile the perception among importers that exporting nations were profiteering would foment animosities and an escalating likelihood of international conflict.

In short, the global peak in oil production is likely to lead to economic chaos and extreme geopolitical tensions, raising the spectres of war, revolution, terrorism, and even famine, unless nations adopt some method of cooperatively reducing their reliance on oil.

A Plan for Global Powerdown

The Oil Depletion Protocol provides a way forward (the text appears at the end of this article). It was drafted by the Association for the Study of Peak Oil; however, the source of the document is of little importance - only its substance is of interest. While it is merely a suggested outline and will require fleshing out and detailed negotiation, the Protocol is inherently simple. As will be clear from the Discussion below, it would be unnecessary for all nations to ratify the Protocol in order for it to have a beneficial effect; if even one nation adopts it, that nation will be benefited. However, if a substantial number of nations sign on this will create a platform for international economic stability and cooperation.

The Protocol will be presented at several important international conferences attended by world leaders in late 2005. Efforts will also be made to publicize and communicate it to the general public. It is hoped that a few courageous politicians in each country will understand its importance and bring it before their governing bodies for consideration and adoption.

How Would It Work?

The idea of the Protocol is inherently straightforward: oil importing nations would agree to reduce their imports by an agreed-upon yearly percentage (the World Oil Depletion Rate), while exporting countries would agree to reduce their rate of exports by their national Depletion Rate.

The concept of the Depletion Rate is perhaps the most challenging technical aspect of the Protocol, yet even it is easy to grasp given a little thought. Clearly, each country has a finite endowment of oil from nature; thus, when the first barrel has been extracted, there is accordingly one less left for the future. What is left for the future consists of two elements: first, how much remains in known oilfields, termed Remaining Reserves; and second, how much remains to be found in the future (termed Yet-to-Find). How much is Yet-to-Find may be reasonably estimated by extrapolating the discovery trend of the past. The Depletion Rate equals the total yet-to-produce divided by the yearly amount currently being extracted.

Let us explore a few examples:

Norway is a country that reports exceptionally accurate reserve estimates. The total produced to-date is 18.5 billion barrels (Gb), and 11.3 Gb remain in known fields, with about 2 left to find, giving a rounded total of 32 Gb. It follows that 13.5 Gb are left to produce. In 2004, 1.07 Gb were extracted, giving a Depletion Rate of 7.4 percent (1.07/13.5). This is a comparatively high rate, typical of an offshore environment.

In the case of the US (considering only the lower 48 states and excluding deepwater), the corresponding numbers are: produced to-date, 173 Gb; Remaining Reserves, 24 Gb; Yet-to-Find, 2 Gb - meaning that there are 27 Gb left. Annual production in 2004 was 1.3 Gb, giving a Depletion Rate of 4.6 percent (1.3/27).

For the world as a whole, 944 Gb have been produced; 772 remain in known fields; and an estimated 134 Gb is Yet-to-Find, meaning that 906 Gb are left. Production of conventional oil in 2004 was 24 Gb, so the Depletion Rate is 2.59 percent (24/906).

These estimates exclude non-conventional oil - oil shales, bitumen (oil sands), extra-heavy oil, heavy oil, deepwater oil, polar oil, and liquids from gasfield plants. Most oil produced to date has been of the conventional variety, which will dominate all supply far into the future, so it makes sense to concentrate on this category.

It must be stressed that current Reserves estimates in the public domain are grossly unreliable, and one of the purposes of the Protocol is to secure better information. The assessed Depletion Rate for each country, and eventually for the World as whole, is subject to revision when better information becomes available, but the resulting correction of the Depletion Rate will not be large, probably causing it to vary by less than one percent.

The Depletion Protocol would require importers to reduce their imports by the World Depletion Rate (i.e., 2.5 percent) each year in order to put demand into balance with world supply. As stated earlier, exporters would reduce their production according to their national Depletion Rate. Thus Norway would reduce its production by 7.4 percent each year (that country's production is already declining at an even higher rate).

The imposition on the producing countries represents no great burden, since few can now increase their rate of production in any case, and many are experiencing declining production for purely geological reasons, as is the case with Norway and the US. Agreeing to produce less oil would not inhibit exploration because new finds would lower the national Depletion Rate, and thus permit a higher rate of export than would otherwise be the case. The main thrust of the Protocol would be to require importers to cut imports, but the inclusion of producers in the provisions would stimulate greater cooperation between the two factions. Any indigenous production in a country that was a net importer would not be likely to provide that country with an unfair advantage, as production within most importing countries is already declining at a rate higher than the World Depletion Rate.

How importers dealt internally with the import restriction would be up to them (though strategies both to obtain supplies of alternative fuels and to reduce demand for oil would doubtless be required). Some might wish to introduce an energy allowance as a form of tradable ration (as will be discussed in more detail below).

Discussion of the Protocol

Questions and Possible Objections

The Protocol may at first look like merely a good idea with no real chance of implementation. However, closer inspection suggests that its implementation will benefit nearly all important global stakeholders and that objections likely to be raised to it are easily countered.

What if forecasts of a near-term peak in global oil production are wrong? Won't there be a cost to preparing for the oil peak too early? In practical terms, won't this mean voluntarily choking off economic growth?

Because so much is at stake, it is important that these vital questions be addressed not just by partisan participants in the debate over the timing of the oil-production peak (the so-called "oil optimists" and the "oil pessimists"); some independent assessment is required of the costs of preparing too soon versus the costs of preparing too late.

Fortunately, such an assessment has already been undertaken - "Peaking of World Oil Production: Impacts, Mitigation, & Risk Management," a Report prepared by Science Applications International Corporation (SAIC) for the US Department of Energy, released in February 2005, and authored principally by Robert L. Hirsch (hereinafter referred to as "the SAIC Report").

The SAIC Report concludes that substantial mitigation of the economic, social, and political impacts of Peak Oil can come only from efforts both to increase energy supplies from alternative sources and to reduce demand for oil. With regard to the claim that efficiency measures will be enough to forestall dire impacts, Hirsch et al. note that, "While greater end-use efficiency is essential, increased efficiency alone will be neither sufficient nor timely enough to solve the problem. Production of large amounts of substitute liquid fuels will be required." Further, "Mitigation will require a minimum of a decade of intense, expensive effort, because the scale of liquid fuels mitigation is inherently extremely large." Hirsch, et al., also point out that "The problems associated with world oil production peaking will not be temporary, and past 'energy crisis' experience will provide relatively little guidance."

The SAIC Report agrees that mitigation efforts undertaken too soon would exact a cost on society. However, it concludes that, "If peaking is imminent, failure to initiate timely mitigation could be extremely damaging. Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive than delayed mitigation."

What if the pessimists are right and the world is at its peak of oil production now? In that case, is it too late to implement the Depletion Protocol?

If the world reaches the peak of production within the next two years there will be too little time to undertake major mitigation efforts prior to the event, and therefore there are likely to be severe economic, social, and political impacts, as outlined in the SAIC Report.

However, in that case the need for the Protocol should quickly and widely become apparent. While all nations will suffer from higher prices and shortages, only a cooperative system of national and international quotas will avert the even more extreme economic and geopolitical crises that would otherwise ensue.

Why can't the market take care of the problem? Won't high prices stimulate more exploration and the development of alternatives? Wouldn't interference with market mechanisms be harmful?

The SAIC Report's authors dismiss the claim that the market will solve any shortage problems arising from global oil production peak, with higher oil prices stimulating investments in alternative energy sources, more efficient cars, and so on. Price signals warn only of immediate scarcity. However, the mitigation efforts needed in order to prepare for the global oil production peak and thus to head off shortages and price spikes must be undertaken many years in advance of the event. Hirsch, et al., maintain that, "Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. The experiences of the 1970s and 1980s offer important guides as to government actions that are desirable and those that are undesirable, but the process will not be easy."

Historically, oil production has often been managed by governments or by cartels. In petroleum's early days, free-market boom-and-bust cycles bankrupted many players (including the "father" of the oil industry, Edwin Drake). Soon John D. Rockefeller brought a certain order to the situation through the creation of the Standard Oil Trust (in doing so he squeezed out many competitors and personally profited to an extraordinary degree). This regime came to an end in 1911, when the US Government broke up Standard Oil after prosecution for violation of anti-trust laws. Starting in the 1930s, with the US in position to control global oil prices, the Texas Railroad Commission capped production levels in order to stabilize the market. After US oil production peaked in 1971 and that nation lost its ability to control global prices, petroleum's center of gravity shifted to the Middle East, and OPEC began mandating production quotas for its members in order to keep prices within a desirable band.

While the management of oil prices globally thus has precedents, the situation in the future will be fundamentally different than heretofore, in that previously the problem was too much oil and collapsing prices that offered little incentive for exploration. The situation the world will soon face is that of insufficient supply leading to extreme price shocks, price volatility, and acute shortages. Thus a new kind of management scheme will be required.

How will adoption of the Protocol affect importers and exporters differently?

Importers: No one doubts that industrial nations will find it difficult to sustain economic growth while using less oil on a yearly basis. Thus the voluntary adoption of the Protocol by importers would seem disadvantageous - a "tough sell."

However, it must be recognized that a decline in the availability of oil is inevitable in any case; only the timing of the onset of decline is uncertain. Without a structured agreement in place to limit imports, nations will be inclined to put off preparations for the energy transition until prices soar, at which time such a transition will become far more difficult because of the ensuing chaotic economic conditions. With the Protocol in place, importers will be able to count on stable prices and can then more easily undertake the difficult but necessary process of planning for a future with less oil.

Poor importing countries may object that by using less petroleum they will have to forego conventional economic development. However, further development that is based on the use of petroleum will merely create structural dependency on a depleting resource. Without the Protocol, these nations will be financially bled by high and volatile prices. With the Protocol in place and with prices stabilized, these nations will be able to afford to import the oil they absolutely need; meanwhile they will have every incentive to develop their economies in a way that is not petroleum-dependent.

Exporters: Economies that are based primarily on income from the extraction and export of natural resources often tend to give rise to governments that are more responsive to the interests of powerful foreign resource buyers than they are to the needs of their own citizens. Thus it is in the interest of resource-exporting countries to develop indigenous industries in order to diversify their economies.

Countries that depend primarily on income from oil exports will need to wean themselves from this dependence eventually in any case, as their oilfields are depleted; the Protocol provides them a means of making the transition in a way that will allow for long-term planning.

Without the Protocol, smaller exporting nations will likely be at the mercy of militarily powerful importers. The Protocol will provide a means of minimizing external political interference in these nations' affairs. As a result, much international tension and conflict, including the threat of terrorism, can be minimized - which will be a help also to the wealthy importers.

How will the oil companies be affected?

Without the Protocol, the oil companies may enjoy record revenues - for a time. But they will be demonized for profiting from the misery of the rest of society; meanwhile, they will be hampered in their operations by the destabilization of national economies resulting from wildly gyrating oil prices. As noted earlier, the Standard Oil Trust, the Texas Railroad Commission, and OPEC all provided production-rationing mechanisms that brought order out of what would otherwise have been chaotic situations. The oil companies (sometimes reluctantly) accepted these mechanisms, recognizing that a stable economic environment was more important to them in the long run than the opportunity to make momentary windfall profits.

With the Protocol, the oil companies will remain profitable, they will have the incentive to undertake further exploration, and they will be able to plan for decades ahead. They will also be motivated to become more generalized energy companies (rather than remaining merely oil companies) and thus to invest in the development of alternative energy sources.

There is already evidence that the oil companies are concerned about a public backlash as gasoline prices soar: ChevronTexaco has initiated an expensive public-relations campaign titled "Will You Join Us?", featuring a web site (www.willyoujoinus.com) and expensive newspaper ads informing readers that "the era of easy oil is over" and asking for public discussion on the issue. The Oil Depletion Protocol will provide more long-term security for the petroleum industry than any PR campaign ever could, and at no cost.

Won't both importers and exporters be tempted to cheat? How would the Protocol be enforced?

The Protocol will require a system for monitoring production, exports, and imports - which cannot be hidden to a large degree in any case. Enforcement will require the establishment of a Secretariat for adjudication of disputes and claims, and a system of economic penalties to be negotiated by the agreeing nations.

How can nations adjust internally to having less oil?

Withdrawal from oil dependency will be an immense challenge that will require cooperation and compromise on everyone's part. Efforts will be needed both to create supplies of alternative fuels and to reduce the demand for oil.

The latter task will be much easier if systems are designed to make it in individuals' interest not only to reduce their own oil dependency but also to persuade others to reduce theirs. One such system for creating collective motivation and cooperation consists of Domestic Tradable Quotas, or DTQs.

DTQs can be used to ration all hydrocarbon energy sources (in order to reduce greenhouse gas emissions) or specific fuels such as oil. For the sake of discussion, let us assume the use of DTQs for petroleum only, as a way of implementing the Depletion Protocol within nations.

First, a national Petroleum Budget would be drawn up, based on the nation's indigenous production and oil imports as mandated by the Oil Depletion Protocol. A segment of the Petroleum Budget would then be issued as an unconditional entitlement to all adults and divided equally among them; the remainder would be auctioned to industry, commercial users, and government. The units could then be bought and sold, so that users unable to cope with their ration could increase it, while others who kept their fuel consumption low could sell and trade their Petro-units on the national market. All transactions would be carried out electronically, using technologies and systems already in place for direct debit systems and credit cards.

When consumers (citizens, businesses, or the government) made purchases of fuel, they would surrender their quota to the energy retailer, accessing their quota account by (for instance) using their Petro-card or direct debit. The retailer would then surrender the carbon units when buying energy from the wholesaler. Finally, the primary energy provider would surrender units back to the National Register when the company pumped or imported the oil. This closes the loop.

All purchases of petroleum would be made with Petro-units, whether the oil were used as fuel or as feedstock for plastics or chemicals. So long as the petroleum remained fuel, Petro-units would have to be passed back up the line, starting with the end user. However, if the petroleum were incorporated as feedstock into the manufacturing of a product (e.g., plastics), the manufacturer would simply add the cost of the Petro-units into the cost of the product. Thus, in the case of feedstocks, the manufacturer of goods would be the presumed end user.

Purchasers not having any Petro-units to offer at point of sale - foreign visitors, people who had forgotten their card or cashed-in all their quota as soon as they received it - would buy a quota at point of purchase, then immediately surrender it in exchange for fuel, but would pay a cost penalty for this (i.e., the bid-and-offer spread quoted by the market).

DTQs place everyone in the same boat: households, industry, and government would have to work together, facing the same Petroleum Budget, and trading on the same market for Petro-units. Everyone would have a stake in the system. All would have the sense that their own efforts at conservation were not being wasted by the energy profligacy of others, and that the system was fair.

Moreover, DTQs are guaranteed to be effective, because the only fuel that could be purchased would be fuel within the Budget. The Budget would set a long time-horizon so that people would have the motivation and information they needed to take action in the present to achieve drastic reductions in oil use over a 20-year timeframe.

What if only a few nations sign on? Won't the Protocol be ineffectual if a few large exporters or importers refuse to do so?

At first it might seem that those nations not adopting the Protocol would achieve an advantage. However, any temporary benefit would be purchased at the expense of later economic calamity. As discussed in the SAIC Report, nations that embark on the energy transition sooner will be much better off than those procrastinating.

What about natural gas and coal - should there be similar protocols for these? Might countries simply burn more coal to make up for having less oil?

The Oil Depletion Protocol will not preclude other agreements aimed at reducing fossil fuel usage in order to avoid impacts to the global climate, but it will be more ambitious in its reduction trajectory than the Kyoto Protocol or the Asia Pacific Partnership on Clean Development and Climate. If nations' experience with the Oil Depletion Protocol is positive, this will provide motivation for the forging of similar agreements covering these other fossil fuels.

How can the process of adopting the Oil Depletion Protocol begin?

A program to win implementation of the Protocol must focus on educating both the general public and top-level decision-makers.

Adoption of the Protocol will require that a few policy makers champion it and bring it before their national parliament or congress. If even one country adopts the Protocol, this will help to open a global discussion.

At the same time, it is important that citizens understand the issues and what is at stake, as pressure on elected officials from below will help focus the latter's attention on the matter.

In the near future, a program will be underway to obtain endorsements of the Protocol from prominent organizations and individuals. This article is part of a preliminary effort to inform the public of both the Peak Oil issue and the Oil Depletion Protocol. Please help by copying this article and sending it to family, friends, colleagues, the media, and elected officials. This may be our last, best opportunity to avert resource wars, terrorism, and economic collapse as we enter the second half of the Age of Oil.

THE OIL DEPLETION PROTOCOL

WHEREAS the passage of history has recorded an increasing pace of change, such that the demand for energy has grown rapidly in parallel with the world population over the past two hundred years since the Industrial Revolution;

WHEREAS the energy supply required by the population has come mainly from coal and petroleum, having been formed but rarely in the geological past, such resources being inevitably subject to depletion;

WHEREAS oil provides ninety percent of transport fuel, essential to trade, and plays a critical role in agriculture, needed to feed the expanding population;

WHEREAS oil is unevenly distributed on the Planet for well-understood geological reasons, with much being concentrated in five countries, bordering the Persian Gulf;

WHEREAS all the major productive provinces of the World have been identified with the help of advanced technology and growing geological knowledge, it being now evident that discovery reached a peak in the 1960s, despite technological progress, and a diligent search;

WHEREAS the past peak of discovery inevitably leads to a corresponding peak in production during the first decade of the 21st Century, assuming no radical decline in demand;

WHEREAS the onset of the decline of this critical resource affects all aspects of modern life, such having grave political and geopolitical implications;

WHEREAS it is expedient to plan an orderly transition to the new World environment of reduced energy supply, making early provisions to avoid the waste of energy, stimulate the entry of substitute energies, and extend the life of the remaining oil;

WHEREAS it is desirable to meet the challenges so arising in a co-operative and equitable manner, such to address related climate change concerns, economic and financial stability and the threats of conflicts for access to critical resources.

NOW IT IS PROPOSED THAT

1. A convention of nations shall be called to consider the issue with a view to agreeing an Accord with the following objectives:

1. to avoid profiteering from shortage, such that oil prices may remain in reasonable relationship with production cost;
2. to allow poor countries to afford their imports;
3. to avoid destabilising financial flows arising from excessive oil prices;
4. to encourage consumers to avoid waste;
5. to stimulate the development of alternative energies.

2. Such an Accord shall have the following outline provisions:

1. No country shall produce oil at above its current Depletion Rate, such being defined as annual production as a percentage of the estimated amount left to produce;
2. Each importing country shall reduce its imports to match the current World Depletion Rate, deducting any indigenous production.

3. Detailed provisions shall cover the definition of the several categories of oil, exemptions and qualifications, and the scientific procedures for the estimation of Depletion Rate.

4. The signatory countries shall cooperate in providing information on their reserves, allowing full technical audit, such that the Depletion Rate may be accurately determined.

5. The signatory countries shall have the right to appeal their assessed Depletion Rate in the event of changed circumstances.

(Note: the Oil Depletion Protocol has elsewhere been published as "The Rimini Protocol" and "The Uppsala Protocol." All of these documents are essentially identical.)

Sources of further information

On Oil Depletion:

• www.globalpublicmedia.com
• www.energybulletin.net
• www.peakoil.net
• www.odac-info.org

On Domestic Tradable Quotas (DTQs):

• www.dtqs.org

On the SAIC Report:

www.cge.uevora.pt/aspo2005/ abscom/Abstract_Lisbon_Hirsch.pdf
www.hilltoplancers.org/stories/hirsch0502.pdf

Richard Heinberg is the author of Powerdown - Options and Actions for a Post-Carbon World. He is a journalist, educator, editor, and lecturer, and a Core Faculty member of New College of California, where he teaches courses on "Energy and Society" and "Culture, Ecology and Sustainable Community."

If you wish to republish any of these essays or post them on a web site, please contact us for permission.

 

 

No. 163 - November 2005

by Richard Heinberg

Tools with a Life of Their Own

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Nearly everyone complains from time to time that our tools have become Sorcerer’s Apprentices; that we have come to serve our machines instead of the other way around; and that, increasingly, our lives are regimented as if we ourselves were mere gears in a vast mechanism utterly beyond our control.

We are not the first people to feel this way: criticism of technology has a history. The Luddites of early 19th-century England were among the first to raise their voices—and hammers!—against the dehumanizing effects of mechanization. As industrialization proceeded decade-by-decade—from powered looms to steam shovels, jet planes, and electric toothbrushes—objections to the accelerating, mindless adoption of new technologies waxed erudite. During the past century, books by Lewis Mumford, Jacques Ellul, Ivan Illich, Kirkpatrick Sale, Stephanie Mills, Chellis Glendinning, Jerry Mander, John Zerzan, and Derrick Jensen, among others, have helped generations of readers understand how and why our tools have come to enslave us, colonizing our minds as well as our daily routines.

These authors reminded us that tools, far from being morally neutral, are amplifiers of human purposes; therefore each tool carries its inventors’ original intent inherent within it. We can use a revolver to hammer nails, but it works better as a machine for the swift commission of mayhem; and the more handguns we have around, the more likely it is for inevitable daily personal conflicts to go ballistic. Thus, as clashes over human purposes form the core of ethical and political disputes, technology itself, as it proliferates, must inevitably become the subject of a widening array of social controversies. Battles over technology concern nothing less than the shape and future of society.

In principle, those battles—if not the scholarly discussions about them—reach all the way back to the Neolithic era, even to our harnessing of fire tens of thousands of years ago. Mumford drew a through-line emphasizing how modern megatechnologies are externalizations of a social machine that originated in the pristine states of the Bronze Age:

The inventors of nuclear bombs, space rockets, and computers are the pyramid builders of our own age: psychologically inflated by a similar myth of unqualified power, boasting through their science of their increasing omnipotence, if not omniscience, moved by obsessions and compulsions no less irrational than those of earlier absolute systems: particularly the notion that the system itself must be expanded, at whatever the eventual cost. (quoted in Questioning Technology, ed. by Zerzan and Carnes)

Zerzan goes further, asserting that it is the human tendencies to abstract and manipulate, which are at the heart of our tool-making ability, that cut us off from our innate connections with the natural world, and therefore obscure our own inherent nature.

This effort to show how our current technological crisis is rooted in ancient patterns is certainly helpful. But it is important also to keep in mind the fact that the discussion about mechanization’s collateral damage has intensified relatively recently, due to the fact that the scale of technology’s intrusion into our lives and its toll upon the environment have grown enormously in just the past two centuries.

Some techno-critics have sought to explain this recent explosion in the power and variety of our tools by tying it to developments in philosophy (Cartesian dualism) or economics (capitalism). Strangely, few of the critics have discussed at any length the role of fossil fuels in the industrial revolution. That is, they have consistently focused their attention on tools’ impacts on society and nature, and on the political conditions and ideologies that enabled their adoption, rather than on the fact that most of the new tools that have appeared during the past two centuries are of a kind previously rare—ones that derive the energy for their operation not from muscle power, but from the burning of fuels.

Mumford, one of my favorite authors, devoted only one comment on one page of his 700-page, two-volume masterpiece The Myth of the Machine, to coal, and neither “petroleum” nor “oil” appears in the index of either volume. My own 1996 book A New Covenant with Nature, which was mostly devoted to a critique of industrialism, does no better: “coal,” “oil,” and “energy” are absent from its index.

And yet it appears to me now that, in assessing technology and understanding its effects on people and nature, it is at least as important to pay attention to the energy that drives tools as to the tools themselves and the surrounding political-ideological matrix. In short, we who have been criticizing the technological society, using the methods of historical analysis, have missed at least half the story we are attempting to weave when we fail to notice the energetic evolution of tools.

This essay is a brief attempt to make up for this oversight. It will also discuss why the impending peak in global oil production will pull the plug on the kind of “progress” we have come to expect over the past two centuries, providing an historic opportunity to reshape humanity’s relations with technology and with nature.

Classy Tools

It is helpful for our purposes to have a way of classifying tools according to their energy inputs. The following four categories, outlined in my book The Party’s Over, correspond very roughly to four major watersheds in social evolution:

A. Tools that require only human energy for their manufacture and use. Examples include stone spearheads and arrowheads, grinding tools, baskets, and animal-skin clothing. These sorts of tools are found in all hunter-gatherer societies.

B. Tools that require an external power source for their manufacture, but human power for their use. Examples: all basic metal tools, such as knives, metal armor, and coins. These tools were the basis of the early agricultural civilizations centered in Mesopotamia, China, Egypt, and Rome.

C. Tools that require only human energy for their manufacture, but harness an external energy source. Examples: the wooden plow drawn by draft animals, the sailboat, the fire drill, the windmill, the water mill. The fire drill was used by hunter-gatherers, and the wooden plow and sailboat were developed in early agricultural societies; the windmill and water mill appeared at later stages of social evolution.

D. Tools that require an external energy source for their manufacture and also harness or use an external energy source. Examples: the steel plow, the gun, the steam engine, the internal combustion engine, the jet engine, the nuclear reactor, the hydroelectric turbine, the photovoltaic panel, the wind turbine, and all electrical devices. These tools and tool systems are the foundation of modern industrial societies—in fact, they define them.

For thousands of years, human beings have engaged in a constant struggle to harness extrasomatic energy (that is, energy sources outside the human body). Until recently, such energy came mostly from the capture of work performed by animal muscles. In the US, as recently as 1850, domesticated animals—horses, oxen, and mules—were responsible for about 65 percent of the physical work supporting economy; today the percentage is negligible: virtually all work is done by fuel-fed machines. Slavery was a strategy for capturing human muscle power, and the end of most overt slavery during the 19th century was more or less inevitable when Class D tools became cheaper to own and keep than human slaves—or domesticated animals, for that matter.

In early civilizations, agricultural workers sought to capture a surplus of solar energy on a yearly basis by plowing and reaping. It always takes energy to get energy (it takes effort to sow seeds, build a windmill, or drill an oil well). For agricultural societies, the net-energy profit was always moderate and sometimes nonexistent (hence recurrent famines): in most cases about 90 percent of the population had to work at farming in order to provide enough of a surplus so as to support the rest of the social edifice—including the warrior, priestly, and administrative classes. The extraction of coal, and especially of oil and natural gas—substances representing millions of years of accumulation of past biotic energy—has often provided a spectacular net-energy profit, sometimes on the order of 50 to 100 units obtained for every one invested. As a result, with fossil fuels and modern machinery, only two percent of the population need to farm in order to support the rest of society, enabling the flourishing of a growing middle class composed of a dizzying array of specialists.

Increasing specialization was also enabled by a flourishing of differing types of machines, and that differentiation was itself in turn fueled (quite literally) by the availability of cheap energy to make them go. Labor productivity increased relentlessly, not because people worked longer or harder, but because they had access to an increasing array of powerful extrasomatically powered tools.

The availability of Class D tools produced excitement and wonder—initially among the few people wealthy enough to own them, and also among the crafty and highly motivated inventors available for hire. These were tools that were, in a sense, alive: they consumed a kind of food, in the form of coal or oil (indirectly so in the case of electrical power), and had their own internal metabolism. Gradually, as mechanized production showed itself capable of producing more goods and gadgets than could possibly be soaked up by the wealthy elites, the latter devised the strategy of creating a consumer society in which anyone could own labor-saving machinery. The rank and file was soon persuaded of the dream of eliminating drudgery. And, due to the scale of the energies being unleashed, the fulfillment of that dream seemed well within reach.

That scale is difficult to comprehend without using familiar examples. Think for a moment of the effort required to push—for only a few feet—an automobile that has run out of gas. Now imagine pushing it twenty miles. This is, of course, the service provided by a single gallon of gasoline, and it represents the energy equivalent of at least a month of human labor (much more than this by some accounts). The amount of gasoline, diesel, and kerosene fuels used in the US in one day has roughly the energy equivalence of 20,000,000 person/years of work. If the building of the Great Pyramid required 10,000 people working for 20 years, then the petroleum-based energy used in the US on an average day could—in principle, given the necessary stone and machinery—build over 100 Great Pyramids. Of course, we don’t use our oil for this purpose: instead we use it mostly to push millions of heavy metal cars along roadways so that we can get to and from jobs, restaurants, and video rental stores.

With computers and cybernetics, we managed to create tools with not just a life, but a mind of their own. Now our tools not only “breathe,” “eat,” and do physical work; they also “think.” Increasingly we find ourselves in synthetic, self-regulating (if not yet self-replicating) environments—shopping malls, airports, office buildings—in which non-human multi-celled biota are present only as ornaments; in which human work consists only of doing the few tasks for which we have not yet succeeded in inventing profitable automatic surrogates. The wonder of seeing drudgery eliminated is accompanied by the nuisance of being managed and bossed about by machines, and of being rendered helpless by mechanical failures or—horror of horrors—power outages.

What does it take to do all of this? It takes 84 million barrels of oil per day globally, as well as millions of tons of coal and billions of cubic feet of natural gas. The supply network for these fuels is globe-spanning and awesome. Yet, from the standpoint of the end user, this network is practically invisible and easily taken for granted. We flip the switch, pump the gas, or turn up the thermostat with hardly a thought to the processes of extraction we draw upon, or the environmental horrors entailed.

The machines themselves have become so sophisticated, their services so seductive, that they are equivalent to magic. Few people fully understand the inner workings of any modern Class D tool, and different tools require their own unique teams of specialists for their design and repair. But what is more important, in the process of becoming dependent upon them, we have become almost a different species from our recent ancestors.

Infrastructure Matters

To understand how we have become so different, how different we have become, and also how the end of cheap extrasomatic energy is likely to impact us and the society in which we are embedded, it is helpful to draw a lesson from cultural anthropology.

Comparative studies of human societies have consistently shown that the latter are best classified on the basis of their members’ means of obtaining food. Thus we commonly speak of hunting-and-gathering societies, horticultural societies, agricultural societies, fishing societies, herding societies, and industrial societies. The point is, if you know how people get their food, you will reliably be able to predict most of the rest of their social forms—their decision-making and child-rearing customs, spiritual practices, and so on.

Of course, from a biological point of view, food is energy. And so what we are saying is that understanding energy sources is essential to understanding human societies.

Anthropologist Marvin Harris identified three basic elements present in every human society:

· infrastructure (which consists of the means of obtaining and processing necessary energy and materials from nature—i.e., the means of production);

· structure (which consists of human-to-human decision-making and resource-allocating activities), and

· superstructure (consisting of the ideas, rituals, ethics, and myths that serve to explain the universe and coordinate human behavior).

Change at any of these levels can affect the others: the emergence of a new religion or a political revolution, for example, can change people’s lives in real, significant ways. However, the fact that so many cultural forms seem consistently to cluster around ways of obtaining food suggests that fundamental cultural change occurs at the infrastructural level: if people switch, for example, from hunting to planting, or from planting to herding, their politics and spirituality are bound to shift as well, and probably in profound ways.

The industrial revolution represented one of history’s basic infrastructural shifts; everything about human society changed as a result. This revolution did not come about primarily because of religious or political developments, but because a few prior inventions (steel, gears, and a primitive steam engine—i.e., Class B and C and simple Class D tools) came together in the presence of an abundant new energy source: fossil fuels—first coal, then oil and natural gas. Ideas (such as Cartesian dualism, capitalism, Calvinism, and Marxism), rather than driving the transformation, achieved prominence because they served useful functions within a flow of events emanating from infrastructural necessity.

What Hath Hydrocarbon Wrought?

What have been the structural and superstructural impacts of industrialism?

Because only a reduced portion of the population is required to work the land (now with tractors and harvesters rather than oxen) in order to produce food-energy, a large majority of the populace has lost direct connection with the land and with the cycles of nature. If hunters get their food-energy from hunting, we get ours from shopping at the supermarket.

The ensuing proliferation, at first of factory work, and later of specialized occupations, has led to the development of universal compulsory public education and the idea of the “job”—a notion that most people today take for granted, but that seems strange, demeaning, and confining to people in non-industrial cultures.

With the expansion of the educated middle class, simple monarchial forms of government soon ceased to be defensible. By the latter part of the 18th century, a trend was well established, within industrial nations, of revolution and the widespread and growing expectation of democratic participation in governance—though of course that expectation was quickly hijacked by the nouveau mercantile elites. Somewhat later, the economic exploitation of labor that typified both previous agricultural civilizations and the new industrial states also became the target of revolution; once again, the effect of revolution was primarily merely to rearrange deck chairs: people’s actual daily work and psychic life were still being shaped by machines, and, at a deeper level, the energy sources that propelled them.

We must remember that industrialism followed on the heels of the European takeover of the resources and labor of most of the rest of the world during centuries of conquest and colonialism. Thus the experience and expectation of economic growth had already insinuated themselves into the minds of members of the European merchant class before industrialism took hold. After the commencement of the fuel revolution, with vastly more energy available per capita, economic activity achieved seemingly perpetual logarithmic growth, and economic theories emerged not only to explain this growth in terms of “markets,” but to affirm that now, because of markets, growth was necessary, inevitable, and unending: world without end, amen. Fractional-reserve banking, based on the wonder of compound interest, served as the financial embodiment of these new expectations. In effect, within the minds of society’s managers and policy makers, faith in technology and markets supplanted previous religious faith in the hallucinated agricultural and herding deities that had presided over Western civilization for the previous couple of millennia.

In the early 20th century, as mechanized production mushroomed to swamp existing demand—among people who mostly still lived rurally and fairly self-sufficiently—for manufactured products, elites began experimenting with mass propaganda in the form of advertising and public relations. Later, television would dramatically increase the effectiveness of these efforts, which amounted to nothing less than the regimentation of the human imagination according to the demands of the capitalist-industrial system.

Since women were now needed both as consumers and workers in order to continue the perpetual expansion of that system, feminism (via the destruction of old domestic roles and the promotion of new ambitions and consumer tastes) became an inevitable byproduct.

In short, just as we would predict on the basis of the theory of infrastructural determinism, when fossil fuels deeply altered humanity’s means of obtaining sustenance from the earth, everything about human society changed—from child rearing to politics; from cultural myths to personal dreams.

Of course, many—though not all—of these changes were destructive both of people and nature. And so, while most of the political struggles of the 20th century centered on questions of the distribution of power and wealth (as had been the case since the first agricultural surpluses were laid aside ten thousand years ago), many of those struggles also grew from efforts to control technology’s caustic impacts, which were linked by the social critics both to tools themselves and to people’s attitudes toward them. Technological politics focused on a range of issues: nuclear weapons and nuclear power, polluting chemicals, ozone-destroying chlorofluorocarbons, greenhouse gases, and the genetic engineering of food, to name only a few familiar examples.

Meanwhile, the most radical of the techno-critics drew inspiration from the trend toward cultural relativism that had won over mid-20th century anthropologists such as Stanley Diamond, who evinced profound admiration for the world’s remaining hunter-gatherers. For the anarcho-primitivist philosopher John Zerzan, all technology is damaging, debauched, destructive, and demeaning, and only a return to our primordial, pre-linguistic, pre-technic condition will enable us to recover fully our innate freedom and spontaneity.

But all of the techno-critics, from the mildest to the most extreme, tended to assume that, for decades hence, barring intervention, humanity will pursue a continued trajectory of technological change: the only thing that can thwart this ongoing “progress” will be the awakening of a new moral sensibility leading humans to reject technology, entirely or in part.

Peak Oil and the Limits of Technology

With the discourse on Peak Oil that has commenced mostly since the beginning of the new millennium has come a focus on energy as a determining factor in social evolution, at least as important as technology per se, or ideas, or political struggles. And with that shift has also come the sense that it is resource limits that will probably eventually drive basic cultural change, rather than moral persuasion, mass enlightenment, or some new invention.

As oil and gas prices rise, signaling the commencement of the peaking period, we continue to see the rollout of new inventions in the form of the latest iPod, the next generation of nuclear bombs, improved surveillance tools, and so on. However, there is also evidence that this stream of new inventions, like the global stream of oil, is starting to dry up.

Physicist Jonathan Huebner of the Pentagon’s Naval Air Warfare Center in China Lake, California, has for several years been studying the pace of technological change and invention, as catalogued in the publication The History of Science and Technology. After applying some elaborate mathematics, he has concluded that the rate of invention of significantly new and different tools peaked in 1873 and has been dwindling gradually since then. Huebner calculates our current rate of innovation at seven important technological developments per billion people per year—which is about the same rate as prevailed in Europe in 1600. If the trend continues, by 2024 the innovation rate will have declined to that of the Dark Ages.

Assuming that Huebner is right, it would seem that the 19th-century adoption of fossil fuels led to an early-peaking wave of invention, on whose trailing edge we are living today. As fossil fuels likewise peak and decline, we are unlikely to see another such burst of similar kinds or degrees of innovation; instead, we will see adaptation to a lower-energy cultural environment. And that adaptation may occur by way of versions of older cultural patterns that flowed from previous generations’ responses to similar levels of available energy.

Peak Oil will be a fundamental cultural watershed, at least as important as the industrial revolution or the development of agriculture. Yet few mainstream commentators see it that way. They discuss the likelihood of energy price spikes and try to calculate how much economic havoc will result from them. Always the solution is technology: solar or wind and maybe a bit of hydrogen for green-tinged idealists; nuclear, tar sands, methane hydrates, and coal-to-liquids for hard-headed, pro-growth economists and engineers; Tesla free-energy magnetic generators for the gullible fringe dwellers.

But technology cannot solve the underlying dilemma we face as a result of our application of fossil fuels to every human problem or desire: we are growing our population, destroying habitat (and undermining global climatic stability), and depleting resources in ways and at rates that are incapable of being mitigated by any new tool or energy source. The only way forward that does not end with the extinction of humanity and millions of other species is a scaling back of the entire human project—in terms both of human numbers and of per-capita rates of consumption.

And that is exactly what Peak Oil implies.

How dramatic a pull-back are we talking about? No one knows. It depends to a large degree on how we manage the inevitable collapse in financial and governance systems, and whether the countries of the world can be persuaded to adopt a global Oil Depletion Protocol; or whether instead nations merely fight mercilessly over the last petroleum reserves until even the “winners” are utterly spent and the resources in dispute have been used up or destroyed in the conflict itself.

In the worst case, Zerzan’s ideal of a return to hunting and gathering may be realized—though not by moral choice, but by cruel fate.

If Class D tools fueled by cheap oil eliminated drudgery, life without abundant extrasomatic energy will imply more labor—certainly for food production. The return of slavery is a frighteningly real possibility. Such nightmare scenarios can only be averted by careful, hard, cooperative work.

Staring at Techno-Collapse

In the meantime, what should we expect, and what should we do?

Realistically, I think we can expect to see some of the worst excesses of human history, but perhaps only briefly and in certain places. Within a few decades the governmental and corporate structures capable of perpetrating such outrages will have crumbled for lack of fuel. We can also anticipate—and participate in—localized cooperative attempts to reorganize society at a smaller scale.

Under the circumstances, efforts to try to bring industrialism to ruin prematurely seem to me to be pointless and wrongheaded: ruin will come soon enough on its own. Better to invest time and effort in personal and community preparedness. Enhance your survival prospects. Learn practical skills, including the manufacture and use of Paleolithic tools. Learn to understand and repair (as much as is possible) existing Class B and C tools that are likely still to be useful when there is no gasoline or electricity.

Preserve whatever is beautiful, sane, and intelligent. That includes scientific and cultural knowledge, and examples of human achievement in the arts. Nobody can preserve it all, or even a substantial portion; choose what appeals to you. A great deal of this knowledge is currently captured on media with dubious survival prospects—magnetic disc or tape, compact laser disc, or acid-soaked paper. If someone doesn’t make the effort, the best of what we have achieved over the past centuries and decades will disappear along with the worst.

In the best instance, the next generations will find themselves in a low-energy regime in which moral lessons from the fossil-fuel era and its demise have been seared into cultural memory. Maybe they will be able to maintain local, renewables-based electrical grids, and maybe also some powered transportation, so that they will still have access to a few tools with lives of their own. Perhaps not. In either case, we can hope that, like the Native Americans, who learned from the Pleistocene extinctions that over-hunting results in famine, they will have discovered that growth is not always good, that modest material goals are usually better for everyone in the long run than extravagant ones, and that every technology has a hidden cost. One hopes that, like the Haudinausaunee, who long ago concluded that fighting over scarce land and resources only means the endless perpetuation of violence, they will also have learned the methods and culture of peacemaking.

We humans tend to learn really tough lessons only by bitter experience. These are tough lessons indeed. If we learn them, perhaps the initially exhilarating but now bitter experience of addicting ourselves to fossil fuels and then having to go cold turkey will not have been entirely pointless.

Recommended Reading

John Zerzan and Alice Carnes, eds., Questioning Technology: Tool, Toy or Tyrant? (New Society, 1991)

Bryan Appleyard, “Waiting for the lights to go out,” The Sunday Times, Oct. 16, 2005

MuseLetter #160, “How to Avoid Resource Wars, Terrorism, and Economic Collapse,” www.museletter.com

Richard Heinberg, a journalist and educator, is a member of the core faculty of New College of California in Santa Rosa, where he teaches a program on Culture, Ecology, and Sustainable Community. He writes and publishes the monthly MuseLetter.

If you wish to republish any of these essays or post them on a web site, please contact us for permission.

No. 170 - June 2006

by Richard Heinberg

Energy Geopolitics 2006

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Note to Readers: For the entire month of June I will be at the State University of New York in Potsdam leading a series of faculty seminars on Peak Oil. July's print edition of MuseLetter will be late and may not arrive until mid-month.

News reports flitting across computer screens these days seem increasingly to be related to the subject of energy. But what do they signify? The modern world affairs analyst is in little better position to discern the patterns and portents than was his or her ancient Roman counterpart, the reader of entrails. What is one to make of items like these?

· In January, Russia's Gazprom (the state-owned natural gas company) temporarily cut supplies to Ukraine in order to obtain higher prices. While Russian president Vladimir Putin re-established gas shipments as soon as Western countries complained (they did so because they were running short, due to Ukraine's skimming off of gas being trans-shipped to Europe through its territory), Western officials saw this as Russia unsheathing its "gas weapon."

· In April, China's president Hu Jintao visited the US, where president Bush effectively humiliated him at the White House by "mistakenly" playing the Taiwanese national hymn upon Hu's arrival, rather than the hymn of the People's Republic, and by allowing a Taiwanese "journalist," a Falun Gong member, to rant uninterruptedly for more than three minutes about Chinese human rights violations during a filmed White House press conference, with Hu in attendance. Hu, himself displaying no bad manners, left Washington for Saudi Arabia, where he signed a series of accords involving Chinese access to future Saudi oil production in exchange for the transfer of sophisticated weapons and other technologies.

· Also in April, Bolivia's new president Evo Morales met with Hugo Chavez of Venezuela and Fidel Castro of Cuba, then announced the nationalization of his country's oil and gas fields. <br> · As a result of Washington's rejection of NAFTA decisions favoring Canada, the two countries' relations have soured. Canada may shift some of its oil trade away from the US: Ottawa's minister of natural resources has said that within a few years one quarter of the oil Canada now sells to the US may instead go to China.

· On May 9, CNN Money reported that Cuba has invited oil companies from China and India to drill in its Gulf waters. US firms had also been invited, but were prevented from participating by the longstanding American embargo on trade with Cuba.

· Russia's Gazprom has hired former German Chancellor Gerhard Schröder as a consultant and has taken a majority holding in the Northern European Gas Pipeline. Gazprom also has Britain's flagship utility, Centrica, in its sights for takeover; Tony Blair initially objected, then acquiesced to the deal.

· On a visit to Vilnius on May 4, US vice president Dick Cheney accused Russian president Vladimir Putin of using energy resources as a weapon to brandish against other Eurasian countries. "No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation," he said. The next day, Cheney visited Kazakhstan to promote oil and gas export routes bypassing Russia. In his May 10 state-of-the-nation address, Putin responded by referring to America indirectly using the metaphor of a voracious wolf, mentioning the US by name only in the context of peripheral comments about Africa and South America.

· Oil- and gas-exporting Iran, defying Washington's demands that it halt uranium enrichment, is being hauled before the UN Security Council, where the US is insisting on sanctions while Russia and China appear ready to block them. The evolution of the rhetoric on Washington's part is frighteningly reminiscent of that which accompanied the run-up to the 2003 invasion of Iraq.

· Meanwhile, oil prices have hit historic highs of over $75 per barrel while global production has been stalled at about 85 million barrels per day for the past year.

While the specific meanings of-and connections between-these occurrences are often difficult to discern, their overall drift is becoming plainer with every passing day: The world is plunging into an energy crisis unlike any before, while geopolitical alliances are shifting quickly and to a degree not seen since the end of the Soviet era, and perhaps not since the end of World War II.

Global oil production is peaking-for all practical purposes, now. In the past weeks, the New York Times, Bill Clinton, and the executive vice president of Ford Motor Company (among many others) have stated that world oil flow is at peak. We have even seen one of the major oil companies (Chevron) place ads in multiple magazines and newspapers in order-gently, perhaps, but insistently and conspicuously-to break the news to the American people that the era of cheap oil, and cheap energy in general, is finished, over, done, dead, and gone. And that era just happens to be the only one that Americans alive today have ever known.

Oil is not the only problem; natural gas is turning out to be just as big a worry in North America and many European countries, and just as big a geopolitical prize to those who have and covet it. Gas prices have grown unusually volatile in the US, lurching from the long-time norm of $2 per thousand cubic feet up to $15 and back to $7 or less in six years. Globally, there are enormous natural gas deposits in Russia and Iran, but getting that gas to market in the growing quantities at which importers would like to use it will likely prove difficult, expensive, and perhaps even impossible given the geopolitical and economic context as well as the practical difficulties involved. This is very bad news for North Americans, who will have to rely increasingly on liquefied natural gas imported from far away by tanker-and will have to get used to paying the geopolitical costs that far-flung supply networks entail.

Welcome to the twenty-first century. And welcome to a world for which none of us is prepared. Take a good look around: things are changing quickly everywhere, and the omens are . . . well, ominous.

Russia: The Dealer Wins

When Washington succeeded in engineering the economic and political collapse of the USSR at the end of the 1980s, some heralded this as the "end of history"-a judgment that proved premature at best. After a decade of turmoil, during which foreign (mostly American) companies plundered Russia's treasures, that nation elected as president Vladimir Putin, an ex-KGB officer who, as a career move, had recently spent a stint at the St. Petersburg Mining Institute writing a dissertation titled "Toward a Russian Transnational Energy Company." His thesis: Russia should use its vast energy reserves for geostrategic advantage.

After entering office in 2000, Putin moved to reconsolidate state control over the country's oil and gas industries. Now, with that task almost fully accomplished, he appears to be making his dissertation a reality. Putin has paid off much of Russia's foreign debt, the nation has accumulated impressive financial reserves, and Gazprom recently overtook BP to become the world's second-largest energy company.

Putin is sewing up an increasing portion of the European gas and oil market (Russia supplies about a quarter of Europe's oil and a third of its gas), and that of Japan as well. He knows his country will need enormous capital investments in order to keep pumping the hydrocarbons; Europe and Japan need those hydrocarbons and have cash to invest. Putin's goal seems to be a kind of natural-gas version of OPEC, a cartel with supply networks throughout Central Asia and with pipelines supplying Europe and China.

Russia's relations with China have warmed in recent years. The Shanghai Cooperation Organization (SCO) was born on June 15, 2001, with Russia, China, and four former USSR Central Asian republics (Kazakhstan, Kyrgystan, Tajikistan, and Uzbekistan) as charter members. While there is little discussion of the SCO in US media, that organization has been patiently expanding its capacity to act as a geopolitical counterweight to Washington. The US may have won the Cold War, but Russia will not be so easily bested in the energy war. Currently Russia is nearly tied with US ally Saudi Arabia in oil production (though the Saudis export more because Russia uses a larger proportion domestically). While Russia's rate of production is likely to stall in the next year or two and then begin its inevitable and terminal decline, much the same can likely be said for Saudi Arabia's. Meanwhile, Russia is unequaled globally in natural gas reserves. The matter is not simple, though. Russian gas output is currently in decline and this, combined with a severe Russian and European winter, may have forced Russia to reduce its gas exports. Also its own populace pays very little for gas, so indigenous demand is enormous. This is one reason why Gazprom is reputedly short of cash for such matters as large-scale Arctic gas development.

East Asia: Crouching Tiger, Hidden Peril

China, flush with cash from its enormous trade accounts surplus, appears to be successfully competing with the US for future oil supplies not only in Asia but in Africa, South America, and Canada as well.

However, behind this new geopolitical strength, and beneath the spectacular recent growth rates of the Chinese economy, lurks long-term vulnerability. Given its huge population and an inherent demographic conflict between its industrialized coastal cities and the impoverished agricultural interior, China is actually acting out of desperation. Internal political upheaval will erupt if growth cannot be sustained, and growth will sputter without endlessly expanding energy supplies.

China's burgeoning appetite for energy implies problems for Japan and South Korea, which also need hydrocarbons. For the past half-century these nations were cornerstones of America's global sphere of influence. But America's ability to assure future energy supplies is now questionable compared with that of Russia, and Korea and Japan will have to jostle with China to maintain their share of what is available.

Currently, Japan and China are at odds over territorial rights (and access to drilling opportunities) in the East China Sea. Would the US be able to come to Japan's aid if competition turns to conflict? Significantly, a vigorous debate is breaking out in Japan as to whether it should start building a real defense capacity of its own.

Japan has also for many years been the primary holder of US foreign debt, banking on the ongoing stability of the dollar while enabling Washington to run up enormous deficits. However, the dollar's soundness is increasingly in question.

If the US can supply Japan with neither energy resources, nor reliable military protection, nor financial security, why should Tokyo continue to support America diplomatically? And why should it continue to prop up the dollar by buying yet more US debt instruments-except to protect its existing dollar holdings?

Central Asia: Betwixt East and West

In Central Asia Washington has followed an old and familiar imperial playbook, supporting corrupt, autocratic regimes that offer sweetheart energy deals and that host US military bases, while undermining governments that refuse to play along. The playbook was on display in early May when Mr. Bush hosted Azerbaijan's president Ilham Aliyev at the White House, stressing in his welcoming words the importance of their nations' security and energy ties. But Washington is half a world away from Baku, while America's rivals (Russia and China) are relatively close by. The Caspian basin was of key interest to American strategists even before the oil and gas discoveries of 1999-2000 in Kazakhstan. Thus last year's announcement by Uzbekistan that it would no longer permit US military bases on its soil was an alarm bell for American geostrategists overseeing the region.

The Bush administration wants to curb Moscow's influence in Central Asia and to weaken Gazprom's growing control of energy supplies to Europe and the Caucasus, promoting new oil and gas shipment routes bypassing Russia and Iran in favor of its loyal ally Turkey. On May 15, Kazakhstan's prime minister announced that his nation-with current oil production of about 1.3 million barrels a day expected to grow to 3Mb/d by 2015-will begin next month to pump its oil through BP's US-backed Baku-Tbilisi-Ceyhan (Azerbaijan to Georgia to Turkey) pipeline. Score one for Washington.

However, Russia and Iran have the lion's share of the needed resources, and these nations are geographically placed to deliver hydrocarbons to developing markets. Washington, in contrast, is itself an oil and gas importer whose ability to back up threats by projecting military force is now questionable as a result of events in Iraq.

Washington's nightmare scenario would consist of a Russian-Iranian alliance to dominate Central Asian oil and gas production and trans-shipment routes. Such an alliance is counter-intuitive in that Russia and Iran are competitors for export markets. But the Bush administration's belligerence toward both nations could well persuade them to overcome their mutual wariness.

India: Whose Ally?

During the past year president Bush has gone out of his way to woo India as a geopolitical counterweight to China, sharing nuclear technology with Delhi-while bashing Iran for developing its own nuclear program (the irony may be lost on Americans, but not on others). However, India's long-term interests are more naturally aligned with those of the rest of Asia than with those of the distant US. India has rejected US pressures to withdraw from an oil pipeline deal with Iran, though that deal has yet to be concluded due to security considerations regarding Pakistan (through which the pipeline must pass). For its part, Pakistan has announced its intention to build the pipeline regardless of India's decision.

The Financial Times reports that Washington "warned India that Delhi's own nuclear deal with the US could be ditched if the Indian government did not vote to refer Tehran to the United Nations Security Council." Delhi voted accordingly, but may have second thoughts if Iran threatens to scuttle the $20 billion Indian gas pipeline deal just mentioned. India uses only the gas it extracts from indigenous sources at the moment, but would use more if it were available.

India's main ties to the US are based on trade and security. If, as the US dollar tumbles and the Iraq quagmire deepens, America proves unable to ensure these benefits, then Delhi may have no choice but to add its considerable weight to the SCO Asian bloc. The deputy editor of The Hindu recently observed that "if the 21st century is to be an 'Asian century,' Asia's passivity in the energy sector has to end." While hosting "the world' s largest producers and fastest growing consumers of energy," he wrote, Asia currently relies on "institutions, trading frameworks and armed forces from outside the region in order to trade with itself." It seems unlikely to continue doing so for much longer.

Meanwhile, India's industrial growth depends on energy supply, and with oil prices high and coal shortages looming, the country's long-term growth prospects are questionable.

Europe: Buddy, Can You Spare a Btu?

Europe's indigenous oil and gas reserves in the North Sea are rapidly depleting, with oil production decline rates averaging over 7% per year.

Europe has been allied with the US for many years (Western Europe since World War II or before, Eastern Europe since 1990), led in this regard by Britain. Prime Minister Tony Blair, who staked his career on support for Bush in the Iraq invasion, is clearly on his way out. His nation, now an oil and gas importer, faces a future of increasing dependency on foreign sources, with Russia the logical long-term option for gas. Britain and the rest of Europe are fearful of Moscow's intentions, but they are negotiating from weakness: Europe has few alternative potential suppliers, but Russia has a willing and immediate alternative customer-China.

In a recent statement to European ambassadors, Gazprom's chief executive Alexei Miller said that an April meeting between Vladimir Putin and European Commission president Jose Manuel Barroso was the "final straw" in persuading the former to finalize a major gas deal with China. Miller reported that Mr. Putin was "taken aback" by the EU's insistence on limiting Gazprom's share of the European gas market. Apparently in response, Mr. Barroso later complained of Moscow's "use of energy resources as an instrument of political coercion."

Gazprom pipes about a third of its gas to Europe, with sales totaling over $25 billion last year. But European trade accounts for a disproportionate share of the company's revenues due to continued domestic energy price subsidies in Russia. Gazprom's 1,200 km gas pipeline to Germany under the Baltic Sea, now under construction, bypasses Poland, the Baltic states, and Ukraine-which are generally seen as more loyal to Washington than to Moscow. Russia is not shy about the political implications: its ambassador to Belarus said recently that "when the Baltic pipeline is built, Gazprom will be able to cut off Belarus without cutting off Germany. That means Poland too." The Polish defense minister has compared the pipeline to the 1939 Hitler-Stalin deal partitioning Poland.

Ties between Europe and the US run deep and are unlikely to dissolve overnight. Moreover, any shift away from traditional trans-Atlantic alliances is likely to be disruptive to the fragile European Union. Nevertheless, Washington can no longer count on automatic diplomatic support from Brussels, nor perhaps soon from London either, given the growing Russian stranglehold on European access to gas and oil; nor can Europe count on continued US economic strength or America's ability to assure (by military means if necessary) ongoing energy supplies.

Middle East: Seismic Rumblings

While the situation in Iraq continues to unravel (some speculate that the Bush administration has now resigned itself to a dismemberment of the country along ethnic lines), all eyes are fixed on nearby Iran. The international diplomatic consensus seems to be that relations between that nation and the US have degenerated to such a point as to constitute the most worrisome international confrontation in decades.

America's worries over Iran's uranium enrichment and nuclear ambitions, while real, are also a mask for deeper issues-unresolved aspects of the two nations' historic relations dating back many decades, and American irritation at Iran's status as a nexus of the emerging Asian energy network. For their part, Iranian leaders truly want the ability to produce nuclear electricity: they have the capital to invest (thanks to high oil and gas prices), and they know that their country's hydrocarbon resources are draining away. Iran's oil production is in decline to the point that the nation is unable to produce its OPEC quota; meanwhile it must import half the gasoline it uses due to inadequate refining capacity. Iran also imports natural gas from Turkmenistan for various reasons, as does Russia.

At the next meeting of the Shanghai Cooperation Organization on June 15, Iran will be inducted as a full SCO member. At the same meeting, India, Mongolia, and Pakistan will also be invited to join. In April, Iran's deputy foreign minister Manouchehr Mohammadi told ITAR-Tass in Moscow that his country's membership in SCO would "make the world more fair." Mohammadi also spoke of an emerging cooperative Iranian-Russian "gas-and-oil arc."

Meanwhile China, the other primary SCO founder, is signing a $100 billion oil and gas deal with Tehran. Washington has exerted enormous diplomatic pressure on the Chinese to forego the agreement, but with no success. As mentioned above, there is also a nascent gas pipeline agreement between Iran, India, and Pakistan, and there is still talk of an Afghan gas pipeline.

The Bush administration-on the diplomatic, political, and military defensive over Iraq-is desperately seeking a way to maintain the appearance as well as the reality of power and influence in Eurasia. Iranian president Ahmadinejad is thumbing his nose at the US, and desires to lead an anti-American uprising of Muslim nations in the region. The American neocons evidently want to bomb Iran's nuclear research facilities, but Iran holds strong deterrent cards in its emerging ties with Russia, China, and India. The old-guard foreign policy establishment in Washington views this US-Iran confrontation (quite rightly) as another strategic disaster in the making. Powerful behind-the-scenes forces in Washington are working quickly but methodically to topple the Bush administration before it can act, or at least to hobble its ability to act if it survives. If they do not succeed and an attack ensues, conflict is likely to spread throughout the region. The consequences are potentially cataclysmic.

Africa: Dividing the Spoils

Evidently the industrialized world views Africa (with the partial exception of South Africa) less as an emerging market than as a heap of resources ripe for taking.

China's president Hu recently visited Nigeria-America's fifth-largest oil supplier-where oil production is increasingly threatened by well-organized rebels. In just one week in early May, three Italian oil workers were kidnapped, an American oil worker was assassinated, and an illegally tapped pipeline line exploded killing over 200 villagers attempting to steal gasoline. There is widespread speculation that at least some rebel groups are being covertly trained and supplied by nations interested in Nigeria's oil and gas-including the US, China, Britain, Pakistan, and India.

If oil and gas pipelines are geopolitical bargaining chips in Europe, Asia, and South America, the same is true in Africa. The Chad-Cameroon pipeline, delivering 160,000 barrels of oil per day, is in effect being held hostage by Chad's president Idriss Deby in his attempts to ward off World Bank creditors. Meanwhile, insurgents operating in Chad are threatening neighboring Sudan, whose oil resources are in turn being eyed hungrily by both the US and China. The latter nation refused to condemn Sudan over recent killings in Darfur, after Sudan allowed Beijing to build a 500-mile pipeline to the coast.

Equatorial Guinea, Africa's third-largest oil exporter, is led by dictator Teodoro Nguema (recently lauded by Condoleeza Rice as a friend of the US), who was the object of a coup last year led by none other than Sir Mark Thatcher, son of former British Prime Minister Margaret Thatcher.

South Africa, the economic engine of the continent, has enormous coal reserves and state-of-the-art coal-to-liquids technology, yet still imports most of its oil from the Middle East. Tentative plans to develop biofuels production on the continent threaten to pit fuel production against food production in countries where hunger is already endemic.

Meanwhile the US has undertaken a quiet military buildup in West Africa, with personnel dispatched to Nigeria and warships to the Gulf of Guinea.

South America: Emerging from the US Shadow

Evo Morales's nationalization of Bolivia's gas adds to a growing rebellion (most notably in Venezuela, but also in Argentina, Chile, and to a certain extent Brazil) against the "Washington consensus" of neo-liberal, US-dominated trade agreements. Historically, the United States has regarded Latin America as its backyard and has not permitted much independent maneuvering by leaders there (one has only to contemplate the fates of Torrijos, Noriega, Arbenz, and Allende to grasp this). But it may be that this time matters have gotten too far out of hand to be reined in by the usual methods. Assassinations and the toppling of regimes might backfire badly, given the widespread recent mobilization of anti-US popular opinion in many South and Central American countries. Moreover, full-scale military intervention is practically impossible given US fixations with Iraq and now Iran.

What would have been unthinkable only five years ago seems to be happening: South America is slipping out of Washington's control and may even become united in hostility to its northern neighbor. If Daniel Ortega wins election in Nicaragua this fall, Central America could eventually follow.

The United States: What Can Bombs and Bluster Buy?

The US, the world's undisputed superpower for the past 15 years, is stumbling. Once the world's energy king, its domestic oil production has been in steep decline for decades (ANWR and coastal drilling won't change that). Its natural gas extraction is also in decline, its electricity grid is in need of overhaul, its transportation system is inefficient, its roads are crumbling, and its urban infrastructure is designed to function only with massive ongoing inputs of cheap energy.

As if that weren't enough, the US dollar is on the ropes as a result of extraordinary rates of borrowing-plus tax cuts and growing trade deficits. Downward pressure on the dollar's value may further intensify if Iran and Venezuela follow through on threats to begin selling their oil for euros, and if Russia starts pricing its crude in rubles, as it has announced the intention of doing. For decades, the fact that nearly all international oil sales have been denominated in US dollars has encouraged nations to keep substantial holdings of dollars in reserve, and this has in turn kept the currency's value high and stable. A widespread rejection of the dollar in oil trading would have an impact on the US economy somewhere between serious and fatal, in the opinion of various commentators.

America's domestic political situation is equally dire. The current administration came into office on the basis of a promise-set forth in the 2002 "National Security Strategy of the United States"-to achieve and maintain virtually complete global hegemony by discouraging any nation or combination of nations from achieving military or economic parity. That promise also-and crucially-included the goal of gaining unchallenged control of the world's oil and gas flows. Tactics reserved to that end included pre-emptive war and "regime change" anywhere necessary. The US corporate/banking/military elite gave the neocon-dominated executive group virtually free rein to pursue these goals. Given that group's lack of a robust popular constituency, this entailed the fixing of elections, the mobilization of the media, the redirection of immense amounts of government revenue, the overriding of the Constitution as well as international laws and treaties, and the orchestration of a spectacular terrorist attack.

The Bush-Cheney-Rumsfeld crew had its chance and, by near-universal opinion, achieved colossal failure on all counts. This failure was in fact predicted by many-including the millions who marched in streets to try to avert the Iraq invasion. But the current tragicomedy of the neocons' fall from grace can offer little satisfaction to anyone, in that it implies extraordinary perils to both the nation and the world.

Over the past few months the consensus of the traditional power elites has shifted dramatically: they have evidently (judging by their statements and by the attitude of the mainstream media) concluded that the neocon cabal must go. Washington prosecutors, backed by the establishment's old-guard foreign policy "realists" inside and outside of government, are preparing revelations of scandals and the handing down of still more indictments.

This may all be well and good in itself. However, the neocons' efforts have meanwhile squandered immense amounts of fiscal, political, and diplomatic capital. And these efforts have played out (not coincidentally) as global energy streams are drying up. America's power elites bet the farm on the neocons and lost. There can be no second chance. A recovery of America's former position of unquestioned dominance, enjoyed until only years ago, is simply not in the cards. The best that can be hoped for is a partial re-consolidation based on withdrawal and reconciliation abroad, and massive inflation at home. This is a reversal of truly historic proportions.

The danger, of course, is that the neocons may be unwilling to surrender without a fight, and the casualties of that fight could conceivably number in the millions.

In short, we are witnessing nothing less than the beginning of the disintegration of the American empire abroad, and of long-standing national economic and political structures at home. It is important to avoid overstatement: the US is still an immensely powerful nation militarily and economically, and one that yet commands respect in at least some quarters. But the degree of the recent erosion of that respect, while difficult to quantify, is nevertheless considerable and unprecedented.

* * *

With the decline of Washington's "full-spectrum dominance," we are seeing the emergence of countervailing power blocs, primarily in Asia but also in South America. Liberal pundits have sometimes mocked Bush's campaign promise to be "a uniter rather than a divider," claiming that the president's policies are effectively uniting the rest of the world against the US. There is more than a little truth to this.

This is the end of an era. And the transition toward whatever stable geopolitical arrangements are yet to come is likely to take some time and to be extremely dangerous and messy. If you want to understand the progress of that transition, follow the energy.

Sources for this article (by date):

Siddharth Varadarajan, "India, China and the Asian Axis of Oil," The Hindu, January 24, 2006. http://www.thehindu.com/2006/01/24/stories/2006012403181000.htm

"Russia Should Cut Oil to Europe, Cut Discounts on Urals Crude-Transneft," MosNews, April 24, 2006. http://www.mosnews.com/money/2006/04/24/overfed.shtml

"China Acts to Secure Oil Reserves Amid Record Crude Prices," AFP, April 24, 2006. http://www.breitbart.com/news/2006/04/24/060424184139.e1iolabv.html

Noam Chomsky, "Afterword: Failed States," Znet, April 26, 2006. http://www.zmag.org/content/showarticle.cfm?SectionID=11&ItemID=10162

Michael C. Ruppert, "The Paradigm Is the Enemy: The State of the Peak Oil Movement at the Cusp of Collapse," Fromthewilderness.com, April 28, 2006. http://www.copvcia.com/free/ww3/042706_paradigm_speech.shtml

Jerome a Paris, "The New Gas War," European Tribune, May 1, 2006. http://www.energybulletin.net/15470.html

Michael Hirsh, "The Energy Wars," Newsweek, May 3, 2006. http://msnbc.msn.com/id/12617717/site/newsweek/

David Espo, "Cheney Lectures Russia about Reform," Associated Press, May 4, 2006. http://www.forbes.com/entrepreneurs/feeds/ap/2006/05/04/ap2720922.html

"Heading Out," "Do the Russians Play Monopoly?" TheOilDrum.com, May 4, 2006. http://www.theoildrum.com/story/2006/5/3/223141/2176

F. William Engdahl, "America's Geopolitical Nightmare and Eurasian Strategic Energy Arrangements," Globalresearch.ca, May 7, 2007. http://www.globalresearch.ca/index.php?context=viewArticle&code=%20EN2006050 7&articleId=2401

"China, Cuba reported in Gulf Oil Partnership," CNN Money, May 9, 2006. http://money.cnn.com/2006/05/09/news/economy/oil_cuba/?cnn=yes

Ian Traynor, Nick Payton Walsh, and Ewan MacAskill, "The Russian Bear Is Back-and This Time It's Gas-powered." The Guardian, May 13, 2006. http://www.guardian.co.uk/international/story/0,,1774031,00.html

Jad Mouawad, "The Pipes Carry Clout with the Oil," The New York Times, May 13, 2006. http://www.energybulletin.net/15960.html

"Venezuela May Price Oil Exports in Euros," Reuters, May 17, 2006. http://www.theglobeandmail.com/servlet/story/LAC.20060517.RTICKERB17-1/TPSto ry/TPBusiness/America/

"Kazakhstan to Join Oil Pipeline in June," MSN Money, May 18, 2006. http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=2 0060515&ID=5720934 (Specific link no longer viable)

Richard Heinberg, a journalist and educator, is a member of the core faculty of New College of California in Santa Rosa, where he teaches a program on Culture, Ecology, and Sustainable Community. He writes and publishes the monthly MuseLetter.

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NUMBER 107 / DECEMBER 2000
Appreciations

NUMBER 106 / NOVEMBER 2000
Do the Folks in Charge Know What They're Doing?

NUMBER 117 / NOVEMBER 2001
Should the United States Renounce Terrorism?

NUMBER 112 / MAY 2001
Prospects for Social Movements

NUMBER 111 / APRIL 2001
The Nature of Art

NUMBER 110 / MARCH 2001
A Letter from the Future

NUMBER 109 / FEBRUARY 2001
Three Great Books

NUMBER 108 / JANUARY 2001
Biotechnology and the Fate of the Soul

NUMBER 129 / OCTOBER 2002
Remember When We Had Elections?
Defining democracy in the wake of the 2002 US elections.

NUMBER 128 / OCTOBER 2002
Behold Caesar
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NUMBER 132 / FEBRUARY 2003
The US and Eurasia: End Game for the Industrial Era
Struggle for the control of Eurasia and its energy resources.

NUMBER 152 / DECEMBER 2004
Beyond the Peak View a pdf version here
Closing Address, by Richard Heinberg, to the First US Conference on Peak Oil and Community Solutions.

NUMBER 149 / AUGUST 2004
The Endangered US Dollar View a pdf version here
The US dollar will not be the world's default currency for that much longer.

NUMBER 148 / JULY 2004
Boomers' Last Chance? View a pdf version here
Can we now give back at least the possibility that future generations will be permitted to exist?

NUMBER 144 / MARCH 2004
Götterdämmerung View a pdf version here
The current US leaders' actions are so clearly sabotaging the very system that sustains them that an explanation is in order.

NUMBER 163 / NOVEMBER 2005
Tools with a Life of Their Own View a pdf version here
Includes presentation and discussion of The Oil Depletion Protocol.

NUMBER 160 / AUGUST 2005
How to Avoid Oil Wars, Terrorism, and Economic Collapse View a pdf version here
Includes presentation and discussion of The Oil Depletion Protocol.

NUMBER 159 / JULY 2005
Threats of Peak Oil to the Global Food Supply View a pdf version here
A paper presented at the FEASTA Conference: "What Will We Eat as the Oil Runs Out?", June 23-25, 2005, Dublin Ireland.

NUMBER 154 / FEBRUARY 2005
Meditations on Collapse View a pdf version here
A review of Jared Diamond's Collapse: How Societies Choose to Fail or Succeed.

NUMBER 175 / NOVEMBER 2006
Fifty Million Farmers

NUMBER 173 / SEPTEMBER 2006
About the Oil Depletion Protocol

NUMBER 172 / AUGUST 2006
Middle East at a Crossroads

NUMBER 171 / JULY 2006
An Open Letter to Greg Palast on Peak Oil

NUMBER 170 / JUNE 2006
Energy Geopolitics 2006 View a pdf version here
Navigating the maze of global energy news and composing a picture of the major global players' motives and moves.