When Will Gas Prices Go Down?

Source: The New York Times: The Oil Crunch, by Paul Krugman

Oil is a resource in finite supply; no major oil fields have been found since 1976, and experts suspect that there are no more to find. Some analysts argue that world production is already at or near its peak, although most say that technological progress, which allows the further exploitation of known sources like the Canadian tar sands, will allow output to rise for another decade or two. But the date of the physical peak in production isn’t the really crucial question.

The question, instead, is when the trend in oil prices will turn decisively upward. That upward turn is inevitable as a growing world economy confronts a resource in limited supply. But when will it happen? Maybe it already has.

…Lately we’ve been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition — the scramble for oil and other resources — poses a much bigger threat to our prosperity.

So what should we be doing? Here’s a hint: We can neither drill nor conquer our way out of the problem. Whatever we do, oil prices are going up. What we have to do is adapt.

Should We Expect Iraq To Embrace Democracy?

From the book Orientalism by Edward Said, published in 1978.

What American leaders and their intellectual lackeys seem incapable of understanding is that history cannot be swept clean like a blackboard, so that “we” might inscribe our own future there and impose our own forms of life for these lesser people to follow. It is quite common to hear high officials in Washington and elsewhere speak of changing the map of the Middle East, as if ancient societies and myriad peoples can be shaken up like so many peanuts in a jar. But this has often happened with the “orient”, that semi-mythical construct which since Napoleon’s invasion of Egypt in the late 18th century has been made and remade countless times. In the process the uncountable sediments of history, a dizzying variety of peoples, languages, experiences, and cultures, are swept aside or ignored, relegated to the sandheap along with the treasures ground into meaningless fragments that were taken out of Baghdad.

Edward Said was a professor of comparative literature at Columbia University and was a well known Palestinian scholar who died in 2003.

Via Joichi Ito

America’s Dirtiest Power Plants: Plugged into the Bush Administration

America’s Dirtiest Power Plants: Plugged into the Bush Administration ranks the top 50 polluting power plants for three pollutants: sulfur dioxide, carbon dioxide, and mercury. While these top polluters represent only a fraction of their industry, they account for far more than their share of pollution.

Environmental Integrity Prjoject • 919 18th Street, NW, Suite 975, Washington, DC 20006

Link: America’s Dirtiest Power Plants

Campaign Contributions and Fundraisers

Since 1999, the 30 biggest utility companies that own plants on the three “Dirtiest” lists have poured $6.6 million into the coffers of the Bush presidential campaigns and the Republican National Committee (RNC), whose chief mission is to elect the party’s presidential nominee. This level of contributions places electric utilities among the industries that have given the most to support Bush’s campaigns – comparable to such major givers as drug manufacturers and HMOs. The electric utilities and their trade associatio n, the Edison Electric Institute (EEI), have produced 10 “Rangers” and “Pioneers,” the Bush campaign’s super- fundraisers who collect at least $200,000 or $100,000, respectively, in earmarked contributions.

These Rangers and Pioneers, despite being limited by law to maximum individual donations of $2,000, raised at least $1.5 million using the Bush campaign’s sophisticated “bundling” system – by which corporate executives, lobbyists and other insiders pool together large numbers of contributions to maximize their political influence. The contributions are credited to the bundlers using tracking numbers assigned to them by the campaign. So far in the 2004 election cycle, the campaign has recruited two Rangers and five Pioneers from the electric utility industry, compared with six Pioneers in 2000 (when there was no Ranger category).

Alternate Sources of Energy: Wind with Hydrogen

Norwegian island being used to test clean energy system
AP WorldStream via COMTEX
NewsTeam | CBS [MarketWatch] | POSTED: 04.27.04 @08:52
OSLO, Norway, Apr 27, 2004 — Wind power and other alternatives to fossil and nuclear fuels have one major drawback – they depend on nature to generate electricity.

A Norwegian company, Norsk Hydro ASA, presented a project Tuesday to overcome the problem of storing electricity when the wind dies, the sea calms, or the sun doesn’t shine

It built two 600-kilowatt wind turbines and connected them with a hydrogen generator and a fuel cell to provide electricity for 10 homes on Utsira, a tiny town of 240 people on a wind-swept island about 18 kilometers (11 miles) from the mainland. Utsira is 320 kilometers (200 miles) west of Oslo.

When it’s very windy, not unusual for Utsira, the wind turbines will produce excess power to produce hydrogen fuel in a process known as electrolysis – which splits water into hydrogen and oxygen.

That fuel will in turn power a hydrogen combustion engine and a fuel cell to generate electricity when the wind is not blowing.

National Leadership and Short-Sightedness

Two examples of leadership without vision from Jared Diamond, author of the book Guns, Germs, and Steel: the Fates of Human Societies.

Guns arrived in Japan around 1543 with two Portuguese adventurers who stepped ashore, pulled out a gun, and shot a duck on the wings. A Japanese nobleman happened to be there, was very impressed, bought these two guns for $10,000, and had his sword-maker imitate them. Within a decade, Japan had more guns per capita than any other country in the world, and by the year 1600 Japan had the best guns of any country in the world. And then, over the course of the next century, Japan gradually abandoned guns.

What happened was that the Samurai, the warrior class in Japan, had been used to fighting by standing up in front of their armies and making a graceful speech, the other opposing Samurai made an answering graceful speech, and then they had one-on-one combat. The Samurai discovered that the peasants with their guns would shoot the Samurai while the Samurai were making their graceful speeches. So the Samurai realized that guns were a danger because they were such an equalizer. The Samurai first restricted the licensing of gun factories to a hundred factories, and then they licensed fewer factories, and then they said that only three factories could repair guns, and then they said that those three factories could make only a hundred guns a year, then ten guns a year, then three guns a year, until by the 1840s when Commodore Perry came to Japan, Japan no longer had any guns.

China: China led the world in innovation and technology in the early Renaissance. Chinese inventions include canal lock gates, cast iron, compasses, deep drilling, gun powder, kites, paper, porcelain, printing, stern-post rudders, and wheelbarrows — all of those innovations are Chinese innovations. So the real question is, why did Renaissance China lose its enormous technological lead to late-starter Europe?

We can get insight by seeing why China lost its lead in ocean-going ships. As of the year 1400, China had by far the best, the biggest, and the largest number of, ocean-going ships in the world. Between 1405 and 1432 the Chinese sent 7 ocean-going fleets, the so-called treasure fleets, out from China. Those fleets comprised hundreds of ships; they had total crews of 20,000 men; each of those ships dwarfed the tiny ships of Columbus; and those gigantic fleets sailed from China to Indonesia, to India, to Arabia, to the east coast of Africa, and down the east coast of Africa. It looked as if the Chinese were on the verge of rounding the Cape of Good Hope, coming up the west side of Africa, and colonizing Europe.

Well, China’s tremendous fleets came to an end through a typical episode of isolationism, such as one finds in the histories of many countries. There was a new emperor in China in 1432. In China there had been a Navy faction and an anti-Navy faction. In 1432, with the new emperor, the anti-Navy faction gained ascendancy. The new emperor decided that spending all this money on ships is a waste of money.

In the examples above, Japan and China became weak and vulnerable to attack due short-sighted leadership. Is the United States going to be weakened by failing to develop an alternative to oil for its huge appetite for energy? If terrorists are able to significantly reduce the flow of oil from Saudi Arabia and all the unstable oil-producing countries, we are going to find out.

Al Qaeda strategy: Create Oil Shortage

John Robb suggests that al Qaeda may be trying to disrupt the oil supply to create a massive shortage.

Saudi security building bombed. Senior security official killed. This marks a major change in strategy. Regime destabilization is underway. A potential al Qaeda strategy: continue attacks on Iraqi oil production (which have been very effective given how few attacks have been made), extend political dislocation to Saudi Arabia (this attack marks the start of that), and reduce Saudi oil production through disruptive attacks (watch for that over the next three years). The goal: keep Saudi oil production at stable or decreasing levels. Rapidly growing global demand will create a massive shortage in short order. Think systems and networks.

Park those Hummers!

Ties between Bushes, Saudi royal family

I don’t have time to read all the books that I want. So I read book reviews when I can’t read the books.

If this book is based on fact, I’m very concerned.

House of Bush, House of Saud: The Secret Relationship Between the World’s Two Most Powerful Dynasties. By Craig Unger. Scribner. $26. 356 pages.

On Sept. 13, 2001, the United States grounded all commercial aviation, yet more than 140 individuals were permitted to leave the country. Nearly all of them were Saudi, and roughly two dozen were kin to Osama bin Laden. What kind of intelligence failure allowed that to happen? Were those individuals seriously questioned? Who allowed them to leave? Given that 15 of the 19 hijackers were Saudi, what was the rush in squandering what may have been a potential intelligence mother lode?

Craig Unger first reported this story in Vanity Fair magazine. In “House of Bush, House of Saud,” he places this incredible scenario in the context of a decades-old relationship between the ruling clan of Saudi Arabia and America’s pre-eminent political dynasty, the Bush family.

To begin, Unger takes us back to the 1960s, when George H.W. Bush was an oilman in Texas whose success included drilling the first offshore well for a tiny Middle Eastern country called Kuwait. Bush got out of oil in 1966 to get into politics and wound up as head of the CIA just as Saudi businessmen close to the royal family began investing in Bush’s home state. They bought up real estate and purchased planes. They bought a bank in Houston with former Texas Gov. John Connally. They developed a skyscraper known as Texas Commerce Tower, which housed Texas Commerce Bancshares, the bank started by the grandfather of James A. Baker, Bush’s right-hand man.

But this is just the beginning of the relationship. continued…

The House of Saud

Excerpt from The fall of the House of Saud, By Robert Baer, The Atlantic Monthly, May 2003

Robert Baer served for twenty-one years with the CIA, primarily as a field officer in the Middle East. He resigned from the agency in 1997 and was awarded its Career Intelligence Medal in 1998. This article is adapted from his book Sleeping With the Devil (June, 2003, Crown Publishers), Saudi Arabia today is a mess, and it is our mess. We made it the private storage tank for our oil reserves. We reaped the benefits of a steady petroleum supply at a discounted price, and we grabbed at every available Saudi petrodollar. We taught the Saudis exactly what was expected of them. We cannot walk away morally from the consequences of this behavior–and we really can’t walk away economically. So we crow about democracy and talk about someday weaning ourselves from our dependence on foreign oil, despite the fact that as long as America has been dependent on foreign oil there has never been an honest, sustained effort at the senior governmental level to reduce long-term U.S. petroleum consumption. Not all the wishing in the world will change the basic reality of the situation.

Saudi Arabia controls the largest share of the world’s oil and serves as the market regulator for the global petroleum industry. No country consumes more oil, and is more dependent on Saudi oil, than the United States. The United States and the rest of the industrialized world are therefore absolutely dependent on Saudi Arabia’s oil reserves, and will be for decades to come. If the Saudi oil spigot is shut off, by terrorism or by political revolution, the effect on the global economy, and particularly on the economy of the United States, will be devastating.

Link The fall of the House of Saud, By Robert Baer, The Atlantic Monthly

Winning the Real War By THOMAS L. FRIEDMAN

Excerpts from

Winning the Real War


For me, though, it is a disturbing thought that the Bush team could get itself so tied up defending its phony reasons for going to war — the notion that Saddam possessed weapons of mass destruction that were undeterrable and could threaten us, or that he had links with Al Qaeda — that it could get distracted from fulfilling the real and valid reason for the war: to install a decent, tolerant, pluralistic, multireligious government in Iraq that would be the best answer and antidote to both Saddam and Osama.

…Over 20 mass graves have already been uncovered in Iraq, and there may be as many as 90. One grave alone in Hilla is estimated to contain 10,000 people murdered by Saddam’s regime. Human Rights Watch estimates that there are 300,000 people missing in Iraq. President Bush is flailing around looking for Saddam’s unused weapons of mass destruction, when evidence of his actual mass destruction is all over the place in Iraq. Yet the Pentagon has done almost nothing to help Iraqis properly exhume these graves, prepare evidence for a war crimes tribunal or expose this mass murder to the world.

Eyes on the prize, please. If we find W.M.D. in Iraq, but lose Iraq, Mr. Bush will not only go down as a failed president, but one who made the world even more dangerous for Americans. If we find no W.M.D., but build a better Iraq — one that proves that a multiethnic, multireligious Arab state can rule itself in a decent way — Mr. Bush will survive his hyping of the W.M.D. issue, and the world will be a more hospitable and safer place for all Americans.