Bill Totten's Weblog

Friday, September 30, 2005

Katrina, Rita, and Peak Oil

by Richard Heinberg

MuseLetter 162 (October 2005)


Like just about everyone else, I was transfixed by news reports from New Orleans and the Gulf coast of Mississippi and Alabama during the week of August 29. My wife Janet grew up in New Orleans, most of her family members still live there (to the degree that anyone can for the moment say they do), and we visit the city every year. The scenes were heart-wrenching and mind-boggling: an entire modern American metropolis had effectively ceased to exist as an organized society. The tens of thousands of survivors who had been unable or unwilling to evacuate prior to the storm were utterly helpless as they awaited rescue, some of them reduced to looting to obtain food and other necessities, a few even joining armed gangs.

Soon the Internet began pulsing with stories of how the Bush administration had exacerbated the tragedy by encouraging the destruction of wetlands and barrier islands, by appointing FEMA heads with no experience in disaster management, by focusing the agency's resources on counter-terrorism rather than disaster relief, by refusing funds for upgrading New Orleans' levees, and so on. By the end of the week, mainstream media had begun picking up on some of these stories.

The damage to oil production and refining facilities, while serious, was seemingly (according to most media sources) rather quickly repaired or compensated for.

Then, in the last week of September, a second major storm - Rita - temporarily shut down nearly all refining and production capacity and damaged some infrastructure not already affected by Katrina.

The American Petroleum Institute says that 58 Gulf of Mexico oil and gas platforms and drilling rigs were damaged or lost as a result of the first hurricane. Port Fourchon, the hub for oil and gas production in the gulf was able quickly to be pressed back into service. The Louisiana Offshore Oil Port (LOOP), which is the only port in the nation designed to receive supertankers, was also soon operational, though it is still unclear if it will be able to work at full capacity because a complete inspection of the underwater pipelines connecting it to the mainland has yet to be completed. Altogether, there are thousands of miles of undersea oil and gas pipelines that will take weeks to inspect. If the overwhelming destruction of the wetlands and barrier islands of southern Louisiana and Mississippi is any basis for judgment, there is likely to be damage to many of these pipelines, which will require months to fix. In addition, 21 of the region's refineries were temporarily closed, with four likely to be off-line for many weeks or months (again, this is only the damage from Katrina). Relighting refineries is a process that takes about a month and requires large amounts of nitrogen delivered by pipeline or tank. Repair efforts will be hindered by the lack of a nearby functioning port or city from which to base operations. Intermittent communications in the Gulf region have slowed the recovery, as has a shortage of helicopters, boats, divers, and power.

The four refineries that remain shut after Katrina account for five percent of US gasoline production capacity. Damage to the Empire petroleum terminal, operated by Chevron, slowed the delivery of output from Gulf producers that were otherwise unaffected.

Katrina also inundated the important offshore oil service port at Venice, Louisiana, and significantly damaged natural gas processing plants that have the capacity to handle more than forty percent of Gulf output.

US gasoline refining capacity was practically maxed out before Katrina, and, as of September 24, was down about five percent from pre-storm levels. Some resulting shortfalls will last months.

Oil production from the Gulf was down by over half as of the third week of the month (about 800,000 barrels per day, or about ten percent of total US oil production capacity). The easiest of the repair operations - ones that consisted essentially of throwing switches and opening valves - were quickly completed; the remainder will be slow and arduous, and reduced flow rates are expected for a year or more.

All of this was before Hurricane Rita struck one of the most important oil-producing and -refining regions of the Gulf. We will not know the full extent of Rita's impact for many more days; however, the Financial Times noted on September 27 that

"Hurricane Rita has caused more damage to oil rigs than any other storm in history and will force companies to delay drilling for oil in the US and as far away as the Middle East, initial damage assessments show". The loss of drilling rigs means delays to new production projects stretching years ahead. It appears that at least one more large refinery will likely be down for weeks, and additional oil production capacity from existing fields will be shut in for up to eight weeks. The cumulative loss of oil production from shutdowns and damage to facilities is likely to amount to upwards of five percent of the year's expected total. These are not minor problems.


Consequences for Peak Predictions

For oil and gasoline the bottom line seems to be that - once the market has figured out how serious the shortfalls are going to be and that releases from the Strategic Petroleum Reserve cannot make up for them over the long term - prices will climb, putting downward pressure on economic activity in the US and then the world as a whole.

As a result of Katrina and Rita, forecasts for the global oil production peak must be adjusted. Whereas previously it was possible to envision a definable peak occurring perhaps in 2007, the picture now is less certain. Shut-in production from the Gulf of Mexico will gradually come back on-line over the next year. Meanwhile, high prices will have destroyed some demand and sparked worldwide economic problems (more about that in a moment). As a result, we are likely to see a few years, possibly even a decade, of bumpy plateau during which production and prices gyrate unpredictably, with political and economic events - and perhaps further natural disasters - serving as triggers.

A decade from now we will probably be able to look back and confidently say that the world has passed its all-time oil production peak. But it will be difficult to pinpoint a certain moment in time when geology alone caused the downturn. Instead, we will be reflecting on years of periodic chaos, during which production declines were always seemingly explainable by immediate events.

So far the media have failed to grasp the storms' consequences for natural gas availability and prices in North America. Here impacts are likely to be even more severe than for oil.

Up to 38% of US natural gas production from the Gulf was shut in by Katrina (about 3.8 billion cubic feet per day), according to the Minerals Management Service of the US Department of Interior; by now 78% is off-line as a result of Rita (only some of that results from damage; most is simply from prudent equipment shut-downs and employee evacuations). How much is likely to remain off-line for days, weeks, or months to come has yet to be determined, but having so much production shut down even for a few weeks will almost certainly result in supply shortfalls this winter. As readers of Julian Darley's excellent book High Noon for Natural Gas well know, North America is approaching a natural gas supply crisis anyway due to depletion (prices tripled in the past five years, from $2 per thousand cubic feet to $6); now gas is selling for over $13 with no ceiling in sight, even before the commencement of the winter draw-down season.

In some respects the natural gas market is less elastic than that for oil or gasoline. We use gas for home heating, chemicals, plastics, nitrogen fertilizer manufacturing, and to power peaking electrical generating plants. Gas shortages could therefore mean that some people will have difficulty affording to heat their homes, farmers will be unable to afford fertilizer, manufacturers will face much higher materials costs, and power blackouts will increase in frequency. Again, these are effects we are likely to see beginning this winter.

All told, the economic consequences of the two storms may be dramatically worse than those of the 1973 Arab oil embargo. In the months ahead, as the administration attempts to fund a $200 billion rebuilding effort in the Gulf on the back of the Iraq occupation and record deficits, and as the Fed responds to the inflationary pressure of high energy prices by continuing to raise interest rates, we are likely to see the US descend into economic turmoil, with higher levels of unemployment and high relative prices for food, transportation fuel, electricity, and natural gas for home heating. The airline industry is at risk and we will probably see at least one more major carrier (in addition to Delta and Northwest, which filed this month) enter bankruptcy before year's end. Soon air travel may no longer be the reliable and affordable means of transport we have come to expect and rely on. The trucking industry will also suffer.

And from these economic impacts there will be knock-on political consequences. George W Bush's approval ratings, now around forty percent, are unlikely to recover if the nation lurches into recession. Americans have extremely high expectations for their personal futures, and only the oldest retirees remember what it was like to live during a depression. Dashed expectations will quickly translate into disorganized fury. The American people will scan the horizon for scapegoats, and, as the crisis snowballs, civil unrest may ensue. Efforts to repress localized, sporadic uprisings will only deepen the growing social rifts between haves and have-nots. Dissention may occur within the government itself as well: the Bush administration may seek to provoke conflict with foreign enemies (or foment more terrorist incidents on domestic soil) in order to justify crackdowns and to win allegiance from the masses; however, large segments of the increasingly disgruntled Defense Department, CIA, State Department, and other agencies might resist efforts in this direction, given the fiasco that ensued from their somewhat grudging acquiescence in the invasion of Iraq.


A Gaping Wound

The head of International Energy Agency forecast on September 3 that Hurricane Katrina could set off a worldwide energy crisis. "If the crisis affects oil products then it's a worldwide crisis. No one should think this will be limited to the United States", Claude Mandil told the German daily Die Welt. That same day, 26 nations - including the United States - agreed to release onto the general market some sixty million barrels of oil, gasoline, and other petroleum products from their emergency reserves over the next thirty days. This nearly unprecedented move (the IEA also opened its taps during the first Gulf War) was surely a measure of the seriousness with which national leaders viewed the problem.

While the bringing to market of stored oil and gasoline temporarily calmed speculators and prevented what would otherwise have been immediate price spikes, it cannot balance the global supply-and-demand equation for more than a few weeks (the world uses 84 million barrels of oil each day, after all). The trick may be repeatable in the aftermath of Rita; however, once these nations' stores are gone, the world will have no cushion whatever in the event of further supply threats. In the best case, Gulf of Mexico oil and gas production will come back on line quickly and a few months or years will intervene before really serious shortages ensue. But in the worst case, Katrina and Rita may mark the beginning of the years- or decades-long inevitable unraveling of the petroleum-based industrial world system.

The United States is the center of that system. Think of New Orleans and the Gulf Coast as a gaping wound in the national body. Organisms need a steady flow of energy in order to maintain their ordered existence; a wound is like an intrusion of entropy within the system. When wounded, the body essentially takes energy away from other parts of itself to restore order at the site of injury. In ordinary times, nations as "organisms" do this very well. But in this case the timing is bad, as energy is scarce anyway (the wound was incurred at the onset of what will within months or years snowball to become a global energy famine); the nation has already been hemorrhaging trained personnel, materiel, and money in Iraq for three years; and the site of the wound couldn't be worse: it is in the part of the national body through which much of its energy enters (the region is home to half the nation's refining capacity and almost thirty percent of production). Thus it seems likely that, without deft leadership to muster popular cooperation in cutting demand and funding alternative sources, the available energy may not be sufficient to overcome the entropy that has been introduced; rather than being contained and eliminated, disorder may fester and spread.


Atlantis of the South?

Will New Orleans be rebuilt, and how? These questions are difficult to answer at the moment. Common sense would say that the city must be salvaged: the nation needs a port at the mouth of the Mississippi, and the port needs a city to support and service it. New Orleans is one of the few US cities with character and charm, and its residents desperately want to return to their homes. Moreover, the Bush administration needs the appearance of effectiveness, and a rotting and molding New Orleans offers more than a mere emblem of incompetence.

As of mid-September, it seemed that the only event likely to prevent rebuilding would be another strong hurricane hitting the Gulf this season. Nature didn't take long in sending that second storm.

Rebuilding, to the extent that it occurs, may proceed in the context of a national economy that is crippled, and a global complex system of production and trade that is starting to lose its battle against entropy.

Moreover, the unfolding reports of geo-ecological changes inflicted by Katrina on the wider southern Louisiana region suggest that New Orleans' survival in any recognizable form may be threatened by factors beyond politics or economics. Without wetlands and barrier islands - previously under attack by developers, now largely destroyed by the storm - the city will be even more vulnerable, capable now of being overwhelmed by much smaller hurricanes.
Before Rita, a battle loomed over the form that rebuilding would take: would the government put up homes for the tens of thousands of mostly black poor, or a vacation site for the well-off? Would New Orleans end up as a whiter, more Republican city? And would the administration merely use the immense recovery budget ($200 billion promised for Katrina alone) to line the pockets of campaign contributors like Halliburton?

Now, after renewed flooding from levee breaches from Rita, more questions may be raised as to how much of the city should be rebuilt. In any case, whether New Orleans ends up as a Creole Venice, a jazz-and-gumbo Disneyland, or a Spanish-moss Atlantis, it is unlikely ever to be recognizable by the majority of its former residents.


Deliberate Relocalization or Haphazard Disintegration?

During the week of the Katrina disaster a mass-mailed letter appeared in my box, obviously composed and sent before the hurricane was on anyone's mind (at the time the letter arrived, I was in Guatemala - one of the many beautiful and resource-rich but fiscally poor Latin American nations still run by remote control from Langley, Virginia). The missive was from the Middlebury Institute, which "hopes to foster a national movement in the United States" that will "place secession on the national political agenda; develop secessionist and separatist movements here and abroad; ... create a body of scholarship to examine and promote the ideas of separatism; and work carefully and thoughtfully for the ultimate task, the peaceful dissolution of the American Empire". The authors, Kirkpatrick Sale and Thomas Naylor, note that "the national government has shown itself to be clumsy, unresponsive, and unaccountable in so many ways" that "power should be concentrated at lower levels". They also point out that "the separatist cum independence movement is the most important and widespread political force in the world today", the United Nations having grown from 51 nations in 1945 to 193 in 2004.

Sale's and Naylor's effort seems quixotic, yet it may be one whose timing is uncannily opportune. The American people are looking to recent events in the Gulf and asking, "Can we rely on the Federal government for protection, service, and guidance?" While low approval ratings for Bush seem warranted (it is difficult to avoid understatement in this regard), they are also a danger signal. The man will most likely remain in office for the next three years, barring an unforeseen personal health crisis or another "lone gunman" scenario for which America is infamous. During that time, unless the soon-to-be-indicted (let us pray) Karl Rove can do something to inspire greater confidence in the Oval Office, the nation will suffer from a lack of common assurance in the legitimacy and competence of its leadership. Without the presence of a coherent opposition party, the consequence is likely to be a splintering of allegiances and a drift toward factionalism and regionalism. Sale and Naylor would no doubt say that this is a good thing (and, in principle, I agree), but in the instance the process will be messy to say the least.

A couple of insightful locutions have recently caught my ear - one from the lips of Permaculturist David Holmgren, who referred to the "drip-feed" of industrial society; another from Julian Darley, who said that "We humans are the only creature that does not live within walking, swimming, wriggling, or flying distance from its food". These are evocative and concise ways of summarizing our dependency on a social structure that is overly mechanized, incomprehensibly elaborate, beyond our individual control, and inherently unsustainable.

This structure is hideous in its impacts on nature, culture, and the human soul. But because it has almost fully replaced whatever self-reliant, subsistence, place-based cultures that preceded it, it has left us with no immediate alternatives. Unless we can recreate those alternatives very quickly, we will be in deep trouble.

We still need clean water, food, and shelter, just as our ancestors did. They supplied for themselves those necessities, which now come from inscrutable corporate or governmental bureaucracies. Electricity - which was a luxury only a few generations ago, and still is for large numbers in poorer countries - is now a basic necessity for nearly everyone in the developed nations. Electricity is not something a hunter-gatherer can go out and find or make (unlike water, food, and shelter), though it is possible for communities to generate it using intermediate-level technologies. The absence of electricity in a modern city throws life into ruin: nothing operates. The way most of us get electricity now depends on highly complex tools made of mined and refined materials made by still other elaborate tool systems energized by globe-spanning resource delivery systems, all embedded in complicated financial and social networks. The electrical grid is vulnerable to disruptions in any of those systems.

In short, the disintegration of large social structures - desirable though it may be for a raft of reasons - is entirely foreseeable, but is likely to entail more than mere discomfort unless we manage to undertake the process with unprecedented degrees of forethought and coordination.


The Next Disaster

No one can say there wasn't sufficient warning prior to Katrina. FEMA had for years included a hurricane-over-New-Orleans scenario in its top-three list of likely natural disasters facing the US. Scientific American had run a lengthy article discussing the potential damage resulting from the flooding of the city by a break in its levees. And the New Orleans newspaper, the Times Picayune, had published an extensive three-part series outlining both the risks and the actions needed to avert the worst of the consequences.

In the event, it was as though no one had ever thought such a thing could happen. By now, the story is well known: Though Louisiana's governor issued an immediate request for assistance, FEMA director Mike Brown waited until hours after Hurricane Katrina had already struck the Gulf Coast before asking his boss, the head of Homeland Security, to dispatch 1,000 employees to the region; Brown gave them two days to get there. FEMA's top officials were political appointees with little or no background in emergency management. Prior to his FEMA appointment, Brown himself had served for eleven years as chairman of the International Arabian Horses Association, where he spent a year investigating whether a breeder had performed liposuction on a horse's rear end. He was asked to leave that job. Soon after questions arose as to whether he had padded his embarrassingly thin resume, Brown was quietly forced to resign from his FEMA position (though he is still on the payroll).

In the event, hundreds died, while hundreds of thousands were rendered homeless. Tens of thousands were stranded in New Orleans with no way to evacuate and with no sources of clean water or food. Property damage continues to be calculated, with estimates in the low hundreds of billions of dollars. There was much that could not have been prevented, such as the overwhelming destruction of the forests of southern Mississippi. But there was much that could have been.

The response to Rita appears to have been far swifter - no doubt largely because of the ugly public-relations fallout from the administration's handling of Katrina. Is the government's reaction to the challenge of Peak Oil likely to resemble that of the former or latter calamity more closely?

As with Katrina, we can see Peak Oil coming from miles (or years) away. We have a government-sponsored report (the Hirsch Report from SAIC) which says that Peak Oil is inevitable, that it may have dire consequences, and that the government should give top priority to preparing for it. We have prominent industry leaders and analysts like Matt Simmons and T Boone Pickens saying that the peak is occurring virtually now.

Nevertheless, actual preparations on the part of government appear practically non-existent. No administration officials have publicly discussed the Hirsch Report. Investments in alternative energy supply, and in demand-reducing schemes, exist only as miniature projects serving the purpose of political window-dressing. In short, the US government appears to be preparing its citizens for Peak Oil in approximately the same way it prepared the citizens of New Orleans for Hurricane Katrina.

Is there are deeper pattern here? I think so. In my view, the US Federal government is quite literally terminally dysfunctional. There are all sorts of reasons for this. Many books have been written about the hypocrisy, ineptness, and even criminality of Washington's elite, and how matters of state managed to degenerate so utterly and completely during the past few decades and especially the past few years. But the bottom line, for me, is this: democracy is dead (if you think I'm exaggerating, please read Mark Crispin Miller's excellent and frightening essay "None Dare Call it Stolen" in the August issue of Harpers, available online at the www.harpers.org site), and the functionality of the government itself, as a guarantor of rights and entitlements, is nearly gone. The US leadership has given up on the republican (with a small "r") form of government and is preparing a totalitarian future for its citizens. It will soon be unable to deliver on its economic promises, built up over past decades; so, rather than admitting that fact and asking for a new consensus founded on shared but dramatically reduced material expectations, it is hunkering down for the inevitable class conflict. One can hardly write such words without experiencing strong emotions - principally rage, sadness, and fear. We Americans were brought up to admire the checks and balances among the branches of our government, and the guarantees of freedom and fairness in the Constitution.

Now we have the test case of Jose Padilla, a US citizen held in prison for years without benefit of charges or trial. The highest court to hear his case so far has held that the government may continue imprisoning him. Evidently the American judicial system believes that there are two Constitutions - one for peacetime (in which citizens are guaranteed a trial), and one for wartime (in which the President can summarily strip any citizen of all rights). Of course, the President can also decide when we are at war: after all, a state of war against Iraq - or against "terror", as if such a thing were possible - has not been declared by Congress (which has the sole power to do so, according to the Constitution), yet the courts agree with the President that a state of war nevertheless exists; given the fact that the Iraq occupation is likely to persist for many years, perhaps decades, this means the "peacetime Constitution" is effectively defunct.

Next stop for the Padilla case: the Supreme Court.

How I would have loved to be a Senator at the hearings for the confirmation of John Roberts as Chief Justice of the US Supreme Court (Roberts, of course, is one of the judicial proponents of the new and unprecedented citizen category of "enemy combatant"). I would have asked him, "Would it not be your job, sir, as Supreme Court Justice, to uphold the US Constitution?" Once I'd obtained his inevitable affirmative reply, I would have continued: "Then where in the Constitution does it say that all the rights of any citizen can be revoked by the President at his sole discretion? Don't you think that an interpretation of the Constitution that holds that the Constitution itself can be held null and void at the whim of the President must constitute the highest and most dangerous form of so-called judicial activism?"

Maybe one of the Democratic Senators questioning Roberts actually had the guts to ask that; I don't know: I wasn't able to listen to the hearings in their entirely. Ultimately it doesn't matter much. The deal is done; the Constitution is cooked. National elections are now a farce and the rights of citizens exist only at the pleasure of the Executive. That is the definition of a dictatorship. The only choice that may still be available to the American people is, Will their police state be administered by nasty, stupid people; or by nice, intelligent people? But even that choice is likely more illusory than real.

What's as important to realize as that we have a dictatorship is why we now have one. Surely, this can be seen as simply the latest twist in the same old game of power and corruption that's been playing itself out since the founding of the Republic - no, since the beginning of civilization itself. But there's more. Now the folks in charge realize that it will soon be impossible to maintain the entitlements that have enabled the US to function as a quasi-democracy for many long. If a minority is to preserve its comforts, this will be at the expense of shattered living standards for the majority. The only way to keep a lid on such circumstances, the elites have evidently concluded, is with brutal force. For a time, a large segment of the population can be cajoled into supporting the regime by cowing the media and shaping its messages, and by manipulating hot-button issues (religion, sex, and terrorism) in the political arena. But in the end popular support is optional.

I'm sorry if I sound dire, but I see no point in continuing to pretend that these fundamental changes to our society have not occurred, or are not occurring.

In short, it appears to me that the US government has neither the capability nor the intention of protecting its citizens from the impacts of the next disaster. Please, prove me wrong.


Lessons

Katrina tells us just how bad things could get if society disintegrates chaotically rather than cooperatively. And it tells us what we should do to avoid the worst of the peril.

First, place is important - both geographic and social. Be around people you trust - people with cool heads who know how to work with others. Try not to be in a place where folks are likely to become violent and desperate (that is, where they rely overwhelmingly on the "drip feed" and have no alternatives). And try to be in an area with soil, water, and weather that can provide for your needs and those of your family and community.

Anticipate events. When warnings appear, pay attention and respond.

Re-localize now, ahead of the rush. Don't wait to begin forming networks of mutual aid. After Katrina, it was volunteer local citizens groups that did the most effective rescue work. Only later did the Feds come in with helicopters and bullhorns, and in many instances they just got in the way.

Of course, with Peak Oil the breakdown will not be as sudden as it was in the case of New Orleans, and it hopefully will not be as complete. On the other hand, for Katrina victims there was the assurance (or illusion?) that their chaos was unusual and isolated, and that there was a still-functional outside world that could come to their assistance - not soon enough perhaps, but eventually. With Peak Oil, there will be no "outside" to come to the rescue. Everywhere will be some version of New Orleans.

At recent presentations - to city and county officials in Bloomington, Indiana, and Sebastopol, California; at the Second Annual Conference on Peak Oil and Community Solutions in Yellow Springs, Ohio; and at a prominent conference in Frederick, Maryland with Matt Simmons, Ken Deffeyes, and Representative Roscoe Bartlett - I have offered basically the same advice as contained in this essay. And I see increasing willingness, especially at the local level, to respond. But the challenge is enormous and time is short.

As a result of the two recent storms we seem to have been catapulted prematurely into an economically, socially, and politically volatile period. From here on out, there will probably be no more business as usual.

Richard Heinberg is the author of Powerdown - Options and Actions for a Post-Carbon World (New Society Publishers, 2004). 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 rheinberg@museletter.com for permission.

http://www.museletter.com/


Bill Totten http://www.ashisuto.co.jp/english/

1 Comments:

Post a Comment

<< Home