Bill Totten's Weblog

Sunday, July 31, 2005

Oil Addiction: The World in Peril - 3

by Pierre Chomat (Universal Publishers, 2004)

translated from the French by Pamela Gilbert-Snyder

Part I. Man's Egosystems

Chapter 3. The Saqqara Pyramid

We are no more aware of the energy we use than we are of the oxygen we breathe. We may notice some indirect effects - the warmth of a furnace fueled by heating oil, for instance, or the speed of a car - but we rarely associate them with energy. I have often thought that birds are probably unaware of the air that holds them up and makes their amazing acrobatics possible. It is the same with human beings and energy. We do not think about it, any more than we do about the number of angels that can fit on the head of a pin.

During my career I have had occasion to apply the greatest principles of thermodynamics. I have calculated the enthalpy of petroleum constituents and their entropy variations during combustion. I have worked with calories, kilowatt-hours, and Joules. I have applied the laws of physics set forth by our greatest scientists. I have even tried to analyze the behavior of hydrocarbon molecules, atoms, electrons, and protons. All without ever becoming aware of energy per se.

I have also counted the gallons of gas I have pumped into my car. I still did not become sufficiently aware of the preciousness of energy. I have worked with many people employed at oil refineries. None of them ever demonstrated any real awareness of the true value of energy either.

To help us become conscious of the ergamines existing all around us and, more importantly, to grasp the extent of their amazing capabilities, I have devised some simple exercises. The first involves a journey by plane.

Even if you have never flown on a plane, this exercise will be easy for you. Imagine for a moment that aircraft manufacturers designed planes so that jet fuel was stored in 42-gallon barrels among the passengers instead of hidden in fuel tanks in the wings. The number of barrels required for each trip would be loaded before departure, just like in-flight meals. Now, imagine that you are sitting on a plane traveling non-stop from San Francisco to London. Look around you! What do you see? If you are flying coach, you will see three barrels of jet fuel on your left, and three more on your right. The entire compartment is arranged this way, with three barrels of jet fuel on either side of every passenger. If you are flying first class, you take up twice the amount of space and will therefore see six barrels between you and the passenger on either side of you.

When you arrive in London, the barrels will be almost empty. And, of course, the airline will have to fill them again for the return flight. If you would rather not travel as far as London, try a shorter flight, between San Francisco and Montreal, for example. On the outgoing journey you will need two barrels for yourself. To travel to Mexico City, you will need only one.

Since I first devised this little exercise, I have been unable to take my seat on an airplane without thinking of the ergamines who boarded before me. From San Francisco to London, for myself alone, the equivalent of five hundred thousand (500,000) man-days of work are consumed through the ergamines. And I often travel purely for pleasure.

Imagine now, if you will, that you are flying from New York to Cairo with three hundred other tourists, all of whom are going to visit the pyramids of the ancient pharaohs. On the outbound journey alone, the aircraft will consume, in the form of jet fuel, an amount of energy roughly equivalent to the energy expended in physical labor by all the tens of thousands of Egyptian fellahs who erected the Saqqara step pyramid [i]. Visitors to this monument almost certainly do not make this connection. They only know that the ancient fellahs, through enormous effort, were able to give their monarch, King Djoser, a tomb fit for a god. Like the rest of us, these tourists are unaware that they belong to an oil-addicted society.

Now I would like to share an experience that is more concrete. During the 1960s, I was working in Paris and traveled several times to Bangladesh, then known as East Pakistan, to assist with the construction of an oil refinery. The facility was being built near the city of Chittagong on a narrow strip of land bordered by the sea on one side and the Karnaphuli River on the other. Once on site, I felt as if I were more on water than on dry land. The earth was so saturated that measures had to be taken to prevent the ground from sinking under the weight of the refinery once it was completed. To accomplish this, we constructed a mound of earth about 25 feet high on the site of the future refinery. Its weight exerted enough pressure on the soil to force the water underneath to rise to the surface through wells that had been dug previously. Once the site had been "dewatered", the mound of earth was removed. Although these very deep wells were drilled by machine, the mound of earth was built by hand using dirt transported in baskets on workers' heads. Approximately two thousand Bengalis took part in this undertaking over a five-month period. Yet the enormous expenditure of energy in physical labor required to accomplish this task was equivalent to only half the energy contained in the three barrels of jet fuel that were necessary to carry me by plane from Paris to Chittagong. I had not yet brought the ergamines out of their anonymity at that time; if I had, I surely would have blushed for shame.

There is no doubt that we belong to an oil-addicted society. These examples are easy ways to help us to understand that if human beings can "fly", it is only because ergamines are cheap. We do not pay for the actual value of their labor. In this way, they are truly our slaves.

BOX: The amount of fossil energy - oil, gas, coal - consumed by human beings on Earth is so enormous that if we converted it all into a river of oil, it would flow at a continuous rate of 80,000 gallons per second, or the equivalent of the Seine in Paris. Its output would even exceed the average flow rate of the Saint Lawrence River at Niagara Falls, on the American side. However, unlike these rivers which are constantly replenished, the stream of ergamines will soon run dry.

Although these mental gymnastics help us to visualize the enormity of our energy dependence and gluttony, they do not necessarily show us the colossal amount of labor provided by our little ergamine Cinderellas every day on our behalf. For that we must turn to Giovanni and Anna Gioletti on their beautiful island of Capri.


[i] The Saqqara step pyramid was originally 200 feet high and rested on a base approximately 394 feet long by 360 feet wide.

Bill Totten

'Peak oil' enters mainstream debate

by Adam Porter in Perpignan, France

BBC News (June 10 2005)

Is global oil production reaching a peak?

A few years ago only a handful of geologists and academics were considering such a possibility.

But now it appears even governments are taking a serious look at the subject.

The question is occupying more and more minds around the world.

It could happen soon.

A French government report on the global oil industry forecasts a possible peak in world production as early as 2013.

Don't mention it

The report 'The Oil Industry 2004' takes a long look at future production and supply issues.

But perhaps what is most interesting about this Economics, Industry & Finance Ministry report, is that it actually mentions a possible production plateau at all.

Even one year ago it was unheard of to find the subject mentioned amongst government ministries or financial institutions.

Now banks such as Goldman Sachs, Caisse D'Epargne/Ixis, Simmons International and the Bank of Montreal have all broached the subject.

"They are being forced to by circumstances", says Professor Richard Heinberg, author of 'peak oil' books Power Down and The Party's Over.

"They have relied on optimistic data and rosy outlooks that are being proven to be incorrect".

Nevertheless, some analysts disagree with the notion of any peak in oil production, also known as 'Hubberts curve', after the geologist M King Hubbert who first argued the case.

Deborah White, senior energy analyst at Societe Generale in Paris, says that "we have heard these arguments about 'peak oil' since the idea of Hubert's curve came into being.

"We don't endorse the idea at all".

'Peak oil' mentioned

And yet, the French report, perhaps the most open government dossier yet, questions the viability of long term oil production.

The report's second chapter 'Global Exploration and Production' runs a series of differing scenarios based on current forecasts.

The scenarios differ according to projected demand increases, from 0% to 3% per annum, and possible new field discoveries, between zero and fifty billion barrels a year.

At a rate of 3% increase in demand per year and annual finds of ten billion barrels, the ministry report states 2013 as "the time of maximum production or 'peak oil'".

That would mean the world's oil consumption would reach its highest point at around 97 million barrels per day.

Forced to react

It is also very unusual to find a government report using the wording 'peak oil'. This is a phrase often used to describe the theory of a global oil production plateau, after which production would begin to decline.

Chris Sanders spoke at the recent Association for the Study of Peak Oil conference and is director of international finance consultants Sanders Research.

He believes 'peak oil' is major threat to modern economies.

"There is only so long politicians can ignore a geological problem, and it is a geological one", he says.

"Governments have had a great chance to take the lead on this situation, but they have not taken it. Now they are being forced to react.

"Why? Because it is very probable that we are nearing 'peak oil'."

The French report uses the phrase, in English, and repeats it on no less than four occasions.

Outdated data

The best case scenario the report lays out is rather far fetched, with a 0% increase in world consumption, at only 79 million barrels per day, with annual finds of 50 billion barrels of new deposits per year.

That makes 'peak oil' arrive in 2125.

Unfortunately the report's figures are already outdated. The world consumed 84.7 million barrels per day in the first quarter of 2005.

International Energy Agency (IEA) forecasts - traditionally regarded as conservative by the markets - put demand at around 86.1 million barrels per day for the fourth quarter of this year alone.

Its figures put demand growing at 2.2% in the first quarter of 2005.

This means average consumption for 2005 would come out at 84.3 million barrels per day. Plus, in the past thirty years, new discoveries of oil have averaged about 14 billion barrels per year, with recent discovery rates well below that.

Despite not endorsing a production peak, Ms White is also factoring in demand growth "of around 1.5 million barrels per day over the next five years, which will mean a total demand of around 91.8 million barrels per day in 2010".

Different definitions

The French report also echoes a fundamental problem at the heart of the oil business, namely data transparency.

Without accurate audited data, discovery forecasts, forward pricing and reserve calculations become a matter of debate rather than science.

This year alone the International Monetary Fund, the G7 and IEA have all called on Opec countries and Russia to open their fields to independent scrutiny.

"The definitions of oil reserves are different in many countries", the report observes.

"The capacities of sustainable production by Opec countries are very difficult to estimate. It is impossible to know production levels without waiting, at best, several months."

The report also goes on to look at the daunting levels of cost needed.

Firstly to extract current reserves but also to explore for new deposits.

"Somewhere in the region of $900 billion will be needed by 2013 alone to develop [existing] reserves", it says.

"This massive investment will double as one will need to add exploration costs to this figure as future production from 2013 to 2030 will depend on it which means that to be successful, around $250 billion a year will need to be spent".

"Ruinously high oil prices are making governments look at the subject", says Professor Heinberg.

"For example, when they are faced with whole industries like the airlines going bankrupt, it forces them to react, but they may be too late".

Suburban blight

Ms White takes the problem from a different perspective.

Rather than a costly search for more oil, she recommends conserving its use.

"We are at the wrong stage of the economic cycle for a recession that would cut demand", she says.

"What is very important is conservation, especially in transport. Raising taxes on fuel, introducing toll roads and bridges into major cities for example, but also stopping the spreading of suburbs ever further from city centres.

"Controlling suburban blight is one way to slow oil consumption until we are a society no longer dependent on oil".

Story from BBC NEWS:

Published: 2005/06/10 04:29:32 GMT

Copyright BBC MMV

Bill Totten

Saturday, July 30, 2005

Easter Island, USA

Every society responds or fails to respond to its problems ... Why doesn't a society respond to, or even notice, problems that look obvious? You would think it's not a good idea to chop down all the trees and cause soil erosion ... how could they be so dumb? ... What are they going to say fifty years from now when they look back on the United States in 2005, with its well-known energy problems, continuing to waste energy? Not dealing with its population problems or its water problems, how obvious. Soil problems, how obvious. Climate change problems, how utterly obvious. - Jared Diamond on Collapse: How Societies Choose To Fail Or Succeed

Prices Cause Concern, but Little Change in Behavior or Laws

by Jad Mouawad and Matthew L Wald

The New York Times (July 12 2005)

When oil prices spiked in the early 1980s after the Iranian revolution, Jared Nedzel gave up his 1978 Pontiac Trans Am, an emblematic American muscle car, for a smaller, less extravagant Toyota Corolla. He was on his way to Cornell University to study civil engineering and he needed a more economical car.

Today, Mr Nedzel, a 44-year-old software developer who lives near Boston, owns a Toyota 4Runner, a sport utility vehicle he bought two years ago. It gets about 17.5 miles per gallon, as much as the Trans Am did, and he uses it for his 45-minute commute to work and for driving near the beaches of Martha's Vineyard to get to his favorite fishing spots.

Gasoline prices have spiked again, to more than $2.25 for a gallon of regular in Boston last week, just above the national average, according to the AAA. But energy costs do not weigh on Mr Nedzel's mind. "Just another gas crisis", he said, expressing an opinion held by many others. "I'm not hyperventilating about it".

For Americans, oil shocks no longer seem so shocking.

The Arab oil embargo of 1973 and the Iranian revolution in 1978-79 exposed America's vulnerability to powerful forces outside its control, forces that sent fuel prices to record levels, prompted anger over gas lines and led to bookend recessions that defined a decade of economic turmoil.

By 1980, the energy crisis and the inflation it spawned had left Americans in a vindictive mood, contributing to the re-election defeat of President Jimmy Carter, who had promised to wage the "moral equivalent of war" against dependence on foreign oil.

But the latest escalation in oil prices - to as much as $60 today from less than $30 a barrel a little more than two years ago - has produced a much more limited response. Energy legislation that President Bush is pressing Congress to pass this summer would bring little relief. And while Americans say in polls that they are deeply disturbed by high gasoline prices and looking for someone to blame, most people continue to drive just as avidly as before; purchases of gas-guzzling sport utility vehicles have slowed but there has been no significant shift to more fuel-efficient cars.

Furthermore, gasoline consumption has continued to rise, up one percent in May compared with the same month last year.

James R Schlesinger, whom President Carter selected as the first energy secretary, in 1977, said in a recent interview that the country's basic energy approach can best be summed up this way: "We have only two modes - complacency and panic".

The earlier oil shocks produced remarkable changes, including the rise of the Japanese auto industry as Americans turned to smaller, more efficient cars out of choice and necessity. With carrots and sticks, the United States managed to cut, temporarily, energy use per person and to scale back the share of oil in its overall energy mix.

The federal government established a strategic petroleum reserve as an insurance policy against global supply disruptions, set a national 55 miles per hour speed limit and spent billions - much of it wasted, however, on alternatives like shale oil that proved far too costly, particularly after crude oil prices fell when economic recession tempered the demand for energy.

But this time around, the government has done almost nothing to reduce the nation's vulnerability to a sudden interruption in oil supplies. Even the advocates for the long- stalled energy bill that has finally passed both houses of Congress - though in radically different forms - acknowledge that neither version of the measure will be effective.

This month, the House and the Senate will attempt to hammer out their differences and produce the first piece of energy legislation in four years, one that President Bush hopes to sign as early as August.

Crude oil imports have doubled over the last three decades, and now account for nearly two-thirds of the oil Americans burn. Before the 1973 oil embargo, imports accounted for only about one-third of America's energy consumption. In the same three-decade period, oil demand in the United States has grown by eighteen percent while domestic production has continued on a slow and probably irrevocable path of decline.

The problem is not the latest price rise, which, adjusted for inflation, is still well below the peak in early 1981, when oil cost the equivalent of $86 a barrel in today's dollars; gasoline, released from price controls, briefly sold back then for the equivalent of $3 a gallon. And it is not just imports; even if the country produced enough oil to meet its domestic needs, in a global economy a price shock would still be felt in the United States.

The fundamental problem, experts say, is that Americans depend almost exclusively on relatively large and heavy private vehicles, virtually all of them running on gasoline, for crucial daily tasks like getting to work and taking their children to school. "Americans live in a car-driven culture where they want to do as much as possible as fast as possible", said Amy Myers Jaffe, the associate director of Rice University's energy program in Houston. "I can drop off my dry cleaning, pick up my prescription drugs, do my banking and buy my lunch, all without leaving my car".

Because of this high dependence on private cars, the United States continues to use oil considerably less efficiently than any other rich industrial country. Yet most of the proposed policy remedies are meant only to subsidize the production of oil, not use less of it. Many of the rest are focused on electricity, little of it produced by oil.

Despite the lessons of the past, the United States remains particularly vulnerable to a decision by a crucial supplier - for example, the anti-American government of Venezuela - to cut its oil exports, as Saudi Arabia and other Arab nations did in 1973.

Even more critically, Americans can no longer count on abundant supplies of cheap fossil fuels, because developing nations like China and India are emerging as major competitors for resources. This is occurring just as global oil production may be hitting a plateau, a growing number of specialists say. Worldwide output, now about eighty million barrels a day, may fall short of the hundred million barrels a day that energy officials are counting on reaching within the next decade, they say.

Oil prices fell after previous shocks because recessions reduced demand. This time around, galloping consumption has left many authorities believing that the world may face a long period of high prices and tight supplies.

So who is responsible for the current situation? The evidence shows that consumers, oil suppliers, lobbyists and politicians all have played roles.

"A message of the late 1970s is we must prepare for the day of reckoning, the transition away from oil", said Mr Schlesinger, who also served under President Richard M Nixon as defense secretary and director of the Central Intelligence Agency.

But it did not happen then, he said, and "I doubt we're going to do it now".

The Consumers:
What Has Four Wheels And Guzzles Gasoline?

The failure to control consumption is most glaring in the country's transportation sector, which now represents two-thirds of all oil demand in the United States and is solely accountable for the growth of the nation's oil thirst over the last three decades. Each day, America's fleet of more than 200 million cars guzzles eleven percent of the world's daily oil output. Gasoline consumption has risen 35 percent since 1973, compared with a nineteen percent increase in overall crude oil consumption.

The growth comes mainly from light trucks, including sport utility vehicles, which account for almost half of all cars sold in the United States. For many consumers, the advantages of an SUV - size, power and an increased sense of security from driving a taller vehicle - largely overshadow one of their main drawbacks, higher fuel consumption.

"Don't blame SUV drivers", said Mr Nedzel, the 4Runner owner. "The marketplace has changed since the 1970s, and carmakers have adapted and people's habits have changed. For me, there isn't a hybrid that would get me where I want to go."

And while he says he would be willing to tolerate higher gasoline taxes, Mr Nedzel opposes more stringent fuel efficiency standards. "That's like having an obesity problem", he said, "and being told you need a smaller shirt".

The Industry:
Supply and Demand Isn't What It Used to Be

On a warm, sunny day in February, David J O'Reilly, one of America's top oil executives, stood before 200 energy leaders, analysts and bankers in Houston to lay out what he considered the world's new energy quandary.

"The most visible element of this new equation", said Mr O'Reilly, the chief executive of Chevron, "is that relative to demand, oil is no longer in plentiful supply. The time when we could count on cheap oil and even cheaper natural gas is clearly ending."

That's a challenge the oil industry is struggling to meet. Major oil companies are fast running out of places to invest for new supplies of oil since most of the world's reserves are in countries that are either wary of foreign investors or, because of war or sanctions, shut off to American oil concerns.

At the same time, the oil industry is waking up to the growing challenge of Asian rivals who are seeking to secure access to their own reserves around the world. Mr O'Reilly experienced this aggressive new stance first-hand recently: the China National Offshore Oil Corporation is seeking to buy Unocal with an unsolicited $18.5 billion bid and thwart his own offer.

"The main question is access to resources", said Daniel Yergin, chairman of Cambridge Energy Research Associates, an industry consulting firm. "It's the dominant issue that hangs over the entire industry, whether you're talking about Russia, the Middle East, or off the shores of the United States".

In contrast to previous oil shocks, which were caused by unexpected limitations on supply, today's sharp rise in oil prices is almost entirely driven by increased demand, not just from the United States but also from China, India and elsewhere.

According to Mr O'Reilly, it took 125 years to consume a trillion barrels of oil; the next trillion is likely to be consumed in just 35 years.

To many in the industry, the only realistic alternative is to expand the search for oil, even to areas that are currently closed to drilling, including the ocean off the coasts of California and Florida and the coastal plain of the Arctic National Wildlife Preserve in Alaska.

"We're a spoiled nation", said James T Hackett, the president and chief executive of the Anadarko Petroleum Corporation and a vocal advocate for increased domestic production. "Because this is such an important national issue, you shouldn't allow yourself to get into a crisis before acting".

But many outside the industry say that intensive exploration of the United States over more than a century has found almost all the oil there is to find, so reversing the decline in domestic production through new discoveries will prove impossible. There is also some doubt about whether oil producers can increase world output enough to keep up with the expected growth in demand.

"Oil supplies will diminish, that's geology", said Kenneth S Deffeyes, a professor emeritus of geology at Princeton University and the author of "Beyond Oil: The View From Hubbert's Peak" (Hill & Wang, 2005). Professor Deffeyes predicts that global oil production will reach its peak around Thanksgiving Day and decline after that. "The negligence comes from doing nothing about alternative fuels or conservation measures over the past twenty years. Now it is too late. The oil is gone."

After previous disruptions, as when the Organization of the Petroleum Exporting Countries took control of their oil resources from foreign oil companies like Chevron in the late 1960s and early 1970s, those companies managed to rebound when high oil prices let them develop high-cost regions like the north slope of Alaska and the North Sea. But the price collapse of the 1980s led to nearly two decades of oil oversupply that discouraged additional investments.

In recent years, oil executives say they have made discoveries in Angola, Nigeria, Libya, Kazakhstan and Algeria, to name a few countries. The industry hope is that increased exploration and more intensive efforts at existing oil fields will enable producers to expand output enough to keep up demand, preventing prices from soaring and sustaining economic growth around the world.

"There's still plenty of room to play here", Mr O'Reilly said in an interview in Houston after his speech. "In the last decade, there's been more opening than closing. The pendulum swings in this business."

The Politics:
Ambitious Proposals Stuck in the Beltway

When Bill Clinton was campaigning in New Hampshire in early 1992, the cost of oil was very much on voters' minds. The economy was weak and the third energy scare of the late twentieth century - Saddam Hussein's invasion of Kuwait in 1990, which shut down nearly 3.4 million barrels a day of crude oil output for nearly a year - was still a powerful memory. The last of the Kuwaiti wells set aflame by the retreating Iraqis had been put out only a few months earlier.

But by the time President Clinton took office in January 1993, the price of crude oil was much lower and falling.

Passing an energy bill was not on the administration's agenda, but putting one into practice was. Congress had approved an ambitious law in 1992 intended to promote alternatives to gasoline. The goal was for ten percent of the vehicle fleet to be capable of running on something else by 2000; by 2010 it was supposed to be thirty percent.

Today, the number is still under one percent.

"We did the best we could under the circumstances", Mr Clinton said in a recent interview, "but there was minimal interest, the economy was growing like crazy, there was no inflation and oil was cheap".

By 1994, the price of crude oil bottomed out at less than $16 a barrel, making it impossible to save money by switching to something else. Low gasoline prices, combined with a rapidly improving economy, brought an explosion in the number of vehicles, to nearly one per driver. Many more of the new vehicles were SUV's, pickup trucks and minivans, all gulping fuel.

As part of his deficit-reduction program, Mr Clinton managed to push through an increase in the federal excise tax on gasoline to 18.4 cents a gallon, from 14.1 cents. But he had to abandon a much more ambitious proposal to raise energy taxes across the board as part of an effort to limit global warming and control pollution from fossil fuels.

"I hadn't run on it, and hadn't made any kind of foundation to do anything on it", Mr Clinton said. "It was sprung on Congress", he added, sounding regretful.

Despite the retreat on energy taxes, the vote on the budget bill was still so close in the Senate that Vice President Al Gore had to cast the deciding vote. There was never any chance of achieving anything close to the taxes levied in Europe, where consumers pay up to $5 a gallon for gasoline, mostly due to taxes.

"In Europe, people are less dependent on cars, they use smaller cars, and a gas tax wasn't as controversial as it would be here", Mr Clinton said.

The atmosphere for cutting oil consumption might be better now, he said, than it was during his tenure. "There is a lot greater awareness, even though we're moving away from 9/11, of our vulnerability", he said. "We've got to get a vehicle fleet that doesn't depend on oil as much".

But given political constraints, which block any serious effort at fuel efficiency or raising energy taxes, the government is stymied, according to Philip R Sharp, a veteran of Washington's energy wars and an Indiana Democrat who served in Congress from 1975 to 1995.

"We cannot in any rapid fashion or cheap fashion have a radical impact", said Mr Sharp, who drafted large parts of the 1992 energy bill that sought to wean the nation away from gasoline. "It is very hard for public policy makers to grasp how large this marketplace is. It's gigantic."

Copyright 2005 The New York Times Company

Bill Totten

Oil Addiction: The World in Peril - 2

by Pierre Chomat (Universal Publishers, 2004)

translated from the French by Pamela Gilbert-Snyder

Part I. Man's Egosystems

Chapter 2. Ergamines

In 1980, during a long stay in the Middle East, I once distracted myself by calculating the actual amounts of energy that human beings derive from oil, or black gold, as I like to call it. Maybe my subconscious was prompting me to justify my presence there. At any rate, through these simple calculations I discovered that one drop of oil, weighing just one gram, or one thirtieth of an ounce, contains as much potential energy as a hard-working ditch digger can offer over the course of an entire day! As we know, all it takes to reap the benefits of this easy energy is a cleverly designed machine. I now clearly understood how, with so many drops of oil being burned in so many of our machines, we can perform work that we would have never dared to undertake using only human power.

Bowled over by this discovery, I decided then and there to bring the drop of oil out of its obscurity by giving it a name: I called it the ergamine, from the Greek "ergon", meaning work, and the French "gamine", or "little girl". I began using this word to refer not only to the drop of oil, but also to its esteemed cousins, the natural gas bubble and the lump of coal, all of whom are little Cinderellas at work.

BOX: Physical work cannot be performed without some form of energy consumption. Therefore, energy represents potential labor and is measured in the same units as work: calories, kilowatt-hours, or Joules, for example. Energy is available in numerous forms and can be generated in a variety of ways. When fossil fuels are burned, they generate thermal energy. Until recently, energy was provided primarily by human beings or animals. However, with the advent of fossil fuels - mainly oil, coal, and natural gas - "labor-saving" devices can take over many of our tasks. Fossil fuels offer tremendous work potential. For instance, the thermal energy available in one drop of oil, weighing just one gram (or 1/30th of an ounce), is approximately 10,000 calories, or ten kilocalories. This is equivalent to the amount of work a laborer can accomplish during a full work day. [1]

Nothing before had ever led me to make the connection between the human being and the drop of fossil fuel, between the master and the slave. Not the tons of gasoline I had burned on the highway, not the years I had spent as an oil industry professional, not even my years as a student, although they had been almost entirely devoted to this precious liquid.

This revelation changed the way I perceive our entire society. Although previously I had made the connection between energy and petroleum, I had never appreciated the full capacity of its power. Since then gasoline and natural gas are no longer just mere necessities to me, available for mass consumption. I began to understand black gold's intrinsic value, a value much greater than that of yellow gold. I also began to understand the meaning behind numerous events in recent history.

Unfortunately, as we know all too well, in order to exploit the potential of this little drop of oil we have to burn it. Its two-legged counterpart, on the other hand, can always renew his energy potential with a hearty meal - something he takes pleasure in besides - and a good night's sleep. But our ergamines must be consumed in order to release their energy, and they do not exist in infinite supply. Ergamines were formed from organic matter which accumulated at the bottom of lakes or inland seas and was buried under sediment in oxygen-deprived environments. This process took millions of years. Ergamines cannot be renewed at the same rate at which they are presently being consumed. The few sites at which hydrocarbons [a] are currently being formed, such as at the bottom of Lake Kivu [b] in Africa, are only able to supply fuel in quantities that are insignificant when compared with the need generated by our oil-addicted appetites.

But, consuming too many ergamines has created another problem for humanity. As they burn, ergamines release carbon dioxide, or CO2, into the atmosphere, where it remains too long, causing global warming. I will return to this truly inconsiderate gas later and spell out the case against it.

The bottom line is that ergamines have become our source of physical power, our slaves, to whom we assign most of our material tasks. They transport us - everywhere. They run most of our industries. They heat our buildings. They feed us - agriculture is one of their major domains. They carry our products to market, often to distant continents. In many places they produce the electricity needed to run our machines. They even sweep our streets. They are also transformed into chemicals used in cleaning and gardening products, or paints and plastics used to decorate our homes and clothe us. They are also used in some of our medicines. In short, without them, what would become of us?

But ergamines give us more than goods and services. They mean much more than that to us. They are our source of economic strength and political power, and in this regard ergamines become supremely important to industrialized societies. A nation's economic power is directly proportional to the amount of energy that it consumes [2]. Although the United States contains only 4.5% of the world's population, it consumes 25% of the world's energy, and we all know how powerful America has become. The twenty-five countries belonging to the European Union represent just 7.5% of the world's population but consume an additional 19% of the world's energy. At the other end of the spectrum, India, home to 17% of humanity, uses only 3% of Nature's energy reserves [3]. Paradoxically, it is not the size of these nations' populations that determines the relative strength of their leaders' voices; it is the hidden power of their energy slaves. The president of France, who speaks for sixty million people (and the four hundred billion ergamines that assist them daily), is heard constantly around the world, while the president of Bangladesh, who speaks for a population of Bengalis that is twice as large, is almost never heard at all. His people are served by only a handful of ergamines capable of putting on only a tiny industrial show that impresses almost no one.

The number of energy slaves at a nation's disposal also determines its standard of living. Obviously, not all of the Earth's inhabitants are equally served. The countries of North America, with, on average, more than 20,000 ergamines assisting each citizen daily, are the best off, followed by the other industrialized nations. And although the Brazilians may be far behind with their mere 2,000 ergamines per person per day, they are still well-off compared to the Madagascans, each of whom has only 200 little energy fairies to assist them daily on their beautiful island, and the Ethiopians who, with only 30 ergamines per capita per day, cannot do much more than build small fires with a handful of straw to cook their meals. But the record for simplicity and natural living probably goes to the Afars of East Africa's Rift Valley. They have no ergamines at all. Sometimes they are lucky enough to have a donkey for company, with whom to watch the stars, discuss the weather and extol the beauty of the night sky. And yet their country is probably the one in which the first hominids began to walk on two legs.

Ergamines are a force sought after by many nations. To guarantee a supply of hydrocarbons the industrialized world has imposed its will on many oil-producing nations, particularly in the Middle East. America went ahead with its war against Iraq. Although it cannot be minimized, chances are that this conflict is only one small episode in the great drama that will unfold when our dear little ergamines become rarer and can no longer be consumed as rapaciously as they are now.

For now, it is certain that the people of the Northern hemisphere have yet to realize the extent of the power that they derive from Nature's litte Cinderellas. Nor do they realize the awesome responsibility their ancestors assumed some two hundred years ago when they took the deliberate step of binding human progress ever after to the ergamine.


[1] The amount of work that a single drop of oil can perform is equivalent to one day of hard physical labor by a human being using a shovel to lift 2 tons of sand (or 4,400 lbs) to a height of 2 meters (or 6.6 feet). 2000 kg x 2 m x 9.81 m/s2 = about 40,000 Joules = about 10 kilocalories. (9.81 m/s2 is the value of the acceleration of gravity). Motors are not very efficient; they transform no more than one third of an ergamine's potential thermal energy into actual mechanical energy. In comparison, less than one person out of three in the world performs physical labor today. Even when these factors are taken into account, the amount of work obtained from one ergamine can still be considered as being equivalent to one day of physical labor by one human being.

[a] Most substances that we encounter in our day-to-day lives are made up of small units called molecules. A molecule is a combination of two or more atoms held together in a specific shape by physical forces. Hydrocarbons consist of those molecules that are composed solely of hydrogen and carbon atoms. This class of chemical compounds is comprised essentially of fossil fuels (for example, oil, natural gas) and their derivatives.

[b] Lake Kivu. The rivers that feed Lake Kivu, which straddles the border between Rwanda and the Democratic Republic of the Congo, contain large amounts of organic matter. These impact the lake by depleting it of oxygen and forming CO2. In addition, methane gas, CH4, is continuously generated within the lake, making the place a localized source of hydrocarbon

[2] Michael Economides and Ronald Oligney, The Color of Oil, (Katy, Texas: Round Oak Publishing Company, 2000), 11.

[3] Electronic document accessed at Geohive population,
and Geohive energy,
December 2002.

Bill Totten

Friday, July 29, 2005

Oil Addiction: The World in Peril - 1

by Pierre Chomat (Universal Publishers, 2004)

translated from the French by Pamela Gilbert-Snyder

Part I. Man's Egosystems

Chapter 1. Oil Addicts

The ability of the first humans to make fire is at least partially responsible for their survival among other animals better equipped physically to succeed in the competition for life. But we, Homo sapiens, have not stopped at mere survival. Control of fire has allowed us to develop technologies that make us the dominant species. Fire has become our primary force.

Many theories have been offered to explain how human beings got their "fire genes", but one thing is certain: since the end of the 19th century, the industrialized world has run on fossil fuel. It has consumed, without restraint, the coal, petroleum and natural gas that the Earth had been quietly storing for millions of years, resources the Earth would need as many years to regenerate. It descended upon these resources, its fountain of power, like a plague of locusts on a corn field, selfishly and without qualms. And it does not intend to leave the smallest scrap, the slightest drop, the tiniest bubble - as if the very future of humanity depended on this great scouring-out. Our world has gone energy-mad. Who can deny it?

And yet, not so long ago - less than six thousand years for the early inhabitants of Mesopotamia, but barely two centuries for the natives of California and Australia - our species, Homo sapiens, was still living in the wild with only a few sharpened rocks for tools. Our sapiens ancestors were in all likelihood predators, who, like other predators, were content to take whatthey needed and no more.

But it did not stay that way. When Man began domesticating animals on the banks of the Euphrates, he was in reality beginning the domestication of Nature itself. His conquest of the horse still fell within the bounds of the natural realm. But when he harnessed the forces of fossil fuels just a few centuries ago with the invention of the steam engine, Man suddenly took off on a new trajectory. He had discovered an unprecedented means of advancing. Since then, the energy that he has drawn from the Earth's natural resources has been a sort of magic potion, to which, there is no doubt, he has become utterly addicted.

This story is better known under the grand title of the "Industrial Revolution", which began first in England around 1850, then spread to continental Europe, the United States, Japan, and a few other nations, all of which became its great adherents and promoters. Other countries beyond this circle of "haves" have followed the movement more reluctantly and are still debating how much materialism they can accept without losing their identities. These are the so-called "developing nations", in which such debates have, in some cases, even sparked civil wars. Still others have been left out of the race entirely and live as they always have; these countries are relegated peremptorily to the "underdeveloped nations" club.

As a result of this revolution, Homo sapiens made a giant leap forward. Our desires however have become immoderate. In order to satisfy them we plunder the Earth of its riches. The advent of energy ushered in the "Age of excess", in which our species revels. The desire for more propels us to acquire significantly more than we need. Our excess is a form of collective insanity, which is at the same time unacknowledged and encouraged. Yet our way of life, built on a foundation of exhaustible natural resources, is transitory. The blind excess and materialism to which we have succumbed now threaten our very existence.

If we stop and seriously consider our Western way of life, the mind reels. It is as if life cannot be just life, without all the material trappings. Not very often, but sometimes, when we pause to catch our breath a little, we ask ourselves existential questions such as, "Who are we really?" or, "Where are we going?" But our unshakable belief in human infallibility, or perhaps simply our limited intellectual capacity, prevents us from questioning the oil-addicted lifestyle that the West has adopted.

The term, "oil addict", is obviously not a flattering one, and many will have difficulty accepting it. It conjures up the smell of heating oil, the grime of coal, the danger of gas explosions. How far it removes us from the grand adventures of Don Quixote, tilting with such panache at the windmills that taunted him so insolently with their great sails! We need to be reminded that without fossil fuels we would not be who we are. The magic of electricity, were it derived solely from the force of wind and rivers, would certainly have brought us some new glimmers of enlightenment, but it would not have transported us into the amazing world that we know now. It might have inspired architects to erect stones in new patterns, but it would not have enabled them to build to the sky. Engineers would have been left with nothing but the wind to move their boats across the water and it is unlikely that they would ever have gotten their planes off the ground. Without fossil fuels, physicians would still be prescribing leeches for wine-congested livers. And scientists, scorned for displacing the Earth from the center of heavenly orbits, would themselves still be circling around a few radium atoms assembled with difficulty in dimly lit laboratories.

Clearly, without fossil fuels, the Western world would not be what it is today. Energy has made all the difference. The grand Industrial Revolution - a revolution is always grand to those who make it - is perhaps not as perfect as we have painted it. Our standard of living, and that of other nations, depends entirely on the amount of energy our societies consume. Without this energy we would still be mountain shepherds, calling our dogs to gather the flocks; or farmers, prodding our lethargic oxen across the fields; or blacksmiths, pumping our bellows to revive a meager charcoal fire; or millers, waiting for a good rain to swell the river and turn the millstone; or town criers, warning the local populace of an ill wind. We might also be comfortably seated next to a roaring chimney fire, listening to grandmother spin tales about the deep, dark mysteries of the nearby forest, or grandfather striving to solve the world's problems and re-enacting old battles.

But we are no longer any of these things in the West. We are oil addicts, human beings who have created an industrial empire that can exist only so long as it can continue to guzzle vast amounts of energy. It is time we face up to the truth and its consequences.

How did we become addicted? Must we remain so? Can we remain so?

These are stark questions. Their impact is staggering. To answer them, we are forced to realize that we are living under an illusion of power that is, in fact, as temporary as it is artificial. Our daily life has become disconnected from reality. Not long ago, half asleep, I was confronted by images of a bizarre world, which was nonetheless all too familiar. Two great processions stretching off into the distance were moving toward one another. One was made up of millions of motorists driving fleets of shiny cars, thundering tractors, and gas-powered lawnmowers. They held up signs proclaiming, "Oil is life!" and were demanding that it be found and brought to them "wherever it may be!" The other was an endless parade of thousands and thousands of pilgrims declaring that the Earth should be populated entirely by Man; they were heading toward a "Be Fruitful and Multiply!" rally. With a deafening roar, the two sides converged and became one gigantic throng, jammed together on an endless expanse of asphalt. Unable to advance any farther, men, women and children got out of their vehicles and began milling around in disarray. People waved banners proclaiming, "The Earth is Ours!" with as much conviction as those who affirmed, "I Vroom, Therefore I Am!"

And I realized that we might not find any way out of this.

A hundred years ago, such a dream would have been highly unlikely. Not even Jules Verne could have imagined the hallucination we are living in now. He would not have dared to imagine that, in order to live in luxury, one part of the world would be willing to sacrifice the other without a qualm.

The situation today is serious. We, in the West, can no longer afford to simply remember to fill up on gas and heating oil. It is time for us to wake up. Everyday, the children of Hilla, Mosul, Dawaniya, Baghdad, Tehran, Abadan, Khorramshahr, Baku, Groznyy, Lagos, ... face the possibility of paying with their lives to ensure the comfort of the children of the Northern hemisphere. Surely not even the need for energy can justify such callousness. It in no way justifies madness.

Bill Totten

Here comes the nutcracker

Peak oil in a nutshell

by Jan Lundberg

Culture Change (February 13 2005)

The end of abundant, affordable oil is in sight, and the implications are colossal. About now in our hydrocarbon phase of human history, we have pulled out of the Earth approximately half of the available petroleum (crude oil and natural gas). The other half still in the ground is harder to extract and may not - as assumed - fuel the global economy or even provide a transition to another phase.

To hope for an increase in discoveries is to turn a blind eye to the world trend in declining oil extraction which has been relentless for the past four decades. The approximate bell curve of petroleum extraction cannot be changed by any one big new discovery. Yet, the idea of "the Caspian" or any other mega-field du jour is an example of the constant hope for perpetual energy for high living in contradiction with nature.

The same can be said of the dominant assumption that petroleum will be replaced by other "technologies". This ignores the overwhelming petroleum-based infrastructure we have, and neglects to account for the lesser return on energy from non-petroleum sources of energy. But, "they" (scientists, leaders, corporations) will "think of something".  Another common assumption popular among "radicals" is that "the ruling elite will refuse" to allow the global economy or the lucrative capitalist system to collapse.

If peak oil means we are at a half-way point, does this mean we now have years to either plan energy use or get used to recession, as claimed by many a writer on peak oil? Before the reader makes assumptions on how society may utilize the remaining store of petroleum, let me repeat what I told The Institute of Petroleum in London two years ago (on February 17 2003):

"What the world went through in 1979's oil crisis, which my former company warned of in the US, based on our projection of a 9% shortfall in gasoline deliveries, can happen again. The difference will be that global production of oil will be falling instead of increasing."

This means that the next tough oil shortage, even if it is not acknowledged as a post-peak oil extraction phenomenon of diminishing supply, will cripple the globalized economy. Understanding of both the economics and social dynamics of collapse is rare, and even when it is present there is an absence of taking into account the "market factor" in ushering in collapse.

Despite the need to be prepared for imminent, final energy shortage - which could happen now or in several years at the latest - people persist in focusing too much on the likely date of the passing of the peak. It is already clear that the oil industry and OPEC numbers on oil reserves are suspect. So we can simply offer a range of oft-quoted peak-oil arrival times: 2005 to 2012. Some more distant figures such as 2020 are based on infinite technological improvements on extraction and removing the problematic sulfur, for example. Factoring in the "irregular" petroleum sources, the peak year of world oil extraction is to be 2007, according to the Association for the Study of Peak Oil and Gas.

A flurry of peak oil stories hit last fall. But in general, the price of oil is deliberately about where the main players want it, as it is so profitable. So let us not look at the $50 price neighborhood as proof of peak oil being here now - although it may be a factor.

Taking peak oil doctrine further

The bell curve of oil "production" was devised by Marion King Hubbert, a Shell Oil and US government geologist. Although Hubbert has on the whole been borne out except in the minds of fundamentalist-classical economists, what he did not factor in was collapse. Therefore, the curve will be truncated to a cliff just as the gap between supply and demand is felt and hits.

The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over eighty million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.

The trucks will no longer pull into Wal-Mart. Or Safeway or other food stores. The freighters bringing packaged techno-toys and whatnot from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence and chaos. For only a short time will the police and military be able to maintain order, if at all. The damage that several days' oil shortage and outage will do will soon wreak permanent damage that starts with companies and consumers not paying their bills and not going to work.

After an almost instant depression seizes the modern industrialized world, and nation-states break down, the frantic attempts of people to feed themselves, stay warm and obtain fresh water (pumped presently via petroleum to a great extent), there will be no rescue. Die-off begins. The communities least dependent on petroleum will survive best. These "backward" nations will be emulated by the scrounging survivors of the US and the rest of the "developed" world, as far as local food production will be tried - in a paved-over, toxic landscape by people who have lost touch with the land.

What about renewable energy and other alternatives? They are not ready, and will never be as long as oil is king. This is something not acknowledged by the boosters of the technofix. When oil abdicates, no one can fill the shoes. See Culture Change Letters on the Technofix such as #77 at

However, there will be replacement societies, starting with bands, tribes and rural communities that will start cooperating with each other as never before. The age of the bioregional country, based on cooperation and mutual aid will begin. A main job-category will be restoration of the land so as to provide a semblance of the diversity of food that Earth provided prior to petroleum farming. Social structures will no longer lend themselves to overcrowded workforces dependent on the dollar to buy goods and services from huge, distant and unaccountable corporations. Argentina may be a guide to post collapse society, with its egalitarian and worker/citizen controlled systems.

Awareness of the expected peak in global oil extraction is on the rise, but a debate on when the peak will hit has drowned out larger questions: How hard will the loss of abundant oil hit the economy? Can the consumer culture continue if the collapse includes die-off?

The reasons for not asking those questions in polite corporate company - on the mainstream news or in foundation-funded reports - include the blind faith in renewable energy as a cure-all, and the lack of understanding of petroleum's hold on daily lifestyles. Even if these factors are recognized, a news organization does not want to appear alarmist, and at the same time wants to cling to society's myths of progress and order forever.

The prospects of mitigating peak oil or avoiding collapse are almost nil. US petroleum demand in 2004 grew at its strongest rate in five years. In December the daily consumption of refined oil was 21 million barrels in the US, a quarter of world use. The US leads the industrialized world in population growth, part of a domestic policy to assure more car and oil sales.

More evidence of insanity by the world's biggest consumer, the US, is that the breaking point is flaunted: refinery utilization rate last year was the highest annual rate in six years at 92.8 percent of capacity. Lower 48 output of crude oil extraction declined the most ever in 2004 since 1999, and Alaskan production experienced its largest drop since 2000, declining 5.5 percent - peak oil "production" happened in the US over three decades ago.

With the worldwide oil industry emulating these trends of maxing out, the still surging demand - China is the leader - strains production and hastens the day when the system can no longer accommodate growth. The Earth cannot, as of the world oil peak in extraction, give up ever greater quantities of black gold. Most of the world exporting companies are now reducing extraction rates due to fewer discoveries and depleted fields. Oil production in eighteen producer countries has passed its peak and is declining faster than previously thought: at about 1.14 million barrels a day.

"International Energy Agency figures put the total spare capacity of all eleven countries in OPEC at just 330,000 barrels per day (down from six million barrels per day in 2002). Conventional Saudi spare capacity is zero ... An IEA report from August 2004 indicates Saudi Arabia needs up to 800,000 barrels per day of newly discovered oil each year just to offset declining fields and maintain its current production level". [Al-jazeera] - this can't happen, so watch for the ensuing energy crisis.

More evidence that demand is out of control and pushing up the day of peak oil: "There is no spare refinery capacity, demand has outstripped all expectations". - Deborah White, Societe Generale bank, Paris

The world needs to produce another 2,723,530 barrels per day by the end of 2005 just in order to stand still, even by the IEA demand figures considered low by analysts.


We live in strange times: global warming from petroleum and other fuels is acknowledged as a certain and extremely grave threat, but we allow "policy" to continue holding above all else the maximum burning of petroleum. More roads are built for the guzzling coffins on wheels, even though road-repair funds (and library funds) go lacking as a result. The viciousness of the invasion of Iraq and the attempt to foil the designs of the great powers should serve to wake people up to wean themselves off petroleum. Nothing may finally tip public sentiment over to abandoning the oil life. People have already forgotten the huge oil spill off Unalaska Island, Alaska. But neither genocide, climate distortion, nor loss of wildlife habitat and fisheries - or that more nebulous concept of peak oil - have people thinking far ahead in the dominant culture, except in terms of self-aggrandizement. Fortunately, the loss of petroleum will probably mean the loss of the global culture of plastic materialism.

Petroleum is the Great Leveler, in the sense of "leveling" or flattening oil civilization. But petroleum will also be the Great Leveler in terms of equalizing everyone: People will go through a final, grasping petroleum grab with whatever funds and connections they have, before the attempt fails for good. Then all people will have no choice but to work together or perish. Until then, we have skewed values: for example, when a kindly old lady drives to a shop and has her charitable concerns, the use of oil makes her a killer of the planet and she is not pursuing a sustainable form of transportation. Meanwhile, a mean old man who scowls at little children who walks to the shop might be a much more valuable citizen in a practical fashion that matters to the world.

Jan Lundberg - December 9-20 2004, Berkeley/Oakland, California


Association for the Study of Peak Oil and Gas "ASPO" Newsletter No 50 - February 2005

Energy Information Administration (US Department of Energy)

American Petroleum Institute

Adam Porter, Aljazeera



Summary of oil supply points

by Jan Lundberg

This was originally developed as an aid to the Campaign Against the Plastic Plague, February 2005

Ten oil supply basics vis-a-vis Peak Oil and sudden shortage

<> Daily world demand of oil is over eighty million barrels a day, and approximately one quarter of this is in and by the US.

<> Half the oil refined in the US is made into gasoline, the main product a refiner is concerned with. Other products such as asphalt, pesticides and plastics are minor parts of the crude-oil barrel to be disposed of (profitably only if possible). [Source: Jan Lundberg, veteran petroleum industry analyst]

<> World oil supplies are at the approximate historic peak of maximum production, due to depletion setting in. Oil production in eighteen producer countries has passed its peak and is declining faster than previously thought: at about 1.14 million barrels a day. "Those eighteen countries between them are now producing 1.14 mbarrels per day less than they were at their height". [Adam Porter,]

<> The maximum possible production-capacity utilization is the order of the day among the petroleum exporting countries: "The planet is operating at anywhere from 95% to 99% capacity. There is no margin for error. The only way the system can respond is continued price increases." [Stephen Leeb, Wall Street investment advisor and author] At a time of no spare refinery capacity, demand has outstripped all expectations. []

<> Regarding rising world demand, "China and India use the energy-equivalent of 5.5 barrels of oil per person per year, while rich nations use 39. No matter how rosy your thinking is as to the global supply of oil, there is no way there is going to be enough to satisfy the demands of an extra 2.3 billion people coming online." [Forbes magazine]

<> US oil demand is rising as well: "US petroleum demand in 2004 grew at its strongest rate in five years". The system is straining: "Refinery utilization rate last year was the highest annual rate in six years at 92.8 percent of capacity". [American Petroleum Institute]

<> The world trend in declining oil extraction has been relentless for the past four decades. The approximate bell curve of petroleum extraction cannot be changed by any one big new discovery. [ASPO;]

<> An International Energy Agency report from August 2004 indicates Saudi Arabia needs up to 800,000 barrels per day of newly discovered oil each year just to offset declining fields and maintain its current production level. - This can't happen [Jan Lundberg]

<> What about renewable energy and other alternatives? They are not ready, and will never be as long as oil is king. (This is something not acknowledged by the boosters of the technofix.) The price of oil is kept under the price of most alternatives. When oil abdicates because great quantities are no longer available at affordable prices, no other fuel or material can fill oil's shoes. [Jan Lundberg, from a prediction originally published in the National Petroleum News in 1988]

<> The next shortage could be soon and be the last one - that lasts and lasts, as the watershed event of passing the peak of global oil extraction could be right around the corner. The "market factor" in paralyzing the supply and distribution system, through panic-buying of crude and refined products, will usher in virtual but extreme shortage, bringing much economic activity to a halt in a matter of days. History taught us:

"What the US went through in 1979's oil crisis, based on the Lundberg Letter's projection of a 9% shortfall in gasoline deliveries, can happen again. The difference will be that global production of oil will be falling instead of increasing." - Jan Lundberg, at The Institute of Petroleum, London (February 17 2003)

Additional sources used for above:

Association for the Study of Peak Oil and Gas (ASPO)

Find Adam Porter's oil coverage at

See our "Fall of Petroleum Civilization webpages: for more data, insight, and links on oil issues.

A huge list of links and resources is at Life After the Oil Crash

Energy Information Administration

American Petroleum Institute

To help me promote Culture Change's activities such as the reprinting and circulation online of articles, you may send a donation by visiting Thank you.

Jan Lundberg
Post Office Box 4347
Arcata, California 95518
Telepone 1-215-243-3144

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We promote and practice cultural change as key to sustainability. Does economic growth via fossil fuels and materialism provide real security? A sustainable society features car-free living and growing food locally. Communities must return to self-sufficiency for food and energy.

Bill Totten

Thursday, July 28, 2005

Oil Addiction: The World in Peril - 0

by Pierre Chomat (Universal Publishers, 2004)

Back cover

Utterly addicted to oil. Man in his industrial adventure has transformed nearly all the Earth's ecosystems into "egosystems" designed to serve only his own needs and desires, at the expense of all other species. He persists despite the irreversible damage he is causing to the environment. He has already disrupted the Earth's thermostats.

Western society has reached the "Age of Excess" which will last onjy as long as there is still fossil energy to fuel it. The Earth cannot keep up with Man's demand for natural resources. Her hydrocarbon reserves are shrinking rapidly and by 2010, global production will begin to decrease, setting off a period of unprecedented planetary disorder and turmoil.

Today the United States must import most of the oil it needs from faraway countries. Therein lies a terrible paradox: the power of America is rooted in dependency! The free enterprise system that it is imposing on the rest of the world cannot solve this paradoxical situation; it will only amplify it and hasten destabilization.

It is high time to wonder whether we in the West, in our suicidal quest for energy, are not running the risk of losing control of the course of our history. The invasion of lraq by the United States military, in lockstep with American corporations, is a distressing and reprehensible step in this direction.

Pierre Chomat was a manager in the French petroleum engineering industry and actively participated in the development of oil facilities in a number of countries in Europe, Africa and Asia. He also served as a consultant to international companies in the energy sector. His
professional expertise and personal knowledge of the Middle East and other oil-producing areas have given him a unioue perspective on energy issues.

Utterly addicted to oil. Man in his industrial adventure has transformed nearly all the Earth's ecosystems into "egosystems" designed to serve only his own needs and desires, at the expense of all other species. He persists despite the irreversible damage he is causing to the environment. He has already disrupted the Earth's thermostats.

Western society has reached the "Age of Excess" which will last onjy as long as there is still fossil energy to fuel it. The Earth cannot keep up with Man's demand for natural resources. Her hydrocarbon reserves are shrinking rapidly and by 2010, global production will begin to decrease, setting off a period of unprecedented planetary disorder and turmoil.

Today the United States must import most of the oil it needs from faraway countries. Therein lies a terrible paradox: the power of America is rooted in dependency! The free enterprise system that it is imposing on the rest of the world cannot solve this paradoxical situation; it will only amplify it and hasten destabilization.

It is high time to wonder whether we in the West, in our suicidal quest for energy, are not running the risk of losing control of the course of our history. The invasion of lraq by the United States military, in lockstep with American corporations, is a distressing and reprehensible step in this direction.

Pierre Chomat was a manager in the French petroleum engineering industry and actively participated in the development of oil facilities in a number of countries in Europe, Africa and Asia. He also served as a consultant to international companies in the energy sector. His
professional expertise and personal knowledge of the Middle East and other oil-producing areas have given him a unioue perspective on energy issues.

Foreward by Jean-Michel Cousteau

A Deeply Compelling Work

Our planet Earth, the vessel that contains us all, is teetering on the brink. During the past 100 years, Man in the Northern Hemisphere has developed an industrial society based on the production and consumption of mass consumer goods. Produce, consume, discard - and produce even more so we can consume even more: that is the societal model of the world's great powers, with North America leading the way followed closely by Europe and Japan. But to fuel this great machine, we need energy, lots of it - more and more, in fact. And so we burn our "black gold" with a reckless abandon that will ultimately destroy us.

To maintain this absurd way of life, the Western world - or "Empire of the Oil Addicts", as Pierre Chomat so aptly calls it - is willing to place the Earth's very survival in jeopardy.

For the Earth is growing dangerously warmer due to a greenhouse effect that is directly linked to increased fossil fuel consumption. But the dangers do not stop there. In order to guarantee sufficient oil supplies, the West subjects oil-producing nations to the economic and political pressures of a defacto colonialism that is now a dangerous source of conflict. Led by the
United States, which is facing dire circumstances with respect to domestic energy supplies, the West has begun declaring war ...

The meaning behind recent events has not been accurately explained to us. What is now taking place is, in fact, the beginning of the energy wars. We have devoured our black gold at so fast a rate that our available reserves will be depleted during our children's lifetime. Yet 55% of this precious energy is being consumed by only 14% of us. Will we burn and bleed the planet to death for the comfort of a small minority?

With remarkable boldness and clarity, Pierre Chomat relates the dramatic story that is ours, a story that is now unfolding, a story in which we each play a part. His professional experience with major multinationals in the energy field lends depth and credibility to this well documented and passionate work. His expertise as an engineer enables him to unravel complex energy policies. His love of humanity is the platform from which he lays out the immediate problems now facing us as a species. Are we going to allow our Earth to be devoured by the "Empire of the Oil Addicts"?

If we urge radical changes to our energy policies, if we abandon nation-based selfishness, founded on individual greed, for human solidarity, we can slow the senseless depletion of our energy resources. We can forge agreements that respect the rights and dignity of the Third World. And we can sustain the delicate ecological balance of the Earth on which we all depend for survival. Despite the extreme urgency of our situation, it is not too late. There is hope!

Jean-Michel Cousteau
President, Ocean Futures Society
30th of August 2003

At Dar el Safa
the Bedouin no longer hears the gusts of wind
nor the call from afar of his peregrine falcon.

Hypnotized by fumes and Western world racket
he holds in his hands a pile of gold coins
and carefully counts his day's worth of earnings.

On the endless blue waters a boat has set sails
carrying his Safanyia ergamines away
toward unknown more industrious places.

- Anne Marie Chomat

Bill Totten

Twilight in the Desert

The Coming Saudi Oil Shock and The World Economy

by Matthew R Simmons (Wiley, 2005)

reviewed by John Gray

New Statesman (July 25 2005)

During the 1990s it was fashionable to scoff at the notion of limits to growth. A knowledge-based economy was coming into being in which natural resources didn't matter. The future would be driven by a search for new ideas rather than the struggle for control of the planet's assets. We were entering an era defined by information technology, in which rapid economic growth could continue for ever. It was never easy to square this fanciful philosophy with historical reality: the 1990s began with the first Gulf war, which was fought solely to secure oil supplies, and cheap oil was the basis of the prosperity of that feckless decade. Yet somehow or other these facts were forgotten, until Iraq.

With the launching of the second Gulf war, the crucial role of oil in the world economy was exposed. From statements made by a number of its American supporters, it seems clear that the strategic objective of the Iraq war was to enable the United States to withdraw from Saudi Arabia, which had come to be seen as an unreliable ally. According to the game plan, Saddam Hussein would be toppled, Iraq would be pacified in a few months and oil would fall to $10 a barrel. The global economy would then take off in another boom with the US in firm control of the world's second-largest oil reserves.

This was always a far-fetched scenario, and things have not worked out as envisaged. Iraq is a failed state in the grip of an intractable insurgency, and the price of oil is roughly $60 a barrel. The scramble to secure energy supplies is more frenzied than ever. The Great Game has been resumed, not only in central Asia but also in the Gulf. If Iran is attacked by the US in the course of the coming year or so, one reason for this will be to stymie energy supply agreements that Tehran may be planning with America's competitors, notably China and India.

The limits to growth have not gone away. They have re-emerged as classical geopolitics - a condition of continuous rivalry among the great powers for control of the world's most valuable natural resources. In this intensifying struggle, no country is more important than Saudi Arabia. The kingdom is the world's pivotal oil producer. Any disruption in supplies of its oil would be hugely destabilising to global markets. Even more crucially, it is the most important resource base for the oil that will be tapped to meet growing world demand. As emerging countries industrialise, their energy use increases exponentially. Saudi Arabia is the site of the planet's largest low-cost oil reserves, and in effect acts as the energy bank of worldwide industrialisation.

Matthew R Simmons is convinced that Saudi oil production is near its peak, or indeed may have passed it, a development with awesome implications. Simmons, a veteran oil finance insider who has been an important adviser to the Bush administration, has done a huge amount of research and bases his conclusions on carefully sifted evidence, not large theories. Yet his view is consistent with the theory of M King Hubbert, a Shell geophysicist who argued in 1956 that production rates for oil and other fossil fuels exhibit a bell curve: when roughly half the oil has been extracted, production declines. No one took much notice of Hubbert at the time, but he predicted that oil production in the continental United States would peak and start declining in the late 1960s or early 1970s - as it did. Since then a number of large oilfields have also peaked, including the North Sea in 1999. When oil peaks it does not run out - there is usually a slow decline that can be spun out by new technologies - but the unavoidable result is falling production.

Could we be near a global oil peak? Simmons believes that point may already have passed and warns that the idea that technology can arrest the decline may be a delusion. In his view, Saudi oil production has been boosted by the use of technologies which actually reduce the future supply of recoverable oil. The implication is that Saudi production has peaked, and with it global oil production, at a time when demand is rising inexorably.

Twilight in the Desert is not always easy to read. It largely consists of highly technical discussion of the history and condition of Saudi oilfields. Yet its impact is to transform our view of the world. Many in the oil industry - and particularly Aramco, the Saudi oil company - will dispute Simmons's claim that Saudi production is near its peak sustainable volume. For most readers the question will be whether Simmons can be trusted. I am certain that he can. He is not the only oil expert to say that a peak in global production may be near (Dr Colin Campbell of the London-based Oil Depletion Analysis Centre is another) and, unlike many in the oil industry, Simmons has no axe to grind. This is a ground-breaking book by an analyst of unimpeachable authority.

Simmons's analysis suggests that the current phase of worldwide industrialisation is crucially dependent on the uncertain reserves of a single Gulf kingdom facing vast and potentially insuperable challenges. As he shows in a superb digression, the most formidable of these is population growth. The kingdom's current population of roughly 22 million is expected to rise to roughly fifty million by 2030, and unless there is a large and sustained rise in the oil price, living standards are bound to fall steeply - as they have been doing since the early 1980s. The Saudi rentier economy is facing a Malthusian crunch, and against a background of already high unemployment the result so can only be a condition of chronic instability. If the most obvious effect of our dependency on oil is a series of resource wars, another could be an upsurge of revolutionary movements in oil-producing countries. While it would be an error to think that the Saudi regime is on the brink of collapse, in a few decades the kingdom could well be an Islamist republic - or, perhaps more likely given its origin as an artefact of the colonial era, another failed state.

Simmons makes a formidable case for the pivotal importance of Saudi Arabia, but he may actually have understated the impact of peak oil. One reason is the central role of oil in intensive farming. Contemporary agriculture relies heavily on oil-based fertilisers, pesticides and herbicides. At bottom, the green revolution was about the extraction of food from petroleum, and a peak in world oil production could trigger a peak in world food production. A second is climate change. As oil supplies are becoming scarcer and less secure, many countries are looking to other fossil fuels such as coal. New technologies can make coal much cleaner, but a large increase in coal use alongside continuing dependency on oil could magnify the greenhouse effect. In other words, peak oil could accelerate global warming.

The conjunction of peaking global oil production with quickening climate change poses fundamental challenges that no section of opinion has adequately confronted - including the Greens. The energy-intensive lifestyle which is now spreading throughout the world cannot be sustained with non-renewable and polluting fossil fuels, but it is sheer fantasy to imagine that a human population of between six and eight billion can be supported on a combination of windfarms, solar power and organic agriculture. As Simmons notes, we may be approaching the limits of growth that the Club of Rome identified more than thirty years ago, and we are no better prepared to adjust to them now than we were then.

John Gray's latest book is Heresies: Against Progress and Other Illusions (Granta, 2004)

Copyright New Statesman 1913 - 2005

Bill Totten

Wednesday, July 27, 2005

Faced With This Crisis

The G8 leaders refuse to accept that anything difficult needs to be done about climate change

by George Monbiot

Published in the Guardian (July 12 2005)

One day we will look back on the effort to deny the effects of climate change as we now look back on the work of Trofim Lysenko.

Lysenko was a Soviet agronomist who insisted that the entire canon of genetics was wrong. There was no limit to an organism's ability to adapt to changing environments. If cultivated correctly, crops could do anything the Soviet leadership wanted them to do. Wheat, for example, if grown in the right conditions, could be made to produce rye.

Because he was able to mobilise enthusiasm among the peasants for collectivisation, and could present Stalin with a Soviet scientific programme, Lysenko's hogwash became state policy. He was made director of the Institute of Genetics and president of the Lenin Academy of Agricultural Sciences. He used his position to outlaw conventional genetics, strip its practititioners of their positions and have some of them arrested and even killed. Lysenkoism, which governed state science from the late 1930s until the early 1960s, helped to wreck Soviet agriculture.

No one is yet being sent to the Guantanamo gulag for producing the wrong results. But the denial of climate science in the United States bears some of the marks of Lysenkoism. It is, for example, state-sponsored. Last month, the New York Times revealed that Philip Cooney, a lawyer with no scientific training, had been imported into the White House from the American Petroleum Institute, to control the presentation of climate science. <1> He edited scientific reports, striking out evidence that glaciers were retreating and inserting phrases suggesting that there was serious scientific doubt about climate change. <2> Working with the Exxon-sponsored PR man Myron Ebell, he lobbied successfully for the sacking of the head of the Environmental Protection Agency, who had refused to accept the official line. <3>

Cooney's work was augmented by Harlan Watson, the US government's chief climate negotiator, who insisted that the findings of the National Academy of Sciences be excised from official reports. <4> Now Joe Barton, the Republican chairman of the House Committee on Energy and Commerce, has launched a congressional investigation of three US scientists whose work reveals the historical pattern of climate change. He has demanded that they hand over their records and reveal their sources of funding. <5>

Perhaps most pertinently, the official policy of climate change denial, like Lysenkoism, relies on a compliant press. Just as Pravda championed the disavowal of genetics, so the Wall Street Journal, the Washington Times, the Daily Mail and Daily and Sunday Telegraphs champion the Bush team's denial of climate science. Like Pravda, they dismiss it without showing any sign that they have read or understood it.

But climate change denial, like Lynsenkoism, cannot last forever. Now, as the G8 communique shows, the White House is beginning to move on. <6> Instead of denying that climate change is happening, it is denying that anything difficult needs to be done to prevent it. The other G8 leaders have gone along with this.

Faced with the greatest crisis humanity has ever encountered, the most powerful men in the world have meekly resolved to "promote" better practice and to "encourage" companies to do better. The R-word is half-mentioned twice: they will "improve regulatory ... frameworks". <7> This could mean anything: most of the G8 governments define better regulation as less regulation. Nowhere is there a clear statement that they will force anyone to do anything to stop destroying the conditions which sustain human life.

Instead they've agreed to "raise awareness", "accelarate deployment of cleaner technologies" and "diversify our energy supply mix". There is nothing wrong with these objectives. But unless there is regulation to reduce the amount of fossil fuel we use, alternative technologies are a waste of time and money, for they will supplement rather than replace coal and oil and gas burning. What counts is not what we do but what we don't. Our success or failure in tackling climate change depends on just one thing: how much fossil fuel we leave in the ground. And leaving it in the ground won't happen without regulation.

They agreed to support energy efficiency, which would be a good thing if it didn't rely on a "market-led approach". Otherwise, they will cross their fingers and place their faith in a series of technofixes, some of which work, and some of which cause more problems than they solve. They will study the potential of "clean coal", which so far remains an oxymoron, and accelarate the burial of carbon dioxide, which might or might not stay where it's put. They will promote "carbon offsets" (you pay someone else to annul your sins by planting trees or building hydroelectric dams) which have so far been a disastrous failure. <8> They will encourage the development of hydrogen fuel cells, which do not produce energy but use it, and the production of biofuels, which will set up a competition for arable land between cars and people, exacerbating the famines climate change is likely to cause. <9> Not bad for six months of negotiations.

We can't blame only the Americans. While Bush's team has been as obstructive as possible, the UK has scarcely been doing the work of angels. Like Bush, Blair will contemplate anything except restraining the people who are killing the planet. While the UK produces 2.2% of the world's greenhouse gases, the companies which extract the fossil fuels responsible for over ten percent of global emissions are listed on the London Stock Exchange. <10> One of the reasons they find London attractive is that, thanks to our lax financial regulations, they are not obliged to reveal their potential greenhouse liabilities to investors. Far from doing anything about this, Blair complains that our financial rules are "hugely inhibiting of efficient business". <11>

Our problem is that, just as genetics was crushed by totalitarian communism, meaningful action to prevent climate change has been prohibited by totalitarian capitalism. When I use this term I don't mean that the people who challenge it are rounded up and sent to break rocks in Siberia. I mean that it intrudes into every corner of our lives, governs every social relation, becomes the lens through which every issue must be seen. It is the total system which leaves no molecule of earth or air uncosted and unsold. And, like Soviet totalitarianism, it allows no solution to pass which fails to enhance its power. The only permitted answer to the effects of greed is more greed.

I don't know how long this system can last. But I did see something in Scotland last week that I hadn't seen before. At the G8 Alternatives meeting in Edinburgh and the People and Planet conference in Stirling, climate change, until recently neglected by campaigners, stirred fiercer emotions than any other topic. People are already mobilising for the demonstrations planned by the Campaign against Climate Change on December 3rd. <12> I saw a resolve there to make this the biggest issue in British politics. If we succeed, the new campaign will crash head-on into the totalitarian system. But as more people wake up to what the science is saying, it is not entirely certain that the system will win.


1. Andrew C Revkin, 8th June 2005. Bush Aide Softened Greenhouse Gas Links to Global Warming. The New York Times.

2. ibid.

3. Myron Ebell, 3rd June 2002. Email sent to Philip Cooney. Leaked and published in Harper's magazine, May 2004.

4. Andrew C Revkin, ibid.

5. Richard Monastersky, 1st July 2005. Congressman Demands Complete Records on Climate Research by Three Scientists Who Support Theory of Global Warming. The Chronicle of Higher Education.

6. The G8 Summit, 8th July 2005. The Gleneagles Communique.

7. ibid.

8. See The Transnational Institute, 30th June 2005. Hoodwinked in the Hothouse.

9. See George Monbiot, 22nd November 2004. Feeding Cars, Not People. The Guardian.

10. Henderson Global Investors, June 2005. The Carbon 100. Henderson, London.

11. Quoted by Patrick Hosking, 13th June 2005. The Business. New Statesman.


Bill Totten

Tuesday, July 26, 2005

Water Privatisation And Water Wars

by Vandana Shiva

ZNet Commentary (July 14 2005)

1. Will Muradnagar be the next Tonk?

On 13th June 2005, five farmers were shot dead in Tonk during a protest demanding their share in the water from Bisalpur dam, which is diverting water from villages to the city of Jaipur under an Asian Development Bank project for water sector "reforms" in the State of Rajasthan currently ruled by a Indian People's Party (BJP) government.

Sonia Gandhi, President of the Congress Party, rushed to Tonk, called the firing barbaric and offered relief to the families of the farmers killed.

Yet the Congress government in Delhi is determined to create another Tonk in Muradnagar, with its demand to divert 635 million litres of Ganga water per day to the Sonia Vihar Plant, which has been privatized to Ondeo Degrement a subsidiary of Suez.

The real politics of water is not Congress vs the Indian People's Party. It is World Bank, Asian Development Bank and other aid agencies creating water markets for global water multinational corporations while robbing the Indian people both hydrologically and financially.

Delhi, India's capital has been sustained for centuries by the river Yamuna.

Two decades of industrialization have turned the Yamuna into a sewer and toxic drain.

Instead of stopping the pollution, using the scarcity created by the pollution, the World Bank started to push the Delhi government to privatize Delhi's water supply and get water from the Tehri Dam on the Ganges, hundreds of miles away.

The privatization of Delhi's water supply is central on the Sonia Vihar Plant. The Sonia Vihar water treatment plant, which was inaugurated on June 21 2002 by Chief Minister of Delhi, is designed for a capacity of 635 million litres a day on a ten-year build-operate-transfer (BOT) basis, at a cost of 1.8 billion rupees (approximately fifty million dollars). The contract between Delhi Jal Board (The Water Supply Department of the Delhi Government) and the French company Ondeo Degremont (subsidiary of Suez Lyonnaise des Eaux Water Division - the water giant of the world), is supposed to provide safe drinking water for the city.

The water for the Suez-Degremont plant in Delhi will come from Tehri Dam through the Upper Ganga Canal up to Muradnagar in Western Uttar Pradesh and then through the giant pipeline to Delhi. The Upper Ganga Canal, which starts at Haridwar and carries the holy water of Ganga up to Kanpur via Muradnagar, is the main source of irrigation for this region.

Delhi's ever growing water demands have already led to major diversions of water from other regions. Delhi already gets 455 million litres from the Ganga. With the Sonia Vihar plants demand of 635 million litres, this is 1090 million litres per day of diversion from Ganga. Further diversion of 3000 million cubic metres per second from the Ganga is built into the Sharda and Yamuna river link.

Delhi is also demanding 180 million litres per day to be diverted from Punjab's Dhakra Dam. Water will also be diverted to Delhi from the Renuka dam on Giri River (1250 million cubic litres per day) and Keshau Dam on Tons River (610 million cubic litres per day) from distant Himachal in the Himalayas.

On December 1 2004 water tariffs were increased in Delhi. While the government stated this was necessary for recovering costs of operation and maintenance, the tariff increase is ten times more than what is needed to run Delhi's water supply. The increase is to lay the ground for the privatization of Delhi's water, and ensure super profits for the private operators.

Increasing tariffs before pivatisation is part of World Bank's "tool kit". It is part of a stepwise approach to "secure at least some private sector involvement in risky countries". Before full privatization, the "private-public partnership" is to increase tariffs through a public utility, so that increased tariffs can support a commercial operation (that is "guarantee profit margins"). Service and management contracts can be introduced while the government increases tariff.

The tariff increase is not a democratic decision, nor a need based decision. It has been imposed by the World Bank. The Delhi Jal Board cites the justification for increase in tariff as based on a study done by Price Waterhouse Cooper under the World Bank study on privatization. It also cites World Bank technical paper No 386 of 1997 on water pricing.

Delhi's water operation and maintenance budget is 3.44 billion rupees. The public utility has been recovering 2.7 billion rupees due to 40 to 50% non-revenue losses such as leaks and thefts. During a conference on public-public participation, we showed how public and community participation can recover revenues of 5.00 rupees by preventing leaks and theft. This allows 7 to 8 billion rupees recovery, which is twice the amount needed to operate and maintain the water system.

However, the tariff increase will allow a recovery of thirty billion rupees, tenfold more than needed, guaranteeing a super profit of 26.66 billion rupees to the corporations waiting to grab Delhi's water supply. A ten percent increase is built into the tariff restricting which will double the profits for water privateers in seven years. This profit is created not by better services but by doubling the financial burden on citizens, especially the poor.

The tariff increase hides significant increases through changes in categories. Schools and agriculture have been redefined as "industry". "Piaos", a core part of India's culture of the gift of water, must also pay for water. How will they give water to the thirsty? Cremation grounds, temples, homes for the disabled, orphanages which paid 30 rupees will now pay thousands of rupees, the cash strapped social institutions cannot pay.

The World Bank driven policies explicitly state that there needs to be a shift from the social perception to a commercial orientation. This worldview conflict lies at the root of conflicts between water privatization and water democracy. Will water be viewed and treated as a commodity, or will it be viewed and treated as the very basis of life?

Many privatization myths have been used to justify the tariff increase. The first is the myth of "full cost recovery" the mantra for privatization. However, as far as operations are concerned, the tariff increase implies a "ten-fold recovery", ten times more than "full cost". As far as investments are concerned, the private operators have made no investment, but will harvest public investment of one trillion rupees. The "full cost recovery" logic when applied fully requires that water systems stay in the public domain as a common good.

At the National Development Council Meeting on June 28th 2005, Shiela Dixit, the Chief Minister of Delhi called for the federalization and prioritization of drinking water. (Pioneer, 29th June, 2005) However, the World Bank driven 24x7 scheme is not to provide drinking water to Delhi's slums, it is to provide rich colonies with the luxury of 24 hour running water seven days a week in a period of severe water crisis. The water crisis demands reductions in water use Privatisation is encouraging increased water use. This increase in urban consumption will come at the cost of rural areas. This is part of the privatization process. Four global companies are already in the bid for the 24x7 distribution including Suez, Bechtel and Saur.

The common argument for privatization and price increase is that higher costs will reduce water use. However, given the extreme income inequities. A tariff increase that can destroy a slum dweller or poor farmer is an insignificant expenditure for the rich. Privatisation as dictated by Asian Development Bank and the World Bank thus means that water will be diverted from the poor to the rich, from rural areas to urban and industrialized areas. And each diversion will create water wars as it did in Tonk. This is why U.P. has been refusing to divert Ganga water to SoniaVihar. Non-sustainable and inequitable use will increase with privatization because the rich can afford to pay for water waste.

2. The Planning Commission as Water Privateer

The government' priority for commodification and privatization of water was clearly stated by the Planning Commission Deputy Chairman, Montek Singh Ahluwalia's statement in his opening remarks at the National Development Council that farmers should pay for water. While Mr Ahluwalia argued that rich farmers are the real beneficiaries of free water, the reality is that when water is commodified, it is the rich who can afford to pay. The poor peasant, already struggling under the burden of debt, driven to suicide, will be wiped out of s/he is denied access to water and made to pay for a resource that is their common property. If poor peasants are pitted against rich agribusiness in competition for water through water markets, agribusiness will monopolise irrigation. If poor villagers are pitted against rich city dwellers in a water war, the rich will win.

The problem of water waste is not agriculture per se but chemical industrial farming mistakenly referred to as the Green Revolution. It is possible to produce more nutrition per acre growing millets that need only 200 mm of water. We can increase food availability 200 fold through simultaneously conserving our biodiversity and scarce water resources. It is possible to decrease water use while increasing food output by shifting from chemical farming to organic farming. However, these water conservation strategies were not what Mr Ahluwalia proposed. He proposed more water intensive cultivation of fruits, vegetables, shrimps for exports. In other words, while India is gripped by a severe water crisis, and even more severe water conflicts, our Deputy Chairman of the Planning Commission is recommending that we export water as a "virtual water" subsidy to the rich consumers of the North and instead of calling for water conservation through organic farming, be wants the impoverished peasantry to finance insane schemes like the $200 billion River Linking Scheme. The Deputy Chairman stated that "chasing short term benefits that accrue from vote bank politics, instead of seeking long term gains that flow from prudent economic policies, has become the bane of our decision-making process." (Pioneer editorial, 29th June)

What Mr Ahluwalia is calling "short term benefits that accrue from vote bank politics" others call democracy. What he refers to as "prudent economic policies" are the World Bank, IMF and Asian Development Bank paradigm of water privatization which has already led to the killing of farmers in Tonk and could lead to many more water wars.

The only long-term and prudent water policy is to recognize nature's limits, live within the water cycle, and guarantee every Indian their fundamental right to water. Privatisation is not a solution to our water crisis. Conservation and Community rights can help overcome the scarcity we face in both rural and urban area.

Water is a commons, a public good. Privatisation is the enclosure of the water commons. Water privatization aggravates the water crisis because it rewards the waste of the effluent, not the conservation of resource prudent communities.

Sustainable and equitable use needs water democracy, not water privatization.

Bill Totten