Bill Totten's Weblog

Saturday, May 26, 2007

Rigged to Blow

by Jim Kunstler

Clusterfuck Nation (May 14 2007)

It's hard to venture around this land and not feel like you are living in something like an obsolete Las Vegas hotel exquisitely rigged for implosion. The massive system that we've poured all our national wealth into, and elaborated to the last limits of refinement over half a century, is poised for failure. The prospect is so dreadful that no legitimate authority in politics, business, the news media, or even those cultural outlands of the arts and religion, can bring themselves to express a plausibly coherent view of what happens next to a living arrangement with no future and an economy of no purpose.

The system I refer to, of course, is the car-crazy infrastructure for everyday life, and all the activities supporting it, that most Americans now living regard as the natural and normal medium for human existence, as salt water is the natural and normal medium for squid. The public brings no critical reflection to being in it, and so its failure will eventually come as a deadly surprise - as a red tide surprises the denizens of a tropical sea. When it occurs, the public will not be able to escape from their investments in this way of life. Some may feel swindled, but they will not lose their sense of having been entitled to a happier destiny, so the chances for the acting-out of massive political grievance are high.

It's a tragic irony that we got so good at the advertising game the past half-century, because in doing so we rigged a sub-system dedicated to reinforcing all our false entitlements. So when the dreadful moment of recognition comes that we can't possibly continue being a nation of happy motorists shuttling between the strip malls and subdivisions, the bewilderment will be monumental. Nobody will believe that it is happening, or have a clue how we got ourselves into such a fix.

For the moment, America is being subjected to the slow squeeze on gasoline prices, rather than a sudden sharp shock, with the pumps now averaging $3.09 nationwide. But there's a lot tension accumulating in the process. Gasoline prices are going up remorselessly now mainly because of bottlenecks in the refinery sector. Demand has gotten so high - we are driving so much, regardless of up-or-downticks in measured economic activity, because the way things are laid out we have no choice - that our existing refineries are operating at over ninety percent capacity (when they are running). This has led to the deferral of a lot of routine maintenance, so the refineries are either running flat-out or they're not running at all.

Most of our oil refineries are more than fifty years old. The metal in their pipes and retort vessels is fatigued. Things break. The companies that sell gasoline, like Exxon-Mobil, realize that they are in a "sunset" industry, so they are not interested in investing any fraction of their currently enormous profits in new refineries (especially when they can use that money to buy back their own stock and jack up the share price). Besides, the public regards oil refineries as obnoxious, and if a new one were even proposed somewhere, an army of NIMBYs would arise and march on the local zoning board to oppose it - so why bother?

Last week, a reader sent me an elaborate Powerpoint show put together by a Peak Oil "optimist, someone who believes that there are vast recoverable reserves of oil waiting to be be tapped out there - as opposed to those like myself who don't think new supply will offset declines in the known oil fields of the world. It seemed to me that most of this optimist's case was based on the fantasy that the tar sands of Alberta and the oil sands of the Venezuelan jungle will make up for what we no longer get out of places like Ghawar in Saudi Arabia, Cantarell in Mexico, West Texas, and the other old standbys.

The Alberta tar sands are big, but even the Canadian government does not project them paying out much more than three million barrels a day when they reach maximum production in five or ten years, and the process will probably poison all the groundwater east of the Canadian Rockies. Meanwhile, world demand has reached about 85 million barrels a day. The project in Venezuela I regard as even less likely to ever reach production. Hugo Chavez has just chased out the foreign oil companies who have any technical expertise, but I think the jungle itself would defeat even them, and it will certainly prevent Chavez's lame crew from getting any product out - he's having technical problems out in the old familiar Maracaibo Basin.

The current sense of stalemate or stasis in Middle East politics the past year is certainly promoting an air of unreality. The civil war in Iraq grinds on no matter what the US police force does there, or what Congress and the White House do here. We bluster about Iran, but we don't do anything about them, and they bluster back at us. The Saudis bust a hundred Islamic revolutionaries every few months and keep their operation rolling. The Holy Land is tense but quiet for now.

Events in geopolitics - things that happen "above the ground, as they say in oil circles - seem kind of stuck for the moment. We forget that these things become unstuck rather suddenly, through slippage, or a process like phase change in physics, where conditions persist - until suddenly they don't. This is pretty much what happens to a fifty-year-old Las Vegas hotel. It stands there out on the Strip year after year, perhaps with decreasing decorum, but it persists until the day comes when somebody throws a switch and the whole edifice comes down, reeking carpets and all.

Bill Totten


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