Map source, CIA

This is a special mailing, from Jay Hanson, dieoff.org, with news from Canada. Canadian natural gas is the key to globalization! Without Canada's gas, the global economy is history.

Excerpts from: http://www.globeandmail.ca/
U.S. touts California-style power plan [snip] Canada -- the largest energy exporter to the United States -- also wants energy included in any WTO services deal. It's unclear where Ottawa stands on the U.S. regulatory guidelines. Michael Kergin, Canadian ambassador to Washington, recently welcomed Mr. Bush's overtures on creating a North American energy policy. He has noted that it might be an opportunity to review any remaining regulatory restrictions that Canadian energy producers face selling into the U.S. market. But regulators, politicians and consumers in Canada and across the United States have watched in horror in recent weeks as the power grid in California -- the most populous and one of the richest U.S. states -- has come close to collapse.

Excerpts from: http://www.globeandmail.ca/
Alberta gas rates to skyrocket
A major small business group says the hike will be a huge burden. Dan Kelly, with the Canadian Federation of Independent Business, says it's also upsetting that Albertans could be paying much more than natural gas consumers in Ontario. An ATCO official has acknowledged Albertans are outraged by this price disparity and some have been openly hostile towards the utility's employees.

Excerpts from: http://www.edmontonjournal.com/news/stories/990918/2876930.html
Exports seen ending natural gas bonanza
Alberta's natural gas-driven economy will have to run on a lot less fuel in coming years once the province's huge reserves are tapped out, warns a University of Calgary economist. [snip]
Mansell also had some bad news about the future of the petrochemical industry in Alberta, saying the growth that has made it a leader in the value-added manufacturing sector should not be expected to continue."We've probably seen the end of any dramatic development in petrochemicals," he said.
"It would now appear that incremental supplies of ethane and other such feedstocks upon which the Alberta petrochemical industry was built will increasingly be left in the gas streams leaving the province and the future petrochemical industry growth in North America will be at the terminus of the pipelines in the U.S," the economist said.
The problem with energy extraction is that one needs the cooperation of the local population. Even if the USA military threw all the rules out the window, they could never guarantee uninterrupted energy flows from an unwilling nation (Saddam Hussein blew up Kuwait, a few extremists almost sunk the Cole, etc.)
The down side of the energy curve is going to be swift and brutal. It will be an era of confrontation:
"Interests can always be compromised and accommodated without undermining our very being by sacrificing values. Under the impact of electronic media, however, this psychological distance has broken down and now we discover that these people with whom we could formerly compromise on interests are not, after all, really motivated by interests but by values. Their behavior in our very living room betrays a set of values, moreover, that are incompatible with our own, and consequently the compromises that we make are not those of contract but of culture. While the former are acceptable, any form of compromise on the latter is not a form of rational behavior but is rather a clear case of either apostasy or heresy. Thus we have arrived not at an age of accommodation but one of confrontation." -- Beryl Crowe

Will Canadian farmers be willing to watch their animals freeze to death so American millionaires can play golf in the desert? I don't think sooooo.
http://www.desertgolfnetwork.com/
Will Canadian housewives be willing to sit in cold, dark rooms so blue-haired American grandmothers can jerk slot machines in Las Vegas? I don't think sooooooo.
http://www.gothere.com/Nevada/LasVegas/
Canadians are much better equipped to blow up pipelines and monkey wrench energy extraction than either Colombians or Nigerians. That's why Canada holds the key to globalization. Stay tuned...

Remember this book?

Dr. William E. Rees is an ecological economist and a professor at the University of British Columbia’s School of Community and Regional Planning, in Vancouver. Dr. Rees co-authored the neat OUR ECOLOGICAL FOOTPRINT: Reducing Human Impact on the Earth, by William E. Rees, Phil Testemale, Mathis Wackernagel;
http://www.amazon.com/exec/obidos/ASIN/086571312X/brainfood.a
Aslo see Dr. Rees' excellent REVISITING CARRYING CAPACITY: Area-Based Indicators of Sustainability at
http://dieoff.com/page110.htm

Why we should pay more for gas
by William E. Rees, PhD

Americans enjoy the most energy-intensive economy on the planet. Much of the country depends, directly or indirectly, on fossil fuel for heat in winter and for air conditioning in summer. The American way of life feeds on mainly fossil-fueled transportation that moves people and everything they need over vast distances within the country. Oil-fueled transportation also connects the nation materially to the rest of the world, including to more than 60% of its oil supplies. Thanks to production agriculture and industrial food processing, American food now ‘embodies’ more fossil energy than solar energy. Many products on retailers’ shelves, from various textiles to personal computers are made, in part, from oil or natural gas.

The reality is, that for all the paper wealth being generated by ‘new economy’ high-tech and internet stocks, the country’s entire post-industrial economy still floats on an ‘old economy’ pool of oil and gas. No wonder that in recent months Americans have been take aback by significant increases in the price of gasoline, diesel fuel, heating oil, and natural gas. Domestic sources are drying up, demand everywhere is rising, and the Organization of Petroleum Exporting Countries (OPEC), taking advantage of its increasing dominance in world markets, has tightened the screws on global supplies.

The federal government has responded to the price hikes and public howls by intensively lobbying OPEC to open the valve and let the oil flow more freely – with some success. While this is may be good short-term politics it is bad economics and lousy environmental policy. And it won’t prevent even steeper price increases in the near future. Indeed, if the US government really wants to seize the initiative, it should be leading western governments to agreement on a persistent, orderly, predictable, and steepening series of oil price increases over the next two decades.

This argument comes in two parts. The first is neatly summarized in a 1998 report by the Washington-based International Centre for Technology Assessment on “The Real Price of Gas”. The purpose of this report was to quantify the numerous external costs associated with the use of fossil-fueled motor vehicles that are not reflected in US consumer prices. Such hidden costs range from various tax and direct subsidies to the oil industry from governments, through publicly funded infrastructure costs, to the health and environmental costs associated with burning fossil fuels (e.g., breathing ‘second-hand exhaust’). These direct and indirect subsidies seriously distort energy markets, burden the economy with rampant inefficiencies, and are wrecking the world’s climate.

Depending on the definition of the subsidies and the quality of available data, the total unaccounted cost in the US was found to lie between $559 billion and $1.7 trillion dollars annually. Thus, a fuller social cost accounting for the use of fossil fuel would result in a gasoline price per gallon of between US$ 5.60 and US$ 15.14, or between about four and 10 times recent prices. In other words, even with the burden of existing taxes, prevailing energy prices do not ‘tell the truth’ about the costs of using fossil energy – Americans are still paying a small fraction of the price they would pay for gas in a perfectly functioning market.

In fact, US consumers enjoy the most underpriced fuel available in any major industrialized country – with predictable results. As any economist will tell you, the invariable consequence of underpricing is overuse. Americans live in ever-larger energy-inefficient houses, drive ever-bigger and less fuel-efficient vehicles and are generally squandering in a few decades a non-renewable resource that took tens of millions of years to accumulate. Even if there were no other issues at hand, it would be economically rational and ecologically beneficial for the federal government to intervene in today’s energy market to correct at least the best-documented and non-controversial market imperfections. This alone would result in significantly greater taxes and prices at the pump.

But there is another issue at hand. The world is running out of conventional oil. Recent price hikes are mere tremors heralding the real price shock to come. Surely this is not the time to be deepening our dependence on fossil fuel.

The evidence? Oil ‘production’ (i.e., extraction) in the US peaked around 1970 and in North America as a whole in 1984. Non-OPEC production is peaking even as you read these words. Several recent studies project global oil production to peak by 2013 or sooner, possibly as soon as 2007. Even the necessarily conservative International Energy Agency (IEA) in its World Energy Outlook, 1998 concurred for the first time that global output could top out between 2009 and 2012 and decline rapidly thereafter. Indeed, the IEA projects a nearly 20% shortfall of supply relative to demand by 2020 that will have to be made up of from “unidentified unconventional” sources (i.e., known oil-sands deposits have already been taken into account). Other studies show that by 2040 total oil output from all sources may fall to less than half of today’s 25-26 billion barrels of oil per year.

And running out of oil is not running out of just oil. Oil is the means by which industrial society obtains (and over-exploits) all other resources. The world’s fishing fleets, its forest sector, its mines, and its agriculture all are powered by liquid portable fossil fuels. Seventeen percent of the US energy budget, most of it oil, is used just to grow, process, and transport food alone. (It takes a gallon of fossil fuel to feed each American every day.) Keep in mind, too, that petroleum is not just a fuel. Oil and natural gas are the raw material for thousands of products from medicines, paints, and plastics to agricultural fertilizers and pesticides. Since oil is directly or indirectly a part of everything else the coming scarcity of oil and the attendant price shock means higher prices for everything else as well.

But wait a minute. Many analysts will agree with energy economist M.A. Adelman that rising prices will stimulate “..a stream of investment [creating] additions to proved reserves, a very large in-ground inventory, constantly renewed as it is extracted”. Unfortunately, this argument is dangerously misleading. The physical stock of exploitable oil is not being “renewed”; historically, improved technology has simply made a dwindling finite resource more accessible. Abundant short-term market supplies then effectively short-circuit the price increases that would otherwise signal impending real scarcity, even as finite stocks are depleted.

Moreover, Adelman’s argument ignores the fact that oil exploration is very much subject to diminishing material returns. Despite increasing effort, we currently discover less than six billion barrels of new oil per year, not even a quarter of present consumption. A few decades ago, oil extractors in the US would discover 50 barrels of oil for every barrel consumed in drilling and pumping. In the mid-1990s the ratio was five to one, heading to one for one by 2005. At that point, there will no point in extracting oil with oil at any price even though there will still be plenty left in the ground.

What about substitutes? Concerns over climate change have already stimulated a growing interest in alternative energy sources. ARCO’s CEO Michael Bowlin is on record as saying, “We've embarked on the beginning of the Last Days of the Age of Oil.” Ford Motors’ William C. Ford, has stated that “[he expects] to preside over the demise of the internal combustion engine.” All very well, but we sometimes forget that different fuel types are not readily interchangeable. Wind, photovoltaics, and other forms of solar electricity may be able substitute for most of the electricity currently generated by fossil fuels (nuclear fission has failed and commercial fusion reactors are decades in the future). However, electricity cannot replace many of the direct uses of petroleum derivatives as fuel nor overcome their clear advantages in energy storage. There is great promise in fuel-cell development but the fact is that no suitable substitutes are yet in sight for the fossil fuels used in heavy farm machinery, construction and mining equipment, diesel trains and trucks, and ocean-going freighters. Jet aircraft cannot be powered by electricity, whatever its source. (While rapid advances are being made in coal- and other carbon-based synthetic fuels, these substitutes leave us with the specter of climate change.) Again, nothing yet can replace cheap hydrocarbons as feedstocks in the manufacture of myriad industrial and agricultural products. Finally, it is no small irony that we need high-intensity fossil fuel to produce the machinery and infrastructure required for most alternative forms of energy. Sunlight is simply too ‘dilute’ to use in manufacturing the high-tech devices and equipment required for its own conversion to heat and electricity. Industrial civilization faces a paradox: we need oil to move beyond the age of oil.

The human population has grown six-fold in less than 200 years. The global economy has quintupled in less than 50. No factor has played a greater role in the explosive growth of the human enterprise than abundant cheap fossil fuel. No other resource has changed the structure of economies, the nature of technologies, the balance of geopolitics, and the quality of human life as much as petroleum. Little wonder that some scientists believe that passing the peak of world oil production will be a shock to the human enterprise like no other event in history. Population and consumption are still on a steep trajectory but the rocket is running out of fuel.

In this light, ordinary citizens and public service organizations alike should be urging the US government to get real about energy policy and pricing. Significant price increases are long overdue. Waiting longer to act will impose an even greater future burden on those ordinary citizens who will suffer the most from generally rising prices. (A comprehensive program of ecological fiscal reform would include lower income taxes – possibly even a negative income tax for the poorest families – to compensate for rising energy and material costs.)

The data and trends are no secret. Major governments have known about the deteriorating supply situation for years yet prefer to allow the public to wallow in ignorance while hoping something will happen to halt the downward slide. This in turn creates a political climate in which a looming crisis remains invisible and corrective action is impossible. Higher energy prices are needed now to signal the real scarcity to come. Without higher prices we will not invest in the alternative energy technologies needed for a smooth transition to the post-petroleum age. Without higher prices we will not conserve the fossil energy needed to manufacture those alternative technologies. Without higher prices, argues petroleum analyst Richard Duncan, the remaining life expectancy of industrial society may well be less than 40 years!

Sources and additional reading

Adelman, M.A. 1993. The Economics of Petroleum Supply. Cambridge, MA: MIT Press.

Bartlett, A.A. 2000. An Analysis of US and World Oil Production Patterns Using Hubbert-Style Curves. Mathematical Geology 32/1: 1-17.

Brown, L. R. 2000. The rise and fall of the Global Climate Coalition. Worldwatch Issue Alert 2000 - 6 (July 25, 2000)

Campbell, C.C. 1999. The Imminent Peak of World Oil Production. http://www.hubbertpeak.com/campbell/commons.htm

Duncan R. C. 1993. The Life-expectancy of Industrial Civilization: The Decline to General Equilibrium. Population and Environment 14: 325-357.

Duncan R. C. and W. Youngquist. 1999. Encircling the Peak of World Oil Production. Natural Resources Research 8 (3)
219-232.

Fleming, D. 1999. Decoding a Message About the Market for Oil. European Environment 9: 125-134.

Gordon, R.L. 1994. Energy, Exhaustion, Environmentalism, and Etatism. The Energy Journal. 15:1: 1-16.

http://www.dieoff.com

International Centre for Technology Assessment.1998. The Real Price of Gas. Washington: ICTA.

International Energy Agency.1998. World Energy Outlook.

Youngquist, W. 1997. GeoDestinies. Portland: National Book Company

Youngquist, W. 1999. The Post-Petroleum Paradigm - and Population. Population and Environment 20(4): 297-315.

Just discovered this neat economics mailing list headquartered in Canada: http://www.egroups.com/group/ermail The latest message is near and dear to my heart:
UNDERLYING IRRELEVANCE OF ECONOMIC THEORY
at http://www.egroups.com/message/ermail/44
And what's this? The Ex-Cons: Right-Wing Thinkers Go Left! See
http://www.linguafranca.com/print/0101/cover_cons.html

Exerps from FAITH AND CREDIT: The World Bank's Secular Empire, by Susan George, Fabrizio Sabelli;
http://www.amazon.com/exec/obidos/ASIN/0813326079/brainfood.a

[pp. 245-251] "The Thing"

In the late 1980s the Italian Communist Party was undergoing a full-blown identity crisis. Italian Communists had no idea what to call whatever future Party might emerge from the ruins of the post-Gorbachev world. In all the documents, in all the discussions of the time, this as-yet undefined Party was referred to as la Cosa -- the Thing -- an institution in search of a new personality. Since The Godfather, Cosa Nostra -- Our Thing -- has entered all our vocabularies, whatever our language. Calling the Mafia Cosa Nostra is one way of not having to say what it really is.

At Bretton Woods, the founding fathers didn't know what to call the Bank either -- it got its name more or less by default and "Bank" it has remained. Throughout these pages we have tried to determine what the Bank is and at the end of the enterprise we, too, are tempted to call it the Thing because, although we think we have made progress, to some degree it remains fascinating and mysterious. One of the chief attributes of power is not having to say what it is, not having to reveal its true identity, not having to give up its secrets to even the most diligent search.

Thus the question "Why is the Thing so powerful?" is crucial. One thing about the Thing is certain: it is not powerful because it is a bank; that is, in ordinary language, a purely economic entity. Nor is it powerful because it has some of the characteristics one would expect of an international public service organization. It is a political and cultural enterprise, even a modern version of what the pioneer sociologist Marcel Mauss called the "total social phenomenon" (le fait social total). The obvious, financial and economic side of the Bank is only the tip of the proverbial iceberg. The multiple roles it plays and the many functions of power it assumes, like the difficulty of defining it, make the Bank a total social phenomenon, a Thing. This is why throughout the book we have spoken of beliefs, faith, doctrine, prophecy, and fundamentalism; of ancestors, initiation, esprit de corps, intellectual leadership and rule. This is also why, in addition to the facts and the documentary evidence, to the economic and political analysis we have tried to provide, we have made a few unorthodox sorties we called "Interludes" into the world of the imagination. If the Bank were just a bank we would have had no reason to call on fiction. We hope the reader will have found in each chapter and interlude partial answers to the question "Why is the Thing so powerful?" This is the thread we have tried to follow, the one that should bind the book together.

Borrowing from French sociologist Pierre Bourdieu, we can say that the Bank is powerful because of its capacity constantly to exchange economic capital for symbolic capital and vice versa. Its economic activities generate money -- well over a billion dollars a year in profits -- but also immense prestige. Its prestige in turn generates more financial and economic power. The Bank has dug passageways and built bridges that allow it continually to shuttle between material and non-material wealth, to transform one kind of capital investment into another and to reap all the rewards of both.

The Bank is thus in a position to assume functions which are at once economic and symbolic: integration, guidance and, most important, maintenance of a programme of truth. The Bank is the visible hand of the programme of unrestrained, free market capitalism. The Bank's first function is to be an instrument of integration through the market. This market is (or should be) co-extensive with the world; like that of the Church, its vocation is universal. All nations and all people must become ever more tightly bound to it. In this setting, the doctrine of export-orientation finds its natural home. All countries must trade as much as they can and rely for their subsistence first on the world market, last on their own resources.

Until quite recently, even in wealthy countries, communities provided for most of their wants from their domestic, local economies. What they could not find close at hand, they sought at the regional or national level. Only rarely, usually for luxury items, would they have recourse to the world market. This historical pattern has been turned on its head: we are now exhorted to satisfy our needs first from the international, global market, then the national or regional one and so on, down the ladder to the domestic economy, lowliest of all. The Bank's second function is to act as a guide. Those who believe that its own doctrine is that of laisser-faire are mistaken. The Bank is, in fact, far more interventionist than the interventionist governments whose policies it seeks to transform. If the Bank were to leave people and societies alone, anything could happen -- they might operate not on the basis of the marketplace but on principles of reciprocity, redistribution or solidarity. In modern societies, the state has attempted, with greater or lesser success, to organize redistribution and solidarity. Thus the state, like the traditional society based on reciprocity, is under threat from the Bank.

Here we face a contradiction. The marketplace cannot be the natural habitat of humankind. If it were, the Bank's interventions would be unnecessary. Everywhere the market would already be the sole guiding principle of society and, if it were, in the Bank's own view, there would be no underdevelopment, no South, no need for modernization or for structural adjustment -- and no need for the Bank.

Why do we think we need the Bank? For the same reasons we think we need the Church. Frail, imperfect humanity needs constraints, guardrails, continual instruction in, and interpretation of, the doctrine. Those who have not yet reached the full expression of market capitalism and consequent development, those who fall by the wayside, must be goaded along the path to salvation.

To change society one must also change individual men and women. Man must be ontologically reconstructed and redeemed as homo economicus. What is redemption if not the passage from one state to another, from darkness to light? The virtues of the New Economic Man, whose dwelling place is the market, are the will and the capacity to accumulate, to follow self-interest and to maximize profit in all things. His wants are unlimited; to satisfy them, he must learn to struggle against his fellows. Scarcity is a fact of life. There is not enough to satisfy the unlimited desires of all nor to provide a place in the sun for everyone. If unemployment in their country is twenty per cent or more, the New Men and Women will pit themselves against each other to find work at any price, at all costs.

The Bank's third function is to be the standard-bearer of a programme of truth. If the world market is the Bank's fundamental organizing principle, price is its instrument. One of the Bank's major articles of faith is "getting the prices right", which it translates in French as la verite des prix, the truth of prices. A price has a metaphysical quality because it is supposed to be the invisible point at the intersection between hundreds, thousands, millions of individual transactions. Price, if governments do not meddle by providing subsidies and otherwise distort the natural balance of things, will regulate human activity and necessarily bring order out of apparent chaos.

Those who deny a programme of truth defy the law, in the case of the Bank the laws of economics, structural adjustment and the market. With the International Monetary Fund, the Bank is the keeper of laws which, like the Ten Commandments, are immutable. Once revealed, they must be followed.

Defiant countries that refuse them outright are blacklisted, literally excommunicated from the international community. Governments which receive the law halfheartedly must be exhorted to better performance. The Bank will reward or punish them by the granting or withholding of loans and credits. Thus it helps return them to the straight and narrow path or, in its own words, puts them back on-track.

If the New Man finds his life in the market, what of his death? All great truths must in one way or another speak of last things; the Bank's is no exception. The Bank's nominal mission is to promote development. Development in its biological sense means an organism's attainment of its inherent potential, inexorably followed by decay and death. In the Bank's vocabulary, however, this biological meaning is replaced by a concept of never-ending growth. The Bank's priesthood specifically denies limits to growth and promises an ersatz eternity in the here-and-now. If such endless growth is supposed to lead to an American or European middle-class standard of living for over five billion people today and who knows how many tomorrow, we already know this to be an ecological and biospheric impossibility, even assuming tremendous and rapid changes in technology. The Bank refuses to confront this last of all last things -- not merely individual or societal death but the possibility of species extinction, including that of the human species. Incantations like "sustainable development" stave off the moment when the finite must at last be faced.

The Church's traditional imagery of heaven and of hell is graphic and explicit. Although it cannot prove that anyone has ever gone there, it still issues the visas to the promised land. The Bank paints no pictures with saints, angels and demons but it does put up signposts pointing towards paradise, exhorting the faithful to imitate the blessed -- the now-developed rich market-economy countries or at least those who are well on their way, like the Asian tigers.

The very vagueness of the concept of development and the great number of candidates who hope to attain it legitimize the Bank's functions, justify its existence and explain its power. As long as the fragile planet's heavenward journey lasts, as long as the poor are with us, as long as salvation is sought where it cannot be found, the World Bank will find for itself a role and a mission.

FAITH AND CREDIT: The World Bank's Secular Empire, by Susan George, Fabrizio Sabelli;
http://www.amazon.com/exec/obidos/ASIN/0813326079/brainfood.a

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Jay Hanson

Whatta Hero!