Are We Prepared if Saudi Oil Production Collapses?
Iranian threats to block oil shipping in the Strait of Hormuz, if acted upon, could disrupt the global energy supply and cause oil prices to spike. However, as this report suggests, this scenario is relatively short term. It leaves the oil-producing infrastructure intact, and prices would stabilize if military action, led by the United States, and a coordinated international response successfully restore security to the sea-lanes.
However, policymakers need to consider a more dangerous scenario: the collapse of Saudi Arabia’s oil production caused by a massive social upheaval like those that have toppled regimes in Tunisia, Egypt, and Libya.
In 2006, 2008, and 2010, simulations were conducted to assess the strategic and economic impact of a major disruption of energy supply caused by Iranian military action in the Strait of Hormuz or by coordinated terrorist attacks on key nodes in the global energy infrastructure. This report uses the methodology developed in these previous reports and builds on their findings and models. It examines a situation in which an “Arab Spring” uprising disrupts Saudi oil production, causing a total cessation of oil production for one year—a drop of 8.4 million barrels per day (mbd)—followed by a two-year recovery.
Ariel Cohen, David Kreutzer, James Phillips, Michaela Bendikova April 15th 2012
Limits to Growth – of Stuff, Value, and GDP
by Brian Czech
A recent example comes from Tim Worstall, a business and technology writer for Forbes. Like the long lineage of Homo polyannas before him, he assures his poor readers that we can have perpetually growing GDP without using more resources. He uses a variety of the old "growth is more value, not stuff" argument.
Worstall says, "It really is true that as value increases we have economic growth. And how are we determining that value? Through the market prices that people are willing to pay for them. And what is the determinant of that? Well, actually, it’s us. Our own often arbitrary and always subjective estimations of what something is worth to us. Which isn’t, as I hope can be seen, something that is bounded by any physical limit at all."
What evidence does Mr. Worstall have to support his notion that our estimations of value are unbounded? I don’t recall having or hearing of an experience where something just seemed to increase in value more, more yet, and forevermore. Do you? Now it may have seemed that way for some short period of time with something like coffee. But unless you’re moving into ecstasy ad nauseum – an oxymoron if there ever was one – the value of the experience was bounded. Right?
Global oil production trouble - it's not just Iran
It's not just Iran driving up oil prices. From South Sudan to Canada, over a million barrels of oil a day are not available to world markets.
NEW YORK (CNNMoney) -- All the attention may be on a loss of oil from Iran these days, but production outages in a variety of spots worldwide is causing about one million barrels of oil a day to sit on the sidelines, helping push oil and gas prices to near record highs.
In places like South Sudan, Yemen and Syria the oil is offline due to violence. In Canada and the North Sea it's due to technical problems.
By Steve Hargreaves @CNNMoneyMarkets April 5, 2012
The Race for BTUs
|The Race for BTUs Has Begun|
This will not be high-quality growth. And little of the growth will be real.
Commodity prices will surely eat away at most, if not all, of any gains that may occur in global GDP. Additionally, while non-OECD growth actually has a chance of achieving some GDP gains in real terms, the prospects for the OECD are not as encouraging.
It’s important to put yourself in the minds of OECD policy makers. They are largely managing a retirement class that is moving out of the workforce and looking to draw upon its savings -- savings that are (mostly) in real estate, bonds, and equities. Given this demographic reality, growth in nominal terms is undoubtedly the new policy of the West.
While it’s unclear how long a post-credit bubble world can sustain such period of forced growth, what is perfectly clear is that oil is no longer available to fund such growth. For the seventh year since 2005, global oil production in 2011 failed to surpass 74 mbpd (million barrels per day) on an annual basis. But while the West is set to dote upon its retirement class for many years to come, the five billion people in the developing world are ready to undertake the next leg of their industrial growth. They are already using oil at the margin as their populations urbanize. But as the developing world comes on board as new users of petroleum, they still need growing resources of other energy to fund the new growth which now lies ahead of them.
This unchangeable fact sets the world on an inexorable path: a competitive race for BTUs.
Tuesday, April 3, 2012, 9:57 pm, by Gregor Macdonald
Time Running Out for Sustainable Future:
Worldwatch maps sustainable 'good life', warns great changes must be made before it's too late.
The planet will not be able to sustain levels of consumption typical of today's 'consumer class' without irreparable consequences to the globe, according to the just released Worldwatch Institute in State of the World 2012: Moving Toward Sustainable Prosperity. They have proposed a redefinition of 'the good life' as one that aligns with sustainable practices and have mapped out a hopeful plan leading up to this year's Rio+20; however, the plan's window of opportunity is quickly closing.
"The aspirations of the original 1992 meeting in Rio collided with a set of painfully sobering developments, including unfriendly politics, orthodox economics, and a dominant culture of consumerism. The 20 years since then have made it clear that necessary change is not merely technical, but encompasses changes in lifestyle, culture, and politics," states Worldwatch.
"There won't be much point in revisiting the Rio+20 conference in another 20 years to try to figure out what went wrong," says Worldwatch President Robert Engelman.
Common Dreams staff, Tuesday, April 3, 2012
R.I.P. The American Suburban Shopping Mall
Writing on Newsweek's web site, Tony Dokoupil suggests that the end may be near for enclosed regional shopping malls as we have known them:
"But what makes Xanadu [a huge mall under construction in the New Jersey Meadowlands] extraordinary is the fact that it is emerging just as the American mall-that most quintessential of American institutions-is in its dying throes, if not already dead. Moribund malls have not gone unnoticed amongst industry analysts and Web sites like Deadmalls.com that feature photos of hundreds of now-abandoned sites.
by Kaid Benfield, December 9, 2008
Fisheries Management: Sustaining The "Wicked Tuna"
Bluefin tuna is one of the poster children for overfishing. So one might expect that "Wicked Tuna," the National Geographic Channel’s new series about bluefin tuna fishermen in Gloucester, Massachusetts, would take a fairly conservation-minded perspective on fishermen’s efforts to capture these majestic giants, some of which can grow to more than 1,000 pounds and more than eight feet in length.
In fact, National Geographic deals its viewers a fairly even-handed look at the bluefin tuna. And ultimately, the takeaway message may be that ironically the best way Americans can help save this fish is by supporting New England's artisanal bluefin fishery.
Bluefin is an internationally managed species. The fish migrate across entire oceans over the course of their lifetimes, through international waters and in and out of multiple countries' jurisdictions. So their management falls to an intergovernmental body: the International Commission on Conservation of Atlantic Tunas, or ICCAT. This organization's effectiveness is questionable at best, and the word most often used to describe it is "dysfunctional."
by Michael Conathan, Apr 2, 2012
We Screwed Up: A Letter of Apology to My Granddaughter
I became politically active and committed on the day 20 years ago when I realized I could stand on the front porch of my house and point to three homes where children were in wheelchairs, to a home where a child had just died of leukemia, to another where a child was born missing a kidney, and yet another where a child suffered from spina bifida. All my parental alarms went off at once and I asked the obvious question: What's going on here?
Today my three kids are, thankfully, healthy adults. But now that grandchildren are being added to our family, my blood runs cold whenever I project out 50 years and imagine, "what their world will be like at middle age" assuming they get that far and that there is still a recognizable 'world' to be part of. I wrote the following letter to my granddaughter, Madeline, who is almost four years old. Although she cannot read it today, I hope she will read it in a future that proves so much better than the one that is probable, and so terribly unfair. I'm sharing this letter with other parents and grandparents in the hope that it may move them to embrace their roles as citizens and commit to the hard work of making the planet viable, the economy equitable, and our culture democratic for the many Madelines to come.
Mar 28, 2012