We won a victory in March when over 100,000 people helped make climate change the number1 issue for this summit - but the resistance from vested interests is rising. The summit is days away. Please join me in signing the petition here:
http://www.avaaz.org/en/climate_g8/tf.php
Thanks!
Jason
But our President has basically told Chávez to take his cheaper oil and stick it up his pipeline. Before I explain why Bush has done so, let me explain why Chávez has the power to pull it off—and the method in the seeming madness of his “take-my-oil-please!” deal.
Venezuela, Chávez told me, has more oil than Saudi Arabia. A nutty boast? Not by a long shot. In fact, his surprising claim comes from a most surprising source: the U.S. Department of Energy. In an internal report, the DOE estimates that Venezuela has five times the Saudis’ reserves.
However, most of Venezuela’s mega-horde of crude is in the form of “extra-heavy” oil—liquid asphalt—which is ghastly expensive to pull up and refine. Oil has to sell above $30 a barrel to make the investment in extra-heavy oil worthwhile. A big dip in oil’s price—and, after all, oil cost only $18 a barrel six years ago—would bankrupt heavy-oil investors. Hence Chávez’s offer: Drop the price to $50—and keep it there. That would guarantee Venezuela’s investment in heavy oil.
But the ascendance of Venezuela within OPEC necessarily means the decline of the power of the House of Saud. And the Bush family wouldn’t like that one bit. It comes down to “petro-dollars.” When George W. ferried then-Crown Prince (now King) Abdullah of Saudi Arabia around the Crawford ranch in a golf cart it wasn’t because America needs Arabian oil. The Saudis will always sell us their petroleum. What Bush needs is Saudi petro-dollars. Saudi Arabia has, over the past three decades, kindly recycled the cash sucked from the wallets of American SUV owners and sent much of the loot right back to New York to buy U.S. Treasury bills and other U.S. assets.
The Gulf potentates understand that in return for lending the U.S. Treasury the cash to fund George Bush’s $2 trillion rise in the nation’s debt, they receive protection in return. They lend us petro-dollars, we lend them the 82nd Airborne.
Chávez would put an end to all that. He’ll sell us oil relatively cheaply—but intends to keep the petro-dollars in Latin America. Recently, Chávez withdrew $20 billion from the U.S. Federal Reserve and, at the same time, lent or committed a like sum to Argentina, Ecuador, and other Latin American nations.
Chávez, notes The Wall Street Journal, has become a “tropical IMF.” And indeed, as the Venezuelan president told me, he wants to abolish the Washington-based International Monetary Fund, with its brutal free-market diktats, and replace it with an “International Humanitarian Fund,” an IHF, or more accurately, an International Hugo Fund. In addition, Chávez wants OPEC to officially recognize Venezuela as the cartel’s reserve leader, which neither the Saudis nor Bush will take kindly to.
Politically, Venezuela is torn in two. Chávez’s “Bolivarian Revolution,” a close replica of Franklin Roosevelt’s New Deal—a progressive income tax, public works, social security, cheap electricity—makes him wildly popular with the poor. And most Venezuelans are poor. His critics, a four-centuries’ old white elite, unused to sharing oil wealth, portray him as a Castro-hugging anti-Christ.
Chávez’s government, which used to brush off these critics, has turned aggressive on them. I challenged Chávez several times over charges brought against Súmate, his main opposition group. The two founders of the nongovernmental organization, which led the recall campaign against Chávez, face eight years in prison for taking money from the Bush Administration and the International Republican [Party] Institute. No nation permits foreign funding of political campaigns, but the charges (no one is in jail) seem like a heavy hammer to use on the minor infractions of these pathetic gadflies.
Bush’s reaction to Chávez has been a mix of hostility and provocation. Washington supported the coup attempt against Chávez in 2002, and Condoleezza Rice and Donald Rumsfeld have repeatedly denounced him. The revised National Security Strategy of the United States of America, released in March, says, “In Venezuela, a demagogue awash in oil money is undermining democracy and seeking to destabilize the region.”
So when the Reverend Pat Robertson, a Bush ally, told his faithful in August 2005 that Chávez has to go, it was not unreasonable to assume that he was articulating an Administration wish. “If he thinks we’re trying to assassinate him,” Robertson said, “I think that we really ought to go ahead and do it. It’s a whole lot cheaper than starting a war . . . and I don’t think any oil shipments will stop.”
There are only two ways to defeat the rise of Chávez as the New Abdullah of the Americas. First, the unattractive option: Cut the price of oil below $30 a barrel. That would make Chávez’s crude worthless. Or, option two: Kill him.
Q: Your opponents are saying that you are beginning a slow-motion dictatorship. Is that what we are seeing?
Hugo Chávez: They have been saying that for a long time. When they’re short of ideas, any excuse will do as a vehicle for lies. That is totally false. I would like to invite the citizens of Great Britain and the citizens of the U.S. and the citizens of the world to come here and walk freely through the streets of Venezuela, to talk to anyone they want, to watch television, to read the papers. We are building a true democracy, with human rights for everyone, social rights, education, health care, pensions, social security, and jobs.
Q: Some of your opponents are being charged with the crime of taking money from George Bush. Will you send them to jail?
Chávez: It’s not up to me to decide that. We have the institutions that do that. These people have admitted they have received money from the government of the United States. It’s up to the prosecutors to decide what to do, but the truth is that we can’t allow the U.S. to finance the destabilization of our country. What would happen if we financed somebody in the U.S. to destabilize the government of George Bush? They would go to prison, certainly.
Q: How do you respond to Bush’s charge that you are destabilizing the region and interfering in the elections of other Latin American countries?
Chávez: Mr. Bush is an illegitimate President. In Florida, his brother Jeb deleted many black voters from the electoral registers. So this President is the result of a fraud. Not only that, he is also currently applying a dictatorship in the U.S. People can be put in jail without being charged. They tap phones without court orders. They check what books people take out of public libraries. They arrested Cindy Sheehan because of a T-shirt she was wearing demanding the return of the troops from Iraq. They abuse blacks and Latinos. And if we are going to talk about meddling in other countries, then the U.S. is the champion of meddling in other people’s affairs. They invaded Guatemala, they overthrew Salvador Allende, invaded Panama and the Dominican Republic. They were involved in the coup d’état in Argentina thirty years ago.
Q: Is the U.S. interfering in your elections here?
Chávez: They have interfered for 200 years. They have tried to prevent us from winning the elections, they supported the coup d’état, they gave millions of dollars to the coup plotters, they supported the media, newspapers, outlaw movements, military intervention, and espionage. But here the empire is finished, and I believe that before the end of this century, it will be finished in the rest of the world. We will see the burial of the empire of the eagle.
Q: You don’t interfere in the elections of other nations in Latin America?
Chávez: Absolutely not. I concern myself with Venezuela. However, what’s going on now is that some rightwing movements are transforming me into a pawn in the domestic politics of their countries, by making statements that are groundless. About candidates like Morales [of Bolivia], for example. They said I financed the candidacy of President Lula [of Brazil], which is totally false. They said I financed the candidacy of Kirchner [of Argentina], which is totally false. In Mexico, recently, the rightwing party has used my image for its own profit. What’s happened is that in Latin America there is a turn to the left. Latin Americans have gotten tired of the Washington consensus—a neoliberalism that has aggravated misery and poverty.
Q: You have spent millions of dollars of your nation’s oil wealth throughout Latin America. Are you really helping these other nations or are you simply buying political support for your regime?
Chávez: We are brothers and sisters. That’s one of the reasons for the wrath of the empire. You know that Venezuela has the biggest oil reserves in the world. And the biggest gas reserves in this hemisphere, the eighth in the world. Up until seven years ago, Venezuela was a U.S. oil colony. All of our oil was going up to the north, and the gas was being used by the U.S. and not by us. Now we are diversifying. Our oil is helping the poor. We are selling to the Dominican Republic, Haiti, Cuba, some Central American countries, Uruguay, Argentina.
Q: And the Bronx?
Chávez: In the Bronx it is a donation. In all the cases I just mentioned before, it is trade. However, it’s not free trade, just fair commerce. We also have an international humanitarian fund as a result of oil revenues.
Q: Why did George Bush turn down your help for New Orleans after the hurricane?
Chávez: You should ask him, but from the very beginning of the terrible disaster of Katrina, our people in the U.S., like the president of CITGO, went to New Orleans to rescue people. We were in close contact by phone with Jesse Jackson. We hired buses. We got food and water. We tried to protect them; they are our brothers and sisters. Doesn’t matter if they are African, Asian, Cuban, whatever.
Q: Are you replacing the World Bank and the International Monetary Fund as “Daddy Big Bucks”?
Chávez: I do wish that the IMF and the World Bank would disappear soon.
Q: And it would be the Bank of Hugo?
Chávez: No. The International Humanitarian Bank. We are just creating an alternative way to conduct financial exchange. It is based on cooperation. For example, we send oil to Uruguay for their refinery and they are paying us with cows.
Q: Milk for oil.
Chávez: That’s right. Milk for oil. The Argentineans also pay us with cows. And they give us medical equipment to combat cancer. It’s a transfer of technology. We also exchange oil for software technology. Uruguay is one of the biggest producers of software. We are breaking with the neoliberal model. We do not believe in free trade. We believe in fair trade and exchange, not competition but cooperation. I’m not giving away oil for free. Just using oil, first to benefit our people, to relieve poverty. For a hundred years we have been one of the largest oil-producing countries in the world but with a 60 percent poverty rate and now we are canceling the historical debt.
Q: Speaking of the free market, you’ve demanded back taxes from U.S. oil companies. You have eliminated contracts for North American, British, and European oil companies. Are you trying to slice out the British and American oil companies from Venezuela?
Chávez: No, we don’t want them to go, and I don’t think they want to leave the country, either. We need each other. It’s simply that we have recovered our oil sovereignty. They didn’t pay taxes. They didn’t pay royalties. They didn’t give an account of their actions to the government. They had more land than had previously been established in the contracts. They didn’t comply with the agreed technology exchange. They polluted the environment and didn’t pay anything towards the cleanup. They now have to comply with the law.
Q: You’ve said that you imagine the price of oil rising to $100 dollars per barrel. Are you going to use your new oil wealth to squeeze the planet?
Chávez: No, no. We have no intention of squeezing anyone. Now, we have been squeezed and very hard. Five hundred years of squeezing us and stifling us, the people of the South. I do believe that demand is increasing and supply is dropping and the large reservoirs are running out. But it’s not our fault. In the future, there must be an agreement between the large consumers and the large producers.
Q: What happens when the oil money runs out, what happens when the price of oil falls as it always does? Will the Bolivarian revolution of Hugo Chávez simply collapse because there’s no money to pay for the big free ride?
Chávez: I don’t think it will collapse, in the unlikely case of oil running out today. The revolution will survive. It does not rely solely on oil for its survival. There is a national will, there is a national idea, a national project. However, we are today implementing a strategic program called the Oil Sowing Plan: using oil wealth so Venezuela can become an agricultural country, a tourist destination, an industrialized country with a diversified economy. We are investing billions of dollars in the infrastructure: power generators using thermal energy, a large railway, roads, highways, new towns, new universities, new schools, recuperating land, building tractors, and giving loans to farmers. One day we won’t have any more oil, but that will be in the twenty-second century. Venezuela has oil for another 200 years.
Q: But the revolution can come to an end if there’s another coup and it succeeds. Do you believe Bush is still trying to overthrow your government?
Chávez: He would like to, but what you want is one thing, and what you cannot really obtain is another.
Investigative reporter Greg Palast, who interviewed President Hugo Chávez for the British Broadcasting Corporation (BBC), is the author of “Armed Madhouse: Dispatches from the Front Lines of the Class War," from which this adaptedThe press dispatches bring the news; it belongs to the Astute Class, the first of its kind to be constructed in Great Britain in more than two decades.
“A nuclear reactor will allow it to navigate without refueling during its 25 years of service. Since it makes its own oxygen and drinking water, it can circumnavigate the globe without needing to surface,” was the statement to the BBC by Nigel Ward, head of the shipyards.
“It’s a mean-looking beast”, says another.
“Looming above us is a construction shed 12 stories high. Within it are 3 nuclear-powered submarines at different stages of construction,” assures yet another.
Someone says that “it can observe the movements of cruisers in New York Harbor right from the English Channel, drawing close to the coast without being detected and listen to conversations on cell phones”. “In addition, it can transport special troops in mini-subs that, at the same time, will be able to fire lethal Tomahawk missiles for distances of 1,400 miles", a fourth person declares.
El Mercurio, the Chilean newspaper, emphatically spreads the news.
The British Royal Navy declares that it will be one of the most advanced in the world. The first of them will be launched on June 8 and will go into service in January of 2009.
It can transport up to 38 Tomahawk cruise missiles and Spearfish torpedoes, capable of destroying a large warship. It will possess a permanent crew of 98 sailors who will even be able to watch movies on giant plasma screens.
The new Astute will carry the latest generation of Block 4 Tomahawk torpedoes, which can be reprogrammed in flight. It will be the first one not having a system of conventional periscopes and, instead, will be using fiber optics, infrared waves and thermal imaging.
“BAE Systems, the armaments manufacturer, will build two other submarines of the same class,” AP reported. The total cost of the three submarines, according to calculations that will certainly be below the mark, is 7.5 billion dollars.
What a feat for the British! The intelligent and tenacious people of that nation will surely not feel any sense of pride. What is most amazing is that with such an amount of money, 75 thousand doctors could be trained to care for 150 million people, assuming that the cost of training a doctor would be one-third of what it costs in the United States. You could build 3,000 polyclinics, outfitted with sophisticated equipment, ten times what our country possesses.
Cuba is currently training thousands of young people from other countries as medical doctors.
In any remote African village, a Cuban doctor can impart medical knowledge to any youth from the village or from the surrounding municipality who has the equivalent of a 12th-grade education, using videos and computers energized by a small solar panel; the youth does not even have to leave his hometown, nor does he need to be contaminated with the consumer habits of a large city.
The important thing is the patients who are suffering from malaria or any other of the typical and unmistakable diseases that the student will be seeing together the doctor.
The method has been tested with surprising results. The knowledge and practical experience accumulated for years have no possible comparison.
The non-lucrative practice of medicine is capable of winning over all noble hearts.
Since the beginning of the Revolution, Cuba has been engaged in training doctors, teachers and other professionals; with a population of less than 12 million inhabitants, today we have more Comprehensive General Medicine specialists than all the doctors in sub-Saharan Africa where the population exceeds 700 million people.
We must bow our heads in awe after reading the news about the English submarine. It teaches us, among other things, about the sophisticated weapons that are needed to maintain the untenable order developed by the United States imperial system.
We cannot forget that for centuries, and until recently, England was called the Queen of the Seas. Today, what remains of that privileged position is merely a fraction of the hegemonic power of her ally and leader, the United States.
Churchill said: Sink the Bismarck! Today, Blair says: Sink whatever remains of Great Britain’s prestige!
For that purpose, or for the holocaust of the species, is what his “marvelous submarine” will be good for.
Fidel Castro Ruz
May 21, 2007
5:00 p.m.An alternative to fossil fuel
We all know that driving is a major contributor to global warming - for the average UK citizen 19% of their carbon footprint comes from car use. But what if we could power our vehicles with something other than fossil fuels? This is the tempting prospect of ‘biofuels’ - fuels derived from organic matter.
Bioethanol, used as a substitute for petrol, is usually made from sugar beat or corn, whilst bio-diesel is produced from various plant oils. Brazil has long used ethanol extensively, with half of its sugar cane crop going into transport fuel. Most cars can burn petrol blended with up to 10% bioethanol without any modifications to the engine, and some new cars can burn pure bioethanol. Biodiesel can be used in place of normal diesel without modification to the engine.
The hope is that both offer the potential of cutting greenhouse gas emissions quickly with minimal modification to existing vehicles and fuel infrastructure. A recent study conducted by Sheffield Hallam University suggested CO2 savings in the region of 70% for biodiesel compared to petroleum diesel.[1] In the hope of capitalising on reduced emissions European Union law has set a target that by 2010 all vehicle fuels must be blended with 5.75% biofuels. According to a recent report by the Worldwatch Institute biofuels can significantly reduce global dependence on oil - and biofuel production has doubled since 2001.
So why has well-known environmental campaigner George Monbiot called biofuels “the most destructive crop on earth”?[2]
Do the numbers add up?
In the US, with federal subsidies for ethanol production, at least 39 new ethanol plants will be completed over the next year, adding 30% to current production and pushing the US passed Brazil as the world’s largest ethanol producer.[3] But with world biofuel production at 670,000 barrels per day, that is only equivalent to about 1 % of the global transport fuel market.[4]
Brazil produces 10% of its entire fuel consumption from just 3% of its agricultural land – an attractive prospect. But Brazilians drive far less than Europeans and Americans, their crop yields are higher due to climate and soil fertility, and their population density is lower than in the West.[5] The Worldwatch study estimates that for the US to achieve that 10% target would require that 30% of its agricultural land be dedicated to biofuels - and for Europe a wholly unrealistic 72% would be needed.
Ethanol Gold Rush
The reality is that 15% of the US’s corn crop is allocated toward ethanol production, and this has already caused corn prices to rise 30%, causing an across-the-board increase in food prices[6]. Using crops normally grown for the food for fuel instead creates massive increases in demand and hence large price increases. For the US to replace the oil it imports from the Persian Gulf with corn-based ethanol would take at least half the nation’s farmland.[7] Some experts in the US are arguing that at the current pace of development, ethanol production could strain food supplies and force the use of marginal farmland set aside for conservation. It takes four to five gallons of water to produce one gallon of ethanol and ethanol production threatens to deplete groundwater aquifers in the US Midwest, which also supply agriculture.
Despite these many problems it is not even clear that ethanol will actually reduce carbon emissions. Fossil fuels are used at every stage of the process from growing corn with petroleum-based fertilizers, herbicides and pesticides, to oil to run tractors, to natural gas used in the distillation process to turn corn into ethanol through to transporting the ethanol to blending facilities by truck and rail. Several studies show that obtaining ethanol from corn actually consumes more energy than ethanol provides!
Lester Brown has described the boom in bioethanol as a competition between the 800 million people in the world who own cars with the 3 billion people who struggle to feed themselves on less than $2 a day. The corn required to fill an SUV tank with bioethanol just once could feed one person for an entire year[8].
Palm Oil Controversy
In Europe there is no way to meet the modest 2010 target for blending fossil fuels with biofuel utilising crops from European land, so the target will be met with massive imports of vegetable oils.
Importing vegetable oils might sound benign compared to drilling more oil wells – but the reality is far from it, involving the destruction of virgin rainforests and the potential extinction of the orang-utans that live in them. Palm oil produces significantly better yields of biofuel per hectare than other crops and so is the crop of choice for an international biodiesel market. It is grown mainly in rainforest areas in South East Asia and development of new plantations has resulted in the destruction of large areas of virgin forests with high conservation value and rich biodiversity. Moreover the destruction is occurring at a time when it is essential that the world preserves rainforest or face climate chaos.
Malaysia and Indonesia, which together dominate the world market for palm oil, announced a joint plan in July to set aside 40% of their palm oil output for biodiesel production.[9]
Palm oil is also a common ingredient in processed food and cosmetic products and in the UK Friends of the Earth and Co-operative Insurance have worked hard to persuade all the biggest UK food retailers to join the Roundtable for Sustainable Palm Oil, which is seeking to establish standards for the sustainable production of the oil. The use of palm oil as a replacement for crude oil is unsustainable and will cause more problems than it solves. This is also the case for soy oil coming from farms in Brazil - where the Amazon rainforest is being cleared to make way for the expansion of huge fields growing soy.
Technology to the rescue?
Researchers are discovering ways to produce bioethanol without using food crops, and instead focusing on converting cellulose-rich organic matter into ethanol. Cellulose is the main structural component of all green plants and developing an efficient process to convert cellulose into ethanol could enable the use of non-food materials such as straw, crop residues like stalks, hardwood chips, even paper, cardboard and food waste. Switchgrass, a wild grass the grows in the US on land unsuitable for food crops has also been suggested as a feedstock and some suggest cellulosic ethanol could provide twice the yield of current corn ethanol[10].
As for biodiesel there are potential substitutes for environmentally damaging palm oil that look promising, such as Jatropha and microalgae, but more development of these is still needed.
One emerging technology even utilises algae to convert the CO2 produced by power plants into biofuel, creating a cycle that takes the carbon from the smokestack to the petrol tank before it enters the atmosphere[11].
Exciting though these technologies are they still cannot provide the immediate cuts in green house gas emissions needed if we are to tackle climate change - we simply cannot afford to wait in hope for a technological fix.
Sustainable Biofuels
This is not to say all biofuels is unsustainable - but we cannot simply replace an international market in oil with one in biofuels. Biofuels are not a panacea which enable ‘business as usual’ – the profligate use of energy and the careless waste of resources.
For example, Green Gold Biodiesel in Manchester, the first dedicated biodiesel garage in the UK, follows best practice in producing biodiesel using renewable feedstocks, and wherever possible used cooking oil. Utilising a resource that would otherwise be waste allows a far greater reduction in carbon dioxide emissions than for virgin oil The British Association for Biofuels and Oils estimates the volume of waste cooking oil in the UK at 100,000 tonnes a year[12] - but that is enough to meet only one 380th of our demand for road transport fuel[13].
Ultimately, it is not just the fuel that needs to change; it is the lifestyle that makes use of it.
[4] Biofuels for Transportation: Global Potential and Implications for Sustainable Agriculture and Energy in the 21st Century
[6] “Ethanol production comes at a high price” Rutland Herald, September 10, 2006
[7] ALEXEI BARRIONUEVO “Boom in Ethanol Reshapes Economy of Heartland” New York Times June 25, 2006
[8] George Monbiot “Biodiesel enthusiasts have accidentally invented the most carbon-intensive fuel on earth” The Guardian 6th December 2005
[9] Fred Pearce “Fuels gold: Big risks of the biofuel revolution” New Scientist, 25 September 2006
[10] Fred Pearce “Fuels gold: Big risks of the biofuel revolution” New Scientist, 25 September 2006
[11] Phil Mckenna “Biofuel made from power plant CO2 “ New Scientist, 6 October 2006
[13] George Monbiot. “Biodiesel enthusiasts have accidentally invented the most carbon-intensive fuel on earth” The Guardian 6th December 2005
”A surplus of available energy is a remarkable historical and biological anomaly. A supply of oil that exceeds demand has permitted us to do what all species strive to do - expand the ecological space we occupy - but without encountering direct competition for the limiting resource” George Monbiot
“Governments are in denial about the scale of what is needed to be done. We are moving into a new world without maps.” Chris Skrebowski (editor of Petroleum Review)
The era of cheap oil is over. Increasingly, informed observers are coming to the conclusion we are near the peak of oil production. When we move past the peak we enter an era when the forces contributing to global warming are likely to increase rather than decrease. If we are to tackle climate change we need to develop a strategy of ‘powering down’ from the peak and managing the transition to a sustainable world. The alternative is accelerating climate change and competition over dwindling resources.
What is ‘peak oil’?
Not so many years ago the idea that the world’s climate was warming up due, largely, to the burning of fossil fuels was considered outlandish by mainstream science and was unheard of by the general public. Today the vast majority of scientists agree that to avoid radical changes in temperature and climate chaos action is urgently needed to reduce green house emissions. ‘Global warming’ is now an everyday phrase.
In the last couple of years another phrase, ‘peak oil,’ has begun moving from obscurity to the mainstream. A few years ago you would be unlikely to hear the term used except by a small group of ex-oil industry geologists and engineers who disagreed with the statistics that the oil industry published. In the last year you might have come across the phrase in Time Magazine , in a pull out supplement in The Independent , on a popular financial advice website or even in the US House of Representatives .
Peak oil theory states that oil production in any given area follows a bell shaped curve when charted on a graph, with the peak of production occurring when approximately half of the oil has been extracted. In the US for example, oil production grew steadily until 1970 and declined thereafter, regardless of market price or improved technologies. The amount of oil discovered in the US has dropped since the late 1930s; 40 years later, US oil production had peaked, and has fallen ever since. Similarly North Sea production is declining at an increasing rate, having peaked in 1999. World discovery of oil peaked in the 1960s, and has declined since then. If the 40 years gap between the peak of discovery and the peak of production in the US holds true for world oil production, that puts global peak oil production right about now. The exact time at which the peak is reached will only be known in retrospect.
So the idea of peak oil is not that oil is running out it is the idea that the world reaches a point where there is never any further increase in the amount of oil being produced; after that point oil becomes less available, and more and more expensive. Supply cannot meet demand; and demand is increasing rapidly. What has really changed the picture regarding world demand is the economic growth of China. Chinese oil demand doubled within the last ten years; it is predicted to double again within the next 15 years.
Does the oil industry agree that the world is at or near peak production? Officially, no. And the industry has a strong incentive not to, because share prices depend heavily on how much oil companies claim to have in their reserves. Shell was forced in January 2004 to admit it had lied about its reserve figures, which were over-estimated by 20%. The Chief Executive and Head of Exploration were forced to resign and Shell directors are currently facing criminal charges in the US for misleading their shareholders. Shell’s replacement CEO, Mr. van der Veer told the press in November 2004 “There is something strange going on in this business”. The Economist noted: “Industry analysts and investors are quietly saying that Mr van der Veer may be right, and another big reserves scandal may be brewing somewhere.”1
There is intense disagreement concerning how big the oil reserves are and how much reasonably can be expected from future discoveries. The more oil in the ground the later the peak of production will be. But companies and countries report their figures for reserves without any independent verification and so the statistics are hotly contested.
The reserves in the Middle East dwarf those elsewhere. Saudi Aramco, the Saudi state oil company, is 20 times bigger than ExxonMobil, the largest Western oil corporation. Between 1988 and 1990 the Middle Eastern members of OPEC (the Organisation of Petroleum Exporting States) announced huge increases in their reserves, of between 42% and 197%.2 Very little new exploration had been done so where was all this new oil coming from? According to OPEC rules the amount of oil member states are allowed to produce and sell is determined in relation to their level of stated reserves. With double the stated reserves they allowed themselves to sell double the oil. When the industry or governments tell us that the peak of oil production is a long way off they are basing this claim on these uncorroborated figures. The US and UK governments did not trust Saddam Hussein when he said he had no weapons of mass destruction. They have had no such qualms in believing his figures for oil reserves.
Dr Mamdouh Salameh, an oil consultant to the World Bank, estimates there is a 300-billion-barrel exaggeration in OPEC’s reserves.3 This ‘exaggeration’ amounts to about 100 years of consumption at today’s rates, or about 13% of the total amount of oil the International Energy Agency claims has been or ever will be discovered in the world.4
But surely huge new oil reserves might yet be discovered? There is still oil to be discovered but nothing like enough to dent the current rate of depletion of reserves.
Shell’s “Global Scenarios to 2025” report states that world discoveries peaked around the mid 1970s (others place this in the mid 1960s)
; it goes on to say fewer discoveries were made last year than any year since 1952; discoveries only replaced some 45 per cent of production since 1999; the average size of discoveries is consistently falling. According to Shell’s own statistics in 2005 it only discovered new reserves to replace 15-25 % of its production.
So why should we worry about peak oil?
You could be forgiven for saying at this point, “Hold on, the greatest global challenge we face is global warming and the surest way to slow the increase in global carbon emissions is to reduce our consumption of fossil fuels and accelerate the transition to alternative forms of energy – in which case peak oil is the best news we could possible have!”
But before we start celebrating we should take a step back and ask ourselves if we really know what we’re celebrating.
How are the oil corporations likely to respond to the peak? We already know. In the first week of February at a press conferences in London journalist David Strahan asked the CEO of Shell whether the company had done any detailed modelling on peak oil. Mr. van der Veer replied that that peak oil is correct as applied to regional areas of production but does not apply to the world as a whole. Mr. van Der Veer’s justification for this statement was that an unquantifiable level of reserves lie in “unconventional oil” and coal.5
“Unconventional oil” is not liquid oil pumped out of the ground, it is synthetic oil derived from ‘oil shale’ or ‘tar sands’. As oil becomes more expensive so more expensive processes to produce oil become economical. Tar sands are mixtures of mud, sand and bitumen. In order to extract oil the normal process is to strip mine the sands and then separate the bitumen from the sands with high pressure steam and then process the bitumen into synthetic crude. The production of synthetic crude produces vastly more greenhouses gases than conventional oil production. In conventional oil production the amount of energy used in the process compared to the amount of energy that can be generated from the resulting oil is on average a ratio of 1 to 30 – you get 30 times more energy out than you put in. In the production of synthetic crude from tar sands you get a ratio of about 1 to 1.5 – you get half as much again as you put in. And where does the energy to input into the process come from in the first place? From natural gas. We are now burning 1 energy unit of less polluting natural gas to make 1.5 units of more polluting oil.
And what of coal? Through a process called liquifaction synthetic oil can be produced from coal. Again coal liquifaction produces far more greenhouse gases than conventional oil production. Why import oil from unstable parts of the world when you can cook up your own diesel at home? Especially in the US, which has huge coal reserves. Neither coal reserves nor unconventional oil have the capacity to solve the ‘permanent energy crisis’, they are just one, highly destructive, part of a strategy for slowing it down.
Jeremy Leggett has argued that “amid the ruins of the old energy modus operandi many will try to turn to coal, and so the extent to which renewable energy grows explosively instead of coal expansion, rather than alongside it, will determine whether economies and ecosystems can survive the global warming threat.” He calls this ’solarisation’ versus ‘coalification’ and the struggle between these two approaches will define the era of peak oil.
At the point that it is widely realised that the peak has been reached there is likely to be panic buying of supplies, pushing the price up further, and panic selling on the stock market, raising the spectre of a global financial crash. There is the very real possibility of a global depression on the scale of the 1930s…or worse.
If we look at what would be likely to happen in simply a global economic downturn, rather than a more dramatic collapse, there would be little development in sustainable technologies, because so little capital would be available for investment. Moreover, the fossil fuel industry is a major source of tax revenue for western nations, which is a disincentive to cutting greenhouse gas emissions. In an era of economic crisis and high oil prices states have a vested (short term) interest in oil consumption.
In a world of dwindling oil supplies and no viable strategy for a transition to a post-peak economy we would expect to see intense competition over remaining reserves, heightened geopolitical tensions and wars over resources.
Michael Meacher, the former environment minister, warns that the scale of the change required in the world economy is “nothing short of apocalyptical. Our whole civilisation is overwhelmingly dependent on oil.”6 Everyone involved in issues of sustainability knows that the world is operating far beyond its carrying capacity. It can only do so on the basis of readily available cheap oil. But if you pull the plug on cheap oil without viable strategies to manage the transition you do not get a sustainable society, rather an industrial society in economic and social freefall.
Dealing with the peak – powering down
Meacher calls for an immediate, if temporary, “bridge” economy that shifts demand from oil to gas, imposes taxes on heavy users, rebates on cars that use little, and carbon budgets for each sector. Beyond that, Meacher recommends a massive global energy conservation drive and putting more international pressure on the US to use less.
A study completed for the U.S. Department of Energy on strategies to mitigate the effects of world oil peaking gives us some indication of the urgency of the challenge. It is worth noting that these mitigation strategies involve not only the development of renewable energy technologies, conservation and efficiency drives but also the exploitation of unconventional oil resources and coal liquifaction. The report takes no account of the issue of climate change. The three scenarios are based on “the fastest possible implementation – the best case”:7
Scenario 1 – if mitigation strategies were implemented 20 years before peaking we would manage to avoid any major oil supply shortfalls for a significant time, allowing more time to develop renewable fuel alternative
Scenario 2 – if mitigation begins 10 years before peaking there would be roughly a 10 year period of oil supply shortfalls. The situation would be 2-3 times as bad as the energy crisis in the 1970’s, but after a decade of world-wide economic depression, things would begin to get better.
Scenario 3 – if mitigation begins at the time of peaking it would leave the world with severe oil supply shortfalls for 2 decades or longer. This could result in permanent damage to our world’s economy.
In other words delaying the implementation of mitigation strategies is like waiting until you’re thirsty before you begin to dig a well.
Richard Douthwaite, a former UK government economist now working on a study of oil depletion for the Irish government says, “What do you do when a vital commodity becomes scarce? The rich cannot be allowed to take it all. The only option may be for a world rationing system for oil.” Handled correctly, he says, the lower output of oil may be environmentally and socially good. “It gives us a chance to change a lot of things that are clearly going wrong now. The climate crisis and the energy crisis are coming together.”8
Just as the first step towards stopping climate chaos has been to communicate the reality of global warming, the first step in mitigating the effects of the ‘permanent energy crisis’ is to communicate the reality of the challenge the world faces. The statistical arguments over the size of oil reserves may seem off putting, but they are significantly less complex than climate science. As with climate change the challenge is to communicate how serious the challenge is but to communicate a positive vision of what we are collectively trying to achieve. Research has shown that people are rarely motivated to act by threats to their survival – just think about smoking. In fact research commissioned by the UK’s government on how best to communicate climate change shows people are rarely even motivated by long term threats to the survival of their children.
We have to think about climate change and peak oil as interconnected challenges and we have to articulate a positive vision of what Richard Heinberg calls the strategy of “power down” - “The path of co-operation, conservation and sharing… in order to reduce per capita resource usage in wealthy countries, develop alternative energy sources, distribute resources more equitably and humanely but systematically reduce the size of the human population over time.”9
This strategy can and is being systematically implemented on a local scale. For example, Rob Hopkins, a permaculture practitioner, has developed a practical approach that he calls ‘Energy Descent Action Planning’and applied it to planning a ‘power down’ strategy for Kinsale in Ireland. Grassroots organisations such as Action for Sustainable Living have a crucial role to play in making this vision a reality.
On a global level we need the equivalent of Kyoto for peak oil. Such a protocol was proposed last year at the Rimini Oil Depletion conference. The Rimini Protocol proposes a strategy:
· to avoid profiteering from shortage, such that world oil prices may remain in reasonable relationship with production cost; to allow poor countries to afford their imports;
· to avoid destabilising financial flows arising from excessive oil prices;
· to encourage consumers to avoid waste;
· to stimulate the development of alternative energies
The end of the cheap oil era is a historical cross roads - one path leads to an era of increasing competition for resources, war and possible systemic collapse; the other demands a massive commitment to developing renewable energy resources, localisation and positive systemic change.
1 Quoted in Leggett, J. Half Gone, Portabello Books, 2005
2 Mobbs, P. Energy Beyond Oil, Matador 2005
3 Quoted in Leggett, J. Half Gone, Portabello Books, 2005
4 Mobbs, P. Energy Beyond Oil, Matador 2005
5 http://www.resourceinvestor.com/pebble.asp?relid=16719
6 http://society.guardian.co.uk/societyguardian/story/0,,1594927,00.html
7 http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
8 http://society.guardian.co.uk/societyguardian/story/0,,1594927,00.html
9 Heinberg, Richard,PowerDown: options and actions for a post carbon world Clairview 2004
Jeremy Sweeney reports
They write: "The founder of the corporate sustainability movement, Corporate Social Responsibility, died this year aged 50, after a long struggle with definition.
Initially very much an outsider, CSR spent the early years largely ignored in favour of the initially more attractive Pure Capitalism.
However, eventually corporations came to recognise and value the important work done by CSR in the ethics of resource and people management; even if the reasons for doing so often reflected more of a desire to protect reputations, than because they respected or even liked CSR.
Whatever the cause of the newfound popularity, CSR helped ensure that more resources were made available to create more equality of opportunity and improved life chances for more people in the world.
In doing so, the relationship between businesses and the people on whom they depended, was undoubtedly enriched.
CSR is credited with re-humanising a business world that had become perilously detached from the physical and cultural environment in which it operated.
CSR was also a founder member of the movement that believed that it was possible to come to work because you enjoyed it; and nurtured the idea that people would prefer to work in, and conduct business with, corporations that wanted to do good as well as maximise short term profits – hence coining the phrase ‘enlightened self interest’.
In the later years, CSR's reputation for valuing privacy came under scrutiny as various more or less satisfying relationships with Business and Government developed.
However, despite many approaches, marriage never materialised.
Having indulged in the occasional, though much loved, ‘refresher’, CSR was often heard to say about the many suitors, “They all want me now, but how can I trust that it is for the right reasons?”
CSR is survived by an adopted child, Sustainability.
By Megan Quinn
Permaculture Activist
First published on Sunday, February 26, 2006
Havana, Cuba -- At the Organipónico de Alamar, a neighborhood agriculture project, a workers' collective runs a large urban farm, a produce market and a restaurant. Hand tools and human labor replace oil-driven machinery. Worm cultivation and composting create productive soil. Drip irrigation conserves water, and the diverse, multi-hued produce provides the community with a rainbow of healthy foods.
In other Havana neighborhoods, lacking enough land for such large projects, residents have installed raised garden beds on parking lots and planted vegetable gardens on their patios and rooftops.
Since the early 1990s, an urban agriculture movement has swept through Cuba, putting this capital city of 2.2 million on a path toward sustainability.
A small group of Australians assisted in this grass-roots effort, coming to this Caribbean island nation in 1993 to teach permaculture, a system based on sustainable agriculture which uses far less energy.
This need to bring agriculture into the city began with the fall of the Soviet Union and the loss of more than 50 percent of Cuba's oil imports, much of its food and 85 percent of its trade economy. Transportation halted, people went hungry and the average Cuban lost 30 pounds.
"In reality, when this all began, it was a necessity. People had to start cultivating vegetables wherever they could," a tour guide told a documentary crew filming in Cuba in 2004 to record how Cuba survived on far less oil than usual.
The crew included the staff of The Community Solution, a non-profit organization in Yellow Springs, Ohio which teaches about peak oil - the time when oil production world-wide will reach an all-time high and head into an irreversible decline. Some oil analysts believe this may happen within this decade, making Cuba a role model to follow.
"We wanted to see if we could capture what it is in the Cuban people and the Cuban culture that allowed them to go through this very difficult time," said Pat Murphy, The Community Solution's executive director. "Cuba has a lot to show the world in how to deal with energy adversity."
Scarce petroleum supplies have not only transformed Cuba's agriculture. The nation has also moved toward small-scale renewable energy and developed an energy-saving mass transit system, while maintaining its government-provided health care system whose preventive, locally-based approach to medicine conserves scarce resources.
The era in Cuba following the Soviet collapse is known to Cubans as the Special Period. Cuba lost 80 percent of its export market and its imports fell by 80 percent. The Gross Domestic Product dropped by more than one third.
"Try to image an airplane suddenly losing its engines. It was really a crash," Jorge Mario, a Cuban economist, told the documentary crew. A crash that put Cuba into a state of shock. There were frequent blackouts in its oil-fed electric power grid, up to 16 hours per day. The average daily caloric intake in Cuba dropped by a third.
According to a report on Cuba from Oxfam, an international development and relief agency, "In the cities, buses stopped running, generators stopped producing electricity, factories became silent as graveyards. Obtaining enough food for the day became the primary activity for many, if not most, Cubans."
In part due to the continuing US embargo, but also because of the loss of a foreign market, Cuba couldn't obtain enough imported food. Furthermore, without a substitute for fossil-fuel based large-scale farming, agricultural production dropped drastically.
So Cubans started to grow local organic produce out of necessity, developed bio-pesticides and bio-fertilizers as petrochemical substitutes, and incorporated more fruits and vegetables into their diets. Since they couldn't fuel their aging cars, they walked, biked, rode buses, and carpooled.
"There are infinite small solutions," said Roberto Sanchez from the Cuban-based Foundation for Nature and Humanity. "Crises or changes or problems can trigger many of these things which are basically adaptive. We are adapting."
A New Agricultural Revolution
Cubans are also replacing petroleum-fed machinery with oxen, and their urban agriculture reduces food transportation distances. Today an estimated 50 percent of Havana's vegetables come from inside the city, while in other Cuban towns and cities urban gardens produce from 80 percent to more than 100 percent of what they need.
In turning to gardening, individuals and neighborhood organizations took the initiative by identifying idle land in the city, cleaning it up, and planting.
When the Australian permaculturists came to Cuba they set up the first permaculture demonstration project with a $26,000 grant from the Cuban government.
Out of this grew the Foundation for Nature and Humanity's urban permaculture demonstration project and center in Havana. "With this demonstration, neighbors began to see the possibilities of what they can do on their rooftops and their patios," said Carmen López, director of the urban permaculture center, as she stood on the center's rooftop amongst grape vines, potted plants, and compost bins made from tires.
Since then the movement has been spreading rapidly across Havana's barrios. So far López' urban permaculture center has trained more than 400 people in the neighborhood in permaculture and distributes a monthly publication, "El Permacultor." "Not only has the community learned about permaculture," according to López, "we have also learned about the community, helping people wherever there is need."
One permaculture student, Nelson Aguila, an engineer-turned-farmer, raises food for the neighborhood on his integrated rooftop farm. On just a few hundred square feet he has rabbits and hens and many large pots of plants. Running free on the floor are gerbils, which eat the waste from the rabbits, and become an important protein source themselves. "Things are changing," Sanchez said. "It's a local economy. In other places people don't know their neighbors. They don't know their names. People don't say 'hello' to each other. Not here."
Since going from petrochemical intensive agricultural production to organic farming and gardening, Cuba now uses 21 times less pesticide than before the Special Period. They have accomplished this with their large-scale production of bio-pesticides and bio-fertilizers, exporting some of it to other Latin American countries.
Though the transition to organic production and animal traction was necessary, the Cubans are now seeing the advantages. "One of the good parts of the crisis was to go back to the oxen," said Miguel Coyula, a community development specialist, "Not only do they save fuel, they do not compact the soil the way the tractor does, and the legs of the oxen churn the earth."
"The Cuban agricultural, conventional, 'Green Revolution' system never was able to feed the people," Sanchez said. "It had high yields, but was oriented to plantation agriculture. We exported citrus, tobacco, sugar cane and we imported the basic things. So the system, even in the good times, never fulfilled people's basic needs."
Drawing on his permaculture knowledge, Sanchez said, "You have to follow the natural cycles, so you hire nature to work for you, not work against nature. To work against nature, you have to waste huge amounts of energy."
Energy Solutions
Because most of Cuba's electricity had been generated from imported oil, the shortages affected nearly everyone on the island. Scheduled rolling blackouts several days per week lasted for many years. Without refrigerators, food would spoil. Without electric fans, the heat was almost unbearable in a country that regularly has temperatures in the 80s and 90s.
The solutions to Cuba's energy problems were not easy. Without money, it couldn't invest in nuclear power and new conventional fossil fuel plants or even large-scale wind and solar energy systems. Instead, the country focused on reducing energy consumption and implementing small-scale renewable energy projects.
Ecosol Solar and Cuba Solar are two renewable energy organizations leading the way. They help develop markets for renewable energy, sell and install systems, perform research, publish newsletters, and do energy efficiency studies for large users.
Ecosol Solar has installed 1.2 megawatts of solar photovoltaic in both small household systems (200 watt capacity) and large systems (15-50 kilowatt capacity). In the United States 1.2 megawatts would provide electricity to about 1000 homes, but can supply power to significantly more houses in Cuba where appliances are few, conservation is the custom, and the homes are much smaller.
About 60 percent of Ecosol Solar's installations go to social programs to power homes, schools, medicals facilities, and community centers in rural Cuba. It recently installed solar photovoltaic panels to electrify 2,364 primary schools throughout rural Cuba where it was not cost effective to take the grid. In addition, it is developing compact model solar water heaters that can be assembled in the field, water pumps powered by PV panels, and solar dryers.
A visit to "Los Tumbos," a solar-powered community in the rural hills southwest of Havana demonstrates the positive impact that these strategies can have. Once without electricity, each household now has a small solar panel that powers a radio and a lamp. Larger systems provide electricity to the school, hospital, and community room, where residents gather to watch the evening news program called the "Round Table." Besides keeping the residents informed, the television room has the added benefit of bringing the community together.
"The sun was enough to maintain life on earth for millions of years," said Bruno Beres, a director of Cuba Solar. "Only when we [humans] arrived and changed the way we use energy was the sun not enough. So the problem is with our society, not with the world of energy."
Transportation - A System of Ride Sharing
Cubans also faced the problem of providing transportation on a reduced energy diet. Solutions came from ingenious Cubans, who often quote the phrase, "Necessity is the mother of invention." With little money or fuel, Cuba now moves masses of people during rush hour in Havana. In an inventive approach, virtually every form of vehicle, large and small, was used to build this mass transit system. Commuters ride in hand-made wheelbarrows, buses, other motorized transport and animal-powered vehicles.
One special Havana transit vehicle, nicknamed a "camel," is a very large metal semi-trailer, pulled by a standard semi-truck tractor, which holds 300 passengers. Bicycles and motorized two-passenger rickshaws are also prevalent in Havana, while horse drawn carts and large old panel trucks are used in the smaller towns.
Government officials in yellow garb pull over nearly empty government vehicles and trucks on Havana's streets and fill them with people needing a ride. Chevys from the 1950s cruise along with four people in front and four more in back.
A donkey cart with a taxi license nailed to the frame also travels Cuba's streets. Many trucks were converted to passenger transport by welding steps to the back so riders could get on and off with ease.
Health Care and Education - National Priorities
Even though Cuba is a poor country, with a per capita Gross Domestic Product of only $3,000 per year (putting them in the bottom third of all nations), life expectancy is the same as in the U.S., and infant mortality is below that in the U.S. The literacy rate in Cuba is 97 percent, the same as in the U.S. Cuba's education system, as well as its medical system is free.
When Cubans suffered through their version of a peak oil crisis, they maintained their free medical system, one of the major factors that helped them to survive. Cubans repeatedly emphasize how proud they are of their system.
Before the Cuban Revolution in 1959, there was one doctor for every 2000 people. Now there is a doctor for every 167 people. Cuba also has an international medical school and trains doctors to work in other poor countries. Each year there are 20,000 Cuban doctors abroad doing this kind of work.
With meat scarce and fresh local vegetables in abundance since 1995, Cubans now eat a healthy, low-fat, nearly vegetarian, diet. They also have a healthier outdoor lifestyle and walking and bicycling have become much more common. "Before, Cubans didn't eat that many vegetables. Rice and beans and pork meat was the basic diet," Sanchez from the Foundation for Nature and Humanity said. "At some point necessity taught them, and now they demand [vegetables]."
Doctors and nurses live in the community where they work and usually above the clinic itself. In remote rural areas, three-story buildings are constructed with the doctor's office on the bottom floor and two apartments on the second and third floors, one for the doctor and one for the nurse.
In the cities, the doctors and nurses always live in the neighborhoods they serve. They know the families of their patients and try to treat people in their homes. "Medicine is a vocation, not a job," exclaimed a Havana doctor, demonstrating the motivation for her work. In Cuba 60 percent of the doctors are women.
Education is considered the most important social activity in Cuba. Before the revolution, there was one teacher for every 3,000 people. Today the ratio is one for every 42 people, with a teacher-student ratio of 1 to 16. Cuba has a higher percentage of professionals than most developing countries, and with 2 percent of the population of Latin America, Cuba has 11 percent of all the scientists.
In an effort to halt migration from the countryside to the city during the Special Period, higher education was spread out into the provinces, expanding learning opportunities and strengthening rural communities. Before the Special Period there were only three institutions of higher learning in Cuba. Now there are 50 colleges and universities throughout the country, seven in Havana.
The Power of Community
Throughout its travels, the documentary crew saw and experienced the resourcefulness, determination, and optimism of the Cuban people, often hearing the phrase "Sí, se puede" or "Yes it can be done."
People spoke of the value of "resistir" or "resistance," showing their determination to overcome obstacles. And they have lived under a U.S. economic blockade since the early 1960s, viewed as the ultimate test of the Cuban ability to resist.
There is much to learn from Cuba's response to the loss of cheap and abundant oil. The staff of The Community Solution sees these lessons as especially important for people in developing countries, who make up 82 percent of the world's population and live more on life's edge. But developed countries are also vulnerable to shortages in energy. And with the coming onset of peak oil, all countries will have to adapt to the reality of a lower energy world.
With this new reality, the Cuban government changed its 30-year motto from "Socialism or Death" to "A Better World is Possible." Government officials allowed private entrepreneurial farmers and neighborhood organizations to use public land to grow and sell their produce. They pushed decision-making down to the grassroots level and encouraged initiatives in their neighborhoods. They created more provinces. They encouraged migration back to the farms and rural areas and reorganized their provinces to be in-line with agricultural needs.
From The Community Solution's viewpoint, Cuba did what it could to survive, despite its ideology of a centralized economy. In the face of peak oil and declining oil production, will America do what it takes to survive, in spite of its ideology of individualism and consumerism? Will Americans come together in community, as Cubans did, in the spirit of sacrifice and mutual support?
"There is climate change, the price of oil, the crisis of energy ." Beres from Cuba Solar said, listing off the challenges humanity faces. "What we must know is that the world is changing and we must change the way we see the world."
~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
This article appeared in the special Peak Oil issue of Permaculture Activist, Spring 2006, (www.permacultureactivist.net). The author, Megan Quinn, is the outreach director for The Community Solution, (www.communitysolution.org), a program of Community Service Inc., a nonprofit organization in Yellow Springs, Ohio. For information about its soon-to-be-released documentary, "The Power of Community: How Cuba Survived Peak Oil" visit its website, e-mail her at megan@communitysolution.org, or call +1 937-767-2161.
