the politics of oil

Yesterday I wrote to express my frustration over the ridiculous response from government concerning high gasoline prices. Those idiots are truly showing their uselessness. It seems others in the blogosphere are trying their best to wag the dog that is peak oil media coverage including the knowledgeable editors over at The Oil Drum. My hats off to them and their thoughtful press release calling for a sane examination of the overall problem and possible realistic responses.


Please read the entire press release as a PDF here and the pass it along.

bad big oil?

It seems multitasking Americans are at it again switching constantly between denial and anger over rising prices at the pump. When they are aware that there is a problem, specifically the moment at which they pay for fuel, they turn their rage towards big oil. This pervasive irritation is made obvious by the hurried attempts of our leaders to address the issue. We think we are being swindled and those in Congress and the Bush administration are ready to come to our rescue.

Senator Barbara Boxer, a California Democrat who sharply criticized oil executives appearing before Congress in November, struck again on Friday. She called on the Bush Administration and the Federal Trade Commission to "put an end to gouging," then suggested that FTC stood for "Friend to Chevron."

Republican Judd Gregg, chairman of the Senate Budget Committee said, "I believe it is time to take a serious look at reinstituting an excess profit tax on oil companies"

Democrats complaining about big business is nothing new but republicans calling for a tax increase? This must be serious. Both of these are examples of the ignorance of those in government. Don’t be fooled into thinking that the increase in the price of gasoline is a scam being put over on Americans by the big bad oil companies. You’ll look as silly as the idiots in Washington.

The price of crude oil has more than doubled in just over 2 years.

Gasoline prices here in Charlotte, NorthCarolina have risen roughly the same.

If the price of your raw materials doubled what would you do?

Perhaps the oil companies are working together to fix prices? Thomas Sowell reports that just isn’t the case.

“The Supreme Court's recent 8 to 0 decision (Justice Alito not yet participating) shot down a claim that oil companies were colluding in setting prices. That claim was upheld by the far-left 9th Circuit Court of Appeals but neither liberals nor conservatives on the Supreme Court were buying it.”

When’s the last time all of those folks agreed on something?

But what about the “record profits” we keep hearing about from sound clip bullhorn of mainstream media? “Oil industry awash in record levels of cash” says MSNBC. Are we really being gouged? Hardly. From the Jeffery J. Brown via Energy Bulletin we get a better explanation.

“Oil prices are up substantially since mid-February. …careful examination of recent supply data provided by the US Energy Information Agency (EIA) suggest… oil importers are bidding against each other for available total petroleum (crude oil + product) imports.

Since the week ending 2/10/06, average daily US net petroleum imports have fallen about 15%, down about two mbpd. Since the week ending 2/24/06, on a smoothed, four week running average basis, average daily US net petroleum imports have fallen about 8%, down about one mbpd. (A comparable time period last year showed about a 2% decline.)

This sharp decline in net US petroleum imports corresponded to the beginning of the recent run up in oil prices.”

It turns out MSM reporters are either ignorant of the facts or lazily looking for an easy story. Just like our representatives in Washington who want to be seen defending our wallets in an election year. As we peak or plateau in global oil production in advance of the coming decline, supplies of crude will be tight and hypersensitive to disruptions and speculation. These are the symptoms, the coughing, sore throat and sneezing associated with the underlining ailment. In truth we’re being to feel the effects of peak oil but no one in government or MSM is willing or able to correctly diagnose the disease.

The profits margins of big oil are inline with those of other U.S. corporations. Many other companies are making bigger profits than those in oil. For example…

“Newspapers, part of the media that criticize oil profits, heavily outperformed Exxon in 2004. “The average 2004 operating margin of publicly owned newspapers… was 20.5 [percent],” the Los Angeles Times cited industry analyst John Morton in its Nov. 24, 2005, paper.

What do you say to that MSM?

The Mail Tribune of Oregon reports more accurately on the state of profits in the oil sector, “The industry says among oil companies that have reported earnings this quarter, profit margins have averaged nearly 9 percent, which is just below the average across all U.S. companies that have reported results this quarter. Exxon Mobil had a profit margin of about 10 percent.”

Free Market Project says, “While Exxon’s profit is large in terms of absolute dollars, but so is the company. In 2005, profits for the world’s largest oil company were only 9.7 percent of its revenues, up from 9.6 percent of revenue in 2004, and far less than the 2004 Bank of America profit margin of 21.6 percent or Johnson and Johnson’s 18 percent, according to data from Forbes magazine.

Investorguide.com points to more big winners. “The net profit margin of the pharmaceutical drug manufacturing industry is 16.9%. For example, Merck and Pfizer have net profit margins of 20.4% and 15.5%, respectively.”

"The money center banking industry, which includes Wachovia, CitiGroup and Banc of America, reports a net profit margin of 16.6%. Microsoft and Oracle have margins of 30.8% and 23.4%.”

What was the profit margin for Exxon in 2005 again? Answer 9.6%. And the average among companies in the oil industry reporting for the first quarter of 2006? Answer, “net profit margins are 9.1%.”

Listen, I don’t like big oil. I think history will prove them and their industry as one of the most wasteful and destructive associations in human history. And I certainly don’t suggest trusting everything they pronounce but hell, The Hershey Company has a better profit margin than Exxon. Trying to blame the rising cost of gasoline on gouging by Big Oil is silly and unfounded; not to mention it takes the spotlight off the coming crisis. Peak oil is arriving. Wake up to the reality and then help others do the same.

gas price test

Tia Nelson says gas prices are not too high. Tia is the daughter of former U.S. Sen. Gaylord Nelson of Wisconsin, the man who founded Earth Day some 37 years ago. Across the country nightly news reporters are out in force to interview consumers as they fill up their gas tanks. These reporters are looking for the typical response of outrage so common among shocked Americans accustom to paying very low prices for gasoline. Perhaps you are among this group surprised by the most recent run up in costs at the pump. If so try the following test to see if gas is in fact way too expensive in your area.

Start by determining the fuel efficiency of your vehicle. You can use this online guide. It will help you determine how many miles you can travel using one gallon of gas.

Next push your car the same number of miles you would be able to drive your car on one gallon of gas.

Lastly evaluate the amount of money you would be willing to pay for this service in the future.

There is an incredible amount of energy embodied in petroleum. Our ability to harness this easily extractable, easily transportable fuel has transformed our way of life. Along the way we’ve lost sight of just how precious this resource is. We’ve become accustom to purchasing an incredible amount of energy for an extremely low price. When this resource is available in evermore limited amounts how will we react? How should we respond as a society? These are the questions we should be asking ourselves as the planet peaks in oil production. Time spent grumbling won’t help.

compost tea please

Anyone who has ever gardened will tell you there is a constant need to replenish the nutrients depleted by crops and there is also a need to protect the harvest from bugs bent on eating your yield. What is an appropriate response to these issues in a post peak petroleum world? Compost tea of course.

The green revolution of the 1950’s and 60’s included advancements in the mechanization of farm labor, further developments in irrigation techniques, genetic modification of plants through modern hybridization AND the introduction of chemical fertilizers and pesticides produced from fossil fuels. The combination of these efforts increased agricultural yields and eventually led to the domination of commercial farming in our grocery stores and across the landscape of America. As with most of the technological developments introduced in the middle of last century the green revolution provided an increase in the availability of a product, namely food. It also broke with thousands of years worth of accumulated knowledge, created a dependency on finite resources about to begin a worldwide decline in availability and brought in extraordinary profits for the corporations responsible for this shift. Damn I am getting cynical. It also made possible a global population boom that may have exceeded the carrying capacity of human life on planet Earth but that’s a discussion for another day.

The price of commercial fertilizers has been increasing dramatically. Commercial fertilizers are made from natural gas. Natural gas production went into decline in this country in 1971. It has recently peaked in production in all of North America. This means if we want to continue utilizing commercial fertilizers even at current rates of consumption i.e. no growth, we will have to import these fertilizers or import liquefied natural gas. This extremely flammable substance must be shipped at ultra low temperatures in specialized sea vessels before being converted back into a gas at particular docking facilities throughout the country; most of which are strongly opposed by the surrounding populations. That sounds simple enough.

Commercial pesticides on the other hand are made from petroleum. Again we’ve seen a steady increase in the price of pesticides. This is due in part to the fact that the price of petroleum has continued to increase(remember U.S. oil production peaked in 1971) but also because of growing pesticide resistance and other manmade troubles. It turns out that the use of Genetically Modified crops actually increases the use of pesticides. Sometimes I’m not sure whether Agrobizcorp is coming or going.

There are other ways to make nutrients available to your plants and to protect them from ravenous pests. In addition to using compost as a way to recycle organic material back into the soil you can also infuse it in water to create a wonderful mixture your plants will love.

Compost tea is the process of using compost to brew batches of liquid containing intense concentrations of microbial organisms beneficial to the health of plants and advantageous to the soil in which they grow. By placing mature compost in water and providing oxygen & food you can create a bloom of these advantageous little microbes. Why would you take the time to foster such a process? The benefit abound.

Using compost tea to water plants or as a foliar spray provides an overall increase in plant health and plant growth. This is achieved first by reducing the shock associated with transplanting. Compost tea also promotes improvement in soil structure by increasing the number of favorable microorganisms in the soil community. These same microbes increase the availability of nutrients in the soil providing more food for the plants. They also lead to an increase in the capacity of the plant to absorb the nutrients as well as an improvement in the ability of that same soil to hold moisture. Evidence, albeit anecdotal shows a reduced need for water in excess of 50% when compost tea is applied on a regular basis. In addition to helping ward off pests by strengthen the plants themselves, the microorganisms in compost tea also help fight natural plant enemies by occupying plant surfaces and competing for nutrients often utilized in unhealthy soils by these same pests. All of these benefits mean better yields and reduced costs, not to mention a reduction in your dependency on fossil fuels. And the best part is it’s so easy. There are commercial systems for brewing large quantities. There are also enterprising individuals already brewing to sell.

More power to them. For brewing your own though you’ll only need the following:

Aquarium-sized air pump with tubing and air stone
5 gallon bucket
Unsulfured molasses or honey
Non-city water
Several handfuls of mature compost


Let’s get started.

1. Fill your bucket with a mixture of compost and water. Use a ratio of 6 to 1; that is six parts water to one part compost.

2. Next place the bucket in an outdoor location where you have access to the electricity necessary to run the air pump. Position the pump so that you can attach the tube and the air stone and dangle them deep into the water.

3. Drop in your sugar source.

4. Let the contraption sit for three days and your compost tea will be ready. Use it immediately as it will go bad quickly.

5. If you’re going to spray it onto the foliage of your plants you will want to strain it using cheese cloth or women’s stockings so as not to clog up your sprayer.

That's it! Here are some helpful hints to aid in your effort. Compost is obviously the critical ingredient. Do you compost? This would be a good time to start a pile if you don’t. If you don’t have a compost pile search for an old pile of rotting leaves. Purchasing compost is another short term solution.

The water you use should be from a non-city source. The chemicals in municipal water will kill the organisms you are trying to grow. I use water from my rain barrel. Maybe this would be a good excuse for you to install some of them- perhaps a future post. Well water or water from a lake will work just fine. If you don’t have a good source for non-municipal water fill your bucket with city water and set up the air pump. Run it for a few days before adding the compost. The chemicals should dissipate.

The oxygenation of the water provided by the pump creates an environment in which aerobic bacteria can live. You can see the air bubbles rising to the surface in the photo above. Remember that aerobic bacteria are the good guys that smell nice and benefit your soil. Your compost tea should smell earthy if not sweet. If it smells rotten something has gone wrong. The most likely culprit is not enough air or too much time. The anaerobic bacteria that can’t stand oxygen are smelly and can contain pathogens. Don't use smelly compost tea.

Heat seems to help the process. During the cool weather of early in the spring I use dark coloured buckets. If you’re looking to cut costs keep an eye open as you drive. I’ve found more buckets than I can use on the side of the road.

As with any natural process the method needs adjusting based on your location and situation. Experimentation is as always the best instructor. I occasionally use less compost or sometimes put in more sugar, always testing out change. I have made a bad batch or two but if you stick to the basic directions above you should be able to brew your own compost tea relatively quickly and for almost no money. For those of you who are interested in a fossil fuel free way in which to feed and strength your plants homebrewed compost tea is great.

For more information visit:

Vintagerosery
Soil Food Web
The Great State of Pennsylvania
The Great State of Texas
Growing Solutions Taunton
Ecocycle
Lawn Jockey
Communi-tea

the price of our addicition

“The U.S. lives in an energy trap. We fell into it gladly, dug it deeper and sit fat and happy, with blinders on. We're fed daily meals of imported oil, from countries we pay in IOUs and think we can push around. But now we're starting to see the costs and risks of our dependency—and I don't only mean gasoline averaging $2.74 a gallon at the pump.”

This article is an excellent introduction to peak oil. If you’ve been looking for a brief summary of the issue from a mainstream media source to share with your friends and family here it is.

The Price of Our Addiciton
by Jane Bryant Quinn

going up?

This is my last political post for a while; really. After sharing this graph with you I'll return to the greater task at hand- fostering relocalization and a greater sense of community through a return to citizen participation in the responsibilities of life. I could not pass this up though.

Bamboo fencing, compost tea, and the start of a community garden are all coming up. Stay tuned.

can you learn something from anything?

I recently wrote post peak eats, a summation of my presentation at the Triangle Conference on Peak oil and Community Solutions last month. In it I described part of the Cuban response to the decline in available petroleum experienced in country when the Soviet Union collapsed in 1991. I received the following comment.

a generally excellent article but do you really believe that the Cuban infant mortality is better than the US infant mortality rate? Rather than just accept and repeat that 'fact' I would hope that as a journalist, you would check it out a little further. Do they count an infant as 500 grams or 24 weeks or what? If you saw the conditions of their hospitals you would be amaized and disgusted. Since you made the claim about Cuban infant mortality being better than the US could you please back that up with data? Also, although Americans live a very unhealthy lifestyle could you please show is the data on comparable Cuban longevity? or do you just accept what the Cuban government tells you? A final question for all who are enthralled by Che, how many people, many innocent by his own admission, did he personally execute and how many did he order killed by subordinates? Are those murders in the Cuban statistics or 'overlooked'? Thankyou for the otherwise excellent article and I look forward to the courtesy of your response, robin appleby M.D.

In an effort to better speak to these issues I thought a separate post was in order.

I did not rely on the Cuban government for my facts concerning the infant mortality rate and the life expectancy experienced here and in Cuba. Ironically I relied on the government of the United States of America. Our own Central Intelligence Agency provided me with this information on Cuba and the U.S. These topics are complex to be sure. An article from ABC in November of 2005 discusses some of the many facets of the infant mortality issue. I have never seen the inside of a Cuban hospital. I know that the country and its people are not wealthy and were hit hard by the U.S. economic embargo and later the loss of Soviet support. The simple fact though that a country with such limited resources is able to compare so closely with the United States concerning any matters of health despite the discrepancy in the amount of money spent annually on health care is worthy of note and further inspection.

Americans spend $5,267 per capita on health care every year, almost two and half times the industrialized world’s median of $2,193; the extra spending comes to hundreds of billions of dollars a year. What does that extra spending buy us? Americans have fewer doctors per capita than most Western countries. We go to the doctor less than people in other Western countries. We get admitted to the hospital less frequently than people in other Western countries. We are less satisfied with our health care than our counterparts in other countries. American life expectancy is lower than the Western average. Childhood-immunization rates in the United States are lower than average. Infant-mortality rates are in the nineteenth percentile of industrialized nations. The New Yorker

Information on the state of Cuban health care can be found in an article that states, Since 1959, Cuba has invested heavily in health care and now has twice as many physicians per capita as the United States and health indicators on a par with those in the most developed nations - despite the U.S. embargo that severely reduces the availability of medications and medical technology. Read the entire story here in The New England Journal of Medicine or here from the University of Dayton Law School.

I find it interesting that people here in the United States are so quick to criticize the Cuban government concerning human rights abuses before beginning an internal examination of our own practices. Irony it would seem, has placed hundreds of U.S. detainees at a military base run by the American government on the island of Cuba. These men have been held for more than 4 years without being charged or given a trail to either prove them guilt and sentence them or find them innocent and release them. They are being held indefinitely. This BBC article described a recent U.N. report by saying; Treatment of detainees at Guantanamo Bay constitutes torture in some cases and violates international law.

The detainees aren’t called Prisoners of War which might make their care subject to the Geneva Convention. They’re called Enemy Combatants which the U.S. government defines as an individual who was part of or supporting the Taliban or al Qaida forces, or associated forces that are engaged in hostilities against the United States or its coalition partners. This includes any person who committed a belligerent act or has directly supported hostilities in aid of enemy armed forces.

The United States doesn’t kidnap suspects and transfer them to prison facilities in order to do God knows what to them. We practice extraordinary-rendition.

The United States doesn’t practice warrantless spying on its own citizens. We utilize a terrorist surveillance program to keep tabs on anyone we want.

The president of the United States of America, who was granted extraordinary powers to wage war by congress, invaded Iraq in March of 2003. Set aside the statement from A U.S. general who commanded the U.S. allied air forces in Iraq has confirmed that the U.S. and Britain conducted a massive secret bombing campaign before the U.S. actually declared war on Iraq (story here) and focus on the fact that the reason given the American people and the world for this invasion was Saddam Hussein’s possession of weapons of mass destruction.

In fact there were no weapons of mass destruction. At the end of October 2004 it was clear that there were no WMD’s and documentation showed that more than 1,100 United States Servicemen and Servicewomen had been killed in Iraq fighting under this false pretense.

The following month the American people reelected the leader that made this mistake and sent these brave solider to his War on Terror. Never mind that there had been no terrorists in Iraq before our invasion. [update - hours after I wrote this I find out the U.S. government has renamed the war. Read here]

It seems to be more about semantics for us. Rename your actions, or your program or your operation or your war and we’ll support you. It helps to label it as patriotic and to color it in red, white and blue. Shhhhhhhhhhhh. The American people are sleeping.

It’s been widely reported that Fidel has killed or imprisoned political opponents during his leadership of Cuba. I in no way excuse those actions. My point is though that I find it interesting that we will tolerate abuse of our own at home and abroad as long as our leaders are clever in the way they approach us about it, but mention a rogue like Fidel Castro and you’ll stir up Americans to decry someone else as a villain and a monster. Why is this? Why have the American powers-that-be branded so strongly this revolution with such strapping condemnation? Was it because of the real human rights abuses undertaken by Fidel Castro? Was that the only reason? You’ll need a brief timeline on the history of Cuba in order to better understand.

In 1492 Chistopher Columbus landed in Cuba and renamed its inhabitants Indians. Within a few years the Spanish had conquered the natives and established a feudal system. Disease and abuse killed much of the population initially and those who remained worked to strip the island of its resources to be shipped back to Spain. Plantation style agriculture was imposed mostly in the form of sugar and tobacco farming. This included the importation of slaves from Africa. The U.S. made attempts to purchase and later to out-right take over the island nation. American companies eventually accomplished this and were heavily invested by the 1920’s. The Cuban revolution was successful in 1959. After assuming power, Fidel Castro nationalised the major companies including the mines, banks and the electricity company, all of which were largely owned by U.S. interests. Very quickly the U.S. retaliated by placing a trade embargo on Cuba, attempting to isolate the island economically. Two years later Cuban exiles backed by the CIA invaded Cuba. The mission was a complete failure and initially America denied involvement in the Bay of Pigs invasion. Eventually the truth became clear. Cuba, already experiencing a socialist movement turned to the U.S.SR. for support. The following year the world came closer than at any other point in history to nuclear war. Makes a little more sense when you but it all together doesn’t it? That’s not, however the way it reads in 10^th grade social studies.

History, History and More History.

If you’re still reading this you’re probably shocked and angry at either me or the U.S. government or both depending on who you believe. Maybe you knew all this already. If so, good for you. The point of this post is not to condone the actions of Fidel Castro and his one party police state. I condemn acts of deceit, torture, punishment, involvements in unlawful activities or any other such suppression of truth and liberty by governments against their own people. I wrote the above as a rejection of the notion that we, the righteous America, have nothing to learn from such a wicked country as Cuba.

Human history will be shifting soon. A peak in global oil production and later in natural gas will cause energy availability to decrease. The ramifications will be felt throughout society and across the world. I believe the people of the United States of America can learn valuable lessons from Cuba and its experiences.

Chief among those are the importance of community and solidarity between the common people during times of crisis and the idea that in these same times of trouble the powers of government are willing and will probably be able to impose restrictions in opposition to the freedoms we currently enjoy. Those unwilling to learn new ways of being and doing and understanding our era will be in trouble. You can learn something from anything. Indeed in the future you must.

awakened and amused

I have been and will continue to be unenthused at certain times during my life. I have, like many awakened Americans, those stretches of existence during which I seem to stand still in time if only to wander aimlessly in our land of the free and the home of the consumer. The red pill is the most bitter of pills.

But I took it and I can’t complain; I’ve always been a coffee drinker and liquorish lover; subtlety sometimes unfamiliar and heaviness often at hand. I have fun. I am not a dull Jack but always with me there is a sense of uneasiness about that which those around me seem to regard as a harmless hungry polar bear that is “quite safe and of no concern to us… wait, is American Idol on tonight?”

But a life lived in despair or even one given over to the quiet desperation described by Thoreau is a sad way to spend an existence and luckily I am often reminded of this. The responsibility of living a deliberate, informed and responsible life must be balanced with a sense of humor and happiness even during the toughest of times.

Last night I had the pleasure of listening live to one of the most important storytellers of our time; Garrison Keillor. For those of you unfamiliar with this legendary radio personality he is the host of a weekly program called A Prairie Home Companion offered live for two hours each Saturday evening.

The show is a mix of the most talented musician from off the beaten path and a return to the on-air jokes, dramas and storytelling that more frequently characterized radio of the past at its best. It puts me at easy- good to listen to while fishing. His program is broadcast on 450 radio stations nationwide to an audience of over 3 million listeners. Howard Stern should be so lucky. The show is funny, self-deprecating and fairly even handed if slightly left of center. My Father-in-law was kind enough to buy me and my wife tickets to Garrison's one man show at Wingate University as a Christmas gift. I am grateful.

Garrison Kellior appeared after an introduction. He was there to tell us stories and to talk to us. The last thing I expected was for him to come on stage and ask us to sing but he did. He started our evening by saying we were all Americans and we were here tonight together and despite our divisive times or more appropriately because of them we should start the evening by singing our national anthem and he was right. I’m not sure "The Star-Spangled Banner” has ever given be goose bumps for so long- the whole song. My skin got tired.

Then we sang “America the Beautiful”, just because we wanted to.

He talked and he sang and told stories that split my side. He spoke about or more accurately around the fact that we as a nation have placed ourselves in danger and have allowed ourselves to become soft and unaware of all that we have and how much it takes to maintain it. And I got the sense that he fully understands our crest of culture and our apex of empire and that this ship is unsustainable and is in need of a great turn. He did me and all of us there though a favor and offered a reprieve or more accurately an understanding of the historical insignificance of our crisis. He told us he was born on September 9^th 1942- 9 months and ten minutes after the bombing of Pearl Harbor. Some people, he believes have different ways of dealing with difficulty. We were all amused. It turns out for those of us who have grown up without real crisis that it is odd and upsetting to recognize the hardships associated with this biological life. Without war, famine and pestilence as even occasional visitors a whole generation or two of Americans has grown up under the parentage of television with false expectations and delusions of grandeur. I have chief among my concerns a fear about how we will react to the coming crisis in energy. I see anxiety in the unfamiliar eyes of the stranger who shops by my side or worse, abject apathy from the man who watches me walk past his house and I worry about whether we will be able to reconnect in the most basic of human ways in times of social strain.

Will the spirit of community so long the fabric of our culture rise again as we struggle to adjust, adapt and remake a better way of life in the face of a necessary change or will we chose fear and blame and hate? Time will tell.

To hear the Garrison Keillor speak the tales of our American experience is to laugh and to cry and to be happy about our lot in life regardless of when or where we are and what is coming. “Tell me your troubles and I’ll tell you mine” he said and don’t we need a little more of that these days. I am delighted and thankful to have had the opportunity to spend the evening in community with such an unexpecting and delightful storyteller, apparently a spiritual benefactor as well. I appreciate the humor and grace with which he gave me hope that through times of trouble we might, as a people be willing to laugh aloud as we work together.

"Some luck lies in not getting what you thought you wanted but getting what you have, which once you have got it you may be smart enough to see is what you would have wanted had you known." - Garrison Keillor