Sept 11, 2006 This was the day five years ago that war began between the US and Jihad, an unincorporated combine of Islamic nations, gangs, sects and tribes united in a campaign to harm, disable, defeat, and exterminate "infidel" Christians and Jews. There are various explanations for why this started. I have my own.
It's essentially an ecological crisis, conveniently pegged on an old religious beef. The population of many Islamic nations, fed by oil wealth, has reached critical overshoot. In particular, there are too many young men with no positions, no incomes, no prospects, and no hopes. Their glandular energies have been enlisted to act out the righting of real and imagined grievances against their"infidel" enemies. Their actions range from the sheer sadistic thuggery of small gangs to the strategic geopolitical maneuvers of major nation states.
We will be fighting with them for as far ahead as anyone can see, because our society can't function without their leading (in some cases only) resource, oil, and we are used to getting regular supplies from them. To aggravate things, the world is in a peculiar situation with this resource. The shorthand phrase for it is "peak oil."
Peak oil means that the oil-producing nations have reached their all-time maximum output and now face a certain relentless decrease in this resource and the wealth derived from it. This is especially problematical in a global economy based on steady incremental growth. Peak oil promises only incremental contraction in everything from industrial activity to available food. The people of the world will fight over what's left and they will divide into teams to do this. Right now, two teams facing off in the arena are the US and Jihad. Perhaps a few years from now Team China, Team Russia, Team Europe, and Team Japan will jump into the contest. Anything can happen now. Peak oil has the capacity to drive the world crazy. It is certainly driving the US crazy. Last week, Chevron announced the discovery of a major oil "play" in the Gulf of Mexico, a collection of deep-water fields code-named "Jack." The announcement was uniformly greeted by the news media with headlines that said, in effect, ENERGY PROBLEM SOLVED.
There are reasons to be unpersuaded. Chevron's "Jack" has been estimated to contain as little as 300 million barrels and as much as 15 billion barrels of oil. Nobody really knows yet. It will be years before we find out. During those years, production from the other oil fields of the world will decline by an amount that will cancel out any purported gain from even the best estimates of "Jack." The world uses about 30 billion barrels of oil a year. The US alone uses about 7 billion.
The oil from "Jack" will be expensive and difficult to produce. It is more than a mile underwater and another four miles under the rock under the water. It will require a lot of pipe and a lot of pressure to move that oil up, and the seabed in these deep-water operations is too far down for pipelines, so the oil will have to go directly into tankers. If oil's future is in deep-water, then its future is expensive and precarious.
It was interesting to see the price of oil on the futures market plummet down into the mid $60 range last week. I take two conclusions from that. One is that the psychological stress of peak oil has increased the emotional dimension of the trade to a dangerous degree, i.e. driven the traders crazy. The intense wish to solve the energy problem has momentarily overcome the reality of it not being solved. The second is that the US economy may be in greater trouble than the news media realizes, especially the economic "engines" of "home" building, real estate sales, and the associated mortgage rackets, with their spin-offs in the financial markets. There may be a hell of a lot fewer 18-wheelers shlepping chipboard and sheetrock around the nation this fall, fewer family trips to the WalMart, fewer Di-tech Mortgage customers dredged out of the sub-prime muck, and fewer bundles of interest-only ARMS passed through to the hedge funds.
Thus we would have a profile of exactly what oil geologist Colin Campbell and other peak oil opinion leaders have predicted: roller-coaster-style economic activity pegged to up-ratcheting oil prices, with increasingly deep economic troughs and ever higher oil price peaks. In short, massive economic instability.
Meanwhile, in the deep background of all this looms Jihad. We will have to be resolute in the face of Jihad and much more adaptable at home. So far, on the home front we have done nothing but defend and rationalize a stupid mode of existence -- suburbia -- and an insane economy based on building more of it -- the housing bubble. We have no leadership in politics, business, science, news media, or education informing the public that we have to make other arrangements for daily life -- not ten years from now, but right away.
Five years after 9/11/2001, the "progressives" want to wish away Jihad and the "conservatives" want to wish away the need to change daily life in America. Real political leadership, if it emerges at all, will have to come from some place off the normal political scale.
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