The Permanent Energy Crisis

This article strongly supports the traditional claim that fossil fuel mining
and consumption are leading to an unbalanced world that is a threat to the entire
planet, not just Dineh. According to the article, there are those, however, who may
see coal mining as a “solution” to an oil crisis which means that, despite the
current shut down of Peabody, people should be on the lookout for plans to greatly
expand coal mining in the area.

The current contender appears to be this Headwaters, Inc. corporation that has
signed a Memorandum of Understanding with the Hopi Tribal council. Very similar to
the Reliant company concept, it appears to consist of 2 major initiatives: a coal
liquification project and a electric power plant.

ZNet | Ecology

The Permanent Energy Crisis

by Michael T. Klare; TomDispatch; 02.10.06

President Bush’s State of the Union comment that the United States is “addicted to
oil” can be read as pure political opportunism. With ever more Americans expressing
anxiety about high oil prices, freakish weather patterns, and abiding American ties
to unsavory foreign oil potentates, it is hardly surprising that Bush sought to
portray himself as an advocate of the development of alternative energy systems. But
there is another, more ominous way to read his comments: that top officials have
come to realize that the United States and the rest of the world face a new and
growing danger — a permanent energy crisis that imperils the health and well-being
of every society on earth.

To be sure, the United States has experienced severe energy crises before: the
1973-74 “oil shock” with its mile-long gas lines; the 1979-80 crisis following the
fall of the Shah of Iran; the 2000-01 electricity blackouts in California, among
others. But the crisis taking shape in 2006 has a new look to it. First of all, it
is likely to last for decades, not just months or a handful of years; second, it
will engulf the entire planet, not just a few countries; and finally, it will do
more than just cripple the global economy — its political, military, and
environmental effects will be equally severe.

If you had to date it, you could say that our permanent energy crisis began,
appropriately enough, on New Year’s Day, 2006, when Russia’s state-owned natural gas
monopoly, Gazprom, cut off gas deliveries to Ukraine in punishment for that
country’s pro-Western leanings. Although Gazprom has since resumed some deliveries,
it is now evident that Moscow is fully prepared to employ its abundant energy
reserves as a political weapon at a time of looming natural gas shortages worldwide.
It won’t be the last country to do so in the years to come. In just the few weeks
since then, the world has experienced a series of similar energy-related
disturbances:

* The sabotage of natural gas pipelines to the former Soviet republic of Georgia,
producing widespread public discomfort at a time of unusually frigid temperatures;

* An eruption of oil-related ethnic violence in Nigeria, resulting in a sharp
reduction in that country’s petroleum output;

* Threats by Iran to cut off exports of oil and gas in retaliation for any sanctions
imposed by the U.N. Security Council over its suspect nuclear enrichment activities;

* And as result of such developments, a series of mini-spikes in crude oil prices as
well as reports in the business press that, if this pattern of instability
continues, such prices could easily rise beyond $80 per barrel to hit the once
unimaginable $100 per barrel range.

Vectors of Crisis

Events like these will certainly spread economic pain and hardship globally,
especially to those who cannot afford higher transportation and heating-fuel costs.
As it happens, though, these are not isolated, unrelated events. Think of them as
expressions of a deeper crisis. Like the tremors before a major earthquake, they
suggest the dangerous accumulation of powerful energy forces that will roil the
planet for years to come.

Although we cannot hope to foresee all the ways such forces will affect the global
human community, the primary vectors of the permanent energy crisis can be
identified and charted. Three such vectors, in particular, demand attention: a
slowing in the growth of energy supplies at a time of accelerating worldwide demand;
rising political instability provoked by geopolitical competition for those
supplies; and mounting environmental woes produced by our continuing addiction to
oil, natural gas, and coal. Each of these would be cause enough for worry, but it is
their intersection that we need to fear above all.

Energy experts have long warned that global oil and gas supplies are not likely to
be sufficiently expandable to meet anticipated demand. As far back as the mid-1990s,
peak-oil theorists like Kenneth Deffeyes of Princeton University and Colin Campbell
of the Association for the Study of Peak Oil (ASPO) insisted that the world was
heading for a peak-oil moment and would soon face declining petroleum output. At
first, most mainstream experts dismissed these claims as simplistic and erroneous,
while government officials and representatives of the big oil companies derided
them. Recently, however, a sea-change in elite opinion has been evident. First
Matthew Simmons, the chairman of Simmons and Company International of Houston,
America’s leading energy-industry investment bank, and then David O’Reilly, CEO of
Chevron, the country’s second largest oil firm, broke ranks with their fellow oil
magnates and embraced the peak-oil thesis. O’Reilly has been particularly outspoken,
taking full-page ads in the New York Times and other papers to declare, “One thing
is clear: the era of easy oil is over.”

The exact moment of peak oil’s arrival is not as important as the fact that world
oil output will almost certainly fall short of global demand, given the fossil-fuel
voraciousness of the older industrialized nations, especially the United States, and
soaring demand from China, India, and other rapidly growing countries. The U.S.
Department of Energy (DoE) projects global oil demand to grow by 35% between 2004
and 2025 — from 82 million to 111 million barrels per day. The DoE predicts that
daily oil output will rise by a conveniently similar amount — from 83 million to
111 million barrels. Voilá! — the problem of oil sufficiency disappears. But even a
cursory glance at the calculations made by the DoE’s experts is enough to raise
suspicions: Behind such estimates lies the assumption that key oil producers like
Iran, Iraq, Nigeria, and Saudi Arabia can double or triple their oil production —
unlikely in the extreme, according to most sober analysts. On top of this, the DoE
has been lowering its own oil-production estimates: In 2003, it predicted that
global oil output would reach 123 million barrels per day by 2025; by the end of
2005, that number had already dropped by12 million barrels, reflecting a growing
pessimism even among the globe’s great oil optimists.

This is not to say that oil will disappear in the years ahead: There will still be
adequate supplies for well-heeled consumers who can afford higher fuel bills. But
much of the world’s easy-to-acquire petroleum has already been extracted and
significant portions of what remains can only be found in places that present
significant drilling challenges like the hurricane-prone Gulf of Mexico or the
iceberg-infested waters of the North Atlantic — or in perennially conflict-ridden
and sabotage-vulnerable areas of Africa, Central Asia, and the Middle East.

No Escape from Scarcity

To make the energy picture grimmer, “spare” or “surge” capacity seems to be
disappearing in the major oil-producing regions. At one time, key producers like
Saudi Arabia retained an excess production capacity, allowing them to rapidly boost
their output in times of potential energy crisis like the 1990-91 Gulf War. But
Saudi Arabia, like the other big suppliers, is now producing at full tilt and so
possesses zero capacity to increase output. In other words, any politically inspired
(or sabotage related) cutoff in oil exports from countries like Russia or Iran will
produce instant energy shock on a global scale and send oil prices soaring to, or
through, that $100 a barrel barrier.

A chronic shortage of oil would be hard enough for the world community to cope with
even if other sources of energy were in great supply. But this is not the case.
Natural gas — the world’s second leading source of energy — is also at risk of
future shortages. While there are still major deposits of gas in Russia and Iran
(potentially the world’s number one and two suppliers) waiting to be tapped,
obstacles to their exploitation loom large. The United States is doing everything it
can to prevent Iran from exporting its gas (for example, by strong-arming India into
abandoning a proposed gas pipeline from Iran), while Moscow has actively discouraged
Europe from increasing its reliance on Russian gas through its recent cutoff of
supplies to Ukraine and other worrisome actions.

In North America, the supply of natural gas is rapidly disappearing. In a reflection
of our desperate (and demented) condition, Canada is now starting to divert some of
its remaining natural gas to the manufacture of synthetic oil from tar sands, so as
to ease the pressure on supplies of conventional petroleum. Given the prohibitive
cost of building gas pipelines from Asia and Africa, the only practical way to get
more gas supplies to North America would be to spend several hundred billion dollars
(or more) on facilities for converting foreign sources of gas into liquified natural
gas (LNG), shipping the LNG in giant doubled-hulled vessels across the Atlantic and
Pacific, and then converting it back into a gas in “regasification” plants in
American harbors. Although favored by the Bush administration, plans to construct
such plants have provoked opposition in many coastal communities because of the risk
of accidental explosion as well as the potential for inviting terrorist attacks.

As for renewables — wind, solar, and biomass — these are still at a relatively
early stage of development. With a trillion dollars or so of added investment they
could indeed ease some of the strain on fossil fuels in decades to come; however, at
present rates of investment, this is not likely to occur. The same can be said of
“safe” nuclear power and “clean” coal — even if the severe problems associated with
both of these energy options could be overcome, it would take several decades and a
few trillion dollars before they could possibly replace existing energy systems. The
only source of energy that can compensate for a shortage of oil and gas at this time
is conventional (unclean) coal, and a rise in its consumption would increase the
risk of catastrophic climate change.

The New “Great Game”

With looming energy shortages, the risk of conflict over energy access (and the
wealth fossil fuels generate) is certain to grow. Throughout history, competition
over the control of key supplies of vital raw materials has been a source of
friction between major powers and there is every reason to assume that this will
continue to be the case. “Just at it did when the Great Game was played out in the
decades leading up to the First World War, ongoing industrialization is setting off
a scramble for natural resources,” John Gray of the London School of Economics
observed in a recent article in the New York Review of Books. “The coming century
could be marked by recurrent resource wars, as the great powers struggle for control
of the world’s hydrocarbons.”

As in the Great Game, such conflicts most likely would not arise from head-on
clashes between the great powers, but rather through the escalation of local
conflicts sustained by great power involvement, as was the case in the Balkans prior
to World War I. In their competitive pursuit of assured energy supplies, today’s
great powers — led by the United States and China — are developing or cementing
close ties with favored suppliers in the Middle East, Central Asia, and Africa. In
many cases, this entails the delivery of large quantities of advanced weaponry,
advisors, and military technology — as the United States has long been doing with
Saudi Arabia, Kuwait, and the United Arab Emirates, and China is now doing with Iran
and Sudan.

Nor should the possibility of a direct clash over oil and gas between great powers
be ruled out. In the East China Sea, for example, China and Japan have both laid
claim to an undersea natural gas field that lies in an offshore area also claimed by
both of them. In recent months, Chinese and Japanese combat ships and planes
deployed in the area have made threatening moves toward one another; so far no shots
have been fired, but neither Beijing nor Tokyo have displayed any willingness to
compromise on the matter and the risk of escalation is growing with each new
encounter.

The likelihood of internal conflict in oil-producing countries is also destined to
grow in tandem with the steady rise of energy prices. The higher the price of
petroleum, the greater the potential to reap mammoth profits from control of a
nation’s oil exports — and so the greater the incentive to seize power in such
states or, for those already in power, to prevent the loss of control to a rival
clique by any means necessary. Hence the rise of authoritarian petro-regimes in many
of the oil-producing countries and the persistence of ethnic conflict between
various groups seeking control over state-oil revenues — a phenomenon notable today
in Iraq (where Shiites, Sunnis, and Kurds are battling over the allocation of future
oil revenues) and in Nigeria (where competing tribes in the oil-rich Delta region
are fighting over measly “development grants” handed out by the major foreign oil
firms).

“Up to this point,” Senator Richard G. Lugar told the Senate Foreign Relations
Committee on November 16, “the main issues surrounding oil have been how much we
have to pay for it and whether we will experience supply disruptions. But in the
decades to come, the issue may be whether the world’s supply of oil is abundant and
accessible enough to support continued economic growth…. When we reach the point
where the world’s oil-hungry economies are competing for insufficient supplies of
energy, oil will become an even stronger magnet for conflict than it already is.”

Averting Environmental Catastrophe

In addition to this danger, we face the entire range of environmental perils
associated with our continuing reliance on fossil fuels. Consider this: The DoE
predicted in July 2005 that worldwide emissions of carbon dioxide (the principal
source of the “greenhouse gases” responsible for global warming) will rise by nearly
60% between 2002 and 2025 — with virtually all of this increase, about 15 billion
metric tons of CO2, coming from the consumption of oil, gas, and coal. If this
projection proves accurate, the world will probably pass the threshold at which it
will be possible to avert significant global heating, a substantial rise in
sea-levels, and all the resulting environmental damage.

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. But because such alternatives are not currently capable of replacing oil,
gas, and coal on a significant scale (and won’t be, at present rates of investment,
for another few decades), the temptation to increase reliance on fossil fuels is
likely to remain strong. We are, in fact, caught in a conundrum: the world needs
more energy to satisfy rising global demand, and the only way to accomplish this at
present is to squeeze out more oil, gas, and coal from the Earth, thereby hastening
the onset of catastrophic climate change. In turn, the only way to avert such change
is to consume less oil, gas, and coal, which would involve severe economic costs of
a sort that most national leaders would be reluctant to consider. Hence, we will be
trapped in a permanent crisis brought on by our collective addiction to cheap
energy.

The sole way out of this trap is to bite the bullet and adopt heroic measures to
curb our fossil-fuel consumption while embarking upon a massive program to develop
alternative energy systems — an effort comparable to, and in some sense a reversal
of, the coal-and-oil-fueled industrial revolution of the nineteenth and twentieth
centuries. In the United States, this would, at an utter minimum, entail the
imposition of a hefty tax on gasoline consumption, with the resulting proceeds used
to fund the rapid development of renewable energy systems. All funds now slated for
highway construction should instead be devoted to public transit and high-speed
inter-city rail lines and all new cars sold in America after 2010 should have
minimum average fuel efficiencies of 50 MPG or higher. This will prove costly and
disruptive — but what other choice is there if we want to have some hope of exiting
the permanent global energy crisis before the global economy collapses or the planet
becomes uninhabitable by humans.

Michael T. Klare is the Professor of Peace and World Security Studies at Hampshire
College and the author, most recently, of Blood and Oil: The Dangers and
Consequences of America’s Growing Dependence on Imported Petroleum (Owl Books) as
well as Resource Wars, The New Landscape of Global Conflict.

[This article first appeared on Tomdispatch.com, a weblog of the Nation Institute,
which offers a steady flow of alternate sources, news, and opinion from Tom
Engelhardt, long time editor in publishing, co-founder of the American Empire
Project and author of The End of Victory Culture.]

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