Bush unveils steps to counter high oil prices

Driving Toward Energy Independence

By David Morris, AlterNet
Posted on April 21, 2006
http://www.alternet.org/story/34753/

I imagine driving a car without consuming petroleum, or generating pollution, or making noise. Imagine getting the equivalent of 100 to 150 miles per gallon. Imagine that every time you drove, you pumped money into the local economy, rather than sending it to distant shores. Imagine that this car was not only ideal personal transportation but also a driving force, quite literally, for transforming both agriculture and electric-power generation in ways that benefited farmers and urban dwellers alike.

Farfetched dreams? Not at all. All of the necessary technologies have been developed and road-tested in the battery-powered car, the hybrid gas-electric car, the flexible-fuel car. All that's needed is to combine these approaches in a single vehicle that merges their advantages and eliminates their shortcomings.

The hybrid car, introduced in the United States only in 2000, is already a bestseller. More than 200,000 hybrid cars ply U.S. roads. But they suffer one major limitation: They can't go more than a mile or two on electricity alone. (Indeed, GM and Honda hybrids can't go anywhere without the gasoline engine running.) This makes them glorified gasoline-powered vehicles, with an electric motor assist. But a Toyota Prius or a Ford Escape can be fitted with an expanded battery pack, rechargeable from a household outlet, that would let it travel 20 to 50 miles between chargings. That is farther than many Americans drive every day.

Driving on electric power has many benefits. Electric vehicles, or EVs, are quiet and nonpolluting. Even taking into account increased power plant emissions, EVs still produce less pollution than gasoline-powered vehicles. And EVs are remarkably efficient, achieving the equivalent of over 100 miles per gallon -- twice the mileage of the best existing hybrid.

Of course, the Achilles heel of the EV has been the cost and performance limitations of its batteries; sooner or later, most motorists want to go more than 50 miles without stopping to recharge.

A plug-in hybrid overcomes that limitation by having a backup engine -- but instead of the gasoline engines used today, it could easily be a flexible-fuel engine of the type now powering more than 4 million vehicles on U.S. roads. These engines operate on any combination of ethanol and gasoline, and the additional cost to manufacture one has fallen to about $100.

But ethanol derived from corn or other biomass also has its Achilles heel. Current U.S. gasoline and diesel consumption is far too high to replace with plant-derived fuels. Planting all available agricultural acres in the country with fast-growing trees or switchgrass could generate only enough fuel to displace about 25 percent of current vehicle consumption.

Plug-in hybrids, however, overcome this biomass limitation by using electric power to reduce fuel consumption by as much as 85 percent. This lets biofuels become primary fuels rather than minor additives.

With the introduction of plug-ins, the transportation and electricity sectors begin to merge. Utilities would probably offer EV owners the option of recharging their batteries at a lower cost at night, when demand is low. No new power plants would be needed.

Indeed, widespread use of plug-in hybrids could address the principal disadvantage of wind turbines to generate electricity -- the absence, so far, of an efficient way to store the power until it is needed. Wind is an intermittent power source, making voltage only when the turbines are spinning. But utilities need to dispatch electricity when their customers demand it.

The batteries in thousands of plug-in hybrids, connected to the grid through two-way household outlets, could bridge this gap between generation and delivery. Indeed, some studies estimate utilities might pay EV owners $1,000 to $2,000 a year for using their batteries to help balance and stabilize the grid. (That's in addition to saving perhaps $600 a year at the gas pump.)

One can even imagine tens of thousands of very small wind turbines sprouting up at homes across the country, built primarily to fuel vehicles. Consider the arithmetic: Today, owners of large wind turbines get paid about 4 cents per kilowatt-hour (kWh) when they send the electricity over the grid to distant buyers. A farmer making wind power for his own use displaces retail electricity priced at 5 to 8 cents per kWh. But if that electricity is used in a plug-in hybrid, displacing gasoline, it is worth about 32 cents per kWh.

How futuristic are plug-in, flexible-fuel vehicles? Ford has introduced the first flex-fuel hybrid. Daimler Chrysler has about 100 plug-in vehicles on the road. Most interesting, perhaps, is the recent announcement by several companies of a plug-in conversion kit for Prius and Escape owners. One Canadian company has informed me that an order of 1,000 kits would cut the price in half (to between $4,000 and $5,000). At such a price, payback could come in less than seven years. And the costs will undoubtedly continue to decline.

The state of Minnesota, to use one example, has several advantages that could make it a leader in advancing these vehicles: An established ethanol industry, abundant wind power, plenty of gas stations selling E85 (half the national total, in fact), a top-notch automotive engineering program at Minnesota State University, Mankato. Not to mention the Ford Motor Co.'s St. Paul plant, now facing an uncertain future; it once made an all-electric pickup truck, as well as a flex-fuel pickup. In the future, it could make plug-in, flex-fuel hybrids on assembly lines powered by its own hydroelectric turbines.

A bill that begins to put in place a plug-in, flexible-fuel strategy is on the floor of the Minnesota State Senate and is wending its way through the Minnesota House. In five committees there has not been a single negative vote in either the Republican-controlled House or the Democrat-controlled Senate. We hope such unanimity sends American car companies a message.

David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis, Minn., and director of its New Rules project. He is the author of the report, A Better Way To Get There From Here (PDF).

© 2006 Independent Media Institute. All rights reserved.
View this story online at: http://www.alternet.org/story/34753/

The price of full service high octane gas reaches $4.049 dollars per gallon Thursday, April 20, 2006, at a gas station in Beverly Hills, Calif. Oil prices held steady near record highs Thursday after weekly data showed a drop in U.S. gasoline stocks, raising worries that refiners don't have an adequate inventory cushion ahead of the peak summer driving season. (AP Photo/Damian Dovarganes)



Also: REPORT: GAS SHORTAGES REPORTED ALONG EAST COAST...

Oil Refinery Attack Foiled, Saudis Say

Vehicles reportedly were packed with explosives; pipeline fire started

Beating Around the Bush By the Bourse

by Ingmar Lee

bourse / /n. (also Bourse) a stock exchange, esp. in Europe. ~Canadian Oxford Dictionary

Only bimbos believed Bush when he said it was WMD's that made him attack, invade, occupy and massacre Iraq. Most of us thought it was to steal Iraq's oil, but we were only partly right. What totally terrorized the tyrannical Texan tycoon was when Saddam played the oil bourse card in November, 2000. When Saddam started selling Iraqi oil in euro's, he jeopardized greenback hegemony as the world's supreme foreign exchange transaction currency. If this brilliant idea catches on, it will trigger the total collapse of the USA economy. The oil grab is a sideshow. The main feature is the oil bourse.

The Neocon global domination agenda is engendered by the denomination of global oil transactions in greenbacks. America prints out the bucks that are required for the purchase of oil, and the world has to produce stuff they can sell to get the bucks they need to buy oil. Printing Monopoly 'fiat' money only costs America the paper and green ink, so the USA dollar has been fattened on oil-enriched chicken feed since Tricky Dick delinked the buck from the bullion. The oil bourse scheme could so seriously setback US suzerainty that Saddam got stomped to smithereens. Krassimir Petrov, who teaches international finance in Bulgaria's American University, warns "should the Iranian Oil Bourse gain momentum, it will be eagerly embraced by major economic powers and will precipitate the demise of the dollar." Saddam was just the first wavelet in the coming tsunami. On March 20, 2006, Iran will start selling oil in euros.

Here's what the Bush cabal's Neocon Global Hegemony Manifesto, written in September 2000, has to say:

"At present the United States faces no global rival. America's grand strategy should be to preserve and extend this advantageous position as far into the future as possible. There are, however, potentially powerful states [read Europe, China, India] who are dissatisfied with the current situation and who wish to change it, if they can, in directions that would endanger the relatively peaceful, prosperous and free condition the world [read USA] enjoys today. Up to now, they have been deterred from doing so by the capability and global presence of American military power [read terrorist menace]. But as that power declines, [read currently being defeated in Iraq] relatively and absolutely, the happy conditions that follow from it will be inevitably undermined."

The latest Neocon ramp-up rhetoric for attacking Iran is a dreary fearmongering rerun of the same old lies that launched Bush's disastrous Iraq-attack. The same old WMD drumbeat is now rattling to attack and destroy Ahmadinejad's nascent civilian nuclear program. Bush will fail to get IAEA support to forward his Iran-sanctions feint to the UN Security Council, so there won't be any UN 'coalition of the willing.' Russia and China aren't interested, and Bush's Ambassador to India, David Mulford, has just ruined the nuclear carrot that Bush so carefully waved at India to get them to toe the US line. India has its nukes already, and hooking up the pipeline with Iran is more to their interest. This all makes a preemptive American or Israeli attack all the more likely, and the Neocon's insane desperation is such, that such an attack might just go nuclear.

Bush has stated that "All options are on the table.The use of force is the last option for any president. You know we have used force in the recent past to secure our country." Freaky Dick's office has tasked STRATCOM to draw up a plan which includes a large-scale air assault on Iran using conventional and tactical nuclear weapons. Condoleeza Rice says that "time had run out for talking to Tehran." John Bolton says that Bush "has made clear that a nuclear Iran is not acceptable." Newt Gingrich, who won't rule out a run for the presidency in '08, said, "If we don't have a very serious systematic program to replace the government of Iran, we're going to live in an unbelievably dangerous world. This is 1935 and Mahmoud Ahmadinejad is as close to Adolf Hitler as we've seen." Israel's Defense Minister Shaul Mofaz said that Israel was preparing to protect itself if international diplomatic efforts failed to convince Iran to give up its nuclear program.

When the Neocons conquered the White House in 2000, the U.S. surplus was approximately $5 trillion. That's all gone and the domestic deficit now stands at somewhere around $500 billion. The world's largest debtor nation owes $8,193,150,090,487.56 as of this morning, and the American debt is mushrooming by over a billion a day. Foreigners hold 48 percent of the U.S. Treasury bond market, 24 percent of the U.S. corporate bond market and 20 percent of all U.S. corporations. With "W" walloping US whack like that, why in the world would anyone want dollars?

Here's how the Neocons hoodwinked and swindled the world:

From the Third World Traveler website, Sohan Sharma, Sue Tracy and Surinder Kumar wrote,

"Oil can be bought from OPEC only if you have dollars. Non-oil producing countries, such as most underdeveloped countries and Japan, first have to sell their goods to earn dollars with which they can purchase oil. If they cannot earn enough dollars, then they have to borrow dollars from the WB/IMF, which have to be paid back, with interest, in dollars. This creates a great demand for dollars outside the U.S. In contrast, the U.S. only has to print dollar bills in exchange for goods. Even for its own oil imports, the U.S. can print dollar bills without exporting or selling its goods. For instance, in 2003 the current U.S. account deficit and external debt has been running at more than $500 billion. Put in simple terms, the U.S. will receive $500 billion more in goods and services from other countries than it will provide them. The imported goods are paid by printing dollar bills, i.e., "fiat" dollars."

Here's the Neocons worst nightmare:

China has more than $800 billion reserved in a giant stack of basically green, ink-smeared paper. When Iran starts selling its oil in euros, why wouldn't China just go ahead and convert that stack of paper to euros and use real money to buy oil instead? In January 2002, Canada unloaded nearly 20% of its gold stocks in exchange for euros, thereby bringing its euro holdings to the equivalent of about US$14 billion. That's about 42 percent of the total US$33 billion in foreign deposits and securities held by the government. Just 2 years previous, euros accounted for the equivalent of about US$7 billion of Canada's reserves, only 23 percent of the total. The gold sale reduced Canada's U.S. dollar share to 55 percent from 75 percent. Under Hugo Chavez, Venezuela is brokering barter deals for trading oil with 12 Latin American countries thereby cutting out the USA cut. At the OPEC summit in September 2000, Chavez delivered the report of the "International Seminar on the Future of Energy." One of its key recommendations was that "OPEC take advantage of high-tech electronic barter and bi-lateral exchanges of its oil with its developing country customers." That would be the end of dollar hegemony over OPEC oil transactions.

The War Resisters League calculates that the cost of the US military runs about $643 billion annually. This obscene military expenditure, which supercedes the total of all other combined global military expenditures, is responsible for 80% of the American debt. When the world stops propping up the debt-ridden USA dollar, that will end the Neocon global domination project and the world's worst terrorist menace. This much, "W" clearly understands, and so too, apparently, do his quisling war-mongering Democrat counterparts. The Neocon oil-mens cabal has an even clearer understanding of Peak Oil, and its equally ominous implications for the American economy. This quote from Investment Banker Matthew Simmons—a key advisor to the Bush Administration and Cheney's 2001 Energy Task Force and the Council on Foreign Relations: "What peaking does mean, in energy terms, is that once you've peaked, further growth in supply, is over. Peaking is generally, also, a relatively quick transition to a relatively serious decline at least on a basin by basin basis. And the issue then, is the world's biggest serious question."

In this horrific context, it's not too difficult to understand why the Bush Neocon cabal is preparing to risk all to go on a global oil-stealing spree, and to attack Iran, perhaps even with nukes. It's also easy to understand the cringing wimp-ass non-response of the Democrats. There's no way America can win, and America's got everything to lose. As Gavin R. Putland puts it, "If this oil-currency-war theory is a delusion, the U.S. administration can easily discredit it—by declaring that the USA has no objection if oil exports to the Euro Zone are denominated in euros." The crash of the USA economy will wreak global economic catastrophe. Paradoxically, that crash is this world's only hope for evading global ecological catastrophe. We should support Iran's oil bourse. Bring it on!

******

 Iceland the First Country to Try Abandoning Gasoline

Source:ABC News     
REYKJAVIK, Iceland— Iceland has energy to spare, and the small country has found a cutting-edge way to reduce its oil dependency. Volcanoes formed the island nation out of ash and lava, and molten rock heats huge underground lakes to the boiling point.

The hot water — energy sizzling beneath the surface — is piped into cities and stored in giant tanks, providing heat for homes, businesses and even swimming pools.

The volcanoes melted ice, which formed rivers. The water runs through turbines, providing virtually all the country's electricity.

Iceland wants to make a full conversion and plans to modify its cars, buses and trucks to run on renewable energy — with no dependence on oil.

Water Turned Into Fuel

Iceland has already started by turning water into fuel — hydrogen fuel.

Here's how it works: Electrodes split the water into hydrogen and oxygen molecules. Hydrogen electrons pass through a conductor that creates the current to power an electric engine.

Hydrogen fuel now costs two to three times as much as gasoline, but gets up to three times the mileage of gas, making the overall cost about the same.

As an added benefit, there are no carbon emissions — only water vapor.

In the capital, Reykjavik, they are already testing three hydrogen-powered electric buses. The drivers are impressed.

"I like these buses better because with hydrogen you get no pollution," said bus driver Rognvaldur Jonatanlson.

By the middle of this century, all Icelanders will be required to run their cars only on hydrogen fuel, meaning no more gasoline.

"If we make hydrogen and use that as a fuel for transportation then we can run the whole society on our own local renewable energy sources," said Marie Maack of the Hydrogen Research Project.

Icelanders say they're committed to showing the world that by making fuel from water, it is possible to kick the oil habit.

2006: The Year of Oil Collapse?

By James Howard Kunstler, Kunstler.com
Posted on January 11, 2006, Printed on January 11, 2006

Editor's note: This is one of three perspectives AlterNet has assembled on the prospect of peak oil and its implications for modern society and the global economy. The other two are from World Watch: Christopher Flavin writes that while we can't know exactly when oil production will start declining, we must focus on alternatives to petroleum now; and Robert K. Kaufman describes the role the market and government should play in helping to make the transition from a petroleum-dependent society.

The sheer weight and inertia of American life kept our systems on their feet through 2005, despite a worsening economic climate and some harsh body blows, like the hurricanes that pounded oil and gas production in the Gulf of Mexico. In a way, some perverse law of sociopolitical physics seemed to concentrate all the year's destructive potential in the devastation of New Orleans, Biloxi and other Gulf Coast towns -- while the mighty din of motoring and cheeseburger sales roared on elsewhere without pause from Cape Cod to Catalina.

First, a little background briefing on where we are at -- to use some of the bad grammar now normative in American life -- before I make predictions (i.e., guesses) about the year ahead.

You can only introduce so much perversity into an economic system before distortions cripple it. From 2001 through 2005, consumer spending and residential construction had together accounted for 90 percent of the total growth in GDP, while over two-fifths of all private sector jobs created since 2001 were in housing-related sectors, such as construction, real estate and mortgage brokering. Much of the money spent did not really exist except as credit -- incomes as yet unearned, hallucinated liquidity, wished-for wealth, all based on the expectation that house values would continue to rise at 10 percent to 20 percent a year, forever. It became a reckless racket, all predicated on sustaining an economy that had lost its other means for generating wealth -- foremost its infrastructure for making things besides suburban houses.

This housing bubble economy represented, holistically speaking, the wish to maintain a sense of normality in American life under conditions of disintegrating normality, and it is no symbolic accident that it centered on the images of hearth and home, because fundamental comforts were what many Americans actually stand to lose in a reality-based future. The decay of standards and norms in banking behavior applied to housing started, as in the case of the proverbial rotting dead fish, at the head, the Federal Reserve, and infected every lowly loan officer through the body until, in effect, lending standards ceased to exist.

The suburban housing bubble and its related activities were predicated on the idea that we could continue building out a living arrangement dependent on cheap oil and methane gas, and that all the subdivisions and strip malls would retain value for decades to come. Of course, this was the central delusion of the suburban sprawl economy, because it was obvious to anyone who gave the situation more than a cursory glance that cheap oil and gas were the things we were least likely to have in the decades to come.

This reality had begun to penetrate the American collective consciousness and will be represented in 2006 by millions of individual choices to not buy a new suburban house, either because the individuals fear the expense of long commutes, or they fear the cost of heating a 4,000-square-foot house occupied by only a few people (or both). As the inventory of unsold new houses mounts up, the prices of all houses, new and old, will start to go down. There will be enormous psychological resistance to this reality, expressed in a lag of correct pricing, as the owners of these value-shedding "investments" wait for the bubble behavior (anticipated 10 percent to 20 percent asset appreciation) to return. Eventually they will get the picture.

The velocity of change in the housing bubble (and the psychology involved) will be greatly affected by oil and gas prices. It seemed to many of us watching the energy markets that the world may indeed have passed through its all-time oil production peak in 2005. Production in 2005 was nearly flat over 2004. The world was producing and also using roughly 82 million barrels of oil a day. Oil coming into new production was not making up for signs of depletion showing among virtually all the world's major producers. Iran, Russia, Mexico, Venezuela, the North Sea and, of course, the United States, were all past peak.

The big mystery was Saudi Arabia, but its inability to boost production from the 50-year-old fields that comprised its main reserves suggested that it was topping out, too. Which left an energy-hungry world with the need to either (a) make other arrangements for powering industrial economies or (b) contest for control of the remaining oil reserves, which were substantially concentrated in the Middle East and Central Asia.

Here, I hasten to remind the reader that peak is peak, meaning right now we are all operating on the basis of a lot of oil flowing around the world. The comfort level is still high. The factories are still humming in China, and the six-lane commuting corridors are still full of big cars around Atlanta, Dallas, Denver and Minneapolis. The problem is that the oil supply will soon steadily diminish at a rate of at least 3 percent a year, and that necking down of supply is likely to be expressed in greater geopolitical friction and turmoil between the great nations who crave oil.

The United States entered into the military phase of this turbulence before any other nation. We used our superpower status to set up a centrally located Middle East garrison in Iraq, under the idealistic cover story that we were removing a dangerous head-of-state and helping to set up a model democracy that would invite us to stick around the vicinity indefinitely and thus retain some control over the deportment of other oil-rich states in the region.

The foregoing is the background of my predictions for 2006, which will be the year that the hardships and difficulties I lump together as "The Long Emergency" get some serious traction.

The world’s oil-allocation system is now so fragile that any disturbance in one producing region can send damaging shock waves around the planet. There is no more "swing producer." The United States squeaked through the huge loss of oil production capacity this fall by taking oil from our own strategic petroleum reserves and from Europe's. These actions kept oil prices in the high $50 range through the holidays, giving Americans a false sense of festive security. Those withdrawals are now over. Global demand for oil is still increasing. The strategic reserves will now have to be refilled (they're called strategic reserves for a reason). This will start oil prices moving upward again -- they already have moved above $61 as of Jan. 2.

I can't predict whether some maniac will drive a Zodiac boat into a tanker in the straits of Hormuz or fire a shoulder-launched missile at an Arabian refinery. If nothing like that happens, the first year of post-peak will express itself in turbulent oil markets. Fear of not getting enough will rule. Futures will be overbought and then dumped or shorted, and then overbought again. This will at least increase the violence of the ratcheting effect in the markets. Overall, I expect to see $100-a-barrel oil at some point this year. Last year I made a bet with a friend that oil would end 2005 at $75. I lost the bet. But it is a fact that the price of oil altogether ended the year 40 percent higher than 2004, so it is not as if the markets did not show extraordinary stress.

New laws regulating gasoline mixtures will also contribute substantially to higher gasoline prices (perhaps as much as 40 cents a gallon). So I will predict gasoline breaking through the $4-a-gallon mark sometime this year.

Our natural gas situation is pretty dire. Prices shot up for a while above $17 (per one million BTUs), but that was the energy equivalent of $100-a-barrel oil and was based at the time on the enormous damage in the Gulf of Mexico prior to the start of the heating season. The heating season so far as been abnormally mild in the northern United States, and prices have slumped back to the $11 range -- which is still a lot higher than the $7 range in 2004. Unlike oil, we will get no quick relief from international gas sources if the rest of winter turns sharply colder. We're short of terminals to receive significant quantities of imported liquefied natural gas, and they cannot be built quickly (or cheaply). The natural gas markets in the United States respond very sharply to current conditions. A warm week and the prices sink. A cold one and the price shoots up. Our gas storage for the year is slightly below 2004 levels. Even if we have a mild winter overall, there will be spikes of cold. Our production is still crippled in the Gulf. Therefore, I'll predict that methane gas prices will spike above $20 sometime before May.

High gasoline, heating oil and methane gas prices will absolutely kill the housing bubble for reasons I've already outlined. The production home builders will be idle, stuck with huge inventories in places that never should have been suburbanized in the first place. A lot of Americans holding "creative" mortgages -- no money down, interest only, adjustable rate, what-have-you -- will be crushed by the expense of their obligations. Many of them will go bankrupt under new bankruptcy laws that leave no wiggle room for escaping partial repayment. Their houses will flood the real estate markets in an orgy of distress selling. "Greater fools" will snap up these "bargains," failing to realize that many of the logistical liabilities will remain -- namely remote locations and huge heating costs of enormous McHouses -- even if the ownership terms are less hazardous than the previous owner's. At some point in the future, after several flippings perhaps, all those 4,000-square-foot houses 44 miles outside Denver (or Cleveland, or Seattle) will be seen as the mistakes that they are, and their cash value will reflect that.

With the cratering of the housing bubble, the U.S. economy has to fall on its ass. The global economy is likely to fall on its ass, too, since so much of it depends on the decisions of Americans to take out exotic loans for buying houses they can't afford. Large numbers of jobs will vanish in construction, remodeling, real estate sales, and the various mortgage rackets -- those things precisely related to the recent gains in GDP.

The sheer falloff in new mortgages will send a tsunami through financial markets addicted to continuous supplies of new "money" to preserve the illusion of expansion. I'd called for a Dow-4000 late in 2005. I think that was just an error in timing, and I still call for the Dow to sink into that range, or worse, in 2006. This will represent a moment of painful clarity for market professionals, as they realize that an industrial economy and the finance that serves it must be based on the expectation of generating real future wealth, not on zero-sum rackets, games of monetery musical chairs, or casino legerdemain. Hedge funds, which depend on predictable stability, will be especially vulnerable. They will certainly take some large banks down with them when they go. I'll call for the so-called government sponsored entities of Fannie Mae and Freddie Mac to groan under and then drown in a sea of nonperforming loans, probably with overtones of criminal irresponsibility.

If these things occur, ugly things would happen to the dollar. I would predict an episode something short of hyperinflation -- say a rapid 30 percent drop in dollar value -- with a later deflation in the price of things like houses, paintings by Childe Hassam and many consumer goods. Which means that standards of living will fall across the board as incomes vanish with jobs, and food and energy prices rise -- while Americans try to shed their houses at the same time that consumer products sit unsold on the shelves of WalMart, Target and Best Buy. This will spell the beginning of the end for the chain store universe.

The commercial airline industry is already whirling around the drain. 2006 will send it decisively down that drain. Since we cannot do without aviation in a nation as large as the United States (with train service on the level with Bolivia), the government may have to take over the crippled air routes. If that happens, then service will certainly be greatly diminished. Fewer people will be flying under the circumstances, anyway, but there is no reason to believe that this will all occur smoothly. Among other things, huge pension obligations would remain to be worked out.

By similar reasoning, I see an excellent chance for General Motors and Ford to go out of business in 2006. Sales of their stupid SUVs were already tailing off in the second half of last year, and they are not positioned to offer much of anything else. Anyway, a middle class groaning under insupportable debt and bankruptcy is not likely to be assuming new time payments for exactly the kinds of vehicles they would be insane to depend on.

As America roils in economic pain, factory workers in China will be thrown out of work. They will be extremely pissed off, and as their appeals go unappeased, they might start making political trouble in their country. That could easily stimulate Chinese leaders to divert their nation's attention with a compelling military project -- say some moves into the oil-rich former Soviet lands to China's west. Sooner or later, China eventually will go cuckoo from a shortage of fossil fuels. It only remains to be seen how this will express itself. So far it has only done so in terms of an aggressive outreach in oil contracts with producers like Venezuela and Canada. But those arrangements were based on a peaceful world and a peaceful China.

I have no idea what will happen with Iran. Their leader Mr. Mahmoud Ahmadinejad, is clearly a maniac -- calling for Israel to be removed to Alaska, for instance. But here I invoke my allergy to conspiracy theories by saying I do not necessarily expect any U.S. or Israeli strikes against that country. One could argue that Iran could comfortably kick back and watch America get tortured by the insurgency next door in Iraq, and I think it will do just that through 2006. The nuclear card is wild, however, and anything could happen if they keep slapping it on the table.

Which brings us to the extremely sore subject of Iraq. I maintain that our reasons for being there have not changed one bit, namely to make sure that we don't lose access to Middle East oil in any shape or form. Now my stating that does not mean I think we will necessarily succeed. The creation of a constitution in Iraq and holding elections based on it amounted to an admirable stunt, but I tend to think this experiment will dissolve into sectarian violence and civil war, probably in 2006, no matter what else we do. I predict that circumstances will impel us to withdraw from the Iraqi cities, but that we will not give up large bases near the oil production areas of the north and south, and that we will continue to control the air space over Baghdad. Our position in that country would then devolve to a sort of Fort Apache situation. I imagine the vast emptiness of the desert combined with air cover will afford us some protection. But our presence there will only inspire more turmoil, hatred and jihad elsewhere.

King Abdullah seems to be in pretty good health, but he is going on 82. I predict that there will be fissures in the kingdom and continued confusion about its oil production capacity. But by the end of the year, it ought to be clear that they have not increased their output. Peak for Saudi Arabia may be the beginning of the end of the Saud kingdom -- since peak itself is highly destabilizing.

In Europe, we are beginning to see some of the first tectonic heavings over energy as Russia jerks poor Ukraine around on its natural gas shipments. England has managed to piss away all the former advantage of its North Sea oil bonanza, and it now faces a future of dependence on Russian gas, plus the bankruptcy of its remaining industrial base. France enters 2006 somewhat more energy self-sufficient, at least as far electricity is concerned, since 70 percent of it comes from nuclear reactors. The other nations of Europe are apt to get restive this year and may more actively join the worldwide contest for access to fossil fuels. At the same time, they will be struggling to contain large Muslim immigrant populations, and I would be surprised if there were fewer problems in 2006 than last year, with the riots in France and the London subway bombings. We tend to write off Europe as a region of sclerotic cafe layabouts, but for the time being, many of these nations can still mobilize potent military forces if they have to defend vital interests. Generally, I predict 2006 will see a shift in power to the big energy bear, Russia. It's industrial infrastructure is otherwise decrepit. Its armed forces are bankrupt. But it has at least enough nuclear arms to blow up the world a few times over, so that, combined with its oil and gas assets, require us to take it very seriously.

Japan has nearly been forgotten. It now imports 95 percent of the fossil fuel it needs to run itself. God knows what they will do if geopolitical turmoil shuts down the shipping lanes that bring a steady stream of oil tankers to the islands. They are capable of mobilizing to defend their vital interests. We just haven't seen them do it since the 1940s. What role Japan will play in the Pacific remains a mystery, especially in relation to the growing power of China. Perhaps some of this oriental mystery will be revealed in 2006. Perhaps Japan will enter into some kind of Asian coprosperity sphere alliance. Japan's economy will otherwise be subject to the severe economic strains emanating out of America.

South America is going loco on us. It will probably never amount to a united front, but one by one, its nations will become more hostile to us, in the manner of Venezuela's Hugo Chavez and the newly elected Evo Morales of Bolivia, a former coca farmer who aims not to allow America any more say in what crops his people can grow. Chavez can jerk America around on oil imports if he wants to, but probably not without risking his health and position. Mexico's economy is dependent on ours, only Mexico will suffer by another order of magnitude if the U.S. economy turns down in a big way. In 2006 I think we'll see the first signs of overt hostility between our two nations as the United States desperately tries to come to grips with the flow of illegal immigrants, and Mexico attempts to divert its suffering peoples' attention by making threats of incursion and reviving claims to lands along the border. We could see the first shots of what could turn into a huge ongoing border nuisance, perhaps even a quasi-war. Meanwhile, Mexico's premier oil field, Canterall, has entered depletion. Mexico depends on imports of natural gas from us, and under the rather insane terms of NAFTA, we in the United States depend on gas imports from Canada to make up for the stuff we have to sell to Mexico. Those relationships may be subject to review.

Karl Rove will probably join Lewis "Scooter" Libby in the indictment pen for the Valerie Plame incident. Tom DeLay is going to have a very ugly trial in Texas, and Senate Majority Leader Bill Frist may end up being prosecuted for stock sale irregularities. These shows may so successfully entertain the public -- and the cable news impresarios -- that we will fail to notice the rising predicament of oil and gas prices and the cratering of the suburban sprawl economy (just as Watergate -- a very satisfying melodrama for those of us who were young reporters in 1973-4 -- diverted the United States from the first throes of the oil crisis). All this activity will tend to degrade the standing of the Republican Party to "junk" status. But there is no sign that the Democrats offer an alternative world-view to the "non-negotiable American way of life."

Political circuses will not completely divert the middle class from its own suffering, as mortgages devour what is left of Americans’ financial lives. But as they sink in fortune and hope, I predict we will see a turning of all the recent celebrity envy -- and the infotainment value spun off it -- into a vicious hatred of the rich and famous, and a new desire not to emulate them, but to punish them. Look out, Nicole Ritchie and the Donald Trump. The grandchildren of Ozzie and Harriet will be looking to eat you for dinner starting in 2006.

James Howard Kunstler is a regular contributor to Orion magazine, Mother Jones and the Atlantic Monthly, and is the author of "The Long Emergency" (Atlantic Monthly Press).

Source: Reuters
WASHINGTON, Nov 3 (Reuters) - The U.S. Senate on Thursday voted to allow oil drilling in Alaska's Arctic National Wildlife Refuge, barely rejecting a Democratic-led attempt to strike the controversial plan from a budget bill. Drilling supporters said developing the refuge's 10.4 billion barrels of crude would raise $2.4 billion in leasing fees for the government, reduce U.S. reliance on foreign oil imports and create thousands of American jobs. However, opponents said there was not enough oil in the refuge to lower gasoline prices significantly, and what crude is there would not get to the market for at least a decade. They also warned drilling would threaten ANWR's wildlife, which incudes migratory birds, polar bears and caribou. The Senate voted 48 (yes) to 51 (no) on an amendment to remove the ANWR provision from the budget bill. The Senate is expected to approve this week the overall federal budget-cutting bill. The House of Representatives may vote as early as next week on its budget legislation, which would also give oil companies access to ANWR. It remains far from clear, however, if a final version of the budget-cutting package -- which includes items ranging from farm subsidy limits to cuts in food stamps and Medicaid -- will be approved by both chambers.

The mystery of the eye

NBC2 News Last updated on: 10/31/2005 10:41:15 AM

WMP 9 or higher required LEE COUNTY— While watching NBC2 coverage of Hurricane Wilma about two dozen residents called the station reporting an unusual sighting. While watching a Doppler loop of Hurricane Wilma coming ashore, a number two appeared in the eye of the storm. In going back through the recorded Doppler loop, we found exactly what viewers were talking about. The image below was not altered in any way - it's a screen capture from the Doppler system. You can click 'play' above to watch the actual Doppler loop. NOTE: For the doubters out there, NOAA also picked up this image, though it's not as clear. View the image here: http://www.srh.noaa.gov/data/radar/archive/Tue/kamx/241002.gif (Thanks to John Burns for the link!)

Somebody's Trying to Kill "Hurricane" Wilma ... BEFORE She is Born!

With apologies for my unfortunate absence from this forum in recent days, for weeks now we have been presenting (in previous "Captain's Blogs") increasingly extraordinary images, archived radar data and expert testimony, all supporting the (to some) equally extraordinary new reality:

That, despite what experts tell us, the technlogy currently exists to actually control the weather -- and specifically, nature's most destructive type of storm: the hurricane itself.

And that "someone" has been using this technology this summer "in an undeclared, all-out 'weather war' against the United States" ... with (after Katrina) disasterous results ....

Tonight, we have discovered startling new evidence that we are right in this extraordinary model:

New MIMIC microwave imagery -- again, from the University of Wisconsin -- of the newly-formed Caribbean Tropical Storm, "Wilma."

The latest image "loop" (above) demonstrates an IDENTICAL "red tuning-fork interference signature" seen in a previous Tropical Storm-turned-Hurricane: "Ophelia!"

Here (below) is that archived Ophelia MIMIC loop ... complete with the same remarkable "tuning fork" interference pattern showing up now in recent "Wilma" images ....

Note how Ophelia responds -- both in terms of the wind intensity and the literal direction of the storm -- when this "tuning fork" pattern first appears.

It is our contention, based on the physics of these images (described at the official University of Wisconsin MIMIC site, here), that these bizarre "tuning fork" patterns -- note, geometrically aimed at the precise centers of these respective storms! -- are actually a "rainfall side-effect" of an unseen energy technology being applied to these respective storms ... in an effort to decrease both their wind velocities, and to simultaneously alter the storms' tracks themselves.

[In a future "Captain's Blog," we will lay out the complete physics (as we believe we currently understand it) behind what we are seeing in these astonishing microwave images.]

In the limited space we have here, suffice it to say that in this latest imagery of Wilma we seem to be seeing the first visible effort to reduce the strength of a potential hurricane; what we cannot see in this data, is the application of additional technology (by an "opposing team"), potentially attempting to enhance this same storm ... Wilma ... and then move it toward a specific "target" in this undeclared "war."

One important note: since we first called world-wide attention to these MIMIC microwave radiometry images in an earlier "Captain's Blog," the University of Wisconsin site has added a major "disclaimer" to all its posted MIMIC imagery. The new clam is that we are "only seeing imaging anomalies" -- created by the computer imaging process which creates these MIMIC imaging products themselves.

To which I have an obvious question:

If this is truly the case -- if we are seeing in these striking geometric patterns only "computer glitches" in the data -- why was this crucial "technical disclaimer" ONLY added to the MIMIC site AFTER we called attention here to the striking "geometric signatures" appearing on certain hurricane images within the archive!?

If this is truly just "a systemic computer problem," resulting from the nature of the satellite data involved and the algorithms being used to handle it, why was this disclaimer not posted on the site from the beginning ... for all the official users of this data?

Why not, indeed.

I think you know our answer ....

With that stated -- in the coming days, as additional MIMIC imagery of Wilma becomes available, it will be crucial for everyone here to watch for the appearance of additional "interference" signatures within new data ... as well as their direct physical effects (as with Ophelia!) on both Wilma's subsequent wind speeds ... and its direction of motion towards a landfall!

In this remarkable new data, we may be witnessing the first visible "confrontation" between two opposing forces (yet unknown ...) -- ushering in, as former Secretary of Defense, William Cohen first warned us in 1997, a totally new era of "global weather war" ....

Stay tuned.

Bush's Crisis Itinerary at Mercy of Weather, Even Nice Weather

Excellent graphics showing storm path, oil rigs, and refineries.

Note that the northeast quadrant of the storm is the most destructive.

Hurricane Katrina/Hurricane Rita
Evacuation and Production Shut-in Statistics Report
as of Thursday, September 22, 2005

Next Report will be issued on Friday, September 23, 2005 at 1:00 PM CDT
For information concerning the storm click on www.mms.gov

This survey reflects 68 companies’ reports as of 11:30 a.m. Central Daylight Time.

Districts	Lake Jackson	Lake Charles	Lafayette	Houma	New Orleans	Total
Platforms Evacuated	84	121	125	107	168	605
Rigs Evacuated	8	21	11	24	23	87
Oil, BOPD Shut-in	71,092	54,573	133,512	306,238	813,585	1,379,000
Gas, MMCF/D Shut-In	577.43	922.46	696.16	1,088.28	3,330.62	6,594.95

*These statistics are reflective of evacuations and shut-in production from Hurricanes Katrina (remaining) and Rita*

These evacuations are equivalent to 73.87% of 819 manned platforms and 64.93% of 134 rigs currently operating in the Gulf of Mexico (GOM).

Today’s shut-in oil production is 1,379,000 BOPD. This shut-in oil production is equivalent to 91.93% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.

Today’s shut-in gas production is 6.594 BCFPD. This shut-in gas production is equivalent to 65.95% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.

The cumulative shut-in oil production for the period 8/26/05-9/22/05 is 28,483,502 bbls, which is equivalent to 5.202 % of the yearly production of oil in the GOM (approximately 547.5 million barrels).

The cumulative shut-in gas production 8/26/05-9/22/05 is 131.757 BCF, which is equivalent to 3.610% of the yearly production of gas in the GOM (approximately 3.65 TCF).

These cumulative numbers reflect updated production numbers from all previous reports. The reports only represent input received by 11:30 a.m. CDT. If a company does not report by 11:30 a.m. it is not included in the special information release, but it is included in the cumulative shut-in production. This may result in an apparent increase in the cumulative report amount.

Shut-ins for oil and gas production are standard procedures conducted by industry for safety reasons. Once facilities have been inspected and all standard checks have been completed the production for these facilities will be brought back on line.

The MMS will continue to update the shut-in statistics at 1:00 PM CDT each day until these statistics are no longer significant.

MMS, part of the U.S. Department of the Interior, oversees 1.76 billion acres of the Outer Continental Shelf, managing offshore energy and minerals while protecting the human, marine, and coastal environments. The OCS provides 30 percent of oil and 21 percent of natural gas produced domestically, as well as sand used for coastal restoration. MMS collects, accounts for, and disburses mineral revenues from Federal and American Indian lands, and contributes to the Land and Water Conservation Fund and other special use funds, with Fiscal Year 2004 disbursements of about $8 billion and more than $143 billion since 1982.

Friday UPDATE:

Hurricane Katrina/Hurricane Rita
Evacuation and Production Shut-in Statistics Report
as of Friday, September 23, 2005

Next Report will be issued on Saturday, September 24, 2005 at 1:00 PM CDT.
For information concerning the storm click on www.mms.gov

This survey reflects 74 companies’ reports as of 11:30 a.m. CDT.

Districts	Lake Jackson	Lake Charles	Lafayette	Houma	New Orleans	Total
Platforms Evacuated	96	126	130	107	175	634
Rigs Evacuated	9	21	13	24	23	90