Revised from Empty Plates Tomorrow

Oil and gas flashpoints

Natural gas: Russia has nearly twice as much natural gas as any other country – 1,680 trillion cubic feet in 2004, according to the US Energy Information Administration. Iran came next with some 940 trillion cubic feet of natural gas reserves, followed by Qatar (910 trillion), Saudi Arabia (235 trillion), United Arab Emirates (212 trillion) and the United States (189 trillion). Nigeria, Algeria, Venezuela and Iraq completed the top ten natural gas nations. Six of the ten nations with the largest gas reserves are largely or overwhelmingly Muslim countries.  Of the remaining four,  Nigeria is split (often with animosity) between Muslim and Christian beliefs, while Russia, Venezuela and the USA are predominantly Christian, at least in cultural heritage. Religious differences between producing and consuming nations may well intensify the political and economic conflicts over energy resources that are likely to grow as reserves shrink. At consumption rates of around 100 trillion cubic feet of natural gas annually, the world has enough for about 60 years.

Oil: Saudi Arabia has long claimed the world’s largest reserves of oil, which in 2004 were about 262 billion barrels. Some analysts question the accuracy of Saudi Arabian oil reserve estimates, which are probably lower than  claimed. Clues suggesting depletion include the injection of water into oilfields to flush remaining oil into the wells; a rise in output of heavy crude at the expense of more valuable light oil; and a scarcity of new wells to replace those that are pumped out. The data on which reserve estimates are based are not open to international scrutiny because the state-owned oil company, Saudi Aramco, has a monopoly on oil extraction and chooses which information to reveal, and which to conceal. Saudi Arabia is in many ways a client state of the USA, which sponsors the  ruling al-Saud family.

The list of nations with the largest oil reserves is similar to the gas list, because the two energy sources are generally found in close proximity. After Saudi Arabia, the oil reserve leaders are Canada, reported to have almost 179 billion barrels in 2004, mainly in oil sands; Iran, possibly about 126 billion barrels; Iraq, 115 billion; Kuwait, 101 billion stated in 2004 but in reality probably much less; United Arab Emirates, 98 billion; Venezuela, 77 billion; Russia, 60 billion; Libya, 39 billion; and Nigeria, 35 billion.

Table: States with the greatest oil and gas reserves, 2004

Source: Energy Information Administration, US federal government, January 2005.

Five miles below the sea bed in the Gulf of Mexico, American and UK oil companies located, after a prolonged period of expensive exploration and test drilling, a new oilfield that could hold between three billion and 15 billion barrels. Yet even if it became technically feasible to extract the lot, it would amount only to between five and 25 weeks of world oil consumption.  It would not even make up the probable gap, over 50 billion barrels, between Kuwait’s published reserves of 101 billion barrels at the end of 2004, and the much smaller quantities that may still be underground. Petroleum Intelligence Weekly reported on January 20^th 2006 that the Kuwait Oil Company reckoned, privately, on reserves of just 48 billion barrels – and only some 24 billion barrels of this much smaller quantity were fully proven.

The world’s fairly easily extractable oil reserves would be enough to last maybe 40 years from 2010, if annual consumption did not exceed the 2009 level of just over 31 billion barrels. If there  still remained easily extractable reserves of oil, companies would not be drilling thousands of feet below the sea bed, as Chevron is doing 140 miles out from land in the Gulf of Mexico, drilling to 19,000 feet under the bottom of the ocean, in a venture costing nearly a million dollars a day.

Democracy? Not for client states

The trouble with democracy is that voters can elect leaders whose priorities collide with those of the world’s most powerful governments and corporations.   Thus the USA, supported by the UK, protects the al-Saud dynasty in Saudi Arabia, but opposes the elected Islamic religious government in Iran. In Saudi Arabia the al-Saud family has absolute power and selects all the leading ministers. There is no ‘democracy’ in the western sense, but the steady flow of energy to the rich world persuades western governments, by and large, to keep quiet about it.

The oil state of Kuwait does have elections (men aged 21+, who can trace Kuwaiti ancestry back to 1920 or earlier, can vote), but the administration is controlled by the al-Sabah family. United Arab Emirates is a federation of seven states (Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm-al-Qaiwain). Each state is ruled by an emir who selects a supreme council. Qatar is also an emirate, where the emir and several ministers belong to the al-Thani family. The West regards all these as friendly states.

In Algeria, where poverty and violence are endemic,  western oil companies dominate energy supplies and western money props up the secular régime. Socialist Libya, materially  a more equal society than its neighbour Algeria, was on the USA’s blacklist for 27 years until May 2006, when the then-Secretary of State Condoleezza Rice announced the resumption of diplomatic relations. Oil companies had been lobbying Congress to remove Libya from the ‘evil’ list (although the administration maintained that energy supplies had nothing at all to do with the decision). The West’s long opposition to Libya had more to do with distaste for the ‘Revolutionary Leader’, Colonel Muammar Abu Minyar al-Qadhafi, and with his alleged financial support for international terrorism, than with concern for the population’s political rights.

The oil and gas wealth of Nigeria is enriching energy company directors and shareholders, but has intensified corruption in this desperately poor and increasingly polluted country, torn by civil wars and Christian-Muslim religious divisions. The West takes Nigeria’s oil: over 40 per cent of it goes to the USA. Oil wealth has not trickled down to local people, but just the opposite: pollution and land expropriation destroy their livelihoods. The Nigerian national constitution of 1999 says that 13 per cent of national oil revenues should be distributed to the regional states, but even if the money ever reached the states, it was rarely used for sustainable development purposes. The Nigerian Supreme Court ruled in 2002 that this constitutional right applied only to revenues from oil wells on land – thus leaving Nigeria’s growing off-shore oil industry out of the equation. The regional states demanded a higher share of on-shore revenues to compensate, but the federal government refused to meet their demands. So oil pipelines in Nigeria suffer frequent attacks by the government’s political opponents, who draw willing support from impoverished communities.

Russian and Canadian powerstores

Russia, after the break-up of the Soviet Union, was a beleaguered state. Billions of dollars in oil, gas and other raw material sales drained out of the country to foreign companies and to the oligarchs who acquired, with the apparent approval of the then-president Boris Yeltsin, national assets at knock-down prices. Vladimir Putin, president of Russia from December 31st 1999 to May 7th 2008 and subsequently prime minister,  re-established state control, but in the teeth of intense criticism from several western governments, and from western and Russian corporations.  The oligarchs moved abroad – London is a popular haven – and spent freely on mansions, yachts and football.

The oil and gas regions of Russia are in western and northern Siberia including the Arctic shelf, the Volga-Ural region, and the North Caucasus, and many are close to ethnic and religious flashpoints. In the far north, energy extraction has to contend with extremely cold, hostile climates. The Russian state-controlled oil and gas company Gazprom, in an acrimonious price dispute with Ukraine, chose New Year 2006 to shut off gas supplies to its neighbour. The Ukraine merely siphoned off Russian gas in transit by pipeline to Western Europe, provoking a chill of alarm from Romania to Germany. Gazprom’s aggressive action would scarcely have been contemplated without full support from Putin. Energy reserves give Russia renewed global power.

Handily in the USA’s back yard and traditionally a friend, Canada sits on 179 billion barrels or so of oil in the tar sands of Alberta and Saskatchewan. Extraction of crude oil from tar is energy-intensive, however, and requires huge quantities of water.  The consortium Syncrude Canada Ltd is a leading force in the extraction of oil from tar sands, harnessing the resources of several oil companies including ConocoPhillips, Imperial, Mocal and Murphy.  As a location  for extraction Canada has advantages of relative political stability and wealth equality, but the tar sand workings are environmentally destructive and yield little energy gain.

Who knows? The truth about ‘known’ resources is hazy and hidden in hubris.

Abbreviated from Empty Plates Tomorrow

(Over)confidence in technology

“The facts about our energy resources are sobering. The rapidity with which we are finding ways of spending that energy, often without realizing it, is shocking. The problems attendant in tapping unused reservoirs of energy are discouraging. Just the same, no one should say that man’s standard of living is likely to toboggan for lack of energy – cheap energy. This optimism comes not from a blind faith in the scientist and engineer but, instead, from an infinite confidence, supported by a long record of the past, that man’s ingenuity is equal to the task.”

– Charles A Scarlott, writing in Man’s Role in Changing the Face of the Earth, published in 1956.[i]

This quotation from Man’s Role in Changing the Face of the Earth reflects the confidence in technology that characterised the middle years of the twentieth century. Charles Scarlott was, at the time, manager of technical information services in the public relations department of the Stanford Research Institute, Menlo Park, California. From the perspective of the first decade of the 21^st century, the words ‘information services’ and ‘public relations’ themselves sound warning bells. Mr Scarlott was very well aware of rapidly rising energy use, even back in the 1950s, but trusted to the human mind to invent new, cheap and plentiful forms of energy, and policymakers by and large accepted this rosy vision.

It hasn’t happened yet.

Petroleum, gas and coal are organic products of past aeons.[ii] Petroleum is a mix of hydrocarbons*, oxygen, nitrogen, sulphur and other chemical elements, originally organic matter – phytoplankton and zooplankton – that has been transformed by bacteria, by heat and by pressure, over millions of years. Natural gas is predominately methane, mixed with ethane, butane and propane. Methane, CH₄, is a by-product of rotting vegetation. Butane and propane are more complex gases than methane, but like methane are alkanes, the ‘paraffin’ group of hydrocarbons. Coal, a solid hydrocarbon in gradations from lignite at 70 to 80 per cent carbon to anthracite at over 90 per cent carbon, is compressed ancient former living matter, typically large ferny plants.

Hydrocarbons drove the explosion in agricultural productivity in the 1950s, 60s, and 70s. Natural gas is the chief feedstock for nitrogen fertiliser manufacture. Irrigation, pesticide production and mechanised cultivation are fuelled by oil. Lavish use of hydrocarbons gives the illusion of limitless potential growth in food production, an illusion that permeates all forms of economic activity.

Yet the energy that powers non-essential ventures, such as extravagant leisure complexes, will soon be needed for more basic survival purposes, notably food production. An indoor ski centre in the oil state of Dubai opened in December 2005. It is 85 metres high, covers 22,500 square metres, and has five slopes, the longest 400 metres with a 60-metre fall. The temperature inside is –1 to –2 degrees C (28 to 30 degrees F) all the time, when outside it may be over 50 degrees C (more than 120 degrees F). The annual electricity consumption will be staggering. The SkiDubai dome, owned by the Majid Al Futtaim Group, is at the extreme end of energy-hungry leisure and tourism ventures that have no purpose other than entertainment – perhaps a valid undertaking from the perspective of the individual company, but dubious in the context of uncertain world energy supplies.

Losing the land

Energy-guzzling agriculture degrades whole environments. In the USA, the world’s most careless energy consumer, these are some of the consequences:

● On the central prairies, topsoil is eroding 30 times faster than natural processes can create it.

● The cropland acreage declines by around three million acres a year. Two million areas are lost to waterlogging, erosion and pollution. A million acres more succumb to roads, suburbs, shopping malls, and industrial developments.[iii] Three million acres is 4,688 square miles, 0.13 per cent of the whole land area of the United States, lost each year. That is an area three-fifths the size of Wales, or larger than the whole of Gambia or Jamaica.

● Irrigation for agriculture (often using electric or diesel-powered pumps[iv]) is depleting aquifers. Several vital aquifers in the USA’s southern states may be useless by the mid 21^st century.

By the mid 1990s, the food eaten by the typical American every year had devoured the equivalent of 400 gallons of oil[v] on the way to the plate or take-away carton. Food production in the USA uses up about 10 times more energy than is contained in the final product. Before the industrial revolution, food depended on the sunlight, which made plants grow to feed people directly, or indirectly via other species of animals feeding on the plants. People increased the productivity of plants and animals by selective breeding, and by organised cultivation and animal husbandry, and they spread animal waste, in the form of farmyard manure, to improve the soil. Farming this way was labour-intensive. One person’s direct labour might yield sufficient food to feed three or four other people, but one person could not feed a village, let alone a small town — until fossil fuels formed a temporary, one-time-only army.

Britain’s gas habit

Energy consumption in the UK is still rising, and in 2004 was 6.4 per cent more than in 1995: 235.6 million tonnes of oil equivalent* compared with 221.5 million. Natural gas fired the increase, usage rising from 32.4 per cent of total consumption in 1995, to 41.5 per cent in 2004. Natural gas is of course finite, despite its reassuring name. Renewable fuels contributed only a tiny amount, 0.2 per cent – the same as in 1995.[vi]

Energy consumption in the UK, 1995 and 2004

Percentage of inland energy consumption, primary fuel input, not seasonally adjusted.

Source: Calculated from table 1.2 in Digest of UK Energy Statistics 2005, from the Department of Trade and Industry.

About a third of Britain’s energy supply is converted into electricity. Most electricity in the UK is generated in power stations fuelled by coal or natural gas. Forty per cent of electricity TWh (terawatt[vii] hours) are fuelled by natural gas, coal generates another 33 per cent, and nuclear energy about a quarter. Just one per cent of British electricity is from renewable hydro power, and the amount of hydro power generated has actually fallen since 1980. The UK’s national grid infrastructure is at the end of its planned 40-year life. Many power stations are inefficient, and the nuclear plants are nearing the end of their lives. The margin between production capacity and peak demand has become wafer thin.

By 2020 electricity supply could be 40 per cent below the peak demand experienced in the early 21^st century, a gap of some 2,000 megawatts* (MW).[viii] London and the South East already produce only about half of the electricity the two regions consume, and are dependent on the national grid transferring supply from other regions. By 2023, only three per cent of the UK’s electricity – at 2005 consumption levels — will come from nuclear power, unless there is a major new building programme. Coal deposits could, if used wisely, help the switch from an oil- and gas-dependent economy to a more sustainable future, but of course Mrs Thatcher’s governments, from 1979 to 1990, closed most of the mines.

The UK became a net importer of gas in 2004. New Labour, waking up too late to the decline in natural gas output from the North Sea, saw two ways to salvation: the construction of storage terminals for imported gas, and a new generation of nuclear power stations. A gas terminal on Kent’s Isle of Grain came into use in 2005, and in 2006 storage tanks for liquefied natural gas were under construction at Milford Haven, Pembrokeshire. The capacity of the pipelines carrying gas from Norway and via Belgium was being enlarged.

The Department of Trade and Industry’s energy review, launched late in January 2006, was on the face of it an opportunity for a searching public debate on the energy choices ahead. Even while the review was in progress, though, Tony Blair was dropping hints that the government had already decided to build a new generation of nuclear power stations. The previous policy was for both nuclear and coal-generated electricity to be well on the way out by 2020, to be replaced mainly by gas and to a lesser extent by oil. This strange plan took no account of the reality that fossil fuels are finite.[ix]

Energy companies everywhere are desperately searching for more oil, more gas. The nations that have large proven reserves are flashpoints for future conflicts that could interrupt the global food trade, and increase hunger.

‘Empty Plates Tomorrow’ has a chapter called ‘False Dawns’ in which I wrote about dubious magic solutions to energy and food scarcity such as the hydrogen economy, nuclear fission and fusion, abiogenic oil, carbon storage, and genetic modification of agricultural crops. The section on genetic modification is headed ‘Genetic modification benefits big business, not small farmers’.

The alarming concentration of power over seed supplies, which worried me when I wrote the chapter, is portrayed in detail in ‘Seeds of Destruction’*, by F William Engdahl. ‘Seeds of Destruction’ catalogues the capture of world seed breeding by corporations, principally Syngenta, Dow, DuPont and, the most powerful of all, Monsanto.

Monsanto is the world’s dominant supplier of genetically modified seed. The seeds are ‘modified’ to improve Monsanto’s income stream, because the farmers purchasing them are contractually prohibited from saving any to re-use in a future planting. Many GM seeds are engineered to tolerate specific agrochemicals, such as Monsanto’s glyphosate-based herbicide Roundup. GM seeds are at the base of a corporate-controlled column that extends through cultivation technologies to the  sale, processing, manufacture and distribution of the crops farmers grow. In a further twist of the screw, the technology now exists to engineer seeds that self-destruct after a single use: they are sterile or terminator seeds.

Around three-quarters of the world’s farmers save their own seed for use the following year, a practice that terminator seeds would halt, forcing those farmers to buy fresh supplies every year. Generally, farmers’ own saved seeds come from plants well adapted to their local environments. The mega breeders like Monsanto are, for commercial reasons, concerned more with their seeds’ suitability for their own agrochemicals than with their fitness for local conditions.

Corporate control of seed production became far simpler after 1994, when the Uruguay Round of the General Agreement on Tariffs and Trade  (GATT) created the World Trade Organisation. One of the early outcomes was the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which allowed corporations to patent plant and animal life forms. The rush to patent genes, and gene combinations, began. F William Engdahl comments (‘Seeds of Destruction p.221) that:

“The WTO marked a step for the globalization of world agriculture, under terms defined by US agribusiness. WTO rules would open the legal and political path to the creation of a global ‘market’ in food commodities similar to that created by the oil cartel under the Rockefeller Standard Oil group a century before. Never before the advent of agribusiness had agriculture crops been viewed as a pure commodity with a global market price. Crops had always been local along with their markets, the basis of human existence and of national economic security.”

The US administrations in the 1990s — under George Bush senior and then Bill Clinton — backed the WTO’s constant pressures on nations to open up their markets for free trade that benefited corporations first and foremost, as they expanded and policed procurement and supply chains. George Bush senior decreed that genetically engineered or modified plants are “substantially equivalent” to their non-engineered counterparts and therefore do not require any special regulation. The WTO adopted this ruling as a binding Sanitary and Phytosanitary Agreement (Engdahl p.221), which commands that food standards and measures aimed at protecting people from pests or animals can be potentially used as a deliberate barrier to trade . This meant that governments could not ban genetically modified foods because that would be a deliberate barrier to trade. Furthermore, even the labelling of crops and foods as genetically modified was outlawed as a ‘technical barrier to trade’ (Engdahl p.222).

Engdahl summarises the issue thus: “The doctrine of the WTO was simple: free trade — on terms defined by giant private agribusiness conglomerates — was to reign supreme above nation states and above the concern for human or animal health and safety. ‘Free market uber Alles’ was the motto”. (p.224)

GM crops have other potential uses apart from making profits for the organisations holding patents on them. The US government holds the patent for terminator gene technology, jointly with a major cotton-breeding company called Delta & Pine Land, which Monsanto acquired in 2006. It doesn’t require much imagination to see how terminator technology could be incorporated in covert operations to destabilise a regime. Engdahl includes a quote (p.xiv) from Henry Kissinger, secretary of state to US presidents Richard Nixon and then  Gerald Ford. The quote is  “Control the oil and you control nations. Control the food and you control the people”.

——–

* ‘Seeds of Destruction’, by F William Engdahl, was published in 2007 by Global Research of Montreal, Canada. The ISBN is 978-0-9737147-2-2.

Mob rule applies when there is no legal system, or the legal system is ineffectual.

Plato (427-347BC) and Aristotle (384-322BC) both argued for a rule of law to bind rulers to just principles. Charles de Montesquieu (1689-1755), in pre-revolutionary France,  proposed that the legislature, executive and judiciary must be separate, to best maintain the rule of law in circumstances that are always complex and shifting. I wish these political thinkers were here today to consider how the rule of law can apply to transnational corporations, which operate across multiple jurisdictions and are thus not controllable by any nation state.

When corporations can buy lawmakers and judges, thus undermining the independence of both the legislature and the judiciary, the law is seriously weakened. In developing countries, corporations and the free trade rules imposed by their client body, the World Trade Organisation, can impede the impartial functioning of the legal system, as in Guatemala, to give one of several possible examples. In states that have imploded into chaos, like Somalia,  or which have been deliberately constructed and then deconstructed, like Iraq, the rule of law has been squashed by the law of the gun.

Guatemalan newspapers — who employ some very brave journalists — report mob beatings and lynchings and frequent assassinations. Each year about one Guatemalan in 2,275 is murdered within the country.* The legal system is corrupt and slow, and cannot begin to hold powerful corporations and organisations to account.

Here in the UK the judiciary is still notionally separate from the legislature, but is in danger of becoming a tool of government, as the Chilcot Inquiry on Iraq is showing in relation to the opinion whether the US/UK invasion of Iraq in 2003 was legal or illegal. If the judiciary becomes the pawn of the legislature, we can say goodbye to the tripartite governance advocated by de Montesquieu as essential for a just nation.  At the international level, corporations can walk all over the nation states in which they do business. Do we want a similar free-for-all within the state as well as above the state? As resources become scarcer (see ‘Empty Plates Tomorrow’) the rule of law could be the only just defence against a violent free-for-all in the competition for survival.  The desperate gangs in post-earthquake Haiti, using their machetes to scythe their way  through crowds to  grab food and drink, give us a Hobbesian** preview of how alarming life can be when raw power is the determinant of individual surival.

*The population of Guatemala is about 14.02m but probably about 1.1m are resident in the USA, mainly as illegals, leaving 12.92m or so within Guatemala. The homicide rate is 43.97 per 100,000 persons, according to nationmaster.com.

**Thomas Hobbes, 1588-1679, English philosopher who regarded life as intrinsically solitary, poor, nasty, brutish and short.

Extract from Empty Plates Tomorrow? – Systems and Individuals: Taking a Stand, or why it is worth battling for change even if for years public opinion does not appear to shift.
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