For OPEC, the Future Is Rosy

Practically gushing with petro-glee, the world oil cartel, OPEC, is predicting a "massive rise" in oil production over the next five years.

In a forecast that will dismay environmentalists – and which questions the theory that oil company reserves will become “stranded assets” – Opec’s annual report significantly revised production estimates upwards. Most of the production increase will come from countries outside Opec, led by explosive growth from frackers in the United States, with China and India leading the increase in demand.

Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection.
Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west. 

The world’s airlines will be the single fastest growing user of oil, increasing consumption by 2.2% a year on average, to 2040. However, the largest absolute growth is expected to come from road transport.

If OPEC is right, that should be game, set and match for what remains of the fight against climate change. The carbon economy wins and that's game over.

It adds new significance to the warning of Hans Joachim Schellnhuber almost three years ago at the Paris Climate Summit that any hope of achieving the international target of holding global warming to 2 degrees Celsius hinged on the "induced implosion" of the fossil fuel industry. He knew our chances were beyond slim unless the world's nations moved to eliminate the global carbon economy.

It was in March of this year that the UN secretary general, Antoinio Guterres, warned that we had until 2020 to make sharp reductions in carbon emissions or else we would lose the fight against climate change.

“Scientists are now worried that unless accelerated action is taken by 2020, the Paris goal may become unattainable,” the UN chief told reporters at the world body’s New York Headquarters.

The Paris Agreement on climate change, adopted by world leaders in December 2015, aims to keep global temperature rise to well below 2 degrees Celsius and pursues efforts to limit the temperature increase even further, to 1.5 degrees. 

“I am beginning to wonder how many more alarm bells must go off before the world rises to the challenge,” Mr. Guterres said, noting that 2017 had been filled with climate chaos and 2018 has already brought more of the same. 

“Climate change is still moving much faster than we are,” he warned, calling the phenomenon the greatest threat facing humankind.

Recent information from the World Meteorological Organization (WMO), the World Bank and the International Energy Agency shows the relentless pace of climate change. 

For instance, the UN chief said, energy-related carbon dioxide emissions rose 1.4 per cent, to a historic high of 32.5 gigatonnes.

The International Energy Agency echoes OPEC's petro-optimism. The 2018 World Energy Outlook won't be released until November but the 2017 WEO is consistent with OPEC projections. While it has a very positive view of renewables and the electrification of global power, it sees carbon energy booming into 2040.

In the New Policies Scenario, global energy needs rise more slowly than in the past but still expand by 30% between today and 2040, the equivalent of adding another China and India to today’s global demand. A global economy growing at an average rate of 3.4% per year, a population that expands from 7.4 billion today to more than 9 billion in 2040, and a process of urbanisation that adds a city the size of Shanghai to the world’s urban population every four months are key forces that underpin our projections. The largest contribution to demand growth – almost 30% – comes from India, whose share of global energy use rises to 11% by 2040 (still well below its 18% share in the anticipated global population). Southeast Asia, a region covered in a separate special report in the WEO-2017 series, is another rising heavyweight in global energy, with demand growing at twice the pace of China. Overall, developing countries in Asia account for two-thirds of global energy growth, with the rest coming mainly from the Middle East, Africa and Latin America.

Update:

The Guardian reports that we are now on target to exceed mankind's total 'climate budget' by 2030. This refers to the amount of greenhouse gas emissions humankind can add to the atmosphere if we're to have much hope of meeting the 2015 Paris Climate Summit agreement to hold global warming to 2 degrees Celsius. Put simply, our last, best chance is to slash emissions RFN or 'now.' Only, if the IEA and OPEC are right, we're heading in the other direction about as quickly as possible.

How do you like them odds, eh?

OPEC Sees a Bright Future Ahead. Unfortunately, It's Not Yours.

As far as the Organization of Petroleum Exporting Countries, OPEC, is concerned the future looks rosy.  In its latest outlook report, OPEC foresees $177 per barrel oil prices by 2040 and a market that will require an extra 21 million barrels a day over the next 25-years to meet growing demand.

I expect you know what this means.  If they're right, OPEC's future is very bright and yours, well, anything but.  It should, however, be music to the ears of our own Dark Prince, Harper, and his acolytes, Justin the Lesser and Terrible-Tempered Tom.

The findings of the report will come as a blow to climate change campaigners who are warning that unless serious action is taken to reduce green house emissions the world will face a catastrophic global warming shock beyond 2025.

Opec – which currently pumps about a third of the world’s oil – said that after the end of this decade the world will need to find an additional 1m bpd of crude annually through to 2040 when it forecasts that demand will reach 111.1m bpd up from about 90m bpd at current levels.

Although the figure is a slight downward revision from its previous report it highlights the continued dominant role that oil continues to play in the global energy mix despite warnings from the United Nations that urgent action is required to avoid a climate change catastrophe. According to Opec, Asia accounts for 71pc of demand growth in the developing world, with total global energy demand forecast to increase by 60pc through to 2040.

“It is fossil fuels that will continue to play the leading role in satisfying world energy needs in the future,” said Opec secretary general Abdalla Salem el-Badri on the publication of the 367-page report.

This seems to be in keeping with Aussie PM, Tony Abbott's recent pronouncement that "the foundation of the world's energy needs will be coal."

Meanwhile the International Energy Agency, IEA, three years ago gave us this clear warning:

"The world is likely to build so many fossil-fueled power stations, energy guzzling factories and inefficient buildings in the next five years that it will become impossible to hold global warming to safe levels, and the last chance of combating dangerous climate change will be "lost for ever", according to the most thorough analysis yet of world energy infrastructure.

"Anything built from now on that produces carbon will do so for decades, and this 'lock-in' effect will be the single factor most likely to produce irreversible climate change, the world's foremost authority on energy economics has found.  If this is not rapidly changed within the next five years, the results are likely to be disastrous.

"'The door is closing,' Fatih Birol, chief economist at the International Energy Agency, said. 'I am very worried - if we don't change direction now on how we use energy, we will end up beyond what scientists tell us is the minimum [for safety].  The door will be closed forever.'" 

Bear in mind, also, that it was less than a month ago that the Governor of the Bank of England, Mark Carney, proclaimed that we are in a "carbon bubble" in which most fossil fuel reserves should be treated as "stranded assets."  Carney came to this conclusion on accepting that, if we're to avoid catastrophic climate change, 80 per cent of already known fossil fuel reserves would simply have to be left in the ground, unburned.  

What these messages from Tony Abbott, OPEC, and our own Stephen Harper convey is a subtle but very real declaration of war on the planet, on us and on those who will follow us.  They're not going to back off voluntarily, responsibly.
  

 

Can We Not Stop Ourselves?

It's called AGW or anthropogenic global warming. It's warming that is anthropogenic, i.e. man-made, and it's global, just as humans now populate just about every corner of the Earth.

Nobody gets a pass. We're all in on this and we all bear the obligation to deal with it through mitigation, emissions cuts, and adaptation, bracing for the crash.

Nobody gets a pass but some are certainly more accountable than others.  We call this group the major emitters and, when you get into their ranks, you run into the real distraction machine.

When it comes to the major emitters club there are two kinds of memberships. There are countries that, by virtue of their enormous populations, emit far more than other nations. Then there are countries, like our own, where the population has a massive, per capita, emissions problem.

Countries like ours often resort to disgustingly greasy sophistry. That begins with the fairy tale that, because we're so small in numbers, we really don't make much difference so now, if you'll just step aside, we'll be on our way. We don't do that so overtly any more but you can still find oblique references on government web sites.  And, when we crunch our numbers, we take no responsibility for the future emissions from the highest-carbon, ersatz petroleum also known as bitumen that we sell abroad.  We'll flood the world markets with the stuff if we can get that pipeline up and running.  One thing I know is that Andrew Scheer's people and Justin Trudeau's people both think that flogging bitumen is a proper and principled thing for Canada.

We got a blunt warning recently. If we want a reasonable chance to avoid  catastrophic climate change, we must cut humanity's greenhouse gas emissions by half by 2030. We've now got less than a dozen years, the smallest of windows, to make this happen. A dozen years in which we may decide the future of human civilization if there even is to be one. So, as that old commercial asked, "where's the beef?"

There's that line about when you want to get yourself out of a hole the first thing you must do is stop digging. We're still digging and faster than ever.  Global emissions shot up in 2018, partly thanks to Trump's "burn the place down" energy policies. 2019 is going to be another record year for CO2 levels.

OPEC, the global oil cartel, sees a bright future for all forms of fossil energy, coal included.

Opec’s annual report significantly revised production estimates upwards. Most of the production increase will come from countries outside Opec, led by explosive growth from frackers in the United States, with China and India leading the increase in demand. 

Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection. 

Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west.

So, did you get that? We're supposed to cut emissions by half by 2030. We're now burning up 100 million barrels of oil per day. By 2040 we'll have ratcheted that up, not down but up, to 112 barrels per day. And, while the developed nations may have cut their coal consumption by a modest third by 2040 (I know, WTF!) developing countries will more than make up for it.

The OPEC numbers aren't wishful thinking. The International Energy Agency projections bear them out.

Meanwhile Earth, our one and only biosphere, the environment without which there is no life on this planet, is showing increasing signs of contagion.

We just learned that the Greenland ice sheet is melting four times faster than we had imagined. Globally, our oceans are heating at a record pace. We're told that, within the decade, the rich Barents Sea could transform from an Arctic marine environment to an Atlantic Ocean environment and eventually lose its bountiful cod stocks. Australia this summer isn't baking, it's on "high broil."

Meanwhile, a 16 year old girl goes to Davos to ask world leaders and the titans of commerce and industry to abruptly reverse course, to spare the world and humanity from their predations, even as she knows full well they won't.

I'll end this with a comment left on this blog by reader, Cap.

We have only one chance to get this right, and only a decade to do it in. Failure leads to human extinction. You'd think that would focus the mind. But no, it's business as usual.

As 16-year-old Greta Thunberg told the Masters of the Universe in Davos,

"Some people say that the climate crisis is something that we all have created. But that is not true because if everyone is guilty, then no one is to blame. And someone is to blame. 

"Some people, some companies and some decision-makers in particular have known exactly what priceless values they have been sacrificing to continue making unimaginable amounts of money. And I think many of you here today belong to that group of people. 

"I want to challenge those companies and those decision-makers into real and bold climate action. To set their economic goals aside and to safeguard the future living conditions for humankind. 

"I don't believe for one second that you will rise to that challenge. But I want to ask you all the same. I ask you to prove me wrong." 

Well, JT, what are you waiting for? 

Cap

A Cautionary Tale - Oil's Days are Numbered

Sorry, Rachel. Sorry, Justin. Sorry, Brad. The heyday of high-cost, high-carbon oil is drawing to a close. Not your fault. You just happen to be stuck with the filthiest, costliest faux oil there is in a world market awash in cheap, lower-carbon oil.

There are plenty of places around the world where they just pump good old crude oil right out of the ground. They don't have to mine it. They don't have to boil it out of the ground. They don't have to "upgrade" it and mix it with light oil and heat it just to get it moving through special pipelines.

The Saudis have loads of that good crude oil, "sweet oil." Yet they know that oil's days are numbered, even for their stuff. It pains me to suggest that we might learn a thing or two from a group as odious, even barbaric as the Saudis but, hey, they might just be the canary for our bitumen mines.

The Saudis peered into the future and what they saw convinced them there was no time to waste, they had to break their dependence on oil revenues. They even used the word "addiction." And so they've set a target of 2030 to be independent of oil revenues. That means a transition to a post-oil economy and in an almost breathtakingly short time frame.

Meanwhile, Michael Klare suggests we've hit a form of "peak oil" - on the demand side, not supply. Just as all this unconventional energy from fracking fields, bitumen mines and seabed wells is flooding the markets, demand is stagnating. That, in turn, leaves those who are blessed with fields of low-carbon, low cost conventional oil with the market whip hand.

Klare contends that the recent OPEC summit in Doha shows that the days when western producers could count on Middle East oil solidarity to prop up prices are over.

It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades -- with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers -- is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.

On the structural side, global demand for energy had, in recent years, ceased to rise quickly enough to soak up all the crude oil pouring onto the market, thanks in part to new supplies from Iraq and especially from the expanding shale fields of the United States. This oversupply triggered the initial 2014 price drop when Brent crude -- the international benchmark blend -- went from a high of $115 on June 19th to $77 on November 26th, the day before a fateful OPEC meeting in Vienna. The next day, OPEC members, led by Saudi Arabia, failed to agree on either production cuts or a freeze, and the price of oil went into freefall.

The failure of that November meeting has been widely attributed to the Saudis’ desire to kill off new output elsewhere -- especially shale production in the United States -- and to restore their historic dominance of the global oil market. Many analysts were also convinced that Riyadh was seeking to punish regional rivals Iran and Russia for their support of the Assad regime in Syria (which the Saudis seek to topple).

The rejection, in other words, was meant to fulfill two tasks at the same time: blunt or wipe out the challenge posed by North American shale producers and undermine two economically shaky energy powers that opposed Saudi goals in the Middle East by depriving them of much needed oil revenues. Because Saudi Arabia could produce oil so much more cheaply than other countries -- for as little as $3 per barrel -- and because it could draw upon hundreds of billions of dollars in sovereign wealth funds to meet any budget shortfalls of its own, its leaders believed it more capable of weathering any price downturn than its rivals. Today, however, that rosy prediction is looking grimmer as the Saudi royals begin to feel the pinch of low oil prices, and find themselves cutting back on the benefits they had been passing on to an ever-growing, potentially restive population while still financing a costly, inconclusive, and increasingly disastrous war in Yemen.

...Until very recently, it was assumed that the demand for oil would continue to expand indefinitely, creating space for multiple producers to enter the market, and for ones already in it to increase their output. Even when supply outran demand and drove prices down, as has periodically occurred, producers could always take solace in the knowledge that, as in the past, demand would eventually rebound, jacking prices up again. Under such circumstances and at such a moment, it was just good sense for individual producers to cooperate in lowering output, knowing that everyone would benefit sooner or later from the inevitable price increase.

But what happens if confidence in the eventual resurgence of demand begins to wither? Then the incentives to cooperate begin to evaporate, too, and it’s every producer for itself in a mad scramble to protect market share. This new reality -- a world in which “peak oil demand,” rather than “peak oil,” will shape the consciousness of major players -- is what the Doha catastrophe foreshadowed.

At the beginning of this century, many energy analysts were convinced that we were at the edge of the arrival of “peak oil”; a peak, that is, in the output of petroleum in which planetary reserves would be exhausted long before the demand for oil disappeared, triggering a global economic crisis. As a result of advances in drilling technology, however, the supply of oil has continued to grow, while demand has unexpectedly begun to stall. This can be traced both to slowing economic growth globally and to an accelerating “green revolution” in which the planet will be transitioning to non-carbon fuel sources. With most nations now committed to measures aimed at reducing emissions of greenhouse gases under the just-signed Paris climate accord, the demand for oil is likely to experience significant declines in the years ahead. In other words, global oil demand will peak long before supplies begin to run low, creating a monumental challenge for the oil-producing countries.

This is no theoretical construct. It’s reality itself. Net consumption of oil in the advanced industrialized nations has already dropped from 50 million barrels per day in 2005 to 45 million barrels in 2014. Further declines are in store as strict fuel efficiency standards for the production of new vehicles and other climate-related measures take effect, the price of solar and wind power continues to fall, and other alternative energy sources come on line. While the demand for oil does continue to rise in the developing world, even there it’s not climbing at rates previously taken for granted. With such countries also beginning to impose tougher constraints on carbon emissions, global consumption is expected to reach a peak and begin an inexorable decline. According to experts Thijs Van de Graaf and Aviel Verbruggen, overall world peak demand could be reached as early as 2020.

In such a world, high-cost oil producers will be driven out of the market and the advantage -- such as it is -- will lie with the lowest-cost ones. Countries that depend on petroleum exports for a large share of their revenues will come under increasing pressure to move away from excessive reliance on oil. This may have been another consideration in the Saudi decision at Doha. In the months leading up to the April meeting, senior Saudi officials dropped hints that they were beginning to plan for a post-petroleum era and that Deputy Crown Prince bin Salman would play a key role in overseeing the transition.

We know from prince Salman's announcements over the past week that Saudi Arabia has instituted a post-petroleum plan with ambitious target dates. The Saudis will continue to supply conventional crude that costs them just $3 per barrel to produce but woe betide high-cost, high-carbon heavy oil such as Athabasca bitumen.

When the Saudis, who can stay in the oil game far longer than we can ever hope to last, are moving to build a post-petroleum economy what conceivable argument is there for Canada constructing hazmat pipelines intended to stay in service 40-years or more? Are Canada's leaders, federal and provincial, so bereft of vision that they're incapable of imagining how we go ahead after the heavy machinery of Athabasca falls silent?

OPEC Threatens the West over Biofuels

This time these sleazeballs may have finally gone too far. An OPEC spokesman says the West's pursuit of biofuels could cause the cartel to cut its investment in new oil production, driving the price of oil through the roof. From the Financial Times:

"Abdalla El-Badri, secretary-general of the Organisation of the Petroleum Exporting Countries, said the powerful cartel was considering cutting its investment in new oil production in response to moves by the developed world to use more biofuels.

"The warning from Opec, which controls about 40 per cent of global oil production, comes as the group of eight leading industrialised nations meets on Wednesday with climate change at the top of its agenda. The US and Europe want to use biofuels to combat global warming and to strengthen energy security.

"Mr El-Badri said this meant the biofuel strategy championed by Mr Bush and European leaders would backfire because 'you don’t get the incremental oil and you don’t get the ethanol'. In this case, he warned, oil prices would go 'through the roof'.

"He said Opec members had so far maintained their investment plans but he warned: 'If we are unable to see a security of demand...we may revisit investment in the long-term.'”

Hey George, sound like it's time for a little more regime change?

Best Case Scenario? We've Got Twelve Years.

The persistently optimistic, Intergovernmental Panel on Climate Change, gives humanity twelve years to mend our ways.

Within a dozen years, i.e. by 2030, the world must have massively curbed our consumption of fossil fuels if we're to have any hope of holding global warming to 1.5 degrees Celsius.

Can it be done? Sure. Will it be? That's another matter entirely. The odds are not looking good.

Just two weeks ago, OPEC released a forecast of a rosy future for all fossil fuels, including coal.

Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection. 

Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west.

The International Energy Agency's World Energy Outlook, 2018 won't be out for another month but this is from the 2017 Outlook:

In the New Policies Scenario, global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.

Do you see the problem there? We desperately need fossil energy consumption to plummet - no, to crater - but it's headed in the other direction and fast. And every state that has fossil fuel reserves, even bitumen, is racing to get on that gravy train of civilizational ruin.

There's now roughly thirty trillion dollars in fossil energy reserves subscribed on the stock exchanges and bourses of the world. That's the infamous "Carbon Bubble" that has the global economy in a choke hold. Burst it and some warn it will plunge the world into a global depression like nothing seen in the 20th century.  Yet it was that Carbon Bubble that former Potsdam Institute director, Hans Joachim Schellnhuber spoke of at the Paris Climate Summit in 2015 when he said the delegates' only hope of meeting even the 2 degree Celsius warming limit depended on the "induced implosion" of the fossil energy industry.

Professor Hans Joachim Schellnhuber, an adviser to the German government and Pope Francis, said on Friday: “In the end it is a moral decision. Do you want to be part of the generation that screwed up the planet for the next 1,000 years? I don’t think we should make that decision.”

The Paris conference was attended by more than 2,000 scientists from 100 countries. Schellnhuber told the delegates: “In order to stay below 2C (36F) [the internationally agreed limit for global warming], or even 3C, we need to have something really disruptive, which I would call an induced implosion of the carbon economy over the next 20-30 years. Otherwise we have no chance of avoiding dangerous, perhaps disastrous, climate change.”

Governments must euthanize their fossil fuel industries which, logically, begins with halting production of the highest-carbon, most climate dangerous fuels, thermal coal and bitumen. Those products need to be left safely in the ground. Now. If we can't stop the really dirty fuels we'll never stop the rest. We'll be making the lethal projections of OPEC and the IEA a reality.

Why does 1.5C matter?

2 degrees of warming, 1.5 degrees of warming, or, as the Trump White House recently conceded, 4 degrees Celsius of warming, why does it matter? I addressed that question recently in response to Trump's astonishing indifference.

We're now playing with the future of our grandchildren and great-grandchildren. They don't get a say in our government's energy policy but our government has a powerful voice in making whatever future awaits them far more brutal than it need be. Just because we're not overtly writing them off changes nothing. We're doing it nonetheless. The parties so many Canadians support, Liberal and Conservative, are on the same page on this one. When you vote for these parties you're endorsing their high-carbon energy policies. That's right, you.

The Guardian article addresses what's at stake in keeping global warming to 1.5 degrees Celsius. I won't repeat it all again.

Carbon pollution would have to be cut by 45% by 2030 – compared with a 20% cut under the 2C pathway – and come down to zero by 2050, compared with 2075 for 2C. This would require carbon prices that are three to four times higher than for a 2C target. But the costs of doing nothing would be far higher. 

“We have presented governments with pretty hard choices. We have pointed out the enormous benefits of keeping to 1.5C, and also the unprecedented shift in energy systems and transport that would be needed to achieve that,” said Jim Skea, a co-chair of the working group on mitigation. “We show it can be done within laws of physics and chemistry. Then the final tick box is political will. We cannot answer that. Only our audience can – and that is the governments that receive it.”

Don't underestimate what it would mean to cut carbon pollution by 45% by 2030. It would mean bursting the Carbon Bubble, writing off trillions of dollars of resources from the global financial statement. It would mean the end of Athabasca bitumen just as our government was neck deep in billions of dollars of revenue squandered on Justin Trudeau's pipeline. Not a pretty sight.

The most compelling argument for doing whatever it takes to slash carbon emissions massively enough to give us a chance at a 1.5C (near term) cap, came from a brief comment by an IPCC scientist on BBC News this morning. She said the urgency of holding the line at 1.5C was to "buy time" desperately needed to implement adaptation strategies for the next few generations. We need to buy time so that we can make the climate change impacts they will experience as manageable as possible.

We need to buy time for our grandkids and their kids. We need to buy time and it won't be cheap.

The New World Order

Forbes.com, which calls itself the "home page for the world's business leaders" says the battered US dollar isn't coming back to its former glory any time soon.

One of the greenback's travails is OPEC. Confidence in the US dollar took a hit last week when a technician plugged the wrong line into the wrong socket and inadvertently broadcast a full half hour of OPEC deliberations and debate. It was only when the first stories hit the Reuters web page that officials realized what was going on and pulled the plug.

The brief window into OPEC revealed both Iran and Venezuela arguing to dump the American dollar as the currency of oil trading. Saudi Arabia vetoed any further discussion, warning that word of OPEC uncertainty in the dollar could send it crashing. All of this, of course, was being broadcast live to the world.

Kuwait has already moved to switch from a dollar-peg to a basket of currencies and the ongoing malaise in the dollar may force others to follow suit. Then there's the 800-pound gorilla, China, and its trillion-dollar holdings of American currency.

The United States is vulnerable and it appears destined to remain that way for another year at least. Right now the US has its hands full just trying to ride out the storm of the housing market collapse.

How the Liberals and the Conservatives Jumped Into the Bag for the Fossil Energy Giants

They'll feed you no end of horseshit about how fossil fuels are critical to the Canadian economy. They don't want to tell you why they never have much, if anything, to show for it. They prefer not to dwell on why they collect minuscule royalties a fraction of what other nations demand. It's absolutely off-limits to delve into the hundreds of billions of dollars in unfunded liabilities for cleaning up the West's Tar Sands, tailing ponds and orphan wells.

Leaving bitumen out of the equation entirely, Alberta has shipped more conventional oil than even Norway. Yet Norway has translated their oil bounty into the world's largest sovereign wealth fund. Alberta, by contrast, bounces like a pinball between prosperity and poverty. It doesn't make any difference how much they gross, they can't hold onto it. They simply can't handle money.

When Justin Trudeau talks oil, it's horseshit. When Andrew Scheer or Jason Kenney or Scott Moe talk oil, it's horseshit. All of them are in the bag for the fossil energy industry.

The Guardian's George Monbiot explores how the world's filthiest industries managed to corrupt politics.

The tragedy of our times is that the gathering collapse of our life support systems has coincided with the age of public disservice. Just as we need to rise above self-interest and short-termism, governments around the world now represent the meanest and dirtiest of special interests. In the United Kingdom, the US, Brazil, Australia and many other nations, pollutocrats rule. 

The Earth’s systems are breaking down at astonishing speed. Wildfires roar across Siberia and Alaska – biting, in many places, deep into peat soils, releasing plumes of carbon dioxide and methane that cause more global heating. In July alone, Arctic wildfires are reckoned to have released as much carbon into the atmosphere as Austria does in a year: already the vicious twister of climate feedbacks has begun to turn.
Torrents of meltwater pour from the Greenland ice cap, sweltering under a 15C temperature anomaly. Daily ice losses on this scale are 50 years ahead of schedule: they were forecast in the climate models for 2070. A paper in Geophysical Research Letters reveals that the thawing of permafrost in the Canadian High Arctic now exceeds the depths of melting projected by scientists for 2090.

...A recent paper in Nature shows that we have little hope of preventing more than 1.5C of global heating unless we retire existing fossil fuel infrastructure. Even if no new gas or coal power plants, roads and airports are built, the carbon emissions from current installations are likely to push us past this threshold. Only by retiring some of this infrastructure before the end of its natural life could we secure a 50% chance of remaining within the temperature limit agreed in Paris in 2015. Yet, far from decommissioning this Earth-killing machine, almost everywhere governments and industry stoke its fires. 

The oil and gas industry intends to spend $4.9tn over the next 10 years, exploring and developing new reserves, none of which we can afford to burn. According to the IMF, every year governments subsidise fossil fuels to the tune of $5tn – many times more than they spend on addressing our existential predicament. The US spends 10 times more on these mad subsidies than on its federal education budget. Last year, the world burned more fossil fuels than ever before.

The Trudeau government admits to subsidizing fossil energy producers to the tune of a couple of billion a year.  The International Monetary Fund pegs the real value of those subsidies at $46 billion every year.  The IMF is accurate and honest. The Trudeau government is peddling horseshit.

As for Monbiot's comments about retiring fossil fuel assets (beginning with the dirtiest of them all - thermal coal and bitumen), that's not happening.  Recent projections by the International Energy Agency, OPEC and academics at the University of Calgary all conclude that the fossil fuel industry is looking at a rosy future into 2040 and beyond.

In 2011, the IEA gave this grim warning.

The world is likely to build so many fossil-fuelled power stations, energy-guzzling factories and inefficient buildings in the next five years that it will become impossible to hold global warming to safe levels, and the last chance of combating dangerous climate change will be "lost for ever", according to the most thorough analysis yet of world energy infrastructure. 

Anything built from now on that produces carbon will do so for decades, and this "lock-in" effect will be the single factor most likely to produce irreversible climate change, the world's foremost authority on energy economics has found. If this is not rapidly changed within the next five years, the results are likely to be disastrous.

OPEC added this in 2018.

Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection.

Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west.

In its 2018 World Energy Outlook, the IEA added this.

In the New Policies Scenario, global energy needs rise more slowly than in the past but still expand by 30% between today and 2040, the equivalent of adding another China and India to today’s global demand. A global economy growing at an average rate of 3.4% per year, a population that expands from 7.4 billion today to more than 9 billion in 2040, and a process of urbanisation that adds a city the size of Shanghai to the world’s urban population every four months are key forces that underpin our projections.

George Monbiot continues:

An analysis by Barry Saxifrage in Canada’s National Observer shows that half the fossil fuels ever used by humans have been burned since 1990. While renewable and nuclear power supplies have also risen in this period, the gap between the production of fossil fuels and low-carbon energy has not been narrowing, but steadily widening. What counts, in seeking to prevent runaway global heating, is not the good things we start to do, but the bad things we cease to do. Shutting down fossil infrastructure requires government intervention.

But in many nations, governments intervene not to protect humanity from the existential threat of fossil fuels, but to protect the fossil fuel industry from the existential threat of public protest.

It was Trudeau's own minister, Carr, who suggested the Liberal government was ready to call out the army to deal with concerned British Columbians who might obstruct development of the Justin Trudeau Memorial Bitumen Pipeline.

Because the dirtiest industries attract the least public support, they have the greatest incentive to spend money on politics, to get the results they want and we don’t. They fund political parties, lobby groups and thinktanks, fake grassroots organisations and dark ads on social media. As a result, politics comes to be dominated by the dirtiest industries.

We are told to fear the “extremists” who protest against ecocide and challenge dirty industry and the dirty governments it buys. But the extremists we should fear are those who hold office.

It couldn't be more obvious. We're at a crossroads, perhaps our final crossing. We are supposed to be going left, slashing emissions, instituting the "induced implosion" of the fossil energy industry as Schellnhuber cautioned in Paris in 2015. Instead our leaders have chosen to turn right, ramping up production and distribution of ever more fossil energy, including the dirtiest varieties - coal and bitumen.

If they won't even shut down the worst fossil fuels, the highest carbon, lowest value, garbage stuff - by which I mean bitumen and thermal coal - then they're in the bag. And, yes, your government is in the bag. It isn't even thinking of intervening to stop this climate-wrecking madness. That pipeline isn't going to pay for itself. Their goal is to ramp up bitumen production and to flood world markets with this low-value, high-carbon garbage. What does that say except "let'er rip" and "burn baby, burn"?

They're at war with life on Earth. They're at war with humanity. Ultimately they're at war with us - you and me. And, right now, they're winning.

Tall Tales From the Oil Patch

Even out here on the Pacific it's not hard to hear the squeals emanating from Athabasca and the Calgary Petroleum Club. The Tar Sands are in trouble. Actually the Tar Sands are just fine. It's the operators and their political minions that are feeling the heat of bad, bad, bad markets and a bargain basement resource.

The financial papers and the rightwing media are howling with demands for assistance. What they're really after is more government subsidies. More handouts.

The opening lines of a piece in today's Calgary Herald put it succinctly:

More locomotives. More upgrading. More tax write-offs. But, more importantly, more pipelines.

There's a glut of oil on world markets driving prices down. So, when it comes to the filthiest, highest carbon, ersatz oil on the planet that never attracts more than junk oil prices, the solution is government subsidies and pipelines to carry ever more of what the market doesn't want. Makes sense, doesn't it?

Premier Rachel Notley is discussing a series of steps to remedy the plight of Alberta heavy crude, which sold for less than US$18 a barrel on Tuesday. The light oil blend Edmonton par sold for less than half of U.S. benchmark prices, according to data from Net Energy.

On Monday, the premier announced a team of three envoys will sit down with energy company executives to come up with options to tackle the crisis. 

They will have to grapple with the divisive idea of government curtailing oil output as some producers call for the province to take such steps.

...In the 2017 federal budget, the Trudeau government altered tax treatment that allowed petroleum producers to deduct all expenses from discovery oil and gas wells in one year — something that’s available in the United States — moving Canada’s oilpatch instead to a 30-per-cent annual deduction rate. 

“We are competing for capital with the U.S., as well as other jurisdictions,“ said Tim McMillan, head of the Canadian Association of Petroleum Producers. 

“This has been something that has helped drive investment into the U.S., at the expense of Canada.”  

All of these issues — rail, tax treatment and resource upgrading — will help, but ultimately they don’t get to the heart of the matter: Canada needed more pipelines years ago and Ottawa didn’t deliver. 

What's missing from the Calgary Herald op-ed and from the woe is me reports in the rightwing media is any mention of the real problem, the one south of the border. Bitumen simply can't compete with the glut of cheap, conventional oil out of the US. The title of Scott Barlow's piece in today's Globe captures bitumen's predicament.

Texas holds the 'worst nightmare' for OPEC and Alberta.

Bloomberg’s Javier Blas is among the best media sources on the energy sector but today he doesn’t have good news for investors in the sector, 

“The map lays out OPEC’s nightmare in graphic form. An infestation of dots, thousands of them, represent oil wells in the Permian basin of West Texas and a slice of New Mexico. In less than a decade, U.S. companies have drilled 114,000. Many of them would turn a profit even with crude prices as low as $30 a barrel … August saw the largest annual increase in U.S. oil production in 98 years, according to government data. The American energy industry added, in crude and other oil liquids, nearly 3 million barrels, roughly the equivalent of what Kuwait pumps, than it did in the same month last year.’ 

“Texas Is About to Create OPEC's Worst Nightmare” – Blas, Bloomberg 

“Oil bounces above $63 after slide, but glut worries persist” – Reuters

Good oil. Cheap oil. Abundant oil. Adding, in one month, roughly what Kuwait pumps at full bore.

This factor seems to be overlooked in the screams and howls for more government-financed pipelines, more government royalty and tax deferrals, in order to pump junk tar onto glutted world markets. You'll not find that mentioned in the National Post, the Calgary Herald or the Financial Post.

If you find it impossible to believe that the Tar Sands are perched on a platform of outright lies and government incompetence, I'd recommend you read Dave Climenhaga's post on Andrew Nikiforuk's address to the Parkland Institute's annual conference.

...oversupplying a global market that doesn’t need more oilsands bitumen will only lower prices, argued the author and journalist who has written about Alberta’s energy industry for three decades. “That’s Economics 101.”

Instead, the Notley Government has adopted an energy development policy little different from that of preceding Conservative governments or the United Conservative Party Opposition, Mr. Nikiforuk asserted, arguing that such an approach is more likely to intensify the province’s economic pain than ease it. 

Shielding the industry from market forces through rock bottom royalties that effectively act as subsidies and using pipelines to create a supply glut of low-quality refinery feedstock is incompetent governance, whether it’s done by New Democrats or Conservatives, Mr. Nikiforuk said.

...Mr. Nikiforuk said rock bottom royalties – the policy of the Klein Government perpetuated ever since, most recently by the Notley Government’s 2015 royalty review – essentially subsidizes industry profits, especially those of corporations with their own refining capacity elsewhere. At the same time, it does little for the economy. He said the policy also leaves taxpayers holding the bag for the inevitable clean up – estimated by one credible analysis to be over $260 billion. 

As for the claim more pipelines will result in a narrower price differential thanks to new markets in Asia for Alberta bitumen, Mr. Nikiforuk said, that is a pipe dream that defies the laws of economics.

Never mind, he said, that the single study saying this, done for Kinder Morgan Inc. as a sales pitch when it was the Trans Mountain Pipeline Expansion Project’s sole proponent – and now apparently taken as gospel by the provincial and federal governments alike – “is bogus.”

Will China Topple the Petro-Dollar?

The United States has reaped enormous benefits from the global consensus that treats the US dollar as the world's reserve currency. No country, it seems, is as aware of this advantage nor as determined to end it than the new largest economy of them all, China.

For decades the United States and Saudi Arabia maintained a pact that ensured exclusivity for the American greenback. That may soon be over.

Saudi Arabia is not just being courted by the Trump administration. Without the pomp and circumstance of the Riyadh summit, where Trump addressed representatives from across the Muslim world earlier this year, the Chinese government is taking quiet steps to bring Saudi Arabia’s hydrocarbon reserves firmly into its orbit. Through its ambitious Belt and Road Initiative and a reported offer to invest in the kingdom’s state-owned oil company, Saudi Aramco, the Chinese are laying the groundwork for a profound economic shift in the Middle East and the world.

...

Forged by U.S. President Richard Nixon and Saudi King Faisal bin Abdulaziz Al Saud in 1973, the petrodollar system has wedded the greenback to the world’s most sought-after commodity.

In return for conducting energy sales exclusively in dollars, the United States agreed to sell Saudi Arabia advanced military equipment. One obvious reason China wants oil to be traded in yuan is to increase global demand for yuan-denominated assets. This would increase capital inflows and may eventually lead to the yuan being a plausible global alternative to the American dollar. Saudi Arabia is OPEC’s historic swing producer and price arbiter — if it agreed to conduct transactions in currencies other than the dollar, other OPEC producers would be forced to follow suit.

Beijing’s thinking is also influenced by geopolitical calculations. China’s return on investment in Saudi infrastructure could take decades, but Beijing would gain a valuable foothold in the Gulf and possibly persuade one of the world’s leading oil producers to upend the way oil is traded. Moreover, Saudi Arabia and its Gulf allies, especially the United Arab Emirates, provide a valuable hub to Middle Eastern and African markets through their ports, airports, and global networks. This spring and summer, Beijing and Riyadh announced a number of deals in various sectors, including increased energy exports and a reported $20 billion shared investment fund.

The Chinese have not given Saudi Arabia much time to consider its options. Chinese state-owned oil companies PetroChina and Sinopec have already expressed interest in a direct purchase of 5 percent of Saudi Aramco. This could prove to be a boon for Crown Prince Mohammed bin Salman, who has been eager to achieve a $2 trillion valuation of Aramco in a highly anticipated initial public offering, which is currently scheduled for 2018.

...

For Mohammed bin Salman, Chinese investment in Aramco could kick-start a new economic partnership with Beijing.  As part of its economic reform, Saudi Arabia’s ambitious Vision 2030 plan intends to raise foreign direct investment from 3.8 percent of GDP to 5.7 percent, or an additional $12 billion per year.

It is a far safer bet that China would be able and willing to inject that type of money into Saudi Arabia than U.S. private equity and hedge funds. The main reason for this is the difference in Chinese and Western time horizons when considering return on investment. While Western governments and companies have historically had appetite for infrastructure projects that offer a return on investment in a maximum of 30 to 40 years, the Chinese are playing a much longer game — in some cases investing in projects that break even in more than 100 years.

Toppling the petrodollar with the yuan would have ramifications, possibly seismic, throughout the global economy. That could be especially felt by nations most closely tied to the American economy, Canada foremost among them. Yet now that America has become nearly ungovernable it has created a vulnerability that the boys in Beijing cannot pass up.  Becoming the world's dominant power is a matter of more than GDP.

Oil Producing Countries Asked to Levy Carbon Tax on Exports

Oh this will go over well with Ol' Shifty Steve Harper.

A gaggle of poor nations are asking major oil producers to levy a 3-5% carbon tax on oil exported to affluent countries.   The receipts would then be deposited in a "green climate fund" to help the poorest and most vulnerable countries adapt to global warming.

The Ecuadorean president, Rafael Correa, proposed a carbon tax at a summit of Arab and South American countries in October in Peru which included the heads of state and energy ministers of nine of Opec's 12 countries. The Guardian understands the proposal was taken seriously and not dismissed out of hand. The idea was first mooted in 2001 by former World Bank senior economist Herman Daly – leading it to be dubbed the "Daly-Correa tax" – and will be further discussed by Opec countries at the UN climate talks which open on Monday in Doha.

"The first global tax on carbon emissions would achieve the most efficient and just way to do what [the] Kyoto [protocol] has failed to do: make carbon emitters internalise the effects of their actions and pay for the pollution they create," Correa told the summit.

Okay, Now Can We Stop?

So much for good intentions - of which the Road to Hell is paved.

For the seventh consecutive year, atmospheric carbon dioxide levels are up. They're just going up and, guess what, we're going down.

Atmospheric concentrations of the greenhouse gas were 414.8 parts per million in May, which was 3.5ppm higher than the same time last year, according to readings from the Mauna Loa observatory in Hawaii, where carbon dioxide has been monitored continuously since 1958. 

Scientists have warned for more than a decade that concentrations of more than 450ppm risk triggering extreme weather events and temperature rises as high as 2C, beyond which the effects of global heating are likely to become catastrophic and irreversible.

OPEC Wins

It was last September that OPEC, echoing the prediction of the International Energy Agency, boasted that oil consumption was booming well into the future, at least out to 2040. It was enough to cause UN Sec-Gen, Antonio Guterres to warn we had until 2020 - yeah, that's right, next year - to make sharp reductions to carbon emissions or we would lose the fight.

But just how bad are the latest numbers.  See for yourself.

This is the seventh consecutive year in which steep increases in ppm have been recorded, well above the previous average, and the fifth year since the 400ppm threshold was breached in 2014. In 2016, the highest annual jump in the series so far was recorded, from 404.1 in 2015 to 407.66 in 2016. 

As recently as the 1990s, the average annual growth rate was about 1.5ppm, but in the past decade that has accelerated to 2.2ppm, and is now even higher. This brings the threshold of 450ppm closer sooner than had been anticipated. Concentrations of the gas have increased every year, reflecting our burning of fossil fuels.

FFS, what is in our leaders' minds that makes them think flooding world markets with high-carbon, low-value, high-cost bitumen is a good thing? Let's not start with Jason Kenney. Let's begin with that guy in Ottawa.

Mission Accomplished? No, Seriously

If you believe that the invasion of Iraq was all about the oil, then it looks as though George Bush really can proclaim "mission accomplished."

The Baghdad goverment is facing a December deadline to introduce Iraq's new oil law and it's expected to be much more generous to the major oil companies than any deals they've gotten from Iraq's oil-producing neighbours.

Make no mistake about it: Iraq's oil reserves are vast and largely untapped. It is said to have 112-billion barrels of proven reserves and about 220-of probable oil reserves. Those figures don't include Iraq's vast, and unexplored western desert.

The greatest winners in the Iraqi oil fix will be the Big Four - Exxon, Chevron, BP and Shell. They stand poised to cut up the pie among themselves. Under Saddam, oil deals were negotiated with Russian, Chinese and French outfits but that was - under Saddam of course.

For years, leaders of Big Oil lobbied Washington for regime change in Iraq. They didn't want this prize to fall into the hands of the wrong nations. They also dreamed of the sort of deals that one could only hope to extract in normal circumstances. Big Oil wanted production service agreements ("PSA's") with the Iraqi government.

A PSA deal is a long term arrangement that grants an oil company both control of a field and extremely high profit margins. The oil company doesn't actually "own" the oil but that's pretty much irrelevant. Control of Iraq's oil resource is what counts. American control is going to see Big Oil get access and PSA's will see Big Oil gain actual control of the oil resources.

There has always been a view among some in Washington that gaining control of Iraq's oil wealth will allow the west to put the boots to OPEC. If Big Oil, rather than the Iraqi government, has control of the resource, these companies can operate independently of OPEC control, greatly undermining the cartel's global power.

The plotting and scheming behind this gambit is the stuff that would have made Machiavelli, Richelieu or Metternich squeal with delight.

Of course, nothing in Iraq is certain these days, certainly not the country's future. Big Oil needs the country to survive largely intact with a secular, federal government in Baghdad. If Iraq collapses into full-blown civil war, if it succumbs to pressures for partition or a secessionist movement in the Kurdish north or the Shia south, all bets may be off.

In other words, Washington stands to lose as much as any Iraqi does if the country fails. Do you think that reality has any bearing on George Bush's refusal to budge?

OPEC's Dilemma

The world's oil producers have a problem. For many of them, oil truly is Black Gold. For some of them, oil revenues have become the mainstay of their regimes, the grease that keeps the corrupt and oppressive wheels of their states turning.

Ask Steve Harper. It's a lot easier to rule an unruly electorate when you've got a treasury full of petrobucks to spread around. Pretty much anyone, even Steve Harper, can handle that. It's when those oil revenues stop flowing in that you get to see whether you have a bold leader, someone with vision, or a timid, feckless pretender to the throne (a.k.a. Stephen Harper).

But you can't think of oil without mentioning the Middle East. Saudi oil comes out of the ground so "sweet" that it can be pumped straight into waiting tankers. Total cost of production - ten bucks a barrel! So, even when the world oil price crashes to $40 per barrel, the Saudis still rake in a hefty profit.

When prices soared to $150 per barrel it truly was manna from heaven for the Middle East. And who can blame them for believing what the rest of us were told - that oil prices were only going up with $200 a barrel expected within a year? And so, with that in mind, they began spending like there was no tomorrow.

Even Dubai, which is essentially nothing more than a lovely beach, got into the act, building the world's most opulent hotels and lavish homes. The money was flowing in so fast they even built entire communities offshore in developments created in the shape of palm trees (see above).

Now, of course, that money has dried up and Dubai doesn't have any oil to sell, even at 40-bucks a keg. Thinking it could play banker to all the oil-rich nations around it left Dubai holding the bag with a bunch of banks in Wall Street meltdown mode.

Foreigners are fleeing Dubai as though the place has turned radioactive. The New York Times reported that Dubai's airport parking lot is littered with as many as 3,000 cars simply abandoned by foreigners who once sought to make their fortunes in that country. Apparently the exodus has something to do with Dubai law that sends defaulters to debtors' prisons.

It's a sign of the times. Dubai is a member of the United Arab Emirates and the only one that has no oil. You might have thought its fellow Emirates would come to the rescue to bail out Dubai's banks, Washington or London-style. Nope. There's a message in that.

It's a message that provides the subtext, the back story to OPEC's efforts to cut oil production in hopes of stabilizing and boosting world oil prices. Most producing countries simply can't afford to cut production. They've become utterly addicted to oil revenues to the extent they can no longer say no.

Gwynne Dyer addressed this addiction some time ago in discussing the perceived dangers of encouraging democracy in the Middle East demonstrated by election victories of Islamist parties such as Hezbollah and Hamas.

Dyer's take was that, given the brutal oppression of the Arab people by regimes we've supported (Mubarak, the House of Saud, etc.), it shouldn't be a surprise that Islamists win democratic elections. But he predicts that might last two, possibly three election cycles before moderates would begin to take over. And, in the meantime, the oil would just keep flowing because no Arab government, even an Islamist ruling party, could afford to turn off the taps.

A Reuters article places the producers' problem in perspective. To fund its current social programmes and infrastructure at current production levels, Venezuela needs $100 per barrel, Iran needs $90. Cutting production really isn't an option for those countries. Likewise Saudi Arabia has promised its people to build "economic cities" to offset unemployment and over-reliance on oil revenues (i.e. to prevent mass uprisings) for which it needs $50 per barrel. Apparently Saudi Arabia is already anticipating a deficit in 2009 of more than $17-billion. Even the Saudis aren't in a great position to start slashing production.

Taken in isolation, the Middle East's oil problems are serious but they're greatly magnified when placed in the context of the political and social unrest simmering throughout the region. This might not be the best moment to be a prince of the House of Saud.

The World Grumbles

From Quagmire to Maelstrom

I spent a couple of hours this morning scouring the major online papers and, as expected, they were all mainly focused on the new Bush strategy for Iraq. With extremely rare exception, the editorial responses are highly negative, doubting the plan's wisdom and its prospects for success.

One of the most forceful editorials came from The New York Times:

"President Bush told Americans last night that failure in Iraq would be a disaster. The disaster is Mr. Bush’s war, and he has already failed. Last night was his chance to stop offering more fog and be honest with the nation, and he did not take it.

"Americans needed to hear a clear plan to extricate United States troops from the disaster that Mr. Bush created. What they got was more gauzy talk of victory in the war on terrorism and of creating a “young democracy” in Iraq. In other words, a way for this president to run out the clock and leave his mess for the next one."

"...Mr. Bush said yet again that he wanted the Iraqi government to step up to the task of providing its security, and that Iraq needed a law on the fair distribution of oil money. Iraq’s government needs to do a lot more than that, starting with disarming the sectarian militias that are feeding the civil war and purging the police forces that too often are really death squads. It needs to offer amnesty to insurgents and militia fighters willing to put down their weapons. It needs to do those things immediately.

"Iraq’s Shiite-dominated government has heard this list before. But so long as Mr. Bush is willing to back that failed government indefinitely — enabling is the psychological term — Iraq’s leaders will have no reason to move against the militias and more fairly share power with the Sunni minority."

"We have argued that the United States has a moral obligation to stay in Iraq as long as there is a chance to mitigate the damage that a quick withdrawal might cause. We have called for an effort to secure Baghdad, but as part of the sort of comprehensive political solution utterly lacking in Mr. Bush’s speech. This war has reached the point that merely prolonging it could make a bad ending even worse. Without a real plan to bring it to a close, there is no point in talking about jobs programs and military offensives. There is nothing ahead but even greater disaster in Iraq."

Columnist David Olive was no kinder to Bush in the Toronto Star:

"To his record of lies, torture, illicit spying on and detention of innocent Americans, and his debauching of the U.S. Constitution he is sworn to uphold, Bush now means to add a needless prolongation of an unwinnable war. And to do so against the will of Congress, the recommendations of Congress's Iraq Study Group report last month, and the 70 per cent of Americans who disapprove of Bush's performance in office.

"Why? In order that his successor as president – and not Bush – wears the stigma of defeat in Iraq."

The Los Angeles Times gave Bush a scolding but wasn't ready to call the plan a failure - yet:

"PRESIDENT BUSH'S latest plan for Iraq has the feel of an overdue high school book report. It looks nice, reads well and is persuasive in parts. If only he had handed it in on time.

"The 'new way forward' outlined by the president in a prime-time address Wednesday makes too many obvious points (Iraqis must have more of a stake in their nation's success) and includes too many tired tropes (the war in Iraq is a central front in the war against terrorism). But the core of Bush's speech — the reason to maintain at least some flicker of hope — was an absolute-final-we're-really-serious-this-time ultimatum to the government of Iraqi Prime Minister Nouri Maliki."

"...It is unlikely that the additional troops will be enough to make a difference, or that Maliki will honor his latest pledge. But America, and Iraq, will know in a matter of months whether U.S. troops can operate freely and whether Maliki's government is worth defending.

"It would have been nice to have this answer months ago, and Bush deserves the blame for not demanding it sooner. At least he is finally making that demand. For his sake, and for the hundreds of thousands of U.S. troops and millions of Iraqis, we hope it's not too late."

Writing in the Washington Post, Thomas Ricks and Ann Scott Tyson note that the Bush plan commits the US Army to what they feared most during the 2003 invasion:

"The prospect of a more intense battle in the Iraqi capital could put U.S. military commanders in exactly the sort of tough urban fight that war planners strove to avoid during the spring 2003 invasion of the country. The plan to partner U.S. and Iraqi units may compel American soldiers to rely on questionable Iraqi army and police forces as never before. And while the president insisted there is no timetable associated with the troop increase, military officials said sustaining it for more than a few months would place a major new strain on U.S. forces that already are feeling burdened by an unexpectedly long and difficult war."

"...An Army officer who recently commanded a battalion in Baghdad predicted last night that the plan would fail because Iraqi Prime Minister Nouri al-Maliki and his government "will do things to maintain protection" of Sadr's forces. He also dismissed as "happy talk" the president's notion that the predominantly Shiite Iraqi army and police could reassure pro-insurgent Sunni neighborhoods by conducting foot patrols through them."

The Guardian succinctly described the Bush plan as "Defiance and Delusion" and warned that both leaders, Bush and Blair, are in a state of hopeless denial:

"George Bush's announcement last night that he is going to pour more troops into Iraq was the last throw of the dice in a misconceived enterprise that has dragged his country, this country and the Middle East into a nightmare."

"...The claim [by Tony Blair that] peace is returning to Basra is as unreal as Mr Bush's hope that order can be brought to Baghdad. Surrounded by the wreckage of the disaster they created, both men still hope, against all reality, that somehow the pieces can be put back together again. But their project is dead. A few more troops, or a few more months, will not restore it. Both men are on their way out. By stringing the war along without admitting defeat, it will become the business of another British prime minister and another American president to end it."

Al Jazeera reports that al Maliki intends to use A Kurdish unit of the Iraq Army in any action against Sadr and his enclave:

"An Iraqi general, speaking on condition of anonymity, said a unit of the Iraqi army, composed mainly of Kurds, would be sent into Sadr City.

"The general said Kurds, who are Sunni but not Arab, would make up the unit because soldiers from other Iraqi units were likely to refuse to fight fellow Shia."

Writing in The Independent, Middle East reporter Robert Fisk chose to remind us of the warning words of, brace yourself, Pat Buchanan:

"For their relevance this morning, the words of the conservative politician Pat Buchanan deserve to be written in marble:

"'We will soon launch an imperial war on Iraq with all the 'On to Berlin' bravado with which French poilus and British tommies marched in August 1914. But this invasion will not be the cakewalk neoconservatives predict ... For a militant Islam that holds in thrall scores of millions of true believers will never accept George Bush dictating the destiny of the Islamic world ...

"'The one endeavour at which Islamic peoples excel is expelling imperial powers by terror and guerrilla war. They drove the Brits out of Palestine and Aden, the French out of Algeria, the Russians out of Afghanistan, the Americans out of Somalia and Beirut, the Israelis out of Lebanon... We have started up the road to empire and over the next hill we will meet those who went before.'"

"...Historians will one day ask if the West did not plunge into its Middle East catastrophe so blithely because not one member of any Western government ­ except Colin Powell, and he has shuffled off stage ­ ever fought in a war. The Churchills have gone, used as a wardrobe for a prime minister who lied to his people and a president who, given the chance to fight for his country, felt his Vietnam mission was to defend the skies over Texas.

"But still he talks of victory, as ignorant of the past as he is of the future.

"Pat Buchanan ended his prophecy with imperishable words: 'The only lesson we learn from history is that we do not learn from history.'"

The final word comes from The Asia Times and an editorial entitled "Surging toward the Holy Oil Grail":

"The Iraqi media have been wildly speculating that Prime Minister Nuri al-Maliki could be the victim of a US-engineered white coup, the likely replacement candidates being two certified Washington puppets, current Vice President Adil Abdul Mahdi from the Supreme Council for Islamic Revolution in Iraq (SCIRI), an enthusiast of a proposed new Iraqi oil law, and former interim prime minister, former Ba'athist and "butcher of Fallujah", Iyad Allawi.

"But just when Washington and the Green Zone in Baghdad were abuzz with talk of regime change, Bush told Republican senators this week that his escalation and "new way forward" policies were basically designed by none other than Maliki, widely condemned for his support of Shi'ite death squads. It is astonishing that Maliki might actually have managed to convince Bush that he will frontally take on the militias of his ally Muqtada."

"...Washington's successive divide-and-rule tactics - facilitating a possible genocide of Sunnis, contemplating a mass slaughter of Shi'ites, betting on a regional Sunni/Shi'ite war - never for a second lose sight of the riches of Iraqi. For Big Business, an Iraq eaten alive by Balkanization is the ideal environment for the triumph of Anglo-American petrocracy.

"A new Iraqi oil law will most likely be voted on in Parliament in the next few weeks, before the arrival of Bush's 21,500 men, and it should be in effect in March. The law is Anglo-American Big Oil's holy grail: the draft has been carefully scrutinized by Washington, Big Oil and the International Monetary Fund, but not by Iraqi politicians. The profit-sharing agreements enshrined by the law are immensely profitable for Big Oil. And crucially, the law prevents any Iraqi government from nationalizing the oil industry - as the majority of Organization of Petroleum Exporting Countries (OPEC) member states did. In essence, it's a game of "if you nationalize, we invade you - again". So the law fulfills the early-2003 neo-con boast of "we are the new OPEC".

"Iraq's petrodollars will turn to mush - or rather, as with Saudi Arabia, be recycled back to US banks. Security company Blackwater will make a killing "protecting" Iraqi pipelines. Bechtel and Halliburton will get myriad fat contracts to rebuild everything the US has bombarded since 1991.

"But what's the use of an oil law in a 100-cadavers-a-day hellhole? Enter the escalation as a way of providing "stability". Whichever way the coming surge goes - ethnic cleansing of Sunnis, the battle of Sadr City - what matters is not the piling up of Arab Muslim (or American) bodies, but how much less cumbersome is the path toward the holy oil grail. Big Business will make a deal with anyone that facilitates the passing of the oil law, be it Maliki's Da'wa Party, the SCIRI, or - in a wildest-dream version - the Sadrists or al-Qaeda in Iraq."

And there you have it.

There's Nothing "Technical" About Five Consecutive Months of Economic Contraction

After seven consecutive deficit budgets, Sideshow Steve Harper can go to the polls adding a recession to his economic achievements.

The Canadian economy has contracted for five consecutive months and even the Harper-friendly Globe & Mail reports that suggests we've slipped into a recession.  Really, ya think?

Don't sweat it. This sort of thing happens to minor petro-states all the time. Sure Steve could blame it all on OPEC's oil price war but that would mean blaming Riyadh, the House of Saud, and they just inked a $15-billion order for Canadian armoured, democracy-suppression/Shiite extermination vehicles so he won't want to ruffle their keffiyehs.

And, as for that balanced budget Furious Leader wanted to contrive before Canadians go to the polls, that's pretty much over.  Oh, I know, let's just dissolve Parliament in time to make that whole budget business go away.

Here's an idea. Let's make the election a referendum on Mulcair's secret plans to drag Canada back to the 19th century.  Hell we've only had two prime ministers with beards - Alexander Mackenzie and Mackenzie Bowell, a stone mason and a printer respectively.

Look how long Canada has struggled to remain prime ministerially beard-free. Why should we betray our ancestors' sacrifice and throw out a century of progress now?

Burn Baby, Burn

If America has its way, your grandkids' chances of coping with climate change, already iffy, will be a lot worse. If anything the United States is poised to be the unchallenged bad boy of fossil fuels for the next several decades at least according to the International Energy Agency.

By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook. The boom will turn the U.S., still among the biggest oil importers, into a net exporter of fossil fuels.

“The United States will be the undisputed leader of global oil and gas markets for decades to come,” IEA Executive Director Fatih Birol said Tuesday in an interview with Bloomberg television. “There’s big growth coming from shale oil, and as such there’ll be a big difference between the U.S. and other producers.”

The agency raised estimates for the amount of shale oil that can be technically recovered by about 30 per cent to 105 billion barrels. Forecasts for shale-oil output in 2025 were bolstered by 34 per cent to 9 million barrels a day.

The U.S. industry “has emerged from its trial-by-fire as a leaner and hungrier version of its former self, remarkably resilient and reacting to any sign of higher prices caused by OPEC’s return to active market management,” the IEA said.