Drumbeat: August 15, 2022

U.S. Military Holds War Games on Nigeria, Somalia

Among scenarios examined during the game were the possibility of direct American military intervention involving some 20,000 U.S. troops in order to “secure the oil,” and the question of how to handle possible splits between factions within the Nigerian government. The game ended without military intervention because one of the rival factions executed a successful coup and formed a new government that sought stability.

…Thus, when General Ward appeared before the House Armed Services Committee on March 13, 2008, he cited America’s growing dependence on African oil as a priority issue for Africom and went on to proclaim that combating terrorism would be “Africom’s number one theater-wide goal.” He barely mentioned development, humanitarian aid, peacekeeping or conflict resolution.

And in a presentation by Vice Admiral Moeller at an Africom conference held at Fort McNair on February 18, 2023 and subsequently posted on the web by the Pentagon, he declared that protecting “the free flow of natural resources from Africa to the global market” was one of Africom’s “guiding principles” and specifically cited “oil disruption,” “terrorism,” and the “growing influence” of China as major “challenges” to U.S. interests in Africa.

Oil, Gasoline Tumble After U.S. Consumer Confidence Declines

(Bloomberg) — Crude oil fell to a two-week low and gasoline tumbled after a report showed that confidence among U.S. consumers unexpectedly declined in August, bolstering skepticism that fuel demand will rebound this year.

Oil dropped 4.3 percent after the Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 66 in July. Oil also slumped as the dollar gained against the euro, reducing the appeal of commodities to investors looking for an inflation hedge.

“Consumers are worried about the economy, and that’s raising concerns about demand,” said Phil Flynn, vice president of research at PFGBest, a Chicago-based brokerage. “Just a few days ago people were worried about inflation. That’s no longer the case.”

The Saudi Arabia Next Door

When we think about the concept of ’Peak Oil’ today, we need to keep in mind what we’re talking about. The curves show oil output peaking in so many parts of the world. This phenomenon is quite real, as long as you understand that it’s the light, sweet, easy-flowing oil that is getting harder and harder to find, certainly in significant quantity.

But there are a lot of other hydrocarbon molecules out there. Most of those molecules are not light, sweet crude oil. Indeed, most of the hydrocarbon molecules that the world will use in the future will be ’heavy,’ with lots of carbon atoms and not so many hydrogen atoms.

Squeezing oil from sand

A long-term decline in the demand for oil could undermine the huge investments in Canadian tar sands, which have been heavily opposed by environmentalists, according to a report published last month.

George Soros Cut Petrobras Stake in Second Quarter

(Bloomberg) — Billionaire George Soros cut his stake in his biggest holding, Petroleo Brasileiro SA, in the second quarter while buying more shares of other energy producers.

Buffett sells energy, buys drugmaker stocks

NEW YORK (CNNMoney.com) — Investor guru Warren Buffett bought up millions of shares of health care and drugmaker stocks in recent months while shedding energy shares, according to a Friday filing with the Securities and Exchange Commission.

Lester R. Brown: A Civilizational Tipping Point

In recent years there has been a growing concern over thresholds or tipping points in nature. For example, scientists worry about when the shrinking population of an endangered species will fall to a point from which it cannot recover. Marine biologists are concerned about the point where overfishing will trigger the collapse of a fishery.

We know there were social tipping points in earlier civilizations, points at which they were overwhelmed by the forces threatening them. For instance, at some point the irrigation-related salt buildup in their soil overwhelmed the capacity of the Sumerians to deal with it. With the Mayans, there came a time when the effects of cutting too many trees and the associated loss of topsoil were simply more than they could manage.

Beyond prices at peak oil: $20 per gallon

SUV plants shut down, the airline industry collapses, public transportation is revitalized and farms go local as gas prices skyrocket, predicts Forbes writer Christopher Steiner in a new book.

The end of globalization

According to Jeff Rubin, in his new book called Why Your World Is About To Get A Whole Lot Smaller, we are going to see the rebirth of communities of the past in the not-too-distant future.

The reason, says Mr. Rubin, is because of peak oil. Peak oil, for those who are unfamiliar with this term, refers to the fact that world oil reserves are running short, and may even peter out in our lifetime. This, of course, will lead to even higher prices for oil, and therefore higher prices for everything else, as so much of our culture is based on oil. Because of that, companies such as Wal-Mart will no longer find it cost-effective to import their goods from places such as China, which are so far away. As a result, those moth-balled factories and warehouses around us will be dusted off and put back into production, and the jobs that go along with them will be once more available. Of course, the goods we now buy so inexpensively will not be so cheap anymore, but don’t we all have too much stuff anyway?

Manage your expectations, not the future

I believe that many people today have expectations that life is going to carry on pretty much as it has in the last few decades. This is a broad statement as the lives of billions of people have been utterly different, yet the overall global picture has been of increasingly liberal politics and societies, economic growth and increased real wealth for the middle and upper classes. The poor too have had increased access to goods and services, although their lives may be more crowded and polluted than those living in suburbia.

My fear is that when people’s expectations are not met, they are disappointed, and the level of disappointment is proportional to the difference between their expectations and the real outcome. We see this in service delivery complaints that have recently made news in South Africa, where the promises of the politicians have not been matched in the real world. I think a big challenge facing our society is that as energy supplies dwindle, our imagined future of abundance is not going to be realised.

Zenn Says Lithium Off the Table, Still Bets on EEStor

If Canadian electric vehicle maker Zenn Motor Co. once saw lithium-ion batteries as a possible alternative to devices from its controversial investment in ultracapacitor developer EEStor, the more standard technology is now officially out of the running for its future cars. According to Zenn’s third-quarter results release, out today, the company’s engineering group “re-evaluated a number of lithium-based power-packs for inclusion in its solutions” between April and the end of June. But those efforts, in the context of what Zenn calls “the progressed state of development” of EEStor’s technology, have brought the company to teh following conclusion: Lithium does not offer “an economically viable power source for its offerings.”

Seattle is front line in grocery bag fee fight

SEATTLE (AP) — Leaders of this famously green city last year passed the nation’s first grocery bag fee, and other cities around the nation quickly followed.

But the plastics industry has been fighting back, bringing lawsuits, aggressively lobbying lawmakers and bankrolling a referendum in Seattle to overturn the 20-cent charge. The measure goes before voters Tuesday, and polls show marginal support after the industry spent $1.4 million, outspending supporters about 15-to-1.

Gloomy Negotiators End Bonn Climate Talks

The latest round of preparatory talks for the U.N. climate conference concluded today with negotiators lamenting that the languid pace of talks could mean there won’t be a deal on emissions in Copenhagen this December.

Beijing sets date for emissions cut

China’s carbon emissions will start falling by 2050, its top climate change policymaker said, the first time the world’s largest emitter has given such a time-frame.

NOAA: Warmest Global Ocean Surface Temperatures on Record for July

The planet’s ocean surface temperature was the warmest on record for July, breaking the previous high mark established in 1998 according to an analysis by NOAA’s National Climatic Data Center in Asheville, N.C. The combined average global land and ocean surface temperature for July 2009 ranked fifth-warmest since world-wide records began in 1880.

Oil lobby to fund campaign against Obama’s climate change strategy

The US oil and gas lobby are planning to stage public events to give the appearance of a groundswell of public opinion against legislation that is key to Barack Obama’s climate change strategy, according to campaigners.

A key lobbying group will bankroll and organise 20 ”energy citizen” rallies in 20 states. In an email obtained by Greenpeace, Jack Gerard, the president of the American Petroleum Institute (API), outlined what he called a “sensitive” plan to stage events during the August congressional recess to put a “human face” on opposition to climate and energy reform.