Disconnected Facts?

Every ten dollar rise in the price of a barrel of oil costs the United States Air Force some $600 million dollars. It is interesting that the air force are therefore adapting by attempting to develop long-term plans to use coal-to-liquid technology, with plants based in places such as Montana, to deal with their cost worries.

Follow the logic. They are projecting for the long term. I become more and more taken by the day with the peak oil theory, and they clearly are too. The oil is running down and the military machine, which is rational by its own lights, is reforming.

Peak oil is a theory familiar to you if you have followed some of my many links. Here's a scary one. It is coming into its own as a hard-science idea at the moment. It holds that the world's available supply of oil has peaked or is about to peak.

The spillover from the global warming controversies of recent years has been twofold. Firstly, this hardening theory has been lumped in with the much shakier idea of carbon-dioxide related global warming by those who wish to oppose the latter idea. That has meant that easy refutations such as 'the remaining oil, including that which has been uneconomic to extract, will simply rise in price and the market will allocate differently'. However, this idea fatally misunderstands the way in which cheap oil has come to dominate life and to provide the basis for the model of supermarkets, urban areas, energy use, plastics, and food in modern society.

Some of the people who oppose the idea have also pointed out that price gouging and the cost of refining oil are also issues that those who embrace the idea of the decline of oil simplistically have not taken account of. I think that their arguments seem to be classically refusing to engage with the main issue. The main issue is the multiple concrete indications of declining oil stocks. One site that does not make that mistake, but instead alleges a 'scam' can be found here, and fairness and balance require that I link to it.

Secondly, the grandness of the idea of planetary emergency has stopped people from looking at the practical effects of the first wave of oil decline. One is the relentless rise in the trend price of diesel oil, once very cheap. This affects every area of economic life but is tedious and grimy as a subject.

Diesel is absolutely vital to the economy of Britain. Train networks, supply lines for supermarkets, farm machinery, --all these have been built around it. Remember what sort of a society we have become. Tesco, a leading supermarket for my foreign reader, now moves more goods by tonnage per week than the WehrMacht could during the entire Battle of Stalingrad.

If you are wondering about this, let me repeat a point I made before. During the siege of Stalingrad in 1942-3, Goering assured Hitler that he could transport 500 tonnes of food per day to some 265000 men over around 400 kilometres. Of course, the Reichsmarschall couldn't.

The British supermarkets, who hold us all hostage in somewhat more silken cords, move that much in just 14 large lorries, and there are several million miles per day travelled by their fleets. The price of fuel for them is immense.

What's been happening to diesel prices in Britain?

They've been rising. They are some 114.25p a litre (if you are American, the figure translates to over $8.50 a gallon). This cannot be put down to taxation. Some industry analysts assert that this is because of demand pressures and a declining supply.
Peak oil analysts, however, continuing their 'spooky' tendency to predict price trends and rises accurately and chronologically, assert that the central point is the decline of supply and that this will intensify in a series of shocks soon.

The British government does not seem interested in peak oil. Some truck drivers obviously are, and have talked a great deal about protests. In Scotland, they had one last year. Some Australian governments have been. The American government? It has simply tended to dispense pabulum, even though truckers are today converging on the West Virginia Capitol to demand relief and similar protests are being mooted around America. Protests this week alone have taken place in South Carolina, New Jersey, Pennsylvania and Georgia, Connecticut, Illinois and Florida.

This is the shape of things to come.

Let me return just once more to my linked perennial theme, which if you are late of this blog you will know about, and that is the price of food. Between them, rice and wheat feed most of the world, or the world's farm animals. Some of the most ferocious condemnation of the past twenty years used to be reserved for the European Community's vast programmes of subsidy for farmers. Internationally, small states like Malawi and big states in the Cairns group were punished for aping it.

No more. The Financial Times yesterday carried a story detailing the substantial risk of world famine. The World Food Programme and its head, Josette Sheeran, call the decline in food supply and the rise in prices (in part due to energy rises) a 'perfect storm'.

Here is what is happening. If you are in the comfortable first world, this will hurt. If you are one of the vast mass of humanity, this could kill. Given that that mass is mostly young and male in the third world, and has little hope of advancement, that could mean that it becomes radicalised and they head for the rich world anyway. What is it Jefferson said? 'I tremble for the future when I reflect that God is just'.

We are at the moment obsessed with past battles. The Great Depression is our gloomiest economic coda. Stagflation worries economic journalists. The Ethiopian famine of the eighties is on the minds of aid agencies, and threats to a version of globalisation or from global warming both imbibed in the 1990s concern the media class of which politicians are an adjunct.

What is happening, however, is much more serious than these things, and slower moving so therefore we aren't picking up on them. Climate change, for whatever reason, mixed with an economy built on little more than air, food price rises, and peak oil could produce a crisis with few precedents in the history of the west, bar the dark ages or the fourteenth and fifteenth centuries.

Please prove to me it isn't true. In fact, to purloin the phrase from the song below, say it ain't so.