Energy & Economy: Smoke, Mirrors, …and Power Games

How will you adapt to the rapidly changing developments in energy supply and demand? How does this relate to an already strained international economy?

Energy drives our economy, and the burning of fossil fuels is the acknowledged main culprit (See The Guardian article on IPCC report) of runaway climate change. If humanity is to have a chance to develop a sustainable and resilient way of life, we must begin by understanding the relationship between our energy consumption, the economies it drives, and the consequences for humanity and our environment.

What does this mean for your company, your family, your life? Major changes are happening now, but many of these “signals” are being glossed over and repackaged to prevent disrupting the economy, already in a deepening crisis since 2007. This “smoke” and these “mirrors” can be cleared by being informed, making intelligent decisions and choices easier for you and your company.

Some facts of our time in regard to fossil fuel energy use are:

– Energy Subsidies: (according to International Monetary Fund) for the fossil Fuel Industry are currently 1.9 Trillion “(2½ percent of global GDP or 8 percent of total government revenues)”. What would be the effect if these subsidies were going towards renewable energy?

– Stranded Assets: to “avoid a rise in global average temperature of more than 2°C above pre-industrial levels”, 80% of all fossil fuel reserves are unburnable. Continued burning – and investing in fossil fuels – will amount to a “Carbon Bubble” with devastating effects on the global economy.

Here are some selected articles from reliable sources, although rarely seen on the front pages of these major newspapers or headlining the evening news of the majors.

The article in the Los Angeles Times read (May 20, 2014): “U.S. officials cut estimate of recoverable Monterey Shale oil by 96%”
The estimate just one year earlier was said to “boost California’s gross domestic product by 14%, add $24.6 billion per year in tax revenue and generate 2.8 million new jobs.” The earlier estimate made the California Monterey Shale 2/3 of the US total recoverable shale oil reserves.

Considering the vast investments necessary to finance the oil industry, this must have been quite a blow to aspirations of US oil independence. Overnight, the geopolitical position of Northern America had changed – although politicians and oil industry executives have done their best to downplay the importance of this new reality.

In the meantime, social unrest and wars have been raging in the Middle East for decades, most recently, and intensely, in Syria and Iraq. This region is still the source of vast oil reserves, which were diminishing according to an International Energy Agency (IEA) whistleblower already back in 2009:

“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,”

The same article in The Guardian continues:

“A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad.”

How does this, five years on, contribute to the present unrest in the Middle East?

Islamic State: The latest major “terrorist” threat, acting very much like a state, albeit outside the “system”. They bring in USD 3 million per day in oil revenues, besides what they get from kidnappings, extortion and other crimes. Jürgen Todenhofer, “the first Western publicist in the world who was allowed to visit the “Islamic State.” says upon returning from Northern Iraq:

“I firmly believe that ISIS currently is the largest threat to world peace since the Cold War. We are now paying the price for George W. Bush’s act of near-unparalleled folly; the invasion of Iraq. To date, the West remains clueless as to how this threat is to be addressed.”

Israel/Gaza: More than 1387 Palestinian lives were lost in Gaza (773 civilians), and 9 Israeli lives (three civilians) for Israel to secure access to gas reserves located under and off the coast of Gaza, see two relevant articles here, and here. The story in the mainstream media was:

“We continue with strikes that draw a very heavy price from Hamas. We are destroying weapons, terror infrastructures, command and control systems, Hamas institutions, regime buildings, the houses of terrorists, and killing terrorists of various ranks of command… The campaign against Hamas will expand in the coming days, and the price the organization will pay will be very heavy.”

In other words, a war on “terrorists” no mention of gas or oil reserves.

Arab Spring: Were the string of uprisings in Tunisia, Libya, Egypt, and Yemen the result of an upsurge of democratic aspirations or a change in the politics of oil? Here is one paper that sheds some light, from Harvard (John F.) Kennedy School (of Government):

According to the authors, oil wealth endows leaders with extra repressive capacity, and the means to buy off regime elements that might otherwise defect in the face of protest. And regimes that practice hereditary rule are ones that have forged “unusually strong ties between the ruler and the repressive apparatus.”

Another article by investigative reporter Ahmed Nafeez in “The Atlantic” states:

“…while the violence is largely framed as a conflict between Islamism and secularism, the roots of the crisis run far deeper. Egypt is in fact on the brink of a protracted state-collapse process driven by intensifying resource scarcity.”

In another article published in The Guardian, where Nafeez until recently was one of the top investigative journalists, he writes about how western interests contributed towards today’s Islamic State:

“The strategic thinking behind arming both sides was alluded to by one US Joint Special Operations University report which said: “US elite forces in Iraq turned to fostering infighting among their Iraqi adversaries on the tactical and operational level.” This included disseminating and propagating al-Qaeda jihadi activities by “US psychological warfare (PSYOP) specialists” to fuel “factional fighting” and “to set insurgents battling insurgents.”

How does this energy “oil perspective” influence our lives? And by that I mean our livelihoods, our jobs, our homes, our families, our ability to have a roof over our heads and food on the table.

Disregarding the ongoing power games for control of oil is nothing less than folly. The same power games have far reaching effects on our economies, which today subsidize the fossil fuel industry to the tune of  USD 1,9 trillion and are on course to unleashing a “carbon bubble” which could paralyse the world economy (see above).

Is everything as black as crude oil and fossil coal? No, on the contrary. There are innumerable initiatives worldwide providing sustainable solutions and showing the way towards a very resilient future for humanity. There are movements and countless local initiatives, including our own, Sacred Valley Dialogues, on the island of Mallorca, in Spain.

The first step however is to be informed, asking the right questions, and then make informed choices. Embarking on such a path involves developing personal awareness about “who I am”, and “what do I really want?” which can be simple, although not always easy. Start by informing yourself locally about what initiatives are already up-and-running. If you can’t find anything which resonates with you, start your own initiative.

And tell me about it, I would like to hear about your ideas, and what you can do to be part of the solution towards a very sustainable and resilient presence on this beautiful planet we call our home.

More facts and interesting reading:
Sacred Valley Dialogues On Energy, Economy, and Ecology
Post Carbon Institute “Building Energy Literacy”, and article by Steven Kopits:
Oil Supply and Demand Forecasting with Steven Kopits
Signals of Change by Stephen Hinton
Our Finite World, by Gail Tverberg.


About christersoderberg

Living and growing up in nine countries has left strong impressions on the background of Christer Söderberg, helping to create an awareness of the impermanence in life and the uncertain value of knowledge; illustrating the paradox between knowing and what we may do well to “unlearn”. Christer has worked with companies in six countries on four continents, most recently in Brazil where between 1998 and 2002 he started a subsidiary for a Swedish Multinational. Studies in business and a lifetime of social entrepreneurship have further cemented his belief that the only thing we can change is ourselves. This lifelong endeavor expresses itself in creating the conditions for change through places, physical and virtual spaces where the individual can feel safe in him/herself; at least enough to stop, reflect and listen to the world we live in. We exist in our relationship to each other, our environment, and ourselves. Through observation and silence, preferably in close communion with nature, a “zero perspective” can help stimulate the questions surrounding our purpose and a meaningful contribution while on earth. Increased awareness of individual potential plants seeds for long-term success; Open World initiatives help awaken the hidden potential in individuals, creating new perspectives on cooperation and personal development. Increased focus and balance help provide a strong base for individual and business growth, with a deeply ingrained sense of responsibility, respect and awe for the power in nature.
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