Friday, February 24, 2006

Something wicked this way comes

January and February didn't show much improvement in the world's energy situation. In fact, it got worse, with serious winter weather in Europe, natural gas shortages, violence in Nigeria cutting global oil production, and looming war with Iran. People are also examining Saudi Arabia's future ability to continue oil exports against rising population and concluding that their export total will drop dramatically, even faster than their decline rate. Then add to the mix the violent reaction of Muslims worldwide to offensive cartoons of Muhammed (some fabricated by Islamic extremists), coupled with the bombing of a sacred mosque in Iraq, and we have the makings of an ugly spring coming. Oil hovers between $60-$65 per barrel lately, afraid to go lower on near daily negative news but not churning higher just yet either.

Then we start adding in the wonderful news of positive feedback loops in global warming effects coupled with 80% krill dieoff rates and things look just peachy, don't they? We've also learned that the upper half mile of ocean water around the world has warmed dramatically in the last 40 years. This is more bad news on warming, as it portends significant climate change. We've even got climatologists and metoerologists warning that the hotter Atlantic may portend a new "dust bowl" in the central US as prairie land turns to desert. Note that scientists also just discovered that greenhouse gas emissions are now accelerating due to widespread melting of previously frozen tundras at rates nearly 30 times previously expected.

And water? It's in short supply in China, creating concern over availability in the United Kingdom, and already in short supply in the US great plains, which as we saw earlier are now facing long term dust bowl potential conditions. There have even been reports from some petroleum engineers that they are having to suspend further oil drilling in Oklahoma and Texas due to lack of water to pump into the fields - water which is used to achieve enough pressure to extract the measly remaining oil. (Water cuts in Texas can be as high as 99% these days in some places.)

Into this messy mix we have rising inflation, weak employment (Addison Wiggins was quoted as saying under the old unemployment system it would be 12.5%), a soft dollar, massive federal deficits, massive trade deficits, and negative savings by US consumers. President Bush has suggested that the US is "addicted" to oil, but has made no real proposals to do anything about it, and even is letting the NREL cut staff at the very time when we should be ramping up research into energy alternatives. We even have the unthinkable - declining family incomes in America - and this is even after taking into account inflation! Add inflation to the mix and the declines are worse.

Something wicked this way comes, and I don't think we'll be waiting much longer for it to arrive.