The Quiet Road

Today marks the 20th anniversary of the signing of the Maastricht Treaty. Oddly enough, there don’t appear to be any high-profile celebrations of this milestone. No fireworks, no street parties, no parades through streets lined with flag-waving children. Instead there’s an almost embarrassed silence. Certainly the Greeks are in no mood to party. Even if they were; what with sky-rocketing unemployment and an unprecedented increase in urban poverty; it’s unlikely they’d be in a position to spend much on bunting and streamers.

Here in Ireland the mood is similarly sombre. It seems like every week the news brings us a fresh story about poverty becoming more widespread, companies shedding jobs, or another public service becoming even less fit for purpose. And as bad as these stories tend to be, they are made even worse by the accompanying tales of bondholders syphoning yet more money from the pockets of those who never owed them anything. Or new government plans to inflict further suffering upon the vulnerable while trotting out insultingly transparent nonsense about why the wealthy are being coddled.

It would be entirely wrong to blame the disaster on Europe. The original goal of European integration was – as I wrote when I discussed the Maastricht Treaty over at On This Deity last year – a noble one. It was a well-conceived and entirely sensible response to half a century of conflict which had seen some of the worst atrocities in history perpetrated on European soil. After two world wars which had visited horrors upon the continent… the horrors of the trenches, the targeting of civilian populations in massive aerial bombing campaigns, and the concentration camps… after all that, Europe wanted peace. And they wanted to make sure it lasted.

Which is why, within a few short years of the end of second world war, Belgium, France, Germany, Italy, Luxembourg and the Netherlands signed a treaty that essentially marked the beginning of what was to become the European Union. It was a remarkable decision and even as the EU strains under the weight of morbidly obese financial institutions determined to bleed the continent dry while externalising their every mistake; and even as our political classes permit this obscene injustice – nay, encourage it; even now, despite all of these things, we should applaud that decision back in 1950 to set aside the enmities of the recent past and work towards a shared future.

And it’s fair to say that while mistakes were made in the decades that followed, the closer integration of the European economies was a positive development. There was a stability and a strength in the union. Resources were redistributed from wealthy areas to those suffering poverty. Human Rights were placed at the centre of the political agenda, and as internal borders began to dissolve, so did much of the distrust and suspicion that had festered in Europe for so many years. It didn’t disappear completely of course, and like so much of the gains made during those early decades, we seem determined to undo that particular achievement. Nonetheless, the original spirit of European Unity was a profoundly positive one, and we should work hard to salvage what we can of it, even as it is undermined by those who hijacked the European project for their own personal gain.

Which is the problem we face today. I’m not claiming that a united Europe was ever an explicitly socialist project, but it had at its heart a yearning for justice, for greater equality and for a kind of collective progress… a road that led away from poverty and war. That yearning is still there, but it has been sidelined by an unregulated rampant capitalism that threatens to destroy any good that emerged from half a century of work. Our political leaders – perhaps deliberately, perhaps through incompetence – have allowed a financial elite to infiltrate the corridors of European power and redirect the entire project. The European Union now works in their interests and explicitly against the interests of the majority of European citizens.

Instead of leading us away from poverty, we watch as wealth is drained from the general populace into the hands of reckless gamblers who lost their own money and then somehow convinced our representatives to give them ours. Instead of leading us away from conflict, we are forced to watch the rise of the Far Right in a number of European nations, to watch as suspicion of The Other sees a resurgence in our society, and to watch as the Irish and Greeks blame the crisis on an undemocratic French and German economic assault on their citizens, while Germans and French blame the crisis on the profligate spending of the peripheral nations. And all the while the real culprits continue to gather the spoils.

I have a quick word of advice for the German, Dutch and French populations… be very very careful how you handle this situation. Once the financial markets have bled Ireland, Greece and Portugal dry; once they have stripped our assets and plunged us even deeper into poverty; they will move on to fresh fields. There is no limit to the greed that has seen them subvert the political institutions of Europe. Out here on the periphery… we were just the softest targets; easy meat. Once they’ve picked our bones dry, they’ll move on to Spain and Italy. And then… then it’s your turn.

Which is why, in the end, there is a need for European Union now more than ever. Where once it was the horrors of the past we sought to escape; now we must unite to ward off the horrors of the future. This rampant capitalist beast cannot be tamed by Ireland. Or by Greece. Or by Portugal. Even together, the catastrophically weakened economies of the “bailed-out” nations simply can’t do anything about it. It’s not within our control. Sure, we could simply turn our backs on Europe altogether, and while I fear it may yet come to that; would it not be better to face down this destructive enemy rather than allow it to run roughshod over that original European ideal?

I’m not proposing some sort of radical pan-European anarcho-syndicalist revolution (as much as I’d like to see it happen, I’m realistic about the chances). Instead I’m simply proposing that Europe glance back 20 years to Maastricht. Even though the capitalist infiltration of our project began before that treaty, there’s a sense in which we were never more united than when we met in that Dutch town and pledged ourselves to a greater union. Hell, we even managed to drag the British tories along with us, which was no mean feat. So let’s try and recapture that sense of solidarity. Let’s realise that swallowing the lies of gangster capitalism will only impoverish us all in the longterm. And let’s unite once more to assert our togetherness in the face of an enemy that seeks to divide and conquer.

It’s difficult to summon any enthusiasm to write about Irish politics at the moment. Over the past few months I’ve pretty much worn out all the words required to do the subject justice. There’s only so many times you can use words like “incompetent”, “craven”, “absurd” or “destructive” before they start to lose their impact. On top of that, the realisation that the fools and charlatans that comprise our political class have no intention of listening to reason, and are determined to persevere with ineffective policies, like punch-drunk bluebottles convinced they’ll somehow pass through the window if they just keep flying into the glass for long enough… well, it’s just disheartening.

Sometimes I look at a politician on the TV and my heart goes out to them with the same kind of melancholy sympathy that I feel when I see a clumsy child desperately trying to impress those around them with a plucky, if badly executed, attempt at sports. And then I remember that unlike the child in the local park, these men and women are in positions of power thanks to their ruthless ambition and willingness to deceive those around them. And they are being paid huge salaries to completely destroy this country. At that point my sympathy turns to anger and contempt. In Irish politics, as with the Hollywood film industry, people seem to fail upwards.

That “willingness to deceive” was on show again this week. Our Inglorious Leader, Enda Kenny, spent a few days at the World Economic Forum in Davos. I found myself calling to mind Stewart Lee’s stand-up routine in which he viciously skewers Top Gear and its presenters. In that splendid diatribe, he compares Richard Hammond to the obnoxious little kid we all knew from school who would hang out with the bullies, egging them on and squealing with laughter at their cruel jokes. It’s the sycophantic survival strategy of a coward. This week in Davos, Enda Kenny adopted that strategy. And just like the little coward at school, as soon as Kenny thinks he’s out of earshot of the bullying cabal he want so desperately to impress, he contradicts everything he’s said in their presence and pretends to be our best friend.

For those who have forgotten, let’s step back a couple of months to the weekend prior to our last budget. Enda Kenny appeared on our TV screens like a low budget horror film and gave his State of the Nation address. There’s an oft-quoted line from that speech…

Let me say this to you all: You are not responsible for the crisis.

He looked us straight in the eye when he told us that. It was almost as if he was being sincere. And let’s be clear; it’s the truth; the people of Ireland are not responsible for the current crisis (except in the sense that they voted for the gombeens who brought it upon us, and continue to do so… for that much they must bear responsibility). But whether Kenny believes it or not is open to interpretation. Because this week in Davos, to a rather different audience, he contradicted this position when he announced that the Irish people “went mad borrowing”. It was, he insisted, a collaboration “between people and banks” which created…

a system that spawned greed to a point where it just went out of control completely with a spectacular crash.

Once again, let’s be clear; throughout that dark period when this country was being ravaged by The Tiger, Enda Kenny and his Fine Gael cohort were the biggest cheerleaders of that greed. They weren’t on the opposition benches urging caution. They weren’t denouncing financial deregulation or tax cuts for the wealthy. Far from it! They were on their feet baying for more of the same. The tax cuts and the deregulation didn’t go far enough for Kenny and his ideologically blinded party. He wasn’t calling for The Tiger to be tamed, he was demanding we throw more meat into it’s gaping maw.

Certainly there was a culture of greed spawned in Ireland during those years, but it was spawned at the top and rampaged downwards doing more damage the further it got from those who unleashed it. And the evidence of this is that most of those at the top are not being badly affected by the crisis that is plunging the bottom tier into poverty. And the evidence that this injustice is still being supported by Kenny and his ilk can be seen in the budgetary policy that cuts disability benefit, the winter fuel allowance, child benefit and back-to-school allowances; money that helps keep poorer heads just above water; while drawing a high ring-fence around the wealth of those at the top. All the while his party fills the media with stories that blame the public service and try to make villains of the unemployed rather than those who landed them there.

When Kenny speaks to a gathering of international financiers and political leaders, he immediately falls back on blaming the Irish people for his woes. As though they are his woes in the first place. As though he’s feeling any of the financial pain he and the rest of the political class are inflicting upon the people – not just in Ireland, but elsewhere around the world. It’s the riff-raff that are the problem, he insists. If only they’d have the good grace to go away and keep quiet, then decent people like you and me – here he raises his champagne flute in acknowledgement of his well-fed dinner companions – could get on with the serious work of consuming our lobster salad.

And it goes without saying that once he’d blamed the financial crisis on the reckless greed of the Irish people, he immediately backtracked when confronted by the Irish media. “Our people have been the victims of this situation”, he told an interviewer. So are we the victims? Or are we the mad borrowers, Enda? Are we responsible for the crisis or not? It seems he needs to know what the questioner wants to hear before he can answer those questions.

Let’s get one thing straight. Many Irish people did borrow too much during the boom. In fact, as The Guardian pointed out earlier this week, 15 individuals alone owe Anglo-Irish Bank over half a billion euro each. I guess they’re Irish people all right. But it’s hardly fair to describe them as The Irish People. Certainly I don’t recall borrowing €500 million, and none of my friends or family did. And I doubt any of my neighbours did either, though I suppose they could be keeping it to themselves.

The reality is; it was a small number of politicians, bankers and property developers who created the Irish crisis. And they were eagerly encouraged by European banks and other international financial institutions who bought into the bizarre fiction that the Celtic Tiger could somehow live forever. It was they who destroyed this country and not the unemployed, the disabled or the poor families living in negative equity who are now being hammered by a government determined to make anyone at all pay, other than those who morally should do.

It’s a travesty; an absolute nightmare of a problem. And Enda Kenny’s two-faced attitude tells you all you need to know about the people who are supposed to be fixing it.

So today’s the day. Today the Irish government hands €1.25bn of public money to the unsecured, unguaranteed bondholders of a defunct financial institution. The stated reasons for this transfer of wealth make absolutely no sense. The real reasons are purely ideological. What’s happening today is the logical conclusion of allowing capitalism to remain unregulated.

Don’t get me wrong, I’m well aware that this grand larceny flies even in the face of free market philosophy. But capitalism is not synonymous with free market philosophy. Of course, I’m no fan of unrestricted free markets either, but at least under that system – if it was being correctly applied – it would be those who invested in Anglo-Irish Bank who would lose money; not the citizens of Ireland who could have expected no share of the profits had the investments panned out. What’s happened is that capitalism has co-opted the language and appearance of the free market to permit ever greater accumulations of wealth in ever fewer unscrupulous hands. Our system is more akin to the robber barons and gangster capitalists of the late 19th century than it is to some ideal of free market economics where wealth flows efficiently to those who “generate” it. The Anglo-Irish Bank bondholders did not generate the wealth they are receiving today. And as David McWilliams points out; by allowing this insanity to continue – worse, by encouraging it – the Irish government is losing credibility in the markets, not gaining it.

The finance capitalists who are now running our nation from afar have managed to hoodwink and pressure those elected to represent our interests into acting as though our interests were in fact synonymous with those doing the hoodwinking. And they’re not. In reality, they are diagrammatically opposed. And as we hand over our money, I feel certain that the investors can’t quite believe their luck. “Is it possible”, they wonder, “that the Irish people are really as thick as the old jokes implied?” Certainly that sad excuse for a leader we’ve got, Enda Kenny, seems to think so. Today, as he signed the metaphorical cheque, he insisted that Ireland must honour its debts. “We have paid our way and will pay our way”, he told the Dáil.

Here’s the thing, Enda, I don’t know anyone who doesn’t agree that Ireland should honour its debts. The problem we have – and it’s one that you don’t seem to have the wit about you to appreciate – is with honouring the debts of others. Today’s transfer of public wealth into private hands is not paying our way. It’s paying someone else’s way. Someone who not only doesn’t have Ireland’s interests at heart, but whose actions are impoverishing the citizens of this nation; whose greed is laying waste to our society. And although you may equate those reckless fools with “Ireland”, the rest of us really don’t. Your place in history, Enda, will be an ignominious one. Our last government sold us out, and you eagerly embraced their madness.

And that’s not all

There’s yet one further twist in this sorry tale. A twist that would appear to make our government look even more irresponsible. A twist that gives the impression Enda Kenny and his absurd collection of incompetents are actively maximising the amount being paid by the Irish people, even as they claim to be minimising it. Less than three months ago, we handed over €715m to Anglo-Irish Bank investors (you have to understand, the €1.25bn in private debt that we’re paying today is just the latest in a long line of payments that will continue for the next seven years at least and will leave this country crippled with sovereign debt). As we made that payment, Shane Ross (independent TD) made the point that the current bondholders were not the original investors in Anglo-Irish Bank. That in fact the current bondholders bought those bonds on the secondary market during a period in 2011 when the market in Anglo-Irish Bank bonds fell by 40%. They ended up paying a little less than 60% of the face value, and today will reap the rewards when Enda Kenny honours the full amount. As Ross said, quite correctly, the current bondholders “decided the Government was going to sting the taxpayer, rather than sting them, and so they bought”.

Which raises the obvious question… if Kenny, as he claims, was always determined to cover the full amount of these bonds, why in the name of everything that’s sacred did he not instruct the treasury to buy the bonds when the price dropped by 40%? I mean, I don’t think the Irish people should be paying even 1% of the private debt run up by greedy fools, but if our Inglorious Leader is determined to pay those debts, why insist on paying 100% when there was an opportunity to pay 60%. Is it me, or is that just wilful idiocy?

As the year moves on, another anniversary comes around. This time we pause to remember the death of Pierre-Joseph Proudhon. Last year at this time I published a piece about Proudhon over at Dorian Cope’s wonderful site, On This Deity, and reading it back today I’m reminded of the sense of regret I felt as I wrote it.

Because like so many of the great thinkers of yesteryear, the ideas of Pierre-Joseph Proudhon seem more relevant now than perhaps they ever were. I hesitate to suggest that his ideas are “timeless”, for doing so would hint at a fatalism to which I do not wish to give voice. Instead I’d prefer to imagine a future where Proudhon’s revolutionary philosophy is no longer required; a future in which the tyranny he sought to overthrow can no longer flourish.

The ideas of Pierre-Joseph Proudhon could only have been born in a time of oppression. And it is for that reason they feel so relevant today. It was Proudhon, the French revolutionary philosopher, who coined the word “anarchism” in the modern sense. And it was he who first self-applied that label insisting that political tyranny and economic tyranny went hand-in-hand… that one could not be overthrown without also confronting the other.

Proudhon’s most memorable quote, “Property is theft”, cuts right to the heart of his philosophy. His greatest ideas were of a radical reconfiguration of the banking system as part of a peaceful overthrow of capitalism; ideas which surely came of age a long time ago. Yet still we struggle under the terrible weight of an inherently unjust system, seemingly willing to remain beholden to banks and other financial institutions whose interests do not coincide with our own. In a supposedly democratic society we allow unaccountable corporations trample us down, all the while assuming that it has to be this way. We seem unaware that we can cast off the yoke and try something new, if only we make that choice. Or if not something new, then perhaps something a century and a half old…

Manning the barricades and being involved in the fighting, Proudhon soon developed deep misgivings about the use of force to achieve political ends. “Whoever lays his hand on me to govern me,” he would write in 1849, “is a usurper and tyrant, and I declare him my enemy.” And he applied that maxim to revolutionary organisations just as he did to the forces of the establishment. He sincerely believed that economic revolution without bloodshed was possible through the self-organisation of workers into local co-operatives along with the establishment of a revolutionary not-for-profit banking system which would provide interest-free credit and levy only such charges as were required to cover administration costs. He believed that capitalism would wither and die without the need for violence should such a banking system, in tandem with a widespread co-operative movement, become established.

The death of Pierre-Joseph Proudhon, 19th January 1865 | On This Deity

As we fall further towards indentured servitude and watch – with mild frustration but little active resistance – our rights being increasingly sidelined, should we not consider the ideas of Proudhon? Or at the very least, consider some alternative to the madness being perpetrated in the modern corridors of political and economic power?

You know that “We Are The 99%” slogan adopted by the Occupy Movement? Well, at the risk of alienating many of my regular readers, I have to say it annoys the hell out of me. Don’t get me wrong, I understand the point it’s trying to make. And I see how it cleverly allows Occupy to assert a non-partisan stance. “We’re not left or right”, it says. “We’re not about the working class or the middle class. We’re about The People. We’re about You and Me.” It’s a good strategy. Good branding, if you will.

The problem I have though is… well, it’s kind of a lie. Not in the pedantic sense that “it should be 97.6% instead of 99%”. No, it’s a lie in the sense that the distinction it makes is not necessarily the important one. Because the Occupy Movement is – in part – actually a reaction by disenfranchised western consumers to a reduction in their ability to consume at levels to which they became accustomed.

No, that’s not all it is, but that’s why the first people took to the streets of New York. It’s why there are people camping outside the Central Bank on Dame Street here in Dublin. And it’s what those people are doing on the steps of St. Paul’s Cathedral in London. They are protesting because they feel that their standard of living is under threat.

Which it is. Everything I’ve written here lately about private financial institutions raiding the public purse is true, so far as I can tell. The populations of the “industrialised west” are under attack by the market forces of private capital. And we have every right to fight back. I’m not objecting to the Occupy Movement, I’m objecting to the slogan.

Because the lay-offs and the foreclosures, the regressive taxes and vicious cuts to public services, the mantra of austerity… these are all attacks on a lifestyle that doesn’t represent 99% of the world. Not even close. They are attacks on a level of consumption that was always unsustainable. That these attacks are being carried out; not so western society can move towards sustainability; but so that a tiny minority can continue to hoard ever-increasing mountains of wealth is – it goes without saying – obscene. But the people Occupying Wall Street were not there when the property boom of the nineties and early-to-mid-noughties provided the illusion of increasing wealth for the masses in the “developed” world.

See, for decades, we in the west have been consuming vastly more that our fair share of global resources. And we’ve been doing so at the expense of billions of people who had no voice. Or if they did, we rarely if ever listened. Sure, we might have given some spare cash when Bob Geldof came on the TV to shame us in the 80s. But the very fact that the term “ethical consumerism” exists speaks volumes about the level of delusion suffered by the world we built. And it is an attack on that world that sparked the Occupy response.

Our collective conscience was bought and paid for with bread and circuses. The bread came in a dozen different combinations… from Happy Meals to Artisan Loafs (made with the finest imported olives and sun-dried tomatoes, no less). And the circuses appeared on 236 different channels beamed via satellite to our 43″ plasma screens. We bombed distant nations so we could fill our cars with cheap petrol allowing us to drive to shops where we bought Smart Phones made with rare metals that only cost a pittance thanks to the millions dying in Central Africa in our Resource-War-by-proxy.

And I do mean “we”. This article is being written on a computer with components which I’ve no doubt are of ethically dubious provenance and being read on a device much the same. It is possible to completely drop out of your own society, but almost nobody does because it’s only just about possible. It’s certainly far from easy.

Which is why I have such a problem with “We are the 99%”. The accuracy of the number isn’t at issue. It’s the fact that the people camping on Dublin’s Dame Street ultimately have more in common with the 1% they decry, than with the downtrodden masses whose nations we have spent decades pillaging for resources. And call me a cynic if you like, but if we were to discover untold riches in Mozambique tomorrow… near endless lakes of sweet crude oil lapping against shores of the finest coltan and platinum… and if we were to buy back the illusions of the nineties and the noughties; sending our armies to Africa to secure those resources and put money back in our bank accounts, cheap petrol in our new cars and a sense of security in our continued consumption… I just don’t think the Occupy Movement would last very long.

Sure there’d still be anti-war protests. And we’d all pile into coaches to drive to the big city where we’d raise our “No Blood for Oil” placards; the irony noted but never likely to force a change in behaviour. And then, having protested against the politicians who took us to war, we’d re-elect them in the name of stability when they promised us tax cuts and the continuation of a comfortable life.

Our civilisation is an unsustainable disaster. It is destroying the world in slow but inexorable steps. And it needs to be radically reconfigured into something that places justice and sustainability at its core. The fact that anti-capitalist protests began long before these days of austerity is cause for some small hope, and if the Occupy Movement can help with that reconfiguration – or even just prompt discussion and thought on the subject – then it is to be supported in any way we can. I’m not defending the austerity policies that are ransacking Europe and beyond (anyone who has read this blog for the past few years will know that). And I’m certainly not trying to justify the further concentration of wealth at the very top. I’m just pointing out that for many years the people currently Occupying Dublin, London and New York were closer to the top than perhaps they realised and weren’t particularly interested in relinquishing that position. As their anger now demonstrates. Fighting for a fairer distribution of wealth is a noble cause. But claiming to be “The 99%” just seems in bad taste to me.

It’s a lot like when the Congestion Charge was being introduced in London… forcing people to pay in order to use their private cars in the city… and left-wing critics insisted that it would hit the poorest people the hardest. They were somehow forgetting that the poorest 20% of people didn’t own cars, they were too poor to afford them, and that the money raised from the Congestion Charge – if invested in public transport – would actually help the poorest people.

So if “We Are The 99%” is supposed to highlight a disparity between the Haves and Have-Nots, then we should take a look at those who truly Have-Not. Because it’s not really us. It’s not the people camping in Dame Street. And it’s not the people watching them on the news or reading about them on the internet. We are rightly angered by the sight of a small minority syphoning wealth from our pockets. But we should pause for a moment in our anger and realise that we’re far from the bottom of the global ladder. That the masses below us can also be rightly angered by the sight of their wealth in our pockets. Like it or not, in the eyes of billions of dispossessed around the world, it is we who are the one percent.

In my previous post (Against High Speed Rail) I questioned the wisdom of investing in a High Speed Rail (HSR) system in a world facing an impending energy crisis. Ultimately, if we wish to maintain a society in which travel is relatively easy and affordable, then we need to be investing in the most energy-efficient transport infrastructure available. And while HSR is more efficient than private cars or air travel, it is less efficient than conventional rail or coach travel (and significantly less efficient in the case of coaches).

In the comments to my post, both John B and Ryan disagreed with my position. Knowing them from their web writing over the years, they are both intelligent and fair-minded people. I believe they accept the logic of my argument (broadly speaking) but disagree with the initial premise; that we face a serious energy crisis; which of course rather undercuts the whole thing. Indeed, Ryan says quite clearly:

I really don’t see too many signs of this energy crisis arriving any time soon. With the massive quantities of tar sands, shale gas, arctic oil etc which suddenly look economically viable [...]

Ryan’s comment

It’s this specific statement I wish to address right now. You can read my response to the rest of Ryan’s comment beneath the previous post (here). Also, I should be clear that while Ryan posted the comment to my blog, he is essentially putting forward a widely held view. So my response is not necessarily directed at him personally but is intended to counter that mainstream position… that the decline in conventional crude oil can be offset by a rise in non-conventional oil production (or other energy sources). It’s a position that cuts right to the heart of peak oil theory and one where the technical issues are not widely understood.

Let me start by suggesting that if someone doesn’t “see too many signs of this energy crisis arriving any time soon”, it may be because they’re not actually looking for the signs. I have been looking for them and I can confidently say that they are there. Quick survey: raise your hand if you have read any feasibility study carried out into the exploitation of tar sands and their ability to mitigate a decline in conventional crude oil? I’m fairly confident that you don’t have your hand raised, dear reader, though perhaps I’m doing you an injustice?

The reason I ask is because that’s the sort of place where “signs of this energy crisis” can be found. They tend not to show up in the mainstream media (on the rare occasions they do, they’re well-disguised) and even when they appear in market signals they are dismissed with inaccurate explanations because they fail to fit an existing narrative. But I want to avoid media and market analysis in this post as much as possible, and concentrate on the technical details, so I’ll just say that if you’re not reading the technical literature on the subject (like almost everyone on the planet) then it’s no surprise you don’t see the signs.

Conventional Vs. Non-conventional oil

Before I get into the details of tar sands (which I will take as my basic case study, but a very similar post could be made about shale gas, while Arctic oil has problems of its own), let me say a few words about the difference between conventional oil and non-conventional. Because it’s pretty important to get your head around it if you want to understand why it is that although the “massive quantities of tar sands” may exist, they are not quite what they seem.

Over the past hundred years or so humanity has consumed a lot of oil. At a rough estimate, about 1.5 trillion barrels of the stuff. That’s a huge quantity make no mistake. And of that, the vast majority has been what we call “conventional” oil. Unfortunately that’s a bit of a slippery term as it’s used both as a classification of oil, and also to describe the source of the oil. So, in the first instance conventional oil is a combination of crude oil and condensates which can be fed directly into conventional oil refineries to produce petrol, diesel, jet fuel, etc. Generally this stuff is sourced from shallow water (less than 180m) and land-based wells.

Unconventional oil is stuff that cannot be fed directly into conventional refineries and requires pre-processing of some kind. So we’re talking about tar sands, shales, gas-to-liquid products and coal-to-liquid products.

Complicating matters a bit, however, is the fact that the term “unconventional” is sometimes applied to oils that are sourced in deep water wells and Arctic regions despite the fact they can often be fed directly into conventional refineries. The thinking behind this classification is that both deep water and Arctic wells involve levels of expense (both financially and in energy expenditure) that place them closer to unconventional sources from both an economic and energy-return perspective than they are to – for example – crude oil from a Saudi land-based well.

Complicating matters even further is the fact that deep water oil is sometimes chemically different to shallow water oil due to the additional pressures involved. Therefore, to simplify matters it is normal to classify deep water and Arctic oil as unconventional along with tar sands, etc. Whether you agree or disagree with that classification isn’t really important so long as we clearly define our terms up front so everyone’s speaking the same language.

And it’s important because when we talk about peak oil, we are talking about an initial peak in conventional oil production followed by a subsequent peak in overall production. This detail almost never makes it into the occasional peak oil stories that appear in the mainstream media because… well, because the mainstream media has a pathological aversion to covering anything of importance in enough depth to actually explain the issue properly. The assumption is that the public is basically a bit thick and possesses the attention span of a gnat. And given the reading habits of the public and the way they vote… that may not be an entirely unjust assumption. But I digress.

If you read the more scholarly of the peak oil theorists (such as Dr. Colin Campbell of ASPO) you’ll find they tend to suggest that we can expect a peak in overall oil production between 10 and 15 years after a peak in conventional oil production. And given we now believe the peak of conventional oil was in 2006 or thereabouts (the International Energy Agency suggests it was 2009, but their optimism is renowned) we should prepare ourselves for the peak in conventional plus unconventional*. The reason for the lag of course, is because unconventional sources – such as tar sands, gas-to-liquids and biofuels are indeed coming on stream to meet a rise in demand that can no longer be met by conventional oil.

“But why”, you may ask, “can unconventional sources not continue to rise in line with a decline in conventional production? And why does conventional production need to decline right now anyway?”. After all, don’t peak oilers admit that we still have as much conventional oil underground as we’ve used in the past 100 years? Well, that’s true. A peak in conventional oil production means we probably still have about 1.5 trillion barrels of the stuff accessible to us. And when you add that to the new unconventional sources just coming on-stream now (those “massive quantities of tar sands” for example) it seems absurd to suggest that we’ve reached one peak and are nearing the next. And yes, it does seem absurd. That is, unless you know something about petroleum geology and the engineering challenges surrounding the pre-processing of unconventional oil sources. Most people don’t. Through a quirk of fate, I know a little.

Massive quantities of tar sands

Let’s take tar sands as an example. Ryan uses the phrase “massive quantities of tar sands [...] which suddenly look economically viable”. Now, it’s worth pointing out that strictly speaking I dispute the notion that they are economically viable, though they can be made look that way (in the same way as sub-prime mortgages looked economically viable for a while) but I’m going to ignore that in this post. For the sake of discussion, let’s concede that they are indeed “economically viable” (i.e. some people might make a profit out of their exploitation, which – when all is said and done – is what that phrase means). It’s neither here nor there really, because they suffer from two huge flaws which makes them completely inadequate for filling the gap left by diminishing conventional oil production.

You see, despite having only extracted half the conventional oil from the ground, we cannot produce the remaining half at a rate of our choosing. As much as some economists might like to dispute this fact, oil production capacity is not exclusively determined by market demand. A drop in demand will certainly see a drop in production. But a rise in demand is not necessarily followed by a rise in production. Historically speaking that has been the case; and economics – of course – is essentially the mapping of past behaviour onto the future, so it’s no surprise economists believe rising demand will lead to rising production (for years the IEA merely relabelled demand forecasts as production forecasts!) However, when circumstances change within the physical systems upon which the economic system is based, then the historical model no longer applies and economics as a discipline gets blind-sided. This also explains why the markets are so bad at relaying the signs of the looming crisis… on the rare occasions those signs manifest, they get relabelled as something else.

But the physical systems have changed, and this has not been incorporated into the models used by economists, and by extension, those used by policy-makers. The geology of oil fields combined with the physics of fluid dynamics place certain limitations upon how fast we can pump the stuff. And crucially, once we have extracted roughly half the oil from a given field, the rate at which the rest can be extracted begins to steadily drop. This is simply down to internal field pressure. And while this pressure can be increased to an extent by pumping gas into the field, it should be noted that, with very few exceptions, Enhanced Oil Recovery (EOR) techniques** are already being used in every major oil field where they might be helpful, and have been for the past couple of decades at least.

Interestingly (and perhaps worryingly) while EOR can sometimes increase the amount of oil recoverable from a field, it also succeeds in recovering the stuff faster. So once half the oil has been extracted from a field without EOR, it might see a 2% per annum decline due to a drop in pressure. But for fields that make intensive use of EOR (i.e. almost all of them) that decline could be as much as 6% per annum post-peak (it varies from field to field). This is not a trivial point when it comes to the question of how far unconventional sources can make up for a drop in conventional.

So that’s one half of the picture… sometime between 2006 and 2009 (depending on whose figures you accept) we reached a peak in conventional oil production. That global peak may one day be represented as a 3 year plateau, or a 5 year plateau, or something like that… by definition the height and length of the peak can only be accurately described in retrospect. What we do know, however, is that during this peak in conventional oil production, unconventional sources are having great difficulty meeting additional demand. As a result, oil prices are rising once again.

Of course, oil price is determined by myriad factors of which production levels is but one. However, it is my contention that the situation in Iran – as one example of what’s being blamed for the price volatility – is, in part at least, an example of the “relabelling” I mentioned. In November 2011 OPEC increased output marginally – mostly down to Libya’s production coming back up to speed – but still managed to squeeze out less than a million additional barrels per day despite a huge effort and despite rising demand – the world is currently consuming about 90 million barrels per day (mb/d). And we know that this increase failed to meet demand because global industry stock (strategic reserves of already-produced oil) declined steeply in October and November.

So why are unconventional oil sources not ramping up to meet increased demand?

The two fatal flaws in tar sands

Let’s assume we don’t give a damn about the environmental consequences of our resource consumption. We do, of course, because the species that destroys its environment destroys itself. But for a moment let’s forget the fact that tar sands have been (accurately) described as the most environmentally damaging source of oil known to man. This photograph is of one of the numerous “tailing ponds” springing up in the Alberta region of Canada as they exploit their massive reserves. These lakes of effluent are growing rapidly and nobody seems very sure what to do with them (best not to do an Image Search for “tar sands” if images of ecological madness freak you out).

But for now, although we don’t care about that, it might be worth bearing environmental consequences in the back of our minds as we compare the processes of producing a barrel of oil from Canadian tar sands to the process of producing a barrel of Saudi crude oil.

In the case of the Saudi oil, we drill a hole into the ground above the oil field. The internal field pressure then pushes the oil up to the surface where we catch it and send it to refineries. After a while the pressure drops a little and we expend energy to pump gas into the field and keep the oil flowing. Ultimately we get far more energy from the oil gushing out of the ground than we consume during the drilling and refining processes. If it weren’t for the crap produced when we burn the stuff, it’d be free energy near as dammit.

With tar sands, the first part of the extraction process generally consists of chopping down a forest. After that’s been done, we begin the extraction not by drilling, but by mining. It takes approximately two tons of tar sand to produce every one barrel of oil. And in order to access the two tons of tar sand, we must first excavate roughly two tons of soil and peat. We then need to heat three to six barrels of water (this heat tends to be generated by burning natural gas) which is passed through the tar sand to remove the bitumen. That polluted water is what makes up the growing tailing ponds. Three to six times the volume of the oil produced.

So I’m sure you can see the fatal flaws, right?

Firstly, the mining and pre-processing of the tar sands cannot be done at anything like the rate that conventional oil gushes from the ground. According to one peer-reviewed feasibility study (A Crash Program Scenario for the Canadian Oil Sands Industry) from Uppsala University,

Unfortunately, while the theoretical future oil supply from the oil sands is huge, the potential ability for the Canadian oil sands industry to meet expectations of bridging a future oil supply gap is not based on reality. Even if a Canadian crash program were immediately implemented it may only barely offset the combined declining conventional crude oil production in Canada and the North Sea. The more long-term oil sands production scenario outlined in this report, does not even manage to compensate for the decline by 2030. [...]

A Crash Program Scenario for the Canadian Oil Sands Industry | Page 41

The study goes on to point out that the IEA (who are nothing if not optimistic about future projections) forecast that the drop in global conventional oil production means unconventional sources will need to make up a shortfall of 37 mb/d by 2030, and that

Canada has by far the largest unconventional oil reserves. By 2030, in a very optimistic scenario, Canada may produce 5 mb/d. Venezuela may perhaps achieve a production of 6 mb/d. Who will be the producers of the remaining 26 mb/d? It is obvious that the forecast presented by the IEA has no basis in reality.

A Crash Program Scenario for the Canadian Oil Sands Industry | Page 41

As if that weren’t enough, it’s worth mentioning that the ERoEI (Energy Returned on Energy Invested) for tar sands currently tends to be between 1.5 and 4 (industry forecasts suggest it might rise as high as 7 when the process is running at maximum efficiency). That’s as compared with between 30 and 100 for conventional crude. So even taking a best-case tar sand versus a worst case crude, the net energy content of a barrel right now is between 7 and 8 times less. And even if industry forecasts are correct, that number won’t dip much below five.

And then there’s the second fatal flaw with tar sands. Exactly where is all the fresh water and natural gas required to process the stuff going to come from? These are not superabundant resources. Not any more at least. And a significant acceleration of tar sands production will have a very serious impact on Canadian water tables and gas supply. When Uppsala University describe Canadian tar sand production as reaching 5 mb/d as being “very optimistic”, they are being very generous. Alberta’s natural gas production has already peaked. So in order to ramp up production of tar sands – even by a little bit more than the current 1.5 mb/d – Canada will have to export less gas to the United States. And this presents serious economic and legal problems given the terms of NAFTA and the long-term contracts into which Canada has entered.

And natural gas supply may not even be the major constraint. Currently (at 1.5 mb/d) the Canadian tar sands industry is draining in the region of 50 billion gallons of water from the Athabasca River every year. That accounts for about 10% of the total water consumed by the North American oil industry. From a water perspective it is staggeringly inefficient, and is roughly 30% of the water that environmental surveys suggest is available for use and for which they are licensed to use. So there are very good reasons to suggest that Canada’s tar sands production can never rise above 4.5 mb/d and is likely to remain significantly below that level.

So don’t believe the mainstream media hype about the “massive quantities of tar sands” and their role in making up for losses elsewhere. It doesn’t matter if there are 1.7 trillion barrels of the stuff in central Canada. The fact is that due to well-understood if under-publicised physical constraints, it seems extremely unlikely those sands will ever be capable of providing more than about 4% of current demand (and a far smaller proportion of forecast demand). And given how much hope is being invested in those sands to mitigate our looming oil shortage, I would suggest, that’s a pretty clear sign “of this energy crisis arriving soon”.

Over in the UK the government has just thrown their weight behind a High Speed Rail (HSR) project to connect London and Birmingham. The project is backed not only by the Tory government (including their sycophantic whipping-boys the Liberal Democrats) but also by the opposition Labour Party. Indeed, with the exception of a few rebellious members of the main parties (mostly from constituencies through which the new rail line will run, but who don’t get any obvious benefits because trains won’t actually stop there) along with parties on the fringe, this HSR project has universal political support.

This contrasts with the striking lack of support from people living in those aforementioned constituencies which will be negatively impacted (some in reality, some perhaps just in perception) by the scheme. Homes will be torn down, the countryside will be cut through (despite parts of the route going underground, there will still be plenty of trees felled and habitats destroyed – 160 important wildlife sites according to unnamed “wildlife groups” in the BBC report) and idyllic rural villages will find their peace and quiet periodically shattered by the thunderous whoosh of a high speed train passing through.

The government, as has become de rigeur with these kinds of project, held a “public consultation” on the matter. These public consultations are one of the most annoying developments in modern political theatre. Basically the government of the day makes a decision, asks the people affected by the decision to agree with it – in the hope of sharing the responsibility if something goes wrong – and then completely ignores the results of the consultation if it turns out that people don’t agree with the decision. It’s the sort of craven and cowardly strategy that shouldn’t surprise anyone, given how craven and cowardly our political classes have become, but still manages to frustrate and annoy because of the magnanimous manner in which these consultations are generally announced. “Why yes, we will let you little people have your say on this matter… just don’t expect us to actually listen.”

In the case of the London to Birmingham HSR project (known as ‘HS2′; ‘HS1′ being the Channel Tunnel link) almost 90% of the 55,000 responses to the public consultation objected to it. Whether you agree with the project or not, this surely demonstrates that the actual consultation was a waste of time and money carried out in the vain hope it would provide positive PR. It makes no sense whatsoever for there to be a legal requirement to hold a public consultation unless there is also a legal requirement to actually listen to the results.

Of course, just because a majority of people along the route of a rail line object to it, does not itself make the project A Bad Thing. The concerns of those directly affected by any infrastructure project must be factored into the decision making process. But they should not – necessarily – over-ride all other factors. Major projects like HS2 have an impact far beyond the route itself. They provide economic benefits that radiate out from the project for quite a distance. And they may offer environmental benefits should the trains reduce the use of more damaging transportation. So it may often be the case – as with wind farms, for instance – that the objections of local residents must unfortunately be over-ruled in the knowledge that the wider benefits to society outweigh those objections. The impact on local residents should be minimised as far as is practical, and compensation should be offered where necessary.

The Question

So the question becomes: Does HS2 provide sufficient benefits to outweigh the negative impact on those directly affected and upon the countryside through which the line will run? Over on twitter, John Band made his position pretty clear when he wrote: “I think HS2 has now officially joined bendy buses on my List Of Transport Things Where It’s Fair To Assume An Opponent Is A Dick.” Now, I like John. Even if he is calling me a dick.

Because, frankly, I think the HS2 project is a ridiculous and damaging waste of resources.

Don’t get me wrong, investing UK£33 billion (almost €40 billion) in rail infrastructure is a bloody marvellous idea [UPDATE: As John points out in the comments, the 33bn covers the entire HSR network rather than just the London-Birmingham line, though this doesn't affect my basic position]. It’s exactly the kind of thing that governments should be doing right now (and it’s a crying shame that our government here in Ireland is pouring money into zombie banks; money that could be upgrading our public transport network… or building hospitals… or employing teachers… hell, spend the billions on beer and pies if you must, it would still be a better use of the cash than pouring it into Anglo-Irish Bank). But investing money in the rail network is not necessarily synonymous with spending a massive lump-sum on a vanity project.

And that’s what it is. A vanity project. Railways are a great idea. High Speed Rail is a terrible one. A recent US study (High Speed Rail and Greenhouse Gas Emissions in the U.S.*) of the carbon emissions of various modes of transport suggests that travelling on HSR produces 20% more emissions than going by conventional rail, and almost double that of coaches. And that’s without factoring in the environmental costs of the actual infrastructure (which are high thanks to the large amounts of concrete and steel used).

And it’s not as if it’s providing a massive time saving either. HS2 won’t be teleportation. It’ll be more expensive than conventional rail and will reduce journey times by a shade over 40%. So the average saving between London and Birmingham will be roughly half an hour. Are the Tories really spending a fortune to cut up the countryside, screw up the lives of local residents and increase the cost of train travel, all to save a half hour? With WiFi available on UK intercity trains these days, it’s not like it even needs to be a half-hour “away from the office” for a lot of people.

Yes, from an emissions standpoint HSR beats cars and planes – by a considerable margin it should be said – but it’s really not in competition with them. Most people who make the journey by car are unlikely to switch to train without a major incentive. That incentive is on the way, of course, in the form of peak oil. But because HSR carries far less passengers than conventional rail, it makes much more sense to absorb any large switch from car to train using conventional rail [UPDATE: In the comments John points out that this is not the case... which invalidates one of my objections to HSR, though I still think that conventional rail - albeit on an upgraded system with a few billion invested in it - is far better than HSR in the face of Climate Change and resource depletion. So I still say that British rail investment should be going into upgrading the current rail network... increase platform lengths, buy some extra carriages and develop a new signalling system].

In fact, it makes even more sense to absorb the migration from private car into a new, integrated coach network. You want to travel from London to Birmingham? Simple. Build a large new coach station in Brent Cross, North London (i.e. within sight of the M1 on-ramp). Link it directly to the tube either via the Northern Line or the Jubilee Line (it would require a new branch of no more than a few hundred metres in either case). Then dedicate an entire lane of the M1 to express-coach traffic only. This will reduce journey times for coaches while providing an additional incentive for drivers to ditch their cars.

Yes, yes, Jeremy Clarkson and the rest of the motoring lobby will hate the idea… but frankly they will become increasingly irrelevant as oil price rises start to make private car use a luxury – long before HS2 is due to start running in 2026. Motorways will be half-empty by that stage anyway. No, an integrated coach network may not as sexy as HSR, but it makes a damn sight more sense environmentally, is a fraction of the cost to set up, makes use of existing infrastructure that will soon be significantly under-employed and will cost far less for the end user.

So… by objecting to HS2 I’m objecting to a massive infrastructure project that will damage the environment, will cost a lot more than it needs to, will be a dreadfully inefficient use of resources, will inconvenience more people than is necessary and will be more expensive to the end-user than the alternatives. If that makes me “a dick”, then so be it. Better that than flush money down the toilet and screw up the planet because I like shiny things that go fast. Which I do, but I’m not so idiotic as to want to base public policy on that fact.

And so 2011 slips behind us and into the pages of history. While ahead looms 2012. And it looms ominously I’m sorry to say. Not because of Mayan prophecies or the mutating neutrinos of Roland Emmerich, but because the problems of 2011 – despite seemingly endless summits and photo-ops attended by our political class – have not been solved. In fact, the problems of 2011 were often little more than the ones we failed to address in 2010. As for the problems of 2010? By and large they were unfinished business from 2009. And the problems of 2009? Well, I’m sure you can see the emerging pattern.

In South Africa the governments of the world met for a few days and cobbled together a strategy for dealing with Climate Change. In Belgium (and elsewhere) the governments of Europe met for longer periods of time and cobbled together a strategy for dealing with the debt crisis. What unites both strategies is the bizarrely transparent manner in which they fail to achieve their stated aims. I’d always heard that if a job was worth doing, it was worth doing well, but apparently that’s not a philosophy shared by those in power. Had the Durban conference concluded with a joint statement from participants to the effect that they would insist upon compulsory piano lessons for all giraffes, it would have had roughly the same chance of halting Climate Change.

As Kurt Vonnegut pointed out, “We could have saved it but we were too damned cheap.”

Never forget that the reason the big issues facing the world are not being addressed is because the people in charge don’t believe we’re willing to put in the necessary money and effort. And never forget that we put them in charge precisely because that’s what they believe. They promise us easy solutions to problems we know are difficult, and in return we elect them.

Even our more manageable problems, such as the European debt crisis, are left to fester until they threaten to visit catastrophic social collapse upon entire nations. And why is this? Well part of it, and this is really quite depressing, is because our political leaders are completely incapable of admitting that they might be wrong about anything. I really do think it’s a psychological disorder. I’m not sure if it’s something they succumb to as a result of a proximity to power, or whether something about politics attracts those who already suffer from the condition. Either way, it is one of the greatest obstacles to progress.

The austerity policies in place around Europe are just plain wrong. We have created a society that imposes poverty and suffering on the general population unless it is experiencing economic growth. And at the same time we are implementing policies that are guaranteed to prevent growth. Personally I think we need to restructure society so that it no longer relies on growth, but until we do that, economic policies that prevent growth are nothing less than deliberate, calculated attacks on the citizenry by those in power.

The trouble is; even as this becomes clear, even as the failure of austerity slowly sinks in, those in power are pathologically incapable of admitting it. The very fact they supported a policy must mean the policy is the right one. The alternative is unthinkable… that they publicly accept they are fallible. These people should not be running countries, banks or large institutions. They should be heavily medicated, under supervision and kept away from sharp objects let alone the levers of power. They are mid-level bureaucrats of modest ability who have been accidentally elevated to positions of power by a runaway ambition-gland. And it’s broken them; made them delusional. We should not permit them to inflict their delusion on the rest of us.

Ireland, January 25th 2012

In two weeks time, assuming Europe lasts that long, that delusion will once again be inflicted upon the people of Ireland. In what is the ultimate ongoing demonstration that our government represents the interests of casino-capitalism above that of the citizenry, the next of the Anglo-Irish Bank payments will be made. On that day, the Fine Gael / Labour coalition will hand over €1.25 billion of public money to unsecured, unguaranteed bond-holders. It’s mind-blowing really. There is no legal requirement for the government to do this. It is not a condition of the IMF/EU “bail-out”. The payment is not part of the disastrous 2008 Bank Guarantee. Let me repeat; there is no legal requirement to pay this money. Indeed I would argue there is a moral imperative to not pay it.

So why are we paying this money, despite there being no requirement? Because our leaders don’t want to upset the markets. Oh, they’re happy to upset the people they were elected to represent. Happy to cut child benefit and disability benefit. Happy to slash the incomes of the already poverty-stricken. But they don’t want to upset the markets. Markets, remember, that Ireland has been effectively excluded from by crippling interest rates (hence our need for the IMF/EU “bail-out”). The markets will screw us alright, but heaven forbid we Irish upset them.

To a nation the size of Ireland, a payment of €1.25 billion is massive. It represents more than half the spending cuts made in our recent budget. As a letter to the Irish Times recently put it, “the proposed payment is equivalent to the salaries of 5,000 extra nurses for five years”. But it’s only the tip of the iceberg. By the end of this year, the Irish people will have paid roughly €2 billion of unsecured, unguaranteed bonds. On top of that, we’ll also be paying more than €3.7 billion of bonds covered by our insane Bank Guarantee. And that’s for Anglo-Irish Bank alone. Yes, that’s right, more than €5.7 billion of public money is being handed over to investors in a single (now defunct) bank in a single year. It’s beyond nonsense and into the realm of criminally insane.

We’re constantly being told that we must live within our means, while those doing the preaching are throwing our money away. It’s time we put an end to this idiocy.