Oil: The Weapon of the New World Order

[WhiskeyGirl]

Oil: The Weapon of the New World Order

The key to the conflict over Mideast oil, amidst China's growing influence in the Arabian peninsula, is simply lowering demand.  
   
Thursday, June 19, 2008

Gal Luft 
 
As nations become increasingly dependent on oil, it becomes strategically imperative for them to secure their access to the Middle East. This means building strong alliances with the region’s suppliers, providing them with diplomatic support and military aid, and often turning a blind eye to their human rights transgressions.

Since the famous 1945 meeting between U.S. President Franklin D. Roosevelt and the Saudi King Abdul Aziz ibn Saud aboard the USS Quincy in Egypt's Great Bitter Lake, it was the U.S. that served as the guarantor of security and stability in the Persian Gulf. In fact, the use of military power to ensure free flow of oil from the Persian Gulf has been a tenet of U.S. national security strategy.

(snip)

In the decade between the Gulf War and the 2003 Operation Iraqi Freedom, the U.S. strengthened its military presence in the region, building bases in Qatar, Bahrain, and Kuwait. At a cost of $50 billion to $60 billion per year the U.S. patrolled the waters of the Gulf, imposed a no-fly zone in Iraq, and provided training and equipment to the region's militaries.

(snip)

...By far the most important growth market for countries like Iran and Saudi Arabia is China, which is currently the world’s second largest oil consumer and which by 2030 is expected to import as much oil as the U.S. does today.

To fuel its growing economy, China is following America’s footsteps, subjugating its foreign policy to its energy needs. It is attempting to gain a foothold in the Middle East and build up long-term strategic links with the region’s producers. Though some optimists think that China’s pursuit of energy could present an opportunity to enhance cooperation, integration, and interdependence with the U.S., there are ample signs that China and the U.S. could already be on a collision course over oil.

For China, the biggest prize in the Middle East is Saudi Arabia, home of a quarter of the world’s reserves. Since September 11, tension in U.S.-Saudi relations has provided the Chinese with an opportunity to win the heart of the House of Saud. To Washington’s dismay China has also set its sights on Iran, announcing that it will not support sanctions against Iran in the UN Security Council.

(snip)

In 2005-2007, despite political instability, hurricanes and unquenchable demand from developing Asia, OPEC refused to increase production, maintaining a band ranging between $60 and $90 per barrel in comparison to earlier part of the decade when oil prices fluctuated between $20 and $30. This caused a transfer of wealth of historical proportions from the world’s consumers to the coffers of Middle East producers.

As President Bush said in April 2004, U.S. dependence on overseas oil is a “foreign tax on the American people.” Indeed, oil imports constitute a third of the U.S. trade deficit and are a major contributor to the loss of jobs and investment opportunities. The transfer of wealth resulting from the cartel’s greed is reshaping the world economy.

Flushed with petrodollars, oil producers are using their money to buy critical nodes of the West’s economies including equity firms, banks, stock exchanges, media conglomerates, and retail chains. Altogether overseas acquisitions from the Arab world amounted to $68 billion in 2007 and additional tens of billions of dollars are still awaiting a place to park. Such holdings enable Arab governments to wield unprecedented influence on the West’s economy and politics.

(snip)...The recent change of the trade patterns of the Arab oil producers could potentially bring about the decline of the U.S. dollar as the main reserve currency, a process that may already be on its way.

Arab countries have grown more dependent on imported goods from Europe and Asia rather than the U.S. Since it is now Euros and Yens that need to pay for the Arabs’ imports, Arab governments think more and more in terms of non-dollar currencies. At a time when the U.S. dollar is weak and U.S. national debt is at a historical high the specter of OPEC countries oil dropping the dollar in favor of other currencies while being a boon to Europeans, is a great threat to the U.S. economy. Further drain on economic resources caused by imports of expensive oil could occur should supply fall sharply due a catastrophic terror attack against the region’s energy installations.

Throughout the world jihadist terrorists and other rogue elements attack oil and gas installations almost on a daily basis with growing impact on the world economy. What makes oil interesting for terrorists are the unique conditions created in the oil market in recent years. Until 2002, the oil market had sufficient wiggle room to deal with occasional supply disruptions.

Such disruptions could be offset by the spare production capacity owned by some OPEC producers, chiefly Saudi Arabia. This spare capacity has been the oil market's main source of liquidity. But due to the sudden growth in demand in developing Asia, this liquidity mechanism has eroded from seven million barrels per day in 2002 which constituted ten percent of the market to about two million barrels per day today, less than three percent. As a result, the oil market today resembles a car without shock absorbers: the tiniest bump on the road can send a passenger to the ceiling.

Without liquidity, the only one mechanism left to bring the market to equilibrium is rapid and uncontrolled price increases. This reality plays into the hands of terrorists who want to hurt Western economy. Osama bin Laden’s strategy is based on the conviction that the way to bring down a superpower is to weaken its economy through protracted guerilla warfare.

We “bled Russia for ten years until it went bankrupt and was forced to withdraw [from Afghanistan] in defeat. […] We are continuing in the same policy to make America bleed profusely to the point of bankruptcy,” bin Laden boasted in his October 2004 videotape. Striking oil, which jihadists call “the provision line and the feeding to the artery of the life of the crusader's nation,” is easy and effective.

(snip)

Some Europeans even see the U.S. militarization of energy security and its military presence in the Middle East as a disruptive factor which only builds tension and undermines energy security. Such an approach is not well received among Americans who believe that left to their own devices aggressive Persian Gulf dictators are likely to bully their neighbors, attempt to take over their energy resources, and disrupt the flow of oil in the Strait of Hormuz.

(snip)

Sixty years ago U.S. Secretary of State Edward Stettinius opposed the creation of the state of Israel stating “it would seriously prejudice our ability to afford protection to American interests, economic and commercial […] throughout the area.” More recently, The Iraq Study Group argued for a more aggressive U.S. role in the Arab-Israeli conflict as a way to mitigate regional tension and stabilize the situation in Iraq.

Friends of Israel in the U.S. prefer to de-link the Arab-Israeli conflict from the region’s other ailments, arguing that, while being a good thing in and in itself, resolution of the Arab-Israeli conflict will have little impact on the behavior of Persian Gulf regimes and the social illnesses from which the region’s population suffers. The differences of opinion regarding Israel’s impact on regional stability could deepen should another war break out between Israel and its neighbors and should the Arab countries decide to use the energy weapon as they did in 1973.

Many believe that the oil weapon is obsolete and will not be used again. This view may be overly optimistic in light of the fact that since September 11, several major energy exporters, including Saudi Arabia, Iran, Iraq, and Venezuela, rattled the oil saber as tension with the U.S. deepened. In October 2002, Mahathir Mohamad, then Malaysia’s prime minister and chair of the Organization of the Islamic Conference explained, “Oil is the only thing Muslim nations have which is needed by the rest of the world. If they can cut back on supply, people will not be oppressive on them. […] It can be used as a weapon to protect the interest of Muslims.” Earlier that year, Iran's supreme leader Ayatollah Ali Khamenei warned that “if the west did not receive oil their factories would grind to a halt. This will shake the world!”

To many, those statements seem hollow. However, they indicate a deepening understanding within the oil producing community, and particularly within the Muslim world which owns nearly 75 percent of the world’s oil reserves, that the use of energy as a political weapon is a legitimate strategy.

(snip)

A transatlantic consensus exists for better management of strategic petroleum reserves and for strengthened energy dialogue with emerging energy consumers in the developing world, primarily China and India, with possible inclusion of those two emerging Asian giants in the International Energy Agency regime in the future. There is also a growing consensus on the need for diplomatic and economic support for ways to curb the Middle East’s influence by developing alternative supply sources and alternative energy routes from Central Asia and Africa.

But since oil is a fungible commodity which is traded in the global market, diversifying away from the Middle East to other suppliers would be, at best, a stop gap solution. As long as the world’s transportation system depends on oil to the degree that it does today, dependence on the Middle East will grow and so will the economic and security burden associated with such dependency.

The key should be to reduce demand for oil period, and since two thirds of the world’s oil is used for transportation this means reducing oil use through increased fuel efficiency and through a shift from a petroleum dependent transportation system to one that relies on next-generation fuels, meaning non-oil based transportation fuels such as methanol, ethanol, biodiesel, electricity and others derived from abundant domestic energy resources such as coal, nuclear power, biomass, and municipal waste. Yet, the challenge ahead is how to reconcile environmental and security considerations.

Both Europe and the U.S. are well-endowed with coal, yet both are reluctant to expand its role in their energy portfolio and convert coal to liquid fuels. Though nuclear energy is a near zero emissions energy source, in both Europe and the U.S. the nuclear industry is suffering from stagnation. Germany announced that it will phase out nuclear power by 2020. In the U.S. not one nuclear reactor has been built for three decades and political agreement on what to do with nuclear waste is not on the horizon. This policy will have to be reviewed as electricity begins to play a bigger role in the transportation sector.

Resolving all the problems associated with the shift from oil to alternatives will take enormous effort and a long period of time. In the interim, Persian Gulf countries are becoming wealthier and more powerful than ever. This means that, at least in the foreseeable future, energy security will require careful management of the relations with the Middle East.

The only way consumers can check the region’s influence and anti-free market behavior is by putting their collective weight together and acting in a unified manner to counterbalance OPEC and bring the cartel to adopt the policies conducive to energy security and necessary to bringing down oil prices: an increase in production capacity, greater openness, and a more hospitable investment climate without which international oil companies will not be able to operate in the region.

Gal Luft is executive director of the Institute for the Analysis of Global Security (IAGS) and a contributor to the The Cutting Edge News.

read the rest of the story here ~ http://www.energypublisher.com/article.asp?id=15526

[WhiskeyGirl]

Nirvana out of American reach

Paul Kelly, Editor-at-Large | July 05, 2008

THE energy, financial and political woes that grip the US signal a decisive shift in world power, mocking the liberal delusion that Barack Obama or John McCain can return American prestige and power to its pre-Bush year 2000 nirvana. There is no such nirvana. There is instead a new reality: the greatest transfer of income in human history, away from energy importers such as the US to energy exporters; the rise of a new breed of wealthy autocracies that cripple US hopes of dominating the global system; and demands on the US to make fresh compromises in a world where power is rapidly being diversified.

Far from the Obama-McCain contest being America's saviour, it has another dimension entirely: evidence of the generic failure of the US political system. The US struggles but seems unable to confront the world that exists. It slips into pessimism while fooling itself another irresistible revival is just around the corner. But the structural trends offer a different conclusion.

Despite cyclical fluctuations, world oil and energy prices will stay high, driven by long-run changes in supply and demand. This provokes a global wealth redistribution without precedent to oil exporters, mainly in the Middle East and Russia, that marches in tandem with China's export-driven current account surplus. It is an extensive transfer of economic power away from the US to nations that are not mainly democracies, a dynamic that is the subject of agonising review in seminars and debates in the US.

(snip)

...Non-energy-rich developing nations will be crippled and confront recessions, dislocation and violence; giants such as the US will face deep political and economic adjustment. Australia is both a winner and a loser as its coal and gas export prices rise and it pays more for petrol; but it is a big winner overall from the broad-based commodity boom likely to run for decades.

Writing in the May-June issue of Foreign Affairs, US strategic analyst Fareed Zakaria, whose new book The Post-American World is reviewed in The Weekend Australian Review today, puts the oil trend into a wider context, arguing that the third great power shift of the past 500 years is under way.

The first was the rise of the Western world that began in the 15th century; the second was the rise of the US in the late 19th century; and the third is what analysts call the rise of the rest. This is the shift in power to parts (but not all) of the developing world that are "experiencing rates of economic growth that were once unthinkable" and whose total gross domestic product surpasses that of the industrialised nations. Countries driving this structural change are China, India, Brazil, Russia, the Organisation of the Petroleum Exporting Countries and Gulf nations, and parts of Southeast Asia.

(snip)

In the current issue of The American Interest, Gal Luft, from the Institute for the Analysis of Global Security, argues that "perpetually high oil prices will undoubtedly transform the existing world economic order". Even below today's prices, OPEC could potentially buy the Bank of America with two months' worth of production and General Motors with six days' worth. This dictates only one sensible response: non-petroleum fuels must become the US's top strategic economic priority, to be introduced over a generation. 

(snip)

The US is hostage to global oil markets, for years having refused to embark on radical reforms to break its consumer oil addiction. The price of such refusals will plague the present generation of politicians and consumers.

(snip)

This is the threat that dominates Kagan's book. "Chinese and Russian leaders are not just autocrats," he says. "They believe in autocracy. The modern liberal mind at 'the end of history' may not appreciate the enduring appeal of autocracy in this globalised world."

(snip)

China puts it bluntly: the selection of whatever social system by a country is the affair of the people (read government) of that country. This strikes at the deepest orthodoxy of US strategy and ideology. The first sentence of the 2002 National Security Strategy signed by Bush says: "The great struggles of the 20th century between liberty and totalitarianism ended with a decisive victory for the forces of freedom and a single sustainable model for national success: freedom, democracy and free enterprise."

(snip)

In its presidential season, the US, far more than Australia, is caught with a political system unable to respond to challenges. The Obama-McCain contest is a cosmetic that conceals the nature of the US's difficulty. The downturn reflects problems in the financial system and the real economy.

For the US there is no easy solution to the structural forces driving oil, energy and financial markets. Yet much of the political debate remains in denial of these forces.

The task for the next president is to reform US economic and energy policy - to strengthen the US at home - and to conduct a foreign policy that recognises a more diverse world defined byinterdependence.

www.foreignaffairs.org
www.the-american-interest.com
www.nationalinterest.org

read the rest of the story here - http://www.theaustralian.news.com.au/story/0,25197,23968711-7583,00.html

[WhiskeyGirl]

Iran and Brazil Can Do It. So Can We.

By Gal Luft
Sunday, July 6, 2008; B01

When the founding fathers declared our independence, they could not have imagined that, 232 years later, the United States would be so spectacularly dependent on foreign countries. It would be roughly eight more decades before oil gushed from a well in Titusville, Pa., marking the beginning of the global oil economy; it took eight decades more for the United States to become a net oil importer. But the republic's disastrous dependence on foreign oil has increased by leaps and bounds ever since.

In 1973, when OPEC imposed its oil embargo, U.S. oil imports composed 30 percent of our needs; today, they make up more than 60 percent, with a growing proportion of that crude coming from the world's least stable regions. At around $145 a barrel, the United States, by my calculations, will spend more on imported oil this year than it will spend on its own defense budget, and much of that money will flow into the coffers of those who wish us ill.

Since oil dependence is so unappealing, you'd think that energy independence would be an easy sell, especially on this Fourth of July weekend. But in fact, very few policy ideas have been so ridiculed. A 2007 report by the National Petroleum Council, a privately funded group that offers advice from the oil and gas industries to the federal government, calls energy independence "unrealistic"; a recent book, "Gusher of Lies," by Robert Bryce, a former fellow at a think tank funded in part by energy interests, described energy independence as a "dangerous delusion"; and a 2006 Council on Foreign Relations task force went so far as to accuse those promoting energy independence of "doing the nation a disservice by focusing on a goal that is unachievable over the foreseeable future."

Ignore them. Energy independence does not mean that the United States must be entirely self-sufficient. It simply means reducing the role of oil in world politics -- turning it from a strategic commodity into merely another thing to sell.

Is energy independence a pipe dream? Hardly. In the electricity sector, the mission has already been accomplished. Remember President Jimmy Carter in his cardigan during the oil crises of the 1970s, urging Americans to save electricity? It took us just one decade to wean the electricity sector from oil. Today, only 2 percent of U.S. electricity comes from oil, according to the Energy Department. Could we do something similar with transportation, where American cars and trucks still gulp oil-based fuel greedily? At least four very different countries -- dictatorships and democracies alike -- are already making serious headway toward that goal. It's past time to pay attention to their example.

The first country, surprisingly enough, is Iran. The Islamic republic has lots of crude but little capacity to refine it, leaving Tehran heavily dependent on gasoline imports. The country's blustery president, Mahmoud Ahmadinejad, is fully aware that this is Iran's Achilles' heel and worries that a comprehensive gasoline embargo could cause enough social unrest to undermine his regime.

So Ahmadinejad has launched an energy-independence program designed to shift Iran's transportation system from gasoline to natural gas, which Iran has plenty of. "If we can change our automobiles' fuel from gasoline to [natural] gas during the next three-four years," he said last July, "we won't need gasoline anymore." His plan includes a mandate for domestic automakers to make "dual-fuel" cars that can run on both gasoline and natural gas, a crash program to convert used vehicles to run on natural gas and a program to convert Iranian gas stations to serve both kinds of fuel. According to the International Association of Natural Gas Vehicles, more than 100 conversion centers have been built throughout the country: Iranians can drive in with their gasoline-only cars, pay a subsidized fee equivalent to $50 and collect their newly dual-fuelled cars several hours later. Ahmadinejad's plan, which has been largely ignored by the West, means that within five years or so, Iran could be virtually immune to international sanctions.

While Iran is moving quickly toward energy independence, Brazil is already there. It's a striking turnaround; three decades ago, the country imported 80 percent of its oil supply. But since the 1973 Arab oil embargo, the Brazilians have invested massively in their sugar-based ethanol industry and created a fleet of vehicles that can run on the resulting fuel. According to the Sugar Cane Industry Union (Unica), 90 percent of the new cars sold this year in Brazil will be flexible-fuel vehicles that cost an extra $100 to make but can run on any combination of gasoline and ethanol.

Lest anyone think that can't be done in the United States, many of those new cars are made by General Motors and Ford. All it really takes to turn a regular car into a flex-fuel one is a fuel sensor and a corrosion-resistant fuel line.

Discovering how to make hydrocarbons and carbohydrates happily cohabit in the same fuel tank isn't all that Brazil has done; it has also increased domestic oil production. Its efforts have not only broken the yoke of Brazil's oil dependence but also insulated the country's economy from the pain of the current spike in global oil prices. Gasoline prices have nearly doubled elsewhere since 2005, but in Brazil, they have been almost frozen. This year, more ethanol will be sold in Brazil than gasoline. Sounds pretty good, doesn't it?

Like Brazil, China has decided to replace gasoline with alternative fuels. But unlike the United States and Brazil, where the favorite substitute is ethanol, China has embraced a different alcohol: methanol. Several provinces in China already blend their gasoline with methanol, a clear, colorless liquid also known as wood alcohol, and scores of methanol plants are currently under construction there. The Chinese auto industry has already begun to produce flex-fuel models that can run on methanol. Shanxi, a province in central China that produces much of the country's coal, has even issued stickers granting cars that use pure methanol free passage on the province's toll roads.

The distinction between methanol and ethanol is just one letter (but then, so is the difference between Iran and Iraq). Both biofuels should be in our basket of options. True, ethanol packs more energy per gallon and is less corrosive than methanol. But methanol is cheaper and far easier to produce in bulk. While ethanol can be made only from agricultural products such as corn and sugar cane, methanol can be made from natural gas, coal, industrial garbage and even recycled carbon dioxide captured from power stations' smokestacks -- an elegant way to reduce greenhouse gas emissions.

Israel offers a fourth testament to what leadership, ingenuity and audacity can achieve. Last year, it launched an electric-car venture designed to turn Israel -- which obviously has some tensions with the region's big oil producers -- into an oil-free economy. Israelis will soon be able to replace their gasoline-fueled cars with battery-operated ones, which they'll plug into the hundreds of thousands of recharging points planned to be erected throughout the country. Israeli motorists, the government hopes, will be able to swap their batteries in a matter of minutes at dedicated stations or recharge them at home or at work. "Oil is the greatest problem of all time -- the great polluter and promoter of terror," said Israeli President Shimon Peres, the project's political patron. "We should get rid of it."

For each of the four countries, knocking oil off its pedestal is no longer a theoretical proposition but a reality in the making. But despite the lip service our own politicians pay to the need to reduce our oil dependence, none of the solutions offered by Iran, Brazil, China and Israel are even under consideration in the land of the free and the home of the brave.

Just go down the list. Natural-gas vehicles are nowhere to be seen. Brazilian sugar-cane ethanol is barred from the country by a steep 54-cent-per-gallon import tariff, courtesy of ethanol protectionists and their representatives in Congress. (No tariff is imposed on imported oil, of course.) For similar reasons, flex-fuel cars sold in the United States are certified to run only on ethanol, keeping methanol and other viable biofuels off the market -- even though they are cheaper and can be made from a wealth of coal and biomass resources. The kind of electric cars deployed in Israel have never returned to U.S. showrooms since General Motors' mass crushing of its EV1 -- the subject of the documentary "Who Killed the Electric Car?"

It's time to get serious. Policies such as "drill more" and "drive smaller cars" all keep us running on petroleum. At best, they buy us a few more years of complacency, while ensuring a much worse dependence down the road when America's conventional oil reserves are even more depleted -- whether or not we drill in the Arctic National Wildlife Refuge.

The hard truth is that real energy independence can be achieved only through fuel choice and competition. That competition cannot take place as long as (according to the Department of Transportation) we continue to put 16 million new cars that run only on petroleum on our roads every year, each with an average street life of 16.8 years -- thereby locking ourselves into decades more of petroleum dependence.

So let's remember the old saying: When in a hole, stop digging. If every new car sold in the United States were a flex-fuel vehicle and if millions of Americans could plug in their electric cars, gasoline would be facing fierce competition at the pump and the socket. Moreover, our money would have migrated from Exxon to Pepco, from the Middle East to the Midwest -- as well as to scores of poor, biomass-producing countries in Africa, Latin America and South Asia, including the few countries that don't yet hate our guts. This, and no other, is the road to independence.

luft@iags.org


Gal Luft is executive director of the Institute for the Analysis of Global Security and co-founder of the Set America Free Coalition, a bipartisan alliance of groups promoting U.S. energy independence.

(there is hope)

[WhiskeyGirl]

A brighter future is possible.

from the posts above -

...90 percent of the new cars sold this year in Brazil will be flexible-fuel vehicles that cost an extra $100 to make but can run on any combination of gasoline and ethanol.

Lest anyone think that can't be done in the United States, many of those new cars are made by General Motors and Ford. All it really takes to turn a regular car into a flex-fuel one is a fuel sensor and a corrosion-resistant fuel line.

How about a tax credit for conversions?  Keep those existing SUV's on the road? 

What good are tax credits for children, daycare, etc., if there are no jobs and people to pay taxes?

How hard would it be to start converting one fuel station at truck stops on the interstate?  There are quite a few large transportation companies, why not start with them?  USPS, UPS, FedEx, Schneider, etc.

How hard would it be to convert one gas station at an intersection with three or four existing stations?

How much could be accomplished by the end of 2008?  2009?

The price of oil is a national crisis. 

[caesu]

[Dihannah1]

Low blow CAESU.   Bush is at the G8 summit and calling for other countries to keep there promise of aiding Africa.  America is giving the most money and resources than any other country, as usual, we foot the bill.  Seems, no matter what he does, he is condemned.

[caesu]

i didn't write anything. i just posted the cartoon.
so how can you arrive at that comment?? 

if you haven't seen it. that is a corn cob.
used for making ethanol. one reason for the rise in food prices.

Rush for biofuels threatens starvation on a global scale

http://www.timesonline.co.uk/tol/news/environment/article3500954.ece

[WhiskeyGirl]

i didn't write anything. i just posted the cartoon.
so how can you arrive at that comment?? 

if you haven't seen it. that is a corn cob.
used for making ethanol. one reason for the rise in food prices.

Rush for biofuels threatens starvation on a global scale

http://www.timesonline.co.uk/tol/news/environment/article3500954.ece

The price of producing corn and other products has gone up for a number of reasons.  One of them, is the sudden rise in the price of oil and diesel used to run farm equipment and transport grains.

Global wealth redistribution may mean that the new 'rich' nations need to step up to the plate and help the less fortunate.  The U.S. is broke.  imho

The good news for the U.S. is that there are a number of possibilities including electric, methanol, nuclear, solar, and others.

It would appear that several nations are already making use of these technologies.

The U.S. needs to get the energy wagon on the road, pronto.

imho

The price of oil would be lower if there was greater production.  imho

[caesu]

i didn't write anything. i just posted the cartoon.
so how can you arrive at that comment?? 

if you haven't seen it. that is a corn cob.
used for making ethanol. one reason for the rise in food prices.

Rush for biofuels threatens starvation on a global scale

http://www.timesonline.co.uk/tol/news/environment/article3500954.ece

The price of producing corn and other products has gone up for a number of reasons.  One of them, is the sudden rise in the price of oil and diesel used to run farm equipment and transport grains.

Global wealth redistribution may mean that the new 'rich' nations need to step up to the plate and help the less fortunate.  The U.S. is broke.  imho

The good news for the U.S. is that there are a number of possibilities including electric, methanol, nuclear, solar, and others.

It would appear that several nations are already making use of these technologies.

The U.S. needs to get the energy wagon on the road, pronto.

imho

The price of oil would be lower if there was greater production.  imho

but electricity is not an energy source. electricity still has to get produced by the power plant.
and ethanol is exactly one cause of the rising food prices.
because ethanol/bio-fuel is produced from corn and other plants.
so it takes up agriculture land what otherwise would be used for producing food (that's what the cartoon was about).
so the rising oil prices lead to higher transport costs for food but also more ethanol production, again higher food costs.

so solution has to be alternative energy sources like you said. but ethanol is not a very good one. for the food reason.
and cut down on the demand. smaller, more fuel efficient cars. saving energy at home with energy efficient light bulbs.
hundreds of ways to save energy. it won't bring the energy price down much, but it will bring the total energy bill down.
also cutting down on meat consumption. there has to go a lot of energy and food in the production of meat.
the amount of agricultural produce the cow for example ate during its lifetime equals so many more meals than the meat that comes from this cow.
so there has to be price for products who took a lot of valuable energy to produce.

pumping up more oil is only a temporary solution. eventually it will be harder to get pumped up everywhere.
and everytime somebody says something crazy in the middle-east or there is another conflict there the prices takes another hike.
global price of oil won't go down anymore. better beat the addiction than feed the addiction to oil.

i am all for more nuclear power plants. of course with very strict safety measures.
and the nuclear waste has to be properly and savely disposed off obviously.

[Dihannah1]

Where's the cartoon????  It's gone...

[caesu]

http://www.energyfarms.net/files/user299/foodforcar.jpg

i can still see it?

[WhiskeyGirl]

i didn't write anything. i just posted the cartoon.
so how can you arrive at that comment?? 

if you haven't seen it. that is a corn cob.
used for making ethanol. one reason for the rise in food prices.

Rush for biofuels threatens starvation on a global scale

http://www.timesonline.co.uk/tol/news/environment/article3500954.ece

The price of producing corn and other products has gone up for a number of reasons.  One of them, is the sudden rise in the price of oil and diesel used to run farm equipment and transport grains.

Global wealth redistribution may mean that the new 'rich' nations need to step up to the plate and help the less fortunate.  The U.S. is broke.  imho

The good news for the U.S. is that there are a number of possibilities including electric, methanol, nuclear, solar, and others.

It would appear that several nations are already making use of these technologies.

The U.S. needs to get the energy wagon on the road, pronto.

imho

The price of oil would be lower if there was greater production.  imho

but electricity is not an energy source. electricity still has to get produced by the power plant.
and ethanol is exactly one cause of the rising food prices.
because ethanol/bio-fuel is produced from corn and other plants.
so it takes up agriculture land what otherwise would be used for producing food (that's what the cartoon was about).
so the rising oil prices lead to higher transport costs for food but also more ethanol production, again higher food costs.

so solution has to be alternative energy sources like you said. but ethanol is not a very good one. for the food reason.
and cut down on the demand. smaller, more fuel efficient cars. saving energy at home with energy efficient light bulbs.
hundreds of ways to save energy. it won't bring the energy price down much, but it will bring the total energy bill down.
also cutting down on meat consumption. there has to go a lot of energy and food in the production of meat.
the amount of agricultural produce the cow for example ate during its lifetime equals so many more meals than the meat that comes from this cow.
so there has to be price for products who took a lot of valuable energy to produce.

pumping up more oil is only a temporary solution. eventually it will be harder to get pumped up everywhere.
and everytime somebody says something crazy in the middle-east or there is another conflict there the prices takes another hike.
global price of oil won't go down anymore. better beat the addiction than feed the addiction to oil.

i am all for more nuclear power plants. of course with very strict safety measures.
and the nuclear waste has to be properly and savely disposed off obviously.

Historically, farm animals did not rely 100% on feed lots for their sustenance.  They grazed much as wild animals do.  There is a new trend toward "free range" animal production. 

Historically, cows in India required very little human care, foraged for their food, and were very healthy.  Very low cost to maintain, cows plowed fields, and reproduced to the economic advantage of their owner. 

I believe that biofuels are a good short term choice.  The price of oil will continue to rise.  The price that farmers receive for their products has been low for a long time.  I know farmers where I live that need to heat their homes during the winter.  Propane is expensive too.  Biofuel would provide some easy 'quick fit' alternatives for existing equipment.    Many expect that biofuel will become cheaper as time goes on.  Why shouldn't farmers profit from biofuels?  imho

IIRC, historically the U.S. has had a difficult time selling many agricultural crops to the rest of the world.  No one seems to want what we have to sell.  GMOs are one problem.  Thus, there is a surplus, the U.S. government buys the surplus, and gives it away to the less fortunate.  There are other countries/areas that produce agricultural products as well and are located much closer to problem areas around the globe.   A simplification of the problem.  imho

Agricultural products also depend on fertilizer and pesticides.  These are often petroleum based. 

Ending the dependence on petroleum based farm products isn't easy.  http://attra.ncat.org/organic.html
http://ofrf.org/index.html

Alternative energy sources -
http://attra.ncat.org/energy.php

diesel from used fryer oil
http://www.canada.com/calgaryherald/news/story.html?id=98c5181e-2df9-43cf-aff9-f82698e17ec6

biodiesel co-op Canada
http://www.wellingtonadvertiser.com/index.cfm?page=detail&itmno=1349

ethanol from Kudzu
http://www.istockanalyst.com/article/viewiStockNews+articleid_2374976&title=Kudzu_for_Cars.html

biodiesel Japan
http://online.wsj.com/article/SB121435999640402271.html?mod=googlenews_wsj

Crude oil prices that are nearing $150 a barrel are squeezing farmers, too, Swinson said. In the past two years, the cost to grow corn has increased from about $200 an acre to about $450 an acre because of higher prices for diesel fuel and fertilizers, which are made from oil.

"One bad year can put me out of business," Swinson said.

http://www.istockanalyst.com/article/viewiStockNews+articleid_2374746&title=Crop_Fortunes_Favor.html


Hunger Hits Harder in India
By Sumita Sami

After four months of bland cafeteria food I was looking forward to shopping at an Indian supermarket when reality delivered a rude shock. Pasted on the door was a copy of a BBC article that informed customers about India's rice export ban. Next to China, India is the world's largest producer of rice, and the rest of the world was beginning to panic.
 
This move shouldn't, however, have come as a complete surprise. There were already indications that the Indian government would attempt to safeguard its stockpiles of rice regardless of the effect it would have on the rest of the world. One of these indications was the soaring rate of Indian farmer suicides. Unable to pay back loans with near-criminal interest rates, farmers had been taking their lives across multiple states in India. The causes are varied and many – like poor irrigation facilities and a poor lending infrastructure – and can be attributed to a corrupt and inefficient government. Some, however, are connected to the latest in a series of global price hikes: a food crisis.

But the ban, however, will just contribute to a temporary solution to the food crisis in India. Many experts have already pointed out that the major problem is not food production, but distribution. Inflation has begun to worry the government since April of this year, and for the poor, the inflation is catastrophic. The only silver lining in the situation – the increased investment in agriculture – has been exploited by market speculators, who appear to have been at least partly responsible for the rise in prices. And although the Indian economy has been burgeoning at 8.5% over the past five years, the rate of growth of agriculture is stagnating at 2.5%.

The spate of farmer suicides finally jolted the Indian government into action, and a populist budget of a $15 billion bank loan waiver was put into place. The policy, however, was criticized by many as being ineffective; some pointed out that farmers were killing themselves because they were being hounded by private, usurious moneylenders, and not because they defaulted on bank loans.

And then there is the issue of politics. With elections approaching, the huge number of farmer votes might persuade the Indian government to increase the minimum support price for crops. This would probably be a counter-productive move, however, since with food prices already rising, even more of the rural poor will be unable to afford rice.

Granaries in India's central states are overflowing with wheat as the government announces that it has managed a “record procurement” of 21 million tons . But the cost of storage is astronomical, and the wheat in Haryana is currently rotting out in the open.

The best thing to do now would be to focus on food distribution, which has already been criticized for being corrupt and inefficient. Research into better and more resistant food crops will have to be stepped up in the future. Politics needs to take a backseat as India begins to figure out how to manage its food crisis. And perhaps when the world learns to deal with the rising food prices and the mess caused by biofuels, oil and the like, India will be able to catch up.

http://nazaronline.net/politics_society/jul08/hunger_hits_harder_in_india_101.html

India grows crops for biofuel -
http://www.financialexpress.com/news/Global-cue--Indian-firm-eyes-wastelands-for-jatropha-cultivation-to-produce-biofuel/327445/

In fact it could create poverty in Asia and South America, whose economies have started to prosper as a result of biofuels. One farmer from West Africa spoke in defence of biofuels at the Rome food summit last Tuesday, because they have helped his markets and now he is finally profitable.

http://www.walesonline.co.uk/countryside-farming-news/country-farming-columnists/2008/06/10/lack-of-investment-causing-food-price-rises-91466-21047029/

Biofuel is not the only reason food prices are rising.  Perhaps there should be an increased focus on food storage and preventing the crops that are produced from being wasted.  Speculation also seems to cause the price of food to rise.  Proper storage, honest distribution, and fairer treatment of farmers all seem to be areas in need of improvement.

There is no easy answer.

[WhiskeyGirl]

To simply accept the contention that the global food crisis is caused only by too much land being allocated to producing crops that produce the petroleum substitute biofuel ethanol is to be simplistic in the extreme. High food prices are also driven by high petroleum prices. Where do you think the farmer gets electricity from that runs his pump to water his fields? What do you think runs his tractors and harvesters, the trucks on which his produce is transported from farm to market? High oil prices mean higher electricity costs, or even inadequate electricity as we now have. What happens then? We end up with food too expensive to buy or even scarce, probably both, as we also now have. It all goes back to oil and its price, not to mention distribution and greed-driven hoarding. We have to make a doable plan immediately to use our energy resources in the most efficient and optimum manner to overcome energy shortfalls both in terms of quantity and price.

Europe alone is sitting on proverbial “lakes of wine and mountains of butter.” Why not put all this food into the markets of the poor? It all has to do with Control without Responsibility, America’s latest doctrine. America knows what it is doing, not just regarding food but also oil. They had the decline of the dollar under control too, until China stepped in. The tragedy is that we do not know what they are doing and we do not know what we are doing.

The initial fall of the dollar was deliberately targeted to reduce the trade imbalance between America and China. America had the internal strength to withstand the fallout • or so it assumed, forgetting how indebted it is and to whom and that it has neither the output levels nor the pricing of oil totally under its control. The US had been asking China for years to revalue the Yuan, which it thinks is artificially undervalued. When China did not the US decided to devalue the dollar instead, but it was a managed devaluation, nothing to go hysterical about. Then two things happened to make the US lose some control, enough to make a difference: China decided to sell some of the US debt that it holds and Iran set-up its Euro-denominated Iranian Oil Bourse (IOB) on May 5. This knocked the wind out of the dollar.

America is the most indebted country in the world. On June 3, 2008 at 9:04:07 GMT its national debt stood at $9,477,171,636,632.85. That, I think, is just under $9.5 trillion! Which means that at the same time and date each US citizen was indebted to the tune of $30,890.69. Considering that the poverty line in America is $18,500 per annum, an American owes nearly twice as much as the income of the 10 percent Americans or over 30 million human beings that live in abject poverty in the richest country in history. These are the joys of market forces capitalism for you. The US national debt has been growing at the rate of $1.55 billion per day since September 28, 2007. That could pay off our entire foreign debt in about 25 days! Their annual military assistance to us is equal to one day of its growing indebtedness. Gandhi was right: “There’s enough for everyone’s need but not enough for everyone’s greed.”

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/Opinions/Columns/06-Jul-2008/The-global-economic-crisis

[WhiskeyGirl]

In addition to the human tragedy of hunger, the food crisis is contributing to global instability and endangering our national security. In Pakistan, a crucial frontline nation in the war on terrorism, almost one-half of the population (77 million people) now lacks access to affordable food.

The Cause of the Crisis

The world's demand for food has grown as nations moving up the economic ladder--like China, India, and Brazil--gain purchasing power, enabling them to eat more and to eat better. As figure 3 illustrates, their consumption of beef and chicken has risen 40 percent since 2000. The shift from cereals to meat and dairy foods dramatically increases the grain content of their diets: seven pounds of grain are needed to produce one pound of meat. Eating one-third of a pound of beef requires more than double the cereal production of one pound of rice. In its last five years of growth, China has shifted from being a major food exporter to a large net consumer.

American's are finding it harder and harder to pay for heating and cooling their homes, buying fuel that enables them to work, shop for food, and other necessities.  A job for many is a necessity for many, not an option. 

Convert U.S. Food Aid to a Cash-Based System. The United States gives one-half of world food aid, but it is the only major donor that provides assistance in kind and not cash. Not only is American aid almost entirely restricted to U.S.-grown and processed crops, 75 percent must be shipped on U.S.-owned vessels that charge some of the industry's highest prices. The cost of freight frequently equals the cost of the commodities.

In the past, thousands of tons of cereals have been transported by barge along the Mississippi River, packaged into fifty-five-pound bags, loaded onto American ships, navigated across the world, transferred to railroad cars, and delivered by truck in Ethiopia and Uganda while stockpiles of locally produced grain lay rotting only miles from the recipients for lack of a market. Reforming our aid program to be cash-based allows the local purchase of food for distribution in recipient countries. The impact would be the same as doubling our annual spending by $2 billion.[1]

Not only would a cash-based reform double our ability to help the poor, local purchases would provide a market for crops and encourage the development of viable agricultural industries in developing nations. Last year, the United Nations World Food Programme bought over 1 million tons of food in Africa.

What does that mean for the U.S. grain that isn't donated?  Should it be dumped in a landfill or put to a positive use, such as biofuel?

http://www.aei.org/publications/filter.all,pubID.28240/pub_detail.asp

Like the United States, China is grappling with a serious obesity epidemic, with more than 25 percent of its adults considered overweight or obese and the rate of overweight adults in the country growing remarkably fast, reports a new study in the journal Health Affairs. ...

The rate of increase in becoming overweight among adults in China is greater than in all developing countries except Mexico, and greater than that among developed nations such as Australia, the United Kingdom, and the United States. The rate of change in overweight status among Chinese is far larger than in the United States, where two-thirds of adults are considered overweight or obese. ...

China is experiencing a large increase in nutrition-related causes of death, including coronary heart disease, and cancer. Since 1985, deaths from diseases linked to poor diets have increased from 48 percent to 61.8 percent in urban areas and from 34.5 percent to almost 46 percent in rural areas. The loss in productivity and increased medical costs represents about 4-8 percent of the gross domestic product (GDP).

The explosion in obesity rates in China is attributable to increased use of edible oil in the Chinese diet and to greater consumption of animal-source foods such as eggs, poultry, beef, and pork. Eating patterns have changed and do not include as many vegetables and carbohydrates as were once found in the classic Chinese diet. In addition, China is experiencing the world's fastest growth in supermarkets, which are spreading to cities and higher-income rural areas. These allow easier access to cheap processed and energy-dense foods.

...In China, 14 percent of households bought a car between 1989 and 1997. The odds of being obese are 80 percent higher for men and women in households that own a car than for those in households that do not, according to Popkin. In addition, television ownership has skyrocketed. In 1989, only 63 percent of households owned a television set, but today nearly all households do.

http://www.medicalnewstoday.com/articles/113857.php

[WhiskeyGirl]

BEIJING -- To understand the changing dietary habits of the Chinese, it helps to listen to 6-year-old Lin Xingni talk about her favorite foods.

"I like to eat chicken and fish. I also like pork ribs," she said.

"You see? Everything is meat," said her father, Lin Yong, an entrepreneur.

Chinese are eating more meat than ever.

In 1980, the average Chinese ate 32 pounds of meat a year. By 1995, annual meat consumption had climbed to 86 pounds. Last year, Chinese ate more than 117 pounds of meat on average, a little more than half of what an average American eats.

Yet the trend line keeps going up.

China already is the world's largest grain producer, ahead of India and the United States. But experts say that the nation's rising meat consumption will force China to go abroad in the future to search for grain to fatten its cows, pigs, chickens and farmed fish.

...It takes 2 to 3 pounds of grain to produce 1 pound of chicken, 4 to 5.5 pounds of grain for 1 pound of pork, and about 10 pounds of grain for 1 pound of beef.

China also is losing production capacity, with urban sprawl gobbling up farmland at a steady rate.

The effects of the Chinese consumption boom have rippled across Asia and hit hardest in countries such as Afghanistan and the Philippines, which could barely feed themselves even in the best of times.

http://www.freep.com/apps/pbcs.dll/article?AID=/20080622/NEWS07/806220575/1009/NEWS07

another interesting article

'We Are Running Out of Environment'
Population expert Paul Ehrlich says we must see the links in our planet's ills

By Kent Garber
Posted June 30, 2008

The so-called new consumers in Asia have been cited as a big factor in the fuel and food crises today. Who are they?
People who have a little more money and education have, in China and India particularly, developed very rapidly the same consumptive attitudes as the average American and European. That's not necessarily bad: Who can deny them wanting the stuff we have when we haven't shown the slightest interest in reducing our own impact on the environment? In 1972, I cowrote an op-ed called "What if all the Chinese had wheels?" At that time, there were 500 million Chinese, and it looked like one day they might want cars. Now, we have 1.3 billion Chinese, and we know damn well they want cars; they're buying them and manufacturing them.

But how do you control consumption?
There are no consumption condoms. This problem is enormously complex. What I am convinced of is that it is human behavior we have to change. The discussion of key issues is limited to a tiny portion of a population. We need to set up a system to keep these issues on the front burner...They are all long-term issues. The politicians, of course, have very little interest in them because solutions don't give votes for the next election.

The international community is starting work on replacing the Kyoto Protocol, which was intended to decrease greenhouse gas emissions. The U.S. never ratified it, and other countries haven't upheld their pledges. Is there any reason to be optimistic this time?
If there is going to be any real success in the international talks, it is going to have to come from the world's publics speaking up. It is beginning to dawn on them that there could be huge problems in the future. In California, we've had a record dry spring. When I was in Australia two years ago, there was no agriculture in New South Wales. I saw huge road trains full of sheep going to the abattoirs to be slaughtered because they didn't have anything left to graze on. There were no crops growing. Climate change is a symptom of a systemic failure to understand that humanity is wrecking its environment.

http://www.usnews.com/articles/news/2008/06/30/we-are-running-out-of-environment.html

[WhiskeyGirl]

An average American eats 125 kg of meat every year and all Americans put together consume, hold your breath, 35,000,000 tonnes of meat every year. Chinese situation is even more alarming. An average Chinese (whose diet used to consist of plenty of vegetables) now consumes 70 kg of meat every year.

Mostly pork but increasingly beef too. All Chinese put together eat 100,000,000 tonnes of meat every year. World meat consumption has surged five-fold in the past 50 years, forcing diversion of foodgrains to feed the animals. Even in countries like Thailand the proportion of foodgrains diverted to animals has jumped from 1% to 30%. Since demand for foodgrains is racing ahead of supply the price of foodgrains is rising.

Present Indian meat consumption is 3 kg per capita per year and all Indians put together consume 3 million tonnes of meat every year. As and when India becomes rich, Indians may start consuming meat at Chinese levels. India would then need 100,000,000 tonnes of meat since India’s population would reach present Chinese population figures.

Imagine the pressure on food prices when over 70% of India’s foodgrains will go to feed the animals producing meat. There isn’t enough land in India or even the entire world to produce foodgrains to support such gigantic animal population.

And what about water? 10,000 litres of water are needed to produce 1 kg of beef. Where is the water to produce so many million million tonnes of meat? An animal generates 100 times more waste than a human being. How to dispose off the waste generated by 50,000 million animals?

Raising the animals, meat processing, chilled storage, transportation, retailing and storing the meat in deep freezer at home all require huge amount of energy. A significant portion of fossil fuels is needed to power the meat industry. Surely earth’s limited resources cannot sustain two burgeoning populations, human beings and animals. Very soon groundwater will dry up and forests will give way to grazing lands.

http://economictimes.indiatimes.com/View_Point/Rising_food_prices_The_blame_game/articleshow/3112207.cms

[caesu]

more meat consumption globally, more bio-fuel production, rising oil prices.
all lead to rising food prices.

The G8 has issued statements on several key issues:

    * Aid and development: Commitment to fulfil earlier pledge to raise annual aid levels by $50bn by 2010, of which $25bn is intended for Africa
    * Global food prices: Call for countries with sufficient food stocks to release reserves to others struggling to cope with rising costs
    * Biofuels: Pledge to ensure biofuel policies are compatible with food security.

http://news.bbc.co.uk/2/hi/asia-pacific/7495641.stm

i like to eat meat.
but maybe the price of meat has to go up substantially so vegetable food will stay affordable.
maybe a tax on meat, and from that revenue subsidise vegetable food? don't know if that works.

[WhiskeyGirl]

more meat consumption globally, more bio-fuel production, rising oil prices.
all lead to rising food prices.

The G8 has issued statements on several key issues:

    * Aid and development: Commitment to fulfil earlier pledge to raise annual aid levels by $50bn by 2010, of which $25bn is intended for Africa
    * Global food prices: Call for countries with sufficient food stocks to release reserves to others struggling to cope with rising costs
    * Biofuels: Pledge to ensure biofuel policies are compatible with food security.

http://news.bbc.co.uk/2/hi/asia-pacific/7495641.stm

i like to eat meat.
but maybe the price of meat has to go up substantially so vegetable food will stay affordable.
maybe a tax on meat, and from that revenue subsidise vegetable food? don't know if that works.

I don't think an American tax on meat would help much.  When I read all these articles, it is amazing to me how much meat the rest of the world consumes, and the fact that consumption is just at the early stages (along with diet related diseases).  American meat consumption is just a 'drop' in the world 'bucket'.  The solution would involve everyone...

I think the increasing meat consumption is really fueling the hunger problems in Africa (and else where). 

Maybe a world tithe - 10% of production to relief efforts.  Those without agricultural production, could give money, oil, or some other kind of help.