"farming a single cow and getting it to market uses as much [energy] as driving from New York to Los Angeles"

This is all the more reason to engage in Eco-Eating (www.brook.com/veg)!

So, when does the whole world, particularly western governments, get over their collective denial of the inevitable? We have known this was coming for at least the last 40 years.

I think, at this late date, we are probably screwed. But that isn't going to stop me from planting a garden, getting a solar panel to run my water well, and getting a really cool bicycle with a little trailer. A solar hot water heater would also be very neat.

Too bad this author didn't make it more clear what, exactly, is driving up the price of oil. Like many others he believes it's complex and that we have no method of reducing the price at this time except maybe a few well placed oil wars. Having followed this issue closely over the last decade I can tell you what I've read doesn't bear this out. One thing alone is really driving the price of sweet light crude, and that's speculation. So whenever an oil expert is on the air or in corporate media shouting about peak oil or lack of production or competition from China etcetera I recommend remembering two things... 1: the price of oil is determined not by the Saudis or even by how much oil is still in the ground, but by SPECULATION. 2: the experts who shout loudest about things like the oil sheiks in OPEC or the production facilities owned by companies like ExxonMobile or about oil wars (and how they are inevitable) do tend to be heavily invested in oil themselves - which means they have a vested interest in the price rising higher and higher.

On the other hand, I have been saying for years now that the ONLY thing that will wean the West off the oiltit and get them (and their multinational corporations) motivated to perfect alternatives would be HIGH PRICES. Truly high. Not $4 per gallon but more like $8.

The goal of energy, product, and fuel companies (and their shareholders) is to maximize profits, not provide us with cleaner alternatives. As people find they cannot afford the energy and products that are so reliant upon oil, the manufacturers (and their shareholders) will begin to provide us with alternatives - but the price of those alternatives will be geared to keeping the consumer locked into dependency upon their products, not freeing them from the consumer cycle.

I expect two things will begin to occur now - one, oil people will be even richer by the time we are truly off the oiltit, and two, alternatives will now appear on the market. MANY if not most of the corporations giving us those alternatives will either be owned outright by oil or have (financial) connections to the oil/car manufacturers.

And so it goes in the consumer world. Welcome to the twenty first century!

ex

The cult of local, seasonal produce will enter the mainstream, as everyone learns about food miles and a modern-day Dig for Victory grips gardeners - bad news for the farm workers overseas who provide 95 per cent of our fruit and half our vegetables.

This will actually be good news for "overseas farm workers" and their compatriots who will no longer be forced to produce many non-edible ag products for export along IMF/World Bank Structural Adjustment programs and can return to feeding themselves and their fellows. By using the word "cult," the Independent exposes its own unstated biases and delusions. The autor of the main piece does not hold such views, which can be determined by reading his work.

But the main force of the item, that Bush's wars have been a primary cause of the rising price of oil is quite damning, although I disagree that the current price of oil would be $40 if those wars hadn't been waged. My, and other's, current predictions of oil price if the wars against Iraq, Iran (economic thus far)and Afghanistan were to end along with ceasing the ongoing aim of destabilizing hydrocarbon producing South American states would be $90, a drop of 50%.

Although it has its faults, The Independent is the first large daily English language newspaper to actively recognize both Climate Change and Peak Oil. It would do well to continually hold UK politicians' feet to the fire over these very important problems.

We reaped--We will sow. Oil gluttony is a sin of ALL people!

Instead of being titled, "Oil: A Global Crisis", this article would be more insightful if it focused on "Oil: A Global Crisis for the Global Corporatist Empire".

The real problem for the global 'corporatist Empire', which totally controls the US through its facade of a two-party, 'Vichy' government (and 'Vichy' press), is that the ending of cheap oil (and the unavoidable realization that burning oil is also destroying our only environment) brings to light the truth, and resulting anger, that the corporatist Empire's long running lie --- that "a rising tide floats all boats" --- was always a boldfaced lie to the non-elite masses of all 'working class' people.

As I summarized in a letter to WSWS, this exposure of the Empire's unresolvable lie will ineluctably lead to conflicts, not of the traditional foreign oil-war variety, but through revolution against the ruling-elite of the 'corporatist Empire' in their own headquarter countries ---- most notably and firstly the US.

http://www.wsws.org/articles/2008/may2008/corr-m23.shtml

"Of course, the US CIA's own "country case book" warns that countries with a GINI coefficient of more than 0.45 in income inequality become subject to civil disorder and revolt.

By this measure, the US itself, at a GINI of 0.48, is much more vulnerable to civil disorder and revolt of the masses than are European countries, which average 0.32.

However, the more significant issue related to inequality is the ultimate elitist justification of inequality as being necessary for sufficient capital accumulation and growth.

It is beyond irony that the very analogy and allusion (illusion) that the ruling elite had settled upon in the late twentieth century as their last argument to keep the poor poor, and to justify the investment stream that can only spout from a high degree of global and US inequality; that a "rising tide will lift all boats," is now so precisely and ineluctably the harsh and contradicting reality that, in the twenty-first century, is ushering in the rising tides of global warming that will sink the elite's last justification of their sanctimonious economic inequality and eliteness—and sink the whole idea of "growth" as cancerous metastasis through negative externality dumping.

When this last illusion of "growth" requiring elite capital concentration is gone, then all justification of economic inequality is gone, too.

The recognition of abnormal and destructive growth as a being like a cancerous metastasis, and the diagnosis of elite concentration of wealth as the catalyst to that metastasis, suggests treatment by excising the casual elite.

However, a more humane medical treatment would suggest eliminating the very concept of "an elite," rather than actually eliminating the elite."

eris--first time I've seen a comment by you on a CD thread about Peak Oil. You are mistaken about speculation being the determinate of oil price. The head of NYMEX has admitted as much as I disclosed in an earlier thread. He said only 20% of future's contracts are speculative, and of those half were long and half short for negligible effect. At The Oil Drum we have discussed and continue to discuss the role of speculation in oil price, and the findings support the NYMEX chairman. What has happened is light-sweet has peaked and there's an on-going bidding war between importing countries for ever diminishing supplies of that oil grade which is driving up the price. The heavy grades are much cheaper because the market for them is saturated. Iran alone has 60Mbbls in 30 VLCCs parked in the Persian Gulf awaiting buyers, and what Saudi spare capacity exists consists of heavy, too.

As for weaning the West off oil, most OECD countries already pay more than $8 per gallon for diesel and petrol, with $9 being closer to the present norm. EU countries are 50% more efficient in their per capita oil use than the USA and Canada. Otherwise, the rest of your comment is correct, but your first paragraph contains a lot of misinformation that you need to get straight.

We have the money to fight a trillion dollar war, but not the money to invest in Americas industrys which could create new fuels and energy effiecnt technologys to have us oil independent in 10 years.
But let the oil companys line thier pockets now, becuase we all know, Thanks to George Bush, we need to get off oil dependency.

What about the millions of high tech,high paying jobs these new industrys would create.American jobs ,American Technologys, that we would sell all over the world.

Well , who the hell is running the this country, a right wing lunitic fringe that would lie to 300 million Americans and have you believe that your safety is what drives thier policys.
The same policys that have been screwing the middle east of thier natural resources for 50 years. And now we will just go in and steal it, thats worked out real well for the moral zealots running this country.

They are all treasonus fools, they have sold American security for that almighty dolar, and have been doing it for years.

They would have us belive that we are mindless sheep that without thier direction would surley perish.
Well its time to throw the bums out,save our constitution, and put America to work.

And whose pockets are being lined with these price increases? The Bush Cheney cabal whose financial holdings continue to grow while the rest of the country and the world are heading into food shortages. When do the villagers storm the castle??

PrudentBear.com's solution? Invade Venezuela:

http://www.prudentbear.com/index.php/BearsLairHome

You can bet Dick Cheney finds this solution agreeable.

Interested in the connection between 9/11 and Peak Oil? See the work of Michael Ruppert.

The cost of and related economic effects of the invasion of Iraq have weakened the dollar as international currency. The war crimes and occupation hasve also reduced Iraq's production.

Greg Palast is of the opinion that the occupation of Iraq is part of the global corporate plan to limit production and drive up prices.

http://www.democracynow.org/article.pl?sid=06/05/15/1334249

" Is the war in Iraq for oil? Yes, it's about the oil, but not for the oil. In my investigations for Armed Madhouse, I ended up with a story far more fascinating and difficult than I imagined. We didn't go in to grab the oil. Just the opposite. We went in to control the oil and make sure we didn't get it."

And despite all of the supply/demand "peak oil" theories, it now take more dollars to purchase the same barrel of oil.

Meanwhile, the MIC and Big Oil are reaping record profits while most of the world is being hurt by energy inflation.

And the Big Oil war machine is being subsidized by the same American taxpayer who is being gouged at the pump along with the rest of the world.

I'm not defending them, but the notion of Big Oil must end as they as a group only control 8-10% of global oil reserves. Indeed, by the one measure that counts the most, they are now "Little Oil." The Iraq Holocaust itself has helped to diminish Little Oil even further as no country wants them around as noted by the efforts of Equador, Peru, Venezuela, Nigeria, Angola, and others to kick them out all together or greatly cut back their involvement and profit potential. Thus it is hard to justify the Iraqi Holocaust as being waged in Little Oil's interest. Indeed, Hussein's offer noted above was made during the Clinton administration, which refused it, and proves the continuity between Clinton and Bush policiy regarding Iraq. I admire Greg Palast as an investigative reporter, but he's made many errors regarding Peak Oil, and his premise is fairly well refuted by those immersed in the topic.

When will folks storm the castle? I expect the oil/energy/economy crisis to continue escalating as we get ever closer to November and await its being linked to the Iraqi Holocaust during the debates between Obama and McCain, if not outright in the Democratic Platform. Obama certainly will be pushed by activists to articulate how he proposes to Change our way out of what is the USA's Achilles's Heel. My advice to Obama, posted elsewhere already, is for him to come clean to the country about Peak Oil, its challenge, and how it can be mitigated, as it cannot be solved since oil is finite and will eventaully become uneconomical for most usage.

Peak Oil can best be mitigated by electrifying rail-goods transport, rapidly building up rail-based public transit, and the associated electrical generating capacity comprising wind, solar-thermal, wave, tidal, and geothermal; by legislating the internal combustion engine out of existence for personal use and replacing it with electric cars; and by redirecting human and animal waste streams to replace fossil fuel produced fertilizers with Organic-NPK (one of the most hidden/forgotten aspects of Peak Oil is the unsustainable dependence of farming on what is being termed Industrial-NPK [nitrogen, phospate, potassium, I-NPK], generated soley from Natgas and rapidly depleting, mined natural feedstocks). The only feasible method of financing such a massive and absolutely needed project given our over-extended deficit-depleted financial condition is to comepletely rollback the US Empire and use the Trillion dollars in annual savings while reinstating the progressive tax structure put in place by FDR during WW2. Such an endeavor will also drasticly reduce CO2 and other greehouse gases, which also must be done. The third benefit from would be the establishment of world peace as the main driver of war--the US Empire--will cease to exist. The fourth benefit would be to promote greater equity both in the US and worldwide as the culture change needed to fuel the Great Turning envisioned by David Korten, and called paradigm change by myself and others, would gain traction as the forces of reaction and Empire are put in their place--under the collective heel of the world's people.

Is this idealistic? Yes, but it is also pragmatic. It also provides a comprehensive answer for the ~80% of Americans who want Change in the country's direction. Furthermore, it MUST happen if we want any sort of viable future for ourselves and our children. Such honesty and vision would ensure Obama's election and re-election. And it would provide a start at removing the dark stain on us as Americans responsible for our country's Imperial depredations that have gone on for far too long.

We never went to war for oil. Oil has been under control of the west consistently and is today. (Iraq, Iran, Saudi Arabia, etc. owe their present boundaries and all their various forms of governments to Western interference and secret services management.)

War (genocide) is a program of the elite to maintain and extend power. Any excuse will do.

Tell some people that they are threatened (It helps to orchestrate a 9/11 or two). Put some guns in their hands, and tell them to shoot some other people.

The killer/'soldier' (generally from a disenfranchised part of society) is rendered traumatized, the 'killed' are a strong warning to others that their fate can be changed just by the issuing of an order by someone who is not even present to note or care about the sorrows, pains, difficulties... that result.

This is a very effective way to maintain control... used for centuries... always works.

Rough 'em up... use the threat of 'war' to maintain the illusion that a certain 'order' is required for everyone's 'protection'...

If you really dissect the pathways to 'war'(genocide) and the results of it... it is hard not to perceive the model used to create the US Mafia... given their first big opportunities by whom? (BTW, the Mafia is still a much controlled arm of the FBI and works hand in hand with police departments in many cities to prey upon the weak.)

Do the research! It's fascinating! (A secret services bogey man created to justify the ravages of the secret service …). Create the problem… offer the solution! Works over and over again to confound the rights of the un-initiated.

Oh, and the oil economy itself is ruthlessly maintained for what purpose? Again, the easier to rule you!

No viable energy alternatives are allowed to fully develop until the elite can develop or devise a means to implement them that furthers their dominance!

Many many alternative technologies could have been perfected and readied for general use. In one case in which I was personally involved, a man who was designing a fuel cell was suddenly 'accidented'.

Typo: The war crimes and occupation have also reduced Iraq's production.

And: To compensate for the cost of American military/corporate aggression the Federal Reserve has drastically increased the money supply thus devaluing the dollar and creating a variety of inflationary effects in addition to higher energy costs.

If they don't stop printing "funny money" and running up the deficit with military spending, a barrel oil might end up costing $1,000 while the average person's income remains the same.

An interesting evaluation explaining how the weak dollar discourages production as well as raising prices.

http://www.mees.com/postedarticles/oped/a47n33d01.htm

" As mentioned above, drilling activities would be higher if current oil prices were associated with a stronger dollar. Therefore, dollar depreciation reduces supply."

And:

http://www.thehindubusinessline.com/2008/02/26/stories/2008022650070900.htm

" This suggests that a significant part of the sharp increase in oil prices actually reflects the dollar depreciation, rather than pure increases in the commodity's price."

"However, the fact that the change has been much more marked in dollar prices because of dollar devaluation has significance for both the present and future of the world oil market. This is because dollar devaluation can affect both world oil supply and demand."

Arguably, Big Oil and their obedient military congressional complex are destroying the American economy and affecting many other dollar based economies around the world. In the end this becomes a transfer of wealth from the many to the few along with a great deal of death and suffering. They profit and we lose.

"Peak oil" grossly underestimates the ingenuity of engineers. For the right price they will make diesel out of coal, as the Nazis did late in WWII. For the right price they will grow oil, or tear down native forests for oil. For the right price they will move mountains of tar sands and extract a barrel of high-sulphur oil at the cost of half a barrel of oil. I think someone, somehow, will drive the price of oil back down a bit.

I'm worried about the huge carbon footprints of these technologies.

Both Dr. Salameh and Gordon Brown couldn't be more wrong. Lets take care of Dr. Salameh first; I'd dearly love to see his "back up" for his statement that oil would be at $40.00 as it is simply impossible, Iraq invasion or no Iraq invasion. For an oil "consultant" he really needs to get a better grip on world oil. It wouldn't hurt either if he understood the serious decline over the last 6 years of the U.S. buck, of which only a small portion of this can attributed to the Iraq fiasco.

As for Gordon Brown, OPEC dosen't control 40% of the worlds oil, they currently PRODUCE about 40% of the world's daily production. In terms of conventional oil reserves 5 OPEC members alone in the Middle East control 66% of known reserves. That should shake old Gordon up even more. How is it a "scandal" that a circumstance of geography benefits nations other than Great Britain? He really needs to stop whining and start thinking.

The invasion of Iraq by Britain and the US has trebled the price of oil.

Wait for both countries to be taken to the I.C.C. for reparations. We can worry about having shoes for our feet rather than gas for our (nonexistant) cars. Be careful about your wishes, especially when you wish for the Endtimes.

Some very good, informative comments by karlof1, who obviously knows a lot more about this topic than me :)

So, just some circumstantial evidence to support his contention that the run-up in the price of oil is not due mainly to a speculative bubble:

"More on the real reason behind high oil prices":

http://www.globalresearch.ca/index.php?context=va&aid=9042

For eris, reading F. William Engdahl may seem like opening a window in a stale room. Bucking the trend, Mr Engdahl states that the price of oil is mostly speculation.

Mr Engdahl, however, has never been certain of his facts. Before the effects of peak oil became apparent, Engdahl was a peak oil believer, but now that high oil prices have finally arrived - prompting increasing numbers of people to question the orthodoxy of a never ending supply of cheap oil - he's done a U-turn.

Mr Engdahl now dismisses the claim that we have exhausted nearly 50% of all the oil there is - it's a myth, he says. He believes in an almost endless supply of abiotic oil:

"Richard Heinberg on Abiotic Oil":

http://globalpublicmedia.com/richard_heinberg_on_abiotic_oil

In short, abiotic oil is oil created from a source other than organic matter, and - at least as far as the abiotic believers are concerned - constitutes all of the oil we use. Simply put, oil trickles up from somewhere near the core of the earth, and what we've tapped so far is but a tiny fraction of what's available. Bad science has led geologists to look in many of the wrong places, Mr Engdahl contends. Even planetary scientists have got their theories wrong - oil can be found in abundant supply on other planets, abiotic proponents tell us.

"Energy Bulletin: Engdahl and peak oil":

http://www.energybulletin.net/34863.html

"Author and economist F. William Engdahl has just made a surprising turnabout on peak oil. He now supports the idea of the abiotic origin of petroleum. He seems to be very influenced by the thinking of some Russian scientists.

"The abiotic theory is not widely accepted, to put it mildly, and is discounted in peak oil discussions."

http://en.wikipedia.org/wiki/F._William_Engdahl

(Scroll down to "Confessions of an 'Ex' Peak Oil Believer").

overkill writes: "wait for both countries [America and Britain] to be taken to the I.C.C. for reparations. We can worry about having shoes for our feet rather than gas for our (nonexistant) cars. Be careful about your wishes, especially when you wish for the Endtimes."

America refuses to cooperate with the ICC (Internation Criminal Court). Even soldiers that commit war crimes, such as gang raping little Iraqi girls and then blowing their brains out, will be protected by the U.S.

overkill, you think Americans have a right to destroy another country and ruin the lives of millions, and then escape the consequences?

If Americans pay dearly for this invasion, for their mindless hysteria over 9/11, for their lack of interest in a war THEY started, they may think differently next time. Who knows, they may even develop a conscience and stop seeing war as the solution to every problem. But I doubt it!

The rest of the world can suffer, but not America, is that it? Only America is allowed to impoverish other nations?

I'm primarily blaming America, here, because Britain could not have invaded Iraq all by itself.

"In short, abiotic oil is oil created from a source other than organic matter, and - at least as far as the abiotic believers are concerned - constitutes all of the oil we use. Simply put, oil trickles up from somewhere near the core of the earth, and what we've tapped so far is but a tiny fraction of what's available."

Here's a dumb question:

What happens if a portion of the earth collapses due to the absence of the oil and causes a few additional dents (or two)?

(Maybe this is just a 'no brainer' like the many dented skulls directing human activities… We do have rifts and such… is more OK? How many more? Doesn't matter as long as the basic structure can still spin and keep defined an 'overall' sphericity?)

I'm just wondering if even more slight modifications could potentially induce ever so slight orbital aberrations. But maybe that is a ridiculous question.

If we can live without forests (the reason I presume we decided to burn them all to the ground, and without most other large animal species… and without any understanding of our own anatomy and what it says about the places and spaces and behaviors that were designed to support us), I guess we can probably live with an additional wobble if that were to occur.

Of course, we may never get another dent... or we may just blow off a few more mountain tops to create balance... but, what about liposuction?

It has redefined not only local configuration but also overall size.

Does that matter... or

Is it just that everyone has a place in the universe… and the earth has one too… set aside for it quite a long time ago and nothing can violate it... no need for worry... we have our orbit reserved… for perpetuity?

Or is it like human anatomy… the design works (humans are herbivores) but not the idiotic culture at the controls?

In short, abiotic oil is oil created from a source other than organic matter, and - at least as far as the abiotic believers are concerned - constitutes all of the oil we use. Simply put, oil trickles up from somewhere near the core of the earth, and what we've tapped so far is but a tiny fraction of what's available.

staying_sane_in_an_insane_world,

First I've heard of this. Personally, I think it's a far fetch and a dangerous one at that. It's just an excuse to keep on keeping on without having to change our pattern of consumption. Next they'll be saying that global warming is caused by the sun. Sheesh.

This all sounds like the last dying gasps of dinosaurs.

"I'm primarily blaming America, here, because Britain could not have invaded Iraq all by itself."

I'm primarily blaming Britain (and their elite Euro partners) because the US was their invention and they have had their hands in the worst of what it has expressed since the git.

"In the end, you will see that England was behind it."

Cyrus Samrad (Iranian CIA and MI6 collaborator) speaking of the changes that brought Khomeini to power in the late seventies in Iran.

four US senators warned Saudi Arabia that if it did not step up the flow, the US might withdraw its military support

Leave it to the US to make the first reactionary threat in the escalation of a crisis of its own making. Notice that much of the world is uninvolved because many countries planned for the energy crisis. Not the US. It thrives on crises - it needs pretexts - it needs the construction/destruction cycle.

"Their reaction to the escalation of oil prices is to threaten the leading supplier, never mind that they cannot follow through with the threat as other militarists will quickly fill the vacuum left by the US of Arms and Oil."

Now that is a dumb comment!

Which military agency would that be? There are NO independent military agencies and there have not been any for a very long time! Sheesh!

"Their reaction to the escalation of oil prices is to threaten the leading supplier, never mind that they cannot follow through with the threat as other militarists will quickly fill the vacuum left by the US of Arms and Oil."

When the Americans were 'forced' to leave Iran, their German counterparts moved in. What's the dif? US military runs the German military... but, no one makes the connection.

Same deal with the Chinese, Russians, Japanese... In fact, some top secret US military supplies are made in China so Americans will not know about the technologies.

Get real people!

Many governments around the world are busy doing the people's work, and that is to prepare their energy infrastructures to make the transition away from fossil/nuke fuels as smooth as possible for their citizens. But not the USA and its client states. US citizens are in for a screaming rollercoaster ride in which they are likely to lose their wallets. But oh the thrill of capitalist subjugation!! God Bless the United States of America!!

So Bush, by causing oil prices to go through the ceiling, is providing a major impetus to switch to alternative energy sources and methods to reduce demand.

Bush the environmentalist. What a concept.

Staying_sane, abiotic oil is a joke. Just ask the abiotic brethern one simple question - U.S. oil production peaked at 11.3 million barrels per day in 1970 so why is it that, after bringing the North Slope on line as well as increased attention in the Gulf of Mexico, American oil production is about 7.5 million barrels per day and in continual decline? So much for abiotic oil bullsh*t.

karlof1, your energy policy ideas are good but it has to happen without the capitalists' involvement. We aren't going to accept a "change of our chains". We're going to shed the chains by embracing not just environmentally sustainable food/fuel, but also socially sustainable food/fuel, so the means of production have to shift out of elite hands and into the people's hands, a major victory for the people in the class war. Start with a model of small-scale independent agricultural/industrial production. At the county level, government policies will promote this model.

25 MPG average and the US Gov stops or allows it to stay low so we use more oil and it gives the USA a reason to invade another oil rich country.
If Iraq had not been attacked oil would be 40$ a barrel.
OPEC didn't attack IRAQ or maybe IRAN the USA did. The problem is the USA not OPEC as I feel and others have said Saudi is at its max production now.

Humanity must change its reliance on Oil to run our cars.

What OPEC is doing with high oil price has Genocidal affect in some 3rd world countries.
regardless, dependency on Oil is bad for the environment and to the Economy.

Down with OPEC. Big Oil companies are the ones who killed the Electric Car.

Dr. Robert Zubrin on "Energy Victory"
http://www.youtube.com/watch?v=NLRuGUPkyh4

"Shopping
Effectively, almost everything is partially made of oil, and so is going to get more expensive. About 10 calories of oil are burned to produce each calorie of food in the US, and farming a single cow and getting it to market uses as much as driving from New York to Los Angeles. Some 630g of fuel is used to produce every gram of microchips."

My vote will go to the one who promotes two Manhattan projects: One. Re-Newable Energy. We have a limitless star as a neighbor.

Two. A massive Jobs program to build real Mass Transit. And save the oil for Science and Technology.

The weaning off of plastics is going to be ugly.

Thanks for the replies to my post. This is for you all to contemplate and is related to a come-on at the Obama webisite for folks to make specific policy proposals. What follows is the full text of my policy proposal to Obama that builds on the sketch above. I intend to submit it for comments elsewhere, too. And no, I'm not naive about how the US system works; rather, I recognize that for any Change to occur, it must happen within the system, which may be unfortunate, but realistic.

Actually, this proposal is holistic and goes beyond energy and environmental issues to include the economy, foreign, defense, commerce, and other related policies. But the story begins with the fact of Peak Oil, which is the fundamental driver of crude oil and transport fuel price increases.

A popular song from the 1970s stated "There's only so much oil in the ground," a geological fact recognized by M. King Hubbard, who predicted in 1956 that the peak of US oil extraction would occur in the very early 1970s. His same predictive method is used by a number of petroleum geologists, some of whom have formed the global organization Association for the Study of Peak Oil and Natural Gas, or ASPO, which has many national affiliates; ASPO-USA is ours. We are all employed in what we call Peak Oil outreach education in the hope of enlightening policy makers. The US Congress has its own Peak Oil Caucus, which has attempted to inform its congressional colleagues, but has mostly been ignored until the recent very sharp increases in oil and transport fuel prices. Its scientific foundation has convinced us of the reality of Peak Oil, and we are very concerned about its potential consequences, which are very far reaching as crude oil underlies the very structure of our economy and lifestyle.

We have looked at Senator Obama's energy proposals and find them wanting in several respects. First and most important is the seeming lack of understanding of the nature of Peak Oil and its very real and quite likely consequences. Unlike most other OECD countries, especially those in Western Europe, the US economy cannot structurally adapt to high transport costs, a fact already becoming well known at fuel prices still 50% less than those of the EU, and E85 derived from corn is not any sort of answer; nor is slowly increasing CAFE standards. To his credit, Obama notes how much money is moved from discretionary spending to accommodate high fuel prices and their related inflationary push; what he doesn't seem to appreciate is how fragile the current service economy--which is over 70% of the overall US economy--is to this transfer of monies away from it, which is already being confirmed by the bankruptcy of large retailers and the closing of stores by those companies wishing to remain solvent. Perhaps the most visible service industry in distress is air travel, with jet fuel costs now an average of $3.90 gallon in the USA and certain to climb higher, and with air service being cutoff from an increasing number of cities. With an already soft service sector and offshoring of still more industrial jobs ongoing, newly unemployed workers have very few options, which will only worsen as the effects of Peak Oil continue to deepen as we move towards November. For those with jobs yet unable to afford the rapidly climbing cost of fuel, there are too few options as public transit nationwide--although primarily a state and local matter--is woefully inadequate. Ultimately, this hurts both public and private revenues gained from taxes and incomes, and will result in a slow regression of services; indeed, some very important local services like police, fire and ambulance, not to mention school busing and public transport, are being curtailed or having funds moved from other services to pay for their rising expenses. These economic effects have a positive feedback component similar to that operating in the climate system that causes the effects to worsen in an accelerating manner as time goes forward. I have only presented a few of the many ill effects of Peak Oil on local, state and federal economies, as well as those of businesses and families. Given the very weak nature of the country's financial position, Peak Oil can easily lead to a very deep recession and rather rapidly as the cascade of business failures accelerates. Peak Oil represents a critical crisis, and one that cannot be solved, only mitigated because there's only so much oil in the ground.

Fortunately, there's an opportunity within the crisis that can be exploited to advance Obama's mantra of Change. First and most importantly, Obama must admit the hard truth about Peak Oil to the American people, around 80% of whom desire or sense the need for a change in direction on a whole course of issues. He should then link Peak Oil to the related crisis of Climate Change by saying that the methods of mitigating one will work for the other. A number of initiatives must be undertaken to mitigate both that can provide the fuel to restart our economy while making the mandatory structural changes needed to keep us out of a deep recession: First, internal combustion engines must be rendered obsolete through legislation and replaced by hybrid electric drive trains and electric motors in all but a few applications; Second, to make this a reality we must rapidly construct new electrical generating and distribution systems and infrastructure consisting of wind, electric and thermal solar, wave, tidal, and geothermal that can become independent of fossil fuels to the greatest extent possible (Energy companies can use their massive profits from Peak Oil to become major actors in this endeavor as T. Boone Pickens has), and wean ourselves from fossil fuel generated electricity as the new generating capacity comes online; Third, railroads must become 100% electrified; Fourth, a massive building program of electrified public mass transit and related transit oriented urban planning must commence; Fifth, a national program to redirect human and animal wastes to use as organic farming nutrients must commence (One of the hidden problems of Peak Oil is of the huge dependence of our industrial farming structure on fossil fuels for which 10 calories are used for the creation of 1 food calorie, and includes the production of the essential NPK--nitrogen, phosphorus, potassium--nutrients for plant growth); Sixth, subsidies and mandates for corn-based ethanol must be repealed; and Seventh, all subsidies to fossil fuel extraction businesses must be repealed.

To finance this massive undertaking, it will become necessary to rollback the whole of the overseas US Empire, including US forces in Iraq and at sea in the Persian Gulf; deeply cutting the Defense Department budget and personnel to a level consistent with only defending our borders without walls; drastic curtailing of all related spending at the various departments, such as State, Commerce, and Treasury, used to project US hegemony; and elimination of the Department of Homeland Security. Furthermore, as a sign to the people of the United States and the world, the repealing of the so-called patriot act and the repealing of hegemonic so-called Free Trade treaties/acts must also be repealed/withdrawn from. The estimated savings from such actions are about $1.2 Trillion annually, more than enough to finance such a series of programs and provide relief to those negatively effected by Peak Oil and Climate Change. Furthermore, the tax code must be revised to the levels employed by FDR during WW2 in order to start the return to a more equitable society, to finance Medicare For All and to meet the future requirements for Social Security for which we must have a solvent US government, which is currently not the case.

I predict that such a comprehensive set of proposals at the foundation for a program for Change will be met with great approval by the American people, while it will be smeared and slimed on by the forces of reaction and their allies in the public realm, and currently in office as represented by Senator McCain in the upcoming presidential election. The reality is that the age of the US Empire is at an end, brought down by its immorality and gross unjustness, not to mention the financial mismanagement and massive inequities it's spawned both here and abroad. The American mythos has at its core Truth, Justice, Liberty for All, and a God given Exceptionalism that have all been shown to be false before ourselves and the world by the actions of the Federal government since the end of World War Two, and especially by the actions of the past two presidents who both engaged in illegal wars, which I know to be true as an historian of our US Empire. All of the above are facts driving the American people's desire/demand for change, even if they don't realize the stimuli. Peak Oil is a reality and its affects are already occurring to the detriment of ourselves and others globally. In the best tradition of the American Mythos, we can confront the problem pragmatically in a head-on manner, or we can do nothing and reap the reward of an ongoing war for oil, the threat of another, and the very real dark consequences of such outrageous behavior. Obama uses the word Change somewhat loosely; what is proposed is real Change and an opportunity for a real Change in leadership.

the high price of oil is a weak US buck, and 60% of the price of oil is speculation. Blam Bush more than Saudi

It's very discouraging to think that the present crisis was entirely foreseeable and was predicted by many people (myself included). For almost a decade the imminence of the oil peak has been readily available information and almost unavoidable to a moderately prolific reader. Once you understand that supply is going to top off and then start declining, while demand is only increasing, everything else follows as clearly as night follows day. Exactly when has always been a matter of debate, but now nobody can deny it's really happening.

Whoever the next president is, he/she will have to deal with peak oil. The global oil market isn't going to reverse course and the enormity of it will force whomever is president to deal with it.

Question is: Who would we prefer to deal with it - Obama, Clinton, or McCain? Those are our choices. Who seems the most inclined to prescribe change?

iammyself. Abiotic is for real. The only question is "how much". It could be more related to the fact that it is constantly being geneerated from the carbon in the earth along with the temp & pressure. Ron.

Question is: Who would we prefer to deal with it - Obama, Clinton, or McCain? Those are our choices. Who seems the most inclined to prescribe change?

Answer: None of them.

One of our greatest challenges will be how to power our automobiles as oil runs out and pollution dangers increase. Cars that run on compressed air is a technology now being commercially developed in France and other places. Will we Americans embrace such a change while our present special interests dominate?

For about $2 you can go 200 miles...

http://www.youtube.com/watch?v=ztFDqcu8oJ4

Or from LA to NY on one tank of gas in a hybrid version...

http://www.youtube.com/watch?v=D-A3XHFT5qc&feature=related
http://www.youtube.com/watch?v=Dq8aZVLpf-c&feature=related

With our current mentality of our nelected officials amd rthe public apathey ,we can never alleviate our over consumption. EXAMPLE-- the idiotic proposed elimination of the summer gas tax which only contradicts logic.

I can't take articles like this seriously when they don't even mention Hubbart's Peak. 'Peak oil' is presented as ambiguous in one paragraph when the high level analysis that I've read place us right in the middle of it, right now. Oil prices can only go up, and the fact they've quadrupled in the past few years means we are peaking. Sure some of it speculative and based on a weak dollar, but oil has at least doubled in price over the entire world. There's even been demand destruction in Africa because it's now too expensive for some local economies, a clear sign of peaking.

With gas selling for a record $4-plus a gallon across the Puget Sound region, some Memorial Day weekend travelers got a lot less than they paid for and a lot more trouble than they imagined when they filled up Sunday.

Two Safeway gas stations were shut down Sunday evening after contaminated gas filled at least nine vehicles, causing them to break down on a day of record gas prices statewide.

The Safeway gas station in Maple Valley had gas mixed with water, and company spokeswoman Cherie Myers said the contaminated fuel came about 5 p.m. from a Shell refinery that supplies the gas stations.

(SeattlePI)

At what price do we enter an economic depression to rival that of the dirty 30s?

And after that dreary comment, some hope. When we put our national energy and will into a project, we do amazing things. The Manhattan Project took 2.5 years to develop the bomb, we made it to the moon within ten years of deciding to do so, we geared up our factories for WW II in less than a year.

So, when do we start working towards safe, sustainable energy?

Hey folks, I challenge all of you to call your senators, etc. and demand that we wean ourselves from oil?

Oops. Typo of Hubbert's name. Ouch. Nice to see that Judah gets it. Now where are the rest of the Deciples? No commentary on my policy proposal. Tsk, tsk, such a pity. If abiotic oil even exists, it certainly doesn't operate at any needed flow rate level to mitigate the rate of decline, which is what the damn issue is all about.

Ethanol is likely to cause all sorts of problems due to its corrosive nature. It's capable of rotting out gas tanks, clogging fuel lines, filters and EFI injectors. There are reports of it melting the resins in fiberglass gas tanks on boats, which means someone is eventually going to die because the engine dies at sea due to fouling of the fuel system. We already know you need to burn more E10 to go the same distance, which means more CO2 emissions. Check out this site for the real monetary cost of E85, which is more than a dollar over its pump price.

sLiMsHaDy needs to understand that no matter how much s/he dislikes it, one of those choices is going to be the next president, and iammyself seems to favor Obama given the question's phrasing. Clearly, both McCain and Clinton will further the policies of Bill Clinton, which were in turn furthered by Bush, which leaves Obama as the change agent. And Change will happen one way or the other because the reality of Peak Oil will force it. Would you rather be in charge of the change or have the change in charge of you?

rtdrury--Your idea for change at the county level is fine, but we really need a sea change in behavior nationaly and soon, and the only way to affect that change is for the president to lead in an honest and forceful manner. The facts and realistic outcomes now occurring of Peak Oil speak for themselves; they cannot be denied as Bush tried to do earlier this year by feigning ignorance of $4 gas. We really cannot wait for the policy proposals I made to be implemented as time is certainly an issue. We have a Cache-22 here as people must change their behavior, but those behavioral changes will greatly disrupt the national socio-economic fabric thus damaging the people making change. IMO, this is why Change must be directed from the federal level.

The propaganda machine of the neo-malthusian population busting elite is in overdrive, spewing out myths that obscure the truth.

Please stop confusing production with the amount of oil available. The world has 1.3 trillion barrels of oil proven reserves, and another 1.7 trillion in probable and estimated new discoveries. Only 35 years ago we had 650 billion in proven reserves, and despite our drastic increase in consumption, this has doubled today. World oil consumption is 33 billion barrels per year, we have another 40 years of oil left, even if consumption doubles, based on proven and probable, and expected discoveries.

Production is dicated by how many wells you drill. Any peak could be man made, as well as due to we are running out of oil and new drilling is unproductive. You must consider the man made option. Someone once said, "The beginning of wisdom is found in doubting , by doubting we come to the question, and by seeking we come to the truth" Acceptance without question is consent. We seem to have become a nation of consenters, as Scott Ritter said.

The production that determines our supply, that of actually removing the oil from the wells, is controlled by cartels of Big Oil and Opec. Limiting production results in higher prices. Is there reason to doubt? Of course.
I have doubted, and I have searched for the truth. I may not have found the complete truth, but what I have found has convinced me this crisis is mainly man-made.

What follows is rather long, so feel free to scroll down to the next post.

We have this pervasive Peak Oil theory, that is said to be responsible for oil rising from 20-30 dollars a barrel over the last 8 years to 135 dollars a barrel, more than doubling in the last year. Coincidentally, the initial rise began once Big Oil Bush Inc took over the White House, and the last jump has followed the opening of the Dubai Mercantile Exchange in June 1 2007 (more on this below).

Yet once oil hit 60 dollars a barrel in 2005, oil from tar sands in Canada, became economically viable, and they have 175 billion barrels of it. All of it will come to the US as Canada exports 99% of their oil exports to us. FYI, we use 7 billion barrels of oil per year (the Pentagon uses 100 million barrels per year). Canadas oil sands are 20 years of US supply, although it will only provide is with 1 billion barrels per year by 2015 (15% of our current consumption) due to environmental concerns. In global terms, it is a 5 year supply. Information came from a CRS report to Congress last year.

Ask yourself though. How do we know how much Oil there is? This information comes from those who control the Oil. Right. Who profits from high oil prices? Who did Hubbert work for? Shell. Big Oil. If they say we are at peak, and only 40 years supply by their own figures, it might be more, we have to take them at their word. Since when do we trust Big Oil? Everyone in the oil industry earns their living from Big Oil, and those in the USGS go to work for Big Oil when they retire from government.

Consider that if the proven reserves can meet current market demand, and I see no shortages, and a low figure for proven reserves can justify higher prices, what is the motive to increase the number, if the effect would be to lower prices?. OPEC nations, which provide 40% of oil production, are motivated to fudge the numbers higher to get a higher production quota. But in the US, due to tax reasons, it is best the keep the numbers on the low side. For this reason the US has among the highest ratios of probable reserves to proven reserves. Probable becomes proven only when they drill new wells and start to extract it.

It is true is that the gap between production capacity and demand is shrinking. But this is not due to a shortage in oil in the ground. The thing is, increasing production and supplies at current levels of reserves requires investment in production capacity, storage capacity and refinery capacity. That investment has been minimal. The answer why is clear. Higher prices = more profits. Lower supplies = higher prices and higher profits.

Oil within a countries borders is controlled by national oil companies in most countries. Most of the national oil companies have contracts with Big Oil to assist in the exploration (discovery) and production (extraction). Big Oil also controls much of the distribution and subsequent refining. Depending on how much Big Oil is required to do for the nations having the oil, this dicates the price Big Oil has to pay to the nations having the Oil. It is rarely the market price.

Big Oil does not pay market price to Nigeria or even Saudi Arabia. In fact, the reason most of the oil tankers are registered in places like Panama are to hide the profits. Say company "X" is set up and controlled by Big Oil in Panama to buy oil from Nigeria at 60 dollars a barrel, and then sells it to itself in the US at 120 dollars, then 60 dollars of profit, tax free, is locked in in Panama. Big Oil will take the profit made by the refinery that it controls in the US, and that is what gets reported. What they report sounds like a lot, but as indicated, most of the profit from imported oil is off-shore and hidden. Thats why Big Oil prefers imported oil to oil produced in the USA (Michael Hudson has a great article on this, google it if interested). Why drill new wells in the US and get taxed on the profits?

So Big Oil would like you to think they are dependent on the nations having the largest reserves, and most people blame the Saudis, since they control OPEC and OPEC has 40% of the oil production. In fact, these nations are utterly dependent on Big Oil, Saudi perhaps less so than most. But even if they have the equipment and refineries, and their own tankers, much of the equipment for replacement and new capacity and the parts required for oil production and refineries are controlled by companies controlled by Big Oil.
So lets look at proven reserves, production capacity and refinery capacity. Increasing reserves, and increasing production capacity to remove these reserves and increasing refinery capacity to refine it, and increasing storage capacity to hold increased production costs money.

Demand we know is relatively inelastic. The world is dependent on oil. It's essentially a monopoly. There are not a lot of options. Natural gas is also controlled by Big Oil, and the environmental scare mongers have eliminated the nuclear option, and Big Oil now controls uranium supplies now anyways.

So you have a rather inelastic demand and a monopoly or cartel increasing prices by controlling the reported amount of proven reserves, and the supply of oil relative to demand is reduced by limiting the growth of production and refinery capacity. The nations and consumers will pay what it needs and can afford. If they can't afford it, they have to borrow it (international bankers, and also the World bank/IMF are happy). They may use less of it, say 10% less in a recession, but if the price increases 50%, so what, Big Oil still make more money selling less. Oil is essential to grow food, No oil, no food. They have us over a barrel, no pun intended.

Spending money to increase proven reserves and production/refinery/storage capacity would increase supplies relative to demand. Prices would go down, and not up. Who wants to invest in something which will devalue your main product? Monopolies and cartels do not do that. That only happens in competitive markets when you want to eliminate your competitors by driving prices down.

Thats how Big Oil became Big Oil. Little Oil has been crushed, extinct as the dinosaur, since Big Oil kept the price of Oil low for many years to eliminate competition from nuclear power and the smaller Oil companies.

Who profits from not investing in finding new proven reserves, or proving probable reserves as proven, and in not investing in the added capacity to extract and refine the oil? This is clear. Big Oil, and the nations having Oil are willing to go along for the ride.

Also, assuming oil is a finite resource as Peak Oil says, although Thomas Gold argued it is a long way away (he conveniently passed away in 2004, he was old so no conpsiracy here), and country B will run out of oil in 25 years at the current production rate. Would it make sense for this country to double it's production rate, by investing its own money to do so, which would help keep oil at 60 dollars a barrel, and then run out of oil in 12-13 years. Or would it make more sense to keep production rates constant, supplies become tight, and then sell it's remaining oil at whatever price the market will bear, be it 130 dollars, or even 200 dollars a barrel. If I am country B, I take the last option. Much more profitable. Of course, it can only take this option if Big Oil is ok with it.

So blame the oil producing nations all you want, or the fact that oil will run out some day in the future, but the current price of oil is dictated by Big Oil, and Big Oil would only dare to jack up the price of oil from 20 dollars to 130 dollars with our governments permission. Bush clearly gave it.

In fact, last June oil was at 60 dollars a barrel. Imagine if Bush whispered in their ears "How about we nationalize you?". Oil would be back to 60 dollars a barrel in a jiffy. If Saudi Arabia protested, he could whisper to the House of Saud, "Osama would love to be King, he is our man, maybe time for regime change". Instead, Bush whispers to Big Oil, "ain't this great, how about going for 200 dollars a barrel, and really do some damage".

So don't be naive. Oil is at 135 dollars (keeps going up as I type) a barrel because Bush and his Big Oil buddies are making out like bandits, and it is a great weapon for the elite to be used against the oil consuming nations resisting globalization and free trade, and it keeps up demand for the USD since dollars are needed to buy oil. And our international financiers are doing pretty well by it also.

Consider also, for 50 years, we have known we were running out of oil.
The elite tell us we have free competitive markets that regulate themselves, and capitalists quest for profit benefits the world, with CEO's having hearts so pure that conspiracy never enters their socially responsible minds, as they already have big fat paychecks and bonuses and are wealthy, healthy and wise.

The Big Oil Prophet Hubbert warned us of the dangers of Peak Oil 50 years ago. We are running out of oil he says. Oh My we say!. And this was 50 years ago.

Then we had the Oil Shocks in the 70's, orchestrated by the Big Bad Oil Sheiks running OPEC, while Big Oil pumped, shipped and refined their Oil. Again came the cry, we are running out of Oil!. Prices skyrocket. Oh My we say!

At that time, as the dollar was taking a beating since scrapping Bretton Woods. OPEC Sheiks came to the rescue, and insisted on USD for their oil.
Then we had TMI followed by Chernobyl, and our last great hope, nuclear power was taken off the table as too dangerous. Oh Woe is to me, we say!

But Oil then became cheap again after Volcker killed inflation, and killed the economy, and people were happy at the pump despite the fact their jobs were being moved to China while immigration fueled population growth. If people were to become poorer, business needed more of them to grow and consume, so we needed immigration to add more consumers and more debtors to charge excess usury.

We also have had the Global Warming prophets begging us, please save our Goddess, Mother Earth, and reduce consumption of the dirty black gold by the virus called human beings that pollute the earth. Oh My, we say, take away my SUV and depopulate us (while pointing the finger at someone else)!

And yet, in this world of ours, where the neoliberal economics of the Chicago Boys say what's good business is good for the people, Big Business has no Plan B. Nobody seems to have any ideas what to do as a solution except use the oil that's running out to grow corn and convert the corn to ethanol. That must be good for business (Big Agri-business), and the people, not so much. LOL!

We all know the Pentagon runs their military machine on oil, and is in fact the single biggest consumer in the US, and consumes more oil than a number of countries. And in this day of War and National Security hysteria, we will leave the solution to business and the markets despite the obvious national security ramifications of being without oil. LOL!

In WW II, confronted with the possibilty that Hitler would develope the bomb before we did, we undertook a Manhattan Project, and threw all of our available resources into beating them to the punch. Yet today, we are told we are in a long War with Terrorists hiding in Caves, and all we can do is grab Iraq and make it so insecure the oil can not be pumped? Sorry, I forgot in this world we are worried about WMD, it was not the Oil, despite Iraq might have even more of it than Saudi Arabia. So strike that. LOL!

We have no Plan B. No Capitalists taking advantage of the great opportunity a new fuel source would bring (spare me the solar and wind options, both need backups dependent on Oil). No Governments getting together and pooling resources and working together with the energy giants and scientists to find an alternative to a resource that not only gets you to work but which every company relies on and which is essential to feed our world, including our military machine, despite it's imminent depletion? LOL!

Such a lovely world , free of conspiracy, just a bunch of simple minded capitalists who know not what lies ahead of them, and require a trigger of 4 dollars a gallon or having no oil, before recognizing the dangers of not having a Plan B before the search for alternatives, and say, in the meantime, some of you are going to have to starve. Oh My, we say!

This is the world they tell you that you live in. In my world, having the same spacial and time coordinates as you, whenever there is a crime, I ask the following. Who has the means, opportunity, and motive to commit the crime. If someone seems to have become richer as a result of the crime (excessive profits), was at the crime scene (oil industry), and knows the victims (consumers they sell to) and had access to the weapon (control of the oil supply), then those persons become persons of interest, if not suspects. If they get away with it, and the MSM ignores it, and government shrugs it's shoulders, then I figure they are accomplices.

Those defending the conspirators, may be part of the conspiracy, or also profit from the crime indirectly, or are simply mistaken. Who knows.

Ok, lets go back to numbers, since I know most have fallen for the Orwellian babble not to believe in conspiracies. Remember who told you not to listen to conspiracies after 9/11, it was Bush. There were no conspiracy theories at the time, virtually everyone including myself, believed in the story we were told. Curious.

Cartels have a tendency to conspiracy. Having worked in one at a high level I know. They meet in secret and discuss what they can do to improve their industries bottom line and prevent too much competition that might hurt business if it escalated to price wars. They fear only government regulations that are enforced. Every year, thousands of people are convicted on charges of conspiracy to commit one crime or another. Yet conspiracies are discounted when directed at Big Banking, Big Oil, and government. OPEC is a cartel. Big Oil is a cartel. Both benefit from the high prices.

But how does the price of oil get driven. What are the mechanics. Interesting article here by William Engdahl which was a follow up to a previously linked article.

http://www.globalresearch.ca/index.php?context=va&aid=9042

"As detailed in an earlier article, a conservative calculation is that at least 60% of today's $128 per barrel price of crude oil comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York NYMEX futures exchanges and uncontrolled inter-bank or Over-The-Counter trading to avoid scrutiny. US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex, by having to pay only 6% of the value of the contract. At today's price of $128 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme "leverage" of 16 to 1 helps drive prices to wildly unrealistic levels and offset bank losses in sub-prime and other disasters at the expense of the overall population. "

FYI, the Dubai Mercantile Exchange (DMEX) was set up by NYMEX on June 1, 2007, when oil was 60 dollars a barrel. Today it is at 135 dollars a barrel, as the world heads into a recession which projects to decrease demand.

Consider this.

http://uk.reuters.com/article/oilRpt/idUKL2232289720080522

"Oil prices at a record high above $135 a barrel are rising due to market sentiment rather than a shortage of supply, Royal Dutch Shell's chief executive said on Thursday.

"What we say and what we see is there are no physical shortages," Shell's Jeroen van der Veer told Reuters television. He runs the world's second-largest fully publicly traded oil firm by market value.

"There are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock. This has to do with psychology in the markets and you cannot forecast psychology".

Thats a Big Oil insider talking, and this implies financial speculators are manipulating the prices, and creating an Oil price bubble.

The following is from a William Engdahl article where he concluded 60% of oil price is determined by speculation. It was linked to in an earlier comment.

"A June 2006 US Senate Permanent Subcommittee on Investigations report on "The Role of Market Speculation in rising oil and gas prices," noted, "there is substantial evidence supporting the conclusion that the large amount of speculation in the current market has significantly increased prices."

snip

The report pointed out that the Commodity Futures Trading Commission, a financial futures regulator, had been mandated by Congress to ensure that prices on the futures market reflect the laws of supply and demand rather than manipulative practices or excessive speculation. The US Commodity Exchange Act (CEA) states, "Excessive speculation in any commodity under contracts of sale of such commodity for future delivery . . . causing sudden or unreasonable fluctuations or unwarranted changes in the price of such commodity, is an undue and unnecessary burden on interstate commerce in such commodity."

Further, the CEA directs the CFTC to establish such trading limits "as the Commission finds are necessary to diminish, eliminate, or prevent such burden." Where is the CFTC now that we need such limits?
snip

Enron has the last laugh. As that US Senate report noted:

"Until recently, US energy futures were traded exclusively on regulated exchanges within the United States, like the NYMEX, which are subject to extensive oversight by the CFTC, including ongoing monitoring to detect and prevent price manipulation or fraud. In recent years, however, there has been a tremendous growth in the trading of contracts that look and are structured just like futures contracts, but which are traded on unregulated OTC electronic markets. Because of their similarity to futures contracts they are often called "futures look-alikes."

The only practical difference between futures look-alike contracts and futures contracts is that the look-alikes are traded in unregulated markets whereas futures are traded on regulated exchanges. The trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress.

The impact on market oversight has been substantial. NYMEX traders, for example, are required to keep records of all trades and report large trades to the CFTC. These Large Trader Reports, together with daily trading data providing price and volume information, are the CFTC's primary tools to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. CFTC Chairman Reuben Jeffrey recently stated: "The Commission's Large Trader information system is one of the cornerstones of our surveillance program and enables detection of concentrated and coordinated positions that might be used by one or more traders to attempt manipulation."

In contrast to trades conducted on the NYMEX, traders on unregulated OTC electronic exchanges are not required to keep records or file Large Trader Reports with the CFTC, and these trades are exempt from routine CFTC oversight. In contrast to trades conducted on regulated futures exchanges, there is no limit on the number of contracts a speculator may hold on an unregulated OTC electronic exchange, no monitoring of trading by the exchange itself, and no reporting of the amount of outstanding contracts ("open interest") at the end of each day."

Then, apparently to make sure the way was opened really wide to potential market oil price manipulation, in January 2006, the Bush Administration's CFTC permitted the Intercontinental Exchange (ICE), the leading operator of electronic energy exchanges, to use its trading terminals in the United States for the trading of US crude oil futures on the ICE futures exchange in London called "ICE Futures."

Previously, the ICE Futures exchange in London had traded only in European energy commodities Brent crude oil and United Kingdom natural gas. As a United Kingdom futures market, the ICE Futures exchange is regulated solely by the UK Financial Services Authority. In 1999, the London exchange obtained the CFTC's permission to install computer terminals in the United States to permit traders in New York and other US cities to trade European energy commodities through the ICE exchange.

Then, in January 2006, ICE Futures in London began trading a futures contract for West Texas Intermediate (WTI) crude oil, a type of crude oil that is produced and delivered in the United States. ICE Futures also notified the CFTC that it would be permitting traders in the United States to use ICE terminals in the United States to trade its new WTI contract on the ICE Futures London exchange. ICE Futures as well allowed traders in the United States to trade US gasoline and heating oil futures on the ICE Futures exchange in London.

Despite the use by US traders of trading terminals within the United States to trade US oil, gasoline, and heating oil futures contracts, the CFTC has until today refused to assert any jurisdiction over the trading of these contracts.

Persons within the United States seeking to trade key US energy commodities US crude oil, gasoline, and heating oil futures are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London instead of the NYMEX in New York.
Is that not elegant? The US Government energy futures regulator, CFTC opened the way to the present unregulated and highly opaque oil futures speculation. It may just be coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is a former chairman of the US CFTC."

I don't know about you, but I think this shows Government and International Finance behind the conspiracy with Big Oil. Behind the curtain and directing them are the psychopathic neo-malthusian elite promoting Globalization and a NWO.

FYI, Thomas Gold had a theory on oil developed in 1977, which Russia also had believed this to their benefit. Thomas Gold was a respected scientist that even NASA listened to, and he wrote a book in 1998 called the Deep Hot Biosphere outlining his theory that oil are not fossil fuels in limited supply as Big Oil would have you believe, but upwellings from the deep hot biosphere where organisms that dwell below and feed on methane, using oxygen and sulfur bound in porous rocks to metabolize the carbon in the methane. They are brought to the surface with the oil. Their presence in oil led us to believe oil must have come from life that has decayed on the surface and then subsided.

"The eleven major and one giant oil and gas fields here described have been discovered in a region which had, forty years ago, been condemned as possessing no potential for petroleum production. The exploration for these fie lds was conducted entirely according to the perspective of the modern Russian-Ukrainian theory of abyssal, abiotic petroleum origins. The drilling which resulted in these discoveries was extended purposely deep into the crystalline basement rock, and it is in that basement where the greatest part of the reserves exist. These reserves amount to at least 8,200M metric tons of recoverable oil and 100B cubic meters of recoverable gas, and are thereby comparable to those of the North Slope of Alaska. It is conservatively estimated that, when developed, these fields will provide approximately thirty percent of the energy needs of the industrial nation of Ukraine."

Professor Vladilen A. Krayushkin, Chairman of the Department of Petroleum Exploration, Institute of Geological Sciences, Ukrainian Academy of Sciences, Kiev, and leader of the project for the exploration of the northern flank of the Dni eper-Donets Basin, at the VII-th International Symposium on the Observation of the Continental Crust Through Drilling, Santa Fe, New Mexico, 1994.

Natural oil seepage estimates into oceans runs from 3 million barrels per year. Consider that if this number has been constant for just the past 1 million years, let alone tens of million of years, this means that in only 1 million years, 3 trillion barrels of oil have seeped into the ocean. More oil than consumed by man, and equal to the oil said to remain for our consumption. So much for man being the oil hog and polluter, nature pollutes itself, perhaps for a good reason.

But what about generation. We know oil has been depleted by seepage, as well as mans consumption. But should not oil be generated as a continuous process. It is said to form from dead stuff in prehistoric times, but over time more and more dead stuff have accumulated and must be turning into oil. Yet is is extremely difficult to find anything about the rate of oil formation on the internet.

Now we have the Bakken Formation

http://www.nd.gov/ndic/ic-press/bakken-form-06.pdf

Dr. Leigh Price who worked for the USGS had sent out a paper for peer review in 1999, estimating the oil in Bakken, which runs from ND to Montana into SE Saskatchewan , had as much as 200-400 billion barrels of oil, based on a 50% recovery rate. He died in 2000 while exercising before the peer review was completed, so his paper went unpublished, but was seen by some of his peers who were reviewing it. Requests from USGS to release it are denied, since they argue it did not complete the peer review process, and this is againat policy to release such studies. They have just last month estimated the Bakken Formation as having only 3.5 billion of recoverable oil. This is 1/2 year consumption, as opposed to 40 years if Leigh Price was correct. I don't really want to believe in conspiracies, but unlike Thomas Gold, he was in his 50's, and from all accounts, in great shape, and the price of oil has increased from 20 to 140 dollars a barrel since his death. Maybe coincidence.

karlof1- Oh, I understand that one of the three will take over, baring any bush surprise to circumvent the (s)election. I just don't see a reason to believe that any of them have intentions to change the general direction that we are being steered toward.

I do find your observations and policy proposals notable and worthy of attention. But,to think that an Obamastration (or any administration put forward by the (R)/(D)) is going to do anything to upset the economic order currently in place is wishful thinking.

Enough people will have to make the decision to change by figuring out what they can do to operate outside of the current model so as to affect the bottom line ($$$) of the current lord masters before they will make any moves.
I would further state that getting any of these three stooges to push for the rearranging of government priories (as in world cops, "free trade", taxation policies for corporations, etc) will not be on the table as they DON'T CARE ABOUT US.