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German Military Report: Peak Oil Could Lead to Collapse of Democracy

Daniel Tencer

The sun sets over an oil platform waiting to be towed out into the Gulf of Mexico at Port Fourchon in Louisiana in May. According to Der Spiegel, the report from a think-tank inside the German military warns that shrinking global oil supplies will threaten the world's economic foundations and possibly lead to mass-scale upheaval within the next 15 to 30 years. (AFP/File/Mark Ralston)

Peak oil has happened or will happen some time around this year, and
its consequences could threaten the continued survival of democratic
governments, says a secret Germany military report that was leaked

According to Der Spiegel,
the report from a think-tank inside the German military warns that
shrinking global oil supplies will threaten the world's economic
foundations and possibly lead to mass-scale upheaval within the next 15
to 30 years.

International trade would suffer as the cost of
transporting goods across oceans would soar, resulting in "shortages in
the supply of vital goods," the report states, as translated by Der Spiegel.

result would be the collapse of the industrial supply chain. "In the
medium term the global economic system and every market-oriented
national economy would collapse," the report states.

That collapse
could, in turn, cause many countries to abandon free markets
principles, the report states. Deals would be struck between
oil-exporting and oil-importing countries that would fix prices and
remove large amounts of oil from the global market place.

proportion of oil traded on the global, freely accessible oil market
will diminish as more oil is traded through bi-national contracts," the
report states.

That would prompt some governments to abandon free
market economics altogether, the report suggests. With peak oil causing
"partial or complete failure of markets ... [a] conceivable alternative
would be government rationing and the allocation of important goods or
the setting of production schedules and other short-term coercive
measures to replace market-based mechanisms in times of crisis."

the report also warns that the economic crisis caused by shrinking oil
supplies and skyrocketing prices could be seen by the general public as a
failure of market economics as a whole -- and with it, the political
institutions that created those economic systems.

Public anger at
the existing system would create "room for ideological and extremist
alternatives to existing forms of government." Populations would
fragment along political lines and "in extreme cases" this could "lead
to open conflict."

Peak oil -- which refers to the moment when the
world's production of oil begins to shrink -- is a controversial
concept, but few doubt the basic logic underlying it: That eventually
the world's finite supply of oil will run out, and nations will have to
turn to other sources of energy, or face economic disaster.

With the report, Germany joins the growing ranks of Western governments apparently alarmed by the prospect of peak oil.

Last Sunday, the UK Observer reported
that Britain's Department of Energy and Climate Change is refusing to
release documents related to peak oil, even though, as the Observer noted, previously released documents argue the veil of secrecy around the issue is probably "not good."

UK government is reportedly canvassing leading scientists and
industrialists for their advice on how to build a contingency plan for
peak oil.

And earlier this year, a report from the US Joint Forces Command
stated that "by 2012, surplus oil production capacity could entirely
disappear, and as early as 2015, the shortfall in output could reach
nearly 10 million barrels per day."

The report continued, "While
it is difficult to predict precisely what economic, political, and
strategic effects such a shortfall might produce, it surely would reduce
the prospects for growth in both the developing and developed worlds.
Such an economic slowdown would exacerbate other unresolved tensions,
push fragile and failing states further down the path toward collapse,
and perhaps have serious economic impact on both China and India."

everyone agrees that peak oil is a reality -- at least not yet.
Detractors point out that predictions of peak oil have been made since
the 1950s, and the date for it was originally pegged at around 1995. But
the discovery of new oil fields and the development of new technologies
for oil extraction mean that oil production has continued unabated in
new oil fields even as traditional oil supplies run dry.

Peak oil skeptics argue
that rising oil prices are responsible for the continuing supply of oil
-- as oil gets more expensive, extracting it from difficult places
becomes more profitable. Some argue this process could continue for

But environmentalists point out that these new
alternative methods of extracting oil are more environmentally harmful
than traditional methods. Producers in the Alberta oil sands,
for example, use large amounts of water to push oil out of sand, and
the thick oil produced by this process is significantly higher in carbon
content than the light, sweet crude imported from the Middle East.

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