Tuesday, December 25, 2018

A Seasonal Homily: Gratitude and Joy!

Merry Christmas!—but, if you don’t like the idea of celebrating the 2019th birthday of an infant born of a chaste union between a virgin and the Holy Spirit who went on to die for your sins to save you from an eternity in hell, then Happy New Year! Be grateful that the Earth—our one and only planet—managed to make it around the sun one more time without getting struck by a giant rock or sterilized by a burst of interstellar radiation. You can be grateful most efficaciously if your gratitude is directed toward a deity and/or deities of your choice who you feel have provided you with such benign conditions. Doing so may help you feel a measure of joy. Failing that, you can be grateful to me personally, for providing you with things to read and to listen to designed to keep you sane in the midst of an increasingly insane world. If so, you can click here and send me a present. And then I will feel joy too.

Gratitude is important. It is the way of the world that the grateful and contented thrive while the ungrateful and disgruntled languish and perish. No matter how bad things are, you can still be grateful for something. Each person’s situation is different with respect to gratitude, but zooming out a bit and looking around the world around this year’s end we can easily spot a number of things for which we can all be grateful.

First and foremost, we should be grateful for being able to witness the final death throes of the evilest evil imperialism ever: Western imperialism. Its final reincarnation—the United States—is pulling out of Syria and is attempting to make peace with the Taliban in Afghanistan. It will probably pull out of Afghanistan too after failing to defeat the Taliban for the past 17 years. Iraq—as undemocratic as ever but now aligned with Iran—is next. After that comes the useless NATO, whose schizophrenic leadership simultaneously thinks that Russia is so weak that it is about to collapse, yet so strong and “aggressive” that it could invade Europe any moment, and are in fact ineffectually preparing to attack Russia in some sort of ridiculous suicide mission.

Also, it is very important that the Pentagon dismantles all of its overseas military bases and repatriates all of the troops before the money runs out—which it will. The troops will be needed to defend US borders and to keep separatist movements in check. At its height empires are able to control other countries, and other countries’ borders, but once they are brought low by failure and defeat they lose the ability to control even their own borders. Currently the imperial government in Washington is in partial shutdown over its inability to allocate funds toward building a Great Wall of America along the southern border. (By the way, how did that Great Wall work out for the Chinese? Answer: they ended up being ruled by the Mongols for 89 years. ¿Hablan mongol, gringos?) Meanwhile, the empire’s overseas possession known as the European Union is facing internal rebellion over its own inability to control its borders. Perhaps Brussels needs a shutdown too… before the money runs out.

Because the next thing we can be grateful for is that the ridiculous pyramid scheme which the empire erected after the financial collapse of 2008, and which destroyed many people’s livelihoods and retirements while further enriching a small group of ultra-rich psychopaths, is pancaking before our eyes. The US Federal Reserve, which, if you know your financial history, was a very bad idea from its inception, is now cornered. It is left with three bad options: raise interest rates, lower them, or keep them the same. This must be a frustrating choice, and Donald Trump, who frustrates easily, might fire the Federal Reserve chairman and start setting the rates himself, using Twitter. That would be a fourth bad option—significantly worse than the other three, but more fun to watch. Remember to be grateful for the free entertainment!

Next on the list of things to be grateful for is Peak Oil: it’s back on the menu and will prevent us from burning the entire planet to a crisp. Peak conventional oil happened way back in 2005, but then unconventional oil, in the form of US shale oil and some other dirty muck, took over and gave the world a reprieve. But shale oil is now failing. Three-quarters of the energy companies that produce shale oil are losing money, some of them never made any money at all, and all of them are heavily in debt and would need to take on ever more debt in order to continue drilling. And unless they continue drilling their production will every month decline by well over half a million barrels per day out of total production somewhere around five million barrels per day. If the currently increasing financial turmoil makes taking on more debt problematic, then we are looking at less than a year left for US shale oil. After that the US will either have to go back to importing much of its oil—which is bound to get expensive—or shut down much of its industry. The plan to Make America Great Again by repatriating industrial production from China and beyond will need to be put on hold—forever.

The other two major oil producers (and, unlike the US, net oil exporters) are Russia and Saudi Arabia. Their situations couldn’t be more different. Saudi Arabia needs oil export revenues in order to exist. It also needs the oil price to be high—over $87/barrel—in order to balance its budget, but Brent today is trading at $50.49/bbl. Saudi Arabia exports 7 million barrels per day, and the price difference results in a budget shortfall of over $250 million per day or close to $100 billion a year. Its total budget for 2019 is $266.5 billion, and a 40% budget deficit can’t be sustained for long. In fact, according to Nassim Nicholas Taleb, Saudi Arabia is pretty much bankrupt already. Of course, if they manage to hold out until US shale oil production crashes—which could happen as soon as this coming year—then they may be able to hold out for a while longer.

Russia’s situation is dramatically different yet. Russia is a major oil and gas producer and exporter, but what it prefers is to use the energy itself for production and to export value-added products rather than energy. Thus, the Russians drive Mercedes and BMWs, but they are all made right there in Russia. Russia also exports lots of stuff other than oil and gas: grain, weapons systems and high-tech products such as rocket engines, nuclear reactors, nuclear fuel, cars and trucks, etc. In fact, if Russia were to completely stop exporting oil and gas, it would still run a trade surplus of around $20 billion a year. Thus, for Russia, energy exports are a loss leader: they keep Russia’s trading partners from collapsing economically due to a lack of affordable energy, making it possible to continue exporting other stuff that Russia actually wants to sell while importing stuff that the Russians like to consume—French perfumes, say, or Italian wines; lacy panties; IKEA furniture… If you are thinking that this situation must give Russia incredible international leverage, you are absolutely right. And this fills certain within-the-Beltway types with a certain feeling of dread called “Russophobia”.

Russophobia is another thing that we should be grateful for. Now, people often write to me to tell me how sick and tired they are of all the ridiculous and unfair accusations being lobbed at Russia, all of the ridiculous and counterproductive sanctions, the efforts to goad the Ukrainians into a suicidal military confrontation with Russia, the idiotic NATO preening and posturing on Russia’s borders and so on. And I tell them not to worry about Russophobia, because it is basically a tax on stupidity. It is a tax on the Russophobes that causes them to pay more for energy: the Russophobic Ukrainians now buy their Russian natural gas from the Europeans at marked-up prices; the Russophobic Poles, in an attempt to avoid having to buy Russian gas, just signed a disastrous contract to buy expensive and soon-to-be-nonexistent liquified shale gas from the US (and, unbelievably, to take delivery of it in the US and to ship it all the way to Poland at their own expense!). Russophobia also causes the Russophobes to pay more for their defense: instead of buying cheap and effective Russian-made weapons systems they end up paying much more for expensive and flawed US hardware. But this is only fair; call it the wages of stupidity. We don’t have to fix Russophobia—Darwin will.

Stupidity, in general, is yet another thing that we should all be grateful for. It has been over 500 years since Desiderius Erasmus published his international bestseller Stultitiæ Laus (In Praise of Folly). It is a brilliant classic that deserves a spot alongside Moore’s Utopia (Erasmus and Moore were great friends) and Macchiavelli’s The Prince. In a sense, all three books are about stupidity, or folly, of one sort or another. To paraphrase Macchiavelli, it is better to fear than to love stupidity—but we should be grateful for it just the same. Stupidity is precious, for without we would be unable to separate the wheat from the chaff, as it were, and the most precious form of stupidity is the non-self-aware, self-celebratory kind. It is easy for the non-stupid to spot, and they know what to do about it. Russophobes who think that Russia is simultaneously about to collapse and to conquer them are just one example. There are many others as well.

For example, one precious sort of folly is exhibited by free market fundamentalists who think that all would prosper if only the government stopped meddling in free markets. They do not realize that a free market is a regulated market—regulated by a government—and that without government controls free markets automatically degenerate into local monopolies controlled by mafias and warlords. Gold bugs who think that “sound money” should be backed by precious metals are similar; they miss the point that in an industrial economy money derives its value from its ability to command future resources, labor and energy especially. Peak Oil denialists, who miss the point that peak conventional oil was back in 2005 and who start gushing with sarcasm whenever the oil price goes down a bit, are another example.

Climate change denialists exhibit another valuable type of folly that makes them easy to spot: a sort of verbal diarrhea. You can always spot a denialist because they employ a rhetorical device called a Gish Gallop that involves spewing lies and half-truths in a never-ending stream: “Climate has changed before!”; “It's the sunspots, stupid!”; “There is no scientific consensus!”; “Climate models are unreliable!”; “The temperature record is unreliable!”; “It hasn't warmed since 1998!”; “Antarctica is gaining ice!”; “We're heading into an ice age!”; “Al Gore is a fossil-fuel-wasting hypocrite!”; “Baby, it's cold outside!”; “Sea level rise is exaggerated!”; “Arctic ice melt is part of a natural cycle!”; and, finally, “Climate scientists are in it for the fantastic sums of money they earn by hanging around universities as post-graduate fellows!” Russophobes often resort to the Gish Gallop too, but it is the climate change denialists that are the most programmed for it.

Such non-self-aware, self-celebratory kind of stupidity is valuable in that it allows us to effectively triage all of humanity by quickly and easily determining who gets to do what. You see, some people are worth debating while others only need to be told what time it is (time for them to go away). Some people get to plot the course and steer the ship while others get to swab the deck, sanitize and pump out the heads and scrape the seafood off the hull. Stupidity that is shy and retiring is of no use at all because to uncover it you have to interview people and give them tests while stupidity that bursts forth like a naked lady from a cake is indeed laudable because it can be marched out the door forthwith, no questions asked. Let us therefore be grateful for it.

If displays of individual folly are laudable because they save us work, then group displays are even more so. Displays of folly by entire countries and ethnic groups may seem excessive, but then perhaps it is the destiny of certain countries to serve as a warning unto others. The Kurds would make an interesting case study in ethnic folly, but the country that comes to mind first and foremost as a particularly extreme display of folly is the Ukraine. The Ukrainians say that they want to join Europe, where fascism is against the law, but then they march around with torches and Nazi insignia, pass racist laws, shout Nazi slogans and lionize Nazi collaborators who have perpetuated acts of genocide against Ukrainian Jews and Poles, renaming streets and erecting statues to them. The Ukrainians say that they want to join NATO but then provoke open rebellion in some of their regions and lose control of them, thereby disqualifying themselves from being accepted into NATO. They say that they are at war with Russia, but then they quietly sign a five-year deal with TVEL, a division of Russia’s Rosatom, to provide fuel for most of the Ukraine’s remaining nuclear reactors which in turn produce well over half of the Ukraine’s electricity. They say that they want to have their own, independent Orthodox Church and then prepare to hand control of it over to the fake Patriarchate of Constantinople (Istanbul, that is; Constantinople ceased to exist 565 years ago). They blockaded their own coal-producing regions and attempted to import coal from the United States, but couldn’t import enough and are now freezing. Big countries can seat misbehaving little countries on their knees and give them a stern talking to: Don’t be like the Ukraine! See what happens if you do!

We should be particularly grateful to the Ukraine for its willingness to step up and make itself look ridiculous because a lot of misbehaving little countries do need to have it before their eyes as a negative example. Various democratic countries in the European Union are facing a problem: democracy works very well when there is loot to divvy up—spoils, booty, etc.—but when the bonanza runs out bad things tend to happen to democracies. People are no longer willing to vote for the one imperialist party or the other imperialist party, where each maintains a competitive advantage by being somewhat unlike the other one in trivial ways. Instead, people start voting for the New Arsonists, the Eat the Rich Party, Troglodyte Liberation Front or some other group with which the old imperialist parties can’t possibly find common cause and form a governing coalition. The result is an impasse, and as conditions degenerate people start clamoring for order to be restored, using authoritarian, even fascist means if need be. And this is where the Ukraine becomes invaluable as an object lesson in the failures of modern fascism. Let’s be grateful to it, and hope that its negative example does the trick for preventing outbreaks of fascism within the crumbling, disintegrating European Union.

I could continue this list of things to be grateful for virtually ad infinitum, but I will end it here for the sake of brevity. Be grateful for all these things and more, and feel and share joy! And if you want to show me some gratitude for doing everything I can to keep you sane in an insane world, don’t be shy and click this link. Thank you, and Happy New Year!


Robert said...

Thanks Dmitry!

Merry Christmas to all!

Beagle Juice said...

Merry Christmas to all!

Of course, I might be missing something completely obvious but isn't the shale gas export to Europe just a placeholder until the "Empire crushes their enemies?" Once Assad is toppled, and Iran finally kowtows, the Empire can bring Turkmenistan's gas west instead of east, and Russia will be powerless to stop it.

Needless to say, this is easier said than done, and nothing that has transpired in the last 15 years suggests this can ever be accomplished, but some dreams die hard. The very essence of the Empire is greed and corruption and is thus agreeable to human nature. However, in spite of this wind at its sails, the Empire lacks the practical ability to accomplish its larger goals.

The whole enterprise eventually bogs down in Swiss bank accounts and mansions on the Riviera. It is impossible to defeat, but it is also incapable of anything other than periodic bouts of wanton destruction.

Dumb American said...

I think Poland signed another deal with Cheniere Energyin in which the American side pays for shipping, making them look like even bigger heroes... There is no end to the folly it seems.

JonL said...

Aahh, that piece cheered me up, no end. It is comforting that there are people that have similar thoughts to your own. If only there were such a thing as peak stupid, but I fear peak stupid is an ongoing thing.....world without end!

Happy new year Dmitri, to you and yours

de amateureconoom said...

Thanks Dmitry for another interesting perspective on the world as you see it.
Wish you and yr family the very best, happiness and health and joy and many more posts to enjoy coming from yr bright and uncluttered mind.

Ronald Langereis said...

Hi Dmitri,
As I've known you from the beginning I'm inclined to trust you unconditionally – foolish of me, I know, but I can't help it – but, really, now you're going too far. I can't believe the first thing you'll do to a naked lady who burst from a cake in front of you is marching her out of the door! At least, you'd check the weather forecast.
A merry Christmas time, anyway, and an inspirational 2019. Beware for the subject overload to be expected.

Bob said...

Speaking of Ukraine and energy, could you update us on the Chernobyl sarcophagus / cover/ monster engineering effort? Who's paying for it? (I did a brief search with no results.)

Dmitry Orlov said...

Bob -

AFAIK the Chernobyl sarcophagus has been completed, although, having looked at the design, the whole project resembles putting a pretty doily over an unexploded artillery shell.

But that's not all! The Ukraine's nuclear energy has entered into a deal with what remains of bankrupt Westinghouse to supply it with nuclear fuel for perhaps a 3rd of its remaining reactors (the fuel is substandard and they dare not fuel an entire reactor with it but mix it in with Russian fuel assemblies they get from Russia's TVEL; it is also significantly more expensive - go figure!). Unlike the Russians, who rely on closed fuel cycle nuclear technology, the Americans have no ability to reprocess spent nuclear fuel. Therefore, the plan is to stockpile the spent fuel... drum roll please... in above-ground storage at Chernobyl! You see, it's not radioactive enough there yet.

On another note... thank you, commenter "VOTE FOR NO ONE" for your lengthy and ridiculous climate-change-denialist screed which, of course, employed Gish Gallop technology, in a never-ending tirade of "isn't it true that ". I didn't bother to read it but simply clicked the delete button. We are all grateful for your stupidity.

krautsky said...

It always amazes me how climate change denial tinhattery is of one piece with the denial of the TOE (theory of evolution), flat earth, Global Jewish Cabal to control all governments of which Russia is a part of course (not to say that in Neocon circles Jewish Zionists and those of the Christian kind are not predominant), the denial not only of the moon landing but any space exploration and even proposing a fake ISS...one wants to despair were it not for blogs like yours.

Some more tinhattery here - of the libertarian kind.

Seshette said...

I'm surprised to hear that there are still climate change deniers. Most of the "deniers" I run into struggle with the source of the climate change rather than the change itself. There are many who cite stats proving that industrial production is NOT the source of the change, or, as Dmitri pointed out, that change has occurred before, which doesn't deny the change, but does minimize it since we're still here.

But the deniers at least refuse the official Empire narrative which must be suspect given how pathological it is, so what should we believe? Is it true then that climate change is real, humans are at fault, and all the efforts to develope alternative energies like solar panels, and wind farms are THE only answer? For me, nearly all claims by any US administration are just propaganda to convince us that whatever they're proposing is in our best interests when it most definitely is not. So who do we believe?

Ien in the Kootenays said...

Have a blessed Christmas on January 7 Dmitri. The section on gratitude made me smile and nod in total agreement. My small life in the Shire has been blessed. I am retreating from trying to make sense of the Big Picture. Increasingly I look at the world with a mixture of bewilderment and fascination, and feel I do not quite fit into the time anymore. I spend hours on the iPad but maintain a land line. Some social developments make me just shake my head. Pronouns anyone? I am OK with that. Not quite fitting into the current narrative is part of the aging process, slowly disengaging and making room. While health continues I shall just try to be a good Marxist, in the spirit of “From each according to ability, to each according to need.” 2019 shall bring flowers and cabbages, because I will plant them. Deity of Choice (including none) bless us everyone.

Pete Fairhurst said...

Hi Dimitri best wishes for 2019 for you and yours

I find your work consistently stimulating, thought provoking and often laugh out loud. I am a patreon of yours and your work is most definitely worth the small fee. So thank you and please keep up the good work.

This post was no exception but your comments about peak oil intrigued me. I don't know if you are familiar with F William Engdahl and his extensive work? His work is consistently good and I can thoroughly recommend his latest book "Manifest Destiny. Democracy as Cognitive Dissonance".

Anyhow I just saw this short piece by Mr Engdahl, "Whatever happened to Peak Oil?":


He is very specific about the history of the Peak Oil meme, the abiotic origin of oil and also about recent discoveries of vast reserves of recoverable petrochemicals in the mainland USA.

These statements are so contrary to your assertion in this piece that I just had to ask for your comment about Mr Engdahls blog. Is he wrong? And, if so then, how do you know for sure?

Best Pete

R.J.Cavazos said...

Great insights as always! Thank you! I for selfish reasons have always been curious on your perspectives closer to U.S, namely Mexico and the rest of non-U.S western hemisphere. I fear the old saw, "Mexico so far from God so close to the U.S., will be true with greater force in years ahead.

Dmitry Orlov said...

Pete -

Thanks for bringing this up. Some of what Engdahl writes is good (I even quoted him on occasion) but I've caught him fibbing in his articles before. Now, this one totally takes the cake. Anybody who is even slightly familiar with petroleum chemistry knows that abiotic oil is pure fiction.

First, all of the crude oil (and all of the coal) produced to date has readily identifiable biological origins. All of it is the product of photosynthesis. In some cases it is possible to identify the specific prehistoric plants from which the oil or the coal was formed. Oil is cooked from coal over millions of years. So, where is the abiotic coal? (It doesn't exist; neither does abiotic oil.)

Second, the idea that oil is being secreted by the planet is physically impossible because beyond a certain depth no oil is ever found because high temperatures and pressures decompose it into gas. What fossil fuel you get is a function of depth: close to the surface there is coal; deeper there is oil; even deeper is natural gas.

There is a problem with this explanation, though. Trying to explain things to people who don't know much of anything doesn't help. You still end up with a person who doesn't know much of anything. Specifically, if a person knows too little to be aware of the limits of his knowledge, there is really nothing to be done. But today is New Year's day, I am in a good mood, and so I don't mind if I wasted a bit of time typing this out.

krautsky said...

petroleum chemistry knows that abiotic oil is pure fiction.

Having worked in the service industry for the oil/gas-patch in Canada, I always had some interest in the industry of course, and was observing when things changed with shale gas suddenly becoming a thing in the Peace River area in 2005 or so.

The theory of AOF does not seem to be completely hairbrained: "Proponents of the abiotic theory are not without their evidence, however. These scientists point to the fact that oil reservoirs have been shown to refill when left alone for periods of time, something that does not fit with the biotic theory. They also point to the presence of oil on meteors and other bodies that do not and never have supported life. They also suggest that claims about the chemical nature of oil are spurious because we do not know what processes occur deep in the Earth that may cause oil to look as though it came from an organic source when it did not. It is also true that oil can be produced from inorganic material, lending support to this theory." http://www.petroleum.co.uk/abiotic-oil-formation

krautsky said...

Abiotic oil and gas, should they exist, are unlikely to be a major contributor to reserves.
However, experiments have been done to indicate that the theory its creation is not completely bollocks.


Robin Morrison said...

Engdahl is an enlightening read so long as one understands that he deems fact less important than whatever agenda he's currently selling. I find him politically shrewd but, ultimately, something like an apparatchik sleaze.

Dmitry Orlov said...

krautsky -

Thank you for falling for the "stultitiae laus" honeypot Pete set up. It helps prove my point. Now, pardon me while I mention flat earth, the kennedy murder/execution and MH17. Bring it on!