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An open letter to the Prime Minister

Lionel Orford is new to Webdiary. He is a professional electrical engineer with a long standing interest in renewable energy, energy sustainability and climate change, and has studied the Peak Oil issue in depth snce 2004. This is his debut piece for Webdiary - thank you and welcome, Lionel.

An Open Letter to Kevin Rudd, Prime Minister of Australia

3 December, 2007

The Hon Kevin Rudd MP
Prime Minister
Parliament House

Dear Prime Minister,

Firstly, congratulations on your historic election win. Your promise of “new leadership” and a focus on Australia’s future are certainly needed at this time.

You have come to power at a time of a looming worldwide economic crisis; a time when we desperately need new leadership to deal with the immense problems ahead of us and an end to the deception, denial and neglect that characterised the Howard era. The news is in and it is very bad news indeed:

  • We have now almost certainly reached Peak Oil. The highest ever level of worldwide production of “all liquids” was in 2006 and conventional crude oil was in 2005. It would now take a minor miracle to raise production above these levels and the rate of decline is almost certain to accelerate over the next few years such that “business as usual” is impossible.
  • Global Warming is proceeding much faster than most scientists expected and we are completely clueless on how serious the problems will be and how fast they will unfold.

I do not address the Global Warming issue in depth in this letter because no actions by your government alone can have any significant impact on the problem as it is a worldwide problem, where extensive damage has already been done and major consequences are now inescapable. However, I must stress that I fully support major initiatives in renewable energy development, energy conservation and a global plan of action through the UN because these are the correct actions to mitigate the crises being brought about Global Warming and by Peak Oil.

Even though the effects of climate change are likely to be very serious, they are largely unknown and will play out over the coming decades. However, Peak Oil will have major consequences over the coming years – during your time as Prime Minister.

The unfolding crisis is in several ways analogous to the sinking of the Titanic. We are now at the stage where the ship has hit the iceberg and is already taking on water; its fate is sealed.

The crew is now trying to avoid panic by the passengers by announcing “All is well, the ship is unsinkable, there’s no need to launch the lifeboats”. Unfortunately most of the crew is yet to realise that this is simply not true – they are optimists, still in the denial of the dreadful truth.

There is an urgent need for recognition of the problem so as to best manage the crisis. Denial of the problem at this time will lead to inaction and a far greater disaster, just as it did on the Titanic.

Like the Titanic, this crisis was caused by gross negligence and hubris that led to the belief that the ship was unsinkable. The inevitability of Peak Oil and its effects have been known for decades, but rigorously denied, based on the belief that our technological prowess has made us invulnerable to reality.

Welcome to the job of Captain of the SS Australia.

Peak Oil and the Unfolding Economic Crisis

To those unstudied in PO, it initially seems “no big deal” - something that, to some Greenies, will stop us destroying ourselves or something, to the economists, that the market and technical innovation will deal with.

Both are extremely misguided by their respective ideologies and just flat wrong.

The bad news for the Greenies is that far from being that which will save us by reining in capitalism, it may well result in our demise through social dysfunction and the use of any available energy source, no matter how environmentally destructive.

The bad news for the economists is that the market and technical innovation is completely unable to provide solutions to the demise of its staple food source – cheap energy. It has been assumed that as crude oil declines, we will turn increasingly to “alternative” sources of oil. This is a ridiculous assumption, based on hubris and blind faith; it is completely detached from reality. There are simply no alternatives to oil – no combination that can be obtained fast enough and in sufficient quantities to replace the dwindling supply.

What we have seen over the last three years of significantly higher oil prices is massive stimulation of efforts to increase supply, but the small increases in supply have not matched the declines in the large mature oil fields. We have seen demand fall to match supply by means of poor countries simply falling by the wayside.

Now the world is guzzling its way through its trading reserves, but this can not last for long.

Very soon we will face an oil supply shortfall which results in dramatic escalation in the oil price. As the price increases, people will do what they can to reduce their usage. However, very quickly the discretionary use of fuel (trips to the coast, overseas holidays, interstate travel, etc) will be reduced to almost nothing.

At first this doesn’t sound that bad, but consider what it means for our service based economy. At best, it means a downturn and at worst, a collapse of the tourism industry, the airline industry and the rest of industries based on selling us stuff we want but don’t actually need. It means unemployment for many thousands, along with the bankruptcies and foreclosures of people’s homes.

The result will be a recession, which drives down demand to match supply through “demand destruction”.

A mild rate of decline (say < 1.5% p.a.) may result in a mild recession that goes on and on because there is insufficient oil to allow re-establishment of economic growth. The world economy would grind to a halt and a failure of the market system would probably follow.

However, it is far more likely that the economy will overshoot into a recession far more severe than what is required to cut back oil consumption to match supply. Ironically, as in the 1980’s, we would then see an excess of oil supply and a dramatic fall of the price. However, unlike the recovery of the 90’s, any economic recovery would be short lived due to significantly reduced oil availability due to depletion in the intervening period.

The magnitude of the coming decline in oil availability is truly alarming. In October 2007, the Energy Watch Group – a research body that provides advice to the German government – released a report which states that which is becoming more and more obvious; that we passed the worldwide Peak Oil in 2006.

Furthermore, EWG forecasts that the decline rate will be much higher than that foreseen by any other group, including ASPO. EWG predicts that crude production will be down to around two thirds of current production by 2020 and to half by 2030. If these well researched forecasts are correct, it is totally infeasible to reduce consumption by this amount in 2 decades, except through a collapse of our current system.

But the story gets worse. Petroleum geologist Jeffrey J. Brown has developed an ‘Export Land Model’ which models what happens to exports from the major oil exporting nations whose domestic demand is still growing while their oil production is in decline. These nations include Saudi Arabia, Iran, Venezuela, Kuwait, many of the smaller middle eastern oil producers and most importantly Russia – the worlds largest oil producer. The model suggests that it will only take about nine years from Peak Oil for exports from the major producers to reduce to zero. This is very much in line with what actually happened to Britain, where it took only six years from peak production for Britain to again become a net oil importer. This spells disaster for major oil importers, particularly the USA and Western Europe.

Right now, the USA seems to be in the initial phase of “The Long Emergency”, as James Kunstler has dubbed it. I think that the only uncertainties are how fast their economy will fall apart and what the reaction of the US high command will be. A collapse of the dollar seems imminent because of the converging effects of the unsustainable boom financed by ballooning consumer debt and the unsustainable flooding of the world economy with US Dollars to import two thirds of their oil as well as a flood of consumer goods. The United States is bankrupt but nobody wants to admit it. The main reasons that in the US Dollar retains any value at all are that a large number of countries hold dollars as foreign reserve, almost everybody buys their oil in dollars and manufacturing countries, particularly China, do not want to see a collapse of their largest market.

The consequences and speed of the downfall of the American Empire are highly unpredictable, but it is certain to be a disaster for the whole world, which ever way it unfolds. I worry that the US high command may do something really stupid, like launching military action to seize oil by force by attacking Iran or Venezuela for example. My only hope is that their current war for oil is going very badly and I don’t think the American people will support any new resource wars. However, this may change if the economy collapses and there is massive unemployment and hardship similar to that of the Weimar Republic of the 1920s.

What your Government can do about it.

Prime Minister, it’s time to tell the crew and passengers the dismal truth and get everybody working together to launch the lifeboats.

Step 1. Tell the Truth

No government wants to tell the truth about the dire situation because that would cause a loss of confidence in the market economy and the government itself. However, you have an obligation to inform the Australian people of the seriousness of the situation and to take action to start to deal with it. You have an obligation to desist with the “all is well” denial and inaction of the previous government; to seek frank, fearless, honest and realistic advice from departments such as ABARE and DITR rather than covering up the problems by seeking only “optimistic” advice that will maintain confidence in the market economy, as your predecessor did.

I contend that it is far better to level with the Australian people before crisis hits than to wait for it to happen and then react by saying “who could have known? – I was deceived!” Well – after verifying what I’m now telling you – you have no excuse not to know! To claim that you didn’t know would be to claim your own incompetence and the electorate would be justified in throwing you out of office at the next election.

The news must be delivered so as not to cause panic and I do see how difficult that is. The finesse required here is to term the news in terms of planning for the coming oil supply and economic problems. I note that your election campaign rhetoric did mention this very briefly.

Step 2. Start Planning for Major Infrastructure Works

When the economy goes into recession or depression, the only known way that some economic activity can be restored and unemployment reduced is by government investment – Keynesian economic intervention.

At the same time as this government intervention is required; the nation has a burning need for infrastructure to allow our society to function with an ever declining supply of oil.

I suggest that these are the most pressing needs:

  • Major investment in national electric railway infrastructure – long distance freight, high speed passenger rail and suburban light rail. A vast amount of petroleum is consumed by road freight, air travel and commuting. The majority of it can be powered by electricity. This would also enable greenhouse emissions to be significantly reduced due to the large increase in efficiency of rail transport compared with road and air transport.
  • Major investment in infrastructure to better manage our water usage. We need to return the waste water generated by our cities to the land, together with the precious nutrients it contains.
  • Major investment in carbon capture and storage. I personally don’t think this will prove technically and economically viable, but none the less, we should pursue it until it is proven non-viable. We have no other resource except coal which can be readily deployed to provide the rapid increase in the electricity we need.
  • Massive investment in renewable energy. The most promising technologies here are solar thermal with heat storage and geothermal. There is no point in developing large scale intermittent resources such as wind, photovoltaic and wave power because such intermittent generation cannot be managed on a large scale.
  • Develop oil from coal technology in Australia, with the up-front requirement that any plant built must sequester the huge amount of carbon dioxide it produces. Again, this may never be viable, but the viability should be assessed.
  • Get serious about infrastructure to allow bicycles to be used safely for commuting. This includes bikeways, storage facilities, showers and possibly public hire bike depots.

There is a problem with major government investment during the current boom times because such investment would be inflationary. However, this boom will end very soon and the planning behind such major infrastructure works takes years, with only a relatively small amount spent during the planning phase.

Step 3. Start conserving what we have left

Rationing of fuel will be one of the first steps required to deal with the coming shortages. If this isn’t done, there will be mayhem – hoarding of supplies, black market profiteering, queues for fuel at petrol stations and crucially, shortages for essential services, particularly food production and distribution. I believe that tradable quotas are the best means of rationing demand as they would allow people with greater needs to buy additional quota and reward those who conserve most effectively.

If rationing was implemented via a worldwide “Oil Depletion Protocol”, where all countries reduce their consumption progressively to match the available supply, this would mitigate the problem in the most equitable way possible, hopefully preventing a breakdown of world order. However, getting the US onboard is bound to be difficult.

The rationing system must also reserve enough fuel to implement the infrastructure works required to adapt to the post-peak world.

Step 4. Get our best and brightest onto developing long term solutions

The size of the challenge that confronts us is truly staggering. I fully support your “Education Revolution” and regard the deliberate neglect of public education by the Howard government as reprehensible.

However, there is no point training more economists and bankers for the capitalist system which will not exist for much longer.

A new economic system

The fundamental problem behind all the problems we face; the reaching of practical limits to growth in the case of oil, water and deforestation, and the consequences of the waste products in the case of Global Warming, is that our economy is dependent on economic growth and fails to function without it.

We need an entirely new economic system which must be able to

  • function effectively without economic growth
  • function to equitably share resources in a world of declining resources
  • enable the development of local communities that are largely self sufficient
  • facilitate depopulation of the planet
  • restore planetary ecosystems

Such an economy may need to be a state run economy, which have a poor track record. We need to learn from the mistakes of former state run economies and come up with something that works. I have thought long and hard about this and can offer few practical suggestions.

A new energy system

We must face reality and understand that we are dependant on large amounts of energy just to meet our fundamental needs and this cannot be changed in years or decades; it will take lifetimes. We must also understand that while there is energy available, we humans will use it because availability of energy is standard of living.

A recent Energy Watch Group report tells the bad news that coal will be peaked out worldwide within 20 to 30 years. It will simply impossible to provide the minimum energy needs of a population that lives in cities once the oil, gas and coal are severely depleted.

Current technology nuclear power (based on the fission of Uranium235) is only able to provide a relatively small part of our energy needs because viable supplies of Uranium235 are very limited. Developing this technology for Australia would be very short sighted indeed.

Hence I contend that we should get started on developing safe breeder reactors which convert Uranium238 to nuclear fuel and/or breeder reactors that convert Thorium to fuel. Uranium238 is a large resource and Thorium is a vast resource, capable of providing our energy needs for millennia. This is a large technical undertaking that will take decades, but the long term need for it is really beyond question.


When one fully understands the magnitude of the problems that we humans have caused ourselves, it’s tempting to just throw up your hands in dismay and just give up. Like the Titanic, we are in a situation where no desirable outcome is possible. However, we must do what we can to work for the best possible outcome.

The first step is to desist with the denial of the problems and the fantasy that everything is OK; that the market will sort it out. This involves informing the public about the seriousness of our predicament.

The second step is to get stuck in and do what we can to adapt to our new situation.

If there is any aspect of this letter on which you would like me to provide references or further information, I am most willing to provide this. Stealing your line - I’m from Queensland and I’m here to help.

Most sincerely,

Lionel Orford


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Relocalisation and Altermondialisme

Gareth, you've said you assume that Relocalisation is the opposite of Globalisation.  It's not. Relocalisation and Globalisation are different, but not opposing systems/processes. They're actually quite compatible.

Consider this question and answer from an interview with Fritjof Capra on Relocalisation:

Q. How can the concept of the Network be applied to relocalisation, beyond just linking the various local groups together?

A. When you study the principles and basic concepts of ecology you can see them as basic principles of all living systems. At the Centre for Ecological Literacy we have tried to turn these principles into bite sized pieces for teaching, distilling them into 6 principles of ecology. For each one we have created a symbol and photos and we have been teaching it in schools. The 6 principles are:

    • Networks
    • Nested Systems
    • Cycles
    • Flows
    • Development
    • Dynamic Balance

Networks is listed as the first principle because it is it the defining characteristic of life. Wherever there is life there are networks, be they metabolic networks, food webs, human social networks. I tried in recent years to put all of these principles into a nutshell, as they are all different ways of seeing the same thing. Nature sustains life by creating and nurturing communities. We all know what a community is, even if we don’t have it. It is something that, if we have it, we recognise it, and if we don’t have it we feel its absence. Be it English football hooligans or US inner city gangs, they are all seeking community. Community is visceral and real, and that is why I think it is central to a definition of sustainability. The experience of a living network is the experience of a living community. The network concept is important, as sustainability is the quality of a community, an individual cannot be sustainable. Creating communities is creating sustainability.

To me, Capra's "network concept" applied to "Relocalised" communities reflects the very core of the idea that we'll do well to "think globally, act locally". 

Given that information, do you still see Relocalisation and Globalisation as opposites?

Some Local Customs Are Slightly Different To Others

Actually talking good old boys reminds me of something. I take it localization (really socialism), and people don't fret, even the richest gated municipalities practice a form of it; when self interest requires they do: Will it be the whole top-down approach, turning one's back totally on globalization - excepting foreign film's of course? If so it could make interesting viewing when the local shop keep sticks a no blacks or refugees allowed sign over the door. Mary Shepherd wandering through the town proclaiming UN documents (globalization) are forever binding will probably be tried and burnt as a (globalized) witch.

 Richard::  A particular Robert Heinlein book springs to mind.


Not now the time to do the bio Richard but I was brought up on Heinlein in his hard science phase before his carotids went (albeit  I was introduced through a childrens' book - Tunnel in the Sky was the first - just loved those friendly jackwabbits- it is on the bookshelf by my head each night as I lumber me down).   He is the reason that I have set the arbitrary date for my suicide at 144. I want to live long enough to see if he was right - will the Rebel American Colonies become a theocracy by 2100? And will their theocracy be based on the "secrets" of nuclear power?    Perhaps a few Webdiarists promoting the Uranium bug ought to go and read it. Assuming, of course, that engineers can read.

Then they might move on to time travelling incest - by that stage his carotids had really gone.   Bad Job really - if you know the cannon. And he loved cats. Wonder what he would have made of Claude.


Fiona Reynolds: "The 1979 versions, of course."

Of course, when only the original will do.

Those Good Ole Boys

Gareth Eastwood

Does relocalising simply involve buying ‘local’ or is there more to it than that? (i.e. working, travelling).

Probably for a lot of people it does. Buying local is fine and dandy whilst one communicates with the local grocer. Or this guy is the Mayor.

Though sharing a jar or three with Daisy in those cut-offs surely has an upside. Probably the major reason for the lack of communication with the grocer?

Oh dear

Paul Morrella, did you have to remind me? Now I shall spend all evening trying to decide which of Luke and Bo is more delectable...

The 1979 versions, of course.

Transparent and accountable

Craig Rowley, re “do you believe we have good government transparency and accountability in this country?” Yeah, I think we’re doing ok in that regard, certainly in a relative sense. We usually do alright in the eyes of Transparency International. Also with a mere three years between essentially free and fair elections, I would say our federal government is held accountable.

Richard::   Perhaps, in twenty-five years or so..


Perhaps in time ... but not nearly enough now

Thanks for answering that question, Gareth

My view is like Richard's

I think we don't have sufficient government transparency and accountability today (regardless of which political party is in power) to take the risk that it will not fail to always properly regulate a nuclear industry here and then compound any failure by also failing to be transparent about it. 

I'm concluding that we don't have sufficient government transparency and accountability at present.  There's a plethora of examples where we've discovered long after the fact that something went wrong and we weren't informed about it until for some it was way too late and I'm not keen on seeing that happen when it involves a nuclear power or uranium processing plant in the neighbourhood (or broader region for that matter).

Perhaps in time we'll achieve sufficient government transparency and accountability to take the risk, but I reckon we've not nearly enough to take it now.

Who Is The Mind Reader?

Craig Rowley

Nevertheless, I made the point last night that Paul Morrella probably only raised the question of when Globalisation began to distract from the more important point John Pratt was making (i.e. that Peak Oil will result in greater Relocalisation).

I didn't raise anything to "distract". I pointed out rightly that John Pratt had confused globalization with trade restrictions. This is not an uncommon occurrence and one that you seem to have fallen into yourself.

"Relocalisation" can take place at anytime and does not need oil to peak for it to occur. Actually, relocalization takes place in towns, suburbs, and municipalities all over the world. The best way of making relocalization or exclusion work is for a "town" to come together (for self interest reasons often property values) and begin beavering away at a plan. Most common tactics include making the area overly expensive, draconian use of law through both  police and private security forces etc. And any plan would not be complete without the local (membership only) country club. The reverse of this process can also take place with the almost manadory wearing of bullet proof vest being a good exclusionary tactic.


Who is the misleader?

"Relocalisation can take place at anytime and does not need oil to peak for it to occur."

Yes, that is correct and reflects what I've been saying about Relocalisation and why it makes sense to look into it now before Peak Oil.

"The best way of making relocalization or exclusion work ..."

Relocalisation  is not 'exclusion', so the best way of making Relocalisation work is nothing like that described by the anarcho-capitalist who has been misleading readers on very the nature of Relocalisation.

Meaning of local

Here are a couple of rough and ready definitions of local (not theoretically tight but enough to be useful).

For habitat planning - walking distance for most people to obtain goods and services used every day.

For resources and so forth - the watershed or bio-region.

These are enough to give us an orientation so we know what direction to head in.

A similar loose but useful orientation in technology is: light is to be preferred.

These kinds of defintions fall into the 'useful enough' rather than academically respectable bag.  I think in the current situation these kinds of things are what we need.

The Hydrogen age returns

Craig Rowley, I reckon my assumption was correct; a system is not a process. Systems can be composed of processes, systems can be created by process/es, but they are not the same thing. 


Re “There was no system of genuinely global intercontinental trade thousands of years ago” sure, but that’s not how I would define Globalisation.  


Globalisation and Relocalisation are both meaningless buzzwords, that’s why we can waste so much time arguing about how to define them. I can’t suggest or implement a plan to relocalise until I know what local is. How close is local? 


Does E.F. Schumacher actually use the term Relocalisation, or are his ideas essentially how you would define Relocalisation? Is decentralising the same thing and relocalising? Does relocalising simply involve buying ‘local’ or is there more to it than that? (i.e. working, travelling). For the moment I will assume that Relocalisation is the opposite of Globalisation.  


I’m not convinced that anything along the lines of Relocalisation is either necessary or bound to happen. In brief terms, my own preference for dealing with future energy supply issues would start at building a large Australian nuclear industry (including power). As solar, geothermal, hydrogen (whatever works) based power sources come on board, they gradually replace the nuclear sourced power. A plentiful supply of electricity allows for more electrified rail, desalinated water etc. Cars, ships and aircraft (the hardest to shift I would imagine) gradually switch to electric, hydrogen, bio-diesel or whatever else works best. I see no need for Relocalisation. 


For previous discussions of a similar nature, refer to old Webdiary link.

Previous discussions of a similar nature

Gareth, I've started to read the comments on that old Webdiary link and, after I get past all the rubbish C Parsons wrote, I'll probably pick up on some of the points you had discussed with Stuart McCarthy, Roger Fedyk and Phil Kendall.

Minimal regulation? Nuclear industry?

Gareth, in the conversation thread that flowed from Joseph Stiglitz's post "Who Owns Bolivia's Oil and Gas?", you replied to Phil Kendall making a point about Bolivians being ripped off:

...in my view the market price in a truly competitive market (i.e. minimal tax/regulation, no monopoly etc) is the same thing as the ‘fair’ price.

You went on to make other points suggesting you believe a truly competitive market is a good thing (with the term "truly competitive" being defined by you as minimally taxed/regulated, etc).

Given your belief in minimal regulation being good, what regulation would you advocate to ensure a safe nuclear fuel processing and power generation industry in Australia?

Butting In

Craig, I don't think you'll mind if I add another question for Gareth. It is:

With minimal tax/regulation, how do you deal, if at all, with the externalities? (For nuclear, that's things like waste, decommissioning, proliferation. For fossil fuels it's global warming & other pollution, health effects, environmental degradation...)

Good question Mark

Thanks Mark, that's a very good question and I'm looking forward to reading Gareth's answer to it. I do wonder how he'd price the disbenefits and whom he thinks should carry the cost burdens of waste, decommissioning, non-proliferation policing, etc.

From Semantics to Solutions

Gareth, click here, look at the definitions, and you'll find:

S: (n) system: a procedure or process for obtaining an objective; "they had to devise a system that did not depend on cooperation"

Nevertheless, I made the point last night that Paul Morrella probably only raised the question of when Globalisation began to distract from the more important point John Pratt was making (i.e. that Peak Oil will result in greater Relocalisation).

I'm more interested in talking about the that point John was making and I'm happy to enter discussion about your preferences for a big move into nuclear power generation (and I assume enrichment) for Australia.

So, if I could ask a question to start with:  Gareth, do you believe we have good government transparency and accountability in this country?

Relocalisation in Action

Earlier this year, Russ Grayson wrote a piece on Relocalisation for Online Opinion.

He mentioned the Energy Descent Action Plan put together by students of the Practical Sustainability course at a college in Kinsdale, Ireland.

The Plan was the product of the students completing an exercise in collaborative scenario planning, stocktaking local resources, and investigating solutions for dealing with the changes that peak oil might bring. They covered food, housing, education, health, energy, waste, transport, tourism and the local economy.

Russ Grayson points out:

To some extent, those solutions could be applied to dealing with the possible impacts of global warming, depending on how they manifest themselves.

Were neither of these challenges to eventuate, the process of developing solutions and the solutions themselves should benefit local business, farmers and the town as a whole by stimulating local community and business enterprise and refocusing attention on the wellbeing of the town as a social and economic entity.

Practical suggestions


Craig Rowley, you’re confusing outcomes and process. Globalisation is a process your “geniunely global system of intercontinental trade” is a point in time. Globalisation does not have a modern form, it’s an ongoing process. You can’t “re-shape” Globalisation either, you can try and stop it, maybe try and reverse it. To globalise is simply to expand (across borders) matters of trade, communication, transport and culture. This ‘process’ began thousands of years ago, Egyptians exporting paper across the Mediterranean are a little blip in an ongoing process.

Who knows, maybe our trips to the moon and Mars will one day be known as early steps in a process of Galaxyisation,  Solar Systemisation or whatever ‘isation’ fits best.


I don’t know that adding another buzzword, i.e. “Relocalisation” is a better use of our time; I think debating specific suggestions like Stuart’s “Practical Solutions and Funding” is the best use of our time.


Practical Suggestions

Gareth, here's a practical suggestion for you: Drop your assumption that I'm confusing outcomes and processes. It's wrong.

Then have a think again about claiming that a “geniunely global system of intercontinental trade” is a point in time.  It isn't.  It's a system, i.e. a process, not a "point in time". 

There was no system (aka a process) of genuinely global intercontinental trade thousands of years ago.   The people inhabiting Egypt during the Predynastic Period or later during the Pharaonic Period didn't have awareness of, let alone the means to trade with peoples on the other side of the planet. 

Another practical suggestion for you:  Consider "Relocalisation" a name for another process rather than dismiss it as a buzzword, read E. F. Schumacher's Small is Beautiful and get in touch when you want to discuss how Relocalisation can be one of the practical solutions we could implement.

I apologise for my error

Ian McPherson, hi! 

I checked that reference regarding the extra Japanese civilian casualties that were estimated had the USA not dropped the bombs at Hiroshima and Nagasaki, and I discovered that I was in error.

It was not a figure of 250,000 additional deaths by November 1945.

It was 250,000 additional deaths for each month the war continued.

Source: Robert Newman, Truman and the Hiroshima Myth, University of Michigan Press, 1995

Presumably this is why Admiral Mitsumasa Yonai confided to a colleague:

"The atomic bombs and the Soviet entry into the war are, in a sense, God's gifts.'

Source: Sir Max Hastings, op cit

We've Always Been Somewhere

Stuart McCarthy : "That's part of what I've been saying for the last few years, Paul (the other problem of course being massive private debt)."

Yes I know. I've been reading it for at least six months.

Yet, in between your socialist taunts you still seem to be denying that peak oil will cause any significant economic impact.

No this is not correct Stuart. I've always doubted when peak oil was due (never stated that oil will last forever), and I've always doubted how the end (of oil) would play out. I have never ever agreed that the end to energy as we know it is close to tomorrow - nor as devastating as some (general commentators) would like us all to believe.

Note: I've never taunted you about being a "socialist". I've answered questions when asked, and made my views crystal clear about what I think of "socialism". I've also endeavored to make my views clear about the policy I think it (socialism) has infected. It has always (and will always) be a personal view and not a judgment on any single individual. Believe it or not; you are one (there are more) person I've never tried to insult - never has a true insult of mine got through the editors at this place! Fact.

This type of forum format works best; quick, sharp, and to the point. That is not always possible to achieve with the intended outcomes.


Gareth Eastwood, Paul Morella and I have been on something that probably looks like somewhat of a tangent in the past two days, talking about the possible answers to the question 'When did Globalisation begin?'. 

That question come up when Paul was critical of John Pratt's Ten Principles of Post Oil-Peak Planning, particularly:

5. Globalisation was a flash in the pan. Peak Oil will drive re-localisation.

I estimate that Paul was well aware that John was referring to the modern neo-liberal form of Globalisation (capital 'G', Gareth) not trade per se, commerce per se, or the spread of ideas generally. 

I reckon he knew John was talking about Globalisation in its modern form, Globalisation as it manifests today and the Globalisation we have the opportunity to re-shape.

That's what relocalisation is about - re-shaping Globalisation for our greater good.  It's an interesting idea, one I see as congreunt with the broader concept of altermondialisme / alter-Globalisation, and if we could begin a conversation about that, then that'd be a reasonably constructive use of our time.  It'd certainly be back on-topic, picking up the theme Lionel had introduced in his open letter to our Prime Minister.

I'll start by saying that I totally agree with John that after Peak Oil comes greater relocalisation (as a means of trying to cope with the consequences of Peak Oil).  What would be better is if we can make use of relocalisation now to try and prevent, or at least reduce some of the pain coming after Global Peak Oil.

Ancient Egyptian paper exports

Craig Rowley, I don’t know about ten thousand years, records get pretty sketchy back that far. I’ll stick with my original wording of "thousands of years." Here are three brief examples; for “accurate accounts” you’ll have to do your own research.

Ancient Egypt: Further development of the wheel (e.g. chariots), writing and paper (i.e. advances in transport, communication and info tech) spread Egyptian ideas on politics, economy and culture. Ancient Egyptian exports of paper allowed the civilizations of the Mediterranean to write. Ancient Egyptian culture is still evident today; Stargate would be a TV example.

Ancient Greece: The impacts of developments in medicine (Hippocratic Corpus), politics (democracy), sport (the Olympics) and maths (Pythagoras) are still felt in all corners of the earth today. The spread of these ideas and science could only have occurred via a process of ‘globalisation.’

The Silk Road: goods and ideas have transited along the Silk Road since BC. As transport developed, the distances involved grew, a perfect example of ‘globalisation’ in practice in ancient times.

Ancient Egyptian paper exports: A global trade?

Could you please go on, Gareth, to now elaborate on the geniunely global system of intercontinental trade existing thousands of years ago? 

The one facilitating the spead of ideas and science, customs, culture, Stargate scripts or whatever eminating from Ancient Egypt, Ancient Greece and transiting the Silk Road to the peoples inhabiting this great southern land at that time, for example?

Socialism and so forth

I think it was Brian Toohey in the AFR who commented on Bush's address to the Chinese.  He pointed out that he was criticising the Chinese for being too capitalist (saving too much).

Communist systems hit their demise and few I know mourn their demise - so far as I'm concerned it was a moment for great rejoicing.  This was ridiculously misrepresented as a triumph for capitalism.  All the modern democracies have a MAJOR role for government intervention.  There simply aren't any capitalist societies (if there ever were any - perhaps in some industries in some places in the 19th century).

It may well be the delusion of the god of the market kills us.  It certainly won't be faith in the false messiah of capitalism that saves us. 

Still Alive And Kicking

Those who have been preaching the recent death of Socialism should have informed the Blair, Bush and Howard governments. They  have taken no notice that it's demise was so imminent.

Never have three governments revelled in corporate socialism as this bunch over the past 10 years. $$Billions - no make that $$ trillions of taxpayer money funnelled to private "enterprise".

Witness the great orgy of privatisation in the UK - if it ain't nailed down it's sold off to the lowest bidder with a taxpayer subsidy guaranteed when your private corporation plunders the profits and downgrades public facilities. Never mind - there will always be a Blair / Brown handout in the millions to keep you afloat (and co-incidentally a la Bob Carr and the Macquarie Bank - a well-paid sinecure for former government ministers).

Same same USA - same same the Howard government. It's just in the marketing - give it another name and the general public agree in unison. Call it a farmer's subsidy or an export grant - anything except the scary "S" word.

All we call for (Greens and Socialists and the like-minded) is a little more fairness in this largesse. And it will happen. Capitalism is doomed  because as it rapidly speeds up - it simply eats itself up. Doesn't even need a push.

The Lethal Fantasy at the Heart of the Green Delusion

 Evan Hadkins: "As to the real price of something.  I doubt there is any such thing - all markets are political constructs."

It is precisely that lethal fantasy which will doom the Green agenda to futility and disappointment, even as it doomed their Socialist forerunners in the late 20th Century.

And it is not altogether uncommon to find the same people wallowing in such a fantasy now as back then.

Really, Bali was a gabfest for children.

Lethal What?...

Evan Hadkins: "As to the real price of something. I doubt there is any such thing - all markets are political constructs."

It is precisely that lethal fantasy which will doom the Green agenda to futility and disappointment, even as it doomed their Socialist forerunners in the late 20th Century.

And it is not altogether uncommon to find the same people wallowing in such a fantasy now as back then.

Eloit, to describe Evan's statement as a "Lethal Fantasy at the Heart of the Green Delusion" is, at best, condescending hyperbole. The Australian governments pump between $9.3 and $10.1 billion per year into energy and transport subsidies, producing a distorted market. This IS a political construct. There are many other such constructs.

Also, try to adopt a balanced view about socialism will you? People who support what you call the Green agenda do not agree with your mean-spirited appraisal of them, and I venture to say, find you to be a bit of a wanker. Drop the wallowing references too please. It is nothing more than a not-too-clever bestiality gag, delivered by a hyper-capitalist shill.

Developing nations

Well hey, I'm going to agree (in a way) with  Eliot Ramsey in his sceptical attitude to treating China as a developing nation.  I think for the purposes of global warming and emission control that it is more realistic to distinguish between development and industrialisation. That way it ought to be clear that two key economies with a population of over 1 billion each are not developing nations - China and India.  They are developed nations with substantial populations, sophisticated cultures and complex histories.  Both are attempting to switch their mode of production to industrialised market based economies.

The idea that the industrialised North or industrialised outposts of the old Colonial North (like Australia) are obliged in some way to extend special consideration to either India or China so that they can industrialise and commodify their economies is nonsense.  

China is a totalitarian society in which oligarchical Communist party inner circles are enriching themselves and their families with  a view to entrenching their long term interests in a new market based economy centered on industrialised production.  What does anyone else owe these people?

India has been a democracy to greater or lesser degrees since the partition. If there are entrenched problems of poverty, hunger, homelessness and so on in India then these are the consequences of the failure of Indian democracy and no-one else. 

Admittedly in India much of the fracturing of agrarian solidarity derived from the policies of the British Raj but if there are historical scores to settle then the poor of India can be directed towards those Indian landowners and millionaires who reaped the benefits of co-operation with the British.  Similarly, if the hundreds of millions of Han peasantry have a grievance it is with the Communist Party of China.

So, India and China have some sort of right to industrialisation at a time when the rest of the industrialised world is coming to terms with the global consequences of over industrialisation?  I don't think so.

Love that car

Ian McPherson: "It has also been argued that the war was already won, prior to Hiroshima and Nagasaki."

Not according to the Japanese military government at the time which refused to surrender even after Nagasaki, and which then lent its support to a coup attempt against the Emperor and civilian Ministry after Hirohito sacked them.

A revisionist account of the events surrounding Japan's surender has gained popularity in recent years, partly because so many of the Japanese themselves have not accepted their guilt and wish to portray themselves as the 'victims' of the outcome, and because of a compelling need amongst others to besmirch the reputations and belittle the sacrifices of the Allies.

Some 15 million Chinese died under Japanese occupation, which continued even as the atom bombs fell.

The Japanese occupiers murdered or were otherwise responsible for the deaths of more civilians in Manila alone during the liberation on the Philipines than died in either Hiroshima or Nagasaki.

One estimate of the likely civilian deaths in Japan had the atom bombs not dropped and the war continued to November as about another 250,000. I'll get reference for you.

120,000 Japanese soldiers died defending Okinawa.

What's interesting about the US Navy submarine blockade is that despite its devastating effects on Japanese energy supplies from its overseas colonies and other supplies to Japanese industries, the Japanese were still able to prevent a Russian invasion of Hokkaido (even after Nagasaki) and still kept armaments industries going (albeit at a greatly reduced level of activity).

Did you know that Mitsubishi used slave labour taken from China and POWs from elsewhere? They've never accepted responsibilty for this.

Odd they don't mention that in the television ads for the new 380 model?

Also, unlike Germany and Austria, Japan has never made reparations to any of the millions of its wartime victims.

So when did globalisation begin?

Craig Rowley, so when did globalisation start? Stone age, Bronze age, Iron age, Medieval times, yesterday? 


If you define globalisation as (from Wiki) 


Globalization is the increasing interconnection of people and places as a result of advances in transport, communication, and information technologies that causes political, economic, and cultural convergence.” 


then globalisation has been in progress for thousands of years. The WTO is simply a body that has been used to manage or restrict (depending on your view) globalisation. The WTO does not need to exist for globalisation to proceed.

Gareth's account?

Gareth, if you can give us an accurate account of the "advances in transport, communication, and information technologies" that caused "political, economic, and cultural convergence" ten thousand years ago then I'll consider believing globalisation is a ten thousand years old phenomenon. 

Friedman's account

Just been reading Thomas Friedman's The World is Flat

Tom thinks the Globalisation of today is Globalisation 3.0.

And he says Globalisation 1.0 didn't happen thousands of years ago.

According to Tom, it "lasted from 1492 when Columbus set sail to 1800."

Petrol at 30 cents a barrel

Stuart McCarthy, how about another cost comparison for water vs petrol? 


The cost of water out of a Sydney tap peaks at around $1.90 a kL. That’s two tenths of one cent per litre. Compare that to petrol at the bowser: now petrol looks awfully expensive.

Why Confused, Hamish ?

Most of FDR's policies were straight out socialism – a massive injection of the public's money into the economy to create jobs. You know – the complete opposite to the hoary old capitalist fantasy that allowing the rich to get extremely rich on the backs of cheap labour – that little bits of their wealth fill trickle down to the poor, perhaps enough to buy a tombstone.

As one of the world's most respected economists said in 1999 (and sadly his name escapes me but I will track it down), socialism in some form or other will be the norm within 50 years and it's only when a certain number of businessmen have been belted over their heads with bricks by the poor wanting their briefcase that they will begin to realise that it's the safest option. Which was really just a variation of "eat the rich".

Just clarifying if I may?

Ok Michael, and thank you for answering my question. Well I think you answered it, and forgive me for asking for a confirmation. 'Socialism' - "straight out" socialism no less - is "a massive injection of the public's money into the economy to create jobs," even whilst, I think you'll have to admit, the billions of daily decisions about what is to be produced and for whom are still made by the market, something FDR believed in strongly, as did Keynes.

It's different to any of the things that used to be called socialism, that's all, so forgive me for seeking clarity. I can see that it's contrary to the laissez faire ideology that some contemporary politicians appear to believe in, and I can see the sense of it being, "complete opposite to the hoary old capitalist fantasy that allowing the rich to get extremely rich on the backs of cheap labour – that little bits of their wealth fill trickle down to the poor, perhaps enough to buy a tombstone," though to be honest I think you overstate this. But if Keynesianism is now called, "socialism," then there's more questions to come.

Pray for a miracle?

Evan Hadkins: "I'm no economist so the costings will have to be someone else's job."

Well, if the oil is running out, it will just price itself out of the market.

If other fossil-fuels, such as liquefied coal oil, come on line due to them becoming comparatively cheaper than the fast disappearing regular oil, then you'll need some kind of punitive impost or tax to make the liquefied coal oil fuels more expensive than the much preferred 'green' alternatives.

Unless by some miracle, somebody comes up with a cheap, green alternative.  Ha ha.

Fuels being price-inelastic, this means the greater part, if not the whole incidence of the tax would be passed on to consumers. Just as with petrol costs now.

Alternatively, you might massively subsidise green alternative fuels so they're artificially priced below the coal oil derivatives or other 'dirty' fuels.

Thus setting up a doubtless bewildering array of cross-market price allocation distortions. Or 'socialism' as it used to be called.

Either way, you can kiss goodbye to the world as we know it. Except perhaps those little bits still based around hunter gathering. Such as Cuba, for example, the favourite 'Peak Oil Movement' idea of how to 'succeed' in the post-oil era.

Miracles and Markets

Yes Eliot, hope for a miracle may be the only realistic option.

It will not come from the god of the market.  As you point out these are human creations and subject to such mundane things as price inelasticity (which means it is hard for alternatives to get a foothold).

As to the real price of something.  I doubt there is any such thing - all markets are political constructs.  The idea that human labour or our planets resources have a 'true' dollar doesn't hold much water.  Are movie stars really more valuable than your family GP?  Should tapping wind and sunshine really cost more than exhausting a finite resource?

the world's largest creditor nation

Ian McPherson says:

From 1900 until 1970, the US was the undoubtedly the world's dominant energy player. Since its oil production peaked in 1970, and the it has had to import increasingly more oil from other countries, it has morphed from the world's largest creditor nation into the world's largest debtor nation.

How much oil does China, the world's largest creditor nation, have?

Also, according to Emperor Hirohito, the Atom Bomb played the decisive role in his decision to surrender in 1945.

Not to mention the US Navy submarine blockade which was starving the Japanese to death. And Russia's decision to declare war on Japan after Hiroshima then invade Manchuria, Korea and parts of Japan itself.

RE: The World's Largest Creditor Nation

Hi Eliot,

How much oil does China, the world's largest creditor nation, have?

Not that much. Chinese oil production is expected to peak as early as 2015, and then go into decline. Which is why they're scrambling all around the world, cutting deals with anyone who'll serve them; Saudi Arabia, Venezuela, Iran, etc.

Also, according to Emperor Hirohito, the Atom Bomb played the decisive role in his decision to surrender in 1945.

It has also been argued that the war was already won, prior to Hiroshima and Nagasaki. But the traditional logic runs that dropping the atom bombs helped save lives.

Not to mention the US Navy submarine blockade which was starving the Japanese to death. And Russia's decision to declare war on Japan after Hiroshima then invade Manchuria, Korea and parts of Japan itself.

Oil powered the US navy blockade. And one of the reasons the Soviets were able to assist is because Hitler did not capture the oil fields in the Caspians, which the Soviets were reliant upon.

By early September 1941, German forces had moved deep into European Russia, within easy reach of the major cities of Kiev and Leningrad. On September 10, Hitler decided to concentrate on the invasion of southern Russia and the Ukraine, hoping to gain access to the region’s economic resources, which included the wheat fields of the Ukraine, the citrus farms of the Black Sea coast, and the oil fields of the Caucasus.

Some more information for Eliot

Japan: Militarism and WW2 (1912 - 1945)

In 1940, Japan occupied French Indochina (Vietnam) upon agreement with the French Vichy government, and joined the Axis powers Germany and Italy. These actions intensified Japan's conflict with the United States and Great Britain which reacted with an oil boycott. The resulting oil shortage and failures to solve the conflict diplomatically made Japan decide to capture the oil rich Dutch East Indies (Indonesia) and to start a war with the US and Great Britain.

In December 1941, Japan attacked the Allied powers at Pearl Harbour and several other points throughout the Pacific. Japan was able to expand her control over a large territory that expanded to the border of India in the West and New Guinea in the South within the following six months.

The turning point in the Pacific War was the battle of Midway in June 1942. From then on, the Allied forces slowly won back the territories occupied by Japan. In 1944, intensive air raids started over Japan. In spring 1945, US forces invaded Okinawa in one of the war's bloodiest battles.

On July 27, 1945, the Allied powers requested Japan in the Potsdam Declaration to surrender unconditionally, or destruction would continue. However, the military did not consider surrendering under such terms, partially even after US military forces dropped two atomic bombs on Hiroshima and Nagasaki on August 6 and 9, and the Soviet Union entered the war against Japan on August 8.

On August 14, however, Emperor Showa finally decided to surrender unconditionally.

Choke Hold: The Attack on Japanese Oil In World War II

After WWI, Army airmen like Billy Mitchell, in a bid for service independence, touted land-based air power's dominance over ships. Later, airmen at the Air Corps Tactical School developed a theory of independent air power application based on strategic bombing. These airmen persuaded Congress to purchase the tools to implement strategic bombing-fleets of heavy bombers-by citing these aircraft as optimum for defending the US coasts against enemy ships. However, when the opportunity to test the efficacy of bombers against ships presented itself in WWII's Pacific Theater, Army Air Force (AAF) leaders proved reluctant to throw their full support behind such an effort.

A key aspect of the US Navy's Pacific strategy was an intense campaign against Japanese commercial shipping. This blockade, primarily targeting oil after late 1943, was spearheaded by US Navy submarines. A blockade proved the most effective means of attacking Japan's oil, although AAF leaders preferred strategic bombing of the Japanese home islands, including oil facilities, over blockade support.

This thesis analyzes the campaign against Japanese oil to explore why an oil blockade was effective against Japan and, more important, to examine how service parochialism distorted the development of a rational military strategy in the Pacific Theater. The US will not likely enjoy such luxury again.

Proposals Please

In the same spirit as MBD let's get some creative thinking going and come up with some ideas for ways forward.

I'm no economist so the costings will have to be someone else's job.  (A cop out I know, but it's just not my area of expertise).  My first proposal is the franchising of a green retro-fitting and technology installation company.  Support and publicity for green minded developers and developements (such as Phil Little in Queensland - don't know if he's still around it's been a few years).  Change to zoning laws to promote more retail and services in suburbia so that they are more likely to be walking distance.

Melbourne 2030

Evan, when you suggest change to zoning laws it reminds me of an aspect of Melbourne 2030, the Victorian government's plan for sustainable metropolitan growth.

I like the plan, others don't

I think the following extract from an article by Kate Shaw (a Research Fellow in Architecture, Building and Planning at the University of Melbourne) sums up the problems people think they have with the plan as well as revealing the real problem:

Melbourne 2030 introduces the idea of an urban growth boundary and proposes an increase in residential densities--principles that now guide all council planning decisions. Yet protests persist. The problem is no longer bad design and ad hoc decision making; according to the current crop of resident groups, the problem is the metropolitan plan itself.

What's going on here? Melbourne 2030 certainly has its flaws, arising mainly from poor management and lack of commitment, but there's something not quite right about a group of Elwood residents being 'shattered' by the approval of a four-storey block of flats. (Elwood's character is defined by blocks of flats.) Or Northcote residents hotly opposing five-storey development on High Street (which has a number of heritage-protected buildings around that height). Or Camberwell residents going ballistic over a commercial development next to a train station on a major road. Even the conservative Save Our Suburbs group (which led the charge against the Good Design Guide) supports the concentration of development in retail centres so as to ease the pressure on residential streets.

In other cases, Melbourne 2030 is blamed when it's not the real issue. When residents of Balaclava mobilise against a proposal for a rooming house, and groups in North Fitzroy organise against public housing near their park, this is not about development. This is about the 'wrong kind of person' moving in.

Melbourne 2030 has been held responsible for loss of social diversity, too. One of the Collingwood Action Group's arguments against the recently approved Banco development in Smith Street was that it would contribute to the gentrification of the area. But when the group achieved a reduction in the height of the proposal, it was at the expense of the component of low-cost, car-free student accommodation. The approved design now provides uniformly up-market housing.

Not all these protests are the same, clearly. In some cases there is real concern at the lack of state funding of public services to sustain the increase in Melbourne's population. In others it's the lack of support to local councils to upgrade their own infrastructure. In yet others it's the principle of the loss of local democracy (although this depends on the side the council is on). Sometimes it's just about good old-fashioned self-interest. But the 'planning backlash' rally on 3 May boils them all down to opposition to any increase in residential densities at all.

Why is an increase in density such a problem? There are good arguments for it: more small dwellings for the growing number of small households; better use of public space; more even use throughout the day of public transport; more opportunities for cultural interaction; minimisation of individual ecological footprints; reduction of urban sprawl. What are the arguments against?

The main one seems to be traffic congestion. But as Melbourne is already congested, a more sensible response would be to campaign for improved public transport to alleviate existing and future problems. A close second is air pollution; the same counter-argument applies.

A third argument against is the impact on water supply. But urban consolidation itself does not increase demand for water: this argument is only relevant if we're talking about total Australian population increase. Melbourne 2030 simply attempts to accommodate what is largely the result of Federal policies.

Perhaps the most persuasive argument is that medium and high density development delivers windfall profits to developers. Indeed, why should permission to develop land make selected people very rich? The concept of giving something back is well understood in most advanced economies. It is expressed in a multitude of ways throughout the world, including betterment taxes, inclusionary zoning, developer contributions, percentages of development given to social housing, ecologically sustainable design, community facilities and so on.

Where is the discussion in Melbourne about net community benefit? The problem here is that resident objections and ambit claims from developers have become a vicious circle, precluding meaningful debate. We end up in VCAT, where the future of the city is decided by lawyers.

Where is the discussion about what we as a society want from metropolitan planning other than 'no change'? Where are the resident group protests at the lack of adequate funding for public transport and affordable housing? What about questions of social equity? What is the government doing to encourage developers to be socially responsible and residents to be receptive to change?

Unfortunately, the government response to the current deadlock is to consider winding back public participation in planning. If priority development and development assessment panels come to replace local councillor and resident input into planning decisions, as is being mooted, the resident groups co-ordinating the 'backlash' will have themselves partly to blame. And our whole city and community will be impoverished for it.

Economic superpower is world's worst for CO2 emissions

Say, Kevin. Maybe you can answer this one:

If China is the economic superpower everyone now claims it is, and the US economy is in the final stages of its 'imminent demise' as leading child psychologist Steve Buddulph and other such geniuses claim, how come at Bali you included China among the 'developing nations'?

You know, like New Guinea? And Fiji?

Does China need its two new coal-fired power stations a week to feed the starving peasants? Or not?

I mean, China is now the world's biggest emitter of carbon dioxide, surpassing the output of the United States.

Yes Right

Craig Rowley, globalization began the day one village "exchanged things" with another village. Curious how a word describing the progression of humanity can gain such a negative connotation, don't you think?

They were busy preparing for the next WTO round in the Franchthi Cave, weren't they?

Given that such sit downs, deal with artificial barriers to trade; the answer would be no. As I originally wrote, such restrictions are the real latter day "flash in the pan".

Curiouser and curiouser

It was trade that began the day one village "exchanged things" with another village; not Globalisation.

You're free to employ Humpty Dumpty language if you like, Paul.

I'm content to go with the majority of the world's peoples and keep assuming that Globalisation really does need to involve something on a global scale.

Ever Seen A Homeless Guy Drinking Perrier?

Stuart McCarthy: "That's cheap by any measure Paul. Perhaps when petrol costs $3.00 a litre you can start calling it 'expensive'."

The bottled water comparison is totally misleading. Get an average working family to buy around twenty bottles daily, and than we will talk about cheap. Gasoline is of course only one segment of the energy costs people face. The cost of energy is built into every single item that is moved from A to B - basically everything. Not to mention living expenses such as electricity and gas etc. I think you will find added with food (which also has an energy cost) this by far and away takes up the bulk of the middle and lower income family budget. As income levels rise the percentage of these particular costs lowers - and of course the reverse of that situation occurs the lower the income level. 

The comparison is used (rather cunningly) as a way to lessen the impact of what surely will occur for many people. Rather bring another myth to mind: the myth that the "North American Empire" was created on the back of cheap energy. This particular myth centers entirely on the golden period 1950 - 1970. Naturally it does not take into account a little thing known as WWII - a small conflict that decimated both Europe and Asia. North America similar to Australia was fortunate enough to still have "things" when others were left nothing - a lucky break that allowed rapid domestic and external economic growth.

Now We're Getting Somewhere Paul Morrella

Paul Morella: "Gasoline is of course only one segment of the energy costs people face. The cost of energy is built into every single item that is moved from A to B - basically everything. Not to mention living expenses such as electricity and gas etc. I think you will find added with food (which also has an energy cost) this by far and away takes up the bulk of the middle and lower income family budget."

That's part of what I've been saying for the last few years, Paul (the other problem of course being massive private debt). Yet, in between your socialist taunts you still seem to be denying that peak oil will cause any significant economic impact.

The Myth of US Energy Dominance?

Rather bring another myth to mind: the myth that the "North American Empire" was created on the back of cheap energy. This particular myth centers entirely on the golden period 1950 - 1970. Naturally it does not take into account a little thing known as WWII - a small conflict that decimated both Europe and Asia. North America similar to Australia was fortunate enough to still have "things" when others were left nothing - a lucky break that allowed rapid domestic and external economic growth.

Now Paul, there is some merit to what you say, but you ignore the fact that the US virtually invented the oil industry, was the leading oil exporter to the world for two thirds of the 20th century, and won two world wars by controlling the enemy's oil supplies and devoting its own to the conflicts.

Remember Pearl Harbour (the response to the US's oil embargo on Japan), Rommel running out of gas for his tanks in Africa, and Germany developing the Fischer-Tropsch process to produce synthetic diesel oil from coal in WWII? Even the much-vaunted allied air superiority was due to the oil-control of the allies. The US also maintained an oil embargo against Spain, to try and keep it neutral during WWII.

From 1900 until 1970, the US was the undoubtedly the world's dominant energy player. Since its oil production peaked in 1970, and the it has had to import increasingly more oil from other countries, it has morphed from the world's largest creditor nation into the world's largest debtor nation. There are a myriad of factors involved in this transformation, but to claim that the cost of oil imports has nothing to do with it is a little disingenuous... :)

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