Paul Krugman Joins Peak Oil Cult

It's interesting to see that Paul Krugman, ace economist of the New York Times opinion pages, has lent his stately name to the Peak Oil Theorists. For those not already intimately familiar with this concept, "peak oil" (or Peak Oil) is that theory that holds that a moment comes when the practically accessible supply of crude oil is 50% depleted. It can happen in a country, as it did in the United States in about 1971. Or-- and here's the Big Oily Enchilada --it can happen in the world. After peak, the world's supply becomes progressively more difficult to recover. Maybe it happened in 2006; maybe this year; maybe 2011, but soon, and for the rest of your life. Peak Oil guys should be forgiven their current delirium at their new-found credibility; after all, they have often been treated with the same disdain as those claiming to have been proctologically examined in an alien saucer.

No, with oil currently cresting at $125/barrel, up from $20/barrel only seven years ago (coinciding with the start of the Bush years), their heyday has arrived. They even have a society for true believers, the Association for the Study of Peak Oil (ASPO - although I think they should take two letters for Association (As) and add "Theory" to the acronym, so you get ASSPOT - more colorful). ASPO meets on a regular basis and wallows joyfully in the bad news - we're running out of oil! Their arch-nemeses are the Cornucopian nut jobs, like the late Julian Simon, who advance such ideas as the "creamy nougat" center of the Earth, that we sit atop a vast ocean of oil just beneath - well, way beneath - the surface. If I remember my geometry right, Earth ought to have a diameter of about 8,000 miles, so if we can learn to drill down on a radius of 4,000 miles we can reach any interior point beneath the surface. I've never quite understood how Cornucopians could logically posit the infinite supply of anything on what is, after all, a finite planet. It seems to violate one of those Basic Laws. The Basic Law of Reason, perhaps.

I don't have any geological reports lying about my house, so I lack an independent basis for judging. Peak Oil Theorists (POT Smokers?) and conservatives, as Krugman points out, are at loggerheads over the issue. Conservatives want to argue that their beloved free market system is being gamed by speculators, who ordinarily would be among their Robber Baron heroes. The whole idea of being a modern Conservative is that you get to cheat while receiving the adulation of a meretricious society. As long as you wear a flag lapel pin, as I've said before, you can bet against the dollar, hope homeowners are thrown out on the street so your short-play on the subprime market works, and still be considered more patriotic than a guy like Barack Obama, who, after all, is named Barack Obama. That's because this country is really, really stupid and superficial.

I think I'm digressing. So the conservatives want, nay need, to believe there's plenty of oil and it's just those guys with the goatees and head scarves who are incomprehensibly refusing to pump it out of their "elephant" fields (another swell ASPO term), along with the aforementioned greed-heads who are buying commodities futures on NYMEX. The ingratitude! We sold the Arabs fancy radar planes, we let them buy our banks -- where's the frigging oil, Abdullah? But is the Ghawar field in Saudi Arabia still an elephant? Is it more rhino size now? ASSPOTS have wet dreams in which they see the Ghawar sputtering, crashing (their preferred term), as the Saudis furiously (and clandestinely) pump vast amounts of seawater into the wells to force the remaining dregs out. Bush, siding of course with the Conservatives, as always, as he is congenitally programmed, does what he can to importune the Saudis to pump more oil - hugging them, kissing them, holding hands with eighty year old men wearing bath robes -- begging them. Still, they won't pump more.

Because they can't pump more? ASSPOTS, you see, have a vested interest in the total failure and breakdown of a car-glutted society, with its mindless salients of suburban cracker box houses, its mini-malls, its chain motels, its fast food joints. You know -- America. For the ASSPOTS, oil shortages represent the tool, the wedge with which they'll pry this mess apart. It is why an ASSPOT such as the Clusterfuck Man, Jim Kunstler, impatiently dismisses any talk of a substitute form of independent travel, such as an electric car, even though the Israelis are in the process of building an electric grid based on renewable energy to power just such a system. The whole thing needs to fall apart.

And for the Conservatives: the whole thing needs to hold together, because they are making so much money. The super wealthy financial manipulators want oil to be expensive, because it's another place to make money; but not so expensive that the system begins to break down. They can't believe that members of their own tribe would be so selfish as to subject ordinary Americans to an unsustainable burden, just to get rich faster. The Conservatives think just like the Saudis -- the American consumer needs to have the life squeezed out of him slowly, gradually, occasionally allowing him to breathe through a price reprieve. Sort of like a boa constrictor working on his evening's supper.