You know from my experience watching the various end-of-the-worlders, is that nothing happens as anyone expects.

And while I tend to believe the peak oil scenarios of disaster, I also suspect there's more than a few that are attempting to profit from this situation.

Some by being bellicose, abrasive, brash, and insulting (ala Kunstler) are probably laughing all the way to the bank

We should also view this as a test of American resolve.

China is holding a lot of dollars - if the US says not to their Unocal purchase, it is effectively saying that the dollar is no good except to buy what we allow you to. I don't think this will happen - if the bid is accepted, the deal will probably go through in some form.

But China has BILLIONS of US dollars that it wants to trade for assets, because they believe that our financial situation is tenuous. They have said as much repeatedly and publicly. If the dollar shhots itself in the foot, they have nothing. If they use these dollars to buy hard assets, then they have something if the dollar chokes on its own debt.

If this trend continues, and they begin to make big purchases worldwide, then it will spook the dollar anyway, maybe...

People really need to understand that until the very recent future, control of commodities and other industrial inputs is highly political. Only through successive rounds of trade negotiations and globalization in the context of no major wars between the great powers do international markets exist. History is littered with examples of closed systems (countries, blocs and alliances) that compete against each other for resources. The current open system is a tenuous one at best and would collapse with either the end of American hegemony or the rise of closed systems. Oil will be the major resource to secure for domestic consumption in the new world order.

My humble respects, J.

I expect the Unocal sale to be blocked. I do agree that China is trying to convert their dollars to hard assets. I can't wait to see their next move.

karlof -

What do you base that on? Management is thinking it will go through for the foreign assets, but the US assets will remain...

and you can skip the respect stuff - my hide isn't that thin...*grin*

I think the USG will block the sale citing national security; if you can get in a neocon's shoes for a moment, I think you'll see why. Whatever the outcome, the details will prove interesting.

Well, you just might be right, karlof.

I hadn't adpoted the paranoid mindset before, but considering that, you could be right. It depends on whether their paranoia outruns their personal greed....

But like you, either way, it's another very interesting brick in the roadway to our future.

Protectionism taken to extremes with China has the potential to spark a major international financial crisis, all on trade. I do not believe that the US Govt will block the sale of Unocal.

Fundamentally because it makes no sense. BY UNOCAL's OWN ADMISSION, and I quote their CEO (this was before the bid, not after) "Unocal is an Asian Natural Gas Company".

The bulk of Unocal's reserves are FOREIGN ... far away from the US, and are in Natural Gas, not Oil.

For some bizzare reason this simple fact has escaped the media and pundits, political and otherwise.

Sparking a trade war that could easily plunge the entire world into a recession or depression (seriously, I am not being dramatic) over an oil and gas company with limited "strategic" value to the USA is not something I'd expect Congress, the Senate and the Executive Branch to let fly.

On the other hand... put your tin foil hats on for this one... if indeed there is a secret department of Peak Oil deep in the bowels of the Defense Department with what they believe to be hard data pointing to a massive liquid fuel crunch in the next 10 years, a global depression would be *exactly* the sort of short term remedy one might consider rolling out to prolong what is already there.

Of course there are many flaws with that scenario, not the least of which is investment in exploration will plummet and cause peak oil to roll up faster LOL.

Back to Unocal... it makes no sense to block on security concerns. Better to let the market sort it out. Shareholders may decide they feel like being "patriotic". Expect a big media battle on behalf of both sides if it goes to a competitive vote.

ps: China isn't interested in seeing the US dollar tank - their investments go along with it and so does their capacity to build navies, buy oil and other resources, etc. If anyone is interested in seeing the USD tank its the US government, if indeed the tin foil hat scenarios have any basis in reality. Cut your opponent off at the knees economically without firing a shot...

ps ps - I think China is playing this exactly right. The entire bid for Unocal is one big test.

They are testing the resolve of protectionist forces and free traders in the US to see which wins. If they are denied equal access to bid on Unocal I expect China to quietly stand back, politely say thanks, and then aggressively but quietly pursue other strategies on a faster time table.

They picked Unocal, IMO, because it actually is one of the most sensible targets -- for them. Little oil is involved. Most of the assets are in Asia. They can, if successful, show how they can be a model foreign investor and thus open up the potential for more such deals in the future.

If denied the opportunity to compete fairly, I've no doubt that we'll see a rapid series of agreements and purchases... in other countries.

let's take this from the political rationality point of view for a moment...

if you're the neocons, and you want to stay in power, which one is easier to sell to the American people?

a)Those Red Commy bastards starting a trade war (i.e., a trade war is widely regarded as starting the Great Depression is it not?) and the resultant depression OR

b)well, we want you to stop using oil because, well, you have to, and we didn't have the foresight or the wherewithal to stop the economic wheels from churning to do the right thing to make this society land softly...

and, even better, we can still make money from a trade war...you peons can't. Ha ha. Have a nice a day.

also, on another note, I will be kind of quiet for the next few days, I have to deal with some similar stuff to what J just had to deal with...hope everyone has a good 4th.

Mike--Exxon just admited, finally, that North American NG extraction is in decline. There isn't enough spot LNG capacity, now or future, able to satisfy the USA's projeted demand. Unocal provides LNG. Sentence #2 establishes LNG's national security credentials. Therefore, Unocal will not be sold for reasons of national security.

Speaking of "reality," I've admired this author for what he's done, but here http://www.commondreams.org/views05/0630-23.htm when he concludes, "Let’s declare our independence from domination of Middle-Eastern oil and work for a sustainable energy policy," he gets wrong what's doing the dominating--our petroleum addiction is driving our dependency on imports, mostly NOT from the Middle-East.

It's very annoying that so many people are putting the cart before the horse and have been since the "oil shocks" of the 1970s. No sustainable energy system is going to work in a sustainable fashion until we drastically reign-in our profligate energy use because the amount of energy being used is unsustainable and incapable of being supplied in the current amounts through the use of alternatives alone. For that to happen, I predict our per capita energy consumption needs to be halved in the short-term (next 12 years) and halved again in the long-term (next 50 years). Even then, we would still be using more energy per capita than China does now.

If the US blocks the dea lon national security issues then the dollar will be worth very, very little . . . China doesn't need to show how they can be a model foreign investor. Remember the dueling trips made by Bush and the Chinese premiere a couple of years ago - Bush was booed in the Australian parliamnet and the Chines guy was welcomed with open arms. And the Chinese are buying into the oil sands in Canada will no problems -

I think the Unocal deal is a win-win for the Chinese and a lose-lose for the US. I think the Unocal is a very, very aggressive move on the part of the Chinese and puts us in a very, very bad position. We lose the oil or we lose the dollar, they gain oil or they push the US into admitting our desperate position re oil and a teetering economy (funky dollar, huge debt, housing buble, etc)

GDP grew at 3.8% so on the surface the economy is growing nicely. Economic growth does equal increased energy consumption.

The best way to create demand destruction is to have a sharp recession or depression.

The problem is that is just the environment in which investments in new technology will decline sharply.

Unless the public perceives that this is a peak oil driven economic pull-back, then they won't make righ investments.

GB Shaw observed

"If all economists were laid end to end, they would not reach a conclusion."

Wonder what he would say about oil bloggers discussing economics?

I do believe that China will want to keep everyone happy until the 2008 Olympics. Afterwards will be a different story. So China will likely back off if push comes to shove over Unical and other money/asset issues. As I mentioned in an eariler topic, China has very large pools of savings to tap; the U.S. has virtually none. China is acting as the vendor financier to the world, by purchasing U.S. and other western countriy treasuries, and thereby helping to keep interest rates low, which encourages oridinary folks to buy their McMansions and McMobiles, etc. At the same time, China is benefitting in their own economy by being a source of cheap labour and efficient manufacturing.

The problem for China appears to be that the availability and pricing of energy is not cooperating with their 2008 coming out date. They must be madly pulling all the levers behind the curtain to show cooperation and at the same time not appear too aggressive in their quest for oil and other commodities. After 2008, watch out.

Blocking Unocal on grounds of LNG makes no sense.

LNG capacity has little to do with foreign production and everything to do with foreign processing, transportation and off-loading. There is ample gas out there, now, but not facile methods of getting it to N.A. consumers.

(And for that reason, ECA is and has for some time been one of my largest holdings. I also used to consult for ECA, TLM and a number of other Canadian majors)

The markets that Unocal serves OVERSEAS will remain overseas markets. They need and buy NG as is. There isn't yet the same level of competition for overseas GAS assets as their is for oil.

No, I do not believe the Unocal bid is nearly as ominous as many seem to; I fear the results of overt protectionism morphing into xenophobic nationalism drive by energy worries... a lot more.

No sustainable energy system is going to work in a sustainable fashion until we drastically reign-in our profligate energy use because the amount of energy being used is unsustainable and incapable of being supplied in the current amounts through the use of alternatives alone.

k - amen to that.

The US has the most productive economy in the world; but it also is the largest consumer of energy and in world class economies its hard to overstate just how dependent that productive economy is on profligate use of energy. If you compare energy use per $ of economic output, the US uses almost twice as much as most modern European economies.

Some of the difference is scale - both US and Canada both - big countries, big transportation costs.

What was once fashionable - centralization, hubs, just-in-time "advances" in inventory distribution for manufacturing etc, aren't very compatible with a reduced oil/liquid fuel future.

Back to reduction - Last year I sold my BMW and two years ago bought a tandem bike to add to our collection so I could pull two children or one child and a trailer full of groceries. We've still got one car but drive it a *lot* less. We don't do these things because they are fun or convenient (the latter is rarely true) or because we can't afford gas, we reduced our consumption of all energy but especially petro enerty because its the right thing to do.

And on that note, The family and I are going to hop in the car soon and drive across two states to attend a tandem rally in Bend Oregon this weekend! I've saved up my oil credits for this!

Yay for a fellow tandem owner!

I need another bike, since I now have three kids and two of them are big enough to pedal. They call the trailer the "penalty box"

I can't wait till they are big enough to pull me in MY trailer.

Watkins -

Have you been reading Liu? I ask because he is all about the trade war thing...

I have to agree with some of the comments that the nature of UNOCAL is such that national security is not the issue in this sale. On the other hand, it may be setting a dangerous precedent for the future which could end up being a matter of national security. Either way go with this one it has the potential to cause us some pain.

As for 'trade wars', I have trouble seeing where our present world resource depletion could lead to anything else - I don't have a much confidence in a world wide cooperation happening, or American's on a large scale choosing to reduce their consumption enough to make a difference. (Kudos to all of you who have been taking those steps - I hope it catches on and I am proven wrong).

Regarding Jim Kunstler, I did read some excerpts from his book (not the whole thing) and I had some of the same experience that HO had, disagreeing with things he said. My response to that is, "So what?". Jim has done as much as anyone else I can think of to spread the word about the Peak Oil situation, especially about the expected consequences for the suburban "lifestyle", sprawl, architectural arrangements builit around cars, not people and all the rest. I like it that he goes off sometimes, I feel the same way.

Fungible? So far, and perhaps some of you will remember what happened to the so-called "spot markets" during the 1st OPEC embargo and the Iranian revolution and its aftermath. These markets went wild. I figure that's what will happen first before some nations decide that secure oil supplies are a necessity requiring restrictive trade practices, threats or -- dare we say it? -- military intervention.

China will be very very upset if the Unocal takeover is blocked by direct or indirect political actions in the US.... I hope that doesn't happen.

Here's a related yet unrelated bit of surreal reality, http://gnn.tv/articles/1488/Barrick_Gold_Strikes_Opposition_in_South_Ame...

ben - my stokers are still 7 and 5 1/2 so we are a ways away from having them on their own bike, although I must admit, they are starting to get heavy. Pulling #2 behind on a Piccolo makes for a big slog on steep PNW hills! In theory they are helping more as they grow but as I said, its only a theory ;-)

J - Liu? Doesn't ring a bell. I just remember my history, as well as "Buy America" campaigns back when Japan was considered the big dominant threat.

This time, if(when) petro-access becomes a front page screaming issue, day in day out, it won't be hard to rally public opinion but it may not be productive at first...

I saw Kunstler talk at the World Affairs Council here in SF last month, and was lucky enough to end up going out to dinner with him and a small party of other interested folks afterwards. I think partly the thing people are reacting to is a matter of style - he's a colorful, sarcastic, funny raconteur and that comes through in his writing. It was a very entertaining dinner.

I also think he hated suburbia, and suburban dwellers in the aggregate, all along (he became famous for a social critique of suburbia: Geography of Nowhere). He's secretly, or not so secretly, delighted at the idea the suburbs could be in trouble from peak oil, and that colors his thinking, perhaps unduly in some cases. It also could make anyone who was happy with suburbia rather allergic to his writing.

Finally, I think his M.O. is basically to look around, notice anything that seems to use a lot of oil, and assume it will be in deep trouble after peak. I think a lot depends on the depletion rate. If the depletion rate is slow enough, lots of adaptation may be possible. If it's very fast, all bets may be off. He has no analysis in the book of why it should be fast. I asked him this question, and he basically thinks that because all the folks in the places where the remaining oil is hate Americans, sooner or later we're going to get cut off due to conflict and face a very rapid decline in our available oil. Could well be, especially if we end up losing in Iraq, but it's hard for me to feel nearly as sure of it as he does.

Stuart.

Mike: do a quick search for Liu in the box at the top of the blogger page, we link to a couple of his pieces...then we rip them apart. :)

"ps: China isn't interested in seeing the US dollar tank - their investments go along with it and so does their capacity to build navies, buy oil and other resources, etc. If anyone is interested in seeing the USD tank its the US government."

The value of the Chinese stockpile of dollars would tank with the dollar, but not all of their investments would go down with it. They would still have their industrial capacity and the yuan would probably rise under such circumstances. Their industrial output would give them something to trade for oil, what would the US have if the dollar becomes essentially worthless? And unless they're importing significantly more of the materials used to build their ships than the US Navy does, it's hard to see how a fall in the dollar would hurt them more than the US.

People fixate on the size of Chinas dollar holdings, while somehow forgetting that it is dwarfed by the dollar holdings of the US (both in absolute terms and as a percentage of GDP.) The danger for the US is that someday the Chinese decide that their losses due to a plummeting dollar would be worthwhile in exchange for the damage it would inflict on the US economy.

Petroleum will not be fungible after people everywhere realize that Peak Oil [PO] has occurred. As soon as that recognition sinks in, they will realize that countries that possess proven reserves on their own national territories will be in the driver's seat in the post-PO era. When the leaders of the countries which have reserves realiize this, they will move toward export controls, and they will demand much higher prices for any petroleum that they sell. Probably they will demand that customers help them to develop industrially and, as they develop, they will export less and less petroleum -- they will export manufactured goods, and maybe food produced with petroleum-based fertilizer. Petroleum will be fungible only until PO arrives.

It's been an interesting set of comments to this blog so far. On the Unocal deal, I read about it first somewere, ( bad memory CRS just getting old I guess) anyway, the writer mentioned that most of Unocals assets were in the W. Indiies and China would probably spin the american assets off to Chevron Texaco or whoever wanted them. I also stop by Kunslers page a couple of times a week just to see what he has to say, and read the comments also. The one thing that hasn't been mentioned here is what I heard a couple of days ago. quote "and just think, it would only take about 10 lbs. of Semitec to put the whole world in a smash" unquote The conversation was about Saudi Abrabia and how their oil collection system worked. Prof. Goose Dr. Liu has a good section over at Asia Times. I've Read most of it and it is really scarry (spelling)
http://www.atimes.com/

The old hermit

I think China wins whatever way the Unocal deal goes. If the deal goes through, then they gain control of additional oil and natural gas reserves in the Far East. If the deal does not go through, then they accept that, and begin to more aggressively use non-economic means (i.e., political, military, and diplomatic arm-twisting) to secure oil assets, since the U.S., by the Unocal example, will have established that geo-strategic considerations trump economic considerations when it comes to oil.

Yeah, Roy, when I said China would be upset, I was alluding to what you say they'll do if the Unocal deal doesn't go through because the US blocks it somehow. How this deal works out will indicate to the Chinese what their future strategy should be to secure the oil they want.

I'll add that these potential Chinese actions in case Unocal falls through would greatly destabilize the world oil market. What's unknown is what the time-frame would be.

In response to DonInVA. Yes, but. It rather looks like Bush & Co have been anticipating this and have used the war on terrorism/tyranny/rationale-du-jour to establish a bunch of military bases and client governments all over the relevant parts of the planet. Depending on how well that strategy works -- it's pretty high risk -- we may or may not keep getting oil sent here.

Plus the US does still produce something like 8m bpd and is only depleting at 1.5% a year now. I'm sure we could get down to 8m bpd with a bunch of draconian restrictions on driving -- something like 60% of trips are discretionary and the work week could be rearranged -- but without actual collapse. It would have been better to do it in a more gentle way in advance, but governments always know how to impose states of emergency, rationing, etc if they have to.

I recommend that you learn some economics. Here's lesson one: "The cost of anything is the foregone alternative." That means that what something costs you is really what you don't get instead. You could buy a TV or you could buy a new bicycle. The cost of the TV is the bike and other alternatives that you don't get.

In the case of oil if you own an oil well and you consume the oil rather than sell it, the cost is the foregone alternative - in this case, the money (and what you could have bought with it) you could have gotten by selling the oil. Likewise if you don't have an oil well and you buy oil, the cost is the foregone alternative: the money you would have had if you hadn't spent it on oil, and what you could have bought with it.

As you can see, the situations are symmetrical. Owning an oil well does not change the basic equation. The cost is still the foregone alternative, the things you could have gotten instead of the oil. In short, the Rand quote you disparaged was actually completely correct: "Buying oil wells does nothing to enhance China’s energy security. Oil is an internationally traded commodity and in a time of squeeze, whoever has enough money will get the oil."

Halfin,

Have you looked at the US current account deficit, or its current trade deficit? The US doesn't have much left to sell to the rest of the world. Manufacturing has been outsourced, high paying productive jobs have been outsourced. The number of engineers and machinists being produced is the lowest in decades. And you will not be able to bring back this manufacturing and these jobs at the drop of a hat. It just can't be done without much sacrifice. And I don't see the fat spoilt overconsuming American Joe Q. Public having the wherewithal to do the needful.

The only thing US appears to be exporting is war and misery to people who had no WMDs, or had anything to do with the reasons stated for taking the country to war.

Economics only works between those who are at more or less equal financial footing -- otherwise it leads to exploitation or war. And don't preach to me about studying economics. I have, and for probably longer than you have been alive.

Tell me how economics works if I rob you of everything you own, and then say "Let us engage in Free Trade" And that appears to be the current tack taken by our administration. That is the economics of Empire. Go study something about the economics of how nations have been empoverished and how poverty is brought about in communities.

Rajiv,

Why are you so sensitive. Halfin is making a good and valid point. Why should anyone listen to you. It's obvious your motivation is bitterness and antiamericanism. It doesn't matter what you learned, you are speaking from emotion.

Ths website doesn't have to be a self-rightous circle jerk about the end of the world. I think other opions are welcome too.

Rajiv sees past economics, which is good.

Americans have been indoctrinated pretty hard with globalization -
- sending jobs overseas - GREAT!
- Walmart importing cheap goods from China - YAHOO!
- World Bank loans - SO FRESH! SO CLEAN!

What a load of horsepuckey. Blowback will be hell.

Yes, but sees past economics means doesn't need logic to make an argument. If the facts don't agree with you, attack the facts. So now economics is wrong, not your wise Rajiv.

As you see it all the end of the world posters are in a lose-lose situation. Either you are right and everyone is suffering or, more likely you are wrong and have to live with the idea that Americans are doing just fine.

Economics is only a useful description of trading relationships between nations at peace with each other. Once nations do not have a peaceful relationship, the calculus of military strategy applies and it's completely different (what Edward Luttwak calls the paradoxical logic of strategy). Even in peacetime, the contingency of conflict may influence behavior in directions that are economically irrational but make sense strategically (eg if you already own a bunch of Asian gas fields, let's say, it is a lot easier to station some forces there in advance than capture them by force after hostilities break out). If China's gas reserves, that it paid good $$ for, are in Thailand or Indonesia, then if the Thai government ever nationalized them, the Chinese would have an excellent pretext to invade, which would be completely lacking if they belonged to an American company.

I agree. The blowback will be hell. Economics isn't everything. It is not an all encompasing system that explains everything. Even Physics can't do that! The May 2005 Harper's has an excellent article: Let There be Markets: The evangelical roots of economics by Gordon Bigelow. An excellent perspective on the whole mess that is economics.

Bob,

What you didn't get from my post, and what I had left unsaid is, that Money is only an artificial means of exchange, and a money accumulation without having any productive assets to back it up is a recipe for disaster. Money may be an asset, but it is an artificial one, for its value depends upon an agreement between economic players to use it to get "real" assets. In the case of CNOC, it is the purchase of the "owned" assets of Unocal. If the US reneges on the implicit promise implied in its purchase of goods from China in exchange for US dollars -- then it basically nullifies the agreement made that those dollars are able to purchase "real" assets. The so called fungibilty of goods is no longer true, and then the only thing that matters is the real assets that you own and have under your control. So if you are the person with large paper assets, and no "real" assets, you are like the person who has been robbed, and are no longer able to engage in economic trade, or for that matter (in an extreme case) be able to live. This was my point about studying how empoverishment comes about in countries and in communities, and the destruction it brings

The primary asset of a country or a community is the ability to bring about a level of sustenance for its members. So when a community is no longer able to sustain itself with the resources it has within to use or to trade with, then it either enters into poverty, or it tries to acquire those resources from other communities by force. There is a third option, which is one of trying to rejuvenate the community from within, but it is a slow task, with many sacrifices and sharing of resources required of the community members. It is this attitude that I am finding missing in much of the American Public today. The US administration seems to have opted for Option 2

(I can't believe Prof. Goose wrote paean when he obviously meant peon.)

The UnoCal bid isn't the first shot in an economic war; it's just the first place that China might get some pushback.  China has been playing fast and loose for years, with its artificially low peg for the yuan against the dollar.  That's been their main means of taking all the manufacturing jobs from the USA, and Europe, and Mexico, and much of the rest of the world.  US officials have raised the issue of the currency peg with Beijing, so far without any favorable outcome.  Telling Beijing that they aren't allowed to grab more stuff is just fine.  If Beijing is unhappy, what can they do?

Not much.  Their whole economy is export-driven; if they stop exporting, they'll have enormous unemployment and probably social unrest.  It could even bring down the dynast... er, party.  If they un-peg the yuan, their competitive edge disappears at the same time that 1/3 or more of the local value of those dollar reserves vanishes - POOF!  And all the T-bonds they're holding?  They're denominated in dollars; all the USA has to do is start the printing presses and pay them back with worthless paper.  We've got them right where we want them.

If China starts a war with Taiwan, it would be the perfect excuse for the USA to deem all debts to the enemy and its nationals null and void.  What can China do, re-possess a nation's worth of DVD players?

That takes care of the financial end.  The energy end is stickier.

The USA has had its own policy snafu's, and high among them is the preference for natural gas-fired electric powerplants.  We are running out of gas in a big fat hurry, and LNG is not going to fill the gap; terminals can't be built in time.  On top of that are shrinking supplies of oil.  The American SUV culture has got to go.  There is some good news on this front; driving an SUV is no longer viewed as patriotic (a bit of idiocy I've been condemning since 9/11).

The real news is that the transportation sector, currently on the road to the washed-out bridge at the end of cheap oil, might be about to take the fork away from it instead.  It goes down a darker bit, but it promises to be smoother.  The catalyst for this is CalCars; they are trying to spin off a production company to convert hybrids into GO-HEV's.  The Big 3 have been fighting tooth and nail to prevent a market for such vehicles from being established, but Toyota isn't going to play along; I doubt that Nissan will either.  Once it's obvious that there are hundreds of thousands of sales a year at stake, Detroit is going to have to enter that market and it's all over.

Last, about energy consumption:  Most people's actual energy consumption (not fuel, but the energy which actually winds up in useful form) is a fraction of what falls on their roof as sunlight.  Fifty square meters (about 540 square feet) of ground in the middle of Kansas gets enough sunlight, even after 85% losses in PV panels, to power a pair of PHEV Priuses 20,000 miles a year... each.  The typical ranch house has 3 times that much roof area.

We are in no danger whatsoever of running out of energy; we're awash in the stuff.  The only thing we can do is continue to be bad at capturing and using it.

This just in on Unocal, and I think may mark the beginning of the end of fungibility in the oil markets:

US Congress opposes Chinese bid for Unocal

The US House of Representatives has voted for a measure opposing CNOOC's bid for the US oil exploration group Unocal.

Congress voted 398 to 15 for a non-binding resolution that called for the US government to block the $18.5 billion bid by China National Offshore Oil Corporation (CNOOC).

oopsie. I was typing too fast *laugh* thanks EP, duly noted.

shall we all join together and make a joyful noise?

Bob - fwiw, Rajiv doesn't seem at all anti-American. Or if he is, so am I. I rather think it is pro-American to look hard at what is going on to see the reality. Otherwise our democracy slowly but surely is lost. It is comfortable to think the best of America, but it is probably unwise and I do not know why it would be necessary. I remember my father correcting me at a fairly early age - maybe 12. He said America acts internationally so as to promote its interests. This was in contradiction to something I had idealistically said about America acting morally or something like that. Henry Kissinger reiterated that very same theme in a college course years ago. We watched George H. W. Bush get Shiites and Kurds to go after Saddam, and then abandon them. Kissinger's comment would have been: Don't confuse diplomacy with missionary work. Interesting related reading: Gangs of America and Confessions of An Economic Hit Man.

Anyway, I think ad-hominem attacks are a symptom of stress. How will we behave when we encounter the real problem we are now only discussing?

Regarding "fungibility" of oil, over decades we've spent billions in foreign policy / military costs denying the idea that we could always buy oil from whoever had it (e.g. Iran, USSR, Saddam, more recently I guess Venezuela etc.) and in contrast affirming the idea that we must deploy force (and/or the CIA) to ensure that we can buy it.

Having said all that, T. Boone Pickens' comment on CNN yesterday included a remark that Unocal was too small to be bothered about - let the market work. He said it would be different if the target were Exxon...

<sings a paean to peons, accompanied by a musician on the pans>

Re: retro's T. Boone said "too small to be bothered about"

That was exactly right until this afternoon. Over a primarily Asian natural gas company. Reminds me of when Condy "Oil Tanker" Rice told Pakistan they couldn't do a deal with Iran for a pipeline to India because it was contrary to US law. But, when you're empire -- even a weak debtor nation kind of empire -- your laws are universally applicable.

But, when you're empire -- even a weak debtor nation kind of empire -- your laws are universally applicable.

Hopefully the rest of the world will follow along with this reasoning ...

We don't even obey our own laws, let alone treaties and such. Truth be told, the USA is a lawless country. I very much doubt that any "average" US citizen can obey the law for a 24 hour period, not to mention the Fed's bureaucratic murder. Natural Law will serve justice on the USA. By mid-century, the USA will be the United Chaos.

the empire will fall

Look at this here. China is announcing it's own "deep impact" mission days after the US mission was such a success. Now this strikingly resembles the 1950's spacerace, doesn't it? Just goes to show that China sees itself as a rival of the US. This has such a Cold War deja vu feeling all over it..

http://economictimes.indiatimes.com/articleshow/1163067.cms