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The Fracked-up USA Shale Gas Bubble


At a time when much of the world is looking with a mix of envy and excitement at the recent boom in USA unconventional gas from shale rock, when countries from China to Poland to France to the UK are beginning to launch their own ventures into unconventional shale gas extraction, hoping it is the cure for their energy woes, the US shale boom is revealing itself to have been a gigantic hyped confidence bubble that is already beginning to deflate. Carpe diem!

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America: The New Saudi Arabia?

If we’re to believe the current media reports out of Washington and the US oil and gas industry, the United States is about to become the “new Saudi Arabia.” We are told she is suddenly and miraculously on the track to energy self-sufficiency. No longer need the US economy depend on high-risk oil or gas from the politically unstable Middle East or African countries. The Obama White House energy adviser, Heather Zichal, has even shifted her focus from pushing carbon cap ‘n trade schemes to promoting America’s “shale revolution.”[1]

In his January 2012 State of the Union Address to Congress, President Obama claimed that, largely owing to the shale gas revolution, “We have a supply of natural gas that can last America nearly 100 years.” [2]

Renowned energy experts like Cambridge Energy Research’s Daniel Yergin in recent Congressional testimony waxed almost poetic about the purported benefits of the recent US shale oil and gas exploitation: “The United States is in the midst of the ‘unconventional revolution in oil and gas’ that, it becomes increasingly apparent, goes beyond energy itself.” He didn’t explain what exactly energy going beyond energy itself means. He also claimed that “the industry supports 1.7 million jobs – a considerable accomplishment given the relative newness of the technology. That number could rise to 3 million by 2020.”[3] Very impressive numbers.

Mr Yergin went on to suggest a major geopolitical dimension of America’s shale oil and gas industry, saying “expansion of US energy exports will add an additional dimension to US influence in the world…Shale gas has risen from two percent of domestic production a decade ago to 37 percent of supply, and prices have dropped dramatically. US oil output, instead of continuing its long decline, has increased dramatically – by about 38 percent since 2008. Just the increase since 2008 is equivalent to the entire output of Nigeria, the seventh-largest producing country in OPEC…People talk about the potential geopolitical impact of the shale gas and tight oil. That impact is already here…”[4]

In their Energy Outlook to 2030, published in 2012, BP’s CEO Bob Dudley sounded a similar upbeat projection of the role of shale gas and oil in making North America energy independent of the Middle East. BP predicted that growth in shale oil and gas supplies—“along with other fuel sources”—will make the western hemisphere virtually self-sufficient in energy by 2030. In a development with enormous geopolitical implications, a large swath of the world including North and South America would see its dependence on oil imports from potentially volatile countries in the Middle East and elsewhere disappear, BP added.[5]

There’s only one thing wrong with all the predictions of a revitalized United States energy superpower flooding the world with its shale oil and shale gas. It’s based on a bubble, on hype from the usual Wall Street spin doctors. In reality it is becoming increasingly clear that the shale revolution is a short-term flash in the energy pan, a new Ponzi fraud, carefully built with the aid of the same Wall Street banks and their “market analyst” friends, many of whom brought us the 2000 “dot.com” bubble and, more spectacularly, the 2002-2007 US real estate securitization bubble.[6] A more careful look at the actual performance of the shale revolution and its true costs is instructive.

Halliburton Loopholes

One reason we hear little about the declining fortunes of shale gas and oil is that the boom is so recent, reaching significant proportions only in 2009-2010. Long-term field extraction data for a significant number of shale gas wells only recently is coming to light. Another reason is that there have grown up huge vested corporate interests from Wall Street to the oil industry who are trying everything possible to keep the shale revolution myth alive. Despite all their efforts however, data coming to light, mostly for the review of industry professionals, is alarming.

Shale gas has recently come onto the gas market in the US via use of several combined techniques developed among others by Dick Cheney’s old company, Halliburton Inc. Halliburton several years ago combined new methods for drilling in a horizontal direction with injection of chemicals and “fracking,” or hydraulic fracturing of the shale rock formations that often trap volumes of natural gas. Until certain changes in the last few years, shale gas was considered uneconomical. Because of the extraction method, shale gas is dubbed unconventional and is extracted in far different ways from conventional gas.

The US Department of Energy’ EIA defines conventional oil and gas as oil and gas “produced by a well drilled into a geologic formation in which the reservoir and fluid characteristics permit

the oil and natural gas to readily flow to the wellbore.” Conversely, unconventional hydrocarbon production doesn’t meet these criteria, either because geological formations present a very low level of porosity and permeability, or because the fluids have a density approaching or even exceeding that of water, so that they cannot be produced, transported, and refined by conventional methods. By definition then, unconventional oil and gas are far more costly and difficult to extract than conventional, one reason they only became attractive when oil prices soared above $100 a barrel in early 2008 and more or less remained there.

To extract the unconventional shale gas, a hydraulic fracture is formed by pumping a fracturing fluid into the wellbore at sufficient pressure causing the porous shale rock strata to crack. The fracture fluid, whose precise contents are usually company secret and extremely toxic, continues further into the rock, extending the crack. The trick is to then prevent the fracture from closing and ending the supply of gas or oil to the well. Because in a typical fracked well fluid volumes number in millions of gallons of water, water mixed with toxic chemicals, fluid leak-off or loss of fracturing fluid from the fracture channel into the surrounding permeable rock takes place. If not controlled properly, that fluid leak-off can exceed 70% of the injected volume resulting in formation matrix damage, adverse formation fluid interactions, or altered fracture geometry and thereby decreased production efficiency.[7]

Hydraulic fracturing has recently become the preferred US method of extracting unconventional oil and gas resources. In North America, some estimate that hydraulic fracturing will account for nearly 70% of natural gas development in the future.

Why have we just now seen the boom in fracking shale rock to get gas and oil? Thank then-Vice president Dick Cheney and friends. The real reason for the recent explosion of fracking in the United States was passage of legislation in 2005 by the US Congress that exempted the oil industry’s hydraulic fracking, astonishing as it sounds, from any regulatory supervision by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act. The oil and gas industry is the only industry in America that is allowed by EPA to inject known hazardous materials – unchecked – directly into or adjacent to underground drinking water supplies.[8]

The 2005 law is known as the “Halliburton Loophole.” That’s because it was introduced on massive lobbying pressure from the company that produces the lion’s share of chemical hydraulic fracking fluids – Dick Cheney’s old company, Halliburton. When he became Vice President under George W. Bush in early 2001, Cheney immediately got Presidential responsibility for a major Energy Task Force to make a comprehensive national energy strategy. Aside from looking at Iraq oil potentials as documents later revealed, the energy task force used Cheney’s considerable political muscle and industry lobbying money to win exemption from the Safe Drinking Water Act. [9]

During Cheney’s term as vice president he moved to make sure the Government’s Environmental Protection Agency (EPA) would give a green light to a major expansion of shale gas drilling in the US.

In 2004 the EPA issued a study of the environmental effects of fracking. That study has been called “scientifically unsound” by EPA whistleblower Weston Wilson. In March of 2005, EPA Inspector General Nikki Tinsley found enough evidence of potential mishandling of the EPA hydraulic fracturing study to justify a review of Wilson’s complaints. The Oil and Gas Accountability Project conducted a review of the EPA study which found that EPA removed information from earlier drafts that suggested unregulated fracturing poses a threat to human health, and that the Agency did not include information that suggests “fracturing fluids may pose a threat to drinking water long after drilling operations are completed.”[10] Under political pressure the report was ignored. Fracking went full-speed ahead.

© n/a  Fracking toxic waste. This diagram depicts methane gas and toxic water contaminating the drinking water as the fracturing cracks penetrate the water table.

 The Halliburton Loophole is no minor affair. The process of hydraulic fracking to extract gas involves staggering volumes of water and of some of the most toxic chemicals known. Water is essential to shale gas fracking. Hydraulic fracturing uses between 1.2 and 3.5 million US gallons (4.5 and 13 million liters) of water per well, with large projects using up to 5 million US gallons (19 Million liters). Additional water is used when wells are refractured; this may be done several times. An average well requires 3 to 8 million US gallons of water over its lifetime.[11] Entire farm regions of Pennsylvania and other states with widespread hydraulic fracking report their well water sources have become so toxic as to make the water undrinkable. In some cases fracked gas seeps into the home via the normal water faucet.

© Screenshot from HBO film Gasland – Rural resident flicking on cigarette lighter next to his kitchen faucet and watching his drinking water, infused with gas and chemicals, ignite in flames as high as 3 feet.

During the uproar over the BP Deepwater Horizon Gulf of Mexico oil spill, the Obama Administration and the Energy Department formed an Advisory Commission on Shale Gas, ostensibly to examine the growing charges of environmental hazards from shale gas practices.

Their report was released in November 2011. It was what could only be called a “whitewash” of the dangers and benefits of shale gas.

The commission was headed by former CIA director John M. Deutch. Deutch himself is not neutral. He sits on the board of the LNG gas company Cheniere Energy. Deutch’s Cheniere Energy’s Sabine Pass project is one of only two current US projects to create an LNG terminal to export US shale gas to foreign markets.[12]

Deutch is also on the board of Citigroup, one of the world’s most active energy industry banks, tied to the Rockefeller family. He also sits on the board of Schlumberger, which along with Halliburton, is one of the leading companies doing hydraulic fracking. In fact, of the seven panel members, six had ties to the energy industry, including fellow Deutch panel member and shale fracking booster, Daniel Yergin, himself a member of the National Petroleum Council. Little surprise that the Deutch report called shale gas, “the best piece of news about energy in the last 50 years.” Deutch added, “Over the long term it has the potential to displace liquid fuels in the United States.” [13]

Shale gas: Racing against the Clock

With regulatory free-rein, now also backed by the Obama Administration, the US oil and gas industry went full-power into shale gas extraction, taking advantage of high oil and natural gas prices to reap billions in quick gains.

According to official US Department of Energy Energy Information Administration data, shale gas extraction ballooned from just under 2 million MCF in 2007, the first year data was tracked, to more than 8,500,000 Mcf by 2011, a fourfold rise to comprise almost 40% of total dry natural gas extraction in the USA that year. In 2002 shale gas was a mere 3% of total gas.[14]

Here enters the paradox of the US “shale gas revolution.” Since the days of oil production wars more than a century ago, various industry initiatives had been created to prevent oil and later gas price collapse due to over-production. During the 1930’s there was discovery of the huge East Texas oilfields, and a collapse of oil prices. The State of Texas, whose Railroad Commission (TRC) had been given regulatory powers not only over railroads but also over oil and gas production in what then was the world’s most important oil producing region, was called in to arbitrate the oil wars. That resulted in daily statewide production quotas so successful that OPEC later modeled itself on the TRC experience.

Today, with federal deregulation of the oil and gas industry, such extraction controls are absent as every shale gas producer from BP to Chesapeake Energy, Anadarko Petroleum, Chevron, Encana and others all raced full-tilt to extract the maximum shale gas from their properties.

The reason for the full-throttle extraction is telling. Shale Gas, unlike conventional gas, depletes dramatically faster owing to its specific geological location. It diffuses and becomes impossible to extract without the drilling of costly new wells.

The result of the rapidly rising volumes of shale gas suddenly on the market was a devastating collapse in the market price of that same gas. In 2005 when Cheney got the EPA exemption that began the shale boom, the marker US gas price measured at Henry Hub in Louisiana, at the intersection of nine interstate pipelines, was some $14 per thousand cubic feet. By February 2011 it had plunged amid a gas glut to $3.88. Currently prices hover around $3.50 per tcf.[15]

In a sobering report, Arthur Berman, a veteran petroleum geologist specialized in well assessment, using existing well extraction data for major shale gas regions in the US since the boom started, reached sobering conclusions. His findings point to a new Ponzi scheme which well might play out in a colossal gas bust over the next months or at best, the next two or three years. Shale gas is anything but the “energy revolution” that will give US consumers or the world gas for 100 years as President Obama was told.

Berman wrote already in 2011, “Facts indicate that most wells are not commercial at current gas prices and require prices at least in the range of $8.00 to $9.00/mcf to break even on full-cycle prices, and $5.00 to $6.00/mcf on point-forward prices. Our price forecasts ($4.00-4.55/mcf average through 2012) are below $8.00/mcf for the next 18 months. It is, therefore, possible that some producers will be unable to maintain present drilling levels from cash flow, joint ventures, asset sales and stock offerings.” [16]

Berman continued, “Decline rates indicate that a decrease in drilling by any of the major producers in the shale gas plays would reveal the insecurity of supply. This is especially true in the case of the Haynesville Shale play where initial rates are about three times higher than in the Barnett or Fayetteville. Already, rig rates are dropping in the Haynesville as operators shift emphasis to more liquid-prone objectives that have even lower gas rates. This might create doubt about the paradigm of cheap and abundant shale gas supply and have a cascading effect on confidence and capital availability.” [17]

What Berman and others have also concluded is that the gas industry key players and their Wall Street bankers backing the shale boom have grossly inflated the volumes of recoverable shale gas reserves and hence its expected supply duration. He notes, “Reserves and economics depend on estimated ultimate recoveries (EUR) based on hyperbolic, or increasingly flattening, decline profiles that predict decades of commercial production. With only a few years of production history in most of these plays, this model has not been shown to be correct, and may be overly optimistic….Our analysis of shale gas well decline trends indicates that the Estimated Ultimate Recovery per well is approximately one-half the values commonly presented by operators.”[18] In brief, the gas producers have built the illusion that their unconventional and increasingly costly shale gas will last for decades.

Basing his analysis on actual well data from major shale gas regions in the US, Berman concludes however, that the shale gas wells decline in production volumes at an exponential rate and are liable to run out far faster than being hyped to the market. Could this be the reason financially exposed US shale gas producers, loaded with billions of dollars in potential lease properties bought during the peak of prices, have recently been desperately trying to sell off their shale properties to naïve foreign or other investors?

Berman concludes:

Three decades of natural gas extraction from tight sandstone and coal-bed methane show that profits are marginal in low permeability reservoirs. Shale reservoirs have orders of magnitude lower reservoir permeability than tight sandstone and coal-bed methane. So why do smart analysts blindly accept that commercial results in shale plays should be different? The simple answer is found in high initial production rates. Unfortunately, these high initial rates are made up for by shorter lifespan wells and additional costs associated with well re-stimulation. Those who expect the long-term unit cost of shale gas to be less than that of other unconventional gas resources will be disappointed…the true structural cost of shale gas production is higher than present prices can support ($4.15/mcf average price for the year ending July 30, 2011), and that per-well reserves are about one-half of the volumes claimed by operators. [19]

Therein lies the explanation for why a sophisticated oil industry in the United States has desperately been producing full-throttle, in a high-stakes game laying the seeds of their own bankruptcy in the process—They are racing to offload the increasingly unprofitable shale assets before the bubble finally bursts. Wall Street financial backers are in on the Ponzi game with billions at stake, much as in the recent real estate securitization fraud.

One Hundred Years of Gas?

Where then did someone get the number to tell the US President that America had 100 years of gas supply? Here is where lies, damn lies and statistics play a crucial role. The US does not have 100 years of natural gas supply from shale or unconventional sources. That number came from a deliberate blurring by someone of the fundamental difference between what in oil and gas is termed resources and what is called reserves.

A gas or oil resource is the totality of the gas or oil originally existing on or within the earth’s crust in naturally occurring accumulations, including discovered and undiscovered, recoverable and unrecoverable. It is the total estimate, irrespective of whether the gas or oil is commercially recoverable. It’s also the least interesting number for extraction.

On the other hand “recoverable” oil or gas refers to the estimated volume commercially extractable with a specific technically feasible recovery project, a drilling plan, fracking program and the like. The industry breaks the resources into three categories: reserves, which are discovered and commercially recoverable; contingent resources, which are discovered and potentially recoverable but sub-commercial or non-economic in today’s cost-benefit regime; and prospective resources, which are undiscovered and only potentially recoverable.[20]

The Potential Gas Committee (PGC), the standard for US gas resource assessments, uses three categories of technically recoverable gas resources, including shale gas: probable, possible and speculative.

According to careful examination of the numbers it is clear that the President, his advisers and others have taken the PGC’s latest total of all three categories, or 2,170 trillion cubic feet (Tcf) of gas—probable, possible and purely speculative—and divided by the 2010 annual consumption of 24 Tcf. To get a number between 90 and 100 years of gas. What is conveniently left unsaid is that most of that total resource is in accumulations too small to be produced at any price, inaccessible to drilling, or is too deep to recover economically.[21]

Arthur Berman in another analysis points out that if we use more conservative and realistic assumptions such as the PGC does in its detailed assessment, more relevant is the Committee’s probable mean resources value of 550 (Tcf) of gas. In turn, if we estimate, also conservatively and realistically based on experience, that about half of this resource actually becomes a reserve (225 Tcf), then the US has approximately 11.5 years of potential future gas supply at present consumption rates.

If we include proved reserves of 273 Tcf, there is an additional 11.5 years of supply for a total of almost 23 years. It is worth noting that proved reserves include proved undeveloped reserves which may or may not be produced depending on economics, so even 23 years of supply is tenuous. If consumption increases, this supply will be exhausted in less than 23 years.[22]

There are also widely differing estimates within the US Government over shale gas recoverable resources. The US Department of Energy EIA uses a very generous calculation for shale gas average recovery efficiency of 13% versus other conservative estimates of about half that or 7% in contrast to recovery efficiencies of 75-80% for conventional gas fields. The generously high recovery efficiency values used for EIA calculations allows the EIA to project an estimate of 482 tcf of recoverable gas for the US. In August 2011, the Interior Department’s US Geological Survey (USGS) released a far more sober estimate for the large shale plays in Pennsylvania and New York called Marcellus Shale. The USGS estimated there are about 84 trillion cubic feet of technically-recoverable natural gas under the Marcellus Shale. Previous estimates from the Energy Information Administration put the figures at 410 trillion cubic feet.[23]

Shale gas plays show unusually high field decline rates with very steep trends, a combination giving low recovery efficiencies. [24]

Huge shale gas losses

Given the abnormally rapid well decline rates and low recovery efficiencies, it is little wonder that once the euphoria subsided, shale gas producers found themselves sitting on a financial time-bomb and began selling assets to unwary investors as fast as possible.

In a very recent analysis of the actual results of several years of shale gas extraction in the USA as well as the huge and high-cost Canadian Tar Sands oil, David Hughes notes, “Shale gas production has grown explosively to account for nearly 40 percent of US natural gas production. Nevertheless, production has been on a plateau since December 2011; 80 percent of shale gas production comes from five plays, several of which are in decline. The very high decline rates of shale gas wells require continuous inputs of capital—estimated at $42 billion per year to drill more than 7,000 wells—in order to maintain production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion.”[25]

He adds, “The best shale plays, like the Haynesville (which is already in decline) are relatively rare, and the number of wells and capital input required to maintain production will increase going forward as the best areas within these plays are depleted. High collateral environmental impacts have been followed by pushback from citizens, resulting in moratoriums in New York State and Maryland and protests in other states. Shale gas production growth has been offset by declines in conventional gas production, resulting in only modest gas production growth overall. Moreover, the basic economic viability of many shale gas plays is questionable in the current gas price environment.”[26]

If these various estimates are anywhere near accurate, the USA has a resource in unconventional shale gas of anywhere between 11 years and 23 years duration and unconventional oil of perhaps a decade before entering steep decline. The recent rhetoric about US “energy independence” at the current technological state is utter nonsense.

The drilling boom which resulted in this recent glut of shale gas was in part motivated by “held-by-production” shale lease deals with landowners. In such deals the gas company is required to begin drilling in a lease running typically 3-5 years, or forfeit. In the US landowners such as farmers or ranchers typically hold subsurface mineral rights and can lease them out to oil companies. The gas (or oil) company then is under enormous pressure to book gas reserves on the new leases to support company stock prices on the stock market against which it has borrowed heavily to drill.

This “drill or lose it” pressure typically has led companies to seek the juiciest “sweet spots” for fast spectacular gas flows. These are then typically promoted as “typical” of the entire play.

However, as Hughes points out, “High productivity shale plays are not ubiquitous, and relatively small sweet spots within plays offer the most potential. Six of thirty shale plays provide 88 percent of production. Individual well decline rates are high, ranging from 79 to 95 percent after 36 months. Although some wells can be extremely productive, they are typically a small percentage of the total and are concentrated in sweet spots.” [27]

One estimate of projected shale gas decline suggests the peak will pass well before the end of the decade, perhaps in four years, followed with a rapid decline in volume

The extremely rapid overall gas field declines require from 30 to 50 percent of production to be replaced annually with more drilling, a classic “tiger chasing its tail around the tree” syndrome. This translates to $42 billion of annual capital investment just to maintain current production. By comparison, all USA shale gas produced in 2012 was worth about $32.5 billion at a gas price of $3.40/mcf (which is higher than actual well head prices for most of 2012). That means about a net $10 billion loss on their shale gambles last year for all US shale gas producers.

Even worse, Hughes points out that capital inputs to offset field decline will necessarily increase going forward as the sweet spots within plays are drilled off and drilling moves to lower quality areas. Average well quality (as measured by initial productivity) has fallen nearly 20 percent in the Haynesville, the most productive shale gas play in the US. And it is falling or flat in eight of the top ten plays. Overall well quality is declining for 36 percent of US shale gas production and is flat for 34 percent.[28]

Not surprising in this context, the major shale gas players have been making massive write-downs of their assets to reflect the new reality. Companies began in 2012 reassessing their reserves and, in the face of a gas spot price that was cut in half between July 2011 and July 2012, are being forced to admit that the long-term outlook for natural-gas prices is not positive. The write-downs have a domino effect as bank lending is typically tied to a company’s reserves meaning many companies are being forced to renegotiate credit lines or make distress asset sales to raise cash.

Beginning August 2012, many large shale gas producers in the US were forced to announce major write-downs of the value of their shale gas assets. BP announced write-downs of $4.8 billion, including a $1 billion-plus reduction in the value of its American shale gas assets. England’s BG Group made a $1.3 billion write-down of its US shale gas interests, and Encana, a large Canadian shale gas operator made a $1.7 billion write-down on shale assets in the US and Canada, accompanied by a warning that more were likely if gas prices did not recover. [29]

The Australian mining giant BHP Billiton is one of the worst hit in the US shale gas bubble as it came in late and big-time. In May, 2012 it announced it was considering taking impairments on the value its US shale-gas assets which it had bought at the peak of the shale gas boom in 2011, when the company paid $4.75 billion to buy shale projects from Chesapeake Energy and acquiring Petrohawk Energy for $15.1 billion.[30]

But by far the worst hit is the once-superstar of shale gas, Oklahoma-based Chesapeake Energy.

Part VI: Chesapeake Energy: The Next Enron?

The company by most accounts that typifies this shale gas boom-bust bubble is the much-hailed leading player in shale, Chesapeake Energy. In August 2012 there were widespread rumors that the company would declare bankruptcy. That would have been embarrassing for the company that was the nation’s second largest gas producer. It would also have signaled to the world the hype that was behind promotion of a “shale energy revolution” from the likes of Yergin and the Wall Street energy promoters looking to earn billions on M&A and other deals in the sector to replace their dismal real estate experiences.

In May 2012, Bill Powers of the Powers Energy Investor, wrote of Chesapeake (CHK by its stock symbl): “Over the past year, however, CHK’s business model has broken down. The company’s shares continue to break to 52-week lows and the company has a funding issue—financial speak for the company is running out of money. While it was able to farm-out a portion of its Utica Shale assets in Ohio to France’s Total last year—this is remarkable given the accounting errors that resulted in Total receiving significantly less revenue from their Barnett Shale joint-venture—CHK has largely run out of prospective acreage to farm-out.” Powers estimated a $3 billion cash shortfall in 2012 for the company. That comes atop already huge corporate debt of $11.1 billion of which $1.7 billion was a revolving line of credit. [31]

Powers adds, “When the off-balance sheet debt and preferred issues are added to the company’s existing $11.1 billion of on-balance sheet debt, CHK’s has a whopping $20.5 billion of financial obligations. Given such a high level of indebtedness, CHK debt is rated junk and will be for the foreseeable future. “ He concludes, “Having America’s second largest natural gas producer as well as its most reckless destroyer of shareholder capital almost completely walk away from the shale gas business is a great indication that today’s natural gas price bubble is on the verge of popping. CHK has not made any money by drilling shale wells—and neither have virtually any of its peers—and now the dumb money has run out.” [32]

Angry shareholders forced a major shakeup of the Chesapeake board last September after a Reuters report that CEO Aubrey McClendon had been taking out large loans not fully disclosed to the company’s board or investors. McClendon was forced to resign as Chairman of the company he founded after details leaked out that McClendon has borrowed as much as $1.1 billion in the last three years by pledging his stake in the company’s oil and natural gas wells as collateral.[33] In March 2013 the US Government Securities and Exchange Commission (SEC) announced that it was investigating the company and Chief Executive Aubrey McClendon and had issued subpoenas for information and testimony, among other items looking into a controversial program that grants McClendon a share in every well that Chesapeake drills.[34]

The company is in the midst of a major asset sale of an estimated $6.9 billion to lower debt, including oil and gasfields covering roughly 2.4 million acres. It must invest heavily in drilling new wells to deliver the increased production of more lucrative oil and natural gas liquids, if it is to avoid bankruptcy.[35] As one critical analyst of Chesapeake put it, “the company’s complex accounting methods make it almost impossible for analysts and stockholders to determine what the risks really are.  The fact that the CEO is taking out billion-dollar loans and not openly disclosing them only furthers the perception that everything is not as it appears at Chesapeake – that the company is Enron with drilling rigs.” [36]

The much-touted shale gas revolution in the USA is collapsing along with the stock shares of Chesapeake and other key players.

F. William Engdahl is author of Myths, Lies and Oil Wars. He can be contacted via his website atwww.williamengdahl.com

Notes

[1] Roberta Rampton, Energy Policy Shifting as abundance replaces scarcity: Obama adviser, Reuters, February 25, 2013.

[2] President Barack Obama, President Obama’s State of the Union Address , January 25, 2012, The New York Times, January 24, 2012, accessed in http://www.nytimes.com/interactive/2012/01/24/us/politics/state-of-the-union-2012-video-transcript.html.

[3] Daniel Yergin, Subcommittee on Energy and Power of the House Energy and Commerce Committee

Testimony submitted for Hearings on ‘America’s Energy Security and Innovation,’ Washington D.C., February 5, 2013, accessed in http://energycommerce.house.gov/hearing/AESI-assessment-north-americas-energy-resources.

[4] Ibid.

[5] BP, BP Energy Outlook 2030, London, January 2012.

[6]

[7] Glenn S. Penny, et al, Control and Modeling of Fluid Leakoff During Hydraulic Fracturing, Journal of Petroleum Technology, Vol. 37, no. 6, pp. 1071-1081.

[8] F. William Engdahl, Shale Gas: Halliburton’s Weapon of Mass Devastation, VoltaireNet.org, 17 May 2012, accessed in http://www.sott.net/article/245733-Shale-Gas-Halliburtons-Weapon-of-Mass-Devastation.

[9] Ibid.

[10] Ibid.

[11] Anthony Andrews, et al, Unconventional Gas Shales: Development, Technology and Policy Issues, Congressional Research Service, Washington D.C., October 30, 2009, p.7.

[12] John Deutsch, Robin West, The North American Oil and Gas Renaissance and its Implications, The Aspen Institute, 2012, Washington DC, accessed inhttp://www.aspeninstitute.org/sites/default/files/content/docs/pubs/2012GlobalForumRepFINALPDF_0.pdf.

[13] Ibid.

[14] EIA, Natural Gas Gross Withdrawals and Production, US Department of Energy, Washington DC, accessed in http://www.eia.gov/dnav/ng/ng_prod_sum_dcu_NUS_a.htm

[15] Malcolm Maiden, Burnt Fingers all round in US shale gas boom, The Sydney Morning Herald, August 2, 2012, accessed in http://www.smh.com.au/business/burnt-fingers-all-round-in-us-shale-gas-boom-20120801-23g03.html

[16] Arthur E. Berman and Lynn F. Pittinger, US Shale Gas: Less Abundance, Higher Cost, August 5, 2011, accessed in http://www.theoildrum.com/node/8212

[17] Ibid.

[18] Ibid.

[19] Ibid.

[20] SPEE,  Canadian Oil and Gas Evaluation Handbook, Volume 1 — Reserves Definitions and Evaluation Practices and Procedures, SECTION 5: DEFINITIONS OF RESOURCES AND RESERVES, Petroleum Society of the Canadian Institute of Mining, Metallurgy and Petroleum, Calgary Chapter, accessed in www.petsoc.org.

[21] Arthur E. Berman, After The Gold Rush: A Perspective on Future US Natural Gas Supply and Price, The Oil Drum, February 8, 2012, accessed in http://www.theoildrum.com/node/8914.

[22] Ibid.

[23] Stephen Lacey,  After USGS Analysis, EIA Cuts Estimates of Marcellus Shale Gas Reserves by 80% ,August 26, 2011

[24] Rafael Sandrea, Evaluating production potential of mature US oil, gas shale plays, The Oil and Gas Journal, December 3, 2012, accessed in http://www.ogj.com/articles/print/vol-110/issue-12/exploration-development/evaluating-production-potential-of-mature-us-oil.html.

[25] Arthur E. Berman, After the Gold…

[26] Ibid.

[27] Ibid.

[28] Ibid.

[29] Ed Crooks, Gas groups headed for large write-downs, Financial Times, August 31, 2012, accessed inhttp://www.ft.com/intl/cms/s/0/a0fd134e-f38d-11e1-b3a2-00144feabdc0.html#axzz2MehR4I7i.

[30] Marin Katusa, Does a Long-Term Natural-Gas Downturn Signal that Investors Should Exit?,http://www.caseyresearch.com/cdd/does-long-term-natural-gas-downturn-signal-investors-should-exit.

[31] Bill Powers,  Is Chesapeake Energy Going Bankrupt?, May 1, 2012, Powers Energy Investor, accessed inhttp://www.powersenergyinvestor.com/

[32] Ibid.

[33] Jeff Goodell, ‘World’s Biggest Fracker’ Pockets $1 Billion in Shady Deal, Rolling Stone, April 18, 2012, accessed in http://www.rollingstone.com/politics/blogs/national-affairs/worlds-biggest-fracker-pockets-1-billion-in-shady-deal-20120418#ixzz2N3vXTPH9.

[34] Reuters, SEC Investigating Chesapeake Energy, CEO, March 01, 2013, accessed inhttp://www.foxbusiness.com/business-leaders/2013/03/01/sec-investigating-chesapeake-energy-ceo/#ixzz2N40Rnm4d.

[35] Ed Crooks, Two directors forced out of Chesapeake, Financial Times, June 8, 2012, accessed inhttp://www.ft.com/intl/cms/s/0/7fbbd6a4-b182-11e1-bbf9-00144feabdc0.html#axzz2N3lAsPdW.

[36] Jeff Goodell, Op. Cit.

Via

http://www.globalresearch.ca/the-fracked-up-usa-shale-gas-bubble/5326504

Why is NSA leaker Snowden demonized?


When you leak explosive government secrets to the news media, it’s safe to say that you open yourself up to, among other things, harsh criticism.

So it’s hardly a surprise that former vice president Dick Cheney, the hardest of the hardliners, has unloaded on National Security Agency leaker Edward Snowden, denouncing him as a “traitor” who might be working for China.

But Cheney, who made his remarks over the weekend on Fox News Sunday, was hardly the first to use the epithet. Last week, in an interview on ABC’s Good Morning America, House Speaker John Boehner said flatly of Snowden: “He’s a traitor.”

And when it comes to the name-calling and the demonizing, former and current public officials such as Cheney and Boehner hardly have a monopoly. Journalists can play that game, too.

Politico columnist Roger Simon wrote a sneering piece headlined “The slacker who came in from the cold” in which he dismissed Snowden as “29 and possessing all the qualifications to become a grocery bagger.”

(An aside: Is it just me or are these constant references to Snowden being 29, as if that somehow discredits him, out of line as well as annoying? Is the idea that someone so young is incapable of doing anything worthwhile? Really?)

To former NBC anchor Tom Brokaw, Snowden is merely “a high school dropout who is a military washout.” And rather than go down in history as a significant whistle-blower, Washington Post columnist Richard Cohen wrote in a sublimely baffling outburst that he thought Snowden will “go down as a cross-dressing Little Red Riding Hood.”

All of that outrage is perfectly understandable. Acts like Snowden’s arouse powerful passions. To some he is a hero, a principled man whose alarm at the security state’s secret surveillance compelled him to act, despite the consequences to his own life. To others he is, well, a traitor, an irresponsible, self-righteous egomaniac who placed himself above the law and put his country in great peril.

But it’s important that we — the news media and society as a whole — don’t get too caught up in it. While pinning labels on Edward Snowden may be a fine parlor game, it’s not nearly as significant as dealing with the information he revealed.

Even White House Press Secretary Jay Carney says it’s “appropriate” to have a national debate on government information gathering. But we wouldn’t be having one absent Snowden’s disclosures.

Maybe the government is right. Maybe the heightened security the surveillance of all those phone calls and e-mails makes possible is worth the erosion of privacy. But that’s something we as a country need to decide, not the president, whichever president, acting without our knowledge. Remember, even if you trust this particular president and/or his predecessor, there’s no guarantee that someday the White House won’t be occupied by someone you don’t want having access to all that “telephony metadata” and the like. (See Nixon, Richard.)

Even now, it’s not an easy debate to have. The proceedings of the Foreign Intelligence Surveillance Court are secret. Members of Congress who are briefed on the programs are constrained about what they can say. So are the Silicon Valley powerhouses that have cooperated with the PRISM initiative. On Tuesday, Google asked the surveillance court for permission to be more forthcoming about its role.

But despite the difficulties, a conversation has begun. The federal government has mounted an aggressive defense of the programs and has begun to release information to show that they are working. Some members of Congress seem committed to trying to rein in the excesses, no matter how uphill the struggle. And we’ve only just begun.

That’s where the primary focus should remain, not on whether or not Snowden is a duplicitous spoiled brat.

“Shoot the messenger” has been part of the lexicon for a long time, certainly since Sophocles’ prime, which was way pre-Twitter. It doesn’t just apply to actual old-school messengers and, as is frequently the case in this era, the news media. Ad hominem (and ad feminam) attacks are a time-dishonored way of avoiding uncomfortable subjects by beating up political opponents. And belaboring the appallingly 29-year-old slacker/traitor is a great way to change the subject.

via Rieder: Why is NSA leaker Snowden demonized?.

Back off, Big Brother, you’re a pain


A woman walks past a building decorated with eyes in Crimean city of Sevastopol

Now you know the surveillance state is really in trouble. They’ve turned to Dick Cheney and Donald Trump as their cheerleading defenders.

In the wake of recent leaks that have revealed to the world the extent of American snooping, from collecting the phone records of its citizens en masse to keeping track of every single click of your mouse you make on the internet, the security establishment has been remarkably lame in its response.

Previous leakers like Pte. Bradley Manning and Julian Assange have been destroyed by their efforts.

Manning, who leaked the classified information on civilian casualties in Afghanistan and Iraq, and who is largely credited for inspiring the Arab Spring uprising in response to corrupt governments, is rotting in a prison cell facing a life sentence.

Julian Assange is holed up in the Ecuadorian embassy in London, unable to leave for fear he will be snatched and deported to America to share the same fate as Manning.

This time it’s different.

The soft-spoken young man Edward J. Snowden, who has leaked the top-secret documents we have seen so far is viewed as a controversial figure.

By definition, a controversy has two sides. This means some people actually support him as opposed to the near-unanimous condemnation of Manning and Assange.

I think that’s because this actually affects us folks at home. Maybe people are finally starting to get a little uncomfortable with just how cozy big brother is in cuddling up to them in their personal lives.

The trite response to surveillance has always been, “if you’re not doing anything wrong, why should you be worried.” Well now the thinking is starting to change to, “I’m not doing anything wrong, so why do you need to know what I am doing.” The eminently credible Dick Cheney claimed if these measures had been in place before they would have prevented 9/11. Of course, this is the same man who told America that Saddam Hussein “absolutely has weapons of mass destruction” and started one of the most costly and disastrous wars in American history.

Interestingly, this second iteration of tricky Dick didn’t mention that these measures were in place before the Boston bombings and even after being warned about the two brothers beforehand by the Russians, they still failed to prevent the attack.

Then there’s the security state’s other BFF, Donald Trump. He claimed he “didn’t like” Edward Snowden because he thought he was trying to bring attention to himself and was a grandstander. Such comments seem awfully rich coming from that hair.

Just for fun, last night I took note of how many times I was watched in just the few hours it took me to go for a workout.

I was filmed when I went to the drug store for bus tickets. I was filmed and listened to when I got on the bus. I was filmed in the downtown core, in the library, in the mall, and again everywhere I went in the gym.

That is pretty much 100% total surveillance of my every move.

And how much crime does this prevent? None, so far as the experts can tell.

Studies done in England where cameras are ubiquitous have shown the crime rate to be essentially unchanged as a result of having cameras everywhere.

When Edward Snowden was asked what he expected to happen to him as a result of his actions, he replied, “nothing good.” But then added he was not trying to avoid responsibility for what he did, he was trying to be a patriot. He said the worst thing that could possibly happen would be that nothing would change.

That is entirely possibly. The security state is well entrenched.

But I have a feeling that between the time I write this and the time you read it, a lot more will have happened. There is every suggestion that there is more on the way. Hopefully that will be the case, anyway.

And hopefully a real controversy will mean debate, and debate will mean awareness.

Most importantly in my mind, hopefully Edward Snowden is the first whistleblower in recent times not to be destroyed for the courageous act of telling the truth.

download (7)

http://www.josephcouture.com

via Back off, Big Brother, you’re a pain | Column | Opinion | The London Free Press.

Out With It


Americans deserve to hear the dirty secrets of the CIA’s war on terror. We’ll all be better off with the truth.

Belle Mellor 24042013

In April 1975, Sen. Frank Church impaneled a special investigative committee to look into shocking accounts of CIA dirty tricks. The Church Committee ultimately published 14 reports over two years revealing a clandestine agency that was a law unto itself — plotting to assassinate heads of state (Castro, Diem, Lumumba, Trujillo), carrying out weird experiments with LSD, and suborning American journalists. As a result, President Gerald Ford issued an executive order banning the assassination of foreign leaders, the House and Senate established standing intelligence committees, and the United States set up the so-called FISA courts, which oversee request for surveillance warrants against suspected foreign agents.

But the war on terror unleashed the CIA once again to carry out dark deeds against America’s enemies — torture, secret detention, and “rendition” to “black sites” across the world. How have Americans reckoned, this time, with the immoral and illegal acts carried out in their name? They have not: the CIA has retained control over the narrative. As the Constitution Project’s Detainee Treatment report describes in great detail, the CIA falsely reported — to the White House as well as to the public — that torture “worked” in wresting crucial information from high-level detainees, and thus needed to be an instrument available to interrogators. Officials like Vice President Dick Cheney repeated ad nauseum that the CIA’s dark arts had saved thousands of lives. Is it any wonder that a plurality of Americans think the United States should torture terrorists?

I wrote last month about the detainee treatment report, but I find it incredibly frustrating — and all too telling — that the findings were overwhelmed by the tidal wave of coverage of the Boston bombing. Because we fear terrorism far more viscerally than we feared communism — certainly by 1975 — we are all too susceptible to the view that America cannot afford to live by its own professed values. But of course that’s what Chileans and Brazilians thought in the 1970s. That’s why Sri Lankans have granted themselves the right to slaughter homegrown terrorists wholesale, and react furiously to any hint of criticism.

People give themselves a pass unless and until they are forced to face the truth, which is why a public airing of history is so important — and so politically fraught. There’s always a compelling reason to avoid facing the ugly truth. In early 2009, Patrick Leahy, chairman of the Senate Judiciary Committee, called for an independent commission to investigate allegations of torture.  But President Barack Obama’s spokesman said that the proposal would not be “workable.” We know what he meant: you can hardly blame the president for avoiding a colossal fight with Republicans over the past, especially, when he had so many fights he needed to wage over the future.

Obama probably thought that he could put the problem to rest by ending torture as well as the cult of secrecy surrounding CIA practices. He succeeded on the first count, but failed on the latter. In April 2009, he agreed to release the so-called “torture” memos written by President George W. Bush’s Office of Legal Counsel (OLC), as well as photos of prisoner abuse from Iraq and Afghanistan. But then, after a fierce debate inside the White House said to pit Obama’s military commanders against his counselor, Gregory Craig, among others, the administration reversed itself. The president later signed legislation allowing him to withhold the pictures if he determined that the release would harm national security.

Once adopted, the logic of national security carries all before it. The release of the OLC memos, the detainee treatment report notes, was the high-water mark of Obama-era transparency on torture. CIA reports on the death of three prisoners in custody as well as on broad policy towards detainees remain classified; so do the results of inquiries by the armed forces criminal investigation division. The agency’s ability to withhold information probably contributed to the Justice Department’s decision not to pursue indictments on any of the 100 or so cases of CIA mistreatment which it investigated. Defense lawyers in the military trial of the “9/11 defendants” held at Guantanamo have had to work around a “protection order” which classifies entire subject areas — including anything related to the defendants’ arrest or capture, the conditions in which they were held, or the interrogation techniques to which they were subjected. Whatever becomes of the defendants, Americans will learn nothing from the trials.

On matters of secrecy, Obama has been little better than Bush. This has become notorious in the case of the drone program, a centerpiece of Obama’s prosecution of the war on terror. In a recent speech at the Oxford Union, Harold Koh, the former chief counsel of the State Department, said that the administration has failed to be “transparent about legal standards and the decision-making process that it has been applying.”

I asked Koh why the White House has so regularly deferred to the CIA on issues of transparency and accountability. Koh pointed out that the CIA’s concern that exposing past bad acts could serve as a recruiting tool for al Qaeda was hardly trivial. But, he said of the White House: “They don’t have a good balancing mechanism on the value of disclosures. It’s almost like if nobody’s clamoring for it, the pressure can be resisted.” The pressure comes from the outside — from the press, from civil-liberties groups, and activists — but not from the inside. So the CIA carries the day.

And yet it’s not too late to expose, and learn from, the sorry history of the last decade. Last December, the Senate Intelligence Committee approved a 6,000-page report on the finding of its secret investigation into the treatment of detainees. The report, which has not been made public, describes the CIA’s detention program in minute detail. Among other things, it puts to rest the canard that torture works. In his confirmation hearings, CIA director John Brennan admitted that the report had led him to question “the information that I was given at the time” that so-called “enhanced techniques” had saved lives.

Brennan has learned this; other Americans may not have the chance. The CIA is likely to both dispute the findings and to try to keep them secret. In a letter to Obama, Sen. Mark Udall complained that Brennan had shown “little to no interest” in working with his staff, and had already missed the deadline for response by more than two months. A congressional aide said that there was no sign that the White House had even examined the report, much less prepared a response.

The good news is that the irrepressible Vice President Joe Biden recently advocated publishing the findings, saying that Americans needed to “excise the demons” through a full disclosure of past abuses. Biden even compared the redemptive value of facing the truth on torture to the effect of the war-crimes tribunals on Germany. Obama probably didn’t authorize the analogy, but he may well have signed off on the position — in which case the comment should be read as a pre-emptive shot across the CIA’s bow.

In the course of questioning Brennan during Senate hearings, Sen. Udall quoted Howard Baker, the widely admired Republican moderate from the bygone age of Republican moderates, to the effect that the Church Committee report may well have weakened the CIA in the short run, but strengthened it in the long run — by reminding the agency of what it should as well as shouldn’t do. Apparently even the CIA agrees, since its website carries an admiring description of the committee’s findings. If and when the Senate Intelligence Committee report is made public, in whole or in part, current and former CIA officials, conservative pundits, and Republican politicians will no doubt join as one to warn that America’s national security has been compromised, its enemies emboldened, its intelligence operatives compromised. That’s what they said in 1975. They were wrong then, and they will be wrong now.

via Out With It – By James Traub | Foreign Policy.

via Out With It – By James Traub | Foreign Policy.

Closing Guantanamo—Why it’s Symbolically, Spiritually and Materially Important.


President Barack Obama has made a clear and convincing case for closing Guantanamo! Mostly the same reasons finally articulate were just as true when he initially took office. Closing the stigma of war, crime and national shame has always been a high agenda item for many Americans. It is now the watermark battle ground that could begin to show who or what really runs this country. But think of the mindless excuses from war hawks (including complicity by the mainstream media) to try to stop any transparency about Guantanamo prisoners. But there is simply no way President Obama can close this base on his own without major and active U.S. citizen and world support. How can Congress possibly stand in the way of the reasons President Obama announced for closing the Bush Legacy? Where is the Free Speech movement, where are the campus protests at Madison and Kent State Ohio?

Closing Guantanamo—Why it’s Symbolically, Spiritually and Materially Important.

By Scott Skein

Finally. President Barack Obama has made a clear and convincing case for closing Guantanamo! Yet many Americans expected, or assumed, it would have closed early in his first term—that is to say the case was already self-evident. After all it was one reason this president was elected our new leader—to reverse the criminality and immorality of the Bush Administration. Mostly the same reasons finally articulate were just as true when he initially took office. (See Obama Remembers Gitmo Exists Says ‘Not Necessary’ for American Safety by Lucy Steigewald at AntiWar.com April 30, 2013.)

Closing the stigma of war, crime and national shame has always been a high agenda item for many Americans. It is now the watermark battle ground that could begin to show who or what really runs this country—certain special interests (that elected legislators really represent) and the Pentagon/ CIA or The People of this country. In essence it is our own form of Berlin Wall (and to think Dick Cheney’s company played a part in building it).

As of yet Washington D.C.’s beltway pattern of high corruption level and willful distortion to truth continues to reign supreme. Think about it: Why has there been so much resistance to closing Gulag Gitmo; or getting those prisoners a fair and/or public trial (rather than so much hoopla about defining them as enemy combatants); or treating them halfway decently before declared guilty by a fair trial, etc., (in our covert world of black ops prisons with the help of “extraordinary” renditions. It seems the whole war on terror has become terrorism?

And likely it’s not because most of those people were, or are, all that dangerous—but rather it is that truth itself that is dangerous—that is a greater truth to which 9/11 was forged to serve—once it happened and could be quickly capitalized. It was always about avoiding the laws of our country and international treaties.

Several contingency groups benefited from 9/11 (see essay “9/11: Who Really Benefited?” by Captain America found on the Internet). Three powerful contingencies that benefited are: 1) investors of the military industrial complex and related private contractors and mercenary groups who literally have made a killing since, 2) investors (that is owners of securities) of major oil companies, and 3) Zionists who wanted to further make U.S. foreign policy equivalent to what was, and still is, really the policy goals of right-wing Zionists—such as to get Americans to believe all of Israel’s enemies are equally enemies of the people of the United States (even if most Americans are not Jewish or Israeli), and to get the U.S Government to label Israel’s enemies as all terrorists as policy and propaganda (which resulted from a long term, major propaganda campaign—see Benjamin Netanyahu’s 2001 reprint of 1995 book Fighting Terrorism: How Democracies Can Defeat the International Terrorist Network as one of many, many examples).

Since 9/11, U.S. foreign policy has in effect opened up the opium trade in Afghanistan; illegally attacked Israel’s enemy Saddam Hussein and that nation (see “I don’t mean to say I told you so, but….” by Stephen Walt at http://walt.foreignpolicy.com/posts/2010/02/08/i_dont_m…o_but ).

And now we are destroying Syria (for Israel or please explain how Syria is so important to the American people that we should be so meddlesome in their affairs) as we are still on track to attack Iran with uncompromising demands, similar to our demands for unconditional surrender from Japan in WW2 that more or less guaranteeing Japan would not so we used two nuclear bombs with mass civilian casualties (as this standoff is equally for Israel); and the fact that such endeavors cost unimaginable amounts of American tax dollars and potentially could cost many American lives doesn’t seem to mean a thing to the Neo-Con-Artists—who basically came up with this hegemony. Nor did they care whether such events destroyed our overall economic viability.

But think of the mindless excuses from war hawks (including complicity by the mainstream media) to try to stop any transparency about Guantanamo prisoners—including how many were randomly rounded up in Afghanistan via blood money paid to War Lords—yes bribery money ultimately from tax payers via our government employees). If war is about winning hearts and minds then who wants to learn truth about how things really go down—better to keep things under the rug and away from the home front?

There are several documentaries on Guantanamo that you can find on the Internet. It is not some small, sideline issue—it is central to who and what we are—as opposed to who we claim we are.

Back in November of 2009 Attorney General Eric Holder announced a trial for Khalid Sheikh Mohammed would be held at a Federal Courthouse in New York City. The very next month an quixotic and bizarre underwear bomber story emerged and it more or less buried any discussion about the trial (that some in NYC did not want). That underwear bomber story scenario was not only a idiotic plot—it always seemed suspicious—as some conspiracy theorists have found plenty enough to question. Nevertheless the mainstream media played it like a real threat ad nauseum (never suggesting intelligence groups or types do engage “active measures” from time to time to affect outcomes—if for no other reason than to protect their own backsides).

Then shortly thereafter came the racism of Pamela Geller and Robert Spenser and their Stop the Islamization of America group complaining about the Ground Zero Mosque. After this carried on a few months there was little, if any, discussion for public or fair trials for prisoners of America’s gulag system—such ideas were effectively shunted—and equally there grew more imbecile excuses as to why the “mighty” U.S. could not close it down, culminating to hair-brained notions as such men were “too” dangerous to imprison on American soil (even as this high ratio prisoner society has routinely locked up more dangerous men).

Whereas, in previous years the mainstream had inundated the public consciousness with endless discussions about whether water boarding was really torture—while completely and deliberately ignoring an International Red Cross report (sent to all major U.S news outlets) that stated at least 44 people were known to have died from U.S. sponsored torture.

But there is simply no way President Obama can close this base on his own, or at least the prison part of it, without major and active U.S. citizen and world support. President Obama is surrounded by an entrenched cabinets of the Executive branch—they act power-hungry and have establishment the fact they have little respect for law. Equally a top-down and corrupted democratic party suffocates any possibility for clean and refreshing air. It was his choice of Ramn Israel Emanuel for Chief of Staff, in his first term, who apparently helped sideline the Guantanamo issue.

It is not enough for Cenk Uygur of The Young Turks to admonish the President, or correctly criticize him, for not having the stomach for a tough fight. There has to be a major coalition of the American people with him, willing to let Congress, and their staffs, know we Americans are tired of this status quo, and we are going to do something about it. (Currently you can’t even email some U.S. Senators a statement of any length—it prints as all run together—no spacing—take John McCain’s official email sight as example? Obviously he, nor his staff, doesn’t even read from the constituency—and it’s not just such level of arrogance—but also how mediocre are many of their minds.

Why has not the U.S. Senate called for an investigation of the likely assassination of Paul Wellstone, who was positioned to be re-elected for another term? You see it’s not really about being Jewish—but rather if you are crazy, right-wing NeoCon or not).

Americans must make a firm and powerful stand now—bigger than the Occupy Movement. Where is the Free Speech movement, where are the campus protests at Madison and Kent State Ohio? Think tanks were betting as long as there was no draft there wouldn’t be much protests. The D.C. Mall should be flooded this summer with people demanding justice for all people. This is not a party issue—it is All American issue.

It seems too many of our elected leaders are corrupted. How can they possibly stand in the way of the reasons President Obama announced for closing the Bush Legacy? Congress is acting as traitors to our very values and Constitutional liberties. They must be ousted from any decision-making capacity—if not put on trial for high crimes of treason.

We must force the military and intelligence quagmire to subordinate to the President. To think that mere men and women at the top of echelons were placing themselves into position to play some egotistical God—that is one who could arbitrarily make up the rules, could judge according to one’s own sanctimonious dictates, could willfully sanction war and murder, and could punish with some nebulous form of eternal torture as hell (with no possible right to justifiable Justice), is beyond comprehension and the pale—unless one realizes how the very meaning of corruption comports itself even within the ambiance of Washington D.C. We don’t need another Arab Spring but we do need our own form of American Summer.

We must reclaim our participatory role. The question is not whether the president has given up on common sense and idealism—but rather whether the American people have.

THIS IS THE TIME AND THIS IS THE ISSUE OF CONTENTION

OCCUPY! OCCUPY! OCCUPY!

via Closing Guantanamo—Why it’s Symbolically, Spiritually and Materially Important. – Indymedia Ireland.

via Closing Guantanamo—Why it’s Symbolically, Spiritually and Materially Important. – Indymedia Ireland.

Who pays the real costs for oil from shale?


If you externalize the costs of a business activity, it means other people pay the costs—environmental, social and otherwise—and you get the profits. It goes on all the time in extractive industries such as oil and natural gas and mining. And, it is also a natural strategy for manufacturers who dump their pollution into the air and the water.

It’s even practiced in finance where the executives of Wall Street banks have managed to collect the bonuses made off a phony boom in the last decade and saddle taxpayers with the losses of the inevitable bust caused by bad and often fraudulent loans, misleading derivative contracts, and leveraged speculation in stocks and commodities.

If the loopholes are there, you can be assured that people in business will take advantages of them. That’s exactly what is happening in the business of shale gas drilling. Drillers are exempt from federal clean air and water regulations under a bill shepherded through Congress in 2005 by none other former Halliburton CEO Dick Cheney in his capacity as the then vice president of the United States. (Halliburton is one of the world’s largest providers of drilling fluids for shale gas drilling and other oil and gas drilling operations.)

That means the drillers can externalize the environmental costs of these hazardous fluids and other materials needed to fracture the shale and thereby free the natural gas. They can foist those costs on nearby residents in the form of ruined water supplies, toxic air pollution, poisoned land, and health problems for humans and animals.

The environmental and health horrors associated with shale gas drilling are now in the news on a daily basis. But I have begun to think about the issue in another way. All of these externalized costs have an energy cost. And, the toxic fracturing fluid—millions of gallons of which are pumped into each and every shale gas well—will stretch out the time frame during which such costs are borne.

No one knows what will happen to the half of that fluid which never returns to the surface during operations. There is concern that it could migrate to drinking water aquifers and destroy the drinking water not just for the few who happen to live near a drilling site, but for people living in huge swaths of the United States by polluting water sources for large cities such as New York.

Now, of course, that water could be cleaned up if it becomes toxic. Already shale gas drillers are having to provide filtering systems for people whose well water has become contaminated. In some cases, even this isn’t enough, and water must now be trucked in to families whose water is no longer fit to drink even with filtering.

In order to judge whether shale gas will provide any net energy to society, we must first decide where to set its system boundaries. It is hard to know exactly where to stop spatially: Should we, for example, include the energy needs of a family dependent on a worker at a subcontractor that provides software services to the driller? But, it is even harder to know what time frame to use.

One thing is certain. The legacy energy costs of doing shale gas drilling will not disappear anytime soon. The country and its people could be paying the externalized costs of such drilling decades after it ceases to provide any material benefit to society.

If New York city is forced to expend considerable energy to purify its water to clean out toxic chemicals leaching from wells in its watershed 50 years from now, how shall we then judge the presumed bounty of energy that shale gas supposedly represents?

The same kinds of questions have been raised about nuclear energy. If one takes into account the entire energy cost over time of building, operating, decommissioning, and then protecting decommissioned plants and their wastes—wastes that will remain dangerous for conceivably tens of thousands of years—it is possible to understand why some people claim that nuclear energy provides no net energy to society. Rather, it burdens future generations with huge legacy energy costs. We who are alive today get to externalize the energy costs of nuclear power by foisting them on future generations. This is probably the only way that one can consider nuclear power—as it is currently configured—an energy source rather than an energy sink.

I believe we may ultimately find that shale gas is nothing but an energy sink. It will provide net energy for a while to those who are living now while burdening future generations with huge cleanup costs that, in terms of energy, may equal or exceed the energy gain we are currently receiving from this supposedly “clean” energy source.

via Who pays the real costs for oil from shale? : Climate & Capitalism.

via Who pays the real costs for oil from shale? : Climate & Capitalism.

A tortured history, a reflection of utter failure


Could you or I be kidnapped and waterboarded and still have no right to sue?

NATO forces have refused to turn Afghan prisoners over to some local jails due to concerns about the torture committed in many of those detention centers. After a dozen years of U.S. efforts to export democracy to Afghanistan, that’s just one example of why this mission has proven to be an utter failure.

The Guantánamo prison also illustrates what’s gone wrong with our permanent battle formerly known as the Global War on Terror. President Barack Obama promised to shut it down when he was first sworn in four years ago, but the Caribbean detention center is still wrecking lives and standing as a gleaming symbol of so many things that are wrong with U.S. foreign policy.

The biggest obstacle to closing Gitmo is the dilemma of what to do with the detainees still held there. In any event, Congress has barred their transfer to American soil. People here have rights, or at least used to, and we surely can’t afford to let terror suspects claim any of those.

The farther they are from U.S. shores, and the murkier the justice systems of the receiving nations, the harder it’s going to be to trace any appalling abuse back to our “anti-terrorism” experts.

So hard, in fact, that Attorney General Eric Holder has ruled it can’t be done. No prosecutions await, therefore, for George W. Bush, Dick Cheney, Donald Rumsfeld, David Petraeus, Barack Obama, Leon Panetta, or the hundreds — maybe thousands — of underlings who oversaw acts of torture committed in U.S. custody or later covered them up. We can’t be entirely sure whether such deeds still go on until some brave soul makes another movie or another whistleblower decides it’s worth life in jail to tell us.

That’s why I consider John Kiriakou, the former CIA officer who spilled the beans about waterboarding, a hero.

The FBI prosecuted him for divulging the name of another agent to a journalist. Even though the reporter didn’t publish the operative’s name, Kiriakou began serving a 30-month prison sentence on Feb. 28. This made the whistleblower the only CIA officer to do time for anything related to torture

As Kiriakou’s fate indicates, our justice system isn’t much help for thwarting government-sponsored abuse. A federal appeals court has ruled that even U.S. citizens who were tortured by our own military have no “right of action.” How’s that? Could you or I be kidnapped and waterboarded too and still have no right to sue? Attacked by one of our own government’s drones?

Historically, it’s no surprise that torture turns out to be an established weapon in America’s diplomatic arsenal.

After all, look at the history behind the School of the Americas, where some of the most vicious leaders in Latin America learned terror techniques at our behest. That training beefed up our ability to defend friendly dictators in the West, and to oust leftist leaders who somehow managed to get elected.

U.S. citizens understandably have trouble knowing what to believe. It just can’t be true that our own virtuous democracy has, now or ever, perpetuated torture. But then there is all the evidence. Guantánamo detainees have been subjected to everything from sensory deprivation to Chinese torture techniques.

Washington will have us believe that the victims are all terrorists. And the Republicans (John McCain aside) say it’s really OK since we must be getting some valuable information.

The rest of the world isn’t quite so sure. A war crimes tribunal in Malaysia has independently found the United States guilty of those crimes. So have the European Court of Human Rights and the Italian Supreme Court.

In his second term, President Barack Obama should shut Gitmo and put an end to these abuses that stain our nation’s integrity.

OtherWords columnist William A. Collins is a former state representative and a former mayor of Norwalk, Connecticut. OtherWords.org

via WILLIAM A. COLLINS: A tortured history, a reflection of utter failure- The Register Citizen.

via WILLIAM A. COLLINS: A tortured history, a reflection of utter failure- The Register Citizen.

How Bush won the war in Iraq – really!


If you thought it was “Blood for Oil“–you’re wrong.  It was far, far worse.

Because it was marked “confidential” on each page, the oil industry stooge couldn’t believe the US State Department had given me a complete copy of their secret plans for the oil fields of Iraq. Actually, the State Department had done no such thing. But my line of bullshit had been so well-practiced and the set-up on my mark had so thoroughly established my fake identity, that I almost began to believe my own lies.

I closed in. I said I wanted to make sure she and I were working from the same State Department draft. Could she tell me the official name, date and number of pages? She did.

Bingo! I’d just beaten the Military-Petroleum Complex in a lying contest, so I had a right to be stoked.

After phoning numbers from California to Kazakhstan to trick my mark, my next calls were to the State Department and Pentagon. Now that I had the specs on the scheme for Iraq’s oil – that State and Defense Department swore, in writing, did not exist – I told them I’d appreciate their handing over a copy (no expurgations, please) or there would be a very embarrassing story on BBC Newsnight.

Within days, our chief of investigations, Ms Badpenny, delivered to my shack  in the woods outside New York a 323-page, three-volume program for Iraq’s oil crafted by George Bush’s State Department and petroleum insiders meeting secretly in Houston, Texas.

I cracked open the pile of paper – and I was blown away.

Like most lefty journalists, I assumed that George Bush and Tony Blair invaded Iraq to buy up its oil fields, cheap and at gun-point, and cart off the oil. We thought we knew the neo-cons true casus belli: Blood for oil.

But the truth in the confidential Options for Iraqi Oil Industry was worse than “Blood for Oil”. Much, much worse.

The key was in the flow chart on page 15, Iraq Oil Regime Timeline & Scenario Analysis:

“…A single state-owned company …enhances a government’s relationship with OPEC.”

Let me explain why these words rocked my casbah.

I’d already had in my hands a 101-page document, another State Department secret scheme, first uncovered by Wall Street Journal reporter Neil King, that called for the privatization, the complete sell-off of every single government-owned asset and industry. And in case anyone missed the point, the sales would include every derrick, pipe and barrel of oil, or, as the document put it, “especially the oil”.

That plan was created by a gaggle of corporate lobbyists and neo-cons working for the Heritage Foundation. In 2004, the plan’s authenticity was confirmed by Washington power player Grover Norquist. (It’s hard to erase the ill memory of Grover excitedly waving around his soft little hands as he boasted about turning Iraq into a free-market Disneyland, recreating Chile in Mesopotamia, complete with the Pinochet-style dictatorship necessary to lock up the assets – while behind Norquist, Richard Nixon snarled at me from a gargantuan portrait.)

The neo-con idea was to break up and sell off Iraq’s oil fields, ramp up production, flood the world oil market – and thereby smash OPEC and with it, the political dominance of Saudi Arabia.

General Jay Garner also confirmed the plan to grab the oil. Indeed, Garner told me that Secretary of Defense Donald Rumsfeld fired him, when the General, who had lived in Iraq, complained the neo-con grab would set off a civil war. It did. Nevertheless, Rumsfeld replaced Garner with a new American viceroy, Paul Bremer, a partner in Henry Kissinger’s firm, to complete the corporate takeover of Iraq’s assets – “especially the oil”.

But that was not to be. While Bremer oversaw the wall-to-wall transfer of Iraqi industries to foreign corporations, he was stopped cold at the edge of the oil fields.

How? I knew there was only one man who could swat away the entire neo-con army: James Baker, former Secretary of State, Bush family consiglieri and most important, counsel to Exxon-Mobil Corporation and the House of Saud.

(One unwitting source was industry oil-trading maven Edward Morse of Lehman/Credit Suisse, who threatened to sue Harper’s Magazine for my quoting him. Morse denied I ever spoke with him. But when I played the tape from my hidden recorder, his memory cleared and he scampered away.)

Weirdly, I was uncovering that the US oil industry was using its full political mojo to prevent their being handed ownership of Iraq’s oil fields. That’s right: The oil companies did NOT want to own the oil fields – and they sure as hell did not want the oil. Just the opposite. They wanted to make sure there would be a limit on the amount of oil that would come out of Iraq.

There was no way in hell that Baker’s clients, from Exxon to Abdullah, were going to let a gaggle of neo-con freaks smash up Iraq’s oil industry, break OPEC production quotas, flood the market with six million barrels of Iraqi oil a day and thereby knock its price back down to $13 a barrel where it was in 1998.

Big Oil simply could not allow Iraq’s oil fields to be privatized and taken from state control. That would make it impossible to keep Iraq within OPEC (an avowed goal of the neo-cons) as the state could no longer limit production in accordance with the cartel’s quota system..

The problem with Saddam was not the threat that he’d stop the flow of oil – he was trying to sell more. The price of oil had been boosted 300 percent by sanctions and an embargo cutting Iraq’s sales to two million barrels a day from four. With Saddam gone, the only way to keep the damn oil in the ground was to leave it locked up inside the busted state oil company which would remain under OPEC (i.e. Saudi) quotas.

The James Baker Institute quickly and secretly started in on drafting the 323-page plan for the State Department. In May 2003, w ith authority granted from the top (i.e. Dick Cheney), ex-Shell Oil USA CEO Phil Carroll was rushed to Baghdad to take charge of Iraq’s oil. He told Bremer, “There will be no privatization of oil – END OF STATEMENT.” Carroll then passed off control of Iraq’s oil to Bob McKee of Halliburton, Cheney’s old oil-services company, who implemented the Baker “enhance OPEC” option anchored in state ownership.

Some oil could be released, mainly to China, through limited, but lucrative, “production sharing agreements”.

And that’s how George Bush won the war in Iraq. The invasion was not about “blood for oil”, but something far more sinister: blood for no oil. War to keep supply tight and send prices skyward.

Oil men, whether James Baker or George Bush or Dick Cheney, are not in the business of producing oil. They are in the business of producing profits.

And they’ve succeeded. Iraq, capable of producing six to 12 million barrels of oil a day, still exports well under its old OPEC quota of three million barrels.

The result: As we mark the tenth anniversary of the invasion this month, we also mark the fifth year of crude at $100 a barrel.

As George Bush could proudly say to James Baker: Mission Accomplished!

*  *  *  *  *  *  *

Palast is the author of the New York Times bestsellers Billionaires & Ballot Bandits: How to Steal an Election in 9 Easy Steps, The Best Democracy Money Can Buy, Armed Madhouse and the highly acclaimed Vultures’ Picnic, named Book of the Year 2012 on BBC Newsnight Review.

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via Greg Palast | Investigative Reporter.

via Greg Palast | Investigative Reporter.

The end of the New World Order


lehman-new-world-order

In the late summer of 2008, two events in quick succession signalled the end of the New World Order. In August, the US client state of Georgia was crushed in a brief but bloody war after it attacked Russian troops in the contested territory of South Ossetia.

The former Soviet republic was a favourite of Washington’s neoconservatives. Its authoritarian president had been lobbying hard for Georgia to join Nato’s eastward expansion. In an unblinking inversion of reality, US vice-president Dick Cheney denounced Russia‘s response as an act of “aggression” that “must not go unanswered”. Fresh from unleashing a catastrophic war on IraqGeorge Bush declared Russia’s “invasion of a sovereign state” to be “unacceptable in the 21st century”.

As the fighting ended, Bush warned Russia not to recognise South Ossetia’s independence. Russia did exactly that, while US warships were reduced to sailing around the Black Sea. The conflict marked an international turning point. The US’s bluff had been called, its military sway undermined by the war on terror, Iraq and Afghanistan. After two decades during which it bestrode the world like a colossus, the years of uncontested US power were over.

Three weeks later, a second, still more far-reaching event threatened the heart of the US-dominated global financial system. On 15 September, the credit crisis finally erupted in the collapse of America’s fourth-largest investment bank. The bankruptcy of Lehman Brothers engulfed the western world in its deepest economic crisis since the 1930s.

The first decade of the 21st century shook the international order, turning the received wisdom of the global elites on its head – and 2008 was its watershed. With the end of the cold war, the great political and economic questions had all been settled, we were told. Liberal democracy and free-market capitalism had triumphed. Socialism had been consigned to history. Political controversy would now be confined to culture wars and tax-and-spend trade-offs.

In 1990, George Bush Senior had inaugurated a New World Order, based on uncontested US military supremacy and western economic dominance. This was to be a unipolar world without rivals. Regional powers would bend the knee to the new worldwide imperium. History itself, it was said, had come to an end.

But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two factors were crucial. By the end of a decade of continuous warfare, the US had succeeded in exposing the limits, rather than the extent, of its military power. And the neoliberal capitalist model that had reigned supreme for a generation had crashed.

It was the reaction of the US to 9/11 that broke the sense of invincibility of the world’s first truly global empire. The Bush administration’s wildly miscalculated response turned the atrocities in New York and Washington into the most successful terror attack in history.

Not only did Bush’s war fail on its own terms, spawning terrorists across the world, while its campaign of killings, torture and kidnapping discredited Western claims to be guardians of human rights. But the US-British invasions of Afghanistan and Iraq revealed the inability of the global behemoth to impose its will on subject peoples prepared to fight back. That became a strategic defeat for the US and its closest allies.

This passing of the unipolar moment was the first of four decisive changes that transformed the world – in some crucial ways for the better. The second was the fallout from the crash of 2008 and the crisis of the western-dominated capitalist order it unleashed, speeding up relative US decline.

This was a crisis made in America and deepened by the vast cost of its multiple wars. And its most devastating impact was on those economies whose elites had bought most enthusiastically into the neoliberal orthodoxy of deregulated financial markets and unfettered corporate power.

A voracious model of capitalism forced down the throats of the world as the only way to run a modern economy, at a cost of ballooning inequality and environmental degradation, had been discredited – and only rescued from collapse by the greatest state intervention in history. The baleful twins of neoconservatism and neoliberalism had been tried and tested to destruction.

The failure of both accelerated the rise of China, the third epoch-making change of the early 21st century. Not only did the country’s dramatic growth take hundreds of millions out of poverty, but its state-driven investment model rode out the west’s slump, making a mockery of market orthodoxy and creating a new centre of global power. That increased the freedom of manoeuvre for smaller states.

China’s rise widened the space for the tide of progressive change that swept Latin America – the fourth global advance. Across the continent, socialist and social-democratic governments were propelled to power, attacking economic and racial injustice, building regional independence and taking back resources from corporate control. Two decades after we had been assured there could be no alternatives to neoliberal capitalism, Latin Americans were creating them.

These momentous changes came, of course, with huge costs and qualifications. The US will remain the overwhelmingly dominant military power for the foreseeable future; its partial defeats in Iraq and Afghanistan were paid for in death and destruction on a colossal scale; and multipolarity brings its own risks of conflict. The neoliberal model was discredited, but governments tried to refloat it through savage austerity programmes. China’s success was bought at a high price in inequality, civil rights and environmental destruction. And Latin America’s US-backed elites remained determined to reverse the social gains, as they succeeded in doing by violent coup in Honduras in 2009. Such contradictions also beset the revolutionary upheaval that engulfed the Arab world in 2010-11, sparking another shift of global proportions.

By then, Bush’s war on terror had become such an embarrassment that the US government had to change its name to “overseas contingency operations”. Iraq was almost universally acknowledged to have been a disaster, Afghanistan a doomed undertaking. But such chastened realism couldn’t be further from how these campaigns were regarded in the western mainstream when they were first unleashed.

To return to what was routinely said by British and US politicians and their tame pundits in the aftermath of 9/11 is to be transported into a parallel universe of toxic fantasy. Every effort was made to discredit those who rejected the case for invasion and occupation – and would before long be comprehensively vindicated.

Michael Gove, now a Tory cabinet minister, poured vitriol on the Guardian for publishing a full debate on the attacks, denouncing it as a “Prada-Meinhof gang” of “fifth columnists”. Rupert Murdoch’s Sun damned those warning against war as “anti-American propagandists of the fascist left”. When the Taliban regime was overthrown, Blair issued a triumphant condemnation of those (myself included) who had opposed the invasion of Afghanistan and war on terror. We had, he declared, “proved to be wrong”.

A decade later, few could still doubt that it was Blair’s government that had “proved to be wrong”, with catastrophic consequences. The US and its allies would fail to subdue Afghanistan, critics predicted. The war on terror would itself spread terrorism. Ripping up civil rights would have dire consequences – and an occupation of Iraq would be a blood-drenched disaster.

The war party’s “experts”, such as the former “viceroy of Bosnia” Paddy Ashdown, derided warnings that invading Afghanistan would lead to a “long-drawn-out guerrilla campaign” as “fanciful”. More than 10 years on, armed resistance was stronger than ever and the war had become the longest in American history.

It was a similar story in Iraq – though opposition had by then been given voice by millions on the streets. Those who stood against the invasion were still accused of being “appeasers”. US defence secretary Donald Rumsfeld predicted the war would last six days. Most of the Anglo-American media expected resistance to collapse in short order. They were entirely wrong.

A new colonial-style occupation of Iraq would, I wrote in the first week of invasion, “face determined guerrilla resistance long after Saddam Hussein has gone” and the occupiers “be driven out”. British troops did indeed face unrelenting attacks until they were forced out in 2009, as did US regular troops until they were withdrawn in 2011.

But it wasn’t just on the war on terror that opponents of the New World Order were shown to be right and its cheerleaders to be talking calamitous nonsense. For 30 years, the west’s elites insisted that only deregulated markets, privatisation and low taxes on the wealthy could deliver growth and prosperity.

Long before 2008, the “free market” model had been under fierce attack: neoliberalism was handing power to unaccountable banks and corporations, anti-corporate globalisation campaigners argued, fuelling poverty and social injustice and eviscerating democracy – and was both economically and ecologically unsustainable.

In contrast to New Labour politicians who claimed “boom and bust” to be a thing of the past, critics dismissed the idea that the capitalist trade cycle could be abolished as absurd. Deregulation, financialisation and the reckless promotion of debt-fuelled speculation would, in fact, lead to crisis.

The large majority of economists who predicted that the neoliberal model was heading for breakdown were, of course, on the left. So while in Britain the main political parties all backed “light-touch regulation” of finance, its opponents had long argued that City liberalisation threatened the wider economy.

Critics warned that privatising public services would cost more, drive down pay and conditions and fuel corruption. Which is exactly what happened. And in the European Union, where corporate privilege and market orthodoxy were embedded into treaty, the result was ruinous. The combination of liberalised banking with an undemocratic, lopsided and deflationary currency union that critics (on both left and right in this case) had always argued risked breaking apart was a disaster waiting to happen. The crash then provided the trigger.

The case against neoliberal capitalism had been overwhelmingly made on the left, as had opposition to the US-led wars of invasion and occupation. But it was strikingly slow to capitalise on its vindication over the central controversies of the era. Hardly surprising, perhaps, given the loss of confidence that flowed from the left’s 20th-century defeats – including in its own social alternatives.

But driving home the lessons of these disasters was essential if they were not to be repeated. Even after Iraq and Afghanistan, the war on terror was pursued in civilian-slaughtering drone attacks from Pakistan to Somalia. The western powers played the decisive role in the overthrow of the Libyan regime – acting in the name of protecting civilians, who then died in their thousands in a Nato-escalated civil war, while conflict-wracked Syria was threatened with intervention and Iran with all-out attack.

And while neoliberalism had been discredited, western governments used the crisis to try to entrench it. Not only were jobs, pay and benefits cut as never before, but privatisation was extended still further. Being right was, of course, never going to be enough. What was needed was political and social pressure strong enough to turn the tables of power.

Revulsion against a discredited elite and its failed social and economic project steadily deepened after 2008. As the burden of the crisis was loaded on to the majority, the spread of protests, strikes and electoral upheavals demonstrated that pressure for real change had only just begun. Rejection of corporate power and greed had become the common sense of the age.

The historian Eric Hobsbawm described the crash of 2008 as a “sort of right-wing equivalent to the fall of the Berlin wall”. It was commonly objected that after the implosion of communism and traditional social democracy, the left had no systemic alternative to offer. But no model ever came pre-cooked. All of them, from Soviet power and the Keynesian welfare state to Thatcherite-Reaganite neoliberalism, grew out of ideologically driven improvisation in specific historical circumstances.

The same would be true in the aftermath of the crisis of the neoliberal order, as the need to reconstruct a broken economy on a more democratic, egalitarian and rational basis began to dictate the shape of a sustainable alternative. Both the economic and ecological crisis demanded social ownership, public intervention and a shift of wealth and power. Real life was pushing in the direction of progressive solutions.

The upheavals of the first years of the 21st century opened up the possibility of a new kind of global order, and of genuine social and economic change. As communists learned in 1989, and the champions of capitalism discovered 20 years later, nothing is ever settled.

This is an edited extract from The Revenge of History: the Battle for the 21st Century by Seumas Milne, published by Verso. 

via The end of the New World Order | Seumas Milne | Comment is free | The Guardian.

via The end of the New World Order | Seumas Milne | Comment is free | The Guardian.

Obama: Mitt Romney Is A ‘Bulls****er’


Obama Bullshitter

President Barack Obama used a profanity to describe GOP presidential nominee Mitt Romney in a Rolling Stone interview, according to an excerpt released Thursday by Politico’s Mike Allen.

Douglas Brinkley, who wrote the Rolling Stone article, recalled an exchange with Obama and Rolling Stone executive editor Eric Bates, who said that his daughter told him to tell the president, “You can do it.”

Obama reportedly grinned. “You know, kids have good instincts,” he said. “They look at the other guy and say, ‘Well, that’s a bulls****er, I can tell.'”

White House Communications Director Dan Pfeiffer was asked about the comment Thursday in Richmond, Va., and said the issue was about Romney’s “trust.” He said people should “not be distracted by the word” but to “focus on the issue.”

Following Mitt Romney’s moderate shift in the first presidential debate in Denver, Obama and his allies have suggested that the former Massachusetts governor can’t be trusted. “So we know Governor Romney’s jobs plan doesn’t create jobs. His deficit plan doesn’t reduce the deficit. And we joke about ‘Romnesia,’ but all of this speaks to something that’s really important, and that is the issue of trust. There’s no more serious issue on a presidential campaign than trust. Trust matters,” Obama said Wednesday in Davenport, Iowa.

It’s not the first time that the president has used unvarnished language. He has called Kanye West a “jackass” but added the rapper is “talented.” Neither is he the first candidate to curse: then-candidate George W. Bush called New York Times reporter Adam Clymer a “major league asshole” over a hot mic, to which vice-presidential nominee Dick Cheney agreed.

via Obama: Mitt Romney Is A ‘Bulls****er’.

via Obama: Mitt Romney Is A ‘Bulls****er’.

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