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6  My wife bought a pen yesterday.

Specifically, a Montblanc Boheme Platinum Line fountain pen. That is, she bought a $400 pen.

Hey, don’t look at me. She bought it with her birthday money. And she works for a bank. And it is truly a superior calligraphic machine. And I damn sure know better than to point to the bucket of pens I’ve stolen from various places of business (it’s my personal favorite vice) and say, “but you have hundreds of perfectly good pens right here!

But in case any of you who admire me from afar are thinking about buying me a $400 pen, you should buy me a $100 pen and a DVD-rewritable drive. Or two $10 pens and a 15-gig iPod (with educational discount). Or — ooh! — one of every Prismacolor colored pencil that’s ever existed. I have enough trouble, as she at one point constantly reminded me, keeping track of my wedding ring. (Jeez, you leave your ring home for one two-week-long honeymoon…)

 

Nelson Plan to Save the Planet!
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Click Video Topeka Town Hall 7-30-08 1 hour 5 min
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Reduce waste saving "One Drop Of Oil" at a time.
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Reduce consumption saving "One Drop Of Oil" at a time.
3 Change our Culture and Patriotism
 www.AmericanPatriotismNeeded.com  Get Americans to be patriotic (This Is going to be hard.)

1/3 

Conspicuous Consumptivitis??? http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=005iQm

Does the strength of our economy depend on our individual financial weakness? That can't be right. Help me out here...

-- Paulineee (paulineee_@hotmail.com), July 10, 2001

Answers

No, it depends on a carefully crafted system that promotes the latest hip-hop and ignores Debussy, that promotes uninhibted sexuality but ignores love, that bleats endlessly about human rights but forgets about human responsibilities. It equally depends upon our children never learning about such things in school, where they would be un- cool, at home, where we are too embarrassed to mention them (often because we don't know enough about 'em).

Our economy is based upon cheap, reproducable, disposible trash and can only function when that which is real, enduring and beautiful is hidden from our youth.

If we want to change this then we must begin by teaching values to our children (presuming we can articulate them sufficiently well to communicate the ideas).

We must also teach them language (a prickly subject in Quebec) for language is the medium in which we think. Fuzzy language leads to fuzzy thought.

I live in Vienna. I go to concerts (Strauss, Wagner, Beethoven) and I see that 2/3 of the audience is under thirty as are many of the musicians. Unthinkable in North America.

If our economy is based on consoicuous and pointless consumption it is because we have failed to retain and teach anything more enduring. We can change it if we will, but it will require committment and work.

-- Jeremy Brown (dipdoc@hotmail.com), July 11, 2001.

Does the strength of our economy depend on our individual financial weakness? That can't be right. Help me out here...

-- Paulineee (paulineee_@hotmail.com), July 10, 2001

Answers

No, it depends on a carefully crafted system that promotes the latest hip-hop and ignores Debussy, that promotes uninhibted sexuality but ignores love, that bleats endlessly about human rights but forgets about human responsibilities. It equally depends upon our children never learning about such things in school, where they would be un- cool, at home, where we are too embarrassed to mention them (often because we don't know enough about 'em).

Our economy is based upon cheap, reproducable, disposible trash and can only function when that which is real, enduring and beautiful is hidden from our youth.

If we want to change this then we must begin by teaching values to our children (presuming we can articulate them sufficiently well to communicate the ideas).

We must also teach them language (a prickly subject in Quebec) for language is the medium in which we think. Fuzzy language leads to fuzzy thought.

I live in Vienna. I go to concerts (Strauss, Wagner, Beethoven) and I see that 2/3 of the audience is under thirty as are many of the musicians. Unthinkable in North America.

If our economy is based on consoicuous and pointless consumption it is because we have failed to retain and teach anything more enduring. We can change it if we will, but it will require committment and work.

-- Jeremy Brown (dipdoc@hotmail.com), July 11, 2001.

2/3 

 
The Propaganda of Prosperity

The Propaganda of Prosperity

The human costs of maldevelopment
by Ivy George
 

previous article next article
My people are tired of development, they just want to live" was a sentiment expressed by Mexican author Gustavo Esteva in his remarks at a conference of the Society for International Development in 1985. Today as we are surrounded by the propaganda of prosperity, it is exceedingly difficult to ponder the exhaustion and exasperation contained in that statement. The 1980s and 1990s have witnessed expanded investment in countries that have relaxed foreign investment restrictions. The friendly logos of Western corporations are seen all over the world from neon-lit billboards to cars, from electronic items to television programs. In Eastern Europe, Marx is out and Ronald McDonald is in, and in Maoist China, Russian prostitutes are available for services.

The size of the global village is shrinking, the middle classes everywhere are swelling their ranks, the course of capitalism is secure and the "free" market has triumphed once and for all. That the gods of the West have won is the gospel of globalism. While this appears to be the surface picture in the popular press, there are nagging realities that continue to beleaguer the prosperous world—the ecological crisis and the population "problem." The two issues are closely related; I will take up the subject of population and consider how it fits in the global context.

What of the population question? What is so problematic about human population that we have to "control" it? Is talk of "population control" a semantic subterfuge for control of poor people, women, and other "inferior" peoples (frequently those of color)?

Is there a Darwinian urge to engage in triage—a medical practice in wartime when physicians save the strong and leave the weak to die? Is it a strategy for the rich and powerful everywhere to carry on as usual with no thought to control themselves and their numbers? Should we not extend the categorical link between poverty and population to include wealth as part of this triangle of crisis? No doubt these are some of the questions I might ask if my class or tribe of people were the targets of some top-down plans to control growth among our numbers.

The world, with more than six billion people, continues to see population increases in the two-thirds world despite a decline in total fertility rates there. From the standpoint of simple formulae, galloping birth rates and lagging economic growth rates are detrimental for social welfare. Economists and demographers see excessive population growth rates as a direct threat to economic development, the maintenance of the environment, food security, and family health and welfare.

In light of this crisis, international development organizations, the World Bank, foreign governments, and Third World governments have long encouraged and instituted family planning programs to reduce the numbers. Yet rapid population growth in and of itself has not always been a problem. Europe welcomed an increase in population during the Industrial Revolution, as did the United States in the 19th century.

Besides the search for natural resources and raw materials, the value of human resources was also a factor in the rampages of colonialism in the past. Today governments such as those of Singapore and the United States welcome the growth in select populations through their family planning programs and immigration policies. Why then is growth in some segments of the population seen as a drag on development—especially if the world’s food supply is adequate for the feeding of its people, as experts in the United Nation’s Food and Agriculture Organization and other development agencies have attested to over the years?

The "problem" of population ceases to be one if there is adequate distribution of food supplies. The economist Amartya Sen defines the issue in terms of "entitlement," meaning there are large numbers of people who have no access to food because of their social locations. Mahatma Gandhi said, "There is enough in the world for everyone’s need, but not for some people’s greed."

At this juncture one asks, What is the link between population density and poverty? Is the relationship cyclical? While countries like Japan, Holland, and Belgium are densely populated, little energy is spent on the control of their populations and their people don’t rank among the world’s nutritionally needy. They trade their electronic goods for food. Conversely, the Indian state of Kerala (which, if classified as a separate country, would be ranked as the ninth poorest country in the world) has low birth rates compared to the rest of India and other low-income countries. Bolivia, with five people per square kilometer, is susceptible to famine.

How many people is too many people? Is the "too many" in reference to their food needs? Are those who are concerned with needs and resources equally concerned with too few people having access to too much, such as Americans who represent 6 percent of the world’s population and consume 35 percent of the world’s resources? Further, is there a connection between overconsumption and overpopulation? In other words are consumptivitis and "over"-population two squares on the rubik’s cube of social questions?

Analysts vary in their explanations of poverty and population. Nigel Twose of Oxfam argues that while poverty that deprives poor people of access to contraceptives is the reason for large families, the poor themselves are reluctant to have large families. Demographers like Paul Demeny suggest otherwise—that poor families are not keen to plan families because children provide social security for their parents.

Regardless of the correctness of their conclusions, the implication is that reducing poverty will lead to the automatic reduction of population. However, as pointed out previously, there are other intervening variables in the equation. In Kerala, despite low per capita income, birth rates have fallen due to a series of redistributive measures undertaken by the government. These measures were enacted in the areas of land reform, price controls on food and other basic needs, free or inexpensive medical care, public housing, educational services, and various social and economic policies to improve the position of the poorest groups in the population.

Research on Kerala and the other Indian states reveals a weak connection between income and birth rates. Rather, studies show that the states’ redistribution of wealth and provision of basic health care contributed significantly to changing birth rates. Demographer K.C. Zachariah notes that the shifts in birth rates were brought about in the following sequence: "reduction in infant and child mortality, followed by or along with an increase in female education, followed by redistributive policies, and finally the official family-planning programme."

This cameo illustration of Kerala leads us to put the subject of population in a larger framework, one in which population is not treated in isolation from the more critical and imperative discussion of development and human welfare. Such an approach rids us of our perception of God’s creatures as a "problem" we must "control." If we see that all societies are developing, our discussion of human population growth will cease to be in the oppositional categories of us and them, rich and poor, Christian and pagan, First World and Third World.

The imbalance of demographics exists in a more cosmic imbalance of power relations at multiple levels in the global community. All are enmeshed in this gridlock of power, hence it is counterproductive for the long term to isolate population growth and treat it as mere cause or effect.

"My people are tired of development, they just want to live." What is the experience of development that provokes such a response? Essentially, "development" is a post-colonial terminology and program that has emerged from the West to identify and evaluate itself and others on the basis of the success of Western industrial capitalism. The assumption behind development thought is that Western economic categories of "needs," "growth," "efficiency," and "productivity" are inherent goods in themselves and are thus universally applicable to all human societies. The post-colonial era in most non-Western societies has been one of adopting, accommodating, and adjusting to this model of "development"—otherwise known as progress.

There is one snag of chimerical proportions in this paradigm of "development"—the suggestion that development can be had without the colonization of "other" peoples, cultures, and ecologies. Historical and contemporaneous dishonesty abounds in the neglect of this reality among advocates of development. Rosa Luxemberg has pointed out that colonialism is a constant necessary condition for capitalist growth. Thus, while development produces certain forms of wealth, there is an attendant creation of particular forms of human misery and marginalization. It is this "maldevelopment" that Gustavo Esteva laments.

When development is enlarged beyond its conventionally economic connotations, we move toward developing in concert with the entire creation—not only economically, but socially, politically, ecologically, and spiritually. Stated simply, an alternative perspective on development is that it is relational. It is the process of becoming fully human in relation to God and all creation.

This scheme will resist the creation and objectification of poor people whereby they are turned into commodities subjected to the whims of others, or to the cruelties of impersonal forces. Development is about choice and responsibility for the individual that frees her to grow personally and socially. Development is about facilitating the individual to embark on twin journeys—an inner journey of spiritual realization and an outer journey of affecting structures around her. Development is about the twin goals of love and justice.

My use of the female pronoun with regard to development is not only to be gender inclusive but it is also to state the fact that women in the two-thirds world have been victims of development. Alongside her stand all indigenous people and nature. Scores of studies show that her workload has increased, her family structure has been split (with the men leaving to find employment), her control of and access to family resources has decreased, the "goods" of development such as health, education, and credit have all been systematically denied to her. This was the unanimous conclusion at the end of the U.N. Decade for Women in the 1980s. Two-thirds world feminists argue that development is a project of modern Western patriarchy.

However, it seems too late in the day to carry on earlier arguments about colonialism, capitalism, the West, and development. It is beyond dispute that Western values have a far-reaching impact on the destinies of poor people and the Earth. While the impact has been largely mixed, it is clear that rich and poor countries are inextricably intertwined in their relationship of dependence. This relationship of dependence is unequal, with the rich and powerful everywhere exploiting the poor to their advantage.

While communism was a reaction to the failings of capitalism, it too has been a flawed model. Both systems have failed to reckon with the ontological considerations of human nature operant in them. It is human nature to exploit, to overpower, and to subdue. It is equally in the nature of humans to resist evil in their dealings with power. Thus for all the homogenization brought on by globalization and development, resistance is also spawned from its recipients. Material prosperity has not been able to root out the universal desires to pursue or preserve values of community, language, culture, kinship, and religion.

In this heyday of global capitalism, there is no evidence at all that people everywhere will find work, shelter, food, clothing, health, education, and all the supercilious "goods" that the multinationals taunt in their faces. There is a widening gap between the haves and the have-nots globally. Increasing numbers of poor people and their children are part of this gap, and it will be these marginalized groups that will challenge the colonialism of development.

Even as the virus of consumptivitis has caught the imagination of the rich and the poor alike, so also the dream and work of solidarity with God and creation grips a critical remnant of people age after age everywhere. This consciousness for solidarity does not stem from the hubris of having a "solution" to the "problem" of population or poverty. Rather, it rests in the knowledge that love, peace, and justice come about in the freedom of the subordinate partner—whereby all subordination is ended.

One does not merely have to imagine the possibilities. We have already been taken over by creative imagination. The recent report of the young boy in California who was embarrassed by hair loss from cancer treatment and the response of his teacher and several of his classmates to shave their heads in solidarity with him illustrates our capacity to give up freely. My husband is witness daily to the extraordinary care rendered to young gay AIDS patients by their partners, gay nurses, and others from the gay community.

The Freirian pedagogy of the poor is insufficient without an accompanying pedagogy of the rich. Conscientization must be followed by advocacy and confrontation to bring about concrete changes in social structures. In the face of corporate evil, the potential for and the actuality of corporate good also prevails.

The attempt at equity is a mutually engaging process between rich and poor, First World and Third World, church and world, men and women. A unilateral attempt at social change and development is rife with all the old images of paternalism and condescension where it is assumed that in time the "poor" will become like the "rich." The ills of affluence that post-industrialized societies are going through compels us to redefine "wealth."

What can we learn from one another? The story of the Good Samaritan is not merely about giving, it is also about shattering an ancient apartheid. An orthodox Jew accepts help from the "other," a pariah, a Samaritan. The Canaanite woman, while pleading on her ailing daughter’s behalf, actually thwarts Jesus’ agenda. Poor women, indigenous peoples, and the Earth have much to teach us about the follies of our consuming culture. We must learn about the poverty of our abundance and also about the abundance of our poverty.

The process of solidarity is ongoing and unending—in our personal, national, and international relations we must understand the virtues of temperance and acceptance. The task of solidarity is a universal one. It is not merely for the First World in its relationship to the Third World, but it is also a challenge for the ruling elites in the Third World in their relationship to the marginalized.

As the century draws to a close, calls for personal and collective introspection are a distant wail in a wilderness burgeoning with materialism. Poor Indian parents are driven to sell their children into bonded labor to nearby carpet factories that export their product to the United States. Little children in a south Indian fishing village are turning blind for want of vitamin A, as the fish caught by their parents are transported to satisfy the dietary whims of faraway consumers. Thai parents would rather gamble with the AIDS virus than with hunger as they send their little boys and girls off to Bangkok to satisfy the sexual fancies of tourists.

The complicity of the rich (from the megastructures of finance and trade to their personal acquisitiveness) in this violence is less than tenuous. In the main the rich would rather not lose their appetite, and so they flip the channel on the poor in their midst. They blame the victims and their "irresponsible" breeding behaviors with little discussion of their own responsibility in the tragedy.

My own hope for the future well-being of our world flags and flails as I see the overwhelming capacity of free-market capitalism and entrepreneurial Christianity to sway and "save" the world. I am moved by a diary entry by Min Chong Suk, a South Korean sewing-machine operator who works from 7 a.m. to 11:30 p.m. in a garment factory (perhaps she was the seamstress of my blue jeans!). She wrote, "We all have the same hard life. We are bound together with one string."

Something within me resonates also with David Jenkins as he writes in an essay on The Power of the Powerless: "It might be that Christians have to decide how to take sides in light of the fact that the Christian’s basic alignment is always with and for the powerless and that it is the power of powerlessness, when taken up in suffering, absorption, reconciliation and love, which is one constantly creative and open-ended force at work in the world." Such truths about our human bondedness and the possibility of God’s presence are our only guarantees as we pursue our personal and collective destiny.

IVY GEORGE, a native of Madras, India, is professor of sociology at Gordon College in Wenham, Massachusetts.

3/3 

Blue Box 2  Brian Nelson

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10  new internationalist
issue 246 - August 1993

Illustration by CLIVE OFFLEY
Giants stalk, creation trembles Kirkpatrick Sale interprets the ‘gospel of globalism’, the essential values underlying the frenzied drive towards a new world economy.

It is not so surprising that the global corporations that stand to benefit from it have spent so much time and money recently trumpeting the virtues of what is described as the ‘transnational economy’ of the twenty-first century. What’s far more surprising is that they’ve been allowed to get away with it so neatly, without more than a choir-stall of voices raised – late and not always consistently – in dissent.

Of course it’s true that the globalists have been able to develop a gospel full of such chapters and verse as ‘efficiency’, ‘progress’, ‘individualism’, ‘productivity’ and ‘growth’ – and those are hard canons to go up against. But a gospel, after all, is nothing more than a good story (Old English ‘god’ – good, plus ‘spell’ – tale). You would have thought that this late in the day – what with deconstructionism and all – no-one would be allowed to go around spinning their self-serving yarns without some sort of challenge.

Yet here we are with the global gospel everywhere triumphant. The new American President (insofar as he has any convictions of his own) is a proclaimed internationalist, as are his Secretaries of Treasury, Commerce and Energy. And the chief futurist on his new team, Labour Secretary Robert Reich, has been known primarily for his embrace of a global economy in which the US attracts multinational investment by specializing in high-tech/high-intellect production. The Uruguay round of GATT and the new North American Free Trade Agreement, after they go through some tinkering to satisfy a few protectionist types, will ratify the globalism of the industrial world. And the World Bank, IMF, Group of Seven, the European Economic Union and the newly Western-bought UN are in place to guide and protect it. No government anywhere seems inclined to try to halt this economic juggernaut.

And a juggernaut it is: in truth, a Second Industrial Revolution at work. ‘Broad, global forces for change,’ in the words of historian Paul Kennedy, ‘are bearing down upon humankind in both rich and poor societies alike.’ These include, he says, sweeping technological changes in production and marketing, a 24-hour-a-day worldwide financial trading system, an unfettered relocation of factories and trading of products across national borders. ‘Every country is challenged by these global forces for change,’ he says. Most of them, especially in the South, will fail to meet that challenge.

Well, if things are bearing down on us like that, I think it behoves us to take some account of the gospel they are riding on and the values – so deeply held that they are not usually even perceived as arguable – behind it. Because, you see, if those values are allowed to go unchallenged and unaltered, and the gospel of globalism does indeed triumph, the result cannot be anything but the increasing impoverishment of the South, dangerous economic and political distentions for the North and environmental ruination of the greater part of the earth.

In one sense the values of globalism are just the values of modernism – the overarching ideology of industrial capitalism – writ large. And we needn’t slog through all of that familiar and drummed-in litany. There are four key values, however, so important to the emerging global order and so vulnerable to examination, that they deserve some scrutiny.

Monoculturalism – The idea that the world is a single, interdependent market lies behind the commitment to free trade and what the Chief Executive Officer of United Technologies calls ‘a worldwide business environment unfettered by government interference’. In this industrial monoculture factories and people, like parts, are interchangeable, and ‘Coca-Colonization’ extends to every corner of the globe.

The first victims are of course the familiar nation states, whose borders and governments are now impediments – as much in the North where administrations are seduced or bought, as in the South where they are subverted or controlled. Thus over the last decade we have seen the disintegration of national governments in Eurasia, the total collapse of central authority in a variety of states and a hell-bent drive to join in the capitalist game from China and Vietnam to Poland and East Germany.

But monoculturalism won’t stop there. Its need, which has always been the need of industrial capital, is to destroy regional identities, indigenous cultures and even stable communities. Traditions rooted there – self-sufficiency, sustainability, handicrafts, ‘enoughness’ – the market system must eliminate for its success.

Technophilia – What was once a simple drive to replace human work by mechanical work has become a near obsession in our machine-dominated society. It is not merely that the globalists have machines that can slosh billions of dollars around the world instantly at the press of a key, or can alter equally genes or ecosystems or atmospheric layers. What’s critical is that their perspectives must succumb to the patterns set by these machines. Problems must be posed in ways that can be solved by them.

Wealthy Mongolian cradles his mobile phone: the 'velvet trap' of modern technology has spread around the globe.
CHRIS STOWERS / PANOS PICTURES

There’s a lot of talk these days about the ‘information age’ and a ‘post-industrial world’ built on ‘knowledge industries’ and the like. It is what America is supposed to become in the next century, along with a few other chosen partners like Japan and Germany, while most of the industrial world and all but a select few parts of the industrializing world drop farther into poverty. It sounds good to many, and even astute critics like David Morris of the Washington-based Institute for Self Reliance seem to believe that computers will empower individual citizens and permit decentralized independence from the megacorporations.

Nonsense. ‘Information’ is just the currency of the globalists’ machines. The globalists made the machines in their own image and they control the kinds of information those machines are capable of using: the quantifications of life, the reduction of human complexities to analogues. And they are not much interested in empowering citizens or they wouldn’t give us those machines in the first place. To believe otherwise is to fall into the trap of technophilia – a velvet-lined trap, with its VCRs and microwaves and
wordprocessors, but a terrible snare and delusion nonetheless.

There should be no doubt about the fundamental dangers of believing that machines are here to solve our problems. They exist out of their own imperative, a technological imperative backed by a utilitarian science that, as Lewis Mumford so cogently saw, is really ‘the ultimate religion of our seemingly rational age’. He called it ‘the Myth of the Machine’ and warned explicitly of what it meant: ‘bigger and bigger, more and more, farther and farther, faster and faster’– not to mention worse and worse, riskier and riskier, deadlier and deadlier.

There should also be no doubt that if there is to be any salvation for the twenty-first century it will come through biophilia, some kind of profound and thoroughgoing love of nature and a respect for her laws and imperatives. All of which, I need hardly say, are opposed to those of globalism.

Consumptivitis – It is so elemental that we almost overlook it, but the unalterable foundation of industrialism is the disease of unending consumption – of what, it hardly matters – and its accompanying unlimited production. A global economy guided by free trade – that is free of environmental laws and price constraints and resource allotments and national allegiances and labour restrictions – can go into a frenzy of production and consumption, prodded by advertising, sanctioned by consumer culture and driven by the materialism that lies at the heart of Western society.

This consumption need not be equal, within or among nations, to work. In fact the accumulated buying power of the rich must come from the increasing impoverishment of the poor – the underclasses within industrial society (growing by record numbers in the 1980s and 1990s) and the still-colonized countries elsewhere, whose distance from the rich nations is vast and growing wider each year.

There are limits to all this, of course, and they are set by the earth and its systems, already seriously over-stressed. But they are of no concern to globalists, since by definition they have no home and couldn’t care less about that care-of-home that goes by the name ‘ecology’. Without restraints the megacorporations are free to use up resources at an ever-faster rate (remember, the scarcer the resource the more valuable it becomes), to foul the biosphere in their processing of them and to poison air and soil in their disposal of them. There is no concern for the inevitable ecocidal end of this because the corporation, again by definition, does not comprehend the future and must maximize profits in the shortest run possible.

Giantism – Perils there may be in bigness, as the struggling IBM, General Motors and even Mitsubishi demonstrate. But this is the imperative of successful globalism. What you lose now in workforce you simply gain later in hassle-free automation, reduced labour costs and increased profits. Despite its problems General Motors is still the number one American corporation. Moreover the occasional and inevitable misstep (for with all their megamachines, large enterprises are always less efficient than small) is more than made up for by the immense power the global players have. They can twist laws and regulations, shift plants around the globe, open or close markets, set prices, monopolize research and development. The rules, written by the big players always favour the big players, and are designed to forgive them for their flaws and failures.

It has become commonplace to note that such power is beyond the control of any mere citizen or consumer. But corporations have never been democratic, nor were ever meant to be. The largest of them are for the most part impervious not only to popular pressure but even to government suasion. They owe no loyalty to any town or even nation. Wasn’t it revealing that the US pavilion at the World’s Fair in Spain last year was such a meagre, flimsy thing? The main reason was that American companies one after the other refused to kick in funds and thus become associated with the United States. They wished to be seen as ‘global’ instead.

And since there is none to take them on and all the powerful international institutions like the World Bank are of their own making, there is none to halt their increasing growth, or their increasing power to impoverish the people and imperil the earth. Giants really do stalk the world, and most of creation trembles.

The gospel of globalism made up of these essential values bids fair to sanction a corporatist catastrophe in this next century. And I’d be hard put to identify – alas, even to imagine – the forces that would be able to undermine its potent message and the likely outcome. We know what values we would put in its place: community, democracy, decentralization, biophilia, harmony, sustenance. But it is difficult to see what gospel would be able to proclaim them forcefully enough, effectively enough, quickly enough.

Perhaps there is comfort in the knowledge that, in time and probably not too far hence, the earth will recoil from the assault of globalism and in some awful spasm will dispel it and all its work, as a dog shakes off water after a plunge. Whether we will be here afterward, of course, is an open question.

Kirkpatrick Sale spends as much time as he can in rural upstate New York. He is currently working on a book on technophilia.

 

11   Overconsumption

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A Critical Decision

Washington Township, OH, USA
 
The Critical Decision Foundation is an educational organization that encourages citizens around the world to study and question the insidious and dangerous influences large corporations ...
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2. Campus Greens
Chicago, IL, USA
 
Campus Greens is a national organization that unites students across the country who share Green values. The national office acts as a network of support ...
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3. DON'T LET THE UTILITIES TURN OUT THE LIGHTS ON SOLAR ENERGY
San Francisco, CA, USA
 
A Message From Bonnie Raitt and Robert Redford: As people who've been active in the environmental movement for a long time, we'd like to tell you ...
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4. EarthScore: Your Personal Environmental Audit & Guide
Lafayette, CA, USA
 
An interactive guide for people to learn how they impact the environment in thier daily lives. Joel Makower says, "this clever book allows you to assess ...
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5. FREETHIRDWORLD
Atlanta, GA, USA
 
Organization that promotes global health, environmental health, and other important issues that affects the masses. Provides invaluable resources and links to individuals and organizations that ...
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6. Global Issues
 
An insight into numerous inter-related global issues, such as the environment, human rights, geopolitics, trade, poverty and economics. ...
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7. Green Living Center: You and Your Car
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Learning to meet our transportation needs while not excessively adding to air and water pollution takes a very big commitment from every family. ...
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8. M. ED. Program through Cambridge College
Surry, Maine, USA
 
The International Institute for Humane Education (IIHE) offers people world-wide the chance to earn a Master's Degree with a concentration in Humane Education through Cambridge ...
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9. Never Enough Anticonsumerism Campaign
Manchester, United Kingdom
 
A critical look at consumerism, poverty and the planet ...
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10. OEKOWEB: Die Plattform für Wirtschaft, Umwelt und Gesunde Zukunft
Vienna, Austria
 
The OEKOWEB, as Austria´s central environment-portal, offers access to more than 10,000 adresses concerning economy, environment ...
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11. Population Connection (formerly Zero Population Growth)
Washington, DC, USA
 
Population Connection (formerly ZPG) is a 35 year old national nonprofit organization working to slow population growth and achieve a sustainable balance between the Earth's ...
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12. Scientists Say Future Is In The Balance
 
In 1992, Sir Michael Atiyah, president of the Royal Society of London, and Dr. Frank Press, president of the U.S. National Academy of Sciences, issued ...
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13. The Two Faces of Leo
USA
 
Leonardo DiCaprio will host this year's Earth Day, but his past two film projects -- including the recent movie 'The Beach' -- have done more ...
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12 Over-consumption

 

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Energy consumption per capita per country

Energy consumption per capita per country

CO2 emission per capita per year per country

CO2 emission per capita per year per country

Over-consumption is a concept akin to overpopulation, referring to situations where per capita consumption is so high that even in spite of a moderate population density, sustainability is not achieved. For example, the People's Republic of China has an area comparable to that of the United States of America. China's population density is 4.7 times higher than that of the USA, but its per capita energy consumption is 9 times lower than that of the USA, so that in spite of its "overpopulation", China uses only half the amount of energy consumed by the USA.

Over-consumption is measurable. Two articles in Physics Today, July 2004, showed that the combination of over-consumption of energy and over-population may have serious consequences for the future of mankind if action is not taken in this generation. An excessive consumption of energy that is generated from the combustion of fossil fuels is the main cause of global warming, and other pollution.

Over-consumption creates an overclass who suffer from affluenza. This in turn leads to overpopulation, which is when a species exceeds its carrying capacity. Excessive unsustainable consumption leads to resource depletion and reduced ecological health.

The concept was coined to counter rhetorical use of overpopulation, simplistically referring to population density without taking into account per-capita consumption, by which developing nations are judged as consuming more than their economy can support. A key argument, often made by Green parties and the ecology movement, is that consumption per person, or ecological footprint, is lower in poor than in rich nations.

However, the Worldwatch Institute said the booming economies of China and India are planetary powers that are shaping the global biosphere. Its State of the World 2006 report said the two countries' high economic growth hid a reality of severe pollution.

The world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way, the report added. It said that if China and India were to consume as much resources per capita as Japan in 2030 together they would require a full planet Earth to meet their needs.[1]

[edit] See also

13  Consumption

 

Home > Library > Reference > Wikipedia

consumption (economics)
For other uses, see consumption

In economics, consumption refers to the final use of goods and services to provide utility.

Keynesian economics and aggregate consumption

In Keynesian economics aggregate consumption is total personal consumption expenditure, i.e., the purchase of currently produced goods and services out of income, out of savings (net worth), or from borrowed funds. It refers to that part of disposable income (income after taxes paid and payments received) that does not go to saving.

Discussions of human consumption of resources play an important role in both economics, environmentalism and geographical analysis.

In Keynesian economics, "consumption" is short-hand for personal consumption expenditure and is determined by the consumption function, especially by the marginal propensity to consume. It is part of aggregate demand or effective demand.

Consumption can also be defined as "the selection, adoption, use, disposal and recycling of goods and services", as opposed to their design, production and marketing.

History

John Maynard Keynes developed the idea of the consumption function, which sees a consumption as consisting of two main parts:

  1. Induced consumption refers to increases in consumer spending that occur as disposable income rises. Increases in consumption follow the famous marginal propensity to consume. An increase in disposable income leads to an increase in consumption, moving along the consumption function in a graph.
  2. Autonomous consumption refers to consumption spending done as part of long-term plans for the future (smoothing out income fluctuations, providing for retirement and other expected future events, etc.) and as a result of habits and contractual commitments. Changes in plans, expectations, habits, etc. leads to shifts of the consumption function in a graph.

Often, as in the permanent income hypothesis, the word "consumption" refers instead to the benefit received from consumer goods and services (as opposed to the amount spent on such products).

Studies

Studies of consumption investigate how and why society and individuals consume goods and services, and how this affects society and human relationships. Contemporary studies focus on meanings, role of consumption in identity making, and the 'consumer' society. Traditionally, consumption was seen as rather unimportant compared to production, and the political and economic issues surrounding it. With the development of a consumer society, increasing consumer power in the market place, the growth in marketing, advertising, sophisticated consumers, ethical consumption etc, it is recognised as central to modern life. Sociology of consumption has moved well beyond Veblen's early work on 'conspicuous' consumption. Current theories investigate the role of economic and cultural factors in constraining consumption, as development of an approach that sees consumers as 'victims' of producers and their social situation. A counter theory highlights the subversive aspects of consumption, with consumers buying and using goods, places etc in ways unintended by the producers. Examples include city squares turned to skateboard parks, and music sharing on the internet.

Studies of consumption come from a variety of backgrounds. Consumer studies attempt to help marketing. User research aims to improve product design. Feminist studies highlight the importance of women as consumers, and particularly the role of the domestic arena in consumption. Media studies try to understand the consumption of media products such as television and video games. Critical Theory is an important influence on contemporary studies, as consumption is central to contemporary culture.

Studying consumption can be done through traditional survey methods, or various ethnographic techniques. Consumption studies are difficult because they involve investigating everyday life situations, bringing research into the private domain, rather than formalised settings such as the workplace.

Bibliography

  • Pierre Bourdieu (1979) 'Distinction', Routledge
  • Daniel Miller (1998) 'A Theory of Shopping', Polity
  • Slater (1997) 'Consumer Culture and Modernity'
  • Friedman (1994) 'Consumption and Identity'
  • Mackay (1997) 'Consumption and Everyday Life'
  • Mary Douglas and B. Isherwood (1979) 'The World of Goods', Routledge

See also

14 Consumerism & Altruism

Many nations' material standard of living is now higher than ever. Production of material things has skyrocketed – but is still a way behind consumption, and further still behind demand. Does consumerism make people happier?

The citizens of the so-called 'developed nations' consume more products, live in bigger houses, use more consumer durables than those of the rest of the world. They have a higher material standard of living. However, social indicators such as family structure, suicide and crime levels tell a different story. Family breakdown, stress, loneliness and depression are much higher in the ‘developed’ countries. This is both a result of and a cause of increased economic activity, for many reasons. One of the main ones is that depressed people are encouraged to cheer themselves up by consuming.

In the past recreation was spent mainly in non-consumptive activities, such as appreciating nature or visiting friends, but this is harder in a deterioriating social and natural environment. Isolation is reinforced by industries that have sprung up to encourage indulgence in selfish consumption - whether of food, drugs, digital culture or other means of escapism. A paradox of our system of economics is that although this tendency is disasterous for the individuals concerned it is great for economic 'progress'.

In extreme cases such as suicide, such pathological consumption may harm rather help the economy. However, although such counterproductive consumption constitutes a downward spiral for the individuals involved, it represents a virtuous cycle for the economy, which benefits from increased levels of consumption and hence work from those concerned. Shopping is the USA’s most popular recreational activity.

Altruistic actions (almost by definition) boost well-being and happiness and so decrease depression and the associated habits of pathological consumption. Moreover, activity done out of love is often given away and so is part of the unseen economy, substituting for regular spending and reducing the size of the official economy.

Obesity is an obvious symptom of over-consumption. By 2000, two thirds of Americans were overweight1 - a proportion which is still rising. One can only speculate how this affects the self-esteem of those affected, in this world in which millions of people are literally starving. Overeating is widely known to be unhealthy, so one can see the obesity epidemic as evidence of how adept large organisations (i.e. companies) have become at manipulating individuals against their long term interests. Self-destructive overconsumption applies to many aspects of society, especially in 'developed' countries. In USA, most people devote hours every day consuming digital culture while families no longer spend time together in conversation2. Many countries are following this model, in spite of the unprecedented damage to family and community life3.
Organizations exploit the vulnerable by encouraging them to see themselves as consumers. This has lead to negative social cycles of selfish over-consumption, followed by depression and further stress. Adopting an attitude of altruism is a positive way to resist consumerism. Improving relationships with others helps people feel positive about themselves as people.

15  Effects of Over-Consumption and Increasing Populations

Author and Page information

Skip this section and go straight to the main content

  • by Anup Shah
  • This Page Last Updated Wednesday, September 26, 2001

The State of the World, 1999 Report from the Worldwatch Institute suggests that the global economy could be seriously affected by environmental problems, such as the lack of access to enough resources to meet growing population demands.

Environmental degradation can contribute to social and political instability, which can lead to security issues. This has not currently been addressed by the foreign policy of many nations.

(As a side note, it is interesting to note that there are books and insights popping up that predict future wars will be a new kind of war; resource wars. Yet, this is what it has typically been throughout history, but fortified with ideologies and religions. Ideologies and religions offer different ways to live, and hence different ways to use resources. See the trade and economics section for more on this aspect.)

As the effects of globalization are creating further disparities and inequalities, around the world we are seeing an increase in violence and human rights abuses as disputes about territories, food and water are spilling into wars and internal conflicts. People are fighting for basic needs.

The following are some of the areas of current and future tension. (Note how in the case of many of the regions mentioned below, wealthier nations have often been involved to extract and consume the resources leaving even less in the region for growing populations to contend with.)

  • the various conflicts in Africa. It is also feared that conflicts involving water will increase.
  • the Middle East where national interests in the vast oil fields have led to wars and influence from states like USA and UK.
  • the 1998 riots in Indonesia fueled by the current global financial crisis.
  • the Nile area, where Egypt rely on downstream water largely controlled by Ethiopia.
  • Iraq, Syria and Turkey where there is tension surrounding the water flow of the Euphrates and Tigris.
  • Israel and Jordan, where Israel cut water supplies to Jordan due to sever drought
  • Israel and Palestine also are fighting over water resources as well.
  • The Chiapas region in Mexico
  • Water scarcity in the Gaza region has contributed to the tensions in the Middle East.
  • Environmental scarcity and social tensions in Pakistan have led to a worsening situation.
  • Tensions in the Narmada region in India between indigenous people and the government.
  • Environmental scarcity in Rwanda contributed to the ethnic conflicts in 1994.
  • Degradation on the environment and an increase in population is fueling tension in South Africa.
  • In Equador, it is predicted that extreme violence is going to be seen at indigenous protests against giant oil corporations.

World Watch Institute also point out that water will once again be at the center of new conflicts. They point out that things like IMF and World Bank-backed privatization policies, flawed big damn projects etc have caused further tensions, protest and violence.

Many from those conflicts above, and other conflicts not listed, also see the underlying cause of overly corporate-led globalization as a root cause as well, as they and the foreign policies of the wealthier nations have allowed economic and resource-controlling policies to be instituted in their favor.

Also, while famine is often said to result from effects that are said to be caused by over-population, it is often overlooked on how the impact of politics and economics have a far more significant impact on famines than do "over" population and that those impacted would have a distinct class distinction.

"Modern famine responds far more to market forces than to absolute physical scarcities and rarely strikes the well-off. During the great Irish potato famine of 1846-57 which killed close to 1 million people, large landowners routinely exported food to Britain as poor peasants dropped all around them. ... Even in 'classic' twentieth-century Third World famines like that of Bengal in 1943 which killed several millions, wealthy tables remained laden. During the African famines of the 1980s one never heard of massive deaths among bureaucrats, businessmen and army officers ... In the North or the South today it would take a rare combination of circumstances - utterly failed harvests plus a shutdown of trade due to war or similar calamity - to reduce the rich to malnourishment, much less starvation."

-- Susan George, The Lugano Report, (Pluto Press, 1999), pp.105-106

It is often claimed that population increases lead to poverty and this is why the poor suffer, but as shown throughout this site, causes of poverty are not in population increases, but due to economic and geopolitical reasons.

For additional examples of how resource usage is so skewed and how this can lead to conflicts and wars see the consumption section on this web site.

16 Theory of Fraud and Over-Consumption in Experts Markets

Author info | Abstract | Publisher info | Download info | Related research | Statistics

Author Info

Ingela Alger ( ingela.alger@bc.edu) (Boston College)
Francois Salanie ( salanie@toulouse.inra.fr) (INRA-LEERNA, Toulouse)
Additional information is available for the following registered author(s):

Abstract

Consumers often have to rely on an expert's diagnosis to assess their needs. If the expert is also the seller of services, he may use his informational advantage to induce over-consumption. Empirical evidence suggests that over-consumption is a pervasive phenomenon in experts markets. We prove the existence of equilibrium over-consumption in an otherwise purely competitive model. This market failure results from the freedom of consumers to turn down an expert's recommendation: experts defraud consumers in order to keep them uninformed, as this deters them from seeking a better price elsewhere. Our model also yields predictions on the diagnosis price that are in line with stylized facts, and provides a theory for why risk-neutral consumers would demand extended warranties on durables.

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17 An Energy Summary of the United States of America

USA Flag USA Map
Overall Production and Consumption
Even though the United States is the world's leading energy producer by a wide margin, it is also the world's leading energy consumer by an even wider margin. The net result is that United States is the world's greatest net energy importer, presently consuming about 1.4 times as much energy as it produces, and is dependent on outside sources for crude oil and natural gas. The United States presently accounts for about 17% of the world's total annual energy production and about 23% of the world's total annual energy consumption. An historical summary of Total Primary Energy Production (TPEP) and Consumption (TPEC) for the United States is shown in Table 1.
Table 1: The United States' TPEP and TPEC, 1993-2003
(in Quads)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
TPEP 68.30 70.71 71.18 72.50 72.43 72.83 71.71 71.27 71.92 70.98 70.50
TPEC 87.62 89.28 91.24 94.26 94.77 95.19 96.84 98.96 96.51 98.10 98.84
note: 1 Quad = 1 quadrillion Btu
Source: DOE/EIA
Petroleum
The United States has proved oil reserves estimated (as of January 2005) at about 21-29 billion barrels. The total annual crude oil production of the United States ranks it third-greatest in the world (behind Saudi Arabia and Russia), accounting for about 8% of the world's annual crude oil production. Total U.S. consumption of petroleum is by far the world's greatest (accounting for about one-fourth of the world's annual total), which results in the United States being the world's greatest oil and oil products importer. Nearly 60% of total U.S. oil and oil products demand is now covered by imports, with about one-fifth of the imports originating from the Persian Gulf area. The greatest suppliers of oil and oil products to the United States are Canada, Saudi Arabia, Mexico, Venezuela, and Nigeria, in that order. Demand for crude oil in the United States has been slowly but steadily increasing; annual consumption is now about one-sixth greater than it was a decade previous. In contrast, domestic production of crude oil had been steadily dropping and is now at a 50-year low. Increased production is likely before the end of the decade, however, with more oil coming from deepwater areas of the Gulf of Mexico and new technology becoming available to increase production at mature oil fields. An historical summary of petroleum production and consumption in the United States is shown in Table 2.
Table 2: Petroleum Production and Consumption in the United States, 1993-2003
(in thousands of barrels per day)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Production (total)* 9,602 9,413 9,400 9,445 9,461 9,278 8,993 9,058 8,957 9,000 8,797
Production
(Crude Oil only)
6,847 6,662 6,560 6,465 6,452 6,252 5,881 5,822 5,801 5,746 5,681
Consumption 17,237 17,718 17,725 18,309 18,620 18,917 19,519 19,701 19,649 19,761 20,034
* includes crude oil, natural gas plant liquids, other liquids, and refinery processing gain
Source: DOE/EIA
Natural Gas
The United States has proved gas reserves estimated (as of January 2005) at about 192 trillion cubic feet (tcf), which represents about 3% of the current world total. The United States is currently the world's second-greatest producer of natural gas, after Russia, and accounts for about one-fifth of the world's annual natural gas production. It is also the world's greatest consumer of natural gas, accounting for nearly one-fourth of the world's total annual natural gas consumption. About one-fifth of all natural gas consumed is now imported, and more than 80% of U.S. natural gas imports are from the western provinces of Canada. Liquefied natural gas (LNG) is presently imported via terminals located along the Atlantic and Gulf of Mexico coast, and LNG imports are expected to greatly increase, to more than 6 tcf annually, by the year 2025. Demand for natural gas in the United States has been slowly increasing over the past decade and is now about 8% greater than it was a decade ago. More than one-third of the natural gas consumed in the United States is for industrial uses, with about another one-fourth used for power production and slightly more than one-fifth for residential use. An historical summary of natural gas production and consumption in the United States is shown in Table 3.
Table 3: Dry Natural Gas Production and Consumption in the United States, 1993-2003
(in tcf)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Production 18.10 18.82 18.60 18.85 18.90 19.02 18.83 19.18 19.62 18.93 19.04
Consumption 20.79 21.25 22.21 22.61 22.74 22.25 22.40 23.33 22.24 23.01 22.38
note: "dry" gas means gas with condensates removed
Source: DOE/EIA
Coal
The United States has recoverable coal reserves estimated (as of January 2005) at more than 270 billion short tons (or about 27% of the world total), which ranks it first in the world by far in that regard. The United States is the world's second-greatest coal producer and consumer (each behind China), and accounts for about one-fifth of both the world's total annual coal production and coal consumption. More than half of the coal now mined in the United States comes from surface mines in the western part of the country (primarily Wyoming and Montana), while the Appalachian region accounts for slightly more than one-third of U.S. coal, mainly from underground mines. More than 90% of all coal consumed in the United States is used for power generation, with industrial uses (including steelmaking) accounting for nearly all the remainder. The United States is also a coal exporter, but international sales of coal have declined over the past decade, partly due to increased competition from other coal-producing countries. Demand for coal in the United States has been steadily increasing over the past decade, with annual coal consumption about 15% greater than it was a decade earlier. An historical summary of coal production and consumption in the United States is shown in Table 4.
Table 4: Coal Production and Consumption in the United States, 1993-2003
(in millions of short tons)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Production
   Anthracite
   Bituminous
   Lignite
945
4
852
90
1,034
5
941
88
1,033
5
942
86
1,064
5
971
88
1,090
5
999
86
1,118
5
1,027
86
1,100
5
1,008
87
1,074
5
983
86
1,128
2
1,046
80
1,094
1
1,010
82
1,070
1
988
81
Consumption 944 951 962 1,006 1,030 1,037 1,039 1,084 1,060 1,066 1,094
note: components may not add to total due to rounding
Source: DOE/EIA
Electricity
The United States is both the world's greatest generator and consumer of electricity, accounting for about one-fourth of both the world's annual electricity generation and consumption. By far, the majority of electricity generation in the United States is from fossil fuels, with coal by itself accounting for more than half of all generation. Cross-border trade of electricity with both Canada and Mexico has been on the increase over the past decade. Much of the electricity consumed in the northeastern part of the United States is generated from hydroelectric sources in Canada's Québec and Ontario provinces, while the United States exports electricity to some Canadian markets. There is also electricity trade between the United States and Mexico, but inadequate cross-border power transmission infrastructure is currently a limiting factor. Demand for electricity in the United States has greatly increased, with electricity consumption now more than 20% higher than it was a decade ago. An historical summary of electricity generation and consumption in the United States is shown in Table 5.
Table 5: Electricity Generation and Consumption in the United States, 1993-2003
(in billions of kilowatt-hours)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Net Generation
   hydroelectric
   nuclear
   geo/solar/wind/biomass
   conventional thermal
3,201
280
610
80
2,231
3,251
260
640
80
2,270
3,356
311
673
78
2,294
3,447
347
675
79
2,346
3,496
356
629
81
2,430
3,625
323
674
81
2,547
3,701
320
728
83
2,570
3,808
276
754
86
2,692
3,745
217
769
83
2,677
3,867
264
780
93
2,730
3,892
276
764
94
2,759
Net Consumption 3,001 3,081 3,164 3,254 3,302 3,425 3,484 3,592 3,532 3,629 3,656
Imports 31 47 43 43 43 40 43 49 38 36 30
Exports 4 2 4 3 9 14 14 15 16 14 24
note: generation components may not add to total due to rounding
Source: DOE/EIA
The United States currently accounts for about one-fourth of the world's total installed electricity generating capacity, ranking first in the world by far in that regard. Installed electricity capacity in the United States has been steadily increasing over the past several decades, but most of the recent additions have been fossil-fueled. Natural gas, in particular, has been the favored fuel due to relatively low capital costs for power-generating facilities and lower environmental impact compared to use of coal. An historical summary of installed electricity-generating capacity in the United States is shown in Table 6.
Table 6: Installed Electricity Generation Capacity in the United States, 1993-2003
(in thousands of megawatts)
  1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Hydroelectric 77.4 78.0 78.6 76.4 79.4 79.2 79.4 79.4 79.5 79.4 79.4
Nuclear 99.0 99.1 99.5 100.8 99.7 97.1 97.4 97.9 98.2 98.7 98.8
Geothermal/Solar/
Wind/Biomass
15.2 15.6 15.9 15.9 16.1 16.3 17.0 16.1 16.6 17.4 17.9
Conventional Thermal 541.8 550.0 554.2 561.7 564.1 563.9 572.6 598.9 634.9 689.5 736.7
Total Capacity 733.4 742.8 748.1 754.8 759.3 756.3 766.4 792.2 829.2 884.9 932.8
note: components may not add to total due to rounding
Source: DOE/EIA
Carbon Emissions Information
The United States is the greatest carbon-emitting country in the world and currently is responsible for about 23% of the world's total fossil fuel-based carbon dioxide (CO2) emissions. At the 1997 Kyoto conference, the United States agreed to cut its greenhouse gas emissions to 7% below 1990 levels by the 2008-2012 time frame, but this has yet to be ratified by the U.S. Congress, and according to U.S. Department of Energy projections, this goal is most likely unachievable. However, there have been efficiency gains in generation and use of electricity over the past decade that have reduced the relative amount of greenhouse gas emissions in the United States on a per-dollar-of-GDP basis. Additionally, efforts are underway to develop a prototype power plant of the future ("FutureGen") that would have both high efficiency and zero emissions of CO2 and airborne pollutants. A network of public-private partnerships has also been established for determining the most suitable technologies, regulations and infrastructure needs for CO2 capture and storage in different areas of the United States. An historical summary of CO2 emissions from fossil fuel use in the United States is shown in Table 7.
Table 7: Fossil Fuel-related CO2 Emissions in the United States, 1993-2003
(in millions of metric tons of CO2)
Component 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
CO2 from coal 1,847 1,858 1,877 1,959 2,003 2,016 2,020 2,115 2,047 2,064 2,100
CO2 from natural gas 1,141 1,164 1,216 1,238 1,243 1,212 1,215 1,261 1,211 1,252 1,203
CO2 from petroleum 2,170 2,213 2,195 2,279 2,297 2,349 2,417 2,438 2,475 2,456 2,498
Total CO2 from
all fossil fuels
5,158 5,235 5,288 5,476 5,543 5,577 5,651 5,815 5,733 5,772 5,802
note: components may not add to total due to rounding
note: CO2 from natural gas includes contribution from flaring
Source: DOE/EIA
flag image courtesy of World Flag Database
last updated January 26, 2006
PUBLIC INTEREST in changing the tax system is growing much faster than understanding of the competing proposals. Democrats and Republicans, liberals and conservatives, all have come up with their favorite nominees for tax cuts--the poor, middle class, manufacturers, savers, investors, producers of luxury goods, etc.

It seems desirable, under these circumstances, to broaden the public debate to go beyond the present inconsistent array of specific proposals to modify slightly the income tax, which is the heart of the existing Federal revenue system. It is time to consider the most basic change in the government's income structure--abandoning the entire idea of taxing income and shifting to a consumption tax as the primary Federal revenue source.

Taxing consumption instead of income generates many consequences, most of them desirable. A constant theme among reformers is the need for increased incentive for saving, capital formation, and economic growth. This requires examining the pros and cons of consumptive taxation and analyzing the major alternative approaches to structuring a new tax of that type.

The governments of most industrialized nations, especially in the European Community, use consumption taxes far more than the U.S. does. While 18% of government revenue comes from taxes on consumption in the U.S., the comparable figures are 26% for Germany, 29% for France, and 31% for the United Kingdom.

19   Consumption

For our first examination of the statistics of peak oil, we look at consumption which is one of the least controversial aspects. But with demand rising around the world, it is by no means insubstantial.

The BP Energy Review unhelpfully gives the values in thousand barrels daily. Converting to gigabarrels per year, this chart shows the world’s consumption of oil from 1965 to 2005.

Consumption (World)

C1. Oil Consumption (World)**

It is immediately noticeable that consumption rose steadily apart from two ‘blips’, in 1974 and 1980. These ‘oil shocks’ were due to political effects rather than peak oil and have important effects in many areas. It is important to be aware of what happened then.

The 1970s Oil Shocks

Extract from World Book encyclopedia

OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. At that time, the petroleum industry in these countries was controlled by United States and European oil companies. These firms paid the host governments income taxes and royalties based on the posted price the companies charged for crude oil on the world market. In 1959 and 1960, oil production greatly exceeded world demand. The surplus that was thereby created prompted several of the major companies to cut the posted price and thus their payments to host governments. OPEC was founded in response to this price cut.
OPEC had little influence on oil prices during the 1960s, when production expanded to keep pace with demand. In the 1970s, however, world demand for oil began to outgrow what was available from non-OPEC sources. In 1973, OPEC stopped consulting with oil companies and decided to raise oil prices in keeping with the rate of inflation.
Armed conflict also contributed to rising oil prices. During the Arab-Israeli War of 1973, some Arab members of OPEC stopped or reduced oil exports to countries supporting Israel. As a result, oil prices in those countries, including the United States and other Western industrial nations, rose sharply. During the late 1970s, the Iranian revolution caused a shortage that helped OPEC increase oil prices again.
OPEC was less successful at achieving its goals in the 1980s, when the world oil supply again exceeded demand. In 1983, OPEC cut the price of its oil for the first time. During the middle and late 1980s, OPEC set production limits for its members several times. But many members ignored the limits, thereby holding prices down. Although brief price increases resulted from Iraq's invasion of Kuwait in 1990, oil prices remained stable in the early 1990s.

The results of the oil shocks was worldwide double-figure inflation and a stagnant economy.

The charts below show how the sudden increases in oil prices in the 70s and 80s were reflected by unemployment, inflation and growth in the UK.

Oil Prices

C2. Oil Prices

Unemployment

C3. Unemployment (UK)

   

Inflation

C4. Inflation (UK)

Growth

C5. Growth (UK)

The results of the oil rises to come will be worse since there will be no hope of the resumption of cheap oil.

Future Consumption

The problems of oil consumption in the future revolve around two factors: population and the increasing use from developing countries. A chart of the US Census Bureau’s world population shows that population is expected to increase steadily over the first half of the this century. (What it doesn’t show is any drop in population that might be caused by oil decline – from wars, recessions, famine, etc).

More people means more demands for fuel, energy, plastics and food – all highly dependent on oil. In the ten years from 2002 to 2012, the world population is expected to rise from 6.23 billion to 6.96 billion, an extra 12% to be fed, supplied and energised. Along with population, the other factor is the increasing use of oil in developing countries – countries which, up to now, had been contributing little to consumption. Compare these charts of oil consumption from selected countries and regions.

Consumption (USA/America)

C6. Consumption (USA and South/Central America) **

Consumption (Europe/UK)

C7. Consumption
(Europe/Eurasia and UK) **

The first two show the ‘developed’ countries/regions of USA, Europe, UK and South/Central America. Although the consumption is high (as far as the USA and Europe is concerned), the trend is either gentle or actually in reverse (note how the oil shocks of the 70s and 80s are reflected again). The percentage changes from 1965 to 2005 range from 20% for the UK, to 180% for South/Central America with Europe and USA sitting between (see Chart C10). This compares with overall world consumption which grew by 164%.

But when we look at the charts for Pacific Asia and China, we see a very different view. Chart C8 uses the same scale as Chart C6 and Chart C7, and you can see how the whole of Asia Pacific has already surpassed the levels of the USA and Europe and at a much steeper curve (a change since 1965 of 636%. China’s rise seems more gentle because of the scale: if you isolate China and bring the scale down to fit (Chart C9), the frightening rise in that country’s oil consumption is clear. The percentage change over the 40 years is a whopping 3118%.

Consumption (Asia/China)

C8. Consumption (Asia Pacific & China) **

Consumption (China)

C9. Consumption (China) **

 

Below (C10) is a chart of those percentage changes and it shows the dramatic difference between the developed and the developing world.

Consumption (Change)

C10. Consumption (Change since 1965) **

Population (China)

C11. Population (China)

The clear omen from this is that oil consumption in Asia is going to increase dramatically in the next few decades and this will outweigh any decrease from Europe and the US. The population of China, even with birth control measures, is still expected to rise. This is the trend. In reality, consumption will slow and decline as oil production decreases and recessions bite, but the exact figures for that are impossible to calculate. What is clear is that, if the world continues as it presently is doing, oil consumption will continue to rise.

20 Grandfather Economic Report series
Home & Contents | Summary | Feedback | What's New

Economic Energy Report's
USA section
- USA Energy: consumption, production, imports, reserves -
updated Mar. 2007
by Michael Hodges (USA) and Jean Laherrčre (France)
- a chapter of the Grandfather Economic Reports -

- First - - a repeat of the quick Start Summary Page, and then the Proof and Pictures -

ENERGY CHALLENGE, MORE THAN EVER - -

The world oil market daily produces and consumes 76 million barrels.

The United States, with 5% of the world's population, daily consumes 20.7 million barrels (869 million gallons) - - or 25% of world consumption. U.S. consumption is at a record high - -

while U.S. oil production is at a 50-year low and declining, covering just 25% of our consumption needs - - a 75% gap, and reserves are declining,

Causing rising imports from other nations - a record high - - while reserves of prime import sources decline. Additionally, U.S. natural gas reserves are falling and imports rising.

The U.S. is more vulnerable than ever before.
Not a nice bequest to our young generation.

- 7 color pictures tell the story, because a picture is worth a thousand words -

A THREAT

"Our society and civilization are built upon the availability of cheap oil for transportation, for food production, for warmth, for trade and commerce. Approaching must be one of the biggest events in history: the end of cheap, readily available oil. Yet, with the exception of a few responsible oil geologists and scientists, almost no one is talking about this impending catastrophe." Marner, 11/00 (link # 11 below)

U.S. Energy Secretary Spencer Abraham said, "The country is facing the most serious energy shortages since the 1970s. Without a solution the energy crisis will threaten prosperity and national security and change the way Americans live." 3/19/01 (link # 4 below)


This is the USA Page of the Energy Report Home Page - -
Quick Links internal to this USA page > > Summary USA - - Production Oil - - Production Natural Gas - - Reserves - - Production Model - Hubbert - - Production Projected via Discovery - - Imports Oil - - Inventory Oil - - Import Deficit all Goods - USA - - Energy Inefficiency - - electricity: coal vs. nuclear - - coal production - - Author Comment - the challenge

Page 2 - World page for trends of reserves, production; Page 3 for conclusions/actions, related articles; Table of Contents all sections this Energy Report, incl. link list, about authors; and Energy Report Home Page


Oil Consumption vs. production vs. importsLet's first repeat the USA summary chart - - then 7 pictures for the story

U.S. PETROLEUM OIL
CONSUMPTION - PRODUCTION - IMPORTS

CONSUMPTION - (upper black line) - - UP, UP AND AWAY - - to a record HIGH.

U.S. PRODUCTION - (red line) - DOWN, DOWN - - back to the level of a half-century ago (1950) when there were 144 million fewer people.

IMPORTS FROM ABROAD - (blue line) - UP, UP AND AWAY - - to a record high of 4.5 billion barrels (averaging 12.4 million barrels per day)

This chart shows U.S. oil consumption (black line) a new record of 7.6 billion barrels per annum (equivalent to an average of 21 million barrels per day).

This chart also shows production (red line) below 2 billion barrels per year, or about 5.2 million barrels per day - - lower than 50 years ago and 44% below 1971 - - covering only 25% of our consumption needs.

The difference between production and consumption is a 75% deficit gap of 5.7 billion barrels per year (15.5 million barrels per day) - - which must be provided by rising imports (blue line) and by drawing down crude oil inventory levels to record lows that trend down. The chart also shows in the past higher prices dramatically reduced consumption (and therefore cut imports), but higher prices did not raise internal production - - reasons covered later. (inventory trends, not shown on chart, covered later).

Look at the chart's black consumption line in the late 1970s and early 1980s. Note the consumption decline, which was caused by higher consumer prices resulting when OPEC significantly reduced production levels. This proves lower consumption, by consumer self-imposed conservation, ONLY results  from higher prices. But higher prices did NOT raise U.S. production, which is indicative of internal constraints such as inability to rapidly respond to overseas challenges, declining reserves and regulatory pressure.
It also indicates the influence power of OPEC looking forward may become significantly greater than in the past, as we will show later. But, we believe OPEC's Middle East nations should not be cast as 'villains' - - it's their oil and consumers must pay for their own insatiable and unsustainable appetites as discussed in comments below. Chart by M. Hodges, data by Jean Laherrčre and http://www.economagic.com/em-cgi/data.exe/doeme/ (also see the larger, more comprehensive chart by Jean, then click your back button.)


U.S. Oil Production TrendsANOTHER LOOK AT U.S. OIL PRODUCTION - -

As in the prior chart, the upper red line is U.S. oil production. While U.S. oil discovery peaked in the 1930s, the red line shows production peaked in 1971
and today's production is 44% lower - yet U.S. population increased 144 million.

This Oil Production red line is broken down in the chart into 2 components:
a. Production in the lower 48 states (blue line) - - trend down - - 53% less than 1971
b. Production in Alaska (pink line) - - trend down. - - 51% less since 1988

Total Oil Production is also broken down into 2 additional components:
1. On-shore Production (brown line) - - trend down - 51% below 1971
2. Off-shore Production (light green line) - - oscillating trend since 1971

Not shown on the chart are other data showing the declining trend in output per oil well (called oil well productivity) - - down 39% since early 1970s. (This is close to 10 barrels per day (b/d) which is in fact the upper limit of productivity of a stripper wells; it means the majority of US producing wells are stripper wells producing less than 10b/d/w). This could mean that most of the larger more productive wells in the past were pumped out first, leaving smaller, less productive wells to service future production needs.

Oil discovery peaked in the U.S. during the 1930's, and the chart's red line shows production peaked 40 years later in 1971.

As we will show in a later graphic, for the world as a whole discovery peaked in the 1960's while production peaked outside the Middle East in 1997. Middle East production is expected to peak by 2005 before production begins to decline.

Chart by M. Hodges, data provided by Jean Laherrčre


U.S. PRODUCTION - - Natural Gas - - Consumption vs. Production

Natural Gas Consumption-productionCONSUMPTION (upper black line) - - trend up - faster than PRODUCTION (red line).

Production is less than 35 years ago, and the trend has flattened despite a doubling of new gas wells in the 1990s (now falling in quantity).

The U.S. is fed more and more by increased imports (green line) - mostly from Canada, which is depleting its easy-to-produce sources. Therefore- - natural gas consumption is above production, causing more imports - - Just like oil!!! Chart by M. Hodges, data provided by Jean Laherrčre

Additionally, like oil, price has a dramatic impact on natural gas consumption - - more so than anything else - - as seen by the declining consumption and production curves on this chart from mid-1970s to mid-1980s.

"It is obvious that US and Canada's (Mexico being a gas importer) natural gas production will not be able to meet the forecasted demand for 2010.

  • "My belief is that the demand will be less than anticipated because of the increase in price, and the fact LNG can be brought easily as there is plenty gas in the rest of the world (in particular 100 Tcf in the NW shelf of Australia as my friend Dick Cooper from Perth wrote me a few days ago)." This quote (4/2/01) and the natural gas chart data provided by Jean Laherrčre. (Dr. Colin Campbell, who reviewed and praised this Energy Report, said, "I doubt if Canada is going to export gas when it needs it itself. This is likely to undermine NAFTA).
  • Dr. Colin Campbell said gas production is better described as a "plateau" followed by a "cliff" due to the high mobility and recovery of gas. Under declining pressure, oil declines slowly as it moves through the porespace of the rocks, but the decline of gas is a cliff -- not a slope. The gas market gives no warning of the cliff because it is no more expensive to produce the last cubic foot than the first. North American production is at or near (< 10 years) its "cliff" now: North American natural gas has no excess capacity. It disappeared several years ago. What we do have is extremely aggressive decline rates in almost every key production basin making it harder each season to keep current production flat.
  • "The gas market is regional not global like oil because of transport costs. 1) N. American market now heavily depleted, 2) Russia increasingly to supply Europe and Asia, but at geopolitical cost, 3) N. Africa/M. East/ Caspian when (if) new pipelines built.
  • Canada currently makes up about 13% of the USA gas supply. Canada is running out of gas too. The Alberta Energy and Utility Board (EUB), in its supply outlook for 2001 to 2010, 'predicted that conventional natural gas production in Alberta, Canada's key producer, would peak by 2003 at 5.3 tcf and therefore decline by 2% a year for the next five years' (link #29).
  • AND, Mexican gas production reached a plateau in 1998 and has had a downward slope ever since. Mexican exports to the U.S. plunged to near zero in 2000. Mexican domestic demand for gas no longer allows for exports.
  • Unlike oil, natural gas cannot easily be shipped by sea. It must be liquefied prior to shipment, and then shipped in specially designed refrigerated ships destined for specially equipped ports, and then re-gasified for distribution -- at an estimated 15 to 30 percent energy loss. Moreover, natural gas cannot be easily stored like oil or coal
  • It has been reported (J. Hanson link #22) it is not practical to make up the North American shortfall in gas by shipping it in from the Middle East (shortage of LNG facilities, tankers, and energy loss). However, the construction of a new gas line to Alaska and the Canadian arctic where there probably are large untapped deposits could temporarily mitigate the North American gas cliff.
  • With falling reserves most local actions are but temporary regarding the future.

BOTTOM LINE
From where does America get natural gas in the future?
Possible answer: first from the Arctic and then from the Middle East,
but lots of LNG facilities and tankers will be needed - - soon!
- - and, its price & security may not be cheap.
AND - - U.S. natural gas independence, longer term, is history !!


RESERVES in the U.S.A. - - Oil & Natural Gas

Reserves - - oil & natural gasOIL RESERVES - - DECLINING (green line) - down about 42% in 30 years to about 20 billion barrels, while the population increased 70 million.

NATURAL GAS RESERVES - - DECLINING (red line) - - down 36%. to about 30 x 6 = 180 trillion cubic feet. (note the red curve for natural gas is in Tcf divided by 6 so it would fit on the chart with oil.. Tcf = trillion cubic feet)

- A dismal picture looking forward.

  • Comparing Oil reserve remaining of about 20 billion barrels per this chart to the 2nd chart above showing Oil Production at 2 billion barrels per year - - indicates if it were economically and technically feasible for the US to pump every drop from every known U.S. oil location it would run out of domestic oil in about 10 years at current production and import rates. If the U.S. stopped imports and pumped every location all would be depleted in 4 years at today's consumption rate. (Canada's reserves would be depleted in 7 years at its production rate - - Mexico's a bit longer - - depending on how much Canada and Mexico export to fuel voracious U.S. import appetites).

Comparing Natural Gas reserves remaining of about (30 x 6 = 180 Tcf) shown on the chart with the chart above showing 20 Tcf production per year indicates that if one could get at every single cubic foot US natural gas reserves would be depleted in 9 years.

  • Regarding natural gas reserves - - a question - -
    Since history shows higher consumer prices are the No. 1 way to reduced energy consumption, which should slow down depletion of USA reserves as well as import-reliance, would not higher prices spur increased U.S. production resulting in even faster natural gas reserve depletion thereby further deepening future U.S. import dependence on others? A catch-22??
  • It is most vital that clean, technically-proven data be used by the U.S. in accessing reserves in the U.S. and elsewhere.
  • Regarding the reporting of reserves by any nation (such as Mexico and Venezuela), one must try hard to separate true facts from 'political data' (see link # 21).
  • Some have suggested that in the past data for some nations have been inflated for political reasons - - such as trying to justify IMF loans, special trade privileges, or other politically-oriented objectives.
  • Sticking to long-term data widely accepted by experts should reveal potential political adjustments if ,over a very short period, all of a sudden a huge jump is reported unsupported by provable new discovery.
  • For example, past jumps in reported Mexican and Venezuelan reserves now show said reserves (about 30 billion barrels each) are experiencing long-term declining trends, not increases, as less political data in used.
    Chart data provided by Jean Laherrčre. In the chart the term API = American Petroleum Institute, AGA = American Gas Association, and EIA = US Department of Energy/ Energy Information Administration

Production - Hubbert ModelOIL PRODUCTION MODELS - - USA - actual past production and projections

 

This chart shows the model by the most recognized expert (Dr. M. King Hubbert) regarding predicting oil discovery, depletion and production looking forward into the future.

This model shows Oil Production - - for the LOWER 48 STATES - - ACTUAL PAST HISTORY data (green squares), AND PROJECTED future data (green curve for Hubbert curve and dark green curve for the Gauss or " normal " curve), and for ALASKA (blue line).

Note declining production actual production for both lines up to the year 2000 - - and declining projections beyond.
And, note the original prediction of Dr. Hubbert for the lower 48 states, which is the black dotted line just under the green.

Also note actual data departs from the model when a drastic political or economical event occurs (depression, high oil price, etc.), but quickly data return towards the curve.

Although we are primarily interested in USA data, the chart also includes a red FSU line for the Former Soviet Union.

It's interesting to note the accuracy of Dr. Hubbert's modeling approach when applied also for the Soviet Union, since actual FSU production has and is following amazingly close to his model predictions (which are the underlying red X's).

Dr.Hubbert's prediction in 1956 that U.S. oil production would peak in about 1970 and decline thereafter was scoffed at then but his analysis has since proved to be remarkably accurate. Note: The late Dr. Hubbert, American geophysicist working at the Shell Oil research laboratory in Houston, developed sophisticated models regarding world oil discovery, depletion and production - - this analyses is an amazing technical achievement.

His well-renown models, which were originally developed for U.S. and World oil as a single cycle, are widely accepted by nearly all serious technical experts in the world - - and can be applied with several cycles to all regions which are producing at full capacity. Countries of the Persian Gulf not producing to full capacity (swing producers) cannot be modeled with such a curve since actual production is not led by geology and physics, but by politics. Above Chart provided by Jean Laherrčre

ONE MORE MODEL TO FURTHER CONVINCE YOU OF CONTINUED U.S. OIL PRODUCTION DECLINE

The following graphic is most important.

The black (up and down) lines are data of actual oil discovery, with 30-year forward shift (discussed below) - - using all currently known discovery data.The key curve here is the trend line of that data, which represents projected production each year (green trend curve)
calculated by past discovery data

model - discovery shift predicts future U.S. oil productionNote that the bell-shape of the curve predicting oil production is most similar to the above Hubbert curve - - with its production peak in 1970 - - and declining thereafter.

This confirms the thrust of the Hubbert model above, while using the latest available information for actual discovery and actual production.

Also shown on the graphic is a data curve for actual oil production (red curve), which you will note has closely followed the green prediction curve - -and data for the portion of actual crude oil only (blue line).

Note regarding this chart: Dr. King Hubbert rightly said that before producing oil you must find (discover) it and the production pattern follows the discovery pattern. Instead of using mathematical modeling (such as starting with a bell-shaped curve) it is better to use the shift between the discovery curve and the production curve. All that is necessary is to have a real discovery curve (from proved + probable data values at the time of discovery or at start of production) and to fit discovery data plots to the production data plots by moving along the time scale up to the best fit. In the case of the lower 48 states the best fit is about 30 years, and the result is the above chart.
Chart data submitted by Jean Laherrčre, graphic by Michael Hodges.

THE EVIDENCE FOR CONTINUED DECLINE IN U.S. OIL PRODUCTION IS CONVINCING

- - DANGEROUSLY leading to increasing dependence on imports from other nations

IMPORTS - OIL - - into USA

U.S. OIL IMPORT PERCENTAGE TREND - up, up and away.


import projections by source
Each day the world oil market consumes 76 million barrels. The United States consumes 20 million barrels per day" (Link # 7) -

- yet U.S. production and reserves are declining, as consumption climbs, as seen above. Huge, rising import ratios make up the difference.

The left chart (DOE 1998 report) shows the rising import ratio - - with a projection forward that understates actual fact as known today.

The first chart on this page shows the U.S. now has a consumption vs. production gap of 74% (in 2004)- - the highest ever - - and well above DOE's 1998 projection here.

In 2005 the U.S. imported approximately 4.5 billion barrels (averaging 12.3 million barrels per day). Considering all forms of oil, in 2005 the U.S. imported more oil than the next 4 nations combined (Japan, China, Germany, S. Korea). Note also the U.S. imported 52% more oil than all Saudi Arabia exports. (data graphic)

The top six sources of U.S. oil imports, Canada, Mexico, Saudi Arabia, Venezuela, Nigeria and Iraq account for 65.1 percent of all foreign crude reaching our shores and 38.9 percent of total domestic consumption. Of these, four, Saudi Arabia, Venezuela, Nigeria and Iraq provide 38.2 percent of oil imports and 22.6 percent of total consumption. For a variety of reasons, none of the four can be considered a reliable source of supply.

As US oil production declined, America has been depending more on Canada (18% of US imports) and Mexico (14% of imports)  - - which, on the surface, might appear encouraging from a national security standpoint.

Canada #1 supplier > Canada's oil exports to the U.S. averaged 2.12 million barrels a day in 2004, or 10.3 percent of daily U.S. consumption, compared with 1.64 million barrels from Mexico and 1.56 million barrels from Saudi Arabia, according to the U.S. Energy Information Administration. http://www.bloomberg.com/apps/news?pid=10000082&sid=asxAzV.tqzR0&refer=canada

But, technical data (as separate from political data) shows reserves for Canada and Mexico are declining - - with Canada's reported reserves (now about 5 billion barrels) down 40% since mid-1970s - - and this data according to Jean Laherrčre, "For me, American reports on Canada (as for the rest of the world) are political (or rather for Canada financial to follow the SEC rules) proved data quite different from technical " mean " (proven plus probable) data."

And Mexico's corrected reserves (now about 28 billion barrels) are down 26% since 1980. (for natural gas, as reported above, their gas exports to the U.S. in 2000 dropped near zero).  However, as the graphic shows, excluding Canada and Mexico the U.S. is experiencing a growing import-dependence outside North America.

This graphic is from the Dept. of Energy. And the chart appears to show less reliance on the Persian Gulf than is really the case, as covered below.

Whereas the US imports over half of its needed oil, industrialized countries such as Japan and Germany have import dependency levels of 90-100 percent.'(DOE basics - Link #16).

Therefore, they represent major competitors to US imports - - and the squeeze is on.

INVENTORY - OIL       U.S. Crude Oil Inventories -

- - at record low and trending down - - a sign of vulnerability

Trend U.S. Crude Oil InventoriesThe following chart shows crude oil inventory levels 1982 to 2004 (excluding stocks in the strategic petroleum reserve) - plunging to record low levels - - during a period when the U.S. population increased by 60 million and SUVs became popular as U.S. oil production fell.

Oil inventories are like a family's savings account - - when you consume it you have less buffer to meet the future. That's what is happening with oil. Declining oil inventories are a sign of weakness especially when you depend on imports This leads to more potential price and supply volatility in the market, and more vulnerability-dependence to foreign suppliers of imports.

Political dangers > We recall Winter 2000, during the peak of a presidential election, the federal government dipped into its minuscule strategic oil inventory reserves SPR) for consumer heating oil - - a desperate and dangerous act undertaken for obvious political purposes - - sending false signals to consumers that government has the capacity to 'bail them out' - and a dangerous false signal implying the SPR contains enough oil to solve all US oil shortages and price increases  Such also is a national security threat. (chart link #26). Thankfully, this 'dangerous game' was not played again in the 2004 election season.

Considering U.S. declining production of oil due to depletion of reserves, and increased reliance on foreign imports, it is clear the U.S. private sector needs to carry higher (not lower) crude inventories - - and consumer prices should reflect that need. (local utility regulators may not be doing the real job they need to do, which is to help assure supply-demand balances). Over-zealously hampering free market capacity to react threatens all). Its one thing to consider a national energy policy regarding crude oil sources but one thing can be done for sure - - have a national oil inventory policy, in addition to the strategic reserve which should be held for national security needs.

Risk and cost transfer to government > It appears in more recent years the private energy (oil) sector has been fostering off more and more of its own prior inventory responsibility and cost to the federal government and individual tax payers, thereby creating soaring, record private sector oil firm profits as the government books record deficits. Just another example of corporations more and more transferring their costs/risks to government, such as banks transfering nearly all mortgage risks to government sponsored enterprises (Fannie Mae) and insurance companies transfering their costs of coastal flooding and wind storms to federal (FEMA) and state governments.

exploding U.S. trade deficit - - all goods

NOW TO A BIG PICTURE - -
AMERICA CANNOT AFFORD SOARING OIL IMPORTS - - AT LEAST NOT FOR LONG.

Let's pause a moment - - and place the U.S. import challenge in a higher level perspective, than oil alone.

The next two graphics are from the Grandfather International Trade Report.

Like many scary trend pictures in that report, this one shows exploding trade deficits of ALL goods - -
to another all-time record.

That trade report graphically proves that the sum of all merchandise imports plus all exports now represents approximately 23% of the entire nation's economy, as measured by national income - -

- - where U.S. imports represent 15% of the economy and are soaring - - while exports, at less than 8% of the economy, stagnated in the past 20+ years.

America, already the world's largest international debtor, explodes trade deficits to a new record of $836 billion in 2006.

America's cumulative current account deficits

This chart shows the exploding $6.1 trillion cumulative deficit in America's 'Current Account' with the rest of the world, representing the net of trade in goods and services, as well as investment flows. This chart captures it all.

A very, very scary picture - - the size and the trend.

This imbalance has been driven by record-high ratios of domestic debt creation by the household, business and financial sectors - - and a shrinking manufacturing base (including declining oil production). America's economy is more debt-dependent than ever before. Let's also recognize that services and technology sectors need more, not less energy - - and data shows their demand for energy exceeds that released by declining manufacturing. Shopping malls, healthcare, airlines, SUV vans, computers and the internet do not run on air - - and America's population is growing..

Most astute economists and the new National Trade Deficit Commission confirm this trade imbalance is dangerous and cannot be sustained. It must be firmly stated that the USA's massive record trade deficits for all goods must be brought into balance - - or this may threaten the international buying power of the U.S. dollar to pay for its accelerating need for foreign energy imports.

With that bigger picture in mind, let's now get back to our subject - - ENERGY

America has become less energy efficient -

According to the May 2001 Bush energy council report - - between 1991-2000 America consumed 17% more energy (sum all types) yet domestic production increased only 2.3% - - mostly due to rising coal and nuclear production partly offsetting declining oil production - - and in the next 20 years consumption is expected to increase another 32%. Let's look at recent energy consumption efficiency: Here's some population data: In the 1980s population increased 9.8 %, or 22.4 million (a 10-year increase from 227,726,000 in 1980 to 250,132,000 in 1990). In the 1990s population increased a faster 12.9%, or 32.3 million (a 10-year increase to 282,434,000).

Taken together, these statistics show in the 1990s America consumed more energy per capita than before > 12.9% faster population growth consumed 17% faster energy growth - -

- - This means the nation was less energy efficient during the last 10 years than the prior decade - - despite so-called greater auto fuel efficiency, a declining manufacturing base and importing more goods than ever before which were produced by energy in other nations - - also bringing into question America's exploding illegal immigrant situation.

One could make the argument that as the US becomes more and more a service (non-manufacturing) economy, and imports more and more consumer and other goods, it is becoming less energy efficient, instead of more efficient - - indicating expanding inefficiency.


USA electricity generated - by sourceELECTRICITY GENERATION
Coal and nuclear provide USA electric self-sufficiency

Although graphics above show America has lost its independence regarding oil (transportation-related and food production uses) and natural gas, this chart shows America is 76% self-sufficient regarding electricity generation from coal, nuclear and hydra power fuels produced on its own lands.

Coal (black line) is the prime generator of electricity covering 50% of total electricity needs (up from a 44% share in 1975) - and nuclear (red line) is No. 2, at 19% (up from 9% share in 1975)  - - together generating 69% of America's electricity (compared to 53% in 1975). Both have increased their share as the chart shows.

Natural gas (light blue line) slightly increased its share to 19% of total generation from 16%. Hydro power generates 11% less than 30 years ago, with its share down to 7% from 16% in 1975.  Petroleoum generated 61% less electicity than 30 years ago, bringing its share (blue) to 3% from 16%. (not shown are negligible contributions from wind, solar and photo-voltaic).

Nuclear has been out of 'popular favor' since the Three Mile Island accident in 1979, although lucky for America that this chart shows its increase from 9% of electricity generation 30 years ago to a 19% electricity share today. Perhaps this 'shackle of the past' should be taken off, due to nuclear production and safety records in recent years and since it represents domestic-based production for electricity free of foreign dependence.

Despite no new nuclear plants built in the United States in the last two decades with none on the drawing board (due to anti-nuclear protest and waste disposal pressures), nuclear generated electric power production has increased steadily 1973 to the 1990s due to increased efficiencies, but its growth rate is slowing without new facility additions. Today there are about 103 operating nuclear power plants in America.

Considering the huge energy supply challenge facing America for oil and natural gas, nuclear should be reconsidered for prioritized expanded service for electricity generation, cooking, hot water and heating - - to reduce pressure on declining and threatened oil and natural gas reserves (which depend more and more on foreign supply) - - using a hard-nosed, non-political approach only based on hard technical and national security data. De-regulating ALL consumer prices for declining reserve and import-dependent oil and natural gas should make new home-produced nuclear and clean coal facilities more interesting to private investors.

Other nations: It is reported France produces 80% of its electricity from nuclear power (it has nil coal) and is an exporter of electricity, while Germany generates 33% of its electricity from nuclear (although Germany is under activist environmentalist-political pressure to shut all down). Switzerland's nuclear power plants produce 38% of national electricity generation in 2006.

Therefore, the US nuclear/electricity ratio of just 19% nuclear is low in comparison to others, and maybe should take on more of today's 19% natural gas share of electricity generation - - especially imported gas.

(Uranium reserves: Canada has the largest reserves and is the major world producer; 38 percent of the world's accessible uranium reserves are in Australia; Russia at 15%).

This leads us to look at coal production in the next chart, and coal reserves - - a very important fuel.

COAL - - USA's prime generator of electricity
upward production and hundreds of years of reserves for self-sufficiency.

USA coal productionCoal, it is said, is less energy-efficient than oil & natural gas, but the USA has plenty of coal.
Coal supplies 50% of electricity generated as shown in the chart above - up from 44% share in 1975.

Whereas Saudi Arabia has more than 20 percent of the world's oil reserves, the United States has more than 25 percent of the world's recoverable coal reserves - approximately 270 billion tons. Russia comes in a distant second with 176 billion tons; China has 126 billion tons, and Europe has a paltry 36 billion tons.

The Coal chart at left shows - Production trend is up for all uses of coal - - 2005 was 71% over 1975 (compared to 37% population increase)..
USA produces 28% of world coal production and consumes 26% of world consumption
USA has 25% of world's coal reserves, equal to 249 years (BP data) at current production rates (double the reserves of Europe which has declining production, and about same reserve size as former soviet union) (data source: http://www.bp.com/centres/energy/world_stat_rev).