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- Not long ago, a group of 12 top airline CEOs wrote an open letter to the American public saying that energy speculation needs to be curbed because it is distorting energy prices and will, eventually, destroy the airline business.

- Now, I read that  the U.S. Senate proposal to curb speculation and increase transparency in energy markets has been blocked by Republican legislators.

- And then I saw a chart in USA Today showing the U.S. deficit or surplus since 1981 and which presidents and parties they occurred under.

- And finally I reflect on the Republican’s oft repeated mantra that the Democrats will ruin the country’s economy with their “Tax and Spend” habits and that they, the Republicans, are the ones who best husband the country’s wealth.

- Need I connect the dots for you, dear reader?

HOUSTON — Exxon Mobil, the world’s largest publicly traded oil company, reported on Thursday its best quarterly profit in history, but investors sold off shares in morning trading after expecting even higher earnings because of soaring oil and natural gas prices.

Record earnings for the world’s largest publicly traded oil company have become almost as predictable as the surge of gasoline prices at the pump in recent years, and for the second quarter income rose 14 percent, to $11.68 billion.

It was the highest quarterly profit ever for any American company, as Exxon made nearly $90,000 a minute.

Such profits have made Exxon Mobil a target of politicians in recent years, propelling calls for windfall profits taxes to finance research and development for renewable fuels to replace oil.

The principal reason for the company’s banquet of riches is rising fuel prices. Crude oil prices in the second quarter averaged more than $124 a barrel, 91 percent higher than the same quarter in 2007, according to Oppenheimer & Company. Natural gas prices averaged $10.80 per thousand cubic feet, up 43 percent from the quarter a year ago.

But while high energy prices brought Exxon $10 billion in earnings from selling oil in the quarter, up about $4.1 billion or nearly 70 percent, not everything in its earnings report heartened investors. The company reported that its oil production decreased 8 percent from the second quarter of 2007, largely because of an expropriation of Exxon assets by the Venezuelan government and labor strife in Nigeria.

The company spent $7 billion, or nearly 40 percent more than the same quarter last year, to find and produce oil from new fields.

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- This article is from the NY Times and they insist that folks have an ID and a PW in order to read their stuff. You can get these for free just by signing up. However, a friend of mine suggests the website bugmenot.com as an alternative to having to do these annoying sign ups. Check it out. Thx Bruce S. for the tip.

- So today I’m reading a story about a finance company in New Zealand, Hanover Finance, that has suspended repayments on principle and interest to 16,500 investors owed $554 million. The story is here:

- As to why they’ve done this, they explain:

“It’s a combination of the collapse of the financial markets and the whole system - the collapse of other substantial finance companies - which has affected our reinvestment rates pretty dramatically. And the inability of people with even good projects to refinance or sell to be able to repay us in a timely fashion.”

- Now, as to what going to happen, they say this:

The suspension of capital and interest repayments effective yesterday, along with a freeze on new investments, would enable the business to be “managed in a measured way as it works through a restructure plan to allow investors to be repaid over an agreed time period“.

- Mmmm. They cannot pay their bills because they haven’t been sufficiently dilligent at predicting and ameliorating their risks and now they cannot make their payments. And now that they’ve put their foot in it, they get to ‘tell‘ their creditors how it’s going to be. I.e., ‘We’ll suspend our payments to you and we’ll sort out which of you we can pay back and when.’

- I’ve read a number of stories like this with much the same text but I never connected the dots until today.

- If we, the small people, don’t judge our risks correctly and get over extended (like in a sub-prime mortgage crises), we don’t get to tell anyone how it’s going to be. Nope, we get told.

“Pay up or we’ll foreclose you and take away the collateral we forced you to put up.“

- Collateral? Mmmm, let me think about that. The ‘big’ guys loan us money in the hope of getting a good return on their investment in the form of the interest they’ll make. But, as a backup, they impose liens on our property so if we cannot pay, they can take away something of equal or greater value (typically) to what we owe them. That makes it pretty hard for them to lose on the deal because they either get their money back plus good interest or they get the property.

- Now, when one of us ’small’ people invests in one of their financial firms like Hanover Finance, we’re doing it for the gains we hope to make. Essentially, we’re loaning them our money for their use and they hope, through wise investments, to grow the money sufficiently to be able to both pay us back with a profit to us and to make a profit themselves. It’s important to note here that they plan to accomplish all of this using our money to do it.

- But the finance company doesn’t have to put up any collateral to us to protect the money we loan them against any stupid decisions they might make. Nope, they just take our money, invest it, and hopefully make a profit. That’s how it’s suppose to work, anyway.

- However, if they invest our money badly, do we have any recourse? Not much. They’ll let you know, at their leisure, if they can pay you anything at all back at all on your investment which went bad under their control.

- Yeah. All of this serves well to remind us who are the ‘little‘ people and who are the ‘big‘ ones in the world of finance. And we just take all this for granted.

An internal report put together by the World Bank and leaked to the Guardian claims that biofuels may be responsible for up to 75 percent of recent rises in food prices. Even environmental groups haven’t gone that far in their estimates.

With soaring food prices high on the agenda for next week’s G-8 Summit in Japan, World Bank President Robert Zoellick has been clear that action needs to be taken. “What we are witnessing is not a natural disaster — a silent tsunami or a perfect storm,” he wrote in a Tuesday letter to major Western leaders. “It is a man-made catastrophe, and as such must be fixed by people.”

According to a confidential World Bank report leaked to the Guardian on Thursday, Zoellick’s organization may have a pretty good idea what that fix might look like: stop producing biofuels.

The report claims that biofuels have driven up global food prices by 75 percent, according to the Guardian report, accounting for more than half of the 140 percent jump in price since 2002 of the food examined by the study. The paper claims that the report, completed in April, was not made public in order to avoid embarrassing US President George W. Bush.

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It’s no secret that Big Pharma has been providing doctors with special perks in return for prescribing their products. This has been going on for ages. But to get a better grip on why the costs of healthcare have been increasing dramatically we need to understand about the massive networks that Big Pharma is involved in. Believe it or not, Big Pharma is connected to everything. The AMA, the FDA, the financial markets/big business, the insurance industry, law and politics; these are all affected by Big Pharma.

Recently it was reported that there are more Americans addicted to prescription drugs than illegal drugs. An article in The New York Times stated that “An analysis of autopsies in 2007 released this week by the Florida Medical Examiners Commission found that the rate of deaths caused by prescription drugs was three times the rate of deaths caused by all illicit drugs combined.” That’s a pretty hefty number. I know quite a few people who became addicted to prescription drugs. Some said tranquilizers and painkillers were harder to quit than illegal drugs. Prescription pain killers have become the “new heroin”, and are increasingly becoming a major problem in the school system.

Not only are the doctors getting “perks” from the drug companies, but the professors and the research facilities of major universities have been the recipient of “special benefits” as well. Recently “three influential psychiatrists from Harvard Medical School seem to have been caught with their hands in the drug-laced cookie jar, and now they’re in big trouble. Two days after it was alleged that the three doctors failed to report a collective $4.2 million in payments from pharmaceutical companies, Harvard and the affiliated Massachusetts General Hospital have launched an investigation into the doctors’ behavior.” Big Pharma = Big Money.

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- research thanks to: Bruce S.

- I have mixed feelings about some of this. I know that people of great sincerity hold beliefs on all sides of these questions. It is easy, when you are strongly on one side, to demonize folks on the other side as being intentionally evil - but, in many cases, it simply isn’t true.

- I’ll qualify this in two ways, however. First, this argument doesn’t let off the folks who run the big Oil and Coal companies that intentionally spread disinformation to confuse the public about global climate change. Once folks have reached that level of power, there is no excuse for misusing their power. With power goes responsibility.

- My other qualification is that while I agree that many good hearted and sincere folks disbelieve in global climate change, this does not give them a free ticket for the rest of their lives. All of us in democratic societies have an obligation to maintain an open mind and to challenge our own belief systems by taking a good look at what the other side is saying periodically and seriously considering it.

- If folks do not open themselves up intentionally to absorb and assimilate new information periodically, then they are badly misusing their democratic rights by accepting all the benefits of democracy and shunning the work of being an informed and thoughtful citizen.

- We have the right to our opinions, but we pull the system down if we do not work to make sure that our opinions are informed and fair opinions.

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Independence Day may be the best day to ask ourselves — what is the greatest, preventable threat to Americans’ life, liberty, and pursuit of happiness (LLPH). The answer is simple — human-caused global warming. Certainly there are other major threats to LLPH, the gravest of which is probably terrorists using weapons of mass destruction, particularly nuclear weapon, in this country.

Between Homeland Security and the Pentagon, we spend billions of dollars every month to try to prevent terrorism. Indeed, President Bush and John McCain say Iraq is the central front in the war on terror. If so, the government spends more than $20 billion a month just to fight terrorism — of which more than half is new money we were’nt spending before 9/11 (and we spend more than $50 billion a month total on military and homeland security). And those who oppose such spending are routinely labeled unpatriotic or even appeasers.

But unrestricted greenhouse gas emissions are by far the greatest preventable threat to Americans’ LLPH (see “Is 450 ppm politically possible? Part 0: The alternative is humanity’s self-destruction and Part 2: The Solution“). Yet the government spends virtually nothing to fight global warming — certainly no significant amount of new money has been allocated for this major threat (the Clinton Administration tried, but the Gingrich Congress reversed that effort, reducing or zeroing out every program aimed at climate mitigation or even adaptation).

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- I’ve been murmuring for sometime now that the folks who have organized and sponsored these climate disinformation campaigns may well be held responsible for crimes against humanity in the future once folks see the full consequences of their malfeasance. And I am glad to see that someone like James Hansen with some serious credibility has put the idea out there publicly.

- Some will say that those who run these big corporations are just doing their jobs; just following orders; just doing what they have to do so they can hang onto their jobs. And the corporate folks themselves will say that if they didn’t do it, someone else would.

- Well, they’ll say all that, but it doesn’t cut any slack with me.

- When WWII ended, we had the Nuremberg Trials and the issue of whether or not soldiers could plead that they were ‘just following orders from their superiors’ was looked at as a possible defense. But the answer from the judges was ‘No’.

“The fact that a person acted pursuant to order of his Government or of a superior does not relieve him from responsibility under international law, provided a moral choice was in fact possible to him.”

- They said that even each lowly soldier had the responsibility to make a judgment whether or not what he or she was doing was immoral or not.

- So, the corporate CEOs who’ve put the might of their business’ money behind climate disinformation campaigns; whose orders were they following? And the answer is, they were following the aggregate will of the many shareholders they work for. And the will of those many shareholders, above all else, was and is to maximize the company’s profits - to increase their own.

- When you look at the causal connections, it’s hard to know where to hang the blame but, the fact is, the buck has to stop somewhere. These corporate entities, and those who run them, cannot be allowed to conduct disinformation campaigns designed to protect their profits at the cost dissuading humanity from reacting appropriately to an impending global disaster.

- At the deepest level, I think responsibility lies with those who, through their shortsightedness, allowed corporations to become equal to sovereign citizens and to develop levels of power equal or exceeding that of many nation states. I’ve talked about this before here.

- But, in the shorter term, those who sat in the board rooms and made cold-blooded decisions in favor of protecting their corporation’s profits (and their own jobs) and ignored the likely consequences to humanity’s future (and, indeed, the biosphere’s future) - these folks need to be held accountable. They’ve traded all of our future’s and our children’s futures away for some transient baubles.

- So, I agree strongly with Hansen on this issue; these folks need to be put on trial for high crimes against humanity and nature, foractively spreading doubt about global warming in the same way that tobacco companies blurred the links between smoking and cancer.

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· Testimony to US Congress will also criticize lobbyists
· ‘Revolutionary’ policies needed to tackle crisis

James Hansen, one of the world’s leading climate scientists, will today call for the chief executives of large fossil fuel companies to be put on trial for high crimes against humanity and nature, accusing them of actively spreading doubt about global warming in the same way that tobacco companies blurred the links between smoking and cancer.

Hansen will use the symbolically charged 20th anniversary of his groundbreaking speech (pdf) to the US Congress - in which he was among the first to sound the alarm over the reality of global warming - to argue that radical steps need to be taken immediately if the “perfect storm” of irreversible climate change is not to become inevitable.

Speaking before Congress again, he will accuse the chief executive officers of companies such as ExxonMobil and Peabody Energy of being fully aware of the disinformation about climate change they are spreading.

In an interview with the Guardian he said: “When you are in that kind of position, as the CEO of one the primary players who have been putting out misinformation even via organisations that affect what gets into school textbooks, then I think that’s a crime.”

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The big push from the hard right is that the solution to our gasoline problem is unlimited drilling in the United States. This is roughly like saying the solution to losing your 100,000 dollar a year job is to fish harder for coins under your couch.

The global consumption of oil is roughly 86.8 million barrels per day. The meme the right is pushing, as always, is ANWR and unrestricted coastal drilling. The best estimates of unrestricted drilling in the US put about 25 billion barrels of oil, which sounds like a great deal, until you realize that this is less than a year of global oil demand. The reality is that the United States is the most drilled in area of the world, having had the petroleum economy more, longer, and harder, than any other place in the world. If there were easy oil to be had, we would have it.

The cost of that effort is not making things that we can sell for oil that is much easier to get at. The cry of ANWR for ever is the Republican Party telling everyone that they have no faith in the American worker, the American entrepreneur, or the free market system. It is them telling everyone that Americans cannot make things the rest of the world wants to buy. Import substitution does not in general work, because it is almost always more expensive than trading, and focusing on what can be done better inside the national unit, rather than trying to do less worse at what it does worst.

Let me repeat that. ANWR forever is a giant middle finger at everyone who works in America at any job that exports.

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This worrisome research article has appeared in a peer reviewed journal. It’s not telling us anything that we didn’t already know, but it does catalogue the situation and help us steer clear of the hyperbole.

Environmental scepticism denies the seriousness of environmental problems, and self-professed ’sceptics’ claim to be unbiased analysts combating ‘junk science’. This study quantitatively analyses 141 English-language environmentally sceptical books published between 1972 and 2005. We find that over 92 per cent of these books, most published in the US since 1992, are linked to conservative think tanks (CTTs). Further, we analyse CTTs involved with environmental issues and find that 90 per cent of them espouse environmental scepticism. We conclude that scepticism is a tactic of an elite-driven counter-movement designed to combat environmentalism, and that the successful use of this tactic has contributed to the weakening of US commitment to environmental protection.

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- One of the news sources I read daily is the Daily Brief from the Council on Foreign Relations. They put together an excellent summary of the significant foreign events of the day and, for the most part, I recommend them.

- However, today, the Daily Brief had a collection of stories about Iraq and Oil that I found to be a bit surreal. Most of us who understand the implications of Peak Oil, understand that one of the major reasons why the U.S. is in Iraq is to secure oil for its future. Modern industrialized nations absolutely depend on adequate supplies of oil - if they want to continue to be modern industrialized nations.

- There were several things that struck me as disingenuous. One was the following statement about the decision making of the Iraqi government as it considers letting foreign oil companies into the country again:

“Offers by the Western companies-Exxon Mobil, Shell, Total, BP, Chevron, and a handful of smaller firms-reportedly prevailed over bids from companies in Russia, China, and India, and a new deal is expected to be announced on June 30.”

- Did anyone seriously expect that the U.S. would allow Russia, China or India to gain effective control over the vast supplies of Iraqi oil in today’s world? Does anyone really imagine that the U.S. is really leaving such decisions to the current Iraqi government?

- As a further irony, here in the U.S., the Bush administration and McCain are both flooding the media with calls to resume oil exploration/drilling (read ANWR). This, in spite of the fact that it is widely agreed that it will take years for any oil produced from such drilling to hit the market and that when it does, it will only make a very small contribution to solving a very large deficit.

- So, what do I think is going on?

- Well, the stories about the decision making regarding which companies are going to get to process the Iraqi oil are simple PR. In a world where many of the players (read nations) are essentially democratic, such PR is effective because democracy’s weakest point is that its decisions are largely made by those in the middle of the norm curve. And those folks rarely analyze things in more than a cursory manner. So PR spun to them is effective in blunting the responses of those nations by confusing their voters who are the ones who ultimately motivate their political decision makers.

- As for the current push to resume oil exploration in the U.S., I think it is driven by the fact that oil companies here in the U.S., which have an inordinate affect on the decision making processes in the U.S. government and the mostly business driven Republican Party, see significant profits in the exploration itself. The fact that after the work is done and we’ve trashed ANWR and built a huge amount of oil infrastructure, we won’t have much to show for it in terms of oil delivered to the market is irrelevant. Between now and then, the companies involved will show many profitable quarters as the work is done and that’s the bottom line in such decisions.

- I was, and am, a bit disappointed that the Council of Foreign Relations chooses to report these things without a deeper analysis of why the decisions are being made but then I suppose they see their mandate as simply describing the important decisions as the public largely perceives them rather than rendering a deeper analysis of why they are being made. In this, I think they either underestimate their audience or they’ve become a mouthpiece for those who create the spin to obscure the substance.