The War On Oil

The grow consensus is that a replacement for oil must be found rapidly. What unintended side effects will this have?

The United States spends 45 Billion dollars a year on oil (roughly). It it, however, a trillion dollar economy. The US spends 4.5% of its GDP on oil, in other words. By contrast, 98% of the GDP of Saudi Arabia is from exporting oil. Similar figures are recorded against most of the worlds major petroleum producers (though perhaps not quite as extreme). The reason for this is a largely Dutch Disease. It is simply too tempting to spend the money. The oil producing nations are absolutely dependent on oil. We in the West merely find it convenient to buy it.

What will happen when we start to move to non-fossil fuel sources? Carbon taxes/credits will make oil more expensive to us, the consumers. We will begin to switch. At first, the growth in non-fossil fuels will be less than the growth in oil usage - there will be a mild effect on the oil price. As the transition starts to bite, there will be a sudden constriction in the market for oil.

Oil is priced in a strange way. Unlike almost any other commodity in the modern world, it's price is supported by an elaborate cartel. Perhaps only diamonds are so artificially supported. When oil substitutes get to 10% of the market (say - it could be less), the oil price will crash to production prices. Today that would be $25 dollars or so, from a market price of $61.

The effect of this will be suddenly to turn oil from a cash machine to a low/zero margin industry - there will be little or no profit. No more easy billions. OPEC could try to curtail production. But in the face of impoverishment, the oil producing countries will probably cheat.

Nearly all the producers have saved nothing. Many have over spent. The prime exception to this is Norway. The sudden ending of oil profits will send these nations over a cliff. They will not be able to feed their populations, or even give them drinking water in the case of Saudi Arabia. How will they respond?

Missile Defence and the media

One thing that I have always wondered about is the inability of major media (A.K.A MSM) to delve into the technical background to their stories with any skill.

Recently, Russia reacted very strongly to suggestions that the US would deploy part of its planned missile defense system in Europe - specifically Poland and the Czech republic. Various stories followed in the press and on TV about this threat.

The first thing to note about this story is that missiles based in Europe are not able to intercept Russian ICBMs unless they are fired at South America. This is because all sub-orbital and orbital vehicles follow Great Circle routes. To divert them from this would take enormous amounts of energy. This means that while small deviations of 100 miles or so are possible, big changes would require missiles far larger than anything that is practical to build. It would rapidly reduce to zero the payload capacity of existing weapons.

So, the path taken by Russian missiles from their silos to a given target is very predictable. All we need to see it is a Great Circle route maker.....

Russia to the US -



Russia to Brazil



Only if the Russians attack Brazil will their missiles pass near enough to Eastern Europe for the suggested American weapons to have a chance to hit them. If fired at the US, they go over the North Pole. Ironically, if the Russians attacked the sites in eastern Europe, it would mean that the missile defense system would have a chnace to hit them.

Why are they so upset then? Partly because those at the top of the Russian military probably aren't that technical, but mostly because this is a reminder that their colonial empire in Eastern Europe is gone.

Or did a Russian general have a very very bad experience at Carnival?

The usual comedy

How to fix a problem the wrong way. Despite all the usual protestations, university entrance will be "normed".

In the US, this led to interesting effects. Chinese and Jewish students were declared not to be minorities. Apparently, a real minority is unsuccessful as a group. They even went so far as to put caps on how many could go to certain universities.... For those with a sense of history this was particularly nasty, since one of the first breakthroughs for civil rights in the US was the removing of the quotas (limits) on the number of Jewish students at various universities.

So are we going to have the same stupidity here? The argument is that not enough working class children are going to university. What is actually happening? The evidence is interesting - equally qualified candidates to Oxford and Cambridge, for example, have an equal probability of getting the place. But why is it that half the places go to the private/grammar school entrants?

The simple problem is that many of those from the state sector who do have 4 or 5 As at A grade do not apply to top Universities. That is, they do not put them down on the form. There is no cost associated with requesting them. The form is simply filled in by the pupil/teacher/parents and posted to the general administration service. I repeat, they are not even applying. So, it cannot be reactionary snobs in the universities turning them down.

I have personal and hence anecdotal evidence of what happens - a friend at UCL who had 4 A Levels at A didn't apply to Oxbridge because "They wouldn't take me - I'm not posh". This had been the advice of her teacher. She had not, herself, ever been near either place.....

The old Soviet Union tried the game of giving university places preferentially to the children of "workers". So of course the truly powerful got round this, and it was those in the middle who got the short end of the stick. Interestingly, this was the cause of several defections by mid ranking KGB officers....

Lastly, selecting on class will probably be illegal - A Human Rights lawyer would have a field day, arguing that since a child has no choice in parents or indeed schooling before 16, penalising them for their background would be unjust. Cherie Blair is quite rich enough. How about a campaign to get State school pupils with the requisite grades to sign up for Oxbridge/Russel Group Universities?

Trident & The US/UK nuclear relationship

Many wild statements have been made regarding Trident replacement and the nuclear relationship between the US and the UK. Some genuine history might be a good idea.

Following the end of the Second World War, the US congress passed a law prohibiting the sharing of nuclear technology with anyone. This cut the connection with the UK. The UK contribution to the Manhattan project was a mostly a number of scientists - most of the personnel and money was American. The most significant non-US contribution came from émigré scientists who chose to go to the US from Nazi occupied Europe.

In fact the McMahon Act was based on a misunderstanding - the Manhattan project had been held so secretly that Vice President Truman hadn't been told, let alone Congress. When Roosevelt died, there was a degree of confusion. This was not helped by the security paranoia of Leslie Groves, the man in charge of the project. Mind you, his paranoia was justified - thanks to the stupidity of British civil servants Klaus Fuchs had been given clearance to work on the project.

In the immediate aftermath of the act, it was realized a mistake had been made. In fact cooperation restarted almost immediately. British observers at the subsequent US tests were allowed to install their own measuring equipment, for instance.

The French withdrawal from NATO was partly caused by this culture of secrecy. It was also in part due to French anger at what they regarded as the unfair attributed towards the UK - contrary to popular belief, the UK built its first atomic weapons using design information from the Manhattan project.

After the breach with the French, the US revised its policy and essentially re-wrote it with a special exemption for the UK. From then on, UK scientists worked in the US. They were not sharing data, but doing joint design. You could say the current US arsenal is 90% US designed and 10% UK. The UK builds its own weapons at Aldermaston to these same designs. This infuriated the French even more - since they were now specifically excluded. There are no “black” nuclear programs in the US, incidentally. After 1947 Congress took firm control of development and deployment of nukes and has not relinquished it – breaking it would be a very good way to end up in jail.

Much has been written on the Skybolt cancellation - the simple truth is that the US cancelled an expensive, obsolete, fragile system and offered the UK (a minor partner in the project) the Polaris system instead. This was the equivalent so telling someone you don’t want to sell them
an MG Roadster, but offering them a Ferrari instead. Polaris was the crown jewel of the American arsenal, decades ahead of everything else. The French were, again, very upset. Incidentally, British nuclear subs got their start when the Americans pretty much gave us their reactor design. The first UK sub, HMS Dreadnought was half US made.

When the decision replace Polaris was made, variousoptions were considered. The French were, in fact, contacted. The problem was that their system was obsolete as well, and required an expensive replacement. The French wanted to keep all the actual work in France, but get Britain to fund half the project. They also wanted all the warhead design information that the Americans had shared with the UK. Not surprisingly the talks foundered very rapidly – they were asking us to pay more for a system that was less capable, and give them information that we had promised not to pass on to third parties.

A great deal of what has been written about UK Trident is based around argument from personal incredulity. Many people simply can’t accept that there is no US control over the missiles and their targeting. The simple fact is that one of these boats can go to sea for 6 months – in that time there is no need for external contact. The only way that the US could influence their usage would be to withdraw the maintenance cycle for the missiles. Assuming that nothing was done, this would mean that Trident would be out of service about 18 months to 2 years after this happened – the missiles are “canned”, sealed in their tubes with no need for maintenance. They would be operational until their service life expired and they required overhaul. And, of course they could refuse to give us reloads, if we start a nuclear war they
objected to.

It is worth noting that during the early sixties, US nuclear weapons were being carried on German (among others) aircraft. Fighter-bombers would sit on German airbases with German crews, with the bombs attached. A couple of US guards preserved the 2 man rule. There are a number of stories regarding the fact that a couple of the German pilots had tin ties….. The truth is that in the area of nuclear policy, the US has pursued a remarkably un-paranoid policy with regard to its allies since the late 50s. Quite simply they had no objection to NATO members having weapons, or a considerable level of access to US ones.

$250 a barrel oil

Oil costs $61 dollars a barrel (Brent Crude).... However, in the UK, the government takes 80% of the sale price of petrol/diesel in tax. A tax rate of 400%. The effective price of oil is thus $250 dollars a barrel.

Peak Oil advocates believe that the world will lapse into chaos at that price - oh well, on to the next prophecy of doom.

There is a general agreement that we should move away from fossil fuel. Why do we use it? Well, fossil fuel is the cheapest fuel available. All the other options cost more. It isn't a conspiracy by Big Oil.

However the difference is much less than the tax on fuel. If we switch, the government is faced with a simple and very unpleasant choice. Either lose reveue or try and persuade people that fuel prices should be even higher. The Fuel Crisis tells us that the second option would be impossible.

The first option has a high political cost - people are used to the extortionate fuel taxes. Shifting the tax elsewhere would be very visible. 2p on income tax, anyone?

I suspect that part of the reason behind the road pricing scheme is to shift the tax take from the fuel to the vehicle. What Chancellor wants to be the one who puts a 400% tax on hydrogen & made motoring yet more expensive. A gradual ramp up of road pricing would be a neat way to keep their hands in your pockets.

The government is addicted to Oil. Not us, not even the Oil companies (who are merrily moving to the post Oil age).

This is pertinent in light of the plans of all the major parties to introduced environmental taxes. Taxes do not merely discourage behaviour - their purpose is always raising revenue. A tax on CO2 emissions will make the government dependent on CO2 being emitted....

Loans For Lordships - a question

When the Community Charge (popularly known as the Poll Tax) was before the Lords, Gerald Kaufman stated on BBC Radio 4 that the Lords would be dealt with if they didn't vote against it.

Despite this threat the Lords passed the bill. The reason for this was that the Community Charge was considered a money bill - voting it down would have re-started the 1911 war between the Commons and the Lords. Many peers voted it through or abstained despite their dislike of the measure itself.

Lords reform duly became (again) a part of the manifesto. Within 2 years of the election of the current government, the first stage of the process was complete - only 92 hereditary peers remained. Then things stopped. Despite a parlimentry party eager for further change nothing happened

We now know that a process of raising money from potential peers began. The question is this - was policy changed to keep the cash flowing?

Since the scandal has broken, the money has dried up. Lords reform is back on again. It should be noted that the prefered method of election is list based proportional representation. One wonders if a donation would influence ones place upon the list.