Garnaut and peak oil:

Stuart McCarthy, Brisbane Coordinator, Australian Association for the Study of Peak Oil and Gas (ASPO-Australia), writes: Re. “No use planning for climate change without acknowledging peak oil” (Wednesday, item 7). Our main concern with the Garnaut Report is not the “possibility of Australia reaching peak oil”, but the likelihood of world oil production peaking within the next several years. Australian oil production already peaked in the year 2000 and is well and truly in decline, leaving us already almost 50 per cent dependent on petroleum imports. Very strong evidence now exists that world oil production is likely to peak in the 2010-2012 timeframe. Unfortunately this evidence appears to have been overlooked by Professor Garnaut, indeed his Draft Report explicitly rejected any constraints on the production of fossil fuels. The result is that his emissions scenarios, economic modelling and analysis, and by extension his policy recommendations, are seriously flawed.

These flaws may become starkly evident as soon as November, with the release of the International Energy Agency’s World Economic Outlook 2008. Since the release of WEO 2007, which was used as a baseline for Professor Garnaut’s emission scenarios and economic modelling, the IEA has overhauled its oil and gas production forecasting methodology and appears to have accepted the evidence of a near term peak in world oil production. As the IEA has gone about its review of world oil and gas supply prospects over the last 12 months, Chief Economist Dr Fatih Birol has given numerous warnings about the findings of WEO 2008 and has adopted the motto “we need to leave oil before it leaves us.” In a recent interview on the subject Birol said “when we present the WEO 2008 this November, I think it possible that the sirens will shrill even louder.” From the perspective of Australia’s climate change debate, Birol’s shrill November sirens may well discredit much of the scientific and economic basis upon which the Rudd Government’s policy response is currently being formulated.

Although peak oil has gradually begun to filter into the mainstream media in recent years, few pundits appear to understand the implications of peak oil for the climate change debate. Since world oil production entered a plateau in 2005, we are arguably witnessing the socio-economic impact of peak oil in the here-and-now, with steep oil price increases already contributing to an economic slowdown. The time, energy, capital and other resources for building the alternative energy and transport infrastructure needed to “de-carbonise” the economy are starting to become scarce. The failure by the leading voices of the conservation movement to grasp the urgency of the peak oil mitigation problem and the constraints this imposes on climate change mitigation is one that will soon begin to haunt them.

Finally, a minor point — I may be an engineer but I am certainly not a scientist!

The Wall Street bailout:

John Goldbaum writes: Re. “Bailout. It’s Allliiive…” (Yesterday, item 1). George Soros advocates a bank recapitalisation package rather than the proposed bailout but his plan is not being voted on today. If Congress passes the bailout, the next problem will be how to value the toxic securities. There will be only one buyer standing in the market at the beginning and there will be only $US 700 billion to spend. There are many potential sellers and they are holding $US 2 trillion worth of toxic securities. The most appropriate way to make the market would be to allow holders of the toxic securities to tender them at the lowest price they will accept for any given quantum of securities which they presently hold on their books at the original purchase price. The buyer will buy the cheapest ones.

The more shaky the institution which holds the toxic securities, the more the incentive to tender at a lower price. The shaky institutions know who they are. The tenders should be conducted in tranches of $US 100 billion. Such a market will decide the true value of the toxic securities rather than assigning an arbitrary 50% or 70% as has been suggested in some financial media stories. Some institutions will become insolvent and others will become bigger. That is market capitalism working at its finest. The global solvency crisis will be resolved speedily and the world can begin to grow afresh from a new but lower base, devoid of fear.

Julian Gillespie writes: Many pundits and those US politicians backing the bailout legislation are pushing the idea that “over time … taxpayers are likely to make back much if not all of the money the Treasury uses because it will be investing in assets with underlying value.” Now that does help to sell the package to voters — but no one is asking the critical question namely, what does “over time” really mean? If the USA is going into a recession then isn’t “over time” going to be something like 8-10 years before a future generation of voters gets any benefit — (though is it a real benefit just making back what you paid out?) — 8 to10 years is a very long way down their economic road — so these “positive” assurances (read spin) are hardly of any great assistance to the present mass of debt laden US voters.

In its purest form this bailout package is being dolled-up to sound like some type of loan the US government is taking out with its citizens, but in truth it is just another debt US taxpayers have incurred — and once US banks come into receipt of this USD$700 billion, what will they do with it? Lend it out of course for nearly 10 times its value (now go and do the sums on that!) — thereby creating more debt. So I think this bailout package is really just paying for a few more levels to be built onto the US house of cards.

Rundle in the US:

Ken Lambert writes: Re. “Rundle08: Waiting in Washington with nowhere else to go…” (Yesterday, item 2). As Guy Rundle says often — I could be wrong. For a largely feeble minded populace brought up in Winfreydom, Palin could have vote winning appeal. She is pretty good looking and while not well educated, she could do a lot better than Pauline Hanson in handling the media. Smug network pooh-bahs who try to trip her up with smart questions could come unstuck with a homespun homily from our moose skinning mom. She probably has enough common sense to keep it simple without being intimidated and this will have Joe and Peg Average nodding and grunting approval as they consume another box of Krispy Kreme donuts.

Philip Woods writes: John McCain wraps himself in the American flag and likes to call himself a war hero. But, few have asked (certainly none of the mainstream media) what was heroic about bombing civilians in a war against a nation that never threatened America and in fact was looking only to regain control of their country from ruthless colonising overlords. Michael Moore’s website offers a telling indictment against McCain; as well as an assessment of McCain by a fellow Vietnam POW, Dr Phillip Butler who was awarded two Silver Stars, two Legion of Merits, two Bronze Stars and two Purple Heart medals. The ability to kill innocent civilians in large numbers and endure a POW camp is not necessarily the pre-requisites for the POTUS, or is it?

Jim O’Brien writes: I enjoy Guy Rundle’s articles but just a little nitpicking. Guy refers to Washington DC as a southern city. It is certainly not geographically. Yeah, it has a lot of Afician Americans and a black/white income divide. But I don’t think that makes it southern. It was ceded from Maryland which has a very “northern culture” orientation.

Turnbull, pot and the Jewish faith:

Alan Kennedy writes: Re. “Turnbull: Politics, pot and those ‘possible Jewish roots’” (yesterday, item 6). The Wentworth Courier’s cover story on Malcolm Turnbull’s Jewish roots was a hoot. A political neophyte covering al the bases on his long march to the Lodge — odd it isn’t resonating in the polls at the moment. In Wentworth claiming some Jewish blood will not harm his chance one iota. He then did the wonderful double cross religious back flip with pike by saying he was a Mick. This appeals to the old Irish sub-culture that dominated the Bondi area since the early 1900s. With the recent influx of Russians into Bondi Mal may like to establish some links with the Romanovs as well. He could throw in a few admissions about a youthful flirtation with Stalinism as well. Of course Mal missed out on the Gay and Lesbian vote that form a large rump in the western end of Wentworth. We await next week’s cover of the Courier which I am told will feature Mal’s long-standing commitment to being on the lead float at next year’s Mardi gras.

V8 supercars:

Jason Whittaker writes: Re. “V8 promoters overtake NSW’s L-plate Premier” (yesterday, item 12). It’s one thing to complain about V8 Supercars racing around the streets of Homebush (though given the desolate nature of the place post-2000 those arguments are pretty poor). You can argue, I suppose, governments shouldn’t invest in major sporting events and facilities. And you can certainly argue the marketing department of sport administrators V8 Supercars Australia (not AVESCO, as Alex Mitchell wrongly stated) is one of the biggest spin-merchants in town. But to complain about a race at Bathurst? The spiritual home of Australian racing, the site of motorsport events for nearly 50 years?

 The “local business leader” paraphrased in this paper-thin yarn should probably look at doing business elsewhere. And just for the record, Alex, 2000km of the Mount Panorama circuit would take about 15 hours to complete — which is why they have, for decades now, run the Bathurst 1000. Not just a poor story, but much worse — completely unAustralian.

Greg Ryan, who was first taken to the James Hardie 1000 when he was nine by his Dad, and has never fully recovered, writes: I’m probably the 50th person to point this out, but in the interests of hosing down bullsh-t Alex’s multiple mentions of the “Bathurst 2000” doesn’t do his credibility for numbers any good. Given that he asserts rubbery figures from the NSW Government and AVESCO, its funny his quote from AVESCO got it right … Bathurst 1000. Or as the marketing team has been trying to shove down the memory hole for the last 10 years, “the race formerly known as the James Hardie 1000”.

Harper’s plagiarism:

Kapil Talwar writes: Re. Yesterday’s editorial. There is an alternative explanation to this (ok, it’s a conspiracy theory): guidance sent, presumably from Washington, to conservative allies. Speech writers these days are spread just as thin as everyone else, so they include bits of text without change. (Tony Blair’s speech writers had to develop their own speech considering Britain’s frontline diplomacy in the Iraq war.) The remaining countries are not so careful, so they read out much of the common text. It just happened that Howard spoke earlier than Harper, else Howard would have looked even more foolish than Harper does now.

The Libs’ chances in the ACT:

Duncan Beard writes: Re. “Richard Farmer’s political bite-sized meaty chunks” (yesterday, item 11). Could Richard Farmer please stop banging on about the Liberals big chance to win government in Canberra. While it’s eminently possible that some Labor votes will bleed away to Greens and Independents, the Liberals don’t stand a snowball’s chance in hell of winning office here. I know people who have friends that are Liberal candidates, and not even they will consider voting Liberal.

Matt Taibbi:

Michael Cox writes: Re. “Capital totters, derangement follows. Send in the clowns” (yesterday, item 5). Matt Taibbi’s book is hilarious mostly but also somewhat saddening. It is worth the price alone for the imaginary script that takes place when Cheney et al are plotting the 9/11 plane crashes and building implosions. For the uninitiated, Taibbi’s articles (Rolling Stone, alternet.org and others) are worth a good long read, not just his book. Check out his take on Sarah Palin here. If you like Rundle (and I do), you’ll also appreciate this guy.

Faris:

Harold Thornton writes: Rob O’Neill (yesterday, comments) crafts a clever paradox in asking for more Faris pieces, but only on subjects Faris knows something about. Multiply zero by any number you care to, Rob, it’s still zero! However, since you seemed determined to pollute Crikey with Faris’s toxic verbal sludge, can I suggest a couple of titles for articles Faris is no doubt itching to write? How about “George W Bush — Saint or Merely Genius?” or “Why the Australian People voted John Howard back into office” or “Am I, Peter Faris QC, the Final Proof of Intelligent Design?”

Send your comments, corrections, clarifications and c*ck-ups to [email protected]. Preference will be given to comments that are short and succinct: maximum length is 200 words (we reserve the right to edit comments for length). Please include your full name — we won’t publish comments anonymously unless there is a very good reason.

Peter Fray

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