Sunday, June 22, 2008

Chief NASA Climate Scientist Commits Crimes Against Humanity

From the story copied below:
"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 "
If anyone ever harbored any lingering idea that the motives of the global warming advocates could be honest, this should dispel it.

Hansen isn't satisfied with just the heads of the oil companies on a pike. For everyone else, if you read on, he wants them muzzled, gagged and forced to obey at the point of a gun:
"His sharpest words are reserved for the special interests he blames for public
confusion about the nature of the global warming threat. "The problem is not
political will, it's the alligator shoes -- the lobbyists. It's the fact that
money talks in Washington, and that democracy is not working the way it's
intended to work." "
Truly, it doesn't get much more evil than this. Dishonest alone doesn't quite capture what this man is. Floyd Ferris, meet your spiritual brother. And yet... James Taggart also comes to mind, when, in Atlas Shrugged, Taggart, the altruist and humanitarian, and Ferris, the arch-government scientist, are electrocuting John Galt, trying to make him obey, to think for them, to save the country. When the electric torture machine suddenly breaks down, and Galt -- the man being tortured -- tells them how to fix it, Taggart teeters on the verge of insanity:

"... I'll work it myself! We've got to go on! We've got to break him!"

"Take it easy, Jim," said Ferris uneasily, jerking him up to his feet. "Hadn't we... hadn't we better lay off for the night?" said Mouch pleadingly; he was looking at the door through which the mechanic had escaped, his glance part-envy, part-terror.

"No!" cried Taggart.

"Jim, hasn't he had enough? Don't forget, we have to be

"No! He hasn't had enough! He hasn't even screamed yet!"

"Jim!" cried Mouch suddenly, terrified by something in Taggart's face. "We can't afford to kill him! You know it!"

"I don't care! I want to break him! I want to hear him scream! I want--"

And then it was Taggart who screamed. It was a long, sudden, piercing scream, as if at some sudden sight, though his eyes were staring at space and seemed blankly sightless. The sight he was confronting was within him. The protective walls of emotion, of evasion, of pretense, of semi-thinking and pseudo-words, built up by him through all of his years, had crashed in the span of one moment-the moment when he knew that he wanted Galt to die, knowing fully that his own death would follow.

He was suddenly seeing the motive that had directed all the actions of his life. It was not his incommunicable soul or his love for others or his social duty or any of the fraudulent sounds by which he had maintained his self-esteem: it was the lust to destroy whatever was living, for the sake of whatever was not. It was the urge to defy reality by the destruction of every living value, for the sake of proving to himself that he could exist in defiance of reality and would never have to be bound by any solid, immutable facts. A moment ago, he had been able to feel that he hated Galt above all men, that the hatred was proof of Galt's evil, which he need define no further, that he wanted Galt to be destroyed for the sake of his own survival. Now he knew that he had wanted Galt's destruction at the price of his own destruction to follow, he knew that he had never wanted to survive, he knew that it was Galt's greatness he had wanted to torture and destroy--he was seeing, it as greatness by his own admission, greatness by the only standard that existed, whether anyone chose to admit it or not: the greatness of a man who was master of reality in a manner no other had equaled.

In the moment when he, James Taggart, had found himself facing the ultimatum: to accept reality or die, it was death his emotions had chosen, death, rather than surrender to that realm of which Galt was so radiant a son. In the person of Galt--he knew--he had sought the destruction of all existence.

It was not by means of words that this knowledge confronted his consciousness: as all his knowledge had consisted of emotions, so now he was held by an emotion and a vision that he had no power to dispel. He was no longer able to summon the fog to conceal the sight of all those blind alleys he had struggled never to be forced to see: now, at the end of every alley, he was seeing his hatred of existence--he was seeing the face of Cherryl Taggart with her joyous eagerness to live and that it was this particular eagerness he had always wanted to defeat--he was seeing his face as the face of a killer whom all men should rightfully loathe, who destroyed values for being values, who killed in order not to discover his own irredeemable evil.

"No..." he moaned, staring at that vision, shaking his head to escape it. "No... No... "
Put oil firm chiefs on trial, says leading climate change scientist
Speech to US Congress will also criticise lobbyists·
'Revolutionary' policies needed to tackle crisis
Ed Pilkington in New York
The Guardian,
Monday June 23, 2008

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 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."

He is also considering personally targeting members of Congress who have a poor track record on climate change in the coming November elections. He will campaign to have several of them unseated. Hansen's speech to Congress on June 23 1988 is seen as a seminal moment in bringing the threat of global warming to the public's attention. At a time when most scientists were still hesitant to speak out, he said the evidence of the greenhouse gas effect was 99% certain, adding "it is time to stop waffling".
He will tell the House select committee on energy independence and global warming this afternoon that he is now 99% certain that the concentration of CO2 in the atmosphere has already risen beyond the safe level.

The current concentration is 385 parts per million and is rising by 2ppm a year. Hansen, who heads Nasa's Goddard Institute for Space Studies in New York, says 2009 will be a crucial year, with a new US president and talks on how to follow the Kyoto agreement.

He wants to see a moratorium on new coal-fired power plants, coupled with the creation of a huge grid of low-loss electric power lines buried under ground and spread across America, in order to give wind and solar power a chance of competing. "The new US president would have to take the initiative analogous to Kennedy's decision to go to the moon."

His sharpest words are reserved for the special interests he blames for public confusion about the nature of the global warming threat. "The problem is not political will, it's the alligator shoes -- the lobbyists. It's the fact that money talks in Washington, and that democracy is not working the way it's intended to work."

A group seeking to increase pressure on international leaders is launching a campaign today called It is taking out full-page adverts in papers such as the New York Times and the Swedish Falukuriren calling for the target level of CO2 to be lowered to 350ppm. The advert has been backed by 150 signatories, including Hansen.

Israel vs. The Arab World

From John Lewis's excellent article, "Israel and the Front Line of Civilization" (
"I see towns surrounded by trees. The trees were nearly all planted by the Israelis. This is something little known in the U.S.: The Israelis have planted tens of millions of trees in a desert that had never before been planted, and they remain committed to planting in the Negev Desert, especially near Beer Sheva. Trees did not exist here before 1948. The so-called “Green Line” originally dividing Israel from its neighbors is called such because it literally is a line of green."
Last year I was engaged in one of my favorite activities -- exploring the Earth using Google satellite photos (not Google Earth, mind you, just the direct top-down satellite photos). I've seen things this way that no traveler ever would, and stimulated my desire to travel if I ever have the means.

From satellite photos I've seen the North Pole, Antarctica, secret nuclear storage sites in Soviet Russia, devastated landscape and blown up planes in Iraq, U-2s on the ramp in England, fuming volcanoes, the desolate Galapagos, the Grand Canyon, Pacific Atolls devasted by nuclear weapons testing, vast coral reefs in the Pacific, the top of Everest or observatories on Mauna Kea, massive forest fires consuming thousands of acres in Alaska, the pyramids in Egypt (type in "Pyramids, Egypt" into, the Taj Mahal, supertankers coming down the Singapore straights, the jungles of Borneo, the Great Coral Reef, Hong Kong, the Eiffel Tower (type in "Eiffel Tower"), the entire expanse of New Zealand, French Polynesia, Guam, large groups of hippos resting in the shade of water in rivers of deepest, darkest Africa, Angel Falls in South America, Beijing, the bottom of the Marianna Trench (you can see ocean bottom) and --

You get the idea. I go into the detail to stress what you can see -- and the really high resolution photos that show a lot (~6 inch resolution to a couple feet -- people clearly identifiable) often aren't evident till you've zoomed in quite a ways, but I have a good sense of how to find them -- you can guess that many of the photos were commissioned by people interested in the particular areas.

To the point: I've also explored vast swaths of the Middle East (to see what this place I've heard so much about is really like), and what caught my eye last year was the stark line of demarcation between Israel and the Arab world around it -- not much more eloquent demonstration of the difference between the two cultures could be found. I put together a little pdf file just now to bring this out for you -- the satellite photos have changed since then, so the border line isn't quite as vivid as last year, when it was bright green on one side, and dreary gray brown on the other (crops aren't in bloom as much) -- but the contrast is still quite evident. The difference between a rational culture that wants to live, and an irrational one that seems more interested in suicide.


Saturday, June 21, 2008

Reality meets Analysis, Part 3

In my recent post, I said very small changes in supply/demand cause large price changes in essential commodities, like oil. Here's some confirmation of that in a news story today:
"[U.S. Energy secretary] Bodman said that every 1 percent increase in the demand
for oil requires a 20 percent rise in price to balance the market. "
The figure I've bandied about blithely (but which was my gut sense of the magnitude) was a 5% change in supply or demand for oil could cause a 100% change in price. From my post ("Devils, Fools, and the Bogeyman":
A 5% drop in supply relative to demand can double the price if people *must*
have the commodity.
Bodman's figure is the same: 1% change in demand (or supply) giving a 20% change in price, is the same as 5% change in supply/demand that gives a 100% change in price. If we can accept a government official as an authority of anything, somebody owes me a beer. But who?

FYI, these figures suggest a 25% change in supply/demand accounts for the 5X increase in oil price since 1990, unadjusted for inflation. It would be interesting to plot the growth in regulations blocking oil exploration and development against a 25% increase in the demand/supply curve. I bet regulatory growth is much greater -- and technology is the reason that oil production has kept up as well as it has. But everything has to break when you push it hard enough.


US energy chief: Low oil production drives price
Published: June 21, 2008
Filed at 3:16 p.m. ET

JIDDAH, Saudi Arabia (AP) -- The U.S. energy secretary said Saturday that insufficient oil production, not financial speculation, was driving soaring crude prices.

Secretary Samuel Bodman's comments on the eve of an energy summit in the Saudi port city of Jiddah set the stage for a showdown between the U.S. and conference host Saudi Arabia, which has largely blamed speculation in the oil markets for record prices.

The U.S. and many other Western nations have put increasing pressure on Saudi Arabia, the world's top oil exporter, to increase production. Saudi officials have been hesitant to do so, arguing that soaring prices have not been caused by a shortage of supply.

Bodman disputed that assertion Saturday, saying oil production has not kept pace with growing demand, especially from developing countries like China and India.

''Market fundamentals show us that production has not kept pace with growing demand for oil, resulting in increasing prices and increasingly volatile prices,'' Bodman told reporters. ''There is no evidence that we can find that speculators are driving futures prices'' for oil.

He said commodities markets have experienced a huge influx of money from financial investors in recent years, but they have been following the market upward rather than driving the increase in the price of oil.

Saudi Arabia called the unusual meeting in Jiddah between oil producing and consuming nations as a way to show that it was not deaf to international cries that high oil prices have caused social and economic turmoil.

The Gulf nation has also become increasingly concerned that record oil prices could hinder growth in the U.S. and other major industrialized economies, potentially leading to a decline in oil demand and a sharp drop-off in prices.

While Saudi Arabia has been reluctant to drastically increase production, it has announced several small increases recently that it says were made to satisfy increased customer demand. The country has consistently said that it will produce enough oil to ensure the market is supplied.

The kingdom increased oil production by 300,000 barrels a day in May, and a Saudi official confirmed Saturday that the country would add another 200,000 barrels a day in July. The official spoke on condition of anonymity because of the sensitivity of the information.

Saudi Oil Minister Ali al-Naimi also confirmed the increase ahead of the conference. But neither announcement has done much to stem the run-up in the price of oil, which closed near $135 on Friday.

Saudi assistant oil minister, Prince Abdulaziz bin Salman, told a news conference Saturday that the delegates were ''congregating to achieve results'' and try to draw ''a collective way forward for how to attend to this situation.''

''This situation as we see it today as it exists needs everybody's attention simply because it no longer is a luxury to talk about it or ... to keep bouncing back and forth blame,'' he added.

The prince said that Saudi Arabia has been working with several international organizations to put together a background paper to focus Sunday's discussions and reiterated that the kingdom was ready to meet demand from its customers and foster stable prices.

He said it would be ''wrong'' to judge the success of the meeting by oil prices the day after it ends.

Many countries around the world have experienced social unrest by populations angry that rising fuel prices have driven significant increases in the cost of food and other basic goods.

Bodman said that every 1 percent increase in the demand for oil requires a 20 percent rise in price to balance the market. Demand in China, India and the Middle East has been soaring in recent years as the countries consume more energy to fuel economic growth.

Rising demand in the developing world has coincided with historically low levels of spare oil production capacity, which fell below two million barrels per day among OPEC countries in May for the first time since the third quarter of 2006, according to the International Energy Agency.

Bodman made clear that the responsibility for reducing oil prices did not simply fall on the shoulders of producing nations, saying consuming countries must increase energy efficiency and invest in the development of alternative fuels. But he saved his strongest words for oil producers like Saudi Arabia, who he said must step up long-term investment in production and spare capacity.

''The incentive (for investing) is simply reasonable prices so that we're not faced with having to drop everything and race to Jiddah for a meeting that was called on a week's notice,'' said Bodman.

Saudi Arabia is completing a $50 billion plan to increase capacity to 12.5 million barrels a day but has signaled it would not go beyond that.
CNBC said Saturday that Saudi Arabia's current capacity is 11.3 million barrels per day, quoting al-Naimi's adviser, Ibrahim al-Muhanna. Previous estimates by the International Energy Agency put current Saudi capacity at about 10.7 million barrels per day. The kingdom currently produces about 9.5 million barrels per day.
Associated Press Writer Donna Abu Nasr contributed to this report.

Oil Tidbits and Robbbits

Steve Saaf provided some additional information on the oil business. A lot of good info if you follow this sort of thing.

I was surprised by the statement that U.S. natural gas consumption has dropped -- despite the large increase in price, the U.S. government has forced (indirectly) a lot of electric power generation to use natural gas, which has been primarily responsible for the large increase in gas cost over the last few years. Those generating stations wouldn't be shutting down; which tells me the reduction in use is probably coming from U.S. "consumers", and most of it would have to be in the winter: they're living in cold homes. When will they be cutting up the furniture and burning it in the fireplace? (Ie, like near the end of "Atlas Shrugged".)

The oil facts presented below don't mention Chinese price controls encouraging oil consumption, and I wonder how many other government influences and subsidies are encouraging oil use around the world?

Nor the amazing fact that even given the tremendous increase in legislation and regulations blocking exploration since the 70's, proven supplies have increased and the ratio of proven supplies to world consumption has increased since 1980. (see my recent email "Devils, Fools and the Bogeyman", which has charts from the U.S. Dept of Energy website.)

How much oil would be available, and at what price if we got all the governments of the world out of the way?

-----Original Message-----
From: steve saaf
Sent: Saturday, June 21, 2008 10:06
Subject: oil tidbits-should we drill here?

(NOTE: the following data are from various sources)

1) In 1990, oil was at $23 a barrel. Today, it's flirting with $140 - a 509%increase. U.S. oil imports are up 70% since 1990. [But remember: this is caused by a very small change in the ratio of supply and the demand that exists -- even a few percent reduction in supply can cause 5X price increases if people *must* have something -- Robb.]

US domestic oil production has been cut in half since 1970. The United States was the largest oil producer in 1970 and now ranks third behind Russia and Saudi Arabia.

Rig counts since 1944 peaked at 4,530 in 1981, during the height of the oil boom. Today rigs running nationwide -- 1,514 were exploring for natural gas and 384 for oil.

We have lost over 50% of gas stations since the '70's.

Oil - production: 8.322 million bbl/day (2005 est.)
Oil - consumption: 20.8 million bbl/day (2005 est.)
Oil - exports: 1.048 million bbl/day (2004)
Oil - imports: 13.15 million bbl/day (2004)
Oil - proved reserves: 21.76 billion bbl (1 January 2006 est.)
Natural gas - production: 490.8 billion cu m (2005 est.)
Natural gas - consumption: 604 billion cu m (2005 est.)
Natural gas - exports: 19.8 billion cu m (2005 est.)
Natural gas - imports: 117.9 billion cu m (2005)
Natural gas - proved reserves: 5.551 billion cu m (no date)

2) According to the International Energy Agency (IEA), China, India, Russia, and parts of the Middle East are expected to consume 20.67 million barrels a day this year - more than the United States will. China is the giant mover and shaker in the energy markets, as its gasoline and diesel demand has soared.

The main reason: Last year, Chinese bought 5.5 million cars, minivans and SUVs plus 3 million commercial vehicles, up fromjust 1.6 million vehicles sold in 1997. This year alone, sales are expectedto grow another 15% to 20%. And through 2015, China's auto sales are expected to grow by an average of 1 million vehicles annually. Meanwhile, India is poised to zoom past China as the world's fastest-growing car market, with sales of passenger cars in India increasing 12.17% to 1.5 million this past year.

3) Mexico is our #3 source of imported oil - 1.2 million barrels per day(bpd), or 12.6% of our imports, but as global demand for oil continued to explode last year, Mexico's oil production fell 5.3% - and then fell faster in the first quarter of this year, by 7.8%. Mexico's crude oil exports dropped even more sharply, down 12.5% to 1.49 million barrels per day in the first quarter!

Mexico's production crisis is deepening: In April, Mexico's oil output fell to a nine-year low of 2.8 million barrels a day, mostly because of a decline in the Cantarell field. [Let's be realistic here -- what about the incredible incompetence and corruption in the Mexican government and the government owned oil company, Pemex? They are well known for being inept at running an oil company.] At current rates of decline, Mexico will become a net oil importer by 2016, and maybe sooner, according to Mexico's Energy Ministry! And it's not just Mexico.

Venezuela, another big supplier of U.S. imported oil, is hemorrhaging oil production due to the slipshod management by its deluded president, Hugo Chavez. Result: The combined net oil exports from Venezuela and Mexico to the U.S.dropped by 414,000 bpd in just five months recently: An astounding annual decline rate of 32% a year! [Solution: We take over Mexico and Venezuela? ]

Nigeria has an installed capacity to produce 3.0 million barrels per day. Nigeria's production capacity is largely blighted by the activities of militants in the Niger Delta which accounts for close to 100 per cent of the country's hydrocarbon resources. The militants are demanding greater control of the hydrocarbon resources [my emphasis, cause this is the pattern of the past and future; for instance Chavez, if you exclude all the other thugs in Saudi Arabia, Iran, Russia, etc, who now have what they want. See Atlas Shrugged, with special attention to the character of Cuffy Meigs. ] and to push their demands, in the last three years, they have heightened a terror campaign including bombings, arson, pipeline vandalism and hostage-taking which have resulted in the shut-down of over 1.0 million barrels of crude oil per day.

May, 2008 production figures released by the Organisation of Petroleum Exporting Countries (OPEC) showed that Nigeria produced 1.89 million barrels per day. [ie, 1/2 of capacity]

4) Today, fully half of the world's oil production comes from less than 120 giant fields. But the majority of these fields are more than a half-century old and some are running on fumes: We're getting between 3% and 4% less oil out of the world's existing oilfields every year [the question isn't whether we're getting less; that's normal for any resource; the question is why aren't new reserves being developed? ], the top five oil exporting countries -- Saudi Arabia, Russia, Iran, United Arab Emirates and Norway -- responsible for half of world net oil exports, are using more and more of their own oil. At the same time, their production is flat or falling, driving their exports into an accelerated decline.

According to the U.S. Department of Energy, the volume of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices, and the same trend is holding this year. [Well, yeah -- OPEC is restricting output (partly to make sure Bush isn't re-elected), partly because the market is willing to pay the going rate; and in the U.S., Congress has done nothing but stop new development for three decades. ] Indonesia and Great Britain, both exporting oil as recently as two years ago, are now importing oil, competing with the U.S. for scarce energyresources.

6) Natural gas production in the U.S. is flat, despite many more wells being drilled. Production in Canada, which supplies over 80% of our imported natural gas, has peaked. America is building facilities to import liquid natural gas (LNG), but with demand rising rapidly in other consuming nations and exporting nations, it remains to be seen if we can import nearly enough. [Start building nuclear power plants and coal-fired power plants, and shutting down natural gas power power plants -- we'll have plenty of LNG at a much lower price.]

The fact is, U.S. LNG imports dropped a whopping 31% in 2007 as higher-priced markets in Asia andEurope outbid us.As a result, America's natural gas reserves are dangerously low. A long, hot summer that pumps up demand for natural gas at power stations [my emphasis] could easily drive prices through the roof before the first frost. By the end of October, America will likely have only 3.1 trillion cubic feet of gas in storage -- almost 1 trillion cubic feet below full storage, just as we go into prime heating season.

7) A 2005 RAND study estimates that about 800 billion barrels of oil trapped in shale are technically recoverable from the Green River Formation. This amount is more than three times the proven oil reserves of Saudi Arabia. [all you've got to do is get rid of the 7 year permit application process, but of course, many politicians, like Colorado's own Senator Salazar, are vehemently opposed to oil shale because it disturbs the pristine hallowed sanctum of Earth goddess Gaia.]

8) The US Minerals Management Service estimates that America's outer continental shelf holds about 19 billion barrels of undiscovered recoverable oil and 85.7 trillion cubic feet of undiscovered recoverable natural gas. But Congress has outlawed development there - even though the Chinese are planning to explore for oil within 60 miles of the Florida coast. [Keep in mind, the US Minerals Management Service is likely grossly underestimating the undiscovered oil -- they think like the same US Bureaucrats who said in 1980 that the world would be out of oil in ten years.]

Friday, June 20, 2008

Devils, Fools and The Bogeyman, Redux

An excellent demonstration of what I talked about yesterday:

Oil futures were up $1.67/bbl... to $133.

China increased the prices that can be charged for fuel domestically, and some investors anticipate dampened demand there. ...but others think private Chinese refiners might increase production because now they can sell gas at a profit, instead of a loss, so net Chinese demand might increase.

Which way do you think it will go? I say -- more production. So does the futures market: more demand = higher price.

Meanwhile, Israel conducts exercises that could portend attack on Iran, which could shut dow the straights of Hormuz, the busiest ocean going oil shipping route (something like 30% of oil in the world). Less supply,= higher price.

Note that the futures market puts a hard dollar value on abstract judgments like the effect of Chinese price controls, impending wars, etc.

Other factors were present yesterday, too:
Royal Dutch Shell PLC's declaration that it can't meet contractual obligations
to export oil from a Nigerian oil field following a militant attack Thursday,
and reports that Nigerian oil workers have decided to strike at a Chevron Corp.
facility beginning Monday. Both moves were seen as likely to further cut oil
supplies from Africa's largest producer.
Another supply problem. And
The dollar fell against the euro Friday, putting more upward pressure on oil
prices. Many investors buy commodities such as oil as a hedge against inflation
when the greenback weakens. A falling dollar makes oil less expensive to
investors overseas.
So they buy more, bidding the price up.

But people bidding up the price of oil are just greedy speculators, you know. As Bill O'Reilly and others are saying, the U.S. Government should stop the speculation (how?). All will be well in the world, then, they say.... Gas prices will plummet, rainbows will appear, birds will sing, and Barack and McCain will skip off into the sunset hand-in-hand...

Note that the effects of different world / economic events can oppose each other to create the illusion of price stability. Uncertainty creates price volatility as investors' judgments wax and wane about the likelihood of a future event, or the significance of a present one (like in China).

But uncertainty isn't the only aspect of price volatility: when a number of opposing factors are about equal, the effect on prices can cancel, and the price of oil (or any commodity) can remain almost stable. But if the factors are very significant, very small changes in any one factor can cause the price to swing wildly -- like subtracting two almost equal but large numbers. 1,000,000 - 1,000,000 = 0, but 1,000,000 - 999,000 = 1000. Multiply this by all the dynamic factors at work in the oil market today. Huge forces are at work, and it takes very little change to upset the delicate balance of all factors to cause large price increases.

With the forces at work in Washington on boths sides of the aisle, we stand a good chance of seeing the mile-long gas pump lines we saw in 1980 -- and for no good reason. All we need is laissez faire.

Oil rebounds on word Israel practiced Iran attack
By JOHN WILEN, AP Business Writer 42 minutes ago
NEW YORK - Oil futures rebounded Friday on unease over Middle East stability and a growing doubt that China's government will be able to curb the country's appetite for fuel by pushing prices higher.

At the pump, gas prices rose slightly.

Light, sweet crude for July delivery rose $1.67 to $133.60 a barrel on the New York Mercantile Exchange, recovering some of the $4.75 that the contract lost Thursday after China announced it was raising fuel prices.
The July crude oil contract expires at the end of trading Friday; trading in expiring contracts is often volatile. Trading was much heavier in the August crude contract, which rose $1.77 to $134.37 a barrel.

While Thursday's news from China helped to reduce investor concerns about surging global demand for oil and fuel, Friday's news from the Middle East injected fresh supply worries into the market.

Pentagon officials said a large scale Israeli military exercise in the eastern Mediterranean early this month could have been a demonstration of Jerusalem's ability to attack Iranian nuclear facilities.

Analysts suggested Thursday's drop in prices and Friday's gains were overreactions.

"Whenever you get Israel and Iran within the same sentence, you have a price reaction," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

But price moves based on the possibility of conflict between the two nations are likely to be short-lived, analysts believe. An actual attack would be a different matter entirely, and could send prices sharply higher.
Meanwhile, several analysts said China's fuel price hike could actually increase the nation's crude demand. Many Chinese refiners have resisted producing fuel in recent months as the retail prices they're allowed to charge were not high enough to cover the costs of their main raw ingredient, crude oil. Now that they can charge more for fuel, Chinese refiners may actually produce more diesel and gasoline, using more crude oil in the process.

"The increase in prices can be seen ... as an attempt to reduce shortages through encouraging domestic supply," said Barclays Capital analyst Kevin Norrish in a research note. "Indeed, it could well be that case that effective demand actually rises, dependent on the current level of shortages."
Some analysts also questioned whether the modest price hikes were enough to dampen demand.

"It remains uncertain whether this fuel price hike in China will really significantly impact demand growth in China in a negative way," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "This (was) a knee-jerk overreaction by the market."

Also supporting prices Friday was Royal Dutch Shell PLC's declaration that it can't meet contractual obligations to export oil from a Nigerian oil field following a militant attack Thursday, and reports that Nigerian oil workers have decided to strike at a Chevron Corp. facility beginning Monday. Both moves were seen as likely to further cut oil supplies from Africa's largest producer.

On another front, investors were awaiting the outcome of a weekend summit in Saudi Arabia between oil consuming and producing nations to discuss high oil prices.

The dollar fell against the euro Friday, putting more upward pressure on oil prices. Many investors buy commodities such as oil as a hedge against inflation when the greenback weakens. A falling dollar makes oil less expensive to investors overseas.

At the pump, meanwhile, gas prices inched 0.2 cent higher to a national average of $4.075 a gallon Friday, according to AAA and the Oil Price Information Service. Gas prices have drifted lower this week since hitting a record $4.08 a gallon on Monday.

Gas prices will likely hold steady near current levels, as long as oil continues trading in its current range between roughly $132 and $138, analysts say.

Diesel fuel, used to transport the vast majority of the world's food, consumer and industrial goods, fell 0.5 cent overnight to a national average of $4.786 a gallon. Diesel reached a record $4.797 on Monday.

In other Nymex trading Friday, July gasoline futures rose 6.24 cents to $3.415 a gallon, while July heating oil futures rose 6.37 cents to $3.7772 a gallon. July natural gas futures rose 12.6 cents to $13.987 per 1,000 cubic feet.

In London, August Brent crude rose $1.98 to $133.98 a barrel on the ICE Futures Exchange.

Thursday, June 19, 2008

Devils, Fools and the Bogeyman

The article copied below was passed on to me, and reasonably well summarizes the fact that Democrats bear much of the blame for the chickens coming home to roost on gas pumps everywhere. But not all the blame.

It's become increasingly popular to blame "speculators" for the rise in oil prices. The article's author puts this as the second top cause of high prices in the "top-ten" list presented in this article. This displays gross ignorance of the nature of a free market in general, and the oil futures market, in particular -- and it should frighten us all.

We're now hearing calls to restrict "speculation" -- from both Left and some on Right, even though a large price movement of such a significant commodity isn't even remotely possible by private parties (even large companies) given the fungibility of oil in a world-wide market. Only government intervention (and not just the U.S. government) can significantly increase prices -- but only by distorting what a free market would otherwise demand.

"Speculation" is nothing more than investing in the future. Oil futures -- promises for future delivery based on a price agreed upon today -- are a means of reducing price volatility and risk. Ask the airlines -- many started buying futures in jet fuel in the last few years (way too late, in my opinion) as a means of guaranteeing a reliable source of fuel at a predictable price, for a time when, in their (correct) long-range judgment prices could increase dramatically. But whether they did or not -- the possession of large futures contracts in jet fuel (a derivative of oil) provided them stability in their planning -- the ability to project costs with some certainty down the road (or in the air).

This was how the futures market got started: farmers, seeking stability in the market for their crops against the uncertainty of flood, pestilence, drought, etc., bought and sold contracts on future delivery as a hedge against uncertainty.

Do people speculate on future prices to make a profit? Absolutely. That's the whole point: the futures market pushes prices in the direction that anticipates and highlights future supply and demand, thereby directing planning of production -- and opportunity for profit -- to meet that demand.

The futures market is the most sensitive barometer of future supply and demand -- expressed in the single most important metric: prices. It is a market where the most knowledgable people -- primarily, the producers themselves, banks, investment funds and wealthy investors -- make their best estimates of an almost incalculable number of variables.

Contrary to popular opinion, "speculators" (in scare quotes, because people who attack speculators are scared of them, much as children are afraid of bogeymen under their beds) cannot create or sustain major price movements, and certainly nothing like the rise in oil from a few dollars of barrel a few decades ago to the $140 a barrel recently. The common guy with a bent for financial roulette and no clue of the commodities business is not a dominant factor. Even a billionaire cannot significantly manipulate a commodities market -- ask the Hunt brothers. (Two wealthy Texans who tried to corner the much smaller silver market a few decades ago -- they went broke.)

A typical commodities market ranges in size from hundreds of billions of dollars to many trillions (oil). In a highly liquid market such as oil, the moment one person tries to move the price in any direction in contradiction to where it should be, another person will step in to try to stop him -- because if the price movement is unrealistic -- not reflective of the reality of the real supply and the real demand -- the price must eventually fall. (This is one reason the short-sellers -- who can be anybody at any given time -- are so important in a market economy: they reign in anyone trying to force up prices artificially.)

If it appears to investors that supply of a commodity (oil, food, metals, etc) will rise relative to demand (for supply can *only* be measured relative to demand), then prices fall, making a compelling case to producers that they are making too much, and profit margins will fall, so they should reduce production -- thereby allowing their capital (held in banks or other investments) to flow into other areas where it will be more productive (ie, offering a greater return on investment).

If the supply of a commodity falls relative to demand, then prices rise. This offers incentives to invest in more production of that commodity.

Now ask yourself: if the price of oil is going up in the futures market (the only market that matters in the context of the single biggest world commodity), and if oil futures are the most sensitive barometer of future supply/demand based on the most knowledgable people factoring in every cause they know of ...
  • from vastly increased demand in China and India,
  • limited refinery capacity in the U.S. (which restricts supply of end products),
  • shortage in sources of oil (real or imagined, but how investors assess supply),
  • laws against offshore drilling and drilling in ANWR (which restrict supply),
  • cartel actions of OPEC (which restrict supply),
  • environmental regulations that delay or block oil and coal leases and increase costs of production (which restrict supply),
  • global warming mandates and anticipation of global warming mandates for reduced carbon consumption (such as the 45 trillion dollar Lieberman-Warner boondoggle, which increases costs, restricts supply and reduces demand),
  • wars in Iraq (at a cost now of $500 billion dollars, which creates uncertainty in supply and demand),
  • anticipated wars in Iran (increases uncertainty),
  • obstacles to nuclear power (which increases demand for oil),
  • government forced shutting-down or expensive retrofitting of coal-fired plants (which increases demand for oil),
  • diversion of natural gas supplies to electric power generation (vastly increasing demand for gas, which comes from oil drilling), blocked hydroelectric power generation (increasing demand for oil),
  • massive farm subsidies and diversion of corn to ethanol production (creating the illusion that oil exploration isn't necessary, reducing oil supply as well as increasing taxes, reducing discretionary spending, and thereby reducing demand for oil),
  • forced subsidies and mandates for uneconomic energy sources like other "biofuels" or hydrogen (creating the illusion oil isn't necessary, and increasing taxes and cost of energy -- it would take many trillions of dollars simply to create a distribution system for hydrogen, much less the storage systems),
  • reduced demand because of recession (at least, currently),
  • increased corporate tax rates (to fund a multiplicity of ineffective government energy programs, among others),
  • fuel tax increases (or decreases), inability to build pipelines to deliver oil to market (increasing fuel costs, while decreasing demand),
  • U.N. mandated scrapping of all older single-hull supertankers (almost complete now, I think, but a factor in the past, increasing oil cost as delivered to the refinery),
  • insurrection and piracy in Nigeria (reducing available supplies, increasing cost of production there),
  • political graft, corruption and interference in Saudi Arabia, Iran, Iraq, Kuwait, Libya, Oman, Yemen, Sudan, Venezuela, Russia, China and the U.S. (increasing costs and reducing supply across the board);
  • and official U.S. foreign policy over the last 70 years or so that actively encouraged the foreign nationalization of oil fields that were discovered, developed and paid for by private companies (increasing costs and uncertainty about the reliability of supplies).

Given all that, what do dramatically rising oil prices in the futures market mean?

Oil futures prices represent the most sensitive estimates of the most knowledgable people of the trend -- projected out days, weeks and years -- in future supply and demand of oil around the world. If prices have tripled, that means the supply is falling (and will fall even more) relative to demand -- for the multitude of reasons listed above, and many more.

You will note that true free market causes are a very small part of that list. You will note that almost all the causes of greatest uncertainty are government created -- and uncertainty is another critical factor in market pricing: it creates volatility and wild fluctuations.

The fact that oil has tripled in price per barrel over the last year and we're now paying $4/gallon of gas is totally, completely a product (if such a word applies) of government intervention in the market for oil -- ie, the U.S. government, and every other tin-pot government on the planet. It has virtually nothing to do with producers seeking "windfall profits" or the "greedy" actions of "speculators" (who are actually stabilizing the system by forcing us to anticipate reduced future supply).

The fact that oil is now at $140 per barrel, and looks to increase even more -- probably a lot more -- should send shivers through your pocketbook and frighten the hell out of you -- that is, frighten anyone from the desire for more government intervention to "save" them. Not because "speculators" are out to destroy you -- but because they are giving you a window into the future, via the crystal ball of the futures market.

What is it telling you?

Let me repeat: the most knowledgable people who know the oil business believe there is going to be a much greater shortage of supply relative to the demand in our future -- and as I said, the futures market is a sensitive barometer: not just because speculators can leverage their money ($1 invested can buy a contract worth 20 times as much because you essentially can borrow against the value of the commodity you own), but because of the law of supply and demand -- even small reductions in supply relative to demand (or increases in demand relative to supply) cause major price movements. A 5% drop in supply relative to demand can double the price if people *must* have the commodity. (Verify this by looking at the large increase in oil price relative to the small changes in supply versus demand in the last year.)

Think about those causes for oil price increases -- almost all are the result of government intervention. You might think the dominant cause is a decline in the supply of oil. No. Absolutely not. Contrary to popular opinion, proven reserves of oil are larger than they were 30 years ago (the last crisis in 1980 during the time of Jimmy Carter trumpeted a 10 year supply before we were out, dry, running on empty), and even in the absence of any new exploration today's supply will last us at least 15 years at present demand. (1980 reserves/consumption were 645 billion barrels / 64 billion barrels, and in 2007, 1.3 trillion barrels / 85.7 billion barrels. See, especially figures 33, 36 and 38.)

[Note, 7/7/08: the original link disappeared two weeks after posting this, when the 2008 DOE energy report was released. The new report highlights are all that is available right now, and don't show the excellent graphs in the full 2007 energy report. After much searching, I found a hidden link for it at]

Despite what you may have heard or read, proven reserves / demand continues to increase. New methods of recovery continue to increase the output of old fields, and new fields are discovered in places never before anticipated. Old fields have even been found to be replenishing themselves in unknown ways at surprisingly high rates (in the Gulf). (There is currently a sort of renaissance in the theory of where oil comes from: old theories based on the conversion of fossilized plants -- ie, the source of the term "fossil fuels" -- are being proven wrong time and again as oil is found in places fossilized plants should never have existed.)

And technology is unleashing new sources. For instance, and not included in those figures above, Colorado potentially has enough shale oil to replace the entire world supply of conventional oil, at only $50 per barrel (once inconceivably expensive!), using processes such as Shell has developed -- but not as long as they are on a leash that requires dozens of government permits (something like 70) and 7 years to complete -- with unlimited future potential litigation costs from frivolous lawsuits against the "impact" they might have on the environment.

What's in our future? Look around you: think like a futures trader. The future is more government intervention in every direction you turn: Obama, McCain (who cast the deciding vote against ANWR drilling), the Saudis, the Iranians, Chinese, Russians, Venezuelans, the U.S. Congress, and a gamut of pundits on the Left and the Right (though not all on the Right, almost all on the Left) now asking us to kill the messenger -- the "speculators" -- as those same pundits call for more and more government invention to halt the speculation (and as, I bet, many of them are secretly hedging their own bets on the futures market -- they aren't the complete fools they sometimes appear to be).

This is like (as Ayn Rand eloquently stated in her book "Capitalism, the Unknown Ideal") putting a penny in the fuse box: kill the speculation -- prevent those who know from anticipating future supply and demand -- and you lose your means of preventing a catastrophic short circuit.

Make no mistake: even in the presence of massive government intervention and disruption of the oil market (and surely, no market is more disrupted by governments) speculators in the free market, in simply pursuing their self-interest to make a buck, perform an invaluable function by stabilizing these oil markets as much as possible against all the do-gooding (and not-so do-gooding) interference, trying to calm the chaos created by the politicos -- telling us (in effect): look ahead; DANGER; plan ahead for what the future portends.

In the absence of a futures market -- in the absence of speculators -- what we're experiencing today will be vastly worse. $4 a gallon gas to drive your car 30 minutes to work? Soon you might not be able to afford to drive a moped to the corner grocery. Or heat your house in winter. Or buy groceries. If Obama is elected and super-majorities of Democrats in both houses get their way, if all the government intervention on our horizon comes to pass -- including behind-the-scenes manipulators, such as AlGore and his ilk -- and if the Republicans continue the last 8 years of fiddling while Rome burns biofuels under a wind turbine and eats corncakes -- we are going to see something much worse than today's $4 gas.

What the "speculators" (ie, anyone buying and selling futures) are telling us -- as they bid the price of oil up to $140 and beyond -- is this: they see no solution to our problems in sight. They are predicting a massive deficit of supply versus demand. They believe the Democrats (even if they, themselves, are Democrat) will continue to block any new oil drilling, any new refineries, any new technologies for producing more oil and delivering it efficiently to market, and will continue to promote and pass new legislation to attack imaginary bogeymen like global warming and "greedy speculators". They believe the Republicans (even if the investors, themselves, are Republican) have neither the will nor the ability to stop the Democrats from doing it. They believe either presidential candidate will make the problem worse.

The "speculators" are looking into their crystal ball of knowledge and trying to look into the future to make money and achieve their self-interest -- not guessing, not hoping, not divining mystically, but observing, analyzing, judging, evaluating -- and then putting their money where their brains are. They're betting a *lot* of money on those judgments -- literally, trillions.

If you accept those judgments (apart from any other political ideals these people may hold) as being honestly driven -- and I think on the whole, you have to, because someone willing to bet so much money on it has some confidence in his judgments -- what do today's high oil prices on the futures market tell you?

To be scared. The future we face from the devils and fools who want vastly increased government interference in the energy markets could be taking us down the road towards global depression in the very near future, and possibly worse. (What does the competition for a desperately needed commodity and very insufficient supply breed?) The only solution is to get government everywhere out of the business of "energy policy" and let a truly free market operate to produce more oil -- whereever it can be found.


June 16, 2008
Top 10 reasons to blame Democrats for soaring gasoline prices

By William Tate

This started out as an attempt to create a light and humorous, Letterman-esque Top 10 list. But the items on the list, and the drain Americans are seeing in their pocketbooks because of Democrats' actions (sometimes inaction) are just too tragic for that.

10) ANWR If Bill Clinton had signed into law the Republican Congress's 1995 bill to allow drilling of ANWR instead of vetoing it, ANWR could be producing a million barrels of (non-Opec) oil a day--5% of the nation's consumption. Although speaking in another context, even Democrat Senator Charles Schumer, no proponent of ANWR drilling, admits that "one million barrels per day," would cause the price of gasoline to fall "50 cents a gallon almost immediately," according to a recent George Will column.

9) Coastal Drilling (i.e., not in my backyard) Democrats have consistently fought efforts to drill off the U.S. coast, as evidenced by Florida Rep. Debbie Wasserman Schultz's protestation against a failed 2005 bill: "Not only does this legislation dismantle the bi-partisan ban on offshore drilling, but it provides a financial incentive for states to do so."
A financial incentive? With the Chinese now slant drilling for oil just 50 miles off the Florida coast, wouldn't that have been a good thing?

8) Insistence on alternative fuels One of the first acts of the new Democrat-controlled congress in 2007 was an energy bill that "calls for a huge increase in the use of ethanol as a motor fuel and requires new appliance efficiency standards." By focusing on alternative fuels such as ethanol, and not more drilling, Democrats have added to the cost of food, worsening starvation problems around the word and increasing inflationary pressures in the U.S., including prices at the pump.

7) Nuclear power Even the French, who sometimes seem to lack the backbone to stand up for anything other than soft cheese, faced down their environmentalists over the need for nuclear power. France now generates 79% of its electricity from nuclear plants, mitigating the need for imported oil. The French have so much cheap energy that France has become the world's largest exporter of electric power. They have plans in place to build more reactors, including an experimental fusion reactor.

The last nuclear reactor built in the United States, according to the US Dept of Energy, was the "River Bend" plant in Louisiana. Its construction began in March of 1977.

Need I say more?

6) Coal "The liquid hydrocarbon fuel available from American coal reserves exceeds the crude oil reserves of the entire world," writes Dr. Arthur Robinson in an article on The U.S. has approximately one-fourth of the world's known, proven coal reserves. Coal would be a proven, and increasingly clean, source of electric power and--at current prices--a liquified fuel that would reduce our dependence on foreign oil. Yet Dems and their enviro friends have fought, and continue to fight, both coal-mining and coal plants.

5) Refinery capacity "High oil prices are still being propped up by a shortage of refinery capacity and there is little sign of the bottleneck easing until 2010," according to Peak Oil News. And, while voters in South Dakota have approved zoning for what could become the first new oil refinery in the United States in 30 years, the Dems' environmentalist constituency vows to oppose it, just like environmentalists opposed the floodgates that could have saved New Orleans from Hurricane Katrina.

4) Reduced competition With consolidation in the oil industry, has come reduced competition. Remember, most of the major oil company mergers -- Shell-Texaco, BP-Amoco, Exxon-Mobil, BP-ARCO, and Chevron-Texaco -- happened on Clinton's watch. The number of oil refiners dropped from 28 to 19 companies during Clinton's two terms.

3) The Global Warming Myth At a Group of 8 meeting this week, host and Japanese Economy, Trade and Industry Minister Akira Amari "described the issues of climate change and energy as two sides of the same coin and proposed united solutions ... to address both issues simultaneously". As a result of Global Warming hysteria, the Al Gore-negotiated Kyoto Protocol created a worldwide market in carbon-emissions trading. Both 2005 --the year that trading was initiated--and this year --when the trading expanded dramatically -- saw substantial and unexpected price spikes in the cost of oil, leading us to reason Number...

2) Speculation "Given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices ... it is more likely that as much as 60% of the today oil price is pure speculation," writes F. William Engdahl, an Associate of the Centre for Research on Globalization. According to a June 2006 US Senate Permanent Subcommittee on Investigations report, US energy futures historically "were traded exclusively on regulated exchanges within the United States... The trading of energy commodities by large firms on OTC electronic exchanges was exempted from (federal) oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000." The bill was signed into law by Bill Clinton, in one of his last acts in office.

1) Defeat of President Bush's 2001 energy package According to the BBC, "Key points of Bush('s 2001) plan were to:
-Promote new oil and gas drilling
-Build new nuclear plants
-Improve electricity grid and build new pipelines -$10bn in tax breaks to promote energy efficiency and alternative fuels
A New York Times article, dated May 18, 2001, explained:
"President Bush began an intensive effort today to sell his plan for developing new sources of energy to Congress and the American people, arguing that the country had a future of 'energy abundance if it could break free of the traditional antagonism between energy producers and environmental advocates.

Mr. Bush's plea for a new dialogue came as his administration published the report of an energy task force containing scores of specific proposals... for finding new sources of power and encouraging a range of new energy technologies." [The Bush plan] "mentions about a dozen areas including land-use restrictions in the Rockies, lease stipulations on offshore areas attractive to oil companies, the vetting of locations for nuclear plants, environmental reviews to upgrade power plants and refineries that could be streamlined or eliminated to help industry find more oil and gas and produce more electricity and gasoline."

The article went on to quote some rather prescient words from the President, "this great country could face a darker future, a future that is, unfortunately, being previewed in rising prices at the gas pump and rolling blackouts in the great state of California" if his plan was not adopted in 2001.

The Times account continued:

"Mr. Bush talked not only of blackouts but of blackmail, raising the specter of a future in which the United States is increasingly vulnerable to foreign oil suppliers...Mr. Bush was praised by many groups for laying out a long-term energy policy. His report contained 105 initiatives..."

Just as President Bush's predictions have been born out, the article quoted from that most sage of Democrats, former President Jimmy Carter:

"World supplies are adequate and reasonably stable, price fluctuations are cyclical, reserves are plentiful," he (Carter) argued. Mr. Carter said "exaggerated claims seem designed to promote some long-frustrated ambitions of the oil industry at the expense of environmental quality."
But, as a later Times article notes, "the president's ambitious policy quickly became a casualty of energy politics and, notably, harsh criticism from Democrats enraged by the way the White House had created the plan."
In other words, Democrats refused the President's plea to "break free of the traditional antagonism between energy producers and environmental advocates."

Remember that the next time you pull up to the pump ... or the voter's booth.

William Tate is a former award-winning journalist and the author of the new ovel, A Time Like This (

Saturday, June 7, 2008

War of Ideas vs. PSYOPS

[Note to author Ed Cline...]

Read your "War of non-Ideas" piece in Rule of Reason (, for everyone else). I kept reading about that "Leiter" fellow and thinking "Felix". But I like Leiter reading.

Here's some stuff for you, which I gathered a couple weeks ago while doing some research. Upshot: Official U.S. government law and policy, by legislation (1948), presidential directive (several since then) and institutional decisions, is that any kind of "psychological operations" (aka, "psyops"), of which a "war of ideas" definitely falls under, is prohibited if it can influence an American audience in any way. Ie, if a propaganda leaflet is dropped in Afghanistan, and if it can make it's way back to the North American continent, in theory those leaflets are not allowed.

Now the practical fact of the matter: There isn't a single bit of "psyops" that could be practiced under this policy, so it gets overridden all the time by bureaucratic fiat. Authority for psyops wends it's way up the chain of command for approvals, sometimes all the way to the president -- psyops are reviewed at each level, and decisions are made... the more controversial the operation, the higher the level of review, but practically, in the military, it stops at the lower levels with approvals for routine psyops, such as telling Mohammed that he is going to die in vast numbers if he doesn't surrender, or the trite stuff like pamphlets that exhort American virtues to foreign audiences, such as, "Americans love camel jockeys -- come work with us in building a better Iraq." Etc.

But the same policy applies to the entire U.S. government -- including State and FBI (ie, Michael Leiter and company), etc. State usually tries to usurp anything beyond routine (they see themselves as the "keepers" of deeper ideas), and the psyops gets relabeled "public policy" as a means of avoiding the statutes and directives for anything controversial.

You can see how a "war of ideas" as practiced by the U.S. government is almost impossible, then -- the military won't take the risk of instituting a "war of ideas" that could find some left-wing lawyer sticking his nose up their butts and prosecuting them down the road, and the State Department won't wage a real war of ideas cause they are in sympathy with the enemy. Not that most of the guys in any department *know* the right ideas to promote or how to promote them.

(The closest is educational exchange programs as means to "cultural awareness", but then, they send these people to schools in the U.S that teach explicit anti-Americanism, so.... Could sending an innocent foreign student to an American university be considered basis for a charge of treason against the State Department official who authorized it, or is it simply a crime against humanity? What to do, what to do. The mind boggles at the conflict.)

That leaves the "war of ideas" (one of the great oxymorons, in the hands of the Feds) to be implemented (if at all) as a series of post-modern and altruist bromides: "America respects other cultures", "America wants to help". "America hands out candy bars to your kids -- please love us", "America will dole out massive amounts of foreign aid if you work with us", yadayada ad-barfing-nauseum. While the acolytes of Mohammed are laughing themselves all the way to the next suicide bombing.

I copy below a few key excerpts that I pulled out of some documents (links at bottom -- they're too big to attach); that said, I don't have docs more recent than 2003, but I've heard the policy has officially changed, classified. I doubt it's any more effective, though.

Interestingly, I think some of this stuff is applicable to the promotion of intellectual ideas, in a very crude and sometimes metaphorical way, though mostly, they could learn a lot more about effective psyops if they studied Objectivism.


(Most of this comes from official U.S. government documents. Sorry for not providing reference document and page number -- this was rapidly collected in the middle of the night. As I said, links are available below. Added emphasis is always mine.)
"To seduce the enemy’s soldiers from their allegiance and encourage them to surrender is of especial service, for an adversary is more hurt by desertion than by slaughter." Flavius Vegetius Renatus, The Military Institutions of the Romans, c. 378 AD

"An adversary who feels inferior is in reality so." Field Marshal Carl Gustav, Baron von Mannerheim, in The Memoirs of Field Marshal Mannerheim, 1953

"There are but two powers in the world, the sword and the mind. In the long run the sword is always beaten by the mind." Napoleon Bonaparte

"If you are going to win any battle, you have to do one thing. You have to make the mind run the body. Never let the body tell the mind what to do... the body is never tired if the mind is not tired." General George S. Patton, US Army
"Strategic Psychological Operations (PSYOP) International information activities conducted by US Government agencies to influence foreign attitudes, perceptions, and behavior in favor of US goals and objectives during peacetime and in times of conflict. These programs are conducted predominantly outside the military arena but can utilize Department of Defense assets."

"PSYOP are used to conduct counterpropaganda, induce or reinforce attitudes and behavior to friendly objectives, and discourage support for adversaries and their goals…

"the primary purpose is to influence the emotions, motives, objective reasoning, decision making, or behavior of the foreign target audience (TA)."

"Countering adversary propaganda, misinformation, disinformation, and opposing information to correctly portray friendly intent and actions, US forces want to face an adversary that is both unsure about its cause and capabilities and sure about its impending defeat — an adversary who, even if unwilling to surrender, has little will to engage in combat."

"In peacetime, IO [Information Operations, ie, psyops] support national objectives primarily by influencing foreign perceptions and decision making. …IO contribute by taking advantage of information technology, exploiting the growing worldwide dependence upon automated information systems and near real time global dissemination of information, to affect adversary decision cycles with the goal of achieving information superiority.

[Goals of PSYOPS:]

  • Mobilize popular support for US and multinational military operations... ;
  • Gain and sustain popular belief in and support for US and multinational political systems (including ideology and infrastructure) and political, social, and economic programs;
  • Attack the legitimacy and credibility of the adversary political systems
  • Publicize beneficial reforms and programs to be implemented after defeat of the adversary;
  • Shift the loyalty of adversary forces and their supporters to the friendly powers;
  • Deter adversary powers or groups from initiating actions detrimental to the interests of the US, its allies, or the conduct of friendly military operations;
  • Promote cessation of hostilities to reduce casualties on both sides, reduce collateral damage, and enhance transition to post-hostilities
  • Modify the behavior of selected target audiences toward US and multinational capabilities;
  • Counter hostile foreign psychological operations efforts;
  • Amplify economic and other nonviolent forms of sanctions against an adversary;
  • Undermine confidence in the adversary leadership...

"Persuasive Communications [one kind of "psyop"]: All communications that systemically convey information with the intent of affecting the perceptions and behaviors of the foreign TA are persuasive communications. These communications will interact with individual beliefs to change or reinforce attitudes and behaviors.

[You got that? "interact with individual beliefs to reinforce attitudes and behaviors". B.F. Skinner's legacy. We're all rats in a maze looking for a carrot. No wonder the "war of ideas" is a joke.]

"PSYOP production is the transformation of products into media that are compatible with the way foreign populations are accustomed to receiving information. Production is not just the technological transfer of script to media, but the study, refinement, and application of media technique, language, journalistic style, theater, art, music, visual cues, and media format.

[You see that it pretty much covers *anything*.]

"Psywarriors have found that ‘the truth is the best propaganda,’ says [Colonel] James Treadwell, the 4th [Psychological Operations] Group’s commander. Otherwise, ‘you lose credibility,’ he explains, and the audience tunes out."

[This guy is close to getting it... but what is "truth" to him? "Pravda"? ]

"PSYOP Themes, Activities, and Symbols should be based on a thorough analysis of targets, including friendly and adversary PSYOP capabilities, strengths, and weaknesses.

"The medium or media selected for transmission or dissemination should be relevant, reliable, and readily accessible by the intended foreign TAs.

[We do a lot of TV broadcasting overseas, by the way. "Commando Solo". We send a tricked up C130 overhead pumping out a megawatt of power that overwhelms any local transmissions, and people get to see specialized American programming instead of the Friends of the Lonesome Goat hour.]

"the Information Operations Roadmap oversight panel [2003] directed "improvements . . . to rapidly generate audience specific, commercial-quality products into denied areas" and a "focus on aggressive behavior modification at the operational and tactical level of war."

"The International Public Information [IPI] System is designed to "influence foreign audiences" in support of US foreign policy and to counteract propaganda by enemies of the United States. The intent is "to enhance U.S. security, bolster America's economic prosperity and to promote democracy abroad," IPI control over "international military information" is intended to "influence the emotions, motives, objective reasoning and ultimately the behavior of foreign governments, organizations, groups and individuals." …IPI activities "are overt and address foreign audiences only" while domestic information should be "deconflicted" and "synchronized" to avoid contradictory messages.

"The objective of IPI is to synchronize the informational objectives, themes and messages that will be projected overseas . . . to prevent and mitigate crises and to influence foreign audiences in ways favorable to the achievement of U.S. foreign policy objectives."

"The information distributed through IPI should be designed not "to mislead foreign audiences" and that information programs "must be truthful."

[Which pretty much goes against a lot of war-time psyops (ie, scare the bejeezus out of the enemy by any means), but this is more for the State Department level. (U.S. Information Agency, etc.)]

"The new information policy will not be used to influence the American public… since foreign media reports are frequently reflected in American news media, it will be impossible to entirely preclude a backwash of the IPI-generated information into America.

"The U.S. government is legally prohibited from conflating these operations by targeting PSYOP activities--intended for foreign audiences--at the American public. 22 U.S.C. § 1461 (Smith-Mundt Act:, which created the United States Information Agency (USIA) in 1948, directs that information about the United States and its policies intended for foreign audiences "shall not be disseminated within the United States, its territories, or possessions".

"Amendments to the Smith-Mundt Act in 1972 and 1998 further clarified the legal obligations of the government's public diplomacy apparatus and several presidential directives, including

Reagan's 1983 NSD-77 (,

Clinton's PDD-68 in 1999, and

Bush's: NSPD-16 ( in July 2002 (the latter two still classified),

have set up specific structures and procedures, as well as further legal restrictions, regarding U.S. public diplomacy and information operations.

"President Clinton's secret Presidential Decision Directive: PDD-68 (, issued on April 30, 1999, expanded public diplomacy and public affairs operations beyond USIA and the Department of State to include all agencies and set out the objective of IPI "to synchronize the informational objectives, themes and messages that will be projected overseas . . . to prevent and mitigate crises and to influence foreign audiences in ways favorable to the achievement of U.S. foreign policy objectives." (PDD-68 also cautioned against using the new information operations to influence the American public, but recognized the potential for "backwash" of IPI information to the United States and so called for coordinated domestic and foreign public affairs operations to synchronize foreign policy messages.

"Presidential Decision Direction PDD 68 ordered top officials from the Defense, State, Justice, Commerce and Treasury departments and the Central Intelligence Agency and FBI to establish an IPI Core Group… to "assist [U.S. government] efforts in defeating adversaries." "The intelligence community will play a crucial role . . . for identifying hostile foreign propaganda and deception that targets the U.S."

[And of course, the net effectiveness so far is somewhere between zed and zilch.]

"The newly-released Information Operations Roadmap, with the goal of expansion and central coordination of Pentagon PSYOP and public diplomacy operations, also recognizes the legal conundrum presented by the use of overseas propaganda in the information age. But while the document recognizes the need for boundaries-referred to as "[l]anes"-between U.S. public diplomacy and foreign propaganda, it fails to provide any such limits:

"The likelihood that PSYOP messages will be replayed to a much broader audience, including the American public, requires that specific boundaries be established for PSYOP. In particular:
22 U.S.C. § 1461 (Smith-Mundt Act), which created the United States Information Agency (USIA) in 1948, directs that information about the United States and its policies intended for foreign audiences "shall not be disseminated within the United States, its territories, or possessions."

[Anyway, you get the picture -- psyops is all-encompassing in scope, and policy and law are massively contradictory.] is a comprehensive link from which a most of these docs can be found, along with a reasonable overview.

Other selected links: