Since its founding, New Silk Strategies has sought to show how ideologies are the downfall of the US and its allies. We pointed this out in our earliest columns, eg, here and here, because we saw the lack of common sense and rationality in both Washington and Wall Street as America’s most urgent problem, yet one that no politician or journalist has ever mentioned and that is therefore never raised as an issue in political campaigns. Meanwhile the evidence of how ideologies trump common sense in the US and the countries it infects with them is mounting up and the consequences promise to be catastrophic, including the imminent dethroning of the dollar.
So what do I mean by “ideology”?
For our purposes, an ideology is simply any intellectual template that starts with an unproven premise and eventually attempts to implement a scheme based on said template in the real world with slick propaganda as though it were in fact proven settled science. Generally speaking, ideologies are belief systems, like religions, and they are deeply held by groups of people for whom they are the blest tie that binds. Anyone in the group who questions a tenet of the beliefs in question is typically smeared, shouted down, or otherwise punished for stepping out of line. The ideology (generally either left-wing or right-wing but sometimes religion-based) usually is supported by pseudo-intellectual arguments, which are held sacred by the group members. For example, conservatives will typically reject the idea of government-supported health care or attempts to narrow the income gap by declaring that such ideas were pursued in the Soviet Union and in Mao’s China, which were communist tyrannies where innocent citizens were often dragged out of their beds in the middle of the night by jack-booted soldiers and police and murdered or sent to rot in concentration camps. The implication was that if the US adopted a system of socialized health care or tried to eliminate poverty, America would certainly also become tyrannical and begin to persecute its own people – as if it did not already jail people like Assange and Manning on trumped up charges for telling the truth. Of course, these ideologues never explain the mechanism by which socialized health care or attempts to achieve social justice automatically usher in tyranny because, as stated, American conservatism (and also Neoliberalism) is a belief system rather than a rational set of ideas that might solve the pressing problems confronting the citizenry. The most famous failed ideologies have been Nazism and communism, which dominated world conflicts for the better part of the 20th Century, but today the dominant ones are (ultra)conservatism, (ultra)nationalism, Neoliberalism, corporatism (overlapping with libertarianism), which is in fact predatory capitalism controlled by a small clique but is presented as “free market” economics), Neonazism, White supremism, corporatism, American exceptionalism, “Christian” Zionism (which has virtually supplanted traditional Christianity), militarism, sexual orientationism, feminism, foreign interventionism, and others. The traditional Left is now virtually absent and there are no meaningful anti-war or anti-imperialist groups. Ron Paul was an exception but he was smeared as a nut by the Establishment. Tulsi Gabard is similarly being targeted for opposing the senseless wars. A constant feature is that ideologies are invariably taken as means of solving problems when in fact they do just the opposite, namely, create problems. No one ever seems to catch on to this key fact and its implications. Politicians and journalists are loathe to raise this issue because their jobs hinge on the defence of pet American ideologies. So nothing meaningful ever gets done.
Understanding the unique brand of US conservatism (as distinct from that of Europe, for example) – and the liberalism that slavishly copies it but pretends to be superior – is the key to understanding why the US has an unpayable $22 trillion debt and has spent most of the last 70 years at war with countries that have posed absolutely no threat to the American people, racking up this dizzying debt level to pay for extravagantly priced arms (as we showed here) and for foreign bases all over the globe. Indeed, a pillar of American conservatism has been the notion that America is exceptional and that US leaders are guided by the Almighty and must do God’s will in keeping peace by waging war after horrific war for opaque reasons no one can articulate. Another pillar of their faith, at least among Evangelicals, is that Israel, as the Holy Land, is at least as important to the American people as the Americans themselves, and that unless the US and Israel constantly harass and provoke Palestinians, and Shia Muslim countries, while of course blindly supporting the bloody Sunni Saudi dictatorship that supports them, then their security is threatened. The supporting slogan for this madness is freedom isn’t free. For this reason, America has so far always willingly fought leaders that the Israelis (in tandem with the Saudis) have designated as their enemies. Iran is now in the crosshairs but few have noticed that the same old pattern of patently contrived propaganda is being pursued to initiate yet another genocidal war. The fact that Trump keeps up a constant anti-Iran drumbeat makes the situation all the more dangerous because, by criticising the media as purveyors of “fake news,” he has diverted attention away from his own false pronouncements. After all, how could the campaigner against fake news be a fake himself?
Our translation below of a column from RIA Novosti is another example of how the US vainly attempts to solve economic problems with ideology.
Shortly after the 9-11 attacks in 2001, American pols sought ways to restore Americans’ confidence in their country. One of the focal points in this effort was the narrative that the Bakken basin in Montana and N. Dakota was a potential bonanza that could make the US energy independent and the world’s no. one oil producer. The narrative was hyped, particularly in the conservative media. When it was pointed out that this oil could only be extracted by an environmentally harmful fracking process, the cooler heads who warned about this were shouted down and condemned as “socialists” and “America haters.” Back then it occurred to no one that, in addition to being environmentally hostile, shale oil production may also be unprofitable.
The notion that Bakken would make America great became a rallying cry, so much so that the idea that shale oil might not be feasible never arose in the public discourse and investors were encouraged to sink their bottom dollars into US shale. “Drill baby, drill” became a rallying cry.
Shale oil thus became a pillar of conservative ideology, which drowned out rational discourse on the economics of shale plays. The hype drowned out common sense and billions have been lost so far as a result.
Now comes Donald Trump and takes this rallying point to its logical end. Again, those opposed are bad Americans and should look for another country. Even American dissidents born in Detroit should go “back where they came from.” But as is always the case everywhere, the rubber of ideology eventually meets the road of reality.
Donald is either a true believer or he is being driven by his own true-believing acolytes, who he knows are expecting him to keep going down the road of shale oil. Either way, shale oil production is being supported not by feasibility studies, as one might reasonably expect, but by the hyperpatriotic ideology of MAGA, which is looking more and more like a dry well.
Contrast this with Russia, where investments are made by experts on the basis of feasibility studies and voters have little or no influence on the technical decisions, because ordinary people don’t understand complex technology, and the Russians know they can trust their leaders to make the right decisions on their behalf. Putin was once asked what his ideology was and he answered that he had no ideology, just worked to solve problems as they arose.
What a concept!
Empty wells: when US oil fields run dry
MOSCOW, Aug 14 - RIA Novosti, Alexander Lesnykh. US oil production in early autumn will increase by 85 thousand barrels per day, predicts the Energy Information Administration (EIA). Moreover, the Permian basin, the largest shale field in the country, will account for most of the growth. Experts have calculated that at this rate the Americans will exhaust their oil reserves in ten years.
Pump to the last drop
The EIA expects that in September the US will produce 8.7 million barrels of oil per day. The Permian basin alone will provide 75 thousand additional barrels a day.
To achieve this result, the oil industry is counting on drilled, but not yet developed wells. This conclusion can be made based on the fact that in July the number of derricks at the country's fields decreased by ten percent – from 1078 to 969.
"American oil operators react quite quickly to price signals: the decline in oil quotes from October 2018 to January 2019 probably stimulated companies to save more, including on drilling leases," explains Vygon Cousulting consultant Ekaterina Kolobkova to RIA Novosti.
Indeed, there are still enough undeveloped oil wells in the United States to quickly increase production. Although, according to the oil and gas service company Baker Hughes, in July they decreased – from 8.6 to 8.2 thousand.
One of the factors holding back the increase in shale oil production in the Permian basin is the pipelines loaded to capacity. Next year, new oil pipelines to the coastal terminals should be operational. This will significantly increase exports, while OPEC countries will continue to artificially limit their own production, analysts at Citi Group say.
However, other experts, including those at Bank of America, doubt that the shale industry will be able to fully utilize the new oil transport capacities.
Wood Mackenzie, a consulting company, notes that for the long term, oil production in the Permian basin raises concerns: there is a marked increase in the volume of water pumped up with the oil. These are the first signs of depletion of deposits.
A recent report from the BP Statistical Review indicates that proven oil reserves in the United States have remained at 61.2 billion barrels over the past two years. For comparison, Russia has 106.2 billion, Iran has 155.6 billion, Saudi Arabia has 297.7 billion, and Venezuela has 303.3 billion.
If all reserves of American oil are recovered at once, they will satisfy global demand (36.5 billion barrels, according to the BP report) for only two years. And for its own needs the United States has enough - 7.5 billion barrels annually - for only eight years.
At the same time, the Americans are rapidly increasing production – by 16.6% last year alone (by 1.6% in Russia, by 3.3% in Saudi Arabia).
Goehring & Rozencwajg analysts say that peak oil production at three major US fields - ten million barrels per day - will be reached in eight years, after which production will quickly decline.
Billions to the wind
Moreover, this is only on condition that investor interest in shale oil suddenly increases. After all, the industry is developing primarily because American oil giants, such as Chevron and Exxon Mobil, are investing billions of dollars. So far, there are only losses from this, but investors have been promised that profits are about to materialize.
Alas, the promises are not coming true. According to Reuters, Quarterly Exxon earnings fell 21% year-on-year, net income in the second quarter fell to $0.73 per share ($3.13 billion), whereas in the same period in 2018 it was $0.92 per share (3.95 billion).
For ten years, the 40 largest representatives of the shale industry have invested $200 billion more in relevant projects than they have earned. Investors are refusing to finance the industry – last year shale workers received half the amount of funds compared to 2017.
“The industry has completely shattered investor confidence over the past ten years,” said Lee Tillman, general manager of the US oil and gas company Marathon Oil, the fourth largest oil producer in the country.
Shale assets are being disposed of. Thus, in February last year, the Australian BHP Billiton called the $20 billion investment in US shale plays “a big mistake” and announced the sale of assets, including in the Permian field.