James L Bradley Kanook February 11th, 2012

I happened to glance at an article yesterday about sustainable development in our economic growth, this with protecting our vital resources, where it stated were on the path to resource doom. Now whether you or I agree with that is not really the question but the questions I put forth in the following are, but just to touch a bit on sustainability the narrative states we must develop new technologies that are guided by shared social values. In other words wed better get off our fossil fuel diet, whereas the author (quoting UN sources) maintains our present consumption is were each human alive today is dumping some 4 tons of CO2 into our pristine atmosphere every year and at 7 billion plus that is a lot of CO 2 and this isnt counting our blowing of harmful gas after a good plate of beans. Keep in mind that CO2 makes up 0.039% of our atmosphere and methane around 0.000179%, in other words it will take a lot of breathing and plates of beans to change that ratio. In all this it appears that somewhere along the line we have strayed from the concept that our Universe is eternal, whereas good old science tells us it doesnt have the ability to sustain itself due to the law of entropy. If you have studied science a bit more in detail, as some of you have, you would have learned that Albert Einstein confirmed that space, matter, and even time itself all had a beginning, and even time is not eternal. And Sir Stephen Hawking admits that the Universe came from nothing but he believes that nothing became something by a natural process yet to be discovered. Wait, is that really rational thinking, nothing from nothing to something! Where in my way of thinking natural laws and processes do NOT have the ability to bring something into existence from nothing that is

unless your printing money for disposal by our financial industry, where even they have to reach somewhere to get the paper. In my book anyone who claims that the level of complexity and the order of life, such as the Universe happened by chance automatically assumes the burden of proof granted many atheists firmly believe they have NO burden of proof simply because they are NOT claiming the existence of something. Which is about as far sideways as anyone can dance where they are claiming were here by chance and in doing so expect that everyone accept their claim based on their faith - because they cant prove it. What is very difficult for some of us to grasp is the God doesnt need a beginning, where science shows us that the Universe does require a beginning make sense. Let us take a look at this sustainability! Albert Einstein confirmed that space and time are just as physical as matter, in this we find that space and time can be altered by gravity and that space produces particles, in other words although space cannot be felt, space is actually something and is NOT nothing. Space it is noted can be stretched and manipulated, whereas Alberts equations show that the Universe cannot be eternal, it had to have a beginning by-the-way, Albert in the dimming light of the evening around the dinner table stated he believed in the existence of God simply because of the origin and order of the Universe, personally he didnt believe in a personal God such as some followers of various religions, but his belief pointed to the existence of an all powerful and intelligent Creator. Big Bang scholars extrapolate a hypothetical scenario from a few facts, such as some galaxies are expanding, and moving away from our point of observation, yet there are galaxies in the Universe that are running perpendicular to the rest of the galaxies this doesnt fit within the Big Bang concept. If the Big Bang really happened there should be a uniform distribution of gasses, this uniform distribution of the gasses would have made sure the gasses would NOT have coalesced, due to gravitational attraction into planets and stars this in my opinion is a scientific fact based on the present make up of space today, what if it were different a few microseconds after the primary snap of the fingers. In addition the hypothesis of dark matter providing sufficient gravitational force has recently run afoul

where over the past few years our boys and girls scanning the heavens have found galactic structures so massive that even if cold dark matter did exist, it would not account for their formation. Further more, an explosion cannot explain the precise orbits and courses of thousands of billions of stars in thousand of billions of galaxies, where an explosion left to its own is about as chaotic as anything I understand - with the exception of a few lady friends Ive had on this trip through the cosmos. Although gravity goes a bit in explaining how order can be found in the precise course of trillions of stars, it cannot explain the origin of that order. In other words, did all the trillions of star sit own at lunch, draw up an agreement to stay our of each others way in this it is natural to assume that anything by chance will create disorder, while order is because of design. Design, imagine if you can finding a planet where robots are programmed to make other robots such as themselves from raw materials, dip a little deeper into your imagination and see an alien scientist visiting the planet, and after a period of studying the robots going about their business, reach a conclusion that since science can explain how these robots work, operate, function and reproduce there is NO reason to believe there was an intelligent designer behind their actions who put the first robot together and wrote the program? Both sides of the issue are open to debate, in science we base our knowledge on observation, since no one observed the Universe coming by chance or by design or by creation or evolution both positions are anchored on faith. Therefore the issue is which faith the evidence best supports, we know that natural laws can explain how a ship floats or living cells function, but it is very irrational to believe that mere un-directed natural laws can bring about either. Whereby it is once you have a complete and living cell then the genetic code and mechanisms exist to direct the formation of more cells whereas the original question remains in how did that first cell originate when NO directing code and mechanism existed? Answer it yourself, but first consider just because something exists in nature does NOT mean it was invented or made by Nature science has demonstrated that if all the chemicals that make-up a cell were left to themselves, Mother Nature would have no ability to re-organize them into a cell again whereas

it takes an already existing cell to bring about another cell. Think, the cell exists and reproduces in nature, but Nature didnt invent or design the cell. Now that I have that out-of-the-way, let me walk back into global sustainability It is a supreme article of faith that our Blue Marbles trade will be an ever increasing item in the world, albeit this faith is based on some pretty shaky foundations, whereas for global trade to be sustainable we need cheap, longdistance transportation or some Star Trek technology. We all understand that transportation costs will rise with climate change or the threat of climate change, whereas the end of cheap energy is just around the corner. In this simple fact we find the sustainable (weak as they presently are) economy of some developing nations faced with a situation were increased freight costs will be extremely sour news for the developing nations a foregone prediction that sooner than we expect there will be a decrease in outsourcing manufacturing and food production as the cost of transporting the raw materials or the finished product to markets that can afford the increased natural rise in the cost of the products. In other words not too far in the future transportation costs will outweigh traditional sources of comparative advantage, such as lower wages. The long-distance supply-chain is not only being threatened by the higher cost of transportation, we have seen how are trade routes have been disrupted by disasters, such as the tsunami and nuclear accident in Japan which slowed auto-production in the USA, and how the Australian floods lowered the coal exports to China in this I believe that global production and distribution is more vulnerable that most of us would like to admit. It is true that up to now we have adapted to similar disruptions and our global trade has continued to expand just as it is true we havent faced any real brick walls of trade disruption. In a word the current physical volume of trade is unsustainable. In the not to distant future goods will have to be manufactured closer to where they are consumed, causing supply chains to become more regional and local. Petroleum and other transport-intensive products, such as imported food, clothing, appliances and building supplies will become hyper

expensive, creating different lifestyles while decreasing the purchasing power of the consumers, developing countries that havent developed their own inborder demand (such as China) will suffer because of the changes. China, like other countries in the Far East that are depending on their exports to purchase the imported commodities they need will need or must become more self-reliant in obtaining their basic needs. Take the one high-demand item, crude-oil that jumped from US $28 a barrel in 2003 to over $147 during the summer of 2008 causing 20 airlines (most of them regional freight carriers) to close their doors, and across the board fuel costs rose from 15 to 35% in an airlines operating expenses. Lately (2011) airlines increased their fares four times to adjust for increasing oil prices. This increase in fuel also affected the cost of trans-Pacific shipping of a standard container, which went from $3,000 to $8,000 in 2007-2008, and in 2010 with oil at 50% the price of 2008 the Danish shipping company Maersk cut its cruising speeds by 50% reducing their fuel bills. On average every $1 per barrel increase in crude-oil prices results in a 1% increase in transportation costs. It doesnt take a rocket scientist to realize that as global economic growth resumes, the overall demand for oil will increase even with our struggling global economy today the IEA is predicting a 2.5 million barrel per day increase in demand, a figure that will be calculated on 2011 averages yet is still the biggest increase in 30-years. Where a couple of years ago China was expected to increase its demand by 10%, they have far outstripped that 10% with their economic growth and coal shortages and with the recent decisions in Japan and Germany to decommission nuclear power plants their new requirements for power will increase the demand for diesel fuel. There are a number of factors that will limit our oil supply to keep up with the demand and create price stability, take deepwater drilling which because of the Deepwater Horizon debacle will more likely become more expensive (at least in American waters) because of increased regulations and much higher insurance costs keep in mind our oil guys have predicted that by 2020 25% of the worlds supply will come from deepwater oil wells. Another looming factor is the failure (and not only in the USA) on upstream fuel production facilities will make the supply crunch worse than it was in 1973.

And by all means let us not forget the political unrest in the oil-rich Middle East where the least little political whiplash jerks the price of oil up through the roof. What do you expect the price of a barrel to climb to when our oil flow rates hit a maximum and start the rapid downward spiral, albeit predictions of the date of the peak oil range all over the place they generally state that sooner than later the oil production in Saudi Arabia, Mexico, Canada and Venezuela will all peak around the same time, this as their local demand is expected to rise significantly take the North Sea the UKs oil supply, the World Energy Outlook in 2010 said that exporters like Indonesia and the United Kingdom would become oil importers, and the latest predictions are that global conventional oil production is expected to decline from 70 million barrels a day to less than 16 million in 2035yes, yes I know weve heard that before and yes I understand that tar sands are the next unconventional source for picking up the slack, keep in the back of your head that the unconventional extraction of oil is expensive. look at the future, transportation costs are going to go up! Sustainability in electricity is being eaten away where power shortages and rising prices will dramatically change the pattern of global trade and create busted supply chains. Today we all understand that low-wage exporting economies are generally mush LESS energy efficient than high-income industrial economies, a good example is China were as the electric rates climb to a higher level because of higher fuel costs for coal and oil, production costs will increase faster in their low-wage economy experts tell us, Chinas use of energy per unit of gross domestic product is 3X that of the United States, 5X of Japan, and 8X compared to Britain. Translation, rising coal, oil and electricity prices will erode the comparative advantage of the low-wage exporters. Then we have the climate were drought and lower river flow in China reduced the hydroelectric power production in their export-oriented scenario, were reduced rainfall in agricultural regions forced them to divert water from the Three Gorges Dam for electric production for irrigation, and in Pakistan textile production was curtailed for the same reason, along with oil refining in Venezuela and appliance manufacturing was reduced in China. In May 2011 Any way you

it was reported that Businesses in coastal areas and some inland provinces have grappled with power cuts and full blackouts since March due to surging demand and a drop in hydroelectric output, unfortunately China needs to feed their people before shipping handheld digital devices overseas. In addition it was the massive floods in Australia that cut their exports of coal to China putting more pressure on the Chinese electric supply. Granted manufacturing can supplement some of the hydroelectric shortages with their backup gasoline or diesel generators, this only the case if they can afford the fuel cost, and are just out of luck if they cant or if there is no fuel available. Normal practice in most countries meets the demand of other organizations before they release supplies to the manufactures, such as computer operations (communications), hotels, hospitals, refrigeration and like Pakistan there are some countries that simply do not have sufficient foreign exchange to import large quantities of expensive fuels. Along with the shortage of electricity, climate change has been giving birth to some pretty massive storms, such as hurricanes and typhoons that seriously effect low-lying coastal regions, disrupting rail commerce, airports, and damage some oil and gas pipelines, flood and rip up highways all-in-all causing a serious impact on the transport of goods. Economically the insurance rates have increased in these regions as flood damage is leading the pack when it comes to damage caused by the storms. Consider, 40% or better of the U.S.-China supply chain consists of roads from the factories to the ports and then from the ports to the fingered distribution networks common sense tells you that if this 40% is disrupted the cost of the goods are going to rise all the way up the chain until it taps your pocketbook, an increased level of heat will reduce engine efficiency, increase the refrigeration demands, all tied into an increased demand for that stuff that makes it all click. In a word or two, climate change is not only expected to interrupt and slow freight transportation, it has already shown its effects and we now understand transportation will be more expensive. As mentioned previously we know there are substitutes for conventional oil: coal-to-liquid conversion, gas-to-liquid conversion, corn ethanol and other bio-fuels, hydrogen, tar sands and shale oil, although many are technically feasible they all suffer from one or more problems. Besides needed huge

amounts of investment, they need a long-lead time for production, along with some needed subsidies (tax breaks or cold hard cash from the governments) that unless these are put in-place the cost of a barrel of the finished product will be very high. Then there are the environmental problems, and in some cases an increase of what we call greenhouse gases, and the extreme consumption of freshwater in the production process and the required highenergy demand. Energy experts estimate that even if a crash mitigation program that begins when the peak oil spike occurs there will be at least a 3-year-lag before these alternative methods noticeably affect our fuel supply and a complete restoration to the peak oil consumption would take another 20years or so. In this assumption it is safe to say that current supply constraints leading to the loss of cheap oil and the lack of serious policy discussion, that investment in alternative sources will NOT be sufficient to significantly replace our diminishing oil supplies in the decades ahead in other words even feasible technologies will NOT prevent higher fuel costs or help fuel supplies for global transport. Interestingly, the only solution being discussed around the political tables today is to raise the taxes (carbon taxes, or cap and trade) forcing the consumer to cut consumption and emissions thereby hanging their hat on the generation of fear that the Earths climate will warm up if you go to the store more than once a day. It is understood that between science, technology and law (what most politicians base their livelihood) the interactions are becoming more complex, whereas science and technology evolve, risk assessments and the dialogue between scientists and governments must adapt. Indeed both sides must continually determine, before an extreme global trade disaster hits, whether existing laws (regulations) provide scientist and administrators with a clear, realistic standards for their analyses and public evaluation if not, then all remain complacent in their view of the future. Today our freight transport system is working under the shadow of out-date policies that are based on an incomplete somewhat fractured concept of CO 2 increasing our climate change, the argument being whether or not this gas is really causing the climate change. The IPCC in its infinite wisdom (and some

skullduggery) has convinced a body of rule makers across the globe of the impending doom caused by the consumption of fossil fuels, one example being that for each ton of jet fuel burned produces 3.2 tons of CO2 and when it comes to maritime shipping these transport vehicles burn a highly polluting petroleum product, bunker fuel which is pretty sludgy the IPCC scientists throw up their hands and scream the end-of-the-world is just around the corner. It is not going to be an easy task to cut the greenhouse gas emissions from long-distance freight transport, while maintaining the same ton-per-mile freight transport per year. Unfortunately there are NO low-carbon fuels with the same or better than performance characteristics, in either case being affordable and any substantial quantity available to replace bunker fuel for ships or jet fuel for air freight. In this it remains that the only way (our policy makers can initialize) is the high-penalties slapped on the use of these fuels, with their goal being to create incentives for better efficiency and for the creation of low-carbon fuels. It become evident that sooner than we expect given the lack of attention (in some circles) to the mitigation of peak oil and climate change that our current investment in the existing pattern of trade and the high costs of reorienting it, that any sort of change will be resisted, the result being widespread economic disruption. Change whether we accept it or not will happen, with the first indicator being the increased fuel costs and the higher transport risks, this in turn will cause supply chains to shorten and longdistance trade to decline a fact we already see happening. Evidence being that because of the 2007-2008 transport cost increases some manufactures have opened new furniture, steel and auto plants in the U.S. or Mexico to supply the U.S. market where in May 2001, VW inaugurated a huge Passat assembly plant in Tennessee, creating directly and indirectly 12,000 jobs, an action created because of rising freight costs and a depleted corporate bottom line. Manufactures are slowly realizing that they will have to relocate to be closer to their supplier of raw materials or the major markets to reduce their transportation costs. One such move was the change in U.S. steel production where some plants in the U.S. once more ramped up their production to cut

out China thereby importing iron ore from Brazil, rather than Brazil shipping its iron ore to China (cheap labor) and the U.S. buying its steel from China. Which proves the point that in countries such as China, that have below average employment wages, that just around the corner we find transportation cost off-setting the profits from cheap labor as a result these countries are beginning to feel the competitive crunch? It is natural that nations respond with protectionist policies to combat the change in trade patterns, take 2008 when food prices rose (extreme weather, corn ethanol production, and rising oil prices) that several grain-exporting nations banned exports of cereal crops. In June 2011 China banned the export of diesel fuel in order to have sufficient supplies to supplement their power generating capacity in the face of expected brownouts. It also becomes evident that nations will subsidize energy or manufacturing to preserve exports and in-country jobs albeit these bans are against provisions of the WTC an NAFTA they have and do exist. Again unfortunately there are at present few national and NO international policy responses to the imminent threats to global trade, although corporations have responded to the increasing oil prices with some changes in supply chains, national governments are quiet. Their push with negotiations to limit greenhouse gases is proving ineffective, mostly due to the skull-duggery of IPCC panel of experts who twisted their information to suit the politicians. There are only two countries that have identified oil depletion as key economic issues, the United Kingdom and Sweden, whereas trade policies such as the Korea and Columbia Free Trade Agreements with the U.S. are built on the assumption of cheap oil, low transportation costs and transportation-compatible weather patterns in simple words, business as usual. In some of our smaller local governments we do find a response that addresses the upcoming trade problems, where the communities are listening to the bottom-up concerns and are altering their way-of-life, buying locally made products as much as possible, reducing consumption and acquisition while increasing their self-sufficiency, communities re-introducing farming. one example being

Somewhere in the above we find a re-introduction of community land trusts, de-centralized alternative energy development, water conservation and reuse, local food production and locally oriented business networks. There is NO Good or Evil involved, it is a simple change for survival, albeit patterns of change will differ from place-to-place and that there initially will be unpredictable impacts on the societies, gradually well notice that the foreign nations who depend on foreign cash earned from commodity exports, or that import much of their food will suffer the consequences of any lack of change. If these regions do not change or adapt, when their exports are reduced by high-shipping costs their inability to be unable to support their local population will struggle in bringing their society on-line and competitive with those who embrace the change earlier. exports such as China and Malaysia. Business models such as Wal-Mart with its transoceanic supply chains will make less sense as the foundations of global trade are crippled by the highcost of transportation, this not being a policy of either ideology or politics but a simple fact as the increasing cost of trans-global trade bites into their bottom line. Global Trade will not disappear, but it will diminish and the supply chains will shorten, along with the importance of regional and local economies increasing where we will see the production for domestic consumption in the U.S. and other developed nations gaining in importance not seen since the 1 st half of the 20th Century. The security strategies will have to adjust to reflect the increased role of domestic production in domestic affairs, this said it is not possible that nations can simply set on their behinds waiting for the situation to change on its own, this would only make the inevitable change hard to implement in other words we should plan now for these changes remember, although crises brings more than trouble it also drags along opportunities. Some will take an extraordinary amount of time to adapt, especially those who depend heavily on foreign