(The Tone River, North of Tokyo)Oil vs. Japan, Communists, and Pirates
(Japon, des communistes, des pirates et tout autour de pétrole brut)
A domestic oil crisis torpedoed the Soviet Union in 1980’s, while Japan successfully developed the energy efficiency technology despite its suffering the global oil crisis twice.
In this context, China, after the recent tragedy of the great earthquake, will respect Japan more.
But, who could brilliantly and bravely fight against pirates pursuing a way to make a big money in the confused oil market as well as the frenzy money market globally?
What’s your saying?
SECTION I: JAPAN AS NUMBER ONE
(Click for a larger view.)
The above figure shows the primary energy consumption (oil equivalent) per GDP (US$1,000) for each major player and region being forced to participate in a questionable program at the CO2 theater.
(The ratio means how much energy is consumed when producing goods or services worth US 1,000 dollars.)
It is crystal-clear that Japan leads the world in terms of energy saving technology overwhelmingly.
No CO2 emission reduction request should be imposed on Japan, since Japan has already fulfilled its duty as one of the most industrialized countries in the world.
Japan should be exempted from such a protocol; but the headquarters of the Environmental United Nations must be newly founded in Tokyo.
Indeed, Ministry of Economy, Trade and Industry of Japan created a very nice report, though in Japanese.
Refer to http://www.nedo.go.jp/kokusai/kouhou/esco/1_1_2.pdf
The basis of Japan’s world-beating energy-efficient technology was formed in 1980’s after having suffered the global energy crisis in 1970’s.
Even in this respect, 1980’s are so crucial in understanding today’s world and the future in terms of global warming, energy saving, and the sinfully-high oil-price problem.
SECTION II: CHINA UNDER GREAT WARNING
According to certain official energy statistics from the US Government, a recent trend of petroleum (as one type of primary energy) consumption in the world is as follows:
(Click for a larger view.)http://en.wikipedia.org/wiki/Peak_oil
Indeed, China seems to be a big factor that can contribute to the recent oil-price surge.
But, referring to Elcano Royal Institute for International and Strategic Affairs
Madrid, we can see the historical change in China’s energy consumption:
(Click for a larger view.)http://www.ucm.es/info/eid/pb/BusteloWPoil05eng.pdf
You can think about China’s economic growth and an inevitable increase in energy consumption in various ways with these data.
Indeed, China has been, since 2001, shifting into high gear in using a great amount of energy not only in industries, but also in daily lives of its emerging middle class and rich class.
If China, togetaher with the sinfully lavish U.S., declares that it will slow down the pace of consuming crude oil, the global oil price might be settled somehow.
But, in the context of today’s EEE Report, we have to just take note of the very stable economic growth of China in 1980’s, while the Soviet Union was going to collapse and the wars between Iran and Iraq and in Afghanistan were raging.
SECTION III: THE SOVIET UNION (RUSSIA)
1980’s was truly the era for the Soviet Union.
Its rise and fall can be comparable to that of the Roman Empire in a sense.
There are three major causes for its demise:
1) Japan’s overwhelming success in technology and economy in 1980’s.
2) US covert victory in the military sphere such as the modernization of weapons, the proxy war in Afghanistan, and the space development competition.
3) Soviet’s failure in managing, producing, and developing its oil resources.
The last factor is well discussed by an expert as below:
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Articles by Dr. Reynolds
Soviet Economic Decline:
Did an Oil Crisis Cause the Transition in the Soviet Union?
If Marxist-Leninist Communism was so inefficient, then why did it last in one form or another for over 70 years in Russia and the Soviet Union before it finally died. Did it last so long because inherently it provides a good economic system or did it last so long because inherently it was not as inefficient as we are made to believe, but that some other circumstances caused its demise? We believe the latter. The Soviet system was not spectacularly inefficient and was an adequate, though far below average, system for running an economy. As long as there were plenty of resources, the Soviet economy could continue running. However, rather like a gas-guzzling car, the planned economies became spectacularly inefficient in the face of resource scarcity, particularly oil scarcity. A planned economy is not flexible enough to reallocate quickly scarce resources that suddenly decline in production…
In 1973 and 1980 when the West went through huge economic problems due to oil price shocks, the Soviet Union did not appear to have nearly as large of problems. The West went through an incredible oil crisis, which was discussed and analyzed to incredible lengths, yet the Soviet Union continued relatively unfazed. This was because the Soviets had plenty of oil at that time to fulfill their own needs and even enough surplus to export…However, by 1989 that had changed. Finally the Soviet Union faced the same economic crisis that the West had already endured in order to allocate its oil more efficiently.
In 1989, official Soviet oil consumption was higher than the former Soviet Union's entire oil production of 1993 (BP 1996). Also in 1989, the Soviet Union officially exported 30% of its oil, and much of that export was to the Eastern European satellites. Together the Soviet Union and Eastern Europe consumed roughly 20% more oil in 1988 than they produced in 1993. The only way that the Soviet Union could have possibly survived such an oil production decline crisis, not to mention a complete loss of oil export revenue for hard currency, as well as cut its internal consumption, and cut off Eastern European exports, would be to shift to a market economy. The Soviet Union did exactly that...Indeed, Soviet and post Soviet oil consumption declined a staggering 50% from 1985 to 1995. However, the transition was not by choice but by brute economic force…
In the 1970's and 1980's the Soviet Union was trying to get Eastern Europe to cut its reliance on oil especially from the Soviet Union so that it could export more oil for foreign hard currency (CIA, 1985). Before 1989, the Soviets provided as much oil as Eastern Europe needed using a bartering system (FBIS, 1989). In reality the oil was given away at well below world prices (Balabanov and Deitz 1991). The Soviet Union was practically giving away its oil to Eastern Europe, Cuba and North Korea in order to hold up their economies and Soviet influence. As oil production waned, those exports declined and the subsidy was cut causing those economies to fall one by one alongside the Soviet economy...Eventually the Soviet and Eastern European economies were forced to cut oil consumption in order for the Soviet Union to be able to export oil for needed revenue to pay interest on foreign debts and buy essential Western technology…
Eventually in 1991, all prices were allowed to go to market levels, but it takes time for an economy to adjust. So the economy fell into a deeper and deeper recession. Note too that even though prices were free, oil prices were kept low and the economy was not allowed to allocate the oil to its most productive uses, i.e. to its highest bidder. This meant that oil was sold on world markets, creating shortages at home. Inefficient factories and producers were allowed to continue to receive wages even though they produced nothing that the economy demanded. It was this lack of flexibility in Eastern Europe and the Soviet Union that helped their economies spiral downward. However, the initiating event was an oil crisis. Even in 1997, after ten years of Parastroika and seven years of free market prices, many factories and business were still being supported artificially by the state. Many firms were still receiving low-priced oil. Former Soviet oil companies have been required to sell fuel at prices below world market prices...
During the transition period then, not only were Soviet industries having a hard time coping with higher oil prices, but also the economy as a whole had less oil to export. Low oil exports contributed to a balance of payment and international debt problem that Russia still faces today. The internal oil price shock, bankrupted Soviet industry. All of these crushing economic problems were brought about mainly by a shortage of oil. Eastern Europe and the Soviet Union really had only one course of action: free the markets. However it was impossible to free their markets without also opening up their political systems too-since the state owned everything.
CONCLUSION
…Most likely within the conflicting statistics, the period of the break of the Soviet Union was an oil crisis period. We know that the West went through two severe oil crises, which the Soviet Union and Eastern Europe never felt. It was only a matter of time for them finally to have their own oil crisis. They simply insulated themselves from it for awhile. The fact remains that former Soviet oil production by 1992 was 20% less than Soviet and Eastern Europe oil consumption in 1988. Furthermore, incredibly, oil production in the Soviet Union declined before consumption, which makes a cause and effect scenario of an economic crisis causing an oil production decline impossible. The more likely cause and effect scenario is an oil crisis caused by scarcity leading to an economic down turn and eventual consumption reduction. This means that these economies were forced into an oil crisis. They had to reduce oil use. However, with vastly higher oil prices, actual former Soviet and Eastern European oil consumption declined by about 50% from 1988 to 1995.
When the West cut its oil consumption in 1974 and 1981, there were two major recessions. However, neither of those recessions and energy efficiency periods saw a 50% reduction in oil usage in the West. Considering the West's experience, there would be no way for the planned economies of Eastern Europe and the former Soviet Union not to have had even bigger recessions during the period 1988 to 1995-when they saw an even bigger reduction of their oil supply-than the west had in the 1970's and 1980's. Logically, this means an oil crisis pushed these planned economies towards a more efficient system, namely free markets and democracy.
http://www.oilcrisis.com/reynolds/SovietDecline.htm
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Now ironically, the hidden violent power of crude oil seems to be targeting all the nations except Russia.
Today, some fraction of $3 trillion being circulated on global financial-communications networks must be directed to the oil market.
If such an irresponsible flow of funds should trigger a catastrophe in the global economy, future researchers will probably recall it writing a history in the following way:
"It is unbelievable that only handful of investment companies with some hundreds of employees in charge destroyed the global economy just by manipulating their computers linked globally in office in Houston, New York and London in the early 21st century (, which however resulted in various revolutions in the key nations such as the U.S., the U.K., China, India, and the Vatican...)."
Have you found any useful lessons in the case of the Soviet Union in 1980’s?
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Indeed, you need to master two paradigms as you surely know: the Central Government Finance and the Industrial Development Policy.
Accordingly, you have to face two enemies: Irresponsible Local Beneficiaries and Global Financial Pirates.
Truly, without faith and love, you will be engulfed in all-out pillage and plunder being launched domestically and globally on whatever public money each government is entrusted to.
We have to avoid and conquer the possible famine of energy resources and the emerging CO2-triggered turmoil in the near future.
So, listen to Japan since it is NO.1 in terms of the energy-saving technology.
Remember that China has to suffer the great earthquake, with more than 50,000 deaths, and the crude oil reserves worldwide might be depleted in 40 years, 50 years, 60 years, or at the end of this century.
(If you have no active memory on the era of the Vietnam War, you had better be more humble.
If you have no active memory on the era of the oil crisis in 1970’s, you had better be more humble.
If you have no active memory on the era of the Persian Gulf War around 1991, you had better be more humble.
If you had not been in Washington D.C. or New York on Sept. 11, 2001, you had better be more humble.
That is why I suppose Mr. John McCain can be dominant over Mr. Barack Obama this fall.
What’s your saying? Any face-saving answer?
As for me, if Mr. McCain is an officer commanding his troops in Vietnam, I am just a high-school student watching news of the war on TV.)
Gen 5:21 And Enoch lived sixty and five years, and begat Methuselah:
Gen 5:22 And Enoch walked with God after he begat Methuselah three hundred years, and begat sons and daughters:
Gen 5:23 And all the days of Enoch were three hundred sixty and five years: