Energy Efficiency

America is on the ropes and its ‘trainer’ – China – is also struggling.

Just as Kevin Rudd is weighing up borrowing more money to pump into the economy to make it look like its business as usual, so too is China wondering how much more money to pump into the American economy to buy Chinese manufactured goods.

And before China it was the Japanese and Saudis and many other punters looking for a quick $.

So what comes first, the chicken or the egg when the cost of buying all these consumer goods kept climbing, was it due to rising energy costs and competition for other resources?

An interesting and perhaps telling indicator is that Saudi Arabia was one of the biggest oil exporters and funders to the USA; however, as their oil well ability to meet demand has been slipping (at almost the same percentage rate as the North Sea supplies to the UK, which is also in financial turmoil) so too has their cash injections into the American economy.

There would be quite a few of concerned Saudi princes these days as the USA’s ability or commitment to support the regime is increasingly questionable.

Canada is the biggest supplier to the USA followed by Venezuela, and although America consumes less due to a collapsed financial system (some $9 trillion in debt), people selling to the USA must be wondering what the real dollar value is of the currency the Americans are paying with.

Based on figures posted on the U.S. Department of Energy Web site, Venezuelan exports to the U.S. fell 5.4 percent to 1.39 million barrels a day in the second quarter and jumped to second place from third, leapfrogging Saudi Arabia, which shipped 32 percent less fuel.

Venezuela continues to send the bulk of its oil exports to the U.S., five years after President Hugo Chavez started seeking to diversify his nation’s customer base away from the country he calls “the empire.”

So, if you need to sell your oil to an *‘enemy’ to keep a constant income stream to support your social policies to prevent local unrest, what do you – that is Canada, *Venezuela, Saudi Arabia – do when the value of the payment is no longer there … can you afford to dig for, extract and refine a product that eventually you will never effectively be paid for ?

Nobody seem to be willing to admit the emperor has no clothes and the cost of finding oil (all the major oil finds are long gone) is going up while the public can only afford to pay so much.

Peak Oil has arrived and this concentrated energy source is no longer abundant and tighten belts we must.