A Keystone XL Rube Goldberg Machine

Not so long ago it seemed like the world had woken up to the fact that perpetual growth powered by finite resources on a finite planet was impossible. People spoke of a transition to a green economy in which little bunnies would frolic among solar collector panels while soaring birds would circle wind turbines. Gas prices were skyrocketing, people were talking about peak oil and it was clear that we were inviting ecological, social and economic disaster by continuing our energy policy. No, I'm not talking about this summer or last year, that was 1970 and a conservative into conservation was in the White House - Richard Nixon. He brought the Environmental Protection Agency into existence and along with it a raft of legislation to protect the air, water and land. Well, here we are forty years later facing the same problems again and an American president who promised his election would bring "the moment when the rise of the oceans will begin to slow and the planet will begin to heal..." on the verge of completing our suicidal Rube Goldberg Machine and signing our death sentence by allowing a project which Jim Hansen of NASA, the world's foremost climate scientist, said is "essentially game over" for our planet.

What, you still haven't looked up Rube Goldberg? First, it's known as Heath Robinson in the UK. Still not there? Did you ever play the game Mouse Trap when you were a kid? Too old school? How about The Incredible Machines? Still too '90s? Ok, well maybe you've seen this video:



That's a Rube Goldberg Machine, a a deliberately over-engineered machine that performs a very simple task in a very complex fashion, usually including a chain reaction. With a little imagination it's not hard to see the world's dependence on oil as one giant Rube Goldberg machine whose aim optimistically is to burden us financially for the benefit of a few oil companies, pessimistically to catalyze the burning of the planet. Many had hoped that we'd either save ourselves by developing a new technology to replace oil or that it would simply run out, so called Peak Oil. Our machine is so deviously complex that it even works against both solutions. Despite the enormous wealth oil has created for a few companies (ExxonMobil, BP, ConocoPhillips, Chevron, and Shell made $35 billion in profit in the first quarter this year), our governments still give them massive tax breaks (more than $4 billion for that previous group of five from Uncle Sam) and allow them to write the legislation (see Dick Cheney's 2005 energy bill and it's Haliburton Loophole) to keep producing oil and gas thanks to the political influence they can buy in our corpocracy. Worse, instead of technology setting us free, it's further enslaved us in recent years making deep sea drilling, hydraulic fracturing and tar sand extraction feasible and profitable. The games been rigged and the trigger is about to be pulled.

When President Obama got back from vacation at Martha's Vineyard last weekend I wonder if he even saw the hundreds of people in front of the gates waiting to be arrested. A couple of thousand people signed up to be arrested for sitting, singing and holding signs protesting against TransCanada's plans to build the Keystone XL oil pipeline. Once you get past the 'huh, they can be arrested for that?' moment (you know, it would be embarrassing if the tourist saw them or worse, they could be terrorists) one naturally wonders what could drive people to such an extreme. The answer lies in northern Alberta, the source of the pipelines payload. See, Alberta's oil isn't the conventional kind, it's even got it's own name, tar sands, or if you prefer, oil sands, which is actually vast deposits of bitumen - black, tarlike goo that is mixed with sand, clay, water and oil. There are approximately 2.5 trillion barrels of the stuff, the largest hydrocarbon deposits in the world and in terms of recoverable oil, the 2nd biggest in the world outside of Saudi Arabia. The problem is and has always been turning this crud into crude.

The view over Mordor, er, near Fort McMurray

Unsurprisingly, it was Obama's predecessor(s) who made it all possible. When Dubya's handlers were scouting international locations for him to begin reaping the rewards of his presidential legacy - giving speeches for cash - they found their options to be rather limited thanks to the international crimes he had committed. Fortunately for them, there was one place in the world sure to welcome him being much like Dubya's home state it was more Texas than Texas and all- Alberta, Canada. So, instead of being arrested by the ICC as he disembarked from the plane in Calgary, he only had to deal with a few protestors on his way to a $4,000/plate speech. Yes, Alberta, home of pickup trucks with shotgun racks and oil. Lots and lots of oil. It's been said that the only winner of the invasion of Iraq was Alberta as it played a part in the machine, helping push the price of oil into the triple digits and thus turning Alberta's biggest natural resource from a perennial money loser into the next big thing.

You see, strip mining the world's largest boreal forest for oil ain't cheap, environmentally or financially. It's kinda like ripping out your lungs while filling your chest with smoke. Loading the world's largest trucks with crud, moving it, heating it with natural gas (28 cubic metres or 1000 cubic feet of natural gas to produce one barrel of oil), mixing with 2.5 to 4 barrels of water, storing the toxic waste in tailing ponds big enough to be seen from space and finally transporting it costs money. With the price of oil stuck around $20/barrel (as low as $12 in 1998/99) it didn't make economic sense for oil companies to do the dirty work, so the government did. For decades the people of Alberta made up the loss in subsidies. A habit they still haven't seemed to shake despite the turnaround, giving more in subsidies to tar sands producers than the entire Environment Canada budget.

Higher oil prices have indeed led to an R&D extravaganza along with profits, but it is squarely focused on figuring out how to get the dirtiest possible oil out of the hardest-to-reach places. Shell, for instance, is working on a "novel thermal recovery process", embedding large electric heaters in the deposits and literally cooking the earth. Thanks to war and insatiable usage, the surge in oil prices allowed the United States Energy Information Administration to "discover" oil in the tar sands. It announced that Alberta - previously thought to have only 5 billion barrels of oil - was actually sitting on at least 174 billion "economically recoverable" barrels. The next year, Canada overtook Saudi Arabia as the leading provider of foreign oil to the United States. Iraq's oil boom wasn't delayed; it was relocated. There is a certain irony there: The United States invaded Iraq at least in part to secure access to its oil. Now, thanks partly to economic blowback from that disastrous decision, it has found the "security" it was looking for right next door.

Click to enlarge

So thank dog it's not Dubya sitting in the Oval Office deciding whether or not to allow the Keystone XL pipeline to cross the border and deliver oil all the way to the Gulf of Mexico via Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. Nebraska's Sand Hills, the Yellowstone River and the Ogallala Aquifer, an underground reservoir that supplies two million Americans in the Midwest with water all lie along the path. Especially when the precursor pipeline suffered a dozen leaks in the past year would mean that a larger one in which 1.3 million barrels of bitumen with dozens of poisons needed to act as lubricants is forced at high pressure over 1,711 miles (over 2,750 kms) is bound to suffer a major leak sometime. Or wait, maybe it's the knowledge that it doesn't matter who's sleeping at 1600 Pennsylvania Avenue that so many people are willing to face arrest to raise awareness of what is being done to us. Faced with a financial crisis caused by too big to fail banks, greed, corruption and out of control inequality, Obama chose to bail out the very same banks and extend the Bush tax cuts which incentivized the greed and blew open the gap between rich and poor. Faced with an out of control health care system which delivers worse results for way more money than any other OECD country, Obama chose to reward the insurance industry that lead to the problems of exclusion and cost. A winning Rube Goldberg Machine takes delicate planning to put everything in place. The oil industry gets preferential access to Canadian Prime Minister Harper, together they lobby against the Europeans banning tar sands to protect the dirty fuel's clean image and a former ambassador to the US gets dispatched to lobby in Washington fueled by the petrodollars at the disposal of Exxon and BP and finding familiar nameplates in the very corridors tasked with shaping the laws and regulations for the industry. No one was surprised to hear Hillary Clinton comment that she was inclined to approve the pipeline months before the State Department or the EPA had even compiled a report. Even less surprisingly, the State Department has since given the KXL project green lights, while receiving red from watchdogs, in all their flawed reports to date.

Tar Sands. Hydraulic Fracturing (Fracking). Deep Sea and Arctic Drilling. Mountaintop Removal (MTR). Nuclear Energy. It seems so counter-intuitive when we know the dangers behind each but these are the energy sources that America and the world are turning to when we have alternatives. The oil companies simply play their spin machine to keep us addicted to their crack. Fracking is poisoning watersheds and water tables across America, it's been documented, we've been warned but it'll keep being done and move to to Europe, including the UK with the same dearth of regulation and even here to Poland. The technology that goes into drilling for oil thousands of feet below the sea is impressive so nothing could ever go wrong like it did in the Gulf of Mexico until it did, disastrously with BP last summer. Or just a few weeks ago for Shell in the North Sea and, gosh, ruining their reputation! Following the Gulf of Mexico disaster, Obama gave the OK to expand drilling over 20 million acres in the Gulf and soon probably in the Arctic Ocean. Remember how hard it was to stop the Gulf spill? Now imagine the remote Arctic. But, but, the technology! Let's not even speak of the horrors of blowing the tops off mountains to get at ever more inaccessible coal. We learned the lesson of Fukishima too, right? The Germans may have but not America and certainly not China. Holy shit, thanks again Wikileaks.



If you read the wrong newspapers or watch nearly any TV (really, people still do) the oil companies myth making machines will be screaming about the jobs these projects while using numbers made up by the industry to create while presenting a false choice between the economy and the environment. Even if true the reality runs something like this - we (as in us, it's our planet) grant oil, coal and nuclear companies access to our land for a minimum fee, while providing them with subsidies and tax incentives so that they can make billions in profit today and we have to pay with our health, lives and cash thanks to the damage that they leave behind. Yeah, sounds fair, kinda like the banking industry. There are better, safer, sustainable ways to spend $7 billion. I'll bet you didn't know that America is actually a $1.9 billion net exporter of solar energy products. I'd say the big problem is that it's not the right people making or saving the money the money when alternative energy is used. BP and Exxon can charge us for the oil for as long as we need it but they can't charge us for the sun and wind.

The Real Slippery Slope

There'll also be the banshee screams of those claiming that oil from Alberta is more ethical than that from places such as Saudi Arabia, Nigeria or Venezuela, countries that are potentially unstable or hostile. Um, yeah, Canadian's farts don't smell either. And the most childish (see what I did there?) spin of all, finger pointing, the old "if we don't do it, someone else will". This one's trumpeted over and over with the tar sands, that if the US doesn't get it, then the Chinese will. The Chinese! Wrong. A devastating new report from Oil Change International shows that Keystone XL will not only allow oil companies to exploit big domestic (read US the biggest kind) tax loopholes but also send most of its oil to export. USA! USA! Not only do you get all the risk of spills but you won't even get taxes to help pay for it. Anyway, a pipeline to the Pacific will be fought in the courts by native tribes and the people of the BC will fight any plan to fill tankers with the gunk off their coast. At the very least it will staunch the flow, time will be bought, time to build alternative energy sources. Fort McMurray, Alberta is a long way from anywhere so killing this pipeline turns the tar sands into a landlocked bomb instead of a nuclear submarine. Tar sand production is set to triple by 2020, stopping this pipeline throws a wrench into those plans. As an oil company economist and vice-president said, "Unless we get increased market access, like with Keystone XL, we’re going to be stuck". Alberta’s Energy Minister, Ron Liepert added "If there was something that kept me up at night, it would be the fear that before too long we’re going to be landlocked in bitumen...We’re not going to be an energy superpower if we can’t get the oil out of Alberta." Exactly.

Back to Richard Nixon. He wasn't really more progressive than Obama when it comes to the environment. It took 20 million people out in the streets for Earth Day in 1970 to get him to finally act. Yes, people power forced him to sign the bills that established the EPA and the landmark Clean Air Act then in 1972 Nixon signed the Coastal Zone Management Act; the Ocean Dumping Act; the Marine Mammal Protection Act; the Federal Insecticide, Fungide, Rodenticide Act; and the Toxic Substances Control Act. Nixon's term also saw passage of the Endangered Species Act in 1973 and the Safe Drinking Water Act in 1974. Somehow we've allowed ourselves to be sent back to the 70's while becoming so apathetic that only a handful are forced to try to defuse the largest carbon bomb on the planet.

Look, I'm not here to try to convince you that climate change is happening. It is, regardless of what your chosen means of indoctrination tell you. Of course this doesn't mean we're causing it regardless of what most climate scientists are telling us. I get it, there's no way to prove it despite the overwhelming evidence. The fact is we might be and whether or not you think volcanoes contribute more CO2 to the atmosphere than human activity (they don't) or that stolen emails showed that scientists manipulated data (they didn't) or that only an benign deity can influence the planet (he/she/it doesn't), carbon dioxide concentration in the atmosphere is steadily climbing. So, as we approach seven billion inhabitants we're allowing the powers that be dictate our continued addiction to oil which will get harder and more dangerous to retrieve. Simultaneously, tar sands not only uses vast amounts of fresh water, it poisons it as part of the production process and carries an elevated risk of contaminating more in transportation. War is a natural consequence of shortages in either oil or water and now we've also learned that it also occurs thanks to warmer weather associated with El Nino. Hmmm, not good if the planet is indeed heating up. Oh, yeah, all part of the Rube Goldberg suicide machine. Tar Sands production is set to triple by 2020 while producing more CO2 than conventional oil both in production and ultimate use, you know, when you burn it in your Godcar going down to Wal-Mart. As most emissions come from burning it, the industry tries to spout figures comparing "well to wheels" (about 15% higher) instead of the more damning "well to tank" figure (up to 300% higher).

To stop it we need a change, not just in energy production, transportation and exploitation, but in our way of thinking, behaving and advancing. Regardless, you don't have to believe in climate change, anthropogenic or not, to believe in the increasing cancer rates caused around Fort Chipewyan by tar sands extraction and the destruction wreaked by the run off of arsenic, lead and mercury into the Athabasca River flowing into and thus endangering the Peace-Athabasca Delta. More than just mutant fish I'm afraid. Alberta won't stop it, decades of pro tar sands cheerleading have ensured the population is completely misinformed by what was just recently revealed to be pure propaganda as a federal report released in December accused the authorities of not having anywhere near the proper monitoring and controls in place.

To be fair, as the Economist pointed out, the report also indicated that environmentalist's claims that the tar sands are the "most environmentally destructive project on Earth" were "not accurate". Via the Globe and Mail on the same report, it "notes that scientific data shows air pollution is minimal, water pollution a potential concern but is having no immediate impact, that there's no correlation between oil sands pollution and an elevated cancer rate in Fort Chipewyan". All this of course without saying what is more destructive or much data thanks to the lack of monitoring. You might remember the preferred method of regulation and oversight in the Alberta oil industry from the financial industry a couple years ago. Ironically, the one man who can bring a change is the same who promised he'd bring it a few years ago, Barack Obama. As it crosses an international border, Obama and no one else gets to decide if the construction of the Keystone XL pipeline to carry oil from the tar sands of northern Alberta to the Gulf of Mexico goes forward or not.

View of the Athabasca-Peace Delta

There's a lot of things that I just can't seem to wrap my head around. There are Christians who profess to follow the teachings of the world's most famous socialist, Jesus Christ, yet whose true system of belief is based on a greed that makes them believe the best way to allocate scarce resources is a corrupt, oligarchical system they call the free market or capitalism. Haven't they even read the bible? Don't they even listen to the pope? Even sillier are those who believe in a democracy in which two (or maybe even three) corporate financed and thus controlled parties conspire to determine who maybe half of the population will choose between. America is of course where economics, politics and religion meet head on. It's the only place in the world where batshit crazy wackos such as Michele Bachmann and Rick Perry could be considered for the presidency. Thanks to folks like them monopolizing the media, the tandem of natural disasters that hit Washington DC in the last couple of weeks are more likely to be seen as acts of god warning the American people to cut spending in the words of Bachmann (please, don't look into her eyes) than independent events. Perry can extol the wonders of Texas schools teaching creationism alongside evolution to children in a land where most of the population believes that a bearded man in the sky created the Earth in six days around 6,000 years ago to once again drown out the lesson that could be learned of preparation and conservation by screaming like the monkeys they really evolved from.

Ah, Rube Goldberg again, keep the people stupid, feed them garbage and keep degrading the science that tells us that our actions aren't necessarily creating the climate but almost definitely making it worse. How else could Americans not connect the dots from April, when a series of killer tornadoes tore up the South to May, when floods ravaged the entire Mississippi River basin, through July, when killer heat waves seared the Midwest and Northeast to August, when Texas officially passed its worst one-year drought on record and finally to the warmer ocean pulling Hurrican Irene northward last weekend? The same way as last year. And the previous decade. By framing the issue with their media cohorts by asking the wrong question - "What caused these events?" - instead of "What's making them worse?". Despite 595 people (and counting) - from regular folks from Nebraska to event organizer and 350.org founder Bill McKibben and Daryl Hannah - being arrested in front of his bedroom, it's clear the Faux sound machine and the petro-interests have made sure President Obama has heard the wrong question on this issue as they have on all the others. We're this close to getting him to hear the message but there's only a few more days in Washington (then September 26th in Ottawa) so stand up, sit down, sign up, help out and call out the right answer to the right question - US!

Additional links (cause you can just never have enough!):
- Stop the Pipeline!
- "Tipping Point: The Age of the Oil Sands" (only available in Canada)
- Top 10 Tar Sands Facts
- Is There a Cancer Threat from the Oil Sands Industry?
- Slow Motion Oil Spill
- Ten Years After 9/11 - Canada's True Cost of Oil (great pics)

From 50 Cent to $50 Billion and Beyond

As the world's economy continues to lurch forward and stumble backwards, I noticed a few stories this week that exemplify the intractability of our economic problems. Stock markets have been performing well, banks have long returned to profitability (along with their absurd bonuses) and retailers are reporting the predicted strong Christmas sales. Conversely, the price of oil has been steadily marching back towards 2008 levels, poverty levels are exploding and the mortgage crisis continues to throw millions of people into the street. Corporations and the wealthy have returned to health while the rest of us seem to be stuck in the cold, on the outside looking in. It's hard not to find three stories from the past week or so quite instructive in why this is, as Fifty Cent, Facebook and BP all made financial news in ways that demonstrate the growing divide between the haves and have-nots in the capitalism of today.

One way to get rich in America is to become a crack dealer at age twelve, turn to rap, get shot and then discovered by Eminem. Once you get famous, dabble in film and TV, lend your name to every product imaginable, from video games to deodorant and most importantly, get in early on investment opportunities. When those investments start to look bad, no problem, just order your followers to come to your aid via one of today's favorite lemming leading social media platforms, Twitter. Yep, appropriately enough, the man who added to the get rich or die trying mantra plaguing America, Curtis Jackson, AKA Fifty Cent has completed the morality full circle, going from drug pusher on the streets of the Bronx to penny stock pimping Wall Street promoter  Around the end of November, he invested $750,000 in the penny stock, H & H Imports, a company involved in the launching of his own version of headphones, Sleek by 50 Cent, an unapologetic rip-off of Dr. Dre's Beats.

In addition to the 30 million shares received in the private placement equity offering at the end of November, Fifty also picked up warrants for another 22.5 million shares at prices of $0.15, $0.25, and of course, $0.50. Predictably, as the company was operating at a loss and carrying a deficit of $3.3 million as of November 23rd with only $198,000 cash on hand, the shares plummeted from 17 cents to under 5. Fitty turned to his 3.8 million followers for help with the following tweets:

"HNHI is the stock symbol for TVG sleek by50 is one of the 15 products this year. If you get in technically I work for you. BIG MONEY”
“TVG’s stock went from 5cent to 10 in one day. You can double your money right now. Just get what you can afford.”
“HNHI is the stock symbol for TVG there launching 15 different products. they are no joke get in now.”
“You better get in now TVG I’m never saying this again. Watch how this company blows up.”
“Ok ok ok my friends just told me stop tweeting about HNHI so we can get all the money. Hahaha check it out its the real deal.

The result? An $8.3 million profit for 50 Cent as the stock price quadrupled, from 10 to 40 cents. Love the intentional (?) spelling error (there instead of they're) to save character space in the attention span deprived age of Twitter. Oh, and like his other tweets pimping the stock, all of them have been scrubbed, another word symbolic of our new doublespeak age. So far, no pump and dump has been proven yet and with the regulators at the SEC having to worry about the next private placement stock offerings we'll discuss, its seems no harm, no foul. Besides, if you're taking stock advice from a rapper, you deserve what you get, right?

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If you wanted to write a script bringing together three of the most evil characters imaginable, you couldn't do much better than the evil banking empire, the Russian investment firm and the megalomaniacal psychopath. Ok, maybe the Empire from Star Wars, Connery as Bond-era Russians and Blue Velvet's Frank Booth. In real life we've got Goldman Sachs and DST Global pumping $500 million into Mark Zuckerberg's Facebook, pushing its value up to $50 billion. This is supposed to be real life, yet these guys get to write their own script in the battle for wealth and eyeballs. Only in America could such a world exist, where problems are always made worse instead of being fixed.

In fact, we love these movies so much we choose to further empower the bad guys. As a reward for helping bring the world's economy to its knees, Goldman Sachs was given access to the Federal Reserves discount window. By converting itself into a commercial bank and member of the Federal Reserve system during the chaos at the onset of the financial crisis, Goldman can now borrow near-unlimited amounts of cash at near zero interest. Feeding what Matt Taibbi called "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" zero cost of capital so they can turn around and give it to Facebook in order to better exploit our shrinking attention spans doesn't seem like a private placement equity offering good for the rest of us. Not only did they garner a $13 billion payout at one hundred cents on the dollar for its outstanding credit default swap contracts with AIG and $12.9 billion in direct bailout money, they now get practically free money from the FDIC Temporary Liquidity Guaranty Program. Goldman simply takes this money from us, gives it to Facebook in exchange for a slice of equity, then turns around and sells their piece of the $50 billion pie it just baked to chosen investors. Chosen meaning really rich, as in order to be invited to dessert and take part in Goldman's $1.5 billion private offering you need to be a multi-millionaire.

So, only Goldman and friends have a shot at the riches they've created by borrowing money from the public to create a company worth $50 billion. In exchange, Zuckerberg gets a two year window before he'll be forced to go public in an IPO (Initial Public Offering). Imagine that, forced to make a few more billion dollars at the cost of losing complete financial privacy as a public stock offering would entail opening up the books to public scrutiny. Poor Mark. Additionally, Goldman has virtually guaranteed themselves to be the lead bank in all the future IPO's that will be pumping up the next market bubble thanks to the spin-off of all Facebook's inter-connected businesses (more on them in the next paragraph). Told you the SEC was busy as this script has everything, aiding and abetting by the US government, a battle for billions of eyeballs and even a Russian angle. In fact it is the Russian company that brought Facebook and Goldman together that does a lot of the selling on Facebook already, Digital Sky Technologies and its co-founder, Yuri Milner.

DST has been investing early and aggressively in some of the biggest names in the latest tech bubble boom. They first invested in Facebook in May 2009, as well as Zynga (the company that makes Farmville for Facebook), and Groupon (the dudes that just turned down Google's $6 billion). DST also tried, but failed, to be lead investors in Twitter's latest financing round too, but don't worry there will be another shot. In case you missed it, in addition to his 10% share in Facebook, Yuri was in for a third of the $403 million owners' stake in the $876 million IPO for Mail.ru in November and still holds onto much of the company. Needless to say, all this buying and selling is done in a closed circuit of hedge funds billionaires for banker benefit. With over 500 million monthly users and the recent surge in popularity in Asia, Facebook's control over the second billion eyeballs may come even quicker, so who can blame people for climbing over each other to take part, bubble or not. Good thing we've got financial regulators making sure nothing improper is happening!?!

Some may have picked up on the similar role Goldman Sachs is playing in the promotion of this bubble to the last when they were at the center of creating the housing bubble. Looking to feed the next frenzy after the dot-com bubble burst in 2000, Goldman and other investment banks found a new gimmick, credit derivatives such as CDOs. To make mountains of moolah, all they had to do was stuff toxic subprime assets into pretty packages, chop them up and hawk them to the gullible, greed-driven Gordon Gecko wannabees of the world. It's like deja-vu all over again, as this time they are also raking in fees while pawning off overpriced goods in a market of their own creation. Goldman invested $75 million in Facebook early through one of its hedge funds at a low valuation in the same way they got CDOs rolling, this time making $60 million in up front fees from clamoring clients. Once again, the clients will have virtually no idea what they are getting while agreeing to give up over 5% of any possible gains on top of the 4% placement fee and 0.5% expense reserve fee. Yep, quite a privilege to be down 10% before the opening bell in a private company that won't have to disclose any financial information to investors or regulators for at least another 15 months while Goldman gets its guaranteed eight-digit windfall.

Best yet, they've shown that although they might not have learned any lessons about bubbles, they have learned to protect themselves as Goldman has reserved the right to cash out anytime they want right up front "without notice to the fund or investors in the fund". So, investors who must put up a minimum $2 million investment aren't allowed to sell until 2013 but will never know when Goldman starts betting against them. Goldman learned from the Abacus deal in which they shorted shares at the same time they were selling to clients and wound up costing them $550 million in fines. Their notice means this time the SEC can't touch them. CDOs were private, unregulated, overvalued, disclosure-lite, fee-intensive deals. The Facebook deal is private, unregulated, overvalued, disclosure-lite, and fee-intensive; insider trading in the public markets made upfront and legal here. As Goldman CEO Lloyd Blankfein infamously said, he's just "doing God's work".

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What do you get when you have the biggest country in the world, one with vast reserves of natural resources and without any qualms about doing what it takes to get what they want joining forces with a giant oil company with a history of destroying the environment in a relentless drive for short term corporate profits? One more bit of financial news sure to help in bringing about the end of the world. Now that the Gulf of Mexico has magically cleaned itself and BP has returned to profitability, it has turned its sights north toward the abundant resource riches of the Arctic. Yep, seeing as the world has already forgotten it's last catastrophic environmental disaster, BP has announced a partnership with Russian energy firm Rosneft, 80% owned by the Russian government. The deal announced Friday will give Rosneft 5% of BP's shares in exchange for approximately 9.5% of Rosneft's.

Uh huh, so? Well for starters we're talking about BP gaining access to the fragile Arctic ecosystem through the back door. The company who just half a year ago had the world glued to a video feed of the gateway to hell opened up by the Deepwater Horizon oil rig explosion. It cost them a few bucks in cleanup costs but BP's still worth three Facebooks, a cool $150 billion. This deal is needed to help get it back to its pre-Gulf of Mexico destruction value. In exchange for giving Russia, a country notorious for its capricious application of the rule of law, a piece of BP and its strategic US holdings (BP was the biggest petroleum supplier to the US military last year), world consumers will get a shot at what is estimated to be enough oil to meet global demand for more than four years. Russia's piece of the Arctic pie could be 51 billion tonnes of oil, but sucking it like a straw from under the Arctic will take BP's "expertise" at this type of work. With peak oil and prices approaching the $100/barrel mark on their way to the $143.37 it reached in July of 2008, there's no wonder the business press is pumping this deal too.

Both former BP CEO Tony Hayward, who was just sorry because he wanted his life back, and current boss Bob Dudley had ties to Russia in the past. Strangely, or not, Dudley was forced to flee Moscow in 2008 after the last BP venture into Putin's playground went bad. Dudley claims the Russian billionaire oligarch co-owners in the TNK-BP joint venture waged what he called a campaign of harassment. Of course the business press can't even read newspapers from 2008 to question why they then wrote that Dudley had been barred from working in Russian before they started running with his current song and dance that "this is a historic moment for BP". It is historic as the race for control of the Arctic shelf has been kicked up a notch, with another oil war coming clearer into focus. Our dependence on extracting as much oil as possible, regardless of the difficulties or dangers, is driving us ever faster to our doom. Yet, it is the companies like BP who drive part of this rise as prices mount partially thanks to the disasters they've brought which causes uncertainty about regulation and whether we've finally reached the limit of environmental degradation.

So, the deal is sold as a good thing that the firms will explore in three areas - known as EPNZ 1,2,3 - on the Russian Arctic continental shelf in an area that covers 125,000 square kilometres in the South Kara Sea. BP's technology matches with Russia's oligarchs or something like that. The cost of doing business is the possibility of Putin putting someone in jail or taking what he wants but BP's growth is dependent on Russia. Besides, it can't be any more environmentally damaging than the tar sands or fracking, so what the hell, let's burn more fossil fuels to heat things up faster to melt the ice caps to make it easier to get the oil. In a world where war, support for authoritarian regimes, oil company run governments and destruction of ecosystem and entire countries is acceptable in the pursuit of cheap power, why would we worry about a little thing like the Arctic? What's an addict to do?

The go-go 90's of Yeltsin's Russia resulted in transferring the wealth of the nation from the people to a selected few in a neoliberal wet dream. It created a billionaire aristocracy by handing over the economy's most important, profitable sectors, free of charge - literally granting a license to loot. Sure this resulted in huge inefficiencies with estimated losses to corruption of $318 billion annually but whatever kept the oil and gas flowing west was fine. Vladimir Putin's Russia still has the graft but is a slightly different place. Although the rule of law isn't applied evenly and basic rights such as political expression, freedom of speech and the press are often brutally repressed it has become a land where even the 16th wealthiest man in the world can find himself behind bars. Mikael Khodorkovsky and his oil company Yukos were the biggest winners of the unfettered markets created by the IMF in the 90's but the biggest losers in the power struggle with Putin in the oh-oh's. The 'liberal' western press decries arbitrary prosecutions at the whim of the Kremlin while ignoring the real story. The looting by the likes of Khodorkovsky was given a free pass in exchange for not challenging the government. As soon as he started funding and supporting opposition groups, that unspoken agreement was breached. You won't read in the NY Times about how Khodorkovsky used his Communist era position to enrich himself, stealing from the state and unwary investors enough to buy Yukos for $300 million in 1995. In 2003, its market value was $30 billion, a 100-fold ill-gotten gain.

In a dizzying about face, the media has gone from condemning Russia's business climate of fear three weeks ago when judges added six years to Khodorkovsky's eight year prison term, to jubilantly embracing the marriage of BP and the Russian government's Rosneft. The hypocrisy of western attitudes is revealed on multiple levels; defending predatory capitalism's rapaciousness and its own criminal class but attacking Russia's IMF-built system while giving its approval to the signing of business deals with them in the name of corporate growth. For decades, a government-corporate cabal has been shifting trillions in public wealth into private hands, specifically to omnipotent Wall Street. At issue is shielding them at all costs so corrupt practices can continue until everything worth owning is stolen. Of course the charges against Khodorkovsky are ludicrous and his trial was politically motivated but even more ludicrous is a world that sits back and cheers a company that was just shown to have caused the Gulf of Mexico disaster by cutting corners to boost profit being handed the keys to explore, exploit and extract resources in the most fragile ecosystem in the world. In the words of Britain's energy secretary Chris Huhne, "BP is very much open for business." Unfortunately for us, their business of stealing from humanity's commons to add value to their stock price can only end badly. BP, Beyond Petroleum, searching for petroleum so we can keep living beyond our means.