The EU will increase the pressure on Iran on Thursday by unveiling more sanctions, including banning investment in the country’s key energy sector.

The measures will also include blacklisting and freezing the assets of members of the elite Iranian Revolutionary Guard Corps.

A draft declaration on Iran, obtained by the Guardian and to be agreed by European government chiefs at a Brussels summit, states that “new restrictive measures have become inevitable” because of Tehran’s suspect nuclear programme and its refusal to negotiate over it.

In what is a long-running standoff, the UN security council agreed a fourth round of sanctions against Iran last week.

http://www.guardian.co.uk/world/2010/jun/15/eu-sanctions-iran-nuclear-programme

NEW YORK (MarketWatch) — BP on Monday disclosed $350 million in costs so far from its Gulf of Mexico oil leak, with the spill entering its 19th day since a giant oil rig sank and caused an estimated 5,000 barrels of oil a day to empty into the Gulf’s water.

Totaling up the estimated leak yields a figure of 95,000 barrels, or about 4 million gallons. By comparison, the 1989 Exxon Valdez accident spilled 10.8 million gallons into Alaska’s Prince William Sound.

After failing to cap the leak with a 100-ton containment dome, BP said Monday it will attempt to lower a smaller dome over the main leak point. The larger structure didn’t work because it became clogged with ice-like crystals as a result of cold temperatures and crushing ocean pressure a mile beneath the surface.

The oil major said such an operation has never been done at such a depth.

BP will also attempt a “top kill” option aimed at stopping the flow of oil from the well by injecting shredded rubber into the well as a stopper.

http://www.marketwatch.com/story/bp-spends-350-million-spill-no-end-in-sight-2010-05-10

In 1866, shortly after the Pennsylvania discovery, the U.S. Revenue Commission told that nation that once oil production ended in America, as it expected, there would be no need to worry about the availability of “synthetics.”

In 1909, the U.S. Geological Survey (USGS) warned that if the U.S. petroleum industry continued “the present rate of increase in production, the supply would be exhausted by about 1935.”

In 1922, the same agency forecast that oil supplies would dry up by 1942 at the latest.

In 1885, the USGS said there was little or no chance of finding oil in California.

In 1891, the USGS said there was little or no chance of finding oil in Texas.

In 1908, the USGS forecast the maximum future oil supply as 22.5 billion barrels.

In 1914, the U.S. Bureau of Mines warned that there were only 5.7 billion barrels of oil left.

In 1939, the U.S. Department of the Interior predicted that the United States would run out of oil by 1952.

In 1949, the Secretary of the Interior warned that the “end of U.S. oil supplies is in sight.”

In 1951, the U.S. Department of the Interior revised their prediction that oil supplies would run out by 1964.

In 1947, the Department of State warned that “sufficient oil cannot be found in the U.S.”

Is Peak Oil a valid theory?

Probably not, and if you are basing your Peak Oil scenario on a government forecast, be very, very careful. No human, government employee or not, can predict the future with significant accuracy. However, when it comes to government forecasters, being wrong has no impact on their future income. In the private sector, being wrong can cost you. (That is, unless the government comes in and bails you out with stolen taxpayer money.)

Can the Government Do Anything About Peak Oil?

What if I’m wrong? What if Peak Oil is a reality and the U.S. finds itself in another energy crisis like the 1970s? Should we look to the government to regulate our energy production? Can the government do anything to solve the problem of Peak Oil?

Let’s ask William E. Simon, the first energy czar. The Federal Department of Energy was created in 1977 and quickly set upon itself the task of employing every single economic fallacy in an attempt to stop the gas shortages. It was an orgy of arrogant, bureaucratic, conceit. According to Simon, calling it a tragedy would be kind:

“As for the centralized allocation process itself, the kindest thing I can say about it is that it was a disaster. Even with a stack of sensible-sounding plans for even-handed allocation all over the country, the system kept falling apart, and chunks of the populace suddenly found themselves wihtout gas. There was no logic to the pattern of failures. In Palm Beach suddenly there was no gas, while 10 miles away gas was plentiful. Parts of New Jersey suddenly went dry, while other parts of New Jersey were well suplied. Every day, in different parts of the country, people waited in line for gasoline for two, three, and four hours. The normal market distribution system is so complex, yet so smooth that no government mechanism could simulate it.”

The interesting thing here is that the U.S. attempted to institute a Soviet style planning regime (the DOE) in just one industry, and yet it was a total failure. Of course, with all government intervention there were unintended consequences. More from Simon:

“As the shortages became more erratic and unpredictable, people began to “top off” their tanks. Instead of waiting, as is customary, to refill the tank when it is about one quarter full, all over the country people started buying 50 cents’ worth of gas, a dollar’s worth of gas, using every opportunity to keep their tanks full at all times. And that fiercely compounded the shortages and expanded the queues. The psychology of hysteria took over. Essentially the allocation plan had failed because there had been a ludicrous reliance on a little legion of government lawyers, who drafted regulations in indecipherable language, and bureaucratic technocrats, who imaged that they could simulate the complex free-market processes by pushing computer buttons. In fact, they couldn’t.”

So what is a technocrat?

My Merriam-Webster dictionary defines a technocrat as “a technical expert; especially : one exercising managerial authority.” Well, that didn’t tell us much. What about technocracy? Again, according to Merriam, it’s “government by technicians; specifically : management of society by technical experts.”

Now that’s more like it. Technocracy is the antithesis of free market individualism. It’s a fallacy that has been very popular throughout history, particularly in the early days of the Nation-State. Technocrats are the modern day, scientific-looking ancestors of the Chinese mandarins, the intellectual guardians of the State’s thirst for plunder. And they have always been abject failures.

So What?

So know your enemy, that’s all. Technocracy is scientific soclialism in real life and it fails as spectacularly in real life as Bohm-Bawerk predicted it would when he wrote History and Critique of Interest Theories (1884.)

The Federal Reserve is a haven for technocrats, as are the various departments of the federal government. Do you know how many technocrats are currently wasting taxpayer money, churing out models and formulas that have absolutely no bearing on economic reality?

Why do they do it? They don’t care about consumers, workers or producers. In fact, they don’t care too much about freedom either. They loathe economic freedom. They want high taxation and high budgets. They want to do God’s work. They are your enemy. Oh, lest I forget… they also want your money. It sure beats working for a living.

As centralized representatives are empowered with more responsibilities, their ability to directly and effectively represent their constituency decreases. Certainly it is more difficult to directly represent 200 million people than it is to represent 100 people. Such power maintained by a select few opens the door to lobbyists, special interests, and privileged groups who seek to grab a portion of that extraordinary power in order to gain an unnatural advantage over fellow individuals. In 2008 alone, 14,808 lobbyists contributed $3.3 billion to government. In such a scenario, who receives more direct treatment, the 14,808 lobbyists or 14,808 individual citizens? A large government is easily influenced not by individual citizens, but by large and privileged groups with the means to essentially bribe those in control, thus decreasing the power of individuals over our government. Central policies simply can’t represent the unique needs of local communities, towns, and counties.

As governments centralize and expand in power, the power and freedom of individuals decreases. It is not necessary to increase our individual abilities through a complex system managed by far-off politicians. In fact, all that is necessary is a simple concept that is commonly blurred or forgotten: freedom. Freedom is the only “system” that sees all individuals as naturally equal; freedom is based on individual, not central, power, and recognizes that we, the people, can solve our dilemmas free of constraint, force, and coercion. Freedom provides individuals the opportunity to keep the full fruits of their labor and appropriate their money to where they see fit, whether it be to the elderly, those in need of food, or any other service. The element of choice lies with the individual, not with the power of others. Simply put, when focusing on local solutions, individuals maintain far greater freedom and influence of participation, activism, and travel (voting with their feet), than they have in a strongly centralized system.

Individuals carry the greatest initiative, responsibility, and obligation over government in their counties, towns, communities, and neighborhoods. Things would appear much differently today if individual people, rather than federal officials and bureaucrats, were the driving force behind environmental, medical, and other policies. Chances are that many communities would oppose the opening of a nearby coalmine and would work together, as individuals, to find a cleaner, sustainable energy source. People will certainly feel a greater sense of charity and responsibility if they see or know people in their town who need but can’t afford health care. People are simply connected to something that they personally understand, see, and love, and will work together to protect and improve such a place. This is a basic world where solutions are based not on conflict and political gain, but community involvement and cooperation.

A locally managed government created to represent and serve the people fully can only function with an informed and active public. To do my own part in bringing this about, I developed Freedom Chatter in March 2009 with the slogan, “Involve, Interact, Inform.” Freedom Chatter is an ongoing project of mine with the objective to bring together a community of contributors and excited individuals eager to analyze all areas of business, economics, and public policy. Freedom Chatter recognizes the inherent qualities of human nature to be creative, diverse, and develop original ideas; it is unreasonable to expect everyone to subscribe to one viewpoint or ideology, whether it is on a local or national scale. By acknowledging the power and creativity each one of us carries locally as individuals and utilizing our ability to interact and inform, a rebirth in freedom, prosperity, and happiness is well within reach.

Originally written as a college application essay in November 2009.

Let’s stop for a moment and consider what decreases cost and increases efficiency better than any government agency, regulation, or bureaucrat. Competition. Look at the technology industry over the past 15 or 20 years as a great example.

In the early 1990s cell phones and computers cost a bundle, were limited in their capabilities, and were largely a luxury item. These are some of the items that have escaped much of government’s grasp and intervention over the past couple decades, and look what happened. Competition flourished, prices decreased relatively quickly (and continue to decrease in many areas of the industry), and the features on cell phones and computers have reached incredible levels. This was not thanks to the government trying to manage the industry and set the standards for consumers. People choose for themselves, competition is free and open, and prices greatly decrease while the quality of the items reach new highs everyday.

The problems with inefficiency in Detroit will not be solved by more government intervention, bailouts, and special treatment. Nor will it solve our dependence on foreign oil. Competition in the market will solve these problems in a far more efficient, reliable, and less costly manner.

The first step is to let the Big 3 go bankrupt if necessary and reorganize into a viable business (or businesses). There is nothing with GM, Ford, or Chrysler that justifies preventing their bankruptcy by bailing them out with taxpayer dollars, and continuing the parenting treatment. They can grow up, accept the consequences of dumb mistakes, and readjust like everyone else. Yes, it would be painful for a year or two, but they would be required to come back with a smart business plan, efficient vehicles, and the ability to compete against the stronger Japanese automakers.

This would do much more good in the long run than the government’s endless involvement in the industry. Government limits consumer choice when it prevents an inefficient business from failing and subsequently readjusting to what consumers prefer.

If it is dependence on foreign oil you’re worried about, why not open up competition there as well? It makes little sense to ban nuclear power, heavily limit coal production, prevent a good deal of domestic oil drilling, and complain that we are too dependent on foreign oil. Why don’t consumers, communities, and states choose for themselves which energy sources are worthwhile, instead of the federal government? Give people the power of choice.

There is not one ideal energy source for every person, community, state, or country. Energy should not necessarily be treated as such a national issue, because at the heart of it energy needs start at the local level. Just look at some of the major problems caused by the federal government’s involvement in energy: a costly foreign policy partially built around the prospect of oil, the numerous subsidies to fund inefficient corn ethanol and E85, and even with the cries against CO2 we are prohibited from expanding the one major energy source that does not emit any CO2, nuclear power.

Choice of energy would tear down our need for foreign oil. It makes little sense to put the control of energy in the hands of the federal government, which can’t come close to taking into account local energy needs, preferences, and sensibility. Plus, it is the general governing, such as energy policy, that is constitutionally a state issue. The Rule of Law can’t simply be ignored when it is inconvenient for the government’s agenda.

A level playing field comes best with the free market. People should be free to make their own decisions (through their communities and state governments, if need be) with energy. Oil, nuclear power, coal, solar power, wind power, biofuels, and many other sources all have their ups and downs, and it is ridiculous to think that the federal government can effectively manage and distribute them. Give the market the ability to explore and innovate current energy sources as well as the new alternatives popping up.

The auto and energy industry will likely see increased intervention by the federal government in their affairs, while free and competitive choice slowly slides to the back of the room. People don’t have the influence they once had with their own decisions, because the federal government has apparently given itself the power to choose which businesses can fail, which products we can and can’t use, and even the power to take taxpayer dollars and hand it to private corporations.

More individual freedom and choice will hardly run our situation further into the ground. Rather, it is the choice and freedom of these industries that will further expand their sustainable development, efficiency, and promote the interests of the people over the long run.