Cuba as the End Times Approach

Erasmo Calzadilla

HAVANA TIMES — In my previous post, I mentioned in passing that this and all other countries would face a devastating crisis of civilization sooner rather than later.

In view of the pronounced interest the issue seems to have among Havana Times’ commentators, I have decided to return to it in this post. I hope you’ll enjoy it and, as usual, inviting intelligent reflection on the subject. If, as a result of anything described here, someone should decide to commit suicide, I ask that they please leave a farewell note.

Here it goes.

The Big Shots Are Leaving the Scene

The graph below (which has nothing to do with the gay flag) represents the performance of large oil corporations over the past decade.

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The five big companies that peddle the crude are leaving the business at high speed. The reasons? Million-dollar losses and the conviction that fossil fuels have no future. The easy-to-get-at, light, “well-cooked”, pure, accessible oil, the one that produced one hundred barrels of profits per barrel invested, was sucked out of the earth and devoured long ago. The remote, heavy, pasty and impure oil is the one left. Finding and processing this product is becoming unviable from the energy point of view and extremely expensive. The costs of prospecting, to mention only one of the intermediary processes, are increasing at the alarming rate of 12% every year.

State and semi-State oil companies are filling the void left behind by the bigwigs. Should this be cause for joy? Not really. States extract the fuel through great efforts and, wherever possible, keep it for their own use, to the detriment of non-producing countries.

The graph below shows that, even though international crude production grew in stable fashion over the past decade, oil exports reached a plateau. Poor countries that have no underground reserves of black gold have tough times ahead of them. Will colonialism return?

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Fractured Fracking

The following graph, “courtesy” of expert David Archibald, illustrates the production of oil through fracking at the three largest reserves in the United States. Hydraulic fracturing is the last hope of the United States’ convalescent economy and, owing to their intimate relationship, of the world economy as well.

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For the time being, fracking is faring so well that some analysts think it responsible for the current drop in crude prices. Others, however, point to data and testimonies that reveal this is a bubble inflated by Wall Street with the fraternal aid of the media and the International Energy Agency.

If fracking is truly a bluff, how long do we have before the bubble bursts? The more skeptical of the lot believe we will reach the peak in a few years, while the more conservative speak of a decade. Gabriel, a regular commentator here, insists we will have oil from fracking for two centuries. We’ll see.

Last July, the consultancy company Goldman Sachs estimated that hydraulic fracturing, as it is practiced in the United States, requires oil prices above 85 dollars the barrel. West Texas oil is currently being sold at around that price.

Venezuela: From Exporter to Importer

The last graph reflects a phenomenon that affects Cuba more directly.

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Venezuela has the largest proven oil reserves in the world. A quick calculation – dividing existing reserves by annual consumption – tells us that, at the current pace of consumption, humanity would be able to live on Venezuelan oil reserves for nearly a decade. This is false.

So what is the problem? The same one we saw before: the light and easily accessible oil has already been extracted and burnt. The heavy, inaccessible (and therefore expensive) oil is what’s left.

PDVSA’s oil production and exports have dropped by more than 20% since 1998. The difficulties are so many that the company has to regularly import naphtha and (according to Reuters) light crude to improve the quality of its extra-heavy product.

The Venezuelan Right claims that the Bolivarian revolution is to blame for all of this, without caring to mention that there are also geological obstacles: the higher-quality wells are already aged and aren’t producing like before, and many of the new ones are producing an unprocessable paste that was not long ago considered bitumen.

Venezuela is a big time bomb. If the current drop in oil prices continues, the explosion will come sooner. Deutsche Bank estimates that oil production in the country is profitable at prices over 120 dollars the barrel. At less than 80 dollars the barrel, the country is losing money by the millions. I’m going to cover my ears so as not to hear the coming Big Bang.

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Conclusion

For their more than fifty years in power, the Castros have zealously “protected” us from contact with the evils of capitalism. It is highly ironic that they should have decided to reconcile themselves with the system precisely when it is going under. The current president is preparing the country for the time when the crisis blows over and the party can start again. It hasn’t dawned on Raul Castro that this particular crisis will never blow over.

Fidel Castro’s faith in “socialism” and lack of foresight plunged us into the Special Period. Raul Castro’s faith in capitalism and lack of foresight will make the crisis even more terrible than it’s going to be. The Soviet-like policies of Fidel Castro were supported by the communists. Raul Castro’s policy of development at all costs is applauded by nearly the entire political spectrum.

Erasmo Calzadilla

Erasmo Calzadilla: I find it difficult to introduce myself in public. I've tried many times but it doesn’t flow. I’m more less how I appear in my posts, add some unpresentable qualities and stir; that should do for a first approach. If you want to dig a little deeper, ask me for an appointment and wait for a reply.


14 thoughts on “Cuba as the End Times Approach

  • November 2, 2014 at 5:58 am
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    I will read them. Thank you for the suggestion. 🙂

  • November 1, 2014 at 7:11 pm
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    I would suggest you read both ” The Singularity is Near” written by now chief of engineering at Google, Ray Kurzweil and ” Abundance: The Future Is Better Than You Think : Peter Diamandis and Robert Kotler .
    My thinking on what the future will bring is based upon what is to be found in those two books .
    At age 70 , these two books have made a profound difference in how I view the future
    You might also want to Google both Kurzweil and Diamandis to see what they have accomplished: who they are.
    Back in the early 90’s , Kurzweil made some 118 technological predictions and was correct on some 92 of them and very close on another handful.
    He’s currently heading Google into life extension and other fields in which his peculiar talents in seeing the technological future is making them a ton of money.
    Read the books..
    THEN tell me I’m likely wrong .
    I sincerely believe that reading them ( and not just about them) can be a life-changing event .
    All the best to you.

  • November 1, 2014 at 12:46 pm
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    You seem to be very specific about what will happen in the future. Yes, maybe things will happen that way. But I remember the Danish proverb: “It’s Difficult to Make Predictions, Especially About the Future!” 😉

  • November 1, 2014 at 11:02 am
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    Kurzweilai.net has three separate articles dealing with future power supply on this week’s bulletin on tech advances .
    Check it out and subscribe to it.
    It’s free and will help keep you up to date on the incredible leaps in technology we are undergoing.

  • October 31, 2014 at 10:28 am
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    when will cuba be removed from her life support system and left to die in the sun on playa maria la gorda?

  • October 31, 2014 at 9:02 am
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    Oil reserves will play out within less than 50 years from now.
    As said, the easy-to- get oil has been drained and all that is left is the hard-to-get stuff .
    That’s the bad news.
    The good news is that fossil fuels will become obsolete well before 20 years from now and for several reasons :
    Solar voltaic technologies are improving at such a fast pace ( as dictated by the exponential nature of computer-enabled technological progress) that even now and as it is with computers, that today’s photo-voltaics will be obsolete and replaced with far more advanced and efficient technologies within just a handful of years.
    Cheap electricity from the never-ending source: the sun will enable the cracking of also never-ending water to make hydrogen; also a fuel of the future that, while at present is too expensive to be practical , will be plentiful and very inexpensive in far less than 20 years .
    Mind that this is but only one likely possibility and that a working fusion power system or a portable and safe nuclear power plant will or may also be possible given the exponential development of the technologies that will unfold in the next two decades.
    There may also be new and undreamed-of energy sources that an as yet to be developed technology will make possible .
    It is an absolute certainty that humanity will have a super-human intelligence capability through the coming developments in computing power and AI ( artificial intelligence) at which point a great many technological unknowns will be answered by an intelligence that easily surpasses any Einstein.
    The Chinese are on track to have that super-human computing capability within 7-8 years from now
    All this to say that if you dwell in the past, with no vision of the future, how that future will develop and why, you have no chance of being correct on future events.
    Secondly, capitalism will go away within 20 years as well for reasons that would take far too long to and some sort of egalitarian means of distributing all human necessities that will be produced in great abundance by smarter-than-we machines will become necessary.
    What is admittedly hard to grasp for those not into studying the technological singularity toward which we are heading in 30 years is the ever-increasing pace at which all technologies are and will continue to develop .
    Once you can wrap your head around the fact that these ever-rapidly increasing developments are locked in by Moore’s Law ( computing power doubles every 18 months) and the fact that smarter-than-human computers/AI will be here in less than ten years , the future becomes a lot easier to fathom.
    What the future will NOT be is what those who are ignoring what is happening all around them in technological areas imagine it to be.
    Could any of you skeptics have imagined owning and operating a smart phone with all the capabilities they have just 15 years ago ? Self driving cars ?
    Just for kicks, try Googling “when machines replace humans ” future robotics” and such and see just how ignoring clear portents for the future and dwelling in the relatively primitive technological past is negatively affecting your thinking on the far more likely future coming to us through technologies you have yet to recognize or imagine.
    “The Future Is Better Than You Think” is the subtitle for the book ‘Abundance ” in which Peter Diamandis ( Google him) and Richard Kotler describe in great detail what you pessimists are sadly missing.
    I will not respond to replies on this
    Second

  • October 31, 2014 at 7:42 am
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    I expect the Raulist reforms will end up emptying all that was “red” or Marxist from the Cuban system. The ruling party will still be called Communist, but in name only. Cuba is becoming a “plain vanilla” Fascist state.

  • October 30, 2014 at 11:02 pm
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    Convalescent on life support? 😉

  • October 30, 2014 at 10:56 pm
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    Excellent post. I fully agree. I would just add the word “red” in your last sentence: “That’s not capitalism, that’s called red fascism” 😉

  • October 30, 2014 at 12:49 pm
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    Your last paragraph says it all. An excellent summarization that all technocrats and bureaucrats in Cuba need to read and understand. This is why capitalism in Cuba under the current system will have very limited success and the U.S. embargo on Cuba will continue for the foreseeable future because the U.S. needs a free market to be interested in changing its position. In the meantime, Cubans will remain in miserable condition with the exception of those “vivos” enough to capitalize on tourism, and the migration of Cubans leaving the country (the so-called brain drain) will continue in the thousands annually.

  • October 30, 2014 at 11:17 am
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    The past few years have been hard on the US economy, and arguably the recovery from the economic crisis of 2008 has been long and uncertain. However, the long term prospects for the US economy remain very good compared to just about every other country in the world.

    To paraphrase Mark Twain, “Rumors of America’s death have been greatly exaggerated.”

  • October 30, 2014 at 7:42 am
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    There are so many factual errors in this article, and therefore erroneous conclusions it’s hard to know where to begin.

    Production by the five major oil companies is declining, but production from many smaller oil firms is increasing. The global oil industry is seeing greater diversity an competition than ever before. This is a good thing for the health of the industry.

    Projections on the size and extent of shale oil reserves around the world varies, but they are huge, larger than all of the conventional reserves. Erasmo dismisses the optimistic projections because he doesn’t want it to be true. That’s not science, that’s political advocacy.

    Venezuela’s oil industry is in a shambles, like the rest of the Venezuelan economy, because of the mismanagement, corruption and ideological idiocy of the Chavez-Maduro regime. The Venezuelan government has been co-opted by the Castro regime to keep the oil tap flowing to Cuba.

    Non-conventional oil sources do cost more to obtain & process, but that is not a problem, it’s a blessing. It means consumers will be incentivized to conserve energy use. It means innovative new technologies will be developed to exploit the still vast energy reserves.

    Finally, the Castro government has not embraced capitalism. Capitalism requires a free market and fair competition. The Raulist reforms maintain state monopolies on power under the military regime which has ruled Cuba for 55 years. They are allowing limited partnerships between the military owned state corporations and foreign corporations. That’s not capitalism, that’s called fascism.

  • October 30, 2014 at 7:21 am
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    Even as our dependence on fossil fuel wanes, there is every reason to believe that human ingenuity will prevail and other fuel sources will gain importance and become more viable. Erasmo’s political views are clearly visible here. One question: if the US economy is “convalescent” with growth for 2014 projected to exceed 3%, how would Cuba’s economy be described with less than 1% growth for 2014?

  • October 29, 2014 at 9:03 pm
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    End Times Approach? Really?

    One thing is true in this article: it is increasingly difficult and expensive to extract oil.

    But this analysis seems to be a hyper-simplification of the issue. And I do not understand how one can arrive at such a conclusion from such premises. Say that the reasoning seems a bit farfetched. 🙂

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