The concept of “peak oil” refers to the point at which oil production reaches its maximum and then levels off followed by a gradual decline. Because so much of the world’s reserves are in Saudi Arabia, and the Saudis are tight-fisted with precise information on those reserves, it’s hard to calculate when the world will hit the peak oil line. There is growing concern in official circles that we are approaching that point. For example, the British government has recently labeled concerns about peak oil as being alarmist, while the Department of Energy and Climate Change (DECC) has privately been canvassing experts for opinions and advice on peak oil contingency plans.

Contingency planning is in order, if the Bundeswehr is right. The report suggests that the likely peak oil date is 2010 – right now – and that the effects of peak oil on market and prices will begin to show in ten to fifteen years. One of the reasons the effect will be delayed will be the difficulty in separating short term market ups and downs from the long-term structural tightening of supplies. Once that begins however, the Germans expect some dire results.

Reduction in International Trade: The movement of the overwhelming majority of bulk goods world-wide relies upon cheap oil. There are lots of alternatives for generation of electricity and to an extent local transportation, but for moving things by sea it’s tough to top oil. If oil prices go up, it imposes a tariff on trade, and will gradually reduce it. The world has been getting flatter for the last couple decades. It is likely to get less flat in the next few decades.

Politics Replace Markets: China, as I wrote last year, has been making developmental investments in Africa and South America in return for guaranteed buys of oil and other raw materials. As the market is less able to meet the resource needs of every potential customers, politically-derived contracts will assume more and more importance.

Regional Economic Crises: Not every country and region will be able or willing to make the preparations necessary to deal with the tightening of oil supplies. Those which don’t will face particularly dramatic economic crises, and produce regional instability.

And that’s just a preview of the possible ramifications. Expect to hear a lot more about peak oil in the coming year.

Soldiers opened fire. Iman dropped her school bag and tried to leave the area. The bag was hit several times by rifles fire, confirming that it did not contain a bomb. As Iman tried to leave she was hit by fire from one of the posts and fell.

At this point an Israeli officer, identified only as “Captain R,” led a detachment of soldiers out of the base into the security area, in his own words “going a little nearer, forward, to confirm the kill.” He approached Iman and, according to witnesses, shot her twice in the head, turned to walk away, turned back and emptied the magazine of his assault rifle into her body. The post-mortem examination showed at least seventeen wounds. At no time in the entire incident was any hostile action taken against any Israeli soldier.

“Captain R” then transmitted the following to the troops under his command: “Anything that moves in the zone, even if it is a three-year-old, needs to be killed.”

“Captain R” was charged with illegal use of his weapon, conduct unbecoming an officer, and obstructing justice (for asking soldiers under his command to alter their accounts of the incident).

This week he was acquitted of all charges. One can only conclude this is not considered conduct unbecoming an Israeli officer.

Gen. David Petraeus, the U.S. commander in Afghanistan, attributes the climbing NATO casualties to the increased operational tempo made possible by higher troop strength on the ground. The troop surge, Petraeus argues, has allowed NATO to hit previously secure insurgent strongholds where resistance has been high.

The most likely place for the axe to fall is an elimination of the Brigade of Gurkhas. The Gurkhas are an odd part of the British armed forces in any case. The recruits are Nepalese, not British subjects, and one reason (aside from tradition) for maintaining the Gurkas in the face of budget problems in the past was their lower cost. Retiring Gurkha soldiers returning to their homeland were paid a pension only about one third that paid retiring British nationals. A second reason was a shortage of British nationals willing to volunteer for the armed forces.

The cost differential changed last year when British actress Joanna Lumley spearheaded a public drive to allow retired Gurkhas to settle in the United Kingdom with a full pension. Fair’s fair, and in my view the reform was long overdue and is one more thing to like about Lumley, not that one is needed. It did make the Gurkha’s a bit less of a bargain, and the upsurge in British recruiting for the last few years has all but sealed their fate.

Even if Britain eliminates its Gurkha battalions, the tradition will continue. When India gained its independence, the British and Indian armies split the Gurkha regiments between them. Since then the British contingent has contracted while the Indians added a seventh regiment and numerous battalions to each of the parent units.  The Indians currently have 42,000 Gurkhas (”Gorkhas” in Indian service) under arms in forty-six battalions, a strength which dwarfs the approximately 3,500 men still in British service.

Yes, it is true that we often have one party in control of the executive while the other controls part or all of the legislature, which cannot happen in a Westminster-style parliamentary government. By definition, the leadership of the majority in parliament constitutes the executive. A Westminster-style parliament also allows for a more nuanced division of political loyalties, I have been told. Divisions within parties, such as the “Blue Dog” Democrats and the Progressive Caucus of the Democratic Party, apparently don’t count.

But there is a problem with Westminster-style parliaments. What happens when no single party gets a majority? Well that’s easy. The party with the most seats forms a coalition government. But what if no one party has even a clear plurality? What if the number of seats separating the “winner” from number two is only a handful? What if there is no clear and easy coalition to form which can govern? There is a term for this outcome: Hung Parliament.

We have a Hung Parliament in Iraq right now. Even as we are withdrawing the last of our combat troops, the Iraqis are unable to form a coalition capable of governing, and so the former government continues as a caretaker government, but a largely powerless one due to its lack of a mandate and the desire of its members to find a place in whatever permanent government emerges from the chaos of political wheeling and dealing.

Sure, you say, but that’s Iraq. Of course they are a mess, but that doesn’t prove the parliamentary system is screwed up.

Here’s the thing. Right now, for the first time in history, every key Westminster-style parliament in the world is a Hung Parliament: the United Kingdom, India, Australia, New Zealand, and Canada. In the United-Kingdom an unlikely-bedfellows coalition of Conservatives and Liberal Democrats has formed a government. In India the governmental coalition includes eighteen different parties, none with a number of seats even approaching a majority. In Canada there has been a Hung Parliament across three general elections.

In Israel’s entire history there has only been one time when one party held a majority of seats in the Knesset (parliament). At present the party with the largest number of seats, (Kadima with 27) holds fewer than a quarter of the total seats and is not a member of the government of Prime Minister Netanyahu. Israel provides an object lesson in the dangers of a divided parliament. With so many parties and the country so divided, for any party to form a government it must include one or more extremist fringe parties. In catering to their agendas, the policy of the government creeps away from the center and toward the extremes, further splintering the political cohesion of the nation.

The two-party system, by contrast, tends to push candidates and policies toward the center. Sometimes this is given as a weakness of the system. I’m not so sure.

I think the handwriting is on the wall for traditional parliamentary-style governments. There are a variety of electoral and constitutional reform movements pending in all of these countries. Some are not much more than cosmetic patches but eventually more dramatic changes are nearly inevitable.

The enduring mystery for me is why we decided to saddle the Iraqis with a form of government that has so little going for it other than  nostalgia.

It is usually a good sign when someone that high up gets busted. That he was released from custody only a few hours later following the personal intercession of President Karzai is less encouraging.

Now several high-level U.S. officials have confirmed Salehi has been on the CIA’s payroll for quite some time, although in what capacity remains unclear. It is hard to think of an appropriate reason for a senior government official of a nation to be in the pay of the intelligence apparatus of another government, even an allied one. When we find out that members of the military or other government officials are getting paid by the intelligence services of Israel, for example, we put them in prison.

Salehi, it seems, is not the only Afghan governmental official on the CIA’s payroll. Ahmed Wali Karzai, governor of Kandahar province, brother of President Karzai, and repeatedly implicated in drug smuggling and influence peddling, is as well. Anonymous sources – dispute by the CIA – claim similar payments are made to numerous members of the Afghan government and Karzai’s inner circle, despite internal CIA concerns that such payments contribute to a culture of corruption and hidden private income.

Do I sound like a broken record on the subject of corruption? Too bad. This is the cancer which destroys societies.

This is the first confirmed on-the-record penetration of U.S. military classified computer systems by a foreign intelligence agency. The rumor, so far unconfirmed, is that Russian intelligence was behind the breach. According to Lynn, the pentagon’s response to the 2008 attack, called Operation Buckshot Yankee, constituted a turning point in U.S. cyberdefense strategy.

My first-ever column for Great History dealt with the issue of cyberdefense security. It is worth mentioning again that international law still lags behind the contemporary reality of warfare in cyberspace. Cyber conflict is viewed as an extension of espionage, which is not itself considered an act of war for the simple reason that just about everyone does it to just about everyone else. If it we responded with a declaration of war against everyone who spied on our military we would be at war with, among other people, Israel — and they with us for the same reason.

The question is at what point espionage becomes actionable hostility. If a program is inserted which will crash a nation’s early warning and national command control systems, does that constitute an act of war? Right now under international law it does not.

About eighteen months ago General Valentin Popovkin, a Russian deputy defense minister, announced they were going ahead with development and acquisition of an anti-satellite missile. The announcement appeared to be a diplomatic response to deployment of U.S. anti-missile missiles in eastern Europe, but work on the original anti-satellite weaponry has never really ended and was tied in to the ABM system the Soviets experimented with. Here is a link to a good summary of the work, along with progress and some nice artist renderings of the orbital interceptors.

More recently, the Russian spacecraft producer Energa has floated a conceptual design for a military satellite in the 20-ton range with an orbital life of 10-15 years and powered by a small nuclear reactor. It would have all the normal capabilities you would expect: “monitor territories and airspace, provide informational superiority – including in armed conflicts – and perform target designation and traffic control.” Of special interest, however, is the tantalizing statement that it will also have an offensive capability. What sort, and whether it is aimed at orbital control or a more ambitious capability, is unclear.

China.

Within the last month China officially passed Japan as the second largest economy in the world. Its economy, at a Gross Domestic Product (GDP) of about $8.75 trillion, is a bit more than half the size if the U.S. economy (currently at $15 trillion). China also has the third largest nuclear arsenal in the world, the second largest military budget, and is on-track to become a superpower equivalent to the United States in about twenty years.

It is on track if you just lay a ruler on the graph and draw a line straight out. It is on track if nothing goes wrong, but something is going very, very wrong. Of course I’m talking about corruption.

Last week I wrote a column about the Chinese housing bubble.  When our own housing bubble collapsed, it sent a shock wave through our economy which is still creating after-shocks. China’s has yet to collapse, but inevitably will, and it is beyond the wisdom of this author to predict the long-term effects on China’s continued growth, and even stability, when it does. Let’s just say, “Not good,” and leave it at that.

As you may recall from that column, the underlying structural cause of China’s housing bubble is rampant corruption at the local government level – broad systemic corruption throughout every region of China.

Back in 2007 the Carnegie Endowment released a report on the future of China’s economy and listed corruption as the major looming threat to its future. Why doesn’t China pass some laws and deal with it? According to the Carnegie Endowment report, China had plenty of laws. The problem was the lack of enforcement, since the corruption extends into the legal and judicial system as well.

That was three years ago. Since then, China has launched a number of new initiatives to fight corruption, but according to reporting by the BBC corruption is on the rise, not decline, and in 2010 is listed by Chinese themselves as their number one concern. Last month China announced a new set of laws addressing local corruption. The laws require local officials to report all of their assets and investments, but significantly it does not provide for the public release of this information, and without public scrutiny there is very large “so what?” element to this latest set of reforms. As in 2007, so also in 2010, you can pass all the laws you want, but laws by themselves cannot end the corruption if the structure charged with enforcing them is itself the problem.

In the mean time, China faces increasingly severe floods and, as in Pakistan, the scope of the natural disaster is producing increasing resentment at the ineffectiveness of corrupt local and regional governments to deal with the crisis.

While China is the biggest single potential disaster epicenter for growing corruption, it is by no means the only one, nor will it necessarily have the greatest effect.

The three regions in the world which have the flat-out most corrupt governments – and the slimmest prospect of any improvement in the situation – are Sub-Saharan Africa, the Middle East, and the Newly Independent States (NIS), the current catch-all for Russia and the other newly-created national governments created from the ruins of the Soviet Union.

The other thing which all of these regions have in common is that the dominant component of their national incomes comes from resource exploitation. In the case of the Middle East and the NIS, the resource in question is energy, primarily oil. When you combine a single easily-controlled resource of high cash value with corrupted governmental institutions, you have a recipe not only for disaster, but for an entirely new sort of disaster – global non-national criminal cartels with a strangle-hold on key energy supplies within the next fifteen years.

Far fetched? Here is what the United States’ National Intelligence Council said in its Global Trends 2025 report:

Over time, given their far-reaching tentacles into government offices and corporate board rooms, criminals may be in a position to control states and influence market actions, if not foreign policies. For many resource-rich countries, energy revenues provide the basis for the whole economy and energy policies are a key consideration in foreign policy decisions.

The likelihood of penetration by criminal networks is probably greatest in Eurasian markets where organized crime has been an institutionalized part of the political and economic environment and where over time organized crime figures have evolved into influential businessmen and become valuable partners for corrupt officials.

As Russian and Eurasian suppliers capture a larger and larger portion of the energy markets in Europe and Asia, we expect these organized crime networks to expand their operations, fostering greater corruption and manipulation of foreign policies to their advantage.

The only possible upside to this scenario is that they may finally getting around to making the Buckaroo Banzai sequel: Buckaroo Banzai Versus the World Crime League.

A news article  claims the January capture of Abdul Ghani Baradar, operational commander for the Taliban, wasn’t a serendipitous event, as it has been portrayed. Some Pakistanis are now either (take your pick): 1. admitting they set up Baradar’s arrest because he was cutting them out of a peace deal in Afghanistan or 2. rewriting history to inflate Pakistan’s influence in the region.

The most provocative comments are in a quote from an unidentified Pakistani security official, which includes the sentences, “We protect the Taliban. They are dependent on us.”

Here is the paragraph containing those statements and the one that follows it in the article, expressing a different view (italics added to distinguish the passage taken from the article).

“We picked up Baradar and the others because they were trying to make a deal without us,” said a Pakistani security official, who, like numerous people interviewed about the operation, spoke anonymously because of the delicacy of relations between Pakistan, Afghanistan and the United States. “We protect the Taliban. They are dependent on us. We are not going to allow them to make a deal with Karzai and the Indians.”

Some American officials still insist that Pakistan-American cooperation is improving, and deny a central Pakistani role in Mr. Baradar’s arrest. They say the Pakistanis may now be trying to rewrite history to make themselves appear more influential.

Click here to read the entire article by Dexter Filkins in The New York Times. And if you’re around a fan in the next few days, prepare to duck.