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Drumbeat: August 27, 2010
Posted by Leanan on August 27, 2010 - 10:18am
US points to oil as key to Iraq's postwar future
WASHINGTON (AP) -- When the U.S. overthrew Saddam Hussein seven years ago, the Bush administration envisioned a liberated Iraq that was rich, stable, democratic and a shining example to the rest of the Arab world.Now, with the end of U.S.-led combat operations in Iraq, the Obama administration is predicting more or less the same thing.
Both U.S. presidents pinned their hopes on Iraq's vast but underdeveloped oil resources, calculating that petroleum-fueled prosperity fed by a wave of foreign investment would give Iraqis the tools and motivation to build a modern, Western-oriented state.
But that goal remains a speck on the horizon.
Gazprom says merger may cut gas price for Ukraine
MOSCOW (Reuters) - A merger deal between Russia's gas giant Gazprom (GAZP.MM) and Ukraine's state energy company Naftogaz may lead to lower gas prices for Ukrainians, equal to Russia's domestic price tag, Gazprom's head said on Friday.Ukraine has frequently asked Russia, its main fuel supplier, to lower gas prices due to the dire state of its economy. In 2009 a pricing row between the two governments led to cuts in gas supplies to Europe.
Kazakhstan pumping up the volume
Kazakhstan may exceed its oil output target this year on the back of higher oil production from a Chevron-led venture, the head of Kazakh state company said today.
Rosneft near deal for German refinery stakes-WSJ
(Reuters) - Russian state-run oil company Rosneft is in "advanced negotiations" to gain stakes in four German refineries by purchasing a 50 percent stake in Rurh Oel from Venezuela's state-run PDVSA, the Wall Street Journal reported on Friday.
Shell reopens Nigeria oil flowstations after protest
(Reuters) - Royal Dutch Shell said on Friday it had reopened two oil flowstations in Nigeria's Niger Delta shut down two days ago due to a protest by local women over a lack of development in their community.
Chalmette refinery to shut 3 units - sources
HOUSTON (Reuters) - Exxon Mobil Corp's 196,000 barrel per day (bpd) joint-venture Chalmette, Louisiana, refinery will shut three secondary units in a reconfiguration planned to save between $8 million and $9 million per month, according to sources familiar with the plans.
America No Longer the Place to Play Gasoline - Look Abroad
Despite boasting just 5% of the global population, the United States goes through 25% of the world’s oil every year. That startling statistic is no secret – and it’s entirely understandable. After all, much of it relates to Americans’ love affair with their automobiles – one that dates back well over 100 years. And our gas-dependent ways have only increased over the past 15 years or so with the increasing popularity of large, powerful cars, SUVs and trucks.But the recession hit the auto industry hard. Truck and SUV-loving consumers drifted away from dealerships in droves. And the recession has dragged gasoline prices down, too.
Today, U.S. gasoline usage is still languishing and prices are trending lower. And while that’s a big problem for one U.S. industry, in particular, the story is very different overseas. Let’s take a look…
'Risk/reward equation' used in building gulf well, BP worker testifies
A BP drilling engineer involved in the planning of the Macondo well declined to testify before a federal investigative panel Friday, invoking through his lawyer his Fifth Amendment right against self-incrimination.Mark Hafle, who was involved in some of the most heavily scrutinized decisions about the well, became the third BP employee to invoke his constitutional right not to answer questions from the panel. Hafle had testified in an earlier round of hearings.
Feinberg Challenged by State Attorneys General on BP Claims
Kenneth Feinberg’s effort to pick among claims on BP Plc’s $20 billion fund for victims of its oil spill has attracted a group of self-described watchdogs: attorneys general from affected Gulf Coast states.“I’m certainly not going to give it my Good Housekeeping seal of approval,” Mississippi Attorney General Jim Hood, a Democrat, said in an interview.
Construction of nuclear fuel-storage facility to begin
TOKYO — The Economy, Trade and Industry Ministry’s Nuclear and Industrial Safety Agency on Friday gave the green light to the construction of a facility for storing spent nuclear fuel in Aomori Prefecture. The agency sanctioned Recyclable-Fuel Storage Co, set up by Tokyo Electric Power Co and Japan Atomic Power Co, to build the facility in the city of Mutsu to store spent nuclear fuel for about 50 years before reprocessing.
Prince Charles to install solar panels on his home
Prince Charles, an ardent environmentalist, has received permission from the Westminter City Council to install solar panels on the roof of his 180-year-old home in London.Once the panels are generating electricity, Clarence House will become "carbon negative," producing more power than it uses, The Daily Telegraph reports. It became "carbon neutral" three years ago.
Norway hydro can aid Europe move to renewables: IEA
(Reuters) - The International Energy Agency said Norwegian hydropower could provide the reliable base Europe needs to invest in solar, wind and other renewable energy forms and urged Norway to expand cable links to other countries."Norway can help Europe introduce more volatile renewable energy sources into the market by providing a sustainable backup," said Nobuo Tanaka, the agency's executive director, in an interview on Friday at a renewable energy conference.
Organic food grows on acre of New York City rooftop
Brooklyn Grange, an organic farming business, is using a 40,000 square-foot rooftop (nearly an acre) in Queens to grow hundreds of thousands of plants. Its website says tomatoes are one of its biggest crops but is also grows salad greens, herbs, carrots, fennel, beets, radishes and beans. It farms nine months of the year, using cover crops like rye, buckwheat, vetch and clover in the winter.
Wind Turbine Projects Run Into Resistance
BARSTOW, Calif. — The United States military has found a new menace hiding here in the vast emptiness of the Mojave Desert in California: wind turbines.Moving turbine blades can be indistinguishable from airplanes on many radar systems, and they can even cause blackout zones in which planes disappear from radar entirely. Clusters of wind turbines, which can reach as high as 400 feet, look very similar to storm activity on weather radar, making it harder for air traffic controllers to give accurate weather information to pilots.
Although the military says no serious incidents have yet occurred because of the interference, the wind turbines pose an unacceptable risk to training, testing and national security in certain regions, Dr. Dorothy Robyn, deputy under secretary of defense, recently told a House Armed Services subcommittee.
Because of its concerns, the Defense Department has emerged as a formidable opponent of wind projects in direct conflict with another branch of the federal government, the Energy Department, which is spending billions of dollars on wind projects as part of President Obama’s broader effort to promote renewable energy.
China: Farmland, water shortage may threaten grain output
BEIJING - The growing shortage of farmland and water resources may prevent China from achieving its ambitious grain output targets in the next decade, warned both officials and experts.Acute shortages of reserve farmland and water resources are now the main restraints for the country to ensure its food security, Zhang Ping, minister of the National Development and Reform Commission, said on Thursday while making a report to the top legislature.
Analysis: Gulf Drilling Costs, Regulations Likely to Rise
The Macondo oil spill in the U.S. Gulf of Mexico has set the stage for dramatic changes to the deepwater exploration industry, with future costs of drilling and operating in the Gulf expected to rise considerably, according to a white paper released by New York-based Grant Thornton LLP.While certain cost increases can be attributed to natural market forces, such as insurance and capital providers repricing the risk of drilling and operating in deepwater, other costs increases will result from significant changes in regulatory policy, which are currently being discussed by Congress, according the study, The Implications of the Oil Spill on Deepwater Exploration and Production.
The repricing of risk in conjunction with proposed regulatory changes will have drastic long-term implications for exploration and production (E&P) companies.
Norway eyes up to $16 bln new Sleipner investments
STAVANGER, Norway (Reuters) - Norway said on Friday that oil and gas field developments in the Sleipner area of the North Sea could lead to investments of between 80-100 billion Norwegian crowns ($12.72-$15.91 billion).The Norwegian Petroleum Directorate said the total oil and gas resources under development in the area, which is already a gas hub for Norway, amounted to some 110 million standard cubic metres oil equivalents (692 million barrels).
More federal waters in Gulf reopening to fishing
NEW ORLEANS -- The U.S. government is reopening more federal waters in the Gulf of Mexico for commercial and recreational fishing that had been closed because of the massive oil spill.Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, told reporters Friday that the government is reopening 4,281 square miles of federal waters off the coast of western Louisiana.
Acrimony Behind the Scenes of Gulf Oil Spill
HOUSTON — Richard Lynch was walking down the hall in BP’s crisis command center in early May when some engineers rushed up, bearing bad news.“We’ve lost the cofferdam,” they said.
West Coast Gasoline Drops as Refiner Demand Ebbs, Supply Gain
Spot gasoline on the West Coast weakened as demand from California refiners with units undergoing repairs ebbed and inventories along the West Coast climbed for a third week.Supplies of motor fuel in the region climbed 2.5 percent to 29.5 million barrels in the week ended Aug. 20, the Energy Department said in a report yesterday. That’s the highest level since the end of May and 11 percent higher than a year earlier.
“There’s no refiner support, the buying seems to have dried up,” said Mark Mahoney, a broker at Energy Brokers Inc. in Seal Beach, California. “There’s no shortage of supply.”
Brazil Delays Decision on Price Petrobras Will Pay for 5 Billion Barrels
Brazil delayed a final decision on the price that state-controlled Petroleo Brasileiro SA will need to pay for 5 billion barrels of oil reserves while the country analyzes more information, Cabinet Chief Erenice Guerra said.Talks may extend into September, Guerra told reporters today in Brasilia. On Aug. 17 Energy Minister Marcio Zimmermann said negotiations between the government and Petrobras on the price for the reserves would be completed by about Aug. 24.
ME gas oil prices decline on cancelled Pakistan cargoes
KHOBAR, SAUDI ARABIA — Gas oil prices in the Middle East region have dropped, weighed down by cancelled cargoes from Pakistan due the country’s devastating floods, traders said.
Worrying numbers for Mr Chávez
According to the Economist Intelligence Unit, “even with the rise in oil prices, there is considerable doubt about Venezuela’s oil production and oil export figures – which account for 95% of foreign-exchange earnings and more than half of government revenue. Independent estimates suggest that Venezuela’s output and export volumes have been falling and that official data for the sector may be inflated.”
Factbox: Lack of progress on reforms holds Mexico back
Mexico, which nationalized its oil industry in 1938 and created state oil monopoly Pemex, is a top supplier of crude to the United States. But years of underinvestment have left it unable to counter the fall in crude output since 2004.Pemex thinks there are massive oilfields in the deep waters of the Gulf of Mexico, but it lacks the technology to quickly produce there. Mexico's Constitution bans foreign direct investment in the energy sector, which keeps major oil companies out of crude production in Mexico.
Iraq is still many years away from stability, whatever Obama says
The double whammy of Ramadan and August - almost an entire nation fasting in the biting, 50-degree heat of high summer - might be expected to stupefy this entire nation. But on the US east coast the President had no such excuse. Barack Obama staged a less theatrical version of his predecessor's ''Mission Accomplished'' claim about the war before retreating to Martha's Vineyard for a family holiday.
Detroit making big bet on small cars
Can Detroit finally be thinking small is beautiful?In the decades since the twin oil shocks of the 1970s, Detroit automakers have staged a steady retreat from the passenger car market, seemingly content to focus on the more profitable light truck side of the business while letting their Asian rivals divide and conquer the various sedan and coupe segments.
I argued that to reduce ecological footprint and solve the unemployment crisis, hours of work should be reduced. This shares the available work and reduces pressure on eco-systems. The additional time off work available to households can then be deployed to what visionary philosopher Fritjhof Bergmann has called high-tech self-providing. That is, people make and do for themselves in areas such as food, shelter, energy, clothing and small manufactures. The high tech dimension is that the methods of production used require sophisticated knowledges and skills and in many cases, computers and other high-technology machinery. With HTSP, small scale production is high productivity and therefore sensible to undertake in an advanced modern economy.
Q and A with author Bill McKibben
Bill McKibben, a Lexington native, environmentalist, and writer, will be returning to Lexington Sunday to speak at Cary Hall. McKibben, the author of several books and a former staff writer at the New Yorker, will be speaking about his new book, "Eaarth: Making a Life on a Tough New Planet," in which he argues that humans have created a new, practically unrecognizable planet.
Perhaps the single most important policy-related insight in economics is that changes in policies lead to behavioral responses. More generous unemployment insurance leads to longer spells of unemployment; implicit government guarantees of financial institutions lead to too much risk-taking. Well-designed policies, like a congestion tax or carbon tax, can reduce social problems by getting the right sort of behavioral response; interventions that create an offsetting behavioral response can push the world in the wrong direction.That insight is associated, above all, with the great English economist William Stanley Jevons, who started worrying about energy conservation 150 years ago.
Peak oil: two words to worry about
As if you don't have enough to worry about, add two more words to your list: peak oil.Forget climate change -peak oil is the biggest problem on the human horizon according to some. Bullcrap, say others.
The idea is actually hard to explain, which may be why many have never heard of it. But if the peak oil theory is true, it will affect us all drastically, so it's worth a shot:
Energy use is way down - but wind surges
NEW YORK (CNNMoney.com) -- Energy use in the United States fell nearly 5% last year, marking the largest annual drop on record, according to an analysis of federal data by the Lawrence Livermore National Laboratory.Total U.S. energy use fell in 2009 to an estimated 94.6 quadrillion British Thermal Units, down from 99.2 quadrillion BTUs in 2008. To put that in perspective, the average room air conditioner uses about 10,000 BTUs.
Crude Oil Heads for Third Weekly Decline on Concern Recovery Is Faltering
“Near-term fundamentals in the crude market are far from rosy, having deteriorated lately due to excess supplies and waning demand,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Persistently negative macro data is continuing to weigh on prices.”
Crude Oil May Rise After Failing to Drop Below Support Level, Survey Shows
Crude oil may rise next week after failing to break through a technical support level, a Bloomberg News survey showed.Twenty of 49 analysts, or 41 percent, forecast crude oil will increase through Sept. 3. Seventeen respondents, or 35 percent, predicted that futures will be little changed, and 12 projected a decline. Last week, 39 percent of analysts forecast a drop.
Frontline Says Tanker Operating Profit Will Drop as Freight Rates Collapse
The forecast stems from “current weakness in the tanker market,” said Frontline, which is led by Norway-born billionaire John Fredriksen. Daily returns from hauling 2 million-barrel cargoes of Middle East crude oil to Asia, the industry’s benchmark route, slid 87 percent since Jan. 19 to $11,126, according to the Baltic Exchange.
Chevron Remains Committed to Deepwater Drilling
I caught up with Chevron’s vice president for global exploration this week to ask him what impact the BP well disaster and the drilling moratorium in the Gulf of Mexico would have on his company’s plans for future deepwater development.
Climate Failures May Stoke Record Coal Trading
(Bloomberg) -- Coal trading is poised to rise to an all-time high this year as prices at less than half their 2008 peak stoke demand, defying government efforts to phase out the most-polluting fossil fuel.The volume of coal derivatives bought and sold around the world may jump as much as 46 percent this year to 2.3 billion metric tons, based on data from exchanges and brokers, according to Guillaume Perret, founder of Perret Associates Ltd. and a former trader at RWE AG, Germany’s second-biggest utility. That would exceed the record 2.2 billion tons traded in 2007.
Danielle Becomes Category 4 Hurricane, 2010 Season's Strongest
Both Earl and Danielle are being deflected away from the U.S. by a low-pressure trough along the East Coast, according to Jim Rouiller, senior energy meteorologist at the commercial forecaster Planalytics Inc. That barrier may break down soon and open the way for storms, he said yesterday.“I’m beginning to feel more and more confident that the Gulf and Florida will become targets for hurricane strikes as we approach and move through the Labor Day weekend,” Rouiller said. “Once this trough is removed, the U.S. seaboard along with the Gulf will be under the gun.”
Afghanistan drills oil for first time in north
KABUL (Reuters) – Afghanistan, believed to be sitting on top of billions of dollars worth of minerals and energy sources, has extracted oil for the first time and plans to pump a modest 800 barrels a day, officials said on Thursday.
Bharat Petroleum Says Losing Marginally From Selling Gasoline Below Cost
Bharat Petroleum Corp., India’s second-largest state refiner, is losing marginally from selling gasoline below cost and as much as 2 rupees a liter on diesel sales, an official said.“There is a marginal deficit on petrol and we are free to revise prices whenever we want,” Finance Director S.K. Joshi said by telephone from Mumbai today. “We will take a call at an appropriate time.”
BP's Hayward won't testify next month
WASHINGTON – Outgoing BP CEO Tony Hayward has refused a request by U.S. senators to testify next month about BP's role in the release of the man convicted of bombing Pan Am Flight 103 over Lockerbie, Scotland.
Iraq seven years later: Was the war worth it?
In a USA TODAY Poll, 60% of Americans say "No," when asked "Do you think the situation in Iraq was worth going to war over?" Similar majorities either felt that the war did not make the USA safer from terrorism or made no difference. The same was said of whether the political situation in the Middle East is more stable.
Implementation the crux for China energy plans - IEA
BEIJING (Reuters) - A massive $736 billion energy investment plan could make China the world leader in renewable energy and help meet global CO2 emissions targets, but turning words into action might prove challenging, the chief economist with the International Energy Agency said on Friday."It is definitely very good news for China but also, looking at the implications for energy markets and the climate, very good news for the rest of the world," Fatih Birol told Reuters in a telephone interview.
China builds base to tap deep-sea energy: state media
BEIJING (AFP) – China will build a multi-million-dollar research base on its east coast as it steps up its efforts to search for energy sources and rare earths on the ocean floor, state media said Friday.
China's nuclear power capacity to see 7-fold increase in next 10 years
In order to fulfill the promise made at the Copenhagen Climate Change Conference, the proportion of China's non-fossil energy should reach 15 percent, including 4 to 6 percent of energy provided by nuclear power by 2020, said an official from the Energy Research Institute under the National Development and Reform Commission, according to a report from Shanghai Securities News.The official said that under an initial estimate, China's scale of nuclear power should reach at least 75 million kilowatts in order to achieve the target by 2020, while currently, China's nuclear power installed capacity is only 9 million kilowatts. Therefore, China expects to increase the installed capacity as high as seven to eight times in the future.
Is wind power a viable alternative to low-cost fossil fuels? Consider this: relying on windmills to reduce greenhouse gas emissions not only is expensive and ironically harmful to the environment, it won't accomplish its main goal.
Yahoo Builds the Nostradamus of Search Engines
Bold predictions are made every day. We'll reduce our carbon emissions by 50% in 20 years, boast business leaders. No, make that 80% in 15 years. We'll cut the deficit in half by 2015, pandering politicians claim. That leaves us with dozens of conflicting estimates and ballpark figures that are soon forgotten. It's hard to hold experts to their predictions, but that could all change soon thanks to an experimental search engine from Yahoo.Developed by the company's Barcelona research lab, Time Explorer is a search engine for the past, present, and future. Results are displayed on a timeline that stretches years back and forward. Move your mouse over the future part of the timeline, and you get predictions for what was supposed to happen in that year from as much as 20 years ago. For example, the timeline for "North Korea" lets us know that the rogue state should have developed some 200 nuclear warheads-- according to an innaccurate op-ed in the New York Times by Nicholas Kristof in 2004.
Seven Out Of Ten Kiwis Want Govt To Prepare For Peak Oil
Research from Colmar Brunton released today (27 August) finds the Government's draft energy strategy does not deliver the action that the majority of New Zealanders want for securing access to affordable alternatives to petrol and diesel in the future, as cheaper, easy-to-reach oil supplies decline around the world and oil prices rise.The poll, commissioned by WWF, finds the majority of New Zealanders (72%) think the Government should prepare now for future oil price rises by investing in alternative fuels and in public transport. However, the Government's draft energy strategy proposes taking no action to help New Zealanders and instead it proposes to 'wait and see' what happens once petrol and diesel becomes less affordable.
Janaia Donaldson and Robyn Mallgren of Yuba Gals Independent Media have donated DVDs of 172 “Peak Moment TV Conversations” to the Nevada County Library.
Climate control is achieved by a geothermal system that relies on the fact that, 200 feet below the surface, the soil stays at 55 degrees; antifreeze pumped through the walls heats or cools the house. There are two photovoltaic arrays (one on the roof, another in the backyard) that produce electricity on sunny days, and a separate system that provides solar hot water.The house is only the second in Wisconsin to receive a LEED platinum rating. LEED standards sometimes reward large, wasteful houses simply for using green technologies, but here green wasn’t an add-on. Mr. Osborne and Ms. Scekic made sure the house stayed compact — just 1,900 square feet — by restricting themselves to a single-car garage and a single bathroom on the upstairs level, Mr. Johnsen said. “I can’t think of the last time we built a house in which the family shared the bathroom,” he said.
Backyard chickens are fun, and lay the best eggs
When produced in a home environment, eggs offer more to recommend them than the supermarket variety. Not only are they invariably much fresher and their flavor enhanced at least five-fold, they're also superior when you consider environmental sustainability and animal welfare.Then there's all that entertainment value. If you've never lived near a chicken, what can I say but … you're missing out. They're that funny. OK, so they're that stupid, too. Lovably so, though, I promise.
Kremlin Relents, for Now, to Foes of Highway
MOSCOW — For years, environmentalists have risked arrests and sometimes beatings by the police and masked plainclothes thugs in their efforts to halt the construction of a highway linking Moscow to St. Petersburg that they say would destroy the Khimki Forest, one of the few remaining in the Moscow region.Typically in Russia, such efforts lead to little but holding cells or worse for proponents of a cause. But supporters of the Khimki Forest were handed a surprising victory on Thursday when President Dmitri A. Medvedev reacted to the public outcry. He postponed construction of the highway. “Given the number of appeals, I have made a decision,” Mr. Medvedev said in a message on his video blog. “I order the government to halt the implementation of the decision to build this highway and conduct further civic and expert discussions.”
Analysis: Are EU carbon offset limits a boon for brokers?
(Reuters) - New European Union proposals to limit the use of industrial gas carbon offsets in its emissions trading scheme from 2013 could be a boon for reeling carbon brokers as exchanges wait for clarity before they alter their offerings.
It's Not Environment vs. Economy: Green Is the Path to Prosperity
The most thorough studies -- such as the well-regarded Stern Review on the Economics of Climate Change -- tell us that the cost of ignoring climate change (including the possible devastation to our species) will be far higher than addressing it. Using less energy and material, or switching to electric vehicles and renewable energy, will help everyone from homeowners to businesses save money. As one CEO said to me, "I don't know about climate change, but it seems pretty clear that producing less carbon is better than producing more."
A Newspaper Apologizes to United Nations’ Climate Chief
Last December, Britain’s Sunday Telegraph newspaper published a 2,000-word article accusing Rajendra Pachauri, the chairman of the United Nations’ Intergovernmental Panel on Climate Change, of potential financial conflicts of interest.On Sunday, The Telegraph made an abrupt about-face, pulling the story from its Web site and apologizing to Dr. Pachauri. The occasion for the retraction was the release of an audit of Dr. Pachauri’s finances by the international accounting firm KPMG, which found that he had, in fact, made little income from his outside dealings since 2008.
Protection sought for San Bernardino flying squirrel
Environmentalists have petitioned the U.S. Fish and Wildlife Service to list the San Bernardino flying squirrel, a nocturnal glider native to Southern California mountains, as an endangered species threatened by climate change.
Feds seek to toss states' anti-warming lawsuit
WASHINGTON -- To the dismay of environmental groups, the Obama administration has told the U.S. Supreme Court that a global-warming suit by California and seven other states, seeking to require major power companies to reduce their greenhouse gas emissions, should be dismissed.
NASA/NOAA Study Finds El Ninos Are Growing Stronger
A relatively new type of El Nino, which has its warmest waters in the central-equatorial Pacific Ocean, rather than in the eastern-equatorial Pacific, is becoming more common and progressively stronger, according to a new study by NASA and NOAA. The research may improve our understanding of the relationship between El Ninos and climate change, and has potentially significant implications for long-term weather forecasting.
Receding ice could unlock arctic trove
HELSINKI, Finland (UPI) -- Receding arctic ice from global warming may open new avenues for tourism and trade and could reveal vast new natural resource reserves, researchers say.
Fighting Against a Global Dust Bowl
The problem has been building for a long time. Wars, oil and gas exploration, agriculture, cattle production, and general development have broken up soil surfaces around the world. Drought, rising temperatures, and a shift in some regions from grasslands to shrublands have accelerated the problem in the past 10 to 15 years. In the United States, the loss of grasslands and other natural shields that hold arid soils in place is particularly pronounced in New Mexico, Arizona, and Nevada, where dust production has increased by orders of magnitude over the past several decades. And dust begets more dust: It reduces the reflectance of the winter snowpack and increases the absorption of sunlight, causing snow to melt sooner. Five times as much dust now falls on the snowpack in the Colorado Rockies as when the area was first heavily settled in the mid-19th century.
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More major U.S. corporations join boycott of Alberta oilsands fuels
See: http://www.winnipegfreepress.com/canada/breakingnews/more-major-us-corpo...
Cheers,
Paul
Posturing and spin. How many of their products are made overseas? Domestic transportation is a drop in the energy bucket used in global transport and production, let alone the exploitation of poor societies for product construction.
yuppie bandits pretending to care.
hey, my apologies for being a red neck Canadian. Paul
No need to apologize, Paul; you are what you are. Nonetheless, those who choose to ignore, dismiss or clumsily engage campaigns such as this do so at their own peril.
Cheers,
Paul
I'm a green necked Canadian and agree with your assessment. So there's now both shades of neck sticking out the same way.
I don't care if they care and don't expect them to care. They have apparently concluded that their bottom line is impacted by their fuel choice. Good.
yuppie bandits pretending to care.
The only vote you have that matters is where you spend your money.
Go into the grocery store, katsup isle. Note the national chain 'now with no HFCS' A "yuppy concern' to not have HFCS? Perhaps. Yet their sales have improved.
Where the money gets spent can change things.
Such moves as boycotting the oil sands oil may have some symbolic importance and undoubtedly help know nothing yuppie types living in McMansions and driving Mercedes to fetch a six pack and a loaf of bread feel better, to feel as if they are doing something.
The people responsible for such posturing at corporate level know that the public is too stupid to renmember words such as "fungible";thinking requires more than ten to twenty seconds, which is about the length of thier feel good advertisements.
Now if they were to announce that they are buying more efficient trucks, or specifying that thier goods come in LESS throwaway packaging, or putting solar water heaters up to supply hot water for the rest rooms.....
But that means actual work and investment.
We all know by know that that sort of thing is so ARCHIAC, that prosperity these days is to be had by manufacturing it out of hot air and public relations, right?!
This other thing requires only a managers meeting and a memo to the purchasing dept and cost nothing except for the money wasted on advertising it.
Not one drop less of oils ands or tar sands oil will be burnt as a result.
Hi Mac,
Corporate image is important; one has only to look to BP to understand how things can quickly spin out of control. And there can be collateral damage (see: http://www.draytonvalleywesternreview.com/ArticleDisplay.aspx?e=2725336).
Cheers,
Paul
Hi , Paul,
I must admit that if I were on the corporate board or a pr specialist within the company, I would find it EXPEDIENT to make the same move and advertise it of course.
I do undrestand the importance of image-especially in such a cutthroat business as drug ans convenience stores, where there is little other than image and good service to keep a company viable.
But my point is still valid;they are doing nothing useful (by boycotting tar sands oil) about the real problem which is the excessive use of oil.
Some other purchaser will be glad to buy what they don't;and in the end, even more oil may be used, if they wind up buying oil shipped from farther away.
I am just so fed up with half truths and obfuscations and outright misrepresentation of the truth just about anywhere I turn thatI want to puke.
Nevertheless such pr campaigns might have some small amount of utility in gradually getting the message that we are running short of oil out to the public.
So maybe all is not wasted.
Hi Mac,
Most of us drive into a forecourt, fill our tanks and drive off, without any thought as to the social, political, economic and environmental consequences. With the invasion of Iraq and war on terror, the Gulf catastrophe, concerns related to AGW and now this campaign against the Alberta oil sands, maybe, just maybe, some of the dots can be connected and we'll better understand what's at stake and act accordingly. One can only hope.
Secondly, there are serious environmental impacts associated with the Alberta oil sands development that are worthy of discussion and perhaps this campaign will ultimately do some good. Let's hope for that too.
Cheers,
Paul
It's all very touchy-feely for a company to announce that it will not use fuel from the oil sands, but it's being very myopic. For instance, about a third of California's oil production is nearly as tar-like as the Canadian oil sands. It's produced by steam injection techniques similar to those used for in-situ oil sands production. In fact, in the more fluid parts of the oil sands, the techniques used are identical.
The United State's onshore oil reserves are nearly exhausted, and only deep-water offshore is keeping production as high as it is. Once that is gone, the default option is imports. The US currently imports about 2/3 of its oil consumption, and nearly 25% of that comes from Canada. Canada's conventional oil reserves are almost gone, too, and if it were not for oil sands, it wouldn't be exporting any oil at all.
Realistically, things are not very good anywhere, the world's conventional oil reserves are running out, and most of what is left is either of very low quality, or from a country with an abysmal human rights record. Take your choice.
Probably not, however it's harder to justify massive expansion of the tar sands extraction industry, or to imagine it being a major source of new oil supply when major corporations are taking it upon themselves to avoid all oil products from there.
It could as readily be an affectation of the wealthy. Being tough on fungible commodities is easy during an apparent glut, especially when you're in one of the few growth industries.
The demand for tar pits sludge will not be affected by some corporations trying to increase sales to us tree worshipping pagans. The sludge will simply be consumed by others.
It would possibly be more effective to attempt to force the tar pit apologists holding office in Edmonton and Ottawa to change direction (beginning with a recognition that the opportunity cost of the investment in the pits outweighs the economic benefit to the provincial and national economy; i.e. redirecting investment into conservation will produce more energy --negawatts-- and more jobs, tax revenue, etc) by organizing a campaign to kick Canada out of international hockey competitions.
Then by the same token they should be boycotting or avoiding oil and gas products from the Gulf of Mexico, Nigeria, Angola, ad nauseum. Since when has major corporate group-think been a clear indication of a sound comprehension of the facts or social conscience? Just look at GM and the Aztec, case closed. And Wal~Mart?? Now there's the pot calling the kettle black.
So it's OK to nearly wipe out an entire sub-tropical marine ecosystem but not a marshy, bug infested Boreal wasteland? Hypocrisy works both ways. The surface extraction methods will eventually come to an end of life and the in-situ technologies start to take over. Plans are afoot to supply the in-situ extraction with renewable, clean energy sources changing the Oil Sands from pariah to golden (green) child - so to speak, as much as FF can be thought of as clean and green.
Sorry BC;
First, I don't see anyone saying the BP oil spill is "OK" .. people have all sorts of suggestions for how to show BP justice.. I just think that 'Boycott' is going to sound like 'a Stern Look' compared to what they have in mind.
..and I'm ready to personally put the handcuffs on whoever is going to start the Sales-Pitch for "CLEAN CRUDE" - but I'm sure it's coming.
Jokuhl, its a point about hypocrisy. Or, how they conveniently choose to ignore one disaster in their own back yard while castigating another in a "foreign" land. Americans can be quite xenophobic when it suits their jingoism.
Oil Drum Readers might enjoy this:
"CHINESE CELEBRATE AS THEIR LIVES BECOME AS POINTLESS AND FRUSTRATING AS OURS"
http://www.thedailymash.co.uk/news/international/chinese-celebrate-as-th...
Warning: Strong language
having experienced death as a real possibility on two occasions, i am of the belief that the opposite is true, at least i tend to worry more about the abstract than the practical. istm that death is so scary because it is abstract. the grim reeper actually knocking at the door is not nearly as scary, trust me.
but maybe that is what the rabid doomers are pushing:scary scary peak oil. booooooooooooooooo ! all rabid doomers run and hide under the bed.
Elwood, is it remotely possible that you could post without slinging insults at all others who do not see the world exactly as you see it?
The article deals with the anxieties of a nation moving from an agrarian economy to a commercial economy where people must deal with constant competitive pressures and where the future is always uncertain.
But you turn it into a platform to bash those of us who believe that the decline in fossil fuels will cause even greater stresses on our already very overpopulated world.
Can't we simply carry on a decent conversation without getting insultingly personal? Or, are you one of those whom Elbert Hubbard had in mind when he wrote:If you cannot answer a man's argument, all is not lost. You can still call him vile names."
Ron P.
Perhaps you could clarify your concern. Are you troubled by the adjective 'rabid' and its association with mouthfoam, or the suggestion that your ilk seek out the protection of an overhead mattress whenever your imaginations default to the biblical apocalyptic endtimes scenario?
Perhaps you, like Elwood, would in the future, try to attack the argument rather than attacking the person making the argument. Or, in this case, try attacking the argument rather than the group of people who make such arguments.
As Tstreet points out below: "ad hominem attacks do nothing to bolster your point of view and probably detract from it."
Ron P.
You don't have a rational argument. Therefore, reasonable people are left to speculate on the psychological basis of your apocalytical tendency.
My own take is that, despite your anti-religious rantings, you have never escaped the world view expounded under the canvas of the southern bible thumpers' big tent.
By the way, if you want to learn something about population trends here is a good summary:
http://www.grist.org/article/2010-07-11-on-world-population-day-take-not...
For starters Elwood attacked all doomers not just me. But you...
That is nothing but a pure ad hominem attack. You have taken Elwood's ad hominem attack on all doomers and reduced it to an ad hominem attack on my person only.
* Argumentum ad Hominem
Translation:
"Argument against the man" (Latin)
* The Fallacy of Personal Attack
Great article. I would suggest you read it.
Ron P.
all rabid doomers
ra-bid
–adjective
1. irrationally extreme in opinion or practice: a rabid isolationist; a rabid baseball fan.
And here I was thinking that I was helping you to realize the benefits of Socrates' injunction to know thyself.
As for the article, I hope you note that the population ship has now almost fully engaged reverse gear.
Perhaps even earlier than Philipp Longman postulated in "The Empty Cradle", the world will soon have to feed less and less people every year. And all following a change in behaviour in the bedroom, not on the battlefield as rabid doomers endlessly declare.
Toil,
Please state your estimate of 'soon', as in the first year that the World will have to feed less people than the year before. And to be clear, the first year that the World will have fewer people than the year before. Many estimates I have read put that year as somewhere around 2050. The idea that population would decline thereafter is speculative. Perhaps 9.5 Billion will be the top (plateau) of an S-curve. If so, that doesn't sound sustainable...at any rate I disagree with you and think predict that over-population, pollution, and resource declines will lead to population declines in less benign ways than you hope for.
Your use of the phrase 'the World population ship has now almost fully engaged reverse gear' strikes me as misleading at best, perhaps wishful thinking. Since the global population has rapidly increased over the past couple of hundred years, I would take 'reverse gear' as meaning that the population is now declining, when you of course meant that the rate of population growth has declined.
Based on an analysis of the changing population structure, Longman times the change from increasing to declining population at about 2075. It could be earlier.
Speculation comes in different qualities. The best speculation about future oil production has been based on structural analysis: for example, feet of pipe per unit of hydrocarbon produced or number of wells per unit of energy. I suggest you look at trends in the average age of first pregnancy, number of children per woman, as well as trends in childhood mortality
When a ship's engines are fully in reverse, it still takes time for the ship to lose its forward motion.
I was helping you to realize
Feel free the next time he goes on his Islam rant to point back to his "I am not a bigot" post and when he's Ad Homineming it up to post a link back to this page about ad hominem.
battlefield as rabid doomers endlessly declare.
The US of A is spending over 50% of its budget for the military.
Sure seems to me that the battlefield is gonna get some play with that kind of spending.
Unless the 50+% is just welfare and there is no constitutionally declared war going on.
Obviously military expenditure in the US (and elsewhere) is a way for right wingers to be Keynesians, without admitting that Keynesian models are the only currently realistic guide for good economic policy. Fortunately, some of the military expenditure does achieve beneficial social goals, such as a certain degree of job training, some measure of racial integration, some good research in alternative energy, and so on. On balance, though, the military budget represents a large waste of resources, with huge opportunity costs. Still, it could be worse. The economic space occupied by the military-industrial-national-security-state-complex could be occupied by an even larger fast 'food' industry, or by an expanded golfing industry.
Toil,
While I agree with the gist of the article at the link you posted, that consumption needs to be throttled back in order for humanity to become more sustainable, I am not sanguine about the population increase tapering off as quickly as the author suggests.
Since there may be a relationship between increased material consumption and decreased fertility, what happens if economies and consumption stagnates or contracts? Will that lead to a higher birthrate?
Of course decreased fertility does lead to higher material/services consumption, which does serve to motivate a lot of males to support their wives decision to bear fewer children.
As the article points out, people of all religions, in all types of political regimes, and at all income levels are trending to declining and negative growth rates.
Declining 'premature' death rates, due to public health measures, initially result in a rapidly increasing population, but then, as the infant and childhood mortality rates fall, reducing the need for 'insurance', the cultural practices that support multiple pregnancies erode and family size begins to fall. New cultural norms emerge and small families become the 'way things are'.
The same brainpower that generates public health measures produces new agricultural techniques that increase food supply to match demand. The availability of cheap fossil fuels has steered agricultural technology along certain lines. But the thing to remember is the capacity of the brainpower. Persons of the doomer persuasion, generally of limited imagination, just can't seem to get their heads around the mechanisms for our species' adaptive success.
I appreciate the fact that there is another point of view and fear that I may not be objectively evaluating all the information out there. I would appreciate it if people like you would make the case that there is no cause for doomerism. However, ad hominem attacks do nothing to bolster your point of view and probably detract from it.
Elwood, I will see your two scarey scenes, and raise you a revival.
I agree... it is no longer a fearful thing. OTOH, I am more aware then ever of the growing danger, and increasingly unavoidable fall of our civilization. At least as we know it.
That makes me a doomer, I guess. And, it makes me a transition advocate. I have 9 grandchildren (latest count... I did NOT recommend this, and must deal with it). I would really like to help provide a place where survival has better odds; and encourage education in survivalist skills and technologies. I believe that, though we are throughly screwed, we are not really doomed. Some will survive. Perhaps as many as 1 in 6, or 1 in 7. Evolutionally, I suppose, I want to see that my genes are well represented in that group of survivors.
Not making my beliefs public... refusing to discuss peak oil, peak gas, peak coal... declining involvement in remediation of AGW. These are all ways to not be a doomer. And they all seem rather selfish to me.
So, I will go on, speaking doom.
Thank you.
Craig
Re: "CHINESE CELEBRATE AS THEIR LIVES BECOME AS POINTLESS AND FRUSTRATING AS OURS"
My guess is, it would be something like this: "Man stuck in Audi, have ass in jam"
Or: "The greatest shortcoming of the human race is our inability to understand the exponential function." Oh, that was Dr. Albert Bartlett.
German Armory Transformed into Stunning Solar School
See: http://inhabitat.com/2010/08/27/german-armory-transformed-into-stunning-...
Cheers,
Paul
Peak oil: two words to worry about
Actually, no, its NOT hard to explain. Its just most people have comprehension problems.
Human civilization has been around for 10,000+ years. How anybody can call 4 decades worth of anything a lot in the big scheme of things is beyond me.
No, oil was finite to begin with. It doesn't ever "become finite." and we don't "start to run out" We were running out from the day the very first well was sunk. (discounting new oil creation over geologic timescales)
The real problem here is a journalist trying to explain a concept they don't understand themselves. As usual...
Referring to the 300 transition towns he says:
Well, 300 transition towns at say 1,000 people each would be about four one thousandths of one percent of the population of the world. Well, that's a start and it is certainly commendable of those who are doing this. But, looking at the world as a whole, is this something really amazing? And do the efforts of these people make the prospects of declining fossil fuels in a world already deep into overshoot less frightening?
I would never knock people who are making preparations for the coming collapse. That is people who are trying to save their own butt rather than save the entire world. After all, I have been advising them to do exactly that for several years now. But we must never deny the hard truth. That truth is this may make things better for our own personal world but will not do a damn thing for the world as a whole.
Ron P.
Thanks, makes perfect sense.
I can only assume you are referring to D's percentage calculation. There is certainly no logic in the following:
" But we must never deny the hard truth. That truth is this may make things better for our own personal world but will not do a damn thing for the world as a whole."
Aside from begging the question about whether truth exists in hard and therefore presumably soft versions, it is simply not logical that the whole is not affected by the part.
You are absolutely spot-on, Ron. The really amazing thing is not the 300 TTs, but that there are not 3,000,000 of them! Just in the US of A!
What the author was saying is, "doing transition towns is a feel good thing. And, I wrote about them approvingly. I feel so much better now."
His weak conclusion destroyed any good he might actually have done in providing notice to his readers, impliedly stating that, "It's all good now." And, it is not!
Whadaya bet his editor had something to do with that. "Uh, say... that item on peak oil is real good and all, but it is really alarming. Can't you say something reassuring about ..."
Craig
Hi Ron,
I agree with you a billion percent. On one level.
On another:
1) re: "And do the efforts of these people make the prospects of declining fossil fuels in a world already deep into overshoot less frightening?"
Could be. While you've said (previously), there's nothing that can be done about overshoot - well, there is a way. Physically, materially - there is. At the very least, to minimize suffering. A perhaps fine distinction, however, it exists, as I believe you yourself have said.
2) re: And, posit this: if it's the case that the actions of the "commendable" ones need only be "scaled up" in the sense of applied on multiple levels, then that's what must happen. And it can happen.
Anyway, the attempt at the different levels is what Gail is addressing by attending that meeting. (And, the idea I've posted before: www.oildepletion.wordpress.com).
Go hang out in their mailing lists....read what they are posting and saying.
You'll find some of the same 'lets all go back to animal power' like you see here - ignoring the need for sanitation pushcarts, the resurgence of fecal matter in the water shed diseases and exactly how the animals will be fed. The same people who talk about how there needs to be a change to a veggie diet to stretch the food see no problem with turning right around and feeding grain to draft animals.
I've not seen the "where's the can to spirit - invest in a 1/2 million dollar battery pack for a combine" if you looked long enough.
The chief problem with these "transition" towns is question-begging: The term makes an assumption--that they know what they're transitioning to.
But the fact is, no one knows how things will pan out, so the transition town movement is simply an exercise in wishful thinking.
At birth, we start dying.
There's a reason its not called "Cliff Oil", or "Run Into A Brick Wall Oil". Maybe it would be easier to understand if it was called "Point of No Return Oil". People tend to understand this readily; there's not enough left to get us back so we better hope for beneficent Providence or an unexpected long downhill stretch.
Have to admit, my personal quip about my first exposure to the concept was wondering if it was Saudi horse race. (Preakness, oil, get it... ya, pretty corny). Awareness and understanding occurs in many iterations and evolutions both great and small. We shouldn't be so condescending to those that have only come into the knowledge. We will be accepting, compassionate, and giving.
Everything can be easy or obvious after you've been through it once. And it is not "intuitively obvious to the most casual observer".
Thats what baffles me. Hasn't everyone at least once as a kid, consumed all the cookies in the cookie jar, and then had to quit? Shouldn't that experience be enough to make the concept intuitively obvious?
Would something like this be helpful? Obviously these numbers are ficticious and don't take into account things like demand destruction.
Perfect!!
I use the comparison to a jar of mixed nuts to explain the concept. Love cashews and they are the world's primary liquid FF supply, sweet crude. At first they are real easy and at the top, so you eat away without concern. Then you start to notice they are a little harder to find and getting smaller, so you dig down a bit for larger ones. Eventually you are looking high and low and not finding too many anymore, and you're getting hungry.
You try hazelnuts (sour crude) but you aren't getting the same caloric value, you have to eat 1.5 hazelnuts to every equivalent cashew. Hazelnuts are starting to run low you try pecans. Same result but now you need 2 pecans (NGL's) to every cashew equivalent. Finally you're at the peanuts (Heavy Oil, AB/Vz) and having to eat them continuously. You spend most of your day looking for and consuming peanuts.
I really like the concept--drives the message home, so to speak. It might be useful to note that production is a rate term (as opposed to total cumulative production), as in volume over time, say billions of barrels a year.
-best
The only problem is that it isn't really right.
It seems to me that price increases are self-limiting, because they cause demand destruction. The reason this happens is closely related to inadequate EROI. The place where demand destruction because of recession happens seems to be about $85 a barrel, but it could depend on things like governmental tax rates (with higher tax rates leading to lower $$ threshold).
So I don't think price really goes up after peak. Price may cycle up and down, though.
Higher gas taxes are a GOOD thing, not bad as you imply.
Higher retail prices for oil (and other energy) will not have the same recessionary impact as higher retail prices due to the price of oil increasing.
Why ?
As Mr. Pickens points out, higher oil prices mean more $$ leaving the nation.
Higher taxes mean either a lower deficit or lower taxes on some other area of the economy.
And since there is significant medium term elasticity of demand, higher energy taxes mean that we use less energy, and we export fewer $ to pay for it. The impact of post-Peak Oil is mitigated in part by high energy taxes.
Europe uses half the oil we do per GDP is one good example of the benefits of high energy taxes.
The API's campaign against energy taxes is self serving and is contrary to our national interest.
Best Hopes for $7/gallon gasoline, with more than half of that being used to fund our society,
Alan
Yes I anticipated that you would say that, I'll continue to put some more thought into a better representation. I liked Aniya's suggestion below. For now it's off to the beach and I'm flying to Germany on Monday so I'll be off the air for a while.
Hi F,
Really nice graphics.
You might be able to accommodate Gail's point by adding on just a couple of lines under the two right-hand-most gauge icons:
Gas: Either $7.50 Gal. (Best case)
Or, $1.50 Gal. (But you don't have a job, and neither does anyone else you know, and thus, you can't pay for it.)
Etc. (Use your quite sufficient imagination.)
Actually, maybe just note that the price is relative. Gasoline may be priced at $1.50/gal at some point in the future, but that would just be some "nominal dollar" value. If the price is noted as relative--to say average income--then the numbers may simply go up with time. In terms of Gail's comments about fluctuating prices--these can be smoothed with a long-period average and do not need to be a concern in this particular graph (one graph can not be expected to do everything).
-best,
Wolf
Could someone clarify a point for me. While global production of conventional oil is clearly in decline (at least it's clear to me), the total liquids looks much better due to bio fuels, unconventional oil and most importantly natural gas liquids.
But the production figures don't report net energy production. So biofuels production, which requires significant fossil fuel inputs, is largely double-counting energy already produced. Anyway, biofuels are an insignificant part of world supply.
More importantly, though, is the extent to which NGLs are oil substitutes? Ethane, propane, butane, etc. -- do these fuels come close to matching oil's energy density, transportability, and suitability to existing infrastructure (read: cars and trucks)?
I know that Darwinian has made the point that he tracks primarily conventional crude (correct me if I'm wrong), which seems to make sense to me. If that's true, then, is there any point to lumping all these fuels together other than to paint a rosier picture? Can these fuels be economically converted to gasoline and diesel?
If this has been addressed elsewhere, I would appreciate links.
thanks
LPG cars no longer 'disgraceful' in Turkey
A story about 400,000 cars per year being converted to LPG in Turkey.
Autogas is Best - Industry News / World LP Gas Association. Wiki says Armenia have had the highest fleet penetration at 20-30%, but their overall petroleum consumption continues to increase, up to 49 kb/d in 2009 - and LPG was the smallest segment in 2006, the last year detailed numbers are provided, curiously enough.
Attempting to find the size of the EU fleet, I find this; "AC" = accession country:
The docs that quote is from have numbers that are all per capita. UK+France+Germany = 85 million. For CNG, try the International Association for Natural Gas Vehicles (IANGV)
But of course, that is the point... to paint a rosier picture. ;-)
I have lost the link but someone posted, a few days ago, a link that explained that if it were that easy to substitute it would be done. The fact that it is not done is reason enough to believe it is not at all that simple.
The link in question was about natural gas and not NGLs. But the principle is the same. Crude oil prices, according to the chart below, are running at about $14 per million BTU. Natural gas prices are just a tad over $5 per million BTU according to the chart. If it were that easy to substitute, we would simply do and save all that money.
Source: Bloomberg
The article Natural Gas: The Realistic Choice, where this chart was posted, argues that the world should be switching to natural gas. It doesn't seem to be happening however.
Ron P.
Conversion requires a significant upfront investment for the society and the individual. We don't do uprfront investment very well because of low discount rates. Ergo, even if the long term numbers make sense, we will not make the investment.
The question (from the comment anyway), was about stuff like NGLs that are included in the all-liquids.
Clearly some of this stuff can be utilized in limited quantities. Isn't butane added to gasoline on a seasonal basis? It would also be possible to chemically modify these liquids into other hydrocarbons. And the energy content of liquid hydrocarbons doesn't vary all that much. So "all liquids" [excluding biofuels that have high liquid fuel inputs] seems a reasonably fair metric to me.
[Actually we should include "net biofuels", which is biofuels minus the liquid fuels consumed in their production.]
The heavier NGLs can be blended directly into gasoline, e.g. butane can be blended in winter gasoline; I can't remember the maximum fraction. The partial vapor pressure would be too high for summer gas. Beyond that, NGLs are no drop-in substitute for oil.
http://www.theoildrum.com/node/5858
The Switch to Winter Gasoline and a Primer on Gasoline Blends
GDP report: Sharp slowdown in economic growth
They were predicting a drop to 1.4% though, so this is actually "good" news.
Japan’s jobless rate falls, but deflation persists
They're hoping for some inflation by mid-2012.
Never quite got why (mild) inflation is often considered to be a good thing. It is wealth transfer from those who save to those who borrow.
If I have 100 in the bank and get 5% interest in a 4% inflation environment with a 35% marginal tax rate this is what what it looks like:
100*1.05 = 105 nominal dollars
105 / 1.04 = 100.96 real dollars
Tax: 35% of 105-100= 35% of 5=1.75
Net real dollars :100.96 – 1.75 = 99.21 real after tax dollars
Some return on investment.
The subsidy to borrowers is the mirror image. Inflation is a wealth transfer mechanism which to some extend enables capitalism / wealth concentration which is why the reverse – deflation is such a threat to capitalism and therefore the structure of our society.
Rgds
WeekendPeak
It's not so much that inflation is a good thing as that deflation is very bad, least in an economy that depends on growth. As the link says:
It’s a pretty complex issue.
Deflation increases purchasing power and makes borrowing more expensive, and lending more profitable and consumption is more likely to be postponed. If the assumption is that Business As Usual – i.e. economic growth is good, at least on an aggregate basis yes, deflation is bad.
However, if ones stance is that BAU is not good and that we can’t have infinite growth on a finite planet a change from inflation to deflation may in fact be good.
One of the reasons why Japan is often thrown in these analysis is because they have had low/no growth and no inflation for a relatively long time and therefore seem to be a possible template of what may happen here.
The big difference is of course the hours worked and population combination.
In Japan the hours worked per year has been declining for a number of years and the population has been aging more rapidly than in the US which changes the consumption pattern – as one gets older consumption generally trends down until the last 2 years when it spikes.
Data is from the BP report and the labor organization in Geneva.
I suspect that the west will have similarities to Japan qua the growth and inflation vectors but for very, very different reasons.
Rgds
WeekendPeak
I think the reasons may not be so different.
The US population is aging, too. The oldest boomers will be turning 65 soon. And many European countries have the same "problem" as Japan - a shrinking population.
The Japanese experience with deflation probably isn't a viable template for the U.S. The Japanese financed their deficits by borrowing from their own population's savings, not by selling T-bills abroad. Also, Japan is an export driven economy that for most of the past twenty years has exported into an expanding global economy. The U.S. cannot expect to export into a deleveraging global economy and the U.S. also has a very low personal savings rate; looks like pretty bad juju to me.
The savings rate in the US is ticking up
whereas in Japan it is trending down
http://www.wisebread.com/comparing-savings-rates-us-vs-japan
Japan has issues because it is close to running out of internal savings which the government can borrow.
I think that the growth model is on it's last legs and that is going to be problematic because we're not set up for that.
Rgds
WeekendPeak
At least in a BAUlike economy deflation is bad. First prices and especially wages are considered to be sticky, it is much easier to give an employee an raise less than inflation, then to cut his nominal rate of pay. Also if a potential consumer percieves that the price will be lower tomorrow, he can simply stuff his money into the matress and defer the purchase. If on average more money is being stuffed into matresses, than is being printed, then there is not enough demand to keep the economy from shrinking.
At the individual level inflation is scary, and deflation sounds like a godsend. But at the systemic level, the results can be counterintuitive to someone who only considers the small scale local effects.
In a properly designed tax system, only interest/dividends/capital gains in excess of inflation would be taxed. The original reason for lowering the tax rate on capital gains (and later dividends) was to crudely compensate for this problem. Later pure aristocratic greed took over the process.
Something which bothers me about inflation is the implicit tax on savers / subsidy to borrowers aspect of it.It seems to send the wrong signal to both saver and borrower.
When you look at the average balance in savings and checking accounts over the last couple of years and multiply it by CPI you come to around 600bn /year in tax/subsidy.That is a substantial percentage of GDP just in wealth transfers. 600b/14T= 4.2% of GDP or so.
And when you realize that this has gone for many decades the extend is really quite enormous. I can see how borrowers have a pretty powerful incentive to keep CPI positive……
Additionally, because of the compound interest you need a growth rate greater than the interest rate, otherwise the system will go bankrupt (assuming a sizable debt of course).
So I am not so sure what is worse, deflation or inflation. Is postponing purchases really such a bad thing? It frees up capital for R&D, education etc. Come to think of it, perhaps the continued "incentive" for borrowing had something to do with the spending binge we individually as well as collectively have been on.
Borrowers have had an advantage for many decades, and a couple of years, or even decades of flipping that situation does, on the face of it, not unfair or particularly destructive to me, especially if the expectations and actual numbers are relatively in line with each other so participants can plan.
Rgds
WeekendPeak
The main reason the GDP was revised lower is because imports were higher than orginally expected. Increased imports reduce GDP totals. Although, as I have mentioned for a few months now, the increased amounts of imports increased intermodal (rail + truck) shipping across the country - which resulted in a mini-boom in diesel demand a few months back.
Granted refiners probably ran up diesel output too high in response to that sudden and dramatic increase in demand - and are now left with too much diesel inventory. However the relapse from the fast pace of business growth a few months ago does not portend we are entering double dip recessiobn territory.
Usually when business and personal investment is growing at a rapid 25% annual rate coming out of a recssion, like it is now, we don't normally collpase right back into a second recsssion.
The terminology is interesting - "The U.S. economy sputtered to a near stop in the second quarter".
Clearly, the economy didn't actually *stop* - rather, it didn't *grow*. Of course, the language of the media has to use an inaccurate metaphor to incite a better response.
The Moore Inflation Predictor from Financial Trend Forecaster shows a tendency toward zero, or below 1%, inflation for the US in 2011 :-
http://www.fintrend.com/ftf/images/charts/MIP/Moore_Inflation_Predictor.htm
Of course, a growth rate for the economy of even 1% GDP per annum would indicate a doubling of GDP in 70 years. Anyone think that is very likely ?
Clearly, the economy didn't actually *stop* - rather, it didn't *grow*.
For them lack of growth does mean 'stop' because the economy, as structured, needs growth in order to avoid falling apart. In fact you will even see economists like Paul Krugman say that sub 2% growth is a stop!
I'm pretty much convinced that the current Fed won't dramatically debase the currency in order to get a puff of growth. But they may get muscled aside.
There was loads of stimulus in play in Q2 and all they got was 1.6/4 = 0.4% increase in the size of the economy. Not much better than noise.
In our current way of running things, less than two percent growth means unemployment increases. Growth must exceed the sum of the rate of increase of the working age population, and the rate of improvement in productivity to raise employment (in this case man hours worked). We haven't figured out that we could split up the same number of working hours among more employees. So few per capita hours means more unemployment. We are stuck on a treadmill, that is situated on a cliff. To slow down means we take the big plunge off the precipice.
I feel like we have already taken the plunge off the precipice - but it's a bit like skydiving - when you are still up at 14,000 feet, the ground doesn't seem to be getting any closer.
Wait till we get to 3000 feet and see the ground rushing up....
I saw a sub-titled heading on one of the news sites - in much smaller text of course so as to not spook the masses...
said something like "Bernanke says government (fed) may have to employ unconventional methods to help the economy..." - I paraphrased of course...
should I be worried about the term "unconventional" ? (i.e. "what could possibly go wrong ?")
anyone care to take a stab at what that might imply ?
Re: No spin: Windmills fail, up top.
Such a pile of BS I don't know where to begin. Just consider the source, Orange County, California.
Note the article does not mention Iowa's experience with wind. The home place is surrounded by wind turbines. They do not make excessive noise. They do not slice and dice birds that then attract rodents.
They may spoil the view in California, but here in flat, boring Iowa covered with corn and soybean fields they enhance the landscape adding drama especially when seen against the dark sky of an approaching storm.
In recent comments I have linked to a lot of pictures of them. It is pretty hard to spoil a view with nothing in it by adding wind turbines.
Some renewable energy infrastructure around here has failed due to low oil prices, high cost feed stock, withdrawal of government subsidies and general mismanagement/bad decision making.
Yesterday I talked about the failure of Freedom Fuels biodiesel plant at Mason City. East of Algona, Iowa is another recently constructed bio diesel plant called East Fork Biodiesel that didn’t make it.
http://www.eastforkbiodiesel.com/
It never actually went into full operation.
The foreclosure sheriffs sale will be held Sept. 7, 2010.
It wasn't even Rodents.. they said 'Vermin'. Yes, it was a snipey little piece.
I particularly liked
"The futility of replacing low-cost, efficient fossil fuels with windmills was learned in Scotland, ..."
Somebody open a window, light a match! No wait, no matches, that API guy is soaking in it!
Fortunately we're running out of low cost fossil fuels, while the ascent of the learning curve regarding daily incoming fuel continues apace.
State of Colorado and Federal Regulators sign agreement to reduce red tape for small hydropower projects
http://www.waterpowermagazine.com/story.asp?sectioncode=130&storyCode=20...
Comparable projects in California, Washington, Maine, and Oregon.
Today, the rule of thumb is that an existing hydropower plant of <5 MW is not worth doing the paperwork to keep operating once the 50 year license expires.
The article mentions a potential of 1,400 MW.
I do wish the limit were higher. And I expect sites with an economic size of 6 or 8 MW to get 5 MW instead simply to reduce paperwork costs.
It should be noted that developing small hydro stimulates the economy, both short and long term. And small hydro will produce energy for a century or more with minimal additional investment.
Best Hopes,
Alan
PS: In "flat" Iowa, 1.5% of the electricity is generated from hydro, 135 MW from Keokuk on the Mississippi and the rest from smaller, low head projects. And the potential is 5%.
For projects up to approximately 10 MW the grid interconnection paperwork can be a deal breaker. Due to (I believe) a lack of better system holistic understanding, aka compartmentalization, engineers and administrators can't make judgments because they only know one little piece. Kind of like the blind men trying to describe an elephant.
Therefore they treat every interconnection with the same degree of potential system impacts per FERC regs and it isn't necessary. When I was responsible for a smaller private utility's transmission and substations in N. Ontario, and I had the system modeled, I could assess potential impacts readily because I had the whole picture. This would be corroborated with system operators because they are the embodiment of empirical knowledge.
In some weak regions 5 or 10 MW will have +ve and -ve impacts, while in strong regions they won't be more than a drop in the bucket.
I had the opportunity to spend some quality time with Andy Sturton, P.Eng., retired Chief Engineer for Quebec Hydro - now deceased this year. There was someone who knew the whole system inside and out, and he may be one of the last of electrical utility grand viziers. Now its all decision by committee or else you aren't a team player. You know what a giraffe is don't you? A horse designed by committee.
Bernanke Signals Fed Is Ready to Prop Up Economy
Definition: (To Helicopter Pilot) - Gentlemen ... Start your engines
Recession may have pushed US birth rate to new low
Probably is significantly impacted by the drop in illegal immigration as well as belt-tightening by the unemployed, and the natural effect of an aging population.
I dunno about the aging population thing. Yes, we're aging, but even the youngest boomers have been past reproductive age for awhile now. That water's long under the bridge.
I've often thought that if we return to a rural economy, the birth rate will increase. But more likely in the short to medium term is a poor but urban/industrial economy, as in many parts of the former Soviet Union. Even when they tried to increase the birth rate by banning birth control and even checking women monthly to make sure they didn't get abortions...birth rates stayed fairly low. The economics just didn't support child-rearing.
Given some technology, family planning seems to lead to the level which can be supported. Experimentation under the FSU led to short-term baby booms which led to wards of neglected orphans, but the overall childbirth rate reverted to the same trendline.
The best you can hope for is a nice, level curve where births equal death. Cycles or spikes are painful to endure.
Malthus! Sadly, it may be the only way.
This is worth a look. It is a free, open source tool for complex research problems and competing hypotheses. It was created by an ex-CIA analyst and written up in Wired. It would be interesting to see it applied to the imminent peak vs. undulating plateau hypothesis.
Disclosure: I have no financial interest in this software nor am I schilling for the author
Thanks Seraph, I'm going to look into this. I have to deal with this environment quite often and little bit of structured objectivity and methodology always helps.
Of course, we usually employ a more low tech method. It involves three to four or five chairs, arses to plant in those chairs, a table and sufficient supply of beer. Entertainment is optional but is usually ignored once the debate is engaged.
I saw the article about green house only 1900 square feet and just one bathroom.
http://www.worldwatch.org/node/1493
Our new house is 1300 sq. ft.
I read that in 1960 USA houses were avg. 1200 sq. ft. So if we get back to that life will be less wasteful in terms of energy- heating, cooling, longer drives, more construction material and furnishings.
The growth in size of homes in the US is interesting.
I've probably posted this before, but my house was built in 1904. Originally, it was 1000 sq ft, had 2 bedrooms, one bathroom, living and dining room and kitchen on the first floor. There was an unfinished attic and basement.
Then someone built an addition (in the 70's probably) and added 150 sq ft.
Then the attic was finished into a master bedroom, bathroom and additional living room. Add another 600 sq ft.
The basement was partly finished at some point to add an in-law apartment.
Shows the evolution of house size over time, with contemporary values. I still think it's better to buy an existing home than build new, since the existing home's materials have already been used.