Posts tagged ‘gas’

Mission Drift in Charitable Trusts

Much has been written about 2nd and 3rd generation trustees leading charitable trusts in completely different directions from the intentions of their original founder / donor.  These charitable trusts seem to, over time, become reflective of the goals and philosophy of a fairly closed caste of, lacking a better word, non-profit-runners.  Their typically leftish, Eastern, urban outlook is sometimes bizarrely at odds with the trust's founding intentions and mission.

Here is one that caught my eye:  Bill McKibben is known as a global warming crusader, via his 350.org (the 350 refers to the fact that they feel the world was safe at 349 ppm CO2 but was headed for ruin at 351 ppm).  But if you hear him speak, as my son did at Amherst, he sounds more alike a crusader against fossil fuels rather than against just global warming per se.  I am left with the distinct impression that he would be a passionate opponent of fossil fuel consumption even if there were no such thing as greenhouse gas warming.

Anyway, the thing I found interesting is that most of his anti-fossil fuel work is funded by a series of Rockefeller family trusts.  I am not privy to the original founding mission of these trusts, but my suspicion is that funding a campaign to paint producers of fossil fuels as outright evil, as McKibben often does, is a pretty bizarre use of money for the Rockefeller family.

In contrast to McKibben, I have argued that John D. Rockefeller, beyond saving the whales, did as much for human well-being as any person in the last two centuries by driving down the cost and increasing the quality, safety, and availability of fuels.   Right up there with folks like Norman Borlaug and Louis Pasteur.

Oil Drilling (or Lack Thereof) on Federal Lands

Via Mark Perry.  This issue came up in the debates, when Obama claimed that he tried to take credit for the recent oil and gas boom, when in fact all of the boom is occuring on public lands (oil and gas production on federal lands is actually falling during this boom).  Here is one reason whyL

A Quick Reminder to Swedish Workers

Apparently Swedish unions are demanding a looser monetary policy

Forget Chuck Schumer's cat-out-of-the-bag 'get back to work' comments to Bernanke, now it is union-leaders who are advising the world's central bankers. "There is a not a single reason not to lower rates" exclaims Sweden's trade union confederation to the central bank as he begins negotiations with employers on wage deals for next year. His demands (for lower rates) are "far from excessive" and he adds "should not cause inflation" as Swedish organized labor have "never called for levels that ... could not be supported economically."

Inflation and monetary debasement have always been Progressive favorites -- until, of course, they were not.  Consider the plight of the worker in Weimar Germany

By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.

It was total hell.  If a worker's family member could not find something to buy in the morning with the worker's morning pay packet, the money was worthless by dinner time.  Not to mention the incredible lost productivity of all those man-hours spent running around trying to find goods on shelves (of which we got a small taste post-Sandy, as people spent hundreds of dollars of their own time waiting in queues because the government would not let gas station owners charge them an extra $20 for scarce gasoline).

Government Pollution and Risk Prioritization

A number of times in the past I have pointed out that government bodies in the US tend to be among the worst polluters.  While we sit around and argue about parts per billion of CO2 in the atmosphere, billions of gallons of raw sewage are being dumped into rivers.  I remember when I lived in Boston, the city just piped sewage out into the harbor.  When it got to disgusting and finally garnered a bit of negative media attention, they solved the untreated sewage problem by ... building a longer pipe and dumping it further out in the  ocean.   I worked at an Exxon refinery for a few years and it was always frustrating the regulatory attention we got on the smallest discharge (in general, the water we discharged had to be cleaner than the body of water we were discharging into) when local municipalities were dumping untreated sewage during storms into the same water, without consequence.

Anyway, here is a post from John Hanger via the Unbroken Window blog

A main goal of this blog is to help its readers prioritize the biggest threats to water quality and to understand that, though gas drilling impacts are real, they are well down the list of the most serious causes of pollution of Pennsylvania’s waters.  A must read is yesterday’s Pittsburgh Post Gazette front page story about the massive amounts of sewer overflows that reach rivers in the Pittsburgh region multiple times each year.
http://www.post-gazette.com/stories/local/region/alcosan-sewer-project-gets-little-public-input-653713/.The annual volume of untreated sewage reaching rivers and streams is reported as 9 billion gallons per year and occurs in 30 to 70 storms annually, according to the Post Gazette.  And the bill for stopping this pollution and cleaning up is a staggering $2.8 billion.To make matters worse, the same problem of untreated sewage flowing into rivers and streams that the Pittsburgh region is confronting is found in many communities across Pennsylvania as well as in New York and other states.  While America’s sewage overflow problem dwarfs the impacts of gas drilling on water quality, it normally attracts little media attention or sustained public concern.  There are no Hollywood stars campaigning to stop these huge amounts of sewage from going into rivers.  There are no HBO movies on the problem.

Normally, this huge source of pollution that threatens public health and safety is ignored or draws a yawn.

Good risk prioritization is virtually impossible in the current state of the media and political dialog.   Mike Rizzo, writing at the blog, makes a good point:

if you asked people if the government should allow an odorless, tasteless, highly explosive gas to be piped into your house, where a small leak in a pipe could cause the entire house to explode, they would surely say No Way! But then ask them if natural gas stoves should be permitted in their homes and to a man they’d all say, “Of Course.”

Rename the Chevy Volt to the Chevy Bastiat

Quick - in your last fill up, how much did you pay for gas?  About how many gallons did you use?

If you are like most people, you can probably come pretty close to this.  I paid somewhere just north of $4.00 for about 18 gallons.

OK, second set of questions:  On your last electric bill, how much did you pay per KwH?  How many KwH did it take to run your dishwasher last night?

Don't know?  I don't think you are alone.  I don't know the answers to the last questions.   Part of the reason is that gas prices are posted on every corner, and we stare at a dial showing us fuel used every time we fill up.  There is nothing comparable for electricity -- particularly for an electric car.

I understand some inherent appeals to electric cars.  They are fun to drive, kind of quiet and stealthy like KIT from Knight Rider.  They are really torquy and have nice acceleration.  There is no transmission and gear changing.  All cool and awesome reasons to buy an electric car.

However, my sense is that the main appeal of electric cars is that because we don't see the fuel price on the corner, and because we don't stare at a spinning dial as electrons are flowed into the car, we pretend it is not costing us anything to fill up.  Out of sight is out of mind.  Heck, even experienced car guys who should know better take this attitude.  Popular Mechanics editor Jim Meigs wrote to Glenn Reynolds, re: the Volt:

Others might like the notion of going a month or two without filling the tank

This drives me crazy.  Of COURSE you are filling the freaking tank.  You are just filling the lead-acid (or lithium-ion) one with electrons rather than filling the hollow steel one with hydrocarbon molecules.  The only difference is that you don't stand there watching the meter spin.   But that should not mean that we pretend we are not filling the car and paying a cost to do so.

By the way, if you have read me before, you know I also have a problem with the EPA equivalent mileage standards for electric cars, which basically inflate the numbers by a factor of three by ignoring the second law of thermodynamics.  This fraudulent mileage number, combined with the EPA's crazy-high new mileage standards, represents an implicit subsidy, almost a mandate, for electric cars that gets little attention.  And that will have zero effect on energy usage because the numbers are gamed.

 

So How Did It Go?

Since I blogged on the colonoscopy run-up, I supposed I am obligated to close the loop.  As Dave Barry warns, the prep is the bad part.  A day of eating lime jello combined with five or six hours of massive diarrhea.  Uncomfortable, mildly embarrassing, but quite manageable. The good part is that you know it is coming, you can prepare for it, and you know it is going to be over by the end of the day.

The procedure was a breeze.  The drugs are like a time machine.  One minute you are laying down, with the IV inserted and the next minute you are teleported 45 minutes into the future and in recovery with the whole thing done, feeling mellow.  No pain, before or afterwards.

Only two after-effects.  One, they apparently inflate your colon with air, like a bicycle tire tube, so they can see better.  Once I woke up, I passed gas in epic style, reminiscent of Peter Griffin in a Family Guy episode.  Second, I was freaking ravenous, since I hadn't eaten anything solid for 36 hours and anything at all for 12 hours.  That was solved by picking up the largest steak I could find at Whole Foods on the way home.

All is well medically, by the way.

More Planets

Earlier I tried drawing Earth-like planets.  I wanted to try a gas giant.  Here is the first shot at it:

Most of this is like the last project.  The difference is in coming up with the flat map for a banded gas giant rather than for land and oceans.  I finally cracked the code at the suggestion of someone online.  I wanted to create the bands in great detail, but drawing line after line in different colors seemed tedious.  He suggested taking a one pixel wide slice from a picture and then spreading it horizontally to get lines.  I used a slice through the red rocks near Sedona,  giving me nice Jovian colors.  I then blurred the lines and then used Photoshop liquify and a pen tablet to squiggle the lines.

The rest is just a series of overlays to give the colors a bit more variance, and the halo and dark side like the planets before.

The detail is pretty satisfying

The Real Issue in Climate

I know I hammer this home constantly, but it is often worth a reminder.  The issue in the scientific debate over catastrophic man-made global warming theory is not whether CO2 is a greenhouse gas, or even the approximate magnitude of warming from CO2 directly, but around feedbacks.   Patrick Moore, Greenpeace founder, said it very well:

What most people don't realize, partly because the media never explains it, is that there is no dispute over whether CO2 is a greenhouse gas, and all else being equal would result in a warming of the climate. The fundamental dispute is about water in the atmosphere, either in the form of water vapour (a gas) or clouds (water in liquid form). It is generally accepted that a warmer climate will result in more water evaporating from the land and sea and therefore resulting in a higher level of water in the atmosphere, partly because the warmer the air is the more water it can hold. All of the models used by the IPCC assume that this increase in water vapour will result in a positive feedback in the order of 3-4 times the increase in temperature that would be caused by the increase in CO2 alone.

Many scientists do not agree with this, or do not agree that we know enough about the impact of increased water to predict the outcome. Some scientists believe increased water will have a negative feedback instead, due to increased cloud cover. It all depends on how much, and a t what altitudes, latitudes and times of day that water is in the form of a gas (vapour) or a liquid (clouds). So if  a certain increase in CO2 would theoretically cause a 1.0C increase in temperature, then if water caused a 3-4 times positive feedback the temperature would actually increase by 3-4C. This is why the warming predicted by the models is so large. Whereas if there was a negative feedback of 0.5 times then the temperature would only rise 0.5C.

My slightly lengthier discussions of this same issue are here and here.

Summer of the Shark, Toyota Edition

A couple of weeks ago I discussed media coverage of summer temperatures in the US in the context of the crazy 2001 "summer of the shark" panic, where the media took a below-average year for shark attacks and played it up with constant coverage into the work shark attack year ever.

In 2010 we had another summer of the shark, this time with the fears over Toyota sudden accelerations.  We even were treated with an OJ-White-Bronco-like real-time video of some moron in a Prius who supposedly couldn't find the brake peddle for scores of miles on an LA freeway.  I expressed skepticism immediately that there was really a hardware / electronics problem behind the accelerations, and wondered whether the US government's ownership of Toyotas competitors might not have something to do with all the Senate hearings and government attention.  Eventually, the NHTSA and other government agencies determined there was no flaw with the Toyotas, that the sudden acceleration was merely due to operator error (ie jamming a foot on the wrong peddle).  This happens a lot, as it turns out, and I remember Walter Olson once found a stat that a huge percentage of sudden acceleration cases that make it to court seem to involved people over 70 or under 20.

ABC led the parade on this particular shark attack.  They used "safety experts" who were actually in the pay of plaintiff's lawyers, without disclosing this conflict of interest.  They actually tampered with their tested Toyotas and claimed they replicated the "spontaneous" acceleration:

It is hard to spot the lowest behavior in the affair so far, but that honor can arguably go to ABC and the lengths to which it went to pretend it had recreated the problem.  In fact, they had to strip three wires, splice in a resistor of a very specific value and then short two other wires.  They made it sound like this is something that could easily happen naturally  (lol) but this is an easy thing to prove – and inspection of actual throttle assemblies from cars that have supposedly exhibited the sudden acceleration problem have shown no evidence of such shorting.  So the ABC story was completely fraudulent, similar to the old Dateline NBC story that secretly used model rocket engines to ignite gas tanks.   Its amazing to me that Toyota, acting in good faith will get sued for billions over a complex problem which may or may not exist in a few cars, while ABC will suffer no repercussions from outright fraud.

Basically ABC proved that if you bypass a potentiometer with a resistor, you can spoof the potentiometer setting.  Duh.  The same hack on a radio would cause sudden acceleration of your volume.

So, given some time and reflection, eventually the rest of the journalistic community has brought some accountability to ABC by publicly shaming them for this shoddy journalism.  Ha ha, just kidding.  They just gave ABC and its reporter one of their highest awards for the story

Congratulations to Brian Ross, America's Wrongest Reporter, for winning a coveted Edward R. Murrow Award honoring his coverage of the Toyota unintended acceleration story. The award, oddly, is for "Video Continuing Coverage" rather than "Fostering Global Panic Based on Bullshit Story." Still, a Murrow is a Murrow, right? Let's go to tape.

Ross, you will recall, was one of the driving forces behind the Runaway Toyota Panic of '10, which was later determined by NASA and the National Highway Traffic Safety Administration to have been largely the result of idiots stepping on the accelerator when they intended to step on the brake, and of other idiots talking about it on TV. Ross was one of those idiots. For some reason, ABC News submitted four of Ross' Toyota reports to the Radio Television Digital News Association for award consideration.

One report they didn't submit was the one where Gawker caught Ross staging footage to make it seem like a Toyota was accelerating out of control when it was in fact parked with the emergency brake on, doors open, and someone stepping on the gas. We're told by an ABC News insider that, even though it didn't nominate that segment, the network "acknowledged and owned that mistake" in its awards submission. Good for them! Now let's see them acknowledge and own these mistakes from the segments it did submit. For instance:

In two of the winning reports, Ross quoted safety expert Sean Kane criticizing Toyota and insisting that there were cases of unintended acceleration that "couldn't be explained by floormats," which Toyota had recalled in 2009 after some mats became stuck under gas pedals. What he didn't report was that Kane was being paid by plaintiff's attorneys who were suing Toyota over unintended acceleration cases, and so had a financial incentive to argue that there was more to the Runaway Toyota scare than just floormats. Indeed, in other ABC News segments that the network didn't nominate, Ross showed Kane saying—again without disclosing his relationship to plaintiff's attorneys—"We clearly think that Toyota has a larger problem on their hands that involves the electronics with these vehicles." That position—that electronics were involved—was later eviscerated by the NASA/NHTSA report, which found "no electronic flaws in Toyota vehicles capable of producing the large throttle openings required to create dangerous high-speed unintended acceleration incidents."

Crazy Awful Idea - Incarcerating People For Their Own Good

Via Carpe Diem

This does not include the millions in state and county jails.  All those drug offenders in jail for a victemless crime, essentially "for their own good."

"I've sentenced boys younger than you to the gas chamber. Didn't want to do it. I felt I owed it to them. "

Great Moments in Government Energy Policy Failure

So, why do we have all these "dirty" coal plants?  Market failure?  Industry greed?  Nope -- Carter-era government policy.  For you younger folks, here is a law you may have never heard of:

The Powerplant and Industrial Fuel Use Act (FUA) was passed in 1978 in response to concerns over national energy security. The 1973 oil crisis and the natural gas curtailments of the mid 1970s contributed to concerns about U.S. supplies of oil and natural gas. The FUA restricted construction of power plants using oil or natural gas as a primary fuel and encouraged the use of coal, nuclear energy and other alternative fuels. It also restricted the industrial use of oil and natural gas in large boilers.**

In other words, all new fossil fuel-powered boilers had to be coal-fired (which in a year or so, after Three Mile Island, translated to all new boilers since nuclear was essentially eliminated as an option).  Yes, this may seem odd to us in an era of so much environmental concern over coal, but something coal opponents don't tell you is that many of the exact same left-liberal-government-top-down-energy-policy types that oppose coal today lobbied hard for the above law several decades ago.  Here is a simplified timeline:

1.  Government energy policy sets price controls that create artificial shortages of oil and gas

2.  Government-created shortages of oil and gas lead to this law, with government demanding that all new fossil fuel-powered electric plants and boilers be coal powered.

3.  Government mandates on coal use create environmental concerns, which lead to proposals for taxes and bans on coal power.

4.  The need for government action against coal is obviated by a resurgence of oil and gas supply once government controls were removed.  However, in response, government beings to consider strong controls on expansion in oil and gas production (e.g. fracking limits).

 

** I got involved with this because I worked in an oil refinery in the 1980's.  We had to get special exemptions to run our new boilers on various petroleum products (basically byproducts and waste products of the refining process).  Without these, the law would have required we bring in coal to run our oil refinery furnaces.

 

Obama as Venture Capitalist

John Stossel has a great link-filled round up of failed and failing solar and green energy programs funded by the Obama Administration with our money.  Check out the extensive list.

Here, for laughs, is Ray Lane of Kleiner Perkins rhapsodizing about Obama as the greatest government venture capitalist ever, and using for his prime example ... Solyndra!

I suppose at one point Kleiner Perkins used to take private risks with private money, but it seems to have found out it can make higher returns leveraging its investments with taxpayer money, and then using political influence to mandate business for the companies in which it invests. Thus the hiring of Al Gore, among other moves, to the KP board. Lane, by the way, is Chairman of serial government trough-feeder Fisker automotive, which make admittedly very cool-looking cars that require a lot of taxpayer subsidies.

Certainly Mr. Lane knows something about marketing, including that age-old tactic the "bait and switch."  The taxpayer subsidies of Fisker were made on the theory that electric cars were somehow greener than gasoline cars because they use less energy.  But looking at the fuel at the power plant it takes to make the electricity that goes into a Fisker Karma, the car gets worse gas mileage than an SUV  (only an EPA equivalent MPG standard that breaks the second law of thermodynamics hides this fact).  Congratulations Mr. Lane, green subsidies for sub-SUV gas mileage.  All those checks KP partners wrote to Obama in the last election certainly got a good return.

Cost of Green

From Zero Hedge:

Why should we worry about 5c or 10c on a gallon of fuel down the local gas station when the US Navy (in all her glory) is willing to pay a staggering $26-a-gallon for 'green' synthetic biofuel(made we assume from the very same unicorn tears and leprechaun nipples that funded the ESM). AsReuters reports, the 'Great Green Fleet' will be the first carrier strike group powered largely by alternative fuels; as the Pentagon hopes it can prove the Navy looks just as impressive burning fuel squeezed from seeds, algae, and chicken fat (we did not make this up). The story gets better as it appears back in 2009, the Navy paid Solazyme (whose strategic advisors included TJ Gaulthier who served on Obama's White House Transition team) $8.5mm for 20,055 gallons on algae-based biofuel - a snip at just $424-a-gallon.

In its defense, the Navy Secretary said, ""Of course it costs more.  It's a new technology. If we didn't pay a little bit more for new technologies, we'd still be using typewriters instead of computers."  Of course, the switch from typewriters to computers proceeded without government mandates (or taxes, as they are called now) and in fact was led by the private sector -- the government trailed in this transition.  Further, people paid the extra money for a computer because they found real value in it (document storage, easy editing, font flexibility).  What real value is the Navy getting for the extra $22 a gallon?  How much better will this task force perform?  The answer, of course, is zero.

What is a Green Job?

Turns out the guy who gasses up a school bus has a green job.

When Bureau of Labor Statistics Acting Commissioner John Galvin balked on what qualifies as a green job under the agency definition, Issa responded, “Just answer the question.”

“Does someone who sweeps the floor at a company that makes solar panels -- is that a green job?” Issa asked.

“Yes,” replied Galvin, who also acknowledged that a bike-repair shop clerk, a hybrid-bus driver, any school bus driver and “the guy who puts gas in a school bus” are all defined as green jobs.

He also acknowledged that an oil lobbyist, if his work is related to environmental issues, would also have a green job.

It gets better.  Apparently, when I worked at the Exxon refinery in Baytown, TX, I had a green job:

The Bureau of Labor Statistics states a green job is either: a business that produces goods or provide services that benefit the environment or conserve natural resources, or a job in which a worker's duties involve making their establishment's production processes more environmentally friendly or use fewer natural resources

I have never encountered an industrial engineering job anywhere that was not concerned with having their processes use fewer natural resources.

I would argue the greenest of jobs are held by oil and other commodity speculators and traders.  They ensure that prices at all times accurately match our current understanding of the scarcity of each resource.  Without these accurate pricing signals, all efforts to properly invest to use more or fewer of these materials would be impossible.  Just look at the "success" of investments like Solyndra that were made irregardless of these market pricing signals.

Wow, I Wonder Why Job Creation Isn't Occurring in California?

I wonder if its because companies have to beg for government permission, and then pay a hefty bribe, to get permission to hire more employees:

The city council in Menlo Park, Calif., is set to approve a deal that will let Facebook employ thousands more people at its headquarters there.

Mayor Kirsten Keith says officials are expected to green light the environmental impact report and the development agreement at a meeting Tuesday night. City staff has recommended the city approve the deal.

That means Facebook employees, currently numbering about 2,200 in Menlo Park, will soon be able to stretch out. If the deal is approved, Facebook will be able to employ about 6,600 workers in Menlo Park, up from its current limit of 3,600. That was the constraint on Sun Microsystems, which previously occupied the campus.

Facebook will pay Menlo Park an average of $850,000 a year over 10 years to compensate for the additional load on the city. It will also make a one-time payment of more than $1 million for capital improvements and set up community services such as high school internship and job training programs. Facebook is also creating a $500,000 local community fund that will dole out grants and charitable contributions to communities surrounding Facebook's campus.

Facebook is making the payments because Menlo Park can’t collect sales taxes from Facebook.

The last is a dodge - this is a protection racket, pure and simple.  Presumably Facebook pays property taxes on its corporate offices, as do its employees who live nearby.  Also, these new employees will all spend money in the local economy that will generate sales taxes.  Facebook presumably pays for water, sewer, trash and other utilities, and their employees are paying gas taxes as they drive that pay for the roads.  Facebook pays California income taxes, as do their employees.  What are these mystery costs that are not getting covered?  The community services bit is a hint that this is a stick-up, with Menlo Park demanding its cut of the recent IPO.

The truth is that cities and counties in California see business expansion plans the same way that Tony Soprano looks at the Museum of Science and Trucking -- as a way to maximize their skim.  I operate a campground in Ventura County that DOES pay sales taxes the County so far will not let me increase my live-in staff without making a big payment.  Even the remodeling of our store required 7 separate checks written to Ventura County agencies.

Update:  Minutes after I posted this, I see this at Reason about Ventura County's efforts to use zoning laws to shut down businesses.  Another Ventura story -- we tried to put a small trailer, really just a booth, in a large asphalt parking lot so my employee there could get out of the sun.  Putting a portable shed on a parking lot apparently required permits - lots of them.  At one point we were asked to get a soil sample, meaning they were asking us to cut through the paving and sample the dirt underneath.  Eventually we just gave up.

Current Oil Boom Only A Surprise to Those Who Don't Understand Markets

There is nothing surprising or unpredictable about the current oil boom, except perhaps how far it has gotten in the face of an Administration that has done virtually everything it can to stop it  (thank god there is oil and gas under private land).  Your humble scribe, neither an economist nor an expert in oil markets, wrote way back in 2005:

Everything old is new again.  Back in the late 70′s, all the talk was about the world running out of oil.  Everywhere you looked, "experts" were predicting that we would run out of oil.  Many had us running out of oil in 1985, while the most optimistic didn’t have us running out of oil until the turn of the century.  Prices at the time had spiked to about $65 a barrel (in 2004 dollars), about where they are today.  Of course, it turned out that the laws of supply and demand had not been repealed, and after Reagan removed oil price controls and goofy laws like the windfall profits tax, demand and supply came back in balance, and prices actually returned to their historical norms....

 Supply and demand work to close resource gaps.  In fact, it has never not worked.  The Cassandras of the world have predicted over the centuries that we would run out of thousands of different things.  Everything from farmland to wood to tungsten have at one time or another been close to exhaustion.  And you know what, these soothsayers of doom are 0-for-4153 in their predictions. ...

The vagaries of reserve accounting are very difficult for outsiders to understand.  I am not an expert, but one thing I have come to understand is that reserve numbers are not like measuring the water level in a tank.  There is a lot more oil in the ground than can ever be recovered, and just what percentage can be recovered depends on how much you are willing to do (and spend) to get it out.  Some oil will come out under its own pressure.  The next bit has to be pumped out.  The next bit has to be forced out with water injection.  The next bit may come out with steam or CO2 flooding.  In other words, how much oil you think will be recoverable from a field, ie the reserves, depends on how much you are willing to invest, which in turn depends on prices.  Over time, you will find that certain fields will have very different reserves numbers at $70 barrel oil than at $25....

All the oil doomsayers tend to define the problem as follows:  Oil production from current fields using current methods and technologies will peak soon.  Well, OK, but that sure defines the problem kind of narrowly.  The last time oil prices were at this level ($65 in 2004 dollars), most of the oil companies and any number of startups were gearing up to start production in a variety of new technologies.  I know that when I was working for Exxon in the early 80′s, they had a huge project in the works for recovering oil from oil shales and sands.  Once prices when back in the tank, these projects were mothballed, but there is no reason why they won’t get restarted if oil prices stay high.

Postscript:  I really need to find new topics to blog about.  The adjacent article in 2005 included this, a frequent topic on this site.  I had not idea I was writing about this so long ago:

When health care is paid for by public funds, politicians only need to argue that some behavior affects health, and therefore increases the state’s health care costs, to justify regulating the crap out of that behavior.  Already, states have essentially nationalized the cigarette industry based on this argument.

The Two Reasons Why People Buy Electric Cars

1.  They want to say something about themselves.  This is the Leonardo DiCaprio buyer, using the electric car to pronounce that he cares about his carbon footprint.  And it looks great parked next to his Gulfstream V.

2.  There is no meter on the electric line you plug into the car.  When you fill your car up with gas, you get to stand there watching the spinning money dial.  There is no parallel experience for plugging in an electric car.  The costs and fossil fuel use of an electric car are not necessarily less than the same size (e.g. subcompact) gasoline-engine car, they are just better hidden.

Owners of electric cars are not smarter about managing the energy costs of their driving, they are substantially more ignorant.  I know exactly how many dollars of gas I have put in my car this month.  How many electric car owners have the first idea how many dollars of electricity they put in theirs?

Another Reason to Love Fracking

Anything Vladimir Putin fears can't be all bad

Whilst it is exceedingly difficult to summon up much sympathy for either Russia’s state-owned natural gas monopoly Gazprom or Russian President-elect Vladimir Putin, the dynamic rise of natural gas produced by hydraulic fracturing, or ‘fracking,” has raised alarm bells in the highest reaches of the Kremlin.

Why?

Because Gazprom’s European customers, tired of being ripped off by Gazprom, are avidly exploring the possibilities of undertaking fracking to develop their own sources of the “blue gold,” and nowhere is interest higher than in the Russian Federation’s neighbors Ukraine, Poland, Romania, Bulgaria and China.

A Vivid Reminder of How The Climate Debate is Broken

My Forbes column is up this week.  I really did not want to write about climate, but when Forbes conctributor Steve Zwick wrote this, I had to respond

We know who the active denialists are – not the people who buy the lies, mind you, but the people who create the lies.  Let’s start keeping track of them now, and when the famines come, let’s make them pay.  Let’s let their houses burn.  Let’s swap their safe land for submerged islands.  Let’s force them to bear the cost of rising food prices.

They broke the climate.  Why should the rest of us have to pay for it?

The bizarre threats and ad hominem attacks have to stop.  Real debate is necessary based on an assumption that our opponents may be wrong, but are still people of good will.  And we need to debate what really freaking matters:

Instead of screwing around in the media trying to assign blame for the recent US heat wave to CO2 and threatening to burn down the houses of those who disagree with us, we should be arguing about what matters.  And the main scientific issue that really matters is understanding climate feedback.  I won't repeat all of the previous posts (see here and here), but this is worth repeating:

Direct warming from the greenhouse gas effect of CO2 does not create a catastrophe, and at most, according to the IPCC, might warm the Earth another degree over the next century.  The catastrophe comes from the assumption that there are large net positive feedbacks in the climate system that multiply a small initial warming from CO2 many times.  It is this assumption that positive feedbacks dominate over negative feedbacks that creates the catastrophe.  It is telling that when prominent supporters of the catastrophic theory argue the science is settled, they always want to talk about the greenhouse gas effect (which most of us skeptics accept), NOT the positive feedback assumption.  The assumption of net positive climate feedback is not at all settled -- in fact there is as much evidence the feedback is net negative as net positive -- which may be why catastrophic theory supporters seldom if ever mention this aspect of the science in the media.

I said I would offer a counter-proposal to Mr. Zwick's that skeptics bear the costs of climate change.  I am ready to step up to the cost of any future man-made climate change if Mr. Zwick is ready to write a check for the lost economic activity and increased poverty caused by his proposals.  We are at an exciting point in history where a billion people, or more, in Asia and Africa and Latin America are at the cusp of emerging from millenia of poverty.  To do so, they need to burn every fossil fuel they can get their hands on, not be forced to use rich people's toys like wind and solar.  I am happy to trade my home for an imaginary one that Zwick thinks will be under water.  Not only is this a great way to upgrade to some oceanfront property, but I am fully confident the crazy Al Gore sea level rise predictions are a chimera, since sea levels have been rising at a fairly constant rate since the end of the little ice age..  In return, perhaps Mr. Zwick can trade his job for one in Asia that disappears when he closes the tap on fossil fuels?

I encourage you to read it all, including an appearance by the summer of the shark.

Highway Bait And Switch

Kevin Drum and Ezra Klein both complain that Congress is letting America's highways fall apart by not raising the gasoline tax.  They complain that current gas taxes are no longer high enough to cover costs, as the Federal highway trust fund is empty.  Apparently, Congress and the President were always blithely happy to raise the gas tax to whatever it needed to be to cover costs, and now this current Congress is departing from the historic norm:

We used to have a straightforward way to fund infrastructure in this country: the federal gas tax. In 1956, President Dwight Eisenhower raised the tax from 1.5 cents a gallon to 3 cents to help pay for the creation of the interstate highway system. In 1959, he increased it from 3 cents to 4 cents. In 1982, President Ronald Reagan raised the gas tax to 9 cents. In 1990, President George H.W. Bush raised it to 14 cents, with half of the increase going to reduce the deficit. In 1993, President Bill Clinton raised it to 18.4 cents.

In other words, from 1956 to 1993, there was a bipartisan consensus on the federal gasoline tax: Both parties agreed that it occasionally needed to be raised in order to help pay for the nation’s infrastructure. But since 2000, there has been a bipartisan consensus against raising the federal gasoline tax.

But here is what happened since 1993:  Roughly a third of highway taxes are diverted to local mass transit and other oddball non-highway projects.  Simply devoting all the highway trust fund to, you know, highways would add an effective 6-7 cents to the gas tax money without actually raising the tax.

Here is what is going on:  The Left loves mass transit projects, particularly urban rail.  Of all government transportation projects, these have by far the highest cost per passenger mile of anything we do, so diverting money to these projects reduces the bang for the buck but the Left loves these projects for social engineering reasons I will discuss in a post soon.

The Left knows that these transit projects will not stand up well in the appropriations process.  Kansas taxpayers are not going to be happy about paying for another couple miles of the LA subway system.  They will ask, rightly, why local urbanites can't pay for their own damn transit projects if these projects are so great.  But taxpayers generally support tax hikes for highways. So what does a politician on a transit mission do?  He sells the gas tax to the public on it being dedicated to highways.  Then he switches the money away from highways to transit.  This leaves highways falling apart.  So he can again go to taxpayers asking for money, ostensibly for highways, but of which a good portion will eventually be siphoned off to transit (and squirrel bridges and whatever).  Repeat.

In effect, calls for raising the gas tax are NOT to repair highways.  This is a bait and switch.  Gas taxes are sufficiently high enough to fully fund highway work if it was all applied to highway work.  Proposed increased in gas taxes are needed to pay for the continuing diversion of highway funds to egregiously expensive transit projects.  Congress is right to stop this shell game.

Food Miles Silliness and the Virtue of Prices

I have written a number of times on the silliness of food miles and the locavore movement (here and here and here).  For some reason the energy and resource intensity of foods is being judged merely on one component - transportation of the end product - which actually is only a tiny competent of food costs (and thus their resource use).  Is it really more environmentally sensitive for us Phoenicians to grow our corn in the Arizona desert, where soils are unproductive and water must be imported from hundreds of miles away, rather than have it grown in the fertile soils of Iowa and trucked in?

Someone in the media, at least in Australia, finally notices:

TWO brands of olive oil, one from Australia, the other shipped 16,000 kilometres from Italy, sit on a supermarket shelf.

Most eco-friendly shoppers would reach for the Australian oil. But despite burning less fossil fuel to get here, it may not be better for the planet.

Contrary to popular belief, ''food miles'', or the distance food has travelled before we buy it, is a poor indicator of our food's total greenhouse gas emissions, or ''carbon footprint''.

More important is the way our food is farmed and produced, and how far we drive to buy it....

It turns out that stuff like economies of scale really matter

''Local food can often have a higher carbon footprint than food from afar,'' says principal researcher Brad Ridoutt.

He says even home-grown vegetables, with ''zero food miles'', do not necessarily have a smaller carbon footprint than those bought in the supermarket.

''With my veggies, I drive to Bunnings to buy fertiliser, and I go away for the weekend and forget to water them, and in the end I only harvest a few things that I can actually eat.

''By contrast, big producers, who can invest in the latest energy-efficient, water-efficient technology, and make use of all the parts of food, can be much more efficient,'' he says.

Of course, transporting food from producer to retailer still burns fossil fuels that release greenhouse gas emissions, in turn accelerating global warming. But freight emissions are only a fraction of those released during production, meaning even imported food, sustainably produced, can have a smaller carbon footprint than local alternatives.

Even the most rudimentary reading of economics should have given greenies a clue.  In commodity products like most foods, prices tend to be driven down to a point that they reflect resources (and their relative scarcity) that went into the product.  The cheapest foods tend to be those that use the least, and least scarce, resources in production.  So buying locally grown food, which often tends to carry a price premium, should have been a flashing red light that maybe this was not the least-resource-intensive choice.

Another One Bites the Dust

Another solar company which received $2.1 billion in loan guarantees from the Obama Administration has gone bankrupt.  The good news is that it has not spent much of that taxpayer money, and its bankruptcy is probably due more to the bankruptcy of its German parent, which in turn is likely related to the huge cuts Germany has made in its feed-in tariff subsidies.

The big asset possessed by Solar Trust is the Blythe solar project, a planned 1000MW facility that apparently has all of its permitting in place.  The Blythe facility was originally going to be a solar-thermal facility, with adjustable mirrors focusing the sun on a central boiler that would in turn power turbines.   This plan was scrapped last year in favor of a more traditional PV technology, and I know local company First Solar has been hoping to save itself by getting the panel deal (First Solar also has been hammered by the loss of German subsidies).

If we take the cost of this planned 1000MW facility as the stated $2.8 billion (of which 2.1 billion would be guaranteed by US taxpayers), we see the basic problem with solar.   A new 1000MW  natural gas powered electric plant costs no more than about $1 billion.  It produces electricity 24 hours a day.  This solar plant, to be the largest in the world, would produce 1000 MW for only a few hours of the day.  That area of desert gets about 7 peak sun hours per day (the best in the country) so that on a 24 hour basis it only produces 292 MW average.  This gives it a total capital cost per 1000 MW of $9.6 billion, making it approximately 10 times costlier than the natural gas plant to build.  Of course, the solar plant has no fuel costs over time, but solar is never able to close the gap over time, particularly with current very low natural gas prices.

Update:  Apparently the $2.8 billion was just for the initial 484 MW so you can double all the solar costs in the analysis above, making the plant about 20x costlier than a natural gas plant.

When Bad Things Happen to Well-Intentioned Legislation

My Forbes article is up for this week, and discusses 10 reasons why legislation frequently fails.  A buffet of Austrian economics, Bastiat, and public choice theory that I wrote for the high school economics class I teach each year.

Here is an example:

3.  Overriding Price Signals

The importance of prices is frequently underestimated.  Prices are the primary means by which literally billions of people (most of whom will never meet or even know of each others' existence) coordinate their actions, without any top-down planning.  With rising oil prices, for example, consumers around the world are telling oil companies:  "Go find more!"

For a business person, prices (of raw materials, labor, their products, and competitive products) are his or her primary navigation system, like the compass of an explorer or the GPS of a ship.  And just as disaster could well result from corrupting the readings of the explorer's compass while he is trekking across the Amazon, so too economic damage can result from government overriding price signals in the market.   Messing with the pricing mechanisms of markets turns the economy into a hall of mirrors that is almost impossible to navigate.  For example:

  • In the best case, corrupting market prices tends to result in gluts or shortages of individual products.  For example, price floors on labor (minimum wages) have created a huge glut of young and unskilled workers unable to find work.  On the other side, in the 1970s, caps on oil prices resulted in huge shortages in the US and those famous lines at gas stations.  These shortages and gas lines were repeated several times in the 1970's, but never have returned since the price caps were phased out.
  • In the worst case, overriding market price mechanisms can create enormous problems for the entire economy.   For example, it is quite likely that the artificially low interest rates promoted by the Federal Reserve over the last decade and higher housing prices driven by a myriad of US laws, organizations, and tax subsidies helped to drive the recent housing and financial bubble and subsequent crash.  Many will counter that it was the exuberance of private bankers that drove the bubble, but many bankers were like ship captains who drove their ships onto the rocks because their GPS signal had been altered

Fritz Vahrenholt Climate Book

A lot of folks have asked me if I am going to comment on this

One of the fathers of Germany’s modern green movement, Professor Dr. Fritz Vahrenholt, a social democrat and green activist, decided to author a climate science skeptical book together with geologist/paleontologist Dr. Sebastian Lüning. Vahrenholt’s skepticism started when he was asked to review an IPCC report on renewable energy. He found hundreds of errors. When he pointed them out, IPCC officials simply brushed them aside. Stunned, he asked himself, “Is this the way they approached the climate assessment reports?”

I have not seen the book nor the Der Spiegel feature, but I can say that, contrary to the various memes running around, many science-based skeptics became such by exactly this process -- looking at the so-called settled science and realizing a lot of it was really garbage.  Not because we were paid off in oil money or mesmerized by Rush Limbaugh, but because the actual detail behind many of the IPCC conclusions is really a joke.

For tomorrow, I am working on an article I have been trying to write literally for years.  One of the confusing parts of the climate debate is that there are really portions of the science that are pretty solid.  When skeptics point to other parts of the science that is not well-done, defenders tend to run back to the solid parts and point to those.  That is why Michael Mann frequently answers his critics by saying that skeptics are dumb because they don't accept greenhouse gas theory, but most skeptics do indeed accept greenhouse gas theory, what they don't accept is the separate theory that the climate is dominated by positive feedbacks that amplify small warming from CO2 into a catastrophe.

This is an enormous source of confusion in the debate, facilitated by a scientifically illiterate press and alarmists who explicitly attempt to make this bate and switch so they can avoid arguing the tough points.  Even the author linked above is confused on this

Skeptic readers should not think that the book will fortify their existing skepticism of CO2 causing warming. The authors agree it does. but have major qualms about the assumed positive CO2-related feed-backs and believe the sun plays a far greater role in the whole scheme of things.

This is in fact exactly the same position that most skeptics, at least the science-based non-talkshow-host ones have.  Look for my Forbes piece tomorrow.

State of the Union: Apparently, Hugh Hefner is Responsible for Abstinence

My column for this week is up at Forbes, and inevitably, deals with the State of the Union address last night.

But the portion that really floored me was Obama’s taking credit for the increase in US oil and gas production over the last several years.  It is certainly true that, against all predictions of peak oil, new technologies have helped drive a surge in US hydrocarbon production.  Combined with a recession-driven drop in demand, America’s oil imports as a percentage of its total use has dropped to 45.6%, the lowest level in over 15 years.

This surge in energy production is a fabulous reminder of how markets work.  For years I have written that the peak oil folks were missing something fundamental by performing an overly static analysis.  They looked at current “proven” reserves of oil and gas and projected forward how many years it would take for these to run out.  But oil and gas reserve numbers only make sense in the context of a particular set of technologies and pricing levels.  As hydrocarbons run short, rising prices tend to spur both innovation and new, more expensive exploration activity.  Oil and gas companies are once again proving Julian Simon’s addage that the only true scarcity is human brain power, and they should be given a lot of credit for the recent production boom.

The one person who deserves no credit for this boom is Barack Obama....

Read it all.