Posts Tagged ‘oil’

Heresy

Tuesday, April 21st, 2009

The definition of heresy is”

her·e·sy
Pronunciation:
\?her-?-s?, ?he-r?-\
Function:
noun
Inflected Form(s):
plural her·e·sies
Etymology:
Middle English heresie, from Anglo-French, from Late Latin haeresis, from Late Greek hairesis, from Greek, action of taking, choice, sect, from hairein to take
Date:
13th century
1 a: adherence to a religious opinion contrary to church dogma b: denial of a revealed truth by a baptized member of the Roman Catholic Church c: an opinion or doctrine contrary to church dogma
2 a: dissent or deviation from a dominant theory, opinion, or practice b: an opinion, doctrine, or practice contrary to the truth or to generally accepted beliefs or standards

Choose your favorite. Many of us consider Anthropogenic Global Warming to be a religious dogma.

We now have a solution for global warming that resembles the Shiite Muslim practice of self flagellation. We call it “Carbon Cap and Trade.” It means that all carbon sources will be taxed to discourage the emission of carbon containing compounds, especially carbon dioxide, which is considered to contribute to global warming. Will this have any effect ?

None but the purpose of penance is not necessarily an effective solution but rather punishment for violation of the religious dogma.

Like medieval priests, today’s carbon brokers will sell you an indulgence that forgives your carbon sins. It will run you about $500 for 5 tons of forgiveness—about how much the typical American needs every year. Or about $2,000 a year for a typical four-person household. Your broker will spend the money on such things as reducing methane emissions from hog farms in Brazil.

Thus, carbon taxes will be paid by the rich, not the poor.

During the presidential race, Barack Obama was heard to remark that he would bankrupt the coal industry. No one can doubt Washington’s power to bankrupt almost anything—in the United States. But China is adding 100 gigawatts of coal-fired electrical capacity a year. That’s another whole United States’ worth of coal consumption added every three years, with no stopping point in sight. Much of the rest of the developing world is on a similar path.

Cut to the chase. We rich people can’t stop the world’s 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach. We can’t even make any durable dent in global emissions—because emissions from the developing world are growing too fast, because the other 80 percent of humanity desperately needs cheap energy, and because we and they are now part of the same global economy. What we can do, if we’re foolish enough, is let carbon worries send our jobs and industries to their shores, making them grow even faster, and their carbon emissions faster still.

We don’t control the global supply of carbon.

Ten countries ruled by nasty people control 80 percent of the planet’s oil reserves—about 1 trillion barrels, currently worth about $40 trillion. If $40 trillion worth of gold were located where most of the oil is, one could only scoff at any suggestion that we might somehow persuade the nasty people to leave the wealth buried. They can lift most of their oil at a cost well under $10 a barrel. They will drill. They will pump. And they will find buyers. Oil is all they’ve got.

Poor countries all around the planet are sitting on a second, even bigger source of carbon—almost a trillion tons of cheap, easily accessible coal. They also control most of the planet’s third great carbon reservoir—the rain forests and soil. They will keep squeezing the carbon out of cheap coal, and cheap forest, and cheap soil, because that’s all they’ve got. Unless they can find something even cheaper. But they won’t—not any time in the foreseeable future.

What can we do ?

It is idle to argue, as some have done, that global warming can be solved—decades hence—at a cost of 1 to 2 percent of the global economy. Eighty percent of the global population hasn’t signed on to pay more than 0 percent.

Accepting this last, self-evident fact, the Kyoto Protocol divides the world into two groups. The roughly 1.2 billion citizens of industrialized countries are expected to reduce their emissions. The other 5 billion—including both China and India, each of which is about as populous as the entire Organisation for Economic Co-operation and Development—aren’t. These numbers alone guarantee that humanity isn’t going to reduce global emissions at any point in the foreseeable future—unless it does it the old-fashioned way, by getting poorer. But the current recession won’t last forever, and the long-term trend is clear. Their populations and per-capita emissions are rising far faster than ours could fall under any remotely plausible carbon-reduction scheme.

What about technology ?

Windmills are now 50-story skyscrapers. Yet one windmill generates a piddling 2 to 3 megawatts. A jumbo jet needs 100 megawatts to get off the ground; Google is building 100-megawatt server farms. Meeting New York City’s total energy demand would require 13,000 of those skyscrapers spinning at top speed, which would require scattering about 50,000 of them across the state, to make sure that you always hit enough windy spots. To answer the howls of green protest that inevitably greet realistic engineering estimates like these, note that real-world systems must be able to meet peak, not average, demand; that reserve margins are essential; and that converting electric power into liquid or gaseous fuels to power the existing transportation and heating systems would entail substantial losses. What was Mayor Bloomberg thinking when he suggested that he might just tuck windmills into Manhattan? Such thoughts betray a deep ignorance about how difficult it is to get a lot of energy out of sources as thin and dilute as wind and sun.

There is plenty of ignorance around, especially in Washington.

In the aftermath of the Three Mile Island accident—which didn’t harm anyone, and wouldn’t even have damaged the reactor core if the operators had simply kept their hands off the switches and let the automatic safety systems do their job—ostensibly green antinuclear activists unwittingly boosted U.S. coal consumption by about 400 million tons per year. The United States would be in compliance with the Kyoto Protocol today if we could simply undo their handiwork and conjure back into existence the nuclear plants that were in the pipeline in nuclear power’s heyday. Nuclear power is fantastically compact, and—as America’s nuclear navy, several commercial U.S. operators, France, Japan, and a handful of other countries have convincingly established—it’s both safe and cheap wherever engineers are allowed to get on with it.

Nuclear power was our best option and it has been pretty thoroughly destroyed by the Greens. Nuclear engineering programs, that would be needed to build power plants, are mostly closed and would not be easy to restore. Engineers are pretty smart and they would be skeptical of any politician’s promise of a secure career. CIA agents are learning that lesson right now.

Did you know this ?

To top it all, using electricity generated in large part by coal to power our passenger cars would lower carbon emissions—even in Indiana, which generates 75 percent of its electricity with coal. Big power plants are so much more efficient than the gasoline engines in our cars that a plug-in hybrid car running on electricity supplied by Indiana’s current grid still ends up more carbon-frugal than comparable cars burning gasoline in a conventional engine under the hood. Old-guard energy types have been saying this for decades. In a major report released last March, the World Wildlife Fund finally concluded that they were right all along.

Well, it won’t happen while Obama is president. One more missed opportunity.

Putin’s dilemma

Friday, December 19th, 2008

Russia has been run by a KGB hierarchy for the past ten years. I have previously posted on the story. I think the methods of Putin resemble Fascism and he has shown signs of a return to aggression as state policy. Much of the Russian adventurism was fueled by high oil prices as Russia is a major oil producer and has not used the income to diversify their economy. Now, with the steep decline in oil prices, there is unrest in Russia. The ruble has fallen sharply even as the Russian central bank has spent 160 billion dollars in gold supporting it. The KGB Russia is in trouble.

The future of Russia

Sunday, August 17th, 2008

George Will, this morning, made an interesting comment on the Russian invasion of Georgia. It expands on something I commented about the other day. Russia has a serious demographic weakness. It’s losing 700,000 people every year. Soon, very soon, it will be smaller in population than Poland and Ukraine combined. Its industries are weak. George Will said that no one buys anything from Russia except vodka. Someone else, I can’t recall who, said that “Russia is Saudi Arabia with trees.” They have an abundant supply of natural gas and a less abundant supply of oil. The oil fields are not being well managed, and the price of oil has given Putin a boost in income that may not last. The oil is there. No one argues that. However, the Russian government is not cooperating with the companies that produce the oil and, unless Russia produces a better home grown oil industry, the reserves may not translate into as much wealth as Putin is counting on. There are signs this is happening.

Another commenter on the Sunday morning shows commented that “China has an economy; Russia has gas.” The Russians do not seem to be investing the oil wealth in the economy. Russia is a third world country except for the oil. They are reverting to the policies of Czarist Russia in the 19th century. Those policies were the product of a tiny wealthy elite supported by ignorant peasants. The result was failure of the modernization that began so well in 1900. Russia has lost a century and seems to have learned nothing. The internet is full of ads for Russian women seeking to marry western men. What do they know that Putin does not?

The Russian bear is back

Sunday, August 10th, 2008

UPDATE: Zbignew Brzezynzki may be starting to rejoin the earth after years far to the left of 99% of humanity.

The Cold war ended with the fall of the USSR in 1991. Boris Yeltsin courageously stopped the KGB apparatchiks from taking back control of the country. Unfortunately, Boris was a drunk with lots of corrupt relatives. His administration was riddled with corruption and it is widely suspected that there was a deal between Yeltsin and Putin to leave Yeltsin alone as long as Putin was given a cloak of legitimacy.

Having surrounded himself with corrupt cronies and financiers, Yeltsin paid only lip service to fighting crime and corruption. He presided over an unprecedented deterioration in Russia’s internal security and law enforcement. The population became disgruntled as bandits ruled the streets and businesses, while businesspeople, foreign and domestic, balked at investing. Taken together, the failures of the post-communist transformation and the inability to construct even a minimal social safety net lowered the already meager standard of living of tens of millions of Russians and helped make Boris Yeltsin as unpopular at the end of his term as Mikhail Gorbachev was at the end of his.

At first, Putin cleaned house.

Thus far, Putin’s political and public relations instincts have been astute. He was filmed giving out hunting knives to Russian officers and troops in the trenches of Chechnya the morning of New Year’s Day, when most Russians were sound asleep after having spent the night toasting the new millennium. He sent Yeltsin’s daughter, Tatyana Diachenko, packing on his first day on the job. The notorious Diachenko not only was her father’s Kremlin advisor, but is also alleged to have spearheaded many of the corrupt financial dealings attributed to the Yeltsin family. He fired Yeltsin’s presidential property manager, Pavel Pavlovich Borodin, who is now being sought by police in Switzerland. He demoted Nikolai Aksenenko, first deputy prime minister in charge of the economic portfolio, to preside over the railways, while elevating a tough debt negotiator, former Finance Minister Mikhail Kasyanov, to the No. 1 economic position. Watching their dynamic new acting president, many Russians quoted their proverb, “a new broom, which sweeps clean.”

However, Putin is not a democrat.

Vladimir Putin will be strongly tempted to revert to the traditional paths of autocracy and statism. As a former intelligence officer and head of the secret police, he has the right profile to emerge as a centralizing, strong leader in the tradition of Peter the Great, or even worse, Nicholas I, the preeminent monarch-policeman of the first part of the nineteenth century. Putin’s entry into the political scene is inescapably connected to the war in Chechnya, which, the critics say, was engineered to launch the “Putin for President” campaign. He may see both the fate of Russia and his rule through the traditional prism of military prowess and conquest.

Russia has two major problems; one is a very low birthrate.

The Russian population is expected to drop by 700,000 in 2001 and will
total 144.5 million, according to the state statistics committee quoted by
Interfax.

Over the past eight years, Russia’s population has decreased by close to
two percent with 2.8 million fewer people, according to official figures.

Deaths far outpace births by a ratio of 14.7 in 1,000 compared to 8.4.

Only 1.2 million children are born each year in Russia, well below the two
million needed to keep the population at existing levels, said Kulakov.

The second is an unstable economy, dependent on energy exports. Attempts to build a modern, high technology sector is failing, stifled by the authoritarian rule of Putin and the FSB (formerly KGB).

But the big problem for high technology in Russia is neither money nor ideas. It is the country’s all-pervasive bureaucracy, weak legal system and culture of corruption. This may explain why the nanotechnology corporation has so far found only one project to invest in (and that is registered in the Netherlands). The share of high-tech products in Russia’s exports is only 0.6%, “a shameful rate” according to Vladimir Fortov, a member of the Russian Academy of Science. Over the past 15 years, he says, Russia has not brought to the market a single significant drug. The average age of Russia’s scientists is well over 50. One of the main commercial activities of Russian research institutes is leasing or selling their property and land.

Now, Putin seems to be adopting the methods of Stalin, those of armed robbery writ large, as he seeks to control Georgia which has major pipelines and other economic attractions. The crisis has been building for months and exploded this weekend, probably to coincide with the Olympics. The USSR did much the same in the past, invading and crushing Hungary when Britain and France invaded Egypt in 1956. Unfortunately, we allowed a precedent in Kosovo during the breakup of Yugoslavia.

Georgia’s president, Mikheil Saakashvili, said Russia’s ambitions were even more extensive. He declared that Georgia was in a state of war, and said in an interview that Russia was planning to seize ports and an oil pipeline and to overthrow his government.

That is so much cheaper than actually building them. The oil price rise the past year has given Russia a huge boost in its cash flow but that may not be a long term solution to Putin’s problems. He may have decided to punish the west for its support of Georgia by interrupting the pipelines that pass through Georgia and precipitate a crisis in Europe. That would frighten Europe but would it solve his problems ?

Oil and gas have been the foundation of the regime of Vladimir Putin, Russia’s outgoing president, and are also a preoccupation of his successor, Dmitry Medvedev, who was chairman of Gazprom, the state-controlled gas giant. The flow of petrodollars has created a sense of stability, masked economic woes and given Russia more clout on the world stage. Yet the malaise afflicting its most important industry is almost entirely man-made. “Geologically, there is no problem,” says Anisa Redman, an analyst at HSBC, a bank.

In principle, Russia’s bonanza could continue for years: it has the world’s seventh-biggest oil reserves, at 80 billion barrels, according to BP, a British oil firm. And oilmen reckon there are 100 billion more barrels to find—“the biggest exploration prize in the world”, in the words of Robert Dudley, the boss of TNK-BP, BP’s Russian joint venture. But Russia has regulated the industry so poorly that production is falling despite the soaring oil price.

“Tax is the major impediment,” says Ms Redman. The government levies an export duty of 65% at prices over $25 a barrel. Add to that various corporate, payroll and production taxes, oilmen complain, and the state creams off as much as 92% of profits. Executives at TNK-BP have argued that rising costs across the oil industry will make many investments in Russia unprofitable unless the tax regime is changed. As it is, TNK-BP accounts for a fifth of BP’s production, but only a tenth of its profits.

The Russians still do not understand economics and that ignorance may be costly for everybody. In the meantime, it emphasizes the risks of a callow youth like Obama as president. McCain has been to Georgia multiple times and knows the people involved. He has never bought the line that Putin is a modern statesman. Obama supporters, as is so often the case, blame America and America’s friends for Russia’s actions. Those 1500 people killed thus far were “inconvenient.”

Administration officials have regularly cautioned Mr. Saakashvili to be patient on Abkhazia and South Ossetia, even as they have given private and public reassurances about NATO membership. It would, in fact, be surprising if Georgia had consciously provoked a war in South Ossetia, since Mr. Saakashvili understands that doing so would almost certainly put an end to the NATO bid; indeed, Russia may well calculate that NATO will continue to exclude Georgia so long as the country is embroiled in hostilities along its border.

Georgia’s predicament seems very simple from the vantage point of Tbilisi — 1921, 1938 — but extremely complicated from a great remove. Russia threatens Georgia, but Georgia threatens Abkhazia and South Ossetia. Russia looks like a crocodile to Georgia, but Georgia looks to Russia like the cats’ paw of the West. One party has all the hard power it could want, the other all the soft. And now, while the world was looking elsewhere, the frozen conflict between them has thawed and cracked. It will take a great deal of care and attention even to put things back to where they were before.

It will take a firm hand to avoid losing, not only Georgia, but Ukraine to Russian revanchism. Obama does not have that firm hand.

The intent of the Russian aggression is becoming more and more obvious. Georgia’s response is likely to be unsuccessful.