Tuesday, November 30, 2004
Commodities bull II: An oncoming train
To understand this it is useful to go back to the end of the last bull market and see why it ended. By the early '80s the prices of most basic commodities had crashed. The reason: high prices had led to vastly expanded exploration for and discovery of minerals and vastly expanded planting of food and fiber crops worldwide. These actions increased supply beyond what the market needed and led to surpluses. Hence, the prices of many commodities plummetted.
But the pain in the resource sector continued long after the top in prices was in. Since it takes up to a decade to find and develop a mine, for example, investments already in progress when the bull market ended continued. Of course, at the time, no one knew that the bull market had ended. People had been conditioned to believe that every pullback would be followed by even higher prices. (It was very much like what happened in technology stocks in the late '90s.) So, investment continued to flow into the resources sector causing a further increase in the supply of basic commodities.
Another example: While farmers' decisions about growing many crops can change from year to year depending on market conditions, some agricultural products require a multi-year commitment. Coffee trees take three or four years to bear fruit. That means a commitment to increase coffee plantings made at the top of the bull market might not have any effect until four years later when the new supply would enter an already glutted market.
In this way a bear market in commodities tends to feed on itself as continued hope for higher prices pushes up supply and plans made long ago come to fruition in a period when inventories of raw commodities are already swelling.
Eventually, after many years--sometimes a decade after the top--companies, investors and farmers lose heart. Gradually, they slow their search for minerals which have now become far less profitable in the wake of large surpluses. They may pull up unprofitable coffee trees and plant something else in hopes of making a better profit. In the end, a final wave of smart, productive people leave the resource sector: farmers retire and sell their land for development; even worse, many farmers simply lose their farms as the debt they built up while expanding crushes them; unprofitable mines close; mining geologists leave the field and few train to enter it; mining engineers find work elsewhere; marketing executives move away from the agricultural marketing, and so on. The best and the brightest MBAs have long since abandoned their jobs in the commodity futures pits and in the offices of grain merchants and bullion dealers and taken up residence on Wall Street to trade stocks and bonds.
What happens next? With fewer crops being grown and fewer minerals being found even as demand grows, shortages eventually appear. Prices rise, mildly at first, and then more swiftly as perceived shortages lead to the hoarding of materials essential to keep factories going. (In the past couple of years the entry of the Chinese into world commodity markets to get materials to expand their factories and keep them going has already created some parabolic moves in certain key commodity prices.)
With few new mines opening up and little exploration occurring, the next several years are marked by higher and higher prices for all things taken from beneath the earth. The booming mining industry now starts to look in earnest for new supplies at a furious rate. But, the long lag times between exploration and discovery and between discovery and development mean those supplies won't be forthcoming in any quantity for years. The same is true in the farm fields and orchards which are also expanding. Surplus stores of grain have been whittled down as demand has risen. Basic crop prices rise and farming becomes a superbly profitable line of work. Certain crops that require multi-year commitments such as coffee are planted again in hopes of reaping lucrative returns in an undersupplied market. And, there is a shortage of mining and oil drilling equipment and expertise. The now much-in-demand expertise departed long ago when times were bad. Profits rise; salaries inflate; investors pour money into new mines and resource-related industries; and the cycle begins its inexorable move toward a crest.
These dynamics are developing before our eyes. Because of the long lead times needed to develop new supply for many resources, nothing done today will have much effect on prices or supply for several years to come. Any proposed actions which are touted as providing quick results should be treated with skepticism. Actions such as opening public lands, sometimes protected lands, to private exploration will be done in the name of alleviating shortages; but this will often be done with an eye toward rewarding political contributors.
Sadly, such shortsighted moves will do nothing to address the profoundly serious resource issues we face in the areas of energy, water, soil and climate. When prices are low, few people worry about natural resources. When prices are high, all people want is to have more of what is scarce right away. To rely on the highs and the lows of the commodity cycle to guide us in making intelligent choices in the area of resources is the height of folly. We need a deeper and less financially driven context in which to consider critical natural resource issues.
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Sunday, November 28, 2004
The promise: a hydrogen economy,
the cost: more nuclear power
Still, if the difference between energy in and energy out in hydrogen production can be narrowed, the universe's lightest element might be useful as a non-polluting transportation fuel. This would require that energy used to produce it doesn't pollute more than the gasoline and diesel engines currently in use. Right now, since so much of the electricity that would be harnessed to make hydrogen is produced with coal and natural gas, it's doubtful we'd end up with less pollution as a result. (There is also the question of natural gas supply which is getting increasingly tight.)
The New York Times reports, however, that researchers have found a way to greatly reduce the energy input in producing hydrogen. The catch: They do it with nuclear power. The kind of reactor necessary is not in widespread use and many of them would have to be built in order to accomplish what the researchers envision.
Apart from all the problems inherent in the production of nuclear power--what to do with the radioactive waste, the risk of accident, the vulnerability to attack--the researchers make an assumption which may not turn out to be true, to wit: uranium is plentiful.
It's true that uranium fuel for nuclear reactors has been in oversupply since the early '80s when high uranium prices and concerns over future supplies led nuclear utilities to stockpile vast quantities of the fuel. Those huge stockpiles depressed the uranium market, severely curtailing exploration efforts and crippling the uranium mining sector.
But that has now suddenly changed. Uranium fuel recently doubled in price from $10 a pound to $20, and it looks like Canada, where great stores of uranium ore are thought to reside, appears to be in a uranium boom. That may mean more supply in the years to come, but even uranium is not an unlimited resource. Like oil, it will reach a peak in production sometime in this century and thereafter decline.
No one knows for sure how much uranium the new mining boom will uncover. But, the answer to that question would go a long way in determining whether nuclear power could help create a hydrogen-based economy.
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Friday, November 26, 2004
Farmers, golf course owners and Bush say 'yes' to ozone depletion
Here is what the The New York Times reported on the issue earlier this year. Here is what the the EPA has to say about the stuff. It's not pretty.
But, maybe good looking golf courses are worth the loss of the ozone layer, even if it means no one will be able to go out into the sun to play golf.
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Worse than PCBs
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The people get it
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"Flat-earth" thinking
The U. S. was one of eight nations with Artic territory that participated in the study which I mentioned in a previous post.
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Houston comes to Oregon
Oregon property rights advocates now have a tool to fight back. A referendum passed by a 60/40 margin allows them to claim compensation for such restrictions or be relieved of those zoning and environmental rules that went into effect after the owners bought their land or, if the parcel is inherited, after their parents or grandparents bought it.
It seems unlikely that municipalities or the state will be able to pay the avalanche of claims. And so, Oregon, which has been known for its progressive land use laws and policies, could end up looking like Houston which has never had zoning.
Those who think this move represents freedom will soon find that what pops up next to them as a result won't make them feel free.
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Wednesday, November 24, 2004
How now mad cow
So far, no one in the beef industry seems to be suffering pangs of conscience over this sham testing regimen. But, it's really only a matter of time before the disease will be shown to be much more widespread.
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Brazil and China to allow GMOs
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The results are in:
Plastic 10, Zooplankton 1
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What a waste
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Tuesday, November 23, 2004
Commodities bull a bear
for the environment
Now, let me get to what I want to talk about. It's worth it to understand what's going on in the commodities markets because they give us signals about what's going on in the environment with respect to resources, at least in the eyes of people who buy and sell the stuff. Naturally, higher prices indicate scarcity either due to supply problems or increased demand. Of course, depending on which commodity you cite, higher prices could be due to either problem or both. But, prices also imply two other things: 1) what the definition of a resource is and 2) what people are willing to do to get it. Both have big environmental implications.
The simplest way to illustrate point 1 is with an example from mining. Mining companies classify something as ore if the metal contained in it can be economically extracted at today's prices with today's technology. (I'll discuss those technologies in a minute.) If the price goes up, rock that was previously uneconomical to mine can suddenly become ore since the higher price will offset the higher cost of getting the metal from the rock. Usually, something is classified as rock instead of ore for two reasons: 1) the metal is in a form that is harder to get out or 2) there's less of the metal per unit of rock than is economical to mine.
The simplest way to illustrate point 2 is to fly over the Gulf of Mexico or any offshore oil field. The platforms that you see may cost up to $1 billion. That's a lot of money to drill a hole. But, if the expected finds of oil or gas are big enough or the price is high enough, it's worth it.
With high prices people naturally want to drill for more oil and dig for more ore. On the farm where commodities are grown, farmers want to plant more crops.
Now, with high prices comes public concern. The public wants cheaper goods, and it turns to politicians with their complaints. The politicians are essentially powerless in the face of a long-term bull market in commodities to do much of anything in the short run. (I'll come back to this in a future post.) But, they can look like they are doing something by opening up public lands to mining and oil exploration. And, sure enough, when they do, companies find minerals and oil there.
So, it should be no mystery why, for example, drilling in the Arctic National Wildlife Refuge is high on the list of concerns for this administration. (I won't repeat here all the reasons why such drilling will make little or no difference in prices or supply which has been well-covered by the media). Opening ANWR would give the appearance of doing something and reward an important group of the administration's supporters, but it won't actually solve any problems.
That's public land. On private land there will be no vote. Mineral rights will be purchased if available and practical. Large swaths of land deemed dirt just a few years ago will suddenly become "ore." The machines will move in and start tearing at the earth and the mills will start milling the ore. In the oil fields it will be the same thing. Rigs will begin to appear in the farm fields and the yacht basins everywhere--at least, everywhere drillers think there's oil or gas. At the peak of the last oil boom there were 5,000 drilling rigs active in the United States. That number dwindled to a few hundred in the mid-'90s. Look for a return to the high before it's all over.
Farmers will start planting fencepost to fencepost. Those who haven't ripped out trees and windbreaks already in order to plant more crops will do so. These measures were, of course, designed to conserve soil from wind erosion. But who cares about that when soybeans are $10 a bushel as they were earlier this year before Chinese buying stopped and prices collapsed to around $5.50 today? Naturally, more planting means more use of pesticides and herbicides, more contaminated runoff both from manure and from chemicals. It also can mean more use of water from irrigation. For farmers in poor countries high prices provide incentive to tear down more trees such as those in the Amazon rainforest to make way for crops. In short, higher prices mean more of everything including the bad stuff.
Speaking of chemicals, technology has now made it possible to mine ore with very small concentrations of metals in them. Gold ores that have less than one-fifth of an ounce of gold per ton of ore are worth processing. (I really did mean "ton." It's not a typo!) For copper a much less profitable metal, it could mean less than 2 percent of the rock need be copper. The ore is crushed and then mixed with a liquid containing chemicals (usually cyanide) that combine with the small amounts of metals in the crushed ore. The liquid then flows into a processor that extracts the metal from the solution. It's hard to get across just how many tons of earth have to be mined in this way in order to get the metals we need.
Of course, there's also the problem of keeping the cyanide and other chemicals from leaking out, a problem Montanans recently voted to do without.
The problems with oil and gas drilling include the leakage of brine (saltwater) into freshwater acquifers which have been punctured by the drill, the disposal of toxic chemicals associated with drilling, the disturbance of the land and the effect on wildlife or the surrounding community, and the myriad problems associated with the transport, refining and use of petroleum and its derivatives. There's also the danger of well blowouts which I've seen firsthand and which devastate the surrounding terrain as brine gushes out onto farmland or natural areas and hot flames that can melt metal sear anything nearby.
There are two good effects of a commodities bull market: 1) people tend to become more efficient in their use of resources that cost more and 2) they tend to look for substitutes, either for reasons of cost or because they do not want to be subject to the vagaries of the market. If the substitute is biking instead of driving or wind power instead of coal-fired electricity, that can be a positive. If the substitute is another resource that is merely cheaper like aluminum for tin, then there isn't much of gain as far as the environment is concerned.
Commodity price cycles come in long waves of both the "up" and "down" variety. The last wave peaked in either 1974 or 1980 depending on who you talk to, which commodity you're looking at, and how you measure. But everyone who was alive in the '70s remembers what a highly inflationary time it was. Prices were rising at a 12 percent per year clip at the end, and gold topped $850 an ounce, a level it has not seen since. Oil hit $35 a barrel which when adjusted for inflation comes out to between $70 and $80.
One prominent and, by all accounts, very wealthy commodity investor believes the current commodity bull began in 1998. He expects it to run for another 5 to 10 years, something the environmental community should largely dread unless they can turn it into an opportunity to discuss renewable energy and better stewardship.
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Rusty soybeans
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World Conservation Congress urges moratorium on GMOs
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While you weren't looking...
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Something's fishy
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Monday, November 22, 2004
Old King Coal
This is just the kind of talk that gets me concerned about the future. If we're near peak production in natural gas in North America or at least unable to keep up with demand, you can see why coal is a natural fallback. We have plenty of it. Reserves are estimated at 250 years worth at current rates of consumption. But, if you think the global warming problem is bad now, it would get much worse if we go back to coal in a panic.
One positive note and something I've mentioned on this page before, wherever renewable energy sources are subsidized they are growing rapidly according to one panelist. The three biggest producers of solar energy in order are Japan, Germany and California. Germany is not exactly a sunny country. All three places have subsidized solar heavily. Subsidies are the only way we are going to make an energy transition successfully.
As I've tried to show in a previous post, Faith-based economics II: The case of oil's sudden scarcity, the marketplace may not give us much warning about pending permanent shortages of the energy sources we've come to rely on. And, if we wait until they do, it may be too late to make a transition without a lot of pain or maybe even to make one at all.
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Did someone say George Bush will take on global warming?
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Capturing methane, a greenhouse culprit
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Slade Gorton: Environmentalist
Environmentalist lawyer Robert Kennedy Jr. pointed out recently that if we had simply continued to increase fuel efficiency in American cars throughout the '90s, we would have reduced oil consumption by the amount of oil that we currently import from the Middle East.
Sounds like a good deal in retrospect.
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This land is my land
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Banned in Japan
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Friday, November 19, 2004
There really are limits to growth
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I'll take "mine" without cyanide
In 1998 Montana voters passed a proposal that banned the use of cyanide in mining. The owners of a huge and highly lucrative gold deposit sued the state for the loss of value of their property. That suit is still pending. But, this year those owners also got a proposal on the Montana ballot that would have overturned the cyanide ban. That proposal was rejected 58 to 42 percent.
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The knee bone's connected
to the thigh bone
"It's a huge issue in the long run because once the glaciers go, you're down to whatever happens to fall out of the sky and come downstream," said a scientist who raised the concern at an international conference this week.
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Don't drink the water
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Mad cow; insane Dept. of Agriculture
Contrast this with the Japanese system which requires 100 percent testing. The New York Times is reporting that the USDA is promising to test up to 268,000 cattle by the end of next year. It's not clear whether that's the total for this year and next or whether it's an annual figure. Taking it generously as an annual figure, you get all the way up to seven-tenths of one percent of slaughtered cattle being tested. And, to top it off, the testing is voluntary.
Why is the USDA putting on the blinders? Because the American cattle industry wants it to. If the agency went to 100 percent testing, it would surely reveal that mad cow is much more widespread, and that would mean we'd have to take some serious (and costly) steps to do something about it. It would also put a huge dent in the consumption of beef for a while.
Of course, all this will come out in time, and it will be a disaster when it does. But, as usual, USDA will wait until the problem grows much bigger before doing anything about it. Now, ask yourself: Who's more insane, the cows or the USDA?
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Thursday, November 18, 2004
To be or not to be roadless
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Spain wants solar panels on new homes
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16,000 species on verge of extinction;
could we be one of them?
Professor Peter Barrett said, "After 40 years, I'm part of a huge community of scientists who have become alarmed with our discovery, that we know from our knowledge of the ancient past, that if we continue our present growth path, we are facing extinction, not in millions of years, or even millennia, but by the end of this century."
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European car of the year:
Toyota hybrid
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Things are getting hotter down under
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Moving ahead on global warming
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More ozone, more deaths
The study was published in the Journal of the American Medical Association.
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Wednesday, November 17, 2004
Faith-based economics II:
The case of oil's sudden scarcity
Oil exploration--in fact, exploration for any resource--is subject to what Reynolds calls the "Mayflower Effect." The implication for the oil market is that a long period of seeming plenty can come to an abrupt and unforeseen end.
Here's how Reynolds explains it. When the Pilgrims settled at Plymouth Rock, they weren't getting the best farmland America had to offer, and back then farmland was what it was all about. If they had had perfect knowledge, they would have sailed up the Mississippi River to Iowa and settled there. Only a couple of centuries later did settlers find out about Iowa.
In other words, it takes time to discover the biggest and most productive areas for any resource when you have very little knowledge about where to look. As you gain more knowledge, you know where to look, and you make bigger and bigger discoveries. In the case of American farmland, surely the Great Plains were the biggest discovery of arable land. After the big discoveries are made, then the pattern reverts back to small discoveries. Yes, there are other places in the West which are suitable for agriculture, but nothing so magnificent and productive as the Great Plains except perhaps California. But, to prove the point, California's agricultural potential was already being realized as the Great Plains were being settled.
So, the pattern for discovery of natural resources again and again is this: small, big, small. The same is true with oil. It was 70 years after the first discoveries in Pennsylvania that the elephant fields in Texas were discovered. Worldwide discoveries peaked in the 1960s with huge finds in the Middle East. Now, we are finding more oil, but the days of regularly stumbling onto elephant fields seem to be over. The rate of discovery has now dropped far below the rate of depletion, something that can't go on forever without a fall in production. (Additions to reserves in existing fields continue to allow oil companies to replenish their reserves by at least the amount of their production, so far.) Yet, there is a stubborn belief that the big discoveries of the past are inevitably going to be followed by large and possibly even bigger discoveries in the future. For a time this belief is repeatedly reinforced creating the illusion of decreasing scarcity.
Government energy planners and oil industry exploration teams believe that because they have so much more information about where to look and how to exploit oil resources, they must inevitably succeed at finding ever larger amounts of oil. Yet, no amount of information can increase the amount of a finite resource. And, so at some point the increased information fails to produce the expected discoveries. This has proven true in the Gulf of Mexico when it comes to natural gas discoveries. It has proven true in the Caspian Sea area, at first thought to contain perhaps 200 billion barrels, but now believed to have perhaps 70 billion.
According to Reynolds markets tend to price oil and other commodities as if the trajectory of large finds will continue. But over time the failure to make the expected large new discoveries finally puts enough dents in this notion that perceptions in the market can shift, and when they do, they can shift with very little warning. What seemed in ample supply is now suddenly perceived correctly to be scarce. The results can be huge price spikes as the market digests the new expectation that the resource, in this case, oil, is a dwindling commodity. When that day (or more likely that year) comes, the oil market could bid up prices to levels unthinkable today, perhaps $150 to $300 a barrel, Reynolds says. He believes it's probable that a such a scenario will unfold within the next decade.
Not a pretty picture, and not one that will give you much faith in faith-based economics.
P. S. Reynolds recently got some support for his view from a top BP executive.
[There is yet another mechanism which Reynolds discusses that prevents price signals from telling us about the state of oil's supply. But, I'll cover that in a future post.]
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I'm shocked, shocked...
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Democratic judge, you win;
Republican judge, you lose
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Tuesday, November 16, 2004
McCain is back
Well, he's exaggerating about the 10,000 years--it's more like 5,000--but you get the point.
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Amory Lovins:
Here's how to get off the oil
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Four more years II
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What does New Jersey know
that we don't?
Won't that put New Jersey at a competitive disadvantage to other states, especially those in the anti-regulatory South and West? I think I know the answer. The smartest, most creative people in the world value a clean environment. (So do other people, but they don't always have the mobility to change their place of residence.) In the knowledge-based industries in which these creative types work, location can be influenced more by where people want to live than by physical resources or regulation. My brother lives in New Mexico and works for a computer software company in Florida that has employees who live there and in other places in the United States. Why is the company in Florida? Because the owner likes it there.
A state with a reputation for being a clean, healthy place to live may prosper by attracting the cutting edge entrepreneurs who need knowledge workers more than other inputs. Now, who's at a competitive disadvantage?
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Monday, November 15, 2004
Italians give GMO crops an
appropriately Pyrrhic victory
So, too, modern-day Romans seem to have handed another would-be conqueror, the makers of genetically modified crops, a Pyrrhic victory in allowing the planting of GMO seeds. The new Italian law will also allow individual regions to ban such crops. Even before the law's passage 13 of 20 regions and 1,500 towns had already done so. And, the law will provide for strict regulations to prevent contamination of the country's non-GMO crops. All of this in a country where 70 percent of the citizens oppose genetically modified crops.
While this may look like an opening for GMO seed producers, to me it looks more like a trap. Those who plant GMO crops are likely to have the weight of the Italian masses come down upon them. The whole process seems destined to stir up additional hatred of GMO products, especially if anything goes wrong. No doubt the rest of Europe will be watching.
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Bush's EPA to children:
Here's some rat poison
Terminals, terminals everywhere
The Congressional Research Service outlines the possible dangers of such terminals in this report. The designers of such ports are aware of the safety hurdles, and there have been very few accidents and nothing that could be described as catastrophic in the 60 years or so that LNG tankers and terminals have operated. But the wildcard is terrorist activity. The possibility of an attack is obviously clear to designers, but it is much more difficult to guard against. In addition, the shear number of facilities and ships planned will increase the odds of an accident or attack.
It was because of safety concerns that only four LNG terminals were built in the United States in the late '70s and early '80s. But now with energy needs in the United States continuing to climb and so much of the economy dependent on natural gas, regulators and energy planners believe we have no choice. As things stand, many coastal communities are going to have terminals built near them unless they are somehow able to stop them.
Grist magazine details one such fight over an LNG terminal off Tijuana. It's partly a fight about preserving three islands and the marine and aquatic life they harbor. With ChevronTexaco and the Mexican government on the other side, the preservation forces have an uphill battle. This article in Pacific Environment gives you a survey of environmental concerns including this ironic twist: The authors contend that LNG could end up flooding the California market, drive down energy costs and thereby derail renewable energy initiatives.
The LNG issue is fraught with contradictions. Natural gas burns much cleaner than coal or oil and produces much less carbon dioxide than either. Some environmentalists tout natural gas as the ideal transition fuel between the oil age and an age of renewable energy. But, the only way the United States is going to be able to get enough natural gas to fulfill its needs is to import LNG.
The second quandary is that natural gas has long been promoted as a secure domestic source of energy that would free us from Middle East oil. But, much of the world's LNG comes from the Middle East, and that dependency is likely to increase not decrease.
The third problem is that natural gas may not last long enough to be the transition fuel we need. Pessimists put a peak in world gas production around 2030. (More optimistic projections put it sometime after 2050.) If the pessimists are right, then that would put the world gas production peak only 10 to 20 years after their predicted peak for oil, a truly calamitous scenario. (For a discussion of the peak oil production issue, see my story on this issue.)
The pessimists say we need to start a crash program for renewable energy now and to engage in stringent conservation measures to make our nonrenewable sources last. The optimists say that there is enough natural gas to enable us to make that transition with considerably less disruption.
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Friday, November 12, 2004
Arctic's increasingly balmy weather a bad sign
Here's one excerpt:
The rapid and unprecedented shrinkage of the ice, and the extra burden it places on the animals, has resulted in the polar bears here weighing, on average, 55lb less than they did in the 1970s. And the bears have long become more than a nuisance in Churchill, Manitoba, on the shore of Hudson Bay. They are frequently tranquilised and flown back north.
Scientists at the World Wildlife Fund said that, if that continues, many of the polar bears in the Hudson Bay area will be so thin within the next 10 years that they could become infertile. Lara Hansen, chief scientist at the WWF, said: "If the population stops reproducing, that's the end of it."
Here's another:
A comparison of sea-ice measurements made during 1958-76 with 1993-1997 found it had thinned by 42 per cent. An analysis of similar data gathered by British submarines between 1976 and 1996 found a 43 per cent thinning of Arctic sea-ice.
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Faith-based economics: Peak oil and the "Cornucopians"
Of course, there are government agencies and well-reputed oil geologists who say that a peak in world oil production may be three or more decades away, plenty of time to make an energy transition. But, none of them has quite the audacity of the so-called "cornucopian" economists. These economists basically make three arguments when it comes to resources, oil included:
1. Higher prices will bring about more discoveries and greater supply.
2. New technology will make a higher percentage of the resource recoverable for new and old discoveries.
3. Higher prices will bring about conservation and substitutions, some of which will ultimately take the place of a dwindling resource.
First, one must admit that there is a certain element of truth to their arguments in the short run. For example, the huge price increases for oil in the '70s provided great incentive to look for oil, and a lot was found. People began to conserve so much that oil consumption actually dropped for a few years even as economic growth rebounded. So far, so good.
But, here is where their arguments fall into what I call "faith-based economics." First, they posit wildly expanding oil reserves based on nothing other than the magic of the marketplace, while ignoring all the geological data. In other words, they ignore physical reality and rely entirely on their own theories.
Second, oil is the indispensible fuel for our age. What makes it indispensible is its "energy density" and its versatility. Energy density simply means the amount of energy available for a given volume and weight. Oil is very, very energy dense, unlike say, coal which has a lot of energy but is bulky. Coal is also not as versatile as oil and much harder to carry with you. You can power a train with coal, but not an aircraft. In addition, you can refine oil into all sorts of fuels for specific purposes, something that is difficult and costly with coal.
The point is that there is nothing on the horizon that offers us the combination of energy density and versatility that oil does. Wind power is great. In fact, it may turn out to be the very best substitute we have for generating electricity once we figure out how to store the energy it gathers for use at peak times. But, you can't run a car with a windmill. The most difficult substitution we will have to make is in the transportation area.
Aha! you say. We'll drive electric cars! Yes, that's feasible. But, we cannot fly electric planes or fight using electric tanks or build anything with electric bulldozers or pull anything with electric-powered tractor-trailers. Electric engines are just too weak for this.
So, while it's not impossible to chart out how we'd make an energy transition, it's not as easy as you might think. And, so the cornucopians argue simply that the marketplace will come up with some suitable substitute for oil. We just don't know what.
Natural gas will have its own peak in production later than oil so it doesn't seem like a long-term fix. Coal could be turned into liquid fuel. The Germans did it out of desperation in World War II. But, it takes an awful lot of energy to do that, and so you have the problem of getting very little net energy out of the bargain (something I discussed in my previous post Tar baby: Oil sands and peak oil).
Nuclear power has its own problems of waste and danger. And, as you might have guessed, the uranium used to fuel nuclear reactors will have its own peak in production later this century. Beyond this, of course, you can't fly a plane or power a car with a nuclear reactor.
Coal is quite abundant, but the quality of it will degrade further as it already has, and we may be faced with the net energy issue I mentioned before. Part of the problem is that it takes oil to find and mine coal. Also, if we ramp up coal production to substitute for say, natural gas, in the production of electricity we may be in for catastrophic global warming and air pollution. (In fact, my greatest fear is that we will simply go back to coal in a panic.)
To all of this the cornucopians respond, "Well, even if all of that is true, we'll come up with something, some new technology that will save us. Perhaps someone will figure out how to make fusion work. Or maybe there'll be some invention that makes vehicles five times as efficient that is cheap to implement and will allow us to stretch out the time we'll have for an energy transition. There's no telling what will happen when you unleash human ingenuity!"
That's all very exciting, but it's really nothing more than faith, which is why I call their approach "faith-based economics." Do we really just want to sit back and hope that everything will turn out all right? Can we really just have faith in the system with so much at stake?
[So as not to make this post too long, I've reserved another important argument against "faith-based economics" for another time.]
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Do the right thing
By creating the Verde Para Sempre and Riozinho do Anfrisio extractive reserves in the state of Para, the President has dealt a blow to the illegal loggers and land hungry ranchers and soy growers who clear the forest that environmentalists call the lungs of the Earth.
Extractive reserves are cooperatively managed by local communities for low-impact activities such as rubber tapping, vegetable oil extraction and small-scale logging. They must include fully protected areas, safeguarded by the communities themselves.
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Thursday, November 11, 2004
Even the fox who guarded the henhouse couldn't take it
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Wednesday, November 10, 2004
Agency muzzled on GMO corn ('til now)
The report was released only after its existence became known when it was leaked to Greenpeace three weeks ago.
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Tuesday, November 09, 2004
Four more years
The agency's action comes 10 weeks after a federal court found the agency guilty of scientific fraud on the same grounds raised by the terminated employee.
"This case is about whether scientific dissent will be tolerated under the Bush administration," said PEER General Counsel Richard Condit who will be leading Eller's legal challenge of his firing. "A federal court found the agency knowingly used junk science to okay projects, but the official committing the fraud gets a commendation while the one who exposed it is fired."
Explains itself.
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Tibet is melting
"When you see the big picture accumulating from many sites, the evidence of drastic climate change becomes quite compelling," one researcher quoted by the Times said.
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Did you notice rice prices?
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Wind farm tradeoffs
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More "official" word on peak oil
Harper's estimates imply a peak within the next decade. While BP publishes the respected Statistical Review of World Energy each year, the company makes no official forecasts. So, strictly speaking, Harper is speaking for himself. But, it is notable that someone this deeply embedded in a major international oil company is now sounding the alarm on peak oil production.
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Good news, bad news
An early flameout of oil and gas production spells peril for our industrial civilization. But the authors warn that a return to heavy reliance on coal (of which there is plenty) in the wake of oil and gas shortages would lead to even worse damage than the IPCC envisions.
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Monday, November 08, 2004
Bush will stay the course--on global warming
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Irrigate Me! Australia's farmers hog the water
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Do wind farms drive down property values?
A separate story in The Guardian reports that a Greenpeace survey shows 69 percent of all Britons support the development of wind farms in their localities.
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Sunday, November 07, 2004
All over the map
we have more trees now than in anytime in our nations history. why? improved firefighting techniques and more public lands ( thank you teddy roosevelt, a republican). source u.s. dept. of the interior. besides, they grow back!Let's take the points as they come.
number one contributor to global warming - the sun is getting hotter, and will until it eventually explodes. the primary proponent of the global warming THEORY recently changed his mind and said only the southern hemishpere is currently warming. the northern hemisphere is cooling, and therefore it is a push. if you bothered to check news stories from the 70's, the original scare was global cooling. they will probably try that one again soon! we have only been keeping weather data since the late 1800's, and those are surface temps at that. let's not jump to any conclusions based 150 years out of 15 billion.
environmentalists won't let new oil refineries get built here in the u.s. where they are highly regulated, they prefer that they are built in venezuela et. al. where there is no regulation. thank you for your help!
1. It's doubtful that today there is more forest cover in the United States than there was in 1776 since most of the current United States had not even been seen by European settlers. But, it would be correct to say that forest cover in the United States has increased markedly since the beginning of the last century. While the commenter attributes this to better firefighting and Theodore Roosevelt's efforts to perserve public lands (for which we are all thankful), the main driver has been the reforestation of the eastern part of the country. This has occurred as our main fuel source has switched from wood to coal and finally to oil. In addition, the movement of agriculture to the Great Plains led to a decline in farming in the East. The result has been the regrowth of hitherto destroyed forests. What the commenter fails to mention is the massive deforestation that continues unabated outside the United States, most notably in the Amazon. Trees are a good place to store the carbon in the air and they're beautiful to boot. I wish we had more of them.
2. The sun is indeed getting slightly hotter though it cannot be attributed to a straightline process that will proceed for the next several billion years as the commenter claims. Richard Willson, the NASA-affiliated scientist who is studying the phenomenon, told Space.com that the finding does NOT mean industrial pollution is not an important factor in global warming. Willson is trying to determine what effect, if any, this increased activity of the sun is having. The rate of change Willson and his team have observed so far is "not enough to cause notable climate change," according to the Goddard Institute for Space Studies website which details Willson's work.
3. There may indeed be a major proponent (perhaps a scientist, perhaps not) of global warming who has changed his or her mind. Since no name is cited, we cannot tell. But, those who argue against the reality of global warming are a small minority in the scientific community. The anti-environmental lobby pretends that any disagreement between scientists about global warming equates to a 50-50 split on the matter and so no one can say there is a consensus on the issue. To put it simply: This is hogwash. The evidence for human contributions to global warming is so overwhelming and the consensus so great among the scientific community that two weeks ago a NASA scientist was willing to risk his career by publicly criticizing President Bush for his inaction on the matter.
4. Climate change is not confined to the southern hemisphere as the commenter claims. Only last week a study conducted by eight countries with Arctic territory including the United States concluded that "climate change is happening in the Arctic and that it will get worse unless emissions of carbon dioxide are cut." The data indicate that at the current rate of warming the Arctic ice cap will disappear during summers altogether by the end of this century.
5. Sudden, rapid cooling in the northern hemisphere is not inconsistent with global warming as this article explains. Fresh water melting off the Greenland ice sheet (the result of global warming) could bring what we call the Gulf Stream to a halt. If it does, much of Europe would go into a deep freeze within a decade. (See my previous post which discusses this.)
6. It's true that modern weather data don't go back much further than 150 years. But, paleoclimatologists, that is, researchers who study the climate of the past, are busy examining ice cores, tree rings, and a variety of geological data and have been able to determine climates going back millions of years. True, the data are not as precise as modern weather measurements. But, what they're telling us is not encouraging. We are living on a planet that is warming much more rapidly than can be accounted for by natural phenomena. For an introduction to this field of study, see the National Oceanic and Atmospheric Administration(NOAA) website.
7. The commenter is correct that oil companies do not want to build refineries in the United States because air pollution regulations make it expensive and because few places in the country would welcome a new refinery. What companies have done instead is to expand existing refineries in the U. S. and increase their efficiency to produce higher output. The commenter makes an excellent argument for uniform environmental regulations across the globe. Why should the people of Venezuela be made to breath toxic air just so we can have more gasoline?
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Saturday, November 06, 2004
Apocalypse Now
James Watt, Ronald Reagan's Secretary of the Interior and a devout evangelical Christian, once told a congressional committee: "God gave us these things to use. After the last tree is felled, Christ will come back." You can't get any clearer than that.
The ascendency of the Christian right to political power has ominous implications for environmental policy. The Grist article has all the particulars. Must be read to be believed.
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Friday, November 05, 2004
Vladimir Putin: Environmentalist
Now, why would the second largest producer of hydrocarbons in the world sign such a treaty? The answer is quite straightforward. Russia wants integration with Europe, and Europe wants action on global warming. This was the price Russia had to pay.
There are pluses and minuses for Russia. For now, its industrial sector has been so devastated by post-Soviet era closures that it emits far less carbon dioxide than it used to. And, since it pollutes so much less, it will receive carbon emission credits which it can sell to European businesses for cash. (Each country's allowed emissions are based on 1990 figures, a year when Russian industry was far more vigorous and polluting that it is today. Hence, Russia now has credits to sell.)
But, as the Russian economy recovers, it will have to adopt stricter pollution control technologies, something that will result in new costs.
Putin is gambling that the exercise will be a net plus resulting in the moderization of Russian industry and the cementing of ties with Europe.
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Global warming? What global warming?
According the Post, "One European negotiator said the administration is trying to 'sidetrack the whole process so it is not confronted with the question, 'Do you believe in climate change, or don't you?'"
Ask me no questions, and I'll tell you no lies.
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Sun worshippers
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Hydrogen from sunflowers?
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A river runs through it
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Thursday, November 04, 2004
Whales win one, sonar wins one
This article explains how the damage is done.
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All wet about mad cow?
Mark Purdey believes that a combination of diet difficiencies, toxic exposure to metals (particularly manganese), ultra-violet radiation, ultrasonic exposure and other factors contribute to a wide range of neuro-degenerative diseases such as mad cow. In perusing the site I was unable to find a single article that succinctly summarized the current state of his research, however.
Purdey appears to have traveled all over the world investigating hot spots for neuro-degenerative disease among animals and humans. And, he has gathered quite a bit of anecdotal evidence that seems to support his claims based on analyses of soil (pasture and cropland) and industrial pollution. Much of his findings have been published in several journals, though he is widely ridiculed by establishment scientists.
My reader explained that Purdey's theory explains something that the current prion theory of infection does not. Why do none of the traditional methods of ridding materials of disease such as heat, radiation, and disinfectants eliminate mad cow from the brains of infected cattle? Purdey would say that's because the causative agent is the metals which, in an altered energy state, are associated with the disease. They are unaffected by those treatments and pass into the bodies of humans and animals who consume them.
The upshot is that you have to have a copper deficiency yourself AND eat so-called "infected" matter (which could just as well be grass as animal brains) containing supercharged metal ions (particularly manganese) to be at risk for disease. Check your copper levels, my reader advises.
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Forget the drought, see Glen Canyon
Let me see. Where do I start? The West is experiencing the worst drought in 500 years and The New York Times is talking about how lovely Glen Canyon is. Of course, it is lovely and it was a shame to cover it. But, it seems to me that the real story is what the country will do about its western half and the people who live there if the drought continues for another five years. Huge lines of water trucks heading west come to mind.
UPDATE: The Times did cover the drought issue with seriousness earlier this year. The article is available here.
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