Getting it wrong on recycling

Let's see what those disparaging America's rate of recycling as "too high" either get completely wrong or fail to understand. You can read recent commentary suggesting that the recycling rate is too high here, here and here.

The number one complaint is that it costs more to recycle some categories of waste than to put them into a landfill. What the critics fail to comprehend is that unlike a couple of generations ago when most landfills were owned and run by local governments, today most are run by profit-making enterprises such as Waste Management Inc. and Republic Services Inc. which haul some 80 percent of the nation's refuse. Those enterprises developed their large centralized landfills for the purpose of keeping down their disposal costs.

Since the private waste disposal industry has organized its infrastructure around cheap landfill disposal, it's no wonder that landfilling seems like the most cost-effective option. It follows that if we Americans had built a waste infrastructure with the goal of zero waste as Germany did, our infrastructure would naturally have delivered lower costs for recycling than it does.

Exxon: We knew climate change was a real threat (but we didn't want you to)

One of the big complaints about climate change deniers is that they don't fund any genuine primary scientific research into climate change.

We are used to deniers extracting out-of-context passages from existing legitimate climate research and pretending those passages support the denialist position. But wait...we now know, thanks to recent coverage by Inside Climate News and the Los Angeles Times, that at least one climate change denier did fund a great deal of legitimate climate research.

And, what did that research show? It showed that climate change is real, is caused in great measure by human activities and has the potential to disrupt human society significantly. To be fair, when Exxon Corp. (now Exxon Mobil Corp., the world's largest publicly traded oil company) engaged in this research in the 1970s and 1980s, it was genuinely trying to understand the relationship between carbon dioxide emissions and climate change. During that time Exxon scientists collaborated openly with prominent academic and government researchers and were even praised for their commitment and professionalism.

Public health, endocrine disruption and the precautionary principle

Several years ago over lunch a medical researcher I know told me that industrial chemicals were disrupting the human endocrine system leading to widespread obesity and diabetes. He said his research had revealed an important cause--the decline in the production of testosterone in both men and women (yes, women produce a little testosterone) due to this disruption. When this deficiency was reversed, patients experienced significant improvement in both obesity and diabetes.

That's not all. He explained that most people believe that poor diet and little exercise are the central cause of obesity and diabetes. No doubt poor diet and exercise are important contributing factors. But when the body's signaling system fails to indicate when it has had enough to eat, it's hard for most people to recognize that they need to stop eating. How many of us know people who say that they are hungry all the time? A normal human being with a normal endocrine system should not feel "hungry all the time."

The link between what has become a sweeping twin epidemic and man-made chemicals is getting wider notice these days. But the link between endocrine disruption, obesity and diabetes is still absent from popular medical accounts such as those found on WebMD for obesity or on official sites such as that of the World Health Organization.

Goldilocks and the three prices of oil

We all know Goldilocks from the story of Goldilocks and the Three Bears in which the young maiden wanders into the home of the bears and samples some porridge that happens to be sitting on the dinner table. The first bowl is too hot, the second is too cold and the third is just right.

Like a corporate version of Goldilocks, the oil industry has been wandering into the world marketplace in recent years often finding an oil price that is either too high such as in 2008 and therefore puts the brakes on economic growth undermining demand and ultimately crashing the price as it did in 2009. Or it finds the price too low as it is today therefore making it impossible to earn profits necessary for exploiting the high-cost oil that remains to be extracted from the Earth's crust. Oil that hovered around $100 per barrel from 2011 through much of 2014 seemed to be just right. But those prices are now long gone.

Violent swings in the price of oil in the last decade have made it difficult for the industry to plan long term to produce consistent supplies at moderate prices. This has important implications for future supplies which I will discuss later.

Unstable world: Is it time to buy volatility?

On Wall Street buying options--options on stocks, on commodities, on currencies, on almost anything--has been seen as a sucker's bet (unless you are doing it to hedge an existing investment).

For the uninitiated, options are the right to buy or to sell something--practically anything really--at a set price over an agreed period of time. I can call my broker and buy the right to purchase Yahoo at $35 a share between now and April 15 next year for $2.32 a share. I can also buy the right to sell Yahoo at $25 a share for $1 a share. I might do this if I owned the stock and wanted to protect my investment in case of a decline. With Yahoo trading at about $32 a share, neither option would make me any money right now. But either one could make me money, and possibly lots of it, if there were to be a major move in Yahoo either up or down between now and April 15. In essence, I would be buying volatility.

Yahoo dropping to $2 a share or zooming upward to $200 in the period before the options described above expire would surely destroy a significant chunk of the wealth of those who sold options to others that allow them to sell at $25 in the former case or to buy at $35 in the latter case.

'Blood & Oil', North Dakota, and dreams not exactly fulfilled

Last week a new television series set amidst the North Dakota oil boom debuted. Blood & Oil tells the story of locals and newcomers striking it rich in The Bakken, an oil formation that has been heralded as containing more oil than Saudi Arabia--a wildly misleading* but understandably alluring slogan.

Based on the first episode we can conclude that this program is not actually a contemporary drama, but rather a period piece--specifically the period when North Dakota was booming from about, say, 2009 to sometime in mid-2014. And, therein lies the story. For Blood & Oil, above all, must be a tragedy of broken dreams if it is to live up to its realism credentials.

We must look beyond the fact that the show is shot in Utah to the substance of the series. When we do, we see the ever-present gambler's mentality that dominates the American mind. It did not go unnoticed that America was a land of plenty from the very beginning of European settlement. One of the first European explorers and founder of the first permanent English settlement, Capt. John Smith, observed:

And in diverse places that abundance, of fish lying so thick with their heads above the water [that] as for want of nets (our barge driving among them) we attempted to catch them with a frying pan, but we found it a bad instrument to catch fish with. Neither better fish, more plenty, nor more variety for small fish had any of us ever seen in any place so swimming in the water...

Will declines in U.S. and Canadian oil production lead to a global decline?

At the beginning of this year I noted that all of the growth in world oil production* since 2005 has come from two countries: the United States and Canada. And, I suggested that since the growth in production in those two countries came from high-cost deposits--tight oil in the United States and tar sands in Canada--that the precipitous drop in oil prices would lead to declines in production in both countries.

I concluded that unless another area of the world suddenly started growing its oil production significantly that those declines would probably result in a worldwide decline in oil production.

Well, declines in both the United States and Canada have arrived. It will be several months before we can know with any certainty whether those declines will translate into a persistent global decline. But this much we do know:

The International Energy Agency, a consortium of 29 countries tasked with tracking worldwide energy trends, said in its latest report that global oil production fell 600,000 barrels per day in July--and here's the important part--"mainly on lower non-OPEC output." That's a reference to falling U.S. and Canadian production. One month does not make a trend. But the report notes that non-OPEC supply is expected to contract in 2016.

Will Washington state have the nation's first carbon tax?

Yoram Bauman is the world's only "stand-up economist." He makes his living poking fun at his own profession. But he's dead serious about fighting climate change, and he's the intellectual force behind a climate-related initiative that seems likely to appear on Washington state's November 2016 ballot, an initiative that would implement the first carbon tax in the nation.

The purpose of the measure, dubbed Initiative 732, would be to motivate households and businesses to cut down on the burning of fossil fuels, the major source of man-made emissions of carbon dioxide, the main greenhouse gas. By raising the price of fossil fuels it would encourage conservation and efficiency and the substitution of low-carbon and carbon-free sources of energy by making these energy sources more cost-competitive.

The organization pushing the initiative is Carbon Washington. The principle behind the proposal is simple: Raise taxes on what you want less of and lower taxes on what you want more of.

Truth takes a hit in the battle over U.S. oil export ban

They say that the first casualty of war is truth. And, on both sides of the fight over lifting the ban on exports of U.S. crude oil, the truth has already fallen into a coma. The ban was instituted in 1975 in order to make America less subject to swings in international oil supply after suffering the price shock associated with the Arab oil embargo in 1973.

Last week a committee in the U.S. House of Representatives voted to end the ban after a Senate committee voted in July to do the same. A vote by the full House and Senate could be near.

The proponents are careful NOT to say that the United States is energy-independent and so has oil to spare. Such claims made in the past backfired because it is too easy to look this up. Net U.S. imports of crude oil were almost 7 million barrels per day (mbpd) in the week ending September 4. That's out of about 15.8 mbpd of petroleum-based fuels consumed domestically.*

Stock market confessions, chaos, complexity and the illusion of control

In the old days of the Chinese Cultural Revolution those who said or did something perceived by the Chinese authorities to be counter-revolutionary were forced into public confessions--and then humiliated, imprisoned or even put to death.

It seems that old ways die hard. Last week the new China--the one that had thrown off the yoke of the Cultural Revolution--televised forced confessions by people who had dared to say that the Chinese stock market may not be a great place to put your money these days.

In addition, Chinese government officials are cracking down on short sellers--those who borrow stock to sell, hoping to buy it back at a lower price. Officials are prohibiting large holders of stock from selling for six months, and they are flooding brokerages with easy credit to encourage those brokerages and their clients to buy stocks with borrowed money. Who would have guessed that still nominally communist China would go to such great lengths to protect the most prominent symbol of out-of-control capitalism, a stock market bubble?