Sunday, September 19, 2021

It's all connected: The natural gas market and its casualties

Natural gas was supposed to be the so-called bridge fuel to the low-carbon renewable energy economy. It was abundant, cleaner to burn than oil and coal, and more and more available to anyone who wanted it as a global market in liquefied natural gas (LNG) blossomed and boomed.

But this season it is looking increasingly like that metaphorical natural gas bridge is going to come up short. And, the effects are starting to ripple throughout the economy, not only in the natural gas markets themselves, but also in the electricity and agricultural markets.

First, there are the obvious signs in the natural gas market. In both North America and Europe natural gas prices have bounded upward. In Europe gas import prices have zoomed up more than 400 percent in the last year from $2.86 per million BTUs (MMBtu) to $15.49 per MMBtu. (A million BTUs is roughly equivalent to the U.S. measure of a thousand cubic feet or mcf.)

Sunday, September 12, 2021

Taking a short break - no post this week

I'm taking a short break this week and expect to post again on Sunday, September 19.

Sunday, September 05, 2021

A moving target: Hardening our infrastructure against climate change

As fires continue to rage in the American West, as swaths of Louisiana including New Orleans remain without electricity as a result of Hurricane Ida, and as flood damage resulting from the remnants of that hurricane continue to dog New York City and the Northeast, we are already hearing calls for "hardening" our infrastructure. Hardening means making our infrastructure more resilient in the face of disaster, both natural and man-made. That supposedly means making our electrical grid more resistant to wind, improving drainage and sewer systems to prevent flooding, and upgrading roads and bridges to prevent them from washing away.

While hardening infrastructure seems like a good idea, there are two major obstacles. One is obvious: It is much easier to harden infrastructure when building it from scratch. Upgrading any piece of existing infrastructure means working within the limitations of that infrastructure and replacing and adding parts in ways that are less expensive but also less ideal than rebuilding. While some of Louisiana's electrical grid might be rebuilt from scratch, very little electrical infrastructure elsewhere will be rebuilt since upgrading will be far less expensive. The same holds true for water and transportation infrastructure.

The second obstacle may not be so obvious: Climate, the primary reason for hardening, is a moving target. The planet has not simply reached a new stable state. Rather, climate change itself is changing, that is, it is getting worse over time. First, the rate of human-caused emissions of climate destabilizing carbon dioxide, the main greenhouse gas, continues to rise. We are adding more carbon dioxide every day at ever higher rates. Second, that trend has resulted in continuously rising concentrations of carbon dioxide in the atmosphere. Third, there is

Sunday, August 29, 2021

The standard American diet: Downstream revenue for the U.S. health care system

I once heard someone say that the standard American diet (high in fat, sugar, salt and processed foods) was a mechanism for providing downstream revenue to the country's health care system. Two recent reports add to the mounting evidence about how this strangely destructive system involving both food and agricultural chemicals works.

One report focuses on the effects of eating soybean oil. That oil is one of the most ubiquitous ingredients in packaged food, and it makes up the lion's share of cooking oils. To test this assertion, next to time you shop for groceries, read the labels of the packaged food and cooking oils you buy (unless you are already careful to avoid soybean oil—in which case you'll have to read labels on things you wouldn't dream of buying).

So, what did the report find? "[S]oybean oil not only leads to obesity and diabetes, but could also affect neurological conditions like autism, Alzheimer's disease, anxiety, and depression." Now, that really does spell lots of revenue for the medical system. The study notes that "soybean oil is by far the most widely produced and consumed edible oil in the U.S., according to the U.S. Department of Agriculture."

Sunday, August 22, 2021

Whatever happened to China's revolutionary molten salt nuclear reactor program?

Several years ago during a radio interview, the host told me that the Chinese were planning on deploying a commercial modular molten salt reactor (MSR) by 2020. For context, these nuclear reactors are based on existing technology demonstrated by previous operating prototypes, can use fuel that is hundreds of times more abundant than the only naturally occurring fissile isotope (uranium-235), are resistant to making bomb-grade material, and cannot suffer meltdowns. Modular design could allow them to be built in factories and shipped ready to install to any suitable location.

The host was confident about his prediction because it had come from one of the many books circulating at the time telling us how great the human future would be and that new technology would solve all the world's major problems including hunger, climate change, environmental pollution and resource scarcity. This would happen in part due to abundant energy produced by MSRs even as human populations continued to grow.

Sticking to the narrow question of MSRs, I opined that development of complex technologies takes far longer than anticipated and that there are unique challenges in the utility industry. I guessed it would be 20 years before a viable commercial Chinese MSR would appear.

Sunday, August 15, 2021

Vaccine passports, globalism and the threat to humankind

Globalism is in retreat and world leaders don't understand that they are being forced by circumstances to prune it back. When the Biden administration announced that it is working on a plan that would require all foreign visitors to the United States to prove that they are vaccinated for COVID-19, it was yet another sign that the supposedly inexorable march toward greater and greater integration of global society is being reversed.

Globalism is a word used to mean many things. Let me offer a definition for what I mean from a piece I wrote in 2016:

[I define globalism as] the management of worldwide economic activity and growth by large multi-national corporations which have no particular allegiance to any one country or people. Our belief has been that this arrangement is the most rational and efficient. Therefore, trade deals which bring down barriers both to international trade and to the movement of capital and technology across borders are believed to encourage global economic growth. That growth supposedly will ultimately lift the world's poor into the middle class and enrich everyone else while doing it.

I should add that a chief feature of this world is its extreme connectivity both physically through air travel and shipping and electronically through the internet. That connectivity promotes worldwide understanding, communication and trade. It also creates serious vulnerabilities and possibilities for harm to individuals and organizations.

Sunday, August 08, 2021

All of a sudden: Climate change tipping points appear with a vengeance

Across the world climate change seems to have arrived earlier than expected. There are world-class athletes with bodies trained for endurance and strength breaking down from the extreme heat visited on the Tokyo Olympics by mother nature. There are the continuing wildfires in the American West that take out entire towns. The drought there is so bad that states are thinking about paying farmers NOT to irrigate their crops as a conservation strategy.

One of the other effects of climate change is heavier rains and devastating floods. Recent floods in Germany were caused by rains characterized as once-in-a-millennium, rains which, for example, killed more than 200 people and caused $1.5 billion in damage to the German railway network. But, of course, statements about once-in-a-fill-in-the-blank rains or droughts seem less and less relevant in the age of climate change as what we call extraordinarily destructive weather just morphs into "the weather."

Once-in-a-millennium rains also visited parts of China recently dumping in just three days an entire year's rainfall on one town of 12 million.

Sunday, August 01, 2021

Sunday, July 25, 2021

Huge carbon capture pipeline network proposed: Industry's 'delay-and-fail strategy' rises again

An astute journalist I know once described carbon capture and storage (CCS) as a "delay-and-fail strategy" devised by the fossil fuel industry. The industry's ploy was utterly obvious to him: Promise to perfect and deploy CCS at some vague point in the future. By the time people catch on that CCS won't work, the fossil fuel industry will have successfully extended the time it has operated without onerous regulation for another couple of decades.

And because huge financial resources (mostly government resources) will have gone to CCS projects instead of low-carbon energy production, society will continue to be wildly dependent on carbon-based fuels (giving the industry further running room).

The trouble is that the cynical CCS strategy has already been under way and failing for more than two decades already. And yet, it is seeking a renewed lease on life with a proposal for a vast network of carbon dioxide pipelines "twice the size of the current U.S. oil pipeline network by volume." The public face of the effort is a former Obama administration secretary of energy with a perennially bad haircut, Ernest Moniz.

Sunday, July 18, 2021

Has OPEC finally won the war against shale oil?

I have maintained for the past six years that a key goal of OPEC has been to so demoralize investors in shale oil that they stop sending money to the companies that drill for it. As I've written previously, I believe that OPEC's contest with the shale oil industry is "part of a broader strategy meant to maximize Saudi revenues as production in the kingdom hovers at an all-time high over the next decade before beginning a decline." It now appears that OPEC may have finally won its war against shale.

Investment in shale oil companies has finally collapsed—even as oil prices levitate. It has been a long time coming. The industry would like you to believe that it is now showing "restraint" in its capital spending. But, to use a dieting analogy, there is a big difference between watching what you eat and having your jaw wired shut—involuntarily in this case. The industry has experienced the equivalent of the latter in the capital markets.

What has amazed all of us who watched this battle play out is that OPEC didn't win sooner. The relentless tolerance for losses among investors was beyond belief. And, when those investors returned in force after a brief vacation during the oil price bust in 2015, we skeptics grew concerned that rational thought had been eliminated from the universe.