Sunday, July 15, 2018

"In Praise of Idleness" Revisited

Last week a new acquaintance displayed mild astonishment at the volume of my writing. He asked me how I come up with ideas for my pieces. I had to pause to think about that since my process has become more of a reflex that anything else.

My answer was that I have the luxury of time. Despite the heightened pace of my life since moving to Washington, D.C., I continue to leave many hours unscheduled so that I can read, think and write.

I am reminded of Bertrand Russell's 1932 essay entitled "In Praise of Idleness"  which critiqued the modern obsession with labor in the age of the machine and with production as an end in itself.

Much of the work in wealthy countries now, however, is in the service industries. Service jobs have always been around, but not as much as they are today. Yet strangely, in an age where a smaller and smaller proportion of the population produces the actual physical objects of life—work that in the past has been associated with long hours of physical labor and repetitive drudgery—many of those engaged in the professions, managerial work, and other white-collar jobs have seen their workday expand almost without limit. We receive emails from workplace colleagues and clients at all hours, sometimes with tasks that must be performed immediately. A dinner with a lawyer friend last week was interrupted by an email from a client who needed a memo that evening for the next morning.

Sunday, July 08, 2018

10 years after the oil price spike: Is peak oil a process rather than a moment?

Ten years ago this week—July 11, 2008 to be exact—the price of a barrel of oil on the New York Mercantile Exchange hit an intraday high of $147.27, its highest price ever. By the following autumn the world economy was in shambles and the price of oil was tumbling. The oil price eventually bottomed out around $34 per barrel in mid-February the following year.

Oil prices started 2002 around $20 per barrel and then rose almost continuously until mid-2008. As they rose, the world's best known critic of peak oil* prognostications, Daniel Yergin, began to look so foolish for having predicted ample supplies for decades to come that his firm finally reversed itself in mid-2008 and began to forecast higher prices. That should have been read as a contrarian signal; just two months later the oil bull market ended.

Peak oil thinkers at the time believed that their forecast of a nearby all-time peak in the rate of world oil production had been fulfilled. The official numbers seemed to confirm this. Petroleum geologist Kenneth Deffeyes' had made a half-serious prediction that Thanksgiving Day 2005 would mark the all-time high for production. Production of crude oil including lease condensate (which is the definition of oil) was slightly more than 74 million barrels per day (mbpd) in December 2005, but thereafter declined.

Sunday, July 01, 2018

Is the decline of coal a national security problem?

As the Trump administration seeks to resuscitate the moribund American coal industry, it has decided to invoke "national security" as the justification for a plan to subsidize coal-fired power plants.

Three things are notable about the administration's proposal. First, invoking "national security" has become a favored tool for getting around existing regulations, precedents and the Constitution. It's also handy for labeling one's opponents as unpatriotic in order to avoid a genuine discussion of the true purpose of a proposed action. Second, the coal industry used to be the one attacking renewable energy sources as too expensive to stand on their own without subsidies. As the cost of renewable energy has continued to plummet, the tables are now turning.

Third, the move has united an unlikely coalition in opposition that includes the oil and gas industry, anti-nuclear activists (since nuclear power plants are included in the subsidy plan), environmentalists and the Federal Energy Regulatory Commission which is dominated by Trump appointees. It takes amazingly bad policy to get an alliance like this together.

Sunday, June 24, 2018

OPEC production increase shows it's still fighting U.S. shale oil

It felt like opposite day as traders bid up the price of oil last week even as OPEC announced an increase in oil production that should have sent prices downward. The cartel decided it had room to move because of outages in Venezuela, Libya and Angola amounting to 2.8 million barrels per day (mbpd). The increase apparently wasn't as much as traders had expected.

Even though oil prices have drifted upward from the punishing levels of three years ago, OPEC is still interested in undermining the shale oil industry (properly called "tight oil") in the United States which it perceives as a threat to OPEC's ability to control prices. So, it is no surprise that OPEC has chosen to increase output in the wake of lost production elsewhere. OPEC does not want prices to reach levels that would actually make the tight oil industry's cash flow positive.

You read that correctly. The industry as a whole has been free cash flow negative even when oil was over $100 per barrel. Free cash flow equals cash flow from operations minus capital expenditures required for operations. This means that tight oil drillers are not generating enough cash from selling the oil they're currently producing to pay for exploration and development of new reserves. The only thing allowing continued exploitation of U.S. tight oil deposits has been a continuous influx of investment capital seeking relatively high returns in an era of zero interest rate policies. Tight oil drillers aren't building value; they are merely consuming capital as they lure investors with unrealistic claims about potential reserves. (Some analysts have likened the situation to a Ponzi scheme.)

Sunday, June 17, 2018

Leaked U.N. climate change report shows inverted thinking on growth

The Reuters news service managed a genuine journalistic coup by getting an advance copy of a U.N. climate change report not due out until October. Given what the report says—it's dire—and the fact that the climate isn't going to stop changing while the report gets reviewed, somebody decided to get the ball rolling.

Reuters has so far chosen not to make the entire draft available. But from its reporting we can see already the contradictory thinking that remains a barrier to facing up to climate change, to wit:

Global warming is on course to exceed the most stringent goal set in the Paris agreement by around 2040, threatening economic growth...

This kind of thinking is so obviously inverted, and yet the inversion is entirely invisible to most people. While it may be true that global warming threatens economic growth, it is far more salient to say that economic growth threatens us with global warming.

Sunday, June 10, 2018

Plato's dream and our modern nightmare

In a recent conversation a friend of mine described our modern understanding of the world around us as a conspiracy theory of the grandest proportions.

We posit theories which tell us that the phenomena we witness are merely ephemera resulting from an underlying structure of whirring particles—not even atoms anymore, but subatomic particles in such categories as bosons, leptons and quarks. This conspiracy gives us the theater that is our everyday experience, experience that cannot be explained in its own terms, but must be understood to be the result of forces hidden from our eyes and ultimately from all our other senses. The surface of things cannot be trusted.

The ancient Greek philosopher Plato gave us the first version of such a world in his theory of forms. Everything in our everyday existence is a pale imitation of ideal forms in the real world, he said. The perfect tiger exists in a different dreamlike realm where it offers a template for an actual tiger. The perfect chair in this other realm acts in a similar way. Our world is not the real one, but a mere ghost orchestrated by the real world which we can never know directly.

Sunday, June 03, 2018

Taking a short break - No post this week

I'm taking a short break from posting this week. I expect to post again on Sunday, June 10.

Sunday, May 27, 2018

The toxic price of convenience

As many as 110 million Americans may be drinking water contaminated by a toxic class of chemicals that according to the U.S. Environmental Protection Agency (EPA) are used in "stain- and water-repellent fabrics, nonstick products (e.g., Teflon), polishes, waxes, paints, cleaning products, and fire-fighting foams (a major source of groundwater contamination at airports and military bases where firefighting training occurs)."

The chemicals, referred to as per- and polyfluoroalkyl substances or PFAS, were detected by EPA-mandated testing of U.S. water supplies between 2013 and 2015. The full results of that testing have not been made public. An analysis done by the Environmental Working Group using available data uncovered the widespread contamination. The group's analysis was released last week.

Firefighting foams are a major source of the contamination, primarily from their release during routine training drills at both civilian and military airports. But the desire of consumers for nonstick pans and stain- and water-repellent clothing and carpets brings direct contact with the toxic chemicals.

Sunday, May 20, 2018

Genes, synecdoche and the possibility of editing ourselves

Margaret Atwood's 2003 novel Oryx and Crake depicts the evolution and aftermath of a bioengineered global catastrophe. Whether Atwood at the time was privy to insider knowledge that genetic alteration would become easy to do and ubiquitous or whether she just thought it would make a good premise for a novel, I do not know.

What we have now, however, is a world moving ever forward toward what is being called the democratization of genetic engineering or biohacking for short. Anyone with a credit card and a mailing address can now order their own genetic engineering kit. Meanwhile, in major research laboratories around the world visits from awed reporters are bringing the possibility of fabulous advances in medicine to the attention of the public.

Some 6,000 diseases are thought to be linked to our genetic structure. Could these diseases not only be prevented in newly forming humans in utero, but also cured on the fly in fully fledged humans through means that alter their DNA? The preliminary answer is possibly.

Sunday, May 13, 2018

America's 'Cadillac Desert': Is there a substitute for fresh water?

Thirty years after Marc Reisner penned Cadillac Desert: The American West and Its Disappearing Water his prophesy is being fulfilled. As the chalky rings which mark previous higher water levels around Colorado River reservoirs grow ever wider, Grist reports that major disputes are now afoot over the remaining water supply.

Modern economists have long told us not to worry about resource scarcity. Higher prices will bring on new supplies whenever resource supplies decline. And, if a resource truly is becoming unobtainable, then we'll always find a substitute.

When I hear this, I often counter: "There is certainly some truth to what you are saying. But, please tell me what the substitute for potable water will be." The response is usually to change the subject—for the obvious reason that there is no substitute.