Sunday, December 25, 2022
Sunday, December 18, 2022
It is almost impossible for a modern person living in a so-called developed country to imagine growing, hunting and foraging for all the food one's family eats. Yet, not all that long ago in human history, that's what most of the people in the world did. Given the current fragility of modern industrial society, we humans may not be so far away from the collapse of that society and a return to an agrarian society that will demand the combined skills of the farmer, the forager, the lumberjack and the hunter. (This is my prognostication, not that of the author mentioned below.)
In historian Steven Stoll's Ramp Hollow the author focuses on one particular group of people, settlers in the Appalachian Mountains and the process by which they were forced out of a way of life that provided all their basic foodstuffs and some extra produce and crafts used to trade for tools and what were considered luxuries in the hollows.
Stoll does not ignore the dispossession of Native Americans and other aboriginal peoples whose lands were overrun by Europeans. He recognizes this seizure as part of a worldwide process of enclosure of the commons for the benefit of a few.
For those who don't know how this works, Stoll provides an explanation. In Great Britain the aristocracy conspired with law courts and Parliament essentially to seize land for its sole use, land that had been held in common by the Crown and was available to peasants to meet their needs through farming, foraging, and hunting.
Sunday, December 11, 2022
Prior to the pandemic-induced downturn in world oil production, U.S. oil production growth was responsible for 98 percent of the increase in world production in 2018 (as reported in 2019). Almost all of that growth resulted from rapid increases in shale oil production which accounted for 64 percent of U.S. production (as of 2021).
Fast forward to today when OilPrice.com has declared that "The U.S. Shale Boom Is Officially Over." The reasons cited mostly have to do with management "discipline" regarding capital expenditure in favor of shareholder payouts and complaints about "anti-oil rhetoric" and "regulatory uncertainty."
But there might just be another reason for the slowdown in shale oil production in the United States: There isn't as much accessible and economical shale oil underground as advertised. Earth scientist David Hughes laid out his case for this view in his "Shale Reality Check 2021." (For a summary of Hughes' report, see my piece from December 2021 entitled, "U.S. shale oil and gas forecast: Too good to be true?")
Sunday, December 04, 2022
Sunday, November 27, 2022
For the second time in five years, scientists are warning about declining human sperm counts. (I wrote about this issue in "Declining sperm counts: Nature's answer to overpopulation?" early last year.)
Besides confirming the results of an important 2017 study, the authors now note an acceleration in the decline of sperm counts. In other words, whatever is causing that decline is getting worse. The rate of decline has doubled since 2000.
It's important to remember that when the fertility rate declines below replacement—currently 2.1 births per woman in so-called developed countries—populations shrink. This may not be a bad thing at first since overpopulation and overconsumption are huge barriers to building sustainable societies. But there comes a point when if fertility rates don't level off and then rise to replacement, extinction become a possibility.
Sunday, November 20, 2022
Sunday, November 13, 2022
Herman Daly, the dean of the steady-state economists, died recently at age 84. His view that the Earth could only support a steady-state economy in the long run—rather than the perpetual growth economy imagined by most of those alive today—was based on an understanding he came to early in his career. As a doctoral student Daly became convinced that the economy was a system like any other in the universe and therefore governed by physical laws.
So here are three important things I learned from reading Herman Daly and hearing him once at a conference long ago:
- The economy is a subset of the natural world and as such is
governed by the laws of the natural world. Daly was
particularly focused on the Second
Law of Thermodynamics, also known as the Entropy Law, which
establishes that we live a universe in which the distribution of energy
and matter are becoming more and more disordered. That is the meaning of
entropy, and this disorder will ultimately lead to the heat
death of the universe. (Don't worry; this scary-sounding heat
death is theorized to be 10100 years away.)
The practical significance of this realization is that human society is "using up" Earth's nonrenewable resources in the sense that resources:
- Are being made into objects or products which erode and deteriorate over time thus scattering nonrenewable resources unintentionally.
- Are scattered intentionally (think: phosphate rock fertilizers).
- Are burned (think: fossil fuels).
Once scattered or burned, they cannot be economically retrieved for reuse. That is, these processes cannot be reversed (except locally by creating more entropy).
To build a civilization that could remain functioning indefinitely, we humans would have to 1) live in a way that does not exploit renewable resources faster than they can be replenished (think: trees and fish), 2) use nonrenewable resources at a rate that does not surpass our ability to find renewable substitutes before these nonrenewable resources become prohibitively expensive or inaccessible altogether, and therefore 3) limit consumption (and thus ultimately population) to a level that will allow this balance. This would be the steady-state economy.
Sunday, November 06, 2022
The 2015 Norwegian television series "Occupied" has what will strike viewers today as an upside down premise. In the fictional series Russia invades Norway on behalf of the European Union to restore oil and gas production shut down by Norway's new environmentally conscious government. Despite its odd premise, I found the series to be a gripping drama when I watched it a few years ago.
At that time the real Russian government was outraged by the suggestion that Russia would ever have any designs on Norwegian sovereignty. In a statement the Russian government said: "It is certainly regretful that in the year when the 70th anniversary of the victory in the Second World War is celebrated, the series’s creators decided to scare Norwegian viewers with a non-existing threat from the East in the worst Cold War traditions."
Fast forward to today and there is plenty for Norwegians to worry about. As the largest supplier of natural gas to an energy-starved Europe, the Norwegians now consider themselves a prime target for Russian sabotage of the country's oil and gas infrastructure as drones presumed to be Russian visit Norwegian offshore production platforms.
Sunday, October 30, 2022
As a military conflict rages in Ukraine between Russia and what the Russian government calls "the West" (apparently meaning NATO allies and particularly the United States), there is a parallel economic battle between "stuff" and "finance." Both categories are affected by economic sanction regimes imposed by each side. But there is a striking difference in what each side has to sell.
In advanced countries, the percentage of the total economy devoted to services has long exceeded that devoted to goods. This is a reflection of the increasing productivity of those working in manufacturing, mining, agriculture, forestry and fishing who make it possible for so many people to work in service industries. These raw materials and goods industries provide all the stuff those of us in the service economy require to stay alive and perform our services.
It is a testament to the remarkable rise in productivity of the raw materials and goods industries that in the United States, for example, the service sector accounts for almost 77 percent of all economic activity. In France, the percentage is about 70 percent. In Russia the percentage is a little lower, about 68 percent, which may reflect Russia's relatively large mining, forestry, and agriculture inputs to its economy.
But regardless of the percentage, all service industries remain completely dependent on the raw materials and manufactured goods sectors to function. That has become even more apparent in the wake of price increases on essential goods and disruptions of trade that have resulted from the Russia-Ukraine conflict due to economic sanctions by both sides in the contest.
Sunday, October 23, 2022
French philosopher Bruno Latour died earlier this month at age 75. Those who are regular readers will know that he deeply influenced my thinking and honed my perceptive abilities. He was trained as an anthropologist and has been variously described a "science studies" scholar, a philosopher of science, a sociologist and just a plain old philosopher.
Of the many insights I absorbed from his work I mention four here which have been explicit or implicit in my regular pieces over the last 20 years. They are as follows:
1. Nature and culture are not two things; they are one. In his book We Have Never Been Modern Latour adopts the rather clumsy construction of "nature-culture." But such a lens enabled him to see that every era has had a nature-culture and that our "scientific" culture was not different in kind from societies of the past. These societies always had systems for understanding nature which were used by culture to integrate with the natural world. These societies were not "primitive" in the sense that they had no "science." They had what we would regard as a less sophisticated science. The discarding of the past, however, has left us poorer for we have thrown out the useful along with the outmoded—particularly some useful ways of seeing the world around us wholistically.
Sunday, October 16, 2022
Sunday, October 09, 2022
Modern global society is steeped in the idea of trade-offs, the notion that one must suffer losses to obtain desired gains. This prepares the way for disingenuous leaders to explain why sacrifices are necessary to reach supposedly exalted goals. Usually those sacrifices are made by the powerless in society; they are certainly not made by the leaders who call for sacrifices nor by the wealthy and powerful who benefit from them.*
This coming fateful winter season in Europe is likely to include a lively debate about whether the Dutch should make a perilous trade-off on behalf of an energy-starved Europe. So far, the Dutch have been firm about closing one of the world's largest natural gas fields, Groningen, no later than 2024—even in the face of severe European gas shortages resulting from the loss of gas from Russian pipelines.
The reason for that firmness has to do with the damage earthquakes are inflicting on the buildings located above and around the field, earthquakes related directly to withdrawal of Groningen's gas. In the northeastern part of the country, some 1200 earthquakes have severely damaged 27,000 buildings to the point that they are uninhabitable. About 3,300 structures have been demolished. A 2015 study reported that 152,000 homes need to be reinforced. As a result the government has been reducing gas withdrawals to mitigate the problem with an eye toward closing the field. Closing the field also comports with the government's greenhouse gas reduction goals.
But, will the Dutch be able to withstand calls for increasing production from Groningen as the European winter arrives?
Sunday, October 02, 2022
Some things are easy to predict, the orbit of planets, for example. They adhere to well-established physical laws not subject to alterations by the whim of humans.
But any forecast that has to do with humans and the complex systems within which they live is bound to be problematic if not downright wrong. When humans engage in billions of daily interactions with other humans and the physical world, they become surprisingly unpredictable, especially when novel or unexpected interruptions interfere with the smooth operation of those interactions.
It might be simpler to say that peace is more predictable than war, and that would capture most of what global society is feeling today in the wake of the Russia-Ukraine conflict. Each side in the conflict—and we must now include NATO countries on the side of Ukraine against Russia—has made decisions based on expectations that proved to be utterly mistaken. Each side assumed that we live in something like a billiard-ball world in which a single action has a precise and foreseeable reaction.
Sunday, September 25, 2022
Geopolitical risk took center stage last week when Russia announced it would annex the Ukrainian territory it has seized—after holding "referendums," of course, in those areas. Any attack on what would now become Russian territory would be met by all means necessary including nuclear weapons. Presaging this development, I wrote the following in a piece from March entitled, "World War III is here, but it's not what we expected":
[I]f Russia ultimately feels backed into a corner, the Russian leadership may see no alternative but to draw its main competitors into a wider war with the hope of instilling enough fear of a nuclear confrontation that both sides relent and a political settlement and security guarantees follow that include an agreement to end all economic warfare.
It is in just such circumstances that both sides may miscalculate or may misconstrue the words of the other and choose to escalate the conflict in a way that will make prophets out of all the screenwriters and novelists who depicted World War III as the end of civilization.
It seems "such circumstances" have arrived and both sides are choosing escalation. I am not predicting "the end of civilization." But I'm more worried than I was a week ago.
Sunday, September 18, 2022
European society is currently undergoing a real-time experiment in energy contraction. Sanctions imposed on Russia in the wake of the Russia-Ukraine conflict have led to a dramatic reduction in imports of Russian oil and natural gas. The Europeans are still receiving some Russian oil via pipeline though that flow was reduced last month. The reasons for the decline in natural gas deliveries from Russia—deliveries not prevented by Western sanctions—are disputed with each side accusing the other of being the cause.
Those of us who have been warning about the coming energy stringency believed that it would result from the rising cost of extracting hydrocarbons—and the inability to bring new production online faster than production is declining from existing wells. In Europe, we are getting an early preview of what such a future looks like when a society is unprepared for a sudden decline in the availability of oil and natural gas.
The loss of Russian natural gas imports is shaping up to be nothing less than catastrophic for Europe. Just two years ago the price of gas at the Dutch Title Transfer Facility, Europe's most liquid natural gas market, was hovering around €11 per megawatt hour. At the close last Friday the price was almost 17 times higher at just under €188. At one point in late August the price spiked to €349. In the decade prior to the outbreak of the pandemic, the highest price ever seen for the TTF was a little over €29.
Sunday, September 11, 2022
The ability to waste resources without the need to be concerned for one's well-being or future has always been a sign of wealth and power.
Thorstein Veblen coined the phrase "conspicuous consumption" in his famous 1899 treatise The Theory of the Leisure Class. The point, of course, for the wealthy is to be conspicuous so as to attract the attention, praise and deference of their fellow citizens. Veblen explained that wealthy people also often communicate their power to others by having a group of attendants around them who do little or nothing. He dubbed this "vicarious leisure." Since there are only 24 hours in a day, one person, however wealthy and powerful, can only enjoy so much leisure. Vicarious leisure made possible by the excess wealth of an individual is an unmistakable sign that a person is important.
The seemingly relentless drive of commercial enterprises to reduce waste and economize may appear to run counter to this. But that drive is only meant to produce more wealth for what Veblen calls the leisure class by which he means the power elite of society.
Sunday, September 04, 2022
Sunday, August 28, 2022
As I was reading a story about a Mexican drug cartel enforcing price controls on tortilla vendors—something that if done is normally done by governments—I was reminded of a scene from the film "Casablanca."
It's 1940 and Nazi officers are visiting Casablanca which at this stage of World War II is controlled by the German puppet regime in France called Vichy France. In their attempts to apprehend "an enemy of the Reich," the German officers meet with and question Richard Blain, the American owner of the eponymous Rick's Cafe, a nightclub and illicit casino.
As they discuss German aspirations in the war, one of the German officers asks Rick (played by Humphrey Bogart) what he thinks of the Germans occupying his "beloved Paris." He answers, "It's not particularly my beloved Paris."
Another German officer then asks if Rick can imagine Germans occupying London. Rick again deflects saying, "When you get there, ask me." But when a German major asks Rick about invading New York City, Rick fires back: "There are certain sections of New York, major, that I wouldn't advise you to try to invade."
Sunday, August 21, 2022
When I was teenager, I took a week-long cruise with my family up the Rhine River. The voyage started in Amsterdam. With stops at various cities, the ship sailed all the way to Basel, Switzerland, hundreds of miles inland and about 800 feet higher in elevation than Amsterdam.
That trip would be more perilous today as the levels of Europe's major rivers decline in the face of an extreme drought that has resulted in almost no rain for the last two months across much of Europe. The Rhine, the Loire, the Danube and the Po have all been hard hit. The fate of these rivers is intimately linked to Europe's energy, food, and transportation security. And the fate of both the rivers and the daily needs of Europeans are intimately bound up with the trajectory of climate change and resource depletion, especially of water and energy.
For the Rhine, freight transportation has been curtailed as barges are unable to carry their maximum weight without scraping the bottom of the river in some places. The Rhine is a central artery for the transportation of food and fuel. Just as Europe needs more coal in the right places to generate electricity as Russian natural gas supplies have been curtailed, the cheapest way of moving coal has now become impaired. Trucks and trains are now being forced to carry more freight than normal, straining an already strained supply chain.
Sunday, August 14, 2022
Sunday, August 07, 2022
I visited Death Valley in August 2008 shortly after rare, plentiful rains (at least by Death Valley standards) had turned one of the Earth's hottest and driest places into a riot of yellow, blue, red and pink color as wildflowers bloomed across the valley. The day I visited was a clear one and not at all unusual for Death Valley at that time of year. When at midday we tourists climbed off the air-conditioned bus, it felt as if I had just stepped into a pre-heated oven. It was 112 degrees F.
I had no thoughts of climate change that day. This was just the way Death Valley was and had been for a very long time. However, reading about recent heavy rains in Death Valley twice in the last week—rains so heavy that they trapped automobiles and closed roads due to mud and debris—I took note that in a place where dryness and heat are normal, water suddenly became a dangerous hazard, one that resulted in the closing of all roads in and out of the national park that comprises Death Valley. (Something similar happened in nearby Las Vegas, Nevada the week before as water flooded streets and gushed through roofs flooding casinos and frightening visitors. This in a city that gets less than 5 inches of rain a year.)
Drought has been getting almost all the media coverage in the American Southwest. That's in part because the drought story persists over long periods and becomes a story whenever fear of water restrictions or actual restrictions surface or when it looks like rain might bring relief.
Sunday, July 31, 2022
More than a century ago two German chemists, Fritz Haber and Carl Bosch, perfected a technique for taking nitrogen from air and combining it with hydrogen to make ammonia, now widely used to make nitrogen fertilizers. What came to be known as the Haber-Bosch process unleashed a revolution in crop yields which were no longer limited by natural inputs of nitrogen.
So important is this process to crop yields that it is estimated that without it half the people alive today would starve. If the worldwide application of nitrogen fertilizers had no adverse consequences, there would be no problem continuing business-as-usual. But the consequences have become worrisome:
- Increasing algal blooms fed by nitrogen runoff in waters around the world are killing aquatic life and endangering humans who wade or swim into such waters. This is the cause of so-called "red tides" and also of the famous "dead zones" at the end of some of the world's largest rivers.
- Nitrogen fertilizers stimulate microbes in the soil thereby increasing their conversion of nitrogen to nitrous oxide, a potent greenhouse gas. Those fertilizers are responsible for a dramatic rise in nitrous oxide in the atmosphere. This gas is 300 times more potent than carbon dioxide as a greenhouse gas. Nitrous oxide is the third most important greenhouse gas behind carbon dioxide and methane.
- The imbalances and blooms caused by nitrogen fertilizers are threatening many species and thus the planet's biodiversity.
Sunday, July 24, 2022
Climate change deniers have had to adjust their story in recent years as the effects of climate change have become more and more apparent to people where they live all around the world. The first iteration was that climate change is good. It will make winters milder and it will help "fertilize" crops with additional carbon dioxide which all plants need to manufacture the food they live on.
While the "greening" effect of rising carbon dioxide concentrations is real, there is a limit to how much it will help plants. As for milder winters, they may be good for some and worse for others. Where they result in diminished snows in critical watersheds such as the Himalayas and the Alps, the effect can be diminished water supplies, particularly at crucial times in summer when mountain snowmelt can stabilize flows in key streams and rivers that might otherwise be very low so that they can provide irrigation water and water for human consumption.
So, now the deniers argue that we can just adapt. This is, of course, the path of least resistance since it requires no major changes in business-as-usual. Let's see how that's working out.
Sunday, July 17, 2022
It's hard to say that three years makes a trend. But one of the world's major energy consulting firms has lowered its estimate of world oil reserves for three years in a row now.
Rystad Energy provides a publicly available analysis of world oil reserves each year. In 2020 Rystad wrote that "the world’s recoverable oil [dropped] by around 282 billion barrels." That represented a 12.9 percent decline in just one year. In 2021 the firm stated its analysis showed that recoverable resources declined by another 178 billion barrels or about 9.4 percent. Rystad said the decline was due in part to new modelling based on resources "at well level rather than field level." The closer Rystad looked, the less oil there seemed to be.
In 2022 Rystad noted yet another decline of almost 9 percent in its press release headline. Recoverable oil resources dropped another 152 billion barrels. (For all estimates Rystad uses figures for crude oil and lease condensate which is the accepted definition of oil.)
Sunday, July 10, 2022
Half of all the oil consumed since the dawn of the modern oil age in 1859 has been consumed from 1998 through 2021 inclusive based on data available from the BP Statistical Review of World Energy. Approximately 1.4 trillion barrels of oil is thought to have been consumed to date (though there are estimates as low as 1.1 trillion). That means that in just the last 24 years total historical oil consumption has doubled.
It is hard for most people to imagine the vast increases in the rate of consumption of practically everything that makes modern life possible. Resources appear without most of us ever thinking about how or whether the rising rates of consumption can be sustained.
For copper, one of the critical metals we depend on for electrical, mechanical and even monetary purposes, the story is similar. The U.S. Geological Survey (USGS) estimates that about 700 million metric tons of copper have been extracted to date. Based on mining statistics from the Copper Development Association, that means about half of all the copper ever mined has been mined from the year 2000 through 2018 inclusive.
Could we double total oil and copper consumption again in the next 24 and 19 years, respectively?
Sunday, July 03, 2022
Sunday, June 26, 2022
An obscure federal commission created by the U.S. Congress issued a report in May suggesting that genetically engineered crops (often referred to as genetically modified organisms or GMOs) could become a new battlefront with China and not in the commercial sense. The U.S.-China Economic and Security Review Commission wrote in a staff research report that "Beijing could easily hack the code or DNA of U.S. GM [genetically modified] seeds and conduct biowarfare by creating some type of blight that could destroy U.S. crops."
The report said that while GMO crops are designed to resist naturally occurring crop diseases, the Chinese could create a genetically engineered fungus or other disease that targets the type of crops grown widely in the United States.
The writer of the report understands precisely why such an attack might work:
[A] virus or fungus engineered to kill a GM plant could wipe out an entire crop with no genetic variation to mitigate the losses. In a natural crop, a variety of DNA traits in the field could mitigate some losses and ensure some of the plants survive the viral or fungal infection.
Sunday, June 19, 2022
The U.S. oil and natural gas industry long fought for and in the last decade finally won release from federal restrictions that limited exports. The ostensible reason was that because of the so-called "shale revolution" in the country's oil and gas fields, the United States would have plenty of oil and gas to spare for export.
The real reason behind the push was that the oil and gas industry wanted what almost every other industry in American already had: The right to sell their products to the highest bidders no matter where they lived on the globe.
This made it almost certain that as U.S. prices rose to match world prices, U.S. consumers would feel the pain. And, since energy prices affect everyone who votes, they are always politically consequential.
So, it is unsurprising that with U.S. regular gasoline prices over $5 per gallon President Joe Biden lashed out at U.S. oil companies—which are having one of their best years ever—saying they need to increase production of refined oil products. The companies have responded that their refineries are running at close to maximum capacity and so there is not much they can do in the short run.
Sunday, June 12, 2022
Scientists thought they could make hamsters more cooperative by editing out a gene for a receptor that, when activated by a particular hormone hamsters produce, causes more aggression. Essentially, they made the hamsters immune to the aggression-promoting hormone expecting the hamsters to become more cooperative.
But just the opposite happened. Both male and female hamsters with the altered gene became more aggressive—much more aggressive.
There are several problems with the reductionist thinking that resulted in this experiment. First, behavior is exceedingly complex. We describe and define it using words which have multiple and ambiguous meanings. Those words need to be understood in a larger context. And, even when they are, those words still only point to meaning in our environment and inner experience. They are not the thing itself.
Sunday, June 05, 2022
Sunday, May 29, 2022
Memorial Day marks the unofficial beginning of summer in the United States as the temperate breezes of spring give way to an enveloping heat that has become more and more intense each year due to climate change. This summer forecasters are expecting two big things: deadly heat and electricity outages. Mainstream news coverage is now explaining why these are inextricably intertwined, a relatively new development in such coverage. And, it turns out that the recent blistering record heatwave in India and Pakistan is but a foretaste of our future.
Those of us who have covered climate change in the last two decades believed that by the time such connections became obvious and noted by mainstream outlets, the world would be so far along in the process of global warming that stability-challenging events such as grid failures would become normal.
That's because of the lag time between when we introduce greenhouse gases into the atmosphere and when we experience the warming caused by them is between 25 and 50 years. This is due to what's called the thermal inertia of the oceans which means more or less that the oceans take time to warm (usually decades). Even if we were to take drastic action now that stopped all further emissions of greenhouse gases, the world would be in for several more decades of rising temperatures. But, of course, we as a global society are instead pursuing business as usual.
Sunday, May 22, 2022
Coal miners for much of the last century—until the introduction of modern monitoring devices in the 1980s—brought canaries into mines. They did so because these birds are extraordinarily susceptible to the presence of carbon monoxide, a deadly, odorless gas the build-up of which continually threatens death to coal miners. When the canaries stopped singing, miners knew something was wrong and that it was time to evacuate quickly.
Today, helium (the gaseous element, not the cryptocurrency) is in the headlines because there is an acute shortage. I first called attention to a coming helium shortage back in 2009 with a piece entitled "Let's party 'til the helium's gone." It appears that that is precisely what global society has done in the 13 years since.
The story of helium is a cautionary tale for it has provided a canary-like signal for many years that all was not well with our way life. I once more wrote about mounting troubles in the helium market in 2013 and again in 2019. For each and every resource, we as a society have assumed that we will always find the substitutes we need in the quantities we require at the prices we can afford by the time we need them. We are now testing that belief with regard to helium and other materials such as certain rare earth elements which are used in a wide variety of modern technologies such as consumer and military electronics and alternative energy equipment.
Sunday, May 15, 2022
Last week a Bloomberg writer at the very end of an article explained that the "only solution" to high gasoline and diesel prices is recession. While I would not accuse the writer of advocating degrowth—this would be too radical for a mainstream business publication—his analysis points to a key and obvious cause of today's high prices for oil and other commodities: There isn't enough of them to go around.
There's an old saying in the oil industry that the solution to high prices is high prices. The logic is that high prices will do two things: 1) Reduce demand as those who cannot afford oil products at high prices will cut back and 2) incentivize more exploration and production as companies seek to increase production to take advantage of high prices.
The big question today is whether the second mechanism can actually ramp up oil production enough to bring down prices. In a recent survey a large number of oil executives said their production plans do not depend on current prices. Many cited the desire of investors in publicly traded companies to receive larger dividends and benefit from the corporate buyback of shares (which tends to increase the stock prices as fewer shares are available for trading).
Sunday, May 08, 2022
The world is becoming less connected. And, it is becoming less centralized. This has both political and social implications and relates to the newly erupting fight over abortion in the United States which I will come back to later. In short, in a decentralizing world, where you live will matter more, a lot more.
Overarching supranational institutions such as the World Trade Organization, the World Bank, and the International Monetary Fund—long focused on integrating the world into one large economy and increasingly one common commercial culture—are now seemingly less relevant than choosing sides in the Russia/Ukraine conflict or choosing no side at all (which is just a third grouping).
Many countries are now frantically trying to make themselves more self-sufficient in food and energy, the supply of which have been seriously disrupted and curtailed because of the war between Russia and Ukraine and the far-reaching economic sanctions which followed. (See my previous pieces here and here.)
Sunday, May 01, 2022
You can be forgiven for thinking that the most important thing happening now is the war between Ukraine and Russia. After all, the Russian government through its foreign minister and its mouthpieces in the media has threatened to use nuclear weapons to win the war in Ukraine. Whether you think Russia is bluffing or not, it's all very scary.
Meanwhile, elsewhere on planet Earth our perilous ecological situation is spiraling from bad to worse. That this is the big story and has been for many decades has escaped the media but does occasionally get their attention when the perilous consequences cannot be ignored. Climate change and the resulting drought and heat that are now our constant companions are currently showing up in the news cycle. To wit:
- The water level in Lake Mead (formed by Hoover Dam to provide water to Arizona, California and Nevada) has declined to historic lows. The original intake valves that used to supply water to Las Vegas and environs are now exposed for the first time ever. (Other deeper ones were built in anticipation of this day. See my coverage of the now 23-year-old drought when it was only 10 years old.)
- The Metropolitan Water District of Southern California for the first time is limiting water use for outdoor watering. The order affects about 6 million residents. The District is also calling on users in the entire district of 19 million people to lower water use by 30 percent.
Sunday, April 24, 2022
Sunday, April 17, 2022
With a wide range of commodities in limited supply, various regions of the world are now behaving as if they are engaged in simultaneous games of musical chairs when it comes to commodity shortages.
The games differ by commodity and by region, but they all share one characteristic: As in a game of musical chairs, someone will have to go without. And, as in a game of musical chairs, available supplies are shrinking (as represented by the removal of chairs).
An interesting twist on this game is that now some chairs are being transferred from one game to another. For example, the Biden administration has declared that U.S. liquefied natural gas (LNG) exports to Europe will be stepped up in order to displace natural gas from Russia—which has become a suspect source due to the conflict between Russia and Ukraine and the broad economic sanctions against Russia. The gas still flows for now. But will Russia use a gas cutoff as a weapon? That is a question agitating all of Europe.
Sunday, April 10, 2022
Sunday, April 03, 2022
In the wake of a rapidly evolving realignment of the world trading system resulting from the economic equivalent of World War III, President Joe Biden last week took the first of what are likely to be many steps toward building greater self-sufficiency for the United States.
Biden called for increasing U.S. production of key minerals used in the manufacture of electric vehicle batteries. He invoked the Defense Production Act which allows the government to support production of certain materials and goods deemed essential for national defense and even to order industry to mine minerals and make machinery including vehicles such as tanks and bombs.
For the Biden administration its first small step toward U.S. self-sufficiency consists of making companies which mine minerals key to electric vehicle batteries such as lithium, nickel, graphite, cobalt and manganese eligible for direct subsidies or purchase commitments to incentivize increased production. The applicable program (called Title III) has about $750 million to spend, not that much to rectify what is a huge deficit.
Sunday, March 27, 2022
Ukraine, a major exporter of grains and other food crops, announced soon after the Russian invasion of the country that it would ban exports of many food crops to ensure that Ukraine has enough to feed its population.
Russia, another major exporter of grain, especially wheat, curtailed its exports of wheat, rye, barley, and corn. It also curtailed sugar exports.
The list of countries banning or reducing exports of foodstuffs is now increasing so quickly that it is starting to look like a pile-up on the freeway:
- Argentina, a major soy exporter, has halted exports of soy oil and soy meal.
- Hungary has banned grain exports.
- Moldova has halted exports of wheat, corn and sugar.
- India, the world's second largest sugar producer, is contemplating capping sugar exports through the end of September. The 8-million-ton cap would effectively cut off sugar exports after May.
- Indonesia, the world's largest exporter of palm oil, has curtailed exports to keep local prices in check as they have risen 50 percent so far this year.
- Serbia will stop exporting wheat, corn, flour and cooking oil.
- Turkey has halted the re-export of grains, oilseeds, cooking oil and other agricultural commodities sourced from other countries that are now sitting in warehouses and were bound for other countries until the ban.
- Jordan has banned export or re-export of rice, sugar, powder milk, dried legumes, fodders, wheat and wheat products, flour, yellow corn, ghee and all types of vegetable oil.
Sunday, March 20, 2022
Movies and books have often portrayed World War III as either the final chapter of the human epoch or as a new but primitive restart for those who survive the nuclear conflagration. We cannot know if such prophesies will ultimately come true. For now World War III appears to have started with Russia's attack on Ukraine, but without nuclear missiles so far.
Make no mistake. The battlefield for this war is worldwide; it's just that it is primarily an economic battlefield. When Russia attacked Ukraine, the other great powers did not send soldiers and tanks. Instead, they orchestrated one of the most comprehensive economic warfare schemes ever devised.
Measures included cutting Russia out of the international payments system called SWIFT, blocking Russian exports (except most commodities) and discouraging commerce of many kinds with Russia. Many countries froze accounts owned by Russia's central bank and also accounts owned by prominent wealthy Russians. Wealthy Russians targeted by sanctions also saw yachts moored outside Russian territory seized. The value of the yachts runs into the billions of dollars.
In the wake of these unprecedented sanctions, many non-Russian companies have reduced, suspended or eliminated operations in Russia. Here is a list of over 400. Not all were forced to take action because of the sanctions. But companies expected that doing business inside Russia would become extraordinarily difficult and also did not want to get on the bad side of governments around the world participating in the sanctions.
Sunday, March 13, 2022
There is nothing like a sudden decline in available oil supplies to bring out forgiveness in what is dubbed in and around Washington, D.C. as "The Blob." This term refers to an amorphous, but powerful group of think-alike U.S. foreign policy actors both inside and outside of government who have influenced every U.S. administration since the end of World War II. The main tenet of The Blob is that America knows best how to lead the world and it must do so.
The Blob seriously penalizes those whom it regards as a threat to American power and security. The Blob likes to use words such as "rogue" and "pariah" to describe those countries which get on its wrong side. (Many are admittedly run by truly odious regimes.) To get a sense of who has violated The Blob's sensibilities, one needs only to glance at the U.S. Department of Treasury website page entitled "Sanctions Programs and Country Information." On it you will find The Blob's who's who of rogue and pariah states.
With the abrupt drop in oil supplies from Russia in the wake of the Ukraine/Russia conflict, the list of rogue and pariah states is about to get shorter as the necessity of obtaining ready oil supplies trumps any concern about previous challenges to The Blob's narrative.
Sunday, March 06, 2022
At the beginning of nearly every war including the current one in Ukraine, there are those who loudly declare that it will be over shortly and then business-as-usual can resume. They are rarely right. While no one can say for certain what the trajectory of the Russian-Ukrainian conflict will be, the economic warfare that is going on alongside it is very likely to destroy the current global trading system.
The last time a worldwide trading system was destroyed was just over a century ago. From the late 1800s up to the eve of World War I the dominance of the British fleet on the high seas and the reach of the British Empire created an era of stability and interconnection highly favorable to worldwide trade.
Then, World War I blew that stability and interconnection apart. Later, the Great Depression led to a global trade war that finished off the remnants of the international trading system. The world did not achieve a trading system that spanned the globe unhampered again until the end of the Cold War—which had split the world into two trading blocks for nearly 50 years.
It is unlikely that Russia will simply back down even in the face of crippling economic sanctions. Things have gone too far and the Russian leadership has staked too much on its position that Russia must have its own sphere of influence free from NATO soldiers and rockets. What the Russians have historically called "the near abroad" must not harbor threats to Russian security, they say. Think of this as Russia's Monroe Doctrine.
Sunday, February 27, 2022
One of the rationales suggested for going to Mars is that given all the vagaries of the universe, human culture would have a better chance of surviving far into the future if humans settled on two (or more) planets. In the abstract, this statement seems axiomatic.
Before accepting this proposal, however, it might be worthwhile to ask where else we might use resources devoted to establishing a permanent human colony on Mars. First, let's examine the logic behind the "two planets" idea.
The logic is simple. If humans have established cultures on two planets, the separation between the planets will generally keep a major catastrophe including an extinction event on Earth—say, a highly lethal pandemic or the eruption of several supervolcanoes—from affecting the other planet. In the case of Mars the separation at its closest is about 34 million miles. At its farthest, the separation is 250 million miles. It is this isolation which offers protection.
So, the question arises then whether something approximating this isolation might be achieved right here on Earth. The answer is that it has already been tried, and it works. The isolation of peoples across the globe was a longstanding fact in prehistory and even in historical times until relatively recently.
Sunday, February 20, 2022
The news that the Biden administration shut down imports of avocados from Mexico in response to threats made against U.S. safety inspectors had restaurants and consumers contemplating both higher prices and possibly no avocados at all sporadically.
By the end of the week, Mexico and the United States had resolved the situation to the delight of avocado lovers in the United States and elsewhere. But, the incident illustrates why having enough of something doesn't always translate into ready availability. One incident involving threats to inspectors brought an entire supply line to a halt.
Avocados, of course, have a limited shelf life and so must move quickly from field to consumer. It doesn't make sense to stockpile avocados as they will simply ripen and then rot if unused. And yet, the supply lines for most other things—including ones that have a long shelf life such as computer chips—have become increasingly fragile as manufacturers and retailers have practiced what is known as just-in-time (JIT) delivery. JIT means arranging delivery of what one needs just in time to use it, say, in an assembly process or to restock shelves. Essentially, it eliminates or at least dramatically reduces inventories.
Sunday, February 13, 2022
Sunday, February 06, 2022
Few people noticed when energy reporters wrote in early January that the United States had become the world's largest exporter of liquefied natural gas (LNG). Now, a group of U.S. senators has noticed and say those exports may be driving up heating and electricity costs for their constituents. In a letter to the secretary of energy, they are asking the secretary "to conduct a review of LNG exports and their impact on domestic prices and the public interest, and develop a plan to ensure natural gas remains affordable for American households."
Who knew that exporting natural gas from American gas fields would raise natural gas prices at home? Well, the natural gas industry certainly knew. In the last decade, the industry was smarting under persistent low prices as it continually overproduced gas into a flooded domestic market.
It pushed for and succeeded in relaxing rules for exports in general and for expedited approvals of new export cargoes and facilities. The U.S. Department of Energy still has de facto control over most natural gas exports. But policy in the last five years has been to assist and encourage expansion of those exports.
Sunday, January 30, 2022
When crossing the ocean by sea or by air, small differences in the direction you take will result in huge differences in your ultimate destination. Back in the middle of the last century, human society might have made relatively minor adjustments in its trajectory, say, in the growth of consumption of resources including energy, even perhaps deciding that these must level off at some point in the future.
We humans made no such adjustments and so we now find ourselves faced with only draconian choices. But we do not seem to understand that we've arrived at a destination far from the one we imagined in 1950. An example is the celebration in the environmental community of a recent federal court decision to invalidate oil and gas leases offered by the U.S. government on 80 million acres of the Gulf of Mexico. (It turns out that oil and gas companies only bid on 1.7 million of those acres.)
The ostensible reason for invalidating the leases was that the government did not adequately consider the effect of the leases on climate change. The government could do another evaluation and try selling the leases again. But environmental organizations would likely challenge the leases in court again.
While the effects of climate change are already severe and likely to become even more so, global human society is utterly dependent on uninterrupted flows of fossil fuels to function. And, while climate change activists continue to champion a so-called energy transition to green energy sources such as solar and wind, what they might not understand is that so far, these alternatives have been used to augment human energy consumption. They have not displaced fossil fuels at all. Nor are they likely to in any time frame that matters.
Sunday, January 23, 2022
French philosopher of science Bruno Latour coined the phrase "parliament of things" in the early 1990s. He imagined the social democratic order gradually embracing the need to represent in its political deliberations the interests of the entire nonhuman world—animals and plants, rivers and oceans, mountains and deserts, in fact, the entire universe outside the human sphere.
After all, it is that world upon which we humans depend for our very existence. And, that nonhuman realm was showing signs of change even then that could threaten the continuity of human culture in the form of climate change, soil erosion, toxic pollution, species loss and myriad other challenges to the stability of the environment in which humans were enmeshed.
Fast forward 30 years and Latour explains in a 2020 lecture why the parliament of things as he originally conceived it is no longer possible. There is no longer a political space where humans can "agree to disagree," that is, where they can deliberate to find common ground and a consensus.
Sunday, January 16, 2022
When we think of technology, we generally think of machines and gadgets that populate our life. For those in industry, the word may mean a process with many steps for the manufacture of a product—products that include things as complex as a computer and as simple as a potato chip.
For the ancient Greeks the word techne—from which we get technology—referred to what they called the mechanical arts—which in our day would be all of industry and commerce geared toward the practical ends of survival and for the support of other pursuits such as sports and entertainment.
While we watch our technically advanced global society founder as its denizens are once again brought low by another wave of COVID-19, we find ourselves stuck in a loop that tells us we simply need more technology. In this case, we say we need continuous vaccine booster shots. And, of course, we need everyone who hasn't already done so to receive a vaccine of some sort. While there is considerable evidence that vaccines lessen the severity of an infection and therefore reduce the likelihood of hospitalization and death, they neither prevent COVID nor prevent its transmission.
What we cannot fathom is that technology is just as often the source of problems as solutions, and that more technology often creates more problems. The technology that allows anyone with the money to fly across the ocean in less than a day is a pandemic-promoting technology. The technologies that enable transoceanic and transcontinental shipping are pandemic-promoting technologies. Even long-distance car rides allow us to spread infectious diseases to a frightening extent.
Sunday, January 09, 2022
Sunday, January 02, 2022
"Water, water, everywhere, nor any drop to drink."
When English romantic poet Samuel Taylor Coleridge published those words in 1798, there was no dense network of modern concrete and asphalt roads in Great Britain (or anywhere else) and there were no automobiles or trucks to ride on them. And so, of course, there was no salting of roads in winter.
The excerpt quoted above is from Coleridge's famous poem, "The Rime of the Ancient Mariner," and refers to the mariner's desperate desire for drinkable water while floating on the ocean.
We as a society are inching closer each year to bringing the ancient mariner's predicament on land because of our practice of salting roads in winter to make them safer for driving. The amount of salt we use for this purpose in the United States has gone from 0.15 metric tons per year in the 1940s to 18 million metric tons annually as of 2017.
The result has been dangerously escalating salt concentrations in rivers, streams, lakes and ponds. Some urban bodies of water exceed the U.S. Environmental Protection Agency's standard for protecting aquatic life by 20 to 30 times. Humans, of course, aren't aquatic life, but the trend in the salinization of surface water is troubling given the important role those waters play in water supplies around the country and the world.