Archive for the ‘Uncategorized’ Category

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The “Green Jobs” Paradox

October 6, 2011

In a post that is primarily concerned with a debate (or, more accurately, a pissing match) on the Solyndra scandal, Mickey Kaus identifies the basic fallacy of the “green jobs” concept – it can be green, or it can produce jobs, but it is unlikely to be both at the same time:

One way to look at it is to note that there’s an obvious tension between the “green” part of a “green jobs” agenda and the “jobs” part. If all you care about is 1) promoting solar power, then solar cells manufactured in China are as good as cells manufactured here–even better, if they’re cheaper and therefore more likely to be installed. But if that’s the case then Nocera hasn’t shown that you need government financing to achieve your goals because private financing is unavailable. Grove doesn’t speak to this problem.

But if 2) what you care about is promoting jobs, then it will take a whole lot more than government loans and loan guarantees to keep green manufacturing and engineering jobs in the U.S.

However, citing Walter Russell Mead, Kaus discerns a way to square the circle and make both the “green” and the “jobs” parts of the equation cohere:

I’d always figured “green jobs” backers were focused on goal (1) and resigned to creating lots of Chinese manufacturing jobs. After all, there’d still be jobs that could only be performed here in the U.S., like installing the damn things. Nocera seems to suggest that’s not enough–or that when the time comes to try to rationalize a disastrous Obama boondoggle, it’s OK to quietly switch to goal (2).

P.S.: The alternative long-run strategy for goal (2), giving the market play while keeping the manufacturing jobs here, was I believe suggested by Walter Russell Mead: make it as easy as possible to start manufacturing enterprises in the United States, using our own recently acquired supply of productive workers willing to work cheap–for $10-$14 an hour, say. That means protecting firms from Davis-Bacon-style high-wage mandates and Wagner Act unionism, and from new “protected classes” of potential plaintiffs–a conservative goal.  It may also mean relieving them of health care and pension costs by having government shoulder that entire burden–a liberal goal. Plus, of course, lower taxes (achieved in part by cutting government to the essentials) and simple, predictable regulations.

This is, of course, the key to a successful politics – recognizing that both sides have important goals and giving something to each in order to accomplish a larger goal.  Unfortunately, both primary ideological camps in the US today are convinced that they must try to steamroll the opposition and forgo all such compromise.

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Dealing with the Pakistan problem

October 3, 2011

India’s relationship with Pakistan is at once more complicated, more intimate, and vastly more deadly than is our own.    Still, although the situations are not analogous, there is much that US policymakers can learn from the experience of the Indians.  Sushant Sareen, writing for India’s Institute for Defence Studies and Analysis, today offers a bit of that perspective.  Pakistan is maddening, even for those who know it best and whose very existence is threatened by that nation’s nuclear force.  At the end of the day, Pakistan’s own latent instability is what is saving it – for both India and the US, the only thing more dangerous than the deceitful, duplicitious and dysfunctional state that is contemporary Pakistan is the anarchic vacuum that would be left should that state fail or be toppled.  Sareen’s piece ends with a wistful imagining of a day when the US finally “solves” the Pakistani riddle and lets loose its fury.  I don’t think that day will ever come, as I don’t believe that riddle is solvable.  Maybe the best that can be hoped for is to pawn the Pakistanis off onto the Chinese.

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Every gas or oil rig job adds 3 other jobs outside industry

September 8, 2011

Terrific whiteboard presentation from the Offshore Marine Service Association.

Any jobs/deficit reduction program that does not feature America’s vast mineral wealth is simply not a serious plan.

This can be done responsibly and with sensitivity to environmental concerns.  It is not an all or nothing choice.

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Labor Day Recess

September 5, 2011

There will be no new posts until late Tuesday (Sept. 6), at the earliest.

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Global Resource Scarcity

August 29, 2011

The current issue of World Politics Review is definitely worth reading, whether you fully agree with the various authors or not.  Articles are behind a subscription wall, but non-subscribers can gain access to individual articles on a pay-per-view basis.

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North America, the new global energy giant

August 17, 2011

The Baker Institute’s Amy Myers Jaffe makes the point in an article at Foreign Policy:

For half a century, the global energy supply’s center of gravity has been the Middle East. This fact has had self-evidently enormous implications for the world we live in — and it’s about to change.

By the 2020s, the capital of energy will likely have shifted back to the Western Hemisphere, where it was prior to the ascendancy of Middle Eastern megasuppliers such as Saudi Arabia and Kuwait in the 1960s. The reasons for this shift are partly technological and partly political. Geologists have long known that the Americas are home to plentiful hydrocarbons trapped in hard-to-reach offshore deposits, on-land shale rock, oil sands, and heavy oil formations. The U.S. endowment of unconventional oil is more than 2 trillion barrels, with another 2.4 trillion in Canada and 2 trillion-plus in South America — compared with conventional Middle Eastern and North African oil resources of 1.2 trillion. The problem was always how to unlock them economically.

But since the early 2000s, the energy industry has largely solved that problem. With the help of horizontal drilling and other innovations, shale gas production in the United States has skyrocketed from virtually nothing to 15 to 20 percent of the U.S. natural gas supply in less than a decade. By 2040, it could account for more than half of it. This tremendous change in volume has turned the conversation in the U.S. natural gas industry on its head; where Americans once fretted about meeting the country’s natural gas needs, they now worry about finding potential buyers for the country’s surplus.

And, shale gas is just the tip of the ice berg.  The same or similar technologies are about to make economic recovery of America’s vast reserves of shale oil possible – and our shale oil reserves areou about three times the reserves of Saudi Arabia.  Finally, eventually and inexorably, clean coal-to-liquid processes that capture and sequester carbon will make the massive coal reserves of the US yet another strategic economic resource.

Of course, readers of EGP know that for years we have been predicting that (given the political will), the United States could become the worlds largest user, producer, and exporter of fossil fuels all at the same time.

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US military researchers hope to reclaim water from diesel exhaust

August 9, 2011

From Daily Tech:

Oak Ridge National Laboratory researchers are in the midst of developing a process called capillary condensation. The project is being led by Melanie DeBusk, research staff member of the Physical Chemistry of Materials group in the Materials Science and Technology Division at Oak Ridge National Laboratory.

Using the fuel that the military burns in Humvees, generators and tanks could provide additional water for soldiers since fuel oxidizes and produces carbon dioxide and water after combustion. According to DeBusk, one gallon of diesel fuel should create one gallon of water, but not all of this water is usable. But with capillary condensation, DeBusk figures she can recover 65 to 85 percent of this water for military use.

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The Rise and Decline of Los Angeles

August 8, 2011

Terrific new piece from Joel Kotkin in City Journal.   Key section:

Why has Los Angeles lost its mojo? A big reason is a decline in the power and mettle of the city’s once-vibrant business community. Between the late 1980s and the end of the millennium, many of L.A.’s largest and most influential firms—ARCO, Security Pacific, First Interstate, Union Oil, Sun America—disappeared in a host of mergers that saw their management shift to places like London, New York, and San Francisco. Others, such as the Los Angeles Times and the Dodgers, were sold to outsiders. The most influential business leader downtown today, according to a recent Los Angeles Downtown News ranking, is Timothy Leiweke, president and CEO of AEG Entertainment—a subsidiary of the Anschutz Company, which is controlled by Philip Anschutz, a Denver billionaire. The fact that essentially a regional manager is so influential would make the city’s past leaders spin in their graves.

. . . The most influential businesspeople . . . are professionals, or corporate vice presidents charged with sending earnings from L.A. back to their headquarters. As a result, they have little independence and few resources to challenge what (are called) “the public emperors.”

Those “emperors” are the leaders of L.A.’s public sector. As business retreated, power in Los Angeles, largely by default, shifted toward the government and its workers. Through the long decline that started in the 1990s and accelerated after 2005, government employment has climbed. Back in 1990, 13 percent of employed Angelenos worked for the government; by 2008, that figure had jumped to 16 percent. Even after a deep recession, the public sector—both county and city—continues to pull in big payouts. Today, almost 18,000 county workers earn more than $100,000 annually. The city has followed a similar path, with its city council the highest-paid in the nation. In L.A., as in much of California, public employees’ pensions have risen at unsustainable rates.

The machine that controls Los Angeles these days consists of an alliance between labor and the political leadership of the Latino community, the area’s largest ethnic population. Once virtually powerless in the region, Latinos elected to office now control many of the smaller municipalities along the industrial belt that stretches from downtown to the county line. But since they serve at the whim of labor interests, they seldom speak up for the area’s many small businesses and homeowners. It’s a familiar story: because Democrats are almost assured of victory in L.A.’s general elections, candidates must win only the low-turnout, union-dominated party primaries. John Pérez, a longtime union political operative and now speaker of the California State Assembly, won the Democratic nomination in 2008 with fewer than 5,000 votes and then easily crushed the GOP candidate. Pérez’s predecessor as speaker was Fabian Núñez—another L.A. labor official. No wonder the Sacramento Bee’s Dan Walters calls the labor movement “the closest thing to an omnipotent political machine anywhere in the state.”

Read the whole thing

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Catastrophic Climate Change Theory takes another blow

August 5, 2011

Danish researchers, publishing in the journal Science, conclude that a “tipping point” for Arctic ice melt is unlikely.  A lay discussion of the research is presented by BBC News here.    Key conclusions from study leader  Svend Funder:

Dr Funder and his team say their data shows a clear connection between temperature and the amount of sea ice. The researchers concluded that for about 3,000 years, during a period called the Holocene Climate Optimum, there was more open water and far less ice than today – probably less than 50% of the minimum Arctic sea ice recorded in 2007.

But the researcher says that even with a loss of this size, the sea ice will not reach a point of no return.

“I think we can say that with the loss of 50% of the current ice, the tipping point wasn’t reached.”

The idea of an Arctic tipping point has been highlighted by many scientists in recent years. They have argued that when enough ice is lost it could cause a runaway effect with disastrous consequences.

“I don’t say that our current worries are not justified, but I think that there are factors which will work to delay the action in relation to some of the models that have been in the media.

“I think the effect of temperature and global warming may cause a change in the general wind systems which maybe will delay the effects of the rapidly rising temperatures a little bit.”

The researchers are now set to examine DNA from the fossils of polar bears to try and find out how the animals fared when the temperatures were higher and there was much less ice.

As always, a repeat of our own stand on climate change:  We have no doubt that climate change is occurring, and that there is a important anthropogenic component to it – our own research into the shrinking summer Arctic ice cap confirms this.  However, we also believe that the claims of impending doom and catastrophe are unsupported by data and analysis.  Finally, EGP holds that climate change is a problem of technological origin and that the solution will also be technological – not socio-political.  Finally, we are technological positivists and believe that a solution to that component of climate change that is human caused can be mitigated by human technology.

Hat tip to Prof. Jacobson at Legal Insurrection for the links.

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Jobs and Economic Growth

July 29, 2011

Walter Russell Mead has a typically excellent blog post on employment patterns in the 21st century.  Short version:  Lost industrial jobs are not coming back, and even in the rosiest scenarios will stay flat in the near and middle terms.  Growth is to be found in service jobs, and that doesn’t necessarily mean dead-end retail work.  There are a number of people in my personal social circle who make very good, middle class to upper middle class livings offering services:  Masseuses, yoga instructors, personal coaches, landscape architects, etc.

Mead recommends Michael Spence’s essay in the latest issue of Foreign Affairs.  I tweeted a recommendation to Spence earlier this month, but I did not blog about it.  I recommend it now, along with this recent Chatham House research report which serves as an excellent companion piece to both Mead and Spence.  I am going to excerpt a chart from the Chatham House paper.  The first shows why service jobs are growing – because American consumption is exploding, while consumption of durable goods has been relatively flat for decades while consumption of non-durable goods has been declining.

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Top Turkish Military Leaders in Mass Resignation

July 29, 2011

breaking news, not much detail . . . the Chief of Staff and the individual commanders of the Land, Sea and Air forces have all quit.

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Japan comes storming back

July 29, 2011

Via Truth About Cars:

After being devastated by the unprecedented triple disaster in March, Japanese automakers have shown terrific resilience and are nearly back to pre-disaster production and export levels mere months after the earthquake/tsunami/meltdown triple threat.  Congrats to our courageous and persistent allies.

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A brief post on the debt crisis

July 27, 2011

I am not a financial sophisticate, and this sort of thing is not the usual topic of this blog, but I have been thinking off and on about the debt crisis while sipping Mai Tais the last couple of weeks.

First of all, it is clear to me that this is not a true financial crisis.  The United States of America is not anywhere close to being insolvent.  This is a political crisis manufactured by both sides, each seeing an opportunity to solidify their political fortunes in the upcoming election season (that said, I do believe the freshman Tea Party Republicans are sincere in their position – I do not believe there is anything sincere in the positions of the old line Republicans, nor the Rockefeller Republican wing of the Democratic Party represented by President Obama).

Now, given that the United States is not insolvent, it seems to me that a technical default and a ratings downgrade would represent an outstanding opportunity for the individual investor.   A downgrade means higher yields on US bills and bonds, but the unquestioned solvency of the nation means that the security behind them remains the same.  I understand that the big institutional investors have different interests – they are more concerned with capital appreciation than with yields – but this represents a tremendous opportunity for Main Street investors.

As an aside, I am also fascinated to see the latest evolution of the Republican Party.  All of my life, the GOP has slowly been becoming less and less  country club and Wall Street and more and more populist and rural.  In the present episode, we see the populist wing really flexing its muscles and giving the finger to the Wall Street wing, which has traditionally been one of the most important power centers of the GOP.  The times, they are a-changing.

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EGP on Vacation

July 13, 2011

back in two weeks

thanks to all visitors for their support

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EIA estimates at least 750 trillion cubic feet of recoverable shale gas

July 11, 2011

In a review of shale gas and shale oil resources in the US, the Energy Information Agency has concluded that the total recoverable shale gas resource is 750 trillion cubic feet – and, if anything, that number is likely to rise with better technology and recovery processes.  US consumption is currently around 21 TCF per year, and is projected to climb slowly to 26 TCF by 2035.  That means there is roughly 3 centuries worth of natural gas embedded in our domestic shale.  If we work to maximize this bonanza, of course, then consumption should increase much more than the current projections, as gas can substitute for both coal and oil consumption.  Nonetheless, this report emphasizes the enormous vastness of this energy supply.  There is a fortune beneath our feet.  If we find the political will to maximize it, the money that would flow into both national and state treasuries via leases, royalties and taxes (both corporate and payroll from the thousands of new jobs that would be created) would go a long way to solving our financial woes.

Natgas fracking promises a relief to both our energy and our fiscal woes.   Below is a map of the various states that stand to profit from natural gas.  It is time for a system of regional political alliances to bypass the old Republican/Democratic political divide and supercharge the natgas boom.

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A brief note on American electoral politics

July 8, 2011

With a few exceptions, I don’t usually do politics on this blog, at least not directly, but two of my regular reads are Walter Russell Mead and Mickey Kaus.  After reading Mead’s latest this morning, it suddenly occurred to me that if the Democratic party ever embraced a platform crafted by Mead and Kaus, they would probably achieve a supermajority in both houses of Congress and hold the presidency for a decade.

As an aside, take the time to read Mead’s The Jacksonian Tradition.  I think our non-American readers who puzzle over the choices the US makes in foreign policy will find this especially enlightening.

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10 new stories on the confluence of Energy and Geopolitics

July 1, 2011

US, West remain dominant over the rising BRIC states, Business Times (Singapore) editorial

Australia  challenging Qatar as dominant LNG supplier, Petroleum Economist (EnerGeoPolitics would like to note that Australia is doing so with a mere fraction of the reserves that the US has)

Can spray-on quantum dots make solar cheaper and more efficient?  Technology Review

Kazakh/Russian military exercises aimed at China?  The Bug Pit

China advancing on Coal-to-Liquid (CTL) programs not allowed in the US, Institute for Energy Research

Canada trumps US for E&P Investment, Petroleum Economist

North America is the Land of Opportunity for Energy, ExxonMobil Perspectives

Spy Shots of the New Tesla Model S, Gas 2.0 (The Model S will feature a 300 mile battery, but that will be still overpriced at $89K after the government rebate, leading to the following item)

Electric cars in need of a new business model, Financial Times

Events in Egypt spurring rapid Israeli development of newly discovered gas fields, Petroleum Economist

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Mad Max in Libya

June 14, 2011

The Atlantic has a terrific photographic feature today featuring the jury rigged weapons of the Libyan opposition.  The photos, only a few of which I post below, evoke the post-apocalyptic world in which Max Rockatansky scrabbled to survive in The Road Warrior and Mad Max:  Beyond Thunderdome.

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Update to China, USA energy comparisons

June 9, 2011

In response to an emailer’s question:  The US consumes approximately 19% of the world’s energy and with it accounts for approximately 21% of the world’s economic output.  China now consumes a bit over 20% of the world’s energy, and with it creates less than 8.5% of the global economic output.

Sources:  IMF for GDP, BP Statistical Review for energy.

Draw your own conclusions

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Friday links post

June 3, 2011

Some stories I have collected over the past few days:

Can motor oil be a renewable resource?

Signs of possible failure in the world carbon market

An update on efforts to extract the energy of methane hydrates (methane hydrates, aka “combustible ice,” is potentially an abundant energy source, but also, potentially, a dangerous one)

Tumbling natural gas prices put pressure on the renewables industry

 

 

 

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