Stranded in the Falklands

I was a globally-curious political junkie of a college student when Margaret Thatcher went to war against Argentina.

As a colonizer-hating pinkie, I was against Thatcher and the UK, even if I had no idea about the issues.  Much later in my life, when I watched Groucho Marx, I wished I had known about "I'm against it!" as my guiding principle ;)

When I did find out from the atlas where the Falklands are, it shocked me that the UK would go to war so far away from home over some small islands.

The Falklands are practically a launching pad to the Antarctic and with barely any population, yet Thatcher was keen on fighting for it!

A year later, Reagan sent the US forces to invade Grenada.  Some simpaticos they were!

A few weeks ago, Larissa MacFarquhar wrote about how much the Falklands have transformed over the past couple of decades and are now at global crossroads.  A recent development there was about oil:

Since the nineteen-nineties, oil companies had been exploring the waters around the islands, and by the early twenty-tens it had become clear that substantial oil deposits existed in the basins offshore.

Money started coming in.

Well, all that was in an era before COVID-19.  Once the coronavirus took charge of the world, everything changed.

In late March, as the plague drew closer, and the planes stopped coming, the islanders, like people everywhere, sat at home and went online, trying to figure out what was going to happen. Oil prices had plunged since the pandemic began, and covid had been spreading among workers living in close quarters on rigs, so it seemed unlikely that drilling would start anytime soon. With restaurants closing in Europe, demand for fish was a fraction of what it had been, and that was in addition to the possibility that Brexit would result in European tariffs approaching twenty per cent. It was not yet clear what all this meant for the fisheries, but their revenues made up nearly two-thirds of the islands’ income, so any reduction would have an enormous impact. Tourism was the second-largest business, and that consisted almost entirely of cruise-ship passengers. Who was going to sign up for a cruise now? And if the tourists stopped coming restaurants and hotels would close. You weren’t allowed to stay in the Falklands without a job, so the people who worked there and didn’t yet have permanent residency might have to go home.
What would happen if planes stopped bringing in regular supplies? Would the islands become remote once more, hoping the deliveries came in, relying on homegrown food if they didn’t? In the old days, fruit was shipped in once a month—it was hard to grow anything on the islands other than berries—and people called mutton “365” because they ate it every day, sometimes for all three meals. Could that happen again? Would younger people who’d grown up in Stanley learn to slaughter sheep?

And what happens to the offshore oil exploration?  A gambler's loss:; "tapping some fields no longer makes economic sense"

[A] decade after the discovery of as much as 1.7 billion barrels of crude in surrounding waters, the British overseas territory known for sheep rearing and tension with Argentina looks as remote as ever. Rather than the next frontier, the project to extract energy risks being added to a list of what companies call “stranded assets” that could cost them huge sums to mothball.

The coronavirus has, in some ways, accelerated the shift away from fossil fuels, even as the sociopath in the White House continues to operate in his own world of alternative facts.  A tRumpian world in which coal is king, and oil is black gold.

I wonder if the stable genius knows where the Falklands are!

College is to prepare for a world of unscripted problems

I have sent a slightly edited version of this to the newspaper editor .. maybe it will be published, maybe not ;)

The price of crude oil and of gasoline at the pump have been tumbling down to levels that most of us would not have thought possible. Eight years ago, a barrel of petroleum was selling in the global marketplace at $147 and experts predicted that soon it would reach a stratospheric $200 per barrel. Yet, since the new year dawned, it has been a story of how low can you go, with experts wondering whether it might even get closer to $20, and when it eventually goes up if $50 might become the ceiling price.

A belief that oil prices would only climb forever also propelled large enrollment increases in petroleum engineering. The near-guarantee of well-paying jobs lured young people to the discipline. But, over the past few months, the news reports have been less than encouraging. “Petroleum engineering degrees seen going from boom to bust” was CNBC’s report. The Wall Street Journal asked, “Who Will Hire a Petroleum Engineer Now?” The trade publication, Oil and Gas Investor, discussed enrollment declines in US petroleum engineering degree programs.

Of course, this is not new, but is a repetition. The oil price crash of the 1980s led to significant enrollment declines in those degree programs. By the end of the 1980s, only about 1,400 students were majoring in petroleum engineering programs across the country. As oil price rose, and as it stayed in the hundred-dollar range, enrollment soared to more than 11,000. But, with the recent oil price collapse, “petroleum engineering degrees will lose attractiveness in the years to come" said Penn State University’s Turgay Ertekin, according to Oil and Gas Investor.

There is an important lesson here, above and beyond oil price and enrollment in petroleum engineering. We live in a world where economic activities cannot be predicted with any sense of accuracy. As Yogi Berra said, it is difficult to make predictions, especially about the future. What might be the price of oil a few months from now, leave alone a few years from now, is unknown. It is not merely about the resource. We need to think about the technological changes that the future will bring, the geopolitical issues, the overall health of the global economy, and more, which make predictions highly suspect.

Students pursuing any field of study, including petroleum engineering, need to understand that the economic conditions of today and, therefore, the implications for jobs, is not the best indicator to prepare for the economic conditions and jobs for a few years down the road. Even four years make a huge difference—the freshman students who started on petroleum engineering four years ago face a reality now that is very different, a reality where perhaps half of them might not find jobs in the oil and natural gas industry.

Students and universities betting on “employable” majors based on current characteristics of the economy are betting against the only thing that we know for sure—the future will not be the same as today. The bets get riskier as we head into the future years. From steel workers to office secretaries and engineers, the experience of the past years has been that jobs can disappear in a hurry, leaving them worrying about their futures.

What can the young do then, and what should the universities do for the young? As the Association of American Colleges and Universities (AAC&U) wonderfully put it, the challenge is “Educating for a World of Unscripted Problems.” Unscripted because we do not know what the future holds. But, we do have a sense of how we might be able to reasonably prepare for that future, by developing skills that will help people to constructively engage with the unscripted problems.

Yet, contemporary public policy discussions on higher education and workforce preparation rarely ever go into serious and sustained thinking about the “world of unscripted problems.” When, for instance, a semiconductor manufacturing company comes to town, we incorrectly believe we need more engineers and material scientists, only to realize a few years later—as was the case with Hynix—that the entire factory could close down. We seem to only consider the latest fad, without preparing for the longer-term uncertain future.

It is not that the petroleum engineering graduates will be jobless and unemployable. If their universities have educated them well for a “world of unscripted problems,” then those students will have skill sets that they will be able to apply but in industries completely different from what they had originally aimed for. If only we can use this example to understand that higher education is more than about a major and is, instead, about preparing for a “world of unscripted problems.”

Dear Venezuela: I really, really wish I knew how to quit you

Venezuela was the first country that I visited after coming to America.  It has been a long association with that country, which has been nothing but a poster-child for oil as a resource curse.  With the price of oil in a free fall of sorts, I was sure the news about Venezuela would not be pretty; after all, "Venezuela needs oil prices to hit $111 a barrel just to break even" and oil is trading at less than $30!

The Wall Street Journal opens its report with this:

The plunge in the price of oil is causing more investors to bet that Venezuela will default on its $120 billion pile of foreign debt, an event that would trigger a messy battle over the country’s oil shipments and deepen its economic and political crisis.

When pretty much all the oil-export revenue will go to serving the debt obligations, it leaves little for anything else:

The government owes more than $50 billion to private companies that service its economy, ranging from oil contractors and airlines to supermarkets that need dollars to import everything from flour to toilet paper. Major airlines have halted flights to the country and auto manufacturers and others have shut plants after the government was unable to pay for imports of needed parts and materials.

Oil prices are not projected to go up anytime soon.  So, more misery for the people in Venezuela.

Venezuela’s consumer inflation, already the world’s highest, will more than double this year to a level above all estimates from economists surveyed by Bloomberg, the International Monetary Fund said.
Inflation will surge to 720 percent in 2016 from 275 percent last year, according to a note published by the IMF’s Western Hemisphere Director, Alejandro Werner.

720 percent?

Venezuela’s economy will shrink 8 percent this year following a 10 percent contraction last year, according to the IMF. 

WTF!

When economic conditions worsen, then what happens to stuff that people need?  Remember this post from last April about the shortage of toilet-paper thanks to the screwed up "socialism" of Hugo Chavez and his anointed successor?

The situation has worsened, to say the least, since last April.

It’s also having a serious impact on the sex lives and health of many Venezuelans.

How so, you ask?

Contraceptives, including birth control pills and condoms, are also on the growing list of hard-to-get items. Only one-tenth of the normal volume of contraceptives used by Venezuelans was available last year, El Pais reported earlier this month, citing the head of the country's pharmaceutical federation. 

No milk. No toilet paper. No contraceptives.  Hmmm, can it get any worse?

Experts have been warning of the potentially devastating consequences of the contraceptive shortage in a country that already has one of the highest rates of HIV infection and teenage pregnancy in the region. ...Venezuela's economic crisis could turn into a health disaster.

Oh my!  Add to this the Zika virus too.

How awful!

Going down. Price of oil, that is!

A year ago, I blogged about the collapsing oil prices, in which I quoted from a Project Syndicate op-ed:

economics and history suggest that today’s price should be viewed as a probable ceiling for a much lower trading range, which may stretch all the way down toward $20. 

Apparently we are getting closer to the $20 floor-price!

AAA and GasBuddy, two organizations that follow gasoline prices, say that gasoline prices below $2 will not be unusual in most of the United States. As oil prices fall, and refinery capacity stays strong, the price of gas could reach $1 a gallon in some areas, a level last reached in 1999. As a matter of fact, the entire states of Alabama, Arkansas, Missouri, Oklahoma and South Caroline have gas prices that average at or below $1.75.

The dollar at the pump seems overly optimistic.  But, I get the point--prices will fall some more before refineries are forced to shift to a different mixture in the spring.

Source

Less than two dollars a gallon.  Oh my!  I wonder what all those left-environmentalists who complained that oil corporations were conspiring to keep the prices high are now talking about; damn, if only I hadn't pissed off the faculty colleagues, I could have asked them ;)

The eternal optimists at Reason are, rightfully, dancing with I-told-you-so moves:

In fact, it is very likely that the world is now experiencing the downward sloping side of latest commodity super-cycle. Generally speaking, as each succeeding super-cycle unfolds resource prices eventually reach levels even lower than the nadir of the previous cycle. In any case, depletionist innovation-deniers need to be publicly shamed.

And oil prices are dropping because?

Oil is priced in dollars, so a stronger dollar makes oil relatively more expensive for all consumers using currencies other than the dollar. Morgan Stanley says that while the oil glut is responsible for oil prices falling from triple digits down below $60 per barrel, the fall from $55 to around $35 largely comes from the strong performance of the U.S. dollar over the past year.

So, what should I tell students about the future price of oil?

Last fall, Goldman Sachs even suggested that the current oil price slump mirrors what happened when oil prices collapsed in the 1980s and remained low throughout the 1990s. In other words, humanity may enjoy low oil prices for perhaps another 15 years.

What?

How good are those oil price predictions?  We need to keep in mind a quote that Reason offered a year ago:

When contemplating the future of oil prices, one should always keep in mind U.S. foreign service officer James Akins’ observation, “Oil experts, economists, and government officials who have attempted in recent years to predict the future demand and the prices of oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah.” Akins wrote that in 1973.

As Yogi Berra famously said, making predictions is difficult--especially about the future ;)

Dear Venezuela: "I wish I knew how to quit you"

In a national survey, the pollster Consultores 21 found 30% of Venezuelans eating two or fewer meals a day during the second quarter of this year, up from 20% in the first quarter. Around 70% of people in the study also said they had stopped buying some basic food item because it had become unavailable or too expensive.

That is in Venezuela, not in some stereotypical sub-Saharan African country ravaged by decades of civil war after gaining independence from the colonial White supremacists!

I am not even from Venezuela and I get worked up reading such news--all because it was the first ever country that I visited after leaving India and making myself at home here in these United States.  In many posts, the last one in April, I have written about my intellectual and personal experiences in Venezuela, and about my utter disappointment with the recent developments.  I suppose for my own health, I should cease my relationships with countries and people; but then, to quote that wonderful line from Brokeback Mountain, "I wish I knew how to quit you."  Thus, here I am reading up and blogging about Venezuela!

Food-supply problems in Venezuela underscore the increasingly precarious situation for Mr. Maduro’s socialist government, which according to the latest poll by Datanálisis is preferred by less than 20% of voters ahead of Dec. 6 parliamentary elections. The critical situation threatens to plunge South America’s largest oil exporter into a wave of civil unrest reminiscent of last year’s nationwide demonstrations seeking Mr. Maduro’s ouster.

Even as I read that, I recalled a colleague rambling on and on a few years ago about how Hugo Chavez--Maduro's predecessor and mentor--was the best thing that ever happened to Latin America.  "He is not any dictator like how he is presented here" she--an uber-left White American academic--argued.  I suppose every sociopath has his defender!

Caption at the source:
A woman holds up a giant hundred Bolivar note with the word, “Hungry” written on it in Spanish during a gathering to protest the government of President Nicolas Maduro, as well as economic insecurity and shortages, in Caracas, Venezuela, August 8, 2015.

The messed-up Chavez policies that Maduro has continued with were underwritten by high oil prices, which have fallen way down from their triple-digit highs.

A year ago, the international price per barrel of oil was about $103. By Monday, the price was about $42, roughly 6 percent lower than on Friday.

Indications are that the oil prices will not bounce back up any time soon.

David L. Goldwyn, who was the State Department special envoy and coordinator for international energy affairs in the first Obama administration, said that if the Brent global oil benchmark price stays below $45 a barrel, that is “a red flag for stability issues across the oil producing world.”
“The hemorrhaging of government budgets reliant on oil will force dramatic cuts in spending or dangerous increases in borrowing, if not both,” Mr. Goldwyn said. “The countries without significant foreign exchange reserves are most at risk, and they include Nigeria, Angola, Algeria, Venezuela and Iraq."

So, what is Venezuela doing?  Adding more zeroes to its currency in order to counter hyperinflation! 

Many Venezuelans have to carry wads of cash in bags instead of wallets as soaring inflation and a declining currency increase the number of bills needed for everyday purchases. The situation is set to get worse. Inflation, already the fastest in the world, could end the year at 150 percent, said the official.

Larger denominations will help those people from having to carry bags of cash to buy bread and milk!

The new notes -- of 500 and possibly 1,000 bolivars -- are expected to be released sometime after congressional elections are held on Dec. 6, said a senior government official who isn’t authorized to talk about the plans publicly.

When oil prices were high, Venezuela's Chavez sent highly subsidized oil across the waters to his pal, Castro.  What an irony that the Castro brothers have all but ditched their socialist rhetoric and now want to make friends with the US, while Venezuela is adrift in a hyperinflationary socialist mess where supermarket shelves are bare.  

It's tough to make predictions, especially about the future

Yes, that was one of the classics from the one and only Yogi Berra.  If only many important aspects of life can be so easily articulated (even if it fails a formal grammar test.)

For years, I have heard enough and more left-leaning people, especially within academia, beat up on oil companies and their profits.  (Meanwhile, I was beating up on the company that makes the computers that the left-leaning people love to use--for the sheer audacity with which it earns gazillions while portraying a saintly image!)  The evil oil corporations, the story went, did everything possible to increase their profits.  Even launched wars, with the government as their proxies.  The bad oil companies did their best to stifle innovation with the development of the electric car, they argued, because the electric cars will not need oil (gasoline.)

I wonder what they will complain about now, with oil prices tumbling to levels that nobody predicted.  "Peak oil" and the evil corporations together means soon we will be looking at $200 per barrel, they warned us.  The cold, hard, news of today is this:

Brace for $40-a-barrel oil.

So, whatever happened to that framework of the evil oil corporations that want to earn those huge profits?  Why are they now practically giving away gasoline at the pump?

Meanwhile, the company that I love to beat up on is as busy as ever storing its gazillions at tax havens, far away from the taxman and gets a free pass from the left-leaning folks who continue to target the oil companies.  Oh well, a strange world this is!

So, about that oil price.  How come from the experts to the conspiracy nutcases, everybody got it so wrong?  Well, re-read the Yogi Berra quote in the subject line!

Of, if you want an oil-specific quote:

When contemplating the future of oil prices, one should always keep in mind U.S. foreign service officer James Akins’ observation, “Oil experts, economists, and government officials who have attempted in recent years to predict the future demand and the prices of oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah.” Akins wrote that in 1973.

Isn't that a lot more words than the simple Yogism? ;)

Ron Bailey, whose note in Reason is where that quote is from, includes another quote there from a Saudi billionaire who claims that oil will never go back up above $100 a barrel.  Say what?

In a commentary at Project Syndicate, is another interesting question:

should we expect $50 to be the floor or the ceiling of the new trading range for oil?

Say what?  This commentator expects oil prices to go well below $50?  Whatever happened to greedy oil companies and their profits?

economics and history suggest that today’s price should be viewed as a probable ceiling for a much lower trading range, which may stretch all the way down toward $20. 

Are you kidding me?

the marginal cost of US shale oil would become a ceiling for global oil prices, whereas the costs of relatively remote and marginal conventional oilfields in OPEC and Russia would set a floor. As it happens, estimates of shale-oil production costs are mostly around $50, while marginal conventional oilfields generally break even at around $20. Thus, the trading range in the brave new world of competitive oil should be roughly $20 to $50. 

Don't bet your farm on this, as they say.  Why?  I refer you to the Yogi Berra quote in the title.

A couple of years ago, I received a snarky email from a former student.  In the email, she referred to the stepped up production in the US thanks to fracking up the Bakken oil as evidence that I was bullshitting in the class.  (Ok, she didn't use the BS word.)  I wrote back to her that my worry has never been about exhausting the oil supplies or the price, but about the continued and expanded use of carbon as the source of energy and its impacts on global climate.  Even now, though it is awesome to fill up a tank at a remarkably low price, I do worry about the long-term consequences of a delay in energiewende.

Maybe I should not worry about tomorrow and, instead, seek consolation in the Yogism, "It's tough to make predictions, especially about the future."

Not putting the money where the mouth is: Ecuador's oil in Yasuni!

I love the natural environment as much as any regular person might.  A hike in the woods, the sight of a waterfall, the spray from the ocean waves, the gentle breeze, and, of course, my regular walk by the Willamette River, well, I would not want to trade these away.  To live where I live with so many natural wonders is a wonderful salary by itself.

At the same time, as I have often noted in this blog, I am not ready to tell less economically developed countries how they ought to deal with their natural resources.  That is where, I suppose, I begin to part ways from the typical American environmentalist.

Living in the USA, we have all the energy we need and all the material comforts--and more--that one might look for.  It is, therefore, easy to look at the vast majority of the countries across the planet and find fault with them for not doing more to protect the natural environment.

If they really mean it, then those advocating for the environment ought be willing to pay for it.  After all, if a much poorer country wants to tap into its natural resource, the objective there is economic growth.  Not using those resources means giving up on that potential economic benefits.  Those interested could then pay the country a comparable amount in order to conserve those natural resources.  Right?

Talk, is of course, cheap.  Thus, we engage in all kinds of rhetoric.  But, when it comes down to it, most environmentalists are like the rest of us who not only don't like to let go of what we have but also would love to have more.  Hence my lame joke that I rarely meet an environmentalist who doesn't want a pay raise!

The recent news item about Ecuador's government abandoning its idea to protect a bio-diverse habitat is a case in point:

OPEC-member Ecuador, where the rights of nature are recognized in the constitution, plans to develop crude deposits in an Amazon area declared a biosphere reserve by the United Nations as existing fields age and economic growth slows.
President Rafael Correa will ask the country’s congress to allow drilling in the Ishpingo-Tambococha-Tiputini oil fields in eastern Ecuador’s Yasuni National Park, he said yesterday in a speech broadcast on public television station ECTV. The area’s estimated oil reserves could be worth more than $18 billion, Correa said.
The decision reverses a policy to preserve nature in an area eight times bigger than Los Angeles, estimated by Correa to hold 920 million barrels of crude, or about 20 percent of Ecuador’s reserves. The proposal to develop the area comes as economic growth is forecast to slow for a third year.

While Correa and politics might be corrupt like any other country, one cannot blame the guy for the decision when economic growth is slowing down in a country with a per capita income that is barely a fifth of the US average--after adjusting for purchasing power parity.

Ecuador did try, of course, to sell the idea of the rest of the world paying the country to protect the area.

[In] 2007, Ecuador President Rafael Correa came up with a innovative proposal. He’d ask wealthy countries and donors to pay Ecuador $3.6 billion to leave that oil untouched.
It’d be an elegant way to help tackle climate change, he explained. The carbon would stay out of the atmosphere. Ecuador’s Yasuní National Park, one of the most biologically diverse spots on Earth, would remain unharmed. And Ecuador would be compensated for the billions in foregone oil revenue. (The three oil fields in Yasuní make up about one-fifth of Ecuador’s oil reserves.)
The problem? Those wealthy donors never materialized. Spain chipped in a couple million. So did the Andean Development Bank and the Inter-American Development Bank. The U.N. and other private individuals raised some funds. But in the end, Ecuador only raised $13 million, a far cry from the $3.6 billion Correa had sought.

If you were the president of Ecuador, wouldn't you also have taken this decision?

“Let no one be fooled, the fundamental reason this failed is because the world is hypocritical.”
“It was not charity that we sought from the international community, but co-responsibility in the face of climate change,” he said. His plan would have prevented the emission of about 400m metric tons of carbon dioxide, it was estimated. “The world has failed us.”

A big question then for the rest of the world is the same one from 2007:

“If we can’t justify saving a place that has more species per square kilometer than any other place on the planet,” Swing asked, “what are we going to decide to keep?”

We cannot expect the people of Ecuador alone to pay the price, can we?

Of course, later on we will target the oil companies for extracting oil for there and selling it, while conveniently forgetting that we really did not want to pay up!

Last year, in a paper in the Journal of Political Economy, Northwestern’s Bård Harstad argued that paying poorer countries to keep their fossil fuel resources unexploited could be one of the most cost-effective ways of tackling climate change. The big hitch, as always, is where the money will actually come from.

I will refrain from uttering the cliche about cake and eating!

Cheap, risk-free, natural, abundant energy source found!

Damn, I wish I had seen this cartoon when I posted the lengthy piece on electricity, coal, and poor countries! :)

Oh, but burning wood will contribute CO2!!!  muahahaha!
And, if you are like me, well, you know very well that gas prices are on the rise, again

The Saudi-backed violence in Bahrain

In the bad old days, before Twitter and YouTube and the internet itself, we were a lot insulated from the brutal details of dictatorships.  News reports left them to our imaginations.
But, now, we get a real feel for how dictatorship is enforced. (ht: Sullivan and Kristof)

Warning:
DO NOT click on play in the following videos, unless you know you can handle the reality of graphic violence. 
I could barely watch the first few seconds of the second video, which is a short one to begin with, before I stopped it and stepped away to clear my head and eyes.


I really mean that warning for the following one:


The US now reaches yet another critical test: should we oppose the Saudis and the Bahraini king, stay silent, or support the people who are protesting in order to gain freedom?

Or, let us suppose that the protesters in Bahrain as us the same question that President Bush asked the rest of the world: "are you with us, or against us?" ....

Meanwhile, in Libya, whose people we in the US and in Western Europe let down in an awful manner, well, Gaddafi is now feeling so strengthened that his son brags that it will all be over in 48 hours, and any no-fly zone will be too late:

"Military operations are over. Within 48 hours everything will be finished. Our forces are almost in Benghazi. Whatever the decision, it will be too late."

What a tragic mess that the US and the West made out of the rebellion against a mad dog dictator :(  It was one awful sin of omission.  As the Telegraph put it:

The imperious silence emanating from the White House as the turmoil in North Africa and the Middle East intensifies is exacting a high price. For the better part of a month, President Obama has shown himself to be a master of gnomic inaction.

How did this guy go from those big speeches in Germany and Cairo, to such a wimp?  "A man or a mouse?," as the old question goes!  The Telegraph adds:

If America is not prepared to support its friends, they will increasingly be forced to look after themselves. For example, Bahrain may not have felt compelled to seek military aid from Saudi Arabia if Washington had been more supportive of its clumsy attempts to introduce democracy. Certainly, the Saudi intervention in support of Bahrain's Sunni ruling family can hardly be said to be in the West's interests, as it runs the risk of further antagonising the kingdom's majority Shia population. If Iran, which regards itself as the Shias' main protector, were to respond on their behalf, the crisis could quickly escalate into open hostility between Iran and Saudi Arabia, thereby closing the Gulf and cutting off the West's vital oil supplies. At that point, the American president would have no alternative but to intervene

If we intervened only at that late a time, then we will end up delivering convincing proof to the entire world that the only American interest in that part of the world is in the millions of barrels of petroleum that lies beneath the sands.

The exaggeration of Fukushima: I hate fossil fuels more

Last spring/summer, I blogged, a lot, about the big news story at that time--the catastrophic oil spill in the Gulf of Mexico.  Even then, I noted in one post that our demand for energy means that, given the available technology, there will always be environmental impacts associated with how get that energy:

there are no technical answers to those challenges--as in technical answers for zero impacts.  Which is why then we resolve those trade-offs in the political domain. 

I am reminded of these trade-offs as I follow the Fukushima nuclear power story, about the potential for a partial or complete meltdown in one, two, or even three reactors there, out of the six.

Like everybody else, I am no fan of the radiation hazards and the waste issues that always worry us when it comes to generating electricity from nuclear reactions.  But then we so easily tend to ignore the hazards associated with coal, petroleum and natural gas, which, globally, are the dominant sources of power generation.

I don't suppose we have forgotten already the massive spills in the Gulf.  The explosion that killed the workers on that offshore platform.  Images of the ever spreading oil, and birds trapped to their death.  And, this was not even a natural disaster.

And that was merely one oil spill.  There are a lot worse ongoing horror stories in the oil-rich delta areas of Nigeria, in the ecologically sensitive areas of Ecuador, ... one could list them forever.

Coal is no easy matter either.  As I routinely remind students, every step along the process of electricity from coal has horrible impacts on humans, other life forms, and the physical environment.  Surely we haven't forgotten the other gripping story from last spring--the Massey Coal mine accident that killed 29 miners.  Again, this is merely one of many accidents worldwide.  Strip mining and mountaintop removal is are no advantages either.

Yet, for some reason, we time and again overlook all the complications related to fossil fuels, and focus exclusively on nuclear power.

I was afraid that I am in some echo chamber happily listening to my own voice on this matter and, therefore, started looking around.  Boy do I have some good company!

William Saletan expresses similar observations, and advises not to exaggerate the Fukushima crisis:

In advanced countries like Japan and the United States, nuclear plants are built to standards no drilling rig can touch. If a sensor, cable, or power source fails, another sensor, cable, or power source is available. Containers of steel or concrete envelop the reactors to prevent massive radiation leaks. Chernobyl didn't have such a container. Three Mile Island did. That's why Three Mile Island produced no uncontrolled leakage or injuries.

Saletan provides this comparative statistic:

If Japan, the United States, or Europe retreats from nuclear power in the face of the current panic, the most likely alternative energy source is fossil fuel. And by any measure, fossil fuel is more dangerous. The sole fatal nuclear power accident of the last 40 years, Chernobyl, directly killed 31 people. By comparison, Switzerland's Paul Scherrer Institute calculates that from 1969 to 2000, more than 20,000 people died in severe accidents in the oil supply chain. More than 15,000 people died in severe accidents in the coal supply chain—11,000 in China alone. The rate of direct fatalities per unit of energy production is 18 times worse for oil than it is for nuclear power.

Of course, it doesn't mean that we can overlook the nuclear crisis.  We need to, and will, learn from this and design additional safety features that nature will later challenge us.  But, we need to keep the destruction to life and property in perspective.  Not too far away from Fukushima was the refinery that was up in flames, and as of the latest reports those fires have not been completely extinguished.  But, above all, we need to place all this against the damage to life and property from the earthquake and tsunami, which were the causes for the nuclear crisis too.  Estimates are that the tally of the dead might exceed 10,000 and many times more rendered homeless.  Spiked tackles this line of thinking:

In contrast to the devastation across Japan, however, the accident has – at the time of writing – so far caused only 15 injuries, just one of which appears to be serious, and a handful of suspected cases of exposure to radiation, none of which appear to be serious. So why is there such a preoccupation with the nuclear power plant? 

Yeah, why such a preoccupation?  Spiked doesn't have a convincing answer, but concludes on a strong note:

it should be pointed out that earthquakes and tsunamis cause much greater problems for humans than nuclear power ever has. Furthermore, where nuclear power is a possibility ie, in wealthy economies, the effect of earthquakes and tsunamis is mitigated, and their consequences more easily ameliorated than in poorer regions. The 2004 Asian tsunami, and the earthquake in Haiti last year, were smaller in magnitude than last Friday’s events, but came at a much higher human cost than in Japan. Poverty, and the earth’s natural forces, are far more dangerous than our attempts to protect ourselves from them.

This affluence has saved lots of lives in Japan.  In contrast to the shakes in Haiti, Pakistan, China, the shaking itself did not kill comparable numbers in Japan because the wealth makes possible better and safer structures.  Even the NY Times has picked up on it:

Japan has gone much further than the United States in outfitting new buildings with advanced devices called base isolation pads and energy dissipation units to dampen the ground’s shaking during an earthquake.
The isolation devices are essentially giant rubber-and-steel pads that are installed at the very bottom of the excavation for a building, which then simply sits on top of the pads. The dissipation units are built into a building’s structural skeleton. They are hydraulic cylinders that elongate and contract as the building sways, sapping the motion of energy. ...
the United States standard is focused on preventing collapse, while in Japan — with many more earthquakes — the goal is to prevent any major damage to the buildings because of the swaying.
New apartment and office developments in Japan flaunt their seismic resistance as a marketing technique, a fact that has accelerated the use of the latest technologies

If you want to get an idea of how much such advanced engineering works, watch the skyscraper sway like a pendulum in the video below:



My point is this: it is easy to worry about the problems related to nuclear energy, and we have to be worried.  But, by focusing exclusively on this, we let the fossil fuel problems slide by as if they don't matter at all, and in reality they are worse.  But, more than anything else, all these mean that we are refusing to recognize the most basic issue: we--across the planet--have enormous demand for energy, and that demand is increasing rapidly.  What alternatives do we have right now for that huge demand for energy?

Rising gas prices: the feared second dip, or environmentalist cheers?

Gas prices locally are at $3.69 a gallon.  In less than two months, the price has gone up from under three dollars to where it is today.

The price of crude oil in the world markets continue to rise, fueled (editor: do you really need this bad pun?) by the unrest in the Middle East and North Africa.  So, what does this mean, again, for the economic recovery underway?

The Economist is being ultra-cautious in its tone, which surprises me a little bit, and also worries me that much more:

At its worst, the danger is circular, with dearer oil and political uncertainty feeding each other. Even if that is avoided, the short-term prospects for the world economy are shakier than many realise. But there could be a silver lining: the rest of the world could at long last deal with its vulnerability to oil and the Middle East. The to-do list is well-known, from investing in the infrastructure for electric vehicles to pricing carbon. The 1970s oil shocks transformed the world economy. Perhaps a 2011 oil shock will do the same—at less cost.

David Leonhardt is worried that the oil prices are one of the big reasons why we are "flirting with a repeat of an economic reversal"

An economy typically does not even begin to recover for several years. Our economy has made enough progress that recovery still looks like the most likely outcome this year. But until the recovery is all but undeniable, we should assume that it is in doubt.

Ok, these are typical of economists, one might say, to be dismal.  Environmentalists ought to cheer the rapidly rising gas prices, right?  So, why aren't they?

That's the question that AOL News' John Merline is asking. He takes a look at data from the past few years and the recent increase in gas prices and notes that most green policies have as their goal hiking prices to curtail consumption. And that's exactly what's happening. Bigger costs, economic slowdown, lower rates of travel, fewer imports, you name it. Everything is going the greens' way.

Nevertheless, as NPR noted in a story it did a few years ago, the best environmental groups seem to be able to muster is to "quietly welcome" high gas prices.
Of course, openly cheering higher prices wouldn't exactly win these groups a lot of friends. Just look at the guff Energy Secretary Steven Chu is taking today for his 2008 comment that "somehow we have to figure out how to boost the price of gasoline to the levels in Europe." Still, whatever happened to having the courage of your convictions?
So come on, greens. Let's hear it loud and proud for higher gas prices.

Whole thing here.

Cartoons of the day: oil, America and dictators

Yes, denial helps!
Anyway, oil ... comes from ...

And the US response?

Where are oil and gas prices now?

the price of light sweet crude rose more than 2 percent to $98.99 a barrel while Brent crude rose 2.5 percent to $111.94. Oil jumped above $100 a barrel in after-hours trading in New York. The national average price for a gallon of regular gasoline rose by nearly a penny on Tuesday to just over $3.37, which is 20 cents higher than a week ago.

I would rather pay more at the pump than to keep in power the maniacal authoritarian regimes.
Update:

On March 11, a "day of rage" is scheduled in Saudi Arabia. In all likelihood the Saudis will keep a tight lid on it. If they don't, the result could be the Mideast's most astonishing stride yet toward individual freedom and democracy. But a sudden, uncontrollable popular uprising in Saudi Arabia would likely be catastrophic, economically, for the rest of us. Perhaps it's just as well that we have little ability to influence the outcome one way or another.

If only I didn't know about the harm from oil and natural gas ...

The morbid curiosity that has been a consistent and strong feature of who I am--right from when I was a kid--means that often I think life will be wonderful if only I were not curious. I wish for that blissful ignorance sometimes.  Those occasions when I think that Socrates was being hyperbolic about a life not examined.  That charlatan ought to have tried before he figured out anything--if only humans had Philip K. Dick's "precogs" who would have zoomed into Socrates' "precrimes."

Can't undo any damn thing, and I am stuck.  So are you, if you are reading this--the joke is on you now, isn't it!  Ha!!!  At least there are a few fellow travelers in this misery from knowing something.  Or, maybe that is the problem--knowing something about a lot, as opposed to knowing something only about a little bit.   

So, why all this you ask?  Watch this:



As always, the question this time of the year, when an academic term comes to a close which is when I discuss the environmental impacts of everything that we discuss throughout the term, well, the question is how much should I take my own emotions and pessimism to the classroom?  It can be so easy to become unhinged and rant like a bloody lunatic--after all, these are awfully important issues.  But then so are the events in Libya. In Pakistan. The veterans with PTSD in town. .... the list is endless.

There is only one way out of this--watch it:


In The Know: Are Tests Biased Against Students Who Don't Give A Shit?

Yes, laughter is the best, maybe the only, way out!

Sudan election in a cartoon :(

I am hoping that at least a few students from a class last term are following the news about Sudan.  I had briefly talked with them about Sudan's long civil war, which had caused extensive destruction of life and property.

It seems to be a foregone conclusion that the South will secede, which by itself will be a good step--to get away from the repressive Khartoum regime.

But, what will happen the day after?

And what about the oil-rich Abyei region?

I often kid with students that most of the world's problems can be placed at the feet of Great Britain.  In the case of Sudan, too, Britain was a major player.  Oh well, old stories that will get us nowhere.  The challenges for now, as the NY Times has wonderfully described it with terrific maps, of which the following is one:

Bahrain: a "canary in the coal mine"

In my late teenage years and later on, it seemed like every other person had plans to get to the "Gulf": to the many countries around the Persian Gulf.  One cousin has now lived practically his entire adult life there, and we joke that he has become a sheikh himself! 

Bahrain was one of those attractors.  It was favored, in particular, over destinations like Saudi Arabia, because of its better climatic conditions thanks to it being a small island, and because of its relatively liberal and relaxed attitudes .  BTW, Bahrain is so liberal that a sex shop opened there, and owned by a woman, and generated a whole lot of controversy!

Thomas Friedman pointed out in articulating his "First Law of Petropolitics" why Bahrain might be on this path that is far away from the rigid social structure in neighboring Saudi Arabia to which it is linked by a fantastic engineering creation that extends over 16 miles--it was dealing with very limited petroleum reserves.  Friedman summarized it succinctly:

Bahrain is the first Arab gulf state to be running out of oil. It also happens to be the first Arab gulf state to hold a free and fair election where women could run and vote. And it also happens to be the first Arab gulf state to sign a free trade agreement with the United States. And it also happens to be the first Arab gulf state to be reforming its labor laws so its people can no longer be dependent on foreign workers.

So, what is the problem that merits the tag of "canary in the coal mine" you ask?  Seventy percent of the Bahraini population is Shia, like the majority in Iran, and very much unlike the overwhelmingly Sunni Saudi Arabia.

Which is why recent reports, like this one, merit our serious attention:

Bahrain's top Shiite politician said a crackdown on Shiite protesters by Sunni rulers has destroyed a decade of stable sectarian relations as the tiny Gulf state heads into parliamentary elections scheduled for October.

The wave of detentions — at least 160, according to one lawyer — has spilled over into near daily clashes between the majority Shiites and Sunni-led security forces and fueled concerns of deeper unrest and heavy-handed tactics in the home of the U.S. Navy's Fifth Fleet.

Any serious breakdown in Bahrain has possible wider repercussions. The country's two groups mirror the regional tug-of-war between Shiite giant Iran and the mostly Sunni Gulf nations that fear Tehran's efforts to expand its influence.

Given Bahrain's location--right in the Persian Gulf and near the 30-mile wide Strait of Hormuz, one can easily see why developments in this island country can reveal a lot about the geopolitical tensions there.

Why maps and geography matter?

Here is yet another reason.  From, ahem, another guy with an Indian connection :)
One of the many impressive skill-sets he has: "speaks German, Hindi, French, Spanish, and basic Arabic." 

BP spill at 60 days, and counting: Worst case scenario?

The BP rig exploded and sank on April 22nd.

My intro class students were just about wrapping up the assignment I had given them--on how the volcanic eruption in Iceland messed up Kenyan farmers who export flowers and, therefore, on the role of transportation in economic growth and development.

I thought that might just about be the only "current news" driven assignment for the term.  But then the BP disaster happened.  My gut instincts were that it was a catastrophe, which was the word I used to describe it when I pulled up photographs of the news story in the class (thanks to the wired "smart rooms" in which we now teach).  So, it was on to the next "current news" driven assignment.

Now, 60 days later, it does not seem like we are anywhere near the end of the story.  In fact, as Lisa Margonelli writes:

The question I'd like to ask Tony Hayward is this: To the best of your knowledge are we near the end of this spill? In the middle? Or perhaps, only at the very beginning?

Back on May 1st, I noted in the post that this was our own Chernobyl.  If I second-guessed myself that I was engaging in hyperbole, well, it sadly seems like I might have even underestimated it--it is even worse than Chernobyl because unlike the nuclear reactor accident, this one has a real probability that it could go on until there is no more oil to ooze out.  One can imagine the horrific economic and environmental consequences .... and we will still be underestimating ...

I was initially a tad suspicious of this Scienceblog post on the worst case scenario about the BP oozathon--that we will never be able to stop it.  But, even Margonelli refers to that, and adds this:

There are legitimate concerns about the integrity of the casing. Yesterday, someone asked Admiral Allen about that. He said that concerns about the integrity of the well bore were part of the decision to stop the "Top Kill" a few weeks ago, indicating that there are significant concerns. On April 23, the Coast Guard was aware that the size of the leak could grow from 8000 barrels a day to 64,000 to 110,000 barrels a day if the well completely blew out. That's quite close to the current spill estimates. Does that mean that the well is nearing a full blow out?   

The reason the casing's integrity matters is that if it's cracked, oil will push out through the cracks and into the surrounding ground, destabilizing the ground around the casing, and bubbling up from the ocean floor. Here's more, with Senator Bill Nelson's interview a week and a half ago saying just that. A seeping well, of course, will be hard to contain. 

Holy crap!
Oh yeah, happy Father's Day!

Are we f*ing idiots?

That is what Jon Stewart asks ... this is a must-watch segment, which tells a far better story (of course!) than the one I did earlier ... once again, will be super-hysterically funny if it weren't true.
Stewart also points out something that I tell students when we discuss environmental aspects--the political label of R or D can be misleading, and the best example is Nixon.  Yes, that unethical president who resigned in disgrace and didn't do jail time only because he was given a swift presidential pardon.  Nixon created the EPA that most of the current Republicans dis all the time.
Oh well, here is Stewart:

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
An Energy-Independent Future
www.thedailyshow.com
Daily Show Full Episodes Political Humor Tea Party

A Tale of Two Gulfs

Taking off on the classic Charles Dickens work, A Tale of Two Cities, perhaps the economic, environmental, and geopolitical aspects of petroleum can be woven together as A Tale of Two Gulfs.

Growing up in India, I, like many others, was familiar with “the Gulf” to which hundreds of thousands of Indians headed every year.  The geographic area referred to was the Persian Gulf, which had gained prominence thanks to the phenomenal growth in employment in the oil-rich Gulf countries—specifically, Saudi Arabia, Oman, Qatar, the UAE, Bahrain, and Kuwait. 

Here in the US, in the current contexts, “the Gulf” now refers to the Gulf of Mexico, where oil has been gushing out from a mile under the sea for two months now.  The live video feed from the site continues to mesmerize not only us here in America, but in the rest of the world as well.

But, more than thirty years ago, it was that other Gulf, and the oil there, that monopolized the attention of Americans.  In 1979, the Iranian revolution ousted the Shah, and installed a theocratic regime, and the geopolitical instability that resulted triggered a massive increase in the global price for oil.  The high oil prices that were recorded then went unmatched until very recently, immediately before the Great Recession. 

As the planet watched the unfolding events in Iran, and struggled to cope with the high price of oil, President Jimmy Carter addressed the country—and the world—in the “Crisis of Confidence” speech.  Carter noted early on in that speech on July 15, 1979, “I began to ask myself the same question that I now know has been troubling many of you. Why have we not been able to get together as a nation to resolve our serious energy problem?”

Thirty-one years have gone by since Carter’s frustration that we have not been able to figure a way out of the energy problem.  Six months later, after losing the election in November, Carter stated in his State of the Union address that the official position of the United States was that “an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”

Since then, we have been quite fixated on the Persian Gulf, with mostly disastrous economic and human costs.  While Carter couched this doctrine in the context of the Cold War with the Soviet Union, the altered landscape since the fall of the Communist bloc has apparently not dented our perspectives on the Persian Gulf and petroleum. 

Even more, despite the political fixation, I suppose most Americans are unfamiliar with the geography and geopolitics.  Every once in a while I quiz students on the Persian Gulf and Middle Eastern countries, and rare is a student who correctly identifies at least a half of them.   

As problems began in the “other” Gulf—the Gulf of Mexico—I asked students in my introductory class to quiz at least six on campus about the catastrophe.  One of the questions was to list all the states in the union that border the Gulf of Mexico.  The results of this exercise, also, were far from encouraging. 

Our collective apathy about the Persian Gulf and the Gulf of Mexico, and the valued resource that is in common—petroleum—is depressing.  Particularly when we project it against the background of Carter’s speech from 1979, in which he observed that “the energy crisis is real. It is worldwide. It is a clear and present danger to our nation. These are facts and we simply must face them.”

We threw out any sense of urgency once the Persian Gulf crisis eased.  The Gulf of Mexico gusher, which ought to have been avoided in the first place, will be capped, hopefully sooner than later.  But, even after the images of oil-stained pelicans disappear from the daily news, I hope we will stay focused enough to write the rest of A Tale of Two Gulfs, and get to my favorite phrase: The End!

Cartoons of the day: the BP Oozathaon