Drumbeat: August 16, 2010
Posted by Leanan on August 16, 2010 - 10:27am
Growth economists recognize that we can’t have more of everything instantaneously. To get more of everything we must invest and wait. The opportunity cost of investment is forgone present consumption. But it is a temporary cost. Later we will have more of everything, and after that still more of everything, etc. Is there no end to this? Not for the standard macroeconomists. In their view it might be possible to grow too fast, but never to get too big. That is, the opportunity cost of investment needed for rapid growth might be too high in terms of forgone present consumption. But that misallocation is temporary and will soon be washed away by growth itself that will give us more of everything in the future – more consumption and more investment. That is the growth economist’s theory.
However, increasing takeover of the ecosystem is the necessary consequence of the physical growth of the macroeconomy. This displacement is really a transformation of ecosystem into economy in physical terms. Trees are physically transformed into tables and chairs; soil, rain, and sunlight are physically transformed into crops and food and then into people; petroleum is physically transformed into motive force, plastics, and carbon dioxide. Thanks to the law of conservation of matter-energy, the more matter-energy appropriated by the economy, the less remains to build the structures and power the services of the ecosystem that sustains the economy. Thanks to the entropy law, the more dissipative structures (human bodies and artifacts) in the economy, the greater the rates of depletion and pollution of the remaining ecosystem required to maintain the growing populations of these structures against the eroding force of entropy. These are basic facts about how the world works. They could plausibly be ignored by economists only as long as the macroeconomy was tiny relative to the ecosystem, and the encroachment of the former into the latter did not constitute a noticeable opportunity cost. But now we live in a full world, no longer in an empty world – that is, in a finite ecosystem filled up largely by the economy. Remaining ecosystem services and natural capital are now scarce and their further reduction constitutes a significant opportunity cost of growth.
President Mahmoud Ahmadinejad announced the enactment of a law that obliges Iran to produce nuclear fuel for its Tehran medical-research reactor, on the day the country said it will build a new uranium-enrichment plant.
The search for oil and gas is getting riskier as better and cheaper technology lures more companies to new frontiers.
While BP’s Gulf of Mexico oil spill shows even the biggest international oil firms can make huge mistakes, smaller and less experienced companies are also encountering serious problems while drilling under challenging conditions.
One important initiative that may fall victim to the flooding is the Iran-Pakistan gas pipeline project. Islamabad had recently announced that it would generate domestic funding for the project in light of intensified US and UN sanctions against Iran’s energy sector that are bound to discourage international investors. In the wake of the ‘super flood,’ economic collapse in Pakistan seems imminent, and Islamabad is scrambling to cut or divert spending to facilitate flood relief. It is unlikely that a multi-billion dollar energy project can proceed in this climate.
The FECRA gas stations lobby on Saturday warned that petrol stations will not roll back price hikes and that for all the government’s threats to apply the Anti-hoarding Law to cope with the consequences of an energy crisis, it will be unable to sanction them because the fuel sector is not regulated.
“We will not roll back price increases,” FECRA President Rosario Sica told the Herald. “Rolling them back would mean more service stations closing down. Over the past seven or eight years Argentina has lost half its 6,000 stations and 50,000 employees have lost their jobs.
ALMATY (Reuters) - Cost control should take priority when developing the second phase of the Kashagan oilfield in Kazakhstan, the world's biggest oil find in over 40 years, news agencies quoted Oil and Gas Minister Sauat Mynbayev as saying.
"It's linked more than anything to costs. We don't need to incur insane costs on the second phase," Novosti-Kazakhstan quoted Mynbayev as saying after a government meeting on Monday.
(Bloomberg) -- Claims from all 50 U.S. states confront Kenneth Feinberg as he prepares to tap BP Plc’s $20 billion escrow account for victims of the company’s Gulf of Mexico oil spill.
“The farther away you are from the Gulf and the Gulf shore the less likely it is that you will have a valid claim,” Feinberg, administrator of the fund, said Aug. 13 in a telephone interview. “But I will take a look at each claim.”
(Bloomberg) -- BP Plc is pledging oil sales from Angola and Azerbaijan to raise $5 billion of loans as it builds a cleanup fund for the worst U.S. environmental disaster.
The company is borrowing $3 billion backed by income from Angolan operations, lenders said, and $2 billion linked to revenue from the Azeri-Chirag-Deepwater Gunashli field off the coast of Azerbaijan.
(Reuters) - Oil and natural gas producers have not cut back production in the northern Gulf of Mexico because of a brewing tropical storm threat, the companies said on Monday morning.
Leading U.S. Gull oil producer BP Plc said offshore operations managers were watching the remnants of Tropical Depression 5, which re-entered the Gulf overnight.
The residents of the picturesque North Yorkshire village of Thornton-le-Dale have sour-gas indigestion.
Moorland Energy, a two-year-old UK gas developer, wants to build a gas plant that locals say will ruin the view.
(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said its plan to sell as much as $25 billion of new shares next month will replenish capital after debt rose to the upper limits of its target last quarter.
Mumbai: India may soon face a shortage of coal as more power plants are built and domestic production lags. Coal imports could go up sharply over the next few years inspite of large domestic reserves.
Companies building power projects are also acquiring coal mines around the world. In its DRHP filed with Sebi last week, Coal India says that there will be a shorfall of coal if all the ongoing projects where it has signed letters of agreement are completed.
Yet, current efforts won’t meet the country’s growing appetite for energy. The government estimates, for instance, that coal production will lag behind demand by about 100 million tonnes as of 2012, and India’s electricity-generating shortfall at present — more than 10 gw — is likely to worsen even if all power plants now under active consideration are built. The only choice is to pursue a number of sources of additional fuel, to further liberalise domestic energy markets and to upgrade the overburdened infrastructure. India must also attract much more private capital since government spending alone won’t be able to finance the billions needed for energy projects in the next five years.
Joshua Hart does not want a SmartMeter.
But unless state officials and Pacific Gas and Electric Co. relent, he's going to get one anyway.
(CBS) Imagine a future in which abundant energy could be ours, simply by harnessing the wind, or capturing sunlight, or tapping into the heat of the Earth itself.
The Witch of Hebron is the sequel to World Made By Hand, a story of the post-oil American future. It is set in and around the town of Union Grove, Washington County, New York. The time is several months after the action in the first book, the week before Halloween.
This excerpt concerns Stephen Bullock, the wealthy landowner whose plantation is home to dozens of people whose lives and livelihoods had gone adrift in the collapse of the American economy.
BOSTON--(BUSINESS WIRE)--“The Singularity is Near, A True Story About the Future,” by filmmakers Anthony Waller, Ray Kurzweil, Ehren Koepf and Toshi Hoo, with Executive Producer Martine Rothblatt (Terasem Motion InfoCulture), makes its international premiere on Tuesday, August 31, 2010 at the 34th annual Montreal World Film Festival. A Q&A session with Ray Kurzweil and Martine Rothblatt will immediately follow the screening. The film is among 61 films competing in the Documentaries of the World category at the 12 day festival.
Bill McKibben’s groundbreaking debut book, “The End of Nature,’’ appeared in 1989, while he was still in his 20s. Widely considered one of the nation’s top environmental journalists, he maintains a supersonic rate of activity. Besides his many books, he writes frequently for publications from Outside to the New York Review of Books and serves as scholar in residence at Middlebury College. In 2009, he founded 350.org, an international campaign to combat the climate crisis.
THERE'S a lot of talk about ''tipping points'' in the climate science literature these days. It's an innocuous enough little phrase, implying just a nudge over the edge of something. But in climate terms, that step beyond the ''critical threshold'' is a doozy.
When the Petermann Glacier calved an ice island four times the size of Manhattan earlier this month, GPS sensors embedded in the ice and time-lapse cameras sitting on nearby rock were watching.
But scientists who put them there were caught off guard. Traveling to northwestern Greenland to retrieve the data that equipment recorded will cost them roughly $93,000, money they currently don't have.
That's unfortunate, says Jason Box, a climate scientist at Ohio State University who helped place those instruments, because the difficulty comes as his research team has made a startling discovery. Of the 30 widest glaciers in Greenland, it's the ones in the north -- where Petermann is located -- that are collectively losing the most ice.
Peak Oil is the time when petroleum-extraction activity in the world reaches an optimal level. Thereafter, the rate of oil production enters a terminal decline. Peak in oil production does not indicate ‘running out of oil resources’, but means ‘no more availability of oil at economical prices’. However, the most debated question is: Does world hold adequate oil resources to meet its needs forever?
Sooner or later, the consumption of oil is going to exceed its supply. As of now, no qualitative substitute for crude oil exists in the world. Therefore, another concern is: When would oil resources go dry in the world ? In this article, we shall touch upon some of the main arguments on which such a theory is based, highlighting the impact of high oil prices on the global economy.
Oil prices hovered below $76 a barrel Monday as expectations for fuel demand in the second half of the year were undermined by weaker economic figures from the world's three biggest economies — the U.S, China and Japan.
Global crude oil demand may have exceeded supply in the past two months as inventories stored on tankers fell to an 18-month low, Goldman Sachs Group Inc. said.
“Now that floating storage has dropped to its lowest levels in over 18 months, we expect to experience declining onshore inventories in coming months,” Goldman Sachs analysts including David Greely and Stefan Wieler said in a report today. “Given that world demand tends to increase seasonally in the second half, we would expect the draw on world inventories to accelerate.”
Hedge funds slashed their bets on rising natural gas to the lowest level this year as prices fell, a sign the fuel may repeat last year’s 19 percent August slide during a so-far quiet hurricane season in the Gulf of Mexico.
Hedge funds and other large speculators cut their bullish bets by 23 percent in the week ended Aug. 10, the Commodity Futures Trading Commission reported. Natural Gas has declined 13 percent this month, dropping to $4.303 per million British thermal units at 8:04 a.m. on the New York Mercantile Exchange.
An increase in Iran's stocks of crude oil is a result of maintenance work at refineries at home and abroad rather than of international sanctions, a senior official was quoted as saying today.
LAGOS, Nigeria -- Royal Dutch Shell PLC warned Sunday that thieves in Nigeria's oil-rich and restive southern delta are increasingly targeting the company's crude pipelines, including at least three incidents of sabotage this month alone.
In a statement, Shell's Nigerian subsidiary said damaged pipelines near Bonny in Rivers state bore signs of drilled holes and hacksaw cuts. The subsidiary said the damage suggested that thieves - known locally as "bunkerers" - had likely tapped into the lines to siphon off crude oil to sell on the black market.
Asaba — The Delta State government has accused the Nigerian affiliate of the United States oil giant, Chevron Nigerian Limited, of insincerity in the recent oil spill in Warri, Delta State.
The state government also said it has invited the United Nations to carry out the detailed post impact assessment of the oil spill to know the extent of damage to the environment in the state.
Russia may boost its duty on crude exports by 3.7 percent for regular fields and by 8.3 percent for deposits with a discounted rate next month after prices for its Urals blend rose.
The standard tax rate may increase to $273.50 a metric ton ($37.31 a barrel) from $263.80 in August, according to Bloomberg calculations based on Finance Ministry data. The discounted rate for select eastern Siberia fields may rise to $87 a ton from $80.30.
Repsol teams up with RAK for Oman patch
United Arab Emirates-based RAK Petroleum is set to farm-out a 50% stake in Block 47 onshore Oman to Spanish oil company Repsol.
Cnooc Ltd., China’s biggest offshore oil producer, may post first-half profit growth more than double that of PetroChina Co. and Royal Dutch Shell Plc after selling more crude to meet diesel demand from factories and farmers.
Along with China's rapid development, Westerners have raised the specter of the "China threat." Other assertions such as the potential threat of China's population, of China's grain production as well as China's military strength came in one after another, and now they came up with China's threat to energy.
China, the world’s largest energy user, approved 24 power projects last month to help meet rising energy demand in the country’s less developed northern and western provinces.
(Reuters) - China has pumped $8.17 billion into military-run Myanmar in the current fiscal year, accounting for two thirds its total investment over the past two decades, official data showed on Monday.
Energy projects formed the bulk of the investment, with $5 billion in hydropower and $2.15 billion in the oil and gas sector of the reclusive, resource-rich nation whose neighours include economic juggernauts China and India, the data showed.
Oil exports from Iraq's southern Basra terminal fell by more than today to 720,000 barrels per day from 1.728 million bpd the previous day due to maintenance on the offshore pipeline, according to reports.
Baghdad - Authorities in the southern Iraqi governorate of Dhi Qar announced Monday that all public protests against the massive shortages of electricity in Iraq are outlawed, in the latest move to prevent such demonstrations.
Iraq flows halved The capital of the governorate, Nasariya, some 370 kilometres south of Baghadad, saw police go around in the early morning and use loudspeakers to inform the population that they could not attend a planned protest.
(Reuters) - Indonesia will spend 41 trillion rupiah on electricity subsidies next year, compared with 55.1 trillion rupiah in 2010.
Vilnius - The chances of the Baltic states' biggest industrial concern, Lithuania's Mazeikiai oil refinery, being sold increased Monday after Polish energy company PKN Orlen confirmed it had hired international investment bank Nomura to advise on a possible sale.
TWO of Australia's biggest corporate bribery scandals have overlapped with the revelation that a Reserve Bank of Australia currency firm engaged an Indian middleman implicated in the Iraq oil-for-food affair.
The agent engaged by the Reserve's banknote firm Securency - which is the subject of Australia's biggest foreign bribery investigation - is related to a senior Indian politician, Natwar Singh, and has been raided by Indian police in connection with suspect arms deals.
(Reuters) - Lingering concern among voters about BP's massive oil spill in the Gulf of Mexico means that efforts to tighten regulations on offshore drilling will continue in the U.S. Congress even with the well plugged and the oil dissipated.
But getting major legislation passed will be an uphill struggle. With Republicans eyeing gains in the November 2 congressional elections, Democrats will face fierce campaign-year opposition on all major initiatives.
NEW ORLEANS — The man with pinpoint accuracy who is drilling the relief well meant to permanently plug BP’s runaway oil well is looking forward to finishing his mission and celebrating with a cigar, a dinner party with his crew, and a trip somewhere quiet to unwind with his wife.
John Wright has never missed his target over the years, successfully drilling 40 relief wells that were used to plug leaks around the world. People along the Gulf Coast aren’t the only ones hoping he can make it 41-for-41.
(CBS/AP) Shrimpers trawling Louisiana waters Monday in the first commercial season since the Gulf disaster don't know what dangers from the massive BP oil spill still lurk and what market there will be for their catch if consumers don't believe the seafood is safe.
Perhaps the biggest fear is that some fisherman might try to sell oil-contaminated shrimp.
The massive BP oil spill in the Gulf of Mexico could kill off some of Alberta's migratory birds, an Alberta bird expert fears.
By the time the oil giant managed to put a temporary cap on the damaged well in mid-July, the U.S. government estimated that 4.9 million barrels of oil had spilled since the Deepwater Horizon rig explosion that began the disaster in April.
For years, New York officials have envisioned powering the region from a set of huge wind turbines in the Atlantic Ocean off Long Island. But well before an offshore wind farm would be up and running, giant turbines may soon be spinning much closer to the city.
Within three years, the Port Authority of New York and New Jersey hopes to have five wind towers, each more than 280 feet tall, operating on the west side of New York Harbor. Nearby, the City of Bayonne, N.J., plans to install an equally large turbine to power a sewage-pumping station. Meanwhile, the Department of Veterans Affairs is considering placing wind turbines on or near its hospitals in Manhattan and Brooklyn.
Due to transport costs, the biggest, heaviest components were the first to be made domestically. Twenty U.S. facilities presently manufacture utility-scale turbine towers. Fourteen have come online since 2005 and eight more have recently been announced. Thirteen U.S. facilities presently make turbine blades, nine of which came online since 2005. Three are announced.
E.ON AG, RWE AG, Vattenfall AB and EnBW Energie Baden-Wuerttemberg AG told German officials they may shut down nuclear reactors early if the government proceeds with plans for a tax on fuel elements and stricter rules, Spiegel reported.
For eco-conscious homeowners who have considered a solar system for their rooftops but have found the cost and complexity daunting, Clarian Power thinks it has an idea.
The Seattle-based clean tech startup is developing a “plug and play” solar appliance called the Sunfish that will generate clean solar electricity for the home. “You bring it home and plug it in, just like a refrigerator, and it will cost about the same,” said the company’s president, Chad Maglaque.
Persistent opposition by environmental and indigenous groups, even with help from high-profile figures like the Canadian-American movie director James Cameron, failed to stop the $11 billion project, which will produce electricity for big cities like São Paulo while flooding about 200 square miles of the Xingu River basin.
Indigenous communities say the dam will devastate their lands and force about 12,000 from their homes. They say it will reduce the river level, destroying their traditional fishing industry.
The city of Altamira, above the dam, faces the opposite problem, with about a third of it to end up under water. Thousands of residents will be relocated.
Dongfeng Motor Group Co. will invest 3 billion yuan over five years to develop alternative-energy and energy-efficient vehicles, the China Daily reported, citing the company.
For fly fishers who pride themselves on a conservationist ethic, it hurts to discover that they may be trampling on that ethic every time they wade into a trout stream.
Blame their boots — or, more precisely, their felt soles. Growing scientific evidence suggests that felt, which helps anglers stay upright on slick rocks, is also a vehicle for noxious microorganisms that hitchhike to new places and disrupt freshwater ecosystems.
That is why Alaska and Vermont recently approved bans on felt-soled boots and Maryland plans to do so soon.
In Saint-Tropez, environmental measures may upend the business of spoiling the pampered.
Our resource base is formidable and expanding. But that bounty is fast becoming our Achilles’ heel. Our exports and domestic energy systems are carbon extensive, our per capita carbon emissions are amongst the highest in the world.
Our most vulnerable point is oil; we are about 50 per cent self-sufficient, declining rapidly unless new discoveries save the day, which seems unlikely. But peak oil, which may well mean a 20-30 per cent reduction in oil availability by 2030, is not even on the agenda of the major political parties.
In apartments with utilities included, many New Yorkers have no qualms about running their cooling units when they are at work or even on vacation.
“The single easiest thing that anybody can do that can have the most profound influence on their life, their health, their wealth is to grow food at home,” said Jerry.
“Every plate of food you’ve bought from the supermarket will have travelled 22,000km to get from the farm to your plate. So immediately if you start to grow food at home, even if its potatoes, you are starting to cut food miles, fossil fuel emissions.”
Mr. Braver, a psychology professor at Washington University in St. Louis, was one of five neuroscientists on an unusual journey. They spent a week in late May in this remote area of southern Utah, rafting the San Juan River, camping on the soft banks and hiking the tributary canyons.
It was a primitive trip with a sophisticated goal: to understand how heavy use of digital devices and other technology changes how we think and behave, and how a retreat into nature might reverse those effects.
Laws aimed at combating climate change won’t reduce the burning of coal to fuel electricity generation, Michael Dixon, manager of business development at AME Mineral Economics, said at a conference in Brisbane today.
China and India will drive thermal coal demand with rising mining costs supporting prices in the medium to long term, Dixon said.
Today's high energy prices raise the price of everything else shipped into the villages. With the high costs and lack of jobs, we are seeing a migration of people leaving rural villages for regional centers. Even older people are leaving. They have fixed incomes, so living in their traditional villages becomes too costly. This diaspora causes cultural disruption. Those younger people left behind in the villages have fewer culturally competent elders to guide them.
This global warming is alarming and causes great hardships for traditional people who love their ancestral homeland. The hardship being experienced can be lessened with the use of clean alternative fuels.
Abuja — The Minister of Environment, Mr. John Odey, has said that the Federal Government is fast-tracking the implementation of sound policies to promote the development of green energy projects.
This is in a bid to arrest the dangers and threat posed by climate change to the country. Odey, who spoke on the renewed drive by government during a meeting with a delegation of the Green Energy Society of Nigerian (GESON) over the weekend, said as part of efforts to give vent to its renewable energy policy, the ministry had approved the execution of the Global Bio-Fuel Project as a candidate for the UNFCCC Clean Development Mechanism (CDM).
Climate change sceptics in New Zealand are taking the government's climate agency to court over the validity of its evidence on global warming.
The New Zealand Climate Science Coalition has accused the National Institute of Water and Atmospheric Research of tampering with official weather records to make the case for global warming.
MOSCOW (Itar-Tass) - Abnormally hot and dry weather in central Russia is the result of heat waves caused by the global warming, the president’s advisor, Alexander Bedritsky, who currently heads the World Meteorological Organization, told a news conference on Monday.
He stressed that many reports and research works mention about “heat waves that are one of the signs of the global warming and now our summer clearly proves this.”
The benchmarks set by the Policy Statement are an increase above 1990 mean sea levels of 40 centimetres by 2050 and 90 centimetres by 2100. These benchmarks are intended to support an adaptive risk-based approach by the proponent to future development and upgrading of existing development in vulnerable coastal areas, and to give the decision-maker dealing with development applications a framework on which to base its decisions.