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Thursday Open Thread...
Posted by Prof. Goose on December 8, 2005 - 11:42am
Topic: Miscellaneous
Keep on threadin' in the free world...
Natural gas soars; layoffs, prices rise
And you think your gas bill is bad...
The oldest and latest data for which engineering bachelor's degrees and graduate law degrees (LL.B and J.D.) overlap in the tables that I could see come from 1985-86 and 2000-01, respectively.
In 1985-86, we apparently graduated 35,844 lawyers and 77,391 engineers. In 2000-01 we graduated 37,904 lawyers and 58,315 engineers. Unless I'm a math doof--which is entirely possible--this represents a 5.75% increase in lawyers and a 24.65% reduction in engineers. The ratio between the two fell from 2.16:1 in favor of engineers to 1.54:1, still in favor of engineers. In other words, although the gap between them is shrinking, we still have more engineers than lawyers (although in my opinion we still have way too many lawyers).
However, I would like to caution you to look at the data yourself. That 1985-86 year seems to be an anomalous spike in the number of engineers. The stats seem to put the mode around 62k, making the 2000-01 decline only about 6%. Also, in the first year the table I used covers (1970-71), we graduated only about 45k engineers, making the 2000-01 year about a 22% improvement!
But I think we are looking at different data for the engineers. I think the right table is:
http://nces.ed.gov/programs/digest/d04/tables/dt04_282.asp
The engineers data is pretty much speaking for itself. With economy growth, the number of graduated engineers steadily grew to 97,099 until 1985-86, which by some coincidence is exactly 5 years after RR entered the White House.
Later we obviously decided that our economy does not need them because the number steadily drops to 77,267 in 2003, while in the same time the population and economy were supposedly growing.
The lawyers numbers stalled around 40K during the previous 15 years, which I interpret as the labor market was already too saturated with them.
But think of it this way. If in your company you have 30 people to project, build and maintain the buildings and the equipment, to design and monitor the production process, to solve production problems and to engineer new products and processes; and 20 people to prepare your documentation and to represent you in court (whom you pay twice as much as the other 30 people), I'd definately say that your company will not survive long.
Plus, I suspect the next big thing will be genetic engineering, and we're at a huge disadvantage there. We try to teach biology without talking about evolution, which is kind of like trying to teach physics without mentioning Newton's laws of motion. And work with stem cells, cloning, etc., is blocked by the abortion issue. The new Lysenkoism...
Sorry for my off-topic and lack of info about some ills of the day, but is this really being done now in schools?
I teach evolution vs creationism as a writing project in my university freshman comp. class.
When I inquire into my students' backgrounds, it turns out several have had no instruction in either Darwin or the Bible.
However, we both agree that no matter how you shake the numbers we have too many lawyers. I tend to think we just have too much law. Our perpetual lawmakers just churn out too much paper. Some of the Founders were fearful of havign a standing army. Maybe they should have equally feared a standing legislature?
I suspect engineering was never the quite same after that.
A) Party, get drunk, and take basket weaving courses, or
B) Work your ass off day and night studying physics, chemistry, thermodynamics; miss all the parties and then when you graduate, you still won't get a job.
If you pick option A, you might become President of the USA or something like that. If you pick B, you probably will not be President of anything. Presidents need to know how to lie, smile, play golf, and manipulate other people into doing insane, unscientific things like believing "victory" is around the corner if only we pray harder and keep wishing upon that star, no matter who we are.
Doh !!!
I had a look at ASPO production figures and have come to a very similar position to Westexas. Making a couple of assumptions, internal consumption doesn't increase (unlikely) and ASPO production figures for 2020 are broadly correct, I came out with about 32 Mbpd of exports from 2000 reduced to about 20 Mbpd of exports in 2020. If there will be only 20 Mbpd of oil available for exports in 2020, USA will take, say, 13 Mbpd, China takes, say, 6Mbpd, who has the remaining 1 Mbpd of available crude? Germany, Japan and South Korea who use lots of oil (>2 Mbpd) but produce virtually no oil themselves will be in trouble. Any ideas or comments anyone?
Actually, oil is fungible (meaning, all oil is substantially the same and interchangeable). If we get into shortages, oil prices will rise substantially. Diverting any oil to internal use will therefore be far more costly than it is today.
In a free market, oil will go to where the money is calling for it. Whether that is for export or for internal use will depend on how much money and demand there is in the two segments. Even countries which are not free face the same constraint. Using the oil internally means giving up a fortune in foreign exchange. Most of these non-free countries are by definition not that responsive to the needs of their consumers. Those governments will export oil to gain funds to support the expensive lifestyles of their officials rather than make sure every farm family has plenty of energy.
So I don't think you can assume that oil producing countries will supply their domestic markets in preference to their export markets. Free or controlled, I suspect that the oil will go to where the money is, just as it does today.
Once a shortage of oil becomes apparent the writing will be on the wall for prices - why sell a barrel this year for $200 when you can sell it for $400 or more in a year or so's time. There will be enough money swilling around to keep the ruling cadres happy.
If the exporting country doesn't supply its domestic market sufficiently there will be a strong incentive for revolution.
Export sales are most likely to go to the country or countries who will defend the exporting country against others who might use force to get their oil.
...there could be some interesting and delicate equations being calculated between these and similar variables ;)
A shortage becoming apparent will only drive the price up, it will not make the future price more certain, as you are seeming to imply, i.e., it won't be clear that holding on to oil will be a good strategy, as the current price will incorporate the possibility of future price increases.
An increased price reduces the amount one needs to sell and wise regimes will gamble on further price increases if they see shortages increasing and they can encourage that by reducing exports.
I think we may have already seen explicit signs of this in Russia's behavior in the last year or so.
They could take an attitude of "if I can't sell it to you, then you can't take it either" and let us freeze in the dark while the oil glows in the dark for the next several hundred years.
In fact, it doesn't even require nukes to do this. It can be done with dirty bombs, just like Saudi Arabia already has done.
Invade Saudi Arabia? Sure, but say bye-bye to all the oil, which raises the question of why bother? Iran can do the exact same thing now without nukes since they have their own reactor.
what are you talking about? If you hang all the troublemakers, there is zero, I repeat, ZERO incentive for revolution. Were you talking about Norway or Iran? Because it kind of makes a difference. Stalin and Saddam supplied their people with NOTHING, and whoever lived liked it.
Ever heard of Nigeria? Know who Ken Saro-Wiwa was? Stick with peak oil. Predicting geo-politics is not advised. Let's concentrate on the winners we've got in Washington.
You want a revolution. How about here?
When I think about this issue, I think of countries like Mexico and Indonesia and Venezuela, with democracy but less stability than the rich West. As you suggest, revolution can come by democracy. It's very easy to imagine any of the three countries I mentioned having a democratic (we hope) revolution that led to leadership (new or old) more willing to satisfy internal demand for oil than to get top dollar abroad. For that matter Venezuela may already have had that revolution.
Remember it's only a relative loss of money for a government to sell its oil to its own citizens at below-world-market rates. It's only if the country is a net importer (as I believe Indonesia is becoming) that there's a direct cost rather than just a lost opportunity for revenue.
The other possibility, of course, is a breakdown in fungibility as a result of preferential contracts among countries. It's harder for me to imagine how that might play out, and it seems less likely, for the same reason that OPEC was constantly having trouble with cheating during the excess capacity regime. But it could be even uglier than the issue of purely internal subsidies, even if those contracts broke down quickly.
http://www.theoildrum.com/story/2005/12/3/104057/755#129
You are partly correct in saying that a repressive regime can be successful in suppressing revolution and dissent, sometimes for long periods of time, but this is often not the wisest course for those in power and definitely not always successful. Plenty of fairly surprising changes have happened in eastern Europe over the last couple of decades.
Things will become more generally chaotic over the next 5 to 10 years - I counsel you to expect the unexpected. Don't be too sanguine about the USA, either, there is a small but not insignificant probability that the current make up of the USA and its process of government could change quite radically as the effects of peak oil and other upheavals take shape.
You would be unwise (and incorrect) to assume that things will continue 'much as they are', the world will change more in the next 10 years than it has in the past 50.
What is the connection between an oil shortage and water? I'm not sure I understand your statement. Will water become increasingly valuable too as oil increases in price? Why would a country that sells oil today at $60/bb refuse, at $200/bbl, to cash in on it? Price increases, I would think, would mean that oil producers would care more, rather than less, about foreign exchange.
I disagree with your point about the fungibility of oil, it assumes that money is the overriding commodity and that internal markets will be deprived due to the cost implications of supplying local markets when external markets will pay more... On the contrary energy is the true base currency and as we procede into post peak it will become increasingly clear that the oil itself is more valuable than money thus internal energy needs will be met first... It will come down to question of heating your own homes, feeding your people or generating foriegn currency that will buy you what that the energy cannot be used to produce internally...?
Exactly. And the money is there where the oil is produced. Rising oil prices will mean more income for the oil producing countries. Some of it will raise the living standards there. And rising living standards mean more energy consumption. We have reason to believe that domestic oil consumption in the oil exporting countries will increase, even more than before.
Oil producing countries are diversifying their economies, trying to increase the value added of their exports. So less crude and more distillates, petrochemical products, plastics etc. More energy-intensive industries using natural gas. More tourism, more energy consumed in service industries. OPEC countries know that the time of the oil is limited and so they try to squeeze more from their energy resources.
We can see a pattern in energy consumption: more past consumption and present consumption bring more future consumption (high material living standards mean more energy consumption). High past consumption (more developed infrastructure) means better energy efficiency. This makes energy use more competitive there where the use is already high. This has worked for the developed countries, but will now mean that the energy producing countries will consume more themselves.
Background:
http://tceconomist.blogspot.com/2005/12/oil-industry-growth-challenge.html
Opening salvo:
Esser: "As a nation, we have previously gone through periods of deep concern about the adequacy of energy supplies."
translation: Ha Ha. Chicken Little was always wrong before and sound logic therefore assures us the Peakists are flat out wrong this time also
Esser: "Rather than an imminent "peak," we envision an "undulating plateau" two to four decades away.
translation: Ha Ha. Even if there ever will be a problem, which trust us there won't be, it is far far away in a distant galaxy and it's nothing more than a few minor bumps in the road
Bartlett addressed this by commenting that while people may have cried wolf in the past, in the parable, the wolf eventually did show up.
There is an interesting psychological phenomenon here. If people make warnings and it is a perfect world where there is someone to listen and take the appropriate counter measures, probably the warnings will not come true. Then the crowd will ask: what was that fuss all 'bout? On the other hand if nobody listens, when the fire starts everyone will be too busy to put it up and