Archive for the ‘Energy’ Category

Oil giant knew and hid global warming facts

September 19, 2015

Exxon Corp. commissioned scientists to research climate change from 1977 to 1982.   They concluded that fossil fuels were causing a buildup of greenhouse gases in the atmosphere that would change the climate, an investigation of Inside Climate News has shown.

Top management hid and ignored the findings.  There is a fine line between being willfully ignorant and lying.  I think Exxon management crossed that line, and the world will suffer as a result.


Top Exxon scientists began warning top management about fossil fuels and climate change in 1977 by Jen Hayden for Daily Kos.  (Hat tip to my expatriate e-mail pen pal Jack)

Exxon’s Own Research Confirmed Fossil Fuels’ Role in Global Warming Decades Ago by Neela Banerjee, Lisa Song and David Hasemyer for Inside Climate News.

Exxon Believed Deep Dive Into Climate Research Would Protect Its Business by Neela Banerjee, Lisa Song and David Hasemyer for Inside Climate News.

Why the United States needs Saudi Arabia

September 8, 2015


This chart, which I found on Ukraine’s Euromaiden Press web site, indicates how much Russia is suffering from the world decline in oil prices.

But why are oil prices falling?  It is because Saudi Arabia, the world’s largest oil exporter, is committed to pumping oil in large volume instead of shutting back in order to prop up the price.

What gives the Saudis so much leverage is that their production costs are low, and they can make a profit at a lower price than can Russians, Venezuelans or others.

That’s why the U.S. supports Saudi Arabia’s foreign policy, and why President Obama recently reassured King Salman that the U.S. will continue its cold war against Iran despite the agreement with Iran over sanctions and nuclear facilities inspections.

My question is whether it is in the U.S. interest to wage cold war against either Iran or Russia.  There is no moral issue here.  The Iranian and Russian regimes are bad enough, but everything bad you can truthfully say about them goes double or triple or maybe 10 times for Saudi Arabia.

The passing scene – August 26, 2015

August 26, 2015

Coal Dethroned by Laura Gottesdiener for TomDispatch.

In Appalachia, the coal industry is in collapse, but the mountains aren’t coming back.

Donald Trump – Man of War by David Cay Johnston for the National Memo.  (Hat tip to Avedon’s Sideshow)

21 Questions for Donald Trump by David Cay Johnston for the National Memo.

Donald Trump’s history includes business ties with known Mafia figures and employment of illegal immigrants from Poland.

The Secret History of Jaywalking: The Disturbing Reason It Was Outlawed – And Why We Should Lift the Ban by Ravi Mangla on AlterNet.

Should Prison Sentences Be Based on Crimes That Haven’t Been Committed Yet? by Anna Maria Barry-Jester, Ben Casselman and Dana Goldstein for FiveThirtyEight.  (Hat tip to naked capitalism)

A potential U.S.-Russia clash in the Arctic

August 14, 2015

saker-arctic-860x1024The Russian Federation has literally laid claim to the North Pole.  This is not a joke.

As the Arctic ice cap melts, Arctic oil is becoming available to drillers, and the USA, the Russian Federation, Canada, Norway and Denmark (which owns Greenland) have conflicting claims.

Unlike in the artificial crisis in Ukraine, this is a real national interest of the United States—at least until we American end our dependence on oil and other fossil fuels, which I hope will happen but don’t expect anytime soon.

A pro-Russian blogger called The Saker included this map in a post about Russian military capabilities in the Arctic, which are strong and long-standing.

I don’t think anybody in Moscow or Washington is crazy enough to start a nuclear war over Arctic oil.  But if both countries have nuclear-armed submarines in the Arctic to back up their claims, there is a danger of accidental war.

Canada is second only to Russia in the extent of its Arctic coastline, and the economic strategy of Canada’s Harper administration, like that of the Obama administration, is based on developing oil and gas resources.  I wonder whether Canada will join forces with the USA in a confrontation with Russia.

The way to avoid conflict is by means of negotiation and compromise, but that requires good will and a certain amount of trust among all concerned.


Russia Moves to Protect Her Arctic Interests by The Saker for the Unz Review.

The Battle for the Arctic by J. Hawk for SouthFront.  The view of another pro-Russian blogger.

The sinking of the Canadian Navy by Scott Gilmore for MacLean’s.  [Added later]  Canada may not have a sufficient naval force to assert its claims in the Arctic without backup from the US.

President Obama’s modest Clean Power Plan

August 5, 2015

President Obama’s Clean Power Plan is a step in the right direction, which he advocates with his usual eloquence and which is blindly opposed by most of the Republican leaders.  Sadly it is insufficient to significantly mitigate global warming.

Source: Mother Jones

Source: Mother Jones

The plan is intended to reduce the burning of coal in electric power plants.  This is a good thing because, of all the possible sources of energy, coal is the most destructive to the environment, to the health and safety of workers and to public health, and is the worst contributor to greenhouse gasses.

Even so, under the plan, the United States would still be burning a lot of coal by 2030.  The chart at right is by Kevin Drum of Mother Jones, and it shows that the reduction of power plant emissions from 2005 to 2030 will be less than half.

The plan is intended to reduceincrease the use of renewable energy, which is a good thing.  Sadly it also is based on an energy strategy of fracking for natural gas and of Arctic and other ocean drilling for oil.  This is in the context of a national economic strategy based on exporting raw materials rather than reviving manufacturing.

Obama’s plan is intended to increase energy efficiency, which is a good thing.  The drawback is that making energy use more efficient makes it cheaper, and making it cheaper encourages people to use more.

The goals of the plan are to be achieved after Obama leaves office, so its success depends on whether his successors carry through with it.

I hate to think that Obama’s plan is the best that is economically and politically feasible, but maybe it is.  Too bad for future generations that we couldn’t do more.


Here’s a 2-Minute Video Explaining Obama’s New Plan to Fight Global Warming by Tim McDonnell for Mother Jones.

Why Obama’s epic climate change plan isn’t such a big deal by Michael Grunwald for Politico.

Hidden in Obama’s new climate plan, a whack at red states by Michael Grunwald for Politico.

Obama climate change plan: The clean power plan is supposed to be bold, but it isn’t by Eric Holthaus for Slate.

The Last Defining Court Battle of Obama’s Presidency by Rebecca Leber for The New Republic.   The whole thing could be overturned by Chief Justice Roberts’ Supreme Court.

Putin’s energy strategy for isolating Ukraine

July 6, 2015

Hat tip to Vineyard of the Saker.

Gazprom North StreamPresident Putin has made an agreement with Germany, and offered an agreement to Turkey, that will enable Russia to serve its natural gas markets in western Europe while retaining the option to shut off Ukraine, Poland and the Baltic states.

The Russian government plans to expand its North Stream pipeline across the Baltic Sea directly to Germany.   This would enable Russia to cut off natural gas to Ukraine and most of the rest of eastern Europe without interrupting its sales to western Europe.

Germany, which is now the financial hub of western Europe, would become the energy hub as well.

black_sea_turkey_south_streamRussia has an alternate plan, the South Stream, a pipeline to cross the Black Sea to Bulgaria, but this has been canceled.  Instead Russia now hopes to build a Turkish Stream, which would connect directly with European Turkey.  Greece and other European countries would have the option of connecting to that pipeline.

The Turkish government also has the ambition of becoming an energy hub.  It is in a good position to do this because of its position as the crossroads between Europe and the Greater Middle East.  But, for political reasons, Turkey might have to give up plans for other pipelines to connect to Iran, Iraq and Azerbaijan if goes along with Russia’s Turkish Stream.

Not everything that is announced gets built, and in any case construction of these pipelines would take several years.   But Putin’s strategy could put Russia in a powerful position in regard to Ukraine and NATO’s eastern flank, and without firing a shot.


A plan to store natural gas under Seneca Lake

May 15, 2015

A plan is afoot to store natural gas in salt caverns beneath Seneca Lake, one of the world’s beauty spots, an important location for the New York wine industry and a source of fresh water for 100,000 people.

Although Gov. Andrew Cuoma has suspended hydraulic fracturing for natural gas in New York state, the Federal Energy Regulatory Commission has authority to allow fracked gas to be brought in for storage from Pennsylvania and other states.

Filmmaker Josh Fox and author and activist Sandra Steingraber report in the video above how the natural gas industry intends to make New York’s Finger Lakes a storage and transportation hub for gas throughout the Northeast.

They argue that this creates danger of not just of a gas explosion, but even of the collapse of the lake bottom.


Video of the Week: We Are Seneca Lake – A Call to Action from Josh Fox and Sandra Steingraber from Josh Fox’s Gasland blog.  (Hat tip to Bill Harvey)

We Are Seneca Lake: Josh Fox & Fracking Opponents Fight Natural Gas Storage Site in Upstate NY on Democracy Now! (Hat tip to Bill Harvey)

How tar sands oil is produced

May 6, 2015

gr-tar-sands-948Source: NPR.

Could industrial civilization be rebuilt?

April 20, 2015

Our industrial civilization was made possible by easily available coal and then by easily available oil.

All the easy fossil fuels, not to mention the easy metal oils, have been used up, but advanced technology makes it possible to extract fuel from shale oil, shale gas and tar sands, drill in the Arctic and under the oceans and move whole mountains to get at coal.

collapse16-2But what if industrial civilization collapsed?  Do we have the knowledge to rebuild it without the resources available to the creators of the Industrial Revolution?

Lewis Dartnell, a UK Space Agency research fellow and author of The Knowledge: How to Rebuild Our World from Scratch, said it would be possible, but very, very difficult.

The most likely places for a rebirth of industrial civilization, he has written, are Norway and Labrador, which have forests for making charcoal and fast-flowing rivers for water power.  These pre-industrial sources of energy just might generate enough power to create the materials needed for solar panels, electrical generators and other alternate industrial technologies.

I know enough not to pretend to predict the future, but the continuation of our industrial civilization is not guaranteed.

A nuclear war between the USA and Russia is still possible.   Drug-resistant diseases such as Ebola could sweep the world.  Global climate change could prove even more catastrophic than most scientists think.

Dmitry Orlov on his blog foresees the collapse of industrial civilization, and John Michael Greer predicts its slow decline.  Maybe they’re right and maybe not, but neither scenario is impossible.

The moral I draw is that the time to turn to renewable energy is now.


Can civilization reboot without fossil fuels? by Lewis Dartnell for Aeon.

Four surprising reasons why clean energy is gaining on fossil fuels by Michael T. Klare for TomDispatch (via Grist)

Hillary Clinton promoted fracking to the world

April 16, 2015


gas_landsMy e-mail pen pal Bill Harvey in Baltimore sent me a link to a well-researched article in Mother Jones documenting how Hillary Clinton as Secretary of State promoted fracking in foreign countries.

Fracking—hydraulic fracturing for oil and natural gas—is a destructive process that, among other things, creates increased risk of earthquakes and contamination of ground water and uses up vital supplies of fresh water.

I’m opposed to fracking unless there is a more desperate need for fuel than there is now.

But however you look at it, promotion of fracking in foreign countries in no way benefits the American public, except for a few wealthy investors and corporate investors, such as Beau Biden, the Vice President’s son, who is on the board of directors of an energy company that hopes to do fracking in Ukraine.

There is a strong grass-roots opposition to fracking in many countries, and, to the extent that the American government is seen to be promoting fracking, this generates ill-will toward the U.S. government and Americans generally.

Unlike in the USA, most landowners do not own the mineral rights under their land. Those rights are owned by governments and can be sold, leased or given away even if the owner objects. So fracking decisions are not usually made by an individual landowner to get income, but by government officials.

Hillary Clinton did not decide to promote fracking on her own. This is President Obama’s policy.

I doubt Republicans in Congress have any objection to promoting fracking abroad. They object to the Obama administration presuming to regulate fracking on U.S. public lands.


How Hillary Clinton’s State Department Sold Fracking to the World by Mariah Blake for Mother Jones.

Oklahoma now exceeds California in earthquakes

April 9, 2015

Oklahoma now has more earthquakes than California.

Geologists blame fracking.

Hydraulic fracturing for oil and natural gas involves drilling a vertical well and a horizontal tunnel through layers of shale, then setting off explosives at the end of the tunnel to fracture the shale.  Liquids are pumped into the fractures to force out the oil and gas.

Geologists say the problem is not the fracturing, but that the liquids used in fracturing lubricate existing faults and allow them to shift more easily.


A disaster waiting to happen in Oklahoma?  The link between fracking and earthquakes in an oil-rich town by Andrew Dewson for The Independent.

The Link Between Fracking and Oklahoma’s Quakes Keeps Getting Stronger by Tim McDonnell for Mother Jones.

Germany as a good example for the USA

April 8, 2015

I grew up with a stereotype of the Germans as prisoners of hierarchy, bureaucracy and rules, who would never be a match for us democratic, freedom-loving practical Americans.

But if that ever was true, our two countries have since traded places.

Were-You-Born-on-the-Wrong-Continent1Thomas Geoghegan, a Chicago labor lawyer whose writings I admire, wrote a book in 2010 entitled WERE YOU BORN ON THE WRONG CONTINENT? How the European Model Can Help You Get a Life about how Germany is an economic role model for the United States.

He still says so in his newest book, ONLY ONE THING CAN SAVE US: Why America Needs a New Kind of Labor Movement.

In Germany, Geoghegan wrote, the laws, strong labor unions, worker representatives in management make it difficult to fire anybody.  So layoffs are a last resort, not a first resort.

German management is forced to concentrate on figuring out how to get the most out of the work force, not on making workers powerless and replaceable.   The result is that German corporations invest in lifelong learning for their workers, on the justified assumption that they’re going to remain with the same employer and become permanent assets to the firm.


Corporate power and impunity

March 18, 2015

architecture-of-impunitySource: Transnational Institute

Even the USA imports energy from Russia

March 4, 2015

OilPrice reports that, despite sanctions, energy exports from Russia continue to flow not only to Europe but to the USA.

As President Obama and Secretary of State John Kerry last year lambasted Russia for supporting pro-separatist rebels in Crimea and eastern Ukraine, and accused the Kremlin of involvement in the shooting down of a Malaysian airliner, a huge coal carrier was crossing the ocean to deliver 40,000 tons of thermal coal to the Schiller Station coal-fired power plant in New Hampshire. 

Forbes broke down the reasons for the apparent contradiction nicely, stating that for the East Coast, Russian coal is “easy to get and cheaper to ship.”  An added advantage: coal from Russia emits less sulfur than US coal, making it easier to comply with environmental regulations.

Many US citizens would also be horrified to learn that a considerable amount of nuclear power produced in the United States comes from Russian uranium, none of which is yet subject to Western sanctions.  According to the US government’s National Nuclear Security Administration, about half of the fuel used in American nuclear reactors comes from dismantled Soviet warheads … …

Waging economic warfare against Russia by disrupting long-standing economic relationships is a prime example of cutting off your nose to spite your face.


Impotent Western Sanctions Fail To Disrupt Russian Energy Exports by Andrew Topf for OilPrice (hat tip to naked capitalism)

The death throes of Alberta tar sands?

March 3, 2015
Alberta tar sands.  Source: The Economist

Alberta tar sands. Source: The Economist

Click to enlarge.

Click to enlarge.

The dangerous and destructive Alberta tar sands project may be in jeopardy economically because of falling oil prices, the Washington Spectator reported.

An end to the project would be good news, but the desperate struggles of the dying industry to survive by any means necessary could cause even more damage before it disappears.

Tar from tar sands is extracted by a process as environmentally destructive as strip mining and hydrofracking combined.  Tar Sands Solutions says an area of northern Alberta the size of Florida is being devastated.  Scientists say that the tar sands project in and of itself could have a measurable effect on global warming.

Click to enlarge.

Click to enlarge.

Extraction products a product called bitumen, a corrosive slurry that must be brought to a refinery to be converted into a useful product.  This creates a high risk of pipe breaks or leaks from tanker train accidents along the way.

As oil prices fall, the higher the volume of bitumen that must be shipped from northern Alberta to generate enough revenue to keep the project going.  Mark Dowie, writing in the Washington Spectator, says this creates an opportunity to block the project.

It is not necessary, he wrote, to stop all tar sands pipelines—the two planned for Canada’s west coast, the one planned for Canada’s east coast or the Keystone XL pipeline through the United States to the Texas Gulf Coast.  Blocking two or three would be enough to make the project economically unfeasible.

This makes sense.  But tar sands in its death throes could be even more destructive than it is now, as the owners try to ship their product by tank cars or by any other means necessary.

Click to enlarge.

Click to enlarge.

President Obama vetoed a bill requiring him to approve the Keystone XL pipeline on his own.  But he still could approve it on his own authority.  Canada could ask a NAFTA tribunal to order the United States to pay penalties if he doesn’t.  Or it could wait for until a new President is elected in 2016.

I used to look upon Canada as not just a good neighbor to the United States, but as a good example.  That’s no longer true under Prime Minister Stephen Harper.


New reports on the hazards of fracking

February 25, 2015

fracking-infographic-1024x767Source: Daily Kos.

I’ve long been aware that hydraulic fracturing for natural gas is associated with earthquakes, but I had thought the main reason was the settling of the geological strata after the fracking process is complete and the fracking fluid is pumped out.

But according to a report by the U.S. Geological Survey, the main cause of fracking-induced earthquakes is the injection of the huge amounts of contaminated waste water into deep geological strata.

Large areas of the United States that used to experience few or no earthquakes have, in recent years, experienced a remarkable increase in earthquake activity that has caused considerable public concern as well as damage to structures. This rise in seismic activity, especially in the central United States, is not the result of natural processes.

Instead, the increased seismicity is due to fluid injection associated with new technologies that enable the extraction of oil and gas from previously unproductive reservoirs.  These modern extraction techniques result in large quantities of wastewater produced along with the oil and gas. The disposal of this wastewater by deep injection occasionally results in earthquakes that are large enough to be felt, and sometimes damaging. Deep injection of wastewater is the primary cause of the dramatic rise in detected earthquakes and the corresponding increase in seismic hazard in the central U.S.

via USGS Release.

Meanwhile in California the Center for Biological Diversity, a non-profit conservation organization, has found deep underground storage of oil fracking waste water has allowed toxic and cancer-causing chemicals to contaminate aquifers, underground reservoirs that can be a source of irrigation and drinking water.


Peak coal? Or just a temporary coal glut?

February 23, 2015

My e-mail pen pal Bill Harvey sent me a link to an article reporting that Peabody Energy, the nation’s largest coal company, is losing money, and some smaller U.S. coal companies have already gone bankrupt.

Does this mean we’ve reached peak coal?  Have American companies already mined all the coal that can be extracted profitably?  Profitably, even taking into consideration all the costs in human health, environmental destruction and climate change that they offload onto the public?  Maybe.

There’s another trend at work, and that is a glut in the world supply of coal, which is driving the price down.  This is part of a normal economic cycle.  A glut causes a drop in prices, which causes business failures, which causes scarcity, which causes a rise in prices, which causes another boom, which causes another glut, and so on.

But as we use up all the easy-to-get coal, easy-to-get oil and easy-to-get natural gas, and the remaining gas becomes more expensive to extract, the cycles of boom and bust will be shallower and shorter.

The question is how much buyers of coal should count on a good supply at a reasonable price in the long run.

Electric utilities typically make take-or-pay contracts, which obligate them to buy certain amounts of energy from certain suppliers at a certain price over a long period of time.

I don’t think there’s anything improper about take-or-pay contracts in and of themselves.  A supplier isn’t going to make a long-term investment unless there’s assurance of a market.  But the buyer needs to do a lot of hard thinking about the future.

I think that, as a matter of national policy, coal companies and other energy companies should be made to absorb the costs of the harm they do to human health and the human environment.  If that increases the cost of energy—well, the cost was always being paid, just not by them.

As a matter of national policy, it is best to leave as much coal and other fossil fuels in the ground as possible.  Ideally we the people will find good substitutes.  But if there comes a time when they are desperately needed, these resources will be there for us.


The fracking boom is ending with a bust

February 16, 2015

screen shot 2015-02-14 at 10.06.10 am

screen shot 2015-02-14 at 10.07.42 amSource: Business Insider.

Business booms are followed by busts—the interaction of overconfidence, oversupply and diminishing returns.

That’s not just a law of the free-market system, it’s a law of human nature.

As the chart above indicates, hydraulic fracturing for natural gas is an industry entering the bust part of its cycle.

The glut of natural gas probably will continue for some time.   Gas companies would continue to pump gas even if they’re losing money.

They’ve already paid for the drilling equipment, and they’d lose less money by continuing to pump than by walking away from their sunk costs.

It’s good that New York state didn’t jump into fracking just now.   We’d have had all the problems associated with fracking and none of the benefits the come with getting in on the ground floor.

The wise thing to do just from a business point of view, aside from all environmental and climate considerations, is to keep natural gas in the ground as long as we can.  If there comes a time when we desperately need it, it will be there.


Fracking has collapsed by Wolf Richter of Wolf Street for Business Insider.

Keystone XL, Cold War 2.0 and the GOP Vision for 2016 by Michael T. Klare for TomDispatch.  Fracking is a factor in geopolitics.

Update 2/28/15

As Bill Harvey pointed out in his comment, a decline in the number of rigs doesn’t mean a decline in production—that is, not right away.

markets cotd rig count2

Oil rigs and oil production in the United States

Comfort, risk and coal-fired furnances

January 26, 2015

When I was a schoolboy, one of my chores after I walked home from school was to stir up the coal in our furnace, so that the fire, which had been banked during the day, would flare up start to warm our house again.

Both my mother and father worked outside the home for pay, so there was no sense burning coal unnecessarily when nobody was home.

furnaceThe coal was in a huge pile in our basement, delivered by the coal company through a chute.  We had to remember to shovel new coal in the furnace at regular intervals, especially just before we went to bed at night, lest the fire go out.

Restarting a furnace fire was a major operation.  What we should have done was to start a fire with newspaper and kindling wood, then add more food and then, when the fire was going strong, add coal

What my dad actually did was to splash kerosene onto the coal, toss a lighted wooden match into the furnace and then jump back.  I do not recommend this.

The coal burned down to ashes which collected in the bottom of the furnace in big metal tubs.  Another one of my chores, when I was big enough, was to help my father carry the tubs out to the curb to be collected.

I imagine my father thought having a furnace at all and having coal delivered to the house was a great advance.  He grew up in a farm with only a stove in the kitchen for heat.

I myself have a gas furnace which I control with a thermostat.  That’s a lot easier than shoveling coal.  But on Saturday night, my furnace failed—with temperatures outside below 10 degrees Fahrenheit.

I phoned Betlem Heating, and a service technician came by a few hours later.  He quickly diagnosed the fixed the problem—a failed thermocouple—and was on his way.

He told me he had many calls that night, each one to a place 20 or 30 miles from the one before.  But he said he didn’t mind.  That was his job.

I have a much easier life than my father and grandfather.  But compared to them, I am much more dependent on complex systems that I don’t understand—not just the furnace, but the whole interdependent web of people and institutions that bring the gas to my house.


Russia turning down the gas on Europe

January 15, 2015


Russia cut natural gas shipments to Europe by 60 percent, and announced plans to eventually cut off shipments through Ukraine altogether.

The Urkainian route will be replaced with a new pipeline through Turkey, which will take a couple of years to build.  The European Union will need to build its own infrastructure to take the gas from the Greek border to the rest of Europe.

If the Europeans don’t get their new pipelines built in time, Russia will send its gas elsewhere, the head of Gazprom said.  Russia is working on gas deals not only with China, but with India.

Vladimir Putin is not a helpless victim of economic sanctions and falling oil prices.  He is willing and able to use Russia’s economic power to damage Ukraine and the European nations.

Nobody benefits from this cycle of tit-for-tat retaliation.  It’s an economic form of mutually assured destruction.

Russia Fires Ukraine as Natural Gas Transit for Europe by Michael Collins for Op-Ed News [added 1/16/2015]


Can Russia diversify away from oil and gas?

January 7, 2015


Russia is a land rich in natural resources and human talent.  It has been an industrial nation for more than a century.  Why hasn’t it developed a world-class manufacturing industry in anything but armaments?  If it had, Russia would not be jeopardized by falling oil prices.

russianexportschartOne explanation is that Russia has been held back by world trade treaties, which restrict Moscow’s right to subsidize its infant industries—even though that has been the method by which every new industrial nation, except Great Britain, which was the first, has made up the head start of the older industrial nations.

During the Napoleonic Wars, the young United States was cut off from trade with Europe, which New England manufacturers used as an opportunity to develop our domestic manufacturing industry.

RUSSIA_CORRUPTIONAnother is that the Russian economy is controlled by a corrupt financial oligarchy, which is interested only in extracting profit for themselves and not in building for the future.   Probably the truth lies somewhere in between.

I don’t think that having a strong oil industry in itself is a curse that prevents development of  manufacturing.

The United States was a leading oil producer and exporter in the first half of the 20th century, and Americans leveraged that advantage to develop an mass-produced auto industry, a chemical industry and other industries based on cheap and plentiful oil.

To the extent that Russia is shackled by the international economic system, the current crisis represents an opportunity to break free of that system.

To the extent that Russia’s problem is its own dysfunctional political and economic system, it means the country must either reform or become a satellite of China or the West.   Or, in the worst case, Russia could become a Ukraine writ large, a prize for other, more powerful states to fight over.


Plummeting Oil Prices Could Bring Radical Change to Russia.  What Comes Next? by David M. Kotz for The Nation.  [Hat tip to Bill Harvey]

The passing scene: January 1, 2015

January 1, 2015

The Tragedy of the American Military by James Fallows for The Atlantic.

Gun Trouble by Robert H. Scales for The Atlantic.

HighAirfare35e18The U.S. armed forces have greater prestige than at any time in American history, and the nation spends almost as much on its armed forces as the whole rest of the world put together.  Yet the USA doesn’t seem to be able to win wars, or even provide troops with a gun that doesn’t jam.

James Fallows wrote in The Atlantic that the United States has become a “chickenhawk nation.”  The majority of Americans do not wish to serve in the military and have no real desire to understand the military, so we take the easy way out which is to say, “thank you for your service,” and go about our business.

Military procurement has become a business subsidy and job creation program.  If the USA reduced its military force and weapons spending to what is needed to defend the nation, and nothing else was done, a recession would result.

Infrastructure advances in the rest-of-the-world will blow your mind by james321 for Daily Kos.

We Americans used to pride ourselves on our mega-engineering projects, but now the rest of the world is leaving us behind.

China has opened direct rail service from the China Sea to Madrid.  Switzerland is about to open its 35-mile Gotthard Base Tunnel under the Alps.  Italy is soon to start high-speed rail service between Milan and Rome, capable of speeds up to 250 miles per hour.

We Americans don’t even perform maintenance on what we’ve got, and that’s a sign of a society with a fatal loss of concern for its future, just as our military strategy is a sign of a society with a fatal loss of a sense of reality.


Don’t back Russia into a desperate corner

December 22, 2014


It is a grave mistake to put President Vladimir Putin or the leader of any nation with nuclear weapons into a situation in which they think they have nothing to lose.

I wrote a post Wednesday on the danger of nuclear war with Russia.  Pepe Escobar pointed out that Russia has other means of Mutually Assured Destruction.

eruopeanbankexposuretorussia pmOne would be to default on Russia’s debts, or even suspend payment on the debts, pending the end of the current emergency.  This would threaten major banks in Western Europe that have extended credit to Russia.

Another would be to cut off gas exports to Ukraine and the countries of the European Union.

Either of these things would hurt Russia as much as it hurts Russia’s enemies.  Russia needs credit, and Russia needs foreign markets.

But if the country has been brought to the brink of collapse anyway, then its leaders have nothing left to lose by striking back.

gassuppliedbyrussia (more…)

The rise and fall and rise of oil prices

December 21, 2014

Click to enlarge.

Source: Business Insider.

This chart, made by Goldman Sachs and reprinted by Business Insider, which I found on a Naked Capitalism link, shows the rise and fall and rise and (very probably) the impending fall of the price of oil on world markets.

It’s partly an example of the law of supply and demand in action.  When the price of something goes up, people use less of it, look for ways to produce more of it, and invent substitutes for it, and eventually that brings the price back down again.

But I think it shows something else, and that is the end of easy-to-get oil.  Hydraulic fracturing, deep water ocean drilling and Arctic drilling will increase the supply of oil over time, but oil will never be available as easily or as cheaply as from the historic oil fields in Texas and the Persian Gulf.

I don’t think oil will ever again be as cheap as it was during the years from 1880 to 1970—at least not for long.   And that’s probably a good thing in the long run.   So long as oil and other fossil fuels are cheap, we’ll keep on making new greenhouse gasses and burn up the planet.

A happy surprise: Gov. Cuomo bans fracking

December 18, 2014

Gov. Andrew Cuomo’s decsion to ban hydraulic fracturing for oil and gas in New York state was made for the right reason – the Precautionary Principle.

fracking-diagramThat is, he banned fracking not because it was proven to be harmful, but that there were good reasons to think it might not be safe.

I misjudged Cuomo.  I thought he intended to approve fracking, but was postponing this unpopular decision until after the election.

With falling oil and gas prices, the economic benefits of fracking are even less than before.  The oil and gas locked underground in the Marcellus shale will not go away.  It will still be there if someday the USA is so desperate for energy that fracking is necessary.


“This Will Have a Ripple Effect Across the Country”: State of New York Bans Fracking by Cole Stangler for In These Times.  (Hat tip to Bill Harvey)


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