Tag Archives: energy

supply and demand

Mohamed El-Erian says that Saudi Arabia won’t cut its pumping to counteract falling oil prices, for fear of losing market share. He says the normal textbook rules of supply and demand will apply:

Low prices will lead to the gradual shutdown of what are now unprofitable oil fields and alternative energy supplies, and they will discourage investment in new capacity.  At the same time, they will encourage higher demand for oil.

This will all happen, but it will take a while. In the meantime, as oil prices settle at significantly lower levels, economic behavior will change beyond the “one-off” impact.

As costs fall for manufacturing and a wide range of other activities affected by energy costs, and as consumers spend less on gas and more on other things, many oil-importing nations will see a rise in gross domestic product. And this higher economic activity is likely to boost investment in new plants, equipment and labor, financed by corporate cash sitting on the sidelines.

This is where I should say something smart about natural capital or climate change or innovation. Well, maybe I’m just tired tonight.

November 2014 in Review

At the end of October, my Hope for the Future Index stood at -2.  I’ll give November posts a score from -3 to +3 based on how negative or positive they are.

Negative trends and predictions (-6):

  • There is mounting evidence that the world economy is slowing, financial corporations are still engaged in all sorts of dirty tricks, and overall investment may be dropping. Financial authorities are trying to respond through financial means, but the connections are not being made to the right kinds of investments in infrastructure, skills, and protection of natural capital that would set the stage for long-term sustainable growth in the future. (-2)
  • Public apathy over climate change in the U.S. may have been manufactured by a cynical, immoral corporate disinformation campaign over climate change taken right out of the tobacco companies’ playbook. It’s true that the tobacco companies ultimately were called to account, but not until millions of lives were lost. Will it be billions this time? (-2)
  • Glenn Beck has gone even further off his rocker, producing a video suggesting the U.N. is going to ration food and burn old people alive while playing vaguely middle eastern music. One negative point because some people out there might not laugh. (-1)
  • The new IPCC report predicts generally negative effects of climate change on crops and fisheries. The good news is it doesn’t seem to predict catastrophic collapse, but we need to remember that the food supply needs to grow substantially in the coming decades, not just hold steady, so any headwinds making that more difficult are potentially threatening. (-1)

Positive trends and predictions (+6):

  • A lot is known about how to grow healthy trees in the most urbanized environments. But only a few cities really take advantage of this readily available knowledge. (+0)
  • As manufacturing becomes increasingly high-tech, automation vs. employment is emerging as a big theme for the future. The balance may swing back and forth over time, but in the long term I think automation has to win. New wealth will be created, but the question is how broadly it will be shared. The question is not just an economic one – it depends on the kind of social and political systems people will live under in various places. This might be why the field of economics was originally called “political economy”. So I’m putting this in the positive column but giving it no points because the jury is out. (+0)
  • Google is working on nanobots that can swim around in your blood and give an early diagnosis of cancer and other diseases. (+1)
  • Economic slowing is probably the main reason why oil prices are way down. Increased supply capacity from the U.S. also probably plays a role, although there are dissenting voices how long that is going to last. I find it hard to say whether cheaper oil is good or bad. I tend to think it is just meaningless noise on the longer time scale, but you won’t hear me complain if it brings down the price of transportation and groceries for a year or two. (+0)
  • Millennials aren’t buying cars in large numbers. I don’t believe for a second that this means they are less materialistic than past generations, but I think a shift in consumption from cars to almost anything else is a net gain for sustainability. (+2)
  • I discovered the FRAGSTATS package for comprehensive spatial analysis of ecosystems and habitats. This gives us quantitative tools to design green webs that work well for both people and wildlife. Bringing land back into our economic framework in an explicit way might also help. (+1)
  • “Perennial polyculture” gardens may be able to provide food year round on small urban footprints in temperate climates. (+1)
  • A vision for smart, sustainable infrastructure involves walkable communities, closing water and material loops, and using energy wisely. Pretty much the same points I made in my book, which I don’t actively promote on this site;) (+1)

Hope for the Future Index (end of October 2014): -2

change during November 2014: -6 + 6 = 0

Hope for the Future Index (end of November 2014): -2 + 0 = -2

the U.S. and the middle east

I can’t fact check everything in this Tom Dispatch article, but even if only half of it were true, the U.S. military footprint and spending in the Middle East is eye opening.

Soon enough, that Rapid Deployment Force grew into the U.S. Central Command, which has now overseen three wars in Iraq (1991-2003, 2003-2011, 2014-); the war in Afghanistan and Pakistan (2001-); intervention in Lebanon (1982-1984); a series of smaller-scale attacks on Libya (1981, 1986, 1989, 2011); Afghanistan (1998) and Sudan (1998); and the “tanker war” with Iran (1987-1988), which led to the accidental downing of an Iranian civilian airliner, killing 290 passengers. Meanwhile, in Afghanistan during the 1980s, the CIA helped fund and orchestrate a major covert war against the Soviet Union by backing Osama Bin Laden and other extremist mujahidin. The command has also played a role in the drone war in Yemen (2002-) and both overt and covert warfare in Somalia (1992-1994, 2001-).

October 2014 in Review

At the end of September, my Hope for the Future Index stood at +1.  As I did last month, I’ll sort selected posts that talk about positive trends and ideas vs. negative trends, predictions, and risks. Just for fun, I’ll keep a score card and pretend my posts are some kind of indicator of whether things are getting better or worse. I’ll give posts a score from -3 to +3 based on how negative or positive they are.

Negative trends and predictions (-11):

  • The Wall Street Journal prints an op-ed by a climate change skeptic. Wait, I thought there was a pure consensus among serious scientists about climate change. Or is it just serious climatologists, with a few lone dissenting physicists like this guy? Either way, there is an overwhelming near-consensus and by printing this the WSJ gives the idea that there is still a significant debate, thereby reducing the chances of action being taken. Meanwhile, the New York Times tells us where in the U.S. to move as the heat creeps up on us – Alaska, Seattle, and Detroit. Tidal flooding may also become a bigger problem in coastal cities. (-1)
  • Economists and economic journalists are buzzing about a worldwide slowdown and an even more severe financial crisis that may be on the horizon. Europe, and France in particular, seem to be getting into dangerous territory right now. (-2)
  • The new Living Planet Report says our ecological footprint has not ticked up from 1.5 planets since the last Living Planet Report. That is, no change given the rounding error of 0.1 planets. Before we get too happy, remember that a number over 1 is meant to measure the rate of decline. So these would be mean not that our situation has stabilized, but that the rate of decline has not accelerated. (-1)
  • Slavery is a good example of how amoral profit-seeking private enterprise can lead to evil consequences. (-3)
  • The drought in California and the U.S. desert southwest continues to get worse. Ours is not the first civilization to be impacted by drought in the U.S. desert southwest, and hopefully we will deal with it better than last time. (-1)
  • The U.S. medical system may not be prepared for Ebola, and if not it would be even less well prepared for something even more serious. (-1)
  • The American entrepreneurial spirit may have slowed down over the last generation. If this is true, it would be yet one more drag on the innovation pickup the world needs. (-1)
  • Energy prices are down. I’m not smart enough to tell you definitively if this is good or bad. If it reflected a breakthrough in renewable energy technology and cost-effectiveness, or low energy, sustainable food production, it would be great news. I hope renewable energy is starting to have an effect. But the bulk of the effect, most likely, reflects upward pressure on supply from hydraulic fracturing, and downward pressure on demand from economic slowing in Asia and Europe. High energy and food prices over the past decade quite likely have a hand in the economic slowing. Economic slowing can lower the world’s ecological footprint a bit, but it can also slow down innovation and, of course, lead to unemployment, hunger, unrest and conflict. (-0)
  • Echoes of the Cold War are rearing their ugly head, with Sweden out searching for Russian submarines in its territorial waters. (-1)

Positive trends and predictions (+8):

  • Maybe green consumer behavior can be scaled up through clever advertising. (+1)
  • Mosquitoes are being purposely infected with a naturally occurring bacteria, then released to control Dengue fever. (+1)
  • Automation (i.e. increasing computer control of nearly everything) is really taking hold of our economy and society, with potentially positive consequences for overall productivity and wealth, but potentially negative consequences for employment and distribution of wealth, depending on how it is handled. (+0)
  • There really are a lot of good examples and a lot of knowledge out there on how to have a lot of healthy trees in cities. This is known technology. Now cities in North America and the developing world just need to catch up and adopt the technology. (+1)
  • The old economy, for example dirty old fossil fueled electric utilities and sleazy taxi companies, are fighting the new, such as solar road materials and ride sharing. As they realize the technological and economic tide is turning against them, they are fighting in legislatures and courts for special laws that are unfair in their favor. They might win some battles and retard progress for a while, but I don’t see how they can win the long-term war. (+1)
  • LED light bulbs are now the overwhelming best household lighting choice, even in terms of purchase price. (+1)
  • Developing countries today are achieving much better health outcomes than developing countries of the past did at similar income levels. (+1)
  • People are waking up to fact that computer-controlled cars may free up large amounts of space in cities for new uses. (+2)
  • New technology for freezing human eggs may give women more flexibility on how and when to start a family, but muddle the historical meaning of biological relationships and generations. (+0)

Hope for the Future Index (September 2014): +1

October 2014 change: -11 + 8 = -3

Hope for the Future Index (October 2014): +1 – 3 = -2

shale bust?

This article casts doubt on the U.S. government’s predictions of domestic oil and gas production. Granted, it is from something called the Post Carbon Institute which may have a point of view.

This report finds that tight oil production from major plays will peak before 2020. Barring major new discoveries on the scale of the Bakken or Eagle Ford, production will be far below the EIA’s forecast by 2040. Tight oil production from the two top plays, the Bakken and Eagle Ford, will underperform the EIA’s reference case oil recovery by 28% from 2013 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by the EIA. Tight oil production forecast by the EIA from plays other than the Bakken and Eagle Ford is in most cases highly optimistic and unlikely to be realized at the medium- and long-term rates projected.

Shale gas production from the top seven plays will also likely peak before 2020. Barring major new discoveries on the scale of the Marcellus, production will be far below the EIA’s forecast by 2040. Shale gas production from the top seven plays will underperform the EIA’s reference case forecast by 39% from 2014 to 2040, and more of this production will be front-loaded than the EIA estimates. By 2040, production rates from these plays will be about one-third that of the EIA forecast. Production from shale gas plays other than the top seven will need to be four times that estimated by the EIA in order to meet its reference case forecast.

air pollution and cardiovascular disease

This just in from the American Heart Association (actually the article is from 2010 but I don’t think the news has gotten any better) – particulate air pollution, which comes from internal combustion engines and fossil-fueled power plants, is pretty bad for us:

There are several ways by which PM2.5 could affect the cardiovascular system; however, one leading explanation suggests that several components of PM2.5, once inhaled, can cause inflammation and irritate nerves in the lungs. These responses can start a cascade of changes that adversely affect the rest of the body, Brook said.

“It’s possible that certain very small particles, or chemicals that travel with them, may reach the circulation and cause direct harm,” Brook said. “The lung nerve-fiber irritation can also disrupt the balance of the nervous system throughout the body. These responses can increase blood clotting and thrombosis, impair vascular function and blood flow, elevate blood pressure, and disrupt proper cardiac electrical activity which may ultimately provoke heart attacks, strokes, or even death.

“These studies also indicate that there is no ‘safe’ level of PM2.5 exposure,”

Also, and this really is breaking news, in the Nurses’ Health Study:

  • In 523 cases of sudden cardiac death, living within 50 meters (164 feet) of a major road increased the risk of sudden cardiac death by 38 percent, compared to living at least 500 meters (.3 miles) away.
  • Each 100 meters (328 feet) closer to roadways was associated with a 6 percent increased risk for sudden cardiac death.
  • In the 1,159 cases of fatal coronary heart disease, risk increased 24 percent.

The public’s exposure to major roadways is comparable to major sudden cardiac death risk factors, researchers said.

still more on oil prices and fracking

This article from Planetizen puts the break-even price for hydraulic fracturing at something like $80-85 a barrel, higher than I had previously reported. The point is that they are getting down to the point where it would no longer be as profitable as it has been, and at some point it wouldn’t be profitable at all. It’s fun to try to piece together the reasons for this shift – slowing economies in Europe, Asia, and Africa, and as a result a rising U.S. dollar which means oil that might be holding steady in currencies around the world is still getting cheaper in U.S. dollars at the moment. I still think this is a short-term fluctuation masking a decades-long trend toward higher energy and food prices.

LED lightbulbs

There is officially no reason not to be buying LED lightbulbs now. The purchase price is no longer higher than other types of bulbs, and the operating cost is much lower. NPR has nice charts that make all this pretty clear.

Now, normally I don’t link to products other than books on this site, but I’ve been buying these and replacing older bulbs as they burn out, and so far I am happy with them:

solar roads

I clicked on this article from Woodhouse about new paving technologies expecting to hear about porous pavement. But it turned out to be all about paving with solar panels:

The company’s aim is to reduce carbon emissions by paving currently tarmacked surfaces with solar panels, turning a previously unproductive landmass into a renewable energy powerhouse.

The solar energy collected by the smart surface could be used to feed the grid during the day time, or even power things such as heating elements under the surface to clear ice and snow from the roads in the winter. Eventually, it might be possible to power electric cars as they drive along.

Pavement covers enormous areas in our cities, so this could be huge. On the other hand, the lack of any mention of stormwater worries me slightly. There is a lot more time and effort going into developing better materials to capture energy than to manage water, when both are important. In fact, when it gets to the point (now in some places, very soon in others) where people can make serious money installing solar panels on their rooftops and paved surfaces, that could even come into conflict with stormwater management opportunities (green roofs and porous pavement being two examples). On the other hand, my water bill has been creeping up to the point where it is not that much less than my electric and natural gas bills. So where the economic drivers have been overwhelmingly on the side of energy until recently, water may be catching up. Of course, we want to find materials and approaches that do both, so let’s get to work on that.

new vs. old economy in Pennsylvania

Pennsylvania – we’re not always known as the most progressive of states, at the forefront of the major trends – but even here, the old business as usual economy is fighting against the new, more sustainable one. At the moment, traditional electric utilities seem to be winning their battle to limit the amount of solar energy homeowners can sell back to the grid. But at the same time, Uber and Lyft seem to be making progress in their battle against the filthy sleazy old taxi companies. One thing Uber has now that taxis never have even considered – car seats! I would support it for that reason alone.