The Daily Bulletin - September 4, 2013
TODAY'S TAKEAWAY: ENERGY IS DRIVING ECONOMICS GROWTH
Finally, somebody has taken notice! IHS Economics, a consulting firm with offices around the country, has put out a report nothing that the energy sector - particularly oil and gas - have become the main driving force of the economy. While bureaucrats in Washington sit making plans for filling the desert with windmills and solar collectors, wildcatters and roustabouts have been opening up new underground frontiers in North Dakota and Texas, producing real jobs, real income, and improving the nation's economy. IHS estimates that fracking for natural gas alone has added $1200 in saving and income per household. A study from the U.S. Chamber of Commerce has also shown that fracking has lowered the U.S. trade deficit from 6 percent of GDP in 2005 to 2.7 percent today. Among the latest findings, as reported in the Dallas Morning News: "The average American household had an extra $1,200 last year because of lower energy prices for natural gas, electricity and goods and services. The savings are expected to rise to $2,700 in 2020 and $3,500 in 2025. Foreign and U.S. chemical companies invested $4.8 billion in American plants last year and will spend an estimated $12.8 billion in 2015. Much of the investment is along the Texas coast. By 2025, total new chemical investments will reach $129.3 billion and create 319,000 new jobs. The boom had created 2.1 million direct and indirect jobs by the end of last year. The number is expected to reach almost 3.9 million by 2025." It's about time someone paid attention to what's really going on in this country.
FRACKING DEBATE CONTINUES IN EUROPE
While the U.S. embraces fracking, Europe continues to hesitate. Western Europe, that is. The East - long sick of economic poverty under Communism - is much more enthusiastic. Poland has sunk some test wells and is optimistic about the results. The general mood in Eastern Europe is to go ahead, although Romanians have caught the affluence bug and are protesting. In Western Europe, however, it's the opposite. Hordes of students and protestors who think prosperity can be created by government spending are blocking all fracking efforts in Britain. France has already outlawed the technology and Germany has decided to go with wind and solar. Meanwhile, Russia's Gazprom prowls the forest looking for hapless victims - and finding them. Europe's squeamishness about fracking means more imported gas. Just ask Ukrainians what that means. Says the EU Observer in a long analysis: "For the moment, it is uncertain whether a middle ground can be found in a debate which risks become polarized between drill-happy industry enthusiasts and environmental campaigners who want a flat-out ban on fracking and on developing any new means of energy production that is not renewable. But it increasingly clear that - to Europeans, at least - advocates of shale gas extraction need to do more to assuage public fears that fracking will not cause long-term environmental damage. Without public support, the gas will stay underground." It's their choice.
WAVE ENERGY MAY NOT BE THE WAVE OF THE FUTURE
Meanwhile, the efforts to "harness wind, sun and water" piddle along as a microscopic wave energy project off the Oregon coast has been delayed for two years because of red tape. The whole idea has been to install 10 buoys at sea that would capture the up-and-down energy of the ocean and turn it into electricity. The output would be measured in kilowatts. But even this has proved too much for the bureaucrats. "[P]ermit, regulatory and technical difficulties have all but halted the project. Federal regulators notified the company earlier this year it had violated the license after failing to file a variety of plans and assessments. All that remains in the water are pieces of a single anchoring system on the ocean floor. State officials have told the New Jersey company to remove them by month's end. Leading a new industry has been rough sailing for OPT, as state and federal agencies scramble to write policies for marine energy, and coastal communities worry about fishing grounds and environmental protection. Powerful enough wave technology that can elbow a niche in the energy industry remains a work in progress. And now, after missing multiple, self-imposed deadlines since it went public in 2007, OPT now makes vague promises to test their first buoy in Oregon waters no later than 2016. `It's tough fighting with a new technology,' said Kevin Watkins, the company's Oregon representative." Is it any wonder that most of the economy is at 1 percent growth?
HAVE WE REACHED A NEW NORMAL WITH OIL PRICES?
Today's Charticle draws on the work of EconoBrowser, which argues that the world has now adjusted to a "new normal" of oil prices at $100 a barrel - and is basically doing just fine. The "easy oil" may have peaked but unconventional supplies accessed by fracking have become economical and have filled the gap. Prices spiked in 2008, setting off a recession. Then they plunged but have now settled in at a new plateau. Are people getting used to it? Apparently, yes. "We've been seeing oil over $100 a barrel and gasoline above $3.40 a gallon for much of the last 3 years. Those prices would have shocked many Americans a few years ago, but have now become the new normal," says EconoBrowser.
WILL LABOR UNIONS DECIDE TO "GO GREEN?"
The relationship between organized labor and environmental groups has always been an interesting one. They're both opposed to "big business" and therefore vote Democratic, but for opposite reasons. Labor opposes Big Business because they want it to share more of the wealth. Environmentalists oppose Big Business because they DON'T WANT ANY MORE WEALTH and are satisfied with the way things are. But somehow they manage to get in bed together - after all, most of this takes place in Washington. Environmentalists always try to make a big deal about how many jobs will be created if we give up conventional sources of energy. (Just think how many rickshaw pullers we could create if we gave up cars.) And labor union leaders, at least, usually find some way of kissing up to environmentalists. AFL-CIO President Richard Trumka, for instance, has actually failed to endorse the Keystone Pipeline even though it would be a huge shot in the arm for the construction industry. (Remember once again, all this takes place in Washington.) Sean Higgens tried to sort all this out in the San Francisco Examiner. There do still seem to be a few clear heads in the labor movement. "We're repulsed by some of our supposed brothers and sisters lining up with job killers like the Sierra Club and the Natural Resources Defense Council to destroy the lives of working men and women," says Laborers International Union of North America President Terry O'Sullivan in berating the AFL-CIO leadership in a statement over the pipeline. Meanwhile, Trumka calls his efforts to court the Sierra Club "transactional." Must be some good cocktail party invitations involved.
YOU MEAN WE CAN'T BLAME EVERYTHING ON CLIMATE CHANGE?
John Upton sounds a dissenting note on Grist, of all places, by noting that not everything in the world can be blamed on climate change. "[R] researchers have pinpointed a period shortly after the Industrial Revolution when black carbon alone appears to have caused glaciers to melt in the European Alps. During the middle of the 19th century, the filth from fossil-fuel burning was starting to blanket parts of Europe. "Housewives in Innsbruck refrained from drying laundry outdoors," said Georg Kaser, a glaciologist at the University of Innsbruck in Austria and coauthor of a paper published Tuesday in the Proceedings of the National Academy of Sciences. But temperatures weren't yet rising; if anything, it was still getting colder. Yet in 1865, more than 40 years before temperature records started showing warming in the Alps, the region's glaciers began a retreat that has continued until this day, marking the end of a 500-year ice age. Scientists used ice cores and computer simulations to calculate that heat absorbed by polluted snow would have been enough during the second half of the 19th century to melt the snow and expose glaciers to sunlight, kicking off their decline. `The end of the Little Ice Age in the European Alps has long been a paradox to glaciology and climatology,' wrote Kaser and his coauthors. `Radiative forcing by increasing deposition of industrial black carbon to snow may represent the driver of the abrupt glacier retreats.'" Somebody's going to have to go back and revise the grade school curriculum.