Posts Tagged ‘development’

Oil wars: US crude drops below $50 as Saudi Arabia drops prices to protect market share

January 6, 2015

Some stock markets are spooked as oil prices continue to slide, but bringing oil price back to a cost-based price is a good thing in the long term. For too long – almost 45 years – oil producers and their governments have fleeced the consumer. Oil prices have had no relationship to cost of production but have been governed by artificially controlling its scarcity (by the OPEC cartel) and pricing it at the level of unacceptable pain for the consumer. Predatory governments have assisted by taxing oil products as far as they can even for the necessities of living (gasoline, diesel, LPG, fertilisers, pesticides…). If the present oil wars bring the price to the consumer in line with the cost of production – and there is no shortage of oil available to be produced – then it is a fundamentally sound, and long overdue, removal of one of the great, artificial distortions of the market place.

History will show the OPEC cartel to have held back development for 4 decades and to have been an evil thing.

Even if Saudi Arabia is engaged in a multi-pronged war – against shale oil, against Russia, against Iran – the root cause of the drop is that there is no longer a monopoly that the OPEC cartel enjoys. And the the way being shown by US shale oil is available to many more countries. In the short term it may well affect stock markets as these fetters are removed but in the long term this is an inexorable driver of growth – especially for the developing countries and their hard pressed consumers.

Remarkably many oil producers are now even increasing production in a time of a glut and cutting prices to win market share. They are being short-sighted. As the Opec cartel collapses, and it becomes a buyer’s market it will be oil price which governs and even then only for short term supply contracts. It will no longer be possible for the cartel oil producers to extort long-term contracts at high prices from developing countries who have no alternatives.

FP0106_Oil_C_JR

2015 not 2014 — via Financial Post

 Financial PostU.S crude crashed below US$50 a barrel while benchmark Brent crude tumbled under US$53 after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports at near 35-year peaks.

Meanwhile, the outright price for Canadian heavy crude fell below US$35 a barrel. ……. The drop in WTI pushed the pushed the price of Canadian heavy crude to US$34.64 per barrel, a level that could make producing crude from the oilsands unprofitable for most operators in the world’s third-largest crude reserve.

Many of the region’s operators have already slashed capital spending and slowed work on new projects in order to cope with the price crash, though production from the region has not yet been affected.

…… Top crude exporter Saudi Arabia revealed it had made deep cuts to its monthly oil prices for European buyers , the sixth time in a row since June when it had slashed prices, corresponding with the rout in crude futures markets over the period. Analysts read the latest cut as reflecting Saudi Arabia’s deepening defence of its market share for crude. The OPEC kingpin also trimmed its prices for U.S. refiners for a sixth straight month, while raising rates for Asia.

…… Some traders seem certain that U.S. crude will be trading in the US$40 region later in the week if weekly oil inventory numbers for the United States on Wednesday show another supply build. ……. 

Russia’s oil output hit a post-Soviet high last year, averaging 10.58 million barrels per day (bpd), up 0.7% thanks to small non-state producers, Energy Ministry data showed. Iraq’s oil exports were at their highest since 1980 in December, an oil ministry spokesman said, with record sales from the country’s southern terminals.

The Russian and Iraqi data overshadowed reports of drops in Libya’s oil output due to conflict. Libya’s oil output has fallen to around 380,000 bpd after the closure of the OPEC producer’s biggest oil port Es Sider, along with another oil port Ras Lanuf.

The sooner oil price drops to less than $40 per barrel, the sooner the oil price can stabilise for 12 – 18 months. Then, as the price works its way through the economies of the consumer countries, the markets could see a year or two of stable, sustainable growth.

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Never trust a politician who is “thinking about your children’s children”

May 13, 2014

My grandfathers died around 80 years ago. They could not have conceived of the world their grandchildren would live in and the challenges they and their world would face. They would surely have been able to recognise our behavioural characteristics but they would not have been able to imagine the society we live in. The values of current society would have been difficult for them to understand.

My father died 26 years ago. Not so very long ago. Yet he would not have been able to predict – let alone address – the kinds of challenges my children and the world they live in will face in the next 20 – 30 years. His values were those of having fought in WW2 and the hope of the 1950’s. He would not have been able to predict the pace of life and the networks maintained by my children. He could not have forecast the day-to-day problems they will face or the “big problems” their world will face over the next 50 or 60 years.

Around 100 years ago my grandfathers could not have foreseen the Second World War or the spread of easily available and affordable electrical power, or of the second industrial revolution or the digital revolution. Even if they could have foreseen the future they would have had the intelligence but not the knowledge or the technology to better address the challenges of today. In fact they would have been very stupid to have tried to forecast and then plan for their choice of problems to be faced by their grandchildren.

Our children’s children will live into the 22nd century. Any forecast I try to make of the development of technologies and knowledge and societies and values 100 years from now is going to be wrong. For the last 50 or 60 years we have lived with the perception of the problem of population rise and limitation of resources. Actions have been taken – and very successfully – to reduce the number of births, to improve food production and in finding new and alternate resources. In another 50 years populations will decline and the pressure on resources will decline further as new technologies are developed and new resources are found (who would have predicted the abundance of shale gas 50 years ago?).

We may expect that in the 22nd century, one of the major challenges will be that of population decline and aging. It will be a challenge faced and solved by the humans of a hundred years hence and it may or may not be a problem. I have no idea of what genetic and medical advances may bring or of how societies will develop and of the value systems that may prevail then. To use today’s knowledge and technologies and values to address these presumed challenges of the future is both ineffective and wasteful. These challenges – if challenges – will be faced by our children’s children using the knowledge and technology that will have become available to them.

It would have been ridiculous for my parents or my grandparents to have given up advances in their own well-being or their careers or their world – as they saw them then – for the sake of  some unknown problem that would be faced by their children’s children.

And so I am deeply suspicious of any politician or environmentalist who wants me to do something  – or not do something – against my current best interests as I see them – for the sake of my children’s children.

Our grandchildren will always be better placed to define their challenges than we can possibly forecast. They will be better equipped to solve the problems of their age with the tools and knowledge and technologies of their age. And they too would be stupid if they gave up their own well-being in order to solve a problem they choose to forecast for their children’s children.

Another meaningless Earth hour to ignore today

March 29, 2014

For the same reasons as last year, and all previous years, I shall not be turning down the heat or switching off any lights today.

Earth hour is a morally bankrupt, self-indulgent, “feel-good” gesture. It is a “cheap” and mean action. It does a disservice to humanity. It diverts attention from the real issues of development that face the world’s poor. And the availability of electric power is fundamentally necessary to this development.

Switching off power during Earth hour manifests a self-righteous and a morally bankrupt arrogance. I shall not though respond in kind by the equally arrogant gesture of  turning on all the lights in my house.

The numbers tell the tale:

The world per capita consumption of energy(in tons of oil equivalent – toe)  is about 1.85 toe in 2013 and varying from about 7 toe in the US to 0.2 in the least developed parts of the world. In Europe it is about 3.5 toe with India at about 0.5 toe and China at 0.6 toe.

World population will increase from 7 billion now and stabilise at about 10 billion by 2100. Assuming that most of the world can reach an average level of development commensurate with a total per capita energy consumption of around 3 toe, then total energy production (all sources) has to increase by a factor of 2.3 between now and 2100. There is no shortage of energy availability. Shale gas has removed even the perceived – but false – threat of that. Peak oil and peak gas have disappeared over the horizon. If the developing world is to develop, then this energy has to be consumed and will be produced.

Global warming is a mirage and Earth hour is meaningless.

India may have gone Digital but the bricks and mortar are lagging behind

September 25, 2013

India has leap-frogged into the digital age in a big way.

But the only problem (and it is a debilitating affliction) is that bricks and mortar cannot be dispensed with.  Just hopping over the steps of building up the infrastructure does not help even if mobile and wireless services are as widespread as they are.

indian farmer and mobile

indian farmer and mobile

As I noted during the dot.com boom,

You cannot eat e-food and carry your goods down an electronic highway or use an e-house to keep out the rain. Old fashioned roads and rails and bridges and buildings cannot be replaced by a virtual world.

But the mobile penetration into rural India is extremely high. There may be no good roads to reach the villages and some may have little access to electricity but they all have their mobiles phones.

India Mobile Landscape (IML) 2013 study.

…… the field survey was conducted between May and mid-July 2013 covering 109 urban centres and 196 villages in all the 28 states and 3 union territories in India.

“It (the survey) covered 80 of the 88 regions as classified by the National Sample Survey Organisation under the Ministry of Statistics and Program Implementation. The study sample represents 94.8 per cent of the Indian population and 96.1 per cent of the total Indian households,” he said. Meanwhile, as per the data revealed by sectoral regulator TRAI, there are total 87.33 crore (873.3 million) mobile subscribers in the country. Of this, 73.14 crore (731.4 million) customers were found to be active on a particular date in June. The cumulative revenue of telecom service providers was Rs 54,284 crore (542.8 million) in the January-March quarter as per TRAI data.

There are 55.48 crore (554.8 million) actual mobile users in the country and 14.32 crore (143.2 million) internet users, according to a study by research firm Juxt.

…” More than 29.8 crore, (298 million) about 54 per cent, of these device owners are in rural areas as compared to 25.6 crore (256 million) in cities and towns,” Juxt co-founder Mrutyunjay told PTI. There are total 77.39 crore (773,9 million) functional SIMs with validity but only 64.34 (643.4 million) SIMs are being used by (the) 55.48 crore (554.8 million) mobile devices owners, the study report said.

Read more at: http://ibnlive.in.com/news/india-has-5548-crore-mobile-owners-1432-crore-internet-users/420444-11.html?utm_source=ref_article

Better to build a roof than to try and stop the rain (or the sun)

June 16, 2013

Climate change is happening.

Of course it is. When was it ever not so?

It will be cooling at times and warming at others but for around 85% of all the time humans have been around we have lived in glacial conditions. Interglacials are the exceptions and not the rule. Yet humans have thrived. Not just by surviving the glacial times but by continuing to develop even during the glacials, Wasting time and energy and vast sums of money on trying to curb the emissions of carbon dioxide has been a blight on development for the last 3 decades. Just in Europe it has come at the expense of around 15 million jobs.

It essentially panders to the political and religious idea that “human development is inherently bad”. In that sense the “Green Movement” and the subsequent growth of enviro-fascism have taken the place of Marxist ideology. They have filled the vacuum left behind as the fall of Communism has spread. They didn’t begin that way. As local movements to clean up air and water and our immediate environments they performed a timely, neccessary and very useful function. But then they became ambitious. Local movements were hijacked by the marxists without a home. Former marxists in non-Communist countries needed a cause. They remained disaffected and had to find a new home. They now had to go Global. Local causes which were the strength of environmentalism were replaced by Global causes.  Global causes were manufactured by inventing impending global catastrophes. All the disaster scenarios had to have growth and development (and by inference – capitalism) as the culprit. Not in Russia or China or other former Communist countries where they were too busy becoming entrepreneurs. And so the carbon dioxide myth took hold and and fossil fuels became the whipping boy.

This interglacial will end.

Fossil fuels and their continued and increased use (and there is enough gas for at least 1000 years) will be critical for human development as and when the next glacial comes along. It is only by adapting to whatever climate change occurs  – not by trying to stop climate change – that the human condition will continue to improve.

It is better to build a roof than to try and stop the rain or the sunshine. But the global warming hierarchy will continue their posturing and their futile dances to try and control the climate.

Montreal Gazette:

Adapting to – not just fighting – climate change is taking the heat out of global warming talk

Efforts to curb global warming have quietly shifted as greenhouse gases inexorably rise.

The conversation is no longer solely about how to save the planet by cutting carbon emissions. It’s becoming more about how to save ourselves from the warming planet’s wild weather.

It was Mayor Michael Bloomberg’s announcement last week of an ambitious plan to stave off New York City’s rising seas with flood gates, levees and more that brought this transition into full focus.

After years of losing the fight against rising global emissions of heat-trapping gases, governments around the world are emphasizing what a U.N. Foundation scientific report calls “managing the unavoidable.”

It’s called adaptation and it’s about as sexy but as necessary as insurance, experts say.

It’s also a message that once was taboo among climate activists such as former Vice-President Al Gore. …… 

…. Now officials are merging efforts by emergency managers to prepare for natural disasters with those of officials focused on climate change. That greatly lessens the political debate about human-caused global warming, said University of Colorado science and disaster policy professor Roger Pielke Jr.

It also makes the issue more local than national or international.

“If you keep the discussion focused on impacts … I think it’s pretty easy to get people from all political persuasions,” said Pielke, who often has clashed with environmentalists over global warming. “It’s insurance. The good news is that we know insurance is going to pay off again.” ….. 

And even from New Zealand comes a commentary that when “even the Green Party of Aotearoa New Zealand is no longer beating the drum. That’s when you know the cause is dead”.

National Business Review:

Global warming ends with a whimper

It’s a good news column today: the Green Party of Aotearoa New Zealand has seriously down-rated the worry about global warming. That’s one less thing that need make us miserable.

The down rating is huge. Green co-leader Russel Norman in his speech to this month’s annual conference never once mentioned global warming. He busied himself instead taking potshots at John Key and the late Sir Robert Muldoon.

The Green Party did have a climate change conference the following week but Mr Norman’s keynote speech lacked any of the usual end-of-world prophecy and knee-jerk call to de-industrialise. His concern was the pedestrian one that New Zealand is failing to meet its international obligations.

There was no hellfire and no brimstone.

When Jeanette Fitzsimons was co-leader global warming was the greatest-ever threat to the planet. It dwarfed all other environmental worries. It was the granddaddy of them all. Global warming threatened to destroy the biosphere and Ms Fitzsimons was forever calling an urgent and radical reduction in the burning of fossil fuels. …… 

….. But the shift on global warming with the Greens is significant. We are safe in concluding that they no longer regard global warming as the greatest threat to the planet. It would, I think, merit a mention in a leader’s annual speech to the Greens if it were. A fast-approaching environmental armageddon would be top of mind, not the constitutionality of parliamentary legislation, and not Peter Dunne’s emails.

So, hallelujah. The polar bears can continue to float about on their ice floes, millions of environmental refugees won’t wash up on our shores, malaria won’t be making an unwanted appearance in New Zealand any time soon, our beachfront properties are safe and there is no need to feel guilty driving past that bus stop.

It was always going to end with a whimper, not a bang. The scare was so big, so dominating, so accepted, that it could not be sustained. Unless, of course, it was true. It’s now not possible to maintain the huff and puff that the media and politics need to keep the headlines running. …..

……. They have been the first to shut up about it. The argument is no longer that global warming has “paused” for 17 years but rather that even the Green Party of Aotearoa New Zealand is no longer beating the drum. That’s when you know the cause is dead.

After all, Mr Norman was still backing Marxism-Leninism long after Mikhail Gorbachev had given up on it. 

 

The Luddite shades of Green

August 5, 2012

 

The Leader of the Luddites, engraving of 1812: Wikipedia

This editorial in The Australian about shale gas got me to wondering how it has come to pass that what were once very laudable anti-pollution goals have morphed  into an anti-technology and essentially anti-human movement. Luddites have always been among us and always need – and have always needed – a cloak of righteousness under which to operate. The current demonisation of technological advance has its roots – I think – in the politicisation of the concern for “the environment” which probably began in the 1960’s. As long as “environmentalism” focused on improvement of local conditions it did much good. It has contributed much to the clean-up of air and water pollution which had resulted from the speed of industrialisation. While industrialisation and technological development were necessary for growth and to ensure that humans could put food on their tables, the drive against pollution did much to improve their quality of life. But then the Luddites – who have always been around – “found” evironmentalism. The destructive forces had found a new righteous cover – this time coloured green. Politicisation and globalisation have now transformed what was once a relatively simple anti-pollution campaign focused on improving the quality of life for humans into something else – a fanatical movement with religious overtones. A coercive, destructive, backward-looking, anti-development, anti-human Green Monster.

The Green movement has become the cloak under which modern Luddites can hide and operate.

The Australian:

POLITICAL parties preoccupied with environmental protection, including the Greens, should take on board the benefits of breakthrough technology that is already allowing easier access to shale gas in the US.

As environment editor Graham Lloyd reports today, with 250 years’ worth of gas reserves now in play, the shale revolution is cutting power costs and carbon emissions and increasing energy supplies. In the longer term, it promises energy security, export earnings and stability as the West’s dependence on Middle East oil diminishes.

The unexpected emergence of shale, foreseen by very few four or five years ago, underlines the folly of governments trying to “pick winners” by investing in various forms of renewable energy, such as wind and solar power, which will only be viable on a large scale if technology improves.

Too little attention has been paid to Australia’s vast shale reserves, which are potentially far bigger than coal-seam gas. Apart from the volume of water needed to access it, shale poses fewer environmental problems than coal-seam gas. The geological formations are more stable and located in more remote areas. Given the reluctance of our politicians to pursue nuclear power, shale has the potential to be an important energy source for decades.

OED:

Luddite – In modern usage, “Luddite” is a term describing those opposed to industrialisation, automation, computerisation or new technologies in general

Greenie – a person who campaigns for protection of the environment

the environment – the surroundings or conditions in which a person, animal, or plant lives or operates; the natural world, as a whole or in a particular geographical area, especially as affected by human activity

 

Is Greenpeace fabricating data?

September 28, 2010

In July this year Greenpeace trumpeted

rain forest

“A new investigative report from Greenpeace, ‘How Sinar Mas is Pulping the Planet’, shows how major brands like Walmart, Auchan and Kentucky Fried Chicken (KFC) are fueling climate change and pushing Sumatran tigers and orang-utans towards the brink of extinction. These companies are using or selling paper made from Asia Pulp and Paper (APP), part of the notorious Sinar Mas group that is destroying Indonesia’s rainforests and carbon-rich peatlands.”

The Jakarta Globe reports

Sinar Mas commissioned an independent audit which has now accused Greenpeace of “false and misleading information to attack a company’s credibility”. International Trade Strategies Global (ITS) conducted a peer-review on Greenpeace’s report, “How Sinar Mas is Pulping the Planet.”

“The evidence shows that Greenpeace provided quotes that don’t exist, maps that show concessions that don’t exist, and used source material with high margins of error that was cited as absolute fact,” said Alan Oxley, chief executive office of the Melbourne-based ITS Global on the press release.

Oxley said the Greenpeace report was highly misleading and indefensible. In addition, the audit stated that a map in the Greenpeace report shows four concessions which don’t exist. “Sadly this is not an isolated incident. Greenpeace has exaggerated claims in the past.  When we see reports like this with such obvious factual inaccuracies it makes us call into question the real Greenpeace agenda, risking the greater good to achieve its own political ends.”

However, Bustar Maitar, lead forest campaigner for Greenpeace Indonesia, dismissed ITS’s report, saying it was biased. “If they claim it’s an independent report, it’s a joke because Alan Oxley is speaking as an APP representative,” he said.

“We don’t want to be poor any more” – but the WWF is not listening

September 26, 2010

Laos says it rejects calls for a dam moratorium on the Mekong River because it wants cheap power to develop its economy despite threats to fish habitats. The Southeast Asian nation moved this week to secure regional approval for the first major hydropower plant on its stretch of the lower Mekong in the face of protests from international conservation groups. The Sayaboury dam is to be built across a part of the Mekong that flows through Laos.

Mekong and its main tributaries.

Wikipedia: Mekong and tributaries

The backers of the 1260 MW Sayaboury Hydro project include the World Bank and the Electricity Generating Authority of Thailand (EGAT), a state utility that signed an agreement in Laos in June to buy power once the new dam’s turbines come to life. The BBC reports that the World Bank would provide loans and guarantees for the $1.2bn project. The decision comes after nearly 10 years of discussions with the Laos government.

Laos is a poor, landlocked country which has few viable industries. But it does have plenty of mountains and rivers, and that is why it is pinning its hopes for the future on hydroelectric power. Nam Theun 2 is the country’s largest dam project, on a tributary of the mighty Mekong. It is designed to produce electricity for export to neighbouring Thailand, earning valuable foreign currency that Laos says it will use to alleviate poverty.

“We don’t want to be poor any more,” said Viraphone Viravong, director general of the country’s energy and mines department. “If we want to grow, we need this dam.”

But needless to say the WWF and The Guardian are opposed:

Giant Catfish _Pangasianodon gigas_ ©Sut.jpg

Giant dog-eating Catfish

Catfish the length of cars and stingrays that weigh more than tigers are threatened by the proposed 800m barrier.

“This dam is the greatest challenge the Mekong River Commission has faced since it was formed. It is the most serious test of its usefulness and relevance,” said Marc Goichot, of the WWF. “It is already very clear this dam would amplify and accelerate the negative impacts of Chinese dams to the Mekong delta. What are the other impacts?”

It has taken 10 years to get this far, but WWF supports a delay in the approval of the mainstream dams, including the Sayabouly hydropower dam in Sayabouly Province, Laos — and let the poverty and misery continue.


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