Awesome wall cloud as it passed over McKinney this afternoon! There have been multiple tornados, mostly to the south of Dallas this afternoon as well...this is day three of serious weather...
Monday, April 25, 2011
The Banana Peel of Destiny
That was a cute move by President Obama last week, calling out the "oil speculators" with a memo to his Attorney General, Eric Holder. The President proved a few weeks ago, in his energy speech to the nation, that he doesn't understand how these resources are produced and traded. Consequently, the people he addressed remain clueless, but ticked off nonetheless. And the logic of politics now compels Mr. Obama to call out the dogs on... people who make money trading paper claims on oil?
Funny, he didn't show any interest the past two-plus years in people who make money swindling taxpayers via booby-trapped Collateralized Debt Obligations and Credit Default Swaps. Maybe those things sound too abstruse to get excited about - but believe me, it was a heckuva lot more money. In fact, a case could be mounted by God's attorney general - if he has one - that Mr. Obama abetted a gigantic conspiracy in fraudulent financial paper which makes the oil speculators look like shoplifters in a Kentucky WalMart.
For those of you interested in the reality side of things, here's the scoop: The price of oil is going to go way up, and way down, and way up again, and way down again until everyone is too broke to ask for any, and companies are too ruined to go get it for them, and governments are too broken to interfere in the process.
The oil speculators are normal characters in a stressed market doing what needs to be done on the margins of "price discovery." The trouble arises when price discovery occurs in turbulent times and places, for instance, when people in a part of the world called the Middle East & North Africa (MENA, for short), start rioting against their governments, which has been the case persistently for a couple of months now - a region that contains about half the world's oil reserves. So interested observers conclude there's a fair chance that oil production there might face impediments to normal operations.
And indeed that is already the case in Libya, where some of the world's lightest, creamiest, sweetest crude oil has stopped flowing into pipelines and tanker ships. With protesters being slaughtered by the score in Syria, and Yemen's president about to get a one-way ticket to Palookaville, and the Saud family cowering in their solid-gold senior housing facility, and affairs looking sketchy at best in other nations around that neighborhood, speculators at the margins have called for higher oil prices.
You will recall, perhaps, that hoary old concept, the "bumpy plateau" of the peak oil story. This was the idea that the actual tippy-top "peak" of peak oil, studied at close scale, would actually take the form of a raggedy line representing the interplay between supply, demand, and most importantly the frantic psychological response of humans operating in markets. It was clear that economies would stagger under the burden of high oil prices, and economic activity would contract, and people would use less oil and the price would go down. When prices were real low again, people would resume buying more oil (and other stuff) and economic activity would mount and oil prices would go up again. We knew this would happen for a couple-few cycles, and that then things would get... more interesting.
We also knew that this would occur with some "ratcheting side effects" - that with each cycle of up-and-down oil prices, against the background of permanent a decline in easy-to-get oil, there would be less money available to find, drill for, and produce future harder-to-get oil. What we did not know - at least in the morbid clerisies where academic economists spawn - was that the permanent decline in easy-to-get oil would introduce gross disorder into our money systems, nor that we would incessantly lie to ourselves about the health of our money systems, until their operations were so fatally compromised and impaired that their failure was likely to put us out-of-business even before worse imbalances came to pass in real oil supply and demand.
Of course, we also didn't know that MENA would explode in political unrest in early 2011, or that the earth below the Japan Trench would shudder badly, and no doubt there are other things we can't predict that will affect the global economic dynamic. But you do what you can with what you've got to work with, and here in the USA collective intelligence space, we're not doing such a great job.
Tensions keep rising around the distortions and perversions now loose in the money system. You can get a headache thinking about inflation and deflation - but either way you stand to end up broke. Either you'll be rolling in worthless money or you won't have any money. The banana peel of destiny can send you flying in either direction, or first one and then the other.
We've done a poor job of managing contraction, which is the fate of societies that have piled up too much complexity. All of our schemes for grappling with this seem to boil down to one foolish obsession: how can we keep all the cars running? We're not going to, of course, but we refuse to even think about anything else. President Obama is merely reflecting the foolish obsession of the public.
Whenever I give a talk at a meeting or a college, somebody gets up and censoriously asks we why I can't present "solutions" to the problems of contraction we face. I do of course. The audience just doesn't hear them because I don't believe it is possible to keep all the cars running and I don't pretend that any of the schemes currently circulating will avail. To go a step further, I'm convinced that we are committing cultural suicide by using all the cars the way we do, so I am not the one to look to for rescue remedies in this department. In fact, I am serenely persuaded that we would vastly improve our chances of remaining civilized if we gave up on mass motoring and deployed ourselves on the landscape differently.
By the way, that will be the eventual outcome anyway, whether we like it or not.
In the meantime, prepare for thrills and chills in the alternate universe of money. The phase of that story we're approaching looks more and more like the final scenes of the old Todd Browning horror movie about the uprising in a freak show. America can have the role of the pinhead, grinning vacantly while the other freaks burn the joint down.
Saturday, April 23, 2011
Governor Rick Perry Declares Three Days of Prayer for Rain
The situation in Texas is pretty dreadful right now, as massive fires continue to sweep across the state. The fires were made possible, at least in part, by a historic drought--every part of Texas is suffering from at least moderate drought conditions, with over 90 percent experiencing severe drought. So that might explain why Governor Rick Perry has called upon Texans to pray for rain for the next three days.
A proclamation issued by Perry's office today reads:
WHEREAS, throughout our history, both as a state and as individuals, Texans have been strengthened, assured and lifted up through prayer; it seems right and fitting that the people of Texas should join together in prayer to humbly seek an end to this devastating drought and these dangerous wildfires;
I, RICK PERRY, Governor of Texas, under the authority vested in me by the Constitution and Statutes of the State of Texas, do hereby proclaim the three-day period from Friday, April 22, 2011, to Sunday, April 24, 2011, as Days of Prayer for Rain in the State of Texas. I urge Texans of all faiths and traditions to offer prayers on that day for the healing of our land, the rebuilding of our communities and the restoration of our normal and robust way of life.
It's worth noting that a few days ago, Perry asked the federal government for help in fighting the wildfires. So it's not like a public call to prayer was his go-to here. Then again, is it the logical next step? The period he's outlining does fall between Good Friday and Easter Sunday--so it seems like if a miracle is going to take place, that would be the time for it. That may not offer solace to those troubled by the movement along the church/state line, though. We hope that rain and relief do come to Texas, however it happens.
http://news.yahoo.com/s/atlantic/20110421/pl_atlantic/governorrickperryaskstexansprayrain36925
http://news.yahoo.com/s/atlantic/20110421/pl_atlantic/governorrickperryaskstexansprayrain36925
Wednesday, April 20, 2011
Texas is burning from border to border
Wildfires, raging for more than a week in Texas, have so far burned through a million acres of land and racked up more than $8million in containment costs.
Firefighters continue to battle some 22 separate blazes throughout the state, with some dangerously close to the Oklahoma border. Homes have been gutted, animals killed and hundreds of residents have been forced to leave their homes because of the advancing flames.
One of the wildfires in PK West, Stephens County, increased in size by a staggering 87,238 acres in just 24 hours - a 144 per cent increase.
Even prisons have been emptied in some towns. The drought-stricken state, that experienced its driest March on record, is desperately hoping for the rain that has been forecast in the coming days.
Monday, April 18, 2011
Gaming Our Own Asses
A wicked vibe rattles the mental furniture in men's minds these days. Against the dreadful normality of American life - the morning traffic on I-495, the mayhem awaiting in some school cafeteria or motor vehicle office, the household awakenings to a new dawn of foreclosure here, there, and everywhere - all this ceremony of the familiar is like a stage backdrop that conceals the awful crush of history. Things are swaying and crashing outside the magic theater of the normal, where we act out our tragicomedy of "Waiting for Recovery."
I have never lived in a time when so many false narratives competed for supremacy of the collective mind-space. Omnipresent as it is, reality seems to elude us, and certainly its supposed interlocutors - figures such as presidents, his highest appointed officials, their voluble, strutting opponents in the other party, the glamorpusses behind the Cable TV news desks, poor dim Bill Keller at The New York Times, and, of course, the necromancers of economics on campuses from Cambridge to Palo Alto.
A more primitive radar would conclude that the planet Earth is angrier than usual this year. Japan is still in a radioactive daze from the seventeen inch shove it suffered and lots of people in Carolina are surely shaking their heads over this weekend's visitation of wrath. Is it possible that climate change and Jesus are one and the same? Let them figure that out in the little cinderblock roadside chapels next Sunday before they all trundle over to the Nascar track.
It was heartening at least to see a few signs of life "out there" in the karmic interstices. Senator Carl Levin of Michigan sent a memo to the Attorney General of the US - viz: something has been going on in Wall Street that merits your attention. As in most seemingly crucial turnings lately, echo answered. Can someone please check to see if Eric Holder over in the Department of Justice is leaking sawdust? He must be stuffed something. Styrofoam would just make him look lumpy. Could he be a computer graphic? Or is he just a simple slab of cardboard with a photo glued on. Perhaps Senator Levin's next memo might be in the form of a subpoena to Mr. Holder, requesting his testimony as to how many trillions of dollars were snookered, swindled, and Ponzied out of the US public for the benefit of about a thousand guys in and around lower Manhattan (with branch offices in suburban Connecticut and New Jersey). (Cue: sound of Timberwolves howling.)
Gretchen Morganson and Louise Story over at The New York Times put out a related query last week, asking how come nobody went to jail for misdeeds in the banking sector after several years of incidental revelation through things such as senate hearings, Web journalism, and a few vagrant strolls down the Maiden Lanes of the Federal Reserve's balance sheets. How did "the newspaper of record" come to wait so long to ask that question? Not even the Times's Op-Ed viziers have essayed to ask why Lloyd Blankfein is not parked in a court of law instead of a limo. Morganson and Story appeared to conclude that the web of turpitude in finance was too complex for anybody in a disciplinary role to understand, and that was that. Run up the white flag. We give up.
Last week, Eliot Spitzer called out the US attorney general, the alphabet agency regulators, and the secretary of the treasury on Anderson Cooper's nightly CNN slot. Spitzer, you will recall, the New York attorney general, then briefly governor, was discovered to have had relations with a prostitute. How unfortunate. But consider this: it was at least an honest commercial transaction. Of all the complaints lodged in the matter, none involved any failure to pay the required fees. Spitzer now has his own TV show - which is truly one of the miracles of our time (and I mean that it's a good thing). He was joined on Cooper's slot by Rolling Stone's Matt Taibbi, who has done the bravest and most truthful reporting by far on our national clusterfuck. Taibbi reported last week - one of a now-long string of pithy, revalatory articles going back a couple of years - that two bimbo wives of Morgan Stanley executives set up a hedge fund with $14 million in "walking around" money from their hubbies, and parlayed it (no doubt with help) into a $200 million-plus TALF bailout drop. Now that the story is out, will any regulators or prosecutors have a look? Nobody in the public arena has even suggested it.
Of course, I continue to marvel that the Hamptons have not been burned down by an angry mob of "99ers" marching down the Sunrise Highway. Perhaps that kind of action is yet-to-come during the summer when the Federal Reserve will have to decide to either destroy American currency, or watch the S & P sink to 200... when various sun struck nations around the Mediterranean move to stiff the banks of northern Europe... when the Tea Party ventures to prang the operations of the US government over the debt ceiling sometime in July. Meanwhile, consider how many people will get shot in Syria, Libya, Yemen, and other places around the center of the World's oil production capacity. Business may be down at Walt Disney World this coming vacation season.
To me, the outcome of all this was clear a while ago: a world made by hand. Incidentally, watch Japan lead the way, as they give up on the industrial meth trip and return to a traditional society. Readers think I'm kidding about this. We're heading there, too. The signs are unmistakable. It's not as bad you think, either. We'll become reacquainted with that fugitive experience, reality. Disillusion is not the worst thing that can happen to people. We can re-direct all the effort that we put into gaming our own asses and cast off the awful weight of pretending to be what we no longer are.
Barack Obama has waited a bit too long to change the national storyline using the authority of his high office. It's not about "growth" and "recovery." It's about managing contraction and becoming a different sort of American society. Observers of the scene have made a mistake about Obama. He's not "eloquent." He's merely respectable. Being able to speak in grammatical sentences is not the same as having anything to say. It will be a sorrowful day when he is replaced by a genuine idiot like Michele Bachman, but it will happen because he wasn't able to set the tone for his times with something like a straight story, or a memo to his chief law enforcement officer.
Wednesday, April 06, 2011
Don't forget that this weekend is the annual Art Walk in downtown McKinney...
Alison Jardine - Intermittent Light @ Laura Moore's Fine Art Gallery - Artists Reception April 9th, 7-10PM...
This year promises to be bigger than last year so you won't want to miss it!
April 9th will be a big day and night of art in McKinney. Laura Moore Fine Art Studios will feature over 20 artists on site in an outdoor art gallery on South Tennessee for the Annual All-Day ArtWalk in McKinney from 10am to 6pm. Alison Jardine's latest oil on canvas series - Intermittent Light opens with an artist's reception on Saturday, April 9th from 7pm to 10pm.
This year promises to be bigger than last year so you won't want to miss it!
Tuesday, April 05, 2011
Monday, April 04, 2011
Blowing Green Smoke
"We also have Secretary Steven Chu, my Energy Secretary. Where is Steven? There he is over there."
- President Obama at Georgetown U last week
Blame Steven Chu, then, because when it comes to America's energy predicament, the president has been woefully misinformed. Mr. Obama pawned off a roster of notions and proposals already product-tested in the public meme-o-sphere. Almost everyone of these ideas is inconsistent with reality, based on faulty premises, or represents some kind of magical thinking. What they have in common is that they're ideas the public wants to hear, whether they are truthful or not, because we don't want to change the way we live.
The central idea in Mr. Obama's speech is that we will reduce our oil imports by one-third in a decade. This is a gross distortion of reality. The truth is that our oil imports will be reduced automatically, whether we like it or not. The process is already underway. The nations that export oil to us are using much more of their own oil even while their supplies have passed peak production and entered depletion. Countries like Saudi Arabia, Venezuela, and Mexico have some of the highest population growth-rates in the world. They sell gasoline to their own people for less than a dollar a gallon. At the same time China and India are driving more cars and importing a lot more of the world's declining supply. (China has perhaps the equivalent of a four-year supply of its own oil in the ground, and India has next-to-zero oil of its own).
One meme circulating around the Web these days is that the USA has the equivalent of "three Saudi Arabias" in the shale oil fields of North Dakota, Colorado, Wyoming, and Montana. That is not true. A lot of this magical thinking focuses on the Bakken fields of Dakota. We're currently producing less than 400,000 barrels a day out of Bakken and the projected maximum ten years from now is around 800,000. We use 20 million barrels a day in the US running suburbia, Wal Mart, and the US military. By the way, Bakken shale oil requires extensive rock fracturing operations - "fracking" - which means a lot of horizontal drilling, which means a lot of steel pipe. It is not just a matter of sticking a steel straw in the ground like we did in Texas in 1932.
Note: much of the shale "oil" in other western states is not actually oil. It is kerogen, an organic precursor to oil, in effect organic polymers that have not been subjected to enough heat and pressure to turn into oil. If you want to turn it into oil, you have to cook it - which takes energy! That's after the mining operation to scoop it out of the ground. That takes energy too. Or, you can send machinery into the ground and cook it in place. That takes energy, too. We are not going to get oil out of there anytime soon - and perhaps never.
The "drill drill drill" gang is under the impression that North America has vast unexplored regions where oil is just begging to be discovered. This is not true. The New York Times reported after Obama's speech - in a disgracefully dumb story by Clifford Krauss - that the eastern Gulf of Mexico and Atlantic Coast contain 3.8 billion barrels of oil. Really? Hello! The US uses over 7 billion barrels of oil every year. Does the Arctic National Wildlife refuge contain between 4 and 11 billion barrels (US gov estimate)? Great, that averages out to about a year or so of US supply. And I'm not even against drilling there, only against the idea that it represents a meaningful "solution" to our problem.
Meanwhile, the old standby Alaskan oil fields at Prudhoe Bay are depleting so remorselessly that there may not be enough flow in a year or so to move the oil through the famous pipeline.
How about Canada's tar sands? Well, first of all, they belong to Canada, not us, unless we want to change that - and that could be politically messy. The tar sands will never produce more than 3 million barrels a day. The operations are already too huge, costly, and damaging to the northern watershed. Canada is our number one source of imported oil, but China would also like to buy Canadian oil. Are we planning to invoke the Monroe Doctrine to prevent Canada from selling its oil to parties outside the Western Hemisphere? That could be messy, too.
Mr. Obama returned to the popular theme of bio-fuels. Our initial venture into this area was the ethanol fiasco which, predictably, took more energy to make than it produced, and had disastrous effects (still does) on corn commodity prices - in effect stealing from the food supply in order to drive to the Wal Mart. The next venture will apparently be in algae. We'll discover (once again) that what works as a science project doesn't scale to run millions of cars.
Mr. Obama told the nation that we have a 100 year supply of natural gas. (The moronic Larry Kudlow of CNBC told his audience it was 300 years). Neither of them knows what he is talking about (and evidently Energy Secretary Chu doesn't either). So far, proven reserves of shale gas amount to about a 4 to 6 year US supply at current rates, and total natural gas reserves - including conventional gas, the kind that doesn't require fracking - amounts to about a 12 year supply. The idea that we are going to ramp up an entire natural gas fueling system for America's tractor-trailer trucks is an absurdity.
Ditto the notion that we are going to electrify the US auto fleet.
Here's something to chew on: we run about 250 million cars in the USA. Let's say we ramped up an electric vehicle fleet of 10 million cars - which, by the way, is a purely hypothetical and wildly optimistic number. Do you think it might be a political problem if 10 million lucky Americans get to drive electric cars while everybody else either pays through the nose for gasoline, or can't even afford to own a car anymore?
There are a few things you can state categorically about the US energy predicament and the national conversation we're having about it - including the leaders of that conversation in government, business, and the media. One is that we are blowing a lot of green smoke up our collective ass. None of these schemes is going to work as advertised. The disappointment over them will be massive and probably lead to awful political consequences.
Another is that we are ignoring the most obvious intelligent responses to this predicament, namely, shifting our focus to walkable communities and public transit, especially rebuilding the American passenger railroad system - without which, I assure you, we will be most regrettably screwed ten years from now. Mr. Obama had one throwaway line in his speech about public transit and nothing whatever about walkable neighborhoods.
The reason for this obvious idiocy is that it's all about the cars. That's all we care about in the USA, the cars. We can't get over the cars. We can't talk about anything except how we'll find magical new ways to run all the cars. This is a very tragic sort of stupidity and if we don't change our thinking about it, from the highest level on down, history is going to treat us very cruelly.
A special shout-out here to The New York Times, whose abysmal reporting on these issues, once again, is due to their reliance on a single source: the IHS-CERA group, Cambridge Energy Research Associates, the paid public relations auxiliary of the oil industry, led by that mendacious sack of shit Daniel Yergin, whore-in-chief.
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