A little perspective on the Gaza strip. Its area is 139 square miles - just a hair smaller than Portland (145 square miles). Population is about 1.5 million, almost three times Portland’s ~576,000.
Imagine Portland enduring day after day of air strikes.
An AP story reports that young Japanese think owning a car is more trouble than it’s worth, especially in a congested city where monthly parking runs as much as 30,000 yen ($330), and gas costs $3.50 a gallon (about 100 yen a liter). The trend is worrying Japan’s auto executives, who fear the nation’s love affair with the auto may be coming to an end.
The article quotes Nissan Chief Operating Officer Toshiyuki Shiga:
The changes in individuals’ values on cars came cumulatively over time. The change in young people’s attitude toward cars didn’t happen overnight. So we have to keep convincing them cars are great.”
The article reports that young people see cars as nothing more than a tool for transportation - much like a vacuum cleaner - not a reflection of their identity, tastes or income level. In Japan’s cities, where streets are clogged but trains are efficient, cars aren’t a necessary or even very useful tool.
This heretical attitude from 28-year old Yutaka Makino should make mad men everywhere shudder:
I don’t believe that having more things enriches you. If you stay happy in your soul then you can be happy without money.
One approach to energy efficiency in buildings is to apply new energy efficiency standards like the Leadership in Environmental and Energy Design (LEED) standard to design homes with better insulation and high-efficiency appliances and to use alternative sources of power, like solar panels and wind turbines.
The Passivhaus Institut in Darmstadt, Germany is taking a different approach: build a house that can provide all the heat and hot water needed from the amount of energy required to run a hair dryer. Using ultrathick insulation and complex doors and windows, homes are encased in an airtight shell so that barely any heat escapes and barely any cold seeps in. That allows a passive house to be warmed not only by the sun, but also by the heat from appliances and even from occupants’ bodies. The goal is to create a warm house without energy demand. That goal is being achieved, and cheaply - a passive house costs only 5-7% more than a conventional house.
Site selection is important because a successful passive house relies on the sun for solar gain. If passive houses were to spread to the U.S., we would have to rethink our relationship to space - passive-house mansions may be oxymoronic. Compact shapes are simpler to seal, while sprawling homes are difficult to insulate and heat. Most passive houses allow about 500 square feet per person, a comfortable though not expansive living space. People who want thousands of square feet per person should look for another design.
Earlier attempts at creating sealed solar-heated homes ran into problems with stagnant air and mold. But new passive houses solve those problems with a heat-exchanging ventilation system. The warm air going out passes side by side with clean, cold air coming in, exchanging heat with 90% efficiency.
The NY Times reports that there are now an estimated 15,000 passive houses around the world, the vast majority built in the past few years in German-speaking countries or Scandinavia. The industry is thriving in Germany, where components are now being mass-produced and even schools are being built using the techniques.
The European Commission is promoting passive-house building, and the European Parliament has proposed that new buildings meet passive-house standards by 2011.
Achieving massive energy efficiency improvements in the US building infrastructure is key to cutting energy use enough to make coal-fired electricity plants unnecessary and to the feasibility of meeting U.S. electricity needs entirely from renewable sources. Architecture 2030 has put forth a stimulus plan that would jump-start a U.S. energy-efficiency renovation industry while saving money and slashing greenhouse gas emissions.
It’s not at all clear from the briefing material that less overall energy use is the primary objective. Hitting efficiency targets and using “green” energy are the metrics, which doesn’t really get directly at the Passivhaus objective of slashing overall energy needs. The tool to encourage residential buildings is a requirement that to get a GSE mortgage homeowners would have to renovate to meet energy efficiency standards. The amount of the mortgage is increased to cover the cost of the renovations, and Interest rates are subsidized - the greater the efficiency achieved, the greater the interest rate subsidy (new homes get similar subsidies). The lever for commercial buildings is vastly accelerated depreciation.
Can either of these stimuli actually work in the present economic environment, where both the residential and commercial real estate markets are glutted and moribund and neither homeowners nor businesses have the resources or the incentive to invest more money in buildings?
There’s a really great post at newworldeconomics.com pointing out the obvious: life used to be without cars - and it was pretty swell. Most of the cities and civilizations of the world were developed without cars. In fact, there really hasn’t been much in the way of cities and civilizations built since cars became common.
Even many Americans have experienced life without cars.
Life Without Cars (I’ve done it) is actually a lot of fun. There is no hardship or privation involved. It’s cheaper, too, which means everyone can play. Probably the closest many Americans have come to a Life Without Cars is the time they may have spent at a residential university. The university campus is about the best example of a no-car-needed environment you’ll find in the U.S. these days. And wasn’t it fun?
There are lots of great photos, of beautifully dresses people in beautiful places. Unfortunately the site isn’t friendly to their reproduction. But here’s something similar from our travels in Prague:
Prague, city square
Once you get the cars out of the picture, architecture - and life - tends to be a lot more interesting.
World demand for oil will end the year at an average of 85.83 million barrels per day (bpd), a year-on-year decline of 700,000 bpd, according to figures from Organization of Petroleum Exporting Countries (Opec).
Japanese crude imports crashed, falling 17% to 3.71 million barrels a day last month. South Korean imports also declined, dropping 12.4% in November.
China’s exports fell for the first time in seven years in November. Imports - including oil imports - plunged and output contracted by a record.
The EIA projects that total U.S. petroleum products consumption in 2008 will fall by 1.2 million bbl/d, or 5.8%, from the 2007 average, and that crude imports will fall by 2.7%. The trend is projected to continue in 2009, with consumption falling by another 1% and imports by 6.1%.
Japan is the world’s third-biggest oil importer after the U.S. and Germany, according to the U.S. Energy Department. South Korea is the fifth-biggest importer.
Bill McKibben reports from Poznan that we’ve been pretending that the process to do something about global warming is working. The real problem with the process is that’s no longer consistent with the science of global warming.
These interminable talks are designed to build a machine that would halt the atmospheric concentration of carbon dioxide somewhere in the neighborhood of 450 to 550 parts per million. They’re so loaded with loopholes, and the timetables are so slow, that they probably wouldn’t accomplish even that, but that’s the goal. The theory is that the world we need is a 450 world, based on the science from five and 10 and 15 years ago. But a year ago, our leading scientific authority on climate change, NASA’s James Hansen, said that was wrong. All the data that he and his team assembled suggested that 350 parts per million was the maximum possible if we wished to keep “a planet similar to that on which civilization developed, and to which life on earth is adapted.” They pointed to not just the Arctic melt, but the shocking thaw of sub-tropical glaciers, the shifting of monsoonal rain patterns, and the rapidly developing fear that Greenland and the West Antarctic could raise sea levels much more quickly than we’d previously imagined. They said — in the context of these talks — that the sun does not in fact revolve around the Earth.
As McKibben puts it, we’ve been engaged in saving the treaty, not saving the world. We need to save the world. Meanwhile, the talks drag on, increasingly irrelevant.
The only course of action left is to change the political reality.
Both Hansen, the leading scientific authority on climate change, and Gore, the leading political voice, have endorsed the idea of 350 as the only rational target. They’ve said the world circles the sun. Now we have to proceed on that understanding. It won’t be easy - “political reality” says it’s impossible. But political reality is easier to change than scientific reality. Since we can’t change the laws of physics, we’re going to have to try and change the laws of man.
The spinners are working overtime:
Europe secured the world’s broadest agreement yet to battle global warming on Friday after helping east European states pay for changes that will punish their heavily polluting power sectors and industries.
The Reuters article quotes French President Nicolas Sarkozy:
This is quite historic. You will not find another continent in this world that has given itself such binding rules.
The sad truth is, the whole package was decided based more on the self-interests of industry than on the need to actually reduce emissions and save the planet.
On a lighter note, NGOs made fun of President Sarkozy’s “impotent package.”
Warning that the survival of human civilization is at risk, Al Gore exhorted delegates at the international climate to overcome the paralysis that has prevented us from acting and focus clearly and unblinkingly on the climate crisis - and to aim for a new target of 350 parts per million co2.
Even a goal of 450 parts per million, which seems so difficult today, is inadequate. [We] need to toughen that goal to 350 parts per million.
Gore said that old targets for fighting global warming have been made obsolete by new science.
For the science behind the 350 ppm target see the study by Hansen et al, “Target Atmospheric CO2: Where Should Humanity Aim?” in The Open Atmospheric Science Journal.
“The international system—as constructed following the Second World War—will be almost unrecognizable by 2025 owing to the rise of emerging powers, a globalizing economy, an historic transfer of relative wealth and economic power from West to East, and the growing influence of nonstate actors.”
Thus begins Global Trends 2025: A Transformed World, the fourth installment in the National Intelligence Council-led effort to identify key drivers and developments likely to shape world events a decade or more in the future.
Gone is the hubris of the last assessment done just four years ago, which predicted that the U.S. would continue to dominate a world and a global economy growing exponentially, becoming 80% larger by 2020 with average per capita income 50% higher than in 2000.
Now, while the report’s authors “do not believe that we are headed toward a complete breakdown of the international system, as occurred in 1914-1918 when an earlier phase of globalization came to a halt,” they see “the next 20 years of transition to a new system” as being “fraught with risks.” Global warming will be felt, and water, food and energy constraints may fuel conflict over resources. The current financial crisis as “just the first phase of a global economic reordering,” and the U.S. dollar’s role as the world’s major currency will weaken to become a “first among equals.”
The overall theme of the report is that the United States will have less influence across the globe at a time of growing climate, water and energy stresses. A future of unrelenting growth and progress has become “a story with no clear outcome” - in just four short years.
Now that is progress.
From Zawya, a source for news from the Middle East:
“The global financial crisis is poised to cut a swathe through projects throughout the Gulf. Plunging costs for raw materials and the expectation of further slides are prompting Gulf project sponsors with an eye to making major savings to reschedule bidding dates on lump sum turnkey (LSTK) projects. Even state-owned Saudi Aramco, with its strong track record on delivery times, has postponed bid dates on at least two of its flagship downstream projects.
We have previously reported on the impact that the financial crisis is having on energy investment, including oil, and argued that the financial crisis will likely be found to have precipitated peak oil.
But now there’s an additional reason for postponing projects: deflation. The costs of the projects are expected to be substantially less a year from now than today, so projects are being postponed awaiting the expected fall in costs.
Of course, the “extremely bad short-to-medium term prospects for petrochemicals globally” is also a consideration. The article also cites “delays . . . aimed at giving developers more time to put together financing given the difficulties in the banking sector.” But the fall in contractor and materials prices is a new wrinkle.
A couple of weeks ago I mentioned in this post a new study titled “Target Atmospheric CO2: Where Should Humanity Aim?” by James Hansen and several other leading climate scientists, now available at the free-access Open Atmospheric Sciences Journal.
The authors assert that to maintain a planet similar to that on which civilization developed, an optimum CO2 level would be less than 350 ppm — a dramatic change from the existing consensus view that the danger level for CO2 is 450 ppm or higher. Atmospheric CO2 is currently 385 parts per million (ppm) and is increasing by about 2 ppm each year from the burning of fossil fuels and land use change such as the clearing of forests.
Improved data on the Earth’s climate history and ongoing observations of change, especially in the polar regions, allow scientists to compare how the Earth responded to past changes of CO2 with more recent patterns of climate changes. The results suggest that atmospheric CO2 has already entered a danger zone. For example, we have already reached CO2 levels that compromise the stability of the polar ice sheets.
According to the study, coal is the largest source of atmospheric CO2 and the one that would be most practical to eliminate. The authors argue that the only realistic way to sharply curtail CO22 is captured and sequestered emissions is phase out coal use except where CO2 is captured and sequestered.
While scientists are warning that the goal of 450 ppm is inadequate, international agencies are whining that 450 ppm is unachievable. Next week the IEA will issue a report saying limiting global warming to no more than 2 degrees Celsius is not “technically achievable” and we simply have to prepare to live with the consequences. The Executive Summary of the report has been released; the discussion of the “stabilization goal” is found at pp. 47-48. (This is the same IEA report that contains the stunning finding that the “natural rate” of post-peak oil field depletion is 9%, as I discussed here.)
Why does the IEA think limiting atmospheric CO2 to even 450 ppm is impossible? Because we would have to leave “stranded assets” - meaning we’d have to abandon coal-fired power plants “prematurely.”
“It will be necessary to face up to the reality of the cost of early capital retirement if radical measures are to be taken . . . to deliver deep cuts in emissions.”
But the IEA concludes that facing up to reality simply isn’t “technologically achievable”. Mon dieu!
Shutting down coal-fired power plants, locking the doors, and throwing away the keys doesn’t sound “technologically unachievable” to me. Of course, that means we might have to change our ways a bit . . .
Nah, never mind. As president-elect Obama says, what we really need is to “restore growth and prosperity”.
Screw Earth. We don’t need her.
This piece by Gristmill’s Tom Philpott, reporting on a presentation by Vandana Shiva at an international “slow food” conference in Terra Madre, Italy, shouldn’t be missed.
Shiva’s message was that the “solutions” to global warming put forth so far are nothing but desperate attempts to rejigger industrial economies, to make them “carbon-free.”
Philpott reports:
“She said climate treaties and discussions take place in the stratosphere - in congressional committees, exclusive global confabs peopled by CEOs of vast business empires, etc. She said these people operate under an industrial paradigm, and the solutions they concoct to climate change - cap-and-trade mechanisms, GMO seeds, etc. - mimic and don’t challenge that paradigm. But in the end, these attempts get nowhere. Real reform, Shiva insisted, will happen when discussions move from the stratosphere to the soil, and when we find new, non-industrial ways of thinking.”
Philpott contrasts Shiva’s position with that of our most “progressive” thinkers:
“Where Gore dreams of a “low-carbon” or even “carbon-free” world, Shiva pines for a “carbon-rich” future — one in which agriculture systematically builds organic matter into the soil, capturing it from the atmosphere.”
Shiva pointed out that small-scale agriculture is actually more productive than industrial agriculture.
“Shiva forcefully made the point that mixed-crop agriculture that relies on compost is actually many times more productive on a per-acre basis than industrial monoculture. She also noted that locally adapted agriculture is not a fixed, static thing - it evolves and responds to changes in the land and climate.”
Philpott adds that only by blithely ignoring agriculture’s role in climate change can people present abominable ideas like government-mandated ethanol and biodiesel as “solutions” to the climate crisis.
The industrial paradigm is the cause of both our energy and climate problems. More of the same cannot be the solution.
The six nations that make up the Gulf Cooperation Council (GCC) - Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates - have profited handsomely over the last several decades, trading oil for dollars. The wealth held by GCC millionaires is projected to shoot up by more than 50% to around $3.8 trillion by 2012.
How much of this “wealth” is illusory? How much of it has disappeared, how much of it will disappear in the ongoing global financial collapse? Keep in mind: the bundling of consumer loans and home mortgages into packages of securities - a process known as securitization - was the biggest U.S. export business of the 21st century. More than $27 trillion of these securities have been sold since 2001, toxic junk that infected financial systems around the world. These are now blowing up. Who knows what they’ll ultimately prove to be worth.
Global shipping has collapsed. From Bloomberg.com:
“The 90 percent tumble in the global benchmark for commodity shipping costs since May exceeded the Dow Jones Industrial Average’s plunge during the Great Depression, signaling globalization is “the biggest bubble of them all.”"
This chart is from Dry Ships Inc. Daily Market Report:
The freeze in money markets has crushed traders’ ability to buy cargo on credit.
OPEC has cut production targets by 1.5 million barrels a day from the existing quota for 11 members of 28.8 million barrels a day. The announcement failed to stem the fall in oil prices.
Oil prices are falling in the face of the fact that demand for oil continues to grow, despite prices that remain substantially higher than a year ago and the spreading global economic collapse. While the International Energy Agency projects demand among industrialized nations to fall 2.2% this year, overall world demand growth is projected to grow by 0.5%.
Demand for transportation fuels in the U.S. continued to fall in August. The Dept of Transportation’s Traffic Volume Trends reports:
“Travel on all roads and streets changed by -5.6% (-15.0 billion vehicle miles) for August 2008 as compared with August 2007. Travel for the month is estimated to be 253.7 billion vehicle miles.”
Calculated Risk has put up this graph showing the annual change in the rolling 12 month average of U.S. vehicles miles driven. The rolling 12 month average is used to remove seasonality.
The decline in miles driven we’ve seen up to now is worse than during the early ’70s oil crisis - and almost as bad as the 1979-1980 decline.
The combination of the financial crisis and falling prices continues to impact production plans. Environmental Capital reports that two big Canadian oil-sands producers - Suncor and Petro-Canada - are delaying oil-production projects and scaling back capital expenditure and have pushed back plans to install “upgraders” that can turn tar sands into crude oil. Deutsche Bank said “we are close to the long run marginal cost of supply,” or the point at which tricky new oil-production projects don’t make sense anymore.
Tom Whipple at the Falls Church News-Press (also at The Energy Bulletin) opines that the financial crisis has precipitated the peaking of global oil supplies:
A new study by Chinese researchers China’s emissions will tower over all others’ much sooner and higher than previously thought.
By 2020, China’s burning of fossil fuels could annually emit carbon dioxide equal in mass to 2.5 billion metric tonnes of pure carbon and up to 2.9 billion tonnes, depending on varying scenarios for development and technology, the new report states. By 2030, those annual emissions may reach 3.1 billion tonnes a year and up to 4.0 billion tonnes.
That compares with global carbon emissions of about 8.5 billion tonnes in 2007. Emissions are also often estimated in tonnes of Co2, which weighs 3.67 times as much as carbon alone.
The think-tank report does not give its own estimate of China’s current Co2 emissions, but cites data from a US Department of Energy institute that put them at 1.4 billion tonnes of carbon in 2004.
“The United States is solely to be blamed for the financial crisis. They are the cause for the crisis, and it is not Europe and it is not the Federal Republic of Germany.” Peer Steinbrück, German finance minister
In a piece I wrote last week I argued that the current global financial crisis was the beginning of the unwinding of the global financial system that was imposed after President Nixon in August 1971 unilaterally scuttled the post-WWII Breton Woods system by abandoning the gold standard. Confirming evidence continues to mount.
European leaders met with President Bush over the weekend at Camp David and emerged calling for global financial regulatory reforms. The statement issued Saturday by Bush, French President Nicolas Sarkozy, and European Union Commission President José Manuel Barroso will kick off with a summit hosted by Bush sometime after Nov. 4 and is expected to stretch into next year and a new American administration. The initial summit is expected to be a kind of expanded Group of Eight meeting, assembling the leaders of the most industrialized nations and those of major developing economies like China, India, Brazil, and South Korea.
What might emerge from the discussions is uncertain. European leaders are calling for reforms and regulation - and even more boldly, for a “new global financial order.” Bush is holding out against anything that would restrict the flow of trade and investment or set a path toward protectionism. I think it’s clear that what will emerge is a structure that begins to reflect the reality of the decline in U.S. wealth, power, and influence.
A little background is useful. In 1974, the U.S. cut a deal with Saudi Arabia: the kingdom would accept only U.S. dollars for crude oil. These petrodollars would then be used to purchase U.S. assets, including Treasury securities. This was Bretton Woods 2 the world’s economy runs on oil, and as long as all the oil producing nations demanded dollars for their crude then American dollars were in reality backed by oil.
In exchange for this cooperation the US agreed to provide military protection and secret arms sales along with massive economic development in the kingdom. The rest of OPEC followed. The Saudis sank billions into the US bond market and the bulk of all OPEC revenues were invested abroad in stocks, bonds, real estate and other capital markets.
Breton Wood 2 allowed the U.S. to prosper - for a while - despite, as this chart from the NY Times shows, a deepening trade deficit.
Richard Vodra at ASOP-USA offers a down-to-earth explanation of how the current financial crisis unfolded:
“The US balance of payments deficit has grown rapidly during this decade, and one of the big drivers of that has been the rising cost of imported oil and other petroleum products. In 2002 we spent $102 billion importing oil, but that figure rose to $300 billion in 2006 and to $328 billion last year. Those imports (along with Jim Kunstler’s salad shooters and all the other things we buy) had to be financed, to the tune of $2 billion a day by last year. We convinced the Chinese, Japanese, and many others that our MBS were safe because they were sorta guaranteed (wink, wink) by Freddie Mac and Fannie Mae. We needed the oil, so we needed product to sell to finance our “addiction.” Our suppliers wanted bonds, the government deficit wasn’t large enough, so we created an endless supply of MBS to sell. Nobody – the government, the American people, the Wall Street crowd, mortgage brokers, home builders – wanted to take away the punch bowl, or look too closely at what was being produced. Rising oil import volumes multiplied by rising prices contributed to the crisis we are now experiencing.”
Nouriel Roubini - who proved to be prescient about the current financial crisis - argued in a 2005 paper co-authored with Brad Setser that the risk of Breton Woods 2 unraveling was high. The consequence would be an enormous destruction of wealth, proving that wealth to have been illusory:
“Central bank balance sheets are increasingly exposed to large losses from their holdings of dollars. These losses are likely to be very large – a 33% renminbi appreciation currently implies a capital loss equal to 10% of China’s GDP. More importantly, the longer the end of the Bretton Woods 2 system is postponed, the larger the losses. China’s capital loss could easily exceed 20% of its GDP by 2008. . .
“The institutional infrastructure behind the “Bretton Woods 2” system is too weak to support the pace of dollar reserve accumulation required to sustain the system. The country providing the system’s anchor currency – the US – is unfettered by any institutional commitment to protect the value of the world’s dollar reserves: it is formally free to pursue policies that increase its demand for reserve financing. . .
“The easiest prediction is always that current trends will continue: the world’s central banks will continue to add $450-500 billion to their dollar reserves every year, and in the process, provide most of the financing needed for the US to continue to run large current account deficits. Imbalances can last so long as they are financed. So long as private investors holding dollar-denominated assets expect the US current account deficit will be financed, they seem willing to hold on to their existing dollar claims, though perhaps not to add to their exposure as fast as the world’s central banks.
“But assuming that massive reserve accumulation will continue requires overlooking growing signs that this system is under stress. . .
“The basic outlines of a hard landing are easy to envision: a sharp fall in the value of the US dollar, a rapid increase in US long-term interest rates and a sharp fall in the price of a range of risk assets including equities and housing. The asset price adjustment would lead to a severe slowdown in the US, and the fall in US imports associated with the US slowdown and the dollar’s fall would lead to a global severe economic slowdown, if not an outright recession.”
The “assets” now undergoing “asset price adjustment” include the myriad of opaque and complex financial products peddled as investments to holders of the excess dollars sloshing around the global financial system.
Here are a few good bets. “Massive reserve accumulation” will not continue. Oil producers - after being badly burnt - will become less willing to exchange oil for fiat dollars or to invest in U.S. financial instruments. Countries exporting goods will be more wary of exchanging real stuff for fiat dollars or of investing their earnings in U.S. financial instruments. Whatever global financial system emerges will reflect the decline in U.S. real wealth. The U.S. will have to learn to live within its means. The days of our consuming 25% of the world’s (declining) supplies of oil are numbered.
As Devilstower points out at Daily Kos, the world is looking for a less dollar-centric alternative to our current fiscal system - and is not begging for our permission. He states what is becoming more and more obvious:
“We will no longer be the masters of our own economic ship.”
Last week I wrote a post arguing that one unforeseen and counterintuitive consequence of the global financial crisis was to bring about the “peaking” of global oil production. But it’s important to realize that the financial crisis has its roots in the oil crisis. The purpose of complex global financial system that grew up after the first oil crisis was to recycle petrodollars. The genie’s now out of the bottle.
More and more evidence is showing up confirming that the global financial and economic crisis is crippling energy investment. Even as global demand for oil is still growing, investment in oil production and refining infrastructure is being hit hard.
Rigzone reports:
“Big oil-producing countries are showing signs of distress as the global credit crunch and falling crude prices begin to squeeze government budgets and delay projects.
One response by oil producers to such “distress” is to cut production - a response that now is clearly on the table.
“The global credit crunch has seen the number of international banks lending to the power and water sector decline . . .
“A study released by Bernstein Research of New York this week argues that oil prices will remain linked to the cost of producing supplies from difficult but crucial fields deep offshore and elsewhere, a cost the research firm puts at between $75 and $80 a barrel. By 2012, the firm said, that cost likely will have jumped to $105 a barrel.”
It’s beginning to look like natural gas could be similarly affected.
The situation confronting Chesapeake - our largest natural gas producer and rig operator - is illustrative. The company’s stock, like that of most energy companies, has been in free fall. Nate Hagens at The Oil Drum reports that Chesapeake has announced further reductions in capital exploration budgets going forward - which means lower natural gas production and thus higher prices in the future.
U.S. gas futures dropped to $6.65 last week, plunging 50% since the end of June. What are the consequences of falling prices? Says Joseph Allman of JPMorgan Chase & Co. in New York (which is the biggest counterparty to Chesapeake’s “knockout swap” contracts, deals which don’t obligate the buyers to take gas when prices drop to $6.28 per thousand cubic feet):
“[I]f gas falls to $6 per thousand cubic feet, Chesapeake would have to sell $3.5 billion of assets.”
Hagens asks:
“[T]he marginal cost of natural gas is over $8 per MCF, and the average cost being close to $6 in North America. Natural gas is on average getting more expensive to procure. Now that capital is less available, we are going to see more and more production cuts. We need to analyze what it really means - 5% drop? 15% drop?
LNG projects are among the casualties. Projects in the pipeline - and new projects - are being shelved or delayed. Bloomberg quotes energy analyst Stuart Baker:
“All these big LNG projects, they all need external financing, debt and equity, and that’s going to be tough. Historically the industry had just assumed oil prices would hang in and the money would flood in. Well the game has just changed in the past two weeks.”
Alternative energy isn’t escaping the effects of the financial crisis, either. The international credit crunch coupled with falling oil prices is squeezing investment.
An article in the (Houston) Chron.com quotes energy expert Dan Pickering:
“[L]ower oil prices make it harder to justify investment. . . capital for new ventures is tough to get despite the sector’s political popularity.”
How do you move stuff around when you don’t have a car - or when there’s no longer gasoline?
When we lived carless in the south of France, we did our shopping by bicycle, peddling to the village or to the nearest large town with a big basket perched on the rear fender. We’d peddle back with the basket stuffed to overflowing, with bags of potatoes and onions hanging from each side. Violà - a cargo bike!
A cargo bike is a generic term for any bicycle that is designed to carry ’stuff,’ whether it has two wheels or three. In Denmark, the three-wheeled cargo bike is the vehicle of choice for moving things about.
Amazingly, only about 40% of Copenhageners own cars, even though this is the capital city of one of the richest countries in the world. People can get along without them - there’s great infrastructure in place for bicycles and a good public transport system.
In Berlin, which has a great public transportation with the elevated S-Bahn, the underground U-Bahn, and a comprehensive bus system, 50% of the people do not own a vehicle.
Schematic map
click to view image
Illegal logging has sharply accelerated destruction of the Amazon - and the biggest culprit is the Brazilian government.
Official data from satellite photos showed that deforestation jumped 228% in August when compared to the same month a year ago. And the reality is almost certainly worse. No information was available for approximately 26 percent of the Amazon because of cloud cover during the month.
The worst-hit regions belonged to the Institute of Colonization and Agrarian Reform, or Incra, a state agency which distributes land, ostensibly to the poor.
Incra officials, along with vote-chasing mayors and other politicians in the Amazon, are accused of turning a blind eye to the tree-felling by peasants, big landowners and logging companies.
Upcoming elections aggravated the trend, as “the appetite of authorities to enforce laws is reduced,” according to the environment minister. Also blamed is expanded agricultural activity and land theft through the falsification of property titles.
The dramatic global food price increases also play a role, encouraging cattle ranchers and soy farmers to push deeper into the forest and clear land.
The Amazon rainforest is vital to global climate stability, as it stores vast amounts of carbon. Duke ecologist John Terborgh in The New York Review of Books explains how piecemeal deforestation leads to feedback loops that will eventually destroy the rainforest:
Oregon's Statewide Planning Goal 1 - Citizen Involvement:
"To develop a citizen involvement program that insures the opportunity for citizens to be involved in all phases of the planning process."
