Thursday, December 11, 2014

Gimme That Old Time Religion.

      One of the religions practiced all over the Middle East in Old Testament times was the worship of Baal and Astarte.  Together, they were fertility symbols;  Baal, whose symbol was the bull, represented male sexuality, and Astarte, whose symbol was a bare breasted woman holding a snake, represented female sexuality.  It was known that this cult was ancient, and may have started with agriculture---or did it?   I just finished watching the DVD of "The Cave of Forgotten Dreams."   This is a photo tour Chauet Cave,  a Cro-Magon cave discovered only in the 1990s, which contains the oldest cave paintings ever found.  Mostly, they are beautiful paintings of Ice Age animals.  If you have not seen this film, by all means, rent the DVD. But at one place in the cave is a figure of a nude human female--the only human depicted anywhere in the cave---shown alongside a bull bison.  And these paintings were made 32,000 years ago.   Was the cult of Baal and Astarte Europe's original religion?  Makes you wonder.

"Shareholder Value" in Ruining Country.

An interesting op-ed piece in the Wall Street Journal by William Galston, claims that the demand for short term profit by Wall Street investors is ruining American companies, and ruining the country.  When investors continually demand maximum short term profits, it prevents management from making the kind of low profit but necessary long-term investments that keep a company competitive in the long term.  Investment in things like expensive new plant and equipment, which might take twenty years to pay for itself, and training and re-training of the work force, can lower short term profits, but are essential for long term competitiveness and even for survival. Ploughing money back into the host community by helping with school programs and other infrastructure can also help the long term survival of a company.   When demand for continual short term profit prevents a company from making this kind of investment, it not only ruins the company, it ruins the country.

Sunday, November 30, 2014

Defining Sexual Attractiveness

            Yesterday, I was involved in a discussion on Facebook  about whether women wear high heeled shoes because it makes them look sexier to men, or because they think that men think it makes them look sexier, or because the media has convinced them it makes them look sexier, or whatever.  We did not reach any definite conclusions, yet I began to reflect on just what characteristics make humans appear more attractive to the opposite sex--and why.  I concluded that though much of what drives our choices in seeking mates is cultural, even after we strip away the cultural biases and fads, there are a few evolved core biological preferences in mate selection. And the genes that drive these preferences have a single algorhythm---grandchildren.
              When a lovesick 15 year old boy thinks he has fallen in love and experiences the surge of all the various neurotransmitters and hormones which  define that state, I'm sure that the prospect of grandchildren is not exactly what's on his mind.  His fantasies are likely to be a bit further up the chain of causality.  And yet, the genes that come into play here are going about the job of insuring their own replication in distant progeny,  at least two generations out.  I will not anthropomorphize them by saying that these genes are "scheming and plotting" to make the boy a grandfather---genes don't plot anything---they just code for protein.  But if allowed to play out their coding scenario, these genes have evolved precisely to enhance the probability that he will indeed achieve grandfatherhood.
             Why grandfatherhood and not just fatherhood?  Well, you could have twenty children, but if none of them ever reproduced, then none of your genes would be replicated in future generations. But if you have a lot of children and your children have a lot of children (when my grandfather came to this country, he was the last of his line, but when he died he had over one hundred living descendents), then it's a safe bet that some of your genes will go on indefinitely. It's a kind of immortality.   Is that what our genes want---immortality?   They don't want anything---they're just numerical sequences.  But if their practical effect was not to cause their own replication by causing our replication, then they wouldn't be here----and neither would we.
            So if the 15 year old boy's genes are switching on a "bonding response" in the presence of one female, but not any others, what are the characteristics that the genes are programmed to look for?   In general, it's the same as for any other species:  health, strength, beauty, control of critical resources, and availability.  Many of the things we class as beauty are actually indicators of health.  Present health is often indicated by skin condition. In the days before lab tests, a physician's examination began by observing skin condition and noting rash, pallor, jaundice, ruddiness, etc.  Healthy, well nourished people usually have healthy looking skin.  Your long-term health record is your hair.   If you have long, silky hair, that means that you are not only healthy now,  but have been continuously so for as long as your oldest hair, perhaps four years.  Symmetry is universally preferred over asymmetry,  and it's about more than beauty.  If one side of your face is a mirror image of the other side, then it means that both sides were probably copied accurately.  And if parts of your face were copied accurately, then the parts of your heart and other organs were probably copied accurately as well.  It's a health thing.
            In  mate selection, the questions that any female human will ask are no different from the questions a female penguin would ask:   1.   Does this young  male have good genes?  Will he sire strong, beautiful offspring?   2.  Is he competent enough to protect and provide for my offspring?  3.  Will he have the resources needed?   For penguins, this last question might boil down to, "Did he collect enough pebbles to make a good nest?"  For cheetahs, it would be, "Does he dominate a large territory full of gazelles?"  And for humans, it would be, "Does he have a good job?"    But it's all the same question:  Can he muster sufficient resources?  Sometimes, in humans and in other creatures, the question of social standing may arise.  But that is just another way of asking about control of resources.
            Beauty may be defined in different ways in different settings, but some things remain constant. Healthy, symmetrical  specimens are universally preferred over sickly, misshapen ones.   As far as weight is concerned, this will vary according to circumstances. One of the oldest objects of art ever found is the Venus of Wallenberg.  It's a small figurine of a female torso.  She is depicted as pregnant and was carved to have huge thighs and breasts.  By today's standards, she would be considered grossly obese.  But in her time, she was a fertility goddess.  During a famine, such a woman might be able to bring a child to term and even nurse it for a while without much food.   If you were a man living in a world where food was usually scarce, this is the kind of female you'd be looking for.  Today, it's been a while since the last global famine, so epigenetic processes have suppressed our appreciation for the larger ladies.   But it's still in our genes, waiting for the next famine. 
            Then of course, there is the matter of sexual selection.  In most species, it's the females that do the selecting.  And even among humans,  we are exactly what our female ancestors wanted us to be.  So those ladies who throw up their hands and lament, " Why are men such brutes, (or such fools, or whatever), should remember that if we are brutes, it is because your great, great grandmothers, faced with a choice between the shy, sensitive poet and the brute, opted for the brute.  Over time, the males of a species become whatever the females want them to become.   Consider the tail of the African Widowbird. 
            The Widowbird is a bird about the size of a Robin, but the males, and only the males, have a tail 12 to 14 inches long.   There is no natural selection advantage for such a huge tail. it just weighs them down and makes it harder for them to fly and harder to escape from predators. But the females refuse to mate with any males except those with the longest tails. How does this happen?   Consider that the ability for males to grow a long tail is a heritable trait.  There is a gene for it.  But the tendency for females to choose only males with long tails is also heritable.  And although only males grow long tails, the gene for it can be carried through both the male and female line.  And the gene causing females to choose long tails can also be carried by either sex. And that's where it gets complicated.
            When a female chooses a long tailed male,  she has inherited the tendency to do that from her mother.  But if her mother had the gene for choosing long tails, then her father probably had a long tail. So she inherited both the gene for choosing long tails, and the gene which, in males, will grow a long tail.  Of course, the male has not only inherited the long tail gene from his father, he has also inherited the gene for choosing long tails from his mother, since, if his mother did not have such a gene, she would not have mated with his father.  So the poor chick will inherit both the gene for growing long tails and the gene for choosing them, and will get both from all four grandparents. So once a sexual selection preference gets started, it has a positive feedback loop, and a runaway effect occurs till the result reaches absurd  lengths.
            Do humans have such a runaway selection loop going?   It's too early to be sure, but I doubt it.   But you can be sure that sexual selection is a strong factor, perhaps the main factor, in the direction human evolution is heading.  When free choice of mates is allowed, then over time, each sex will become whatever the other sex wants it to be.
            And with sexual selection, nothing succeeds like success.  The most effective way to make a man more attractive to a woman is to convince her that he is already attractive to most other women.  Any member of a group who suddenly becomes more popular with some of the women also starts looking better to most of the other women.  Why?  It's called the "swinging stud " strategy.  While no one would consciously process it out  this way, a woman might sub-consciously say, "Wow.  I don't know what Larry's got, but It looks like women really go nuts over him.   If I could have his baby, my son would have whatever Larry has, and women would throw themselves at him.  He would have a lot of reproductive opportunities, and I would have scads of grandchildren."  When genes are manipulating our behavior, this is the kind of thing they have us doing.

            Whenever we find a specific physical characteristic that seems to be identified with sex appeal across several cultures, then we may have evolved a trait to be attracted to that characteristic.  I read once that waist to hip ratio seems to be a universal marker for female sex appeal.  If a woman's waist is smaller than her hips, then,  as you see her in silhouette, and see the line curving inward down one side from arm pit to waistline and then curve outward over the hip, that line is what male humans are programmed to look for.  I asked my daughter about this.  (She has a degree in anthropology.)   She said, "That line is nature's way of saying, 'I'm a female in childbearing years, and I'm not pregnant.' "   But wide hips in themselves might be attractive because before the days before modern medicine, childbirth was pretty risky, and a wider pelvic opening might make it less so.  Any characteristic that is associated with sex appeal, over time and across several cultures, probably has an evolutionary basis even if we have no idea what it is. But when we confront any mate selection preferences, these are the kinds of questions we should ask ourselves.  When we see that we find something attractive, we should ask, "Is this a cultural trait, or have I evolved a preference for  (X) ?   And if it's evolved, does it enhance survival, or does it confer a reproductive advantage?  Or is it like the tail on the Widowbird, conferring no advantage at all?

Wednesday, June 4, 2014

High Priest of Climate Science Denial

I understand that Sen James Inhofe of Ok has recently said that global warming is a good thing.  This, in spite of the fact that his home state is in severe drought and had the hottest summer ever recorded.  But this is not surprising.  When choosing between reality and faith, most conservatives will always cling to their religious roots.   Now, some might assume that in Oklahoma, people are mostly Christians, since that is what they will tell you they are.  But Jesus was all about feeding the hungry, healing the sick, sheltering the homeless, etc.---and no okey would be caught dead doing that stuff.  They actually follow a much more primitive kind of religion, a kind similar to the Egyptians' worship of the sun, or Mess-American worship of corn.  They worship the god of petroleum---and if they had any virgins to sacrifice or volcanos to throw them into, they would not stop at human sacrifice.  And James Inhofe is their high priest.

Monday, May 19, 2014

New Jersey State Lawyers Join Electricians' Union

           An article in the May, 2014 issue of The Electrical Worker,  the house organ journal of the International Brotherhood of Electrical Workers, details the successful organizing efforts of Local 33, which now represents about 400 lawyers who work for the State of New Jersey.  These employees, the Deputy Attorneys General (DAGs) are the men and women who prosecute polluters, shut down scams, investigate civil rights law violations, and so forth.  In short, they do the routine, day to day legal work required to defend the people of New Jersey. 
            Over twenty years ago, a consensus was emerging within this group of workers that they needed union representation. Many felt that theirs was a classic case of employee abuse:  broken promises, especially promised pay raises that never happened, unilateral increases in work load, arbitrary changes in work schedules, etc.  The DAGs felt that their deteriorating  work environment was not only undermining morale but making it difficult for them to do their jobs.  But as soon as it became known that these workers were considering joining a union, the state legislature passed a law forbidding it.
            Over the years, the DAGs considered many strategies, and eventually approached the IBEW.  This may seem like an unusual choice of bargaining agent, but actually it was a very reasonable choice.  The IBEW is a fairly large, long established international union, having about a thousand local unions in the U.S. and Canada.  In its 120+ years of operation, it has represented workers in a broad range job classifications with hundreds of separate specialized skill sets.  The IBEW also has experience representing public sector workers, as well as white collar professionals.
            When approached by the DAGs, the IBEW representative had one question:  Are you guys really committed to this effort? This will be a long struggle.  If we at the IBEW go all in on this, will you guys see it through to the end?  The DAGs affirmed that they would.   The first thing which had to be done was lobby the legislature to repeal the law forbidding  the DAGs to organize.  So the DAGs, the IBEW, and all their union friends appealed to the lawmakers---and this appeal was eventually successful.  The question which the lobbyists asked was this:  "How can you tell someone who is being mistreated that they shouldn't be able to do anything about it?"  No one really had an answer to that question, so they passed a bill repealing the law, and governor John Corzine signed it into law on his last day in office.
            The union won its NLRB election, and negotiations for the first contract began. It was a long, grueling process, with the state dragging its feet the whole way.  But eventually a contract was signed. Many people will ask, "What would an electricians' union know about the issues facing lawyers?"  Well, obviously, they know how to negotiate wages and working conditions. But the question is mostly irrelevant anyway.  When a new union local is formed,  the new members themselves select leadership from their own ranks, write their own by-laws, and select their own delegates and committees, including their negotiating committee.  When the state began negotiating with "the union,"  it was a committee of their own employees they were negotiating with.  The international union supplies a rough skeletal framework, in the form of a constitution. It also supplies financial and organizational backing,  and its vast expertise in organizing unions and setting them up in ways that work.   But in every case, "the union" is the workforce.   Any employer that hates "the union" simply hates his own workers. 

Thursday, May 8, 2014

Oil, Climate Change, and the Moneyed Class

            There was a wonderful article  by Christopher Hayes in the May 12, 2014 issue of The Nation entitled, "TheNew Abolitionism."  According to the current scientific consensus, the maximum planetary temperature increase that still allows the survival of civilization as we know it is about 2 degrees Celsius (that's 3.6 degrees F).  We have already increased the temperature by 0.8 degrees Celsius, so we have 1.2 degrees to go.  Given the relationship between carbon emissions and global average temperature, this means we can still release about 565 gigatons  of carbon into the atmosphere by mid-century.   That's it---just 565.   Yet according to the Carbon Tracker Initiative,  the total amount of carbon in the proven reserves owned by all the world's fossil fuel energy companies and by major fossil fuel producing countries is now about  2,795 gigatons---nearly five times the amount we could ever safely burn.  That means, in order for civilization to survive, the world's governments must either cajole or coerce the owners of that carbon to leave 80% of everything they own in the ground---and walk away from it forever.
            It's hard to put an exact price on that hoard of carbon, but its estimated worth is between ten and twenty trillion dollars.  Has there been any occasion in all history where the wealthiest, most powerful class on the planet has been asked to walk away from an asset of that size?   According to Hayes, there has been only one such event----when the American abolitionists demanded that southern planters free their slaves. It is distasteful to think of  slaves as "assets," but that's what the civil war was about;   whether slaves were people or property.   And as property, their value exceeded the combined worth of every railroad, bank, and factory in the country. Yet the abolitionists did eventually free those slaves, but only after a long and bloody civil war.  This is not going to be easy.
            You may be tempted to assume that the energy companies have so much wealth that even with 80% of it gone, they would still be obscenely rich----but you would assume wrong.  Oil companies have a lot of wealth, but they also have a lot of debt.  The debts are secured against the assets, but the biggest share of the assets are proven reserves. The day it becomes illegal to drill or dig more carbon, the value of those carbon assets goes away,  as does the value of the infrastructure built to process that carbon.   But the mountain of debt stays, and every coal and oil company in the world becomes insolvent.  At that point, all their employees are laid off forever,  from the CEO down to every drill-rig worker.   And when they return home, jobless, they would return to permanent ghost towns, because everyone else living in the same region would be laid off for the same reason.
             So it is understandable why oil industry people will resist all attempts to force them to act rationally. There are only two choices.  In one case, we continue to burn carbon, which destroys the planet and turns our lives into a living hell if we survive at all. In the other case, we ban carbon, which just turns oil workers' lives into a living hell.  With such a choice, you can see why oil industry people will cling to the insane hope that we can go on burning carbon.   An insane hope is better than no hope at all.
            Besides comparing the abandonment of carbon to the abandonment of slavery in terms of absolute asset loss, Hayes also makes another comparison. When something starts to become more profitable, everyone joins the parade to cheer for it.  At the time of the American Revolution,  no one really defended slavery.  Everyone agreed that we were stuck with it, but no one really liked it.  Patrick Henry, a Virginia slave holder, called slavery an "abominable practice."   Richard Henry Lee, also a Virginian,  called the slave trade "an iniquitous and disgraceful traffic,"  and introduced a bill in 1759 to end it.
            But in the early 19th century, because of the cotton boom, slavery suddenly became much more profitable.  Between 1805 and 1860,  the price of a slave increased from $300 to $750,  and the number of slaves increased 400%.  And as slavery became more profitable,  everyone started finding something to like about it.   By 1837, John C. Calhoun claimed that slavery was not an evil, but a positive good, and should be expanded. One Southern social theorist, George Fitzhugh, said, "Our negroes are not only better off as to physical comfort than free laborers, but their moral condition is better.....  They are the happiest, and, in some sense, the freest people in the world."   No matter how bad something is, when it begins making a lot of money, there will be no shortage of people to sing its praises.
            As shale oil production has recently become practical,  the continued burning of carbon is starting to be rehabilitated from  "a  horrible but necessary evil"  to "a celebrated boon for all."  Just as the United States before the Civil War was having a "slavery boom,"   the U.S. is now having a carbon boom.   Because of both deep water oil and gas and shale oil and gas, the U.S. is once again becoming a net exporter of oil.  It will soon surpass Saudi Arabia as the world's largest oil producer and Russia as the world's largest natural gas producer.  Of course, this situation is temporary.   Unlike conventional wells which can pump for 30 or 40 years,  the shale wells are tapping very shallow formations, and whether they even last long enough to return the rather considerable cost of drilling is still an open question.
            As recently as 25 years ago,  no one was really defending our continued reliance on fossil fuel, not even conservative Republicans.  Hayes quotes several Republicans on this issue:  Dan Quayle, in 1988 said, "The greenhouse effect is an important environmental issue.   It's important for us to get the data in,  to see what alternatives we have to fossil fuels."   And in 1989, Newt Gingrich was one of 25 Republican co-sponsors of the Global Warming Prevention Act, which held that "the Earth's atmosphere is being changed at an unprecedented rate by pollutants resulting from human activities."  In 1990, George H. W. Bush said, "We all know that human activities are changing the atmosphere in unexpected and in unprecedented ways."  And even in 2005, George W. Bush said, "It's now recognized that the surface of the earth is warmer, and that an increase in greenhouse gases caused by humans is contributing to the problem."  In 2008, John McCain's platform included a cap and trade bill.
            The reason that even conservatives were ready to abandon oil then is that it appeared that oil had already abandoned us.   As our own domestic production of oil declined, we were importing increasing amounts from other countries, at ever increasing prices. We paid higher and higher prices at the pumps, but the oil companies themselves made little profit, because they were being price-squeezed by the producer states who supplied the crude.  So continued reliance on oil wasn't going to benefit anyone.  It was  like a ball and chain around our ankle. There would be no economic freedom in our future unless we could break free from our dependence on oil and free from the despised price gougers who supplied our crude.
            But with the development of fracking, we have, at least temporarily, a source of oil that could make us net exporters of oil.  (Whoopee! Now we get to be the despised price gougers)  That changed the tone of the debate.  In 2008, the same year that McCain included a cap and trade plank, Sara Palin was leading a rally of people chanting "Drill, baby drill!"   After the election, McCain dropped support of his own bill, and in a South Carolina primary, Tea Partiers defeated a conservative incumbent for refusing to deny climate science.  Gingrich repudiated his acceptance of climate science and totally embraced denialism. According to Hayes, denialism is now the official Republican line. It's not just the money to be made from selling all that oil or the influence of the powerful interests that own it.   Washington's "Arm Chair Imperialists" are now beginning to dream about using "The Oil Weapon."   The oil interests intend to corrupt our political system with every billion they have, to insure that no one tries to stop them from wrecking the planet.   And of course, the Supreme Court has found unconstitutional any attempt to restrict or discourage such corruption.
            Not only do the energy companies intend to burn all of the known reserves, they are still spending money on exploration.  This is their way of saying, "After we have burned 5 times the amount  required to wreck the planet, if there is anything left of it, we plan to burn some more."  At this point in his article, Hayes explains that if you are not totally depressed by now, then you didn't quite understand what he has told you. But Hayes sees some reason for hope.  For one, whereas slaves could generate cash flow with very little capital investment, carbon assets require massive investment---perhaps more than will ever be returned in operating profit.  As a result, most oil stocks pay only fairly modest dividends.  If shareholders begin to demand that cash be used for dividends instead of  exploration, that could change everything. 
            Hayes doesn't mention it, but fracking and horizontal drilling, the two technologies needed to recover shale oil, are so God-awful expensive that unless the oil is sold for a very  high price, the operation doesn't even break even.  Last year a couple of major oil companies began selling off their Bakken shale leases because they were not sure they could ever make a profit no matter how much oil they found.  So there is an alternative explanation to why oil majors are still spending money on exploration.  Supposing that the shale oil recovery is yielding no profit at all, but has a slight operating loss, a loss covered by creative accounting and  increased borrowing.  The borrowing is covered by the company's assets---in the form of proven reserves.  As long as "proven reserves" increase every year, then increased borrowing is justified, and the theoretical net worth of the company continues to increase, justifying increased stock value. But as soon as anyone admits that not all this oil in the ground will ever be pumped, then the game is over.  To stop exploring would be to admit this.   So the whole thing begins to look like an asset bubble.   Am I the only one to think this is an asset bubble?  No.  Last year Al Gore and David Blood co-authored an article in the Oct 29, 2013  Wall Street Journal entitled "The Coming Carbon Asset Bubble,"  which warned that all fossil fuel investment could be considered an asset bubble. Unless the profit made from selling just the oil and coal that will actually be extracted is sufficient to retire the outstanding debt, then none of these companies have any net worth whatsoever.  Sooner or later, all bubbles collapse.  And when this one collapses, the "drill baby drill" crowd will have some egg on its face, and sustainable energy will be celebrated again. So, what can we do until then?
            First, continue to push for more wind and solar power. Not just at the back yard level, but at the power company level.  Having a gazzillion-dollar power company on your side helps.             
            Second, continue to oppose coal-fired power.  Oppose the licensing of new plants; demand the retirement of old plants.  This will cause a lot of natural-gas-powered gas-turbine power plants to be built.  This is a good thing.  These plants have much less carbon emission than coal, and when we get switched to mostly wind power, we will need these things as a backup, because the wind does not always blow. Gas turbines are the ideal backup because wind can increase or decrease very quickly, so you need a countercyclical source that can crank up or shut down fast enough to match it.   Only a gas turbine can do this.
            Third, continue to fight for fuel efficiency standards, not just for cars, but for everything.
Show your support by buying a new, high-efficiency car if you can afford it. Depending on what you trade in, the money you save in fuel might make the payments if you do a lot of driving.
            Fourth,  push for more mass transit---mainly the kinds that can run on electricity. Because electricity is the kind of energy we are going to have. 

Friday, March 28, 2014

What Upward Mobility?

            Recently, a team of economists led by Harvard's Raj Chetty released a report claiming that upward economic mobility in America  has not really declined in the last 30 years. Robert Kuttner, writing in the Mar/Apr issue of The American Prospect, and James Surowiecki, writing in the Mar 3, 2014 issue of The New Yorker both commented on this report.  Kuttner and Surowiecki  both make the same point:  Yes, mobility has not declined much in the last 30 years---because by 30 years ago it was already nearly zero.  In fact, although there was considerable mobility in the late nineteenth century, by WWI most people were destined to die in the same class they were born in.  But until about 1973, this was no cause for alarm. In order to improve your condition, you need not escape the class you were born in if the standard of living of your whole class is rapidly rising.  With the rise of labor unions in the 30s and 40s,  and the GI Bill after WWII, the American worker gained a higher income, more access to education, and more income security than his parents had ever dreamed of---and he did it mostly without leaving the class he was born in.  You do not need to change busses to get to where you wish to go, if the bus you are on is already taking you there.
            But since about 1973,  real  wages in America have been stagnant or falling.  In the post-war era up until 1973,  there were huge gains in productivity, and this productivity gain was always shared with the workers  whose sweat and genius made it possible.  But since that time, there has been a ruthless war against the middle class. The elites---Organized Money is a better term---began breaking unions, and taking over media outlets and pouring money into political campaigns, with the aim of electing anti-union, right-wing puppets who would pass anti-union legislation, appoint anti-union, right-wing judges and sign trade treaties allowing corporations to sidestep American labor standards by transferring production to low wage countries.  (Just the threat of such a transfer allows corporations to extort drastic wage concessions, whether the plant is moved or not.)  As a result, the good, middle-class job is becoming a thing of the past.  There are very few decent employment prospects left in manufacturing, mining, or agriculture in the U.S. today.  When you kill the bottom of the food chain, you kill the whole ecosystem. And  historically, good union jobs in these sectors were the foundation of the "food chain" that sustained the whole middle class.  
            There have been massive productivity gains since 1973, but none of it has been shared with labor.  If it had been, the U.S. median household income level would be about $82,000 per year, and not $42,000.  At that wage, the class mobility question would become moot.  With a median household income of $82,000,  most people would have a livable wage where they're at.

Wednesday, March 5, 2014

Pipeline Projects Abandoned

   In the Tuesday, March 4, 2014 issue of the Wall Street Journal,  was an article entitled Who Wants an Oil Pipeline?   Trains Bring in More Money.  The article, by Alison Sider,  reports that Koch Pipeline Company walked away from a pipeline project because of "tepid interest"  form oil producers. And a year earlier, Oneok Partners canceled a planed line from North Dakota to Oklahoma for the same reasons.  The oil producers, at least for the present, prefer to just keep shipping by rail.
    Rail costs much more per barrel to ship oil than any pipelines.  But a pipeline, once built, locks the builder into shipping to only one destination.  And all the oil producers who have signed long term contracts agreeing to use that pipeline are locked into that same destination.  But markets can shift over time---in fact, they can shift from day to day.  But when you load oil into a railcar,  you can send it to any place on the continent.
    The proposed proposed pipelines would all ship oil from the Midwest to Texas and Louisiana, where refineries are already oversupplied with oil from local shale.  North Dakota oil is low sulphur oil, of the same type that East Coast refiners are paying $104 per barrel to import.  Yet Midwest producers received only $74 per barrel in January.  So even though pipelines ship oil more cheaply than rail, having a pipeline to Texas is not what the oil producers really want right now.  They don't want to ship to Texas--they want to ship to New Jersey, and will find it profitable to do so, even at a rail freight cost of $5-$15 per barrel.   And next year, they may wish to ship somewhere else.  But no new pipelines will be built without  oil producers signing long term contracts to commit to shipping a specific volume  for a specific number of years.   The article quotes one analyst as saying, "Making a pipeline volume commitment is like getting married.  Shipping by rail is like a one night stand........"

Saturday, January 25, 2014

Why is Propane Price Higher?

        The short answer is that we have had a lot of cold weather, and supplies are falling short of demand. A more complete answer is that we went into winter this year with much lower stocks of propane than usual-- because more had already been used up for grain drying than usual.  This was true because, since  the corn had been planted late,  the point in the life cycle of the plants where the grain is ripe and the plant starts to dry down did not occur until well after the hot, dry days of late summer were past.   The reason that the corn had been planted late is that in 2013, we had a very, very wet spring.  So, a wet spring one year equals high propane price the following winter.  For a better perspective , see The Cat's earlier post: Do We Eat Petroleum?

Thursday, January 16, 2014

Agreement About Inequality

   There was an interesting article in the Jan 15, 2014 issue of the Wall Street Journal, by Wm. A. Galston entitled "Where right and Left Agree on Inequality.  I read the news pages of WSJ, but I usually don't bother with the editorial section.   Whereas the news pages still contain useful information about the price and availability of strategic things like oil, corn, and copper,  the editorial section is generally a wellspring of pompous, ultra-right-wing nonsense---a sort of "Fox News for the materially blessed."   When you do find something worth reading there, it is usually a guest opinion by some famous person responding to some outrage which WSJ printed a few days before.   But every once and a while, a article appears there that actually makes sense.
      Whether you consider yourself, left-wing,  right-wing, or something else,  you should read this brief article, if you are concerned about inequality.  If you are not concerned about inequality, then you are an idiot, because besides being a moral outrage, inequality is bad for business.  The World Bank now says that the principle reason for the sluggish recovery is inequality.   Put simply, sales are slow because though there is a lot of cash in the economy,  the people who need to buy anything are not the people who have any of it.