Life Span of Oil

James Petholoukis in his Capital Commerce blog reviews the varying opinions on the life span of oil as a energy resource and offers his opinion that is will become an important political and economic debate in "Are the Democrats the Peak-Oil Party?" Some excerpts follow:

"We have to understand how weak [Iran] is," explained Sen. Joe Biden last month at the Democratic presidential debate in Nashua, N.H. "They import almost all of their refined oil. By 2014, they are going to be importing their crude oil." If Biden really meant to say what he said, that places him firmly in the camp of those analysts who believe in "peak oil" and predict that global oil production will soon decline even as demand continues to rise, with the results being ever higher oil prices and shortages.

Peak oilers contend that the Middle East oil reserves are vastly overstated. Some, the minority to be sure, even think that global oil production will fall so far, so fast, that western civilization will have to return to some sort of pre-industrial way of life. Here are some choice predictions from one well-known proponent of the theory, James Howard Kunstler:

"One huge implication of the oil peak is that industrial societies will never again enjoy the 2 to 7 percent annual economic growth that has been considered healthy for over 100 years. This amounts to the industrialized nations of the world finding themselves in a permanent depression...The future is therefore telling us very loudly that we will have to change the way we live in this country. The implications are clear: We will have to downscale and rescale virtually everything we do...All indications are that American life will have to be reconstituted along the lines of traditional towns, villages, and cities much reduced in their current scale. These will be the most successful places once we are gripped by the profound challenge of a permanent reduced
energy supply."

Clearly, the members of the National Petroleum Council, a federal advisory group representing the oil industry, are not believers in peak oil. "Fortunately, the world is not running out of energy resources," concludes a new report. "Coal, oil, and natural gas will remain indispensable to meeting total projected energy demand growth. "But the report does advocate that the United States [make many clean and green changes.]

My [Pethokoukis] take: Between fears of global warming and higher energy prices, energy looks certain to be a major issue for the first time in a presidential election since 1980. Democrats already seem to have realized and are formulating specific plans, like Hillary Clinton's idea of a $50 billion
energy research fund, or a similar $10 billion "New Energy Economy" fund that John Edwards is proposing.

The GOP isn't quite there yet as far as addressing this as an issue with specifics. Rudy Giuliani, as part of his website's "12 commitments," merely says, "I will lead America towards energy independence." Mitt Romney advocates spending "more research dollars in power generation, fuel technology, and materials science. It is in new technologies that we will find solutions to our environmental and energy needs."

I strongly agree this will become a much larger issue. I know that Giuliani has promised to flush out in detail each of his "12 Commitments" over the course of the campaign as I suppose they will all. I also know that most energy stock analyst are on the "non-peak" side and watch the energy estimates of the oil companies very carefully, and that watchfulness lead to a shake-up in BP's management not too long ago.

Changing Demographics

My last post touched our lack of of focus on South American countries to our detriment which is primarily due to the focus on the Middle East and Iraq in particular. The following is a bit of an analysis about the relationship of Catholicism and Europe but does highlight how the demographics of the world is both so important and so rapidly changing. By the way, it is from a weekly email from John L. Allen, Jr., who in his work in covering the Vatican for the National Catholic Reporter, ends up covering the world. Here is a portion of his regular column All Thing's Catholic in "The Vatican's Changing Relationship with Europe":

Mega-Trends

1. World Catholicism
A church long dominated by Europe and the United States is becoming steadily more global. The most important bit of data is this: In 1900, just 66 million Catholics, representing 25 percent of the global Catholic total, lived in Africa, Asia and Latin America. Today 720 million of the 1.1 billion
Catholics in the world live in those regions, representing 66 percent, or two-thirds, of all Catholics alive. That's an enormously rapid shift, and it implies a rising Southern tide in Catholicism over the 21st century. Mumbai, Nairobi and São Paulo will be to the 21st century what Paris and Milan were to the Counter-Reformation era in the 16th century, meaning the places where new energy first begins to stir. This will drive a far-reaching transformation of Catholic faith and practice.

2. Secularism and Catholic Identity
In response to runaway secularization in Europe and other pockets of the West, Catholicism today is practicing what sociologists call a "politics of identity," aggressively reinforcing its traditional doctrines, rites, and devotional practices. It's a 21st century Catholic version of how Judaism
responded to the destruction of the Temple and the reality of living in diaspora: "building a fence around the law." Just last week has seen two classic examples, with decisions from Pope Benedict XVI to widen use of the pre-Vatican II Latin Mass, and a declaration from the Vatican that Catholicism is the lone true church willed by Christ.

3. Multipolarism
While the economic and military superiority of the United States will not vanish in the 21st century, the rise of a number of other states and non-state actors is creating a more "multi-polar" world with multiple centers of power and influence. Two clusters seem poised to be especially consequential: what Goldman Sachs calls the "BRIC" nations of Brazil, Russia, India and China, who together
represent 40 percent of the world's population, and whose combined economies by 2040 are projected to be larger than those of the United States or Europe; and an emerging "Shi'a axis" from the Mediterranean to Central Asia, in which Iran will play a leadership role.

Labor's Impact on Free Trade: Bad Economics, Bad Foreign Policy, Bad for America

It seems that only a few strong sources report on the trade shenanigans of the US Congress. Bob Novak is one of the most clear which he continues in "How Labor Rules." Read it all to belueve it. This is bad economics, bad foreign policy, very bad for all Americans including, I believe, big labor, and bad for America.

Ignoring pleas from outraged South American governments, Democratic leadership of the House this week was adamant about Congress going into its August recess without taking action on free trade agreements with Peru and Panama as promised....

Why did House Speaker Nancy Pelosi renege on her previous commitment? She dances to the tune of AFL-CIO President John Sweeney, who preaches outright protectionism. Hostility toward not only the Peru and Panama pacts but also a vital agreement with Colombia can be traced to influence on U.S. unions by South America's leftist labor leaders, originating in Hugo Chavez's Venezuela.

Beyond U.S. unpopularity in the Western Hemisphere, this exposes deeper problems for the new Democratic majority in Congress. While the AFL-CIO's authority is diminished in the labor movement and among the nation's workers, its chief rules in Congress. Democrats bowed to Sweeney's wishes in voting to end secret ballots in union recognition elections, but the more audacious demonstration of labor's influence on Capitol Hill was getting the House leadership to renege on a bipartisan deal affecting world trade.

Democratic leaders are impervious to the reality that Colombia, Peru and Panama now enjoy one-way trade access to the United States, whereas the agreements would open their markets to U.S. goods. Nor do the Democrats show concern about alienating Uribe and Garcia as Hugo Chavez's menace spreads through the hemisphere.

Sweeney's marching orders are not limited to Latin America. He dismisses the negotiated agreement that finally would open South Korea to U.S. autos as "a losing, one-sided agreement." Obediently, House Democratic leaders declared the Korean pact dead on arrival.

Earmarks: McHenry, Murtha & The House

Two stories that say a lot about the US House Of Representatives:

From The Crypt's Blog at Politico.com entitled "What's In Your Wallet?":

Republican Rep. Jeff Flake of Arizona, the fiscal crusader who's never met an earmark he likes, questioned Democratic Rep. Peter J. Visclosky of Indiana on the House floor Tuesday about whether the Center for Instrumented Critical Infrastructure actually exists - since, hey, it's getting like a million bucks or something.

Visclosky, who chairs the spending subcommittee responsible for the project, had to admit that, well, he didn't have a clue.

After a lengthy back-and-forth, Flake, complaining that his staff couldn't find a website for the center, asked Visclosky, "Does the center currently exist?"

"At this time, I do not know," the Indiana Democrat replied. "But if it does not exist, the monies could not go to it."

And who could possibly be the sponsor of such an earmark? Yes, you guessed it, the man Republicans love to hate, Pennsylvania Democrat John P. Murtha. Despite the money's uncertain destination, the House rejected Flake's measure to strike the funds, 326-98. And the Visclosky bill also sailed through, 312-112.

And this update now in the article:

UPDATE: I failed to report last night that a certificate filed with the requested funds says the money is actually earmarked to Concurrent Technologies Corporation, a nonprofit technological consulting firm. A brief search of campaign finance records shows CTC President and CEO Daniel R. DeVos, of alternately Central City and Johnstown, Pa. has contributed $7,000 to Murtha's reelection campaign since April 2002.

Now, story number two concerning my own Representative from North Carolina, from the Winston-Salem Journal, "House Axes Perfect Christmas Tree":

The House killed The Perfect Christmas Tree.

When U.S. Rep. Patrick McHenry, R-10th, asked for federal tax money to expand a commercial development in rural Western North Carolina known as the Home of the Perfect Christmas Tree, the House turned him down flat.

So far this year, the House had not voted to reject a single earmark request - until this one.

McHenry had angered so many House members with attacks on earmarked spending that when he put in a request of his own, the long knives came out.

By a 249-174 vote, the House voted on June 28 to eliminate $129,000 from a spending bill that would have expanded a Christmas-crafts store in economically depressed Mitchell County.

...Two weeks before the vote, McHenry helped tie up the House for more than three days by criticizing the secrecy of special projects other House members wanted. He said he wanted to “hold the Democrats accountable for their slush fund, their secret earmarks and their pork-barrel projects.”

McHenry insisted that he was not fighting earmarked projects but the secrecy. The Democratic leadership did not want to disclose the earmarks until just before a final vote.

“I fought against keeping earmarks secret,” McHenry said in an interview. “I’m proud to say we won that battle.”

...In 2003, the Mitchell County Development Foundation started the Home of the Perfect Christmas Tree in Spruce Pine with money from the federal Appalachian Regional Commission and private investors. McHenry said he should have requested the earmark for the foundation, an
economic-development organization, instead of the Home of the Perfect Christmas Tree.

But he defended spending federal money to help a local economy devastated by international trade. Over the last five years, the county has lost a third of its manufacturing jobs to overseas furniture and textile competition.

The craft center’s name came from a popular children’s book, The Year of the Perfect Christmas Tree by Gloria Houston.

Last Christmas, first lady Laura Bush picked the store’s hand-blown ornaments and Carolina Snowflake woven-reed ornaments for two White House Christmas trees. She lauded the people of Spruce Pine for working together “to figure out a new industry for themselves.”

You will find an earlier post of mine on McHenry's tough relationship with the other side of the aisle and earmarks a few weeks ago. That post is here.

Green Energy Contentious in NC Mountains

Does anyone remember the "windmills" (high profile, neat-looking, slender blade contraptions) going into Boone years ago? I thought they looked good and the wave of the future. They are gone now but I hope they come back. I personally would rather see clean wind power and solar panels rather than substations and supplemental generators in my view.

News on green energy disputes in the Winston-Salem Journal in a couple of recent stories. First, here's a bit of "Mountain Counties Show Resistance to Green Energy":

The mountain counties of Northwest North Carolina would probably generate a large part of the state’s renewable energy.

But residents in Ashe and Wilkes counties have already shown this year that reaching the proposed green-energy goals won’t come easily.

A proposal to build a wind farm on a ridge in Ashe County set off a storm of protest this year, with opponents saying that the giant turbines would ruin sweeping mountain vistas, killing tourism and housing markets. And a proposal to build a poultry-litter plant in a northwest county - Wilkes, Surry or Alexander - faces opposition.

It has the support of farmers, who want an alternative to spreading manure and bedding on fields, but environmentalists say that burning the litter would produce too much air pollution.

...Public outrage over Sugar Top, an Avery County resort on top of a mountain, led to the 1983 passage of North Carolina’s Ridge Law, which protects certain ridges from tall structures.

Among other issues, the Utilities Commission is looking at whether the ridge law bans large-scale wind turbines. Last month, Blowing Rock became the first local government to ban windmills. Town leaders said they support renewable energy but want to protect views and the town’s tourist-based economy.

Worth reading the article and also a partial update on the status is here in "Ashe Commissioners Adopt Wind-Energy Ordinance":

The Ashe County Board of Commissioners adopted a wind-energy ordinance yesterday that limits wind-turbine heights to 199 feet as measured to the tip of the turbine’s blade.

The new rules replace those that commissioners adopted in February as they hurried to get county-wide regulations in place before the first N.C. Utilities Commission hearing on a proposed commercial wind farm of 25 to 28 turbines in Creston.

The utilities commission’s hearings are scheduled in August, and the commissioners have been reviewing the ordinance.

The regulations are effective immediately because the commissioners voted unanimously on the matter. Their 5-0 vote followed a short public hearing.

The other major change reduces setback requirements for large wind-turbine systems from 1,700 feet to 1,000 feet from a property line. The change was made on the advice of an attorney hired by the county.He told commissioners that it was important to make the regulations consistent with
other county rules in case the issue is challenged in court.

Despite the reduced setback, about twelve members of a citizens group fighting the wind farm applauded commissioners when the rules were adopted.

Maria Whaley, a spokeswoman for Friends of Ashe County, said she was a little disappointed in the setback change, but she appreciates the process that commissioners have been through. Commissioners visited wind farms in West Virginia and Pennsylvania.She said she is pleased with the new height limits. “That was significant,” she said. “It went from basically unlimited to 199 feet.”

The 199-foot limit means that the turbines will not require aviation warning lights, as they would if a turbine were 200 feet or higher. Opponents of the project had objected to having flashing beacons in the night sky on ridge tops.

I think the height restrictions are reasonable and I hope to see non-obtrusive, fast turning, wind farms providing energy in our mountains. I lived in Wilkes and Ashe counties for some time and sitting here in Mitchell County I wish we had those initiatives and innovations under development here.

[Personal note: I have been away for many days traveling and getting needed things done but am happily back.]