Wednesday, April 22, 2009

The Answer Is Not Blowing In The Wind... What A Gas


She said it, but she didn't mean it:

Washington Wire
Political Insight and Analysis From The Wall Street Journal's Capital Bureau

August 24, 2008, 4:14 PM ET

John D. McKinnon reports on Nancy Pelosi’s statements on energy.

House Speaker Nancy Pelosi’s message on energy, already evolving in recent weeks, might have to evolve a little more.

On NBC’s “Meet the Press” on Sunday, the speaker twice seemed to suggest that natural gas – an energy source she favors – is not a fossil fuel.

“I believe in natural gas as a clean, cheap alternative to fossil fuels,” she said at one point. Natural gas “is cheap, abundant and clean compared to fossil fuels,” she said at another.

The speaker apparently was trying to contrast her support for expanded use of natural gas as a motor-vehicle fuel, and many Republicans’ preference for more domestic oil drilling — particularly through opening up more of the Outer Continental Shelf for exploration.

He said it, but he didn't mean in our lifetimes:
Saturday, April 18, 2009
Obama Adminstration’s Energy Radicalism

By Dr. Michael J. Economides

Only a few years ago radical environmentalists would have been more circumspect in their energy pronouncements than members of the Obama Administration, many of whom seem to want to govern by slogan and sound bite rather than reality. Things have been happening in rapid fire and it seems now abundantly clear that the recession, economic crisis and economic stimulus will be used as a cover to usher measures with agendas that, if enacted and stay, would have a major negative impact on our lifestyles and our economy for decades to come.

On April 17 the EPA declared finally what many had hoped and others loathed that there is “overwhelming and compelling evidence” that “greenhouse gases in the atmosphere endanger the public health of current and future generations”. In spite of a growing chorus of skeptical scientists on the causes of global climate change and even more objections on the expected effects, the EPA went on to adopt the most strident and alarmist presumed catastrophes from climate change such as rising sea levels, more wildfires, more hurricanes and degraded air quality. Under attack is plainly carbon dioxide, the product from the use of hydrocarbons (fossil fuels such as oil, natural gas and coal) from which 87 percent of the world and US energy supply comes from.

The Obama Administration seems to be unmoved by the fact that according to almost all estimates, by the year 2030, while the world energy demand will increase by 50 percent, oil, gas and coal will still account for 87 percent of world energy. While international pressure is often cited for the recent government actions, in this era of American self-flagellation, one thing should be made abundantly clear: global warming rhetoric has always been largely a full frontal attack on the United States, its lifestyle and its apparent success compared to other countries, especially in Europe. It is clearly ironic that Pravda, the former official instrument of the Soviet communist party has implored the United States to stop “carbon communism”.

The EPA of course does not offer solutions to the 87 percent problem and it defers to Congress to do so. Surely Congress will find the right solution from a position of knowledge as demonstrated by the honorable Nancy Pelosi who on NBC’s Meet the Press said “I believe in natural gas as a clean, cheap alternative to fossil fuels,” and lest one thought she misspoke, she went on to say in the same interview that natural gas “is cheap, abundant and clean compared to fossil fuels.”

The Secretary of Energy Steven Chu in an April 4 Newsweek guest editorial also proved that his Nobel Prize notwithstanding, common sense and rudimentary knowledge are lacking. First he did not offer one sentence on securing the United States 87 percent of energy supply other than “advanced biofuels”; this from the Energy Secretary. People hate to hear statistics like this but biofuels are a negative energy balance and even ignoring this science, if we were to use all of the corn grown in the United States to produce motor vehicle fuel, without regard to what that would do to food prices, it would still be less than 20 percent of our gasoline demand. Chu also went on to say “we must move beyond oil because the science on global warming is clear and compelling: greenhouse-gas emissions, primarily from fossil fuels, have started to change our climate. We have a responsibility to future generations to reduce those emissions to spare our planet the worst of the possible effects.”

His main solution? Conservation as “the most direct way to reduce our dependency on foreign oil is to simply use less of it.” Let’s just become less seems to be the Administration’s mantra and it has many adherents all over the world, especially when it refers to the United States. This in spite of the fact that beyond ideological feel-good there is no evidence historical or otherwise that conservation can reduce energy consumption. In fact the opposite is true. Energy conservation and efficiency in one sector has led to increase in total energy demand, finding new uses of energy such as the internet and next-day package delivery. People the world over have identified the use of energy as perhaps the single most important factor for a better life. But according to Secretary Chu the answer is this simple. “All Americans can strike a blow for energy independence by choosing to buy fuel-efficient cars, take public transit or join a carpool.” Jimmy Carter all over?

There is some merit to another suggestion by him: electrical cars, but he destroys the notion when he writes “generating that electricity from clean, renewable sources like solar and wind power.” Another dreaded statistics. If we triple current electricity output from wind every year for the next 20 years, it will still be less than 20 percent of the nation’s electricity demand.

Not to be outdone in slogan -style exaggeration, Secretary of the Interior Ken Salazar, on April 6 in Atlantic City to discuss America’s offshore energy resources, in what the Wall Street Journal characterized, “raised eyebrows when he said offshore wind farms could replace 3,000 coal-fired plants.” We have only 1,400. He also claimed that offshore Atlantic could deliver wind electricity equal to 1,000 gigawatts. That’s the entire electricity generation capacity of the United States.

Even by vested interests, such as wind turbine manufacturers, offshore wind farms, which internationally now account for an imperceptible fraction of wind power the total of which is less than 0.4 percent of electricity production, may account for 5 to 7 percent of electricity after many decades. Salazar’s statement should raise a lot more than eyebrows.

One has to wonder what is the point and what are the motivations of all this “gusher of lies” which surely falls under psychobabble rather than energy policy? Why is it, that potential changes which may take many decades, if ever, are presented as imminent solutions all the while ignoring taking care of business today? I can find no answer to such nonsense. Let me make two predictions which for most who understand energy may generate chuckles for the dearth of daring: By the end of Obama’s first term, oil consumption in the United States will be up and the imported portion will increase. In the meantime never underestimate the power of politicians to sound ridiculous and out of touch with reality. PDF is here.

Posted on 04/18 at 04:52 PM
... and no windfarms off Cape Cod where winds are strongest and most consistent.

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
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Tracking Interest Rates

Tracking Interest Rates


SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006
Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."

December 11, 2007 Somehow the Fed misses the obvious.
[Image from:]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)