Friday, May 8, 2009

Musings on Many Things - 1

From the various things that cross my desk and screen these days, a few are worthy of comment. 

++  A huge oil field was just discovered in Iraq, with between 2.3 and 4.2 billion barrels of oil.  The figure will be improved as more wells are drilled.  This qualifies as an elephant field, and again puts the lie to those who say we have passed the peak of oil.  Not so.  Never have, never will.  Imagine the world as a stack of pancakes, and we have just stuck a fork in the upper layer of the top pancake.  Such is our situation with drilling for oil.  There are lots of pancakes down deeper, and we have not even begun exploration and drilling there. 

++  More natural gas is being liquefied and shipped around the world, so much so that there is a glut of natural gas.  The world is swimming in natural gas.  More is found almost daily, it seems, in shale formations.  Even more is produced from coal beds, known as coal bed methane.   The price of natural gas is around $3.5 to $4 per million Btu.  On an equivalent basis, a barrel of oil would be $25.  So, either natural gas should increase to $8, or oil should drop from around $50 back to around $25.   Yet, OPEC is throttling production to prop up prices in the $50 range.  They would prefer it be in the $70 to $80 range.   As more car owners wise up, and convert their cars to CNG as fuel, the demand for gasoline and diesel will decrease.   What a strange turn of events...OPEC countries may go broke, as they cannot raise prices for oil enough to produce the cash flow they must have to support the infrastructure in place.   Stay tuned on this one, and watch for massive dis-array within OPEC, as the smaller members cheat and produce more than their quotas.  

++  Nuclear power plants are really so expensive that some utilities are abandoning their plans to construct new ones.   About time.  Who wants to pay 30 and 40 cents per kwh for nuclear power, when we can enjoy reliable, clean, and virtually unlimited power from natural gas, at around 10 cents per kwh?

++  The sun is in a strange mode, at least during modern times.  No sunspots.  For a long time.   In the past, when such a thing happened, the entire earth got cold.  Very cold.  As in crops failed, snows were very deep, and people suffered greatly.  This is completely unpredicted by the Anthropogenic Global Warming hysterics.   Also, the oceans are cooling down, as best we can tell from actual measuremens.  The AGW folks tell us incessantly that the oceans will heat up, the atmosphere will heat up, and the great ice fields in Greenland and Antarctica will melt.  The melted ice will increase the sea level, along with thermal expansion of the oceans as they heat up.  The result, they say, is islands under water, cities on the shore inundated, and most of Florida underwater.  It is not happening.   Sea level is stabilized, the oceans are cooling, and the ice packs are growing.  When will the grown ups stand up and tell those ill-behaved AGW alarmists to go to their room?  

++  California is having yet another fiscal crisis.  This is getting to be more regular than clockwork.  The gloom and doom this time is $23 billion shortfall, by July of 2009.  Note that we just fixed the $42 billion shortfall in January or February, a mere three or four months ago.   How can a state be so mis-managed that it produces a fiscal shortage of $23 billion in only six months (January to July).   This is a bit like the Titanic, after striking the iceberg, having the captain tell everyone not to worry, the water is so cold that ice is plugging the hole.  Meanwhile, everyone can see the ship is slowly sinking.   It is, or should be, obvious to one and all that California is no longer the Golden State.  It is the Ship of Borrowing and Sorrowing, instead.   Perhaps Obama will bail out the state, again, only this time, attach some serious strings to the money.  One such string should be that the state have a balanced budget.  No borrowing, ever.  None.  If the revenue is not there, then cuts in services automatically follow.   The state can attempt to increase tax rates, but that is not a wise move.  Businesses soon depart to greener pastures, as it were.  

++ Meanwhile, California's woes continue as the state pushes ever onward with the Bill that Killed California, AB 32.  For those who may not remember, AB 32 is a landmark legislation passed in 2006, and steadily being implemented in all its numerous parts, to choke economic growth in California by imposing limits to carbon emissions.  AB 32 is ambitious, as virtually every sector of the economy is impacted.  Cars, trucks, fuels, industry, the ports, buildings, land developments, services, electric power generation, all of these and more are being impacted.   Recently, the Air Resources Board passed the Low Carbon Fuels Standard, mandating ethanol and bio-diesel for transportation fuel.  Never mind that even the Obama EPA, now run by greenies, have themselves stated that ethanol does not clean the air of much, if any, carbon.  Never mind that producing ethanol from corn requires huge quantities of fresh water to irrigate the corn.  Never mind that water is scarce in California, so the state will import ethanol from the mid-west, using up great quantities of diesel fuel (from petroleum!) to run the trains to bring the ethanol to California.    What is truly needed, as I have written elsewhere, is to force every step of the ethanol process to use nothing but ethanol for their fuel.  Then, see how much is left over for sale to gasoline stations.  And, I mean every step.  Farmers tractors for plowing, seeding, cultivating, harvesting, all must burn ethanol.  Trucks to haul the corn to corn refineries must burn ethanol.  All the fertilizer and pesticide plants must burn ethanol, not natural gas or another fuel.  The corn refineries must burn ethanol for any outside fuel purchased.  They can burn the corn cobs if they want.  Then, the trains must burn ethanol to bring the ethanol to California.   Lest anyone say that is not fair, not the way it works, baloney.  Oil refineries have done it for decades.  And still had plenty of product left over for sale.  

++  I love it when one environmental group shoots at another.  This week was rich with such shooting.  Bio-diesel in California (that land of such fiscal restraint) now cannot be stored in underground tanks, at least not unless it is diluted with petroleum-based diesel.  There is a fear that raw bio-diesel will corrode the tank walls, leading to leaks and groundwater contaminaton.   So, the state agency in charge of groundwater ruled that this must be stopped while studies are performed.  The state agency in charge of air quality, ARB, insists that bio-diesel be used in the state.  Hmmm...I suppose they could sue each other.   The result is that above-ground storage tanks will be used, but there are space issues in urban settings.  Not going to happen.  This will be great fun to watch.  

++  Los Angeles is modernizing their major airport, LAX.  Also known as Los Angeles International Airport.  But most people just say LAX.  (El Ay Ex)  The construction projects must meet ever-increasing pollution requirements, especially for air pollution.  Construction vehicles must be equipped with smokestack scrubbers, known as DPFs.  DPF stands for Diesel Particulate Filter.  The Air Resources Board (here they are again) has a list of about 20 such DPFs from various vendors that ARB has verified are up to the task.  These DPFs remove up to 90 percent of the soot from the smokestack, leaving behind a very clean air.  These things are expensive, at around $30,000 each.   I am waiting for the next set of project specifications to require the diesel equipment to run only on bio-diesel.   

++  Last musing for today, and that is for the fire tragedy in Santa Barbara.  This latest wildfire has been burning for four days now, and has consumed hundreds of houses and dislocated thousands of people.  The numbers grow by the hour.  The area is blasted by strong winds, at 50 miles per hour and more.  The area is also very rugged, which means mountains that can only be attacked by air for firefighting.   The local air temperatures are very hot, and the air is dry, at around 90 degrees F and humidities in the low teens or even lower.  All together, this makes for a fire that cannot be stopped.  One of the cases in law school comes to mind, from ancient England.  When a city was faced with an out-of-control fire, the mayor gave the approval to bulldoze several rows of houses to create a fire-break.    One can only wonder at what point the mayor of Santa Barbara does something similar to save the remainder of the city.      

Roger E. Sowell, Esq.

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