Energy/Environment – Page 85 – artdiamondblog.com

Global Warming Ranked at Bottom of World Priorities by Economists and Ambassadors

Bjorn Lomborg. Source of image: online version of WSJ article cited below.

(p. A10) Bjorn Lomborg busted — and that is the only word for it — onto the world scene in 2001 with the publication of his book "The Skeptical Environmentalist." A one-time Greenpeace enthusiast, he’d originally planned to disprove those who said the environment was getting better. He failed. And to his credit, his book said so, supplying a damning critique of today’s environmental pessimism. Carefully researched, it offered endless statistics — from official sources such as the U.N. — showing that from biodiversity to global warming, there simply were no apocalypses in the offing. "Our history shows that we solve more problems than we create," he tells me. For his efforts, Mr. Lomborg was labeled a heretic by environmental groups — whose fundraising depends on scaring the jeepers out of the public — and became more hated by these alarmists than even (if possible) President Bush.

Yet the experience left Mr. Lomborg with a taste for challenging conventional wisdom. In 2004, he invited eight of the world’s top economists — including four Nobel Laureates — to Copenhagen, where they were asked to evaluate the world’s problems, think of the costs and efficiencies attached to solving each, and then produce a prioritized list of those most deserving of money. The well-publicized results (and let it be said here that Mr. Lomborg is no slouch when it comes to promoting himself and his work) were stunning. While the economists were from varying political stripes, they largely agreed. The numbers were just so compelling: $1 spent preventing HIV/AIDS would result in about $40 of social benefits, so the economists put it at the top of the list (followed by malnutrition, free trade and malaria). In contrast, $1 spent to abate global warming would result in only about two cents to 25 cents worth of good; so that project dropped to the bottom.

"Most people, average people, when faced with these clear choices, would pick the $40-of-good project over others — that’s rational," says Mr. Lomborg. "The problem is that most people are simply presented with a menu of projects, with no prices and no quantities. What the Copenhagen Consensus was trying to do was put the slices and prices on a menu. And then require people to make choices."

Easier said than done. As Mr. Lomborg explains, "It’s fine to ask economists to prioritize, but economists don’t run the world." . . .

So all the more credit to Mr. Lomborg, who several weeks ago got his first big shot at reprogramming world leaders. His organization, the Copenhagen Consensus Center, held a new version of the exercise in Georgetown. In attendance were eight U.N. ambassadors, including John Bolton. (China and India signed on, though no Europeans.) They were presented with global projects, the merits of each of which were passionately argued by experts in those fields. Then they were asked: If you had an extra $50 billion, how would you prioritize your spending?

Mr. Lomborg grins and says that before the event he briefed the ambassadors: "Several of them looked down the list and said ‘Wait, I want to put a No. 1 by each of these projects, they are all so important.’ And I had to say, ‘Yeah, uh, that’s exactly the point of this exercise — to make you not do that.’" So rank they did. And perhaps no surprise, their final list looked very similar to that of the wise economists. At the top were better health care, cleaner water, more schools and improved nutrition. At the bottom was . . . global warming.

For the full interview, see:

KIMBERLEY A. STRASSEL. "The Weekend Interview with Bjorn Lomborg; Get Your Priorities Right." The Wall Street Journal (Sat., July 8, 2006): A10.

(Note: first ellipsis is added; the second ellipsis is in the original.)

Source of book image: http://www.amazon.com/gp/product/customer-reviews/0521010683/ref=cm_cr_dp_2_1/104-0101568-2686373?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Government Corn Subsidies Are Inefficient

(p. 19) That the United States is using corn, among the more expensive crops to grow and harvest, to help meet the country’s fuel needs is a testament to the politics underlying ethanol’s 30-year rise to prominence. Brazilian farmers produce ethanol from sugar at a cost roughly 30 percent less.

But in America’s farm belt, politicians have backed the ethanol movement as a way to promote the use of corn, the nation’s most plentiful and heavily subsidized crop. Those generous government subsidies have kept corn prices artificially low — at about $2 a bushel — and encouraged flat-out production by farmers, leading to large surpluses symbolized by golden corn piles towering next to grain silos in Iowa and Illinois.

For the full story, see:

ALEXEI BARRIONUEVO. "THE ENERGY CHALLENGE: A Modern Gold Rush; For Good or Ill, Boom in Ethanol Reshapes Economy of Heartland." The New York Times, Section 1 (Sunday, June 25, 2006): 1 & 19.

Chinese Central Planning Turns Lake Into Desert

Tall grass grows where Qingtu Lake used to be; and the desert encroaches on the grass. Source of image: online version of the NYT article cited below.

(p. A1) An ever-rising tide of sand has claimed grasslands, ponds, lakes and forests, swallowed whole villages and forced tens of thousands of people to flee as it surges south and threatens to leave this ancient Silk Road greenbelt uninhabitable.

Han Chinese women here cover their heads and faces like Muslims to protect against violent sandstorms. Farmers dig wells down hundreds of feet. If they find water, it is often brackish, even poisonous.

Chinese leaders have vowed to protect Minqin and surrounding towns in Gansu Province. The area divides two deserts, the Badain Jaran and the Tengger, and its precarious state threatens to accelerate the spread of barren wasteland to the heart of China.

The national 937 Project, set up to fight the encroaching desert, estimated in April that 1,500 square miles of land, roughly the size of (p. A14) Rhode Island, is buried each year. Nearly all of north central China, including Beijing, is at risk.

Expanding deserts and a severe drought are also making this a near-record year for dust storms carried east in the jet stream. Sand squalls have blanketed Beijing and other northern cities, leaving a stubborn yellow haze in the air and coating roads, buildings, cars and lungs.

. . .

Government-led cultivation, deforestation, irrigation and reclamation almost certainly contributed to the desert’s advance, which began in the 1950’s and the 1960’s, and has accelerated. Critics warn that some lessons of past engineering fiascoes remained unlearned.

During the ill-fated Great Leap Forward in the late 1950’s, Mao ordered construction of the giant Hongyashan reservoir near Minqin, which diverted the flow of the Shiyang River and runoff from the Qilian Mountains into an irrigation system. It briefly made Minqin’s farmland fertile enough to grow grain.

But Minqin is a desert oasis that gets almost no rainfall. The Shiyang and its offshoots had been its ecological lifeline. With the available water resources monopolized for farming, nearly all other land became a target for the desert.

Today, patches of farmland that cling to irrigation channels are emerald islands in a sea of beige, an agricultural Palm Springs.

Even the irrigated plots risk extinction. Competing reservoirs on upper reaches of the Shiyang reduced its flow so severely by 2004 that the Hongyashan went dry for the first time since its construction in 1959. It was refilled after Beijing ordered an emergency diversion of water from the Yellow River, which now runs dry through much of the year here in its northern reaches.

Local officials, whose promotions in the government and Communist Party hierarchy depend more on increasing economic output than on improving the environment, have tried desperately to preserve Minqin’s farming.

. . .

"This is not a natural disaster — it is man-made," Mr. Chai said. "And unless people study the lesson of Minqin, it will repeat itself clear across China."

For the full story, see:

JOSEPH KAHN. "A Sea of Sand Is Threatening China’s Heart." The New York Times (Thurs., June 8, 2006): A1 & A14.

Women wear headresses and face masks, not out of modesty, but to protect against the sand. Source of photo: online versio of the NYT article cited above.

Close, and distant, maps of the areas effected. Source of maps: online version of the NYT article cited above.

Entrepreneur Risks His Money; Government Risks Yours

George B. Kaiser. Source of photo: http://www.forbes.com/finance/lists/10/2003/LIR.jhtml?passListId=10&passYear=2003&passListType=Person&uniqueId=OXNB&datatype=Person

(p. A1) In 2002, Kathleen Eisbrenner, then an executive at El Paso Corp., spent months trying in vain to find a buyer for the company’s novel technology for importing natural gas.

In February 2003, she left for a vacation in Cancun, convinced that El Paso would be forced to abandon the project. As she sat on the beach one afternoon, she got a call on her cellphone. A colleague had a message from an intermediary, who said he had an "interested buyer," identified only as a "Midwest billionaire."

"It’s Warren Buffett calling," she recalls telling her husband as they clinked pina colada glasses together in celebration. "I was absolutely sure."

But it wasn’t Mr. Buffett. It was another billionaire named George B. Kaiser.

. . .

(p. A6) . . . , Ms. Eisbrenner called Nicolas Saverys, the chief executive of Belgium-based Exmar NV. Exmar was building two of the new-style LNG vessels. Ms. Eisbrenner gushed that there was a wealthy buyer. Mr. Saverys was initially skeptical. He changed his mind in late February 2003 after meeting Mr. Kaiser in New York. "At last, I was talking to someone who was putting his own money at stake," he says.

Mr. Saverys sealed the relationship by presenting Mr. Kaiser with a box of pralines from Belgian chocolatier Pierre Marcolini at their second meeting. Mr. Kaiser, an avowed chocoholic, returned the favor a couple of weeks later in Tulsa, giving Mr. Saverys a box of candy made by Christine Joseph, a Tulsa chocolatier who also was born in Belgium.

Convinced that Energy Bridge could work, Mr. Kaiser agreed to take over the business, closing the deal last December. El Paso paid him $75 million; in return, he assumed a $120 million obligation to Exmar. El Paso also agreed to pay to install the underwater pipeline connection that carries the gas from the ship to existing pipelines in the Gulf of Mexico.

The bulk of the $660 million Mr. Kaiser invested went to modify three specially equipped tankers and to charter them for 20 years. If Energy Bridge opens on time in January, it will be at least two and a half years ahead of any new terminals being developed by other energy companies. In addition, civic leaders in Massachusetts and Rhode Island, eager to keep LNG terminals and tankers far from the mainland, are encouraging Mr. Kaiser to build an offshore tanker-based project along the Atlantic coast of the U.S.

Mr. Kaiser, who declined requests for an interview but answered some questions by e-mail, concedes he doesn’t like "taking a risk on an undemonstrated technology." But he says that the chance to import natural gas quickly was "such an obvious and alluring business opportunity" that he felt compelled to get Energy Bridge into operation. He’s betting that new LNG-export facilities expected to come online next year in Egypt, Trinidad and Nigeria will create enough extra supply to provide him with ample LNG.

. . .

He says he acquired Energy Bridge as a challenge. "I don’t gain much pleasure from personal expenditure or recognition," he wrote in an e-mail. "And any gains I make from the enterprise will accrue to charity. But I enjoy problem solving and I want to keep my brain active to forestall (or at least diminish) atrophy."

For the full story, see:

Russell Gold. "Liquid Assets: A Billionaire Takes a Gamble To Fix Natural-Gas Shortage; Mr. Kaiser Plans to Shift Processing Onto Tankers, Avoiding Terrorism Fears; A Deal Sealed With Sweets." The Wall Street Journal (Fri., July 23, 2004): A1 & A6.

(Note: ellipses added.)

Why Fear Nuclear When Coal is More Deadly?

The skin of Timothy Hall’s hands melted together in a coal mine accident in September 2005. Source of image: online version of the WSJ article cited below.

I am not against coal. But I am puzzled why public sentiment and government policy discourage new nuclear reactors. Per unit of energy produced, isn’t nuclear safer than coal?

(p. A1) MCDOWELL, Ky. — Last September, Timothy D. Hall was drilling holes in the deepest part of a low-roofed coal mine when an explosion thrust him from his drill machine and set him on fire.

He crawled 45 feet to a mudhole inside the mine to douse the flames. The fireball melted the bill of his hard hat, charred his oxygen canister and burned his jacket, according to government investigators. After he was carried outside, but before any pain set in, he was shocked to see the flesh of his fingers had melted together.

For the full story, see:

KRIS MAHER. "Deep Trouble As Demand for Coal Rises, Risky Mines Play Bigger Role Small Operations Overall Have Higher Fatality Rates; The Dangers of ‘Dogholes’ Long-Term, a Safer Industry." The Wall Street Journal (Thurs., June 1, 2006): A1 & A10.

In the graphic below, note that the long-term trend has been a decline in fatalities in coal production. But the fatalities remain higher, per unit of energy produced, than the fatalities for nuclear energy production.

Source of graphic: online version of the WSJ article cited above.

Co-Founder of Home Depot, Funds Ambitious Georgia Aquarium

Scenes from the Georgia Aquarium. Source of photos: online version of the NYT article cited below.

(p. B1) One of its sensations, . . ., is simply its ambition — look what we have gathered and constructed! The Georgia Aquarium is billed as the world’s largest, and one can’t escape statistics of size and number: over 100,000 fish are displayed in five galleries and 60 habitats in the more than 500,000 square foot building; there is a 6.2 million gallon pool in which 1.8 million pounds of salt and minerals have been dissolved since last October and in which two whale sharks — the world’s largest fish — swim, displaying themselves to visitors through acrylic walls that are two feet thick. A stainless steel "commissary" behind the scenes holds 20,000 pounds of frozen food at minus 20 degrees Fahrenheit.

This aquarium is also somewhat unusual in its origins: it is not created by a municipality, or a society of subscribers like those that founded the earliest public zoos. It is almost completely the creation of a single man, Bernard Marcus, co-founder of the Home Depot, as a "gift" to the people of the city in which his company began. He and his wife, Billi, donated $250 million of the $290 million cost.

. . .

(p. B7) The aquarium has been an overwhelming popular success. Even with admission prices of $22.75 for adults ($17 for children), demand has been so great that the building is often sold out. Tickets come with timed entrances, and 290,000 annual passes, costing almost $60 for adults, were purchased before their sale was stopped in January. A million visitors have come since the opening.

For the full story, see:

EDWARD ROTHSTEIN. "Aquarium Review | The Georgia Aquarium A Hundred Thousand Fish, Behind a Pane 2 Feet Thick." The New York Times (Thurs., March 23, 2006): B1 & B7.

(Note: ellipses added.)

Hydrocarbons Exist in Abundance

Source of book image: http://www.amazon.ca/exec/obidos/tg/detail/-/books/0521679796/reviews/702-4209854-6789623

In a useful commentary, Holman Jenkins quotes Exxon CEO Rex Tillerson:

"It is true that the age of ‘easy oil’ is over. What many fail to realize is that it has been over for decades. Our industry constantly operates at the edge of technical possibility, constantly developing and applying new technologies to make those possibilities a reality," he told a group in Washington last week.

Doubters might consult a new book by energy economist Mark Jaccard, entitled "Sustainable Fossil Fuels," winner of Canada’s Donner Prize. He argues that hydrocarbons, in the form of oil, gas and coal, exist in such abundance, the challenge of technology is how to burn them more cleanly, not how to survive without them.

For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; On Gasoline, Voters Get the Politicians They Deserve." The Wall Street Journal (Weds., May 10, 2006): A19.

The full reference to the Jaccard book mentioned by Holman, is:

Jaccard, Mark. Sustainable Fossil Fuels: The Unusual Suspect in the Quest for Clean and Enduring Energy. Cambridge University Press, 2006.

An Inconvenient Truth About “An Inconvenient Truth”

Al Gore. Source of photo: http://in.news.yahoo.com/051008/137/60gzj.html

(p. A25) If Al Gore’s new movie weren’t titled ”An Inconvenient Truth,” I wouldn’t have quite so many problems with it.

. . .

Gore shows the obligatory pictures of windmills and other alternative sources of energy. But he ignores nuclear power plants, which don’t spew carbon dioxide and currently produce far more electricity than all ecologically fashionable sources combined.

A few environmentalists, like Patrick Moore, a founder of Greenpeace, have recognized that their movement is making a mistake in continuing to demonize nuclear power. Balanced against the risks of global warming, nukes suddenly look good — or at least deserve to be considered rationally. Gore had a rare chance to reshape the debate, because a documentary about global warming attracts just the sort of person who marches in anti-nuke demonstrations.

Gore could have dared, once he enticed the faithful into the theater, to challenge them with an inconvenient truth or two. But that would have been a different movie.

For the full commentary, see:

JOHN TIERNEY. "Gore Pulls His Punches." The New York Times (Tuesday, May 23, 2006): A25.

We Should Reward Those Who Take Risks to Produce What We Need

On the Democratic and Republican-in-Name-Only side, we have the idea of "windfall profits taxes" on energy companies. These would presumably mandate a desirable level of corporate profits in one sector on which we depend. (And how long do you think it would apply to only one industry?) If profits exceeded that level, they would be taxed.

As far as I can tell, there is no plan to give a rebate to the companies if their profits have fallen below that desired level.

In other words, the plan is to send this message to energy-company investors, including retirees and pension funds: "Yes, we are in a situation of oil and gas shortage. Yes, we want you to risk billions of dollars exploring for and producing and refining oil and processing gas. But if you succeed for any reason, and even if no price-fixing is found, we will punish you for it."

This is what I would call confusion. You usually get more of something by rewarding people for doing it or producing it, not by punishing them for doing it or producing it.

Yes, the human instinct of envy demands that we get some licks in against people who are doing well, even if we are doing only slightly less well ourselves. But economies built on the politics of envy are rarely successful. Ask the Cambodians or the Chinese or the Russians before they went capitalist.

For the full commentary, see:

BEN STEIN. "Everybody’s Business; A Quick Course in the Economics of Confusion." The New York Times (Sun., May 28, 2006):

Current Cost of Gas Needed to Drive a Mile, Is Not High, by Historical Standards

Source of graphic: p. C1 of NYT article cited below.

(p. C1) The price of gasoline is hovering around $3 a gallon, and politicians are falling over each other to pander to voters’ gas fears. In a recent Gallup Poll, 70 percent of people said they favored price controls, a relic of Richard Nixon’s day.

But it’s time to take a deep breath and consider a radical fact: gas still isn’t all that expensive. I’m not just talking about the disparity between prices here and in Europe, where gas taxes are much higher. What really matters to people is the cost of the gas that is needed to drive a mile, a function of both the price of oil and the fuel efficiency of cars.

By this measure, gas for the average American now costs about what it did throughout the 1960’s and early 70’s and much less than in the early 80’s. The 1990’s, in other words, were the big exception.

For the full commentary, see:

David Leonhardt. "The High Costs of Cheap Gas and Vice Versa." The New York Times (Weds., May 10, 2006): C1 & C11.

Charlie Munger Calls Ethanol “Stupid”

Charlie Munger. Source of image: http://daily.stanford.edu/tempo?page=content&id=16135&repository=0001_article#

Charlie Munger is the number two executive, next to Warren Buffett, at Berkshire Hathaway. He is old enough, and successful enough, and gutsy enough, and curmudgeony enough, to call ethanol "stupid" while in the "cornhusker state" for the company’s annual meeting. (Of course, he wasn’t running for public office, and knew he would soon be flying back to his home in California.)

Munger said using ethanol for fuel seems "stupid" to him because it takes more energy to create than it produces as a fuel. Buffett said there are so many ethanol plants, existing or planned, that he doesn’t see how they can all continue operating profitably.

For the full article, see:

STEVE JORDON and JONATHAN WEGNER. "Berkshire Notes: Clayton’s Excutives Double Up." Omaha World-Herald (Sunday, May 7, 2006): 1D.

(Note: the annual meeting was held on Sat., May 6, 2006)