Energy/Environment – Page 88 – artdiamondblog.com

Wildcatters Find 80% of Oil in U.S.

Source of image: WSJ article cited below.

(p. A1) David F. Morehouse, senior geologist with the U.S. Department of Energy’s Energy Information Administration, contends there is more new oil to be found in the continental U.S. Finding it, he says, will “depend on people doing the data analysis and, quite frankly, people going in and drilling enough in the right places.”
Mr. Findley, who is 54 years old, did just that. Now production in this part of eastern Montana is growing, and new investors are arriving to explore the potential. At least one midsized firm, Marathon Oil Co., has begun buying leases. Halliburton Co., the big Houston-based oil-services company, has invested with Mr. Findley. The state says the proven oil find in the area will likely be in the range of 150 million barrels, hardly what oil-patch hands call an “elephant,” but nevertheless boosting the nation’s proven oil reserves by about 1%.
. . .
(p. A14) While many people associate big oil finds with big companies, over the years about 80% of the oil found in the U.S. has been brought in by wildcatters such as Mr. Findley, says Larry Nation, spokesman for the American Association of Petroleum Geologists. Wildcatters search for oil, nail down drilling rights, then seek money from banks or bigger companies to extract it.
Mr. Findley grew up in Corpus Christi, Texas, the son of an accountant for a chain of grocery stores. A brother-in-law, a geologist, hired him as a field assistant to hunt for oil in west Texas. “I just fell in love with geology,” he recalls. He graduated from Texas A&M University in 1975 and got a job as a geologist with Tenneco Oil Co. In 1983 he left to found his own Montana-based consulting and exploration company, a one-man operation.
Three years later, world oil prices crashed, and fluctuating prices dogged Mr. Findley as he tried to stay in the business. In the 1990s, the majors left the area in the belief that it was played out. Mr. Findley felt there was more oil to be found and began putting together small exploration deals.
His income had dropped by more than half to $45,000 a year, and he wasn’t sure how much longer that would last. “Many times, my wife and I sat down at the kitchen table and said, ‘What are we going to do next?’ We always came to the same conclusion. [Geology] is what I know. This is what I love. So we just kept going.”

For the full story, see:
JOHN J. FIALKA. “Second Look; Wildcat Producer Sparks Oil Boom On Montana Plains After Majors Pulled Out, Mr. Findley Drilled Anew; Size of Find Still Unclear; A Rival Counts Tanker Trucks.” The Wall Street Journal (Weds., April 5, 2006): A1 & A14.
Source of map: WSJ article cited above.

86% Agree that Government Should Ban Dihydrogen Monoxide

A junior high school student in Idaho, Nathan Zohner, demonstrated in a 1997 science fair project how easy it was to hoodwink a scientifically uninformed public. As described in “The Frankenfood Myth,” 86 percent of the 50 students he surveyed thought dihydrogen monoxide should be banned after they were told that prolonged exposure to its solid form caused severe tissue damage, that exposure to its gaseous form caused severe burns and that it had been found in tumors from terminal cancer patients. Only one student recognized the substance as water, H2O.

For the full commentary, see:
JANE E. BRODY. ” PERSONAL HEALTH; Facing Biotech Foods Without the Fear Factor.” The New York Times (Tues., January 11, 2005): D7.

Nuclear Power Looking “Increasingly Attractive”

(p. A2) Nuclear power has looked increasingly attractive in many nations amid advancing energy prices and concerns about rising emissions believed to cause global warming. Costs for energy sources such as coal have risen amid global expansion and China’s increasing need for raw materials. China and India, especially, are looking to nuclear power as their consumption expands.
Meanwhile, emissions of the gases believed to cause global warming have risen despite efforts in many nations to adhere to the targets set by the Kyoto Protocol.
At the same time, improved reactor design has led to increased interest in the long-dormant U.S. market, which dried up in the early 1980s amid public outcry about safety and investors’ dismay over high costs. Since then, manufacturers have continued to build reactors overseas in Asia and Europe, while the U.S. remains the most coveted market because of its economic might and hunger for new energy sources.

For the full article, see:
DENNIS K. BERMAN. “Toshiba to Buy Nuclear-Power Firm.” The Wall Street Journal (Tues., January 24, 2006): A2.
(Note: A somewhat different version of the article appeared in the online version of the WSJ, under the title: “Japan’s Toshiba Wins Nuclear-Power Assets; Purchase of Westinghouse May Open Door to Markets Like U.S., China and India.”)

The Centrally Planned Economy: “Why doesn’t Wuhan have heating?”

Li Qiao tries to stay warm in unheated apartment in Wuhan. Source of image: online version of WSJ article cited below.

(p. B1) WUHAN, China — As a winter wind howled through this central Chinese city, university lecturer Li Qiao settled down in his two-bedroom apartment for what should have been a cozy evening of reading. Around his apartment were signs of China’s new prosperity: a color television, refrigerator, washing machine and air conditioner. The only thing missing: heating.
Even though winter temperatures in Wuhan dip into the 30s with occasional snow, virtually none of the city’s homes are heated. “The cold is cutting into my bones,” lamented Mr. Li, who was bundled up in a down coat and a quilt, with an electric heater blowing warm air toward him. “Why doesn’t Wuhan have heating?”
Mr. Li isn’t the only one asking. Heating systems are one of the last areas that remain under China’s former centrally planned economy, with government regulators still setting the thermostat for homes, classrooms and offices across the country. Under the policy, which dates back to Mao Zedong in the 1950s, the government provides heat in the northern half of China, and, to save money, it provides no heat in the southern half. As a result, northerners often wilt in steaming apartments, while those in southern provinces shiver through the winter.
With no heat, even residents of modern cities like Shanghai spend much of the winter trying to get warm.
. . .
(p. B2) Mr. Li, the university teacher, and his wife ward off the cold air that seeps into their apartment at the university with an electrical heater, a hot-air fan and a wall unit air-conditioner that also blows out heat. At night, they wriggle into long underwear before piling under two sets of thick quilts. Although he has a three-hour lunch break, Mr. Li seldom goes back to his apartment, opting instead to hole up in his heated office.
His students aren’t so lucky. Classrooms aren’t heated, so they listen to his lectures swathed in down jackets, caps and gloves. Some students even carry hot-water bottles to keep their hands warm and cushions to place on the icy chairs.

For the full story, see:
Cui Rong. “China’s Winter of Discontent; Mao-Era Policy Provides Heat Up North but None in South; Shivering Citizens Are Fed Up.” The Wall Street Journal (Tues., March 14, 2006): B1 & B2.

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

Ethanol Serves Agricultural Lobby

The U.S. imposes a 54-cent-a-gallon tariff on Brazilian ethanol, to discourage competition with domestic ethanol, which receives a 54-cent subsidy from taxpayers. The European Union just slapped new duties on Pakistani ethanol.

This should lay bare the fraud that what’s going here has anything to do with energy security. It has only to do with the agricultural lobby masquerading its interests behind foolish and misleading rhetoric about energy security.

Take the pressure for flex-fuel mandates, requiring auto companies to build cars capable of running on 85% ethanol. Unmodified cars can already burn fuel comprised 10% of ethanol. If we were honestly keen on diversifying supply and squeezing out imported oil, we’d throw open our dense coastal markets to ethanol producers in Brazil, India, Pakistan, Nigeria and Thailand, displacing perhaps 10 billion gallons of current gasoline use without any vehicle modification or taxpayer subsidy at all.

For the full story, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; What’s Wrong with Free Trade in Biofuels?" The Wall Street Journal (Weds., February 22, 2006): A15.

Enron’s Kenneth Rice in Omaha on 9/11/01

Kenneth Rice exiting a Houston federal courthouse on Thursday, Feb. 16, 2006. Source of image: the online version of the Omaha World-Herald article cited below.
A lot of people remember what they were doing when the first jet crashed into the twin towers on 9/11/01. I was listening to a presentation on the potential of broadband given by Kenneth Rice, at a forum sponsored by Creighton University. A day or two earlier, Creighton had presented Rice with a distinguished alumnus award. I don’t remember much detail about Rice’s presentation, but remember thinking that he gave a clear and informative analysis of the potential and risks of the broadband business.

(p. 1D) HOUSTON (AP) – Kenneth Rice, former chief of Enron Corp.’s struggling broadband unit, testified Thursday that his boss, Jeffrey Skilling, directed him to paint a rosy, misleading picture for the Enron board of directors that was in line with false statements Rice said he already made to financial analysts in 2001.
But Rice, the former CEO of Enron Broadband Services, said in his third day on the stand at the fraud and conspiracy trial of Skilling and founder Kenneth Lay that he had no documents and “only my recollection” to back up a conversation he had with Skilling, Enron’s chief executive, as he prepared for a May 2001 meeting of the company’s board.
“What I took from meeting with Mr. Skilling was he wanted me to put a presentation together that was more consistent with the analyst conference and less direct on some of the challenges we were facing at EBS,” Rice said.
In January 2001, Rice told Wall Street analysts who influenced the company’s stock price that the business was well positioned for strong long-term financial performance. In reality, however, Enron’s broadband unit was spending $100 million per quarter and generating little revenue and business, he said.

For the full story, see:
“Skilling said paint rosy picture, Rice says.” Omaha World-Herald (Friday, February 17, 2006): 1D.

Owlish Evidence: More on Why Crichton is Right

Environmentalists have hypothesized that there is a link between harvesting old-growth forests and declines in owl populations. But there is reason to believe that the hypothesis may be false, and apparently environmentalists and the federal government do not have much interest in testing it:

. . . , we know little about the relationship between harvesting and owl populations. One such study — privately funded — infers an inverse relationship between harvesting and owls. In other words, in areas where some harvesting has occurred, owl numbers are increasing a bit, or at least holding their own, while numbers are declining in areas where no harvesting has occurred.
This news will come as no surprise to Oregon, Washington and California timberland owners who are legally required to provide habitat for owls. Their actively managed lands are home to the highest reproductive rates ever recorded for spotted owls. Why is this?
One possible answer is that the anecdotal evidence on which the listing decision was based is incomplete. No one denies the presence of owls in old-growth forests, but what about the owls that are prospering in managed forests and in forests where little old growth remains? Could it be that spotted owls are more resourceful than we think?
We don’t know — and the reason we don’t know is that 16 years ago federal scientists chose to politicize their hypothesis rather than test it rigorously, to flatly reject critiques from biometricians who questioned the statistical validity of the evidence on which the listing decision was based, and to declare with by-god certainty that once the old-growth harvest stopped owl populations would begin to recover.

For the full story, see:
JIM PETERSEN. “RULE OF LAW; Owl Be Damned.” The Wall Street Journal (Sat., February 18, 2006): A9.

“I would have fired me if I was him”

Warren Buffett. Source of image: online version of WSJ article cited below.
A couple of years ago, I think, in the mid-afternoon we went into a nearly deserted Dairy Queen near Dodge and 115th and walked by an old guy eating ice cream with a couple of others (I’m guessing his daughter and grandchild). I said to Jeanette and Jenny something like: if that guy wasn’t dressed so weirdly, I’d say he might be Warren Buffett. He was wearing some kind of overalls with the word WOODS printed in capitals on the back. Suddenly I remembered that I had seen in the paper that Buffett had caddied for Tiger Woods in some sort of celebrity tournament a few weeks earlier. We were tempted to ask for his autograph, but we let him eat his ice cream in peace.

(p. A1) He spends most of his day alone in an office with no computer. He makes swift investment decisions, steers clear of meetings and advisers, eschews set procedures and doesn’t require frequent reports from managers.
. . .
(p. A5A (sic)) Mr. Buffett tends to stick to investments for the long haul, even when the going gets bumpy. Mr. Sokol recalls bracing for an August 2004 meeting at which he planned to break the news to Mr. Buffett that the Iowa utility needed to write off about $360 million for a soured zinc project. Mr. Sokol says he was stunned by Mr. Buffett’s response: “David, we all make mistakes.” Their meeting lasted only 10 minutes.
“I would have fired me if I was him,” Mr. Sokol says.
“If you don’t make mistakes, you can’t make decisions,” Mr. Buffett says. “You can’t dwell on them.” Mr. Buffett notes that he has made “a lot bigger mistakes” himself than Mr. Sokol did.

For the full article, see:
SUSAN PULLIAM and KAREN RICHARDSON. “Warren Buffett, Unplugged; The hands-off billionaire shuns computers, leaves his managers alone, yet has notched huge returns. He just turned 75. Can anyone fill his shoes?” THE WALL STREET JOURNAL (Sat., November 12, 2005): A1 & A5A.

Source of graph: online version of WSJ article cited above.

“Growing Recognition of Economic Costs” of Koyoto Protocol

Commentary on the Kyoto Protocol:

(p. 3) . . . the current stalemate is not just because of the inadequacies of the protocol. It is also a response to the world’s ballooning energy appetite, which, largely because of economic growth in China, has exceeded almost everyone’s expectations. And there are still no viable alternatives to fossil fuels, the main source of greenhouse gases.

Then, too, there is a growing recognition of the economic costs incurred by signing on to the Kyoto Protocol.

As Prime Minister Tony Blair of Britain, a proponent of emissions targets, said in a statement on Nov. 1: ”The blunt truth about the politics of climate change is that no country will want to sacrifice its economy in order to meet this challenge.”

This is as true, in different ways, in developed nations with high unemployment, like Germany and France, as it is in Russia, which said last week that it may have spot energy shortages this winter.
. . .
The only real answer at the moment is still far out on the horizon: nonpolluting energy sources. But the amount of money being devoted to research and develop such technologies, much less install them, is nowhere near the scale of the problem, many experts on energy technology said.

Enormous investments in basic research have to be made promptly, even with the knowledge that most of the research is likely to fail, if there is to be any chance of creating options for the world’s vastly increased energy thirst in a few decades, said Richard G. Richels, an economist at the Electric Power Research Institute, a nonprofit center for energy and environment research.

”The train is not leaving the station, and it needs to leave the station,” Mr. Richels said. ”If we don’t have the technologies available at that time, it’s going to be a mess.”

For the full commentary, see:
ANDREW C. REVKIN. “THE WORLD; On Climate Change, a Change of Thinking.” The New York Times, Section 4 (Sun., December 4, 2005): 3.
(Note: ellipsis added.)

The Open Road

A strong argument could be made that the automobile is one of the two most liberating inventions of the past century, ranking only behind the microchip. The car allowed even the common working man total freedom of mobility — the means to go anywhere, anytime, for any reason. In many ways, the automobile is the most egalitarian invention in history, dramatically bridging the quality-of-life gap between rich and poor. The car stands for individualism; mass transit for collectivism. Philosopher Waldemar Hanasz, who grew up in communist Poland, noted in his 1999 essay “Engines of Liberty” that Soviet leaders in the 1940s showed the movie “The Grapes of Wrath” all over the country as propaganda against the evils of U.S. capitalism and the oppression of farmers. The scheme backfired because “far from being appalled, the Soviet viewers were envious; in America, it seemed, even the poorest had cars and trucks.”
. . .
The simplistic notion taught to our second-graders, that the car is an environmental doomsday machine, reveals an ignorance of history. When Henry Ford first started rolling his Black Model Ts off the assembly line at the start of the 20th century, the auto was hailed as one of the greatest environmental inventions of all time. That’s because the horse, which it replaced, was a prodigious polluter, dropping 40 pounds of waste a day. Imagine what a city like St. Louis smelled like on a steamy summer afternoon when the streets were congested with horses and piled with manure.
. . .
There’s a perfectly good reason that the roads are crammed with tens of millions of cars and that Americans drive eight billion miles a year while spurning buses, trains, bicycles and subways. Americans are rugged individualists who don’t want to cram aboard buses and subways. We want more open roads and highways, and we want energy policies that will make gas cheaper, not more expensive. We want to travel down the road from serfdom and the car is what will take us there.

For the full commentary, see:
Moore, Stephen. “Supply Side; The War Against the Car.” The Wall Street Journal (Fri., November 11, 2005): A10.

Land Next to Proposed Ethanol Plant Suddenly Declared “Blighted”

(p. 1A) ORD, Neb. – Carl and Charlene Schauer were upset and more than a little offended when the City Council declared their 50-acre cornfield “blighted and substandard.”
Nothing is wrong with the cornfield, located almost five miles outside of town.
Nothing – except its proximity to the site of a proposed $75 million ethanol plant that local officials say will bring 34 jobs to the community of 2,300.
Invented to give cities the power to enlist private development in clearing slums, the “blighted and substandard” designation has become a critical tool for economic development projects across Nebraska.
It allows cities to use property taxes to help pay development costs on behalf of private enterprise, under a mechanism called tax increment financing. That allows increased property taxes generated by improvements of blighted property to be used to help fund the redevelopment.
Blighted land even can be condemned through eminent domain, then turned over to private developers. That practice was upheld by the U.S. Supreme Court last year.
Stunned by that ruling, several Nebraska lawmakers have introduced legislation to prevent local governments from using eminent domain to acquire private property that would be turned over to another private (p. 2A) owner for economic development.
Three bills (Legislative Bills 924, 910 and 799) specifically protect agricultural land, forbidding governments to declare it blighted. A fourth bill (LB 1252) would limit eminent domain to public projects like parks and roads.
And State Sen. Matt Connealy of Decatur proposes a constitutional amendment (LR 272 CA) to remove the requirement that land be designated as substandard and blighted before cities can use property taxes to help private developers pay project costs.
Connealy said it appears some smaller cities are pushing the boundaries of the blight definition.
The Ord ethanol project has been touted by Gov. Dave Heineman, the New York Times and others as an example of small-town hustle and progress.
Carl Schauer’s son, Curt, and his wife, Susan, however, have gone to court to try to stop it.
They live directly across Nebraska Highway 11 from Carl Schauer’s cornfield. Although not included in the proposed ethanol site, their home is less than 1,000 feet from where the plant would be built. They are worried about noise, smell, traffic and health hazards from the around-the-clock operation.
“I guess we’re the sacrificial lambs in the name of economic development,” said Susan Schauer, a licensed practical nurse.
A local official said the city does not want to take even the smallest part of Curt Schauer’s property if he doesn’t want to sell it.
“I don’t think anybody in this community would ever do that,” said Bethanne Kunz of the Valley County Economic Development Board.
After Schauer rejected an offer to buy a strip of his land for a railcar loading area, Kunz said, the ethanol site was reconfigured to leave out Schauer’s property. The field was annexed by the city as part of a redevelopment zone under a Nebraska law that allows small towns and villages to acquire outlying land through “remote annexation.”
The Schauer family still doesn’t know why the field was declared blighted – and it’s worried that the designation could spell trouble. Could their land be taken if another new factory wanted to locate in the area?
“I think it’s wrong that government can take private property and turn it over to private enterprise,” said State Sen. Tom Baker of Trenton.
Government already offers plenty of help – including grants and tax breaks – to business to encourage development, said State Sen. Deb Fischer of Valentine. “Does government have to give away the farm, too?”

Read the full story at:
REED, LESLIE. “‘Blight’ label raises concerns.” Omaha World-Herald (Sunrise Edition, Saturday, January 21, 2006): A1 & A2.