Wildcatters Find 80% of Oil in U.S.

FindleyRichardL.gif 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.

Solution to Problems in Health Care and Higher Education: Change the Incentive Structures


Vernon Smith, one of the 2002 recipients of the Nobel Prize in economics, advocates fundamental institutional reform:

Physicians and medical organizations face escalating administrative costs of complying with ever more detailed regulations. The system is overwhelmed by the administrative cost of attempting to control the cost of medical service delivery. In education, university budget requests are denied by the states who also limit the freedom of universities to raise tuition.
If there is a solution to this problem, it will take the form of changing the incentive structure: empowering the consumer by channeling third-party payment allowances through the patients or students who are choosing and consuming the service. Each pays the difference between the price of the service and the insurance or subsidy allowance. Since he who pays the physician or college calls the tune, we have a better chance of disciplining cost and tailoring services to the customer’s willingness to pay.
Many will say that neither the patients nor the students are competent to make choices. If that is true today, it is mostly due to the fact that they cannot choose and have no reason to become competent! Service providers are oriented to whoever pays: physicians to the insurance companies and the government; universities to their legislatures. Both should pay more heed to their customers — which they will if that is where they collect their fees.



For the full commentary, see:
VERNON L. SMITH. “Trust the Customer!” The Wall Street Journal (Weds., March 8, 2006): A20.

United States Still Has Vitality in Research and Innovation

Has the United States lost its vitality? No. Americans remain the hardest working people on the face of the earth and the most productive. As William W. Lewis, the founding director of the McKinsey Global Institute, wrote, ”The United States is the productivity leader in virtually every industry.” And productivity rates are surging faster now than they did even in the 1990’s.
Has the United States stopped investing in the future? No. The U.S. accounts for roughly 40 percent of the world’s R. & D. spending. More money was invested in research and development in this country than in the other G-7 nations combined.
Is the United States becoming a less important player in the world economy? Not yet. In 1971, the U.S. economy accounted for 30.52 percent of the world’s G.D.P. Since then, we’ve seen the rise of Japan, China, India and the Asian tigers. The U.S. now accounts for 30.74 percent of world G.D.P., a slightly higher figure.
What about the shortage of scientists and engineers? Vastly overblown. According to Duke School of Engineering researchers, the U.S. produces more engineers per capita than China or India. According to The Wall Street Journal, firms with engineering openings find themselves flooded with résumés. Unemployment rates for scientists and engineers are no lower than for other professions, and in some specialties, such as electrical engineering, they are notably higher.
Michael Teitelbaum of the Alfred P. Sloan Foundation told The Wall Street Journal last November, ”No one I know who has looked at the data with an open mind has been able to find any sign of a current shortage.” The G.A.O., the RAND Corporation and many other researchers have picked apart the quickie studies that warn of a science and engineering gap. ”We did not find evidence that such shortages have existed at least since 1990, nor that they are on the horizon,” the RAND report concluded.
. . .
. . . , the American workplace is so competitive, companies are compelled to promote lifelong learning. A U.N. report this year ranked the U.S. third in the world in ease of doing business, after New Zealand and Singapore. The U.S. has the second most competitive economy on earth, after Finland, according the latest Global Competitiveness Report. As Michael Porter of Harvard told The National Journal, ”The U.S. is second to none in terms of innovation and an innovative environment.”

For the full commentary, see:
DAVID BROOKS. “The Nation of the Future.” The New York Times (Thursday, February 2, 2006): A23.

Getting the Job Done: “Monk” and “House” Celebrate Quirky, Intelligent Competence


Source of image: http://www.usanetwork.com/series/monk/theshow/characterprofiles/tony/index.html#
“Monk” and “House” on the USA Network present suspenseful plots, and intelligent dialogue. But, more importantly, they present unusual “characters” for television: Monk and House are primarily concerned, not with their social standing or sex life, but with getting important jobs done–for Monk, solving murders, for House, curing diseases. One possible moral: maybe it’s OK to be intense in the service of a good cause?

An episode of ”Monk,” in which the title character — an obsessive-compulsive private eye played by Tony Shalhoub, below — suffered amnesia after a blow to the head, was the most-watched show on advertiser-supported cable for the week that ended Jan. 22, with an audience of 6 million. USA Network, where ”Monk” lives, was again the No. 1 basic-cable channel in prime time for that week. USA is also benefiting from reruns of the Fox medical show ”House,” which it began broadcasting earlier in the month: the ”House” that ran after ”Monk” on Jan. 20 attracted 3.79 million viewers.

Source:
KATE AURTHUR. (sic) “Arts, Briefly; ‘Monk’ Strong on Cable.” The New York Times (Mon., January 30, 2006): E2.

Private Health Care Taking Root in Canada

TORONTO, Feb. 19 – The cracks are still small in Canada’s vaunted public health insurance system, but several of its largest provinces are beginning to open the way for private health care eventually to take root around the country.
Last week Quebec proposed to lift a ban on private health insurance for several elective surgical procedures, and announced that it would pay for such surgeries at private clinics when waiting times at public facilities were unreasonable.
The proposal, by Premier Jean Charest, who called for ”a new era for health care in Quebec,” came in response to a Supreme Court decision last June that struck down a provincial law that banned private medical insurance and ordered the province to initiate a reform program within a year.
The Supreme Court decision ruled that long waits for various medical procedures in the province had violated patients’ ”life and personal security, inviolability and freedom,” and that prohibition of private health insurance was unconstitutional when the public health system did not deliver ”reasonable services.”

For the full story, see:
CLIFFORD KRAUSS. “Ruling Has Canada Planting Seeds of Private Health Care.” The New York Times (Mon., February 20, 2006): A4.

The Market Solution to Email Spam

A COMPANY called Goodmail Systems thinks it has come up with a potential (and partial) solution to the problem of spam and fraud on the Internet. According to Goodmail, market forces are the answer, rather than the kinds of ineffective regulations that have so far failed to solve the problems.
. . .
What shocks me most about the opposition to Goodmail is that people who claim to believe in the free and open Internet, with its welcome attitude to innovation, want to shut down an idea. That’s wrong.
If people like those little stamps that mark their mail as safe and wanted or as commercial transactions, then let the customers have them. And let other companies compete with Goodmail to offer better and less expensive service.
Goodmail isn’t good because it’s new, but neither is it bad because it’s new. If it’s a good model, it will succeed and improve over time. If it’s a bad model, it will fail. Why not let the customers decide?

For the full commentary, see:
ESTHER DYSON. “You’ve Got Goodmail. The New York Times (Fri., March 17, 2006): A23.

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.”)

‘Is he not a manly man?’

Twenty-five years ago today, President Ronald Reagan was shot.  Sometimes they say that you only know a person’s character when they are sorely tested.   Well, when Ronald Reagan was sorely tested, he engaged in his usual optimistic, self-deprecating banter with those around him.   ‘Sorry, honey, I forgot to duck’ he said to Nancy; and ‘I sure hope you’re a Republican’ to the surgeon.

By his manner, the great communicator communicated that random acts of violence are not what is important in life.

What I remember most from the first couple of days after the shooting was a
packed news conference with Reagan’s doctors at the hospital.   I remember
an Hispanic reporter, in broken English, praising Reagan’s joking and then
asking Reagan’s doctor, ‘Is he not a manly man?’   The doctor looked
puzzled, and without commenting on the question, moved on.   But I thought
it was a good question—with an obvious answer.

Contrasting Planners with Searchers in Economic Development



Source of book image: http://www.amazon.com/gp/product/1594200378/sr=8-1/qid=1143511279/ref=pd_bbs_1/102-0403843-7507349?%5Fencoding=UTF8

A professor at New York University and a senior fellow at the Center for Global Development, Easterly spent most of his career as an economist at the World Bank. He had to leave that job after publishing his iconoclastic 2001 book, “The Elusive Quest for Growth,” which skillfully combined a history of economists’ growth theories with a devastating empirical analysis of the failure of international efforts to spur third world development. The book’s theme was “incentives matter.”
In “The White Man’s Burden,” Easterly turns from incentives to the subtler problems of knowledge. If we truly want to help the poor, rather than just congratulate ourselves for generosity, he argues, we rich Westerners have to give up our grand ambitions. Piecemeal problem-solving has the best chance of success.
He contrasts the traditional “Planner” approach of most aid projects with the “Searcher” approach that works so well in the markets and democracies of the West. Searchers treat problem-solving as an incremental discovery process, relying on competition and feedback to figure out what works.
. . .
“The White Man’s Burden” does not match “The Elusive Quest for Growth” as a tour de force. Easterly is doing something harder here: not merely cataloging past failures but trying to suggest a more promising approach. Unfortunately, his alternative is still underdeveloped, devolving at times into slogans.
After all, Searchers plan, too. The question is not whether to plan, but who makes the plans, how they are changed and where feedback comes from. “The White Man’s Burden” underplays the essential role of competition, not only in markets but between political jurisdictions.

For the full review, see:
VIRGINIA POSTREL. “The Poverty Puzzle.” The New York Times, Section 7 (Sun., March 19, 2006): 12.
For Easterly’s latest book, see:
Easterly, William. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. The Penguin Press, 2006. 436 pp. $27.95.

Justice Souter’s Home to Become “Lost Liberty Hotel”

LostLIbertyHotel.jpg
Source of image: http://www.cafepress.com/freestarmedia.24473311

WEARE, N.H. – When we reached Justice David Souter’s home, a ramshackle old farmhouse along a dirt road, Keith Lacasse explained his plans for it if he’s voted onto the town’s Board of Selectmen in the election today.
The first plan, which Lacasse and his friends drew up right after hearing of Souter’s vote in the Kelo eminent-domain case last year, was for the town to seize Souter’s property and turn it into a park with a monument to the Constitution. But then Lacasse, a local architect, switched to an idea proposed by an activist from California: turning it into the Lost Liberty Hotel.
”Actually, it would be more like a bed and breakfast,” Lacasse said. ”We’d use the front of the house for a cafe and a little museum. There’d be nine suites, with a black robe in each of the closets.”
. . .
Most Americans have the traditional idea that property can be taken for ”public use” if it is actually going to be used by the public as, for example, a road or a park. But that definition gradually expanded over the last half-century as the Supreme Court ruled that property could be seized and turned over to private parties if there were special circumstances and an overriding public benefit, like eliminating ”blight” in a poor Washington neighborhood or breaking up a land oligopoly in Hawaii.
The Kelo case, however, went way beyond those decisions, allowing the town of New London to seize property that wasn’t blighted simply because it thought it could find a developer to make a more profitable use of the property. It was a new version of the field of dreams theory: if you tear it down, they will come.
”The Kelo decision wasn’t compelled by legal precedents,” says Richard Epstein, a law professor at the University of Chicago. ”It wasn’t a case of eliminating blight or breaking up an oligopoly. There was no precedent for kicking people out of their private homes just to warehouse the land for future development.”
The Kelo case was an opportunity for the justices to put limits on the use of eminent domain — and to look at how the power had been abused since cities had begun using expanded powers of eminent domain half a century ago. As Clarence Thomas pointed out in his dissenting opinion in Kelo, ”In cities across the country, urban renewal came to be known as ‘Negro removal.’ ”

For the full commentary, see:
JOHN TIERNEY. “Supreme Home Makeover.” New York Times (Tues., March 14, 2006): A31.
A related observation:

Supreme Court Justice David Souter, Writing for the Majority in a Warrantless Search Case Decided by The Court This Week, Possibly Forgetting his Previous Vote in Kelo, to Allow Government to Seize Private Property Under Eminent Domain to Give to Developers:
“We have, after all, lived our whole national history with an understanding of the ancient adage that a man’s home is his castle.”

Source of the observation:
Center for Individual Freedom, Lunchtime Liberty Update, emailed 3/24/06.