kurt cobb – Page 3

I have maintained for the past six years that a key goal of OPEC has been to so demoralize investors in shale oil that they stop sending money to the companies that drill for it. As I’ve written previously, I believe that OPEC’s contest with the shale oil industry is “part of a broader strategy meant to maximize Saudi revenues as production in the kingdom hovers at an all-time high over the next decade before beginning a decline.” It now appears that OPEC may have finally won its war against shale.

Investment in shale oil companies has finally collapsed—even as oil prices levitate. It has been a long time coming. The industry would like you to believe that it is now showing “restraint” in its capital spending. But, to use a dieting analogy, there is a big difference between watching what you eat and having your jaw wired shut—involuntarily in this case. The industry has experienced the equivalent of the latter in the capital markets.

What has amazed all of us who watched this battle play out is that OPEC didn’t win sooner. The relentless tolerance for losses among investors was beyond belief. And, when those investors returned in force after a brief vacation during the oil price bust in 2015, we skeptics grew concerned that rational thought had been eliminated from the universe.

Why did we think that? Because by that time the industry had already burned through hundreds of billions of investors’ dollars, dollars that merely subsidized petroleum consumers while enriching industry insiders. I am reminded of the joke about the business owner who explained that while he loses 5 cents on every sale, he makes it up in volume. Free cash flow numbers for the industry as a whole made it absolutely obvious that shale oil had been a money-loser for years. Why couldn’t investors see something that obvious?

…click on the above link to read the rest of the article…

Climate change consequences: Too hot, too wet and out of time

July 8, 2021

Climate change consequences: Too hot, too wet and out of time

The last few weeks have demonstrated that we have arrived at the climate change catastrophe long prophesied by climate scientists—a catastrophe that many thought we still had decades to avert.

In the Pacific Northwest high temperatures broke records day after day. In my former home of Portland, Oregon the temperature reached 116 degrees F (47 degrees C). If you look at the average high temperatures in Portland in summer, you’ll see why air-conditioning is not a feature of the average Portland home or apartment. I lived comfortably without it during the four years I was there. Last week Portland seemed as if it had moved to the desert Southwest.

North and south of Portland, the extreme drought in the West continues as wildfires swirl toward another terrible season. Wildfires now dot British Columbia as well as Western Canada suffers from extreme heat. And, drought exacerbated by climate change is occurring on other continents including in the Brazilian Amazon rainforest and in Thailand.

We must not forget that one of the other predictions of climate scientists was more frequent and more severe floods resulting from a speeding up of the hydraulic cycle. In my home state of Michigan, seven inches of rain fell in just a few days recently leading to a declaration of a state of emergency as many areas experienced severe flooding.

When I watched renowned climate scientist James Hansen’s (now prophetic) 1988 testimony before the U.S. Senate, I was at the time uncharacteristically hopeful that the world’s governments would do something to prevent what I perceived as a very, very dangerous threat to human civilization. Surely, the world’s elite would now act with haste before it was too late, I thought. (For a brief review of Hansen’s eerily accurate forecasts 30 years after his testimony, check out this video.)

…click on the above link to read the rest of the article…

Climate change consequences: Too hot, too wet and out of time

July 5, 2021

Climate change consequences: Too hot, too wet and out of time

The last few weeks have demonstrated that we have arrived at the climate change catastrophe long prophesied by climate scientists—a catastrophe that many thought we still had decades to avert.

In the Pacific Northwest high temperatures broke records day after day. In my former home of Portland, Oregon the temperature reached 116 degrees F (47 degrees C). If you look at the average high temperatures in Portland in summer, you’ll see why air-conditioning is not a feature of the average Portland home or apartment. I lived comfortably without it during the four years I was there. Last week Portland seemed as if it had moved to the desert Southwest.

North and south of Portland, the extreme drought in the West continues as wildfires swirl toward another terrible season. Wildfires now dot British Columbia as well as Western Canada suffers from extreme heat. And, drought exacerbated by climate change is occurring on other continents including in the Brazilian Amazon rainforest and in Thailand.

We must not forget that one of the other predictions of climate scientists was more frequent and more severe floods resulting from a speeding up of the hydraulic cycle. In my home state of Michigan, seven inches of rain fell in just a few days recently leading to a declaration of a state of emergency as many areas experienced severe flooding.

When I watched renowned climate scientist James Hansen’s (now prophetic) 1988 testimony before the U.S. Senate, I was at the time uncharacteristically hopeful that the world’s governments would do something to prevent what I perceived as a very, very dangerous threat to human civilization. Surely, the world’s elite would now act with haste before it was too late, I thought. (For a brief review of Hansen’s eerily accurate forecasts 30 years after his testimony, check out this video.)

…click on the above link to read the rest of the article…

Shale oil and gas fraud: A sign of a peak in oil supplies?

June 21, 2021

Shale oil and gas fraud: A sign of a peak in oil supplies?

Those of us who watched incredulously as investors shovelled more and more money into what we were sure were money-losing shale oil and gas drillers do not find the current spate of fraud lawsuits against these drillers surprising.

The gargantuan claims about shale hydrocarbon reserves—which were compared more than once to those in Saudi Arabia—were clearly designed to woo investors into bidding up the stock price and/or hoovering up the constant stream of junk bonds emitted by the shale oil and gas drillers. The hype succeeded for a long time, even during the crash in oil prices in 2015 and beyond when investors convinced themselves that they were picking up “bargains.”

It wasn’t until the pandemic-induced plunge in oil prices that the reality of those outlandish claims was revealed, and many companies disappeared.

But this story of fraud and exaggerated claims is much more than a legal story. The large production gains that did take place in American oil fields had people believing America would be or already was “energy-independent,” a phrase that meant the country would not be a net importer of energy resources. Though U.S. dependence on imported energy resources did decline, it didn’t reach zero until the pandemic dramatically crashed U.S. oil demand below U.S. production. But as the world and U.S. economies rebound, that dependence is almost certain to return as the so-called “shale miracle” turns out to be something less than miraculous, bankruptcies continue and reserve estimates come back into line with reality.

But the fallout extends even further. The U.S. oil boom was the principal source of increased world production for most of the last 15 years. Without that boom and the boom in the Canadian tar sands, world oil production would have grown little or even declined.

…click on the above link to read the rest of the article…

Who pays for the care of “orphaned” oil and gas wells? You do

June 17, 2021

Who pays for the care of “orphaned” oil and gas wells? You do

When oil and gas wells end their useful life, one of two things happens: 1) They are plugged and capped to prevent further flows or 2) they are simply abandoned.

When they fall into the second category, they are called “orphaned” wells and they become the responsibility of the government to secure. But that’s if the government actually knows about them. Records of well placements are not always so carefully maintained and can get lost during bankruptcies and changes in ownership or due to sheer carelessness. As a result, there appear to be far more abandoned wells than the orphaned ones that governments know about.

Since I last wrote about this problem in 2012, there has been a huge wave of drilling in Texas, North Dakota, New Mexico and Colorado as the so-called shale revolution unleashed billions of barrels of previously inaccessible oil and trillions of cubic feet of natural gas on the world. Now that drillers in the shale fields have fallen on hard times, many wells are idle and at risk of being abandoned.

Companies are required to post bonds to pay for the plugging and capping of wells by the state if the companies fail to plug and cap them. However, these bonds are entirely inadequate. According to Grist, in Texas the bonds covered just 16 percent of the costs incurred by the state in 2015. In New Mexico the number was 18 percent.

The pattern here is a familiar one. The profits of oil and gas production get privatized and the costs—in this case, environmental and health costs—get socialized, that is, members of the public get saddled with the costs either through clean-up or damage to health and property

…click on the above link to read the rest of the article…

Not just another drought: The American West moves from dry to bone dry

May 28, 2021

Not just another drought: The American West moves from dry to bone dry

The American West is having a drought. So, what else is new? And, that’s just the point. The American West has been in an extended drought since 2000, so far the second worst in the last 1200 years. Here is the key quote from the National Geographic article cited above:

In the face of continued climate change, some scientists and others have suggested that using the word “drought” for what’s happening now might no longer be appropriate, because it implies that the water shortages may end. Instead, we might be seeing a fundamental, long-term shift in water availability all over the West.

That is what climate scientists have been warning about all along. The problems we are now experiencing are not just cycles or fluctuations—although those continue to be important—but rather, permanent changes in the climate (that is, on any timeline that matters to humans).

I wrote about this drought when it was only 10 years old. (For a sense of how bad it is now, see the U.S. Drought Monitor.) Back then it did not seem that residents and businesses were taking it seriously, even if some water officials were. There have been ups and downs in the intervening years, but mostly downs.

There is a reason that most major cities are located near water and not in arid regions. Water is heavy, fluid and not easily transported—though vast and expensive water projects do just that. Water cannot be easily created from its constituents elements, oxygen and hydrogen. Oxygen is abundant everywhere on Earth. But hydrogen in its elemental state is not readily available and must be extracted from other sources such as natural gas. The cost of manufacturing water is prohibative or we’d likely be doing it already.

…click on the above link to read the rest of the article…

The American infrastructure, ancient Rome and ‘Limits to Growth’

May 23, 2021

The American infrastructure, ancient Rome and ‘Limits to Growth’

Infrastructure is the talk of the town in Washington, D.C. where I now live and with good reason. The infrastructure upon which the livelihoods and lives of all Americans depends is in sorry shape. The American Society of Civil Engineers 2021 infrastructure report card gives the United States an overall grade of C minus.

Everyone in Washington, yes, everyone, believes some sort of major investment needs to be made in our transportation, water, and sewer systems which have been sorely neglected. There are other concerns as well about our energy infrastructure and our communications infrastructure—both of which are largely in private hands. The wrangling over how much will be spent and on what is likely to go on for months.

What won’t be talked about is that the cost of maintaining our infrastructure is rising for one key reason: There’s more it every day. We keep expanding all these systems so that when they degrade and require maintenance and replacement, the cost keeps growing.

There is a lesson on this from ancient Rome. Few modern people understand that the Romans financed their expansion and government operations using the booty taken from vanquished territories. That worked until it didn’t. When Rome reached its maximum expanse, when it no longer conquered new territories, the booty stopped coming. With the borders of Rome the longest the empire had ever had to defend, it now relied primarily on taxes to finance a large army and administrative presence across the empire in order to maintain control.
Our modern-day version of booty has been cheap energy, much of it supplied by the oil, natural gas and coal fields of America and later its uranium mines…

…click on the above link to read the rest of the article…

The American infrastructure, ancient Rome and ‘Limits to Growth’

May 17, 2021

The American infrastructure, ancient Rome and ‘Limits to Growth’

Infrastructure is the talk of the town in Washington, D.C. where I now live and with good reason. The infrastructure upon which the livelihoods and lives of all Americans depends is in sorry shape. The American Society of Civil Engineers 2021 infrastructure report card gives the United States an overall grade of C minus.

Everyone in Washington, yes, everyone, believes some sort of major investment needs to be made in our transportation, water, and sewer systems which have been sorely neglected. There are other concerns as well about our energy infrastructure and our communications infrastructure—both of which are largely in private hands. The wrangling over how much will be spent and on what is likely to go on for months.

What won’t be talked about is that the cost of maintaining our infrastructure is rising for one key reason: There’s more it every day. We keep expanding all these systems so that when they degrade and require maintenance and replacement, the cost keeps growing.

There is a lesson on this from ancient Rome. Few modern people understand that the Romans financed their expansion and government operations using the booty taken from vanquished territories. That worked until it didn’t. When Rome reached its maximum expanse, when it no longer conquered new territories, the booty stopped coming. With the borders of Rome the longest the empire had ever had to defend, it now relied primarily on taxes to finance a large army and administrative presence across the empire in order to maintain control.

Our modern-day version of booty has been cheap energy, much of it supplied by the oil, natural gas and coal fields of America and later its uranium mines…

…click on the above link to read the rest of the article…

Clean energy minerals shortage: Who knew it could happen?

May 12, 2021

Clean energy minerals shortage: Who knew it could happen?

The race for so-called green energy has spawned another race, one for the minerals needed to make the devices such as solar panels and batteries that produce, store and transmit that energy. A hitherto largely unchallenged economic idea—that we will always have supplies of everything we need at the time we need it at prices we can afford—is in the process of being tested.

According to the International Energy Agency (IEA), the world will need to produce six times more of these critical metals than we are producing now to reach net zero carbon emissions by 2050, a target widely held out as an essential goal for avoiding catastrophic effects from climate change. The need for lithium—the key component in lithium batteries that are prized for light weight and the ability to charge quickly—will grow 70 times over the next 20 years, the IEA predicts.

One wonders what the price trajectories of the minerals IEA mentions will look like in the coming years. The long-term charts are concerning for nickel, lithium, cobalt and others since this appears to be just the beginning of the run-up.

The world is experiencing shortages already of many key commodities and manufactured items (such as computer chips). This is, in part, due to lack of investment over the last decade after a general slump in commodity prices following the Great Financial Crisis of 2008 and a broad moderation in worldwide economic growth. Certainly, we can expect increased investment in these critical metals. But will it be sufficient to match our dreams for a green technology future?

…click on the above link to read the rest of the article…

Clean energy minerals shortage: Who knew it could happen?

May 10, 2021

Clean energy minerals shortage: Who knew it could happen?

The race for so-called green energy has spawned another race, one for the minerals needed to make the devices such as solar panels and batteries that produce, store and transmit that energy. A hitherto largely unchallenged economic idea—that we will always have supplies of everything we need at the time we need it at prices we can afford—is in the process of being tested.

According to the International Energy Agency (IEA), the world will need to produce six times more of these critical metals than we are producing now to reach net zero carbon emissions by 2050, a target widely held out as an essential goal for avoiding catastrophic effects from climate change. The need for lithium—the key component in lithium batteries that are prized for light weight and the ability to charge quickly—will grow 70 times over the next 20 years, the IEA predicts.

One wonders what the price trajectories of the minerals IEA mentions will look like in the coming years. The long-term charts are concerning for nickel, lithium, cobalt and others since this appears to be just the beginning of the run-up.

The world is experiencing shortages already of many key commodities and manufactured items (such as computer chips). This is, in part, due to lack of investment over the last decade after a general slump in commodity prices following the Great Financial Crisis of 2008 and a broad moderation in worldwide economic growth. Certainly, we can expect increased investment in these critical metals. But will it be sufficient to match our dreams for a green technology future?

…click on the above link to read the rest of the article…

Geoengineering the climate: The zombie idea that just won’t die

April 5, 2021

Geoengineering the climate: The zombie idea that just won’t die

Just when you think the last boomlet for geoengineering the climate has expended itself and we might be rid of any serious consideration of it as a strategy for addressing climate change, it rises zombie-like from the dead and starts roaming the Earth again.

The National Academy of Sciences (NAS) has recommended spending $100 to $200 million over the next five years to study the idea—its feasibility, possible unintended consequences, and an ethical framework for governing it.

The most important thing you need to know about geoengineering the climate is that we humans have probably been doing it since at least the dawn of agriculture. What we need now it seems is an intervention from TV talk show psychologist Dr. Phil to ask us his favorite question, “How’s that working for you?”

We have certainly been doing geoengineering since the dawn of the industrial age which we know has stoked climate change through carbon emissions caused by the burning of fossil fuels; changes in land use (deforestation, primarily); modern agricultural practices (methane released by livestock fed on grains, for example); and industrial chemical releases, the most egregious of which is currently sulfur hexaflouride used in the utility industry as “a hugely effective insulating material for medium and high-voltage electrical installations.” Sulfur hexaflouride is 16,300 times more potent than carbon dioxide over a 20-year time horizon and 23,900 times more potent over a 100-year horizon.

Now that’s a feat of real geoengineering and the people who discovered sulfur hexaflouride in 1901 weren’t even trying to affect the climate!

What I’m getting at is even more important than the unintended consequences mentioned in the NAS report above. “Unintended” in that case means we are actively looking for and evaluating such consequences…

…click on the above link to read the rest of the article…

resource insights, geoengineering, climate change, kurt cobb,

Variations on a theme: COVID-19 mutations turn problematic

March 14, 2021

Variations on a theme: COVID-19 mutations turn problematic

We pandemic-weary humans are ready to be done with COVID-19. But apparently, it is not done with us. Our conversation with a coronavirus, as I dubbed it last year, continues as a growing number of variants of COVID-19 appear across the world.

Preliminary data suggest that some of the variants may evade the protections of existing vaccines and lessen the effectiveness of various treatments. So concerning are these variants that one of the world’s leading epidemiologists is recommending a reversal of the recent re-opening steps being taken in the United States and elsewhere across the world.

Whether that advice will turn out to be warranted is likely to be tested in the next several weeks as U.S. states and foreign countries move forward with re-opening despite the rapid rise of new variants. This is all happening against the backdrop of Italy returning to a lockdown for much of the country due to the rapid spread of these COVID-19 variants.

Of even greater concern is the possibility that COVID-19 is here to stay and may continue churning out variants that defy our attempts to vanquish the virus. No one knows for certain what that might look like. It could be that COVID-19 becomes a seasonal disease returning each year like the flu. It could become milder in its effects. That would be an adaptive evolutionary strategy for the virus since killing one’s host is not a good way to spread. COVID-19 could be banished in some places, only to pop up periodically.

Rather than recognizing that we are part of nature, we continue to do the equivalent of mobilizing for war against nature. We want to stamp out COVID-19 and finish it for good. But it never occurs to us that COVID-19 might not yield to our warlike brigades now dressed in lab coats and nurse’s uniforms.

…click on the above link to read the rest of the article…

kurt cobb, resource insights, pandemic, covid-19, virus mutations

Declining sperm counts: Nature’s answer to overpopulation?

March 4, 2021

Declining sperm counts: Nature’s answer to overpopulation?

Epidemiologist Shanna Swan projects that on current trends sperm counts will reach zero by 2045. That shocking conclusion comes from a new book by Swan and her colleague Stacey Colino. Is this nature’s way of bringing human population under control? (More on that later.)

In a 2017 study Swan and colleagues looked at “244 estimates of SC [sperm concentration] and TSC [total sperm count] from 185 studies of 42,935 men who provided semen samples in 1973–2011” in North America, Europe, Australia and New Zealand. Men elsewhere may fare better, but the causes of this trend suggest that it is worldwide.

Swan told The Guardian that she blames so-called “‘everywhere chemicals’, found in plastics, cosmetics and pesticides, that affect endocrines such as phthalates and bisphenol-A.” She also pointed to unhealthy lifestyle choices including use of tobacco and marijuana and to rising obesity. Obesity itself has been linked to increasing human endocrine disruption from these same chemicals.

In fact, Swan’s warning is not new even though her study makes it more urgent. The issue of endocrine disruption from toxic chemicals burst into public view in 1996 with the publication of Our Stolen Future which detailed the research on endocrine disrupting chemicals for a lay audience.

There have been some minor victories. Bisphenol-A has been largely removed from food containers voluntarily by food processors. But it is still found in many products and the U.S. Food and Drug Administration still claims it is “safe.”

I asked at the beginning of this piece whether declining sperm counts is nature’s way of limiting human population. The current trend would not just reduce population, but lead to extinction within a century. It is as if the 2006 film Children of Men has been remade with a slightly different plot line.

…click on the above link to read the rest of the article…

Demateralizing the economy isn’t happening (Hint: All that material is actually hiding in plain sight)

February 14, 2021

Demateralizing the economy isn’t happening (Hint: All that material is actually hiding in plain sight)

If you are trying to prove something is true and certain facts get in the way, it’s almost always useful to exclude them. This is apparently what technology cheerleader Andrew McAfee has done in his recent book More from Less, which claims that advanced economies have been dematerializing for something like the last 40 years. Simply put, those economies are producing more output with little or no increase in physical resources.

There’s just one little problem as anthropologist Jason Hickel points out in his review of More from Less: McAfee forgot to count the physical resources used in making products imported from other countries by all those advanced economies. McAfee only counts those resources extracted within the boundaries of the advanced countries.

I am highlighting Hickel’s piece not so much as a book review. There are dozens of books making similar ridiculous claims that are contradicted by the facts. I am highlighting the piece because Hickel provides perhaps the clearest, most concise refutation of the nonsense that McAfee and others like him are peddling.

Let me touch on the high points though I encourage you to read the full article:

“There has been zero dematerialization. No green growth. It was all an illusion of accounting.”
Global resource use has actually been accelerating faster than growth in the global economy. We are becoming more resource-intensive, not less.
Ecologists believe human societies are 90 percent over any sustainable rate of resource consumption.
The economy can’t become infinitely more efficient. There are limits on how much efficiency can be taken out of any process as each increment of efficiency in resource use is more costly to implement.

…click on the above link to read the rest of the article…

The clickbait future of news and our crisis of consensus

February 8, 2021

The clickbait future of news and our crisis of consensus

It’s often hard to distinguish between what has come to be known as “clickbait”—which according to Dictionary.com is “a sensationalized headline or piece of text on the internet designed to entice people to follow a link to an article on another web page”—and simply a clever headline.

What irks me about true clickbait headlines is that the story often contradicts or fails to mention the claim made in the headline. Of course, if the entire story is merely fabricated or exaggerated in ways that obscure what is actually going on, that is a problem, too.

News organizations are no strangers to sensationalized headlines. In fact, the newspaper business invented an entire category for what is called clickbait, namely, tabloids. The often repeated adage that “if it bleeds, it leads” is reaffirmed on a daily basis.

(Tabloids are, of course, named after the tabloid format that many sensationalizing newspapers adopt. The most recognizable newspaper format is called broadsheet which is used by major daily papers around the world. For a very short explanation of newspaper sizes, you can click here.)

Now, adult readers should generally be left to sort things out for themselves. They can learn to trust and mistrust news sources from experience and weigh the headlines and information provided accordingly. I know many people are very concerned about the kind of fantasies offered on the Internet that lead otherwise sane people to disconnect from any shared reality and even resort to violence. That is certainly a problem, and it requires an entire book to explain and respond to. I don’t plan to deal with it here.

…click on the above link to read the rest of the article…

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