Climate change?

Strengths for denial (no action needed) argument:

1. Our experience is too limited.
2. Our intuition is insufficient.
3. Our knowledge is too small.
4. Our models are too simplistic.

Strengths to acceptance (Let's try something different) argument:

1. Exponential growth must hit physical limits.
2. Exponential growth must hit physical limits.
3. Exponential growth must hit physical limits.
4. Exponential growth must hit physical limits.

Low debt club

I got an email about the September meetup on "Oil awareness" and I'm not inspired to attend, mostly last meeting I attended (6 months ago) wasn't very useful.

I have an inspired thought to share before I forget, the idea of a group of people agreeing to pay their debt down, whatever that debt is.

It is a good idea for everyone, but not a simple proposition of "no debt is best" but rather something like keeping debt small, with short term payback, AND where this isn't possible, taking on only debt that offers a long term benefit. Something like that.

It is partly the other side of "increasing our savings rate" which economists like to complain about. Having debt and savings together is a rather silly combination since overall interest on debt will exceed interest on savings.

Basically I see the future as being unstable where cost of living will go up and job security or income could go down, so it's better to pay down debt sooner than later. You can say that's merely "my opinion" and if you don't believe me, then I accept you may see a different direction.

When I look at my own decisions - where I might reduce expenses to have more money to pay down debt, I see it often comes down to time and convenience. The more I do generally to reduce expenses, the more time is required of me.

I wish for a simple formula for how to budget present and future needs, but I know it can't be found in the abstract, and maybe merely considered as a direction. I can think of the even more demanding position "When making decisions, consider the effect on the 7th generation." Now that's a seriously worrisome proposition.

On anothere view, perhaps considering the bottom line of money alone is perhaps too reductionistic to mean much. I only know I live in a world that doesn't well seem to admit our vulnerability. Running full speed forward is only most efficiency if you can see what's coming. Otherwise a nice cliff or wall might make our efficiency into our worst enemy.

Most of all I dislike offering too much promotion of the personal virtue of low debt because I feel guilty with my good fortune, and recognize many or most are not in positions for this now - AND could be worse off overall in the future if they follow my advice and things keep rolling a while longer.

Still, I promote that sound fiscal policy must consider debt as a risky thing, and to the degree we can be a bit more frugal now, we're better off for it.

Investing in renewables

From Minnesota State Fair


Change is scary, and worse in times of fear and uncertainty about the future.

Lots of impressive displays at the State Fair "Eco-experience" building. Wind turbines, PV, solar heating, plug-in hybrids, heat pumps, etc.

When's the best time to invest in technology? Apparently Hybrid-car production is not keeping up with demand, so better to wait on that, right, at least for people who don't drive 20,000 miles/years.

Do I replace my $500 water heater (and corresponding $50/year natural gas costs) for a $4000 passive solar heating system install? (What's the payback period there?! How much will NG cost NEXT year?!)

It's hard to decide WHEN to "upgrade", even when things NEED to be replaced. Even on new construction, people are already taking on a HUGE debt to buy a home and builders hurt their customer base when they can't build affordable homes.

I fear these decisions will get no easier in the future as energy costs rise and people may as well benefit by "scaling back" rather than replacing.

Suburbia was built on the standard of one-of-everything for every house, and in times of wealth and abundance it seemed a clearly convenient solution, but if things get harder, this may have to be reevaluated.

Maybe someday we'll have a wind turbine in every backyard, or PV on every rooftop? Some technologies scale well downwards, but others work better at a larger scale than individuals can afford or use. Therefore community cooperatives are better suited for investing. That adds a new level - who pays - who benefits - who's responsible... Questions we've avoided for a long time in our one-for-each world.

One 80' wind turbine for every city block. That's a nice vision - until the damned thing squashes a HOUSE in a storm in 5 years. Much to worry about, but seems the direction we must go.

Even cars may be better "shared" if we can work together and take the time for that.

I'm hopeful solutions exist, but still anxious for more certainty we'll get there without killing each other, without closing down communication further - into gated communities and such.

A brave new world, and it'll take sacrifies - mostly time perhaps. Maybe we'll be better off, but I expect it'll take a long time to get used to losing what we had.

Declining oil

I've long thought the WORST places to live might be in countries with large oil exports, for many reasons, but most of all the simple boom&bust cycle, and population increases during the boom times. Certain Saudi Arabia is in this dilemma, whether in 5 years or 50.

It is ONE thing to imagine world oil production on a 3% or 5% or 8% decline curve, and that will force global restructuring to use less oil. However it would seem being a producing nation under declining production, I can't imagine how any government could deal with that loss of revenue.

Of course "late peakers" can perhaps compensate as increases in prices equal their decreases in production, but "early peakers" are the ones in the most trouble.

I wonder now, thinking how the world will be, and that some countries already are on that path.

Maybe there's no value in worrying about them. Certainly good investments now will help them, although I imagine governments based on "easy money" are largely lubricated by payouts at all levels and when things turn ugly those most profiting now will be preparing for their escape route to safer lands.

Boom&bust cycles are well known, like the gold rushes, but overall too short to cause as serious consequences. Well, I don't expect there's a great number of workers in Alaska working on oil production. However the government gets its taxes and gets distributed to state citizens.

Free wealth like all power risks values and sensibilities being corrupted, but it also allows long term planning and investment. We're all largely in the same boat, having undue wealth from oil, and varied conditions for transitioning to something else later.

Big things happen fast and slow, but I imagine places of boom now and unsustainable population increases will suffer later and large scale migrations will result, someday.

It is sad I feel somewhat protected living in North America. People will survive and they will kill to get what they need, whether land or whatever.

It is surely silly to imagine too far what my fate will be, but I expect locally around the world we can observe places of scarcity as signs of things to spread.

Annoyed

It just can't be true, can it? Is there any chance in the world that burning corn as a fuel can be an environmentally good fuel?

Websites selling "Corn stoves" talk about how much cheaper they are to run over every other fuel.
http://www.goldengrainstove.com/

The problem for me is that corn is NOT grown in any sort of sustainable way. It requires high energy input, fertiliers from natural gas, planted and harvested from diesel tractors.

I can consider the possibility that there may be "surplus" corn, never used, and otherwise wasted. When you have a "waste product", then it can be economical to find a use for it. In this case it is waste because food production needs a surplus to handle poor years, but when good years come there's too much, so other uses can be found.

If corn really can be sold as a cheaper fuel than natural gas or coal or wood, then you have to believe corn stoves will continue to be sold until the surpluses meet demand. And since it is a secondary production, users dependent upon corn will find themselves with shortages in bad years and prices will likely rise even higher than other fuels, and people who don't have alternative heating fuels will be forced to pay.

Now I come to a strange point. If "heating corn" costs say $x/bushel, and "food corn" costs say $x/2 per bushel, then there's going to be a competition between food and fuel at some level, whether you're talking human food, or animals, or whatever.

It is possible than corn now is sold at $2X/bushel for food, and the fuel value will always be lower. I only consider the fuel value is higher since the value of corn is so much less than other fuels. If burning is only good for "strategic surpluses", then the "corn stove" solution is not scalable. It can only benefit a small fraction until they exceed the supply, when prices will put their fuel comparable to other fuels. If fuel value is greater than food, then growth could affect the corn production as higher prices encourage more production.

Now finally the missing element is how much corn production is subsidized by the government. If corn farmers receive a subsidy against low prices, then prices stay low and food prices may be lower. If corn is grown primarily as a fuel, then we're subsidizing fuel production. Is that bad?

The problem is the subsidy will encourage more production while we don't even know what the energy balance is. In short - how much energy goes into corn production and processing into fuel, what is the source of that energy, and how much energy is left in the fuel to burn?

If we're burning coal, natural gas, gasoline, and diesel in order to create a fuel that REPLACES these fuels, we can be fairly confident we've got a losing proposition. That is we have a chance for a positive energy balance due to "free sunlight", but it's got to be determined!

Otherwiser we may find ourselves with a million homes heated by corn and then determine we're subsidizing an energy loss!

SO that's why I'm annoyed - I can find any statements on energy in/out for burning corn as a fuel.

I mean just read this shit:
http://corngrill.com/
As our forests, oil and other energy sources are continually depleted, corn is replenished annually. It is a never-ending energy source, and thus is the new alternative fuel of choice. Corn is friendly to the environment. It contributes oxygen to the atmosphere while growing, and poses no safety or pollution hazards. Corn is abundantly and universally available. And you could grow it if you had to...

It's so blatantly false logic, disregarding what energy is used to create the corn. Do people really believe this? Of course a website SELLING stoves will LIE and EXAGGERATE, but it still pisses me off.

I'll have to keep looking!

The mythical lands known as Balanced Budget

Looking tonight at the website of Minnesota CD5 candidate, Tammy Lee, with the Indepencence Party, on balancing the budget.

Found
http://www.tammyleeforcongress.com/issues.asp
Tammy Lee for Congress: Spend Less, Get Better Government

Because Tammy Lee is committed to balancing the budget and eliminating the federal debt, that means she is also committed to not over-promising or over-spending in other areas. Other politicians will make big promises just to get elected. Tammy Lee will take a much more fiscally responsible approach and use our federal resources prudently. This includes responsible investments to create a better world for our children:

• Fund the Federal Government's Fair Share of Public Education
• Improve Access to Healthcare and Cut Costs
• Invest Big Oil's $6 billion tax breaks into Renewable Energy

That looks like about it. She promises not to promise anything new I guess. Probably is we're deficit spending like $400B/year. She says "Spend less", but nothing about how or where. I guess it means we ought "expect less" from our government. Will she be voting to undo the senior drug prescription entitlement as unaffordable? Will she be voting to stop borrowing against social security surpluses? Will she be voting to downscale the military? Less "pork" in our backyard? Exactly WHICH programs will she be cutting?

She talks about "investing" and I like that approach - judging spending based on future value. Such a perspective allows analysis of borrowing now, and paying later. If an expense will benefit us for 50 years, perhaps it is worth a 50 year debt. But what if we're can even afford our annual 5% debt payment now? What if we can't afford it in 10 years? It had better be a fundamental expense to take the risk.

I ask myself what I WOULD DO, to balance the budget. Obviously in the early 1990's bills were passed to control spending, AND raise taxes. Whether through luck or good planning the economy thrived enough to reduce the deficit, even if we were still "stealing" from the SS fund.

The republicans like to say that the democrats love to spend "Our money", and say they want to give it back for the people to spend. Well, apparently SS isn't "our money" since the government happily spends it with no regards to the future at all.

I'm willing to contemplate the idea of borrowing from the SS fund on investments in the future, but it's a tricky thing, to try to judge cost-benefit, while all the benefit is NOW, and all the cost is deferred. It is easy to skip the analysis and have a party!

What would I do?

1. Acknowledge that borrowing is a gamble that our investments will exceed in value the debts we are leaving our descendants.
2. Acknowledge the U.S. has lost control of our own destiny as long as are unable to produce our own sources of energy and have to borrow from foreigners to pay for our debt.
3. Acknowledge that the future will be HARDER than the present until we learn to use less and rebuild our economy so that waste is considered waste and not GNP growth.

Then what?

Transportation ( Highest dependency upon oil imports)

• Set a goal to reduce our oil consumption to half current levels over the next 10 years. Charge a 50% "tax" on all oil produced and imported.
• Redesign the national transportation system on the assumption that it will one day have to run on 1/4 as much energy as we now spend.

Defense

• Set a goal to align our defensive needs as a common interest among other countries and reduce our military spending to no more than 4 times our average ally per-capita spending.
• Set a goal to dismantle all nuclear weapons (because it is the right thing to do AND because the world is a safer place.)
• Develop a "peace force" branch of the military which will be trained in nonviolent techniques of ending violence.

... Time constraints hit... more later?

The Persistence of Vision

It is simply wonderful to walk down the street on a warm summer day and see the world going on like everything is normal.

Back in 1996 presidential hopeful Bob Dole proposed repealing a 1993 $0.043/gallon gasoline tax. I wrote a letter to the editor back then in opposition, and I found it now:
******
Is Dole a banana?Republican presidential candidate, Bob Dole, wants to repeal the 1993, 4.3 cents gasoline tax increase to help reduce gasoline prices. Why should we reduce any tax when our national budget remains unbalanced? And why should we not pay high taxes on gasoline?
Where is there a more just cause for taxation than on the consumption of oil: a now largely imported, limited, and entirely nonrenewable energy resource? I believe that even a 100% tax rate would not be unreasonable on a fuel that future generations won't likely have available.
The oil industry has given us nearly everything we could desire: an apparently vast and inexpensive fuel that gives power and freedom to the masses of humanity! If they are using the current low ready reserves as an opportunity for extra profits, I say "Good for them!" They deserve it.

I don't even care about the DFL party's "regressive-tax" lament in defense of the poor. We can direct more tax money into mass-transit systems, encourage bicycling, and support the development of simpler, smaller, lighter, and less powerful personal vehicles with smaller energy demands. These will help the poor infinitely more than cheap gas!

Gasoline taxes promote an economy of conservation. Excessively low gas prices promote an economy that is becoming ever more dependent upon a fuel that will be continually more costly to produce! The current temporary price increase is a mere speed bump. There are mountains ahead.
*****

Of course I knew defending a 4.3 cent tax was just as symbolic as Dole's proposal. It is amazing oil prices have since risen by a factor of 2-6 depending on how you want to count it, yet the economy keeps rolling along. Of course I'm not saying people are not struggling now.

It's just crazy that the republicans can deny tax increases for hurting the economy, meanwhile allowing our energy imports keep increasing year after year and now we're more dependent than ever on record high prices.

Now those (price) "mountains" I envisioned I believe are still in the distance, and our $75/bbl oil are merely the foothills preceeding the real peaks.

So I can sit back on a warm summer afternoon, and think all is normal, at $3/gallon gasoline, and we can have a "softlanding" onto a future where finally we'll do everything we need to do, and could have done in the past, except for being too busy.

How do you know WHEN to prepare for the winter except for watching the seasons and calendar? But in the warm days of summer, memories of winter seem far away, and there's plenty of time tomorrow to get busy.

I accept this vision in my own decisions, on warm summer days, wanting to enjoy them while they're here. AND perhaps there's not that much we can really do to prepare.

My personal life has perhaps four special decisions: (1) Paying 2.6x my mortgage payments while I can, (2) Not having a car now for 18 months, (3) Having a vegetable garden now for the 12 years, (4) Not having children or dependents.

I only mean I'm overall more able to prepare than most, whatever prices do. However I don't know how much I can do to help others reduce their cost of living when things get harder.

Finally back to my summer day view, seeming normal and life goes on. I suppose even in the great depression, people still saw the sun and felt the warmth, and appreciated, but they also were busy worrying about how they'd get food for their family and pay their mortgages.

Besides getting out of debt I don't have any clear second best decisions for people who want some small security. Sure, find a way to live on less money, but it all comes down to time and opportunity. We live in a time of great opportunity, so we don't have time to save money.

This will change, even if vision is slow.

Contracting for souls and the seventh generation

Just a quick stupid thought, curiosity over the legal power of contracts.

Strangely people have a legal RIGHT to sign a contract that is against their long term self-interest. People have a right to be stupid. They have a right to be desparate enough to agree to "the small print" in exchange for something they think they want NOW.

Mostly I'm thinking of money, people signing themselves into debt, an agreement to make outrageous interest rates for the privledge of having money now.

My curiosity wonders how far this can go. If I sign my name that I'm going to buy a jewel for $1,000,000 that is only worth $10, then I've got my $10 stone, and a happy person who will be expecting regular payments from me.

It is overall strange, since personal experience suggest people who BORROW money have all the power and lenders can be strung along for YEARS before getting a clue that good intentions are not enough to get back the money you foolishly gave them under the illusion of a loan.

If I signed my name that I'm your personal slave for life, is this a binding contract? I mean you'll give me something I want, like maybe a signed autograph picture of the late great Kirby Pucket perhaps, so it IS a fair deal.

I guess it all comes down to enforcement. As long as I THINK I'm your slave, everything is okay, but if I decide I no longer WANT to act as your slave, what power do you have to force me?

Not much I expect, unless you ARE the local law. Well, I suppose in some times and places enforcing slavery is in the law, but overall, here in the land of the free, not much can be done but take me to court perhaps.

Mostly I write because it is hurtful to me to have friends and family taken for suckers by money grubbing hustlers. I suppose I can take THEM to court as well, in defense of loved ones who are stupid enough to sign their names to outrageous exploitive contracts.

Still fools are in the eye of the beholder perhaps, and there's LOTS of crazy places of diminishing returns where people OUGHT to know better but follow a losing path to their grave.

Things as simple as owning a car. If you're making minimum wage and divide the costs of car ownership with your hours of work to pay for it, you may just find you'd save time by working less and WALKING MORE!

Myriads of examples surely, and I worry about people. I'm one of those people smart enough to "play the game" without getting eaten alive, but once I figure out the scam, I'm as often as not too pissed to play, even if knowing the rules really puts me ahead.

Well, I can't avoid all the games, but I'm still pissed about them. Mostly about money, but only because it allows so much evil.

I keep telling myself I can play a losing game and still make the world a better place, but every decision offers hidden trade offs that need analysis, which makes for a rather tedious life, and I don't think I have half as much fun as the next sucker!

Energy hunger pains - the addict's bottomless pit of unmet needs

A vision occurred to me today, reading about the shut down Alaskan oil pipeline, that of a huge mouth, open wide, and oil pouring in as fast as we can send it in, or I should say the mouth USED to be smaller and we held back some of our production, but now we're going full out to extract oil for the mouth's pleasure.

Is the mouth the global economy, our collective 6.5 billion people, or the network of machines that produce everything we know of as civilization? Or all of the above?

The 400,000 bbl/day no longer being produced from Alaska offers a small flutter of fear to the mouth - will it have enough? Where will the shortage be made up? Saudi Arabia?

Will we go into withdrawal if our daily fix?

All the talk is about restoring production, but what about conservation? What about reducing our consumption a bit?

Well, will it really do any good? One theory says (in a time of surplus) all conservation will lead to more energy to be used eleswhere. Does this still apply in times of shortages?

According to market economics prices alone will moderate demand. Prices will keep going up until the poorest consumers decide to stop playing. So there's maybe PLENTY of oil out there at the right price.

And back to the mouth, will the mouth contract merely by drinking slower (conservation), or are we in store for an actual material reduction - like economic collapse or actual food shortages and population reduction?

We've "solved" many of the causes of early death, and we've had more than enough calorie production at least. We can feed animals and maybe even our machines with biofuels from our farms. At least for the moment, while we have fuel and fertilizers. The rest of the world has been trying to catch up to our modern high-energy, high-input, high production farming methods.

Where will the system start failing first? How long can America borrow to continue of deficit spending? Something has gotta give. That's what I always say.

The big mouth is hungry, and what diets we'll choose in the future is uncertain, but sooner or later, we must pick one.

Ups and downs

I went on a camping trip this last weekend, paid $3.09, and $3.08/gallon for gas on Friday and Sunday, by far records for me in cost per gallon, filling my girlfriend's minivan.

Today I read the Alaskan pipeline will be closed for months, cutting a large fraction of U.S. production. In the bigger picture, temporary reduced production is no big deal, and it'll help extend the lifetime of our supplies, but in the short run, we've reduced the world's "spare capacity" and can't help but increase prices!

Meanwhile I also heard that volcanic dust in the air in the caribbean has reduced the overall moisture content in the air, reducing the likelihood for hurricanes in the gulf of mexico, offering perhaps a "free parking" year to gulf oil production to rebuild.

I wonder how much "we" will rebuild, given the high development costs and high risks. Sure oil companies are flush with profits, but you still don't throw money at losing propositions, if you look at your losses from 2005 infrastructure destruction, and possibly better opportunities elsewhere.

Still oil companies are faced with reduced opportunities for the "easy oil", and have to decide whether the game is still worth playing. Maybe it really is best to keep "downgrading", by buying back stock shares with profits, into a graceful retirement. There may not be too much more consolidation possible between companies.

I heard the Governor of NY on NPR today at noon, talking about tax incentives to alternative fuels - vehicles, fueling stations, and production. However when asked about increasing fuel taxes, he refused the bait - people already pay enough. Meanwhile we don't know how he suggests the federal government raise money to pay for all his proposed subsidies. So we know he means we'll just keep borrowing more money to maintain our unsustainable consumption as long as we can get away with it.

And I must admit I think the recent "fear premium" for oil may just as likely wane in the coming months as oil demand reduces and perhaps we'll be back down to "cheap" oil around $60/bbl, and gasoline around $2.60/gallon, in time for Fall elections. And we can forget about oil for another season. I'm not "predicting", just noting the ups and downs, and we're "due" for a down, even if "down" ends up as holding steady for a while.

I do agree alternative fuels are "the answer", and I agree there is no "clear winner" now to support, so we ought to support many emerging fuels and technologies.

I mainly differ in that I EXPECT, sooner or later, there's going to be a "perfect storm", and our incremental attempts must all fall short. I'd rather "descend our elevation" (consumption) now voluntarily than be faced by serious shortages later.

I'd rather have "market forces" act upon assumed higher prices now with high taxes because that will show our devotion to reducing oil consumption.

I predict ALL efforts to promote alternative fuels will stay marginal as long we assume energy prices can't be increased. The difference between raising taxes to subsidize and borrowing to subsidize is the first costs us NOW, and the second costs more later.

Subsidies are much more messy than taxing consumption. Like the fact that some ethanol is produced at a net ENERGY-LOSS because subsidices guarantee profits. If rather than paying for ethanol production we just raise consumption taxes, then alternative energy will compete or not on its own merit.

If I had my way, I'd promote ~$9/gallon gasoline (adding a $6/gallon tax), transitioned in the next 5 years, or about $0.10/month increase. That's about as clear a signal as the market is going to get as to where we're headed.

Businesses will renew their 5-year plan to account for this "prediction". People buying cars now will make decisions what to buy, knowing this destination.

Well, I suppose my prediction would be that electricity would take up the slack most easily, even if our "grid" is not ready for the new demand. There'd have to be massive efforts to increase the system, and to the degree demand increased too fast, electricity costs will rise as well, which is good for a system in need for expansion.

So I'd guess a "side-effect" of my plan, assuming electricity is the only scalable alternative, that we ought to now allow electricity producers to increase their prices (and profits) to have money available for expansion. Hopefully increased prices for electricity would also expand the economic viabiliy of alternative production, like biomass and wind.

I imagine if we combined (1) Higher gas prices (2) Higher electricity prices, we could displace perhaps 50% of our oil usage in 10 years. That sounds HUGE, but considering we already import over 60% of our oil, we've still failed to even hold even - AND giving the expectations of overall growth, AND expected continued reduction of domestic production, we've got a long way to go.

What will our economy look like with $9/gallon gasoline? (or $0.20/kwh electricity?) Well smaller cars for one I'd bet!