Nuclear Power: Again, Why Not?

 | 

Those who believe that manmade climate change threatens civilization, and even nature itself, with imminent death should be clamoring for more nuclear energy production, which releases no greenhouse gases. I wrote this recently as part of a longish essay about my nonexpert citizen’s skepticism regarding climate change. I speculated that one reason for the fact that there is no closing of the ranks around nuclear energy is that it’s reputed to be dangerous, especially in view of the possibility of radiation leaks. I also argued that, in spite of this ill fame, it’s difficult to find anywhere evidence of much health damage caused by radiation.

This information scarcity makes it difficult to assess the reasonableness of the widespread avoidance of nuclear energy production. Almost everyone who expresses an opinion dislikes it or is mistrustful of it. Voicing the objection that these unfavorable attitudes are not rooted in evidence either raises the eyebrows of disbelief or triggers the silent charge that you have not looked hard enough (which may, of course, be true).

Soon after writing the essay I just mentioned, I read a new book overflowing with anti-nuclear evidence that moved the hand on my clock some — only a little, but enough — to be worth discussing. The book is Kate Brown’s A Manual for Survival: A Chernobyl Guide to the Future. In any case, if I don’t discuss it, others will, from a predictably laudatory angle, I would bet.

Brown is an engaging writer, though one with baffling lapses, in several languages.

Brown’s thesis is that the 1986 Chernobyl nuclear accident released more radioactivity, in more places, for longer than the official sources allow, and that many more people’s health was affected, and much more severely, as well as more lastingly, than is openly acknowledged.

Brown is an engaging writer, though one with baffling lapses, in several languages (“tribunal” for “tribune,” “amass” for “mass,” “bales of hay,” for “bales of wool,” to “curate” for to “examine,” “Judenrein” for “Judenfrei”). Although she is a Soviet expert and a reader of Russian, for several pages (p. 184 and on), she confuses perestroika (“deep societal reform” or “restructuring”) with glasnost (informational “opening,” in the sense of increased transparency). And despite the fact that Brown is a tenacious, assiduous, even a formidable, researcher in the service of her thesis (more on this below), several major defects detract from the persuasiveness of her book.

First, Brown is not a neutral investigator, or even a journalist, but unambiguously an activist who hates nuclear anything. Perhaps as a result, she pretty much treats every dissenting voice as part of a long-lasting conspiracy involving Soviet authorities (national and local — no surprise), major UN agencies, and several US federal agencies, to conceal the scale of the ill effects of radiation exposure, as well as the intensity and duration of such exposure. This is not completely unbelievable. I myself think that the deadly climate change narrative is supported at once by local, national, and international government actors, although not within the context of a conspiracy but of a passively shared perception.

But Brown’s overreliance on a conspiracy explanation ends up undermining the credibility she earns by good archival digging. When she adds the International Red Cross to her already rich mix of plotters, my willingness to suspend disbelief vacillates. I don’t see how it cannot. As she continues, it crashes. The main international organization that cites large numbers of radiation victims following the accident is Greenpeace. But Brown herself honestly describes Greenpeace’s attempt to collect data in the Soviet Union as a fiasco.

Second, and possibly fatally for her, Brown straightforwardly imputes increases in mortality and morbidity in the vicinity of Chernobyl to a rise in radioactivity in the region following the reactor’ meltdown. She does this without benefit of baseline estimates regarding either radioactivity or health conditions before the accident. This is a major defect, of course: you may not impute a rise in Y to a rise in X if you cannot demonstrate a rise in X. In a roundabout way, she admits in several places that she cannot demonstrate a rise in radioactivity around Chernobyl or, in fact, anywhere at all, following the accident. She argues — persuasively if you disregard the rest of her book — that hundreds of nuclear weapons tests in the ’50s and ’60s had so overwhelmingly loaded the atmosphere with radioactivity that it may be difficult or impossible to isolate the comparatively modest radioactive emissions from Chernobyl specifically. (See, for example pp. 244–245, for the radioactive saturation following American tests.)

Brown’s overreliance on a conspiracy explanation ends up undermining the credibility she earns by good archival digging.

But it seems to me that if you are unable to measure a rise in X, there is no point in trying to blame it for a rise in Y. And if you believe that X causes Y and you cannot link an actual increase in Y even to an identified increase in X, you may not claim much about anything. Brown thus finds herself in the impossible situation of trying to demonstrate rigorously that something that she argues cannot be assessed (increase in radioactivity) is the cause of something that she loosely measures or that remains unmeasured (rises in illness and in mortality reasonably traceable to radiation exposure).

Third, like many writers with a cause, Brown devotes no attention to possible negative evidence, to evidence against her thesis. She has nothing to say about situations where there should be an excess of pathologies and of mortality — according to her implicit model that enough exposure to radiation must result in noticeable excess morbidity — but none appears. The book is written a little like a scholarly article in which contradiction is pretty much expected, even guaranteed, from other knowledgeable sources, as part of a social process. But for this book, it’s not, for reasons I develop below.

Some of the book’s tangible findings seem defective as soon as you perform a little comparison around them. For example, Brown deals abundantly with rates, including accident rates, of course, before and after the Chernobyl disaster. But she seldom provides absolute numbers, which alone can tell us how much the rates matter. (If I read that the annual rate of suicide among churchgoing southern black grandmothers of five has increased by 100% in one year, I should ask whether it’s gone from 10,000 to 20,000, or from two to four, or even from one to two.) When she does give real numbers, absolute numbers, the effect tends to be underwhelming in ways she does not seem to understand: “eighty new thyroid cancers among 2.5 million Belarusian children . . .” (p. 250). Obviously, that’s hundreds of tragedies for parents and relatives and for the sick children themselves, but it’s not a massive epidemic. Perhaps it’s no more than a counting error.

Here is an indirect but reasonable comparison of orders of magnitude: in 1990, the rate of child mortality for Russia was 2.15% (“Child Mortality,” Max Roser, Our World in Data, May 10, 2019). Applying this rate to Brown’s 2.5 million children gives us a raw number of children’s deaths from all causes of about 54,000. I am sorry, but 80 out of 54,000 is not a big surplus. This comparison assumes that Belarusian children's death rate from all causes after Chernobyl is similar to Russia’s in 1990. This does not seem farfetched. Furthermore, the 80 thyroid cancers Brown reports probably did not all result in deaths, which makes the raw number of 80, blamed on accidental exposure to radioactivity, look even smaller.

When she does give real numbers, absolute numbers, the effect tends to be underwhelming in ways she does not seem to understand.

More strangely, the author treats what I believe is her best causal evidence with near indifference. She mentions in passing two large studies of nuclear plant workers conducted in Europe, in relative openness and under favorable European conditions — studies that convincingly link exposure to radiation to several pathologies (p. 294). To reach skeptics like me, that research should have been presented at the beginning of the book, rather than near the very end. Since it was not, I have to wonder what’s wrong with this research. (It’s probably nothing, but am I expected to confirm the research myself?)

Even the best evidence that Brown collects herself seems relegated to a near afterthought. She reports that the health statistics for areas affected by radiation remain normal-looking until shortly after the dissolution of the Soviet Union in the ’90s, when higher figures begin to show up. It’s as if a lid had been removed that constrained the truth. However, there are other possible explanations for this sudden change and its coincidence with the end of Soviet power; Brown spends little time discussing them.

In spite of its serious structural defects, in spite of its inadequate treatment of intriguing data, I am not able to dismiss Manual for Survival . . . not entirely. The main reason is that I am one of those who secretly suspect (against orthodoxy) that a large enough accumulation of anecdotal evidence ceases to be merely anecdotal.

If nothing else, the secretive habits of the Soviet informational first responders at the time pretty much guaranteed that some data were locked up, and others simply not collected.

Brown has performed huge amounts of both field research and archival research, spread over what seems to be 25 years, or even 30 years. Her perseverance is exceptional. Thanks to the quality of her narrative, the reader easily gathers that much of her work was done under adverse conditions, physically and politically. (The thought crossed my mind that I would want Brown on my side in any bar fight.) But, as I said in an opening paragraph, Brown is an activist. She seems to understand the scientific endeavor, but science isn’t her main business. It’s difficult to imagine anyone checking her numerous sources, except perhaps a scholar funded by the nuclear industry. The hire would pretty much have to be a Ukrainian with a very good command of English, because a high proportion of the book references are in Russian, or even in Ukrainian. It’s not going to happen. No one is likely ever to check all her sources — not even a principled sample of her sources, not even a handful.

Yet, I am thinking, a portion of her alarming assertions is probably true, and official sources probably underestimate the health damage caused by the Chernobyl accident. If nothing else, the secretive habits of the Soviet informational first responders at the time pretty much guaranteed that some data were locked up, and others simply not collected. The health lessons that Chernobyl has for today are still necessarily limited. The accident happened in connection with a primitive nuclear technology and under the rule of a political system that was routinely both criminal and mendacious. Since Chernobyl, the nuclear reactor core at Fukushima melted down in the worst possible context of a natural catastrophe. Dissimulation of the health consequences of the Fukushima disaster was unlikely in the relatively open Japanese society. Radiation leaks took place in the midst of a population especially sensitive to such dangers. And yet, not much appears to have happened to anyone’s health that can be linked to radiation.

So, Manual for Survival has moved the needle a little for me — not much, but some. The best way I can express it is this: I would still advocate the replacement of nearly all coal-fueled energy production plants with nuclear plants. I would probably refrain from the same recommendation in connection with relatively clean natural gas plants. That’s because there is no doubt that coal burning pollutes in several ways, irrespective of the reality of the climate change narrative. Natural gas is so clean by contrast that it may not be worth it to take even the slight and poorly demonstrated health risk that may be associated with accidental radiation exposure in order to avoid burning gas.

Her monumental work is largely irrelevant for rationalists, except from a historical viewpoint. It may stand well as another chapter in the sorry history of the Soviet Union.

Of course, if someone whom I thought qualified reviewed Brown’s multiple sources and pronounced them mostly adequate, I would revise my judgment again about the safety of nuclear energy production.

In the end, her monumental work is largely irrelevant for rationalists, except from a historical viewpoint. It may stand well as another chapter in the sorry history of the Soviet Union. The primitive technologies and the incompetent and weak sociopolitical controls of Chernobyl are gone for good. There is a segment in Steven Pinker’s well-documented Enlightenment Now (2018) about both the disadvantages and the overwhelming advantages of nuclear power (pp. 144–150). Why, even climate-change-fixated National Geographic shows a few signs of coming around! Though not many signs: see the short feature on nuclear engineer Leslie Dewan, in the March 2019 issue.


Editor's Note: Review of "A Manual for Survival: A Chernobyl Guide to the Future," by Kate Brown. Norton: New York, 2019. 432 pages.



Share This


Take Me to Your Libertarians

 | 

Just when I was in despair about the world’s declining interest in libertarianism, my hopes have been revived.

Patrick Byrne, a libertarian billionaire, has made news by announcing that he developed a relationship with a woman named Maria Butina, a Russian who is now in an American prison for having failed to register as a foreign agent. According to journalist Sara Carter,

Butina . . . told Byrne, that [Alexander] Torshin, the Russian politician who [sic] she had been assisting while she was in the U.S., had sent her to the United States to meet other libertarians and build relations with political figures. She repeated to him numerous times that she was not a spy, even when he directly asked her.

Whether she was a spy or not, the idea is flattering to libertarians, as is the interest purportedly taken by the American government in such doings. According to Butina’s lawyer, Robert Driscoll,

At some point prior to the 2016 election, when Byrne’s contact with Maria diminished or ceased, the government asked and encouraged him to renew contact with her and he did so, continuing to inform the government of her activities. Byrne states he was informed by government agents that his pursuit and involvement with Maria (and concomitant surveillance of her) was requested and directed from the highest levels of the FBI and intelligence community.

Well, there you have it. Libertarians are more interesting than they think. Do you know who your friends really are?




Share This


Russiagate, Version 34.2

 | 

In 1884, a Republican (and Protestant) demagogue called the Democrats the party of "Rum, Romanism, and rebellion."

Nice start. But today, if he wanted to denounce that party, he could add "racism and Russianism" to his mantra.

No Russian collusion? Bah! Humbug! There has been Russian collusion since the 1930s! At least since the Franklin Roosevelt administration recognized the Communist dictatorship, there has been collusion, including, for example, Soviet agents deep within the FDR administration, such as Alger Hiss and Harry Dexter White (to name but two). Scientist Robert Oppenheimer eventually lost his security clearance because of his affiliations with Stalinists.

There has been Russian collusion since the 1930s, since the Franklin Roosevelt administration recognized the Communist dictatorship.

During the Truman administration, there were still more charges that federal officials and employees were agents of Soviet imperialism. People wondered, for instance, how the communist forces in Korea seemed often to know in advance about "United Nations" military actions and plans.

John Kennedy's last well-known sexual escapade was with a German woman suspected of being a spy for the Soviet empire. Lyndon Johnson did so much damage to the same United States that he might as well have been a Soviet sleeper agent, but probably wasn't. With presidents like that, we didn't need foreign enemies.

During Ronald Reagan's presidency, Democratic Senator Ted Kennedy privately asked the Soviet Union to help him defeat Reagan. President Barack Obama very famously, on that notorious open microphone, sent a message via Russian President Dmitry Medvedev to Vladimir ("Ras") Putin to just hang on, that he, Obama, would have more leeway after his second term began.

John Kennedy's last well-known sexual escapade was with a German woman suspected of being a spy for the Soviet empire.

And now, after quiet speculation, there is more open and public consideration that "The Dossier" might well be the result of, yep, Russian disinformation. Via willing, nay, eager Democrats (and Republicans).

So don't buy any of that Trump-supporter nonsense that there has been no Russian collusion. Yes, there was.




Share This


Mueller Time

 | 




Share This


Eerie Sounds and Apparitions

 | 

How strange our political people are!

Their strangeness isn’t enough to make their lives interesting. Ronald Reagan, Harry Truman, Lyndon Johnson, the many Roosevelts — all had fascinating lives, no matter how you assess them. Robert Novak, the political commentator, wrote a fascinating account of his own life. But who wants to read a biography of Donald Trump or Hillary Clinton or Charles Schumer or Nancy Pelosi or Chris Matthews or George F. Will?

Yet such people have the power to create those uncanny moments that shake one’s faith in a rationally comprehensible world. It’s as if one heard a voice from the closet, calling, “Eat more rocks!” What? you wonder. What was that? The voice said what?

Brennan has repeatedly denounced Trump for denouncing people in the same way in which he himself denounces Trump.

On August 18, John Brennan, former CEO of the CIA, said something that has had me reading his words over and over, trying to figure them out — but it just isn’t possible

Since the 2016 election, Brennan has made a lot of statements that were over the top, especially statements about Donald Trump, who failed to reappoint him to any leading office in the secret police. He has repeatedly denounced Trump for denouncing people in the same way in which he himself denounces Trump. Responding to Trump’s meeting with Vladimir Putin in Helsinki, where Trump neglected either to denounce Putin for interference in the 2016 election or to bomb the former Soviet Union back into the Stone Age, Brennan tweeted (July 16):

Donald Trump’s press conference performance in Helsinki rises to & exceeds the threshold of “high crimes & misdemeanors.” It was nothing short of treasonous. Not only were Trump’s comments imbecilic, he is wholly in the pocket of Putin. Republican Patriots: Where are you???

That was enough to indicate that although Brennan spent his official life trying to identify people who were committing treason, he has no idea of how treason is defined. (See Article III, Section 3 of the Constitution.) The message showed his incompetence as well as his aptitude for slander. But it was not impossible to understand.

On August 18, however, he went on Rachel Maddow’s show and moved boldly into the realm of the surreal. Maddow noted, quite sensibly, that he had accused Trump of committing treason, but this seemed a new thought to Brennan. Looking, as always, like Zinjanthropus with a bad hair day, he denied that he had done that. Here are his remarks, as transcribed by The Hill:

I did say that it rises to and exceeds the level of high crimes and misdemeanors and nothing short of treasonous, because he had the opportunity there to be able to say to the world that this is something that happened.

And that’s why I said it was nothing short of treasonous. I didn’t mean that he committed treason. But it was a term that I used, nothing short of treasonous.

That speech must have left Maddow feeling pretty woozy; I know it made me that way. As she observed, again quite rationally, “nothing short of treasonous means it’s treason.” “Well,” she said, trying to make some kind of sense out of this, “you didn’t mean that he committed treason, though?” “I said,” Brennan replied, “‘it’s nothing short of treasonous.’ That was the term that I used, yeah.”

The message showed his incompetence as well as his aptitude for slander.

Maddow might disagree with me, but at this point I wondered how many surreal people have infiltrated our government. Plenty, I think. But my worst moment came when I looked at the summary that The Hill, which is a mainstream venue, made of Brennan’s account of his “treason” claim:

Former CIA Director John Brennan said that he didn’t mean President Trump had committed treason when he called Trump’s press conference with Russian President Vladimir Putin “nothing short of treason."

Brennan clarified the comment during an interview Friday, after NBC’s Rachel Maddow said Brennan said the press conference “rose to treason.”

Clarified . . . Clarified? Tell me, isn’t that Rod Serling, standing at the back of the set?




Share This


Intimations of Immortality

 | 




Share This


When Stalinists Collide

 | 

There is a newly released movie called The Death of Stalin. It’s not really about Stalin or his death, but you should see it anyway. One reason is that it’s been banned in Russia; the other, much more important reason, is that it’s really good and really entertaining (in a really grim way).

Stalin does appear for a few minutes at the start of the film, where we see him as a drunken clod with a low sense of humor and a proclivity for intimidating and boring his colleagues. Like Hitler, he forces people to stay up all night watching B movies from Hollywood. Then he dies, and the real story begins, as the second and third bananas battle one another to capture his authority. The movie is about the difficult process of redistributing power in an ideological regime that has become a personal regime and is now becoming a regime of bureaucrats. First came the Idea (communism); then came the Man (Stalin); now we have the Men, the party hacks and the heads of this or that, who survived long enough to start asserting their own personalities. We get to see what those personalities are, once asserted, and to study their grisly and comic clashes.

First came the Idea (communism); then came the Man (Stalin); now we have the Men, the party hacks and the heads of this or that, who survived long enough to start asserting their own personalities.

The lead actors are remarkably skillful at entering their roles and projecting them. Simon Russell Beale, playing Lavrentiy Beria, head of the secret police, succeeds in making Beria seem what he was, one of the most repulsive figures of history. Jeffrey Tambor, playing Georgy Malenkov, Stalin’s presumed successor, presents Malenkov as a man who, if you don’t like Woodrow Wilson, looks and acts exactly the way you imagine Woodrow Wilson looked and acted. Jason Isaacs, playing Marshal Zhukov, conqueror of Berlin, demonstrates that absurdly over-the-top masculinity still has its dramatic interest. Steve Buscemi, the star of the show, plays Nikita Khrushchev as the smartest and most complicated and most interesting of them all.

This is stage-play politics, but it might actually have been politics in the stagy totalitarianism that was the Soviet Union. Some of the characterizations do seem questionable to me. Stalin was not the overt fool that we see in Adrian McLoughlin’s performance (which no doubt responded to Armando Iannucci’s direction). Vyacheslav Molotov (Michael Palin), doesn’t seem rigid and doctrinaire enough, nor as constantly devoted to his insanely doctrinaire wife as Molotov actually was. (Stalin sent Madame Molotov to the gulag, but this did nothing to reduce her devotion to him.) I don’t know whether Svetlana Stalin was the way Andrea Riseborough (and the script) portrays her — a goofy, spoiled, adult brat — but I would have enjoyed watching her performance for much longer than the movie’s run time.

Simon Russell Beale succeeds in making Beria seem what he was, one of the most repulsive figures of history.

And here’s something strange. If you deplore, as I do, the creepy foreign accents that non-English speakers are given in Anglophone movies, there’s none of that in this film — everyone speaks with some kind of British accent. Yet hearing Stalin speak like a working-class Brit was startling to me, and the other people’s speech was only slightly less startling. That’s probably because I’m an American, so it all seemed foreign to me — but in a strangely displaced way. Yet that’s what’s supposed to happen on stage, isn’t it — some kind of strange displacement? The strangeness makes you conscious that you are watching someone else’s conscious performance, a re-creation of human life in which your own imagination needs to be involved.

So, for many reasons: if this film has already left your theater, make a note to see it when it comes out on DVD and other means of presentation.

Finally, here’s a SPOILER. Look away if you’re not ready for it.

Khrushchev wins in the end.


Editor's Note: Review of "The Death of Stalin," directed by Armando Iannucci. Main Journey-Quad Productions, 2017, 107 minutes.



Share This


OPEC Death Watch

 | 

A number of recent articles suggest that OPEC — that kleptocratic cartel that has artificially jacked up oil prices for so many decades — is in its death throes.

The cause is something upon which I have long commented in these pages: the roaring renaissance of the American oil and natural gas industry, a renaissance produced by entrepreneurial capitalism — as opposed to interventionist statism. While the Department of Energy funded wind and solar power, along with biomass and ethanol production, all of which together have accounted for only a tiny sliver of American energy production, and that only with massive subsidies and draconian mandates — private enterprise backed the winners: oil and natural gas.

But the recent dramatic increase in production and exportation was occasioned by Speaker Paul Ryan’s success in enacting into law the right of American energy companies to export those resources. This allows frackers (and ordinary drillers) to increase production, because they now have an unlimited world market within which to sell their products.

There's a roaring renaissance in the American oil and natural gas industry, a renaissance produced by entrepreneurial capitalism — as opposed to interventionist statism.

And this is already happening, as several noteworthy articles report. One is a Bloomberg report that of all countries, no less than the United Arab Emirates (UAE) — the fourth largest oil exporter in OPEC — is buying oil from shale wells in Texas. It turns out that the Texas crude is much “sweeter” (lighter and of superior quality) and more useful to the UAE’s refining than the local brand. The 700,000 barrels of oil that it is buying are their first purchase from us.

Bloomberg notes that while American exports to the UAE are not projected to continue, the explosion of American oil exports will. Shipments from America rose from a mere 100,000 barrels per day (BPD) five years ago to 1.53 million BPD in November of last year.

Besides increasing American exports of oil, the fracking revolution has reduced non-American imports to below 3 million BPD, the lowest level since data were first gathered 45 years ago. Our current net imports are only one-fourth of what they were in 2006, and we are likely to become a net exporter in about a decade — sooner, if ANWR is finally tapped, and new offshore areas are opened up for drilling.

The 700,000 barrels of oil that the UAE is buying are their first purchase from the US.

A second story reports the rapid growth in exports of domestically produced natural gas. It reveals that China has signed a long-term contract with Cheniere Energy — a major exporter of liquefied natural gas (LNG) — under which Cheniere will ship LNG from the Gulf Coast to China. Under this contract, Cheniere will provide 1.2 million tons of LNG annually to China, starting in five years, and lasting for 20 years after that.

And there is a third story, which notes that besides a rapid rise in American LNG shipments to China, we are seeing an explosion of exports of American crude oil shipments to that country. These exports have mushroomed from zero, before two years ago, to 400,000 barrels per day during the past two months. And again, if we bust open ANWR and the coastal waters of Alaska, such exports will increase even more quickly.

One nice side effect of this is that the more oil China buys from us, the lower our balance-of-trade deficit is with China. Two months ago our trade deficit with China was $25.55 billion. Last month it dropped to $21.895 billion.

Our current net imports are only one-fourth of what they were in 2006, and we are likely to become a net exporter in about a decade.

For the foreseeable future, of course, China will continue to buy most of its oil from Russia and the OPEC countries. But our share of the Chinese market will grow, for two reasons. First, at $60 per barrel, American crude is more than $4 cheaper than the benchmark (Brent) price. Second, while there are certain infrastructure bottlenecks that have to be overcome, they are being addressed. For example, while we don’t yet have ports capable of handling the biggest oil tankers (“Very Large Crude Carriers”), we have already started expanding one of the largest ports on the Louisiana coast.

All of this has added to the stress on OPEC that may result in its collapse as a cartel: the members of the cartel may go their own ways. The recent uptick in oil prices above the $60 per barrel range has helped OPEC find some relief. The recovery of the old price from its lows in the $40–50 range has two causes.

One is the meltdown of socialism in Venezuela, which has cut its oil production dramatically. Venezuela, a founding member of OPEC, is allocated by the Cartel to produce 1.97 million BPD. But the near civil war in Venezuela has dropped actual production to only 1.64 Million BPD. In fact, Venezuela’s production dropped by a whopping 30% last year alone. This is a steeper decline than that experienced by Russia when the Soviet Union broke up, and that experienced by Iraq following the 2003 invasion!

As noted by the Wall Street Journal article that I am referencing, the drop in Venezuelan petroleum output will likely continue, if not accelerate, because the nation is trapped in a vicious socialized spiral. As it exports less, it receives less foreign currency, which cuts its ability to buy food and other necessities that its own dysfunctional economy cannot produce, which in turn increases its hyperinflation and thus the political and economic failure. Moreover, Venezuela’s declining shipments of crude are deducted to paying creditors (such as Russia) and are in constant danger of being seized by creditors.

All of this has added to the stress on OPEC that may result in its collapse as a cartel: the members of the cartel may go their own ways.

In short, the ill winds that have so badly buffeted the hapless Venezuelan people have blown great good to the rest of OPEC. I suspect this is the real reason why Russia — no longer itself socialist — so strongly supports the Venezuelan socialist regime: it keeps a formidable competitor on the ground. The Russians want nothing so much as fair competition — the history of their Olympic teams shows that!

Speaking of Russia, the second major reason that OPEC has been able to keep the price of oil as high as it has recently (i.e., in the $60–70 per barrel range) is that so far Russia has stuck to its agreement with OPEC to hold down production. In early 2017, OPEC and Russia — which, while not a member of OPEC, is certainly an ally of it — agreed to cut back Russia’s production. This agreement has held up for thirteen months, now, and the Russians have signaled that they are inclined to keep to the bargain through the rest of this year and even into the first half of next year. However, the Russian oil oligarchs are expressing doubts about the deal — since Russia needs to maximize its income in order to arm itself maximally.

Vadim Yakovlev, deputy CEO of Gazprom Neft, the giant Russian oil company, has said that the company views the OPEC agreement as only temporary, and it irks the company to be forced to hold back production. Gazprom’s CEO Alexander Dyukov has said, “Following the OPEC agreement, instead of growing at eight to nine percent, we [Gazprom] have increased by just 4.5 to five percent. Which is, without a doubt, a negative factor for us.”

At this point, American production is a regulator of world prices: whenever the price rises much above $60, the industry jacks up production, and the result brings the price right back down.

It is clear that OPEC’s day of rule is coming to an end. America — already the greatest producer of oil and natural gas combined — is on track to become the world’s biggest oil producer this year. Energy research firm Rystad Energy estimates the US production will rise by 10%, hitting 11 million BPD. America hasn’t been the global leader since — 1975!

The report from which I have drawn that last piece of information notes that in 2015 the Saudis drove oil prices down to $26 a barrel. This lowered American production by 11%. But the American oil industry, not destroyed, became stronger — and more efficient, able to turn a profit with prices as low as $30 a barrel. While some experts are not so sanguine about the US becoming number one, it is clear that our production will continue to grow. At this point, American production is a regulator of world prices: whenever the price rises much above $60, the industry jacks up production, and the result brings the price right back down. A recent article spells this out — oil prices have been driven down by American production’s rise to a new high of 10.25 million BPD.

In sum, the days of OPEC — an evil cartel of evil states, from socialist Venezuela to religious-fascist Iran to duplicitous Saudi Arabia to revanchist neofascist Russia — are numbered. The free market will at last prevail.




Share This


The Geo-Petroleum Order Overturned

 | 

Several recent articles point to the continuing rapid evolution of the world’s geopolitical order in regard to energy — what I dub the “geo-petroleum order”. The upheaval was caused by America’s resurrection as a dominant oil and natural gas superpower, which in turn was caused by the fracking revolution. This resurrection, I would suggest, has had two phases.

The first phase started in the 1990’s, when George P. Mitchel combined hydraulic fracturing (known for decades) with horizontal drilling. This technique — fracking, as it has come to be known — allowed oil production in America to grow like a bodybuilder on steroids. It grew linearly up about 50% between 2011 and 2015. This allowed the US to shrink steadily as a net oil importer. We are close to hitting the goal of zero net imports, which is to say we are close to energy independence. Moreover, fracking drove the price of oil down by something like two thirds, to the current range of $40 to $60 per barrel.

The introduction of that kaleidoscope creator of pointless boondoggles, the US Department of Energy, was another monumental mistake.

The second phase began when House Speaker Ryan managed — amazingly! — to get a bill through Congress allowing domestically produced oil to be sold abroad. And he got President Obama — no big fan of fossil fuels — to sign it into law. As I noted at the time, this was an astounding piece of work. It overturned a grotesquely stupid law (passed during the energy crisis of the 1970s) that forbade the sale of presumably scarce domestic oil abroad. It never occurred to the morons who enacted this law that it would discourage oil companies and innovators from finding different ways to extract oil here, and making them look abroad instead.

Parenthetically, I would suggest that future historians will record that it was primarily our own idiocy that caused our energy shortages during the period running from the OPEC oil embargo to the rapid rise of fracking — a period that saw the greatest transfer of wealth from the US to its enemies ever known, for which we were “rewarded” by terrorist attacks and Russian neoimperialism. The enactment of the aforementioned subhumanly stupid law prohibited the shipment of American-produced oil, incentivizing oil producers and innovators to focus on foreign oil production. The introduction of that kaleidoscope creator of pointless boondoggles, the US Department of Energy (DOE), was another monumental mistake. The projects it forced innovators to pursue exhibited a degree of asininity seldom exceeded in the private realm. These projects range from syn-fuels and geothermal energy to biomass and corn ethanol (the mother and father of all boondoggles) to solar farms and windmills that shred birds and produce expensive energy at the very times it is least needed. Another DOE achievement was killing of the fast breeder reactor, which would have taken the nuclear “waste” we have accumulated and use it as fuel.

The DOE should top the list of federal departments to be eliminated. And for those of you who are worried about a rise of ocean levels said to be caused by global warning, may I offer a helpful hint? Just create a US Department of Water Creation, and the ocean levels won’t just fall; they will simply dry up.

Development in ANWR will provide thousands of high-paying jobs and $60 billion in royalties for the state — some of which goes directly to the people of Alaska.

But I digress. The flawed tax bill recently passed by Congress and signed into law by the president contains a provision allowing limited drilling in the formerly locked away Alaskan National Wildlife Reserve (ANWR). ANWR — which is in the middle of nowhere, and protects nothing but mosquitoes — was created at a time of high oil prices, and with only one purpose: to deny oil companies the chance to develop a small piece of vast Alaska. ANWR was, of course, opposed by the great majority of actual Alaskans but favored by soi-disant “environmentalists” in Silicon Valley and Beverly Hills. But then, neither Silicon Valley nor Beverly Hills has Alaska’s unemployment rate, which is the highest in the nation. Nor do they have Alaska’s large budget deficit.

Development in ANWR will provide thousands of high-paying jobs and $60 billion in royalties for the state — which puts some of the funds in a master-fund, the income of which goes directly to the people of Alaska. ANWR will also rejuvenate the Alaskan Oil Pipeline, keeping that great project alive. Not bad, considering that the drilling will take place on less than 2,000 acres — which is one-hundredth of 1% of the ANWR reserve.

It has also been reported that the $3.8 billion dollar Dakota Access Pipeline — created to ship the burgeoning oil production from fracking operations in North Dakota — is delivering bountiful benefits after only six months of operation. Lowering the cost of shipping has caused an increase in production. October’s production hit 1.185 million barrels per day (BPD), which is about a 13% increase over the peak before the pipeline.

As a result, unemployment in North Dakota is exceptionally low (2.3% in November), state revenues rose by $43.5 million in the first five months since the pipeline opened, and the pipe is projected to deliver $210 to $250 million in extra tax revenue by the end of its first two years. That’s delivering the green!

Saudi Arabia is now looking to invest in — American shale operations! How the geo-petroleum worm has turned.

Speaking of green, there has been a bonus for the environment as well. The pipeline has eliminated about 83% of the train traffic carrying oil, with only two trains a day now needed to transport oil instead of the 12 needed before the pipeline. This dramatically decreases the chance of ecologically damaging oil spills, or hominid-damaging oil explosions when trains carrying oil crash.

Another encouraging report explores an unseen upside of the growth in American fossil fuel production. The domestic steel industry — long an industry under stress from foreign competition — is itself experiencing a rebirth. Both oil and natural gas are shipped mainly by pipeline (unless misguided environmental activists stop the projects) and the pipes aren’t made of wood; they’re made of steel. Recently the newer domestic steel plants have become dramatically more efficient and are increasing capacity in anticipation of the pipeline buildout.

One American steel manufacturer projects growth in domestic oil and natural gas for the next ten to 20 years. Shipments from American steel producers went up 5% in the first ten months of last year — not as good as the 15% experienced by foreign producers, but still on the right track.

Some American manufacturers worry that the domestic buildout in steel plants will lead to a glut. But research done by Pipe Logix estimates that the number of oil and natural gas wells increased by 60% in 2016 alone. Those wells, and the pipes that ship their products, both require steel. So the worry about a “glut” of domestic steel mills seems exaggerated.

The foxy frackers just tightened their operations and kept innovating, winding up with an amazingly flexible industry that remains profitable in a below-$40 per barrel environment.

The American fossil fuel renaissance is having an impact on our major oil competitors. There is fascinating news that Saudi Arabia is now looking to invest in — American shale operations! How the geo-petroleum worm has turned!

Specifically, Aramco — the Saudi state-owned oil company — has approached the Houston based natural gas producer Tellurian, looking to invest. Aramco is also looked at acquiring assets in the two huge fossil fuel basins, Permian and Eagle Ford.

Admittedly, these developments are only incipient. But the fact that the Saudis are knocking at the door marks a major shift. They realize that America — once a pitifully energy-dependent giant brought its knees by despicable dictators sitting on top of large oil reserves — is now the world’s biggest producer of oil and natural gas, eclipsing both the always-treacherous Saudis and the authoritarian Russians. If you add on our coal production, we completely eclipse other countries in fossil-fuel production.

How sad that is for oil potentates, socialist caudillos, and dictators in general, who got fat on oil at an over-$100 price!

Of course, while we are the world’s largest producer of oil and natural gas, we are still net importers, because we consume so much. But as we increase production, we will become a net exporter. And this is what the Saudis realize. Aramco already owns some refineries in the US (and elsewhere in the world), but all Saudi production of oil and natural gas takes place in Saudi Arabia. The new leader of the country (Crown Prince Mohammed bin Salman) plans to privatize Aramco, and the IPO shares would fetch a higher price if Aramco sites production here.

The Saudis have two other reasons for wanting to buy into US oil and natural gas production. First, they aim to understand better how fracking works in such nimble ways. A couple of years ago, the Saudis tried to drive the frackers out of business by jacking up their own production and thus driving down prices. For a while, the price of oil hit about $30 per barrel. This caused the Saudi government to hemorrhage foreign reserves, but the foxy frackers just tightened their operations and kept innovating, winding up with an amazingly flexible industry that remains profitable in a below-$40 per barrel environment. When the price drops that low, less efficient operations get closed, but they can be expanded again, in the blink of an eye, when oil goes over $50 a barrel. How sad that is for oil potentates, socialist caudillos, and dictators in general, who got fat on oil at an over-$100 price!

The Saudis envy this flexibility and deeply resent the fact that it will keep the price of oil below $60 a barrel for the indefinite future. Witness the Crown Prince’s attempt to seize the assets of corrupt relatives and get Saudis used to working, rather than living on welfare paid by the rest of the world.

The Russians have “kept up” with American technology since the time of Lenin, usually by stealing it.

The other reason the Saudis want to have operations here is that they want to shift from their reliance on their own oil to power everything. The world’s natural fossil fuel distribution has involved using oil to power transportation, but natural gas and coal to generate electricity — and coal is a much dirtier fuel. But Saudi Arabia’s own natural gas reserves — which are about equal to America’s — are sulfur-laden and hard to get out of the ground. So to convert its production of electricity to natural gas, the country would have to import 12 million metric tons of LNG annually. Extracting that here in America would make sense.

But I have another, deliciously rich, piece of news. It is said that imitation is the sincerest form of flattery. If that’s true our archenemy Russia is flattering us in the extreme. It is trying to develop its own shale.

Russia’s main shale formation — the Bazhenov formation — is the largest in the world. And Russian oil production is the largest in the world. But Russians are looking at oil fields that are six decades or more old, and have declining outputs. So they want to do what America did: recover peak production by means of fracking. The trick is to replicate America’s technological expertise. To this end, the Russian government — i.e., Putin and his corrupt cronies — is offering tax incentives for shale companies, and incentivizing cooperation among energy companies and research institutes to develop fracking technology.

Alexei Vashkevich, exploration director for Russian energy conglomerate Gazprom Neft, who conveniently worked on the North Dakota’s Bakken formation operations, assures us that the Russians won’t rip off American technology but will develop a totally different Russian technology.

Oh, please, Alexei — as if the new Russian 5th-generation fighter weren’t a direct clone of America’s F35. The Russians have “kept up” with American technology since the time of Lenin, usually by stealing it. Witness A-bomb plans stolen by spies, F35 plans, obviously filched by cyberspies, aka hackers, who use the computer and internet technology they stole from — Americans!

We should work to keep oil prices so low that they delay Russia’s massive military buildup.

The news article just mentioned observes that it will be, perhaps, another six or seven years before Russian fracking operations produce very much, in part because of the embargo placed on Russia when it dismembered Ukraine. But wait: if the Russian technology-to-be is going to be totally different from America’s, why would the denial of that technology hold back Russia’s development?

I think you can expect Russia to do three things in the immediate future.

First, you will see it unleash its hackers to steal massive amounts of American fracking technology. My advice to American fracking companies is this: If you haven’t done so already, set up encryption and other barriers to stop cyberspies from an orgy of theft.

Second, you should be prepared to see mysterious “environmental” groups spew colossal amounts of deceitful anti-fracking propaganda. These groups will be funded by Putin for the sole purpose of retarding America’s own fracking.

Third, you can expect a dramatic increase in Russian meddling with elections, here and in Europe, by feeding propaganda to news media and funds to political activist groups. They likely played a role in strangling Poland’s development of its own substantial shale formations — keeping Poland and the rest of Eastern Europe dependent on Russian natural gas and oil. No doubt they will try to elect anti-fracking candidates here as well.

My strong belief is that we should work to keep prices so low that they delay Russia’s massive military buildup. To do this, we need to open up more offshore sites, and more in Alaska, and push for the systematic exploration of the Arctic.

In this regard, there is some very recent good news. Secretary of the Interior Ryan Zinke has announced a plan that would overturn the Obama administration’s effort to restrict offshore drilling to only 6% of the American coastline. Under the new plan, fully 90% of offshore areas would be opened, in the largest sale of offshore leases in history. This is a huge new step towards the goal of making America, in Zinke’s words, “the strongest energy superpower.”

While oil company CEOs may fear a glut — and lower prices — consumers would welcome it.

This means that Southern California’s coastline would be open for offshore drilling for the first time since the late 1960s, when it was closed because of an oil spill in Santa Barbara. The East Coast offshore areas would also be reopened.

Naturally, environmentalist groups are already screaming. For example, Diane Hoskins of the activist group Oceana called the plan “absolutely radical.” This is to be expected. Democratic governors in several states (including California, Oregon, North Carolina, and Washington) also expressed complete opposition, and some Republicans became alarmed as well. Senator Marco Rubio and Governor Rick Scott both came out against drilling off Florida’s coastline.

Even oil companies have stated reservations, since they are now experiencing what they regard as a glut of oil. But while oil company CEOs may fear a glut — and lower prices — consumers would welcome it.

Zinke has pointed out that the plan will not be finalized until 2019, and only after comments have been received in public hearings around the country. While all that is pending, we can be thankful for inventive frackers and the prosperity they have given us.




Share This


Frackin’ . . . Like the Doo-Dah Man

 | 

Recent stories in the wonderful Wall Street Journal give us the happy news that (while receiving no coverage from the mainstream media, of course) the fracking revolution rolls on.

The first story reports that American crude oil exports are accelerating to new highs, rapidly approaching as much as Kuwait currently exports. Amazing. As of last month, we were exporting 1,984,000 barrels per day (BPD), an increase of nearly 500,000 BPD from the week before, and up an astounding 684,000 BPD in May. Considering that Kuwait ships about two million BPD, this is great news.

Admittedly, the US is still a net oil importer. But we import almost all the decreasing amount of foreign oil we need from our great ally Canada — our great ally, unless President Trump pulls out of NAFTA.

This exporting craze will only continue to build — if we don’t try to destroy our fracking industry, and allow it to flourish.

The reason for this surge in US crude oil exportation is that American crude is relatively cheap. In the week in which the record in exports was set, the US crude price was nearly $7 per barrel cheaper than the world standard. This is a new record low during the period since the 50-year-old ban on oil exports was lifted a couple of years ago, thanks to the much-maligned Congressman Paul Ryan.

In the irony that is the mother and father of all ironies, the second biggest buyer of America’s crude oil is our devoted enemy, China, which now takes about 180,000 BPD from us, up almost 900% from last year.

This exporting craze will only continue to build — if we don’t try to destroy our fracking industry, and allow it to flourish. All it needs is to be left alone in the free market. If so, it will guarantee that we never see $100 a barrel oil again ever. Here I must give Trump his props — he has allowed fracking to go unmolested.

What the frackers have shown is a profound and continuing ability to innovate and lower costs, in the face of an attempt by OPEC, that rent-seeking cesspool of corruption, to drive them out of business by lowering prices. But it was the OPEC companies that were driven to the wall.

This is just more of the daffy Malthusian “peak oil” thinking we’ve heard before.

The Wall Street Journal reports that one of the biggest natural gas fields from a decade ago, the Haynesville Shale field in Louisiana, has been reborn. Ten years ago it was productive, but five years ago it was nearly played out. Yet this field has come roaring back to life. The number of drilling rigs has tripled in the past year, and the current amount of natural gas is up by 17% in the same period.

What has allowed this resurrection of gas fields is “refracking” — the process of using more sand and extending the wells further. In fact, the US Geological Survey now estimates that the Haynesville, Louisiana and adjacent fields hold 300 trillion cubic feet of natural gas. That is a 430% increase over its 2010 estimate.

Helping the process is investor recognition that natural gas has a bright future. The US Department of Energy projects that over the next quarter of a century or so, use of natural gas will outstrip that of all other fossil fuels, especially coal. Cheniere Energy has a large liquefied natural gas (LNG) plant and export facility in Louisiana. Additional LNG plants are being built in Louisiana, Mississippi, Texas, and even Maryland.

Natural gas is the “feedstock” in many industries — petrochemicals, plastics, and fertilizers, to name the biggest. Nearly 80 petrochemical plants are being built in the Gulf Coast region alone, where they will result in jobs, and the continued resurrection of Dixieland.

The major hurdles are an apparent fall in innovation in the fracking industry, wariness among investors, and rising labor costs.

The WSJ notes that some “experts” are worried that the export market will siphon off so much natural gas that prices will rise, hurting manufacturers that are now ramping up. This is just more of the daffy Malthusian “peak oil” thinking we’ve heard before. We can simply increase production of natural gas from all over the US — from the Dakotas to Pennsylvania to Texas — to meet the demand. All the while good paying jobs will be created, and our adversaries (such as Iran, Russia, Saudi Arabia, Qatar, and Venezuela) will be kicked in their teeth.

When will the “experts” finally wake up and realize that in a free market there is no “peak” anything — least of all oil and natural gas?

In fact, during the past year, Castleton Commodities International spent more than a billion bucks to buy 160,000 acres of Anadarko’s Haynesville land. For that it got an infusion of capital from Tokyo Gas America, the largest utility in Japan. This shows the true expert assessment of fracking’s value.

A third WSJ article amplifies the idea that the glut of US production is spooking producers. In other words, it’s such a bitch that prices are set by supply and demand! The piece notes that the growth in the number of rigs — typically used as a measure of future activity &‐ dropped from 20% for the preceding four quarters to “only” 6% in the third quarter of this year.

Many of the OPEC states (especially Saudi Arabia) need oil to be around $100 per barrel to keep their economies stable and their citizens quiet.

This shouldn’t cause any pain. With the buildout of American industry and the roaring appetite of East Asian consumers, demand will just keep increasing. The Journal notes that US oil production may surpass the supposed “peak oil” production of 9.6 million BPD set in 1970. The major hurdles are an apparent fall in innovation in the fracking industry, wariness among investors, and rising labor costs. But despite the slowdown in the increase of production, there is no decrease in production, and the Energy Information Agency expects American oil production to hit 9.69 million BPD at the end of the year. This, despite oil prices stuck at about $50 per barrel.

The last WSJ story that I want to mention points to the continuing geopolitical fallout from the growth of US oil production. It reports that continued low prices on world oil markets have led Saudi Arabia, Venezuela, and other OPEC members to push Russia — which, while not technically an OPEC member, is surely a fellow traveler — to continue to agree to the current limits on production.

The narrative here is as simple as it is delicious. In the face of the American fracking revolution — which dropped world oil prices from over $100 per barrel a few years ago to $50 and below — OPEC has tried to figure out what to do. Many of the OPEC states (especially Saudi Arabia) need oil to be around $100 per barrel to keep their economies stable and their citizens quiet. But Putin’s regime has used Russia’s oil wealth for a huge military buildup, and kept Russian citizens happy by using military power to conquer the Crimea and threaten the rest of the former Soviet empire. To keep this up, Putin is prepared to sell as much oil as possible, even at lower prices, to fund his mechanisms of corruption.

In 2017 Russia agreed with the OPEC strategy to cut back production by 2% to keep prices from plummeting further. While this production cut helped raise the world price of oil by about 13%, American fracking has kept the world price well below $60 per barrel. But Russia’s participation in continuing the cuts is unclear, to say the least. The current agreement ends in March 2018, and OPEC is pushing the wily Putin to agree to extend it. The Saudis are offering to set up a billion-dollar fund to invest in energy projects.

The US should open all the spigots and end net importation of foreign oil once and for all.

Putin so far remains noncommittal. He can see what is obvious, which the WSJ article notes: if OPEC succeeds in raising prices, American shale companies can immediately crank up their output, rapidly driving the price back down.

Now, whether the Russians are bluffing OPEC to get more concessions, or simply intend to cover their drop in revenue by increasing their own production, we will have to wait to see. But I think the US should open all the spigots and end net importation of foreign oil once and for all. The US should make our own oil a major export. This means: opening up more federal land for fracking and offshore drilling, opening up ANWR in Alaska, opening the East Coast for offshore drilling, and pushing to open up the Arctic for the rapid exploitation of the region’s resources.

I would suggest to Trump that he get over his fears about free trade agreements and cut a deal that would allow him to sign the TPP agreement, but with one new provision: the TPP members should agree that if the US can sell them oil and LNG at world market prices, they will buy from us. That would eliminate the trade imbalances that so anger Trump (though not economists, of course). It is, alas, very doubtful that Trump can grow that much in strategic thinking.

that the export market will siphon off so much natural gas that prices will rise, hurting manufacturers that are now ramping up. This is just more of the daffy Malthusian ‐




Share This
Syndicate content

© Copyright 2019 Liberty Foundation. All rights reserved.



Opinions expressed in Liberty are those of the authors and not necessarily those of the Liberty Foundation.

All letters to the editor are assumed to be for publication unless otherwise indicated.