Green Energy Kills

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On days when Muslim terrorists aren’t killing people in London, progressive terrorists are killing people with their green energy insanity – which just killed dozens or hundreds of people.

Grenfell Tower inferno a ‘disaster waiting to happen’ as concerns are raised for safety of other buildings

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June 15, 2017 at 12:34PM

How Two Nobel Prize-Winning Economists Got Oil Wrong

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My recent book details the numerous mistakes made by many experts — real and apparent — about the oil market and oil prices.

This post will point to two in particular (the latter of which did not appear in the book).  Robert Solow and Paul Krugman are both M.I.T. professors of economics (Krugman only for a time) and Nobel Prize winners in economics.  I had an undergraduate course with the former, and very minor contact with both over the years (neither of whom is likely to remember me) and consider them to be scholars and gentlemen.

Which doesn’t mean they haven’t been seriously wrong about petroleum economics in ways that are instructive to us all (in theory; in practice, I’m not so optimistic about our ability to learn). The former allowed himself to be blinded by math, the latter more by ideology, but both fall prey to what Tom Nichols (author of the excellent book The Death of Expertise) calls “stretch[ing] their expertise from one area to another.”

To the WABAC machine, Sherman. December 1973, the American Economic Association is holding its annual meeting in Boston, its members spread out across a number of hotels (and a larger number of bars).  The October/Ramadan war between Israel and Egypt and Syria (primarily) had broken out two months earlier, and OAPEC (not OPEC) declared an oil embargo (the second, not first) and cut production by 4 million barrels a day, at the same time that some of their negotiators were meeting with the operating companies in Vienna to demand higher tax payments.

Not surprisingly, given the tight oil market at that time, oil prices shot up, roughly tripling in a few months. By the time of the AEA meeting, the first Oil Crisis had begun and naturally was an object of attention. Two speakers in particular are of interest here, one a young Robert Solow, who promoted what came to be known as the Hotelling Theory, an interpretation of a 1931 article by Harold Hotelling. Briefly, it could be shown mathematically that mineral prices should rise exponentially over time. Later, other economists would argue oil prices in particular should rise at the rate of interest, roughly 3% per year above inflation.

The figure below, showing oil prices up to 1972, should immediately have thrown this into question. There is obviously no such trend as the Hotelling theory would predict. Indeed, quite a lot of work has been done to show that mineral and energy prices do not have historical trend towards rising prices. Indeed, this was the subject of a famous wager between Julian Simon and Paul Ehrlich, which Ehrlich lost badly (and foolishly, betting on rising prices after a period of rapid inflation).

Author from BP data.

Oil Price in 2015$

Now, it is true that oil prices had not been governed by a free market through most of the period before 1973, which can could be a rationalization for the theory’s failure, although not as much for prices of metals, for example. What might be more troublesome is that another M.I.T. economist, M. A. Adelman (my friend and mentor) also spoke at the 1973 AEA meeting and he was a resource economist, who had the previous year published The World Petroleum Market, a data-heavy exploration of petroleum economics. He ascribed the price increase to the production cutbacks.

Which view prevailed? Neither at first, especially since the market began to weaken after 1974. However, as a chorus of voices were raised to say that oil markets would tighten again and prices renew their upward march (see chapter 2 of my book), the onset of the Iranian Revolution, when prices soared again, the consensus somehow interpreted the effect of a 6 million barrel per day supply disruption as unimportant and argued rising prices were due to resource scarcity. The Solow interpretation of Hotelling dominated the oligopoly view of Adelman.

Fast forward to the peak oil “crisis” of the 2000s and our second economist, then Princeton professor Paul Krugman, is a columnist for The New York Times and as such, presumably felt compelled to talk about the high oil prices in 2008 and the peak oil theories. And he gets both completely wrong.

In a May 12, 2008 column, Krugman pooh-poohed the idea that speculation was driving the oil price (then at $125 a barrel), saying:  “all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn’t the result of runaway speculation; it’s the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China.”

Full post

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June 15, 2017 at 11:25AM

US Energy Department Closes Office Working on Climate Change Abroad

via The Global Warming Policy Forum (GWPF)
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WASHINGTON — The Energy Department is closing an office that works with other countries to develop clean energy technology, another sign of the Trump administration’s retreat on climate-related activities after its withdrawal from the Paris agreement this month.

The 11 staff members of the Office of International Climate and Technology were told this month that their positions were being eliminated, according to current and former agency employees. The office was formed in 2010 to help the United States provide technical advice to other nations seeking to reduce greenhouse gas emissions.

The small office also played a lead role preparing for the annual Clean Energy Ministerial, a forum in which the United States, China, India and other countries shared insights on how best to promote energy efficiency, electric vehicles and other solutions to climate change.

Word of the closing came right before Rick Perry, the energy secretary, attended the latest Clean Energy Ministerial meeting in Beijing on June 6 to 8, agency employees said.

Full story

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June 15, 2017 at 10:55AM

Mid-June Arctic Ice Persisting

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Environment Canada photo shows ice on the water near Newfoundland.

Icebreaker CCGS Amundsen diverted from science mission, continues search and rescue work

CBC June 12, 2017
Environment and Climate Change Canada said ice conditions improved slightly on Monday in the Strait of Belle Isle but continue to be troubling off the northeast coast of Newfoundland, which is seeing a higher than normal concentration of ice.

“Typically there would be very little or no ice left in either of these areas at this time of year, let alone the thick ice pack we are currently seeing off the northeast coast of Newfoundland,” a spokesperson for the federal department said in an email.

PolarBearScience describes how the ice situation developed this spring caused by winds, cold temperatures and icebergs.

The tour (record of reports) is illuminating because it shows the development of the thick ice over time and shows how strong winds from a May storm combined with an extensive iceberg field contributed to the current situation. . .By 11 June the ice charts show little ice off southern Labrador but thick first year ice but lots of “old ice” in many places around northern Newfoundland. These must be crushed or compressed icebergs incorporated into the thick first year pack ice.

The image above shows the icing pattern on the European side. beyond Canada.  Compared to 2016, Svalbard  and Franz Joseph Land coastlines are much more enclosed.  Along the Russian coast of Kara, the water is opening up sooner. The graph below shows the first 14 days of June.  2017 was holding a lead of  200k km2 above average and  2007 and much greater than 2016.  Yesterday 2017 extent dropped 270k km2 to erase the lead at this time.

The graph below excludes the Pacific seas of Okhotsk and Barents, which are melting early (~80k km2 below average as of yesterday) obscuring what is happening in central and Atlantic Arctic seas.

On this basis, 2017 is matching both average and 2007, and about 200k km2 more than 2016.

Barents Sea shows how unusual are 2017 sea ice extents inside the Arctic Circle.  The graph below shows Barents this year compared to average and other years.

The black line is average for the last 11 years.  2007 in purple appears as an average year.  2014 had the highest annual extent in Barents Sea, due to higher and later maximums, holding onto ice during the summer, and recovering quickly.  In contrast, 2016 was the lowest annual extent, melting out early and recovering later.  2017 in blue started out way behind, but grew rapidly to reach average, and is still persisting to exceed even 2014.

The table below shows extents on day 165 in the various Northern seas where ice is found.

The difference between 2017 and average is matched by the early losses in Bering and Okhotsk.  Otherwise, there are some early melting in BCE (Beaufort, Chukchi, East Siberian) and Kara, offset by surpluses everywhere else.

For more on why Barents Sea matters see Barents Icicles

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June 15, 2017 at 10:52AM