Lies my leaders told me

Union of Concerned Scientists:

This report presents seven “deception dossiers”—collections containing some 85 internal company and trade association documents that have either been leaked to the public, come to light through lawsuits, or been disclosed through Freedom of Information Act (FOIA) requests. While many of these documents have been analyzed by others (Oreskes 2011; Oreskes and Conway 2010; Gelbspan 1998), these dossiers offer the most complete and up-to-date collection yet available.
…
Each collection of internal documents reviewed here reveals a separate glimpse of a coordinated campaign
underwritten by the world’s major fossil fuel companies and their allies to spread climate misinformation and
block climate action. The campaign began decades ago and continues today. The fossil fuel industry—like the tobacco industry before it—is noteworthy for its use of active, intentional disinformation and deception to support its political aims and maintain its lucrative profits.

Since they used the tactics of the tobacco companies, let the oil companies be sued and regulated into oblivion… hopefully more effectively than has been done with the tobacco companies.

[Image from World Lung Foundation, Tobacco Atlas 4th ed.]

The demise of the dollar and the rise of the Russian petrostate?

That’s what Marin Katusa, author of The Colder Cold War: How the Global Energy Trade Slipped from America’s Grasp, believes. Aired a few weeks ago, before the intensification of the ruble crisis, Katusa makes some excellent points (a number of which we have made on this blog year after year):

* Aggressive U.S. policy has had the perverse effect of bringing America’s chief rivals, Russia and China, much closer together
* The failure to push alternative energy has left the U.S. in the unenviable position of being dependent on the oil with some of the highest production costs
* Where alternative energy has been developed, it has in the past been dependent on government subsidies
* Russia directly controls a very large fraction of the low-cost reserves of gas, oil, and uranium in the world
* Russia indirectly controls more energy reserves through Russian companies, notably Gazprom operating in Israel and a uranium company, ARMZ, in North America
* A number of U.S. allies and neutral countries are heavily dependent on Russian energy
* OPEC regards North American energy producers as rivals that need to be driven out of business
* OPEC’s biggest customer is China, so its interests are no longer so deeply entangled with the U.S.
* The sanctions against Russia have accelerated the negotiation of contracts in currencies other than the dollar

Katusa predicts a dollar crisis, in which a number of countries ditch the dollar, the dollar starts to fall, and foreigners dump dollars. Then energy prices in dollars will rise, hurting the poor and middle class. (See here for an article about the dollar’s recent rise)

You can read more about Katusa’s views here.

Noting the usual caveat emptors–Katusa has heavy investment in the Slavic world, and probably some personal loyalty to it–this is still an interesting take on world events. Mercury Rising has repeatedly noted the dysfunctional U.S. approach to alternative energy, unconventional hydrocarbon development (fracking, deepwater drilling, etc.), and places like Ukraine and Venezuela. Certainly the U.S. has played the game badly, alienating allies, consolidating rivals, and baffling the world by its senseless and ineffectual interventions in places like Iraq.

I don’t think his analysis of a dollar crisis is accurate. First off, of course, is the point that Russians keep offshore bank accounts because they don’t trust their government. If they dump dollars, there are no attractive currencies. More broadly, currency crises generally occur when the assets of a country are falling in value, with no foreseeable rise. Now, the asset could be the currency, and the cause of the decline could be speculative outflows. But US assets are much more broadly held. There are $188T in assets, most of them financial. By contrast, M3 is an order of magnitude smaller.

I do, however, think that Katusa could be right for the wrong reason: the incompetence of the U.S. government, and the paralysis caused by Republican control could indeed cause a panic. There is no objective reason why we cannot convert much of our energy supply to alternatives, undermining the use of energy as a means of control by any government, including Russia. This action would be in the interests of the entire planet, as it would slow global warming. But with a government as stupid and paralyzed as the present one, the chances of getting into a fix we can’t handle are actually pretty good.

Keystone no longer economically viable?

I wouldn’t let up on the pressure to stop the pipeline and others which carry bitumen, but…Tim Mullaney, CNBC:

As Congress rushes to approve the long-delayed Keystone XL pipeline, it is questionable whether or not the project will make as much of a difference as proponents expect. Since June, crude oil has declined by 28 percent, pushing the price that oil from new wells in Canada may command below what the expected cost will be to produce it.

The so-called “heavy oil” extracted from sand in Alberta, which the proposed pipeline would carry to Nebraska, en route to refineries on the Gulf Coast, will cost between $85 and $110 to produce, depending on which drilling technology is used, according to a report in July by the Canadian Energy Research Institute, a nonprofit whose work is often cited by Keystone proponents. West Texas Intermediate crude oil traded today at $76.67.

The all-of-the-above strategy has brought so much carbon online–and helped to bring solar and wind to commercialization– that heavy oil is no longer cost competitive. It would be really fitting if Keystone were approved and TransCanada folded due to low oil prices. But we need to keep pushing to help that outcome.

The obvious question that no one asked (Keystone XL)

State Dept. Briefing, 4/18:

MODERATOR: Good afternoon. Thank you for joining us. Today [Senior State Department Official One] will provide an update on the application – the presidential permit application review for the proposed Keystone XL Pipeline. [The official] will be referred to as Senior State Department Official One from here on out. We are also joined by [Senior State Department Official Two], who will be referred to as Senior State Department Official Number Two.
…
SENIOR STATE DEPARTMENT OFFICIAL ONE: Thank you very much. All of you have received a Media Note with the basic substance of the issue that we wanted to discuss today, so let me give some clarifying or complementary information.
…
Regarding the 2.5 million new public comments, they are indeed unprecedented. In response to the Draft Supplemental Environmental Impact Statement that the Department published in March of last year, we received 1.5 million comments. Usually on some form of a pipeline application there may be less than 100 comments. We are concentrating our resources to review the public comments that we receive. We are proceeding to ensure that we review those comments and appropriately reflect them in the draft Record of Decision, which will eventually result in recommendations.

As far as I can tell, the State Department did not list how the comments were running. But one can guess: despite the fact that a majority of Americans support the pipeline, almost certainly a majority of Americans who know what bitumen is are opposed. Fiercely. And so when the State Department says that they will “review and incorporate all of those,” they are lying.

And that would explain why two public officials, talking about a matter of public record, are so cowardly that they gave a press conference metaphorically from behind a curtain. A curtain provided for them by our free press.

Shame.

Allegation that BP may be harassing, issuing death threats against critics

Dahr Jamail, Al Jazeera (via t/o):

[Through international PR company Ogilvy & Mather,] BP has been accused of hiring internet “trolls” to purposefully attack, harass, and sometimes threaten people who have been critical of how the oil giant has handled its disaster in the Gulf of Mexico.
…
[On the BP America Facebook page,] when people posted comments that were critical of how BP was handling the crisis, they were often attacked, bullied, and sometimes directly threatened.
…
Threats included identifying where somebody lived, an internet troll making reference to having a shotgun and making use of it, and “others just being more derogatory”, according to [Government Accountability Project investigator Shanna] Devine. “We’ve seen all this documentation and that’s why we thought it was worth bringing to the ombudsman’s office of BP, and we told them we thought some of it even warranted calling the police about.”
…
One troll using the name “Griffin” makes several allusions to gun violence, while another, named “Ken Smith” also harassed and threatened users, even going so far as to edit a photo of a BP critic’s pet bird into the crosshairs of a gunsight, before posting the photo online – along with photos of an arsenal of semi-automatic weapons.

Another instance occurred involving “Griffin” and an environmentalist who posted a picture of a rendition of Mother Earth saying “Mother Earth Has Been Waiting for Her Day in Court, BP”. “Griffin” posted a comment to the picture that read, “A few rounds from a .50 cal will stop that b**ch”.

According to Marie, Lockman and GAP, BP’s “astroturfing” efforts and use of “trolls” have been reported as pursuing users’ personal information, then tracking and posting IP addresses of users, contacting their employers, threatening to contact family members, and using photos of critics’ family members to create false Facebook profiles, and even threatening to affect the potential outcome of individual compensation claims against BP.
…
Linda Hooper Bui, an associate professor of entomology at Louisiana State University, experienced a different form of harassment from BP while working on a study about the impact of the oil disaster on spiders and insects.

“BP was desperately trying to control the science, and that was what I ran into,” Bui told Al Jazeera. According to her, BP’s chief science officer “tried to intimidate me”, and the harassment included BP “bullying my people” who were working in the field with her on her study that revealed how “insects and spiders in the oiled areas were completely decimated”.

While collecting data for the study, Bui and her colleagues regularly ran into problems with BP, she said.

“Local sheriffs working under the auspices of BP, as well as personnel with Wildlife and Fisheries, the US Coast Guard – all of these folks working under BP were preventing us from doing our job,” Bui explained. “We were barred from going into areas to collect data where we had previous data.”

Bui said personnel from the USCG, Fish and Wildlife, and even local sheriffs departments, always accompanied by BP staff, worked to prevent her from entering areas to collect data, confiscated her samples, and “if I’d refused to oblige they would have arrested me” – despite her having state permits to carry out her work.

Brent Pricing: LIBOR Scandal For Oil?

Via Jay Ackroyd, an article from The Economist:

IT IS a lesson of the past five years that benchmarks in unregulated markets can fall victim to the incentives they create. Subprime mortgages bundled into securities often won high scores from ratings agencies that stood to profit in a busy market. The London Interbank Offered Rate, LIBOR, was sometimes underestimated by banks which were cast in a healthier light by lower interest rates. Has something similar been going on in energy?

That is the suspicion after a series of raids on May 14th by the European Commission’s competition authorities. The commission declared that it feared oil companies had “colluded” to distort benchmark prices for crude, oil products and biofuels. Royal Dutch Shell, BP, Norway’s Statoil and Italy’s ENI (which was not raided) all said that they were co-operating with the commission.
…
. At least 200 billion barrels a year, worth in the order of $20 trillion, are priced off the Brent benchmark, the world’s biggest, according to Liz Bossley, chief executive of Consilience, an energy-markets consultancy. The commission has said that even small price distortions could have a “huge impact” on energy prices. Statoil has said that the commission’s interest goes all the way back to 2002. If it is right, then the sums involved could be huge, too.

The Koch’s coke

A belated tip of the hat to Quentin Compson at Eschaton.

What is wrong with this picture? A major American city is becoming a dumping ground for toxic waste. Ian Austen, NYT:

WINDSOR, Ontario — Assumption Park gives residents of this city lovely views of the Ambassador Bridge and the Detroit skyline. Lately they’ve been treated to another sight: a three-story pile of petroleum coke covering an entire city block on the other side of the Detroit River.

Detroit’s ever-growing black mountain is the unloved, unwanted and long overlooked byproduct of Canada’s oil sands boom.

And no one knows quite what to do about it, except Koch Carbon, which owns it.
…
Coke, which is mainly carbon, is an essential ingredient in steelmaking as well as producing the electrical anodes used to make aluminum.

While there is high demand from both those industries, the small grains and high sulfur content of this petroleum coke make it largely unusable for those purposes, said Kerry Satterthwaite, a petroleum coke analyst at Roskill Information Services, a commodities analysis company based in London.

“It is worse than a byproduct,” Ms. Satterthwaite said.“It’s a waste byproduct that is costly and inconvenient to store, but effectively costs nothing to produce.”

and coincidentally, Detroit has been deprived of its municipal government by the emergency manager.

Act against the Keystone XL pipeline

350.org is trying to get 1 million signatures against Keystone XL. It’s easy. Just click here and customize your own letter to the State Department. They’re going for 1 million signatures by April 22nd.

You can also co-sign a letter to President Obama here.

The future of Venezuela

DemocracyNow had an excellent debate between Michael Shifter and Pomona college professor (and Venezuelan emigre) Miguel Tinker Salas.

The essential points are that:
* when Chavez took over, things were in terrible shape
* the price of oil is much higher now than before Chavez took office
* things are not great now

One interpretation (Shifter) is that Chavez got lucky over the price of oil but otherwise squandered his time in office. The other interpretation is that Chavez was lucky in the price of oil, but unlucky in having the opposition he had, that his first few years in office were a loss due to factors outside his control, but that lately he’s done much better. This view is supported by Weisbrot and Johnston (see Fig. 1).

The one interesting issue raised by Shifter is the decline in Venezuelan production of oil (and natural gas). These are issues important to social stability, since natural gas is used for electrical generation (insufficient production = blackouts), and Venezuelans expect cheap gasoline. Euan Mearns at The Oil Drum says

OPEC stalwart and heavy weight Venezuela has had flat production over the decade of between 2 and 2.5 mmbpd. The impact of the 2002/ 03 general strike upon production is clear to see. Production has been hitting near term highs over 2.5 mmbpd and spare capacity is essentially zero.

What seems to be limiting oil production is a shortage of natural gas, as well as a decline in readily-accessible reserves in favor of the Orinoco Basin heavy crude similar to the Canadian tar sands. So, it’s not clear to me that Shifter’s criticism is valid, except insofar as it rests on the endemic corruption in Venezuelan society that makes it harder to do anything. The story of why they are producing more nat gas sounds like an example of that.

Another interesting issue raised in the debate is what the factions within chavismo are. Basically it seems that there are two principal factions, a civil society movement led by Nicolas Maduro, and a military faction led by Diosdado Cabello.

Getting gaslighted on gas

The American people are being propagandized that high gas prices are due to Obama Administration drilling policies. If we had a functioning press, people would know that the price of gasoline is determined by (a) the current cost of oil production, (b) the cost of refining, (c) expectations about future supply, and (d) miscellaneous factors such as distribution costs and taxes (regulations can be thought of as a cost of production, refining, or distribution).

So now Javier Bias of Financial Times reports that in January, refineries were shut down to remove 1.6 million barrels per day of gasoline from production. Not so coincidentally, RBOB gasoline futures leapt from $2.70 to $3.40. Now refineries are being put back on line to add 1.3 million barrels per day. Industry analysts say that over the longer term refineries will be closed to “rebalance supply and demand.”

In other words, to gouge consumers.

If people don’t want to vote for Obama, that’s their business. But they shouldn’t do so because of a lie. Neither the Keystone pipeline nor regulations nor taxes are driving gas prices. What’s driving them is speculation, market manipulation, and the rising cost of recovering oil from deep wells and unconventional sources.