Category: Economics

Matters of money

Open thread: pipelines under B.C.’s NDP-Green government

Pipeline politics remain exceptionally contentious in Canada, with one faction seeing them as a path to future prosperity through further bitumen sands development and another seeing them as part of a global suicide pact to permanently wreck the climate and the prospects of all humans for thousands of years.

The replacement of British Columbia’s pro-fossil-fuel Liberal government with an NDP-Green coalition promises to re-open the question of the Kinder Morgan TransMountain pipeline, among other projects.

It also sets up conflict between B.C. and Alberta, and between B.C. and Prime Minister Justin Trudeau, who has so far been pretending quite implausibly that Canada can meet its climate commitments while continuing to allow growth in the fossil fuel sector.

Toronto’s bottle collectors

Walking around Toronto, every day I see people searching through domestic recycling bins and municipal recycling containers looking for alcohol containers which they can return for the deposit at the Beer Store. It generally strikes me as a massive waste of human labour.

The deposit system (which also exists for non-alcoholic drink containers, but which I think pays less for them) exists to discourage people from throwing away recyclable glass and aluminium containers. I do not, however, see any benefit for them being recycled through the Beer Store rather than the municipal recycling system. When people put beer cans and bottles, wine bottles, and liquor bottles into the municipal recycling system, I presume they are recycled just as effectively, and the deposits people paid put a little extra profit in the hand of liquor sellers who then don’t need to refund it.

It seems quite wasteful that people with the energy and motivation to spend their days looking for these bottles don’t put their effort toward something that actually adds value to society. It’s a weird distortion created by the deposit system that it’s possible to earn money this way. Perhaps it’s the sort of thing a basic minimum income would discourage, or perhaps keep undertaking this pointless but personally remunerative activity regardless.

The National Post and Globe & Mail have both reported on the phenomenon: Living on empties: City’s bottle-collectors say their hard work pays off — in cash; The secret lives of Toronto’s Chinese bottle ladies

The makings of a nuclear program

The prerequisite for any state embarking on a nuclear weapons program is a complex base of material and people with a diverse set of skills and experience. A 1968 UN study estimates that a full-fledged nuclear weapons program requires some five hundred scientists and thirteen hundred engineers—physicists, chemists, and metallurgists; civil, military, mechanical, and electrical engineers; machine-tool operators with precision engineering experience; and instrument-makers and fabricators. The history of the nuclear age has shown that secrecy surrounds all nuclear weapons endeavors. Skilled workers of this nature are not publicly acknowledged, and their employment is often disguised. Further, the state needs to have a certain industrial base within its territory or access to one, and considerable experience in engineering, mining, and explosives. In addition, for a program to remain clandestine, sufficient foreign exchange and covert business deals with foreign partners willing to do business must generally be held as a state secret.*

* Zia Mian, “How to Build the Bomb,” in Mian ed., Pakistan’s Atomic Bomb and Search for Security (Lahore: Gautam Publishers, 1995), 135–6

Khan, Feroz Hassan. Eating Grass: The Making of the Pakistani Bomb. Stanford University Press; Stanford. 2012. p. 49

Open thread: additive manufacturing

I was surprised to see that I don’t seem to have ever put up a post about 3D printing, despite the variety of ways in which it’s interesting.

The Economist has recently printed a few articles:

I’ve done a little 3D printing myself, making one of Bathsheba’s free designs at the Toronto Reference Library. It would be great to be able to print in something more durable than the biodegradable plastic they offer.

Financing oil production

There is, however, a considerable campaign to be undertaken before we reach a post-carbon world, especially in the United States. A larger lesson from Carbon Democracy is that such democratic struggles depend not on future designs but upon identifying in current socio-technical systems their points of vulnerability. This postscript has traced the peculiar vulnerability of oil companies dependent on flows of equity investment that must increase as rapidly as the costs of producing oil are rising. Yet those rising costs reflect a world in which cheap, conventional oil is more and more scarce and the technical expense and environmental costs of producing unconventional oil are escalating. These risks and costs reveal a world at odds with the optimistic scenarios on which accelerating flows of equity depend. Meanwhile, capital that long ago began losing interest in organising — and thus becoming vulnerable to — large-scale productive labour, tried the easier route of organising lives around the making and servicing of debt. The problems of peak oil hastened the collapse of the debt machine. The recent US energy boom offers only a temporary and equally vulnerable diversion.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 267

Domestic consumption and oil exports

Saudi Arabia currently uses as much as one-fifth of its daily oil production to power the twenty-seven desalination plants it needs to produce domestic water, and almost as much again on other domestic consumption. Unless the government finds a way to slow the growth in this use of oil, which reduces the proportion available for export, Saudi Arabia’s exports are set for rapid decline. (Brazil discovered the largest new oil field found in the Western hemisphere in more than thirty years in 2007, any may prove to have the world’s seventh largest reserves; but due to rising domestic consumption, the country will never become an exporter.) Iran faces similar problems and more: with decline rates of 13 per cent in the six supergiant fields that hold most of its reserves, rising domestic consumption, and sanctions imposed by the US and European Union that prevent the use of enhanced extraction technologies, the country’s oil production now faces long term decline.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 262

An insurmountable rate of oilfield depletion?

Facing an annual decline rate of 4 or even 4.5 per cent, the world must discover and bring online the equivalent of a new Saudi Arabia — or one could equally say, a new United States, complete with the shale boom — every four years, or perhaps every three, in order merely to maintain current rates of production.

The rate of decline reflects the depletion of major oil regions like the North Sea and the North Slope of Alaska, and the decreasing flow from countries that were once among the world’s largest producers such as Indonesia and Mexico. But it also reflects the difficulty in increasing production in countries that were supposed to account for much of the future growth in the supply of conventional oil, in particular the three large producers of the Persian Gulf, Saudi Arabia, Iran and Iraq.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 261-2

Fracking and peak oil

The sudden abundance of oil in the United States in fact reflects a global scarcity. The shale boom bas been used to dismiss evidence of peak oil; in fact, the boom is its latest symptom. The era of easily accessible, cheaply produced, and ever increasing supplies of conventional oil that shaped the politics of the twentieth century is passing away. ExxonMobil, the world’s largest corporation, publishes an annual scenario, The Outlook for Energy, which lays out a picture each year of expanding populations, growing consumption, and the continually increasing demand for energy on which its own share value depends. But even ExxonMobil now acknowledges, toward the end of the 2013 report, that the supply of conventional oil has reached a peak and will gradually decline. [p. 38] The peak reflects the fact that oil firms have already pumped from the ground roughly half the world’s recoverable stores of conventional oil, and will produce the remainder at slower rates and with increasing difficulty.

Humankind has now consumed about two trillion barrels of oil since the rise of the modern petroleum industry in the 1860s. It is worth repeating that burning the first trillion took about 130 years, but we went through the second trillion in only twenty-two years. Estimates differ on how soon the peak in the supply of unconventional oil or other fossil fuels will arrive. But under any scenario, the rate of their depletion is astonishing.

Mitchell, Timothy. Carbon Democracy: Political Power in the Age of Oil. Verso; London. 2013. p. 259-60