Saturday, January 30, 2016

Oil at $30 Dollars a Barrel Bodes Ill for Fossil Fuel Interests as Renewables Ramp up

First, there's no sign the present oil glut is going to go away. The inventories in the USA are bigger than ever since the Great Depression and the prices both on the spot market and at the pump just keep dropping -- with a few jumps to keep experts guessing.

From Zero Hedge via The Automatic Earth (hat tip to Raul Ilargi Meijer)

US Crude Inventories Are The Highest Since the 1930s
by Tyler Durden, Zero Hedge, 27 January 2016

In case you were under the impression that oil was stabilizing, we thought this chart might help clarify just how “different” it is this time in the energy complex… U.S. crude inventories are at levels last seen when President Herbert Hoover was battling the Great Depression.

US Crude Inventories are the greatest since the Great Depression!
Source: Zero Hedge via The Automatic Earth 
After this week’s build – Crude stockpiles climbed 8.38 million barrels to 494.9 million in the week ended Jan. 22, the highest since November 1930, according to weekly and monthly data from the Energy Information Administration. It did not end well last time…

But prices will probably continue to go down. After all, according to historic data going back to 1861, today's prices, while relatively inexpensive, are no bargain.

From Market Watch via The Automatic Earth (again, hat tip to Raul Ilargi Meijer)

Chart going back to 1861 shows oil isn’t insanely cheap right now
By William Watts, Market Watch, 27 January 2016

Not insanely cheap by historic price
Source: Market Watch via The Automatic Earth.

Oil futures are hovering around $30 a barrel—not far off 12-year lows—and bears are penciling in a test of $20 or lower. It is a pretty downbeat picture, but is black gold really that cheap on a historical basis? Not really, according to the chart from Deutsche Bank, which tracks inflation-adjusted oil prices—and the average price—all the way back to 1861, just two years after Edwin Drake drilled the first productive U.S. oil well near Titusville, Pa. Over the last 150-plus years, the average oil price is $47 a barrel, according to the data. West Texas Intermediate oil futures for March delivery were down 22 cents, or 0.7%, at $31.23 a barrel in late morning trade. “So current levels are low but not exceptionally low relative to long-term history,” said Jim Reid, macro strategist at Deutsche Bank, in a Wednesday note.

The charts were published as part of an annual study by the investment bank. Interestingly, Reid did note that this was the first year that the firm’s long-term mean reversion exercise shows positive return expectations for oil since the study began more than a decade ago. But don’t get too excited over prospects for an immediate mean-reversion rally. Reid puts the findings in the context of the commodity cycle, which is on the downswing after a sharp run-up that began in the mid-1990s. He notes the “long-held belief” that commodities, such as oil, that are a factor of production can’t outstrip inflation over the long term because “if they do there will be alternatives found.”

That helps to explain oil’s pullback. This process, however, “can take years to resolve, so even if we’re correct, commodity cycles can still last a long time before they eventually mean revert,” he wrote. Meanwhile, the graph “doesn’t suggest that current levels are as extreme as many would suggest even if long term value has returned,” Reid said. “The $140 prices a few years back look especially bubble-like” from a long-term perspective.

Of course, if oil stays at a low price for *too* long, when demand comes back up, the fossil fuel companies may not be in a position to furnish the demanded supply. Prices will shoot up and demand will be destroyed again.

From Our Finite World (hat tip to Gail Tverberg)

Why oil under $30 per barrel is a major problem

A person often reads that low oil prices–for example, $30 per barrel oil prices–will stimulate the economy, and the economy will soon bounce back. What is wrong with this story? A lot of things, as I see it:

1. Oil producers can’t really produce oil for $30 per barrel.

A few countries can get oil out of the ground for $30 per barrel. Figure 1 gives an approximation to technical extraction costs for various countries. Even on this basis, there aren’t many countries extracting oil for under $30 per barrel–only Saudi Arabia, Iran, and Iraq. We wouldn’t have much crude oil if only these countries produced oil.

Source: Alliance Bernstein via Our Finite World.
2. Oil producers really need prices that are higher than the technical extraction costs shown in Figure 1, making the situation even worse.

Oil can only be extracted within a broader system. Companies need to pay taxes. These can be very high. Including these costs has historically brought total costs for many OPEC countries to over $100 per barrel.

Independent oil companies in non-OPEC countries also have costs other than technical extraction costs, including taxes and dividends to stockholders. Also, if companies are to avoid borrowing a huge amount of money, they need to have higher prices than simply the technical extraction costs. If they need to borrow, interest costs need to be considered as well.
In the above article, Gail Tverberg notes that renewables are still at a vary small fraction of total energy supply, but the graph she posts indicates that they are increasing in proportion. Enough to cause some traditional fossil fuel energy companies to try to head off the ramp-up of renewables off at the pass. Like in Nevada recently. (hat tip to Robertscribbler.)

Welcome to the Renewable Energy Renaissance — Fight to End Fossil Fuel Burning is Now On
by Robertscribbler, 27 January 2016

Beneath the dark and growing cloud of human fossil fuel emissions there are a few carbon-free lights being kindled among all the black, coal-ash soot.

They’re the lights of a new renaissance. An unprecedented period of change for governments, the energy markets, and for individuals themselves. For we are all, whether we realize it or not, now embroiled in a struggle that will determine our own fates as well as that of our children and of all the generations to follow. For this renaissance is as much about liberation — the provision of clean energy choice as means to free ourselves from a wretched captivity to fossil fuel consumption — as it is about fighting to leave those very hothouse mass extinction fuels in the ground.

It’s a new kind of vital social unrest. A global struggle for justice on a scale not seen since at least the downfall of the slave trade. The battle lines have been drawn — in courtrooms, at ports, along pipelines, and on the train tracks, in the legislative offices of cities, states and in the halls of the federal government itself. We, as a civilization, are being divided into pro-renewable energy, pro-response to climate change, pro saving life on this Earth, and anti-renewable energy, anti-response, climate change denial factions. It is a disruptive, highly dangerous period of history. One we must successfully navigate if we are to survive as a modern civilization and, perhaps, as a species living on this Earth....

An example of this struggle in microcosm took place during December through January of 2015 in Nevada. Emboldened by similar decisions in Arizona, monopoly utilities moved to protect their carbon-polluting infrastructures by pushing the state government (made up of a majority of republicans to include the governor — Sandoval) to impose restrictive fees on solar energy use throughout the state. Targeting rooftop solar energy systems, the Nevada Public Utilities Commission (PUCN — also made up entirely of republicans) voted to, across the board, increase costs for rooftop solar users by both slashing incentives and imposing draconian fees. The decision negatively impacted 12,000 current solar customers using rooftop power to include families, schools and even public libraries....

Nevada’s PUC decision smacks of a monopoly power generation protection scheme. One that has made it impossible for solar installers to operate in the state. As result, Nevada’s two other top solar installers (Vivint and Sunrun) have now followed Solar City’s example [of stop doing business in Nevada] and decided to halt operations in Nevada. The jobs impact from just these three solar providers closing shop is a net loss of 6,000. But with hundreds of small solar installers active in Nevada before the ruling, the economic and environmental damage is likely to be ongoing and long-term....

As if Nevada’s war against rooftop solar industry within its own state wasn’t bad enough, a group of 26 states currently governed by fossil fuel industry funded republicans are now submitting a Supreme Court challenge to Obama’s Clean Power Plan. The group has re-stated the now typical and jaded republican claim that the EPA doesn’t retain the legal authority to regulate carbon emissions. The new claim is predicated on the statement that EPA will force fossil fuels out of business, stating that the federal government does not retain the authority to effectively ban the use of a particular set of fuels.

It’s a convoluted appeal that smacks of past states rights arguments regarding every kind of dangerous, toxic or nefarious trade from slavery, to firearms, to tobacco. The appeal letter demands an ‘immediate stay’ on the Clean Power Plan (a cessation of implementation). It seeks to sanctify as ‘legal right’ the ability of coal plants to remain open and to continue pollution. It attacks federal government decisions that would support renewable energy as a solution to climate change (without using the words climate change once in the document, which itself required a supreme manipulation of legalese to achieve). And it uses language that implies state policy directives and goals supersede those of the federal government.
It is folly to oppose the growth of Renewables and further increasing it. Because we don't have an infinite amount of fossil fuels within the Earth's crust and eventually, sooner rather than later due to the insanely low prices compared to the costs of extraction, there will be no more fossil fuels that will be brought to market, and an ever-increasing reduction in supply prior to that. Better to build out renewables as much as we can, and perhaps build ourselves a bridge to a better future, even with a lower standard of living, than to collapse, bit by bit, headlong into a new Dark Age and all the misfortunes and unpleasantlesses that would accompany it.

Thursday, January 28, 2016

Weird Weather: What the Hell Is Going On!?

Ya know, what we need is someone with the “charisma” of Donald Trump to rise up and say, “We need to stop, just stop, burning fossil fuels until those in charge can tell us what the hell is going on?”

I'm reblogging two posts from Robertscribbler about the weird weather that's been going on.

First, a new item about how the mangled Jet Stream has permitted so much warm air into the Arctic, it's forcing its way into NW Siberia and causing an Arctic Vortex invasion into East Asia, even Southeast Asia.

NW Siberian Warm Snap and East Asian Cold Snap
Source: Earth Nullschool via Robertscribbler.

Arctic Heatwave Drives Deadly Asian Cold Snap
by Robertscribbler, 26 January 2016 Link

In the Arctic today, there’s a warm wind howling over Siberia. It’s a wind blowing from the northwest. A wind originating from the Arctic Ocean. Siberia is warming up today because warm air blew in from the direction of the North Pole. This should strike everyone as ridiculously, insanely odd.

In Okinawa it snowed for the first time since 1977 this weekend. In Taiwan, a cold snap turned deadly killing 85 as tens of thousands more huddled in homes that lacked any form of central heating. In South Korea, 500 flights were grounded due to unseasonable weather. In Hong Kong, the temperature was 3 C — the same temperature as a region near the southwestern coast of Svalbard east of Greenland and above the Arctic Circle.

What the hell is going on? In short, a global warming driven heat-up of the Arctic has punched a hole in the Jet Stream and driven chill, Arctic air all the way into portions of Southeast Asia that seldom ever see temperatures go below 60 degrees Fahrenheit (16 Celsius).

Nested in the comments thread there is a video "What's Going on with El Nino?" posted by commenter dtlange:

 Which leads into the second post by Robertscribbler, concerning El Nino and why the massive storms that accompanied previoous El Ninos haven't shown up in California so far this year.

Polar Amplification vs a Godzilla El Nino — Is the Pacific Storm Track Being Shoved North by Arctic Warming?
by Robertscribbler, 26 January 2016 Link

It’s an El Nino year. One of the top three strongest El Ninos on record. The strongest by some NOAA measures. And we are certainly feeling its effects all over the world. From severe droughts in Southeast Asia, Africa, and South America, to Flooding in the Central and Eastern US, Southern Brazil, and India, these impacts, this year and last, have been extreme and wide-ranging. During recent days, Peru and Chile saw enormous ocean waves and high tides swamping coastlines. Record flooding and wave height events for some regions. All impacts related to both this powerful El Nino and the overall influence of human-forced warming by more than 1 C above 1880s temperatures on the whole of the hydrological cycle.

Amped up by a global warming related 7 percent increase in atmospheric water vapor (and a related increase in evaporation and precipitation over the Earth’s surface), many of these El Nino related impacts have followed a roughly expected pattern (you can learn more about typical El Nino patterns and links to climate change related forcings in this excellent video by Dr Kevin Trenberth here). However, so far, some of the predicted kinds of events you’d typically see during a strong El Nino have not yet emerged. A circumstance that may also be related to the ongoing human-forced warming of the globe.

Storm Track Not Making it Far Enough South

NE Pacific Storm, 26 January 2016.
Source: Earth Nullschool vis Robertscribbler.

Particularly, there has been an absence of powerful storms running in over Southern California then surging on into Arizona, New Mexico and West Texas. During strong El Nino events, heat and moisture bleeding off the super-warmed Equator have typically fed powerful storms racing across the Pacific. These storms have tended to engulf the entire US Pacific Coast from San Diego through to Seattle. However, much of the storm energy is often directed further south toward Central and Southern California.

Crossposted with 2016 is strange!

Monday, January 25, 2016

From before the Paris Summit -- Top Climate Expert: Crisis is Worse Than We Think & Scientists Are Self-Censoring to Downplay Risk

The following video below is from Democracy Now!, and is available on You Tube here.

British climate scientist Kevin Anderson, Deputy Director of the Tyndall Center for Climate Change Research, University of Manchester is interviewed by Amy Goodman of Democracy Now!. In the interview Dr. [or Mr.] Anderson states that the Earth Changes in its climate constitute much more of a crisis, i.e. are much worse, than most people think. And he is not at all surprised that the USA negotiating team refused to agree to anything in the agreement that would be binding.

Thursday, January 21, 2016

No Ice Age for 100,000 Years.

Back in the 1600s through the beginning of World War One, we were in a slightly icehouse climate called The Little Ice Age. And by rights, we really should be going into another one right now. Just as the news media told us we would be back in the 1970s. But with 405 ppm CO2 (485 ppm CO2e) in the atmosphere we should consider ourselves lucky if it comes about. Because at 280 ppm in the 1880s towards the end of the LIA, which would still be the approximate CO2 content if we hadn't burnt all those fossil fuels, especially coal and petroleum, we would instead be heading headlong into yet another major ice age -- when all of Canada, the USA northern tier, and much of Northern Europe including Russia and Siberia -- would become glaciated: covered with ice up to three miles thick.

We narrowly missed a new ice age, and now we won’t see one for a long time.
by Scott K. Johnson -
13 January, 2016

Before fossil fuels rendered this moot, conditions were nearly right.

Recorded human history has played out within one type of climate—an interglacial period. During the glacial periods of the last million years (commonly referred to as “ice ages”), great ice sheets grew to cover Canada and some points south, as well as Northern Europe and much of Russia.

In the 1970s, we learned there was a consistent 100,000-year heartbeat to this back-and-forth cycle governed by subtle patterns in Earth’s orbit. The thing is, it’s about time for the next heartbeat. We’re at the part of the cycle where the interglacial period should be wrapping up and the slow but inexorable descent into another ice age would begin.

But that hasn’t happened, and it’s not going to any time soon. Our current breakneck emissions of greenhouse gases will see to that. Still, the scientific question is worth asking: what, exactly, does it take to start off an ice age?

We are currently at a low point in summer sunlight reaching the northern high latitude region, which is how the orbital cycles turn into glacial cycles. Because there are several orbital cycles involved, the peaks and valleys in that sunlight are complex—it’s not as simple as a sine wave oscillating between a constant high and a constant low. But there were two interglacial periods in the last million years (one 400,000 years ago and one 800,000 years ago) with a similar combination of orbital cycles. Both crossed the threshold into an ice age when they hit this low point in sunlight.

Now we're going to have a super-long interglacial period for at least 50,000 years, perhaps 100,000 years. And it might include a second Permian Exstinktion [sic!].

Saturday, January 16, 2016

Renewables Ramp Up as Financial Crisis Looms.

Greetings, again! I have a few bits of information from Robert Scribbler, Raul Ilargi Meijer and James Kunstler on the state of fossil fuels, renewables, and the general economy.

First, about the problems fossil fuel companies are encountering due in no small part to the switch to renewables.

From Robertscribbler:

The Carbon Bubble is Bursting
11 January 2016

I admit it. I felt sorry for those poor, duped oil, gas and coal company investors back during the early part of 2015. Many of these guys, fed a constant stream of bad information from the financial news sources, at the time were still enraptured by the notion that fossil fuel stocks were then cheap and that the situation was nothing more than some kind of golden buying opportunity.

Now, six months later, 41 US oil and gas companies have gone bankrupt, powerful major oil companies like Exxon and BP are in the range of 20-40 percent losses in stock price year-on-year, most gas companies have seen even more severe losses, and most coal companies have been reduced to junk stock status (see Arch Coal declares bankruptcy). TransCanada, the parent company of the canceled Keystone XL Pipeline, is challenging United States sovereignty with its 15 billion dollar lawsuit. But it’s questionable if the company will even exist long enough to see the results of its NAFTA-based legal challenge.

Typical example - Stock price of Arch Coal.
Source: CNN Money via Robertscribbler
It’s like the curse of Solyndra has been revisited on the entire fossil fuel industry. But while the renewable energy industry is undergoing its biggest boom ever, the fossil fuel industry’s own bad investments, bad performance, bad decisions, and overall bad impacts on pretty much everything from the increasingly wrecked global climate, to the Deepwater Horizon blowout, to Oklahoma fracking earthquakes, to the debacle that is the Porter Ranch gas leak, are sinking it even faster than its carbon emissions are melting the Arctic sea ice.

Back during 2013 and 2014 we warned that continued investment in oil, gas and coal companies was a really bad idea — one that probably represented the worst malinvestment in the history of finance. A carbon bubble that was worse even than the bad real estate investments that led up to the financial collapse of 2008. Trillions-upon-trillions of dollars encouraged by more than 500 billion dollars worth of subsidy support globally from the world’s governments each year. And to what end? Producing fuels which, contrary to wind and solar, increase in price the more you use them even as they wreck the very natural wealth that is the basis for healthy economic systems the world over.

And now the markets are being driven to the brink by just such a terrible malinvestment.

But it's not just the switch to renewable energy (i.e., wind, solar, hydro, biomass) that's causing solvency problems for the fossil fuel energy companies.  In case no one's been paying attention, there's been a severe slowdown in China.  Couple the slowdown and renewables with the austerity craze in Europe, the backfire of the China slowdown into the emerging market countries, US/UK/EU sanctions against Russia, and the current oversupply of oil on the market, and the papered-over global financial crisis of 2008, and you've got a whole network of troubles.

From Raul Ilargi Meijer of The Automatic Earth:

Debt Rattle January 13 2016
Raul Ilargi Meijer
The Automatic Earth

“Deflation is upon us and the central banks can’t see it.”

Beware The Great 2016 Financial Crisis, Warns Albert Edwards
Larry Eliot Economics Editor
UK Guardian 12 January 2016 (bolding mine)

The City of London’s most vocal “bear” has warned that the world is heading for a financial crisis as severe as the crash of 2008-09 that could prompt the collapse of the eurozone. Albert Edwards, strategist at the bank Société Générale, said the west was about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them. His comments came as analysts at RBS urged investors to “sell everything” ahead of an imminent stock market crash. “Developments in the global economy will push the US back into recession,” Edwards told an investment conference in London. “The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed.”

Fears of a second serious financial crisis within a decade have been heightened by the turbulence in markets since the start of the year. Share prices have fallen rapidly and a slump in the cost of oil has left Brent crude trading at barely above $30 a barrel. “Can it get any worse? Of course it can,” said Edwards, the most prominent of the stock market bears – the terms for analysts who think shares are overvalued and will fall in price. “Emerging market currencies are still in freefall. The US corporate sector is being crushed by the appreciation of the dollar.” The Soc Gen strategist said the US economy was in far worse shape than the Federal Reserve realised. "We have seen massive credit expansion in the US. This is not for real economic activity; it is borrowing to finance share buybacks."

Edwards attacked what he said was the “incredible conceit” of central bankers, who had failed to learn the lessons of the housing bubble that led to the financial crisis and slump of 2008-09. “They didn’t understand the system then and they don’t understand how they are screwing up again. Deflation is upon us and the central banks can’t see it.” Edwards said the dollar had risen by as much as the Japanese yen had in the 1990s, an upwards move that pushed Japan into deflation and caused solvency problems for the Asian country’s banks. He added that a sign of the crisis to come was the collapse in demand for credit in China. “That happens when people lose confidence that policymakers know what they are doing. This is what is going to happen in Europe and the US.”

The Royal bank of Scotland shouted the day before, "Sell EVERYTHING!"

Debt Rattle January 12 2016
Raul Ilargi Meijer
The Automatic Earth

As things shape up the very way we always said they would, others claim ownership of the story.

“China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the ‘Goldlocks love-in’ of the last two years..”

RBS Cries ‘Sell Everything’ As Deflationary Crisis Nears 
Ambrose Evans-Pritchard
The Telegraph UK 11 January 2016

RBS has advised clients to brace for a 'cataclysmic year' and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel. The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. "Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small," it said in a client note. Andrew Roberts, the bank’s credit chief, said that global trade and loans are contracting, a nasty cocktail for corporate balance sheets and equity earnings. This is particularly ominous given that global debt ratios have reached record highs. "China has set off a major correction and it is going to snowball. Equities and credit have become very dangerous, and we have hardly even begun to retrace the "Goldlocks love-in" of the last two years," he said.

Source: The Telegraph UK via The Automatic Earth

Mr Roberts expects Wall Street and European stocks to fall by 10pc to 20pc, with even an deeper slide for the FTSE 100 given its high weighting of energy and commodities companies. "London is vulnerable to a negative shock. All these people who are ‘long’ oil and mining companies thinking that the dividends are safe are going to discover that they’re not at all safe,” he said. Brent oil prices will continue to slide after breaking through a key technical level at $34.40, RBS claimed, with a “bear flag” and “Fibonacci” signals pointing to a floor of $16, a level last seen after the East Asia crisis in 1999. The bank said a paralysed OPEC seems incapable of responding to a deepening slowdown in Asia, now the swing region for global oil demand Morgan Stanley has also slashed its oil forecast, warning that Brent could fall to $20 if the US dollar keeps rising.

It argued that oil is intensely leveraged to any move in the dollar and is now playing second fiddle to currency effects. RBS forecast that yields on 10-year German Bunds would fall time to an all-time low of 0.16pc in a flight to safety, and may break zero as deflationary forces tighten their grip. The European Central Bank’s policy rate will fall to -0.7pc. US Treasuries will fall to rock-bottom levels in sympathy, hammering hedge funds that have shorted US bonds in a very crowded “reflation trade”. RBS first issued its grim warnings for the global economy in November but events have moved even faster than feared. It estimates that the US economy slowed to a growth rate of 0.5pc in the fourth quarter, and accuses the US Federal Reserve of “playing with fire” by raising rates into the teeth of the storm. “There has already been severe monetary tightening in the US from the rising dollar,” it said.

It is unusual for the Fed to tighten when the ISM manufacturing index is below the boom-bust line of 50. It is even more surprising to do so after nominal GDP growth has fallen to 3pc and has been trending down since early 2014. RBS said the epicentre of global stress is China, where debt-driven expansion has reached saturation. The country now faces a surge in capital flight and needs a “dramatically lower” currency. In their view, this next leg of the rolling global drama is likely to play out fast and furiously. “We are deeply sceptical of the consensus that the authorities can ‘buy time’ by their heavy intervention in cutting reserve ratio requirements (RRR), rate cuts and easing in fiscal policy,” it said.
Of course, James Howard Kunstler predicted this past Monday that what is coming up is a era of discovery, in which investors, particularly the big players on Wall Street, and the people in general find out just what financial assets are sound and which are very, very dodgy -- so dodgy as to be a bill of goods, like Collateral Debt Obligations (CDOs) and Collateral Debt Obligations of Collateral Debt Obligations (CDOs, Squared) which recently have been reinvented as Bespoke Tranche Opportunities. And with the recent beginning of the 2010s junk bond debacle, the bursting of the fracking bubble and other financial and economic reversals underway or looming just ahead, these new financial shenanigans are going to end up in an extremely bad way.

James Howard Kunstler
Clusterfuck Nation 11 January 2016

It looks like 2016 will be the year that humanfolk learn that the stuff they value was not worth as much as they thought it was. It will be a harrowing process because a great many humans are abandoning ownership of things that are rapidly losing value — e.g. stocks on the Shanghai exchange — and stuffing whatever “money” they can recover into the US dollar, the assets and usufructs of which are also going through a very painful reality value adjustment.

Of course this calls into question foremost exactly what money is, and the answer is: basically a narrative construct. In other words, a story explaining why we behave the way we do around certain things. Some parts of the story have a closer relationship with reality than other parts. The part about the US dollar has a rather weak connection.

When various authorities — the BLS, the Federal Reserve, The New York Times — state that the US economy is “strong,” we can translate that to mean giant companies listed on the stock exchanges are able to put up a Potemkin façade of soundness....

I suppose the loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle. One wonders, for example, how many well-dressed young people at the bond desks have been able to pawn off sub-prime car loans bundled into giant, tranched bonds with attractive yields to hapless counterparts at the asset allocation desks of the pension funds and insurance companies. My guess is the situation is at least just as bad as it was 2007.

The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year.

"Fasten your seat belts; it's going to be a bumpy ride!" (Bette Davis as Margo Channing in Applause)


Monday, January 11, 2016

They Opened the Bonnet Carre Spillway Yesterday. Morganza to Open as Soon as the Day after Tomorrow.

Third time since 2008 (inclusive). Before that it was opened only once a decade.

Jeff Masters reports:

At 10 am CST January 10, 2016, the U.S. Army Corps of Engineers opened the gates on the Bonnet Carré Spillway in St. Charles Parish, Louisiana to allow flood waters from the swollen Mississippi River to flow into Lake Pontchartrain. This is the earliest that the Corps has been forced to open the spillway, and just the 11th time since it became operational in 1931 that it has been used. The only other time the spillway has been opened in January was back in 1937. All of the other openings have come in spring or early summer. Opening of the spillway is expected to keep the Mississippi River below its 17-foot flood stage in New Orleans–just 3 feet below the tops of the levees. The river is expected to crest in New Orleans on Tuesday, January 12.
There is also chance that the Corps will be forced to open the Morganza Floodway in Pointe Coupee Parish northwest of Baton Rouge, which would divert water from the Mississippi River down the Atchafalaya River. This floodway has been opened only twice–in 1973 and 2011–and has a considerably higher cost of being opened than opening of the Bonnet Carré Spillway, due to the large amount of agricultural lands that would be flooded below the Morganza Floodway. The Sunday morning forecast from the NWS River Forecast Center predicted that the Mississippi River would crest at Red River Landing, just above the Morganza Floodway, on January 18. The predicted crest of 61.0′ is just 2.4′ below the all-time record crest of 63.39′ set on May 18, 2011, when the Corps was forced to open the Morganza Floodway in order to relieve pressure on the Old River Control Structure. The earliest the Corps would open the Morganza Floodway would be Wednesday, January 13.

If We Can Build and Operate Nuclear Power Plants without Screwing Things up Even More, then Let's Build-out Nuclear!

The life cycle GHG emissions per kWh from nuclear power plants are two orders of magnitude lower than those of fossil-fuelled electricity generation and comparable to most renewables (EC, 1995; Krewitt et al., 1999; Brännström-Norberg et al., 1996; Spadaro et al., 2000). Hence it is an effective GHG mitigation option, especially by way of investments in the lifetime extension of existing plants.
We humans can't still have our power and GHG too. Building out nuclear is not ‘effective GHG mitigation’ – unless we reduce our total energy footprint and we reduce our consumption of fossil fuels even more rapidly than that. Because using more energy people say is "better" but it isn't especially if it’s still creating GHG (and still oil-derived and oil-dependent – something that usually is conveniently forgotten). The whole life-cycle of site preparation, construction, maintenance, power production, decommission and disposal of radioactive wastes and what this ‘enables’ for the human community needs to be taken into account. Without reducing consumption and energy use in toto It’s still BAU. It’s not "mitigation" – just more emissions and creation of wastes – which we still haven't properly figured out how to get rid of or handle safely.
But if we can jump these hurdles (i.e., solve these problems and break these bad FF-dependency habits), then we should use nuclear power to replace the equivalent of fossil-fuel-derived power.
Hat tips to Tom Bond and J.R. at Robertscribbler.