Category Archives: energy

Russia and Ukraine

Posted on by
1

Over the weekend, Russia has decided to block Ukraine’s access to the Sea of Azov from the Black Sea; it’s placed a cargo ship under the Kerch Strait Bridge, which Russia completed earlier this year to give it direct land access from Russia to Russian-occupied Crimea, and Russia has military helicopters orbiting above the bridge.  The Kerch Strait is a bit under 2,000 feet wide where the bridge sits.

This followed the Russian Black Sea Navy’s aggression against a Ukrainian flotilla of no military significance—a Ukrainian Navy tugboat and two Ukrainian Navy artillery ships—that was transferring from Odessa on the Ukrainian Black Sea coast to Mariupol on the Ukrainian Sea of Azov coast. The Russian ships deliberately rammed the Ukrainian tugboat, damaging the latter’s hull and engines, and then the Russians seized the three Ukrainian ships.

The question arises concerning why Russian President Vladimir Putin has chosen this naked escalation.  A number of possible answers arise, also.

One is to serve as a military demonstration of force for Ukraine’s benefit, executed to enforce Russia’s illegal “elections” in its eastern occupied Ukraine.

Another is to distract from his doings in the north: his meddling in Baltic State elections, his cyber aggressions against them, his movement of tactical nuclear weapons closer to his borders with them.

Another is to distract from renewed troubles with his second natural gas pipeline, currently under construction, that would connect Russia with Germany under the Baltic Sea.

Another is for the aggression against Ukraine to serve as a demonstration for the attention of Germany regarding that pipeline and for the attention of Moldova as the latter works to tighten its ties with NATO Europe and to resist Russia’s attempt at Ukraine-style occupation.

Another is as a domestic distraction.  Russia also is currently is deeply into a demographic crisis.   Nearly 30% of the Russian population is 55 years old or older, and that per centage is growing.  Russia’s current fertility rate—births per woman—is 1.61 against a necessary 2.01 rate just to maintain a given population level.  Russia’s current birth rate of 10.7 births/1,000 population compares badly with its current death rate of 13.4 deaths/1,000 population.  With an in-migration rate of 1.7 migrant(s)/1,000 population, that still leaves Russians dying faster than they’re being born and gaining immigrants combined.  Consistent with that, Russia’s population is shrinking—by 0.11% this year.

Russia’s per capita GDP has fallen by 3% since its nearby peak in 2013: Russians are individually poorer than they were, even with a slight increase in the current year, even as Putin spends Russian treasure on all of his foreign adventures.  Note that this shrinkage in individual prosperity is mitigated by that shrinking population—were it growing, instead, the increasing poverty would be much worse.

Or some combination of all of those distractions.

Note, though, that as of Monday, Russia seems to have lifted its Sea of Azov blockade, but it continues to hold the Ukrainian ships and crews.

Exxon’s Carbon Tax

Posted on by
Reply

Exxon Mobil Corp is throwing $1 million at the move to produce a national carbon tax.

Exxon’s move is an attempt to manage what it sees as the risk of a similar movement in the US, in ways that it hopes will simplify requirements on its industry….
Exxon sees a carbon tax as an alternative to patchwork regulations, putting one cost on all carbon emitters nationwide, eliminating regulatory uncertainty….

On the contrary, Exxon is looking for short-term competitive political advantage at the expense of long-term economic—real—advantage.  That’s unfortunate.

It’s also unfortunate because, leaving aside the question of whether a carbon tax even would work as claimed, the scheme is based on the false premise that increasing atmospheric CO2 somehow is bad.  Atmospheric CO2 is, in fact, critical—as in can’t live without it—plant food.  In addition to that small fact, ice core samples from both ends of the earth—Greenland and Antarctica—reaching back 400,000 years indicate that rising atmospheric CO2, far from being a harbinger of bad warming to come, lags planetary warming by several hundred years.  The rise confirms that a cold planet is warming out of its Ice Age, and life is recovering and exhaling increasing amounts of CO2 into the atmosphere.

Energy “Subsidies”

Posted on by
Reply

The Federal government is continuing its ethanol mandates in its misguided effort to clean up the fuel our cars burn as we get about our business.  In an op-ed earlier this week, The Wall Street Journal rightly decried the artificial, government-created and -propped up market in RINs, which oil refineries can trade around in order to get credit for ethanol that they’re unable to obtain and blend into the fuel they produce.  As the WSJ noted, one of several outcomes of this artificial market is this.

The core problem is that the federal government has distorted the energy market by using subsidies and mandates to support biofuels.

The Federal government has distorted far more than that. By diverting so much corn to ethanol production, the Feds have very greatly driven up the price of food—corn and corn products, meat animals fed on corn, other food crops that are corn substitutes—wheat, beans, etc—and on and on.

The solution is to end this political favoritism.

The favoritism here is in acceding to the wishes three Senators from corn-producing States: Chuck Grassley and Joni Ernst (both R, IA) and Deb Fischer (R, NE).

The more direct solution is for the Feds to end the ethanol mandates and to get out of the energy and food markets altogether (the latter which also requires eliminating farm support subsidies, a much more politically difficult proposition even though the subsidies also markedly drive up the cost of food). A large side effect of that would be to strike a blow against political favoritism.

Private Moves and Regulations

Posted on by
Reply

The Trump administration’s Bureau of Land Management is moving to rescind and replace an Obama administration regulation that would drastically limit methane gas emissions by companies drilling for hydrocarbons on Federal land.

While the move is salutary—the Obama regulation would have imposed too much cost, would have stunted energy innovation, and would have limited energy supply with resulting higher prices to us consumers—there’s one tidbit in the Wall Street Journal article carrying that news that needs emphasis.

Environmentalists rejected that claim [of impeding energy development] and decried the decision, pointing out that several companies had already moved on their own to start cutting methane emissions.

Because some in private industry think a move is a good idea, Government, says the Left, must get involved and require everyone to do the same thing.

And

Many oil-and-gas companies—including some of the world’s biggest—have been anticipating further rules to slow climate change and have decided to invest in better methane-capturing technology. They can recoup some of the investment and potentially add to profits by capturing more stray gas and selling it with the rest of their output.

Of course, they still will be able to with the new regulation in place.  Methane gas produced as a side effect of oil drilling or fracking still will be a marketable product, still will be competitive with coal, still will produce profit for the drillers and frackers.  This is innovation in a free market, something the Left and their environmentalists.

An Edge of the Envelope

Posted on by
Reply

Here’s one estimate of the cost of converting internal combustion vehicles to an all electric fleet.  Certainly, it’s a single datum, but it’s a useful one as an outer bound, plausibility estimate.  Nicola Sturgeon is Scotland’s First Minister, and she wants to replace all of Scotland’s internal combustion vehicles with electrically powered vehicles by 2032, which lends irony to the outer bound datum.  Great Britain’s green energy aficionados want to replace all of Great Britain’s internal combustion vehicles with electric ones by 2040.

Professor Jack Ponton of Edinburgh University has rudely run the numbers [emphasis in the original].

If you want to do this with wind turbines, you are talking about 16,000 more wind turbines, four times as many as we have at the moment, and I’ve estimated that would occupy some 90,000 square kilometres, which is approximately the size of Scotland.

Hmm….