Tag Archives: government

Technology, Oil, and Government

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Falling oil prices are a good thing. Except when they’re not. Or….

The irony in the falling prices is that the success of US producers using hydraulic fracturing and horizontal drilling technologies is partly responsible, along with slowing demand by struggling Asian and European markets. Now that success could come back to bite the so-called fracking industry and other drillers in America.

[Wyoming Governor Matt, R] Mead acknowledged that in the short term, lower gas prices will benefit businesses and residents in his sparsely populated state, where distances between towns are often calculated in hours instead of minutes.

But, he pointed out, “If we see low prices continue for some time, we’ll see rigs start to lay down. And it’s not just the direct revenue. It’s the hotels, restaurants and all that goes with that.”

Not to mention jobs.

This is normal in a free market economy, though. New technologies, or old technologies like fracking whose time has come, are always disruptive. Recall the stereotypical, but no less accurate for that, impact on horse-drawn buggy and whip manufacturers with the advent of the horseless carriage and then the assembly line for making those automobiles cheap.

So it is with fracking. Not only does it make hard-to-get oil and natural gas (much) easier and (much) cheaper to get, it drastically increases the supply of these commodities, each of which individually drastically lowers the price of these, and together they synergistically do.

But when supply overshoots demand, and the price obtainable for oil and gas cannot cover even the lowered cost of extraction, many of the suppliers, extractors, stop producing, stop extracting. This has negative effects on both fracking jobs and the ancillary jobs Mead mentioned.

However, in a free market, supply and demand quickly match each other, and prices—and jobs—stabilize. With the technological advances associated with this commodity, too, as with any technological advance, the new pricing equilibrium will be lower than the prior equilibrium. It’s uncertain whether oil and gas pricing in particular will stabilize at their current levels, continue a little lower, or go a little higher. But it’s virtually certain we’re done with $100 oil for the foreseeable future, which is to the good of utilities, manufacturers, consumers, and anyone and anything that uses energy.

And those jobs? They’ll recover with the stability and predictability of the new normal in oil and gas extraction. The widespread use of fracking and related technologies also will lead to a net increase in employment when all is said and done, just like in those early automobile days.

The kicker here is identified by Kathleen Sgamma, Western Energy Alliance Vice President of Government and Public Affairs [emphasis added]:

There is a point at which the lower commodity price combined with the increased regulatory cost will put new wells out of business—they just won’t be drilled[.]

And [emphasis added]

whether a well is on private, state, or federal land, “because the regulatory environment is such that it makes it more expensive to develop on those federal or tribal lands.”

Government’s intrusive regulation wasn’t a factor in Henry Ford’s disruption.

US Defense, Foreign Policies

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Russia, China, Iran, and Islamists are waging unconventional warfare around the world, and the United States currently lacks a clear strategy to counter the threat, according to a recent report by the Army Special Operations Command.

“This challenge is hybrid warfare combining conventional, irregular, and asymmetric means, to include the persistent manipulation of political and ideological conflict,” states the Army white paper, Counter-Unconventional Warfare.

Foreshadowed by Iranian actions throughout the Middle East, and by Chinese “unrestricted warfare” strategists in the 1990s, hybrid warfare has now reached its most brazen form in Russia’s support for separatist insurgents in Ukraine.

[“Non-kinetic”] tools…include covert and clandestine special operations commando activities combined with political, intelligence, diplomatic, and financial warfare methods to counter the activities of states like Russia, China and Iran, and insurgent activities by terrorist groups such as the Islamic State.

And

US government “lacks a cohesive [information warfare] strategy to counter adversary [unconventional warfare] campaigns conducted by state and non-state actors….”

Russian examples include

using special operations forces, intelligence agents, political provocateurs, and news media reporters, as well as transnational criminal elements in eastern and southern Ukraine.

“Funded by the Kremlin and operating with differing degrees of deniability or even acknowledgement, the Russian government uses ‘little green men’ for classic [unconventional warfare] objectives,” [according to the white paper].

Examples of the People’s Republic of China’s…techniques…include

unconventional warfare [based on the book,] Unrestricted Warfare…calls for using all means to defeat enemies, including cyber attacks, ecological warfare, financial warfare, and terrorism.

“China will use a host of methods, many of which lie out of the realm of conventional warfare,” [according to the white paper]. “These methods include trade warfare, financial warfare, ecological warfare, psychological warfare, smuggling warfare, media warfare, drug warfare, network warfare, technological warfare, fabrication warfare, resources warfare, economic aid warfare, cultural warfare, and international law warfare.”

Examples include China’s threat several years ago to sell off large US debt holdings to protest US arms sales to Taiwan, and cutting off sales of rare earth minerals to Japan in a dispute over the Senkaku Islands in the East China Sea.

Chinese news outlets also are used in media warfare….

Iran’s techniques are more limited in scope, but no less deadly:

“…Iran provides ‘material support to terrorist or militant groups such as HAMAS, Lebanese Hezbollah, the Palestinian Islamic Jihad, the Taliban, and Iraqi Shia groups,’ [according to the white paper]. “Hezbollah is the primary terrorists’ proxy for Iran working together with a campaign of terror against Israel, the United States, and other western nations.”

It’s entirely possible that an administration more interested in American global interests would have missed this, also. It’s virtually certain, though, that this administration, bent as it is on American withdrawal from the world, wouldn’t have cared even had it recognized any of this.

The Free Beacon‘s article is well worth reading in its entirety, and so is the USA SpecOps’ white paper on the matter.

Talk, But Don’t Act

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Now the White House policy is hitting the State Department’s ability to keep secrets from our enemies.

Weeks before the State Department’s Nov 16 shutdown of its unclassified email system in the face of unprecedented hacking attacks, auditors took the department’s management to task for ignoring warnings about their lax security habits and chronic failure to enact protections against high-tech intruders.

The situation was so bad, the auditors say in a highly censored report, that they “identified control deficiencies across a total of 102 different systems reviewed over five years, yet many of the same deficiencies have persisted.”

State’s leadership, though, claims it’s no big deal, and certainly not as bad as the auditors say.

The State’s bureaucracy disputes the audit’s finding that State’s info-tech weaknesses amount to a “significant deficiency” in its security….

And anyway, according to State’s Chief Information Officer Steven Taylor,

[W]e have created a foundation for correcting several existing weaknesses and an ability to address new issues as they arise.

Talking about talking. Never mind that the auditors noted that

OIG [State’s Office of the Inspector General] has reported deficiencies related to risk management since its FY 2010 audit. Many of the same deficiencies remained uncorrected in FY 2014.

And

[W]e identified control deficiencies across a total of 102 different systems reviewed over 5 years, yet many of the same deficiencies have persisted.

These all are highly intelligent people, professionals in their field, who surely know what they’re doing—and not doing. I have to wonder about the motivations behind their decision to talk, but not act.

The audit can be read here and here.

Free Speech, PRC Style

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During visits to more than 20 schools, the regional paper [Liaoning Daily] wrote last week, it found exactly what it said it was looking for: some professors compared Chinese Communist Party co-founder Mao Zedong to ancient emperors, a blasphemy to party ideology upholding Mao as a break from the country’s feudal past. Other scholars were caught pointing out the party’s failures after taking power in 1949. Some repeatedly praised “Western” ideas such as a separation of powers in government.

“Dear teachers, because your profession demands something higher of you, and because of the solemnity and particularity of the university classroom, please do not speak this way about China!” implored the article….

Yep.

Recall, also, the PRC’s ongoing suppression of democracy in Hong Kong, in cynical repudiation of its commitment to the Hong Kongese and the Brits as part of the turnover agreement between the Brits and the PRC.

Privacy and Government

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…and government shoe-squeezing.

The No. 2 official at the Justice Department [Deputy Attorney General James Cole] delivered a blunt message last month to Apple Inc executives: new encryption technology that renders locked iPhones impervious to law enforcement would lead to tragedy. A child would die, he said, because police wouldn’t be able to scour a suspect’s phone, according to people who attended the meeting.

The naked panic-mongering is something we’d expect to get out of the press, but for a high-ranking government official to spout such nonsense is…unseemly. For Cole to masquerade his extreme outlier as the trend that must result, though, is dishonest. But it’s all good—DoJ must be able to snoop into Americans’ communications on DoJ’s own recognizance. Because, of course, no American administration would abuse its discretion.

This comes on the heels of another DoJ overwrought claim.

Last month, Federal Bureau of Investigation Director James Comey said new Apple and Google encryption schemes would “allow people to place themselves beyond the law.”

This is the risk a free people take; it’s a risk the free American people have said repeatedly we’re willing and anxious to take. Because such encryption schemes also would “allow people to place themselves beyond an overreaching government.” Which overreach the crocodile tears and manufactured crises of Cole and Comey demonstrate this government is committing.

Give up some freedom—some privacy from government snooping—in order to have security? Pssh. Without the freedom, without the privacy from government snooping, there can never be any security.