Tuesday, April 30, 2013

COTW: The Bubble Returns

As the stock market soars even higher, fueled by the ultimate happy drug--fiat currency, the joy is spreading to the housing market too. The Fed is buying $45 billion worth of mortgage securities each month driving mortgage rates to record lows (average for a thirty-year loan is now 3.4%):
The widely-followed Schiller Price Index for twenty cities rose over 9% from last year, red line) back to the level of fall 2003, before the real estate bubble began rising.  Our economy has become one of serial bubbles that inflate, burst, and repeat. Nearly 90 million Americans are out of the labor market or nine times the number of unemployed in the First Great Depression. Here's a statistic that will turn your head:  that icon of Americana, Coca-Cola, now makes 70% of its revenue outside the United States. Thank you Ben Bernanke, "Pope of Fraud".

Monday, April 29, 2013

Fracking Fraught With Environmental Hazards

Unsurpizingly the EPA adhered to a pattern by issuing a report drastically reducing the amount of methane released to the atmosphere by fracking operations. The industry pressured the agency to reduce the amount previously reported by it. The scope of the revision is vast, claiming tighter regulations have reduced greenhouse gas emissions by twenty percent despite production increasing by nearly 40 percent since 1990. Federal climate scientists from National Oceanic & Atmospheric Administration published recent studies documenting massive methane leaks from production in Colorado and other Western states. The new figures still show natural gas production to be the main source of methane emissions in the US at about 145 million metric tons in 2011. Methane from livestock was next at 137 million metric tons, and landfills accounted for 103 million metric tons. One environmental group leader called the new figures a "kind of earthquake."

credit: High Country News
And that is the subject of other studies showing injection wells are causing earthquakes. The Seismological Society of America claim the increase in earthquakes throughout New Mexico are due to wastewater injection in the Raton Basin. Abandoned wells are used to dispose of the enormous amounts of waste liquid generated by the fracking process which pumps a slurry of water, sand and chemicals at high pressure to open fissures in shale rock and release trapped natural gas. Between 2001 and 2011 the number of magnitude 3 or larger earthquakes rose 20 times more than during the period 1970 to 2001. Two faults crossing the Raton Basin have been located due to the earthquakes. USGS researchers think the ruptures along these faults are caused by frequent wastewater injection which lubricate and pressurize the faults. Waste injection was linked to a 5.3 magnitude earthquake in Trinidad, Colorado which destroyed historic buildings in town.

Prague, OK experienced the largest earthquake in Oklahoma's history, 5.7, on November 5, 2011. The quake buckled a highway [photo], exploded windows and collapsed homes. The quake originated along the Wizetta fault, long thought to be inactive. But just 650 feet from the fault were old oil wells used by the industry to dispose of waste. Records showed the pressure inside the wells had increased 10 times from 2001 to 2006. The investigating researcher concluded that wastewater injections caused the quake and published the study results in the journal Geology.  Other studies have concluded there is a link between seismic activity and wastewater well injection. A University of Texas study in 2012 found the majority of earthquakes recorded between 2009 and 2011 in North Texas occurred within a few kilometers of an active injection well. So its good news all round: if there is not enough escaping methane to kill you, but your house might collapse from the induced earthquake.

Friday, April 26, 2013

'Toontime: Too Complicated to Work

[credit: Nate Beeler, The Columbus Dispatch]
Wackydoodle axes: Did the Rooskies warn us about that too?
US Person advocated single payer health care as the solution to skyrocketing health care costs in America, and the third anniversary of the complex, but insurance company friendly, substitute known as Obamacare (a knock-off of Romneycare) has only confirmed the worst. It may cost Americans more for insurance under the program than it will save in costs. One non-partisan health organization said private insurance premiums will rise 108% faster than before, and overall national health care spending is expected to increase by 39.65% faster than prior to the implementation of Obamacare. Even the Secretary of Health and Human Services conceded that some Americans will see their premiums go up.
[credit: Gary Varvel, Indianapolis Star]
Wackydoodle axes:  Is he a comminist actuary?

Thursday, April 25, 2013

BP Trial Update VIII

More: One aspect of the disaster three years ago that British Petroleum is trying to keep quiet is the effect of the oil dispersant Corexit on clean-up workers and Gulf residents exposed to the chemical. A BP executive attempted to downplay the risks of exposure by saying, "it's as safe a Dawn dishwashing liquid". Hardly. Eighty-seven days passed before the Macondo well was finally sealed off, and during that time BP, with the blessing of the EPA, dumped tons of the chemical into the sea. A worker feeding clean-up crews in Louisiana attempted to remove the chemical from the canteen floors where workers had tracked in a sticky mess of crude oil and Corexit. Within days of exposure on her arms and face she fell seriously ill, coughing up blood, suffering constant headaches and sore throat. The professional cook soon lost the use of her hands as muscle spasms turned them into useless claws. Her mind went too, with a loss of short term memory so bad that she went to work one day without pants. Her skin was inflamed and irritated. She shared her excruciating and grotesque aliments with thousands of workers cleaning up BP's oil spill, the largest accidental spill in history. The symptoms were eerily similar to Gulf War syndrome. In the Persian Gulf War, soldiers were exposed to deliberate crude oil spills and the chemicals used to clean.

BP was desperate to hide the sheer enormity of the Macondo well blowout from the public and the government. It chose to do this by employing chemical warfare. Corexit would chemically bond with the crude oil slicks, break the oil up and sink it--out of sight, out of mind. The 1.84 million gallons of Corexit made the oil spill disappear, but the environmental reaction to the chemical was more severe than to the spilled crude oil alone. A technical manual BP got from Corexit supplier NALCO was suppressed by the company, but a copy leaked out and it details the horrible ecological cost of using huge amounts of the dispersant.  BP lied about the safety of Corexit. The combination of Corexit and crude oil has produced an unprecedented number of seafood mutations, declines in seafood catch of 80%, and massive die-offs in the zooplankton that supports the entire marine food chain. Because the company and the government were unprepared for the disaster's scale, the company choose to hide the disaster and make it worse by doing so. BP even enlisted the help of the fishing industry that it was killing with pollution from its blowout by using fishing boat to skim, burn and otherwise get rid of leaked oil. None of the fishermen helping BP got hazardous material advisories or protective clothing. Some of them got sprayed with Corexit from the air.

A peer-reviewed study published in Environmental Pollution nineteen months after the blowout concluded that crude oil becomes 52 times more toxic when combined with Corexit. The NALCO technical manual describes Corexit 9527, the more toxic of the two types dispersed, as "an eye and skin irritant...repeated exposure may cause injury to red blood cells (hemolysis), kidney or the liver. The manual added, "excessive exposure may cause central nervous system effects..." When BP was confronted with the contents of the leaked NALCO manual in a meeting with whistleblowers, company representatives refused to discuss it. Very little has changed in the regulatory environment for deepwater drilling in the Gulf in the aftermath. After a brief hiatus for public relations, business resumed. So the next time you see BP propaganda on TV about how, "the Gulf is open for business" think only of the lies it told about the biggest disaster in American history and the health of nature and humans it destroyed as a result. Because you will be paying for the cover-up for long, long time.

{24.04.13}Federal District Judge Carl Barbier presiding over the BP trial in New Orleans issued an order today outlining the key issues to be addressed by attorneys for the parties in the liability phase of the admiralty case. He has given attorneys two months to submit briefs. The judge wants to know, among other questions, if BP can be found grossly negligent even if its act or omission was not the proximate cause the accident. The government's theory of the case is that the disaster was caused by a cumulative corporate policy of cost cutting at the expense of safety and environmental compliance. He also wants to know if the standards of an industry that is inherently risky and dirty, or compliance with applicable but weak government regulations would precluding a finding of gross negligence on the part of British Petroleum. [photo credit: New Orleans Times Picayune]

In related news, The House of Representatives passed a version of the RESTORE Act in the Surface Transportation Act bill on Friday. Last month the Senate passed the bill to use 80% of Clean Water Act fines for repairing the ecological damage caused by the Deepwater Horizon disaster. The Clean Water Act provides for fines between $1100 and $4300 per barrel spilled depending on the degree of culpability. The Senate passage was a rare show of bipartisanship with a vote of 74-22 in favor. The RESTORE Act distributes the money to five Gulf States and sets up a Gulf Coast Restoration Council to develop and finance a plan for comprehensive ecological recovery, and establishes an continuing program to monitor the health of Gulf ecosystems. The bill now goes to conference and the President for signing.

Tuesday, April 23, 2013

COTW: The World is Aging

[credit: The Global Mail]
The chart shows that the human population is aging because fertility rates are down on a global scale. This development has at least two fundamental consequences. One, there will be fewer young working people in the future to support retire elderly workers and pay taxes, thus putting social democracies in a fiscal squeeze. We are seeing some of this happening in Europe now Many economists doubt the current policy fetish for austerity will work to solve the problem*. Forbes wrote last year that Europe's economic problems can be laid at European's failure to reproduce fast enough. Not totally tongue-in-cheek the voice of economic orthodoxy called upon Club Med to use its mojo to convince Europeans to have babies. But recession makes educated women postpone having babies. Economist Joseph Stiglitz called the plan to bail out Spanish Banks "voodoo economics" because the very banks being rescued are the buyers of most of Spain's sovereign debt that is ballooning because of mass unemployment and recession. And its not just Spain, the world's banking system is insolvent according to Nouriel Roubini. Governments have decided to socialize the banks' private loses, and for loses of this magnitude there is simiply not enough money to go around. Commentator Max Keiser sees the recent large drop in gold prices as the effect of large, computerized shorts by institutional banks "slamming" the market, [chart below] desperate to prop up their country's devalued currencies against gold (before the slam gold hit a forty-year high against the Yen). The result is the world's economy returning to a de facto gold standard. Small investors are helpless against these paper bombs (1,100 tons of paper gold). However, what the slam signals is that money printing is not working, and deflation is on the horizon.

Second, older populations mean less consumption. For the Earth, already taxed beyond sustainability by human consumption, this is good news, but bad news for economies that exist by consumerism. Some pundits have labeled the world economy a giant Ponzi scheme(e.g Mitch Feierstein, Planet Ponzi). Half the world, including most of the developed world is reproducing below replacement level. No one really knows what will happen to economies based on consumption and service because this has never happened before in human history. The future appears to be one of fewer people living with less consumption and lower need for resource exploitation. That cannot be all bad unless you are a "free-market" ideologue addicted to arbitrage, war and private concentrations of capital.

[source: ZeroHedge.com]

*A key academic analysis underpinning global austerity policy was recently found to be based on data errors. Reinhart & Rogoff wrote in their paper, "Growth in a Time of Debt" (2010) that countries which have debt higher than 90% of GDP do not grow, but have a slightly negative average growth rate (contraction). When other researchers attempted to duplicate their results, they found that Reinhart & Rogoff massaged their data by excluding Australia (1946-1950), Canada (1946-1950) and New Zealand (1946-1949) all economies that grew during those periods with debt levels >90%. The authors in question also committed a rather large spreadsheet coding error leaving out five countries from their calculations. Opps! The reviewing researchers found after correcting the errors the actual growth rate of countries with higher than 90% debt ratios is actually 2.2% not -0.1% as claimed. Further, some prominent economists conclude that the relationship between debt and economic growth is the reverse of what Reinhart & Rogoff concluded: slow growth causes high debt levels. US Person follows this line of thinking.

Monday, April 22, 2013

Belize Court Protects Barrier Reef

Even when the government disqualified almost half of the 20,000+ signatures collected for "poor penmanship" on a petition to demand a national referendum to allow offshore oil drilling, the people of Belize still got their day in court. The Belize Supreme Court ruled in favor of environmental groups opposing drilling on the Meso-American reef, the world's second largest barrier reef. The Court invalidated lease contracts issued by the government saying it had failed to assess the environmental impacts of oil exploration off the Belize coast, nor had the contracting companies demonstrated the ability and means to drill safely. When the government invalidated the 2011 referendum petition the conservation organization Oceana organized a "People's Referendum" in which 29,235 people voted or about 10% of registered voters. 96% voted against offshore oil exploration. The ruling party almost lost its majority in the national election following these displays of greed. One company, Princess Oil, began as a casino operation before being granted a license to explore for oil in the area of Lighthouse Reef, the location of the Great Blue Hole [photo credit: ambergriscaye.com], a world-renowned diving site featured by explorer and filmmaker Jaques Cousteau.

Saturday, April 20, 2013

Marathon Bombing Suspect Denied Miranda Warnings

The Current Occupant has decided to drive a truck through US v. Quarles (1984) by interrogating Dzhokhar A. Tsarnaev in custody without first giving him Miranda warnings. Tsarnaev is a US citizen of Chechen heritage and lies gravely wounded in hospital unable to speak at present. His older brother, also a suspect, was killed attempting to elude police*. Quarles is the Supreme Court decision which created the "public safety" exception to the reading of Miranda rights prior to custodial interrogation. According to the FBI's own legal digest website, the Quarles decision only allows a government agent to inquire into matters which directly bear on the imminent safety of the public or arresting officials. In Quarles, the suspect was arrested in a store and asked where his pistol was before being read his rights against self-incrimination. An early 3rd Circuit case following Quarles, decided a hospitalized bombing suspect was properly asked how to diffuse pipe bombs discovered in a black bag in his apartment without Miranda warnings being given to him. The Quarles majority made clear any other custodial interrogation outside the immediate necessity of securing the public's or arresting officers' safety violates Miranda; any incriminating statements thereby obtained would be inadmissible in court. The head of the ACLU, Anthony D. Romero has already warned that any interrogation of Tsarnaev without the Miranda advisement outside imminent dangers such as the location of hidden active bombs would be unconstitutional. The temptation to go beyond the boundaries of the exception must be very great since Tsarnaev could provide valuable intelligence on the Chechen diaspora's involvement in international terror networks.

US v. Miranda has long been a thorn in the side of law enforcement, and conservatives on the federal bench have been seeking ways to limit its application or scope absent an outright overruling of the monumental precedent from 1966. In 2009, a airliner bombing suspect was questioned for fifty minutes while sedated before undergoing surgery. Miranda rights were not read to him until after he woke up. Nevertheless, the federal judge in his case refused to suppress his statements to FBI agents before surgery concluding the interrogation was a justified use of the "public safety" exception. Farouk Abdulmutallab was convicted of attempting to blow up a Detroit-bound airliner and sentenced to life imprisonment. Subsequently, the FBI issued a policy memo in 2010 encouraging its agents to adopt a broad interpretation of public safety related questions in terrorism cases. Combating terrorism has given additional impetus to erode constitutional protections for the accused as the current decision to deny advising a US citizen of his right against self-incrimination demonstrates.

*US Person finds interesting that the older brother, Tamerlan, returned to Dagestan for six months last year. He came to the attention of Russia's Federal Security Bureau which feared he could be a risk and requested information from the FBI concerning the visitor, but the FBI could find nothing derogatory in its files. Apparently the Russian information request was considered routine since it did not prompt a US follow-up inquiry into his activities. Both Chechnya and Dagestan have active Islamist separatist movements; Tamerlan was considered a devout believer. Tamerlan's US citizenship application was still pending, derailed by a domestic violence complaint, when he was killed by pursuing police. The US and Russia began cooperating on combatting terror in 1994. President Putin called the US President to express his condolences for the people killed and hobbled in Boston.

Friday, April 19, 2013

'Toontime: Diversionary Tactics

US Person blames not the political hacks of the gun industry for the failure to control America's gun disease, but the spineless so-called liberal politicians who continually fail to reform the US Senate which was never intended by the Founders to only legislate by a supermajority.
[credit: Cameron Cardow, Ottawa Citizen]
As an observer of this often paranoid debate, US Person is forced to ask, what part of the Second Amendment do absolutist, unlimited gun right zealots not understand? Apparently it is the first part, the preamble, the stated purpose of the Second Amendment that has clearly become an anachronism regardless of what the closeted originalists on the nation's highest bench proclaim. Even the original militiamen were required to register their musket each year with state militia leaders under the Militia Act of 1792. Recall the Second Amendment refers to "a well regulated Militia". Jefferson, upon reading the Constitution in Paris where he was ambassador, wrote to Madison urging for a provision to "substitute a militia for a standing army", then considered to be the great bane of democracy (probably correctly). This was how the Second Amendment was envisioned by the Founders, not as a guarantee of individual gun rights, but as a protection against disarming existing state militias and their being superseded by a federal standing army. History has seen the rise of a hugh federal military establishment--some might even argue a police state--but the Second Amendment was never intended to be a license for unlimited personal arsenals. Author Madison and leading Anti-Federalist George Mason viewed the citizen's right to bear arms, as did most American 18th Century social theorists, to be in the context of rendering required military service in person as part of an organized citizen militia. Subsequent commentators such as Chief Justice Story agreed.

Are these assault weapon fetishists contemplating armed insurrection against an elected federal government? Are they are unconsciously equating its actions with the tyranny of the British Crown, or the perceived aggression of Northern States? Do they see themselves as "bulwarks of liberty" as they brandish their semi-automatic weapons of modern war in public? Whichever is the case, you cannot think this latest failure to represent the people's will the nadir of Congress when you consider slavery was abolished only with the aid of bribery. And on that consideration revolves the gun debate.

Thursday, April 18, 2013

BP Trial Update VII

Testimony in the liability phase of British Petroleum's trial in New Orleans was completed this week. British Petroleum rested its case on Wednesday at 6pm. The trial's next phase will determine the size of the Deepwater Horizon disaster and what BP did to stop the release of gas and oil. The blowout was not capped until July 15, 2010, three months later.  The number of barrels of crude oil spilled into the Gulf of Mexico has been a contested issue since it bears directly on the calculation of damages for violating the Clean Water Act. Testimony from a former Transocean executive was presented by BP as part of its strategy to deflect responsibility for the blowout that spewed some 4.9 billion barrels of crude into the sea. A 2011 report given to BP concluded the the blowout preventer did not cut the drill pipe and seal the well because its automatic mode failed to function. Previous testimony has discounted the possibility that the preventer was defective. The BP witness also said the equipment was suitable for the Macondo well, and wrote a 2003 report critical of the industry for not taking time to maintain preventer equipment calling it a "common and very costly issue confronting all offshore drilling contractors." A twenty-seven volt battery powering the preventer's shear circuits was found depleted since it had not been replaced for three years.

BP's vice-president of drilling for the Gulf who was inspecting the Deepwater Horizon at the time of the accident testified he heard someone ask the rig's master if he should activate the preventer given explosions had occurred, a fire had broken out on the drilling floor, and drilling mud was raining down on rig personnel. The master replied he did not have permission from his boss to activate the preventer's emergency disconnect system. British Petroleum owned the Macondo well and the offshore lease into which it was drilled, and hired Transocean at its drilling contractor.

Wednesday, April 17, 2013

European Court Blocks Extradition

The European Court of Human Rights ruled against the extradition of terror suspect Haroon Aswat from the UK to the United States on Tuesday. He is a former aide to radical cleric Abu Hamza al-Masri. Classified a not merely a crank, but insane, Haroon is being held at Broadmoor psychiatric hospital since his 2005 arrest in Britain. He is charged with conspiring to establish a jihadist training camp in Bly, Oregon at the direction of al-Masri. The court concluded his transfer to the supermax dungeon in Florence, Colorado would further degrade his schizophrenic condition and constitute degrading treatment under Article Three of the European Convention on Human Rights(1950). Other prisoners not suffering a mental conditions have been successfully extradited. Nor did the European Court find that high security US prisons, referred to as supermax prisons where prisoners are locked in their cells for up to 23 hours a day, violate the Convention.

US Person notes the Constitution Project, a bi-partisan legal advocacy group has concluded after a two year study the United States has engaged in torture as defined previously in this country's jurisprudence and by the United Nations in the Convention Against Torture, ratified by the United States. The practice of torture was acquiesced at the highest levels of the United States government. This conclusion is based on a number of decision taken by the Charlatan and continued in some respects by the Current Occupant. The Charlatan issued an order in 2002 declaring the Geneva Conventions inapplicable to Al Qaeda. His administration further established numerous detention facilities (so-called "black sites") including Guantanamo Bay, Cuba, undertook extra-legal renditions of captives, and authorized what the administration obliquely called "enhanced interrogation techniques". These decisions, and lack of clarifying orders regarding treatment of detainees, resulted in the use and spread of torture. Under the current administration, the force feeding and treatment of prisoners at Guantanamo Bay has returned to public scrutiny. A hunger strike has been carried out by prisoners there since February. Assassinations of jihadists using flying robots has also been criticized by human rights organizations. Somehow this is not really news, is it?

Energy Companies Cancel Plans

LNG site as of 2012
Two cancellations of energy projects that would have directly impacted sensitive ecosystems are in the news. Woodside Petroleum of Australia has cancelled its plan to build a $4.5 billion natural gas processing plant on the remote and nearly untouched Kimberly Coast of northwestern Australia. The ocean off James Price Point, the location of the proposed plant is a humpback whale nursery where thousands of humpbacks gather yearly to give birth. Blue whales also pass through to calve further north. Woodside had already cleared several permitting requirements, but decided the project was not economically viable after all according to a company announcement. Shareholders apparently agreed since their stock went up after the announcement. Building the project would have involved dredging up to six miles out to sea and constructing a large ship jetty several kilometers long smack into the middle of the whale nursery.

Last year, Aboriginal people became so concerned about the adverse effect of the project on humpbacks and other sea life they asked Sea Shepherds to help them halt construction of the LNG facility. The Goolarabooloo people said they were impressed with Sea Shepherds efforts to halt Japanese commercial whaling in the Southern Ocean. Sea Shephard's Captain Paul Watson accepted the invitation in a "spirit of eternal friendship". Sea Shepherds began to publicize the issue, organize supporters, and lobby politicians. The uncontaminated ocean at James Price Point encourages an abundance of green, flat back, loggerhead and hawksbill turtles as well as numerous species of migratory birds and fish. The director of Western Australia's EPA in a moment of candor admitted that turbidity from construction as well as spills an vessel strikes could adversely affect sealife. A company spokesman denied environmental activism played a role in its decision to cancel the project. After the cancellation the Goolarabooloo people and Sea Shephards are asking for an assessment of the site for protection under UNESCO's World Heritage treaty.  Australia placed 19 million hectares of West Kimberly and its coastline from Cape Leveque to Cambridge Gulf on the National Heritage List last year.

Greenpeace ship Esperanza close to Shell's drilling
Conoco-Phillips followed Shell Oil in canceling its 2014 exploration plans in Alaska's Chukchi Sea citing "the uncertainties of evolving federal regulation". It also said it need more time to "ensure that all regulatory stakeholder are aligned" presumably meaning it owns the privilege of aligning public servants to its own ends. Conoco was awarded 98 leases in the Chukchi Sea outer continental shelf. Shell shelled out $4.5 billion before it halted its Arctic drilling program. The Department of Interior told Shell it would have to provide detailed plans addressing numerous safety issues before it could resume its Arctic operations. The Arctic is melting beyond denial, but the conditions still present enormous challenges to offshore exploration and production. Maritime insurer Lloyds of London said in a report that drilling in the Arctic "a unique and hard-to-manage risk", an understatement that speaks volumes. Statoil, the Norwegian state oil company has also delayed its exploration plans after witnessing the difficulties of Shell which almost lost a drilling platform that broke loose from towing and grounded on a Kodiak island. Environmentalists are pleased oil companies are rethinking their plans for Arctic exploration given no company has demonstrated an ability to effectively clean up a major spill in frigid, ice covered ocean. Greenpeace trekkers to the North Pole hope to meet with Arctic Council members, the governing body comprised of foreign ministers and senior officials from Arctic states, at the pole to express their desire and the desire of 2.7 million supporters that the Arctic Ocean be made a world sanctuary.

Tuesday, April 16, 2013

Governments Agree to Protect Last Rhinos

Malaysia and Indonesia may have waited to long to give protection to the last Sumatran rhinios (Dicerorhinus sumatrensis) hanging on to existence. Less than one hundred have survived man's onslaught of forest clearance and poaching. If these few remaining representatives of their kind are not fully and successfully protected, it will end their 20 million year old presence on Earth. The last two subspecies live in protected forest on Sumatra and Sabah, Malaysia. They once roamed as far as the Himalayas in Bhutan. The belated agreement was reached at the Sumatran Rhino Crisis summit convened by the International Union for Conservation (IUCN) in Singapore. A two year emergency action plan was suggested by rhino conservation experts for implementation by the two governments. Whether the realization of the rhino's extreme plight will translate into action on the ground remains to seen. Hopefully Sumatran rhinos will not disappear before they get help.

The near extinction of these animals is caused by the irrational demand for rhino horn as a medicinal "cure all" and for use in creation of art objects. If someone tries to interest you in a "libation cup" or other object they say is made from rhino horn, simply walk away, regardless of erroneous estimates of value you may have heard on your favorite antiques TV show. There is definitely a good chance the species can be brought back from the edge if humans refuse to encourage their destruction by coveting their keratin. Captive breeding efforts have met with limited success. Just two captive females have reproduced in the last 15 years. That is one reason concerted protection of more forest habitat is critical to stabilizing their numbers. All forest creatures and plants benefit when rhinos are protectedin situ. WWF Indonesia announced recently that monitoring teams found new traces of rhino in the "Heart of Borneo", a conservation area in Kutai Barat, East Kalimantan [photo credits: WWF-Indonesia]. Follow-up studies will be made to develop a plan for protection of this previously undetected wild rhino population.

Monday, April 15, 2013

COTW: Is the Price Right for Keystone XL?

[source: Oil & Gas Financial Journal]

The Keystone XL pipeline is being sold to uninformed Americans as a relatively painless way to insure a future domestic oil supply free of the insecurities of Middle East politics. But US Person knows the actual driver of the proposal, as is commonly the case in matters corporate, short-term profit margins. The chart shows the discount Western Canadian Select (WCS) heavy crude (a blend of 19 different Canadian conventional and bitumen crudes with diluents) is selling compared to the West Texas Intermediate (WTI) benchmark. One can see that although the discount varies, it is substantial. That is because there is a glut of heavy crude oil reaching midwest refineries. Canadian heavy crude is not as valuable as lighter viscosity oils that can be refined into more petroleum products. Canadian dilbit is known in the trade as a "dumbell crude" because middle distillates are reduced in amount. Middle distillates may account for 30% of the products distilled from lighter oils compared to the sulfur rich and super heavy Canadian dilbit. Another factor in the pricing of Western Canadian heavy is the number of nearby US refineries that can cook the gunky stuff. The US midwest market is already saturated with it. Inventory at the Cushing, OK terminus are at record levels now. A Chicago area refinery capable of refining dilbit is slated to come back on-line in the latter part of 2013 but its capacity is 400 Mb/d, while Canadian dilbit is expected to reach 1MMb/d in the next three years.
[source: RBN Energy]
The answer the Canadians have come up with to low prices and excess supply is to build another high capacity pipeline directly to Gulf Coast refineries that can handle heavy oil and thereby reach international markets*. The Gulf Coast is the largest market in the world for heavy crude refining. It already refines heavy crudes from Venezuela and Mexico and has about 2.38 MMb/d of capacity. However in the second quarter of 2012 only 90Mb/d of Canadian crude was reaching Gulf Coast refineries. The only other choice they have is to ship it to Asia from their Pacific Coast, but that means building expensive, and ecologically controversial pipelines over the Great Divide and a deep water port at Kitimat, BC. Two such projects are in the works, Kinder Morgan's Trans Mountain project and Enbridge's Northern Gateway. However, there is significant opposition to both projects from Canadian environmentalists and First Nations. Unless Canadian heavy crude producers find a way to international markets they will have to reduce production levels and that is bad for business [chart] Canadians can expect their dilbit to sell for as much as $28 per barrel on average more on the US Gulf Coast than the price they receive in Alberta. But this price analysis is not guaranteed because it depends on volatile price differentials between WTI, WCS and Maya crudes and changing transportation costs.

One viable alternative that the US State Department failed to compare to the Keystone XL proposal because it was too busy rolling over for the Koch Brothers, et al, is the transportation of dilbit by railcar. Rail transport of bitumen is going on right now and its economic aspect makes it increasingly likely more rail transportation will be used. Heating bitumen in steam coil equipped rail tankers obviates the need for dilution thereby reducing costs and making rail transportation almost as cheap as pipelines by some estimates. One refiner announced at a recent Houston oil conference that it was buying 1600 coil tankers with the intention of running unit trains from Alberta to its east cost refineries. Rail transportation is not without accidents, but is arguably safer than a high capacity pipeline that may rupture in people's front yards as it did in Mayflower, AK.

*Of course WCS will have to compete with other heavy crudes in the Gulf Coast market like Maya from Mexico which trades at a premium to Canada's product.

Friday, April 12, 2013

'Toontime: O'Drama Sucks Up

[credit: Steve Sack, Star Tribune]
Wackydoodle axes:  Is that ther' AC or DC?
Uncle Sam is doing the fastest tap dance he can while K.J. Un and his Musudans supplies the music. "Unacceptable" to his own party's progressive wing is B. O'Drama's offer to cut Social Security entitlements using an accounting trick known as "chained CPI" {25.03.13,"Unchain My CPI"}. The equitable solution is not further erosion of the elderly's buying power, but taxation of high wages exempt under the cap on FICA. US Person thinks if we really are on the same boat, then everybody should pay a fair share of operating costs.
[credit: Rick McKee, Augusta Chronicle]
US representatives met with North Korean officials in New York in mid-March via their UN office. The "New York channel" has been a useful communication link in the past since the two nations do not have formal diplomatic relations and are technically still in a state of war, sixty years after a negotiated cease fire ended the Korean War. However, the unofficial channel has become a method of exchanging boilerplate without any candid exchanges that could lead to a diplomatic solution of a very difficult relationship mired in cold war rhetoric. The State Department has not yet revised its travel advisory for Americans traveling to South Korea.

More: When Secretary John Kerry was Senator Kerry and head of the Foreign Relations Committee, he advocated direct bilateral talks with North Korea instead of imposing preconditions of behavior modification. During a prior round of brinksmanship in 2011, Kerry said, "We must get beyond the political point that engaging North Korea is somehow 'rewarding bad behavior'. It is not." He further added that not officially talking to North Korea contributed to its "dangerous and destabilizing conduct". Kerry concluded that initiating bilateral negotiations would be a way take the initiative, deescalate a dangerous standoff and lay the groundwork for resumption of Six Party talks.

BP Trial Update VI

Standards, what standards?
As part of its defense against allegations the British Petroleum corporation was grossly negligent while managing the Macondo well operation, the then company executive in charge of Gulf of Mexico operations took the stand Tuesday to testify about his efforts to get the company's safety record back on track in 2008. British Petroleum was charged with a felony violation of the Clean Air Act in 2007 to which it offered to plea guilty a year later in exchange for a relatively small fine of $50 million*. The charges arose from a BP owned, Texas City refinery explosion of 2005 which investigation showed numerous safety regulation violations had occurred. Fifteen workers were killed by the disaster. Former Secretary of State James J. Baker III and his investigating panel concluded BP had a "weak safety culture". The plea offer is still being considered, but victims' families object to it.

Former Gulf Coast manager Neil Shaw wrote a company e-mail in 2007 in which he said safety was to be the "No.1 priority", and disputed the company's mantra "every dollar counts" was inconsistent with safety as a priority. He also disagreed with expert testimony given by Robert Bea, a civil and petroleum engineering professor at UC Berkeley. However, BP's former safety chief testified earlier that the internal investigation into the Macondo well blowout did not examine concerns the well was over-budget and behind schedule, or the effect those concerns had on the operation of the well; nor did it investigate the resignation of Kevin Lacy, former BP senior vice-president for drilling operations. Lacy testified via video link that he resigned from BP in 2009 after expressing concerns over the company's lack of a safety culture. Lacy sent a 2009 e-mail to BP's management expressing concern over its alleged preoccupation with the botton line. BP's drilling budget for the Gulf was cut from $250 million to $300 million while production increased 54% from 2008 to 2009. BP's investigation team was not allowed to talk to Transocean or Halliburton employees concerning the cause of the blowout. Of the team's eight key findings in its internal report to management, BP was found responsible for only one, and five findings concerned issues that occurred after the well blew out on April 20, 2010.

The blowout preventer manufacturer Cameron International was dismissed from the case last week after the judge hearing the case determined there was no evidence of Cameron's negligence or defective product. On Thursday, a New Orleans electrical engineer called by BP testified the preventer did not perform as designed because a 27 volt battery was depleted and without sufficient power to close the blind shear ram that should have cut through the drill pipe and seal the well. Another electrical circuit contained a solenoid incorrectly connected, so it also failed. The theory that the shear did not work because the drill pipe was misaligned was discounted by Arthur Zatarain, consulting engineer, and his testimony is consistent with testimony presented by other experts on the issue. Cameron recommended to its customers that batteries be replaced yearly, but Zataran testified that the 27 volt battery had not been replaced since 2007.

While the trial proceeds to a close sometime the end of this month and the third annirversay of the disaster approaches, conservationists are looking to the future of the Mississippi Delta region now that funds will be available for restoration projects. David Muth is the National Wildlife Federation's director of its program to restore wetlands damaged by the spill and hurricanes. The NWF  will receive a $2.4 billion payment as part of BP's plea agreement to criminal charges in connection with the Deepwater Horizon disaster. Muth says the Federation wants to insure that money is spent to achieve the best results for a degraded ecosystem. Half of that amount will be spend on rebuilding barrier islands and fresh water diversion projects in Louisiana. The Mid-Barataria Diversion is already out for contract bids, and is intended to divert freshwater and sediment to build wetlands in the Barataria Basin. Wetlands are an important buffer against storm surges as well as vital habitat for a myriad of wild creatures.

The Federation wants government officials to commit to spending 80% of money damages under the Clean Water Act allocated to ecological restoration. Wildlife is still suffering from the effects of the largest accidental oil spill in history. Just one example is the case of Y12, a sixteen year old bottlenose dolphin. He was caught near Grand Isle, a barrier island heavily oiled by the disaster. He was examined and found to be underweight and severely ill with signs of lung and liver disease, consistent with chronic exposure to crude oil found in the 31 other dolphins examined in the study. Seven months after his capture, his emaciated body was found washed up on the beach at Grand Isle. Six hundred and fifty dolphins have been found dead since the disaster, more than four times the historical average.

*the plea agreement was finally approved by the federal district court in March, 2009. Part of the criminal judgement entered against the company provided that if it committed any federal environmental or safety process crimes related to its Texas City operation it would be in violation of the terms of its three year probation.  BP failed to correct all the refinery's hazardous conditions within the time period allowed by its settlement agreement with the Occupational Health Administration.  Instead, it paid a large fine to OHSA for willful violations and failure to abate hazardous conditions.  Despite the obvious violation of its probation conditions, the DOJ refused to seek revocation of the company's criminal probation consistent with a the Charlantan's political policy to not punish corporations severely.  As one former refinery supervisor who lost eleven employees in the explosion put it, BP continues to "suffer extreme leniency."  BP sold the refinery to Marathon Petroleum Corporation for $2.5 billion last year.

Wednesday, April 10, 2013

COTW: Exports Increase Amazon Deforestation

The vast majority of Amazon deforestation is caused by clearances for beef and soybean production. These charts from a new study published in Environmental Research Letters* show that 30% or 2.7billion tons of carbon emissions between 1990 and 2010 were exported in the form of beef and soy. Brazilian consumption accounts for 50% of emission attributable to soy products and 85% of emissions attributable to beef. The paper is additional research showing a global shift from subsistence agriculture to industrial commodity production.

*Jonas Karstensen, Glen P Peters, Robbie M Andrew. Attribution of CO2 emissions from Brazilian deforestation to consumers between 1990 and 2010. Environmental Research Letters, 2013; 8 (2): 024005 DOI: 10.1088/1748-9326/8/2/024005 

Tuesday, April 09, 2013

Amur Leopards Increase

credit: WWF Russia*
The beautiful and rare amur leopard appears to be increasing its numbers after a snow track census showed 48-50 individuals living in the new "Land of the Leopard" National Park and adjacent protected areas located in Primorsky Province. In 2007 only 27-30 leopards were recorded. The recently completed census also includes 4-5 cubs in the count. Leopards are spreading to new territory according to the tracking evidence. [map] Leopards populated a new area north of the Krounovka River. The discovery is evidence the cats respond to human protection since the area in Poltavsky Refuge is now under proper control by new local authorities. Also, heavy snows and an abundant hare and roe deer population encouraged a mother and her cub to inhabit a river delta previously unused by leopards. The most wide-ranging leopard left tracks on the border of North Korea. No leopard has been recorded in this region for more than a century.

The leopard census was conducted following traditional methods including measuring print size and recording position while following transects, sometimes in difficult terrain with deep snow and drifts. [photo: WWF Russia] Russian border guards provided census takers with valuable local support and knowledge of the remote region. The results are good news for a recovery program that started in 2001 to bring the amur leopard back from the brink of extinction. The crucial role in recovery played by large, connected reserves is obvious. 360,000 hectares of habitat is now protected in Russia. The next logical step is to establish a trans-national reserve that includes the Hunchun, Wangqing and Suiyang Nature Reserves in China were Chinese specialists believe 8-11 cats live. More good news is the fact that 23 Siberian tigers, double the number of five years ago, were found living among the leopard population. Biologists think the competing preditors co-exist in different habitat niches. The leopard's superior tree climbing skills trump the tiger's larger size and strength, but tigers do kill leopards on occasion. Declining prey numbers as predators increase in Primorye may become an issue for conservationists.

Monday, April 08, 2013

Exxon Threatens Reporters

credit: Michael Hibblen/KUAR
Mother Jones reports Exxon-Mobil is threatened reporters covering the Mayflower, Arkansas Pegasus pipeline spill. The spill has contaminated nearby Lake Conway with dilbit, the same diluted bitumen that would flow in the Keystone XL pipeline in much greater amounts if B. O'Drama approves it. Evacuees from the contaminated North Woods subdivision are being housed in local hotels at Exxon's expense for an unknown length of time. They are allowed brief home visits as clean up crews remove cubic yards of contaminated soil, and prepare to remove the ruptured section of pipeline.[photo] The rupture occurred on March 29th.

A reporter from InsideClimateNews.org attempted to reach EPA officials working in a command center on the scene. Unfortunately for the reporter, the command center is located on Exxon property and when she reached it on Friday an Exxon spokesperson told the reporter to leave. She was told by another Exxon employee that if she did not leave she would be arrested for criminal trespass. Lisa Song also reported that Exxon-Mobil was controlling information about the spill and that federal agencies are nearly invisible at the spill site despite reassurances from the White House press agent. Calculations about the amount spilled are being treated as proprietary information by the company since potential fines and damages will be based on the amount of spilled oil in the environment. The EPA estimates the volume now at 84,000 gallons of Wabasca heavy crude, a type of diluted bitumen from Canada's oil sands region.

Other reporters covering the story have also experienced hostile responses from the company. A radio station reporter and other reporters accompanying the state's Attorney General inspecting the site on Wednesday were threatened with arrest by sheriff's deputies if they did not leave immediately. The deputies told the reporters that "Exxon Media" did not want them there. Apparently these threats did not go down well with the press because Exxon-Mobil allowed reporters to visit the site of the rupture on Sunday. The FAA has imposed a no fly zone over the site.

Sunday, April 07, 2013

Weekend Edition: Fast Cars that Don't Pollute

Like fast cars? Like to turn heads as you cruise down Main? Are you a dinosaur from the days before Viagra? If you answered yes to any of these questions, US Person has a car for you, and it is made in the USofA! Detroit Electric unveiled its new all-electric sports car, the SP:01 [photo courtesy Detroit Electric] Housed in the historic Fisher Building in downtown Detroit, Detroit Electric said on Wednesday that its new, exclusive, zero emissions sports car has a top speed of 155mph, will accelerate to 60 mph in 3.7 seconds and has a range on one charge of about 190 miles. Those are figures to impress any petrol-head! The SP:01 (a name that does not match the car's aerodynamic looks) is the world's fastest all-electric car, weighing just 2,354 lbs because it is handmade of carbon fiber and carries a lightweight battery pack. The SP:01 also uses energy recovery by converting kinetic energy from braking into battery charge. The car shows the influence of Lotus, the English carmaker, well known for its lightweight, bare-bones two seaters. Detroit Electric was revived by Albert Lam, former CEO of Lotus Engineering Group, in 2008. Detroit Electric is no stranger to electric cars. When the electric vehicle industry was flourishing in Detroit early in the last century, Detroit Electric was a big player, setting a record for selling more electric vehicles than any other company in the 20th centrury. Even Clara Ford, wife of Henry, was a Detroit Electric customer. The company plans a limited run of the $135,000 sports car before turning out more practical but still performing electric sedans as part of the re-imagining of Detroit's nearly defunct auto industry.

Still on the subject of electric cars, Tesla's Model S was named "World Green Car of 2013" chosen by an international jury of 66 motoring journalists at the New York International Auto Show. The Model S was chosen from 21 new vehicles and won against two other finalists, the Renault Zoe and the Volvo V60 plug-in hybrid. The finalists were scrutinized by five experts specializing in the new electric vehicle technologies. According to the jurists, only two pure electric cars with sensible range have been created by the world auto industry, and both of those by Tesla, a successful start-up company.[photo credit: jujutavu] The S has superior range, seats up to seven and is fast as well, but that high technology does not come cheap. The S and other electric vehicles will have to compete with improved, lightweight, cleaner internal combustion engines and electric hybrids that some auto industry experts think will be the dominant trend in years to come. US Person joins Clara Ford in thinking electric cars are a cleaner idea, if you can afford one.

Saturday, April 06, 2013

BP Trial Update V

Judge Barbier granted Cameron International's motion to dismiss claims against it in the first phase of British Petroleum's civil trial for the Deepwater Horizon disaster. The judge stated he had not heard or seen any evidence presented that implicated the manufacturer of the blowout preventer used on the Macondo well with negligence, or that showed the blowout preventer was defective in any way. Rather, the apparent failure of the preventer to close off the Macondo well once it began gushing oil and gas implicates Cameron's sophisticated customers, BP and its rig contractor Transocean, according to the judge. These companies selected the preventer, its components, and installed them. Cameron's lawyer immediately asked Judge Barbier if he could go home once the motion to dismiss was granted from the bench, apparently greatly relieved his company would not be facing potentially four-fold punitive damages. Schlumberger's subsidiary which supplied drilling mud was dismissed from the case earlier.

Halliburton, the well services company that poured the cement well lining, is still facing liability, and presented testimony from a drilling and well manager for a Norwegian company, Statoil. Under cross examination, he discussed ten steps BP took on the Macondo operation and concluded that, "in each event, the decision that was made did result in a time and cost savings." The government's liability theory has consistently been BP took unreasonable risks by deliberately ignoring safety protocols in an effort to save money on a well that was behind schedule and over budget. According to the government's case the company's ingrained culture of profit before safety amounted to gross negligence in the Macondo operation causing the largest accidental oil spill in history. BP will begin presenting its defense next week after seven weeks of trial. It will attempt to focus some of the blame for the disaster on its two remaining contractors, Halliburton and Transocean, to avoid being assessed punitive damages under the Clean Water Act for its mismanagement of operations as well owner. Halliburton personnel mixed and poured the cement that failed to seal the well, and Transocean drillers botched a negative well pressure test that showed the well was not properly sealed. Both processes were supervised by BP employees on board the Deepwater Horizon drilling platform that was completely consumed by the ensuing fire.

Friday, April 05, 2013

'Toontime: Nuke' Em Dano!

[credit: John Deering, Arkansas Democrat Gazette]
The Son of Il known as Un is doing it Pongyang style because B.O'Drone refuses to engage him, much as would a parent ignore an unruly child begging for attention. There was an opportunity awhile ago when his father was running the country to end the sixty-year-old military stalemate on the Korean Peninsula, but the US administration did not cut a deal choosing instead to point fingers at North Korea's nuclear weapons program. Hopefully, all we will witness this time around is another puny missile test. China has got to be getting tired of its disruptive client. According to a top State Department official, China is taking a tougher stand with the hermit nation. China recently refused to send a diplomatic envoy to Pongyang, a sign of displeasure over the latest belligerent rhetoric coming from North Korea, and a development reported in the South Korean press.. Since they established diplomatic ties in 1949 the two communist countries have exchanged high level envoys once or twice a year. US Person thinks China should help restart the six party talks with the goal of signing an agreement to end the sixty-year-old war before somebody gets hurt:

[credit: Pedro Molina]

Thursday, April 04, 2013

State Department Paper Hanger Approved Peruvian Pipe

Camisea pipe slashes through forest
The State Department hired a consulting firm hand picked by TransCanada to perform the required paper hanging known as a Supplemental Environmental Impact Statement for the Keystone XL project. As readers of PNG know, that SEIS was a no-brainer for Environmental Resource Management, a group that also concluded a disastrous liquified natural gas project in Peru would have no substantial environmental impact. The Camisea II project involved a 253 mile long, 34 inch pipeline carrying liquified natural gas from the Camisea field, through the Amazon rainforest, and over the Andes to Peru's Pacific coast. The LNG is mostly exported to Mexico and the US.

The main Camisea pipeline is described by Amazon Watch as the most damaging project in the Amazon Basin, causing clear cutting of forest, major spills and displacement of native people. ERM performed the environmental assessment for an arm of the World Bank which finances development projects in what was once termed 'the third world'. The review it conducted lasted from September 2006 until January 2008 and was allegedly developed using "industry best practices". Camisea I was itself a disaster built with corroded pipe left over from Brazilian and Ecuadorian projects and welded together by untrained workers. It exploded five times in the first 15 months of existence. The spills polluted forest, killed hundreds of fish, and burned hundreds of acres of rainforest and cropland. The approximately 10,000 people living near the developement are also suffering social degradation. Camisea development has brought more river and air traffic to the remote lower Urubamba region which scares away game indigenous people hunt. Their water and food supplies are contaminated. Infectious diseases including syphilis have increased. The review conducted by ERM for Camisea II did not even mention the exploding pipeline to which it and LNG terminal would be connected. So much for pipeline co-owner Ray Hunt's boast that Camisea development will " benefit every citizen of this great country and help establish the Republic of Peru as a stable and responsible leader..." Hunt helped bribe the government to change the country's hydrocarbon law restricting exports based on domestic needs. Fifty-four million acres of the world's largest terrestrial carbon sink have been targeted for fossil fuel development by Peru.

ERM group is described as a key node in the worldwide "carbon web", a network of business relationships between oil and gas companies, banks, and the government agencies supposedly regulating them. The consulting firm's modus operandi is to use the "tobacco tactic": coordinated propaganda campaigns employing faux science to transform one-sided propositions into a farcical dispute between two sides. Enter the US State Department into the web of maintaining carbon dependency. ERM is under contract with pipeline builder TransCanada. Other clients of ERM include Koch Industries, Conoco-Phillips, and British Petroleum. In fact ERM's second in command has worked on three previous pipeline projects for TransCanada as an outside consultant.ERM had to certify to State it was not operating under any conflicts of interest before being hired to perform the Keystone SEIS. When Mother Jones unearthed ERM's profitable connections to big oil, State responded by redacting the curriculum vitae of ERM officers.

B. O'Drama is unfazed by business as usual in the hydrocarbon swamp of Washington, DC. Nor is he paying attention to the "urgent clock" of fossil fueled climate change that Senator Kerry talked about six years ago at the Council on Foreign Relations. He implied to rich supporters at the home of a San Francisco fundraiser that the Keystone Pipeline (XL for extended line, not extra large) will go ahead because "the politics of this [project] are tough", and "earth's temperature probably isn't the number one concern for workers..." Absolute hogwash from a southside Chicago huckster who presents the same false choice between the economy and the environment as the proponents of the project. Ask the evacuees of Mayflower, AK if their priorities are being served by yet another spill of corrosive, acidic, toxic and potentially flammable dilbit* [video]. Leadership is a lot about taking policy stands that are widely unpopular, but later prove to be beneficial for everyone on the planet.

*dilbitis more acidic, thick, and sulfuric than conventional crude oil; is up to seventry times more viscous than concentional crudes; contains fifteen to twenty times higher acid concentrations than conventional crudes and five to ten times as much sulfur as conventional crudes, and the additional sulfur can lead to the weakening or embrittlement of pipelines. Expert Anthony Swift's testimony to House Energy and Commerce subcommittee.

Colony Collapse Disorder Gets Worse

wild honey bee hive, Vacaville, CA: Garvey
The strange syndrome that is killing bees appears to be getting worse, and is causing farmers who rely on their pollination activity alarm. The sickness has been attributed to a number of individual causes ranging from fungi and parasites to neonicotinoids a class of commonly used pesticides. Europe is debating banning these systemic chemicals, but that action is opposed by the pesticide manufacturers and their political supporters. No action has yet been taken in the US against the use of neonicotinoids. Yet commercial beekeepers say the disease has drastically expanded this year, wiping out up to 50% of colonies needed to pollinate the nation's fruit and vegetable crops. The US Agricultural Department bee research laboratory is due to issue an assessment in May, but a USDA researcher told the New York Times the bee death rate has been "much more than it's ever been". The rising use of neonicotinoids has roughly tracked the rising bee mortality rate. The key difference between neonicotinoids and older types of pesticides is that neonicotinoids persist in the environment and are embedded in the entire plant including seeds and pollen. Bees are therefore chronically exposed to these chemicals and others such as herbicides and fungicides. A researcher at UC Davis has identified 150 chemical residues in pollen and wax gathered from beehives. Weakened bees cannot survive the winter and the winter of 2012-13 was bad for bees due to a shortage of nectar.  Transportation to far distant fields also further stresses weakened colonies.

Beekeepers transport their commercial bee workers to the groves and fields of California and other sunbelt agricultural areas in the spring. In the San Joaquin Valley 1.6 million hives were recently used to pollinate the vast almond crop. But apiarists suffered devastating bee loses. One Montana beekeeper lost 10,000 hives, and the nations largest apiary in South Dakota lost 55% of its colonies. Normally loses were around 5% to 10%. When the disease was first identified in 2005, losses increased to around a third. Now a new level of destruction appears to have been reached. Of course the destruction of pollinators means smaller harvests that will increase the cost of food. Around a quarter of the American diet depends on pollination by honey bees. Some beekeepers are taking a pass on shipping their insect workers to the Californian groves to avoid possible contamination, but farmers there are desperate to rent bees to pollinate their nuts, fruits and vegetables, paying up to $200 per hive or a 20% premium. Its not the sky falling, it's the bees, Mr Adee.

Tuesday, April 02, 2013

Omens of Keystone

credit: CheneyWatch
As if in symbolic celebration of the non-binding Senate vote in favor of the new Keystone XL pipeline, two spills of Canadian heavy crude occurred in the United States last week. On Friday an Exxon-Mobil pipeline ruptured, leaking 10,000 barrels into an Arkansas town.  Twenty-two homes in Mayflower, AK were evacuated.[photo] Exxon shut the Pegasus pipeline capable of carrying 90,000 bpd from Pakota Illinois to Nederland, Texas. Keystone, if built, would carry nine times that amount per day at operational capacity. The EPA rated the spill a major one. (>250 US barrels or 10,500 USgals)

On Wednesday a train carrying tar sands crude spilled 30,000 gallons in Minnesota. The train was a 94 car Canadian-Pacific mixed freight about a mile long. A spokesman for Minnesota Pollution Control said three tank cars ruptured when the train derailed near Parkers Prairie, MN. Transportation by rail of Canadian crude is booming as production from the vast Alberta bitumen deposits outstrips available pipeline capacity. Rail shipments of petroleum in the US rose more than 46% last year. Some experts argue that pipeline transportation is safer, but others note rail car spills are rare and offer the possibility of expanding refinery production to areas not connected to markets by pipelines.

Diluted bitumen ("dilbit") has a high specific gravity making it more difficult to clean up than conventional crude oil. US EPA is still badgering Canadian company Enbridge to clean up the 2010 Kalamazoo River spill in Michigan. Heavy rains washed the spill 35 miles downriver before it was contained. EPA wants Enbridge to dredge parts of the river above Ceresco dam to keep submerged dilbit from migrating out of recovery range. Enbridge owns the Alberta Clipper pipeline dedicated to bitumen transport that crosses the border in North Dakota and runs to Wisconsin. TransCanada owns Keystone pipeline, another one transporting bitumen, which terminates in Oklahoma. The company is already building a southern extension to the Gulf Coast. Not coincidentally, there is a loophole in the US tax code that allows oil companies to forgo paying into the spill cleanup fund when importing Canadian bitumen. Congressman Ed Markey (D-MA) has introduced legislation to close that escape route. Also last week Exxon was fined a paltry $1.7 million for the pipeline rupture that spoiled the pristine Yellowstone River in 2011 with 42,000 gallons of the toxic sludge. The CEO of Exxon probably keeps that amount of money in his desk drawer.

Monday, April 01, 2013

COTW: The Virtual Recovery

US Person believes that even Joe Sixpac now understands that there are two economies in America: the one he lives in and the one epitomized by the nightly Wall Street index quotes.  The relatively less volatile and broader S&P index recently hit a historic high, but when deflated by the 1980s' dollar, the trend line is still relatively flat. But the rich do keep getting richer, nevertheless:
Economist Gary Shilling calls the surge in stock investing the "grand disconnect", as well he might.  The increase in value is driven by cheap liquidity from the Federal Reserve, not underlying economic health. Here is Joe Sixpac's chart:
Joe ought to be concerned because the number of poor people is increasing faster than the number of non-farm payroll jobs. Another chart graphically correlates cheap money policy that benefits the plutocrats with unemployed, aging, increasingly obsolete Joe:
Low interest rates keep the US economy from contracting and boosts Wall Street, but do little to improve employment represented by the red line showing the percentage of employed persons compared to the population. That metric jumped off a cliff in 2008 and has not recovered since. This so-called recovery has helped profits before labor, a reversal of the usual recovery scenario:
As in Oz, where the Wizard controls events from behind the scenes, 'Bubbles' Bernanke and his Fed elves generate a virtual recovery with monetization of debt by buying almost all (90+%) of the US Treasury debt:
What is unsustainable usually comes to an abrupt end as it did just five years ago. US Person's advice is to follow the yellow brick road until you are not in Kansas anymore.