Olduvai Recrudescence

Posted by karlmagnus on February 09, 2006, 01:21 PM | #

Here’s my Bear’s Lair on the same subject.  I’m generally optimistic, but at much higher energy prices and consequent adaptation.  Sell suburban real estate!

Part 1

The Bear’s Lair: New Energy – and old politics
By Martin Hutchinson
February 6, 2006

About the only bipartisan cheers in President George W. Bush’s State of the Union address Tuesday came with his claim that the United States was “addicted to oil” and the inevitable proposals thereafter for various state subsidies to new energy research. Yet neither the diagnosis nor the proposed cure make sense, since they bear little relation to the realities of the market.

According to the American Heritage dictionary, addiction is defined as a compulsive physiological and psychological need for a habit-forming substance. By this definition, the United States is not addicted to cheap oil, any more than it is addicted to water or soybeans; the substance is essential to keep the economy moving, but if an alternative were found the U.S. public would be only too glad to switch to it.  The principal U.S. economic addiction is to cheap credit, an addiction fueled by the enablers of the Federal Reserve, but Bush proposed no significant remedies for THAT ailment. In considering the problem of oil however, the underlying easy money, negative-savings-rate, Federal budget deficit environment is a big part of the problem; since Americans consume far too much in general, they will consume too much oil.

The U.S. economy is not addicted to oil. The majority of affluent or comfortably off U.S. consumers have developed a lifestyle that requires a huge amount of private transportation, which in the present state of technology involves burning a lot of petroleum.  Choices have been made, notably the suburbanization of U.S. cities that began even before World War I (construction began on the Bronx River Parkway, the world’s first automobile divided limited access highway, as early as 1907 and the first section was opened in 1912.)

If cities remain compact, with development proceeding by means of apartments along major arteries, the primary means of transportation can remain bus and rail, as in Paris. With suburbanization, this becomes impossible because the size and cost of a rail or bus network of any given density expands as the square of its radius. Thus a radial subway or rail network that extends 20 miles from a city center has gaps in it, where the network is too far from much of the housing stock, and accessible only after a lengthy bus ride (generally making the total commuting time impossibly long) or with an automobile commute to the station.  At that point, the automobile becomes essential, and whining about oil “addiction” becomes equivalent to whining about the public’s incessant demand for food and drink.

Complaining about the U.S. addiction to oil is largely a cultural statement, akin to warning of global warming, by which the speaker’s credibility at leftist metropolitan cocktail parties can be assured.  It is backed wholeheartedly by the global media, most of whom reside in city centers, use automobiles only sparingly and refer to suburbanites among themselves as “bridge” or “beyond the Beltway” people.  It is notable that oil company profits, most of which accrue to shareholders, are regarded with much more horror by the media than tech sector profits, much of which are embezzled in one way or another by that sector’s overpaid management.

This anti-oil snobbery has over the years had damaging effects on the U.S. economy.  It was responsible for the Corporate Average Fuel Economy standards of the 1980s, which forcibly downsized U.S. automobiles through regulatory fiat, left the automobile market vulnerable to imports, and resulted in the invention of the immensely ugly and slightly dangerous Sport Utility Vehicle, which was through regulatory quirk exempt from the controls. The financial decline of Detroit was a direct result of CAFE; which placed the U.S. industry at a disadvantage to imports for decades because its fleet mix was affected more harshly by CAFE standards.

Conversely, anti-oil snobbery has perversely prevented the United States from taxing petroleum products at levels comparable to other countries.  The unholy glee of the chattering classes in their attempts to make it more difficult for the non-urban to drive large cars and commute to work was noticed by the voters, who correctly took the view that more than financial motivations were involved. Thus increased gas taxes have always been deeply unpopular – far more so than their equivalent in general sales or other taxes.

Posted by karlmagnus on February 09, 2006, 01:23 PM | #

Bear’s Lair part 2 (damn length restriction):

Bush’s State of the Union address was clearly written for cocktail party consumption, rather than as a rational contribution to policy.  State funded “research” at which money had already been thrown in large quantities by the Energy Policy Act of 2005 was further increased by 22 percent. No major advance has ever resulted from state funded research in the energy sector but hey, there’s always a first time!  Bush also announced the Administration’s goal of reducing U.S. oil imports from the Middle East by 75 percent by 2025—at current 21st Century rates of progress that’s 10 major terrorist attacks, 8 invasions, 6 nuclear weapon panics and 3 oil supply crises from now, but the thought’s a good one.

Notably absent from the speech were references to Canadian tar sands, Colorado oil shale and drilling in the Arctic National Wildlife Refuge, all of which can be expected to make important contributions to U.S. oil self-sufficiency if allowed to do so by Congress and the environmentalists. Opposition to ANWR drilling, in particular, is a sign that the conversation has degenerated to the cocktail party level; when opponents of ANWR tell you that ANWR oil would supply U.S. oil needs for only 13 months, they omit to point out that a more likely usage pattern is to get 5 percent of U.S. needs for the next two decades, a much more strategically attractive prospect.

Even more than by their refusal to drill in ANWR, the economic un-seriousness of the U.S. political class is demonstrated by their pretence that ethanol, the favored alternative to petrol, must come from corn, wood stalks, soybeans or some other crop grown safely within the United States, preferably in the key Presidential caucus state of Iowa, and therefore to be subsidized in return for campaign contributions. No mention was made of the sugar-cane derived ethanol program in Brazil which supplies 40 percent of Brazil’s vehicle fuel, at a price less than half that of gasoline, compared to the price of corn-grown ethanol that is only just competitive with gasoline at today’s price of nearly $70 a barrel.

The United States could reduce dependency on the Middle East by importing sugar-cane derived ethanol and save money doing so, even after deducting the cost of retrofitting car engines.    Sugar cane is grown in hot, wet tropical countries, not in Iowa (except at exorbitant cost) but there are a whole host of such countries available, in the Caribbean and the northern reaches of South America, only one of which, Venezuela is a significant oil exporter—in some cases, such as Haiti, the United States is committed to propping the place up anyway.

Ethanol burning in automobiles is even held by environments to be helpful as regards global warming – the rationale is that although ethanol, like gasoline, is a hydrocarbon the burning of which releases carbon dioxide, growing the sugar-cane involves the absorption of atmospheric carbon dioxide, and so the loop is closed.  This is typical cocktail party arithmetic; it involves assuming that the land where the sugar-cane grows would otherwise be an arid wasteland devoid of plant life. However, if we can avoid environmentalists passing fatuous treaties hindering a partial switch to sugar-cane ethanol, a useful solution to the U.S. energy supply problem, let’s not nitpick their logic.

The strategic problem with oil is not that it has to be imported, but that it has to be imported from a relatively small group of countries, most of which are both corrupt and intrinsically somewhat hostile to the United States. Since oil production requires a large concentration of capital equipment, under extraction agreements with the host government, oil revenues tend to produce massive corruption of government officials, wasteful prestige projects and arms buildup rather than genuine economic development. Sugar-cane, on the other hand, is intrinsically a private sector crop, requires only modest capital investment and is fairly labor intensive even with modern cutting technology. Hence growth in the sugar-cane sector is likely to help development and facilitate the growth of a stable middle class in countries of the Caribbean, Central America and northern South America for which the United States has always taken a fatherly interest.

There’s a reason for the absence of sugar-cane from Bush’s speech: the demands of domestic U.S. politics. Sugar-cane growers in the Caribbean and South America are unlikely to provide significant campaign contributions, so are not a favored class.  Indeed, sugar imports to the United States are currently regulated by the “Global Refined Tariff Rate Sugar” program, which prevents significant competition to coddled domestic sugar producers.  Needless to say, domestic sugar producers ARE major campaign contributors, particularly in the key state of Florida. 

“New Energy” technologies offer significant promise of replacing part of our oil consumption, and indeed must do so if we are not to suffer increasing scarcities, higher prices and eventually a shortage of this essential fuel.  Nuclear energy and clean coal are important parts of the answer, but for wholesale power generation not transport.  Fuel cell technology is promising, but the gasoline consumption figures of the “hybrid” Toyota Prius and its competitors appear to bear little relation in practice to those achievable in theory. Wind power is very ugly and intrinsically limited in scope, while solar power suffers from the problem that photovoltaic cells tend to overheat – hence the largest solar array in 2005 was in Leipzig, Germany, not generally thought of as a sun-seeker’s paradise. Conservation can also help, but is most effectively encouraged by the European method of high taxes on gasoline rather than by command and control edicts from politicians. 

The New Energy sector is not short of private funding; its “cocktail party” popularity and the pressure of the Kyoto climate change agreement has produced an ever increasing devotion of resources to research, and a huge boom in speculative investment in the last couple of years. Private equity investments alone in the New Energy sector (excluding investments by existing corporations or government or fund-raising by publicly listed companies) totaled more than $1.6 billion in over 150 transactions in 2005, double the level of the previous year.

As always with such explosive growth, much of the development in the sector is ill thought through. Indeed the popularity of the sector appears to be producing yet another bubble, and has undoubtedly attracted many sharp operators and indeed outright crooks.  A boom/bust cycle appears to be inevitable, which is a pity because it could set back genuine progress in the field for a decade.

Price signals from the market and the “cocktail party” credibility of New Energy will produce oil-replacing developments at a rapid pace provided government does not impede the progress.  More important than “New Energy” itself, existing technology, both to extract oil reserves from Canada and Alaska and to produce ethanol economically from sugar cane, offers most if not all the additional energy sources we need to avoid over-dependence on the unstable Middle East. 

Only politics can cause a crisis but as usual, politics appears to be driving government firmly in the direction of obstruction, waste and economic illiteracy.

—
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that, in the long ‘90s boom, the proportion of “sell” recommendations put out by Wall Street houses declined from 9 percent of all research reports to 1 percent and has only modestly rebounded since. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)
—
Martin Hutchinson is the author of “Great Conservatives” (Academica Press, 2005)—details can be found on the Web site www.greatconservatives.com

Posted by The Realist on February 09, 2006, 01:36 PM | #

Oil self-sufficiency, plus the growing preponderance of Arab Americans over American Jews among the electorate, undermines the case for the U.S. to go on propping up Israel and trying to divide and rule the Muslim Middle East. So it will be instructive to see if any neoconservative propaganda operations gear up designed to pour scorn on the case for fuel autarchy as part of the general war on American ‘isolationism’, i.e. minding your own business and not letting your boys get killed 6,000 miles from home.

Posted by Ben Tillman on February 09, 2006, 03:03 PM | #

Fellow clever animals, what should we do about it?

Liberate those who build from those who destroy.

Posted by Søren Renner on February 09, 2006, 03:24 PM | #

Mr. Tillman:
    If I follow you, you are hinting that if Duncan is right about world population in 2030, then it very much matters exactly who those 2*10**9 are. Am I on the right train?

Posted by Matra on February 09, 2006, 04:38 PM | #

Martin Hutchinson:

Notably absent from the speech were references to Canadian tar sands

In Canada there’s been a bit of a modern day gold rush when it comes to investing in Alberta’s oil sands. Its promoters would have us believe it’s going to save the world. It certainly helped save a lot of financial portfolios last year and I’m hopeful its excellent performance will continue.

A concern though is the Kyoto agreement. Oil sands production apparently leads to more greenhouse gas emissions. The previous Liberal government signed up to it though never developed a plan to meet Canada’s targets. Perhaps they were just planning to pay countries with emissions credits for our extra emissions.

Alberta wants to ditch Kyoto as does the new Conservative minority government which won every single seat in the oil sands rich province.  Unfortunately the other political parties are supporters of Kyoto especially the Bloc Quebecois who hold the balance of power in parliament. The hydro electricity industry in Quebec is powerful and it stands to gain from Kyoto as it is a cleaner source of energy.

It’ll be interesting to see how the new government will handle the Kyoto issue.

Posted by JW Holliday on February 09, 2006, 05:04 PM | #

KM: “If cities remain compact, with development proceeding by means of apartments along major arteries, the primary means of transportation can remain bus and rail, as in Paris. With suburbanization, this becomes impossible because the size and cost of a rail or bus network of any given density expands as the square of its radius. Thus a radial subway or rail network that extends 20 miles from a city center has gaps in it, where the network is too far from much of the housing stock, and accessible only after a lengthy bus ride (generally making the total commuting time impossibly long) or with an automobile commute to the station.  At that point, the automobile becomes essential, and whining about oil “addiction” becomes equivalent to whining about the public’s incessant demand for food and drink.”

All discussions about “suburban sprawl”, “too long commutes”, “ever-expanding cities”, and “wasted fuel for all these long commutes” of course always ignore the 800 lb. goriila in the room: race.  American cities cannot be “compact” without separatism or legally allowable segregation.  Contrary to Sailer’s fantasies, white Americans want as little to do with their colored “co-citiizens” as possible.  Sure, there is a bit of “gentrification” taking place here and there, but the overall reality and trends over time has been for whites to flee non-white areas, followed by the non-whites filtering into the new white areas (often aided by government-enforced integration and “low income housing”), followed by the whites moving even further away, and the cycle continuing until people have 90 minute commutes, or more, in one direction.

The bottom line is that American cities are heavily “minority” while the suburbs are more heavily “majority” and if the jobs are in the cities, people will commute.  They won’t live there if they can at all help it.  As the cities continue to degenerate, employment will become more decentralized, and jobs will move to more livable areas.

But, given the government’s real addiction to enforced integration and affirmative action, these livable areas and jobs will remain of a satisfactory character for a relatively short period of time.  Thus, housing and jobs will become ever more spread out as people flee the “diversity” that they often pay lip service to.  And this “diversity” is in large part responsible for America’s “addiction” to oil, because white flight around major urban areas is dependent upon the automobile.

What happens when all the good ecological niches become hostile to whites?  What happens when flight is no longer an option?

Posted by karlmagnus on February 09, 2006, 10:08 PM | #

Fred no, it’s class as well as race.  One goes to the suburbs to avoid the lower orders and the underclass, of whatever ethnic stock.  When my parents moved from central London to Pinner in 1950, there had been essentially no foreign immigration to the UK, but Pinner was still safer and quieter.

Posted by karlmagnus on February 09, 2006, 11:08 PM | #

Personally, about 75/25 the other way, but there you are.

Posted by Guessedworker on February 10, 2006, 04:08 AM | #

I was partly educated among working class people and have, through various work and leisure interests in my life, come into contact with them more or less continually.  My mother was certainly born into the working class, being one of the twelve children of a craftsman.  They lived over a butchers shop, those still young enough to be at home sleeping three to a bed.

I have a deep regard and love for the working class, recognise them in taste and habit for what they are - they can be pretty awful! - and feel perfectly at ease in their company!!  I don’t think this is reciprocal, btw.  But I am the product of a middle-class upbringing and, accordingly, have no desire to live permanently among them.  The quiet civilities of middle-class existence are far more agreeable to me.

My experience of blacks is limited to my frequent returns to London.  It is, though, quite distinct from my experience of the white working class.  SSA’s are not my people.  It is impossible for me to feel a connectivity to them or to want to share any part of their existence.  From what I can see there is no trust, no respect, no real liking between white and black.  The relationship appears to be predicated on the one hand on white suggestibility and a desire to be magnanimous and, on the other, on a lack of choice.

There is, for me, no comparison at all between the desireability of living among one’s own kind, of any class, or among aliens.  The percentage is 0.01% - 99.9%, or wider than that.

Posted by Andrew on February 10, 2006, 04:41 AM | #

I have to disagree, White fleeing from crimes of unmanageable devastation, is not fleeing, we are what are called Refugee’s, and we are running out of places to seek refuge , (Sudan is looking good) Or- the boat is sinking faster than we can bail the water out.
Rand had it right, Looters Witch doctors and Attila’s, Thinkers and Intelligent non lobotomized must muster, the others will kill them selves off.

Posted by JW Holliday on February 10, 2006, 05:25 AM | #

I see that our esteemed Karl hasn’t a clue as to the reasons behind white flight and the reasons why “compact” American cities are impossible.  It’s race.  His own personal preferences for “class” are irrelevant.  We are not asking what he would do, we are instead looking at the actual trends in America.

Whites do not want to live among, or send their children to schools with, “smart successful” Asians either.

Class, my ass.  It’s race, always is, has been, and will be.

Posted by jlh on February 10, 2006, 05:38 PM | #

All discussions about “suburban sprawl”, “too long commutes”, “ever-expanding cities”, and “wasted fuel for all these long commutes” of course always ignore the 800 lb. goriila in the room: race.  American cities cannot be “compact” without separatism or legally allowable segregation.  Contrary to Sailer’s fantasies, white Americans want as little to do with their colored “co-citiizens” as possible.  Sure, there is a bit of “gentrification” taking place here and there, but the overall reality and trends over time has been for whites to flee non-white areas, followed by the non-whites filtering into the new white areas (often aided by government-enforced integration and “low income housing”), followed by the whites moving even further away, and the cycle continuing until people have 90 minute commutes, or more, in one direction.

That’s absolutely right. Suburban sprawl in America is a function of the breakdown of discipline by the white majority over the break underclass. If you’re not going to enforce segregation and serious law enforcement, then escape is the only politically viable option—at least until the cheap oil runs out.

Posted by jlh on February 10, 2006, 05:39 PM | #

sorry, that’s black underclass

Posted by john rackell on February 10, 2006, 06:41 PM | #

But why are whites moving to the least viable parts of the country - the Southwest deserts of scarce water, marginal agriculture and scorching heat - they really are walking to the end of a very fragile branch. When the bough breaks heaven help them. A dumb move.

Well, back to reading the ‘Long Emergency’

Posted by Phil Peterson on February 11, 2006, 05:04 AM | #

A fascinating discussion.

Both Martin and JW are right. Martin’s hypothesis is partly true for Britain but it wouldn’t apply to America in my opinion. The fact is that it isn’t the working class in Britain that is the worst, it is the white underclass (among the various income groups among whites). GW averred to a preference for living in white middle class environs although liking the working class. I am sure this still applies but it would not apply to the white underclass which has really been degraded to an unimaginable degree.

But Martin’s points don’t apply to the US from what I have seen. It may apply to a limited extent to Americans who are extremely rich. But given the fact that the vast majority of American millionaires made it in one generation, I doubt if there is such an aversion to living with middle class whites among them. So perhaps the only people to whom Martin’s theory would apply would be whatever remains of the old WASP upper class - and that is a tiny minority we are talking about.

Posted by martin on February 13, 2006, 06:08 PM | #

Fred Scrooby is 100% right when he says:

” They [blacks] ruin it, creating conditions impossible for white people to live in unless they’re wealthy and can insulate themselves and even then they lead disgusting lives.  A city’s infrastructure needs are doable if the city is white.  If it’s not, all its finances get sucked down into the bottomless black pit of urban multiracialism never to be seen or heard of again. “

With a white population, working class or otherwise, more or less anything is possible. With a significant black minority, nothing is possible. One can see this in the Inner London schools.  Those schools that have a significant number of blacks (all of them) are finished, there is no hope. All the “fresh starts"in the world will make no difference.