SUGGESTED ANSWERS TO THE SHORT QUIZ

[johnkarls]

.
SUGGESTED ANSWERS TO THE SHORT QUIZ (aka THIS MONTH'S "POT STIRRERS")

*****
EDITORIAL COMMENTS:

As a former volunteer fund raiser for The U.N. Environment Programme ("UNEP") at the personal request of the U.N. Under-Secretary General for the Environment, I certainly don't relish commenting negatively on Repetto's positions, particularly not now that he is acting as a quasi-UN official (the UN does not appear to be taking any issue with Ted Turner's so-called UN Foundation which employs Repetto) in flagellating a member country, but Repetto strikes me as "over the top"!!! It's one thing to always have in your back pocket a "wish list" of projects that could be implemented if the funding were available BECAUSE YOU NEVER KNOW WHAT WILL STRIKE THE FANCY OF A PARTICULAR POTENTIAL MEGA-DONOR!!! But his book is quite another matter!!!

In addition, Repetto is guilty of fraud.

On pages 22-23, Repetto claims that bio-fuels such as ethanol do NOT produce carbon gases that result in global warming!!! Thereafter throughout the book, Repetto treats "fossil fuels" (oil, natural gas, coal, etc.) as synonymous with "greenhouse gas" ("GHG") generators, and "renewables" (wind, solar, etc., BUT INCLUDING BIO-FUELS!!!) as synonymous with non-GHG generators!!!

On pages 22-23, Repetto is praising Brazil for requiring all of its vehicles to run on a combination of 15% gasoline and 85% ethanol produced, not from corn as in the U.S., but from sugar cane. Since the energy value of ethanol, whether produced from corn or sugar cane, derives from its sugar content, the chemical formula for burning (aka oxidizing) that sugar (C6H12O6 + 6*O2 > 6*H2O + 6*CO2) is identical to burning/oxidizing coal or fuels produced from crude oil!!! [Of course the formula for oxidizing natural gas/methane which is CH4 = CH4 + 2*O2 > CO2 + 2*H2O.]

THE ONLY OBJECTIVE SERVED BY BRAZIL'S 85% USAGE OF ETHANOL IS ENERGY INDEPENDENCE (WHICH BRAZIL DID IN FACT ACHIEVE) -- AND THE CORRESPONDING SOLUTION TO THE PROBLEM OF BALANCING ITS IMPORTS/EXPORTS. ETHANOL USAGE DID NOT "MOVE THE NEEDLE" ON GREENHOUSE-GAS GENERATION IN BRAZIL!!!

Throughout the book, Repetto makes frequent references to (1) increasing ethanol in U.S. motor fuels to the same 85% standard, but (2) substituting for corn whose usage deprives the world of food, other non-food crops such as "switch grass" that can be grown on land that is not suitable for raising food crops -- and endorses the result as Nirvana and opines that this is where the U.S. is headed anyway!!!

I have claimed this is fraud!!!

The only other explanation is ignorance. However, even someone whose training is economics rather than science cannot claim to be ignorant about the basic topic (greenhouse-gas generation) of his book.

Repetto devotes a whole chapter (his book has only seven plus a conclusion) to the U.S. Government being "the best that money can buy" though the bribery of (and extortion by) our pols is labeled "campaign contributions" -- a topic we already studied for our 2/14/2008 meeting three years ago when we focused on the books of long-time Washington Post columnist Dana Milbank and long-time Business Week columnist Robert Kuttner.

Since Repetto is so quick to criticize American politicians for calling their bribes/extortion "campaign contributions," it would seem only fair to question whether Repetto's position on 85% ethanol for the U.S. is based on having a secret Grand Cayman bank account for accepting bribes for which no "fig leaf" is available.

*****
SUGGESTED MODUS VIVENDI

Repetto's book is full of useful information. And his basic theme is that the U.S. should adopt President Obama's $1.75 TRillion (over the first 10 years) "cap and trade" tax on carbon-pollution permits issued by the U.S. Government, a proposal President Obama abandoned after it was rejected in 2009 by Democratic Senators from the Midwest who insisted that any such scheme include India and China, and who insisted that requirements placed on India and China be enforced with trade sanctions.

Accordingly, I would suggest that everyone read Repetto's book making notes on his good points and his gaffes (of which there are many). And we'll compare reactions and decide what action to take on July 13th.

For example, Repetto devotes an entire chapter (of which, as previously noted, there are only seven) to arguing that the mechanism for imposing the "cap and trade" tax in the U.S. should be imposing it "up stream" on the producer of domestic oil & gas or coal, and on the importer of foreign oil & gas or coal (there may be some coal imports from Canada). He lists two reasons for spending so much of his book on this point = (1) he thinks it is easier to ensure nothing escapes the tax, and (2) he thinks it is easier to hide the tax from the gaze of the American electorate.

First, Repetto is naïve to think that opponents of the "cap and trade" tax will not continue to trumpet the $1.75 TRillion tax cost, even after passage.

Secondly, Repetto ignores the fact that European-style value-added taxes ("VAT") have no trouble capturing everything. [A value-added tax is economically the same as a national sales tax but it is collected at each stage of production -- for example, a typical 20% European value-added tax would be paid by the consumer the same way as a 20% sales tax, but the retailer files a report with the European tax authorities accompanied by a payment of the 20% tax collected from customers less a credit for the 20% VAT it paid to its suppliers, with everyone else in the chain filing reports and making payments of 20% less a credit for VAT paid to their suppliers.}

Thirdly, Repetto ignores the fact that a VAT system permits a different rate (or a zero rate) to be imposed on certain items or categories of items. Most of us who have ever traveled to Europe know that VAT is typically refunded to foreigners upon their departure and we fret over whether the VAT refund is worth the trouble to keep the receipts and the time to visit the VAT office at the airport before our plane departs.

However, the ability to impose different rates (or a zero rate) can be very important in exempting, for example, groceries (at least basic items which might not include caviar). THIS ABILITY WOULD BE IMPORTANT IN EXEMPTING THE U.S. CHEMICAL INDUSTRY SINCE VIRTUALLY ALL OF ITS CHEMICAL PRODUCTS ARE MADE FROM PETROLEUM BUT NONE OF WHOSE PRODUCTS GENERATE CARBON DI- OR MON-OXIDE.

THOUGH (FULL DISCLOSURE) SOME OF THE MOST IMPORTANT CHEMICALS, BOTH IN TERMS OF REVENUE AND IN TERMS OF NATIONAL WELL-BEING, ARE NITROGEN FERTILIZERS -- AND NITROGEN FERTILIZERS ON FARMERS' FIELDS DO PRODUCE NITROGEN OXIDES IN THE ATMOSPHERE WHICH ARE 30-40 TIMES AS DAMAGING A GREENHOUSE GAS AS CARBON DI- AND MON-OXIDE. SO PERHAPS A "CAP AND TRADE" VAT ON NITROGEN FERTILIZERS SHOULD BE IMPOSED AT A HIGHER RATE THAN OUR REGULAR "CAP AND TRADE" RATE OF VAT ON OTHER PETROLEUM PRODUCTS AND COAL, WHILE OTHER CHEMICALS ENJOY A ZERO RATE.


*****
SUGGESTED ANSWERS TO THE QUIZ

Question 1

What/who is/are the world's largest carbon polluters?

Answer 1

A good case could be made for animals generally and, in particular, human beings and the animals raised for their food supply.

Question 2

If we environmentalists continue to oppose everything, who will we task with informing much (if not most) of the world's mushrooming population that their lives will have to be terminated in order to reduce global warming because human beings emit too much carbon dioxide?

Answer 2

No politician or news-media superstar will ever accept the assignment!!!

Question3

Who was the head of the American delegation at Kyoto?

Answer 3

Vice President Al Gore.

Question 4

What negotiating restrictions were imposed on him before he left for Kyoto by a 95-0 vote of the U.S. Senate, which would have to ratify any treaty?

Answer 4

The Senate voted 95-0 that Al Gore should not agree to anything which exempted India or China. And the Senate voted 95-0 that Al Gore should not agree to anything that impacted adversely the U.S. standard of living.

Question 5

Because of his defiance of these restrictions (Al Gore agreed to exempting both India and China, in addition to an overall program that would, according to the econometric model of the U.S. Department of Energy, have reduced the U.S. standard of living by 30%), how many years remained in the Clinton Administration during which President Clinton refused to send Kyoto to the Senate for ratification?

Answer 5

More than three years!!! Kyoto was negotiated in 1997, shortly after Bill Clinton's January 1997 inauguration for his second term.

Question 6

Has cap-and-trade been a success in Europe?

Answer 6

No.

Question 7

Why has cap-and-trade been such an abysmal failure in Europe?

Answer 7

Because Kyoto's cap-and-trade rules permitted the acquisition of "carbon-pollution rights" from other countries.

Kyoto required each participating country to reduce its greenhouse-gas emissions by 2010 to 95% of its 1990 level.

Since the Russian economy had collapsed after 1990, Russia had virtually-unlimited "carbon-pollution rights" to sell under Kyoto -- at least until the Russian economy recovered which did not seem likely for a considerable period.

[Indeed, cynics always remarked that Kyoto was little more than a European foreign-aid program for the old Soviet Union that could be sold to voters under a fraudulent label but that, nonetheless, was essential to implement in order to cushion the collapse of the Russian economy and avoid slipping back into the Cold War.]

In recent years as the cost of "carbon-pollution rights" has increased, European businesses have simply hired more staff to scour the third world for unused "carbon-pollution rights" -- but the Kyoto cap-and-trade concept which includes such a gaping loophole originally designed for Russian aid, has not curtailed carbon pollution in Europe.

Question 8

Why was President Obama's cap-and-trade proposal defeated by a bi-partisan revolt in Congress?

Answer 8

As an initial matter, President Obama's cap-and-trade proposal did NOT feature a Kyoto-style gaping loophole for acquiring "carbon-pollution rights" outside the U.S. [The reason why it didn't was that President Obama wanted to raise gargantuan amounts of tax revenue by having the Federal Government create AND SELL "carbon-pollution rights" (much like the Federal Reserve prints money) following which the government-issued rights could be traded by private companies.]

However politicians, particularly Democrats in the Midwest where electricity-generation plants are virtually all coal-fired, quickly realized that the C&T "tax" would put the Midwest at a competitive disadvantage both with regard to other areas of the country and with regard to foreign countries.

It just proves the old maxim that politicians "can't fool ALL of the people ALL of the time"!!! [Though, of course, they never stop trying!!!]

Question 9

How many coal-fired electricity-generation mega-plants does China construct per day?

Answer 9

One per day, on average.

Question 10

Who is in favor of invading China to prevent them from building coal-fired plants?

Answer 10

Nobody in her/his right mind!!!

Question 11

Is there likely to be a solution to global warming that is not economic?

Answer 11

No, unless invasion armies should suddenly materialize!!!

Question 12

How much of the world's oil production would be shut in if the world price for oil were cut in half by competition from a new non-carbon power source? By 75%?

Answer 12

Most environmentalists make the mistake of thinking that wind, solar, etc., need only become competitive in terms of the current price of crude oil.

In contrast as we have studied several times during the existence of our group, there has been a constant war within the Organization of Petroleum-Exporting Countries ("OPEC") ever since it began setting world prices in the early 1970's. That war is between Saudi Arabia which has oil reserves that will last decades if not centuries, and other OPEC members which have reserves that will last only a few years and would like to gouge as much as possible in the short term.

[Digressing briefly, Saudi (rather than OPEC) is really the setter of market prices because Saudi has always had tremendous production (three times the amount of any other OPEC member and 10%-30% of world production) and, more importantly, because it has almost always been willing to shut in production in order to make OPEC prices stick.]

The constant war has stemmed from Saudi's unwillingness to support OPEC prices that are so high that alternative forms of energy become economic -- which would mean that Saudi's remaining decades/centuries of reserves become relatively worthless. Accordingly, we have witnessed for four decades and counting nothing more than "a tease" from Saudi's constant pegging of world prices at levels designed to prevent the development of alternative forms of energy.

By the same token, if wind, solar, etc., did become cheap enough to begin to make a significant dent in the world demand for oil, Saudi has considerable latitude to lower world prices to prevent widespread economic use of solar, wind, etc.

However, if Saudi were forced to do so, it would begin to "eat the lunch" of high-cost oil producers as well as "eat the lunch" of solar, wind, etc. And Saudi, in theory, shouldn't really care that much about the relative composition of its lunch.

In this regard, it is noteworthy that in the Age of Nationalizations that has prevailed since the end of World War II (aka the Age of Renunciation of "Gun Boat Diplomacy" to enforce "The Rule of Law"), worldwide oil production HAS NONETHELESS TRIPLED since President Jimmy Carter took the Malthusian view 35 years ago that world oil production was destined to decline perpetually.

The reason, despite the constant threat (and frequent actuality) of nationalizations, is technology. First, consider the fact that 75% of the earth's surface is water and that crude oil tends to be found where lived the pre-historic organisms whose decayed bodies comprise petroleum and coal (which is why they are called "fossil" fuels) = the world's oceans and its land areas that were once covered by water. Although technology has unlocked the petroleum deposits in off-shore waters and then the "outer continental shelf" ("OCS"), approximately 75% of the world's petroleum is still waiting for deep-ocean drilling technology to develop.

Secondly, as we have also studied over the years, only a very-small percentage of crude oil present in a reservoir can be produced under the best of circumstances (please see Q&A-19 below for a brief discussion of oil & gas exploration & production). Production rates are often single-digit for heavier grades of crude.

Indeed, one of the most fascinating oil & gas auctions ever held occurred in the 1970's when Shell Oil bid approximately $50 billion (in 2011 dollars) for the Bell Ridge Oil Company when all of the other bids were clustered around $30 billion!!! When "the smoke cleared" everyone was amazed by the implications of $20 billion "left on the table" since Bell Ridge Oil Company represented heavy oil on the old Bell Ridge Ranch in Southern California. The cluster of bids around $30 billion reflected the then current technology of an approximately 4% recovery rate for heavy oil. And $50 billion implied a 6.7% recovery rate. Though "the buzz" was that Shell had been willing to leave so much money on the table because they had obviously secretly developed technology that would permit a double-digit recovery rate and they were desperate not to be out-bid by anyone else who might also have secretly developed better technology. From their perspective, they might have left $20 billion "on the table" for a prize that, with their technology, was probably worth more than $100 billion.

A footnote on hydraulic fracturing.

Since it is the reason for America's becoming the Saudi Arabia of natural gas!!!

It is geological formations comprising shale that are being fractured. The brief Q&A-19 discussion of oil & gas exploration & production describes the search for a piece of "wet salami" = a geological layer sandwiched between two or more formations that are impervious to oil & gas but within which oil & gas can exist and through which it can migrate (for example, sandstone relative to which oil & gas can exist and migrate similarly to the way water exists and migrates through sand at the sea shore).

Shale is an example of a geological layer within which oil & gas can exist, but through which oil & gas can NOT migrate. Recently-developed technology comprises hydraulically pulverizing the shale in place in order to unlock the gas.

SORRY FOR THE DIGRESSIONS!!!

ENOUGH ALREADY ON BACKGROUND FOR THE ANSWER TO Q-12!!!

Which was necessary because nobody collects industry-wide information on Q-12!!!

So only speculation is possible!!!

But please forgive a brief theoretical discussion on the elements of the economic decision to abandon an oil & gas field.

The amount of up-front costs (lease-acquisition costs, drilling, etc.) are irrelevant because they are non-cash or "sunk" costs -- unless their write-off at abandonment can produce a tax savings. The primary focus is on incremental cash costs of continued production vs. the revenue from that production.

Most of the producing areas in the Middle East have miniscule "lifting costs" vs. value. Even so-called "high cost" areas in the North Sea or the U.S. Gulf Outer-Continental Shelf feature relatively-insignificant "lifting costs" compared to value, because it was the up-front "sunk" costs that were so high.

The prime candidates for being shut in are the secondary- and tertiary-production formations since both secondary and tertiary entail high incremental costs.

The best historical data comes from the U.S. in the late 1970's when President Jimmy Carter tried to shield the U.S. from OPEC's quadrupling of the world oil price in 1973-1974 followed, in short order, by a further doubling of that price. He forced domestic producers to subsidize importers!!! But within 3 years the U.S. had to abandon that program because of pressure under GATT since Europeans were complaining about unfair competition from U.S. petrochemicals which were being produced from "bargain crude oil"!!! [It's one thing to subsidize American voters, but another thing to subsidize foreigners!!!] So President Jimmy Carter de-regulated U.S. crude-oil prices but immediately imposed a so-called Windfall Profit Tax on domestic oil production which remained in effect 1979-1988.

Because of President Carter's Malthusian interference with market forces, very little new domestic oil & gas supplies came on stream. And before the windfall-profit tax was eliminated, a very high percentage (more than 50% if memory serves) of U.S. production had declined to "stripper well" status = fewer than 10 barrels/day/well. Stripper wells are virtually all secondary- and tertiary-production whose incremental costs are a very high percentage of revenue.

Two observations.

Eliminating secondary- and tertiary-production in the U.S. (since our domestic drilling policies have been as restrictive as they ever were under President Carter, forcing oil companies to explore elsewhere in the world), would presumably have a huge favorable impact on global warming. Since incremental costs, particular fuel costs associated with secondary-production, involve burning considerable amounts of fuel oil (aka diesel) to power pumps. However, doing so would also have a tremendous negative impact on America's oil imports and foreign balance-of-payments (aka foreign borrowing by the U.S. Government).

Secondly, as suggested earlier in this answer, President Jimmy Carter's Malthusian view of world-wide oil & gas potential is silly. Yes, in theory the supply of oil & gas is finite, just like the supply of any kind of rock or metal is finite. But that should not mean that the U.S. should, for example, ban the use of granite in the construction of office buildings. Unless the use of granite produces carbon gases (or has other undesirable side effects), we should continue to use it until we are actually forced to find substitutes -- not use substitutes to preserve in the ground immense amounts of granite.

The bottom-line conclusion???

Unless we want to play "cat and mouse" with Saudi for another 40 years, we should recognize that profit-making companies will never be able to develop alternative forms of energy with Saudi pulling the economic rug out from underneath whatever they develop.

This is like the pre-9/11 inspection of airline luggage!!! When competitive cost-cutting by the airlines (a classic competitive "race to the bottom") resulted in virtually no inspections whatsoever!!!

In other words, this is a job for government!!! Just like society is forced to have government conduct the inspection of airline luggage to ensure that there actually are inspections, society should recognize that it is forced by Saudi to conduct the research and development of alternative forms of energy because the Saudis are capable of playing "cat and mouse" with profit-making enterprises for centuries, not merely decades!!!

Question 13

Ditto for coal?

Answer 13

The coal industry is notoriously impervious to world oil prices!!!

And please permit me to explain before you all send me a lot of e-mails!!!

Both the world-wide and U.S. domestic coal industries have virtually unlimited supplies relative to demand levels. The reason, of course, is that coal is "dirty" environmentally. So coal producers constantly play a "game of chicken" on under-pricing competitors to supply the relatively-small market for their product (small relative to supply).

This can be seen by comparing both the world and U.S. domestic prices for coal to the BTU-equivalent price for oil. Only a very small portion of the discrepancy is explained by inefficiencies in handling coal vs. oil & gas. Most of the discrepancy is explained by the few and dwindling uses for coal relative to its supply.

Accordingly, reductions in the cost of solar, wind, etc., will have to be much more dramatic than the amounts required to compete with oil & gas, before they begin to make a dent in coal usage.

Question 14

What is our author's position on nuclear energy?

Answer 14

He has no particular problems with it, other than the disposition of spent fuel rods. He is typically "pie in the sky" in saying that the U.S. should proceed "full speed ahead" with the Yucca Mountain depository -- after recognizing that it has been closed by President Obama at the request of Senate Majority Leader Harry Ried's 2010 re-election staff.

At least our recent six-degrees-of-separation e-mail campaign recognized that President Obama and Harry Reid will not change their minds, and recommended that the U.S. follow the rest of the world in re-processing our spent fuel rods and providing the same kind of security for any resulting weapons-grade fuel at our electric utilities that the U.S. military routinely provides for more than 10 times the number of locations at which it has actual nuclear weapons.

Question 15

What is our author's position on banning plug-in electric vehicles (as distinguished from hybrids which generate their own electricity from the waste heat of their gasoline engines) until the last coal-fired electricity-generating plant is removed from the grid?

Answer 15

His position is disgraceful, particularly for an economist such as he is!!!

We ascertained in connection with our 11/18/2009 meeting on the topic of "General Motors And The EPA Perpetrating Fraud Re The Chevrolet Volt" that plug-in electric vehicles are an overall greenhouse-gas disaster because of the greenhouse gases generated in coal-fired electric plants.

And that the only environmental benefit is, pollutant-wise, NON-GREENHOUSE and, geographical-wise, local as, for example, California is able to export its electric-generating plants to down-wind states. But Al Gore would be the first to tell California that the overall greenhouse-gas impact of California's electric vehicles is a disaster!!! And quite a few studies since our 11/18/2009 meeting have confirmed our findings.

Plug-in electric vehicles (vs. hybrids) should be banned until the last coal-fired electric plant is eliminated from the U.S. power grid!!!

And for anyone tempted to send me an e-mail saying that the sale of plug-ins should still be permitted if a solar panel is sold with each plug-in vehicle and the plug is designed so that it will not fit a domestic wall socket -- there are too many electricians (and drivers who have electrician friends) who will simply retro-fit their vehicles with plugs and transformers in order to use domestic wall sockets!!! [Since the conversion cost, with an electrician friend, is virtually nil and convenience (as Vince Lombardi would say) "is the only thing!!!"]

Question 16

What "elephant in the room" or, in reality, what "elephants" on our coasts produce more pollution than the nation's vehicles?

Answer 16

According to McNeil-Lehrer (aka The PBS News Hour With Jim Lehrer) several years ago, American ports cause more pollution [comprising carbon (think "global warming") AND sulfur (think "acid rain") AND other impurities (think "smog")] than all of the nation's vehicular traffic combined.

There are two huge problems with the ports = (1) none of the on-land equipment is subject to pollution-control regulations (!!!) and (2) the ships continue to run their engines as if they were at sea in order to provide on-board electricity!!!

Reading Liberally-Salt Lake stumbled across these facts NOT because McNeil-Lehrer was decrying the pollution caused by American ports per se, but because McNeil-Lehrer was decrying the public-health effects on the nation's poor who were forced, by low property values "down wind" from the ports, to live there.

Question 17

What is the position of our author on the "elephants" on our coasts?

Answer 17

He seems ignorant of the "elephants"!!!

Question 18

What is our author's position on flaring natural gas?

Answer 18

He is opposed, despite the economic disaster his position would cause. So, of course, his position is "pie in the sky."

Question 19

What are the reasons why so much "associated gas" has to be flared? What is a "swing refinery"?

Answer 19

A short digression on oil & gas exploration & production.

The first stage of exploration comprises observing topography to identify geographical areas that are likely to contain the type of geological formations necessary for oil & gas production.

The second stage (called "seismic") is setting off a small explosion in a particular area of interest and recording the timing and strength of the echoes at numerous points on the earth's surface around the explosion.

The seismic produces an accurate three-dimensional map of the various geological strata in the area of interest.

The objective of the seismic work is to identify what "yours truly" liked to call in his "oil patch days" a "salami sandwich." You are looking for a geological layer, such as sand stone, within which oil and gas can exist and through which it can flow (much like water exists in, and seeps through, sand at the sea shore) -- that is "sandwiched" between two geological layers that are impervious to oil & gas.

Unfortunately, the seismic cannot distinguish between "wet salami" and "dry salami" -- it is necessary to drill into the "salami" layer to ascertain whether it actually contains any oil & gas.

Primary production occurs if there is oil that happens to be under pressure. [Secondary production is physical -- the classic example is pumping water into some of the wells to force oil, which floats, to the surface through the remaining wells -- and tertiary production is chemical since only a fraction of the oil can be produced with the percentage declining quickly to single digits with heavier grades of crude oil (think "greasy frying pan") so that detergents (literally!!!) are injected into the formation to loosen up a smidgen more of the "grease" (it's a shame oil companies can't inject Brillo Pads to accompany the detergents!!!).] (SARCASM INTENDED)

Primary (or "natural pressure") production comes in two varieties = "gas drive" and "water drive."

If the "salami" is wet, the oil is usually mixed with natural gas and is usually under considerable pressure from the natural gas. The pressure will drive the oil and "associated gas" to the surface. A "gas drive" oil well can be productive for considerable periods -- years and sometimes decades though gas-drive primary production will decline as the pressure declines.

Quite often, a wet "salami" layer will have oil and/or an oil-gas combination floating on top of a layer of water that occupies the lower portion of the "salami" layer. A hydraulic engineer will tell you that liquids in general, and water in particular, cannot be compressed. (And generally that is true, but please give me a gold star at this point for NOT telling the old joke about the difference between the scientist and the engineer!!!) However, the earth's surface comprises continental-size "platelets" that are floating on a molten core and the "platelets" are constantly shifting, producing earthquakes, volcanic eruptions and, when they collide with each other, tremendously-high mountain ranges.

The shifting of continental-size platelets is capable of compressing water!!! So on those rare occasions when a piece of wet "salami" comprises oil or oil-gas floating on top of compressed water, you get what Hollywood loves to portray in its movies!!!

The ground trembles and shakes!!! And suddenly, there is an oil gusher spewing half a mile into the air!!!

Though some Hollywood pictures also like to depict such theatrics (which can be very real!!!), followed by the gusher fizzling to nothing in short order (which can also be very real). If the gusher fizzles to nothing in short order, the amount of oil that has spewed into the atmosphere had the same volume as the amount by which the underlying water had been compressed. Though the world does contain quite a few notable fields for which water-drive primary production lasted for years.

*****
Back to the questions!!!

Most of the world's oil & gas production is gas-drive primary production.

Normally, there is very little that can be done with the natural gas (see below for comments on "swing refineries" and the next question for economic limits on liquefying natural gas).

Accordingly, the natural gas has to be flared or the well has to be capped and abandoned.

There is an old maxim = "be careful what you wish for"!!!

If our author actually got his wish of shutting in all oil fields for which the primary-production natural gas had to be flared, gasoline prices at your neighborhood pump would be at least two digits to the left of the decimal point if not three!!!

"Swing refineries" have been common practice in the oil industry from "day one."

But first, a digression on refining basics vis-à-vis location. It is much cheaper to transport to a consuming market for refining huge quantities of crude oil in VLCC's and ULCC's (both are super-tanker classes, but look like "Mutt and Jeff" next to each other) -- than to refine large distances from the market and barge small quantities of each refined product over those large distances.

Pre-OPEC, both Aramco (Texaco & Chevron until they admitted Exxon and Mobil in 1948) and Caltex-Bahrain ["Cal" for Standard Oil of CA, aka Chevron, and "Tex" for Texaco) had monster refineries. Aramco's Ras Tanura refinery was located at Saudi's primary port for loading crude. And capacity of the Caltex-Bahrain refinery greatly exceeded Bahraini crude production and ran primarily on Saudi crude piped across the 15-mile causeway.

So why would profit-making oil companies construct such refineries???

Not because of the Saudi and Bahraini markets for refined products!!!

They were "swing refineries"!!!

In the various Caltex-Exxon-Mobil markets around the Indian ocean, the configuration of demand for various products will not precisely match the configuration of local refinery output, particularly over time.

Accordingly, it makes sense to have a "swing refinery" that can make up for temporary shortfalls of particular refined products in particular countries -- since the changing geographical pattern of the various shortfalls resembles a kaleidoscope.

And this is particularly true if the country where the oil is produced is somewhat centrally located because the "swing refinery" will have ZERO POWER COSTS because it operates on associated natural gas that would otherwise be flared.

Question 20

What is the economic impediment to liquefying natural gas in order to transport it in ocean-going LNG ("liquid natural gas") carriers?

Answer 20

Liquefying the natural gas is very costly!!!

And continuing to refrigerate it at extremely-low temperatures to maintain its liquid form is also very costly, particularly if the natural gas has to be transported through the tropics AS WOULD, FOR EXAMPLE, BE THE CASE FOR ANY LNG CARRIER COMING FROM THE PERSIAN GULF, REGARDLESS OF WHETHER IT IS HEADED FOR EUROPE-AMERICA OR FOR CHINA-INDIA-JAPAN.

Indeed, the refrigeration system of an LNG Carrier is fueled by the cargo itself!!! So there is a theoretical limit to the distance an LNG Carrier can travel before the cargo has been completely consumed!!!

Question 21

What is the political impediment to constructing pipelines that cross as few as one international border?

Answer 21

New international investment in the post-World War II age of nationalizations has been insane unless a country, like China, is willing to build a modern navy to engage in old-fashioned "gun boat" diplomacy to bully countries in which it has made economic investments to honor "the rule of law."

Or unless a non-state economic enterprise (typically a corporation) is willing to pay the cost of bribes to local governmental officials to prevent a nationalization.

[Incidentally, the U.S. is the laughing stock of the world for three reasons = (1) it makes illegal the bribing of officials of non-U.S. governments which only puts American-based multi-national companies at a competitive disadvantage, (2) virtually all U.S. governmental officials are just as corrupt as their foreign counterparts but, as we studied 3.3 years ago for our 2/14/2008 meeting featuring the sarcastic title of "The Best Government Money Can Buy" focusing on the books of long-time Washington Post columnist Dana Milbank and long-time Business Week columnist Robert Kuttner, American pols simply label their bribes/extortion as "campaign contributions" -- which every multi-national company knows means that "everything is for sale" and, because of the American hypocrisy, the value of each U.S. governmental decision relative to the cost of the "campaign contribution" is many times higher than the ratio for any other country in the world (!!!) and (3) the American media constantly decries foreign-government corruption (3-a) as if American "campaign contribution" corruption weren't a far bigger problem, and (3-b) as if the American media would prefer NO THIRD-WORLD INVESTMENT to bribes and/or neo-Sino gunboat diplomacy.]

To make a long story short, Aramco built an oil pipeline to Sidon, Lebanon, long before the days of super tankers and quickly found that all four "transit countries" (Jordan, Syria, Lebanaon and, following the 1967 Arab-Israeli War, Israel itself since "Tapline" as it was called, traversed the Golan Heights) were EACH imposing taxes that exceeded the entire economic value of the pipeline. Tapline had to be shut down permanently not long after construction!!!

A more modern example is the natural-gas pipeline between the Russian oil fields and Western Europe. It traverses Ukraine which famously a few years ago decided to "help itself" to all of the gas it could ever dream of stealing from the pipeline!!!

Obviously, the Kremlin wished it still had a functional Soviet Army to execute old-fashioned "gun-boat diplomacy" vis-à-vis Ukraine to force it to obey "the rule of law"!!!

Question 22

What is our author's position on building gas-fired electricity-generating plants to replace coal-fired plants no matter how new?

Answer 22

"Damn the [cost], full speed ahead!!!"

Question 23

Isn't natural gas, like coal, a carbon polluter?

Answer 23

Of course.

However, natural gas has a reputation of being a "clean burning" fuel for two reasons.

First, all hydrocarbons (whether oil & gas, coal, etc.) tend to contain sulfur (think "acid rain").

However, whereas coal-fired electricity-generation plants have historically burned all the sulfur that the E.P.A. would permit, natural gas has to be delivered to consumers in pipelines. And the pipelines quickly corrode if the sulfur isn't removed before transmission.

Second, most hydrocarbon fuels comprise the decayed bodies of pre-historic organisms from which the fuel value derives from their sugar molecules.

Burning the sugar molecules (C6H12O6 + 6*O2 > 6*H2O + 6*CO2) produces energy from burning (oxidizing) both the 6 carbon atoms (which produces global-warming carbon-dioxide molecules) and the 12 hydrogen atoms (think the "Hindenburg dirigible conflagration").

Natural gas, however, comprises primarily methane which is CH4. So burning/oxidizing methane means that FOUR hydrogen atoms are oxidized for every carbon atom oxidized -- rather than the sugar ratio of only TWO hydrogen atoms oxidized for every carbon atom oxidized!!!

So our author is marginally correct that natural gas is slightly better than coal from a greenhouse-gas perspective, but there is NOT the significant difference available from actual carbon-free power sources, such as nuclear, wind, solar, etc.

Question 24

What is our author's position on hydraulic fracturing in order to produce the American "ocean" of natural gas?

Answer 24

He seems relatively ignorant. He does make a few comments to the effect of parroting T. Boone Pickens regarding "a bridge to the future" but says surprisingly little about America's "ocean" of natural gas.

Question 25

What does our author think of "Gasland" - the Sundance Film Festival documentary on hydraulic fracturing necessary to produce the American "ocean" of natural gas?

Answer 25

In all fairness to our author, although his book has a 2011 copyright, it appears from its comments to have been written in 2010.

Accordingly, his lack of a position on "Gasland" can charitably be blamed on its being a "subsequent event" rather than to his apparent ignorance of, or at least obliviousness to, hydraulic fracturing and America's "ocean" of natural gas.

Question 26

Why has President Obama "carried water" for the American coal industry since he was an Illinois state senator?

Answer 26

"Campaign contributions"!!!

Coal is produced in prodigious quantities in Southern Illinois. And nobody has ever accused Barack Obama of not being a quick learner!!!

Question 27

Why did President Obama recently approve massive coal mining in Montana for export to China to feed its new coal-fired electricity-generating mega-plants that are coming on stream at the rate of one/day?

Answer 27

"Campaign contributions"!!!

Dealing with "old friends" has advantages!!!

Question 28

What is most surprising about the West Coast of Scotland for first-time visitors? What is the latitude of London compared to the North American East Coast? What is the significance of these two questions to Western European sensitivity to the global-warming issue?

Answer 28

Scotland's West Coast features palm trees, courtesy of the Gulf Stream!!!

London is approximately 420 miles NORTH of Montreal!!!

The significance of Scotland's palm trees and London's proximity to the Arctic Circle, for anyone who remembers Al Gore's movie "An Inconvenient Truth," is that Western Europe is kept above freezing during the summer by the Atlantic Ocean's Gulf Stream from the Gulf of Mexico and, according to "An Inconvenient Truth," the Gulf Stream will be re-routed away from Western Europe by the melting of Greenland's ice cap.

Question 29

What country's vote was the long-awaited final vote needed for ratification of Kyoto?

Answer 29

Russia.

Question 30

What was the "real-politik" reason for the massive payments that Europe would be making to Russia if it finally voted for Kyoto?

Answer 30

Foreign aid for Russia to prevent a resurgence of the Cold War, which Western Europe pols knew couldn't be "sold" to their voters as foreign aid, but could be "sold" as necessary to preserve warming from the Gulf Stream.

Question 31

Did Russia's Putin oppose Kyoto because he really thought global warming would be beneficial to Russia because it would increase agricultural production in Siberia, or was he just being a typically-good Russian negotiator who was trying to get Europe to increase their subsidies of Russia under Kyoto?

Answer 31

Both!!!

Question 32

Does our author make a convincing case for doing something about global warming? Or is this just another example of winners and losers with the Russia's of the world thanking their good fortune for the increased agricultural output in Siberia and the Venice's of the world finally building a Dutch-style dike to enclose the narrow opening of their lagoon to the sea which they should already have done 100 years ago due to the sinking of the city in the mud?

Answer 32

Whether our author has made a "convincing case" depends on whether his objective was to "preach to the choir" or convert "sinners"!!!

The reason why "global warming" doesn't sell to the world's pols is because they know they can't sell "global warming" to their citizenry -- NOT necessarily because citizens don't believe the science (though many public-opinion polls in the U.S. and around the world confirm eye-popping statistics of the rejection of the science), BUT BECAUSE most "sinners" simply shrug at the projections of a rise in average temperature of a couple degrees by the end of the century as nothing more than a "heads up" that if they live that long, their winter heating bills will be somewhat lower and their summer A/C bills somewhat higher, but certainly not a reason for sending boatloads of money to the Venice's of the world to build their Dutch-style dikes.

Question 33

What does our author say about the possibly non-linear relationship between carbon pollution and global warming? About the possibly reinforcing effects of global warming on various things that themselves then warp back to have an impact on global warming?

Answer 33

He says there MIGHT be some non-linearity and some warping -- but the scientific studies haven't been done yet.

Question 34

What does our author say about investigating other scientific solutions to global warming that might be more cost effective -- such as the possibility of dispersing small particles of highly-reflectant matter into the earth's outer atmosphere?

Answer 34

Nothing.

Without discussing any scientific "thinking outside the box" he hurtles into arguing for high-cost solutions.

As previously noted, his book does a wonderful job of "preaching to the choir" but is useless in "converting sinners"!!!

Not because the science is questionable, but because a perfectly rational person such as Russia’s Vladimir Putin can accept the science and come to the rational conclusion that global warming is beneficial for Siberian agricultural production.

A good example of this is a section entitled "Hurricane Risk in the New York City Region" which consumes 10 pages (pp. 200-209) or 5% of Repetto's entire book.

He describes the risks (p. 200) as: "The region is vulnerable to hurricanes. Storm surges could reach 18-24 feet in a strong hurricane. Low-lying regions, including Kennedy Airport and Lower Manhattan, would flood. Roads, subway and tunnel entrances would be submerged, along with ground level and under-ground infrastructure."

As someone who was based in NYC for 40 years, I had to laugh aloud when reading that!!! Subway stations are flooded quite often by water-main breaks!!! So subway trains are re-routed for a day or so until the water-main is repaired and the affected station(s) drain!!! Although our highways frequently flood in severe rain storms, they are blocked 10 times as often by construction!!! And Kennedy Airport had to close for several days each of the last two years due to snow storms!!!

It is commendable that Mayor Bloomberg has a task force studying the effects of global warming on NYC and devising appropriate responses to inconveniences that might be caused. But most New Yorkers would probably tell you that it is at least 10 times, if not 100 times, more likely that New York City will be destroyed by a terrorist nuclear bomb in the next few years than suffer any damage from an extra hurricane during the next century caused by global warming.

*****
Repetto is also "pie in the sky" regarding international cooperation.

He claims that other countries are ready to engage in costly global-warming-containment programs (as distinguished from, for example, the charade that was the E.U.'s "cap and trade" fiasco) if the U.S. leads the way.

One doesn't need to be a cynic to believe that such postures are merely pretexts for doing nothing, bluffs that the bluffers are betting will never be called.

And one doesn't need to be a cynic to believe that the Putin's of the world who perceive parochial benefit from global warming will be the first to "jump ship" if a "ship" ever does sail.

This was the reason for Q-10 asking who is ready to invade China to prevent them from building their huge coal-fired electricity-generating plants at the rate of one/day!!!

Q-10 could also have been expanded to ask who is ready to invade Russia to prevent Vladimir Putin from enjoying a longer growing season in Siberia!!!

On p. 159, Repetto admits that President Obama's "cap and trade" tax proposal floundered in 2009 when Democratic Senators from the Midwest wrote a letter to President Obama saying they would not support his massive "cap and trade" tax unless China and India adopt binding emission limits and trade sanctions are imposed against any countries that do not meet their limits.

Although this appears to be a reasonable basis on which to proceed (particularly since Repetto claims falsely that theoretically there is no way to enforce any worldwide program), Repetto immediately dismisses the positions of the Democratic Senators as "show stoppers"!!!

Rather than lead, President Obama threw in the towel. He deserves the blast he has just received from Al Gore's article in the current issue of Rolling Stone (posted last week on http://www.ReadingLiberally-SaltLake.org).

*****
Perhaps I am being unduly hard on Repetto because I feel so insulted by his book!!!

His rhetoric is sophomoric!!!

And here I'm not just resentful of his flim-flam on treating bio-fuels throughout his book as a non-greenhouse-gas fuel!!! Lauding Brazil's 85% use of bio-fuels (primarily sugar cane!!!) and acting as cheerleader-in-chief for America going down that path!!!

A good example of his pervasive insults is contained on page 91. Twice on the same page Repetto insults us in the same way = "All reputable economic analyses agree" and, on another point, referring to "all serious economic analyses." Does he think we are idiots??? There could be a million economic studies ALL OF WHICH OPPOSE HIS POSITION and he could still claim that his statements are correct because he believes that all of the million economic studies on his first proposition are not "reputable" and that all of the million economic studies on his second proposition are not "serious"!!!

Repetto has spent too much of his career teaching Yalies!!! He should stop being so insulting, now that he is dealing with adults!!!

Question 35

Is the NY Times' Thomas Friedman really so naïve that he thinks that if the U.S. ever invented a non-carbon method for producing power that under-priced coal and oil & gas, etc., that American jobs would be created??? Has he been blind to the fact that American- and European-based multi-national companies would immediately produce whatever is needed in China and other low-labor-cost countries??? And that if the manufacturing process is fairly simple with little by way of continuing technological improvements, the world's most prolific pirate (the Chinese vis-à-vis intellectual property) would simply proceed in short order to steal the IP from the MNC's???

Answer 35

This is one of Thomas Friedman's favorite recurring themes!!!

Yes, he is that naïve!!!

And yes, he has been that blind!!!

Question 36

Over what issue are the Germans and French at each other's throats again??? Are the hostilities likely to boil over into military action?

Answer 36

Following this year's Japanese nuclear-plant disaster, Angela Merkl's government has announced that they will close all their nuclear plants and obtain all of their electricity from wind and solar by 2022.

France, on the other hand, is humming along with "business as usual" producing virtually all of its electricity from nuclear plants and exporting electricity to the rest of Europe.

No, military action is unlikely, even though Germany is basically "down wind" from French nuclear plants.

Two real questions for Angela Merkl's successors in 2022 = (1) are they willing to hobble the German economy if wind and solar still are not economic by 2022 and, if not (2) will they continue to buy electricity from French nuclear plants.

Question 37

And for fun, why was Edo re-named Tokyo when the Japanese Emperor long ago moved his court from Kyoto to Edo???

Answer 37

I have no documentary evidence -- only a memory of my first visit to Tokyo and Kyoto more than 50 years ago when I took tours of both cities.

One of the tour guides (I don't even remember which city), claimed that Japanese contains two words = "To" and "Kyo" with one meaning "emperor" and the other "home" (I also no longer remember which word was which).

And the tour guide explained that, just like English, Japanese permits the order to be reversed -- for example, in English you could say "Emperor's home" or "home of the Emperor."

So the Emperor, in re-naming Edo, reversed the order to avoid the confusion of having two Kyotos.

Question 38

And for additional fun without breaking the 40-question barrier for the first time, why doesn't our author think that America's vehicles emit carbon monoxide??? Is this just another case of "my shit doesn't stink"???

Answer 38

The appropriate maxim is NOT "my shit doesn't stink"!!!

Instead, it is "all work and no play makes [Repetto] a dull boy"!!!

Obviously, he never watches TV or goes to the movies!!! Otherwise, he would know that a common method of murder/suicide is running a car's motor in a closed garage!!!

Carbon MONoxide!!!

The missing oxygen atom from a carbon DIoxide molecule makes all the difference in the world!!!

Repetto's Table 1.2 on page 19 lists "Sources of US greenhouse gas emissions, 2008" as being 85% "Total CO2 [CO2 is carbon DIoxide] emissions," 8% methane, 5% nitrous oxide (aka "laughing gas") and 2% industrial gases.

For a total of 100% -- leaving no room for carbon MONoxide!!!

He claims that the "EPA (2010)" is responsible for this break down!!! I did NOT bother "chasing that rabbit" but will credit the EPA with knowing the difference!!!

It just goes to show the problems of hiring an economist to write about science!!!

But where are "the parents"??? (aka the editors???)