Epidemic: Countries Falling Ill from Oil Anemia

Oil: we can afford to buy it now, but they really can't afford to sell it to us.

Oil: we can afford to buy it now, but they really can’t afford to sell it to us.

An epidemic of oil anemia is spreading around the world with the speed of an airborne virus, leaving scores of countries gasping for breath as their financial arteries shrivel for lack of cash. The price of oil has dropped to about $80 a barrel from $100 just a few weeks ago. And just as oil burning countries begin to shrivel when they have to pay more than $100, oil producing countries start to suffocate on anything less. The sickest examples: Continue reading

Bulls Running: Frackers Getting Trampled

It's bulls v. bears on Wall Street, and the collateral damage is substantial.

It’s bulls v. bears on Wall Street, and the collateral damage is substantial.

Overtaken by arithmetic and logic, the Wall Street bulls are trying to find a place to hide their money, and while they don’t agree on where to put it, they are beginning to agree that it definitely should not be in the fracking patch. The stock of fracking operators has been in bear country for weeks now as the strain of trying to pretend everything is all right gets worse by the hour.

A Ponzi scheme requires the operator to get new suckers in the door fast enough to use their money to pay off the old suckers, so they don’t blow the whistle on the  con. Continue reading

Twin Peaks: Stock-Market Fear, Oil Panic

This is where stock and gas prices are going. To see the panic index, turn your screen upside down.

This is where stock and gas prices are going. To see the panic index, read from right to left.

Gasoline is below three dollars a gallon and the stock market is at an all-time high. Well, yes, that was last week but still. What could be wrong with this picture? Like a face that has had way too many plastic surgeries, this one is stretched a little thin, with eyes bugged out and droplets of sweat all over it. The market, which all concerned promised would go up and up and never come down (Does anybody remember them saying the same thing about real estate? Anybody?) has lost 7% of its value in a week and, yesterday at least, could not pull out of the nose dive. A 10 percent drop is a correction. Twenty percent is a crash. And the low gas prices are being celebrated by everyone but the frackers who brought them to us. For them, low oil prices mean almost-immediate ruin. Continue reading

Letting Go of the Tar (Sands) Baby

A tar sands mine and plant near Fort McMurray, Alberta, Canada. The recipe is simple: scrape the skin off the earth, boil what you find, wash the residue, dilute it with explosive fluids and send it 3,000 miles to where someone can make an inferior product with it. For some reason, the business model isn’t working. (Wikipedia Photo)

A tar sands mine and plant near Fort McMurray, Alberta, Canada. The recipe is simple: scrape the skin off the earth, boil what you find, wash the residue, dilute it with explosive fluids and send it 3,000 miles to where someone can make an inferior product with it. For some reason, the business model isn’t working. (Wikipedia Photo)

Just as is the case in the American tight (shale) oil plays, things in the Canadian tar sands are breaking down fast, and for the same reason: wringing the last few barrels of oil out of the earth is proving to be far more expensive than hoped. Two weeks ago the Norwegian energy giant Statoil postponed for at least three years building a new tar sands project designed to pump 40,000 barrels a day; earlier this year Total SA of France, the fifth-largest oil company in the world, suspended operations at its $10 billion oil sands mine while it tries to figure out a way to make a profit; and Shell announced in February indefinite suspension of work on a prospective 200,000-barrel-a-day mine. (The same Shell that has been quietly folding its 13-billion-dollar hand in the US shale-oil bonanza and tiptoeing from the building? Yes, the very same.) Continue reading

California: Desperation Rising as Water Runs Out

Gravity sensing satellites have measured the withdrawal of water from the aquifer underlying California's Central Valley. It's almost over. (NASA images)

Gravity sensing satellites have measured the withdrawal of water from the aquifer underlying California’s Central Valley. It’s almost over. (NASA images)

In more than 500 households in Tulare County, California, over a thousand people have been without running water for months. The reason you have not heard much about them is that they are poor working immigrants who labor in the Central Valley’s pastures of plenty to give us this day our daily lettuce and cilantro. They are homeowners whose homes are now worthless, dreamers of the American Dream who are now forced to buy bottled water to drink, to shower from coffee cans and flush with buckets filled at community tanks (with water from wells in imminent danger of going dry). Children are being kept home from school because they are too dirty. Proud cooks are feeding their families from cans. One resident told the New York Times (in a rare example of industrial media paying attention) “It’s a slow-moving disaster that nobody knows how to handle.” Continue reading

A United State of Incompetence

Ebola outbreak? White House intruder? Climate change? Don't worry, we're on it.

Ebola outbreak? White House intruder? Climate change? Don’t worry, we’re on it.

A wise man once told me (no, wait, it was me, talking to myself) that when something bad happens, like a plane crashes, or Congress passes a law, it is usually for one of two reasons: a dark conspiracy by evil people, or rank incompetence. “If there is any doubt about the cause,” he, or I, said, “always assume incompetence. You will almost never be wrong.” The case is being illustrated these days with dismaying frequency.

Ebola in America. Get off a plane from Liberia, go to a hospital in Texas and tell them you’ve just come from West Africa and are desperately ill, they give you an aspirin, send you home and tell you to hug and kiss all your friends and family, it will make you feel much better. (Only that little tiny last part is made up. The rest of it, I wouldn’t dare.) Continue reading

Miami Beach, October 9: Apocalypse Foretold [UPDATE: Problem Solved]

High-tide flooding caused by rising seas is impacting Miami and cities as far north as Boston with ever increasing frequency and severity. (Photo by Harold Wanless, University of Miami)

High-tide flooding caused by rising seas is impacting Miami and cities as far north as Boston with ever increasing frequency and severity. (Photo by Harold Wanless, University of Miami)

The projected sea-level rise of the next quarter-century or so because of climate change will occur, albeit briefly, in Miami Beach next Thursday. On that day, the alignment of the sun, earth and moon will produce a King Tide — the highest high tide of the year, a full foot above normal, or about half the sea level rise Miami is expected to experience by 2060. Construction crews are racing to fit plugs in the city’s stormwater drains that dump into the sea and, suddenly, provide a conduit for rising seawater directly to the streets, and to complete installation of four enormous pumps with which to fight the incoming tide. (By pumping the water where? Um, back into the rising sea. Isn’t that a little like bailing one end of a boat into the other?) Thus we get a preview not just of sea level rise, but of the hapless human response to it. Continue reading

Shale Oil Boom Breaking Down

No, this is not a Dallas suburb, it’s a fracking field. If you don’t like it now, imagine it in a few years, when it has been abandoned. (Photo by Simon Fraser University)

No, this is not a Dallas suburb, it’s a fracking field. If you don’t like it now, imagine it in a few years, when it has been abandoned. (Photo by Simon Fraser University)

Recent research suggests that fracking causes earthquakes; they have no doubt of that at the fourth largest trading and investment company in Japan — Sumitomo Corporation — which has just experienced a Magnitude 10. The profit Sumitomo expected to make this year, a hefty $2.27 billion, has been all but wiped out. News of the disaster atomized 13 per cent of its stock value in one day.  Its credit rating went to “negative.” And almost all of this was caused by hideous losses incurred in fracking for tight oil in Texas.

Sumitomo samurai rolled into Texas just two years ago (seems like only yesterday) with a $2 billion dollar investment in the Permian shale-oil play, in partnership with Devon Energy of Oklahoma. So here we have Japan’s fourth-largest trading company, along with one of the largest US fracking companies, going into the (potentially, according to the oil interests) richest tight-oil basin in the United States in the midst of a tight oil boom. What could possibly go wrong? Continue reading

I Hear America Rotting

The deadly collapse of an Interstate Highway bridge near Minneapolis in 2007 brought a horrified nation to its feet. Then the nation sat down again.  (Photo by mtellin/Flickr)

The deadly collapse of an Interstate Highway bridge near Minneapolis in 2007 brought a horrified nation to its feet. Then the nation sat down again. (Photo by mtellin/Flickr)

She was elderly, spry, energetic, and she lived alone in the remains of a genteel Southern plantation, with its Tara-like mansion and sprawling lawns. She was not without means, but she was entirely without staff.  She was telling me how she had recently paved with flagstones the banks of a fairly sizable pond near the mansion’s rear patio. Herself. Mightily impressed, I asked her what she did with her spare time. “Oh,” she sighed, “I like to get a glass of iced tea and just sit out here and listen to the house rot.”

Which is what we Americans have been doing since 1980, when we decided that taxes are evil and must never be raised again for any reason. We’ve been sitting around listening to the country rot. Continue reading

Miracle of the Loaves, Fishes and New Home Sales

If the housing market in the US were in fact recovering, it would be a miracle. Alas, (Wikipedia Photo)

If the housing market in the US were in fact recovering, it would be a miracle. Alas, (Wikipedia Photo)

To call it a miracle is to misunderestimate it by at least an order of magnitude: according to the US Commerce Department, sales of new single family homes in August surged 18% from July, and 33% from last year, “offering confirmation,” swooned CNBC, “that the housing recovery remains on course.”

Even while humming its charming little refrain of “Happy,” CNBC, like the many others who sang from the same sheet music, slipped in a few clunkers without elaborating or explaining: one, that new home sales account for only nine percent of the market, and thus (despite CNBC’s offered confirmation) are hardly determinative; and two, that despite the rise in sales, the stock of new houses still unsold hit its highest level in four years. Wait, what? You sell more than you have in six years, and end up with more unsold inventory than you’ve had in four years? Continue reading