Here’s an excerpt:

A San Francisco cable car holds 60 people. This blog was viewed about 1,700 times in 2011. If it were a cable car, it would take about 28 trips to carry that many people.

Click here to see the complete report.

Patrick Michaels is a senior fellow in Environmental Studies at the Cato Institute and the editor of the forthcoming Climate Coup: Global Warming’s Invasion of our Government and our Lives, as well as the author of several other books on global warming.

His Forbes column on the Chevy Volt is a case study in the nexus between big government corruption and big business rent-seeking.

Michaels briefly recaps the well-known consumer fraud in which GM has touted the Volt as an all-electric mass production vehicle on the supposed basis of which its sales receive a $7, 500 taxpayer subsidy, which still renders it overpriced and unmarketable.

Michaels notes that “sales are anemic: 326 in December, 321 in January, and 281 in February.”

There seems to be a trend here.

Michaels adds that GM has announced a production run of 100,000 in the first two years and asks what appears to be a rhetorical question: “Who is going to buy all these cars?”

But wait! Keep hope alive! There is a positive answer to the question.

Jeffrey Immelt’s GE will buy a boatload of those uneconomic GM cars. Here the case study opens onto the inevitable political angle: Recently, President Obama selected General Electric CEO Jeffrey Immelt to chair his Economic Advisory Board.

GE is also awash in windmills waiting to be subsidized so they can provide unreliable, expensive power. Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced.

Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375, 000, 000 to a company to buy cars that no one else wants, so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama’s Economic Advisory Board?

But of course. Michaels includes this hilarious detail in his case study:

In a telling attempt to preserve battery power, the heater is exceedingly weak. Consumer Reports their tests averaged a paltry 25 miles of electric-only running, in part because it was testing in cold Connecticut. (The [GM] engineer at the Auto Show said cold weather would have little effect.) It will be interesting to see what the range is on a hot, traffic-jammed summer day, when the air conditioner will really tax the batteries. When the gas engine came on, Consumer Reports got about 30 miles to the gallon of premium fuel; which, in terms of additional cost of high-test gas, drives the effective mileage closer to 27 mpg. A conventional Honda Accord, which seats 5 (instead of the Volt’s 4), gets 34 mpg on the highway, and costs less than half of what CR paid, even with the tax break.

The story of the GM Volt deserves a place in the Harvard Business School curriculum….but of course, it won’t. It’s a classic tale of the GOVERNMENT deciding what the public needs, not the marketplace.

Freedom is lost gradually by an uninterested, uninformed, and uninvolved people.

It is unfortunate that on the day when President Barack Obama said perhaps one of the most noteworthy things during his entire Administration, the ridiculous birther issue hijacked the news. On that day he was quoted: “”We are in a lot of conversations with the major oil producers like Saudi Arabia to let them know that it’s not going to be good for them if our economy is hobbled because of high oil prices.” He certainly would like more oil to get into the market.

After oil topped $110 per barrel, after gasoline prices have been flirting with $4 per gallon and after a relentless climb which lasted for weeks, the President felt compelled to do or, at least say, something. Obama can be the subject of criticism for a lot of things but as a campaigner he is almost impeccable. He is campaigning officially and he knows too well that virtually nothing removes votes from an American candidate better than higher gasoline prices.

Of course, it is hard to be the President of wind mills and solar panels and now try to implore foreign countries, raking it in from higher oil prices, to commit financial sacrifice. They are asked to increase the supply of the commodity, which has been labeled by Obama as the “energy source of the past”, and against which his Administration has gleefully declared war in both words and action from the time of the previous presidential campaign to today. One would think that higher oil prices would force people to use solar and wind to drive their cars. Yes, I know this is not possible and it is sarcastic but many of the President’s supporters, behind the public consumption headlines of feeling the consumers’ pain, think that what is happening is good for the energy future they would like to see.

The President, like many of his predecessors of both parties, is missing the opportunity to level with the American people: There are no alternatives to hydrocarbon (oil, gas and coal) energy sources in the foreseeable future. The entire twenty first century will still be dominated by them. Solar and wind are unrealistic today, they are thermodynamically deficient, and they will most likely never amount for much more than one percent of the world energy mix without massive government subsidies.

Ideological environmentalism has trumped economic development and has thwarted economic freedom, which was, ostensibly, the motive of the Cold War which America won but certainly does not act like it did. Al Gore, a precursor to Obama even before the Nobel Prize for the “Inconvenient Truth” wrote that the “internal combustion engine is the biggest threat to humankind.”

Tell that to the Chinese who are buying at least 40,000 new cars per day.

Breaking even the lowest standards of credulity on the same day of the President’s Saudi plea, Lisa Jackson, the EPA administrator said rising gasoline prices were not her agency’s fault. Upward pressure on gas prices was “not coming from any environmental or health regulation.” Really? This from an agency that even its more ardent supporters think as the most intrusive and recalcitrant, ever, an agency that has attempted to regulate by government edict rather than legislative fiat.

Make no mistake: global climate change rhetoric — fully espoused by the Obama Administration — is a frontal attack on the US and the lifestyle that emanates from its economy and system. The Europeans who adopted it in the first place are not averse to admit that they are jealous of America. The Chinese, who are all too aware of the ramifications of mandatory carbon restrictions on both the world and, in particular, their economy, simply will not play along. They are, at best, bemused. Does anybody really believe there would be economically extractable hydrocarbons in this world that would not be produced because we pass legislation in the US? Isn’t the atmosphere the same for all?

To crown a day that surely even Don Quixote would question the credibility of Obama’s adversaries, a third jewel was added to the news menu. Senator Harry Reid said the “Senate will turn as early as next week to Obama’s proposal to repeal tax breaks for the oil and gas industry.” This is the answer. Let’s turn on Big Oil. That will solve the problem.

What are we really talking about? The “subsidies” amount to just $4 billion per year. It may sound a lot of money but here is a quick calculation. The United States is using about 400 million gallons of gasoline per day. At $4 per gallon this translates to $1.6 billion per day, which means that the yearly subsidies to the dreaded oil companies account for less than three days of just the US gasoline bill. The US total oil bill at today’s prices is about $2.3 billion per day. Using a modest multiplier in economic activity, that would make the US oil industry, not counting natural gas, a $10 billion per day economic activity. The “subsidies” trumpeted by the government headlines amount to a few hours of the industry’s size.

Last year the Chinese spanned the globe and spent $200 billion in buying oil properties. I am often in China and my colleagues there are actually bewildered. After a few drinks and when words become looser and in some ways, more lucid, they have two questions: “What is the energy policy of the United States? and “If you are not going to produce your own oil and gas why are you letting us have a free ride in accessing oil supplies everywhere in the world with no resistance and no competition?” I have no answer to either but I do know that the Chinese understand that energy means power and better economics. We no longer seem to get it.

Posted on Apr. 06, 2011

(http://www.energytribune.com//articles.cfm/7055/Debunking-Five-Myths-About-Gas-Prices)

Ed. note: This piece was first published on Robert Rapier’s R-Squared Energy Blog.

This past week I had an article published in the Washington Post called Five Myths about Gas Prices.

I will discuss each particular myth in detail below, but the five myths I addressed were:

Fighting in Libya is sending gas prices higher.
Tapping the Strategic Petroleum Reserve is a smart way to reduce gas prices.
Oil companies produce less in the spring to make gas prices increase.
The Obama administration is driving up gas prices.
Americans can’t live without cheap gas.
Because such articles go through an editing process and must conform to limits on the length of the article, some topics couldn’t be addressed in sufficient detail. Sometimes during the editing process there is a disagreement over what is and is not a pertinent piece of information. This can result in some misunderstanding of the information I am trying to convey.

The article received 153 comments in just a couple of days, after which commenting was closed. Some of the common complaints were that I didn’t sufficiently explain an issue, or that I omitted certain issues. For instance, one person stated that the issue of seasonal blends is more complex than I stated. That’s true, which is why I have written entire articles on the subject. Some people complained that I left out the role of speculators. Actually, I didn’t, and ironically this was one of the myths that I had been asked to look into. My response was that it wasn’t a myth; that speculation does play a role in oil prices.

Some people believe strongly in myths, and when one is busting their cherished myths they can get angry and view you as a liar and a purveyor of misinformation. I suppose for them that justifies the nastiness that sometimes shows up in the comments. Many people seem to need a culprit to blame for high gas prices, but the issue is more complicated than that.

Needless to say, some of the responses were amusing. On speculation, some people suggested that due to my role in the oil industry, of course I was happy to deflect attention away from price gougers and speculators. After all, I am a typical George Bush conservative, and a former oil industry employee who is blind to the dangers of our fossil fuel dependence. On the other hand, some said that since I presently work on renewable energy, of course I am against expanded drilling because that benefits my company. After all, I am a typical Al Gore liberal who knows nothing about the oil industry and believes biomass can replace our current levels of oil consumption. Some people apparently felt that these ad hominem arguments excused them from having to argue the actual points of the article.

So I decided to reproduce the article, but fill in some of the gaps that opened up during the editing process and led to some of the comments. Ultimately, some people will still view this through filters that place most of the blame for high gas prices on ExxonMobil, speculators, or misguided environmentalists. For those people, this expanded article isn’t going to help much. For the people who understand that this is a complex issue, you may find some utility in the expanded version below. As appropriate, I will add commentary that seeks to address some of the common complaints/questions about the article in italics as RR: Comment…

Five Myths about Gas Prices – The Unabridged Version

Gasoline prices have been steadily climbing for several months, and Americans are feeling the pain at the pump. The possible culprits (from greedy oil execs to Mideast turmoil) are as plentiful as the proposed solutions (more offshore drilling, green energy or government reserves). But what is really driving prices up? And what, if anything, can be done about it? Let’s take a moment to fill up on information about our fuel.

1. Fighting in Libya is sending gas prices higher.

Libya is not a big enough global oil supplier for the battles there to have a meaningful effect on gas prices. In the 1970s and early 1980s, Libya was a major U.S. supplier, selling us around 700,000 barrels of oil per day. But today, we import less than 50,000 barrels per day from Libya — a tiny fraction of the 9.2 million barrels per day the United States imported in 2010. Worldwide, the story is no different: Of the 86 million barrels consumed globally each day, less than 2 percent come from Moammar Gaddafi’s regime.

So why are gas prices up? Though Gaddafi’s fate is largely irrelevant to the oil market, unrest throughout the greater Middle East is not. The Persian Gulf region produces almost 24 million barrels of oil per day, more than 25 percent of global oil consumption. The Arab spring that has brought protests to Egypt, Saudi Arabia, Bahrain and Yemen makes markets nervous, and when markets fret over a possible disruption to oil supplies, gas prices rise — whether the disruption materializes or not.

RR: However, as I explained in a radio interview that I did with KSL news-radio in Salt Lake City, there isn’t a lot of excess global capacity relative to a decade ago. Therefore, the ramifications of taking even 2% off the world market will be disproportionate when there aren’t a number of suppliers who can step up and fill that void with increased production. We are drawing down our oil reserves even as demand is increasing, and that more than any other factor explains the rise in fuel prices over the past decade.

Further, many people complained that I didn’t address speculators at all in the essay. If you understand what speculation is, then you can see that I did address it under this first myth. The fact that oil prices would spike on the basis of what is happening in Libya is based on speculation around several themes. This has also been referred to as a -fear premium- because it is based on the fear that the outage will be extensive, that other producers won’t be able to fill the supply gap, and/or that the unrest spreads across this important oil-producing region. But a price increase based on fear is one based on speculation-which also isn’t to say that the speculation won’t materialize.

2. Tapping the Strategic Petroleum Reserve is a smart way to reduce gas prices.

The U.S. government maintains a 727 million-barrel oil reserve — 38 days’ worth at current levels of consumption — to protect against potential supply disruptions. But just about every time prices rise, politicians want to access the oil in the reserve to increase supply and bring prices back down. Sen. Charles Schumer (D-N.Y.), for instance, has been calling for oil releases from the SPR for more than a decade. In a letter to President Bill Clinton in 1999, he requested the release of several hundred thousand barrels a day from the SPR because oil prices had made a “meteoric ascent to nearly $25 per barrel.” He even introduced legislation to make it easier for the Administration to tap into the SPR in order to combat rising prices.

Had Clinton dipped into the reserve then, as Schumer requested, we almost certainly would have gotten a raw deal as prices continued to climb over the next decade. What if that $25-per-barrel oil could be replenished only at $75 per barrel? Tapping the SPR makes the government an oil speculator, and any nation running record deficits that becomes a commodity trader is playing a dangerous game.

The SPR exists to buy time in a true supply emergency. If we use it as a political tool to keep voters happy by attempting to stem rising gas prices, we may be forced to buy back oil at even higher prices, or we may be left with an insufficient supply in a real crisis.

RR: Elsewhere, and again on the radio interview with KSL news-radio, I explained the difference between high gas prices and a true emergency. Before my radio interview, I had filled up my car at a gas station in Hawaii. I paid $4.67 per gallon of gasoline. While prices like that will cause additional financial hardship for many, at least the gasoline was available for purchase. We take this for granted; there is always gasoline at the service station when we need it. When you pull into the gas station and there is no gasoline at any price, then that could start to qualify as an emergency.

Fuel shortages have happened in the U.S. before, and could happen again for a variety of reasons. If a major source of U.S. oil imports was cut off, shortages could quickly develop. The SPR could then be tapped to ease those shortages, and if it appeared that they would be extensive it would buy time to implement emergency measures such as rationing. So the SPR is an insurance policy, and if that insurance is used up just because politicians are hoping to influence the price of oil, we may find ourselves lacking insurance in a time of crisis.

3. Oil companies produce less in the spring to make gas prices increase.

Almost every year, gasoline prices rise in the spring. This is usually preceded by falling gasoline inventories and reduced refinery outputs, leading many to believe that oil companies are constraining supplies to drive prices higher.

But there is a valid reason this happens; indeed it is written into the law. In the spring refiners have to switch from winter blends of gasoline to summer blends. This is based on EPA regulations designed to reduce air pollution in the summer.

Butane plays the biggest role. Butane is a cheap ingredient relative to most components in gasoline, but it boils at low temperatures. In winter, this isn’t a big problem so refiners are able to put more butane into the gasoline. But in summer, butane evaporates from gas, polluting the air while leaving us with less fuel in the tank than we paid for. As temperatures rise, refineries replace butane with more costly ingredients and draw down winter inventories just as beach season begins. So summer gasoline blends cost more to make, and supplies are more constrained since butane is off limits.

An additional factor is that during this seasonal gasoline transition, refineries often do annual maintenance. The timing is driven by a combination of improving weather and moderate demand prior to the start of summer driving season. So the production of gasoline generally falls in the months before summer, leading many to incorrectly conclude that there is a corporate conspiracy at work.

But the same thing takes place in the fall. During the transition to winter gasoline, maintenance takes place and inventories are drawn down. The differences are that this is leading into a season of lower demand, and cheaper butane is coming back into the gasoline blends. So the fall transition doesn’t have the same impact on prices.

RR: For more details on seasonal gasoline changes see my essays Refining 101: Winter Gasoline and Why Summer Gasoline Means Higher Prices.

4. The Obama administration is driving up gas prices.

Sen. Mitch McConnell (R-Ky.) says EPA regulations are a “back-door national energy tax” that pushes prices up. Former Alaska governor Sarah Palin says the White House drilling moratorium shows President Obama’s “culpability in the high gas prices hurting Americans.”

Blaming the president for rising gas prices is nothing new, and it’s a bipartisan tactic. In 2004, Sen. John Kerry (D-Mass.) blamed President George W. Bush for higher gas prices because he continued to fill the Strategic Petroleum Reserve as oil prices climbed.

Just one problem: Even if more domestic access is suddenly granted, it won’t do much to control current prices. The U.S. government has estimated that there are 18 billion barrels of oil in the outer continental shelf of the lower 48 states that are off limits to development. That may sound like a lot, but it is only about 2.5 years of supply for the United States, and it would take several years to allocate leases and drill exploratory wells. Even if the estimated 10 billion barrels of oil in the Arctic National Wildlife Refuge were available for development, today’s policy decisions would have no impact on gasoline supplies for as much as a decade. Obama can’t dictate what you’ll pay for premium tomorrow.

RR: This one elicited a number of hostile responses, many from people who apparently think we can in fact drill our way to energy independence if not for the meddling of environmentalists who work to keep domestic supplies off limits to development. The premise of this point is straightforward, but it apparently strained the comprehension abilities of some. At issue is whether Obama’s policies are impacting gasoline prices. My point is that estimates indicate that there isn’t all that much oil there in the first place relative to our consumption, and even if it is all opened up for development today the supplies won’t hit the market for several years. So what Obama does or doesn’t do today with respect to development isn’t impacting gas prices today.

The single biggest misconception on this point involved readers adding their own additional interpretations to what I said. Since I am pointing out that it would take years to develop and thus won’t impact today’s gasoline prices (which I did write) then I am saying we shouldn’t develop our resources at all (which of course I didn’t write). The latter misinterpretation was often accompanied by a few liberal insults about my inability to think about the future, or about ulterior motives for not developing our resources.

5. Americans can’t live without cheap gas.

Yes, Americans love to drive, and Americans love cheap gas. But across an ocean, there’s a continent filled with people a lot like us who’ve lived with high gas prices for years. They’re called Europeans.

While U.S. gasoline heads toward $4 per gallon, Europeans have been paying much higher prices for years because of high taxes on fuel. This month in Britain, gas hit 6 pounds, or about $9.76, per gallon. Because gas is so dear, Europe’s per capita energy use is half that of the United States, leaving Europe less vulnerable to oil price shocks yet not undermining its citizens’ standard of living.

The United States, built on cheap oil, is much less densely populated than the Old World, with more wide-open spaces to traverse. But that doesn’t mean we can’t embrace some of the things that have helped Europeans keep their gasoline bills down — such as high-speed rail, public transportation and green energy.

In fact, Americans have shown that they can adjust their behavior when faced with sticker shock at the pump. As gas prices rose from $2.31 per gallon in 2005 to $3.30 per gallon in 2008, sales of the Toyota Prius eclipsed those of the Ford Explorer, and public transit use reached a 50-year high. When it costs $30 to fill up a Geo Metro with regular, all options are on the table.

RR: This one also elicited strong responses, mostly along the lines of “I don’t care what Europeans do. We are Americans.” One person pointed out “yeah, but what you don’t say is that European prices are high because of high taxes.”; I concluded that this person couldn’t read. Other responses were that Europeans had transportation options that we don’t have here in the U.S., apparently never stopping to wonder why they have some of these options.

I believe that when you are faced with a complex problem, one of the first things you want to do is to see how others have approached the problem. You may decide that their solution isn’t applicable to your situation, but you may find that it is at least partially applicable. In the case of European gas prices, their solution is at a minimum partially applicable. After all, what kinds of cars do you see on European roads? Almost no pickups, very few SUVs, and very few gas guzzlers period. They are behaving exactly as we would in the U.S. after a sustained period of high gas prices. So the most significant thing you can do personally to limit the impact of high gas prices on your budget is to do as the Europeans do: Get fuel efficient.

Conclusions (not in the original article)

It is always an adventure to see my writing exposed to a broad cross-section, many of whom don’t know the first thing about me. The ratio of uninformed comment and just generally insulting comments runs much higher than when I write in familiar locales. Too many people dismiss factual statements on the basis of ad hominem arguments, and I never cease to be amazed at the number of people who will extrapolate what I write, and then attack that extrapolation.

A large number of people also believed that I had ulterior motives for writing this article. At the end of the day, what I am trying to do has nothing to do with any personal financial agenda. Some will believe that, some won’t, but I want to state it clearly in any case. What I want to do is to bring a higher level of understanding to our energy issues so we can make more informed energy decisions. Based on some of the comments, we still have a steep hill to climb, and until more people climb that hill we will continue to have politicians trying to use the SPR as a political tool to appease angry, but uninformed voters.

If after 180 years, electric cars are still not a commercial success, it’s time to put the brakes on taxpayer subsidies and get on the road toward policies that protect the environment in economically responsible ways.

There are a lot of attractive things about plug-in electric vehicles. They’re clean. Much of the assembly and many of the parts are made in the USA. And then there’s the cool factor, provided by the futuristic look.

But before even more taxpayer dollars flow into subsidies for these PEVs, we should look under the hood to see if continued support is warranted.

Electric vehicles have been with us for almost 180 years. The first, an electric carriage created by an inventor named Robert Anderson, made its appearance in Scotland in 1832. By 1907 the American company Cutler-Hammer was advertising electric vehicles and the first electric charging station. Since that time Americans have seen tremendous innovations is everything from air travel to microwaves, yet there has been little progress converting consumers from gasoline-powered cars to vehicles powered by rechargeable batteries.

One hundred years after the Cutler-Hammer electric car, today’s plug-in electric vehicles receive failing grades from consumers and consumer advocates.

Consumer Reports doesn’t have good early reviews for Chevrolet’s flagship entry into electric vehicles. A top editor from the publication said the Chevy Volt, which has both a plug-in battery and a gasoline engine “isn’t particularly efficient as an electric vehicle and it’s not particularly good as a gas vehicle either in terms of fuel economy.” He concluded that it just “doesn’t make an awful lot of sense.”

He’s right when you consider the cost and performance of PEVs, starting with the batteries, which require major breakthroughs before they will be ready for prime time. A battery for a small vehicle like the Nissan Leaf can cost about $20,000 and still only put out a range of 80 miles on a good day (range is affected by hot and cold weather) before requiring a recharge that takes eight to 10 hours. Even then, those batteries may only last six to eight years, leaving consumers with a vehicle that has little resale value.

Home installation of a recharging unit costs between $900 and $2,100. And don’t forget workplace and retail recharging stations, which will be necessary.

Slick TV ads boast PEVs’ supposed environmental benefits, but what they don’t tell you is that a substantial increase in the numbers of them on the road will require upgrading the nation’s electricity infrastructure. Since half of all U.S. electricity is generated by coal, which produces greenhouse emissions, PEVs may not be any better than hybrid electric vehicles that do not need to be plugged in. Meanwhile, new technology for gasoline-powered vehicles has substantially increased miles per gallon, to as much as 35-50 mpg for several smaller vehicles.

If you’re looking for a car that makes good economic sense in these tough times, PEVs simply don’t make the grade. Unless crude oil prices rise close to $300 per barrel and battery costs fall by 75%, a PEV is more expensive than a gasoline-powered vehicle.

Despite these significant flaws, the government is determined to jump-start sales for plug-ins by putting taxpayers on the hook. The $7,500 federal tax credit per PEV is nothing more than a federal subsidy that will add to the deficit. There are also federal tax credits for installing charging stations in homes and businesses and for building battery factories and upgrading the electric grid. The administration’s goal—one million PEVs on the road by 2015— could cost taxpayers $7.5 billion. Outlays for recharging infrastructure will add billions more.

We all support the idea of protecting the environment—and PEVs may very well be a solution when battery technology improves and cost declines. But for now, hybrid electric vehicles, which combine a gasoline engine with a battery recharged during operation, are much more practical than PEVs.

If after 180 years, PEVs are still not a commercial success, it’s time to put the brakes on taxpayer subsidies and get on the road toward policies that protect the environment in economically responsible ways.

Ms. Thorning is the executive vice president and chief economist at the American Council for Capital Formation.

The Wall Street Journal, 25 March 2011

Throughout the history of Japan, its cities have been destroyed again and again by war, fire and earthquake. After each catastrophe, the Japanese have rebuilt, bigger and better. One hopes and expects that they will do the same again.

In Japan, you are constantly made aware of the power of nature. Summer is hot and steamy; in September there are typhoons; and during the rainy season in June it feels as if someone has tipped a bath of water over your head. But the most powerful force of all is the seismic activity.
Earthquakes and tremors are part of life in Japan and part of the forces that shape the landscape. The country is said to be geologically young, still in the process of forming. One of the results is the spectacular volcanoes, among them Mount Fuji, eternally smoking, and Mount Sakurajima, which belches black ash over the southern city of Kagoshima; when the ash is really bad, the inhabitants put up their umbrellas.

All over the country, hot water bubbles out of the earth, full of health-giving minerals. For the Japanese, taking the waters is the equivalent of our going to the seaside. There are also sand baths where you can be buried in hot volcanic earth. At Mount Osore, in the north of the main island, sulphur oozes out, staining the rocks yellow. It’s all part of the geological volatility, the opposite of our unchanging British landscape. Unlike the Japanese, we don’t expect geological upheaval; and living in these very different landscapes creates different attitudes to life.

Since the Kobe earthquake in 1995, the Japanese have done even more to make their buildings as earthquake-proof as possible. There have been scandals in other countries – China springs to mind – about unscrupulous builders producing buildings that collapse like a pack of cards, but in Japan there is no such cutting of corners. There are regular earthquake drills and all schoolchildren are taught what to do. People say that Japan is like a big village where everyone takes care of everyone else. This may have declined in recent years, but at a time of stress it re-emerges.

Living with the constant threat of earthquake, the Japanese have created an orderly society, which perhaps makes it easier to cope with the violence and unpredictability of nature. You really can set your watch by the bullet train. If you’re a second late, you will miss it, and if you leave your child on the platform (as a friend of mine did), it will pull out without him and not stop for three hours.

It’s also safe; the crime rate is very low and there is a much higher level of policing than in the UK, with policemen stationed in police boxes (like Doctor Who’s phone box). Local police know all of the families on their beat and regularly drop in on potential troublemakers and yakuza gangsters.

When you live in Japan, you learn to do things properly. I was once told off in a health club for standing up while showering instead of kneeling, as the Japanese do. The point was that showering on one’s knees is a form of discipline; it should not be done half-heartedly.

The principle is that whatever you do, you do it right. The tea ceremony is a bit like tai chi, making tea using only the most precise and economical movements. The same applies whether you’re walking in a kimono; removing your shoes in the entrance way and turning them around to face forwards, neatly lined up side by side; tying your chopstick envelope in a knot and resting your chopsticks on it; and, of course, wearing the correct slippers for the hallway and the toilet slippers in the toilet. Life is an agglomeration of small rules which together ensure order is maintained. Japanese street cleaners are proud of their jobs. Rather than resenting not having a better job, they make sure their streets are really clean.

The traditional dichotomy is between honne and tatemae – setting aside your true feelings in order to keep up appearances and not lose face, or making anyone else lose face. It is considered uncouth to express anger. I remember seeing a traffic accident in Japan, after which the people involved bowed, smiled and apologised to each other. They didn’t fly into a rage.

Another concept that springs to mind in the context of the earthquake is gaman – enduring. In the depths of winter in many provincial homes, the only heating is a kotatsu, a low table with an electric heater underneath and a quilt over the top, under which you put your legs. The theory is that if your legs and stomach are warm, the rest of you will be fine. And in summer people roast. If the weather is cold, you are cold; if the weather is hot, you are hot.

Perhaps this orderliness goes some way towards explaining why there have been no scenes of shouting, anguish or disorder coming out of northern Japan, and certainly no scenes of looting. Though having lived in Japan, I’d rather ask why such scenes happen in other countries, just as I wonder why our trains can’t run as promptly as the Japanese ones do.

Japanese culture makes room for disorder, too. As everyone knows, salarymen (office workers) get drunk in the evening and let off steam; then they pass out. Hostess clubs – or, if you’re incredibly rich and influential, geisha houses – are where you go to let off steam. The man who is very buttoned up in his working life can get away with anything while drunk. In fact, it’s considered rather suspect not to go drinking with one’s colleagues. Disorder and order are the Shinto and the Zen sides of Japanese culture.

The culture itself celebrates transience. This week I received an email telling me that the southern section of the bullet train was up and running again after the earthquake; it also mentioned that the cherry blossoms would be blooming from March 29. Lasting only a single day, they are seen as a poignant symbol of the impermanence of things.

The Japanese have applied some of the lessons they learnt in the Kobe earthquake. As well as improving building regulations, the government sent in the armed forces straight away, whereas in Kobe there was still public antipathy towards using the military; in fact, the powerful Yamaguchi-gumi crime syndicate won acclaim for going in with blankets, food and water long before the armed forces arrived.

The country’s politicians are a notoriously flaky bunch but the prime minister, Naoto Kan, may find that the earthquake revives the fortunes of his government, whose poll rating recently plummeted to below 20 per cent. On the very day of the earthquake, he had been forced to issue a statement saying that he would not resign over an illegal donations scandal that has engulfed his party. Now he has made a rather Churchillian speech, a passionate call for unity and resilience, the qualities that lifted Japan from its post-war despair. “Japan is facing its worst crisis in the 65 years since the war,” he said in a televised message to the public. “All the people [in] Japan face a test to see if we can overcome it. I believe we can.”

The Japanese certainly have a huge task ahead of them – and the damage to nuclear power stations adds another dimension of fear – though, unlike us, they are not unused to rebuilding. There is, for example, a tradition of rebuilding the great Shinto shrines: every 20 years they are torn down and built afresh in new wood, exactly as they were. They are both old and new; thousands of years old yet also brand spanking new.

Throughout the history of Japan, its wooden cities have been destroyed again and again by war, fire and earthquake. In the civil war of the 1860s, culminating in the Meiji Restoration, the north of the country, which has suffered the brunt of the earthquake, was virtually flattened. The Great Kanto Earthquake of 1923 reduced Tokyo to a sea of ash and rubble, and in the Second World War, American firebombing flattened the entire country, sparing only the cultural capital of Kyoto. Then came the Kobe earthquake of 1995.

Each time, the Japanese have rebuilt, bigger and better. One hopes and expects that they will do the same again.

The Daily Telegraph, 15 March 2011

By John Stossel

(http://townhall.com/columnists/johnstossel/2011/03/09/obamas_green-jobs_fantasies)
3/9/2011

Anyone who understands basic economics already knows that President Obama’s $2.3 billion green-jobs initiative was snake oil. Now, thanks to Kenneth P. Green, we have statistics as well as theory to prove it.
In a new article, “The Myth of Green Energy Jobs: The European Experience,” the environmental scientist and a resident scholar at the American Enterprise Institute writes, “Green programs in Spain destroyed 2.2 jobs for every green job created, while the capital needed for one green job in Italy could create almost five jobs in the general economy.”
Ironically, Obama boasts his initiative “will help close the clean-energy gap between America and other nations.” But Green says, “(C)ountries are cutting these programs because they realize they aren’t sustainable and they are obscenely expensive.”
Obama claims that if we “invest” more, “the transition to clean energy has the potential to grow our economy and create millions of jobs — but only if we accelerate that transition.”
What could make more sense? A little push from the smart politicians and — voila! — we can have an abundance of new good-paying jobs and a cleaner, sustainable environment. It’s the ultimate twofer.
Except it’s an illusion, as economic logic demonstrates.
“It is well understood, among economists, that governments do not ‘create’ jobs,” Green writes. “The willingness of entrepreneurs to invest their capital, paired with consumer demand for goods and services, does that. All the government can do is subsidize some industries while jacking up costs for others. In the green case, it is destroying jobs in the conventional energy sector — and most likely in other industrial sectors — through taxes and subsidies to new green companies that will use taxpayer dollars to undercut the competition. The subsidized jobs ‘created’ are, by definition, less efficient uses of capital than market-created jobs.”
Green is using good, solid economic thinking. Many years ago, Henry Hazlitt wrote in his bestseller, “Economics in One Lesson,” “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
In judging any government initiative, such as Obama’s green-jobs plan, you can’t look just at the credit side of ledger because the government is unable to give without first taking away.
Worse than that: Inevitably, more is taken away — destroyed — than is given because the government substitutes force and taxation for consent and free exchange. Instead of a process driven by consumer preferences, we get one imposed by politicians’ grand social designs. It’s what F.A. Hayek called “the fatal conceit.”
So we shouldn’t be surprised that green-jobs programs make energy more expensive. “(F)orcing green energy on the market (is) much, much more expensive,” Green said. “Using Spain as a model, when you do the math, you realize that creating 3 million new green jobs could cost $2.25 trillion.”
Of course, many people who push “green jobs” want the price of energy to rise so we’ll use less. If the environmental lobby wants Americans to be poorer, it ought to come clean about that.
The advocates of such programs don’t just misunderstand economics. They have lapsed into a pre-economic mentality. Rulers once believed they could do whatever they wanted, subject only to the physical laws of nature. If things didn’t work out as planned, it was because the people had failed to cooperate. But as economist Ludwig von Mises wrote, once economics emerged as an intellectual discipline, “it was learned that in the social realm too there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success … .”
That “something” is inescapable economic forces like the law of supply and demand.
Green is right when he says, “Central planners in the United States trying to promote green industry will fare no better (than Europe) at creating jobs or stimulating the economy.”
John Stossel
John Stossel is host of “Stossel” on the Fox Business Network. He’s the author of “Give Me a Break” and of “Myth, Lies, and Downright Stupidity.” To find out more about John Stossel, visit his site at johnstossel.com

11:19 AM, MAR 4, 2011 • BY JONATHAN V. LAST (http://www.weeklystandard.com/blogs/car-talk_552899.html)

Hey everybody–it’s the Age of the Electric Car! Sales numbers for the Chevy Volt are out and you’ll never guess how many of these future machines consumers gobbled up in the month of February. Go ahead and try. I’ll wait.Is that your final answer? Okay. Well the real number is:

281.

Yup. 281 Volts were sold in February. That might sound terrible to you, but it’s actually really strong. Because Nissan only sold 67 Leafs (Leaves?), and the Leaf is both cheaper and, as far as over-priced econo-boxes go, way better than the Volt. So really, the Volt is doing pretty great. In fact, if you had told GM execs last year that the Volt was going to out-sell the Leaf by more than 4-to-1, they would have been thrilled.

Now if you wanted to be a Grumpy Gus and fixate on the bad news, it’s true that the trend isn’t great. In January, GM moved 321 Volts, so February represents a 12 percent decline. But again, there’s a bright side: Leaf sales dropped by 23 percent! So actually, the Volt has better legs than its prime competitor, too.

What, you want more good news? Okay, how about this: Because the Volt and Leaf sales are so . . . emerging, taxpayers saved money! The government gives everyone who buys one of the overpriced Volts or Leafs $7,500. So every electric car that doesn’t sell is money back in our pocket!

The only problem real problem is what these numbers mean for President Obama’s goal of having 1 million electric cars on the road by 2015. At this rate, it’ll take 232 years to hit that mark. But never fear. As Fred Barnes reminds us, Washington won’t ever give up trying to influence how Americans drive. They’ll think of something.

Bonus Fun Fact: The Volt’s 2011 production run was originally supposed to be 60,000 units. GM cut that number to 10,000 units. At this rate, the Volt is on track to sell 3,612 Volts this year. (Assuming sales don’t decline any further).

By BARRY EICHENGREEN

The single most astonishing fact about foreign exchange is not the high volume of transactions, as incredible as that growth has been. Nor is it the volatility of currency rates, as wild as the markets are these days.

Instead, it’s the extent to which the market remains dollar-centric.

Consider this: When a South Korean wine wholesaler wants to import Chilean cabernet, the Korean importer buys U.S. dollars, not pesos, with which to pay the Chilean exporter. Indeed, the dollar is virtually the exclusive vehicle for foreign-exchange transactions between Chile and Korea, despite the fact that less than 20% of the merchandise trade of both countries is with the U.S.

Chile and Korea are hardly an anomaly: Fully 85% of foreign-exchange transactions world-wide are trades of other currencies for dollars. What’s more, what is true of foreign-exchange transactions is true of other international business. The Organization of Petroleum Exporting Countries sets the price of oil in dollars. The dollar is the currency of denomination of half of all international debt securities. More than 60% of the foreign reserves of central banks and governments are in dollars.

The greenback, in other words, is not just America’s currency. It’s the world’s.

But as astonishing as that is, what may be even more astonishing is this: The dollar’s reign is coming to an end.

I believe that over the next 10 years, we’re going to see a profound shift toward a world in which several currencies compete for dominance.

The impact of such a shift will be equally profound, with implications for, among other things, the stability of exchange rates, the stability of financial markets, the ease with which the U.S. will be able to finance budget and current-account deficits, and whether the Fed can follow a policy of benign neglect toward the dollar.

The Three Pillars
How could this be? How could the dollar’s longtime most-favored-currency status be in jeopardy?

See the share of global foreign-exchange transactions involving the dollar, and the dollar’s share of official global foreign-exchange reserves.

To understand the dollar’s future, it’s important to understand the dollar’s past—why the dollar became so dominant in the first place. Let me offer three reasons.

First, its allure reflects the singular depth of markets in dollar-denominated debt securities. The sheer scale of those markets allows dealers to offer low bid-ask spreads. The availability of derivative instruments with which to hedge dollar exchange-rate risk is unsurpassed. This makes the dollar the most convenient currency in which to do business for corporations, central banks and governments alike.

Second, there is the fact that the dollar is the world’s safe haven. In crises, investors instinctively flock to it, as they did following the 2008 failure of Lehman Brothers. This tendency reflects the exceptional liquidity of markets in dollar instruments, liquidity being the most precious of all commodities in a crisis. It is a product of the fact that U.S. Treasury securities, the single most important asset bought and sold by international investors, have long had a reputation for stability.

Finally, the dollar benefits from a dearth of alternatives. Other countries that have long enjoyed a reputation for stability, such as Switzerland, or that have recently acquired one, like Australia, are too small for their currencies to account for more than a tiny fraction of international financial transactions.

What’s Changing
But just because this has been true in the past doesn’t guarantee that it will be true in the future. In fact, all three pillars supporting the dollar’s international dominance are eroding.

First, changes in technology are undermining the dollar’s monopoly. Not so long ago, there may have been room in the world for only one true international currency. Given the difficulty of comparing prices in different currencies, it made sense for exporters, importers and bond issuers all to quote their prices and invoice their transactions in dollars, if only to avoid confusing their customers.

Now, however, nearly everyone carries hand-held devices that can be used to compare prices in different currencies in real time. Just as we have learned that in a world of open networks there is room for more than one operating system for personal computers, there is room in the global economic and financial system for more than one international currency.

Second, the dollar is about to have real rivals in the international sphere for the first time in 50 years. There will soon be two viable alternatives, in the form of the euro and China’s yuan.

Americans especially tend to discount the staying power of the euro, but it isn’t going anywhere. Contrary to some predictions, European governments have not abandoned it. Nor will they. They will proceed with long-term deficit reduction, something about which they have shown more resolve than the U.S. And they will issue “e-bonds”—bonds backed by the full faith and credit of euro-area governments as a group—as a step in solving their crisis. This will lay the groundwork for the kind of integrated European bond market needed to create an alternative to U.S. Treasurys as a form in which to hold central-bank reserves.

China, meanwhile, is moving rapidly to internationalize the yuan, also known as the renminbi. The last year has seen a quadrupling of the share of bank deposits in Hong Kong denominated in yuan. Seventy thousand Chinese companies are now doing their cross-border settlements in yuan. Dozens of foreign companies have issued yuan-denominated “dim sum” bonds in Hong Kong. In January the Bank of China began offering yuan-deposit accounts in New York insured by the Federal Deposit Insurance Corp.

Allowing Chinese companies to do cross-border settlements in yuan will free them from having to undertake costly foreign-exchange transactions. They will no longer have to bear the exchange-rate risk created by the fact that their revenues are in dollars but many of their costs are in yuan. Allowing Chinese banks, for their part, to do international transactions in yuan will allow them to grab a bigger slice of the global financial pie.

Admittedly, China has a long way to go in building liquid markets and making its financial instruments attractive to international investors. But doing so is central to Beijing’s economic strategy. Chinese officials have set 2020 as the deadline for transforming Shanghai into a first-class international financial center. We Westerners have underestimated China before. We should not make the same mistake again.

Finally, there is the danger that the dollar’s safe-haven status will be lost. Foreign investors—private and official alike—hold dollars not simply because they are liquid but because they are secure. The U.S. government has a history of honoring its obligations, and it has always had the fiscal capacity to do so.

But now, mainly as a result of the financial crisis, federal debt is approaching 75% of U.S. gross domestic product. Trillion-dollar deficits stretch as far as the eye can see. And as the burden of debt service grows heavier, questions will be asked about whether the U.S. intends to maintain the value of its debts or might resort to inflating them away. Foreign investors will be reluctant to put all their eggs in the dollar basket. At a minimum, the dollar will have to share its safe-haven status with other currencies.

A World More Complicated
How much difference will all this make—to markets, to companies, to households, to governments?

One obvious change will be to the foreign-exchange markets. There will no longer be an automatic jump up in the value of the dollar, and corresponding decline in the value of other major currencies, when financial volatility surges. With the dollar, euro and yuan all trading in liquid markets and all seen as safe havens, there will be movement into all three of them in periods of financial distress. No one currency will rise as strongly as did the dollar following the failure of Lehman Bros. There will be no reason for the rates between them to move sharply, something that would potentially upend investors.

But the impact will extend well beyond the markets. Clearly, the change will make life more complicated for U.S. companies. Until now they have had the convenience of using the same currency—dollars—whether they are paying their workers, importing parts and components, or selling their products to foreign customers. They don’t have to incur the cost of changing foreign-currency earnings into dollars. They don’t have to purchase forward contracts and options to protect against financial losses due to changes in the exchange rate. This will all change in the brave new world that is coming. American companies will have to cope with some of the same exchange-rate risks and exposures as their foreign competitors.

Conversely, life will become easier for European and Chinese banks and companies, which will be able to do more of their international business in their own currencies. The same will be true of companies in other countries that do most of their business with China or Europe. It will be a considerable convenience—and competitive advantage—for them to be able to do that business in yuan or euros rather than having to go through the dollar.

U.S. Impact
In this new monetary world, moreover, the U.S. government will not be able to finance its budget deficits so cheaply, since there will no longer be as big an appetite for U.S. Treasury securities on the part of foreign central banks.

Nor will the U.S. be able to run such large trade and current-account deficits, since financing them will become more expensive. Narrowing the current-account deficit will require exporting more, which will mean making U.S. goods more competitive on foreign markets. That in turn means that the dollar will have to fall on foreign-exchange markets—helping U.S. exporters and hurting those companies that export to the U.S.

My calculations suggest that the dollar will have to fall by roughly 20%. Because the prices of imported goods will rise in the U.S., living standards will be reduced by about 1.5% of GDP—$225 billion in today’s dollars. That is the equivalent to a half-year of normal economic growth. While this is not an economic disaster, Americans will definitely feel it in the wallet.

On the other hand, the next time the U.S. has a real-estate bubble, we won’t have the Chinese helping us blow it.

Dr. Eichengreenis the George C. Pardee and Helen N. Pardee professor of economics and political science at the University of California, Berkeley. His new book is “Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.” He can be reached at reports@wsj.com

Politicians formed the IPCC over 20 years ago with an endgame in mind: to regulate CO2 emissions. I know, because I witnessed some of the behind-the-scenes planning. It is not a scientific organization. It was organized to use the government-funded scientific research establishment to achieve policy goals.

Now, that’s not necessarily a bad thing. But when they are portrayed as representing unbiased science, that IS a bad thing. If anthropogenic global warming – and ocean `acidification’ (now there’s a biased and totally incorrect term) – ends up being largely a false alarm, those who have run the IPCC are out of a job. More on that later.

I don’t want to be misunderstood on this. IF we are destroying the planet with our fossil fuel burning, then something SHOULD be done about it.

But the climate science community has allowed itself to be used on this issue, and as a result, politicians, activists, and the media have successfully portrayed the biased science as settled. They apparently do not realize that `settled science’ is an oxymoron.

The most vocal climate scientists defending the IPCC have lost their objectivity. Yes, they have what I consider to be a plausible theory. But they actively suppress evidence to the contrary, for instance attempts to study natural explanations for recent warming.

That’s one reason why the public was so outraged about the ClimateGate e-mails. ClimateGate doesn’t prove their science is wrong.but it does reveal their bias. Science progresses by investigating alternative explanations for things. Long ago, the IPCC all but abandoned that search.

Oh, they have noted (correctly I believe) that a change in the total output of the sun is not to blame. But there are SO many other possibilities, and all they do is dismiss those possibilities out of hand. They have a theory – more CO2 is to blame – and they religiously stick to it. It guides all of the research they do.

The climate models are indeed great accomplishments. It’s what they are being used for that is suspect. A total of 23 models cover a wide range of warming estimates for our future, and yet there is no way to test them for what they are being used for! climate change predictions.

Virtually all of the models produce decadal time scale warming that exceeds what we have observed in the last 15 years. That fact has been known for years, but its publication in the peer reviewed literature continues to be blocked.

My theory is that a natural change in cloud cover has caused most of the recent warming. Temperature proxy data from around the world suggests that just about every century in the last 2,000 years has experienced warming or cooling. Why should today’s warmth be manmade, when the Medieval Warm Period was not? Just because we finally have one potential explanation – CO2?

This only shows how LITTLE we understand about climate change.not how MUCH we know.

Why would scientists allow themselves to be used in this way? When I have pressed them on the science over the years, they all retreat to the position that getting away from fossil fuels is the `right thing to do anyway’.

In other words, they have let their worldviews, their politics, their economic understanding (or lack thereof) affect their scientific judgment. I am ashamed for our scientific discipline and embarrassed by their behavior.

Is it any wonder that scientists have such a bad reputation among the taxpayers who pay them to play in their ivory tower sandboxes? They can make gloom and doom predictions all day long of events far in the future without ever having to suffer any consequences of being wrong.

The perpetual supply of climate change research money also biases them. Everyone in my business knows that as long as manmade climate change remains a serious threat, the money will continue to flow, and climate programs will continue to grow.

Now, I do agree the supply of fossil fuels is not endless. But we will never actually “run out”.we will just slowly stop trying to extract them as they become increasingly scarce (translation – more expensive). That’s the way the world works.

People who claim we are going to wake up one morning and our fossil fuels will be gone are either pandering, or stupid, or both.

But how you transition from fossil fuels to other sources of energy makes all the difference in the world. Making our most abundant and affordable sources of energy artificially more expensive with laws and regulations will end up killing millions of people.

And that’s why I speak out. Poverty kills. Those who argue otherwise from their positions of fossil-fueled health and wealth are like spoiled children.

The truly objective scientist should be asking whether MORE, not less, atmospheric carbon dioxide is what we should be trying to achieve. There is more published real-world evidence for the benefits of more carbon dioxide, than for any damage caused by it. The benefits have been measured, and are real-world. The risks still remain theoretical.

Carbon dioxide is necessary for life on Earth. That it has been so successfully demonized with so little hard evidence is truly a testament to the scientific illiteracy of modern society. If humans were destroying CO2 – rather than creating more – imagine the outrage there would be at THAT!

I would love the opportunity to cross examine these (natural) climate change deniers in a court of law. They have gotten away with too much, for too long. Might they be right? Sure. But the public has no idea how flimsy – and circumstantial – their evidence is.

In the end, I doubt the IPCC will ever be defunded. Last night’s vote in the House is just a warning shot across the bow. But unless the IPCC starts to change its ways, it runs the risk of being totally marginalized. It has almost reached that point, anyway.

And maybe the IPCC leadership doesn’t really care if its pronouncements are ignored, as long as they can jet around the world to meet in exotic destinations and plan where their next meeting should be held. I hear it’s a pretty good gig.