Meanwhile, back in the real economy (again)

While it has been fun to watch kids discover some of the problems associated with allowing criminals to make all the important economic decisions, the real economy continues to stagger from one catastrophe to another.  I figure #OWS has two more phases to go in their intellectual assessments of the link between pathological levels of greed and a world that has very little opportunity for its young.  Right now in Phase One, they are just becoming aware of the evil represented by the moneychangers.  Phase Two will come when they try to come up with proposals for meaningful reform of a rotten system.  Phase Three comes when they attempt to harness a reformed financial system towards solving the big problems of the real economy.

Back when the USA was discovering how dependent their prosperity was on cheap oil after the Arab oil embargo of 1973, a professor from St. Louis by the name of Barry Commoner decided to run for the Presidency in 1980 on a platform of addressing the fact that oil production had peaked in continental USA.  I went to hear him speak.  He was a dreadful public speaker but he did include one of the great gems of wisdom of all time which he called his Iron Law of Non-Renewable Resources.  Briefly it says, "Every barrel of oil (ton of coal, uranium ore, etc.) taken from the ground makes the next barrel (etc.) harder to find and more expensive to extract."  Understand this and understanding much of rest of the real economy is much easier.

Even so, it is interesting to see updated evidence that the law still works—well.

Not A Myth: The Skyrocketing Cost Of New Oil Supply
Gregor MacDonald | Oct. 22, 2011

The next time you hear someone asserting that oil extraction “was always difficult and expensive”—as a way to refute the very high cost now of the marginal barrel—you’ll know they’re spinning a folk tale.

A helpful chart from the just released EIA Annual Energy Review shows that the capital required to add an additional barrel of oil to reserves experienced a step change starting last decade. The chart uses the COE unit (crude oil equivalent) which is a way to measure the cost of adding 5.8 million btu regardless of whether the resource is oil, natural gas, or natural gas liquids.



Two points are relative here. Firstly, the spike is concurrent with the six year peak in global oil production, which began in 2005. This should be rather obvious, if not expected.

Secondly, however, there is another “cost” associated with our attempt to obtain the next barrel of liquid fossil fuels in our new, resource-constrained era. These resources are difficult to access and extract precisely because a more aggressive disturbance of the earth must be undertaken to secure them. more

And then there is that other problem of the gazillion fires—we are changing our climate and overloading our other carbon sinks.  A simple explanation in the spirit of Commoner might be, "You cannot take the carbon that nature sequestered for millions of years and shoot it back into the atmosphere in 200 years and expect not to cause problems."  Anyway, the climate-change deniers have suffered a fatal blow.  After this latest study, only folks who deny science itself can deny the climate-change evidence.  Of course, this has long been true but the carbon industries are rich and crackpots are cheap, so maybe we won't be able to move on to actually solving anything.

Global warming study finds no grounds for climate sceptics' concerns
Independent investigation of the key issues sceptics claim can skew global warming figures reports that they have no real effect

Ian Sample, science correspondent
guardian.co.uk, Thursday 20 October 2011

The world is getting warmer, countering the doubts of climate change sceptics about the validity of some of the scientific evidence, according to the most comprehensive independent review of historical temperature records to date. 

Scientists at the University of California, Berkeley, found several key issues that sceptics claim can skew global warming figures had no meaningful effect. 

The Berkeley Earth project compiled more than a billion temperature records dating back to the 1800s from 15 sources around the world and found that the average global land temperature has risen by around 1C since the mid-1950s. 

This figure agrees with the estimate arrived at by major groups that maintain official records on the world's climate, including Nasa's Goddard Institute for Space Studies in New York, the US National Oceanic and Atmospheric Administration (Noaa), and the Met Office's Hadley Centre, with the University of East Anglia, in the UK. 

"My hope is that this will win over those people who are properly sceptical," Richard Muller, a physicist and head of the project, said. 

"Some people lump the properly sceptical in with the deniers and that makes it easy to dismiss them, because the deniers pay no attention to science. But there have been people out there who have raised legitimate issues." 

Muller sought to cool the debate over climate change by creating the largest open database of temperature records, with the aim of producing a transparent and independent assessment of global warming. 

The initial reluctance of government groups to release all their methods and data, and the fiasco over emails from the University of East Anglia's Climatic Research Unit in 2009, gave the project added impetus. 

The team, which includes Saul Perlmutter, joint winner of this year's Nobel Prize in Physics for the discovery that the universe is expanding at an increasing rate, has submitted four papers to the journal Geophysical Research Letters that describe their work to date. 

Going public with results before they are peer-reviewed is not standard practice, but Muller said the decision to circulate the papers before publication was part a long-standing academic tradition of sanity-checking results with colleagues. more