Wednesday, March 16, 2011

Nuclear Energy, Oil, Alternatives, Markets, Speculation, Wars and Leadership...

Nuclear Energy, Oil, Alternatives, Markets, Speculation, Wars and Leadership...?

Another dictator is clueless... No wonder King Abdullah Al-Saud is reestablishing contacts with Bashar Assad. Crypto-Zionist Dictators have to stand together....with Kaddafi and Bahrain's thugs....

Washington and Tel Aviv preside over a violent roll-back of the Arab Revolution from Benghazi to Bahrain....
UN "No-fly Zone" appears to have been a diplomatic strawman to give Qaddafi cover to hit Benghazi hard as UN coalition bickers over details....

What a warped view of the world... Dissent, freedom of expression and diversity are viewed as destructive punishable activities in their book.... Do we really need to hold the believers in such views in anything besides derision? Saudi Arabia, Syria, Jordan, Morocco etc. are quickly becoming the last refuge of authoritarian dictators in the world....

“If kindness and comfort are, as I suspect, the results of an energy surplus, then, as the supply contracts, we could be expected to start fighting once again like cats in a sack.”

Such issues as crude oil prices, "peak oil," and nuclear power alternatives are, or should be, in the forefront of our considerations....

A renewed emphasis on energy issues is in full swing/discussions..., globally....

The mechanisms that control oil spot prices.

Hedge funds are factoring in the many variables that effect the eventual supply/demand balance...most of which are perceptions of future supply/demand rather than actual measurements of supply (inventories) / demand (purchases, orders, etc). Some of these variables are:

Actual supply vs. actual demand

Perception of supply vs. perception of demand

Economic strength (demand) from emerging economies (China, India, etc) who are the recent marginal buyers.....

Value of USD vs. other currencies (as USD devalues, oil prices go up)

US Fed monetary policies (printing money out of thin air (QE1, QE2; lowering interest rates; guaranteeing and backstopping credits, etc) easing raises oil price; tightening lowers it

US Fiscal policy: deficit spending raises oil price as it increases demand in short run

Technical trading factors: see technical analysis

Political risks (wars, threats of wars,

So, in sum, speculation is merely an attempt to predict present/future supply/demand balance given the many variables which effect supply and demand.

Major factor effecting current price run-up are 1. QE2 (the Fed is keystroking hundreds of billions of dollars on their keyboards and directing this free money to primary dealers (banks) who are purchasing hard/tangible assets like oil in anticipation of declining value of USD due to Fed increasing supply of USD without any work/product/value backing the USDs....

most oil prices are set by the members of the OPEC nations in term of set prices, often monthly [ to different markets - e.g. Orient, USA, etc]. The hedge funds gamble on trying to forerun the prices as set by OPEC {& Russia mostly to Europe]. If they guess right they make lots of money, if they guess wrong they loose a lot of money,

WTI reflects the idiotic pipeline situation to Cushing, Brent prices are the spot prices for reference quality oil, neither has anything to do with the monthly price setting power of Saudi Arabia, Russia, Iran et al [the countries which have control of their oil, as opposed to having the USA/UK/etc corporations setting prices.]

Both WTI [in N America and Brent [in rest of world] reflect the spot prices, that is prices for extra oil over the contracts by OPEC, Russia, et al, and that produced by capitalist corporations. I do read the oildrum daily for a number of years, and notwithstanding Japan's nuclear accidents, there is no other choice to compensate for decline in oil and gas in the mid to long term.
Energy in and energy out [ a standard measurement of productivity in energy supplies] indicates that there is no panacea in wind and solar, for both are very intermittent [problem of storage]. Bio based production is at best even, if not negative procedure in Energy Balance.

Perhaps the major powers should devote more research into THORIUM liquid salt nuclear plants, and less in maintaining the useless A-bombs [the USA spends 14 billion dollars per year on this useless armament].
Theoretically there is no possibility of melt down in Thorium/liquid salt nuclear plants, theoretically they are cheaper to build and have less radioactive byproducts in need of disposal, and do not have to be changing fuel regularly. No need for reprocessing fuel rods/balls.

Chapter 4 of Matt Taibbi's Griftopia.

Taibbi's chapter is one of THE MOST accessible I've seen on how this all should work versus how we're letting it work. He briefly touches on it in his weekly mailbag, its the last question he answers this week:

Just an FYI - he writes like a sailor talks, so if you don't like foul language, you've been warned...

Some explanation, partially derived from Mr. Taibbi's reporting. Basically what happened is that in the 1980s the big Wall Street financial companies bought into a bunch of different firms that held seats on the commodities exchanges. Then they began to lobby for changes in how speculation could occur. The Commodity Exchange Act from the 1930s was intended to, and did, prevent speculators from making hash of commodity prices, most of which are day to day necessities by placing limits on the positions they could take. Basically the speculators, which are necessary for the proper function of a commodities exchange, were limited in what they could do. There sole purpose is supposed to be that the people that grow or produce the raw material that is the commodity or turn it into an actual, tangible physical product(both groups known as physical hedgers) would always be able to find either a buyer of the raw material or a seller of it. So the speculator was created.

This individual will buy the raw material even if no one from the convert it into something to be consumed sector is buying. And then this speculator will sell the raw material to the manufacturer on days when there are no raw material producers selling. Basically the speculator was (is) supposed to be limited to acting like a type of escrow account for raw materials so the sale of commodities doesn't seize up. This also allows both the producers of the raw materials, as well as the consumers of them who turn them into finished products (whether its corn into breakfast cereal or petroleum into gasoline)to lock in fairly stable prices, i.e. hedging against future risk, which in turn result in fairly stable prices for the rest of us who are just consumers. the whole point of the exchange is to hedge against risk of locusts, drought, whatever could interrupt the production chain somewhere.

So what happens is that in the 90s the commodities trading companies (now owned by big financial firms) began asking the government for a relaxation on the limits to the speculative positions they could take that are set by the law from the 1930s (which were created as this was the last time they blew up the commodities market...) Basically they argued that just like the farmers and petroleum companies they were taking big risks too, so they should be able to reap big rewards. Instead of being the grist that keeps the mill wheel rolling, they argued that they needed to be viewed as important as the mill, the miller, and the material being ground. They didn't want to be considered as speculators anymore, they wanted to by physical hedgers. Once the government agreed to this in the early 90s, the limits placed on the positions the speculators could take was essentially eliminated.

This was all done by the Commodities Futures Trading Commission through letters to 17 different companies. And was largely done in secret. Once this occurred, over the next almost 20 years, more and more of the trading on the commodities exchanges becomes purely speculative. Its no longer intended to match up buyers/consumers of raw materials to be converted to finished products with the sellers/producers of the raw materials, now its intended to function like a major profit making market. And its self feeding. The more money that is invested into the commodities markets, the more expensive the commodities get. Everything winds up being a long position because the money is chasing the commodity which is now chasing the money. So leading up to the petroleum price insanity of 2008, just like now, nothing in reality, other than pouring speculative money into the commodities market, can explain the rise in oil prices.

Production wasn't down, the Chinese weren't actually consuming so much more that supplies were tight, in fact supplies weren't tight at all. And they aren't now. Even information that could lead to a fear based spike really shouldn't have mattered then, just as it shouldn't today. We get virtually no oil from Libya, the Suez Canal is still open for business, and the Saudis have made it clear they'll pump more to make up the difference. Demand isn't up in the US, its not spiking in China. So what's driving up the price? Speculation in the commodities markets - basically commodities as speculative bubble....

Here's another good source on what happened in 2008...

Nuclear risks....

A Thorium plant is unlikely to be built even though the theoretical fission cycle is promising. Oakridge National Laboratories already did significant research into these in the late '60s. Similarly the Atomic Energy Commission had research on BWR's (boiling water reactors) in the 1950's. The problems seen now were discussed then. These were only built for one reason, lower construction cost. The issue that won't be discussed is summed up in 6 words, 'free market and less government regulation'. What is happening at Fukushima is one shining example of why regulation and accurate scientific knowledge are necessary today. The problems at Fukushima are the result of an earthquake and tidal wave, not an accident. The risks of any such combination in most of the US is pretty close to zero.

What should be getting asked is just what is the USN doing. It's been almost 5 full days, don't they have a ship in place as a platform for airlifting in de-mineralized/borated water for use in cooling these plants? Emergency diesel generators and associated cables and switch gear for replacing those damaged by flooding? Air compressors and piping? Surely the list of materials shouldn't be that difficult to create nor airlifting said equipment from, if necessary, us utility companies, to somewhere nearby where it can be sent in. If it no one in naval reactors (or whatever they call it now) has taken initiative to make some of this happen more than a few heads should roll. I can't imagine that Rickover would have waited 5 hours much less 5 days get things done....?


The oil companies funded the entire anti-nuclear movement in the 1970s, which successfully shut down any new nuclear power construction in the United States for the past 40 years. Look at the Rockefeller (Standard Oil) funding of the Natural Resources Defense Council (NRDC) as just one example, and the role of Royal Dutch Shell's Futures Group in the same.

Prior to the mid-1970s, most oil contracts were 20 year state-to-multinational fixed price contracts. By the mid-1970s, the spot market had opened the speculative factor on oil prices, and suddenly, the whole speculative racket was off and running, between insurance prices, sales and resales, often a dozen times between the time an oil supertanker left the port and arrived at the final refinery destination. Later, hedge funds and other strictly speculative outfits got into the act--big-time--and tacked another speculative price spike on top of what OPEC and the oil companies themselves were charging as add-on profits.

As far as I can tell, peak oil is a propaganda tool, used by those speculating on oil futures, to artificially keep prices outrageously high, by playing the scare card. Between vast untapped sources of oil, yet to even be discovered, and the prospect of a big expansion of nuclear power--even despite the tragic events in Japan--there ought to be a serious cut in oil prices.

It has been raised that there should be strict regulations on the commodities futures markets. Simple rule: If you can't use it, you can't buy futures. Why should Goldman Sachs jack up prices of jet fuel, when they could not take delivery on the commodity they are "buying?" Yes, Southwest Airlines needs to hedge on future jet fuel price spikes, because they need the fuel at guaranteed prices to stay in business. So, put those kinds of sensible restrictions on who is allowed to trade on the futures markets. Otherwise, there is no reason on God's good earth why we cannot return to the pre-1970s system of long-term contracting for deliveries at stable prices, adjustable for overall inflation. Japan's last 25 year contract on Saudi crude oil expired just a few years ago.

And then, go nuclear in a really big way. There are many different designs of new generation nuclear power plants that are safe, and some models are not vulnerable to weapons grade proliferation. Pebble bed reactors were developed by the Germans and are now going commercial--in South Africa. India has been working on thorium reactors for decades, and have now commercially viable models set to put into production. Part of the problem has been the anti-science hysteria funded by the oil companies and their allied banks, and fueled by counterculture anti-science Luddism of the greenies. None of the so-called alternative energy sources like wind or solar produce enough energy or energy flux density (heat levels) to be commercially viable. They are, in fact, net losers. But nuclear is the clear wave of the future, until we do the last remaining scientific and technological work to perfect commercial fusion. Probably 15 years into the future, but we could have gone commercial a decade ago if research funding had not been cut back drastically.

With adequate nuclear energy, we can also solve the problems of water shortages, through high tech, high energy desalination. Let Saudi Arabia replace DuPont as the petrochemical giant, and let us have a serious plan to get beyond fossil fuel dependency over the next two or three generations. We are human beings. We can plan for the future, and use science to the benefit of mankind....

Here's another good source on what happened in 2008

The Union of Concerned Scientists has a good rundown in this transcript of a teleconference on what the concerns are (hat tip to the Balloon Juice folks):

And off to the right on the links there's one for nuclear power safety....

Japan is a good example of how to handle oil. For many years, Japan has always had all of the oil it ever needed, all without the ecological degradation caused by its extraction. In WWII, Japan tried to conquer the resource sources and failed. Since then, it has just been a consumer and purchased at market prices and has done well. Regardless of whether you own the resources, or conquer them, or whether you buy them, ultimately you get them at the prevailing world market price. Perhaps, we should stop the warring and let our traders do all of the work for us and let our engineers compete to discover the best extraction process so we will make the most money providing technology and know-how on the extraction end of the equation. Germany is a great example of a country that has failed at warring and won on providing services and technology. China may already have learned the lesson that trade and services are more successful and profitable than warring....

There are a number of issues conflated here.

There is the question of the workings of the market itself, then there is the question of supply and demand for oil. The issue with the workings of the market is corruption. That comes from Three sources: Sovereign corruption - which is market manipulation by China, Saudi Arabia and others for their own purposes. Then there is organized crime. Then there are the Hedge Funds.

Regulators, and most probably others, do not seem interested in stemming corruption otherwise there would be a world wide ban on naked short selling, among other things, by now.

As for the Hedge funds, In 2008(?) during the last price spike, I watched an Australian billionaire take a call from New York and then announce to all within earshot that he was now "in the Oil business". The trick for these guys is to know when to quit while ahead.

Contrary to popular opinion, a little speculation is necessary in commodity markets to provide liquidity. The trouble comes when "Synthetic" investment products backed by notional commodities are created. For example the volume of Gold backed "investment" securities is Two Hundred Times the worlds physical store of the metal. This has lead one group of economists to advise its clients that if they wish to invest in Gold , then it must be physical metal, stored personally. All those holdings "stored in our secure vaults in Jersey" are vapor should there ever be a run on gold.

As for oil supply, Wikileaks reports that U.S. Diplomats believe Saudi reserves are nothing like what they suggest. However that is not the main problem. Others have pointed out that we will never run out of oil. What we will run out of is easily extractable and therefore cheap oil.

As for oil demand, I said in another forum around year 2000, that if America, as the worlds biggest oil consumer, didn't curb its appetite for cheap oil voluntarily by Government intervention, then the market would do it for you, with much more concomitant pain.

However there is an even bigger issue to do with oil - that is to do with productivity. When an Indian or Chinese peasant buys a motorized pump or replaces a horse and cart with a truck, he doubles, or quadruples his productivity. He can and will be motivated to pay much more for oil than some American guy who wants to drive his Hummer to McDonald's.

To put it simply Oil in America has been too cheap for too long and the inevitable market distortions this created will be corrected in due course by the free market, if it is allowed to.

To put it another way, why isn't America producing a wide range of the worlds most fuel efficient vehicles? American primacy is a given in many other fields of Endeavor, why not this one?

The Oil Depletion Analysis Centre:
and The Association for Study of Peak Oil.
The global heating problems are well-known to non-deniers. The "acid ocean" problems will become unavoidably knowable over the next couple of decades.

This is a complicated issue to say the least. So many variables and factors.

As the US floated two world wars for our allies on our oil, it is logical that we have significantly less now of the more easily obtained hydrocarbons. This is not to say that similar or other forms, more difficult of access and recovery, are not under our soil or sea space.

1. Economic security is a fundamental element of national security.

2. Supposedly the "lessons learned" from the 1920s-30s led to reforms such as various legislation to regulate markets to protect them from fraud, manipulation ,etc. Glass- Steagall for banking, other legislation for commodities trading, and the like.

3. But "deregulation" took away reforms including regulations in the public interest. Lessons unlearned. Why? Disaster follows severely undermining our economy and thus our national security

Pogo theory obtains, the enemy is (some of) us.

4. It does not take much imagination to consider that various techniques of economic warfare can be used more easily in unregulated markets. There is much more to contend with out there than the so-called "sovereign funds" issue.

For example, can hedge funds act as instruments of economic warfare? Can sovereign funds engage in "soft" economic warfare?

The following is a very interesting article; gasoline-alternative produced by bio-engineered bacteria. The authors claim producing about 1.5-2% by volume of gasoline from these bacteria, but it is not clear how long this took. Interestingly, the researchers are Japanese. If successful, this provides a carbon neutral way to manufacture fuel that can be used by our current infrastructure. Technology doesn't get much greener than this....

[Those naive enough to believe there is no such thing as economic warfare need not apply....]



"Get the corporate boardroom out of the newsroom."


Marc Faber talks about how a nuclear meltdown will hurt the yen.... More quantitative easing to come from Ben Shalom Bernanke...., QE3, QE4.....

"If a meltdown occurs, all bets are off." -- Marc Faber

Talk about gouging people in times of need.....

"The potassium iodide bubble is growing. The list price of a 14-tablet pack: $5.99. Asking price $300-$400!" -- Jim Sinclair

Click here to view the listings…


The oil companies couldn't be happier with the coverage of this sad event in Japan....

Science Insider noted yesterday:

The Daiichi complex in Fukushima, Japan ... had a total of 1760 metric tons of fresh and used nuclear fuel on site last year, according to a presentation by its owners, the Tokyo Electric Power Company (Tepco). The most damaged Daiichi reactor, number 3, contains about 90 tons of fuel, and the storage pool above reactor 4, which the Nuclear Regulatory Commission's (NRC's) Gregory Jaczko reported yesterday had lost its cooling water, contains 135 tons of spent fuel. The amount of fuel lost in the core melt at Three Mile Island in 1979 was about 30 tons; the Chernobyl reactors had about 180 tons when the accident occurred in 1986.

And see this.

That means that Fukushima
-Daiichi has nearly 10 times more nuclear fuel than Chernobyl.

It also means that a single spent fuel pool - at reactor 4, which has lost all of its water and thus faces a release of its radioactive materials- has
75% as much nuclear fuel as at all of Chernobyl.

However, the real numbers are even worse.

Specifically, Tepco very recently transferred many more radioactive spent fuel rods into the storage pools. According to
Associated Press, there were - at the time of the earthquake and tsunami - 3,400 tons of fuel in seven spent fuel pools plus 877 tons of active fuel in the cores of the reactors.

That totals 4,277 tons of nuclear fuel at Fukushima

Which means that there is almost
24 times more nuclear fuel at Fukushima-Daiichi than Chernobyl.

Yesterday, a top physicist says:

What [the Japanese] are doing is basically using squirt guns against a raging forest fire.

He says the Japanese should instead use the Chernobyl style approach of entombing the reactors in boric acid, sand and concrete.

Today, nuclear expert Robert Alvarez - a senior U.S. Department of Energy official during the Clinton administration - pointed out to Kyodo News that dumping seawater on the reactors might actually further damage them:

When combined with the high heat at the reactor site, the seawater currently being poured on the facilities could destroy their cooling pumps or even corrode the containment vessels holding the plant's nuclear fuel, increasing the difficulty of containing the radioactive material....


This is the price we ALL pay for our lopsided support of Israel Uber Alles....

In England, when I studied history, it was considered a given that the 1664 plague, followed by the great fire of 1665, led directly to a 400 year economic and Imperial boom. Not coincidentally, the new government brought in exiled European bankers, and the insurance, banking and finance business were allowed to thrive as never before in Europe. Catholic skittishness about such religious and cultural abstractions as "equity" "usury" and "social contracts" were tossed in the ash heap of history, albeit gingerly at first, with their more profitable Calvinist substitute doctrines gradually holding sway.

So at least some of TPTW, with whom I went to school and at whose castles and great houses I was a guest, were taught, as a given, that a destruction of the lower economic orders, combined with the destruction of their crappy infrastructure, especially in a capitol city, leads to huge opportunities for renewal and growth. This is hardly cynical. It is a simple fact.

Trouble is, a society dominated by educated psychopaths, with lackeys of a similar bent, as our society arguably is, will tend to induce such events, as warranted. See, e.g. Berlin, 1945, which was entirely rigged in advance, as the Germans were all too willing to hand it to Patton intact, but the US and UK demurred. Or more recently, New Orleans, which has become a milkier and wealthier type of city."

...Russia does about-turn
on key pipeline projects

Russia in the past month has abandoned a series of energy transit projects, some long in the planning, signaling the end of an era but leaving questions over the future of Turkey's relationships with its northern neighbor in the great power game. - Vladimir Socor

This is all so predictable that one has to wonder if this was the plan all along....

The plot thickens, and it could explain France's interest....

The EU has presented a strategy paper on the developments in North Africa. This includes the proposal of establishing an EU-South Mediterranean Energy Community. That could give the DESERTEC project a big boost. According to the EU's 2050 decarbonization scenario of reducing the emissions by more than 80 percent, "there is clear potential for building a partnership between the EU and Southern Mediterranean countries for the production and management of renewables, in particular solar and wind energy, and in having a joined-up approach ensuring energy security".......

Despite of current disturbances in North Africa, both, the DESERTEC Foundation and the Dii GmbH, express confidence that the concept will be implemented in EU-MENA. Current plannings, especially in Morocco, but also in further countries are not directly put at risk by the disturbances. A project like DESERTEC with its socio-economic benefits not only offers an approach to energy security but also creates perspectives for the region.......

Solar-thermal power plants: Win-win situation for North Africa and Europe

The Fraunhofer Institute for Solar Energy Systems (ISE), the Fraunhofer Institute for Systems and Innovation Research (ISI) and Ernst&Young published results of their joint study on the local manufacturing potential for CSP projects in the MENA region. According to their forecast, economies in this region will benefit greatly from the extension of concentrating solar-thermal power's (CSP) capacities and up to 80,000 jobs will be created, some of which are highly-qualified. Apart from that, there will be growth opportunities for European industry as well. An action plan developed within this study, shows a way how solar-thermal power plants, that might be funded by the Worldbank's Clean Technology Fund (CTF), can be implemented.....

I kept wondering why France took the lead on the Libya initiative, but I think we have the answer, and it has nothing to do with Sarkozy's election bid. That can always be bought, if need be, no need to start a war for something that can be done much more easily.

Desertec, a solar power project designed to supply some of Europe’s electricity needs from North Africa, will cooperate with France’s Medgrid group, Financial Times Deutschland reported today, citing Desertec’s Chief Executive Officer Paul van Son and Medgrid’s head Georges de Montravel....

China to maintain nuclear power goal

China's need for a greatly expanded energy base allied to its domestic commitment to rein in pollution means it is unlikely to pull back on plans to build more nuclear power plants, whatever the outcome of recently instituted reviews and a suspension of approvals for new projects. - Olivia Chung (Mar 29, '11)

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