speculation

July 05, 2008

Dam Single Points of Failure

By Fester:

Pittsburgh is a massive port.  The rivers provide a cheap, convienent, high volume highway for the transhipment of industrial goods and raw materials, most notably coal.  That coal is used for power generation to supply power both locally and to the mid-Atlantic seaboard, and as an intermediate good in the production steel.  However the river system is full of numerous single points of failures that could have very large repurcussions on both the region and the nation as Forbes reports on the state of the region's navigation system:

Should the Emsworth dam fail, it would isolate river activity around Pittsburgh, Crall said. Public utilities, industry, ecosystems and water supply would be harmed. Nearly 12,000 jobs would at risk...

Without the river transportation system, U.S. Steel would require either 160 railroad cars or 700 trucks a day, instead of 10 barges, to serve its Clairton Coke plant, said Lisa Roudabush, general manager for United States Steel Corp.'s Mon Valley Works.

A few weeks ago, I was looking at the question of best practice dissemination and I am still scratching my head as to whyDiesel_prices there is not more guerrilla warfare on water.  Some of that is because naval guerrilla warfare is called piracy in most cases, but I think this is an area of luck that we can not count on over the long term. River shipping is prone to single points of failures which in my eyes means attacks on river navigation systems should be high return on investment attacks as the substitution transportation methods are very costly.

For instance, a single barge requires seventy trucks to substitute for its capacity if the barges were stranded.  Paul Krugman posts this convienent chart of the fuel costs of diesel today.  Shifting to trucks instead of transport massively cuts down on profit margins, increases the opportunities for smuggling while also decreasing connectivity and existing elite/governing legitimacy.

These single points of failure are numerous and by their very nature, fairly brittle.  I wonder why similiar structures have not been attacked in Nigeria or Russia where there are significant navigable waterways and insurgent/terrorist groups.  Chechynan guerrillas have demonstrated a capacity for systemic infrastructure attacks in Russia, and MEND in Nigeria has developped its skill sets in taking down oil infrastructure to the point that it is capable of operating in the littoral and near-deep sea areas.  Why not the riverine system as the substitutes to it are expensive, and lacking in capacity to fully shift the load from a failure. 


(h/t to Chris Briem for a post that got this thought rolling for me)

July 04, 2008

British state capacity and Peak Brent Oil

By Fester:

Great Britain has been the recipient of a massive and fortunate fiscal gift for the past two generations.  It is an industrialized, modern, energy intensive nation that is also an oil exporter.  The North Sea offshore fields provided a steady, dependable counter-cyclical stream of oil revenue to the Exchequer while the mature British economy could produce returns that are comparable to returns on investment in the energy sector so the oil curse was at worse, mildly felt.  However, British oil production is in decline.  Since 2004, Britain has been a net oil importer and it has been importing in the face of record dollar and pound denominated prices.  Imports are increasing and the current account deficit is matching that increase. 

As the North Sea declines, there are fewer barrels of oil for the Government to tax, although it is receiving a much larger fee per barrel due to the price increases.  The North Sea is predicted to decline at double digit annual rates.  This will have a dramatic impact on the budget as a major revenue hole will be created that can not be papered over by higher revenues per barrel produced. 

We have looked at a similar situation in Mexico two months ago as the Mexican government receives roughly 40% of its revenue from taxation of oil production.  Mexico, like Great Britain, is seeing its major fields in serious decline.  Are these scenarios similar?

Higher prices are masking the pain at this point but Mexico is entering the Export-Land problem.  Higher local demand is keeping more of its oil off the international market and thus leading to a decline in hard currency earnings.  One estimate is that Mexican oil exports could go from a 2007 average of 1.67 million barrels per day to less than 280,000 barrels per day in 2016.  Even projecting high per barrel prices this is a net decline in overall revenue and a massive decline in revenue per capita. 

So given these trends, how much ability does the Mexican elite have to maneuver?  Not much at first glance unless they can clean up their own acts to free up resources for effective, responsive and localized public good projects that can not be matched by the drug gangs which are seeking to create a hollowed out and ineffective state. 

Great Britain is starting at a massive advantage over Mexico in that it is not the nexus of massive black market smuggling into the largest market in the world.  It also possesses significantly greater, deeper and more resilient social and civic capital networks.  However the crux of the problem remains; both governments have made very signficant promises that were significantly backed by oil revenues.  In the next few years, those oil revenues are under severe threat due to geology and physics and numerous promises may be broken as services are either not provided, or different constiuencies are taxed.  How will either government resolve the diminishment of their state capacity?

The Possible War with Iran

By BJ

While I do not give great odds for a US/Israeli strike on Iran in the waning days of the Bush administration, the possibility is certainly still there. Of course, as been noted here almost too many times to count, the stated rationale for such an attack is a steaming load of that which exits the south ends of a northbound herd of cattle, but that's never stopped the Bush team before.

In any case, I wanted to point to this excellent article by John Robb pointing out the broad strokes of what's likely to occur if such an attack takes place.

Any attack by the US/Israel on Iran will be ostensibly aimed at suppressing the Iranian nuclear program. However, it will quickly evolve into something much larger, an airpower-based EBO (effects based operation). The objective of this EBO will regime change (see the brief: "Collapsing Iran", April 2006, for more details on this) without a ground invasion.

As Robb notes, there are many who think that near sole reliance on airpower is the best way for the US to fight its wars. It is important to remember that one of the most successful campaigns of this type, the 1998 campaign over Kosovo, took about two-and-a-half months to break the will of a tiny power without little preparation to resist such a campaign and no capacity to cause pain to the wider world or its attackers in an attempt to shorten the campaign's duration.

Iran is much larger, has had time to study and prepare, and has the capacity to inflict damage on its opponents directly and others indirectly.

the Iranians have developed what they call a "Passive Defense" run by its paramilitary (the Basij), based on the lessons learned by Hezbollah during the 2006 war with Israel. Mansharof and Savyon have explored the tenets of Passive Defense with an excellent article now available on MEMRI.

. . .

In addition to Passive Defense, the Iranians are also likely planning asymmetric offensive operations aimed at shortening the engagement -- a form of strategic barrage designed to limit the duration of the EBO. . . . In Iran's case, this means a series of attacks (a combination of guerrilla, missile, and small boat attacks) on oil facilities and oil transportation routes with the intent of making the costs to the global economy so great that political pressure will quickly force an end to the engagement.

And that doesn't even get into the whole Iran-backed militias in Iraq or the groups they have relationships with in Afghanistan. Whatever else, it is abundantly clear that any attack on Iran will incur a far greater cost in blood and treasure than those trying to sell the idea are willing or capable of admitting.

July 03, 2008

Campaign Finance, Small Donors and Republicans

By Fester:

Mark Ambinger is passing along this tidbit from a major campaign finance reformer that has me scratching my head:

On the panel, Wertheimer, who called himself a "genetic optimist," said he is confident that the new Congress will pass, and the new president will sign, a major overhaul of the public financing system for presidential campaigns, a key feature of which is a four-to-one match of small dollar contributions.

I'm trying to figure out why Republicans would agree to that change from an institutional point of view.  Even if, or espescially if they suffer the losses that US News and World Report reports that some insiders are worried about:

Some GOP insiders now predict that the Republicans will lose at least five seats in the Senate and 15 to 20 in the House, and it could get worse if gasoline prices continue to soar and the public remains in a disgruntled mood [h/t Atrios]

The remaining Republicans in this scenario are survivors from safe seats.  Furthermore the cycle of politics and seats at risk will look better for 2010 as it is a midterm where the opposition party typically picks up a few seats, and in 2012 when the GOP faces the freshmen of the class of 2006 and sees the House shift to slightly friendlier seats due to redistricting.  The Republicans who would be left are candidates who can win in very hostile environments under the current rule set.

Changing the current rule set to give a 4:1 match significantly disadvantages current Republican office holders while advantaging current Democratic officeholders.  The Democrats have successfully built a massive small donor based financing system in the past five years.  Under the current rule set Democrats can compete with Republicans by a combination of big money and a growing small money component. This rule change would swamp Republican fundraising instead of merely matching and barely beating it.  It would also allow Democrats the option of refusing some funds and become more ideologically coherent and aligned with popular interests instead of their funders interests. 

This same argument could have been written in2002 when McCain-Feingold banned national party soft money donations.  In fact it was written that McCain-Feingold was the Democratic Party Suicide Bill.  However six years later there is a Democratic majority (of what value is another issue) in both chambers of Congress, and the Democratic presidential nominee is the favorite to win the White House.  McCain-Feingold did not have a signiffcant negative impact on the Democratic Party's long run chancess.

However the Democratic Party of 2002 and the Democratic Party of 2008 are two very different creatures in its sources of support, hot button issues, activist influence and strategic direction.  And itis at this point of conflict that I have to question why Republican officials would vote for this rule change. 

Blog_off_center_activists The McCain-Feingold rule changes increased the power of activists, and small donors as aggregated small donors could now compete on the same playing field as large, instititutional donors.  Small donors have far less influence per person but as a unit, they can and have repeatedly demonstrated an ability to change the direction of the party by rejiggering the incentive structure through funding good candidates, funding primaries and backing up vulnerable incumbents.  This has worked as liberal activists are fairly close to median political positions.  However Republican incumbents have a good reason to fear their activists as they tend to be further from the median voters and issues positions. 

The activists with a proven ability to raise small donor money for the Republicans are the Paulites and the Christian conservatives.  When either group is the face of the Republican candidate in a barely competitive district, the  Republican probability of a win significantly decreases.  Even more importantly from an institutional power perspective is that these groups are the grunts of the Republican coalition and not its elite.  However being able to magnify their proportional influence by a factor of three or four would massively disrupt the party's power structure.  This is a fight that incumbent Republicans and their supporters don't want to wage as they have seen the costly rearguard that the Democratic establishment has been fighting against the bloggers and small donors for the past five years. 

I just don't see why Republican incumbents will vote for this bill, or allow it to pass without a filibuster vote as it is a direct inter-party threat, and more importantly, a massive intra-party institutional threat to their power. 

 

I don't like the sound of this

By BJ

Google must divulge the viewing habits of every user who has ever watched any video on YouTube, a US court has ruled.

As has been pointed out more than a few times, search engines like Google possess a virtual treasure trove of private data on the people who use their service, and this ruling may have just opened up the floodgates to corporate and government access.

Sometimes it almost seems as though privacy is becoming a thing of the past.

June 30, 2008

Pittsburgh Financial Implosion??

By Fester

Chris Briem at NullSpace is getting into the weeds of the new Hockey Arena's financing and notes that there could be a couple of very large problems on the horizon.  The arena has the potential of straitjacketing the City of Pittsburgh AND Allegheny County due to the bond statement's seniority arrangements AND the weak condition of the Don Barden and PITG finances.

The Pittsburgh Post Gazette has been reporting that the final financing for the casino is still not coming together:

"A combination of anxiety and curiosity has built in recent weeks surrounding Don Barden's efforts to secure $780 million in financing for the Majestic Star casino, and it could come to a head at the construction site Monday. The team of more than 20 companies erecting the North Shore casino has not been paid on time for work done in either April or May, according to the primary contractor. They agreed on one extension already at a June 16 meeting with Mr. Barden. They meet with him again on Monday, and will decide collectively what action to take if he cannot provide payment of about $10 million that is owed, said Dan Keating III, chairman of Philadelphia-based Keating Building Corp., the primary contractor."

Barden and PITG have had trouble getting financing as they have swapped principal backers and have found raising capital in the crunched credit markets much tougher than they anticipatead a few years ago.  This could have some massive regional financial impacts if the casino is either not built at all, OR if it is significantly delayed or downsized. So let's get into the weeds with Chris by reading the bond statement and working through some of the implications. The bond statement is here SEA_arenabond_2007.pdf and we'll start with Chris's analysis:

The core financing in the form of $7.5 annually is indeed slated to come from him, but he isn't really involved in building it. So who does bear the risk of the arena project.

One answer is the Sports and Exhibition Authority (SEA) because THEY ALREADY BORROWED THE MONEY. That raises lots of questions. If the Barden money stream does not start flowing in as expected, what happens? ....

the revenue backing the project are not limited to the revenues specifically tied to the arena, to include the Barden payments, rent or other sources.. but all the SEA revenue. At least that is my reading. So before these bonds could default to bond insurers it seems the holders have claims against most SEA revenue.

WARNING --- SOME SERIOUSLY NERDY FINANCIAL WONKERY AND SPECULATION AHEAD --- Read at your own risk to your mental health.... 

Rad_revenues_06_30_08 The Sports and Exhibition Authority currently is paying off the bonds for most of the major destination projects in the city center right now.  These include the two new stadiums, Heinz Field and PNC Park, and the Convention Center.  The Convention Center is a money losing proposition at this time that is consistently blowing a hole in the current Sports and Exhibition Authority budget.  It already drew upon the Regional Asset District's general fund of the 1% county sales tax to cover its 2007 operating deficit.  The SEA is drawing upon a wide variety of general revenues to pay its pre-existing bond obligations. 

So you can see there are significant revenue streams for the SEA from the county sales tax, hotel tax and dedicated parking taxes.  Those revenues are already assigned to pre-existing debt obligations, but I am a bit worried when I read the bond security summary from page 6 of the statement:

The Bonds are payable from, and are secured solely by, certain payments and other revenues to be received by the Authority including: (a) Special Revenues; (b) Swap Receipts; (c) Commonwealth Lease Payments under the Commonwealth Lease (each as hereinafter defined); and (d) other moneys pledged to or held by the Trustee under the Indenture for such purposes.

THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE PLEDGED UNDER THE INDENTURE. THE BONDS ARE NOT OBLIGATIONS OF THE COMMONWEALTH OF PENNSYLVANIA OTHER THAN THE COMMONWEALTH’S OBLIGATION TO MAKE ANY ANNUAL LEASE PAYMENTS TO THE AUTHORITY UNDER THE COMMONWEALTH LEASE.... THE FULL FAITH AND CREDIT OF THE COMMONWEALTH IS NOT PLEDGED FOR THE PAYMENT OF THE BONDS. NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY OF PITTSBURGH, THE COUNTY OF ALLEGHENY, OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE BONDS......

What are the special revenues?  From page 27 of the entire statement and page 17 of the counted pages:

“Special Revenues” include certain rental payments expected to be received by the Authority
pursuant to the Arena Lease (its sublease of the Arena to the Arena Operator), payments it expects to receive from the entity which receives a license to operate a slot machine casino in the City (the "Casino Operator"), and payments it expects to receive from the Economic Development and Tourism Fund (“Economic Development & Tourism Fund”), a fund established pursuant to Act 71 of 2004 of the Commonwealth (4 Pa. C.S.A. §1407) ("Act 71").

In English, the special revenues are the arena lease payments, and two streams of casino revenue.  The arena lease payments are paid by the arena operator and collected from the users and tenants of the arena, including he Penguins.  The two slot streams are a $7,500,000 annual payment pledged by Don Barden and PITG, the slot license holder, and another $7,500,000 from the state of Pennsylvania.  The state money is from a bond issue backed by casino revenue.

And here is the genesis of a potential financial implosion.  The arena's financing is dependent upon the casino being built and rapidly generating revenues. The arena is already being built in anticipation of the casino running on time and on budget.  The vast majority of the SEA's ability to repay is tied to the casino.  however the casino looks like it will not be completed on time due to financing problems and more importantly, it will be completed when disposable incomes are shrinking.  Ooahhhh Shit....

Despite the bond statement limited the SEA's responsibility to only the dedicated special revenues, interest rate swaps, lease payments and insurance payments, this bond structure could turn itself into an implicit moral bond structure. 

The county and the city have authorized the SEA to perform some local government functions, including agreements to place golden handcuffs on the city amusement tax, and have allowed the SEA to borrow off the books.  If this debt is placed on the books, neither entity can handle the additional debt load strain.  Furthermore, the SEA has current claims on varying amounts of local revenue, including payments from RAD that are dedicated to rehabbing the current Mellon Arena and are due to terminate in the near future.  Local entities are counting on additional RAD funding becoming available.  IF the SEA or the city/county decide that the implied cost to their credit ratings are too high to use insurance, that RAD revenue will be eaten up and could also displace other currently funded projects.

This right now is a low probability event but as the troubles with PITG continue, combined with a slowing economy, the probability of an implosion increases.

June 25, 2008

Disseminating DIY weapons best practices

By Fester:

Using the global guerrillas' bazaar of violence analogy, the prediction is best practices for specific situations will be quickly spread through loose tie networks.  This occurs because global guerrillas are operating in a very rapid  Observation, Orientation, Decision, Action (OODA)loop with dozens/hundreds of different actors trying different things and seeing different responses.  Really bad ideas are not replicated because of either learning by doing or capture/death of the practitioners.  Really good ideas are adapted as everyone has an interest in being more effective to both accomplish their objectives and staying alive. 

We have seen significant evidence of this rapid dissemination of best practices and responses to changes in the operational environment at the theater level.  For instance Iraqi insurgency attack patterns followed rhythms of measure, countermeasure, counter-counter measure that sought to maximize their advantages while minimizing disadvantages.  We saw this in a rapid shift away from straight up infantry assaults against US positions to the early RPG attacks to an IED campaign of increasing sophistication that only has slowed down because the US bought out the Sunni Arab insurgent groups.  We have seen the same shifts in Afghanistan as the Taliban has moved to more sophisticated stand-off ambushes.  We have seen this in Nigeria as MEND increases their capabilities and capacity to shut-in wider stretches of Nigerian oil production.  We have seen this in Colombia as the drug smuggling cartels have become even more sophisticated. 

However we are not seeing inter-theater tinkering and information dissemination except in the broadest sense of providing a plausible premise and the basic advice of 'avoid US firepower.'  Why is this happening?  What social choke points are stopping this information flow of best practices?  For instance, why have we not seen MEND copy some of the Columbian drug smuggling submarines as stripped down WWI era boats could be effective in sea denial against the Nigerian Navy's limited capacity?  Why have we not seen the Zetas jury rig UAVs like Hezbollah?  Why have we not seen tv-guided and Iridium phone controlled DIY cruise missiles similar in concept to the German Fritz-X bomb or the Walleye? 

If the global guerrilla  phenomenon is wrong, where is the global dissemination and information sharing for high end tinkerable weapons systems that would greatly enhance the ability of non-state actors to expand their capabilities to run amazingly high return on investment operations?  Imagine what would happen to the world oil markets if a pair of 500 pound spar torpedoes were attached to the Nigerian Bonga platform AND a random tanker that had just left port fully loaded.  Why is this not happening (yet)???


[edited for clarity]

June 18, 2008

4GW in America's Backyard

By BJ

While the dual insurgencies in Iraq and Afghanistan are what most of us focus on when discussing fourth generation warfare, it isn’t there that the US faces its most dire threat. As John Robb states:

The only existential threat the US faces in the near term, is from global guerrillas in Mexico and not the Middle East. A breakdown there could result in massive population movements, refugee centers, and the spread of guerrilla warfare into US border states.

The LA Times put out a long and interesting article examining just how dire the situation is in Mexico. Though the place names and causes of conflict are different, the article reads very similar to those of the paradoxically far more familiar battlefields half the world away.

Helmeted army troops steer Humvees past strip malls in the border city of Nuevo Laredo, some of the 40,000 soldiers and 5,000 federal police officers President Felipe Calderon has deployed to secure large swaths of the country against entrenched drug traffickers.

. . .

Criminals unleash machine guns and grenades in urban battles that the State Department describes as "equivalent to military small-unit combat."

In the year and a half since Calderon launched a crackdown against drug gangs, about 4,100 people have died, the government says. At least 1,400 have been killed so far this year, including 170 in Tijuana, about 400 in Ciudad Juarez and 270 more in the western state of Sinaloa.

. . .

Political analysts say the campaign has succeeded mainly in pushing violence from one region to another, without uprooting the mafias that are challenging the power of the Mexican state. Federal troops often are introduced only after particularly violent outbreaks. They have helped bring calm to Nuevo Laredo, in Tamaulipas state, for example, only to see the killing increase in Baja California and Chihuahua, or farther south in Guerrero state.

"It's a strategy of temporary occupation that achieves just moments of relative quiet, only to return to worsening violence," said Eduardo Valle, a writer and commentator who once worked as an advisor in the federal attorney general's office.

Even the rhetoric from the Mexican government has a familiar ring to it.

The president asserts that the level of violence is one measure of success. He says the cartels have been hurt badly, and that they are now lashing out at the government and battling one another for control of territory.

Given the likelihood that the various splinter groups formed by the decimation of the “old guard” cartel leadership will eventually slow their internal fighting as territories and influence become more defined, the danger to both the Mexican state and the US will increase dramatically.

It’s clear from some of the assassinations of top cops and officials in the Mexican government and drug raiding teams being ambushed that the power structure has been thoroughly infiltrated. Such infiltration virtually guarantees that efforts to eradicate the gangs will be more cosmetic than effective. That gives the gangs virtual free reign to operate from a safe haven, in much the same way as the Taliban does now in Pakistan. As Bill Lind puts it:

. . . operating within a hollowed-out state may benefit many 4GW entities more than replacing the state. A Potemkin state protects 4GW organizations from foreign attack; the U.S. cannot go after drug gangs within Mexico except in a surreptitious manner, because doing so would violate Mexican sovereignty.

And so one begins to see just what shape part of the threat will take. The other part comes from the US side of the border. How will the threat be treated? To treat it as a war is tempting, because in war the Executive gains great power, but as DNI’s Chet Richards points out, such an usurpation of power may not be wise.

While such powers have proven useful when the country faces the military forces of another country, they also allow the president to undertake activities that would be counterproductive if used against a guerrilla-type opponent, where the outcome depends primarily on moral elements — that is, on our ability to attract allies, maintain our own determination, and dry up the guerrillas’ bases of support.

Granted that for myself, this is almost as far geographically as the wars in the Middle East, but the same can’t be said for my co-bloggers, and the political choices made when there is such a conflict likely to spill across the border will affect everyone on the continent.

Definitely something to keep an eye on as it develops.

June 17, 2008

Urban Power Resiliency

By Fester

Resiliency is basically the ability of a system to withstand shocks and still perform its intended functions within reasonable parameters of costs, safety, reliability and predictability.  The more resilient a system is, the more damage it can take before catastrophic failure occurs.

The dominant global power infrastructure of centralized generation plants connected to distant consumers by loosely coupled networks of transmission wires and distribution centers is not particularly resilient.  For instance thirty transmission towers knocked down near Baghdad took out that city's power supply for four years straight.  A single point of failure near Cleveland knocked out most of the Northeast's power grid in 2003. Demand overload and blown transformers blacked out large sections of Queens for a week in 2006.   Tightly coupled systems with brittle and numerous failure points are not resilient to deliberate attacks or unusual circumstances. 

Local production as either part of the base load or as an emergency/supplemental system can contribute to local and system wide resiliency.  My post on diesel generation raised the question of rural/off the grid resiliency, but within a wide network of diverse power supplies, diesel is a resiliency adder for short to intermediate time frames. 

Treehugger is pointing out another source of localized power production that can maximize sustainable and resilient power generation; building mounted micro-wind turbines.  They take advantage of urban wind shear and elevation offered by buildings to produce local power.   This idea has been tried several times in the past but it looks like some of the noise and cost issues have been resolved so that this implementation is a more plausible path. 

Local, urban wind power will not supplant centralized production and its economies of scale.  However micro-turbines and other distributed power generation and localized distribution systems can be a critical resiliency add-on so that in most situations buildings and neighborhoods could generate a 20% base load.  This would allow for orderly shut-downs of non-essential equipment in general outages while also decreasing peak loads on the regional distribution system.  Decreasing peak loads also significantly decreases the probabilities of large failures.

This is an interesting development and it is a part of trend of improving local power production past the diesel generator in the hospital's basement that has twenty four hours worth of fuel.  It should be encouraged.   

June 13, 2008

Prison Break in Afghanistan

By Fester:

The Guardian is reporting a massive prison break has occurred in Khandahar, Afghanistan:

militants have attacked the main prison in the southern city of Kandahar with a car bomb and rockets, killing police and setting nearly all of an estimated 1,150 prisoners free.....

Militants first exploded a water tanker near the entrance to the gate of the Kandahar prison, then several suicide bombers entered and detonated their explosives, crumbling two prison walls, Karzai said.

Many police were killed, Karzai said, but he did not immediately know how many.

The prison holds common criminals but also some 400 Taliban militants, who have been fighting against Nato troops and the Afghan government.

This is a complex operation with multiple things that could go wrong against a high value and high prestige target.  It is also a Taliban attack that is aimed at delegitimatizing the government by highlighting its ineffectiveness while improving internal cohesion and morale as a demonstrated example of the Taliban taking care of its own. 

This attack also reminded me of an insurgent attack in Iraq in 2005.  A large field force of Sunni Arab insurgents attempted a similiar style assault on Abu Ghraib but their breaching car bomb got caught up in a ditch before it could hit the wall which spoiled the attack.  The Iraqis in that case ceased their attack and broke contact with minimal pursuit. 

Brandon Friedman at VetVoice notes that the violence rates in Afghanistan are increasing at a rapid rate:

In terms of enemy fire, May 2008 was the second deadliest month of the war since hostilities began in Afghanistan shortly after 9/11.  This also marked the end of the deadliest 12-month period for U.S. troops in combat in Afghanistan since the war began nearly seven years ago....

While hostile fire casualty rates in Iraq have been higher than .04 percent in about half of all months since the invasion, this shows us one fact that cannot be overlooked: The violence in Afghanistan only seems minimal to Americans because there are a mere 33,000 troops there.  But the rate of violence there is clearly comparable to that in Iraq--where 155,000 troops are now serving.  For those 33,000 troops in Afghanistan, for the first time now, life has become more dangerous than in Iraq.

Is there a systemic change in the quality and effectiveness of Taliban ability to organize and direct violence?  Or is this random noise?  I would hazard that it is a change in effectiveness in the Taliban as we have clear proof of their ability to plan and execute a very complex operation in the form of this prison break. 

June 12, 2008

Diesel generators and resiliency

By Fester

Diesel is much more expensive than regular unleaded which is a change from traditional patterns.  It is also a high demand product as the refineries are making more money on their diesel products than on their regular gasoline products.  Some of this is due to a shift in the composition of the crude oil inputs as heavier assays require more effort to turn crude oil into diesel at the refineries, but a significant portion of the price increase is due to increased demand. 

A portion of this demand is coming from a shift in transportation fuels towards diesel and away from gasoline.  This is noticable in the car market as well as in the train market.  However most of the increased demand is the traditional story of increased wealth in China and India as more areas are electrifying by local generators.  Kat, our researcher, also noted that diesel generators are common power supply systems in Iraq and other unstable/violent areas. 

I am interested in the nature of resiliency that diesel generators posses and whether or not this is an actual feature or an illusion of a feature.  Most of the diesel generators are being installed in areas where there is minimal reliable connections to a centralized or regionalized power grid.  This is either due to large scale system disruption/sabotage enhanced by localized fragmentation such as in Iraq, or the more common story of rural areas in India and China becoming wealthy enough to afford power but due to the combination of burgeoning urban power demand and high costs of connecting to pre-existing and not too reliable grids, localized prodution is the better alternative.

However in almost all scenarios, the localized production is at the tail end of a several thousand mile supply chain that is fairly brittle and volatile.  So is this really resilient when small communities have some interconnectedness with the larger social mileau but also possess point power generation if that power generation is not sustainable from local resources?  Or is this a movement of substitution of irresiliency as localized complexity and energy needs have jumped up while localized production has decreased? 

June 11, 2008

Philosophy, Technology and Gas Prices

By Ron Beasley

Yesterday when I read Fester's Gas, Distance and Equity Destruction I was taken back to a graduate level course in Urban Geography I took in the early 70s.  Fester wrote:

Trading space for time is not just the classic Russian defensive strategy. It is our settlement pattern. 

Gas is a substitute for location.  People buy and burn gas because they are unable or unwilling to buy a location.  Suburbanization can be viewed through this lens as a means of trading expensive urban land for cheaper ring/fringe land.  This trade has made sense for many people as the travel costs were assumed to be relatively low as roads are heavily subsidized and gasoline was not a significant deterrent. 

People make their mortgage/purchase decisions based on total cost of ownership which includes the costs of living life and getting to and from work.  Individuals who live closer to their job have, all else being equal, lower commuting costs.  This allows them to shift commute expenditures to other expense categories, including housing.  Living further out and thus increasing commute costs often lead to the trade-off of lower housing prices, all else being equal. 

Trade-offs that made sense when gas was $1.80/gallon often do not make  sense when gas was $3.00/gallon and make even less sense when it has just topped $4.00/gallon.  Assuming home prices are smooth, which is a completely unreasonable assumption, significant drops in home values could be expected as the supportable house prices have to decline to meet the commute costs.

In that course 36 years ago I was introduced to the philosophy of Lewis Mumford, a historian of technology and urban development.  He saw the promise of technology but also recognized the threat.  In his 1934 book, Technics & Civilization,  he identified how the way we could think of technology is two fold.

  • Polytechnic, which enlists many different modes of technology, providing a complex framework to solve human problems.
  • Monotechnic which is technology only for its own sake, which oppresses humanity as it moves along its own trajectory.

In the first we use technology to improve our lives.  In the second we become slaves to the technology.  And yes, 74 years ago Mumford identified the increasing reliance on the automobile as an example of the second. 

June 05, 2008

Revisiting Profits of Instability

By Fester:

I have long argued that a moderate degree of instability in Iraq and other oil producing regions is quite advantageous for numerous actors as oil is the chokepoint supply of economic growth and therefore an opportunity to extract massive economic rents.  From my old blog in 2004:

This presents an interesting dilmena for all of the major oil exporters which are not part of NATO or NAFTA; stability in Iraq and in the Middle East in general is a contiunuum of choices, and the extremes on both ends have extremely expensive payoffs. Extreme levels of stability in Iraq will cost the Russians between fifteen and thirty billion dollars a year, and the Saudis even more money ($17-$35 billion is my best guess). Complete instability such as an Al-Queda led or inspired series of coups starting with the Saudi Royal family and moving down the line of Emirate will cost the current stakeholders their lives and fortunes. Somewhere in between are less dire consequences and therefore more desired states of being. This continuum of instability and its resultant payoff matrix leads to some very mixed incentives that we see acted upon every day....

Some level of instability is extremely profitable to them, especially an instability that so far has not resulted in the destruction of any actual production or export ability....

George Soros is arguing that oil is in a price bubble right now but the counter-argument to the bubble theory is the inventory of oil products is in the normal range. The counter-counter argument is that the inventory data is normal because building new storage capacity is expensive so 'inventory' is being stored in the ground by not pumping it out despite having economically and technically feasible means of doing so.  This theory requires significant spare capacity lying around and OPEC to be a functioning strong cartel.

Let's run with it for the sake of argument and see where the geo-political spin-out could be.  Holding back spare capacity to effectively build silent daily inventory would be a profit maximizing choice and a forms of savings.  Under this scenario, the holders of the spare capacity would have no problems pumping more oil IF there is an equivilant amount of oil being held off the market by other actors.  This would lead to a dollar for dollar shift of income from Nigeria or Mexico or Iraq or Angola to Saudi Arabia or Russia.  In this simplified scenario, we are playing a zero-sum game when available supply is fixed in the short term.

If that is the case, then things can get real interesting as the same dynamic for Iraq's oil exporting neighbors to not be significantly invested in a fully stable Iraq applies on a global scale.  If key bottleneck commodity producers are unstable, other producers of the same commodity have an interest in promoting further instability as this would restrict supplies and lead to higher prices.  The strongest constraints on this type of action is the fear of tit for tat retialiation in the short run and over a longer run the classical OPEC fear that too high of a price for crude oil will lead to a systemic shift to other energy sources and lifestyle modes that require far less crude to run. 

 

June 04, 2008

Hold and Clear in D.C.

By Fester:

Large scale sweeps have always worked so damn well when they are advertised in advance and take place in areas where the local population has conflicting primary and secondary loyalties towards the sweeping force. Isolating urban communities, denying them interactions and connectivity with other districts and squeezing local economies will be the result of large sweeps and haphazard clear and hold operations.  These results are not the best way to win friends and influence people who are persuadable to move in multiple directions within the social sphere.  We'll see if lessons learned in hundreds of different places will be relearned in D.C. as the city police will be conducting large sweeps and urban isolation efforts in several neighborhoods this summer:

The program will authorize the Metropolitan Police Department to set up public safety checks to help safeguard community members and create safer neighborhoods in the District by increasing police presence aimed at deterring crime....

Potential Neighborhood Safety Zones must be approved by the Chief of Police, and will be in effect for a maximum of 10 days. Public safety checks will be established along the main thoroughfares of the established neighborhoods. Anyone driving into a designated area may be asked to show valid identification with a home address in that neighborhood, or to provide an explanation for entering the NSZ, such as attending church, a doctor’s appointment or visiting friends or relatives. Pedestrians will not be subject to the public safety checks.

I can understand wanting to do something to decrease crime, but checkpoints are not a particularly efficient way of gaining useful intelligence, creating positive personal presence or embedding oneself into the local social milleau.  Instead embedding local cops and integrating into the local social mileau and connecting opportunities and prospects to neighborhoods has a much higher probability of reducing crime.  But those strategies, especially if backed up by good training, data, and multi-system service integration take time while roving roadblocks and hassling classes of people are visible and are evidence that something is being done even if it is ineffective. 

 

June 03, 2008

Sorry Tom, It's not that flat!

By Ron Beasley

In 2005 the pompous and erudite Thomas Friedman told us the world is flat.  A year earlier Aaron Naparstek and James Howard Kunstler had already explained why he was wrong - peak oil.

Kunstler foresees "the demise of Wal-Mart style, big box, national chains." Companies whose profit margins depend on "merchandise made by factories 12,000 miles away" simply won't function in a world of $100-plus barrels of oil. "We're going to have to seriously reorganize our whole system of retail trade and economy."

Well $100 plus barrels of oil are here and.......

The world Is No Longer Flat

Tom Friedman wrote "The World is Flat", suggesting that globalization had leveled the playing field between industrial and emerging countries. Jeff Rubin of CIBC World Markets suggests that this is perhaps changing because of the cost of fuel.

The cost of shipping a 40 foot container from Shanghai to the east coast of North America has gone from $3,000 in 2000 to $8,000 because of the cost of fuel, and for many products, the Asian cost advantage has virtually disappeared.

“In a world of triple-digit oil prices, distance costs money,” write Jeff Rubin of CIBC World Markets. “And while trade liberalization and technology may have flattened the world, rising transport prices will once again make it rounder.”

The new tariff

Shipping costs to and from Asia have risen so much that they have eclipsed tariffs as a barrier to global trade, Mr. Rubin and Mr. Tal say, calling the cost of moving goods “the largest barrier to global trade today.”

“In fact,” they say, “in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades.”

When oil was $20 a barrel, transport costs were equivalent to a 3-per-cent tariff rate; now it's above 9 per cent.

Aggravating the problem is the fact that modern new container ships travel faster than old bulk carriers and so use up more fuel, doubling fuel consumption per unit of freight over the past 15 years.

“This is an environment in which shipping from the Pacific Rim may not make sense any more,” Mr. Tal said in an interview.

And yes it will be the US manufacturing sector that will be the first to reap the benefits of this new world order.  It will no longer be cheaper to make that toaster in China and ship it across the Pacific.  It will be the intellectual jobs, like software, that remain on that flat earth.  With fiber optic cables connecting the world it will remain cheap to transfer ideas.  Not what Tom had in mind I would guess.

Tip of the Newshoggers hat to Big Gav

June 01, 2008

The real left

By Ron Beasley

I started this as a comment to Cernig's post The Left And The Other Left below but realized I simply had too much to say. I agree with Cernig that change is coming to both the major parties.  Regardless of how the November election turns out I think one of the major changes will be the Clintons will no longer be power brokers in the Democratic Party and that's a good thing if you are a progressive.  In one of my final posts over at Middle Earth Journal I had a post titled Dreaming of a Clintonless Democratic Party.  I see the Clintons as a disaster for the progressive movement.  Many of us referred to Bill Clinton as the best Republican president since Eisenhower - and yes Eisenhower was better.  We often talk about how the Republican party was hijacked by the theocrat and neocon far right wingers.  Through Clinton's Democratic Leadership Council we saw the Democratic Party hijacked by pro corporation neocon lights.  While Clinton did win two presidential elections he didn't do it by himself.  In 1992 Ross Perot was instrumental in Clinton's election and in 1996 he ran against Bob Dole who ran the worst political campaign in US history.  It is important to remember that after eight years of Clinton the Democratic party was all but powerless thanks in part because under the DLC the Party had become Republican Lite offering no real policy alternatives so there was no reason for anyone to vote Democratic.  What will happen to the Clintons?  Unlike Cernig I don't see a migration toward the Republican party.  I think it's more likely they will simply become background noise.

So what about the future - near and far?   Cernig discussed the schizophrenic nature of the Democratic Party.  Well I see schizophrenic nature of the Clinton supporters as well.  (1) First we have those who actually support the Republican Lite/DLC vision of the world - a minority I suspect who may vote for McCain.  (2) Another minority think they are entitled to a woman President, aging feminists who have dreamed of seeing a woman President in their lifetime - they will have to decide which of their dreams is more important. (3) And finally there I those who simply think Hillary is a better candidate.  I was in that camp until January.  I suspect they are the majority and some of those have already switched to Obama or said they would vote for him in November - the majority I would guess. While numbers one and two may make the most noise they are the minority.  They may vote for McCain but probably won't be enough to elect him.

I see an Obama win and if Hillary is gracious in defeat it could be a big one.  Once the general election really gets underway people will start to see John McCain - he won't look very good.

Update

Booman has the story on the infamous "whitie" tape. Clinton Kool-Aide and Bush Kool-Aide must have similar ingredients - they both make you stupid and vicious.

The Left And The Other Left

By Cernig

Well, the Dems might just have done it again - snatched defeat from the jaws of victory. If you need any evidence at all for that other than the evidence already before your eyes, check out the comments threads on two Larry Johnson posts here and here. The preponderance of ostensibly Dem commenters saying they'll vote for the Republican candidate and describing him in glowing terms is revelatory.

McCain could be laughing all the way to November.

Now for the positive side - a Mccain victory handed to him by the Clintonistas might just mean the end of the two party monopoly in America. An Obama victory gained despite this primary season's bloodletting and erosion of trust might well mean the same thing. There's a lot of dynamic just now that says the natural tendency to stick with what you know and not rock the boat to the point of capsizing might be itself overturned.

It seems to me that the schizophrenic nature of the Democratic Party may finally resolve itself. There's a good chance that the right wing of the party will follow the Clintons into GOP-land. They always were "compassionate conservatives" and that's probably where they belong. The Dems could end up looking a lot more like a European social democrat party as a result and if so the GOP will most likely fracture in its turn too. The far right won't be able to call the shots quite so much, with what will then be a massively enhanced left wing of the Republicans able to steamroller them, and they'll head for the exits to form a new hard right bunch of God-bothering, xenophobic helicopter-chasers. That way lies their consignment to history as a part of a ruling coalition, although they'll be able to exert pressure from the finges. It's probably the most positive role they could possibly play. Likewise, on the other flank of the main two, I think we'll come to see democratic socialists and greens providing pressure from smaller but still influential partries on specific issues. The GOP will be left looking far more like a European conservative party.

If we don't see Clintonista defections in droves, then it will be because the Republican hard right is just too odious for them to contemplate making common cause with. That will have pretty much the same efect, since in that case the GOP leadership is going to have to engineer a move leftwards just to recapture that party's electability. The same fallout would then ensue as the hard right will still decamp following such a move and the Dem tent now has so many holes in it that a lot of those further left than right of the Dem center are likely to look to other parties to support so that they don't have to relive the feuds of this primary season. Their trust that the Clinton camp has roughly the same aims as they do has been seriously eroded.

Either way, then, I think change is coming. The US has been further Right than the international mean for decades now, mainly due to the interplay of power centers in both the main parties rather than any intrinsic rightwingedness in the nation as a whole - but the adjustment has to come sometime.

May 30, 2008

It's not you, it's your ideas

By Fester:

Right now if I was running a campaign for a generic Republican challenger against a generic Democrat with no major wife beating, coke sniffing or money freezing problems, my job would be extraordinary tough as the generic issue and political environment is not favorable to my candidate.  I would also be faced with significant internal party pressures to either become more hardline conservative or to be labeled a RINO.  This would not be fun; although it would be challenging. 

Given some recent polling, I would be tempted to advise my candidate to say absolutely nothing on policy beyond puppies are good and run on the brand of being a Republican?  Am I crazy on recommending running away from an issue campaign and running towards a branding campaign?  I don't think so, even though my hypothetical employer would be facing an uphill climb either way and would most likely lose in November as the Next Right is analyzing some very interesting brand and policy polling data:

Let’s take a deeper look into the data and see how our messages play when voters know where they’re from and when they don’t know which party is saying what.  If you want the exact wording of both parties’ message and the full data, go back and take a second look at the poll.

Let’s start with the economy. When voters know what party each message comes from, we loose 37% to 58% and trail among independents by 18%.  Ouch. However, when you read both messages without telling voters who they come from, the story gets worse.

Republican voters like the Democrat’s message more than their own party’s message by a large 14% margin when they don’t know which party it comes from.  Just as disturbing, numbers among independents drop by another 10%... giving the Democrats a massive 28% advantage.  Even our horrifically damaged image is better than our message on the economy.  Independents and even Republicans simply like the Democrats’ plan more than ours.

Iraq and trade both follow the exact same pattern.  We’re getting smashed on both issues on the partisan test, but when you look at the nonpartisan test where our damaged image isn’t a factor, the numbers get even worse among Independents and Republicans.  A few Democrats (and in the case of trade a bunch of Democrats) move our way on the nonpartisan ballot.......

 Among Republicans, support for the GOP message on taxes drops by a gargantuan 53% when the party’s names are removed, leaving the Democrats with a 14% advantage.....  

The takeaway? Our message right now is electoral poison and this isn’t all about “brand.”


OUCH!!!  Branding and consistency of messaging is important but only when the ideas are palatable or can be made palatable to a decent fraction of the population.  Instead what we are seeing right here is the elements of a realigning movement as the Republican Party is rejecting the Republican Party.  Residual loyalty and long-standing brand imaging is currently supporting Republican Party fortunes and not causing disproportionate harm.  Staying away from policy and running as a generic sunshine candidate may be the best that most Republicans could do this fall. 

John McCain has been trying to run a campaign as an anti-Bush change agent who, on most issues, is presenting standard issue Republican policy tropes and when he is not, he is either ill-informed, unengaged, or seeking minimalist defensive measures instead of proactive solutions such as on greenhouse gases auctions.  Right now he is about even in the daily tracking polls although his electoral map is a losing map as of this morning.  So this polling information is reassuring that although the McCain Brand is stronger than the Republican brand, his solution set has very little salience with the public.


May 28, 2008

Water Conflicts

By Fester:

Water is in the news again today with two very interesting articles.  The first I saw via Barry Ritholtz at the Big Picture and it is an analysis of where the globe's fresh water lies. Wired Magazine reports that roughly one in six people lack access to fresh water and the vast majority of the global supply of surplus water is located in areas that are not in areas of high demand. 

Like oil, water is not equitably distributed or respectful of political boundaries; about 50 percent of the world's freshwater lies in a half-dozen lucky countries....

No one who tries to eke out a living from this land is untouched. The 400,000-square-mile Murray-Darling basin, named for the two main rivers that run through it, receives only 6 percent of the continent's increasingly scarce rainfall. In some places, the groundwater is too salty to drink. Coastal cities are investing in desalination plants, but desalting technology is simply too expensive to use for agriculture. Without irrigation from the river, agriculture couldn't exist here. The farms would literally dry up and blow away...."The whole point of peak water," Gleick says, "is that we have to fundamentally rethink who gets to use water for what."

The second is a practical impact of limited water supplies as Iraq is experiencing significant water shortages as both the Tigris and Euphrates are running significantly lower than normal.  Iraqi officials are asking for Syrian and Turkish upstream users to release more flow downstream:

Abdullatif Jamal Rashid, the Iraqi minister for water resources, after talks with Turkish Foreign Trade Minister Kürşad Tüzmen. "In the past years, Turkey has given us enough water, even more than enough water. But this year we are having some difficulties. We are faced with a drought that has turned out to be more severe than expected. Therefore, we are asking for more water to ease our problems."

As the Wired article shows, water shortages are not limited to Third World or developping nations; instead they impact pretty much any community that is in arid, or semi-arid regions as well as communities that have grown significantly past their natural support capacity or economically feasibly agricultural patterns. This is an area of conflict that will grow as water is more similar to natural gas than the international oil markets. 

Water is a limited and barely trade-able resource right now in its direct form; instead water is traded as an embedded product.  American water surpluses are sent overseas in the form of beef, corn, wheat and soy exports.  Direct water exports from a regional and international perspective have little space too grow.  One of the largest sources of tradeable freshwater, the US-Canadian Great Lakes is being locked in by local users to keep the water within the Great Lakes drainage basin. Intra-regional trade such as the New York City water system expansion with a third aqueduct to the Catskills taking most of a generation to build and the grand water transfer systems in China are fifty year plans to move water from the south to the arid north.

Local areas short on controllable water resources will either have to import water intensive goods and services, change their agricultural profile to meet their local water needs, or engage in highly expensive and energy intensive extraction efforts.  The other option is to break the bottleneck either by innovation, unsustainable extraction as the region places a death bet, or fighting to gain access to nearby resources. 

May 23, 2008

Conflicting Wheat-Opium Trade-offs

By Fester:

In early April, I was riffing on the idea that the high prices of scarce wheat in comparison to the stagnant prices for abundant opium offered a plausible economic wedge issue for counter-insurgent exploitation in Afghanistan:

The incentive for profit seeking Afghan farmers is to change their production profile from the black market poppy to white-market wheat.  Some of this is due to the price increase in wheat due to shortages, and part of this is the global heroin glut as production has boomed over the past couple of years.  Since a wheat farmer (all else being equal) does not need to fear eradication efforts, the need for Taliban protection decreases massively, as well as Taliban smuggling profits (who wants a black market loaf of bread....). 

The increased white market cash flows to farmers are coming out of local urban markets which may be a bit of a problem as Afghani cities are not that productive and do not produce large surpluses to pay for rural goods. So while rural landowners and steadholders will benefit, the relative prices of living in the cities have gotten a whole lot higher to provide this rural benefit. I do not know enough about Afghan city population composition to intelligently speculate how the Pashtun/non-Pashtun splits are in the cities, BUT on the economics, providing bread subidies as part of a counter-insurgency effort to urban populations could probably mitigate most of the impact of higher local and global wheat prices while tying people closer to the government.

Kip at Abu Muqawana disagrees with this analysis as they outline their take on the food crisis and how it impacts Afghanistan and counter-insurgency efforts:

The global food crisis is perhaps the least reported big event of the year. It stands to kill far more people than the cyclone in Myanmar or the earthquake in China. First it will kill through starvation, and then through the conflict over resources that it spawns. At a conference of experts that Kip observed on Afghanistan several weeks ago, all agreed that rising food prices were the single thing capable of throwing the country into utter and perhaps unrecoverable chaos. The same might be true of nuclear-armed Pakistan as well, not to mention several dozen other weak or failing states....

In Afghanistan, rising [food] prices may result in further entrenching the opium economy as the sure way to provide the cash needed to import grains. This would be bad news for the counterinsurgency effort, which needs to weed the populace and the government off of the proceeds of opium if we are to have a shot at winning....

I agree with Kip that high costs of food and food scarcity is a massive threat of legitimacy of governments in weak and poor states.  However I am grappling with the implied economic dynamics within the Afghanistan example.  One of the big comparative advantages the United States has in a counterinsurgency effort is that we print our own hard currency (albiet a weakened one) and can pass out big blocks of fresh fifty and one hundred dollar bills.  The Taliban and Pashtun insurgent/guerilla bands can not do that.  They actually need to participate in a market to gain cash.  Why not pass out food stamps or cash bread subsidies?   

May 19, 2008

Interesting Times - Part II

By BJ

Getting to know Hubbert

Hubbert of "Hubbert's Peak", or "Peak Oil", that is. In simplified terms, Hubbert postulated that for any given geographical area, up to and including the entire Earth, oil discovery and extraction would follow a bell-shaped curve where the easily exploited reserves would be found and consumed first, driving production to a peak, and then plateau and start declining when roughly half of the available resources had been exploited and the remaining reserves were more expensive and harder to extract.

Largely scoffed at when he came out with his theory in 1956, he's since been vindicated, in large part because he predicted the peak of US production in the '70's. Depending on who you talk to, peak oil for the planet is forecast as far out as a couple of decades from now to we're already there. It will be a while before we can determine whether or not production has really peaked, but it's clear from the pricing that demand has caught up, and may be surpassing, the supply.

People looking for places like ANWR or the Alberta tarsands to make up for the lost production are living in a pipe dream. ANWR doesn't hold enough to make much of a difference, and the tarsands, while possessing massive amounts of convertible bitumen, can't increase production fast enough to keep pace even with the inevitable decline in Alberta's traditional oil fields like those around Leduc, let alone deal with the declining production of a place like Russia, or the even more worrisome prospect of Saudi oil production dropping off. The Saudis by the way, unlike certain people in North America, understand that the oil still in the ground is only growing in value the longer they leave it there.

While we haven't yet run out of the black gold, the fact that it's now beginning to be priced at about the same level as the gold gold has finally gotten most people to consider the previously abhorrent thought of not burning so much of the stuff. As David Brin noted a while back, the truly awe-inspiring part of much of the Climate Change debate is that the opponents are generally arguing against measures that would make sense anyway, like efficiency.

As fester noted last week, people are starting to use public transit more and buy smaller, more fuel-efficient cars, even if they don't plan to drive them quite as often. The tragedy of all this is that many people are only now waking up to these facts, and the transition for them is going to be quite painful.

I don’t feel particularly smug when I stand next to my Honda Fit watching some SUV owner near tears as she puts more than $100 of gas into a car she doesn’t need. It just feels sad to think about how long it’s been since it became obvious to anyone who cared to look that we won’t be able to scare off problems like fuel scarcity and climate change by closing our eyes and wishing.

That lead time was an opportunity to make changes. Some would have been painful and some merely sensible, but it would prevent huge numbers of honest Americans get caught with their pants down. Instead we blew it out the tailpipe of cars that average 15 MPG. Now, instead of a planned transition, we get to see what happens when stubborn denial meets inescapable change. It’s simply unsustainable to live in suburban car country with a negative equity on the house, $6-7 gas (wait until you see what that does to property values in outlying suburbs) and expensive SUVs that nobody wants. The saddest thing for me was that most who will get fucked the worst had no idea this was coming. There was that one guy who warned us, but he had a snooty laugh.

Krugman has a vision of American cities turning into more efficient, densely-packed, transit-serviced, European models, but he also notes the another issue pointed out by fester; buildings and infrastructure don't change on anywhere near a short time scale. Buildings are generational investments at the least, and most infrastructure has even longer time horizons, (though I wonder if the fact that it's all falling apart anyway will make it easier to rebuild in a more efficient manner).

In the meantime, people are looking for alternatives for fueling their rides. The most hyped has been hydrogen fuel cells, but they're a long way off from being helpful. Hydrogen also has the issue of requiring energy to produce the hydrogen, which at present means shifting the burning of fossil fuels to power the vehicles to burning them to produce the power needed to produce hydrogen. The same problem goes for plug-in hybrids and electric vehicles. Part of the infrastructure that needs to be refurbished to produce a more efficient and climate-friendly North America is the electrical grid and power generation, particularly if more of the power is to be generated by renewables.

Grain-based ethanol was, and in some cases still is, put forward as a possibility for a fuel alternative. It didn't take too long for people to realize that this wasn't the smartest idea, (though this variation does intrigue me), given that it takes land away from food production to turn it into not terribly efficient fuel production. And food production is another thing we all need to be watching. Oil, after all, isn't the only thing that appears to be in short supply.

There have been a rash of stories recently regarding possible rice shortages, and how the near permanent drought in Australia caused wheat prices to spike. Hell, even the price of fertilizer is soaring due to shortages. While for developed nations like the US the main risk is the inflationary pressure of higher food prices, (well, that and crappier beer), crop failures and diversion of food crops to fuel use is causing far greater hardships in countries where life is a lot closer to the edge.

Rising prices for cooking oil are forcing residents of Asia’s largest slum, in Mumbai, India, to ration every drop. Bakeries in the United States are fretting over higher shortening costs. And here in Malaysia, brand-new factories built to convert vegetable oil into diesel sit idle, their owners unable to afford the raw material.

. . .

In some poor countries, desperation is taking hold. Just in the last week, protests have erupted in Pakistan over wheat shortages, and in Indonesia over soybean shortages. Egypt has banned rice exports to keep food at home, and China has put price controls on cooking oil, grain, meat, milk and eggs.

According to the F.A.O., food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.

And the situation in Somalia makes those countries look good. War plays a large part of the Horn's troubles, but climate does as well, as a drought has led to crop failures and dying livestock. People point to the situation in Darfur as the world's first conflict caused by Climate Change, as the collapse of the Sahel to drought brought the peoples there into conflict over increasingly scarce water resources. It is unlikely to be the last, as the desperate move to try and escape their fate.

Drought seems to be a more common word these days, and the US is beginning to feel its effects as well, as the situation last summer over the dwindling Lake Lanier show. While Climate Change may be raising the level of the seas, humans are draining the levels of even the greatest freshwater lakes.

Canada is, by most estimates, blessed with an incredibly abundant supply of freshwater, but as with everything else, abundant doesn't mean limitless. Remember I mentioned that tarsands production would never make up for decline in oil production elsewhere? Well a big part of that reasoning is based on the fact that the water use is massive. Even with recycling, it takes between two and three barrels of water to produce one barrel of oil, and most of the water can't be sent back into the ecosystem because of the toxins it picks up.

Indeed, the lack of environmental safeguards in the area means that we are quite probably poisoning the water supply of the relatively sparsely populated north. Of course, we've never paid too much attention to aboriginal rights in the past, why should we worry about those living downstream from the tarsands now?

The energy intensive extraction is currently run mostly with natural gas, but there is talk of putting in nuclear reactors for that purpose. Doing so would suck up even more water from the rivers in the area, which are unlikely to take the strain. And the climate can be blamed again in part. The warmer weather is leaving smaller snowpacks to feed the rivers.

Shortages of resources can be painful. Shortages in food and water are deadly. This is ultimately what makes Climate Change the frightening prospect it is. Being so close to the edge of what human life the planet can support, even a minor disruption can push us over the edge, particularly given the ease with which large numbers of people can move when conditions in their area go bad. As I noted in the first part of this, our cities, our agriculture, our very lives are dependent on the climate remaining relatively stable. Knock that balance too far out of the norm and disaster follows.

It is likely too late to stop or totally reverse the change that's coming, but that doesn't mean that it wouldn't be a good idea to move beyond symbolic protests and work to at least mitigate the effects. At the very least, we would be smart to at least try and slow down the rate we're pumping carbon into the atmosphere to try and delay the changes long enough to give us a chance to adapt to them, rather than barreling full-speed ahead into an uncertain but likely disastrous future. It is still debatable whether or not we'll choose to do so.

And so, interesting times.

Interesting Times - Part I

By BJ

The Climate, it is a-Changing

A number of years ago, my sister asked me if I thought we, as in humanity, would do enough to stop global warming. My answer in short, was no. I said my only real hope was that we’d run out of oil before we burnt too much of it to irreversibly damage the planet.

At the time, I figured it would be mid-century before we had an idea about which would be the case. Instead, it seems the showdown is coming much sooner.

The most visible sign of all this right now is the Arctic sea ice, which hit a record low last summer and is being forecast at about a 60% probability of beating that record this summer.

Arctic sea ice, sometimes billed as Earth's air conditioner for its moderating effects on world climate, will probably shrink to a record low level this year, scientists predicted on Wednesday.

In releasing the forecast, climate researcher Sheldon Drobot of the University of Colorado at Boulder called the changes in Arctic sea ice "one of the more compelling and obvious signs of climate change.

If that prediction holds true, it would be the third time in the past five years that Arctic sea ice retreated to record lows, the scientists said in a statement.

Part of what's happening is that the thick multi-year ice, some of it several thousand years old, is breaking apart and being replaced with thiner, annual ice cover that is more easily melted again the next summer.

The major threat though, is the feedback mechanism of albedo. Sea ice, being a nice bright white, reflects 80% of the sunlight that hits it back into space. Open water absorbs 80%. Less ice, means more sunlight absorbed, means higher ocean temperatures, means even less ice. If the predictions are right and the sea ice cover drops even further this year than last, then it is a good indication that we've passed the tipping point on at least one part of the Climate Change equation.

There are other signs as well, such as islands starting to disappear thanks to rising seas, but the Arctic is referred to as the canary in the coal mine of Climate Change, and the canary is in ill-health.

Of course, the reason for all of this is that we're pumping out carbon dioxide at ever increasing rates and raising it's concentration in the atmosphere to record levels.

The concentration of carbon dioxide in the atmosphere has reached a record high, according to new figures that renew fears that climate change could begin to slide out of control.

Scientists at the Mauna Loa observatory in Hawaii say that CO2 levels in the atmosphere now stand at 387 parts per million (ppm), up almost 40% since the industrial revolution and the highest for at least the last 650,000 years.

The figures, published by the US National Oceanic and Atmospheric Administration (NOAA) on its website, also confirm that carbon dioxide, the chief greenhouse gas, is accumulating in the atmosphere faster than expected. The annual mean growth rate for 2007 was 2.14ppm – the fourth year in the past six to see an annual rise greater than 2ppm. From 1970 to 2000, the concentration rose by about 1.5ppm each year, but since 2000 the annual rise has leapt to an average 2.1ppm.

Now, as stated, part of that increase comes from the fact that we keep pumping CO2 into the atmosphere, but part of it is due to a different, and far more worrisome reason. You see, the world's carbon sinks, like the oceans, aren't soaking up as much carbon as they used to.

The amount of carbon dioxide being absorbed by the world's oceans has reduced, scientists have said.

. . .

Results of their 10-year study in the North Atlantic show CO2 uptake halved between the mid-90s and 2000 to 2005.

. . .

BBC environment analyst Roger Harrabin said: "The researchers don't know if the change is due to climate change or to natural variations.

"But they say it is a tremendous surprise and very worrying because there were grounds for believing that in time the ocean might become 'saturated' with our emissions - unable to soak up any more."

He said that would "leave all our emissions to warm the atmosphere".

Worse for us, if the oceans are hitting their saturation point, things like the bleaching of coral and other pollution caused die-offs could turn the ocean from a carbon sink into a carbon emitter, which truly puts us in dire circumstances.

And because I can't leave well enough alone, that isn't even the worst news. You see, it turns out that in addition to record levels of carbon dioxide, methane levels have been shooting up as well.

Methane, though short-lived in the atmosphere, has about 25 times the heat trapping capability of CO2, so its effects can be felt at far lower concentrations. And it also happens to be the main threat of the other great Climate Change feedback mechanism tied to warming in the Arctic.

You see, there are massive amounts of methane trapped in the Arctic permafrost, ground which by definition is frozen year-round. If, thanks to higher temperatures, the permafrost starts to melt, it releases the heat-trapping methane, which ups the temperature, which melts more permafrost, which releases more methane, and so on.

So what does this all mean for the Earth's climate? Well, as Ron put it a while back, nobody really knows. There are too many variables to be certain what exactly is going to happen. A good example of this is a recent story from the BBC that suggests global warming will actually decrease the number of hurricanes. Such stories are of course followed by the inevitable claims that climate scientists don't know what they're talking about and therefore Climate Change is nothing to worry about. Also predictable is that they've completely missed the point.

You see, the exact change caused by global warming, and even the exact cause of global warming, isn't what we need to be worried about. It's the fact that the climate will become uncertain, and we're not terribly well set up to deal with that.

Over the last several hundred years we have constructed critical infrastructure on the assumption that the climate regime is going to stay more or less constant over time. We’ve done that all over the world, of course, and while there are some technological fixes available to the rich (see the Dutch engineering of their sub-sea level coastal fortifications), more broadly, we’ve got a lot of life, wealth and property invested in the notion that the ocean will stay more or less where it is.

And of course, it isn’t just coastlines we need to worry about. Global warming is not just an issue of sea level rise; it presents, as Postrel does accept, a much broader range of possible consequences.

Climate change affects rainfall, storm severity, longer term patterns of drought and damp and so on. Global agriculture on industrial scales are built on climate assumptions. Land use and distribution reflect generations of dispute and resolution on the question of access to climate resources and so on. Radical change in the climate regime — an expansion of drought areas, shift of rainfall patterns and so on — might not, as Postrel and others have argued, produce a net loss of ecosystem capacity world wide. But such shifts do devastate human constructions built on a set of beliefs about the climate that are no longer true.

Put this another way: Hurricane Katrina was a disaster, but it was not a natural disaster. Rather, it was a natural event — category 3 or 4 hurricanes are going to hit in the western gulf with a certain frequency; that’s just the way that part of the system goes.

What made Katrina a human disaster was the fact that since the last major hurricane came that way, New Orleans in all its modern glory and inadequately engineered levees had grown up in the way. Take that and spread it all over the globe, and you have the reason why modern anthropogenic climate change is scarier than the Little Ice Age was. The broad argument we should do nothing because the climate has always varied fails to take into account this change from then to now.

As it works out, even if Climate Change were a purely natural phenomena, (which only the seriously deluded can believe), it would still be a seriously stupid idea to just sit back and allow it to happen.

That said, as I told my sister several years ago, so long as the oil is flowing freely and cheaply, it's pretty damned unlikely that people are going to actually do anything significant to even try and mitigate the effects.

As luck would have it, oil, among other things, is no longer so cheap or flowing so freely. We'll take that up in Part II.

AQI in Mosul --- two stories...

By Fester:

Last November, the Washington Post reported on the then current Pentagon line on AQI/ISI operations in Iraq --- not primarily an ideological struggle but an economic struggle. It showed an organization that was predominately self-funding through kidnapping, extortion, and smuggling activities.  It was also a relatively small organization:

"We're starting to hear a lot of chatter about the insurgents running out of money," said Twitty, of the 4th Brigade Combat Team, 1st Cavalry Division. "They are not able to get money to pay people for operations."

In a 30-minute interview, Abu Nawall described his work managing the $6 million or so annual budget of the Mosul branch of the Islamic State of Iraq, an insurgent umbre