Thursday, December 13, 2018

Why is it so Easy to Lie to Us? The Case of the Russia role in Climategate



Our media feed us routinely with lies and the story of the involvement of the Russian Secret Service with the Climategate hack is just one of them. I thought it was worth discussing it here in light of the fact that it is one of the most blatant lies I could ever find. Also a good illustration of the incredible persistence of legends in the mediasphere.



Last week, I cited the Climategate story, noting how it was part of a wide-ranging anti-science propaganda effort and that it must have involved some professional hacking work to break into the server of the East Anglia University. On that point, I received a comment from "Andy Mitchell" that went as:
The Climategate hack has only one suspect: the Russian Petrostate. There are no other suspects.
Note the absolute certainty of this statement: it is a typical characteristic of legends. So, I thought it was intriguing enough to deserve a little examination.

The origin of the story of the involvement of Russian Secret Services with Climategate is easy to find: it is an article of the Daily Mail dated 6 December 2009. Then, debunking legends normally takes a little work but, in this case, it is remarkable how there is nothing to debunk: the Daily Mail article contains no facts, no evidence, no data.

You can read the article yourself, and you'll be amazed at how obvious it is that it was invented out of whole cloth. The only vague connection of Climategate with Russia is that the stolen files may have been stored for a short time in a private server in Tomsk, a Russian town. And, of course, these smart Russian hackers were dumb enough that they didn't think that storing their data in a Russian server would have pinpointed the origin of the hack to the even smarter journalists of the Daily Mail!

Among the funniest things of the article, one is the mentioning of "a leading world expert on the subject [climate change], Professor Sergei Kripotkin" who said strictly nothing about the hacking story, but whose large size picture appears in the article. Apparently, they had to reach a certain length for their piece and they couldn't find anything better than that. I can imagine that they reasoned in terms of something like "he's Russian, he says something about climate, so he will fit in." That shows, incidentally, what they think of the level of intelligence of their readers.

As I said, this is a vintage story, but we can learn something from it just because almost ten years have passed from its first appearance in the memesphere

1. Lies appearing in the mainstream media can be invented out of nothing -- they don't need to be connected in any way with reality. The fact that they appear on a tabloid, the Daily Mail, well known for being unreliable (including telling us of a restaurant selling human meat in Nigeria) means little or nothing. It is sufficient that the legend agrees with some widespread perception, in this case that the Russians are evil and deceptive.

2. There was no significant attempt to debunk the story in the Western Press. It was reproduced nearly verbatim in other press outlets, the Telegraph, for instance. Even the Guardian reported the story as an attack of the Russian secret services. I couldn't find skeptical comments to these stories: maybe they were censored or, simply, there were none.

3. Legends are also unbelievably persistent. The rumor that the Russians created the Climategate scandal keeps reappearing. In 2016, Mother Jones ran an especially convoluted piece in which they tried to demonstrate that, since the Russians had hacked the 2016 US elections, then it was also true that they had created the Climategate scandal seven years before (or, perhaps, the reverse: since they had created the Climategate scandal, then it was believable that they had hacked the US elections). Legends can reinforce each other, independently of whether they are based on something real or not.

This story is impressive not so much because it is false. For what I know, the hackers could have come from anywhere in the world -- they might have been Russian, why not? It would change nothing to the fact that it IS easy to lie to us. It carries no penalties and the most outrageous lies will be normally believed by almost everybody if they appear on a major media outlet. Our media have been lying to us, they keep doing that, and they will continue to do that. There is a problem, though: associations based on lies can't last very long, be they marriages, business agreements, or whole societies. Empires based on lies are destined to fall. It happened in the past and it may well happen to us in the near future.


Sunday, December 9, 2018

Why do Dragons Love Gold so Much?


We, humans, love gold so much that we have even imagined that giant, flying reptiles would share our love for the yellow metal. This curious vision of dragon's motives has a certain logic, although it takes some work to understand it. But it is sure that gold has been important in human history from the time, at least five thousand years ago, when our Sumerian ancestors started to collect gold and use it to prop the power and the prestige of their big men, the Lugals. 

Cassandra's Legacy has published several posts dedicated to gold. Below, a reflection by Pepi Cima, here some links to older posts. 



What has Gold Ever Done for us?

by Pepi Cima



Could it be that gold mining is in modern times completely useless, very costly and terribly detrimental to the environment and nobody has seriously thought about it? Could gold acquire a status not too dissimilar to that of the rhinoceros horn?


Warren Buffet, the most revered investor of all times, says: “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

Present day Gold economy is very costly for the environment and for our fossil fuel reserves. Gold bank reserves, equivalent to tens of years of civilian use of the metal, could be sold on the open market to reduce gold mining together with all its environmental and social negatives without affecting any of its industrial uses.

GOLD MINING FACTS

Global gold production totaled roughly 3300 tonnes in 2017. 10 listed gold mines are responsible for nearly 30% of global output, the remaining mines are private unlisted mines and very many Artisanal and Small Mines, ASM. ASMs, triggered by booming gold prices, have become a lucrative source of income in countries such as Thailand, Peru, and Senegal over recent years.


They involve a lot of people, one widely used estimate is that more than 100 million people globally depend either directly or indirectly on ASM for their livelihood. In Africa alone, more than 6 million people are directly employed in ASM.
Gold mining is a very big industry in absolute terms: in 2017 the market capitalization of the first 20 public gold mining companies was reported at 140 B US$, for comparison oil companies in 2018 totaled 1250 B US$.

China, the largest gold producer in the world, in 2016 accounted for around 14% of total annual production but no one region dominates. Asia as a whole produces 23% of all newly-mined gold. Central and South America produce around 17% of the total. Around 19% of production comes from Africa and 14% from the former USSR.

Increased gold prices, together with low energy costs, are encouraging the exploitation of lower and lower grade mineral in bigger and bigger mines.


GOLD AND THE ENVIRONMENT

The consequences of all this mining are land damage produced by deforestation and environmental destruction at the mine and its surroundings. Its impact is particularly damaging because it mostly occurs in pristine environments, see for example the huge mines of Las Claritas in the Caribe Indian region of Venezuela and El Sauzal in the astoundingly beautiful Tarahumara region of the state of Chihuahua in northern Mexico.

A quick look at the aerial pictures of Google Earth, ( 6°11'35.00"N, 61°26'9.60"W and 26°59'52.73"N, 107°54'3.51"W are the relative geographical coordinates) would suffice to get an idea of the physical devastation. Artisanal and small-scale mines are responsible for similar, smaller scale, havoc but in larger numbers.


Gold mining is particularly destructive also from the pollution point of view: mercury and cyanide are the two main chemicals employed in gold extraction.

For every gram of gold produced using the amalgamation process between one and two grams of mercury are released in metallic form or as vapor. UNIDO (UN Industrial Development Organization) estimates that small-scale gold mining is responsible for about a third of world mercury emissions.

Every year, 2,000 tonnes of mercury arising from human activities such as coal-fired power plants and gold mining are emitted into the atmosphere, according to FOEN, the Swiss environment office. The heavy metal is found at the site of contamination but because of its extreme volatility also at locations far from where was originally released.

Cyanide, mainly used in large industrial mines, is highly toxic. Low-grade ores are stacked into heaps and sprayed with a cyanide solution at a concentration of about one kilogram NaCN per ton of ore, a few grams of gold. The precious metal is complexed by the cyanide to form soluble derivatives, e.g. Au(CN)2. The "pregnant liquor" is separated from the solids which are then discarded to a tailing pond or spent heap, the recoverable gold having been removed. The metal is recovered from the "pregnant solution" by reduction with zinc dust or by adsorption onto activated carbon. This process can result in environmental and health problems. A number of environmental disasters have followed the overflow of tailing ponds at gold mines. Cyanide contamination of waterways resulted in numerous cases of human and aquatic species mortality.

Switzerland hosts the environmental policy center of competence for chemical products and toxic waste in Geneva, Global Environment Facility (GEF), a 183 member countries environmental cooperation voluntary organization. Coincidentally most of the gold produced in the world physically transits Swiss refineries. In 2017 2,404 metric tons of raw gold were imported into the country, worth 70 BSF, and 67 BSF were exported. Only the chemical/pharmaceutical sector is more important with 98 BSF.

GOLD MINING AND THE SOCIAL ENVIRONMENT

Degradation of the social environment is an associated issue too. Although the vast majority of artisanal scale mines are undertaking a vital livelihood activity, there is strong evidence that elements of organized crime are involved. A host of players have vested interests in maintaining the status quo of informality and illegality for example because of money laundering or smuggling schemes or of support to civil war. Incidents occur related to unsanitary work environment, child labor, human rights abuses. Some have little to do with the mining company but take place on or in the direct vicinity of the mining concessions.

Furthermore large industrial mines don't necessarily provide jobs for local unskilled populations, as is the case for the mines in the Tarahumara territories of northern Mexico where literally none of the locals are employed and all the mine workers are flown in and out from neighboring regions to an otherwise isolated mine.

GOLD MINING AND ENERGY

Gold mining is a very energy-intensive industry. In 2013 the EIA reported that the top 5 Gold mining companies were using 104 liters of diesel fuel per gold ounce extracted, at more than 10% of the extraction cost at diesel price untaxed rates. At European street pump rates, it would have accounted for nearly half of production costs.

Incidentally, Bitcoin perpetuates the energy wastefulness of gold, another money-form which has materialized as an environmental nightmare.

There is an ample literature on gold recycling and gold is often cited as an example of virtuosity of circular economy. Unfortunately an example of something of which we already have too much. A broader view of how the "system" works is badly needed.

GOLD ECONOMY

Most of the gold ever dug out of the earth in the whole history of humanity is still stored somewhere since it is precious and doesn't corrupt. In a chemical sense.

The best estimates currently available suggest that around 190,000 tonnes of gold have been mined throughout history, of which around two-thirds have been mined since 1950. Because of its indestructibility, almost all of it is still around in one form or another. On earth, we store a supply of gold large enough to keep us going for more than 100 years. But going where? Roughly 20% of production is used in electrical contacts and jewelry but most of it as a reserve of value of one kind or another.

Many think of gold as something without which financial markets would not work.

On the other side liquidity problems with a gold-based monetary system caused the Nixon administration to abandon the gold standard and from that point forward no currency has a natural resource tethered to it. All money is now created from thin air, 95% or so via commercial bank loans. 

If there is something all economists seem to agree on is that the gold standard is a bad idea for a modern economy.

Most people don't have a clear opinion about the opportunity of saving gold as a reserve of value but many stash gold in deposit boxes anyway. Freud interpreted this behavior in his usual way.

Distinguished economists seem to have a clearer idea about the subject for example, in this excerpt from General Theory of Employment, Interest, and Money, par. VI, Keynes says with a sense of humor worthy a Monty Python sketch:

Just as wars have been the only form of large-scale loan expenditure which statesmen have thought justifiable, so gold-mining is the only pretext for digging holes in the ground which has recommended itself to bankers as sound finance; and each of these activities has played its part in progress….

GOLD AND BANKING

Governments seem to know everything there is to know, in their vaults, they accumulate gold in gigantic amounts and at tremendous cost.

Central bank reserves consist of foreign currencies and precious metals, mostly gold. From the following table, one can see central bank gold distribution among countries, as a percentage of their reserves and in grams per citizen. Interestingly the two largest economies, the US and China are at the opposite sides of the spectrum. The large US reserves percentage, 75%, has to do with the belief that the US dollar doesn't need much in terms of foreign currencies reserves, its weight in the world markets makes it believable by itself. China's small percentage reflects the young age of that country as a world financial/industrial power. Modern money theory doesn't support the use of physical gold as currency reserve.


Collectively, at the end of 2015, central banks held around 31,400 tonnes of gold, approximately one-fifth of all the gold ever mined. Moreover, these holdings are highly concentrated in the advanced economies of Western Europe and North America, a legacy of the days of the gold standard. This means that central banks have immense pricing power in the gold market, crucial to the fate of gold mines all over the world. In recognition of this, major European central banks signed the Central Bank Gold Agreement (CBGA) in 1999, limiting the amount of gold that signatories can collectively sell in any one year. There have since been three further 5 years agreements, in 2004, 2009 and 2014 and the signatories have stated that they currently do not have any plans to sell significant amounts of gold. Central banks have committed to being stewards of stable markets and that they will not engage in uncoordinated large-scale gold sales. Are they aware of their environmental responsibilities too?

WHAT TO DO WITH GOLD

Can we do something useful with this giant reserves of gold? Yes, we can, we can exploit the huge labor investment done by humanity since ancient history to the advantage of the physical and social environment we live now in, without affecting the present uses of the metal.

Recognizing the little utility in hoarding present-day gold reserves most governments could agree to destine their gold to civilian use in competition with gold mining. They could do so for tens of years in a row with no practical repercussions. A side benefit would also be the one of reducing the appeal of gold for illegal money recycling and tax evasion. Our fossil fuel reserves would benefit too.

CONCLUSIONS

The commercial sale of gold reserves would represent a great victory of the environmental cause over superstition and fear of the wrong enemy, a good starting point to reexamine priorities in our economy and its relationship with a degrading environment.

The gold industry is one egregious example of how badly the demand/offer feedback loops of our exchanges work. Our right hand doesn't know what the left hand does.

The supply side of energy and labor is much more heavily scrutinized that the demand one. We investigate and invest in new energy sources far more than thinking of what to do with the energy they produce.

Do we know if we are developing so much activity and destruction for a good reason? Is this subject discussed? Are legislators taking proactive initiatives, like they do about vehicles gas milage? With cars, we move around for work and pleasure, and we should question this too, but what are we achieving with gold?

Could it be that gold mining is in modern times completely useless, very costly and terribly detrimental to the environment and nobody has seriously thought about it? Could gold acquire a status not too dissimilar to the one of the rhinoceros horn?

The gold tragedy keeps reminding me of Atahualpa's execution at the hands of the conquistadores after requiring a ransom in gold. Different actors but the end of that sad story is still not in sight.


Inca jewel, very original and beautiful art was melted to pay for Atahualpa's ransom

Friday, December 7, 2018

Peak Oil 20 Years Later: A Comment by Colin Campbell


Colin Campbell is the originator of the concept of "peak oil," the founder of the "Association for the study of peak oil and gas" (ASPO) and, together with Jean Laherrere, the author of the 1998 article on "Scientific American" that started a  wave of interest in oil depletion that re-examined the work that Marion King Hubbert performed in the 1950s. 

The cycle of the peak oil meme has something in common with the concept of "Limits to Growth." Both raised great interest, then were rejected, demonized, and criticized. Today, it seems that the general opinion has consigned  both to the realm of "wrong scientific theories," yet they had a deep resonance in our current view of the world -- the very fact that they were both so vehemently rejected tells us something.

The world peak of oil production was expected for around 2010, but shale oil delayed it of a few years, at least in terms of availability of combustible liquids. Now, it seems that we are approaching the real thing. But don't worry, just as the peak in the US production was not recognized, and not even discussed when it came in 1970s, the world peak will probably be unrecognized and not discussed when it arrives. We'll surely remain more interested in our usual pastimes of warring and quarreling. 

Colin is now 87 and he is a little less active than before in the debate, nevertheless he keeps following it and he wrote to me the note below, related to a recent article of mine. I reproduce it here with his permission (Note that I am not sure I can lead the secession of the Florentine Republic from Italy as "General Bardi" as he proposes!!)



Dear Ugo

Thank you for sending me the reference to your article on Peak oil in Energy Research and Social Science, which was excellent.

I came to realise that one of the main reasons for the difficulties in predicting the course of depletion relates to the reporting of so-called Reserves. Explorers and Engineers have somewhat different approaches. I was in the exploration side of the business and our over-riding mission was to learn the geology of the area we were examining, which especially offshore demanded drilling wells to obtain the geological information needed to build the overall picture and identify the more prospective areas. The Russian explorers under the Communist regime were allowed to drill holes to simply gather geological information, but we in the west had to claim that every wildcat well drilled had a good chance of delivering a profit. That involved estimating its potential “reserves” which we often had to exaggerate to get the management to approve the well. 

Once a successful discovery was made, control passed to engineers who had to determine how many wells had to be drilled to develop the field, the size of pipelines and other facilities. It made sense for them to be very conservative in their initial estimates of the “reserves” as they won medals if they improved over time. Their projects were naturally very influenced both by oil price and forecasts thereof. Naturally, more can be extracted if prices are high.

Then we had OPEC which agreed to share its production based on each country’s reported reserves. This in turn led to political pressures. The classic example is how Kuwait increased its reported reserves from 64 Gb in 1984 to 90 Gb in the following year, although nothing particular had changed in its oilfields. Two years later it announced a further increase to 92 Gb, but that proved too much for several of the other OPEC countries. Abu Dhabi matched Kuwait at 92 Gb (up from 31 Gb), Iran went one better at 93 Gb (up from 49 Gb) and Iraq capped both at 100 Gb (up from 47 Gb). Saudi Arabia and Venezuela also made large increases. My guess is that Kuwait changed from reporting Remaining Reserves to reporting Original Reserves (namely not deducting past production). This is in fact normal industry practice in determining the relative ownership of a field that crosses a lease boundary or frontier.

Another great difficulty is the absence of a system of clear definition for the different categories of oil, each of which has its own endowment and depletion profile. I recognise so-called Regular Conventional Oil (with a density lighter than 17.5 Deg API), distinguishing it from various other categories (including that from Fracking). It dominated past production and I think it peaked in 2005.  
I discuss all this in my last book Campbell’s Atlas of Oil and Gas Depletion (ISBN 978-1-4614-3575-4) which was published by Springer in 2013. It assesses the status of depletion by country and region as of 2010.  

There is accordingly much uncertainty about the date of the peak of all categories of oil, which is imminent, but it misses the point when what matters is the vision of the long decline that follows it. 

I recently received a reference to a very interesting book (Khan Mansoor 2018, The Third Curve - The End of Growth as we know it. www.mansoorkhan.net) which stresses that it is energy not money that drives the modern world. He was a professor but took this issue so seriously that he went back to India and bought 20 acres of land from which to build a sustainable future for himself and family. 

I conclude that easy oil-based energy fuelled the economic expansion of the past century, which allowed the population to expand greatly. The bankers lent more than they had on deposit confident that tomorrow’s economic expansion was collateral for today’s debt. But the oil price surge to almost $150 a barrel in 2008 cut demand and caused an financial crisis with the failure of several banks. Prices then collapsed into the $50s but have since edged up to about $80. I think that the world faces an economic recession comparable to that of the 1930s. We already see many political pressures and massive emigration as people find that their homelands can no longer support them. There are many political consequences which I think will include a return to regionalism as people come to realise that they will have to rely on whatever their particular area can support. Britain is already leaving the European Union (which was little more than a trading empire) and there are comparable moves in several other countries. The Catalonians want to leave Spain, and I would not be surprised if the people of Florence might not want to leave Italy. Perhaps they will turn to General Bardi as their leader. 

It is difficult for politicians in democracies to face up to the situation as they only get elected if they tell people what they want to hear, and that is certainly not the implications of Peak Oil.

It is fascinating to observe all this unfold but I am too old to do serious work on it. 


best regards

Colin.     

Sunday, December 2, 2018

When Fake News Kill: The 6 Most Stubborn (and Dangerous) Legends in History



Gary Larson's interpretation of the legend that Queen Marie Antoinette of France proposed that the people of Paris could eat cake when she was told that they had no bread. It highlights the absurdity of a legend which is, nevertheless, still widely believed today. It is the basic feature of a series of legends which are wrong, stubborn, and often kill people. 
 


A few weeks ago, I was chatting with the local people of a small Tuscan town in the countryside, when it came out that I am a member of the Club of Rome. At that point, one of them asked me, "Can you tell me how much the Club had to backtrack from their wrong predictions?" I was taken aback for a moment, but then I realized that even in a small town in Tuscany people are not immune from global propaganda. That I was asked that question is simply proof of the incredible resilience of some legends, that we may also call "fake news" or "memes".

It is an incredibly fascinating subject: why are people so easily fooled by legends which not only have no basis in facts but are also plainly absurd? Yet, it is commonplace, one of the features of our world. So, let me try to put down a list of memes -- fake news -- which turned out to be extremely resilient, with a lifetime of decades or even centuries, also dangerous legends which often kill people. The list below is not complete, but I chose examples that seemed to me especially fascinating and instructive.


1. Jews Eat Christian Children. This is one of the oldest and most stubborn legends in human history. Its origins go back to the Middle Ages, when untold numbers of Jews were accused and often murdered in Europe on the basis of this accusation which, it should go without saying, had no factual basis. From what we can read, it seems that when a child was found dead, maybe drowned, the people of the local village could find no better explanation than imagine that the Jews had killed him or her in a ritual sacrifice. It may well be that the remote origins of the legend go back to when the Romans accused their Carthaginian enemies to sacrifice children to their Gods. That was probably mostly propaganda, but it may have had some elements of truth: most ancient (and even modern) societies occasionally had to recur to infanticide in difficult times and it may be that the Carthaginians had ritualized it. But, here, the legend has expanded to tell of people kidnapping children from other national/ethnic/religious groups in order to kill and eat them -- a much stronger and nastier accusation. The legend is still alive with the Jews as culprits and has been applied to other groups, it was an element of the persecution against witches in Europe and, in recent times, it has been applied to Communists, North Koreans, and more.

2. "Let Them Eat Cake" A sentence commonly believed to have been pronounced by Queen Marie Antoinette  (1755-1793) of France when they told her that the people of Paris had no bread to eat. There is no record of the Queen ever having said that and the story seems to go back to a novel by Russeau which appeared in 1765 when Marie Antoinette was 9 years old. It was attributed to her only in 1843 by Alphonse Karr in Les Guêpes. So, not only the Queen never said anything like that, but she never knew -- or even imagined, that such a sentence would be attributed to her. And not even the people who sentenced her to death had heard of that story, either! Today, the story is well entrenched in the popular imagination. Searching for "Let Them Eat Cake" on Google produces more than 6 million results, even though a good fraction of them seem to be doubtful about the truthfulness of the report. Still, this old legend is remarkable for its persistence.

3. Thomas Malthus' prophecies of doom. It is commonly heard that Thomas Malthus (1766-1843) predicted a catastrophic collapse of the human population for some specific date, variously reported. In some cases, it is said that Malthus also argued for depopulation in terms of exterminating or starving entire ethnical groups. In reality, nowhere in his writings Malthus proposed specific dates for a future collapse and not only that: he never predicted a collapse! All he said was that the human population couldn't expand over a certain limit and that it would stay there, kept in check by famines, wars, and epidemics. Besides, Malthus was a man of moral principles and he never ever dreamed of recommending the extermination of anyone. The origins of the legends about Malthus are difficult to pinpoint but may go back to the 1972 book by John Maddox "The Doomsday Syndrome."  If so, it is a remarkably resilient legend that persists after almost half a century. As for the legend that Malthus recommended the extermination of the poor, it may go back to a 1983 book by Joel Mokyr, "Why Ireland Starved," where the author reported a truncated a statement from a letter by Malthus to make it appear that he recommended the extermination of the Irish. Today, many people still believe in Malthus' "wrong predictions" and may get angry if you try to explain to them how things stand.

4. Mata Hari: The Spy. In 1917, Margaretha Gertruida Zelle (1876-1917), renowned dancer known with her stage name of "Mata Hari," was arrested with the accusation of having passed secret information to the Germans and of having caused the death of tens of thousands of French soldiers. She was declared guilty and shot by a firing squad on Oct 15th, 1917. Today, more than a century later, it seems clear that there was no proof whatsoever against her. She was, simply, framed and killed in a classic propaganda operation, what we call today a "psyop." Nevertheless, the stories told about started to be diffused immediately after her execution and they stuck in the popular imagination. The name of Mata Hari soon became synonymous for the concept of "female spy," and "femme fatale," an evil woman who uses her charm in order to betray her country in order to make money or simply for pure evil. A remarkably stubborn legend that starts being debunked only in recent times. 

5. The Wrong Predictions of the Club of Rome. In 1972, a group of researchers from the Massachusetts Institute of Technology published a report commissioned by the Club of Rome titled "The Limits to Growth." The report examined several possible scenarios for the world's economic systems, concluding that if nothing was done to reduce the consumption rate of non-renewable or slowly renewable resources, the world's economy would have collapsed at some moment during the first half of the 21st century. The report was often criticized but what caused its downfall was an article published in 1986 by Ronald Bailey where the author re-proposed a criticism picked up in an older article: picking some dates from a single column of one of the many tables in the book, Bailey claimed the Club expected some important mineral resources to run out on those specific dates. Since, at Bailey's time, several of these dates were already in the past, he claimed that the Club of Rome had made "wrong predictions." But the dates that Bailey had considered had nothing to do with the scenarios of the study, which never predicted that humankind would run out of anything before the late 21st century. The story is told in detail in a post of mine on "Cassandra's Legacy: it was a classic case of propaganda, but the legend of the "wrong predictions of the Club of Rome" went viral and it is still alive and well today. It is remarkable how the origin of such a diffuse legend can be pinpointed exactly to a single article written by a single person: Mr. Bailey deserves some fame for what he could accomplish, too bad it was a lie. 

6. The Climate Change Hoax. This legend says that there is no such a thing as "Anthropogenic Global Warming" (AGW). Rather, the whole story is a giant conspiracy created by scientists in order to gain money, power, and prestige, or perhaps to impose a global communist dictatorship. It goes without saying that there is zero evidence of this theory and that the motivations attributes to scientists are iffy, to say the least. The so-called "Climategate scandal," a corpus of publicly diffused private messages among climate scientists, revealed occasional cases that could be seen (maybe) as poor scientific practice, but never of collusion to sway the public. But this meme was hugely successful. It is relatively recent and its origin can be pinpointed with a certain accuracy: it was  with the popular movie "The Global Warming Swindle," released in 2007. Google "ngrams" (covering up to 2008) shows that there was no mention of climate science as a scam or a hoax up to 2007. Google Trends shows how the idea that climate science is a scam or a swindle becomes a search term only after 2007. It picks up interest in the news with the "Climategate" story of 2009 and, today, the legend remains alive and well, we can see it as the thread linking the various forms of criticism against climate science (not based on data, the models overestimate warming, water vapor not considered, islands not sinking, etc.). The interesting element of this story is that it was not the work of a single person, as in the case of Ronald Bailey's memetic attack against the Club of Rome. Making a movie requires financial support and breaking into the server that kept the private messages of climatologists must have taken professional hacking work. Then, at least two movies designed to disparage climate activists were released in this period: "No Pressure" (2010) and "Combustible" (2011). Note also that the most popular anti-science climate site, "Watts Up with That" (WUWT) appeared on the Web in 2006, but it became popular only a few years later. All that suggest a concerted and financed effort to undermine climate science and science in general. Of course, this is an interpretation that cannot be proved, but it is clear that immense damage was done against climate science and science in general. The effects of this damage are still to be seen and scientists don't seem to realize that they find themselves in the same position as the French Nobles at the time of the French revolution. Heads may well start rolling in the near future, and not just in a metaphoric sense. Undermining science, one of the bases of our civilization, is destined to have profound consequences on everything.


This is an incomplete list: there is much more that could be said: Gipsies stealing children, chemtrails, abiotic oil, Russian hackers stealing the US elections, and the 9/11 attacks, a true legend factory. Not all these legends killed people, but several did, and some may kill huge numbers of people in the future -- such as the Climate Hoax one. In any case, the common element is always the search for a scapegoat, a culprit to blame for some problem that doesn't have easy solutions. It seems to be a well-ingrained mechanism working in human minds: once it kicks in, paranoia reigns and anyone, individuals, groups, entire societies, can become the target of a violent social revenge mechanism. The future will see plenty of problems, much bigger than those we are facing nowadays. How they will be interpreted and who will be taken as the target for revenge, is all to be seen.

Friday, November 30, 2018

The Seneca Effect in Six Easy Steps


The Seneca Effect illustrated in an image by Roman Pfeffer

Saturday, November 24, 2018

For Whom is Peak Oil Coming? If you own a Diesel Car, it is Coming for you!


At the beginning, the idea of "peak oil" seemed to be relatively uncomplicated: we would climb from one side and then go down the other side. But no, the story turned out to be devilishly complex. For one thing, there is no such a thing as "oil" intended as a combustible liquid -- there are tens, perhaps hundreds, of varieties of the stuff: light, heavy, sour, sweet, shale, tight, dumbbell, and more. And each variety has its story, its peculiarities, its trajectory over time. Eventually, all the oil curves have to end to zero but, in the meantime, there is a lot of wiggling up and down that continues to take us by surprise. Mostly, we didn't realize how rabidly the system would deny the physical reality of depletion, much preferring to "legislate scarcity" on the basis of pollution.

Here, Antonio Turiel writes a fascinating post telling us how the peak is coming "from below," affecting first the heavy fraction of crude oil: diesel and fuel oil. That's already causing enormous problems for the world's transportation system, as well as for the owners of diesel cars, and the situation will become much more difficult in the near future. The light fraction, the one that produces gasoline, seems to be still immune from peaking, but that will come, too.(U.B.)

The Peak of Diesel Fuel: 2018 edition. 


By Antonio Turiel (translated from "The Oil Crash")
 
Dear Readers,

Six years ago we commented on this same blog that, of all the fuels derived from oil, diesel was the one that would probably see its production decline first. The reason why diesel production was likely to recede before that of, for example, gasoline had to do with the fall in conventional crude oil production since 2005 and the increasing weight of the so-called "unconventional oils," bad substitutes not always suitable to produce diesel. With the data of that 2012, I wrote "The Peak of Diesel". At that time, there was a certain stagnation of diesel production, but it seemed to be too soon to venture if it was final or if it could still be overcome. I reviewed the issue in 2015, in the post "The Peak of Diesel: Edition of 2015." The new data from 2015 showed that in 2012 there had really been no peaking, although diesel production had grown less strongly if we compared it with the previous historical rate, and even the last 18 months of the period studied at that time showed a certain stagnation. Now it has been another three years, and it is a good time to look at the data and see what happened.

Before starting, I would like to thank Rafael Fernández Díez for having the patience to download the JODI data, for having elaborated the graphs I show here, slightly retouched, and for having made me notice the problem that is being raised with the refining of heavy oils (We'll see more below). He hasn't had time to finish this post and that's why I'm the one who wrote it, but what follows is actually his work.

As in the previous two posts, we will use the database of the Joint Oil Data Initiative (JODI). This database provides information about most of the world's oil and refined products, but not all of them. The countries not included are countries with serious internal problems and a great lack of transparency, either because of wars or because they are very tight dictatorships. For this reason, the figures that I will show are around 10% lower than they should be if they were representing the whole world. However, given the characteristics of the excluded countries, it is most likely that their data did not change the observed trends, only the total amounts.

All the graphs that I will show are seasonally adjusted, that is, the points are the average of the previous 12 months. In this way, the effects of the variation due to the season are avoided, the graphic is less noisy and trends are better seen. The graphs will always be expressed in millions of barrels per day (Mb/d). First of all, I show you the graph of the evolution of diesel production over the past years:

 
As seen in the graph, the year 2015 marked the maximum so far. There had not been such a marked drop in production since the crisis of 2008-2009, but in the case of the fall of 2015 we find that 1) there has not been a serious global economic recession; 2) the descent is lasting longer and 3) the levels of diesel production show no sign of recovery. Although it is still a little early to ensure that the peak of diesel has occurred, stagnation - even falling - is starting to drag on for too long to be ignored.

Looking at the data of JODI, two other very interesting things are observed. On the one hand, if one analyzes the production of all the fuel oil that is not diesel (fuel oil) it is found that its production has been in decline for years.




As the graph shows, since 2007 (and therefore before the official start of the economic crisis) the production of fuel oils is in decline and it seems to be a perfectly consolidated trend. The diehard economicist interpretation is to consider that there is simply no demand for these fuels (which, although of the same family, are heavier than diesel). When oil is refined, it is subjected to a process called cracking, in which the long molecular chains present in the oil are broken (by means of heat and other processes) and then the molecules are separated by their different properties of fluidity and density. The fact is that if you have made changes in the refineries to crack more oil molecules and get other lighter products (and that is why less heavy fuel oil is produced), those molecules that used to go to heavy fuel oil now go to other products. By logic, taking into account the added value of fuels with longer molecules, it is normal that these heavy fuel oils are undergoing cracking, especially to generate diesel and possibly more kerosene for airplanes and eventually more gasoline. We must not forget that from 2010 the fracking in the USA began to take off, flooding the market with light oil, which is not easy to refine to make diesel. It is therefore quite likely that the refineries have adapted to convert an increasing amount of heavy fuel oil into light fuel oil (diesel). It reinforces this idea that, if we add the volumes of the two previous graphs we have, there is a certain compensation for the trends of diesel production, increasing until 2015, and the long-term trend of decrease of the rest of the fuel oils.


This figure shows that, after the 2008-2009 slump, it has been very hard to raise the total production of fuel oils, which peaked in 2014 and have remained there for almost a year; and at the moment it is suffering a resounding fall (about 2,5 Mb/d from the levels of 2014).

This last observation is quite relevant because if, as you can guess, the industry is cracking less heavy fuel oil to ensure that the production of diesel does not go down too much, the rapid fall of heavy fuel oil will quickly drag down the diesel production. In fact, the graph shows that, after falling in 2015 and 2016, in 2017, it was possible to stabilize the production of all fuel oils, but it is also seen that in recent months there was a quite rapid fall. Surely, in this shortage, we can start noting the absence of some 2.5 Mb/d of conventional oil (more versatile for refining and therefore more suitable for the production of fuel oil), as we were told by the International Energy Agency in his last annual report. This explains the urgency to get rid of the diesel that has lately shaken the chancelleries of Europe: they hide behind real environmental problems (which have always troubled diesel, but which were always given less than a hoot) to try to make a quick adaptation to a situation of scarcity. A shortage that can be brutal, since no prevention was performed for a situation that has long been seen coming.

The followers of that religion called economic liberalism will insist with all their strength that what is being observed here is a peak of demand, that old argumentative fallacy that does not agree with the data (who can think that people are stopping to consume oil because they want? Maybe because they have better alternatives? Which ones?). They will argue that there is a lower demand for diesel and that this is why production stagnates and that the production of fuel oils drops because, as they are more polluting fuels, the new environmental regulations do not allow their use. It's a bit of the old problem of who came first, the chicken or the egg. With regard to the fact that the demand for diesel does not increase, prices have a considerable influence: this is how shortages are regulated in a market economy. And, as for the environmental reasons, the production of heavy gas oil has been dropping from 2007, when there was not as much regulatory interest as there seems to be now. There is one aspect of the new regulations that I think is interesting to highlight here: from 2020 onwards, all ships will have to use fuel with a lower sulfur content. Since, typically, the large freighters use very heavy fuel oils, that requirement, they say, makes one fear that a shortage of diesel will occur. In fact, from what we have discussed in this post, what seems to be happening is that heavy fuel oils are declining very fast and ships will have no choice but to switch to diesel. That this is going to cause problems of diesel shortage is more than evident. It is an imminent problem, even more than the peaks in oil prices that, according to what the IEA announces, will appear by 2025.

The second of the interesting things that the JODI data shows us is how the volume produced of all petroleum products has evolved.




The volume produced has been able to continue increasing during these years thanks to the energy subsidy that the US is giving to the world by means of fracking. However, fracking oil only serves to make gasoline and that is why the diesel problem remains. But you can also note how the end of the graph above shows the same trend in the production of diesel, with a drop of more than 2 Mb/d. What does that mean? That the contribution of fracking to the whole volume is also hitting the ceiling, it does not get any higher. It is a further indication that we are already reaching the peak oil of all petroleum liquids.

That is why, dear reader, when you are told that the taxes on your diesel car will be raised in a brutal way, now you know why. Because it is preferred to adjust these imbalances with a mechanism that seems to be a market (although this is actually less free and more adjusted) rather than telling the truth. The fact is that, from now on, what can be expected is a real persecution against cars with an internal combustion engine (gasoline will be next, a few years after diesel). Do not say that you were not notified (and I was not even the first to do it in this blog). And if it does not seem right, maybe what you should do is to demand that your representatives explain the truth.


Regards

AMT


Note: this post was translated from Spanish using Google Translate, which did a pretty good job, necessitating only some retouches -- although the result is still somewhat "Spanish-sounding" even in English! One problem is the use of the Spanish terms "gasoil" and "diésel" which may not mean the same thing as they do in English (in Italy, btw, diesel fuel is always termed "gasolio"). But these two terms indicate a very similar entity, even though maybe not identical. So, I reworked Turiel's text a little in order to use only the term "diesel".

Friday, November 23, 2018

How to See the World with Different Eyes: "Oil, Power and War" by Matthieu Auzanneau


Folks, this book, Oil, Power, and War, is truly unbelievable: Matthieu Auzanneau did an enormous amount of work in digging out and reporting the whole story of the first half of the oil age, from its beginning all the way to the now, when we are reaching the global peak (and the fall may be much faster than the growth as Lucius Annaeus Seneca noted long ago).

I have to tell you, after having studied oil depletion for some two decades and having written at least three books on it, I thought I knew something about oil. But this book amazed me with the number of things I had missed.

Just an example: did you know that British planes of the Battle of Britain, during WWII, had a higher octane fuel than the German ones? That was an important advantage for Britain: a few extra octane points obtained by being able to start with a different oil source may have won the war for the allies!

Reading such a massive book will take you hours, but it is worth the effort. Afterward, you'll see the world with different eyes. Congratulations to Matthieu Auzanneau and also to Chelsea Green for having translated it into English (something very unusual for the American book market)



Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014). His most recent book is "The Seneca Effect" (Springer 2017)