Sunday, December 30, 2018

2019: Are you Ready for a New World War? A Statistical Analysis



Detail from Picasso's "Guernica" - 1937


With the end of 2018, also the centennial of the end of the Great War (or WWI) is over. It passed remarkably in silence: a few celebrations, but little or no discussion of the reasons and the consequences of that war, supposed to be the one that would "end all wars." Of course, it was too much to expect that wars would ever end, but maybe we could have at least learned something from rethinking to a conflict that caused some 40 million victims for no evident purpose. But that didn't happen (if you can read Italian, you may be interested in a reflection of mine on the subject).

So, the world situation, today, looks more and more similar to the military build-up that took place in Europe in the years preceding the Great War. The Great Powers are arranging their forces as if they were setting their pieces on a giant chessboard. At some moment, someone may well decide to make the first move. And, in this giant chess game, the kings can wipe out all the pieces on the chessboard in a single move with their nuclear warheads.

It would be nice to follow Steven Pinker's optimism about modern times, supposed to have become less violent. There may be such a trend for the past few decades, but it is always dangerous to extrapolate from a limited dataset. In this case, the optimism of Pinker seems to be simply wrong if measured over a time span of several centuries. This is the result of an analysis of the data for the conflicts of the past 600 years that myself and my coworkers Martelloni and Di Patti performed in 2018 -- it was thought, in part, as a way to celebrate the centennial of the Great War.

Our results are mostly a confirmation of a series of analyses that was started by Lewis Fry Richardson, pacifist and polymath, who was the first to study wars trying to understand their statistical patterns. It is a field that today has grown and arrived at a number of conclusions, mainly that war is a statistical phenomenon largely independent from religions, ideologies, money, and great leaders. It is an "emergent phenomenon" of the complex network of interactions among human societies worldwide. There is some evidence that wars are becoming less frequent, but they are also becoming more deadly. There follows there is a chance of a major conflict in a non-remote future that could dwarf all past conflicts in terms of the destruction it could cause. On this point, see a recent paper by Aaron Clauset.

Unfortunately, the results of these studies are practically unknown beyond the small group of practitioners engaged in it and with every new war we repeat the mistakes of the Great War, thinking that a war could be a way to end wars -- it is something that was repeated as recently as with the 2003 invasion of Iraq. As usual, we are marching blindfolded into the future and the future may not be kind to those who don't understand it.

I have already reported some preliminary results of this study (also here, here, and here). Now you can read our complete paper on ArXiv, and here are some excerpts.

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Pattern Analysis of World Conflicts over the past 600 years

(excerpts from the complete paper)

We analyze the largest database available for violent conflicts, the one prepared by Brecke (Brecke 2011), covering some 600 years of human history. After normalizing the data for the global human population, we find that the number of casualties tends to follow a power law over the whole data series for the period considered, with no evidence of periodicity. We also observe that the number of conflicts, again normalized for the human population, show a decreasing trend as a function of time. Our results tend to support the idea that war is a statistical phenomenon related to the network structure of the human society.




Our contribution in this field consists in validating the Brecke conflict database (Brecke 2011)⁠, among the longest and most complete ones available. This analysis confirms previous work, see e.g. (Clauset 2018)⁠ , (Clauset and Gleditsch 2018)⁠ for a general discussion. The data indicate that power laws are common in the distribution of violent conflicts in human history – in this case, the trend is clear when the number of casualties is normalized for the increasing world population. Note also that the normalized number of conflicts per year tend to decrease with time – this result indicates that in modern times war have tended to become less frequent, but more destructive. In practice, these results confirm that there is little evidence supporting the idea popularized by Pinker (Pinker 2011)⁠ that humankind is progressing toward a more peaceful world. A new major conflict might be possible in a non-remote future, as discussed among others by Clauset (Clauset 2018)⁠. These results seem to indicate that human conflicts are a critical phenomenon: we could say that humans worldwide tend to form societies existing in a self-organized critical condition, as defined by Bak et al. (Per Bak, Tang, and Wiesenfeld 1988)⁠. In these conditions, war is simply one of the methods that the system has to dissipate entropy at the fastest possible speed (Kleidon, Malhi, and Cox 2010)⁠,(Trinn 2018). In other words, war appears to be an unavoidable consequence of the behavior of human beings, and perhaps of other primate species (de Waal 2000)⁠.
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Sunday, December 23, 2018

When Jerusalem was in Tuscany. The Last Gasps of a Dying Empire

This post was previously published on "Chimeras." It is reproduced here with an introduction and some minor modifications



Did you know that in Italy there is a place called "Jerusalem in Tuscany?" In the monastery of "San Vivaldo," you can find a 16th-century sanctuary structured in such a way to make pilgrims go through an experience similar to that they would have by visiting the real Jerusalem. The sanctuary is still very much the same as it was when it was built, half a millennium ago.



The key feature of all empires is their centralized control over different social and economic subregions. Control is normally obtained by a combination of metal currency and military means, but that's not strictly necessary. Our modern Global Empire does not disdain the use of lethal force, but it is kept together largely by the soft communication techniques we call "propaganda" or, more recently, "consensus building." Some ancient empires were also based on communication techniques, in particular the Catholic Church which dominated Western Europe for about one millennium using its monopoly on Latin as regional 'lingua franca'. Here, I am examining the traces left by the last attempt of the Church to maintain its dominance by developing a completely new, image-based, communication system. It didn't work, but it was impressively modern and it compares well with our present icon-based communication systems. It may tell us something about where we are going in terms of the control of those large social organizations we call "states."



Imagine yourself in Europe during the late Middle Ages -- it was a different world for many reasons but one would perhaps be the most striking: language. Today, Europe is organized in terms of sharp borders of linguistic areas that usually correspond to national states. Inside the borders, there is one -- and only one -- "correct" language while dialects or minority languages are at best tolerated and often despised. But, in the world of the Middle Ages, languages varied smoothly as you moved from one village to another and, after a few hundred kilometers, people could barely understand each other. And, of course, there were fuzzy boundaries for the main language areas: the Latin, the Germanic, the Celtic, the Greek, the Slavic, and other minor ones. Europe was truly a Babel.

But there was a lingua franca that connected the various areas of Europe: Latin, an inheritance of the dead Roman Empire. The Romans had created a nearly homogeneous Latin-speaking language area that included most of Western Europe and of North Africa, while the rest of the Empire spoke Greek. That language unity had been lost with the fading of the empire, disappearing when its dominance tool, gold-based currency, had disappeared with the depletion of its gold mines.

But the loss had been only partial. In Western Europe, Latin was still thriving and, in a certain sense, the Empire was still alive. A new organization had taken the place of the Roman Empire, the Church, which proclaimed itself "Catholic" ("universal" from καθολικός) and used many of the same tools: its structure was patterned on the Imperial one, with the Pope in Rome playing the role of the Emperor, the overseers (bishops) playing the role of the Roman governors, and with Latin remaining the universal language, at least for Western Europe.

The difference was that the Church couldn't use military force to maintain its dominance: legionnaires had to be paid and that required hard currency which had disappeared in the metal-poor Europe of Middle Ages. So, the Church was a "soft" empire which never directly ruled Europe. It operated mainly influencing Feudal Rulers who needed overseers, interpreters, counselors, accountants, and the like. Latin was a fundamental tool for the role of the Church: a monk from Ireland would speak Gaelic with the other monks of his monastery, but he could speak in Latin with a visiting priest from Italy. And both could advise their local kings when it was the time for negotiations with some foreign warlord. All over Western Europe, a Church-based Latinized area had developed and it was the main cultural feature of Europe of the time.

But things always change and, sometimes, change fast. Europe's population kept growing during the Middle Ages, not smoothly but in a series of collapses and rebounds. By the mid 14th century, the "black death" had killed some 30 million Europeans, about one-third of the population of the time. Half a century later, Europe had recovered and the population was skyrocketing upward. It was the time of the great explorations, of the discovery of new lands, and of the return of abundant currency with gold coming from the Americas. The new wealth was creating new political structures: states much more powerful than the ragtag feudal kingdoms that had dominated Europe in earlier times.

With the economic changes, there came cultural changes. More people could afford to learn how to read and write and the monopoly of the Church on cultural matters was being threatened. Already during the early 14th century, Dante Alighieri wrote his "Comedy" not in Latin, the language of the intellectuals, but in Vernacular Italian: a language that the people of Florence could understand. But it was with the invention of the printing press by Gutenberg, in the mid 15th century, that things really took a different path. As long as a book had to be laboriously copied by hand by a scribe, it was an expensive tool for a class of specialists and it made no sense to write it in a language that wasn't Latin. The printing press made books affordable by people who were not part of the Church's clergy.

Revolutions always bring unexpected changes: the 15th-century European bourgeoisie who could afford printed books were not professional clergymen and few of them had studied Latin. Suddenly, a new market appeared: that of books printed in vernacular languages. Already in the late 15th century, Bibles in German were being printed and you know how Martin Luther published a German version of the Bible in 1522. That was, possibly, his most revolutionary act. With Bibles in their language, people didn't need anymore a priest to interpret the holy scriptures for them. The Latin-based Catholic Empire had suddenly become obsolete.

Of course, the Catholic Church didn't just sit and watch as it was being pushed into the waste bin of history. You know about the counter-reformation movement, the Council of Trento (1545- 1563), and the thirty-years war, up to recent times the bloodiest confrontation recorded in human history. With the counter-reformation, the Church reaffirmed the primacy of Latin as the language of choice, truly the sacred language of Europe.

But that couldn't work. Latin could be a lingua franca, a tool for understanding each other, but it was hardly a sacred language. Moslems could claim that God had spoken in Arabic to the Prophet Muhammad. But never in the Christian scriptures you could read that God had spoken in Latin to anyone, He had spoken in Hebrew or, at most, in Aramaic. And the Christian prophets of the New Testament had used Greek. Latin could provide translations, but it wasn't the real thing.

So, the Catholic Church was fighting an impossible battle. It must be said that it put up a spirited resistance and that, during the 18th century, there was an attempt to revive Latin as a cultured language, for instance, Isaac Newton wrote his "Principia" in Latin in 1687. But it was a brief revival, the tumultuous growth of national states in Europe destroyed all attempts to keep Latin as a universal language. By the late 19th century, Europe was what it is today: an ensemble of nation-states whose behavior could be likened to that of a group of drunken psychopaths at a party, each one armed to the teeth and ready to start shooting at the others at the slightest hint of provocation. Engaged in their local quarrels, the European States managed to destroy themselves in a series of internecine wars and the result was the expansion of the American Empire and the dominance of English as the world's lingua franca during the second half of the 20th century. At that point, Latin had become a language as dead as ancient Sumerian.

During the transition from Latin to English, for the Catholic Church it was impossible to maintain the fiction of universality. During the Great War, Catholic Priests were blessing the Austrian and the Italian soldiers on the opposite sides of the frontline and encouraging them to kill each other in the name of the same God. That made no sense, obviously, and the Church eventually admitted defeat with the Second Vatican Council, (1962-1965), when permissions were granted to celebrate the Mass in vernacular languages. With the demise of Latin, priests from different regions of the world were now speaking to each other in English. It was the end of an age: the Catholic Church was not universal anymore.  Even though theoretically still a structure dominated by the Roman Papacy, it was to become what it is now: a loose network of national churches, not unlike the Protestant Churches it had been battling against so strongly. The Catholic cycle of domination over Western European history had lasted more than a millennium -- now it was over.

But let's go back to the 16th century, when the battle lines were just starting to be drawn. The Catholic Church didn't just resist change, it tried to fight back. It did so by using the weapons it had, in particular, its rich and varied tradition of iconography, from frescoes to nativity scenes. There was a reason for this tradition: the Church had been using a language - Latin - that was completely alien to many of its followers, so it had used images as a way to make the message more easily understandable. Christianity had moved along a path different than that of Islam, which had instead capitalized on the capability of the Ummah of understanding, at least in part, Classical Arabic, the language of the Holy Quran. So, when the Latin-based claims to universality were threatened, the Church reacted with a bold move: trying to develop a new universal language. It was to be a purely iconographic one. 

This is what the sanctuary of San Vivaldo was: an original attempt to develop a new language, one that would bypass the Protestant target of the literate elites to speak directly to the illiterate masses (as we would call them today). The images of the sanctuary show strictly no text -- they are purely visual icons, based on color, movement, postures, expressions. They are very simple and direct, similar to our modern comic strips.


We can imagine that the visitors of the various chapels were accompanied by guides explaining to them what they were seeing in their vernacular language -- these guides would play the role of the "text balloons" in our modern comics. And the full-immersion experience would have been remarkable in a world that had none of the modern graphical tricks: movies and newspapers. 

Did it work as planned? For us, some five centuries after that San Vivaldo was created, it is difficult to judge. There are many "Holy Mountains" in Europe which attempt to provide the same kind of emotional experience that San Vivaldo does, all based on simple and high-impact dioramas. At least one more "Italian Jerusalem" exists in Val Sesia, the Holy Mount of Varallo, also based on dramatic and colored 3D images, as you see below.


Over time, with the development of the popular press and of TV, these sanctuaries lost importance and became obsolete. They were forgotten, although many of them still exist, scattered all over Europe. But the basic idea remains that of providing a non-text communication that bypasses the need for translation. Isn't it exactly what we are doing with the icon-based signs that you can find almost everywhere, today? 

Then, the development of machine translation may soon make universal languages obsolete. It is not a perfect technology, but today it is already good enough to turn the world from a Babel tower to a sort of gigantic train station. The new communication technologies may succeed in making writing and speech fully user-transparent: the interface will transform our input in whatever vernacular we happen to speak into a different vernacular understood by the person on the other side of the system. Is this the ultimate Esperanto? And what effect will it have on the seemingly all-powerful nation-states of today, so fond of warring and of killing people? 

Impossible to say, but, as usual, we are running into the future without ever wondering if we really want to go there. 


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Note: I went to San Vivaldo in 2017, the place is truly impressive and nearly unknown. If you have a chance to visit Tuscany, by all means, take this less beaten path and enjoy this special jewel of Tuscan history.







Thursday, December 20, 2018

Not Even a Blip: The Great Flop of Climategate #3

The results of a "Google Trends" examination of the number of searchers for the term "Climategate." The large peak in 2009 was generated by the wave of interest created by the release of the first batch of e-mails exchanged among climate scientists. A few weeks ago, a new batch of mails was released, but it generated no interest: not even a blip in the curve.


You remember the "Climategate" story, don't you? It was in November 2009 when a batch of private e-mail messages exchanged by climate scientists was stolen and diffused over the Web. The bruhaha that resulted was unbelievable and the messages were described as the "proof" that Climate Science was an elaborate hoax, a conspiracy created by scientists in order to gain money, prestige and influence.

The peak you see at the beginning of this post is a plot from "Google Trends," it shows how the Climategate term literally exploded in the memesphere. Today, after nearly 10 years, we could legitimately scratch our heads at thinking what there was so interesting in this story that deserved so much time and so much discussion. Really, there was nothing in those emails-- on the whole, they were as boring as mail messages among scientists could be (*).

So much overhyped was the Climategate 'scandal' that the later attempts to resuscitate it were hit by the memetic curse of irrelevance. A new batch of e-mails exchanged among climate scientists was released in 2011, it was termed "Climategate #2" and it is barely visible as a small peak in the Google Trends curve (see above). Then, a third batch was released just a few weeks ago, this time by the force of an FOIA directed at the University of Arizona.

The result? Not even a blip in the Google Trends curve (see the figure above). Nothing, zero, zilch, nul, nada, niente. The infamous blog what's there that's up? tried to raise interest in these mails, but the results were dismaying. The posts on the subjects generated a few hundred comments from hardcore science deniers, but it doesn't seem that anyone could find anything interesting to say. It is part of the harsh laws of memetics: nothing goes viral if there is not a good reason for it to do so.

So, Climategate seems to have died not with a bang, but with a whisper, as it was probably unavoidable. But that raises the question of why such an uninteresting story raised so much interest. There is only one possible explanation for this, it was a Dark Public Relations (DPR) job. Someone paid for having the Climategate story to go viral and it worked beautifully. Indeed, from the results we reported in a recent paper that we (myself and my coworkers Perissi and Falsini) published in Kybernetes, we can say that this growth was not generated by a bottom-up 'viral' mechanism, but by a top-down 'fallout' mode generated by the media. As I argued in a previous post, a concerted (and financed) defamation campaign against climate science started in 2006, the Climategate story was part of it.

Now, the concerted effort of defamation of climate science seems to have faded, as shown by the failure of keeping the Climategate story alive. It may be because there is no money available to push the mainstream media to rekindle the interest in this subject and that, in turn, may be because there is no need to defame climate science anymore. The DPR operation has been a success: the legend that climate change is a hoax is by now entrenched in a significant fraction of the public, especially in the US. Once they are 'encysted" memes may have a long life and they may well kill their host, I this case, the victim will be humankind, unable to react effectively against the threat of global warming. Indeed, the laws of memetics aren't just harsh -- they can be deadly.



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(*) In 2016, Aaron Bandler tried to pick up again the Climategate story in an article titled "Nine Things you Need to Know About the Climate Change Hoax"appeared on the Daily Wire, where he endeavored to explain why and how the Climategate mails proved that Climate Science is a hoax. The first item of his list is titled "The Climategate scandal proved that key data involving man-made climate change was manipulated."

Oh, yeah? So, what is this "proof"?  -- read carefully the whole article by Bandler and scratch your head. There is strictly nothing in the article that comes directly from the Climategate mails -- yep, not a single citation, not an excerpt, not a summary, nothing-nothing. The "nine things you need to know" are either posterior to the Climategate story or unrelated to it. There is nothing in the Climategate mails that could even vaguely prove that climate science is a hoax. Nothing interesting here, move along, folks.







Sunday, December 16, 2018

Peak Diesel or no Peak Diesel? The Debate is Ongoing



In a recent post, Antonio Turiel proposed that the global peak of diesel fuel production was reached three years ago, in 2018. Turiel's idea is especially interesting since it takes into account the fact that what we call "oil" is actually a wide variety of liquids of different characteristics. The current boom of the extraction of tight oil (known also as "shale oil") in the United States has avoided, so far, the decline of the total volume of oil produced worldwide ("peak oil").

Shale oil has changed a lot of things in the oil industry, but it couldn't avoid the decline of conventional oil. That, in turn, had consequences: shale oil is light oil, not easily converted to the kind of fuel (diesel) which is the most important transportation fuel, nowadays. That seems to have forced the oil industry into converting more and more "heavy" oil into diesel fuel but, even so, diesel fuel is becoming gradually more scarce and more expensive, to the point that its production may have peaked in 2015. In addition, it has created a dearth of heavy oil, the fuel of choice for marine transportation. In short, the famed "peak oil" is arriving not all together, but piecemeal -- affecting some kinds of fuels faster than others.

Turiel's proposal has raised a considerable debate among the experts, with several of them challenging Turiel's interpretation. Turiel himself and Gail Tverberg (of the "our finite world" blog) discussed the validity of the data and their meaning. Below, I reproduce the exchange with their kind permission. As you will see, the matter is complex and at the present stage it is not possible to arrive at a definitive conclusion. In my personal opinion, I would say that it is understandable that many of us are afraid of being criticized for having called wolf too early, but that it is nevertheless worth reporting one's data and discuss them on the basis of what we know. Then, as attributed to John Maynard Keynes, "When I have new data, I modify my conclusions. What do you do, sir?"

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Gail Tverberg


Dear Ugo,

I don’t know if you have noticed, but data by type of refined fuel is available from various standard sources of energy data. EIA data has a lot of detail data for the US; BP has regional data for a number of breakdowns. There are no doubt other sources for oil consumption by country. I think of JODI as voluntary data; it is not really clear (to me) which countries are in or out, for which periods.

The information you are showing in your recent post seems to show a fairly different pattern from what BP shows (Dist. means Distillates).



According to BP, Middle distillates consist of jet, heating kerosenes, gas and diesel oils (including marine bunkers).

Within Medium Distillates, there is a further breakdown for recent years, showing a category called diesel/gasoil separately from jet/kerosene. It shows a fairly similar pattern.

It is the “fuel oil” category, which seems to be the heavy distillates, that shows the big downturn in consumption. This is consistent with what we see in the US. Refineries can make a lot more money if they crack heavy oil and refine it into lighter products than if they sell it in close to the unrefined state. In the US, much road construction has changed from asphalt to concrete. Concrete is a coal product in some parts of the world.



In the US, petroleum coke has also shown a big downturn.





With respect to what EIA calls distillate fuel oil (which I think of as diesel), in the US, there indeed were two big steps down.




The first downturn in consumption, in 1981 (when interest rates were raised), was when a lot of home heating and also electricity generation was switched from diesel to other energy products. The second downturn occurred in 2008, when even more homeowners switched away from using diesel for home heating. Also, on the industrial side, some new techniques were developed for drilling oil wells, using natural gas instead of diesel. Natural gas is usually produced in the same field, and is much cheaper for oil producers to use, rather than purchasing diesel. Note that the percentage downturn is far smaller in the "distillate fuel oil” chart than for the other two EIA charts I showed.

To me, it is very difficult to figure out exactly what is happening, with such similar names for different products. Also, there seems to be a lot of shifting of use around the globe. All of this makes the situation confusing.

You might want to backtrack a bit on what you said about diesel. The evidence doesn’t seem as strong, looking at other sources. Perhaps a different post, looking at some new data as well, would be in order. BP data can be downloaded from this link: https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html The tab you are interested in is Oil - Regional Consumption.

Best wishes,

Gail

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Antonio Turiel


Dear Gail,

As for any other peak, some years must be spent to be completely sure that we have passed them. So any evidence so far must be taken, always, with a bit of caution, and in that sense I agree with your warning.

Regarding data, I prefer to use JODI because JODI data is better grounded than EIA data - EIA data contains a lot of "inference", typically spawning from six months in the US up to a couple of years in other countries. JODI data, on the contrary, tend to be more timely (and when there are significant time lags these are reported). Notice also that EIA, IEA and BP use JODI data as one of their sources.

Another significant difference is that in your first graph you represent consumption, while I always represent production. The difference is significant, as I am mainly interested in the refinery throughput because this is the problem I want to characterize (the difficulties to increase the output). The use of stored stuff explains the difference between both.

Some readers have pointed out that the slowdown and even decrease in diesel production, if real, could be a consequence of a lowering demand. This is the same situation as for peak oil: you can always argue that there is not enough demand for that oil, and it is true in any instance: the problem is one of affordability, as you have explained many times.

Regards,


Antonio

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Gail Tverberg
Hello Antonio,

I think that there is a real difference between the kind of data a person wants to look at when that person is examining the indications for an individual country or a subdivision within a country and the information a person wants to look at for world level indications.

When a person is looking at detail level data, then I agree that there is very often a big difference between production and consumption. Looking at data such as JODI data, along with other indications, can be helpful for putting together the true indications for that small grouping. A person has to be pretty aware of particular patterns for individual countries or other smaller groupings. I know, for example, that Texas shale oil data seems to be reported much more slowly than North Dakota shale oil data. Some countries are notorious for trying to exaggerate their production. This is why OPEC shows two sets of numbers, in its monthly reports: “from secondary sources” and “as reported by the producer.” The “from secondary sources” numbers are generally viewed as the more accurate ones.

When a person is looking at small segments of data, corresponding more or less to how the data is reported, then it is fairly easy to see major mistakes. For example, does it look like the "diesel” (or some other grouping) accidentally got reported as “fuel oil,” for some period of time? Does it look like some categories are simply missing, or the amounts have been misinterpreted? If I am looking at detail data, then I can look for mistakes. By the time aggregations occur, the big problems, like missing whole sets of data from some small countries, will be difficult to see. If I am looking at aggregate data, especially on a world basis, I really want someone to have looked at the data in detail, and to have figured out what pieces were missing. They have no doubt made some estimates of the missing pieces, but if I am making estimates of trends, making estimates of the missing pieces is absolutely essential.

I personally have no experience working with JODI, but I have worked with an awfully lot of other data sets (in the insurance world previously, and now in the energy world). I am very much aware of the fact that the initial coding is likely to have a lot of flaws, especially if it is voluntary, and doesn’t have to balance to published financial data.

There is indeed some difference between production and consumption, but when we get to a world basis, they mostly offset. For the purpose of determining trends, what we want is well-massaged data–data that is as free from errors and omissions as possible. I would be willing to believe EIA, IEA, or BP data for this purpose. I would much prefer using well-massaged consumption data to look at trends, rather than a summation of individually reported data of questionable validity.

I have at least a little background on what is happening. I know that there is a fair amount of flexibility in the distribution of finished oil products that can be obtained from a barrel of oil. In general, it is possible to “crack” long hydrocarbons to make shorter (and thus lighter) hydrocarbons; it is close to impossible to go from short chains to longer chains. I was involved in discussions in 2008, when oil companies wanted to increase the refining of what had been products such as asphalt and petroleum coke, because, with high oil prices, oil companies could make a much larger profit from refining heavy oil into higher-price products such as diesel and gasoline. Concrete could be substituted for the asphalt. The US has a natural advantage in cracking long molecules because it has an abundant supply of low-cost natural gas. That keeps the cost below what a similar process would cost in Europe. Heavy oil, such as that from the oil sands, also tends to sell at a substantially lower price than light sweet oil, making the process profitable in the US under a range of price scenarios.

When I see two different trends, one in the JODI data and a different one in the BP data, I am inclined to believe the BP indications.

A Different Diesel Problem

I think that Europe may have a different diesel problem than the one you are thinking about. Europe has tended to use diesel to power its private passenger automobiles as well as its trucks. This is an awfully lot of “demand” to put on one segment of refined products from a barrel of oil. The US and many other countries have spread out demand, with private passenger automobiles using gasoline, instead of diesel. This allows for demand to match up better with what comes out of a barrel of crude oil. According to BP data, in 2017, Europe consumed 7.7% of the world’s gasoline supply and 24.4% of the world’s supply of a subcategory it calls diesel/gasoil. (These are subcategories for recent years that I don’t show on the chart above.) I suspect that there is no oil, anywhere, that could be refined to provide the overly heavy diesel mix that Europe requires. No one in Europe stopped to think, “If cars and trucks both run on diesel, we will need to import an awfully lot of diesel from the world market. We are asking for problems. If the world has barely enough to go around, our demand will raise world diesel prices.”

At this point, there is no sense in adding a whole lot of refining capability for heavy oil in Europe; Europe lacks the cheap natural gas to process it. The same BP report mentioned previously also shows data on Europe’s refining capacity and its refinery throughput. Refining capacity and throughput both seem to be falling, as available North Sea oil falls.


Best wishes,

Gail Tverberg


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Antonio Turiel

Dear Gail,

Sorry for my late response - I'm presently attending an important conference in Rome, and the previous days I was very busy preparing my presentation.

Regarding your comments, if I understand correctly your point, you prefer EIA, AIE and BP data as they have better quality, apart from the fact that they integrate diverse sources of data. The key point is that they apply a better quality control and the result is, let's say, better.

This is a reasonable point, but something that I anyway call into question: are those data really better? As a matter of fact, both EIA and IEA suffer political pressures to make up their data, and this kind of thing is much worse than having an error: it is a bias. Random errors (unexpected data failures, data flow interruptions, occasional double accounting, etc) do not really change the trend, just increase data volatility, something that can be compensated by for instance averaging (e.g., the sliding window of 12 months we apply). But biases can change trends, and that's is quite crucial.

Your point is that maybe what is called diesel has changed along JODI series, something that I am not absolutely aware of, and in fact such a "sudden removal" of diesel from that category should result in an increase the other middle distillates, the "Other fuel oil" category, which is not the case. Besides, removal as such typically shows up as steps in the graph, something that is not observed either. So such hypothesis seems to me very unlikely.

Coping with noisy data with unknown uncertainties is something physicists are used to do, because this is our bread and butter (data from the real world are always noisy and uncertain).

So let me tell you what I propose to solve this issue:

I'm a specialist in a technique called "Triple Collocation" that allows an intrinsic characterization of errors and biases of three sets of different measurements of the same physical quantity. Therefore, abusing of your kindness, if you could provide me different data series of data of what you could name "diesel" or "medium distillates" or whatever you feel more confident of (or even better, all of them!), from different data providers you trust the most (EIA, IEA, BP, whatever) and I will include the data from JODI and make all possible triples (if we have EIA, IEA, BP and JODI we have 4 possible triplets), I can estimate the calibration factors, biases and standard deviations of the random errors for each triplet, then compare the 4 possibilities to see if the results are consistent.

This exercise could be very informative for all us and provide a better insight about where we actually are right now.


Regards,

Antonio

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. Saying that it proves that the hackers were Russian follows the same logic as saying that, since Jesus Christ was born in a stable, then he had to be a horse. And, of course, these smart Russian hackers were nevertheless 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 Kropotkin" who has strictly nothing to do with 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 fill the space with whatever they could find. I can imagine that they reasoned in terms of something like "he's from Tomsk, he says something about climate, so he will do." 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 still learn something from it just because almost ten years have passed from its first appearance in the memesphere and we can see it in perspective.

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 a source of fake news (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 out 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 the reverse, I am not sure) apparently believing that two fake news could be more believable if they confirm each other.

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.     

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)