Monthly Archives: February 2008

Open Letter to Congress. The Question of Authorship.

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Dear Honorable Members of the US House and Senate,

I write to you in an effort to bring a measure of clarity to the legislation that is drafted and voted upon by both houses of the congress. The matter I wish to address is the matter of authorship of the actual text of bills sponsored by members of the House and Senate.  In the interest of transparency, it seems reasonable for citizens to know exactly who deserves credit for the intellectual content, or the ideas and the language, that is put into law.  We know that the actual legislator is far too busy to do the wordsmithing and idea crafting that goes into the drafting of a bill. In that vein, I believe that the citizens or groups who actually craft the document deserve some credit for the work.

Consider for example, HR 5695.  The header of the document lists all of the sponsors of the bill.

HR 5695 IH

109th CONGRESS2d SessionH. R. 5695

To amend the Homeland Security Act of 2002 to provide for the regulation of certain chemical facilities, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

June 28, 2006

Mr. DANIEL E. LUNGREN of California (for himself, Mr. THOMPSON of Mississippi, Mr. SHAYS, Ms. LORETTA SANCHEZ of California, Mr. LINDER, Ms. HARMAN, Mr. MCCAUL of Texas, Ms. JACKSON-LEE of Texas, Mr. SIMMONS, Mrs. CHRISTENSEN, and Mr. FOSSELLA) introduced the following bill; which was referred to the Committee on Homeland Security, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

But the actual owner of the concepts, the crafter of the ideas is at present unknown. It is hard to believe that the Honorable Representative Lungren spent countless hours in the library of congress researching this bill. How much supervision is given and how close does the language represent the will of the constituents? Somehow, the person or persons who drafted the bill are accorded anonymity in their composition of a bill that affects the entire country.

I believe that the persons and the organizations who draft documents which become public laws should be given some kind of co-authorship or citation. In fact, it should be manditory that they be given co-authorship. Ideas good or bad that wind their way into public law should be traceable to the Author. How else can we find out what they were thinking? Could it be true that major pieces of legislation are being imposed on the people of the United States under the pen of ghostwriters? Who are these ghostwriters?

Kindest regards,

Th’ Gaussling (pseudonym, just for irony)

Economic Katrina

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I’m reluctant to sound alarmed, but with the apparent shape of an impending economic Katrina moving over North America, it is getting harder to grant the benefit of the doubt. The dollar is sinking, exposing this import-heavy nation of ours to price increases in nearly every sector. The petroleum resources that energize global production and grease all economic skids is generating considerable doubt and turmoil in financial circles.

Oil production is flat in many key regions but the demand for consumer goods by the global middle class is expanding.  Our television-enchanted population, brains scrambled to numbness by chronic exposure to American Idol, are seeing only what the media powerbrokers want us to see. The eternal message that comes from TV is spend, spend, spend. 

The popular economic indicator is the stock market. The DJIA up- good. The DJIA down- bad. It is a sort of pallative. We’re lulled into a false comfort zone by the meta-stability of todays stockmarket.  Other dots are beginning to line up into a harmonic convergence, however.

Yesterday, as a humorous conversation starter, I asked a senior colleague well placed in the petroleum industry this question- “when will crude oil hit $150/bbl?”.  His reply surprised me. He estimated that it would happen this summer. Later, tempering his answer somewhat, he suggested that it would be more like $130/bbl, and mostly on the strength of nervousness in the market. He added that at present, crude oil stocks in the USA were in ample supply. 

The extended weakness in the dollar seems to favor American exporters and disfavors import consumers. Hmmm.  Does gov’t inaction on the weakness of the dollar amount to bias for corporate constituents and neglect of unincorporated citizens? Curious.

Advice- payoff as much debt as possible. Insulate your house. Get rid of that gas guzzler. Accumulate greater savings. A lot of the soon-to-be-unemployed are going to face higher higher gasoline prices for their commute to the new job at the auto salvage yard. And when they get back to their trailer at night, the thermostat will be set low due to higher heating costs. Beans and weenies, Mac-n-Cheese. Bon apetite!

Political Analysis Paralysis

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The election season is far too long. Every minute of this tedious pageant is filled with relentless microanalysis of the latest minutiae. No nuance is too small for the CNN impresario Wolf Blitzer or the goon squad at Fox News to dwell in an endless vortex of speculation and rhetorical webspinning.

Fox News in particular is incredibly brazen in its rightwing bent. Most hotels in which I have stayed recently favor this news source with a prominent spot on the channel selection. The pretense of neutrality is long gone. They are the Republican Broadcasting Network and have the same saccharin evangelical flavor as Pat Robertsons cable freakshow.  What liberal media? Hollywood? Please. Hollywood is just another kind of freakshow with better costumes.

I can see how countries devolve into unstable conditions where deep ideological differences disrupt the peace and lead to open conflict. I’d be in favor of secession of a few states if these rightwing boneheads wanted their own country. Just keep an eye on the nukes. There is deep frustration in this country and the only thing keeping angry mobs off the streets is relative prosperity.

Republican control is only paper thin. After the ’08 election, Democrat control will only be paper thin. The only thing that has happened in the Clinton and Bush II epochs is that both conservatives and liberals have become more articulate in their opposing positions.

Now I’m microanalyzing. It’s like a disease.

Polyolefin Migration

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The worlds burgeoning middle class has a voracious appetite for polymers and this has compelled other regions of the world to execute a refining and manufacturing buildup that will cause an upcoming oversupply situation. In particular, Middle Eastern and Asian PE and PP capacity will take a sharp upturn, shifting supply patterns and causing margins to fall. Demand for North American (NAm) polyolefin (PO) products will enter what is projected to be a permanent decline as capacity and market share shifts to other longitudes.

Fortunately for US interests, many PO producers have anticipated this and have diversified through significant structural changes increasing access to the far regions of the world. This fact alone should buffer the upcoming downturn in the industry. Projections I have seen suggest that the NAm PO market should be back up to present levels by 2012 as the new capacity operates as price taker rather than a price maker. Eventually for NAm and the EU, finished goods imports will overtake market growth and a period of decline will ensue.

The new world I am describing is projected to happen in 2009. We are about to feel the gravitational pull of the “New Gulf”. The Old Gulf- Gulf of Mexico- will take a back seat to the Gulf in the Middle East.

One weakness of the New Gulf seems to be ethylene. US capacity for the extraction of ethane from natural gas and its conversion to ethylene is an advantage that will buoy NAm PE business for a while. But once Middle East and Asian operators learn to run their plants efficiently, NAm facilities will face the somber truth of the marketplace. NAm will become a net importer of PO’s. 

Asian demand for PO’s is growing so rapidly that it may never become a net exporter of PP and PE.

One factor that I do not understand yet is the effect on petroleum supplies and the cost pressures therein. Increased capacity giving lower prices could increase petroleum and gas scarcity resulting in increased prices of petro-energy.

A.I. Meyers Memorial Ceremony

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Friday, 22 February, 2008, CSU held a memorial ceremony in honor of Albert Irving Meyers. Past and present chairmen of the Chemistry Department spoke of their recollections of Al Meyers, the man. Al’s family was present and son Hal Meyers spoke in memory of his father. It was a heartfelt and touching ceremony that ended with a photo montage of Al’s life.

Turnout by former group members was fairly light, but most alumni had considerable distances to travel so this isn’t surprising. I was aware of 6 members in attendance. Former chairman Rod Skogerboe was present. Rod was injured and paralyzed shortly after his retirement. He was in good spirits and spoke well of Al.

I am always interested to hear the way people reflect on their post graduate education. People leave the grad school experience with many kinds of feelings about it. Some are positive and some are negative. Some feel self-actualized and others feel injured.  I think that no matter how you feel about AIM and the other “rock stars” who head the chemical academy, you have to admit that AIM had an abundance of charismatic ability in a field of outspoken characters. Al used the strength of his research productivity along with his “gift of gab” to pursuade the department and the university to excel in chemistry.

The academy produces people who go on to become the parish priests, bishops, and the occasional cardinals of chemistry. It is interesting to meet friends who have gone on to become the directors and VP’s of the field. In my experience, the people who have the most buoyancy are the ones who have an upbeat, can-do attitude and can find a way to get things done. The kind of work/quality ethic that Al expected from his crew really is beneficial to those who don this particular suit. You can see it now in the career trajectories of the many alumni out in the world.

Lunar Eclipse 2008

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The eclipsed moon finally made itself visible only minutes from totality this evening. Through the gauzy haze the lopsided apparition loomed in the eastern sky. We pointed the 18 ” telescope at it, but with its narrow field of view we could only gaze at part of the moon at a time. With the haze and the low contrast, only washed out moonscape was visible. An eclipsed moon is best witnessed with the naked eye or from binoculars.

We found Mars and Saturn in open patches of the sky. Saturn was sharper than I’ve seen it in while. The rings and planet in sharp relief against the black velvet background. Titan and a few other moons were to be seen as well. 

A line of visitors queue around the dome and down the stairs to see the planets and M42, the Great Nebula of Orion.  We’re lucky this evening. The clouds parted and the wondrous sky was made visible.

IBM, Thy Patent Portfolio Runneth Over

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IBM people are prodigous inventors. In 2007 alone, IBM was allowed 3,125 US patents. In the period from 1993 through 2007, IBM has acquired 38,707 US patents.  I can visualize the torrents of office actions flooding out of some pipe from the USPTO into the mailroom at IBM Galactic Headquarters.

Imagine trying to enforce this collection of patents. Crimony! With this many patents- and who knows how few are abandoned- IBM must be involved in litigation almost continuously. Imagine the legions of confident, white-shirted IBM attorneys marching in lockstep, “Think!” banners streaming in the breeze!  It would be fascinating to see how they make these patents actually result in cash flow. Who knows, IBM may have the biggest patent picket fence in the universe?!

Changing Petrochemical Center of Mass

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The Middle East (ME) is currently undergoing a dramatic change in petrochemical supply and refining capacity. Multiple projects in several countries are underway that will offer greater capacity of key hydrocarbon feedstocks as well as fuels. 

The current run up in crude oil prices has produced an abundance of cash for oil producing states in the ME.  Acutely aware of the transient nature of their oil reserves, the cash generated has been applied to infrastructure. Social infrastructure as well as industrial infrastructure has been expanded in the ME with facility no doubt eased by the nationalized nature of the petroleum companies. 

In the USA, a run up in crude oil prices has not resulted in a major uptick in refinery capacity, port expansion, or the birth of new universities. Instead, US oil companies have plowed investment into new discovery activity in an attempt to sustain the current rates of consumption. Profits are channeled into CEO salary packages and to shareholders, who, in turn, go to great lengths to shelter their funds from taxes that support US infrastructure.

Saudi crackers alone are expected to add 14m tonnes/year of extra ethylene capacity by 2015. ME market share of PE and PP is expected to double by 2011. So large will the demand for ethane be that there is considerable skepticism that the full potential of the buildup will be realized.

Since ethylene comes from the cracking of ethane, and presently a large share of ethane comes from natural gas, the question arises as to the effect on natural gas prices as ethane scarcity becomes apparent.  Naphtha crackers are part of the answer to the question of supply. The US has (had) abundant natural gas and a corresponding reliance on the extraction and cracking of ethane from this resource. Elsewhere in the world, a large fraction of ethylene comes from naphtha feedstocks.

And so it is that the Saudis are building crackers to bolster their feedstock supplies. The Dow/Siam Cement JV is also addressing their ethylene supply issue with a second naphtha cracker in Map Ta Phut (ICIS, 2007, December 3-16, p 6).

The largest petrochemical complex in the world is under construction at Ras Tanura in the eastern province of Saudi Arabia.  This US$20 Bn project is being developed jointly by Dow and Saudi Aramco and is expected to come onstream in 2012. The goal is to integrate the existing Ras Tanura and Yanbu refineries into a single operation offering petroleum refining and production of value added hydrocarbons like ethylene.  Clearly, the principals have downstream conversion in mind. The project will have the first naphtha cracker in the ME and will offer ethylene cracking and aromatics capacity as well.

According to the article in ICIS, Basell claims that the ME will be the only net PE and PP exporting region by 2011.  And so it was that the petroleum scare in the first decade of the 2000’s financed and expedited the migration of dominance in the polyolefin industry to the Middle East.

Eviction Action on CNN

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On CNN this morning I happened to see a story on mortgage defaults in the Atlanta area. As the reporter spoke of the 7,000 evictions scheduled for February in Atlanta, we watched two police officers enter a house with service revolvers drawn.

No doubt there is a backstory to this particular event. All states have extensive statutes covering the resolution of landlord/tenant disputes. The statutes governing lender/mortgagee disputes is certainly full of delays in consideration of due process as well. So, the scene of the State storming into a home- through the agency of the police- is at the end of a procedural chain of events leading to forcible eviction.

But you have to ask the question- Is this heavy handed treatment of mortgagees necessary?  Are the police storming into homes with firearms drawn routinely? Maybe the mortgage lenders should be forced to go into the home and do it themselves? Maybe we should herd a pack of mortgage brokers door-to-door to do the dirty work.  This includes the industry finance geniuses and their pencil-necked B-School professors .

Evicting deadbeats is one thing.  I have done this distasteful job myself sometime back when I was stupid enough to have a rental property. It’s disturbing and ugly at the very best. But to have this finance fiasco end in such a way is a disgrace and the ethical-midgets and business cretins who devised and executed this negligent finance scheme need to see, taste, and smell the trouble they initiated. They should be dragged out of their office suites, tarred and feathered, and run out of the business community, or at least tatooed with a big red I for Imbecile on their foreheads and banned from finance for life. 

The borrowers who signed their names to such instruments should be forced to take a remedial math class where they must demonstrate a knowledge of compound interest. Exponents, people! Exponents!