Category Archives: Current Events

Fox Investigates Chem Labs

Good God.  Fox News in Philly is now investigating university chemistry labs for “high risk” chemicals.  The shabby quality of this piece is beyond words. The entire thrust is this- Chemicals as bomb raw materials. An invitation to walk right in and grab all the corrosives and explosives you can.

Note the law enforcement images alluding to sinister threats and the fear mongering.  It’s what these people do. Manufacturing consent.

What a Key Supply-Sider Says Now

Here is a link to an interesting interview of Bruce Bartlett, one of Jack Kemp’s architects of supply side economics. Certainly no liberal, Bartlett has many insider views on current republican intentions on taxation and the deconstruction of federal government.

If certain politicians and their backers aren’t more careful, their plan to deconstruct government by intentionally bankrupting it and reconstructing American society is going to precipitate civil unrest unlike anything seen before in this country. These people are playing a very dangerous game capable of outcomes well beyond their control.

Respecting liquid hydrocarbons as a natural wonder

I just had a conversation with a colleague who is somewhat mainstream in his/her thinking. The question came up as to why can’t we be energy independent.  What is taking so long with the electric cars and natural gas powered … everything? When can we break away from middle eastern petroleum?

In the public sphere, all I hear are the questioners seeking reassurance that there are energy forms out there that will allow us to maintain our current level of consumption. They rarely put it exactly that way, but that is the heart of the issue.

I think multiple generations of people have failed to appreciate the natural wonder of liquid hydrocarbons. The C7-C10 fractions of petroleum, whether directly from the ground or from a cat cracker or reformer, are the motive basis for most of our ground transportation. These liquid hydrocarbons are of a reasonably low vapor pressure and high enough boiling point to allow their use in everything from go-carts and lawn mowers to automobiles and caterpillars.  Teenagers and grandmothers can pump hydrocarbons into an inexpensive and simple tank for use at ambient pressure and temperature. This liquid has a melting point low enough to make it flowable under nearly all earthly conditions.

The high energy density and the liquid state of gasoline is what makes it nearly perfect for propulsion. The energy density of gasoline is 34.8 mega-Joules per liter (MJ/L), as opposed to 21.2 MJ/L for ethanol.

Yeah, gasoline is cheaper per liter than the bottled water inside the convenience store. That perversion is just a temporary historical aberration. This will change.

Cosmically, hydrocarbons in the C7-C10 range suitable for automotive use are quite scarce in the local stellar neighborhood.  Some small hydrocarbon molecules like methane have been spotted in the gas giant planets and on Titan. But for the most part, the only supply of hydrocarbons we have are found in porous deposits below the surface of the only place we can get to- Earth.

We should appreciate our hydrocarbon resources for the true natural wonder that it is and be a bit more reluctant to squander it.  I doubt we’ll ever find a source of energy that is as cheap and convenient to use with such a high energy density.  Battery technology may get close, but innovation there is a highly specialized art that is beyond the scope of most shade tree mechanics. Common lead acid batteries require material and energy inputs, like everything else, and have somewhat low energy density and a high weight penalty.

Lithium batteries, with their higher energy density require a variety of manufactured and relatively exotic substances. And, they require lithium which is fairly scarce, both cosmically and on earth. We really should be recycling lithium scrap.  Seriously, we need to have great respect and appreciation for lithium as well. There really isn’t enough lithium to support everyone’s high energy density lifestyle.

Pinch Predicted in the Uranium Market

According to an article in Mineweb, the remaining cold war era uranium will be consumed in the next few years, leaving the nuclear industry with inadequate supply streams from mining.  Thomas Drolet of Drolet & Associates Energy Services, said that in 2010 mining produced 118 million pounds of uranium against a demand of 190 million pounds. Obviously, the balance was made up from decomissioned nuclear weapons stockpiles. The article did not say whether the numbers represented lbs of U or of U3O8. The oxide is commonly cited in relation to uranium mine production.

Drolet suggests that Japan will have to restart ca 30 of its 50 or so reactors in order to meet power demand.

It is my sense that the Fukushima disaster will not be the stake in the heart of nuclear power. The location of the Fukushima plant and a list of easily identifiable design features allowed the initiation and propagation of the incident. While the future of reactor operation in Japan may be stunted, most reactors elsewhere in the world are not located in tsunami flood zones. Regrettably, some are located in fault zones. But the insatiable demand for kilowatt hours will override everything. Commercial fission will continue into the indefinite future.

Keep China busy- buy an iPhone.

Thanks to Bill in Michigan for the link on how the US lost out on manufacturing the iPhone. The article is well worth the read. A few of us have been beating this drum for a while. Economics is not a theory of physics. It is entirely about choices people make. But to some, economics has become a mathematical and philosophical validation of greed and a metric of mortal value.

Interestingly, Robert Reich has a parallel and broader editorial on the same general topic.  Reich points out that US corporations are becoming increasingly globalized with “less and less stake in America.”

Reich quotes an Apple executive –

‘An Apple executive says “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing a big enough profits to continually increase our share price.”’

Reich goes on to say that US business investment in R&D is in general decline but…

“… According to the NSF, American firms nearly doubled their R&D investment in Asia over these years, to over $7.5 billion.

GE recently announced a $500 million expansion of its R&D facilities in China. The firm has already invested $2 billion.”

If you read history and understand something of how the industrial revolution has been the deus ex machina of social revolution since the invention of smelting, then unavoidably you must ask what happens if we change the sign of the revolution?  Does the sign of social revolution become negative as well in a nation of negative- or de-industrialization? What happens in a nation when a minority of shareholders absorb value from the stakeholders via tranplantation of the economic engine to another nation? What happens to society when the population grows but the per capita availability of jobs is in decline?  A trip to the Congo or to Gaza might give some useful hints.

Deindustrialization is not nearly the sole culprit. Automation is much to blame for the obsolescence of job descriptions. Automation actually facilitates the export of jobs because the key expertise may be in the design of automated equipment, not its operation.

What made America “great” was not simply its freedom. There was a substantial contribution from a vast continent pregnant with animal, vegetable and mineral resources for the taking. The early allotment of land and mineral resources by the government to settlers, railroads, and mine operators kick started the American economic engine in the mid 19th century.

I am uncomfortable with this strident American exceptionalism viewpoint. Maybe it is the midwesterner in me, but I would prefer to see Americans roll up their sleeves and get busy making things again. Leave the boastful and prideful stuff for the comics. A little more humility and thoughtfulness will get us further and in better condition.

Anti-SOPA Solidarity

In solidarity with yesterdays protest against internet censorship, my porch light remained dark last night. What is normally a shining beacon of hope in the neighborhood was last night a mute and dark void.  This pocket of frigid darkness sat in silent protest to those who would presume to stunt the billion webbed neurons of this nearly-sentient being we refer to as The Internets. So it was and so it shall be.

Thus spake Th’ Gaussling.

Devon Energy Sells Stakes to SINOPEC in Shale Gas Plays

Devon Energy has raised $900 million in cash from Sinopec Group for a stake in Devon shale gas plays. These gas projects include the Utica, Niobrara, and Tuscaloosa formations. 

What is interesting is not so much that China has bought its way into the extraction of a resource that the USA has in some abundance. What is more troubling is that China has bought its way up the learning curve in horizontal drilling and fracturing. 

According to the article in Bloomburg Businessweek-

China National Petroleum Corp., Sinopec Group and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale reserves, estimated to be larger than those in the U.S.

“In these joint ventures, the partner does typically get some education on drilling,” Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets, said today in an interview.

So, the business wizards at Devon in OKC have arranged to sell their drilling magic to the Sinopec for a short term gain on drilling activity. Way to go folks. Gas in the ground is money in the bank. These geniuses have arranged to suck non-renewable energy out of the ground as fast as possible.  Once again US technology (IP, which is national treasure) is piped across the Pacific to people who will eventually use it to beat us in the market.  Score another triumph for our business leaders!!

The market is like a stomach. It has no brain. It only knows that it wants MORE.    Th’ Gaussling.

 It’s a banner day for American Business.

Locust Capitalism- The Frass Machine.

Here is a great catch phrase- Locust Capitalism. The article by David Waldman, describing the past business practices of one of our corporate persons, Bain Capital, uses this catchy phrase to characterize said corporate person. Of course, the irony of it all is plastered on the face of biological person Willard “Mitt” Romney who makes a show of being a job creator.

There is something that locusts do create- it is called frass.

I do not doubt Romney’s sincerity when he speaks. Like other candidates, he seems to live in the “eternal now” much like a dog. He wags his tail at the public hoping to curry favor for the treat of being president. If wagging his tail doesn’t work, he rolls over and puts up a paw hoping to win over the public. It is in the nature of these creatures to do this and while we cannot hold them blameless for their transgressions, we can at least understand them.

People who are able to think about business in an abstract way, that is, unencumbered by sloppy sentimentality for the fate of individuals, are well suited to become the captains and oligarchs of business. Romney seems to have been a captain. If the practices described by Waldman did in fact happen, then the locust analogy is very suitable and it says a lot about the character of the persons involved.

Waldman writes that Romney and cohorts bought companies holding ample commercial credit, charged them substantial management fees, and tapped out the credit lines while pocketing operating cash, driving the company into bankruptcy. They walk away from the remaining husk of what was a functioning organization with their neatly stacked pile of lucre.

If a real person did this, he/she might be described as a kind of sociopath. But somehow in the context of business there is no descriptor for such antisocial behavior.

Since we are now in the habit of referring to corporate personhood, perhaps we need to be a bit more analytical about it and characterize pathological behavior such as this.

Thorium and Rare Earths. A Possible Market Synergy.

If one studies the economic geology of Rare Earth Elements (REE), it becomes clear that REE’s are frequently (usually?) found in deposits rich in other elements.  Deposits of zirconium, tantalum and niobium, for instance, are frequently co-located with REE’s.

The REE’s are found in ore bodies that are naturally enriched in either heavies (yttric or HREE’s) or lights, (ceric or LREE’s). The LREE’s seem to be the most common spread of the REE’s.  Molycorp’s Mountain Pass bastnasite deposit is a good example of this.

What is not so widely known is that thorium and/or uranium are nearly always found in these deposits.  This might be regarded as a good thing except that companies in the REE business seem to be less interested in actinides than lanthanides. The actinide business is fraught with complications related to the natural radioactivity of Th and U. If one is interested in rare metal production, the matter of radioactivity is unwelcome.

However, there is opportunity here if certain institutional thinking is allowed to expand. I refer to the global preference for uranium and plutonium in the nuclear fuel cycle. Nearly the entire world’s nuclear materials infrastructure was directed to the production of yellowcake and separation of U235 from U238 post WWII. While there has been some experimentation with thorium 232 in the US, and there are some limited initiatives in motion, it has been largely neglected in reactor design and the fuel cycle in favor of uranium and plutonium.

Rare earth element mining and processing naturally produces thorium and uranium. At present, those practicing REE extractive metallurgy have every incentive to avoid concentrating the actinide components owing to the radioactivity. However, if there were a coherent program for the development of an efficient thorium fuel program, this natural resource could be efficiently taken from the REE product streams now or in the future.

Our reliance on energy will trend substantially towards electricity. The greater absolute abundance of Th over U, as well as the ability to use 100 % of the predominant isotope makes thorium a good candidate for energy exploitation. The recent boom in REE exploration has uncovered new sources of thorium. The nuclear genie was let out of the bottle nearly 70 years ago. By now we should be a little smarter about how we use it.

After the Blockade

So here is a short timeline of events that will unfold after the Iranians block the Strait of Hormuz. Beginning 48 hours after the blockade starts, at around 3:00 AM, RF jamming will begin and a US Navy man-of-war somewhere over the horizon will launch a barrage of cruise missiles at Iranian surface ships in the Straits. From an undisclosed location, a US nuclear submarine will launch more cruise missiles and a hunter-killer sub will close in on any Iranian subs that may be in the vicinity.

USAF strike force assets will be overhead and will provide electronic counter-measures, signal intelligence, and aerial reconn.

Thirty seconds before the cruise missiles arrive at their targets, the muffled slapping sound of 2000 sphincters slamming shut will be heard as Iranian seamen realize what is about to happen when the angry, armor piercing, high explosive warheads arrive. The reality of a torrent of supersonic incandescent pressurized gas, slurried with molten metal, penetrating the hull into inhabited space is too awful to contemplate.

The president will be given the choice of bombarding Iranian naval bases, but he will wisely decline.

By 9 AM, the remaining Iranian naval combatant will be disabled and listing.  Many men are in the oily water, more than a few of them corpses floating in the flooded interior spaces of their sunken vessels.

Anderson Cooper’s plane is wheels-up by noon Iran time, but the thing is over. US men-of-war steam toward the kill zone looking for survivors. The descendents of Xerxes and Rumi have been in the streets of Tehran since 7 am slapping their foreheads and shaking their fists. But who are they really mad at? The US or their government?

In reality, I don’t think this scenario will unfold. The US will gather a show of force and intimidate the Iranians to stand down. Individual Iranian ships making aggressive moves will be delt with swiftly, though.