The BBC, Brits and Hosepipe Restrictions

There has been a minor row over the water usage restriction put in place by Thameswater and other water utilities in the southeast of England. England is in it's worst drought in over 100 years as the winter rains have been virtually non-existant. Believe it or not, there are some parts of Kent, the county between London and the easter side of the Engish channel, that get less rain than certain places in the Middle East. I was watching the BBC the other night and a reporter was interviewing people about the hosepipe restrictions (you can't use a hose) and they showed three of these interviews. The first I don't remember. The second man was upset over the restrictions because he didn't understand where all the water was going. I thought maybe this person believes that he and the rest of southeast England (read: most dense area) don't put a strain on water resources. Quite trivial by itself, but the third woman interviewed was exasperated because she would no longer be able to wash her car. "What do they expect us to do?!?!" she exclaimed. God forbid someone have dirt on their car.

This has become a common observation of mine: Brits and Aussies are terrible at energy conservation. Everything in London has poor insulation. The mindset is that when a space is too hot, open the window to let winter weather in, there is no reason to turn down the heat. In the morning when people go out to their cars and discover a thin layer of frost covering the windshield; rather than scrape it off, they pour a boiling kettle of water over it. Buy a bloody ice scraper! People in the US get a bad wrap for using loads of energy, but at least when it comes to home heating we (people in Minnesota) use it efficiently and understand that cold weather means higher prices. Those who hail from the southern hemisphere generally fail to grasp this concept.

Happy St Patrick's Day!

Well, I just had a nice post about Friday night that will now be reduced to one sentence because of stupid wireless connections. I went to 5 pubs, stole the guinness pint glasses at the first and emptied the remnants out on the floor of the second because they charged me too much for alcohol, saw my friends, ate a delicious tortellini dinner and went to bed late.

Saturday I bounced out of bed at 10 to 7 and made my way to Notting Hill where my friend Sarah smuggled me aboard a bus bound for Stratford-upon-Avon and Warwick castle. I had originally planned to head up to Stratford at the end of April for the weekend, but now that I had the chance to get up there for free I jumped at it. Wouldn't have to pay for rail costs, hostel, entrance fees, several meals, etc. I probably saved 50 or 60 quid and only had to pay for lunch and snacks. What a deal! After visiting Startford, I was also quite happy I went today because I would have had a hard time spending a day in Startford and a half day at the castle, and transportation logistics would resemble a nightmare as that part of England is off the main line rail services. And I just freed up a weekend for myself at the end of April so it all worked out quite well. Warwick was quite nice with splendid views of the country side, but the hour and a half we had there was not quite enough. The castle itself is still inhabited, yet keeps its medieval feel to it. It was started as a moat and bailey about a millenia ago, and the very old parts of the castle still exist. Pretty sweet. Stratford was OK, perhaps the cold and very windy conditions put me off a bit, though there were some nice streets, buildings, theatres and walking paths along the avon and the London-Birmingham canal. The thing with Stratford is that the entire city seems to be centred around Shakespear, whom I find enjoyable in small doses, but not in the size of an entire town. Just to get into the Shakespear centre and his house cost 7 quid. I didn't go in, but it took the others about 25 minutes to go through it. I had some decent fish and chips so that always makes any situation better.

I just watched a CNN special about the future of the world if we take various paths down the road of energy independence. This is reaching Brits at 11PM on a Saturday night, but is it reaching the US? They showed clips of the congressional hearings and testimony of the oil execs and I became well pissed off (see my previous post) over the audacity of their words. I am pretty much frustrated over the whole situation, and the way CNN reports it makes it seems so black and white, but in reality is nothing like that. Example: Brasil is close to declaring "energy independence" because of its massive sugar cane ethanol program. 40% of transport fuel comes from sugar, and in the next 10 years, almost all of it will (compare this with 3% of US fuel that comes from corn-ethanol). CNN implied that these refineries were "sustainable." The fibre from the cane fueled the plant, now all that is needed is is fuel for the trucks, harvestors and other vehicles. It seems all well and good and CNN asked why the US hadn't emulated the Brasilian system. As I understand it there is a significant energy conversion between sugar cane and corn. Also, Brasil is as large as, if not larger than the US, with a smaller population that consumes fewer gallons of fuel will have a less difficult time supplying their own biofuel. I say "less than" because I am sure there will be competition for land use, but not on the scale there would be if a Brasilian biofuel economy were directly placed into the US. Another mantra: there is no replacement that is as powerful, as readily avaiable and as abundant in source as gasoline.

So it seems my posts are becoming more and more combined. I am thinking I should split my blog into 2: one political/financial/energy and the other about my observations and life in London and potentially elsewhere in the world. This could be too time consuming though, so for now I will keep them as one.

It's caught up to me

Excessive touching and grabbing of public transport hand rails, cold weather and cold season in general, combined with a weekend of little sleep, alcohol and one too many fry-ups has caught up with me: I feel like crap and have a cold. Time to recooperate.

In regards to my post below on oil and energy problems, wholesale gas prices in Britain quadrupled in one day yesterday. Britain is also having its worst drought in the last 100 years and water restrictions have just gone into place for all Thameswater (London) users.

Alright Nicole, here it is.

My response to this article

CNN has always written articles and given newscasts to its viewers as though they are speaking to a group of morons. This is done in both subtle and obvious ways. Subtle by showing a British MP speaking in front of the houses of Parliament and big Ben, two of what are easily the most recognisable symbols of London/England and on the bottom left corner of the screen it tells me this person is in London, United Kingdom. Well ya know, if that weren’t there I’d think the person speaking into the Camera might be in London, Kentucky. OK, maybe this is necessary when I see people in the US identifying Canada and Australia as Iraq, but I really hope that is a small fraction of the population. I digress. In a recent and more obvious way the financial and economic editors and contributors to the CNNMoney section have warned against an energy independent US.

The first thing that needs to be done is to define an “energy independent US.” Does it mean that the country does not rely on Middle East oil to keep energy costs low? Does it mean that the US relies solely on itself and its own natural resources as a supply of energy? I know of a few who take the idea of energy independence much further where the US uses zero fossil fuels and is kept running on alternative and non polluting sources of energy. I do not believe that we will ever achieve this sort of zero-oil-consumption nation, or world even. No matter how noble a goal, one cannot convince 300 million people to stop using fossil fuels, even though humans lived for thousands of years where they did not burn oil, coal, gas, etc. We are now at a fork in the road: we can start moving toward some notion of energy independence, be it conservation and alternative sources or we can pump and use as much as is possible. What I take from this article is that we should continue to pump and consume at current levels because this is the cheapest option: “Why sentence ourselves to more expensive energy?”

This article is correct on several fronts. It is cheaper to pump oil out of the Middle East than it is to create and develop new sources of alternative energy. What the writer doesn’t realise is that this is its major flaw. When advocating for reliance on continued drilling and extracting in Arabia, I can only suspect that the writer is assuming that Arabian oil production will either at least remain constant if not gradually increase to make up for declines in production from the rest of the world (and I do know the author is knowledgeable of Peak Oil). In his book “Twilight in the Desert” Matthew Simmons describes a phenomenon called rate sensitivity. Without trying to get into too much technical babble, what happens is that if you extract oil out of a well at extremely high rates, as is currently being done, the field becomes damaged and future oil production declines much faster than if a field were properly managed. There is evidence of this around the world, and has just happened in Kuwait last year. Simply put, the Middle East will have a difficult time matching supply with new demand and possibly even current world demand.

Fox is also right with the idea the energy independence from the Middle East, or further, dependence on only US reserves, would be disastrous for the national economy. The US pumps out less than half of what it uses in any given day. At present we simply don’t have the ability supply our own energy needs whereas in the past we did. There are two things that happen: one is that the national economy pretty much freezes. Prices for all energy sources will skyrocket (and never mind oil at 250/bbrl) and our national reserves will be drained. It is possible that the latter may not be able to happen if the former does, but it wouldn’t matter at that point. Another point on lessening Middle East dependence: we do not have friendly countries to fall back on as we did in the 70’s and 80’s with the North Sea oil bonanza. The small amounts of new discoveries have been made in areas of the world that are not the friendliest of places to the US, and will be in direct competition with Chinese demand.

In my opinion, the most important reason to move toward “energy independence” is to hedge against risk and volatile price fluctuations via an oil shock. The world will soon reach a point in the next 2-5 years where global demand surpasses global supply: Peak Oil. When this happens price will go up or demand will have to drop. We have seen over and over again that oil is so incredibly inelastic the price will fluctuate much more than demand (there will obviously be people that conserve, but most will continue to go on consuming and “paying the price”).Peak oil is not the only reason to want this risk/price hedge. Just last week, Saudi Arabian authorities foiled an Al-Qaida plan to blow up one of the largest refineries in the world at Abqaiq, a stalwart of Saudi oil production. Had this succeeded or if Muslim extremists (different extremists than the Wahabi’s) gain control of Saudi Arabia and shut off 10% of the worlds oil supply, oil prices will climb worldwide. During New Year’s, Russia shut off all gas exports to Europe and Eastern Europe experienced a 40% drop in reserves. A number of years ago when Venezuelan oil workers went on strike, gas prices in the US went up, and Venezuela at the time supplied some small fraction (around 1%) of gas to the US. The point is that it doesn’t take much of a disruption, uncertainty or fear in the oil market to make oil prices jump all over the place (remember $6/gallon for petrol in the south after Katrina?). Placing a $250 tariff on oil will certainly ruin economic activity, but what about when $250/bbrl oil through completely private and capitalist markets ruin economic activity and there is no government intervention? As a country, we should not wait around for a replacement for oil. We need to immediately begin investing in alternatives to our beloved Arabian sweet crude. The more forms of power and energy the US has, the less severe will be an oil shock. Whether this actually comes from a peak oil situation, global conflict over energy, natural disasters et al doesn’t matter; risk is uncertainty, developing wind and hydro power will hedge risk and reduce and potential long term financial burdens we may have to bear.

Another way to look at it is like this: Let’s say that oil does become expensive (or even adjusts for inflation) and at that point we begin to develop alternatives ranging from ethanol plants, nuclear plants, biodiesel, wind farms, hydro stations, tidal power, solar panel manufacturing, oil shale extraction, et al. You name, we go for it. All of these industries are very energy intensive. You cannot build a wind farm or even manufacture a turbine without using a lot of oil/oil based fuel. Would it be in our interests financially to manufacture wind farms with oil at $60/bbrl, which is a real bargain, or when it is at $100-$200/bbrl? Develop sustainable energy alternatives now while it is still relatively cheap to do rather than wait around until the cost of electricity is the same for wind power than an oil or natural gas power plant. So in answer to the question “Why sacrifice ourselves to more expensive energy?” I answer because oil will soon be the alternative to today’s alternative energy and our economy, society and infrastructure only know how to use one thing: fossil fuels.

I suppose that to accept my logic as valid you would have to conclude for yourself that oil and other energy prices are going to rise in the future. To deny my conclusions is to say that the price of a finite resource will not go up as we continue to extract and use what will not be replenished. This is one of the only things that I really enjoy and have a passion to debate and discuss. Respond if you so feel.

Back to Canterbury

So one thing I forgot to mention in my previous post is highstreet shopping. Whilst Adam and I were walking up and down the highstreet one too many times (after a while we started avoiding the highstreet at all costs) we concluded that whether you are in London, Edinburgh or Canterbury, it's the same shit in a different place. Each city has the same highstreet stores: your Debenhams, Waterstones, Marks and Spencer, WHSmith, Boots, HMV, H&M and well the list goes on, but the only thing that changes is the scenery. In Edinburgh you walk along Princes street underneath the castle next to the gardens. In London you squirm through the hustle and bustle of massive sidewalks ( I think Oxford street gives more space to foot passengers than auto traffic) and looming stores. In Canterbury the stores are smaller, the crowds are just smaller than London and the stores are in what look like converted houses rather than London's enormous warehouse like buildings. All are most pleasant to look at, but is that the point of going out to purchase silly looking euro-fashion and sit inside the basement of a Starbucks drinking more caffeine than your body should probably take in? Sometimes I find it hard to reconcile, but then I just think of the endless miles of Stripmalls in the US: bland single-story buildings with monotonous and unchanging storefronts no matter whether it's a shoewarehouse or kitchen appliance store with several hectares of cars sprawled out on a desolate canvas of black where the only thing to direct you toward freedom are dashes of yellow paint here and there. And then I think, at that point, I'd much rather be standing infron of this starbucks than that one. Besides, at least here I am bound to hear 4 or 5 languages I've never heard before rather than trying to distinguish a Minneapolitan accent from a Fargoan one.

So there is no reason to come down from London to go shopping in Canterbury, or vice versa, unless you want bigger stores with more (diverse) people. I guess that sometimes it all just seems so fraudulent to create this nice looking place to engage in a spend-for-all and go home with 6 or 7 different bags under your arms and nothing left in your wallet only to realise you need to make space in your closet and home for everything you just bought. Maybe Europeans wouldn't come out in throngs if they had to shop in places like stripmalls but I think this is changing, and rather quickly at that. Oh. I better get back to work eh?