When Stalinists Collide

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There is a newly released movie called The Death of Stalin. It’s not really about Stalin or his death, but you should see it anyway. One reason is that it’s been banned in Russia; the other, much more important reason, is that it’s really good and really entertaining (in a really grim way).

Stalin does appear for a few minutes at the start of the film, where we see him as a drunken clod with a low sense of humor and a proclivity for intimidating and boring his colleagues. Like Hitler, he forces people to stay up all night watching B movies from Hollywood. Then he dies, and the real story begins, as the second and third bananas battle one another to capture his authority. The movie is about the difficult process of redistributing power in an ideological regime that has become a personal regime and is now becoming a regime of bureaucrats. First came the Idea (communism); then came the Man (Stalin); now we have the Men, the party hacks and the heads of this or that, who survived long enough to start asserting their own personalities. We get to see what those personalities are, once asserted, and to study their grisly and comic clashes.

First came the Idea (communism); then came the Man (Stalin); now we have the Men, the party hacks and the heads of this or that, who survived long enough to start asserting their own personalities.

The lead actors are remarkably skillful at entering their roles and projecting them. Simon Russell Beale, playing Lavrentiy Beria, head of the secret police, succeeds in making Beria seem what he was, one of the most repulsive figures of history. Jeffrey Tambor, playing Georgy Malenkov, Stalin’s presumed successor, presents Malenkov as a man who, if you don’t like Woodrow Wilson, looks and acts exactly the way you imagine Woodrow Wilson looked and acted. Jason Isaacs, playing Marshal Zhukov, conqueror of Berlin, demonstrates that absurdly over-the-top masculinity still has its dramatic interest. Steve Buscemi, the star of the show, plays Nikita Khrushchev as the smartest and most complicated and most interesting of them all.

This is stage-play politics, but it might actually have been politics in the stagy totalitarianism that was the Soviet Union. Some of the characterizations do seem questionable to me. Stalin was not the overt fool that we see in Adrian McLoughlin’s performance (which no doubt responded to Armando Iannucci’s direction). Vyacheslav Molotov (Michael Palin), doesn’t seem rigid and doctrinaire enough, nor as constantly devoted to his insanely doctrinaire wife as Molotov actually was. (Stalin sent Madame Molotov to the gulag, but this did nothing to reduce her devotion to him.) I don’t know whether Svetlana Stalin was the way Andrea Riseborough (and the script) portrays her — a goofy, spoiled, adult brat — but I would have enjoyed watching her performance for much longer than the movie’s run time.

Simon Russell Beale succeeds in making Beria seem what he was, one of the most repulsive figures of history.

And here’s something strange. If you deplore, as I do, the creepy foreign accents that non-English speakers are given in Anglophone movies, there’s none of that in this film — everyone speaks with some kind of British accent. Yet hearing Stalin speak like a working-class Brit was startling to me, and the other people’s speech was only slightly less startling. That’s probably because I’m an American, so it all seemed foreign to me — but in a strangely displaced way. Yet that’s what’s supposed to happen on stage, isn’t it — some kind of strange displacement? The strangeness makes you conscious that you are watching someone else’s conscious performance, a re-creation of human life in which your own imagination needs to be involved.

So, for many reasons: if this film has already left your theater, make a note to see it when it comes out on DVD and other means of presentation.

Finally, here’s a SPOILER. Look away if you’re not ready for it.

Khrushchev wins in the end.


Editor's Note: Review of "The Death of Stalin," directed by Armando Iannucci. Main Journey-Quad Productions, 2017, 107 minutes.



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OPEC Death Watch

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A number of recent articles suggest that OPEC — that kleptocratic cartel that has artificially jacked up oil prices for so many decades — is in its death throes.

The cause is something upon which I have long commented in these pages: the roaring renaissance of the American oil and natural gas industry, a renaissance produced by entrepreneurial capitalism — as opposed to interventionist statism. While the Department of Energy funded wind and solar power, along with biomass and ethanol production, all of which together have accounted for only a tiny sliver of American energy production, and that only with massive subsidies and draconian mandates — private enterprise backed the winners: oil and natural gas.

But the recent dramatic increase in production and exportation was occasioned by Speaker Paul Ryan’s success in enacting into law the right of American energy companies to export those resources. This allows frackers (and ordinary drillers) to increase production, because they now have an unlimited world market within which to sell their products.

There's a roaring renaissance in the American oil and natural gas industry, a renaissance produced by entrepreneurial capitalism — as opposed to interventionist statism.

And this is already happening, as several noteworthy articles report. One is a Bloomberg report that of all countries, no less than the United Arab Emirates (UAE) — the fourth largest oil exporter in OPEC — is buying oil from shale wells in Texas. It turns out that the Texas crude is much “sweeter” (lighter and of superior quality) and more useful to the UAE’s refining than the local brand. The 700,000 barrels of oil that it is buying are their first purchase from us.

Bloomberg notes that while American exports to the UAE are not projected to continue, the explosion of American oil exports will. Shipments from America rose from a mere 100,000 barrels per day (BPD) five years ago to 1.53 million BPD in November of last year.

Besides increasing American exports of oil, the fracking revolution has reduced non-American imports to below 3 million BPD, the lowest level since data were first gathered 45 years ago. Our current net imports are only one-fourth of what they were in 2006, and we are likely to become a net exporter in about a decade — sooner, if ANWR is finally tapped, and new offshore areas are opened up for drilling.

The 700,000 barrels of oil that the UAE is buying are their first purchase from the US.

A second story reports the rapid growth in exports of domestically produced natural gas. It reveals that China has signed a long-term contract with Cheniere Energy — a major exporter of liquefied natural gas (LNG) — under which Cheniere will ship LNG from the Gulf Coast to China. Under this contract, Cheniere will provide 1.2 million tons of LNG annually to China, starting in five years, and lasting for 20 years after that.

And there is a third story, which notes that besides a rapid rise in American LNG shipments to China, we are seeing an explosion of exports of American crude oil shipments to that country. These exports have mushroomed from zero, before two years ago, to 400,000 barrels per day during the past two months. And again, if we bust open ANWR and the coastal waters of Alaska, such exports will increase even more quickly.

One nice side effect of this is that the more oil China buys from us, the lower our balance-of-trade deficit is with China. Two months ago our trade deficit with China was $25.55 billion. Last month it dropped to $21.895 billion.

Our current net imports are only one-fourth of what they were in 2006, and we are likely to become a net exporter in about a decade.

For the foreseeable future, of course, China will continue to buy most of its oil from Russia and the OPEC countries. But our share of the Chinese market will grow, for two reasons. First, at $60 per barrel, American crude is more than $4 cheaper than the benchmark (Brent) price. Second, while there are certain infrastructure bottlenecks that have to be overcome, they are being addressed. For example, while we don’t yet have ports capable of handling the biggest oil tankers (“Very Large Crude Carriers”), we have already started expanding one of the largest ports on the Louisiana coast.

All of this has added to the stress on OPEC that may result in its collapse as a cartel: the members of the cartel may go their own ways. The recent uptick in oil prices above the $60 per barrel range has helped OPEC find some relief. The recovery of the old price from its lows in the $40–50 range has two causes.

One is the meltdown of socialism in Venezuela, which has cut its oil production dramatically. Venezuela, a founding member of OPEC, is allocated by the Cartel to produce 1.97 million BPD. But the near civil war in Venezuela has dropped actual production to only 1.64 Million BPD. In fact, Venezuela’s production dropped by a whopping 30% last year alone. This is a steeper decline than that experienced by Russia when the Soviet Union broke up, and that experienced by Iraq following the 2003 invasion!

As noted by the Wall Street Journal article that I am referencing, the drop in Venezuelan petroleum output will likely continue, if not accelerate, because the nation is trapped in a vicious socialized spiral. As it exports less, it receives less foreign currency, which cuts its ability to buy food and other necessities that its own dysfunctional economy cannot produce, which in turn increases its hyperinflation and thus the political and economic failure. Moreover, Venezuela’s declining shipments of crude are deducted to paying creditors (such as Russia) and are in constant danger of being seized by creditors.

All of this has added to the stress on OPEC that may result in its collapse as a cartel: the members of the cartel may go their own ways.

In short, the ill winds that have so badly buffeted the hapless Venezuelan people have blown great good to the rest of OPEC. I suspect this is the real reason why Russia — no longer itself socialist — so strongly supports the Venezuelan socialist regime: it keeps a formidable competitor on the ground. The Russians want nothing so much as fair competition — the history of their Olympic teams shows that!

Speaking of Russia, the second major reason that OPEC has been able to keep the price of oil as high as it has recently (i.e., in the $60–70 per barrel range) is that so far Russia has stuck to its agreement with OPEC to hold down production. In early 2017, OPEC and Russia — which, while not a member of OPEC, is certainly an ally of it — agreed to cut back Russia’s production. This agreement has held up for thirteen months, now, and the Russians have signaled that they are inclined to keep to the bargain through the rest of this year and even into the first half of next year. However, the Russian oil oligarchs are expressing doubts about the deal — since Russia needs to maximize its income in order to arm itself maximally.

Vadim Yakovlev, deputy CEO of Gazprom Neft, the giant Russian oil company, has said that the company views the OPEC agreement as only temporary, and it irks the company to be forced to hold back production. Gazprom’s CEO Alexander Dyukov has said, “Following the OPEC agreement, instead of growing at eight to nine percent, we [Gazprom] have increased by just 4.5 to five percent. Which is, without a doubt, a negative factor for us.”

At this point, American production is a regulator of world prices: whenever the price rises much above $60, the industry jacks up production, and the result brings the price right back down.

It is clear that OPEC’s day of rule is coming to an end. America — already the greatest producer of oil and natural gas combined — is on track to become the world’s biggest oil producer this year. Energy research firm Rystad Energy estimates the US production will rise by 10%, hitting 11 million BPD. America hasn’t been the global leader since — 1975!

The report from which I have drawn that last piece of information notes that in 2015 the Saudis drove oil prices down to $26 a barrel. This lowered American production by 11%. But the American oil industry, not destroyed, became stronger — and more efficient, able to turn a profit with prices as low as $30 a barrel. While some experts are not so sanguine about the US becoming number one, it is clear that our production will continue to grow. At this point, American production is a regulator of world prices: whenever the price rises much above $60, the industry jacks up production, and the result brings the price right back down. A recent article spells this out — oil prices have been driven down by American production’s rise to a new high of 10.25 million BPD.

In sum, the days of OPEC — an evil cartel of evil states, from socialist Venezuela to religious-fascist Iran to duplicitous Saudi Arabia to revanchist neofascist Russia — are numbered. The free market will at last prevail.




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The Geo-Petroleum Order Overturned

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Several recent articles point to the continuing rapid evolution of the world’s geopolitical order in regard to energy — what I dub the “geo-petroleum order”. The upheaval was caused by America’s resurrection as a dominant oil and natural gas superpower, which in turn was caused by the fracking revolution. This resurrection, I would suggest, has had two phases.

The first phase started in the 1990’s, when George P. Mitchel combined hydraulic fracturing (known for decades) with horizontal drilling. This technique — fracking, as it has come to be known — allowed oil production in America to grow like a bodybuilder on steroids. It grew linearly up about 50% between 2011 and 2015. This allowed the US to shrink steadily as a net oil importer. We are close to hitting the goal of zero net imports, which is to say we are close to energy independence. Moreover, fracking drove the price of oil down by something like two thirds, to the current range of $40 to $60 per barrel.

The introduction of that kaleidoscope creator of pointless boondoggles, the US Department of Energy, was another monumental mistake.

The second phase began when House Speaker Ryan managed — amazingly! — to get a bill through Congress allowing domestically produced oil to be sold abroad. And he got President Obama — no big fan of fossil fuels — to sign it into law. As I noted at the time, this was an astounding piece of work. It overturned a grotesquely stupid law (passed during the energy crisis of the 1970s) that forbade the sale of presumably scarce domestic oil abroad. It never occurred to the morons who enacted this law that it would discourage oil companies and innovators from finding different ways to extract oil here, and making them look abroad instead.

Parenthetically, I would suggest that future historians will record that it was primarily our own idiocy that caused our energy shortages during the period running from the OPEC oil embargo to the rapid rise of fracking — a period that saw the greatest transfer of wealth from the US to its enemies ever known, for which we were “rewarded” by terrorist attacks and Russian neoimperialism. The enactment of the aforementioned subhumanly stupid law prohibited the shipment of American-produced oil, incentivizing oil producers and innovators to focus on foreign oil production. The introduction of that kaleidoscope creator of pointless boondoggles, the US Department of Energy (DOE), was another monumental mistake. The projects it forced innovators to pursue exhibited a degree of asininity seldom exceeded in the private realm. These projects range from syn-fuels and geothermal energy to biomass and corn ethanol (the mother and father of all boondoggles) to solar farms and windmills that shred birds and produce expensive energy at the very times it is least needed. Another DOE achievement was killing of the fast breeder reactor, which would have taken the nuclear “waste” we have accumulated and use it as fuel.

The DOE should top the list of federal departments to be eliminated. And for those of you who are worried about a rise of ocean levels said to be caused by global warning, may I offer a helpful hint? Just create a US Department of Water Creation, and the ocean levels won’t just fall; they will simply dry up.

Development in ANWR will provide thousands of high-paying jobs and $60 billion in royalties for the state — some of which goes directly to the people of Alaska.

But I digress. The flawed tax bill recently passed by Congress and signed into law by the president contains a provision allowing limited drilling in the formerly locked away Alaskan National Wildlife Reserve (ANWR). ANWR — which is in the middle of nowhere, and protects nothing but mosquitoes — was created at a time of high oil prices, and with only one purpose: to deny oil companies the chance to develop a small piece of vast Alaska. ANWR was, of course, opposed by the great majority of actual Alaskans but favored by soi-disant “environmentalists” in Silicon Valley and Beverly Hills. But then, neither Silicon Valley nor Beverly Hills has Alaska’s unemployment rate, which is the highest in the nation. Nor do they have Alaska’s large budget deficit.

Development in ANWR will provide thousands of high-paying jobs and $60 billion in royalties for the state — which puts some of the funds in a master-fund, the income of which goes directly to the people of Alaska. ANWR will also rejuvenate the Alaskan Oil Pipeline, keeping that great project alive. Not bad, considering that the drilling will take place on less than 2,000 acres — which is one-hundredth of 1% of the ANWR reserve.

It has also been reported that the $3.8 billion dollar Dakota Access Pipeline — created to ship the burgeoning oil production from fracking operations in North Dakota — is delivering bountiful benefits after only six months of operation. Lowering the cost of shipping has caused an increase in production. October’s production hit 1.185 million barrels per day (BPD), which is about a 13% increase over the peak before the pipeline.

As a result, unemployment in North Dakota is exceptionally low (2.3% in November), state revenues rose by $43.5 million in the first five months since the pipeline opened, and the pipe is projected to deliver $210 to $250 million in extra tax revenue by the end of its first two years. That’s delivering the green!

Saudi Arabia is now looking to invest in — American shale operations! How the geo-petroleum worm has turned.

Speaking of green, there has been a bonus for the environment as well. The pipeline has eliminated about 83% of the train traffic carrying oil, with only two trains a day now needed to transport oil instead of the 12 needed before the pipeline. This dramatically decreases the chance of ecologically damaging oil spills, or hominid-damaging oil explosions when trains carrying oil crash.

Another encouraging report explores an unseen upside of the growth in American fossil fuel production. The domestic steel industry — long an industry under stress from foreign competition — is itself experiencing a rebirth. Both oil and natural gas are shipped mainly by pipeline (unless misguided environmental activists stop the projects) and the pipes aren’t made of wood; they’re made of steel. Recently the newer domestic steel plants have become dramatically more efficient and are increasing capacity in anticipation of the pipeline buildout.

One American steel manufacturer projects growth in domestic oil and natural gas for the next ten to 20 years. Shipments from American steel producers went up 5% in the first ten months of last year — not as good as the 15% experienced by foreign producers, but still on the right track.

Some American manufacturers worry that the domestic buildout in steel plants will lead to a glut. But research done by Pipe Logix estimates that the number of oil and natural gas wells increased by 60% in 2016 alone. Those wells, and the pipes that ship their products, both require steel. So the worry about a “glut” of domestic steel mills seems exaggerated.

The foxy frackers just tightened their operations and kept innovating, winding up with an amazingly flexible industry that remains profitable in a below-$40 per barrel environment.

The American fossil fuel renaissance is having an impact on our major oil competitors. There is fascinating news that Saudi Arabia is now looking to invest in — American shale operations! How the geo-petroleum worm has turned!

Specifically, Aramco — the Saudi state-owned oil company — has approached the Houston based natural gas producer Tellurian, looking to invest. Aramco is also looked at acquiring assets in the two huge fossil fuel basins, Permian and Eagle Ford.

Admittedly, these developments are only incipient. But the fact that the Saudis are knocking at the door marks a major shift. They realize that America — once a pitifully energy-dependent giant brought its knees by despicable dictators sitting on top of large oil reserves — is now the world’s biggest producer of oil and natural gas, eclipsing both the always-treacherous Saudis and the authoritarian Russians. If you add on our coal production, we completely eclipse other countries in fossil-fuel production.

How sad that is for oil potentates, socialist caudillos, and dictators in general, who got fat on oil at an over-$100 price!

Of course, while we are the world’s largest producer of oil and natural gas, we are still net importers, because we consume so much. But as we increase production, we will become a net exporter. And this is what the Saudis realize. Aramco already owns some refineries in the US (and elsewhere in the world), but all Saudi production of oil and natural gas takes place in Saudi Arabia. The new leader of the country (Crown Prince Mohammed bin Salman) plans to privatize Aramco, and the IPO shares would fetch a higher price if Aramco sites production here.

The Saudis have two other reasons for wanting to buy into US oil and natural gas production. First, they aim to understand better how fracking works in such nimble ways. A couple of years ago, the Saudis tried to drive the frackers out of business by jacking up their own production and thus driving down prices. For a while, the price of oil hit about $30 per barrel. This caused the Saudi government to hemorrhage foreign reserves, but the foxy frackers just tightened their operations and kept innovating, winding up with an amazingly flexible industry that remains profitable in a below-$40 per barrel environment. When the price drops that low, less efficient operations get closed, but they can be expanded again, in the blink of an eye, when oil goes over $50 a barrel. How sad that is for oil potentates, socialist caudillos, and dictators in general, who got fat on oil at an over-$100 price!

The Saudis envy this flexibility and deeply resent the fact that it will keep the price of oil below $60 a barrel for the indefinite future. Witness the Crown Prince’s attempt to seize the assets of corrupt relatives and get Saudis used to working, rather than living on welfare paid by the rest of the world.

The Russians have “kept up” with American technology since the time of Lenin, usually by stealing it.

The other reason the Saudis want to have operations here is that they want to shift from their reliance on their own oil to power everything. The world’s natural fossil fuel distribution has involved using oil to power transportation, but natural gas and coal to generate electricity — and coal is a much dirtier fuel. But Saudi Arabia’s own natural gas reserves — which are about equal to America’s — are sulfur-laden and hard to get out of the ground. So to convert its production of electricity to natural gas, the country would have to import 12 million metric tons of LNG annually. Extracting that here in America would make sense.

But I have another, deliciously rich, piece of news. It is said that imitation is the sincerest form of flattery. If that’s true our archenemy Russia is flattering us in the extreme. It is trying to develop its own shale.

Russia’s main shale formation — the Bazhenov formation — is the largest in the world. And Russian oil production is the largest in the world. But Russians are looking at oil fields that are six decades or more old, and have declining outputs. So they want to do what America did: recover peak production by means of fracking. The trick is to replicate America’s technological expertise. To this end, the Russian government — i.e., Putin and his corrupt cronies — is offering tax incentives for shale companies, and incentivizing cooperation among energy companies and research institutes to develop fracking technology.

Alexei Vashkevich, exploration director for Russian energy conglomerate Gazprom Neft, who conveniently worked on the North Dakota’s Bakken formation operations, assures us that the Russians won’t rip off American technology but will develop a totally different Russian technology.

Oh, please, Alexei — as if the new Russian 5th-generation fighter weren’t a direct clone of America’s F35. The Russians have “kept up” with American technology since the time of Lenin, usually by stealing it. Witness A-bomb plans stolen by spies, F35 plans, obviously filched by cyberspies, aka hackers, who use the computer and internet technology they stole from — Americans!

We should work to keep oil prices so low that they delay Russia’s massive military buildup.

The news article just mentioned observes that it will be, perhaps, another six or seven years before Russian fracking operations produce very much, in part because of the embargo placed on Russia when it dismembered Ukraine. But wait: if the Russian technology-to-be is going to be totally different from America’s, why would the denial of that technology hold back Russia’s development?

I think you can expect Russia to do three things in the immediate future.

First, you will see it unleash its hackers to steal massive amounts of American fracking technology. My advice to American fracking companies is this: If you haven’t done so already, set up encryption and other barriers to stop cyberspies from an orgy of theft.

Second, you should be prepared to see mysterious “environmental” groups spew colossal amounts of deceitful anti-fracking propaganda. These groups will be funded by Putin for the sole purpose of retarding America’s own fracking.

Third, you can expect a dramatic increase in Russian meddling with elections, here and in Europe, by feeding propaganda to news media and funds to political activist groups. They likely played a role in strangling Poland’s development of its own substantial shale formations — keeping Poland and the rest of Eastern Europe dependent on Russian natural gas and oil. No doubt they will try to elect anti-fracking candidates here as well.

My strong belief is that we should work to keep prices so low that they delay Russia’s massive military buildup. To do this, we need to open up more offshore sites, and more in Alaska, and push for the systematic exploration of the Arctic.

In this regard, there is some very recent good news. Secretary of the Interior Ryan Zinke has announced a plan that would overturn the Obama administration’s effort to restrict offshore drilling to only 6% of the American coastline. Under the new plan, fully 90% of offshore areas would be opened, in the largest sale of offshore leases in history. This is a huge new step towards the goal of making America, in Zinke’s words, “the strongest energy superpower.”

While oil company CEOs may fear a glut — and lower prices — consumers would welcome it.

This means that Southern California’s coastline would be open for offshore drilling for the first time since the late 1960s, when it was closed because of an oil spill in Santa Barbara. The East Coast offshore areas would also be reopened.

Naturally, environmentalist groups are already screaming. For example, Diane Hoskins of the activist group Oceana called the plan “absolutely radical.” This is to be expected. Democratic governors in several states (including California, Oregon, North Carolina, and Washington) also expressed complete opposition, and some Republicans became alarmed as well. Senator Marco Rubio and Governor Rick Scott both came out against drilling off Florida’s coastline.

Even oil companies have stated reservations, since they are now experiencing what they regard as a glut of oil. But while oil company CEOs may fear a glut — and lower prices — consumers would welcome it.

Zinke has pointed out that the plan will not be finalized until 2019, and only after comments have been received in public hearings around the country. While all that is pending, we can be thankful for inventive frackers and the prosperity they have given us.




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Frackin’ . . . Like the Doo-Dah Man

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Recent stories in the wonderful Wall Street Journal give us the happy news that (while receiving no coverage from the mainstream media, of course) the fracking revolution rolls on.

The first story reports that American crude oil exports are accelerating to new highs, rapidly approaching as much as Kuwait currently exports. Amazing. As of last month, we were exporting 1,984,000 barrels per day (BPD), an increase of nearly 500,000 BPD from the week before, and up an astounding 684,000 BPD in May. Considering that Kuwait ships about two million BPD, this is great news.

Admittedly, the US is still a net oil importer. But we import almost all the decreasing amount of foreign oil we need from our great ally Canada — our great ally, unless President Trump pulls out of NAFTA.

This exporting craze will only continue to build — if we don’t try to destroy our fracking industry, and allow it to flourish.

The reason for this surge in US crude oil exportation is that American crude is relatively cheap. In the week in which the record in exports was set, the US crude price was nearly $7 per barrel cheaper than the world standard. This is a new record low during the period since the 50-year-old ban on oil exports was lifted a couple of years ago, thanks to the much-maligned Congressman Paul Ryan.

In the irony that is the mother and father of all ironies, the second biggest buyer of America’s crude oil is our devoted enemy, China, which now takes about 180,000 BPD from us, up almost 900% from last year.

This exporting craze will only continue to build — if we don’t try to destroy our fracking industry, and allow it to flourish. All it needs is to be left alone in the free market. If so, it will guarantee that we never see $100 a barrel oil again ever. Here I must give Trump his props — he has allowed fracking to go unmolested.

What the frackers have shown is a profound and continuing ability to innovate and lower costs, in the face of an attempt by OPEC, that rent-seeking cesspool of corruption, to drive them out of business by lowering prices. But it was the OPEC companies that were driven to the wall.

This is just more of the daffy Malthusian “peak oil” thinking we’ve heard before.

The Wall Street Journal reports that one of the biggest natural gas fields from a decade ago, the Haynesville Shale field in Louisiana, has been reborn. Ten years ago it was productive, but five years ago it was nearly played out. Yet this field has come roaring back to life. The number of drilling rigs has tripled in the past year, and the current amount of natural gas is up by 17% in the same period.

What has allowed this resurrection of gas fields is “refracking” — the process of using more sand and extending the wells further. In fact, the US Geological Survey now estimates that the Haynesville, Louisiana and adjacent fields hold 300 trillion cubic feet of natural gas. That is a 430% increase over its 2010 estimate.

Helping the process is investor recognition that natural gas has a bright future. The US Department of Energy projects that over the next quarter of a century or so, use of natural gas will outstrip that of all other fossil fuels, especially coal. Cheniere Energy has a large liquefied natural gas (LNG) plant and export facility in Louisiana. Additional LNG plants are being built in Louisiana, Mississippi, Texas, and even Maryland.

Natural gas is the “feedstock” in many industries — petrochemicals, plastics, and fertilizers, to name the biggest. Nearly 80 petrochemical plants are being built in the Gulf Coast region alone, where they will result in jobs, and the continued resurrection of Dixieland.

The major hurdles are an apparent fall in innovation in the fracking industry, wariness among investors, and rising labor costs.

The WSJ notes that some “experts” are worried that the export market will siphon off so much natural gas that prices will rise, hurting manufacturers that are now ramping up. This is just more of the daffy Malthusian “peak oil” thinking we’ve heard before. We can simply increase production of natural gas from all over the US — from the Dakotas to Pennsylvania to Texas — to meet the demand. All the while good paying jobs will be created, and our adversaries (such as Iran, Russia, Saudi Arabia, Qatar, and Venezuela) will be kicked in their teeth.

When will the “experts” finally wake up and realize that in a free market there is no “peak” anything — least of all oil and natural gas?

In fact, during the past year, Castleton Commodities International spent more than a billion bucks to buy 160,000 acres of Anadarko’s Haynesville land. For that it got an infusion of capital from Tokyo Gas America, the largest utility in Japan. This shows the true expert assessment of fracking’s value.

A third WSJ article amplifies the idea that the glut of US production is spooking producers. In other words, it’s such a bitch that prices are set by supply and demand! The piece notes that the growth in the number of rigs — typically used as a measure of future activity &‐ dropped from 20% for the preceding four quarters to “only” 6% in the third quarter of this year.

Many of the OPEC states (especially Saudi Arabia) need oil to be around $100 per barrel to keep their economies stable and their citizens quiet.

This shouldn’t cause any pain. With the buildout of American industry and the roaring appetite of East Asian consumers, demand will just keep increasing. The Journal notes that US oil production may surpass the supposed “peak oil” production of 9.6 million BPD set in 1970. The major hurdles are an apparent fall in innovation in the fracking industry, wariness among investors, and rising labor costs. But despite the slowdown in the increase of production, there is no decrease in production, and the Energy Information Agency expects American oil production to hit 9.69 million BPD at the end of the year. This, despite oil prices stuck at about $50 per barrel.

The last WSJ story that I want to mention points to the continuing geopolitical fallout from the growth of US oil production. It reports that continued low prices on world oil markets have led Saudi Arabia, Venezuela, and other OPEC members to push Russia — which, while not technically an OPEC member, is surely a fellow traveler — to continue to agree to the current limits on production.

The narrative here is as simple as it is delicious. In the face of the American fracking revolution — which dropped world oil prices from over $100 per barrel a few years ago to $50 and below — OPEC has tried to figure out what to do. Many of the OPEC states (especially Saudi Arabia) need oil to be around $100 per barrel to keep their economies stable and their citizens quiet. But Putin’s regime has used Russia’s oil wealth for a huge military buildup, and kept Russian citizens happy by using military power to conquer the Crimea and threaten the rest of the former Soviet empire. To keep this up, Putin is prepared to sell as much oil as possible, even at lower prices, to fund his mechanisms of corruption.

In 2017 Russia agreed with the OPEC strategy to cut back production by 2% to keep prices from plummeting further. While this production cut helped raise the world price of oil by about 13%, American fracking has kept the world price well below $60 per barrel. But Russia’s participation in continuing the cuts is unclear, to say the least. The current agreement ends in March 2018, and OPEC is pushing the wily Putin to agree to extend it. The Saudis are offering to set up a billion-dollar fund to invest in energy projects.

The US should open all the spigots and end net importation of foreign oil once and for all.

Putin so far remains noncommittal. He can see what is obvious, which the WSJ article notes: if OPEC succeeds in raising prices, American shale companies can immediately crank up their output, rapidly driving the price back down.

Now, whether the Russians are bluffing OPEC to get more concessions, or simply intend to cover their drop in revenue by increasing their own production, we will have to wait to see. But I think the US should open all the spigots and end net importation of foreign oil once and for all. The US should make our own oil a major export. This means: opening up more federal land for fracking and offshore drilling, opening up ANWR in Alaska, opening the East Coast for offshore drilling, and pushing to open up the Arctic for the rapid exploitation of the region’s resources.

I would suggest to Trump that he get over his fears about free trade agreements and cut a deal that would allow him to sign the TPP agreement, but with one new provision: the TPP members should agree that if the US can sell them oil and LNG at world market prices, they will buy from us. That would eliminate the trade imbalances that so anger Trump (though not economists, of course). It is, alas, very doubtful that Trump can grow that much in strategic thinking.

that the export market will siphon off so much natural gas that prices will rise, hurting manufacturers that are now ramping up. This is just more of the daffy Malthusian ‐




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Notes on the Extinctions at the Top of the World

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Between bouts of ducking and covering under my second-grade desk in case the Russians dropped an atom bomb on our classroom, I spent a lot of time studying geography. Not because my teacher emphasized matters geographical, but because she had a thing about homework. And not in a good way.

On the first day of class she handed out the first assignment and I did the obvious thing. I forgot about it. She didn’t forget, though, and the next morning, while the other kids were enjoying recess, I got invited to sit at my desk and complete the work. I passed the time staring at islands on the big world map next to the blackboard. On the third day I owed two homeworks, both of which would have to be turned in before I could head out to recess. Come April, I owed a hundred-and-some homeworks and all possibility of recess had forever receded below the horizon. If my family hadn’t moved to another city, I’d still be in second grade, puzzling over the Rorschach shapes of faraway islands.

Svalbard has the most polar bears of anywhere in the world — more even than Churchill, Manitoba, where bears sashay down Main Street eating people’s dogs.

There are a lot of islands in the world, and I came out of that experience with a geographical bucket list of almost bottomless capacity. It was, looking back, a list based on shape and remoteness instead of anything particular my seven-year-old self knew about any of the islands. Which is how my seven-year-old self wound up sending me to Svalbard more than half a century later, still thinking the place should be called Spitzbergen, the way it used to be.

The two things that I knew about Svalbard were that it is very far north, farther north, even, than Siberia, as far north as the northernmost reaches of Greenland; and that Svalbard had the most polar bears of anywhere in the world — more even than Churchill, Manitoba, where bears sashay down Main Street eating people’s dogs. Also, my seven-year-old self wanted to be there in the winter for the true Svalbard experience, and to see the Northern lights.

Longyearbyen, the capital of Svalbard, is the former silver medalist for the title of northernmost civilian place on the planet. In the ’90s it got defaulted up to northernmost when the model Soviet city 50 miles west and a dozen or so closer to the pole was disqualified on account of going out of business. My wife and I lodged in a room in Longyearbyen, in barracks that housed coal miners before the miners rioted over their poor living conditions. Longyearbyen seemed an apt enough name for somewhere to be stuck on a yearlong contract digging coal. No wonder the miners rioted. It took a while for me to find out that the town was named after John Munro Longyear, the Michigan timber baron who began the mining operations in 1906.

It looked like a rundown middle-school gym, if middle-school gyms came plastered with posters of heroic Red Army soldiers from the Great Patriotic War, tarted up with gold CCCP’s on red backgrounds.

People who didn’t riot were the inhabitants of the Soviet model city. According to the young Russian who showed us around, it had been a very desirable place to be, Soviet-Unionwise. It’s called Pyramiden and people waited years to be assigned there. Like Longyearbyen, Pyramiden was a coal-mining town. We boated over one day to check it out.

There was a big, brass, snow-blown bust of Lenin welcoming us to the Sports Palace. The Palace had a basketball court and a tawdry little music room and an even tawdrier niche fitted out with shelves that some wag had designated as a library. It looked like a rundown middle-school gym in a community that had experienced a property-tax revolt, if middle-school gyms came plastered with posters of heroic Red Army soldiers from the Great Patriotic War, tarted up with gold CCCP’s on red backgrounds. There was also a sinister sounding building called the Tulip Hotel, which, since we weren’t Soviet royalty off on a junket, we weren’t allowed inside of. “Everything here was free,” beamed the Russian who showed us around. He was too young to know better.

Free included a bleak apartment in the men’s building, if you were a guy. In the ladies’, if you weren’t. There were rumors of a secret tunnel connecting the two which were hard to credit since both buildings were constructed several feet off the ground because of permafrost. Still, if you could manage to hook up with a coal miner of the opposite sex you hit the jackpot because married people got upgraded to a couple’s apartment. There must have been a limited number of those apartments, though, or people would have been allowed to meet out in the open rather than having to sneak around in tunnels.

Free also, of course, included all the labor those miners put in. And the food, the food was free, too. Evidence about what kind of food you can get for free lurks in the abandoned institutional kitchen. Mostly it seemed to have been canned peas stirred in huge electric-powered tubs that reminded me of the first-generation washing machines you see in photographs from the Depression. Free industrial peas at the end of working all day in the mines — no wonder the vodka was free, too. The vodka is still there. You can purchase a shot at the northernmost bar in the world. One taste, and you realize why it hasn’t migrated to a more competitive locale. And why it had to be free.

“Everything here was free,” beamed the Russian who showed us around. He was too young to know better.

High class people. Doctors. Lawyers. Folks with political pull pulled strings to get sent to a place farther north than Siberia so they could work in mines all day and eat cafeteria peas at night and hook up in tunnels like horny junior-high kids and shoot down vodka that would have etched the chrome off the fancy ZiL limousines the nomenklatura were chauffeured around in back home. A few miles away, Norwegian miners were rioting because they didn’t like the rooms they were given, but these poor schnooks thought they were living in paradise. There may have been Northern lights somewhere, but I wouldn’t know. It turns out the Northern lights are easier to see when it isn’t snowing all the time.

Also, I should have given a bit more thought to that business about seeing polar bears. Even my seven-year-old brain could have put it together. Bears. Winter. Hibernation. But I wasn’t any more analytical when I planned the trip than I’d been about not turning in my homework.

Or the bear thing may have had something to do with the fact that polar bears are dying out. All the right people say so. The pack ice is melting and bears all over the Arctic are falling into the water and starving to death, so if you live in Churchill, keep a close eye on your pets. There are a lot of hungry bears wading ashore. But people in Svalbard didn’t seem to be worried about polar bears dying out. They were worried about being eaten by bears. On Svalbard, you’re required by law to carry a high-powered rifle when you step outside of town.

Longyearbyen has a university, the Harvard of the Arctic, according to the Toronto Star, where you can study oceanography, but I wouldn’t. Studying oceanography involves SCUBA diving, and there are plenty of fine programs at places more equatorial than the Barents Sea. They have a nice museum at the university, though, a museum that focuses on geology and, this being Svalbard, the glaciers that sit on top of the geology. It was while I was reading about those glaciers that I came across this:

For the past four to five thousand years the Earth has been subject to a marked cooling, which gradually has created better conditions for the growth of glaciers and permafrost. Five thousand years ago the average temperature in Svalbard was around 4 degrees warmer than today. Then, one would probably have had to climb 200-400m up in the mountains in order to find permafrost, and many of today’s glaciers would not then have existed. The largest glaciers would have existed in a much reduced size. Many of Svalbard’s glaciers, therefore, are less than three to four thousand years old.

They were worried about being eaten by bears. On Svalbard, you’re required by law to carry a high-powered rifle when you step outside of town.

Svalbard has gotten a lot of attention over the past few months for being the ground zero of global warming. Maybe, even, a bit above zero, sometimes. Degrees on Svalbard have shot up quicker than degrees anywhere else on earth, which got me to wondering about those polar bears. Polar bears have been floating around in the Arctic for something like 200,000 years. Even if Svalbard is warming up today, what were they floating on 5,000 years ago? The sign didn’t say, so I had to look it up on my own. And discovered that there are two schools of thought on the bear situation.

The first is the one you’ve already heard. The other is that the bear population has exploded in recent years, mainly because of an international ban on polar bear hunting. When I tried to look up the exact numbers, I found some in the articles that thought there were more bears than ever. Twenty-five thousand, and climbing. Thirty-thousand, with populations of bears well established in dozens of locations throughout the polar region. The articles that thought the bears were dying out talked about pack ice. Less pack ice than ever. You can drive to the North Pole in your bass boat, if you want to.

Now I’m not a polar bear scientist and I’m not qualified to judge the quality of those articles, but it did seem to me that one side was willing to commit to real numbers and the other, well, the other weaseled out of addressing the question.




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The Strange Case of Feelings Versus Facts

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Don’t tase me, bro, but I sometimes watch “Outnumbered” on Fox News. I do it mainly because I like the discussion leader, the always poised, always intelligent Harris Faulkner. She isn’t big on one-liners, but on December 13 she put a lot of truth into just five words. “Facts,” she said, “don’t care about feelings.”

That could provide a fitting introduction and conclusion to any discussion of political discourse in 2016, which consisted largely of lunatic ravings, followed by shrieks of joy or anguish that had virtually nothing to do with facts and almost everything to do with the writer’s or speaker’s mental condition. Particularly notable was a fleet (I was going to say “raft,” then promoted it to “ship,” then “battleship,” and so on up) of statements, based wholly on their authors’ authority, the content of which demolished that authority. These statements included Donald Trump’s continuous assurances that he would successfully perform various mostly impossible economic tricks, and Hillary Clinton’s continuous assurances that she had been vindicated by every investigation ever undertaken of her.

When libertarians go wrong we are more likely to go in the opposite direction: we are likely to have too much respect for truth and fact, or at least the truths and facts that interest us.

Blame is not confined to those two notorious offenders. Throughout my life I’ve been bored and irritated by elder statesmen, pollsters, media commentators, religious leaders, and yes, college professors like me retailing their opinions as if everyone else were bound to believe them, in obeisance to the source. This year, I was alternately nauseated and entertained as I watched such people asserting their intellectual authority by rushing onstage, tearing off their costumes, setting fire to their toupees, and making obscene gestures at the audience. These were the people who considered themselves entitled to laugh like maniacs at the idea that Trump could ever be elected, because they understood American politics, or they had taken the pulse of the American voter, or they had high ratings among Americans in the prime demographic, or they were in touch with the spiritual longings of the American people. These were the authorities who then screamed and tore their hair at the sudden discovery that America had been — all along, and unknown to them — a nation of xenophobes and white supremacists.

The facts, of course, didn’t care about these people’s feelings, any more than they cared about Jill Stein’s feeling that somehow the election had been “hacked,” or about Hillary Clinton’s feeling that it was “Comey” who had done her in, or about her later feeling that it was the Russkies that done it (by the simple act of revealing her servants’ private correspondence), or about Donald Trump’s feeling that he, like Shakespeare’s Bottom, knows how to perform every part in the play.

Fortunately, libertarians have so far avoided this bad behavior, even when sorely tempted by the example of Stein. When libertarians go wrong we are more likely to go in the opposite direction: we are likely to have too much respect for truth and fact, or at least the truths and facts that interest us. Years ago I attended a libertarian conference at which a resolution was presented. It said that such and such idea was contrary to reality, and that “reality always wins.” This might have been taken as a mere rhetorical flourish, but a lengthy debate followed among the many people who took that truth claim seriously. Some of them argued, passionately, that even false ideas are part of “reality,” while others retorted, with equal passion, that false ideas aren’t really real. After an hour or so of this, Bill Bradford and I walked out. We were laughing at the futility of the whole affair, which was simply a disagreement about two common understandings of a common word. But we were not laughing at the libertarian reverence for “reality,” and we certainly weren’t laughing at the egalitarian nature of the proceedings. If anybody had said, “I’m a college professor, and I know what ‘reality’ means,” or even, “I’m a libertarian, and this is how libertarians view ‘reality,’” the crowd would have gaped in wonder. What’s this guy talking about?

Someone might suggest that Trump’s choice of Rick Perry to head the Department of Energy was the sign of a resurgent egalitarianism in our national government. After all, Perry is as dumb as a rock, or as Chelsea Clinton. He’s the former presidential candidate who became former when he announced during a debate that there were three federal agencies he would eliminate, one of which was the Department of Uhhhh. He meant the Department of Energy, but he couldn’t remember the name. His appointment recalls the ancient Athenian democracy, in which public offices were filled by lot. You or I could just as easily have received a call from the president-elect: “Hullo Stephen, this is Donald Trump. Oh, I’m doing incredible today, thank you. Look, Stephen, I’ve got this unbelievable job for you . . .”

Someone might suggest that Trump’s choice of Rick Perry to head the Department of Energy was the sign of a resurgent egalitarianism in our national government. After all, Perry is as dumb as a rock.

Alas, I didn’t get the call. (If I had, I could have told Mr. Trump that there would, indeed, be one less federal agency.) Perry got it because he is a former governor. His appointment was an act of deference to the political class, which is known for its deep feeling and sensitivity, its tendency to brood over any apparent slight. By appointing Perry, Trump was undoubtedly trying to save him from a tailspin of grief about his apparent obsolescence, while relieving other senior politicians from similar fears.

Colin Powell may be one who needs reassurance. Like many of the rest, he feels that he deserves power, no matter what. A political general whose career was advanced by the Republican Party, he repaid the GOP by exposing its racism and disdaining its presidential candidate, not expecting him to be elected. Proven wrong about that, he still let it be known that he was “available for advice” to the winner. This is the way of the Elder Statesman, who deserves respect because . . . he’s an Elder Statesman.

You don’t have to be all that Elder to be accorded automatic hat-tips by the Establishment media. Any government employee — any employee likely to be a modern liberal — is an object of solicitous concern. Here are two Google News headlines from December 13: “Trump taps Exxon’s Tillerson as top US diplomat, lawmakers worried” (Reuters); “Energy Dept. rejects Trump’s request to name climate change workers, who remain worried” (Washington Post). Notice that in both instances the final emphasis falls on a status group (“lawmakers,” “climate change workers”), that the two groups enjoy their place in the sun because their members are paid by the government, and that their status is exalted enough to qualify them for euphemistic treatment. In place of the common yet arresting words one expects in a headline, Google hands us the very uncommon and unarresting “lawmakers” (a euphemism for “politicians” or at most “elected officials”) and “climate change workers” (a euphemism for “government bureaucrats concerned with, and probably advocating, the theory that the climate is changing, that human beings are responsible, that this is a bad thing, and that geniuses like themselves should be employed to stop it”). When prostitutes — literal prostitutes — start getting paid by the government, we will see headlines about “sex workers” being “worried” by requests to know their names.

This is the way of the Elder Statesman, who deserves respect because he’s an Elder Statesman.

The problem that supposedly justifies these solemn headlines is that the status group is worried. Well, as Scarlett O’Hara said to her worried sister: “Too bad about that!” If there’s a significant issue to be debated, sure, let’s debate it; but why should anyone worry about the mental condition of any particular group of people? Only in a status society are specific groups or individuals granted the right to sympathy.

As 2016 drew, slogged, dragged, or devolved to its end, one saw more clearly than ever that, in today’s America, this right is conferred by modern-liberal politicians and the media that serve them. Formerly, Democrats called attention to the frequent stupidity and chronic tyranny of the FBI and CIA; now they dwell upon the selfless heroism of the CIA, because a member of the Agency has whispered that Putin loves Trump and wants him to be president. About the FBI the “liberals” switch back and forth, like locomotives looking for a train, one moment extolling its “integrity,” because it allegedly exonerated Hillary Clinton, and the next moment excoriating it as “deeply broken,” because it allegedly caused her defeat.

The Electoral College has been on a sympathy rollercoaster all year long. Before the election, a lot of Democrats who couldn’t do arithmetic smugly assumed that their party had a lock on the electoral college, because it would deliver a large block of votes from such solidly Democratic states as California. The College was therefore a good thing — until, at 11 PM on election day, it became the despised relic of a former era, the members of which were mindless hacks, selected for a total lack of intelligence and responsibility. Then arose the movement to reverse the election by getting Electors to switch from Trump. Now the College was a great American institution and its members wise solons who needed only to be reminded of their power. When, thus reminded, they didn’t switch, they were again the objects of scorn. They were un-Americans who had no right to vote as they did. They were people who had “sold out the country,” people who “don’t deserve to be in America.” This was one of the things that protestors screamed at Electors; a protestor in Wisconsin added a monarchical “This is my America!”Not yours, you bastards.

She had a point. If facts really do respond to (my) feelings, then I really do own . . . everything. I am a divine-right monarch with the arbitrary power to say what shall be true. Monarchs themselves often start to believe the meaningless, self-serving things they feel. It is a symptom and a means of their fall. And that’s what we’re seeing now, in the spectacle of leading Democrats demanding sympathy for what they themselves did to their party, and doing so without a hint of embarrassment. On December 19, when William Jefferson Clinton was being quoted as blaming his wife’s defeat, not on her, but on angry white men, Tucker Carlson (whose new TV show is, unexpectedly, pretty amusing) asked the rhetorical question, “Does he include himself?” It was an obvious thought, but obviously not one that had occurred to Clinton.

The Electoral College was therefore a good thing — until, at 11 PM on election day, it became the despised relic of a former era.

Even more obtusely self-righteous was John Podesta, chairman of Clinton’s campaign. He was the person whose computer provided many of the emails that damaged her campaign. In strict terms, those emails were probably not hacked, as people insist on saying, but were phished in the stupidest, most obvious way. But on December 18, Podesta tried to unelect Trump by saying, “It’s very much unknown whether there was collusion” between the Trump campaign and the Russkies, in the matter of the emails. He called for the Electoral College to be informed about this very much unknown conspiracy.

I just can’t get my head around this. After everything Podesta did to lose the election, he wants some kind of do-over. Why? Because it’s unknown whether his opponent was involved in the revelation of his (Podesta’s) own stupidity. If you say things like that, you believe you have a natural right to boundless sympathy and respect, and even reparations, in the form of a delegitimized election.

In the December 22 Washington Post, Ruben Navarrette painted a suggestive portrait of Podesta and the org he managed:

Thanks to a combination of leaks and reporting, we now know just how poorly run the Clinton campaign was, how top campaign staffers dismissed the importance of working-class white voters, how Democratic leaders had contempt for their own supporters, and how the coziness between the news media and campaign officials turned to collusion and created a backlash.

And virtually all those storms have something in common: Podesta. In short, the campaign chairman was at the center of just about everything that went wrong with Hillary Clinton’s bid for the White House.

I wonder whether you noticed what I did: every critical comment that Navarrette makes about the Democracy can also be made about the modern state: it’s stupid, unreflective, badly managed, and sovereignly contemptuous even of its clients and supporters (with one exception: the supporters known as the mainstream media). The Clinton org was a state within a state, with its own departments of revenue, foreign affairs, enforcement, propaganda, etc. It was no accident that Clinton’s campaign agents could function, or dysfunction, simultaneously as employees of the US government — it made no difference to them.

It was an obvious thought, but obviously not one that had occurred to William Jefferson Clinton.

In the Clinton machine one saw statism in a pure form. That’s why no one could figure out what Mrs. Clinton’s program was, or why, in the absence of any particular goals that she wanted to achieve as president, she kept running for the office. The state in its pure form is power; it desires no reason for its existence but the projection of its power. Hillary Clinton wanted that power and needed no other justification of her political life (which, horrible to say, is her whole life). Never once did she or her organization advocate an action that was not an extension of state power; never once did they propose or recognize the existence of any limitations on this power, or reflect on the fact that human knowledge would be limited even if human power were not. Identifying themselves so completely with an all-powerful, all-knowing state, she and her associates assumed that they had a right to be the state. They still do. If you think you have a natural right to unlimited power, and you somehow, in some way that you cannot understand, lose that power, your demand for sympathy will also be unlimited. It’s another rebellion of feelings against fact.

No one actually feels sorry for Hillary Clinton, but many people feel sorry for themselves, because their side lost, and they believe it had a right to win. So they try to see her as a sympathetic figure — a kind of Charles I, condemned and executed by a mob of cretins who could never grasp his greatness. In fact, Charles was an autocrat, and a stupid autocrat, and a deceitful autocrat to boot. As with Mrs. Clinton, if Charles said you had ten fingers, you would count your fingers to make sure. But when he was deposed and executed, the self-pity of the aristocrats who had despised him during his life was focused on him, and he became a Saint. I doubt that this process will go very far with the ludicrous Mrs. Clinton, but it is well underway with her former boss, President Obama. The funniest source is Fareed Zakaria of CNN, whose December 7 crockumentary about Obama suggested that America had failed its president: “It remains unclear if the country was ready for Barack Obama’s vision.”If you’re looking for a fact-free sentence, you have found it.

It was no accident that Clinton’s campaign agents could function, or dysfunction, simultaneously as employees of the US government — it made no difference to them.

In America, we have whiny, self-privileged classes, and whiny, self-privileged individuals. Now these have given us whiny, self-privileged issues, political positions that can get away with anything. Today, you are at least as likely to be fired for questioning inclusiveness, economic equality, public education, the environment, or the rights of undocumented workers — or even seeking definitions of these sacred concepts — as you used to be for taking the same approach to Americanism, our Judeo-Christian heritage, defeating the Reds, or the fight against illicit drugs; and before that, temperance, womanhood, our men in uniform, or purity of essence. (OK, I admit it: I took that last one from Dr. Strangelove.) One of the most privileged issues is, of course, common-sense gun control (i.e., elimination of the private ownership of firearms). So empty of fact and full of feeling is the anti-gun cause that The Federalist ran an absurd but accurate headline: “Progressives Demand Gun Control After Knife Attack at Ohio State University.” The article following the headline provided many examples of “progressives” who knew that any attack must be a gun attack, or caused by guns, or preventable by the prevention of guns, or something. Among millions of Americans, the very word “gun” (or even “knife”) is enough to cause hysteria. It makes them feel so insecure.

It has often been noted that the manners of the aristocracy are eventually transferred to the middle class and thence to the lower classes. It’s true; that often happens, and often it’s a good thing. I regret the fact that aristocratic reserve is no longer practiced in restaurants and airline terminals, or even museums and nature trails, where you can always depend on somebody showing up with a cellphone and a voice like Goebbels. But aristocracy is fully alive in another, quite unfortunate way. We are witnessing a transference of self-regard, self-privilege, and self-pity from the American political aristocracy to the issues they push and then to the pathetic voters who derive their own self-regard and their own demands for pity not from any fact but from their feelings about these mighty issues. That is how state power corrupts its holders, and how its holders corrupt everything.




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Hard Landings

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We tend to assign major significance to minor occurrences, especially where travel and potential accidents are concerned. “Thank goodness,” we think, “I stopped to check the mail, or I might have been involved in that crash I just passed.” We may even hesitate to change seats on a plane, or to change flights when an overbooking voucher is offered, for fear that, in the (very unlikely) event of an accident, we will have made a fatal mistake.

I thought of that tendency while watching an early scene in Sully. Three men (father and sons, as it turns out) rush to catch an alternative flight after their intended flight has been cancelled. They share high fives all around as the gate attendant relents and lets them board the plane, happy that their fishing vacation will not have to be delayed or postponed. Of course, we in the audience know that they just thwarted their guardian angels’ attempt to protect them; they’ve just boarded US Airways 1549, headed for the Hudson River and a whole new kind of fishing expedition. The dramatic foreshadowing continues as one son opts for the lone seat at the back of the plane so that his brother and father can have two seats together. Will this generous offer be his last?

The film opens with scenes of the low-flying plane, but something is wrong.

It’s risky to make a movie about an event so recent and fresh in the public’s memory as the miraculous water landing of a jet plane on the Hudson River in January 2009, after a flock of geese got sucked into the engines. And the entire event took just 208 seconds, plus another 20 minutes or so to rescue the passengers and crew. We all watched the news clips and interviews. What could a director — even one as skilled as Clint Eastwood — do to stretch the event into a full-length feature more interesting than what we’ve already seen on the news?

Despite my skepticism, I was fully engaged throughout this film. Eastwood chose to focus most of it not on the crash — er, I mean, water landing, as Sully (Tom Hanks) is quick to point out — or on Sully’s heroism, but on what he endured during the aftermath.

The film opens with scenes of the low-flying plane, but something is wrong. Instead of a river, we see buildings. This isn’t right. This isn’t the way it happened. Then Sully wakes up, and we realize that our hero, this man who managed to save 155 passengers and crew without a single casualty, is having recurrent nightmares about what happened, and what might have happened. Unable to sleep, he puts on jogging clothes and runs through the streets of New York, but he can’t run away from his fears.

This conflict drives the story and engages the audience’s ire at Big Government and Big Business.

Worse, the National Transportation Safety Board (NTSB) is having similar thoughts about what might have been, except that their thoughts aren’t nightmares. The NTSB actually sets out to prove, using computers and cockpit simulators, that the plane had enough thrust, altitude, and time to have returned to LaGuardia or landed at nearby Teeterboro Airport, thus sparing the plane and the trauma endured by the passengers. If they find against the captain, his career, his reputation, and his retirement pension will be gone. This conflict drives the story and engages the audience’s ire at Big Government and Big Business. We are outraged that they would sully Captain Sully’s reputation, and for a while I’m outraged at Eastwood too, for making this the focus of the film.

Eastwood knows best, of course, and the positioning of the NTSB simulators against the tense, calm, and quick-witted actions of Sully and his copilot Jeff Skiles (Aaron Eckhart) in the real cockpit make for a conclusion as exciting as the moment when we turned on our television screens and saw a plane sitting pretty as a duck on the Hudson, with 155 people huddling on her wings, surrounded by ferry boats. Watch for Vincent Lombardi playing himself as the ferry boat captain who was first on the scene, and stay for the credits to see the actual passengers and crew in a cathartic reunion with Sully and his wife (played by Laura Linney in the film).

Another eponymous biopic that opened this week also tells the story of a man whose reputation has been “sullied” by the government — or so we are led to believe. But we aren’t sure about Edward Snowden. Is he a hero who sacrificed essential freedoms in order to blow the whistle on government snooping and intrusion? Or is he a traitor who put patriots and foreign operatives at risk when he revealed sensitive, top-secret documents? Real people have real questions about this case, and those questions are not addressed in the film.

Both Snowden and the 2014 Oscar winning documentary Citizenfour present just one side of the issue: Edward Snowden’s side. I tend to be on that side, but as pointed out in my review of Citizenfour, Snowden controlled the famous interviews he provided to journalists Glenn Greenwald, Laura Poitras, and Ewan MacAskill (played in this movie by Zachary Quinto, Melissa Leo, and Tom Wilkinson) at the Hotel Mira in Hong Kong. They never challenged him or did any additional investigation (that we know of) to see whether U.S. operatives were harmed by his revelations. So the story is undeniably one-sided.

Snowden's patriotism feels a little odd, since he names Ayn Rand as one of his early influences, and I don’t think she would have approved of passionate service or statism of any sort.

The movie’s interviews, which provide the running narrative of the film, are almost identical to what we saw in the documentary, prompting me to question the point of making this narrative feature. However, Snowden provides a satisfying backstory we didn’t see in the documentary’s interviews, and that makes this film worth seeing.

Snowden (Joseph Gordon-Levitt) seems to have been a patriotic young man with a fervent desire to serve his country. (This felt a little odd to me, since he names Ayn Rand as one of his early influences, and I don’t think she would have approved of passionate service or statism of any sort.) He serves first in the military, then as a computer coder for the CIA, and then as a private contractor providing services to both the NSA and the CIA. A brilliant mathematician and analyst, he was able to crack codes and create complex computer programs designed to thwart hackers and aid government surveillance. But soon he discovers that the NSA and CIA have been spying on virtually everyone’s private phone calls and emails; they even have a program that can remotely activate your computer’s built-in video camera and watch you inside your office or bedroom — whether your computer is turned on or off. (Yes, I have a post-it taped over the camera on my laptop as I write this, and it will remain there. You start to feel sort of paranoid after watching this film.)

As depicted in the film, Ed Snowden is a quiet, soft-spoken young man without the outgoing charisma we normally associate with courage and heroism. He doesn’t have enough personality to engage potential operatives at a cocktail party, although he does come alive when he’s with his girlfriend, amateur photographer, pole dancer, and left-leaning semi-activist Lindsay Mills (Shailene Woodley). Her glowing smile and natural charisma, and her unrestrained love for him, help us to care about him too. Their relationship also serves to convince us that his motives are pure: how could he leave this charming young girl behind, unless he truly believed in the rightness of what he was doing? On the other hand, could her left-leaning politics have influenced his actions more than his own patriotism did? She left the United States to join him in Russia. For love or politics? We don’t know, and nothing in the film suggests that she is anything but innocent.

They even have a program that can remotely activate your computer’s built-in video camera and watch you inside your office or bedroom — whether your computer is turned on or off.

At 134 minutes, Snowden is about 30 minutes too long. The scenes that show what the CIA and NSA were doing, and how, are heavy on technical jargon (although I suspect they worked hard to simplify it), and we spend a lot of time watching the characters watch screens. But the second half of the film, especially the part beginning when Snowden realizes that he has to blow the whistle in order to protect the public, is tense and exciting. The final scene, when Edward Snowden himself appears, is thrilling. I wanted to applaud him in the theater. (We are hoping to bring him to FreedomFest this year through Skype.)

Both these films present interesting character studies of unlikely heroes — men who never craved the limelight or set out to change the world but rose to greatness when presented with crises that only they could address. Sully is the better film, but Snowden is worth seeing as well.


Editor's Note: Reviews of "Sully," directed by Clint Eastwood. FilmNation Entertainment, 2016, 96 minutes; and "Snowden," directed by Oliver Stone. Endgame Entertainment, 2016, 134 minutes.



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Once Again, Spontaneous Order Beats the Dead Hand of Statism

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A number of recent reports on American energy illustrate anew the power of markets to deliver prosperity — rapidly — and the impotence of government to do the same. In short, spontaneous order has once again accomplished what the dead hand of statism could not.

The first report concerns the unsurprising demise of yet another solar power company. SunEdison is filing for bankruptcy, after seeing its stock price drop a whopping 98% in less than a year. Wall Street mavens such as David Einhorn (billionaire owner of a hedge fund called Greenlight Capital) and Leon Cooperman (of Omega Advisors) had considered the company a sure bet, but it proved to be a sure loser.

SunEdison is just one of an endless stream of solar companies that started, during the reign of the Obama administration, with the promise of giving us cheap power while healing the planet of global warming. Typically, they began with direct or indirect government subsidies — only to fail miserably.

Other stories tell us of better news. Just two months ago — in a nice piece of negotiation for which he received only vilification from the pestilent swarm of populist talk show hosts — Speaker of the House Paul Ryan (R-WI) reached a budget deal with the administration that once again (after a ban of biblical proportions — 40 years) allowed the exportation of domestically produced oil abroad. I have argued before that this is a major geopolitical game changer. We can now sell the fruits of our petroleum fracking revolution on the world market, thus ending, once and for all, the power of the oil cartel (OPEC) to gouge the rest of the world. Oil prices can now be kept low indefinitely. If Russia or the OPEC thieves try to cut back on production to extort more money from Europe and Asia in the form of higher prices, or if the demand for oil goes up because of a future worldwide economic boom, the Great American Frackers can just drill more wells, with no shortage for the foreseeable future.

SunEdison is just one of an endless stream of solar companies that started with the promise of giving us cheap power while healing the planet of global warming, only to fail miserably.

Less remarked upon, but no less remarkable, has been the flourishing of American natural gas production — driven again by the fracking companies. The miracle of fracking has dramatically reduced the prices of domestic natural gas — in fact, driven the price of natural gas to the lowest it has been in 17 years. Moreover, North America’s natural gas production is now about 450% greater than Africa’s, 80% greater than the Asian Pacific’s, 50% greater than the Middle East’s, and only 5% smaller than Eurasia’s; and it is set to grow apace over the next few years.

Why? Because the domestic price is now so low that American energy companies find it attractive to liquefy natural gas and ship it abroad. And that’s what is starting to happen. For example, just last month, the first shipment of American produced natural gas — ethane — left the Marcus Hook terminal in Philadelphia, headed for Europe. The purchaser of the liquefied natural gas (LNG), Swiss petrochemical company Ineos, plans to use it in its Norway facility. (Ethane is primarily a feedstock for plastic production. Methane is what is typically used for heating and power generation.) Given current trends, the US could become the world’s third largest exporter of LNG, right behind Qatar and Australia — in just four years.

Now consider the Cheniere Energy company’s Sabine Pass facility (located on the Gulf Coast), which aims to be fully operational in less than three years. By itself alone it will be able to export 3.5 billion cubic feet (Bcf) per day.

US producers have a key cost advantage: they can reconfigure import facilities to become export facilities relatively inexpensively. So as domestically produced natural gas replaces all imports, we can seamlessly start sending LNG abroad. The US Department of Energy has approved projects that will increase the potential exports of LNG to 10 Bcf per day, and is swamped with new applications that if granted could boost those exports another 35 Bcf per day. That is nearly the size of today’s global market.

Of course, already some people have raised worries that by exporting so much of our domestically produced natural gas, our own consumers will face shortages and see domestic prices soar. This is doubtful. For one thing, the US already has something like four trillion cubic feet (Tcf) of natural gas stored underground, and produces 30 Tcf a year. So even if the Department of Energy approves all the projects under submission, the effect on domestic prices will be limited. One recent estimate by the US Energy Information Administration is that an increase of 12 to 20 Bcf per day in exports would raise domestic natural gas prices by 4–11% per million Btu.

The miracle of fracking has driven the price of natural gas to the lowest it has been in 17 years.

Making the chance that increasing exports will raise domestic prices of natural gas even more remote is the fact that, with the colossal amount of American shale deposits of natural gas — not to mention our immense amount of conventional supplies — the number of fracking operations will grow dramatically as our exports increase. That will increase domestic supplies as well, and hold their price down. Moreover, because building out export facilities is costly, the rate of increase will be relatively tame.

Still, the excellent economic news is that we will have another great export market to exploit, providing hundreds of thousands of high-paying blue-collar jobs all over this country — jobs sorely needed, as our older manufacturing jobs are automated away. For example, it is estimated that America will need 100 more LNG tankers over the next 15 years, as our exports surge ahead.

American natural gas exports will soon be headed to Asia as well as Europe. China is increasing its own production of natural gas, in part because the pollution caused by all its coal-fired power plants is making city life intolerable, but developing its own shale resources is proving difficult. Japan is perennially in need of natural gas (and petroleum as well). The export route to Asia will be dramatically improved by the $5.3 billion expansion of the Panama Canal just being completed. This will cut an average of 11 days off the time it takes to ship oil from the Gulf Coast to Asia.

This is also great geopolitical news. We will be able to supply natural gas to Europe, which right now depends upon the thoroughly corrupt and evil Russian company Gazprom. Russia has shown a vicious propensity to price-gouge when it can, and it uses its supply as an instrument of state power in the revanchist quest to reestablish the Soviet Empire. That quest will be sharply curtailed by American natural gas exports to Europe.

The prospect of American natural gas liberating Poland, the Baltic states, and other formerly Soviet-controlled countries from Russian hegemony was the subject of another recent report. It notes that several countries are eagerly awaiting buying LNG from the United States, and some — such as Poland — are building import terminals in anticipation that American shipments will increase. Russia supplies about a third of all Europe’s natural gas. Some of the former Soviet countries (such as Bulgaria) get 90% of their supplies from Russia.

As Lithuania’s energy minister has said, “In Russia, gas always goes together with politics.” But he added, “Russia is extremely aggressive in gas pricing and the arrival of US LNG will change that.” Goldman Sachs estimates that the arrival of American LNG should drop the price by one-quarter in just two years.

The US will have another great export market to exploit, providing hundreds of thousands of high-paying blue-collar jobs all over this country.

Russia feigns unconcern about the arrival of American LNG. Alexander Medvedev, Gazprom’s deputy chairman, discreetly claimed, “We are very relaxed about US LNG, though very attentive.” Analyst Trevor Sikorski explains that while Russian gas currently costs about $4.60 per million Btus, American gas will cost about $3.60 (when the cost of shipping is included). So Russia could “chase out” the US (as Sikorski suggests) by, say, lowering its price to $2. But I think the Russians are merely whistling past the graveyard. For one thing, Russia has for several years funded European environmentalist organizations, enabling them to propagandize against fracking. If it were so easy for the Russians to undercut the price of gas produced by fracking, why does Russia so oppose it in other countries?

Second, there is a flaw in the argument that Russia can just chase the US out of the European market by dumping its own natural gas at (say) half what it currently charges. The problem with that argument is — against all “dumping” arguments — that the Americans would stay out only as long as Russia incurred that 50% lower revenue stream. But the reduction would severely limit Russia’s ability to continue upgrading its military and taking over more of Eastern Europe. Worse for Russia, the minute it decided to raise its prices back up, American oil companies would need only a day to start shipments to Europe, and only a couple of weeks for the oil to arrive.

It seems likely that Russia will simply lower its prices to match or slightly undercut the American pricing — say, pricing its natural gas at $3.50. But this will still be quite damaging to Russia’s revanchist goals, and therefore good news for the rest of us. Russia will lose 20–25% of its current revenue stream — a major hit indeed. More importantly, even if Russia charges approximately what American companies do, the former Soviet countries will probably still order American gas, the better to keep their freedom from Russian domination.

In sum, American LNG may forever free the Eastern Europeans from Russia’s paws. This is reason for rejoicing.

But there are two reasons for not rejoicing. First, both candidates for the Democratic nomination for president — Clinton and Sanders — have said that they utterly oppose fracking. No doubt whichever one wins the nomination will be lavishly, if covertly, funded by the Russians.

Worse, the two leading candidates for the Republican nomination — Trump and Cruz — would almost certainly lose to the Democrat in the general election. The Republicans are hellbent on losing the best shot they have had to take back the White House in eight years. Go figure that out.




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Enemy of My Enemy

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Fracking Ferment and Malthusian Myths

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The revolution in American oil and natural gas production brought about by fracking continues to roar. Recently, the price of oil dropped to about $65 per barrel, and natural gas is still hovering around record low prices. In fact, as an article in Bloomberg suggests, it is entirely possible that oil may sink to $40 in the near future.

All of this was unthinkable before the last couple of years, but thanks to the miracle of fracking, it is becoming reality. It is Schumpeterian creative destruction with a vengeance. But as the theory of creative destruction emphasizes, revolutionary innovations typically bring deep disruptions in their wakes. And as a flood of recent reports illustrate, fracking is indeed a disruptive revolution.

On one side are the thieves that want to cut back on production to drive the world price for oil back to its recent high levels.

Let’s start at the level of geopolitics. With barely controlled glee I note a recent Wall Street Journal report that our fracking energy renaissance is fracturing OPEC. You remember OPEC, the cartel that drove our economy to the wall with the “oil shock” of the 1970s. As oil prices continue to fall, a split has developed among OPEC states.

On one side are the thieves that want to cut back on production to drive the world price for oil back to its recent high levels. Venezuela is the leader of this fraction, and for good reason. Its particular brand of socialism has devastated its economy (as socialism is wont to do), and it has been living off its oil imports. Well, it can’t now, and as the aforementioned Bloomberg story notes, the arrogant Mini-Me of Marxist Cuba is running out of hard currency and may have to devalue its money, raise domestic gasoline prices, cut oil subsidies to other leftist states (such as Cuba), and cut imports of consumer goods. In this socialist hell, crime is exploding as quickly as inflation, and the consumer goods shortages are growing as quickly as the rioting is.

On the other side of the OPEC rift are countries such as Kuwait and Saudi Arabia, which oppose limits to production. These countries have indicated that they will respond to the drop in prices by exporting more oil. They appear to have several interlocking motives.

First, they are desperate to hold on to their worldwide market shares. The Saudis have been pushing existing customers — especially European ones — to commit to continued purchases of Saudi oil. Clearly, the prospect of the US loosening its ludicrous laws restricting the export of its own oil (which would put us in direct competition with the vile OPEC countries) is concentrating Saudi minds wonderfully. Moreover, Iraq has cut its prices to its existing European and Asian customers, desperately hoping to hold onto its global share.

Second, as a recent UK Telegraph piece explores, the Saudis clearly want to stall if not snuff out the fracking revolution. They want to force US shale production down from the current million barrels a day (bpd) to 500,000 bpd. As the article note, the last eight years of fracking have seen the US cut net its oil imports by 8.7 million bpd, the equivalent of what it was importing from Saudi Arabia and Nigeria, combined.

We now know for sure that we have virtually endless supplies of oil and natural gas right under our own soil, resources that can profitably be extracted at prices from $40 to $80 per barrel.

To what extent the Saudis and other OPEC countries can really contain America’s frolicking frackers is a matter for considerable conjecture. As another report points out, the International Energy Agency notes that only 4% of fracked oil production requires that the market hit $80 a barrel if the production is to be profitable. Most of the oil from the Bakken field (the most productive field currently being exploited in America) would still be profitable even if the price were $42 a barrel. At that price, yes, American frackers would feel pain, but nothing like the pain the Russia and the OPEC states would feel.

As Ambrose Evans-Pritchard recently pointed out, the Saudis are playing a dangerous game: “A deep slump in prices might equally heighten geostrategic turmoil across the broader Middle East and boomerang against the Gulf’s petro-sheikhdoms before it inflicts a knock-out blow on US rivals.” He quotes Harold Hamm, the main genius behind fracking, as saying the most productive shale field is still profitable at $28 per barrel. And as Evans-Pritchard adds, quoting Citigroup, the break-even cost for oil is $161 for Venezuela, $160 for Yemen, $132 for Algeria, $131 for Iran, $126 for Nigeria, $125 for Bahrain, $111 for Iraq, $105 for Russia, and $98 for Saudi Arabia.

Remember this: even if all American frackers had to halt production tomorrow (say, if oil dropped to $20 per barrel), the shale fields, along with the technology now well developed to exploit those reserves, would remain, however long the Saudis and everyone else tried to keep the price low. We now know for sure that we have virtually endless supplies of oil and natural gas right under our own soil, resources that can profitably be extracted, with even today’s technology, at prices from $40 to $80 per barrel. As the technology develops, that strike price will only go down. Any possible “knock-out blow” would knock us out only momentarily.

The third reason the Saudis and other Arab states are so desperate to keep their revenues at present levels — even if it means precipitously pumping down their known reserves — is that the autocrats in charge have been buying their citizens’ passivity with lavish welfare spending. If that ever gets cut, the citizens would probably rise up and cut the heads off the pompous princes and egotistic emirs who have so greedily gorged themselves on the wealth of their lands. As the Wall Street Journal notes, Saudi Arabia needs oil to be at $99 a barrel to balance its budget. So the current low price of oil is making the Saudis use assets from their reserves of foreign currency — which, while extensive, are not inexhaustible.

Another geopolitical change that fracking has introduced involves the Mexican oil industry. A piece in a recent WSJ notes that Mexico is foreseeing a rebirth of its own oil industry, with the aid of US technology and investment. The new president of Mexico, Enrique Peña Nieto, did something last year that no president before him had done, since Mexico nationalized its oil industry 70 years ago. Nieto got the Mexican Congress to pass a law (actually, to change the nation’s constitution) allowing private industry, including foreign industry, to help develop new production. Until now, Mexico has jealously guarded its industry, out of an excess of nationalism. While enjoying its national pride, it witnessed a decline in national revenues; but with the rise of fracking as a tool to get old wells producing again, it now anticipates a resurgence of a lucrative industry. The national oil company, Petroleos Mexicanos (Pemex), doesn’t have any expertise in fracking, but US and other countries surely do. As Joel Vazquez, CEO of DCM, a Mexican-Canadian drilling company, put it, “A boom is coming. Not a week goes by without an oil company contacting us asking about making a joint venture, or saying they’re interested in investing here.”

The UK, like Germany, is discovering that so-called Green energy is grotesquely costly.

Mexico will shortly start auctioning off leases for oil exploration. One hundred sixty-nine blocks of Mexican land will be opened for outside development, with about a third of them within 70 miles of Tampico. Most will require fracking and horizontal drilling. It looks as if BP and Royal Dutch Shell will go after the deep-water sites, while Canadian company Pacific Rubiales Energy and a new Mexican startup will focus on the shallow-water and mature onshore sites. Mexico projects an increase of half a million BPD over the next four years.

Another geopolitical impact of our fracking revolution on other countries is the subject of another recent Journal story. The surge in US oil and natural gas production — we now produce more oil and natural gas than do either Russia or Saudi Arabia — is making the British rethink their energy policy.

British billionaire James Ratcliffe, head of the petrochemical giant Ineos, is urging that the UK push fracking. To overcome NIMBY (not-in-my-backyard, anti-development sentiment), the resourceful Ratcliffe plans to offer a generous 4% royalty to property owners and a 2% royalty to municipalities that allow his company to drill fracking wells on their land.

The logic for the Brits — a most logical people, indeed — is clear. Fracking has lifted American production of liquid petroleum products over the past ten years by nearly 60% (from 7.3 million to 11.5 million BPD) and has lifted natural gas production by 30%. But the UK’s own production (of its North Sea fields by conventional drilling) has plummeted, resulting in rapidly growing petroleum imports.

The UK, like Germany, is discovering that so-called Green energy costs a lot of green; in fact, it is grotesquely costly. Because of a Green scheme, one of the UK’s biggest power plants (one that supplies 7% of the country’s power) is converting to wood pellets imported from the American South. But compared to natural gas, wood is immensely productive of carbon emissions. And the switch to wood is going to increase the electricity rate consumers have to pay by — 100%!

Of course, the prescient Ratcliffe is already facing opposition from the same fatuous fools — i.e., environmentalists — that our own energy heroes have had to face. But my guess is that the Brits, after seeing their power and tax bills rise, will see the light and finally favor fracking.

Doubtless, however, the biggest geopolitical impact of the American fracking revolution is on Russia. This is leading to what can best be termed “the Russian rage.” The Putin regime is clearly distraught about the fact that our oil and natural gas renaissance is eclipsing Russia as an energy superpower. A number of articles explore aspects of this phenomenon.

It is now obvious why Putin has seized Crimea and parts of eastern Ukraine: he wants to stop Ukrainians from becoming another major competitor in exporting natural gas to Europe.

One of them concerns the recent hubristic boast by the Russian oil tycoon and Putin puppet Leonid Fedun that OPEC’s decision to keep pumping oil and let the price drop will ensure the crash of the US shale industry. Fedun prophesied, “In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again.… The shale boom is on a par with the dot-com boom.”

Fedun’s claim was that when oil breaks $70 per barrel, most American fracking companies will become unprofitable and collapse, or will do so when their existing hedges (prior contracts to sell their crude oil at $90 per barrel) expire. But he made this boast when oil was still over $70 per barrel. We certainly don’t see any American fracking companies hitting the wall even with oil now in the mid-$60 range, and as indicated by the Evans-Pritchard article discussed earlier, other exporters believe most production from the Bakken field would remain profitable in the range of $40 or even lower.

Also amusing was an article in the Russian regime’s propaganda newspaper Russia Beyond the Headlines by Pat Szymczak. She writes about Ukraine, the country that the dictator Putin has invaded repeatedly and dismembered. Her argument is that Ukraine has tremendous shale gas reserves — the US Energy Information Administration estimates them at 42 trillion cubic feet, the third largest in Europe; and Ukraine’s Black Sea oil potential might exceed that of the North Sea. But these resources haven’t been developed, she claims — with evident crocodile tears! — because in the 20 years since it became independent, Ukraine has had only corrupt oligarchical regimes. And recently, when Shell Oil drilled some exploratory wells, fighting amazingly and mysteriously broke out nearby between the government and Russian separatists. This forced Shell to close out operations.

With smarmy alarm, Szymczak warns that, “Ukraine’s inability to get its act together and take advantage of its assets has created an opening likely to be filled by North America. The US has seemingly overnight moved from being an energy importer to a potentially massive exporter, at a time when Russia is struggling to maintain its position in the midst of a production decline in its prolific West Siberian fields.”

She adds that the US may be planning (as part of the sanctions) to divert to Europe some of its diesel exports currently bound for Latin America, and that the EU is apparently pushing the US to end its current ban on crude oil exports (about which more below). And one of Spain’s largest power companies has just signed a 20-year deal to import $5.6 billion in American liquefied natural gas.

Of course, this article is hilarious on many levels. It is uproariously hypocritical that this Russian propagandist should point to Ukraine as a corrupt oligarchy. What is Putin’s regime if not a corrupt oligarchy? And who does Szymczak think caused fighting to break out close enough to the Shell installation to force it to shut down, if not Putin himself? The Putin regime is funding and arming the ethnic Russian separatists. It is now obvious why Putin has seized Crimea and parts of eastern Ukraine: he wants to stop Ukrainians not only from achieving oil independence but also from becoming another major competitor in exporting natural gas to Europe.

Indeed, yet another recent piece — a major New York Times article on the wave of anti-fracking protests suddenly sweeping Eastern Europe — touches on the attempt by Russia to stop Western oil companies from fracking development in Eastern Europe. The article recounts what happened in Romania, when Chevron leased land last year to explore for natural gas. Immediately, a large group of violent “protestors” (read: Putinesque paramilitary provocateurs) showed up and started fighting with the local police. The provocateurs — obviously well-funded — were able to portray the mayor who allowed Chevron in as a traitor to rural Romanians and a sellout to American capitalism. The protestors temporarily made him flee.

Reflecting on the fact that his town never before had demonstrations, and that the moment Chevron showed up, so did a horde of vociferous demonstrators, the mayor concludes that they were a rent-a-mob paid by Russia’s state-controlled oil company, Gazprom. (The Romanian prime minister agrees with the mayor’s assessment). The protestors are, in other words, Putin’s posse, aimed at keeping Western energy companies out of Eastern Europe, which is the former Soviet Empire Putin is eager to reclaim.

What is Putin? He is a megalomaniacal narcissist who wants to be another Stalin.

The story notes that this view — that Russia’s oil arm is funding and fielding anti-fracking armies — is shared by Lithuanian authorities, who saw Chevron chased out of their country by organized violent protestors. The departing secretary-general of NATO, Anders Rasmussen, has voiced the same view: “Russia, as part of their sophisticated . . . disinformation operations, engaged actively with so-called nongovernmental organizations — environmental organizations working against shale gas — to maintain dependence on imported Russian gas.” The statement was echoed by Romanian industrialist Iulian Iancu, who sagely observed, “It is crucial for Russia to keep this energy dependence. It is playing a dirty game.” The rent-a-mob anti-fracking “protests” started three years ago in Bulgaria, which went so far as to ban fracking and cancel Chevron’s licenses.

Of course, both Gazprom and the so-called environmentalist groups heatedly deny that there is Putinesque collusion in all this. And Gazprom exec Alexander Medvedev adds the friendly warning to Europeans that they cannot possibly have a fracking revolution similar to America’s, because of the differences in geology and population density.

The NYT article’s author (Andrew Higgins) gives this view some credibility, pointing out that test wells have proven disappointing in Poland, Romania, and Ukraine. But one might reply that these were only a few wells, all drilled by Chevron, hardly the leader in the art of fracking. My advice to these countries is to ask Harold Hamm, the principal genius behind the fracking revolution, to come out and take a look.

What reasons are there to conclude that the Putin regime is behind these seemingly “spontaneous” demonstrations? Many, I would suggest. To start with, as the prescient Anca-Maria Cernea (leader of a Romanian nationalist group) noted, these “spontaneous” protests involved a coordination of groups that have no natural affinity or historical alliance, such as radical socialists and Eastern Orthodox clergy. Furthermore, the state-controlled Russian “news” media blanketed the airwaves with coverage of the protests over and over, along with warnings about ecological disasters caused by fracking.

Additional evidence is the obvious corporate interest of Gazprom. The Romans bade us ask, “Qui bono?” (“For whose benefit?”). If you want to ask why something is happening, ask in whose self-interest it lies. If Chevron (say) develops Eastern European shale fields, not only will Gazprom (and the Russian regime that controls it) lose out on that market. Eastern Europe could easily become the dominant supplier of energy to Western Europe, displacing Gazprom. Oh, and this could unify Eastern and Western Europe economically, putting the former out of reach by revanchist Russia.

Despite assurances from many of its backers that wind is so efficient that its subsidies would wither away after a few years, the subsidies are proving eternal.

Tied in with this point is another clue — a dog that isn’t barking. By this I mean that while Gazprom is itself exploring (through its Serbian subsidiary Nis) both Serbian and Romanian shale fields, there have been no demonstrations opposing Gazprom. The demonstrating dogs know who their master is. They can smell him even in the dark.

Further, as I noted in a piece not long ago, it’s old news that petro countries fund seemingly independent environmentalists to help stop America’s fracking development. The anti-fracking propaganda movie Promised Land was funded in large part by the United Arab Emirates. And Project Veritas investigative reporter James O’Keefe recently caught on tape a couple of Hollywood producers (Josh and Rebecca Tickell) and a couple of environmentalist activist actors saying they would be happy to work with Middle Eastern petro sheiks.

If American Green ideologues are willing to collaborate with those who want to keep their country energy dependent, why would anyone assume that Eastern European Green ideologues — many of whom were communists working to keep their countries part of the Soviet Empire before it collapsed — are unwilling to see their countries energy dependent? As Joan Rivers would say, “Oh, grow up!”

Finally, who controls Gazprom? Putin. What is Putin? He is a megalomaniacal narcissist who wants to be another Stalin. And what is Putin’s background? He was a career KGB agent who was trained in disinformation campaigns and in the suborning of foreign citizens to work against their own countries. Faced with the threat of the US — which he believed he had neutered because he cowed Obama and Hillary Clinton — becoming the dominant petro-power around the world, enabling the Eastern European countries to be energy independent from Russia, Putin, it is reasonable to assume, would use the tools he was trained to use.

And threatened the tyrant is. As political scientist Ian Bremmer put it recently, Putin has been “backed into a corner” by the drop in prices fracking has caused, “leaving him little option but to continue his aggression toward Ukraine and confrontation with the West.” Bremmer added, “I think that lower oil prices simply squeeze him harder, pushing him farther into a corner. He feels he has to fight as a consequence.”

The theme of Russian vulnerability is echoed by Allan von Mehren, chief analyst at Danske Banke, who said, “Russia in particular seems vulnerable [to dropping oil prices].” He notes that the big decline in oil prices in 1997–98 was a major cause of the subsequent Russian default. The reason for this vulnerability is obvious. Oil and natural gas constitute almost 70% of Russia’s exports, and fund half the country’s federal budget. The country has had to spend $90 billion of its foreign currency reserves to stop the utter collapse of the ruble, which has already dropped in value by over a third.

In sum, as fracking flourishes, look for Russia to become even more aggressive.

Turning from geopolitics to domestic policy, a recent WSJ article explains how the fracking revolution is forcing a long-needed change in America’s ban on oil exports.

Yes, believe it or not, since the Carter era of the 1970s we have restricted the export of our own domestic crude, under the delusion that by restricting the market that our domestic oil producers could sell to we would induce them — to drill for more. Despite calls from major oil companies such as Exxon Mobil for the government to end the moratorium, politicians have been reluctant to deal with populist fears that allowing our companies to sell into an international market will somehow drive up our own prices — as if there were just a fixed amount of oil in this country, and if we sold even a drop of it abroad, our own stash would be diminished.

As the fracking revolution has shown, there is no foreseeable limit to how much oil we can produce. But some oil companies are finding ways around the benighted ban. For example, BHP Billiton has made a deal to sell two thirds of a million barrels of “minimally processed” ultralight crude oil abroad without formal approval from the feds. It is selling the petroleum to the Swiss trading firm Vitol. This move — which is called “self-classification” — is likely to open the gate for many other companies to enter.

The amount of fossil fuel that lies beneath our feet is essentially infinite, and if it ever did reach a limit centuries from now, substitutions would be found.

The idea is clever. Under the decades-old law, the US allows the exporting of refined petroleum fuels (diesel and gasoline) but not of crude oil itself. However, some companies (such as Enterprise Product Partners and Pioneer Natural Resources) have prior governmental approval to export minimally processed oil (called “condensate”). BHP is classifying very lightly processed crude as “condensate,” exempt from the law. BHP is doing its light processing without explicit government approval, although the Commerce Department has been quiet about the practice.

It would be great if more companies followed BHP’s lead. That would encourage more drilling in the long term, and help stymie Saudi Arabia’s efforts to throttle our fracking industry, by making sure that our production can be sold abroad whenever we have an excess here. Of course, it would be even better if we just removed the ban on crude oil exports altogether.

As for the crony, corrupt Green energy industries (the so-called renewable energy producers, especially wind and solar), fracking is pushing them to the wall. Consider wind power. As another recent WSJ piece explains, American wind power has been subsidized for over two decades. Despite assurances from many of its backers that wind is so efficient that its subsidies would wither away after a few years — like the state in the old Soviet Union! — the subsidies are proving eternal. Wind power’s subsidy is a taxpayer gift to wind power producers. This subsidy handed these rentseekers over $7.3 billion since 2007 alone, and it will pay them an additional $2.4 billion next year.

With all subsidies accounted for, the Institute for Energy Research reckons that in 2010 (the last year for which conclusive data are available) wind power received $56.29 per kwh in subsidies, compared with only $3.14 for nuclear power and a meager $0.64 for natural-gas produced electric power. That is, wind power sucked up nearly 90 times the subsidies that natural gas power did.

In short, wind power has managed to shred billions of taxpayer dollars as quickly as it has shredded millions of birds. But this subsidy expired at the end of last year, and wind power producers are desperately trying to renew it before the Senate falls into Republican hands. It looks quite possible that in the face of plummeting oil and natural gas prices, the incoming Congress will end the subsidy once and for all. At which point, wind power will be — well, gone with the wind.

Also worth noting is a WSJ article reporting another possible target for fracking’s creative destruction. I refer to the (again) heavily taxpayer-subsidized electric vehicle (EV) industry. Its only real success has been Tesla, whose zippy, stylish cars have sold well compared to all other EVs. But as gasoline prices have dropped, so has Tesla’s stock. It’s down about 8% recently (after a dramatic rise during the last couple of years).

If oil prices remain low, or fall even further, the EV market will be threatened. And if the EPA manages to kill the coal industry, thus dramatically raising costs of electricity, the EV market will become moribund. It only exists now because of those enormous taxpayer subsidies, and it is unclear how much longer Congress will keep them.

As the Journal noted, we can already guess what the advocates of EVs and the other Green companies will start pushing for if gasoline prices continue to drop: massive new taxes on gasoline to force consumers to go Green. Elon Musk (CEO of Tesla) has already proposed taxing gasoline to make it $10 per gallon at the pump — not from self-interest, you understand, but only from a dispassionate concern for the ecosystem. He thus joins Barack Obama, Nancy Pelosi, ex-GM exec Bob Lutz, and others calling for steep gasoline taxes so that their preferred Green schemes (EVs, ethanol, biodiesel, etc.) will survive. We will see if the new Congress complies with their proposals. I rather doubt it will.

People aren’t bacteria. People consume resources, but they also produce them.

Lastly, however, I want to mention a non-material but very important effect of the fracking revolution: the creative destruction of a myth. The myth is the notion of “peak oil.” That phrase comes from the idea that any oil-producing area (be it a field, a state, or a country) will eventually reach a peak of production, then tail off, making something like a statistical bell curve.

The concept of peak oil has been around since the start of the oil era. Eminent energy analyst Daniel Yergin quotes the state geologist of Pennsylvania in 1885 as predicting that the amazing early production of petroleum was only a “temporary and vanishing phenomenon — one which young men will live to see come to its natural end.” But the notion was given a scientific patina by M. Kind Hubbard, a geologist for Shell Oil company, in an influential paper of 1956, predicting that American aggregate oil production would peak in the early 1970s, then decline forever after. It appeared that Hubbard’s theory was empirically confirmed when America’s oil production hit a peak of slightly less than 10 million barrels per day (bpd) in 1974, and started declining.

It is now clear that this theory is about to be refuted yet again. Fracking has pushed our production of oil past Saudi Arabia’s current level of 9.7 million bpd. And the International Energy Agency projects that we will overtake Russia’s production of 10.3 million bpd next year.

People still keep predicting peak oil — as Paul Krugman did in 2010, when he crowed that “peak oil has arrived.” With fracking, indeed, we will reach another peak; but very likely someone will come up with another technological improvement, maybe “smacking.” The amount of fossil fuel that lies beneath our feet is, almost surely, essentially infinite, and if it ever did reach a limit centuries from now, substitutions would be found — perhaps from the vast spread of methane hydrates that lie on the ocean floors.

The theory of peak oil is a myth, and it is just a special case of a bigger myth — Malthus’ myth. Malthus held that, sustained by resources, the members of any living species will incrp/prsquo;s federal budget. The country has had to spend $90 billion of its foreign currency reserves to stop the utter collapse of the ruble, which has already dropped in value by over a third.ldquo;minimally processedease their numbers exponentially, so that no matter how plentiful the resources, the species will soon exhaust it. So he held that while people may increase agricultural production, it will only increase arithmetically, while the population will increase exponentially, resulting sooner or later in mass starvation.

But as economist Julian Simon argued, people aren’t bacteria. People consume resources, but they also produce them. People have mouths, but they also have hands, minds, and hearts. They can find new ways of getting any resource, and new substitutions for it also, for time without end.




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