Sunday, February 28, 2010

Comment 312


One of the commenters said there was no difference between the head of Goldman Sachs and Madoff. There is a big difference. Madoff was an unsophisticated lifeguard and Hofstra graduate. Goldman is lawyered up with the best of Harvard and Yale law schools. Madoff just took the money as his own. He was unsophisticated. What the big banks are doing is figuring out the law and figuring out how to steal and cheat right up to the line that would put them in jail. If that means changing the law in their favor they do it by paying off the congress. We often see people say tax avoidance is fine but tax evasion is illegal. The difference is arbitrary. The concept is to pay money to support government and societal functions. Tax avoidance is avoiding those obligations using every legal trick possible. Evasion is to cross that line. Both are morally indefensible. Kind of like saying oral sex is not cheating on ones wife.Had Madoff lawyered up with the best of Harvard Law School five years before his scheme blew up...they would have restructured the whole thing and he would have been fine....He would be honored as one of the great men of Wall Street. He was always an outsider, though, and he did not walk among the Harvard anointed. Another example is provided by another Harvard attorney who defended OJ so that he was "legally innocent" of a crime although morally and from a common sense standpoint we know he committed it.The real criminals here are the legal minds who think that just because something is "legal" it is morally supportable. It may be legal to set up these swaps etc. It may be legal to know how bad the situation is before the general public does. It may be legal to sell the bonds short in another division of the bank based on this inside knowledge. All of this may be legal but is it moral? Betting in poker after looking at the other players cards is perhaps legal but is it moral. In the Wild West folks who did that were shot. I often wonder why the jobless and suffering don't mob the headquarters of Goldman Sachs....perhaps they will....and Goldman is just the symbol....the leader of this legal/financial monstrosity and far from the only culprit. Of course with 400 lawyers advised by 4000 lawyer/lobbyists running this country it is hard to imagine that this will ever get better.

Saturday, February 27, 2010

March, April and May Heating Degree Days


(c) 2010 F. Bruce Abel


Get ready for spring!




Thursday, February 25, 2010

Front Page -- II

(c) 2010 F. Bruce Abel

And read the comments to this article as well. As long as this derivative exists all government attempts to bail out the world will fail.


Banks Bet Greece Defaults on Debt They Helped Hide

By NELSON D. SCHWARTZ and ERIC DASH
Published: February 24, 2010
Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin.
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Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.
These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.
“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.
As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.
Last September, the company, the Markit Group of London, introduced the iTraxx SovX Western Europe index, which is based on such swaps and let traders gamble on Greece shortly before the crisis. Such derivatives have assumed an outsize role in Europe’s debt crisis, as traders focus on their daily gyrations.
A result, some traders say, is a vicious circle. As banks and others rush into these swaps, the cost of insuring Greece’s debt rises. Alarmed by that bearish signal, bond investors then shun Greek bonds, making it harder for the country to borrow. That, in turn, adds to the anxiety — and the whole thing starts over again.
On trading desks, there is fierce debate over what exactly is behind Greece’s recent troubles. Some traders say swaps have made the problem worse, while others say Greece’s deteriorating finances are to blame.
“This is a country that is issuing paper into a weakening market,” said Ashish Shah, co-head of credit strategy at Barclays Capital, referring to Greece’s need for continual borrowing.
But while some European leaders have blamed financial speculators in general for worsening the crisis, the French finance minister, Christine Lagarde, last week singled out credit-default swaps. Ms. Lagarde said a few players dominated this arena, which she said needed tighter regulation.
Trading in Markit’s sovereign credit derivative index soared this year, helping to drive up the cost of insuring Greek debt, and, in turn, what Athens must pay to borrow money. The cost of insuring $10 million of Greek bonds, for instance, rose to more than $400,000 in February, up from $282,000 in early January.
On several days in late January and early February, as demand for swaps protection soared, investors in Greek bonds fled the market, raising doubts about whether Greece could find buyers for coming bond offerings.
“It’s the blind leading the blind,” said Sylvain R. Raynes, an expert in structured finance at R&R Consulting in New York. “The iTraxx SovX did not create the situation, but it has exacerbated it.”
The Markit index is made up of the 15 most heavily traded credit-default swaps in Europe and covers other troubled economies like Portugal and Spain. And as worries about those countries’ debts moved markets around the world in February, trading in the index exploded.
In February, demand for such index contracts hit $109.3 billion, up from $52.9 billion in January. Markit collects a flat fee by licensing brokers to trade the index.
European banks including the Swiss giants Credit Suisse and UBS, France’s Société Générale and BNP Paribas and Deutsche Bank of Germany have been among the heaviest buyers of swaps insurance, according to traders and bankers who asked for anonymity because they were not authorized to comment publicly.
That is because those countries are the most exposed. French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion, according to the Bank for International Settlements. German banks’ exposure stands at $43.2 billion.
Trading in credit-default swaps linked only to Greek debt has also surged, but is still smaller than the country’s actual debt load of $300 billion. The overall amount of insurance on Greek debt hit $85 billion in February, up from $38 billion a year ago, according to the Depository Trust and Clearing Corporation, which tracks swaps trading.
Markit says its index is a tool for traders, rather than a market driver.
In a statement, Markit said its index was started to satisfy market demand, and had improved the ability of traders to hedge their risks. The index and similar products, it added, actually make it easier for buyers and sellers to gauge prices for instruments that are traded among players over the counter, rather than on exchanges.
“These indices have helped bring transparency to the sovereign C.D.S. market,” Markit said. “Prior to their creation, there was no established benchmark index enabling investors to track the performance of segments of the sovereign C.D.S. market.”
Some money managers say trading in Greek swaps alone, not the broader index, is the problem.
“It’s like the tail wagging the dog,” said Markus Krygier, senior portfolio manager at Amundi Asset Management in London, which has $40 billion in global fixed-income assets. “There is a knock-on effect, as underlying positions begin to seem riskier, triggering risk models and forcing portfolio managers to sell Greek bonds.”
If that sounds familiar, it should. Critics of these instruments contend swaps contributed to the fall of Lehman Brothers. But until recently, there was little demand for insurance on government debt. The possibility that a developed country could default on its obligations seemed remote.
As a result, many foreign banks that held Greek bonds or entered into other financial transactions with the government did not hedge against the risk of a default. Now, they are scrambling for insurance.
“Greece is not a small country,” said Mr. Raynes, at R&R in New York. “Credit-default swaps give the illusion of safety but actually increase systemic risk.”

Front Page New York Times -- The Attention This Deserves

(c) 2010 F. Bruce Abel

Ok, so why does CNBC quote credit default swaps as though they are legitimate instruments? Why are they permitted...anywhere? How can any bailout work when they exist?

http://www.nytimes.com/2010/02/25/business/global/25swaps.html?ref=business

There are some topics so toxic that any writing about them pales.

Tuesday, February 23, 2010

Collar Funds

http://www.nytimes.com/2010/02/18/your-money/stocks-and-bonds/18COLLAR.html?em

Antitrust and Electricity -- NYC

(c) 2010 F. Bruce Abel



Keyspan Case No. 10-01415 USDC Southern District of NY. More on this as time goes on.

Wednesday, February 17, 2010

For What it's Worth We're Exactly One Month Past the Normal "Dead of Winter"

(c) 2010 F. Bruce Abel

Look up and chin up. We are secretly moving toward March, April, etc.

And away from the Dead of Winter and our Siberian husking. ("A shell or outer covering, especially when considered worthless," like the 12 inches of snow we have burying the path from one of our cars.)

Can our sole, morose robin survive? Can those of us who do not limp to Florida do so?

In theory the worst is behind us. For Cincinnati, what is the "normal" dead of winter? (We are entering our third week of totally below freezing temps, at least where the sun is not shining, I believe, with no weather encouragement to melt our record snowfalls.)

For answer to this arcane question, What is the Normal Dead of Winter?



Click on my chart of The Dead of Winter by:

typing "dead of winter" in the search window at upper left;

or choosing "dead of winter" among the "labels" of this blog.

Best of all, just click this!

http://2.bp.blogspot.com/_2FY0Ayie_N8/R49iHWuLS4I/AAAAAAAAARs/LdjV6CJkzm8/s1600-h/20080117+the+dead+of+winter.bmp

I use "heating degree days" a lot -- or used to. That will get you to "dead of winter also."

This heating degree chart, by the way, is "valuable" in an odd way. Back in 2005 when I permanently downloaded it from the Weather Bureau it was free. Now they charge -- if you can find it.

Elders of Wall Street Favor More Regulation

(c) 2010 F. Bruce Abel



Elders of Wall Street Favor More Regulation. And these men are respected and, to my way of thinking, untainted.

"Volker-Plus," they say, or so says this New York Times article of yesterday.

http://www.nytimes.com/2010/02/17/business/17volcker.html?hp

Can Nuclear Compete With Natural Gas Generation?




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February 16, 2010, 6:39 pm — Updated: 8:53 pm -->
A Comeback for Nuclear Power?
By THE EDITORS
Jeff Haynes/Agence France-Presse — Getty Images The Exelon nuclear generating stations in Byron, Ill.
The Obama administration has approved a $8 billion loan guarantee to support the construction of two nuclear reactors in Georgia. If the project goes forward, the plants would be the first built in the United States since the 1970s.
The 2005 Energy Policy Act authorized $18.5 billion in loan guarantees, but none have been issued until now. President Obama has proposed tripling that amount to expand nuclear power as a way to control greenhouse gas emissions and bolster domestic energy production.
Does the need for new sources of low-carbon energy now outweigh the costs and risks associated with nuclear power?
Samuel Thernstrom, American Enterprise Institute
Robert Hahn and Peter Passell, regulation2point0.org
Ellen Vancko, Union of Concerned Scientists
Peter van Doren and Jerry Taylor, Cato Institute
Christopher Paine, Natural Resources Defense Council
Denis Du Bois, Energy Priorities Magazine

The Greatest Danger Is Financial
Samuel Thernstrom is a resident fellow and the co-director of the Geo-engineering Project at the American Enterprise Institute.
Nuclear power is not a silver-bullet solution to America’s energy challenges, but it is an essential part of the puzzle that has been largely neglected until now for political reasons.
President Obama took office a year ago with high hopes for ambitious action on climate; today, it seems clear that no federal emissions limits will be enacted this year. The gridlock that grips the Senate has forced the president to consider other approaches to climate, and these loan guarantees are clearly part of that strategy.
If construction costs soar because of regulatory or political obstacles, the administration could end up with little to show for these efforts.
The president’s initiative should be commended both on the merits — we need the clean energy — and for the politics. As the president noted, “changing the ways we produce and use energy … demands of us a willingness to extend our hand across old divides, to act in good faith, to move beyond the broken politics of the past.” Given the depth of the ideological divide over climate policy, the administration cannot afford to ignore the few opportunities there are to bridge the gap with bipartisan initiatives that can generate megawatts of reliable clean energy.
Read more…
What about the risks of nuclear power? Historically, those dangers have been extraordinarily low, despite popular fears to the contrary, and the next generation of nuclear plants will be even safer than those built in the 1960s and ’70s. The real safety issue is not the risk of accidents or attacks on nuclear plants, it is the vexing problem of waste disposal, and on that front, the administration appears unfortunately unwilling to take on the longstanding dispute over Yucca Mountain.
The greatest danger associated with these loan guarantees is not environmental but financial; the risk of default on these loans is high, given the uncertain economic and regulatory environment for these plants. If construction costs soar because of regulatory and political obstacles, the administration could yet end up with little to show for these efforts. There are no simple solutions to America’s energy challenges.

A Good Start
Robert Hahn is a visiting senior fellow at the Smith School, Oxford University and Peter Passell is editor of the Milken Review. They recently co-founded regulation2point0.org, a web portal on regulatory policy.
Providing more than $8 billion in loan guarantees to build the first American nuclear power plant in three decades is one way to jumpstart the industry, but this sort of indirect subsidy leaves a lot to be desired from an economist’s point of view. Indeed, while we’re ready to be convinced that nuclear power’s virtues (zero greenhouse emissions) outweighs its vices (cost and waste disposal), we’d like any incentives to produce more nuclear power to be part of a coherent energy-climate change strategy.
Any incentives to produce more nuclear power need to be part of a coherent energy-climate change strategy.
What passes for energy policy is a Rube Goldberg construction, a machine powered by direct subsidies, tax breaks and mandates that is going in no particular direction. Is ethanol worth the cost in lost taxes and higher food prices? If General Motor’s heavily subsidized plug-in electric car catches on, will there be enough electricity to keep them on the road on a hot summer afternoon? Don’t ask Congress or the White House — they don’t have a clue.
Of course, the energy bell has already been rung a zillion times; we can’t start over.
Read more…
We could, however, try to make sense of where we are and where we should be going by applying some straightforward economic principles — in particular that, while markets aren’t perfect in deciding how much energy to use and in what form, they can do better than the alternatives. The key, then, is to get prices right — to calculate the external costs and benefits of energy sources in terms of climate change risk, localized pollution and maybe national security, then offset them with a system of taxes or tradable emissions rights.
An impossible dream? Sure. But it’s a good place to begin thinking about what’s wrong with current energy policy and what might make it a bit better.

Better Environmental Options
Ellen Vancko is Nuclear Energy and Climate Change Project Manager for the Union of Concerned Scientists in Washington, D.C. She was the former director of communications and government affairs for the North American Electric Reliability Council.
Does the need for low-carbon energy outweigh nuclear power’s risks and costs? The short answer is no. Even discounting nuclear power’s significant security and safety problems, rapidly escalating construction costs could be the industry’s biggest challenge.
Building wind and solar projects and natural gas power plants would be cheaper, faster and safer.
Earlier this month, President Obama proposed tripling nuclear loan guarantees to $54 billion from the $18.5 billion the Department of Energy allocated in 2005. The industry, however, wants more. It wants taxpayers to underwrite all the new reactors it wants to build.
Why loan guarantees? Because six top investment firms told the Department of Energy in 2007 that they were unwilling to finance new reactors in light of the industry’s horrible financial track record. Utilities don’t want to take that risk, either. But both would consider new reactors if taxpayers assumed the risk — in the form of federal loan guarantees.
Read more…
Taxpayers should be skeptical. First, projected construction costs have skyrocketed. In 2002, the industry estimated it would cost $2 billion to $3 billion to build a typical 1,100-megawatt reactor. Now projected costs run as high as $9 billion per unit.
Second, based on the industry’s history of cancellations and defaults, both the Congressional Budget Office (2003) and the Government Accountability Office (2008) estimate that the average default risk on a federal loan guarantee for new construction could be as high as 50 percent.
A 2009 peer-reviewed Union of Concerned Scientists study, “Climate 2030: A National Blueprint for a Clean Economy,” found that the United States does not need to significantly expand its reliance on nuclear power to make dramatic cuts in power plant carbon emissions through 2030, and that new reactors — beyond a handful of “first-mover” reactors built with the $18.5 billion in loan guarantees — would be uneconomical.
The study found it would be more cost-effective to meet a stringent emissions cap with a mix of energy efficiency; wind, solar and other renewable resources; and combined-heat-and-power plants fueled by natural gas. Those options are not only safer and more environmentally friendly, they could be built much more quickly and at much lower risk to investors and taxpayers.

Stop Nuclear Welfare
Peter van Doren and Jerry Taylor are senior fellows at the Cato Institute.
If building new nuclear power plants is such a good idea, why won’t anyone put their own money at risk without government loan guarantees?
Federal efforts to force construction of the plants will prove economically counterproductive.
The answer is that nuclear power is risky for investors because it ties up more capital for longer periods of time than its main competitor, natural-gas-fired generation. Nuclear power makes economic sense only if natural gas prices are very high. Then, over time, the high initial costs of nuclear power would be offset by nuclear power’s lower fuel costs.
Natural gas prices are not high enough at present to allow nuclear to compete. So what could make natural gas prices go up enough to make nuclear power attractive?
One possibility is natural supply constraints. Until recently, North American gas supplies were thought to be increasingly scarce, but in 2009 natural gas reserve estimates increased by 35 percent because of technological advancements in shale rock drilling — the largest reserve increase in 44 years. So natural constraints are no longer in play and natural gas prices have returned to reasonable levels.
Close
A second possibility is a (direct or indirect) carbon tax to reduce greenhouse gas emissions. The Congressional Budget Office reported in 2008 that a carbon tax of $45 a ton would induce market interest in nuclear power plants. And that’s if natural gas prices were to stay relatively high.
If gas prices were to return to their historical norm — which they have — the tax would have to be $80 a ton. And if construction costs were to double (and, historically speaking, the C.B.O. reports that a 207 percent cost overrun was the norm for nuclear power plant construction when we built them 30 years ago), it would require a $150 per ton carbon tax to induce market actors to build nuclear power plants rather than to respond to the tax with some other technology or market adjustment.
The bottom line is that nuclear power cannot compete against natural gas except under relatively extreme future cost scenarios, none of which are likely in the foreseeable future. Federal efforts to force nuclear power plant construction will thus prove economically counterproductive.

Tuesday, February 16, 2010

A Dear and Two Deer: Terrace Park and Then Dick Carlton's Farm Near Washington Court House








Sunday, February 14, 2010

Get Used to It

(c) 2010 F. Bruce Abel

When the crunch becomes you, oh Winter;
When I embrace the unremembered,
The sun each minute changes you
under the ice-blue sky.

Art Scene of Russian Winter Followed by Scenes One Mile Away -- Behind Krogers

Bought this piece of art in Moscow while travelling with Genny in the '90's. Have it over my desk. The rest is this week at the Cotswalds in Woodlawn, the most beautiful walking park I know.






















































GS -- Of Course

(c) 2010 F. Bruce Abel

And Goldman Sachs was there in the 1980s to show Japan how to get over end-of-fiscal-year issues that set the country back about 15 years.

And GS was in South Korea...

http://www.nytimes.com/2010/02/14/business/global/14debt.html?hp

Saturday, February 13, 2010

More Goolsbee '91

(c) 2010 F. Bruce Abel

See my comments at the very end re why I have veered off to research Goolsbee.

Alum to advise Obama
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By Ilana Seager
Contributing Reporter
Published Monday, December 1, 2008
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It took Austan Goolsbee ’91 GRD ’91 17 years to go from being an aide to Yale’s economics faculty to being an aide for the President of the United States.
On Nov. 26 President-elect Barack Obama appointed Goolsbee, now a professor at the University of Chicago’s Booth School of Business, to the President’s Council of Economic Advisers, a three-member body charged with developing much of the White House’s economic policy. The 39-year-old Goolsbee will also serve on the White House’s newly formed Economic Recovery Advisory Board, which the Office of the President-elect claims will provide “independent, non-partisan” advice to Obama as he implements a policy response to the current financial crisis. Goolsbee’s colleagues at the University of Chicago said it is likely that Goolsbee, an expert on tax policy, will serve as the administration’s economic point man on taxation issues.
“Austan is one of America’s most promising economic minds, known for his path-breaking work on tax policy and industrial organization,” Obama said in a Nov. 26 speech. “He’s one of the economic thinkers who has most shaped my own thinking on economic matters.”
Goolsbee deferred comment for this story to spokesmen for the Obama transition team, who did not respond to repeated requests for comment last week.
Since Obama’s 2004 run for U.S. Senate, Goolsbee has been one of the President-elect’s closest advisers on economic policy. He was particularly influential in Obama’s advocacy of income tax breaks for workers.
In his new role, Goolsbee will serve as chief economist and staff director of the Economic Recovery Advisory Board under Paul Volcker, a former chairman of the Federal Reserve. There, Obama said, Goolsbee will be the “primary liaison between the board and the administration.”
His appointment comes as little surprise to University faculty who worked with Goolsbee when he was a summa cum laude undergraduate standout in economics. University President Richard Levin, once a professor of economics and management at the Yale School of Management, served on the faculty committee that reviewed Goolsbee’s work for his master’s degree in economics, a degree Goolsbee received concurrently with his B.A. in 1991.
“I, for one, never doubted that he would make a substantial mark on the field,” said President Levin in an e-mail. “And I am not at all surprised that he has been so influential as an adviser to President-elect Obama.”
Deputy Provost for Faculty Development and economics professor Judith Chevalier ’89 said that Goolsbee’s expertise derives from his specialty in tax policy and public finance along with his contacts in the field. Although no one economist can be eminent in all the field’s disciplines, Chevalier said, Goolsbee knows “all of the leading experts in the areas that are not his.” Chevalier, who has co-authored three academic papers with Goolsbee, said that she is not surprised by his appointment.
“I don’t think there was ever a question that he would in some way join Obama’s team if Obama asked,” she said. “And I don’t think, given the extent that he has been a trusted advisor, that there was ever a question that Obama would ask.”
One of Goolsbee’s colleagues at the University of Chicago suggested that Obama’s administration will turn to Goolsbee on matters of tax policy.
“He knows a lot about taxation and about how people react to different tax policies,” said University of Chicago professor Chad Syverson. “I think that anything that comes out of the administration about taxes will have had a good look over by Austan.”
As an undergraduate, Goolsbee and debate partner David Gray ’92 won the 1991 Team of the Year award given by the American Parliamentary Debate Association. Goolsbee was also a member of improvisational comedy group Just Add Water, the Yale Political Union and secret society Skull and Bones.
Gray said Goolsbee was a dedicated economist, teaching his University of Chicago microeconomics lecture even on his wedding day.
“This just shows his commitment to the field of economics,” Gray said. “And this is how you get to being on the President’s Economic Recovery Advisory Board at the age of 39.”
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(c) 2010 F. Bruce Abel

OK, I'll admit it. David Gray, Goolsbee's debate partner at Yale, is the son of a good high school and Yale friend of mine, Edman Gray, of Dayton.



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Goolsbee '91

Goolsbee ’91 puts economics degree to use for Obama
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By Aaron Bray
Staff Reporter
Published Friday, October 12, 2007
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During a 2004 campaign debate with Alan Keyes, his Republican opponent for an Illinois Senate seat, Democrat Barack Obama repeatedly cited the opinions of a “Professor Goolsbee.”

After spending a night hearing his advice referenced on television while sitting beside the candidate’s wife Michelle, Austan Goolsbee ’91, who had recently been appointed Obama’s economic adviser, finally decided to meet the candidate in person backstage.

He knocked on the dressing room door and found himself face to face with Obama.

“Who are you?” the candidate asked.

“Professor Goolsbee,” Goolsbee replied.

“What? You are Professor Goolsbee?” Obama exclaimed. “You don’t look anything like a professor, and you don’t look anything like a Goolsbee!”
Three years later, Goolsbee holds a position on Obama’s staff he never anticipated: chief economic policy adviser for a leading presidential candidate. In an interview with the News, Goolsbee painted a picture of himself as bound for academia ever since his days at Yale — where he graduated summa cum laude, finishing top in his major with a joint bachelor’s and master’s degree in economics.

But while his friends, classmates and former professors agree that his love of theoretical economics has always been apparent, they say Goolsbee was clearly destined for a more public role.

Illiam Carrillo ’91, who dated Goolsbee during their sophomore year at Yale, vividly recalls one conversation in particular in which Goolsbee expressed his political aspirations.

“I remember him saying, ‘I may not want to be the guy in the White House, but I would love to be an adviser to a president,’ ” she said.
Other classmates said Goolsbee’s current position as adviser to a presidential candidate is no surprise. They pointed to his academic excellence and sincere concern for the fate of those Americans left behind by economic growth — a trait some credited to his “humble beginnings” in Waco, Tex. — as signs that Goolsbee was headed for politics. Economics professor and Nobel laureate James Heckman, for whom Goolsbee did research as an undergraduate, said his former assistant always seemed destined for public policy even as an undergraduate.

Still, Goolsbee said even if he had considered working on the campaign trail, he never would have expected it to be for Obama.

Goolsbee said he remembers former classmate Greg Jacobs ’91 — an early fan of Obama’s — speaking glowingly of the future presidential candidate, then a law professor at the University of Chicago.

“Greg told me, ‘He’s going to the president,’ ” Goolsbee said.

After Obama lost his 2000 bid for a seat in the House of Representatives, Goolsbee recalled mocking Jacobs for supporting “this guy” who couldn’t even get elected to Congress.

But now Goolsbee — who said his boss thinks of him as “another skinny guy with an even funnier name” — is an Obama convert as well.
Goolsbee’s outlook on America’s economic future reflects Obama’s idealism and emphasis on bridging the two-party divide. Goolsbee said the policies he recommends address both the short- and long-term rejuvenation of the economy, in the hopes of providing a safety net while the country’s economy rebuilds.

“If this income structure remains in place for 20 years, it implies a very different America and a very different American dream,” he said.
For the first time in almost 100 years, Goolsbee said, productivity growth is not translating into wage increases for the majority of Americans.
“The top income levels have blown off the chart, but that’s not the issue,” he said. “The bottom 95 to 98 percent of income have been stagnant for the last six years. … That is extremely disturbing.”

The solution to this problem will ultimately be a new education plan that sends more Americans to college, he said. While the United States used to lead the world in the number of young adults with college degrees, Goolsbee said, it now ranks 33rd, between Bulgaria and Costa Rica. As a result, income levels will fall to the equivalent of the levels in those countries unless the United States reverses the current trend, he said.
“Education is the human growth hormone of the masses,” he said. “But education reform is still a process that will take decades.”
In the meantime, he said, gasoline, health care and college are all getting more expensive, and people are feeling the financial squeeze. He said the nation will need comprehensive health care and tax relief for the lower and middle classes to offset economic struggles until wages begin to rise again.
But while his policy prescriptions may sound stereotypically Democratic, Goolsbee’s conservative friends and colleagues said his centrist economic proposals set Obama’s campaign apart from those of other Democratic candidates.

Doug Webster ’91, a friend and fellow economics major from Trumbull College, said while his own politics are consistently conservative, he thinks even voters who usually lean Republican should take a second look at Obama because of Goolsbee’s advising.

“It’s putting conservatives in an interesting position,” Webster said. “Obama is changing the dynamic of the two-party system … he’s a Democrat with a strong fiscal policy. Other candidates would be hard-pressed to find anyone like Austan.”

Although some of his centrist economic prescriptions may disenchant liberals who distrust the benefits of globalization, Goolsbee said economic data indicate that free trade leads to higher wages.

“The issue of globalization is overblown as the cause of income inequality,” Goolsbee said. “The principal causes are increasing technology and demand for skilled labor.”

While Goolsbee said he is committed to applying his research to the real world, economics professors interviewed for this article said they disagree on how difficult it is to advise candidates without letting it interfere with academic work.

Barry Nalebuff, a Yale professor who taught economics while Goolsbee was an undergraduate but did not know him personally, said there is no conflict of interest.

“It’s good for the country to have great people contributing ideas,” he said. “Either Obama gets elected and uses his ideas, or Clinton gets elected and borrows them.”

But Heckman said Goolsbee’s role is “something of a compromise,” since the theoretical economic conclusions might prescribe a politically unpalatable solution. In that case, he said he expects Goolsbee will tell Obama the truth, and Obama will have to decide how best to proceed.
Goolsbee said Obama will not seek advice from him alone.
“He likes to bring in three or four people who disagree with each other,” he said. “Then he’ll have them debate while he quizzes them.”
Goolsbee has never been one to avoid controversy. In the spring of 1991, Goolsbee and his 14 fellow members of Skull and Bones tapped women for the first time. The campus buzzed with excitement, incredulity and exasperation as former Bonesmen locked the tomb and sought to reverse the decision.

Friends and classmates said they remembered Goolsbee vigorously defending the decision. They said he believed it was ultimately an issue of fairness; Carillo said Goolsbee considered those who were resisting the change to be “living in the Dark Ages.”

“He was militantly pro-tapping women,” said Andrew McLaughlin ’91, who was a member of the improvisational comedy group Just Add Water with Goolsbee. “He was generally willing to blow things up to make a stand for principle.”

Several other classmates interviewed said Goolsbee stood out for his combination of intensity and easygoing nature.

Robert Meinhardt ’91, also a Trumbull economics major, said he remembers sitting in the back row of an economics lecture in freshman or sophomore year while Goolsbee dominated discussion from the front.
“He was always the guy who sat in the front row and asked questions,” he said. “We would sit in the back and roll our eyes. We couldn’t understand the questions, let alone the answers.”

Still, Meinhardt said, Goolsbee was easy to get along with.
“He was never condescending,” Meinhardt said. “He was incredibly fun to hang out with.”

Goolsbee was known for his incessant economics jokes, his friends said, but most preferred watching his performances with Just Add Water.
Well, not everyone, Goolsbee admits.

Nobel Prize laureate James Tobin — for whom Goolsbee did economics research — had heard his assistant was a member of Just Add Water and asked Goolsbee repeatedly whether he and his wife could attend a performance. Goolsbee reluctantly agreed, and one night Tobin and his wife entered the dank interior of the Ezra Stiles Little Theater.

“The guys [in Just Add Water] got up and said there was a Nobel laureate in the audience,” Goolsbee recalled. “No one believed them. Then they were laughing at him for being a Nobel laureate, and everyone thought he was just someone’s grandfather.”

In class the next Monday, Tobin did not even mention it.

“He never spoke of it again,” Goolsbee said.

Goolsbee should have known, even then, that improvisation and economics do not mix.
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Krugman

(c) 2010 F. Bruce Abel

I'm with Paul Krugman all the way in his writings, but....I'm also over 65 and not rich, and I jealously do not want to expand Medicare to those under 65. I wonder if Krugman is younger than 65. I bet he is.

(I feel guilty about what I just wrote. Don't tell anybody.)


Op-Ed Columnist
Republicans and Medicare

comments (277)


By PAUL KRUGMAN
Published: February 11, 2010
“Don’t cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong.” So declared Newt Gingrich, the former speaker of the House, in a recent op-ed article written with John Goodman, the president of the National Center for Policy Analysis.
Skip to next paragraph



Times Topics:
Medicare

Read All Comments (277) »

And irony died.
Now, Mr. Gingrich was just repeating the current party line. Furious denunciations of any effort to seek cost savings in Medicare — death panels! — have been central to Republican efforts to demonize health reform. What’s amazing, however, is that they’re getting away with it.
Why is this amazing? It’s not just the fact that Republicans are now posing as staunch defenders of a program they have hated ever since the days when Ronald Reagan warned that Medicare would destroy America’s freedom. Nor is it even the fact that, as House speaker, Mr. Gingrich personally tried to ram through deep cuts in Medicare — and, in 1995, went so far as to shut down the federal government in an attempt to bully Bill Clinton into accepting those cuts.
After all, you could explain this about-face by supposing that Republicans have had a change of heart, that they have finally realized just how much good Medicare does. And if you believe that, I’ve got some mortgage-backed securities you might want to buy.
No, what’s truly mind-boggling is this: Even as Republicans denounce modest proposals to rein in Medicare’s rising costs, they are, themselves, seeking to dismantle the whole program. And the process of dismantling would begin with spending cuts of about $650 billion over the next decade. Math is hard, but I do believe that’s more than the roughly $400 billion (not $500 billion) in Medicare savings projected for the Democratic health bills.
What I’m talking about here is the “Roadmap for America’s Future,” the budget plan recently released by Representative Paul Ryan, the ranking Republican member of the House Budget Committee. Other leading Republicans have been bobbing and weaving on the official status of this proposal, but it’s pretty clear that Mr. Ryan’s vision does, in fact, represent what the G.O.P. would try to do if it returns to power.
The broad picture that emerges from the “roadmap” is of an economic agenda that hasn’t changed one iota in response to the economic failures of the Bush years. In particular, Mr. Ryan offers a plan for Social Security privatization that is basically identical to the Bush proposals of five years ago.
But what’s really worth noting, given the way the G.O.P. has campaigned against health care reform, is what Mr. Ryan proposes doing with and to Medicare.


In the Ryan proposal, nobody currently under the age of 55 would be covered by Medicare as it now exists. Instead, people would receive vouchers and be told to buy their own insurance. And even this new, privatized version of Medicare would erode over time because the value of these vouchers would almost surely lag ever further behind the actual cost of health insurance. By the time Americans now in their 20s or 30s reached the age of eligibility, there wouldn’t be much of a Medicare program left.

But what about those who already are covered by Medicare, or will enter the program over the next decade? You’re safe, says the roadmap; you’ll still be eligible for traditional Medicare. Except, that is, for the fact that the plan “strengthens the current program with changes such as income-relating drug benefit premiums to ensure long-term sustainability.”
If this sounds like deliberately confusing gobbledygook, that’s because it is. Fortunately, the Congressional Budget Office, which has done an evaluation of the roadmap, offers a translation: “Some higher-income enrollees would pay higher premiums, and some program payments would be reduced.” In short, there would be Medicare cuts.

And it’s possible to back out the size of those cuts from the budget office analysis, which compares the Ryan proposal with a “baseline” representing current policy. As I’ve already said, the total over the next decade comes to about $650 billion — substantially bigger than the Medicare savings in the Democratic bills.

The bottom line, then, is that the crusade against health reform has relied, crucially, on utter hypocrisy: Republicans who hate Medicare, tried to slash Medicare in the past, and still aim to dismantle the program over time, have been scoring political points by denouncing proposals for modest cost savings — savings that are substantially smaller than the spending cuts buried in their own proposals.

And if Democrats don’t get their act together and push the almost-completed reform across the goal line, this breathtaking act of staggering hypocrisy will succeed.


"Union Atlantic" Reviewed Here

(c)2010 F. Bruce Abel

This review wants me to read "Union Atlantic" first.


http://www.washingtonpost.com/wp-dyn/content/article/2010/02/09/AR2010020903691.html

Think I Will Get "Union Atlantic" and the One Reviewed Here, "The Privileges"

(c) F. Bruce Abel

The New Yorker review of these two books stirred me this morning to find this book review, which appeared last Sunday. Both books fit my mood about Wall Street, after my futile year of trading, (Broke even -- lost a little --, followed Cramer -- not literally or even figuratively, kept interested, but still.)


http://www.nytimes.com/2010/01/17/books/review/Robinson-t.html

Friday, February 12, 2010

From No Hot Air

(c) 2010 F. Bruce Abel

Here's the last few days from "No Hot Air," the best link in this field. It comes out of the UK.

Pages
Total and Shale Video from Clean Skies
The Myth of Natural Gas Scarcity
No Hot Air in the Media
Can Shale Gas transform UK energy policy?
No Hot Air Energy Procurement
Recent Posts
As good, or as bad, as it gets?
Gas Market goes Global
Reality hits Russian Gas
BP on gas paranoia
Chesapake on Global Shale
Unconventional gas gaining momentum worldwide
Quebec Shale Gas
Bloomberg TV on shale in Europe
Ofgem should read this. But won't
A tale of two BG's
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Feb 10, 2010
As good, or as bad, as it gets?
We haven't had the new Ice Age that gas traders were hoping for before Christmas, but it has been colder than usual in North America and Europe.
But we've lived. Storage is almost seven per cent up on the five year average in the US, which shows that increased production, and LNG imports, easily handled what has been the coldest and snowiest winter in over five years. But from now on, spring if not in the air is at least on the horizon:
Traders may be thinking this is as cold as it gets and from here there’s only one way to go and that’s back to the warmer side,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “There were also two reports in a row that took what was effectively a flat situation for storage in comparison to previous years and turned it into a surplus.”
Which brings us to prices. March UK NBP is 34.75 right now. One year ago, it was over 57 and when the contract started trading in October 2008 it was 92.
For NYMEX US gas the same numbers are $5.34, 6.52 and 8.88. Which means that the NBP has fallen far further than NYMEX. Which also means that NYMEX has a better track record in predicting prices.
Based on the past, futures don't do such a great job predicting eventual outcomes, although NYMEX has the better record. One can reasonably expect a premium for the future, but why was that premium 18% for NYMEX and 39% for the NBP?
Price predictions based on charts and ruminating over the past in an expectation that the past is plan for the future strikes me as pointless. If no one can predict the weather or the economic activity of a year from now, why think anyone can do it with accuracy in gas? But NYMEX has for a number of complex reasons, number one being liquidity, been more accurate and one can't completely discount the past as pointer to the future.
Going back to prices, NYMEX for next February is about 1.10 up on what February 2010 settled at, which is a 20% premium. But the NBP is up to it's old tricks with next February at a more reasonable but still outrageous 28% mark up on so far this month. The difference in a forward price for November 2010 against what actually outturned in November 09 is an even stronger, a whopping 55% difference between forward 11/2010 of 41.7 and System Average Price for November 2009 of 26.9.
What is going to happen next winter that is so scary? An even colder winter, combined with a mammoth economic recovery might do the trick. But what if there is more shale, more LNG, the economy continuing to flatline and a return to normal, or even milder temperatures? Then we can see that next winter may be, at least in the UK, cheaper than the past one, not 50%+ up year on year.
My theory about the inaccuracy of the UK curve is connected to the UK peculiarity of fixed term prices. Domestic consumers for example don't have a choice, and even worse, many UK business consumers don't give themselves the choice. Given the constant drumbeat of Ofgem who predict gas prices of over 60(!) in 2011, it's easy to get talked into the risk narrative. Don't fall into the trap,
Posted at 11:53 AM in Energy Prices Comments (4) TrackBack (0)
Feb 09, 2010
Gas Market goes Global
Shale's impact felt around the world is the headline in the Calgary Herald, consistently one of the best places to read about shale gas.
Within the past week, Russia's energy giant OAO Gazprom has announced it is delaying the development of the Shtokman natural gas field, while at the same time trotting through major investment centres saying the company is poised for growth. Is it another sign of the rapidly changing nature of the world's natural gas markets or a fresh instance of Russia looking to flex its muscles using its natural resources?One of the reasons given for the decision was the shale gas phenomenon in North America that has effectively decimated the need for imports of liquefied natural gas.But the very fact Russia is making a decision to delay the development of a massive natural gas field as a result of what's happening halfway around the globe potentially speaks volumes that the market for the commodity is moving slowly but surely from being continental to one that is global.
The plan for Shtokman had been tied to growing demand for liquefied natural gas, particularly into U.S. markets.However, the shale gas revolution -- which has helped the U.S. to leapfrog ahead of Russia as the world's largest natural gas producer -- means the LNG export strategy needs to be rethought.No kidding.Not only has the shale gas revolution changed the landscape, global LNG supplies are expected to continue to increase and global demand has yet to show significant signs of recovery.Taken together, these factors point to an oversupply of natural gas for the foreseeable future
Nothing particularly new to us of course. But bizarrely, here in the UK, The Telegraph seems to think that this a vindication for Ofgem's fears:
Some commentators believe Ofgem was off target with its diagnosis of the perils faced by the UK energy market in its Project Discovery document.
Possibly, but the regulator seems rather more prescient than its detractors, given the news that Gazprom, and its joint venture partners, are mothballing the enormous Shtokman gas field under the Barents Sea.In a recovery, where is Europe going to get its gas? Shtokman won't open until at least 2016, but only then if a new decision to invest in 2011 goes ahead.
Europe doesn't have the liquefied natural gas storage facilities sufficient to rely on imported LNG – new ones in Poland and Croatia are rumoured to be on hold.The UK does have facilities which Europe could suck dry unless Parliament legislates to hold it back – Shtokman means the politics of energy just got meaner.
The Telegraph should know better. The point here is that Shktoman LNG was never meant for Europe, but for North America, so the impact on us is non-existent. Where will Europe get it's gas they ask?
LNG from Algeria, Norway, Qatar, Egypt, Nigeria, Equatorial Guinea, Yemen and Canada would be one answer. Another answer is the LNG destined for Asia from further afield that will be displaced by shale production in China and India and many other places.
Another place they can get gas is from shale in Poland or Germany or Ukraine or Sweden or even the UK itself. But going back to the Calgary Herald, the idea that it's Shtokman or nothing in Russia is wrong too.
Russia also has significant, undeveloped shale gas reserves; the question is where these are relative to existing infrastructure, as well as the cost of development.If, in fact, the shale gas plays are proven to be as prolific as they are in North America, it's not out of the question these will be developed ahead of the Shtokman field, which is thought to contain almost four trillion cubic feet of natural gas. It's a situation not unlike the one faced in North America regarding the development of the Alaska or Mackenzie Valley pipelines.
Posted at 09:16 AM in Current Affairs, Energy Prices, LNG, Next Big Things, Prices and Politics, Shale Gas Comments (4) TrackBack (0)
Feb 07, 2010
Reality hits Russian Gas
I've noted before that Ofgem and Gazprom, as two semi-state organisations have a lot in common: both are desperately trying to rationalise their existence and both share a common obsession with Russian gas. The slight difference is Ofgem paranoia is about supply shortages as Gazprom is similarly delusionary in trying to avoid today's reality of demand falls.
Does this sound like a shortage?
An oil consortium headed by Russia’s Gazprom is considering postponing its vast Shtokman liquefied natural gas project in the Russian Arctic due to depressed global demand for gas.
Ofgem and it's Peak Oil pals would of course say the demand drop is caused by the recession. But even Gazprom has given up on that one:
.. a surge in domestic shale gas production has reduced the US’s need for LNG in the past 12 months, and forced the Shtokman partners to review their strategy.
Over at the WSJ, Gazprom are still trying to talk up the market:
State-controlled Gazprom said demand for natural gas will rise 70 billion cubic meters by 2020, Sergei Komlev, head of contract strategy and pricing at Gazprom Export, said at an investment conference in Moscow.
But reality intrudes again:
Yet experts, including Fatih Birol chief economist at the International Energy Agency, foresee low demand for gas in the coming five years."I have no good news for Russia, I'm afraid," Birol said. "I see a global gas glut hitting until 2015."
And Ofgem, sorry Gazprom counter:
Gazprom's Komlev said 2009 was a difficult year and that this year will be equally challenging."But we aren't as pessimistic about gas demand as some commentators," Komlev said. "We don't see a catastrophic decline in demand."Demand will rise as indigenous production in Europe declines, and under current export contracts, Gazprom will attain around one-third of the European gas market by 2020, up from the current 25%, he said."Despite lower demand last year, our European buyers haven't asked us to lower volumes in the longer term," said Komlev. "They assume that demand will rise."
One reason that they assume demand will rise is that the delusions of Ofgem are still widely held. For now.
Of course, Ofgem will soon have other Russian gas exporters to worry about.
Top Russian gas independent Novatek is considering fast-tracking its Arctic Yamal LNG project and will this year try out a potential shipping route to international markets
Posted at 07:33 PM in Current Affairs, Energy Prices, Next Big Things, Prices and Politics, Shale Gas Comments (1) TrackBack (0)
BP on gas paranoia
Sorry, I missed a very important story here. I can't stomach waking up to the BBC Today show every day, and on the one day something interesting turns up I missed it!
The chief executive of BP has said there is 'unreasonable paranoia' about gas supplies to the UK.In a rare broadcast interview, Tony Hayward told Today presenter Evan Davis that it was "curious as to why there is so much concern about us becoming more reliant on imported gas".
Gas is from 2:30 but the entire interview is worth it. Interesting how he then gave another rare interview, this time to The Guardian,
Dash for gas is UK's best energy strategy, says BP chief
there should be more emphasis put on gas, which was very commercial, using a mixture of what remained of UK North Sea supplies and imports. The BP man believed the UK should drop its "paranoid" concerns about gas imports from Russia and accept that piped and liquefied natural gas from overseas sources offered a better solution to help beat global warming and energy insecurity in the short term."There is a lot of gas in the world. There are a lot of diverse sources of gas in the world. The paranoia has been about Russia, but it is misplaced. We have approximately zero Russian gas in the UK [imported currently] and if you look at Europe, the imports of Russian gas into Europe have halved since 1980.
Much of that paranoia comes from newspapers like the Guardian. Who, unlike Ofgem, can at least change their minds when the facts change.
Tony Hayward said much of the same in a speech to the London Business School.
Europe is already a big user of natural gas, which is one reason why its industrial and power sectors emit less carbon than the US. The trouble is that European politicians sometimes speak as if dependence on imported gas is a problem.To them I say three things. First, Europe has long been structurally dependent on imported energy and - unlike the US - will become more so in the next few decades. The most effective way to reduce such dependence is to curb energy consumption – and costs - by significantly investing in energy efficiency. Second, even though the concern often focuses on Russian dominance, the supply picture is actually more diverse. Ample pipeline volumes from Norway, North Africa and soon the Caucasus are being augmented by a growing volume of liquefied natural gas at competitive prices. Russia’s share of EU gas imports has halved since 1980, and Russian gas represents only 6.5% of EU primary energy supply. In fact abundant new supplies from places like Qatar mean LNG is coming into its own as a globally traded commodity like oil. This is not a market Europe needs to fear.
And then this:
The issue for Britain is not a potential shortage of gas but a limitation on our ability to balance supply and demand across the country. In other words, it’s about the need for investment in infrastructure such as pipelines and storage capacity, not about the structure of supply.Only one third of our supplies in the coldest period last month came from the North Sea, nearly half was made up with imports either by pipeline from Norway and the Continent or in the form of LNG from Qatar, Trinidad, Algeria, Egypt and even further afield – that’s hardly an over-reliance on one supplier.
The message is clear, but will it be heard? Even on the reporting on this speech for example, Reuters reported on the big story of oil, but not a single mention of the merely pretty big gas angle.
Posted at 09:29 AM in Current Affairs, Energy Prices, Energy Tech, Next Big Things, Prices and Politics, Shale Gas Comments (0) TrackBack (0)
Feb 05, 2010
Chesapake on Global Shale
This is the only story so far on an Aubrey McLendon at the Credit Suisse Energy Summit, and the Reuters report sends a mixed message.
I don't see the world being swamped by shale gas in the next 10 years," McClendon said in remarks broadcast over the Internet. (But not yet on the CHK website)He noted he has yet to see a formation overseas that has the potential to rival those found in the United States.To successfully develop a shale gas basin a company needs infrastructure such as processing facilities, indigenous demand for gas and favorable commercial terms. Without those factors, many basins around the world are eliminated right away, the executive said.
Nothing really new in the last paragraph, but the middle one sounds depressing. Or is it? He has yet to see a formation to rival the US ones, but they never will see if they don't look. And boy are they looking. There has been a lot under the radar as people have been saying all along, even if specifics are still unidentified foreign objects:
Chesapeake and its joint venture partner Statoil ASA (STL.OL) have narrowed their search for an overseas shale play to about 15 basins, down from an initial survey of about 200, McClendon said.
Fifteen basins is more than there are in North America, and that leaves 185 left for the other guys to squabble over. At the end of the day, why should there not be somewhere in the world equivalent to some of the smaller NA shales? Depending on where it is, even a small shale could be game changing for that market. Or in the UK's case even for markets next door.
This is educated guess time. I'm the last person in the world to give investment advice, and I'm not. But exactly because Ofgem is so obsessed about Russia, start thinking of the disruptive impact on the UK of major shale discoveries in order of likelihood: France, Italy and Ireland.
Which still leaves a dozen other possibilities worldwide, any or all of which will impact world LNG prices. At least one of the 15 basins is in China, again an educated guess. Removing that demand from world LNG markets will be big.
Other guesses are left field ones, but there will definitely be something in Latin America, an area relatively isolated from world energy markets until recently. That however would definitely be the type of area where the gas may continue to be stranded, far from markets and infrastructure.
UPDATE: The presentation is here:
Posted at 09:17 AM in Energy Prices, LNG, Next Big Things, Shale Gas Comments (0) TrackBack (0)
Feb 04, 2010
Unconventional gas gaining momentum worldwide
This update from Petroleum Economist is part of a free preview. When I appeared in the December issue, even I had to sneak a free trial as the only way to see that piece. I'm sure that Ofgem and DECC's budget runs to paying for PE, so bang goes that excuse as we see one more nail in the coffin of gas scarcity.
Unconventional gas has driven some of the biggest energy news stories in North America and Australia in recent years as production ramps up and companies look to build positions in this long-term growth play. There remain many growth opportunities in these regions and, despite the slowdown driven by the market turmoil over the past 18 months, unconventional gas remains an attractive long-term investment. Meanwhile, outside North America and Australia, momentum is also building and these new regions could create the headlines of the future.
The dramatic rise in shale-gas production in the US, following tight-gas and coal-bed methane (CBM) production growth, has demonstrated the scale of the effect unconventional gas can have on even the very largest gas market.
What's interesting here is that the author Rhodri Thomas of Wood Mackenzie has been quoted as being skeptical of the time scales of shale in the past. Judging from this snippet, he, unlike the experts at Ofgem is capable of changing his mind when the facts change. At Ofgem, when the facts change, they simply ignore them.
Anyone want to pass on the rest to me? Or to offer high priced consultancy work so I can pay my own way? Naturally, I can't publish the rest, PE isn't the (involuntary) charitable organisation NHO is. :)
Posted at 10:40 AM in Energy Prices, Energy Tech, Next Big Things, Shale Gas Comments (2) TrackBack (0)
Quebec Shale Gas
More news on the Utica Shale in the Saint Lawrence Valley, where shale gas is conveniently situated between Montreal and Quebec City. The location obviously makes gas for those cities far cheaper than Alberta or US Gulf Coast Gas. But how much gas is actually there? It could be a lot. Another game changer (yawn)?
A pair of Calgary juniors are eagerly awaiting the results of the latest shale gas wells in Quebec.Questerre Energy and Canadian Quantum Energy Corp. both announced that drilling on the Gentilly No. 2 horizontal well has finished and testing will begin later this year.The well, which is being operated by Talisman Energy, is only the second horizontal well to be drilled into the emerging shale basin, but observers are already comparing region's Utica shale to the Marcellus shale in Pennsylvania, which is shaping up to be one of the largest natural gas fields in North America.
As we have pointed out, the only controversy over the size of the Marcellus is whether it is as big as the Qatar gas field or merely only the second largest gas field in the world.
Posted at 09:52 AM in Energy Prices, Energy Tech, Next Big Things, Shale Gas Comments (1) TrackBack (0)

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