Archive for category Economics

Why Clean Coal is Bullshit

As a tiny bit of background, I have been working on the nuts and bolts of dealing with climate change for about 30 years, somewhat by accident. When I went to work as an environmental engineer back in the US, you couldn’t even get an environmental engineering degree precisely (I have a chemical engineering degree) as the subject area was confined to “can we make drinkable water?” and “Can we treat water with poo in it before discharge?”

When I started, we were only about 10 years past a Time article I read as a young lad wondering if we were going to go into another ice age, because of what was being discovered in relation to the elliptical motion of he earth and the slight wobble the planet has on its axis. [Fun fact: these factors are now used by climate change deniers as reasons why climate varies naturally and so we shouldn’t worry about it.] Anyway, I have worked on doing things that are called emissions inventories, and air emissions compliance testing, and computer automation of emissions logging and estimation based on mass balancing, and then how one might produce a scientifically verifiable emissions reduction certificate such a way that it could be traded in a market like any other commodity (think pig belly futures), and then finally developing and demonstrating the methods by which companies large and small could do their CO2-e accounting in a way that caused minimal extra effort through their normal expense reporting processes.

This was all done as a thread in my whole career behind the scenes of earning a crust doing whatever industry and industrial clients needed at the time in relation to HSE risk identification and management.

Now I have realised over the past few years that I have pretty much wasted my career working on something that we aren’t going to do, or do in time at least since the Abbott government got elected with their whole chain of lies about the carbon tax, and the fact that they won public opinion with their fear mongering. So, we aren’t going fix up the worst problems with climate change and really, I should have been concentrating on zombie plan research or something more likely to be useful. The basic problem is that people won’t listen to any argument that can’t be wedged into a 30 second sound byte and doesn’t come with a catchy slogan. But the truth is the truth, especially when that truth follows the scientific method. Whether or not we can translate scientific truth into peoples’ lived experience is another thing entirely, I have found, and that is why I am, at the end of the day, a failure professionally. I actually now do know a couple of ways to translate how a 2°C average temperature rise manifests itself in events people could experience (not any specific one, you understand but in a trend), but really its too late once I can show someone that. The key lies, I believe, in getting people to understand through lived experience the nature of entropy.

The problem with getting people to understand entropy is that its like dark matter right here on earth. Entropy is enthalpy’s weird cousin. Enthalpy is a type of energy we call heat, but entropy is essentially chaos. You cannot see, touch or sense entropy directly, but only in the effects it has around you. But understanding entropy is essential in understanding climate change, as well as bullshit like clean coal, which I promise you, I will get to eventually.

The guy that really did the seminal work on providing our understanding entropy in my opinion was J. Willard Gibbs, who is the father of modern thermodynamics and who won the Nobel Prize for it, before there was an it (he won for statistical mathematics). But why don’t we remember him? Probably because he was actually just a bit too far ahead of his time. Scientists joked at the time that the only person that could understand Gibbs’ work was Maxwell (that’s James C. Maxwell of electromagnetism Nobel Prize fame). Most people remember Einstein, however, and Einstein identified Gibbs as one of the scientists he most admired. And that makes Gibbs up there in importance with Newton, Einstein and Hawkings, in my book.

Anyway, there are 4 laws of thermodynamics, and Gibbs helped translate what the equations of state are when mass becomes energy, energy transfers between systems, as well as to put some boundaries on what happens to entropy (the state of chaos) during the interactions. So, it can be a little bit thinky and its easy to give up on trying to follow it. However, the understanding of thermodynamics is the basis for things like energy production in internal combustion engines, refrigeration and superconductors, so its very real and not some faith (or even fake news!). Thermodynamics is like translation of something in 2 dimensions (mathematics) into the third dimension where we need things like refrigerators. But with refrigerators comes Category 6 cyclones. See, now your saying, there aren’t any, since classification of cyclones only goes up to Category 5. Which is true . . . today. But by the time they have to add the Category 6 classification and we can prove to enough people that through their lived experience, they are seeing a manifestation of a massive rise in entropy in their atmosphere, its really is too late, and I mean in the second law of thermodynamics sense.

However, while I must accept that we as a species will fail to do anything substantive to stave all but the worst effects of climate change, I would like to stop the further huge waste of money along the way, as that is an issue that apparently does resonate with most Australians. And so we arrive at “clean coal” technology. The same laws of thermodynamics that hold true for the rest of our known world also specifically and directly apply to the combustion of solid fuel material to produce electricity, waste heat and waste gases materials.

Each and every “clean coal” technology ends up requiring supplemental inputs in energy and cash to make them viable even as demonstration projects. So, it was nice to see an industry insider finally admit as much this morning in the ABC news. But I will go further and state categorically that there is not and will not be in my lifetime a scientifically and economically viable “clean coal” combustion device of any sort that can satisfy the first and second laws of thermodynamics. The Chevron Gorgon carbon capture and storage (CCS) project is not an example of combustion to capture and storage, and there is no viable ‘clean coal” system in operation anywhere in the world. Notice how we never see one advertised as actually available for operation? They are all pilot projects or experimental demonstration installations that will never be scaled up by private investors (because private investors believe in mathematics). Which basically means money for ‘clean coal’ technology is just cash handouts in the millions for R&D in the fossil fuel industries to get them not to lobby against upcoming legislation (ala John Howard), or bullshit additional spending that Josh Frydenberg wants to allow the Clean Energy Finance Corporation to loan (waste) money on. They want to waste public money on this grift because they know people, once again, don’t understand thermodynamics, don’t want to, and want to believe in something like “clean coal”.

Under no circumstances is an apples for apples comparison of any hydrocarbon burning and CCS system competitive economically now or in the foreseeable future to any viable renewable energy production facility (PV solar, solar heat, hydro or wind) whether we look at the systems themselves or examine the whole of lifecycle mass and energy balance of them. There is simply no way that a combustion energy plant can produce enough energy for recapturing and liquefying all its gaseous emissions, then store them, while at the same time producing electricity for the grid. Its called a perpetual energy machine and its bullshit and has been known as such since Da Vinci’s time.

See, the best of “clean coal” technology is sold to you as a complicated engineering thing that is added to the front end and back end of a standard coal fired steam generator. The ‘best’ of it is a combination of fuel processing and combustion burner technology to maximise the amount of energy production of each molecule of hydrocarbon burned and minimise the amount of nasties produced while doing that (NOx, SOx, CO, CO2, etc). This technology does work, but it is very expensive and raises the cost of a coal fired plant a lot. And, it still doesn’t allow each molecule of coal burned to generate more energy than the first law of thermodynamics allows, meaning that about 2/3 of a molecule of coal becomes waste heat and only a third of it becomes electricity. Second, we have to capture all (or a significant part) of the waste CO2 that is produced in our coal plant as a result of the second law of thermodynamics and absorb or adsorb it into liquid or solid, then transport that liquid or solid material to long term storage, and that equipment is both costly and energy intensive. So what you get is a Rube Goldberg machine that costs more in materials and energy than it can produce. See a graphical representation of the mass and energy balance comparison between coal, clean coal and a couple of renewables below to simplify things a bit. Just skim the pictures and you tell me which is more expensive to build and operate.

To waste any more taxpayer money on this bullshit idea, that should be called as such at every opportunity, is criminal, especially while we also continue to subsidise the dirty fuel required to extract other dirty fuels, and build roads and railroads to service dirty fuel production, all the while hearing complaints about how wind and solar are getting “unfair” subsidies.

If we aren’t going to do anything about climate change, then lets at least be honest about it. We’re gonna live it up until your kids, or your grandkids start having to pay the piper. We simply don’t fucking care as a whole of society if there is even the slightest risk of it raising our electricity prices even perceptibly. But lets not buy any more of this snake oil like we are back in the days of the travelling salesman. I can move to America if I want that shit sold by their current orange carnival barker.

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Precisely what is wrong in the world

I note from the ABC the recent closing of the article on the Pluto flyby:

Following its encounter with Pluto and its satellites, New Horizons will continue its one-way journey. . . . Its radioactive power supply will last into the 2030s; NASA wants to focus investigations on two more objects in the Kuiper Belt but will need to secure more funding to make that happen.

With all the stupid shit we fund in the world, we can’t even find a couple million bucks to continue examining the world around us. Truly doomed as a species at this rate.

Love Your Work Jen

This is exactly how it works here in Australia in relation to taxing mining, addressing climate change and other issues, and she says it more succinctly than a 3 page rant from yours truly.

Attribution: Jen Sorensen

An Honest and Fair Mining Tax

Hey, today I want to talk to you about a serious issue that we have been mislead about and had ignored in serious examination by the media. I want to talk to you about how the public is regularly screwed out of taxes and fees the government ought to be collecting on big mineral extraction businesses. Because the mining industry spent $20 million on an ad campaign when we last spoke about the mining tax, the labor government wimped out, and let mining lobbyists write the legislation, so you know what that said. They all paid little or nothing on that in the first year it was in.

The miners ads said that if we put mining tax (actually called the minerals resource rent tax) up the economy would collapse, and Australian businesses would all go down, when the mining industry closed up all over the country. Real wrath of god type shit.

The truth is, the mining tax should more accurately be called the resource super profits tax (RSPT), and here is how it was supposed to work in its original form:
1. First up, it gives a fair rate of return for the mining company. They pay no resource super profits tax until
they get 6% return on capital back themselves as profit. You’d have to be Warren Buffet
2. After that, the Australian public, which owns the finite resource, is given a 40% share of the profits.
3. It eliminates a confusing bunch of confusing royalties and fees paid to the states at present, and all royalties
presently paid to the states would be rebated.

But let’s look at the main point of contention, the 40% rate. A RSPT would not “kill off mining and related small businesses” as claimed by the mining industry ads. How do I know this? Because it has happened before, and right here in Australia. Remember the wailing and gnashing of teeth when Australia set the tax rates on all the offshore gas we are now developing for shipment to eager customers.? . . . . . Yeah, I didn’t think so, but it happened, believe me. And guess what, the guys moving the LNG are paying a super profits tax very similar to what is proposed for land based mineral extraction under the RSPT.

So on April 5, vote the Australian Democrats, because the resource super profits tax is just part of what we call sustainable prosperity, and a fair return for all of Australia.

Woah there big fella!

OK, in an otherwise excellent post about the out of touchness of CEOs, Vyan goes way too far by saying:

“As a matter of fact most Investment people like Perkins, Zell or even Mitt Romney don’t actually do any real “work” at all, because their Money Does their Work For Them in the form of gaining interest and paying dividends.”

This is kinda bullshit. As a Director and company owner, I worked my way up from the bottom of a business I built myself with no outside investors gifting me anything, or inheriting the whole show. As a result of that, I also have a significant retirement investment account I manage myself and do quite well at, thank you. But if you think for a second that all the research, analysis and planning that I do to make sure I meet or exceed the markets I invest in isn’t work, then fuck you. If you think I shouldn’t use the advantage I have in intelligence, patience and opportunity to make the most of my time, money and ideas, then once again, fuck you. If I am smarter than you and as a result have a better job and am on the way to financial independence and you don’t like it, {ahem} well, you know the drill. It’s ok, I don’t need to be loved by all, but I bet I will be included in many people’s zombie plans, so I sleep OK.

What you should be focusing on is whether the whole package of labour, capital and ideas I am putting into a business and assess whether I am duly compensated for that. A good basis has always as a multiplier of the CEO salaries in comparison with the average worker salary. Way back after WWII it used to be in the 40s. When Ronnie the Raygun took office in the USA, it was 78. Its over 4000 today. Hmmmmmm, but what does the peak CEO do for the world? Isn’t he responsible for making the whole economy work, keeping liquidity maintained and other superhero type shit like that? well, fuck no obviously.

The same guys that inflate the big bubbles in the economy, overheat them with outright fraud and then watch as the fuckers explode while counting their fees based on the transaction, not the OUTCOME of the transaction, get 4000 times the average worker in their companies. And I understand that Lloyd Blankfein of Goldman’s actually spends the large amount of any given week wandering around the house in his undies eating chips, drinking beer and playing whatever Call of Duty is currently hot. And hey, I got no problem with that. You are basically describing my perfect weekend several times a year. But it ain’t worth 4000 times, is all I’m saying.

There’s a revolution coming, and things have gotten so out of balance in the balance between the return on money, ideas and labour in the world, that when it does occur, it’s going to be quite a shock to some, if the balance is corrected.

I Could Be Fucking Brilliant

Yeah, things I propose in detail one day can become the policy of nations a couple days later, completely unknown to me at the time I derived the concept.

Pay People Not To Work

I have a radical idea that is, on the face of it, an absolute wowser to your common capitalist. But I think I actually heard that it was tried, or is being used, in some measure by the Germans, well-known capitalists who live in Europe. Doesn’t matter, I am going to derive from first principles.

Some facts:
“At over $446 billion per year, Walmart is the third highest revenue grossing corporation in the world. Walmart earns over $15 billion per year in pure profit and pays its executives handsomely.
Wal-Mart’s poverty wages force employees to rely on $2.66 billion in government help every year, or about $420,000 per store. In state after state, Wal-Mart employees are the top recipients of Medicaid. As many as 80 percent of workers in Wal-Mart stores use food stamps.”

Now, consider what happens for real if you pay people money with no work requirement at all, many of who are living at or below the poverty line in the USA (and apparently, a shitload from Wal-Mart). An epidemiologist in the Cherokee Nations did. Now honestly, knowing a fair few people in my life, my thesis before reviewing the data and analysis would likely include: “A whole bunch of people with no money skills would blow the cash on things which made their lives not significantly better, or on things that are actually harming them.”

More facts:
“Jane Costello, an epidemiologist at Duke University Medical School, saw an opportunity. The tribe elected to distribute a proportion of the profits equally among its 8,000 members. Professor Costello wondered whether the extra money would change psychiatric outcomes among poor Cherokee families.
When the casino opened, Professor Costello had already been following 1,420 rural children in the area, a quarter of whom were Cherokee, for four years. That gave her a solid baseline measure. Roughly one-fifth of the rural non-Indians in her study lived in poverty, compared with more than half of the Cherokee. By 2001, when casino profits amounted to $6,000 per person yearly, the number of Cherokee living below the poverty line had declined by half.”

And if you look deeper into the details, it makes me glad to say I was oh so wrong in my original thesis. It turns out, the psychiatric health affects long term on the children alone pretty much pays for the program by itself. And beyond that, the change in economic environment for al the children really relieves the stress they and their parents face everyday that improves the social outcome for all members of the household greatly.

[Just a scary science guy side note. Don’t you just fucking love that some of the best economic studies are done by epidemiologists?]

Now, consider another fact. The poor (and even the lower middle classes) basically have little or no access to leveraged capital on reasonable terms. Now I could have just said fucking loans, but I wanted to make a point. The poor have no capability to do as the rich often advise them and “…pull themselves up by their bootstraps, borrow money from mom and start a business”. But if they pool a small amount of their stipends, they possibly could fund a startup and make a life for themselves. And then, hopefully knock off a couple of sprogs and keep the whole machine a rolling along. But probably not turn into the Wolf of Wall Street, I’m guessing.

Bottom-line, economically there is a lower limit, beyond which if you sink, that direct redistribution of wealth to you, with no specific cause*, is good for society on an individual and collective basis. If we expand the amount of cash in hand of the poor, and do it for no specific reason, we will get an increase of GDP in an area where we want it spent right now, in consumption by the middle class of goods and services, then when things get better for the bulk of the economy and unemployment naturally falls, and the program costs less.

Or, at least it will until the next bubble created by rich bankers and CEOs bursts, and puts a lot of people out of work again. Remember that. It is not the workers who get rich off the bubble schemes, fraud and cronyism that the rich play with other rich that bankrupts a country. So let’s not blame the workers first when they are out of work. Let’s just pay them a stipend until they get another job of their own free will. Because they will. Most people want to work on something, and like to feel natural achievement of productivity and mastery of skills or tasks. Others want to learn a trade for the first time, or switch from one career to another, because that’s what we want them to do macro-economically to address I thing the conservatives like to call “structural unemployment” caused by technology or a shift in culture of a large population (or nation state if you want to go that far). Once again, not caused by workers’ somehow borg-like evil, when they collectively bargain.

Now, when things get better and unemployment is low, conservatives will then (with some justification) look at the remaining 3 or 4 % of the population and say, “How come I still have a large amount (in actual numbers of human beings) of people who cannot, or will not, play along with the system as designed.” It’s a fair question, and has a fair answer, that I believe can be satisfied through the assistance of additional empirical data from health, welfare and education institutions. I don’t have it at present, but am interested in examining any you have.

I suggest that the premise that any significant portion of the 3-4% that remains is indolent or criminal by nature will not be bourne out by the data. The truth is, I suspect, that a large majority of the remaining persons have a genuine problem that keeps them from working, and they just need help. And guess what? That’s OK and you are in for a full stipend of a subsistence wage as well, my friend, if that’s you.

Let’s make the stipend for the unemployed and those who cannot work high enough that they can survive, and suggest that the minimum wage set by any company be above a (non-mandatory figure). Any company that wants to pay less than the suggested minimum anywhere is free to do so, but unemployment insurance for workers will not be time limited and will be at a value that is between the subsistence rate and the suggested minimum wage (or what I call a living wage) based on their demonstrated commitment to find work, or re-skill themselves. The federal government will set the subsistence rate, and the state governments can set the suggested minimum.

Then, let’s see predatory and parasitic companies like Walmart thrive, and the population does worse, or not.

Add another crazy idea. If you earn over $200,000 in gross income a year, you have to spend at least one day (or eight hours cumulative a year) in a hotel casino with $10,000 of your money in chips. I’m not saying you have to play. Have a meal, get a massage, whatever. But spend the one day. It will be easy for most of the rich to do. I bet Warren Buffet would do it. That would probably drive tax revenues up and draw on those that can best afford to lose money gambling directly. Isn’t that what regulated casinos are for in society?

* – note that no specific cause means none stated to the applicant applying for the stipend. It would be listed as cause “not otherwise specified” in the statistics. We want no stigma attached to the application for benefits. People can self-report for disability or other categories if they so choose, but there will be an option for not specifying and getting the basis benefit.

Ever Feel Like A Mechanic . . .

Reading the news this morning from the USA, “… House passes $40 billion cut to the food stamp program over the next 10 years”, and having seen the recent news from only a couple of days ago that was analysed across the business media across the political spectrum of perspectives, as represented in the following graph leads me to that position I am in occasionally with a client, where I end up saying, “See, now here’s your problem right here”

Productivity

Now, when I read that graph I arrived at what I believe to be an obvious conclusion. Clearly, however, many of the supposed experts who examined the same data arrived the conclusion: “Yes, that was pretty effective. Now what we want to do is make sure that the poor fuckers who have gained nothing for their input in increased productivity over the last 40 years now can’t even have the pittance that has been provided food assistance to keep them going when we heap out largess to the farming industry every few years. That’s the way you balance a budget.”

Really, at this point I don’t see how any other objective conclusion could be reached other than that this is one big natural experiment in psychohistory with the following thesis: How far can you push a (lower) middle class before they actually do start rioting in the streets and stringing up bankers they can find when they loot lower Manhattan?

I mean fucking honestly. There is no one I could find disputing the data in the graph above as I have been reading about the update in the research that I first read a year ago. Sure the WSJ puts quite a different spin on it than does The Nation, but neither dispute the facts. The middle class has lost any gains due to productivity for 40 years so that those supplying capital and those that run the major companies in the world can enrich themselves vastly. And, unless there is some significant outcry and political movement in the near future, the US may actually be at the point in society where they will let the poor and working poor starve (and freeze) to death. Fuck em, right? They won’t riot, they’ll be too hungry and tired from working their two fast food jobs. And fuck the new indentured class too – those students that thought they would get a leg up by borrowing to go to uni and instead found their aren’t any jobs in their field or anything similar, and they aren’t allowed to go bankrupt so they can just fight for a couple of those Walmart jobs themselves for 30 years to pay off their debt.

What will it take until someone says directly to the power, “See what you got here is a problem with your minimum wage. Unless you raise your minimum wage, you aren’t going to reduce the need for food stamps. And if you don’t raise that minimum to something like a living wage, your middle class (that drives 70% of GDP growth) is going to disappear.”

You might also want to consider the motivation and interest in continuing to participate in a civil society for folks in the middle and lower end of the spectrum. What would motivate someone to work a job at Taco Bell and a job at 7-11 for a grinding ability to just stay out of poverty their whole life as opposed to something illegal, when clearly those who are too big to jail would call it foolish.

Then consider how there always seems to be this exasperated search for motive when someone brings a shotgun into the office. I wonder if a society so steeped in inequity and so desperate to maintain access to guns doesn’t realise how close it is to an MO for a mass murder on a daily basis. Sure, you could say that all these people are random crazies, but then they aren’t covered for mental health care or even institutionalisation since Reagan’s time either. You are just getting used to how bad things have gotten for the majority, how disconnected ‘leaders’ are from subjects, and only lack a spark to set a lot on fire.

The Counterfactual

Scientists can tend to be a bit dour. We mean to be, because the evidence in which we work is often based in misery as a means of defining what NOT to do rather than what TO do. So, it is interesting and encouraging to see evidence of sustainability (in this case in relation to biodiversity) does have an effect, or is at least correlated with you making more money. I am are sure their are limitations to the function that exists, and I am sure their are outliers (can’t imagine Jabba the Rinehart being interested in sustainability), but there does appear to be evidence that you can be financially well off and have a thriving environment.

biodiversity

Campaign Launch

Well, Sgt Hulka officially launched the campaign in Perth this morning with a hearty eggs on toast breakfast while answering questions from interested constituents in East Perth, followed by developing a campaign launch video and then did some one on one campaigning and distribution of policy materials. Although, I still need someone to explain to me why launch typically occurs with just one week to go in the election cycle.

Its been a hard four weeks and my feet are killing me, but plenty yet to do in the last week, including maybe a couple more of these:

Campaign video 1