Thursday, April 30, 2020

Will We Repeat the Mistakes of 1918?

One of the costliest lessons to emerge from the Spanish Flu of 1918 is that pandemics often come in waves over a span of 12 to 18 months and the second wave tends to be the deadliest.

It's claimed that, after the first wave during the spring of 1918, the guard was dropped.  People went about their lives, business as usual, lots of mingling. That, we're told was all the virus needed to come roaring back with a murderous vengeance in the fall of that year.

Half a billion people, one out of three at that time, became infected. Some 50 million died.

The lesson of the Spanish Flu seems to be 'don't let down your guard.' It's not a 'one and done' contagion. You have to anticipate a second, even a third wave and how we act during the hiatus can influence the severity of the subsequent wave.

Now we're poised to put those warnings to the test. We're not even through the first wave and already some governments want a return to business as usual. They argue that we must breathe life back into the economy lest it be permanently damaged. There is a legitimate argument to be made for their position, risky as that may be.

As lockdowns are lifted we'll be treated to the influence of creeping normalcy, social amnesia. Today even the direst warnings are flushed down the memory hole, forgotten, within a matter of days.  The more threatening or inconvenient, the faster we manage to purge them from our consciousness. We've become quite adept at this coping mechanism in the age of climate breakdown. It's a technique equally suited to a pandemic.

It seems we're in for that dreaded second wave this fall. There will probably be no vaccine by then although there are encouraging reports of various anti-virals that may reduce Covid-19's lethality. Let's hope so.

The Case Against Bailouts

The Guardian's George Monbiot doesn't support government handout/bailouts to corporations, especially airlines and fossil energy giants. No surprise there. That said, he makes a good case.

Before I get into Monbiot's arguments, let's go back to 2015 and the Paris climate summit where the nations gathered agreed that we must limit global heating not to 2 degrees Celsius but to just 1.5 degrees Celsius to avert catastrophic climate breakdown.

In attendance was one of Europe's top climate scientists, Hans Joachim Schellnhuber, head of the Potsdam Institute and climate advisor to Angela Merkel and Pope Francis. He agreed that the new target was essential and was feasible but warned it would require the "induced implosion" of the fossil energy industry. Governments would have to shut down the fossil energy giants and invest heavily in the development of clean energy alternatives.

Here we are, five years later, with a different emergency on our hands, a pandemic. A highly contagious but invisible virus that is, in the span of just a couple of months, ushering in massive changes/disruptions. It is threatening the very underpinnings of our neoliberal, free market economy and has governments scrambling to avert another collapse.

Back to Monbiot who contends our leaders are focusing on the wrong priorities.
Do Not Resuscitate. This tag should be attached to the oil, airline and car industries. Governments should provide financial support to company workers while refashioning the economy to provide new jobs in different sectors. They should prop up only those sectors that will help secure the survival of humanity and the rest of the living world.

They should either buy up the dirty industries and turn them towards clean technologies, or do what they often call for but never really want: let the market decide. In other words, allow these companies to fail.
A recent survey by Ipsos of 14 countries suggests that, on average, 65% of people want climate change to be prioritised in the economic recovery. Everywhere, electorates must struggle to persuade governments to act in the interests of the people, rather than the corporations and billionaires who fund and lobby them. The perennial democratic challenge is to break the bonds between politicians and the economic sectors they should be regulating, or, in this case, closing down.
The current crisis gives us a glimpse of how much we need to do to pull out of our disastrous trajectory. Despite the vast changes we have made in our lives, global carbon dioxide emissions are likely to reduce by only about 5.5% this year. A UN report shows that to stand a reasonable chance of avoiding 1.5C or more of global heating, we need to cut emissions by 7.6% per year for the next decade. In other words, the lockdown exposes the limits of individual action. Travelling less helps, but not enough. To make the necessary cuts we need structural change. This means an entirely new industrial policy, created and guided by government.
Be honest. Do you see the Trudeau/Morneau juggernaut having the sort of epiphany such a transformation would require? Remember, the Tories would be worse, much worse.
We have stimulated consumption too much over the past century, which is why we face environmental disaster. Let us call it a survival package, whose purpose is to provide incomes, distribute wealth and avoid catastrophe, without stoking perpetual economic growth. Bail out the people, not the corporations. Bail out the living world, not its destroyers. Let’s not waste our second chance.

Wednesday, April 29, 2020

I Sat On This All Day. Okay, Here It Is.

A choral group consisting of Toronto physicians, "Voices Rock Medicine" - men need not apply - singing "Rise Again." (the Rankins, 1993)

And, Vancouver's offering, the Phoenix Chamber choir.

Is it just me or does this seem the moment for some anthemic music just to keep the magic of civilization from extinction? Seriously, anybody else see that?

Maybe a few songs to remind us of what most of us, no matter the side, revere in this country is a crucial first step. We do write these really great songs. We just have to make them "our" songs. Canada 2000, Covid-19, what better time for those fed up with the past 30-40 years of neoliberalism, for a worthy anthem?

Here's an Idea. Stop Eating Bats.

By now, Covid-19 has become a household term. What about Covid-20, 21, 22, 23 or Covid-24?

Researchers have found at least six new strains of coronavirus in bats. Some speculate there could be a thousand. SARS, remember that? Yeah, a coronavirus strain that is believed to have originated in bats.
The researchers discovered the viruses while surveying bats in Myanmar as part of a government-funded program called PREDICT to identify infectious diseases that have the potential to hop from animals to humans. And bats are prime suspects, as the mammals are thought to host thousands of yet-to-be-discovered coronaviruses. SARS-CoV-2, which causes the disease COVID-19, is also thought to have originated in bats before taking up residence in humans, possibly taking a detour through some intermediary host first.
Bats, "a reservoir of rapidly reproducing and highly transmissible viruses."
The Sars-CoV-2 virus almost certainly originated in bats, which have evolved fierce immune responses to viruses, researchers have discovered. These defences drive viruses to replicate faster so that they can get past bats’ immune defences. In turn, that transforms the bat into a reservoir of rapidly reproducing and highly transmissible viruses. Then when these bat viruses move into other mammals, creatures that lack a fast-response immune system, the viruses quickly spread into their new hosts. Most evidence suggests that Sars-CoV-2 started infecting humans via an intermediary species, such as pangolins.

“This virus probably jumped from a bat into another animal, and that other animal was probably near a human, maybe in a market,” says the virologist Prof Edward Holmes of Sydney University. “And so if that wildlife animal has a virus it’s picked up from a bat and we’re interacting with it, there’s a good chance that the virus will then spread to the person handling the animal. Then that person will go home and spread it to someone else and we have an outbreak.”
Bats for sale at a live animal market in Indonesia:

Mmmm, tasty, eh?

In 2007, America's National Institutes of Health released a report finding there are plenty of coronavirus strains in North America's bat populations.

To determine whether bats in North America also harbor coronaviruses, we used reverse transcription–PCR to detect coronavirus RNA in bats. We found coronavirus RNA in 6 of 28 fecal specimens from bats of 2 of 7 species tested. The prevalence of viral RNA shedding was high: 17% in Eptesicus fuscus and 50% in Myotis occultus. Sequence analysis of a 440-bp amplicon in gene 1b showed that these Rocky Mountain bat coronaviruses formed 3 clusters in phylogenetic group 1 that were distinct from group 1 coronaviruses of Asian bats. Because of the potential for bat coronaviruses to cause disease in humans and animals, further surveillance and characterization of bat coronaviruses in North America are needed.
And then there's fungus Histoplasma capsulatum. It's a lung infection that can be caused by walking in bat caves and releasing spores from bat guano. Some believe it's the etymological origin of "bat shit crazy."

The lesson is 1), don't eat bats, and 2), if you see a bat cave don't go stirring up shit.

Tuesday, April 28, 2020

This Is What You're Up Against. Why Neoliberalism Must Go.

It's useful, every now and then, to reflect on what we're up against. Today, that's the neoliberal order. To some, neoliberalism has become just another dirty word. Neoliberalism = bad. Puppy dogs = good, I suppose. Failing to recognize just how embedded neoliberalism has become in so many aspects of our lives is dangerous. Think of neoliberalism as "our failing trajectory."

The value system of neoliberalism, which has since become entrenched in global mainstream discourse, holds that humans are individualistic, selfish, calculating materialists, and because of this, unrestrained free-market capitalism provides the best framework for every kind of human endeavor. Through their control of government, finance, business, and media, neoliberal adherents have succeeded in transforming the world into a globalized market-based system, loosening regulatory controls, weakening social safety nets, reducing taxes, and virtually demolishing the power of organized labor. 
The triumph of neoliberalism has led to the greatest inequality in history, where (based on the most recent statistics) the world’s twenty-six richest people own as much wealth as half the entire world’s population. It has allowed the largest transnational corporations to establish a stranglehold over other forms of organization, with the result that, of the world’s hundred largest economies, sixty-nine are corporations. The relentless pursuit of profit and economic growth above all else has propelled human civilization onto a terrifying trajectory. The uncontrolled climate crisis is the most obvious danger: The world’s current policies have us on track for more than 3° increase by the end of this century, and climate scientists publish dire warnings that amplifying feedbacks could make things far worse than even these projections, and thus place at risk the very continuation of our civilization. 
But even if the climate crisis were somehow brought under control, a continuation of untrammeled economic growth in future decades will bring us face-to-face with a slew of further existential threats. Currently, our civilization is running at 40% above its sustainable capacity. We’re rapidly depleting the earth’s forests, animals, insects, fish, freshwater, even the topsoil we require to grow our crops. We’ve already transgressed three of the nine planetary boundaries that define humanity’s safe operating space, and yet global GDP is expected to more than double by mid-century, with potentially irreversible and devastating consequences
In 2017 over fifteen thousand scientists from 184 countries issued an ominous warning to humanity that time is running out: “Soon it will be too late,” they wrote, “to shift course away from our failing trajectory.” They are echoed by the government-approved declaration of the UN-sponsored IPCC, that we need “rapid, far-reaching and unprecedented changes in all aspects of society” to avoid disaster.
Can you read that and not get a faint whiff of serfdom? That's what neoliberalism has wrought and a lot of it has been engineered by well intentioned people, including our current prime minister. Justin Trudeau is a champion of perpetual exponential growth through free trade neoliberalism. Does it really matter if he's well intentioned or malevolent? A bit maybe but not much. No matter how well intentioned, neoliberalism offers no future for humanity.

You might have heard that documentary film maker and social activist, Michael Moore, has caused an uproar in environmentalist ranks with his new film, "Planet of the humans." You can watch it free on YouTube at that link.  Moore thinks his argument is urgent enough that his documentary should be given away.

Moore has been widely criticized for undermining the campaign against fossil fuels and the drive to transition to alternative, clean energy.  Critics say he's using discredited arguments hatched by the fossil fuel industry to attack guys like Bill McKibbon, Al Gore, even Michael Mann.  My sense of Moore's attack is that he sees the fight against climate breakdown as a distraction that keeps us from seeing the truly dire threats - overpopulation and rapacious, excess consumption.  But, at the end of the day, this has become a circular firing squad.

Those who have followed this blog these past fourteen years probably know my position - they're both right. Climate breakdown, overpopulation and the exhaustion of the biosphere through over-consumption are all existential threats. When you face existential threats you must resolve all of them or you will solve none of them. And, yes, humanity is now confronted with multiple, existential threats.

One of my favourite climate scientists is Colombian-born, Canadian and American-educated, Camilo Mora who heads a climate research lab at the University of Hawaii.

I was delighted when, in July, 2014, in an interview with YaleEnvironment360, Mora broke the taboo against venturing outside the bounds of climate science.

I grew up in a country where there has been a long history of violence. We have been in war for 50 years, and one thing people don’t realize is what it means to be in a place where anyone can get shot at any moment, where people are starved to death, where there is not enough food to feed people. In the first world, people don’t know how rich they are, and they don’t realize what is happening in the rest of the world. And for me that’s a driving force. It’s scary to think about climate change because when we start damaging physical systems and the carrying capacity of physical systems to produce food, people will react to this in a terrible way. I’m telling you, I have seen it in my own country. It’s very negative the way in which people react to hunger. And that’s one of the things that’s most frightening to me with this large-scale analysis — the fact that I know we’re on our way to some very disturbing scenarios if we go down this pathway of damaging physical systems in the ways that we are today.
On speaking out about overpopulation.
Well, it’s paramount because people need food. And the planet is limited in the amount of resources that it can produce. We already have calculated that the planet has on the order of 11 billion hectares that can be harvested in a sustainable manner. Of course we can increase the number by increasing technology, but that’s been happening for the last three decades. The worldwide population is 7 billion people, and we know that to sustain a human being you need on the order of two hectares per person. That means that the world human population every year consumes on the order of 14 billion hectares. The planet only has eleven to give to us. Every year, we consume in excess of three billion hectares. What I’m suggesting is to inform people about the environmental and social costs of having a child.

e360: In a paper in Ecology and Society, you were quite critical of the conservation biology community and the Intergovernmental Panel on Climate Change for not talking about the issue of overpopulation. Why, in your estimation, don’t they talk about this issue? What is holding them back? 
Mora: It’s pure fear. It seems amazing, but friends of mine recommended to me not to publish that paper. They said, “This paper is going to be damaging to you. You don’t get it. You don’t need it.” What is remarkable, though, is that after the paper got published, I had multiple people calling me to endorse it. 
e360: Did they endorse it publicly? 
Mora: No, just to me. This is really the problem. But why we don’t take it on? I have no clue. Because the data are very clear. I guess the problem is that it can backfire. We have seen, historically, situations in which a scientist has taken on an issue and there are people who have been fired, or attacked by interest groups. So I guess the problem is fear of retaliation.
In his own way, Michael Moore seems to attack the climate science/advocacy types for taking all the oxygen out of the room, ignoring overpopulation and over-consumption/perpetual growth. That's a fair complaint. However, trading elbows isn't a solution.

Whether it's overpopulation, exponential growth or climate breakdown, there's only one question, only one answer. Is humanity willing to live within the finite limits of our environment, our one and only biosphere, Planet Earth? If it's not 'yes,' then our answer is 'no.' If we are willing to live within the limits of our biosphere we are willing to survive. If we're not, we've chosen something else. If the answer is "yes" then we can figure out with great precision and certainty the limits within which we must live. Once we know those limits it's a matter of who gets what and who gives up how much. The debate after that is about fairness and equality. Maybe we can do the right thing. Maybe it's not already too late.

Monday, April 27, 2020

Cabin Fever?

Anyone who has spent time in a cabin on an isolated mountain lake knows it's an unforgettable experience. Not for everyone perhaps but being that deeply immersed in nature is like entering an entirely different world.

Self-isolation in the midst of pandemic shares little in common with that mountain retreat. It's more akin to house arrest. It is an obligation, not your idea of a good time. It carries burdens - uncertainty about the future of your loved ones, your friends, of course yourself, what awaits when the pandemic finally leaves in six or twelve or eighteen months. You can't come and go as you wish. You can't do what you wish. An outing is when you foray out, once every week or two, to replenish the pantry with staples, produce and other perishables.

Circumstances vary. Some do it alone, true isolation akin to solitary confinement. Some go through it with a loved one. Others share it with a family unit. Each brings its own stresses.

An Angus Reid survey finds that half of Canadian respondents report some deterioration in their mental health due to the pandemic. Ten per cent report "a lot" of mental deterioration. 

New data paint a picture of a nation whose optimism and resilience has been literally depressed by the events of the last month-and-a-half. 
Half of Canadians (50%) report a worsening of their mental health, with one-in-ten (10% overall) saying it has worsened “a lot”. 
Asked to describe how they have been primarily feeling in recent weeks, Canadians are most likely to say they’re worried, (44%), anxious (41%) and bored (30%), although fully one-third (34%) also say they are “grateful”. 
The combination of deteriorating mental health and ongoing financial troubles at the household level creates a portrait of how the nation is faring through the crisis. 
Canadians fall into four main categories as part of the Angus Reid Institute’s COVID-19 Impact Index: those who are Managing Well mentally and financially, those who are Mentally Struggling, or Financially Struggling, and those who are Hardest Hit, feeling the effects of both factors worse than anyone else.
The full report is available here.

Who knows how we'll cope in the months ahead. I think it's quite possible we will become inured to these impositions, perhaps less fearful, possibly even a bit more resilient as we learn we can and will survive this virus and its impacts. We will come around just as other populations have done in even more dangerous, more stressful and more uncertain times in the past.

The good news from the Angus Reid report - three-quarters of respondents no matter in which group they fall believe it is too soon to lift restrictions on businesses and public gatherings.

Sunday, April 26, 2020

What Happens If We Get This Wrong?

Medical science contends that viral pandemics come in waves. The 1918 Spanish Flu claimed 30,000 lives in New York City. 20,000 of those deaths occurred in the second wave, in the fall of 1918.

The first wave, in the spring of that year, saw New York health officials implement measures very similar to what we're doing today - social distancing, quarantines, face masks - they even outlawed spitting which, apparently, was a common practice of the day. No spitting. Sounds like a pretty good idea.

New Yorkers went along with these measures but they didn't like it. And so, when the first wave abated, many took it as a "one and done" problem and went back to the old familiar ways. It was still wartime, after all, and civic leaders worried about sapping public morale.

On Armistice Day, November 11, people were not reluctant to swarm the streets, nary a mask to be seen.

The medical community warns that a second Covid-19 wave is more than just possible. It's anticipated that we'll be dealing with Covid-19 and the seasonal flu at the same time. Nobody seems quite sure which will be worse. That makes planning awfully difficult. And, uncertainty plays into the hands of those who want restrictions eased or canceled.

Governments are wrestling with competing interests, particularly the economy versus health safety. There's no good answer, no magic bullet. A balance has to be struck somewhere. Unfortunately, governments don't handle these emergencies very well. This brings to mind a report out of the EU in 2013 that concluded that governments often intervene too late costing lives and economic loss.
The peer-reviewed study, which is aimed to improve understanding of scientific information, looks at 18 areas including radiation from mobile phones, birth control pills in the aquatic environment, and invasive species. It found that governments often introduced laws much too late to prevent deaths and massive financial costs, but were highly likely to ignore scientific warnings and resist any regulation. The authors found more than 80 cases where no regulation was introduced when it later turned out that the risk from a technology or chemical was real, or still unproven.
A failure to act in an optimally timely fashion is a common complaint about how all save a few governments responded to Covid-19. Our federal government was spared scathing criticism by the rolling horror story we watch unfolding next door in Trumpland.  That's not to say Ottawa can rest on any laurels. We need to up our game - now. Even existential threats tend to go unnoticed.
But if something hasn’t yet happened, there is a deep-seated temptation to act as if it’s not going to happen. If that is true of an event, like this pandemic, that will kill only a tiny fraction of the world’s population, it’s even more the case for what are known as existential threats. There are two definitions of existential threat, though they often amount to the same thing. One is something that will bring a total end to humanity, remove us as a species from this planet or any other. The other, only slightly less troubling, is something that leads to an irrevocable collapse of civilisation, reducing surviving humanity to a prehistoric state of existence. 
An Australian based at Oxford’s Future of Humanity Institute, [Toby] Ord is one of a tiny number of academics working in the field of existential risk assessment. It’s a discipline that takes in everything from stellar explosions right down to rogue microbes, from supervolcanoes to artificial superintelligence. 
Ord works through each potential threat and examines the likelihood of it occurring in the next century. For example, the probability of a supernova causing a catastrophe on Earth he estimates to be less than one in 50m. Even adding all the naturally occurring risks together (which includes naturally occurring viruses), Ord contends that they do not amount to the existential risk presented individually by nuclear war or global heating.
Most of the time, the general public, governments and other academics are largely content to neglect most of these risks. Few of us, after all, enjoy contemplating the apocalypse.
One of those who does run the math on apocalypse is Martin Rees, Britain's Astronomer Royal, and former head of the Royal Society. You might say he wrote the book on it - "Our Final Hour, A Scientist's Warning: How Terror, Error, and Environmental Disaster Threaten Humankind's Future in This Century - on Earth and Beyond."  In the book, Baron Rees details a plethora of threats, most of them man-made, that will determine whether humanity survives the 21st century. When they're taken together, he gives us a 50/50 chance:
“I’m worried,” he says, “simply because our world is so interconnected, that the magnitude of the worst potential catastrophes has grown unprecedentedly large, and too many have been in denial about them. We ignore the wise maxim ‘the unfamiliar is not the same as the improbable’.”
The good news is that it's considered unlikely that humanity could be felled by a pandemic.
Pandemics and natural disasters might cause colossal and catastrophic loss of life, but Dr Nick Bostrom, director of Oxford's Future of Humanity Institute, believes humanity would be likely to survive.
This is because as a species we've already outlasted many thousands of years of disease, famine, flood, predators, persecution, earthquakes and environmental change. So the odds remain in our favour. 
And in the time frame of a century, he says the risk of extinction from asteroid impacts and super-volcanic eruptions remains "extremely small". 
Even the unprecedented self-inflicted losses in the 20th Century in two world wars, and the Spanish flu epidemic, failed to halt the upward rise in the global human population.
If that's the feelgood reassurance out of the way, what should we really be worrying about? 
Dr Bostrom believes we've entered a new kind of technological era with the capacity to threaten our future as never before. These are "threats we have no track record of surviving".
Likening it to a dangerous weapon in the hands of a child, he says the advance of technology has overtaken our capacity to control the possible consequences.

Experiments in areas such as synthetic biology, nanotechnology and machine intelligence are hurtling forward into the territory of the unintended and unpredictable. 
Synthetic biology, where biology meets engineering, promises great medical benefits. But Dr Bostrom is concerned about unforeseen consequences in manipulating the boundaries of human biology. 
Nanotechnology, working at a molecular or atomic level, could also become highly destructive if used for warfare, he argues. He has written that future governments will have a major challenge to control and restrict misuses.
Lord Rees has been instrumental in the establishment of the Centre for the Study of Existential Risks at Cambridge. Both institutes seem to agree that humanity faces grave, truly existential dangers whether technological, biological or environmental and they agree that the key to managing these risks is global cooperation on levels we have never experienced. It's a situation where one or two holdouts can undermine the best efforts of all others.

Unfortunately the level of global collaboration these experts envision depends on an even greater level of global trust. There's precious little sign of that on the horizon. We seem to have arrived at a time of deep suspicion bordering on paranoia whether it's who is up to what with 5G or whether a virus was weaponized. Whatever it is, somebody will find a way to game it.

Friday, April 24, 2020

They Don't Matter Much to Ottawa But They're Cherished Out Here.

From dwindling salmon stocks, to fish farms and supertankers, Ottawa sees the BC coast as just something to be monetized.  Yes, yes, Vancouver is Canada's largest port, our commerce gateway to Asia, but it's time to rein in these predatory policies before the orca go the way of the plains bison.

Thanks, Avi. Thanks a Lot.

The chair of Harvard's astronomy programme, Avi Loeb, has taken the opportunity served up by the pandemic to burst our illusions.
Following a century of scientific and technological advances that triggered unprecedented economic growth, our civilization perceived its superiority over nature as undisputed. 
Like corrections to irrationally exuberant stock markets, however, COVID-19 is a correction to human hubris. Nature is teaching all humans, rich and poor, to be humble. Although we thought we can manipulate nature at our will, here comes a primitive coronavirus with negligible information content relative to our brain, threatening to kill us and wreck our economy, causing as much damage from the side effects triggered by our societal reaction to it as from its direct medical impact. 
Personally, I practiced social distancing long before it became trendy. In my mind, it was evident before the appearance of COVID-19 that we are fundamentally “monads” as envisioned by the philosopher Gottfried Leibniz, despite illusive notions of empowerment that stem from groupthink. Social distancing benefits free thinking. Isaac Newton did his best scientific work while staying home with his parents at Woolsthorpe during the Great Plague of London in 1665–66, when Cambridge University closed down. Over a year of independent work, he developed calculus, optics and realized the nature of gravity.
Then, Herr Doktor Loeb, drops the hammer, pointing out that this virus may be a minor annoyance compared to the threats, locked and loaded, that will confront mankind this century. He writes we should be grateful just to be here. That we're here at all is a fluke.
The most fundamental lesson is simple. We must treasure all the good that nature gives us rather than take it for granted, because it can easily disappear. Over the next century, trillions of dollars could be lost not just from pandemics like COVID-19 but also from major solar flares or asteroid impacts. We’d better prepare protections for those before they hit us. 
On longer timescales, even bigger catastrophes might occur, such as explosions of nearby stars or a brightening of the sun that will boil off our oceans less than a billion years from now. 
As I told students over Zoom in my freshman seminar at Harvard last week, life as we know it is merely an afterthought in the global scheme of the cosmos. The universe started off consisting mainly of hydrogen and helium. Heavy elements like carbon and oxygen, which enable the chemistry of life, are the “ashes” from nuclear burning in the hot cores of stars. Our transient existence has lasted for less than 10 one-billionths of cosmic history so far on a tiny rock we call Earth, surrounded by a vast lifeless space. We should be thankful for the fortuitous circumstances that allow us to exist, because they will surely go away one day, with or without COVID-19.

A Bit of Perspective

As Washington's spending on the Covid-19 pandemic creeps toward $3 trillion, it can be really hard to make sense of that much money.

What to use for comparison? Oh, I know. How about American spending on the War on Terror since 9/11/2001?  Roughly 20 years of high-tech mayhem and devastation.

It is estimated that, since the terrorist attacks of September 11, 2001, the global war on terror will cost the United States government just over 5.4 trillion U.S. dollars. This figure includes estimates of all budgetary spending related to the war on terror between FY 2001 and FY 2020. 
This figure of 5.4 trillion does not include the ongoing medical and disability expenditure for veterans beyond FY 2020, which is estimated to cost an additional one trillion U.S. dollars by FY 2059.
Let's hope America gets more bang for its buck out of the pandemic spending spree than it has achieved over 20-years of permawar in the Middle East.
Then again, Congress can't let that much money pass through its hands without larding a few pantries along the way. It wouldn't be American.

You Have to be Shitting Me - Friday Edition

As America rides the Covid-19 tiger, the lunatic-in-chief is in freefall.

Apparently a letter reached Loon One this week from a guy pitching bleach as a cure-all for the virus and it went straight to what remains of his brain.
The leader of the most prominent group in the US peddling potentially lethal industrial bleach as a “miracle cure” for coronavirus wrote to Donald Trump at the White House this week. 
In his letter, Mark Grenon told Trump that chlorine dioxide – a powerful bleach used in industrial processes such as textile manufacturing that can have fatal side-effects when drunk – is “a wonderful detox that can kill 99% of the pathogens in the body”. He added that it “can rid the body of Covid-19”.
And then, this:

That sent the maker of Lysol to respond, warning the public that bleach won't do anything but kill them. 

That's Okay, We're Willing to Settle

So many headlines scream that 'this changes everything' or 'we can't go back' or 'normal is over.'  Sure, four decades of neoliberalism have left us in a real mess. This pandemic, enormous as it appears, a viral Sword of Damocles hanging over everyone's head, isn't the only and certainly not the most dangerous threat we're facing. Think of it as Peril 101, Introduction to a Challenging Century.

Covid-19 will teach us many things. We will explore the pitfalls of the global economy. We will test the limits of our government and how, when we need it to boldly lead it instead lags and follows timidly. In the third part of the class we get to the really good stuff - you. Well, you and me, us.

We talk a good game. Everything must change. We can't go on like this. Look where all of this has gotten us! We deserve better.

Yeah, sure.  If you share those sentiments, ask how such fundamental change is going to happen? Who are the agents of change? What would this widely heralded change look like?

What if we emerge from the pandemic with little appetite for the uncertainty and dislocation that change carries? What if we just want to go back?
The definition of “normal” might be hard to pin down, but its function is pretty clear: normal is safe. It’s familiar. In the aftermath of the devastation of World War One, Warren Harding’s presidential campaign promise was simple: “America's present need is not heroics, but healing; not nostrums, but normalcy.” Harding knew Americans wanted to get back to life as they knew it before war disrupted the flows and rhythms of their daily lives. He understood that in the face of fear, people long to go back to a time before the fear set in. His rhetoric connected with the public, which voted him into the White House on 2 November 1920.
What if, by the time this pandemic passes and government sounds the 'all clear' what we're doing now has become our new normal? What if there is no normal?

The biggest engine of change is us, humanity. In the postwar era we have gone from under 2.5 billion to now closing in on 8 billion and, in the minds of some, heading to 10 billion, perhaps more. Humanity's footprint has come at a cost that has been borne, wherever possible, by other species. Since the Reagan-Thatcher era the overall populations of both terrestrial and marine creatures have plummeted by half and more.  As our numbers metastasized, we deprived other species of the habitat and resources needed to support their former populations.  As Joni Mitchell sang in 1970, "they paved Paradise to put up a parking lot." We have transformed life on Earth for all living creatures and, along the way, our sense of normal became exceedingly flexible.

We don't process normalcy very well. It's not human nature. It took humanity thousands of years to first reach a billion in population. For centuries you could expect to live and die as your grandparents did and as their grandparents did. You could expect to earn what they got paid. Life was short, often brutal, but it was predictable. You didn't have to worry much about change. Resource exhaustion, global warming, ocean acidification, deforestation, desertification, the collapse of global fisheries - those have been added to the human agenda only recently.

How did we not notice the end of normalcy as a guiding force?  UCLA prof, Jared Diamond,
"Perhaps the commonest circumstance under which societies fail to perceive a problem is when it takes the form of a slow trend concealed by wide up-and-down fluctuations. The prime example in modern times is global warming. we all know, climate fluctuates up and down erratically from year to year. ...With such large and unpredictable fluctuations, it has taken a long time to discern the average upwards trend of 0.01 degree per year within that noisy signal. 
"Politicians use the term "creeping normalcy" to refer to such slow trends concealed within noisy fluctuations. If the economy, schools, traffic congestion, or anything else is deteriorating only slowly, it's difficult to recognize that each successive year is on the average slightly worse than the year before. It may take a few decades of a long sequence of such slight year-to-year changes before people realize, with a jolt, that conditions used to be much better several decades ago. 
"Another term related to creeping normalcy is "landscape amnesia"; forgetting how different the surrounding landscape looked 50-years ago, because the change from year to year has been so gradual."
Creeping normalcy, landscape amnesia - that's human nature honed over thousands of years. If you had been in a coma for decades and came to with a grasp of normalcy pegged to, say, 1970, you might want to go back into that coma. The world of 2020 would appear a mysterious, scary and dangerous place indeed. We have no sense of that mainly because the world of 1970 holds no reality for us. We carry no awareness of the gains and losses, no metrics by which to gauge our condition.

Yes, we desperately need another Enlightenment, a reformation, a renaissance but it's not in the cards. No one is going to offer it and few, if any, will demand it. Even if it's just getting back to the Thursday night bowling league, we'll settle.

Thursday, April 23, 2020

The "Marie Antoinette" of the U.S. Senate

It was a Republican Congressman from New York, Peter King, who first branded Senate majority leader, Mitch McConnell, the Marie Antoinette of the American Senate.

Mr. King was responding to remarks made by the reptilian McConnell that states hardest hit by Covid-19 should simply declare bankrutpcy.
"McConnell's dismissive remark that States devastated by Coronavirus should go bankrupt rather than get the federal assistance they need and deserve is shameful and indefensible," King said. "To say that it is 'free money' to provide funds for cops, firefighters and healthcare workers makes McConnell the Marie Antoinette of the Senate."
McConnell had another Marie Antoinette moment when he asked why Congress should respond to what is mainly a "blue state" problem. McConnell's office issued a statement describing the idea as a "Blue State bailout." This drew a quick rebuke from New York governor, Andrew Cuomo.

If it wasn't so deadly serious it would be laughable to watch Trump stand before the White House press corps to spar with America's top medical experts over the pandemic.

Americans celebrate the Boston Tea Party where disaffected colonials rose up to proclaim "no taxation without representation." The Blue States contribute far more to the federal treasury than the Red States yet it is the Red States that are the beneficiaries of Washington's gravy train.  Add to this the fact that the heavily populated Blue States with the nation's strongest economies aren't fairly represented in the Senate which is thereby used by McConnell and company as a cudgel against them and one may wonder how frayed America's national unity is becoming?

Tuesday, April 21, 2020

In Case You Forgot About It, We're Still Facing a Climate Crisis.

The shockwaves of the pandemic and the oil crisis have caused the climate crisis to recede from the public conversation. We may have other things on our mind but the climate breakdown proceeds apace.

For a week or more, reports have come in about new research showing a megadrought might have set in across the American southwest whose states have seen massive population growth in recent decades.

The American West is well on its way into one of the worst megadroughts on record, a new study warns, a dry period that could last for centuries, and spread from Oregon and Montana, through the Four Corners and into West Texas and northern Mexico. 
Several other megadroughts, generally defined as dry periods that last 20 years or more, have been documented in the West going back to about 800 A.D. In the study, the researchers, using an extensive tree-ring history, compared recent climate data with conditions during the historic megadroughts.

They found that in this century, global warming is tipping the climate scale toward an unwelcome rerun, with dry conditions persisting far longer than at any other time since Europeans colonized and developed the region. The study was published online Thursday and appears in the April 17 issue of the journal Science.
Human-caused global warming is responsible for about half the severity of the emerging megadrought in western North America, said Jason Smerdon, a Columbia University climate researcher and a co-author of the new research.

"What we've identified as the culprit is the increased drying from the warming. The reality is that the drying from global warming is going to continue," he said. "We're on a trajectory in keeping with the worst megadroughts of the past millennia."

The regional drought caused by global warming is plain to see throughout the West in the United States. River flows are dwindling, reservoirs holding years worth of water supplies for cities and farms have emptied faster than a bathtub through an open drain, bugs and fires have destroyed millions of acres of forests, and dangerous dust storms are on the rise.
Smerdon said he's also concerned that the drought impacts are being underestimated because of an over-reliance on groundwater as a temporary buffer to the decline of river flows, and the drop of reservoir water levels. If you look at simultaneous droughts in North and South America, he said, you could also anticipate potential impacts to global food supply networks, as both regions are important for agricultural production.
Eight years ago I posted about an article in Harper's magazine, "Broken Heartland, the Looming Collapse of Agriculture on the Great Plains." The author focused on the Ogallala or High Plains aquifer that underlies eight States comprising America's 'wheat belt.' Here are a few excerpts:
"Sprawling beneath eight states and more than 100 million acres, the Ogallala Aquifer is the kind of hydrological behemoth that lends itself to rhapsody and hubris. Ancient, epic, apparently endless, it is the largest subterranean water supply in the country, with an estimated capacity of a million-billion gallons, providing nearly a third of all American groundwater irrigation. If the aquifer were somehow raised to the surface, it would cover a larger area than any freshwater lake on Earth - by a factor of five." 
"It wasn't until the 1940s, when a variety of new technologies coalesced on the plains, that large-scale irrigation sprang up for the first time - but from there, the transformation was quick. Within a decade thousands of wells were drilled, creating a spike in productivity as unprecedented as it was unsustainable. Land that had been marginal became dependable; land that was dependable became bountiful... 
"No one worried about the aquifer. To farmers it seemed a bottomless reserve, generating the same outlandish volume no matter how many straws went in. Soon there were hundreds of thousands of wells producing the same reliable flow, year after year, without any evident stress. 
"Then, during the early 1990s, farmers throughout the Great Plains began to notice a decline in their wells. Irrigation systems from the Dakotas to Texas dipped, and, in some places, have been abandoned entirely." 
"...For complex reasons involving wind, weather and soil composition, the Ogallala does not recharge in the way one might expect. In fact, of the eight states above the aquifer, only Nebraska, with its sandhill dunes, is permeable enough to contribute any serious replenishment."
Eight years ago the aquifer was down to its last 30 feet of water - in the lucky places.  Further research found much of the dwindling remnant is also polluted, mainly from agricultural chemicals - fertilizers, pesticides, herbicides and such.

In 2014, NASA's amazing Grace satellites produced data showing that almost every major aquifer in the world was being rapidly depleted. NASA scientists warned that, within a decade, Earth's dwindling groundwater reserves could become weaponized by neighbouring nations or even be exploited by terrorists. The rumblings are being heard down the Nile valley where Egypt is threatening efforts by its upstream neighbours to dam and divert the river to their own purposes. Egypt has warned that, if dams are built, Egyptian warplanes may be sent to destroy them. In Asia, China, Pakistan and India are jostling to secure their access to the Himalayan headwaters. Three nations, all facing critical water shortages, all nuclear armed. What could possibly go wrong.

That's our world today and for many tomorrows. Pandemics, resource (oil) wars, resource (water) wars, food insecurity and so much more. This is no time for the weak-kneed.

The Problem with Junk Oil

Canada seems likely to get knocked off its perch as the world's fourth largest petroleum exporter.  We've milked it for all it was worth but today it's worth way less than its weight in milk.

It was only a few years ago that our then freshly-minted prime minister appeared before an audience of oil men in Houston assuring them that "no country would find 173 billion barrels of oil in the ground and leave them there." Hey, Justin, wanna bet?

He is a betting man, at least when he's playing with house money. That's how we got saddled with the government's bad bet on the Trans Mountain pipeline. The bandits who owned it, former EnRon alumni, were threatening to just shut it down. They wouldn't budge even when Ottawa offered to guarantee their return on the asset. Nobody in the private sector wanted to touch it. And so Ottawa's money man reached for the government cheque book and wrote those cowboys a cheque for far more than the pipeline's actual value. Way more. Billions more.

Canada would have a massive new pipeline to "tidewater."  Justin would see to it and no solemn campaign promises would get in his way.  He got bruised and battered by the courts along the way but now he's poised to drive that puppy through all the way to Burrard Inlet and the BC coast.

The prime minister didn't foresee a pandemic that would sweep the world. No one did. I didn't. I'll bet you didn't either. Scientists did and they gave plenty of warnings but they were vague warnings of contagions, epidemics, maybe even pandemics of one sort or another, here or possibly there, at some point in the near or intermediate future.

Even though we saw emerge a glut of conventional, inexpensive oil, we had other reasons, political reasons not to give up the ship, HMCS Athabasca II. It might have been shipping water and listing by the stern but it wasn't sunk yet. If world oil prices rebounded it might even reach the safety of a port. We doubled down.

Then Covid-19 showed up and threw a wrench in the global economy that, in turn, put a big dent in the demand for oil just as a couple of major producers had weaponized oil to drive others out of the market. As their wells kept pumping oil at record speed they got ahead of recessionary markets and began running out of places to store the stuff. They had to do something with it and so, yesterday, they wound up paying about $37 a barrel to anyone who would take it off their hands. You could fill five oil tanker trucks and drive away with a cheque for $37,000 for your efforts. Pretty sweet deal.

Meanwhile, in the land of garbage oil, bitumen, it was even worse. That's not cheap oil. It's expensive oil. Some countries can produce conventional oil for $10 or $15 per barrel. Bitumen, dilbit, that costs $45 per barrel for extraction, processing and transmission to a refinery on the Gulf coast. This doesn't sound like a wonderful prospect when US refineries are paying customers to haul their superior product way.

Does this mean the end of oil? Hell no.  Globally, we've gone from a 100 million bpd habit to around 65 million bpd. But that shrinkage means there is less room to accommodate all of today's players. It's not a good time for high-carbon, high-cost, low-value junk oil such as bitumen. It's also a lousy time to have political leaders with feet of clay.

If you walk into the barn and find your prized mare lying dead in her stall, ordering a pricey new saddle won't help anything. But our government seems to have run out of ideas. Are they to blame? No, not really. They didn't trigger the oil war. They didn't create the pandemic. But they did plenty of things that were pretty damned dumb.

Andrew Nikiforuk looked at some of the collateral damage a few days ago, well before oil prices went negative.
Art Berman, one of North America’s most astute and consistently reliable oil analysts, admits the pandemic is compounding the problems of an industry and global economy already in waning health. 
“Energy is the economy, and oil is the largest and most productive part of world energy. The global economy has been dying of accumulated debt for 50 years. Coronavirus has sent it to the intensive care unit. 
“If the economic patient survives the ICU, it will need a long period of recovery and therapy before returning to its previous life.” 
Wood Mackenzie, the British consultancy, now estimates that 10 per cent of global oil production is uneconomic insanity at prices below $25 a barrel. 
Heavy oil of the sort Canada produces requires extensive upgrading and pricey transportation costs. It’s always the first to feel the pinch of any volatility because of its high cost — about $45 a barrel.
Canada, the world’s fourth largest oil exporter, banked its destiny on the export of low-grade bitumen with no strategic risk planning. As a result it will experience huge economic losses and roller-coaster volatility for its currency.

Alberta promoted over-production and pressed for new pipelines to carry the increased flow. Now, as global demand plummets, it can no longer fill the pipelines it has.

Rystad Energy, the proficient Norwegian-based analyst, has already noted that of all the world’s oil producers, Canada will be “the most affected so far.” Lacking buyers at a suitable price, it will produce well below its capabilities this year, “shutting in” nearly 1.1 million barrels per day.

Canada’s six largest banks, which loaned $58.8 billion to the Canada’s overleveraged oil industry in 2019 — a 59 per cent increase in the last five years — might quietly be panicking in board rooms at an appropriate physical distance
Robyn Allan is an independent economist who before the pandemic and oil price wars persistently challenged the economics touted to support the Trans Mountain pipeline. She foresees much trouble ahead for the industry. 
“After this crisis, things will not return to where they were. All economic activity is affected by the virus outbreak. And just like some people who catch it and move from home to hospital to ICU because of weak systems or pre-existing conditions, the tarsands were already an aging and compromised activity that was on the downside of its life cycle. Big Oil in Canada was going to be hard hit without COVID-19. With it, many companies are going to go under — and go under quickly.”
Natural gas, whose price is often tied to oil, is another sick patient on oxygen. Many analysts refer to that fuel’s price collapse as “gasmaggedon.”

Rystad Energy predicts that if low prices persist — and most forecasts suggest low prices for years — “nearly 42 per cent of Australia’s gas resources would be rendered uneconomic — a scary thought to the world’s largest gas exporter.” 
Such prospects must weigh heavily on B.C. Premier John Horgan. His government has actively subsidized the province’s faltering fracking industry, along with Shell’s LNG Canada terminal.
His province’s billion-dollar subsidies include the construction of the Site C dam to provide cheap electricity to the LNG industry. Horgan and his predecessor Christy Clark promised that an LNG windfall of revenue and jobs would justify the low royalties, loosened environmental restrictions, strained First Nations relations and gambled taxpayer money on the emerging export industry. 
Now that promise looks undeliverable, as the pandemic rocks B.C.’s economy and a healthy global LNG market recedes from view.
The Kitimat LNG project is floundering. Chevron, the lead partner, has been trying to unload its half interest for some time. Chevron took a $1.6 billion USD write down on the asset, admitting Kitimat can't compete. Chevron's partner, the Australian LNG giant, Woodside, followed by taking a $720 million after-tax writeoff.  That's the project that Christy Clark pegged as a trillion-dollar revenue windfall for the government of British Columbia.
Alaska, which garners about 34 per cent of its revenue from oil, thought the resource would be selling for $66 a barrel right now. Alberta, which depends on oil to cover 10 per cent of its budget, said it needed $58 a barrel. Nigeria, Texas, New Mexico, Iraq, Iran, Algeria, you name it — all made similar projections. 
All face plummeted prices — U.S. crude, for one example, tumbled to an 18-year low of $18 a barrel on Friday. (It went to negative $37 a barrel yesterday)
Newfoundland once boasted, in 2009, that 30 per cent of its revenue came from offshore oil. Now it is less than 10 per cent, and as runaway debt due to its hydroelectric megaproject takes its toll, that province sits on the verge of bankruptcy. 
Add Newfoundland to the list of petro-states small and large that were already wheezing before Code Blue. Now the pandemic has put them on economic ventilators with no guarantee of quick recovery.
Meanwhile Russia is racing to squeeze out North American competition from Asian gas markets. Bank of England, ex-Bank of Canada governor, Mark Carney, gave us plenty of warnings that bitumen, like coal, was in jeopardy of becoming a stranded asset - uneconomic, valueless. That was more truth than our leaders could handle. Reap the whirlwind, I suppose.

Monday, April 20, 2020

The Wheels Are Coming Off the Wagon

That''s 'funf' followed by 9 zeroes

It wasn't that long ago that we snickered at people walking around with wheelbarrows of money, just enough to buy a loaf of bread. It happened in Weimar, in Zimbabwe, in Venezuela. Chaos ensued. Are we heading down that same road to hyper-inflation?
The U.S. Federal Reserve, the Bank of England, the Bank of Japan, the European Central Bank – and, yes, the Bank of Canada, too – are pushing into areas they have never gone before, buying up a dizzying assortment of assets with newly created money. 
In the eyes of skeptics, these aggressive monetary manoeuvres risk an outburst of inflation down the road. Others, however, see the wave of money printing as simply an acknowledgment that drastic action is necessary to contain the stresses created by an imploding global economy. 
What is beyond doubt is that policy makers are going to lengths they never would have considered a few years ago – or, for that matter, even a few weeks ago.
The Fed is now the buyer of last resort for vast swaths of the U.S. debt market. Rather than lending only to stable, solvent borrowers, as central banks traditionally have, it is rushing to “backstop virtually any part of the domestic financial system in trouble,” as Oliver Jones of Capital Economics puts it. 
The Bank of Canada isn’t venturing quite as far as the Fed, but it, too, is breaking new ground. It is buying large amounts of federal government bonds – at least $5-billion of them each week – to help sop up the imposing amounts of debt Ottawa is issuing to help fund its stimulus program. 
Such bond-buying manoeuvres, known as quantitative easing or QE, are old hat for most central banks, but they are a new experience in Canada. Meanwhile, the bank has embarked on a slew of new initiatives that will see it gobble up provincial bonds and corporate debt as well.

So who is paying for this massive wave of purchases by the Fed, the Bank of Canada and others? For now, nobody. Central banks are simply crediting themselves with the funds they need. In a fiat money system, they can do so with a few key strokes.
 America's ticking time bomb.
The Federal Reserve’s balance sheet shows how dramatic the impact has been. Before 2008, the Fed held less than US$1-trillion in assets. As it bought up wonky assets during the financial crisis, and declined to reverse the purchases, its balance sheet doubled to more than US$2-trillion.

That was just the start. Waves of QE propelled the Fed’s holdings to more than US$4-trillion by 2014. Since the start of the pandemic, the balance sheet has taken another huge leap upward, expanding by a couple of trillion dollars in a matter of weeks. It now tops US$6-trillion and is continuing to grow at warp speed.
Followers of modern monetary theory or MMT, once considered a fringe school of economics, argue governments should ignore deficits and happily create as much money as is necessary to support the economy, create jobs and achieve other objectives.
Only a few months ago, MMT seemed revolutionary. Now it simply looks like a description of what central banks are already doing.
It's hard to imagine how the global economy won't be hit as confidence in national currencies fluctuates, country by country. Will reckless fiscal and monetary policy in Washington be the death knell for the greenback as the world's reserve currency?

It's the Most Popular Course in Yale's 300 Year History. Now It's Yours, Absolutely Free.

With the world seemingly in free fall mode it's not hard to get a bad case of the downers. Ivy League great, Yale, has something you might want to try and it won't cost you a dime.

There is a passage in Benjamin Hoff's 1982 classic, "The Tao of Pooh" where he perfectly outlines the major source of unhappiness in the western world, the search for the ever-elusive "Great Reward."

"Religions, sciences, and business ethics have tried their hardest to convince us that there is a Great Reward waiting for us somewhere and that what we have to do is spend our lives working like lunatics to catch up with it," he writes. 
"A way of life that keeps saying, 'Around the next corner, above the next step,' works against the natural order of things and makes it so difficult to be happy," Hoff continues. 
It's true, most of us are conditioned to believe that a state of eternal bliss is waiting for us once we get the right job, the right spouse, the right house, reach our ideal weight or finally get around to painting a masterpiece.
Yale professor Dr. Laurie Santos says that true happiness comes from an entirely different place. 
"Our minds lie to us all the time. We miswant things. We think we need to change our life circumstances to become happier," Dr. Santos said according to CNN. 
Dr. Santos' research reveals is that happiness comes from "simple practices, simple acts like making a social connection, or taking time for gratitude, or taking time to be in the present moment," she told CNN. 
Dr. Santos teaches the most popular course in Yale's 300-year history, The Science of Well Being, which teaches students how to be happy.
Now the course is yours, free of charge, via Coursera. The course begins today so clink the link and get yourself out of the dumps.

$10 Oil Bearing Down on US Markets

The world oil supply is bursting at the seams. World oil producers are running out of places to put it. The Saudis (and others) have been so backed up with product that they're forced to use supertankers, not to deliver oil but to sit at anchor, storing it.  When you're down to supertankers, you're in trouble and so is every other petro state.
In times of lockdowns and social distancing, inventories in the U.S. are soaring, storage capacity is stretching thin in many areas, producers are idling rigs and curtailing production, and some regional grades are priced so low that they could soon turn negative. In other words, producers may have to pay their customers to help them get rid of the oil they have pumped.

As if this wasn’t enough to depress U.S. benchmark oil prices, a wave of Saudi oil is making its way onto tankers, headed for America this month, various tanker-tracking data estimates show.

In early April, tanker-tracking data compiled by Bloomberg showed that Saudi Arabia – the world’s top oil exporter – was making good on its promise to flood the world with oil even as demand collapses, with a surge in tankers carrying Saudi crude to the United States.
“The pressure on storage capacity in North America is becoming intense, with the tanks at Cushing, Oklahoma, set to reach effective limits by the end of next month; companies are running out of places to put the unwanted oil that they are producing. In the physical crude markets many US blends are selling at deep discounts to WTI futures,” Ed Crooks, Vice-Chair, Americas, at Wood Mackenzie, wrote last week.
The Saudis are in trouble. The ruling House of Saud finances the entire state budget on the only thing the Saudis have that anyone is interest in buying - oil. To keep the people happy, the Saudis need to drive prices well above $70 per barrel, the same level needed by the Tar Sands. But US shale oil producers could still make money at $40 per barrel.

In a high-risk, all-or-nothing move, the Saudis decided they had to beat the "cheap oil" producers at their own game to drive them out of the markets. It was as stupid as Hitler's decision to send his best remaining panzers through the Ardennes forest in mid-December, 1944. Just as the Battle of the Bulge marked the German's last offensive of WWII, something just as disappointing now faces Riyadh.

At least the Saudis are now too broke to keep bombing public markets in Houthi-held Yemen. Sometimes things do work out for the best.

$0 Oil Has Come to Athabasca. Hey, How Are Those Pipelines Coming Along?


Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports, noting the move could have dire long-term consequences for the production facilities. 
Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production
Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel.
Oh, what's another $12-15 billion? It's money we don't have pissed away and that's all it is.

A Timely Idea

Poland and Denmark have decided that there'll be no government bailouts for corporations registered in offshore tax havens.
The Danish finance ministry on Saturday extended its bailout program into July but stressed that firms based in tax havens would no longer be covered. 
"Companies seeking compensation after the extension of the schemes must pay the tax to which they are liable under international agreements and national rules," a translation of the statement said.

"Companies based on tax havens in accordance with EU guidelines cannot receive compensation, insofar as it is possible to cut them off under EU law and any other international obligations." 
Poland took similar measures on April 8. Prime Minister Mateusz Morawiecki said large companies wanting a chunk of a roughly $6 billion bailout fund must pay domestic business taxes.

Covid-19, the Other Killer

By now everyone knows that Covid-19 attacks its victims in their anatomical boiler room - the heart and lungs. But Covid-19 has a new and very dangerous ally. These people, what I like to call the "second wave" lunatics, are all that is needed to take the pandemic to an entirely new level.

By and large they're Trump supporters and, yes, they have signs.

It's people just like these who will set America and perhaps the rest of the world on the road to a second, more deadly, wave of this pandemic.
Conventional wisdom among scientists suggests second waves of resistant infections occur after the capacity for treatment and isolation becomes exhausted. In this case the concern is that the social and political consensus supporting lockdowns is being overtaken by public frustration – which has triggered protests in the US and elsewhere – and the urgent need to reopen economies.
I hope Justin keeps this in mind when Trump comes calling demanding we re-open our borders.

Sunday, April 19, 2020

What Was It Again? Oh Yeah, This Changes Everything. Right.

If you read the funny papers you've probably come across several op-eds arguing that, in the wake of the Covid-19 pandemic or in the wake of the Covid-19 pandemic and the depression that will follow or in the wake of Covid-19 and the depression and the climate breakdown that will follow we will abandon our wicked ways, the snake headed Hydra of neoliberalism, and embark on a new path, some new world order to guide humanity through the 21st century.

It's all a bit like going to a revival meeting in a prayer tent out in some farmer's field.

The arguments for abandoning the old ways, the neoliberal order, seem sound. Hell, they've been sound for 15, probably 20 years, maybe even more. And, yes, it's been a wild ride, with some major ups and some major catastrophes. And it's still here. It's still here. The great Canadian public intellectual, John Ralston Saul, wrote neoliberalism's obituary in his book, "The Collapse of Globalism and the Reinvention of the World," in 2005.  Well, if neoliberalism was dead as JRS claimed 15 years ago, it didn't get the memo.

In 2012, Nobel laureate economist, Joseph Stiglitz, wrote "The Price of Inequality, How Today's Divided Society Endangers our Future."  The former World Bank chief economist, Stiglitz has a lifetime of work focusing on inequality and its consequences. He demonstrates that inequality today is not a merit-based phenomenon. It is a legislated outcome. The people we elect have engineered the rise of the few at the direct cost of those at the bottom. It occurs in a myriad of ways, often subtle and unnoticed, and it inflicts a myriad of costs as hard as concrete. How often, in the name of remaining competitive, has a Canadian government imported economic policies from another country that were intended plainly to benefit the few at the cost of the many?

I mention "The Price of Inequality" because it's much easier to sense that something is wrong than it is to understand what's wrong and where it all went wrong. Even though Stiglitz' book is now eight years since publication it provides an essential foundation of what we must do to restore progressive democracy.

We have to become moderately well versed in what happened when Reagan, Thatcher and Mulroney ushered in neoliberalism and the consequences inflicted on all of us. Before you can get rid of something as pervasive as neoliberalism you need an idea of what it is you want to replace it. There has to be a critical mass of demand for something else. If everybody wants something different and we can't get past that to form a powerful consensus, we will remain powerless to effect change. That was the fundamental flaw of the Occupy Movement. They had a list of grievances they wanted remedied but no agenda, no manifesto for change. There was no objective and so Occupy simply faded away.

We need to start thinking about what sort of society we want, what we want for our grandchildren. When you know where you want to go then, and only then, can you bring on change. I don't take exception with the arguments for a new world order in these op-eds but they won't get us where we need to go.

Saturday, April 18, 2020

If He Wasn't So Stupid, He Might Be Demonic.

Donald Trump is not demonic. He's stupid. He's also ignorant, psychopathic, sadistic, utterly incapable of telling the truth, and in all things unhinged but he's just too damned dumb to rise to the level of demonic. Hydrophobic? Perhaps.

Trump casts himself as the indispensable leader in America's hour of need but then disavows any responsibility when it all goes wrong. It could be said that his prime focus is on contriving how to blame others and the art of constructing straw men.

Never has this been more blatant than Trump's behaviour over the past few days. This is the mind of a man in a bunker as artillery shells rain down all around. Jonathan Chaitt writes that Trump is now cutting his own throat.

President Trump has two basic modes of governing: abnegation and abuse. Throughout the coronavirus pandemic, Trump has alternately — and, at times, simultaneously — claimed absolute authority and zero responsibility for the crisis. On Thursday, he seemed to lurch back toward abnegation, telling governors they could “call their own shots” about when to reopen public spaces, and they are also “going to lead the testing.”

The source of Trump’s peripatetic swings is his inability to competently manage the pandemic. He wants to ease up on social-distancing rules soon, but public-health officials have unanimously insisted that doing so requires an effective testing system. (Otherwise, those states could be vulnerable to new outbreaks that could spread before state authorities have the chance to stop them.) But despite Trump’s absurd lies that the United States has the best tests in the world, and that other countries are trying to copy our tests, the testing system has been in a state of shambles all along. 
That failure necessitated his decision yesterday to throw all responsibility to the states. Administration officials tell the Washington Post this posture “is largely designed to shield himself from blame should there be new outbreaks after states reopen or for other problems.”
If we take as a given that Trump’s administration is hopelessly inept, it might make sense as a desperation measure to let the governors handle everything on their own. But there is no world in which it makes sense to devolve authority to the states and then let the states collapse into fiscal ruin. 
It is not only irrational from the standpoint of the national interest, but it is irrational from the standpoint of Trump’s political interest. The president wants and needs states to reopen their economies as quickly as possible. They can’t do that without having measures in place to flag and contain new coronavirus outbreaks. 
Rather than either accelerating the federal government’s production of coronavirus testing or giving states fiscal room to handle it themselves, Trump is doing neither. He is promoting anti-social-distancing protests against Democratic governors as a blunt weapon to compensate for his managerial incompetence. If he cannot provide the conditions to allow states to relax social distancing while following public-health guidelines, he will try to force them by whipping up angry mobs
There is nothing remotely strategic about this course of action. Polls show the governors he is attacking, and the social-distancing measures they are currently enforcing, are popular. Trump is fomenting anarchy in his own country, undermining the prospects for the orderly recovery he needs in order to win reelection, and creating the risk of a violent tragedy. (The Confederate-flag-waving protesters blocking the entrance to a hospital in Michigan yesterday is the sort of episode that, if repeated, could go very badly.) He is raging angrily against the system because he is hopelessly out of his depth.