Wednesday, May 25, 2011

What Became of Republicans

After suffering the humiliation of Richard Nixon's resignation, the Republican Party found itself again with Ronald Reagan.  A key part of Reagan's appeal was his reliance on the intellectual firepower of Nobel Laureate Milton Freidman, Alan Greenspan, and other conservative and libertarian economists.

Agree or disagree with their policies and theories, you have to admit that these economists were serious scholars who analyzed their data.  That rigorous analysis caused many of them -- including Friedman and Greenspan -- to conclude that by keeping the price of fossil fuels artificially low, we were stunting innovation and competition.

Too low, you say?  Yes.  Applying "price theory," these conservative and libertarian economists determined that the prices of fossil fuels did not include all of their costs.  Most importantly, the prices of fossil fuels did not include the cost of pollution.  Rather, the cost of pollution was "externalized" (i.e., imposed on the commons) resulting in a misleading price.  That misleading price made it impossible for the free market to make rational decisions (e.g., to invest in alternative energy).

So how did the Republican Party go from rigorous data analysis and disciplined application of economic theories, to the party of "that was not meant to be a factual statement"?

John Howley
Woodbridge, New Jersey

Sunday, May 22, 2011

Power Outage Strands Delta Passengers at Minneapolis Airport

Delta Airlines was forced to cancel 250 flights after a power outage at the Minneapolis-St. Paul Airport shut down its computers and about 60 to 80 gates and 4 concourses for more than 9 hours on Saturday.

Initial reports were that Delta issued about 1,000 vouchers for hotel rooms to passengers who were stranded at the airport and could not get booked on other flights. The airline initially said that about 500 passengers actually stayed in hotels overnight, then revised the number to 100. One news report said, "It was impossible to say how many flights were affected, because Delta's computers were down."

As of Sunday morning, electricians said they had isolated the problem and restored power to about half the gates, but the cause of the outage was still unknown.

Xcel Energy, the local utility, said the problem was not on its grid but was internal to the airport's electrical distribution system. But there have been no definitive statements on the cause of the outage.

John Howley
Woodbridge, New Jersey

Monday, May 16, 2011

Second Largest US Oil Refinery Threatened by Flood

All eyes are on the Mississippi river and the decision to open nine floodgates in an effort to save the cities of Baton Rouge and New Orleans.  While most attention has properly been focused on the innocent people in other towns and farming communities who will be flooded by this action, the flood also poses another significant threat.

The second largest oil refinery in the United States is within the area subject to mandatory evacuation and is threatened by the rising waters from the spillway.  The refinery in Krotz Springs is owned by Alon USA Energy Inc.  It refines 83,000 barrels of oil per day.

So far the company has been granted an exemption from the mandatory evacuation order and is building a temporary levee to protect the refinery and surrounding homes and buildings.  While the refinery has not yet been forced to curtail operations, the prices of oil and gasoline rose in trading early on Monday on fears that flooding could affect refinery operations in Krotz Springs and elsewhere.

John Howley
Woodbridge, New Jersey

Sunday, May 15, 2011

Saving Public Libraries

News that Borders, the book store, may disappear reminded me of another great source for books that is under attack.  The public library.  State and local governments facing tight budgets are cutting back, and this once grand institution may soon be extinct.

That would be a tragedy.  Having lived in other countries where public libraries do not exist, I have always had a fondness for this particular institution and its critical role facilitating the American dream.

Yes, the internet can give you access to all sorts of information with the click of a mouse.  Yes, e-readers are making e-books more accessible.  But there is both symbolism and substance in the ability of anyone to walk into a public library off the street and have access to books, newspapers, periodicals and other sources of information.

People still want to commune in a centralized location to browse through books and magazines in a public setting.  Just go to any Barnes & Noble store and see all the people who are there browsing, reading, and socializing over a cup of coffee.  The fact is, not everyone wants to sit alone with an e-book all the time.

Perhaps Barnes & Noble can fill the need for those who live near major shopping malls and can afford to buy Starbuck's coffee while they browse through a magazine.   But what about those who do not live near shopping malls?  or who do not have transportation?  or who do not have internet access at home?   Public libraries are essential to their individual and community growth and development.

Borders may be no more.  But we cannot let the same thing happen to our public libraries.

John Howley
Woodbridge, New Jersey

Friday, May 13, 2011

Who's Really to Blame for $4 Gasoline?

Faced with blistering criticism from Senators this week, Exxon Mobil CEO Rex Tillerson blamed "speculators" for the high price of gasoline at the pump.  He claimed that the market price of oil really should be $60 to $70 per barrel, and that the extra $30 to $40 per barrel being paid right now is the result of speculation by traders making bets on margin.

Bloggers on Forbes picked up the cry, calling speculators "social parasites, gamblers who produce absolutely nothing of value."

Think about what this means for a moment.  It means that the CEO of Exxon Mobil said that we do not have a supply problem.  Or a demand problem.  The only problem we have -- a problem that costs $30 to $40 per barrel -- is speculators using margin to run up the price of oil and make a profit at society's expense.

How I wish someone would have pushed him on this point.  How I wish someone would have said:

"So, Mr. Tillerson, are you saying that we have adequate supplies?  That the moratorium on drilling in the Gulf following the BP Deepwater Horizon catastrophe is not giving traders legitimate reason to hedge against increasing prices for oil?  That your inability to drill in the Arctic National Wildlife Refuge is not affecting the price of oil?  That increasing demand from China, India, and other developing nations is not affecting the price of oil?  That unrest in the Middle East is not a legitimate cause for concern in oil markets?"

"Are you really saying, Mr. Tillerson, that speculation is the only reason why prices are above $60 to $70 per barrel?"

Obviously, he would never have agreed that speculation is the only reason why oil prices are so high.  He threw that out there because we live in a world of soundbites, where blaming speculators on Wall Street will shift the blame and get you good press in certain circles.

So why did Senators not press him on these points?  Because that Senate hearing was not about finding solutions to our energy problems.  It was about creating soundbites that Senators could use in the next election.

Which points out the real problem we face as a nation.  Neither our corporate leadership nor our political leadership is willing to have a serious conversation about the real problems and tough solutions we need to create a viable and sustainable energy policy.

John Howley
Woodbridge, New Jersey

Saturday, May 7, 2011

Acceleration of Artic Ice Melting

A new report by the international Arctic Monitoring and Assessment Program, or AMAP, concludes that Arctic ice is melting faster than expected and could raise the average global sea level by as much as five feet this century.

The report says that Arctic temperatures in the past six years were the highest since 1880.  The report also says that its authors also found evidence that feedback loops have started.  A feedback loop occurs when warming of the earth's atmosphere causing an effect, such as melting of ice sheets, which results in more absorption of heat by the earth's oceans, which results in further warming of the earth's atmosphere, which results in further melting of ice sheets, etc.

Scientists fear that once started, it will be difficult to impossible to stop feedback loops.

Click here for a news story with further details on the latest report.

John Howley
Woodbridge, New Jersey