A Blog by Jonathan Low

 

Showing posts with label Energy. Show all posts
Showing posts with label Energy. Show all posts

Sep 8, 2012

How Green Is My Cloud? Tech Companies, Cloud Computing and Energy Use

This started as a weak signal. But the heavens are starting to rumble thunderously.

The questions about the energy usage required to power cloud computing were initially considered by many the concern of an obsessed minority. Their worries were sublimated by fascination with the technological potential, the financial opportunity and the strategic implications for corporate competition.

But this is becoming a mainstream concern. Executives take pains to address it even when not asked. Press releases emerge. Articles are written. Analysts assess the countervailing claims.

The reason, as so often happens with environmental and sustainability issues in business, has less to do with what is right and more to do with what is efficient. There are two primary impacts: one is cost-related. Energy use reduces margins, which reduces free cash flow and affects however one measures profit. Which, in turn, impacts stock price performance, compensation and executive longevity. Talk about hitting someone where it hurts...

The second set of issues has to do with brand and reputation. Most tech companies, more than other corporations, like to be thought of as clean. That is usually how their founders were brought up and how their education and their peer-group have inclined them. It is also how many of their customers and, increasingly, investors like to be perceived. So in the global battle for pre-eminence in the tech sphere, every new issue is an opportunity and a threat. The opportunity is to convince others that what you are doing is smart AND good. The threat is that something bad will happen, you will be blamed, your brand sullied, your honor besmirched. Which might also affect stock price and those related factors.

Instinct and self-interest will prevail. The companies are playing catch-up because this was not top-of-mind when the trend broke. But they get the message. And they know that if they falter, plenty of observers will feel free to announce it to the world. JL

Roddy Scheer and Doug Moss comment in Scientific American:
Why is Greenpeace upset with some leading tech companies for so-called “dirty cloud computing?

Sep 3, 2012

Price of Essentials Rises 10%

The price of grains and other food essentials rose 10% in July alone.

The impact of drought, El Nino and other weather events conspired to add to the already soaring prices driven by increased demand from developing nations. Year on year increases, again in July, totaled 6%.

The confluence of forces driving this trend are not mysterious. The global demand pressures have been evident for some time. And experts have been calculating the potential drought affect for months. What has caught many by surprise is the speed and volume of the increases. Expectations had focused on the future, not on the present.

What makes that matter more urgent is that this heightened cost of living comes against a backdrop of stagnant economic growth, relatively high unemployment and an uncertain future. People already struggling to pay their bills are now confronted with even greater challenges.

This is an economic, environmental, political and managerial issue. There does not appear to be a global consensus on solutions, or even on approaches. The historic support for alleviation of poverty has disintegrated in the face of financial pressure from business interests, diplomatic tensions and uncertainty about the efficacy of common agendas. Attempts are resolution will have to wait until after the US Presidential elections in November. The direction the world's largest economy may take could dictate the nature of the response. Even with that, should a full-fledged food crisis emerge with resultant unrest and political ramifications it is not clear what the global community is prepared to do given the diametrically opposed agendas of the competing interests. JL

Tom Bawden reports in the Independent:
The G20 is under growing pressure to call an emergency food summit after the price of essentials jumped by ten per cent on average in July.

Sep 1, 2012

Food, Water Shortages Could Force Global Vegetarianism. Seriously


In approximately 30 years - one generation from now - the world population will reach 9 billion. And according to scientific estimates there may not be enough water or food to feed ll of them. Especially if everyone wants to keep eating meat.

The result may be enforced vegetarianism. Not because of some ideologue's vision or demand, but because that may be the only way for people to feed themselves.

The reason is that animals require lots of water both to live - and to be processed into food. Shortages due to climate change and increased human demand will reduce the amount available, so choices will have to be made.

There are those who will recoil in horror at the notion that anyone would impose dietary restrictions on them. We join those who are relieved that there are scientists, economists, statisticians and planners actually thinking about these things so that humanity can prepare for alternatives should the worst - or the best - come to pass. JL

John Vidal reports in the Guardian:
Leading water scientists have issued one of the sternest warnings yet about global food supplies, saying that the world's population may have to switch almost completely to a vegetarian diet over the next 40 years to avoid catastrophic shortages.

Aug 25, 2012

Location, Location, Location: Big Box Retailers Lost in Suburbia

'If you build it, they will come.'

That was the mega-trend think that drove big box retailers, the massive one-theme stores which dominate the commercial landscape, to follow the real estate industry into the 'burbs.

They passed go and kept going into the exurbs, thinking, as one of the most famous movie lines of all time had it, that if they built it, customers would come.

Land was there for the taking. Mortgages were cheap. Homes were America's magic money machine. Buy a stake with OPM (Other People's Money) and sell to the next family in line when you're ready to move on. No muss, no fuss. And nothing but upside. And, of course, all those home buyers were going to need garden tools, bed linens, large screen TVs, cocktail glasses, storage cabinets, guacamole and chips. So the companies that supply all that stuff could just follow the discarded cash register receipts to glory.

And then that huge bummer called 'the downside,' which everyone had heard about but no one believed existed, actually poked its head out of the dumpster. The financial markets crashed, jobs evaporated, savings disappeared and the housing market melted like an ice cube on a hot day. Suddenly, no one needed all that cool stuff. At least compared to food and clothes and gas and health care. Even in a values-laden post-industrial economy, money started to matter. Cities are looking better to people who have to be concerned about the price of cars, insurance and gas. On top of the prices for mortgage payments, air conditioning, heating oil and property taxes.

So now, in addition to empty houses with unaffordable mortgages, we have empty stores with unaffordable leases.

The US is a consumer driven economy. That but presumes the consumer has a job and some income to spend. The growth strategy the retailers pursued was a natural extension of that first initiated by the construction of the first shopping mall outside Minneapolis in the 1950s. It has never stopped. And the stores that both drove and pursued it had no reason to look back. But strategies based on the assumption that the consumer would always bounce back to buy have left their parent companies with too many locations in too many ghost towns. On top of the drain that ecommerce represents. 'Lookin' for love in all the wrong places,' as the 1970s tune had it.

The real mega-trend is urbanization and an aging population. The retailers are going to have to figure out how to write off those under-utilized locations and remember that customers have to be followed. They can't always be led. JL

Justin Lahart reports in the Wall Street Journal:
Best Buy and Lowe's don't seem all that similar. But they have a common problem: location, location, location.

Jul 17, 2012

How Climate Change Is Starting to Hit Consumers' Wallets

Denial is not a river in Africa.

That is an old joke but it still rings true.

With the US facing the largest drought since the 1950s and severe storms affecting various regions of the country again this year, the absolute rejection of climate change is becoming harder than ever to defend. Not that it has stopped those who are paid to do so from trying.

The energy industry is fighting a bitter rearguard action against claims that oil and gas do have some pernicious side effects. And that there might be some value in exploring both the impacts and ways of mitigating them. Even the US Department of Defense which normally gets a pass on anything it wants has come under heated, deeply emotional attack from conservatives in Congress who are upset that the Navy is experimenting with algae-based alternative fuels. Why? In order to save money and lessen US dependence on foreign sources of oil. But even those arguments do not suffice when it comes to the energy industry's legislative backers.

The immediate problem is that severe drought, brought about by (whisper)climate change is damaging crops and raising feed costs for cattle and sheep, thereby beginning to impact consumer prices. The energy industry appears resolute in battling back against any suggestions that the climate may be causing these price increases but as the evidence accumulates - and the prices rise inexorably in an era of already declining incomes - the countervailing argument are becoming too compelling to brush aside. JL

CNN reports:
With more than half the country in some state of drought, farmers are feeling the impact on their livelihood and consumers could expect to feel a hit in their wallet when they go to the supermarket soon, experts say.

The U.S. is facing the largest drought since the 1950s, the National Climatic Data Center reported

Jul 8, 2012

Natural Gas Overtakes Coal as Primary Source of US Electricity Generation

A mixed blessing is better than no blessing at all.

The cheapest fuel is winning. And with it come some environmental advantages - as well as disadvantages. In blunt terms, the economy is trading greenhouse gas emissions and potential cancer risks for groundwater pollution and potential cancer risks.

Whether this is a net positive or not requires data not yet in. The impact of shale gas is not yet fully understood and may not be for years. Fugitive methane emissions from shale gas may yet cancel out the other advantages it has over coal.

The important news is that there are economical alternatives to coal, generally conceded to be the dirtiest power source - and the mining of which has been, historically, one of the world's most dangerous occupations. Just having a choice is a good thing, because it blunts the arguments from the energy sector about the inevitability of coal and oil. Which means other choices may eventually become available as well. And simply breaking the dependence on those two oligopoly-controlled sources has economic and societal benefits which may become apparent in our lifetimes. JL

Stephen Lacey reports in Think Progress:
Historically supplying the majority of America’s electricity, the coal industry has long been called “King Coal.” But this king’s throne is now under threat.

For the first time in U.S. history, natural gas electricity generation equaled coal generation, according to preliminary April figures from the Energy Information Administration

Jul 7, 2012

US Population in Cities Growing Faster Than Suburbs For First Time Since 1920s

Is the American love affair with green lawns and the white picket fence finally drawing to a close?

The US Census Bureau continues to provide gems of knowledge from its most recent decennial survey. It is now confirming anecdotal evidence that young and old, rich and poor, across the entire country are contributing to a rebirth of cities.

Technology and economics drove the suburban dream - and those forces are ending it, as well. The low-cost automobile and affordable housing created demand for single family homes during the 1920s boom. Now, the price of gas and insurance, the hassle of commuting - and the cost of heating, cooling, insuring and mortgaging homes are driving current generations back to their urban roots.

Younger people desire the good tech jobs, urban lifestyle and rental apartments that cities have to offer in greater abundance. Older people also appreciate the lower costs - and the convenience of culture, culinary and community offerings. And this is not just a story about coastal cravings: Brooklyn, Washington, San Fran and LA. The increased growth is apparent across regions, demographic groups and disparate city sizes.

Economists and demographers identified urbanization as one of the global megatrends a decade ago. Job opportunities and the increasing scale of agriculture being among the more important impetuses. But the Great Recession that savaged retirees savings and decimated job creation provided the most recent push. An interesting question is what impact this will have politically. The US has trended more conservative in recent decades as suburban living separated citizens by income, race and ethnicity. The new urbanization may have a liberalizing impact as people are compelled to interact with others who do not exactly reflect themselves - and find that it is more fascinating and liberating than frightening. What a concept. JL

Don Lee reports in the Los Angeles Times:
Since the advent of the automobile in the 1920s, America's suburbs have been growing faster than cities as people fled urban life for quieter, less-crowded expanses.

But new Census Bureau data indicate that, in general, cities last year grew faster than suburbs, reflecting an urban renaissance accelerated by the Great Recession.

Jul 3, 2012

Data, Design and the Future of Urban Growth

Urbanization is one of the mega-trends identified by demographers and confirmed by public policy analysts that will define the near to medium term future of civilization.

There are benefits and challenges inherent in that course, but the direction appears fore-ordained due to economic, climactic and political forces. Decrying it or attempting a shift away from it both appear to be futile. So, the way it is managed may determine whether millions live in relative prosperity or misery.

Some resolution may lie in the confluence of data and design. One of the issues is that as cities grow, their problems compound at a faster rate than the resources available to address them. Applying 'big data' to the design issues could help mitigate these effects. Infrastructure, housing, energy usage, waste, green space, transportation, economic growth, the ability to feed and clothe the population and a host of other imperatives must be factored in to any solution. The exponential and unplanned expansion of slums, favelas, shanty towns - with their associated miasmic traumas - are evidence of what can happen when public and private entities abdicate responsibility or simply surrender to the difficulties inherent in the cost-benefit trade-offs.

Design, especially for large urban planning projects has always relied on the interface between vision and data. Technology has now given society the ability to manipulate that data in ways that can make the planning process more accurate, or at least more realistically test assumptions and theories about the implications of various scenarios since the accuracy of projections involved in larger masses over longer time periods becomes less certain.

The benefits of this marriage of data and design are manifest: greater satisfaction and less dislocation. The challenge is in securing the resources and then convincing those involved of the efficacy of the vision(s) that emerge from that process. Design has always required the articulation, description and acceptance of vision. Agreement - and the requisite funding - rely on the confluence of those forces for the greater good. The effective marriage of technology, data and vision now make that more realistic than ever before. JL

Derrick Harris reports in GigaOm:
According to physicist Geoffrey West, the world’s cities have what one might call a growing problem. As they grow bigger, their problems grow worse at a super-linear pace, which means it takes an ever-faster pace of innovation to keep things in check. We can either figure out a way to innovate faster, watch our cities crash and burn, or — perhaps worst of all for capitalists — figure out a way to live without constant economic growth.

Jun 15, 2012

US Solar Power Use Projected to Increase 75% This Year


Despite ongoing questions about cost, solar power is projected to have its best years ever in 2012.

This is surprising because with US household net worth down 40% since 2007, stagnant incomes and cautious corporate spending, solar would not intuitively appear to be on the top of many priority lists.

Reports indicate that business installations are leading the way. Though not noted for their explicit endorsement of environmental or sustainability initiatives, companies are acutely conscious of costs. Both in their own operations and in terms of the products they sell. Industrial and commercial customers are demanding that whatever they buy be designed to run as efficiently as possible from an energy usage and cost standpoint. This has become a vital competitiveness issue as global economic forces mandate more consciousness about every aspect of the supply and value chain in order to match the advantage other nations have in terms of wages and raw material bases.

Consumers, too, are recalculating the relative benefits offered by solar installations versus relentless utility company rate increases in many parts of the country. Demographic changes, with population continuing to grow in sunnier southern and western states, may also play a role in driving demand.

As a result, this may prove to be a watershed year for solar. Hortatory urgings to do what was deemed right opened the debate. But the cold-blooded demand for cost effective alternatives may finally deliver commercial success. Boring is beautiful. JL

Carl Franzen reports in TPM:
A new report on the state of the solar industry in America indicates that despite a global oversupply and a potential trade war with China, the U.S. solar industry had its second-best quarter ever in terms of installations, during the first quarter of 2012.

The number of installations, 506 megawatts worth, enough to power just over 350,000 homes, was bested only by the fourth quarter of 2011

Jun 9, 2012

Will Natural Gas Kill the Electric Car?


Persistence and politics.

The natural gas lobby is well-funded and determined. Abundant supplies of natural gas have enriched the producers, who often happen to be politically well-connected financiers of politicians in key states. Their interests have not gone unnoticed by sympathetic Congressional committees charged with approving government projects.

Which is not to say that natural gas is undeserving. It may well become the fuel source of choice as the impact of declining oil reserves and rising demand affects prices. Electric cars also have their champions, who are not without resources and friends of their own. And competition may spur innovations that further the adoption of automotive alternatives.

So, from a policy standpoint, this is not necessarily a bad thing. As long as the focus stays on the determining most sustainable, cost-efficient option. JL

Carl Franzen reports in TPM:
A government-funded laboratory that helped pioneer the battery technology behind many electric vehicles, including the Chevy Volt, has recently begun to focus on developing technologies to improve natural gas-powered vehicles, in anticipation of government and industry soon seeking to bring consumer-friendly natural gas cars to market.

May 30, 2012

Profitable Promenades: Walkability Status Driving Up Real Estate Values

Skinny ties. Curves. Cocktails. Meat. Cities. Walking?

New research is showing that the most valuable residential and commercial real estate is no longer in the suburbs, but in urban areas with 'walkable' access to work, entertainment and other people. In addition, the more walkability a neighborhood possesses, the more affluent its denizens are likely to be.

The real estate value mantra has long been 'location, location, location,' but the meaning has changed. Suburban school districts and curb appeal still have their place, but the shifting demographics of aging populations, the expense - and hassle - of owning and driving a car, as well as a growing awareness of the connection between exercise and longevity are part of the mega-trend pushing up values in formerly outre areas.

The forces at work represent a generational squeeze; aging Boomers looking to downsize and reduce costs based on potentially insufficient retirement incomes are joined by Xers and Yers whose notion of domestic bliss no longer necessarily embraces the charming Colonial with a white picket fence, miles and hours from work, friends or entertainment. Urbanization is a global trend; London, Rio, Capetown and Beijing have seen their status and populations enhanced. So the socio-economic currents powering this development are strong and probably sustainable in every sense. JL

Christopher Leinberger reports in the New York Times:
Walking isn’t just good for you. It has become an indicator of your socioeconomic status.

Until the 1990s, exclusive suburban homes that were accessible only by car cost more, per square foot, than other kinds of American housing. Now, however, these suburbs have become overbuilt, and housing values have fallen. Today, the most valuable real estate lies in walkable urban locations. Many of these now pricey places were slums just 30 years ago.

May 26, 2012

Auto-Emotion: You Are What You Drive

We'd like to believe we are rational decision-makers.

We go online. We compare prices. We assess features. We use new-fangled apps based on complex algorithms to analyze brand attributes against needs, budgets, geographical area, projected weather patterns, road conditions, political ideology (just kidding on that last one).

Ultimately? For most it's how we feel. Color. Line. Styling. Dashboard configuration. Cupholders (cupholders? you'd be amazed). Back of the seat video. Whatever. We are suckers for features that appeal to the atavistic need to impress. If only ourselves. And our kids. Spousal skepticism notwithstanding.

And it seems to be working - for the manufacturers. Brand loyalty is down. About 45% of US cars are foreign-made or built in the US by foreign-owned companies. And the vehicle commanding the greatest loyalty? Hyundai. Yup, Korea. From a country most Americans can not locate on a map (literally).

So, it is working for the auto makers because while they would love to have customer loyalty, they also win by denying their competitors that same reward. It is a truism of marketing that repeat customers are more profitable for whoever is selling because that purchase costs less to acquire.

So we can learn a lot by watching those TV ads and understanding how they successfully play on the emotions. We all have a little movie running in our heads. In which we star. And in which we are sitting at the wheel of a new car. Despite the state of the economy, the decline in household income, the paucity of job growth, new car purchases are way up so far in 2012. Talk about emotion... JL

The Economist reports:
AFTER 11 years of daily use, the family kidmobile is nearing the end of its economic life. Meticulously maintained, it still runs fine. Or, rather, it does now the air-conditioning system has been overhauled—at greater expense than the car is actually worth. With the vehicle fully depreciated, the annual cost of ownership has been minimal for the past four or five years, but is now set to rise—as one electronic module after another can be expected to give up the ghost and need replacing at $1,000 or more a pop. Sadly, the time has come to contemplate putting the trusty old war-horse out to pasture. But what on earth to replace it with?

Purchasing a new car is the sort of emotionally draining experience your correspondent dreads.

May 25, 2012

Power and the Future of The Cloud

The reason that so many users of Big Data are locating their centers in seemingly remote places like western North Carolina is not because they love good barbecue.

No, the answer is inexpensive energy sources. Like hydropower.

The data centers that power The Cloud are massive energy consumers. So location near alternative energy resources is a sensible business decision. Deserts - and their solar power arrays work. So do abundant sources of water and wind.

The decision is economic, but there is a reputation benefit as well. The core users and employees of these services are younger and more attuned to the sustainability and - dare we say it? - moral considerations involved in energy choices. That makes lessened environmental impact a smart marketing as well as financial decision.

It is likely that coal and gas will continue to provide much of the energy needed to power increasing customer data demands, especially given mobile's exponential short term growth. But from a cost, risk and brand management perspective, the alternatives appear to make increasing sense for the longer term. JL

Jason Currill comments in GigaOm:
As the world we live in continues to develop better technologies and new and exciting ways of communicating, our demand for energy grows. Data centers are the engines that drive our connected world, processing the billions of daily transactions, comments and interactions in our digital society. More data equals more energy – and this is starting to become a big headache from a sustainability perspective.

If a singular data center can consume the equivalent energy of 180,000 homes, exactly how large is the overall impact on our planet, and what is being done about it?

May 11, 2012

Innovation, Income and Growth: The More Things Change

The changes wrought by the financial crisis and recession may not be as dramatic as some had hoped or feared. Rather, they reflect longer term trends whose impact may have accelerated.

If anything, the weak have gotten weaker and the strong, stronger. The strength of ideas and human capital continue encourage the urbanization mega-trend. As traditional energy resources become scarcer and more expensive, those economies based on their extraction, refinement, distribution and finance will benefit in kind - for as long as they last or as long as the rest of the world is willing to pay for them - whichever comes first.

The larger question is why as a civilization we seem so unwilling to tackle the big problems. Complacency and the aging of the population probably have some impact. But it may simply be that we are uncertain about the future and sufficiently comfortable to postpone decisions that could be unsettling.

Society will continue to benefit from the generation of new ideas. Investing in education and the people who may create them seems the most sensible course. JL

Edward Glaeser reports in Bloomberg:
How has the Great Recession reshaped America? Does the decline in New York’s financial sector herald the “demise of the luxury city,” as Joel Kotkin has recently suggested? Or instead has this watershed meant “the death of the fringe suburb,” as Christopher Leinberger speculates?

In fact, none of America’s diverse living styles is about to perish

May 4, 2012

The Financialization of Energy: Are Gas Prices the New Mortgages?

Capital markets will find a way to make money. That is what they do.

As the post financial crisis regulations begin to bite, the mortgage market attempts to revive and the financial sector indulges in its latest cyclical round of layoffs, attention is beginning to focus on the increasing financialization of a lucrative source of wealth: energy trading.

Though energy is a complex global market of a size sufficient to stymie even the most determined speculators, an increasingly rancorous debate has broken out about the role of futures trading and how it might be affecting supply and cost. The stakes are commercial, financial and political. JL

Les Leopold comments in the Naked Capitalism blog:
Gasoline prices have been falling in recent weeks, but they’re still close to their five-year high after climbing steeply for three years. For every penny increase at the pump, $1.4 billion per year leaves our collective pockets, creating a drag on the sluggish “recovery.” Where does it go and what caused the price explosion at the pump?

It’s a common belief that oil prices are set on the world market by supply and demand. Less supply and/or more demand causes prices to rise. Oil is getting harder to find; OPEC is holding back supply; China and India are guzzling it up; Iran is threatening to blow it up. And regulations are getting in the way of drill, baby, drill — end of story. But this fixation on blind market forces ignores the fact that Wall Street is financializing the commodities markets – especially oil

Apr 21, 2012

Running on Empty: $4 Gas Reinforces Lower US Fuel Consumption Trend

What's wrong with this picture? Teenagers decline to get their driver's licenses on their 16th birthday. Young adults are moving to cities where they can rent autos by the hour. Applications to participate in long-derided car-pooling programs are rising. Sales of gas-efficient cars are General Motors' best sellers. In the United States of America?

Yup. Something strange - and surprisingly rational - appears to be happening when it comes to America's century-old love affair with the automobile. The consistent rise in gasoline prices (and in the cost of insurance and maintenance) may finally be weaning people away from their obsession with driving. Gas prices have set historical records in three of the past five years. And gas consumption has dropped 6 percent during the same period.

Anyone seeking evidence for the existence of the free market should look no further than the nearest parking lot. Consumers are responding to rising prices by seeking less expensive alternatives. Classical economics gets one right. JL

Steven Mufson reports in the Washington Post:
Are American motorists finally changing their gas-guzzling ways?

As prices have neared and in some cases topped $4 a gallon, drivers have cut their consumption of gasoline to its lowest levels in a decade, driving less and buying cars that are more fuel-efficient. The adjustment has slowed the climb in gasoline prices, which until last week had risen for 10 consecutive weeks, and could preserve some money for Americans to spend on other items as the economy struggles to recover more convincingly.

Apr 8, 2012

Ah, Spring: When a Young Person's Fancy Turns to ...Rising Gas Prices. Perennially.

It is sometimes comforting to learn that one's experiences are part of a larger trend that was indiscernible to the naked eye.

But not always.

Yes, it is nice to know that when your computer goes down, it is the server's fault, not yours. Or when you feel deathly ill, that you are simply another flu victim, not a solitary plague carrier.

But the knowledge that gas prices have perennially risen in the spring, like the swallows returning to San Capistrano, is due to management decisions not so much to global market forces based on supply and demand will probably be disturbing news to many. The implication is not that gas prices could remain the same, if we wanted them to do so. Rather, it is that they are the result not of political calculation, but of commercial, financial and managerial decisions made on a global scale. Now, inhale deeply and enjoy the warming sun. JL

Jonathan Fahey reports in the Associated Press via Huffington Post:
Ahh, spring. The days get longer, flowers bloom, and gasoline gets more expensive.
It's a galling time for drivers, and it's more maddening than usual this year. The average price of gasoline could surpass $4 per gallon nationwide as early as this week. It's already $3.93 per gallon, a record for this time of year.

Why the seasonal spike? It's the time of year refineries reduce output to repair equipment and start making a cleaner, more expensive blend of gasoline for summer.
Since 2000, pump prices have risen every year between early February and late May.

Mar 29, 2012

Weather Watch: Did a Warm Winter Jumpstart Job Creation?

In every election year political candidates like to argue about who is responsible for creating or destroying jobs.

And usually, they like to take credit for the positive while blaming their opponents for the negative. But this year, a new candidate may be muscling all of them out of the race: Mother Nature.

Recent data suggest that this year's unusually warm winter in much of the US has contributed a significant number of new jobs to the economy. Whether the trend is sustainable - literally and figuratively - remains to be seen. The downside is that what the weather delivers, it can later take away. If spring rains, summer drought or autumnal hurricanes wreak too much havoc, job creation may slow or even reverse. But the irony, if the trend holds, is that those who are ideologically opposed to the very notion of climate change may find that political expediency forces them to embrace it. JL

Matthew Yglesias reports in Slate:
Everyone likes a mild winter, but perhaps no one likes it more than President Obama. A recent Macro Musings newsletter from the respected forecasting firm Macroeconomic Advisers suggested that warm weather in December, January, and February added 72,000 extra jobs to the U.S. economy.

This report helps explain one of Recovery Winter’s minor puzzles: Why did the economy add an unusually high level of jobs relative to very modest growth in GDP? But it also leaves us with a question: If unseasonable weather boosted winter job growth, would a return to normal this spring undo those gains? Macroeconomic Advisors thinks it will, but there’s reason to believe they’re wrong.

Mar 22, 2012

Shill, Baby, Shill? Report Finds No Connection Between US Oil Drilling, Lower Gas Prices

Another slogan bites the dust.

A statistical analysis comparing 36 years worth of monthly, inflation adjusted gas prices with data on US domestic oil production finds no correlation between drilling activity in the US and the price American consumers pay at the pump.

And a related study finds that financial speculation in oil futures may have added as much as 15% to the price of gas over the past decade.

Aside from delivering another blow to political expediency, these data remind us that energy prices are driven by a global market in commodities. To assume that there are simplistic solutions to complex problems is, as in so many elements of human endeavor, bad science - and bad business. JL

Seth Borenstein and Jack Gillum report in the Huffington Post:
It's the political cure-all for high gas prices: Drill here, drill now. But more U.S. drilling has not changed how deeply the gas pump drills into your wallet, math and history show.

A statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by The Associated Press shows no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.

Mar 20, 2012

Need a Lift? As Climate Changes, Louisiana Raises Roadbeds

Sometimes governments have to deal with the reality even if they disagree with the theory.

Dependent as it is on the oil and gas industry for jobs and tax revenues, the leaders of the US state of Louisiana take issue with the notion of climate change, let alone that it may causing changes in the environment. But that ideological position has not stopped them - nor some of the drilling, dredging, pipeline and refining companies that operate there - from contributing funds to raise the beds of roads threatened by encroaching sea and swamp water.

Not all of the problems are natural. Engineering decisions made in other locales - like Washington DC - have diverted Mississippi River water and sediments in order to protect settled areas. Costs are in the millions now, but could eventually run into the billions. JL

Juliet Eilperin reports in the Washington Post:
Here on the side of Louisiana’s Highway 1, next to Raymond’s Bait Shop, a spindly pole with Global Positioning System equipment and a cellphone stuck on top charts the water’s gradual encroachment on dry land.

In 1991 this stretch of road through the marshlands of southern Louisiana was 3.9 feet above sea level, but the instrument — which measures the ground’s position in relation to sea level — shows the land has lost more than a foot against the sea. It sank two inches in the past 16 months alone.