resources

China and Ecuadorean Oil

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In an ongoing attempt to sketch the borders of China’s challenge to the Left, some brief thoughts/quotes on Ecuador and resource extraction.

Patrick Iber in Dissent on the “Pink Tide” in Latin America:

With the benefit of hindsight, it becomes clearer that the Pink Tide was made possible by a boom in the global price of commodities. That boom structured both its achievements and its limitations. Latin-American economies have long been exporters of primary products and importers of finished ones; most industrial production is destined for internal markets. In the early 2000s, rapid growth in India and China drove up the price of primary products, from oil to lithium to soybeans. This gave governments the ability to spend money on social welfare and development, satisfying—at least in part—the needs of their political bases without making fundamental structural changes to their economies or their position in the global system of trade…

Policies under Rafael Correa’s government [in Ecuador] have frequently strengthened the state while weakening organizations in civil society. Correa preferred initiatives that provided reliable support to his political project rather than ones that could advance democratic and egalitarian goals. But the organizations created by the state to compete or replace more self-organized associations have not succeeded, and they have the potential to become instruments of control and demobilization.

And from Jacobin’s Pink Tide retrospective in 2017:

In Ecuador during the boom years, this model provided crucial revenues for social spending. But in the context of an economy like Ecuador’s, which is still dominated by oligopolistic markets, these revenues were mostly transformed into private-sector profits.

They provided people with spending money, but they spent it in private-sector controlled markets. It was the private sector that truly reaped the benefits of that increased social spending.

The continuing reliance on oil revenues seems to have left it both a first and last resort to continued government financing. The main benefactor of this has been China:

Last November, Marco Calvopiña, the general manager of Ecuador’s state oil company PetroEcuador, was dispatched to China to help secure $2 billion in financing for his government. Negotiations, which included committing to sell millions of barrels of Ecuador’s oil to Chinese state-run firms through 2020, dragged on for days. Calvopiña grew anxious and threatened to leave…

Shunned by most lenders since a $3.2 billion debt default in 2008, Ecuador now relies heavily on Chinese funds, which are expected to cover 61 percent of the government’s $6.2 billion in financing needs this year. In return, China can claim as much as 90 percent of Ecuador’s oil shipments in coming years, a rare feat in today’s diversified oil market.

“This is a huge and dramatic shift,” said Rene Ortiz, a former Ecuadorean energy minister and secretary general of the Organization of the Petroleum Exporting Countries. “Never before has Ecuador committed its oil to a lender.”

This is the nexus of several trends at once: fossil fuel dependence, a non-diversified resource extraction-intensive economy, a lack of internal markets sufficient to generate revenues to support a good and robust social safety net (and as the Jacobin piece makes clear, the failure to create a more vigorous political project). China is there to take advantage of it. So why is that sub-optimal?

  1. It surrenders control of its own production to China, by ensuring the diversion of its oil to them for a period of years
  2. It constrains budgets by diverting government funds to repayment for loans
  3. It further enriches speculators and enlarges the oil market as the province of traders rather than simply producers and consumers (with all the commodity disruption that portends)

The U.S. Department of Defense’s Assessment on U.S. Defense Implications of China’s Expanding Global Access cites Ecuadorean oil as one example of an “unfair” economic deal that offers some benefits but “also carr[ies] costs to host country sovereignty.” In the case of Ecuador, that might well mean constraining the ambitious welfare and social justice programs begun under Rafael Correa. It’s further proof that social programs will have to be accompanied by decarbonization, and soon.

The Windup Girl: A Review

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Everything I hoped it would be and more. This morning John Robb referenced aspects of The Windup Girl and that brought it all rushing back.

Bacigalupi paints the picture of a world where the “calorie men,” representatives of the midwestern agricultural combines that released the blister rust plagues into the wild, whose “U-Tex” and other genetically-engineered crops are the only defense against the diseases created by the same men, and the sterility of which forces India, Burma, and the other starving nations of the world into semi-feudal servility. A world in which rising seas have swallowed New York, Mumbai, New Orleans, and Rangoon, and where only the coal-powered monstrous pumps of King Rama XII prevent the similar fate from befalling Bangkok. Where the combustion engine has been replaced by kink-spring power wound by men and elephant-derived megadonts, where the exertion of labor to power the world requires the fuel of food, and calories are the currency of the realm.

In the midst of this, a former Japanese pleasure construct – the titular “windup girl” – discovers instincts and desires beyond the total obedience and urge to please that has not just been bred into her, but programmed into the very fiber of her being. An accidental übermenschen trapped among a peoples who regard her as trash, she represents a future that she can’t even understand yet. Which, coincidentally, is precisely what Bacigalupi has written here.

It is a rich portrait, indeed, and Bacigalupi excels at the alternate history/speculative fiction techniques of hint-dropping and hastily-sketched background details that he doles out like candy along a forest trail. But you’ll want to go where he’s luring you.

Rational Pessimism

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Matt Ridley’s new book about how we’ve got it so good today, The Rational Optimist: How Prosperity Evolves, has met with pretty decent reviews. I only just got around to reading Brendan O’Neill’s review for The American Conservative today (yes, yes, I know it’s dated August 1, but I’ve been busy), and it quashed any desire I might have had to read it.

I mean, I know I’m a pretty ornery cuss, but let’s face it: despite rapid advances in material prosperity, we as a society don’t seem particularly happy with our lot. O’Neill is right in saying that all the threats guaranteed to kill us all – Y2K, Bird Flu, that Man-Bird-Pig disease of a year or two ago – have never materialized, and that despite our constant worrying over the end, if it indeed comes it is almost certain to catch us by surprise.

And yet, there is so much of Ridley’s overall hypothesis that seems to make no sense. At the risk of becoming one of the “angry, graph-obsessed nitpicking” types O’Neill warns against, I think it would make sense to examine Ridley’s actual claims and see why they ring hollow.

In just the past 50 years, the average human “earned nearly three times as much money (corrected for inflation), ate one-third more calories of food, buried one-third as many of her children, and could expect to live one-third longer.”

Right off the bat, I can see one problem here: the average human. While wages and prosperity have risen steadily around the world, in the United States income disparity is at historical levels. Productivity has soared in the past fifty years,  but relative worker pay has dropped precipitously. We’re doing more and getting paid less to do it. So while much of the world may have seen a tangible increase in quality-of-life, we’re in many ways worse off than we were 20, 30 years ago. Continue reading →

Underground Testing

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Recently, France and Britain concluded a defense agreement which, among other things, provides for increased joint nuclear research between the two. In the spirit of that nuclear cooperation – and also in the spirit of getting things done while Congress has their heads up their asses – I have decided to reprint my essay “Underground Testing: Anglo-American Nuclear Cooperation, 1946-58.”

The mushroom cloud over Hiroshima, August 6, 1945.

In 1946, atomic collaboration between Great Britain and the United States screeched to a halt. The fruitful partnership between the ‘Tube Alloys’ team in the United Kingdom and the scientists of the Manhattan Project had grown increasingly one-sided, with the United States’ research contributions far outstripping those of the British by the end of World War II. Two atomic bombs were dropped on the Japanese cities of Hiroshima and Nagasaki in August of 1945, demonstrating the arrival of nuclear hegemony. The British were merely informed of the decision, to which they acquiesced with “little or no debate.”[1] As the technology gap across the Atlantic Ocean continued to widen in the immediate postwar period, Britain was increasingly thrust into a lesser, subordinate role.

With the passage of Senator Brien McMahon’s Atomic Energy Act in 1946, Anglo-American collaboration in the field of nuclear power and weaponry appeared to be at a congressionally-mandated end. Much of Thatcher-era historiography views that collaboration as entirely dormant until the McMahon Act’s repeal in 1958, and that in the meantime Britain forged on as the jilted partner in the ‘special relationship’.[2] While true on an official level, this ignores the underlying reality of close continuing cooperation on atomic weaponry between 1946 and 1958. Nuclear cooperation did not hit a wall in 1946; it merely endured ‘underground’ for twelve years.

Continue reading →

Frenemies?

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Two age-old adversaries finally joined forces in recognition of their weakened position today. Putting aside the divisions of the past and recalling times when they could reach across and work with each other in harmony, the two parties committed to a radical, unprecedented new arrangement.

No, Charlie Crist didn’t win, and Congress didn’t actually decide to start functioning. Instead, France and Good Britain signed a defense treaty. It’s pretty out there: provisions for a joint expeditionary task force and a timeshare arrangement of their aircraft carriers, which many had speculated on. At least now one will always be at sea, exorcising the specter of a naval aviation-less Great Britain. Also: joint nuclear research! Though not extending to actual issues of deployment, it seems to have supplanted the old Tube Alloys project between America and Britain as the new centerpiece of nuclear partnership.

Still, we have come a long way since the days of Viscount Gort and the BEF. Rule Britannia? Well, co-rule maybe.

Collapse

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Thanks to Netflix finally appearing on my PS3, I’ve been able to watch all sorts of ridiculous National Geographic documentaries like Stress: Portrait of a Killer, Kim Cattrall: Sexual Intelligence, and Sea Monsters: A Prehistoric Adventure. Mixed in with those are some gems, though, like the Inside series (Inside Special Forces, Air Force One, Inside the US Secret Service, etc.).

I saw and decided to take a chance on Collapse: Based on the Novel “Push” by Sapphire Book by Jared Diamond. I should admit that I haven’t read Diamond’s book, but the premise is clear enough. The major factors contributing to our hypothetical demise are a lack of water, food, and oil, all multiplied by the effects of global warming. The story of our collapse is told through the eyes of fictional scientists and researchers in the year 2210 combing the desertified ruins of the globe for evidence pointing to one factor or another (at one point, I think they even recycled five seconds of footage from I Am Legend). This is interspersed with historical reenactments of other collapsed civilizations, including Rome, the Mayans, and the Anasazi.

One-line review: it’s kind of like those Life After People and Aftermath: Population Zero ‘documentaries’, but with more anthropology and more science. I mean that in a good way.

But anyways, I was left with two burning questions at the end of it.

The first was where and how did these scientists survive and come to be? Oral tradition alone should explain our downfall, but they have ridiculously advanced technology. Like iPads with the Minority Report interface. And where are they based? They’re exploring the American West and Southwest, along with the British Isles, Southern Europe, and the underwater ruins of Hong Kong. But where do they live? Did New York miraculously escape destruction?

The second has to do with our impending water crisis. I know that we’re on the brink of the first water wars, but for long-term considerations: what the hell are we doing with desalinization?

According to my research, the most intensive barriers to more widespread adoption are the cost of the technology itself and of the power needed to operate the plants. But in most of the Middle East, for example, virtually every new power plant is constructed with some sort of desalination capacity incorporated into it. Current desalinization, though, can start recycling some of its own energy, meaning with a viable renewable energy source – nuclear comes to mind – a plant can be self-sustainable and contribute energy back to the grid.

As is, the costs of desalinization are passed on to end-users to the tune of $3 per thousand gallons. That seems steep, but then again, we buy bottled water, don’t we? Bottled water runs about $7,945 per thousand gallons. Seriously, this seems like a proactive step we could take. Now. To secure our water reserves for a long time to come and maybe, just maybe preserve California’s Inland Empire as a viable place to live while recycling much-needed energy to the grid.

But forget Phoenix, humans seriously have no business living there whatsoever.

Resilience Through Incompetence

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The electric grid of the United States.

 

Overall, it’s hard to tell whether this story comes as a relief or not. Short version: the illogicality and inconsistency with which the national power grid has built – that is to say, there isn’t a national grid – means that we are in fact more immune from a Robbian-style global guerrillas attack. The grid is too shitty to be vulnerable.

Which is good for our security short-term, but bad for long-term nationwide electricity. The real question is how do you duplicate the success of of an unplanned system? How do you engineer unpredictability? Answering that will be one of the major challenges of the 21st century.

Via io9.

The Spill

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The Deepwater Horizon oil platform burns in the Gulf of Mexico.

As per my standard operating procedure, I should be studying for my final final exam on Russia/Eurasia tomorrow morning but will procrastinate a little more (productive procrastination, that’s my motto). Instead, I have a number of thoughts to offer on the ‘British Petroleum’ spill in the Gulf of Mexico. And it’s worse than we can imagine.

The Oil Drum has had some of the best recent coverage of the disaster from a technical and policy perspective. It also has some of the better commenters I’ve seen anywhere on the internet. Via BLDGBLOG comes a particularly chilling one:

The well bore structure is compromised “Down hole”.

That is something which is a “Worst nightmare” conclusion to reach.
[…]
All the actions and few tid bits of information all lead to one inescapable conclusion. The well pipes below the sea floor are broken and leaking.
[…]
What does this mean?

It means they will never cap the gusher after the wellhead. They cannot…the more they try and restrict the oil gushing out the bop?…the more it will transfer to the leaks below.

It also means that the entire reservoir area is growing weaker and weaker underwater, and that (here comes the absolutely terrifying part) “fracturing and a complete bleed-out are already underway. Rumors also suggest a massive collapse of the Gulf floor itself is in the making” [emphasis mine].

That means 2 billion barrels of oil just dumped into the Gulf of Mexico. It means an ecological disaster of biblical proportions as the oil is carried around Florida and up the eastern seaboard. It will end entire industries, ways of life, and…it’s pretty much unfathomable how bad this will probably be. We don’t even have the technology to stop the leak at this point; the best we can do is siphon off as much as possible and pray it doesn’t get worse. Continue reading →

Resource Wars

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In a not-so-hilarious version of the California and American West water wars, China has announced its plans to dam the Tsang Po River – also known as the Brahmaputra in India and Bangladesh. The dam is to be “massive,” and could potentially “disrupt fresh-water supplies and agriculture for tens of millions of South Asians living downstream.”

David Axe says this could be “tantamount to a declaration of war.” And I personally believe it’s a sign of things to come. With much of the region militarizing (even South Korea is getting in on the mini-carrier game), major destabilizers like this will become only too frequent. But when you’re talking about the two most populous nations on earth… you really only need one of these events to provoke a full-out catastrophe.

Relative Legitimacy

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I meant to post some thoughts on this last week, but things came up. It’s actually a fairly simple observation.

Compare the causes, reactions and results in the US (failed attempts to regulate, Aramcoma flouting the law, “We did not receive the miracle we were praying for,” no survivors, “worst in decades”)  and in China (scores rescued, “3,000 people have been working round the clock for eight days,” “our rescue plan has been effective,” stepped-up regulation by enforcing the rules) to their various mine disasters.

Which one looks like a responsible, capable, functioning government?