Energy industry stimulus plan

IER’s Bold Stimulus Plan: A Roadmap to Improving the Economy and Creating Jobs, All at No Cost to the Taxpayer

Energy is the lifeblood of our economy. As our competitors around the globe have shown us in recent years, job creation and economic growth begin with access to abundant, affordable energy supplies.

Unfortunately, the Obama administration’s stimulus proposals are founded on the fundamentally flawed notion that we will achieve prosperity if we make coal, oil, and natural gas, which make up 85 percent [1] of the energy that fuels our economy, more expensive and less available. Meanwhile, President Obama wishes to spend billions of taxpayer dollars on the most expensive and least efficient energy sources and force American consumers to pay more to purchase them.

Energy is, literally, “the capacity to do work.” More energy means more work, more jobs, and more economic growth. Less affordable energy means less work performed here at home. Affordable energy creates jobs and stimulates investment in America.

IER supports government policies that encourage private investment, foster job creation, and provide American consumers access to the vast, proven, affordable energy supplies they own beneath the 2.3 billion acres of government lands not leased for responsible energy production. These enormous taxpayer-owned resources, and the American jobs they would create, have been held hostage by a decades-long government policy of saying, “No, we can’t”.

Today, IER is offering a bold economic stimulus plan that will create jobs, strengthen our economy, enhance our national energy security, and make the U.S. more competitive in the world. Best of all, it won’t cost taxpayers a dime. In fact, it could generate hundreds of billions of dollars, along with jobs and new energy supplies for the future.

IER’s plan represents the most significant change in government energy policy in more than three decades. We urge the Obama Administration to say, “Yes, we can” to our two-part plan, which begins by embracing the fundamental medical precept: First, Do No Harm:

• Vow to defend jobs and investments against expensive, job-killing climate regulations. German Chancellor Angela Merkel recently stated that she would not allow EU climate regulations that “take decisions that would endanger jobs or investments in Germany.” President Obama should follow suit and vow to defend American jobs against costly climate regulations.
• Halt EPA’s attempt to regulate carbon dioxide using the Clean Air Act. The Clean Air Act was designed to regulate regional air pollutants, not global concentrations of carbon dioxide. President Obama needs to apply a cost-benefit analysis to EPA’s proposal to make 85 percent of the energy that fuels our economy more expensive and less available, cost Americans $7 trillion over the next 20 years, and accomplish little, if any, real reductions in global temperature.
• Renounce plans to bankrupt coal companies. As a presidential candidate, Obama said he would bankrupt coal-fired power plants with climate regulations. America currently gets 48 percent of our electricity from coal. Unlike wind and solar, coal is reliable, affordable, and proven. Wind and solar cannot power modern society’s always-on electricity needs.
• Join other policymakers in denouncing billions for “project[s] that depend on significant taxpayer subsidies while potentially doubling power costs” for American consumers and abandon all efforts to implement Federal Renewable Fuels Standards, Federal Renewable Portfolio Standards and Low Carbon Fuel Standards.

And second, say “Yes, we can” and pursue the following landmark changes in federal energy policy:

• End subsidies for all forms of energy and return the money to American taxpayers. The government should not be in the business of picking winners and losers in energy production. Furthermore, according to the Congressional Budget Office (CBO), direct payments to individuals and cutting taxes have the fastest and most significant impacts on the economy.
• Continue our progress on the most significant change in energy policy in decades: Streamline regulations to produce energy from American resources on American lands and coastal waters. ICF International recently released a study that shows developing America’s abundant but currently off-limits domestic energy supply would create 160,000 new jobs alone and generate $1.7 trillion for local, state, and federal tax revenue.
• Provide coastal states with 50 percent of revenue from offshore and onshore energy leasing. Last year alone, the U.S. raised over $23 billion from energy leasing on federal lands.
• Support exploration and energy production in ANWR. According to the Energy Information Administration, ANWR “is the largest unexplored, potentially productive geological onshore basin in the United States.” It contains a mean expected value of 10.4 billion barrels of oil. Opening ANWR would create hundreds of thousands of American jobs, generate billions of dollars in state and federal revenue, and enhance our energy security.
• Expedite job creation by waiving all regulations on federal lands for the expedited construction of the Alaska natural gas pipeline. Congress did this in 1973 for the 800 mile-long Trans-Alaska Oil Pipeline, which was built in just three years and has since delivered 16 billion barrels of oil to American consumers. Russia, Iran, and Qatar control 60 percent of the world’s natural gas supplies. We should use our abundant supplies of natural gas, and not allow another OPEC-style cartel to limit our energy sources.
• Allow the exploration and experimentation necessary to produce affordable energy from America’s oil shale resources. The western United States is home to an estimated 800 billion barrels of recoverable oil equivalent in oil shale. This is about three times the amount of proven oil reserves in Saudi Arabia. This resource is untapped and needs research to develop economically.
• Permit the exploration and experimentation necessary to produce affordable energy from methane hydrates. A 2007 study found that the U.S. has about 5,700 trillion cubic feet of methane hydrates—about 900 times the current annual gas consumption in the U.S. Like oil shale, this resource is untapped, and companies need to research ways to bring it to market.
• Limit frivolous lawsuits designed to thwart responsible development of American energy and the American jobs it creates. The following quote sums up this problem best. In an interview with Dow Jones Newswires in January 2003, The Wilderness Society’s Peter Morton threatened: “If you bid on a lease on public land, you can expect (environmental litigation).“
• Remove regulatory impediments to building and expanding refineries. We have not built a new refinery in the United States since 1976 because of environmental regulations and bureaucratic red tape. While existing refineries have gone to great lengths to expand their capacity to meet domestic demand, refinery expansions are becoming even more difficult due to regulatory impediments.
• Resolve issues involving the Yucca Mountain Repository for spent nuclear fuel. The Federal government has been studying Yucca Mountain as a fuel repository for the last 30 years. Ratepayers have paid billions to the Nuclear Waste Fund—it’s time for the Federal government to move forward and provide a return on that investment.
• Remove regulatory barriers to building the next generation of nuclear power plants. The Federal government should not stand in the way of developing nuclear fuel reprocessing, pebble-bed reactors, or whatever forms of nuclear energy are economical.
  

[1] According to EIA, in 2007 39 percent of our energy came from petroleum, 22 percent from coal, 23 percent from natural gas, 8 percent from nuclear, 2.4 percent from hydroelectric, 2.1 percent from wood derived fuels, 1.0 percent from biofuel, 0.3 percent from geothermal, 0.3 percent from wind, and 0.1 percent from solar. The latest data from EIA is available here: http://www.eia.doe.gov/cneaf/alternate/page/renew_energy_consump/table1.html

Scientists Identify Gene Essential for Nerve Regeneration

Scientists Identify Gene Essential for Nerve Regeneration. By Daniel Gorelick
Findings point to new mechanism for repairing damaged nerves
america.gov, January 27, 2009

Washington — Scientists have identified a gene required to repair severed nerve cells — a finding that could one day be used in the development of treatments for spinal cord injuries, according to a report published January 22 in the journal Science.

“We discovered a molecular target for a future drug that could vastly improve the ability of a neuron to regenerate after injury,” said Michael Bastiani, the University of Utah scientist who led the research team.

Each year, between 10 and 83 people out of every million people worldwide suffer a spinal cord injury, according to a 2006 study in the journal Spinal Cord. One-third of those injured become paralyzed in all four limbs. Complications from spinal cord injuries include urinary tract infections, depression, pneumonia and renal failure. The estimated lifetime costs are between $1 million and $3 million per injury, depending on the extent of the injury and the age at which it occurs, according to the Christopher Reeve Foundation, a nonprofit organization dedicated to curing spinal cord injuries.

The gene identified in the study, dlk-1, is unique because it is not required for normal growth in embryos, yet it is “absolutely required for regeneration” after injury, Bastiani said. “Most of us believed that virtually everything we found in regeneration also would be involved in development, so it is surprising.”

When the dlk-1 gene was mutated, neurons failed to regrow after injury. When scientists artificially activated dlk-1, regrowth was accelerated.

The study was performed using the nematode worm C. elegans, many of whose neurons are able to regenerate after injury. Many of the genes important for the function of the nervous system in worms, including dlk-1, are also present in humans.


SCREENING FOR REGENERATION

Although worms and humans seem worlds apart, the worm is an ideal tool to identify genes important for neuron regeneration, according to lead author Marc Hammarlund, assistant professor at Yale University School of Medicine.

The C. elegans worm is tiny and transparent, enabling scientists to watch its development unfold cell by cell from embryo to adult, a discovery that led to the Nobel Prize in medicine in 2002. The worm’s tiny size and completely sequenced genome make it amenable to genetic screens, a technique where researchers mutate thousands of genes to identify those few involved in a particular physiological function.

Hammarlund and colleagues used worms genetically engineered to contain a population of glowing green neurons, making them easy to distinguish under the microscope. (See “Four Americans Share in Nobel Science Prizes.”)

Researchers then mutated the beta-spectrin gene. Neurons in these mutants are damaged by the mechanical strain of normal movement. Unlike in mammals, worm neurons can regenerate, so as the worms move their neurons are cycling between damage and regrowth. Using a technique called RNA interference, Hammarlund interfered with the function of more than 5,000 genes individually and examined whether regeneration was impaired.

The dlk-1 gene stood out because when it was mutated, the neuron regeneration decreased dramatically, Hammarlund said. He then took normal worms and used a laser to severe nerve cells; when dlk-1 was over-activated, the severed neurons regrew faster than normal.

Hammarlund told America.gov that more than 60 genes were identified in the screen and could play a role in regeneration. The dlk-1 gene is, thus far, the best understood, but Lebanese postdoctoral fellow Rachid El Bejjani is now studying the other genes identified in the screen.


FUTURE GROWTH

The link between dlk-1 and nerve regeneration in worms prompts many questions as scientists look to translate their findings to humans.

The function of dlk-1 in normal, adult neurons is not known, Hammarlund said. He was surprised to discover that although dlk-1 is required for the regrowth of damaged neurons, it is not required for the initial growth of neurons in embryos.

In humans, damaged cells in the peripheral nervous system regrow far better than those in the central nervous system. It is not clear why, but it is possible that dlk-1 is preferentially active in the periphery, a question that scientists now will examine, according to Hammarlund. Also not known is whether dlk-1 can spur regrowth of neurons regardless of the damage — it may turn out that dlk-1 is more effective at repairing neurons damaged by trauma than those damaged by a stroke.

One caution is that dlk-1 needs to be activated at the time of injury — activation even two hours after neurons were cut with a laser failed to bring forth robust regrowth. Hammarlund acknowledges that this narrow window is a barrier to treating traumatic nerve damage in humans, but is confident that eventually “we’ll get there.”

“In the future, we would like to develop drugs that could activate this chain of molecular events in nerve cells and stimulate regeneration of diseased and injured nerve cells,” said Erik Jorgenson, a coauthor of the study and scientific director of the Brain Institute at the University of Utah. “At this point, we can’t do that. But this study gives us hope that in the future, we will have a rational approach for stimulating regeneration.”

Krugman, Mankiw, DeLong on the Romers' "tax changes have very large effects on output"

Memo to Paul Krugman. By Philip I. Levy
AEI, Tuesday, January 27, 2009

Allow me to introduce myself: I'm a Bad Faith Economist. At least, that's Paul Krugman's contention in the New York Times yesterday. He argues that opponents of the stimulus plan are all dastardly dissemblers, scheming to sabotage a new New Deal that would otherwise save the economy.

The stimulus package is an unwieldy monster weighing in at over $800 billion. It includes new spending projects, aid to state governments, and proposed tax cuts. It is the new spending projects that spark this particular debate. Krugman's logic is as follows: if any arguments against the spending are flawed, then all must be flawed. That certainly makes a critic's job easier, so let me adopt his approach for the moment and deal with his tactics on taxes.

Krugman says we should "write off anyone who asserts that it's always better to cut taxes than to increase government spending." I agree. I don't know of any critics who are asserting that, but there must be some out there. Krugman dismisses them by arguing that air traffic control is useful. Again, I agree.

He then proceeds: "Meanwhile, it's clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts." For those who are not well-versed in the rules of classical rhetoric, the phrase "it's clear that…" means "I am about to make an assertion that I strongly believe but would be very hard to prove." In fact, there is a raging debate about whether tax cuts or public spending do more to revive a troubled economy. One side of this debate--see Greg Mankiw, especially here--argues that tax cuts are superior, while another side--see Brad DeLong, especially here--argues that tax cuts and spending are roughly equal. They're both arguing about this 2007 paper co-authored by the incoming Chair of President Obama's Council of Economic Advisers, Christina Romer. In it, she and her husband, David Romer, conclude that "tax changes have very large effects on output."

For a fair fight between those touting tax cuts and those supporting spending, they compare a tax cut today to a spending boost today. If one compared a tax cut now to spending years down the road, then it would be no contest-–tax cuts would win. In fact, that's pretty much the choice we face. According to press reports of an unreleased CBO study, only $26 billion of $355 billion in new spending would occur in the current fiscal year. Another $110 billion would come in Fiscal 2010. That's less than 40 percent of the total by September 2010. Those numbers are so low because it's very hard to find and fund that many worthwhile projects that quickly. Democrats have countered with much higher percentages, but those generally include the tax cuts and the aid to states, which are not really at issue.

Now, there may be a lot to be said for a new electricity grid and renovated highways, even if they don't show up until next decade. But those plans should be judged on their merits, with hearings and all the other trappings of democratic deliberation. They shouldn't be rammed through as emergency stimulus.

It is also misleading to imply that one must favor either tax cuts or the proposed spending projects right now. I don't believe that either holds the key to economic recovery. At the heart of our current crisis lie a downward spiral in the housing sector and a near collapse of our financial sector. There are plans that address these root causes, but they are likely to be expensive. Without such action, a fiscal boost is unlikely to save the day. With such action, a fiscal boost (beyond what is already in the works) may be unnecessary and unaffordable.

One might almost ask whether Dr. Krugman is being intentionally misleading with his piece, but I would not stoop so low as to question his motives. I am perfectly willing to accept that he is putting forward his flawed arguments in good faith.

Philip I. Levy is a resident scholar at AEI.

President Obama was on Capitol Hill to hear out Republican ideas for the American Recovery and Reinvestment Plan.

On the Hill
White House blog, Tuesday, January 27th, 2009 at 2:01 pmOn the Hill

President Obama is on Capitol Hill today to hear out Republican ideas for the American Recovery and Reinvestment Plan.

Upon finishing his meeting with House GOP leaders, he gave the brief remarks below..

He’s on his way to see Senate Republicans at 2:30 PM.

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REMARKS BY THE PRESIDENT AFTER MEETING WITH HOUSE REPUBLICAN CAUCUS
Ohio Clock Corridor, U.S. CapitolJanuary 27, 2009, 1:41 P.M. EST

THE PRESIDENT: Hello, everybody. We had a very constructive meeting with the House members, members of the Republican Caucus. I'm a little bit late for my Senate colleagues -- former Senate colleagues.

And the main message I have is that the statistics every day underscore the urgency of the economic situation. The American people expect action. They want us to put together a recovery package that puts people back to work, that creates investments that assure our long-term energy independence, an effective health care system, an education system that works; they want our infrastructure rebuilt, and they want it done wisely, so that we're not wasting taxpayer money.

As I explained to the Republican House Caucus, and I'll explain to my former Senate colleagues, the recovery package that we have proposed and is moving its way through Congress is just one leg in a multi-legged stool. We're still going to have to have much better financial regulation, we've got to get credit flowing again, we're going to have to deal with the troubled assets that many banks are still carrying and that make the -- that have locked up the credit system. We're going to have to coordinate with other countries, because we now have a global problem.

I am absolutely confident that we can deal with these issues, but the key right now is to make sure that we keep politics to a minimum. There are some legitimate philosophical differences with parts of my plan that the Republicans have, and I respect that. In some cases they may just not be as familiar with what's in the package as I would like. I don't expect a hundred percent agreement from my Republican colleagues, but I do hope that we can all put politics aside and do the American people's business right now. All right.

President to Muslim World: "Americans are not your enemy"

President to Muslim World: "Americans are not your enemy"
White House blog, Tuesday, January 27th, 2009 at 9:48 am

In his first interview with an Arab television station, President Barack Obama offered a bold change to America's relations with the Muslim world.

"My job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives," President Obama told Al Arabiya. "My job to the Muslim world is to communicate that the Americans are not your enemy."

In the interview, conducted in the White House map room, President Obama also expressed his commitment to tackling the Middle East peace process immediately.

"Sending George Mitchell to the Middle East is fulfilling my campaign promise that we're not going to wait until the end of my administration to deal with Palestinian and Israeli peace, we're going to start now," he said. "It may take a long time to do, but we're going to do it now."

The interview is part of the President’s broader outreach to the Muslim world, which includes a promise to make a major address from the capital of a Muslim nation.

Al Arabiya is a 24-hour Arabic-language news channel based out of Dubai.

On European Parliament's plans for pyrethroids and organophosphates

Insecticide or Suffering? By Gilbert Ross, M.D.
American Council on Science and Health, Sunday, January 18, 2009

Next week, the European Parliament will debate stringent regulation of a number of effective pesticides. It is apparently too much to expect a sense of shame from European public health officials and their activist "environmental" collaborators when the subject of chemical pesticides is raised.

What about some sense of history? Or compassion? Not likely, as the European Parliament votes next Tuesday on a proposal to tighten the already onerous restrictions on many common insecticides. If this regulation is passed, the consequences will be devastating -- not in Europe, but in Africa and Asia.

Over the decades from World War II through the late 1960s, widespread use of the potent and safe insecticide DDT led to eradication of many insect-borne diseases in Europe and North America. But at the doorstep of global malaria control, DDT became the poster child for environmental degradation, thanks to Rachel Carson's polemic, Silent Spring.

Based on no scientific evidence of human health effects, the newly established U.S. Environmental Protection Agency banned DDT, and its European counterparts followed suit. Subsequently, more than 1 million people died each year from malaria -- but not in America or Europe. Rather, most of the victims were children and women in Africa and Asia.

Today, even while acknowledging that indoor spraying of small amounts of DDT would help prevent many deaths and millions of illnesses, nongovernmental organizations continue -- with great success -- to pressure African governments not to allow its use. In order to stave off such pressure and be allowed to sell their agricultural products in Europe, African public health officials cave, and their children die needlessly. Yet, rather than learning the tragic lesson of the DDT ban, the European Union leadership in concert with activists wants to extend this unscientific ban to other effective insecticides, including pyrethroids and organophosphates -- further undercutting anti-malarial efforts.

The currently debated regulation would engender a paradigm shift in the regulation of chemicals, from a risk-based approach -- based on real world exposures from agricultural applications -- to a hazard-based standard, derived from laboratory tests and having little or no basis in reality as far as human health is concerned. Of course, this is fine with anti-chemical zealots in the activist camps. Their concern is bringing down chemical companies in the name of "the environment" -- tough luck if African children have to be sacrificed to their agenda, as was the case with DDT (which is still banned in the EU and not under consideration in the current debate).

Further consequences involve discontinuation of currently used insecticides, leading to higher prices and decreased availability of these chemicals, which would worsen food shortages and increasing malnutrition. Moreover, farmers and marketers of agricultural products in the world's poorest regions would withdraw from using restricted pesticides out of fear of discrimination against their exports in the EU, with similar consequences for farmers' yields, income and local nutrition. Such bans would, in effect, become nontariff trade barriers against poor African farmers.

The banned insecticides will not be easily replaced -- researchers in this area of chemistry will take note of the new, stringent standards and decide the potential return on their investment is not worth the effort of passing through the regulatory hurdles. Development of newer, more effective pesticides will come to a halt.

Most poignantly, the fight against malaria and other insect-borne tropical diseases would take another hit, with resulting illness, disability and death disproportionally affecting children under five and pregnant women.

And what, after all, is the "danger" of these chemicals being debated? In fact, there is no evidence to support the activists' contention that insecticides pose a health threat to humans. Even DDT, one of the most studied chemicals of all time, has been conclusively shown to be safe for humans at all conceivable levels of exposure sufficient to control malaria and save millions of lives.

So these new restrictions would have no benefit, yet contribute to much suffering. Is it asking too much for someone in power in the European Union to care?

Gilbert Ross, M.D., is medical director of the American Council on Science and Health in New York City.

Chernobyl, Three Miles Island and thyroid cancer

Nuke Those Fears! By Ruth Kava, Ph.D., R.D.
Greens dismiss nuclear energy based on little more than greatly exaggerated depictions of the supposed dangers and difficulties of its use.
American Council on Science and Health, Jan 27, 2009

Excerpts:

The environmental mantra these days has two main components -- clean energy and green (sustainable) energy -- anything but oil and coal. Proponents strongly encourage the development of solar and wind energy, neither of which is ready yet for widespread commercial use. But they ignore or downplay the use of a well understood and already commercialized technology -- nuclear energy -- based on little more than greatly exaggerated depictions of the supposed dangers and difficulties of its use.

One fear that has been widely promoted is that of large-scale accidents in nuclear power plants. Anti-nuclear activists point to two examples of that -- the explosion at the Russian Chernobyl reactor in 1986, and the partial meltdown of the fuel rods at the Three Mile Island reactor in 1979.

The Chernobyl explosion was due to errors made by the operators during a test and a lack of adequate safety features and procedures that could have prevented such errors. It will surprise many that, with the exception of workers who were on the scene and received massive acute doses of radiation, there has been no evidence of increased radiation-caused mortality. In contrast to the Chernobyl plant, modern nuclear facilities have redundant safety features to prevent such errors.

Although it has also been used as an example of a large-scale accident, there was actually little release of radioactivity from the Three Mile Island reactor -- even though about half of the fuel melted. The level of radioactivity received by the surrounding area was not significantly greater than that normally supplied by natural background sources. In other words, the containment precautions were effective. Of course, the anti-nuclear fanatics' propaganda pays no attention to these simple facts.

Another fear that has been widely promoted is that release of radioactivity from a nuclear plant -- specifically the radioactive iodine, I131 -- would cause thyroid cancer in exposed children. This fear actually has some biological basis in that the thyroid gland avidly takes up iodine. It can be prevented from absorbing the radioactive iodine, however, by giving a large dose of non-radioactive iodine. An even simpler preventive measure: avoid drinking milk for a week or two after such an (unlikely) event. Of course prevention of I131 release is a much better option.

It is true that a year after the Chernobyl accident screening studies revealed an increased occurrence of thyroid cancer in exposed children. However, many scientists have questioned whether this was really due to the Chernobyl-related exposure, since thyroid cancer typically has a latency period of thirty years. Further, it is important to note that prior to the explosion, there was very little screening of children in the Chernobyl area -- but around 90% were screened afterwards. This fact alone very likely contributed to the increased incidence observed. In addition, the incidence of thyroid cancer was actually lower in the highly contaminated region than in the general Russian population.

[...]

Dr. Ruth Kava is Director of Nutrition at the American Council on Science and Health (ACSH.org, HealthFactsAndFears.com).

US–India Strategic Partnership on Laser-Based Missile Defense

U.S.–India Strategic Partnership on Laser-Based Missile Defense. By Lisa Curtis and James Jay Carafano, Ph.D.
Heritage, January 27, 2009
WebMemo #2250

Last week, the Press Trust of India reported that defense officials intend to produce a laser capable of shooting down enemy ballistic missiles. The United States is a global leader in directed-energy defenses, including both low and high-powered lasers. American military research is also highly advanced in the technologies of acquiring targets as well as the command, control, and battle management systems necessary to identify and direct weapons to destroy missiles and other targets. In recent years, the United States and India have increased bilateral cooperation in a range of defense, counterterrorism, and homeland security areas. This cooperation is helping increase trust and confidence between the two nations while fostering security, stability, and prosperity in Asia. Working together on directed-energy developments offers a significant opportunity to strengthen the U.S.-India strategic partnership.


India Goes to Light Speed

The United States and India share many security concerns, such as the threat of ballistic missiles. V. K. Saraswat of the Defense Research and Development Organization rightly told the Press Times of India: "If you have a laser-based system on an airborne or seaborne platform, it can travel at the speed of light and in a few seconds, [and] we can kill a ballistic missile coming towards [India]." India's interest in developing directed energy defenses is understandable, as lasers have several distinct advantages. Such weapons:

• Can use a high-powered beam of energy to disable electrical components or detonate explosives, rendering the attack means such as the warhead or body of a missile useless;
• Come with an almost infinite magazine--as long as the weapons have power, they can be recharged and fired again;
• Can be aimed effectively using existing target acquisition systems (such as radars) and command and control systems (such as a computer battle management network); and
• Can be employed with a minimum of risk toward surrounding civilians, buildings, or vehicles (such as aircraft, cars, and ships).

In addition, lasers are versatile. While high-powered lasers address ballistic missile threats, low-powered lasers have a number of potential security uses, from disabling small boats to downing shoulder-fired missiles to intercepting rockets and mortars. All these uses have application to Indian security concerns.

It is also worth noting that missile defenses, such as high-powered lasers, limit the potential for regional conflict. Missile defenses serve as important deterrents, undermining the effectiveness of enemy threats. They also provide an alternative to massive retaliation in the face of an actual attack. The security provided by missile defenses actually limits the likelihood of armed escalation or an arms race and makes diplomacy more effective. It is no coincidence that the greatest strides in reducing the nuclear arsenals came in the late 1980s, at the same time the U.S. was pursuing the Strategic Defense Initiative. A world with effective missile defenses is safer and more stable.


American Arsenal

The United States has significant research and development capabilities regarding the application of lasers for national security uses. The Tactical High-Energy Laser (THEL) is one such experimental system tested by the U.S. Army. Development of the THEL began in 1996 as a joint program between the United States and Israel to develop a laser system capable of shooting down Katyusha rockets, artillery, and mortar shells. The THEL system uses radar to detect and track incoming targets. This information is then transferred to an optical tracking system, which refines the target tracking and positions the beam director. The deuterium fluoride chemical laser then fires, hitting the rocket or shell and causing it to explode far short of its intended target. More recently, the Army has experimented with low-power commercial solid-state lasers.

Another system under development in the United States is the Airborne Laser (ABL). The ABL is a system that uses a megawatt chemical laser mounted on a modified Boeing 747 to shoot down theater ballistic missiles. The megawatt-class laser was first successfully tested at full power in early 2006. The system is still under development.


A Shared Security Interest

The American record of military laser research and its many cooperative ventures with friendly and allied powers suggests that a joint U.S.-Indian directed energy program is certainly achievable. The shared interests of both nations in promoting security and stability in Asia also indicates they have a common cause in developing military technologies that would lessen the potential for conflict while effectively countering terrorism. The U.S. should explore opportunities for joint development of cutting edge directed energy technologies--lasers--with India as part of overall missile defense dialogue and deepening of military-to-military ties.

Lisa Curtis is Senior Research Fellow in the Asian Studies Center, and James Jay Carafano, Ph.D., is Assistant Director of the Kathryn and Shelby Cullom Davis Institute for International Studies and Senior Research Fellow in the Douglas and Sarah Allison Center for Foreign Policy Studies at The Heritage Foundation.

State Dept Contributes $125 Million to the United Nations High Commissioner for Refugees

State Department Contributes $125 Million to the United Nations High Commissioner for Refugees
Media Note, Office of the Spokesman
State Dept, Washington, DC, January 27, 2009

The United States is pleased to announce an initial contribution of $125 million toward the 2009 operations of the United Nations High Commissioner for Refugees (UNHCR).

The contribution will support UNHCR efforts worldwide, including activities such as refugee returns to Afghanistan and Burundi; local integration and resettlement; and protection and life-saving assistance such as the provision of water, shelter, food, healthcare, and education to refugees, internally displaced persons, and other persons under UNHCR's care and protection in places like Colombia, Ecuador, Georgia, Thailand, Nepal, Pakistan, Sudan, Chad, Kenya, Liberia, the Democratic Republic of Congo, Uganda, and Rwanda.

The contribution will directly support UNHCR's Annual and Supplementary Program activities as indicated below.

Africa $65.07 million
Asia and Pacific $15.88 million
Europe $9.92 million
Global Operations $7.16 million
North Africa/Middle East $6.73 million
Headquarters $9.87 million
Western Hemisphere $5.5 million
Emergency Response activities $4.87 million
TOTAL $125.0 million

2009/082

US: Bainimarama Has No Plan For Elections in Fiji

Bainimarama Has No Plan For Elections in Fiji
Press Statement by Robert Wood, Acting Spokesman
US State Dept, Washington, DC, January 27, 2009

The United States is extremely disappointed that Fiji’s self-appointed leader, Commodore Frank Bainimarama, refused to attend the Pacific Island Forum (PIF) conference of leaders in Port Moresby on January 27. The United States firmly supports the PIF’s statement that “More than two years of rule by an unelected military government, with no clear timetable for the return of constitutional government to the people, is not acceptable by international standards.” The United States strongly endorses the PIF position and urges Fiji’s interim government to move immediately to restore democracy and to hold free and fair elections by the end of this year.

2009/080

Bjorn Lomborg on Mr Obama's global warming policies

The climate change safari park, by Bjorn Lomborg
The Economic Times (India), Jan 23, 2009, 0033 hrs IST

Barack Obama in his inaugural speech promised to “roll back the spectre of a warming planet.” In this context, it is worth contemplating a passage from his book Dreams from My Father. It reveals a lot about the way we view the world’s problems.

Obama is in Kenya and wants to go on a safari. His Kenyan sister Auma chides him for behaving like a neo-colonialist. “Why should all that land be set aside for tourists when it could be used for farming? These wazungu care more about one dead elephant than they do for a hundred black children.” Although he ends up going on safari, Obama has no answer to her question. That anecdote has parallels with the current preoccupation with global warming. Many people — including America’s new President — believe that global warming is the pre-eminent issue of our time, and that cutting CO2 emissions is one of the most virtuous things we can do.

To stretch the metaphor a little, this seems like building ever-larger safari parks instead of creating more farms to feed the hungry.

Make no mistake: global warming is real, and it is caused by manmade CO2 emissions. The problem is that even global, draconian, and hugely costly CO2 reductions will have virtually no impact on the temperature by mid-century. Instead of ineffective and costly cuts, we should focus much more of our good climate intentions on dramatic increases in R&D for zero-carbon energy, which would fix the climate towards mid-century at low cost. But, more importantly for most of the planet’s citizens, global warming simply exacerbates existing problems.

Consider malaria. Models shows global warming will increase the incidence of malaria by about 3% by the end of the century, because mosquitoes are more likely to survive when the world gets hotter. But malaria is much more strongly related to health infrastructure and general wealth than it is to temperature. Rich people rarely contract malaria or die from it; poor people do.

Strong carbon cuts could avert about 0.2% of the malaria incidence in a hundred years. The other option is simply to prioritise eradication of malaria today. It would be relatively cheap and simple, involving expanded distribution of insecticide-treated bed nets, more preventive treatment for pregnant women, increased use of the maligned pesticide DDT, and support for poor nations that cannot afford the best new therapies.

Tackling nearly 100% of today’s malaria problem would cost just one-sixtieth of the price of the Kyoto Protocol. Put another way, for each person saved from malaria by cutting CO2 emissions, direct malaria policies could have saved 36,000. Of course, carbon cuts are not designed only to tackle malaria. But, for every problem that global warming will exacerbate — hurricanes, hunger, flooding — we could achieve tremendously more through cheaper, direct policies today.

For example, adequately maintained levees and better evacuation services, not lower carbon emissions, would have minimised the damage inflicted by Hurricane Katrina on New Orleans. During the 2004 hurricane season, Haiti and the Dominican Republic, both occupying the same island, provided a powerful lesson. In the Dominican Republic, which has invested in hurricane shelters and emergency evacuation networks, the death toll was fewer than ten. In Haiti, which lacks such policies, 2,000 died. Haitians were a hundred times more likely to die in an equivalent storm than Dominicans.

Obama’s election has raised hopes for a massive commitment to carbon cuts and vast spending on renewable energy to save the world — especially developing nations. As Obama’s Kenyan sister might attest, this could be an expensive indulgence. Some believe Obama should follow the lead of the European Union, which has committed itself to the goal of cutting carbon emissions by 20% below 1990 levels within 12 years by using renewable energy. This alone will probably cost more than 1% of GDP.

Even if the entire world followed suit, the net effect would be to reduce global temperatures by one-twentieth of one degree Fahrenheit by the end of the century. The cost could be a staggering $10 trillion.

Most economic models show that the total damage imposed by global warming by the end of the century will be about 3% of GDP. This is not trivial, but nor is it the end of the world. By the end of the century, the United Nations expects the average person to be 1,400% richer than today.

An African safari trip once confronted America’s new president with a question he could not answer: why the rich world prized elephants over African children. Today’s version of that question is: why will richer nations spend obscene amounts of money on climate change, achieving next to nothing in 100 years, when we could do so much good for mankind today for much less money? The world will be watching to hear Obama’s answer.

(The author, adjunct professor at the Copenhagen Business School, is the organiser of the Copenhagen Consensus.)

Pelosi: "contraception [...] will reduce costs to the states and to the federal government."

Speaker Nancy Malthus. WSJ Editorial
Pelosi should abstain from social engineering.
WSJ, Jan 27, 2009

One of the more curious items in the $825 billion House "stimulus" is $87 billion to help states with Medicaid, specifically including an expansion of family-planning services. The implication is that more people mean less economic growth.

Following a White House meeting with President Obama on Friday, Republican John Boehner, the House Minority Leader, asked how spending millions of dollars on birth control will help stimulate the economy. On Sunday, George Stephanopoulos of ABC's "This Week" repeated the question to House Speaker Nancy Pelosi, who responded that "family planning services reduce costs."

She added: "The states are in terrible fiscal budget crises now, and part of what we do for children's health, education and some of those elements are to help states meet their financial needs. One of those -- one of the initiatives you mentioned, the contraception -- will reduce costs to the states and to the federal government."

The notion that a larger population will produce a lower standard of living can be traced to the 18th-century economist Thomas Malthus. But during Malthus's own lifetime, his prediction was proved false, as he later acknowledged. Population and living standards rose simultaneously, and have continued to do so.

Ms. Pelosi's remarks ignore the importance of human capital, which is the ultimate resource. Fewer babies would move the U.S. in the demographic direction of Europe and Asia. On the Continent, birth rates already are effectively zero, and economists are predicting labor shortages in the years ahead. In Japan, where the population is aging very fast, workers are now encouraged to go home early to procreate. Japan is projected to lose 21% of its population by 2050.

The age and growth rate of a nation help determine its economic prosperity. A smaller workforce can result in less overall economic output. Without enough younger workers to replace retirees, health and pension costs can become debilitating. And when domestic markets shrink, so does capital investment. Whatever one's views on taxpayer subsidies for contraception, as economic stimulus the idea is loopy.

Iraq's Next Vote: How elections can work in an unstable country

Iraq's Next Vote. WaPo Editorial
How elections can work in an unstable country
Washington Post, Tuesday, January 27, 2009; Page A16

PRESIDENT OBAMA has suggested that elections may not be constructive in countries where there is no "freedom from fear" or where the rule of law and civil society are undeveloped. Iraq may be about to prove him wrong. Though security is fragile, the constitution is still disputed and institutions such as courts and a free media remain works in progress, the country's third national election since 2005 is scheduled for Saturday -- and it is looking like another important step toward stabilization.

The campaign for positions in 14 provinces so far has been a major improvement over the previous Iraqi elections -- not to mention the rigged or tightly limited ballots staged by most other Arab countries. Some 14,400 candidates are competing for 440 seats; in contrast to the last provincial vote, in January 2005, candidates are identified by name rather than being presented anonymously on a party slate. Thousands are openly competing in Iraqi cities and towns once paralyzed by violence or controlled by al-Qaeda. Blast walls have been papered with posters, and much of the debate is focused on improving government services. Violence, which spiked four years ago, so far has been a minor factor: Two candidates have been reported killed, and U.S. and Iraqi casualties this month are among the lowest since the war began.

In 2005, voters mostly chose among sectarian coalitions, and most Sunnis boycotted the vote. This month, Sunni parties are actively competing, and though religious parties remain important, the major Shiite and Sunni factions are jockeying among themselves. This means that Sunni politicians will be far better represented in local government and that the leaders themselves will be more popular, secular and diverse. In southern Iraq, an important debate over whether Shiites should support a strong national government or a Shiite-dominated federal region is being fought out by the Dawa party of Prime Minister Nouri al-Maliki and the Islamic Supreme Council of Iraq, which controls many provincial councils.

Mr. Maliki has gravitated toward a secular nationalism: His coalition is called State of Law. Once dismissed as hopelessly weak, the prime minister has grown so strong that some accuse him of plotting to construct a new Iraqi autocracy. For the moment, that seems unlikely, given the balances built into Iraq's new political system. But Mr. Maliki's platform does augur an Iraq that will be relatively secular, that will assert its independence from Iran and that will remain allied with the United States in the fight against al-Qaeda. If that prospect is advanced this weekend, Iraqis -- and their American partners -- will have elections to thank.

How to Cull Geese Flocks (PETA- and GeesePeace-Approved!)

How to Cull Geese Flocks (PETA- and GeesePeace-Approved!), by Greg Pollowitz
Planet Gore/NRO, Monday, January 26, 2009

Here's a good article on the problem of non-migratory Canada Geese in Connecticut. First up, why they won't migrate:

"There has been a steady increase of the nonmigratory Canada geese since the 1950s," Cherichetti said.

Harris estimated that there were 40,000 Canada geese in the state, primarily in the southwestern region.

Cherichetti said the geese are staying because they have the perfect combination of foraging (food), nesting (habitat) and covering habitat in this area of the state. They also don't have many natural predators left in Connecticut.

"With each nesting pair producing nonmigratory goslings each year, there are thousands of geese born each year that do not migrate," said Patrice Gillespie of the Wilton Conservation Commission member and a member of the Norwalk River Watershed Initiative. "Because we feed them and provide them with mowed lawns and well-groomed grass, we provide them with an ample food source, thus contributing to the excess nutrient problem they create."

And take a look at the "approved" method for controlling the population:

As a result, Cherichetti and other local environmental activists are urging local residents, especially those with waterfront property, to do their part in controlling the geese population through geese "family planning."

"We are trying to reduce their long-term growth rate by locating their nests and oiling their eggs," Cherichetti said. "The oiling means that the clutch of eggs is non-viable and won't mature into chicks. The birds continue to incubate the nests because they don't realize the eggs aren't viable. If we were to take the eggs away instead, it would result in the geese laying more eggs."

According to Cherichetti, in order to legally oil the eggs, municipalities must obtain a registration from the Fish and Wildlife Service. Then, with the permission of private property owners, environmental officers like Cherichetti can enter their property and oil the nests.

Eggs are only oiled if they do not float during a float test. If an egg, submerged in water, floats it means it is in the later stages of incubation and the chick has fully formed, so the egg wouldn't be oiled. If the egg sinks, in means it has been incubated for less than 13 days and the chick is not matured, so the egg is allowed to be oiled.

This method has been approved by several animal rights groups, including GeesePeace, PETA and the Humane Society because of the "float test" method, Cherichetti said.

"I think it's because of that clause that animal rights groups approve of the oiling and are even quite active in the oiling because they recognize that without minimally invasive methods to control the geese population the geese are going to have other issues like over-competition for food and diseases," Cherichetti said.

Other issues . . . like airplane crashes. Thanks in part to a feel-good bird-sanctuary earmark provided by Sen. Chuck Schumer, Laguardia airport has witnessed and a near tripling of bird strikes over the past few years:

When Flight 1549 took off from LaGuardia, North and South Brother Island Sanctuaries were about one-and-a-half miles to its west. As the jet headed north, it flew within two miles of Goose Island, another city bird sanctuary.

Seconds later, pilots radioed a bird strike and the plane started losing altitude as it headed for the Hudson.

"I predicted something just like that based on what we knew as a result of our study and the close proximity of a large bird population," aviation attorney Andrew Maloney said.

Data that we obtained from the Port Authority shows a dramatic increase in the number of reported bird strikes at LaGuardia in the last six years — From 31 bird strikes in 2002 to 87 in 2007, nearly a tripling in the number of strikes.

Parks and Recreation insists its sanctuaries pose no threat to aircraft. Egrets and cormorants nest on the islands. Experts we spoke to say both can pose risk to aircraft. In 2004, a passenger jet had to make an emergency landing in Chicago after one engine ingested two cormorants and caught on fire.

"Each one of these birds that are wading birds, all get sucked into engines and all pose a threat. They all pose a threat," Garber said.

A spokesperson for Parks and Recreation says there is no causal link between birds nesting on these islands and any bird strikes. She said the Port Authority has not contacted parks about the issue.

Industry Views On President Obama Clearing Way for California to Institute a Carbon Tax

President Obama Clearing Way for California to Institute a Stealth Carbon Tax
Institute for Energy Research, January 26, 2009

President Obama has ordered the Environmental Protection Agency to swiftly decide whether or not it will waive federal law and allow California to regulate greenhouse gas emissions from automobiles. EPA is very likely to grant the waiver enabling California to institute new and costly regulations. The regulations amount to a stealth carbon tax of at least $1,000 on average per car or truck.

While the costs for this action are substantial, the benefits will be miniscule. These regulations will only reduce carbon dioxide emissions by a tiny amount. In fact, if every car in the US met these standards, the amount of carbon dioxide reduced would be overcome by the increase in other parts of the world within 134 days.[1] American jobs, American workers and American family budgets will suffer. Meanwhile carbon dioxide emissions savings will essentially be “background noise.”

According to the rosy and dated estimates from California’s regulators, granting the waiver and allowing California to further regulate automobiles will increase the average price of a car by over $1,000. In addition to California, 16 other states have indicated that they plan to implement California’s costly regulations. If California and other states choose to deliberately increase the cost of automobiles for their citizens, their voters can express their discontent to their government. However, since California and the 13 other states’ citizens make up 50 percent of the nation’s population, in order to make car cost-effectively, automakers will likely be forced to implement California’s regulations on all cars, not just ones for California. This means that California will become the de facto national regulator and all Americans will pay a hidden $1,000+ tax per car.

Worse, there are infinitesimally small benefits generated from the planned regulations. In fact, if every car and truck complied with California’s regulation today (in reality, California’s regulation will likely only apply to new cars and trucks) U.S. emissions of greenhouse gases would decrease by 5 percent overnight.[2] But emissions from the rest of the world are increasing so dramatically that by mid-June, emissions increases from the rest of the world make our decrease moot.[3] This small and costly policy would have no noticeable impact on carbon dioxide emissions.

This program hurts family budgets and transportation affordability and provides no real benefits. It is a luxury that our nation should not be subjected to when economic times were good and we certainly cannot afford it now.

President Obama should ensure that Detroit builds cars Americans want to buy, not to satisfy California’s regulators. After all, should the U.S. be forced to follow the policies of a state nearing bankruptcy and losing massive numbers of jobs?

IER on Oil Speculation

60 Minutes Spectacle on Speculators
Institute for Energy Research, Jan 26, 2009

Excerpts:

The January 11 edition of 60 Minutes featured a segment on oil speculation. Correspondent Steve Kroft interviewed hedge fund manager Michael Masters and others who blamed the run-up in oil prices on hedge funds and other investors. Unfortunately, Kroft failed to interview a single person who explained the benefits of hedging and even speculation on oil contracts. The 60 Minutes takeaway message—that government should increase regulation of commodities futures markets—could actually increase volatility in the oil market and hurt consumers.

[...]

The Benefits of Futures Markets

As we explained in an IER study issued last summer, the commodities futures markets perform a vital function by allowing parties to “lock in” a price of oil months or even years in advance. By removing their exposure to huge price swings, both oil producers and major consumers (such as refiners and airlines) can more confidently plan their future operations.

For example, the owner of an oil field might be willing to sink new wells if he expects oil prices to average at least $50 per barrel in 2010, while an airline might expand its service area to include a new city, but only if it can buy oil at less than $75 per barrel throughout 2010. If there were no futures markets, the oil producer and airline might decide to play it safe, rather than investing millions in projects that could prove unprofitable if oil prices move the wrong way. But fortunately with sophisticated financial markets, the two enterprises can hedge away this risk with futures contracts. The oil producer can sell (“go short”) futures contracts, agreeing to sell his output in 2010 for, say, $65 per barrel, and the airline can take the other side of the contracts. Both parties benefit by locking in the price of $65, rather than being subject to the volatile spot price of oil.


Successful Speculation Reduces Price Volatility

Just about everyone agrees on the benefits of futures markets when the buyers and sellers are those who physically deal with oil by the nature of their business. But even non-traditional “speculative” buyers—who plan on unloading their futures contracts before taking physical delivery—perform a useful service if they accurately forecast price moves.

The motto of the speculator is to “buy low, sell high.” (Or a more sophisticated version is to “short-sell high, cover low.”) But these actions reduce the volatility in the market, because the speculator’s buying pulls up prices when they are too low, while the speculator’s selling pushes down prices when they are too high. This is exactly what consumers want speculators to do. When the price strays from where they “ought” to be, an astute speculator comes along and knocks it back into line.

Now it’s true that many investors piled into commodities through the summer of 2008, thinking they would move ever higher—and then they had the rug pulled out from them in August and September. But we don’t need the government to impose penalties on such faulty speculation (which pushed prices the wrong way), because these investors lost their shirts! The market itself provides the appropriate reward and punishment for wise or foolish forecasts.

People often forget that for every speculator who “went long” on oil futures contracts, there was another party who had to go short. Indeed, after the 60 Minutes piece aired, investment manager Kevin Duffy reminded us of his warnings to clients over the summer that oil was overpriced. His hedge fund, Bearing Fund, shorted futures contracts and made money from the accurate call.

Another wrinkle in the typical complaint against speculators is that the statistical evidence shows the causality ran in the opposite direction. According to the CFTC’s analysis of confidential data, it was far more typical for a price change in oil to precede a change in investors’ holdings, rather than vice versa. Yes, big investors were enlarging their clients’ exposure to commodities in 2007 and 2008, but this was often because these sectors were outperforming others. So it wasn’t that a bunch of pension funds rushed into oil, and pushed up its price. Rather, the rising price of oil led to more and more investment in oil futures, by fund managers who were trying to shield their clients from skyrocketing energy prices. The process was mutually reinforcing, but the line between hedging and speculation is blurred. After all, soaring oil prices were hurting stock performance. By diversifying holdings to include commodities, fund managers were trying to limit the volatility in their clients’ returns.

A final point is that the presence of large, institutional investors provides more liquidity to the futures markets, allowing the traditional hedgers (such as producers and airlines) to use these contracts more flexibly. New regulations that restricted the ability of “speculators” to enter these markets would ironically hurt even the non-speculators because of higher bid-ask spreads.


Was It Speculators, or Supply and Demand?

A recurring theme in the 60 Minutes segment was that the price swings in oil weren’t due to the fundamentals of supply and demand, and so they must have been the fault of the insidious speculators [...].

The true situation is far more nuanced. Part of what happened on Sept. 22 was that the dollar fell sharply against other currencies; recall that these weeks involved the bailout of AIG and the collapse of Lehman Brothers. Because oil is traded internationally but quoted in U.S. dollars, a fall in the dollar translates into a higher quoted price for oil, which is perfectly consistent with “fundamentals.”

Moreover, Sept. 22 was the last trading day before the expiration of the October futures contracts. There were investors who had shorted oil—they were pushing down its price, betting that it would fall further—and they needed to unwind their positions, because they didn’t actually have physical barrels to deliver to the holders of the contracts. According to oil economist James Williams, the Nymex contracts had a delivery point of Cushing, Oklahoma, but the inventories in Cushing were low because of the hurricane drawdown. The situation led to a “short squeeze” where short-sellers were trying to buy back their positions and were scrambling for the unusually tight supplies. Thus the 60 Minutes piece is right that speculation was involved that day, but it’s the opposite of their interpretation: The people pushing down oil prices hit a temporary snag, caused by a physical bottleneck, and so the price popped back up briefly.

Masters’ analysis of the EIA data is also misleading. It is true that world oil supply had been steadily increasing every quarter since the beginning of 2007, while world oil demand finally peaked in the fourth quarter of 2007 and then began falling in 2008. But what Masters neglects to mention is that world oil demand was always higher than supply, up until April 2008, as the EIA data (XLS spreadsheet) show.

The market price of oil during this period did exactly what consumers would want. Starting in 2006, the world began consuming more barrels of oil per day than producers could deliver to market. The deficit was covered by drawing down on previously accumulated stockpiles. In this environment of a supply crunch, the market price needed to rise rapidly in order to call forth greater supply and curtail demand.

Even as late as the first quarter of 2008, on average there was more than a million barrel a day deficit, where world oil demand exceeded supply. Of course the “fundamentals” would drive higher prices in this environment. And then, after years of rising oil prices in this deficit environment, the situation finally reversed in April 2008. From that point on, world oil output had finally caught up with and overtaken demand. A few months later, the price of oil crashed back down. The presence of large investors definitely influenced the movement of prices, but ultimately the explanation based on supply and demand is accurate.

Even the sudden collapse of oil prices may be partially or completely attributable to “real” forces in the economy. The economic outlook changed considerably in the late summer of 2008, meaning that oil consumption will not grow nearly as quickly over the next few years as forecasters previously believed. The dollar has also strengthened tremendously because of the “flight to safety” by investors around the world. The rising dollar translates into lower oil prices, quoted in U.S. dollars.


Conclusion

Institutional investors rushed into the commodities futures markets as oil prices steadily rose from the fall of 2007 through the summer of 2008. This correlation led many analysts to conclude that the hedge funds were causing the prices to rise. But a more careful analysis shows that the situation was more nuanced, with price rises (fueled by legitimate, fundamental supply and demand) leading rational investors to diversify their holdings by gaining exposure to the energy sector.

In any event, it is wrong to assume that giving government bureaucrats more power will somehow make financial markets more transparent or efficient. Masters and the folks at 60 Minutes should read up on how the SEC ignored letters about Bernie Madoff’s Ponzi scheme that a suspicious analyst in the private sector began sending them back in 1999. In the private sector, speculators who make bad forecasts lose money, big time. In contrast, the SEC will probably see its budget increased even though it ignored a reputed $50 billion swindle for 9 years.

Many investors overshot the rise in oil prices, and the market punished them accordingly. But record oil prices really were driven by the fundamentals of supply and demand. Futures markets, and large institutional investors who use them, provide a valuable service to consumers by actually reducing volatility in the long run. It’s too bad that 60 Minutes seems to have overshot in their finger-pointing, but there won’t be any market correction for them.

U.S. Conventional Weapons Destruction Program in Afghanistan

U.S. Conventional Weapons Destruction Program in Afghanistan. Fact Sheet, Bureau of Political-Military Affairs
US State Dept, Washington, DC, Jan xx, 2009

The U.S. conventional weapons destruction program in Afghanistan aims to protect victims of conflict, provide life-saving humanitarian assistance and help provide security and safety for the Afghan people. Since 1993, the Department of State has provided more than $95,000,000 in conventional weapons destruction and humanitarian mine action assistance to Afghanistan. Direct funding to five Afghan non-governmental organizations has sustained clearance operations, developed host nation management and technical capacity and provided vocational training when a reduction in mine clearance activities increased the number of unemployed deminers.


The Conventional Weapons Problem

The widespread and indiscriminate use of mines, small arms/light weapons, ordnance and munitions since the Soviet invasion of 1979 has left Afghanistan heavily contaminated with explosive remnants of war (ERW). The United Nations Mine Action Program for Afghanistan (MAPA) estimates that 720 square kilometers of suspected hazardous areas exist, with more than 4 million Afghans living in 2,229 ERW-contaminated communities. Mines and ERW killed or injured more than 445 Afghans in 2008, an average of 37 victims per month. Additional conventional weapons and munitions hazards are reported daily. Although MAPA has cleared almost two-thirds of all suspected hazards discovered to date, vast amounts of areas remain contaminated due to on-going conflict and inaccessibility because of difficult terrain and deteriorating infrastructure.

The majority of ERW-contaminated areas are agricultural fields, irrigation canals, and grazing areas as well as roads and residential and commercial areas. Security belts of landmines also exist around major cities, airports, government installations, and power stations. An equally significant problem is the existence of large amounts of unexploded ordnance, which inflicted extensive injuries and destruction even prior to the on-going conflict. Still, mines and ERW and loosely secured or illicit conventional weapons and munitions persistently restrict access to valuable resources and important infrastructure, effectively making social and economic reconstruction in Afghanistan extremely difficult.


United States Assistance

In FY 2008, the Bureau of Political-Military Affairs’ Office of Weapons Removal and Abatement (PM/WRA) in the Department of State provided $18,000,000 for the Conventional Weapons Destruction Program in Afghanistan. These funds enabled Afghan non-governmental organizations, international non-governmental organizations, international organizations, and private and public sector partners to clear ERW-contaminated areas as well as to destroy or secure abandoned or otherwise at-risk munitions and explosive ordnance that might be used by insurgent elements to construct roadside bombs and other improvised explosive devices that target coalition forces, Afghan civilians, and international aid organizations. Slight increases in programmatic funding for FY 2009 will be used to increase national capacity development and conventional weapons destruction activities throughout Afghanistan.


Accomplishments

Since January, 2006, PM/WRA-funded projects have destroyed or secured more than 9,000 metric tons of unexploded, abandoned, or otherwise at- risk munitions and small arms/light weapons, and provided explosive ordnance safety training to more than 65,000 Afghan nationals. This assistance removes explosive hazards that threaten civilian populations, and enables critical reconstruction and development projects central to economic growth, stability, and security. Department of State funds also play a vital role in the capacity development of MAPA, which consists of 20 Afghan implementing partners and international non-governmental organizations, and the UN’s Mine Action Center in Afghanistan, the coordinating body for MAPA management and operations.

To learn more about the Office of Weapons Removal and Abatement's humanitarian mine action and conventional weapons destruction programs, visit www.state.gov/t/pm/

Good and Bad Things At ILO

Can the ILO Be Saved from Itself?, by Charlotte M. Ponticelli
Heritage, January 22, 2009
Heritage Lecture #1106

Excerpts:

[...]

One of my major responsibilities has been representing the Department of Labor--and, indeed, the United States government--in international organizations that deal with labor and employment issues. And, of course, the major international organization I have worked with is the International Labor Organization.

My bureau works closely with the ILO on a number of projects.

• We oversee labor programs funded by the State Department and implemented by the ILO in the Middle East and Latin America.
• We oversee numerous projects that are implemented by the ILO's International Program for the Elimination of Child Labor (IPEC). Over the past decade, the U.S. has funded nearly $370 million worth of programs in over 75 countries. As a result of these programs, we have rescued more than a million children from exploitive child labor.

On a regular, ongoing basis, we also represent the United States government at the ILO's annual conference and at its Governing Body meetings. We do this along with the AFL-CIO, which represents American workers, and the U.S. Council for International Business, which represents U.S. employers. Both of these partners, I should add, have been helpful and dedicated to making the ILO a strong and effective voice for democracy and rights.

I think this is an opportune time, with the current economic challenges, to talk about the ILO itself: to give you my perspective on what it does well, what concerns the U.S. government has had, and what we at my Bureau see as the road ahead.


The Mission of the ILO

[...]

The International Labor Organization was created in 1919, in the wake of World War I, with the purpose of creating an international institution that could bring governments, employers, and workers together to improve living and working conditions and help preserve social stability in the new post- World War I order. As the sole remaining component of the League of Nations, and as a member of the present-day U.N. system, the ILO has been a strong voice for worker rights, for helping to build democracy in Poland and South Africa, and build­ing strong, open-market systems in Eastern Europe after the collapse of the Soviet Union.

The ILO continues to be a beacon in promoting freedom in some critical places across the globe. For example:

• In Burma, the ILO is the sole U.N. agency that plays a useful role on the ground. It has been directly responsible for enabling victims of forced labor to report on their treatment without fear of reprisal. The ILO's special adviser in Burma has helped people get out of jail, has helped rescue child soldiers, and has actually engaged the military in dialogue on forced labor.
• In Belarus, the ILO's Governing Body has been in perfect sync with the Bush Administration's goal of pushing for democracy, both by condemning Belarus for its lack of freedom of association and by at the same time offering to work with the government to move forward.
• In Zimbabwe, thanks to the workers and employers--and with no thanks to countries like South Africa or China--the ILO has been in the forefront of criticizing the atrocities of the Mugabe regime. In the labor area, this includes the systematic arrest, detention, and harassment of trade unionists. At its last session, the Governing Body decided to send to Zimbabwe a Commission of Inquiry, one of the highest-level investigatory missions available.
• In regard to Iran, the ILO has regularly condemned the Iranian government for arresting and imprisoning independent trade union leaders and for its record on discrimination in the workplace.
• And in Colombia, the ILO--largely at the behest of the United States--has established an office on the ground to help address key labor issues, including violence against trade union officials. The Colombian government, the busi­ness community, and the labor unions themselves supported the establishment of the office.

In addition to the tremendous work on child labor, forced labor, and trafficking, the ILO also supports U.S. efforts to bring about democratic reform in the Middle East, assisting the Department of Labor with State/Middle East Partnership Initiative-funded projects in Bahrain, Oman, Morocco, and Egypt, and work mandated by Congress that supports the CAFTA-DR[1] trade agreement. And in collaboration with the ILO, we've recently launched new projects in Tanzania and Haiti.


The Other Side of the Story

There's also another side to this story. Go to the ILO Web site or look at the Director-General's speeches over the past few years. You won't find very many references to all of the good work I've just described. What you will find are articles and speeches that deal with the ILO's role in:

• Climate change and energy policy,
• Reforming the international monetary system,
• Changing the rules of the international trade system,
• Addressing international investment issues,
• Addressing the global food crisis,
• Mandating social policy for individual countries, and
• Suggesting that the ILO take the lead in addressing global social policy in the current economic crisis.

Here's an example: Speaking at the Vatican on Human Rights Day in December, ILO Director-Gen­eral Juan Somavia said, "We have a multilateral sys­tem that is underperforming. It is not delivering the type of policy coherence we need today. There is a profound need...for a new form of global gover­nance...a global community of multiple actors including, but going beyond governments."[2]

Here's another example: In November, the officers of the Governing Body issued a statement calling for six steps to be taken to address the financial crisis. I won't enumerate them, but among them were:

• Ensuring the flow of credit to consumption, trade, and investment;
• Supporting productive, profitable, and sustain­able enterprises, together with a strong social economy and a viable public sector, so as to maximize employment and decent work;
• Maintaining development aid as a minimum at current levels and providing additional credit lines and support to enable low-income coun­tries to cushion the crisis.

I would note that in the discussion of the crisis at that Governing Body in Geneva, only one party not­ed the importance of the ILO working to ensure that basic workers' rights would not be lost in the shuf­fle: It wasn't the workers' group or the European Union--it was the United States.
In short, the key problem is that the ILO is seek­ing to become the world's lead institution in addressing the social consequences of globalization. This is not a conspiracy theory; rather, it's a point made regularly by the Director-General. The world of work, a challenging field unto itself, suddenly loses importance and instead becomes a platform for launching all sorts of social projects.

That's why we have been very concerned about a new instrument that was adopted by the organiza­tion's conference just this past June, called the ILO Declaration on Social Justice for a Fair Globaliza­tion.[3] The title alone suggests exactly what is wrong with the ILO at this time. What is worrisome is that it opens the door to efforts to attribute universal applicability to conventions that heretofore would be relevant only if a country formally ratified them. That means, for example, that select conventions on employment and social protection could conceiv­ably take on the status of agreed international prin­ciples without our consent.

Now we, of course, would not honor this. Suffice it to say, it would be appalling, both morally and in terms of economic efficiency, if an international organization were to determine the "right" balance between employment and social protection.


Management

How well are these resources managed? In short, not well. The ILO fails to ensure adequate impact analysis of its programs. We receive reports from them on what they did and how they managed pro­grams, but we can't get answers to questions like, "What do we get for the $10 million spent on Project X?"

When our Secretary of Labor raised this with the Director-General, he replied, "You have to realize that it's sometimes very difficult for the ILO to mea­sure the impact of what we do. After all, we don't sell shoes. We hold seminars. We give advice. And how do you measure the impact of advice?"

Perhaps there is something to be said for that question, but for an organization that spends almost one-half billion dollars per year, that's not enough.


Tripartism

The ILO is the only tripartite organization in the U.N. system--that is, the only organization in which each country is represented three ways: by representatives of the government, employers, and workers. In my view, this tripartite nature is both the strength and the weakness of the organization. The good part is that it includes the private sector and civil society. But there are two difficult issues.

• First, the ILO is disproportionately run by workers--and, to be exact, by trade unions. Workers see the ILO as their organization, but if its outputs are going to be useful, governments and employers have to see it as their organiza­tion too. This drove the International Organiza­tion of Employers earlier this year to stand up and demand that the ILO ensure "that employer priorities, objectives and resources are treated on an equal basis with those of the workers." This might not be easy: Just a year ago, during a discussion on "sustainable enterprise," the rep­resentatives of workers objected to any inclu­sion of the word "entrepreneur."
• Second, governments are being marginalized. If workers and employers agree on an issue, the views of the governments--the funders of the Organization--become irrelevant because the worker-plus-employer majority is declared to be "consensus." Something must be done to address this issue.

At some point, the ILO's tripartite structure must be evaluated. Is it right that the 10 percent of work­ers in this country who are unionized should be allowed to speak for the entire American workforce? The same holds true for many other countries.

There are many times when the interests of orga­nized labor and the interests of other employees may differ significantly. Perhaps thought should be given to including other worker groups--maybe professional associations or entrepreneurs or non-governmental organizations--to better represent the real workforce. I don't have an easy answer to this, but it's something we will surely have to deal with in the future.


What Should the ILO Be Doing?

What should the ILO be doing? Here's what I would suggest. It may not be glamorous, but we think the ILO could--and should--focus its activi­ties on helping countries improve their capabilities in these areas:

• Labor Law and Implementation. [...]
• Building Capacity. [...]
• Child Labor, Forced Labor, and Trafficking. [...]
• Fewer International Meetings, More Work in the Field. [...]
• Corporate Social Responsibility. [...]

Conclusion

As we look at the problems and the potential of the ILO, it's worth asking the question, "If the ILO disappeared tomorrow, would we need to replace it?" Or, as I said in the blurb for this meeting, "Can the ILO be saved from itself?"

The short answer is yes; the ILO could be a very useful tool in addressing many of the issues the world faces in the era of globalization. Both the United States worker and employer representatives agree on this.

Unfortunately, the ILO is veering further from, rather than closer to, being in a useful position. I hope that the new Administration, which has given much attention to labor issues, will use its influence to push the ILO to do its real job: to create better opportunities and better workplaces for working people, to promote job creation, to help provide businesses with the skilled workers they need, and to help boost economic development and prosperi­ty around the world.

Charlotte M. Ponticelli, at the time of this lecture, served as Deputy Under Secretary for International Affairs at the U.S. Department of Labor. She has also served in the U.S. Department of State as Senior Coordi­nator for International Women's Issues and Senior Advisor to the Assistant Secretary for Population, Refugees and Migration, and on the U.S. Commission on Civil Rights.


Full article w/references here

Poorly Defined Questions Lead to Meaningless Poll Results

Poorly Defined Questions Lead to Meaningless Poll Results, by Indur Goklany
Master Resource, January 23, 2009

The American Geophysical Union’s house organ, Eos, has an article entitled “Examining the Scientific Consensus on Climate Change,” written by Peter Doran and Kendall Zimmerman of the University of Illinois at Chicago. (h/t Roger Pielke, Sr.)

The paper explains that the two “primary questions” asked were:

1. When compared with pre-1800s levels, do you think that mean global temperatures have generally risen, fallen, or remained relatively constant?
2. Do you think human activity is a significant contributing factor in changing mean global temperatures?

The article reports that over 90 percent of the responders agreed with the statement that mean global temperatures have “risen” relative to the pre-1800 levels (Question 1). But this is unremarkable. Everyone knows that in the 1700s and early 1800s the world was in the grip of the Little Ice Age, so a recovery toward normalcy alone would lead to global warming. No one I know — and I know plenty of skeptics (not yet a criminal offense, I hope) — has ever disputed this point. So the real surprise to me is that it wasn’t 99 percent–plus!

With respect to the second question, the authors report that 82 percent agreed that “human activity is a significant contributing factor” in the increased global temperature.

But what precisely does this mean? How did respondents interpret the terms “human activity” and “significant contributing factor”?

I am reminded that under the Clean Air Act, an area that has relatively clean air is deemed to be “significantly deteriorated” if the concentration of an air pollutant in that area increases by 2–8% of the National Ambient Air Quality Standard. Under this interpretation, a contribution of 2–8% would be significant! So the question is: What instructions or guidance, if any, was provided to respondents in interpreting what precisely was meant by “significant contributing factor” in the second question? Is a 2% contribution significant? Why not 20%, or 40%, or 60%?

In addition, what exactly is the “human activity” that is supposed to be significantly contributing to global warming? Is it land clearance, paving over surfaces, producing black-carbon emissions, generating well-mixed greenhouse gases, or a combination of all these activities? I claim that most people would interpret “human activity” to encompass “all of the above.”

Moreover, how do the researchers know that there is a uniform understanding of the question, and what precisely is that uniform understanding?

Given that the two key terms are imprecisely defined, a person who believed that well-mixed greenhouse gases have contributed no more than, say, 10% to the global warming since 1800 might be compelled to agree that “human activity is a significant contributing factor” to post-1800 global warming.

From the perspective of policy makers, to whom this article is partly addressed, identifying the precise kind of human activity that contributes significantly to global warming (however defined) is absolutely critical. If well-mixed greenhouse gases (GHGs), for example, carbon dioxide, do not contribute significantly, then no amount of GHG reductions will make a significant difference (however defined) to the degree of future warming. Thus, the imprecise wording of Question 2 precludes this poll from closing the debate among policy makers.

The fact that the article doesn’t raise, let alone address, the issues posed by its inexact question indicates that the Eos article is premature, if not erroneous, in its claim that “the debate on the authenticity of global warming and the role played by human activity is largely nonexistent among those who understand the nuances and scientific basis of long-term climate processes.” It also reflects poorly on the pollsters and Eos reviewers — assuming it was reviewed — that they missed such obvious difficulties with the study.

The article also claims that ‘[t]he challenge, rather, appears to be how to effectively communicate this fact to policy makers and to a public that continues to mistakenly perceive debate among scientists.”

But the real challenge is: How can pollsters accurately communicate their questions to potential respondents so that there is a common and precise understanding on everyone’s part regarding the question posed. Without this, one is condemned to obtain meaningless poll results. And the rest of the world is subjected to reading (and reading about) one more poorly designed study.

Brazil Expands Investment in Offshore Drilling Projects

Brazil Expands Investment in Offshore Drilling Projects, by Andrew Downie
TNYT, January 24, 2009

SÃO PAULO, Brazil — Brazil’s state-controlled oil company, Petrobras, announced a crisis-busting investment plan Friday to spend more than $174 billion over the next five years, much of it for prodigious deep-water oil and gas exploration.

The investment covers the 2009-2013 period and represents a rise of 55 percent over the $112.4 billion the company had vowed to spend on development between 2008 and 2012.

This investment is “very robust and very important for the continuity of Petrobras’s growth,” José Sergio Gabrielli, the company’s chief executive, told reporters Friday at a news conference in Rio de Janeiro.

Petrobras, whose full name is Petróleo Brasileiro, had promised to unveil its spending plans in September but delayed the announcement several times because of the world’s financial turmoil.

In 2007 and 2008, Petrobras and partners including Repsol YPF of Spain and the BG Group of Britain discovered vast deposits of oil under more than 4,000 meters of water, rock and salt.

Although the finds are at previously untapped depths and will be costly to extract, they hold an estimated 8 billion to 12 billion barrels of oil, according to Petrobras figures. Company officials and oil experts say that other reserves of that size could be nearby.

One of the finds alone, named the Tupi, holds the equivalent of 5 billion to 8 billion barrels of light crude oil and is the world’s biggest new field since a 12-billion-barrel find in Kazakhstan in 2000.

President Luiz Inácio Lula da Silva of Brazil has said repeatedly that developing these oil reserves is vital to the country’s future, and Petrobras has set aside $28 billion to that end.

In all, new drilling could produce 219,000 barrels a day by 2013, 582,000 barrels a day by 2015 and 1.82 million barrels a day by 2020, he predicted.

Natural gas extraction would rise from 7 million cubic meters a day in 2013 to 40 million a day in 2020, the company added.

Petrobras produced a daily average of 2.18 million barrels of oil and gas last year.

Libertarian views on global warming: "Glacier Slowdown in Greenland: How Inconvenient"

Glacier Slowdown in Greenland: How Inconvenient

In this week’s Science magazine, science writer Richard Kerr reports on some of the goings-on at this past December’s annual meeting of the American Geophysical Union.

While he didn’t cover our presentation at the meeting in which we described our efforts at creating a reconstruction of ice melt across Greenland dating back into the late 1700s (we found that the greatest period of ice melt occurred in the decades around the 1930s), Kerr did cover some other recent findings concerning the workings of Greenland’s cryosphere in his article titled “Galloping Glaciers of Greenland Have Reined Themselves In.”

Here is how Kerr starts things off:

Things were looking bad around southeast Greenland a few years ago. There, the streams of ice flowing from the great ice sheet into the sea had begun speeding up in the late 1990s. Then, two of the biggest Greenland outlet glaciers really took off, and losses from the ice to the sea eventually doubled. Some climatologists speculated that global warming might have pushed Greenland past a tipping point into a scary new regime of wildly heightened ice loss and an ever-faster rise in sea level.

And some non-climatologists speculated disaster from rapidly rising seas as well.

During his An Inconvenient Truth tour, Gore was fond of spinning the following tale:

[E]arlier this year [2006], yet another team of scientists reported that the previous twelve months saw 32 glacial earthquakes on Greenland between 4.6 and 5.1 on the Richter scale - a disturbing sign that a massive destabilization may now be underway deep within the second largest accumulation of ice on the planet, enough ice to raise sea level 20 feet worldwide if it broke up and slipped into the sea. Each passing day brings yet more evidence that we are now facing a planetary emergency - a climate crisis that demands immediate action to sharply reduce carbon dioxide emissions worldwide in order to turn down the earth’s thermostat and avert catastrophe.

Oh how things have changed in the past 2 years.

For one, the “team of scientists” that reported on the Greenland earthquakes now think that the earthquakes were the result of processes involved with glacial calving, rather than something “underway deep within the second largest accumulation of ice on the planet” (Nettles et al., 2008).

For another, Gore’s “massive destabilization” mechanism for which the earthquakes were a supposed bellwether (meltwater lubrication of the flow channel) has been shown to be ineffective at producing long-term changes in glacier flow rate (e.g. (Joughin et al., 2008; van de Wal et al., 2008).

And for still another, the recent speed-up of Greenland’s glaciers has even more recently slowed down.

Here is how Kerr describes the situation:

So much for Greenland ice’s Armageddon. “It has come to an end,” glaciologist Tavi Murray of Swansea University in the United Kingdom said during a session at the meeting. “There seems to have been a synchronous switch-off” of the speed-up, she said. Nearly everywhere around southeast Greenland, outlet glacier flows have returned to the levels of 2000. An increasingly warmer climate will no doubt eat away at the Greenland ice sheet for centuries, glaciologists say, but no one should be extrapolating the ice’s recent wild behavior into the future.

The last point is driven home by new results published last week (and described in our last WCR and in our piece over at MasterResource) by researchers Faezeh Nick and colleagues. They modeled the flow of one of Greenland’s largest glaciers and determined that while glaciers were quite sensitive to changing conditions at their calving terminus, that they responded rather quickly to them and the increase in flow rate was rather short lived. Nick et al. included these words of warning: “Our results imply that the recent rates of mass loss in Greenland’s outlet glaciers are transient and should not be extrapolated into the future.”

All told, it is looking more like the IPCC’s estimates of a few inches of sea level rise from Greenland during the 21st century aren’t going to be that far off—despite loud protestations to the contrary from high profile alarm pullers.

Maybe Gore will go back and remove the 12 pages worth of picture and maps from his book showing what high profile places of the world will look like with a 20-foot sea level rise (“The site of the World Trade Center Memorial would be underwater”). But then again, probably not—after all the point is not to be truthful in the sense of reflecting a likely possibility, but to scare you into a particular course of action.


References:

Intergovernmental Panel on Climate Change, 2007. Climate Change 2007: The Physical Science Basis. Solomon, S., et al. (eds.), Cambridge University Press, Cambridge, U.K., 996pp.
Joughin, I., et al., 2008. Seasonal speedup along the western flank of the Greenland Ice Sheet. Science, 320, 781-783.

Kerr, R. A., 2009. Galloping glaciers of Greenland have reined themselves in. Science, 323, 458.
Nettles, M., 2008. Step-wise changes in glacier flow speed coincide with calving and glacial earthquakes at Helheim Glacier, Greenland. Geophysical Research Letters, 35, doi:10.1029/2008GL036127.

Nick, F. M., et al., 2009. Large-scale changes in Greenland outlet glacier dynamics triggered at the terminus. Nature Geoscience, DOI:10.1038, published on-line January 11, 2009.
van de Wal, R. S. W., et al., 2008. Large and rapid melt-induced velocity changes in the ablation zone of the Greenland ice sheet. Science, 321, 111-113.