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The Car Revolution

France and the United Kingdom recently announced that they will ban the sales of gasoline and diesel-engined cars from 2040. The lower house of the Dutch parliament has passed a law banning such sales from 2025. India says it will institute a similar ban by 2030.

China, the world’s largest producer of cars – 28 million vehicles last year, more than the United States, Japan and Germany combined – is also planning to declare a ban soon, but is still working on the cut-off date. And in November the European Commission is going to debate a minimum annual quota of electric vehicles (EVs) for all European car producers.

So if you were looking for a safe place for a long-term investment, would you choose the oil industry?

Just over half of the 98 million barrels of oil produced in the world each day goes directly to making gasoline, used almost exclusively in motor vehicles. Another 15 percent goes to make “distillate fuel oil”, of which at least half is diesel fuel. So around 58 percent of total world oil production is being used in vehicles now. There may be almost none in 35 years’ time.

That is certainly the intention of many governments. Britain, for example, is planning to allow only zero-emission vehicles on the road (apart form a few specially-licensed vintage cars) by 2050, only ten years after the ban on selling new cars with internal combustion engines comes into affect.

So the production of gasoline- or diesel-engined cars will already have collapsed by the late 2030s. In practice, if these deadlines are observed, the cars on sale will be almost entirely EVs by the mid-2030s. And what’s left of the oil industry will have a very different shape.

Countries that export most of their oil, like Russia and Saudi Arabia, will find their incomes crashing for two reasons: sheer lack of demand, and very low prices ($40 per barrel or less) due to the huge glut of productive capacity. There may also be follow-on political consequences.

Countries with some oil production of their own, like the United States and China, may simply stop importing oil entirely. (The United States will remain in the last ditch federally so long as Donald Trump is president – he’s even trying to revive the coal industry – but eight states have already signed an agreement to have 3.5 million zero-emissions vehicles on the road by 2025.)

All this is good news for the environment, and also for the health of people who live in large cities. (No wonder China is the leading EV producer in the world, with 40 percent of global production. Pollution is already making most of its cities almost uninhabitable.) But the revolution doesn’t end here: most, and eventually all of these EVs will be self-driving vehicles.

Driverless vehicles will end up being ownerless vehicles. They will become public utilities, summoned when they are required for the specific trip you have in mind at the moment. Urban car clubs and peer-to-peer rentals are one precurser of this phenomenon, Uber and Lyft in their different ways are another.

Privately owned cars are parked an average of 95 percent of the time. This figure varies little from one city or country to another, and illustrates why private car ownership will become a dispensable luxury. The difficulty in the past was gaining immediate access to a car for as long as you needed it at a reasonable cost, but the combination of the smart phone and the self-driving vehicle will solve that problem.

That, rather than a cheaper taxi service, is the real goal of Uber’s business model, but once reliable self-driving cars are widely available Uber will find itself deluged with competition. Private ownership will decline steeply, and the total number of cars on the road worldwide will eventually crash to perhaps one-quarter of the current number. After all, there are hardly ever more than a quarter of privately-owned cars on the road at the same time.

Buses and conventional taxis will virtually disappear, taking millions of driving jobs with them. (There are a million taxi, Uber and bus drivers in the United States alone.) Long-distance truckers and van drivers (another 3.5 million in the US) will also find work increasingly scarce: Daimler, Volvo, Uber and Baidu are already road-testing the first self-driving 18-wheelers.

Oh, and one more thing. About a quarter of the average central city in North America (less in Europe and Asia) is devoted to surface parking lots and multi-storey garages. They are part of the 95-percent-parked problem. The car doesn’t just take you downtown; it has to stay there the whole time you do, so it must find somewhere to park.

Once people realise that most of this land is now available for redevelopment, it will get a lot easier and cheaper to live downtown: less commuting, more community. Roll on the car revolution!
To shorten to 725 words, omit paragraphs 7 and 8. (“Countries…2025″)

Cui Bono?

Donald Trump has spent a lot of time in the courts, so he must be familiar with the legal concept of “cui bono” – “who benefits?” When a crime is committed, the likeliest culprit is the person who benefited from the deed. But he certainly did not apply that principle when deciding to attack a Syrian government airbase with 59 cruise missiles early Friday morning.

The attack against Shayrat airbase, the first US military action against Bashar al-Assad’s regime in six years of civil war, was allegedly a retaliation for a poison gas attack on the rebel-held town of Khan Sheikhoun three days before that President Trump blamed on the Syrian regime. But who stood to benefit from the chemical attack in the first place?

There was absolutely no direct military advantage to be derived from killing 80 civilians with poison gas in Khan Sheikhoun. The town, located in al-Qaeda-controlled territory in Idlib province, is not near any front line and is of no military significance. The one useful thing that the gas attack might produce, with an impulsive new president in the White House, was an American attack on the Syrian regime.

Who would benefit from that? Well, the rebels obviously would. They have been on the ropes since the Assad regime reconquered Aleppo in December, and if the warming relationship between Washington and Moscow resulted in an imposed peace settlement in Syria they would lose everything. (Only a few days ago US Secretary of State Rex Tillerson said that removing Assad from power was no longer Washington’s priority.)

Al-Qaeda – and probably several other rebel groups – have access to chemical weapons. The country was awash with them before the war, because the ability to make a mass chemical-weapons attack on Israel was Syria’s only deterrent against an Israeli nuclear attack. (Assad, and his father before him, understood clearly that Syria would never be allowed to have nuclear weapons of its own.)

Chemical weapons were stored in military facilities all over Syria, and at one point half the country was under rebel control. So of course the rebels have had some for years, and are known to have used them on occasion in their own internecine wars. Would al-Qaeda have hesitated to use them on innocent civilians order to trigger an American attack on the Syrian regime? Of course not.

The results have already been spectacular. The developing Russian-American alliance in Syria is broken, the prospect of an imposed peace that sidelines the rebels – indeed, of any peace at all – has retreated below the horizon, and Rex Tillerson has just declared that “steps are underway” to form an international coalition to force Bashar al-Assad from power. Not a bad return on a small investment.

But we should also consider the possibility that Bashar al-Assad actually did order the attack. Why would it do that? For exactly the same reason: to trigger an American attack on the Syrian regime. From a policy perspective, that could make perfectly good sense.

The American attack didn’t really hurt much, after all, and it has already smashed a developing Russian-American relationship in Syria that could have ended up imposing unwelcome conditions on Assad. Indeed, Moscow and Washington might ultimately have decided that ejecting Assad (though not the entire regime) from power was an essential part of the peace settlement.

Assad doesn’t want foreigners deciding his fate, and he doesn’t want a “premature” peace settlement either. He wants the war to go on long enough for him to reconquer and reunite the whole country (with Russian help, of course). So use a little poison gas, and Donald Trump will obligingly over-react. That should end the threat of US-Russian collaboration in Syria.

Either of these possibilities – a false-flag attack by al-Qaeda or a deliberate provocation by the regime itself — is quite plausible. What is not remotely believable is the notion that the stupid and evil Syrian regime just decided that a random poison gas attack on an unimportant town would be a bit of fun.

Villains in DC Comics do bad things simply because they are evil. The players in the Syrian civil war do bad things because they are part of serious (though often evil) strategies. Whoever committed the atrocity at Khan Sheikhoun wanted the United States to attack the Syrian regime, and Donald Trump fell for it.

But if Trump was taken in by the Syrians, he certainly exploited his attack to send a very serious message to China and North Korea. He is a player too, after all, and it can hardly be an accident that he timed the attack for the day of his meeting with China’s President Xi Jinping.

Wheels within wheels. It is going to be a wild ride.
To shorten to 725 words, omit paragraph 5. (“Al-Qaeda…own”)

“Solving” North Korea

Never mind the legalities of the situation. Never mind morality either. Just answer the pragmatic question: Is it ever a good idea to start a nuclear war? Because that’s the notion that Donald Trump is actually playing with.

He didn’t say exactly that, of course. He said that “If China is not going to solve (the nuclear threat from) North Korea, we will. That is all I am telling you.” But in the context of that interview with the Financial Times, it was clear what he meant.

Trump was saying that if China did not use the tools at its disposal (political influence, trade sanctions, withholding financial aid) to make North Korea give up its nuclear weapons and long-range rockets, then the United States would use the tools at its disposal (the world’s most powerful armed forces) to accomplish the same goal.

This does not necessarily mean that the United States would launch a large nuclear attack against North Korea. If you are really serious about carrying out a “disarming strike” that destroys all of North Korea’s nukes, you probably should do exactly that. (You never get a second chance to go first.) But maybe the US Air Force would promise that “precision” non-nuclear weapons could accomplish that goal, and maybe some gullible people would believe it.

It would still turn into a nuclear war in the end, unless American “surgical strikes” miraculously eliminated every last one of North Korea’s nukes at the same time. Kim Jong-un’s regime would find itself in the position known in nuclear strategy as “use them or lose them”, and it is hard to believe that it would not launch whatever it had left.

The targets would be in South Korea, of course, but probably also American bases in Japan. Maybe even Japanese cities, if North Korea had enough weapons left. The regime would know it was going under – the United States would not take this huge risk and then leave it in power – so it would take as many of its enemies as possible down with it.

North America would probably not be hit, because Western intelligence services do not believe that Pyongyang has ballistic missiles that can reach that far yet. (But “intelligence” is not the same as knowing for sure, and they could be wrong.) At worst, the victims would be one or two cities in the Pacific north-west of the United States.

This would be a very bad outcome for people living in Seattle or Portland, but it would not actually be a “nuclear holocaust”. The kind of war that the super-powers would have fought at the height of the Cold War, with thousands of nuclear weapons used by each side, would have killed hundreds of millions, and might even have triggered a “nuclear winter”.

A nuclear war over Korea would be a much smaller catastrophe, perhaps involving a few million deaths – unless China got drawn in. Unfortunately, that is not inconceivable, because China, much as it dislikes and mistrusts the North Korean regime, is determined not to see it destroyed.

Many people are uncomfortable with this kind of analysis, especially when it draws comparisons between “bad” and “less bad” nuclear wars. Herman Kahn, the dean of nuclear strategists in the 1960s and 70s, was frequently the target of this kind of criticism: how could he talk about potential mass death in such a cold-blooded way?

His response was always the same: “Would you prefer a nice, warm mistake?” “Thinking About the Unthinkable”, as he put it in one of his books, is absolutely necessary if the Unthinkable is not happen. In this case, that means taking the possibility that China might be drawn into the conflict seriously.

The destruction of the North Korean regime would bring American military power right to China’s own border. You might reasonably ask: So what? This is the 21st century, and what matters strategically is the big, lethal long-range weapons (like nukes), not the whereabouts of a few American infantry battalions. Quite right in theory. Not necessarily right in practice.

During the Korean War, when American troops were operating very close to the Chinese frontier in late 1950, the Chinese regime sent troops in to save the North Korean regime – and succeeded. The scenario this time, with nuclear weapons already being used on both sides of the North Korea-South Korea frontier, would be different, but it could be even more dangerous. China has lots of nuclear weapons, and delivery vehicles too.

Donald Trump is the fourth American president to be faced with the challenge of North Korean nuclear weapons, and none of them has found a safe and effective way of dealing with it. But all the others avoided making open threats of violence, because that would probably just make matters worse.

Of course, Trump may just be bluffing. In fact, he almost certainly is. But if your bluff is called, you have to go through with your threat or accept being humiliated. The Donald doesn’t do humiliation.
To shrten to 725 words, omit paragraphs10 and 11. (“Many…seriously”)

Coal is Dead

“My administration is putting an end to the war on coal,” said Donald Trump, surrounded by the usual gaggle of officials and (in this case) coal-miners, as he put his super-size signature on the Energy Independence Executive Order. But coal is dying as a major energy source in the United States for reasons far beyond the reach of executive orders.

“The miners are coming back,” Trump boasted at a rally in Kentucky last week, but no less an authority than Robert Murray, founder and CEO of Murray Energy, the biggest US coal company, promptly rained on his parade. “I suggested that (Trump) temper his expectations,” he said. “He can’t bring them back.”

Trump’s latest executive order is not just about coal, of course. It’s a frontal assault on all the Obama-era regulations that aimed at curbing climate change. But while it will slow the decline in US greenhouse gas emissions, it will not have a major impact on global emissions.

That is partly because US accounts for only 16 percent of global emissions. Compared to China’s 29 percent, it doesn’t matter all that much, and China remains committed to big cuts.

In January China scrapped plans for 104 new coal-fired power plants, and it intends to invest $361 billion (equal to half the US defence budget) in renewable energy between now and 2020. The Chinese government is spending that kind of money because it is rightly terrified about what global warming will do to China’s economy and above all to its food supply.

Like the Indians, the Europeans, and pretty much everybody else, the Chinese remain committed to the climate goals agreed at Paris in December 2015 even though the United States has defected. Their own futures depend on meeting those goals – and they know that the American defection does not destroy all hope of success. Globally speaking, it’s not that big a deal.

It would seem like a much bigger deal, however, if they were not confident that American greenhouse gas emissions will continue to decline under Trump, though not as fast as they would under a less ignorant and less compromised administration. Coal provides an excellent example of why.

In 2009, when Barack Obama entered the White House, coal provided 52 percent of US electricity. In only eight years it has fallen to 33 percent, and the decline has little to do with Obama’s Clean Power Plan. First cheap gas from fracking undercut the coal price, and then even solar power got cheaper than coal – so 411 coal-fired plants closed down, and more than fifty coal-mining companies went bankrupt.

Half the 765 remaining big coal-fired plants in the United States were built before 1972. Since the average age when American coal-fired plants are scrapped is 58 years, half of them will soon be gone no matter what Trump does, and even he cannot make it economically attractive to build new ones. (Only 9 percent of American coal-fired plants were built in the past quarter-century.)

Coal is by far the most polluting of the fossil fuels, producing twice as much carbon dioxide as gas does for the same amount of energy, but that alone wasn’t enough to turn the energy industry against it. It’s the cost per per kilowatt-hour of electricity that matters, and coal has simply been overtaken by cheaper forms of energy.

Even in India, the most heavily coal-dependent of the big economies and a country with vast amounts of coal, solar energy prices are now on a par with coal. Sheer inertia means that India will go on expanding coal-fired generation for a few more years, but its National Electricity Plan projects no further increase in coal-based capacity after 2022. King Coal truly is dead.

You don’t need good intentions to do the right thing for climate safety any more; just common sense. From fuel efficiency in automobiles to replacing coal-fired plants with natural gas or solar arrays, saving money goes hand-in-hand with cutting emissions. The economy is not your enemy; it’s your ally. So Trump won’t do nearly as much harm as people feared.

President Obama promised last year to cut US greenhouse gas emissions by about 26 per cent from the 2005 level by 2025. About half of that 26 percent cut would have come in Trump’s first and maybe only term (2017-20), so say 13 percent. The US accounts for 16 percent of global emissions, so do the math: 13 percent of 16 percent equals about 2 percent of global emissions.

That’s what would be at stake over the next four years if Trump’s presidency stopped all the anticipated reductions in greenhouse emissions that Obama based his promise on – but it won’t. A lot of those emission cuts are going to happen anyway, because they just make economic sense. At a guess, around half of them.

So how much damage can Trump do to the global fight against climate change over the next four years? He can keep global emissions about one percent higher than they would have been if the United States had kept its promise to the Paris conference. And that’s all.
To shorten to 725 words, omit paragraphs 10 and 11. (“Coal…dead”)