Tuesday, July 16, 2013

The Pain in Spain

is falling mainly on the heavily subsidized "green energy" program. In my last post, I mentioned that I had flagged the "peak oil" conundrum in the Sustainability course. Furthermore, since Doug and I first heard the initial report, now several years ago, about problems in the Spanish solar/wind power industry, I have also been highlighting that as something to watch. Indeed, there is more news developing on that front. The link itself is from Walter Russell Mead's blog, but I appreciate the tip from Instapundit.

Monday, July 15, 2013

Peak and Peak

I hope some of my former students in the sustainability class have been following the recent news on oil production in the United States. The last time I taught the class I showed, from a couple of years ago, a glimmer that the path of U.S. oil output was turning upwards, in spite of the nominal historical track that seemed to follow the "Peak Oil" theory. Now, with some more years of data available, the trend is clear. According to the June 12th, 2013, Wall Street Journal, "U.S. crude oil production grew by more than one million barrels a day last year, the largest increase in the world and the largest in U.S. history."

 The problem with the "Peak Oil" theory is that it took a perfectly fine, narrow, engineering model of individual oil fields under ceteris paribus conditions and tried to turn it into a sweeping economic model that ignored the price mechanism completely. In fact, one could argue that "Peak Oil" became almost a theology or an ideology rather than it's original intent as a narrow engineering model.

Prices matter. They matter directly and they matter because they spur attempts at technological innovation. And, when technological innovation succeeds, that is itself a shock to the conditions of supply and demand. Ask the folks in places like Texas, Oklahoma, and North Dakota, which are leading the U.S. to become a rival of Middle East countries in terms of oil production.

Saturday, July 13, 2013

And Now for Something Completely Shameless

Just the Facts Ma'am: A Case Study in the Reversal of Corruption in the LAPD has just been published by Palgrave, and is available in hardcover or Kindle versions on Amazon, here.

And Now For Something Completely Different Than Economics



JULY 13, 2013

It  has come to our attention that a summer intern has exceeded his/her job authority by releasing phony, insensitive, vulgar and racist names in connection with the crew of the Asiana airplane crash in San Francisco. The NTSB wants to make clear that it does not tolerate such pranks, and that those responsible will be sacked.

Yura Moose
NTSB Public Affairs Spokesperson