Amended Energy Outlook

I just realized I left out additional stats and the brief conclusions to the previous article on a survey of oil and gas industry leaders.  The conclusions are that industry spending will increase in 2012, but the following information points to regulatory hurdles that (a) are seen as obstacles by industry and (b) are seen as necessary protection against unaccountability on the part of industry by industry watchdogs.  Also interesting is the problem of skilled labor or lack thereof.  Community colleges may be taking the lead on this issue. I know that Bossier Parish Community College in Bossier City, LA, now offers a two year degree that is tailored to meet the needs of the natural gas industry, particularly in regard to the Haynesville Shale.

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• "Risk remains a key challenge:

An overwhelming majority of respondents
- 82% - either strongly or somewhat agree
that regulatory issues have become more
important in the post-Macondo period.
Increasing regulation is regarded by more
than 30% of respondents as the main
challenge for their company over the next 12
months.

• Skills shortages are becoming more acute:

According to the Economist Intelligence
Unit’s research, skills shortage comes out of
the survey as one of the major obstacles to
growth over the next 12 months. Last year,
skills issues came fifth on the list of barriers
and were only identified as a top three issue
by 25% of respondents. This year, the issue
has risen to second on the list, and has
been identified as a key barrier by 34% of
respondents.

Conclusions:
Companies are preparing to spend big in 2012,
despite a slower growth in demand for oil and
gas during the second half of last year, and
concerns over the future of the global economy.
Findings from the report highlight a wealth
of barriers to success, from rising operating
costs to the worry of an impending shortage of
skilled professionals and an uncertain regulatory
environment in the post-Macondo era.
Capital expenditure looks set to take off,
industry leaders will need to invest selectively
this year, keeping operating risks low during
a period of prolonged uncertainty. Their
success will be defined by an ability to develop
innovative approaches to operating more safely,
efficiently and sustainably than ever.
Findings from the report highlight a wealth
of barriers to success, from rising operating
costs to the worry of an impending shortage of
skilled professionals and an uncertain regulatory
environment in the post-Macondo era.
While capital expenditure looks set to
take off, industry leaders will need to invest
selectively this year, keeping operating risks low
during a period of prolonged uncertainty. "

Energy Outlook 2012

Interesting report on Oil/Gas outlook from survey of industry leaders, part of newsletter found here.

The Oil and gas industry leaders have forecast improved performance and higher
levels of capital expenditure this year, despite concerns over global economic instability,
according to the new report on the future of the sector by the Economist Intelligence Unit in its
second annual industry barometer.

• 82% of the 185 board-level directors and industry policy makers surveyed for

the report are either highly or somewhat
confident about the business outlook for their
company, compared with 76% last year. Just
8% of those polled described themselves as
pessimistic over performance in 2012.

• Increased investment across the industry

will focus on exploration activity, with North
America emerging as the area with the
greatest opportunities in 2012.

• Findings from the research also show that

nearly two thirds (63%) of executives plan to
invest either somewhat or substantially more
over the next year, in contrast to 49% in 2011.

• 41% of industry professionals expect to

see increased investment in exploration
activities over the next year, with only 4.3%
anticipating a decline. However, if global
economic conditions deteriorate, oil and
gas companies will have to scale back their
spending commitments where they can do
so without creating damage to their wider
portfolios, according to the report.

Gingrich's Afghan Modernization Plan

Cell phones! Give every Afghan a cell phone, says Newt. The underlying logic is sensible, of course, but not applicable. As I told a friend recently, making sense and being delusional are not necessarily mutually exclusive.  And people complain about "free Obama phones"! (Referring to a policy begun under President GW Bush's administration and in some cases is a state policy by which inexpensive and limited cell phone usage is provided to Americans who meet a criteria based on poverty and employment related measures.  Internet usage is coming soon, by the way.) I wonder what they think of Gingrich's cell phone strategy for Afghanistan....

Anyway, every insurgent and every conflicting tribal leader would, I think, greatly welcome the policy of flooding Afghanistan with cell phones.  The policy would have some positive developmental results, especially if managed in conjunction with related policies, but would provide many opportunities to the insurgents for recruitment, cyberwar, theft and identity theft, and disinformation campaigns.

Foreign policy in U.S. presidential campaigns has never been the high point of serious debate, and has often provided fodder for strategic messaging likely based on exaggerations, especially if an incumbent is running for reelection, although the open election of 1960 provides a good example, referring to JFK's exaggeration of the missile gap between the U.S. and U.S.S.R.   Fear is irresistible, and propagating fear is not challenged in foreign policy as it is in, say, welfare policy, in part because it traditionally plays a relatively minor role in electoral decisions and outcomes.

Containing the violence that will shape Afghanistan's socio-political future is rapidly becoming the priority, and that can happen with an offshore presence. The United States would be better served strengthening relations with neighboring Central Asian societies who also have great interest in seeing Afghan instability to remain in Afghanistan.  Handing out cell phones in Kyrgyzstan makes a great deal more sense than doing so in Afghanistan.

Springtime of the Tribes

A new batch of gray clouds moves overhead every few hours as we move a little closer to April, one of my two favorite months in Louisiana (the other being October) and a little further from February. The GOP nomination process continues on like a long February as well. But I suppose every presidential election year is a leap year, in some ways more than others.  Calendar-wise, check.   "Leap of faith" is a common enough term, but less so in the political arena.  Taking a leap of faith requires confidence, security, trust, and adaptability.  But as we proceed into another most important election in our history, each of these qualities is in decline.  Confidence is applied only to the notion that one's opponent is beyond wrong....the wrongness is driven by evil forces, the worst of humankind's potential for social destruction is manifest. Horrendous comments on Andrew Breitbart's death, for example, have no doubt already spread across cyberspace, providing ample fodder for "the other side" to reciprocate the demonization, happily implying that the decidedly non-random sample of such comments represents all adherents to the other other side's ideology.  The latest Rush-invented controversy is similarly exemplary.

Such confidence in the absolute nature of others' destructive potential only betrays insecurity in the resilience of one's society and political system. "American Exceptionalism" has become an exercise in exceptional self-rebuke, exceptional weakening of the social contract, and exceptional fear from threats that are by almost every measure asymmetric and manageable except that the momentum for destructive policies will likely outpace that of reasoned recommendations.

I feel like I can just skip over the trust part. To say that no comment, no action, no accident even is above suspicion is understating the case, as, again there is full confidence in the distrust necessary to succeed politically.  It's probably the adaptability point that I'm most concerned about in the long run. The winner-take-all electoral system has locked in the two major parties long past their ability to represent a nation of 300+ million people.  The networking power of the information revolution is not allowed to operate in the electoral process except as tools of the struggling parties and mass media demagogues. Dissatisfaction can drive increasing numbers of Americans to deny allegiance to either party, but because of the political structures in place for so long, and the dominance of winner-take-all elections in the Electoral College, no candidate outside the two major parties will win a presidential election.  He or she may hold some influence over the outcome of the two party contest, but no more. This is not to say there aren't downsides to any system that would replace the current one, of course, but the reality of the moment is a system made increasingly dysfunctional because of resistance to change. This dynamic is at work throughout many areas of society and in the realm of global politics as well.

Social and political expectations of the politically attentive public have reached utopian levels. Notions of public goods and civil society have been blunted by anger over exaggerated fears and demands for absolute security from bad news. There are no doubts that the challenges we face are daunting and in some ways unprecedented. But to paraphrase a Republican candidate, it's more common to set one's hair on fire and scream about worst case scenarios than it is to return to the true American ideology in search of answers -- the anti-ideology of reasoned pragmatism.  In the world depicted by today's ideological rhetoric, all legislation, all executive actions, and even all position statements are frozen in time, ends but not beginnings as well, and, of course, ultimately destructive of a great power sovereign state that sports 300 million people, a $14+ trillion economy and the most sophisticated diplomatic-intelligence-military security system in the world.

To conclude for now, it's likely to be a long and depressing campaign year, punctuated by spikes of hilarious and/or completely mystifying statements. But what does this say about where we are, about our political culture?  I do not hold that in the short-term, the country, or the economy, or the security future is at risk of destruction from either internal or external forces, though the resilience of the system is strained by such forces, especially the internal centrifugal forces of ideological tribalism.  What's at immediate stake is quite simply the ability to work toward the resolution of problems, which has traditionally been difficult but workable among opposing, but ultimately pragmatic, political forces.

Taking Stock: March 1

Dow Jones

NASDAQ

S&P 500

From 3/1/2012 www.washingtonpost.com

Looks like the upward trends took hold in November and have persisted for nearly two quarters.

But good news can bring unfortunate consequences. As discussed here, oil prices remain high as tension over Iran increases and as improving economic indicators point to increased fuel demand. Also noteworthy is the continued depression of natural gas prices, which has direct impact on the region where I live, especially the "Haynesville shale" just north of here.

Sunday morning....

Sunday morning....Good CSPAN discussion this a.m. with Nolan Finley, a Romney supporter and Editorial Page Editor of the Detroit News, though it's getting repetitive now. Obviously the "auto bailout" v. "managed bankruptcy" debate is proxy for Obama v. Romney.

One hour later.....Now Chris Wallace on Fox News is hammering Romney pretty hard.  "President Obama dedicates a trillion to deficit reduction.  Your plan doesn't."  Ouch.  Waiting to hear questions about the height of trees.....

Lunar Newts

Meet the Press, 2/5/12, Newt Gingrich talking space policy. He's correct in his touting of how space fits into China's security and commercial interests and its impact on American interests.  More on that in a bit. Another aspect of his ideas is his assertion that his plans would not require additional federal funds, going on to promote a highly privatized space policy and a "fundamentally reformed" NASA geared toward privatization.  This notion should be fairly easy to rebut with evidence from the private sector that the capital risk is too substantial to engage a policy as expansive as what Gingrich has in mind.  Since the failed Solyndra case is a campaign issue, it makes a good case in point. Not its failure, that is, but the public-private partnership the case represents. Would the Walton family of Walmart fame risk $7 million, as they did with Solyndra, without the federal loan guarantee? Given the conservative spokepersons' usual affinity for Walmart and its owning family, why leave this angle of the Solyndra story out of nearly all reporting and commentary, or any of the $78 million in private investments attracted to Solyndra?  If this were put at the center of the conversation for once, then we could better discuss Gingrich's ideas on pursuing an expanded commercial (and, apparently, political) presence in space.

The other space-related comment was similar to what I've heard elsewhere, not only in reference to this particular topic, but to many issues because it represents one of my pet peeves (especially when coming from Dr. Gingrich): the misuse of history.  Granted, Gingrich was quoting Greta van Susteren of FoxNews, but doing so in explicit agreement.  Gingrich applauded Susteren's statement that she "could not imagine" criticism of John F. Kennedy over his space policy.  This ignores Kennedy's long history of ignoring or even belittling space exploration as a priority matter, and that it was Vice President Johnson who made Kennedy a convert.  In his political career, LBJ was long an advocate of the opportunities afforded by space.  Kennedy saw the space program in purely political terms, as a demonstration to the Soviets of the superiority of the American political and economic systems.  Still, there's no doubt the eloquent JFK deserves great credit for his serious support of the Apollo program once he converted.

More to the point is the statement about criticism. Let's review.  Former President Eisenhower (R) called JFK's ideas "madness" and asked, "Why the great hurry to get to the Moon and planets?" He said JFK's calls in June 1963 for $40 billion in federal expenditures on the Apollo project were "just nuts."

Conservative icon William F. Buckley, Jr., was very critical of the high priority afforded the space program: "Very well, you have reached the Moon, but meanwhile here in America, we have been trying, however clumsily, to spread freedom and justice."  Democrats Fulbright and Proxmire were also very critical, with Proxmire calling Kennedy's space program, "corporate socialism."

Kennedy softened his tone about space policy being a matter of national greatness in a speech to the United Nations:

...Why, therefore, should Man's first flight to the Moon be a matter of national competition? Why should the United States and the Soviet Union...become involved in immense duplications of research, construction and expenditure? Surely we should explore whether the scientists and astronauts of our two countries — indeed of all the world — cannot work together in the conquest of space, sending someday in this decade to the Moon not the representatives of a single nation, but the representatives of all our countries.” (Public Papers of the Presidents of the United States, 1963, 695).

This drew criticism in both houses of Congress, who used the budget process to resist such plans.The quotes in this post are taken from a paper published on the University of North Dakota webpage for an academic conference. The paper is linked here, as is a paper by my good friend and colleague Dr. Charles Pellegrin of Northwestern State University. While I'm recommending good works on related topics, I'm happy to mention the work of my former undergraduate Mr. Peter Pindjak, who went on to earn his Master's degree from the University of Pittsburgh.  Peter's thesis on space militarization in the Eisenhower administration can be found here.  I was very proud to be a committee member for Peter's undergraduate honors thesis on contemporary missile defense policy.  He is now employed in a national security policy position for the government of his home state, Slovakia.

I am always amazed at the idealism of Americans. So many times we hear respected people make historical statements without further discussion or question, largely because it is time to move on to another topic. It especially bemuses me when people exaggerate the political unity of past eras. No doubt we are in an especially polarized condition as we progress into the 21st century.  But I've heard radio talk show hosts speak as though there was no press or political criticism of FDR during World War II, for example, when what we should do is not only acknowledge but also study, learn from and even celebrate such criticism.  But that takes time, for which broadcast politics do not allow, whether on major news programs or formal candidate debates.