/* Added by TWP, 10/12/2012 */ /* End of addition */

One of the live oaks that bless my home

Saturday, August 15, 2015

Peak of Gas Production in the Barnett Shale

An ocean of ink has already been spilled on pros and cons of using Hubbert curves to model production from a large collection of wells in one or many reservoirs.  In 2010, I published together with my last graduate student in Berkeley, Dr. Greg Croft, a highly cited paper on this subject. I have also commented multiple times in this blog on the different aspects of the Hubbert curve analysis, its limitations, and predictive power.

Since I cannot out-talk or out-convince the numerous critics of this type of analysis, let me give you a simple example of its robustness. This particular story is as follows.  At the end of the year 2010, Greg Fenves, at that time Dean of UT's Cockrell School of Engineering in Austin, asked me to make a presentation to the School's Engineering Advisory Board (EAB).  Using the results of our recent paper with Greg Croft, I chose to speak about my new work on unconventional resources in the U.S.  On April 09, 2011, I made the presentation, which was then internally published by the Cockrell School.

The first two Barnett shale plots shown below were based on the Texas Railroad Commission data through October 2010. In the presentation, I called these plots the "high production scenario."  The Hubbert curve with which I matched the production data ending in October 2010, went right between the two local peaks of the data.  Of course there was an element of luck, helped by two decades of my experience as a reservoir engineer.  Such experience or - for that matter - any other knowledge of reservoir engineering is absent among the economists, political scientists and journalists, who are paid to criticize this type of work.   
To see this image in full resolution, please click on it. The total rate of gas production in the Barnett shale through October 2010, was matched with a single Hubbert curve.  1 EJ/year ~ 1 trillion standard cubic feet (TCF)/year.  This "high production case" was presented in April 2011, at the Spring meeting of the Cockrell School Engineering Advisory Board (EAB) at the University of Texas in Austin. It was also made available electronically to the EAB members.

To see this image in full resolution, please click on it. Cumulative gas production in the Barnett shale through October 2010, was matched with a single Hubbert curve (an integral of the bell curve shown above).  The projected ultimate production was at least 27 TCF. 1 EJ/year ~ 1 TCF/year.
In fairness to lay people, the respected reservoir engineers who saw these curves in 2011, smiled at my naïveté and predicted 60, 100 plus, or more TCF of gas production from the Barnett. In short, most experts were also amused.
Cumulative drilling permits issued by the Texas Railroad Commission for (the mostly horizontal) wells in the Barnett shale.  Note that the cumulative permit curve follows a logistic S-curve similar to the cumulative gas production above, only shifted in time.  Peak wells (4,065 at the inflection point in 2008) were drilled ahead of peak gas production in 2012.  We are beginning to see the ultimate "carrying capacity" of past drilling in the Barnett. To change this S-curve, we need a brand new Hubbert cycle of drilling.

What did I do?  I used a two parameter curve (height and width) to describe and extrapolate production from close to 20,000 wells in the Barnett. I knew two things: (1) this production could be matched with one Hubbert curve or 2-3 of them, and (2) I had to go above current gas production (overshoot it) because this production had not already peaked.  The first observation is based on the Central Limit Theorem explained in our paper, and the second one is an admission that more wells will be drilled and production will increase further, we just do not know by how much.  Experience and intuition allow one to reasonably guess the size of this production increase.  Guessing is an art and not all experts are artists. 
To see this image in full resolution, please click on it. The total rate of gas production in the Barnett shale through March 2015, is matched with a single Hubbert curve.  1 EJ/year ~ 1 trillion standard cubic feet (TCF)/year.
To see how good this December 2010 prediction was, fast forward five years. I should remind you that the Hubbert cycle predictions of future production of a very large number of wells and/or reservoirs are remarkably stable - the Central Limit Theorem makes sure of this, but I would not be happy if I predicted gas production in the Barnett shale with a 50% error.  Luckily, as the plot above shows, I was right on the money, and no corrections were needed.  Nevertheless, I could not resist tweaking the peak almost imperceptibly and increased the ultimate gas production from the Barnett by less than 1 TCF.  Call it a reservoir engineer's decease.
To see this image in full resolution, please click on it. Cumulative gas production in the Barnett shale through March 2015, is matched with a single Hubbert curve.  The projected ultimate production is at least 28 TCF. 1 EJ/year ~ 1 TCF/year.
In summary, given the current number of wells in the Barnett shale (over 25,000 drilling permits by now) and the already traversed peak of gas production, it is unlikely that I will have to adjust this prediction in the future, but let me play devil's advocate.

The Barnett shale is most unusual in that it has two sets of fractures in the hydrofractured rock surrounding horizontal wells. One set is formed by the stress relief cracks from shear rock failure during hydrofracturing. Think of these cracks as being almost parallel to main hydrofractures and extending some distance away from both sides of these hydrofractures. But the Barnett shale is also likely to have another set of critically stressed (ready to pop), cemented natural fractures perpendicular to the hydrofracture planes. Together these two sets of fractures link during hydrofracturing and form large complex fracture systems that also communicate with the main hydrofractures. Thus, one could use this wonderful property of the Barnett mudrock, not replicated in other major shales, to create in the future many better and cheaper wells in the Barnett. If this happens, I will add a new Hubbert curve to my Barnett shale production model to account for the new wells, and happily report a significant increase (but not by 50%) of gas production there. 

Wednesday, July 8, 2015

There Must Not Be a Peak of Anything

I could start from telling you about my own impressions of human delusions, but I could not possibly introduce the subject better than the ENCYCLICAL LETTER, LAUDATO SI’ OF THE HOLY FATHER FRANCIS ON CARE FOR OUR COMMON HOME.  Here is a short fragment of the Preamble pertinent to what I want to say later:

1. “LAUDATO SI’, mi’ Signore” – “Praise be to you, my Lord”. In the words of this beautiful canticle, Saint Francis of Assisi reminds us that our common home is like a sister with whom we share our life and a beautiful mother who opens her arms to embrace us.
“Praise be to you, my Lord, through our Sister, Mother Earth, who sustains and governs us, and who produces various fruit with colored flowers and herbs.”
2. This sister now cries out to us because of the harm we have inflicted on her by our irresponsible use and abuse of the goods with which God has endowed her. We have come to see ourselves as her lords and masters, entitled to plunder her at will. The violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air and in all forms of life. This is why the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor; she “groans in travail” (Rom 8:22). We have forgotten that we ourselves are dust of the earth (cf. Gen 2:7); our very bodies are made up of her elements, we breathe her air and we receive life and refreshment from her waters.

Nothing in this world is indifferent to us

3. More than fifty years ago, with the world teetering on the brink of nuclear crisis, Pope Saint John XXIII wrote an Encyclical which not only rejected war but offered a proposal for peace. He addressed his message Pacem in Terris to the entire “Catholic world” and indeed “to all men and women of good will”. Now, faced as we are with global environmental deterioration, I wish to address every person living on this planet. In my Apostolic Exhortation Evangelii Gaudium, I wrote to all the members of the Church with the aim of encouraging ongoing missionary renewal. In this Encyclical, I would like to enter into dialogue with all people about our common home.

4. In 1971, eight years after Pacem in Terris, Blessed Pope Paul VI referred to the ecological concern as “a tragic consequence” of unchecked human activity:
“Due to an ill-considered exploitation of nature, humanity runs the risk of destroying it and becoming in turn a victim of this degradation”. 
He spoke in similar terms to the Food and Agriculture Organization of the United Nations about the potential for an “ecological catastrophe under the effective explosion of industrial civilization”, and stressed “the urgent need for a radical change in the conduct of humanity”, inasmuch as
“the most extraordinary scientific advances, the most amazing technical abilities, the most astonishing economic growth, unless they are accompanied by authentic social and moral progress, will definitively turn against man”.
When you dry up your eyes, please continue reading this amazing document and don't be ashamed to shed more tears for our very sick Mother.

So what did you get from reading the opening four paragraphs of the preamble to the Pope Francis' Encyclical?
You just learned that everything is a part of the environment and everything is intertwined.  
I spoke and wrote about this very subject many times. Apparently, however, the journalist who wrote the next piece is so indoctrinated by the religion of the supremacy of human economy over the environment that he entitled his reflections as follows: Pope Francis' Call to Action Goes Beyond the Environment. So here is another reminder for you:
All Earthlings exist and thrive by the consent of the Earth's environment.  We wound the environment and we perish.
Among others, the journalist - whom I generally like - says:
For instance, he [the Pope] doesn’t grapple sufficiently with evidence that the global poor have become steadily less poor under precisely the world system he decries — a reality that has complicated implications for environmentalism.
I, for one, have grappled with this "evidence" and was not convinced. The economic progress of the poor is like this: In 2011, four billion people survived on less than $10 per day, and one billion on less than $2 per day.  That's twice as many people as the entire world population when a majority of people was outside of cash economy. Today, those people would be considered "poor," but they were not.  The number of middle-class people - those making between $10 and $20 a day -  increased to 784 million people in 2011.

In general, you will agree with what the Pope says, unless your religion is The Market, and your pet project is carbon credits, a harmful nonsense the Pope decries. An example of this attitude is the next piece, also from the New York Times,  Pope Francis' Climate Error.

Carbon tax credits are usually given to people who really pollute place A, e.g, Europe or China, and get a dispensation by putting, for example, sugarcane plantations or corn fields in place B, e.g., in Zimbabwe or South Africa.  If they also plant a few trees, they can make a handsome profit from their real air pollution in one place and - at the same time - from soil degradation and water pollution in another place.  And they do it by bullshitting the public and lawmakers.  Nice, but not a way to go.

Yes, you might object, but the Pope doesn't really like the holy Free Market:
To understand the pope’s position, remember that, even though he is adopting a progressive stance on the environment, he is not a liberal. Indeed, he rejects one of the central tenets of liberalism, which is a willingness to acknowledge genuine disagreement about the good.
The fundamental problem with markets, in Pope Francis’ view, is that they cater to people’s desires, whatever those desires happen to be. What makes the market a liberal institution is that it does not judge the relative merits of these desires. The customer is always right.
No, the customer is not always right in the absolute moral sense. If you eat the living planet by consuming cheap crappy goods you don't need and by trashing other countries, you are not right, not even close.  And that's the Pope's point, missed it seems by the good philosophy professor from the University of Toronto.

Now on to a more obvious environmental delusion, popular among the public and environmental propagandists, from the New York Times again: Animal farm waste and animal fat will help power a United Airline jet.

From reading articles elsewhere, you can learn that the United Airline (UA) agreed to buy 15 million gallons of biofuels over three years from a California-based biofuels producer, AltAir Fuels, that “makes biofuels out of nonedible natural oils and agricultural waste.”

In a single year, UA uses 3.6 billion gallons of jet fuel and purchases, say, 15/3 = 5 million gallons of fuel. The ratio is 3.9 billion gallons / 5 million gallons = 780. By analogy, if you use 780 kWh per month of electricity in your house, 1 kWh will be generated from a different fuel source. This amount of electricity will power one 100 W bulb for less than 10 hours. In other words, the contribution of biofuels to UA's fuel supply is in the noise, and certainly does not warrant a front page article in the New York Times.

If planes ran on biofuels, there would not be a global airline industry. Thus, I must conclude that our propensity for self-delusion is simply too strong to resist. And to hell with the environment, which is getting hurt by biofuel farming and production.

An apt metaphor for the state of health of the Earth's major ecosystems.  Source: Melody Newcomb, The New York Times, July 7, 2015, "A Knockout Blow to the American Fish Stocks."
No on to the true evil doers: A Knockout Blow to the American Fish Stocks. These people, who apparently have no conscience and imagination, want to negate the small improvements in fish stocks along the northeastern American coast.  They work for the New England Fishery Management Council and their bullshit motto is splattered on their webpage as follows:
Conserving and managing fishery resources by relying on sound science, promoting public participation, and balancing competing interests.
They balance competing interests along these lines: Forget the fish and the healthy ocean, and food for us, our children and grandchildren.  Instead, lets' allow people who give us money to make a quick buck from destroying the environment for all:
..., the council is preparing to drastically reduce the amount of protected habitat in New England waters, including by nearly 80 percent around the Georges Bank. The plan would allow for expansion of bottom trawling and dredging, two of the most destructive fishing methods, into protected habitats.

In addition to gutting habitat protections, the council wants to suspend a program that places observers on fishing vessels to monitor compliance....
On a lighter, but related note, Tom Selleck, a popular American actor was accused of stealing many truck loads of water from a public hydrant to quench thirst of his 60-acre ranch; the rest of the drought-stricken neighborhood be damned. What did the Pope say about "the harm we have inflicted on our Mother by our irresponsible use and abuse of the goods with which God has endowed her?  Have we come to see ourselves as her lords and masters, entitled to plunder her at will?

"And so it goes...", as my soulmate, the late Kurt Vonnegut, would say.

P.S. 7/11/2015. Here is another sad commentary on the Pope's statement that "[t]he violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air and in all forms of life."  The very people who swore not to harm others, helped instead in justifying torture: Psychologists Who Greenlighted Torture. This evil originated at the very top of the otherwise respectable medical organizations, among people who were trained by the top U.S. universities. Their behavior makes Monsanto, which foreswore to harm the environment in every conceivable way, a part of the same big family of evil doers. Just as the Pope said.

Saturday, June 6, 2015

There Must Not Be Peak Oil



In this post, I explain the logic of wishful thinking and plain denial that rules on the Earth in most matters that matter (population growth, power (= energy per unit time) supply, water supply, food supply, progressing destruction of planetary ecosystems, and so on).  
I imply throughout that without an ample and continuous supply of power as liquid fuels, chemical feedstock and electricity, the societal activities we take for granted are impossible.
I start from formulating a grand postulate that is self-evident, given the finite volume of the Earth's lithosphere and the law of mass conservation:
(The Grand Postulate) If all hydrocarbon resources in the Earth’s mantle are finite (= A) then
there is peak rate of hydrocarbon production  (= B) [as these resources are gradually depleted]: A implies B or A B

This Grand Postulate is logically equivalent to its contrapositive: if not A then not B:  (not A = ~A)  ~B:
If hydrocarbon resources are infinite (= ~A), then there is not peak production rate (= ~B). 
But the following two statements are also always true:
If hydrocarbon resources are infinite (= ~A)  then
there is (=B) or there is not peak hydrocarbon production rate (= ~B) 
We could stop producing ever more hydrocarbons year-on-year, but we don't have to because the resource is infinite.

Instead, we wish that this statement were true, because we don’t like or fear B: 
Even if hydrocarbon resources are finite (= A)  then
there is not peak hydrocarbon production rate (=~B):  A ~B
In view of the law of mass conservation (The Grand Postulate) this statement seems false to a few people who understand science, so we have to find additional “evidence” for the validity of ~B.  The best strategy is to find a new shiny ~A.

Here is where shale oil/gas and/or Arctic oil/gas and/or new technology or anything else come to help.

Let’s try to “prove” the no peak of hydrocarbon production (~B) with shale oil and gas, and technology: 
(The Grand Not Postulate) Since we know that there is a practically infinite amount of hydrocarbons in shales and new technology of recovering hydrocarbons from these shales exists in the U.S. (= a substitute ~A) then
there is not peak hydrocarbon production rate ( = ~B)   Q.E.D.
As you can see, I have diverted your attention from the real problem (the finite Earth and low production rates (power) from shales) by postulating something that is evidently false as true.  Then I followed with what you really wanted to hear: There is no problem. So you happily glossed over the patent untruth of my argument. This is how most media and political proclamations work.
In the U.S., it is now commonly understood that the Grand Postulate is false, because of so many “false” predictions of peak production rates, at least on the scale of few months or years. 
You understand, I hope, that I simply wished away the problem, and used you as dupes to justify my false conclusion.  

Now, if you believe my lies, you are essentially crazy, because you see things that do no exist and non-crazy people cannot see. So the following questions arise:
  • What are people in the U.S. to do when they have been convinced that the silly statements of peak oil [and gas] power production are false?
After a few months of lower oil prices, they are buying again the same old monster trucks and SUVs, and they are driving again a record number of miles. The U.S. is also setting out to export more natural gas. Call it a complete relapse of an old drug habit.
  • What are the now convinced Americans to do when the price of gasoline relative to their (almost uniformly) declining incomes becomes too high? 
They will be very angry and blame others for misleading them.  Heads will be rolling. The absolute prices of gasoline and heating oil do not have to become much higher in magnitude.  It is sufficient that the real incomes fall just enough to prevent people from simultaneously eating, paying bills, and driving to work and to acquire necessities. In the U.S., most people must drive to subsist. 
  • What are [the American] politicians to do when they too have been convinced that the silly statements of peak oil/gas power production are false?
Politicians abhore the giant effort of planning and building an altogether new national infrastructure of small but complete towns, surrounded by their own agriculture/ranches, and possessing a decentralized, partial generation of electricity from wind and photovoltaics, as well as heat from passive solar heaters and geothermal heaters/coolers.  These towns must also have sufficient water supplies from rain catchment, rivers, and groundwater. They must be connected with a sparse network of electrical train rail lines.  Almost all trains are not very fast, because there is little need to go long distances, except for transporting [ever fewer] goods.   There will be plenty of electricity left in the existing base power generation system to propel these trains.

The new houses/apartment complexes are not built in the woods, where they will almost certainly burn and be never replaced, or on high quality agricultural soil.  Today, almost 2 out of 3 new houses in the U.S. are built in places with high fire danger and/or insufficient water supply.

The new housing units are not built on or near the beaches, where they will be swallowed by the swelling seas or destroyed by hurricanes. (Oh, that pesky non-existent climate change!)  They are not built in the flood planes of rivers and streams, where they will be destroyed and there will be no money to rebuild them.

I definitely see a new post entitled: "There must not be climate change."  Yes, climate change is so very inconvenient and scary. We must wish it away.

Unfortunately, the problem of peak production rates of anything has been wished away in the U.S. and so many other countries that grow in population much faster than the U.S.  I will not bore you anymore, because I have written, spoken, and published on this subject for many, many years; to little or no avail it turns out.

P.S. Fresh from my friend, Art Berman: The Grand Not Postulate has also been published by my favorite Wall Street Journal, albeit in more poetic language: "Now Hubbert’s Curve has been trumped by Moore’s Law. There will be no limits to growth in the global economy in a few years when, thanks to American ingenuity and entrepreneurship unleashed upon shale formations world-wide, oil—like transistors—becomes, for all practical purposes, free. And the lower oil prices go, the more money the frackers can make."

To verify your sanity, you really need to read Chapter 2 in the "Philosophy of Deception" or "On Truth" by Harry Frankfurt.

For the record, I regard the Wall Street Journal as a newer, gentler, and smaller-circulation version of the old tried Völkischer Beobachter or Pravda.

P.S.P.S.  6/8/2015.  If you want to be confused by reality, please verify that the global production of conventional crude oil and lease condensate has remained essentially flat for the last 11 years, as depicted by the the blue area in the magnified Figure 1 in "A New Peak in Conventional Crude Oil Production."  Even at $140 per barrel of oil, cold facts do not support the paradigm of no limits to growth of oil production around the world. This paradigm seems to rule in the U.S.

P.S.P.S.P.S.  07/03/2015.  Here is a somber assessment of shale oil production from the Economist, which is not the Wall Street Journal. Stay tuned in October 2015, when most of the current profitable oil price hedges expire.


 

Friday, May 8, 2015

Letters from Saudi Arabia - II

My Dear Western Friends,

Many of you have read my previous letter, dated May 4, 2015, and responded by email. Thank you.

I think we still have a little problem: Your replies have been much too U.S.-centric.  Unfortunately,  the world today is far too interlinked, in good part because of the U.S. policies over the last 35 years, and all problems are global.  Please parse the last sentence again and try to understand that you can no longer get away with being over there and ignoring what is happening here and everywhere else.  The cheap clothing and industrial products you buy in the U.S. come at a very high price to all other parts of the world.  High price means environmental and social deterioration.

Since hardly anyone cares about the environment until they can't breath, have no water to drink, food to eat, drown in floods or mudslides; or alternatively fall sick with cancer, Ebola, cholera, AIDS or Hepatitis, let's focus on the social deterioration and project it onto the U.S.  Then, I hope, what I say might interest you.

Among other things, I am an expert on foams.  Foams are collections of gas bubbles of different sizes immersed in a liquid, say water with a surfactant.  A long time ago, I wrote a beautiful but difficult paper, "Self-similar collapse of stationary bulk foams," that very few people ever read and even fewer cited.  Please look at Figure 2 for a nice 3D picture of a foam, but do not try to read this paper. You'd only get a headache from all these math equations.

Almost all foam bubbles collapse because of a universal phenomenon, called "Ostwald ripening," (a 30s movie) and water being drained by gravity from the bubble walls. In short, the smallest bubbles disappear and transfer their gas to the larger bubbles, while the bubble walls are getting ever thinner.  This process goes on until very few very large bubbles remain, or the entire foam catastrophically collapses, which is more likely.  You can look for a few seconds at a foam in your beer or champagne glass to see what I mean. Some foams can be made rigid and long-lasting with an appropriate surfactant or polymer that prevents or slows down gas inside each bubble from crossing the bubble walls.

Let's translate this understanding of bulk foams at rest into the stationary society foams made of people with different amounts of resources.  The small bubbles in this model are the poor people, the intermediate size bubbles are the middle class, the larger bubbles are the rich, and the few largest bubbles are the super-rich.  Each class of bubbles has a bubble size distribution.  In other words, different people in each bubble category have different amounts of resources. The polymer on the bubble walls that slows down or prevents foam collapse is the pristine environment, plentiful resources, good education for all, a stable happy society, good labor laws, health insurance for everyone, good governance, etc.

Now let's globalize these social foams, that is let's remove most of the polymers and put all foams into a single huge container, so all foams (countries) can contact each other directly.  Ostwald ripening will then happen everywhere, and only the super rich will remain with almost all of the global resources, or the world will go down in flames.  The U.N. today is one of the few global institutions trying to inject some polymer here and there, but their resources are woefully inadequate, because we, the Bubble People, don't care.  We eat organic food, fly to meetings, go to concerts, and think that nothing can ever happen to us.

But you are not interested in anything outside of the U.S., are you?  So, let's look at the social foam in the U.S.  With the stabilizing polymer missing increasingly since 1980, the small bubbles disappear first, then the intermediate bubbles.  In other words, by now, most of the poor have become completely destitute and the middle class almost disappeared.

We, the Bigger Bubble People, have been gaining from the disappeared poor and our bubbles have been growing nicely at their expense.  So we felt good over the last 30 years, not suspecting that it is our turn now to succumb to the merciless logic of Ostwald ripening with almost all polymer removed by the friends of globalization.  Therefore, only now, the inevitable progression of social foam collapse in the U.S. is getting interesting to us, as we, my friends, have been really quite the upper middle class.  Well, we must disappear as well, given a sufficiently long time, and only the super-rich will remain holding all power and resources, or the entire foam collapses and the U.S. society goes down in flames.
The super-rich already control all politics in the U.S. Source: Sunday Review, New York Times, 5/10/2015.

In case you haven't noticed, the super-rich already hold all power in the U.S., but they still do not own all resources, just 80 percent of them. Will they inject some stabilizing polymer to hold our much smaller bubbles intact for a while?

I doubt it.  And that's because the super-rich always think that their huge bubbles are untouchable.  That's how they always acted throughout human history.  With the exception of the few of you, my friends, most Americans know no history, so they will have to take my word for it. 
The Jungle, a homeless encampment of tents and shacks in San Jose, Calif., was cleared in December of last year. Jim Wilson/The New York Times
That's where we are now.  Our personal bubbles are under stress, even when we don't see homeless in the Silicon Valley or around our wealthy neighborhhods:
One notorious example took place in 2013, when Greg Gopman, then the chief executive of AngelHack, a code start-up, lamented on Facebook, “why the heart of our city has to be overrun by crazy, homeless, drug dealers, dropouts, and trash I have no clue.” (He later deleted the post.)  Source: The Shaky Moral Compass of Silicon Valley, The New York Times, May 6, 2015.
Here is the punch line:  
  1. The border and social policies implemented, for example, in the U.S., E.U., and Israel, prevent us from contacting the smallest external bubbles (the illegal emigrants), while removing the polymer from the insides of our national containers and pumping gas (resources) through the walls.  This means that our societies will undergo an accelerated Ostwald ripening, while the rich will feel safer in their fast growing bubbles.  That feeling of safety is of course erroneous, because now the internal poor and displaced (the internal disappeared resource bubbles) will stir the national foams with ever fewer bubbles and accelerate their collapse.
  2. An ample, renewable supply of small bubbles (immigrants) is good for the social foam stability against sloshing (big external upsets).  The small bubbles dampen sloshing and stabilize the society. But for security reasons we forgot about this physical requirement of regenerating our societal foams.
  3. The U.S. super-rich remain in direct contact with other huge bubbles elsewhere, which may exist in more rigid foams.  Thus, some of our biggest bubbles may also be sucked out into oblivion.
In summary, the outcomes of the inevitable Ostwald ripening or social rearrangement in the U.S. are far from certain.  Such is the ever-surprising wealth diffusion in the global economy.

Wishing you a little more happiness in our disappearing bubbles, Tad

P.S. Since a theory of self-similar collapse of social foams could be developed, I challenge a graduate student of economics or a similar discipline to contact me to jointly develop such a theory.  The capillary suction due to gravity could represent job and capital flight abroad and/or loss of tax revenue from the corporations and individuals, who have been paying off politicians in exchange for tax avoidance.

P.S.P.S. 08/18/2015 And here is how Ostwald ripening works for the top employees of top-ranked firms (and universities), but then for the firms themselves, as all are sucked out down to the last winners and then pop!

P.S.P.S.P.S. 08/25/2015.  Do you see now what I meant by the globalized social foam?  The suction causing social foam collapse is now present literally everywhere.  It is truly scary for me that my own conceptual model of global economy has been so successfully tested by the global market collapse. "Tumult leaves analysts seeking explanations," shouts the New York Times.  Wow!  This tumult was a predictable instability of the global foam and $3 trillion worth of bubbles just disappeared by collapse, not Ostwald ripening. Collapse is worse, because the entire foam may disappear in the end.

And here is Roger Cohen: "This is a season of radical discontent. People believe the system is rigged. They have good reason. Rigged to favor the super-rich, rigged to accentuate inequality, rigged to hide huge increases in the cost of living, rigged to buy elections, rigged to put off retirement, rigged to eviscerate pensions, rigged to export jobs, rigged to sabotage equal opportunity, rigged to hurt the middle class and minorities and the poor. Increasingly unequal societies have spawned anger, an unsurprising development. The anger is diffuse, in search of somebody to articulate it, preferably in short declarative sentences."

How about this? It is the ever faster drainage and collapse of the global society foam, stupid!

Monday, May 4, 2015

Letters from Saudi Arabia - I

My Dear Western Friends,

As one of the old classics said, and I paraphrase, "Where you look, defines your outlook."  By email, you asked me several questions. Below are some of my answers. As links in green, I picked two of my old blogs and kept on adding several articles from the New York Times that were published in the last few days.  I am not the only person who is morally troubled.

On the fracking revolution

It used to be that massive environmental destruction happened in the God forsaken foreign countries or the poor empty parts of our motherlands.  Not anymore.  Now heavy industrial activities come to where we live and work, and environmental damage happens in the ecosystems we actually care about.  That's the reality of resource exhaustion paired with the ever-growing appetite for these resources from us, the Bubble People.

Take "shale revolution" as an example: 10,000 tons of clean, round, well-sorted fracking sand per well, or one hundred 100 ton railroad cars (really big ones), or one very long train of sand per well x thousands of wells per year = environmental destruction, damage to watersheds, permanent changes of ground water distribution and levels, obliteration of farmland in Wisconsin, Minnesota, etc., silica dust inhalation, damaged communities, and so on.

For economists these are merely externalities (or lives made unbearable by the sacred ritual of environmental destruction to make money; please look at China), but for me it is just one of the many reasons for the across-the-board decline of the U.S. And the Fed-created, bank-abetted “shale revolution” bubble popped regardless. ("Fed" means the U.S. Federal Reserve Bank.) This shale bubble, however, was the only real economic growth in the U.S. economy in the last 5 years.

Each next “revolution” of this kind will leave even bigger wounds on the Earth’s thin skin and will harm us more. But it does not matter anymore: the progressing harm has been irreversible for quite some time. We, as a species, are on the final stretch of our “economic growth curve” before a major physical collapse, and nothing can prevent this collapse, no matter how much we discuss and explain the all-encompassing human myopia among ourselves and our government watchers. The popping of the bubble in which we reside will be most unpleasant and we will finally comprehend what is happening to the countless millions of desperate people, who today are on the other side. I reside uncomfortably close to that other side, so I see things a little differently than when I was bubbling away in Berkeley, California, or Austin, Texas.

On a positive note, there are still many mountains to blow up in West Virginia, Kentucky, and the rest of the world. There are still countless trees to be cut or burned. There are mangrove forests left to be converted to beach resorts or shrimp ponds that will help in killing the oceans. There are aquifers to be sucked out or polluted. And then there is air to be made unbreathable for millions.
But the victorious global free market must continue to march on unimpeded by human heart, conscience, and imagination. 

What’s your solution? (A typical American question)

The issue of global inequality is extremely serious and solution almost impossible to arrive at and implement. I guess a good starting point would be to admit publicly and for a sufficiently long time, so that the customarily deaf and blind public registers, the past wrongs. This list is very long. It is easier to start from the U.S., because of its short history, which was nevertheless filled with the almost complete genocide of Native Americans, and the absolutely brutal treatment of the human cotton-picking machines, i.e., young, fit Negro slaves. This treatment was protected by U.S. Congress for many decades and led to the Civil War because of economic reasons (the deal was simply too good for the rich plantation owners in the U.S.'s South to exchange it for human rights). Some of this old treatment of black Americans is still well and alive in many of the city halls, police departments, jails, and prisons. We should add to this list the U.S.’s nefarious behavior in Central and South America, Asia, and Africa. Again, millions perished and untold damage has been done for us, the Bubble People.

Think of the U.S. and Europe as of the huge entropy-generating machines. We keep order and cleanliness inside and spew our wastes everywhere around the world. Thermodynamically, this cannot continue. With too many devastated exterior countries, entropy must eventually be generated inside of our clean motherlands. In my mind, this internal disorder has already started in earnest.

Click on the image to enjoy it in full size. Nice. My wife on the left and I thoroughly enjoy the green plants and the blue ocean. All the plants you see in this picture of a wealthy San Diego neighborhood are irrigated.
This letter to the Editor of the New York Times, nicely reflects the sentiment of my letter: Re “Drought Frames Economic Divide of Californians” (“The Parched West” series, front page, April 27): 
Recently I walked in the wealthy San Diego suburb of Coronado, where many residents are not conserving water. I saw a guy power-washing his fence before painting it. If he really were conserving, he could have used a bucket and a rag. Then there’s the green golf course and park, and the water left on the sidewalks from night watering of the green lawns. The wealthy can afford water at any cost. They are not conserving and will not conserve. They feel that they are above the law and do not have to abide by social norms. Forget shaming them.

ROGER NEWELL
San Diego
When Mr. Roger Newell talks about the rich who will not conserve, he speaks for almost all of us, the Bubble People.
Click on the image to see it in full size, remembering that it is huge. In the city of San Diego the green areas are powered by fossil water from the North pumped with lots of electricity from the imported natural gas and from coal.  Do you see the almost horizontal line near the bottom (south)?  This is the US-Mexico border.  Below the line, irrigation stops and the land is a lot more like here near Jeddah: a parched savannah or desert. The peninsula on the west, pointing south is a nice, mostly rich, and green area where my daughter's wedding was. All green plants there are irrigated, just like here. Image source: NASA, 1280px-San_Diego_NASA_World_Wind_Globe.jpg.

In Europe, the bloody history is much longer and even more complex, but it follows the same path of general genocide, brutal abuse of the poor, and repeated killings of local populations in most countries, including home countries. World War I and II were among the crowning European achievements, but they face stiff competition from the earlier valiant attempts at murder and mayhem.

Once we fully admit that the rich democracies today have been built on the thick, albeit somewhat fluid foundation of the torrents of human blood, suffering and injustice, and brutal coercion to corruption in the poor countries, we may start taking corrective actions and reach out to the poor in our countries and elsewhere in the world.  But you can see that this is not going to happen with us, the Bubble People.
I don’t want this letter to become a lengthy diatribe and invite you to propose your own human solutions, not just escapist jokes designed to protect your bubbles. 
The second step would be to admit that the Europeans and Americans stole over $1 trillion from the poor Africa over the last decade or so, while aiding and abetting corruption, arms sales, proxy wars, mass murder, and ethnic conflicts. Nigeria alone saw over $200 billion disappearing from its soil and into the Western banks.

Do you know that some 5 million people perished in the Democratic Republic of Congo in the recent decade or two?  And all that for our control of their minerals and other riches. This achievement is almost as impressive as Hitler's final solution, but literally no one knows and cares about it.  Just as no one cared about Rwanda and Burundi. We, the Bubble People, eat organic food instead.

If they had any recollection of these multiple tragedies, the good Europeans would perhaps recognize their own culpability in the recent tragic events and see humans behind the black and brown faces at the steps of their fortress. The same goes for the Americans, for whom it was so easy to reject the children fleeing from death in Honduras, into where we deported our local Honduran drug gangs from Los Angeles and broke the country. I still can picture that monster space alien Republican senator proclaiming on TV that “we must love these children with tough love and deport them immediately.” Obviously, the senator was speaking to his faithful constituents, the Bubble People.
Where is Doctor Who when we need him to save Planet Earth from alien space invaders?
Space aliens, the Deleks, apparently the extraterrestrial Republicans, are trying to exterminate the Earthlings. But not to worry!  Dr. Who will come to the rescue. Source BBC: Dr. Who
While I am at it, do you have any suggestions for atoning for other U.S. crimes in Mexico, Guatemala, El Salvador, Nicaragua, Honduras, Peru, Chile, Argentina, Brazil, Uruguay, Paraguay, Cuba, Haiti, and so on?

Eh, maybe not.  Instead, let's intone together: "U.S.A.!, U.S.A.!, U.S.A.!...." And why? Because we are the Bubble People.

What did you learn by living in the Middle East?

From my vintage point in the Middle East, the sum total of misery caused by the failed states here and in Africa is so overwhelming that I often gasp for air to breath. I see faces of all these dying and dead children, starving women, and drowned in the sea barefooted men. They all hope to reach and be inside of our bubble, and do so with such tenacity and desperation that we will not be able to shut ourselves away from their misery, to which we have richly contributed for a long, long time. It does not matter what Ms. Le Pen says, or German neo-fascists and white American policemen do. And Arizonians will not protect their border from the desperate Mexicans, fleeing from the very drug lords we have created and sustained in exchange for the drugs we devour in such quantities. Yes, we, the happy Americans, who have been eating the entire world from the inside of our luminous bubble.  We sell them our superior weapons and movies in return and they eat this stuff.

Our bubble is bursting now. And, no, there is no such thing as a slow and gentle tearing of a bubble. There is a firm mathematical theory for the speed of the burst once it starts. The game today is to hide away all recognizable needles that might prick our bubble and pretend that the bubble cannot be popped. But what about the needles we and our government watchers have missed?

Wishing you a little more of a happy life in your personal bubbles, Tad

Friday, March 20, 2015

Our ignorance

My American friend just expressed a concern that video-conferencing through Skype from Saudi Arabia (or Poland) might be unreliable and sound quality low.  Hmm...  Unreliable at which end?  I just checked the WiFi speed at my Red Sea home, and it averaged 69.93 Mega bits per second (Mbps) on downloads and 39.77 Mbps on uploads. On campus WiFi, I clock 150 Mbps on both downloads and uploads. Just three months ago, I was lucky if I got a sustained upload speed above 10 Mbps in Austin at home or on campus.

Then there is telephony.  When my wife and I were in the savannah east of Al Ula, near Mada'in Saleh, we and our Saudi friends, as well as the Egyptian driver, were on a 3G network and the internet, checking out the missing details.  The network reception was excellent over the entire 2000 km we covered.
The ancient town of Al-Ula, parts of which are 3000 years old.
Our Saudi companions, a young Government Affairs person from KAUST (left) and the wisest, most sophisticated guide I have ever had in my life.  Most of the time both had iPads and iPhones in their hands.
A Nabatean water tank in Mada'in Saleh. After trading frankincense to Romans for a few centuries, the Nabateans became the wealthiest kingdom in the Middle East.  Here was their main town south of Petra. The settlement started 2000-3000 years ago because water flowing from the mountains appeared at the surface and was stored in big excavated cisterns.  The 3G network reception was quite good in these beautiful ruins in the middle of nowhere.
An here is the reason:  Saudi Arabia is dotted with cellular transmission towers like the ones below, carrying 3 cellular networks and a military communications network. 
These network towers came in threes everywhere we drove and kept us connected to the entire world most of  the time. When we forgot a book title or a fact in the car, we could check it immediately on Google. Our guide would often show us his pictures on iCloud.
I do not recall having nearly such a high-quality reception while traveling in the U.S.  Which leads me to this observation:  The blissful ignorance and condescension of Westerners is staggering when it comes to Saudi Arabia and technological progress that has been occurring here in real time.  The cultural progress is always slower, just as it is in Alabama or Missouri, but it is accelerating too.

In summary, Saudi Arabia is now fully on a fiber optics network and has been for almost two decades.  Technology leapfrogged, and both the internet and telephony are faster and better here than in the U.S. But my fellow Americans have no idea that the obsolete networks and cellular phone systems are now in their country, rather than in what they call "exotic places."

Now let's talk about education.  In 2008, Saudia Arabia was spending about 5.4% of GDP on education, just like the U.S. Today, a high-ranking Saudi official at a conference in the King Abdullah University of Science and Technology (KAUST), my new university, quoted 25% of the GDP!  And it shows.  As one drives along Saudi Arabia (NS), there are new schools being built everywhere.  There are hundreds of new vocational schools.  Families are given cheap loans to build new homes, and these loans are partially forgiven when their children finish, say, a vocational school.

Roughly 30-40 thousands of Saudi students are sent abroad each year to polish their English and enroll in American and European universities as undergraduates. These students are in the top 1-2 percent of the Saudi high school graduates and all their expenses are paid. So the Saudi students are supporting some of the financially struggling public colleges in the U.S. These students are now trickling back to Saudi Arabia, and the best of them will enter KAUST, where I will have an opportunity to teach them and do research with them. Sixty percent of the Saudi graduate students at KAUST are women. When I look at many of the remarkable technical managers in Saudi Aramco, with Ph.D. degrees from MIT, Stanford, UT Austin, Texas A&M, etc., I inevitably compare them with their significantly less educated counterparts in the U.S. oil and gas industry.

In summary, the fast growing, well-educated working elites are transforming Saudi Arabia in real time.  Most Westerners have no inkling about the rate of intellectual change and vibrant business climate around, say, Jeddah, where I live. And these changes occur as parts of the 5, 10, and 20-year coordinated development plans.  As one of the remarkable Saudis I met remarked wryly, "We have not survived here in the desert for three thousand years by being impatient."

Compare this comprehensive, high-rate transformation of the entire country and its society with the governing principle of U.S. capitalism:
"One f... today equals one f... tomorrow plus one f... each day that will follow - for the rest of my life."
OK, so this definition of U.S. capitalism follows the descriptive language of Jon Stewart.  Usually, this crisp definition is obfuscated as discounting future at a 10-15 %/year rate to arrive at the net present value (NPV) of all human endeavors.   At the higher discount rate, what happens 10 years from today is four times less important than what happens today. Our children need 20 years to grow up and become productive; that's 16 times less important than our pleasures today. 

Now you see some of the reasons why I have moved with my wife to Saudi Arabia. We have a different approach to the future. Also, professionally speaking, I can no longer stomach the ideological exhortations like this one:
"It is time to build policies that reflect our new-found [U.S. oil] abundance, that view the future with optimism, that recognize the power of free markets to drive innovation, and that proceed with the conviction that free trade brings prosperity and progress."
These words were uttered by someone famous, but they were carefully crafted by a team of lawyers, psychologists, and media people to express every selfish gene in the confused American psyche

I see this statement as a smart appeal to the collective dark meme of American culture, and a paraphrase of my succinct definition of the essence of American capitalism. My paraphrase of this paraphrase is:
"Pull out all the stops and let us plunder today all we possibly [technologically] can.  Quickly sell the spoils, tomorrow be damned, and you don't care anyway." 
I could give you a more technical description of this serious problem, but the understanding of science and engineering is so shallow in the U.S. that I won't even try.  Instead, I urge you to read this great interview with Professor Noam Chomsky.  Please read it and try to be intellectually honest, able to confront the unpleasant implications of the quotations above, and cease to enjoy watching the "American Sniper," yet another cruel meme of American culture.

P.S. Culture can be defined as "that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society." (Edward Burnett Tylor, 1871:1)