Energy Markets Limit the Hormuz Shock

The world’s supply of fuel is much more diversified than it was during the energy crises of the 1970s

By Daniel Yergin. Excerpts:

"Today there is much more variety in world oil and natural gas than during the 1970s. The shale revolution has transformed the U.S. from the world’s largest importer of oil to the world’s largest producer of oil and natural gas and largest exporter of liquefied natural gas.

Overall, the Western Hemisphere now produces more oil than the Middle East did before the crisis. Canada is the world’s fourth-largest oil producer. Brazil produces four times as much oil as Venezuela; and in Guyana, where production began only seven years ago, output almost equals Venezuela’s. In Argentina’s Vaca Muerta region, shale oil production has grown sixfold since 2020. The current disruption will propel more oil and gas investment in the Western Hemisphere and Africa."

"Saudi Arabia built variety in the form of a pipeline system that now moves 7 million barrels of oil a day west to the Red Sea. Abu Dhabi built a pipeline looping around the Strait of Hormuz and plans to double capacity by 2027. France, which once depended on oil for electric generation, now relies mainly on nuclear. Japan led the development of the LNG industry to push oil out of its electric generation."

"Previous crises showed that markets themselves also contribute to energy security. They adjust faster than governments intervening to manage markets, which can make matters worse.

The U.S. gasoline lines of the 1970s weren’t the result of the crises themselves. Rather they were manufactured by government policies: price controls and clumsy, bureaucratic allocation systems that dispatched gasoline to well-supplied regions and yanked it from regions in short supply."

Global Warming or Just Getting Old?

A World Health Organization panel calls climate change a global health emergency but forgets to adjust its data for age

By Bjorn Lomborg. Excerpts:

"Heat mortality risk rises sharply with age, and Europe has aged dramatically. Since 1990, the share of Europeans over 70 has increased by 78%. Aging alone explains virtually all the observed increase in heat deaths."

"Any honest analysis of mortality in a rapidly aging society uses age-standardized death rates"

"Europe’s standardized heat-death risk has changed only marginally since 1990"

"the increase amounts to fewer than 850 additional heat deaths"

"Age-standardized data shows that cold death rates in Europe have declined by nearly 50% since 1990" 

Upward Mobility May Begin In a Smaller Backyard

See  How to Stop the Affluent From Rigging the Housing Market. NY Times editorial. Excerpt:

"The median house [in Massachusetts] costs almost $700,000, the third highest among states."

"The main reason is that Massachusetts has not built enough to keep up with its growing population and economy. Its municipalities tightly limit new home construction through a combination of onerous zoning and permitting rules."

"When it comes to housing policy, the state of Massachusetts is often a bystander, allowing town governments to impose classic “not in my backyard” policies."

"Many of the country’s strongest job markets are in coastal regions that have refused to build enough new housing." 

"The initiative [a ballot initiative to override stifling local housing rules] would prevent many towns from setting needlessly large minimums for lot sizes and effectively blocking the construction of middle-class homes."

"many Massachusetts towns require house lots to be at least 20,000 square feet, which is larger than most midsize supermarkets, like Trader Joe’s. Nationwide, only about one-fifth of homes are built on such large plots."

"The initiative would create a statewide minimum of 5,000 square feet, which is about the size of a basketball court, and bar towns from setting their own standards."

"The initiative would create a statewide minimum of 5,000 square feet, which is about the size of a basketball court, and bar towns from setting their own standards."

"Yet if the United States has any chance to reduce wealth inequality, increase economic mobility and help more people achieve the American dream, it needs significantly more housing. Blue states like Massachusetts need to be part of the solution."

"Andrew Mikula, the leader of the initiative, estimates that it would allow the construction of a few thousand new homes each year. That is far from enough new housing to meet demand, but it is a meaningful step. It should be accompanied by other changes, including allowing the construction of more multifamily homes, such as duplexes, and apartments. Other places, including Austin, Texas; Minneapolis; and Raleigh, N.C., have kept home prices down by allowing more multifamily homes than Massachusetts does."

"Unfortunately, the anger over high housing prices has also raised the possibility that Massachusetts voters will approve a different ballot proposal this fall that would be counterproductive: statewide rent control. It might sound like a solution, but it would discourage construction and renovations. Artificially low rents make it harder for developers to recoup the costs of building. Rent control has not solved the housing problems in New York City, and it will not solve them in Massachusetts. The national pattern is clear. The way to bring down housing costs is to increase housing supply. The initiative to create a statewide lot-size minimum would help accomplish this."

"Democrats . . . should address the largest cost for many families and stay true to the long progressive tradition that prioritizes upward mobility. They must bring down the high price of housing in the states they govern." 

The Environmental Defense Fund Makes It Harder to Reduce Emissions

The group has obstructed critical projects designed to move cleaner energy to consumers who need it

Letter to the WSJ. 

"I agree with the premise of Fred Krupp’s May 22 op-ed (“Natural Gas Is Escaping Into Thin Air”) that reducing methane emissions is an essential priority. It is, after all, the product that natural-gas producers are selling. Operators throughout the Appalachian Basin—America’s largest and least-methane intensive natural gas producing region—have invested billions to do exactly that.

But what Mr. Krupp fails to acknowledge is that many of the infrastructure constraints he laments are the direct result of opposition campaigns supported by his organization, the Environmental Defense Fund, and its allies.

While Mr. Krupp notes that energy companies “haven’t built the infrastructure” to bring gas to market, his organization has intervened against major pipeline projects like the Constitution Pipeline, which can safely transport abundant, low-emission natural gas into New York and New England. For nearly a decade, activist organizations have litigated, delayed and obstructed critical infrastructure projects designed to move cleaner American energy to consumers who need it most.

The result? New England consumers continue to face some of the nation’s highest winter energy prices while the region periodically turns to higher-emitting fuel oil and imported liquefied natural gas to meet demand. Imports from countries such as Trinidad and Tobago, for example, have a methane intensity four times higher than Pennsylvania-produced natural gas.

Constructive engagement on emissions is welcome. But the Environmental Defense Fund can’t simultaneously lecture industry about inadequate infrastructure while working to block the projects needed to improve reliability, lower emissions and strengthen American energy security. If we are serious about reducing emissions, the solution isn’t less natural gas—it is more modern infrastructure to deliver it efficiently and responsibly.

Jim Welty

President, Marcellus Shale Coalition" 

Gavin Newsom Wants an AI New Deal

The California Governor is tilting toward an even larger entitlement state

WSJ editorial. Excerpts:

"He suggested imitating Europe’s generous wage replacement programs and job protections. Perhaps he has missed Britain’s debate, notably of late even in the Labour Party, over why a million young men and women have left the workforce while on the government dole."

"If the government makes it hard for businesses to lay off workers, they will be more reluctant to add other jobs and hire young people with less experience. That’s why the youth unemployment rate in France is upward of 20%."

"if workers can make nearly as much unemployed as they do working, many will stay home. That was one lesson from the pandemic when Congress juiced unemployment benefits and transfer payments."

"The top marginal tax rate in California on wage income over $72,725 (including a disability payroll tax) is 10.6%."

"state’s $20-an-hour minimum wage for fast-food workers"

"California is tied with Nevada and Delaware for the nation’s highest unemployment rate (5.3%), followed by Oregon and Washington (5.2%), Illinois (5.1%), Connecticut and Michigan (5%). You don’t need AI to discern what they have in common. With the exception of Nevada, the states are run by Democrats heavily influenced by public unions." 

United Nations advisory panel junked worst-case emissions scenario

See Donald Trump, Climate Scientist: How a presidential tweet forced the media to come to terms with its faulty global-warming reporting by Holman W. Jenkins. Excerpts:

"an authoritative United Nations advisory panel quietly junked a long-misused worst-case emissions scenario known as RCP 8.5, one of the first to notice was the president"

"Piling up worst-case assumptions, including RCP 8.5, the report (from the U.S. government in 2018) showed warming nevertheless to be an affordable burden for Americans, who would be three or four times as rich by 2090 despite an adverse climate." 

"Reporters . . . ignored the numbers and filled their dispatches with adjectives indicating a doom that, hilariously, the study didn’t support."

"the New York Times [is] . . . now admitting that “news stories [i.e., its own] about climate research often emphasized results based on RCP 8.5 as a picture of what the world can expect unless countries slash their emissions, which isn’t right.”"

"Only later was a back story of justification added. In a RCP 8.5 world, all technological progress in the energy field would end. That is, with a strange exception: The technology to allow the world to quintuple its coal consumption, such as burning coal in cars."

"the world consumes more of every kind of energy, even renewables, without necessarily having any deliberate effect on emissions, though those emissions remain far below the RCP 8.5 forecast" 

‘The Permanent Problem’ Review: The Soul and the Market

Critics allege that capitalism causes spiritual poverty. They misunderstand the proper role of an economic system

By Judge Glock. He reviewed the book The Permanent Problem: The Uncertain Transition from Mass Plenty to Mass Flourishing by Brink Lindsey. Excerpts:

"One wonders if Mr. Lindsey thinks capitalism is preventing people from organizing community gardens. If their adoption isn’t universal, one struggles to understand why we should demand that people plant them. And how many in the author’s crowd have done their part to restore civilization by moving into co-housing units, spaces typically reserved for impecunious 20-somethings? Perhaps the simplest explanation for the limited impact of these practices is that they work for some people but not for others.

Similar desires for small-scale production have a long history. John Ruskin, a Victorian art critic, raged at how the division of labor broke down traditional communities and turned people into automatons. William Morris, in the novel “News From Nowhere” (1890), imagined a world in which people returned to small-scale gardening and gave up shoddy consumerism. In the 1960s and ’70s, communal radicals and intellectuals such as E.F. Schumacher, in his book “Small Is Beautiful” (1973), made similar demands."

"no critic has attacked all consumption of all goods, only the goods the critic considered unnecessary."

"The other term for making things more affordable is economic growth—something that is ineluctably in conflict with a vision of producing more goods outside the market."

"He suggests more people could “build their own housing.” Beyond the fact that this would make housing immeasurably more expensive, these personal homebuilders would still have to buy the nails, lumber, shingles and—since the author is not a Luddite—communications and electrical wiring, HVAC systems and other complex goods from the market."

"The author recommends a domestic service corps, modeled on the military, to build infrastructure"

"Mr. Lindsey assures the reader that a government redistribution of goods will help people declare independence from both government and market."