Monday, October 31, 2005

The Hills Are Alive, With the Sound of Drilling

Before I went to Austria, I heard stories about boorish Europeans accosting visiting Americans in order to spout the usual irrational anti-American, anti-Bush propaganda like the claim that the war in Iraq is all about oil. I hoped to be able to point out that if that was true and oil was found in Austria or they would have to be invaded next. The Europeans I met were entirely friendly, but it turns out that Austria has oil after all:

Alpine mountains and tasty milk chocolate spring to mind when thinking about Austria. But oil? Actually, the country is home to Central Europe's largest reserves and it has become a testing ground for new drilling technology. And the country is in the middle of a mini oil boom.


[OMV] Oil and gas production have quadrupled in the past four years, earning them a mid-table position in relation to their European competitors, with exploration underway in all five continents. Now, the company is pumping oil from the ground just outside of Vienna.

Northeast of the capital city, where the Green Veltlin grape grows and the land is mostly flat, this part of Austria has little to remind one of the Alps further south and west. But nowhere on the Central European mainland is there a higher concentration of oil production. The most important field, named after the local town of Matzen, was discovered in 1949 and was estimated at a volume of half a billion barrels of crude oil.

Reserves of this size did not quite lift Austria into the OPEC league -- in terms of worldwide oil consumption, the Austrian reserves would last just six days -- but it formed the foundation of OMV and is still being tapped with great care today. Fifty smaller fields in Austria have since been discovered and drilled, with around 750 oil and 120 gas probes extracting fossil fuels in the wine region. OMV's local production covers some 10 percent of Austria's crude oil needs and 15 percent of its natural gas consumption.

ANWR drilling opponents and Florida NIMBYs could learn something from Austria:

But over an above its relatively modest production, the Austrian oil fields are vital for another reason. The 1,500 mile long branch-like pipeline network is the only one of its kind in the global oil business. And Austria is an ultra-modern laboratory which could come up with answers to two of the most pressing questions facing the energy industry. How much gas and oil can still be found? How much scope is there for further developing existing fields?

In the fossil fuel treasure hunt, Austria is way ahead of the rest of the world in terms of efficiency and exploration. This is reflected in a remarkable production curve. Normally, one would expect a new field to chart a rapid increase in yield to begin with, followed by a so-called plateau for a number of years, before dropping off at a similar rate to the initial rise.

Austria's oil production decreased 30 years ago, but then began to rise again before leveling out in 1992 and maintaining the same level ever since. Gas production has actually begun to improve again...

Not far from OPEC's headquarters, northeast of Vienna, the seismograph trucks are massaging the earth so vigorously that the wine cellars start to shake.

Austria should be applauded for taking some responsibility for its own energy needs and developing the technological solutions that environmentalists like to pretend cannot exist.

And finally, a small piece of trivia:
Austria may not produce enough to be in OPEC, but Vienna does host the organization's headquarters.

Wednesday, October 26, 2005

So How Much for Siberia?

Perhaps I should rethink the idea of studying Russian once I have a permanent job...

Mark Steyn has a great article out, "The Death of Mother Russia." He sums up Russia's problems fairly well:

Russia’s export of ideology was the decisive factor in the history of the last century. It seems to me entirely possible that the implosion of Russia could be the decisive factor in this new century. As Iran’s nuke programme suggests, in many of the geopolitical challenges to America there’s usually a Russian component somewhere in the background.

...Russia is literally dying. From a population peak in 1992 of 148 million, it will be down to below 130 million by 2015 and thereafter dropping to perhaps 50 or 60 million by the end of the century, a third of what it was at the fall of the Soviet Union.


Most of the big international problems operate within certain geographic constraints: Africa has Aids, the Middle East has Islamists, North Korea has nukes. But Russia’s got the lot: an African-level Aids crisis and an Islamist separatist movement sitting on top of the biggest pile of nukes on the planet.


What would you do if you were Putin? What have you got to keep your rotting corpse of a country as some kind of player? You’ve got nuclear know-how — which a lot of ayatollahs and dictators are interested in. You’ve got an empty resource-rich eastern hinterland — which the Chinese are going to wind up with one way or the other. That was the logic, incidentally, behind the sale of Alaska: in the 1850s, Grand Duke Konstantin Nikolaevich, the brother of Alexander II, argued that the Russian empire couldn’t hold its North American territory and that one day either Britain or the United States would simply take it, so why not sell it to them first? The same argument applies today to the 2,000 miles of the Russo–Chinese border. Given that even alcoholic Slavs with a life expectancy of 56 will live to see Vladivostok return to its old name of Haishenwei, Moscow might as well flog it to Beijing instead of just having it snaffled out from under.

That’s the danger for America — that most of what Russia has to trade is likely to be damaging to US interests. In its death throes, it could bequeath the world several new Muslim nations, a nuclear Middle East and a stronger China. In theory, America could do a belated follow-up to the Alaska deal and put in a bid for Siberia. But Russia’s calculation is that sooner or later we’ll be back in a bipolar world and that, in almost any scenario, there’s more advantage in being part of the non-American pole. A Sino–Russian strategic partnership has a certain logic to it, and so, in a darker way, does a Russo–Muslim alliance of convenience.

The Alaska option is unlikely but intriguing (but after recent events, let's keep them out of Congress for a while).

What do you do with a giant, virtually unpopulated but resource-rich region of a dying country? Trying to keep it open to the world simply through business engagement seems unlikely after the Yukos affair. Japan should generally share our concerns, but the EU is still stuck trying to figure out itself, not to mention Turkey, the successor to the original Sick Man of Europe. The development needed by Siberia requires political and legal stability that is currently nowhere to be seen.

The Great Powers of Europe grappled with an incredibly similar problem just a century ago. Can we do better, or at least not do worse?
Western policymakers would do well to dust off their history books and reread the sections dealing with the terminal decline of the Ottomans. After the "new start" of 1908, the reform movement faltered and the government drifted. Giddy optimism among Ottoman subjects turned into bitterness and a sense of betrayal. Finally, the reform movement came to an end when the empire's former subjects humiliated it in the Balkan Wars of 1912-13. A frustrated young Ottoman officer, Enver Pasha, seized power in a coup on Jan. 23, 1913. Thirsting to restore the empire's greatness, he plunged Ottoman Turkey into World War I the following year. The "Eastern question" that dominated diplomacy in the late-19th and early-20th centuries--managing Ottoman decline--was finally answered with the dismemberment of Enver's dream state in the world's first global blood bath.
So how about this - instead of rebuilding an underwater city, let's buy Siberia. It's big, and it's above sea level.

For more on the economic problems and promise of Siberia, check out "Siberia: Russia's Economic Heartland and Daunting Dilemma."

Monday, October 24, 2005

Don't Eat Your Piggy Bank

From Australia's The Age:

British banks are banning piggy banks because they may offend some Muslims.

Halifax and NatWest banks have led the move to scrap the time-honoured symbol of saving from being given to children or used in their advertising, the Daily Express/Daily Star group reports here.

Muslims do not eat pork, as Islamic culture deems the pig to be an impure animal.

Salim Mulla, secretary of the Lancashire Council of Mosques, backed the bank move.

"This is a sensitive issue and I think the banks are simply being courteous to their customers," he said.

How about a warning label: "Your piggy bank is not actually made of pork, but if you are concerned about the possibility, remember that you probably should not eat it."

However, the move brought accusations of political correctness gone mad from critics.

"The next thing we will be banning Christmas trees and cribs and the logical result of that process is a bland uniformity," the Dean of Blackburn, Reverend Christopher Armstrong, said.

"We should learn to celebrate our difference, not be fearful of them."

Khalid Mahmoud, the Labour MP for a Birmingham seat and one of four Muslim MPs in Britain, also criticised the piggy-bank ban.

"We live in a multicultural society and the traditions and symbols of one community should not be obliterated just to accommodate another," Mr Mahmoud said.

"I doubt many Muslims would be seriously offended by piggy banks."

I applaud Mr. Mahmoud for showing us that one special interest group does not speak for all Muslims. It may also be worth noting that Jews cannot eat pork either, but this apparently was never enough to abolish the piggy bank.

Update, Oct. 25: I forgot to note yesterday that the Muslim prohibition on interest could possibly keep devout Muslims out of Western banks in the first place, rendering the bank-eating issue moot.

Friday, October 21, 2005

Federalism at Work

From the Spokesman Review:

Spokane County Sheriff Mark Sterk endorsed a plan... to raise $6.5 million a year for mental health services by increasing the local sales tax by 0.1 percentage points.

Sterk... went so far as to say that he would urge Spokane County commissioners to enact the tax even if the Nov. 8 advisory vote fails to pass public muster.

"We have no other resources to plug these people into, and that's just flat wrong," Sterk said of the current situation.

Proposition 2 asks voters if they want the tax – 10 cents on every $100 purchase – for the next three years.

Commissioners don't need voter approval, however, to raise the tax. State law allows the county to raise the tax to fund mental health and substance-abuse treatment.

Mental health providers say the tax money is necessary to help fill an estimated $7.5 million shortfall in mental health care funding caused in part by fewer federal Medicaid dollars.

This is the kind of local government responsibility that the Anti-Giuliani made us yearn for.
(S-R) "As we've been working with the state to point out the financial dilemma we're in, one of their first comments is, 'Why don't you take advantage of the authority the Legislature has already given you?' " said Commissioner Todd Mielke.
And so they did, mostly. There's even a "Yes for mental health" campaign that gives more details, but raises some important questions.

Spokane County Commissioners... are considering a small (1/10 of one percent), temporary (three years) sales tax to be used exclusively for mental health programs.

These local dollars will stay in Spokane County and be used to offset recent large cuts in Federal mental health funding.

Two questions need to be answered though:

  1. Why are there mental health funding cuts? If they are simple spending reductions that can be tied to tax cuts, this is a perfect example of federalism at work. When federal tax cuts are followed by federal spending cuts that affect local services, it is entirely appropriate for local governments to raise local taxes to make up the difference (assuming, of course, that the spending was appropriate in the first place). That way local services are locally controlled - and it also works against the gimme-pork mentality of so many Americans (including 82 U.S. Senators).

  2. Why make it temporary? If mental health funding is so crucial, shouldn't it's funding source have more permanence? Will all be cured in 3 years or will you be seeking a state or federal bail-out again? How about standing up, being an example, and saying that Spokane County can take care of it's own.
The federal government does not exist to remedy every imaginable problem and couldn't do it if it tried. Let's have more local governments follow the example of these three Republican county commissioners and solve problems instead of whining about them.

Not 125 Miles From My Back Yard!!!

From Fox News:

In an about-face, Gov. Jeb Bush is backing a plan allowing limited exploration for oil drilling off Florida's coastline.

"My position is if we can get an assurance to extend a 100- to 125-mile swath from Pensacola all the way to Jacksonville to protect our beaches, then we ought to try and get it. We don't have that today," Bush said.

While the current moratorium on offshore drilling is set to expire in 2007, there is no law banning drilling entirely. Opponents of the governor's plan on both sides of the aisle would rather see an outright ban on drilling for the entire eastern Gulf of Mexico.

" would hurt Florida's economy by messing up our pristine beaches," said Sen. Bill Nelson, a Democrat.

But drilling has been permitted for decades off other parts of America's coastline, such as Alabama, Mississippi, Louisiana, Texas, Alaska and portions of Southern California. One oil industry expert says that after two seasons of hard-hitting hurricanes, it's time Florida contributed its share.


According to proponents, there is enough untapped, natural gas in the Gulf to power as many as 60 million American homes for the next hundred years. But opponents say the risk of oil spills and pollution could damage Florida's tourism-driven coastal economy.

Drilling opponents are guilty of the same NIMBY approach that people like Ted Kennedy and use to oppose development of wind power off the coast of Cape Cod:
"Mother Nature dictates where you site a wind farm, and Nantucket Sound has some of the best wind resources in the United States," says Gordon. "[It] is an optimal site to locate a wind farm that can produce at peak output all of the electrical requirements of the cape and islands, without any pollution emissions, without any water consumption and zero waste discharge."

...The campaign to stop the wind farms was started by Cape Cod merchants and wealthy landowners. It's also opposed by almost every town government. Sen. Ted Kennedy, who has a home overlooking the proposed wind farm, also opposes the project.
The one notable difference is that any project off the Florida coast would appear to be at least twenty times as far from shore as the Cape Cod windmills - and even the windmills would be so far away that they would appear to be no more than a half-inch tall (click here for graphics).

If an obsession with tourism is considered more important than energy production, this knee-jerk prohibition on the development of needed energy resources should have consequences. Florida or its consumers should be charged a premium for any imported oil or gas that could have been replaced by domestic production. The proceeds can be used to benefit states that are willing to try for at least some modicum of energy self-sufficiency but are still stuck paying the higher prices caused by nonproduction.

Update, Nov. 6th: Although penalizing anti-production states might be attractive, it may be barred by Article I, Section 8 of the U.S. Constitution - the plain text of which is ambiguous. The better solution remains to allow energy production as federal policy regardless of the demands of neighboring states. In Florida's case, drilling would take place far outside of state waters.

Tuesday, October 04, 2005

Are You Paid by the Minute?

In yet another example of an overreaching federal government, the first case before the Supreme Court this session is a waste of time bickering about an inconsequential amount of time:

WASHINGTON - It may not have been the type of high profile, landmark litigation that makes history, but John Roberts' first case as the 17th chief justice of the U.S. Supreme Court involves workers' wages at an Eastern Washington meat processing plant.

Roberts' inaugural case focuses on whether more than 800 workers at the Tyson Fresh Meats Inc. plant in Pasco should be paid for the three minutes it takes to walk to the production line from a locker room where they put on required protective clothing.

A district court judge has awarded more than $3 million to the workers who brought the class-action lawsuit.

At typical trial lawyer rates, that's $1 million for the lawyers and an average of $2500 per worker. But before the trial lawyers get their cut, they should have to show that the workers were working every second of the other 99.4% of the workday. Not only is the amount trivial (no one would have noticed if wages were 0.625% lower to account for a changed policy), but why should the federal government or the courts micromanage employment to this extent?

How about protecting employers from having to pay for snack breaks, coffee breaks, water cooler breaks, bathroom breaks, smoke breaks, staring at the wall breaks, and gossip breaks? Or to get closer to the example at hand, how about a class action lawsuit by employers against employees for even the most minute failure to work at one hundred percent productivity one hundred percent of the time?

Saturday, October 01, 2005

Whose History Should Trafalgar Square Honor?

LONDON (AP) - The latest battle of Trafalgar is getting ugly. Mayor Ken Livingstone wants to erect a statue of former South African President Nelson Mandela in Trafalgar Square alongside monuments to British military heroes. City officials oppose the idea, and in a showdown this week, one of Britain's most respected sculptors dubbed the proposed Mandela statue "mediocre." Livingstone compared that sculptor's work to a "dog mess."


Livingstone wants Mandela at the heart of the piazza, already dominated by another Nelson. A statue of 19th-century naval hero Adm. Horatio Nelson stands atop an 185-foot-tall column, and the square itself is named for the admiral's 1805 victory over the French and Spanish fleets.

Also in the square are statues of King George IV and Victorian generals Sir Henry Havelock and Sir Charles James Napier.

Joining the League of Dishonorable Mayors with Ray "I ain't got no busses" Nagin, we now have Ken "What do generals have to do with history?" Livingstone:
"I have not a clue who two of the generals there are or what they did," he said.
The Westminster Council (Westminster being the relevant borough within Greater London), on the other hand, has a reasonable solution - placing a statue in a more relevant location:

Conservative-controlled Westminster Council has rejected Livingstone's plans for a 9-foot-tall bronze statue on the square's north terrace, outside the main entrance to the National Gallery.

The council says its opposition is practical, not political. It does not like the look of the proposed statue by sculptor Ian Walters, which depicts Mandela clad in a characteristic loose-fitting shirt, his hands raised as if in animated conversation. It also wants the monument placed in front of the South African embassy on the eastern edge of the square.

Paul Drury, a consultant for conservation group English Heritage, which also opposes the mayor's plan, has said that placing an "informal, small-scale statue" of Mandela alongside military heroes "would be a major and awkward change in the narrative of the square."

Mr. Livingstone has yet to give a good reason why a statue of a foreign political leader who effected change in a distant former colony should disrupt a British monument to British military history. In addition to the Westminster Council's suggestion, more appropriate locations surely exist - including Parliament Square, which currently features statues of such foreign statesmen as Abraham Lincoln and Jan Christiaan Smuts.

Don't expect Mr. Livingstone to let history stand in the way of rewriting history:
Shortly after his 2000 election, Livingstone suggested replacing the military statues with figures "that ordinary Londoners would know."
The easiest way to rewrite history is to delete it.

For a first-person analysis of the situation in London, feel free to donate money and/or frequent flyer miles by using the e-mail or PayPal links on the right. Offers of employment or employment advice are always welcome.