Updates
December 25, 2014:
Russia vs the US, the oil story and chess.
December 23, 2014:
Russia, four ex-Soviet nations sign economic pact.
September 1, 2014:
Putin orders construction of that huge natural gas pipeline between Russia and China to commence. This order comes right at the height of the Ukraine-Russia-EU energy story.
August 7, 2014:
Putin bans agricultural imports from EU, US and other countries that placed sanctions on Russia.
Specifically:
The Prime Minister Dmitry Medvedev said at a televised cabinet meeting
yesterday that Russia’s retaliatory ban covers all imports of meat,
fish, milk and milk products, fruit and vegetables from the United
States, the European Union, Australia, Canada and Norway. It will last
for one year.
Checkmate.
July 30, 2014: it's Putin's move. The US/EU announced new sanctions.
Morgan Stanley analysts think Putin will cut off natural gas to Europe.
July 23, 2014:
sounds like the Europeans are cheating; Putin is on to them; willing to "watch and wait"; not aggravate things at the moment.
It's possible Putin's threats are making Europe think twice about doing this; caught at "cheating," the Europeans are reducing the amount of natural gas they are providing the Ukraine.
July 13, 2014:
Mr Putin and his chess games -- the Ukraine, the Mideast, and, now, Central America.
July 8, 2014: if you scroll down
at this post, one can see how Putin continues to win this chess match.
July 3, 2014: ever since I started comparing global politics between Vladimir Putin and Barack Obama to a chess game (now two chess games: the Ukraine AND Iraq), readers have been sending me links to show how "right" I was. This quote was attributed to Mr Putin; whether it is accurate or not, here it is:
Negotiating with Obama is like playing chess with a pigeon .. the pigeon knocks over all the pieces, craps on the board, and then struts around like it won the game." -- Vladimir Putin, undated, unsourced.
Later, 8:24 p.m. central time: readers may have noticed I've reported that a fair number of energy companies have recently declared increased dividends or dividends for the first time in quite some years. It was just something I noticed; no statistical analysis to see if accurate. Interestingly, the lead story in this week's issue of
Bloomberg Businessweek, "Choosing Profits Over Productivity," which according to the writer/editor:
"Bottom line -- productivity growth is stalling while companies spend their $2 trillion cash hoard on buybacks and dividends." Wow: saying exactly what I thought I was seeing. It's a nice two-page article. The authors spend a fair amount of time discussing the obstacles or the headwinds businesses have had to contend with the past several years ... and yet, the authors do not mention the #1 headwind: ObamaCare. The 800-pound gorilla.
Later, 6:09 p.m. central time: I inferred from a reader's note (that I received in response to the original post below), that Mr Obama walks on water, and that I should stick to science. To those who think I should stick to science I refer you to
the cover of the most prestigious general "science" magazine out there, The National Geogrpahic. Ground to torch, the Statue of Liberty stands 305 feet, one inch high. I am not aware of any "scientist" who argues that the water level will rise as high as depicted on that cover.
Original Post
Presidents come and go. It's hard to believe we won't have a more
pro-growth president following the current debacle five years from now. Even Hillary with half-a-cerebrum could do better than what we've been through the past six years. [Don't take this out of context: perhaps President Obama has been the best president this country has ever had; I don't know; only history will tell. All I know is he does not appear to be a "pro-growth" president, and some folks would consider that "good." So this is not a rant about President Obama. The comments have to do with the future of energy despite who is in office.]
Talk about a wake-up call from the linked article (that article loads very, very slowly for me; it can also
be found at The Independent):
The UK is set to run out of its oil, coal, and gas supplies in a little over five years, a new report had claimed.
The research from the Global Sustainability Institute has said that
other European countries are facing similar shortages and that many
nations will become entirely dependent on energy imports in the next few
years.
The UK has 5.2 years of oil remaining, 4.5 years of coal
and three years of gas before completely running out of fossil fuels,
says the institute, which is based at Anglia Ruskin University.
France
is reportedly even worse off, with less than a year’s worth of fossil
fuels in reserve, while Italy has less than a year of gas and coal and a
single year of oil.
"The EU is becoming ever more reliant on our
resource-rich neighbours such as Russia and Norway, and this trend will
only continue unless decisive action is taken,” said Dr Aled Jones, the
director of the institute.
"It is vital that those shaping Europe's future political agenda understand our existing economic fragility.”
It's very possible (hopefully) we will look back on the two lost decades (2000 - 2020), as the period when the US oil and gas industry was getting its ducks in order, despite all the obstacles Washington (DC) put in front of the industry during the terrorist-decade (2000 - 2008) and the anti-US-growth decade (2008 - 2016). By getting its ducks in order, I mean building the infrastructure needed to maximize its massive energy resources.
Back to that article about Europe running out of fuel. If one was running out of energy resources, wouldn't a responsible government want to maximize other alternatives? This speaks volumes about the "practicality" of renewable energy:
The Government has recently announced cuts in its subsidies for
large-scale solar farms from next April, two years before they were
projected to end, and the Conservatives have said they will not
subsidise new onshore wind farms if they win the 2015 general election.
If
the London Array (off-shore wind) is such a success, why don't the Brits want to replicate it?
It speaks volumes about the success of the Bakken laboratory:
Ministers
are instead hoping that a combination of shale gas - extracted by
fracking - and new oil finds in the North Sea will be able to plug the
coming deficit.
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A Note to the Granddaughters
This may be one of the funniest things to have occurred to me personally with regard to the blog.
As regular readers know, my life revolves around our two granddaughters. My commitment to them as a grandfather/caretaker/nanny/mentor/whatever is 24/7.
Because of the older one, I am re-learning physics, math, biology (particularly Linnaeus classification) and astronomy (to some extent).
Because of the younger one, I am learning to play the guitar and enjoy (sort of) soccer.
And, because of both of them, but mostly due to the younger one I am learning to play chess again.
The other day I used chess as an analogy, writing:
The bigger story, of course, is that the Crimean was part of a huge chess game.
The chess game began with Putin's brilliant handling of the Russian
winter Olympics, an opening "knight" move to "F3." The Crimean was a
pawn. Eastern Ukraine was perhaps another knight. Latvia is a pawn en passant.
Losing Germany as an ally on sanctions, that's worth at least a loss of
a knight for the US.
The Chinese-Russian natural gas pipeline was at
least a loss of a rook for the United States, possibly even worth the
queen. The loss of Russian rocket engines was a bishop loss for Russia,
but that was more than made up for by the Chinese-Russian hegemony,
worthy of castling early.
I really didn't know much about chess strategy, just the basic rules on how to play the game.
Fast forward one week. Today I am in the Southlake, TX, community library. I have just finished re-reading
Mike Reynolds' biography of Ernest Hemingway. I re-stock it and then look for another book to read. On "display" by the librarian I pick up Nate Silver's
The Signal and the Noise: Why So Many Predictions Fail -- But Some Don't.
Until I picked up the book I knew nothing about Nate Silver. According to the book jacket, "Nate Silver is a statistician, writer, and founder of the
New York Times political blog
FiveThirtyEight.com. Silver also developed PECOTA, a system for forecasting baseball performance that was bought by
Baseball Prospectus. He was named one of the world's 100 Most Influential People by
Time magazine."
In chapter 9, Silver talks about statistics, probability, and the "rage against machines." The chapter deals with computers programmed to play chess. He spends several pages on IBM's Deep Blue computer taking on world chess champion Garry Kasparov, the top-rated chess player in the world from 1986 until his retirement in 2005. Or more precisely, Garry Kasparov challenging IBM's Deep Blue.
Now, remember, my notes written a couple of days ago: "The chess game began with Putin's brilliant handling of the Russian
winter Olympics, an opening "knight" move to "F3."
Here on page 270 of Silver's book, the first time I had ever opened this book:
Kasparov's goal, therefore, in his first game of his six-game match against Deep Blue in 1997, was to take the program out of database-land and make it fly blind again. the opening move he played was fairly common; he moved his knight to the square of the board the players know as 'f3.'
Wow. I did not know that this particular opening move "was fairly common." The only reason I used it as an example was because it derived from the three lessons I learned from reading about chess while teaching our younger granddaughter (three lessons she understands well):
- control the four center spaces of the board
- get one's knights into action quickly
- castle early
But I have to say, I nearly fell off my chair in the library when I came across that passage in Silver's book.
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By the way, reading Nate Silver's book has a much more practical benefit for me. I often remind folks that the Million Dollar Way blog is not an investment site. No one should make any investment decisions based on anything they read in the blog. For me personally, I never planned on using the blog to help me invest. But somewhere along the line two things evolved: first, it became clear that to understand the Bakken, one had to follow the money; and, second, to follow the money, meant blogging and reading about the Bakken day in and day out.
To insure this does not become an investment site, I will end it there.
