American Elephants


The Next Energy Frontier: It’s Not Offshore Wind! by The Elephant's Child

I posted this map of shale formations in the U.S. about ten days ago.  Note the Marcellus Shale, the biggest of the red areas. The subsurface area comprises about 50 million acres, and the economic outline  encompasses an area of about 18 million acres. That’s big.

The United States consumes 22 trillion cubic feet (TCF) of natural gas per year — estimates for recoverable reserves are that it will produce something in the neighborhood of 489 trillion cubic feet.  Recent reported recoveries suggest that this may be very conservative. The Marcellus will provide more than 20 years of consumption for the entire country, as well as more than 100,000 new high paying jobs which are being created in an economically depressed rural area of Pennsylvania.

American natural gas was in long term decline prior to the advent of significant production from the new Shale programs. The rise of production from the Shale Fields beginning in 2006 changed everything, and we are now seeing increasing production, a halt to imports and decreasing natural gas prices. What’s not to like about that?

U.S. Monthly Gas Production

A few encouraging facts from Gregory R. Wrightstone. You might want to keep them in mind when you hear the pronouncements  from the EPA, Interior, DoE, and all the varied bureaus and offices of the Obama Administration.

The Obama administration recently told Congress that accelerated permitting and financial incentives have helped to fuel a booming interest in developing wind, solar and geothermal power on public lands, but continuing and future development will depend on a strong commitment and dependable incentives from Congress.

Read that again.  Because the government is giving away permits and grants and startup money people are interested in developing  inefficient power, but if Congress doesn’t keep supplying the commitment in the form of loan guarantees, the grant program, and permitting that is deliberate, careful and on time — whoa.

Wasn’t there something about permitting in the Gulf of Mexico that is so far overdue that a federal judge is having to issue demands to Salazar to act within 30 days or face the consequences?



What Do You Know About Picking Blueberries? by The Elephant's Child

American ingenuity comes up with solutions.  I find new kinds of machinery fascinating. I don’t know anything about the business of commercial blueberries. I have picked only a very few blueberries, but I have picked lots of huckleberries which are smaller (and better). It takes a long time to fill a pail.  My mother remembered coming down with her sister from a huckleberry patch on the mountainside with pails full of berries, and an old prospector looked at their pails full of huckleberries and his jaw dropped, and he said  in awe “One by one, by God!”

Regulations come down from governments, federal and state.  You shall have such and such kind of housing for pickers, this is the minimum wage, you must withhold this amount for Social Security and provide the pickers with health care, and they are only allowed to work these hours, and on and on.  Most growers prefer to treat their workers well, and most regulations are made by bureaucrats who have no idea of what a blueberry field is like, but they mean well.

And often, at some point, the regulations coming from the well-meaning bureaucrats make it impossible for the grower to make a profit.  He has expenses, wages, insurance, equipment.  Profit is the only reason why someone stays in business.  If there is no profit, he finds something else to do with the land.  Leftists often think that there is something wrong with profit, but that is only ignorance speaking.

So, at some point, advanced machinery becomes a cost-effective solution.  Think of all the unintended consequences in this story.  Kindly bureaucrats want poor field workers to be well-treated,  The grower wants his crop harvested at a cost that allows him to make a profit so that he can afford to have a crop the following year. When a machine becomes more viable than pickers, many pickers are unemployed, but more skilled workers are employed in the factory that builds the machines, The kindly bureaucrats have no pickers to care for and see that their working conditions constantly improve, so they too become  redundant.

Because such machinery is expensive, only large operations can afford it, so it puts pressure on smaller farms where picking must take place in the old, highly regulated way.  Think of the flow of unintended consequences, and how many lives are affected. Do the smaller growers sell out, form a co-op with other small growers?  Do they start marketing their berries as organic, or hand-picked? Or do they establish a jam and jelly operation right there?  Or does he grow something else entirely?  Whatever it is will be regulated as well.

As I said, I don’t know anything about the blueberry business, but speculating about it makes you think about lessons that apply to other circumstances that we don’t know very much about either.  Interesting machinery isn’t it?




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