Understanding cheap oil

On November 28, following the OPEC (Organization of the Petroleum Exporting Countries) meeting, oil proceeded to plunge over 10 percent. At the meeting, OPEC decided not to cut production, in order to match demand, but continue to overproduce and drive the price lower. OPEC by its very nature is a cartel, a group of companies conglomerating their vast resources and market shares to make output decisions that affect the market as a whole. A cartel may not have full influence over the price of a good or commodity but can greatly influence its general price level in order to serve the interests of the group. OPEC is made up of many diverse countries, ranging from Iran and Saudi Arabia to Venezuela and the UAE. These countries encompass many geographic, economic, and cultural differences, but are driven to cooperate for their economy’s major export, oil.
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On November 28,  following the OPEC (Organization of the Petroleum Exporting Countries) meeting, oil proceeded to plunge over 10 percent. At the meeting, OPEC decided not to cut production, in order to match demand, but continue to overproduce and drive the price lower. OPEC by its very nature is a cartel, a group of companies conglomerating their vast resources and market shares to make output decisions that affect the market as a whole. A cartel may not have full influence over the price of a good or commodity but can greatly influence its general price level in order to serve the interests of the group. OPEC is made up of many diverse countries, ranging from Iran and Saudi Arabia to Venezuela and the UAE. These countries encompass many geographic, economic, and cultural differences, but are driven to cooperate for their economy’s major export, oil.

Oil is an essential commodity for every nation on the planet. With major changes in price, its effects are sure to be felt. In the past six months oil has fallen from over $100 per barrel to $61 per barrel. This sudden drop is the culmination of several things, a strong US Dollar, geopolitical tensions, increased non-OPEC production, and OPEC’s reaction to increased production. By assessing these four factors, one can comprehend why oil has fallen and just how low it might go from here.

The US Dollar has been on a bull run since July. As the value of the dollar increases, the price of oil measured in US dollars will decrease, as long as the value of oil does not appreciate more than that of the dollar. This was part of the reason why the price of oil has been gradually falling since this past July.

Geo-Political tensions are also a reason for falling prices. The US relationships with both the Saudi’s and the Russians are key when examining the political effects on economies. US relations with Saudi Arabia have become strained, which is an entire topic in itself, and relations with Russia have become tense as a result of political upheaval in the Ukraine. Oil can be wielded as a weapon and political tool against Russia. Oil and gas exports make up 68% of the country’s total exports. So by slicing oil prices, Russia’s oil and refining companies, as well as their economy, are hit hard.

A major factor in determining global oil supply is the production from non OPEC members. The amount of barrels produced per day by non OPEC members has been growing steadily since 2000. Most of this growth can be attributed to the United States, and its surge in production. This increased oil drilling has come from new startups in the North Dakota oil boom and from offshore drilling. This increased supply is not being exported but is instead used by consumers in the US. This cuts the global demand for oil and makes business less profitable for other oil-producing countries. The domestic oil boom in the US can be attributed to the high price of oil from foreign sources. This made it profitable to bear the high start-up costs of more oil wells in the US. But as the supply on the market increased and the demand began to decrease, the US, and OPEC have historically called on Saudi Arabia to slow its production in order to keep the global price high. This is at the expense of Saudis and consumers abroad but to the benefit of other oil-producing countries.

This is where the reaction by Saudi Arabia and OPEC have had so much to do with the low price of oil. The burden of an artificially high price of oil was placed squarely on the backs of the Saudis, and they found it in their best interests to dump off that burden, even if it meant plummeting prices. Since Saudi Arabia is a major oil producer and part of an oligopoly, it has a large part in the setting of the international price of oil. If they were able support high global oil prices, they can easily do just the opposite and drag them down. This strategic move shifts the burden from themselves, to new oil producers that caused the increase in supply the first place, this being the US producers. These new producers were created because of high oil prices, and still have enormous start-up costs that need to be paid off. By being critically dependent on high oil prices, US producers have nowhere to turn in this low-priced market. They can’t export the oil from the US, it’s against the law, so they either cut production like the Saudis once did or suffer the devastating consequence of cheap oil on their businesses. One can see these effects in the sector of energy stocks, which have seen very large declines in the past couple of months.

This move is considered strategic by the Saudis because it directly targets US producers but attempts to not injure its engineers. OPEC nations incur cheaper costs to produce oil because their industry has already been established and the cost of labor is cheaper. This allows these countries to sell oil down to below what US producers can and still manage to turn a profit. A price drastically low, say $40, as some analysts have poorly estimated, would gouge Saudi Arabia’s economy. OPEC and Saudi Arabia can carry out a pinpoint attack on the excess US producers by directly sustaining a moderately low price of oil. It is in the interest of OPEC to allow the price to reach this low point where it hurts US producers, but doesn’t simultaneously destroy its own countries’ exports. An extreme price of $40 per barrel would be nonsensical for OPEC members as it is not sustainable and would put them out of business in the long run. It’s a huge balancing act for OPEC. Fortunately, this magic oil price is calculable. Analysts, who have taken the above factors into calculation and applied the costs of oil production in specific nations, have found that the sweet spot is right around $60 per barrel. The hope for the Saudis and OPEC is that this price drop will force US producers to cut production and restore the global price back to a higher level.

Analysis by Andrew Gehrig


Spain at the vanguard of digital currencies

Spain is at the vanguard of digital currencies
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Somewhere in an Anarchist occupied fortress in Barcelona , resides Amir Taaki, a world renowned Cypto-Anachist named one of Forbes top 30 tech entrepreneurs under the age of 30.

Amir Taaki hides out with a merry band of progressive software developers that work under the name Unsystem, developing a project that is both politically incendiary and a potential economic and financial game changer on a global scale.

The project, entitled Darkwallet, is an off the grid money transfer software which uses the Cypto-currency BitCoin to transfer funds anywhere in the world obscuring the user´s identity and circumnavigating central established banking systems.

Darkwallet has the ability to cross frontiers, such as where investment and financial transactions between countries such as the US and Iran are prohibited due to political sanctions.

Amir Taaki and his Unsystem group have found a way to traverse these sanctions by cutting out the middle man, allowing a free market flow of funds. The software works like an anarchist version of Western Union without the exchange rates. The recent release of the software has got governments scrambling to impose regulations and legislation.

However, Darkwallet is a way to move these funds in a completely surreptitious way by grouping together the transactions to a point where they become completely untraceable using a concept called “trustless mixing.”

The advent of digital Crypto-currencies has been a steady and controversial rise which has gradually gained a footfall hold in the foundations of the world economic infrastructure. Amir Taaki from his base in Barcelona has been a global pioneer in establishing the digital currency as a potential and more stable alternative to the current monetary situation.

BitCoin came into existence in 2008, known officially as a Cypto-currency. The word Cypto is based on the cryptography branch of mathematics and signifies the process of writing and programming electronic codes.

BitCoin was created by a mysterious software developer based in Japan that goes by the name Satoshi Nakamoto who had the idea of creating a de-centralized digital currency that does not rely on market fluctuations; with an infrastructure that works using peer to peer technology. In other words instead of using a centrally established computer system, Bitcoin uses individual computers so that every BitCoin holder provides a framework for its existence. To be able approve and solve the complex mathematical transactions needed to support a digital currency, The currency uses a mining process which at first used individual computer processors but with the growth of BitCoin it has since evolved into complex sophisticated operation, where businesses have grown up using entire farms of computer chips to process the transactions.

The movements of BitCoins are electronically recorded in a public ledger known as the Block-Chain which makes sure the transactions are legitimate and the currency cannot be double spent. All transactions are signed off digitally using a private key which belongs to the BitCoin owner which is stored in their virtual wallet on their computer hard drive or smart phone.

BitCoin’s rise to fame has been a controversial one; from the The Silk Road, an internet eBay style market place that allowed people to clandestinely buy and sell drugs and arms via secure web browsers; from here it gained infamy as a quick and easy money laundering tool.

The Silk Road website at its height had an annual turnover of 20 Million dollars. The users would simply purchase the BitCoins in a perfectly legal way via exchange websites. The Silk Road creators have since found themselves on drug trafficking and murder for hire charges, since the closure of the online market place website a multitude of similar sites have sprung up in its place. One such is OpenBazaar which was created by Amir Taaki and his Unsystem team, which does not use centralized servers and therefore cannot be traced and shut down by the authorities. CytoCoin News, an online independent BitCoin news source called it “The unstoppable evolution of the Dark Net.”

Referring to the web space where these pages exist, they need private secure web browsers to access. Only 0.03% of the internet is openly searchable. The rest belongs to the Dark Net.

Despite its infamous roots, BitCoin continues to grow exponentially. In Barcelona a local startup company named BTC Point founded by Borja Rossell and Albert Caus has created one of the world´s first two-way BitCoin cash machines. Which means users can buy and sell BitCoin with local currency.

The ATM works in a way so that people can buy and sell BitCoin with a limit of 2,500 Euros or depending on the amount in amount currently in the machine.

Their first installation was a prototype cash machine installed in Madrid in April 2014 which proved a success and since then the company has gone from strength to strength, Producing ATMs which have been shipped from Washington DC to Equatorial Guinea.

Borja tells me “BitCoin is still in its early stages, the one great strength it has is that it cannot stopped because there is no way lock it down, people will have no choice to but to accept it.”

Borja and Albert are currently pursuing an idea which is already implemented in Madrid called Boulevard BitCoin.

Boulevard Bitcoin is an enterprise to get businesses to accept digital payments. Calle Serrano in center of Madrid has been the starting point of this initiative, more business have increasingly jumped on the bandwagon with more than 20 businesses now accepting payments.

Just recently the Spanish Bank Bankinter invested in a Spanish based Startup Company named Coinffeine that provides an online BitCoin exchange for people wishing to buy and sell their BitCoins, the platform acting as a negotiator for the exchange.

The promotion of BitCoin as an alternative currency has been increasingly at the forefront of global business.

The former executive chairman of Bitcoin Jon Matonis submitted an open letter to Barcelona Mobile world congress in 2014 describing Bitcoin as “Money without Government.”

He went on to say, “BitCoin is a survivable Digital Scarcity. In just five short years, BitCoin has unequivocally demonstrated that we don´t need kings to coin our money and we don´t need central banks issuing debt-based paper notes and deciding what our money should be. Money is anything we collectively determine it to be.”

Banks by large have yet to fully acknowledge the potential of Crypto- currencies while BitCoin still remains the dominant market leader, it is not alone.

BitCoin still reels from the stigma of money laundering and drug association. Some sceptics have referred to it as little more than a pyramid scheme or have pointed out the fact that there are Orwellian connotations to a digital currency. However you see it, BitCoin is a potential stake holder as a future currency and could bring stability to an unfavorable economic climate.

By Anthony Bain

Is central bank stimulus actually good for you?

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It was announced in November that the Japanese Central Bank would ramp up its Quantitative Easing Program (QE), bringing its yearly expansion of the money supply up to $682 billion. The end of the United States’ QE program was very well documented, as was the substantial rise in asset prices which were a result of the program. The European Central Bank also is leaning towards a similar policy. QE was touted as a huge innovative success for the Federal Reserve, even though many of its effects are still left unmeasured.

Quantitative Easing is an indirect expansion of the money supply by the central bank. The bank’s objective is to lower interest rates, increase asset prices, stimulate demand and boost economic growth. By the very nature of expanding the money supply, QE can do all but one of those things rather easily. Buying up bonds and other securities immediately decreases interest rates, the effects of the government spending spill over into other markets and when exacerbated by the decline in value of the currency that all assets are measured against, asset prices immediately soar. This jump in asset prices theoretically creates the wealth effect, which shows up as increased spending by those whose assets recently appreciated.

Conversely, the boost to economic growth is under debate. Some even suggest that it undermines economic growth for the overall economy and most citizens. As an intrinsic result of the QE, the purchasing power of the currency decreases dramatically. Therefore prices rise accordingly. In the United States for example, when using the CPI to calculate inflation, one would see that since 2007, average prices have risen 15%. This 15% figure excludes food and energy, which happen to be a very large part of a family’s budget. So the real amount of inflation is much higher. Wages have remained relatively stagnant, and many say that the average standard of living has gone down. This is the undermining of purchasing power while providing the illusion of economic growth. Inflation can lead to false economic growth, because rising prices lead to larger dollar figure corporate earnings and temporarily better economic data but when it’s all said and done, the structural problem may remain the same.
Even more alarming are the implications for Non-US residents. One would assume that money printing in the United States would not affect people abroad, but that may be as much of a fallacy as guaranteed economic growth from QE.

People all around the world have had to face the effects of a cheaper dollar. Though the dollar has been on a bull run over the past months, due to other countries cheapening their currencies, it has lost more than half its value since the 1980s. Since the US dollar is the primary trading and reserve currency, changes in its valuation has direct impacts to foreign economies. Rises in the prices of food, and other basic necessities have led some countries into uncertain times and even in extreme cases, revolutions. As the issuer of the world reserve currency the United States must keep the interests of other countries at hand when deciding whether to debase the currency. In 2012 Brazilian President Dilma Rousseff affirmed that the world is engulfed in a currency war that “cannibalizes emerging markets”, and the poor.

Analysis by Andrew Gehrig

Lowering interest rates in China lift global markets

Lowering interest rates in China lift global markets
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World markets rose following China’s interest rate cuts and comments made by the European Central Bank. China’s Central Bank has cut the interest rate on annual deposits to 2.75 percent from 3.00 percent in an attempt to revive the economy. During the first half hour of opening trading, the Dow Jones industrial average rose to 1.00 percent to new record high at 17,866 points.

In Britain, the mining sector rose three to five percent, driven by economic growth expectations–based on sales of raw materials to China. The six largest rises on the index were for companies in the oil and mining sectors. The Australian and New Zealand dollars also rose, reflecting their adoption on trade with China. China’s rate cut, made Saturday, is the first since 2012 and it has worked.

China also will cut interest on loans for a year to 5.6 from 6.00 percent. Chinese economic data last Thursday showed a drop in industrial output for the first time in six months. China’s growth has dropped to its lowest level in five years (7.3 percent) in the last quarter. The Chinese Central Bank has allowed flexibility for banks through which it can move interest rate on deposits to 1.2 percent of the standard rate instead of 1.1 percent. This is in part a measure to recompense savings owners in China for the cut on interest on deposits.

Meanwhile, European Central Bank (ECB) President Mario Draghi said, “This moves will increase pressures to stimulate the European economy, which faces troubles.” Draghi noted that he is ready to take large-scale actions to stimulate the economy, including buying assets, to make sure the European economy does not face a new crisis. He added, “What we must do is lift inflation expectations as quick as possible.”

Inflation rates in the Euro zone reached 0.4 percent last month and are well below the inflation target which the ECB estimated–2.00 percent. Draghi said that the ECB, if current efforts fail, will expand channels through which it can intervene to remedy the situation. Many experts consider this as an implicit declaration that the ECB will buy government bonds.

Draghi’s comments came amid a state of fragility in the European economy, that recently escaped from falling into a recession. Reading growth in the third quarter ose 0.2 percent compared with the second quarter of this year. Reading growth in Germany–Europe’s strongest economy– rose only 0.1 percent from the third quarter, after a similar contraction in the second quarter.

China has sought to reassure the world that its economy will not see further slowdown. Earlier this month, the Chinese president, Xi Jinping, spoke to Executive Heads of major companies. Within the framework of summit on economic cooperation for Asia and the Pacific, Xi stated that “the risks facing the Chinese economy are not scary. The Government is confident that it will exceed these risks.” He noted that even if Chinese growth reading fell to 7.00 percent, China will remain the most developed economy in the world.

The World Bank commented on the Chinese economy last June, saying that China had conducted important structural changes. Chinese economic growth engines continue to turn from manufacturing sector to service sector, and from investment to consumption in strong demand.

By Ahmed Kotb

“In the End, Evidence Is All That Matters” – Pistono on “Free Money”

"In the End, Evidence Is All That Matters" - Pistono on "Free Money
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In a recent keynote speech at the Future of Work Summit at NASA Ames Research Park, award-winning journalist and author Federico Pistono elaborated on the concept of “free money”–giving money to all people with no strings attached, an idea that Pistono explored in his best-selling book, “Robots Will Steal Your Job, But That’s OK.” Pistono spoke about the possibility of solving some ongoing human rights problems by giving everyone enough money to securely take care of themselves. More than anything, Pistono expressed a desire for more scientific data to inform economic policies.


“I could make the case as to why an unconditional basic income would result in better social conditions for everyone, including the wealthy,” said Pistono.

“I could make an ethical argument as to why it is our collective moral imperative to take Article 25 of The Universal Declaration of Human Rights at heart–‘Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.'”

"In the End, Evidence Is All That Matters" - Pistono on "Free Money“I could lay down a 10-year plan for transition, and show how it will be wonderful and beautiful for everyone.”

“And, of course, I could be wrong on all accounts,” said Pistono.

“I think way too much has been said on the hypothetical effects of certain economic policies as opposed to others. I’m driven by evidence and data, everything else is ideological masturbation. Let’s run some field pilots and randomized control studies, and take it from there.”

“In the end, evidence is all that matters. So let’s stop talking and start doing more. Start small, experiment, get data, learn from mistakes, expand, repeat.”

“Let’s be scientific.”

What if Everybody Got Free Cash?

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By James Haleavy

World Bank-Backed Corps and Small-Scale Fishers Fight Over Fishing Rights

World Bank-Backed Corps and Small-Scale Fishers Fight Over Fishing Rights (2)
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Enclosures of water are being dispossessed from small-scale markets in a rising trend of so-called “ocean grabbing,” according to a recent report by Transnational Institute (TNI) and Afrika Kontakt. Claiming that seas and shores must be taken from common fisher people in order to preserve sustainability, the World Bank is backing corporate interests and a rise in large-scale aqua-industry market-based fishing policies.

“Ocean grabbing is occurring in varied ways,” stated TNI in their report. “One common denominator is the exclusion of small-scale fishers from access to fisheries and other natural resources and access to markets through the adoption or reinterpretation of laws, regulations or policies affecting fisheries governance.”

“Throughout the world, legal frameworks are emerging that undermine the position of small-scale fisheries producers and systems, while strengthening or reinforcing the position of corporate actors and other powerful players. Such ‘perfectly legal’ reallocation processes may or may not involve coercion and violence, but are far from being considered as socially legitimate. They typically involve three types of mechanisms.”

World Bank-Backed Corps and Small-Scale Fishers Fight Over Fishing Rights (2)Some key examples offered by the report were used to illustrate the variety of ways in which common access to fishing was being blocked. Luxury beach-resorts occupying long swathes of coastal land, destruction of mangrove areas for purposes of promoting export-oriented shrimp farms, and the rise of Rights Based Fishery (RBF) policies were some of the “technically legal” ways listed by which fisher people were dispossessed or their waters were destroyed in Sri Lanka, Ecuador, Europe, Canada and elsewhere.

The World Bank enabled “ocean grabbing” through legal frameworks such as its Global Partnership for Oceans (GPO), the report found. GPO enabled the spread of private property rights over the ocean’s fish resources, and was justified by the lack of economic and environmental “sustainability” in the world’s fisheries.

Growing populations around the world are placing stress on fish resources, according to the justification for GPO. For example, in South Africa, access to fish was curtailed for over 60,000 fisher people when a similar privatization program was passed.

The numbers of fisher people wanting access to water resources worldwide is in the billions.

“FAO estimates that 58 million people are engaged in the actual fishing and harvesting in wild-capture fisheries and aquaculture, and that more than 800 million people worldwide depend on fisheries in various ways,” stated TNI. “In addition to these figures, a large number of rural peasants and other people working in rural areas also depend on fishing as a supplement to their main livelihoods.”

By Sid Douglas

Deforestation Now Driven by “Globalization and Commercialization” – Report

Deforestation Now Driven by Globalization and Commercialization - Report
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The nature of deforestation has changed dramatically in recent years, according to a new study by Chalmers University Scientists. Deforestation today is driven by globalization and commercialization to a large and increasing degree–international trade is contributing to deforestation through a demand for beef, soy, palm oil and timber.

“From having been caused mainly by smallholders and production for local markets, an increasing share of deforestation today is driven by large-scale agricultural production for international markets,” said Martin Persson, lead researcher on the study.

Persson’s team looked at seven major deforestation case countries–Argentina, Bolivia, Brazil, Paraguay, Indonesia, Malaysia and Papua New Guinea–and found that one-third to one-half of deforestation could be attributed to overseas trade.

Deforestation Now Driven by Globalization and Commercialization, Deforestation, Globalization, Commercialization, rain forests
Martin Persson

“More than a third of global deforestation can be tied to rising production of beef, soy, palm oil and wood products,” said Persson. “If we exclude Brazilian beef production, which is mainly destined for domestic markets, more than half of deforestation in our case countries is driven by international demand.”

“The trend is clear, the drivers of deforestation have been globalized and commercialized.”

The study was commissioned by the Center for Global Development (CGD) and was completed by Martin Persson of Chalmers University of Technology and colleagues in Linkoping, Sweden, and Vienna, Austria.

In addition to their findings about market trends, the research team found that 1.7 billion tons of carbon dioxide emissions could be linked to production of the commodities analyzed in the study–and one-third of that amount was due to commodity exports.

The research also found trends in the response of companies to the negative publicity associated with deforestation.

“Another key trend is that more and more corporations have pledged to rid their supply chains from deforestation,” said Persson. “Pushed by environmental organizations and seeing the risks of being associated with environmental destruction, companies like Unilever and McDonalds are pressuring their suppliers to stop expanding production on forest land.”

The countries on the receiving end of the commodities produced through deforestation were China and EU nations. It was not enough, Persson said, to blame the nations in which deforestation occurs.

“Today both public and private consumers, be it individuals or corporations, have the possibility to contribute to the protection of tropical forests by holding suppliers accountable for the environmental impacts of their production,” Persson concluded.

By Sid Douglas

Photo: gillyan9

China: Renewable Energy Goal Missed for First Time

China: Renewable Energy Goal Missed for First Time
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China has cut forecasts for offshore wind power installations by 60 percent–the nation had projected 5,000 megawatts of capacity by 2015 and 30,000 megawatts by 2020, but has reassessed its ambitions. China now aims to install approximately 2,000 megawatts of capacity by 2015 and 10,000 by 2020.

“The pace and scale of offshore wind are full of changes,” said Li Ping, an official from the National Energy Administration (NEA), the organization responsible for the figures.

China is being “more cautious” in its plans to install offshore wind because the enterprise is “more risky and costly,” according to honorary chairman of the Chinese Wind Energy Association, Shi Pengfei.

The 30,000 megawatts projected for 2020 would have been enough to supply 32 million homes. The current goal is less than one-third of that.

The policy adjustment will be the first time China has missed a renewable energy goal. The change will also set back the $15 billion wind power industry

The estimates are preliminary, according to Li, who spoke at a conference in Beijing Thursday.

China Renewable Energy Goal Missed for First TimeCurrently, China has over 439 megawatts of offshore wind power. The nation may install a further 500 megawatts next year and 1,000 in 2016, according to sources.

China recently expanded its wind energy so rapidly that the power infrastructure was unable to match production–approximately 12 percent of onshore wind turbines were not connected to the grid last year, and another 11 percent were idle because transmission lines were insufficient to the available load. China is slowing things down somewhat, as is reflected in the NEA preliminary estimates.

By Andy Stern

Photo: Dylan Passmore

World’s First Big Carbon Capture Coal Plant Will Sequester 90% Of Its Emissions

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In the Canadian province of Saskatchewan the world’s first big carbon capture coal power plant has begun. The project will sequester almost all of its emissions–about a million tons of carbon per year.

Canadian utility SaskPower is undertaking the project at the 110 megawatt Boundary Dam power station near Estevan, Saskatchewan, where it will retrofit one of its units.

The unit will be transformed into a long-term producer of 110 megawatts of base-load electricity, meanwhile reducing greenhouse gas emissions by one million tons of carbon dioxide per year–the equivalent of taking over 250,000 cars off of the province’s roads every year.

The captured CO2 will be piped to oilfields in southern Saskatchewan where it will be used for enhanced oil recovery. Unused CO2 will be stored in SaskPower’s Aquistore project.

In addition to CO2, the project will also capture Sulphur Dioxide and Fly ash. These products will be sold for industrial use.

The experiment will cost $1.35 billion, but if it works, SaskPower will retrofit two other units at a cost 20-30 percent less. The utility has already gained insights into improvements on design and engineering from the current undertaking.

According to the company, “The Boundary Dam Integrated Carbon Capture and Storage Project is SaskPower’s flagship CCS initiative. Through the development of the world’s first and largest commercial-scale CCS project of its kind, SaskPower is making a viable technical, environmental and economic case for the continued use of coal.”

By Day Blakely Donaldson

Recession Means Many Women Will Never Have a Child – Study

Recession Means Many Women Will Never Have a Child - Study
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Most studies have concluded that unemployment in the short run leads to a drop in fertility, but whether the negative effects persist–whether women simply postpone childbearing or if the effect is more long-term–has remained unknown. According to a recent study by Princeton University, living through a recession means that some women will never have a child, and a major recession such as that experienced in the US in 2008-2009 may cause losses of hundreds of thousands of births.

“Fertility falls when unemployment rises, but there may be no long-run effect if women simply postpone childbearing,” considered the authors of the study, but after completing their research the team concluded that unemployment not only causes drops in fertility in the short-term, but over time the negative effects actually increase. This increase was found to be characterized largely by women who did not have any children as a result of living through a recession in their early 20s.

Photo credit: Eileen Barroso
Dr Janet Currie

“The effects are actually bigger in the long run than in the short run,” Dr. Janet Currie, Henry Putnam, Professor of Economics and Public Affairs Director of the Center for Health and Well-Being at Princeton, told The Speaker.

“Macroeconomic events really matter for individual people’s lives, and can have a profound effect on them,” said Currie.

She commented on those women who were most vulnerable to fluctuations in employment rates. “What matters is unemployment in the early 20s. So a deeper recession at that time of a woman’s life would lead to fewer births long-term.”

The report, “Short- and long-term effects of unemployment on fertility,” was authored by Curie and Dr Hannes Schwandt at Princeton University, and was published in the current edition of the Proceedings of the National Academy of Sciences.

The team analyzed the effect of unemployment by following fixed groups of US-born women. The team looked at year of birth and state in which the women lived, and drew on 140 million US birth records for the period 1975-2010.

They found that only a one percent decrease in the employment rate during a woman’s life from between the ages of 20-24 caused a drop in short-term fertility by six conceptions per 1,000 women.

When those women were assessed at their 40th year, that same one percent drop during their early 20s was associated with an overall drop in conceptions of 14.2 per 1,000 women.

Taking this finding to the national level, the effects of a major recession can account for hundreds of thousands of lost births.

“On a national scale effects of the magnitude we find suggest a loss of about 400,000 births stemming from the ‘Great Recession’ that started in 2008,” Currie told us.

“This larger long-term effect is driven largely by women who remain childless.”

By Day Blakely Donaldson

“How Much for the Mona Lisa?” France Considers Sale to Ease National Debt

How Much for the Mona Lisa France Considers Sale to Ease its National Debt
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The Mona Lisa, painted in the early 16th century by Italian artist Leonardo da Vinci, is worth an estimated $2.5 billion, and the France’s media has suggested that the “priceless” painting could be sold to alleviate the nation’s debt, which has mounted to $200 billion. The sale of other works was also suggested as possible salable items, including the collection of impressionists belonging to the Musee d’Orsay, which could be worth $6 billion.

The sale of the world’s best-known painting was suggested by France’s state-run France 24 news channel.

France has been selling off various cultural assets in the face of its burdensome $2000 billion national debt. France has already impressionistsfamously sold its former International Conference Center near the Arc de Triomphe to Qatari and Chinese buyers, and also sold some of its finest wines from the Elysee presidential palace cellar to private collectors.

The news site also suggested that the impressionist collection at the Musee d’Orsay would be worth approximately $6 billion.

In 1962, the Mona Lisa was valued at $100 million. The valuation was done for insurance purposes before sending the painting on tour in the US. Taking inflation into account, the painting could now be valued at around $2.5 billion.

The 1962 valuation made the Mona Lisa the highest valued piece of art in history, according to the Guinness World Records.

France 24 stated, “‘Her enigmatic smile beams down on hundreds of thousands of tourists a year at the Louvre Museum in Paris. And she could also bring a smile to France’s cash-strapped government if a sale could ease the national debt.”

Paris City Hall Head of Culture Bruno Julliard said that the sale would “In theory raise a very large sum of money,” but that France was not ready to sell off the painting for the sake of easing its debt.

Despite the high value of the Mona Lisa, France may be prohibited from selling the painting–and other such art works–due to French heritage law.

French law does not allow the selling of objects belonging to public museums. “The property constituting collections in France owned by a public entity is part of their public domain and is, as such, inalienable,” states Article 451-5 of the Code of French Heritage.

Analysts have commented that a sale would require a change to the law.

But if France did sell some of its collection of art to ease its debt problems, it would not be the first to do so.

Germany, Denmark, and the Netherlands have all allowed the sale of art for similar purposes. Detroit, USA, facing state bankruptcy, sold a collection that included Van Goghs and Picassos in 2013.

Portugal is currently selling 85 works by Joan Miro, and hopes to receive over $50 million for the sale. Portugal is attempting to bail itself out of failed state status, and is $275 billion in debt.

By Cheryl Bretton

US States Do Not Measure Amount of Gas Burned at Fracking Sites, Equivalent to the Emissions of Millions of Cars, and It May Be Illegal

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The amount of gas burned by fracking flares in Texas and North Dakota is not measured by the states, according to a new report by Ecowatch, which also found that the amount of gas burned in just two shale plays was equivalent to the carbon dioxide emissions produced by 1.5 million cars. This burned gas is not taxed, and is costing Americans money, Ecowatch found. Not only that, the regulatory agencies responsible for allowing the burning–such as the Railroad Commission–may be breaking the law.

“Burning natural gas as waste is costing taxpayers and the climate. States should enact tough new standards to prevent flaring, including requiring drillers to pay taxpayers the full value of any gas they flare,” wrote Ecowatch’s Dusty Horwitt in the report.

130 billion cubic feet of natural gas has been burned in the Bakken and Eagle Ford Shale plays, which has ScreenHunter_708 Aug. 25 18.36produced the equivalent of 1.5 million cars’ emissions of carbon dioxide.

In just the Bakken shale, and in just the past four years, $854 million in natural gas has been burned.

The state of North Dakota does not track the amount of gas that is flared by fracking companies. It also does not track how much companies pay in taxes on flared gas.

Texas also does not require gas producers to pay taxes on the gas they flare.

US States Do Not Measure Amount of Gas Burned at Fracking Sites, Equivalent to the Emissions of Millions of Cars, and It May Be Illegal (4)Don Morrison, executive director at the nonprofit grassroots group Dakota Resource Council, commented on the findings. “This report shows that North Dakota regulators simply aren’t doing their job,” said Morrison, “Instead they’re putting private profits ahead of the public interest. This isn’t our first oil boom, we know how to do it better.”

“The Railroad Commission is statutory required ‘to prevent waste of Texas’s natural resources’,” said Sharon Wilson at Earthworks, referring to the Texas Railroad Commission. “I don’t see how the Railroad Commission isn’t breaking the law by allowing drillers to waste natural gas by flaring it off rather than capturing it.”

US States Do Not Measure Amount of Gas Burned at Fracking Sites, Equivalent to the Emissions of Millions of Cars, and It May Be Illegal (6)The author of the report noted that the $854 million worth of flared gas in Bakken would pay for 5 kilowatt photovoltaic solar panel installations for almost every household North Dakota’s largest city, Fargo.

By Day Blakely Donaldson