Friday 29 November 2013

A Surprising Graph

I think western perception of China is heavily skewed by it's aggregate numbers. I suspect that this GDP per capita comparison would surprise alot of people:

Thursday 28 November 2013

Capitalism, like Democracy, gives the people what they want... What they want is Consumerism... and of course, more oil.

It's that time of the year again. Shopping and people complaining about our culture of shopping. The Dish referenced this article: Don’t Go Shopping on Thanksgiving. Just Don’t. Where the author, Ellen Galinsky pleads with shoppers to stay home on Thanksgiving Days to punish those stores that open up their doors.

The author starts off by implying that workers shouldn't HAVE to work on certain holidays. I agree. But acknowledges that, "it’s also true that it’s what some employees want as well, especially when retailers offer to pay time and a half, or when labor agreements include provisions for premium pay." So if there are people who want to work, and people who want to buy, who should make the call? And what should they base that call on? (I think the store owner is pretty well positioned to make that call).

Here to me is her big hook (her punchline, or where she intends to win the reader over):
But what I want to do is encourage people to look at the bigger work-life picture. Giving up our holidays can negatively impact our well-being and our personal and family lives. Creating traditions with our children and continuing traditions with our elders can also suffer. More important, it further erodes the already faint distinction between our work and our personal lives, and it’s a trend that just may move from retail to white collar jobs. After all, 50 years ago no one would have thought that professionals would be working nights and weekends, and we all know how that turned out.
First, I am ALL for encouraging people to look at other view points. In fact, I'm ALL for everything she said. People should consider everything in their life when making choices of all sorts. Knowing nothing of her politics or agenda, I can't say if she's pushing for more informed decisions or actually pushing for legislature (in which case I would very much disagree with her, as it would be an imposition of her ideals on others).

But to me, the market is the most equitable place to sort these things out. And where these decisions are currently being sorted out.

The author provides a number of companies that currently keep their doors closed on Thanksgiving and defend their decisions in a moralistic/paternalistic manner. I'm all for their decision to keep their doors closed, and also for them to defend it in the tone they've chosen (despite disagreeing with their moralistic/paternalistic logic).

The author concludes:
It’s about keeping the ever encroaching workweek at bay and preserving the notion that we are all entitled to some rest and rejuvenation.
While I disagree with the article's conclusions, I completely agree with the premise. Consider everything in your life. Your family, your traditions, your bills, your future, etc. And make an informed decision.

Some companies will keep their doors closed and, if the article is to be believed, will benefit from healthier and more motivated employees. In fact, we might even expect a employees to prefer working resulting in a preferential labor pool. Or perhaps, the opportunity to gain overtime premium paying hours by working at a job that keeps their doors open on holidays is preferential.

The bottom line is: Create a system where individual choices govern these decisions. Who am I to tell someone that paying their bills aren't as important as taking time off (or vice versa). Employees and employers should be upfront about policies prior to employment.

I wonder if the author would agree that the market would find the 'optimal' outcome?

There is spill over. As the title of this post suggests.

Lost in all the rhetoric about climate change, doing what's right, and "leaving carbon in the ground" is the fact that as a society we still want to consume oil. It's not that we'd prefer to consume oil because it's oil; we prefer to consume oil because we'd have to sacrifice alot of things that we like if we didn't.

The same holds with politics. People get who they vote for. I've never gotten the whole "american people deserve better" notion. People vote for who they want. Particularly with the highly publicised American political world, poll number are constant and immediate. I suspect that most politicians consider this realtime feedback, and perhaps the cynic in me would suspect that their positions are about as flexible as they believe the public wants them to be.

When it comes to Oil and thinking about those who hold an opposing view I'm not a, "how did you get to this protest" kind of person. I believe that many of them would happily abstain, or at least try (I do think alot of them might be a bit naive as to how much they enjoy petroleum based products), from consuming petroleum.

Liza Horne on The tackles this in an article titled: Oil is our heroin.
Our current consumer society greatly depends on oil and, like the sign suggested, we are addicted. Plastics, waterproof materials, stretchy fabrics, medicines, makeup, cleaning supplies, and countless other objects we use daily all contain traces of oil. On the odd chance they don't, they were certainly transported to our store shelves by a gas-powered vehicle.
I think people generally understand how pervasive petroleum actually is in our everyday lives beyond transportation. But it never hurts to remind people. And I don't mean in a condescending dismissive way; but in an educational way.

I can understand why someone would still want the oilsands shut down or fracking to be stopped. For me, the benefits of their development far out weigh the costs. And I do try to understand the costs.

So like the author in the article above I just want a full discussion on the benefits. And be honest about what 'the people' want. After all, I'd love to not consume oil and have my car powered by ________. But my consumption habits reveal my true preference. Given my options, I'm going to consume oil. The world continues to increase oil consumption levels despite a tripling of oil price in the past decade. It's hard not to accept that the world clearly wants to consume more oil.

The article then turns to where I think this debate needs to be at in order to be constructive. Accepting that people clearly want to consume oil, let's figure out the least damaging way to get it to them.
Coincidentally, we share a fence with that someone else. If all pipeline proposals were rejected and the oil companies decided to go through the Northwest Territories, the Yukon, and over to Alaska, that would put the USA in charge of ocean transport. The world has already witnessed weak American regulations by what happened with the Gulf of Mexico oil spill and, based on my personal experiences and knowledge of American oil and environmental standards, I would prefer to have the British Columbian and Canadian governments in control of this project.
As I argued in this post, the State Department believes that the oil sands will be produced and get to market regardless of XL approval. If emissions and minimizing the impact on global warming are the main concern then why cede control to other powers and force transportation by less efficient methods?

B.C. should take control. Demand that Northern Gateway and the Kinder Expansion be the best pipelines ever constructed, that the tanker facilities are the best in the world, and that accountability for non-compliance is as strict as our laws will allow it. Make those pre-conditions and focus on executing them.  I think there may even be popular support for reforms and regulation that push these agenda items.

Consumers reveal their preferences with their wallet like voters reveal their preferences with their votes. We get what we want, and markets and democracy. Some stores will remain open on Thanksgiving day because the owners think enough people want to buy their product on those days, and they have staff willing to sell it to them. Oil production will continue because people around the world keep buying oil. L

Wednesday 27 November 2013

Chinese Control of Global Oil Assets

China's thirst for oil has been a point of interest on this blog. The incredibly low levels of per capita consumption, the incredibly poor but growing populace, and the sheer magnitude of the market create a situation where any convergence to global norms would have huge implications.

Hattip to Rockman over at, and The Oil Drum previously, for emphasizing the potential impact of Chinese E&P and Refinery joint ventures, and loans for oil deals that would give 'China' the right of first refusal on oil from the ground and/or finished product.

Monday 25 November 2013

Peak oil DEMAND!

Peak oil DEMAND theory is the counter point to 'peak oil theory' which generally describes a supply side phenomenon. Peak demand, in a literal sense, purports that the level of demand has or is near it's peak level and will soon decline. More nuanced versions might suggest, similar to (but the opposite) of my definition of the Peak Oil Dynamic, that the demand side will be the driving force of the oil market going forward.

Friday 22 November 2013

How not to argue for pipelines.

As someone who wants pipelines south and especially west out of Alberta, sometimes it's frustrating watching the debate unfold. The political calculus, the economic justifications and the social issues give all sides plenty of empty rhetoric, plenty of absolute positions to hold, and plenty of talking points to fumble around to prolong the whole mess.

It's akin to an American presidential debate. A question is asked, one of the candidates reads a prepared statement that might kind of border on some aspect of the topic, the other candidate responds by reading a prepared statement that doesn't address anything the other candidate said on a topic the has nothing to do with the original question. The moderator, having posed a question that was not answered, is somehow satisfied, so he moves on to the next question; that won't be addressed.

Monday 18 November 2013

More Thoughts about China.

Reaction to the third plenum has been overwhelmingly positive. Market reaction, social and economic commentary, as well as the sentiment in the mainstream media have all hailed Xi's first step towards a pretty aggresive reform agenda.

There have been a few detractors however. Most are skeptical about the implementation process or the seemingly contradictory nature of some of the key points; like strengthening SOE's while pushing for market liberalization, or the target completition date of 2020.

Friday 15 November 2013

Plenum of good news!

There was a general sentiment of disappointment in reaction to the Plenum's conclusion earlier this week. It was all based on a brief communique from CPC leadership. Consensus seemed to agree that the communique indicated a CPC leadership that was underwhelming in it's commitment to reform and overwhelming in it's vagueness. The reaction seemed pre-mature, why not wait until the expected more, more detailed vauge report that would be rolled out?

Tuesday 5 November 2013

Book Review: Joe Studwell: How Asia Works

Over the weekend I read an excellent book titled: How Asia Works: Success and Failure in the World's Most Dynamic Region by Joe Studwell. In it, the author walks us through the economic development of Japan, Taiwan, and South Korea. Outlining what worked in these countries, and why economic development plans in comparable southeast Asian countries like Thailand, Indonesia, Malaysia, and the Philippines didn't.

To climb from the extreme third world poverty that afflicted these northeast Asian countries to the first world countries that they have become, Studwell prescribes three key features: