Author: Art Diamond

Frackers Have “Enthusiasm, Empiricism, Technical Inventiveness, and Fearlessness to Try and Err”

(p. A9) It’s a complicated yarn that Gary Sernovitz, a novelist and energy investor, spins in “The Green and the Black” and one that is still revealing fresh plot twists. Just last week, the shale boom’s most Shakespearean figure, Aubrey McClendon, died in a car crash the day after he was indicted on charges that he had rigged bids for oil and gas leases in Oklahoma. McClendon was dazzlingly ambitious and persuasive, if perhaps blithe to humdrum legalities.
Other pioneers of America’s new energy age have been equally vivid. George Mitchell of Mitchell Energy was a Greek immigrant who began wildcatting in the 1950s and fracked the Barnett Shale in Texas for nearly two decades before he could make it work financially. By that time he was 77. Harold Hamm of Continental Resources, the 13th child of Oklahoma sharecroppers, became a multi-billionaire by fracking the Bakken formations across Montana and North Dakota. It was men like these, willing to keep buying land and drilling whether they were nearly bankrupt or billionaires, that Mr. Sernovitz credits for the shale revolution.
. . .
He writes: “For those who lament that America no longer makes anything but bond traders, for those who think that ‘maker’ culture only exists in a bearded guy pickling compassionately farmed okra in Austin, spend some time with oil industry engineers to absorb their enthusiasm, empiricism, technical inventiveness, and fearlessness to try and err.”

For the full review, see:
PHILIP DELVES BROUGHTON. “BOOKSHELF; The Shale Revolutionaries; There are energy deposits all over the world. Yet drilling oil and gas out of once-inaccessible shale was only pursued vigorously in the U.S.”The Wall Street Journal (Fri., March 18, 2016): A9.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 17, 2016.)

The book under review, is:
Sernovitz, Gary. The Green and the Black: The Complete Story of the Shale Revolution, the Fight over Fracking, and the Future of Energy. New York: St. Martin’s Press, 2016.

Denisovans May Have Mated with As-Yet-Undiscovered Hominin Species

(p. A17) A tooth fossil discovered in a Siberian cave has yielded DNA from a vanished branch of the human tree, mysterious cousins called the Denisovans, scientists said Monday [November 16, 2015].
Their analysis pushes back the oldest known evidence for Denisovans by 60,000 years, suggesting that the species was able to thrive in harsh climates for thousands of generations. The results also suggest that the Denisovans may have bred with other ancient hominins, relatives of modern humans whom science has yet to discover.
Todd Disotell, a molecular anthropologist at New York University who was not involved in the new study, said the report added to growing evidence that our species kept company with many near relatives over the past million years.
. . .
Some of the DNA in the Denisova 8 tooth hints at an even older interbreeding. While most of the genetic material in the tooth bears a close kinship with Neanderthals, some of it seems only distantly related to Neanderthal or human DNA.
One possible explanation, Dr. Paabo said in an interview, is that Denisovans interbred with another hominin species that lived in Asia. It is conceivable that this hominin was a species already known from fossil discoveries, such as Homo erectus. But it could also be a related species.
“If you would have told me five years ago I would be talking about species we don’t have any fossils for, I would have thought you were crazy,” Dr. Disotell said.

For the full story, see:
CARL ZIMMER. “Tooth in Cave Adds Earlier Evidence of Some Very Old Cousins, the Denisovans.” The New York Times (Tues., NOV. 17, 2015): A6.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date NOV. 16, 2015, and has the title “In a Tooth, DNA From Some Very Old Cousins, the Denisovans.”)

Eminent Domain Advantages Centralized Energy Generation and Disadvantages Distributed Energy Generation

(p. B1) COWGILL, Mo. — Up and down the center of the country, winds rip across plains, ridges and plateaus, a belt of unharnessed energy capable of powering millions of customers, with enormous potential to help meet national goals to stem climate change.
And because the bulk of the demand is hundreds of miles away, companies are working to build a robust network of high-voltage transmission lines to get the power to the coasts.
If only it were that simple. In all, more than 3,100 miles of projects have yet to be built, in need of government approval.
One of the most ambitious projects, called the Grain Belt Express from a company called Clean Line Energy Partners, spent six years winning the go-ahead in three of the Midwestern states it would cross, only to hit a dead end in Missouri when state regulators voted 3 to 2 to stop the project. They were swayed by landowners like Jennifer Gatrel, who runs a midsize family cattle operation with her husband, Jeff, here in the northwestern part of the state.
She and other opponents made the usual arguments against trampling property rights through the use of eminent domain, obliterating their pastoral views and disrupting their way of life.
But they also argued something else: Why should they have to live beneath the high-voltage lines when there is plenty of wind in the East?
. . .
(p. B6) . . . opponents like Ms. Gatrel say that giant projects like the Grain Belt Express represent an outmoded, centralized approach to delivering energy. Just as it is healthier and more sustainable to eat foods close to where they are grown, the argument goes, so, too, should electricity be consumed closer to where it is produced.
“We believe that the East Coast has access to abundant offshore wind and that any time you talk about green or clean, you should also be talking about local,” she said. “Unnecessary long-haul transmission lines are not our country’s future.”
. . .
. . . some energy officials and executives say there is a more dynamic and resilient alternative to . . . sprawling networks. Instead, they are promoting the development of less centralized systems that link smaller power installations, including rooftop solar, storage and electric vehicles, an approach known as distributed generation.

For the full story, see:
DIANE CARDWELL. “Fight to Keep Alternative Energy Local Stymies an Industry.” The New York Times (Thurs., MARCH 24, 2016): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the story has the date MARCH 23, 2016, and has the title “Fight to Keep Alternative Energy Local Stymies an Industry.”)

Defending Free Speech in Climate Research

(p. A17) The Climate Inquisition began with Michael Mann’s 2012 lawsuit against critics of his “hockey stick” research–a holy text to climate alarmists. The suggestion that Prof. Mann’s famous diagram showing rapid recent warming was an artifact of his statistical methods, rather than an accurate representation of historical reality, was too much for the Penn State climatologist and his acolytes to bear.
Among their targets (and our client in his lawsuit) was the Competitive Enterprise Institute, a think tank prominent for its skeptical viewpoint in climate-policy debates. Mr. Mann’s lawsuit seeks to put it, along with National Review magazine, out of business. Four years on, the courts are still pondering the First Amendment values at stake. In the meantime, the lawsuit has had its intended effect, fostering legal uncertainty that chills speech challenging the “consensus” view.
. . .
That is why we are establishing the Free Speech in Science Project to defend the kind of open inquiry and debate that are central to scientific advancement and understanding. The project will fund legal advice and defense to those who need it, while executing an offense to turn the tables on abusive officials. Scientists, policy organizations and others should not have to fear that they will be the next victims of the Climate Inquisition–that they may face punishment and personal ruin for engaging in research and advocating their views.
The principle of the First Amendment, the Supreme Court recognized in Dennis v. United States (1951), is that “speech can rebut speech, propaganda will answer propaganda, free debate of ideas will result in the wisest governmental policies.” For that principle to prevail–in something less than the 350 years it took for the Catholic Church to acknowledge its mistake in persecuting Galileo–the inquisition of those breaking from the climate “consensus” must be stopped.

For the full commentary, see:
DAVID B. RIVKIN JR. and ANDREW M. GROSSMAN. “Punishing Climate-Change Skeptics; Some in Washington want to unleash government to harass heretics who don’t accept the ‘consensus.'” The Wall Street Journal (Thurs., March 24, 2016): A17.
(Note: the online version of the commentary has the date March 23, 2016.)

Skepticism of Science Is Incompatible with Communist Dogma

(p. A11) On June 6, 1989, the physicist Fang Lizhi took refuge in the U.S. Embassy in Beijing at the invitation of President George H.W. Bush, who told Fang, then being hunted by the Communist Party, that he could stay as long as necessary. Two days earlier, troops from the People’s Liberation Army had crushed the democracy protests in central Beijing and other cities that had riveted China–and the world. Fang did not participate directly in the Tiananmen Square protests, but his campus talks and writings on democracy during the 1980s had made him a hero to the students and an archenemy of the authorities. He and his wife, Li Shuxian, also a physicist, were No.1 and No. 2 on an arrest list after the massacre.
Fang and his wife stayed at the embassy for 13 months. During that time he wrote “The Most Wanted Man in China,” a thoughtful, funny and still relevant memoir that recalls those tense days and the years leading up to them, during which Fang openly challenged China’s Communist Party in a battle of ideas.
. . .
Fang has been called the “Chinese Sakharov” and not only because of his brilliance. “For Fang as for [Andrei] Sakharov,” as Perry Link, a scholar of Chinese language and dissent, writes in the book’s foreword, “rights were implied by science.” Its axioms of “skepticism, freedom of inquiry, respect for evidence, the equality of inquiring minds, and the universality of truth . . . led Fang toward human rights and to reject dogma of every kind, including, eventually, the dogma of the Chinese communism that he had idealistically embraced.”

For the full review, see:
ELLEN BORK. “BOOKSHELF; He Made the Great Leap; Fang Lizhi’s name is banned in China. But everyone there who continues to push for democratic rights owes a debt to the dissident.” The Wall Street Journal (Weds., Feb. 17, 2016): A11.
(Note: ellipsis between paragraphs, added; ellipsis internal to paragraph, in original.)
(Note: the online version of the review has the date Feb. 16, 2016,)

The book discussed in the review, is:
Fang, Lizhi. The Most Wanted Man in China: My Journey from Scientist to Enemy of the State. New York: Henry Holt and Co., LLC, 2016.

Zimbabwe Government Would Rather Starve Citizens than Allow GMO Food

(p. A15) Chikombedzi, Zimbabwe
My country’s government would rather see people starve than let them eat genetically modified food.
That’s the only conclusion to draw from the announcement in February that Zimbabwe will reject any food aid that includes a genetically-modified-organism ingredient–such as grains, corn and other crops made more vigorous or fruitful through GMO breeding. The ban comes just as Zimbabweans are suffering from our worst drought in two decades and up to three million people need emergency relief.
“The position of the government is very clear,” said Joseph Made, the minister of agriculture. “We do not accept GMO as we are protecting the environment from the grain point of view.”
In other words, my country–which can’t feed itself–will refuse what millions around the world eat safely every day in their breakfasts, lunches and dinners as a conventional source of calories. It doesn’t matter whether the aid arrives as food for people or feed for animals. Our customs inspectors will make sure that no food with GMOs reaches a single hungry mouth.

For the full commentary, see:
NYASHA MUDUKUTI. “We May Starve, but at Least We’ll Be GMO-Free; Unlike the Europeans we copied, Zimbabwe can’t afford such an unscientific ideological luxury.” The Wall Street Journal (Fri., March 11, 2016): A15.
(Note: italics in original.)
(Note: the online version of the commentary has the date March 10, 2016.)

“China Has Blindly Constructed So Many Homes and Wasted So Much Resources”

(p. C6) In November [2015], President Xi Jinping told a meeting of officials that China must resolve the housing inventory situation and ensure the health of the property sector.
Since then, Meishan, a city of 3.5 million people, has become a showcase for efforts to lure rural dwellers to cities to buy homes as part of so-called destocking efforts to reduce the glut.
. . .
. . ., some analysts and local government officials warn the rural strategy isn’t a cure-all. Banks typically hesitate to extend mortgages to rural migrants, whose homestead land doesn’t typically qualify as collateral.
“Now with bad loans growing in China, banks are reluctant to lend to farmers. Farmers don’t have assets and lending to them is risky,” said Wang Fei, an official at Hubei Province’s department of housing and urban-rural development.
. . .
Housing inventory in the city rose to 22.5 months last April, an alarmingly high level compared with a healthier rate of 12 months or lower. There were also cases where cash-strapped property firms defaulted on their loans, leaving behind unfinished apartments.
Buyers of Purple Cloud Golden World housing project are now stranded after Yang Jinhao, who controlled Sichuan Xinrui Property Development, got involved in a dispute with a shadow lender early last year.
“China has blindly constructed so many homes and wasted so much resources. I can’t stand it!” said Yu Jianmin, a 70-year-old caretaker of the stalled project who said the construction firm he works for is still awaiting payment from Mr. Yang. Mr. Yang couldn’t be reached.

For the full story, see:
ESTHER FUNG. “Discounts Help China Ease Home Glut.” The Wall Street Journal (Weds., March 2, 2016): C6.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the story has the date March 1, 2016, and has the title “China Sweetens Home-Ownership Deals for Rural Dwellers.”)

Sanctimoniously Environmental “Honest Company Inc.” Is Dishonest

(p. A1) In less than four years, the Honest Company Inc. surged to a $1.7 billion private valuation thanks to its marketing of cleaning supplies, diapers and other consumer products that it says are safer and more ecologically friendly than other brands.
The company, co-founded by actress Jessica Alba, is challenging giants such as Procter & Gamble Co. and Clorox Co. with a guarantee that its offerings don’t contain what it says are harsh chemicals found in many mainstream products. One of the primary ingredients Honest tells consumers to avoid is a cleaning agent called sodium lauryl sulfate, or SLS, which can be found in everyday household items from Colgate toothpaste to Tide detergent and Honest says can irritate skin. The company lists SLS first in the “Honestly free of” label of verboten ingredients it puts on bottles of its laundry detergent, one of Honest’s first and most popular products.
But two independent lab tests commissioned by The Wall Street Journal determined Honest’s liquid laundry detergent contains SLS.

For the full story, see:
SERENA NG. “Trendy Detergent Caught in Spin Cycle.” The Wall Street Journal (Fri., March 11, 2016): A1 & A2.
(Note: ellipsis added.)
(Note: the online version of the story has the date March 10, 2016, and has the title “Laundry Detergent From Jessica Alba’s Honest Co. Contains Ingredient It Pledged to Avoid.”)

A&P, Once Dominant Grocery Chain, Files for Bankruptcy Again

(p. B1) A&P, a former titan of the grocery industry, has filed for bankruptcy protection for the second time in five years and is trying to sell more than 100 of its stores.
The company, which owns Pathmark, Food Emporium and other food retailers clustered primarily in New York, New Jersey and Pennsylvania, said on Sunday that a restructuring in 2010 had failed to put it on secure enough financial footing to keep up with a shifting grocery landscape.
A&P, less commonly referred to as the Great Atlantic & Pacific Tea Company, has lost market share to competing stores like ShopRite and Stop & Shop Supermarket Company, as well Walmart and Target, retail giants that have spent the last few years expanding their offerings in the grocery aisles. A&P has debts of about $2.3 billion, court filings show, and assets of $1.6 billion.
. . .
Founded in 1859 as a mail-order tea business, A&P evolved into a discount food retailer that operated 16,000 stores by the mid-1930s and remained a dominant player in America’s grocery landscape into the second half of the century.
“It was truly a powerhouse,” said Marc Levinson, an independent historian and the author of “The Great A&P and the Struggle for Small Business in America.” “In those days, independent grocers were every bit as afraid of A&P as mom-and-pop retailers are today of Walmart.”
In 1912, A&P opened its first discount store in Jersey City. The idea of a retailer focused on low-cost groceries was novel at the time, and a reputation for rock-bottom prices helped the company flourish.
“They were opening stores literally more than one a day during World War I,” Mr. Levinson said.

For the full story, see:
RACHEL ABRAMS. “A&P Files for Bankruptcy and Aims to Sell 120 Stores.” The New York Times (Tues., JULY 21, 2015): B3.
(Note: ellipsis added.)
(Note: the online version of the story has the date JULY 20, 2015.)

Levinson’s excellent book on the economic history of A&P, mentioned above, is:
Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.

Rates to Insure Against Global Warming Catastrophes Are FALLING

The “super-cat” insurance referred to below by Warren Buffett is the part of the reinsurance business that insures other insurance companies against the occurrence of very large (super) catastrophes (cat).

(p. A9) Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather-related events covered by insurance. As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business. If super-cats become costlier and more frequent, the likely–though far from certain–effect on Berkshire’s insurance business would be to make it larger and more profitable.

As a citizen, you may understandably find climate change keeping you up nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.

Source of quote from Warren Buffett’s annual shareholder letter:
“Notable & Quotable: Warren Buffett on Climate.” The Wall Street Journal (Tues., March 1, 2016): A9.
(Note: the online version of the quotes from Buffett has the date Feb. 29, 2016.)

Warren Buffett’s annual letter to Berkshire Hathaway stockholders can be found at:
http://www.berkshirehathaway.com/2015ar/2015ar.pdf