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February 24, 2008

Our Third World America

I've found when you talk to oil company types about the mideast that they barely recognize any possibility they're exploiting anyone. "Before we showed up," they'll say, "these countries weren't even doing anything with all that oil. And they could never have used it properly without us."

Whatever the moral merits of this perspective, it's always the case that third world countries fail to capture the value of their own resources. That's almost the definition of being third world. The important profits don't flow to the people on whose land the resources are found (who often get some low fixed price rather than a meaningful percentage), but to the companies from elsewhere which understand how to exploit the resource.

That makes perfect sense to us when it involves "American" oil companies operating in the mideast. I wonder how much sense it will make to us in the future?

SWEETWATER, Tex. — The wind turbines that recently went up on Louis Brooks’s ranch are twice as high as the Statue of Liberty, with blades that span as wide as the wingspan of a jumbo jet. More important from his point of view, he is paid $500 a month apiece to permit 78 of them on his land, with 76 more on the way...

Texas, once the oil capital of North America, is rapidly turning into the capital of wind power...Supporters say Texas is ideal for wind-power development, not just because it is windy. It also has sparsely populated land for wind farms, fast-growing cities and a friendly regulatory environment for developers...

“Texas could be a model for the entire nation,” said Patrick Woodson, a senior development executive with E.On, a German utility operating here.

Much of the boom in the United States is being driven by foreign power companies with experience developing wind projects, including Iberdrola of Spain, Energias de Portugal and Windkraft Nord of Germany. Foreign companies own two-thirds of the wind projects under construction in Texas.

It would be interesting to read really serious business journalism about where the money from wind power goes. Certainly as it's presented in this article, this phenomenon doesn't bode well.

—Jonathan Schwarz

Posted at February 24, 2008 08:03 PM
Comments

Well, we had a helluva ride, didn't we? Invaded some countries, bought a lot of electronic crap from China on borrowed money, yes, those were the days, my friend.

And what could be a more appropriate way to wrap it all up than by selling our wind off to the Germans?

Posted by: SteveB at February 24, 2008 10:11 PM

this rancher is making out exponentially better than the average Iraqi will once the PSAs get passed and the oil stealing proper gets started.

Posted by: ran at February 24, 2008 11:21 PM

What ran said. After the other 76 of the things get up and running, that guy is going to be pulling close to a million dollars a year. For, let's be clear here, doing absolutely fucking nothing. And I'm willing to bet he wasn't stupid enough to sign the rights to his land away for all time or whatever our third world arrangements are these days.

The mideast isn't getting screwed because American companies developed the oil fields, they're getting screwed because they allowed (and that's a heavily qualified "allowed," by the way) that to happen on highly unfavorable terms.

Or, I'm not too worried about Texas.

Posted by: nobody special at February 25, 2008 12:54 AM

we have a lot to learn. there are teachers available. lessons... will be expensive. but the alternative is way worse.

Posted by: hapa at February 25, 2008 01:06 AM

"that guy is going to be pulling close to a million dollars a year. For, let's be clear here, doing absolutely fucking nothing."

Those Saudi Princes? Paupers and penniless bums, the whole lot.

Posted by: buermann at February 25, 2008 01:25 AM

The fortunate thing is that America sits upon lots of renewable wind (in great quantities stemming alongside the hot air in Washington), unlike those Middle Eastern countries that sit upon lots of non-renewable oil. If those Middle Eastern countries learn how to get their wind up to American levels, perhaps they won't need to put their asses on the line by placating America with oil, no?

Posted by: En Ming Hee at February 25, 2008 03:15 AM

Hey, it's globalization babe, and it works pretty well. sadly, jerk-offs like yourslf can't figure out how and why, but for people like it provides a very good livelihood. And some nice adventures in interesting places. Eh, I am dating girls half my age, and sometime soon I plan a weekend in Grozny, just to check it out. I see from your website that you apparently have no current employment worth speaking of : )

Posted by: milo at February 25, 2008 06:27 AM

He insults someone then create a little smile! How clever.

It's been interesting to watch the progression of these "arguments." First it was "you don't understand", then "you're dumb. I'm smarter than you and I'm a high-school dropout."

Then it was "I am well-employed." Then he was a business-school graduate, then a law-school graduate. Somehow we still weren't impressed!

Then we went into the fixation on masturbation. He talked about all his vacation spots. Along the way we ran into arguments like "I am smart," "stuff is complicated," and "some human lives are worth more than others."

Now it's finally degenerated into "I get pussy." I have no idea how it get any lower, but I'm sure he'll find a way to surprise us.


He has no redeeming qualities. :)

Posted by: Save the Oocytes at February 25, 2008 09:05 AM

My in-laws just bought 65 acres in Texas. Wonder how many windmills you could fit on that?

Posted by: Keith at February 25, 2008 09:06 AM

If we're going down, let's take this elevator:

http://www.thyssenkruppelevator.com/

Posted by: Bob In Pacifica at February 25, 2008 09:19 AM

Look, it is a sign of how ridiculous this site is that Professor Schwartz wonders how foreigers are able to invest in America, and thinks it is somehow bad. Look, global energy companies invest globally. Nothing remarkable at all about it. And duh, the "money from wind power" goes to the owners of whatever asset generates the money. And I will say, as the kind of guy more than willing to spend a weekend in Grozny, because I have an active interest in Caucasus culture, distinguishes me greatly from you losers. And having advised the Georgian government on energy policy, I assure you I am expert in this subject while you are all just silly parlor intellectuals.

Posted by: milo at February 25, 2008 09:59 AM

that's Schwarz, chumpwad!

BURRRRRN!!! AHAHAHAHAAH

Posted by: almostinfamous at February 25, 2008 11:34 AM

milo: I'm just hoping YOU are over 36 yrs old.

Posted by: Mike Meyer at February 25, 2008 11:37 AM

Look, you moron, you won't find any economic nationalists here. The point of the post wasn't "Oh no! Them damn furriners is stealin' our wind!" The point was that the US has long been on the most profitable end of resource exploitation, with US multinationals reaping the lion's share of the profits, and now, perhaps, it's our turn to get the short end of the stick.

Furthermore, you moron, you're not telling anyobody here anything we don't know with your startling observation that a "nice livelihood" can be made by the obedient servants of global capitalism (And I'm not conceding for a second that you're the person you claim you are. I know for a fact that you're the assistant manager of an office-supply store in Akron, Ohio, who's never been further east than Youngstown.)

You're like the Communist Party apparatchik who brags about his nice dacha and holidays at the Black Sea and can't figure out why those damn dissidents don't shut up, join the Party, and get with the program.

Posted by: SteveB at February 25, 2008 11:42 AM

Except, of course, in your case the dacha is purely imaginary.

Posted by: SteveB at February 25, 2008 11:46 AM

I agree with nobody special above, I think. Jon's point is right, but the illustration is not the best. Wind power is a poor choice. To see the bad direction in which things are headed, think roads (Indiana and Texas) and water (I believe that Atlanta tried to privatize part of its system, and there are other examples) instead. Privatized energy distribution (Enron) would be another example.

That said, it's kind of a nit to pick. I believe Jon's point is correct.

Re: milo/xyz, a frequent poster on an earlier thread had good advice. Don't feed the trolls.

Posted by: Aaron Datesman at February 25, 2008 01:21 PM

I assure you

Which is worth so much.

Posted by: at February 25, 2008 02:25 PM

Dudes, I'm betting that "milo" is a spoof of our favorite troll.

And I will say, as the kind of guy more than willing to spend a weekend in Grozny, because I have an active interest in Caucasus culture, distinguishes me greatly from you losers. And having advised the Georgian government on energy policy, I assure you I am expert in this subject while you are all just silly parlor intellectuals.

That's a little too over the top, even for him.

Posted by: at February 25, 2008 04:24 PM

Hello, Mr Schwarz.
I, too, do an awful lot of work within the industry. And seen within the larger context, this is quite normal, though I wouldn't necessarily say that it's a good thing.

The new coal-fired power plants going up? Well, those are super-critical steam generators, nothing like what you would think of a coal-fired power plant being like.
There was a natural physical limit as to the size of super-critical steam generators that, for a long time, were thought to be natural physical laws. The biggest in the world was built in Pennsylvania in the 1950's.
Then, about 15 years ago, the Japanese developed a new type of steel that would be able to withstand those steam conditions. Overnight, things changed.

Meanwhile, the Germans have developed more efficient generators as well.

At one time, American technology was the leader in wind power. Then the Danes. And we will likely never reclaim that world-leader status.

Now, instead of exporting our technology and having the best in the world, we're struggling to catch up to the level where other nations have been for decades.

And, granted, the regulatory environment was a big part of this. Acid rain changed things.
The lack of standards for CO2 emissions meant that development of that technology got put on the back burner, while other countries plugged on.
I remember seeing an article in the American Chemical Society's magazine several years ago written by researchers from the University of Beijing about the use of target-specific ionic liquids for use in controlling CO2 emissions. An old technology, granted, but its use with CO2 is relatively new. Surprised the hell out of me that something like that could come out of China.

No, it is highly unlikely that we will ever be world leaders in any area of energy development ever again.

Posted by: Progressive Traditionalist at February 25, 2008 04:49 PM

CORRECTION:
I should have noted earlier that the world's largest super-critical steam generator is now in Osaka, Japan.

Posted by: Progressive Traditionalist at February 25, 2008 05:02 PM

The only way in which we're getting the short-end of the stick is that it takes more energy to construct wind-turbines than they will generate over their lifetimes and only exist because of subsidies. Is that why you said it doesn't bode well?

Posted by: TGGP at February 25, 2008 07:55 PM

it takes more energy to construct wind-turbines than they will generate over their lifetimes...

If this is the case, wouldn't it apply to all other machines that generate electricity, too? Must take a lot of energy to build a hydroelectric dam or a nuclear plant, right? And if that's the case, shouldn't the net flow of electricity to our civilization be negative? Why are my lights still on?

Posted by: SteveB at February 26, 2008 08:06 AM

If this is the case, wouldn't it apply to all other machines that generate electricity, too?
No, not all energy generators are created equal.

Must take a lot of energy to build a hydroelectric dam or a nuclear plant, right?
Relative to the amount of energy they generate?

And if that's the case, shouldn't the net flow of electricity to our civilization be negative? Why are my lights still on?
Because it isn't the case for other forms of energy.

Posted by: TGGP at February 26, 2008 11:18 AM

@progressive traditionalist:

Surprised the hell out of me that something like that could come out of _________.

is it (a) japan, (b) korea, (c) taiwan, or (d) china? depends what year it is....

Posted by: hapa at February 26, 2008 01:31 PM

@Progressive Traditionalist - I don't disagree with any point that you made, except the last one. The US remains a world leader in many scientific fields, although this status is rapidly eroding. We could stop this slide for what is really very little money. I work at Argonne National Laboratory - where much of the nation's fundamental energy research occurs - and you'd be shocked if I told you what the budget here is not. (Hint - it's not $bns.) Another $100mm would go a long way.

@hapa - You made a very interesting mistake. The wind turbine EROI is ~18, meaning 18x, not a percentage (you wrote 35%). So that turbine will take from wind 18x the electrical energy required to manufacture it.

The EROI from coal and nuclear are, in fact, much less. My opinion, the EROI from nuclear is actually negative, but it's not easy to prove. For one thing, people get nervous if you snoop around and figure out just how to process (enrich) the material required to run the nuclear plant!

Posted by: Aaron Datesman at February 26, 2008 04:23 PM

Hey, ignore what I just wrote. I need a bigger monitor. I read "35x" - what hapa wrote, totally correct - as "35%". My mistake.

Posted by: Aaron Datesman at February 26, 2008 04:27 PM