A Necessary Disruption

The tariffs on steel and aluminum just enacted by Trump as a protectionist move, are only the first step in what could be a helpful set of new trade restrictions on carbon-intensive products. They are also the first step in what could become the re-invigoration (however short-lived) of the U.S. manufacturing sector. It may not take a deliberate strategy to limit imports for these two lines of dominos to fall. Trade wars sparked by the steel tariffs leading to reciprocal tariffs in a tit-for-tat exchange could be just what we need to end America's global overreach and reduce the carbon footprint of our consumption.

All the backlash at home over the tariffs is not so much over the added cost of consumer products in the U.S., but over the risk that imposing tariffs puts on economic growth should it spark trade wars. (A trade war with China is driven more by moves soon coming out of the U.S. investigation into that country's intellectual property violations.) There would ensue recessions in the U.S., Europe, China, and Japan. As long as shooting wars are avoided, this, too, would be helpful. We need to cease our exploitation of planet Earth. A zero growth economy would be more sustainable than what we have, but considerable diminishment is needed first, in order to return us from our current overshot condition.

If military conflicts arise out of Trump's protectionist moves, we have it coming to us, the way we forced ourselves on countries like Japan when they were contentedly isolated until Admiral Perry showed up. Yet the rise of globalism could now be running in reverse. The tide may have turned, making isolationism the new ideal. Brexit was the start. Ultimately, not only could nativism predominate, but localism. Such an arrangement would be more resilient, if less intermittently harmonious, than that of the past couple of centuries. This is precisely what we need in order for human inhabitants to abide the climate catastrophes approaching.

Making America Small Again

President tRump's intentions for improving the economy may actually include some useful preparation for the "high" of our first turning which is due to begin in about a decade. Assuming this next turning will entail a less complex, more fragmented society, rather than the Great America tRump is shooting for, the @RealGreatDivider may accidentally usher us into a transition to smallness.

Smallness, in this case, refers to the size of corporations. With trade wars and import taxes in the offing, U.S.-owned international manufacturers are going to suffer some setbacks. While these will cost jobs at home, especially in the South and Midwest, small domestic manufacturers will gain opportunities to fill the home market demand for various goods/substitutes at more competitive prices. The big company jobs lost in the process may shift to smaller companies, especially if layoffs provoke more entrepreneurship.

Photo by Jo Morcom

The Small Business Administration will have to play an outsized role in perpetuating that shift to some 700,000 small businesses created every year. Someone who started and ran an outlandish enterprise like World Wrestling Entertainment (WWE) could be just right for the job. As one of the few women cabinet officials, former boss of wrestlers Linda McMahon is a good match for the other showman in the room.

Not that tRump, himself, isn't pro-small business. The Apprentice cast its competitors in entrepreneurial roles and tRump ostensibly selected winners. Picking talent; it's what he does. So far, he has made a point to reduce regulatory burdens on small businesses and to improve their financial situation through efforts to eliminate Obamacare and increase access to loans. Realizing how intent tRump is on encouraging entrepreneurship even helps explain why he felt compelled to ask for prayers for Arnold Schwarzenegger. Celebrity Apprentice symbolizes the way forward - we need a few million successful "apprentices" in order for small businesses to make up for the disruptions tRump is creating.

Whether these steps will be sufficient to avoid a recession in the next year or two is doubtful


but, it may make something of a recovery possible to a more regional or local, sustainable society. By then, we will be able to kiss tRump good-bye and welcome our country's new Green leaders.

Collapse's Silver Lining

Photo by Lynne Hand

Maryland's Energy Administration can claim the lion's share of the progress in greenhouse gas reduction for the state over the past seven years, though several facets of the EmPOWER Maryland Program are led by other agencies. Transportation, which emits roughly one-third of the state's greenhouse gases, has not been a major contributor to Maryland's success in pursuit of the 2020 mandated emissions reductions. Greenhouse gases emitted by vehicles has decreased, but not at a rate that would make the 25% reduction anticipated by the Maryland Commission on Climate Change. Page 40 of MDOT's annual attainment report has a bar graph that cuts through a lot of obfuscation.

Ironically, Maryland will probably meet not only the 2020 target for greenhouse gas (GHG) reduction, but also the additional 15% reduction mandated by the 2016 version of the Greenhouse Gas Reduction Act. You may think that electric vehicles will be a big part of the reason, but I am thinking more in terms of the slowdown in the economy that will come about when the central banks have lost all control of the financial system. The Great Recession had the salutary effect of lowering GHG emissions. It appears that nature has a different view of goodness than the majority of humans, at least as measured by the greenhouse effect. While many will see the collapse of the financial system (coming soon to an economy near you) as a catastrophe, take comfort in the thought that it may also be the salvation of the world.

Electro-technology Dreams

Offshore wind turbines may or may not appear off the coast of Maryland.  The US Wind lease of over 125 square miles of ocean to build a 750 MW wind power array by 2020 would be a first for the U.S. In spite of the apparent progress (ocean surveys, turbine purchase actions), financial headwinds face Italy where US Wind's parent company, Renexia, resides. Just recovering from the aftermath of the 2008 financial crisis, Italy will face the coming worldwide recession too early.  Renexia's lack of financial transparency is not at all reassuring.

Aside from solar and wind, generating electricity on a residential scale from biomass, fuel cells, or closed-conduit hydropower include the opportunity to net-meter (that is, sell power on the grid) in Maryland.  Micro-combined heat and power (CHP) installations also qualify. Micro CHP (not to be confused with microchip) is exactly the kind of power that can be generated from a heat source such as those used to make biochar.  A start-up company called NanoConversion Technologies is coming out with a thermoelectric generator that they say beats Stirling engines, cost-wise.  The problem of capturing and using the waste heat from biochar could thereby be made a lot more feasible, since the operating temperature is near that for these devices. The components, which hold sodium, alumina, hot and cold fluids, and electro-magnetic fields, seem like they would cost considerably, so economics may prove to be the difficulty with this technology, as well.  However, they show humanitarian relief as a possible application of the device, so I may be pleasantly surprised at the price-tag.

The Fracking Gamble

+Gail Tverberg 's theory about the deflationary spiral of oil prices (she thinks we are locked in to a price slide that will bottom out around $20/barrel) also applies to natural gas.  The fact that Chesapeake Energy (the U.S.'s second largest natural gas producer) is headed toward junk status supports this corollary.  A lot of Chesapeake's problem stems from land speculation with the intention of drilling and fracking.  These land deals were conducted with money from bright-eyed investors who never understood the economics of fracking and are now realizing how little real value most of the shale plays held.  Chesapeake's co-founder, Aubrey McClendon, seemed to know when to leave the party, as he departed the company in 2013.

He chose the name for the company out of a liking for the Chesapeake Bay area, despite the company's Oklahoma roots.  From Oklahoma, Chesapeake Energy's gas pipelines grew toward the Chesapeake Bay like a mycelium seeking humid climes to sprout its mushrooms.  After the fracking potential of the Marcellus Shale became known, the company surged further, to Pennsylvania. The pipeline assets were spun off years ago and now belong to Williams.

With the current demise of fracking due to the inability of the market to support the infrastructure and loss of investor interest, many natural gas companies will go under.  The price of natural gas should rise, however, once the markets have sloughed off the non-performing suppliers.  As coal is replaced by natural gas electricity generation, demand for gas should continue to grow.  The long-term damage to prices that Tverberg expects for oil may not apply to natural gas.

While the Chesapeake Bay region may have been the divining rod for Aubrey McClendon's vision of where Chesapeake Energy should go, it is there that he met the greatest opposition over the environmental repercussions of fracking.  Fracking has emboldened the U.S. to rescind laws against oil exporting and to build natural gas export facilities, such as the Cove Point Plant expansion underway a few miles from my home.  Aside from the public outcry against fracking, there are geological limits, climate considerations for which we are now internationally accountable, and the impending economic recession wrought largely by the same commercial ennui that brought about the energy price slump.  Fracking may never come back.  Cove Point may never export any liquefied natural gas.

The Future of Mass Transportation

One of Maryland author John Michael Greer's oddities (other than being an archdruid)
is that his preferred mode of intercity transportation is passenger rail.  In fact, he chose his adopted town, Cumberland, MD, partly because of its proximity to a working train station. The motivation for he and his wife's move to this Allegheny rust-belt arts-centric village was that we would soon enough become a more regionally-scaled economy, reverting from a global or national scale.  Underlying that conviction was the view that oil would not be abundantly cheap in the near future, driven by the occurrence of global peak oil. Rail travel would then become relatively more important.

It looks like JMG's move is now going to be validated, as we've arrived at peak oil. Although oil prices are much lower than in recent history, the price drop is driven by falling demand, which, along with a host of other commodities, shows that the world is entering a global recession. The fact that the Federal Reserve raised interest rates this month reduces debt-driven growth, so demand for oil, et. al., will continue to fall. Rather than a result principally of geological shortages of oil, which may have brought about a gradual decline in production, peak oil is instead being driven by incongruous financial behavior wherein increasing debt is no longer sustainable.  The interest rate rise is a signal that there will be a significant drop in worldwide oil production.  That is a synopsis of the view of Gail Tverberg, who, along with JMG spoke to us at the Age of Limits Conference in May 2013.  Ms. Tverberg points out that if there were a low-cost substitute for oil that we could deploy today, the fallout from peak oil could be ameliorated, but that appears to be years away.  Not even solar power appears to be cost-competitive enough yet to avert a premature end of the oil era.

If you haven't ridden a train or bus lately, it would be a good idea to start getting used to it.  Once airlines lose favor due to their excessive costs, shorter trips on these more economical vehicles will become the norm. It might surprise you to find out that trains still serve much of the country.  Besides AMTRAK, Maryland has its own MARC train system.  Unfortunately, due to the impending recession, I don't think Elon Musk will get the chance to speed trains up by turning them into air tube pods.