Wednesday, July 23, 2008

A brief thought about oil....

There was an oil spill in the Mississippi River today; the Coast Guard closed about 30 miles of the river to navigation, basically shutting down shipping. Rather ironically, it forced the cancellation of a McCain campaign appearance on a Louisiana oil rig, intended to show his support for expanded coastal oil drilling.

Now here's what I'm wondering... with all the fuss abotu oil prices lately, how would it change things if the media started reporting spills in terms of the cost of the oil, rather than the quantity? Yes, I know, values change but quantities don't, but I thought it would be a good moment for Aufklarung.

So here's the math....

Bloomberg had the price of crude oil at $124.80 per barrel this afternoon, down from the record high of $147 per barrel two weeks ago.

Multiply that by the approximately 400,000 barrels released in the spill.

That's almost fifty million dollars worth of oil-- $49,920,000.00, to be picky.

Some of the oil will be recoverable, but most will not. I'm not even going to try to calculate the cost of the spill cleanup, ecological damage, lost business due to shipping delays, etc. Ploonk. You're $50 million in the hole right there.

Just FWIW-- if it had been ethanol that was spilled, it probably wouldn't have been any better. Ethanol is cheaper, but not free (and highly soluble, so it'll dissolve and be almost impossible to recover) whereas many constituents of crude oil float rather than dissolve or sink).

Ethanol has about 65% the oomph-per-volume of gasoline, but costs about 75% as much to produce (less oomph per dollar), so all up you're actually going to consume more ethanol to get the same oomph in your gas tank.

EDIT-- ok, time for a slight correction. The source I used for the above bit said it was 400,000 barrels of crude. I have since found out that it was in fact 400,000 gallons (9,983 barrels) of No. 6 fuel oil. 9,983 x the $50.75/barrel price that seems to be the going rate around here = $506,637.20 Ok, so there's a big difference between $50 million and a half million.... but the point, I think still stands;)

Oh, and No. 6 oil is sludge, tarry stuff that tends to sink.

Monday, July 21, 2008

pure-strain (comedy) gold

Just when you thought you had heard every ridiculous, far-fetched, completely out-to-lunch idea there is.......... Republicans happen.

You see, dear readers and obedient minions, the Republican Party seems to be having a crisis of some sort, having realized that the last eight years were a complete disaster. Case in point, Rep. Tom Davis (R-Va.), who said "The Republican brand is in the trash can. I've often observed that if we were a dog food, they would take us off the shelf." Iraq- 'nuff said. Afghanistan-- people are remembering what that was all about, and wondering where Bin Laden is, closing on seven years after the 9/11 attacks. Eight years of Republican economics and banking deregulation not only brought us the housing market crash and the repeated plummets of the stock markets, but a rapidly increasing number of bank failures and the need for the federal government to bail out Fannie Mae and Freddie Mac, the two government-sponsored banking entitites that have their thumbs in the pies of most of the housing mortgages in the country.

The end result is that Barack Obama is beating seven kinds of hell out of John "Bush's Third Term" McCain, who is so screwed up that his own essays get rejected by the New York Times (which solicted them) because he regurgitates endless mush and refuses to speak to the issue they wanted him to discuss (specifically, what 'victory' is).

So someone in the Republican Party's apparatus decided it was a bright idea to put out a call for conservative bloggers and laypeople on the Intersystemoftubesweb to submit ideas on stuff the party should include in the national platform. The basic idea seems to have been something like the 1994 Contract with America that Newt used, abused, and refused to win a Republican majority in Congress, except starting from the ground up rather than the top down (i.e. asking people what they thought was important, rather than telling them what they should think is important). The party leadership apparently thought the result would the the same old self-affirming menage-a-trois of God, guns, and gays that made Republicanland such a wonderful place to live, as long as you are a white, straight conservative evangelical Christian, e.g. Charlton Heston.

Bzzzzt. Wrong.

Ron Paul's supporters deluged the website with libertarian-leaning suggestions and sharp criticisms of the party's recent leadership for embracing needless wars, pork-barrel spending on a scale never before seen, and the systematic defilement of virtually every branch and office of government, from the Justice Department to the Air Force Academy.

Were irony not passé, I would call this ironic, but as we all know, hubris is the new irony. Permit me to indulge in a Biblical reference, which is somewhat apropos under the circumstances. Tom Delay and the other priests of Baal who preached of a 'permanent Republican majority' have had their day, Ahab's throne is tottering, the years of drought are here, Israel has taken to its collective tents, and now Elijah has marched back out of the wilderness … and he is not happy at all.

If there is to be any future to the Republican party, the leadership had better listen to the 'Paulites' and listen well, because the party as it is simply cannot go on. Bigotry and bile will only get you so far—eventually you have to show people that you can actually do something to make their lot better, and the last eight years of George W. Bush and the three most recent Republican-controlled Congresses show just how little good they can do when left in charge of a government that they pretend to despise as a hindrance to Truth, Justice, the American Way, and other useful fictions, and which they simultaneously depend on to support their system of political cronyism. "God, guns, and gays" does not keep banks from collapsing or maintain levees in New Orleans.

OK, I let the political hoof-stomping go a little longer than I had intended, I admit, but now on to what actually prompted me to write this post.

One of the linchpins of Ron Paul's agenda is to put the United States' currency back on the gold standard, or in other words require that all paper money or coinage be backed by an actual quantity of gold stored in Fort Knox or some such place, and thus has some notional intrinsic worth. Keep in mind that the use of the gold standard had for all intents and purposes collapsed by 1971, in large part because it was not flexible enough to accommodate the inflation and economic growth (or decline) going on at the time. Staying on the gold standard would have ruined the world's economies. Do I like the idea that governments can basically print as much or as little money as they want, and deliberately manipulate financial instruments as tools of political agendas or social engineering (e.g. China's artificial government-mandated exchange rate with the dollar, which keeps Chinese goods cheap)? No. Absolutely not. Do I think we could go back on the gold standard after almost four decades off it, in which finance has mutated and mutated again? Once again, no. Absolutely not. Even if it could be achieved without wrecking the global economy, it would be extremely difficult. In any case, remember Gresham's Law—bad money drives out good, because people hoard the good money for a rainy day (taking it out of circulation) and spend the bad money.

There are those, however, who embrace the idea of the gold standard as a touchstone of value, a thing by which all other things can be measured. If you assume that the intrinsic value of gold is fixed and that there is a finite and invariable amount of gold in the world, this would make sense. The actual value of gold is the buying power, however, and that changes in response to the demand for the commodities you'd use the gold to buy. For example, during a bad famine the price of grain would skyrocket, and the price of gold would correspondingly weaken, since the same amount of gold would buy less grain. Likewise, economies were turned thoroughly upside-down in sixteenth-century Europe by the arrival of vast new quantities of gold from the New World; the price of gold, and most other commodities, and labor, all dropped through the floor. The price of gold also fluctuates—during the 1960s, the Bretton Woods Accords required governments to try to keep the price of gold fixed at US $35 per ounce. The price today is US $967 per ounce, which is much higher than even fifty years of inflation could account for. Two weeks ago it was a bargain at $957 an ounce.

Neither is the amount of gold in the world fixed-- the world's gold supply more than doubled during the 20th Century, in large part due to industrial exploitation of existing gold mines in places like China and South Africa, and new discoveries in Siberia.

There are also those, including some conservative Muslims, who take literally the scriptural or traditional requirements to use religiously-sanctioned coinage, such as gold dinars, for religious transactions such as charitable donations, bride-prices, etc. For that matter, in 2006 Malaysia began minting dinars to the historic Islamic standard established by the 7th-century Caliph Umar (an amount of gold equivalent to 72 grains of barley, or 4.25 grams of 22-karat gold; this is suspiciously similar to the Roman coinage known as the denarius) in an attempt to establish an international reference coinage for the Islamic world.

One of the more amusing proposals I found while browsing Wired's articles on the Republican Web Plea was this one, by one Bob in Clemons, NC:

"We need to abolish the Federal Reserve and go back to the gold standard. Not just any gold though, I heard about this stuff, pure-strain gold that has been around since God created the universe. That's what we should base our currency around since it is so close to God."

Hm. Is 'God, gold, gays and guns' too long of a mission statement?

Anyways, the idea of 'pure-strain gold' tickled my curiosity bone and off I went, using all my mad ph4T g00gl3 H4xx0R s|<1llz. There really isn't much out there on it, and even less of that is of actual substance. An alarming amount of what comes up stems from, which is what it says on the tin. Heck, for all I know this could be some sort of internet meme that somebody passed off on the Republicans as a joke.

The idea seems to be this—that when some unmoved mover (thank you, St. Thomas Aquinas) that may or may not be a god created the universe, a certain amount of the matter created in the Big Bang (or whatever scriptural account you choose to believe) was in fact, Element No. 79 on the periodic table, one of the transition metals. Yep, gold. Large quantities of hydrogen also appeared, enough to apparently make it the most common element in the universe, but it is less clear where the second most common element, stupidity, came from.

Gold was always valuable because it had a somewhat otherworldly cachet—rare, shiny (this metric of value also applies to Gucci, Prada, Ferrari, and those cheap Christmas ornament toys parrots like to play with) invulnerable to most acids, not very reactive, extremely malleable, didn't corrode or discolor, very dense, and so on. Industrialized society eventually added electrical conductivity to that list. Supposedly this 'pure-strain gold' is therefore the purest and most unalterable form of gold there is, since gold is supposedly nonreactive, cannot be diluted and exists in a finite quantity, is a physical souvenir of the creation of the universe by the hand (or noodly appendage) of God Themselves. That would be Bob's ultimate benchmark of value—ancient magical gold from the dawn of time.

I'll leave it to the astrophysicists to determine whether or not 'pure strain gold' is even theoretically feasible; I don't know what elements they expect were first spawned in the furnaces of creation, much less can I fathom how a lump of Ur-gold could survive billions of years of time without being affected. Perhaps this is one of those ideas best left to people who know for an absolute fact that the world was created on the 21st of October in 4004 BC (it was a Sunday).

For my part, however, one cannot work in the field I do and not pick up the odd bits of chemistry, especially important concepts like reactivity (the vital practical application of which is How Not To Make Things Go Boom). Gold is not very reactive by any standard, especially when compared with elements like sodium, which go bang when you drop them in water. It does, however, react with elements in the halogen family, (e.g. hydrofluoric acid * to form chloroauric acid, a process used in recovering gold from electronic parts) and bonds quite happily with chlorine to form various types of auric chloride, or with cyanide compounds (sometimes used in gold plating work). Gold readily forms alloys with many metals, including silver, copper, and so on. On top of that, there are (I admit, I googled it) fifteen radioisotopes of gold which are constantly shifting in their atomic makeup, since that's what radioisotopes do.

*Alchemists historically made much of this stuff, referring to it as aqua regia, or royal water, because it could dissolve metals such as gold and platinum, that were immune to the attacks of other acids.

You know what? If this makes me a goddam lib'rul left-wing east coast elitist, then I like it and so be it…since at least I know stuff and can think for myself. I'll pass on the lattes, though.