Next Big Future: united states

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June 27, 2008

Iraqis: 43% say Iraq is going well while 17% of americans say USA on right track

An Ipsos poll indicates that 17% of Americans feel that the United States is on the right track

An opinion poll in February, found that 43% of Iraqis felt that things were going well in Iraq So more than twice the percentage of Iraqis are polling positively about their country versus the percentage of Americans who are polling positively about the USA.

Progress in various areas, such as the economy and security, and actions by the Government of Iraq (GOI) have improved the situation in Iraq. An opinion poll conducted in February found that 43% of Iraqis thought that things were going well in Iraq, up from 22% in September of 2007. The rising price of oil combined with improvements in production has given the GOI more money to spend than before the First Gulf War and the subsequent embargo of Iraqi oil. This increase in revenue has not yet led to noticeable positive change in public services and economic growth remains constrained by the lack of skilled employees in both the public and private sectors; the middle class makes up much of Iraq’s refugees and internally displaced. However, 12 million Iraqis now use cellular phones and 261,000 are Internet subscribers, both of which were negligibly by Iraqis prior to Operation Iraqi Freedom.

Foreign oil companies, with both capital and technical expertise, could feasibly extract an additional 3.5 million barrels of oil, adding 4% to the global supply of crude. While Iraq’s oil infrastructure is aging and in need of a multi-billion dollar investment to contemporize it, Iraq sits atop the world’s fourth largest oil reserve, a fact which appeals to investors

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FURTHER READING
The Economist magazine summarizes the mostly improved Iraq situation

June 26, 2008

New Oil production for the United States: Thunder Horse

The British Petroleum offshore oil rig Thunder Horse started production on June 14, 2008 This is US domestic oil in the gulf of Mexico. It will be producing 250,000 barrels of oil per day in 2009.

Thunder Horse page at BP.com

The new production is still not enough as the CIBC is predicting $200 per barrel of oil and $7 per gallon in the USA by 2010.

While Americans are already driving 11 billion fewer miles than they did last year, a decline of 4.3%, they still drive today about 30% more than they did before the OPEC oil shocks. The elasticity of driving to gasoline prices is estimated to be around the 0.06. That means a 10% rise in gasoline prices will eventually lead to a 0.6% reduction in miles driven. Using that rule of thumb, the 280% cumulative rise in gasoline prices between 2004 and our target $7 per gallon target price should induce more than 15% reduction in miles driven on American roads.

This would be predicted to apply a hit to the US economy.

At a minimum, once the worst of the housing shock passes, the Fed will be forced to raise real interest rates back to zero in order to prevent an improving economy from allowing wages and other prices to catch up to oil. With CPI trending at an energy- and food-driven 4%, that will entail 200 basis points in tightening to get to a 4% funds rate by the end of next year. As a result of our upward revised call for both oil and interest rates, we’ve chopped our US growth forecast for 2009 from just over 2% as of two months ago, to little over 1%, no better than this year’s housing-blunted performance. The US economy has managed to avoid feeling the full brunt of oil prices over the last few years, but 2009 will be the year that its luck runs out

Thunder Horse’s actual “production profile” hinges on “well performance” and “how fast we are able to drill and connect new wells,” BP spokesman Ronnie Chappell cautioned.

The Thunder Horse field is located in Mississippi Canyon Blocks 776, 777 and 778, in the Boarshead Basin, 125 miles south-east of New Orleans. It is the largest field in the Gulf of Mexico and lies at a water depth of 6,000ft. The field was discovered in 1999. BP operates the development (75% interest), with co-venturer ExxonMobil owning the balance. The reservoir consists of Upper Miocene turbidite sandstones 6,000m beneath the seabed in 1,900m of water. Pressures exceed 1,200bar and temperatures reach 135°C

Norway Alvheim; Volund; Vilje had first oil June 9, 2008 as well.
Marathon Oil believes the Alvheim; Volund; Vilje output will be at 75,000 bpd in early 2009

FURTHER READING
Other oil megaprojects for 2008

Russia's Yuzhno-Khylchuyuskoye "YK" for July 2008 start to get 150,000 bpd in 2009
Russia's Vankorskoye for October 2008 to get 420,000 bpd peaking in 2017
Brazil Marlim Sul Mod 2 P-51 for August 2008 to get 180,000 bpd
Brazil Marlim Leste P-53 for August 2008 to get 180,000 bpd
Brazil Marlim Leste (FPSO Cidade de Niteroi) Dec 2008 for 100,000 bpd
Canada's Horizon Oil Sands Project (Phase I) for Sept 2008 start to get 110,000 bpd

China moving to World Bank Upper middle income classification in 2010

Although China's economic size on an exchange rated basis has passed Germany this year and will pass Japan in 2009 and will probably pass the United Statesin 2016, China is still classifed as a lower middle income country by the World Bank. This means that using a 3 year average of exchange rates and looking at the GDP according to the Atlas method on July 1st of a year, that China has per capita GDP between $906 - $3,595.

At the end of 2009, China's currency could have appreciated and the size of its economy grown so that it has $4153 per capita of GDP. But the level at the middle of the year not including Hong Kong and Macau would be about $3500. So it would take until 2010 to get to $3890 per capita using the 3 year average of currency appreciation if this sites forecast for growth and currency were correct. When China passes the United States it will probably not be what the World bank considers a high income country with per capita income at $11,116 or more.

UPDATE: The Economist magazine reports that China has a lot of hot money flowing into the country ($500 billion in 2008)

This causes inflation pressure and requires that China mass sterilization. Excess liquidity is mopped up by by issuing bills (as “sterilisation”) or by lifting banks’ reserve requirements. But all this complicates monetary policy.

To curb future inflation, China therefore needs to stem the flood of capital.

One solution would be a large one-off appreciation of the yuan so that investors no longer see it as a one-way bet. This, in turn, would give the PBOC room to raise interest rates. The snag is that the yuan would probably have to be wrenched perhaps 20% higher to alter investors’ expectations, and this is unacceptable to Chinese leaders, especially when global demand has slowed and some exporters are already being squeezed.

This implies that monetary policy will remain too loose. The longer that the torrent of hot money continues and interest rates remain too low, the bigger the risk that underlying inflation will creep up.

Thus the constant appreciation at a rate as fast or slightly faster than the 7% of the first half of 2008 seems likely. Perhaps 20-25% over the next 18 months. This would put the exchange rate with the US dollar of 5.15 to 5.5 at the end of 2009.

Achieving World Bank Upper middle income per capita income levels would be getting up to the level of Jamaica and a little better than Thailand in 2006. High income is getting up to the level of Hungary in 2006 or better.

When people say that China cannot catch up the overall size of the US economy then they are saying that China cannot raise per capita income to the level of Hungary.

China is a massive country with a population several times Europe. So the move to different income levels is and will be uneven. Shanghai is passing into High income levels. Hong Kong and Macau area already high income. The coastal cities and provinces are already upper middle income and will move to high income levels first. The rural and interior areas will lag at low income and lower middle income levels.

FURTHER READING
The 2006 list of upper middle income countries

American Samoa, Argentina, Belize, Botswana, Brazil, Bulgaria, Chile,
Costa Rica, Croatia, Dominica, Equatorial Guinea, Gabon, Grenada,
Hungary, Kazakhstan, Latvia, Lebanon, Libya, Lithuania, Malaysia,
Mauritius, Mayotte, Mexico, Montenegro, Northern Mariana Islands, Oman,
Palau , Panama, Poland, Romania, Russian Federation, Serbia,
Seychelles, Slovak Republic, South Africa, St. Kitts and Nevis,
St. Lucia, St. Vincent and the Grenadines, Turkey, Uruguay,
Venezuela, RB

China will have an installed nuclear power capacity of 40 million kilowatts on the mainland by 2020, or four percent of the total installed power generation capacity. New official projects with a combined capacity of 23 million kilowatts are being launched, involving a total investment of 450 billion yuan (about $60 billion).

June 25, 2008

Amory Lovins distorts nuclear energy and promotes air pollution

Amory Lovins wrote the nuclear illusion which looks at the data from 2000 forward or 1990 forward but he claims a decades long (plural so at least two decades and Lovins has been claiming nuclear collapse since the 1970s) collapse of nuclear energy.

Since 1980, nuclear power TWH has increased by over 400%. So Amory Lovins is wrong about nuclear energy being a collapsing industry.

The charts that Lovins uses are only looking at 2000 forward or look at "new additions" when the bulk of nuclear power generation increases was from operating improvement and uprates to existing reactors.

The "micropower" is mostly diesel, biomass and natural gas of small and big sizes. Natural gas has 4 deaths per TWH (Externe source). So 2500 Twh (to displace nuclear power) would be 10,000 deaths per year. The diesel (oil) portion is 35 deaths per TWH. The biomass about 10 deaths per TWH (35,000 deaths per year if diesel was the main source). The blended rate of deaths per TWH from micropower is over 12 deaths per TWH. Far higher than the 0.65 deaths per TWH calculated by Externe for nuclear power. Even if the micropower deaths per TWH was cut in half for lower distribution losses the number is still far higher. Diesel and natural gas are not renewable. Over 75% of the power that Lovins is talking about is diesel, natural gas and biomass.

Deaths per TWH for all energy sources
Natural gas is not renewable. So is Lovins advocating an increase of more than double the US military deaths of the 5+ years of the Iraq war every year from more natural gas air pollution and other causes ?

All energy build costs went up with the increase in commodity prices (steel, concrete, oil)

There are wind turbine shortages and backorders for several years for the large efficient turbines.

Nuclear operating costs and efficiency are on continuing to the improvements that they have made for decades.

Laser uranium enrichment 3-10 times cheaper and more efficient.

Existing nuclear power plants are getting 20 year extensions and power uprates.
MIT/Westinghouse commercializing new 50% power uprates for annular fuel.

FURTHER READING
Further analysis of deaths per TWH

Nuclear power build in China and the rest of the world

Feed in tariffs subsidies for renewables

Energy costs with externalities

Staffing an expanding nuclear industry

constructing a lot of nuclear power is not supply constrained

Nuclear forging bottleneck is being addressed

Idaho national lab plan to extend nuclear plants to 80 years of operation and increase build in the USA to over 10 reactors per year

New smaller and mass produced reactors will address the larger finance issues

Mass producable uranium hydride reactors

The Fuji molten salt reactor

THE DEBATES ON NUCLEAR ILLUSION
David Bradish critique part 1 vs Nuclear illusion

David Bradish critique part 2 vs Nuclear illusion

David Bradish critique part 3 vs Nuclear illusion

David Bradish critique part 4 vs Nuclear illusion

Gristmill rebuttal part one

Gristmill/Lovins rebuttal part 2

Amory Lovins supports "clean coal"

Amory Lovins fossil fuel apologist

June 24, 2008

Gas centrifuge versus laser uranium enrichment

General Electric has licenced and is commercializing a laser uranium enrichment process. The Silex laser uranium enrichment process has been indicated to be an order of magnitude more efficient than existing production techniques but again, the exact figure is classified.

Australian scientists Michael Goldsworth and Horst Struve developed the process, and from 1996 to 2002 received support from the United States Enrichment Corp. (Bethesda, MD); the two scientists have since formed a public corporation, Silex Systems (Lucas Heights, NSW, Australia). Last year they licensed the Silex process to General Electric. The process is based on selective excitation of uranium hexafluoride (UF6) molecules that contain U-235 by laser light at a narrow spectral line near 16 µm, but few details have been released (see figure). The Los Alamos National Laboratory (Los Alamos, NM) initially explored the concept three decades ago, but the U.S. Department of Energy later abandoned it in favor of atomic-vapor laser isotope enrichment.

The CO2 lasers can generate 1 J pulses, but only at a limited repetition rate, and only a fraction of the pulse is in the pump band. Unspecified “additional nonlinear optical tricks” are needed to convert the CO2 pump light to the correct wavelength to pump the Raman cell. The lasers are 1% efficient and the Raman conversion 25% efficient, so the overall efficiency is 0.25%.

With many details classified or proprietary, it is hard to quantify the processing. Lyman wrote that if a laser could illuminate a one-liter volume at an ideal repetition rate, it would take about 100 hours to produce one kilogram of U-235-assuming complete separation of the U-235 and U-238 isotopes. However, most processes require multiple stages of separation, and according to Lyman’s comments, a 5000 Hz laser would be needed to process all the feed stream (a mixture of UF6 and an unidentified diluting gas).

Solid state lasers able to be continuously tuned from the 0.2 to 10 micron range

Free electron lasers can operate 3 to 100 microns and in the 6-35 micron ranges

The US Navy has funded development of megawatt solid state free electron lasers for delivery in 2012

The new solid state lasers could be more efficient for the desired frequency and wavelengths.

The specific energy consumption is 2300-3000 kWh/SWU for Gaseous Diffusion, versus 100-300 kWh/SWU for gas centrifuge. The number of stages required to produce LEU is about 30 times larger in the diffusion plant than in the centrifuge plant.

A kilogram of LEU requires roughly 11 kilograms U as feedstock for the enrichment process and about 7 separative work units (SWUs) of enrichment services. To produce one kilogram of uranium enriched to 3.5% U-235 requires 4.3 SWU if the plant is operated at a tails assay 0.30%, or 4.8 SWU if the tails assay is 0.25% (thereby requiring only 7.0 kg instead of 7.8 kg of natural U feed).

Areva's recently announced Idaho enrichment plant, estimated to cost $2 billion, is expected to supply 3 million SWU or half the capacity of the GE plant at full production. The full-scale GE plant, expected to supply 3.5-6.0 million SWU, will require additional investor commitments. The GE laser enrichment plant would start at 1 million SWU/year and then get expanded Close to one million kilograms/year of enriched uranium using 7 SWU per kg.

25 page powerpoint presentation made April 2008 on Silex

Silex is also examining Oxygen-18 (PET medical imaging) and Carbon-13 (medical diagnostic) laser separation.
FURTHER READING
Laser enrichment at Idaho Samizdat

Silex company site

Worldwide Uranium demand and Nuclear Reactor fuel requirements translate into a requirement for uranium enrichment separative work services in the range 35–38 million SWU/year over the next 10 years.

About 120,000 kg SWU are required to enrich the annual fuel loading for a typical large (1,000 MWe) nuclear reactor.

The Silex process is inefficient for highly enriched uranium at this time

The up to ten times greater enrichment efficiency improves the energy efficiency of nuclear power and the cost efficiency of nuclear fuel and operations.


Uranium: 8.9 kg U3O8 x $53    472 
Conversion: 7.5 kg U x $12     90 
Enrichment: 7.3 SWU x $135    985 [Silex could reduce this by 3-10 times]
Fuel fabrication: per kg      240 
Total, approx:           US$ 1787

June 20, 2008

Updated China economic projection

China's GDP in 2007 was 24.66 trillion yuan ($3.38 trillion) and per capita GDP was $2,556, official figures suggest.

UPDATE of this May article:
China's currency is now 6.88 yuan to 1 USD. China's GDP is now $3.78 trillion.

Hong Kong's GDP is $409 billion in 2008

Including Hong Kong and Macau China has $4.2 trillion GDP.

China reports its own military spending at about 417.8 billion yuan. [US$60.7 billion] which would put China as the fourth largest spender after the USA, France and the UK

Rand has estimated China's spending to be 33% higher than reported amounts and DoD doubles the military spending. Either adjustment would put China as the second largest military spender but well behind the USA's military spending.

The Economist magazine noted that China's national economic figures have been inaccurate but that the provincial numbers which show 10% higher growth have historically been shown to be more correct.

Stephen Green, an economist at Standard Chartered, calculates that in 2007 the combined output of the provinces was 10% more than that reported by Beijing. Their average growth rate of 13.1% was also still 1.2 percentage points higher than the revised national growth rate, although the gap has narrowed from almost three points in 2005.

Updated projection for currency, US recession and China but not with the 10% higher provincial growth numbers and the new 2007 GDP number. If growth did average 1.2% faster and US growth was weaker then China could pass the USA on an exchange rated basis in 2014. My updated likely estimate is for 2015-2018 for China's economy to pass the USA economy. The most likely years are 2016-2017. The latest exchange rate is 6.94 [6.88 June 20, 2008] yuan to 1 USD. Key factors are the pace of change in the exchange rate, the degree to which China can maintain high growth and how fast the US economy grows. As previously noted at this site: China should maintain high growth until 2020 because of the migration of 1-2% of the population each year from rural areas to urban areas. Those people over a few years provide 4 times as much gdp per capita. This provides a boost of 3-6% to the annual growth rate.


Year GDP(yuan) GDP growth Yuan per USD China GDP China+HK/Ma US GDP 
2007 24.66      11.9%      7.3           3.38      3.7       13.8  
Jun08 26.0                 6.88          3.78      4.2            Past Germany
Oct08 26.7                 6.65          4.0       4.45
2008 27.3       10.2%      6.35          4.3       4.8       14.0 
2009 30.1        9.8%      5.62          5.4       5.9       14.2 Pass Japan
2010 33.7        9.5%      5.11          6.6       7.1       14.6
2011 37.0        9.5%      4.64          8.0       8.5       15.0
2012 40.6        9.5%      4.26          9.5       10.0      15.4
2013 44.2        9.0%      3.91         11.3      11.8       15.9
2014 48.2        9.0%      3.72         13.0      13.5       16.4
2015 52.0        8.0%      3.54         14.7      15.2       16.9
2016 56.2        8.0%      3.53         16.7      17.2       17.4 Passing USA
2017 60.4        7.5%      3.38         18.8      19.4      17.9 Past USA
2018 64.2        7.0%      3.20         20.9      21.5      18.4
2019 69.2        7.0%      3.09         23.0      23.6      19.0 
2020 74.0        7.0%      3.0          25.2      25.8      19.6
2021 78.4        6.0%      2.9          27.2      27.8      20.2
2022 83.1        6.0%      2.9          29.4      30.0      20.8
2023 87.3        5.0%      2.8          31.5      32.2      21.4
2024 91.7        5.0%      2.8          33.7      34.4      22.0
2025 96.3        5.0%      2.7          36.1      36.8      22.7
2026 101.1       5.0%      2.6          38.7      39.4      23.4 
2027 106.1       5.0%      2.6          41.4      42.1      24.1
2028 111.4       5.0%      2.5          44.4      45.1      24.8
2029 117.0       5.0%      2.5          47.5      48.2      25.5
2030 122.8       5.0%      2.4          50.9      51.6      26.3  Close to double USA

FURTHER READING
China's economy now third largest passing Germany.

Part of the reason for China's GDP growth, lower cost of infrastructure

China is planning to complete rebuilding from the recent earthquake within 3 years. This compares to longer timeframes for US rebuilding after the San Francisco earthquake (still working on the Bay bridge) and from Katrina. The replacement of the eastern span of the Bay Bridge appears like it will cost $6.3 billion and be completed in 2013. 24 years after the 1989 quake.

The rebuilding of damage from China's quake will cost a lot less than repairs in the USA. $10 billion has been set aside for repairs in China.

The new Olympic stadium (the bird nest) only cost $500 million and was completed in 52 months

China has already started demolition of unsafe structures and towns.

Beijing's new airport (the world’s largest and most advanced airport building)is larger than all five London terminals and cost an estimated $3.75 billion to construct, occupies 14 million square feet and was finished in four years. London Heathrow's Terminal 5 took nearly 20 years to build and cost at least twice as much as the one in the Chinese capital.

Chinese and Russian officials signed a $1 billion deal Friday to have Moscow build a nuclear fuel enrichment plant in China and supply uranium.

The deal calls for Russia to build a $500 million nuclear fuel enrichment plant and supply semi-enriched uranium worth at least $500 million. Earlier this year, a Russian company completed work on two 1,000-megawatt light-water reactors for China's Tianwan nuclear power plant south of Shanghai. China plans to build 40 plants by 2020, tripling the nuclear share of its power generation to 6 percent.

Westinghouse secured a $5.3 billion order from China National Nuclear in July to provide four AP1000 nuclear power reactors in Haiyang, Shandong Province and Sanmen, Zhejiang Province, both in eastern China. Four AP1000 in the USA for Florida Power and Light are contracted in 2008 for $13.7 billion, $2927/kw.

June 17, 2008

Defense Science Board examining Synthetic Biology

The Defense Science Board will examine how the Defense Department could benefit from scientific breakthroughs in the field of synthetic biology.

John Young, the under secretary of defense for acquisition, technology and logistics, wants DSB members to “survey” developments in biotechnology and “attempt to project transition paths from research into current and future defense applications,” according to a June 11 memo Young sent to the panel’s chairman.

The United Kingdom's Biotechnology and Biological Sciences Research Council's released a report 'Synthetic Biology: social and ethical challenges' on June 9 2008

There is no agreed definition of synthetic biology, but it is best understood as the deliberate design of biological systems and living organisms using engineering principles.

The technological manipulation of life was first advocated at the turn of the last century and was instrumental in shaping the rise of molecular biology. However, the widespread use of the term has only occurred since the mid-2000s, as the field has emerged owing to the falling cost of gene sequencing and synthesis. The aims of synthetic biology include: 1) the production of minimal living genomes; 2) the design of interchangeable parts that can be assembled into pathways for the fabrication of novel components; 3) the construction of entirely artificial cells; and 4) the creation of synthetic biomolecules.

June 16, 2008

Petavision on petaflop supercomputer models human visual cortex

Just days after the announcement of the first sustained petaflop supercomputer (based on the Linpack computer standard, Japan has had a petaflop computer but not using the Linpack standard) Los Alamos researchers used PetaVision software on the Roadrunner supercomputer to model more than a billion visual neurons surpassing the scale of 1 quadrillion computations a second (a petaflop/s).

On June 9, 2008 scientists used PetaVision to reach a new computing performance record of 1.144 petaflop/s. The achievement throws open the door to eventually achieving human-like cognitive performance in electronic computers. PetaVision only requires single precision arithmetic, whereas the official LINPACK code used to officially verify Roadrunner's speed uses double precision arithmetic.

"Roadrunner ushers in a new era for science at Los Alamos National Laboratory," said Terry Wallace, associate director for Science, Technology and Engineering at Los Alamos. "Just a week after formal introduction of the machine to the world, we are already doing computational tasks that existed only in the realm of imagination a
year ago."

Based on the results of PetaVision's inaugural trials, Los Alamos researchers believe they can study in real time the entire human visual cortex--arguably a human being's most important sensory apparatus.

The ability to achieve human levels of cognitive performance on a digital computer could lead to important insights and revolutionary technological applications.

Such applications include "smart" cameras that can recognize danger or an autopilot system for automobiles that could take over for incapacitated drivers in complex situations such as navigating dense urban traffic.

Los Alamos National Laboratory's computation science team working with Roadrunner includes: Craig Rasmussen, Charles Ferenbaugh, Sriram Swaminarayan, Pallab Datta, all of Los Alamos; and Cornell Wright of IBM.

The PetaVision Synthetic Cognition team responsible for the theory and codes run on Roadrunner includes: Luis Bettencourt, Garrett Kenyon, Ilya Nemenman, John George, Steven Brumby, Kevin Sanbonmatsu, and John Galbraith, all of Los Alamos; Steven Zuker of Yale University; and James DiCarlo from Massachusetts Institute of Technology.

North Dakota Bakken oil increasing 5000-7000 barrels per day each month, Saskatchewan's Bakken oil increasing too

The state (North Dakota's) Industrial Commission reports that North Dakota oil wells pumped an average of 150,578 barrels a day in April. The previous high of 147,774 barrels a day was set in August 1984. North Dakota reported 5700 more barrels of oil per day in March, 2008 March production was 143738 bopd versus February 138013 bopd.

Crescent Point Energy Trust (TSX:CPG.UN) is increasing its Bakken oil in Saskatchewan, Canada spending by $200-425 million. Crescent Point is raising its production guidance by five per cent and its distributions to investors by 15 per cent.

The Calgary-based trust said Monday the increases were due to "significant growth" in its southeast Saskatchewan Bakken resource play, better-than-expected drilling and production results in its core areas, and higher than anticipated commodity prices.

The capital budget is being increased by 89 per cent to advance development at Bakken and add production at a rate of about $25,000 per barrel of oil equivalent.

Crescent Point now expects to exit 2008 with production greater than 37,500 boe per day, and is upwardly revising its 2008 average production forecast by five per cent to 36,250 boe daily.

From the Business Week article:

North Dakota surpassed Kansas in 2006 to become the eighth-largest oil-producing state in the nation, and soon will surpass Wyoming to become seventh among oil-producing states, said Ron Ness, president of the North Dakota Petroleum Council.

North Dakota produced 45 million barrels of oil last year, up about 5 million barrels from 2006, Ness said.

Production this year likely will exceed the record of 52.6 million barrels set in 1984, said Lynn Helms, the director of the state Department of Mineral Resources.

FURTHER READING
More North Dakota oil statistics

June 13, 2008

US Navy may get more nuclear powered

Research and development work on adapting the design of the Ford (CVN-78) class aircraft carrier nuclear power plant for use in a new Navy cruisers CG(X) and could be extended to amphibious assault vessels.

Congress in 2007 passed the National Defense Authorization Act for 2008, an annual piece of legislation that tells the Pentagon how it should spend its budget. Under the act all future aircraft carriers, submarines and battle cruisers have to be built with a nuclear power system at their heart.

The National Defense Authorization Bill for 2009, which the Senate has still to pass, aims to shift the process up a gear by adding various types of amphibious assault ships to the list of those that must be powered by nuclear reactors in the future. Amphibious ships come in various forms, from those that incorporate a dock for landing craft, to undersized aircraft carriers for helicopters and vertical take-off aircraft - or a mixture of both. The vessels' position in combat can also vary - from a "stand-off" over-the-horizon location to being moored to a pier in a combat zone.

Equipping such ships with nuclear reactors would have another advantage in military operations, says Wright. "Assault ships are carrier escort vehicles and will no longer be holding up a carrier task force's progress by having to be refuelled every three to five days," she says.

There was a 2007 study on the use of more nuclear power in the United States Navy

A potential advantage of nuclear power postulated by some observers is
that a nuclear-powered ship can use its reactor to provide electrical power for use
ashore for extended periods of time, particularly to help localities that are
experiencing brownouts during peak use periods or whose access to electrical power
from the grid has been disrupted by a significant natural disaster or terrorist attack. The Navy has stated that the CG(X) is to have a total power-generating capacity of about 80 megawatts (MW). Some portion of that would be needed to operate the reactor plant itself and other essential equipment aboard the ship. Much of the rest might be available for transfer off the ship. For purposes of comparison, a typical U.S. commercial power plant might have a capacity of 300 MW to 1000 MW. A
single megawatt can be enough to meet the needs of several hundred U.S. homes,
depending on the region of the country and other factors.

The Navy is looking to install radar requiring 30 or 31 megawatts of power onto its new Cruiser.

A nuclear-powered CG(X) could cost roughly 32% to 37% more than a conventionally powered CG(X). The Navy estimates that building the CG(X) or other future Navy surface ships with nuclear power could reduce the production cost of nuclear-propulsion components for submarines and aircraft carriers by 5% to 9%, depending on the number of nuclear-powered surface ships that are built.20 Building one nuclear-powered cruiser every two years, the Navy has testified, might reduce nuclear-propulsion component costs by about 7%.

At a crude oil cost of $74.15 per barrel (which was a market price at certain points in 2006), the life-cycle cost premium of nuclear power is:
— 17% to 37% for a small surface combatant;
— 0% to 10% for a medium sized surface combatant; and
— 7% to 8% for an amphibious ship.

Newly calculated life-cycle cost break-even cost-ranges, which supercede the break-even cost figures from the 2005 NR quick look analysis, are as follows:
— $210 per barrel to $670 per barrel for a small surface combatant;
— $70 per barrel to $225 per barrel for a medium-size surface combatant; and
— $210 per barrel to $290 per barrel for an amphibious ship. In each case, the lower dollar figure is for a high ship operating tempo, and the higher dollar figure is
for a low ship operating tempo.

A 2006 Navy study states that for a medium-size surface combatant that is larger than the DDG-1000, an additional cost of about $600 million to $700 million would equate to a procurement cost increase of about 22%. If building a Navy surface combatant or amphibious ship with nuclear power rather than conventional power would add roughly $600 million to $700 million to its procurement cost., then procuring one or two nuclear-powered CG(X)s per year, as called for in the Navy’s 30-year shipbuilding plan, would cost roughly $600 million to $1,400 million more per year than procuring one or two conventionally powered CG(X)s per year, and procuring a force of 19 nuclear-powered CG(X)s would cost roughly $11.4 billion to $13.3 billion more than procuring a force of 19 conventionally powered CG(X)s. For purposes of comparison,the Navy has requested a total of $13.7 billion for the SCN account for FY2008.

UPDATE: The United States navy has 280 active ships The Aircraft carriers (12 current, 2 under construction, 2 planned) and submarines (70 now, 5 under construction or ordered, at least 9 more planned) in the US navy are nuclear powered already.

The US has 10 amphibious assault ships (helicopter carriers) and 11-18 amphibious transport docks.

Amphibious assault ships (small aircraft carriers for marines)
* Tarawa class (3 in commission, 2 decommissioned)
* Wasp class (7 in commission, 1 under construction)

Amphibious transport docks (200 meters long versus 173 meters for a cruiser)
* Austin class (9 in commission, 2 decommissioned, 1 converted to an auxiliary command ship)
* San Antonio class (2 in commission, 3 under construction, 4 more planned)

The US Navy has 22 cruisers and 52 destroyers with 3 under construction, 7 more planned.

Dock Landing ships
* Whidbey Island class (8 in commission)
* Harpers Ferry class (4 in commission)

So 32-50 ships in the amphibious and cruiser categories could become nuclear powered at about 2 at a time over 16-25 years from 2015-2040.

June 12, 2008

Iraq Oil production could increase by 400,000 bpd by the end of 2008

Following up on Iraq Oil status Oil production and output holding steady at higher levels that started in May. Iraq will produce up to 2.9 million bpd by the end of 2008, Hussein al-Shahristani Iraqi Oil Minister 2.9 million bpd would be an increase of about 400,000 bpd from levels at the end of May, 2008 2.53 million bpd.

Starved of access to oil and gas prospects by governments who increasingly favour development by their state oil companies, Western oil companies are eager to invest in Iraq, home to the world's third biggest oil reserves. However, the security situation and an uncertain legal framework have deterred the majors from making significant investment.

Major oil companies have all turned in their proposals for oil service deals and some will be signed this month. Shahristani had warned that Baghdad might drop the oil service contracts, worth about $500 million a piece, if the majors failed to sign deals by June. Five of the deals under discussion are with Royal Dutch Shell (nyse: RDSA), Shell in partnership with BHP Billiton (nyse: BBL), BP (nyse: BP), Exxon Mobil (nyse: XOM) and Chevron (nyse: CVX) in partnership with Total . Iraq is also in talks with a consortium of Anadarko (APC.N), Vitol and Dome for a sixth contract on the Luhais field.

Dow Jones news reports the Iraqi oil ministry is planning to announce the first round of tenders to develop its vast oil fields, which are among the world's largest, at the end of June or the beginning of July, an Iraqi oil official said Monday.

"Iraq is going to announce the first round of tenders to develop super giant oil fields in southern and northern Iraq either at the end of June or the beginning of July," the official told Dow Jones Newswires by telephone from Baghdad.

The official named seven oil fields and two gas fields that would be included in the first tender announcement. They are North Rumaila, South Rumaila, Zubair, West Qurna, and Buzurgan in southern Iraq and Kirkuk and Bai Hassan in northern Iraq. The two gas fields are Akkaz in western part of the country and Mansouriya in the east.

Over the last few months, the ministry has been working to prepare contract models for these fields, the official said. The ministry has signaled that more restrictive service contracts may be used to develop these fields, rather than controversial production-sharing contracts.

The official said the ministry would hold a news conference to announce these new tenders.

Iraq is currently in the final stages of striking what are called Technical Services Contracts, or TSCs, with oil majors to help boost crude oil production in the country's largest producing fields.

Iraqi oil sources said these TSCs could be signed as early as June. Each would last two years and could be extended for another year.

Oil Minister Hussein al-Shahristani has threatened to cancel these TSCs if they aren't signed in June. The TSCs are designed to boost Iraq's crude oil production from producing oil fields.

Iraq wants to boost production by 600,000 barrels a day in six producing oil fields in northern and southern Iraq. They are Kirkuk in the north, West Qurna 1, Zubair, Missan, Rumaila and Luhais in the south.

FURTHER READING
State Department Iraq Weekly Report for June 11, 2008

United States might finally build a new oil refinery in 2013

The first new oil refinery in the United States in thirty years is one step closer.

Union County residents voted 58 percent to 42 percent Tuesday to endorse the rezoning of almost 3,300 acres of pristine farm land north of Elk Point for the oil refinery. Texas-based Hyperion Resources requested the rezoning for the $10 billion refinery, billed as a potential step toward national energy independence.

It will process 400,000 barrels of oil per day (mostly from Canada's oilsands) and will likely be in operation in 2013.

North Dakota reported 5700 more barrels of oil per day in March, 2008 MArch production was 143738 bopd versus February 138013 bopd.

Reece Energy Exploration Corp. rose to a third-straight record in Toronto after saying it found oil in the first well it drilled in the Bakken area in Saskatchewan

http://news.google.com/news?hl=en&tab=in&ned=us&ie=UTF-8&ncl=1219754152

FURTHER READING
Previous coverage of North Dakota's Bakken Oil

Daily North Dakota drilling and production reports (after 6 months on confidential list)

North Dakota oil statistics

June 11, 2008

Death and Taxes

U.S. life expectancy has been steadily rising, usually by about two to three months from year to year. This year's jump of fourth months to 78.1 years is
"an unusually rapid improvement," Preston said.

The preliminary number of deaths in the United States in 2006 was 2,425,900, a 22,117 decrease from the 2005 total. With a rapidly growing older population, declines in the number of deaths (as opposed to death rates) are unusual, and the 2006 decline is likely the result of more mild influenza mortality in 2006 compared with 2005.

37 page preliminary analysis of the proposed McCain and proposed Obama tax plans The plans would reduce tax revenues by $3.7 trillion (McCain) and $2.7 trillion (Obama) over the next 10 years, or approximately 10 and 7 percent of the revenues scheduled for collection under current law, respectively.

This is confirming this site's previous analysis that Obama's plan to tax the rich will not result in more tax revenue More of what people in the higher income brackets report will be taxed but there will be less revenue because of changes in tax strategies to avoid taxation.

So the CDC report on 2006 US life expectancy and the Urban Institute and Brooking Instition tax policy center analysis are indicating less death and less tax revenue.

Tax plan summaries

Senator McCain would permanently extend the 2001 and 2003 tax cuts, increase deductions for taxpayers supporting dependents, reduce the corporate income tax rate, and allow immediate deductions for the cost of certain short-lived capital equipment. Senator Obama would permanently extend certain provisions of the 2001 and 2003 tax cuts primarily affecting taxpayers with incomes under $250,000; increase the maximum rate on capital gains and qualified dividends; and enact new and expanded targeted tax breaks for workers, retirees, homeowners, savers, students, and new farmers. Senator McCain proposes to extend permanently the AMT "patch" that has prevented most individuals and families with incomes below $200,000 from being affected by the tax, and in our interpretation of his proposal, Senator Obama would do the same. Each candidate would also increase the estate tax exemption and reduce the estate tax rate compared with current law in 2011 and beyond, although Senator McCain would cut the tax much more than Senator Obama. Finally, each candidate promises to broaden the tax base and reduce corporate loopholes. McCain lists eight breaks for oil companies as targets but, other than that, is short on details for his pledge to eliminate "corporate welfare." Obama identifies a variety of steps, including basis reporting for capital gains, taxing carried interest as ordinary income, and enacting sanctions on international tax havens that don't cooperate with enforcement efforts, but he would also need additional as-yet-unspecified policies to achieve his revenue target for base broadening.

How there were fewer deaths in 2006

The 2006 increase is due mainly to falling mortality rates for nine of the 15 leading causes of death, including heart disease, cancer, accidents and diabetes.

"I think the most surprising thing is that we had declines in just about every major cause of death," said Robert Anderson, who oversaw work on the report for the health statistics center.

The overall death rate fell from 799 per 100,000 in 2005 to about 776 the following year.

Perhaps the most influential factor in the 2006 success story, however, was the flu. Flu and pneumonia deaths dropped by 13 percent from 2005, reflecting a mild flu season in 2006, Anderson said. That also meant a diminished threat to people with heart disease and other conditions. Taken together, it's a primary explanation for the 22,000 fewer deaths in 2006 from 2005, experts said.

FURTHER READING
History of tax in the USA

2007 tax brackets at wikipedia

Top incomes and composition (salary, business income, capital gains)

Year top rate and income level of top rate

Tax policy center site

tax brackets by year

Individual tax rates

How many in the higher tax brackets

Sources of historical tax information

Historical networth 1989 to now

Effective tax rates

Updates on World Oil Production and Demand

IEA (International Energy Agency) weekly oil report was issued June 10. Global oil product demand is expected to average 86.8 mb/d in 2008, 80 kb/d below last month’s estimate, following the reduction of price subsidies in several non-OECD countries. Global growth is cut even more steeply by 230 kb/d to +0.9% or +800 kb/d when historical upward revisions to 2006 and 2007 data are factored in.

Global oil supply rebounded by 490 kb/d in May to average 86.6 mb/d, lifted by higher OPEC crude supply. The rise however comes after extensive downward revisions to 1Q08 non-OPEC production and lower biofuels and NGLs for the rest of this year. Despite this, a recovery in non-OPEC output is forecast for the second half of 2008.

World Oil Demand is still larger than supply by 1 million b/d.

The US EIA (Energy Information Administration) posted their May, 2008 International Petroleum Monthly on June 9, 2008.


In thousands of barrels per day. Oil Production.

Time Period       USA P. Gulf OAPEC  OPEC  World      
2008 January..E 8,624 23,979 25,121 36,594 85,530
     February E 8,625........24,208 36,885 85,827
     March...PE 8,664 24,219 25,361 36,784 85,730
2008 3Mth AvgPE 8,638........24,134 36,751 85,693

The Persian Gulf countries are Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Production from the Kuwait-Saudi Arabia Neutral Zone is included in Persian Gulf production.
OAPEC: Organization of Arab Petroleum Exporting Countries: Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, and the United Arab Emirates.
OPEC: Organization of the Petroleum Exporting Countries: Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

FURTHER READING
The Full IEA Oil Market Report. 60 page PDF.

June 09, 2008

Obama's plan to tax the rich won't work

Businessweek discusses Obama's plan to increase the marginal tax rate back to the level under Bill Clinton and before the Bush tax cuts

Of the 149 million households filing federal income taxes for 2006, some 3% reported income between $200,000 and $500,000; fewer than 1% claimed income above half a million dollars.

The Bush administration instituted a federal tax cut for all taxpayers. Among other changes, the lowest income tax rate was lowered from 15% to 10%, the 27% rate went to 25%, the 30% rate went to 28%, the 35% rate went to 33%, and the top marginal tax rate went from 39.6% to 35%

Many people believe that increasing the marginal rate will collect more revenue from the the rich or for the government in general. Historically it does not matter if the top marginal rate is 90% or 25% the government collects 19.5% of GDP. The only way to get more tax revenue is to increase GDP. Such as a concerted effort to accelerate a manufacturing and construction revolution using new systems and technology.

Economists of all persuasions accept that a tax rate hike will reduce GDP, in which case Hauser's Law says it will also lower tax revenue. That's a highly inconvenient truth for redistributive tax policy, and it flies in the face of deeply felt beliefs about social justice. It would surely be unpopular today with those presidential candidates who plan to raise tax rates on the rich – if they knew about it.

Although Hauser's Law sounds like a restatement of the Laffer Curve (and Mr. Hauser did cite Arthur Laffer in his original article), it has independent validity. Because Mr. Laffer's curve is a theoretical insight, theoreticians find it easy to quibble with. Test cases, where the economy responds to a tax change, always lend themselves to many alternative explanations. Conventional economists, despite immense publicity, have yet to swallow the Laffer Curve. When it is mentioned at all by critics, it is often as an object of scorn.

Because Mr. Hauser's horizontal straight line is a simple fact, it is ultimately far more compelling. It also presents a major opportunity. It seems likely that the tax system could maintain a 19.5% yield with a top bracket even lower than 35%.

The fact that no matter what the rates and brackets all that can be obtained is 19.5% that argues for as simple a tax code as possible for getting that 19.5%.

The fair tax
or a
Relatively flat tax

The wealthier someone is then the more control they can have over their financial profile. Money can be shifted between income, corporate profits, dividends and capital gains and new income can be shifted between jurisdictions.

FURTHER READING

Tax brackets 1971-1978

1975 Median income 11,800 Mean income 13,779
Someone making 5 times the median income. Would be in the 60k-70k range.
(equal to someone now making 200,000).
Tax rate would be 53-55%.

1965 Median income was $6900 Five times that was 35,000 for 50-53% tax rate.

CBO analysis of long term taxes

Heritage examination of taxes

Comparing some tax burdens between countries

Comparing top marginal individual and corporate tax rates

Historical lessons of lower tax rates

Los Alamos Roadrunner supercomputer will run at over one petaflop/second sustained speed in 2009

Roadrunner is a cluster of approximately 3,250 compute nodes interconnected by an off-the-shelf parallel-computing network. Each compute node consists of two AMD Opteron dual-core microprocessors, with each of the Opteron cores internally attached to one of four enhanced Cell microprocessors. This enhanced Cell does double-precision arithmetic faster and can access more memory than can the original Cell in a PlayStation 3. The entire machine will have almost 13,000 Cells and half as many dual-core Opterons.

Scientists at the Los Alamos government weapons lab will have built the world's fastest computer. It will run at a sustained 1,000 trillion operations per second. Roadrunner will also be the first computer to run the universally recognized code used to test supercomputer performance—LINPACK—at over 1 petaflop/s. Roadrunner supercomputer scheduled for installation at Los Alamos starting this summer 2008, with full operation targeted for early 2009.

The $133 million Roadrunne