Toxic Loans Around the World Weigh on Global Growth

Preface.  Obviously endless growth on a finite planet is impossible.  Clearly the main “benefit” of debt is being able to rape and pillage the planet immediately.  The accumulating debt can never be paid off, because energy is required to grow GDP (they’re locked in a death embrace) and death begins when oil declines, so will GDP, and most debts won’t be repayable.  All of this debt allows us to extract resources NOW at the expense of future generations.

Here’s a recent article about debt, though not as good as it could be, since as usual, it’s energy and resource blind, but it’s probably clear to most people who read it that this can’t end well: December 2019 The Way Out for a World Economy Hooked On Debt? Yet More Debt (Bloomberg).

February 5, 2016 The Chart of Doom: When Private Credit Stops Expanding

Alice Friedemann www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Eavis, P. February 3, 2016. Toxic Loans Around the World Weigh on Global Growth. New York Times.

Beneath the surface of the global financial system lurks a multi-trillion-dollar problem that could sap the strength of large economies for years to come.

The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising.

China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country’s annual economic output.

Official figures show that Chinese banks pulled back on their lending in December. If such trends persist, China’s economy, the second-largest in the world behind the United States’, may then slow even more than it has, further harming the many countries that have for years relied on China for their growth.

But it’s not just China. Wherever governments and central banks unleashed aggressive stimulus policies in recent years, a toxic debt hangover has followed. In the United States, it took many months for mortgage defaults to fall after the most recent housing bust — and energy companies are struggling to pay off the cheap money that they borrowed to pile into the shale boom.

In Europe, analysts say bad loans total more than $1 trillion. Many large European banks are still burdened with defaulted loans, complicating policy makers’ efforts to revive the Continent’s economy. Italy, for instance, announced a plan last week to clean out bad loans from its plodding banking industry.

Elsewhere, bad loans are on the rise at Brazil’s biggest banks, as the country grapples with the effects of an enormous credit binge.

“If you have a boom and then a bust, you create economic losses,” said Alberto Gallo, head of global macro credit research at the Royal Bank of Scotland in London. “You can hope the losses one day turn into profits, but if they don’t, they are a drag on the economy.”

In good times, companies and people take on new loans, often at low interest rates, to buy goods and services. When economies slow, these debts become difficult to pay for many borrowers. And the bigger the boom, the more soured debt that is left behind for bankers and policy makers to deal with.

In theory, it makes sense for banks to swiftly recognize the losses embedded in bad loans — and then make up for those losses by raising fresh capital. The cleaned-up banks are more likely to start lending again — and thus play their part in fueling the recovery.

But in reality, this approach can be difficult to carry out. Recognizing losses on bad loans can mean pushing corporate borrowers into bankruptcy and households into foreclosure. Such disruption can send a chill through the economy, require unpopular taxpayer bailouts and have painful social consequences. And in some cases, the banks might find it extremely difficult to raise fresh capital in the markets.

Even so, the drawback of delaying the cleanup is that the banks remain wounded and reluctant to lend, damping any recovery that takes place. Japan, economists say, waited far too long after its credit boom of the 1980s to force its banks to recognize huge losses — and the economy suffered for years after as a result.

Now many banking experts are beginning to worry about China’s bad loans.

Fears that the country’s economy is slowing have weighed heavily on global markets in recent months because a weak China can drag down growth globally.

Many of these concerns focus on China’s banking industry. In recent years, banks and other financial companies in China issued a tidal wave of new loans and other credit products, many of which will not be paid back in full.

China’s financial sector will have loans and other financial assets of $30 trillion at the end of this year, up from $9 trillion seven years ago, said Charlene Chu, an analyst in Hong Kong for Autonomous Research.

“The world has never seen credit growth of this magnitude over a such short time,” she said in an email. “We believe it has directly or indirectly impacted nearly every asset price in the world, which is why the market is so jittery about the idea that credit problems in China could unravel.

Headline figures for bad loans in China most likely do not capture the size of the problem, analysts say. In her analysis, Ms. Chu estimates that at the end of 2016, as much as 22 percent of the Chinese financial system’s loans and assets will be “nonperforming,” a banking industry term used to describe when a borrower has fallen behind on payments or is stressed in ways that make full repayment unlikely. In dollar terms, that works out to $6.6 trillion of troubled loans and assets.

“This estimate really isn’t that unreasonable,” Ms. Chu said in the email. “We’ve seen similar ratios in other countries. What’s different is the scale, which reflects the massive size of China’s credit boom.” She estimates that the bad loans could lead to $4.4 trillion of actual losses.

Although there is not enough official data to come up with a precise figure for bad loans, other analysts have come up with estimates of around $5 trillion.

Given the murkiness of the Chinese financial industry, other analysts arrive at estimates for a “baseline” figure for bad loans. Christopher Balding, an associate professor at the HSBC School of Business at Peking University, said that an analysis of corporations’ interest payments to Chinese banks suggested that 8 percent of loans to companies might be troubled. But Mr. Balding said it was possible that the bad loan number for China’s overall financial system could be higher.

The looming question for the global economy, however, is how China might deal with a vast pool of bad debts.  After a previous credit boom in the 1990s, the Chinese government provided financial support to help clean up the country’s banks. But the cost of similar interventions today could be dauntingly high given the size of the latest credit boom. And more immediately, rising bad debts could crimp lending to strong companies, undermining economic growth in the process.

“My sense is that the Chinese policy makers seem like a deer in the headlights,” Mr. Balding said. “They really don’t know what to do.

In Europe, for instance, some countries have taken years to come to grips with their banks’ bad loans.

In some cases, the delay arose from a reluctance, at least in part, to force people out of their homes. Even though Ireland’s biggest banks suffered huge losses after the financial crisis, they held back from forcing many borrowers who had defaulted out of their homes. In recent years, the Irish government has pursued a widespread plan that aims to reduce the debt load of financially stressed homeowners. Such forbearance appears not to have weakened the Irish economy, which has recovered at a faster rate than those of other European countries.

Still, the perils of waiting too long are evident in Italy, which in January announced a proposal to help banks sell their bad loans. Some critics of the plan say it resembles a government bailout of the banks, while other skeptics say the banks might not use it because it appears to be too expensive.

“The big problem in the Italian system is that they acted very late,” said Silvia Merler, an affiliate fellow at Bruegel, a European research firm that focuses on economic issues. “They could have done something smarter — and they could have done it earlier.”

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Paul Chefurka: More thoughts on Sustainability

The critical feature of sustainability isn’t how many people can be supported by the planet at any given moment in time. Rather, it is the number of humans that could live here without irreparably damaging the biosphere we depend on for survival.

A sustainable species never damages the biosphere irreparably. That’s a pretty tall order.

Humans damage the biosphere in many ways.

One is by shifting resources in space. We usurp the habitat and resources needed by other species, and sequester them for human use. Resources obtained in regions that are unimportant to humans are moved to wherever humans need them, at the expense of indigenous species in the original location.

We also shift resources in time, by stealing resources from the past and the future and using them in the present. An example of this is using fossil fuel energy to pump water out of aquifers for agriculture, thereby using historical fossil fuel resources to diminish future water resources, in favour of growing crops today.

We usurp habitat from other species simply by moving humans to that location, and in the process making it inhospitable to indigenous life (the affected indigenous life doesn’t even need to be non-human…) The sequestering of habitat and resources for human use often go hand in hand.

The unsustainability of our species at any time can be roughly gauged by the degree to which we have concentrated the the spatial and temporal distribution of resources into the here and now, and the extent to which humans have displaced wild life of all sorts.

In contrast, being a fully sustainable presence would require us to do no damage to the planet that could not be repaired by natural biophysical processes in real time.

Given such constrained behaviour, the human species could survive for a very long time indeed (perhaps tens of millions of years) alongside all other sustainable species. Of course, any damage that can’t be repaired invokes the concept of overshoot, which will shorten our species’ period of survivability by some (unknown, perhaps unknowable) amount.

It should be obvious to everyone here that our species’ current way of life is “quite unsustainable” by these criteria.

Is it possible to return our species to sustainability? To answer that question it helps to have a benchmark. When was the last time Homo sapiens might have qualified as a sustainable species using these criteria?

In my opinion, the timestamp has to be placed at least prior to the invention of agriculture, since it was agricultural technology that kicked off the population and cultural growth that got us here.

Before the development of agriculture (as distinct from the horticulture practiced by many hunter forager societies), the global human population is estimated to have been about 6 million people, with an annual growth rate around 0.02%

Such a population of 6 million hunter foragers could perhaps be considered sustainable, except for a couple of caveats.

One caveat is population growth. With a climbing net birth rate it didn’t take long for a population of 6 million to turn into 6 billion. We managed it in just over 12,000 years, at an average growth rate of a measly 0.06%. Our current growth rate is over 1%, 50 times higher than the 0.02% of “Homo sustainabilensis”.

The other caveat is per-capita consumption growth, as well as the growth in technology that is required to sustain both growing population and consumption levels.

Per-capita consumption can be loosely approximated by energy consumption, since all material goods require energy to produce. A hunter-forager consumed about 150 watts in food and fuel. A modern human uses more than twenty times that amount. This energy use amplifies the damage done to the biosphere by the growing number of humans.

So, 6 million humans all living as hunter-foragers might be considered sustainable. But only if they were to maintain a permanently static population capped at 6 million, and a static level of per-capita consumption capped at the equivalent of 150 watts of energy use.

By this estimate, compared to our nominally sustainable forebears we are already in overshoot by a factor of about 25,000. And it’s climbing with every new mouth and every increase in energy consumption.

(Sarcasm generator on)

Humanity could of course move back toward sustainability. Easy-peasy. All we’d have to do is: reduce our population by almost 7.5 billion; stop population growth completely; reduce our energy consumption and the activity that it drives – say by 90%); and eliminate all technological development that results in greater energy consumption (I’m looking at you, William Stanley Jevons.)

(Sarcasm off)

What? We can’t/won’t do that? I know that. This isn’t an exercise in goal-setting. It’s an exercise in measuring the width of the Atlantic Ocean in case we’re ever inclined to try swimming across it.

https://www.facebook.com/notes/bodhi-paul-chefurka/more-thoughts-on-sustainability/10159062669402589/
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Tuna fishery threatened

Preface.  Both the sardine and tuna fisheries are threatened. Only peak oil and decline can possibly save them from extinction.

Alice Friedemann www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Leschin-hoar, C. 2019. We’re pulling tuna out of the ocean at unprecendented — and unsustainable rates. NPR.

A new study, published in Fisheries Research, reveals that the sheer amount of tuna being taken from our seas, including some species considered “vulnerable,” has increased by an astonishing 1,000% in the last 60 years — a rate that some scientists are saying is unsustainable.

Not only are we taking more tuna from the oceans than ever before, but we’re also harvesting them farther from shore. Industrial tuna fishing now covers somewhere between 55% and 90% of the global oceans, fueled in part by extensive government subsidies.

Everywhere tuna swim, they’re being pursued by industrial fisheries.

The report also draws attention to the amount of bycatch taken in the pursuit of tuna. The study estimates that just under 6 million metric tons of shark were discarded as bycatch between 1950 and 2016 in the Pacific Ocean alone. Much of that was made up of blue sharks, which take many years to mature and produce few offspring.

“There’s been an incredible push to end dolphin bycatch in tuna fisheries because they’re cute,” says Coulter. “But sharks are apex predators. They hold all these food chains together. If we’re removing these sharks [from the ecosystem], they really can’t catch up and will decline more and more.”

Milius, S. 27 Feb 2012. Sardine fishery may be in peril. Conditions in northeast Pacific echo those related to collapse last century. Science News.

The Sardine fishery was once the largest of any species in the Western hemisphere.  It’s still very important to whales, seabirds, and predatory fish.  It collapsed in the 1940s from overfishing the bigger and older fish, and an oceanic cycle called the PDO (Pacific Decadal Oscillation), and now it looks like history is about to repeat itself for the same reasons.

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Hydrogen fuel cell cars are a waste of time and money, and explosive

Preface. Below are several articles about hydrogen.  Today in 2019 it is still far from commercial.  A massive amount of infrastructure needs to be in place before people will consider buying hydrogen fuel cell cars, and because of explosions in South Korea, Norway, and California, building this infrastructure is going slowly.

Hydrogen fuel cells in the news:

2021 Researchers develop tool to aid in development, efficiency of hydrogen-powered cars.  Explains why we are still far from workable hydrogen fuel cells, and “fixing” the problem with nano technology when we are headed for a much simpler world where that will be out of reach is not a direction towards a solution either

Alice Friedemann   www.energyskeptic.com  author of “Life After Fossil Fuels: A Reality Check on Alternative Energy”, 2021, Springer; “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Collapse Chronicles, Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Chatsko M (2017) Will Platinum Doom Hydrogen Cars? fool.com

Several automakers are planning on a hydrogen-car revolution, but the global scarcity of platinum could prove difficult to overcome. Material scientists are worried about the world not having enough platinum since hydrogen fuel cells require significantly more catalytic material than gas or diesel vehicles, because platinum catalysts kick-start the energy-producing hydrogen reaction itself.

Reuters. 2019. Explosions and subsidies: Why hydrogen is struggling to catch on in Korea. Accidents and infrastructure are holding it back. Reuters.

SEOUL — Aiming to cash in on a major push by South Korea to promote fuel cell vehicles, Sung Won-young opened a hydrogen refueling station in the city of Ulsan last September. Just one year on, he’s thinking about closing it down. Sung’s new hydrogen station is one of five in Ulsan.

The government paid the 3 billion won ($2.5 million) cost – six times more than fast charging equipment for battery electric cars – and the two pumps, located next to Sung’s gasoline stand, see a steady flow of Hyundai Nexo SUVs daily.

EvSung hasn’t been able to turn a profit, hamstrung as the equipment can only refuel a limited number of cars each day.  Refueling takes about 5-7 minutes, but the next driver must wait another 20 minutes before sufficient pressure builds in the storage tank to supply the hydrogen or the car’s tank will not be full.

That means only about 100 fuel cell cars can be fueled a day, compared to up to 1,000 at his gasoline stand. Many drivers can also not be bothered to wait 20 minutes and leave without a full tank.

If those impediments to commercial viability were not enough, a fatal hydrogen storage tank explosion this year has spurred protests against the government and Hyundai’s ambitious campaign to promote the zero-emissions fuel. In May, a hydrogen storage tank at a government research project in the rural city of Gangneung exploded. It destroyed a complex about half the size of a soccer field, killing two and injuring six. A preliminary investigation found the blast was caused by a spark after oxygen found its way into the tank.

One month later, there was an explosion at a hydrogen refueling station in Norway. This week, a hydrogen gas leak and subsequent fire at a South Korean chemical plant caused three workers to suffer burns.

Potential station operators have gotten cold feet since the explosions.

Szymkowski. 2019.  Following hydrogen facility explosion, fuel-cell vehicle owners left stranded. The explosion happened in June, but some owners have been forced to park their cars due to lack of fuel. cnet.com

An explosion at a hydrogen fuel production facility shows the industry has a long way to go before fuel cell-powered vehicles can truly be considered a reliable alternative to the internal-combustion engine.

Green Car Reports reported Thursday that hundreds of fuel-cell vehicle owners had no choice but to park their cars due to a hydrogen fuel shortage. The explosion, which happened in Santa Clara, California, this past June, effectively choked the supply of hydrogen to fueling stations in the San Francisco Bay Area. The stations have been dry ever since.

2005. A Committee on the Present Danger Policy Paper:  OIL & SECURITY by George P. Shultz, former secretary of state, and R. James Woolsey, former CIA director

To have an impact on our vulnerabilities within the next decade or two, any competitor of oil-derived fuels will need to be compatible with the existing energy infrastructure and require only modest additions or amendments to it.

Although there are imaginative proposals for transitioning to other fuels, such as hydrogen to power automotive fuel cells, this would require major infrastructure investment and restructuring. If privately-owned fuel cell vehicles were to be capable of being readily refueled, this would require reformers (equipment capable of reforming, say, natural gas into hydrogen) to be located at filling stations, and for natural gas to be available there as a hydrogen feed-stock. So, not only would fuel cell development and technology for storing hydrogen on vehicles need to be further developed, but the automobile industry’s development and production of fuel cells also would need to be coordinated with the energy industry’s deployment of reformers and the fuel for them.

Moving toward automotive fuel cells thus requires us to face a huge question of pace and coordination of large-scale changes by both the automotive and energy industries. This poses a sort of industrial Alphonse and Gaston dilemma: who goes through the door first? (If, instead, it were decided that existing fuels such as gasoline were to be reformed into hydrogen on board vehicles instead of at filling stations, this would require on-board reformers to be developed and added to the fuel cell vehicles themselves — a very substantial undertaking.)

It is because of such complications that the National Commission on Energy Policy concluded in its December, 2004, report “Ending The Energy Stalemate” (“ETES”) that “hydrogen offers little to no potential to improve oil security and reduce climate change risks in the next twenty years.” (p. 72)

Senate 109–385. November 16, 2005. High costs of crude: the new currency of foreign policy.  U.S. Senate Hearing.    39 pages.

[ Much of the above, and in addition: ]

R. James Woolsey:

We should forget about 95 percent of our effort on hydrogen fuel cells for transportation.

Hydrogen fuel cells have real utility in niche markets for stationary uses. But the combination of trying to get the cost of these one-to-two-million-dollar vehicles that run on hydrogen down, at the same time one coordinates a complete restructuring of the energy industry so one has hydrogen at filling stations, and does a complete restructuring of the automotive industry so one has hydrogen fuel cells, is a many decades-long undertaking.

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Wind, solar, and natural gas are driving nuclear power out of business

Preface. I’m no fan of nuclear power because we may already be at peak uranium, there’s nowhere to store nuclear waste, and a spent nuclear pool fire could harm millions of people.

But renewable wind and solar and natural gas (which is finite) are driving renewable nuclear power plants out of business.

Alice Friedemann www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Dunai, M., et al. 2019. Nuclear energy too slow, too expensive to save climate: report. Reuters.

Nuclear power is losing ground to renewables in terms of both cost and capacity as its reactors are increasingly seen as less economical and slower to reverse carbon emissions, an industry report said.

“Stabilizing the climate is urgent, nuclear power is slow,” said Mycle Schneider, lead author of the report. “It meets no technical or operational need that low-carbon competitors cannot meet better, cheaper and faster.”

The report estimates that since 2009 the average construction time for reactors worldwide was just under 10 years, well above the estimate given by industry body the World Nuclear Association (WNA) of between 5 and 8.5 years.

In May, the International Energy Agency warned reut.rs/2mqcG8j that a steep decline in nuclear capacity will threaten climate goals, as advanced economies could lose 25% of their nuclear capacity by 2025 and as much as two-thirds by 2040 (Clercq 2019 IEA rings alarm bell on phasing out nuclear energy. Reuters).

Eduardo Porter. July 19, 2016. How Renewable Energy Is Blowing Climate Change Efforts Off Course. New York Times.

Germany, Europe’s champion for renewable energy, seems to be having second thoughts about its ambitious push to ramp up its use of renewable fuels for power generation.  Hoping to slow the burst of new renewable energy on its grid, the country eliminated an open-ended subsidy for solar and wind power and put a ceiling on additional renewable capacity.

Germany may also drop a timetable to end coal-fired generation, which still accounts for over 40% of its electricity, according to a report leaked from the country’s environment ministry. Instead, the government will pay billions to keep coal generators in reserve, to provide emergency power at times when the wind doesn’t blow or the sun doesn’t shine.

Renewables have hit a snag beyond Germany, too. Renewable sources are producing temporary power gluts from Australia to California, driving out other energy sources that are still necessary to maintain a stable supply of power.

In Southern Australia, where wind supplies more than a quarter of the region’s power, the spiking prices of electricity when the wind wasn’t blowing full-bore pushed the state government to ask the power company Engie to switch back on a gas-fired plant that had been shut down.

But in what may be the most worrisome development in the combat against climate change, renewables are helping to push nuclear power, the main source of zero-carbon electricity in the United States, into bankruptcy.

The United States, and indeed the world, would do well to reconsider the promise and the limitations of its infatuation with renewable energy.

“The issue is, how do we decarbonize the electricity sector, while keeping the lights on, keeping costs low and avoiding unintended consequences that could make emissions increase?” said Jan Mazurek, who runs the clean power campaign at the environmental advocacy group ClimateWorks.

Addressing those challenges will require a more subtle approach than just attaching more renewables to the grid.

An analysis by Bloomberg New Energy Finance, narrowly distributed two weeks ago, estimated that nuclear reactors that produce 56% of the country’s nuclear power would be unprofitable over the next three years. If those were to go under and be replaced with gas-fired generators, an additional 200 million tons of carbon dioxide would be spewed into the atmosphere every year.

The economics of nuclear energy are mostly to blame. It just cannot compete with cheap natural gas. Most reactors in the country are losing between $5 and $15 per megawatt-hour, according to the analysis.

Nuclear energy’s fate is not being dictated solely by markets, though. Policy makers focused on pushing renewable sources of energy above all else — heavily subsidizing solar and wind projects, and setting legal targets for power generation from renewables — are contributing actively to shut the industry down. Facing intense popular aversion, nuclear energy is being left to wither.

As Will Boisvert wrote in an analysis for Environmental Progress, an environmental organization that advocates nuclear energy, the industry’s woes “could be remedied by subsidies substantially smaller than those routinely given to renewables.” The federal production tax credit for wind farms, for instance, is worth $23 per megawatt-hour, which is more than the amount that nuclear generators would need to break even.

Nuclear generators’ troubles highlight the unintended consequences of brute force policies to push more and more renewable energy onto the grid. These policies do more than endanger the nuclear industry. They could set back the entire effort against climate change.

California, where generators are expected to get half of their electricity from renewables by 2030, offers a pretty good illustration of the problem. It’s called the “duck curve.” It shows what adding renewables to the electric grid does to the demand for other sources of power, and it does look like a duck.

As more and more solar capacity is fed onto the grid, it will displace alternatives. An extra watt from the sun costs nothing. But the sun doesn’t shine equally at all times. Around noon, when it is blazing, there will be little need for energy from nuclear reactors, or even from gas or coal. At 7 p.m., when people get home from work and turn on their appliances, the sun will no longer be so hot. Ramping up alternative sources then will be indispensable.

The problem is that nuclear reactors, and even gas- and coal-fired generators, can’t switch themselves on and off on a dime. So what happens is that around the middle of the day those generators have to pay the grid to take their power. Unsurprisingly, this erodes nukes’ profitability. It might even nudge them out of the system altogether.

How does a renewables strategy play out in the future? Getting more power from renewables at 7 p.m. will mean building excess capacity at noon. Indeed, getting all power from renewables will require building capacity equal to several times the demand during the middle of the day and keeping it turned off much of the time.

Daily fluctuations are not the end of it. Wind power and sunlight change with the seasons, too. What’s more, climate change will probably change their power and seasonality in unforeseen ways. Considering how expensive wind and sun farms can be, it might make sense to reconsider a strategy that dashes a zero-carbon energy source that could stay on all the time.

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Getting Arctic oil and natural gas will take decades or more

Preface. Only one exploratory well can be drilled in the short arctic summers, and many more need to be drilled to even find and then explore the size of a potential oil field to see if it is worth extracting.  Drilling in the ocean can’t be done because icebergs will mow offshore rigs down (it wouldn’t surprise me if oil companies weren’t working on a dunk and dive oil rig). On land, permafrost tosses pipelines, roads, rail lines and homes areound as it expands and contracts seasonally, costing billions of dollars to fix. In fact, it costs so much to build roads and other oil infrastructure on permafrost that this is one reason not much drilling has taken place in interior Alaska, and as oil declines, becomes even less likely.  The EROI of arctic oil and gas is likely to be so very low that the likely ecological damage not worth the risk. 

Below are several articles about the difficulty of arctic drilling. Though Herz (2020) points out several new ways that oil and gas companies are coping.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Herz N (2020) Big oil’s answer to melting Arctic: cooling the ground so it can keep drilling. The Guardian.

It wanted to pump 160,000 more barrels of oil each day from a new project on Alaska’s North Slope. But the fossil fuels it and others produce are leading to global heating, and the Arctic is melting. The firm’s drilling infrastructure could be at risk atop thawing and unstable permafrost. A recent environmental review of the project describes the company’s solution: cooling devices that will chill the ground beneath its structures, insulating them from the effects of the climate crisis.

One Alaska company, BeadedStream, sells equipment that measures and transmits tundra temperature data, so that the oil industry can know as soon as it is frozen solid enough to transport equipment. Another firm, Arctic Foundations, is doing increasingly brisk business selling thermosiphons – the tubes that pull heat out of the ground to keep permafrost from thawing underneath oil infrastructure.

ConocoPhillips plans to make use of these devices at its massive Willow project in the National Petroleum Reserve, and it’s also building taller bridges and wider culverts to accommodate larger spring floods. The backers of another new project, meanwhile, see opportunity in the thaw. The melting of Arctic sea ice removes an obstacle from shipping liquefied natural gas off Alaska’s North Slope

Dlouhy 2020 These Days, the Smart Money Is Staying Away From Arctic Drilling. Bloomberg

Arctic National Wildlife Refuge drilling rights aren’t selling because “funding for Arctic drilling is becoming harder and harder to find. Both oil companies and banks have decided they can no longer tolerate the risk of drilling in one of the fastest-warming places on the globe. Buying the leases—which could go for as little as $5 an acre—is the cheap part of the oil exploration process. Every other step—from enlisting consultants to conduct required environmental studies to mounting industrial operations in a remote wilderness without existing infrastructure—is hugely expensive. The break-even price for the oil that companies would extract could be as high as $80 per barrel, according to Rystad Energy, a level the market hasn’t seen since October 2018. Most of today’s likely bidders would need outside financing to actually get anything out of their Arctic leases. But banks are increasingly worried about damage to their public image from backing drilling in the reserve, which 70% of American voters oppose.

The administration’s ability to mount a sale at all—much less formally issue the leases—before Trump leaves office is also in considerable doubt. Because of various requirements and mandatory waiting periods, the earliest auction date is likely Jan. 19, the day before Biden will be inaugurated. That would leave the Interior Department just one day to vet the high bidders and issue the leases, a process that typically takes two months.

Given the current economic environment, the regulatory uncertainty, and the steep public opposition to Arctic drilling, it’s not clear which oil companies would even show up for an auction. Those once viewed as potential bidders for Arctic acreage have slashed spending this year as the coronavirus pandemic eroded crude demand and prices. Even a year ago major companies would have jumped at the chance. Today, not so much.

July 2020: Funding for drilling projects in the arctic (and oilsands) is getting harder to find. The latest bank to stop lending money for these projects is Deutsche Bank, becoming the latest major bank to reconsider lending money to fossil fuel projects in sensitive areas in addition to  129 other banks representing a third of the world’s banks, with US$47 trillion in assets, to align with the Paris Climate Agreement. In the U.S. Goldman Sachs said in December 2019 that it would decline to finance new Arctic oil exploration and production and new thermal coal mine development or strip mining. Wells Fargo and JPMorgan have also said they would stop financing new oil and gas projects in the Arctic (Paraskova T. 2020. Deutsche Bank Immediately Ends Funding For Oil Sands And Arctic Oil Projects. Oilprice.com).

October 2019 (Bloomberg):  Rising temperatures are a particular worry for mining, oil and gas companies. The permafrost area accounts for 15% of Russia’s oil and 80% of its gas operations. It is also home to miners including MMC Norilsk Nickel PJSC, the biggest refined nickel and palladium producer.

Russia has long built structures on piles to improve stability in the permafrost. But as the ground warms it becomes softer, and there are signs problems are increasing.  Multiple new craters have also been found in the gas-rich Yamal region, which is a risk to pipelines, and some houses have had to be pulled down in Norilsk, the industrial town where Nornickel operates.

The issue may get much worse. By 2050, warming may affect about a fifth of structures and infrastructure across the permafrost area, costing some $84 billion, according to research published in February by scientists including Dmitry Streletskiy, a professor at George Washington University. That would be equal to about 7.5% of Russia’s gross domestic product. More than half of residential real estate, worth about $53 billion, might be also damaged.

May 2016: After plunking down more than $2.5 billion for drilling rights in U.S. Arctic waters, Royal Dutch Shell, ConocoPhillips and other companies have quietly relinquished claims they once hoped would net the next big oil discovery. The U.S. Arctic is estimated to hold 27 billion barrels of oil [ less than 1 year of global oil consumption] and 132 trillion cubic feet of natural gas, but energy companies have struggled to tap resources buried below icy waters at the top of the globe (Bloomberg).

November 2015: Statoil has abandoned plans to drill in the Arctic Ocean off the northwest coast of Alaska, and is giving up 16 of its leases in the Chukchi Sea as well as abandoning its stake in 50 Chukchi leases operated by ConocoPhillips.

September 2015: After spending $7 billion, Shell announced that after spending $7 billion, it was ending its Arctic effort without ever producing a single drop of oil. Shell cited disappointing results from an exploratory well drilled during the 2015 open water season 80 miles off the Alaska coast.

Offshore Arctic drilling is strongly supported by Alaska elected officials who hope to find an alternative source of oil for the trans-Alaska pipeline. The pipeline provides about 15% of U.S. oil but is operating at only 25% capacity because of declining oil production.  The pipeline could turn into a giant Popsicle when the oil flowing through it drops below about 350 thousand barrels a day (it is around 500,000 now, at it’s peak around 2 million barrels a day).

NPC. MARCH 27, 2015. Draft Report Arctic Potential: Realizing the Promise of U.S. Arctic Oil and Gas Resources. National Petroleum Council. 

The arctic has about 25% of all the remaining undiscovered resources globally. About 71% of it is expected to be natural gas and 29% liquids.

The majority of the U.S. Arctic potential is undiscovered and offshore.

Resource potential (not RESERVES)

  • Offshore: 74%, 389 Billion Barrels of Oil Equivalent( BBOE)
  • Onshore: 26%, 135 BBOE.

Reserve estimate: 191 BBOE of reserves (about 6 years of global oil production).

Nation Oil Gas
United States 34 60
Canada 15 19
Russia 36 251
Greenland 16 23
Norway 5 20

Figure ES-4. Global Arctic Conventional Oil and Gas RESOURCE in BBOE Potential by Country.

The United States is currently benefiting from resurgence in oil production fueled largely by the development of tight oil opportunities in the U.S. Lower 48. Production profiles for these oil opportunities will eventually decline by one million barrels per day by 2040 compared to 2014. If development starts now, the long lead times necessary to bring on new crude oil production from Alaska would coincide with a long-term expected decline of U.S. Lower 48 production. Alaskan opportunities can play an important role in extending U.S. energy security in the decades of the 2030s and 2040s.

The longer time frame required for U.S. Arctic projects is the result of remoteness, long supply chains, short exploration seasons due to ice, regulatory complexity, and potential for litigation.

The time frame for developing any significant offshore opportunity would likely be between 10 to 30+ years.

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Myers, S.L., et al. September 8, 2015. Frozen dreams of energy in a warming arctic. New York Times.  

“From an economic point of view, I’m not sure going offshore Arctic is very rational,” said Patrick Pouyanné, chief executive and president of Total, the French oil company, which once also planned to drill off Alaska’s northern coast.

“The entire cost structure up there is three to five times more expensive than onshore lower 48,” said Scott D. Sheffield, chief executive of Pioneer Natural Resources, a Texas-based oil company. Two years ago, his company gave up on a field projected to contain 100 million barrels of oil in the Beaufort Sea — drilled from a man-made island and connected by an eight-mile pipeline to Prudhoe Bay, Alaska — in order to invest more in Texas shale fields.  “One-hundred-million-barrel-type discoveries will not be economical in a $100-a-barrel oil environment, and they certainly won’t be economical today,” Mr. Sheffield said.

Even optimistic projections suggest the Arctic might not prove to be as transformative as once imagined. According to Rystad Energy, a global consultancy based in Norway, production from offshore fields in or near the Arctic could double between 2015 and 2025 to 1.4 million barrels a day, which would still be less than 2 percent of current global production. “When people say the Arctic is the next frontier and there is great resource potential, of course there is the risk that it is hype,” said Jon Marsh Duesund, a Rystad senior project manager.

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DRILLING IN THE ARCTIC

also see “Professor Tad Patzek on Oil in the Arctic

The extent of exploration in the Arctic will be greater and the total time required will be longer than in other areas such as the U.S. Gulf of Mexico. This is because Arctic resources are expected to be larger, but less dense and spread over broader areas than in the Gulf of Mexico, and hence require more exploratory wells to gain sufficient definition of the resource to proceed to development. Also, the resource uncertainty in frontier areas such as the Alaska OCS means that subsurface knowledge gained from each well has a great impact on future drilling decisions, compelling serial rather than concurrent exploration drilling, as the results from each well affect decisions on where and how the next should be drilled. Given the severe limitations on the length of the useful annual exploration season, the greater time required for Arctic exploration programs, and the extremely high costs of drilling in remote, icy Arctic conditions, the current 10-year lease term is inadequate to support developing Alaska’s OCS potential.

The key characteristic that distinguishes the Arctic from other oil and gas production areas is the presence of ice. The ice environment varies substantially throughout the Arctic depending on the season and the location.

There are three key physical characteristics of offshore Arctic environments that play a large role in determining the technologies that are required and the degree of complexity of operations. The dominant physical characteristic is ice type and abundance, but water depth and length of open water season also play key roles in differentiating one Arctic location from another in terms of the technology needed and the economic prospects for development.

Although summer ice coverage has decreased, winter ice coverage remains robust. Hence, ice interactions will continue to be the dominant consideration for design of offshore Arctic oil and gas facilities. Challenges include:

  • Landfast ice, which can extend from the shoreline out to a depth of about 15 to 20 meters. Landfast ice freezes fast to the shoreline and is relatively stable throughout the winter until the summer break-up occurs. With thicknesses approaching 2 meters, it can provide a stable platform for drilling exploration wells, transporting materials and equipment, or supporting equipment to lay pipelines to shore for shallow water developments.
  • Beyond the edge of the landfast ice zone is floating pack ice of varying concentrations, which, depending on the season, might range from sparse coverage near the edge to complete coverage further into the pack.
  • Mobile pack ice mass consists of sea ice of varying age and thickness. Depending on location, there may also be inclusions of icebergs or drifting fragments of thick, multi-year shelf ice known as ice islands. The new ice that forms over the open water each winter is called first-year ice. It typically reaches a thickness of 1.5 to 2 meters over the winter season. Wind forces compress and break the ice sheet, forming thickened ridges and rubble fields. When these thickened areas refreeze, they can become the dominant features that impede icebreaker transit and exert large forces on stationary platforms. Second-year ice is thickened ice that results from refreezing of surviving first-year ice from the previous season. Similarly, multi-year ice is built up from multiple freeze cycles of previous years of second-, third-, etc.-year ice. Multi-year ice can range in thickness from approximately 3 meters to more than 6 meters.
  • Icebergs are large pieces of freshwater ice that break off from glaciers and drift with sea currents. Icebergs are nearly nonexistent in the U.S. Arctic due to the lack of large glaciers terminating in the nearby ocean. While relatively rare, the U.S. Arctic does contain ice island features, which are thick tabular masses of ice that break off from Canadian ice shelves and drift with the pack.

Open Water Season

In addition to ice conditions and water depth, the length of the open water season—the time without ice coverage—has a significant impact on the types of technologies that can be used for exploration and development. The length of the open water season can vary considerably from year to year. Over most of the U.S. Chukchi Sea lease area, the average open water season is about 3 to 4 months long, but has been as short as 1 to 2 months. Mid-season incursions of pack ice from the north can occur, potentially interrupting operations. In the correspondingly shallow shelf areas of the U.S. Beaufort Sea, the open water season is typically 1 to 1.5 months shorter than in the Chukchi, and can also be interrupted by pack ice intrusions. Access into the Beaufort Sea at the start of the open water season may be impeded by high ice concentrations at Point Barrow, restricting the usable operating window in some years.

If the open water season is 3 months or more, it may be possible to complete the drilling of an exploration well in a single season using conventional technology that would be used in any open water setting. Shorter open-water seasons or deeper reservoirs may require multiple seasons to complete a single well, resulting in much higher costs for exploratory drilling. Likewise, development technology requirements become more challenging and costs increase with decreasing open water season. For example, 3 months may provide sufficient time for installation of platforms and pipelines, while shorter open water periods may necessitate special measures for platform installation and pipeline construction.

On either side of the open water season, there are periods of summer breakup/melting and fall-early winter freeze-up where some ice may be present at a drilling location. These periods are often referred to as the “shoulder” seasons, because ice coverage is reduced and the ice is either receding or newly forming. Past Arctic exploration drilling programs have successfully extended operations into the shoulder seasons by using ice management to break or guide away approaching ice that might otherwise interfere with the rig’s ability to stay in place over the well (“station-keeping”).

Operating in the shoulder season depends on the capability of the drilling rig and ice management vessels to safely contend with ice. In previous Canadian Beaufort Sea drilling programs using the Kulluk, the summer shoulder season could begin as early as late June or early July, and the winter shoulder season could extend into November or even early December. Beyond about mid-December, the ice cover becomes essentially continuous and thickness exceeds 0.7 meter. Extending the drilling season beyond mid-December would require robust station-keeping and ice management capability.

The Arctic is home to distinct indigenous peoples and provides habitat for large numbers of birds, mammals, and fishes. While some areas of the Arctic, such as the central North Slope of Alaska around Prudhoe Bay, have seen decades of economic activity, much of the region remains largely unaffected by human presence. Today, there is increasing interest in the Arctic for tourist potential, and reductions in summer ice provide an increasing opportunity for marine traffic. At the same time, there is concern about the future of the culture of the Arctic peoples and the environment in the face of changing climate and increased human activity.

The Arctic can be defined as areas north of the Arctic Circle. The United States, Canada, Russia, Kingdom of Denmark (Greenland), and Norway all have coastlines within this region, and these countries possess the majority of the resource potential.

Russia is moving forward with increased Arctic economic development during this time of change. Russia is drilling new exploration wells in the Kara and Pechora Seas and is expanding its naval and transportation fleet.

China does not have Arctic territory, but is investing millions of dollars in Arctic research, infrastructure, and natural resource development.

The United States has large offshore oil potential, similar to Russia and larger than Canada and Norway. Facilitating exploration in the U.S. Arctic would enhance national, economic, and energy security.

The cycle of leasing, exploration, appraisal, development, and production takes longer in the Arctic than in other offshore regions. For instance, Northstar, the only U.S. offshore OCS Arctic project, took 22 years from lease sale to start of production, while recent Gulf of Mexico deepwater projects such as Mars and Atlantis took 11 and 12 years respectively.

With a sustained level of leasing and exploration drilling activity over the next 15 years, offshore Alaska could yield material new production by the mid-2030s and sustain this level of production through mid-century and beyond.

Driven by onshore tight oil production, total U.S. crude oil production increased from 5 million barrels per day in 2008 to 8.5 million barrels per day in 2014, and is projected to increase to a maximum of 9.6 million barrels per day in 2019.8 Crude oil imports are expected to decline from 9.8 million barrels per day in 2008 to a minimum of 5.8 million barrels per day in 2019.

But after 2019, U.S. crude oil production is expected to decline to about 7.5 million barrels per day and imports rise to 7.7 million barrels per day by 2040. U.S. domestic crude oil production is 57% of domestic demand in 2014, but declines to 49% in 2040, reversing the improvements in the economy and energy security from the recent production increase.

The EIA includes only minimal future Alaska OCS activity and assumes decline of Alaskan fields from about 0.5 million barrels per day in 2014 to under 0.3 million barrels per day in 2040. Such a decline would mean that the operational viability of the Trans-Alaska Pipeline System (TAPS) could be challenged, potentially resulting in the loss of an additional 0.3 million barrels per day of oil production.

Water depth within the world’s prospective Arctic oil and gas basins varies from zero to more than a thousand meters. As mentioned previously, most of the U.S. Arctic offshore oil and gas potential lies in water depths of less than 100 meters. The Russian Arctic shelf is broad and shallow, with a large fraction of the area lying in water depths less than 100 meters. Water depths offshore Arctic Canada and Greenland, on the other hand, fall off to more than 100 meters closer to shore. Water depth predominantly impacts the type of drilling and production platforms that can be used and whether offshore wellheads and pipelines require burial to protect them from being damaged by moving ice keels that extend to the seafloor. Developments in ice-prone water depths less than about 100 meters are amenable to well-established technology of structures resting on the seafloor (“bottom-founded”). Beyond about 100 meters, a technology transition from bottom-founded to floating platforms may be required because the overturning forces of the floating ice become too large for practically sized bottom-founded structures. Unlike for temperate waters, where floating drilling facilities are routinely used in thousands of meters of water, suitable technology to allow year-round floating drilling in Arctic pack ice will require additional research and development before commercial use.

Although south of the Arctic Circle, Russia’s Sakhalin Island located north of Japan has been home to several developments in Arctic-like ice conditions over the past 20 years. The Sakhalin developments use a combination of offshore drilling platforms and extended-reach wells from onshore drill pads to reach the offshore reserves. The offshore platforms are among the largest ice-resistant concrete platforms ever constructed. Extended-reach wells drilled from shore out to a distance of 13 kilometers have set multiple world records for horizontal reach. The Sakhalin offshore platforms operate continuously through the winter ice conditions where they must resist forces from ice ridge features more than 30 meters in thickness. The produced oil flows back to onshore processing facilities before being carried via pipeline to export terminals. In the case of Sakhalin 1, tankers are loaded year-round at the Dekastri Terminal and are escorted by icebreakers when ice is present.

Exploration can be carried out in waters with a short ice-free season using floating drilling rigs in waters deeper than about 20 meters, but development and production generally requires year-round operation to be economic, which means using facilities that rest on the seafloor and are resistant to ice forces in ice-prone areas.

Technical feasibility is not the only consideration for successful development of oil and gas resources. Ultimately, an opportunity must be both technically and economically feasible to warrant pursuit. For development to progress, a resource opportunity of sufficient size and quality of producible oil and gas must be found. Thus, the ability to explore is the first critical step in a successful development process. Arctic exploration and development is more costly than in other areas due to remoteness, lack of infrastructure, challenging climate, and short operating seasons. Finding large, high-quality resources will be key to economically viable Arctic development.

Enabling Infrastructure

Availability of existing infrastructure to enable development and production increases the attractiveness of an opportunity. Lack of existing infrastructure increases cost and thus the economic burden on a potential development

The Arctic is characterized by its climate, remoteness, sparse population, and long distance between population centers. This has resulted in limited infrastructure development including ports, airfields, roads, rail, communication networks, and fuel and electricity delivery systems compared with other regions. To promote prudent development, additional capacity is needed. There are many synergies between the types of infrastructure that would facilitate Arctic oil and gas exploration and development and the infrastructure needs of local communities, the state of Alaska, and elements of the U.S. Armed Forces such as the Coast Guard and Navy. Investments by any party in new or upgraded airfields, ports, roads, navigational aids, satellites, radars, and communication facilities could confer wider benefits. The Coast Guard and Navy, which play key roles in the areas of safety, search and rescue, and national defense, are subject to many of the same resupply and support requirements in the Arctic as the oil and gas industry.

Local, state, and federal government agencies should coordinate infrastructure planning by carrying out, where possible, joint scenario planning to identify the intersection of mutual needs such as airfields, ports, roads, and communications to identify opportunities for investment synergies. Planning needs and considerations should include those from the oil and gas industry, Navy, Coast Guard, and local stakeholders, and include options to extend the life of the TAPS pipeline.

Undiscovered potential volumes are based on USGS 2008, Circum-Arctic Resource Appraisal. Discovered potential, reserves, and production values are provided by IHS and are approximate as of the end of 2013. 2 “Liquids” refers to crude oil and natural gas liquids. 3 IHS, International E&P Database, September 3, 2014, http://www.ihs.com/products/oil-gas/epdata/sets/international.aspx. 4 Ibid.

Billion barrels of oil, or oil equivalent for gas; 6,000 cubic feet of gas is equivalent to 1 barrel of oil. 6 “Conventional oil” refers to oil found in liquid form flowing naturally or capable of being pumped without further processing or dilution.

[Another note: But once oil shortages strike the gloves will come off, and arctic exploitation will be the least of things to worry about as America is likely to go to war with any nation that refuses to sell us oil, such as Venezuela, Ecuador, Colombia, the Middle East, and so on (Friedrichs).

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MIT: Why the electric-car revolution may take a lot longer than expected

Preface. This study from MIT explains why price parity of electric and gasoline vehicles is likely to take a lot longer than 5 years, and perhaps never if cars continue to depend on lithium-ion batteries. Deeper cost declines beyond 2030 are likely to require shifts from the dominant lithium-ion chemistry today to entirely different technologies, like lithium-metal, solid-state and lithium-sulfur batteries. Each of these are still in much earlier development stages, so it’s questionable whether any will be able to displace lithium-ion by 2030.

In addition, electric vehicles are more expensive. From “When Trucks Stop Running” (and yes, these figures are out of date):  Cost is not a minor impediment. The average income of an electric car owner is $148,158, and of a new gasoline car $83,166, far above the median household of $51,929 (NRC 2015a). At current rates of transition from gasoline to all-electric cars and trucks, with 123,000 electric vehicles sold in 2014 (InsideEVs 2015), it would take over 2000 years to replace the nation’s fleet of 253 million vehicles), and require 980 TWh of electricity (25 % of 2008 generation) taking about 15 years to build (Smil 2010).” In 2021 the average cost of an all electric car was $56,437, gasoline $42,258.

There are other costs to consider. Forberg (2021) in “So many people are buying Teslas — but are they ready for the costly insurance?” writes that insurances costs are higher because EV cost more and are more expensive to repair. So if your premium for a gas-powered car is $1,000 a year, you’ll probably pay $1,180 to $1,320 with an electric car, according to ValuePenguin. As a luxury car, Teslas are pricier still. Motortrend found these were the average rates for a 40-year-old man with a good credit and driving record: Tesla Model 3: $2,114-$2,351, Tesla Model S: $3,673-$4,143, Tesla Model Y: $2,118-$2,227 & Tesla Model X: $3,355-$4,025. It’s also harder to find mechanics that can repair them and parts are more expensive and difficult to locate.

Alice Friedemann  www.energyskeptic.com  Author of Life After Fossil Fuels: A Reality Check on Alternative Energy; When Trucks Stop Running: Energy and the Future of Transportation”, Barriers to Making Algal Biofuels, & “Crunch! Whole Grain Artisan Chips and Crackers”.  Women in ecology  Podcasts: WGBH, Planet: Critical, Crazy Town, Collapse Chronicles, Derrick Jensen, Practical Prepping, Kunstler 253 &278, Peak Prosperity,  Index of best energyskeptic posts

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Temple, J. 2019. Why the electric-car revolution may take a lot longer than expected. An MIT analysis finds that steady declines in battery costs will stall in the next few years. MIT Technology Review.

Don’t expect electric cars and trucks to get as cheap as their gas-powered rivals anytime soon. A new report from the MIT Energy Initiative warns that EVs may never reach the same sticker price so long as they rely on lithium-ion batteries, the energy storage technology that powers most of today’s consumer electronics. In fact, it’s likely to take another decade just to eliminate the difference in the lifetime costs between the vehicle categories, which factors in the higher fuel and maintenance expenses of standard cars and trucks.

The findings sharply contradict those of other research groups, which have concluded that electric vehicles could achieve price parity with gas-powered ones in the next five years. The lingering price difference predicted by the MIT report could stunt the transition to lower-emission vehicles, requiring governments to extend subsides or enact stricter mandates to achieve the same adoption of EVs and cuts in climate pollution.

Transportation is the largest source of greenhouse-gas emissions in the US and fourth largest globally, so there’s no way to achieve the reductions necessary to avoid dangerous levels of global warming without major shifts to cleaner vehicles and mass transit systems.

The problem is that the steady decline in the cost of lithium-ion batteries, which power electric vehicles and account for about a third of their total cost, is likely to slow in the next few years as they approach limits set by the cost of raw materials.

“If you follow some of these other projections, you basically end up with the cost of batteries being less than the ingredients required to make it,” says Randall Field, executive director of the Mobility of the Future group at MIT. “We see that as a flaw.”

The numbers

Current lithium-ion battery packs are estimated to cost from around $175 to $300 per kilowatt-hour. (A typical midrange EV has a 60/kWh battery pack.)

A number of commercial and academic researchers have projected that the costs of such batteries will reach $100/kWh by 2025 or before, which many proclaim is the “magic number” where EVs and gas-fueled vehicles reach retail price parity without subsidies. And they would continue to fall from there.

But reaching the $100 threshold by 2030 would require material costs to remain flat for the next decade, during a period when global demand for lithium-ion batteries is expected to rise sharply, MIT’s “Insights into Future Mobility” study notes. It projects that costs will likely fall only to $124 per kilowatt-hour by then. At that point, the “total cost of ownership” between the categories would be about the same, given the additional fuel and maintenance costs of gas-fueled vehicles. (Where these lines cross precisely depends heavily on local fuel costs and vehicle type, among other factors.)

But the sticker price of an EV with 200 miles of range would still run thousands of dollars more than a comparable gas-fueled vehicle in many areas. While closing the gap on total cost of ownership would be a solid step for electric vehicles, the average consumer is very sensitive to the upfront price tag—and what it equates to in monthly payments.

Costs are likely to continue to improve as, among other things, companies reduce the level of pricey cobalt in battery components and achieve manufacturing improvements as production volumes rise. But metals mining is already a mature process, so further declines there are likely to slow rapidly after 2025 as the cost of materials makes up a larger and larger portion of the total cost, the report finds.

Deeper cost declines beyond 2030 are likely to require shifts from the dominant lithium-ion chemistry today to entirely different technologies, like lithium-metal, solid-state and lithium-sulfur batteries. Each of these are still in much earlier development stages, so it’s questionable whether any will be able to displace lithium-ion by 2030, Field says.

Gene Berdichevsky, chief executive of anode materials maker Sila Nanotechnologies, agrees it will be hard for the industry to consistently break through the $100/kWh floor with current technology.

But he also thinks the paper discounts some of the nearer-term improvements we’ll see in lithium-ion batteries without full-fledged shifts to different chemistries. By 2030, Berdichevsky expects, battery packs will be able to store significantly more energy and last many more miles on the road, which can cut costs, improve performance, and otherwise boost the relative appeal of EVs.

Driving forward

The good news is a growing number of manufacturers around the world are moving into EVs, rolling out different models at different price points.

On Sunday, Ford unveiled an electric SUV set to hit showrooms next year, dubbed the Mustang Mach E. Audi, Jaguar, Mercedes-Benz, and Tesla have all introduced battery-powered SUVs as well, catering to consumers’ tastes for larger vehicles.

But the MIT study notes that achieving deep reductions in transportation emissions will require a parallel overhaul of the electricity systems used to charge EVs. Currently, US carbon emissions per mile for a battery electric vehicle are on average only about 45% less than those from a gas-fueled vehicle of comparable size. That’s because fossil fuels still generate the dominant share of electricity in most markets, and the manufacturing process for EVs generates considerably higher emissions, mainly related to the battery production.

EVs in some US regions, notably including coal states like West Virginia, could generate nearly the same level of emissions as standard vehicles over their lives. In parts of India and China with particularly dirty electricity systems, EVs may even generate more emissions than gas-fueled vehicles, says Emre Gencer, a research scientist who worked on the study.

If EVs can’t compete directly on price in the marketplace, public policy will need to play a larger role in driving EV adoption and cutting transportation emissions.

The MIT study projects that the share of electric vehicles and plug-in hybrids will rise in any scenario, reaching 33% of the global vehicle fleet by 2050 as prices slowly decline, even with no additional climate polices. But a strong set of additional regulations, including a global carbon tax set high enough to prevent 2 ˚C of warming, would push that figure to 50% by mid-century.

That would add up to hundreds of millions of additional low-emission vehicles on the roads, and prevent 1.5 billion metric tons of carbon dioxide from reaching the atmosphere.

Posted in Automobiles, Lithium-ion | Tagged | 5 Comments

Charles Hall: politicians and economy do best when oil is cheap

Preface. Politicians claim credit for a good economy, but what makes an economy prosperous? Cheap oil. During Trump’s reign “relatively cheap oil and gas are keeping the U.S. economy strong. But this cheap oil and gas is being partially subsidized by investors who are either losing money or receiving a poor return on investment. In this respect, President Trump has these financial “losers” to thank for a large part of the current health of the U.S. economy.

Hall illustrates the relation of oil prices to the popularity of a president:

“Presidents Gerald Ford and Jimmy Carter were in office during the economically disastrous increase in the price of oil from less than $4 a barrel in 1972 to more than $35 in 1979. Both lost in their reelection bids.

In 1980 and 1984, Ronald Reagan ran on a platform of “Let’s make America Great again” and “It’s morning again in America,” which coincided with the decline in oil prices during the 1980s. In the U.K., Margaret Thatcher was floundering in popularity in 1980, but then received most of the credit for the remarkable recovery of the U.K. economy. Was it her conservative management style, or the development of the North Sea oil, which occurred on her watch? Now that the North Sea oil boom is over, the U.K. economy is struggling again.” 

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Charles Hall. 2019. Does Trump have a bunch of ‘losers’ to thank for a growing economy? The Hill.

The media and the general public tend to give political leaders the credit, or blame, for the state of the economy. This is clearly the case with President Trump, much of whose popularity, such as it is, is based on the good health of the U.S. economy. But is the economy doing well because of Trump’s economic policies, such as the reduction of tax rates, or something else entirely that economists have missed?  

There are many complex factors that determine the state of the economy, but only one absolute prerequisite — available and affordable energy to manufacture and move things to market, and to transport, feed, comfort and amuse people. 

In the U.S. and the rest of the industrialized world this means principally liquid and gaseous petroleum. For many natural scientists, this is clearly extremely important, perhaps even dominant, in the success or failure of economies.

Today in the U.S. oil is less than $55 a barrel, and gas is about as cheap as it has ever been. We have decreased our oil imports to about 15 percent of use and become a minor net exporter of gas.  

Despite improvements in wind and photovoltaic devices, and a decline in their manufacturing costs, our use of oil and gas continues to increase, although at a slower rate. Oil and natural gas in the U.S. are roughly half as expensive today as in Europe or Asia, or in the U.S. during the Obama years. Today, as in 1972, it is often as cheap to make things in America as elsewhere, even though our labor is more expensive. Trump’s timing from this perspective was excellent.  

U.S. oil production originally peaked in 1970, and gas in 1973, but declined through 2007, when production was revitalized by the process of lateral drilling and “fracking.” This technological miracle allowed us to exploit deposits formerly considered low-grade.

Now the United States produces more oil than it ever has, and is, with Saudi Arabia and Russia, one of the top three oil producers in the world. Fracking has also reversed the long decline of U.S. natural gas production, allowing the substitution of gas for coal and a proliferation of cheap plastics. 

But, curiously, this renaissance of petroleum in the United States has not led to a resurgence of profits in the oil and gas industry. Quite the opposite, because almost none of the companies that have invested in fracking are turning a profit. Investors in this industry are losing a lot of money, some $83 billion since 2008, according to oil analyst Arthur Berman.

This situation means that relatively cheap oil and gas are keeping the U.S. economy strong. But this cheap oil and gas is being partially subsidized by investors who are either losing money or receiving a poor return on investment. In this respect, President Trump has these financial “losers” to thank for a large part of the current health of the U.S. economy. 

This relation among oil supplies, prices and the political winds is not new and works both ways. Presidents Gerald Ford and Jimmy Carter were in office during the economically disastrous increase in the price of oil from less than $4 a barrel in 1972 to more than $35 in 1979. Both lost in their reelection bids.

In 1980 and 1984, Ronald Reagan ran on a platform of “Let’s make America Great again” and “It’s morning again in America,” which coincided with the decline in oil prices during the 1980s. In the U.K., Margaret Thatcher was floundering in popularity in 1980, but then received most of the credit for the remarkable recovery of the U.K. economy. Was it her conservative management style, or the development of the North Sea oil, which occurred on her watch? Now that the North Sea oil boom is over, the U.K. economy is struggling again.    

So again the U.S. economy is booming, continuing to grow since the large economic contraction of 2008, which in turn followed the brief but dramatic oil price spike to $140 a barrel that had occurred earlier in that year. There is a significant correlation between energy prices and presidential popularity. While oil price is not the only predictor, it is too often ignored in our personality- and social media-driven world (which, of course, is underwritten by fossil fuels).   

Ironically, President Trump’s prospects there are tied in part to American investors being willing to continue to lose money seeking shale oil.

Charles Hall is professor emeritus at SUNY College of Environmental Sciences and Forestry in Syracuse, N.Y., and author of 14 books and 300 scientific articles related to energy, environment and economics.

Posted in Charles A. S. Hall | Tagged , , , | 2 Comments

Russia has been bombarding Ukraine with fake news since 2014. Sound familiar?

Preface.  Long before Russia bombarded the U.S. with fake news in the 2016 election campaign, Ukraine was the target, where Russia honed its propaganda skills. The parallels with their fake news assault on the U.S. are striking, perhaps if more people were aware of how Russia attacked Ukraine with propaganda (and their own citizens) they might be better able to spot lies in Facebook and other social media here.  The tactics are similar.

Ukrainians now have a news show “StopFake” that’s as popular as 60 minutes is in the U.S., exposing Russian fake news and conspiracy theories using evidence.  This helps to build the critical thinking skills of its citizens and protect them from fake news by recognizing it when they see it.  

Check out StopFake here, this is a really good show. We have nothing like it, our TV news is too entertainment oriented and full of short pieces to cope with our short attention span.  https://www.stopfake.org/en/main/

If only the U.S. had a show dedicated to fake news that explains why it’s false.

Below are excerpts from two articles about Russian propaganda in the Ukraine.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Lynch, J. 2019. StopFake braces for ‘bombardment’ of Russian propaganda in Ukraine election.  Columbia Journalism Review.

In 2013 at least 100,000 protestors demonstrated against Kremlin-backed president Viktor Yanukovych distancing the nation from the EU.  A three month struggle to pull Ukraine from Russia’s grip began.  Kremlin-backed bloggers and trolls launched a torrent of fake news to discredit the protests. “I would go online and I would see tons of stories that never happened circulating,” Kruk told me. Social media accounts called her stupid, advocated for her arrest, and said she should be raped.

Eventually, Yanukovych was overthrown. But soon after, Russian troops swarmed eastern Ukraine and Crimea. The faculty at the Mohyla School of Journalism believed that Russia was using TV stations and news outlets like weapons. “When we started to work we noticed that it was very systematic. It’s not just misinformation,” Fedchenko said. “It’s disinformation.”

Ukraine is often a laboratory for the Kremlin to experiment with propaganda and cyber-attacks that they later aim at the west. Before Russian intelligence agents hacked Hillary Clinton’s emails during the 2016 presidential elections, the Kremlin perfected the tactics in Ukraine, targeting government websites and individuals. Before the web of Russian-backed social media bots and trolls targeted American politics, they infested Ukrainian politics.

“Russia wants to portray Ukraine’s elections as illegitimate and portray it as a failed state,” Kateryna Kruk, the host of StopFake’s TV show (started in 2014), in which she airs and dissects the last week’s propaganda, told me in early March. “Instead of promoting pro-Russian candidates they are promoting mistrust of the entire system.

StopFake has expanded to publish articles in 11 languages and monitors Russian propaganda in France, Spain, and Germany.

During the 2019 election there were too many manipulations for the staff to keep track of.

About 74 percent of Ukrainians say that TV is their primary source of news. (By comparison, a recent Pew poll said that 44 percent of Americans prefer TV, which is still the most popular medium.) Most of the largest TV stations are owned by oligarchs. Their airwaves are filled with opinion-laden punditry that serves two purposes—propelling the owners’ political interests and keeping costs down.

At the center of the Russian web are Kremlin-owned and -allied TV stations like NTV, Russia 1, and RT. These channels feature Putin-aligned guests and are followed by the country’s media elite. For instance, Russian political scientist Dmitry Kulikov spoke on a state-owned TV channel about the ongoing Ukrainian elections. “It does not matter who will win, because this victory will have nothing to do with the will of the people,” Kulikov said.

The TV stations and websites in both Russia and Ukraine then parrot those messages, he said. For example, the Russian-based website Ukraine.ru cited a poll it said showed the overwhelming majority of Ukrainians didn’t believe in the integrity of the elections. Dmytro Dmitruk, who was part of the team that conducted the poll, said that it had, in fact, said the opposite—that many Ukrainians were so concerned to eliminate fraud that protests were possible.

Social media makes Russia’s task easier. On Facebook, Russian influence was ubiquitous in the run-up to the first round of elections. Facebook and Instagram pages that were set up by Russian individuals portrayed Ukrainian schools as unhealthy, spread false news about protests and disinformation about NATO. Many targeted Poroshenko, the president.

Some of the pages were uncovered and eventually shut down by Facebook after it received a tip from American law enforcement officials. Facebook, which pledged in January 2019 to get tough on foreign political advertising and introduce other transparency measures, implemented them just 13 days before the first round of voting. And just days before the final vote, nearly 2,000 additional Russian-pages were found, many of which targeted Ukrainian politics.  

Commentators and networks backed by Russia receive financial contributions or special access to public projects, Fedchenko says. In the effort to combat Russian-propaganda, Ukraine has banned at least 77 out of 82 Russian TV stations from the country. In 2017, Ukraine banned the Kremlin-connected social networking site VKontakte—similar to Facebook. Fedchenko believes that other governments should do the same. “Russian disinformation is basically masquerading as the real media which invokes the freedom of speech clause,” Fedchenko says. “Definitely the First Amendment should not be used for them.”

Yuhas, A. 2019. Russian propaganda over Crimea and the Ukraine: how does it work?  The Guardian.

By shutting down independent press, Russia controls more of the story; by spreading half-truths and rumors, the Kremlin not only confuses opponents but also sows unwitting support for its cause; finally, by pushing the boundaries with its version of events, Moscow’s leadership can force other countries to play by its own very pliable rules.

Win the “information war”, as one Russian MP calls it, and you can gain the upper hand without ever firing a shot.

ladimir Putin’s Kremlin has been silencing independent voices one at a time for months, effectively dismantling the press. In December, Putin ordered the “restructure” of the state-owned but historically independent RIA Novosti – liquidating most of the outlet, merging its remains with Russia Today and installing as editor in chief Dmitry Kiselyov, a TV presenter notorious for saying gay people’s hearts should be incinerated and playing up how Russia can turn the US into “radioactive ash”.

RIA was just the first. Dozhd, the country’s last independent TV channel, was “pushed off a cliff” right before the Winter Olympics. Then the radio station Ekho Moskvy had its director replaced by its owner, the state-controlled energy company Gazprom. Most recently, the editor-in-chief of Lenta.ru, a highly respected, independent news site, was suddenly replaced with a pro-Kremlin editor, a move apparently made through back channels with the site’s conglomerate owner.

The Kremlin’s tighter grip on the media has coincided with the rise of Russia Today, which unapologetically skews news in Putin’s favor.

Putin, for whom recent events in Kiev have been not only unfavorable but a threat, wants to rebrand history in such a way that it protects him. To that end, a constant theme spouting from Russian sources has been the Ukrainian revolution’s alliance with “fascists” – a vague word that’s become a catchall for anti-Semites, terrorists, insurgents, anarchists and thugs.

Though there were nationalists and far-right nationalists among Kiev’s protesters, and there are some in the new interim government, there decidedly weren’t and aren’t many – if any – bona fide fascists. This line has been both taken up and debunked (thoroughly), but any discussion of fascists at all is a Kremlin win. If you’re busy trying to decide how anti-Semitic Ukraine’s right wing is, then you’re not busy watching Russian soldiers slip across the border. (Ukraine’s chief rabbi is stalwartly pro-Kiev, by the by, and has taken up propaganda-busting, pointing out that the diverse anti-Yanukovych coalition is now anti-Putin.)

Fear of fascists goes a long way in Ukraine, which suffered in the second world war. By definition, fear (“Fascists are coming for your family!”) and confusion (“Fascists? Are there fascists? What’s a fascist?”) matters much more in propaganda than truth (not so many fascists). It doesn’t have to make sense – in fact it’s better if it doesn’t. Incoherent theories of a gay, Jewish, Muslim fascist conspiracy in Kiev don’t matter so long as they’re riling someone up.

Skewed facts, half-truths, misinformation and rumors all work in the propagandist’s favor. By reminding everyone of a real military agreement, you can profess innocence while having military “exercises” overstepping their bounds. By removing insignias from Russian uniforms, you can pretend as long as you like that soldiers with Russian guns and vehicles, speaking Russian and occasionally admitting they’re Russian, are merely local “self-defense” bands.

By spreading talk of fascists, of gangs of unknown armed men, of coups and self-determination and persecution – while sending armed men into Ukraine, egging on real and staged protests, bribing politicians and blocking the media – the Kremlin is enacting and realizing its propaganda on the ground. The Ukrainian government and military has shown remarkable restraint in not falling for the ploy, but Putin appears prepared to increase the pressure,

Posted in Critical Thinking, Oil shock collapse, Politics | Tagged , , , , | 2 Comments

Nothing is true & everything Is possible: the surreal heart of the new Russia by Peter Pomerantsev

Preface. In light of how greatly Russia influenced the election of Trump, it’s worth reading this book to see how Russia has used propaganda to control their own people, keep Putin in office, and in general how the rule of law has vanished and corruption increased.  Since the state controls the media, Russians hear nothing but “FOX news”.

This is an amazing look at what it is like in Russia these days. There are schools that teach golddiggers how to win the hearts of the new billionaires, Scientology-like religious scams, how any wealthy business owner can be sent to jail until huge bribes are paid, and much more. The most important point is about how the media is controlled by Putin for propaganda purposes in a very clever, sophisticated and surreal way. I have been amused over the years by Putin’s endless photo ops as a strong, macho, James Bond figure, but I’m less amused after reading this book.

I thought the U.S. was just as corrupt as Russia’s when you consider all the fraud in America and no executives in jail (mortgage bubble, credit card scams, etc.). But we have much further to fall and just because we haven’t reached the depths of Russia’s corruption yet, doesn’t mean it isn’t possible. In fact, this book makes a good case that this is where we are headed.

In fact this book and my review were written long before Trump was elected. It seems prophetic now in 2020.

Related books:

  • Gessen, M. 2017. The Future Is History: How Totalitarianism Reclaimed Russia. Riverhead Books.
  • Malcolm, N. 2018. The Plot to Destroy Democracy. How Putin and His Spies Are Undermining America and Dismantling the West. Hachette Books.
  • Isikoff, M. 2018. Russian Roulette: The Inside Story of Putin’s War on America and the Election of Donald Trump. Hachette Book Group.
  • Galeotti, M. 2018. Vory. Russias Super Mafia. Yale University Press.
  • Harding, L. 2017. Collusion: Secret Meetings, Dirty Money, and How Russia Helped Donald Trump Win.
  • Simpson, G. 2019. Crime in Progress: Inside the Steele Dossier and the Fusion GPS Investigation of Donald Trump. Random House.
  • Maddow, R. 2019. Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth. Crown.
  • Pomerantsev, P. 2015. Nothing is true and everything is possible: the surreal heart of the new Russia. Public Affairs.

Alice Friedemann  www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer, Barriers to Making Algal Biofuels, and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Peter Pomerantsev. 2014. Nothing Is True and Everything Is Possible: The Surreal Heart of the New Russia. Public Affairs.

[Vitaly was a big time gangster, here is Pomerantsev’s account of his switch to making movies about gangsters]:

The day of his big shoot Vitaly took over a whole market. The scene had the young Vitaly and his gang being busted as they extorted money from the market traders. The traders played themselves, and cops had been hired to play cops. “Isn’t there a problem that you’re working for a gangster today?” we asked the cops. They laughed. “Who do you think we work for anyway?” (The new mayor of Vladivostok was a man nicknamed Winnie-the-Pooh, a mob boss who had previously served time for threatening to kill a businessman.) Vitaly’s set had a cast of hundreds, and it should have been chaos, but I’d never seen a film set so slickly run. His gangster crew was the production team. Who would dare to be late on set when professional killers are running the show? Vitaly was a natural. Cap pulled low, long finger tapping against his mouth, he set up every camera position unerringly. Though there was no script on paper, he never got lost, giving terse, tight instructions to all the players. “It’s just like setting up a heist,” he told me. “Everything’s got to be exact. Not like one of your little documentaries.” Every detail of the clothes, the guns, and the items the market traders were selling had been reproduced just as they were in the late 1980s.

The way Vitaly shot his films was more like a cheesy B-movie than documentary-style realism. Every shot of Vitaly was a glamorous close-up. He wiped his sweaty brow, sighed like a pantomime hero, looked intently into the distance, and escaped death to the sound of the Star Wars sound track. This was how he saw himself, his life, his crimes. All the pain and death he had caused and suffered were viewed by him through the corny music and cloud-machine smoke of a bad action movie.

There’s a little scene that gets played out on the TV channels every week. The President sits at the head of a long table. Along each side sit the governors of every region: the western, central, northeastern, and so on. The president points to each one, who tells him what’s going on in his patch. “Rogue terrorists, pensions unpaid, fuel shortages. . . . ” The governors looked petrified. The president toys with them, pure gangster like Vitaly. “Well, if you can’t sort out the mess in your backyard, we can always find a different governor. . . . ” For a long time I couldn’t remember what the scene reminded me of. Then I realized: it’s straight out of The Godfather, when Marlon Brando gathers the mafia bosses from the five boroughs. Quentin Tarantino used a similar scene when Lucy Liu meets with the heads of the Tokyo Yakuza clans in Kill Bill—it’s a mafia movie trope. And it fits the image the Kremlin has for the President: he is dressed like a mob boss (the black polo top underneath the black suit), and his sound bites come straight out of gangster flicks (“we’ll shoot the enemy while he’s on the shitter . . . ”). I can see the spin doctors’ logic: Whom do the people respect the most? Gangsters. So let’s make our leader look like a gangster; let’s make him act like Vitaly.

One of the areas TNT specializes in is satire. If the USSR drove humor underground and thus made it an enemy of the state, the new Kremlin actively encourages people to have a laugh at its expense: one TNT sketch show is about corrupt Duma deputies who are always whoring and partying while praising each other’s patriotism; another is about the only traffic cop in Russia who doesn’t take bribes—his family is starving and his wife is always nagging him to become “normal” and more corrupt. As long as no real government officials are named, then why not let the audience blow off some steam?

Russia does have elections, but the “opposition,” with its almost comical leaders, is designed and funded in such a way as to actually strengthen the Kremlin: when the beetroot-faced communists and the spitting nationalists row on TV political debating shows, the viewer is left with the feeling that, compared to this lot, the President is the only sane candidate.

Russia does have nongovernmental organizations, representing everyone from bikers to beekeepers, but they are often created by the Kremlin, which uses them to create a “civil society” that is ever loyal to it.

Although Russia does officially have a free market, with mega-corporations floating their record-breaking IPOs on the global stock exchanges, most of the owners are friends of the President. Or else they are oligarchs who officially pledge that everything that belongs to them is also the President’s when he needs it. This isn’t a country in transition but some sort of postmodern dictatorship that uses the language and institutions of democratic capitalism for authoritarian ends.

How Russian TV channels are structured

On the surface most Russian TV channels are organized like any Western TV station. Independent production companies pitch program ideas at the network in what looks like open competition. But there is a twist. Most of the production companies were either owned or part-owned by the heads of the network and senior execs. They were commissioning for themselves. But as they had a genuine interest in making good shows and gaining ratings, they would create a plethora of companies, each competing against the other and thus improving the quality of ideas. And while the channels themselves pay their taxes and are housed in new office buildings, the production companies, where the real money is made, operate in a quite different world.

Recently I had been cutting a show at one such production company, Potemkin. It was based far away from Moscow’s blue-glass-and-steel center, in a quiet road on an industrial estate. The gray warehouse building where Potemkin was based had no sign, no number on the black metal door. Behind the door was a dirty, draughty, prison-like room where I was met by a bored guard who would look at me each day as if I were a stranger encroaching on his living space. To get to the office I walked down an unlit concrete corridor and turned sharp right, up two flights of narrow stairs, at the top of which was another black, unmarked metal door.

Suddenly I was back in a Western office, with Ikea furniture and lots of twentysomethings in jeans and bright T-shirts running around with coffees, cameras, and props. It could be any television production office anywhere in the world. But going past the reception desk, the conference room, coffee bar, and casting department, you reach a closed white door. Many turn back at this point, thinking they have seen the whole office. But tap in a code and you enter a much larger set of rooms: here the producers and their assistants sit and argue; here the accountants glide around with spreadsheets and solemnity; and here are the loggers, rows of young girls staring at screens as their hyperactive fingers type out interviews and dialogue from rushes. At the end of this office is another door. Tap in another code and you enter the editing suites, little cells where directors and video editors sweat and swear at one another. And beyond that is the final, most important, and least conspicuous of all the inconspicuous doors, with a code that few people know. It leads to the office of the head of the company, Ivan, and the room where the real accounts are kept.

This whole elaborate setup is intended to foil the tax police. That’s who the guards are there to keep out, or keep out long enough for the back office to be cleared and the hidden back entrance put to good use. Whatever measures were taken, the tax police would occasionally turn up anyway, tipped off by someone. When they did we knew the drill: pick up your things and leave quietly. If anyone asks, say you’ve just come in for a meeting or casting.

The first time it happened I was convinced we were about to be handcuffed and sent down for fraud. But for my Russian colleagues the raids were a reason to celebrate: the rest of the day was invariably a holiday as Ivan haggled with the tax police to keep down the size of the payoff. “Only a dozen people work here,” he would say with a wink as they looked around at the many dozens of desks, chairs, and computers still warm from use. Then, I imagine, Ivan would bring out the fake accounts from the front office to support his case, and they would sit down to negotiate.

The officials would look at the fake books, which they knew perfectly well to be fake, and extract fines in line with legislation they knew Ivan did not need to comply with. So everything would be settled, and every role, pose, and line of dialogue would reproduce the ritual of legality. It was a ritual played out every day in every medium-sized businesses, every restaurant, modeling agency, and PR firm across the country.

I once asked Ivan whether all this was necessary. Couldn’t he just pay his taxes? He laughed. If he did that, he said, there would be no profit at all. No entrepreneurs paid their taxes in full; it wouldn’t occur to them. It wasn’t about morality; Ivan was a religious man and paid a tithe in voluntary charity. But no one thought taxes would ever be spent on schools or roads. And the tax police were much happier taking bribes. In any case, Ivan’s profits were already squeezed by the broadcasters. Around 15 percent of any budget went to the guy at the channel who commissioned the programs and part-owned the company.

Since the war in Iraq many were skeptical about the virtue of the West. And then the financial crash undermined any superiority they felt the West might have. All the words that had been used to win the Cold War—“freedom,” “democracy”—seemed to have swelled and mutated and changed their meaning, to become redundant. If during the Cold War Russia gave the West the opposition it needed to unify its various freedoms (cultural and economic and political) into one narrative, now that the opposition has disappeared, the unity of the Western story seems unwound. And in such a new world, what could be wrong with a “Russian point of view?

It took a while for those working [in Russian TV] to sense something was not quite right, that the “Russian point of view” could easily mean “the Kremlin point of view,” and that “there is no such thing as objective reporting” meant the Kremlin had complete control over the truth. Once things had settled down it turned out that only about 200 of the 2,000 or so employees were native English speakers. They were the on-screen window dressing and spell-checkers of the operation. Behind the scene the real decisions were made by a small band of Russian producers. In between the bland sports reports came the soft interviews with the President. (“Why is the opposition to you so small, Mr. President?” was one legendary question.)

During the Russian war with Georgia, Russia Today ran a banner across its screen nonstop, screaming: “Georgians commit genocide in Ossetia.” Nothing of the kind had been, or would ever be, proven. And when the President will go on to annex Crimea and launch his new war with the West, Russian TV (RT) will be in the vanguard, fabricating startling fictions about fascists taking over Ukraine. But the first-time viewer would not necessarily register these stories, for such obvious pro-Kremlin messaging is only one part of Russian Television’s output. Its popularity stems from coverage of what it calls “other,” or “unreported,” news. Julian Assange, head of WikiLeaks, had a talk show on RT. American academics who fight the American World Order, 9/11 conspiracy theorists, anti-globalists, and the European Far Right are given generous space.

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The theater that evening was showing a performance of Nord Ost, a musical set in Stalin’s Russia. It was Russia’s first musical. The terrorists came onto the stage during a love aria. They fired into the air. At first many in the audience thought the terrorists were part of the play. When they realized they weren’t, there were screams and a charge for the doors. The doors were blocked off already by Black Widows with explosives wired between their bodies and the doors. The men on the stage ordered the audience back into their seats; anyone who moved would be executed. The Moscow theater siege had begun; it would last four nights.

The hostages were losing hope. The terrorists demanded the President pull all federal forces out of the North Caucasus. The Kremlin had said there was no way it would negotiate: the President’s credibility was based on quelling the rebellion in Chechnya. In the late 1990s, when he was still prime minister, he had been transformed from gray nobody to warrior by the Second Chechen War, suddenly appearing in camouflage sharing toasts with soldiers on the front. The war had been launched after a series of apartment buildings had been bombed in mainland Russia, killing 293 people in their homes. Nowhere, nowhere at all, had seemed safe.

At 5:00 a.m. on the fourth night of the siege, special forces slipped a fizzing, mystery anesthetic blended with an aerosol spray gas into the ventilation system of the theater. A gray mist rose through the auditorium. The Black Widows were knocked out instantly, slouching over and sliding onto the floor. The hostages and hostage-takers all snored. Barely a shot was fired as special forces, safe from the fumes in gas masks, entered. All the Chechens were quickly killed. The soldiers celebrated the perfect operation. The darkness around me was lit up with the spotlights of news crews reporting a miracle of military brilliance. The medics moved in to resuscitate the audience. They hadn’t been warned about the gas. There weren’t enough stretchers or medics. No one knew what the gas was, so they couldn’t give the right antidotes.

The sleeping hostages, fighting for breath, were carried out, placed face up on the steps of the theater, choking on their tongues, on their own vomit. I, and a thousand TV cameras, saw the still-sleeping hostages dragged through cold puddles to city buses standing nearby, thrown inside any which way and on top of each other. The buses pulled past me, the hostages slumped and sagging across the seats and on the wooden floor, like wasted bums on the last night bus. Some 129 hostages died: in the seats of the auditorium, on the steps of the theater, in buses. The news crews reported a self-inflicted catastrophe. The Nord Ost theater siege, this terror-reality show—in which the whole country saw its own sicknesses in close-up, broadcast on live TV; saw its smirking cops, its lost politicians desperate for guidance not knowing how to behave; saw Black Widows, somehow pitiable despite their actions, elevated to prime-time TV stars; saw victories turn to disasters within one news flash—was when television in Russia changed. No longer would there be anything uncontrolled, unvetted, un-thought-through. The conflict in the Caucasus disappeared from TV, only to be mentioned when the President announced the war there was over, that billions were being invested, that everything was just fine, that Chechnya had been rebuilt, that tourism was booming, that 98% of Chechens voted for the President in elections, and that the terrorists had been forced out to refuges in the hills and forests. When someone from the Caucasus appears on television now, it’s usually as entertainment, the butt of jokes like the Irish are for the English. But despite all the good news from the Caucasus, Black Widows still make it up to Moscow with rhythmic regularity. Over time their profile has changed: they are less likely to be the wives or daughters of those killed in the war in Chechnya.

Architecture

Often you find all the styles compiled into one building. A new office center on the other side of the river from the Kremlin starts with a Roman portico, then morphs into medieval ramparts with spikes and gold-glass reflective windows, all topped with turrets and Stalin spires. The effect is at first amusing, then disturbing. It’s like talking to the victim of a multiple personality disorder: Who are you? What are you trying to say? Increasingly new skyscrapers recall the Gotham-gothic turrets of Stalin architecture. Triumph-Palace, briefly Europe’s tallest apartment building, is a copy of the Stalinist “seven sisters.” Long before the city’s political scientists started shouting that the Kremlin was building a new dictatorship, the architects were already whispering: “Look at this new architecture, it dreams of Stalin. Be warned, the evil Empire is back.” But the original Stalin skyscrapers were made of granite, with grand mosaics and Valhalla halls leading to small, ascetic apartments. The new ones try to be domineering but come across as camp; developers steal so much money during construction that even the most VIP, luxury, elite of the skyscrapers crack and sink ever so quickly. That unique Moscow mix of tackiness and menace.

It should be untouchable. But the tremors of drill and demolition ball only become more frenzied with every meter closer you get to the Kremlin. Property prices are measured by distance from Red Square: the aim is to build your office or apartment as close to the center of power as possible, the market organized by a still feudal social structure defined by needing to be within touching distance of the tsar, the general secretary of the Communist Party, the President of the Russian Federation. The country’s institutions—oil companies, banks, ministries, and courts—all want to crowd around the Kremlin like courtiers. This means the city is almost destined to destroy itself; it can’t grow outward, so every generation stomps on the heads of previous ones. Over a thousand buildings have been knocked down in the center so far this century, with hundreds of officially “protected” historic monuments lost. But the new buildings meant to replace them often stand dark and empty; property is the most effective money laundering scheme, making money for members of the Moscow government who give contracts to their own development companies, for the agents who sell the buildings to the nameless and faceless Forbeses, who need some way to stabilize their assets. A small crowd has gathered near the building site on Gnezdnikovsky. They put candles and flowers on the pavement in a little gesture of lament. These flash mobs mourning the death of old Moscow have become more frequent.

On the corner of Pakrovka three plump women who look like schoolteachers or doctors patrol an art nouveau apartment block, surrounded by their Labradors. They squint aggressively as we approach, then relax and greet Mozhayev when they see him. These little vigilante gangs have become common in Moscow, protecting not from burglars but from developers, who send arsonists to set buildings ablaze, then use the fire as an excuse to evict homeowners by claiming the houses are now fire hazards. The motivation is great: property prices rose by over 400 percent in the first decade after 2000. So these fires have become habitual in Moscow. Muscovites have taken to patrolling their own buildings at night: gangs of doctors, teachers, grannies, and housewives eyeing every passerby as if he were an arsonist. It’s pointless for them to call the police; the largest groups of developers are friends and relatives of the mayor and the government. The mayor’s wife is the biggest of the lot. The near mythical Russian middle class, suddenly finding they have no real rights at all over their property, can be thrown out and relocated like serfs under a feudal whim.

There isn’t a building that we walk past that wasn’t the scene of execution squads, betrayals, mass murders. The most gentle courtyards reveal the most awful secrets. Around the corner from Potapoffsky is an apartment block where every one of the families had someone arrested during Stalin’s terror. In the basement of what is now a brand new shopping mall was the courtroom where innocent after innocent was sentenced to labor camps, the courts working so fast they would get through two cases inside a minute. And those are just the Stalin years, not even encroaching on the dismal betrayals of later decades, listening at the door of your neighbors’ rooms to report them tuning into the BBC or Radio Free Europe. “Every new regime rebuilds the past so radically,” Mozhayev says as we move back toward Barrikadnaya. “Lenin and Trotsky ripping up the memory of the tsars, Stalin ripping up the memory of Trotsky, Khrushchev of Stalin, Brezhnev of Khrushchev; perestroika gutting the whole Communist century . . . and every time the heroes turn to villains, saviors are rewritten as devils, the names of streets are changed, faces [are] scrubbed out from photographs, encyclopedias [are] re-edited. And so every regime destroys and rebuilds the previous city.” On the corner of Barrikadnaya a little baroque house is pushed out of the way by a constructivist apartment block of the 1920s, in turn dominated by a sneering, Stalin skyscraper, itself now outflanked by the dark glinting tiles of a huge, domed new mall, resembling the tents and spears of Mongol battle camps. And all these buildings seem to push and shove each other out of the way. If areas of London or Paris are built in a similar style—searching for some sort of harmony, memory, identity—here each building looks to stamp and disdain the last, just as every regime discredited the previous.

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Whenever twenty-first-century Russian culture looks for a foundation it can build itself from, healthy and happy, it finds the floor gives way and buries it in soil and blood. When the Ostankino channels launch the Russian version of the British TV show Greatest Britons, renamed Name of Russia, it’s meant to be a straightforward PR project to boost the country’s patriotism. The audiences across the nation are to vote for Russia’s greatest heroes. But as the country starts to look for its role models, its fathers, it turns out that every candidate is a tyrant: Ivan the Terrible, founder of Russia proper in the sixteenth century and the first tsar; Peter the Great; Lenin; Stalin. The country seems transfixed in adoration of abusive leaders. When the popular vote starts to come in for Name of Russia, the producers are embarrassed to find Stalin winning. They have to rig the vote so that Alexander Nevsky, a near-mythical medieval warrior knight, born, we think, in 1220, can win. He lived so long ago, when Russia was still a colony of the Mongol Empire between the thirteenth and fifteenth centuries, that he seems a neutral choice. Russia has to reach outside the history of its own state to find a father figure. But though this was never mentioned in the program, what little evidence there is of his career shows that Nevsky made his name by collecting taxes, quelling and killing other rebellious Russian princelings for his Mongol suzerain. How do you build a history based on ceaseless self-slaughter and betrayal? Do you deny it? Forget it? But then you are left orphaned. So history is rewritten to suit the present. As the President looks for a way to validate his own authoritarianism, Stalin is praised as a great leader who won the Soviet Union the war. On TV the first attempts to explore the past, the well-made dramas about Stalin’s Terror of the 1930s, are taken off screen and replaced with celebrations of World War II. (But while Stalin’s victory is celebrated publicly and loudly, invoking him also silently resurrects old fears: Stalin is back! Be very afraid!) The architecture reflects these agonies. The city writhes as twentyfirst-century Russia searches, runs away, returns, denies, and reinvents itself.

I advise him to take care on the corner where the traffic police like to change the signs from “single lane” to “no way” overnight to catch out drivers and extract their rent—the city is an obstacle course of corruption, and your options are to get angry or play up and play the game and just enjoy it.

A Muscovite measures out his life in jams, the day’s success or failure judged by how many hours you spend in traffic. They have become the city’s symbol. The only way to relieve the city would be to move financial and government centers out of the inner rings of town. But that would be out of keeping with the feudal instincts of the system. So the traffic becomes the expression of the stalemate at the center of everything: on the one hand the free market means everyone can own a car, but on the other all the cars are in jams because of the underlying social structure. The siren-wielding, black (always black), bullet-proof Mercedeses of the big, rich, and powerful are free to drive against the flow of traffic, speed through the acid sludge, driven by modern-day barons who live by different rules. The sirens are the city’s status symbol, awarded like knighthoods to the most loyal bureaucrats, businessmen, and film directors (or for a certain price).

“Don’t worry, my brother,” he tells me, “we’ll clean the streets of all the filth, all the darkies, the Muslims and their dirty money. Holy Russia will rise again.” One bumps into these types occasionally, Eurasianists, Great Russians, holy neo-imperialists, and the like, few but quietly supported by the Kremlin to have a mouthpiece through which to keep the conversation away from corruption and focused on fury at foreigners (the Kremlin isn’t keen to say these words itself).

Military Service

I pass through the station and head for the St. Petersburg train and my latest story—about mandatory military service, the great initiation into Russian manhood. Every April and October the color khaki seems to suddenly sprout on the streets as bands of young soldiers appear in the cities; skinny, in uniforms either too large or small, with pinched red noses and red ears, scowling at the gold-leaf restaurants. They hang around at the entrances of metro stations where the warm air gusts up from the underground, shiver while sucking on tepid beer on street corners of major thoroughfares. They come shuffling upstairs and knocking on apartment doors and stalk through parks. It’s the time of year of Russia’s great annual hide and seek; the soldiers have been given orders to catch young men dodging the draft and force them to join the army.

Military service might be mandatory for healthy males between 18 and 27, but anyone who can avoids it. The most common way out is a medical certificate. Some play mad, spending a month at a psychiatric clinic. Their mothers will bring them in: “My son is psychologically disturbed,” they will say. “He has been threatening me with violence, he wakes up crying.” The doctors of course know they are pretending, and the bribe to stay a month in a loony bin will set you back thousands of dollars. You will never be forced to join up again—the mad are not trusted with guns—but you will also have a certificate of mental illness hanging over you for the rest of your career.

Other medical solutions are more short term: a week in the hospital with a supposedly injured hand or back. This will have to be repeated every year, and annually the hospitals fill up with pimply youths simulating illness. But the medical route takes months of preparation: finding the right doctor, the right ailment—because the ailments that can get you off change all the time. You turn up at the military center with the little stamped registration card that your mother has spent months organizing and saving for, then find that this year flat feet or shortsightedness are no longer a legal excuse.

If you’re at a university you avoid military service (or rather you fulfill it with tame drills at the faculty) until you graduate. There is no greater stimulus for seeking a higher education, and Russian males take on endless master’s degree programs until their late twenties. And if you’re not good enough to make it into college? Then you must bribe your way into an institution; there are dozens of new universities that have opened in part to service the need to avoid the draft. And the possibility of the draft makes dropping out of college much more dangerous—the army will snap you up straightaway. When the bad marks come in, mothers start to fret and scream at their sons to work harder. And when they can see the boys might fail, it’s time to pay another bribe, to make sure they pass the year. But there are a certain number of pupils the teacher has to fail to keep up appearances, and the fretting mothers start to put out feelers for the most desperate and most expensive remedy: the bribe to the military command. The mothers come to the generals, beat and weep on the doors of the commanders, cry about their sons’ freedoms (money by itself is not always enough; you have to earn the emotional right to pay the bribe).

But all these options are only available for those with money and connections. For the others, for the poorer ones, it’s hide and seek time. The soldiers will grab anyone who looks the right age and demand his documents and letters of exemption, and if he doesn’t have them march him off to the local recruitment center. So the young spend their time avoiding underground stops or hiding behind columns and darting past when they see the soldiers are flirting with girls or scrounging cigarettes off passersby. You see teens sprinting through the long, dark marble corridors of the subway as cops give chase.

When soldiers come by apartments, potential conscripts pretend they are not there, barricading themselves in, holding their breath until the soldiers go away. The soldiers eventually get tired and leave, but from now on every time you have your documents checked by police you will be trembling that they might ring through and see whether you dodged the draft. And every time you go into the subway, every time you cross a main road, every time you meet friends near a cinema, any time you leave your little yard, life becomes full of trepidation. And you will live semi-illegally until you are 27, unable to register for an official passport and thus unable to travel outside of the country. This is the genius of the system: even if you manage to avoid the draft, you, your mother, and your family become part of the network of bribes and fears and simulations; you learn to become an actor playing out his different roles in his relationship with the state, knowing already that the state is the great colonizer you fear and want to avoid or cheat or buy off.

Those too poor, too lazy, or too unlucky to avoid the draft—or those for whom the army seems a better option than anything they have—are rounded up, stripped, shaved, and packed off to bases all across the country.

Where he will be sent depends on the bribe a soldier pays. Some will go to Chechnya, to Ossetia, to the death zones everyone dreads. But if you pay in time, you’ll avoid those. What no one will be safe from is hazing, known in Russia as the “law of the grandfather”: dozens of conscripts are killed every year, hundreds commit suicide, and thousands are abused. Those are just the official statistics.

This is why every mother wants to keep her son away from the army. New conscripts are known as “spirits.” And as the tarpaulin-covered trucks pass through the gates of the army bases, the conscripts will hear the shouts of the older officers waiting for them: “Hang yourselves, spirits, hang yourselves!” they call. And the great breaking-in begins. The Committee of Soldiers’ Mothers, an NGO run by the mothers of conscripts past and present, is the refuge “spirits” flee to when they run away from camp.

In the office of the Soldiers’ Mothers the walls are lined with photographs of dead soldiers. I’ve come to interview four 18-year-olds who have recently fled from a nearby base called Kamenka. They are desperate to prove they didn’t just run away because of common hazing, that they’re loyal, tough. They seem embarrassed by having to take shelter with fifty-year-old women.

“You get beaten up, that’s fine. I pissed blood but that didn’t scare me,” says one, the skinniest. “Stools broken over your head. It’s good for you,” echoes another. “They put a gas mask over your face, then force you to smoke cigarettes while you do push-ups. If you get through that you’re a real man.” “I’m not red, . . . ” they all repeat.

“You need discipline. But what happens at Kamenka has nothing to do with discipline.” “The ‘grandfathers’ beat you to extort money, not because they want to make a soldier out of you.” The conscripts spend most of their time repairing and repainting military vehicles, which are then sold on the sly by Kamenka’s command. The “spirits” are essentially used as free labor.

The boys had run away after a night of nonstop beatings. The “grandfathers” had been drinking all day, and then at night they began to whack the boys with truncheons. The commanding officer came by but did nothing; commanding officers need the help of the “grandfathers” in their larger corruption schemes and let them have their fun. They go to great lengths to cover up for the “grandfathers.

“In one week, the Soldiers’ Mothers told me, five “spirits” at Kamenka had their spleens beaten to a pulp. The commanders couldn’t take the “spirits” to a normal hospital; too many questions would be asked. So they had to take them privately, paying 40,000 rubles (over $1,000) for each operation. At 6:00 a.m. the “grandfathers” told the “spirits” they needed to each bring 2,000 rubles ($50) by lunchtime or they would kill them. One of the conscripts, Volodya, had decided to make a run for it. He slipped through the fence and made it to the road. His father had picked him up and brought him here.

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Another director is shooting a film about a man in Ekaterinburg who was beaten nearly to death by traffic cops when he refused to pay a bribe; now he exacts his vengeance by catching traffic cops giving bribes on video and posting them online.

The victims I meet never talk of human rights or democracy; the Kremlin has long learned to use this language and has eaten up all the space within which any opposition could articulate itself. The rage is more inchoate: hatred of cops, the army. Or blame it all on foreigners.

Some teens, the anarchists and artists, have started to gather and protest, rushing out of the metro and cutting off the roads and the main squares. They call their gatherings “Monstrations” and carry absurdist banners: “The sun is your enemy.” “We will make English Japanese.” “Eifiyatoloknu for president.” The only response to the absurdity of the Kremlin is to be absurd back. An art group called Vojna (“War”) are the great tricksters of the Monstration movement: running through the streets and kissing policewomen; setting cockroaches loose in a courtroom; projecting a skull and crossbones onto the parliament building.

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Just as I feel I’m on a roll, my little corridor is cut off. “We’re sorry, Peter,” my producers tell me at TNT, “we’ve been told to stop making . . . ‘social’ films. You understand. . . . ” They look a little uncomfortable when they say this. I’m uncomfortable for their discomfort, and I find myself nodding. Of course I understand. I have learned to pick things up on the edge of a hint. I don’t ask “why.” I don’t argue that ratings should be our priority. There are unspoken walls. The Kremlin wave of cleaning things up has finished. The 2008 financial crisis in the West has lowered the oil price, and there’s less money for the Kremlin to indulge in toying with reforms. We need calm now. The economy is curdling.

As I am coming out of TNT toward evening, the neon lamps on the sushi bars are already lighting up dark mountains of dirty acid sludge: the chemicals the city puts in grit burn the paws of stray dogs. You can hear them whimper as they huddle by the warm pipes along the buildings. Two pork-faced cops, whom Muscovites have taken to calling “werewolves in uniform,” patrol the corner. I try not to gawk and walk past in the Moscow style, face down and furious. The main thing is not to catch their eye—one of my many registrations has expired. But they can still smell the fear on me—belching out the phrase that is their mark of power: “Documents: Now!” I know the script. They shepherd me toward the darkness of a courtyard. Then comes the ultimate Moscow transaction, the slipping of the bribe, a 500-ruble note already placed that morning among the pages of my passport (the rate has been going up as the economy worsens). But never offer money directly. Paying bribes requires a degree of delicacy. Russians have more words for “bribe” than Eskimos do for “snow.

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Grigory began by making his own computers. They sold well. Soon he had a team of other students working with him. Got involved with banking. Then came the new world of threats, bodyguards. At the parties, people would whisper he was lucky to have made it through alive. “The worst is when people owe you money,” Grigory told me once as we drove through the woods outside of Moscow in a new, silver, sports car. “As long as you owe them, they’ll never kill you. But if they owe you they’d rather kill than pay. I dream of being able to go outside without bodyguards. A normal life.

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The Rose of the World wasn’t the first sect I had encountered in Russia. As the Soviet Union had sunk, so sects had bubbled to the surface. Indeed, it was the Kremlin that had given them an impetus, via the power of Ostankino. In 1989 a new show appeared on Soviet TV. Instead of the usual ballet and costume dramas, the audience suddenly saw a close-up of a man with 1970s porn star looks, black hair, and even blacker eyes. He had a very deep voice. Slowly and steadily and repeatedly he instructed the viewer to breathe deeply, relax, breathe deeply. “Close your eyes. You can cure cancer or alcoholism or any ailment with the power of thought,” he said. This was Anatoly Kashpirovsky. He was a professional hypnotherapist who had prepared Soviet weight-lifting teams for the Olympics. He had been brought to late Soviet TV to help keep the country calm and pacified. To keep people watching TV while everything went to shit.

His most famous lecture involved asking the audience at home to put a glass of water in front of their TV sets. Millions did. At the end of the program Kashpirovsky told the audience the water was “charged with healing energy” from his through-the-screen influence. Millions fell for this. But Kashpirovsky was only the beginning.

There was Grabovoy, who had a show on television and claimed he could raise the victims of Chechen terror attacks from the dead; there was Bronnikov, who claimed he had found a way of making the blind see with an inner vision. The sect the TNT personnel were referring to when they mentioned “communes in Siberia” was that of Vissarion, a former postal worker from Krasnodar who became convinced he was the returned Christ. In the 1990s he had founded a colony in the mountains near the border with Mongolia: “The Abode of Dawn City.” It’s still there.

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