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The Cost of Fossil Fuels to an Economy Is Not Reduced by Subsidies; It Is Just Redistributed

4721 Votes Countries around the globe have committed to reducing subsidies for fossil fuels, primarily oil and gas. But that commitment is not being put into practice quickly enough for cleaner energy solutions to gain a competitive edge in some regions, according to the 2014 World Energy Outlook from the International Energy Agency. Global subsidies for fossil fuels totaled nearly $550 billion in 2013. That figure is $25 billion lower than that of the previous year, but the IEA notes that is still not enough of a shift to make renewable energy competitive in the countries with the highest subsidies. More than half of the world’s fossil-fuel subsidies go to oil, and many of the subsidies are concentrated in oil- and gas-producing countries in the Middle East and North Africa. The subsidies that go to fossil fuels dwarf the subsidies for renewable energies, which the IEA put at $120 […]

Posted On : Published By : Tom Whipple
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European Union Lowers Growth Forecasts as Business Confidence Sags

BRUSSELS — European Union officials on Tuesday sharply lowered growth forecasts as member states like France, Germany and Italy showed weak economic performance, and as business confidence suffered from heightened geopolitical risks. Growth is expected to be a meager 1.3 percent in the 28-member bloc this year, instead of the 1.6 percent predicted in the spring, said the European Commission, the union’s executive arm. And the economy is not expected to get much better in 2015, when growth in Germany, the region’s economic engine, is expected to grind down to about 1 percent. “The economic and employment situation is not improving fast enough,” Jyrki Katainen, the European Commission vice president for jobs and growth, said in a statement accompanying the closely watched economic forecast. Unless there are additional signs of growth and job creation in the next five years, “people could despair of the European project,” Pierre Moscovici, the […]

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US shakes off torpor with 3.5% growth

US real GDP growth The US economy expanded at an annualised rate of 3.5 per cent in the third quarter of 2014, ending years of mediocre domestic growth and shaking off the more recent weakness in other major global economies. The figure came in well ahead of analysts’ expectations of 3 per cent growth – supporting the US Federal Reserve’s decision to end its third round of quantitative easing on Wednesday. But the details portray an economy that is steady, not accelerating. They suggest the US economy is ploughing forward, despite drag from the eurozone and emerging markets, but not rapidly enough to become the engine of global growth. “The growth in household consumption was disappointing, and business investment grew only moderately,” said Gad Levanon at the business organisation the Conference Board. “We expect the US economy to grow at about a 2.5 per cent rate on average in […]

Posted On : Published By : Tom Whipple
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Shale Boom Helping American Consumers Like Never Before

Oil traders might see the 27 percent slide in global prices as a bear market . For U.S. consumers, it’s more like an early holiday gift. The drop in crude has pulled retail gasoline down more than 50 cents a gallon from the year’s high in April. That means annual savings of $500 for the average U.S. household, which consumes about 1,000 gallons of fuel a year, according to data from the Federal Highway Administration and Energy Information Administration. “That’s like somebody putting dollars right in your pocket,” David Hackett , the president of Stillwater Associates, an energy consultant in Irvine , California , said by phone on Oct. 14. “That sounds like Christmas presents, going out to dinner, being able to do something.” Gasoline’s slide represents the biggest benefit that U.S. consumers have seen to date from a record boom in domestic oil production, a surge that’s contributing […]

Posted On : Published By : Tom Whipple
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IMF sees risk of new eurozone recession

The outlook for the global economy has darkened, the International Monetary Fund warned on Tuesday, as it estimated there is now a four in 10 chance the eurozone will slide into a third recession since the financial crisis. The Fund’s estimates of weaker growth in its twice-yearly World Economic Outlook reflect the continued hangover from the 2008 slump, alongside fears that the world may have entered a new phase of mediocre growth . More On this topic IN Global Economy Olivier Blanchard, IMF chief economist, said the challenge for policy makers was “to re-establish confidence by articulating a clear plan to deal with both the legacy of the crisis and the challenges of low potential growth”. The WEO noted that the pattern of global recovery was becoming “more country-specific”, with a few nations bucking the wider gloomy trend, and others hit by local political or economic difficulties. Overall, the […]

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World population growing, not slowing

The possibility that the world’s population will climb to 11 billion by the end of the century is gaining traction now that demographers are using probability methods for their projections. A paper published online on Thursday in the journal  Science details new methodology that shows that most of the world’s anticipated growth is in Africa, where population is projected to quadruple from about 1 billion today to 4 billion by 2100. “For the last 20 years, prevailing opinion was that world population would go up to 9 billion and level off in the middle of the century and maybe decline,” said Adrian Raftery, one of the paper’s lead authors and a professor of statistics and sociology at the University of Washington. “Population is going to keep growing. We can say that with confidence.” Not only with confidence but with an exact percentage. There is a 70 percent probability that world […]

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API: Energy boosting U.S. economy

WASHINGTON, Sept. 10 (UPI) — A study conducted by the U.S. energy industry’s American Petroleum Institute finds the sector is supporting around 8 percent of the nation’s economy. "Oil and natural gas companies are only one part of a much larger economic success story that is creating job growth up and down the supply chain," API Upstream Group Director Erik Milito said in a statement. API published a vendor survey listing more than 30,000 segments across the country tied to U.S. energy sector. As of 2011, API said the oil and gas industry has supported 9.8 million full- and part-time jobs and 8 percent of the U.S. economy. Its study found benefits across the board , with the No. 1 state, Texas, boasting 1.9 million energy jobs to the bottom, the District of Columbia, with 13,700 jobs. API credited the growth to horizontal drilling and hydraulic fracturing in shale […]

Posted On : Published By : Tom Whipple
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Is the World at ‘Peak Gold’?

This week, Chuck Jeannes told  The Wall Street Journal that either this year or next, miners will have reached “peak gold.” Peak gold means that the amount of gold being pulled out of the earth will begin to shrink every year, rather than increase, which has been the case since the 1970s. Jeannes is the chief executive of the world’s largest gold mining company, Goldcorp, so it’s probably safe to assume he knows a thing or two about mining the yellow metal. Let’s put this into context. Central banks continue to stockpile gold ( even Scotland is wondering how much of the United Kingdom’s gold it will get if it becomes an independent country). Nobody knows how much gold China is hoarding, but pretty much everyone assumes it’s a lot more than the official reports. Smart economists like Peter Schiff and Jim Rickards have been pointing out for a year now that gold buyers […]

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On The Brink Of A Major Crisis: “This Will Be A Literal Collapse of the Entire Global Monetary System”

Discussions of the possible collapse of the U.S. dollar often center around how such an event will affect the domestic economy. But the dollar doesn’t just operate inside of a bubble. It is the world’s reserve currency for a reason. Some sixty-six countries world-wide either utilize it as their primary currency or peg their own currencies to its exchange rate. What this means, as noted by Future Money Trends in the micro documentary below, is that if and when the dollar does come under attack the fallout will be everywhere. The collapse will happen simultaneously and affect billions of people worldwide. This is 33% of the nations of the world all submitting their currency sovereignty to the US Federal Reserve. If and when the U.S. loses its currency status this will be a literal collapse of the entire global monetary system… A system that is built on lies, fraud and […]

Posted On : Published By : Tom Whipple
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Can an Economy Develop Without Coal?

While all fossil fuels are contributing to the accumulation of carbon dioxide in the atmosphere, coal stands apart as really problematic, not just because of its CO2 emissions today (see chart, global emissions in millions of tonnes CO2 vs. time), but because of the vast reserves waiting to be used and the tendency for an emerging economy to lock its energy system into it. Global energy emissions I recently came across data relating to the potential coal resource base in just one country, Botswana, which is estimated at some 200 billion tonnes. Current recoverable reserves are of course a fraction of this amount, but just for some perspective, 200 billion tonnes of coal once used would add well over 100 billion tonnes of carbon to the atmosphere and therefore shift the cumulative total from the current 580 billion tonnes carbon to nearly 700 billion tonnes carbon; and that is just from Botswana. […]

Posted On : Published By : Tom Whipple