Wednesday, June 25, 2008

"Clean Coal"

Here you can see John McCain supporting clean coal technology in order to wean us off our foreign oil addiction and satisfy our clean energy needs over the next century:

Other major politicians, including President Bush, Barrack Obama, and Hillary Clinton, have supported clean coal as well.

The idea is pretty simple: coal is a very dirty substance, but it is also very cheap to use. And we have a LOT of it, especially in the United States. If we can find someway to reduce the pollution coal generates, we have ourselves an energy resource that will take care of us for centuries without damaging the environment.

Problem: Clean Coal prolly ain't so clean. 

First, thinking that we can eliminate all the negative environmental consequences just by focusing on the "burning" part is ill-founded. Coal mining itself is considered to be highly damaging to the environment. It leaves massive scars on the earth where the mining took place, and can lead to dangerous run-offs in local ground water. Yikes! Even burning coal in some super ultra-clean fashion will not eliminate THOSE effects, and damaging the ground like that might not be such a great idea in the long-run (we might want to live in Wyoming one day, after all).

Also, even with all of our advanced technologies we have these days (including advanced scrubbing technology and burning low sulfur coal), most urban areas are STILL in violation of the Clean Air standards. I don't know what kind of technologies we can produce in the next 5 years that we hacen't already developed in the last 30 that is going to magically make coal a super-awesome source of energy. 

Finally, the biggest issue facing coal plants now is carbon dioxide emissions, which are a leading cause of climate change in the world. There are currently no means for dealing with the carbon emissions from coal plants, and the most likely method (turning CO2 into liquid and shoving it back into the ground) could cost a LOT a money to implement. If it even works, that is: we're still in the experimental stage on that.

That's not to say clean coal has absolutely no role to play in our electricity policy. It's just that it is unlikely to become a bedrock for any policy that addresses environmental concerns. Many areas of the nation will still use coal energy, such as cities that require intensive amounts or areas of the country that are resource-poor in renewables.

And hence, I don't see what the fuss regarding clean coal is all about.

Friday, June 20, 2008

Economic Outlook for the US: 2008

Well, first quarter growth, while weak, was a little bit better than expected. The economy grew at a .9% pace, as opposed to the .6% pace of previous months. If the 2001 economic slowdown is any indication, the US should avoid a recession. Even the Fed has apparently decided to stop its aggressive interest rate cuts, opting for a “wait and see” approach to see how the economy handles the various stimulants that have been injected into it over the past half a year.

Unfortunately, we are FAR from out of the woods. GDP growth was largely carried by inventory build-up by businesses, rather than actual consumption growth. In fact, personal consumption grew barely, and mostly on non-durable goods (which people would buy up if they were confident their incomes were growing). So, demand isn’t holding up that well. And we shouldn’t expect it to, either, as incomes lag, people start saving more, and gas prices continue rising.

What happens when demand starts falling? That means that US companies, two-thirds of which are considered are junk debt now, are going to be struggling to pay bills. That means a lot of fold-ups, and a lot less business investment (especially since bigger companies are going to prefer to buy these cash-strapped smaller companies and their assets, as opposed to new investment). Lower returns for them also means problems for the banks that are relying on those payments. And that means more trouble in the financial sector, which is in turn going to keep a clamp on lending for the foreseeable future.

Is the Back of a Cocktail Napkin the Best Place to Solve the World's Problems?

Well, some people seem to think so:

The back of the Napkin: Solving Problems and Selling Ideas with Pictures

Guesstimation: Solving the World’s Problems on the Back of a Cocktail Napkin

I admit, there’s something very intriguing about simple explanations that can be summed up on something that’s about six square inches. Unfortunately, the back of a cocktail napkin can be a bit too simplistic and unrefined sometimes (see Laffer Curve)

Are You a 2?

Jimmy John’s is an interesting restaurant. I’m not such a big fan of their sandwiches, but the place is very “alive.” Everywhere you look, you can see posters, quotes, interesting historic pictures, etc etc.

At the UIC-area location, a poster of famous quotes from Dave Berry lays on the right-side wall. One of them I find particularly humorous and truthful. It goes something like “Regardless of race, religion, age, or sex, we are all unified by the same confidence that we are above average drivers.”

People, and I guess Americans in particular, are very over-confident in there ability (especially their driving abilities). Unfortunately, these unrealistically high expectations typically lead to a lot of disappointment as we realize our limits. Thankfully, we don’t all realize those limits in public, and, thankfully, most of us are “good enough” drivers.

I like to think I keep a realistic view of my abilities. So, at the beginning of this semester, when our finance teacher handed out a survey, I marked myself down as a “2” on a scale of 1-5 when asked about my driving ability.

I wonder how many other people answered that way?

At the end of the semester, the finance teacher went over the survey results. Of all the guys, half said they were 5s. Another half said they were 4s.

And then the teacher picked up his head up, looked calmly at the class, and slowly said “and some boy said he was a 2.”

Interesting, ey?