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From peak oil to energy abundance. Energy expert now says the Permian Basin is a permanent, near-infinite resource
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From David Blackmon’s Forbes article “Gilmer: We Should View The Permian Basin As A Permanent Resource” (emphasis mine):
Allen Gilmer, Co-Founder and Executive Chairman at DrillingInfo is not a man who minces words, an attribute that has served him well during a long career in the oil and gas industry. When it comes to the Permian Basin in West Texas and the amount of oil and gas resource contained in it, he becomes positively loquacious. “We should view the Permian Basin as a permanent resource,” he says, “The Permian is best viewed as a near infinite resource – we will never produce the last drop of economic oil from the Basin.”
No one disputes that the resource in the Permian is huge, but ‘infinite’ is a big word. I asked him to expand on that concept. “That is the practical reality with the amount of resource that is in the ground,” he says, “The research we’ve done indicates that we have at least half a trillion barrels in the Permian at reasonable economics, and it could be as high as 2 trillion barrels. That is, as a practical matter, an infinite amount of resource, and it is something that has huge geopolitical consequence for the United States, in a very good way. It has a huge consequence in terms of GDP, and right now it is creating an American energy global ascendancy.”
MP: What an amazing turnaround in just the last decade in how we view energy abundance/energy scarcity in America! About ten years ago, before the Shale Revolution, the general consensus was that we were entering an era of increased energy scarcity because of “peak oil” — the “hypothetical point in time when global production of oil reaches its maximum rate, after which oil production will gradually decline.” See a Google Trends time-series chart here of the search interest in the term “peak oil” — it peaked in 2005 (and again in May 2008 at a slightly lower level) before declining in the post-Shale Revolution era to almost nothing in recent years.
And now we have an oil expert and geophysicist talking about America’s most prolific oil field — the Permian Basin — as a “permanent, near infinite resource” that will never run out! Peak what?
The charts above show graphically the amazing productivity of the Permian Basin. According to EIA estimates, the Permian Basin is now producing more than 2.5 million barrels of oil per day (see top chart), which is an annual rate of nearly 1 billion barrels of oil. If Gilmer’s estimate is correct that the Permian Basin holds an additional half a trillion barrels of recoverable oil, that would be a 500-year supply of oil at the current production level, and at 2 trillion barrels, a 2,000 year supply! And if that’s an accurate forecast of Permian Basin reserves, Gilmer’s description of the Permian Basin as a “permanent, near infinite resource” makes perfect sense because the probability is pretty close to zero that we’ll be using fossil fuels even 100 years from now, much less 500 years or 2,000 years in the future.
The bottom chart above shows the increasing importance of the Permian Basin’s oil output to the total US supply. In 2010 only about 1 in 6 barrels of domestic oil (16.5%) came from the Permian Basin in West Texas and now more than 1 in 4 barrels (27% in July) of US oil production is from the Permian Basin.
Bottom Line: We’ve come a long way in ten years, from an era of “energy scarcity” and growing concern about “peak oil” as recently as 2008, to a new era of “energy abundance” and a Texas energy expert describing the Permian Basin as an inexhaustible, permanent, and near infinite resource. The game-changing importance of the amazing, revolutionary, “Made-in-the-USA” technologies that sparked America’s Shale Revolution, and especially the contribution of the creative genius of the US petropreneurs who were behind those innovative breakthroughs, really cannot be overstated. Carpe Oleum.
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Jeffrey Miron’s post at the Cato at Liberty blog “Statues“:
Why should a city, state, or federal government put statues in public parks? Doing so addresses no plausible market failure, while using taxpayers funds and, as demonstrated tragically over the past few weeks, generates controversy, polarization, and violence. Thus governments should take down all statues, regardless of their political implications.
This is not “erasing” history but instead leaving it where it belongs, in the hands of private actors and mechanisms. Historians, textbook authors, universities, learned societies, the History Channel, and many other individuals and organizations can all present their own views of history and battle for the hearts and minds of the public. Government statues are government putting its thumb on the scale, which is one step down the slippery slope of thought control.
HT: Don Boudreaux
We hear about US jobs outsourced overseas (‘stolen’) but what about the 7.4M insourced jobs we ‘steal’ from abroad?
View related content: Carpe Diem
We’ve been hearing a lot over the last year or more, especially from President Trump and many of his economic advisers and supporters, about US firms outsourcing factory jobs overseas, along with accusations that countries like Mexico, China, and Japan are “stealing US jobs” (see more than 200,000 Google search results for “Trump” + “stealing jobs”). Further, Trump warned last December that his government would punish US companies seeking to move operations and jobs overseas with “consequences.”
What we don’t hear very much about from Team Trump are the jobs that are “insourced” into every US state by foreign companies, even though those insourced jobs totaled more than 7.4 million Americans and represented 6.2% of all private sector US jobs in 2015 based on new preliminary data from the Bureau of Economic Analysis on “Activities of U.S. Affiliates of Foreign Multinational Enterprises in 2015.” The map above (thanks to AEI’s Olivier Ballou for assistance) shows the thousands (and in more than half the US states the hundreds of thousands) of insourced jobs in each US state in 2015.
Here are some key statistics on jobs insourced to the U.S. that highlight some of the significant economic benefits to the U.S. economy from the thousands of foreign-based firms that outsource jobs and production to the U.S.:
- More than 6,000 US affiliates of foreign multinational enterprises (MNEs) employed 7.4 million American workers in 2015, an increase of 15.6% from 2014, adding roughly one million new jobs to the US economy. Employment by US affiliates represented 6.2% of the total U.S. private industry employment in 2015 (119.8 million workers).
- The current-dollar value added of majority-owned US affiliates, a measure of their direct contribution to US GDP, totaled $895 billion in 2015 and accounted for 6.4% of total US private industry value added in 2015.
- US affiliates invest heavily in American manufacturing, making up 35% of all insourced jobs in 2015. US affiliates supported more than 2.6 million factory jobs, accounting for more than 21% of total American manufacturing employment (12.3 million total factory workers).
- US affiliates’ share of American manufacturing employment in 2015 made up 45% of both jobs in the motor vehicles and parts industry and the chemicals industry.
- US affiliates of foreign MNEs supported an annual payroll of $587 billion in 2015—with an average compensation per worker of nearly $80,041 (27% greater than the private sector average of about $63,000).
- US affiliates of foreign companies paid an average compensation of more than $90,000 in the manufacturing sector (10% more than the national manufacturing average).
- US affiliates exported $361.5 billion in goods (24% of all US exports).
- US affiliates imported $688 billion in goods (30% of all US imports).
- US affiliates spent $61.2 billion on R&D in 2015 (12% of all US R&D).
- UK affiliates in the U.S. spent the most on R&D in 2015—$8.2 billion, followed by Japanese, German, and Dutch affiliates.
- US affiliates paid $46.5 billion in US income taxes
- US affiliates spent $273 billion on new property, plant, and equipment in 2015.
- As a separate state, the $587 billion annual payroll of Americans working for foreign insourcing companies in the U.S. in 2015 would have ranked that group of American employees as the seventh largest US “state” for Personal Income, just behind No. 6 Pennsylvania at $629 billion and ahead of No. 8 New Jersey at $535 billion.
In other words, the insourcing of production and jobs to the US has a significant and positive impact on our economy, and yet this huge economic stimulus gets almost no attention. All we ever hear about from Team Trump is the jobs that are allegedly being “stolen” from us by China, Japan, and Mexico.
Bottom Line: In today’s highly globalized economy, multinational firms operate in a world marketplace that increasingly makes national borders meaningless and irrelevant, as firms capitalize on hyper-efficient global supply chains that add enormous value, and ultimately result in lower costs and higher quality for the goods that consumers buy here and around the world. In the recent Trump-era discussions on US manufacturing, the outsourcing of production and jobs overseas, and the supposed “theft” of our jobs by Mexico, China and Japan, we lose sight of another big part of the global economy: the insourcing of millions of jobs into America by the 6,200 US-based affiliates of foreign multinational companies that operate here and employ millions of our workers.
Q: How could it possibly make sense for Trump to accuse Mexico, China and Japan of “stealing” our jobs, unless he also admits that the US is apparently then also “stealing” jobs from other countries, more than seven million in 2015? A more enlightened and up-to-date view of international trade would recognize the economic reality that modern businesses today operate in an increasingly globalized marketplace for their inputs, parts, materials, supplies along complex, cross-border supply and value chains that include multiple dozens of countries. In addition, those global companies serve retail markets in hundreds of countries around the globe.
Just like it makes economic and business sense for thousands of foreign companies to outsource jobs and production from their countries to every US state (perhaps because the US is one of their major retail markets), it also makes economic and business sense for thousands of US companies to outsource jobs and production from the US to foreign countries, perhaps also because overseas markets now represent more than 50% of retail sales for many US-based companies like Apple (65% of 2015 sales were in foreign markets), Procter and Gamble (63% sales were overseas), Hewlett-Packard (62% foreign sales) and Pfizer (56% overseas sales). Hopefully, Team Trump can move beyond a simplistic, outdated view of the global economy based on a fixed number of jobs where countries have to fight to “steal” jobs from each other in a zero-sum, win-lose world, to a more advanced and sensible view of a dynamic world of inter-connected, cross-border transactions where production and employment decisions are grounded in the reality of economics, and not politics.
Bonus: Venn diagram version below.
View related content: Carpe Diem
From Time.com, you can enter any US location by zip code and watch a time-series animation of the 2017 solar eclipse on Monday, August 21 based on your view from that exact location. For example, the graphic above shows what the eclipse will look like from Washington, D.C. at one minute past the 2:41 p.m. peak. Happy viewing next Monday, you’ll now know what to expect from your location!
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…. is from Don Boudreaux writing on the Cafe Hayek blog:
Anyone who accuses free traders of having a morality that’s too narrow and cramped is usually a hypocrite, although often unaware. It is the typical protectionist whose morality is far more narrow and cramped, for that person: 1) ignores or discounts the interests of both domestic and foreign consumers, 2) ignores the interests of all workers, domestic and foreign, save for the relatively small handful who stand to be protected today from having to compete with imports, and 3) ignores the benefits of freedom as an end in itself.
Google memo author exposes three of the most scandalous thought crimes of contemporary American society
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In his article “By Firing the Google Memo Author, the Company Confirms His Thesis” David Harsanyi identifies three thought crimes of the modern age:
The problem isn’t diversity; it’s that a senior software engineer admitted, perhaps unwittingly, to pondering three of the most scandalous thought crimes of contemporary American society.
1. The first thought crime is proposing that a meritocracy might be heathier for a company than bean-counting race, ethnicity and sex.
2. The second thought crime is pointing out that ideological diversity matters.
3. The third and most grievous thought crime of all is suggesting that men and women are, in general, physiologically and psychologically different, and thus they tend to excel at different things.
By firing Damore, Google confirms much of what he warns about.
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1. Chart of the Day I (above). Illustrates why Larry Summers had to resign as president of Harvard University when he dared to cite statistical evidence that the variability of male math aptitude has been proven to be greater than the variability of female math aptitude. So while men and women might have equal mathematical ability on average, there are disproportionately more men than women with very low or very high scores in the tails of the distribution. That is statistically verifiable and non-controversial, except among those who don’t understand distributions or who are blinded by gender/feminist activism. (HT/Warren Platts)
2. Cartoon of the Day (above).
3. Google’s Response Insults and Condescends to Women. From a post on the Legal Insurrection blog “Google CEO Mansplains That He Eliminated Diverse Thought … To Protect Defenseless Women“:
In other words: how dare a non-leftist male offer an opinion of his own? Google, it turns out, cannot tolerate random people expressing such thoughts . . . . because it’s bound to upset women. In this, Google insults women far more than anything in the now-fired employee’s missive ever could.
What women like me hear from Google:
Women are such precious, emotional, delicate creatures, damsels in distress really, that we wilt and swoon in the face of any commentary that suggests we are not capable in the tech world. The big, benevolent Google has cast itself as our hero, defending inherently weak women and firing some man no one has ever heard of because he expressed . . . thoughts!
4. Chart of the Day II (above) from Michael Shermer on Twitter, who asks:
Companies hiring from bottom 4 fields (e.g., Silicon Valley) beware of bias police. What about companies hiring from top 4? Are they biased?
5. Federal Level Program Count: Female-Only 100+, Male-Only 0. From CulturalMisandry.com:
Feminists often complain about how we live in a “patriarchy,” and how women are “oppressed” and men are privileged. Remember that when reading over this list below [of federal programs dedicated to women-only] and try to think of a single group in history that called themselves oppressed, but had so much dedicated to them. In contrast, there is not a single Federal level program dedicated to men or even boys in the US. Also note that almost every one of these female-only programs are in areas where women are doing far better than men and boys (education, health care, homicide, homelessness, workplace deaths, violence, etc.).
The list of more than 100 federal programs dedicated to women-only includes these program counts by federal agency:
Department of Health and Humans Services (18), Centers for Disease Control (9), National Institutes of Health (9), FDA (3), Department of Defense (5), Veteran’s Administration (6), Department of Education (8), NASA (7), Department of Energy (7), Department of Labor (10), SBA (3), HUD (4), USDA (2) and Department of Justice (23).
6. Chart of the Day II (above) — The Honeybees Are Back. From Bloomberg:
The number of U.S. honeybees, a critical component to agricultural production, rose in 2017 from a year earlier, and deaths of the insects attributed to a mysterious malady that’s affected hives in North America and Europe declined, according to a new U.S. Department of Agriculture honeybee health survey.
The reason for the bee comeback? Sean Reagan explains in the August/September issue of Reason “How Capitalism Saved the Bees“:
Despite the increased mortality rates for bees, there has been no downward trend in the total number of honeybee colonies in the US over the past ten years. Indeed, there are more honeybee colonies in the country today than when the collapse disorder began.
Beekeepers have proven incredibly adept at responding to this challenge. Thanks to a robust market for pollination services, they have addressed the increasing mortality rates by rapidly rebuilding their hives, with virtually no economic effects passed on to consumers. It’s a remarkable story of adaptation and resilience, and the media has almost entirely ignored it.
7. These Sugar Barons Built an $8 Billion Fortune With Washington’s Help is the title of a Bloomberg report about the Fanjul family in Florida, who has become wealthy a large multi-billion dollar fortune thanks to US sugar policies. That level of legal plunder and crony crapitalism demonstrate why trade protectionism and rent-seeking are so dangerous, costly and damaging to the economy, and why that type of evil behavior should be resisted, vilified and stopped. (HT/Warren Smith)
See recent CD post on rent-seeking here. As Gordon Tullock pointed out (quoted in the rent-seeking post):
As a successful theft will stimulate other thieves to greater industry and require great investment in protective measures, so each successful establishment of a monopoly or creation of a tariff will stimulate greater diversion of resources to attempts to organize further transfers of income.
It’s a great and overlooked point: If the Fanjul family can become multi-billionaires through rent-seeking that results in anti-consumer trade protectionism for the sugar industry, that successful legal plunder of consumers and taxpayers will inspire other potential protectionists to engage in rent-seeking for their industries and companies. That is, successful taxpayer/consumer pickpockets encourage more of that wasteful, immoral and shameful activity.
9. Video of the Day II (above) — How Airlines Schedule Flights. Fascinating.
10. Video of the Day III (below) — Venezuela’s Activist Journalists. In Venezuela, members of the media face censorship and threats. The Venezuelan government has recently cracked down on independent newspapers and radio networks in an effort to silence any voices critical of the ruling left-wing party. In the lead-up to last year’s elections, VICE News was on the ground in Venezuela with the activist journalists who are fighting against the censorship of the country’s dwindling free press.
View related content: Carpe Diem
The controversial “Google memo” has stirred up quite a firestorm this week of strong reactions and there are already more than 370,000 Google search results for that term, and more than 87,000 Google News search results. Here’s a link to the full text of the Google memo (with charts and hyperlinks that were missing from the first version of the memo that was published by a reporter at Gizmodo, who called it an “anti-diversity screed”).
In response to the Google memo controversy, Quillette Magazine asked four scientists with expertise in the fields of social psychology, personality psychology, evolutionary psychology, and sexual neuroscience to respond, and they featured those responses in an article published this week titled “The Google Memo: Four Scientists Respond.” Here are some excerpts of those responses (emphasis mine).
Geoffrey Miller, evolutionary psychology professor at University of New Mexico:
I think that almost all of the Google memo’s empirical claims are scientifically accurate. Moreover, they are stated quite carefully and dispassionately. Its key claims about sex differences are especially well-supported by large volumes of research across species, cultures, and history. Whoever the memo’s author is, he has obviously read a fair amount about these topics. Graded fairly, his memo would get at least an A- in any masters’ level psychology course.
Here, I just want to take a step back from the memo controversy, to highlight a paradox at the heart of the ‘equality and diversity’ dogma that dominates American corporate life. The memo didn’t address this paradox directly, but I think it’s implicit in the author’s critique of Google’s diversity programs. This dogma relies on two core assumptions:
- The human sexes and races have exactly the same minds, with precisely identical distributions of traits, aptitudes, interests, and motivations; therefore, any inequalities of outcome in hiring and promotion must be due to systemic sexism and racism;
- The human sexes and races have such radically different minds, backgrounds, perspectives, and insights, that companies must increase their demographic diversity in order to be competitive; any lack of demographic diversity must be due to short-sighted management that favors groupthink.
The obvious problem is that these two core assumptions are diametrically opposed. Let me explain. If different groups have minds that are precisely equivalent in every respect, then those minds are functionally interchangeable, and diversity would be irrelevant to corporate competitiveness. On the other hand, if demographic diversity gives a company any competitive advantages, it must be because there are important sex differences and race differences in how human minds work and interact. (See Venn diagram version above.)
Bottom Line: So, psychological interchangeability makes diversity meaningless. But psychological differences make equal outcomes impossible. Equality or diversity. You can’t have both. Weirdly, the same people who advocate for equality of outcome in every aspect of corporate life, also tend to advocate for diversity in every aspect of corporate life. They don’t even see the fundamentally irreconcilable assumptions behind this ‘equality and diversity’ dogma. American businesses also have to face the fact that the demographic differences that make diversity useful will not lead to equality of outcome in every hire or promotion. Equality or diversity: choose one.
Debra W. Soh, Toronto based science writer who has a Ph.D. in sexual neuroscience from the University of York.
As a woman who’s worked in academia and within STEM, I didn’t find the memo offensive or sexist in the least. I found it to be a well thought out document, asking for greater tolerance for differences in opinion, and treating people as individuals instead of based on group membership.
Within the field of neuroscience, sex differences between women and men—when it comes to brain structure and function and associated differences in personality and occupational preferences—are understood to be true, because the evidence for them (thousands of studies) is strong. This is not information that’s considered controversial or up for debate; if you tried to argue otherwise, or for purely social influences, you’d be laughed at.
More from Debra Soh writing about the Google memo in the Globe and Mail:
Research has shown that cultures with greater gender equity have larger sex differences when it comes to job preferences, because in these societies, people are free to choose their occupations based on what they enjoy.
As the memo suggests, seeking to fulfill a 50-per-cent quota of women in STEM is unrealistic. As gender equity continues to improve in developing societies, we should expect to see this gender gap widen.
Lee Jussim, professor of social psychology at Rutgers University:
The author of the Google essay on issues related to diversity gets nearly all of the science and its implications exactly right. Its main points are that:
- Neither the left nor the right gets diversity completely right;
- The social science evidence on implicit and explicit bias has been wildly oversold and is far weaker than most people seem to realize;
- Google has, perhaps unintentionally, created an authoritarian atmosphere that has stifled discussion of these issues by stigmatizing anyone who disagrees as a bigot and instituted authoritarian policies of reverse discrimination;
- The policies and atmosphere systematically ignore biological, cognitive, educational, and social science research on the nature and sources of individual and group differences.
I cannot speak to the atmosphere at Google, but:
- Given that the author gets everything else right, I am pretty confident he is right about that too;
- It is a painfully familiar atmosphere, one that is a lot like academia.
Bonus Chart (below). In regard to gender differences in mathematical aptitude, at least the aptitude that can accurately be measured by standardized tests, the chart below presents compelling evidence that there are gender differences in math aptitude, especially for aptitude on the higher end of the talent distribution. For perfect (and near perfect scores) on the math SAT test, high school boys outnumber high school girls by a ratio of 2-to-1. And that’s despite the fact that high school girls would seem to be better prepared than boys to do well on the math SAT test: girls take more high school math classes than boys, they take more AP and honors math classes than boys, they have higher GPAs than boys overall, and are more likely than boys to graduate in the top 10% of their high school classes.
Bonus Video (below) features my AEI colleague Christina Sommers (The Factual Feminist) about why men greatly outnumber women in the STEM fields: Science, technology, engineering, and math. Everywhere we hear about massive gender bias against women in these fields, but what if it’s just not true? The Factual Feminist explains other reasons for the discrepancy that you may not have heard in the video below titled “The Real Reason There Aren’t More Female Scientists.”
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The table above shows the number of bachelor’s degrees by field and gender for the College Class of 2015, ranked by the female share of each field (based on Department of Education data here). A few observations:
1. Overall, women earned 56.44% of all bachelor’s degrees in 2015, which means there were 130 women graduating from college that year for every 100 men. Women now have an uninterrupted 35-year record of earning the majority of bachelor’s degrees in the US that started back in 1982.
2. Women earned about 59% of degrees in biology, which is one of the fields in the STEM area that we hear so much about in terms of female under-representation. And actually, if you include health professions as a STEM field, women earn more STEM degrees than men. Or if you count biology, mathematics, and physical sciences, women earn a majority (53%) of those degrees. It’s really only when you include engineering and computer science that men have an overall majority of STEM degrees.
3. Now that Google is in the media spotlight for one of its engineer’s diversity memo, it’s interesting to note that the female share of computer science degrees (18%) is about the same as the female share of Google’s tech jobs (20%). And the female share of Google’s not-tech jobs (48%) is about the same as the female share of business bachelor’s degrees (47.4%), assuming that a business degree might be the most common college degree required for those positions.
4. Note the wide variation in degrees by gender shares. Women earn the large majority of degrees in health professions, psychology, education, English and communication, and men earn the large majority of degrees in engineering, computer science, and theology.
Q: Do these outcomes need to be socially engineered to achieve greater gender balances or do they represent natural outcomes that reflect natural differences in academic interests by gender?
Update: Or is that a false binary, as Steve Horwitz suggests in the comments?