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Started Hosted Blog

Started Hosted Blog

Recently my blog that I hosted myself at k-lenz.name/LB for close to 20 years went down with a database error.

I considered investing some time to find and fix the error. Then I decided I would rather use that time to start over with this new hosted blog.

Leave the technical side to people who know what they are doing and pay a small amount of money.

I will probably figure out how to point the old address to this new one. I will also need to figure out how to deal with all the old content.

Fast Lobbyist Reaction

After the recent insurrection failed to overturn the election results, there is a long list of companies that have pledged not to give money to those who voted against confirmation of the election results.

Since many politicians rely on corporate money to finance their campaigns, this will have some influence going forward.

And it is a remarkable change that came about very fast.

In the same way, I can see a future where fossil fuel companies redirect their money to putting hard limits on CO2 emissions.

I have explained before why they might do that. They do have a financial incentive. Having a hard limit on production raises prices, as has been clear since the Texas Railroad Commission first imposed quotas on oil production many decades before.

But they also just might do it because, as they know, it is the right thing to do, even if it cost them money (it does not). These companies that place a high value on democracy and refuse to finance enemies of the American Constitution are not motivated by money. They are motivated by doing the right thing.

It is way past obvious that the right thing is a hard limit on fossil fuel production. The whole fossil fuel industry should start joining forces with Bill McKibben and direct their lobbying efforts against burning the planet.

The example of this reaction to the insurrection shows that such changes can come very fast.

FinCEN Rule Proposal

FinCEN just published a proposal for a new rule.

It requires regulated exchanges to keep records on who owns the address some bitcoin is first moved to from the exchange for transactions over $10,000 in value.

The EU has floated similar ideas in Recital 9 of the 2018 money laundering Directive. It reads:

“The anonymity of virtual currencies allows their potential misuse for criminal purposes. The inclusion of providers engaged in exchange services between virtual currencies and fiat currencies and custodian wallet providers will not entirely address the issue of anonymity attached to virtual currency transactions, as a large part of the virtual currency environment will remain anonymous because users can also transact without such providers. To combat the risks related to the anonymity, national Financial Intelligence Units (FIUs) should be able to obtain information allowing them to associate virtual currency addresses to the identity of the owner of virtual currency. In addition, the possibility to allow users to self-declare to designated authorities on a voluntary basis should be further assessed.”

If this new FinCEN proposal leads to exchanges requiring information on who owns a withdrawal address, this may lead to an automatic voluntary self-declaration. All users would need to do is nothing. If they withdraw their bitcoins to an address they control themselves, the information would already be accessible to law enforcement.

As long as they don’t move the bitcoins to another address. Which of course they could do without any reporting requirement under that FinCEN proposal. And then move it again a couple of times, with no third party knowing if the addresses in question are controlled by the user or someone else.

If you don’t mind giving law enforcement access to that information, doing nothing would make your bitcoin holdings on that address “white bitcoins” (as defined in an earlier post in 2013). This may become useful for the holder down the road.

Imagine for example the highly theoretical case that some user sells the bitcoins they bought in 2021 a couple of years later at a measly price of only $77,000 (instead of waiting for Bitcoin to flip gold). Imagine further that they actually declare the income from the price increase and pay relevant taxes.

Such a user would be able to point to the official record to show exactly at what price they bought in.

And anyway, if you are just buying and hodling, there is not much downside to having the withdrawal address accessible to law enforcement. If you are buying from a regulated exchange, the buying transaction is in the record anyway and can be traced to the buyer.

XLink Desertec Project

As I learn from this Greentechmedia article by Jason Deign, there is a new startup in the United Kingdom with big plans.

Their big plan is to connect North Africa directly with the UK. They want to build a long subsea cable hugging the coasts of Portugal, Spain, and France, at a cost of $21.6 billion. One advantage they see is that it is easier to get the necessary permits with only these countries involved.

This is similar to the Asia Super Grid idea Masayoshi Son proposed, a long power line from the Mongolian desert right up to Japan.

The nice thing about this kind of project is that you only need to build that power line once and then can use it for centuries. The Suez canal was a very cheap project if you figure in that it is still in use and divide the cost by the number of years it is operating.

Book Review: Kim Stanley Robinson, The Ministry of the Future

This book was released in October 2020. I liked many things about it and disliked some others.

Let’s get rid of the negative points first.

This is supposed to be fiction, but the story is incoherent. Readers are treated to lots of completely different sets of characters and independent short stories. The whole thing feels like a collection of short stories.

That makes the book somewhat difficult to read.

And one of the good ideas in the book, the “carboncoin” concept, greatly suffers from a lack of understanding of Bitcoin, which is obvious alone from the fact that in his world Bitcoin goes to zero. But there are also scenes where one of the characters tries to pitch the “carboncoin” idea to bankers.

I am trying for a moment to imagine Satoshi Nakamoto convening a meeting of central bank managers and trying to convince them of the merits of Bitcoin. I recall that is not exactly what happened to assure the success of the idea.

But the basic idea of using a new cryptocurrency to solve the climate emergency does have some appeal.

The interesting point about Robinson’s carboncoin is that it rewards taking CO2 out of the atmosphere, as opposed to rewarding only letting carbon stay in the ground. That may be a possibility.

Back to the real world and back to the present world for a moment. Bitcoin already is helping massively with the climate emergency. That’s because it is a virtual planetary power line that allows you to shift power demand to any location. Or in simpler terms, it allows you to sell electricity wherever you produce it without having to wait for a power line to be built.

That is a big deal. It takes time to roll out the power lines to the good offshore wind locations. It takes time to roll out the power lines to the good solar desert locations. Of course, in the next couple of centuries these power lines can be built. But since time is short right now, being able to build the renewable project first and worry about the power lines later is a big deal.

Of course, Bitcoin is also an excellent model for what should happen for fossil fuel supply. It should go down by half every four years, for a radical and predictable production rate reduction. Once that happens, it does not matter if the gap is closed by renewable or energy savings. The market will just take care of how to deal with less fossil fuel in the mix.

Anyway, I like the fact that Robinson gives some space in his novel to a “carboncoin” idea, even if I am not convinced by the details he proposes.

The good parts are the short stories about various catastrophic developments. There is a story about what happens in a serious heat wave (hint: lots of dead people). There is a story about Los Angeles getting drowned by a vertical river rainfall.

And there are some interesting ideas of how the future could be better than the present. One is the idea of a world citizenship as an answer to the refugee problem. While it is fair to say that for example in the United States there is some degree of racist discrimination left, there is much more discrimination on a world wide scale between a citizen of the United States and one of Syria. The former have drawn the lucky tickets in the lottery.

Robinson also describes air traffic migrating to airships, progress in giving more space to animals, drone terror attacks no one can defend against. There are many interesting ideas about the future in this book.

And I definitely agree with the general idea that humanity has a decent chance to solve the climate emergency. In his future, CO2 levels in the atmosphere are going down again. While I don’t know if the future will look exactly like the story in this book, I am optimistic.

Trump Running on Climate

Emily Atkin notes at her heated.world newsletter that Trump is trying to point attention to Biden’s statement in the last debate about the oil industry. Asked if he would close down the oil industry, he said yes. Trump called that a “big statement” and hopes that Texas and Pennsylvania, which have significant oil industry, take note.

Trump of course has no plan to deal with the climate emergency. So I think it is a good thing that he calls attention to this fact in the last week of the campaign.

But he does think that his position is loyal to the industry. In that most people would agree.

Except me.

The oil industry would see a much needed improvement in their bottom line from a Biden climate plan. The transition will happen anyway. Better to get higher prices from less production while we still use some oil, pouring fuel on the fire.

But anyway, I think it is remarkable that Trump would call attention to this particular point. I don’t recall any American election putting the climate emergency on center stage like that.

Earshot.earth

So I just registered the above domain on an impulse today.

The immediate reason for that was the new “Earthshot” initiative, where some famous people came up with 50 million English pounds to be awarded to good ideas.

Well, I have an idea. I have no idea if it is any good, but it is at least worth writing it down here.

I just read about Michael Mann on Twitter. He gave an interview in which he talked about what effect reducing emissions to zero would have on the climate. He explained that while previously it was the understanding that reducing to zero would not have much effect for decades, now experts seem to think that it would reduce temperatures much faster, like in a couple of years.

I did not know about that. And I am still not sure about that point. In my simple non-expert view, the only thing that matters is the CO2 concentration. If you stop emitting and keep taking CO2 out of the atmosphere (more than half of the emissions go into sinks right now), obviously that concentration should go down and go down immediately.

And to achieve stability, all you need is to reduce emissions to whatever amount is taken out by sinks.

I don’t know if that is correct, but I am pretty sure Mann knows more about these questions than me, since he has devoted his whole life to studying these issues.

In contrast, I am not sure if he knows how the climate emergency can be solved in a week or two, while I do know about that and have published that solution over and over here. Phaseout profit. Turn the fossil fuel industry around, from villains to heroes. Make them realize that they will make more money with less production. Make them buy the exact opposite policy from the Republican party, while keeping buying the exact same politicians.

I would predict that they don’t find it difficult to turn around their views to the exact opposite, if the payments keep on flowing.

I think he might be interested in a solution to this little problem. Unfortunately, I have no way to get my idea across to him. He is not in earshot of whatever I am saying on this blog.

Of course anybody, including Michael Mann, can read my blog. But that is not a sufficient condition for that to actually happen.

So what is that “earshot” idea about?

It is about someone like me with a crazy idea that may just work reaching someone like Mann, who is famous and could make it actually happen.

How would it work?

Let’s do a contrast to existing social media. In Twitter or some such environment, all I have to do is to get more followers than Trump and I could be pretty sure that I could reach Michael Mann. Twitter gives people who are already famous an easy way to reach other famous people.

The problem with that is that I am considerably less famous than Trump. Or Michael Mann.

So the “earshot” environment would try to get one message through to one person. I would not need to gain millions of followers before I can get heard by that person.

How could that possibly work? I have no idea.

I just have the problem. How can I get a message about a crazy idea read by one specific person I have in mind? How can I get that person into earshot of my opinion?

How would you do it?

New Failure in Germany: Renewable Energy Law Reform Draft

The German government just approved a draft on reforming the renewable energy law. In the tradition of recent failures leading to much less deployment, it is another disappointment for the climate.

Having introduced auctions as a policy model and having seen that policy change reduce deployment, the draft doubles down on the failed auction concept and wants to introduce it now for large rooftop installations too.

Again, the reason behind supporting this move is to save on costs. Minister Altmaier said that there is a large boom expected in this market segment making cost reductions important, see this report at PV-magazine.

The plan seems to be to have auctions for 250 MW in both 2021 and 2022.

If so, there will be a ceiling on new projects in this segment. That is exactly what no one needs. If the free market wants more large scale rooftop solar, why exactly does Altmaier want to prevent this? If anything, auctions make solar projects more expensive, since there is more risk, more hoops to jump through, more bureaucracy.

Even if it were true that prices might go down as a consequence of auctions as opposed to as a consequence of massive deployment increases, this is not the time to worry about the price of solar. If you see your house on fire, do you worry about how much the water you want to pump on that house will cost you?

Some questions for Oil Change International

Oil Change International has just published a report titled “Big Oil Reality Check”. It analyzes the commitments of leading oil and gas companies to do something about the climate emergency.

If you guess that they find those commitments not sufficient, you would be right. And I tend to agree. If you look at the various tables in the report, even BP’s efforts are still not enough. While BP is at the top of the valuation, their efforts are still rightly categorized as insufficient.

I have a couple of questions for the authors of this study.

One is if they intend these companies to beef up their commitments each on their own, or if they want an effort that is coordinated. I would suspect the latter from their calling for government action to make sure that production declines, but I did not find the point discussed in the report.

This is important since if you think about the adversarial interests at stake, obviously all these companies would agree to have all the other companies transit to aggressive reduction models, leaving more of the production pie to themselves. The problem is not to reduce at one individual company, but to decide who gets to produce how much on the way down to zero. How to allocate the quotas.

For OPEC, everyone can agree that other countries should reduce their production. The problem is to agree on quota allocation.

The second question would be what in the opinion of the Climate Change International authors should motivate these companies to reduce their production.

My answer to that is that reduced production means higher prices. Higher prices mean profit for the industry. What is the answer for Oil Change International? Fear of government sanctions? If so, what would motivate an oil company to refrain from lobbying against having “governments step in to manage the decline”.

Of course if your business model and your economic survival depends on keeping meaningful government action from happening, you will spend (lots of) money to keep said action away. If in contrast you understand that having a managed decline in production will lead to higher prices and higher profits, you might still stay in the lobbying business. But you would lobby for more managed production decline, not less.

That in turn would probably mean that many politicians influenced by lobby money suddenly discover how vital managed reduction is for the future of the younger generation.

So again, there are two questions. What should motivate oil companies to reduce production. And should they do so on their own or in a coordinated move.

Altmaier Proposal

German Economy Minister Peter Altmaier just published a short paper on climate change policy. His portfolio includes energy, so he does have some influence in these matters.

I used to blog about him when he was Environment Minister in 2012 and estimated the cost of the feed-in tariff system as one trillion Euro until 2040 to justify a proposal for stepping on the brakes. So for the old times, here are some observations on that new paper.

I agree completely with the basic idea that climate hawks and industry need to work together. My most basic idea on this blog (phaseout profit theory) asks for exactly that. Work with the fossil fuel industry. Make that happen by getting to higher prices with less production.

I also think the idea of a “Clean Products Made in Germany” label might have some merit. I recall that the “Made in Germany” label was intended to reduce sales of the products it was attached too, making sure that consumers know they are buying from another country.

But that proposed label seems a bit long and complicated. And why should consumers care about the country? I for one care about CO2 emissions, not where some piece of green steel was made. Why not just have a world wide label like “Green”, with variants like “Green Steel”? Altmaier later recommends more world wide coordination, so that would fit better.

The idea of this proposal is to get a general consensus on climate before the next election season starts next year. I am not convinced the Green party (now the major rival of the CDU, which Altmaier belongs to) are interested in having their main competitive advantage removed by this sort of thing.

I am also skeptical of the motivation of getting long-term stability in climate policy over such a mechanism.

One reason is that ambitions will have go go up, as they are doing right now with the EU adjusting its 2030 goal upwards. More and more people see the world burning and will ask for more radical measures. Long-term stability would work against more ambitious goals and for more business as usual.

And the mechanism for a democratic society to decide about these questions is voting. If the CDU loses voters to the Green party over their climate record (as well they should), the new government should not be shackled in their policy options by any consensus like the one Altmaier wants.

I think the way to get long-term stability would be to have a long-term predictable mining schedule for fossil fuels modeled on the Bitcoin mining schedule. Once that is in place, everything else just follows automatically. Don’t burn more fossil fuel than is compatible with climate goals. Don’t mine more fossil fuel than you can burn.

I am not sure how to get to a world with such a mining schedule. The German government may have a role to play there. But just like the Bitcoin model, it would need to be based on a global consensus.

Neom Helios Desert Energy Project

Desertec Industrial Initiative recently held a web seminar featuring Paul Van Son and Driss Beraho.

The first short presentation by Son was about what the Desertec Industrial Initiative is up to lately. We learn that the vision now exceeds green electrons and has expanded to include green molecules. That is hydrogen made from renewable energy projects. I recall having an interest in hydrogen from the Mongolian Gobi desert 10 years ago. So I was excited to hear about these developments, especially the fact that the European Green Deal program will try to help getting this started too.

The other presentation gave some basic facts about the Neom Helios project.

I was not familiar with Neom. It is the name of a future city in Saudi Arabia where the government intends to invest $500 billion in an area of 26,500 km2 in the North West corner of Saudi Arabia, close to the Red Sea. The Neo part is easily understood as “new”, while M is short for “future” in the Arabian language.

The Neom Helios project will be the largest green ammonia project in the world. The presentation mentioned a scale of gigawatt renewable energy generation. Investments should be around $5 billion to produce renewable ammonia. Ammonia has been chosen over hydrogen because there is more experience with shipping it.

The presentation explains that Saudi Arabia has experience with energy exports and is located conveniently on established shipping routes to key markets. Saudi Arabia and the Neom area in particular has excellent renewable resources. Prices for renewable energy are way down now making it possible that such a project may be online in 2025.

The key market will be the mobility market, saving CO2 emissions in the process.

The water needed for the electrolysis will be provided by desalination. At scale this kind of energy system will use less water than the existing system which needs water to cool power plants.

What can the EU do to make this kind of project a success?

One idea coming to mind is to have feed-in tariffs for green hydrogen. As long as this kind of energy is more expensive than oil, that might help. On the other hand with the prices for the original solar electricity being as low as they are now, maybe there is not so much need for that.

One already existing regulation is the fuel efficiency for cars in place. That is calculated by the average of all sales of a car maker. If you use hydrogen as a fuel, the cars burning that will enter the calculation reducing the average.

Another idea would be to restrict and reduce oil and gas imports to the EU by a long-term predictable schedule. If the EU reduces fossil fuel imports, green molecules will naturally fill the gap.