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Northrim Bank launched the Alaskanomics blog to provide news, analysis and commentary on Alaska’s economy. With contributions from economists, business leaders, policy makers and everyday Alaskans, Alaskanomics aims to engage readers in an ongoing conversation about our economy, now and in the future.

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Friday, December 24, 2010

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Kana

Important observations, Andrew. I think the point is most snlciuctcy encapsulated in one sentence you wrote above, towit If you want emissions-free innovations, price emissions. I would amplify this by suggesting that if you wish to achieve a specific outcome, it is unrealistic (and frankly wishful thinking) to rely on an inadequately structured market to do your work for you. Reliance of this type suggests either a high degree of complacency or a fundamental failure to apprehend the complexity of society or both. In the end, markets are great tools, but they still need to be shaped by policy and that can be hard work.More generally, while it may be possible to set forth a few plausible statements of principle about the way markets function (eg scarcity leads to increased prices in light of continuing high demand and increased prices lead to a search for substitutes ), the outcomes arising out of the interactions between resources, technological innovation and markets over time are fundamentally unpredictable. Thus, if societies (or more precisely groups within societies, whether local, regional or global) wish to at least shape the field of possible outcomes in a context where markets are some of the key tools available to us, the proper conceptual space in which to operate is that in which social norms are formed and, in the case of the modern state, regulatory powers are exercised. (Obviously, I don't accept the fundamentalist idea that free and open markets are themselves desirable outcomes markets are tools; important tools, but tools nevertheless.)Given this, regarding carbon emissions, the best way to proceed may be by getting adequate societal agreement to put a price on all carbon emissions in order to better shape the market for energy (as your remark quoted above suggests). Then, as non-carbon substitutes come to the fore in light of a market that discriminates against high-carbon outcomes, it will be necessary to be ever-vigilant and to deal with the deleterious consequences of some or all of those substitutes too; all in a never-ending process of adjustment.Alternatively, another possibility would be to coax into existence social norms that stigmatize excessive carbon emissions. Thus, even where the price of carbon remains low', it may well be possible to stigmatize its use through non-market social mechanisms. Such a process might mirror the growth of the organic food industry in North America and Europe which has operated through a scheme of moral choices, combined with follow-through by markets that developed in order to cater to those choices (ever more efficiently), providing options that fit within the zone of acceptable moral bounds.Returning to your original thesis, then, because of the complexity of social and economic realities, without a much more detailed picture of the world over time (which we will never have), I agree that it is impossible to state what impact specific prices of carbon will have on the anthropogenic emissions of CO2 into the atmosphere (I'm not sure that you would state your thesis in this manner, so I may be taking some liberties). We do know however that, if we can achieve a consensus to limit those emissions by such means as are available, and are willing to make the efforts required to do so, the outcome that matters CO2 levels in the atmosphere can be influenced profoundly over time regardless of the price of carbon.

online flash game

As we watch, the Canadians are steaming ahead with their MacKenzie Delta pipeline, and as we all know, if they build that line, the only gas pipeline the lease-holders will need will be a very short tie-in pipeline over the top between the North Slope and the Mac Delta.

Nobody here is fooled. Why are you?

Many of the things you say are pure hand waving----Shale gas MAY not be as big as people have said? Well, my taxes MAY not rise, either.

The American market is no longer the largest energy market. As of 2010, the Chinese took that honor. And they have reasons they dont want to be dependent for energy on the Russians, plus the fact that we are already in a dangerous trade deficit with China. From both aspects, LNG makes sense.

Tell us all exactly why anyone would spend $40 billion on a pipeline to reach a gas market that is flooded with gas and is going to stay flooded for decades? You forgot to note that in addition to the Shale Gas weve got conventional gas in the Willeston and Powder River Basins sufficient to light up America for the next 200 years.

On top of that, we have gas hydrates in the Arctic Ocean Basin (a mile deep all over the bottom of the Arctic Ocean) that contain 15 gigatons of methane that can be harvested using conventional drilling methods. How STUPID do you think we are?

Tell us why GTL imported to the West Coast wouldnt work? Sounds like what we need is liquid fuel (70% of what we import goes into automotive fuel)not gas, so why arent you hot shots converting all that methane to GTL? No biohazards, no sludge build up in motors, far cleaner burning that conventional gasoline, easy to add another nozzle to the existing gas pumps and introduce it just like we introduced unleaded gas thirty years ago.

Tell us how you are going to provide security for a 1700 mile pipeline running through two countries?

Nothing worthwhile got answered on Saturday and I dont see any posting on your website (as promised) to answer all the questions (mine included)that were submitted prior to the event?

This is the single most important development initiative Alaska can make. It is crucial for our economy and it cant just wait, wait, wait.

The biggest question was asked by my husband *who is still waiting for a reply)----what is going to keep Alaska afloat, if the oil dries up and the gas pipeline isnt built yet?

I think we all know the answer, but maybe it is something that you and the other civic leaders should consider more soberly and with a greater sense of urgency.

Without enough oil available on the Slope (ANWR, NP-168, etc) to justify those billions of dollars of investment in TAPS rebuilding and repair you mention, the oil companies are NOT going to make that investment. Right now, they arent shoving development dollars our way for the simple reason that nobody but the feckless State of Alaska expects TAPS to be functioning ten years from now.

So you are dancing around and acknowledging the hard facts, but not AS hard facts.

Larry, these ARE hard, deadly, nasty, damning facts. So unless you are suggesting that Alaska pay to rebuild TAPS, you better clue the Governor and the other good people who are supposedly working so hard on gas pipeline that they need to stop talking and start walking.

+1

Anna von Reitz

As we watch, the Canadians are steaming ahead with their MacKenzie Delta pipeline, and as we all know, if they build that line, the only gas pipeline the lease-holders will need will be a very short tie-in pipeline "over the top" between the North Slope and the Mac Delta.

Nobody here is fooled. Why are you?

Many of the things you say are pure hand waving----Shale gas MAY not be as big as people have said? Well, my taxes MAY not rise, either.

The American market is no longer the largest energy market. As of 2010, the Chinese took that honor. And they have reasons they don't want to be dependent for energy on the Russians, plus the fact that we are already in a dangerous trade deficit with China. From both aspects, LNG makes sense.

Tell us all exactly why anyone would spend $40 billion on a pipeline to reach a gas market that is flooded with gas and is going to stay flooded for decades? You forgot to note that in addition to the Shale Gas we've got conventional gas in the Willeston and Powder River Basins sufficient to light up America for the next 200 years.

On top of that, we have gas hydrates in the Arctic Ocean Basin (a mile deep all over the bottom of the Arctic Ocean) that contain 15 gigatons of methane that can be harvested using conventional drilling methods. How STUPID do you think we are?

Tell us why GTL imported to the West Coast wouldn't work? Sounds like what we need is liquid fuel (70% of what we import goes into automotive fuel)not gas, so why aren't you hot shots converting all that methane to GTL? No biohazards, no sludge build up in motors, far cleaner burning that conventional gasoline, easy to add another nozzle to the existing gas pumps and introduce it just like we introduced unleaded gas thirty years ago.

Tell us how you are going to provide security for a 1700 mile pipeline running through two countries?

Nothing worthwhile got answered on Saturday and I don't see any posting on your website (as promised) to answer all the questions (mine included)that were submitted prior to the event?

This is the single most important development initiative Alaska can make. It is crucial for our economy and it can't just wait, wait, wait.

The biggest question was asked by my husband *who is still waiting for a reply)----what is going to keep Alaska afloat, if the oil dries up and the gas pipeline isn't built yet?

I think we all know the answer, but maybe it is something that you and the other civic leaders should consider more soberly and with a greater sense of urgency.

Without enough oil available on the Slope (ANWR, NP-168, etc) to justify those billions of dollars of investment in TAPS rebuilding and repair you mention, the oil companies are NOT going to make that investment. Right now, they aren't shoving development dollars our way for the simple reason that nobody but the feckless State of Alaska expects TAPS to be functioning ten years from now.

So you are dancing around and acknowledging the hard facts, but not AS hard facts.

Larry, these ARE hard, deadly, nasty, damning facts. So unless you are suggesting that Alaska pay to rebuild TAPS, you better clue the Governor and the other good people who are supposedly working so hard on gas pipeline that they need to stop talking and start walking.

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