I was going to tell you about CHAMP this morning, and the implications of one of the more intriguing horrors to pop out of the old National Security apparatus, but there are a couple topics we really need to discuss at the end of this astonishing week. It is morning in America again.
Everything is going to be OK. Really.
Some of my pals are in the dumps. Others are ecstatic. I will take comfort in some things while others continue to fill me with dread. Like how on earth we are going to pay for all this. At the moment, we are borrowing nearly half of the outlays from the Federal Treasury. That can’t go on, but apparently it will.
That is why my pal Boats buoyed my spirits yesterday, and maybe it will for you, too. His news comes with challenges, to be sure, but it is the good kind.
Boats is a refugee from the Homeland Security State. As a retired Master Chief, he brought an enormous body of maritime experience to the Department of Homeland Security. Regrettably, that proved to be a liability to the policymakers at the Department, since he kept confusing them with facts, and in the end he and his bride fled back to his beloved Louisiana.
He is an indefatigable Bo’sun, though and he had to work. Over the summer he launched an ambitious attempt to join the fast-paced world of opinion blogging. This rarified pastime is practiced at last count by everyone in America except that irritating ex-brother in law of mine, and I understand he is thinking about it, too.
Any way, opinions are like assholes, and everyone has one. There is a critical difference with Boats, though, since he actually knows what he is talking about. That is what got him eased out of Government, but there is a distinct advantage to it over in the private sector.
Boats has adopted the famed Japanese icon of the psyche, Namazu the Giant Catfish whose trembling causes the world to quake in response. The Giant Catfish is a useful construct, and Boats was off on a tear. His whole argument is contained at the Admiralty Books website in a thing called “Namazu Fully Loaded: The Future of America.” I highly recommend it for a read, since the news electrified me.
http://americanadmiraltybooks.blogspot.com/2012_11_01_archive.html
Let me summarize a very witty and wise Cajun approach to what is coming. It is in two parts: the first is an explosion in gas and oil production on private land in the Continental United States, and the three-dimensional printer that will change manufacturing forever. Here is how Namazu’s wild ride commences:
“CHA CHING! BIG RECOVERY COMING NO MATTER WHO IS IN THE WHITE HOUSE!”
“There is a massive and rapid economic recovery coming to be followed by a relatively prolonged period of rising American Prosperity. This recovery/ restoration will be fully manifested within 42 months, possibly as early as 36 months and the first signs that the national media will be able to read are just around the corner.”
Now, come on, what is not to like about that? I will grant you the EPA is probably not going to be nuts about it, but absent a full-out regulatory assault like they have unleashed against the coal industry, it is going to happen whether that agency likes it or not.
I am a sucker for this stuff- I was chatting with a nice Nigerian man who swore he had several million dollars he needed to get out of the country, and I could have it if I just gave him my personal information and bank account number.
But look at this objectively if you have a minute. We are on the brink of actually being able to pay for health care and enhanced entitlements. No kidding.
Boats knows his oil and gas. He has been dealing with offshore drilling all of his professional life. Here is what he says is just around the corner:
“China’s rise is cruising for a bruising. The U.S. is poised to once again to emerge as the World’s only full service super power.”
I think that is good, even if I would have considered it unlikely earlier this week. “Two things are about to curb China’s growth,” he writes, “their dependency on import hydrocarbon energy, and new technological developments that will render the type of manufacturing that grew their economy, obsolete and not cost effective.”
I needed a dose of optimism this week as I approach my dotage, so I was naturally interested in how he came to his conclusions. Boats masks his pronouncements in the guise of the Giant Catfish, and he channels Namazu the Earth Shaker unchained.
The premise is something you already know. Americans have tapped into natural gas in a big way lately. Where the nation was not long ago the major importer of liquefied natural gas, we are now more than self-sufficient and starting to export. The price of natural gas is dropping. “The U.S. is trying to use as much as it can rapidly converting electricity production over from coal to natural gas. People are converting from electricity to natural gas for heating and cooking and bypassing electricity no matter how it is generated.”
The desire to export natural gas by the American producers is nothing short of urgent. The price for natural gas is too low in America due to the glut, but there is a demand for it globally. But America has hardly begun to tap it’s potential as a net exporter, just when the Chinese need it. The biggest obstruction to natural gas export is the fact that all but one of our LNG marine terminals were developed as import terminals.
Namazu makes the case that we just were not thinking things through. The facilities can be easily be back-engineered to become export hubs, though of course that will require the Government to issue permits for conversion. Here is why that is going to happen: The holders of these permits are going to be rich, and that is going to offer the opportunity for the System to cut off a fat slice. It is the Chicago way, and I think the logic is inescapable.
When the permits are issued and gravy spread around, the United States will jump practically over night to the number one exporter of liquefied natural gas to the world.
Coupled with the astonishing development that excess refining capabilities have already made us a net exporter of refined petroleum product. Namazu predicts that that “Not only will the United States be self sufficient in oil, if America wanted to export crude stock , soon U.S. crude stock available for export will exceed Saudi Arabia.”
The Cat Fish thinks that both candidates knew this, going into the endless election. I don’t know about that, but someone who understands what is going on underground must have laid the cards on the table.
(This is an LNG tanker. There is going to be a need for many of these and other tankers as the United States comes back on line as the world’s major petrochemical and natural gas producer).
Naturally, the news about new gas production in the Gulf is tinged with the recollection of the awful spill from the Deepwater Horizon well in 2010. The submarine finds by the oil companies- including villain BP- have been making muted headlines ever since, but the real news is that the same formations identified underwater are also onshore, and in the hands of private industry.
Namazu points out that one of the new geologic formations that technology has made possible to exploit in Texas has more reserves than all of Saudi Arabia. So far, we know of about three more such formations in the United States, but like the guy on television says, wait, there’s more!
There is a belt of oil reserves in the SE United States that arcs from Alabama through parts of Mississippi and into parts of what the Cajuns call their “Florida Parishes.” Proven reserves in this formation alone dwarf those of Saudi Arabia.
There is more to the story, of course. Speculators have known about this for years, but the product locked in the formation is laced with hydrogen sulfide, complicating recovery. A sudden spike in exploration activity causes Namazu to speculate that insiders are aware of new technology that is going to make these reserves safe and economical to produce.
I know a lot of folks are going to squirm about the news of what is happening. There has to be an impact on whatever that climate thing is that is going on.
Look for a battle royal on that one. Namazu knows exactly what is going on, and the show-down between industry and government is going to be spectacular. Suddenly, it appears there is no end to U.S. crude oil reserves.
The old Catfish knows human nature, though. You will not have heard much about all this, since the political process of obtaining the necessary permits will set off a political feeding frenzy from the Red-State county supervisors up through the halls of Congress to the White House.
This is going to be entertaining, and the economy is going to roar out of recession.
The returned Obama Administration is being poked to clamp down on the boom, slowing it with the same permit games that shut down the northern path of the Keystone Pipeline. But in the end, this cannot be stopped and her’s why: the jobs that will be created by the private sector will be largely high wage blue collar related to oil drilling, refining, and transport.
Namazu estimates that an instrument technician in an oil refinery requires about six months of vocational technical training and starts near $60,000 a year in compensation. It is exactly what both candidates were promising, and it is going to be too tempting to pass up.
Stand by for good times to come back. It is going to happen regardless of what the government does to try to slow it down.
The deal with 3-D printing is the other half of the Namazu argument. I will get to the impact of that tomorrow. This is another of those disruptive technologies that has been around for a while, but is on the cusp of changing the world as we knew it. Who would have figured that it was Morning in America again?
Trust me, I know. I heard it from a Catfish.
Copyright 2012 Vic Socotra
www.vicsocotra.com