While much attention is paid to the US-led offensive in Helmand province in southern Afghanistan, the war remains very much alive, if forgotten, in northern Afghanistan. Yesterday, Taliban militants stormed a police station in Kunduz province, killing the district police chief.
A joint German-Afghan offensive aimed at securing Kunduz province ahead of the Afghan presidential elections was launched in July. Reportedly, the German-Afghan operation was designed to disperse IMU militants who fight both in Afghanistan and in neighboring Uzbekistan and Tajikistan. Since that operation’s end, militants have moved back into Kunduz province and Taliban activity has trended upwards in recent days. Though Kunduz is in the north of the country, it is still a majority Pashtun province and shares cultural and linguistic links with the Pashtun tribes that harry NATO forces in Helmand and Pakistani forces in Waziristan.
Thursday, August 13, 2009
Wednesday, August 12, 2009
The Party of Fear – Healthcare Edition
If you watched CNN this morning you saw, presumably, what I saw. You saw videotape of town halls devolving into shouting matches between people on both sides of the healthcare debate. You probably also saw the signs of protestors. For those in support of healthcare reform you saw signs saying “Obamacare saves $$$” or “Everyone deserves insurance.” I’m paraphrasing slightly, but you saw signs meant to positively advocate for healthcare reform. If you looked at the protestors against healthcare reform you saw signs with a picture of Hitler and the words “Yes we can” underneath it, invoking the catchphrase of Obama’s presidential campaign. You saw signs with the words “Death Panel” partially covered by the ubiquitous and universal sign for no. You saw signs designed to frighten, or assuming a greater nobility, signs expressing the fears of those that wielded them. The debate on healthcare has devolved to a state so devoid of intelligence it is comparable only to the period right after 9/11.
What’s everyone so angry about? Call me too Midwestern, but I was watching people shout at each other in town halls and carrying signs so acidic in their opposition that I couldn’t help but wonder why people are so angry. Rumors have been started by that every elusive “them” that a government-run healthcare option will lead to “death panels” where grandma or grandpa will be denied care because the cost of treating them is greater then their societal worth as determined by a panel-to-be-named-later, though clearly for many “death panel” is the leading contender for the name. It sounds so ridiculous to me that at first I dismissed it, but when it didn’t go away I tried to think backwards. How do we get from a government-run healthcare option to death panels?
When I thought it through, here is the domino effect I presume is the “logic” that led us to death panels: Basically, if a government-run healthcare option is passed, then employers will stop providing a private health insurance option to employees. Why should they if the government going to act as the safety net? And how can they compete against the competitiveness and efficiency of a government-run system? The employer abandonment of private health insurance will drive the health insurance into the ground so that eventually even the companies that didn’t drop their private option will have to because there will be no private option. Presto, change-o we have only a government option for health care. So why does grandma have to die? Well with the exploding cost burden on the system tough choices will have to be made. We’ll need a panel full of mustache twisting, number crunching bureaucrats that will size up grandma and decide if she’s fit to contribute to society or she should be allowed to die.
Now let’s set aside some of the problems of logic here and focus on a few key assumptions on the surface. First, there has been no healthcare reform. There is no government-run option available to people to buy into. Second, the Democratic leadership and President Obama have repeatedly said that the public option is not a sole-provider, Canadian-esque system. Third, no one has talked about a panel that would deny care to the infirmed because they were infirmed. Turning to the logic, we are making some mighty leaps here and presuming an extreme level of nefariousness from our government officials. I mean that members of Congress and the President would push for a system that they fully know and anticipate will require the government to make life and death decisions requires a level of government distrust that is beyond anything I felt during the darkest periods of the Bush administration. If the path I presented above is not within reason, what is?
Okay, so here comes the econ lesson. There are two main drivers to have a government-run healthcare option as part of healthcare reform. First, to serve as a safety net, expanding Medicaid so that people who are currently uninsured can receive preventative healthcare. The thought being if a cough can be suppressed with an antibiotic prescribed from a clinic it will be less expensive then letting that cough worsen, requiring a trip (either planned or unplanned) to the emergency room for more dramatic, invasive, and expensive care. Second, it is to make private insurers compete. I have written on this topic in the past and Paul Krugman of the New York Times writes on this all the time, but basically currently private health insurance providers operate without competition. They only compete to be the health insurance vendor for large organizations. As far as the consumer is concerned, especially if you have employer-based health insurance, you might get a lot of options in the amount of coverage you receive, but it’s all coming from the same company. It’s like going to Baskin Robbins. There are 50 flavors, but it’s all Baskin Robbin’s ice cream.
It is for these two reasons that a government-run option is essential. We need to expand the safety net and introduce competition into the marketplace. Expanding the safety net would seem a moral imperative, but the thought of competition in the marketplace is a major reason for many people government-run becomes death panel. Will some business, especially small businesses, drop private insurance for their employees? Absolutely. Is there a possibility that this government-run system will drive all the private insurers out of business? Yes, but it’s not a probability. And part of the reason it’s not a probability is because the government-run system, presumably, will not run as efficiently as a private insurance option. Opponents of healthcare reform can’t have it both ways. They can’t decry a bureaucrat will sit between you and healthcare (even though one already does) and that this government system will run so well it will destroy the private health insurance industry.
I titled this post The Party of Fear, because as the healthcare debate devolves, the Republican, conservative strategy for defeat reform has become clear. See, first they tried to remind you how bad government is, but that didn’t really take hold. So the tactic has changed. Now they want you to be scared to death of government. They put their arm around grandma and ask if you want her to be put in front of a death panel. Reform and change are things to be feared. The government is rife with evil, dark figures (allusion intended) set on running your life, removing your God-given free will, and, for kicks, killing your grandma. Once again the choice has been made to abandon intellectualism and instead embrace fear.
You know what I haven’t heard from the Republican party? A solution. So much energy has been used. So much money has been spent to tell you all the reasons the reform is bad and when mild, classic reasons didn’t work they turned up the volume. It is far easier to sit in a room and breakdown an idea. It’s far harder come up with an idea, incorporating all the different interests involved. Healthcare reform is THE domestic issue for this generation and most certainly the next.
And so I’ll make a final appeal to those Republicans willing to listen. Stop spreading fear. Come to the table with ideas and an open mind. There will be disagreements, but let them be intelligent disagreements. Something needs done and you can either be a part of the solution, or remain the party of fear. The American people are united in their desire for change, but remain unwedded to a mode. There is an opportunity.
What’s everyone so angry about? Call me too Midwestern, but I was watching people shout at each other in town halls and carrying signs so acidic in their opposition that I couldn’t help but wonder why people are so angry. Rumors have been started by that every elusive “them” that a government-run healthcare option will lead to “death panels” where grandma or grandpa will be denied care because the cost of treating them is greater then their societal worth as determined by a panel-to-be-named-later, though clearly for many “death panel” is the leading contender for the name. It sounds so ridiculous to me that at first I dismissed it, but when it didn’t go away I tried to think backwards. How do we get from a government-run healthcare option to death panels?
When I thought it through, here is the domino effect I presume is the “logic” that led us to death panels: Basically, if a government-run healthcare option is passed, then employers will stop providing a private health insurance option to employees. Why should they if the government going to act as the safety net? And how can they compete against the competitiveness and efficiency of a government-run system? The employer abandonment of private health insurance will drive the health insurance into the ground so that eventually even the companies that didn’t drop their private option will have to because there will be no private option. Presto, change-o we have only a government option for health care. So why does grandma have to die? Well with the exploding cost burden on the system tough choices will have to be made. We’ll need a panel full of mustache twisting, number crunching bureaucrats that will size up grandma and decide if she’s fit to contribute to society or she should be allowed to die.
Now let’s set aside some of the problems of logic here and focus on a few key assumptions on the surface. First, there has been no healthcare reform. There is no government-run option available to people to buy into. Second, the Democratic leadership and President Obama have repeatedly said that the public option is not a sole-provider, Canadian-esque system. Third, no one has talked about a panel that would deny care to the infirmed because they were infirmed. Turning to the logic, we are making some mighty leaps here and presuming an extreme level of nefariousness from our government officials. I mean that members of Congress and the President would push for a system that they fully know and anticipate will require the government to make life and death decisions requires a level of government distrust that is beyond anything I felt during the darkest periods of the Bush administration. If the path I presented above is not within reason, what is?
Okay, so here comes the econ lesson. There are two main drivers to have a government-run healthcare option as part of healthcare reform. First, to serve as a safety net, expanding Medicaid so that people who are currently uninsured can receive preventative healthcare. The thought being if a cough can be suppressed with an antibiotic prescribed from a clinic it will be less expensive then letting that cough worsen, requiring a trip (either planned or unplanned) to the emergency room for more dramatic, invasive, and expensive care. Second, it is to make private insurers compete. I have written on this topic in the past and Paul Krugman of the New York Times writes on this all the time, but basically currently private health insurance providers operate without competition. They only compete to be the health insurance vendor for large organizations. As far as the consumer is concerned, especially if you have employer-based health insurance, you might get a lot of options in the amount of coverage you receive, but it’s all coming from the same company. It’s like going to Baskin Robbins. There are 50 flavors, but it’s all Baskin Robbin’s ice cream.
It is for these two reasons that a government-run option is essential. We need to expand the safety net and introduce competition into the marketplace. Expanding the safety net would seem a moral imperative, but the thought of competition in the marketplace is a major reason for many people government-run becomes death panel. Will some business, especially small businesses, drop private insurance for their employees? Absolutely. Is there a possibility that this government-run system will drive all the private insurers out of business? Yes, but it’s not a probability. And part of the reason it’s not a probability is because the government-run system, presumably, will not run as efficiently as a private insurance option. Opponents of healthcare reform can’t have it both ways. They can’t decry a bureaucrat will sit between you and healthcare (even though one already does) and that this government system will run so well it will destroy the private health insurance industry.
I titled this post The Party of Fear, because as the healthcare debate devolves, the Republican, conservative strategy for defeat reform has become clear. See, first they tried to remind you how bad government is, but that didn’t really take hold. So the tactic has changed. Now they want you to be scared to death of government. They put their arm around grandma and ask if you want her to be put in front of a death panel. Reform and change are things to be feared. The government is rife with evil, dark figures (allusion intended) set on running your life, removing your God-given free will, and, for kicks, killing your grandma. Once again the choice has been made to abandon intellectualism and instead embrace fear.
You know what I haven’t heard from the Republican party? A solution. So much energy has been used. So much money has been spent to tell you all the reasons the reform is bad and when mild, classic reasons didn’t work they turned up the volume. It is far easier to sit in a room and breakdown an idea. It’s far harder come up with an idea, incorporating all the different interests involved. Healthcare reform is THE domestic issue for this generation and most certainly the next.
And so I’ll make a final appeal to those Republicans willing to listen. Stop spreading fear. Come to the table with ideas and an open mind. There will be disagreements, but let them be intelligent disagreements. Something needs done and you can either be a part of the solution, or remain the party of fear. The American people are united in their desire for change, but remain unwedded to a mode. There is an opportunity.
Market Limitations
Kai Ryssdal of NPR reported on the annual Aspen Ideas festival by re-broadcasting a speech delivered by Michael Sandel, professor of government at Harvard’s Kennedy School of Government. Professor Sandel’s speech discussed the limitations of markets and market logic. In particular, he discusses how applying free market logic to some policy problems results in perverse incentives. He also discusses how markets are unable to account for moral qualms with such matters as using market logic to regulate matters like asylum. It’s an interesting listen, check it out here.
Thursday, August 6, 2009
The Role of Eritrea
Secretary Clinton met this week with Sheikh Sharif Sheikh Ahmed, President of Somalia’s Transitional Federal Government. After meeting with Mr. Ahmed, Secretary Clinton offered the Transitional Federal Government assurances and rebuked Eritrea for supporting the Shabab Islamists battling the government currently. Secretary Clinton went so far as to warn Eritrea that the US would “take action” if it continued to support the Shabab.
Mr. Ahmed could be forgiven an ironic smile as Secretary Clinton spoke. Three years ago, as head of one of the factions of the Islamic Courts Union, Mr. Ahmed was receiving military aid from Eritrea as he fought first the then Transitional Federal Government and then Ethiopia. Now, Mr. Ahmed finds himself at the head of the Transitional Federal Government, backed by Ethiopia and facing former allies armed by Eritrea.
Secretary Clinton’s comments, and the US policy it represents, may be ill conceived. Eritrea should stop arming the Shabab. Unlike the Islamic Courts Union that preceded the Shabab, the Shabab do not appear to be a force able to unify and govern Somalia. The Shabab do not suffer any of the moderating influences that made the Islamic Courts Union palatable if not ideal. Still, the roles that Ethiopia and Eritrea play in the Horn of Africa are disconcerting. Ethiopia seeks regional hegemony; it would like to dominate Somalia and does not necessarily seek a stable, secure Somalia. Eritrea does not have a particular interest in an Islamists Somalia, but it does seek to confound Ethiopia in anyway possible. Ethiopia and Eritrea have been fighting a proxy war in Somalia for years. Eritrea providing arms to the Shabab, and the Islamic Courts Union before it, is an extension of that proxy war – as was, the Ethiopian invasion to unseat the ICU and to install the Transitional Federal Government.
The best outcome for the United States in Somalia is a cohesive, functioning state. The US should be wary of being captured by either of the two nations engaging in a proxy war inside Somalia. Exerting pressure on Eritrea to force them to stop arming the Shabab is one thing, underwriting Ethiopian irredentism is foolish.
Mr. Ahmed could be forgiven an ironic smile as Secretary Clinton spoke. Three years ago, as head of one of the factions of the Islamic Courts Union, Mr. Ahmed was receiving military aid from Eritrea as he fought first the then Transitional Federal Government and then Ethiopia. Now, Mr. Ahmed finds himself at the head of the Transitional Federal Government, backed by Ethiopia and facing former allies armed by Eritrea.
Secretary Clinton’s comments, and the US policy it represents, may be ill conceived. Eritrea should stop arming the Shabab. Unlike the Islamic Courts Union that preceded the Shabab, the Shabab do not appear to be a force able to unify and govern Somalia. The Shabab do not suffer any of the moderating influences that made the Islamic Courts Union palatable if not ideal. Still, the roles that Ethiopia and Eritrea play in the Horn of Africa are disconcerting. Ethiopia seeks regional hegemony; it would like to dominate Somalia and does not necessarily seek a stable, secure Somalia. Eritrea does not have a particular interest in an Islamists Somalia, but it does seek to confound Ethiopia in anyway possible. Ethiopia and Eritrea have been fighting a proxy war in Somalia for years. Eritrea providing arms to the Shabab, and the Islamic Courts Union before it, is an extension of that proxy war – as was, the Ethiopian invasion to unseat the ICU and to install the Transitional Federal Government.
The best outcome for the United States in Somalia is a cohesive, functioning state. The US should be wary of being captured by either of the two nations engaging in a proxy war inside Somalia. Exerting pressure on Eritrea to force them to stop arming the Shabab is one thing, underwriting Ethiopian irredentism is foolish.
President Ahmadinejad
Yesterday, Mahmoud Ahmadinejad was sworn in for his second term as President of Iran before the Majlis. Most of the 70 Reformist Deputies boycotted the ceremony, as Ayatollah Rafsanjani was notably absent from Ahmadinejad’s certification ceremony earlier in the week.
The obvious near-term goal for the opposition in the wake of the June 12 election was preventing Ahmadinejad from becoming the President of Iran for a second time. Time has clearly left that goal behind. But that does not mean the opposition is defunct nor does it remove the opposition’s raison d’etre.
The conflict between the regime and the opposition remains one for the mantle of the 1979 Revolution. Was that a revolution for Republic or Theocracy? Despite the swearing in, Ahmadinejad’s government remains illegitimate. The opposition’s lifeblood is the cleavage between the people of Iran’s view of its system of government and the regime’s view of that government. Khameini has adopted a near caeseropapist idea of governance. Ahmadinejad, I think, is tacking towards an autocracy. The people, however, believe in Republic – Islamic or otherwise.
The obvious near-term goal for the opposition in the wake of the June 12 election was preventing Ahmadinejad from becoming the President of Iran for a second time. Time has clearly left that goal behind. But that does not mean the opposition is defunct nor does it remove the opposition’s raison d’etre.
The conflict between the regime and the opposition remains one for the mantle of the 1979 Revolution. Was that a revolution for Republic or Theocracy? Despite the swearing in, Ahmadinejad’s government remains illegitimate. The opposition’s lifeblood is the cleavage between the people of Iran’s view of its system of government and the regime’s view of that government. Khameini has adopted a near caeseropapist idea of governance. Ahmadinejad, I think, is tacking towards an autocracy. The people, however, believe in Republic – Islamic or otherwise.
Wednesday, August 5, 2009
Bill Clinton Remains a Bad Ass, John Bolton Remains a Tool
Pardon the juvenile title. I could have used softer language. I could have thought of synonyms for “bad ass” and “tool” but irrevocably something would have gotten lost. The title reflects both the respect I have for former president Bill Clinton and the seemingly boundless loathing I have for former ambassador to the UN John Bolton.
Let’s start with President Clinton. You want to talk about bringing the goods. Five hours in country and he’s met with Kim Jong-Il and secured the release of Laura Ling and Euna Lee. Take that Jimmy Carter (not that I have anything again President Carter). This was reportedly a private trip, though it came with tacit approval of the White House and presumably the State Department. Now the interplay between President Obama, Secretary Clinton, and President Clinton leads to all sorts of arm chair psychology (see Maureen Dowd’s driveling column in today’s New York Times for an example) about how much approval there was, who showed up whom, and if the Clintons aren’t just vying against each other for the limelight. That all seems pretty irrelevant to me and more of the horse race garbage that permeates political news these days.
I think it’s also a real safe bet that Ms. Ling’s and Ms. Lee’s families couldn’t care less about what leader gets the credit for their release. All they know is their loved ones are home and safe. I do have questions about what Clinton said, what, if any, concession he made, and how this visit will impact formal nation-to-nation diplomacy between the US and the DPRK. Maybe there were no deals, maybe Bill Clinton shook Kim Jong-Il’s hand, flashed that natural smile and that’s all it took. I kind of hope so, because North Korea has done nothing deserving of a reward. Answers to my questions will come out sooner or later, but for now it’s great news these two women are free and safe and home. It also goes to show how much a little face time can achieve when you send the right face to the right place.
Turning our attention to Mr. Bolton. He wrote a hastily prepared op-ed in the Washington Post yesterday claiming “the Clinton trip is a significant propaganda victory for North Korea” and that a high-profile, private citizen going to DPRK to try and “secure the release of two American reporters, held unjustifiably by North Korea for nearly five months” is in effect negotiating with terrorists. My first beef with Mr. Bolton is his seemingly dutiful effort to avoid naming the “two American reporters” by name. Ms. Ling and Ms. Lee are real people with real families who have been suffering for a long time. That incredibly human element should not pull us into the weeds, but can not justifiably be denied either. I’ll chalk this up to Mr. Bolton’s repeated inability to appreciate the human impact on his numerous “policy prescriptions.”
My second beef is his characterization of this whole experience as negotiating with terrorists. This was a conference with a nation-state, not some non-state actor or insurgency. The US has largely held to the line of not negotiating with terrorists, but the DPRK is not a terrorist organization. Indeed they can not be classified as a state-sponsor of terrorism (as is often reported) and simultaneously be considered a terrorist organization. This might seem like splitting hairs, but clearly Mr. Bolton is trying to frame this issue as an issue of terrorism thus making it easier to decry any private citizen negotiating with them.
My third and greatest beef with the column is really twofold. One, Mr. Bolton and those of his ilk have absolutely zero credibility in the international affairs realm at this point. Nearly every major policy prescription they advanced has been discredited or abandoned on the grounds it was ineffective or just outright destructive to the goal of securing American and advancing our foreign policy goals. Two, Mr. Bolton has taken more column inches then he deserves to criticize President Obama’s foreign policy, but as an indication of how discredited he is he never offers any alternatives. Are we to do nothing Mr. Bolton while two Americans sit in a North Korean jail facing twelve years of hard labor? Do you honestly believe behind the scenes discussions haven’t been going on between the US and DPRK through a third party trying to secure the release of Ms. Ling and Ms. Lee? What would you have us do Mr. Bolton? Because it is irresponsible to do nothing. Of course when the intellectual framework you have stood by becomes discredited, it can be hard to find a new one to add to the discussion without sounding like the old out of touch pol that you are.
A couple final thoughts: First, why is the Washington Post publishing this guy’s work and with such frequency? I have been disappointed by the lack of intellectual honesty The Post has required of its columnists and contributors, and while no voice should be silenced I would hope The Post would hold to a higher standard.
Finally, despite my disdain for Mr. Bolton and his column, this is a very happy day for two families. The denial of freedom is something many of us will never understand. It will remain something we see on the news through impersonal accounts of detainees in Afghanistan, political prisoners in Iran, journalists in North Korea, and “criminals” in the United States. I have never had my freedom so completely taken away from me as Ms. Ling and Ms. Lee have over these past five months. I am happy they’re safe and that they’re home, and even as we debate what course of action is the best we should never forget the human impact of our policies. I fear for too long the US has with dire unintended consequences. Welcome home Laura Ling and Euna Lee. I hope the United States seems better then when you last saw it.
Let’s start with President Clinton. You want to talk about bringing the goods. Five hours in country and he’s met with Kim Jong-Il and secured the release of Laura Ling and Euna Lee. Take that Jimmy Carter (not that I have anything again President Carter). This was reportedly a private trip, though it came with tacit approval of the White House and presumably the State Department. Now the interplay between President Obama, Secretary Clinton, and President Clinton leads to all sorts of arm chair psychology (see Maureen Dowd’s driveling column in today’s New York Times for an example) about how much approval there was, who showed up whom, and if the Clintons aren’t just vying against each other for the limelight. That all seems pretty irrelevant to me and more of the horse race garbage that permeates political news these days.
I think it’s also a real safe bet that Ms. Ling’s and Ms. Lee’s families couldn’t care less about what leader gets the credit for their release. All they know is their loved ones are home and safe. I do have questions about what Clinton said, what, if any, concession he made, and how this visit will impact formal nation-to-nation diplomacy between the US and the DPRK. Maybe there were no deals, maybe Bill Clinton shook Kim Jong-Il’s hand, flashed that natural smile and that’s all it took. I kind of hope so, because North Korea has done nothing deserving of a reward. Answers to my questions will come out sooner or later, but for now it’s great news these two women are free and safe and home. It also goes to show how much a little face time can achieve when you send the right face to the right place.
Turning our attention to Mr. Bolton. He wrote a hastily prepared op-ed in the Washington Post yesterday claiming “the Clinton trip is a significant propaganda victory for North Korea” and that a high-profile, private citizen going to DPRK to try and “secure the release of two American reporters, held unjustifiably by North Korea for nearly five months” is in effect negotiating with terrorists. My first beef with Mr. Bolton is his seemingly dutiful effort to avoid naming the “two American reporters” by name. Ms. Ling and Ms. Lee are real people with real families who have been suffering for a long time. That incredibly human element should not pull us into the weeds, but can not justifiably be denied either. I’ll chalk this up to Mr. Bolton’s repeated inability to appreciate the human impact on his numerous “policy prescriptions.”
My second beef is his characterization of this whole experience as negotiating with terrorists. This was a conference with a nation-state, not some non-state actor or insurgency. The US has largely held to the line of not negotiating with terrorists, but the DPRK is not a terrorist organization. Indeed they can not be classified as a state-sponsor of terrorism (as is often reported) and simultaneously be considered a terrorist organization. This might seem like splitting hairs, but clearly Mr. Bolton is trying to frame this issue as an issue of terrorism thus making it easier to decry any private citizen negotiating with them.
My third and greatest beef with the column is really twofold. One, Mr. Bolton and those of his ilk have absolutely zero credibility in the international affairs realm at this point. Nearly every major policy prescription they advanced has been discredited or abandoned on the grounds it was ineffective or just outright destructive to the goal of securing American and advancing our foreign policy goals. Two, Mr. Bolton has taken more column inches then he deserves to criticize President Obama’s foreign policy, but as an indication of how discredited he is he never offers any alternatives. Are we to do nothing Mr. Bolton while two Americans sit in a North Korean jail facing twelve years of hard labor? Do you honestly believe behind the scenes discussions haven’t been going on between the US and DPRK through a third party trying to secure the release of Ms. Ling and Ms. Lee? What would you have us do Mr. Bolton? Because it is irresponsible to do nothing. Of course when the intellectual framework you have stood by becomes discredited, it can be hard to find a new one to add to the discussion without sounding like the old out of touch pol that you are.
A couple final thoughts: First, why is the Washington Post publishing this guy’s work and with such frequency? I have been disappointed by the lack of intellectual honesty The Post has required of its columnists and contributors, and while no voice should be silenced I would hope The Post would hold to a higher standard.
Finally, despite my disdain for Mr. Bolton and his column, this is a very happy day for two families. The denial of freedom is something many of us will never understand. It will remain something we see on the news through impersonal accounts of detainees in Afghanistan, political prisoners in Iran, journalists in North Korea, and “criminals” in the United States. I have never had my freedom so completely taken away from me as Ms. Ling and Ms. Lee have over these past five months. I am happy they’re safe and that they’re home, and even as we debate what course of action is the best we should never forget the human impact of our policies. I fear for too long the US has with dire unintended consequences. Welcome home Laura Ling and Euna Lee. I hope the United States seems better then when you last saw it.
Saturday, August 1, 2009
Of Oil Sands and Saudi Bogeymen
Kathleen Parker has a somewhat nonsensical column in today’s Washington Post. As best as I can tell, Ms. Parker believes that Waxman-Markey isn’t going to do anything to lower crude oil imports; by doing nothing (that is leaving the status quo as it is) it makes us less secure; and that any reduction in crude imports will be due to George W. Bush. It is mostly drivel.
Parker does touch on oil sands as an alternative source of oil and seems to suggest that if we erect barriers to oil importation, driving up the domestic price of oil, oil sands would make a good substitute and we could get out from the thumb of those wily Saudis.
The biggest problem with oil sands is their production cost. Whereas the lifting cost for a barrel of oil produced in Canada was about $10.00 in 2007, the cost of extracting a barrel of oil from the oil sand muck is about $28.00. So, when crude futures trade at around $35.00/bbl, as they did a few months ago, oil sand production costs eat up 80% of the value of the barrel. Even when oil is trading near $70/bbl, as it is now, production consume 40% of the value of the barrel. In comparison, at the $35/bbl mark, the production cost for a barrel of Canadian crude accounts for just 28% of the barrel’s value. And $10/bbl lift cost is at the high end of the spectrum for per barrel lift costs.
Finally, estimates produced by CAPP when crude was trading between $70 and $145/bbl pointed to a Canadian oil sands production capacity in 2020 of about 3 million barrels per day. After significant cuts in capital outlays following the late 2008 collapse in world oil prices, these targets are in serious doubt, though the EIA believes that Canada may produce 4 million barrels per day by 2030. By comparison, the United States produced over 5 million barrels per day in 2007 and consumed more than 20 million barrels per day.
Parker does touch on oil sands as an alternative source of oil and seems to suggest that if we erect barriers to oil importation, driving up the domestic price of oil, oil sands would make a good substitute and we could get out from the thumb of those wily Saudis.
The biggest problem with oil sands is their production cost. Whereas the lifting cost for a barrel of oil produced in Canada was about $10.00 in 2007, the cost of extracting a barrel of oil from the oil sand muck is about $28.00. So, when crude futures trade at around $35.00/bbl, as they did a few months ago, oil sand production costs eat up 80% of the value of the barrel. Even when oil is trading near $70/bbl, as it is now, production consume 40% of the value of the barrel. In comparison, at the $35/bbl mark, the production cost for a barrel of Canadian crude accounts for just 28% of the barrel’s value. And $10/bbl lift cost is at the high end of the spectrum for per barrel lift costs.
Finally, estimates produced by CAPP when crude was trading between $70 and $145/bbl pointed to a Canadian oil sands production capacity in 2020 of about 3 million barrels per day. After significant cuts in capital outlays following the late 2008 collapse in world oil prices, these targets are in serious doubt, though the EIA believes that Canada may produce 4 million barrels per day by 2030. By comparison, the United States produced over 5 million barrels per day in 2007 and consumed more than 20 million barrels per day.
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