Coal - The Confounding Energy Source for a Climate Change Worrier

It seems unlikely that I will be anointed as King of the U.S. any time soon, so my conflicted attitude about coal really is not going to be much of a difference maker. But for a "warmest" like myself that cares about the American economy, it is: a) challenging to oppose efforts to reduce the burning of coal in the U.S, but b) impossible to support restrictions on coal use that limit the economic advantage this cheap source of energy gives the U.S. 

My daughter spent a spring break in the coal country of West Virginia. She said it was devastating to see beautiful mountain tops being lopped off in order to supply coal to India. This practice is incredibly controversial even in coal country. But, as long as the number of coal burning power plants are growing in China, India, and Germany, it seems fruitless to shut down American coal burning power plants.

Much of the success European's claim in reducing CO2 emissions is simply due to their shipping many of their most pollution intensive jobs off to Asia. Thus, their regulations and taxes have had barely any impact on global releases of heat trapping gases, while sending thousands of good jobs off to Asia. (And as a side note, now that the Germans have shut down their older, but still perfectly viable nuclear plants, that country's emissions are increasing dramatically due to increased burning of coal. Small businesses and consumers in Germany are paying higher rates for electricity and German tax dollars are being spent subsidizing large industries)

Banning coal plants in the U.S. would put our economy at a huge disadvantage, while having little impact on worldwide emissions of heat trapping gases. And further, it would put the power supply at risk, unless we build a plethora of new gas fired plants, at huge expense, Burning gas releases plenty of CO2 emissions as well, and the supply of cheap gas is not infinite either.

Yet as a "warmest", I would love to see all coal plants worldwide shut down, not just due to the heat trapping gases they emit, but also because of the mercury and other toxic chemicals they put into the air, particularly the coal plants in Asia that don't use scrubber technology.Pollutants from China are being carried all the way to Lake Tahoe

It was only a couple of years ago that I was infatuated with wind and solar. Yet I now consider these energy sources only a partial solution unless reasonably price utility scale storage becomes feasible. Wind and solar offer a partial solution to reducing fossil fuel burning, but seem unlikely to be a complete solution on a global basis. 

The only complete solution to reducing the burning of coal by power plants is to come up with a technology that is cheaper than coal and does not suffer from an intermittency problem. Nuclear and/or fusion are probably the only viable candidates for a cheaper than coal solution. Advanced technology holds the potential to be far safer and cheaper than existing nuclear technology. Regulations and taxes that penalize U.S. businesses are unlikely to pass in the current Congress, nor is tax payer supported funding of solar and wind technology development. 

Now I am really getting off topic, but here is my latest rant.

It is only in the context of the U.S. Budget that $3 billion can be considered chump change, but that is the case as far as spending by the U.S government on advanced energy technology. And that $3 trillion is fragmented in so many ways that the sum of the parts is way less than the total would suggest.

Not that I have anything against NASA, but it seems ridiculous to me that our government is spending $18 billion on NASA and less than $3 billion on advanced energy technology. Here are excepts that show how fragmented the spending is:

The Department of Energy's (DOE) budget includes

Fusion Energy Sciences:
The FY 2014 appropriation was $504.7 million
The FY 2015 request is $416.0 million, a decrease of $88.7 million or 17.6 percent
The House bill provides $540.0 million, an increase of $35.3 million or 7.0 percent above current funding

The report has two pages detailing the committee’s funding recommendations and guidance for the fusion energy sciences program.  It gives strong support for the domestic fusion program.     

High Energy Physics:
The FY 2014 appropriation was $796.5 million
The FY 2015 request is $744.0 million, a decrease of $52.5 million or 6.6 percent
The House bill provides $775.0 million, a decrease of $21.5 million or 2.7 percent below current funding

There is lengthy report language.  

Nuclear Physics:

The FY 2014 appropriation was $569.1 million
The FY 2015 request is 593.6 million, an increase of $24.4 million or 4.3 percent
The House bill provides $600.0 million, an increase of $30.9 million or 5.4 percent above current funding

The report includes language pertaining to the 12GeV Continuous Electron Beam Accelerator, the Relativistic Heavy Ion Collider, and the Facility for Rare Isotope Beams.

           Source: http://www.aip.org/fyi/2014/house-fy-2015-doe-office-science-appropriations-bill

DOE Office of Nuclear Energy

• DOE’s Office of Nuclear Energy is funded at $914 million, an increase of $24.3 million over the FY14 funding level. Nuclear energy research and development programs that receive funding within the $914 million allocation include several of the following:

• The Idaho Operations and Infrastructure account, which covers infrastructure maintenance and improvements at Idaho National Laboratory, is funded at $200.6 million – a $20 million increase over last year.
• The National Science User Facility program is funded at $36.5 million – an increase of $18 million above the President’s request.  Increases under this program are directed to fully complete the installation of post-irradiation examination equipment at INL’s Irradiated Materials Characterization Laboratory (IMCL).
• Small Modular Reactor Licensing Support Programs are funded at $55 million.   This funding is slated for NuScale Power’s Small Modular Reactor which is proposed for construction in Idaho.
• The Light Water Reactor Sustainability program, which is managed by INL and promotes the continued safe operation of America’s existing nuclear reactors, is funded at $35 million, an increase of $5 million over FY14 and the budget request.
• The Reactor Concepts Research, Development, and Demonstration account is funded at $133 million – an increase of $20 million above fiscal year 2014 and $32.5 million above the President’s request. Within the overall $133 million level for this account, $33 million is allocated to fuel qualification for the High Temperature Gas Reactor, $11 million above the budget request.
• The Advanced Fuels program within Fuel Cycle Research and Development is funded at $60.1 million, the same as last year and $17 million above the President’s budget request, and Used Nuclear Fuel Disposition research and development is funded at $49 million, $19 million above FY14.
• Within the Office of Naval Reactors, the bill includes $68 million for the operation of the Advanced Test Reactor, an increase of $1.5 million above FY14.
• Within the Office of Electricity Delivery and Energy Reliability, the bill includes $5 million to continue development of an Electric Grid Test Bed program to enhance existing full-scale electric grid testing capabilities like those at Idaho National Laboratory.
• The bill also provides $380 million for cleanup activities associated with the Idaho Cleanup Project and the Advanced Mixed Waste Treatment Project co-located on the Idaho desert with Idaho National Laboratory. This represents an increase of $13 million above the President’s request to fully support workplan alignments needed for Idaho’s transuranic waste program as a result of the closure of the Waste Isolation Pilot Plant. 
• Includes an additional $2 million for the National Spent Fuel Program, putting the unique expertise of INL to work in order to provide solutions for managing the Department of Energy’s inventories of spent nuclear fuel.
• Prohibits the U.S. Corps of Engineers from requiring Clean Water Act section 404 permits for certain agricultural activities, such as construction and maintenance of farm or stock ponds or irrigation ditches.
• Directs the U.S Environmental Protection Agency and the U.S. Department of the Army to withdraw the interpretive rule, “U.S. Environmental Protection Agency and the U.S. Department of the Army Interpretive Rule Regarding the Applicability of the Clean Water Act 4 Section 404(f)(1)(A).” Section 404 of the Clean Water Act exempts certain agricultural activities, such as soil and water conservation practices, from regulation. The interpretive rule would have limited that exemption significantly. 

              Source: http://www.aip.org/fyi/2014/house-fy-2015-doe-office-science-appropriations-bill

Related Posts

Cutting Through The Global Warming Debate: It's the Rising Sea Level, Stupid!

2015 Will Be The Hottest Year In Recorded History - The Prediction That Will Be Hard to Refute

Even A Permabear Doomster Can Be Bullish About the Short Term Outlook for U.S Stocks - 8/17/14 and 8/24/14

As the title of this blog indicates, I am a doom and gloomer in regard to the future we are leaving for our grandchildren to inherit. However, in regard to the U.S. stock market, over the next couple of days, I am a raging bull. The reversal in the market on Friday after the fake news story about Ukraine attacking a Russian convoy has me convinced that the U.S stock market will be going higher over the next couple of days.

So if I am right, it is appropriate for active traders to get long the U.S. stock market. However, it is so unusual for me to be bullish, that this post may serve as a contrary indicator. 

If the stock market is indeed headed up on Monday and Tuesday, it still makes sense to have stops in place. There is so much turmoil in the world that bad news could derail the bulls. But at least for now, the bulls seems to be in control of the market.

8/22/14 Update

The fact that 1) the news out of Ukraine today, and 2) Janet Yellen was not as dovish as expected during her presentation at Jackson Hole, did not lead to a big down day, makes me bullish for next week as well. "Be long or be wrong" at least in the short term. The magnetic pull of round numbers should lead to a good run to 2000 for the S & P. However, no change in my long term permabull doomster stance., although after being bullish two weeks in a row, I may have to temporarily let my membership in the the permabull club lapse.

The Information on this blog is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. YOU SHOULD NOT MAKE ANY DECISIO upN, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS BLOG WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. 

The 10 Year U.S Treasury Note at 2.37 percent as a Safe Haven Investment? Really?

There are lots of investments that make sense as a flight to quality during a time of crisis. And there is no question that over the last few days, buying U.S Treasury Notes and Bonds has been a very profitable trade. However, for anyone with a time frame of more than 60 days, this is a total head scratcher. Given that the Fed wants 2% inflation, QE is proposed to come to an end in a couple of months, and fed funds are likely to be increased next year, buying the 10 year note at these levels seems like a bizarre investment to take "risk off".

Looking to park some money in these times of turmoil. Why not take a look at gold mining stocks that pay a reasonable dividend. Given that we are close to the cost of production for gold, there is not a huge amount of downside risk, and the upside could be quite significant.

For those that are looking for a short term trading idea, consider shorting the SPX four minutes before the close today, and closing out the position 5 minutes after the close. This tactic is based on the assumption that traders will not want too much risk over the weekend and will sell off right at the close. Of course, then again traders may not choose to sell off at the close. Also please beware that even if this tactic works and you have a profit on your trade at the close, it is incredibly risky to be short over the weekend.. If we have a quiet weekend, the futures may go back up before trading starts on Monday morning.

8/16/14 Update
As a perma-bear, many of my investing/trading predictions posted in this blog have been painfully inaccurate. But dang I nailed the above. The market did go down on the close on 8/8/14, and it was a quiet weekend on the news front and the market opened up big on Monday 8/11

The Information on this blog is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. YOU SHOULD NOT MAKE ANY DECISIO upN, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS BLOG WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. 

Why I Am Not Shorting Facebook

The majority of the analysts covering the social media space are missing the main story, and that is that social media sites simply do not offer terribly compelling advertising opportunities. A significant portion of the advertising spending they are pulling is coming from advertisers utilizing media allocation models. However, if an advertiser is allocating 10% of their media spend on social media sites, a rise in the views of the social media sites will not lead to a proportionate increase in advertising revenue (at least during the current fiscal year). The potential ROI from advertising on the social media site varies, but the site that is generating the most dumb money from advertisers is probably Twitter. For most businesses, Twitter advertising is too expensive to pay-out.

Most of the social media sites are great shorting candidates. However, there are two that I would stay away from shorting, Facebook and Linkedin.

I am not going to short Linkedin because there is the potential for them to ramp up their revenue from employment recruitment activity. I doubt that this potential revenue source justifies Linkedin's valuation, but it is outside my main thesis in regard to advertising revenue potential being overvalued on the other social media sites.

The other social media site that I would not short is Facebook. While I am dismissive of the advertising opportunities on Twitter and some of the other social media sites, I am a Facebook advertiser. Further, I have money in my budget to advertise on Instagram if Facebook ever launches advertising availability on Instagram. So, I am literally waiting to throw my company's advertising dollars at Facebook via Instagram, once there are opportunities to do so. Given that Facebook has an opportunity to create another huge revenue stream if they can figure out how to monetise Instagram, my suggestion is to be wary of shorting Facbook

The Information on this blog is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS BLOG WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. 

How Long Until the Japanese Yen Collapes? Months, Years, or Another Decade?

The collapse of yen is inevitable. No government can fund half of their spending with debt forever. The Japanese government debt burden is so enormous that the Bank of Japan must hold down the cost of  borrowing by funding the debt via being the primary buyer of Japanese government bonds (aka money printing). With Japan's aging population leading to increased demands for government spending, there is no way out for the Bank of Japan's (BOJ) program of buying up government debt. The debt issuance is so enormous, and the bonds are such a risky investment that it is totally unrealistic to think that market would soak up all the debt issuance without the BOJ's buying. Thus, this massive debt buying/money printing by the BOJ can not be halted. This massive debt buying/money printing will eventually lead to the debasement of the yen and a run on Japan's currency.

The eventual collapse of Japan's economy has been widely predicted for years. I came across a 2001 article on Japan's Runaway Debt Train. And even back in 2011, shorting Japanese bonds was referred to as "the widow maker" because it had been such a disastrous trade for so long. However, at this point, with the interest rate on the benchmark Japanese government 10 year bond at just 0.5%, further declines are getting close to being mathmatically impossible.

However, the "widow maker" trade is to short Japanese bonds. It's my opinion that the smarter trade in the near term may be to short the yen, as bond buying by the BOJ may hold down interest rates on government debt at artificially low levels until well after the decline in the value of the yen is well underway. Given the goal of the government bond buying by the BOJ is to increase inflation while holding interest rates low, in the near term going with the flow and assuming the BOJ will have some success at both goals, shorting the yen may be a quicker route to profits.

Eventually, shorting the yen is going to be spectacularly successful. The critical question, and one that is frustratingly challenging to answer is, "when will the yen collapse?". It seems almost impossible to believe that the crash of the yen will not occur within this decade. Yet on the other hand, there is little to indicate that the crash of the yen is only months away either.

Here is why the yen is destined to collapse sometime in the near future. Both Japan's total government debt and the annual deficit are insane and unsustainable.

Japan Government Revenue and Expenditures

Revenues (2013) - $460 billion
Expenditures (2013) -  $945 trillion
(source - WSJ)

The gap between revenues and expenditures is enormous - $485 billion

Projected Interest Expense (2014)  - $224 billion

Funding half of government spending via debt/money printing is not sustainable, particularly given that the Japan's government debt has now passed a quadrillion yen. According to Japan's budget forecast, revenue from bond sales will pay for 43% of the 2014 budget, down from 46% in 2014. This  is the official number and is likely highly optimistic - my guess is that final 2014 numbers will equal or exceed last year's 46% (the official numbers for deficit percentages do not match up with the WSJ revenue and expenditures totals shown above in part due to off budget items, thus the government figures understate the depth of the problem).

And the BOJ is not printing money solely to buy up newly issued government bonds. The BOJ has pledged to increase the money supply by 60-70 trillion yen ($589-687 billion) in 2014, an even larger amount than the deficit.

Interest payments of $224 billion essentially eat up half of all revenue, and that is with the BOJ holding down interest rates on Japan government debt under 1%. Without BOJ's bond buying, higher interest rates would result. Simply a small rise in interest rates would lead to an enormous budget busting cost of debt financing

Putting further pressure on the yen will be Japan's total debt of $12.7 trillion (which expressed as percent of GDP is 242.3%, and $99,725 per person according to Bloomberg). To date, Japan deficit financing has not led to a crash of the yen. But the huge deficits have led to Japan's government being even more indebted than even the PIGS (Portugal, Italy, Greece, and Spain) as a percent of GDP. No nation in history has been able to sustain money printing for a prolonged period without eventually causing a crash, and the Japanese economy is not so exceptional that it will be able to escape this trend.

The yen did decline by 20% in value in from October 2012 to May 2013, from 87 yen to the dollar to 103 yen to the dollar. But it has since stabilized and is back to 101.5 yen to the dollar. When the yen does finally crash, as is absolutely inevitable, the future decline will dwarf last year's 20% drop . And it seems likely that the crash of the yen may not be too far off.

       click chart for current Yahoo Finance report

The fact that the Yen has not collapsed is in part due to the claim that Japan is moving toward a budget surplus in 2020. That claim seems about as likely as peace in the Mideast, the fountain of youth, or turning lead into gold.

The Information on this blog is provided for education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS BLOG WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. 

The Propaganda Battle Over The Fatal Odessa Trade Union Building Fire

Russia is using the fatal fire in the Odessa Trade Union Building in a matter right out of the Joseph Goebbels playbook. The Russian claim "Odessa slaughter: How vicious mob burned anti-government activists alive" is a terrific way to get a population stirred up to support an invasion.

On the other side of the coin, the Ukrainian authorities are claiming "pro-Russians accidentally set fatal Odessa fire with Molotov cocktails"

This is one of those cases where perception matters far more than reality. The flames are being fanned for more violence to come. The truth of how the fire was really set is not a very important issue in this propaganda battle. 

Odessa could be a flash point for an escalation of the conflict. Ukrainian authorities are unlikely to allow their remaining Black Sea port to fall into the hands of the separatists following the loss of Sevastopol in Crimea. Yet with a majority Russian speaking population in Odessa, the potential for strong separatist opposition is almost certain

Is Russia setting the scene for another invasion of Ukraine?. Time will tell, but more violence in Odessa is a highly likely outcome. And violence in Odessa could be the excuse that Russia utilizes to expand their occupation of Ukrainian territory. They are already using the media to get their populace ready to support an invasion.

Cutting Through The Global Warming Debate: It's the Rising Sea Level, Stupid!

Every day brings a new report on some obscure impact of climate change by 2050. Today's headline is almost comical, "Chipotle Warns It Might Stop Serving Guacamole If Climate Change Gets Worse". Along the same lines, a typical example of a news story about the impact of global warming is the claim that "climate change may cause major lizard extinctions by 2050". The cacophony of claims about all the catastrophic events that may occur by 2050 become little more than white noise to climate change deniers and skeptics. 

Here is the climate change impact that most resonates with climate change skeptics. "The sea level is rising by 1/10" per year". It may be that the sea level rise of 1/10 inch per year is such a slow trend and is so lacking in shock value that it is not much of a headline generator. However, it's easy to understand and fairly linear. It's also one of the most worrisome aspects of the millions of metric tons of greenhouse emissions gases being emitted annually.

Here is another tactic to take with global warming skeptics. Make a wager that 2015 will be the warmest in recorded history. If James Hansen is correct, you have a good chance of winning the wager, and it refutes the denialism that has been fomented due to the decade long pause in the increase in global surface temperatures

And for those living in areas of the U.S. that have suffered through a brutally cold winter, suggest they visit this site that shows the global temperature departure from average. The maps on this site visually show that while some geographies are unusually cold, they are more than compensated by areas that are unusually warm.

Global warming deniers may try to refute the fact that the seas are rising. Of course, many of the same folks will tell you that dinosaur fossils were put here to test our faith. However, I'll take the word of NASA scientists that confirm that the sea level is rising. If the folks at NASA are good enough at math that they can put a man on the moon, I trust their capability to measure the rising sea level

Read More

Sea Level Rise Resumes Upward Trend - Where Are The Headlines?

Is The Impact of Japan's April 1 Consumption Tax Increase Being Underestimated?

The general consensus seems to be that the upcoming consumption tax increase in Japan has been so thoroughly analyzed that its impact is baked into future projections. My crystal ball in regard to the impact of the 3% increase in the consumption tax from 5% to 8% is rather cloudy. But it seems like the impact could be more severe than most analysts seem to expect. The sales tax increase could set off an ugly downward cycle.

Here are a couple of other events that led to the type if forward shifting of demand that the upcoming tax increase is producing

Japan - The April 1, 1997 2% increase in the consumption tax from the then 3% to 5% led to a huge increase in sales of big ticket items in the run-up to the hike in rates. However, it was followed by a year and and half recession.
Global - The boom and bust in purchases of high tech capital goods due to Y2K compliance led to a recession in 2000 that hit virtually every developed economy.

Japan's economy is already under huge duress due to an aging population. With 24% of the population age 65 or older, no other country in the world has so many senior citizens to support. Japan still has a labor force participation rate of 59% (versus 63% in the U.S.), but it bound to decline over time.

Japan government spending, deficits, and debt make one dizzy just pondering the numbers, as pointed out by Wolf Richter. The Japanese government's Ponzi game of borrowing half of spending and creating demand for the borrowing via money printing will ultimately lead to a collapse. The $70 billion a month of "quantitative easing" by the Bank of Japan to soak up demand for Japanese government debt is ultimately a recipe for a Weimar Republic like collapse.

The Japanese economy is headed for a calamity at some point in the future due to the massively excessive debt and deficit. Will the April 1 consumption be the straw that breaks the camel's back? Probably not. However, don't be surprised if the boom bust impact of the April 1 consumption tax increase is worse than most analysts are projecting. It seems reasonably likely that Japan is in for a nasty recession during the balance of 2014.

Will The Tea Party Recognize That The Only Real Climate Change Debate Is Whether It Is Catastrophic?

The weird weather this winter has focused a good deal of attention on the debate over whether global warming is the cause of the cold, snowy winter across much of the U.S. Frankly, even as someone that is firmly in the "warmist" camp, I suspect that the weird weather may just be due to the variability of weather.

However, in the many stories about the debate over global warming appearing in the mainstream media, the articles on the subject have been filled with quotes from the small group of global warming scientists that are skeptical that catastrophic global warming is occurring due to greenhouse gas emissions. Of note, there is only a tiny group of climate scientists that deny global warming is occurring. The only real questions even among the climate scientist that are global warming skeptics are: 1) is it really catastrophic; and/or 2) is it really caused by greenhouse gas emissions. Here is a typical quote from a couple of the most frequently quoted climate change skeptics, University of Alabama in Huntsville atmospheric science professors Richard McNider and John Christy

For instance, in 1994 we published an article in the journal Nature showing that the actual global temperature trend was "one-quarter of the magnitude of climate model results." The disparity between the predicted temperature increases and real-world evidence has only grown in the past 20 years.

Given how badly the climate change models have overstated expected changes in global surface temperature, their skepticism about "catastrophic" global change does not seem unreasonable. However, McNider and Christy do not deny that global warming is occurring, that the oceans are rising by 1/10th inch per year, or arctic sea ice is declining to the point that ocean shippers can now use the Northwest  Passage during the summer.

Confusing the issue, publications such as Forbes are guilty of publishing out and out misinformation. Any article that exaggerates the decade long pause in global surface temperture warming to 17 years should instantly be recognized as being invalid. Cherry-picking 1998 as the starting point for measuring the start of the pause in the rise of global surface temperature is a favorite and invalid tactic of the climate change deniers. 1998 was a statistical outlier, an unusually hot year caused by El Nino, and using that year as a starting date demonstrates statistical illiteracy. What makes the publication by Forbes of this misinformation seem a bit bizarre is that fact that in 2012, they published an article explaining why cherry picking 1998 was invalid. Another example showing how using 1998 as the start of the "pause" is not scientificly valid is provided by SkepticalScience.

The Tea Party Platform does not address the issue of global warming, despite the large number of its members that fall into the "denier" camp. However, the philosophy of the Tea Party puts it in direct conflict with the global warming "alarmists" who are demanding government intervention to reduce greenhouse gas emissions.

On one hand, fighting against greenhouse gas reducing legislation seems to be in the wheelhouse of the Tea Party's philosophy. However, on the other hand, if Tea Party members use a claim that "global warming is a hoax" to support opposition to greenhouse gas reducing legislation, then they will be guilty of being flat earther's, willfully ignoring science. If "global warming is a hoax" claims become ingrained within the Tea party platform, it will cost the group an enormous amount of credibility, particularly if James Hansen's claim that 2015 will be the hottest year in recorded history comes to pass

2015 Will Be The Hottest Year In Recorded History - The Prediction That Will Be Hard to Refute

The climate change debate is muddled due to the decade long pause in warming of the earth's surface temperature. Most climate models wildly overstated the warming that would occur during the most recent decade. The long pause in the warming of the earth's surface temperature has played a big role in climate researchers' utter failure to convince U.S. voters that "climate change can now be considered another weapon of mass destruction" (a much disputed line from a John Kerry speech). Further, much of the debate between climate change skeptics and "warmists" has been  challenging to interpret or evaluate.

However, a number of climate researchers have made a prediction that should be easy for everyone to interpret, and that is that the next El Nino will lead to the hottest year in recorded history. According to climate researcher James Hanson, "It appears that there is substantial likelihood of an El Niño beginning in 2014, and as a result a probable record global temperature in 2014 or 2015". Dr. Michael Mann has indicated that "perhaps that will put to rest once and for all the silly notion, promoted by climate change contrarians, that climate change has ‘stopped’.”

As shown in the chart below, years in which El Nino conditions are present tend to be hotter than La Nina years. And Dr. Michael Ventrice suggests "We are seeing increasing evidence of an upcoming change in the Pacific Ocean base state that favors the development of a moderate-to-strong El Niño event this Spring/Summer

It would be nice to think that the results of the "hottest year in recorded history" prediction will provide some resolution in the debate about whether global warning and climate change are occurring. The outcome of this prediction should certainly provide a bit clarity in regard to the global warming debate. Maybe there will be some change in the makeup of the Global Warming's Six Americas as defined in an analysis provided by the Yale School of Environmental Studies

• The Alarmed - 16%
• The Concerned - 27%
• The Cautious - 23%
• The Disengaged - 5%
• The Doubtful - 12%
• The Dismissive - 15%

Conclusion
Little action will be taken on a global basis to reduce emissions of greenhouse gases until there is consensus on the importance of doing so. The outcome of the prediction that 2015 will be the hottest in recorded history maybe be a milestone event in the resolution of the debate on global warming and climate change.

Is U.S. Winter Weather Weirdness Due to Climate Change or Is It Just Winter?

The weather this winter in the U.S. has been really weird. It has led some to speculate, including myself, that the declining arctic sea ice or other climate change impacts may be playing a a role. However, given that a group of leading climate researchers have recently come out with an opinion in regard to climate change that "we consider it unlikely that those consequences will include more frigid winters", it is challenging make a case that climate change is causing the winter weather weirdness.

It is of particular note that most of the articles suggesting winter weirdness may be in part due to declining arctic sea ice reference the research of Rutgers climate scientist Jennifer Francis. However, even Francis doubts that declining arctic sea ice is causing the weird winter weather. She stated

"The media certainly had a field day with the “attack of the polar vortex” in early January, and in their hyping of the story, some misquoted me (and others) by saying that climate change caused the unusual cold spell. Of course this sort of event has happened before, and this one wasn’t unprecedented. I also agree that greenhouse-gas induced warming will reduce, not increase, the likelihood of breaking cold temperature records — the data already show this."

Casting further doubt on the the influence of arctic sea ice on the winter weather is that fact that the massive decline in arctic sea ice is mostly just a summer occurrence. As stated by Cornell climate scientist Charles H. Green,

“The lag between decreases in sea ice extent during late summer and changes in the mid-latitude atmospheric circulation during other seasons (when the recent loss of sea ice is much smaller) needs to be reconciled with theory.”

It is ironic that the current weather impacts a large segment of the populations' opinion about climate change and that this bout of weather weirdness is being taken by some as evidence that climate change might not be a hoax. So, opinions of some about climate change are being influenced by weather that is probably just due to it being winter.

Related Article
Weather Weirdness and Arctic Sea Ice

Were January Retail Sales Overstated or Is My Tinfoil Hat on Too Tight?

I flat out do not believe the numbers that the Census Bureau reported for January retail sales. Based on conversations with retailers, the nasty weather crushed sales during January. I will bet dollars to donuts that future updates to retail sales reports will feature significant downward revisions. In particular, I find the reported clothing and clothing accessories sales to be outside the realm of believability.

Am I crazy to think that anecdotal reports from a handful of apparel retailers are more reliable than the U.S. Census bureau? Maybe.  But do your own due diligence. Go into any apparel retailer, other than the limited segment that sells cold weather gear, and ask them how their January results compared to previous year. It is highly likely that you will hear the January sales were off by a huge percentage. Thus, I declare that the claim that retail sales in general and clothing sales specifically were up in January to be highly suspect.

According to the Census Bureau, the "advance estimates of U.S. retail and food services sales for January, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $427.8 billion, a decrease of 0.4 percent (±0.5%)* from the previous month, but 2.6 percent (±0.9%) above January 2013".  The report also indicated that sales of clothing and clothing accessories increased to $20,985 million dollars from $20,742 in 2013.

Check out this article on US Retailers' January 2014 Sales Roundup. There is a huge difference between same store sales and net sales. While the primary reason for the discrepancy between net sales and comparable store sales is due to January 2014 being treated by many retailers as a 4 week month and January 2013 sales being a 5 week month, the net sales number certainly appear abysmal. Given the timing differences and the impact of store openings and closings, net sales in most cases would not be as reliable an indicator as same store comparable sales. However, given the 20% (1 week reduction) shorter period measured, the number of retailers that reported declines of greater than 20% in net sales seems somewhat suspicious.

It will soon become apparent whether my tin foil hat is on too tightly. February retail sales are due to be reported on March 13, 2014 at 8:30 am. I will be highly surprised if this report does not include a downward revision to the January advance report.

Weather Weirdness and Arctic Sea Ice

There has already been lots of weather weirdness in 2014. The unanswerable question about all the weather weirdness: A) is it nothing more than weather being unpredictable, or B) is climate change exacerbating the weird weather leading to extreme cold in Atlanta, extreme heat in Australia, and unseasonably mild weather in Sochi.

One theory that seems like a plausible explanation for the cold weather experienced in the U.S. east of the Rockies is that Arctic warming has reduced the differential between the cold winds emanating from the Arctic and the warm winds from the tropics. The theory is that the diminishing differential is leading to a slower and wavier jet stream that is dipping south and also allowing the polar vortex to escape the Arctic.

Is there some truth to the above theory? Trying to determine the validity of this theory makes it particularly useful to know what happening to the temperature in the Arctic. For those that like websites that track changes, The Arctic Sea Ice News and Analysis website is a terrific resource. They publish a daily report on the extent of Arctic sea ice.

Viewing the two images produced daily by this site seems to provide tremendously contradictory information. The trend line image shows that yesterday seemingly was a momentous day. The 2013-2014 sea ice extent trend line crossed the 2011-2012 trend line for the first time this winter. This year's trend line for Arctic sea ice also seems to be poised to drop below the 2 standard deviation channel for the first time this winter. The reduced level of Arctic sea ice would seemingly be strong evidence that climate change is having a big and measurable impact.

However, in looking at the map of Arctic sea ice, it is does not product a sense of panic about the loss of sea ice. Viewing the map, the areas that have lost sea ice seem rather unsubstantial.

My guess is that the weather weirdness and the Arctic sea ice level both serve as a litmus test for ones views on climate change. For those that believe climate change is occurring to due to greenhouse gas emissions, both are confirming data points. For global warming skeptics, the weird weather and current Arctic sea ice levels prove absolutely nothing.

Visit the Arctic Sea Ice News website for larger version of these images

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Comments this week from Prince Charles and John Stossel were at opposite ends of the climate change spectrum. While Prince Charles described climate change deniers as "headless chickens", John Stossel pointed out that there is not much the U.S. can do to impact climate change as long as China and India continue to pump massive amounts of CO2 into the atmosphere, so why not just "chill out".
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The drought in the southwest of the U.S. is a slowly developing castastrophe in the making. I for one certainly would not be making any long term investments in Las Vegas, given the water woes that city may face in the near future. And agriculture in Southern California may be in huge trouble as water throughout the semi arid southwest become a scarcer and more expensive resource.

Leading Scientists Explain How Climate Change Is Worsening California’s Epic Drought

Finally, I find the lack of concern of many bright individuals, including John Stossel, regarding the potential sensitivity of the environment to future greenhouse gas emissions to be challenging to comprehend. One of the reasons for the low level of concern is 
The communication of uncertainty is hindering climate change action - The Guardian