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U.S. Shale Boom Is Saving the World $5 Billion a Day

Posted by Tom Giovanetti | Comments | September 16, 2014

Interesting piece in Quartz about how the U.S. shale revolution has dramatically stabilized world oil and gas prices, saving the world almost $5 billion every day:

Oil prices continue to plunge today despite the beheading of another western hostage by the Islamic State, tensions between Russia and the West, and mayhem in Libya. As Quartz has reported, one of the main reasons is surging US oil production, which has made up for supply disruption almost barrel for barrel—and is also a bad sign for the leaders of petrostates.

Now we have an estimate of where oil prices might have been absent the American oil boom—a sobering $150 a barrel, former BP CEO Tony Hayward told the Financial Times (paywall).

That’s 55% higher than the current benchmark price of $96.27 that was trading in Asia this morning. If Hayward’s number is right, it means that the US boom is saving the global economy about $4.9 billion a day in oil spending. Global consumers currently demand about 92 million barrels of oil a day, and without the extra US supply the market would be about 3 million barrels short, sufficient to send traders into a frenzy bidding up the price.

Since 2011, US oil production has soared by about 3 million barrels a day, to about 8.5 million barrels, thanks mostly to the technique of hydraulic fracturing in shale oil fields. That is just a bit less than the volume of oil production that has been persistently off line since the 2011 Arab Spring ushered in the three-year wave of unusual oil disruptions the world has experienced. When you add in a 1-million-barrel-a-day rise in Canadian oil production in the same time period, North America as a region has swamped the lost barrels.

Quotes from UNT Prof. Adam Briggle that Undermine his Call for a Ban on Fracking in the City of Denton, Texas

Posted by Tom Giovanetti | Comments | September 3, 2014

Last night I had the pleasure of taking part in a debate over the proposed ban on fracking in the City of Denton, Texas. My debate partner was Dr. Ed Ireland of the Barnett Shale Energy Education Council, and our opponents were Professor Adam Briggle of the University of North Texas, and Calvin Tillman, the former mayor of DISH, Texas.

My side was in favor of energy exploration and opposed to the ban on fracking.

During my research for the debate I found a number of articles by Prof. Briggle where he expressed sentiments that were often reasonable and that thus undermined his case for the fracking ban. I used a few of these quotes in last night’s debate, but not all of them.

Some folks have asked me for copies of those quotes, so I’m reproducing them here, with links to their sources. Read More >>

Muni Broadband Isn't About the Unserved

Posted by Tom Giovanetti | Comments | August 28, 2014

Independent, Technical, Multistakeholder Organizations that Have Become Part of the United Nations

Posted by Tom Giovanetti | Comments | August 26, 2014

In relation to the debate over whether and how the U.S. should hand over control of the root zone (IANA) functions of the Internet to an independent, multistakeholder organization like ICANN, the Obama administration (and many others) have been adamant that they "are not turning the Internet over to the United Nations!" We absolutely will not allow that to happen, they insist.

And I give them credit for wisely and uncharacteristically (for this administration) understanding the problem with turning Internet governance over to the United Nations.

The long-term problem, as I have argued previously, is that independent multistakeholder organizations set up to do technical functions that are of interest to the global community have a habit of getting absorbed into the United Nations system.

Here is a list of such organizations that have ended up as "specialized agencies" in the UN system, despite the fact that there was no compelling reason why that function needed to be subject to the rules and governance of a UN organization. Tourism, really? Read More >>

Piracy Killing Movie Franchises

Posted by Tom Giovanetti | Comments | August 26, 2014

Interesting piece on The Hollywood News website about the impact of piracy on the film production business.

It has to do with the "Kick-Ass" movies, and the fact that there probably won't be any more of them, due (at least in part) to the piracy problem. Actress Chloe Moretz, who played the character "Hit Girl" in the movies, gave an interview:

"Sadly, I think I’m done with the character. Hit-Girl was a very cool character, but I don’t think there will be any more movies. You make these movies for the fanboys, but nowadays everyone seems to pirate them rather than watch them in the movie theatre. KICK-ASS 2 was one of the number one pirated movies of the year, but that doesn’t help us because we need box office figures. We need to prove to the distributors that we can make money from a third and fourth movie – but because it didn’t do so well, we can’t make another one. If you want more than one movie, everyone has to go and see movies at the cinema. It’s all about the the numbers in the theatre." Read More >>

The One-Two Punch Against American Agriculture

Posted by Tom Giovanetti | Comments | August 22, 2014

It’s almost as if it is official U.S. policy to make it difficult for American businesses to succeed.

First and most significantly, we subject American businesses to the highest tax rates among all of our competitors—39.1% when you add in state taxes. That’s significantly higher than the O.E.C.D average of 25 percent, and it’s even higher than the supposedly “high tax European countries”—consider that Belgium (34 percent), France (34.4 percent), and Sweden (22 percent) all have lower business taxes than does the United States.

Then, at least for select industries, we aid their overseas competitors. Through the Export-Import Bank we finance foreign purchases of Boeing jets, which helps foreign competitors of Delta, Southwest, American, FedEx and UPS. We could solve that problem this year by simply allowing Ex-Im to expire.

We allow other of our domestic industries to be exposed to blatant market manipulation and outright attack by our trading partners, particularly in agriculture. Yes, American agriculture policy is a rats nest of loans, supports and protections that are hard to justify in a free-market economy, and conservatives recognize these as market distorting. Of course we should move toward phasing out these protections. Read More >>

Creativity is More than Pushing Buttons

Posted by Tom Giovanetti | Comments | August 7, 2014

The hot story in copyright this week is about Wikimedia (Wikipedia) refusing repeated takedown requests by a photographer because Wikimedia claims that no one owns the copyright to the image. And why does no one own this image? Because a monkey pushed the button on the camera.

You can read the story here—I have no interest in simply retelling the story.

What’s at issue in the story is that, because the monkey pushed the button on the camera, Wikimedia claims that the monkey should own the copyright. But since animals can’t own copyrights, Wikimedia concludes that no one can own the copyright, so the picture must immediately go into the public domain.

In an interview, Wikimedia Foundation’s Chief Communications Officer Katherine Maher said the organization is confident that the legal basis for denying Slater’s request is sound, because the person that takes the photo should own the copyright. But a person didn’t take this one. Read More >>

The Left Bashes, then Copies, Center-Right Institutions

Posted by Tom Giovanetti | Comments | August 5, 2014

There’s a bit of a brouhaha the last couple of days about the discovery of a closed Google group that Left-leaning journalists and activists use to coordinate their messaging.

Which really is of no interest to me whatsoever. I assume many such sorts of coordination and communication among political activists and journalists, which is why I wasn’t at all overwrought a few years ago over the JournoList saga.

But buried in the story is something that I DO find interesting. The progressive Left has this funny habit of denouncing and bashing the institutions of the center-right while at the same time, copying them. Read More >>

So Do We Need Pharmaceutical Innovation, or Not?

Posted by Tom Giovanetti | Comments | August 4, 2014

Today in the Wall Street Journal, there is good op/ed about the threat of Ebola and other infectious diseases that urges us to invest more money in medical innovation.

There's also another op/ed complaining that cutting edge, innovative medical cures are too expensive, and that we need something apparently just short of price controls to do something about it.

So which is it? Do we want pharmaceutical and biotech companies taking risks and innovating new cures, such as Sovaldi, the new cure for hepatitis? Or not?

Ms. Ignagni's piece is particularly egregious. It's part of a campaign that she's behind to get the federal government to forceably lower the price of Sovaldi, a blockbuster new miracle cure for hepatitis C. Note the word "cure."

First, she writes as if concern over high drug prices is a recent phenomenon, which of course it isn't. I've been hearing statists complaining about high drug prices for the 20 years I've been doing public policy. In fact, the first paper I ever edited and published at IPI was on this very topic. The redistributionists have never understood why they can't have all their diseases cured and their pain alleviated without it costing anyone anything. They're always focused on the second order concern--how goods are distributed--without fully appreciating the first order concern--how goods come to be in the first place.

Distributing existing goods is easy--innovating a new product or service that never existed before, now that's impressive. But apparently not to Ms. Ignagni. Read More >>

Piracy and the Small Indie Filmmaker

Posted by Tom Giovanetti | Comments | August 4, 2014

Those who dismiss concerns about copyright piracy always deflect the conversation to the big Hollywood studios, as if piracy only affects extremely wealthy people driving around in Bentleys. It's not surprising that defenders of piracy tend to be class warriors in other areas of politics as well.

But the greatest impact of piracy is on those downstream small businesses and employees who work in the industry. Losses due to piracy, at the margin, affect the number of people hired, how much they are paid, and how many projects are undertaken in the first place.

But then there's the indie filmmaker, for whom the entire project is being done on a shoestring. When everything is being done with marginal resources, marginal impacts have a major impact. The same protections that would protect the major Hollywood studios against rampant piracy would be even more beneficial to the little guys.

There's a very interesting article up on about filmmaker Zak Forsman and the experience he's having with piracy of his new indie film, Down and Dangerous. Read More >>

Distinctive packaging: Private property and a protection for consumers

Posted by Erin Humiston | Comments | July 31, 2014

Shocking Reports Show Great Dangers of Counterfeit Goods

Posted by Erin Humiston | Comments | July 21, 2014

A particularly shocking report comes today from the UK, in which counterfeit wine and liquor are flooding the market, containing dangerous chemicals such as methanol, chloroform, bleach, nail polish remover and anti-freeze. According to the report, up to 2 dozen bottles of vodka were being produced every minute at one counterfeiting site. 

And it’s not just occurring in the UK.  

In the United States, federal agencies have stepped up to identify, intercept, and prosecute criminal activity attempting to import or manufacture fakes in the U.S. to protect innovators and consumers from the dangerous impact of counterfeits.  Read More >>

Giovanetti responds to negative spin on Aereo decision

Posted by Erin Humiston | Comments | July 11, 2014

This week, Sen. Ron Wyden (D-Ore.) told the Washington Post the Supreme Court decision on Aereo will discourage innovation.

But in a recent podcast, IPI president Tom Giovanetti debunks what he calls negative spin regarding the ruling, and says it’s a win for all players in the market because it’s a win for the rule of law. (Click here to listen to the IPI podcast.) Read More >>

Could This Man Be The Next USPTO Director?

Posted by Erin Humiston | Comments | July 3, 2014

Reports indicate President Obama is poised to tap Phil Johnson as the next Director of the United States Patent and Trademark Office.

Currently Senior Vice-President for Intellectual Property Policy & Strategy at Johnson & Johnson, Phil Johnson joined IPI in 2011 at our annual World Intellectual Property Day Forum and spoke on a panel called “Hot Topics in IP.” Click here to watch video of that panel. Read More >>

Export-Import Bank loaning money to drug cartels

Posted by Tom Giovanetti | Comments | June 17, 2014

In an op/ed published Wednesday in the Dallas Morning News I argue that Republicans should let the Export-Import Bank expire instead of reauthorizing it.

In the piece, I mention a charge that the Export-Import Bank may have loaned money to Mexican drug cartels.

Of course, you can't put hyperlinks or footnotes in op/eds. So here's the source of that little factoid from 2007, compliments of the Wayback Machine.

DALLAS - A News 8 investigation has found that a little known government agency may have unwittingly wasted taxpayers money on top of using the funds to support criminal activity.

The probe originally revealed that small business loans sponsored by the Export-Import Bank of the United States were made to non-existing companies for equipment that wasn't even real.

Now, New 8 has discovered that some of the people who got the Ex-Im Bank loans may have drug connections. The $243 million worth of bad loans were originally made to help trade with Mexico.

The loans have been linked to the Juarez drug cartel, which is known for its brutal murders. The cartel killed one dozen people and buried them in a suburban backyard across the border fro El Paso.

Another loan was linked to the Sinaloa drug cartel, whose business is smuggling heroin into the United States.

The federally funded Ex-Im Bank apparently backed loans to people affiliated with both cartels and the Mexican drug trade.

Under the Freedom of Information Act, News 8 asked for all documentation related to defaulted small business loans made to Mexico from 2002 to 2005. Although there were nearly 200 bad loans, so far, information on only 34 cases has been turned over.

But the bank did give a list of the defaulted loans and the names and addresses of the people who got them in Mexico.

"They have drug connections, which is very disheartening to think that the U.S. government is lending money to documented traffickers in the drug trade that are tied into the cartels in Mexico," said Phil Jordan, the former head of the El Paso Intelligence Center for the DEA and Border Patrol in El Paso.

Jordan ran background checks of the borrowers with two federal sources and found borrowers from Juarez and Sinaloa with criminal ties to money laundering, organized crime or drugs in Mexico. Jordan said he was surprised to find that the Ex-Im Bank didn't do similar checks before guaranteeing the loans. Read More >>


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