After 7 months in Luxembourg, where my professional carer has been successfully relaunched, I returned to Portugal for this Easter. It was a time to review family and many friends, to rest and see a bit more of a country that can have many good experiences to offer. I brought back mixed feelings, while it is always pleasing to return home, the contact on the flesh with the present social context was rather depressing. Portugal has changed a lot these past months, the crisis has installed itself and spread like the plague. Most folk are being hit one way or the other and families that seemed to be in a comfortable situation when I left are now facing daunting difficulties. This text is a postcard from my visit to Portugal. It has no real photos, like a black and white documentary about war, I prefer using words to paint an hideous scenery.

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This essay was originally written between December of 2010 and February of 2011. Soon after it was submitted to The Oil Drum, where it underwent a long process of review that greatly improved it; nevertheless it was archived without being ever published. Since its content could have had a negative impact on the scientific career of the folk mentioned, I decided to keep it at bay. One year on it seems now the time to bring it to light.

"Net Energy and Time" is the title of an article by Nate Hagens and Hannes Kunz that attempts to assess how the lifetime of an energy system impacts its EROEI (a digest of this article was published by TheOilDrum). The main objective was to include stochastic risk in EROEI analysis - random or otherwise unpredictable events that may affect the expected output of an energy system. Considering a series of risks of this kind, Nate and Hannes slashed future energy returns, in a way proportional to the system expected lifetime. In parallel, future energy inputs were too reduced as a function of lifetime. The results of this analysis where markedly favourable to Fossil Fuels and especially negative for those systems that require most of the capital investment upfront, as is the case of many Renewable Energies.

This is a review of the "Net Energy and Time" article, pointing the factors that lead to such conclusions.

Last week some very interesting news surfaced in the UK. The Chancellor of the Exchequer, the government member responsible for the budget, whom in the continent we call Finance Minister, has presented some alternative ideas for the financing of his government. George Osborne of his name, seems to be interested in issuing government debt instruments, called gilts in Britain, of 100 years maturity. Rare, though nothing unheard of. But Mr. Osborne seems willing to go even further and commanded his staff to study the issuing of infinite maturity gilts. This simply means that such instruments cannot ever be redeemed, they perpetually pay interest to their holder. The media both in Britain and the continent reacted with bewilderment to the news, showing their usual struggle to cope with out of the ordinary news.

Update [2012-3-22 5:21:9 by Luis de Sousa]: Now with the English corrected, thanks to Frank.

Paul Krugman was in Lisbon last week to receive three honoris causa PhD and openly advise Greece to leave the Economic and Monetary Union, something taken as a smooth advice to Portugal in the same direction. This is something that can only be accomplished by using the Lisbon Treaty mechanism to leave the EU. One must simply acknowledge this reality: many people would like to see the shattering of the Eurozone and the EU. Some of them wish it for pure xenophobic reasons; others would take it as the ultimate proof that the social state doesn't work. Others simply do not want what they see as a direct concurrent to the US dollar ever to succeed. And others still, simply do not understand the EU, and particularly the Eurozone. I like to think that Krugman, someone who contributed so much to Complexity Science, one of the fields on which I do research, falls in the latter class.

Afonso de Albuquerque arrived at the Indian Ocean in 1506 commanding a squadron of five war vessels integrated in Tristão da Cunha's Armada. In the summer of 1507, after the conquest of Socotra, the Armada's main objective, Afonso de Albuquerque parted on its own commanding a fleet of six vessels and 500 marines to take the easternmost island at the entrance of the Persian Gulf, called by local folk Hormuz. Defeating a garrison of 15 000 men with his artillery, Albuquerque took Hormuz and commissioned the construction of a fortress. Though not exactly making the narrowest point of the passage between the Persian and Oman Gulfs, this island would eventually lend its name to one of the most important choke-points of the Indian Ocean, at the time the principal commercial pathway of commodities from Asia to Europe. With him Afonso de Albuquerque had brought from Lisbon a sealed letter from the King appointing as Vice-King to the East Indies, replacing Francisco de Almeida, whose strict naval prowess strategy didn't fancy the territory thirsty King. A period of indecision ensued, with most naval officers in the region initially refusing Albuquerque's rule and Hormuz was lost. In 1515, in his final days as Vice-King, Afonso de Albuquerque stormed Hormuz once again, taking it for good without military resistance; the fortress, that lasts to this day, was finally completed, sealing the command over the commerce in the region.

After the Portuguese came the Persians and then the English; the importance of the fortress waned, but of the Strait of Hormuz itself, if anything, it has only increased. Commodities flow in the opposite way these days, but unlike the luxury and exoticism of the past, today they are vital inputs to the world economy.

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In Computing circles there is this old concept of Deadline Oriented programming. Just a metaphore for those moments when one has to make things work in very creative ways to meet that dreaded day of delivery. In my Faculty years I used such programming paradigm in a few occasions.

These days such practices are imposed by the vicissitudes of the daily routine. Today closes the Consultation on Renewable Energy and up to this evening I hadn't written a single sentence. A deadline oriented answer was in order, with the main topics laid down in telegraphic manner. Below the fold is the "source code".

So its cold. Very cold. The daily morning walk from home to office is becoming a considerable challenge, no matter the amount of clothing, there's always that bit of skin exposed to the glacial breeze. At sun rise the thermometer can be as low as -15º, with this temperature the light wind cuts like a knife. There's a good side to it though, the anti-cyclones the Arctic has been presented us with have cleared the skies. Fiat lux, after months of grey weather it is like a balsam for your soul, especially with all the snow and ice still covering the ground, the brightness immerses you.

And in what is now becoming an yearly routine the gas supplies from Russia got disrupted once more. This time there's no fundamental economic or political dispute, no bad tempered leaders or tough negotiations, it is simply too cold. Russian stakeholders had to choose between honouring their contracts or let their folk die of hypothermia. I guess it wasn't a hard choice.

Nevertheless, some stakeholders seem to be living in a parallel universe, where none of this is real.

Last week I went to Longwy's university campus, the Institut Universitaire de Technologie (part of the University of Lorraine), for a conference on renewable energies and energy efficiency. It was an event integrated in an InterReg project for innovation, called Tigre, gathering institutions from Lorraine, Saarland, Luxembourg and Wallonie. It kicked off with a session on Tri-generation, and went on with parallel sessions on waste Biomass and on Hydrogen and Fuel Cells. I opted for the later, feeling really curious on the present state of research on this field.

Cesare Marchetti proposed hydrogen (H2) as a large scale energy vector almost fifty years ago. Then the concern was mainly to find a simple enough way to feed transport systems with what seemed to be a fountain of energy about to come from the expanding Nuclear park. The Nuclear dream is largely gone, but hydrogen lives on. Is it about to come true as a piece in the transition puzzle to a post-fossil fuel world? That's what I was expecting to know.

A week ago we had another strike by the rating agencies, this time Standard and Poor's. Closing a week that had been relatively successful for the European debt market, the continent was once more bombarded with a swarm of downgrades. Nine states saw their grade derided, with France and Austria loosing AAA status and Italy kicked out of the A area into BBB+. Over the weekend we had the usual cries from political leaders, employing hard words but soft action. Nevertheless this week further signs of relief in the debt market came about: Portugal was able to auction 11 month maturity bonds with interest below 5%, better than before the aid request, Austria was able to auction 50 year bonds for what it seems only the second time in its history and interest rates in the secondary market for Italian bonds have entailed a slow but constant decline. The defense against the rating agencies put up by the ECB seems to be finally yielding results.

But something less visible has remained from last week's attack: the analysis upon which Standard & Poor's supposedly based its downgrades. The company vised particularly the blind Austerity policy followed by the Council, joining the body of voices claiming it is leading Europe to a dead end. This is an interesting and useful outcome of the unsuccessful strike, that echoed through the last days. Le Monde published a wrap up that is worth looking closer.

This week a friend of mine asked about oil prices for 2012. As usual by this time of the year newspapers and investors alike thrive to have an outlook for the following twelve months, more or less trying to devise how their portfolios may fare. I always find this a bit awkward, the dynamics underlying markets like that of crude oil have little relationship to the rhythm of the Earth's revolution around the Sun. But somehow there is this idea that markets have a sort of fresh start in the beginning of a new year. Hence, usually well informed people put out their forecasts around this time, so as to prove how well informed they are. It just happens that for 2012 the most disparate projections exist, either of a fall in oil prices or of a price boom.

Instead of pointing out who is wrong or is right in this story, the importing thing is to understand that both visions can be correct, both can develop through out 2012.

The folks at the Energy Commission are already thinking about Energy Policy beyond 2020. After the 20-20-20 targets there is a much longer term goal of reducing CO2 emissions by over 85% up to 2050. So right now the Energy Commision is starting to think the policies that should further reduce our emissions in the decade between 2021 and 2030. In this context they are asking everyone to participate in a public consultation, with the main goal of understanding if the policies driving us up to 2020 are still viable for the decade ahead. To make things easy the Energy Commission provides a convenient online form. The deadline for answering is the 7^th of February.

Between the last log on Iran and yesterday the Rial lost 10% of its value, just to regain about the same terrain today. Meanwhile there's an ever growing bellicose discourse on the naval chess around the strait of Hormuz. In this log I'll look into Iran's economy and try to understand the possible consequences of the sanctions imposed last weekend by the US and to be followed suit by the EU. It doesn't pretend to be in any way a thorough account of Iran's social-economic fabric, simply a collection of points that are relevant in the present crisis. The data presented here was collected mostly from Wikipaedia and the World Factbook.

Last week the French newspaper Le Monde published the English version of an exclusive interview with Olivier Rech, former economist of the International Energy Agency (IEA). Between 2006 and 2009 he was responsible for the Agency's petroleum production models, that make the basis of the reference publication World Energy Outlook (WEO), released every year in November. This document outlines the energy scenarios on which every government of the OECD builds up their energy policies. Government agencies, research institutes and private companies also rely by and large on the IEA's publication. Remarkably, the words of Rech today lay out a scenario entirely different from those the IEA has been publishing.

I had read en passant a short news byte last week on some sort of unrest in Iran, but at the time I couldn't dive into it. Yesterday I stumbled upon an amazing thread at the Kitco fora: a frightened, but courageous, civil engineer called Iman accounts in the first person the rapid deterioration of the Iranian government's lid on its currency. What is happening in Iran is not just social unrest, nor just a run on banks, it is something way more serious.

Just a few days ahead of the last EU Summit, Henry Kissinger commented that Europe finally had a phone number: Merkel's. He is wrong in my view, the prevailing reluctance to set up eurobonds and a federal budget retain all effective power concentrated on the ECB. This agreement (not yet clear if the so called "compact" will result on a new treaty or not) also delegates the management of the EFSF and its successor, the ESM, on the ECB and broadens the economic governance dictated by this institution to the "outs”. Unlike all the previous Summits that were supposed to save the Eurozone, this one will go into the annals of History, for one of the states opted to stay out for good: the UK. With the dust settling it is time to have a few reflections on what took place during the dawn of the 9th of December, 2011.

Days ago an Oil industry service company published an article disguised as a journalistic piece with some interesting remarks. It makes me wonder if it refers to same World I live in.

Platts
06-12-2011
Peak oil debate losing relevance due to new upstream technology: Repsol CEO

The debate over whether the world's reserves of hydrocarbons have now peaked and are in decline has lost relevance over recent years as new technology allows oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol Antonio Brufau said Tuesday.

On the 23th of November the French government announced a 2 million € procurement programme for technical support on its growing open source software infrastructure, today encompassing dozens of thousands of computers spread by ministries, courts, security forces and other central administration services. Days later at the Portuguese Parliament the communist party (PCP) put up for voting a proposal to prevent the acquisition of any new commercial software license, for which an open source or free distributable alternative exists. According to estimates by the communist parliamentary group, this proposal would translate into savings of some 70 million € in 2012 alone, subtracting to the 100 million € assigned in the state budget for the purpose. The proposal was rejected with the votes against from the government coalition of liberals (PSD) and conservatives (CDS); the socialist party (PS) abstained. The arguments vented by the media for this rejection where three: difficult transition for users and platforms, technical support costs and security. It is worth reflecting somewhat on each of these arguments.

One of the projects I'm working on in my new job lead me to a 3 day visit to Aberdeen for a regular biannual partner meeting. It was my first time in Scotland, hence there was much learn. I also had the time for a swift visit to a good friend of mine, Euan, whom lives in the city and I get to see once a year or so.

With the due apologies for the lousy cell phone photos, the camera didn't make it there.

Now here's an article that connects many dots on Nuclear energy.

LEAP: After Fukushima

For the sake of completeness, the title of this exercise in political anticipation applied to nuclear power should also include two other factors besides Fukushima, namely the Internet and the global energy crisis which is one of the elements of the global systemic crisis we are experiencing. In effect, it is the combination of these three factors which, according to LEAP/E2020, radically and permanently alters the whole decision-making process on nuclear power that we have known since this source of energy took its first steps after the Second World War. This decisional "revolution" will, during the course of the current decade, equally affect the methods to decide or, on the contrary, block the development of nuclear power, as the room for maneuver for national players in these decisions and, finally, the players themselves. Indeed, the "nuclear power policy makers", historical pillars of the development of this energy from the 1950s, just like their fierce rivals the environmentalists who emerged in the 1970s, will quickly see that their monopoly of the debate on this subject is coming to end. Fukushima, the Internet and the crisis are in the course of shattering the nuclear debate's traditional expertise, limited to mode "pro" or "anti". The implications of such an upheaval for the various industry players and policy makers faced with choices for national energy are on an unprecedented scale since they involve a whole segment of global energy production.

We are living a debt crisis in Europe; some states are presently unable to finance themselves on the regular credit markets. This state of things has provide fertile ground to question the Social State and force on these ailing states a new socio-economic paradigm. This has been achieved by masking the real problems Europe is living and falsely characterizing the economic difficulties of the weakest states. Some days ago I was sent a link to an article by Der Spiegel on Portugal that oincluded this paragraph:

On the way there, a two-lane bike path hugs the coastline for several kilometers between Cascais and Guincho. Special streetlights spaced only 50 meters apart illuminate the brownish-red special asphalt at night. But cyclists are rarely to be found along this route, even during the day, because the wind is simply too strong.

In this log entry I'll deal with these and other misconceptions about Portugal: structural funds, football stadia, highways. None of it is good, but none of it is the cause of today's problems. Debt has become an obsession that is holding back the move forward.

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