martes, 28 de diciembre de 2010

Economic Optimism? Yes, I’ll Take That Bet

FINDINGS

Economic Optimism? Yes, I’ll Take That Bet

By JOHN TIERNEY

Published: December 27, 2010

Five years ago, Matthew R. Simmons and I bet $5,000. It was a wager about the future of energy supplies — a Malthusian pessimist versus a Cornucopian optimist — and now the day of reckoning is nigh: Jan. 1, 2011.

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The bet was occasioned by a cover article in August 2005 in The New York Times Magazine titled “The Breaking Point.” It featured predictions of soaring oil prices from Mr. Simmons, who was a member of the Council on Foreign Relations, the head of a Houston investment bank specializing in the energy industry, and the author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.”

I called Mr. Simmons to discuss a bet. To his credit — and unlike some other Malthusians — he was eager to back his predictions with cash. He expected the price of oil, then about $65 a barrel, to more than triple in the next five years, even after adjusting for inflation. He offered to bet $5,000 that the average price of oil over the course of 2010 would be at least $200 a barrel in 2005 dollars.

I took him up on it, not because I knew much about Saudi oil production or the other “peak oil” arguments that global production was headed downward. I was just following a rule learned from a mentor and a friend, the economist Julian L. Simon.

As the leader of the Cornucopians, the optimists who believed there would always be abundant supplies of energy and other resources, Julian figured that betting was the best way to make his argument. Optimism, he found, didn’t make for cover stories and front-page headlines.

No matter how many cheery long-term statistics he produced, he couldn’t get as much attention as the gloomy Malthusians like Paul Ehrlich, the best-selling ecologist. Their forecasts of energy crises and resource shortages seemed not only newsier but also more intuitively correct. In a finite world with a growing population, wasn’t it logical to expect resources to become scarcer and more expensive?

As an alternative to arguing, Julian offered to bet that the price of any natural resource chosen by a Malthusian wouldn’t rise in the future. Dr. Ehrlich accepted and formed a consortium with two colleagues at Berkeley, John P. Holdren and John Harte, who were supposed to be experts in natural resources. In 1980, they picked five metals and bet that the prices would rise during the next 10 years.

By 1990, the prices were lower, and the Malthusians paid up, although they didn’t seem to suffer any professional consequences. Dr. Ehrlich and Dr. Holdren both won MacArthur “genius awards” (Julian never did). Dr. Holdren went on to lead the American Association for the Advancement of Science, and today he serves as President Obama’s science adviser.

Julian, who died in 1998, never managed to persuade Dr. Ehrlich or Dr. Holdren or other prominent doomsayers to take his bets again.

When I found a new bettor in 2005, the first person I told was Julian’s widow, Rita Simon, a public affairs professor at American University. She was so happy to see Julian’s tradition continue that she wanted to share the bet with me, so we each ended up each putting $2,500 against Mr. Simmons’s $5,000.

Just as Mr. Simmons predicted, oil prices did soar well beyond $65. With the global economy booming in the summer of 2008, the price of a barrel of oil reached $145. American foreign-policy experts called for policies to secure access to this increasingly scarce resource; environmentalists advocated crash programs to reduce dependence on fossil fuels; companies producing power from wind and other alternative energies rushed to expand capacity.

When the global recession hit in the fall of 2008, the price plummeted below $50, but at the end of that year Mr. Simmons was quoted in The Baltimore Sun sounding confident. When Jay Hancock, a Sun financial columnist, asked if he was having any second thoughts about the wager, Mr. Simmons replied: “God, no. We bet on the average price in 2010. That’s an eternity from now.”

The past year the price has rebounded, but the average for 2010 has been just under $80, which is the equivalent of about $71 in 2005 dollars — a little higher than the $65 at the time of our bet, but far below the $200 threshold set by Mr. Simmons.

What lesson do we draw from this? I’d hoped to let Mr. Simmons give his view, but I’m very sorry to report that he died in August, at the age of 67. The colleagues handling his affairs reviewed the numbers last week and declared that Mr. Simmons’s $5,000 should be awarded to me and to Rita Simon on Jan. 1, but Mr. Simmons still had his defenders.

One of his friends and fellow peak-oil theorists, Steve Andrews, said that while Mr. Simmons had made “a bet too far,” he was still correct in foreseeing more expensive oil. “The era of cheap oil has ended,” Mr. Andrews said, and predicted problems ahead as production levels off.

It’s true that the real price of oil is slightly higher now than it was in 2005, and it’s always possible that oil prices will spike again in the future. But the overall energy situation today looks a lot like a Cornucopian feast, as my colleagues Matt Wald and Cliff Krauss have recently reported. Giant new oil fields have been discovered off the coasts of Africa and Brazil. The new oil sands projects in Canada now supply more oil to the United States than Saudi Arabia does. Oil production in the United States increased last year, and the Department of Energy projects further increases over the next two decades.

The really good news is the discovery of vast quantities of natural gas. It’s now selling for less than half of what it was five years ago. There’s so much available that the Energy Department is predicting low prices for gas and electricity for the next quarter-century. Lobbyists for wind farms, once again, have been telling Washington that the “sustainable energy” industry can’t sustain itself without further subsidies.

As gas replaces dirtier fossil fuels, the rise in greenhouse gas emissions will be tempered, according to the Department of Energy. It projects that no new coal power plants will be built, and that the level of carbon dioxide emissions in the United States will remain below the rate of 2005 for the next 15 years even if no new restrictions are imposed.

Maybe something unexpected will change these happy trends, but for now I’d say that Julian Simon’s advice remains as good as ever. You can always make news with doomsday predictions, but you can usually make money betting against them.

Living and Studying Alopecia

By CLAUDIA DREIFUS

Published: December 27, 2010

REPRINTS

Angela Christiano, 45, an associate professor of dermatology and genetics at Columbia University Medical Center, studies hair. Last summer, she announced the discovery of the genes implicated in alopecia areata, the hair-loss disease that she herself suffers from. We spoke for two hours in her Washington Heights laboratory and then later on the telephone. An edited version of the two conversations follows.

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Ruth Fremson/The New York Times

HAND OF FATE Angela Christiano studied alopecia soon after her diagnosis.

Dr. Angela Christiano on living with hair loss and why treating alopecia is more than just treating a cosmetic issue.

Consults Blog: Expert Answers on Alopecia (December 27, 2010)
Well Blog: A Hair Loss Researcher With Purpose(December 27, 2010)

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Q. When did you first learn that you had alopecia?

A. In 1995, a time of big transitions in my life. After doing highly successful postdoctoral research on genetic blistering skin diseases at Jefferson Medical College, I’d arrived here at Columbia to start my own laboratory. I had just turned 30. I was getting a divorce. When you start your first lab, a researcher is expected to find something different from their postdoc work. For my first six months here, I sat thinking, “What am I going to do when I grow up?”

In the midst of all this, I went to a beauty parlor and the stylist said: “What’s happened here? You have a big patch of hair missing from the back of your head.” I ignored that. But the next day at the lab, I asked a colleague to take a look. She let out a bloodcurdling scream: “You have a huge bald spot!”

I immediately went over to the clinic here. They said: “Oh, you have alopecia. There’s not much we can do to treat it.”

Q. Alopecia is genetic. Do you have relatives with it?

A. My mom and her mother had hair loss from a young age. I have a cousin also who lost all of her hair. Ironically, hair is a big part of my family’s life. My grandfather was a barber in Italy and then later in New Jersey. And my mother was a hairdresser before retiring. I’m the first person in my family to go to college and graduate school: Rutgers. My mother now says, “You’re just another hair person — you just do it differently.”

Q. How did this history lead to your research?

A. In the months after my diagnosis, I went through panic and shock. Every morning, I’d wake up wondering if it was all going to fall out. And new spots did show up. I’d cover them with the most careful combing. Then there’d be a new one. It was like plugging holes in a dam. It finally stopped after two years.

I began reading all the papers on alopecia. In my training, nobody had talked much about hair. I thought maybe the reason was because it had all been figured out. When I started digging, I saw the opposite was true. I thought, “Maybe this is the hand of fate directing me to a topic? This is a wide-open field.” If I could identify the genes involved in alopecia, then maybe we could figure out what they did, and that might be the way to a treatment.

Having the chance to work it through in the lab was one of the things that kept me sane in this period of my life. The disease was very destabilizing.

Q. Why had hair loss been so minimally researched?

A. I suspect it’s because it’s seen as a “cosmetic” problem. It’s the life-threatening diseases that get priority — and money. The other problem was that in 1996, the tools weren’t ready. The Human Genome Project hadn’t finished its work. There were no road maps. Nobody had yet solved a complex disease where multiple genes are involved, which is what alopecia is.

Q. So how’d you overcome that?

A. You could see the tools were on their way. Every year, you’d go to conventions and there was excitement about what was coming. My plan was to get all the ducks in a row for when the genome was mapped. While we waited, we tried to lay some groundwork by trying to find single genes that control the normal hair growth cycle. By looking for rare hair-loss diseases where only one gene was the factor, we learned some of that. My lab found six such genes.

The other thing we did was to line up a patient registry for alopecia. That way, when the time was right, we could compare the genomes of people with the disease to those of people without it. An advocacy group, National Alopecia Areata Foundation, N.A.A.F., helped us connect with patients.

Q. When were you able to actually do the study?

A. In 2008. We published our findings this past July. Ours was the first study of alopecia to use a genome-wide approach. By checking the DNA of 1,000 alopecia patients against a control group of 1,000 without it, we identified 139 markers for the disease across the genome.

We also found a big surprise. For years, people thought that alopecia was probably the stepchild of autoimmune skin diseases like psoriasis and vitiligo. The astonishing news is that it shares virtually no genes with those. It’s actually linked to rheumatoid arthritis,diabetes 1 and celiac disease.

Q. What will this new information mean for patients?

A. It should have amazing benefits. There are existing drugs on the market for several of these diseases. Based on the overlapping genetics, we have a chance of pushing forward with clinical trials for potentially effective drugs much sooner than we’d thought. One approach would be as a new indication for an already approved drug.

Going the other way, our research opens up possibilities for the three related diseases. With them, till now it’s been hard to study aspects of how the immune response goes wrong because it is difficult to biopsy the pancreas or a joint. But now researchers might be able to use a patient’s skin, a much more accessible organ.

Already, the finding has helped with diagnosis. At Columbia, we have large clinics for diabetes and celiac disease. Since we’ve published our paper, those clinics are asking patients, “Have you experienced hair loss?” About 10 percent say, “Oh, yes, I lose hair in clumps.”

Q. What does it feel like to have accomplished this?

A. It’s wonderful, of course. This summer, I spoke at the patient conference of N.A.A.F. and told the young people there, for the first time, about their genes. Before I could finish my talk, they gave me a standing ovation. I was in tears. Many of them later said, “We wouldn’t wish this on you, but we’re glad you got this disease.”

I understood what they meant. Without it, a serious geneticist might never have given their attention to what was thought of as a cosmetic disease.

A version of this interview appeared in print on December 28, 2010, on page D2 of the New York edition.

A Battle Over Uranium Bodes Ill for U.S. Debate

Matthew Staver for The New York Times

Craig Pirazzi, an opponent of plans for the mill in Colorado, said, “Our health, our air, our water is going to be affected by it.”

By KIRK JOHNSON

Published: December 26, 2010

REPRINTS

NATURITA, Colo. — The future of nuclear power in America is back on the table, with all its vast implications, as global warming revives the search for energy sources that produce less greenhouse gas.

A blog about energy and the environment.

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Matthew Staver for The New York Times

Reminders of the perils of uranium are evident in Colorado.

But in this depressed corner of western Colorado — one of the first places in the world that uranium, nuclear energy’s primary fuel, was ever dug from the ground in industrial scale — the debate is both simpler and more complicated. A proposal for a new mill to process uranium ore, which would lead to the opening of long-shuttered mines in Colorado and Utah, has brought global and local concerns into collision — jobs, health, class-consciousness and historical memory among them — in ways that suggest, if the pattern here holds, a bitter national debate to come.

Telluride, the rich ski town an hour away by car and a universe apart in terms of money and clout, has emerged as a main base of opposition to the proposed mill, called Piñon Ridge, which would be the first new uranium-processing facility in the United States in more than 25 years if it is approved by Colorado regulators next month.

To residents here like Michelle Mathews, the fact that many opponents of the mill hail from Telluride is a crucial strike against their arguments.

“People from Telluride don’t have any business around here,” said Ms. Mathews, 31, who works as a school janitor and ardently supports the idea of bringing back uranium jobs. “Not everyone wants to drive to Telluride to clean hotel rooms.”

Here in Naturita and the cluster of tiny communities in and around the Paradox Valley, where the mill could be built (cumulative population about 2,000), people disagree not just about the wisdom of the mill, but about whether uranium, laid down here in tufts of volcanic ash more than 100 million years ago, was a blessing or a curse. Minerals found in association with uranium, especially vanadium, which is used in hardening steel, sparked the first real rush in the 1930s; uranium for bombs and energy then followed in a stuttering pattern of boom and bust into the 1980s, when the nation’s nuclear energy program mostly went into mothballs.

Opponents say that the nostalgia many residents here cherish about the boom years is the product of willful forgetfulness about the well-documented cancer deaths and environmental destruction the uranium mines produced. They also say that the mill company is cynically exploiting the idea of a return to simpler times.

“They say it’s going to be different this time around,” said Craig Pirazzi, a carpenter who moved to the Naturita area from Telluride a few years ago and is now a member of the Paradox Valley Sustainability Association, which opposes the mill. “But our opposition to this proposal is based on the performance of historic uranium mining, because that’s all we have to go on — and that record is not good.”

Supporters, meanwhile, say that the opponents of Piñon Ridge are guilty of promulgating ignorant fears about something they do not understand.

Even the question of who has a right to speak up has become a point of contention. Is the mill purely a local concern in a sparsely populated area, or a broader regional issue that would affect people much farther away, through, say, radioactive dust particles that might be thrown aloft?

“They’re saying not in my backyard — now how big is their backyard?” said George Glasier, a local rancher and investor who founded Energy Fuels, the company proposing the mill, and is now a stockholder and consultant. Energy Fuels is a publicly traded company based in Canada; a United States subsidiary would operate the mill.

A study commissioned by Sheep Mountain Alliance, the main opposition group, of which Mr. Pirazzi is also a member, concludes that the backyard for Piñon Ridge would in fact be huge — far bigger than proponents suggest. The now-closed uranium mines that would supply the $175 million mill, company officials have said, extend out 100 miles or so, which means that delivery trucks would travel on narrow country roads, stirring up dust that the study said could end up in the snowpack and water supply all over the region.

“In one aspect we’re being nimby’s by saying we will be affected by the negative aspects of this,” Mr. Pirazzi said. “But that is a valid concern — our health, our air, our water is going to be affected by it, and we have every right to protect our property values and our health.”

A key underlying dynamic of the discussion is that this area has often been out of sync with the national economy.

When much of the rest of the nation was suffering in the Great Depression in the 1930s, for example, miners and their families here prospered as the military bought vanadium.

Another boom came in the 1950s, during the cold war, in uranium for bombs. The economy surged again in the 1970s as the energy crisis renewed enthusiasm for nuclear power — a period that ended in tears with reactor disasters at Three Mile Island in Pennsylvania in 1979 and Chernobyl in Ukraine in 1986.

The crash after that was utter and profound, as plans for reactor plants all over the country were canceled. Mines and mills across the West, seeing demand for nuclear fuel dry up, closed down as well. Today only one uranium mill in the United States is fully operational, in Blanding, Utah.

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Matthew Staver for The New York Times

Nucla, Colo. is among the towns affected by the boom-and-bust cycle of the uranium economy.

Bust times, in turn, put the local economy even more in thrall to Telluride, which began building out as a ski town in the 1980s.

“There were probably 300 men going to Telluride to do carpentry,” said David Helkey, 50, a mechanic who commuted to Telluride for years.

Postrecession, Telluride’s construction-driven second-home market is not what it was either, and for many residents, that has made the mill and the idea of reopened mines all the more attractive.

“Our economy just totally tanked,” Mr. Helkey said.

Other residents here are fatalistic. Hazards or no, they say, uranium is the hand that geology dealt this area. Most supporters of the mill also say they believe officials from Energy Fuels who say that tighter regulation would make everything different.

“It’s safer now,” said Sherri Ross, who works the front desk at the Ray Motel in Naturita, and spent her early childhood in Uravan, a mill town about 15 miles from here that was so contaminated with radiation by the 1980s, when the mill closed, that the whole town was razed and mostly entombed. Ms. Ross, 51, said her father died of cancer that she attributes partly to radioactive dust exposure — and also to his smoking — but wholeheartedly supports uranium’s return.

The roughly 300 new jobs that Energy Fuels officials project, mostly in reopened mines, would give the region an economic lease on life, she said.

Other veterans of uranium’s past are wary, by dint of experience.

Reed Hayes, 73, said he is still haunted by the night in July 1967, when he was working at a mill in Moab, Utah, and fell off a catwalk into a caustic vat of refined uranium pellets, called yellowcake, and acid. He quit a month later, but has suffered ever since, he said, with rashes on various parts of his body, including sometimes even inside his mouth.

“We were told that the uranium would never hurt us,” said Mr. Hayes, who has struggled for years to get compensation. “But I’ve learned a whole lot about it — that it’s hurt a lot of people and killed a lot of people.”

And it also changed every community it touched. Moab was once prime peach-growing country, for example — about 40,000 trees, including 2,000 owned by Mr. Hayes’s father, graced the town. It all went in the early 1950s as the orchards were chopped down to house uranium workers.

Gesturing to the three stately peach trees growing behind his house in the Paradox Valley, Mr. Hayes said, “We raised Elbertas. That’s what I have here, too.
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