The End of Pensions

Earlier this month, Delphi sought protection under the bankruptcy code - the largest such filing ever in the auto industry. It followed by a few weeks the Chapter 11 filings of Delta Air Lines and Northwest Airlines. The three filings have blown the lid off America's latest, if long-simmering, financial debacle. It is not hedge funds or the real-estate bubble - it is the pension system, both public and private. And it is broken.

The amount of underfunding in corporate pension plans totals a staggering $450 billion. Public pensions are underfunded by a total of at least $300 billion and arguably much more. While governments have been winking at these deficits for years, they are now becoming intolerable burdens for taxpayers. In San Diego, pension abuse has effectively bankrupted the city.

If the pension system continues to wither, it is not hard to envision a darker future in which many of the elderly would be forced to keep working to stave off poverty. The tough medicine favored by the Bush administration, which would eliminate loopholes in the system as well as much of the subsidy that now exists in the insurance system, would lead to more companies freezing their plans or leaving the system outright.

It would be nice to think that reform would include a future for pensions, but on the private side at least, it is doubtful. As Delphi's Miller put it simply: "A pension plan makes no sense in today's world. It's not wise for a company to make financial promises 40 or 50 years down the road."

The Mighty Amazon River

peakoil.com -> smh.com.au :

A state of emergency has been declared in the Amazon River basin, which is suffering its worst drought in 42 years. More than 1000 towns and hamlets that rely on the river for transport have been cut off as water levels fall, making the river unnavigable. Several major tributaries, as well as parts of the main river itself, contain only a fraction of their normal volumes of water, and lakes are drying up. The Amazon is the second-longest river in the world, after the Nile, but discharges far more water at its mouth than any other.

"This drought and its effects are really shocking," said Carlos Rittl, Greenpeace Brazil's climate campaigner. "Towns are lacking food, medicines and fuel because boats cannot get through." Greenpeace blames deforestation and climate change for the drought. "The Amazon is caught between these two destructive forces, and their combined effects threaten to flip its ecosystems from forest to savannah," Mr Rittl said.

(2005-11-01 17:27:07 SGT) [Env] Permalink

China's Next Big Boom Could Be the Foul Air

energyresources -> nytimes.com :

China, it seems, has reached a tipping point familiar to many developed countries, that have raced headlong after economic development only to look up suddenly and see the environmental carnage. China is already the world's second-biggest producer of greenhouse gas emissions and is expected to surpass the United States as the biggest. Nor does China's air pollution respect borders: on certain days almost 25 percent of the particulate matter clotting the skies above Los Angeles can be traced to China, according to the United States Environmental Protection Agency.

The environmental problems are begetting social and economic problems. Violent riots have erupted in the countryside over contaminated water, stunted crops and mounting health woes. Roughly 70 percent of China's rivers and lakes are polluted. In cities, people drink bottled water; in the countryside, most people are too poor to pay for bottled water, so they boil polluted water or simply drink it.

The political and practical obstacles are formidable. Politically, the Communist Party has based its legitimacy on delivering economic growth : high growth is needed simply to keep unemployment in check, and top leaders fear that a slowdown could lead to social instability.

Could anyone buy Exxon?

energyresources -> reuters.com :

Analysts on Monday scoffed at a bid by an unknown Chinese company to buy Exxon Mobil Corp. for $450 billion, but it did raise a question: Is there anyone out there who could afford the gargantuan oil company?

Even if the potential buyer were not willing to pay any premium for the world's largest publicly-traded oil company, any deal would still cost more than $355 billion, not the kind of cash most companies - or countries - have on hand.

(2005-11-01 16:19:14 SGT) [Biz] Permalink

Record profits at oil companies

thewatt.com :

I'm sure it's not news to anybody, but oil companies are making record profits. Exxon Mobil profits in Q3 of 2005 were up 75% over the same time a year ago. Exxon reported $9.9 billion in profits, Shell reported $9.03 billion in profits (up 68%) and BP recorded $6.53 billion in profits (up 34%). Exxon's sales of $100.72 billion were the highest in a quarter by any US company ever. Exxon brought in $7.3 billion from oil and natural gas production, $2.1 billion from refining and $472 million from its chemical business. This is what $9.9 billion can buy you.

Oprah Winfrey talks global warming

energybulletin.net -> scarletalert.blogspot.com :

Today (27 October 2005), Oprah brought global warming to the average American household. After giving away $100,000 to two women who turned in a man charged with child abuse, Oprah welcomed Leonardo DiCaprio on to talk about global warming.

First she and Leonardo attempted to put into normal-speak an explanation of global warming, and why we should worry about it. The topic of peak oil (without calling it that) also came up, as our dependence on oil was named the #2 cause of global warming (after coal), and that this oil was running out.

(2005-11-01 15:58:21 SGT) [Env] Permalink

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