Thursday, October 30, 2008

India, Inc.

Our Changing World Part V

Much has been written about “US jobs going overseas.” Usually the context of this observation is negative – it’s seen as only a downer for our economy. However, as Christians, we can rejoice that hundreds of thousands of poor people in other countries are benefitting from these job exports –people made in the image of God are climbing out of abject poverty and moving towards self-sufficiency and basic prosperity. And trust me, they know and appreciate that these jobs are coming from America, which means they are more open than before, to hear about the gospel of Jesus Christ, which they often associate with America.

Nowhere has this move towards basic prosperity been more dramatic than in the cities of India. And the cities of India are HUGE – imagine a skyline not that much different that Denver’s, with an urban “sprawl” about the size of metro Denver’s, but with a population of 20 million people!
Welcome to New Delhi, India. International flights pour in and out of their airport as if on a conveyor belt, and modern domestic flights (with Boeing jetliners) will whisk you out into the interior. Yes, you can take a train, but India is huge – the seventh largest nation by land mass, and second only to China in population (with a little more than a billion.) India’s economy ranks 4th in the world in “gross domestic product,” but with that vast population, a more revealing figure would be their ‘per capita income” which is 165th – that’s way down the poverty scale.

Still, India, Inc, (the slang term for their burgeoning globalized economy) is booming. When I was there two years ago, the English language papers were filled with ads that said, “If you can read this ad, we have a job for you!” Most of those jobs paid way less than $10 per hour, but in India, that’s an upper middle class salary!

So, other than having a bunch of new jobs, courtesy of the Red, White, and Blue, why is India so important in our changing world?

First, because of its recent history. Prior to World War Two, India was still a British Colony. Under Mohandas Gandhi and other leaders, independence finally came in 1947. As a “non-aligned” nation during the cold war, it was courted by Russia, who supplied much of India’s military needs. India is not a part of NATO, nor the European Union, although they were a founding member (and very active) with the UN.

Second, it’s military: India is arguably the third largest military on the planet, behind the USA and Russia.
Third, it’s resources. Per Wikipedia, “India has also become a major exporter of software as well as financial, research, and technological services. Its natural resources include arable land, bauxite, chromite, coal, diamonds, iron ore, limestone, manganese, mica, natural gas, petroleum, and titanium ore.”
Fourth, they are finding innovative uses for their large pool of educated, English-speaking people. They “export” medical and computer personnel all over the world. Their newest ting: “Medical Tourism.” British health insurance companies will buy their members two round trip business class tickets to India, have a limousine take them from airport to hospital, where their surgical needs are met by doctors trained to the same standards as British doctors – but all this at a fraction of the cost! Imagine flying to Delhi for a hip replacement, complete with a side trip out to the Taj Mahal.
Fifth, and finally – because of their spiritual openness. India IS a sub-continent full of Hindus, and it is surrounded by Muslims. Christians represent only a small percentage, but are active and growing. The ancient “caste” system is still in place, but recently, a vast move among the “Dalit” class (the untouchables) has set off alarms among the other religions. But hey, why be an “untouchable” generation after generation if you can come to Christ and be “upgraded” to first class right away! So they’re coming. People from the working classes also, who have gained access to the internet, and to cable TV, are gaining information about the Christian faith in ways that are hard for opponents to block.
What happens in the next ten years in India, in terms of people coming to Christ, could change not only that country but the world. Yet the task is formidable – foreigners (like me) are barred by law from preaching. Many of their thousands of “people groups” (ethnicities with their own language, customs, etc) still have no thriving church, or scripture in their own language. But the ancient land has come into serious contact with the new world, and there’s no turning back.
I’m glad that Bear Valley has a long term partner there, Brother Abraham, who operates a number of schools and churches in a part of India where Christians are very few. We also have one of our own families living there, among a group of people who are completely without a church in their culture. Yet a third partner, a single lady, is working in an orphanage and hopes to begin an adoption ministry. In the days to come, our involvements will only increase, and I’m sure that more short-term teams will go from BVC, to this vital and strategic land.

Wednesday, October 22, 2008

Why Russia Remains a Major Force

Part four of “Changes in the World Ahead”

Russia hadn’t been in the news much, until their army moved into Georgia (the one north of Iran, not the one north of Florida). Nevertheless, Russia is still the 900-pound grizzly bear in the field of global politics. So what is it that makes Russia so important?

Russia ranks #1 in size: it takes up one-eighth of all the dry land on earth. The country has eleven time zones and stretches across two continents. Russia has the largest reserves of minerals and energy of any country. They also have the largest forests and one quarter of all the fresh water on earth. The people, 144 million strong, are the 8th largest population. Their economy also ranks #8 but is among the fastest growing (and that’s a good thing). Russia holds a “permanent” seat on the UN Security Council (and that’s been a bad thing). Their annual military budget ranks #8 in the world, but their army is still huge.

Russia has the #1 (largest) stockpile of nuclear weapons of mass destruction. And they have the capability to fire ICBM missiles and hit any target anywhere on planet earth. No one, not even the US military, has any real defense against these missiles, should they all be launched. (Our missile defense system, the GMD system, is only in the testing phase.) That alone would make Russia a 900-pound bear. But wait, there’s more:

When you think of “big oil producing countries,” what comes to mind? Saudi Arabia? Iran?
The Saudis produce 9.4 million barrels of oil every day, but the Russians are right there behind them, in the number-two spot with 9.0 million barrels. Iran? Number 4, at a measly 3.9million.
For years Russia didn’t export that much, but now they are selling it as fast as they can –
again, right behind Saudi Arabia, the Russians are #2 in oil exports (which means, number two in money imports).

Although we faced off against the Russians during the “Cold War,” more often than not in history, we have been allies with the Russians. And the people are a delight – I have met many Russians, and I have never met one that I didn’t like! They are usually extroverts, optimists, very friendly to Americans, and hard-workers. (Caveat: I’ve never actually been to Russia. All the Russians I’ve ever met were either somewhere in Europe or here in the USA.)

Any understanding of 21st century Russia must be based on their experience in “the Great Patriotic War.” Which war, you say? We know it as World War Two, the big one, but in Russia, it’s the “Great Patriotic War.” It impacted every family, every generation, everywhere.

Imagine if WW2 had been fought on our land – say, enemy troops had landed on the Atlantic shore and marched westward to about St. Louis. Imagine the havoc wrecked upon the land. American casualties in WW2 were a hundred times more than in the current Iraq war, around 400,000. The British lost about the same; Japan lost three million people, the Germans lost seven million, but the Russians….. they lost TWENTY million – a stunning 13% of their population. No wonder they were a bit fearful of other nations after WW2. No Russian ever wondered what it might be like to be invaded by western Europeans – they had already seen it!

A hundred years before the big war, Karl Marx had written “The Communist Manifesto,” suggesting that history’s inevitable outcome would be “communism and socialism replacing capitalism and liberty.” By 1917, Vladimir Lenin had put Marx’s ideas into practice, through the Bolshevik revolution, which overthrew the last of the Czars, and established the “Soviet Union.’

After Lenin, soon came Stalin. Marx had said, “there is no god.” Lenin said, “Marx was god.” Stalin lived as if he believed that, “Stalin himself is god.” He was in charge during WW2.

The successful defense of the Nazi invasion and subsequent occupation of all of Eastern Europe, caused the Soviet Union to become a super-power. I remember as a kid watching on black-and-white TV, in 1960, as Nikita Khrushchev addressed the UN, using his shoe as a gavel, pounding and shouting “We will bury you. Your grandchildren will become communists.” Meanwhile, his people were building nuclear missiles and putting satellites into space. Twenty years later, Ronald Reagan became the US President, and upped the military-spending ante until the Russians went broke, while Pope John Paul II helped Eastern Europe to “believe the unbelievable: that their countries could leave the Soviet Union. After the Russians endured “glasnost” (opening) and “perestroika” (re-structuring), their Union reeled. The Berlin Wall came down, and the East Germans poured through the gaping holes. The wall was covered with graffiti. The best one: VINI, VIDI, VISA (“They came, they saw, they did a little shopping.” )

The Baltic nations said to the Russians, “we quit your union” in 1991, and within two years, I was able to fly into Riga, the capital of Latvia, to plan evangelistic partnerships. It was a cold, grey, twilight in February. Russian soldiers still guarded this airport, and Russian fighter jets (the kind that I had trained to shoot down) were still parked there. But when I returned two years later, the Russians and their planes were gone. Four years after that, Latvia joined the European Union, and then NATO. Today, US and British military planes land at Riga airport – now, that’s what I call, Change!

Meanwhile, Russia itself, post-empire, is free from financially supporting all those satellite states (like Cuba). Russia is growing strong again, and their leaders long to re-gain super-power status. But they look around and see potential rivals everywhere. To the south is China, with a population almost TEN times their size. To the west, the robust European Union (26 nations, 400 million people) looks to them like a vaguely familiar enemy. They see the US military troops staging through former Soviet client states on their way to Iraq and Afghanistan. That has got to look weird, from their viewpoint. It’s easy to see how they would be anxious.

Their domestic challenges are heavy: transitioning from the old, Soviet-style state-centered economy, to the new global roller-coaster, free-wheeling, credit-centered economy. Only 80% of their people are actually Russian ethnically. A full twenty percent come from 100+ different ethnic groups. The communists had promoted atheism, but the Eastern (Russian) Orthodox Church not only endured, but emerged to take firm control of the church scene.

The giddy 1990’s brought incredible religious freedoms, but Russian Evangelical Christians now report that it was only a temporary respite. Social issues like alcoholism, suicide, abortion, gangs, and organized crime, weigh heavily on the people. An aging population, mostly folks living on government pensions granted in Soviet times, struggles to make it through every winter. It would be confusing, morally, politically, and economically, to be a Russian today.

So how do we respond to the changes in Russian today? First, our next President will have to become acquainted with their brand new President, Dmitry Medvedev. (Don’t ask me how to pronounce it – it’s really hard for English speakers.)

Medvedev was born in 1965 -- he’s younger than Barack Obama! His parents were university professors, and he was a brilliant student. As a teenager, he loved the English rock bands “Black Sabbath” and “Deep Purple.” In 1987 he took a law degree from Leningrad State University (something like our Harvard). After he received his PhD in law, he taught as a docent at St Petersburg University (something like our University of Chicago?). Most of his career he was worked in political positions, in city government, (like, maybe, a community organizer?) and later at the national level, as Deputy Prime Minister (something like a US Senator). He is married to the lovely Svetlana, whom he met in school, and they have one young son. Medvedev likes to jog, and swim, and he’s authored some textbooks on law.

How’d he get to be President? His predecessor, the wily Vladimir Putin, couldn’t run for a third term. So he endorsed Medvedev, and after the election, the new President appointed Putin as Prime Minister. Thus, Putin, a former head of the KGB, is very close to the center of power. And it is a power for the United States to reckon with, in the changing world ahead.

Thursday, October 16, 2008

Changes in the World Ahead -- Part III

By Pastor Jim Walters

Last week I tried to outline the challenges of the world's oil needs. Even though half of all the oil that God put into the earth is still in the ground (at least one trillion barrels), every single day we burn 83 million barrels of it, which means we'll need a replacement source of energy in about thirty years. Plus, because most of the remaining oil is in hard-to-get-at places (i.e., bottom of the ocean) and/or in the hands of people who don't like us, it's imperative that we develop alternative energy sources now.

Ever wonder why we use oil as a primary energy source? It was abundant, cheap, easy to find, dense, and portable. None of the conceivable replacements I'm going to tell you about have these attributes. None are as convenient as oil.

Take wind power, for example. Farmers have been using windmills for centuries. Now when I fly my plane over northeastern Colorado, or near Lamar, Colorado, I see hundreds of modern windmills cranking away. Wind power is almost as cheaply generated as coal power -- but not nearly as consistent. Some days the wind doesn't blow.

Solar power has huge potential -- the source is virtually unlimited. And it's safe. As Dr. John Turner of National Renewable Energy Laboratory used to say, "God knew what he was doing when he put the nuclear reactor 93 million miles from Earth." Decades ago, solar arrays on roofs just heated water,and they had little power. Today's solar arrays are "photo-voltaic" (light-to-electric) and they make electricity just like a generator.

Have you ever seen Lake Mead, in Nevada? It takes up a whole corner of the state, but its hydroelectric plant generates 80% of the power needed by Los Angeles. What if you took an area of the desert the size of that lake (there's a LOT of desert in Nevada) and covered that desert area in solar energy cells -- would it generate as much power as does Lake Mead? Fact: it would generate 30 times as much power as Lake Mead!! Solar works, and it works great, except at night or on cloudy days. Aye, there’s the rub – it doesn’t work unless the sun is out. Plus, it’s hard to store the power for later use. And lastly, both solar and wind produce electricity, but the need is for liquid fuel for cars.

Someday we’ll have hydrogen fuel-cell cars. A fuel cell produces electric current, like a battery, but you fill it up with liquid hydrogen, as if it were a tank. When the hydrogen is mixed with air, it bonds with the oxygen and creates a water molecule. This chemical reaction throws off a spare electron, which is gathered on to a wire mesh. When electrons run down a wire, we call that… electricity. Hydrogen fuel cells will be the energy of the 1,000 year millennium – they’re that good. But… they’re years away from being commercially viable replacements for oil and gas.

Probably you've heard it said, "there's more oil in Western Colorado than in Saudi Arabia." Actually, there's not. The stuff in the Piceance Basin may be called "oil shale," but it's neither oil nor shale. It's a hydrocarbon in the kerogen family, trapped in a rock formation called marburg. A slick marketer named it "oil shale" back in the 1930's, and many researchers have tried to figure out how to harvest the stuff and turn it into fuel, but no luck. Even Shell Oil's latest plan, called "in situ," doesn't appear to be practical on any large scale. In a recent Denver Post article, Shell admitted they are ten years away from commercial production -- and that's only if someone can find huge sources of water (on the Western Slope?) as well as building two more coal-fired power plants to generate the power required.

Canada has enormous quantities of bitumen, or "oil sands," in Alberta; but again, the challenges of (a) environmental concerns; (b) lack of available water in vast quantities; (c) lack of workers and housing for workers; (d) the need to inject hydrogen into the stuff to make it liquid, make the "oil sands" very unlikely to grow beyond a "niche" market.

Much is being said about Ethanol as a future energy source. Even now, every gallon of gas you pump contains 10% ethanol, and the new "flex fuel" cars will run on E85, which is 85% ethanol and 15% gasoline. But ethanol made from corn is terribly inefficient, requires vast amounts of water, and causes havoc in the global supply and demand of corn. Future ethanol will be "cellulosic," made from corn stalks, switch grass, even wood chips, and that would be a major player, but again, we're talking about a time frame way past my retirement... and way past the immediate need.

America does have a large supply of coal - a couple hundred years just in Wyoming alone. And it is possible to use coal-liquifacton processes to make diesel fuel from coal. A Denver-based company, Rentech, is doing just that, on a small scale, but they are struggling to find anyone to loan them $5 billion to build a full-size plant. You have to sell a lot of diesel fuel to pay back a $5 billion investment!! Again, not in my lifetime...

What about Hybrid cars -- don't they save us fuel? Oh yes, and if we had 100 million of them, it would help immensely. America has 230 million cars rolling down our roads today, and less than five million of them are high-mileage hybrids. Every freight train you see is a hybrid also (the diesel engines don’t turn the wheels – they power generators that connect to electric motors that turn the wheels). They do this because hybrid technology is way more efficient than automotive engines.

By now, you’re thinking, boy, Jim is pretty pessimistic about alternative energy sources. No, actually I’m optimistic about them over the long haul, but I’m discouraged at how slowly we are adapting to them, and how little we are spending on research for hydrogen fuel cells (about 1/700 of what we just spent on bank bailouts).

What I forecast is a “long and difficult transition” from oil to other sources. During this time we are going to see big nations like China and India (and the USA) competing to buy and import from the same sources (Canada, North Sea, Mexico, and OPEC) while those sources struggle to keep supplying oil as fast as it is in demand.

This very week, crude oil prices on the NYMEX futures market are “down” in relative terms, to around $72 a barrel. But wait – only four years ago this week, oil was trading at around $38 a barrel. It has doubled in four years, and for a brief time was DOUBLE today’s price. Yes, this was largely due to “speculation,” but it doesn’t take much speculation to realize, if demand keeps going up and up, at 1.5% per year, and alternatives are slow to come on line, while supplies are barely keeping pace year-on-year, we are going to see some serious crunches in the global market over the next ten years. And this crunch, my fiends, will be one of the biggest tension-makers in the changing world around us.

Monday, October 13, 2008

Pastor Jim on OIL & Energy (part one)

A New Peak for Your Mapby Jim Walters
Picture a big Easter egg hunt, with a bunch of kids scouring a park where 1,000 Easter eggs have been hidden. As the kids fan out and begin to pick up eggs, let’s plot a graph that shows their production in terms of “Eggs per Minute.” With each passing minute, the number of eggs found in that minute will increase, so our graph will resemble the first half of a classic bell curve, with the production line going upwards and right.
However, a funny thing happens when half the eggs have been found. The rate of finding eggs (production) will flatten out, because the kids have found all the eggs that were in plain sight, and from here on they’ll be rooting around under the bushes and burrowing into the more difficult hiding places. Even later, as the number of eggs remaining gets really small, the production rate really drops, and our production line comes down sharply, completing the bell curve just as the last egg is found.
The Easter egg hunt describes what is happening with global oil production today. Petroleum geologists believe that roughly half of all the oil that will ever come out of the ground has already been pumped up, and so the bell curve that tracks “oil production per day” is reaching a flat peak at around 88 million barrels of oil per day. It’s not a “peak” as much as it is a “mesa top,” but petroleum geologists call it a peak, namely “Hubbert’s Peak.”
Mr. Hubbert was a petroleum geologist with Shell back in the 1950’s, when he first observed that oil production in any field (or group of fields, or continent, or planet) would follow a bell curve (like the Easter Egg hunt). When Hubbert predicted that gross oil production in the lower 48 states would peak in 1970, everyone laughed at him.
They stopped laughing in 1970 when production in the lower 48 states peaked, pretty much when Hubbert had said it would. The peak production rate was around 11 million barrels per day. Would you like to know what it is today? Just over 6 million barrels per day (from the Continental 48 states). Hubbert later passed away, but his successors used his equations to accurately predict the peaking of the Alaska Prudhoe Bay, in the Gulf of Mexico, and even the North Sea. ALL of those fields have peaked.
So, today America burns 22 million barrels of oil daily, but only produces about 9 million, including Alaska and the Gulf. That means we import, from other nations, 13 million barrels a day, at the staggering cost of $100 per barrel, that’s one-point-three billion dollars every single day. That’s the “largest transfer of wealth in history” that T Boone Pickens is talking about.
Half of all the world’s oil endowment is still in the ground. If the geologists are correct, there’s at least another trillion barrels remaining. Note that at the rate of 88 million per day, those trillion barrels will be GONE in about thirty years. And remember, we’ve already used the "easy to find” oil (eg: Texas) and much of what remains is the “hard to find” oil (eg: under deep ocean water) or, it is in the hands of people who don’t like us very much. That’s the long-term problem.
The short-term problem is that while “supply” is peaking, “demand” just keeps growing. Since 2002, India and China ceased exporting surplus oil and now import (just like us) to meet their own needs. We are all competing for the same oil in a “commodities” market, where “supply and demand” factors fluctuate. The price of oil is no longer pre-determined by OPEC or “big oil.” No, the entire market is driven by speculative forces. Oil companies and investors buy like crazy when they think demand is strong; then they sell like mad when supply catches up and demand shrinks. At the last Presidential election, oil rose through $40 a barrel and soared eventually to $140. Now it’s falling through $90. You can expect these cycles to continue, with “higher highs” and "lower lows.” Most places in the world pay more than $5 per gallon of gasoline at the pump. The ultimate problem is, what will we use to first supplement, and then replace oil? Will it be oil shale or oil sands, ethanol, solar, wind, hydrogen, or some of each? Next week I will attempt to explain why none of these options alone will be a simple answer, and why the phrase “The Long Emergency” is a good descriptor of the global energy situation.
For more info: “Hubbert’s Peak” by Richard Deffeyes; “Twilight in the Desert” by Matthew Simmons; “The Long Emergency,” by James Kunstler; or just google “peak oil.”

Pastor Jim's View of CHINA

Well, that was fun. Preaching on the End Times, exploring the possible "signs in the sky" and pondering how the end-time events might unfold. And really four sermons isn't enough to cover the subject entirely. Beth Moore's series on Daniel is excellent, and also the new book "101 Answers to Questions on the End Times" (Mark Hitchcock) is proving to be useful.

Someone asked me about the "Partial Rapture" theory, the one that suggests believers might be taken up in a "series of raptures over several years." Fascinating, but I didn't have time to cover it. That said, yesterday I found myself praying for a partial rapture... of all the politicians in Washington.

Back to business: what if Jesus tarries a bit longer? What will the world look like in the near future? People often tell me I'm good at making complex things understandable (an attribute I credit to my days of training fighter pilots -- they're a very simple breed, who like things to be black, white, and straightforward.) So, for part one of "The Big Picture of Global Change" let me tell you about the country that is becoming the 900-pound gorilla of Global Change: China.

"The Middle Kingdom" as they themselves call it, has been around a very long time. Most of the major dynasties in China lasted longer than the history of the USA from George W (Washington) to George W (Bush). And even the smallest province in China has more people than any nation in Western Europe. So when you think China, think "big."

Even with their policy of "one child" per family, the population still creeps upward, now reaching 1.3 Billion (roughly four times that of the USA; and a little more than India). Their economy grows at the blistering rate of 9% a year, so it doubles every eight years! In 1978 they produced a total of 200 air conditioners. Last year they exported 48 million air conditioners. Every single day, China exports more products in that one day, than they did in the entire YEAR of 1978 -- just thirty years ago.

And when products go out, money comes in. They've moved 400 million people from rural poverty to urban almost-middle-class. Take all of the construction projects in the USA and multiply them times Five -- that's what they are building in China. Make a list of the twenty fastest-growing cities in the world, and guess what? All twenty cities are in China. And these facts I've listed are from one book, "The Post American World" by Fareed Zakaria, a Newsweek editor.

China is also a new and massive market for US products. Proctor and Gamble sells $2.5 billion/year into China. Chinese drivers import new cars from Japan and from USA, at the rate of, are you ready, 20,000 cars a month!! Starbucks is expanding so fast that by 2010 there'll be more Starbucks in China than in the USA. (Imagine a billion Chinese, amp'ed up on Double Espressos...)

What's the point of all this? That China is going to play a large, large role in the future. It's a good thing that we are friends with them, and as their economy is dependent on us, as we are also dependent on them. (I've read also that 10% of all the Treasury notes out there, ie: our national debt, is held by Chinese people or businesses or government.)

In my opinion, the 2008 Olympics "re-shaped" the openness of the country, in a way that will not be reversed. They are learning English, they are going on-line, they are hearing the gospel of Christ in numbers that are unimaginable. They won't pass the USA as a military power (not for at least a century) and their economy will not be as large as ours, but where there were two major economies (USA and European Union) there will be soon be a third -" BRIC" is the acrostic for it -- Brazil, Russia, India, China -- and China is the big dog on that block. So get used to the idea of China, and pray for its people, its churches, its future.

stay tuned: next week: I will attempt to explain "Why Oil Costs So Much."