Horizon, Host: Ted Simons

May 27, 2008


Host: Ted Simons

Oil Bubble


  • We’ve heard of the housing bubble, but is there an "oil bubble" occurring in our economy? Crude oil has surged from $45-dollars per barrel in 2004 to a recent peak of more than $135 a barrel. Investor speculation, uncertainty over supplies and the rising demand from other countries are contributing to the debate over whether we are experiencing an “oil bubble”, and how long these high prices at the pump will last. Joining Horizon to help sort through the factors making up the skyrocketing price of gasoline is A-S-U Economist Tracy Clark.
Guests:
  • Alfred McEwen - Principal Investigator, "HiRISE" Mission, University of Arizona
  • Tracy Clark - ASU Economist
Category: Business/Economy

View Transcript

>>Ted Simons:
Tonight on "Horizon," the Phoenix Mars Lander begins a three-month mission to explore Martian soil and buried ice. Plus, we've heard of the housing bubble. Is there an "oil bubble" occurring in our economy? And is there gas-price relief in sight? Also tonight, Chronic Fatigue Syndrome is a misunderstood illness, but affects more than a million Americans. We explore diagnosis and treatment of CFS. Those stories next, on "Horizon."

>>Announcer:
"Horizon" is made possible by contributions from the Friends of Eight: Members of your Arizona PBS station. Thank you.

>>Ted Simons:
Good evening, and Welcome to "Horizon." I'm Ted Simons. President Bush just wrapped up a four-hour visit to the Valley. It included a stop at a Mesa company that makes electrical wiring, and a fundraiser for Senator and presumptive Republican presidential nominee John McCain. The Media was not allowed at the fundraiser at a private home. This is the first time the President and Senator McCain have appeared together since the President endorsed McCain in march.

>>Ted Simons:
Well, It was a fingernail-biting moment Sunday as the Phoenix Mars Mission Lander came to rest on the North Pole of Mars. This after a 10-month trip. University of Arizona is running the Phoenix Mars Mission. Earlier I talked about the phoenix mars mission with Alfred McEwen, Principal Investigator for the "HiRISE" Mission, which is on board the Mars Reconnaissance Orbiter.


>>Ted Simons:
And Alfred McEwen, thank you so much for joining us on horizon.

>>Alfred McEwen: Hello, how are you?

>>Ted Simons: I'm doing well, and it sounds like you and everyone who's associated with this project is doing very well.

>>Alfred McEwen: It's been an exciting lase 48 hours.

>>Ted Simons:
Yes, talk to us about the camera that you're involved with that took the photograph of the lander landing.

>>Alfred McEwen:
Right. So, my camera is "HiRISE". It's on the Mars Reconnaissance Orbiter, whizzing around Mars 13 times a day. We decided to try something different here. We were pointing it at Phoenix as it was descending through the atmosphere in order to collect the relay data. And we decided to try to take a picture of it as well, which was an unusual maneuver in terms of the geometry. And we actually got it. We actually got an image of Phoenix on the parachute, falling through the sky.

>>Ted Simons:
Were you surprised at the quality of that image?

>>Alfred McEwen:
I was, especially after looking at image of Mars in the background. That was pretty low in quality, but of course, we did expose it for the parachute. When we saw the parachute, that was a much sharper image, as it should have been in hindsight. We are bit surprised. The engineers are trying do figure out exactly what the parachute was doing. It's a little different than we expected.

>>Ted Simons:
I was going to say, what would the photos be used for? I guess you'll go back, and try and see if everything did as it was supposed to do?

>>Alfred McEwen:
Yes. Well, the real rationale for doing this was: what if Phoenix failed? If we got this image, and show that the parachute deployed correctly, then that exonerated the parachute as a cause for failure, and that makes it much easier for them to investigate what did go wrong, and lessens the chance of impact on the next mission, the Mars Science Laboratory in 2009. But of course, Phoenix worked fine, but it's interesting -- the images are very interesting and the images are interesting, because the engineers have models of how this parachute behaves in a Martian atmosphere, and now they've got at least one data point that showed what it really did.

>>Ted Simons:
Indeed. It sounds like everything involved in the mission has worked very well. However, we learned late today that there were problems communicating information from Earth up to one of the two orbiter; is that correct?

>>Alfred McEwen:
That's correct. The mars reconnaissance orbiter, the electrical relay, had some sort of an upset, and it's "saved" itself, turned itself off, which is just a very conservative protection of the hardware. It's back on again, and as far as I know, it's fine.

>>Ted Simons:
So, not all that serious?

>>Alfred McEwen:
No.

>>Ted Simons:
OK. Are there any other concerns that you are keeping an eye on right now?

>>Alfred McEwen:
There's always concerns that the engineers and managers have, but I don't have any.

>>Ted Simons:
OK. I notice one of the more fascinating aspects of the Lander are the solar panels. I don't know how much you can talk to us about those things. They are very critical to the mission, correct?

>>Alfred McEwen:
Absolutely. They had to have one of them open correctly to have a mission at all. Otherwise, they would have had a 30-hour mission, that's how long the batteries were charged for. We took subsequent images of Phoenix on he ground up at 11 and 22 hours after landing, and the purpose of planning those was, "what if we weren't hearing from Phoenix"? This happened before, in 1999 with the Mars Polar Lander. Our images could answer some questions, such as, "did the solar rays open properly"? If it did open, then we know that something worked. It's probably power positive, not as much an emergency, in any event.

>>Ted Simons:
General information on the mission. Why was the Northern Polar Region targeted?

>>Alfred McEwen:
OK. Well, that was because the Gamma-Ray Spectrometer on Mars Odyssey - another University of Arizona experiment, by the way - discovered shallow ice in the subsurface in that region of Mars. So, this led to the concept of the Phoenix Lander. It was the first of the completed Mars missions, and their objective was to actually dig through the soil, analyze the soil, and dig down to the ice and understand the chemistry of the ice, and the soil above the ice. And so, they knew exactly where to go, and they had models for how thick the soil was over the ice, and we'll soon find out whether those the models were correct or not.

>>Ted Simons:
In terms of the Phoenix Lander itself, is it sophisticated enough that by itself, it can detect what's needed to be found, to suggest live, or the possibility of life?

>>Alfred McEwen:
No, it's not really designed to detect life. It's designed to understand the chemistry and the nature of the environment, which could then say that this is a place where life could have existed at some point in time. They really don't have anyway of detecting life, unless something really jumps out and is obvious, for example, to the microscopic imaging. But that's highly unlikely.

>>Ted Simons:
Let's talk about the cameras on the Landers. How sophisticated are these cameras?

>>Alfred McEwen:
Well, these are very good little cameras. They are lightweight, they have to be in order to land it on Mars. but there's a surface stereo camera that looks around the landscape, and takes pictures of various things. There's also camera on the arm, so it can take a closeup picture of the soil, the trench and so forth as it digs. Then they've got a microscopic camera to look at even finer scales, and they have an Atomic Force Microscope that is even finer scale still. So, they can analyze the soil and ice over many orders of magnitudes of scale.

>>Ted Simons:
My goodness. And again, all these cameras are built to last until the Sun literally goes away in, what, November or December, somewhere along those lines?

>>Alfred McEwen:
The cameras will probably last as long as the spacecraft is able to keep them powered up, and keep them warm enough. So, the issue is this this is the Arctic. Right now, they get Sun 24 hours a day. It dims down at night, but never goes away. But come September, October I believe, it starts dipping below the horizon, and then by the end of this year, pretty soon it is so dark, dark most of the time, it gets very little solar power, it can't keep itself warm. That will be the end of the mission for sure, and all the instruments on it.

>>Ted Simons:
Interesting. The robotic arm itself, I know there's a lot of concern about that. Give us an update -- first of all, how big it is. Does it basically work like a shovel?

>>Alfred McEwen:
Well, I don't know too much about it. It's kind of like Peter Smith describes it, as "strong-arming" Mars. It's a big arm, almost like a little backhoe. Its reach is, I believe, something like 6 feet. So it can reach out a fair ways. It has to be able to reach down to the soil over the edge of the Lander itself. It has a scoop on the ended. It has a little grasp on it as well to scrape up the ice and scoop that up. That's about the extent of what I know about it.

>>Ted Simons:
OK, and as far as the Mission in general now, once everything is done and, again, night comes to Mars, and the Mission basically ends, what are you hoping for in terms of results and information out of this Mission?

>>Alfred McEwen:
Well, hopefully all of the experiments will work properly. There's wet chemistry experiments, where water carried from Earth is added to the soil to see, then, the chemistry of the water. Whether it's salty, for example. The soil is analyzed in little ovens called TEGA: Thermal Enalyzed Gas Analyzer. And as it's heated up, it goes into a mass spectrometer to reveal the composition. If something is released at a certain temperature, and then reveals organic material - complex organic material, that would be quite a majoy discovery. It's a difficult measurement. But we will learn lots about the soil and the environment and the chemistry of this location.

>>Ted Simons:
Last question. On a personal level, when you knew the Lander had landed, and everything was up and operational, how did you feel?

>>Alfred McEwen:
I feel great, especially for everyone who has worked on the Phoenix Project. I was in the Phoenix Operation Xenter, in their PIT: Payload Integration and Test Facility. We had a barbeque pit. There was an enormous cheer that was probably the loudest cheers of all places of people watching this, because these are the people who worked so hard on this, and they saw their dreams come true.

>>Ted Simons:
Alright. Well, Alfred, congratulations on the stunning pictures on your end, and for everyone involved with the mission. Great job. Thank you for joining us on "Horizon".

>>Alfred McEwen:
Thank you.

>>Ted Simons:
What are the factors making up the skyrocketing price of gasoline? Crude Oil has surged from $45 per barrel in 2004, to more than $135 a barrel now. Investor speculation, uncertainty over supplies, and rising demand from other countries are certainly factors. There is a debate going on over whether we are experiencing an oil bubble, and if these high prices at the pump will continued. Here to help us sort through all that is ASU Economist Tracy Clark. Tracy, good to have you on the program again. Thanks for joining us. How much is speculation pushing this -- well, let's call it a bubble for now?

>>Tracy Clark:
Well, I think that if you're just looking at demand factors, we might have $80, $85 a barrel of Oil. So the rest is some combination of fears oversupply, and speculative activity by investors.

>>Ted Simons:
So, speculation is a factor. I kind of jumped the gun a little bit. Is this a bubble?

>>Tracy Clark:
Well, in the sense that some of the price is not related to Supply and Demand factors directly, yes, you could call it a bubble. It's not a very big one yet, and I don't know how much farther it's going to go because typically, in these kinds of situations, if you don't have these fears oversupply, then there's nothing for the speculators to really work with. And right now, we haven't had any new disasters in the supply for Oil. If that holds, if we don't have any new things to worry about, this price of Oil may have stabilized for a while.

>>Ted Simons:
I was going to say, some folks consider a bubble happening when supply overwhelms demand, and that's certainly isn't happening right now.

>>Tracy Clark:
No, that's not what's happening now. We're having, in a little bit, the same kind of bubble that we had in the Real Estate market, where people were bidding up prices, and it wasn't really connected to the number of people they thought were going to demand it, the actual demand or in essence, really, the supply. It was totally disconnected between those two. And right now, there's some speculative activity that is just a result of people thinking there's an opportunity here for them to move the prices, and they are, indeed, moving the prices some.

>>Ted Simons:
Begs the question: who's doing the speculating?

>>Tracy Clark:
All the people that were doing the speculating first in the Stock Market, then in the Real Estate. Now, since they can't do the Real Estate, and the Stock Market still doesn't look that good, they got to put the money somewhere, and really - literally, what they've done is put it into the Commodity Market, and that's why we're seeing the speculative activity.

>>Ted Simons:
To that thought, should there be, and will there be, more regulation and more oversight in essential commodities?

>>Tracy Clark:
I don't see the same push right now. Certainly, if we were to get a bubble the likes that we saw in the Real Estate market, where almost all the increase in price activity for almost two years was investor driven, then you would probably see some pretty heavy calls. Right now, we're only, you know, we're only seeing a portion of the price volatility being speculative activity. The rest of it is plain old fear and changes in Demand and Supply.

>>Ted Simons:
There's some thought that whatever this is, bubble by any name, isn't going to burst until the recession hits and hits hard. You agree?

>>Tracy Clark:
Well, certainly a recession would pull back on prices, would make the commodities a lot less attractive to investors. But you would have to have demand fall not only here, but in Europe and in places like China and India.

>>Ted Simons:
There are other kind of another strand of thought here that the prices are high, yes, much higher than we're used to, yes. But these prices now are where they should have been all along.

>>Tracy Clark:
There is some degree of truth to the idea that for a while, prices weren't where they should been, given the price of Oil. And right now, with Oil at 100 -- well right now, the last number I saw, was 128, but that was a little bit of retreat. That the people that are doing the refining and the selling of the oil are absorbing some of the price into their losses. And Oil, you know, Gasoline prices would be a little bit higher if that weren't the case. And so, we're still not in a situation where there's a one-to-one correspondence between the price of Gasoline and where the Oil currently is. It's also true that if something happens to actually lower supply, or there's something that would make people fear that supply would be a lot lower, and if Oil prices go up significantly, at $200 a barrel, you might be seeing $6 gasoline.

>>Ted Simons:
Well, you would not only be seeing $6 gasoline, but you'd be seeing folks in a lot of parts of this Country, come wintertime, unable to pay for heating.

>>Tracy Clark:
You would. Under those circumstances, it would be very difficult. We're already seeing people cutback on their energy consumption. Year to date, about .6\%. You might think, "well that's not very much." Well, people are going to cutback more, I think, but overall, it takes a lot to make people consume less energy. That we've seen any drop at all says we're getting to a price point where people are sensitive to the price of energy, and they are going to cutback.

>>Ted Simons:
Weaker Dollar, how much is that playing into all of this?

>>Tracy Clark:
It has played a role to this point. The Dollar's actually firmed up against like the Euro, the primary currency that we've been dropping against, because there's weakness in the Euro countries. If that persists, the Dollar may, in fact, start strengthening against the Euro, and that could take a little bit of pressure off of us, plus the fact that slower economic growth in other parts of the world means less overall demand for Oil, which will take further pressure off the price.

>>Ted Simons:
And there are some who are suggesting China can't continue to just oversee everything the way they do, and that some deregulation there might also maybe take a little bit of air out of the balloon. Does that make any sense?

>>Tracy Clark:
It does, because they do have large influence over a lot of the prices that their people in their economy pay, and it costs money to do that. And one of these days, you either run out of money, or you let prices go where they're supposed to go. The other thing is that there's some evidence that the Chinese economy may, in fact, be on the verge of starting to slow down some. It still will be very fast compared to us, and if that happens, that will take further pressure off the prices.

>>Ted Simons:
Alright. Tracy, thank you so much for joining us. Good information. Tracy Clark, ASU Economist. Thank you.

>>Ted Simons:
Chronic Fatigue Syndrome is a complex and mysterious illness for which there is no known cause or cure. However, there is abundant scientific evidence that CFS is a real biological illness, not a psychiatric condition. As Merry Lucero reports, there are treatment options that can help patients manage symptoms, improve function and cope with the impact of the illness.

>>Allan Youngberg:
I used to be a scout leader, a backpacker, you know, involved in the church, you know, and really involved in my kids' sports. And right now, basically, all I can do is work during the day. I come home, and I rest. I go to bed early. A lot of times, I sleep through the weekends just to be able to work that next week.

>>Merry Lucero:
Allan Youngberg is suffering from a health issue that, until recently, was not recognized as a serious medical condition. It begin several years ago with another common Arizona illness.

>>Allan Youngberg:
About 12 years ago, I had Valley Fever that went undiagnosed for about eight months, and it had taken my immune system down to the point where I just really had nothing.

>>Merry Lucero:
The Valley Fever eventually triggered Chronic Fatigue Syndrome. That changed Youngberg's active, energetic life to one of managing constant exhaustion, and other symptoms.

>>Allan Youngberg:
Kind of like arthritis symptoms. There'd be mornings where I get up, and I just couldn't walk very well, because the arthritis was so bad. I would get rashes that itched.

>>Merry Lucero:
Youngberg's brain was in a fog, and the fatigue was extreme.

>>Allan Youngberg:
Sometimes I would sleep 2 or 3 days in a row.

>>Merry Lucero:
And still wake up exhausted. He had difficulty working, and went on and off disability. Youngberg saw doctors, tried homeopathic remedies, even acupunctures. Nothing helped. People, and even his physician, doubted he was really sick. Then Youngberg met Dr. Scott Rigden.

>>Allan Youngberg:
He looked at me in the face, and said, "you know, I think I can help you."

>>Merry Lucero:
Dr. Rigden: Is a CFS expert, and saw the symptoms right away.

>>Scott Rigden:
Chronic Fatigue Syndrome is characterized by unbelievably severe fatigue, exhaustion. Less than 50\% of your normal energy for at least 6 consecutive months. When we say exhaustion, for example, we talk about someone who previously have great energy, who gets up in the morning, has enough energy to perhaps take a shower and try to eat some breakfast, and then totally fizzles out and has to go back to bed. It is severe. So it is unlike "fatigue" most of us would refer to, that we've experienced.

>>Merry Lucero:
In years past, the illness was brushed off as psychosomatic.

>>Scott Rigden:
When this first came out and before we had a sophisticated way to evaluate it, tests often come back normal. The routine blood counts, he routine blood screening. And because people are exhausted and spending a lot of time in bed, you know, when casual assumption would be, "well, gee, these people are just depressed. They're just run down."

[ Scott Rigden speaks indistinctly to Allan Youngberg]

>>Merry Lucero:
It has been a battle for the Medical Community to have the disease officially recognized.

>>Scott Rigden:
Until a few years ago, the Centers for Disease Control and National Institute of Health weren't even on board as validating this as a physical illness. They are now, for sure, and they have issued a policy and physician statement. There's now a $7 -$10 million research budget. We now have, in all of the systems like Medicare and disability, computerized diagnostic code numbers. These weren't even available until 7 years ago. So things are going better in that direction. More of my colleagues are now saying, you know, I'm take a second look at this, and some of these people are very ill.

>>Merry Lucero:
Now, the challenge is achieving treatment and a remedy.

>>Scott Rigden:
Some kind of sore right in here.

>>Scott Rigden:
Chronic Fatigue Syndrome, as we're sitting here, has no cure, unfortunately. But there are a lot of things we can do to improve the functionality of the patients, a lot of things we can do do to help them mentally and emotionally as they navigate through the tough waters. And we do know that about 10\% of the people have spontaneous remissions. They get well for reasons that aren't always clear, but we always rejoice when it happens.

>>Scott Rigden:
Deep breaths.

>>Merry Lucero:
Dr. Rigden helps patients get better sleep, deal with chronic pain, and provides nutritional and exercise therapy and supplements. These treatments are helped Allan Youngberg. Dr. Rigden credits much of Youngberg's improvement to his determination.

>>Scott Rigden:
Here's a gentleman that just embraced any and all ideas we could share with him that might start sparking a comeback, improving his energy, helping to normalize his sleep and pain cycle and so on. And just a tremendous persistence and, you know, any chronic illness we talk about it's tremendous adversity, that's not an option. But being a victim is optional, but he never accepted that he'd be a victim.

>>Merry Lucero:
Youngberg said his church chronic illness support group has also helped him.

>>Allan Youngberg:
Right now, I'm just looking at the positive, and seeing all that Dr. Rigden has done for me, as well as other doctors I have worked with, and just trying to live each day, you know, thanking God that, you know, I'm able to get up in the morning and work again.

>>Ted Simons:
For more information about this illness, you can go to the Chronic Fatigue Immune Dysfunction Syndrome Association website. That's "cfids.org".

>>Ted Simons:
Tomorrow on "Horizon", Senate President Tim Bee will tell us what's happening at the state capitol. He'll talk about Legislative accomplishments and challenges that remain, like a $2 billion budget deficit. Again, that's tomorrow at 7:00 on "horizon."

>>Ted Simons:
And please visit our web site at "azpbs.org/horizon" for video and transcripts of this program, and we have archives of previous programs on the website as well. That's it for now. Thank you so much for joining us. I'm Ted Simons. You have a great evening.

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>>Announcer:
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