Economist 1/15/15

  1. The plunging price of oil, coupled with advances in clean energy and conservation, offers politicians around the world the chance to rationalise energy policy.Not only has the price of oil halved in the past six months, but natural gas is the cheapest it has been in a decade.Even though fracking has boosted America’s oil output by two-thirds in just four years, the country still bans the export of oil and restricts exports of natural gas, a legacy of the oil shocks of the 1970s—and a boondoggle for American refiners and petrochemical firms. Congress also keeps handing out money to Iowa’s already coddled corn farmers to produce ethanol and has not reviewed generous subsidies for nuclear power despite the Fukushima disaster and ruinous cost over-runs at new Western plants.In Europe the giveaways are a little different—billions have gone to wind and solar projects—but the same madness often prevails: Germany’s rushed exit from nuclear power ended up helping boost American coal and Russian gas.The most straightforward piece of reform, pretty much everywhere, is simply to remove all the subsidies for producing or consuming fossil fuels. Last year governments around the world threw $550 billion down that rathole.Cash-strapped developing countries such as India and Indonesia have bravely begun to cut fuel subsidies.Venezuela is close to default, yet petrol still costs a few cents a litre in Caracas.
  2. Little wonder, then, that Saudis have been rattled by the news that King Abdullah, their 90-year-old monarch, was taken to hospital on December 31st with breathing difficulties, which Saudi officials said was pneumonia. The hospitalisation sparked particular concern because the king tends to be treated in medical facilities in his palaces.It is no secret, however, that the monarch will not be around for much longer. The man designated to take over is his half-brother, Prince Salman. But the prince is no spring chicken either; he is 78 years old and said to be suffering from dementia. Under Saudi Arabia’s’ complicated system, power is not passed by primogeniture. Rather, it has been handed from brother to brother among the 45-odd sons (borne by many women) of Abdel Aziz bin Saud, who founded the state and dynasty in 1932.Perhaps with Salman’s frailty in mind, in March last year King Abdullah took the additional step of appointing a deputy heir—his youngest brother Muqrin, a British-trained air force pilot.The difficult task will be to pass rule onto the next generation.King Abdullah seems to be trying to position his own sons, Miteb, who heads the national guard, and Mishaal, who is governor of Mecca.Liberals rail against the slow pace of reform in a country where the Koran is the constitution and women are still banned from driving, while the devout Wahhabist religious establishment balks at innovations such as the appointment in 2013 of 30 women to the Shura Council, a consultative body. The Shia population in the country’s east, who make up some 15% of Saudis, are restless.
  3. COLLEGE football has long been a peculiar anomaly among American team sports, as the only game that does not select its champion using a playoff system. After decades of relying on polls and computer systems to determine who would win or play for the title, the sport at last set up a proper knockout tournament for the 2014 season. On January 12th the first victor under the new model was crowned: Ohio State, which beat the University of Oregon.Despite such quibbles, fans embraced the new model with unprecedented enthusiasm. Dispelling widely aired concerns that a bubble in sports-broadcast rights was about to pop, the final game drew more than 27m viewers, making it the most-watched programme ever on cable.With just four teams, the small field makes it nearly impossible for an unheralded school to raise its profile by making an unlikely title run—the selection committee would be hard-pressed to choose such a programme instead of a familiar heavyweight. The five “power” conferences, which contain the strongest teams, will receive a base payment of $50m each, with some receiving tens of millions more through existing arrangements with the hosts of specific games. Meanwhile, the five weaker conferences will get just $13m each—still a significant raise from the previous system.As college football becomes a bigger business than most professional sports, the injustice suffered by its unpaid labour force seems starker than ever.
  4. EGYPTIAN gods and Greek heroes recently crowded into an Atlanta theatre for the World Championships of SMITE, an online game that involves, as its name suggests, a lot of smiting. Players can pretend to “Be a God”—and battle other ancient deities with magic hammers, thunderbolts and so forth.Hi Rez Studios, based in Alpharetta, Georgia, released SMITE less than a year ago. It owes its swift rise to the popularity of electronic sports: 206m people around the world watch others cast spells and swing swords (89m of them do so regularly).Developers make their games easy to pick up, too, often by making the game itself free to play, relying on in-game purchases of useful items or cosmetic features for their characters to make money.that influx of cash, from both advertising and game revenues, means that tournaments can afford to offer big prize pools, tempting more youngsters into playing professionally. Take John Salter, who led “Cognitive Prime” to victory under his in-game alias BaRRaCCuDDa. He had planned to become a cardiac rehabilitation therapist after college. Hours spent on SMITE instead have now proved worthwhile: his team won $1.3m for their victory.
  5. Hydropower has boomed in Vietnam over the past decade and now generates more than a third of the country’s electricity. In 2013 the National Assembly reported that 268 hydropower projects were up and running, with a further 205 projects expected to be generating by 2017. They are helping to meet a national demand for energy that the authorities forecast will treble between 2010 and 2020.Yet the hydropower boom comes at a price. Rivers and old-growth forests have been ravaged, and tens of thousands of villagers, often from ethnic minorities, displaced. Some improvements are at hand. A national tax on power generation, established in 2010, requires hydropower companies to pay farmers to protect forests within water catchments. In recent months the government has scrapped or scaled back plans for future dams while drafting regulations that tighten oversight of existing ones.Many hydro-electric companies are owned by or affiliated with Electricity Vietnam (EVN), the loss-making state power monopoly. Because hydropower is Vietnam’s cheapest source of electricity, EVN resists investing in measures such as dam-safety assessments that would further erode its financial position.
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