Ayungin Shoal lies 105 nautical miles from the Philippines. There’s little to commend the spot, apart from its plentiful fish and safe harbor — except that Ayungin sits at the southwestern edge of an area called Reed Bank, which is rumored to contain vast reserves of oil and natural gas. And also that it is home to a World War II-era ship called the Sierra Madre, which the Philippine government ran aground on the reef in 1999 and has since maintained as a kind of post-apocalyptic military garrison, the small detachment of Filipino troops stationed there struggling to survive extreme mental and physical desolation. Of all places, the scorched shell of the Sierra Madre has become an unlikely battleground in a geopolitical struggle that will shape the future of the South China Sea and, to some extent, the rest of the world. … It was hard to imagine how such a forsaken place could become a flash point in a geopolitical power struggle. … To understand how Ayungin (known to the Western world as Second Thomas Shoal) could become contested ground is to confront, in miniature, both the rise of China and the potential future of U.S. foreign policy. It is also to enter into a morass of competing historical, territorial and even moral claims in an area where defining what is true or fair may be no easier than it has proved to be in the Middle East. … The Spratly Islands sprawl over roughly 160,000 square miles in the waters of the coasts of the Philippines, Malaysia, Brunei, Taiwan and China — all of whom claim part of the islands. Since the 18th century, navigators have referred to the Spratlys as “Dangerous Ground” — a term that captures not only the treacherous nature of the area but also the mess that is the current political situation in the South China Sea. … Why the fuss over “Dangerous Ground”? Natural resources are a big piece of it. According to current U.S. estimates, the seabed beneath the Spratlys may hold up to 5.4 billion barrels of oil and 55.1 trillion cubic feet of natural gas. On top of which, about half of the world’s merchant fleet tonnage and nearly one third of its crude oil pass through these waters each year. They also contain some of the richest fisheries in the world. … What China has done with Mischief, Scarborough and now with Ayungin is what the journalist Robert Haddick described, writing in Foreign Policy, as “salami slicing” or “the slow accumulation of actions, none of which is a casus belli, but which add up over time to a major strategic change.”

In the 1970s, geologists discovered crystalline natural gas—methane hydrate, in the jargon—beneath the seafloor. Stored mostly in broad, shallow layers on continental margins, methane hydrate exists in immense quantities; by some estimates, it is twice as abundant as all other fossil fuels combined. Despite its plenitude, gas hydrate was long subject to petroleum-industry skepticism. These deposits—water molecules laced into frigid cages that trap “guest molecules” of natural gas—are strikingly unlike conventional energy reserves. Ice you can set on fire! Who could take it seriously? But as petroleum prices soared, undersea-drilling technology improved, and geological surveys accumulated, interest rose around the world. The U.S. Department of Energy has been funding a methane-hydrate research program since 1982.

It may be tempting to view recent declines in commodity prices as the end of the resource “supercycle”—the period of sharp price rises and heightened volatility since the turn of the 21st century. Yet rumors of the supercycle’s death are greatly exaggerated. Despite recent falls, commodity prices are still near their levels of early to mid-2008, just before the global financial crisis hit. (To track the movements in commodity prices over time, see the interactive, “MGI’s Commodity Price Index—an interactive tool.”) At a time when the world economy remains below full power, this phenomenon is striking, and a sign that the supercycle is alive and well. … We believe that resource markets will be shaped in coming years by a race between emerging-market demand and the resulting need to increase supply from a more challenging geology and the twin forces of supply-side innovation and resource productivity. Innovations such as the use of 3-D and 4-D seismic technologies for energy exploration can improve access to resources. Productivity gains can reduce the wastage of food and water and make buildings more energy efficient. The question is whether technology and resource productivity can improve fast enough to counter the impact of emerging-market demand and a more challenging geology. … The race is on.
1. The changing resource landscape
2. Energy: The race between technology and geology
3. Metals: The looming supply challenge
4. Agriculture: Falling yield growth hits prices

A plan to export electricity looks cursed ...WAR in Afghanistan, corruption and regional rivalries: until recently these were the main hurdles to a $1.2 billion, American-backed project to send surplus electricity from Central Asia to energy-hungry Afghanistan and Pakistan. Now comes another: there is unlikely to be any surplus electricity. ... The concept, first aired eight years ago, was simple. In summer, when Afghanistan and Pakistan most need electricity, melting snow fills hydropower reservoirs beyond capacity in Tajikistan and Kyrgyzstan. The idea was to harness the spillover, generating electricity to send south along a transmission line to needier places (see map). In winter, as rivers freeze and both former Soviet republics themselves face dire electricity shortages, all the electricity generated would be kept at home. ... But in the years since Western governments mooted the 1,200-kilometre (750-mile) power line, known as CASA-1000, electricity shortages in Tajikistan and Kyrgyzstan have worsened. This summer, to conserve water in readiness for the winter, Kyrgyzstan is actually importing electricity from Tajikistan.

Wind and solar power are even more expensive than is commonly thought ... SUBSIDIES for renewable energy are one of the most contested areas of public policy. Billions are spent nursing the infant solar- and wind-power industries in the hope that they will one day undercut fossil fuels and drastically reduce the amount of carbon dioxide being put into the atmosphere. The idea seems to be working. Photovoltaic panels have halved in price since 2008 and the capital cost of a solar-power plant—of which panels account for slightly under half—fell by 22% in 2010-13. In a few sunny places, solar power is providing electricity to the grid as cheaply as conventional coal- or gas-fired power plants. ... But whereas the cost of a solar panel is easy to calculate, the cost of electricity is harder to assess. It depends not only on the fuel used, but also on the cost of capital (power plants take years to build and last for decades), how much of the time a plant operates, and whether it generates power at times of peak demand. To take account of all this, economists use “levelised costs”—the net present value of all costs (capital and operating) of a generating unit over its life cycle, divided by the number of megawatt-hours of electricity it is expected to supply. ... The trouble, as Paul Joskow of the Massachusetts Institute of Technology has pointed out, is that levelised costs do not take account of the costs of intermittency.* Wind power is not generated on a calm day, nor solar power at night, so conventional power plants must be kept on standby—but are not included in the levelised cost of renewables. Electricity demand also varies during the day in ways that the supply from wind and solar generation may not match, so even if renewable forms of energy have the same levelised cost as conventional ones, the value of the power they produce may be lower. In short, levelised costs are poor at comparing different forms of power generation. ... the most cost-effective zero-emission technology is nuclear power.

Coal? Or the Sun? The power source India chooses may decide the fate of the entire planet. ... Already Earth’s fastest-growing major economy and its biggest weapons importer, India is on track to become the world’s most populous nation (probably by 2022), to have its biggest economy (possibly by 2048), and potentially to build its biggest military force (perhaps by 2040). What China was in the American imagination in the 1990s and 2000s, India will be in the next two decades—a cavalcade of superlatives, a focus of fears. ... officials and academics have long argued that Western nations are demanding that India industrialize without burning even a fraction of the fossil fuels that developed nations consumed when they industrialized. And Indians resent that Western nations insist on the right to judge Indian performance while refusing to help with the cost of transition. ... India’s demand for electricity is widely expected to double by 2030. …= Soon after being elected prime minister in 2014, he announced that India would produce 100 gigawatts of solar power by 2022 (the US now has about 20 gigawatts). ... To generate electricity from it, India plans to build 455 new coal-fired electric power plants, more than any other nation—indeed, more than the US now has. (India’s existing 148 plants, which provide two-thirds of its electricity, are among the world’s dirtiest and most inefficient.)

Producing hydrogen now costs less and emits less carbon than ever before. In part, that is the result of the United States’ newfound abundance of natural gas, the source of most of the hydrogen produced. But it is also the result of technological improvements in the process of "reforming" natural gas into hydrogen. It now costs around as much to produce a gallon of gasoline as it does to produce the energy-equivalent amount of hydrogen with natural gas. Meanwhile, another method of producing hydrogen-electrolysis, which uses electricity to split water into hydrogen and oxygen-has seen major cost reductions as well. What makes electrolysis particularly attractive is that when powered by renewable sources such as wind and solar power, it directly emits zero carbon. ... Hydrogen storage has also improved. Prototypes used to feature bulky containers that were retrofitted into vehicles designed for conventional engines. But the latest tanks save space by being better integrated into the design of a car and by safely storing hydrogen at a higher pressure, leaving more room for passengers and their belongings. This new generation of containers allows a car powered by hydrogen fuel cells to travel as many miles on a single tank as a gasoline vehicle can and take about the same amount of time to refuel. ... The obstacles to distribution are beginning to fall away, too. True, with relatively few dedicated pipelines in existence, hydrogen has yet to show up at the vast majority of gas stations. But there are promising work-arounds. Most of the developed world does have good natural gas distribution infrastructure, which could feed smaller reactors that produce hydrogen. Hydrogen could also be produced on-site through electrolysis. ... estimates of what it would cost to mass-produce fuel-cell systems have decreased tremendously, from $124 per kilowatt of capacity in 2006 to $55 per kilowatt in 2014. The durability of these systems has improved dramatically as well, and they now meet the expectations of customers used to conventional automobiles.

Is cold fusion truly impossible, or is it just that no respectable scientist can risk their reputation working on it? ... cold fusion (or LENR, for ‘low-energy nuclear reaction’) is the controversial idea that nuclear reactions similar to those in the Sun could, under certain conditions, also occur close to room temperature. ... was popularised in 1989 by Martin Fleischmann and Stanley Pons, who claimed to have found evidence that such processes could take place in palladium loaded with deuterium (an isotope of hydrogen). A few other physicists, including the late Sergio Focardi at Bologna, claimed similar effects with nickel and ordinary hydrogen. But most were highly skeptical, and the field subsequently gained, as Wikipedia puts it, ‘a reputation as pathological science’. ... We know that huge amounts of energy are locked up in metastable nuclear configurations, trapped like water behind a dam. There’s no known way to get useful access to it at low temperatures. ... There are credible reports that a 1MW version of his device, producing many times the energy that it consumes, has been on trial in an industrial plant in North Carolina for months, with good results so far. And Rossi’s US backer and licensee, Tom Darden – who has a long track record of investment in pollution-reducing industries – has been increasingly willing to speak out in support of the LENR technology field. ... We should certainly be very cautious about such surprising claims, unless and until we amass a great deal of evidence. But this is not a good reason for ignoring such evidence in the first place, or refusing to contemplate the possibility that it might exist.

All told, the company spent more than $600 million. In its brief time in operation, it generated $2.3 million in revenue; when it filed for bankruptcy it listed assets of $58.3 million. ... The next generation of biofuels, made from plants and biowaste (so-called cellulosic materials), which have lower carbon emissions than oil, were a particular passion. Khosla invested hundreds of millions of dollars in about a dozen biofuel and biochemical companies. ... His ambitions were audacious. Khosla declared “a war on oil.” As he wrote in 2006, “I believe we can replace most of our gasoline needs in 25 years with biomass.” He dismissed incumbent energy companies in a 2007 interview as not investing heavily in biofuels because they weren’t “used to innovation and the rate of innovation we are likely to see in this business.” ... Unlike most failed startups, KiOR hasn’t just shut its doors and disappeared into oblivion. Today recriminations, investigations, and litigation continue to surround it. The Securities and Exchange Commission has been examining whether the company made false statements, including on a critical point: the yield of its biofuel (the amount that can be made per ton of wood chips). Two KiOR executives and Khosla himself are also facing a class action suit alleging that company executives misled investors about production volumes and yield. ... The state of Mississippi is also suing Khosla and key KiOR executives on similar grounds, claiming they hoodwinked the state to obtain a $75 million loan.

This is the face of nuclear development in the United States today: slow, over-budget, economically untenable. Yet the dream of a nuclear-powered society is still alive. Nationwide, we get about 20 percent of our electricity from nuclear. It produces the lion's share­ (64 percent) of our clean energy, provided that by "clean," you mean anything but fossil fuels. In addition to Watts Bar 2 there are four other reactors currently under construction in this country, signaling that perhaps America has a renewed interest in going nuclear. ... Look abroad and there's even more reason for nuclear advocates to be hopeful. China is leading a renaissance in nuclear energy: Today that country gets only 2.5 percent of its electricity from nuclear, but it has 21 reactors under construction, more in the works, and a growing business selling reactors to countries like Pakistan, Argentina, and the United Kingdom. This vigor marks a level of nuclear investment the world has not seen since the heyday of American atomic enthusiasm, when 58 reactors came online between 1965 and 1980. ... What happens next depends on whether nuclear boosters can solve the three key problems that have plagued American nuclear power, and left places like Watts Bar in perpetual limbo. ... nuclear power plants can generate tremendous amounts of energy. But while it's expensive to develop any kind of energy infrastructure, the cost of nuclear energy has not fallen over time. There is no Moore's Law in play here. ... Not only are China's reactors using a standardized design with some modular parts, but the entire construction process is performed by a dedicated crew that travels from reactor site to reactor site.

A critical part of any analysis of high-renewable systems is the cost of backup thermal power and/or storage needed to meet demand during periods of low renewable generation. These costs are substantial; as a result, levelized costs of wind and solar are not the right tools to use in assessing the total cost of a high-renewable system ... High-renewable grids reduce CO2 emissions by 65%-70% in Germany and 55%-60% in California vs. the current grid. Reason: backup thermal capacity is idle for much of the year ... High-renewable grid costs per MWh are 1.9x the current system in Germany, and 1.5x in California. Costs fall to 1.6x in Germany and 1.2x in California assuming long-run “learning curve” declines in wind, solar and storage costs, higher nuclear plant costs and higher natural gas fuel costs ... The cost of time-shifting surplus renewable generation via storage has fallen, but its cost, intermittent utilization and energy loss result in higher per MWh system costs when it is added ... Balanced systems with nuclear power have lower estimated costs and CO2 emissions than high-renewable systems. However, there’s enormous uncertainty regarding the actual cost of nuclear power in the US and Europe, rendering balanced system assessments less reliable. Nuclear power is growing in Asia where plant costs are 20%-30% lower, but political, historical, economic, regulatory and cultural issues prevent these observations from being easily applied outside of Asia ... National/cross-border grid expansion, storing electricity in electric car batteries, demand management and renewable energy overbuilding are often mentioned as ways of reducing the cost of high-renewable systems. However, each relies to some extent on conjecture, insufficient empirical support and/or incomplete assessments of related costs

Warren Buffett controls Nevada’s legacy utility. Elon Musk is behind the solar company that’s upending the market. Let the fun begin. ... SolarCity’s success is partly because the government provides subsidies and enables an arrangement called net metering, which allows homeowners with panels to sell back to the grid any solar energy they don’t use. This helps offset their cost of power when the sun’s not shining. Like more than 40 other U.S. states, Nevada forces utilities to buy the excess energy at rates set by regulators—usually the same rate utilities charge (hence, the net in net metering). In Nevada, it’s worked well. So well, in fact, that NV Energy, the state’s largest utility, is fighting it with everything it’s got. ... In just a decade, solar has gone from an enviro’s dream to a serious lobby that will be fighting these kinds of battles nationwide for years. ... Power companies may not be winning any popularity contests, but they’re developing their own renewable energy to keep up with changing attitudes and to meet state mandates.

After selling 7 deals in 7 years for $7 billion, press-shy wildcatter Trevor Rees-Jones is better equipped than anyone to pick through the wreckage of the oil and gas bust. ... With plenty of natural gas to work with, Rees-Jones is looking for oilfields that enjoy the same low-cost advantage as his Marcellus gas operation. ...as the oil bust grinds on, we will learn which oilfields are the best, because they will be the last spots with drilling rigs still operating. And it’s in and around those places where he hopes to find assets to buy. ... There are plenty of sweet spots in North Dakota, Colorado and the Eagle Ford field in Texas. His team has been eyeing some multilayer shale formations in Oklahoma and is developing some conventional (that is, nonshale) fields that had been overlooked in recent years, including one in Florida. But ultimately, he says, “the Permian Basin would be my favorite place. There is just so much oil out there.”

One thing we are exceptionally good at in the West is to blame China for pretty much anything that goes haywire. If you believe various commentators, it is all China’s fault that global equity markets have caught a serious cold more recently and, before that, China was blamed for the extraordinary weakness in industrial commodity prices. They have weakened - or so the argument goes - because China’s growth is not quite what it used to be, and commodity producing countries are over-producing as a result. ... Whilst entirely correct that China’s GDP growth rate has indeed slowed substantially, perhaps someone should consider whether China is as much the consequence as the cause; whether China is in fact a victim rather than a villain? Let me explain. ... I see no reason why the present combination of low oil prices and attractive foreign exchange rates shouldn’t invigorate economic growth across emerging markets ... EM equities could quite plausibly end up being the bargain of the year, although I am concerned about corporate leverage in many EM countries. One would therefore have to step carefully ... Finally a general observation: This is not a repeat of 2008, as many have suggested. An EM crisis is not likely to do nearly as much damage to the financial system in our part of the world, as the GFC did. Why? Because the banking system in DM countries have only limited exposure to corporates in EM countries.

“From the first 12 hours, decisions were issued,” says Prince Mohammed. “In the first 10 days, the entire government was restructured.” He spoke for eight hours over two interviews in Riyadh that provide a rare glimpse of the thinking of a new kind of Middle East potentate—one who tries to emulate Steve Jobs, credits video games with sparking ingenuity, and works 16-hour days in a land with no shortage of sinecures. ... The prince plans an IPO that could sell off “less than 5 percent” of Saudi Aramco, the national oil producer, which will be turned into the world’s biggest industrial conglomerate. The fund will diversify into nonpetroleum assets, hedging the kingdom’s nearly total dependence on oil for revenue.

Over its 118-year history, Bechtel has arguably changed the face of the physical world more than any other company, anywhere. Here’s a short list of its signature projects: the Hoover Dam (completed in 1936), the Trans-Arabian Pipeline (1950), the Bay Area Rapid Transit system (1976), NASA’s Space Launch Complex 40 (1992), the Channel Tunnel (1994), and the Athens Metro (2004), not to mention Jubail in Saudi Arabia, where Bechtel has been overseeing the construction of one of the world’s largest industrial cities for over 40 years. It recently completed the Hamad International Airport in Qatar, which is built to eventually handle more than 50 million passengers a year (matching the traffic at New York’s J.F.K.). And with BrightSource Energy, it constructed the Ivanpah solar electric complex, a landscape of 350,000 heat-generating mirrors in California’s Mojave Desert that’s the largest solar-thermal plant on the planet. ... Bechtel is currently overseeing a major portion of Crossrail, the largest infrastructure installation in ­Europe—a network of tunnels and rail links in London that will connect the city to the outer suburbs. And the company has developed the first liquefied natural gas (LNG) export terminal in the continental United States. ... The parade of projects has made Bechtel one of the half-dozen largest privately held companies in the U.S., with $40 billion in 2015 revenue, outranking the likes of chocolate giant Mars and grocery chain Publix. ... In an increasingly competitive environment, the company needs to be able to attract the best engineers and managers to thrive. Today those elite recruits demand to understand the values of the companies that are wooing them. “Ours is a people business that depends on fielding the most capable project teams in the world,” he says. Like many other major private companies, Bechtel’s leaders feels they can no longer afford to hide behind its closely held status and let others control the narrative about its business. ... Bechtel must win on competence, not contacts. It’s all about a company’s ability to deliver a job on schedule and on budget, at the lowest cost.

Over half a century (the company will celebrate its 50th anniversary in August) Vitol has never suffered an annual loss. Profits surged from just $22.9 million in 1995 to a record $2.28 billion in 2009, according to documents reviewed by Bloomberg. At its peak, Vitol’s return on equity, a measure of profitability compared with the money that partners have invested, was a geyserlike 56 percent. Even Wall Street pales in comparison; Goldman Sachs’s best ROE since going public in 1999 is 31 percent. ... Vitol, which trades about 6.5 percent of the world’s oil, fights in a tough arena. It competes with other independents such as Glencore, Trafigura Group, Mercuria Energy Group, Gunvor Group, and Castleton Commodities International. It also grapples for market share against Big Oil’s in-house trading arms, including those of BP, Royal Dutch Shell, Total, and, increasingly, state-owned Chinese oil companies. ... As for the future, Vitol faces a daunting fact: The best days of oil trading are almost undoubtedly in the rearview mirror. Margins are shrinking as the market becomes ever more transparent and competitors emerge fighting for the same barrels. Even as Vitol sinks more capital into assets such as refineries and terminals, returns are falling. Last year’s ROE was 16 percent—for Vitol, a less-than-stellar number. ... In August 1966, two Dutchmen, Henk Viëtor and Jacques Detiger, invested 10,000 Dutch guilders (about $2,800 at the time) to start a Rotterdam company with the aim of buying and selling refined petroleum products by barge up and down the Rhine. They crunched Viëtor and “oil” to get Vitol. The money was a loan from Vietor’s father and the pair agreed to pay an annual interest rate of 8 percent. ... The modern Vitol began to take shape in 1990, when Detiger and seven other partners sold the company for $100 million to $200 million (the actual figure wasn’t disclosed) to a group of about 40 employees, including Taylor.

Today the Glencore CEO believes that the industry is suffering from a glut of commodities on world markets. If mining companies could only get a handle on production, Glasenberg says, prices would inevitably rise. “Mining companies have to wake up and stop increasing supply and look at demand,” he says. “And that is it.” ... When you travel around the Copperbelt in Africa, it quickly becomes clear just how big a player Glencore is. At the tiny Kolwezi airport in the DRC’s southernmost province of Katanga, Glencore paid to rebuild the small runway and put up new buildings in 2011. On the road leading to the Mutanda copper mine, our vehicle rumbles over a new bridge crossing the Lualaba River, funded recently by Glencore at a cost of $10 million. ... For Glencore’s long haul as a public company, Glasenberg must continue to do what investors have demanded over this bruising year: Control spending and cut debt. Meanwhile, it waits for markets to rationalize.

Since launching in 2006, it has raised billions of dollars and installed hundreds of thousands of home solar systems, more than anyone in America. But lately SolarCity is in deep trouble. Customers aren't signing up in the numbers they did two years ago, back when oil was trading at more than $100 a barrel. U.S. lawmakers are investigating the company's financial practices. Earlier this year, in the span of two months, the company's stock lost 70 percent of its value. ... The company, in fact, could be one of the most risk-laden in operation today. To install solar systems across 27 states and Mexico, SolarCity takes on gobs and gobs of debt — billions of dollars a year. The eventual goal is to create a massive network of home solar systems. The problem is, if customers stop paying their SolarCity energy bills or investors stop lending, the company will blow up like the subprime housing bubble. ... As they built solar systems on one rooftop after another, they also burned through more and more cash. To attract more lenders, the company packaged and resold the debt to banks as complex bonds and other financial products that handed the financiers shares of SolarCity's tax credits.

This is Tiksi, a decaying town in the Russian Arctic. Here, more than 4,000 kilometres from Moscow on the coast of the Laptev Sea, 4,550 people inhabit a wasteland whipped by blizzards and wrapped in polar night for half of the year. Surrounded by thousands of kilometres of permafrost, the town has no outside land connection. Its main lifeline is an airport manned by a military unit, a relic of Soviet times, when the country’s Arctic territory was dotted with military bases. ... Global warming, which is causing Arctic sea ice to melt at an unprecedented pace, is watched with alarm in other parts of the world. But in Russia, the rising temperatures are fuelling expectations that the waters along its northern coast, long a frozen frontier, could once again become a vibrant shipping line, rivalling some of the world’s most important trading routes. ... In theory, the NSR could compete with routes that have dominated global maritime transport for decades. Calculated between the ports of Yokohama and Hamburg, the 7,200 nautical miles shipping distance between Asia and Europe using the NSR is 37 per cent shorter than the southern route via the Suez Canal. ... Total cargo transport volumes plummeted from a peak of 6.58 million tonnes in 1987 to just 1.46 million tonnes in 1998. ... total cargo volumes recovered to 5.15 million tonnes last year, almost back to the level of 1990. ... The idea of mastering nature is very much part of Russian identity, as is the myth of conquering the Arctic, despite the decline of Moscow’s footprint in the far north over the past 25 years. ... Since there is still a lot of ice on the northern oceans, this makes passages risky and drives up insurance premiums. Only ships with reinforced hulls can use the NSR with relatively few restrictions and even for them passage times remain unpredictable. The waters off Russia’s coast are also far shallower than those on the southern route, meaning that the world’s largest, most cost-efficient container ships can’t be used.

Sensors gave machines the ability to perceive things like light, altitude, and moisture by converting stimuli into ones and zeros. The coming revolution will be filled with what are called “actuators,” which do the reverse. They allow machines to simplify our world by converting those ones and zeros back into some form of force, such as light or magnetic waves, or even physical pressure that can push objects. The actuator, like the sensor before it, is part of technology’s relentless quest to make machines do more and more things with greater and greater efficiency, as epitomized by the microprocessor, the most efficient information device ever made. ... whole industries will be reshaped. The market for fossil fuels, for example, will suffer a new setback, as power for your electric vehicle can be delivered from a simple charging plate that works in much the same way your Apple Watch gets juiced up in its cradle. The life-sciences market will have to adjust to a world where tests can be performed and therapies delivered from a capsule you swallow to detect cancer. And robots that use actuators to move parts with great precision—and can be recharged wirelessly—will take on more manufacturing tasks. ... One of the most promising is made of a compound of gallium and nitride, referred to as GaN. It’s far more efficient than silicon at converting the movement of electrons into energy radiating outward.

The medical student told me to use his name. He said he didn’t care. “Maduro is a donkey,” he said. “An a**hole.” He meant Nicolás Maduro, the President of Venezuela. We were passing through the wards of a large public hospital in Valencia, a city of roughly a million people, a hundred miles west of Caracas. The hallways were dim and stifling, thick with a frightening stench. ... Why were hospitals so heavily guarded? Nobody threatened to invade them. The guards had orders, it was said, to keep out journalists. Exposés had embarrassed the government. ... For decades, the country had been ruled by two centrist parties that took turns winning elections but were increasingly out of touch with voters. A move to impose fiscal austerity was rejected, in 1989, with a mass revolt and countrywide looting—a paroxysm known as the Caracazo—which was put down by the Army at a cost of hundreds, perhaps thousands, of lives. Chávez was an Army lieutenant colonel, from a humble background—his parents were village schoolteachers. He crashed the national stage in 1992, by leading a military-coup attempt. The coup failed, and Chávez went to jail, but his televised declarations of noble intent caught the imaginations of many Venezuelans. He offered a charismatic alternative to the corrupt, sclerotic status quo. After his release, he headed a small leftist party and easily won the Presidency. ... He soon rewrote the constitution, concentrating power in the executive. ... After Chávez barely survived a 2002 coup attempt, the Cubans also sent teams of military and intelligence advisers who taught their Venezuelan counterparts how to surveil and disrupt the political opposition Cuban-style, with close monitoring, harassment, and strategic arrests. ... Polar employs about thirty thousand workers (it is the country’s largest private employer) and is responsible for more than three per cent of Venezuela’s non-oil gross domestic product. Besides corn flour and the country’s top-selling beer, Polar produces pasta, rice, tuna fish, wine, ice cream, yogurt, margarine, ketchup, mayonnaise, and detergent. Yet it operates in an atmosphere of continual uncertainty, its planners and logistics mavens never sure what roadblock or subterfuge the government will toss up next. ... The crisis has a small but crucial constituency, starting with the generals and other high government officials who are thriving financially, mainly through smuggling, graft, and import fraud.

While the United States may be outperforming other advanced economies, it is underperforming relative to its own potential. Slower growth has been feeding on itself in a vicious cycle of weak demand, low investment, and slowing productivity growth. In real terms, the median US household income is back at its level of two decades ago. Meanwhile, the vast majority of income gains have gone to households in the top quintile, which do not have the same propensity to spend. This in turn hobbles aggregate demand in the short term—and when businesses do not see the need to invest, it reinforces the cycle. US productivity growth recently turned negative for the first time in 30 years. ... A new briefing paper from the McKinsey Global Institute, The US economy: An agenda for inclusive growth, suggests that the United States can regain its dynamism and restore the sense that everyone is advancing together. This effort can take many forms: reengaging more workers in the labor force, enabling them to move to more productive jobs and locations, creating an environment that fosters new business formation and healthy competition, and helping declining cities reinvent themselves. When the economy is firing on all cylinders, income gains tend to be more broad-based and less easily concentrated.
- Digitization
- Globalization and trade
- America’s cities
- Skills
- A resource revolution

1.   Still brooding about his loss of the popular vote, Donald Trump vows to win over those who oppose him by 2020.  ...
2.   The combination of tax cuts on corporations and individuals, more constructive trade agreements, dismantling regulation of financial and energy companies, and infrastructure tax incentives pushes the 2017 real growth rate above 3% for the U.S. economy.  Productivity improves for the first time since 2014.
3.   The Standard & Poor’s 500 operating earnings are $130 in 2017 and the index rises to 2500 as investors become convinced the U.S. economy is back on a long-term growth path.  ...
4.   Macro investors make a killing on currency fluctuations.  ...
5.   Increased economic growth, inflation moving toward 3%, and renewed demand for capital push interest rates higher across the board.  The 10-year U.S. Treasury yield approaches 4%.
6.   Populism spreads over Europe affecting the elections in France and Germany.  ...
7.   Reducing regulations in the energy industry leads to a surge in production in the United States. Iran and Iraq also step up their output.  ...
8.   Donald Trump realizes he has been all wrong about China.  Its currency is overvalued, not undervalued, and depreciates to eight to the dollar.  Its economy flourishes on consumer spending on goods produced at home and greater exports.  Trump avoids punitive tariffs to prevent a trade war and develops a more cooperative relationship with the world’s second largest economy.
9.   Benefiting from stronger growth in China and the United States, real growth in Japan exceeds 2% for the first time in decades and its stock market leads other developed countries in appreciation for the year.
10. The Middle East cools down.  ...

Like oil and coal, kitchen scraps can be converted into energy. But unlike oil and coal, which are expensive to dig out of the ground, food waste is something that cities will actually pay someone to haul away. Many innovative municipalities, in an effort to keep organic material out of dumps — where it generates methane, a greenhouse gas — already separate food from garbage and send it to old-fashioned compost facilities. There, workers pile the waste in linear heaps called windrows, mix it with leaves and grass clippings and let oxygen-dependent microbes transform the gunk into lovely dark fertilizer. But the more material you compost, the more space (and gas-guzzling bulldozers and windrow turners) you need to process it. It can get a little smelly, too, which is yet another reason New York City, which generates about one million tons of organic waste a year, will probably never host giant compost farms. ... But anaerobic digestion, in which food is broken down by microbes inside tall, airtight silos, has a real shot at scaling near densely populated areas. The footprint of such plants is relatively small, and their odors are mechanically contained, if they are operated properly. Digesters do cost more to build and run than compost sites, but they more than make up for that by generating two separate revenue streams: fertilizer and biogas, which is chemically similar to natural gas and can be burned to make heat and electricity. ... The nation’s industrialized compost operations bring in roughly $3 billion annually; American farmers bought $21.2 billion of conventional fertilizers in 2016.