A weblog by David Morton
The Price of Oil - 60 Minutes feature on speculative oil pricing during 2007-2008. Follows the rise and eventual collapse of a barrel of light, sweet crude.
There were no supply disruptions that could have justified such a big increase.
I meant to post this last week, but the holiday schedule threw me off. Oil Is Cheap. Why Is Gas, Which Is Made From Oil, Even Cheaper? is a good primer on the relationship between oil and gas prices, specifically why they don’t always follow the exact same trajectory.
The world’s oldest, critical-mass renewable energy source is getting a reprise around the Ohio and Mississippi Rivers:
Massachusetts-based Free Flow Power Corp. is studying the prospects of planting thousands of small electric turbines in the river bed at 55 sites from St. Louis to the Gulf of Mexico, figuring together they could generate enough power to supply 1.5 million homes. The private startup says the cumulative output of 1,600 megawatts would be the equivalent of three small coal-fired power plants or one or two nuclear ones.
The plan, with a possible $3 billion price tag, uses hydrokinetics — electrical generation from river currents or ocean waves. The river’s flow would spin submerged turbines about two feet in diameter and perhaps made of carbon fiber or some other lightweight source durable enough to withstand being hit by debris swept downriver while not interfering with barge traffic.
Three letters missing from this story: T V A, which continues to rely less and less on hydroelectric as dwindling rainfall reduces its potential.
For more on hydrokinetic generation, check out Tapping the Vortex for Green Energy.
Andrew Simms makes the case for a better global energy system:
Financially and ecologically, we are overextended. We have taken for granted, and abused, our underlying operating systems - the biosphere and our social fabric - by privileging finance and over-consumption. Yet, it is the core economy of society and a biosphere in equilibrium that really holds things together, not the banks. A massive transformation is needed to compress global income inequality, raising the incomes of the poor and lowering the consumption of the rich. We need an economic system that builds strong human and communal relationships and steers us towards living within our environmental means.
As energy prices continue to rise, some non-profits are starting to provide green renovation work, free energy audits, and compact-fluorescent light bulbs for low-income housing:
Low-income people who live in old or flimsy housing are becoming prime targets for cities and groups intent on slashing energy use.
Recent efforts to cut energy consumption in the home have focused on new construction, often in more affluent areas and public buildings. Now, community organizations and cities that have embraced the green effort are homing in on low-income houses and apartments to reduce emissions and help poor people lower their utility bills.
As the UN meets to discuss climate change policy next week in Poland, a report from the Harvard Project on International Climate Agreements urges wealthy nations to take an aggressive lead to cut emissions ahead of developing countries:
The Harvard report proposes introducing national carbon taxes, linking emissions trading schemes or pursuing a series of simpler, possibly bilateral agreements that separately address the different gases and their sources as ways to fight warming.
The rub will be drawing the line between “wealthy” and “developing” countries in 2012 when Kyoto expires. The Harvard report focuses on per capita emissions, but that distinction will do little to address the great big red elephant in the room.
Granted, per-capita emissions are certainly higher for the U.S., Canada, and much of Europe, but the rising populations of China and India pose a serious threat to the world’s climate. And just as we can no longer think of our economy without its global prefix, we can’t exactly turn a blind eye to some of these “developing” nations, especially when they happen to be some of the world’s most egregious carbon emitters.
The U.S. can and should lead on carbon reduction. If nothing else, we want to make sure that the bulk of the tools and technologies are Made in the USA, but if we give China and India a free pass, progress on climate will remain limited and feckless.
As many of my friends and colleagues will attest, when hard economic times hit, marketing is the first item to be cut from budgets. Now, it looks like renewable energy is not far behind in line to the chopping block.
NYT reports that many global investors are dropping or at least stalling clean tech projects to shore up capital investments during the downturn — even as political support for clean tech and capping carbon has become a priority both here and in Europe:
President-elect Barack Obama and the European Union have vowed to stick to commitments to cap emissions of carbon dioxide and invest in new green technologies, arguing that government action could stimulate the economy and create new jobs in producing sustainable energy.
But as the United Nations prepares to gather the world’s environment ministers in Poznan, Poland, next week to try to agree on a new treaty to reduce emissions, both the political will and the economic underpinnings for a much more assertive strategy appear shakier than they did even a few weeks ago.
But I wouldn’t go so far as to say that political will has in fact weakened. Obama continues to roll out fairly dramatic proposals under a Green New Deal. And coupled with Henry Waxman taking over the Energy & Commerce Committee last week, it’s pretty clear that at least domestically, this issue has some real political teeth.
Times are tough all around, and the last week has brought nothing but bad news for both traditional energy and clean tech (and Detroit, Citigroup, et al.). T. Boone Pickens is delaying his $10 billion windfarm in Texas. Even Brazil’s investor-friendly ethanol boom has come to a halt as many start-ups now face bankruptcy.
Here’s a bit of good news, though. Wal-Mart announced last week that it will purchase 226 million kWh of clean electrons from a Duke Energy wind farm in Notrees, Texas. Last year, Wal-Mart began to power stores in California and Hawaii with solar.
Joseph Romm reminisces about the time Detroit automakers dropped the taxpayer’s ball on hybrid technology:
When I was at the Department of Energy in the 1990s, we partnered with G.M., Ford and Chrysler to speed the technological development of hybrid gasoline-electric cars, given that increased fuel efficiency and advanced hybrids vehicles were (and remain) clearly the best hope for cutting vehicle greenhouse gas emissions and ending our oil addiction. This partnership was an informal deal between the Clinton administration and the car companies. We did not pursue fuel economy standards and the car companies promised to develop a triple-efficiency car (80 miles per gallon) by 2004.
In one of the major blunders in automotive history, G.M. and Ford and Chrysler walked away from hybrids as soon as they could when the Bush administration came in — and after taxpayers had spent over $1 billion on the program. Ironically, the main result of our government-industry partnership (which had excluded foreign automakers) was to motivate the Japanese car companies to develop and introduce their own hybrids.
Throw another log onto the fire of indignation?
Kate Sheppard points out that Waxman’s challenge and subsequent victory represents more than just a change in leadership:
But really, this isn’t about Waxman himself, though environmentalists are certainly cheering yesterday’s vote. It’s about the changes in the House that precipitated this shift. Waxman defeated Dingell by a vote of 137-122, which is of course close. But considering the historical inclination to let seniority prevail and the anticipated lack of desire among Democrats to overhaul such an important committee so soon after a successful election, Waxman’s win is truly a sign that there is fervent desire for change on this front.
Assuming that the sole issue of Waxman’s challenge was in fact cap and trade legislation, the conclusion is pretty clear: Cap & Trade will happen in the next 2 years. Democrats probably have the votes for it, and it was never off the agenda as Nordhaus & Shellenberger hoped.
Henry Waxman’s ascent to chair the House Energy & Commerce Committee has environment and energy camps split down the middle. Environmentalists are ecstatic, but the energy business community is a little apprehensive. The split revolves around Cap & Trade legislation, and the degree of enforcement that will come out of committee:
Waxman’s decision to challenge Dingell for chairmanship of the powerful committee was largely motivated by fundamental differences between the two men on the design of a US cap-and-trade programme. Waxman, a long-time ally of the environmental community, favours stringent short-term emissions reduction targets, auctioning emissions allowances, and very limited cost-containment mechanisms, such as offsets. Dingell, a long-time ally of the automobile industry, favoured more lenient short-term targets and a certain amount of emissions allowances given for free to regulated companies to help them adjust to the increased cost of doing business that will result from climate policy in the near term.
Here, I tend to side with the environmentalists. Cap and trade will be difficult to enforce by nature of its design. The tougher the bill is straight out of committee, the less leeway opposition will have to water it down. I prefer a carbon tax BTW, but that’s neither here nor there. Also, I’m still trying to get my head around the smorgasbord of responsibilities within the House Energy & Commerce Committee.
Volkswagen diesel car wins ‘Green Car of the Year’ at Los Angeles Auto Show:
Volkswagen’s U.S. chief, Stefan Jacoby, said diesels have emerged as an alternative to hybrids such as Toyota Motor Corp’s popular Prius.
“It’s a breakthrough in this country,” Jacoby said. “I don’t want to say it’s better than other technologies, but it’s a real alternative to hybrids. It brings fuel consumption down, it’s environmentally friendly, and — this is a difference with a Prius — this is really fun to drive.”
Volkswagen’s five-passenger Jetta TDI, which boasts a fuel efficiency of 41 miles per gallon, starts at $21,990, compared with $17,340 for a traditional Jetta.
The Jetta TDI beat out finalists including BMW’s 335d diesel sport sedan, Ford Motor Co’s Fusion Hybrid passenger sedan, General Motors Corp’s crossover Saturn Vue 2 Mode Hybrid, and the smart fortwo mini car.
EcoGeek talks about the Diesel Jetta, and has had fantastic coverage of the LA Auto Show all week, including the electric MINI-E.
Everything is better in San Francisco.
While President-elect Obama prepares to put energy infrastructure into an economic stimulus plan, many traditional power companies are struggling to keep their lights on and their renewable electrons moving. The problem stems from limited available financing, and a shrinking cash flow while stocks plummet and commodity markets bottom out.
Rep. Henry Waxman (D-CA) will chair the House Energy & Commerce Committee after the Democratic caucus unseated veteran Rep. John Dingell (D-MI), today. Dingell was recently criticized for his complicated relationship with Detroit automakers (his wife is a former GM lobbyist).
On top of sporting a Moustache of Justice, Waxman is expected to bring a more environmentally-friendly approach to the committee.
Roger Ballentine sits down with Monica Trauzzi at E&ETV to discuss President-elect Obama’s opportunities to build a green energy platform within an economic package:
I think the first priority should be wrapping the green agenda into the economic recovery agenda in a way that is coherent and legitimate. I mean it has to be real and consistent with the objectives of the economic, whether it’s a second stimulus or whether it’s a more structured economic turnaround package, but green needs to be a piece of that. And not just for the sake of the environment, because I do think there’s tremendous economic payback from a lot of these investments that we talk about making in the green space.
Watch the video. A strong energy policy built on renewables is a win-win-win. It stabilizes and strengthens the economy. It protects the environment. And it decouples foreign policy from oil. Signs point towards a 44th President who understands these relationships.
Tuesday, the incoming chief of staff told business leaders that the Obama administration is prepared to throw long on energy & climate in their upcoming economic stimulus. From the Wall Street Journal:
Mr. Emanuel promised that a major economic stimulus would be “the first order of business” for Mr. Obama when he takes office Jan. 20. The focus of spending will be on infrastructure, specifically “green infrastructure,” which he said would include mass transit, upgraded electricity transmission lines, “smart” electrical meters that allow consumers to save money by using electricity at off-peak hours, and universal broadband Internet access, which he said would encourage telecommuting.
By focusing first on infrastructure, the incoming administration signals just how serious they take the “energy” side of the coin. I outlined my ideal green stimulus right after the election.
David Edwards, by way of Thomas Friedman.
Ken Cook claims that cellulosic ethanol production is driving up the cost of food:
Our country’s rush to ethanol contributed to a dramatic rise in grain and food costs at home and abroad, including, disturbingly, in developing nations where hunger is a perennial problem. The law of supply and demand is working just the way we’d expect: when you use over 25 percent of the U.S. corn crop to produce fuel, you reduce the global food supply and push grain prices skyward.
Jim Greenwood–channeling Michael Pollen–counters that the rise and fall of corn prices are a direct result of the oil market:
Crop prices have fallen dramatically in the past few months as oil and gas prices have declined. A barrel of oil cost $140 in July but is currently less than $65. Similarly, a bushel of corn that was more than $7.50 back in July is now less than $4, even while production of biofuels and other food, feed and fiber demands have all remained consistent.
The Consumer Price Index sides with Greenwood, and Deflation can be a silver lining or not, depending on where you went to school. And despite my bias against ethanol, I’m always skeptical when someone starts talking about “a simple case of supply & demand” as if the world operates like a Business 101 textbook.
Green Old Party is a pretty good intro to greening your conservative credentials with advice from David Frum (unemployed), John McCain (runner-up), and Karl Rove (meh). Wait a sec…
In a similar vein, I started reading Gingrich’s A Contract with the Earth over the weekend, and I was enjoying it. Then I caught wind of Newt talking Prop 8, trying to beef up his “social conservative” credentials, and it’s kind of hard to take anything he says or writes seriously for the present moment. I’ll try not to judge him too harshly because it’s pretty clear he’s positioning himself for 2012. Still.