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A Double Dip Recession Looms as Oil Prices Rebound

January 18th 2010

Energy Topics - Oil Barrels 400px

In 2010, oil demand will resume its upward march. OPEC will respond by increasing supply—but the increase will come too late to keep prices down as emerging-market consumption pushes them up. In the extreme case, resurgent oil prices could drive the U.S. economy into a double-dip downturn. Here's what to expect, and what a limited oil supply will mean for the United States and the world.

As the global economy recovers, oil demand will continue to strengthen from the 85 million barrels per day that it hit in November. That's already 4 percent higher than it was at the recession's trough in May of last year. As a result, inventories both onshore and offshore have begun to decline. The number of tankers storing crude oil in the Gulf of Mexico, for example, fell to seven in October from a high of 22 in May. Read more ..

The Auto Edge

The Ultimate Driving Distraction: Electric Cars

January 11th 2010

Corporate Logos - Ford

This past week Ford Motor Company's president and CEO Alan Mulally gave the opening keynote speech at the 2010 Consumer Electronics Show in Las Vegas. The purpose of the presentation was to unveil an entire suite of new SYNC signature brand in-car innovations.

While the technology is undeniably exciting and amazing, it was darkly ironic given the amount of commotion that is currently going on around the country to try and eliminate “driving distractions.” If you think that the use of cell phones and texting has already created a safety problem, then you’re going to be shocked by what Ford now has in mind. Mr. Mulally actually seemed to champion and encourage the use of texting while driving when he rather gleefully announced that “Texting is now the favored form of communication for every age group,” within his description of Ford’s success in putting more than a million SYNC-equipped cars on American roads in 2009.

Incidentally, Ford wasn’t alone in exhibiting new “dashboard distractions” at CES; Kia showcased an elaborate Microsoft in-car multimedia system called UYO (which somehow stands for Your Voice), along with about 300 other in-vehicle exhibitors touting their own innovative products. Read more ..

Energy Politics

Senate Climate and Energy Bill Fight Expected Tough as Healthcare Reform

January 4th 2010

Environment Topics - Sao Paolo Pollution

Senate Democrats will face a problem when they return in January every bit as tough as crafting the healthcare bill: Assembling a climate and energy package that can be shoehorned into the election-year calendar.

Imposing limits on greenhouse gases is a White House and Democratic priority, but it’s stuck in line behind healthcare, Wall Street reform and jobs legislation.

It’s also become increasingly apparent since the Copenhagen climate summit that the Senate will go forward in a dramatically different direction than the House, which approved its own climate bill last summer.  Read more ..

Urban Transit

Bus Rapid Transit in Latin America--Successes But Miles to Go

December 28th 2009

Energy / Environment - Bogata Bus Line
Bogota Bus Rapid Transit

Over the past fifteen years, cities throughout Latin America have achieved a modest, yet significant revolution in urban design through the adoption and refinement of Bus Rapid Transit (BRT) systems. Promising the benefits of developed world transit systems at developing world prices, BRT has quickly become a popular policy initiative among national and municipal level Latin American policymakers charged with reducing the crippling congestion, choking pollution, and alarming accident rates characteristic of the largely unregulated bus transit systems in most cities throughout the region. Pioneered in the mid-sized Brazilian city of Curitiba in the 1970s, Bus Rapid Transit increased bus speeds and improved road safety by placing high-capacity buses within committed bus lanes which channel buses to a series of fixed stations, similar to light-rail or metro systems. Inspired by the success of Curitiba’s system, cities such as Bogotá and Quito have more recently made BRT the linchpin of their transit network, to considerable acclaim from the riding public and international observers alike. Read more ..

The Rail's Edge

The High-Speed Rail Gravy Train

December 21st 2009

Transportation Topics - Shinkansen bullet train

The U.S. High Speed Rail Association’s October conference opened like any large Washington gathering. The congressmen were seated in the front row. A powerhouse Beltway law firm laid out prints of its lobbyists’ biographies on a display table. And as the upscale J.W. Marriott meeting room went dark, a short film offered romantic visions of bullet trains in America’s future.

 As far back as 1965, planners, transportation experts, visionaries, and American train buffs — President Lyndon Johnson among them — have coveted the sort of sleek high-speed trains that crisscross much of Europe and Asia at speeds of more than 180 miles per hour. But after millions and millions of dollars spent studying, planning, and mostly falling short, the American incarnation of high-speed passenger rail is but a single line that travels from Washington to Boston at an average speed of under 80 miles per hour.

Now, though, the Obama administration is looking to change all that, starting with $8 billion in federal stimulus money to be awarded starting this winter. Equally captivated, Congress is considering adding as much as $4 billion more in next year’s budget. The House Transportation and Infrastructure Committee chairman, James Oberstar, a Minnesota Democrat, is talking $50 billion after that. Read more ..

Iran's Nukes

House to Take up Gas Sanctions on Iran

December 14th 2009

Iran - Iran Nuclear Equipment

The House is slated to vote in the coming days on bipartisan Iran sanctions legislation that targets companies supplying Iran with gasoline or helping the country expand its refining system. Iran is a major oil producer, but imports up to 40 percent of its gasoline because it lacks adequate refining capacity.

The plan is among several under consideration in Congress and the White House to pressure Iran over its nuclear program. The bill, sponsored by Foreign Affairs Committee Chairman Howard Berman (D-Calif.), has 343 co-sponsors. It would allow sanctions against companies that ship gasoline and other refined products to Iran, and also targets related services such as insurance and financing.

A bipartisan Iran sanctions package that the Senate Banking Committee unanimously approved in late October also targets the country's refined petroleum imports. However, the plans retain White House waiver authority that already applies to other energy sanctions under the Iran Sanctions Act of 1996. Read more ..


Icon or Omen? Dubai's Debt Problem and the Gulf

December 7th 2009

Arab Topics - Dubai aerial shot

Late on November 25, just before the start of the Islamic Eid festival and, coincidentally, Thanksgiving in the United States, Dubai's flagship investment company Dubai World announced that it would be requesting a six-month delay on paying its debts. Within hours, Dubai's reputation was being rewritten, and its ambition to be a financial center, building on its historic reputation as a focal point for regional trade, was being recast.

Uncertainty continued on November 30, when the Dubai government said that it would not guarantee Dubai World's debt. In any event, the larger story has been the nervousness of world financial markets, which are now also evincing worry about the debt of countries like Greece or Ireland. Within the Middle East, the focus is on the extent of support that Dubai will receive from Abu Dhabi, the neighboring -- and richer -- member sheikhdom of the United Arab Emirates (UAE), whether other city-states like Bahrain and Qatar are also at risk, and whether Dubai's links with Iran will change as a result of its financial situation. Read more ..

The Edge of Lithium

A Grey Goldmine: Lithium and Alt Energy in Bolivia

November 30th 2009

Latin American Topics - Bolivian Miner
Bolivian miner

According to Bolivian President Evo Morales, lithium is not only important to his country’s economic future but is “the hope of humanity,” as the lightweight metal efficiently stores energy capable of powering the eco-friendly cars of the future. Bolivia’s lithium reserves have made headlines in the past and once again currently. The country holds a total of 5.4 million tons of lithium, which is nearly half of the world’s known supply.

The Bolivian government now appears to be moving ahead with increasingly concrete plans for extraction and production of the metal. Experts from around the globe who recently gathered in Bolivia discussed new scientific findings and the possibilities herein contained.

Meanwhile, the U.S. and many other nations are preparing to meet in Copenhagen this December to discuss climate change and alternative energy policies. In order to understand recent developments in Bolivia’s lithium policy, it is necessary to examine new advancements in lithium technology, Morales’ overall policy of nationalization, alternative energy plans in the U.S. and Spain, and some of the concerns that have been raised.

New Lithium Technologies

According to the United States Geological Survey (USGS), one quarter of the lithium mined last year was used solely for lithium batteries, which operate portable electronic devices. The already rapidly increasing demand for lithium, the world’s lightest metal, which has a prodigious capacity for storing energy, is expected to rise dramatically as demand for electric cars, an alternative to gas-powered vehicles, are mass-produced and take to the roads. Read more ..

The Race for Alt-Fuel

International Expedition Investigates Climate Change, Alternative Fuels in Arctic

November 23rd 2009

Energy / Environment - USCG Polar Sea

Scientists from the Marine Biogeochemistry and Geology and Geophysics sections of the Naval Research Laboratory (NRL) organized and led a team of university and government scientists on an Arctic expedition to initiate methane hydrate exploration in the Beaufort Sea and determine the spatial variation of sediment contribution to Arctic climate change.

Utilizing the U.S. Coast Guard Cutter Polar Sea as a research platform, three cross-shelf transects were surveyed and sampled off Alaska's North Slope at Hammerhead, Thetis Island and Halkett, representing three regions of the Alaskan shelf. The expedition integrated expertise in coastal geophysics, sediment geochemistry, dissolved and free methane fluxes through the water column and into the atmosphere, sediment and water column microbiology and biogeochemistry and detailed characterization of the sub-seafloor geology.

“The objective of the sampling is to help determine variations in the shallow sediment and water column methane sources, methane cycling and the subsequent flux to the atmosphere,” said Richard Coffin, chief scientist, NRL Chemistry Division. Read more ..

Iran's Nukes

Saudi Oil Policy--An Unlikely Weapon for Pressuring Iran

November 16th 2009

Arab Topics - Saudi Oil

Among the policy suggestions for heading off Iran's emergence as a military nuclear power is the notion that Saudi Arabia should use its position—as the world's largest oil exporter and effective leader of the OPEC oil cartel—to apply pressure. The kingdom is increasingly concerned that nuclear weapons capability would confer on Iran the status of regional hegemon. But any hope that Saudi Arabia would intervene to stop that possibility, by pumping extra supplies to lower prices and decrease Iran's oil revenues, is probably misplaced.

Historically, Saudi Arabia has claimed that it will not use its leading role in the oil market for political purposes. In a June 2001 interview with the Financial Times, then Crown Prince Abdullah said: “Oil is a strategic commodity upon which the prosperity of the industrial as well as the developing countries depends. Our oil policy is a prudent one, seeking a balance between the interests of producers and consumers. It serves no purpose to speak about oil outside this framework.” Read more ..

Kicking our Oil Addiction

The Future of Oil in Mexico is in Crisis

November 9th 2009

Energy Topics - Oil Barrels 400px

Mexico is currently facing one of the biggest economic recessions in the country’s two hundred-year history of independence. Some Mexican policy makers blame the economic crisis on this year’s decrease in tourism, while others attribute it to the continued dependence of the Mexican economy on the United States, pointing to its neighbor’s recession as a principal cause for the country’s woes. Nonetheless, Mexico’s plummet in oil production and the decline in the price of oil are two main contributors to its present economic downfall. While other countries have begun to pull out of the recession, it appears that the fall in oil production and prices have further led to an ongoing decline in Mexico’s economy, which the country’s planners are finding difficult to reverse.

Current Oil Situation

Oil is at the heart of the Mexican economy. Profits on its extraction are the country’s number one revenue, accounting for approximately 40 percent of Mexico’s total revenues. Due to the decline in the price of oil that began last year with the escalation of the global recession, Mexico’s oil-dependent economy has suffered grievously. Prior to the sag in oil prices, when other oil producing countries were taking advantage of the tremendous peak in prices, Mexico was hit particularly hard; government officials reported that last year’s drop in oil production cost the Mexican government an estimated US$20 billion in lost revenues. Read more ..

The Race for Biofuel

Cuba's Sweet Success May Come from an Ethanol Future

November 2nd 2009

Latin American Topics - Cuba sugarcane harvest

In his seminal work, Sugarcane Energy Use: The Cuban Case, Alonso-Pippo Walfrido wrote: "Central America and the Caribbean, historical sugar-producing economies where the sugar-ethanol infrastructure already has a foundation, labor costs are low, and the political conditions are more or less stable– offers the best near-term potential for large-scale sugarcane ethanol production. This is a market opportunity which Cuba, with the longest experience of sugar–ethanol and sugarcane derivates production in the region, is positioned to take advantage of.”

As the result of a precipitous contraction in the Cuban economy, Cubans have recently experienced crippling energy cutbacks and other shortfalls that are reminiscent of the devastating hardships of the “Special Period,” and industries have continued to falter due to the evaporation of credit and investment flows which largely dried up after the break-up of the Soviet empire. In the first half of 2009, the Obama Administration launched a series of modest initiatives aimed at normalizing U.S.-Cuba relations, most recently exemplified by the loosening of restrictions on travel by Cuba-Americans, lifting controls on remittances, and giving the nod to U.S. telecommunication investments on the island. Read more ..

Electric Cars

Survey Shows Wide Acceptance of Plug-in Vehicles

October 26th 2009

Automotive - Plug-in Vehicle

A new survey released shows widespread consumer interest in buying plug-in hybrid electric vehicles (PHEVs). But the cost of the cars is much more influential than environmental and other non-economic factors as a predictor of purchase probabilities.

The survey of a nationally representative sample of 2,513 adults age 18 was part of the Reuters/University of Michigan Surveys of Consumers. The findings were released at The Business of Plugging In: A Plug-In Electric Vehicle Conference in Detroit.

Overall, when given no cost or fuel-saving estimates, 42 percent of those surveyed said there was at least some chance that they would buy a PHEV sometime in the future. The researchers then asked respondents to rate the likelihood of purchasing a PHEV under three different cost-scenarios, each time assuming they would save 75 percent in fuel costs compared to a traditional, gasoline-powered vehicle. With each successive doubling of the price of PHEVs, the probability of purchase fell by 16 percentage points. Read more ..


Saudi Princes Plead Vulnerability and Ask for Subsidies if Oil Prices Do Not Escalate

October 19th 2009

Arab Topics - Saudi Oil

The oil princes of Saudi Arabia became literal beggars at the United Nations climate talks that began at Bangkok on September 28. The oil kingdom demanded that they, along with other OPEC member nations, receive subsidies for revenues to be lost due to potential global warming.

Speaking on October 8, Mohammad S. Al Sabban, who led the Saudi delegation at the talks, claimed that a report by the International Energy Agency on OPEC revenues was seriously skewed. According to the IEA, OPEC revenues would still increase by more than $23 trillion between 2008 and 2030. This is  four times the amount revenues increased between 1985 and 2007. Al Sabban said of Saudi Arabia “We are among the economically vulnerable countries,…This is very serious for us. He went on to say “We are in the process of diversifying our economy but this will take a long time. We don’t have too many resources.” Read more ..

The Rail's Edge

Will High-Speed Rail Plan Become a Subsidy for Freight Railroads?

October 12th 2009

Transportation Topics - Shinkansen bullet train

In April, President Barack Obama confirmed his commitment to fund a high-speed rail (HSR) program in the United States and extolled the potential benefits of the $8 billion for HSR that Congress included in the stimulus package. That commitment grew by another $5 billion ($1 billion per year) when the President released his budget for FY 2010, and in an act of almost unprecedented fiscal mushrooming, the House Committee on Transportation and Infrastructure (T&I) proposed to add another $50 billion. Yet, according to recent comments by the head of the Federal Railroad Administration (FRA), little of these federal monies may go toward "real" HSR but instead appear likely to benefit some of the nation's for-profit freight railroads to achieve modestly higher speeds for existing, half-full Amtrak trains running on their tracks. Read more ..

The Race for Biofuels

As Corn Ethanol Threatens Habitat, Prairie Grasses may Provide Wildlife-Friendly Biofuels

October 5th 2009

Energy / Environment - Biofuel field

When society jumps on a bandwagon, even for a good cause, there may be unintended consequences. The unintended consequence of crop-based biofuels may be the loss of wildlife habitat, particularly that of the birds who call this country's grasslands home, say researchers from Michigan Technological University and The Nature Conservancy.

In a paper published in the October 2009 issue of the journal BioScience, David Flaspohler, Joseph Fargione and colleagues analyze the impacts on wildlife of the burgeoning conversion of grasslands to corn. They conclude that the ongoing conversion of grasslands to corn for ethanol production is posing a very real threat to the wildlife whose habitat is being transformed. One potential solution: Use diverse native prairie plants to produce bioenergy instead of a single agricultural crop like corn.

"There are ways to grow biofuel that are more benign," said Flaspohler, an associate professor in the School of Forest Resources and Environmental Science at Michigan Tech. "Our advice would be to think broadly and holistically about the approach you use to solve a problem and to carefully consider its potential long-term impacts."

The rapidly growing demand for corn ethanol, fueled by a government mandate to produce 136 billion liters of biofuel by 2022—more than 740 percent more than was produced in 2006—and federal subsidies to farmers to grow corn, is causing a land-use change on a scale not seen since virgin prairies were plowed and enormous swaths of the country's forests were first cut down to grow food crops, the researchers say.

"Bioenergy is the most land-intensive way to produce energy, so we need to consider the land use implications of our energy policies," said Fargione, lead scientist for The Nature Conservancy's North America Region. Read more ..

Energy Politics

Confronting Iran’s Pipeline Strategy

September 28th 2009

Energy Topics - Nabucco Gas Pipeline 2
Nabucco Pipeline

While Washington is mulling over what to do next in order to weaken Iran economically, this summer the Islamic Republic has taught us a lesson in strategic maneuvering, taking major steps to bolster its economy and geopolitical posture by positioning itself as an indispensable energy supplier to hundreds of millions of people.

Last May, I described how after 14 years of negotiations, Iran, which has the world’s second largest natural gas reserves, signed a deal to connect its economy with its eastern neighbor, Pakistan, via a 1,300-mile natural gas pipeline. Both Iran and Pakistan hope to extend the pipeline into India and perhaps even into China. This would not only give Iran a foothold in the Asian gas market and ensure that millions of Pakistanis, Indians and perhaps Chinese are beholden to Iran’s gas, but it would also provide Iran with an economic lifeline and the diplomatic protection energy-dependent economies typically grant their suppliers.


Kicking our Oil Addiction

US Tax Breaks Subsidize Foreign Oil Production

September 21st 2009

Energy Topics - Oil Barrels 400px

The largest U.S subsidies to fossil fuels are attributed to tax breaks that aid foreign oil production, according to research to be released on Friday by the Environmental Law Institute (ELI) in partnership with the Woodrow Wilson International Center for Scholars. The study, which reviewed fossil fuel and energy subsidies for Fiscal Years 2002-2008, reveals that the lion's share of energy subsidies supported energy sources that emit high levels of greenhouse gases.

The research demonstrates that the federal government provided substantially larger subsidies to fossil fuels than to renewables. Fossil fuels benefited from approximately $72 billion over the seven-year period, while subsidies for renewable fuels totaled only $29 billion. More than half the subsidies for renewables—$16.8 billion—are attributable to corn-based ethanol, the climate effects of which are hotly disputed. Of the fossil fuel subsidies, $70.2 billion went to traditional sources—such as coal and oil—and $2.3 billion went to carbon capture and storage, which is designed to reduce greenhouse gas emissions from coal-fired power plants. Thus, energy subsidies highly favored energy sources that emit high levels of greenhouse gases over sources that would decrease our climate footprint.


Kicking our Oil Addiction

Greens and Hawks: An Uneasy Alliance

September 14th 2009

Contributors / Staff - Gal Luft
Gal Luft

Many Americans perceive the fight for energy security and the effort to reduce our oil dependence as synonymous with the effort to curb greenhouse gas emissions. Politicians talking about energy often bind together energy security and the environment, creating the impression that using less oil would not only slow down the transfer of wealth to oil-exporting regimes, but also the melting of the icecaps.

To some degree this is true. Many components of energy policy, like increased fuel efficiency, the use of mass transit, the shift to some renewable fuels, and the electrification of transportation, can offer both security and environmental benefits.

If a car uses less gasoline, fewer dollars migrate abroad, and fewer tons of carbon dioxide release into the atmosphere.

Greens and hawks have much to agree on in pursuing their respective goals. But these two constituencies are not as aligned as many tend to think.

Energy security and greenhouse gas reduction are not complementary issues. Many of the technologies and policies that could assist one could well be an imped iment to the other.

Mapping the Interests

Let's begin with environmentalists. In the short history of the 21st century, no issue has risen from near obscurity to the center of our public discourse as quickly as global warming. What started as chatter among some concerned scientists and die hard environmentalists is now called "the challenge of our generation," consuming a bandwidth equivalent of war among world leaders. Read more ..

The Race for Alt Fuel

Storing Gas Reserves Underwater for Terrorism Security

September 7th 2009

Energy / Environment - LNG Tanker

An underwater technique for storing highly volatile petroleum gases in an effort to prevent accidents and terror attacks. An Israeli company is developing the project.

When a freak propane gas explosion left Martha Stewart's dog dead this year, questions about the safety of propane tanks and trucks were on the public mind. But accidents like this are only a small part of the story. At cities across the US, and much of the developed world, you'll find even larger tanks, where propane and butane gases are stored before being transferred to other facilities or pipes.

Aside from the usual risk of a spark, or fire, these large gas facilities are also vulnerable to terrorist attack. A serious explosion at a gas facility in a US city could cause a large-scale human disaster.Now, an Israeli entrepreneur could have an answer - storing the gas under the sea. Ofir Sarid, founder and CEO of SeaGen Systems, has come up with a solution that can pipe liquefied petroleum gases (LPG) like propane and butane, deep underwater, and store it far from shore, keeping the gas away from the hands of terrorists, and safe from accidental explosions. Read more ..

Kicking our Oil Addiction

The World's Sad Birthday--the 150th Anniversary of Commercial Oil

August 31st 2009

Contributors / Staff - Gal Luft

One hundred and fifty years ago, give or take a few days, in the sleepy lumber town of Titusville, Pa., “Colonel” Edwin Drake was persistently hammering a pipe into the ground in search of a replacement for depleting whale oil as a fuel for lamps. At a depth of 69 feet below ground he finally struck oil, and the world changed forever. Over a century and a half his 25 barrels per day well would give rise to a global industry of 85 million barrels per day, making oil the world's most strategic commodity, one that supplies 40 percent of the world's energy.

Just like in Drake's own life — he died two decades later penniless — oil has been both a curse and a blessing for humanity. It has been a driver of seminal events and a backdrop behind great powers' foreign policy. During World War I, “the Allies had floated to victory upon a wave of oil,” as the British statesman Lord Curzon noted. The post-war contention between Turkey and Britain in the early 1920s over Iraq's oil-rich Mosul, Imperial Japan's expansionist policy of the 1930s that led to a four-year war in the Pacific, Adolf Hitler's invasion of Russia, America's repeated military interventions in the Middle East and the “New Great Game” currently taking place in Central Asia have all been tied to oil dependence. Read more ..

Oil's Edge

Europe Offshore Still Producing Oil in Hundreds of Fields

August 24th 2009

Energy / Environment - Petroleum

Europe, despite the growth of other regions, remains one of the world's largest offshore producers. Nearly 600 offshore fields have been developed off Europe, involving a similar number of platforms, about 400 subsea wells, over 200 subsea templates, and some 1,000 pipelines.

During the past decade the corporate scene has changed dramatically as declining production and high costs have forced the original developers, the oil majors, into other regions. That exodus opened the way for a new breed of smaller player better geared to economically extracting the remaining reserves from a multitude of small fields and squeezing the last drop out of massively depleted existing ones. Read more ..

The Nuclear Edge

Pitts Bill Could Be Nuclear Energy Game Changer

August 17th 2009

Energy Topics - Nuclear Reactors

On July 31, Congressman Joe Pitts (R-PA) introduced the Streamline America's Future Energy Nuclear Act, which brings a fresh approach to U.S. nuclear energy policy. Instead of the well-worn subsidy-first approach that often dominates congressional attempts to support nuclear energy, Congressman Pitts's bill focuses on reforming the arduous regulatory and policy environment so that the nuclear renaissance can flourish. Read more ..


Recession and Oil Demand: Looking to Recovery

August 10th 2009

Energy / Environment - Oil Barrels

Leading indicators suggest that global oil consumption will bottom out shortly and that pricing power will return to OPEC by late summer or early autumn. Oil demand remains off long-term trends lines and is determined primarily by the continuing effects of the recession. Consequently, forecasting oil markets remains more dependent on
understanding recession economics than anything to do with oil per se.

Therefore, any prudent analysis of oil demand and pricing must first and foremost at the course of the recession.

Scenarios for the evolution of the global economy are based on two conflicting visions. One narrative sees a financial crisis stemming from an asset bubble, and ultimately, the bankruptcy of investment bank Lehman Brothers. The other version, more prevalent in both media and policy circles, envisions an economic crisis driven by excessive debt, particularly in the United States. Here’s how the narratives play: Read more ..

The Edge of Solar

Benedict XVI proves to be a "Green Pope"

August 3rd 2009

Energy Topics - Papal solar panels
Papal solar panels

Pope Benedict XVI's home near Regensburg, Germany will become a solar-power generator. Workers donated some 580 square feet of photovoltaic solar panels to install on his house's rooftop. The solar panels should generate about 5,800 kilowatt hours of energy a year, which corresponds to saving 11 barrels of petroleum. Besides, the project is expected to produce income for the pontiff in the amount of $3,500 a year, by providing the German electricity grid with energy. According to Vatican sources, the money produced will go to an association that offers job training to disadvantaged young people.

The pope approved the project, but no church funds were used. Local workers donated the panels and students at a trade school installed the panels. The pope had the house built in 1970 in the Pentling suburb of  Regensburg after he moved there to teach at  the University of Regensburg. Read more ..

Edge of Energy

Oil is Peaking But Not Because of Speculation

July 27th 2009

Energy / Environment - Oil Barrels

In seeking to explain the run up in oil prices from 2004 to 2008, commentators often turn to ‘speculation’ as the primary cause. While speculation—or at least a kind of piling-on—may have explained the very late stages of the oil price rally, the willingness to attribute oil prices primarily to financial investors, as the CBS news show 60 Minutes did a few months back, risks drawing the wrong lesson from the period.

Let’s rewind the clock and recall the events of the time. After many years of solid growth, oil production plateaued in October 2004. Regardless of the price level, the oil supply simply stopped responding, and from then on, the world had to make do with broadly flat supplies. Ordinarily, the expansion of the world’s economy would be accompanied by increased energy consumption and an inelastic oil supply might have been expected to hinder economic development. It didn’t. In the four years to mid-2008, the world economy expanded by 18 percent. The global economy boomed, even without new oil.


Edge of Energy

Petroeconomics--the U.S. vs. China

July 20th 2009

Energy / Environment - China Oil

The events of recent months have exposed the differing approaches to energy as practiced by China and the US. China has lent Brazilian oil giant Petrobras US $10 billion to further its offshore exploration work in return for a flow of oil equaling 160,000 b/d. It has lent Russian oil firm Rosneft $15 billion and Russian pipeline operator Transneft $10 billion for agreeing to supply 300,000 b/d from new fields in East Siberia for the next 20 years. In Venezuela, China is to contribute $8 billion to a strategic fund for oil development that aims primarily to increase Venezuelan oil exports to China by 650,000 b/d by 2015.

China is taking the long view, paying money now to ensure growth in the supply of oil and long-term access to its share.

By contrast, the Obama administration announced measures intended to achieve greater payments from oil E&P companies operating in the core area for US oil production — the Gulf of Mexico. The administration has argued that oil companies failed to pay royalties which might otherwise have been expected. While the US government is entitled to sell its societal resources on fair and commercial terms, the net result nevertheless will be to make oil production more expensive in the US. Furthermore, the US government has delayed opening other offshore areas to incremental exploration and possible production.

So while the Chinese are forging ahead to assure access to production around the globe, the US is seeking to reduce or limit its domestic productive capacity. Why the differences in approach? Read more ..

The Race for BioFuels

BioFuels are No Longer Just a “Field of Dreams”

July 13th 2009

Energy / Environment - Biofuel field
BioFuel Farm

In the movie "Field of Dreams," Ray Kinsella (Kevin Kostner) hears a voice saying "if you build it, they will come." Following his dream, he builds an elaborate baseball stadium in the middle of an Iowa corn field, and lo and behold, the Chicago Black Sox return from the afterlife to play ball on his field, and his stands are soon filled with fans. For more than a year, a number of proponents of biofuels have suggested a similar approach for solving America’s energy crisis: require auto manufacturers to produce "flexible fuel" vehicles that can run on alcohol fuels, and the demand that these vehicles will create for alcohol fuels will result in the production of additional billions of gallons of alternative liquid fuels that will replace gasoline and help end our nation’s dependence on foreign oil. Rather than "build it, they will come," their approach has been "make Detroit build cars that can run on alternative fuels, and the alternative fuels will come."

Until now, the problem with achieving this vision has been that officials in Washington have been slow to levy such a mandate on the auto industry and on American auto buyers, based merely a dream, and absent a guarantee, that these alcohol fuels will be produced. Just this past May, the House Energy and Commerce Committee resisted incorporating in the House climate bill such a mandate for flexible fuel vehicles—proposed by Congressman Eliot Engel in the form of the Open Fuel Standards Act of 2009 (HR1476)—because of auto industry objections that the fuels will not be available. The auto lobbyists’ argument was given particular weight because of the current economic downturn, and because of fears that producing alcohol fuels would either end up raising the price of corn, require the importation of ethanol from Brazil where fragile rain forests would be injured (again spurious), or increase the production of methanol from coal, which would increase the emission of greenhouse gases. What the Committee, and its Chairman Henry Waxman, were willing to agree to in the face of these barriers was a watered down version of the Engel proposal, providing the Secretary of Transportation the authority to require the production of some flexible fuel cars, but refusing to set a specific target for how many such cars would have to be produced.


Kicking our Oil Addiction

What Oil Price can America Really Afford?

July 5th 2009

Energy / Environment - Oil Barrels

Saudi Oil Minister, al-Naimi, has warned that under-investment in oil capacity may lead to a return to $150/barrel oil, “or even worse.” The Paris-based IEA has also warned of price shocks due to resurgent demand and restricted investment. Will a high price environment truly emerge, or are price spikes followed by brutal recessions more likely, as experienced in the last year? And what is more important, the absolute price of oil or the rapidity of the price increases? A tour through the historical record may provide some insight. Read more ..

The Edge of Energy

Global Natural Gas Demand Dip Today Will be Felt for Years

June 29th 2009

Energy / Environment - LNG Tanker

Like other segments of the worldwide energy industry, natural gas is experiencing its first dip in years—in fact, decades. That is a mixed blessing. True, global demand is softening for the first time in a half century. But that means that costly investments in new production have been comprised. Forecasters see a supply crunch hitting in about 2013, according to the International Energy Agency which tracks such trends.

"We have moved from a tight supply and demand balance with extremely high gas prices to an easing one with plummeting prices," Nobuo Tanaka, executive director of the IEA. Oil has experienced a similar drop in prices, although is now rebounding. Read more ..

Edge of Solar Energy

U.S. Air Force Nixes Solar Energy Project Near Area 51 that Can Energize 50,000 Homes

June 22nd 2009

Energy Topics - SolarReserve Project

Department of Defense requirements have apparently thrown a shadow over a major advanced solar energy project in Nevada in one of the sunniest tracts in America. The ambitious project would have featured a field of specialized mirrors called heliostats for concentrating solar rays, a molten-salt storage facility, as well as a 600-foot power tower. The California-based firm SolarReserve had proposed the construction of $700 million solar/thermal power plant that would have covered two square miles in the empty desert near Nellis Air Force Base in Nevada. The project was sited near a defunct mining operation allowing it to connect the solar-powered turbines to the mine's former transmission lines. The location is also not far from the storied region known as Area 51.

US Air Force Colonel Howard D. Belote, commander of Nellis AFB said that this plan will simply not fly and urged the Interior Department’s Bureau of Land Management to clip its wings. Belote added that the project would compromise classified operations at a training range and would interfere with radar. The bureau owns most of Nevada, and controls more than 20 million acres of land with wind energy potential and more than 30 million acres with solar potential. Read more ..

The Edge of Nuclear Energy

Five Free Market Priorities for a Nuclear Energy Renaissance

June 15th 2009

Energy Topics - Nuclear Reactors

Energy policy, especially targets for lower carbon dioxide emissions, has emerged as a priority for Congress and the Obama Administration. Unfortunately, nuclear energy seems to have been forgotten by leadership in both the legislative and executive branches of government.

First, the President's budget had almost nothing related to advancing nuclear energy. Then Henry Waxman (D-CA) and Edward Markey (D-MA) released their American Clean Energy and Security Act of 2009, which would enact numerous misguided environmental provisions, including a costly carbon dioxide cap-and-trade program, but offers virtually nothing regarding nuclear energy. This is extremely problematic given the fact that emissions-free nuclear energy could help meet both congressional and Administration energy policy objectives for clean, affordable, domestic energy. Read more ..

Kicking the Oil Addiction

Vaunted Cap-and-Trade Bill Does Nothing about Oil Dependence

June 8th 2009

Contributors / Staff - Gal Luft
Gal Luft

Now, when the first signs of economic recovery may be in sight, it's time to ponder what kind of recovery we are likely to witness. Will it be the traditional V-shaped recovery in which economic growth bounces back from a slump, or will it be a W-shaped, double-dipped one in which one crisis follows the other for several years to come? Much of this depends on the price of oil.

Nearly a year ago, oil prices hit their near $150 peak. This price shock, according to some economists, contributed materially to the recession that a few months later caused prices to collapse by nearly $100 a barrel. The global recession shrank demand for crude. But all of this is going to change once growth resumes, and the oil market is far from ready to absorb the resurgence in demand.

The International Energy Agency (IEA) recently concluded that even with the current recession, by 2030 global demand for oil could increase by 25 percent. The agency found that at expected rates of oilfield depletion, to meet future demand for oil, four new Saudi Arabias will have to be added to the global oil market between now and 2030. But the current economic conditions have thwarted the much-needed investment in new production. The IEA predicted that investment in oil and gas exploration will fall by 20 percent in 2009, and the Saudi oil minister is predicting a "catastrophic" shortfall in petroleum production.

For the U.S, such an oil shock would come at a terrible time as hundreds of billions of dollars of taxpayer-funded governmental stimulus and bailouts percolate into the economy, leading to inflationary pressure and devaluing the dollar. This would force OPEC members which conduct their oil transactions in dollars to keep prices high in order to ensure sufficient government revenues.


Energy Politics

Iran-Pakistan Pipeline is Iran's New Lifeline

June 1st 2009

Energy Topics - Iran-Pakistan pipeline

While the world’s eyes are focused on Iran and Pakistan, little attention has been paid to the two countries’ decision from last week to move ahead with their plans to connect their economies via a natural gas pipeline. What may seem like a standard energy project could have profound implications for the geopolitics of energy in the 21st century and for the future of south Asia, as well as for America’s ability to check Iran’s hegemony in the Persian Gulf.

For both Iran and Pakistan, the pipeline project would be highly beneficial. Iran sees in the pipeline not only an economic lifeline at a time when the United States and its European allies are trying to weaken it economically, but also an opportunity, should the pipeline be extended to India, to create an unbreakable long-term political and economic dependence of one billion Indian customers on its gas.

Pakistan, for its part, views the pipeline as the solution to its energy security challenge. Pakistan’s domestic gas production is falling and its import dependence is growing by leaps and bounds. By connecting itself with the world’s second-largest gas reserve, Pakistan would guarantee reliable supply for decades to come. If the pipeline were to be extended to India it could also be an instrument for stability in often tense Pakistan-India relations as well as a source of revenue for Islamabad through transit fees. Read more ..

Edge on Energy

Government/Business Consortium Drills Gas Hydrate Resource in Gulf of Mexico

June 1st 2009

Energy Topics - Helix Q 4000 Drilling Platform
Crew of Helix Q4000 drilling platform

The US Dept. of Energy, US Geological Survey, US Minerals Management Service and Chevron conducted a first ever drilling project to collect geologic data on gas-hydrate-bearing sand in the Gulf of Mexico.

The U.S. Gulf of Mexico contains very thick and concentrated gas-hydrate-bearing reservoir rocks which have the potential to produce gas using current technology. Recent drilling by a government and industry consortium confirm that the Gulf of Mexico is the first offshore area in the United States with enough information to identify gas hydrate energy resource targets with potential for gas production.

Gas hydrate, a substance comprised of natural gas and water, is thought to exist in great abundance in nature and has the potential to be a significant new energy source to meet future energy needs. However, prior to this expedition, there was little documentation that gas hydrate occurred in resource-quality accumulations in the marine environment.

“This is an exciting discovery because for the first time in the U.S. Gulf of Mexico, we were able to predict hydrate accumulations before drilling, and we discovered thick, gas hydrate-saturated sands that actually represent energy targets,” said U.S. Geological Survey Energy Program Coordinator Brenda Pierce.

The U.S. Department of Energy (DOE), the U.S. Geological Survey (USGS), U.S. Minerals Management Service (MMS) and a group of U.S. and international energy industry companies under the management of Chevron were responsible for conducting this first ever drilling project with the goal to collect geologic data on gas-hydrate-bearing sand reservoirs in the Gulf of Mexico. Read more ..

Energy Politics

Inside The “Clean Coal” Lobby

May 25th 2009

Energy / Environment - Coal

They’ve brought coal above ground.

They’ve put the black rock on billboards in the swing states, and they’ve splashed it on full-page ads in CQ Weekly, Roll Call, Politico, and The Washington Post. They sponsored presidential debates on CNN, and their "clean coal" boosters were a fixture on the campaign trail. They’ve rolled out a series of TV spots from the firm that promised that what happens in Vegas will stay in Vegas.

They’re the American Coalition for Clean Coal Electricity, a collection of 48 mining, rail, manufacturing, and power-generating companies with an annual budget of more than $45 million—almost three times larger than the coal industry’s old lobbying and public relations groups combined. ACCCE (pronounced "Ace") is just celebrating its first birthday, but it has already become a juggernaut shaping the terms of the climate change debate on Capitol Hill—even while weathering a high-profile assault by critics who accuse it of peddling hot air.

ACCCE’s considerable impact will be on display this week at House Energy and Commerce Committee hearings on a new draft climate bill penned by panel chairman Henry Waxman, a California Democrat, and Energy and Environment Subcommittee Chairman Edward Markey, a Massachusetts Democrat. Just a year ago, Waxman and Markey backed a moratorium on new coal-fired electricity plants. But their latest draft would allow new coal plants through 2015, if they are retrofitted to cut carbon dioxide output some 40 to 60 percent within another decade. The technology to do that does not yet exist, but not to worry: the new measure would set up a $1 billion-a-year clean coal research fund to help.

While not, of course, endorsing an approach that could fundamentally reduce U.S. coal demand, ACCCE has nevertheless declared itself "encouraged that the... draft focuses on the key role that coal plays in meeting growing U.S. electricity needs." Greenpeace, meanwhile, has objected to "the untold billions of dollars in handouts [to the coal industry] for the false promise of carbon capture and sequestration."


Energy History

The Hostmen—The World’s First Fuel Cartel

May 18th 2009

Book Covers - Internal Combustion

The following research arose from the bestseller Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives (Dialog Press). Buy it here.

In the fifteen hundreds, peat fuel was surpassed by an even more distasteful alternative: coal. The same millennial process that produces peat also yields coal after final eons of geological pressure. Known for its noxious, smelly smoke and grime, coal, in spite of its repulsiveness, trapped more concentrated carbon energy per pound than firewood, charcoal or peat. True, it was mined from the ground in hazardous operations. True, this dismal fuel alternative transformed England into a sootscape. But by virtue of its immense power yield, coal defined centuries of English industrial life and concomitantly allowed that country to preserve her rapidly dwindling forest lands for more important things, such as building naval warships.

Coal use began not with the well-known ore extracted from subterranean seams, but with a similar substance called "sea coal" that washed up along the coast near Durham in England's northeast. Later, the more familiar rock was also discovered inland, exposed in the hillsides and the banks of the nearby River Tyne. The Romans certainly employed it in the early centuries of the Common Era. The combustible nuggets produced the fuel to forge Roman military metal and operate Caesar's war fortifications. By the twelfth and thirteenth centuries, the peasant class, especially those without access to peat, was compelled to rediscover coal as a substitute for wood.

The royal wood monopolies and hoarding regimens had made the repugnant sea coal a necessity for the average man's survival, as well as for industrial and commercial growth. In the last four decades of the thirteenth century, the cost of wood increased about 70 percent, while sea coal only increased only 23 percent. Coal became affordable. For most in London, wood was not. Even though the New Forest had been dismantled, cartel hoarding kept the woodlands out of reach of most households and manufacturing concerns. Read more ..

Energy Security

Chavez Threatens Global Oil Supply with Expropriations at Gunpoint

May 11th 2009

Latin American Topics - Chavez PDVSA
Hugo Chavez

A new round of expropriations by the Venezuelan government has touched not only agriculture businesses, but now oil producers. Troops were mobilized on May 9-10 to assist the state-owned petroleum company, PDVSA, to seize the assets of approximately 60 oil services companies. A law was past last week that allows the state to take control of the oil industry. This new move at expropriation has raised concerns that the OPEC member’s already declining oil output could sink to its lowest level in the past 20 years. While oil companies want a stake in Venezuela, which now claims to have 172bn barrels of proven oil reserves - making them the second largest in the world after Saudi Arabia - the government’s unpredictability and inflexibility are a serious deterrent. Read more ..

The Edge of Green

Americans Lack Knowledge to Assess Energy Problems and Policies

May 11th 2009

Energy / Environment - Wind Farm

A new survey indicates widespread support among Americans for addressing energy problems, but also a lack of basic knowledge that could prevent citizens from making good choices about the nation's and the world's energy future. Polluting fossil fuels are a major source of greenhouse gas emissions that are linked to climate change
The new data comes from Public Agenda, a non-partisan opinion research group that helps citizens make informed decisions. Scott Bittle, executive vice president of issue analysis, says the Energy Learning Curve Survey was designed to get a sense of what the public knows, what it values and where it stands on energy issues. Read more ..

Automotive Advances

What Does Fiat Know about CNG that Honda and the American Media Want to Ignore?

May 5th 2009

Automotive - Fiat Palio

Several days ago, Italian automaker Fiat issued a rather remarkable video news release in which they extolled the benefits of methane fuel which is compressed natural gas. Watch Video here.

Not only did Fiat proclaim CNG as the most appropriate and readily-available technology for resolving pollution problems in urban areas, but they announced that all of their gasoline-powered models are now also available in CNG versions, with little or no difference in cost to the consumer (in fact, due to tax incentives, the CNG versions may actually cost less in some jurisdictions).

Among the CNG benefits highlighted by Fiat are its lower cost versus gasoline per equivalent gallon, its significantly lower polluting characteristics compared to gasoline, and the safety of driving CNG vehicles. Moreover, CNG’s abundant availability from friendly sources makes the fuel preferable as it does little to support OPEC and their terrorist regimes.

In a country and world struggling to stave off the effects of economic depression and looming environmental devastation, “There’s absolutely no reason not to (use CNG),” Fiat proclaims. Read more ..

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