June 4, 2011

The Dilemma

Ed Wallace:

If there is one most frightening thing that war always exposes, even if one is on the winning side, it's weakness in the supply logistics. While most never consider it, official policy often changes during a war because supplies that are critical to the war effort seem in danger of being disrupted. Such jeopardy, moreover, forces the accountants, economists and politicians waging the conflict to start thinking about how the world will be changed once the fighting has ended.

Few today appreciate the fact that our foreign policy, particularly as it is tied to the Middle East, came about because of just such concerns in the first years of the Second World War. As one might expect, that official policy was based on real fears that America would one day run out of oil.

"The European War"
It was the summer of 1941 and the State Department had requested that the White House include Saudi Arabia in our Lend Lease program. It wasn't because the Saudis were going to become a direct ally against the European Axis Powers, but because we were about to embargo U.S. oil shipments to Japan. Many believed - correctly, as it turned out - that this would probably lead to hostilities with Japan that would draw us into the war.

Standard Oil of California, which had been drilling for oil in Bahrain for over a decade, now had oil concessions granted by King ibn Saudi. The first six wells Standard drilled into the Arabian desert were nothing to write home about, but when Well No. 7 came in on March 4, 1938, the engineers and wildcatters all knew that Saudi Arabia was going to be an oil bonanza.

Yet on July 18, 1941, Roosevelt refused the request for Lend Lease for Saudi Arabia. He saw no immediate benefit to diverting U.S. dollars overseas simply because Standard had oil concessions there. In any case, the outbreak of the European War in 1939 had reduced oil production in the Kingdom to an insignificant volume -- a trickle, considering that American oil amounted to 60 percent of the world's crude at the time. Instead Roosevelt asked Federal Loan Administrator Jesse Jones to look into the possibility of having England deal with the Saudi King's pressing needs.

Posted by jez at 8:04 PM

April 22, 2011

Oil: We're Being Had Again

Ed Wallace:

No matter how many of his Fed presidents claim they are not to blame for the high price of oil, the real problem starts with Ben Bernanke. The fact is that when you flood the market with far too much liquidity and at virtually no interest, funny things happen in commodities and equities. It was true in the 1920s, it was true in the last decade, and it's still true today.

Richard Fisher, president of the Dallas Federal Reserve, spoke in Germany in late March. Reuters quoted him as saying, "We are seeing speculative activity that may be exacerbating price rises in commodities such as oil." He added that he was seeing the signs of the same speculative trading that fueled the first financial meltdown reappearing.
Here Fisher is in good company. Kansas City Fed President Thomas Hoening, who has been a vocal critic of the current Fed policy of zero interest and high liquidity, has suggested that markets don't function correctly under those circumstances. And David Stockman, Ronald Reagan's Budget Director, recently wrote a scathing article for MarketWatch, titled "Federal Reserve's Path of Destruction," in which he criticizes current Fed policy even more pointedly. Stockman wrote, "This destruction is, namely, the exploitation of middle class savers; the current severe food and energy squeeze on lower income households ... and the next round of bursting bubbles building up among the risk asset classes."

Posted by jez at 9:53 PM

April 5, 2011

To Cut Smog, Navistar Blazes Risky Path of Its Own

Tom Zeller & Norman Mayersohn:

In a testing cell tucked deep in the bowels of Navistar's engine plant and technical center here, a hulking prototype of a truck engine sits behind a large glass window like a patient on an operating table. A snarl of sensors and wires is attached to nearly every part of the humming engine, feeding reams of data to a battery of computers and watchful engineers in the adjacent control room.

One measurement -- for nitrogen oxide emissions, or NOx -- is of particular concern to Navistar. From 2010 onward, all new truck engines must achieve tough, near-zero limits for NOx, a chief ingredient of smog. Virtually every truck maker besides Navistar chose to use an add-on system to their existing engines that uses a fluid cocktail to help neutralize the pollutant as it makes its way out of the exhaust.

Navistar went a different route, deciding to invest hundreds of millions of dollars to refine an engine that produces minimal NOx in the first place. At the same time, the company attacked the competing systems, suing federal air quality regulators and claiming that the add-on technology was so flawed that it failed to meet the clean-air requirements.

Posted by jez at 8:54 PM

March 3, 2011

Oil & Water, Jet Fuel & Labor

William Swelbar:

On June 25, 2008 I blogged asking the question: Is Oil A Cancer Or A Cure? At that time, the price of a barrel of oil had not yet reached its apex of $147 per barrel, but was well on its way. Based on findings by the Air Transport Association's superb economic analysis team led by chief economist John Heimlich, the U.S. airline industry paid the equivalent of $174.64 per barrel [price of a barrel of oil plus the equivalent cost to refine crude into jet fuel (the crack spread)] on July 11, 2008. By December 23, 2008 the price of a barrel of West Texas Intermediate had fallen to $30.28 per barrel. So far in 2011, we've seen a similar surge in oil prices, but based on current geopolitical events, I am not expecting another $117 drop in the price of a barrel of oil like we witnessed in 2008.

I'm actually wondering what happens if the wave of Mideast political upheaval washes over Algeria? Or Saudi Arabia? Some economic experts say the price of oil could rocket past the $200 threshold.

In 2011, the industry has paid an average of $89.15 per barrel of crude and another $25.80 in the crack spread for a total cost of "in the wing" jet fuel of nearly $115 per barrel. Since February 22, 2011 the industry has paid more than the equivalent of $120 per barrel for jet fuel. On March 1, 2011 the industry paid the equivalent of $132.17 per barrel for jet fuel including the crack spread of $32.54. For all of 2008, the industry paid the equivalent of $25 per barrel to refine crude into jet fuel. In the last five days of trading the crack spread paid by the industry is nearly $30 per barrel.

Posted by jez at 6:04 PM

February 12, 2011

The "National Insecurity" of Imported Oil

Ed Wallace:

Getting America off imported oil is always urged in the context of national security. No matter how often that refrain is repeated, however, it always points toward how much imported oil American motorists use.

It's never about the amount of oil imported into the United States, refined into numerous products and shipped back out of the country. Nor are people arguing that we need to quit using imported oil for manufacturing concerns - like making fertilizers to grow corn, to make into ethanol to put into our gas, so we can quit importing oil. (That's the most comical circular argument currently making the rounds.) But we also use oil for things like asphalt for our roads, and in the plastics industry, and even the most ardent "get America off imported oil" advocates don't talk about constraining those industries.
In reality, the country from which we import the most oil is Canada. And I'm fairly certain that we aren't too worried about the national security aspect of bringing that oil into America, now or in the future. Yet we're still hearing the constant mantra that this is a national security issue, and that's what troubles me most. And, if you own one of the nation's 240 million vehicles, the "national insecurity of imported oil" refrain should trouble you, too.

Posted by jez at 4:18 PM

January 13, 2011

Study: We've Got Plenty of Land for Biofuels

Chuck Squatriglia:

One of the great arguments against biofuels is the wisdom, if not the morality, of using land to produce fuel instead of food. But research out of Illinois suggests it doesn't have to be an either-or proposition.

Researchers at University of Illinois Urbana-Champaign have found that biofuel crops cultivated on land unsuitable for food crops could produce as much as half the world's current fuel consumption without adverse impact on food crops or pastureland.

The study, published in Environmental Science and Technology, identifies land around the world that is unsuitable for food production but could be used to raise biofuel feedstocks like switchgrass.

According to the researchers, many studies examining biofuel crop viability focus on yield -- how productive the crop can be. They wanted to examine land availability to determine whether it is possible to produce sufficient biofuel to meet demand without sacrificing food production.

Posted by jez at 7:53 AM

December 23, 2010

New Interest in Turning Gas to Diesel

Matthew Wald:

Diesel and jet fuel are usually made from crude oil. But with oil prices rising even as a glut of natural gas keeps prices for that fuel extraordinarily cheap, a bit of expensive alchemy is suddenly starting to look financially appealing: turning natural gas into liquid fuels.

A South African firm, Sasol, announced Monday that it would spend just over 1 billion Canadian dollars to buy a half-interest in a Canadian shale gas field, so it can explore turning natural gas into diesel and other liquids. Sasol's proprietary conversion technology was developed decades ago to help the apartheid government of South Africa survive an international oil embargo, and it is a refinement of the ones used by the Germans to make fuel for the Wehrmacht during World War II.

The technology takes "a lot of money and a lot of effort," said Michael E. Webber, associate director of the Center for International Energy Environmental Policy at the University of Texas, Austin. "You wouldn't do this if you could find easy oil," he said.

Posted by jez at 2:50 PM

2011: And Still No Energy Policy

Ed Wallace:

"First generation [corn] ethanol I think was a mistake. The energy conversion ratios are at best very small."

- Al Gore, speaking at a Green Energy Conference on November 22, 2010

"Ethanol is not an ideal transportation fuel. The future of transportation fuels shouldn't involve ethanol."

- Secretary of Energy Steven Chu, November 29, 2010

No one knows what brought on the blast of political honesty in the last eight days of November. Having been a rabid ethanol booster for most of his political career, there was former Vice President Al Gore reversing course and apologizing for supporting ethanol. Of course Gore's reason for taking that position was perfectly understandable -- for a politician. As he told the Athens energy conference attendees, "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers of Iowa because I was about to run for President."

Translated from politics-speak into English, pandering to farmers gets votes. But if your claimed position is to plan some sort of energy policy for everyone else, then getting farmers' votes shouldn't determine what's the right thing to do for the nation's fuel supplies.

Posted by jez at 5:55 AM

December 1, 2010

In search of a lightning bolt of rational thought.

Peter M. De Lorenzo

In the midst of the biggest green car push in automotive history - what with Chevrolet touting its extended-range electric Volt as the greatest thing since sliced bread while crossing green swords with Nissan, which is shouting similar missives from the rooftops about its all-electric Leaf - it has become readily apparent that the vast majority of the American consumer public couldn't be bothered. As in they couldn't care less. That is unless someone - i.e., Washington - is throwing money at them to care.

Hybrid sales in this market are going to finish the year down again, which will mark three straight years of decline, and this includes the $4.00+ per gallon spike in the late spring-summer of 2008, when fuel economy hysteria took hold in the U.S. for four solid months. It seems that the Shiny Happy Green Sensibilities Act - or whatever you want to call the ongoing "shove-it-down-the-American-consumer-public's-throats-and-they-will-learn-to-lilke-it" mentality that pollutes the political brainiacs/stumblebums in Washington and Northern California - is going nowhere.

As a matter of fact our illustrious leaders in Washington used a considerable chunk of money from the 2009 economic stimulus package to buy up hybrids from various auto manufacturers to prop-up hybrid vehicle sales, couching it as a noble attempt at improving the overall fuel-efficiency of the government fleet, when in fact the real reason was to not only - hopefully - jump-start American consumer thinking into accepting these vehicles as being mainstream choices, but to help the vehicle manufacturers who were battered and bullied to build the vehicles in the first place to keep the production lines going.

But alas, this is the pattern we find ourselves in as a nation at the moment. A minority of the citizenry in an absolute lather about climate change - aided and abetted by maliciously clueless politicos with an axe to grind and an agenda that has more to do with their personal ambitions than it does with such quaint ideas as "being good for the country" - dictating to the majority of the American public how it's going to be.

Posted by jez at 8:29 AM

August 29, 2010

A Four Wheeled Xanax....

Dan Neil
The 2011 Nissan Leaf is the world's first mass-market all-electric automobile, to be built in the hundreds of thousands globally/annually by Nissan beginning this winter. And may I say, thank God and Carlos Ghosn, chief executive of Nissan. Not so much a game changer as a game starter, the Leaf is a five-seat, five-door passenger EV sedan sold from California to Maine, with a nice, round 100-mile estimated range; 0-60 mph acceleration of around 10 seconds; and a top speed of 90 mph. The U.S. price is $32,780 (not counting the $7,500 federal tax credit for EVs) and includes a host of value-added, segment-competitive features, such as Bluetooth, navigation, 16-inch alloy wheels. Such a car would have been science fiction five years ago.
Posted by James Zellmer at 8:51 AM

August 23, 2010

Cold War History

The Nuclear Museum.

Posted by James Zellmer at 8:55 PM

August 10, 2010

Matt Simmons, Author of "Twilight in the Desert" and Peak Oil Speaker, Dies at Age 67

Gail the Actuary:
In his view (and in ours, too), way too many people hear about the huge reported reserves of Saudi Arabia and other Middle Eastern countries, and assume that this oil is really available for extraction. Matt makes the point that these reserves, and many others around the world, have not been audited. In fact, they seem to be political numbers, so we cannot depend on them. He also points out that we also do not have detail data with respect to historical oil extraction from individual fields in the Middle East, so we really do not know how close to decline Saudi Arabia and other Middle Eastern countries really are.

In 2005, Matt Simmons wrote a book called Twilight in the Desert. In it, he summarized what he learned about Saudi Arabian oil production by reading 200 academic papers. He concluded from his analysis that the oil extraction techniques being used there were techniques that one might use if the fields were quite depleted. Because of this, he doubted that we should believe stories that Saudi oil production can be greatly expanded. Instead, he raised the possibility that in the not too distant future, Saudi oil production will suddenly decline. Matt's research underlying the book was no doubt behind his concern that oil reserves and oil production rates are not audited.

Another thing Matt is known for is his educational graphics about "what is really going on" with respect to oil extraction. For example, in his talk at the 2009 ASPO--USA conference, he shows this graphic of the amount of conventional oil discovered by decade.
Posted by James Zellmer at 9:06 AM

July 4, 2010

The Energy Future

Ed Wallace:
The winter of 1979 in southern California reminded people why they had migrated to LA over the decades. The daytime temperatures were in the mid-70s, and the LA basin's summer smog had disappeared, revealing the snowcapped San Gabriel Mountains.

At Neonex Leisure that day, we were brainstorming the recreational vehicle of the future. At the time we built America's largest RV, the Arctic Sun, a combination van/pickup truck pulling a 55-foot-long 5th-wheel trailer. Now Neonex Canada had put our California division in charge of designing the company's next Class A Motorhome.

Each of the other five U.S. managers gave their impressions of the future of the recreational vehicle, disclosing visions of startling grandeur. I was more flippant: "I bet it's a Honda with a Coleman tent." Three months later the Second Energy Crisis hit. We shut down our RV plant in two days flat, and I was back in Texas in five.

My point is that, if you had asked every energy or automotive issues guru what the future would hold for automobiles just before the winter of 1978 - 79, the answer would have been completely different if you'd asked them the same thing just 12 months later. That's what an energy crisis can do.

My joke about a Honda with a Coleman tent was weirdly prophetic. But my fellow managers' visions of million-dollar motorhomes would also turn out to be spot on -- 20 years later.
Posted by James Zellmer at 9:47 PM

April 10, 2010

Energy Secretary Chu provides an optimistic view of our energy future at EIA conference

Gail The Actuary:
Energy Secretary Chu gave a talk at the EIA/SAIS Energy Conference on April 6-7. I want to share a few highlights of it, and give my impression. Both the Powerpoint slides and audio can be accessed at this link.

My general view of the talk is that Chu is extremely optimistic, in terms of what he thinks can be done. He also fails to tell listeners what our real problems are.

Wow! Slide 2 indicates that Chu thinks America has the opportunity to lead the world in a new industrial revolution. How does he think that is going to be done?

The first industrial revolution was during a time of increasingly available energy, because of the new use of coal. That is very unlikely in the future, both because of peak oil, and because of hoped-for constraints on fossil fuel use because of climate change issues. Net energy available to society is likely to be going down, not up! It is hard to understand an industrial revolution under those circumstances, unless it is a retooling to a much lower level--but later slides make it clear that is not what he is thinking of.
Posted by James Zellmer at 4:03 PM

March 13, 2010

Déjà vu: Energy Prices

Ed Wallace:
It's hard to believe it's been two years this month since this column first revealed that speculators were running riot in the oil futures market. I pointed out that unrestrained commodities speculators were causing the oil price climb we were seeing, which would send the cost of crude to a peak of $147 a barrel by the summer of 2008. At the time most "experts" quoted in the media were saying that oil prices were skyrocketing because world supplies couldn't keep up with demand, or because we had passed the point of Peak Oil. Neither position was true, of course; just looking at tanker shipments and worldwide oil supplies on hand, those concepts were obviously invalid.

Many of the columns I wrote for BusinessWeek in the spring and summer of 2008 debunked all the excuses being given for oil prices' suddenly doubling. Today it has come to be considered common knowledge, even common sense, and that's good for my track record.

Unfortunately for the country's track record, however, knowing the truth hasn't changed a thing.

Hegel, Call Your Publicist

Last October, in a follow-up column for BusinessWeek, "How Wall Street Will Kill the Recovery," I pointed out how investment banks were again profiting from taxpayer-funded bailout benefits.

They were taking those near-zero-interest loans and, instead of using the money to restart lending (and thus, it's hoped, the economy), they were pumping much of it into equities and commodities. There they were profiting from the ever-rising paper prices caused by the huge influx of cheaply borrowed money.
Posted by James Zellmer at 9:56 PM

January 22, 2010

Time Lapse Power Plant Video

Jeff Crewe:
"I am not making a political statement with this video,” writes the photographer Grewe, a tree-climbing arborist by day. “My intentions are purely artistic. The imagery is intense and I found audio to compliment it.”
Posted by James Zellmer at 12:54 PM

December 6, 2009

Will Big Business Save the Earth?

Jared Diamond:
THERE is a widespread view, particularly among environmentalists and liberals, that big businesses are environmentally destructive, greedy, evil and driven by short-term profits. I know — because I used to share that view.

But today I have more nuanced feelings. Over the years I’ve joined the boards of two environmental groups, the World Wildlife Fund and Conservation International, serving alongside many business executives.

As part of my board work, I have been asked to assess the environments in oil fields, and have had frank discussions with oil company employees at all levels. I’ve also worked with executives of mining, retail, logging and financial services companies. I’ve discovered that while some businesses are indeed as destructive as many suspect, others are among the world’s strongest positive forces for environmental sustainability.

The embrace of environmental concerns by chief executives has accelerated recently for several reasons. Lower consumption of environmental resources saves money in the short run. Maintaining sustainable resource levels and not polluting saves money in the long run. And a clean image — one attained by, say, avoiding oil spills and other environmental disasters — reduces criticism from employees, consumers and government.
Much more on Jared Diamond here.
Posted by James Zellmer at 6:02 PM

August 31, 2009

The Iraqi who saved Norway from oil

Martin Sandbu:
When he boarded his flight from London to Oslo, Farouk al-Kasim, a young Iraqi geologist, knew his life would never again be the same. Norway was a country about as different as it was possible to imagine from his home, the Iraqi port city of Basra. He had no job to go to, and no idea of how he would make a living in the far north. It was May 1968 and al-Kasim had just resigned from his post at the Iraq Petroleum Company. To do so, he had had to come to the UK, where the consortium of western companies that still controlled most of his country’s oil production had its headquarters.

For all its uncertainties, al-Kasim’s journey to Norway had a clear purpose: he and his Norwegian wife, Solfrid, had decided that their youngest son, born with cerebral palsy, could only receive the care he needed there. But it meant turning their backs on a world of comforts. Al-Kasim’s successful career had afforded them the prosperous lifestyle of Basra’s upper-middle class. Now they would live with Solfrid’s family until he could find work, though he had little hope of finding a job as rewarding as the one he had left behind. He was not aware that oil exploration was under way on the Norwegian continental shelf, and even if he had known, it wouldn’t have been much cause for hope: after five years of searching, still no oil had been found.

But al-Kasim’s most immediate problem on arriving in Oslo that morning was how to fill the day: his train to Solfrid’s home town did not depart until 6.30pm. “I thought what I am going to do in these hours?” he says. “So I decided to go to the Ministry of Industry and ask them if they knew of any oil companies coming to Norway.”
Posted by James Zellmer at 9:35 AM

May 9, 2009

Khosla on Renewable Energy

Robert Rapier:
EC (13:40): In the past 90 days we have seen something like a billion dollars being put into solar investments - whether in the form of equity or debt. Is that stupid money?

VK: The people who are putting in gobs of money, behind people chasing First Solar at billion dollar valuations - I won't say it's stupid but it's not something I would do with my money. (EC: That pretty much counts as stupid). A diversity of opinion is good. I am often wrong. (EC: Sometimes you are). You only need to be correct once in a while because in our business you only lose one time your money but you can make 100 times quite easily. I don't have to be very right.

(RR: I would like to hear that during his next congressional testimony where he is trying to drive the direction of energy policy: "I am often wrong." But this also gets to the heart of why I often object to what he is saying. If he uses his high level of influence to help put us down the wrong path on energy policy, then what are the consequences of being wrong? They could be severe.)

EC (14:38): How many companies do you currently have in your portfolio?

VK: Our clean tech portfolio has probably about 50 companies.

EC (15:48): Which was the biggest disappointment?

VK: We have not had any large cut-offs - I am trying to think - in our clean tech portfolio. When we have invested a lot of money, there's one or two places - well one we wrote off; one called Altra. (RR: Altra is a corn ethanol producer that is on the ropes). There's one place we actually decided to change the plan - Cilion - and made it capital neutral, so they don't need a lot of cash. Got rid of the debt; the company is going fine, but sort of on the slow boat.
Posted by James Zellmer at 7:00 AM

April 22, 2009

"Gallons Per Mile Calculator"

Rick Larrick:
This page describes the MPG illusion and provides tools for converting miles per gallon (MPG) to gallons of gas consumed over different driving distances. It is periodically updated with new content. A brief summary of the problems with MPG and benefits of GPM can be found here and here.
Much more here.
Posted by James Zellmer at 5:22 PM

January 20, 2009

600 Private Jets Expected for the Obama Nomination; 2X the 2004 Number

Robert Frank:
For the wealthy, Tuesday's inauguration is the dream party: a chance to rub elbows with the similarly rich and powerful, to become part of a historic moment, and (most importantly), to get access to the man of the moment.

It also is a chance to drown their financial sorrows in an emotional wave of optimism.

Yet it may come as a surprise that at a time of financial crisis and Green correctness, many of the wealthy are choosing to arrive by private jet.

According to an article in Bloomberg, as many as 600 private jets were expected to touch down in D.C. for the inauguration. The runway at Washington Dulles was closed Saturday to allow as many as 100 small planes to park. And the Metropolitan Washington Airports Authority said it expected a total of 500 small jets to land from Jan. 16 through Jan 21.

"That would set a record, topping the 300 the airport accommodated for President George W. Bush's 2004 inaugural," an Airports Authority says in the article.
Posted by James Zellmer at 10:15 AM

November 23, 2008

Oregon Gears Up For Chinese Auto Imports

Bertel Schmitt:
Last week, Oregon Governor Ted Kulongoski clinched a deal to bring Nissan’s pure-electric cars to his state. Then, he went on to Shenzen, China. “At BYD Auto Co., China’s fast-growing automotive star, a plug-in electric hybrid sedan is just weeks from meeting millions of Chinese consumers” writes the Oregonian. “The F3DM, which runs up to 80 miles on a single charge and packs a 7-gallon tank, will probably launch in the United States by 2010.” The Governor wants it to be built in Oregon. On Friday, he met with BYD President Wang Chuanfu. On a 10-day business trip through Asia, Kulongoski had laid out his vision to automakers in Japan and China: Electric charging stations every 60 miles along interstates. Tax incentives for Oregonians to buy electric cars. Tax bonuses for drivers to build car chargers in their garages. And, unspoken, but you can bet on it: generous incentives for those who bring their factories to Oregon. Then, Kulongoski has guanxi, connections, indispensable for a successful Chinese deal…
Posted by James Zellmer at 1:46 PM

November 5, 2008

Destroying Oil as a Strategic Commodity

Joe Francica:
A Summary of Remarks by Former CIA Director Jim Woolsey at the GEOINT Symposium

At the GEOINT Symposium in Nashville, Tennessee, former director of the Central Intelligence Agency (CIA) Jim Woolsey gave a chilling account of the implications for national security related to the United States' dependence on foreign oil. He described the vulnerabilities of a resource located far from our shores, highlighting how consumer habits could have dramatic geopolitical consequences. He then offered a solution to the crisis by suggesting a way to remove oil as a strategic commodity.

Woolsey's assessment of the problem is similar to what we have heard from T. Boone Pickens, the oil businessman-turned wind power advocate. We spend in the range of $350 - $700 billion per year for oil, depending on the price per barrel. The reality is that the U.S. and other oil importers like China and India are engaging in the biggest transfer of wealth in history. The result is that the U.S. is either directly or indirectly providing funds to support countries that may not have our best interests at heart. "Oil tends to be produced by countries that are either run by autocrats or dictators. (One exception: Norway). So, one of the things we are doing with this money is contributing to the support of dictators. Putin [Russia] and Chavez [Venezuela] are a bit quieter with oil at $65 per barrel," said Woolsey. "[However], a national energy policy that depends on oil is probably one of the stupider policies ever done. Even at $65 per barrel, we still have one of the biggest transfers of wealth the world has ever seen."
Posted by James Zellmer at 1:52 PM

August 26, 2008

A narrated slide show on the latest Texas Monthly Cover


Posted by jez at 8:44 AM

July 18, 2008

Biofuels Deathwatch Map

Craig Rubens:

Biofuel plants have been put on hold faster than your phone company’s tech support line. With corn and soy prices hitting record high prices and an ethanol glut flooding the market, ethanol’s profit margin per gallon has dropped to a meager 25 cents from $2. That’s causing numerous ethanol and biodiesel plants to get put on hold or downright canceled. Hundreds of millions of gallons of production capacity and hundreds of millions of dollars in biofuel investments are now hanging in limbo, as investors hope prices will level out.

That’s not to say that ethanol is dead in the water. There’s a variety of positive reports coming out on the future of the industry — there’s reports that see a meaningful future for ethanol , as well reports saying ethanol could be deliver a better-than-expected energy return. Add in a healthy merger and acquisition market and biofuels will play a role in the future of weaning the U.S. off oil.

Posted by jez at 10:43 AM

May 29, 2008

Why Rivals Don't Copy Southwest's Hedging

George Anders:

David Carter, an associate professor of finance at Oklahoma State, has an interesting perspective on why rivals haven't caught up to Southwest. Prof. Carter helped write a 2004 case study on Southwest's hedging that is taught in business schools. Although the study details how Southwest uses home-heating-oil futures and other instruments to make its hedges work, Prof. Carter says he has heard from only one other airline that seemed interested in putting that knowledge to work: the German carrier Lufthansa.

Other carriers may have opted for caution because it is psychologically hard to switch strategies when prices are moving against you, Prof. Carter says. Airlines that didn't hedge much when oil was at $25 or $40 a barrel might have felt uncomfortable launching a big hedging program when oil got above $60.

Frequent management shuffles at many airlines also might have made it harder for carriers other than Southwest to jump into hedging in a big way, Prof. Carter adds. A hedging blunder early in a CEO's tenure might overshadow whatever else that boss might be accomplishing.

Southwest's treasurer, Scott Topping, offers another possible explanation of why his airline has stayed ahead of the pack so long: Since the late 1990s, Southwest's hedging strategy has been set by two or three people, rather than by committee, making it easier to act decisively.

Posted by jez at 9:01 AM

May 21, 2008

A Scooter Rant

Peter DeLorenzo:

But I reserve particular ire for the burgeoning scooter movement that’s being written about on an alarmingly frequent basis in the media with every new report of another record price for a barrel of oil. Now, don’t get me wrong, because I have nothing against scooters. I like them, as a matter of fact. They can be fun, efficient and even cool in the right circumstances. But presenting scooters as a viable transportation option for the masses in this country is flat-out irresponsible.

Let me backup here for a second and repeat that sentence: “...can be fun, efficient and even cool in the right circumstances.” Guess what, folks - riding your Vespa down Woodward Avenue, Michigan Avenue or Fifth Avenue does not constitute “the right circumstances.” Americans clearly watched too many Italian movies from the 60s and became enamored with the whole "sweater tied around the neck/sunglasses on top of your head/voluptuous girl hanging on the back of the scooter" thing, and this latest gas frenzy has started to warp their thinking, big time.

Posted by jez at 8:57 PM

April 18, 2008

The "Rebirth of the Rust Belt"

CNBC video of Matthew Simmons on the "end of the Starbucks' economy". Bottom line, from Simmons: good for the midwest.

Posted by jez at 11:01 AM

April 14, 2008

On Energy: "Some home truths about tomorrow"

Ed Wallace:

It’s about 179 miles from Fort Worth to the campus of Texas A&M in College Station, and I drove there to speak at the Student Conference On National Affairs on Thursday, February 21. It was not lost on me that making the round trip between the Metroplex and A&M’s Memorial Student Center meant that I would use the equivalent of one barrel of oil to discuss the fallacy of America’s quest for energy independence.
My slight amusement continued when one of the first students I met had arrived late from Chicago because his luggage had been misrouted and lost by the airline. I doubted that he got the irony of how much fuel it took to bring him the 1,100 miles from Chicago to Texas to attend SCONA 53, which was titled "Creating A Sustainable Global Energy Policy."

Simply Selfish: Ethanol or Food

My talk came after an address by the Ambassador of Azerbaijan and before talks by Mark Albers, a senior vice president of Exxon, and by Virginia Governor George Allen. I had been asked to speak that afternoon about the magic of alternative fuels’ saving the day and alleviating the current energy crisis – assuming that high price is the sole determining factor in today’s energy debate. I felt the best way to do that was to discuss the beginnings of the automotive age in both America and the world, to relate to the students and professionals attending how, in the 1920s, these exact same circumstances led to a campaign to wean the American public off of oil – and why today the debate is back, but the end results will be the same.

I usually find it best to use 4th-grade math to show the fallacy of the again-current line of thinking about alternative fuels such as ethanol. After all, most people seem shocked to learn the fact that a new 2008 Suburban, designed to run on E85 ethanol and in which the owner uses only E85 as fuel, requires four acres of farmland be dedicated to corn production to keep that one vehicle running. But it’s true: That Suburban owner may live in a beautiful home on a quarter acre in the Metroplex, but somewhere in America four acres of corn must be set aside to provide fuel for just that one SUV.

Posted by jez at 9:07 AM

April 11, 2008

Waterloo's Crave Brothers Featured on NBC Nightly News

Roger O'Neill video takes a look at the Crave Brothers use of methane - from their cow poop - to power the farm and 120 neighboring homes. The farm includes a cheese factory.

Posted by jez at 6:46 PM

March 24, 2008

Gasoline Tax Comparison

Via The Economist.

Posted by jez at 4:57 PM

February 25, 2008

The Gospel According to Matthew

Mimi Swartz:

The Coronado Club, in downtown Houston, is an unlikely place to contemplate the end of life as we know it. Plush and hushed, with solemn black waiters in crisp black jackets, the private enclave practically exudes wealth and stability. Captains of local industry enter and exit purposefully, commanding their usual tables, wearing the best suits. Everybody knows everybody else. The light is flattering. The wine room is nicely stocked.

But here is Matthew R. Simmons, the head of one of the largest investment banking firms in the world, stabbing at his salad greens and heatedly discussing the chaos to come when, as he has long predicted, global oil production peaks and for the rest of our time on earth we struggle and suffer and barely endure under a diminishing supply of fuel until it disappears entirely. This idea is known as “peak oil,” and Simmons is its most fervent, and fearsome, apostle. As he puts it, “I don’t see why people are so worried about global warming destroying the planet—peak oil will take care of that.”

Slashing through his entrée, barely stopping for breath, he describes a bleak future, in which demand for oil will always surpass supply, the price will continue to rise—“so fast your head will spin”—and all sorts of problems in our carbon-dependent world will ensue. As fuel shortfalls complicate global delivery routes and leave farmers unable to run their tractors, we will face massive food shortages. Products made with petroleum, from asphalt and plastic to fabrics and computer chips, will also become scarcer and scarcer. Standards of living will fall, and people will not be able to pay their debts. Lending will tighten, and eventually there will be major defaults. Growth will cease, and hoarding will set in as oil becomes increasingly rare. Then, according to Simmons, the wars will begin. That is the peak oil scenario.

Posted by jez at 9:31 AM

February 17, 2008

"Google's Addiction to Cheap Electricity"

Ginger Strand:

"Don't be evil", the motto of Google, is tailored to the popular image of the company--and the information economy itself--as a clean, green twenty-first century antidote to the toxic excesses of the past century's industries. The firm's plan to develop a gigawatt of new renewable energy recently caused a blip in its stock price and was greeted by the press as a curious act of benevolence. But the move is part of a campaign to compensate for the company's own excesses, which can be observed on the bansk of the Columbia River, where Google and its rivals are raising server farms to tap into some of the cheapest electricity in North America. The blueprints depicting Google's data center at The Dalles, Oregon are proof that the Web is no ethereal store of ideas, shimmering over our heads like the aurora borealis. It is a new heavy industry, an energy glutton that is only growing hungrier.
I wonder how the economics and energy consumption details compare between growing web applications and legacy paper based products?

Posted by jez at 8:24 AM

January 28, 2008

A Conversation About Peak Oil

Nicholas Jackson:

NATE HAGENS is an editor of The Oil Drum, an online community that seeks to raise awareness about energy issues. A Ph.D. candidate in Natural Resources at the University of Vermont, Hagens’s particular areas of interest are the principles of net energy and the bio-physiological factors that drive our energy demand.

MATT SAVINAR is the editor and writer of Life After the Oil Crash, a blog which paints a bleak picture of what life on earth will look like when natural oil supplies run out. Savinar recently received his J.D. from the University of California at Hastings College of the Law, and his work is quoted extensively on the floor of the United States Congress.

One article in this month’s issue of Texas Monthly centers on Matthew Simmons, a Houston investment banker described as the most fervent apostle behind the idea of peak oil. How does the apocalyptic world that Simmons and other energy pessimists foresee in the near future—massive food shortages, a falling standard of living, wars—compare to your own predictions? What does the world look like with less oil?

Posted by jez at 1:00 AM

January 21, 2008

Oil Demand, the Climate and the Energy Ladder

Jad Mouawad:

Energy demand is expected to grow in coming decades. Jeroen van der Veer, 60, Royal Dutch Shell’s chief executive, recently offered his views on the energy challenge facing the world and the challenge posed by global warming. He spoke of the need for governments to set limits on carbon emissions. He also lifted the veil on Shell’s latest long-term energy scenarios, titled Scramble and Blueprints, which he will make public next week at the World Economic Forum in Davos, Switzerland. Following are excerpts from the interview:

Q. What are the main findings of Shell’s two scenarios?

A. Scramble is where key actors, like governments, make it their primary focus to do a good job for their own country. So they look after their self-interest and try to optimize within their own boundaries what they try to do. Blueprints is basically all the international initiatives, like Kyoto, like Bali, or like a future Copenhagen. They start very slowly but before not too long they become relatively successful. This is a model of international cooperation.

Posted by jez at 7:22 PM

January 13, 2008

Grass Makes Better Ethanol than Corn

David Biello:

Farmers in Nebraska and the Dakotas brought the U.S. closer to becoming a biofuel economy, planting huge tracts of land for the first time with switchgrass—a native North American perennial grass (Panicum virgatum) that often grows on the borders of cropland naturally—and proving that it can deliver more than five times more energy than it takes to grow it.

Working with the U.S. Department of Agriculture (USDA), the farmers tracked the seed used to establish the plant, fertilizer used to boost its growth, fuel used to farm it, overall rainfall and the amount of grass ultimately harvested for five years on fields ranging from seven to 23 acres in size (three to nine hectares).

Once established, the fields yielded from 5.2 to 11.1 metric tons of grass bales per hectare, depending on rainfall, says USDA plant scientist Ken Vogel. "It fluctuates with the timing of the precipitation,'' he says. "Switchgrass needs most of its moisture in spring and midsummer. If you get fall rains, it's not going to do that year's crops much good."

Posted by James Zellmer at 12:00 AM

November 6, 2007

Georgia Plant is First for Making Ethanol from Waste

Kathleen Schalch:

for curbing greenhouse gas emissions and pursuing energy independence lies in cellulosic ethanol. That's ethanol that could be brewed from things like corn stalks, straw, wood chips — things we normally throw away.

Companies have been racing to find cost-effective ways to make this form of ethanol. A company called Range Fuels in Georgia is scheduled to break ground Tuesday on the world's first plant for making cellulosic ethanol.


Range Fuels website.

Posted by James Zellmer at 1:17 PM

November 1, 2007

When will global oil production peak? Here is the answer!

"Fabius Maximus":

Peak Oil will be one of the defining events of this century. Forecasts by professionals in energy-related fields fall in a large range between 2006 and 2025+, with most forecasts by institutions in the later half of this range. Estimates vary widely due to two very different kinds of factors.

Posted by James Zellmer at 9:03 AM

September 14, 2007

Jolly green heretic

The Economist:

Stewart Brand, a pioneer of both environmentalism and online communities, has not lost his willingness to rock the boat.

IN SOME respects Stewart Brand's green credentials are impeccable. His mentor was Paul Ehrlich, an environmental thinker at Stanford university and author of “The Population Bomb”, published in 1968. That book, and the related Club of Rome movement of the 1970s, famously predicted that overpopulation would soon result in the world running out of food, oil and other resources. Though it proved spectacularly wrong, its warning served as a clarion call for the modern environmental movement.

Mr Brand made his name with a publication of his own, which also appeared in 1968, called “The Whole Earth Catalogue”. It was a path-breaking manual crammed with examples of small-scale technologies to enable individuals to reduce their environmental impact, and is best known for its cover, which featured a picture of the Earth from space (which Mr Brand helped to persuade America's space agency, NASA, to release). The book became a bestseller in anti-corporate and environmental circles. In 1985 Mr Brand co-founded the WELL, a pioneering online community that was a precursor of today's social-networking websites such as MySpace and Facebook.

Mr Brand still has a following among the Birkenstock set, and even lives on a tugboat near San Francisco. But meet him in person and it becomes clear he is not exactly your typical crunchy-granola green. Sitting down to lunch at a posh beach resort on Coronado Island, off San Diego, he does not order a vegan special but a hearty Angus burger with bacon, cheese and French fries, and a side-order of lobster bisque. “I'm genetically a contrarian,” he says with a broad smile.

Posted by James Zellmer at 7:01 PM

July 30, 2007

A Federal Energy Policy: Can It Happen Here?

Petroleum and Natural Gas Watch
by Michael Vickerman, RENEW Wisconsin
July 27, 2007, Vol. 6, Number 9

Of all the issue areas that Congress dives into from time to time, none reveals the inability of our legislative branch to fashion an internally consistent national policy quite like energy. The usual items in an energy bill--tax credit extensions, fuel subsidies, fresh regulatory requirements (and loopholes), new rules on offshore drilling, etc.—are designed to reward specific industries and influential constituencies. This year’s energy bill promises to follow that timeworn path left by Congresses of yesteryear.

But an energy bill has to be more than the sum of its subsidies to constitute effective policy. This is especially true as we enter a time of growing resource and environmental limits that threaten to bite us in the collective behind if we don’t curb our profligate consumption of energy.

Now is not the time to continue subsidizing every form of energy that can be produced in the United States, as the current Congress seems intent on doing. In previous bills, Congress has taken great pains to make sure that every energy constituency—coal, oil, nuclear or renewables--gets its fair share of the federal pie, regardless of need or environmental impact. This is the cheap energy paradigm at work—promoting economic growth by artificially lowering energy prices.

But while this paradigm may have been defensible before U.S. oil output reached its maximum in 1970, it has no place in today’s energy-constrained world. Artificially lowering the cost of all energy sources will not only encourage waste and overconsumption, it will hasten the arrival of that traumatic day when the flow of cheap oil and natural gas cannot meet the demands of a hypermobile society.

It’s no secret that Congress lacks the stomach for offending powerful energy lobbies like Big Coal. But it’s simply not possible to institute policy changes, especially those intended to reduce carbon dioxide discharges into the atmosphere, without picking a fight with the coal industry, the electric utilities, and what’s left of the U.S. automotive industry. Therefore, if Big Coal pronounces itself satisfied with the energy bill’s contents when it is passed, you can be certain that Congress declined to incorporate any provisions that would cause coal’s share of the energy pie to shrink, such as a carbon tax or renewable feed-in tariffs.

What makes the United States singularly incapable of producing a coherent energy policy aimed at cutting energy consumption and using low-carbon alternatives to fossil fuels? I believe there are three factors explaining this lamentable state of affairs. The first is that your average American citizen has the energy IQ of beach sand, and, in this regard, your average Member of Congress is the mirror image of his or her constituents. For proof, I would direct your attention to Sen. Chuck Schumer of New York, who regularly appears on news programs to suggest that gasoline is overpriced at $3.00 per gallon and that motorists are being fleeced by dastardly oil companies.

Actually, at that price gasoline is a steal, and it would be so even at $4.00—the amount Canadians pay--or $5.00. Packing 125,000 Btu’s of energy, a gallon of gas will power the average car 25 miles, yet it costs less on a volumetric basis than milk, apple juice, Evian, coffee from Starbucks, Mountain Dew, Listerine, and Red Bull. Try getting that performance with a gallon of Gatorade in your tank. It will set you back $10 and you still wouldn’t be able to back your car out of the garage.

It should be noted that retail gasoline prices in Germany are the equivalent of $7.00 per gallon, yet its economy remains healthy. Why is that? Because Germany, unlike the underachieving U.S., has a national energy policy designed to transition the nation smoothly into a post-fossil fuel energy environment. By taxing fossil energy and providing long-term price support for wind and solar electricity production, the Germans are plowing today’s wealth into building up a sustainable energy system that can withstand the future economic dislocations resulting from Peak Oil and climate change.

Indeed, no other country has made as much progress as Germany in building up a renewable energy infrastructure for delivering low-carbon electricity to homes, businesses, and rail networks. But other countries that lack domestic supplies of fossil energy, like Spain, the Netherlands and Denmark, are also moving aggressively to harness their renewable resource base. They too are light years ahead of the United States in this regard.

A second problem confronting policymakers is the unequal distribution of energy resources across this vast country of ours. A handful of coal-producing states—West Virginia and Wyoming come to mind--are net fossil energy exporters, and will view with hostility any policy proposal that will place limits on energy extraction within their borders. Their power is magnified by the markets they serve, which include large swaths of the Midwest and South.

On the other side of the coin are the West Coast states, Florida and New England, which are populous regions that which have no domestic coal interests to protect. Nor does the automotive industry have a big presence in these states. Not having to appease Big Coal or Big Auto enables state governments in these regions to plot a more aggressive course toward achieving emissions reductions and fuel diversity goals, as is being done in California and Florida.

One would expect members of Congress to promote the principal energy industries in their region. This predisposes them to enter into strategic alliances with other members representing different energy interests, usually of the “I’ll watch your back if you’ll watch mine” variety. Though these alliances are necessary for lubricating the deal-cutting and building support for the entire package, often it comes at the expense of public policy objectives.

Indeed Congress is institutionally incapable to pass a comprehensive energy bill that attempts to diversify the nation’s energy resource base and scale back its carbon footprint unless it contains elements that work in the opposite direction (e.g., gasifying coal and expanding offshore drilling).

Further complicating matters is the very nature of the U.S. Senate itself, a body organized to magnify the power of individual states to block “national interest” initiatives from changing the status quo. Each state is equally represented in the Senate, no matter how populous. And Senate tradition grants committee chairpersons enormous deference to bottle up or water down legislation that might impose unwanted changes on the states they represent.

Another Senate tradition, the right of unlimited debate, is enforced by a rule that expressly allows a minority of senators to thwart the will of the majority. To shut off debate on a measure, especially one in which powerful economic forces and regional interests are pitted against each other, bill proponents have to line up not 51 but 60 votes. Under the rule, debate continues even if 59 senators vote in favor of ending it and only one votes against the motion.

The energy bill passed by the Senate in June came tantalizingly close to incorporating a 10-year tax package that would have raised $29 billion, mostly from oil and gas companies and redirected it toward renewable energy development. The tax package was designed to be self-supporting; that is, it would not have trigged additional borrowing to underwrite the pro-renewable energy incentives.

Would such a tax package raise prices at the pump? A little. But remember too that $29 billion equates to about nine months’ profit for Exxon Mobil alone. And, from a social equity perspective, it’s always better to base energy subsidies and incentives on a real-time transfer of wealth than to saddle future taxpayers with even greater levels of indebtedness.

Nonetheless, the oil and gas companies objected to the closing of their favored tax loopholes, and they called upon their senatorial friends in the Oil Patch states to kill off this measure. To accomplish this, these senators made common cause with their counterparts from the Southeast and Rocky Mountain states, where Big Coal is very strong. Thought this minority bloc was outvoted 57-36, they managed to prevent the tax package from being attached to the larger energy package. In any other legislative venue, losing a vote by a margin of 21 would be considered a stinging defeat, but on the floor of the U.S. Senate, it counts as a win.

In his most recent installment of Lyndon Johnson’s biography, author Robert Caro points out that there have been only a few periods in the nation’s history where the Senate lowered the floodgates and allowed legislation reflecting the popular will to come washing through its portals. Those rare instances resulted from significant political realignments that put one party with an activist agenda firmly in power.

The closest the United States came to a coherent national energy policy was during the mid-to-late 1970’s. During that period there was a prevailing sense of anxiety over the nation’s energy security, and both the legislative and the executive branches responded to the national mood with decisive actions. In a five-year period Congress passed laws creating automobile fuel efficiency standards, prohibiting new gas-fired power plants, and requiring utilities to purchase electricity generated by independent entities. By the debased standards of current governance, those were amazingly productive years.

However, once the price oil dropped in the 1980’s, the urgency of the previous decade evaporated, and successive administrations began dismantling the policy initiatives adopted in the Ford and Carter years. When the Reagan Administration lowered fuel efficiency standards in 1986, Chrysler Corporation chairman Lee Iacocca said: “We are about to put up a tombstone ‘Here lies America’s energy policy.’”

It would take nothing short of a sea change to overcome Congressional inertia and recover the ground lost in the last 25 years or so. But though the prospects for a truly coherent national energy policy are improving -- and the need has never been greater -- both the citizenry and the current Congress are far too complacent to entertain changes that might involve belt-tightening and discipline. Given the current political dynamic, it would be unrealistic to expect this Congress, with its narrow majorities, to be the one that jump-starts the federal government into meaningful action.

Yes, we will see some progress on the energy front this year and next, but they will represent the sum of state government initiatives undertaken to counter the policy vacuum that persists at the federal level.

Caro, Robert A., Master of the Senate: The Years of Lyndon Johnson, 2002, Alfred A. Knopf Inc., New York.

National Environmental Trust: History of Fuel Standards, One Decade of Innovation, Two Decades of Inaction. URL: http://www.net.org/documents/cafe_history.pdf

RENEW Wisconsin is a nonprofit organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. Michael Vickerman’s commentaries also posted on RENEW’s Web site, RENEW’s blog, and Madison Peak Oil Group’s blog.

Posted by Ed Blume at 1:59 PM

July 10, 2007

Home features 8.4 kW solar electric system

From a story by Alec Luhn in the Wisconsin State Journal:

When he got to what he calls "the mid-life crisis age," Madison resident Jim Taylor, 45, said he figured "Well, I'm going to have to either buy a sports car or do something.'"

For Taylor, that something was installing an 8.4-kilowatt solar panel array on his roof in April -- the largest solar-energy system on a Madison residence.

Although he originally intended to supply only his family's energy needs, he has been selling his excess energy to Madison Gas & Electric the last two months and now could increase his earnings under a new buyback rate proposed by the utility.

Under the proposal, Taylor would sell all of his energy to MGE at a rate of 25 cents per kilowatt-hour and buy back the portion he needs from the utility's overall pool of renewable energy at about 10 cents per kilowatt-hour.

Posted by Ed Blume at 12:00 PM

May 21, 2007

Facts About Danish Energy Independence

Tyler Cowen:

  1. The U.S. uses a bit more than 300 barrels of oil to produce one million Euros of gdp, Denmark uses just a bit over 100 barrels.
  2. Pig blubber is an important medium for heating.
  3. Energy consumption has held roughly steady for 30 years, even though gdp has doubled.

Posted by James Zellmer at 9:06 AM

May 13, 2007

Recent Rental Cars: 2007 Mazda Miata

The rental car counter presented a simple choice for my "compact" reservation: Mazda Miata or Minivan. I put the top down and began my journey with an '07 Miata. Quick summary: better than I expected, particularly in the acceleration department, but..... uncertain handling at upper end highway speeds.

Decent seats, useful controls, easy to use convertible top and.... 27mpg after a mix of highway and suburban driving. Unfortunately, I've yet to see a rental car without an automatic transmission. A six speed manual Miata would have been much more interesting.

Much more on the Mazda Miata here.

Posted by James Zellmer at 11:05 AM

May 10, 2007

$4.00 Per Gallon Gas?


Posted by James Zellmer at 10:11 AM

April 24, 2007

Author of nation's toughest global warming law to speak April 25

The author of the nation's strongest global warming law tells us how California is responding to climate change and how she gained the political support to get it done ...

"Leading the Way on Climate Change"
a free public lecture by Fran Pavley

3:30 p.m. Wednesday, April 25
Memorial Union (see "Today in the Union" for room)
800 Langdon Street
University of Wisconsin-Madison

Fran Pavley has served three terms in the California State Assembly, where she is known as one of the most effective legislators in Sacramento. The former Mayor of Agoura Hills and long-time public school teacher is the author of landmark legislation (the Global Warming Solutions Act of 2006) on global warming that has become a model for other states and countries. She is also author of the first regulations on vehicle carbon dioxide emissions. Eleven other states and Canada have modeled their laws after Pavley's Clean Car Regulations. She has been selected as one of Scientific American's Top Technology Leaders in Transportation and received the 2006 California League of Conservation Voters' Global Warming Leadership Award along with former Vice President Al Gore.

This event is co-sponsored by the Nelson Institute for Environmental Studies and the Department of Atmospheric and Oceanic Sciences at UW-Madison. For more information, please contact Steve Pomplun at the Nelson Institute or call Steve at 263-3063.

Posted by Ed Blume at 10:57 AM

April 5, 2007

Doyle announces initiatives on energy independence and global warming

From the press statement posted on Governor Jim Doyle's Web site:

Office of Energy Independence

Governor Doyle today signed an Executive Order creating the new Office of Energy Independence to advance the Governor’s vision on energy policy and promote the state’s bioindustry. The office will serve as a single-point of contact for citizens, businesses, local units of government and non-governmental organizations pursuing bio development, energy efficiency and energy independence. The office will also identify federal funding opportunities and serve as the State Energy Office, working to maintain federal designation and funding.

One initial project for the office will be to work with the Public Service Commission (PSC) on a potential multi-utility effort to build a “clean coal” electric generation facility.

Judy Ziewacz will serve as Executive Director of the office, which will be located in the Risser Justice Building.

Task Force on Global Warming

Governor Doyle signed an Executive Order creating a Task Force on Global Warming that will bring together a prominent and diverse group of key Wisconsin business, industry, government, energy and environment leaders to examine the effects of, and solutions to, global warming in Wisconsin. Using current national and local research, the task force will discuss and analyze possible solutions to global warming challenges that pose a threat to Wisconsin’s economic and environmental health. The task force will create a state plan of action to deliver to the Governor to reduce our state’s contribution to global warming.

In conjunction with the new task force, the Governor directed the Department of Natural Resources, with the assistance of the PSC, to lead an effort to obtain a current estimate of the greenhouse gas emissions in Wisconsin.

The task force will be chaired by Roy Thilly of the Wisconsin Public Power and Tia Nelson of the Board of Public Land Commissioners.

Regional Summit of Midwest Governors

Governor Doyle announced that he has recently been elected to serve as Chair of the Midwestern Governors Association and will hold a summit of Midwest governors in Wisconsin this fall to focus on regional efforts to achieve energy independence and fight global warming.

In advance of this summit, Governor Doyle asked the PSC and Chairman Ebert to explore new technology that may allow us to capture carbon emissions before they go into the atmosphere, and to see how those technologies might be implemented across the Midwest.

Additionally, as chair, Governor Doyle will focus on reauthorization of the federal Farm Bill and promoting the economic vitality of the Midwest. The Governor’s agenda builds upon the work conducted by Minnesota Governor Tim Pawlenty as chair over the past year.

To prepare for regional collaboration, the Governor asked the PSC to explore potential opportunities to capture and sequester carbon across the Midwest.

Launch of Credit-Trading System Throughout the Midwest to Encourage Renewable Energy

To keep the cost of renewable energy down and to encourage more development across the Midwest, the PSC is launching a market driven regional effort with Minnesota, Iowa, South Dakota, North Dakota and the province of Manitoba to track and trade renewable energy credits. The Midwest Renewable Energy Tracking System will help support and stimulate a trading market to help these regional partners meet their renewable energy standards.

Posted by Ed Blume at 11:20 AM

April 4, 2007

State ready for energy research lab

This column by Tom Stills, president of the Wisconsin Technology Council, ran in the Stevens Point Journal:

A joint proposal was filed Feb. 1 by the UW System, UW-Madison and Michigan State University to open a federal energy research lab in Madison. Molly Jahn, dean of the UW-Madison College of Agriculture and Life Sciences, has described the proposal as a strong fit with faculty, staff and student projects related to bio-energy. Those projects are taking place in disciplines that encompass biology, agriculture, engineering, natural resources and the social sciences. . . .

It will be months before the next phase of the federal selection process begins, but the collaborative effort should merit a hard look in Washington. If Wisconsin is successful, it could mean several hundred jobs and tens of millions of dollars within five years.

Posted by Ed Blume at 12:03 PM

March 30, 2007

Corn is Not the Future of US Ethanol

Timothy Gardner:
New technology to make ethanol from crops such as grasses and trees instead of corn could ease price spikes of the grain within a decade, a U.S. Energy Department official said on Wednesday.

"I'm not going to predict what the price of corn is going to do, but I will tell you the future of biofuels is not based on corn," U.S. Deputy Energy Secretary Clay Sell said in an interview.

Output of U.S. ethanol, which is mostly made from corn, is expected to jump in 2007 from 5.6 billion gallons per year to 8 billion gpy, as nearly 80 bio-refineries sprout up.
Posted by James Zellmer at 3:57 AM

February 8, 2007

RENEW Wisconsin's newsletter online

This winter's edition of the Wisconsin Renewable Quarterly, now posted online, includes the following articles:

RENEW and Clean Wisconsin Defend Wind Power Project;
We Energies Cops National Honors;
Don Wichert: RENEW Founder and Tireless Advocate;
How I Fell in Love with My Solar Dryer;
PSC Approves WE Wind Project;
Doyle Sets Plans to Expand Renewables.

Posted by Ed Blume at 10:24 AM

February 1, 2007

Gasoline and the American People

Cambridge Energy Research Associates:
America's "love affair with the automobile" is being transformed -- but not broken up -- by forces that are redrawing the global gasoline and oil market, including higher gasoline prices, tightening environmental requirements, changing demographics, growing world oil demand and expanding fuel options, according to the new 2007 edition of Gasoline and the American People, by Cambridge Energy Research Associates (CERA).

Americans have been driving further -- 40% more than 25 years ago -- and using more gasoline in bigger, more powerful cars and other light duty vehicles. But higher gasoline prices have had a significant impact. The rate of growth in gasoline demand slowed sharply from its 1.6% per year pace (1990-2004) to 0.3% in 2005, and continued to grow slowly in 2006, at 1.0%. And for the first time in 25 years, motorists' average mileage went down. Overall, though, according to the CERA report, improved automotive efficiencies and one of the lowest fuel tax rates among Western countries have kept gasoline and oil's share of average U.S. household budgets at 3.8% in 2006, slightly above the 1960s' 3.4% to 3.6% level despite rising world oil prices.
Media coverage.

Ed Wallace has more.
Posted by James Zellmer at 11:12 AM

January 27, 2007

Ethanol: Very, Very Big Corn

Opinion Journal:
President Bush made a big push for alternative fuels in his State of the Union speech Tuesday night, calling on Americans to reduce gasoline consumption by 20% over 10 years. And as soon as the sun rose on Wednesday, he set out to tour a DuPont facility in Delaware to tout the virtues of "cellulosic ethanol" and propose $2 billion in loans to promote the stuff. For a man who famously hasn't taken a drink for 20 years, that's a considerable intake of alcohol. A bit of sobriety would go a long way in discussing this moonshine of the energy world, however. Cellulosic ethanol--which is derived from plants like switchgrass--will require a big technological breakthrough to have any impact on the fuel supply. That leaves corn- and sugar-based ethanol, which have been around long enough to understand their significant limitations. What we have here is a classic political stampede rooted more in hope and self-interest than science or logic.
Posted by James Zellmer at 6:49 AM

The Sarajevo Moment

The Economist:
A PROPOS the Sarajevo moment, which might bring to an end this latest of age of globalisation.

It wouldn't be a political killing, I imagine, since there is no one figure whose death at the hands of a deranged assassin would turn the great powers against one another. But a terrorist strike against a cluster of essential Saudi oil installations might have the necessary economic and geopolitical repercussions.

Whatever the Sarajevo moment might be, everyone seems to be talking about it. As if we know in our hearts that these asset prices are too good.
Posted by James Zellmer at 6:47 AM

January 18, 2007

The Utility of Asking Questions

Ed Wallace finds some answers:
It seems to me that we might actually be standing at a crossroads of history, and 50 years from now historians will either be writing about the genius of our current plans or bemoaning our utter foolishness. But one thing is for sure. Hoping that things calm down in Iraq, wondering if they are going to get that oil law on the books and praying that the government holds and favors Western oil firms does not sound like a realistic energy policy for the United States.

Everything could go right for us; and the Chinese and Russians could still get back their Iraqi oil contracts, which were abrogated after we invaded that country.

Or we can develop a new energy policy for America. Raise the fuel efficiency standards for automobiles (mid to long-term positive results). Slow down the traffic on our Interstates (immediate impact on the amount of oil we use). Quit using so much oil for fertilizers and plastics and so trim all the waste those industries produce. Tune up our vehicles to maximize fuel economy. And determine whether General Motors’ series hybrid electric is credible, and figure the odds of Detroit’s inventing the lithium-ion batteries that would make the Chevrolet Volt feasible. The subsequent fall in the price of oil would deprive many who detest us of the funding their anti-American plans would require.

If GM’s 150-mpg Chevrolet Volt were coming to market this spring, would that breakthrough stop the 21,500 troops headed for Iraq? Probably not. But it would stop 500,000 American troops from heading to the Middle East a decade from now.
Posted by James Zellmer at 2:15 PM

January 9, 2007

Energy Market Tea Leaves

Barry Ritholtz:
BP readers correctly pointed out to the change in the Goldman Sachs Commodity Index (GSCI) (Here, here and of course, here). Tim Iacono did a nice job on the details the following month.

That mid-year halving of the gasoline weighting caught quite a few people by surprise. The timing -- slashing energy futures weightings 2 months before the mid-term elections -- was stunning to say the least. The GSCI changes had wide ranging impacts, leading (indirectly at the very least) to: Amaranth's implosion, a drop in CPI / inflation rates, the market rally since the July lows, and of course, GS's record setting Q3/Q4 profits (Hey, its nice to be the House).
Posted by James Zellmer at 8:49 AM

November 27, 2006

Tyson's Renewable Energy

Brad Feld:
"Tyson Foods, the world's largest chicken producer and meat processing company, blamed high corn prices last week for its third consecutive quarterly loss. It said that the recent excitement over corn-based ethanol fuel sent the price of that grain soaring, raising feed costs and compounding the effect of a meat glut that depressed prices. "This is either corn for feed for corn for fuel," Rich L. Bond, president and chief executive, lamented in a statement. Well, if fuels are where the money is, Tyson will be there too. As Mr. Bond was releasing the disappointing results, Jeff Webster of the corporate strategy department was announcing a brand new venture: Tyson Renewable Energy. Its first task? Turning some of what the company described as its "vast supply of animal fat" - 2.3 billion pounds a year, Mr. Webster reckons - into a diesel-like biofuel."
Posted by James Zellmer at 8:29 AM

November 16, 2006

Investing in Clean Energy

The Economist:
Investors are falling over themselves to finance start-ups in clean technology, especially in energy. Venture Business Research reckons that investment in the field by venture capitalists and private-equity firms has quadrupled in the past two years, from some $500m in 2004 to almost $2 billion so far this year. The share of venture capital going into clean energy is rising rapidly (see chart 1). New Energy Finance, another research firm, reckons that investment of all sorts in the business will reach $63 billion this year, compared with just $30 billion in 2004. The lure of big money is leading investment banks to ramp up their analysis of the latest boom industry.
Posted by James Zellmer at 2:50 PM

November 15, 2006

Peak Oil Theory – “World Running Out of Oil Soon” – Is Faulty; Could Distort Policy & Energy Debate

Cambridge Energy Research Associates:
In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.

“The global resource base of conventional and unconventional oils, including historical production of 1.08 trillion barrels and yet-to-be-produced resources, is 4.82 trillion barrels and likely to grow,” CERA Director of Oil Industry Activity Peter M. Jackson writes in Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources. The CERA projection is based on the firm’s analysis of fields currently in production and those yet-to-be produced or discovered.

“The ‘peak oil’ theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues,” Jackson observes. “Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges with delivering liquid fuels to meet the needs of growing economies. This is a very important debate, and as such it deserves a rational and measured discourse.”
Posted by James Zellmer at 10:31 PM

November 2, 2006

Draining Canada First

Petroleum and Natural Gas Watch
Michael Vickerman, RENEW Wisconsin
Vol. 5, Number 8
November 2, 2006

Sating America’s prodigious energy appetite depends on the continued availability of Canadian energy sources. About 25% of the crude oil and 80% of the natural gas imported into the United States come from our very accommodating neighbor to the north. More than half of the fuel pumped out of Canadian wells heads south to keep us Yankees warm and happily tooling about on our highways.

Even though the Canadian economy is no less dependent on hydrocarbon energy than ours, Canada has been drilling as many wells as necessary to keep the high-maintenance American economy humming. If this pedal-to-the-metal production policy were applied to a non-strategic product like, say, maple syrup, few people would care about the consequences. But there is nothing on the horizon to replace the nonrenewable high-density energy sources that Canada so generously sends our way.

This begs the question: how long can Canada go on behaving like America’s most compliant energy colony?

Not very long, according to David Hughes, a petroleum geologist with the Geological Survey of Canada. Speaking before the World Peak Oil Conference held in Boston last week, Hughes painted a remarkably pessimistic picture of Canada’s energy future, especially regarding natural gas.

Despite record drilling activity, natural gas extraction volumes have slipped from the peak set in 2002, and output per well is now declining at an annual rate of 28%. Put another way, energy companies must add 3,000 more wells in 2007 on top of the 15,000 now in production just to keep output from diminishing.

That would be a daunting challenge even if there were spare rigs and drilling crews standing by. As it now stands, there is no spare capacity of this sort anywhere in North America.

With only eight years of proven reserves left in Canada, Hughes suspects that natural gas output is about to fall off a cliff. Barring a miracle or two, Canada will soon experience challenges in providing for its own citizens, let alone producing surplus volumes bound for American furnaces.

A potentially wrenching resource conflict is now brewing on our continent, thanks to the North American Free Trade Agreement (NAFTA), under which Canada effectively gave up sovereignty over its fossil energy inheritance. As a signatory, Canada is prohibited from cutting back energy exports, even in the event of a domestic supply crunch. But how long would Canada honor its obligations under NAFTA if doing so resulted in its citizens freezing to death? American policymakers would be wise to explore how that scenario might play out.

If that weren’t enough, natural gas is also the key to expanding the production of oil from the tar sands of northern Alberta, the only oil-producing region left in North America that can increase output. The natural gas is the only available fuel for producing the pressurized steam needed to separate bitumen, a low-grade oil, from sand. Shrinking natural gas supplies would quickly reduce the flow of bitumen into the U.S., further complicating Canada’s energy dilemma.

The irony of sacrificing a premium energy source to make more low-grade fuel for export was not lost on Hughes, who closed with a quote from a Canadian energy executive. “Using natural gas to produce oil from tar sands is akin to turning gold into lead.”

Vickerman is executive director of RENEW Wisconsin, a nonprofit organization promoting conservation and renewable energy sources.


Energy Information Agency, October 2006 Monthly Energy Review.

Hughes, David: "North American Natural Gas Production Trend and Implications for Canadian Tar Sands Production,” 2006 Boston World Oil Conference, Boston University, October 2006, at ASPO-USA.

Petroleum and Natural Gas Watch is a RENEW Wisconsin initiative tracking the supply demand equation for these fossil fuels, and analyzing its effects on prices,
consumption levels, and the development of energy conservation strategies and renewable energy alternatives. For more information on the global and national petroleum and natural gas supply picture, visit "The End of Cheap Oil" section in RENEW Wisconsin's web site: www.renewwisconsin.org. These commentaries also posted on RENEW’s blog
and Madison Peak Oil Group’s blog.

Posted by Ed Blume at 4:13 PM

October 27, 2006

SAIC'S Robert Hirsch on Peak Oil

Defense & The National Interest:
10/24/06 Peaking of world oil production, an update by Robert Hirsch, Senior Energy Advisor, SAIC:
Posted by James Zellmer at 9:09 PM

October 17, 2006

Sustainability workshop, Akumal, Mex, Nov. 6 -12

Centro Ecológico Akumal (CEA) will offer a sustainability workshop, November 6 – 12, in Akumal, Mexico.

I began volunteering for CEA in 2000, and Akumal is as close to paradise as I’ve ever experienced. Located 60 miles south of Cancun, the shallow, crystal-clear water and sandy beach of Akumal Bay define tropical perfection. Shops for renting snorkel and dive gear are right on the beach. The small, but stunning, Tulum ruins hug the sea 10 minutes south of Akumal, and the jungles hide many, many small sites that you can visit on your own or with a guide. Additionally, local guides can lead exceptional nature walks, and CEA staff give entertaining and educational presentations nightly.

The course will cover alternative technologies for the production of energy, the treatment of wastewater, and the disposal of solid waste. The course will be taught in Spanish, though nearly all of the instructors and students will be bilingual. See more details at http://www.ceakumal.org/sustainability_workshop.html.

Contact Ed Blume (ed@ceakumal.org) for more details on Akumal and tips on how to get there as cheaply as possible.

Posted by Ed Blume at 10:28 AM

October 12, 2006

Energy Robin Hood to speak Oct. 18, Pyle Center

Randy Udall sees himself as a modern-day Robin Hood of sorts, taking from the rich and giving to the poor. Udall heads the Community Office for Resource Efficiency in Aspen, Colorado, which oversees the world's stiffest tax on energy use. The tax, called "REMP" or Renewable Energy Mitigation Program, requires owners of new homes larger than 5,000 square feet to pay fees of up to $100,000 for excess energy use. -- The Osgood File, July 31, 2003
Randy Udall, whose father (Morris) and uncle (Stewart) were conservation giants, will discuss America’s energy challenges at 7:00 p.m. on October 18, 2006, at the Pyle Center, 702 Langdon Street, Madison.

Udall also write prolifically and insightfully on energy issues and the coming end of cheap oil. His articles include: Stud Muffins and Kilowatt-hours; When will the Joy Ride End?; Methane Madness; Cleopatra to Columbia.

He will also speak at 8:30 a.m. on the same day at the Monona Terrace during the Sustainability Energy Efficiency conference of the Wisconsin Green Building Alliance.

Sponsored by Madison Peak Oil Group, RENEW Wisconsin, Gaylord Nelson Institute for Environmental Studies, and Wisconsin Green Building Alliance.

Community Office for Resource Efficiency – www.aspencore.org
Madison Peak Oil Group – www.madisonpeakoil-blog.blogspot.com
RENEW Wisconsin – www.renewwisconsin.org
Gaylord Nelson Institute - www.ies.wisc.edu
Wisconsin Green Building Alliance – www.wgba.org

Posted by Ed Blume at 11:05 AM

September 25, 2006

How Useful Are Oil Projections?

Edward Tufte:
n 1974 the Federal Energy Administration asked 4 statisticians to provide independent estimates of the amount of oil still underground. The four groups worked completely independently; I found out the names of the other three groups long after the reports were filed. The results, as I recall, were one very low forecast, one very high forecast, and two skeptical reports (including mine) in effect saying the error bound around the forecasts covered all reasonable policy alternatives. Thus the collective result confirmed the views of the two skeptical reports!

Here is my analysis. Perhaps this should have appeared as a short case study in Beautiful Evidence, but the idea never occurred to me.

What about now, 31 years later? My skepticism about resource forecasts might be confirmed or might not by a fresh analysis, which would reveal what a fresh analysis of the evidence would reveal. In policy relevant studies of evidence, there is too often a rage to conclude.
Posted by James Zellmer at 10:15 PM

September 6, 2006

Ethanol, Ethanol Everywhere, Time to Stop and Think

Elon Musk:
Ethanol (a.k.a. alcohol) will certainly grow as a business and serve as a partial solution to our energy problem, particularly given that it is now taking the place of the gasoline additive MTBE. However, even if large-scale cellulosic ethanol technology is perfected, I don’t believe it can become the primary solution to the world’s energy needs.

The often-used example of Brazil does not apply to most parts of the world and may not even apply to Brazil if they see high economic growth with its attendant energy demands. Brazil is in the tropics with an all year round growing season and an enormous amount of arable land relative to its population food requirements and the number of cars on the road.

In contrast, domestic ethanol as the primary solution will definitely not work for the world’s most populous countries, such as Japan, China, India, Pakistan, Indonesia, etc. Those countries are either breaking even on domestic food production or are net importers. If you argue that ethanol is to be grown elsewhere and shipped, where are the vast tracts of unused arable land? And, bear in mind, the calories burned by two ton cars are much greater than those burned by 170 pound humans.
Posted by James Zellmer at 7:53 PM

September 4, 2006

World's Largest Oil Field in.... Colorado

Robert Collier:
Underneath the high, scrub-covered rangeland of northwest Colorado is the world's biggest oil field. Getting the oil out of the ground, however, is one of the world's biggest headaches.

The area's deposits of oil shale are believed to be larger than all the oil reserves of the Middle East. But past attempts to get at this oil locked in tarry rock have cost billions of dollars and raised the prospect of strip-mining large areas of the Rocky Mountain West.

Now, as the federal government makes another push to develop oil shale, Shell and other companies say they have developed techniques that may extract this treasure with much less environmental impact.
What goes around, comes around. The Western Slope oil shale project collapsed in the mid 1980's - creating a deep Colorado recession.
Posted by James Zellmer at 3:43 PM

August 30, 2006

Oil Prices this Fall

Ed Wallace:
“[R]umors inside the industry suggest that Iran is being forced to charter 20 huge oil tankers to hold 40 million barrels of its crude; apparently, Iran has run out of space to store all the oil it has pumped but not yet sold.”
Posted by James Zellmer at 7:50 PM

August 24, 2006

Electric Cars & Monterey

Martin Eberhard:
We were originally invited to participate in the McCall Motorsports Customer Appreciation Night at the Monterey Airport on Wednesday. But at the last minute a large Japanese luxury automaker, who happened to be a sponsor of the event, had a hissy fit about our being there. So we were disinvited. How can they be scared of little Tesla Motors? Oh well. We made the best of the day giving rides to press and prospective customers.
Posted by James Zellmer at 9:21 PM

August 8, 2006

The Politics of High Fructose Corn Syrup and Does it Make You Fat?

Alex Tabarrok:
I don't know whether High Fructose Corn Syrup (HFCS) acts more like fat than does sugar (compare here and here) but it's worthwhile pointing out that HFCS is a child of the sugar quota. The import quotas raise the US price of sugar well above the world price (~24 cents per pound compared to ~9 cents per pound) and encourage consumption of HFCS. Reflecting this fact, the main defenders of the sugar quota are no longer Florida sugar growers but rather mid-West corn growers.
The HFCS business is a cartel - prices are the same, change quarterly on the same day and enjoy, as Tabarrok points out, subsidies. Years ago, working in the water and juice industry, I sent a letter to the anti-trust division complaining about this. A lawyer deep in the bowels of the justice department phoned me and said that "as long as Bob Dole is active on this issue, nothing will change". I assume someone has replaced Dole as a friend to the corn processors.
Posted by James Zellmer at 8:47 AM

The Case for Geothermal

Malcolm Gladwell:
Geothermal heating and cooling is based on one simple fact: that 6 feet down in the ground the temperature is the same—between 50˚F and 60˚F- the whole year round. This means that it is relatively cool in the summer, and relatively warm in the winter. Geothermal heating is thus quite different from solar heating: solar heating works worst when you most need it--in the cold, cloudy, snowy conditions of winter; the source for geothermal heating and cooling is not affected by the weather.

For geothermal cooling, all one needs to do is to circulate water in a pipe through the ground to cool it, and use this cool water to cool the air pumped through the house in the heating ducts.
Posted by James Zellmer at 8:41 AM

July 10, 2006

Honda Plans Turbodiesel for US

Kathy Jackson:
John Watts, manager of Honda's U.S. product planning, said Honda plans to introduce a clean-burning, 2.2-liter turbodiesel in the United States within three years.

"That 2.2 could probably crank out about 200 horsepower and about 220 (pounds-feet of) torque at little rpm," he said at a press event here. "Vehicles like the Pilot (SUV) and Odyssey (minivan) are too big for a four-cylinder."
Posted by James Zellmer at 3:38 PM

July 4, 2006

Manure Power

Claudia Deutsch:
In fact, more utilities are thinking of buying the gas outright. Pacific Gas and Electric has agreed to transport gas from a big digester that Microgy, a digester manufacturer, is building in California. Right now Microgy plans to sell the gas on the open market, but Robert Howard, vice president for gas transmission and distribution, said P.G.& E. may buy some gas itself. "This technology provides pipeline-quality gas and reduces carbon emissions, so of course we're in favor it," he said.

The environmental boons are many. According to Agstar, digesters are already keeping 66,000 tons of methane from escaping each year into the atmosphere, while generating enough energy to power more than 20,000 homes.

And technologies, some of which have been around for decades, have finally grown more reliable. "There's been a lot of time and energy spent on making these as effective and efficient as possible, so anaerobic digestion will be a growing business," said Daniel J. Mannes, vice president of Avondale Partners, a securities research firm that recently initiated coverage of the Environmental Power Corporation, the company in Portsmouth, N.H., that owns Microgy.
Posted by James Zellmer at 10:12 AM

May 27, 2006

Least Fuel Efficient Luxury Cars - 2006

Dan Lienert:
From a million-dollar Bugatti to a tiny Mercedes roadster, the market's most wasteful high-end buys.
Posted by James Zellmer at 8:25 AM

May 19, 2006

Honda Civic GX: A Real, Available Car, Powered by Natural Gas

Speaking of Honda:
Recognized by the Environmental Protection Agency (EPA) as the cleanest internal-combustion vehicle on Earth, the Civic GX is perfect for getting around town and running everyday errands. In fact, the California Air Resources Board gave the GX an AT-PZEV emissions rating, which means it's still the "Cleanest on Earth." And it's been completely redesigned for 2006 with a new modern, aerodynamic exterior, and ergonomic, supportive seats. The GX has everything you'd expect from a Civic, like a roomy cabin and proven performance. And because it uses compressed natural gas, the GX achieves remarkable fuel-cost savings, and helps decrease the world's dependence on oil. The Civic GX promises to lead the way to the advancement of fuel-cell vehicles, sooner than you might expect.
via autoextremist:The Civic GX, which is rated at an EPA estimated city/highway fuel economy of 28/39 miles per gasoline-gallon equivalent, is the only dedicated natural gas-powered passenger vehicle available to retail customers in the United States. 2006 Civic GX owners will be eligible for a Federal tax credit of $4,000 for the car and up to $1,000 for the purchase and installation of "Phill," the natural gas home refueling appliance from FuelMaker Corporation. More on Phill, via email:
The price of Phill is $3400 US plus shipping ($150) plus installation. An indoor installation will also need a mandatory external gas sensor for $120. A "typical" installation can range from $1000 to $1500. Your actual cost of Phill could be reduced depending on where you live, and what incentives are offered in your area. Please note that at the moment Phill is only available for purchase if you live in California, Arizona, Maryland, Washington D.C., New Jersey, Oklahoma, Nevada, parts of New York, and a select few other cities such as Salt Lake City (UT), Milwaukee (WI), Dallas (TX), Denver (CO), Chicago (IL), and Knoxville (TN). To continue with the purchase process we will need some basic information from you in order to put your name on the waiting list. If you are interested, please contact Phill Customer Service at 1-866-697-4455 (toll free), or let us know the best way to reach you.
Posted by James Zellmer at 6:24 AM

May 14, 2006

Khosla on Biofuels

Vinod Khosla video presentation on biofuels.
Posted by James Zellmer at 8:58 AM

May 6, 2006

Economic Impacts of Liquid Fuel Mitigation

Roger Bezdek & Robert Wendling:
Our objective was to better elucidate the implications of the mitigation programs, e.g., the time required to save and produce significant quantities of liquid fuel, related costs, and economic, fiscal, and jobs impacts. We studied crash program implementation of all options simultaneously because the results provide an upper limit on what might be accomplished under the best of circumstances. No one knows if and when such a program might be undertaken, so our calculations were based on an unspecified starting date, designated as t0
Posted by James Zellmer at 5:01 PM

April 28, 2006

Reckoning on the "Right"

Ed Wallace:
Worse, ethanol is not being sold to us because it will make America energy independent. It is being forced on the nation, even with all the problems that have already become apparent, because the party in power is locking in the lobbyist monies and farm state votes. And that’s not just my opinion; it’s also the opinion of David G. Victor, director of the Program on Energy and Sustainable Development at Stanford and an adjunct senior fellow of the Council on Foreign Relations, as published in the Houston Chronicle on April 15 of this year.

In fact, the corruption of our legislative body is so pervasive that, when Reuters Business discussed how we could immediately get more ethanol just by dropping the 54-cents-per-gallon import tax on Brazil’s ethanol, the person quoted as saying that “Congress has a backlog of important bills” and “won’t have time in this legislative year to deal with controversial legislation” (such as reducing tariffs on ethanol from Brazil), was nobody we elected. No, it was Jon Doggett, vice president of the National Corn Growers Association. Now tell me: Who is really calling the shots?
Posted by James Zellmer at 9:45 PM

April 24, 2006


Bob Gritzinger:
E85 is the designation for a fuel that combines 85 percent ethanol with 15 percent gasoline. E85-compatible—or flex-fuel—vehicles can run on E85 or regular unleaded gasoline. Because the alcohol in E85 can break down rubbers and plastics used in typical internal-combustion engine fuel systems, vehicles must be specially modified to allow its use. And to obtain maximum power from higher-octane E85, engines must be tuned to run on it, or be able to adjust timing and the air-to-fuel ratio when running on E85.

Supporters say the alternative fuel is environmentally friendly, reduces dependence on fossil fuels and imported oil, and takes advantage of America’s surplus of agricultural crops, like corn, that can be readily converted to ethanol for use in E85.

Critics note insufficient ethanol production facilities exist to significantly offset the nation’s appetite for fuel, that refineries aren’t adapted to producing E85, and that E85 is harder to transport because its corrosiveness means it cannot flow through existing gasoline pipelines. In addition, in most states E85 costs about the same as unleaded regular while costing the driver up to 15 percent in fuel-economy penalties because it does not pack the same explosive punch as gasoline.
Posted by James Zellmer at 8:31 AM

April 23, 2006

Cleaning Up Lawn Mower Emissions - Briggs & Stratton

Felicity Barringer:
Gallon for gallon — or, given the size of lawnmower tanks, quart for quart — the 2006 lawn mower engines contribute 93 times more smog-forming emissions than 2006 cars, according to the California Air Resources Board. In California, lawn mowers provided more than 2 percent of the smog-forming pollution from all engines.

But as soon as air pollution regulators suggested adding a golf-ball-size catalytic converter to the lawn mower, they found themselves in one of their fiercest political battles of the past decade.

On one side, the federal Environmental Protection Agency and state regulators in California. On the other, the largest lawn and garden equipment maker in the country and a powerful Republican senator. And in the middle, the six million or so lawn mowers shipped to retailers every year.

For older regulators, it is a replay of Detroit's initial resistance to those who wanted clean up car exhaust by installing catalytic converters, which pull smog-forming chemicals and carbon monoxide out of the exhaust.

"I think it's very analogous to what happened in the 70's," said Robert Cross, chief of the California air agency's Mobile Source Control Division. "The arguments are all the same."
Posted by James Zellmer at 10:42 PM

April 20, 2006

Oil Price History

35 Years of crude prices, via the Wall Street Journal and Barry Ritholtz.
Posted by James Zellmer at 8:30 PM

March 30, 2006

Fill Your Tank With Vegetable Oil

Jim Washburn:
One day last year, my musician friend Jonathan drove up in a Mercedes. This was odd, since Jonathan is so resolutely counterculture that he once tried recording an album in the woods, without electricity.

His car's exhaust smelled faintly of french fries, and therein lay the explanation: The new Jonathan Richman tour vehicle -- an '84 300D Turbo -- was running on vegetable oil-derived biodiesel fuel as he and his drummer crisscrossed the nation in it, a deep fryer on wheels.

I was intrigued: Biodiesel comes from renewable resources. It's made from soybeans, corn or other oil crops, saving America's farmers. Or it comes from recycled kitchen grease, saving America's sewers. It pollutes remarkably less than petroleum fuel, and could potentially make the U.S. energy self-sufficient, freed from bargaining with dictators and terror-sponsor states.
Posted by James Zellmer at 11:43 AM

March 26, 2006

Investing in Ethanol

Norm Alster:
The current excitement over ethanol derives from research that has cut the cost of converting nonfood plant matter like grasses and wood chips into alcohol. Mr. Khosla says he believes that such ethanol, called cellulosic ethanol, will eventually be cheaper to produce than both gasoline and corn-derived ethanol.

Can investors whose pockets are not as deep jump into the ethanol market? Yes, but they are taking a big risk. Picking long-term winners among the companies that make ethanol — or, for that matter, develop other alternative energy technologies — is a very uncertain business. The few public companies that focus on ethanol are typically unprofitable. Pacific Ethanol, for example, has not yet had a profitable quarter and will not until at least the fourth quarter, when its first plant is scheduled to begin production, Mr. Langley said.
Interesting photo, new Janesville assembled Chevy Tahoe SUV with Vinod - a prominent Silicon Valley VC.
Posted by James Zellmer at 9:53 PM

March 19, 2006

Grow Your Own Oil, US

Sean Captain:
Researchers hoping to ease America's oil addiction are turning sawdust and wood chips into bio-oil, a thick black liquid that could become a green substitute for many petroleum products.

Bio-oil can be made from almost any organic material, including agricultural and forest waste like corn stalks and scraps of bark. Converting the raw biomass into bio-oil yields a product that is easy to transport and can be processed into higher-value fuels and chemicals.

"It is technically feasible to use biomass for the production of all the materials that we currently produce from petroleum," said professor Robert C. Brown, director of the Office of Biorenewables Programs at Iowa State University.
Posted by James Zellmer at 9:26 PM

March 3, 2006

A Magic Way to Make Billions

Donald Barlett and James B. Steele:
The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.

With Washington reeling from the Abramoff lobbying scandal and Republicans and Democrats alike pledging to crack down on influence peddling, with one lawmaker already gone from Capitol Hill because he traded favors for cash, you're probably guessing this isn't the best time for members of Congress to dispense a fortune in favors to their friends.

Guess again.
Posted by James Zellmer at 5:21 PM

February 28, 2006

Peak Oil?

Robert Hirsch:
Peak oil is real, but there are strategies available to mitigate its effect, IF we start in time. Dr. Hirsch is the Senior Energy Program Advisor for SAIC and past chairman of the Board on Energy and Environmental Systems at the National Academies.
Posted by James Zellmer at 7:32 PM

Do Americans Support a Gas Tax?

Barry Ritholtz:
"A significant number would go along with an increase if it reduced global warming or made the United States less dependent on foreign oil, according to the latest New York Times/CBS News poll.

The nationwide telephone poll, conducted Wednesday through Sunday, suggested that a gasoline tax increase that brought measurable results would be acceptable to a majority of Americans.

Neither the Bush administration nor Democratic Party leaders make that distinction. Both are opposed to increasing the gasoline tax as a means of discouraging consumption, although President Bush, in recent speeches, has called for the development of alternative energy to reduce dependence on foreign oil."
Posted by James Zellmer at 7:04 AM

February 21, 2006

BMW's Turbo Steam Fuel Saving Concept

Deutsche Presse-Agentur:
MW engineers are working on a steam-powered auxiliary drive system that reduces fuel consumption by up to 15 per cent and boosts performance at the same time, the car maker said.

The 'Turbosteamer' concept applied to a 1.8 litre, four-cylinder petrol engine recycles the waste heat in the exhaust gases and cooling system.

In tests, the Turbosteamer produced 13 additional hp in performance with 80 per cent of the energy in the exhaust gases recycled, according to the manufacturer.
Posted by James Zellmer at 10:18 PM

February 18, 2006

The Energy Outlook Changes

Ed Wallace:
Posted by James Zellmer at 3:28 PM

February 15, 2006

Is Energy's Future Sustainable?

Michael Simmons:
In his Harvard Lecture, Simmons explores the ramifications of peak energy (not just oil). The potential for world conflict is there, but it doesn't have to be inevitable. (5 MB PDF - republished with permission)
Posted by James Zellmer at 9:12 AM

January 26, 2006

Ethanol Study

All Things Considered:
About one out of every 40 cars and trucks in the United States can now run on a commercial mix of gasoline and ethanol, mostly made from corn. And the federal government is backing the renewable fuel industry. But does ethanol really reduce dependence on fossil fuels?
Posted by James Zellmer at 10:29 PM

January 16, 2006

"The Origins of the Great War of 2007"

Niall Ferguson:
With every passing year after the turn of the century, the instability of the Gulf region grew. By the beginning of 2006, nearly all the combustible ingredients for a conflict - far bigger in its scale and scope than the wars of 1991 or 2003 - were in place.

The first underlying cause of the war was the increase in the region's relative importance as a source of petroleum. On the one hand, the rest of the world's oil reserves were being rapidly exhausted. On the other, the breakneck growth of the Asian economies had caused a huge surge in global demand for energy. It is hard to believe today, but for most of the 1990s the price of oil had averaged less than $20 a barrel.
Sort of a bolt of lightning as I've been reading Shirer's the Rise and Fall of the Third Reich. I'm now entering 1939 in this amazing 1960 work. The look back with respect to opportunities missed is simply astonishing. I hope Ferguson is dead wrong, but one can see the seeds of war...
Posted by James Zellmer at 11:30 AM

December 6, 2005

State's First BioDiesel Plant Underway


Ground was broken Monday morning on Wisconsin's first biodiesel plant, a new facility that could dramatically boost demand for state soybeans.

Biodiesel is an alternative fuel that can be made from vegetable oils or recycled cooking oil.
Green Bay-based Anamax Corp. is starting construction on the $15-million plant next to its existing restaurant-grease recovery plant in DeForest on Monday. The plant will be the largest of its kind in the country, WISC-TV reported.

The 15,000-square-foot plant could be a boon for the state's soybean farmers as more than 85 percent of biodiesel comes from soybeans.

The plant is expected to produce 20 million gallons annually.

The market potential for biodiesel is huge as Americans burn about 50 billion gallons of diesel every year, and almost all of that is currently petroleum-based

Posted by James Zellmer at 12:01 AM

December 3, 2005

Run Your Car on Cow Fuel

Alister Doyle:
A C$14 million factory near Montreal started producing "biodiesel" fuel two weeks ago from the bones, innards and other parts of farm animals such as cattle, pigs or chickens that Canadians do not eat.

"We're using animal waste to reduce greenhouse gas emissions," said marketing director Ron Wardrop of Rothsay, which runs the plant.
Posted by James Zellmer at 12:24 PM

November 27, 2005

Cheaper Veggie Diesel Process

Brian Handwerk:
Any vegetable oil can become fuel, but not until its fatty acids are converted to chemical compounds known as esters. Currently the acids used to convert the fatty acids are prohibitively expensive.

Michikazu Hara, of the Tokyo Institute of Technology in Yokohama, Japan, and his colleagues have used common, inexpensive sugars to form a recyclable solid acid that does the job on the cheap. Their research is reported in last week's issue of the journal Nature.

"We estimate the cost of the catalyst to be one-tenth to one-fiftieth that of conventional catalysts," Hara said.

The breakthrough could provide cost savings on a massive scale, he said, because the technique could fairly easily make the transition from the lab to the refinery—if interest warrants.
Slashdot discussion.
Posted by James Zellmer at 8:05 AM

November 24, 2005

Tankless Hot Water Heaters via Microwave

Pulsar Advanced Technologies will next week launch its lead product, the Vulcanus MK4, a water heater USING microwave technology to heat water on demand.

Powered by electricity and unaffected by the volatile gas markets, the Vulcanus MK4 can heat water from 35 degrees Fahrenheit to 140 degrees Fahrenheit in seconds and can source multiple applications at once: showers, dishwasher, sink usages and more. The Vulcanus MK4 is the size of a stereo speaker with a sleek modern look, making it ideal for condos and apartments, while powerful enough to serve the needs of any size family. via Zawodny

Posted by James Zellmer at 7:10 AM

October 25, 2005

Monroe's Ethanol (E85) for $1.96/Gallon

he price won't stay under a dollar, but even at $1.96 a gallon, drivers will be smiling. Cory said the corn-based fuel gives him fewer miles per gallon, but he figures he's still 4 to 5 cents per gallon ahead with the savings at the pump. He also likes the fact that he's helping local farmers. "I think anything we can do to help our own markets and build up our own economy is a lot better off and this is really clean burning fuel," he said.
Posted by James Zellmer at 6:57 AM

October 21, 2005

Lassee on Ethanol

Wisconsin State Senate President Alan Lassee on AB 15:

I hope to set the record straight that ethanol is a welcome choice for citizens and taxpayers statewide. As the price of gasoline continues to skyrocket, we need to examine the use of alternative fuels and other means to ease our burden every time we fill up our tanks. One of the main reasons I support Assembly Bill 15 is my belief that we need to reduce our dependence on Middle Eastern oil and break the stranglehold of foreign oil sheiks. To me, it is a no-brainer that ethanol, which can be produced in state by the corn grown by our farmers, is a good start to reducing our dependence on foreign oil.
The Renew Energy Blog has another perspective on this.

Posted by James Zellmer at 12:01 AM

October 9, 2005

Fight Rising Home Heating Costs

Morning Edition:

Natural gas prices have more than doubled since last year. Homeowners can expect to see, on average, a 50-percent increase in their bills this winter.

Renee Montagne talks to Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, about what homeowners can do to save on their heating bills.

Posted by James Zellmer at 12:01 AM

October 5, 2005

Getting Oil from Shale a Complex Process

Paul Foy:

Outside Vernal, Utah, officials with Oil-Tech Inc. say they have perfected an older technology of baking oil from shale in a furnace and wants government approval to mine 1,600 acres of state land plus access to 30,000 tons of shale left outside an abandoned mine on federal land.

Posted by James Zellmer at 12:01 AM

October 3, 2005

Oil Shale: Back to the Future

Living in Denver during the mid 1980's, I learned quite a bit about that era's oil shale collapse. Paul Foy takes a look at the growing interest in this potential 1 trillion barrel reserve (4X Saudi Arabia's holdings):

Shell believes it can make its technique economical as long as crude oil stays above $30 a barrel, but it is five years away from proving the technology or deciding whether to build a commercial-scale operation, said Terry O'Connor, a company vice president for external and regulatory affairs.

Outside Vernal, Utah, officials with Oil-Tech Inc. say they have perfected an older technology of baking oil from shale in a furnace and wants government approval to mine 1,600 acres of state land plus access to 30,000 tons of shale left outside an abandoned mine on federal land.

Posted by James Zellmer at 12:06 AM

September 24, 2005

Skysails: Great Shipping Energy Saving Idea

skysails.jpgGreat application of a mix of old an new technologies in a way that makes sense. Kudos to the SkySails folks for bringing this to market. The Economist has more:

But the SkySails approach does away with masts and is much cheaper. The firm says it can outfit a ship with a kite system for between €400,000 and €2.5m, depending on the vessel's size. Stephan Wrage, the boss of SkySails, says fuel savings will recoup these costs in just four or five years, assuming oil prices of $50 a barrel. Jesper Kanstrup, a senior naval architect at Knud E. Hansen, says the idea of pulling a ship with an inexpensive kite—attached to the structurally solid bow like a tugboat—had never occurred to him. “It's a good idea,” he says.
Skysails reveals the essence of any successful (We'll see) idea: economics, application, timing and luck!

Posted by James Zellmer at 11:02 AM

September 22, 2005

Destruction of Domestic Gas & Oil Production

The Eye Between the Storms
by Michael Vickerman, RENEW Wisconsin
Petroleum and Natural Gas Watch, Vol. 4, Number 1
September 21, 2005

On its way toward the Gulf Coast states of Louisiana and Mississippi, Hurricane Katrina cut a swath through a hydrocarbon-rich zone of the Gulf of Mexico, the largest domestic source of petroleum and natural gas. When fully operational, this offshore oil and natural gas complex accounts for about 30% of domestic oil supplies and 20% of domestic natural gas supplies.

Fueled by exceptionally warm waters, this Category 4 storm KO’ed nearly 50 production platforms and four drilling rigs. Extensive damage was reported at 20 platforms and nine drillings rigs. The force of the winds and the waves tore six rigs loose from their moorings and sent them adrift; one rig in Plaquemines Parish was found beached on Alabama’s Dauphin Island. At the storm’s peak, on August 29, more than 90% of the Gulf’s oil extraction capacity and nearly 90% of its natural gas extraction capacity was off-line.

The storm’s devastation extended beyond structures protruding above the water’s surface. Parts of the underwater piping network that collect the raw fuel and carry it to onshore processing facilities need to be rebuilt. Mobilizing all the boats, helicopters, divers, and steel needed to repair this infrastructure will be a monumental undertaking. However, until these pipelines become operational again, many of the undamaged wells will remain idle, with no place to pump the oil to.

Onshore facilities like shipyards and refineries were also hit hard. The Mineral Management Service, which issues daily bulletins tracking Katrina’s impact on the Gulf of Mexico’s hydrocarbon complex, estimates that “35% of shut-in oil is due to onshore infrastructure problems.” The rebuilding effort is bound to be slow and costly, but absolutely necessary as this region is one of the few remaining centers of (real) wealth-production in the nation.

Three weeks have now passed since Katrina landed her roundhouse blows to our energy underbelly, and more than 55% of the region’s oil capacity and about one-third of the natural gas capacity still remain off-line. So far, the reduction in output amounts to about 1.5% of expected U.S. crude oil production this year. Also off-line are four refineries with a combined daily capacity of nearly one million barrels, about 4% of total U.S. refining capacity. Expectations are that these facilities, especially the 400,000 barrel per day Pascagoula unit, are three to six months away from being restarted. In an industry where production volumes lately have averaged between 90 and 95 per cent of capacity, making up a 4% loss shapes up to be an impossible challenge. This is very bad news indeed to a country that was, before Hurricane Katrina, not producing enough gasoline to keep pace with this summer’s driving demands.

In an effort to calm panicky oil markets, the Bush Administration has pledged to tap the Strategic Petroleum Reserve for as much as 30 million barrels of crude oil, an amount the Unites States consumes in 36 hours. Though gasoline prices have fallen 10% from the Labor Day weekend, releasing reserve oil is nothing more than a symbolic gesture when there is no spare capacity available to crack the crude into jet fuel, gasoline and diesel fuel. The nation has no choice but to import greater volumes of gasoline for the duration of this year. Even so, the supply-demand equation looks precarious. Only a nationwide slowdown in driving will keep fuel prices from heading higher. Nothing short of that will suffice.

Katrina’s path took it through the oil-heavy eastern half of the Gulf’s hydrocarbon complex. The natural gas production platforms that populate the western half were spared the flattening winds and 20-foot storm surges visited upon Bay St. Louis and Biloxi. Even so, the accumulated reduction in output so far represents 0.7% of U.S. extraction volumes expected this year. This deceptively puny number spells real trouble for Americans residing in colder climates, for unlike crude oil and its refined products, natural gas cannot be easily shipped across oceans. There are only four operating terminals in the United States where specialized tankers bearing liquefied natural gas (LNG) can offload their contents, and they are operating pretty much at full capacity right now.

Unless natural gas output from the Gulf of Mexico can be revved up to pre-Katrina levels in the next week or two, the likelihood that the United States can scramble its way out of a slow-motion supply squeeze this winter is poor. Earlier this year, several investment banking services that track energy supply-demand trends projected lower output from domestic sources this year. If the monthly production results reported by the Texas Railroad Commission are reliable guides, extraction volumes are already tailing off, compared with previous years’ results. The injection rate of gas into storage for winter use has slowed as well.

When one stops to consider all the factors at play here—a still booming housing sector, more gas-fired power stations on-line (including four new ones in Wisconsin this year), a declining resource base in North America (including Canada and Mexico), and insufficient infrastructure for importing more than 5% of domestic consumption through 2008—it’s not difficult to imagine natural gas prices, now at $12/MMBtu, to ratchet up towards the $20/MMBtu level this winter. And to think that only six months ago one could have bought a January 2006 gas contract for under $7/MMBtu.

The prospects for a rapid recovery became dimmer when a storm named Rita crossed the Florida Keys heading west toward Texas. The abnormally warm waters on which Katrina fed can easily transform Rita into a tempest of similar intensity. For the moment the very best outcome one can expect from Rita’s menacing presence in the gulf is a production interruption that lasts five to seven days followed by a full resumption of extraction activity. But if it strengthens as Katrina did, it is likely to cause even greater damage than Katrina wrought, due to its more westerly track. Texas and its coastal waters, it should be remembered, account for fully one-third of domestic natural gas output. Another hit to Gulf of Mexico hydrocarbon complex and natural gas futures will warp out of orbit.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Even more amazing than the destructive capacity of these hurricanes is the degree to which we as a nation are totally unprepared for dealing with their aftermath. The default assumption among policymakers is that the U.S. economy will grow in an uninterrupted fashion, and that high quality energy sources will magically appear in time to sustain this expansion. But how can this outcome be guaranteed when the U.S. government cannot control either the actions of foreign countries or the weather? In fact, the country does not appear able to exercise even the slightest hint of discipline or restraint over its own appetite for energy. As the nation’s energy infrastructure contracted relative to the domestic economy, the federal government’s ability to shape our energy future atrophied along with it. All of the planning functions that a healthy government is typically responsible for have been ceded to the marketplace. And the marketplace has one very powerful mechanism for allocating scarce but essential resources to a society’s constituents. It’s called price.

Author’s note: Given Hurricane Rita’s potential to add to the devastation caused by Katrina, I plan to update this article in one to two weeks.


Center for Energy Efficiency and Resource Efficiency (CEERT), Risky Diet 2005: Global Energy Resource Adequacy.

Minerals Management Service (U.S. Department of the Interior. See MMS web site also for daily shut-in statistics reports.

Simmons and Company: Outlook for Natural Gas: 2005 and Beyond

Texas Monthly Oil and Gas Production by Year,” Texas Railroad Commission

The Oil Drum: A Community Discussion About Peak Oil. Numerous postings on the web site from August 29 – September 21, 2005.

Petroleum and Natural Gas Watch is a RENEW Wisconsin initiative tracking the supply demand equation for these fossil fuels, and analyzing its effects on prices, consumption levels, and the development of energy conservation strategies and renewable energy alternatives. For more information on the global and national petroleum and natural gas supply picture, visit "The End of Cheap Oil" section in RENEW Wisconsin's web site.

Posted by Ed Blume at 9:34 AM

September 15, 2005

Wisconsin's Energy Future: A Progress Report

The Customers First! Coalition hosts its third annual energy conference on Monday, October 17th, 2005, at American Family Insurance headquaters in Madison to explore:

- The role that high voltage transmission lines could play in the cost of electricity in Wisconsin;

- The growth of wind energy;

- The the new federal energy policy act of 2005.

This year’s conference will include notable speakers such as James Togerson, President and CEO of Midwest ISO, Rob Gramlich of the American Wind Energy Association, Deborah Sliz of the Transmission Access Policy Study group (TAPS), and Mark Williamson of American Transmission Company. Discussion panels comprised of representatives of utilities, regulatory agencies, the Wisconsin Legislature and public interest organizations will react to the conference presentations and share their views.

Posted by Ed Blume at 8:39 AM

September 3, 2005

Yergin on the Coming Energy Crisis

Daniel Yergin, Author of the excellent: The Prize on the coming energy crisis:

Man's technical ingenuity has collided with nature's rage in the Gulf of Mexico, and the outcome has been an integrated energy disaster. The full scope will not be understood until the waters recede, the damage to platforms and refineries is assessed, and the extent of damage to underwater pipelines from undersea mudslides is determined. Yet what has happened is on a scale not seen before, and the impact of the price spikes and dislocations will roll across the entire economy. Even as we confront the human tragedy, the consequences will also force us to think more expansively about energy security, and to focus harder on a matter which other events have already emphasized: The need for new infrastructure and investment in our energy sector.

Posted by James Zellmer at 12:05 AM

September 1, 2005

Newest & very scary report on Gulf of Mexico oil production

Theoildrum.com carries a post on hurrricane damage to oil production facilities in the Gulf of Mexico:

There are MANY production platforms missing (as in not visible from the air). This means they have been totally lost. I am talking about 10's of platforms, not single digit numbers. Each platform can have from 4 to 100+ wells on it. . . .

We are looking at YEARS to return to the production levels we had prior to the storm. The eastern Gulf of Mexico is primarily oil production...

YEARS, people. I know what this means - hope everyone else gets it too...

Click here to read the full post.

Posted by Ed Blume at 12:14 PM

August 29, 2005

The Oil Drum: Katrina Introduces Peak Oil to a Nation

The Oil Drum:
Katrina IS a big deal today and will be for weeks to come, not just because New Orleans is below sea level and not just because she could cause massive loss of life and property, but because Katrina could also disrupt Gulf supplies of petroleum (the GOM supplies around 1.3mbpd, we use around 20mbpd in the US) from rigs, refineries, and pipelines, etc., for a while.
Great Site, via John Robb.
Posted by James Zellmer at 9:52 AM

August 27, 2005

Bets on Oil Prices

Tyler Cowen summarizes a number of bets on energy prices. Cowen is buying an economy car next time around. T. Boon Pickens recently said that we'd see $70/barrel before $50.

Posted by James Zellmer at 12:01 AM

August 25, 2005

BioBelt Could Be Wisconsin’s Future

BioBelt Could Be Wisconsin’s Future

By converting its energy-rich organic wastes into heat and electricity, Wisconsin could become the capital of the Midwestern BioBelt. That is the assessment of bioenergy experts who are planning the Renewable Energy from Organics Recycling conference at the Madison Marriott West from September 12 through September 14.

“Blessing is not a term we usually apply to waste. However, in this case, Wisconsin is indeed blessed with the raw materials necessary to become a major producer of power from organics,” according to Larry Krom, one of the scheduled speakers and a bioenergy program manager for Focus on Energy, a conference sponsor.

To open the conference, Wisconsin Ag Secretary Rod Nilsestuen will present a green and growing agricultural vision for renewable energy in Midwest states.

The conference will detail emerging technologies that can produce electricity and fuels from manure, cheese whey, landfill gas, wood waste, and other organic materials.

“People at the conference will find the latest information to help them get projects up and running successfully,” said Don Wichert, Renewable Energy Program Director of Focus on Energy, the state’s program for technical and financial assistance for energy efficiency and renewables.

“The conference will highlight speakers who are actively building the industry,” he added, “as well as building projects in Wisconsin.”

The conference will cover production of electricity from methane on dairy farms, wood and crop waste conversion for heat and power, cofiring power plants with switch grass, ethanol and biodiesel production, and gas recovery from landfills.
Wednesday, September 14, features tours to a dairy with a German-designed anaerobic digester, a start-up ethanol plant, and a landfill biogas-to-electricity installation.

“Financing will be the key to unlocking the power in organic wastes. One conference session will delve into sources and the mechanics of financing bioenergy projects,” stated Michael Vickerman, executive director of RENEW Wisconsin, a statewide nonprofit that promotes sustainable energy strategies.

The US Department of Agriculture offers competitive grants, which will be discussed, and Focus on Energy offers a variety of incentives to help finance the installation of biomass and other renewable energy systems, including grants, Cash-Back Rewards, and zero interest loans.

Focus on Energy awards implementation grants of up to $80,000, or no more than 30 percent of the project cost, for biogas digesters and non-residential wood burning systems that produce both electricity and utilize thermal energy..

More information about Focus on Energy financial incentives and its Renewable Energy Program is available at 800.762.7077 or focusonenergy.com.

BioCycle magazine, the primary conference sponsor, publishes articles on using organic residuals to maximum advantage – from improving the health of soils and crops to producing renewable energy in the form of methane and alcohol fuels. The magazine maintains a Web site at www.jgpress.com/biocycle.htm.

A full conference program and online registration are available at the BioCycle Web site at http://www.jgpress.com/conferences1/conferences1.html. Conference programs are also available from Focus on Energy by calling its toll-free number, 800.762.7077.


RENEW Wisconsin
RENEW Wisconsin is an independent, nonprofit 501(c)(3) organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. RENEW is a member of the Wisconsin Renewable Energy Network, a subcontractor to Focus on Energy. Visit RENEW at www.renewwisconsin.org or e-mail Michael Vickerman at: mvickerman@renewwisconsin.org.

Focus on Energy Renewable Energy Program
Focus on Energy is a public-private partnership that provides energy efficiency and renewable energy information and services to the state's energy utility customers. Focus on Energy's Renewable Energy program seeks to raise awareness, provide training and financing, enhance marketing, promote technical assistance, and support the installation of renewable energy technologies across Wisconsin. Focus on Energy provides applications, with full program details, at 800.762.7077 or at focusonenergy.com.

Posted by Ed Blume at 10:12 AM

August 16, 2005

ATC: Gas Prices Set Based on Regional Zones

All Things Considered:

All Things Considered, August 15, 2005 · The Lundberg Survey says the average price of gasoline has gone up 20 cents over the past three weeks, to an average of $2.53. But different areas, or zones, are paying different costs. Michele Norris talks with Elizabeth Douglass of The Los Angeles Times.

Posted by James Zellmer at 12:01 AM

August 14, 2005

Is Oil A Bubble?

Barry Ritholtz:
My B-in-L Bob, a very senior BP exec (now retired), is the one who initiates the "Oil is a bubble" discussion. All the inflation adjusted charts seem to only go back to include the 1970s --- and that's not far enough to show the true price trend of oil. Bob argues that Oil has been in a very long downtrend, and the 1970s price spike was an aberration. So too, the 2003-05 run up. A longer, inflation adjusted chart would reveal that the present spike is aberrational, and unlikely to be sustainable. I am somewhat incredulous of this claim.

His point however, is well taken. While he is expecting an eventual mean reversion, simply base dupon price, I have a similar expectation based upon market cycles. The next recession (there's always a next recession, just as there's always a next recovery) will see reduced demand for Oil, and that will allow prices to fall.
Posted by James Zellmer at 6:06 PM

July 28, 2005

Energy Bill Offers Tax Breaks

Homa Zaryouni:

After five years of trying, Congress is expected to clear an energy bill this week that provides a range of incentives for consumers to rein in energy use.

Here's how the energy bill could affect what we buy:

• Incentives to buy fuel-efficient appliances

• Incentives to buy hybrid vehicles

• The extension of daylight-saving time

• Expanded use of ethanol as a gasoline additive

• Reliability standards for power grid (aimed at preventing blackouts)

• Incentives for installing solar power at home

Posted by Erika Frederick at 8:21 AM

July 20, 2005

Congress Wants to Expand Daylight Savings Time to Save Energy

Reader Erika Frederick emailed this article by John Fialka:
As a step to save energy, Congress appears poised to extend U.S. daylight-saving time for two months, starting it earlier, on the first Sunday in March, and ending it later, on the last Sunday of November.

The move was first approved in May as part of the energy bill by the House. The idea has now been agreed upon by House and Senate committee staffs, with the approval of both Republican chairmen and ranking Democrats. That means it is likely to be approved by the full House-Senate conference committee, which begins squaring the differences between the House and Senate versions of the bill this week.
The change is not without controversy:
The Air Transport Association has asserted that its members, long-distance American airlines, could lose millions of dollars because of schedule disruptions that the proposal would cause by throwing U.S. arrivals at foreign airports out of synchronization with European schedules and Europe's system of awarding "slots," or landing rights at airports.

Some large church groups also oppose extending daylight-saving time into the early spring and late fall, because it would require children to wait for school buses in the dark. "Without the light of day, they are more susceptible to accidents with school buses, or other motorists, and the darkness also provides cover for individuals who prey on children," said the Rev. William F. Davis, deputy secretary of the U.S. Conference of Catholic Bishops, in a letter written to the House sponsors of the measure
The proposed change is part of the Energy Bill.
Posted by James Zellmer at 10:19 AM

July 19, 2005

Ethanol: More Trouble Than It's Worth?

Mark Johnson:

Farmers, businesses and state officials are investing millions of dollars in ethanol and biofuel plants as renewable energy sources, but a new study says the alternative fuels burn more energy than they produce.

Supporters of ethanol and other biofuels contend they burn cleaner than fossil fuels, reduce U.S. dependence on oil and give farmers another market to sell their produce.

But researchers at Cornell University and the University of California-Berkeley say it takes 29 percent more fossil energy to turn corn into ethanol than the amount of fuel the process produces. For switch grass, a warm weather perennial grass found in the Great Plains and eastern North America United States, it takes 45 percent more energy and for wood, 57 percent.

Slashdot discussion

Posted by James Zellmer at 12:01 AM

July 17, 2005

The Long Emergency

James Howard Kunstler:
It has been very hard for Americans -- lost in dark raptures of nonstop infotainment, recreational shopping and compulsive motoring -- to make sense of the gathering forces that will fundamentally alter the terms of everyday life in our technological society. Even after the terrorist attacks of 9/11, America is still sleepwalking into the future. I call this coming time the Long Emergency.

Most immediately we face the end of the cheap-fossil-fuel era. It is no exaggeration to state that reliable supplies of cheap oil and natural gas underlie everything we identify as the necessities of modern life -- not to mention all of its comforts and luxuries: central heating, air conditioning, cars, airplanes, electric lights, inexpensive clothing, recorded music, movies, hip-replacement surgery, national defense -- you name it.

The few Americans who are even aware that there is a gathering global-energy predicament usually misunderstand the core of the argument. That argument states that we don't have to run out of oil to start having severe problems with industrial civilization and its dependent systems. We only have to slip over the all-time production peak and begin a slide down the arc of steady depletion.
I wonder if we will see oil prices crater, like it has after previous spikes?
Posted by James Zellmer at 8:59 AM

July 11, 2005

Nanotechnology & Solar Power

Paul Carlstrom:
Investors along Sand Hill Road in Menlo Park [CA] are pouring money into solar nanotech startups, hoping that thinking small will translate into big profits.

Both inventors and investors are betting that flexible sheets of tiny solar cells used to harness the sun's strength will ultimately provide a cheaper, more efficient source of energy than the current smorgasbord of alternative and fossil fuels.

Nanosys and Nanosolar in Palo Alto -- along with Konarka in Lowell, Mass. -- say their research will result in thin rolls of highly efficient light-collecting plastics spread across rooftops or built into building materials.
Posted by James Zellmer at 8:52 AM

May 23, 2005

Canadian Oil Sands

Robert Collier visits Alberta's vast oil sands:

Alberta's oil sands are destined to be the main supply of foreign oil to the United States for at least the next century. The sands hold proven reserves of 175 billion barrels, second only to Saudi Arabia's 262 billion, and far more than the Arctic National Wildlife Refuge's estimated 10 billion.

If Americans want to keep filling their gasoline tanks at a reasonable cost, they will need the oil sands industry to push ahead on its expected path of doubling, tripling and even quadrupling production in coming years.

Nowhere else is the conflict between energy use and ecological cost so stark.

"The oil sands are a big challenge," Canada's environment minister, Stephane Dion, who has fought publicly with other Cabinet officials for a tougher line on global warming, said in an interview. "They are sending out a lot of greenhouse gas emissions.

Posted by James Zellmer at 12:00 AM

May 1, 2005

Economist Survey: Oil

Interesting and thought provoking set of articles on "Oil in troubled waters" from the Economist:

“THE time when we could count on cheap oil and even cheaper natural gas is clearly ending.” That was the gloomy forecast delivered in February by Dave O'Reilly, the chairman of Chevron Texaco, to hundreds of oilmen gathered for a conference in Houston. The following month, Venezuela's President Hugo Chavez gleefully echoed the sentiment: “The world should forget about cheap oil.”

Posted by James Zellmer at 12:01 AM

April 15, 2005

Running Out of Cheap Gas to Guzzle

James Howard Kunstler:

A few weeks ago, the price of oil ratcheted above fifty-five dollars a barrel, which is about twenty dollars a barrel more than a year ago. The next day, the oil story was buried on page six of the New York Times business section. Apparently, the price of oil is not considered significant news, even when it goes up five bucks a barrel in the span of ten days. That same day, the stock market shot up more than a hundred points because, CNN said, government data showed no signs of inflation. Note to clueless nation: Call planet Earth.

Carl Jung, one of the fathers of psychology, famously remarked that "people cannot stand too much reality." What you're about to read may challenge your assumptions about the kind of world we live in, and especially the kind of world into which events are propelling us. We are in for a rough ride through uncharted territory.

Posted by James Zellmer at 12:00 AM

April 3, 2005

Hybrid Cars: Plug Them in Overnight?

Danny Hakim

Ron Gremban and Felix Kramer have modified a Toyota Prius so it can be plugged into a wall outlet.

This does not make Toyota happy. The company has spent millions of dollars persuading people that hybrid electric cars like the Prius never need to be plugged in and work just like normal cars. So has Honda, which even ran a commercial that showed a guy wandering around his Civic hybrid fruitlessly searching for a plug.

But the idea of making hybrid cars that have the option of being plugged in is supported by a diverse group of interests, from neoconservatives who support greater fuel efficiency to utilities salivating at the chance to supplant oil with electricity. If you were able to plug a hybrid in overnight, you could potentially use a lot less gas by cruising for long stretches on battery power only. But unlike purely electric cars, which take hours to charge and need frequent recharging, you would not have to plug in if you did not want to.

Posted by James Zellmer at 12:01 AM

February 20, 2005

More on Monopoly Utilities

Some Californians are trying to "unplug" from the state's major utility, PG & E. Lower costs (though there's some dispute about that) are the motivator according to David Baker.
Posted by James Zellmer at 6:55 AM

February 19, 2005

Monopoly utilities abusing their rate base

Local utility Alliant Energy announced that they have taken full control of an $82M Mexican resort development, Laguna Del Mar. Thomas Content and Judy Newman follow the story. Content notes that Alliant also lost money invested in Brazil several years ago. Clearly, these regulated entities have no business spending money in this way. How about a rate cut (MG & E also spreads the money around in odd ways. Background here and here.
Posted by James Zellmer at 8:55 AM

February 4, 2005

Aurora, Colorado's search for water

We midwesterners have plenty of water, while those in the fast growing western states are scrambling. Aurora, Colorado is buying farmer's water rights and encouraging the use of low-water Xeriscape plants in an attempt to manage demand amid a housing boom.
Posted by James Zellmer at 12:00 AM

December 1, 2004

Fred Alger: A Call for Energy Independence

This New York Investment Firm sent this letter to President Bush, advocating a change in US energy policy and taxes. Alger's proposal makes sense:

"Beginning in 2008, any car or SUV that cannot meet a fuel efficiency standard of 30 miles per gallon will have to pay a tax of $1,000 per year." And the tax could generate "as much as $200 billion in revenue" in its first year, and "may increase in subsequent years," the letter says. The money management firm says that one of the biggest issues for Americans is the soaring price of gasoline and that the prospects for lower gas prices are not likely due to increasing demand from U.S. consumers, as well as soaring demand from nations such as China and soon from India. Alger asked President Bush to set a national goal of cutting gasoline consumption in half over the next 10 years. This, they say, needs to be adopted quickly in order to reduce America's dependency on Middle Eastern oil, which "allows U.S. motives to be questioned, fairly or not. Reducing gasoline consumption and increasing our energy independence will enhance not only our economic and military security but also ensure that the legitimacy of our foreign policy is not undermined by our energy needs."
Read the enter document [278K PDF]

Posted by James Zellmer at 12:00 AM

October 26, 2004

Natural Gas & Wyoming Drilling Boom

Excellent article by Robert Collier on Wyoming's natural gas boom, and the inherent environmental tradeoffs.

Posted by James Zellmer at 12:05 AM

October 9, 2004

Is Energy Independence a Pipe Dream?

John Cassidy:

Although the Democratic and Republican energy plans differ widely, their underlying rationale is the same. In 2003, the United States consumed some twenty million barrels of oil a day, of which slightly more than half was imported from abroad, much of it from the Persian Gulf. By 2020, according to the Department of Energy, domestic oil producers will be meeting less than a third of United States needs, and the Gulf countries will be supplying up to two-thirds of the worlds oil. This imbalance, if allowed to continue, will inevitably undermine our economy, our standard of living, and our national security, the Bush Administrations National Energy Policy Development Group warned in a May, 2001, report. But it is not beyond our power to correct. America leads the world in scientific achievement, technical skill, and entrepreneurial drive. Within our country are abundant natural resources, unrivaled technology, and unlimited human creativity. With forward-looking leadership and sensible policies, we can meet our future energy demands and promote energy conservation, and do so in environmentally responsible ways that set a standard for the world.
via Ed Cone
Read Daniel Yergin's The Prize for an excellent "panoramic history of oil".

Posted by James Zellmer at 8:31 AM

September 21, 2004

Colorado's Renewable Energy Amendment

The first statewide renewable energy referendum, which would require utilities in CO to purchase a percentage of their electricity from renewable sources, getting to 10 percent by 2015. Via Boing Boing.

Posted by James Zellmer at 12:05 AM

August 1, 2004

Renewable Energy: "We've got sun"

T.R. Reid writes from Arizona:

"Some states have oil. Some have coal. Here in Arizona, we've got sun," said Hansen, a vice president of Tucson Electric Power Co., as he squinted through heavy-duty sunglasses. "And now we're using that resource to reduce our dependence on fossil fuels."

On an utterly shadeless expanse of high desert plateau near the New Mexico border, Hansen manages America's largest solar-powered electric generating station. It looks at first glance like a long, long row of windowpanes propped up to face the sun. In fact, each "window" is an array of photovoltaic cells that generate electric current when exposed to the light.

Posted by James Zellmer at 7:51 AM

July 29, 2004

Taxpayer subsized Oil Security Costs

John Robb makes an excellent point:

The US is negotiating to launch a coastal security program for Nigeria. Wants access to bases for training and rapid deployment in case of a crisis. More "free" protection for oil companies. We need to find a way to allocate these costs so that they are incorporated into the price of oil. Currently, we spend $4-5 in naval protection for every barrel that is shipped from the Persian Gulf. Nobody pays for it but the American tax payer.
We're also subsidizing the Europeans and all other net oil importers.

Posted by James Zellmer at 9:04 AM