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Alternative Energy and the Stimulus Debate
Tweet Share on Facebook January 31, 2008 Comment (3)Tax breaks for wind, solar, and alternative energy, as well as for consumers who would make energy improvements to their homes, will be part of the showdown in the Senate today over the economic stimulus bill.
Those tax breaks were stripped out of the big energy bill that Congress passed and the president signed in December—losing in the Senate by one vote.
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What's Behind Bush's Clean-Technology Fund
Tweet Share on Facebook January 29, 2008 Comment (1)The biggest new energy and climate proposal in President Bush's State of the Union address was a "new international clean-technology fund, which will help developing nations like India and China make greater use of clean energy sources." Right now, dirty and cheap coal is powering the rapid growth of these economies and adding disastrously to the greenhouse gas problem.
Since Bush, while not naming China and India by name, also reiterated his oft-made point that the United States won't agree to a global climate deal that doesn't include those fast-growing economies, the clean-tech fund is an acknowledgment that maybe we should lend a hand if we want them to get on board, seeing that we expanded our own economy with the same cheap, dirty coal and lots and lots of oil.
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Shell Admits Cheap Oil Is Running Out
Tweet Share on Facebook January 25, 2008 Comment (1)I'm getting a ton of E-mail, from the congressional peak oil caucus and others, about Shell Chief Executive Jeroen van der Veer's acknowledgement that the world is running out of oil—at least, cheap oil. Here is what van der Veer writes about the two new future energy scenarios that have been developed by the quintessential business-scenario writers at Shell: "We are experiencing a step-change in the growth rate of energy demand due to rising population and economic development. After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand." The future, according to Shell, will be either a "scramble" for resources or a cautious, well-planned ride into a changing future.
The Oil Drum views it as "a clear acknowledgement of the reality of peak oil." Says Climate Progress: "The oil company with the best strategic planning says the day of reckoning is nigh." Island of Doubt says Shell's concerns seem "precious," given the outstanding profits the company and its industry fellows are making.
Shell's van der Veer talked about the energy challenges facing the world in an interview last August with my colleague Alex Markels.
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Drivers Don't Drive Less—They Use Cheaper Fuel
Tweet Share on Facebook January 25, 2008 CommentHigh prices do not appear to have moved U.S. drivers to use less gasoline, but motorists have turned to cheaper grades of fuel. This is one of the findings of a new Congressional Budget Office study on how gasoline prices affect driving behavior. The study's main conclusion appears to be that there have been slight changes, but some of the findings—people are driving slower to save gas?—are so hard to believe that I'd like to return to them another time.
Yet there are actually solid statistics—again from the U.S. Energy Information Administration—to show that between 2000 and 2007, consumption of premium gasoline fell 25 percent and that of medium grade dropped 35 percent, while regular gas sales—always much larger—increased 6.7 percent. Total gasoline sales, by the way, climbed 7 percent in those seven years. Back in 2000, regular grade made up 77 percent of all gasoline sales. That share was up to about 85 percent in 2007, while premium sales were just 9.5 percent of the market and midgrade was the laggard at 5.7 percent.
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U.S. Slowdown May Not Lower Oil Prices
Tweet Share on Facebook January 23, 2008 Comment (1)Conventional wisdom is that a slowing economy will mean lower energy prices. Unfortunately, this silver lining is not always found inside the recession cloud. In the past five recessions, the price at the gas pump went down twice, went up twice, and in one case—during the first President Bush's administration and the Gulf War—soared briefly before ending the recession essentially unchanged. Based on historical data from the U.S. Energy Information Administration, here's what happened to regular gasoline prices:
November 1973 to March 1975: up 28 percent
January 1980 to July 1980: up 12 percent
July 1981 to November 1982: down 7 percent
July 1990 to March 1991: down 0.2 percent (after a 21 percent surge)
March 2001 to November 2001: down 13 percent
Energy consultant Joseph Stanislaw, a senior adviser to Deloitte's Energy and Resources Group, told me to remember the global factors at work, when I asked about the chances that oil prices would fall this time if we dip into a recession: "It's possible. I think what goes up does come down. But I think for a while we're looking at higher prices. We may well have recession here. But Chinese oil demand is still going up. Indian oil demand is still going up. And it would be hard to imagine that Chinese oil demand is not going up this year. We've got the Olympics, huge infrastructure development, and they want this to be a big hit.
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Signing Your Economic Stimulus Over to the Saudis?
Tweet Share on Facebook January 22, 2008 CommentPresident Bush's economic stimulus plan would put $800 in the pocket of almost every taxpayer. Given that Congress is pretty much on the same page, why isn't that prospect buoying everyone's hopes? Maybe one reason is that Wall Street and consumers alike realize that unless oil prices drop significantly—which may well happen if we fall into a recession—many will be emptying that newfound stash just to pay for the increase in gasoline and other energy prices this year.
Let's use the most recent predictions of the U.S. Energy Information Administration, which was presuming (at least, as of January 8) that the economy would continue to grow and that the price of oil would fall somewhat—to an average of $87 a barrel this year. EIA has been conservative, estimating a year ago that the 2007 oil price would be $64.42 per barrel when it turned out to be $72. EIA now predicts that the average price for gasoline in 2008 will be $3.14 a gallon, up about 12 percent over last year. That would mean that the average U.S. household with two cars, which consumes 1,143 gallons of gasoline, will be paying about $377 more for gasoline. That's nearly half of the money that Uncle Sam would be handing over to one taxpayer in the hopes of spurring consumer spending.
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Seeking an Energy-Efficient TV? Yes, It's Confusing
Tweet Share on Facebook January 17, 2008 Comment (4)We received a letter challenging our recent story on the energy-gobbling ways of big flat-screen TVs. I asked both the Electric Power Research Institute and Noah Horowitz of the Natural Resources Defense Council for help on answering the reader's questions—the same ones that many consumers might be puzzling over.
I just replaced an old 20-inch cathode-ray with a new 19-inch LCD TV. Your story says LCDs use 75 percent more power. But the data plate on the back of the new TV says it uses only 80 watts, compared with 120 watts on the old TV. That's 33 percent less power!
Unfortunately, you can pretty much ignore those data on the back of the TV—at least as a measure of energy efficiency. They don't refer to how much power the TV uses but rather to how much power it can take without overheating. And manufacturers build various safety factors into those numbers, making comparisons meaningless.
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No One Agrees on the Best Car of the Future
Tweet Share on Facebook January 15, 2008 CommentWhile green cars are generating all the buzz at the North American International Auto Show underway in Detroit, the biggest advocates of autos that use less oil are divided over the best ride of the future. Venture capitalist Vinod Khosla has posted a new analysis on the Gristmill blog to underpin his arguments that flex-fuel vehicles running on cellulosic ethanol would be more affordable, and do more for the environment, than plug-in hybrid cars with rechargeable batteries. In brief, Khosla says plug-in hybrids will cost a lot and reduce carbon emissions by 25 percent, while a flex-fuel car will cost the same as an ordinary gas engine car and reduce emissions 75 percent when run on ethanol from cellulosic material (not corn but grasses, wood chips, or other waste plant material).
Meanwhile, Joseph Romm, the former head of the Energy Department's renewable energy office, who blogs at Climate Progress, argues Khosla has undercut his credibility by dissing plug-ins, which he says will be a central strategy for dealing with climate change. Romm just blogged about his recent test-drive of a plug-in using now available battery technology. Use of existing technology is a big theme for Romm, who says we have only a short window of time to stave off climate catastrophe. Cellulosic ethanol is not here yet, although one of the companies in which Khosla has invested, Range Fuels, aims to begin commercial production later this year, and another, Coskata, just announced a big partnership with General Motors.
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Not Everyone Feels the Heating Cost Pain
Tweet Share on Facebook January 10, 2008 CommentI've said before that the pain of high energy prices is not spread out equally, but that point was driven home again in our new story on how bad the winter heating season is beginning to look.
All the projections in the story are brand new this week from the Energy Information Administration. The agency badly underestimated what the price of heating oil would be in its original winter outlook, on Page 6 of this document released in November.
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The Oil Drum: $100 a Barrel Quickens the Beat
Tweet Share on Facebook January 7, 2008 CommentAfter the price of oil hit $100, I checked in with The Oil Drum, a Web-based community founded a couple of years ago to discuss energy and the future. The folks who gather at the Oil Drum, by and large, agree that we're at or near "peak oil"—the moment when petroleum production will begin its inexorable decline.
This is not a site where people spout opinions on a world running out of oil. This is where geologists, physicists, and even social scientists post detailed charts and graphs and analyses on a world running out of oil. Here, you can read a technical paper on the state of depletion of Saudi Arabia's Ghawar, the world's largest oil field, or read periodic statistical updates on the status of worldwide production and how that has squared with the predictions.
You can also read postings on why the denial of an energy crisis is a conditioned response. And there's peak-oil humor, as when a cartoon of a smiling pitcher serving up Kool-Aid accompanies one of the many examinations of the predictions of Cambridge Energy Resource Associates (CERA), the widely respected oil industry consulting firm, which has often issued assurances that petroleum supplies are adequate and that prices would ease.
