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Signing Your Economic Stimulus to the Saudis, Part II
Tweet Share on Facebook February 29, 2008 Comment (7)President Bush yesterday voiced faith that the nation will not slide into a recession, in part because of the economic stimulus package he and Congress worked out. However, he appeared flummoxed and perturbed at the notion that gasoline might reach $4 per gallon.
As I noted when the stimulus idea was first floated, it might be good to keep tabs on what's happening at the pump when considering how effective that stimulus plan will be.
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Some Deem Double-Hull Tankers Worth the Cost
Tweet Share on Facebook February 29, 2008 Comment (5)Let's look at the backward economics of environmental protection in the oil industry.
Here's how a company with fewer resources is more likely to invest in an extra safeguard than a company with more resources than any other in the world.
Tesoro, the second-largest refining company in the western United States, made $566 million in profit last year. Point of comparison: That's 1.4 percent of the profit pulled in last year by Exxon Mobil, $40.6 billion.
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Exxon Still Sails Single-Hulled in Alaska
Tweet Share on Facebook February 28, 2008 Comment (6)As we write in this story, Exxon Mobil is telling the Supreme Court that it has paid enough for the worst oil spill in U.S. waters, the 1989 wreck of its Valdez supertanker that poured 11 million gallons of crude into Alaska's Prince William Sound.
In its fight to avoid paying $2.5 billion in punitive damages—a sum that amounts to three weeks of the company's astounding profits—Exxon's lawyer, Walter Dellinger, asked the justices to look at the $3.5 billion that the company had already spent on cleanup and to settle state and federal fines. "That amount is enough to deter anyone from anything," Dellinger said.
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Florida's Electricity Picture Had Red Flags
Tweet Share on Facebook February 26, 2008 Comment (8)Did anyone foresee the risk of a midwinter electricity crisis like the one that plunged hundreds of thousands of south Floridians into darkness today?
The North American Electric Reliability Corp., the self-regulating industry group that oversees the grid, concluded in November that "the outlook for electricity reliability for the coming winter season is good" across the country, even with demand projected to increase 2 percent over last winter.
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High Uranium Price Doesn't Faze the Industry
Tweet Share on Facebook February 25, 2008 CommentOther fuels have boom-and-bust cycles. So why not uranium?
But perhaps befitting an atomic fuel that decays rather slowly, uranium's commodity price swings appear to be unfolding over generations instead of years. From the 1950s through the 1970s, when uranium was being used in nuclear weapons, and later, nuclear power plants, it was selling at a hefty price. Then the market got a one-two punch: first, when the tide turned against nuclear energy in the United States after Three Mile Island, and a decade later, when the Cold War ended and weapon stockpile uranium became readily available.
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Nuclear Industry Eyes a Smaller Renaissance
Tweet Share on Facebook February 21, 2008 Comment (12)Corrected on 02/25/08: An earlier version of this article incorrectly reported that $18 billion in loan guarantees were in the energy bill passed last December. The $18.5 billion in loan guarantees were part of the omnibus federal budget bill.
Although 17 companies are preparing license applications for as many as 31 new nuclear power plants, don't expect the "nuclear renaissance," if it happens—at least the first phase of it—to be nearly this big.
The Nuclear Energy Institute, the industry's policy organization, today told a gathering of more than 100 Wall Street analysts that it expects the big group of contenders to winnow itself down for the first wave of new construction. NEI projects that four to eight new power plants will move ahead and be operational by about 2016.
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The Next Price to Watch for After $100 Oil
Tweet Share on Facebook February 20, 2008 Comment (5)Now that oil has closed at $100.01 a barrel, what is the next benchmark to watch for on the way to potential global energy crisis?
Well, the price of oil still has to rise about $1.70 more to surpass its all-time inflation-adjusted peak of $101.70, as calculated by the International Energy Agency. As we've noted here, there are a lot of different calculations for that all-time high, since the futures market in oil did not exist when oil hit its old apex in 1980.
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Exxon’s Search for Oil Gets Harder
Tweet Share on Facebook February 19, 2008 Comment (1)Make sure to read the fine print in Exxon Mobil's announcement that it added more oil to its portfolio last year than it produced.
The world's largest publicly traded oil company did add 1.6 billion barrels of oil (and the oil equivalent of natural gas) to its books in 2007, or 101 percent of production, by the accounting method it likes to use. But as Exxon Mobil states later in the press release, its so-called reserves replacement was only 76 percent of production by the method that the Securities and Exchange Commission favors. And no matter the accounting method, Exxon Mobil's reserves replacement number was the lowest since 1993, the Wall Street Journal reported (subscription required) over the weekend.
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How Big Oil Could Help on Climate Change in Iraq
Tweet Share on Facebook February 15, 2008 Comment (11)Look at this satellite image of fires rising up from Iraq:
These hot spots, detected from 500 miles into space, were not sparked by bombings or by gunfire on the war-torn ground. They are neither flames of insurgency nor of combat. This is a snapshot of energy waste and the pointless release of millions of tons of greenhouse gas into the atmosphere.
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Energy is Pricey—But So Is Building More Power Plants
Tweet Share on Facebook February 14, 2008 CommentSo far, the pain of rising energy costs has been visible mostly at the gas pump and not in the electricity bill. But that is bound to change—unless we find a way to use a lot less power—due to the skyrocketing cost of building new power plants.
A new study by Cambridge Energy Research Associates shows that the cost of new power plant construction in North America increased 27 percent in just the last year and is 130 percent higher than in 2000. A plant that would have cost $1 billion in 2000, in other words, would cost $2.31 billion today. What's driving those costs is essentially the same thing driving the high cost of gasoline—demand in Asia. That demand is ratcheting up the cost of raw material, equipment, and engineering talent ever higher. CERA said the trend is especially marked in nuclear power construction—if you don't include nuke plants, power construction costs have risen 79 percent since 2000.
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