2008.05.06 –
The continued rise in U.S. crude oil prices, which hit an all-time high above $122 a barrel on Tuesday, seems almost unending.
Robust demand for crude and a weak dollar have fuelled the rally from a dip below $50 at the start of 2007 to fresh records almost every day.
Adjusted for inflation, oil is now above the $101.70 peak hit in April 1980, according to the International Energy Agency, a year after the Iranian revolution.
If that wasn't enough, Goldman Sachs predicted on Tuesday that oil could soar towards $150-$200 a barrel because of a lack of adequate supply growth.
"The possibility of $150-$200 per barrel seems increasingly likely over the next 6-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," the bank said.
And even if prices do fall back, experts think they'll just go back up again.
"The downward move in oil last week now seems like only a correction," said Christopher Bellew, senior vice president at Bache Commodities. "The effect of the credit crisis in the United States is reducing people's disposable incomes and you'd expect this to have an impact on the oil price, but it's not having any impact."
Here's a look at some of the factors behind the continued surge in oil prices.
Dollar Weakness
The fall in the value of the dollar against other major currencies has helped drive buying across commodities as investors view dollar assets as relatively cheap.
It has also reduced the purchasing power of OPEC's revenues and increased the purchasing power of some non-dollar consumers.
OPEC oil ministers have noted that although prices are rising to record nominal levels, inflation and the dollar have softened the impact.
Some analysts say investors have been using oil as a hedge against the weaker dollar.
Investor Speculation
Since the Federal Reserve cut U.S. interest rates in mid-August last year and central banks pumped billions of dollars into financial markets to ease a credit crunch, oil and gold have risen.
Investment flows from pension and hedge funds into commodities, including oil, have boomed, as has speculative trading.
At the same time, the credit crunch has brought some other markets, such as the U.S. asset-backed commercial paper market, to a virtual standstill.
Some of that money has found its way into energy and commodities, analysts say.
Demand on Rise
While previous price spikes have been triggered by supply disruptions, demand from top consumers the United States and China is a main driver of the current rally.
Global demand growth has slowed after a surge in 2004 but is still rising and higher prices have so far had a limited effect on economic growth.
Analysts say the world is coping with high nominal prices because, adjusted for exchange rates and inflation, they have been until now lower than during previous price spikes and some economies have become less energy intensive.
OPEC Supply Restraint
The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, started to reduce oil output in late 2006 to stem a fall in prices.
Fewer OPEC barrels entering the market helped propel the rally and consumer nations led by the International Energy Agency have urged OPEC to pump more oil.
At its meetings since December, OPEC has agreed to leave output unchanged, saying there is enough crude in the market.
It next meets formally on September 9.
Few in the group believe there is much it can do to tame a market it says defies logic.
Nigeria
Supply of crude from Nigeria, the world's eighth-largest oil exporter, has been cut since February 2006 because of militant attacks on the country's oil industry.
Oil companies and trading sources have detailed 564,000 bpd of shut Nigerian production due to militant attacks and sabotage.
Iran
Oil consumers are concerned about supply disruption from Iran, the world's fourth-biggest exporter, which is locked in a dispute with the West over its nuclear programme.
Western governments suspect Iran is using its civilian nuclear programme as a cover to develop nuclear weapons.
Iran denies this, saying it wants nuclear power to make electricity.
Iraq
Iraq is struggling to get its oil industry back on its feet after decades of wars, sanctions and underinvestment.
Exports of Kirkuk crude from the country's north are stabilising as the system recovers from technical problems that had mostly idled the pipeline since the U.S.-led invasion of Iraq in March 2003.
Refinery Bottlenecks
Refiners in the United States, the world's top gas guzzler, struggled with unexpected outages which have drained
--Reuters contributed to this report.
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2008.05.06 –
The Renewable Fuel Standard (RFS) contained in the Energy Policy Act of 2005 mandated the use of corn-based ethanol in motor fuels. The recently enacted Energy Independence and Security Act accelerated this mandate to 9 billion gallons of ethanol in 2008 and 36 billion gallons in 2022. Recent spikes in food prices, however, have led many to question the wisdom of these mandates and subsidies that encourage the use of corn and other sources of food for use as fuel.
The monthly average price of corn jumped from $2.06 per bushel in January 2006 to more than $6.00 per bushel on the Chicago Board of Trade as of May 1, 2008. Not surprisingly, many observers believe that there is a correlation between the RFS mandate and the skyrocketing prices of corn and foodstuffs. In response, proponents of ethanol mandates and tax subsidies have claimed that food price hikes have nothing to do with the price of corn; that the increase in food prices is due to the higher price of energy. For example, Rick Tolman, chief executive of the National Corn Growers' Association, deflected criticism of the ethanol mandates by saying, "If you want to know who the real axe murderer is, look at $4-a-gallon gasoline." Bob Dineen, the president of the Renewable Fuels Association, said, "Rising oil prices have twice the impact [on food prices] of similar increases to corn."
Although the causes of the increase in food prices are complex, a sober analysis of the data suggests that defenders of biofuel mandates are exaggerating the role energy prices have played in the recent spikes. They also seem to ignore the obvious impact of a policy that requires nearly 20 percent of the corn crop to be diverted for use in motor fuels. In fact, in its 2005 analysis, the Congressional Budget Office projected that the ethanol mandate could reduce farm support payments - due to higher corn prices - by more than $4 billion from 2005-2015.[1]
Perhaps the strongest argument put forth by proponents of the ethanol mandate is a recent study by Texas A&M researchers.[2] The study claims that "[i]mportant food items like bread, eggs, and milk have high prices that are largely unrelated to ethanol or corn prices" (p. 3). This conclusion naturally resonates well with those supporting the RFS mandates and continued subsidies.
However, a close reading of the Texas A&M study argues strongly against the notion that oil prices have driven up the price of food. The authors use an econometric model to gauge the equilibrium price effects of "shocks" to various input prices, in order to fully account for feedback loops in the system. Table 6.2 (p. 25) shows the results. The long run (i.e. after 24 months) impact of a 1 percent crude oil price shock was zero for every single food category in the model-namely eggs, bread, milk, beef, pork, chicken, lettuce, and tomatoes-and also zero for the overall food-at-home CPI; only food-away-from-home CPI was influenced, with a meager 0.007 percent increase. In contrast, a 1 percent shock to corn prices caused egg prices (after 24 months) to rise 0.250 percent, bread prices to rise 0.066 percent, and milk prices to rise 0.100 percent. Overall, the food-at-home CPI increased 0.038 percent for a 1 percent increase in corn prices. As the authors state: "for all retail food prices considered, we cannot find a statistically significant effect of crude oil prices" (p. 25). If ethanol proponents wish to continue pointing to the Texas A&M study, therefore, they will have to drop their rhetoric about oil prices driving up the cost of food.
Setting aside econometric models and employing common sense, rising corn prices surely have to have a major impact on some retail food prices. Feed costs can account for 50 percent of the cost of production for milk, and up to 80 percent for eggs. The price of corn feed is also a significant factor in the cost of raising cattle. For example, a lactating cow can consume 106 bushels of corn per year.[3] In truth there are many factors influencing commodity and food prices;[4] there is no single "smoking gun."
In addition to the role played by biofuel mandates and energy prices, there is also the strong economic growth in developing countries such as China and India, where their increasing consumption of protein places upward pressure on feed prices for livestock. Another major factor has been the falling dollar, which depreciated a total of almost 20 percent against the euro during 2006 and 2007. A weaker currency not only makes imported items more expensive, but also amplifies foreign demand for American agricultural exports, thus raising their prices even higher. Rather than trying to pick "the" cause of higher food prices, the task is rather to assess the relative importance of the various factors.
It is difficult to measure the full impact on food prices of ethanol mandates and subsidies because of feedbacks in the economy. As farmers devote more land to corn, they must devote fewer acres to other crops, such as soybeans. This reduces the soybean crop, raising soybean prices. Therefore, even food items that have nothing to do directly with corn can see their prices rise because of competition for farmland. As explained in a USDA report:
"By the end of the 2006/07 crop year, over 2 billion bushels of corn (19 percent of the harvested crop) were used to produce ethanol, a 30-percent increase from the previous year. Higher corn prices motivated farmers to increase corn acreage at the expense of other crops, such as soybeans and cotton, raising their prices as well."[5]
The USDA has assessed the direct impact of the cost of oil on food prices. A 1997 study used three different approaches to model the impact of a doubling of crude oil prices on food prices at home. The two short run models yielded estimates of 0.52 percent and 1.82 percent, while the long run model estimated that a doubling in the price of a barrel of crude oil would only lead to a 0.27 percent increase in the CPI of food at home.[6] We can use these estimates to interpret the recent rises in both food and oil prices. The food-at-home price index in March 2008 was 4.7 percent above the March 2007 level. During the same 12-month interval, the monthly average spot price of crude oil increased from $60.44 to $105.45,[7] a 74 percent increase. Therefore, using the highest estimate of the three USDA models, only 29 percent of the latest March/March rise in food prices can be attributed to rising crude prices, while the other 71 percent of the food-at-home CPI increase must be attributed to other factors. Using the sensitivity estimate from either of the other USDA models with lower estimates, the proportion of food price inflation due to the price of oil would be even less.
There are many factors that contribute to rising food prices including government-induced demand for ethanol, rising oil and gasoline prices, strong economic growth in poorer countries, and a general weakening of the U.S. dollar against other currencies. The price of gasoline is quite obviously not the "real axe murderer" in the rising price of food. Rising oil prices do account for a small portion of the recent spike in food prices. But when 20 percent of U.S. corn production is being diverted from the dinner table to the gas tank, we can confidently say that the ethanol mandate has had - and will continue to have - a lasting impact on the price of food.
Robert P. Murphy is an economist with the Institute for Energy Research (IER). His research focuses on the proper discount rate to be used in cost-benefit analyses and the implications of structural uncertainty for policy solutions.
[1] Congressional Budget Office, July 27, 2005.
http://www.cbo.gov/ftpdocs/65xx/doc6581/hr6prelim.pdf
[2] Anderson, David P. et al. (2008) "The Effects of Ethanol on Texas Food and Feed." Agricultural and Food Policy Center, Texas A&M, April 2008. Available at: http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf.
[3] See http://www.extension.org/faq/25593.
[4] Trostle, Ronald. (2008) "Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices." USDA WRS-0801, May 2008. Available at: http://www.ers.usda.gov/Publications/WRS0801/WRS0801.pdf.
[5] Leibtag, Ephraim. (2008) "Corn Prices Near Record High, But What About Food Costs?" AmberWaves February 2008. Available at: http://www.ers.usda.gov/AmberWaves/February08/Features/CornPrices.htm.
[6] Reed, A.J. et al. (1997) "Changing Consumer Food Prices: A User's Guide to ERS Analyses," USDA Technical Bulletin No. 1862, page 7, Table 5, available at http://www.ers.usda.gov/publications/TB1862/tb1862.pdf.
[7] See data on West Texas Intermediate crude spot prices, available through the EIA at http://tonto.eia.doe.gov/dnav/pet/hist/rwtcM.htm.
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2008.05.05 – As food riots in Somalia turned deadly, economists and elected officials in the United States and the European Union are revisiting the 'wisdom' of biofuel mandates.
According to American economist Jeffrey Sachs, such mandates "do not make sense now in a global food scarcity condition."
No kidding, Jeff.
Washington politicians appear to be having similar epiphanies. According to the Associated Press, "lawmakers are questioning the unintended consequences of using corn for fuel amid a global food crisis that has led to riots abroad and higher grocery bills at home," and calling on the EPA to suspend the ethanol mandate.
How quickly will Washington reverse course? According to the AP, "Analysts say lawmakers are unlikely to roll back popular ethanol subsidies during an election year."
For more on biofuels such as ethanol, click here.
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2008.05.03 – 
California's Energy Colonialism
By MAX SCHULZ
May 3, 2008; Page A11
"When you look at the globe, California is a little spot on that globe," Gov. Arnold Schwarzenegger said recently at Yale University's Climate Change Conference. "But when it comes to our power of influence, it is the equivalent of a whole continent."
Perhaps. As an exercise of this influence, Mr. Schwarzenegger has attempted to push climate-change policy forward, signing the Global Warming Solutions Act. It commits the state to reducing greenhouse-gas emissions to 1990 levels - roughly 25% below today's - and all but eliminating them by 2050.
"California has the ideas of Athens and the power of Sparta," he said in his state of the state address last year. "Not only can we lead California into the future; we can show the nation and the world how to get there."
His words are in keeping with the state's self-perception. Politicians, business titans, academics and environmental activists proudly point to four decades of environmentally conscious public policy - while maintaining a dynamic economy, arguably the eighth-largest on the planet, with a gross state product of more than $1.6 trillion.
In truth, the state's energy leadership is a mirage. Decades of environmental policies have made it heavily dependent on other states for power; generated crippling costs; and left the state vulnerable to periodic electricity shortages. Its economic growth has occurred not because of, but despite, those policies.
Since the early 1970s, California has instituted new efficiency standards for appliances and the construction of new buildings. It mandated aggressive conservation programs and required a certain percentage of the state's electricity to come from renewable sources like wind and solar, which it has subsidized. It implemented far-reaching regulations on emissions from car tailpipes and from stationary sources like factories. And it has moved to shut down the state's nuclear facilities.
For a time, it worked. Since the mid-1970s, California's economy has grown while per-capita energy consumption stayed flat - an astounding fact, considering that such consumption has increased by roughly 50% elsewhere in the country over the same period.
But consider the story of the Rancho Seco Nuclear Generating Station. Opened in 1975, it was capable of generating over 900 megawatts (MW) of electricity, enough to power upward of 900,000 homes. Fourteen years after powering up, the nuclear reactor shut down, thanks to fierce antinuclear opposition. Eventually, the facility was converted to solar power, and today generates a measly four MW of electricity. After millions of dollars in subsidies and other support, the entire state has less than 250 MW of solar capacity.
Rancho Seco helps explain California's energy crisis in 2000 and 2001, when numerous rolling blackouts and power outages caused billions of dollars in damages. The degree to which rapacious power-company executives and traders were responsible for the shortages remains open to debate. Not open to debate is that California had insufficient power to meet demand, with a frayed and overloaded infrastructure for moving electrons.
California's flat per-capita energy consumption has not saved it from blackouts, either, since its population had been soaring. From 1979 to 1999, the number of residents jumped from about 23 million people to 33 million. Today, the figure is closer to 38 million, and it could top 45 million by 2020.
The blunt secret is this: California now imports lots of energy from neighboring states to make up for having too few power plants. Up to 20% of the state's power comes from coal-burning plants in Nevada, New Mexico, Utah, Colorado and Montana. Another significant portion comes from large-scale hydropower in Oregon, Washington State and the Hoover Dam near Las Vegas.
"California practices a sort of energy colonialism," says James Lucier of Capital Alpha Partners, a Washington, D.C.-area investment group. "They leave those states to deal with the resulting pollution."
California's proud claim to have kept per-capita energy consumption flat while growing its economy is less impressive than it seems. The state has some of the highest energy prices in the country - nearly twice the national average - largely because of regulations and government mandates to use expensive renewable sources of power. As a result, heavy manufacturing and other energy-intensive industries have been fleeing the Golden State in droves.
The unreliable power grid is starting to rattle some Silicon Valley heavyweights. Intel CEO Craig Barrett, for instance, vowed in 2001 not to build a chip-making facility in California until power supplies became more reliable. This October, Intel opened a $3 billion factory near Phoenix for mass production of its new 45-nanometer microprocessors. Google has chosen to build the massive server farms that will fuel its expansion anywhere but in California.
And yet, despite a desperate need for more power, opposition to energy projects remains prevalent. State law prohibits the construction of new nuclear plants, and legislative efforts last summer to repeal it went nowhere. Last spring state regulators vetoed a proposal to build a liquefied natural gas terminal 14 miles off the Malibu coast.
Even renewable-energy projects meet resistance. Texas, of all places, is the nation's leader in wind-power generation. High costs, excessive regulation and environmentalist litigation have hampered California's efforts. Texas has just built lots of turbines.
None of this has stopped leaders from setting wildly unrealistic goals for safeguarding the environment, from electric cars to wind-energy production. The latest goal is to drastically reduce greenhouse-gas emissions.
The details of how the Global Warming Solutions Act is actually implemented don't have to be revealed until next January. Even the California Energy Commission hints that the targets might be unreachable. But they'll certainly cost a lot to find out. Analysis from the Electric Power Research Institute pegs the Act's cost to the California economy at anywhere from $100 billion to $511 billion.
Californians may feel good about their environmental consciousness. But someone needs to build power plants and oil refineries to fuel their economy. Someone needs to manufacture the cars they drive, the airplanes they fly, the chemicals and resins and paints and plastics that make their lives comfortable.
Those things require energy, and lots of it. All the wisdom of Athens and all the power of Sparta won't change that fact.
Mr. Schulz is director of the Manhattan Institute's Center for Energy Policy and the Environment. This op-ed is adapted from the Spring 2008 issue of City Journal.
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2008.04.16 –
South Korea Pitches New Energy Idea
By Evan Ramstad
April 16, 2008; Page A10
SEOUL, South Korea -- South Korea's president and economic leaders, on a scheduled visit to the U.S. starting Wednesday, plan to add a new twist to their pitch for business and investment: the country's desire to become an energy producer.
South Korea, which imports all of its fossil fuels, discovered large underwater deposits of gas hydrates off its coast last year. Now, its leaders want the country to be at the forefront of commercializing the potential energy source, possibly with the help of U.S. companies and investors.
Mr. Lee is planning to speak in New York Wednesday on policy changes and what government officials here describe as an effort to "reintroduce" the country to outside investors. South Korea's business image has been hurt in recent years by incidents that fed perceptions that Koreans don't like foreign investment and businesses.
Mr. Lee won the presidency by promising to give a jolt to South Korea's economy, but the prospect of recession in the U.S. and its ripple effects around the world pose a threat to his goals. Attracting foreign investment, which has declined in the past two years, is one way the country's new leaders hope to boost growth.
"We will open up our markets and strengthen competition at a very, very fast pace," Lee Youn-ho, South Korea's Minister of Knowledge Economy, said in an interview. "It will be very much different from past administrations."
During the U.S. trip, the leaders plan to tout investment-friendly steps Korea has taken, such as cutting red tape and business taxes. And they plan to discuss opportunities for foreign companies in several sectors, including energy development.
Gas hydrates are crystalline solids of methane and water molecules. They have been found in large quantities also off the coasts of China, India, Taiwan and the U.S. Some researchers estimate that gas-hydrate reserves exist in quantities far larger than all other known fossil fuels.
But the fuel is stable only under high pressure and low temperature, which makes it expensive and complicated to develop. In addition, methane released during extraction could contribute to global warming.
In meetings in New York and Washington, the South Korean delegation plans to seek support for its budding gas-hydrate research. South Korea has already spent about $70 million, chiefly to determine the size of a gas-hydrate field about 83 miles off its east coast.
Mr. Lee, the economy minister, whose responsibilities include energy, said he will ask the U.S. Department of Energy to allow Korean scientists to join a gas-hydrate exploration project in Alaska. "We would like Korean engineers to participate in this project and also share technology," he said.
Energy development is so new to South Korea that few of its universities offer majors in geology, petroleum engineering or other related studies. "We don't have experts in that field, but this administration will make it a priority to nurture that talent," the minister said.
Read the complete story here.
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2008.04.14 – Bush prepares global warming initiative
April 14, 2008
By Stephen Dinan - President Bush is poised to change course and announce as early as this week that he wants Congress to pass a bill to combat global warming, and will lay out principles for what that should include.
Specifics of the policy are still being fiercely debated, but Bush administration officials have told Republicans in Congress that they feel pressure to act now because they fear a coming regulatory nightmare. It would be the first time Mr. Bush has called for statutory authority on the subject.
"This is an attempt to move the administration and the party closer to the center on global warming. With these steps, it is hoped that the debate over this is over, and it is time to do something," said an administration source close to the White House who is familiar with the planning and who said to expect an announcement this week.
The source requested anonymity to be able to speak on a sensitive matter still under debate. Given the arguments at the White House over the extent of the action to take, it is not clear exactly what Mr. Bush will propose, the adminstration source said.
Still, Republican members of Congress who were briefed last week let top administration officials know that they think the White House is making a mistake, according to congressional sources and others familiar with the discussions. Opponents said Mr. Bush could be setting off runaway legislation, particularly with Democrats in control of Congress.
White House spokeswoman Dana Perino would not say whether an announcement is imminent. She said discussion has continued on how to follow up on Mr. Bush's call at the Group of Eight summit last year for the U.S. to lead on a post-Kyoto Protocol worldwide framework.
The administration also is trying to head off what it sees as a regulatory disaster. Environmentalists say greenhouse gases can be regulated under existing rules under the Clean Air Act, the Endangered Species Act or the National Environmental Policy Act, and have filed lawsuits to try to force action. The Bush administration and others want to avoid a web of rules and regulations for businesses.
"The embedded regulatory trajectory that we're on is a train wreck," Mrs. Perino said. "For those who want reasonable and responsible action, it is worthwhile to have a constructive conversation as we work to keep the developing nations in this process in a way that will work to solve the problem without harming the economy."
She said the administration's discussions, both internally and with Congress, are building toward an expected debate on climate change in the Senate in June and toward the next G-8 meeting in July, when the U.S. would like to have a more specific conversation about goals for cutting greenhouse-gas emissions.
At the end of this week, U.S. officials will be in Paris for a meeting with officials from other major economic powers, where climate change is expected to be on the table. Sources in the administration and in Congress say this meeting explains the White House push.
Mrs. Perino, though, stressed that the White House does not expect countries to come to the meeting with specific proposals.
Many scientists say humans are contributing to climate change through increased carbon dioxide emissions from industry, power generation, automobiles and other sources. Some governments, including European nations, have enacted rules to try to limit their emissions, though opponents say those rules end up hurting their economies without much environmental benefit to show for it.
With Sens. John McCain, Barack Obama and Hillary Rodham Clinton, the remaining major presidential candidates, all favoring new controls on greenhouse-gas emissions, Mr. Bush could be trying to lay the groundwork for the next president.
All three candidates are on record in favor of a cap-and-trade system, such as the Europeans have. The system sets an overall limit on carbon emissions and allows polluters to buy credits from companies that stay below their carbon targets.
The congressional and administration sources said it's not clear whether Mr. Bush will go that far this week.
But Brian Kennedy, spokesman for the Institute for Energy Research, said Mr. Bush should realize that the U.S. is already ahead of the Europeans.
"U.S. taxpayers are already spending more than $40 billion a year to address climate change, and to date we're achieving better results than the Europeans are under a bureaucratic regulatory framework," he said. "That should be kept in mind before any rash — or political — decisions are made inside the White House. Excessive regulations would come with significant economic consequences and additional costs for consumers."
Christopher C. Horner, author of "The Politically Incorrect Guide to Global Warming," said the Bush administration should have seen the regulatory problems long ago and that the president is trying to solve them the wrong way.
"There's a way to responsibly do this, but calling for a bill isn't it. Democrats — and all presidential candidates — desperately want Bush to take ownership of the issue before he goes, leaving them free of the burdens of responsibility for their rhetoric," Mr. Horner said.
He said Mr. Bush should have been spending the past two years pointing out that even as the U.S. reduces the rate of growth of carbon emissions, it is taking manufacturing jobs from Europe. Nations that adopted strict carbon emissions are facing economic consequences while finding the goals impossible to meet, he said.
"The U.S. is the world leader in reducing the rate of growth of CO2 emissions while also growing its economy — faster on both counts, as with population as well, than its principal antagonist, Europe, which is suffering for reasons of political 'face' under a failed scheme that the Democrats and McCain amazingly want to burden us with," he said.
James L. Connaughton, chairman of the Council on Environmental Quality, and Keith Hennessey, a domestic policy adviser to Mr. Bush, got an earful Wednesday when they briefed House members on the options the White House is considering.
One person familiar with the meeting said several members, including Republican Reps. John Shimkus of Illinois and F. James Sensenbrenner Jr. of Wisconsin, told the White House it was making a mistake if it called for congressional action.
Spokesmen for both congressmen said their bosses didn't want to be interviewed about the meeting, which they regarded as private. Steve Tomaszewski, a spokesman for Mr. Shimkus, said the congressman's exchange with administration officials was intended to let them know the prospects under a Democrat-controlled House.
"He was emphasizing that whatever proposal the administration might be discussing would not be received favorably by the majority in Congress," Mr. Tomaszewski said. "The speaker is pretty much focused on a cap-and-trade, and anything less that you might propose would likely not be received favorably. Small steps aren't what they're looking at right now."
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2008.04.14 – The University of Pittsburgh created a Center for Energy. The center will study new energy technologies, including renewable energy and clean coal technologies. The center will include 40 faculty members with different areas of expertise.
(Source: Pittsburgh Business Times)
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2008.04.14 – Environmental groups are against a plan for new coal fired plants in the towns of Bay City and Midland, Michigan. The new plants would operate for 50 years. Environmental groups don't want such a commitment for such an old technology.
Environmental groups want to use renewable energy rather than using coal. They think that the power companies are just trying to get these plants approved before carbon emissions are regulated by Congress.
(Source: MLive)
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2008.04.14 – The British Nuclear Decommissioning Authority received proposals from over 30 interested parties for land to develop nuclear sites. These sites would be developed for nuclear power stations.
"Over 30 companies have expressed an interest in our assets. We think this is a very robust number," a spokesman said.
(Source: Reuters)
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2008.04.14 – Americans spent less on consumer goods in March due to rising fuel and food costs. Gasoline prices rose 11 percent since this time last year. Across the board consumr spending has dipped; housing, auto sales, and large appliances have all been effected.
Recession fears have increased and the rising gasoline prices have been blamed for higher costs of groceries. "Spending is pretty sluggish," said Kevin Logan, senior market economist at Dresdner Kleinwort in New York, who correctly forecast the sales figure less autos. "If you're getting an inflationary increase in gasoline and food, that would mask the true weakness in consumer spending. This is consistent with recessionary conditions."
(Source: Bloomberg)
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2008.04.14 – A new joint project has been launched between the MIT Energy Initiative and the Fraunhofer Institute. The Fraunhofer Institute is a German R&D organization, the two organizations will be attempt to develop an commercialize sustainable energy systems.
The new institute, which is a project of the Massachusetts Technology Collaborative, will be named the MIT-Fraunhofer Institute for Sustainable Energy Systems. The institute will initially focus on solar energy, green build construction, and energy device prototyping.
(Source: Mass High Tech)
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2008.04.11 – Natural gas storage fell last week and is 1.8 percent below the five-year average for this time of year. The Energy Department said the natural gas inventories held in underground storage fell by 14 billion cubic feet. These were the expectations of analysts surveyed by Dow Jones Newswires.
(Source: Forbes)
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2008.04.11 – The British government warned prospective bidders for British Energy that they would not accept the rise of a monopoly in the country's pursuit of a new generation of nuclear reactors. This move is an indication that the British government will not accept the bid of a single bidder.
British Energy plants generate 20% of the UK's electricity. Due to age, most of their plants will have to stop operations in the next 15 years.
(Source: Energy Business Review)
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2008.04.11 – Dominion Energy has plans for a 300MW Prairie Fork wind farm in central Illinois. The farm will feature 150-200 turbines across 25,000 acres in the Illinois counties of Christian and Montgomery 25 miles southeast of Springfield.
The project will raise Dominion's renewable power generation capacity to nearly 3200MW in the Midwest. The project will begin in 2010.
(Source: Energy Business Review)
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2008.04.11 – Toyota's 1/X weighs in at a mere 926 lbs and is made primarily from bio-plastics. The fuel efficiency is twice that of the Prius, due to the fact that it weighs much less and only carries 4 gallons of fuel. That four gallons will drive over 600 miles.
It is currently in the concept stage, but with the current line of hybrid vehicles garnering a wait list for purchase one can only assume that such a vehicle will gain a fanbase rather quickly.
(Source: EcoGeek)
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2008.04.11 – Engineer and inventor, Alfonz Viszolay, has been working with algae-based fuel production for the last few decades. Most recently he has deployed a prototype that will use CO2 emissions from a brewery operation to accelerate the growth of algae. The prototype will be used by Santa Fe Brewing Co.
(Source: New Mexico Business Weekly)
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2008.04.11 – The storing of CO2 gases in an underground gas reservoir is being questioned by the National Generations Forum. John Boshier says, "With 80 per cent of Australia's generation from coal, that means we have to find carbon capture and storage sites for most of that,"
"That's 200 million tonnes of carbon dioxide at the moment, rising to let's say 300 million tonnes by 2030. That's a lot of carbon storage sites to find."
(Source: ABC News - Australia)
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2008.04.11 – Former President Bill Clinton was in coal country and highlighted the role clean coal can play in the stabilization of the economy. "Clean coal can turn this country around," Clinton said. "We can't walk away from coal and its importance to our future in America."
He went on, "We need to focus our attention on clean coal technology. This can create new jobs for the people of Kentucky and West Virginia."
(Source: Pikeville Medical Leader)
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2008.04.11 – United Technologies Corporation Power, a Connecticut based company, reported that it will supply 110 PureCycle geothermal power systems to a Utah-based company. This is in addition to the 90 that were ordered one year ago.
The 200 systems total will have capability to generate 40 to 45 megawatts per hour of renewable electric power. The geothermal power plants built by the Utah based Raser Technologies will qualify for federal renewable energy tax credits.
(Source: Mass High Tech)
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2008.04.11 – British Prime Minister Gordon Brown wrote a letter to fellow G8 leaders voicing his concerns about higher food prices due to the rush towards the manufacturing of biofuels. He fears that replacing petroleum with biofuels is disrupting the global demand for food.
Mr Brown wrote: "There is growing consensus that we need urgently to examine the impact on food prices of different kinds and production methods of biofuels, and ensure that their use is responsible and sustainable."
(Source: EU Observer)
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2008.04.11 – The Energy Department projects that the average price for a gallon of regular unleaded gasoline will reach $3.60 per gallon in June. This will surely put a dent into many family's summer travel plans. The costs will be nearly one dollar higher than last summer's prices.
(Source: Portland Business Times)
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