America’s path to alternative energy runs through Brazil
Mitt Romney alone can no longer be saddled with the label of most obvious flip-flopper among this year’s presidential candidates. That honor instead belongs to Barack Obama, whose 180 on the Keystone XL pipeline construction last week was sufficient to induce whiplash among oil industry executives and green advocates alike.
In an effort to actually make good on his “all of the above” energy policy, promoting both fossil fuel and renewable energy, President Obama had no choice but to pull off a neck-twisting reversal. Five months ago he postponed a decision on whether to build a controversial $7 billion pipeline to bring Canadian oil sands fuel down to Texas refineries. But it turns out that was only a temporary sop to the activists who see the structure as both an environmental threat as well as the embodiment of reckless Big Oil greed.
Now, with his opponents falsely equating current high oil prices with Obama’s perceived inaction on domestic energy development, Obama is acting differently. He’s scrambling to counter them by not only reconsidering the earlier postponement but actually accelerating the pipeline’s build as a national priority.
As recently as Mar. 8, Senate Democrats echoed Obama’s early wariness on the pipeline by defeating a Republican bill to fast-track Keystone’s construction. The bill fell short by four votes, no doubt due to Obama’s personal outreach to several senators for their “no” vote, prompting Senate Minority Leader Mitch McConnell to remark: “At a moment when millions are out of work, gas prices are sky-rocketing and the Middle East is in turmoil, we’ve got a president who’s up making phone calls trying to block a pipeline here at home. It’s unbelievable.” After two weeks of damaging poll results, Obama hurried to a photo-op in Cushing, Oklahoma to announce his embrace of the pipeline project.
It would be easy to dismiss such quick U-turns as election year politics-as-usual, but perhaps the truth is that Obama and his advisers finally saw the light on the game-changing potential of North America’s energy opportunities. Within the oil and gas sector, the talk of America becoming energy independent has reached fever pitch since Obama nixed his earlier decision on Keystone. Last week’s Wall Street Journal op-ed by renowned Citigroup energy analyst Ed Morse, “Move Over OPEC – Here We Come,” painted a dramatic picture of a Western hemisphere hydrocarbon revolution based on the current glut of Canadian oil sands crude, American shale gas and Mexican offshore drilling, rendering the Americas as “the new Middle East.”
Statements like that reassure defense observers who see the dangers of foreign oil dependency and encourage multinational fuel corporations. But it’s also the renewable energy companies that stand to benefit. Solar, hydropower, wind and green fuel cell need time to become economically viable and plug into a revised and as-yet-undeveloped smart power grid. A domestic fossil fuel awakening can buy that time.
Keystone XL’s organizing principle
In October 2011, National Journal surveyed energy experts about whether Obama was likely to approve the Keystone XL pipeline, which would carry Canadian tar-sands oil through the U.S. to the Gulf of Mexico. Ninety-one percent of the “energy and environment insiders” believed he would.
On Wednesday, Obama proved them wrong.
How could the experts have gotten it so wrong? The answer is twofold: Grassroots environmentalists were stronger, and congressional Republicans dumber, than anyone predicted.
Back in August of 2011, when author and activist Bill McKibben staged the first anti-Keystone rallies around the White House, political observers scoffed. These were, after all, the same environmentalists who had been rendered irrelevant by their cap-and-trade defeat and the stress of economic recession. No way they could stop a fossil fuel infrastructure project with big money behind it.
But McKibben kept at it. The movement he seeded grew, forging strategic partnerships with Nebraska farmers, social-justice groups and unions. Activists staged more rallies, hounded the president everywhere he went and uncovered serious questions about the relationship between the tar-sands industry and the State Department. As the crowds grew, big-money Democratic donors started weighing in on the issue. In November, under intense pressure, Obama announced that the final determination would be delayed until after the election. It was an unexpected display of muscle from the green grass roots.
Still, most observers assumed that Obama was just buying time (and the support of his environmental base) and would approve the pipeline in the spring. That’s where the dumb Republicans came in.
CapitalismSays,
Your textbook Economics get punted when OPEC decides to cut supply (i.e. artificially restrict) in the face of an increase in the supply of oil from Canada to keep prices high (as they have demonstrated numerous times in the past).
Like Mike said, oil companies have no interest in reducing the price of oil – whether it be Canadian oil firms, ExxonMobil in the U.S., or an OPEC oil sovereignty.
Painting Bill Clinton’s “white roofs” into reality
By Juan Carlos Pineiro Escoriaza The opnions expressed are his own.
If you’ve been outside recently, you probably realize that this summer is hot. With the latest heat wave now spreading across the country, it’s worth pointing out that many Americans are unknowingly contributing to the soaring temperatures. How? Millions of rooftops in America are made of black tar; and they absorb and trap an enormous amount of heat during the summer months. It’s also worth pointing out that there’s an easy fix to the black roofs problem that people of all political stripes can get behind: paint the black roofs white.
Painting black tar roofs with a white, solar-reflective coating is a low cost, quick and tangible way to reduce the risk of power grid ‘brown-outs’, save millions of dollars in energy costs, and curb climate change. The statistics are as simple as they are staggering: A roof covered with solar-reflective white paint reflects up to 90% of sunlight as opposed to the 20% reflected by a traditional black roof. On a 90°F day, a black roof can be up to 180°F. That heat has a major impact on interior building temperature, potentially heating your room to between 115 – 125°F. A white roof stays a cool 100°F. Plus the inside of the building stays cooler than the air outdoors, around 80°F in this example, reducing cooling costs.
White roofs also reduce the “urban heat island” effect in which temperatures rise in dense urban areas because of the proliferation of heat-radiating, black tar surfaces. For example, the Urban Heat Island effect causes New York City to be about 5 degrees warmer than surrounding suburbs and accounts for 5 to 10 percent of summer electricity use.
In New York City alone, 12% of all surfaces are rooftops. It’s estimated that implementing a white roof program in 11 metropolitan cities could save the United States 7 gigawatts in energy usage. That’s the equivalent of turning off 14 power plants, and a cost savings of $750 million per year.
Recently, former President Bill Clinton wrote in Newsweek, “Every black roof in New York should be white; every roof in Chicago should be white; every roof in Little Rock should be white. Every flat tar-surface roof anywhere! In most of these places you could recover the cost of the paint and the labor in a week.” The former president regularly touts the white roofs as one of those win-win scenarios that could also help create jobs and stimulate the economy.
The folks at White Roof Project agree. Last year, a progressive group of young people got together to found the project and get it going at the grassroots level. When 150 volunteers showed up to coat the historic Bowery Mission in New York City (our first project) it was a watershed moment. Volunteers saw that all it takes is a paint roller, some solar-reflective white coating and a little hard work to start curbing climate change. Since then we’ve been educating and activating our neighbors around the white roof movement that Bill Clinton has called on someone to build.
Well, there are some intelligent responses and some not so intelligent responses. But the most important thing to remember is that these hypotheses can all be very easily tested. (except for this malthusian stuff and the climate control on the trains. stay on topic. we’re talking about whether or not to paint a roof white to save on energy costs.) I am going to have mine painted white next week, so I’ll let you know if it helps.
Let them eat oil
By Erik Mielke, who is a partner at Namir Capital Management LLC, a New York-based investment management firm that invests in emerging markets. The opinions expressed are his own.
The winds of change are forcing fundamental political and economic shifts across the Arab world. But one area of economic reform is likely to be brought to a stop as regimes respond to popular protests with populist measures. These initiatives include extending and expanding the region’s massive energy-price subsidies. For the rest of the world, this matters tremendously. One additional barrel consumed in Tehran or Riyadh is effectively one less barrel for the export market, and that means higher global oil prices.
Fueled by petrodollars and subsidized oil, energy consumption has been rising rapidly throughout the region. In the 10-year period to 2009, oil consumption in Middle East and North Africa rose by 50%, or 2.7 million barrels per day, second only to China’s rate of growth. In the same period, the region’s oil production only rose by 2.5 million barrels per day. The net result was a decline in oil exports from the world’s key producers.
Current energy subsidies are huge. The International Energy Agency’s most recent estimate for global fossil-fuel subsidies was $312 billion in 2009. That number is likely significantly higher in 2010, as the market price for oil rose by nearly one-third, and will be even higher still in 2011 (at the recent peak in oil prices in 2008, global subsidies reached a staggering $558 billion). Iranian subsidies, alone, amounted to $66 billion in 2009, a budget-busting 20% of the country’s GDP, with Saudi Arabia and Russia in second and third place with $35 billion and $34 billion, respectively.
In an attempt to placate protestors, regimes across the region have now increased these handouts and subsidies. Most of the initiatives have a one-year window, but will likely remain in place for much longer in some countries.
In Kuwait, the government announced in January a 1,000 dinar (approximately $3,600) cash windfall to each citizen and free food staples until March 2013 (these measures do not apply to the foreign workers who make up two-thirds of the population). Similar measures have been introduced in Bahrain, Oman and Saudi Arabia in the last two months.
California voters back weakened climate law
-The opinions are the author’s own-
California voters on Tuesday rejected a measure to suspend the state’s innovative climate change law. But the state’s emission trading scheme has been substantially diluted to buy off opposition from energy-intensive industries and allay fears about job losses.
If it is true that “as California goes, so goes the nation”, the past 10 days have confirmed the lack of political support for tough emissions curbs.
The survival of California’s cap-and-trade scheme has kept alive hopes for enacting a patchwork of state and regional schemes in the absence of a federal program. Supporters hope establishing even a diluted system will lay the groundwork for a program that can be toughened as the economy improves.
But the state government’s last-minute decision to give away most emissions allowances rather than auction them suggests voters and politicians are not ready to embrace the steep increase in energy prices needed to decarbonize the economy.
“NO” ON 23 Proposition 23 would have suspended the 2006 Global Warming Solutions Act (AB 32) until the state unemployment rate fell below 5.5 percent for four consecutive quarters. Proposition 23 would have effectively killed the law because unemployment is currently over 12 percent and has only rarely dipped below 5.5 percent in the last three decades.
Voters rejected it by a wide margin following a heavily funded campaign pitting clean technology companies, environmentalists and moderate lawmakers against parts of the oil refining sector. With 92 percent of precincts reporting, “No” votes led “Yes” votes by 4.2 million to 2.6 million (61 percent to 39 percent), according to the Los Angeles Times.
DaBear is wrong as usual, its the republicans and the Chamber of Commerce that heavily supports off shoring our good paying middle class jobs, the republicans killed any legislation that punishes companies for doing so.For some bizarre reason they think the minimum wage workers that remain can sustain our government and pay off the national debt. Talk about a bunch of loons, and then they attempt to blame their evil ways on the democrats. Shame on you DaBear, get some education or shut up…
Bill Gates is optimistic about the future
The following is a post by Stephen Adler, editorial director of Thomson Reuters professional, that was taken from one of his blog posts at aif.thomsonreuters.com. Adler is a moderator at some of the panels at the Aspen Ideas Festival. Thomson Reuters is one of the underwriters of the event. The opinions expressed are Adler’s own.
Bill Gates, the former tech-nerd-genius, seems increasingly comfortable in his post-Microsoft role as philanthropist, humanist, and Big Thinker. Once awkward in public, he now speaks with warmth and authority about health policy, education, energy, and global innovation. His air of sincerity, hyperlinked to his extraordinary intellect, has turned him into a crowd favorite –- perhaps the crowd favorite –- at events such as the Aspen Ideas Festival.
In his hour onstage inside the giant Benedict Music Tent Thursday afternoon, before the largest audience I’ve seen at the Festival, Gates insisted he was optimistic about the future. He got a big laugh by adding the caveat that to stay optimistic you have to “avoid getting exposed to U.S. politics.” In particular, he cited enormous improvements in healthcare, education, and women’s rights over the past 50 years. The most startling statistic: Deaths of children under five declined globally from 20 million in 1960 to 8 million last year, mostly due to vaccines and better malaria prevention and treatment.
But Gates tempered his optimism with a catalog of obstacles to the kind of changes he seeks, especially in the U.S. In education, healthcare, and energy policy, we have created perverse incentives that lead us away from the results we all seem to want. We fight immigration, even though it brings us some of our best innovators and “lots of I.Q. points.” We refuse to measure teachers’ performance intelligently and encourage improvement, even though we understand that great teaching is the key to learning and achievement. We raise the cost of public university education in response to the financial crisis, even though our higher-education system is one of our nation’s greatest economic assets.
In health care, we spend more than other wealthy nations and get back so much less. This is mostly because we provide incentives to keep people sick so the medical system can keep treating and charging them, rather than shifting the incentives to keeping people well. In energy, we bemoan our dependence on foreign oil and our contribution to global warming while refusing to put an appropriate price on carbon use or invest enough in research on alternative sources.
Gates relies heavily on the business concept of “best practices” as a potential solution to many of these problems. Fund charter schools and other demonstration projects, as the Bill and Melinda Gates Foundation does, and the public school system will be pushed to start adopting the best practices that emerge. Observe health care systems that work well abroad, such as Germany’s, and follow their lead by encouraging a bigger role for general practitioners over specialists and committing to ”invest upfront” in keeping people healthy.
Gates speculated that part of our problem may be that, despite a lot of griping, we’re really “pretty content with the status quo” and thus don’t want to disrupt existing ways of doing things. This observation seemed to undercut his belief that “best practices,” once revealed, will spread and prevail. But give him this: He certainly puts his money, lots and lots of it, where his mouth is.
from The Great Debate UK:
Facebook group defends “harassed” BP
BP’s chief executive Tony Hayward branded “the most hated man in America” may be surprised to find himself cast in the role of victim by a growing clan of web-based supporters on Facebook.
One such group ‘Support BP’ calls itself the defender of an “undeservedly harassed institution” and seeks to show that the public opprobrium BP faces over its now 60-day-old Gulf of Mexico oil spill is not universal.
Members have been increasingly vocal since a succession of strong rebukes of BP by U.S. President Obama and lawmakers at Thursday’s congressional hearing, which they are calling a “lynch mob”.
The outburst of sympathy follows an apology to Hayward from Texas Republican Representative Joe Barton on Thursday, later withdrawn, for having to agree to a deal with President Obama to set up a $20 billion fund for Gulf claim damages.
Some of the Facebook posts echoed this same spirit of regret: “My apologies as an American to Tony Hayward for the rude and insulting conduct as well as the rush to judgement by U.S. politicians on 16/7,” wrote George Gray, 50, from Pennsylvania, referring to Thursday’s hearing.
The bulk of the group’s posts are written by Americans.
Don’t bank on return of backwardation
Many energy analysts are predicting the crude market will move into backwardation before the end of the year.
Increasing demand and rising refinery runs will, in their view, reverse the unusual build up of inventories around the NYMEX delivery point at Cushing, and the market should revert to a more normal term structure.
The extreme contango visible at the front end of the NYMEX futures curve in the last seven weeks is certainly evidence of a “dislocation” caused by congestion around the delivery point. Front-month NYMEX futures have been trading at abnormally large discounts not only to second- and third-month NYMEX futures but also to Brent and other spot crudes such as Tapis.
Recent upticks in refinery runs, coupled with the forthcoming driving season, and continued economic recovery, have the potential to tighten the markets for crude oil and refined products over the summer. The question is whether this will simply narrow the contango from its current extreme level or push the market level or even into a backwardation. Recent experience suggests the contango is set to narrow, but will not disappear entirely. Contango, not backwardation, is the “new normal” in oil markets.
STRUCTURAL SHIFT Before 2005, WTI crude prices were more often in backwardation than contango. Backwardations were both larger and more frequent than contango (Charts 1-4). (1) http://graphics.thomsonreuters.com/ce/CL-STRUC-1.pdf
(2) http://graphics.thomsonreuters.com/ce/CL-STRUC-2.pdf
(3) http://graphics.thomsonreuters.com/ce/CL-STRUC-3.pdf
Sustainable oil price is $70-90: ESAI
(ESAI, Energy Security Analysis Inc, is a Massachusetts-based energy consultancy. The opinions expressed here are those of ESAI.)
The crisis is over, economies all over the world are recovering, record unemployment is slowly subsiding, and oil demand is growing. The logical question now is where will oil prices go from here? The question is not what the price of oil should be, as discussed at last month’s International Energy Forum. Likewise, it is not what is the equilibrium price.
Equilibrium price is a concept, offered by classical economists, which asserts that there is a price at which supply and demand balance. Price behavior, especially in recent years, has proven that this is an overly simplistic and unworkable concept for the oil market. There is never a point in the global oil market when supply equals demand, and thus there is no such thing as an equilibrium price. The right question is what is the fundamentally sustainable price?
The distinction between equilibrium and sustainability is important.
Equilibrium implies perfection and stability, ideas that are not endemic to the modern global oil market. Sustainability is a created word from the environment community that implies the ability to maintain or endure. Whereas equilibrium suggests certainty, sustainability suggests survival amidst uncertainty.
The difference between a market that is perfect and stable and one that endures has implications for forecasting. In short, it is foolhardy to try to project an equilibrium price, but identifying a fundamentally sustainable price range is a useful endeavor.
So, in answer to the question, what is the fundamentally sustainable price, the answer is not a number. It is a price range within which prices are likely to move for some time based on expected overarching supply/demand fundamentals.
Oil at any price is not sustainable. Neither is coal. The threat that fossil fuels present to the environment is staggering. Not only do they contribute to global warming but the process of extraction and use can cause catastrophic destruction. Let us not forget the Exxon Valdez, Kingston Tennessee fly ash spill and the current BP Gulf disaster.
Obama, politics and nuclear waste
-Bernd Debusmann is a Reuters columnist. The opinions expressed are his own-
The project involved more than 2,500 scientists. It cost $ 10.5 billion between 1983 and 2009 and it included one of the most bizarre scientific tasks of all time: evaluate whether nuclear waste stored deep inside a Nevada desert mountain would be safe a million years into the future.
That was the safety standard set in September, 2008, by the Environmental Protection Agency (EPA) as a condition for allowing nuclear waste to be stored deep in the belly of the Yucca Mountain, 95 miles (155 km) from Las Vegas, long the subject of political debate and a fine example of nimbyism (not in my backyard).
The vastly complex computer models and simulations experts launched to figure out whether Yucca Mountain would be a safe environment in the year 1,000,000 and beyond ended before there was a scientific conclusion.
President Barack Obama has pulled the plug on the entire Yucca Mountain enterprise, million-year safety study and all, by writing it out of his financial year 2011 budget, which begins in October.
Something has to be done with this Nuclear waste. I firmly believe that The Yucca Mountain project has to be commissioned. Not a lot of people out there. Plus, I’m pretty sure we have the technology to ensure nuclear waste’s safety.
Fossil fuels are going to run out soon. The time, wherein nuclear energy becomes our major source of energy, will surely come. Nuclear energy will expand, and we need Yucca Mountain to accommodate its waste.
Brasilia is the power it is today because of Lula’s enlightened leadership. Before Lula its currency regularly crashed, and there was zero safety net for the poor. Today, while far from perfect, there is great hope, the poor are getting some help, and the country is in the best financial condition it has ever seen. We need to understand how intervening to help the general populace, while also practicing financial rectitude can transform a country in a few short years, as it did, magnificently, in Brasil. Instead, we seem to try and follow the neo-con models of Chile and Singapore, where you get either quasi-dictatorship or outright repression. The future is Sweden, Germany and Norway–and Brasil, if it continues on the path of social democracy, looks like it will get there, too. They are the countries whose model works and whose people have the best chance at a healthy, dynamic life–and, neo-con propaganda to the contrary, the best chance for a stable financial future.