Opinion

The Great Debate

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.”

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.

Painting Bill Clinton’s “white roofs” into reality

By Juan Carlos Pineiro Escoriaza
The opnions expressed are his own. White Roofs Project volunteers paint the roof of the Bowery Mission in New York City. Photo courtesy of David Epstein.

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.

Let them eat oil

OIL-BIROL/INDONESIA/

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.

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.

Bill Gates is optimistic about the future

USA/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.

from The Great Debate UK:

Facebook group defends “harassed” BP

OIL-SPILL/

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”.

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.

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?

Obama, politics and nuclear waste

yucca

-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.

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