A man wearing a T-shirt bearing a flag of the Emirate of Cyrenaica (C) attends a protest demanding federal governance and a branch of the National Oil Corporation to be set up in the country's second-largest city, in Benghazi Monday. A variety of factors are combining to keep investors away from Libyan oil, according to Consumer Energy Report. (Esam Al-Fetori/Reuters)
Libya’s political unrest stifles oil investment
Talks this week involving Libyan leaders and oil refining corporations that will see contracts worth about $50 billion given out in order to grow that country’s fossil fuel sector are set to begin with a whimper, as interest in Libya’s oil continues to decline among wary investors.
More than a year following the ouster of Muammar Gaddafi as leader of Libya, oil production has returned to pre-civil war levels, but a variety of factors are combining to keep investors away from the OPEC nation, a fact that is only contributing to the continued unrest of the country’s people.
Exemplified by the many protests and strikes that plague oil extraction and refineries around the region, the military air that remains in Libya can be found in the attitudes of many of its people, most of whom are still recovering from their own personal losses during the country’s civil war in 2011. (Read More: How National Security Planners Should View America’s Energy Boom)
All of that unrest has translated into investors who are very reluctant to bet their funds on the nation’s chances at sustaining and growing its oil production market, leaving the future of Libya’s oil up in the air. ( Continue… )
A KIA Ray EV electric car is charged during the media preview of the 10th China International Automobile Exhibition in Guangzhou in this November 2012 file photo. Electric is just a better platform for vehicles, once the technology is perfected, Dikeman writes. (Tyrone Siu/Reuters/File)
Electric cars: niche technology or the auto industry's future?
Are electric cars a Niche? Or just coming into their own? I’ve been asked that question twice now in the last week in various forms, so thought I’d blog my answer.
Electric Drive Transportation Association has the total number of US sales at just under 400,000 this year, or 3.3% market share including hybrids. Hybrids they have up 33% YTD compared to the whole of last year’s sales, and EVs/PHEVs up 375%. But the EVs still make up only 10% of that total number.
In June The Street did a great article on EV sales forecasting line by line an estimate of 62,000 for the year, already at 18,000 at that point.
And while sales have been sluggish, they have been creeping up, with more and more and cheaper and better versions coming out in 2013 and 2014.
The price gap, somewhere between $8K and $25K, is closing.
Nissan just announced a cheaper and longer range Leaf version in Japan (yes it can be done, why didn’t you have the guts to do this last year Nissan?), Tesla’s 160-300 mi range Model S just started shipping and garnered the 2013 Motor Trend Car of the Year Award. ( Continue… )
In this July 2011 file photo, Ben Shaw hangs from an oil derrick outside of Williston, N.D. Simple logic and prudent risk management suggests that we should already be making a rapid transition to renewable energy, Cobb writes. (Gregory Bull/AP/File)
How the myth of oil abundance impedes progress on climate change
The great fear among those working to address climate change is that the seemingly vast resources of fossil fuels waiting to be burned will send the world hurtling toward certain catastrophe. By invoking fossil fuel abundance, climate activists believe that their argument for a rapid transition to alternative energy is made more persuasive. But, it is poor strategy to reinforce the myth of fossil fuel abundance when doing so actually makes many people less open to such an argument. And, as it turns out, the abundance argument is also contrary to the available data, logic and prudent risk management principles.
Here is what I mean. First, despite all the hype about marginal gains in U.S. oil production, world oil production has been on a plateau since 2005. Small gains in U.S. production have been offset by declining production in the rest of the world. The news for coal production is only slightly less discouraging as one study suggests that the rate of coal production worldwide could peak as early as 2025. In the United States, while coal tonnage has remained essentially flat from 1998 through 2011, energy content has actually declined. Has the available energy from U.S. coal production already peaked? We can't be sure. But the trend suggests caution. One recent study even concluded that world coal production from existing fields may have peaked last year. But, even if the authors are 10 years early, the prospects for creating a coal economy to follow the oil one are poor at best.
And finally, natural gas--much touted as a less polluting "bridge fuel" to a renewable energy future--may not be so plentiful as we are led to believe. Natural gas derived from deep shale deposits was first portrayed as so abundant that wells could simply be drilled anywhere in the vast shale basins of North America. But the record of drilling to date suggests that such deposits will yield far less than anticipated and be far more costly to develop.
Simple logic and prudent risk management suggests that we should already be making a rapid transition to renewable energy. No one--not the fossil fuel industry, not government, not private forecasters--can know for certain what our future supplies of fossil fuels will be. If those supplies are constrained as current trends and data suggest, then we will be forced to make an energy transition whether we want to or not. If fossil fuels turn out to be more abundant than current trends portend and we make a rapid transition to renewable energy starting now, the worst that can happen is that we will have completed that transition a little earlier than was absolutely necessary. But, if fossil fuel supplies begin to decline in the near future and we've made little additional progress on deploying new energy sources, we will surely be in for considerable economic and social pain, pain that might so severe as to challenge the very stability of our global system. That's how central fossil fuel energy is to our society. ( Continue… )
In this July 2011 file photo, Austin Mitchell, left, and Ryan Lehto, work on an oil derrick outside of Williston, N.D. The security and foreign policy consequences of the US oil boom are starting to take shape, Rogers writes. (Gregory Bull/AP/File)
US energy: What's oil production got to do with national security?
The American energy revolution is starting to come into focus. Technological breakthroughs in shale gas and tight oil production are poised to make the United States — not Saudi Arabia — the world’s largest producer of crude oil as early as the end of the decade, according to the latest World Energy Outlook published by the International Energy Agency (IEA). The IEA’s analysis found that the United States could even be a net exporter of oil by 2035, a position the United States has not been in since the 1940s, when it had one of the world’s few developed oil industries.
At the same time, U.S. demand for crude oil is in decline and its crude oil imports are shrinking. Higher fuel efficiency standards in U.S. vehicles have contributed largely to depressed demand, with U.S. oil imports falling from 56 percent of total consumption to 46 percent between 2008 and the end of 2011, according to the U.S. Energy Information Agency. By 2035, the United States could be importing less than 2 million barrels a day, down from more than 8 million barrels today, according to the IEA. (Read More: Top 15 Sources for U.S. Crude Oil Imports in 2011)
The changing energy landscape is sure to pay dividends to the American economy. Increased domestic oil production could make a dent in the $460 billion a year U.S. consumers spend on foreign oil, shrinking the current account deficit and strengthening the dollar. At the same time, a glut in shale gas has contributed to cheap natural gas prices that are lowering energy bills for American businesses. Cheap electricity prices and more affordable petrochemicals that are derived from natural gas are together paving the way for re-shoring of some manufacturing jobs that moved abroad when trends were reversed.
But unlike the economic opportunities that are already manifesting, not much has been said yet about the national security and foreign policy implications of the American energy boom. ( Continue… )
In this August 2007 file photo, the sun sets behind an oil refinery on Rosedale Highway, in Bakersfield, Calif. (Casey Christie/The Bakersfield Californian/AP/File)
Did oil decide the last three American elections?
Was the most recent American election outcome determined by the presidential debates, changing demographics, voter views on issues, Hurricane Sandy (and the president's reaction to it) or voter turnout? Probably all of these contributed to the result. Energy was actually one of the issues discussed during the campaign, particularly domestic production of oil and natural gas. But, it's not the debate over energy issues that interests me here so much as the price and supply of oil and their effects on voter attitudes.
Let's go back to the summer of 2008. The price of oil had been climbing all year reaching its highest level ever (even adjusted for inflation) at $147.27 a barrel on July 11. From there the price began to decline. Though few people knew it, an economy beleaguered by years of rising oil prices was already in recession. The financial markets eventually crashed that fall. And, the worst slump in the world economy since the Great Depression followed.
The bursting of the U.S. real estate bubble in the previous year was frequently cited as the cause of the crash. And, there is little doubt that stresses in the financial industry combined with the real estate collapse to create a financial meltdown. But, the work of economist James Hamilton suggests that high oil prices were also a significant factor in precipitating the bust and therefore the economic pain felt by American voters. All of this implies that the solid victory of Democrats and Barack Obama in 2008 resulted at least in part from discontent among voters over high oil prices. The conclusion seemed obvious even then.
After dipping into the $30 range in late 2008, oil prices rebounded to around $80 by the beginning of 2010 and remained in the $70 to $80 range through election day that year. If we accept Hamilton's work, then high oil prices produced a significant drag on the economy and may have caused swing voters, frustrated by a slow economic recovery and high unemployment, to hand the party out of power a huge victory. They gave Republicans control of the U.S. House and of many additional governorships and state legislatures. ( Continue… )
Solar panels on the roof of the Palexpo Exhibition Center in Geneva, Switzerland are pictured in this October 2012 file photo. (Denis Balibouse/Reuters/File)
Clean energy's black swans
The phrase “Black Swan” was coined in the book of the same name by author Nassim Taleb to describe an event that is hugely important and influential that was not anticipated but yet in retrospect could have been.
September 11, 2001 is a classic example of a Black Swan. It was only a failure of imagination by most Americans (including myself) to never have contemplated beforehand the possibility of such a dreadful day. But, the terror attacks of that fateful day were pulled off with pitiful ease, without requiring any enabling technical or social developments. Upon reflection, we should have seen it coming. And, because it came, most countries around the world undertook a host of incredibly expensive actions. Everything changed on 9/11. The trajectory of human events was irrevocably and dramatically altered.
Of course, there have been many other Black Swans in recent history: the Pearl Harbor attacks, the unveiling of the atomic bomb, the launch of Sputnik, JFK’s assassination, and so on. Each was shocking, and changed the course of history.
These are all geopolitical examples, but there have been commercial examples as well. In the past 50 years, the way we live has been wholly altered by such inventions as the transistor, graphic user interfaces (GUIs), touchscreens, and the Internet. The way medicine is practiced has been overturned with the advent of medical imaging and non-invasive surgery, and the Genome project promises radical breakthroughs that we generally can’t foresee yet. ( Continue… )
Muhammed Oladineji, left, and Orlando Muentes with Wind Energy Services paint the leading edges of a wind turbine in Kodiak, Alaska, in this September 2012 file photo. With the uncertainties of power markets and transmission, doing green-field projects are getting tough, Williams said in an interview with Consumer Energy Report. (Marion Owen/Kodiak Daily Mirror/AP/File)
Wind power: an interview with president of Shell Wind
The Holistic Energy Company
I had the opportunity to spend some quality time with Dick Williams, the President of Shell Wind, discussing a range of topics including the current state of the wind industry and how Shell is positioning itself to be the energy company of the future.
Dick has been a longtime employee of Shell, and has led the wind business for more than five years. He has also joined on as a member of the executive committee for Total Energy USA, which is a new conference being held next week (November 27-29, 2012) in Houston with a goal of nothing less than tying the whole of the energy industry together in a single event.
We started out by talking about the Total Energy USA conference, and my opening question was why get involved in a new energy conference (it’s not as though there aren’t countless other energy events to spend time with). Dick said that the draw to the event was the scope and location.
Houston is the oil and gas capital of the world but there is so much more here. And if you look at the future of the industry – we all believe that at some point fossil fuels wind down. The question is just when: Is it now, 50 years, 100 years 200 years. It is going to take this energy mix going forward and why can’t Houston become the capital of that energy world – not just oil and gas. ( Continue… )
This November 2012 file photo shows wind turbines at the National Wind Technology Center, run by the U.S. Department of Energy, outside Boulder, Colo. Without financing strategies there will be a period of time where virtually no wind projects will be financed or built in the US, Hinckley writes. (Brennan Linsley/AP/File )
Five ways wind power can survive without tax credit extension
Recently, I explained why Obama winning re-election is not necessarily an automatic savior for the wind power industry. Basically, an extension of the Production Tax Credit (PTC) is not a given (although I give it better than even odds), and the current extension being pushed by the American Wind Energy Association would act as little more than a band aid.
While an extension of the tax credits is vital to a robust wind industry in the U.S., developers must start to consider strategic options for financing projects in a world without the PTC. Even with financing innovations, successfully putting together wind deals will be very difficult, and without these financing strategies there will be a period of time where virtually no wind projects will be financed or built in the U.S. (Read More: 5 Reasons Why Good Energy Projects Don’t Get Financed)
Many projects simply won’t meet the fundamental hurdle of profitability without the PTC, especially in a market where natural gas fired electricity is so cheap. So what can the wind industry depend on, and what strategies can they employ in the event that the PTC expires?
Cheap Money
The cost to use money is at historic lows. This low cost of capital means that for very good projects even a narrow spread between the cost of producing electricity and the price to sell electricity may create enough return to attract an investor. ( Continue… )
This photo, taken Nov. 2 by Prof. Alexis Kwasinski at the University of Texas at Austin, shows portions missing from a rooftop solar array in Gloucester City, N.J., days after hurricane Sandy swept through. It appears most solar and wind systems were not seriously damaged by the superstorm. (Courtesy of Alexis Kwasinski)
Are renewables stormproof? Hurricane Sandy tests solar, wind.
Renewable energy may one day offer consumers relief from the widespread blackouts that have become a predictable by-product of major storms. The flexibility of wind and solar, combined with the decentralization of a microgrid, offer a degree of resilience not found in the top-down, traditional generation system, clean energy experts say.
Efforts are already underway to harness solar’s unique characteristics to help victims of hurricane Sandy, which devastated large swaths of New Jersey and New York and left millions in the dark.
On the Rockaway Peninsula in Long Island, the Solar Sandy Project is supplying mobile solar generators to an area where the Long Island Power Authority has struggled to restore power. The generators do not need refueling and can be used to charge phones, heat food, and run other critical equipment, the organizers say.
Still, most solar and wind resources are reliant on the larger power grid, making them just as vulnerable to failure from extreme weather as traditional systems. And wind and solar, by their very nature, are directly exposed to the elements, unlike traditional power systems, which can be enclosed in buildings or buried underground. Tested by hurricane Sandy late last month, most renewable energy installations in New Jersey and New York seemed to escape major damage. ( Continue… )
Children cover their faces against swirling dust storms while pumping water in Springfield, Colo., in 1935. Thousands of acres of wind-whipped eroded farmland turned the region into the Dust Bowl during the decade, a disaster made worse because of human practices. (Associated Press/File)
Dust Bowl lesson: We can heal ecological disaster
Almost three weeks to the day after hurricane Sandy hit the East Coast of the United States, PBS aired the first part of Ken Burns's new two-part documentary "The Dust Bowl."
On the face of it, the two disasters have little in common. One is wet; the other is dry. They're eight decades apart. The superstorm knocked out power for weeks; the Dust Bowl knocked out livelihoods over a decade and caused massive migrations.
The troubling link is that the Dust Bowl's dryness was made worse by human practices and Sandy's flooding was made worse by rising oceans, probably linked to human-induced climate change.
One can take that two ways. Pessimists can say it's a bad omen that more destructive coastal storms are on the way. Optimists can point to the eventual public response to the Dust Bowl: a dramatic change in agricultural practices and government programs that have mitigated soil erosion in the southern Great Plains.
With government encouragement, farmers began to diversify and rotate their crops to keep more moisture in the soil, use new tilling systems that leaves more crop residue on the surface, and stop overgrazing the land. Later, they installed irrigation systems. If farmers and politicians could come up with solutions to a great disaster like the Dust Bowl, can their descendants come up with reasonable solutions to warming?
"The Dust Bowl is the greatest man-made – man-made – ecological disaster in the history of the United States and perhaps the world," says Mr. Burns in an interview with James West of The Climate Desk, a collaboration between The Atlantic, Mother Jones, Slate, and other media outlets. "The horrible positive side of Sandy , if there could be the silver lining, is ... that people have come to understand that you can't have two 100-year storms in two years. You've got to suddenly wake up and say: 'My goodness, what can we do together?' And a lot of it goes back and hearkens to the lessons of the Dust Bowl about planning for the long term."
The progress in Great Plains agriculture comes with a caveat. Although farmers and ranchers have reduced erosion, they have become increasingly reliant on irrigation, which despite various improvements is drying out ground-water aquifers. So their future is not assured.
Still, 70 years after the last storms of the Dust Bowl fizzled away, the US has managed to repair what seemed an overwhelming environmental disaster at the time. Burns's new documentary is a reminder that the nation has the capacity to take action when disaster looms large.
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