September 26, 2008

Gas pains

As part of the 'Ike Tours Texas' fallout, refiners on the Gulf are still shut down which is causing spot shortages in Atlanta (which sucks anyway) and in Tennessee. And, apparently, Dallas. Here's what caught my eye (and keep in mind the effected refiners account for 20% of US capacity)

U.S. crude oil refinery inputs averaged 11.5 million barrels per day during the week ending September 19, down more than 1.7 million barrels per day from the previous week's average. Refineries operated at 66.7 percent of their operable capacity last week. Gasoline production fell last week, averaging about 8.0 million barrels per day. Distillate fuel production decreased last week, averaging nearly 3.3 million barrels per day. (EIA)

So, refineries effected by Ike account for 20% of US refining capacity and we're down to 66%??!?! That seems strange at a time where wholesale gasoline recently spiked to $5/gal.

Then I saw this and start to think maybe there is something going on.

SO, we have a massive crude and gasoline supply disruption as a result of a hurricane. Combine that with newfound regulatory zeal from governments around the world, all of whom are looking to strangle speculation and suddenly refiners have decided to artificially (for 'repairs') reduce the gasoline available in the market?

Methinks this is a pretty clear cut case of supply manipulation. They can't play with the price since the speculators (those still left in the business now that LEH is gone and MS and GS are under scrutiny) have had to cut back. So they energy companies themselves have decided to create an artificial supply constraint by shutting in capacity unaffected by Ike.

Ain't it nice that the oil companies care so much about their customers?

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September 05, 2008

Where water burns

Man, this sounds like a damn good reason to think about relocating from North Texas.

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July 01, 2008

Eye of Newt (and John Sharp, too)

This was forwarded to me Monday night...

Although my Winning the Future message has always been directed at all Americans, whether they consider themselves Republicans, Democrats, or independents, today I am directing my message specifically to Democrats. And my message is this:

The American people have spoken. Are your leaders listening?
Over 1.1 Million Americans Call on Congress to "Drill Here, Drill Now"

We really had no idea, just 35 days ago when we first posted the "Drill Here, Drill Now, Pay Less" petition here, that we would provide the spark that has ignited a fire among frustrated, struggling Americans.

So, Newt, what you're saying is that .03% of the American public is as dumb as you are when it comes to energy supply and energy security (two very separate issues)? I'll buy that. Hell, it appears you've even managed to suck that assweevil John Sharp into your stupidity...

Secondly, cut the capital gains tax from 15 percent to 7.5 percent for investments in new domestic energy. History has shown that capital gains cuts produce more revenue for government, not less. These two actions would unleash the economic power of America towards solving our energy crisis by allowing Americans to do what they do best ... produce. This country has never conserved its way to greatness, but many times we have produced our way to greatness.

A couple of things here, John. First, cuts in cap gains ALWAYS normalize. See, it's called 'tax planning' and people do it all the time. Fund managers, for example, will sell badly performing equities leading up to the end of the year, only to repurchase them in January. Why? Because they get to book a loss on the stock, which are then used to offset gains on other sales. Then they get to rebuy at, if they're lucky, a slightly lower price than they got on the sale, covering their frictional costs. THE SAME THING APPLIES TO CAPITAL GAINS. If I'm sitting on a massive capital gain, and legislation changes the rate at a known date in the future to a lower rate than current, I'm going to put off selling that investment until the rate goes down. Then, I'm going to sell. That's why it looks like tax cuts pay for themselves. As long as you don't think too much about it, which John has evidently not done. Next he'll be telling us that deficits don't matter.

Now, on to conservation... we actually did that. In the 1980's. Consumption went down dramatically as people started driving more energy efficient cars. That coupled with increased production led to oil at $10/bbl. However, the overwhelming factor was the drop in demand. That's in process right now.

Look, I'm going to let y'all in on a little secret. Newt's playing politics and quite stupidly as just about everyone knows that it's a lie that there is enough oil on the continental shelf and in ANWR to satiate our demand for oil.

The world’s energy needs are so great that it’s going to take an immediate production increase roughly equal to the output of Saudi Arabia, for there to be significant supply side downward pressure on oil prices. When thinking about U.S. based energy projects, the question offered is: “on aggregate are these projects capable of rivaling the present day output of the Saudis?” If the answer is no then we have to question those who claim that a particular energy project is going to make gas/oil cheaper. It’s probably better to view the projects as a possible way to reduce some of our energy dependence, as opposed to being a solution to the larger energy problem.

The Saudi's produce 12 million bbl/d. ANWR can't fill that. OCS can't fill that. Shale can't fill that. Neither can oil sands. Combined they STILL aren't close and the oil sands, well, they have their own unique problem of natural gas AND there's a possible political consideration. Remember, we've been through this already. One last point for the 'Drill Everywhere' crowd... the capacity TO DRILL is too low to do anything for five years. Which puts most of the OCS output MORE than a decade away.

So what about Sharp's brill idea about tax incentives for solar, wind, etc? Those are all great, but they can't run a car. Unless we have battery technology far in advance of what we have available now. It's coming, but it's a decade away barring some miracle. Plus, most of these renewables already get some pretty nice tax breaks. Tax breaks aren't the issue. Sharp's an idiot for thinking it is when gas fired power prices are approaching those of more advanced PV solar. Sharp's the perfect kind of old school Democrat, too stupid to know what the hell he's talking about and willing to give away the farm when it's completely unnecessary. I'd love to play no limit with you sometime, John. It'll be fun selling your house after I win it.

Some of you budding candidates out there may be thinking about joining with John on this. Don't. Just keep your mouths shut or we'll excoriate you in the same manner. Let the Republicans be the ones who open their mouths and let the stupid spill out.

Here's where all this is heading... within 5 years gasoline is going to be less than $1.50/ gal. It'll probably happen sooner, but I'll run it out 5 years because right now politics is overriding good decision making. I will throw John a bone by letting him know that the market WILL make the decision. See, I know something that John apparently doesn't : Humans don't like restrictions on their growth. When there is a restriction, we find a way around it. You could say we're large like that. We'll do it this time as well, because speculators have rather firmly planted the seeds for their own destruction.

At $140 a barrel, there’s as much incentive as anyone needs to find new sources of oil (such as the tar sands, and even oil shale), and more importantly, substitutes. At $10 a barrel, no one’s going to take the time and trouble to find a way to make an electric car viable. At over $100 a barrel, it’s a Nobel prize winner.

That's what'll create the solution. And no, it won't be shale oil. It'll probably be something like this. Or maybe something better. I know it'll happen because Malthus was wrong and his followers today are still wrong.

One thing's for sure... it won't be drilling, no matter how much Newt and John may wish for it. If it was, you'd already see some new supply starting to hit. It's not there. Speculation has driven prices and as a result, we're now destroying demand as people change their lifestyles. However, it's only part of the problem since the increased price has not sparked additional supply. Which means we're producing at marginal max capacity.

Of course,with Gwahar producing a 28% water cut, THAT data point should be obvious to anyone with a brain. And no, I don't include those 'Drill Everywhere' people in that group. They're hellbent on politics over substance. For them I have nothing but scorn.

It would be nice, John, if rather than parrot R bullshit, you'd start focusing on some real issues. Better yet, just keep your mouth shut. We'll call you when we need you.

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June 27, 2008

Japan and US agree to accelerate global warming

Oh, shit... this has 'bad idea' written all over it.

AOMORI, Japan (AFP) — Japan and the United States on Saturday agreed to cooperate on research into methane hydrate, known as the "ice that burns" which is seen as a promising future energy source.

Energy ministers from the world's two largest economies signed the cooperation agreement at a meeting in northern Japan that comes amid mounting concern about record-high oil prices.

Methane hydrate, or methane gas trapped in frozen water, looks like ice but burns. Its deposits can be found in permafrost regions and seabeds.

Under the three-year cooperation agreement, Japan hopes to conduct an on-shore production test in Alaska.

The deal was signed between Japan's Economy, Trade and Industry Minister Akira Amari and US Secretary of Energy Samuel Bodman.

The Japanese ministry and US department plan "extensive research with respect to methane hydrate exploration and resource assessment," a statement announcing the bilateral cooperation said.

"To establish technology for commercial production, we have to conduct test-production for several months," a Japanese ministry official said.

Yeah. There are so many problems with this, it's not even funny. For one thing, this stuff will be extremely difficult to bring up. For another, it's methane, a much nastier greenhouse gas than CO2. All that carbon that was in the atmosphere millions of years ago? This is where a lot of it is stored. And it's comparatively easy to destablize. In fact, temperature changes in the oceans RIGHT NOW may soon cause deposits of the stuff to flash over from their frozen form to gas. And then they'll bubble up, which will make the current carbon load in the atmosphere look like a non-issue.

Oh, and most of the stuff is in international waters. It'll be a lot of fun going to war over this crap.

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June 26, 2008

I hate being right...

...though, I must admit, when it comes to energy policy and what we need to do (and need not to do), it's happening pretty damn often.

If Congress were to open up the Arctic National Wildlife Refuge to drilling, crude oil prices would probably drop by an average of only 75 cents a barrel, according to Department of Energy projections issued Thursday.

The report, which was requested in December by Sen. Ted Stevens, R-Alaska, found that oil production in the refuge "is not projected to have a large impact on world oil prices."

At this point, I'd like to invite the Republicans in Congress (as well as Newt Gingrich and Rick Perry) to drink a nice tall glass of shut the fuck up. Oh, and media... if you'd like to, you know, REPORT THIS, that would be great. I love McClatchy but I'd like to see this elsewhere.

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June 24, 2008

Winning the stupid olympics, pt 3

REALLY. That's enough with the stupid, Republicans. I'm so sick of hearing all the lies coming from y'all. Well, it's either lying or just rank stupidity.

Maybe I should call John McCain's spokespuppy and find out which.

Hava Goodun!

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June 23, 2008

Winning the stupid olympics, pt 2

Here's the WaPo. Click on it and scroll down the second story (the one under the thing about the douchebag lobbyist).

Congress has tied itself in knots over whether to permit more domestic drilling for oil and gas. But Gingrich, through his organization, American Solutions for Winning the Future, has come up with a phrase that has inspired a torrent of support via the Internet.

In just three weeks, more than 750,000 people have signed on to a cyber-petition that endorses the phrase "Drill Here, Drill Now, Pay Less." In a single day last week, nearly 100,000 people endorsed the simple-to-understand concept.

"It's far exceeded all of our expectations," said Dan Kotman, spokesman for the group.

Really, Newt? I always thought of you as the smart Republican. Exactly where would you like to drill where you can bring up 2-3 mn bbl per day?

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June 14, 2008

OMG, the R word!

No, not 'recession'.


RATIONING

Gasoline rationing and small car loan subsidies are measures intended to bring oil consumption for private transportation under predictable control and to encourage drivers to adopt small private vehicles. Gasoline rationing has been viewed as a last resort, but it is an essential step toward reducing oil consumption in a planned way while giving everyone an equal shot at gasoline regardless of her or his income.

A planned, progressive cutback in U.S. petroleum consumption through gasoline rationing could bring an immediate moderation in world oil prices.

Gasoline rationing would also be a major step in reducing exhaust gases that are causing global warming.

Two years ago Harvard economist Martin Feldstein proposed gasoline rationing as an equitable way to cut gasoline consumption. His plan is similar to that of the Standby Gasoline Rationing Plan drafted by the U.S. Department of Energy exactly 28 years ago, in June 1980, to address the threat of oil shortages. Putting gasoline rationing into effect, the plan says, would be costly and complex, but "options have been incorporated into the plan to provide, to the maximum extent practical, equity among gasoline users throughout the nation and to provide flexibility to minimize disparities among states."

This is almost as stupid as that assweavil McCain's dipshit idea to drop the gas tax, because it's worked everytime...

Instead, Douglas Holtz-Eakin, McCain's chief economic adviser, told McClatchy that a "holiday from the 18.4 cent per gallon federal gasoline tax has lowered prices every time it's been tried "and it is felt all through the economy."

It works, as long as you're goal is drive oil company profits up and create a black market with it's requisite crime. In point of fact, Dougie, it's never worked. Some economics advisor YOU turned out to be.

But, boys and girls, before you lose all hope and decide the world has gone full tilt crazy, there's a glimmer of hope and reason.

Perhaps the quickest action, the experts said, would be ordering curbs on financial speculation. Financial industry heavyweights have acknowledged in recent testimony before Congress that such speculation is driving oil prices higher.

Pension funds, endowments and other big institutional investors are pumping big money into index funds linked to commodities, including oil, driving up demand — and prices. The popular Goldman Sachs Commodities Index attracted $260 billion in investment last year, compared to $13 billion five years earlier.

Complicating any effort to harness that, about 30 percent of the trading in crude oil is done in "dark areas" — markets in London and Dubai — that aren't regulated by the U.S. Commodity Futures Trading Commission (CFTC).

President Bush could order the CFTC to regulate U.S. investments in those markets with a snap of his fingers, said Michael Greenberger, a law professor at the University of Maryland and a former director of trading for the CFTC.

"Essentially this could be ended this afternoon if the Bush administration had the stomach to do it," he said. "Those abdications of responsibility and allowing these exchanges to trade in 'dark' markets ... provides an environment for speculators to thrive."

The CFTC is investigating the link between speculation and oil prices but hasn't scheduled any action.

And there you have it, take out the speculation and there's the end. I, personally, think it's much easier. Take up taxes on capital gains made in energy or energy related trading to 75% and watch as people stop dumping money into the commodities markets. But either way, really, would alleviate the situation rapidly.

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June 13, 2008

Oil at $250/bbl??!?!

So sayeth the Russian. However, don't count on it. We're already seeing demand destruction at this price point.

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June 11, 2008

OPEC ain't the problem

OK, here's the deal. There are a bunch of people (D and R) clamoring for an increase in supply from OPEC. Let me let you uneducated folks in on a little secret... they can't just increase the amount pumped.

Of course there is additional capacity. The Saudi's could, with some difficulty, increase production to 12 mn bbl/per day, possibly. However, that's going to do three things...

1) Damage the field for the long term, sacrificing future production
2) Have minimal impact on supply since demand will automatically rise
3) DO NOTHING FOR THE LONG TERM PRICE OF ENERGY

The additional capacity can't come from Mexico, either. Venezuela has some excess capacity, as does Nigeria and Iraq. ALL of these producers have internal issues preventing this from happening. The reality is that we're going to have to fix this ourselves. And we can't do it with coal.

Wait a second! Didn't we already talk about this? There IS a way to do it and moderate carbon in the atmosphere. The cool thing is that none of this is new... all we need is for Congress to act. I even know how to pay for it.

Finally, gas prices will come down as refiners continue to add cokers to their plants and expand heavy crude (both sweet and sour) capacity. This will allow them to process cheaper crudes into gasoline, lowering the price of the end product. It's a large reason why gas isn't at $5.00/gal even now as some facilities, most notably Valero refineries picked up from El Paso, are already set up to process heavy sour.

This is all short term stuff. The long term reality is that at current prices, biofuels are far more competitive. And a lot smarter.

For some real laughs, check out this over at the Statesman, specifically the comments. Pretty clear that Mass isn't a McBlogger reader.

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June 03, 2008

All roads lead to Alaska

Spencer Abraham is our former Secretary of Energy. While at the Department, Spencer spent a lot of time thinking about energy alternatives. A LOT of time which frankly would have been better spent drinking in a bar. I mean, really, he was sober while working and this is what he came up with...

I heard all this yesterday when Abraham was inexplicably interviewed by Bloomberg TV about the rise in energy prices. It would seem that the corpulent rat (not unlike Templeton from Charlotte's Web) has started his own energy 'advisory' firm, The Abraham Group LLC. Please feel free to click the link and let me know if you notice what I noticed.

Yeah, it's surprising that he'd have so many pictures of himself with... President Bush. I think he may have a crush on him. It's certain he knows more about sucking up to our retarded Commander in Chief than he does about rational energy policy and investment. And his number one, super brilliant idea for curing our current high energy prices is...drilling in Alaska.

And you already know what we think about that brill idea. Of course, it may explain his lack of strategic partners and clients. See, in the real world, you actually have to COMPETENT at your job. Not just be loyal to an asshole from Texas.

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June 02, 2008

...And sometimes, the press is REALLY stupid

Here's a dreadful piece of journalism from R. A. Dyer of the Fort Worth Star Telegram. He leaves out...

1) Deregulation has failed Texas consumers
2) The excuses, regarding fuel costs, are irrelevant. If the standards to market entry are set so low that retailers end up being financially unable to manage their businesses (and, you know, HEDGE THEIR RISK) then clearly there is something wrong.
3) This is related to excessive speculation in the energy market coupled with the decline in the dollar which is setting prices high for ALL natgas, even that produced domestically since we don't produce enough to meet domestic demand.
4) The cheapest, most dependable electricity in the state is in two markets, SA Metro and Austin Metro. Neither deregulated.
5) The price spikes are clearly indicative of market manipulation.

Dyer, if you're going to write about something at least learn about it.

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May 28, 2008

Good to see OUR politicos aren't the only stupid ones

Remember that dumbass idea to drop the gas tax? Remember how dumb we thought our politicos were for thinking up such a stupid idea? Remember when we longed for those intelligent and urbane European electeds who would never propose something so crass and stupid?

As it turns out, they're just as dumb. Or at least, French President Sarkozy is.

Pandering has now made the great leap over the Atlantic!

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May 25, 2008

Energy and Reality (Or, What to do about high gas prices)

With gas prices approaching or exceeding $4.00 all over the country, it's pretty obvious we're all in for some rough times. I know I've had to make sacrifices (moving from Grand Marnier to Cointreau) and I'm sure you've had to make adjustments as well. Like getting the kids to like cat food instead of Cheerios.

Politically, it's the Democrats year as long as gas stays above $3.00/gal. Actually, I think the pain threshold is probably around $2.50/gal. That being said, this isn't a post about high gas prices and hurray for Democrats in November. This is about what the hell we're going to do.

This is going to be a little different from my usual posts. This is policy and not terribly exciting. I'm going to break things down into two areas of focus... what to do in the short term and long term fixes. Obvs, this issue touches on a hundred issues and disciplines, so please bear with me. While it may not be readily apparent where I'm heading, I promise it'll all come together.


The Short Term Solution


People are hurting now and something has to be done. Sure, it's great to focus on CAFE standards and expanding public transportation. Both of those things have to be done, but before they'll start affecting things, gas will be $9.00/gal. Both of these take years to cycle through the economy.

What? You doubt me? Think about hybrids and diesels. Both are available now and have been for about 4-5 years. Still, they haven't made a dent in demand. Because people are pretty strapped right now and spending money on a car is, for many, impossible. That being said, what do we do?

Remember that thing about disparate ideas coming together? Here it is. Basically, in the energy markets right now there is a tremendous amount of money sloshing around due to lax policy from the Fed. That's creating inflationary pressures in various classes of investments which is especially evident in commodities. Low capital gains taxes are making it extremely easy for people to trade the market and constantly make profits. Who wouldn't like to be able to invest $1 mn and come away in 6 months or less with $10 mn? Oh, and pay practically nothing in tax?

Low capital gains and lax monetary policy are driving speculation in the energy markets. The only way to stop it is to tax the hell out of it and starve out the short term traders. That will deflate the bubble and take us down to around $95/bbl.

The second part, balancing the federal budget, will help to stabilize the dollar and lead to it's reappreciation. That should strip about $20-35 out of the price of oil, taking us down to a far more manageable $60-75/bbl. YES, it will mean raising taxes. Get used to it. We've been paying in the minimum for years and as a result our infrastructure is crumbling, our schools are deteriorating and our currency is in functional freefall. It's about time liberals AND conservatives come together and realize we need to make some investments in the future.

The next part is a little more tricky...

The Long Term Solution

We've now got oil down to more affordable levels and we didn't even have to go begging the Saudi's. So why isn't it back down in the $20's? Simple. There's still instability in many areas of the world where we get oil and demand is still high. That's the dirty little secret... we've apparently reached global peak and new discoveries aren't offsetting declines in major fields. In other words, while we're not running out of oil, we're running out of cheap, plentiful easily marketed oil. Which means we have to do something now before we go through something analogous to the worst of the 70's dystopia movies.

We could start drilling in ANWR. It contains about as much oil as we use in 18 months and the costs to produce it full out could top $75/bbl. Not exactly a bargain and it's not a long term solution, despite what the R's may have told you. And everyone else.

What about shale oil in the Rockies? Sure. There's a ton of oil trapped in shales, but the cost to produce will easily top $90/bbl. Why do you think none of the major integrated oils are clamoring over the prospect? Oh, yeah, and it also tears up the mountains. And pollutes the hell out of the environment BEFORE you've even had a chance to refine the first gallon of gas.

Oh, but the Athabasca oil sands (not to mention those in Venezuela's Orinoco Belt) are our savior, right? Sure, the oil there's being produced for around $30-40/bbl. Which is fantastic until you realize the environmental damage that's done to get at that oil. That, and it's not exactly the yummy West Texas Intermediate Equivalent that we've all come to know and love. Nah, this a dead end with escalating costs and nasty environmental effects.

All of the 'solutions' mentioned above do nothing but exacerbate the increase in atmospheric carbon. Even in the case of Athabasca, where they are using nuclear power, just pulling the oil up releases carbon. Before you even refine a gallon of gas, you're already increasing the carbon load.

The only solid long term solution is biofuels. Forget soya diesel and corn ethanol, two biofuels that are about as useless as tits on a boar. The future is cellulosic ethanol made from miscanthus and biodiesel made from cassava. The best solution is algae and cyanobacteria. However, there's a lot of land that should be converted from corn and cotton production (hello West Texas) to biofuels. And you can do it in a way that will lessen water requirements and make farming more dependable and profitable. Still, the biofuel panacea is going to be either cyanobacteria or algae held in suspension and contained in mile after mile of snaking tubes.

The best part? While it's making the transportation fuel, it's also scrubbing the atmosphere of CO2. You could even sequester CO2 from utility plants to juice growth. All around, it's THE solution, at least until we have practical fusion, solar panels with 70% efficiency that are commercially produced and ultra high density capacitors and batteries. While this doesn't do a lot to get rid of the carbon already floating around, it does put a stop to emissions growth. At that point, the environment will take care of the rest.

Now that we have the blue sky solution, how the hell do we implement it. Therein lies the rub... it's not easy and it'll take the kind of political acumen that few in Washington have. On our side. The Republicans are absolutely hopeless, bleating on as they are about offshore drilling, ANWR and shale.

For one thing, increasing the capital gains rate is going to make the investment banks and hedge funds very angry. Short term gains are their bread and butter, they're rich and they love donating money. And spending some of it on lobbyists. Still, our long term prosperity depends on shifting from a focus on short term to long term gains. In all honesty, if we allow them to buy into what's going to be the next big growth industry, they'll fall into line. And that's the key... the horse trading on this is going to be an absolute nightmare and the reality is that it's going to require getting everyone to buy in. Most of the integrated oils will, but Exxon will be unhappy with any solution.

That's where the power of government comes into play. Until now, it's been used to hold back advances in public policy that will benefit the country. This time, we can use to play hardball with those companies that are uncooperative. Don't like our solution? Forget about patent protection, for example.

The market is eventually going to go with this solution. However, it'll take them 20-30 years. That's why we need the government to step in and force the market's hand. This is going to require some monstrously intelligent people. The good news is, we have them. The bad news is that most of them are narrowly focused on one solution, not to mention that the vast majority of them have extraordinarily shallow knowledge bases. They're going to have to stop listening exclusively to the echo chamber composed of their fellow classmates from grad school.

Finally, what's all this going to cost? My estimates are upwards of $2 trillion after you hand out all the lulu's and get everyone happy with the outcome. You can do it now, but that kind of borrowing in addition to current fiscal insanity would promptly drive interest rates up to 12% or more. That would put consumer rates in the 17-20% range which would effectively kill commerce in the US. And employment. That's where that whole fiscal responsibility thing comes from and the certain knowledge that this will have to gradual so as not to cause a sudden shock to an already shaky financial system.

Of course, there's something else that makes the cost palatable. Biofuels keep our existing infrastructure mostly in place which reduces the cost to build out the production facilities. It also creates jobs which we desperately need, it lowers the cost of transportation fuel AND strengthens the dollar just from the simple fact that we'll not have to send as many of them out of the country to buy energy.

There will be moaning and whining about this from all sides. We'll have to ignore it, especially when it comes from the National Review, The Washington Times and R candidates. Eventually though, it'll become evident that this is a good solution that will readily benefit everyone.

Posted by mcblogger at 11:40 AM | Comments (11) | TrackBack

March 13, 2008

The high cost of going solar

The WaPo has a great article up about how one of the inputs into the manufacture of photovoltaic cells is causing a lot of problems in China. The input is polysilicon which elsewhere in the world, where there are environmental regulations, costs $84,000 per ton to produce. In China they are doing that for $21,000 to $56,000 per ton. You can do that when you don't worry about what you do with your waste. The waste in the case of polysilicon is silicon tetrachloride which basically kills everything. Not to mention that you can recycle it to create more polysilicon, which is a large part of the increase in cost for western manufacturers.

About nine months ago, residents of Li's village, which begins about 50 yards from the plant, noticed that their crops were wilting under a dusting of white powder. Sometimes, there was a hazy cloud up to three feet high near the dumping site; one person tending crops there fainted, several villagers said. Small rocks began to accumulate in kettles used for boiling faucet water.

Each night, villagers said, the factory's chimneys released a loud whoosh of acrid air that stung their eyes and made it hard to breath. "It's poison air. Sometimes it gets so bad you can't sit outside. You have to close all the doors and windows," said Qiao Shi Peng, 28, a truck driver who said he worries about his 1-year-old son's health.

The villagers said most obvious evidence of the pollution is the dumping, up to 10 times a day, of the liquid waste into what was formerly a grassy field. Eventually, the whole area turned white, like snow.

The worst part, said Li, 53, who lives with his son and granddaughter in the village, is that "they go outside the gates of their own compound to dump waste."

"We didn't know how bad it was until the August harvest, until things started dying," he said.

Early this year, one of the villagers put some of the contaminated soil in a plastic bag and went to the local environmental bureau. They never got back to him.

Zhang Zhenguo, 45, a farmer and small businessman, said he has a theory as to why: "They didn't test it because the government supports the plant."

More and more, everyone should realize that fallacy of free trade. It's trade with with economies that will poison the environment we all share in order to make a buck. Even if it means killing themselves and us.

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March 02, 2008

The oil may get low sooner than we think

For all the talk about drilling our way to energy independence, which is little more than than rambling by ridiculous little people with ridiculous little ideas, there is one inescapable fact. The well will always peak and from there on out that oil is going to get more and more expensive to the point of production costs going asymptotic, mostly because the reservoir pressure drops to the point where you are spending more and more to lift the next barrel of oil. It's happening in Mexico in the Cantarell field and in the Ghawar in Saudi Arabia.

The other inescapable fact is that as oil increases in value, those states that produce it will find themselves more and more affluent. And affluent people tend to become rabid consumers, especially when gasoline in 7 cents a gallon.

The economies of many big oil-exporting countries are growing so fast that their need for energy within their borders is crimping how much they can sell abroad, adding new strains to the global oil market.

Experts say the sharp growth, if it continues, means several of the world’s most important suppliers may need to start importing oil within a decade to power all the new cars, houses and businesses they are buying and creating with their oil wealth.

Indonesia has already made this flip. By some projections, the same thing could happen within five years to Mexico, the No. 2 source of foreign oil for the United States, and soon after that to Iran, the world’s fourth-largest exporter. In some cases, the governments of these countries subsidize gasoline heavily for their citizens, selling it for as little as 7 cents a gallon, a practice that industry experts say fosters wasteful habits.

“It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in 5 to 10 years,” said Amy Myers Jaffe, an oil analyst at Rice University.

The best part? Consumers in these countries care less about pollution than the rest of the world...

In Mexico City the other day, a bricklayer named Jaime Guerrero arrived at a local Chevrolet dealership. His extended family cried “bravo!” as he signed the papers for his first car.

“To have a new car in my name is a dream transformed into reality,” said Mr. Guerrero, 26. He and his family piled in and weaved through the chaotic traffic of the capital, hunting for a priest to douse the car with holy water.

“I don’t worry about the climate or shortages of oil in the world,” Mr. Guerrero said. “I just worry if gasoline prices go up.”

Frankly, it's a little hard for me to criticize Mr. Guerrero because he's representative not only of people in Mexico, but of people in the US and around the world. Given that, it's damn time we give him a cheaper, cleaner, long-term alternative.

And just FYI, no damn interior decorator is going to do that. It's going to take someone like Dale Henry.

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February 19, 2008

Paying for the nukes twice

The NYT has a great article up about all the nuclear waste that's piling up waiting for permanent storage. The cool part is that we paid for disposal of it with our electricity rates. The other cool thing is that we're going to pay for the delay in storing the waste with our tax dollars.

Cool, huh?

The only answer is to recycle the waste into plutonium and uranium and continue the fuel cycle. It's saves on uranium mining and gives us a long term solution since the wastes left over from the recycling usually have extremely short half-lifes, in some cases minutes or hours. Those wastes can then be vitrified into glass and they won't affect the water table in a long term storage facility.

What we have to do is get more comfortable with running reactors on plutonium. REACTOR grade plutonium, Ralph.

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December 03, 2007

Two takes on $100/bbl oil

Friedman over at the NYT has a brill piece about how much a $1.00 increase in the gas tax would have helped the economy and started the long process of weening us off oil.

“Think about it,” says Phil Verleger, an energy economist. “We could have replaced the current payroll tax with a gasoline tax. Middle-class consumers would have seen increased take-home pay of between six and nine percent, even though they would have had to pay more at the pump. A stronger foundation for future economic growth would have been laid by keeping more oil revenue home, and we might not now be facing a recession.”

As a higher gas tax discouraged oil consumption, the Harvard University economist and former Bush adviser N. Gregory Mankiw has argued: “the price of oil would fall in world markets. As a result, the price of gas to [U.S.] consumers would rise by less than the increase in the tax. Some of the tax would in effect be paid by Saudi Arabia and Venezuela.”

But U.S. consumers would have known that, with a higher gasoline tax locked in for good, pump prices would never be going back to the old days, adds Mr. Verleger, so they would have a much stronger incentive to switch to more fuel-efficient vehicles and Detroit would have had to make more hybrids to survive. This would have put Detroit five years ahead of where it is now. “It’s called the America wins program,” said Mr. Verleger, “instead of the petro-states win program.”

We simply cannot go on being as dumb as we wanna be. If you hate the war in Iraq, then you want a gasoline tax so you can argue that we can pull out of there without remaining dependent on an even more unstable region. If you want to see us negotiate with Iran, not bomb it, you want a gasoline tax that will give us some real leverage by helping to reduce the income of the ayatollahs.

This piece dovetailed nicely with this one in the WaPo regarding the geopolitics of $100/bbl oil. Not surprisingly, he thinks that part of this would be solved with higher energy taxes. Because from what we've seen in Europe and Japan, that's what you need to start people on a path to conservation.

At some point, higher prices will dampen demand; changes in the weather and business cycle could also lead to lower prices. Still, a major turning point has been reached. Until now, oil's main geopolitical threat lay in the concentration of reserves in the unstable Persian Gulf. Supply disruptions (1973, 1979-80, 1990) coincided with wars and revolutions. Otherwise, surplus capacity cushioned losses from accidents and weather. Now, most of that surplus has vanished. The pivotal year was 2004, when global demand, propelled by China, rose about triple the expected rate, says Larry Goldstein of the Energy Policy Research Foundation.

So the tightened gap between supply and demand has shifted power to producers. "Will competition for scarce resources lead to political or even military clashes among major powers?" asks a report by the National Petroleum Council. "Will bilateral arrangements among nations become common as governments attempt to 'secure' energy supplies outside of traditional market mechanisms?"

Here is what we might do: Raise fuel economy standards for new cars and trucks; gradually increase the gas tax (possibly offset with tax cuts) to induce people to buy those vehicles; expand oil and natural gas production in Alaska, the Gulf of Mexico, and off the Atlantic and Pacific coasts. These steps would, with time, temper the power of oil producers while also checking greenhouse gases. But many liberals, conservatives and environmentalists oppose parts of a sensible compromise. The stalemate hurts mainly us.

We have absolutely got to find a way out of this mess and we're not going to do it with new drilling and exploration, despite the idiotic opinion of a certain interior decorator who fancies herself knowledgeable about the oil and gas industry.

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November 26, 2007

BP broke law at Texas City plant, lawyers say

Remember that Texas City refinery that BP owns and operates? You know, the one that blew up in March, 2005 killing 15 workers and injuring hundreds? Apparently, it shouldn't have even been operating...

BP Plc violated Texas's ``revolving door'' law in 2003 by hiring a state environmental engineer to work on the same air pollution permit he'd supervised as a regulator, lawyers suing the company claim.

The permit, which governs BP's Texas City, Texas, refinery, allowed the company to operate its largest refinery without replacing outdated emissions controls, such as the one that exploded in March 2005, killing 15 workers. Texas law requires applications be rejected when the people involved worked on both sides of the permitting process.

The engineer ``changed sides and worked on the other side of this same thing for BP, representing BP against the state?'' a lawyer for some of the injured workers asked Watson Dupont, a safety manager at the Texas City plant in a Nov. 15 deposition, portions of which were made public in court filings Nov. 23.

``He worked for BP in 2003 on the third draft of the flex permit, yeah,'' Dupont replied, referring to BP Senior Air Engineer Rueben Herrera, a former permitting engineer at Texas Council for Environmental Quality. The group regulates industrial emissions.

Here's the best part...

Mark Lanier, in a Nov. 23 filing in Houston federal court, singles out Herrera's involvement on both sides of BP's air- quality permit for the Texas City refinery as proof that BP ``flagrantly violated a variety of regulatory and ethical guidelines to ensure its criminal acts could proceed apace.''

``Herrera did secure the necessary permits despite the fact that such action was itself a crime,'' Lanier said in his objections to BP's plea. Lanier said the plea doesn't punish BP's ``breathtaking acts of criminality.''
...
In hearings since September 2006, BP's lawyers have repeatedly told State District Judge Susan Criss, who is overseeing the civil case, that the company didn't break any laws regarding its Texas air-quality permits. Last year, Criss ruled she would allow jurors to consider evidence that BP may have falsified documents to fraudulently obtain its permits against the company for punitive damages purposes.

``Herrera testified many months ago, and it was incredible what we heard,'' Criss told civil lawyers during a Nov. 12 pretrial hearing, referencing Herrera's prior testimony on the permits. ``He indicated it was a criminal act for him to have left that agency and gone to work for BP,'' Criss said.

Gotta love that this is before Judge Criss instead of one of those Republican gas bags who'll vote with industry 84% of the time...

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November 12, 2007

Ouch! It hurts! or Rising oil price impacts around the world

The WaPo has a great piece up about the impact of $100/bbl oil around the globe. It's not really surprising that exporters are doing well and importers are doing badly. What caught my eye is what's happening in Brazil...

In Brazil, the region's largest economy, high oil prices have had a different political effect. Last year, the country became a net oil exporter, thanks to major increases in domestic oil exploration and the country's broad use of sugar-based ethanol as a transport fuel.

Actually, Brazil doesn't produce much oil, less than the US in fact. However, they do use sugar cane ethanol for just about all their transport fuel with the remainder coming from soya diesel. Brazil's economy is soaring thanks to their independence from petroleum.

Anyone who tells you that we can't move to biofuels in the US is lying. The Brazilians did it with sugarcane and we're a decade ahead of them in refining capacity thanks to all our work to render inefficient corn into ethanol. There really aren't any excuses. This is something that's not just good for the environment, it's the right thing to do for the economy.

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November 06, 2007

Plastic electricity

Gizmodo has the low down on dual layer plastic photovoltaics. While less efficient than semiconductor based PV systems, these plastic cells are very cheap to produce and drop price/efficiency ratios significantly.

Nobel prize-winning scientist Alan Heeger and his buddies have figured out a way to print more-efficient plastic solar cells, boosting their efficiency to 6.5%, a world record for these photovoltaic polymers. Heeger and his colleagues perform this trick by using two layers of different types of plastic, and whenever one layer doesn't turn light into electricity, the other one picks up the slack. Now the scientists are getting cocky, saying they can improve the tech even further.

Plus, you can make them out of plant or petroleum polymers. Granted this is all still in prototyping, but as we've seen in other systems, the pace of R&D has accelerated in recent years. It's not unlikely that you'll see plastic PV systems commercially deployed by the end of 2009. Shortly thereafter, Sears will be begin offering it as a siding option.

Oh, and here's a graphic.

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November 02, 2007

Toyota has a new hybrid

And Toyota continues to lead the way on electric/hybrid vehicles, this time with a plug-in hybrid.

According to Jalopnik, 'Toyota will officially be asking for permission from Japan's Ministry of Land, Infrastructure and Transport "for the testing of a prototype plug-in Prius on public roads."' Pricing and availability have not yet been announced.

"After completing the road tests, Toyota will then be able to begin the process of bringing them to market by leasing them to public municipalities and governmental offices. Asahi is also saying Toyota is testing a lithium-ion battery pack in the plug-in."

Wouldn't it be cool if GM, Ford or Chrysler could get off dead center and do something in this direction?

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October 28, 2007

Peak Oil was last year?

Yes, according to a report in The Guardian (via ELLN)

World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown.

The German-based Energy Watch Group will release its study in London today saying that global oil production peaked in 2006 - much earlier than most experts had expected. The report, which predicts that production will now fall by 7% a year, comes after oil prices set new records almost every day last week, on Friday hitting more than $90 (£44) a barrel.

"The world soon will not be able to produce all the oil it needs as demand is rising while supply is falling. This is a huge problem for the world economy," said Hans-Josef Fell, EWG's founder and the German MP behind the country's successful support system for renewable energy.

The report's author, Joerg Schindler, said its most alarming finding was the steep decline in oil production after its peak, which he says is now behind us.

Can we please move on from crap about drilling our way to energy independence and supply, a la this little retard decorator?

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October 12, 2007

Friedmanite utility dereg fails. Officially.

Again, we're talking about utility deregulation. This time, from an analysis in the late to the party Chron (via Kuff)

[T]he very structure of Texas' deregulated market exposes customers to the full impact of rising natural gas prices more than in other states, or even in parts of Texas still served by regulated electric companies, municipally owned utilities or electric cooperatives.

The 25 percent of Texans living in those regulated markets generally pay less than rates available in markets that have been opened to competition.

Houston residential consumers use an average of 1,130 kilowatt hours a month. Bills for that much power would range from $125.43 to $163.85 based on rates available in Houston at the end of September for a one-year, fixed-rate plan. The average rate available in Houston would produce a monthly bill of $142.95.

The same amount of electricity would cost $97.41 in San Antonio and $105.32 in Austin, both served by municipally owned utilities.

Deregulation supporters say its success should not be judged just on price, and point to the variety of electricity service options available to customers. But they have been slow to take advantage of the choices.

The variety of service options? Like what? 12/12 plan that keeps my power on only for 12 hours a day and pulls me off the grid for the 12 that I'm at work/stuck in traffic? What difference does it make if the kWh is still more expensive than the pinko's in Austin are paying?

Pretty sad when the widely derided most liberal city in Texas has better and cheaper utility service than the capitalist powerhouses of Dallas and Houston. But at least Dallas and Houston people have their choice from a 'variety of service options'.

Variety of service options... You can stick that up a variety of assholes.

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October 01, 2007

Super advanced electric car? Yeah. Sure.

Many companies are talking about electric cars that charge in 5 minutes and can run for 500 miles. Yeah, while we think eventually this will happen, we have serious doubts as to it happening now.

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