US Government Numb to Fuel Economy Issues

From the New York Times, comes this long and shocking story about the state of conservation efforts within the government.

According to the article, the EPA was granted the authority to impose efficiency requirements on automobiles by a Supreme Court decision that the Clean Air Act applies to carbon dioxide emissions. The EPA, acting on this mandate, sent an email stating that greenhouse gas emissions must be controlled by the government, and officials within the White House refused to read or acknowledge it. The EPA subsequently edited their report to not call for enforcing current pollution legislation as a means for controlling carbon emissions. The White House effectively ignored the Supreme Court decision on the EPA’s power, and the EPA rolled over.

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Oxfam: Biofuels have dragged 30 million people into poverty


What arguments are left for biofuels? A help to a domestic industry at the expense of the world? A small addition to total world energy production? A step towards miracle ethanol that can be made from anything? Oxfam has now refuted a principal argument in favor of “green” fuels.
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A Voice of Reason?

Every once in a while, someone in power will say something vaguely sensible about the state of our world. Unfortunately, they will often turn around and ruin it right afterwards. That is precisely what US Energy Secretary Samuel Bodman did this week, according to another CNN article on an oil price discussion in Saudia Arabia (remarks made by the Saudis are addressed here). Continue reading

Is Cheap Oil a Right?

Over the weekend I had the pleasure of spending some time with my family. We were discussing the normal topics; school, upcoming trips, furniture, work, health, but it was only a matter of time before the issue of gas prices came up. As expected, my mother took the opportunity go against every Economics 101 textbook and demand price caps along with windfall profit taxes and subsidies to Americans. After all, why should we be paying this much while oil companies, speculators and the Arabs are all cashing in? When I tried to argue that the high price might be a signal for people to adjust, I was simply told there has been no adjustment since prices haven’t gone back down. After I tried to further evaluate my point, she posed the question, “Well, if its not speculators or companies, what’s making the price so high?” When I responded with supply and demand, all I got was a baffled look. There’s an understandable reason for her frustration, considering her relatively recent purchase of a home in exurbia, requiring a 100 mile roundtrip commute to work, and a new Toyota RAV4. After all, we like the comfort of being able to make plans and keep all uncontrollables constant.

Earlier this afternoon, I tuned into “Hardball” on MSNBC being hosted by Mike Barnicle in place of Chris Matthews. Anyone watching the program got the pleasure of seeing ten minutes of Jim Cramer’s analysis of the energy outlook for the United Sates. Jim Cramer has become a realist on the limited supply of oil while chastising corn based ethanol (championing Brazil at the same time) and voicing his enthusiasm for wind and solar energy. When Cramer said that he believes that Saudi Arabia doesn’t have the oil available to increase production, Barnicle simply gave him an inquisitive look and asked, “Well, where is the oil going to come from then?” which was followed up by several minutes of a very loud reality check by Jim Cramer that mentioned Chinese demand, $150 oil, and the relatively small impact of the common scapegoats such as speculation and the weak dollar.

These two examples are further evidence that the average American (trying not to assume that my mother and Mike Barnicle are average Americans) is both unaware of facts and unable to imagine a reality different than the one experienced over the past 60 years. While Presidential candidates and cable news focus on minor factors on the price of oil whether it be speculation, the outer continental shelf, the weak dollar, a gas tax holiday and ethanol, voices of reason like Jim Cramer and myself are left with the duty of removing the false assumptions that have been indoctrinated on the majority of people. As discussed earlier on this blog, peak oil awareness is imperative to proper mitigation. Without the support of the majority and the continued belief that cheap gas is a right, we will keep looking towards short-sighted and ignorant solutions that do nothing but make our greatest fears ever more possible.

Leading Oil Exporter Fails to Understand Oil Market

Via CNN, there comes word that the Saudis do not think there is any reason to worry about supply and demand of oil. The price increase, supposedly is attributable to speculators and weaker currencies:

“The supply and demand of oil around the world is ‘normal,’ a key adviser to Saudi Arabia’s oil minister said Friday, pointing to factors including speculators and currency fluctuations for rocketing oil prices.”

That is wrong in many, many ways. Continue reading

New Biofuel Options

There were two stories in The Times of London this week about organisms that secrete a chemical almost identical to crude oil. As is to be expected, these are not exactly going to drop the price of oil tomorrow. They are more promising than diverting food supplies to our gas tanks, and lack some of the incompatibles that ethanol has with gasoline engines but unless technology makes massive leaps forward, they still won’t do the job. Continue reading

China to raise price of fuel

A few weeks ago we discussed the possibility of more demand destruction as a result of India raising fuel prices by 10%.

Now, we see an unexpected 18% rise in the price of fuel in China. With the two largest countries in the world cutting fuel subsidies, it is likely that we will see demand destruction outside of the 2% reduction in miles driven by americans. Without a doubt, it is in the interest of the United States to see a cut in demand from Asia.

Could this action be the result of a recent meeting of top finance officials from the US and China?

(Treasury Secretary) Paulson said it was critical that the United States and China, the world’s two largest importers of oil, increase their cooperation on energy issues in the face of increased demand and record-high oil prices.

Regardless of what instigated this change in policy by China, the lessening the distortion in the world energy market will help ease the impact of oil depletion in the long-term.