CBO Blasts Ethanol

An article published last Thrusday by the Washington Times suggests that federal support for corn ethanol has large negative consequences and a dubious impact on the environment. It seems that the Congressional Budget Office is catching up to the many critics of ethanol (for some of our own criticism of ethanol, feel free to check here). This should be the final nail in the coffin for aggressive corn-based ethanol policies. Continue reading


Mixing Oil and Water

This blog has previously discussed the merit of talking about peak oil in terms of electricity conservation in our Making Up The Difference series (parts 3 and 3A). We’ve also talked about how careless water consumption in America and elsewhere results from the abundance of local sources and pressure to provide at below market value (see here).

Because of all the pumping, managing, and cleaning that must be done to the water supply, wasting potable water is also wasting energy. 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.

Blue Gold?

Living in the United States and, in particular, living close to the Great Lakes, it is easy to take water for granted. This article from the Christian Science Monitor suggests that there is some reason to be concerned about clean freshwater supplies, and eloquently lays out the options.

Within reason, water shortages are mostly a problem of pollution and distribution, not one of total resource stock and rate of resource extraction. The article paraphrases water expert Peter Gleick:

“The idea of ‘peak water’ is an imperfect analogy, he says. Unlike oil, water is not used up but only changes forms. The world still has the same 326 quintillion gallons”

Continue reading

The Decline of Fuel Subsidies – Rise of Demand Destruction

India is raising fuel prices by 10% for the second time this year as oil prices stay at record levels. The petroleum minister, Murli Deora put it ever so eloquently.

Due to the relentless increase in international oil prices, it has now become necessary for the consumer… to shoulder a small part of the increased burden, through a marginal hike in prices.

Could this be the beginning a significant amount of demand destruction in the developing world?
Continue reading