oil

Cheney: ‘Drill, drill, drill’

Dick Cheney has weighed in with his answer to the nation’s energy woes: Vice President Cheney yesterday called for a substantial increase in domestic drilling for oil and other natural resources, including in environmentally sensitive areas, saying that only increased production — and not new technology — will satisfy the nation’s demand for energy. “We […]

Colbert on the Arctic

House committee hears testimony on the future of oil (hint: it’s dim)

With gas prices at record highs and the Senate engaged in a fruitless struggle to find a new way forward on energy policy, the House Select Committee for Energy Independence and Global Warming held a timely hearing this morning on “The Future of Oil.” The general consensus: the long-term prognosis for global oil supply and […]

Today’s gas consumption shows that price increases are only one part of the solution

As SUV sales plummet and gasoline use finally drops, one meme spreading around is, "Looks like people respond to price after all." The implication seems to be that any demand response other than zero proves that prices are wonderfully effective.

The problem, however, is not response is or might be zero. (I can think of few who ever claimed that.) The problem is that it takes a big price increase to produce a small response.

The current data support the conventional wisdom: 40 to 50 percent long-term elasticity, low enough to discourage us from relying on price as the main means of reducing emissions, high enough encourage us to use price as one among many means. At first glance, the raw data are even more discouraging than the conventional wisdom: Inflation adjusted gasoline prices have risen almost two-and-a-half times since 2000. Gasoline demand has dropped by slightly over 20 percent. But long-term elasticity is, by definition, a delayed response -- at least three years.

Also, if we are interested in price response as opposed to income response, we have to adjust for growth in GDP. So a rough calculation yields 45 percent long-term elasticity (with some biases that probably overstate the result). Here are two graphs, the first of raw data, the second after adjustment (click for larger versions):

Good big-picture view of the emerging cleantech market

I found this video, from an NDN event called “Understanding the Cleantech Investment Opportunity,” intensely educational (warning: it’s over an hour long):

High oil prices are our lot until demand is destroyed, but no peak

Goldman Sachs analyst Arjun Murti predicted the recent spike in oil prices, so it's worth looking at his recent interview in Barron's:

Drilling in ANWR still isn’t the solution to high gas prices

George Will is at it again. His latest bit of inane demagoguery can be found here, in which he excoriates everyone who has ever opposed drilling in the Arctic National Wildlife Refuge:

Also disqualified from complaining [about oil prices] are all voters who sent to Washington senators and representatives who have voted to keep ANWR's oil in the ground and who voted to put 85 percent of America's offshore territory off-limits to drilling.

Naturally, Will ignores the flip side of the coin. What about people who have opposed investing in renewable energy, increasing fuel efficiency standards for cars, or encouraging conservation a decade ago? Those people have done far more long-term damage. If we'd begun to work on the oil problem ten years ago, we would be in much, much better shape than we are today.

But is drill, drill, drill a solution? Will writes:

Act now with clean energy or face 6 degrees C warming; cost is not high; media blows story

When the normally conservative International Energy Agency agrees with both the middle of the road IPCC and more ... progressive voices like mine, it should be time for the world to get very serious, very fast on the clean energy transition. But when the media blows the story, the public and policymakers may miss the key messages of the stunning new IEA report, "Energy Technology Perspectives, 2008" (executive summary here).

You may not have paid much attention to this new report once you saw the media's favorite headline for it: "$45 trillion needed to combat warming." That would be too bad, because the real news from the global energy agency is

1. Failing to act very quickly to transform the planet's energy system puts us on a path to catastrophic outcomes.
2. The investment required is "an average of some 1.1 percent of global GDP each year from now until 2050. This expenditure reflects a re-direction of economic activity and employment, and not necessarily a reduction of GDP." In fact, this investment partly pays for itself in reduced energy costs alone (not even counting the pollution reduction benefits)!
3. The world is on the brink of a renewables (and efficiency) revolution. Click figure to enlarge:

Five nations agree to think about ending oil subsidies

The day after markets registered the highest single-day rise in crude oil prices ever, the United States and Asia's four largest economies (Japan, China, India and South Korea), meeting in Aomori, Japan in advance of the G8 Energy Ministers summit, have formed a sort of Petro-holics non-Anonymous club, calling for an end to oil subsidies in their countries.

Consumer subsidies (subsidized fuel prices), that is, not producer subsidies.

OK, what they actually agreed upon was "the need" to remove fuel-price subsidies. Eventually.

According to a report by Agence France-Presse, the five nations announced in a joint statement:

"We recognize that, moving forward, phased and gradual withdrawal of price subsidies for conventional energies is desirable. Undistorted and market-based energy pricing" would help "enhance energy efficiency and increase investment in alternative sources of energy." They said that subsidies "should be replaced wherever possible by better targeted policies for intended beneficiaries. Such a move "could also lead to reduction in the government cost and greater integration of the domestic and global energy economies."