Posts Tagged by oil
From Guest-Blogger Iannick Gagnon: Oil — Indians and Refiners
| January 2, 2012 | Posted by iangagn under Fossil Fuels |
Let us briefly wrap our heads around the main points of our last article Oil: The First Shock. When the first oil well was drilled, its produce could be sold for something around $20 a barrel, which corresponds to roughly $500 in today’s money. Shortly after, thousands of new rigs were built and the markets were saturated with oil, i.e., supply outpaced demand, driving the prices all the way down to $0.10/bbl. The drilling business became unprofitable and people closed their taps. The demand for oil increased significantly during the Civil War (1862-1865), and due to low supplies, prices reached $80/bbl or around $1900 in inflation-adjusted terms. After the war, demand slumped and prices eventually fell to its previous low levels.
There are two things that, in our opinion, are very important to discuss about the period between 1859 and 1865 because they will help you understand similar events that will be discussed in the future. The first point we want to make is about the oil industry in general. It requires capital, lots of it. Read More
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From Guest Blogger Iannick Gagnon — Oil: The First Shock (1859-1865)
| December 18, 2011 | Posted by iangagn under Fossil Fuels |
This article is submitted with the hope that it will set the tone for a series of others that will follow by covering the origins of the petroleum industry in the United States. The main objective of these pieces is to provide the reader with a historical understanding of shocks in oil prices. Later on, other writings will cover more recent material on the subject and a final piece will offer the reader some predictions of what the future of oil prices might look like in the short, medium and long term.
The task at hand is ambitious, but its value is considerable. Everyone feels a pinch when the prices at the pump crawl higher and higher with no end in sight. History has repeatedly proven to be the best thing we have to go on and that’s exactly what we’re going to do. As a result, we will establish a solid foundation from which we will make an educated guess about the future of the oil industry and what it means for civilization. Read More
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Energy Videos for Newcomers
| October 13, 2011 | Posted by Craig Shields under Renewables - Science |
I’ve been preparing to make a few videos for newcomers to the subject of clean energy that answer basic questions on renewable energy, fossil fuels, nuclear energy, and the energy-related challenges we face. I’ll be recording a series of short talks, aided by graphics, that point out that all our energy sources go back to the Big Bang, and come forward through time to us as follows:
Solar power is nuclear, of course, as all that hydrogen that became our sun billions of years ago undergoes fusion and emits enormous amounts of energy. That which we accumulated over hundreds of millions of years as fossil fuels (ancient biomass) we extract and burn as oil, coal, and natural gas. That which we receive right now, or in the very recent past, we have the potential to harvest as renewables: photovoltaics, concentrated solar power, wind, new biomass, run-of-river hydro, ocean current, and wave. Read More
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Electric Transportation, Fossil Fuels, and "Internalizing the Externalities"
| September 1, 2011 | Posted by Craig Shields under Electric Vehicles |
Do you have a clean energy story that you’d like to tell the world?
One day each month, I shoot a series of short television shows called the “2GreenEnergy Video Report” in which I interview folks with interesting stories to tell at a television studio. The shows air throughout the month on a local channel here in Southern California — but, perhaps more important, we host the videos on YouTube and this website where they get some really good, longer-term exposure.
If you’re interested in being a part of this process, please check out the sample below, and let me know if you’d like to participate. Read More
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A Few Sobering Truths About Energy Consumption in the US
| June 28, 2011 | Posted by Craig Shields under Renewables - Business |
Here’s a piece from Kentucky-based consulting engineer and frequent commenter John Robbins, who provides some sobering remarks on the truth behind our current push for renewables.
Last week, I was one of 3 teaching a professional seminar about Passivhaus. In case you don’t know, that program (from Germany) actually sets serious (aka “difficult to achieve”) limits on heating, cooling and overall annual energy, also on how much HVAC heating and cooling capacity which can be installed. All that WITHOUT offsets from RE grid-tied storage-free energy. Only main negative about Passivhaus is that it gives certification based on design and construction, like LEED and EnergyStar. None of these popular programs actually require post-occupancy data to verify that designs work as estimated.
The best part of Passivhaus is it separates “reducing demand and use” from achieving net-zero by offsets like grid-tied storage-free RE as is permitted in LEED. I’ve seen new LEED homes in Cincinnati which are merely minimum-code designs with PV on the roof for offsets. With Cincinnati now offering a 15-yr property tax abatement for LEED structures and the local electric utility paying sRECs for grid-tied RE, homebuyers, their designers and builders are pretty much avoiding energy reductions and heading straight to RE offsets. There’s even new “creative” marketing lingo to describe the economics, “net-zero energy cost” – net-zero cost achieved by offsetting actual energy costs with sRECs and tax abatements. None of this would fly in Passivhaus. More importantly, these situations do not represent much reduction in demand for conventional energy, since Cincinnati is a 50% cloudy location, with windy winters but stagnant-air summers. Solar and wind can work here, but certainly not full-time, so structures with grid-tied RE have their un-reduced energy loads carried by conventional energy much of the time, maybe as much as 80% of the time.
We are seeing so much morphing of RE advocacy into marketing. I guess the 1st wave was for/by us who were educated and motivated prior to or away from the current subsidy hoopla. The massive current subsidies seem to attract folks who aren’t really much interested in the traditional movement (aka “less coal, oil and nuke”) but instead need heavy financial incentives to act. Regardless of why or what, as a very aware member of Assn of Energy Engineers where real energy matters are known and discussed regularly, I worry we are seeing so much money, marketing and reporting about nonrealities in our energy world. Even tracking %RE is the wrong thing to track.
As I wrote in an op-ed in SOLAR TODAY a half-dozen years ago, implementers should be tracking how much less conventional energy they demand and use, not how much of what solutions we buy or apply. I wish we tracked how much energy use and when it is used, separately from how much and when we have RE. The net-energy approach has simplified the process for consumers but made the education process more complicated. A utility company rep whose company was co-sponsoring a workshop I taught last year in south-central KY took offense when I told my students about this. All my students rated my class very good to excellent, but the utility rated it poor to very poor, adding that it would never sponsor any of my events in the future. Similarly, a solar installer I know in central KY told me last year that when he mentions efficiency to his callers interested in a solar bid, the most common result is a lost sale or lost opportunity to bid. So while my message is correct, very similar indeed to what we’ve heard for decades from Amory Lovins, it is a message very unpopular with many consumers and utilities, also many of our governments.
I include governments because of an experience I had in Ohio where I proposed how to cut residential energy use by a whopping %, but got no positive responses from the panel representing Ohio government. A professor of economics from Miami University of Ohio pulled me aside after my presentation and told me that Ohio historically forms energy policies not as much based on consumers or energy as how much potential for tax collection. Like most states, Ohio collects a lot of taxes on conventional energy. Also like most states, Ohio’s income tax rates are progressive, going up as incomes rise. The professor said insulators’, caulkers’ and window installers’ wages are tiny compared to union coal miners, utility workers, geothermal and solar installers. He said this is why Ohio incentive plans subsidize the most expensive (higher sales taxes) and most high-wage energy systems. He said this is also why we never see energy-use reduction targets and timelines.
So we cannot be naive and think we are currently implementing or describing THE ENERGY SOLUTIONS which will substantially cut coal and nuke reliance. The current round of RE seems most abt promoting and expanding the RE retail and manufacturing sectors, which is certainly needed. But that is not the same as solving our reliance on conventional energies, especially coal, oil and nuke. As said before, I and my most committed 1st-wave customers and contacts are focused mostly on reducing reliance on coal, oil and nuke. The failure of RE’s “new wave” to understand and address this, especially to accomplish any real conventional reductions, will one day come back to haunt, maybe to backlash.
I asked a colleague attending the midwest USGBC conference last week in Cincinnati how many coal and nuke powerplants will be running if all homes and buildings are net-zero by 2030? He did not respond quickly. So I said, maybe most that are running right now, maybe even more. Nobody really knows, but what we know for sure is that net-zero is a merely a marketing term applied usually to part-time intermittent mostly-daytime RE surpluses applied as offsets against full-time 24-hr-per-day power use. Baseload powerplants like nukes and large coal-fired generators cannot be turned on and off quickly. Even coal-fired needs 10 hrs or more to shutdown and restart. Nukes need days. That’s why they are used for baseloads. To reduce baseload generation, we need aggressive full-time load reduction.
The positive thing is this is possible, already demonstrated, even well written about. We just need leadership and education to keep the information in front of governments, consumers and businesses as they consider the issues and options. As a once-home-designer who now has very little design work in this continuing recession, I’m developing new workshops and writings to educate consumers, designers, contractors, teachers and anybody else who is interested. However, I must report that I do not get or hear much interest from younger people and companies in the RE sector. I suspect that’s because they are busy. After all, there are huge amounts of subsidies in my region going to RE retailers and contractors. That sector is certainly not in recession.
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Is Renewable Energy Replacing the Consumption of Fossil Fuels?
| June 28, 2011 | Posted by Craig Shields under Fossil Fuels |
This morning, someone asked me about the importance of energy storage. “Renewables provide intermittent energy. Don’t we need some way to store the energy overnight, to deliver it when it’s needed?” he asked.
“No, not right now, “ I explained. “The penetration of renewables is under 2% in the US. When we get to 15% – 20%, if we live long enough to see it, we’ll need storage. Until that point, the discussion is of academic importance only.”
Here’s another viewpoint on the interplay between renewables and traditional energy sources, in which the author suggests that energy demand is growing so rapidly that clean energy is really not cutting into the consumption of use of fossil fuels at all. Kentucky-based consulting engineer and frequent commenter John Robbins writes:
Craig:
In my region, growth in energy demand is advancing far faster than either conventional energy or renewable energy can keep pace. Electricity use in KY, for example, is down only in industrial sector, due to recession. Commercial and residential electricity use is up, even during the recession, even with record-breaking implementations of efficiency and renewables. Who was it that recently reported that new so-called DVR-type “set-top boxes” atop modern cable TVs have increased electricity use by same as was used annually by the entire state of Maryland only 10 yrs ago?
And a recent poll of electric utility representatives shows they expect a 7% or so increase in electricity use just associated with electric vehicles in the coming decade. Imagine the increase in electricity usage if/when the recession ends! Our new-wave renewable energy sector has dropped the ball carried by its 1st wave predecessors who always included very strong “demand/use less” messages as part of any/all renewable energy conversions.
As example, the director of Green Energy Ohio, who once pushed Ohio as head of Ohio Consumer Council to implement demand-side management (DSM) and efficiency programs to avoid new conventional electricity generation by Ohio utilities, now says absolutely nothing abt that because he’s head of Ohio’s largest renewable energy group. He now measures progress by how much RE is sold and installed. He exemplifies what I now describe to students is the “new wave” of renewable energy, where the goal is more about increasing RE than decreasing conventional.
Is it possible to increase RE at a record-breaking pace while not reducing conventional? You bet! It’s happening right now. ASES and SEIA both admitted on NPR that storage-free grid-tied RE is having little or no effect on coal-fired and nuclear generation. Yet many of us in the first-wave of RE actually sought to move us away from coal-fired and nuclear generation. All our strategies revolved around that goal. Yet new wave advocacy for more storage-free grid-tied RE without reduced electric loads (kW) and less electricity usage (kWh) is causing a situation in which demand for our most hated conventional energy generation (coal and nukes) is actually increasing!
And it cannot be ignored that new electric loads from countless new portable consumer electronics, plug-in electric vehicles, cable-TV set-top boxes and cable phone modems are increasing overall electric demand faster than the implementation rate of RE. Couple that with the part-time nature of most RE and we are heading into an almost certain future of increased demand for more non-RE energy. If only we focused our energy programs and investments on verified reductions in demand (kW) and use (kWh)…
We should be measuring and reporting our progress not by how much RE we can install, but by how much conventional energy we can reduce or avoid. If we at least implemented RE at the same pace as we reduced demand and use, we’d double the % RE compared to total energy.
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Fossil Fuels and Renewable Energy Sources – Some Business Considerations
| November 15, 2010 | Posted by Craig Shields under Fossil Fuels |
I often think about how the energy industry’s financial analysts view the fundamentals that apply to market valuations. Just now, I was reading some of the discussion at SeekingAlpha.com on ExxonMobil that attempts to get to the underlying buy/sell recommendations, and I note that the conversation is fairly bullish across the board.
In particular, though there is widespread agreement that the “easy oil is gone,” there is almost no recognition of a concerted move to get off of oil as a civilization. Moreover, the concept of “peak oil” (i.e., that the supply of oil will soon start to diminish) means that the price will soar, and that only companies with the scale of ExxonMobil (vs. the wildcatters of yore) will have the capability to play effectively. But there is precious little talk of the impact of electric transportation, or renewable energy in any of its forms.
I’m trying to figure out what that means. Here are a few points of speculation: Read More
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Fossil Fuels: Let's Not Lose Sight of Dangers
| September 2, 2010 | Posted by Craig Shields under Fossil Fuels |
Readers here know that I generally refrain from taking cheap shots at the oil and gas industry. I try to keep in mind that, whether we like it or not, fossil fuels make up the vast majority of the world’s energy supply, and that until we can come together as a civilization and make them obsolete, we rely on them every days of our lives.
Having said that, I think it’s imperative to ensure we never lose sight of the dangers. To that end, I call attention to the fact that the federal government is warning residents in a small Wyoming town with extensive natural gas development not to drink their water, and to use fans and ventilation when showering or washing clothes in order to avoid the risk of an explosion. It seems that EPA researchers found benzene, metals, naphthalene, phenols and methane in wells and in groundwater.
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Regarding Renewable Energy, Think for Yourself
| August 10, 2010 | Posted by Craig Shields under Renewables - Politics |
From today’s Wall Street Journal:
At 6-foot-2 and 240 pounds, Steven Kemp had to move his size 14 shoes to avoid tripping toddlers at his pediatrician’s office in Bloomfield Hills, Mich. “It’s kind of awkward, but we’re good friends,” says Mr. Kemp, now 19 years old and a student at Butler University, still looking for a doctor he likes as much and still consults his pediatrician occasionally….These days, more and more are staying with their pediatricians through their college years,” says the past president of the American College of Pediatrics.
Here’s a wonderful example of the WSJ telling you exactly what they want you to believe. Yes, they’re serious; they want you to accept the idea that you’re better off with a doctor of some sort walking around with you every day of every year of your life – through your childhood, then through your college days—and, of course, until the day you die.
How roped and tied to you have to be to believe this, though? If I asked you – and a thousand randomly chosen people like you — to choose which of the following two statements you thought better approximated the truth, what would you say:
A) It’s good for your children to become associated with modern medicine and its associated practices (pharmacology, psychiatry, etc.) — and remaining so from the time they’re born, or
B) If your kids eat well and play outdoors, you’re much better off with a very infrequent relationship with these practices.
Which would you choose? Read More
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Oil – Supply and Demand
| July 31, 2010 | Posted by Craig Shields under Fossil Fuels |
In response to my piece on society’s migration to electric vehicles, Dan Conine writes:
There needs to be a build-down of the sprawl simultaneously with the build-out of charging stations. Once they meet, the fringe will still have gas and the majority will be electric.
There are so many interesting scenarios here. Of course there are supply issues, i.e., Peak Oil. But one wonders what will happen if we see a steady erosion in the demand for oil. What will the oil companies do once demand for gasoline drops below a certain point? Read More
