Hybrid Sales Fall Precipitously as Gas Prices Remain Low
Not surprisingly, as gas prices have fallen in recent months, so have sales of hybrid vehicles. In February, only 15,144 hybrids sold in America, down two-thirds from last April, when sales for that segment peaked (and gas was an average of $3.57 a gallon). While auto sales across the board have fallen dramatically as a result of the economic situation, the drop in hybrids has been even more precipitous.
Two main lessons can be learned from this situation, with the most obvious being that the higher gas costs, the more consumers will purchase efficient vehicles. But the second lesson, which is less apparent, is that as Congress forces automakers to build more alternative fuel cars as a condition of the bailouts, it is putting these companies in a new bind– since consumers don’t want to purchase these efficient vehicles while gas is reasonably cheap.
Apparently, the only entity that is more out-of-touch with the American consumer than the domestic automakers is Congress. By forcing automakers to build efficient cars while gas prices hover around $2, Congress could be setting the stage for another domestic auto industry crash in the coming years.
Of course, this could all be solved by just following the number one lesson above– and dramatically increasing the federal gasoline tax so that consumer (and industry) behavior changes permanently. But Congress, like the automakers, rarely makes the right strategic decision.
Gasoline Prices Magically Rise as Oil Stagnates
The entire oil production chain stinks. From the cartel of petro-states that drill it to fund their illegitimate regimes, to the traders that hoard it and play market games, to the allegedly independently operated refineries that mysteriously require unexplained maintenance all at the same time, the path to the pump is to corrupt and too easily manipulated. Practically every step along this chain there is the will and the ability to artificially decrease the supply in order to prop up prices.
Despite the fact that a barrel of crude has been sitting around $40, the average price of a gallon of gas is now $1.92, up from $1.79 a month ago.
Gregg Laskoski, managing director of public relations for AAA Auto Club South said that some of the increase in price can be attributed to lower output by U.S. refineries. Laskoski noted the odd situation where “A recession and rising unemployment translates into fewer motorists on the road and diminishing fuel consumption, and yet, retail prices climb higher.”
The sooner we transition off of this corrupt and polluting commodity, the sooner our economy, planet, and way-of-life, can regain some security.
Palin Hopes Alaska Will Produce 50% Renewable Energy by 2025
On Friday, Gov. Palin announced that she was setting the goal of having Alaska produce 50% of its electricity from renewable sources by 2025. Outlining this proposal was a 245 page document called “Alaska Energy: A first step toward energy independence.”
The only problem is that, as the Juneau Empire noted, “Palin and energy advisor Steven Haagenson also revealed that the plan isn’t actually a plan for action. Instead, it is a list of resources on which local communities may use to develop their own solutions. Haagenson acknowledged that was a different approach, but said they actually “avoided” developing a plan, and instead tried to develop something that would work.”
It is unclear how providing fewer details and substance is more likely to work, but that would seem consistent with her general political approach. The Empire concludes, “While the plan doesn’t provide a road map for getting to its stated goal of half the state’s power coming from renewable sources, it identifies numerous areas in which the state could develop alternative energy.”
Global Oil Demand Predicted to Decline Second Consecutive Year
The International Energy Agency (IEA) forecast on Friday that world oil demand will drop again in 2009, which would make it the first time in 26 years that demand has declined for two consecutive years.
The IEA based their estimate on downward revisions made to GDP forecasts by global economic institutions, such as the International Monetary Fund. According to the IEA report, “China’s economy, in particular, appears to have sharply slowed down as its main export markets tumble.”
The forecast calls for a 0.6% decline in demand in 2009. The last time there were two consecutive years of decline was in 1982 and 1983.
Confirmation Hearings Begin for Energy Secretary Nominee Steven Chu
The confirmation hearings for energy secretary nominee Steven Chu began today. Chu noted in his prepared testimony before the Energy and Natural Resources Committee that “last year’s rapid spike in oil and gasoline prices not only contributed to the recession we are now experiencing, it also put a huge strain on the budgets of families all across America.” Chu added that the U.S. needs a “greater, more committed push towards energy independence, and with it a more secure energy system.”
Of course, Chu also has previously stated that “coal is my worst nightmare.” While he is right about coal, it will be interesting to see how committee members representing coal-producing states will challenge him on this issue. Some of those members may include:
Republicans Bob Corker of Tennessee, John Barrasso of Wyoming, Jeff Sessions of Alabama and Jim Bunning of Kentucky, as well as Democrats Byron L. Dorgan of North Dakota, Jon Tester of Montana and Chairman Jeff Bingaman of New Mexico.
Obama: Upgrade Energy, Efficiency, Health Care, Education, Technology, Science, Accountability and Transparency
Part 1:
Part 2:
President-elect Obama expanded on his ambitious proposals today.
Obama’s Change.gov concludes that:
“The plan will save or create 3 million jobs by doubling the production of alternative energy; weatherizing 75% of federal buildings and two million American homes…” computerizing America’s medical records; updating thousands of schools, community colleges, and public universities; expanding broadband; and investing in science, research, and technology.” READ MORE
Venezuela Reverses Decision on Heating Oil Subsidies to U.S. Residents
Only two days after announcing the cancellation of its heating fuel subsidies to low-income U.S. citizens, Venezuelan owned Citgo Petroleum has reinstated this program. Although Venezuela’s per capita income is about 1/10th that of the United States, it has decided to continue with the payments. It is unclear what caused the reversal. However, there was a lot of press coverage of the recent decision which may have been embarrassing to President Hugo Chavez, who presents himself as a protector of the world’s poor.
The program will supply 100 gallons of free heating oil to eligible households in 23 states with a target of about 200,000 homes.
Supertankers Being Used to Store Crude at Sea for Delivery When High Prices Return
Anyone who thinks the days of high oil prices are in the past should think about this:
Both oil traders and oil producers have recently begun using supertankers to store extra reserves of oil for delivery later this year. Although prices are still relatively low right now (around $48 per barrel) oil futures for delivery later in the year are almost 30% higher. As a result, investors see money to be made by purchasing oil today at a relatively low price, paying to store it at sea, with the plan of reselling it back into the market later in the year when the prices are substantially higher.
Frontline Ltd., which is the world’s biggest owner of supertankers, said oil traders have already chartered 25 vessels and may take as many as 10 more in order to store crude for future sales. Traders are seeking to lease the supertankers for three to nine months. Each barrel stored would cost approximately 90 cents a barrel per month for storage. READ MORE
Russian Flow of Natural Gas via Ukraine Shut Off Completely
The Russia-Ukraine natural gas dispute has escalated significantly with Russia cutting off basically the entire flow of natural gas on that pipeline on Wednesday. As a result, Europe, which depends on Russia for 25% of its natural gas supplies may see serious shortages as soon as next week. The countries particularly dependent on these supplies include Bulgaria, Romania, Greece, and Turkey. However, western countries, including France and Germany may also face shortages.
Although Russian energy monopoly Gazprom says that it is increasing its deliveries to the EU via other routes, traditionally 80% of the gas is delivered through Ukraine. Consequently, there may not be enough alternative pipeline capacity to make up for the massive shortfall. Currently, Russian gas supplies to Europe are half of normal.
Unfortunately for the EU, it doesn’t have a whole lot of leverage in this situation. They are truly dependent on Russia (and Ukraine) for a large portion of their natural gas supplies, and are stuck in the dead of winter with greatly diminished gas. They have few alternatives and Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, seems unlikely to convince Russia to change its ways.
Vermont Adopts CA Environmental Labels Requirement for New Cars
As often occurs, California’s recent regulation requiring environmental impact labels on new cars, has been adopted beyond that state’s borders. The first state in New England to adopt this rule is Vermont. Similar to California, the rule requires the label to indicate both a “global warming” and a “smog” score for each every new car.
Vermont Agency of Natural Resources Secretary Jonathan Wood explains, “These new labels will make it easy for Vermonters to choose cleaner vehicles while comparing fuel efficiency. Vermont is still the greenest state in the country but our largest output of greenhouse gas emissions comes from transportation.”
Bush Creates Three Massive Ocean National Monuments
On Tuesday, President Bush created three new marine national monuments in the Pacific Ocean. The newly protected areas will cover 195,280 square miles (roughly the size of Spain), and includes a series of isolated islands in the Pacific, along with the Mariana Trench, which is the deepest ocean canyon on earth. With this act, Bush will have protected more ocean, over the course of his term, than any person in history.
The monuments are being created under the powers of the Antiquities Act of 1906, which is traditionally used to protect statues and cultural sites. Under the new designation, oil and gas exploration, as well as commercial fishing, in the protected areas will be severely restricted. READ MORE
Obama Reiterates Call for Energy Efficiency and Decreased Dependency on Foreign Oil
In his weekly video address, Obama covered major issues like health care, education, jobs, and energy. Some highlights:
“To put people back to work today and reduce our dependence on foreign oil tomorrow, we will double renewable energy production and renovate public buildings to make them more energy efficient…
“…we need an American Recovery and Reinvestment Plan that not only creates jobs in the short-term but spurs economic growth and competitiveness in the long-term. And this plan must be designed in a new way – we can’t just fall into the old Washington habit of throwing money at the problem. We must make strategic investments that will serve as a down payment on our long-term economic future. We must demand vigorous oversight and strict accountability for achieving results. And we must restore fiscal responsibility and make the tough choices so that as the economy recovers, the deficit starts to come down. That is how we will achieve the number one goal of my plan – which is to create three million new jobs…”
Russia Shuts off Natural Gas Deliveries to Ukraine
On Thursday, Russian energy monopoly Gazprom, shut off the entire flow of natural gas to Ukraine for that country’s domestic consumption. Ostensibly, the dispute is over price and transit fee negotiations, however, larger geopolitical and economic issues are surely the underlying causes.
The Kremlin has often used its control of Russian natural resources as a tool for international relations. In 2006, Russia shut down deliveries of natural gas to Ukraine for three days, which many attributed to tensions between the two countries stemming from Ukraine’s Orange Revolution in 2004. And earlier this year, the Czech Republic saw a decrease in oil deliveries from Russia, three days after it signed an antiballistic missile agreement with the U.S.
If the current interruption in Ukrainian deliveries continue, Western Europe will also experience shortages, as they receive their natural gas from Russia on the same pipeline.
California Beaches Threatened By Climate Changes and Human Activity
A combination of rising sea levels and human activity have caused many of California’s iconic beaches to come under duress. In the last century, sea levels rose 8 inches along California’s coasts, which increased erosion of beach sands. Current predictions of a 2-3 foot rise in ocean levels this century will dramatically expand this erosion.
Additionally, in some cases, human built structures like breakwaters have acted to disrupt the national migration of sand up and down the coast, which can exacerbate the problem.
Despite Recent Protests, Farm Industry’s Best Interest is to Regulate Emissions
While we understand why most businesses are automatically opposed to an emissions tax for financial reasons, there are certain industries that really should think twice about their opposition. We’ve previously identified the skiing industry as a business sector that has a direct interest in fighting climate change. Another sector, which is only slightly less obvious, is the farming industry.
A recent study by Stanford researchers found that global warming will likely put an enormous strain on California’s agricultural industry. More frequent heat waves, rising temperatures and a drier climate, will put extreme strains on the state’s water supplies and energy systems, both of which are essential to growing.
The study, which used climate scenarios developed by the IPCC, predicted that in the second half of this century, average temperatures will increase approximately 4 to 9 degrees Fahrenheit. READ MORE
