Pickens: Oil to Hit $75 by End of Year
T. Boone Pickens predicted on Monday that oil prices would be back above $60 per barrel within two months and at $75 by the end of the year. Pickens is not alone in his anticipation of a future oil spike, as he is joined by both oil traders who have been buying up oil to be sold in the future, as well as history, which dictates that although oil may go down, it always comes back up.
“We got a break here, a little bit of breather, but within 60 days we’ll be back up to $60 oil and by end of year we’ll be on our way … at $75,” Pickens noted.
Of course, Obama has warned that we need to avoid falling into the regular shock and trance cycle with oil prices, and hopefully Congress will send him an energy package that substantively addresses this classic problem.
How a stimulus package could improve the economy and energy policy
Recognizing that the incoming administration and Congress are likely to pass a stimulus package early-on, Google.org makes some suggestions on how this package could be used to improve our energy policy and economy at the same time. Here are the four major suggestions:
Invest in renewable energy by changing the structure of the wind and solar tax credits. With the current economy, many investors cannot take advantage of tax credits since they no longer have profits. If Congress transformed the credits into refunds, investors would receive the incentives Congress intended. READ MORE
Obama on 60 Minutes: Now, more than ever, is the time to fix our broken energy policy
Obama’s interview on 60 Minutes covered some essential topics, including his opinion on the proposed Detroit bailout, as well as energy independence. With respect to the latter, Obama noted that now, of all times, is when it is most important to do something about our energy problems.
Obama has indicated previously that he thinks a transformative change in our energy policy could not only help the environment and reduce our dependency on foreign oil, but it could also create an economic burst that would help us get out of our economic crisis.
As Obama indicated in the interview, the big test will be whether these necessary changes can be implemented when oil is under $60 a barrel, instead of over $150. Normally we would just fall right back into the same sick cycle we have followed the last 40 years of focusing on the problem when there is acute pain, only to quickly forget all about it when the pain temporarily subsides. READ MORE
Will Obama take a transformative approach to energy policy or just step-by-step?
As with all new presidents, Obama will be faced with tough choices on how to prioritize his policies. There is disagreement as to which would be a more effective strategy– to attack a series of big issues all at once, trying to make transformative change to the system, or to attack things one step at a time, taking a more pragmatic and measured approach? Either way, it is likely that energy policy will be near the top of his list, after the economy. READ MORE
Risk of future oil spike increasing
Despite the recent plunge in oil prices (60% off the high of $147 in July), the International Energy Agency (IEA) predicts that prices will rebound to an average of $100 per barrel between 2008 and 2015.
The IEA predicts that because of drastic declines in short-term investments in oil production due to credit and market conditions, the threat of a future supply crunch is growing. READ MORE
IPCC head Pachauri releases statement regarding Obama election
The day after Obama was elected, IPCC head R.K. Pachauri released a statement on his blog regarding the election and climate change. Pachauri shared his belief that there has been a disconnect between the recent policies of the US government and the wishes of the American people with respect to climate change. Pachauri also noted that he believes climate change and energy policy will be key components of the Obama presidency.
The text of Pachauri’s statement follows:
READ MORE
A ‘dream’ Obama administration?
NYT’s David Brooks lays out his version of a “dream” Obama administration today. Brooks, who has previously identified health care and energy as the two biggest issues that need to be addressed, writes:
The current economic and energy crisis is an opportunity to do what was not done in similar circumstances in 1974 – transform this country’s energy supply. A comprehensive bill – encompassing everything from off-shore drilling to green technologies – would stimulate the economy and nurture new political coalitions.
Could the Senate have a de facto filibuster proof majority for energy legislation?
Environmental Capital wonders if the Senate election has created a filibuster proof “rotating Clean Energy 60“? Although the Democrats failed to reach the magic number of 60 seats in order to prevent any filibusters, there are a number of Republican Senators that will have an interest in clean energy projects. When these interests coincide with Democratic energy proposals, a de facto filibuster proof majority could be formed. READ MORE
Drop in oil price stymies Iran, Venezuela and Russian foreign policies
Not only is our over consumption of oil destroying the environment, but it is giving incredible wealth and power to petro-states like Iran, Venezuela and Russia. However, now with the plunging price of oil and natural gas, these countries that have enjoyed windfall revenues over the past few years are facing a new reality of imbalanced budgets and cost cutting.
Oil has fallen from $147, a few months ago, to below $80 today. Neither Iran or Venezuela can maintain their spending levels with oil below $90, and Russia apparently counts on around $70 barrels (note: this number is different from the approx. $82 level we sited before). However, Russia has squirreled away nearly $200 billion in a rainy day fund, so they are somewhat insulated from short-term price dips. READ MORE
Past failures with energy policy should inform present decisions
The Pew Fuel Efficiency report we discussed yesterday has more than just a dramatic graph. Inside the report are a number of major criticisms of the automakers and government for their roles in putting the brakes on efficiency policies in the 80’s and 90’s.
Many of the excuses for inaction heard from many efficiency opponents today are the same heard in the early 70’s when Congress was deciding how to react to the OPEC crisis. Apparently, domestic automakers complained that fuel economy requirements would force them to build a fleet of subcompacts. “In 1974, Ford testified the standards could ‘result in a Ford product line consisting …of all sub-Pinto-sized vehicles.’ Congress passed the law anyway, and today Ford’s top seller is its F- Series pick-up.” READ MORE
Those who don’t know their (energy policy) history are destined to repeat it
As we enter a period of decreasing gasoline prices and economic difficulties, it is important that we are not lulled into another sense of complacency about our energy policy. As this graph from the Pew Campaign for Fuel Efficiency so vividly illustrates, America has a tendency to react decisively and effectively in times of crisis, only to quickly fall back into old patterns, once the immediate danger has subsided. READ MORE
Candidates can’t even be serious about financial crisis
David Brooks analyzes the global financial crisis, identifying some of the preconditions as: the rise of China, the vast wealth of petro-states, and easy monetary policy, all of which created “an ocean of excess savings that had no place to go.” This ocean of excess was then managed by a few thousand traders who, while staring at their computer screens and models, were “three or four psychological levels removed from normal economic activity.” This, along with good old fashioned human fallibility, contributed to the current global crisis we face.
Brooks concludes by noting that in this time of ultimate financial crisis, when what we really need is a leader that understands the problems and can provide leadership, our two presidential candidates are stuck talking about Bill Ayers and Charles Keating.
If our candidates can’t even be serious about a clear and present crisis like the global economic situation, how will they ever address long-term issues like energy policy and climate change?
As oil prices fall, a lesson should be learned (lower demand=lower prices)
As the global economy slows, oil prices continue to fall. Much can be learned from this fact. Mainly, that the “drill baby drill” demagogy we have seen our leadership digress into lately, is completely misguided. The most important weapon against high oil prices is our ability to lower demand. Unfortunately, demand is currently being lowered due to our financial crisis, rather than a shift in our energy policy. Nonetheless, one lesson that should be learned is that once we get our economy back on track and oil prices begin to trend back up, the solution is to decrease demand through a comprehensive shift in energy policy, rather than a politically motivated drop in the bucket from increased drilling. READ MORE
The next war will really be for oil and resources
Energy policy is another place where both parties have utterly failed to provide leadership. Like Bill O’Reilly or not, he is right about this– if we don’t put together a comprehensive energy policy that emphasizes domestic alternative energy generation, we will end up in a third world war. And as DamonClifford.com puts it (quoting the late George Carlin), “The planet has been around for billions of years, while humans have only been around for a hundred thousand years (give or take a couple thousand years). If we destroy ourselves, the planet will continue on without us, just like it always did before us.”
Politicians not alone in failing to comprehend importance of enviro and energy policy
A recent poll found that the public, when asked what issue ranked as their “one or two most important reasons” for supporting a candidate, ranked “environment/global warming” dead last and “energy/energy plan” as nineteenth most important (out of twenty-two total issues). The complete break-down of this Gallup poll can be found here.
The lack of interest in a candidate’s enviro and energy policies was seen across party lines, with only two percent of Obama supporters ranking “environment/global warming” among their top issues, while no McCain supporters listed either issue among their topic reasons.
What the public apparently fails to understand is that many of the issues that they list as being important, such as the economy and national security, are both inexorably tied to climate change and energy policy. But instead of explaining this fact to the public, the candidates merely mimic the widespread lack of concern and focus on short-term, sound bite issues like “drill now.”
