Thursday, November 29, 2007

Deep Water Wind in Scotland is a good sign for Texas

The Wall Street Journal ran an interesting story today about the installation of the world's two largest wind turbines in deep water off the east coast of Scotland. The United Kingdom has rapidly declining oil and gas production in the North Sea, requirements to generate 20% of their power from renewable sources by 2020, and excellent off-shore wind. Because they are concerned about unemployed energy sector workers from the loss of oil and gas production, the idea is to convert them into wind energy workers, which also allows industry to take advantages of its deep-water assets (that is, its platforms), while making progress towards their renewable targets. Seems promsing.

I often joke that the wind is where the people are not, because no one wants to live where it's windy. Except for the Scots. And now they can turn their hardy indifference to wind into a money maker.

Sounds like a great idea, and Texas can do something similar. We have extensive expertise in offshore construction, excellent wind in the Gulf of Mexico, and declining oil and gas production. Maybe it's time for us to accelerate our offshore wind farm construction? The only thing we lack are similarly aggresive renewable power targets for 2020...

....oh, and a whole lot of money. Deep water wind capacity is almost a factor of ten more expensive per kilowatt than wind-fueled capacity in the West Texas flatlands. But, at least it doesn't ruin any rachers' views.

Monday, November 5, 2007

Oil and Gas University Is Now in the Hydrogen Business

The University of Texas, heretofore known as an oil and gas university, is now officially in the business of producing, dispensing and using hydrogen as a fuel for transportation. See this article here: Texas Builds Hydrogen Depot
Why on earth would they want to take perfectly good natural gas and convert it to hydrogen?

Tuesday, October 16, 2007

The Dragon Produces a Lot of Oil, and Gets Rich Doing It

Many people complain about how much oil China uses. But they forget that Chinese production has been steadily increasing, and they're making a lot of money in the process. Today, the news came out that PetroChina surpassed GE to become the 2nd-largest company in the world by market capitalization (behind ExxonMobil).

Consequently, what China does with its consumption AND production is relevant to the world of energy. Is this news a sign of things to come?

Oil Prices keep rising: $88/barrel at noon today

According to Bloomberg's energy page, oil prices jumped about another $2/barrel today, reaching $88/barrel at noon today. These high prices set the stage for the Association for the Study of Peak Oil (ASPO) conference taking place this week in Houston.

Friday, October 12, 2007

Energy prices are putting cost pressure on food and consumer goods

No surprise here.

Last week the Austin American-Statesman reported that rising grain and energy prices are pushing up the bills for groceries for two reasons: 1) as energy prices go up, it becomes more expensive to produce food because of the petroleum and natural gas that goes into fertilizers, pesticides and mechanized agriculture, and 2) our fetish for ethanol is pushing up grain prices and consequently feed prices are higher.

Today, the New York Times is reporting that higher energy costs are pushing up producer prices for goods other than food, primarily becuase the cost of the raw materials (e.g. crude oil for plastics, etc.) have increased.

These higher prices come at an inopportune time for the markets, but might help the U.S. transform its economy into one that emphasizes resource efficiency.

Saturday, October 6, 2007

The Importance of Cushing

Why on earth is Cushing, Oklahoma so important to world energy markets? The answer: because it's home to a major oil depot that holds approximately 10% of the nation's non-Strategic stockpiles (about 32 out of 320 million barrels, depending on the season). See this article in the Wall Street Journal for more information: Where has all the oil gone?

Consequently, the price for West Texas Intermediate (WTI) light, sweet crude as delivered to Cushing has become one of the global oil price benchmarks. For example, indexes of energy prices often include "WTI Cushing Spot" as one of the standard listings. Here's the way it's listed at Bloomberg news: Bloomberg Energy Prices

Interestingly enough, the Wall Street Journal is reporting that Cushing's inventories are much lower than normal because today's spot prices are higher than the prices for future delivery.

Wednesday, September 19, 2007

Buffett, Gates and Pickens are coming to Texas to make money

Warren Buffett, Bill Gates and T. Boone Pickens, three men who know how to make money, are coming to Texas to make even more money by investing in power generation and transmission. They see a future of increasing electricity consumption in Texas, a business climate that is favorable to wind, and a deregulated wholesale electricity market that allows prices to float higher than the areas of the state (and nation) where rates are fixed. Their investments and the high prices both strike me as good things. The investments help push cleaner power plants (such as Pickens' large-scale wind farms) onto the grid, and the high prices help create customer demand for alternative electricity sources. Wind-win.

Here's the link with the story: Buffett, Gates, Pickens May Profit From Texas Power Shortage

Monday, September 17, 2007

Oil keeps going up and up...

Oil hit a new price record today (in nominal 2007 dollars, not real inflation-adjusted dollars). You'd think by now the markets would have brought alternative supplies or fuel efficient autos to market. What's the hold-up?

Thursday, September 6, 2007

We have too much gas

According to the Wall Street Journal today, Natural-Gas Producers Cut Output because we have too much gas.
Amid an abundance of natural-gas supplies and soft prices, gas producers are starting to pull the plug.

Gas prices have been dropping, and so producers are dialing back their output. Is this just the consequence of market forces working their magic (e.g. prices have been high the last few years, so demand has dropped), or an annual seasonal effect in the for which gas demand is low this time of year? Having an abundance of gas and dropping prices stands in stark contrast with oil, where prices are well over $70/barrel again (see here: Energy Prices).

Monday, July 23, 2007

We should care about China's emissions

It was reported today in the Wall Street Journal that Huge Dust Plumes From China Cause Changes in Climate. The U.S. needs to engage China on emissions related to air quality and climate because there are no borders in the atmosphere between our countries. Their pollution arrives in the U.S. with only a few days' delay.
An outpouring of dust layered with man-made sulfates, smog, industrial fumes, carbon grit and nitrates is crossing the Pacific Ocean on prevailing winds from booming Asian economies in plumes so vast they alter the climate. These rivers of polluted air can be wider than the Amazon and deeper than the Grand Canyon.

We care about this river of fumes because they land in L.A. and San Francisco.
On some days, almost a third of the air over Los Angeles and San Francisco can be traced directly to Asia. With it comes up to three-quarters of the black carbon particulate pollution that reaches the West Coast, Dr. Ramanathan and his colleagues recently reported in the Journal of Geophysical Research.

As long as we continue to ignore climate change, it gives China a free pass to ignore their emissions, for which we pay the price.

Thursday, July 19, 2007

Watch what you eat, or you might emit gases

According to the Telegraph today, Eating beef ' is less green than driving'. I'm not certain how the Japanese researchers cited in this article did their analyis or what their assumptions are, but the concept that eating energy-intensive foods such as meat leads to high greenhouse gas emissions is an important one, so it's good to see articles on this topic.