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Lessons From Russia and China

Warren Brown, Washington Post
…It makes me wonder: There is Russia, awash in so much oil and filled with so much natural gas that many countries in Asia and Europe, as well as the United States, are scampering about, trying to tap into its natural resources. But there also are Russian consumers hustling for economical automobiles and trucks.

Certainly, it can be argued that the Russians are buying little cars such as the Ford Focus and Ford Fiesta because they are all the nascent Russian middle class can afford at this time. But there is ample evidence, as indicated by Russia’s move toward diesel and other more energy-efficient fuels, that the Russian government has somewhere in its psyche tucked away the thought that it isn’t going to make the same energy-depleting, egregiously consumptive mistakes that we’ve made in the United States.

The Chinese, to cite another example, make no bones about their intentions in this regard. In its various 50-50 partnerships with Western automobile manufacturers and suppliers, China is learning what to do and, more important, what not to do. As shown by the increasingly sophisticated cars from Chery Automotive Co. in Wuhu and the Great Wall Motor Co. in Hebei, China has quickly mastered the art of making cars the traditional Western way.

But the Chinese government has served notice to automotive manufacturers and consumers that it isn’t going to tolerate the hell-bent-for-torque-and-horsepower competition that has characterized so much of the Western approach to automobiles. Accordingly, the government of the People’s Republic of China is putting financial and political muscle behind a push for cleaner, more fuel-efficient automobiles.

Meanwhile, the leaders of the U.S. government, mired in the madness and intellectual sadness of national midterm elections, go about their careless, cheery way promising an over-indulged and self-indulgent electorate that they are not going to raise taxes on gasoline; will not consider taxing things such as horsepower, engine displacement and vehicle size; and will do their darnedest to keep supplying them with the cheapest gasoline in the developed world.

The same politicians, the ones who decry the humongous quarterly profits of America’s oil producers — who would be better characterized as the nation’s leading oil importers — then quietly go about the business of giving those companies every conceivable tax break without any meaningful legislation demanding that Big Oil step up the exploration, development and distribution of alternative fuels.

Oil-fed economies are growing and taking off all around us, using up more of a globally diminishing resource, but at the same time passionately working to put in place alternative fuels and other energy-conservation programs in anticipation of an eventual turn away from oil. But we in the United States are still trying to figure out, without much enthusiasm, how to get to the departure gate.
(5 Nov 2006)

‘Energy independence’ on Bush agenda

Krishna Guha and Fiona Harvey, Financial Times via MSNBC
The Bush administration will soon launch a big “energy independence” initiative, likely to include re-newed emphasis on biofuels, as part of an attempt to regain the political initiative following the midterm elections.

Plans to develop technology to make fuel from plant waste could be a big beneficiary of the plan, Alan Hubbard, the top White House economic advisor, has suggested.

…Mr Hubbard, director of the National Economic Council, said in an interview with the Financial Times that the White House would be able to work with the new Congress on energy, as well as a number of other big domestic issues, including education, immigration and reform of Social Security, Medicare and Medicaid.

“I actually think from talking to Democrats they have the same concerns we do,” Mr Hubbard said. “They are concerned about energy, and recognise that we need to accelerate our efforts to cure our addiction to foreign oil.”

…Mr Hubbard said the White House is “absolutely” committed to supporting ethanol made from corn and sugar. But he said it is also very excited about the prospects for “cellulosic ethanol” made from plant waste, which could ultimately produce five times the amount of fuel generated from corn. There is “huge opportunity” here, he said.

At present the technology to make cellulosic ethanol is only in its early stages, but it has attracted the interest of Royal Dutch Shell, which has formed a partnership with Iogen Corporation, a Canadian biotech company. BP is investing in an alternative biofuel called biobutanol with DuPont.
(9 Nov 2006)
UPDATE: Added this entry. Cellulosic ethanol is better than many of the other directions President Bush might have gone. It is still a woefully inadequate response, but to be fair to Mr. Bush, the Democrats have not gone much further in dealing with energy. -BA

UPDATE (Nov 10): Comment from Jerome a Paris

Attorney David Hayes sees push for environment policy change in new House
(video and transcript)
Monica Trauzzi:, E&E TV
With the Democrats poised to take over leadership of the House at the start of the next session of Congress, questions are arising as to the amount of emphasis that will be placed on climate change and other environmental issues. During today’s OnPoint, David Hayes, partner and Global Chair of Latham & Watkins’ Environment, Land & Resources Practice and former deputy secretary of the Interior, says the new Democratic leadership will want to be progressive on the environmental front.

Hayes sees a big push ahead on creating technologies for alternative energy but also talks of a vigorous drilling debate as the United States continues to try to meet its growing energy demands. Hayes also comments on how changes in the House Resources Committee will affect land conservation, water conservation and the Endangered Species Act.
(9 Nov 2006)

An Acceleration Toward Alternative Fuels?

Steven Mufson and Sholnn Freeman, Washington Post
The possible shift in Congress on energy issues may be summed up in one race: House Resources Committee Chairman Richard W. Pombo (R-Calif.), who received substantial contributions from oil and gas companies, lost his seat to Jerry McNerney, who runs a start-up company that hopes to make wind turbines.

What will that change mean for energy legislation? Offshore drilling was the main energy initiative this year. Pombo had pushed hard to open up U.S. waters to more oil and natural gas exploration, but he would not accept a Senate version limited to a new part of the Gulf of Mexico. Drilling advocates now hope the House will compromise and accept the Senate version.

Most other energy issues will have to go through Rep. John D. Dingell of Michigan, the ranking Democrat and presumptive chairman of the House Energy and Commerce Committee. If the Senate changes hands, Jeff Bingaman of New Mexico would take the helm of the Energy and Natural Resources Committee.

In a conference call yesterday, Dingell said he would back measures to promote new energy technologies, diesel fuel and cars, electric vehicles, and conservation in buildings. But before raising automobile fuel-efficiency standards, he said attention should be paid to the ability of the industry to absorb the economic impact of these changes. His opposition to higher mileage standards could put him on a collision course with other Democrats. Public pressure for action has dissipated as gas prices have slid, but environmentalist forces within the Democratic party are claiming a mandate
(9 Nov 2006)

House Energy Chief’s Loss Opens Door for Energy Policy Shift

Maya Jackson Randall, Dow Jones via Rigzone
With the ouster by California voters of U.S. House Resources Committee Chairman Richard Pombo, R-Calif., energy policy changes are expected next year when Democrats control the House of Representatives.

Analysts are already predicting that a Democrat-controlled House will put energy companies on the defensive as lawmakers seek to tax oil companies’ profits while boosting renewable energy, climate change and energy efficiency policies. Large energy company stocks, particularly Big Oil, appeared unaffected, however.

Shares of Exxon Mobil Corp. (XOM), the largest U.S. oil producer, were trading 83 cents higher Wednesday at $73.36. ConocoPhillips (COP) shares were up $1.38 at $62.36, while Chevron Corp. (CVX) shares were 40 cents higher at $69.31, as of 1:15 p.m. EST.

Pombo’s loss of California’s 11th District is symbolic of an expected shift in energy policy.
(9 Nov 2006)

Dinning calls nuclear power oilsands option

Calgary Sun
VERMILION — Alberta Conservative leadership candidate Jim Dinning says the province must look at nuclear energy as a way to power development of the oilsands.

Premier Ralph Klein has long opposed nuclear power because of concerns about the safe disposal of nuclear waste. But Dinning, a former provincial treasurer, told a candidates’ forum last night nuclear power must be an option.
(8 Nov 2006)
Related: Retiring Alberta premier says he’s considering offer to promote nuclear power