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Why Is Obama Cuddling Up to Karl Rove and His Gas Drilling Friends?
Nora Eisenberg, Alternet
Rove pronounced the movement for clean energy dead at a natural gas drilling conference. But a massive protest outside reveals just the opposite.
In the days following Tuesday’s election, President Obama’s first peace offering to hardliners across the aisle was telling: “We’ve got, I think, broad agreement that we’ve got terrific natural gas resources in this country,” he said. At the same time he was giving the thumbs-up for natural gas drilling, Karl Rove was doing the same, appearing as the keynote speaker at Pittsburgh’s David Lawrence Convention Center for the DUG (Developing Unconventional Gas) East Coast conference on hydraulic fracturing forF natural gas in the Marcellus Shale.
The Marcellus Shale is a rock formation with natural gas reserves that lies under parts of New York, West Virginia, Ohio and Pennsylvania, where energy gas companies have been using a controversial technique called hydraulic fracturing (or fracking) to extract gas. The practice has come under intense scrutiny recently after reports of water contamination and other environmental violations by gas drilling companies. This didn’t stop some 2,200 energy executives gathered at the three-day conference focused on the technology, finances, and legal challenges of fracking in the largest of the nation’s methane-rich shale formations. DUG, a conference developed by Hart Energy, an information and publishing arm of the energy industry, runs yearly conferences, last year adding DUG East as the controversial technology moved eastward from Texas and the Rockies to Appalachia’s Marcellus Shale.
(5 November 2010)
A Taxpayer-Funded Sucker Play for the 21st Century
Jeff Siegel, Energy and Capital
… It doesn’t take a rocket scientist to know that much of our economic burden today can be traced back to our reliance on fossil fuels.
You may remember earlier this year when the Environmental Law Institute released a report that showed subsidies for fossil fuels totaled approximately $72 billion from 2002 to 2008. During that same time period, subsidies for renewables came to about $29 billion.
And of those renewable subsidies, more than half were set aside for corn-based ethanol — providing even more kickbacks for an already heavily-subsidized agricultural system that typically excludes small local and organic farms.
You can read that details of that report here.
There was also an interesting study that came out a few years ago that showed the security costs of having the U.S. military protect the oil supplies of the Persian Gulf. That bill came to around $44 billion in 2007.
And then there was that DOE study in 2000 which found that oil supply disruptions, price hikes, and loss of wealth suffered through oil market upheavals have cost the U.S. economy around $7 trillion (in 1998 dollars) over the thirty years from 1970 and 2000.
My friends, that’s more than half the U.S. national debt!
Now you won’t see any of this stuff figured into the equation when you pull into the gas station… But the truth is, if we weren’t directly and indirectly subsidizing our reliance on oil, we’d be shelling out anywhere between $8 to $10 a gallon for 87 Octane.
(8 November 2010)
UC Davis study: Stock market expectations suggest that oil will run dry before substitutes roll out
Press release, UC Davis
At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations.
The forecast was published online Monday (Nov. 8) in the journal Environmental Science & Technology. It is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.
“Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective,” said study author Debbie Niemeier, a UC Davis professor of civil and environmental engineering.
Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.
Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.
“Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities,” said Malyshkina. “As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
Niemeier said the new study’s findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development and natural ecosystems.
“We need stronger policy impetus to push the development of these alternative replacement technologies along,” she said.
The paper is entitled “Future Sustainability Forecasting by Exchange Markets: Basic Theory and an Application”.
Setting sustainability targets and evaluating systems progress are of great importance nowadays due to threats to the human society, to economic development and to ecosystems, posed by unsustainable human activities. This research establishes a probabilistic theoretical approach based on market expectations reflected in prices of publicly traded securities to estimate the time horizon until the appearance of new technologies related to replacement of nonrenewable resources, for example, crude oil and oil products. To assess time T when technological innovations are likely to appear, we apply advanced pricing equations, based on a stochastic discount factor to those traded securities whose future cash flows critically depend on appearance of such innovations. In a simple approximation of the proposed approach applied to replacement of crude oil and oil products, we obtain T ? (P0oil/C0)·ln (?·P0oil/P0alt), where P0oil and P0alt are the current aggregate market capitalizations of oil and alternative-energy companies, C0 is the annual aggregate dividends that oil companies pay to their shareholders at the present, and ? is the fraction of the oil (oil products) replaced at time T. This formula gives T ? 131 years for replacement of gasoline and diesel. The proposed market-expectations approach may allow policymakers to effectively develop policies and plan for long-term changes.
(9 November 2010)
Direct link to the paper at the journal Environmental Science and Technology. The study itself is now available online for $30 for 48 hours of access. -BA