Insight and inspiration in turbulent times.
Coal still plays a dominant role in the U.S. energy mix, accounting for almost 45% of American electricity production. But the economics of coal continue to change, making the resource look far less attractive today than it once was.
The Carbon Tracker initiative is a new way of looking at the carbon emissions problem. It is focused on the fossil fuel reserves held by publically listed companies and the way they are valued and assessed by markets. Currently financial markets have an unlimited capacity to treat fossil fuel reserves as assets. As governments move to control carbon emissions, this market failure is creating systemic risks for institutional investors, notably the threat of fossil fuel assets becoming stranded as the shift to a low-carbon economy accelerates.
The economy is closely linked with the physical resources that underly it. Most economists assume debt can rise endlessly, just as they assume GDP can rise endlessly. But if there really is a limit that prevents oil supply from rising endlessly, it seems to me that there is also a corresponding limit that prevents debt from rising endlessly.
On two past occasions, the average annual oil price has hit $100 per barrel and this has been followed by recession. At time of writing (7th July) the annual average for Brent was $95.4, on course to breach $100 some time in September. Will history repeat itself? Or has the global economy grown immune to high energy prices?
For years now, everyone thought that natural gas was cleaner than coal and more benevolent than oil. The blue flame just burned purely and wasn’t nearly as complicated or carboniferous as a lump of, well, bituminous coal…But shale gas, methane trapped in hellishly deep rock formations, has challenged this dated perception. In fact, the very stuff that energy experts champion as North America’s new energy wunderkind may be dirtier than coal, if not as extreme as Alberta’s dirty bitumen.
As we lament the launching of the last U.S. space shuttle mission, we should pause for a moment and reflect on what it really means. Ironically, the first moon landing happened one year before America reached its domestic peak in oil production, which likely better explains more than any other single factor why the space program failed to advance after Apollo program wrapped up.
A weekly roundup of peak oil news, including:
-Oil and the global economy
-Venezuela
-China
-Pakistan
-Quote of the week
-Briefs
The following POP QUIZ is brought to you in part by the American Petroleum Institute:
Which sounds better? A) The Obama administration should be doing more to develop U.S. oil-and-gas reserves. Or, B) The Obama administration should be doing more to deplete U.S. oil-and-gas reserves.
Since Congressman Fred Upton has become the chairman of the House Energy and Commerce Committee the U.S.-Canadian border seems to have vanished when it comes to energy.
Oil prices surged again this week on news of tightening US crude stocks. Prices are remaining bullish despite concerns about the Eurozone, and Chinese manufacturing figures being at their lowest for two years, as the authorities there move to calm inflation…
A midweekly roundup of peak oil news.
A chart in the World Economic Forum’s “Global Risks 2011” sets out all the risks they see in the world on a matrix which positions the various risks by their perceived impact on the global economy and by the perceived likelihood of their happening. What you might expect to be at the top, given recent media reports, would be the threat of terrorism or perhaps some hideous computer virus that knocks out nuclear power station. But no. There at the top, leading the pack, are climate change, ‘extreme energy price volatility’ and fiscal crises.
