Παρασκευή, Ιουνίου 23, 2006

The New York Review of Books: The Threat to the Planet

The New York Review of Books: The Threat to the Planet

By Jim Hansen

The Weather Makers: How Man Is Changing the Climate and What It Means for Life on Earth
by Tim Flannery

Atlantic Monthly Press, 357 pp., $24.00

Field Notes from a Catastrophe: Man, Nature, and Climate Change
by Elizabeth Kolbert

Bloomsbury, 210 pp., $22.95

An Inconvenient Truth: The Planetary Emergency of Global Warming and What We Can Do About It
by Al Gore

Melcher Media/Rodale, 325 pp., $21.95 (paper)

An Inconvenient Truth
a film directed by Davis Guggenheim

Jim Hansen is Director of the NASA Goddard Institute for Space Studies and Adjunct Professor of Earth and Environmental Sciences at Columbia University's Earth Institute. His opinions are expressed here, he writes, "as personal views under the protection of the First Amendment of the United States Constitution."


Animals are on the run. Plants are migrating too. The Earth's creatures, save for one species, do not have thermostats in their living rooms that they can adjust for an optimum environment. Animals and plants are adapted to specific climate zones, and they can survive only when they are in those zones. Indeed, scientists often define climate zones by the vegetation and animal life that they support. Gardeners and bird watchers are well aware of this, and their handbooks contain maps of the zones in which a tree or flower can survive and the range of each bird species.

Those maps will have to be redrawn. Most people, mainly aware of larger day-to-day fluctuations in the weather, barely notice that climate, the average weather, is changing. In the 1980s I started to use colored dice that I hoped would help people understand global warming at an early stage. Of the six sides of the dice only two sides were red, or hot, representing the probability of having an unusually warm season during the years between 1951 and 1980. By the first decade of the twenty-first century, four sides were red. Just such an increase in the frequency of unusually warm seasons, in fact, has occurred. But most people —who have other things on their minds and can use thermostats—have taken little notice....

Econbrowser: Oil market predictions

Econbrowser: Oil market predictions: "

Oil market predictions

Cambridge Energy Research Associates seems to be substantially less optimistic than they were a year ago.

CERA received a lot of publicity last summer with their predictions of a coming glut on world oil markets. On June 21, 2005, CERA advised:

[S]upply could exceed demand by as much as 6 to 7.5 million barrels per day (mbd) later in the decade, a marked contrast to the razor-sharp balance between strong demand growth and tight supply that is currently reflected in high oil prices hovering around $60 a barrel....

If demand growth averages a relatively strong 2.2% through 2010, prices could weaken from recent record highs and slip well below $40/bbl as 2007-08 nears. If demand growth were notably weaker, a steeper price fall would be conceivable...

Global oil consumption in fact grew by a more modest 1.6% in 2005, and yet oil prices have risen since CERA made these predictions to a current value near $70 a barrel.

The Oil Drum notes that, with substantially less fanfare, CERA is now offering a much less sanguine assessment of where things are headed. The Oil and Gas Journal reports:

"Incremental additions to refining capacity over the next 2 years [will] be insufficient to meet new global demand," CERA predicts.

For the short term, CERA expects the US industry to use "innovative" methods this summer to overcome logistical hurdles involving the switch to ethanol from methyl tertiary butyl ether (MTBE) in gasoline. More than 10% of gasoline volumes in some areas are affected.

If the US Environmental Protection Agency grants waivers already authorized by the Bush administration for deliveries of nonreformulated gasoline to shortage-prone areas, supplies could be increased through imports as well.

CERA says it also expects US refiners to ramp up to full production as maintenance programs are complete and hurricane-damaged refineries come back on stream.

Nevertheless, such measures may not be enough to lower gasoline prices significantly this summer, CERA says, because of the "continued susceptibility of crude oil prices to geopolitically upward pressure" and because refining capacity additions will lag incremental demand growth, causing global refining tightness. CERA analysts expect global markets to remain tight "with exposure to potentially sharp price upswings-- even in response to small, unexpected disruptions in refinery operations."

Source: Jay Saunders, EIA 2005 Midterm Energy Outlook

CERA's new-found pessimism in part recognizes the interaction between refining capabilities and the deteriorating quality of crude that is available to increase global production. On this theme, I have been wondering what accounts for the 400,000 barrel a day drop in Saudi production that apparently occurred in April and May, and came across this explanation from Reuters for at least part of the answer:

China will extend a 50,000 barrel per day (bpd) cut in Saudi crude oil imports into July and August after some refiners struggled to cope with new higher-sulphur supplies, industry officials said.

China contracted to buy 500,000 bpd of Saudi crude in 2006, but cut that back by 10 percent in the second quarter after refiners ill-equipped to handle the kingdom's mainly heavy-sour oil were forced to slow production after running the grades, the officials said.

That is consistent with the conjecture that the 9.5 million barrels per day the Saudis were producing in 2005 can really only be maintained with additional investing in capacity to refine the lower-quality crude they are trying to sell.

Data source: EIA and recent press reports

It's also consistent with another perspective that I've been advocating for quite a while. Many have articulated a vision of "peak oil" as akin to a cliff that we suddenly wake up to find ourselves to have driven off. I instead envision it as a more gradual process in which we continually pay more for oil, trying to extract lower quality stuff from harder-to-get-at locations and with increasing geopolitical risks. When asked, "what will peak oil look like?", my answer has been, "perhaps a lot like the last two years".

Elsewhere in the news, Green Car Congress noted the release yesterday of the Energy Information Administration's new report on long-term energy prospects. The EIA's benchmark forecast calls for global petroleum consumption to grow by 1.4% per year through 2030.

And where's all that new oil supposed to come from? EIA is counting on Saudi Arabia, for example, to increase its capacity to 14.4 mbd by 2010 and 17.1 mbd by 2030.

I wonder if that's another forecast that we'll see get revised."

Πέμπτη, Ιουνίου 08, 2006

Ανανεώσιμες πηγές VS πετρελαίου

Το παρακάτω άρθρο είναι δημοσιευμένο στην Καθημερινή στις 13-05-06. Ωστόσο είναι πολύ ενδιαφέρον και ιδιαιτέρως ενοχλητικό για την κατάσταση της Ελλάδας.

"Στην κρίση του πετρελαίου, μια σειρά από χώρες απαντούν με συγκεκριμένα μέτρα για την εκμετάλλευση των ανανεώσιμων πηγών. Μην εκπλαγείτε που δεν θα διαβάσετε την Ελλάδα στον κατάλογο. Δυστυχώς, η αναφορά είναι μόνο αρνητική[...] Eίμαστε μια πετρελαιόπληκτη χώρα. Το 73% της συνολικής κατανάλωσης ενέργειας προέρχεται από πετρέλαιο. Η βενζίνη γίνεται είδος πολυτελείας, οι τιμές όλων των προϊόντων ανεβαίνουν λόγω του «μαύρου χρυσού»"


The Oil Drum | Discussions about Energy and Our Future

The Oil Drum | Discussions about Energy and Our Future

The EIA's International Petroleum Monthly came out on Monday, but I was out of town so didn't get to updating the plateau graphs until tonight (I build them in part out of the EIA's table 1.4, and in part from the IEA's monthly Oil Market Reports). You'll recall that last time the IEA's optimism about March, and even more heady optimism about April, was causing the moving average graph to lean up a little in the plateau.

The EIA is less excited about March - only around 84.0mbpd, down 400kbpd from February. This also casts doubt on the IEA's April figure, I think, but we'll see in a few days.

Average daily oil production, by month, from various estimates. Click to enlarge. Believed to be all liquids. Graph is not zero-scaled. Source: IEA, and EIA. The IEA raw line is what they initially state each month. The IEA corrected line is calculated from the month-on-month production change quoted the following month.

There's more... (338 words) | Comments (12) | Permalink

Here's the graph of the average of the two with moving averages. It has flattened a shade in light of the latest data point.

Average daily oil production, by month, averaged from estimates by the EIA and IEA, together with 13 month centered moving average, and recursed moving average of the moving average. The last data point in the monthly data is from the IEA's preliminary estimate alone, and the moving average windows are reduced at the graph edges to only include the data that exists. The squares represent the last point on the correspondingly covered curve where the entire window has full data. Believed to be all liquids. Graph is not zero-scaled. Click to enlarge. Source: IEA, and EIA.

I also draw your attention to this interesting piece at Econbrowser, where Professor Hamilton joins those of us wondering why the Saudi's are claiming they can't find customers so they have to throttle back production when prices have not gone down.

Past coverage relevant to the plateau:

Other relevant coverage:

Τετάρτη, Ιουνίου 07, 2006

Environmental Economics: Tradeable Gas Rights

Environmental Economics: Tradeable Gas Rights: "

Tradeable Gasoline Rights, by Martin Feldstein, Commentary, WSJ: The rapid rise in the price of gasoline has produced calls for tougher fuel economy standards on new cars and trucks. Although reduced gasoline consumption would be good for the environment and for national security, such a regulatory change would be a mistake. A far better approach would be a system of tradeable gasoline rights, or TGRs. These could be distributed in a way that actually raises the income of a majority of households while giving everyone an incentive to reduce gasoline consumption.

In a system of tradeable gasoline rights, the government would give each adult a TGR debit card. The gasoline pumps at service stations ... would be modified to read these new TGR debit cards... Buying a gallon of gasoline would require using up one tradeable gasoline right as well as paying money.

The government would decide how many gallons of gasoline should be consumed per year and would give out that total number of TGRs. In 2006, Americans will buy about 110 billion gallons of gasoline. To keep that total unchanged in 2007, the government would distribute 110 billion TGRs. To reduce total gasoline consumption by 5%, it would cut the number of TGRs to 104.5 billion.

The government could distribute TGRs to reflect geographic differences in driving patterns. ... Businesses that use trucks would also get TGRs.

A key feature of these gasoline rights is that they are tradeable. Individuals with more TGRs than they need could sell the excess, while those who want to use more gallons than their allocation would have to buy extra TGRs. The gasoline companies could act as clearing houses for these trades, using their gasoline pumps to sell TGRs in the same way that they sell gasoline or to buy TGRs in exchange for the cash needed to purchase gasoline. Other institutions like banks could also trade TGRs for cash. And individuals could of course buy and sell TGRs among themselves by letting others use their card.

The market price of a TGR would depend on the number of TGRs that the government distributed relative to the number of gallons that households would buy if there were no TGR system. The smaller the number of TGRs, the greater would be the price per TGR... The money price of gasoline would continue to reflect the world price of oil and the local cost of refining and distribution.

If the price of a TGR turned out to be 50 cents, an individual who buys an extra 20 gallons of gasoline would use up $10 worth of TGRs. If he avoids the purchase -- by driving less, driving at speeds that use less gas, or driving a more fuel-efficient car -- he could sell the 20 TGRs for $10.

The 50 cent price of the TGR would have the same incentive effect as a 50 cent gasoline tax. But while a gasoline tax lowers everyone's real income, the TGR system creates winners as well as losers. Someone who receives 800 TGRs for a year but only needs 500 would pocket $150 by selling his unwanted TGRs. But even such individuals would still face the right incentive: Every extra gallon consumed would reduce their net cash by 50 cents.

Advocates of a gasoline tax argue that it would produce extra revenue that could be used to reduce the budget deficit or to finance equally large cuts in personal taxes. ... [But] it is hard to believe that Congress would now respond to the public's unhappiness over high gasoline prices by enacting a gasoline tax that would raise the price even more.

That aversion to a higher gasoline tax is why tougher mileage standards for new cars is back on the legislative table. They would, however, do virtually nothing to lower the price of gasoline. And if individuals want to economize on gasoline by driving smaller or more fuel-efficient cars, they can do so now without government action. ...

Higher gas mileage standards would reduce gasoline demand in a very inefficient way by focusing exclusively on the rated mileage of new cars. Separate fuel efficiency standards for each type of vehicle -- one of the options now being considered -- would be even worse because it would provide no incentive to switch to more fuel-efficient cars.

Requiring higher mileage standards on new cars would do very little to reduce total gasoline consumption in the near term because each year's new cars are only about 10% of the total cars on the road. Unlike the system of TGRs that raises the effective cost per gallon, the new car standard would do nothing to change the behavior of owners of existing cars. But the TGR system would cause owners to economize on gasoline by driving fewer miles, driving at speeds that use less gasoline, using tires that improve miles per gallon, and servicing their engines to maintain fuel efficiency. And of course the higher effective cost of gasoline would also cause new car buyers to prefer more fuel-efficient vehicles.

In short, a system of tradeable gasoline rights would be better than either higher taxes or tougher new car regulations. That a majority of households could benefit from the TGR system while all households would have an increased incentive to economize on gasoline is both an economic and a political advantage. It would be an efficient way to reduce gasoline that Congress could actually pass.


Environmental Economics: Exxon's Valdez settlement

Environmental Economics: Exxon's Valdez settlement: "Just a reminder ($92 Million More ...):

In March 1989, the Exxon Valdez supertanker, with an inebriated captain, ran aground on Bligh Reef, ruptured and spilled 11 million gallons of crude oil into the sound, contaminating about 900 miles of shoreline.

In 1991, the State of Alaska and Exxon reached a $1 billion natural resource damages settlement -- $900 million to be paid out over a number of years and $100 million to be paid this year, maybe, if the cleanup wasn't complete.

Well, the cleanup isn't complete according to the state and, naturally, Exxon disagrees.

'No one doubts there is ongoing damage,' said Eleanor Huffines, of the Alaska office of the Wilderness Society. 'The challenge is that the ocean is so dynamic that it will be a hard thing to do to make the connection. But since this has been the most well-studied area since the spill, they have been able to document the lack of recovery.'

Mark Boudreaux, the media relations manager for Exxon Mobil, focused on this uncertainty in a statement responding to the action. A link between the remaining oil and effects on wildlife, Mr. Boudreaux said, 'is no more than a hypothesis.' He added, 'Nothing we have seen so far, however, indicates that this request for further funding from Exxon is justified.'

The thing about the Exxon settlement that is irritating to economists is that it was NOT a $1 billion settlement ... since it was paid out over a number of years. Consider the $100 million (the state is asking for $92 million) to be paid in 2006, 15 years after the 1991 settlement. With a 3% inflation rate, $100 million in 2006 is the same as $64.2 million in 1991 dollars. Exxon's lament, and Alaska's boast, over the amount of the settlement was bogus.

The thing that is irritating is not that Exxon should be forced to pay $1 billion in real dollars, maybe the nominal payments are about right (although the State of Alaska's funded research found that the damages were $3 billion), but that people who know the difference between real and nominal dollars distort the facts."

Environmental Economics: It's official, green vs green

Environmental Economics: It's official, green vs green: "Continuing the theme, the NYTimes has an article focusing on the internal enviro battles over wind power (Debate over wind ...):

So when it comes to wind, the environmental movement is riven with dissonance and accusations of elitism. Robert F. Kennedy Jr.'s very public opposition to the 130-turbine Cape Wind energy facility proposed off Nantucket Sound has driven a wedge between activists. Dan Boone's circuit riding against wind projects, while not attracting the same celebrity notice, has exasperated many Sierra Club compatriots even more."