Saturday, December 31, 2011

Mass Megawatts Wind Power Reports First Wind-Powered Water Pump System Delivery in Colorado

Mass Megawatts Wind Power, Inc. has announced the delivery of its first wind-powered water pump system in Colorado. Construction was completed on the initial unit which provides a low-cost solution for water pump applications commonly needed on farms and ranches throughout the central plains of the United States.

The wind-powered unit provides a greener and lower-cost solution when compared to more traditional water pumping systems, including those powered by diesel generators. Water pumps are commonly used for agricultural purposes, including irrigation and for the delivery of water to livestock in remote locations.

The Company's wind-powered water pump leverages a patented wind augmenter technology to increase the wind velocity directed at the wind turbine. This, in turn, results in a significant increase in power output which provides considerable torque for mechanical applications.

The wind-powered system is designed to operate efficiently without high towers or complicated, expensive technologies. The system utilizes off-the-shelf parts, is capable of operating in lower wind-speed locations, and with reduced maintenance costs. Production of additional wind power units is underway at the company's manufacturing facility located in Morrison, Colorado.

Monday, October 17, 2011

Shell and Brazil's Cosan Launch Multi-Billion Dollar Biofuels Joint Venture

Royal Dutch Shell, the largest oil company in Europe, and Cosan Limited, the largest sugar and ethanol processor in Brazil, have formally launched a multi-billion dollar joint venture that will become the largest producer of ethanol made from sugar cane. The joint venture, called Raizen, will operate in Brazil.

Cosan has invested $3.3 billion and Shell has invested $1.62 billion in the venture. The investments include a 15.7 percent stake in enzyme producer Codexis Inc., a developer of "super-enzymes" for the faster conversion of plant waste into transport fuels, and part of Shell’s interest in Iogen Energy, which uses enzymes to break down plant waste into ethanol. Click here to read more . . . .

Sunday, October 16, 2011

US Ex-Im Bank Finances Small-Scale Renewable Energy Exports

The Export-Import Bank of the United States (Ex-Im Bank) is facilitating the sale of solar panels from California to a private sector project in Belgium under the bank's "Renewable Express" project financing program. The solar panels for the project will be supplied by Solyndra LLC, a manufacturer of photovoltaic systems headquartered in Fremont, California.

The Ex-Im Bank’s “Renewable Express” project financing program provides streamlined post-completion project financing to small renewable-power producers that meet the bank's credit standards. The bank will consider project financing for small renewable power producers seeking loans of $3 million to $10 million. Renewable Express is available for both corporate balance sheet and limited-recourse transactions that fit within the program’s parameters and where the repayment is generated from the project’s cash flows. Click here to read more . . . .

Saturday, October 15, 2011

Energy Efficient Business Attire

One hot August day, I organized a luncheon in New York City where the President of the Philippines gave a speech to about 150 bankers and business leaders. When I say it was hot, it was a day that defined sweltering. You could see the heat waves rising from the asphalt.

Arriving early to make sure everything was ready, I found that the luncheon hall had been refrigerated (air-conditioned would be a gross understatement) to feel like a walk-in freezer. The manager explained that he had turned the air-conditioning on full blast two hours earlier to get the room so cold. He said this was his standard practice during the summer months because people are pretty hot after walking a few city blocks wearing wool suits. "Don't worry," he assured me. "They'll be so hot when they get here that the room will warm up to a reasonable temperature very quickly." Click here to read more . . . .

Monday, October 10, 2011

Warren Buffett, Sustainable Energy, and American Competitiveness

Warren Buffett explains the root of his success as acting rationally about capital allocation over the long term. Our elected officials would be wise to take note of this investment advice when building a budget. By focusing on where to allocate our society's capital over the long term, we can make wiser decisions.

Start with education. In the 20th century, America allocated more capital to education than any other country in the world. This investment gave us the most highly educated and innovative workforce in the world, and it explains much of our economic dominance of the past century. But today, in the second decade of the 21st century, we are falling behind. The United States ranks 27th out of the 29 most developed countries in the percentage of college students pursuing degrees in science or engineering, and we rank 48th out of 133 developed and developing countries in the quality of our math and science instruction. Click here to read more . . . .

Sunday, October 9, 2011

Renewable Aviation Fuels Standard Gains Preliminary Approval

Biofuels may be powering airplanes sooner than you think. ASTM International, formerly known as the American Society for Testing and Materials, has given preliminary approval for airlines to use a renewable jet fuel blend that includes algae and other plants.

The new ASTM annex to the alternative jet fuel specification D7566 (Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons) details the fuel properties and criteria necessary to control the manufacture and quality of a renewable fuel to ensure safe aviation use. Click here to read more . . . .

Friday, October 7, 2011

New Study Finds Air Pollution May Trigger Heart Attacks

The American Journal of Epidemiology has published a report finding a dramatic correlation between spikes in air pollution and hospital admissions for heart attacks, suggesting that high-pollution days may trigger heart attacks in some people.

The study examined data on more than 10,000 heart attacks between 2002 and 2005. When the heart attack data were correlated with changes in air pollution levels, researchers in Italy found that an increase of 10 micrograms per cubic meter of fine particulate matter in the air correlated with a 0.01 percent increase in hospitalizations for heart attacks over the next two days. The researchers found a similar correlation between heart attacks and increases in carbon monoxide and nitrogen dioxide. Click here to read more . . . .

Thursday, October 6, 2011

New Paper Assesses the Future of Nuclear Power in a Changing World

A new paper from the American Academy of Arts and Sciences, Game Changers for Nuclear Energy, considers different scenarios for nuclear power that take into account a wide range of factors such as new technologies, accidents, nuclear terrorism, and climate change policy. The Academy previously published papers on The Global Nuclear Future in two-volumes of its quarterly journal, D├Ždalus, in 2009-10. The newest paper on "game changers" takes into account developments since then and changing perceptions of nuclear power, including the recent Fukushima Daiichi nuclear power plant accident. Click here to read more . . . .

Wednesday, October 5, 2011

1,000 MPG in Human-Electric Hybrid

A father and son team has set off from New York City in a human-electric hybrid vehicle that will take them across the country using the energy equivalent of just two gallons of gas to travel 4,000 miles. Pierce Hoover, an inventor and journalist, came up with the idea to teach his son the value of turning off a single 100 watt light bulb. That is the amount of energy they will use each day to travel across the United States.

Hoover and his 13 year-old son have embarked on this trip to publicize the energy we can all save by turning off unneeded lights and appliances. In addition to reducing our electric bills, we can also help the environment. Click here to read more . . . .

Tuesday, October 4, 2011

How Sustainable Is Your Organization?

Does your organization appreciate and understand the value of integrating sustainability in its strategic plan, as well as the very tangible benefits it creates for the organization and its community?

Today sustainability is not just a catchphrase. For many businesses, colleges and universities, and communities, sustainability is an integral part of their strategic plans and ongoing operations. Click here to read more . . . .

Monday, October 3, 2011

Green Economics: Low Standards Stifle Innovation

American Electric Power (AEP) is shelving plans for the largest Carbon Capture and Sequestration (CCS) project in the country due to the uncertain status of U.S. climate policy and the continued weak economy. "We are placing the project on hold until economic and policy conditions create a viable path forward," said Michael G. Morris, AEP's Chairman and Chief Executive Officer.

A significant part of the problem is the federal government's failure to require all power generators to lower their carbon emissions. With such a requirement, AEP and its partners would have a competitive advantage by developing cutting edge technology to reduce carbon emissions from existing coal-fired power plants. That competitive advantage would inspire others to invest in competing CCS and related technologies to lower their carbon emissions as well. Click here to read more . . . .

Sunday, October 2, 2011

Private Equity and Insurance Firms Bet Big on Renewable Energy

Private equity firm Kohlberg Kravis Roberts (KKR) joined with the world's largest reinsurance company, Munich Re, to purchase a 49% interest in solar power plants owned and operated by T-Solar Global SA. T-Solar is the largest owner-operator of solar power plants in Spain and Italy, with a generating capacity of 168 megawatts.

T-Solar will use the cash infusion to triple its solar capacity to 500 megawatts by 2014. As part of the deal, KKR and Munich Re have options to invest in future plants.  Click here to read more . . . .

Tuesday, September 20, 2011

Newly discovered or newly accessible sources of oil in Canada, the US, Brazil, Colombia, and other countries may make the Americas a larger source of petroleum than OPEC. If that results in lower prices and fewer wars to protect oils fields, will we still care about energy conservation and the environment?

Saturday, September 17, 2011

New evidence suggests that Iran is making progress towards nuclear weapons capabilities.

Friday, September 16, 2011

Vince Lombardi famously said, "Some people try to find things in this game that don't exist but football is only two things - blocking and tackling." David Brooks has similar advice for President Obama today: Don't get fancy trying to solve a problem that needs to work itself out. All you can do is block and tackle. Create jobs now with basic infrastructure spending. See The Planning Fallacy

Monday, September 12, 2011

75% of emerging infectious diseases originate when microbes jump from wildlife to humans. If we don't start paying attention to Mother Nature, she knows how to get our attention.

Sunday, September 11, 2011

Oil and coal get billions of dollars in direct and indirect subsidies, so renewable energy cannot compete unless we provide more subsidies for wind, solar, etc., and now there's a plan in the UK to subsidize the importation of timber so it can be burned as a "lower carbon alternative" to coal All of this serves only to distort the price signals necessary for rational decision-making in a free market, pushing citizens and governments into financial ruin, while multinational energy companies laugh all the way to their (offshore tax haven) bank.

Friday, September 9, 2011

Th head of the Deepwater Horizon oil spill panel says that the U.S. should plan to aid Cuba in case of an oil spill off the coast of Florida: Not sure whether to be optimistic that we now have the relevant expertise, or depressed that Cuba could be drilling so close to our shores.

Thursday, September 8, 2011

An interesting op-ed in today's New York Times argues that all of our individual actions (such as buying carbon offsets for our airplane flights, or not using plastic bags) will have little impact on global carbon emissions, and that we need macro solutions. See Going Green but Getting Nowhere Agreed. But only to a point. All those individual actions create an awareness that ultimately lead to changes in public opinion, which lead to changes in public policy. Macro solutions start with individual choices.

Wednesday, September 7, 2011

We all know that there is a difference between spending and investing. The same holds true for governments. Spend money on one time benefits, and the money is gone. Invest in new infrastructure, and you build an asset that can continue to create value for decades or longer. Which is why debt-ridden Greece is proposing a huge solar power expansion Sounds like spending now. But when Greece is paying nothing in fuel costs for a big % of its energy, it will look like an investment.

Tuesday, September 6, 2011

GM wants to build electric cars here in the US and export them to China, but China wants GM to reveal its trade secrets first so Chinese companies can copy them. See #EV It is time we restructured our trade and economic subsidy laws to deal with this job killing nonsense.

Monday, September 5, 2011

In the debate over job creation vs environmental regulations (see we sometimes lose sight of comparative advantage. If we eliminate environmental regulations (i.e., we eliminate higher environmental standards), then everyone competes based on the lowest price. That puts us at a competitive disadvantage with low-wage countries. When we set high standards, then the competition is not based on price alone but on quality as well (i.e., the ability to manufacture to those higher standards) where we can develop a comparative advantage. Now this is not a binary concept. But it is one factor to consider.

Sunday, September 4, 2011

New energy efficiency regulations for refrigerators will save enough electricity to power 3.4 million homes -- equal to all the homes in the State of Virginia.

Saturday, September 3, 2011

President Obama has abandoned proposed air quality rules, bowing to pressure from Republicans and business interests. He also believes the fallacy of "clean coal", approves Arctic ocean drilling, and endorses a pipeline fro Candian tar sands through environmentally sensitives areas in the US. Bottom line: Environmentalists would have been better off voting for McCain.

Friday, September 2, 2011

While we lose jobs and debate whether climate change is real, China is building new industries for the 21st century such as solar. See

Thursday, September 1, 2011

Solyndra, a solar energy company that was started with half a billion dollars in federal government loans, has announced that it is shutting down. See This points out a critical difference between the energy policies of Teddy Roosevelt and Jimmy Carter. Roosevelt created the most competitive energy industry in the world by using the antitrust laws to restructure the energy markets. Carter tried to promote renewable energy by picking the best synfuels technology.

Wednesday, August 31, 2011

Exxon has announced an agreement with Russia to develop oil fields in the Arctic Ocean in return for giving the Russian Government part ownership of Exxon's oil fields in the U.S. See Which raises the question: Who's in charge of U.S. foreign (and energy) policy?

Tuesday, August 30, 2011

Germany gets 17% of its energy from renewable sources and has been a net exporter of electricity. Now it is shutting down all of its nuclear plants. How can a large industrial country do such things? 1. It's leader is a physicist. 2. It's consumers use half as much energy as Americans. We can have a green energy future. But only if we start understanding and respecting science, and stop wasting energy.

Monday, August 29, 2011

Demand response is a program that allows the utility to dial down your energy consumption during periods of peak demand. You get paid for participating, the utility protects the grid from failing, and we need fewer peaking plants. Ask your utility how to participate.

Sunday, August 28, 2011

The surprising new force cleaning up the plastic industry

Saturday, August 27, 2011

Are there any leaders in the US who will speak out about climate change? Not likely to be President Obama. He believes the "clean coal" fallacy, approves Arctic Ocean oil drilling, has not mentioned climate change for almost two years, and now endorses a pipeline from tar sands in Canada through environmentally sensitive areas in the US. And he's the pro-environment candidate running for President?

Friday, August 26, 2011

Turns out that little earthquake in Virginia last week forced nuclear power plants off line because they list external power. One plant had to rely on just 4 diesel generators when it lost power. See Is that a big enough margin of safety?

Tuesday, August 23, 2011

Jon Huntsman speaks out on climate change: But can he win the Republican nomination?

Monday, August 22, 2011

We talk so often about sustainability, green, renewable, etc. What about happiness? If we think about it, doesn't living a sustainable life also make us happier?

Sunday, August 21, 2011

GE has developed a new method of enriching uranium using lasers Some argue they should be prohibited from commercializing the technology because once it's out, unfriendly states like Iran could acquire the technology. Can we really stop scientific discovery and progress by not letting our own scientists develop technologies?

Saturday, August 20, 2011

Scientists have just completed a new floe chart of Antarctica from satellite images that shows how much water will flood into the oceans as the ice melts Did Rick Perry study this scientific research before concluding that climate change predictions are the result of a conspiracy among scientists?

Thursday, August 18, 2011

Milton Friedman would not approve of all these candidates who are anti-environmental protection. He taught that the cost of pollution must be included in the price of the fuel. Without including that cost in the price (i.e., externalizing that cost), the price would not accurately reflect the true cost of the product, and the price signals would lead to irrational investments. The free market cannot operate properly when the price signals are wrong. Where is a free market Republican to turn nowadays?

Sunday, August 14, 2011

We need to stop arguing theories and philosophies, and start debating the numbers. Anyone who looks at a world population of 10 billion people trying to live an American lifestyle has to realize that such wasteful consumption is neither possible nor sustainable.

Thursday, August 4, 2011

Ontario has attracted $7 billion in private capital to build the world's largest cluster of wind and solar power generation, create 1,440 new manufacturing jobs, and provide 2,500 MWs of electric power with ZERO ongoing fuel costs for decades to come. Maybe the US should spend a little time learning from our neighbors up north?

Monday, August 1, 2011

The NY Times reports that Japanese near Fukushima have purchased their own radiation detectors and discovered that the government isn't telling them the truth about radiation levels. Whether this is the result of incompetence, lack of manpower, or worse really doesn't matter. The nuclear industry should be in there providing accurate information at its own expense. If people cannot get trustworthy information, then the industry will not survive.

Saturday, July 30, 2011

I have a few questions for those who are convinced that climate change is a great big conspiracy

Friday, July 29, 2011

US Auto executives are supporting higher standards for fuel efficiency that will require fleets to reach 54.5 MPG by 2025. See Not because they've all become treehuggers, but because it is the best way to preserve America's competitive advantage. If we have to compete based on the lowest price, then low-wage economies win before we get started. But if everyone has to compete based on the most technologically sophisticated and efficient production, then we are playing to our strengths.

Sunday, July 24, 2011

Stupid decision to put stand-by generators in the basement, loss of back-up power, faulty valves, human error. If the three big nuclear disasters (Fukushima, Chernobyl, 3-Mile Island) had occurred because we didn't understand physics, maybe there would be hope that we would figure it out. But all three incidents happened due to human error and petty cost-cutting that seems impossible to eliminate.

Saturday, July 23, 2011

Shell and Chevron are set to sign a $1.5 billion deal with the Philippine government to expand the output of the Malampaya natural gas project off the coast of Palawan. Will help lower carbon footprint and reduce dependence on foreign oil.

Thursday, July 21, 2011

Solar panels in the northern hemisphere should generally tilt south to maximize the generation of energy. But in the US, solar panels are installed with a slightly westward tilt. Why? Because the power of physics is trumped by the power of economics and finance.

Wednesday, July 20, 2011

The US government took a bold step today, announcing that it is closing 800 computer data centers (about 40% of all government data centers). This will be done by using software that more efficiently allocates processes among servers and by taking advantage of cloud computing. It will save about $3 Billion annually and meaningfully reduce the government's carbon footprint -

Tuesday, July 19, 2011

There's room for hope when Warren Buffett invests in electric cars and batteries, and KKR, AXA, and other insurance companies invest in solar. The fact is: Renewable technologies will continue to come down in price while fossil fuels will continue to go up in price, giving smart investors a very profitable delta.

Saturday, July 16, 2011

Two articles on the same day point out the complexities of talking about pollution in the oceans. First, based on one good summer for tourism in the Gulf, BP argues in court that the harm caused by its oil gusher is over and no more compensation should be paid. See In other news today, scientists warn that pollution, climate change, and other factors are causing irreversible and potentially catastrophic changes in the world's oceans. See

Thursday, July 14, 2011

One of the largest utilities in the country is shelving plans for a large carbon capture and sequestration project at an old but still functioning coal-fired plant. See Here's the interesting part: It would keep going if everyone was required to do it. Because then it would not be at a competitive disadvantage. But if it is the only one doing it, and it must compete with dirty polluters, then it isn't feasible. This is a utility talking, not some treehugger.

Wednesday, July 13, 2011

There is a strong consensus among climate scientists that climate change is happening and it is being caused by human activity. Does democracy mean that non-experts should be able to block us from following the advice of experts on this issue? For an interesting argument, see

Tuesday, July 12, 2011

Scientists are finding that GM crops are having unintended effects. For example, because GM crops are resistant to Roundup (a pesticide), farmers can use more pesticide and literally wipe out weeds that are essential to the survival of Monarch butterflies. See

Monday, July 11, 2011

Nuclear fusion has made great advances in recent years, to the point where it could be a reality within the next 20 years. All we have to do is invest a tiny fraction of what we spend every year on oil to complete the research. Imagine, a safe, inexhaustible supply of energy from seawater. See

Sunday, July 10, 2011

The President of the Philippines has established a Competition Authority to investigate monopolies and anticompetitive business practices.
I've often wondered why we don't just kill and eat invasive species. This article explains why eating them might be a solution....and what the risks are. See Can’t Eliminate an Invasive Species? Try Eating It. -

Saturday, July 9, 2011

New York State is studying ways that fracking for natural gas can continue without endangering water supplies. See

Friday, July 8, 2011

The President is running for re-election and the Republicans have demonized anyone and anything that sounds like its related to climate change, so the EPA Administrator will take the political heat for basic clean air regulations that will save lives. See EPA Issues Tougher Power Plant Emission Rules -

Tuesday, July 5, 2011

The Germans have pledged to eliminate nuclear power, the Japanese are ambivalent, and now the British may announce that nuclear will be their chosen course to reduce GHG emissions. See British Energy Minister Backs Nuclear Power Renaissance Is nuclear power green and sustainable?

Sunday, July 3, 2011

A ruptured pipeline has spilled oil into the Yellowstone river - Will permanent damage result?

Thursday, June 30, 2011

It turns out that rare earth minerals aren't really that rare. We buy ours from China because they are deadly to mine and process, not because we don't have any. In fact, we have more than enough to supply our own needs. We just don't know how to do that without causing environmental catastrophes. So we let China do it for us. Now Malaysia is getting into the rare earth mining act with terrible consequences. See Engineers Fear Rare Earth Refinery in Malaysia Is Dangerous -

Wednesday, June 29, 2011

A new study by Google using a computer model developed by McKinsey tries to predict which green and sustainable energy technologies could become commercially viable. The conclusion: As long as coal plants can release GHGs for free, any advances in energy storage technology will result in us burning more coal
Norway launches world's largest carbon capture project Will use chemical process to separate carbon and, ultimately, inject it back into depleted oil and gas wells

Monday, June 27, 2011

What do you do if you're the largest owner/operator of nuclear power plants in Germany and the government announces that they all must shut down over the next 12 years? German power giant Eon initially cried foul and threatened to sue for damages. But now it says that the shift to renewables is "a huge opportunity" to make Germany a leader in 21st century energy technologies. See Eon calls Germany's move to renewables "a huge opportunity" despite loss of nuclear revenues

Sunday, June 26, 2011

The Philippine National Renewable Energy Program (NREP) launched last week has set ambitious targets, including Php 1.2 trillion (US$27.6 billion) in renewable energy investments between now and 2030. This will nearly triple the country’s renewable generation capacity to 15,300 megawatts (MWs) in 2030 from 5,400 MWs today. See Philippines Targets $27.6 Billion in Renewable Energy Investments by 2030 If the Philippines can do it, why can't we?
Cable boxes and DVRs drain more power than some refrigerators -
New species found in Philippines amaze US and Philippine scientists Can we protect them now that they've been found?

Saturday, June 25, 2011

We need to educate people about the very real and immediate dangers of fossil fuels. Since 2005, more and more studies have shown a correlation between air pollution and deaths from heart attacks, strokes, lung disease. The latest study is dramatic -- an increase in heart attacks for two days every time air pollution spikes. See New Study Finds Air Pollution May Trigger Heart Attacks So, yes, we need to educate about climate change. But most people have trouble getting worked up about something that might happen 50 or 100 years from now. Tell them that they might die tomorrow, and maybe we'll get their attention.
We could access relatively inexpensive, sustainable biofuels by allowing imports from Brazil. And we would be consuming a crop with very little nutritional value for humans. Or we could continue to pour billions of dollars in government subsidies into corn ethanol, with the result that prices for a basic, nutritious food will continue to increase, poor people will suffer, and we on;t have much of an impact on our oil consumption anyway. See
America worsened the Great Depression by cutting back on investments. It ultimately became the dominant economy of the 20th century by making massive investments in infrastructure -- more miles of roads, railroads, power lines and telecommunications lines than the rest of the world combined. When will we understand that lowering gas prices for the summer by releasing oil from the Strategic Petroleum Reserve will not create jobs or save the economy? Making massive investments in renewable energy over the next decade will both create jobs in the short term and make us a competitive economy again in the long term.

Friday, June 24, 2011

800 million people in the Asia Pacific region do not have regular access to electricity. But that is about to change as the fastest growing region in the world builds more power plants. Which is why the Asian Development Bank is urging Asian nations to embrace sustainable energy. See

Thursday, June 23, 2011

The decision to release 30 million barrels of oil from the US strategic oil reserves (and another 30 million from Germany, France, Spain and Japan) is not about Libya, nor is it about re-electing a President. It is about a global economy that has failed to respond to every other effort at resuscitation. See Desperate measures in oil markets as global economy fails to recover
The US became the dominant global economy of the 21st century by building infrastructure -- more railroads, roads, power lines, and phone lines than the rest of the world combined. The construction created jobs, and the infrastructure created new industries. Now China is doing what we did (see High-Speed Rail Poised to Alter China - ) while we say we cannot afford to build 21st infrastructure.

Wednesday, June 22, 2011

News today that Japanese industries are exploring biomass and other alternative forms of energy to power their economy after Fukishima
Just when we thought our earth was small, scientists have found seven new mammal species in the Philippines Not is some terribly remote location, but on the island of Luzon which is home to Metro Manila.

Monday, June 20, 2011

Germany is pushing renewables after its decision to abandon nukes; same with Japan after its Fukushia crisis; which will give those economic powerhouses an energy infrastructure with zero ongoing fuels costs; while US energy companies use every political tactic in the book -- including half-truths and outright lies -- to keep us in the 19th century. See AEP Tries to Bully Past Clean Air Act -

Sunday, June 19, 2011

Six ASEAN states call for peaceful resolution of South China Sea disputes

Saturday, June 18, 2011

Philippines Sends Warship After China Boat Heads to Disputed Parts of South China Sea - Bloomberg

Friday, June 17, 2011

Philippines' Cebu Air places $3.8 billion Airbus order | Let the Philippine tourism boom begin

Thursday, June 16, 2011

I don't want to get down on the US -- we're still a highly educated, innovative, independent and entrepreneurial nation. But the demographic numbers don't lie. We're getting old. Economies elsewhere are posting stable growth and seem to be managing it well. See Should our children consider careers in that part of the world?
NRC told that nuclear power plant safety rules understate risks -

Wednesday, June 15, 2011

Reading of the workers in China who have been poisoned by working with lead, and of their young children who have been scarred for life with lead poisoning from emissions in the air, reminds one of why we need a strong and independent EPA. See Lead Poisoning in China: The Hidden Scourge -

Tuesday, June 14, 2011

Like lottery players waiting for a jackpot to hit instead of building a business with a stable income, sometimes it feels like we're just waiting for someone else or some new technology to solve our impending food, water and energy crises. The latest news no one seems to pay attention to is the depletion of fish populations.

Monday, June 13, 2011

China rattled some sabres in the South China Sea this week -- interfering with a Vietnamese vessel, warning the Philippines not to claim ownership of reefs and atolls off its coast, and announcing the launch of its first aircraft carrier. Could it all have to do with this: Philippines Attracts Upstream Oil and Gas Interest Off its Coast
It turns out that nuclear science is the easy part. The problems arise from very human responses to crisis. New reports from Fukushima reveal elected officials and company executives who distrusted one another, lied to one another, and literally said one thing and did another - - apparently with more concern for their own self-interest than for the health and safety of millions of innocent people.
The International Atomic Energy Agency says Iran is continuing work on a nuclear payload for a missile - Should the US do anything about that?
Former Democratic Interior Secretary Bruce Babbitt called out the President for not standing up to the oil companies and Republicans on the environment and more specifically on climate change - Is climate change the issue to lead with? Or is the President making a good tactical decision to focus on energy independence and creating clean energy jobs?

Sunday, June 12, 2011

Renewable Aviation Fuels Standard Gains Preliminary Approval
Former President Ramos explains the meaning of freedom and independence in the Philippines, from the 1898 perspective to today.
Bacteria in our food kill more people than terrorism And that's just in the US where we have meaningful food safety regulations. How will we provide safe food to the world in the future when it is home to twice as many people? The food crisis will make the energy crisis look like a mere inconvenience.

Saturday, June 11, 2011

Rebound in Philippine Exports and Foreign Direct Investment
US Ex-Im Bank Finances Small Scale Renewable Energy Exports

Friday, June 10, 2011

The Philippines is setting the stage for $1 billion in renewable energy investments that are awaiting final approval of feed-in-tariffs, renewable portfolio standards, and net metering rules.
President Aquino's appointment of former Senator Mar Roxas as Secretary of the Department of Transportation and Communications puts a very smart and savvy leader in charge of some major infrastructure projects.
Could It Happen Here? Will our obsession with budget cutting put our health and safety at risk?

Thursday, June 9, 2011

China gets aggressive in the South China Sea....with an aircraft coming soon.
We need to make a distinction between government "spending" that does not create any value, and government "investing" in infrastructure (a 21st century grid, repairing our century old bridges and roads, etc) that will make our economy more competitive in the future. Right now, we're at risk of falling behind. See U.S. Said to Be Falling Behind in ‘Green’ Technologies -

Wednesday, June 8, 2011

The Earth Is Full - Can We Build a Post-Consumer World? Will our children and grandchildren redefine the pursuit of happiness in a way that is more sustainable than the waste-all-you-can society we live in today?
First NJ Gov Christie killed a train tunnel that would create jobs now and provide more mass transit in the future, and now he is scaling back NJ's renewable energy goals that would push the private sector to create good jobs now and a more efficient energy infrastructure for the future. See Christie Disappoints Again, Plans to Scale Back New Jersey’s Energy Goals - Our generation inherited the largest rail, roads, and energy infrastructure in the world because our grandparents and great-grandparents built it. Will we leave a crumbling, inefficient, non-competitive, 19th and 20th century infrastructure for future generations of the 21st century?

Tuesday, May 31, 2011

NY Attorney General Sues Feds Over Fracking for Natural Gas

New York Attorney General Eric Schneiderman has filed a lawsuit alleging that the federal government failed to perform required environmental reviews of proposed natural gas drilling regulations.  The lawsuit alleges that the federal government must conduct further studies of the potential environmental impacts of hydraulic fracturing ("fracking") in the Delaware River Basin.

Fracking is a process of injecting water, chemicals and sand into a well bore at high pressure to release natural gas by fracturing the surrounding shale.   The specific chemicals used in the process have not been fully disclosed by the natural gas industry, raising questions about potential harms to the environment and human health.

Regulations proposed by the Delaware River Basin Commission would allow 15,000 to 18,000 gas wells to be drilled within the river basin without the full environmental review usually required by law..

John Howley
Woodbridge, New Jersey

Friday, May 27, 2011

Conservative and Liberal Think Tanks Endorse Putting a Price on Carbon Emissions

The Peter G. Peterson Foundation asked six think tanks representing "the wide scope of American political thought" to develop comprehensive plans for putting the country on a fiscally sustainable long-term path. Four out of the six groups concluded that the US should eliminate subsidies for fossil fuels and impose either a carbon tax or a cap-and-trade program to increase federal revenues.

The American Enterprise Institute argued that the US should end energy subsidies and greenhouse gas regulations in favor of a carbon tax. AEI would begin with a tax of $26 per metric ton of carbon emissions to be phased in between 2013-2017, and then increased by 5.6% per year through 2050.

This is not coming from a bunch of tree-hugging socialists. You may recall AEI as the home of many of the intellectuals and business leaders who formed the brain trust of the Reagan Administration. Not much has changed. The AEI Board of Trustees continues to include a who's who of conservative and libertarian academics and business leaders, including former Vice President Dick Cheney.

Nor is this a new position for AEI. In 2007, AEI argued that "the best way to reduce greenhouse gas emissions is to tax the carbon content of fuel to build in the cost of the environmental impact." AEI now argues that taxing carbon emissions is also a good way to reduce the federal deficit.

The Economic Policy Institute proposed using a carbon tax or a cap-and-trade program to address the societal cost of greenhouse gas emissions and reduce the federal deficit. It also called for a gradual increase in the motor fuel excise tax by 15 cents in 2019 and 25 cents in 2024.

The Roosevelt Institute Campus Network proposed a carbon tax as more efficient than a cap-and-trade system, because a carbon tax would provide more certainty about future prices. It called for an upstream tax on carbon of $24.33 per metric ton beginning in 2013 with an increase of 5.6 percent each year. According to the Congressional Budget Office, this would reduce carbon emissions by 36 percent by 2026.

The Center for American Progress called for reducing greenhouse gas emissions and reliance on foreign oil with a price on carbon and an oil import fee. It proposed a $5 per barrel tax on oil imports and an unspecified price on carbon emissions.

Two other think tanks also participated in the Peterson Foundation's efforts to find sustainable fiscal solutions.

The Bipartisan Policy Center could not reach agreement within its organization on the issue of a carbon tax, but its report did note that “a tax of $23/mt of CO2 emissions in 2018, increasing at 5.8pc annually” would raise $1.1 trillion to reduce the deficit while cutting carbon emissions by 10%

The Heritage Foundation was the only think tank that did not include a carbon tax or cap-and-trade program in its recommendations.

What to make of all this?  Not much, I'm afraid.  Remember the Simpson-Bowles Deficit Reduction Plan?  They also proposed some honest, tough measures to get us out of our fiscal and environmental mess.  But it's not clear that we want to take the medicine.

John Howley
Woodbridge, New Jersey

Tuesday, May 24, 2011

What TEPCO Didn't Tell Us About Their Nuclear Meltdown

After nearly two months of assurances, the Tokyo Electric Power Co (TEPCO) revealed today that not just one but three of the nuclear reactors at their Fukushima Daiichi nuclear power plant suffered meltdowns of fuel rods very soon after the plant was disabled by a massive earthquake and tsunami.

This disclosure contrasts with TEPCO's earlier statements that meltdowns of fuel rods had occurred in only one reactor.

The company assures us that "most" of the melted fuel is covered with water in all three reactors now, and that the temperatures of the melted fuel rods are below dangerous levels.

Really? The massive earthquake and tsunami caused a disaster and raised serious questions about the viability of nuclear power worldwide. Now the greatest threat to the nuclear power industry is candor. If there is any hope for nuclear power, it will only come after the industry itself demands that TEPCO come clean with all the facts.

John Howley
Woodbridge, New Jersey

Saturday, May 21, 2011

Nuclear Energy's Double Moral Hazard

Tepco, the owner and operator of the stricken Japanese nuclear power plant, announced record losses of 1.25 trillion yen related to the cost of containing the worst nuclear accident since Chernobyl. That is almost 1,000 times Tepco's annual profit of 135 billion yen last year.

Granted that the triggering event for this nuclear catastrophe was an extraordinary earthquake and tsunami, but the facts so far suggest that the utility made decisions that increased the risks and harms -- from a design that put back-up generators in a part of the plant that would be underwater if a tsunami struck, to delays in emergency cooling measures after the event which some say was an effort to avoid taking actions that would render the plant inoperable in the future.

Tepco's managers, shareholders, and bondholders received the benefits and shared in the profits of this risky plant before the disaster. Will they suffer the losses and other consequences now?

The first "moral hazard" issue is:  Is Tepco too big too fail? It is the largest electric utility in Asia and the fourth largest in the world. It supplies power to a large portion of Japan including Tokyo. Will the government let the utility fail?

Of course not. The utility is too big to fail. The only issues are (a) how it will be kept alive so it can continue providing power, and (b) how much of the losses will be suffered by management, stockholders, and bondholders.

So far, the answer is muddled. The government has not taken over. Yes, the President of Tepco has resigned. But before leaving he appointed his own successor from inside the company.

On the investment side, the government must decide how to treat shareholders and bondholders when it bails out the utility in order to keep it running. The investors knew this company had nuclear power plants in one of the most earthquake and tsunami prone nations on earth.

This moral hazard may be in the past, because Japan may be finished with nuclear power (at least for now). But if Japan has any intention of building new nuclear power plants, how it treats Tepco investors in a bailout now will have a significant impact on the availability and cost of capital for those plants in the future.

Which brings us to the second moral hazard. Is it moral to place the health and environmental risks of nuclear power -- serious illness, death, contamination of the earth for generations -- on those who live and work near the plants?

John Howley
Woodbridge, New Jersey

Friday, May 20, 2011

24 Hour Solar Energy Plant Backed by US Guarantee

The US Department of Energy is providing a conditional $737 million loan guarantee to support a 110 megawatt concentrating solar power (CSP) plant in Nevada that will be capable of providucing round-the-clock electricity, even at night.

The CSP plant will use mirrors to heat molten salt to approximately 1,050 degrees Fahrenheit, which will heat up water to power a traditional steam turbine. The molten salt stays hot for up to 10 hours, allowing the plant to continue to produce power even after the sun has set.

The Crescent Dunes Solar Energy Project will be the tallest molten salt tower in the world. SolarReserve, the project proponent, expects the plant to create 600 construction jobs and 45 operations jobs. The plant is expected to produce 500,000 megawatt hours per year, enough to power more than 43,000 homes.

John Howley
Woodbridge, New Jersey

Saturday, May 14, 2011

President Obama Grants One-Year Extension on Oil Leases

President Barack Obama granted oil companies a one-year extension on leases in parts Alaska and the Gulf of Mexico. This action comes as the President faces pressure to do something about rising prices at the pump. It also comes just days after the Senate grilled oil company executives on high gasoline prices and record oil company profits. It gives the oil industry a significant win on its wish list.

The Obama Administration also announced that it will order the Department of the Interior to commence new lease sales in Alaska’s petroleum reserve, with the goal f having at least one lease sold by the end of 2011. It will also speed up environmental reviews.

John Howley
Woodbridge, New Jersey

Saturday, April 23, 2011

How Bipartisan Efforts Increased Energy Efficiency and American Competitiveness

It is incredible that energy policy today is a partisan issue when, just six years ago, a bipartisan consensus resulted in one of the most powerful pieces of energy efficiency legislation ever. Legislation that continues to bring down the energy intensity of the US economy.

A new report by the American Council from an Energy Efficient Economy (ACEEE) analyzes the Energy Policy Act of 2005. The report is entitled Assessing the Harvest: Implementation of the Energy Efficiency Provisions in the Energy Policy Act of 2005. It concludes that this legislation expanded markets for money-saving energy-efficient products and created opportunities for continued bipartisan political action on energy efficiency in later legislation.

The Energy Policy Act of 2005, signed by President George W. Bush, included manufacturer and consumer tax incentives for energy-saving technologies, minimum efficiency standards for appliances and equipment, and a variety of other provisions to encourage energy savings. It was the first major energy legislation since 1992, and began a period of bold energy efficiency legislation from 2005 to 2010.

The most successful energy efficiency provisions had good timing, stakeholder engagement and education, and appropriate levels of funding. "The new homes and appliance manufacturer tax incentives, and the appliance and equipment standards have succeeded the best at transforming markets," said Rachel Gold, lead report author and a researcher at ACEEE. Other provisions, especially those with limited or nonexistent funding or where a loophole was built into the law did not fare as well.

Among the lessons learned, the report notes that education and stakeholder engagement are critical to the success of energy efficiency programs. It also points out that legislation must take into account market conditions and barriers to product acceptance in order to shape effective policy.

The report estimates that, in 2020, the Energy Policy Act of 2005 will still be saving enough energy to power the entire state of Tennessee for a full year at current energy use levels. This type of efficiency is essential not only to protect the environment, but to maintain a competitive economy. As energy costs increase due to a wide range of factors from growing demand from China and India to instability in the Middle East, economies with the lowest energy intensity -- amount of energy required to produce a dollar of GDP -- will have a competitive advantage.

John Howley
Woodbridge, New Jersey

Wednesday, April 20, 2011

The "Foreign Oil" vs "Domestic Oil" Fallacy

President Obama may have thought he was appealing to patriotic instincts, but his speech at Georgetown University sent the wrong message by promoting the fallacy that we can save our economy by driling for more "domestic oil" to reduce our dependence on "foreign oil."

Webster's defines a "fallacy" as "an often plausible argument using false or invalid inference." That is exactly what our elected officials are selling us. President Obama's argument that we can reduce our dependence on foreign oil by drilling in the the Gulf is plausible, as is Republican Senator Mitch McConnell's retort that even more oil could be produced by drilling in Alaska. The false inference is that drilling for more domestic oil will somehow end the cycles of energy crises that have triggered economic recessions since the 1970's.

Here are the facts:

More domestic crude oil will not shield us from higher and more erratic oil prices in global markets. Most of our imported oil comes from Canada and Mexico. We do not import any meaningful quantities from Tunisia, Egypt or Libya. Yet, the oil we buy from Canada and Mexico also costs more than $100 per barrel, just like the oil from countries in turmoil. Because oil prices are set by a global market. Even if we drill for more oil in the US, the price of all our oil will be determined by OPEC, increasing demand from China and other developing countries, and instability in the Middle East. [After this post first appeared, some readers pointed out that reducing foreign oil imports will help reduce the balance of trade deficit. True, but getting there by producing more domestic crude is not the solution, for reasons explained below.]

More domestic crude oil will not decrease environmental harms. Whether we burn domestic or foreign oil, the impact on the environment is the same. Indeed, more drilling in the US will result in more environmental harms, not less. Remember that the BP Deepwater Horizon and the Exxon Valdez catastrophes were the direct result of domestic oil production. Expect even more of these types of disasters as domestic oil production expands into environmentally sensitive areas, especially when the multinational oil industry wraps itself in our flag and argues for more lenient regulations in the name of reducing our dependence on "foreign" oil.

More domestic crude oil will not increase the supply of domestic gasoline, diesel, or other refined products. Our US refineries have been operating at 85% to 90% capacity throughout the Great Recession. This is very close to full capacity because refineries must shut down periodically for maintenance and safety reasons. That is why nearly 25% of our oil imports are in the form of refined products. We do not have the capacity in the US to refine more crude oil into useful products. Even if we produce more oil from domestic sources to replace "foreign oil," that will not result in more refined products in the US market. As the economy recovers and demand increases, we will need to import even more refined products from foreign countries.

More domestic crude oil will not make us more competitive with China, India, and Europe. Markets in the rest of the world are shifting to sustainable energy. Germany is getting almost 20% of its energy from renewable sources right now. GE just bought a French technology company and anticipates creating large numbers of renewable energy jobs in Europe where government policies favor sustainable energy. China is outpacing us in sustainable energy investments. In the short run, these countries are creating new jobs in new industries. In the long run, they will have less expensive sources of energy.

President Obama's embrace of more domestic oil production as the solution to "foreign oil" is tragic on many levels. It resulted in news headlines that distracted citizens from many other initiatives that he has promoted to wean the US from oil, domestic or foreign. It weakened him politically by damping the enthusiasm of environmentalists and others on the left who are his natural base, while emboldening those who support dirty fuels. At the same time, he sent a confusing message to vast numbers of independent voters by suggesting that the dirty energy advocates have a legitimate argument when they say that drilling for more domestic oil is a solution. That lets his critics avoid the very tough question of how we will wean ourselves from dirty fuels.

Most tragically, the President's willingness to promote domestic oil as a solution to "foreign oil" appears to represent an abandonment of the one thing that will ultimately help us move to a more sustainable energy infrastructure -- using government policy to change the economics of energy. If we really want to build a sustainable energy infrastructure, we should start by: (a) phasing out all direct and indirect government subsidies for dirty fuels over a seven-year period; and (b) including the cost of pollution and related harms to human health in the price of dirty fuels. Not only would that spur investment in clean energy technologies, but it would also reduce the government deficit and the trade deficit.

John Howley

Woodbridge, New Jersey

Thursday, April 14, 2011

A Grandmother's Rant About the Good, Green Ol' Days

My mother, the grandmother of eight grandchildren, periodically includes me when she sends around emails to her friends. Her latest missive is about an unknown grandmother accused of not living a green and sustainable life. If you can look beyond the sarcasm and hyperbole, you'll find some thought-provoking kernels of truth. Here it is:

A Grandmother's Rant About the Good, Green Ol' Days

In the line at the store, the cashier told the older woman that she should bring her own grocery bag because plastic bags weren't good for the environment. The woman apologized to him and explained, "We didn't have the green thing back in my day."

The clerk responded, "That's our problem today. The former generation did not care enough to save our environment." He was right, that generation didn't have the green thing in its day. Back then, they returned their milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled. But they didn't have the green thing back in that customer's day.

In her day, they walked up stairs, because they didn't have an escalator in every store and office building. They walked to the grocery store and didn't climb into a 300-horsepower machine every time they had to go two blocks. But she was right. They didn't have the green thing in her day.

Back then, they washed the baby's diapers because they didn't have the throw-away kind. They dried clothes on a line, not in an energy gobbling machine burning up 220 volts -- wind and solar power really did dry the clothes. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing. But that old lady is right; they didn't have the green thing back in her day.

Back then, they had one TV, or radio, in the house -- not a TV in every room. And the TV had a small screen the size of a handkerchief, not a screen the size of the state of Montana. In the kitchen, they blended and stirred by hand because they didn't have electric machines to do everything for you.

When they packaged a fragile item to send in the mail, they used a wadded up old newspaper to cushion it, not Styrofoam or plastic bubble wrap. Back then, they didn't fire up an engine and burn gasoline just to cut the lawn. They used a push mower that ran on human power. They exercised by -- this is the Honest-to-God Truth! -- working so they didn't need to go to a health club to run on treadmills that operate on electricity. But she's right; they didn't have the green thing back then.

They drank from a fountain when they were thirsty instead of using a cup or a plastic bottle every time they had a drink of water. They refilled their writing pens with ink instead of buying a new pen, and they replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull. But they didn't have the green thing back then.

Back then, people took the streetcar or a bus and kids rode their bikes to school or rode the school bus instead of turning their moms into a 24-hour taxi service. They had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And they didn't need a computerized gadget to receive a signal beamed from satellites 2,000 miles out in space in order to find the nearest pizza joint.

But isn't it sad? The current generation laments how wasteful the old folks were just because they didn't have the green thing back then?

(If anyone knows the author, please let me know so I can give them appropriate recognition.)

John Howley

Wednesday, March 9, 2011

Jasmine Revolutions: How Long Will Oil Supplies Be At Risk?

Today's Jasmine Revolutions are taking place on the 25th anniversary of the People Power Revolution that ousted the Marcos dictatorship in the Philippines. The aftermath of the Philippine revolution suggests that, in hindsight, ousting the old leaders in the Middle East will seem like the easy part. Building a new society and new institutions will likely result in at least a decade of uncertainty, power struggles, and dramatic changes in economic and strategic relationships.

To those who say that the Philippines presents a much different situation than the Middle East, I agree. The Philippines was far better prepared for a transition away from dictatorship and crony capitalism. The differences raise a real concern that the Middle East is in for a long period of uncertainty and instability. This is not a good time for the US economy to be dependent on petroleum.

Who's In Charge?

Long before Marcos left the Philippines, a large and well-organized opposition had developed both inside and outside the country. A new leader, Corazon Aquino, was elected before Marcos was overthrown, and she was able to assume power literally on the day the dictator left. She enjoyed widespread support from the masses and elites, including the full support of the Catholic Church and key business organizations. She also was recognized immediately by the international community as the legitimate leader of the country.

This did not stop powerful factions from attempting to overthrow her new government. President Aquino faced six coup attempts during her first 18 months in office. She continued to fight off coup attempts during her entire six-year term, including one in 1989 (her third year in office) when a faction within the armed forces seized control of 22 high-rise buildings in the central business district and five major military bases throughout the country.

None of the countries in the Middle East will begin its post-revolution period with leaders who have the type of legitimacy and support that President Aquino enjoyed in the Philippines. In some Middle Eastern countries, there is no clear leadership of the revolution. In others, factions will fight among themselves for control or question whether new leaders have enough distance from the old regimes. It will take time before new leaders are selected and establish their legitimacy. This leaves countries in the Middle East at a much greater risk of factional infighting and counter-revolutions. Risks that could disrupt oil production and/or exports.

The Power of Nationalism

Leaders of the Philippine revolution had extraordinarily good and close relations with the U.S. President Aquino attended high school in Philadelphia and college in New York. Fidel Ramos, her critical supporter among the military and her successor as President, studied at West Point and maintained lifelong friendships with many U.S. leaders including his West Point classmate, former U.S. Secretary of State Alexander Haig. Important leaders in the Philippine business community and legal profession studied at U.S. universities. When the People Power Revolution took place, every Filipino over the age of 50 had personal recollections of U.S. soldiers liberating their country from the brutal Japanese occupation during World War II. Some Filipino leaders knew General Douglas MacArthur personally.

Nationalism, however, is a powerful force. Especially when combined with memories of U.S. support for the Marcos dictatorship and perceptions that U.S. businesses had unfairly exploited Philippine resources. A new Philippine constitution prohibited foreign involvement in key industries such as mining and gave preference to Filipinos in all matters of "the national economy and patrimony." The new Philippine Senate refused to renew leases on U.S. military bases and effectively kicked the U.S. military out of the country.

If this is what happened with one of America's closest of friends and allies, we can only guess what might happen in Middle Eastern countries without such close ties or warm feelings towards Americans. Nationalism and less than favorable perceptions of the U.S. could result in very significant changes in economic and strategic relationships.

The Power of Generational Shifts

The Philippines in 1986 and the countries going through Jasmine Revolutions today have one striking similarity. Their revolutions occurred at times of shifting generations. In 1986, more than half of all Filipinos were under the age of 30. Unlike their parents and grandparents who viewed the U.S. and other Western nations with admiration and respect, these young people knew the U.S. mostly as the country that provided money and arms to support the Marcos dictatorship. They saw the U.S. leave Vietnam and the British leave Hong Kong. They saw Singapore, Vietnam, Thailand, China and other neighbors growing economically. Telling the U.S. military to leave the Philippines and reserving economic opportunities for Filipinos was a natural extension of the trends they saw personally in the region.

A similar generational shift is happening now in the countries undergoing Jasmine Revolutions. More than half the people in Tunisia and Bahrain are under the age of 30. In Egypt, Libya and Oman, more than half the people are under the age of 24. In Yemen, more than half the people are under the age of 18. The greatest economic development story in these young people's lives is the rise of China, India, and Brazil to the status of major players in the global economy. In contrast, they have seen the U.S. suffer from severe economic and terrorist shocks. They have also seen the U.S. invade Iraq. Their countries' economic and strategic relationships will form against this backdrop.

Lessons Learned

The Philippines experience suggests that we will see at least a decade of uncertainty, power struggles, and dramatic changes in economic and strategic relationships in the Middle East. There may be sudden disruptions of oil production and/or exports as factions struggle to control the wealth of these nations and chart a new course. Consistent supplies of petroleum cannot be assured.

John Howley
Woodbridge, New Jersey

Monday, March 7, 2011

Jasmine Revolutions: How Much Oil is at Risk?

How much oil is at risk in the countries undergoing Jasmine Revolutions? Not much in total volumes, but more than enough to have a very significant impact on prices. To put this in perspective, let's look at how much oil the US needs on a daily basis.

The US consumes about 18.7 million barrels of oil per day (bbl/day). US domestic oil production averages about 9 million bbl/day, resulting in a deficit of about 9.7 million bbl/day. Because of a number of factors, including the need to match oil grades with refinery capacity and end uses, however, the US imports about 11.7 million bbl/day.

In other words, the US imports more than 50% of the oil it consumes.

Now we could start breaking down our imports into reliable and less reliable suppliers Canda and Mexio, for example, supply about 30% of US oil imports. That sounds relatively safe. But that would miss the point. Once you start importing oil, you are in a global oil market where changes in supply and/or demand in even one country can have an impact on the price Americans must pay for oil imports.

The country that is causing the most concern about oil prices right now is Libya. Ranked 18th in world oil production, Libya produces about 1.79 million bbl/day and exports about 1.5 million bbl/day.

The other countries in the midst of Jasmine Revolutions are even smaller producers. Oman is ranked 25th with production of 816,000 bbl/day. Egypt is ranked 29th with 680,000 bbl/day. Yemen is ranked 37th with 288,000 bbl/day. Tunisia is ranked 54th with 91,000 bbl/day. Bahrain is ranked 63rd with 49,000 bbl/day.

The US imports only about 79,000 bbl/day from Libya, less than a rounding error when you consider how much oil the US imports every day, so you might be tempted to think problems in Libya won't have much of an impact on US prices. But you would be wrong. If Libyan oil exports to Europe were disrupted, the Europeans would have to find oil someplace else. That would drive up the price of the 11.7 million bbl/day that the US must import from world markets.

We also have to consider the particular grade of oil. Libyan oil is known as sweet crude because of its low sulfur content. This is, in layman's terms, a premium product because you get much more gasoline, diesel, and kerosene from sweet crude than from sour crude. A loss of sweet crude simply cannot be made up with an equal amount of sour crude.

There is some good news. Libya requires revenues from oil exports to function. Oil exports account for about 45% of Libya's Gross Domestic Product (GDP). In the long run, regardless of who runs that country, they will have a very big incentive to keep the oil flowing. In the short run, OPEC probably has enough spare capacity to get us through any short-term disruptions. At least as long as the global economy continues to recover from a recession. But if demand picks up shar

How much will OPEC allow the price to rise? Tough to say with any precision. We know what happens if oil goes into the $140 per barrel range. The last time that happened, it triggered the Great Recession. We also know that the economy seems to tolerate prices at $90 to $100 per barrel without going into a tailspin. The consensus view among analysts seems to be that prices at or above $100 per barrel may be the new normal. With the very real possibility of prices at the $120 per barrel level if OPEC sees a need to tamp down demand or if markets get jittery in response to events in Libya or elsewhere.

So how much oil is at risk? The answer is: More than enough that we should be concerned.

John Howley
Woodbridge, New Jersey

Tuesday, January 4, 2011

Carbon Regulation is Already Here

Most people talk about carbon taxes, cap and trade, and other carbon-related costs and regulations as if they were something new and unusual. In fact, most companies already face a very complex environmental and Greenhouse Gas (GHG) regulatory system that includes both private standards and government laws and regulations.

The private and public restraints on GHG emissions range from the Walmart Sustainability Index that requires 100,000 Walmart suppliers to disclose their carbon footprints and sustainability initiatives, to regional GHG cap and trade programs that require power plants to reduce their emissions or purchase allowances in an open auction. And, of course, the 1990 Clean Air Act Amendments instituted a cap and trade program for acid rain that achieved 100% compliance in reducing sulfur dioxide emissions during the 1990's.

The most prominent GHG cap and trade program today is the Regional Greenhouse Gas Initiative (RGGI). The ten Northeastern and Mid-Atlantic states that comprise RGGI have agreed to a mandatory, market-based effort to reduce greenhouse gas emissions. The member states have capped CO2 emissions from the power sector with the goal of reducing those emissions by 10% by 2018. States sell nearly all emission allowances through auctions and invest proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies.

Similarly, the Western Climate Initiative (WCI) is a collaboration of seven western US states and three Canadian provinces working together to identify, evaluate, and implement policies to reduce greenhouse gas emissions, spur investment in clean-energy technologies that create green jobs, and reduce dependence on imported oil. WCI has announced plans to implement a cap-and-trade system in January 2012 that will provide financial incentives to reduce carbon emissions. The program will start with power plants, then extend to large industrial producers and transportation.

These GHG cap and trade programs, however, are only the highly visible tip of the iceberg. Almost every company in the US faces a complex web of private standards and public laws that regulate their GHG emissions, other environmental impacts, and overall sustainability. CERCLA, RCRA, NEPA, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Ocean Dumping Act, and the Endangered Species Act are just a few of the US laws regulating the environmental impacts of companies and individuals in the US. Companies that export to Europe must also be aware of the specific regulatory, green labeling, and other environmental requirements in the European Union and locally.

My good friend Stan Alpert believes that smart companies can use their compliance with environmental regulations as a competitive advantage and ultimately to reduce costs. Stan should know. In addition to working for many years as the Chief Environmental Prosecutor in the U.S. Attorney's Office that covers parts of New York City and all of Long Island, Stan has extensive experience as a lawyer in private practice advising green and sustainable businesses.

Stan has put together a free online webinar entitled Sustainability is Smart Business: A Legal Perspective. The seminar covers the triple bottom line, carbon regulation in the US and internationally, and toxin reduction in the product and waste streams. Businesspeople can view the webinar by clicking here. US lawyers who wish to receive free Continuing Legal Education (CLE) credits for watching the webinar can view it by clicking here.

John Howley
Woodbridge, New Jersey

Monday, January 3, 2011

Could This Be The Year for the All-Electric Car?

The stars are finally aligning for what might be the year of the electric car. Demand will be there as gasoline prices are expected to hit $4 per gallon this summer. Consumers will be able to test drive all-electric vehicles at car rental agencies such as Hertz, and a number of different manufacturers will offer a range of models to choose from. The infrastructure -- a network of electric recharging stations -- is starting to fall into place. There's even an iPhone app that will tell you where the nearest charging station is located.

Let's begin with demand for all-electric vehicles. As noted in yesterday's post, most experts expect oil prices to exceed $100 per barrel this year. That means gasoline prices above $4 per gallon this summer. And high prices are most likely here to stay. While most analysts expect that OPEC will try to keep prices in the $100 to $150 range, Morgan Stanley and others question whether they have enough capacity to keep up with increasing demand from China and other emerging economies. If not, then $200 per barrel oil is within the range of possibilities. John Hofmeister, former president of Shell Oil and author of "Why We Hate The Oil Companies," points out that this could mean gasoline at $5 per gallon by 2012.

Gasoline at $4 to $5 per gallon will start people thinking about alternatives. Can all-electric cars meet their needs?

Car makers and car rental companies are betting that consumers will fall in love with electric cars once they drive them, and so far the reviews have been great. Jim Motavalli, writing in, describes the Nissan Leaf as "impressive, quiet, comfortable, sophisticated, and bristling with high-tech aids to help with charging and plug-in connectivity." He also says that it "handles excellently." In addition to the Nissan Leaf and the Chevy Volt, new all-electric cars are expected this year from BMW, Ford, Mercedes, Mitsubishi, Renault, Subaru, and Toyota in a variety of price ranges. At the top end of the price range, you can even get the very sleek, powerful, and fast all-electric Aston Martin pictured above. A number of other manufacturers are also preparing to enter the market with all-electric vehicles, including China's BYD (backed by Warren Buffett), which is building an all-electric 5-passenger sedan.

OK, so the supply of all-electric vehicles and the demand for them might show up this year, but what about the infrastructure needed to recharge them? Turns out that charging stations are already in place, and more can come on line very quickly in response to demand. For example, utilities around the nation are installing recharging stations for electric cars. Hertz has installed charging stations in Manhattan, and will soon be installing more charging stations at select Starwood Hotels. Walmart has been planning to deploy recharging stations in its parking lots across the country, and if that happens it won't be long before Target, Walgreens, CVS, and other national chains follow the lead.

The constraint this year may be whether supply of all-electric vehicles can keep up with demand. When the Prius first came out, many prospective buyers found themselves on waiting lists to get one of the now iconic hybrids. The same could happen this year, especially with a federal tax credit of up to $7,500 for electric vehicles plus additional credits from states such as California, Georgia and Tennessee.

The longer term, and more troubling issue is whether the electric grid will be "smart" enough to handle the new type of demand for electricity. It is not simply a capacity issue. Existing generation capacity could probably handle tens of thousands of electric cars being recharged during off-peak hours, such as overnight. The problem arises if large numbers of electric cars are being charged during peak demand periods. Ideally, electric cars would act as back-up storage sending electricity back to the grid during peak demand hours and recharging during off-peak hours. But the grid is not yet capable of handling that or billing for it. Building a smarter grid, more than anything else, is the biggest barrier to a future of electric vehicles.

John Howley
Woodbridge, New Jersey

Sunday, January 2, 2011

No Recession for Oil

Despite the worst economic conditions in half a century, the price of oil doubled over the past two years from a low of about $45 per barrel in 2008 to a high of $92 per barrel on the last day of trading in 2010. This doubling of oil prices occurred as supplies increased by about 1.2 million barrels per day during the past year. Yes, that's right, the price of oil more than doubled during very weak economic conditions and increasing supply.

It doesn't take a genius to figure out what will happen as the economy recovers. Demand for oil will increase and the price will trend even higher. Most experts predict oil prices above $100 per barrel in 2011. Lloyd's of London issued a report earlier this year predicting prices as high as $200 per barrel by 2013 and warning of “catastrophic consequences” for businesses that fail to prepare.

Some analysts say that the Organization of Petroleum Exporting Countries will step in to increase supply temporarily and cool off markets once oil hits about $150 per barrel. Think about that for a moment. Remember what happened to our economy when oil prices hit $147 per barrel two years ago? Well, that is the best case scenario for the next few years.

I don't know about you, but I'm not really comfortable relying on OPEC to keep oil prices from going over $150 per barrel. What if they decide that a price of $175 per barrel will let them maximize profits without losing too much market share to alternative energy sources? What if prices go even higher because of conflicts in the middle east, a major supply disruption, and/or a significant weakening of the U.S. dollar? What if they ask us to ease off the pressure to root out terrorists in their countries in return for lower or more stable oil prices?

We can change this scenario without undermining our quality of life. For example, we have reduced our use of oil to generate electricity significantly since the 1970's -- without sacrificing dependability or affordability of supply. We have used more efficient designs to lower fuel consumption per square foot for buildings and per mile driven for vehicles -- without sacrificing comfort or safety.

We can do even more by diversifying our energy sources throughout our economy. Yes, it will take significant up front investments. But think about the medium- and long-term benefits. Brazil has completely eliminated its dependence on foreign oil by building the largest biofuels industry in the world. New vehicles powered by electricity generated with a mix of natural gas, wind, and solar could similarly help us re-gain our energy and economic independence. Best of all, the wind farm or solar farm that is built today will have zero fuel costs 5 years, 10 years, and even 20 years from now. Let OPEC compete with that.

John Howley
Woodbridge, New Jersey