Category Archives: Energy

I don’t believe in the death penalty, but …

after reading about BP & its compatriots desire to increase profits by cutting corners and the resulting human, animal and ecological devastation in the Gulf of Mexico, I'll make an exception for BP and the other corporations that created this mess.


Just another damn quote from a tree hugger! [Good, we need more!]

Mark Boyle over at Just for the love of it posted a useful piece on why he attempts to live a life of zero waste and simplicity.  Here is one quote:

"Because we are so disconnected from the embodied energy, embodied
suffering and embodied destruction that goes into the things we buy,
the natural ecology of the planet we share is being eroded by the
minute, factory farms and horrific slaughterhouses have become insanely
'normal', and we kill millions of people in the middle east just so
that us greedy bastards can have the luxurious, built-in-obsolescence
gadgetry that oil cheap oil affords us. I am sorry if that sounds
harsh, but the truth shouldn't be avoided for fear of offence. One of
the problems in the media and the publishing world is that everyone is
so cautious that they'll upset the reader and lose some sales, and so
the truth is rarely laid bare. We're adults though, so lets all grow
up, it's really our ego's that are making this planet inhabitable for
many species."

A Cash for Clunkers Review

According to Toyota Tops List of Cash-for-Clunkers Winners (NY Times), 690,000 new vehicles were purchased with money from the Cash for Clunkers program.  On average, new cars got 25 miles per gallon (mpg) while "clunkers" got 16 mpg.  If the average person in the US drives 15,000 miles/year, then new cars will save 337.5 gallons of gas a year (937.5 gallons for "clunkers" and 600 gallons for the newer cars).

So did the Cash for Clunkers program pay off?  Lets try a back of the envelope calculation.

If we estimate that the "clunkers", without the program, would have been replaced within five years on average, then the total gas saved would be:

690,000 cars x 337.5 gallons saved per year x 5 years = 1,164,375,000 gallons saved

or about 1.16 billion gallons of gas saved.

Since about $2.9 billion was spent, that means that for every gallon saved, it cost the federal government about $2.49.  Increasing the average replacement time decreases the cost per gallon, while decreasing the replacement time raises the cost per gallon.

With gas costing $2.62 a gallon on 8/24 (see, this is a slight savings.  The savings would grow should the price of gas go back to its high point of $4.00 in July 2008 or even higher when peak oil really kicks in.

Some (1 , 2) have estimated the true cost of a gallon of gas to be significantly higher due to such factors as the subsidies the government gives to gas, protecting the oil supply in the Persian Gulf, lost time in traffic and the environmental cost.  Estimates of the true cost of a gallon of gas vary between $5 and $15.  At those prices, Cash for Clunkers program was quite a good investment. 

However, whether the Cash for Clunkers program was as efficient at cutting our oil usage and pollution as other approaches such as home energy efficiency improvements, or increased ride sharing, public transit or bike paths remains to be seen.

Making sense of energy and materials

The price of oil and other materials went through several years of rapid growth as the economy grew and several months of an even more rapid fall once the economy started to crash.  Over at The Oil Drum, Phil Hart gave a pretty simple micro economics explanation of what happened and what might happen going forward. 

His thesis relies on the idea that we have reached either a peak or the peak of oil production.  However, given what we know of crude oil production in the last few years, the idea isn't far fetched.
Crude oil production 12 month moving average

As Phil points out, we could see more booms and busts.  The busts prompt oil producers to rein in plans to expand oil production, leading to reduced production and higher prices.  The higher prices then reduce output from the rest of the economy, causing the bust.

We may see this cycle in other commodities.  Food production, under threat of increased desertification due to global warming, already happening in Australia and elsewhere (see Burning Questions), may exhibit a similar behavior.  Dire conditions potentially.

The Big Chill in the Northeast

The 12/19/05 USA Today has an article entitled The Big Chill about what could happen if there is a winter fuel crisis.  Here are some telling quotes about the North East US, where I live (emphasis are mine):

While the Big Chill will hit low-income households the hardest, no one
may be immune if the weather turns foul. New England and perhaps all of
the Northeast, including New York City, are a special worry. Gas
companies grant big price breaks to customers year-round if they agree
to have their service cut when supplies are short. Chances are great
these discount customers will be shut down this winter, and they
include manufacturers, some schools and hospitals, and, ominously,
about 77 percent of New England’s gas-fired electric power generation,
which requires large quantities of fuel

The curtailment of "interruptible" customers will trigger a double
squeeze on consumers throughout the Northeast. First, costs for home
heating oil will skyrocket, as scores of power plants and other
interruptible gas customers switch fuels and make a grab for all the
oil on the market. Even though heating oil is a major fuel source in
the Northeast, there are no oil pipelines from refineries into New
England, which relies on deliveries by tanker or barge. And in recent
years, the oil industry–following the U.S. industrial trend–has been
keeping inventories low to promote efficiency. Tim Irving, executive
director of Heat, U.S.A., a company that buys heating oil in bulk for
northeastern homes, recalls that in the most recent severe cold snap,
January 2004, the industry simply could not ship in sufficient
supplies. "The just-in-time inventory system, when put together with
the utility policy of having interruptible gas customers, creates a
very volatile situation where literally in a week, New York harbor went
dry [of heating oil shipments] because utility customers went on line
Irving says. "Your middle American ends up paying more to support this

Electricity could also be effected:

The second threat is a severe electricity shortage in the
Northeast–with possible brownouts or blackouts. Deregulated
natural-gas-fired power generators, under no legal obligation to serve
customers as the old monopoly electric companies were, can simply stop
generating power. Some plants will be interruptible customers with no
backup fuel source. But in other cases, power plants that have firm
natural gas contracts will stop generating electricity anyway and sell
their fuel at enormous profit. That is precisely what happened during
the three-day January 2004 cold snap, when more than 25 percent of New
England’s generating capacity went off line and the reserve margin was
near zero.
  The market weathered that storm, but ISO New England, the
organization responsible for managing the electric grid, says that even
under normal weather conditions, electricity demand this winter most
likely will set a new record surpassing that of the perilous 2004 cold
snap. The grid operator has taken steps to head off a shortage,
spearheading a public-relations campaign to urge New Englanders to
conserve electricity, attempting to work out agreements with big
customers to curtail demand, and asking the Coast Guard to station
ice-breaking barges in locations that will assure fuel oil deliveries
can make it downriver to electric plants. But Connecticut Attorney
General Richard Blumenthal says as long as power generators are allowed
to shut down and sell natural gas during a weather crisis, there is a
risk of the kind of market chaos, as well as manipulation, that roiled
California in 2000 and 2001. "The result could be a calamity," he says.

Thanks to The Oil Drum for pointing this article out.