Put America’s 'Spare' Oil Productive Capacity to Work

Global oil prices are driven by a ‘rule of thumb’ that suggests prices will go up when the spare capacity of oil available on any given day is less than 5% of expected global demand.  In today’s high priced oil market that swing in spare capacity is about 2%. This a big deal because traders worry about risk such as events in the Middle East, or with Iran or any other places that supplies oil.  Spare capacity or swing productive capacity is the volume of oil than can be delivered as a …Continue Reading »

Gasoline Prices, Inflation and Politics: A Volatile Mix

The impacts of higher oil and gasoline prices are beginning to ripple across the economy.  Wells Fargo Economics reported today that higher energy prices increased the producer price index (PPI) by 0.4 percent in February 2012 which was the highest monthly gain in the PPI in five months. Wholesale gasoline prices were up for the second-straight month, increasing 4.3 percent, home heating oil was up 5.3 percent and residential electric power prices increased 0.6 percent. The growth in domestic …Continue Reading »

Setting the Stage for Change: Big Picture Energy Trends

Technology and global competition are profoundly impacting our energy future.  The evidence is all around us in wind and solar energy advances, horizontal drilling and hydraulic fracturing creating a new North American oil and gas boom market, and the technologies driving smart grid, microgrids, and constant energy management. What are the forces of change taking place in energy today? Global competition for energy resources from emerging economies like China Struggle over energy policy and …Continue Reading »

Keystone XL is Politics XL

The decision by President Obama to reject the Keystone XL pipeline designed to bring Canadian oil to US Gulf Coast refineries was a surprise to no one.   Officially, the State Department said it rejected the project because the Republicans in Congress imposed a deadline of 60 days for review and decision on the project that was insufficient to allow consideration of the issues.  The rejection letter also invited the project sponsors to refile their application---after the election! For the …Continue Reading »

America’s Energy Policy Reality #3: Domestic Energy Security Requires Domestic Energy Production

World oil prices surged again last week with front-month NYMEX Light, Sweet Crude Oil ("WTI") futures hitting $101.75 on June 9 2011 for the July 2011 contract.  That was up from $98.99 the week before.  Oil prices were driven up by worries about the failure of OPEC to agree to higher production targets for the first time in 20 years after US oil stockpiles fell by 4.8 million barrels over the same period according to the US DOE despite a 2.9% fall in US gasoline demand. But OPEC members …Continue Reading »

A New American Energy Revolution

America is engaged in what we do best—adapting to change, responding to opportunity and meeting challenges head-on.  While the recession is technically over our pain lingers with slow economic growth with much uncertainty and rising inflation risk on the horizon but America is slowly going back to work.  Housing and government spending still seems out of control but there are green shoots of hope from the results of the 2010 Congressional elections that solutions to these problems are …Continue Reading »

Snatching Energy Security Victory from the Jaws of Energy Disruption Defeat

I always cringe a little when I hear calls for a new comprehensive energy strategy.  It always seems to me it is such an oxymoron.  Energy bills in the United States are like the Farm Bill, the Highway Bill and other excuses to lard up a legislative Christmas tree with so many ornaments of spending largesse that the entire thing collapses of its own pork. So now that oil prices are spiking expect to hear renewed calls for a comprehensive energy policy. Resist this temptation to sin again, …Continue Reading »

Sustainable Revolution for All

Never Let a Good Revolution Go to Waste! The revolutionary fervor sweeping the Middle East is both exciting and scary at the same time.  There is hope for change that will bring more freedom and opportunity to people long oppressed.  But there is fear that the lack of a tradition of democracy, rule of law and respect for human rights can also lead to chaos and exploitation by even more radical groups than those being forced out. Our study of history also reminds us that revolution is a risky …Continue Reading »

Sustainable Egypt

"Can Egypt join the ranks of Energy World Powers? by Tony Seba on March 9, 2010 If Egypt were to realize less than one percent of its solar energy potential, it could be a larger energy producer than all the Middle East oil exporters put together.   It could power the energy needs of its growing population and could be a net exporter of solar electricity to Europe." Egypt may have created a revolution, but can it sustain it?  That is the question being asked today by every Egyptian …Continue Reading »