Cheap Crude: A Flash in the (Oil) Pan 41 comments
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The biggest mistake the United States could make right now is to assume recent weakness in oil and gasoline prices means the energy crisis is over and the US can go back to our old energy habits and policies.
An editorial in Friday's edition of The Wall Street Journal inferred that high oil prices were solely the result of weak US dollar policies which caused a speculatory oil price bubble. The author conveniently neglected to point out that while the dollar did drop roughly 40% since President Bush got elected, oil prices went up 500%. The author then recommended US auto companies not use their taxpayer bailout dollars to manufacture fuel-efficient automobiles because there would be no market for them with oil under $50/barrel, which is coming (according to him). Notably, the author neglects to mention the role high oil prices played in the current automotive manufacturing crisis as the US big three focused on gas-guzzling Hummers and SUVs as opposed to fuel-efficient intelligent design.
Another article in The Wall Street Journal this week tried to persuade people not to buy fuel efficient cars because the money they save on gasoline won't be enough to make up for the increased insurance premiums smaller vehicles require due to safety considerations. In this article, no mention was made of the environmental costs nor of the fact it just may be better for US insurance companies to receive US dollars rather than to send them overseas to Saudi Arabia, Iran and Russia.
What short memories these folks have. It was only a few months ago that oil was close to $150/barrel. Let's look at the facts. Oil is now in the $60s not because of some huge new supply coming on line. It is low because demand has fallen off a cliff due to extreme worldwide economic weakness.
This is not the 1980s when oil went to $12/barrel due to huge supply coming online. In fact, despite the high oil prices seen in the last few years, and despite the billions spent on exploration and production, worldwide oil supply barely topped 86 million barrels per day. Oil production from Mexico, Russia, Alaska and the North Sea continues to decline due to increasing depletion rates in the mature oil reservoirs. In the last 4 quarters, oil production at US majors Exxon (XOM), Chevron (CVX) and ConocoPhillips (COP) was flat or down.
Other than a handful of large oil discoveries (mostly in Brazil), elephant fields are getting harder and harder to find. When they are found, they are usually in deep offshore waters which are expensive to bring on-line. The era of abundant cheap oil is over. We are entering an era in which worldwide oil supply will not keep pace with worldwide oil demand. It's that simple.
Should we drill, drill, drill? Of course we should. Despite three massive hurricanes in the Gulf of Mexico, there was not one major oil spill or energy related environmental catastrophe. This proves the oil industry has passed the "safety" test and can surely drill safely in the waters offshore California for instance, where the weather isn't even as severe as in the Gulf of Mexico. We should also be drilling in Alaska and any other US territory which holds oil reserves (barring wilderness areas, federal and state parks, and similar areas).
The environmental impact of burning the oil is, of course, undesirable. Such is the price we'll pay for the lack of an energy policy in Washington these many years. Economically as well as structurally, the country is simply not in a position to ignore its oil reserves. Unfortunately, the current economic crisis will delay many oil producing projects the world over. This will merely exacerbate the situation when the next demand driven oil spike occurs, and it will.
Long term, any country that imports 70% of its oil, consumes 25% of worldwide oil supply, and has only 3% of the world's oil reserves must make some serious changes with respect to its energy policy. I'm talking about the United States. The US simply cannot drill its way out of the oil problem. The only solution is a strategic, long-term, comprehensive energy policy as I've outlined here.
There is only one natural gas automobile for sale in the United States: the Honda (HMC) Civic GX. However, it's not available in many states (including mine), is more expensive than the gasoline powered Civic, and the home refueling appliance is sole-sourced, overpriced, and similarly not available nationwide. Natural gas refueling stations for the public are all but non-existent in the US. Meanwhile, oil exporting countries such as Brazil and Iran are hard at work building out their natural gas infrastructure for transportation. The US is simply asleep at the switch. Again.
The war in Iraq has cost the US dearly. Not only did it take millions of barrels of Iraqi oil off the market at exactly the same time China was pumping up demand (and therefore leading to demand as well as geopolitical risk valuation for oil), the war also drained away taxpayer money that should have been going toward alternative energy solutions. I read an article the other day that pointed out that for the price of the Iraqi war, the US could have had a world class healthcare system, a fully funded alternative energy strategy and 10 million Toyota (TM) Priuses in American garages.
It's time for a new president. It's time for a new government. And it is time for new economic and energy policies.
Meanwhile, what is an investor to do in these times? Well, obviously my earlier advice to buy energy has led to much pain (me included!). I did mention in a few of my articles that the only way oil prices would decline appreciably would be if there was an extreme worldwide recession or depression. Well, here we are. Capitalism, as we know it, is on its way out as the US government takes over the financial system. (How ironic considering Bush is a so-called self-described 'conservative Republican'.)
Regardless, one must invest assuming the financial system doesn't completely implode, for if it does, what does it matter anyway? We are obviously in a deflationary de-leveraging cycle where cash is king and return of principal is more important than return on principal.
That said, you have a once in a lifetime opportunity to buy oil stocks at deep, deep discount prices. When stocks like ConocoPhillips and BP (BP) are valued such that their PE is damn near equal their dividend yield, it is time to buy.
Could oil prices remain low for a year, even two years? Yes, they could. However, at some point in the future (barring a one world government or "new world order"... which is not out of the question), oil supply/demand fundamentals will again take over and we'll have another huge spike in oil prices. ConocoPhillips, Chevron, BP and Exxon Mobil will once again be right there to make huge profits. Meanwhile, an investor can collect the dividend and watch as these companies increase their downstream margins in gasoline refining.
Disclosure: the author owns all of the oil companies mentioned in this article.
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This article has 41 comments:
While oil was at 147 per barrel it seemed like everybody had a pretty good idea of what the changes are that we need to make.
T. Boone Pickens has it right, we might as well start now.
Ou you people are trying too hard!
1) Provides much needed money for mass transit and infrastucture projects and
2) Helps keep demand down in the US, which uses 25% of the worlds oil output, mostly for transportation, which will keep oil prices much lower than they would be otherwise.
I would much rather have the money flowing to the Treasury in the form of fuel taxes than to the middle east in the form of higher fuel prices.
Because this would be such a regressive tax, maybe we could use the extra tax money to stretch out the 15 and 25% tax rates.
in 1973 the cartel cut oil off to the usa. we lined up at fuel stations. you could not find anti-freeze. the price of fuel skyrocketed. the consumption of fuel dropped. america mobilized. drill here, drill there. alternative energy. purchased smaller cars.
now let us timewarp three years later. big car sales up. sunday drives back. we were importing even more oil than before.
give me a break. we have to be the dumbest people on the planet to let history repeat - and it will. (oh, do you remember the 55 mph speed limit?)
the problem is that the alternate forms of energy are too expensive (except natural gas). we need to pump money into r&d to have a technological breakthrough. oh, i forgot we are piling debt up faster than the landfill at mexico city, and the tax revenue to the government may bring tears to the politicians eyes (even if they have no souls).
1) I have a different reading on the energy situation which I suggest you consider very seriously.
2) The prices of the oil companies could drop another 50% in the next six to nine months. If I were in your shoes, i would sell all my oil stocks and put half the money in TIPS (Treasury Inflation Protected Securities) and start buying long term Puts (Leaps) in the major oil companies-XOM, CVX,COP.
3) I also suggest you go to Wikepedia and look up John Maynard Keynes and Keynesian Economic Theory.
4) According to George Soros, about three months ago, most of the increase in oil price and commodities in general over the past year were do to speculation. He said this was a bubble that would burst. He was right. I am a big fan of Soros. When I grow up I want to be just like him.
5) There was a double effect. Demand for oil was rapidly increasing in Chinal and Inda, two of the most populous and fastest growing economies in the world. Now both the economies of China and India are slowing. Oil demand is also slowing in Europe and the US the other two
biggest consumers of oil in the world. This large drop in demand will last at least two or three years. After that, as you noted, production in Russia, Mexico, etc.(also dont forget Venezuela and some analysts believe Saudi Arabia is quickly approaching the limit of what it can produce) is going to drop. According to the WSJ Mexico will cease to be an oil exporter within five years. It is only after this peak oil effect starts to kick in will oil prices start to rise. I have seen estimates in the WSJ that oil will stabilize at around $50. I would not be surprised if it
stagnates at even lower prices for the next two or three years. This is a grim scenario, but if it is accurate anyone owning oil stocks is going to take a bath worse than what they have already taken.
6) Like you, i believe in Peak Oil Theory. However based on my belief in Keynesian Economic Theory, I think that for the next two, three of even four years, demand will decrease faster than production, until some of the major producers run out of oil to export. -- Oster
Good to have you back fitzmeister.
In China 2 stocks that are into Natural gas refueling stations for Autos is SNEN and CHNG
Now currently the USA has been footing the bill for all operations in Iraq, but i suspect that is soon to come to an end as we have our own money problems and it won't be long before our next President tells Iraq that they are going to have to start paying their own bills out of the proceeds they have been recieving for the sale of Crude Oil.
The thing is though that money isn't goin to last them very long just paying expenses and it certainly won't be enough to rebuild the rest of the country, and they will have no choice but to start producing MORE OIL!... THey are already entering into exploration/lease agreements with oil companies with an eye toward increasing their daily production to 4.5 million bpd. Of course IRaq needs oil to be higher too so that it can make enough to rebuild the country but currently it just needs money. Later on after the new oilfields are in production I expect that any time OPEC cuts output and oil prices go UP, IRAQ is going to increase its output to sell more oil at the higher price and thus help stabilize oil markets far into the future...
Nice to see a new article from you. It is right on the money as usual.
We definitely need new reserves while we transition to alternative fuels over the 50 years. Unfortunately, most alternative energy technology is still in its infancy and will take a while before it displaces oil. My predication is when Obama takes office in Jan 2009, he will scrap all his plans for funding alternative energy technology incentives (using the poor economy as the excuse) and will have to pay for all those UAW votes he pandered to and we be back to making Hummers, Jeeps and low CAFE standards.
One solution that gets little attention is conservation.
Transportation uses 67% of all petroleum. If the CAFE standards were raised to 50 mpg and enforced (no light truck exemptions that Clinton and Gore implemented to buy UAW votes), that would result in 33% drop in total petroleum consumption. Same thing with the 55 mph limit. Bringing it back would result in another 15% drop in petroleum use.
using the wasted money we could have given every schoolteacher a 10000 raise in addition to fixing social security, providing universal medical care, etc. etc.
> jack
Incidentally, what Soros said was that the rising oil price was due to fundamentals, but it had a speculative component. A show of hands might be useful here, because this year's 'Nobel' laureate in economics could probably go along with this, although basically he's smart enough not to doesn't buy the bubble nonsense.
And IF it is true that for the cost of the war in Iraq, it would be possible to have a fully funded health care system, as well as a comprehensive energy strategy (although not the one PRESENTLY advertised by Mr Obama), then there is only one way to vote, isn't there?
Many experts have stated the major component of oil prices is due to basic fundamentals (economics 101: supply & demand). There is a small speculative and geopolitical component as well.
Alan Greenspan stated that internet stock and housing prices were indeed bubbles, but commodities (including oil) were not bubbles.
Henry Paulson stated that high oil prices were primarily driven by supply not being able to keep up with increasing demand. The lack of serious investment in new reserves and alternative energy is the chief culprit.
Jeff Rubin has many excellent reports and has analyzed outstanding oil futures positions and concluded that oil prices were driven by real demand and the speculator positions accounted for a very small part of oil prices.
Oil prices have fallen in tandem with the crippled world economy and will rise again when financial institutions are off of life support.
ames: you are correct, and the funds for solar and wind are already drying up as the credit markets continues its freeze out. more worrisome is that new oil production projects have been put on hold. this will make the next oil spike worse than this years.
jim jenson: agreed. hopefully the next president and congress don't read the same editorials in the WSJ that i have been reading lately...
armistead: correct. note that everytime boone pickens gives an interview (as on 60 minutes last night), the interviewers spend more time focusing on his net worth and what his plan will be for his finances, as opposed to the specifics and need for his plan from a US energy security perspective. it's like when GE refused to run one of his ads on NBC (they gave in after pickens went public about it), it seems corporate america is lining up against pickens, even as GE sells him the wind turbines! why?
stevebalmer: i can't take credit for the article's title, that was a SA editor's choice
geophys: what exactly do we have now under bush? we have the federal government taking over banks, the mortgage industry, insurance, and autos. this is not socialism, it's fascism. at the same time, bush has doubled the deficit from $5 trillion to over $10 trillion, and that is not even counting the current bailout numbers, yet, we have absolutely NOTHING to show for this money. At the same time, it is your free-market entrepreneurship and hands off approach that has led to the US importing 70% of its oil, with very little alternative solution to protect us from the future. it's also led to the creation of the Hummer and fuel inefficient SUV's. wonderful free market stuff? no my man, disasters. there are times when governments are needed, that is why we have one. unfortunately, our government that last 8 years has been used to no good purpose. the republicans said we had no money in the budget to pay for health care, social security funding, or alternative energy. funny though, they had money to spend on the iraqi war, and now we have nothing to show for it but a mountain of debt that china and the asians can use to sink us in the future. when oil goes to $250/barrel, you'll be first in line to complain when the entire economy falls into the abyss and we are all back on the barter system with troops in the street. you're way of thinking about government's role (or lack of it) is extremely dangerous. just look what happened when government regulation was lifted in the financial markets? a few made billions, and the US middle class was gutted (and is being gutted every day...).
Alex_G: there were some of us in the 1990's who were begging the government to raise taxes on fuel just as you propose. that was the time to do it when we had strong job growth, a strong economy, and balanced budgets. we should still do this, but as my blog's energy policy recommends, it should be done slowly, and very publicized. it will never happen though.
the hand: i agree with most of what you say, however i differ with you on wind and solar being more expensive. if you take into account that we could keep the jobs making wind and solar infrastructure in the US, and keep the money to pay for them in the US instead of the oil money going overseas, i am not so sure it's that expensive in the long run. besides, wind and solar infrastructure, once built, is there. as oil rises in the future (and it will), this stuff will pay for itself many times over. i do however believe that a breakthrough is needed. one breakthrough that was discovered and is not being used is nuclear, and we need more of it very badly.
oster: oh yeah, the oil shares could go down further, no doubt. if the worldwide recession turns into a depression (and it could), oil could do what it did in the depression where my grandfather just stored it in big tanks and waited until he could get something for it. however, i respectfully disagree the price in oil was mere speculation. it was some speculation, some drop in the US dollar, but mostly lack of abundant supply even as the price went to $150/barrel (!). that said, as i have said before, it is supply and demand, and if the world economy continues to crack, sure, oil could hit $50/barrel. demand in the US is off close to 9%, or 1.8 million barrels. as you say, it's down in europe as well. so, that extra supply, if it continues to be pumped, will build up inventories further and the price will come down. so, i don't necessarily disagree with what you are saying.
isacc the terrible: i agree, isn't it "terrible". thanks for welcoming back, although i was very hesitant to write again. anyone who followed my earlier investment advice has lost as much money as i have. although i knew oil would come down, i never in my wildest dreams saw the financial chaos that we are seeing today, and the fascist takeover of the american financial system by the government. further, i NEVER saw the strength in the US dollar...and still don't understand why people are flocking to a currency backed by nothing but a mountain of debt and a government that is completely disfunction. it amazes me.
mkreisel: yes, you said that. unfortunately, you didnt explain the coming financial meltdown in terms that convinced me that you were correct! so, yup, you were right and i was wrong and time for me to eat crow, and that's about all i can afford to eat right now.
X-15: i totally agree we should be fully utilizing natural gas and that is why i am a big pickens fan (whether he makes billions on the idea or not).
jgold: yes, obama has said he will do that. however, it was tried before and didn't work. as jim mulva said on COP's conference call last week, the major oil companies have fiduciary shareholder responsibities. if they are taxed at higher rates, they will simply cut back on exploration and production expenditures. the oil companies are in the driver's seat here, and as much as i like obama, i have been banging his campaign with emails about how bad an idea windfall profits taxes are. my gut tells me obama will just remove some of the tax breaks oil companies are getting now.
scotterz: you are exactly correct about iraq, and i wrote an article awhile back explaining why bush and cheney went into iraq and it had nothing to do with terrorism, WMD, or "freedom", but with oil. not only does iraq have some of the largest un-tapped oil reserves, but most of the oil is high quality and is under pressure, so it is not necessary to install the pumping equipment as in saudi for example. that said, even taking future iraqi oil production into account (and i agree with you on this point), the depletion rates of mature reservoirs combined with increasing demand (assuming at some point we actually have a functioning world economy again), and the worldwide supply/demand problem will soon raise its ugly head again and the US will be hosed (again).
longoil: thanks, good to see your words again. i doubt very seriously you will see obama back Hummers and low CAFE standards. he has said over and over again in the debates that if the US government gives bailouts to the big 3 (congress pushed this through under the radar screen while debating the $700 billion bailout), that this money should come with the restrictions that it is ONLY used to fund fuel efficient automobile re-tooling and manufacturing. i think he would hold their feet to the fire on this. totally agree with you on higher CAFE standards and lower mph laws (both are in my energy policy).
jack gordon: i agree. the war in iraq was (and is) a US national disgrace and complete waste of money.
CLH: very nice comment. unfortunately, you apparently didn't read my energy policy (there was a link to it) where i state strongly the need for the US to build nuclear power plants. i don't mind constructive criticism, but jeez man, at least get your facts right before you start throwing stones. with the "uneducated leftist" remark, does that mean that you believe that last 8 years of "educated conservatism" has been beneficial for the US. if so, this proves who the uneducated is.
fred banks: well, i only voted one way, and i assume you know my pick. that said, both candidates could use some mentoring when it comes to a comprehensive, long-term, energy policy.
thanks all.
While you correctly state that the funds used to fight the Iraqi war should have been used more wisely, let's not forget that the failure on the part of our CIA to correctly identify the threat from Iraq started way before Bush took office, during the eight year administration of President Clinton and before that, too.
You can despise Bush's policies all you want, just remember that if you are going to chronicle the truth, you have to acknowledge the whole truth!
Long term, I believe that oil will get more expensive. Hedging in the meantime, buy the ETF DUG, or DOY, and by being nimble and taking small profits quickly, are smart moves. These are very scary times. We are watching one country after another fall--short term, depressing prices.
Alt energy isn't nearly this expensive. Domestic alt energy providers would PAY taxes instead of CONSUMING taxes or just sending those dollars into a foreign black hole of debt. Plus it would employ thousands of tax paying Americans and reduce our trade deficit.
And your uneducated rightness does not even know how to pronounce nuclear "nucaler". This is not a political problem, this is an environmental, economic (national wealth going to nations that hate us), and national security problem (see last perenthesis). If "W" had not wasted our national funds and youth on this ridiculus war, we would not be facing a lot of the angst we have now. There is no way a country can win a war abroad without being storng at home. That strength comes from a robust economy and domestic resources (energy, manufacturing, technology). Until that happens, spending more money (debt) in Iraq is a waste and useless. And, why in the hell can't Iraq pay for our troops to be there. Why should we foot the bill, while they make all the money. Gee, maybe you will come and sell my products for me, pay my electric bill and my rent, and I will get all the profits. That is the Bush "economic" and foreign policy.
optionsgirl: you're right, the 8 years of the republican bush administration has been such a success i must have lost my head! although you are correct that the democrats have majorities in the house and senate today, did you forget that most of the bush administration's disastrous policies were passed in his first term when republicans held both the house and senate and rammed through all their deregulation legislation? with respect to your assertion that the clinton administration neglected the threat from iraq, this is because there was not threat from iraq. do you honestly believe the iraqi war has been a huge republican success story? wrt to my despising bush, thank you, it is my right to despise him and my opinion that the 8 years of bush and republican rule will go down as the worst administration in the history of our nation. we've lost our constitution, our bill of rights, our capitalistic financial system, our standing in the world, and the middle class has been gutted. oh, and the economy is a disaster. other than that, it's been a huge success.
chrisB: excellent point - if the US is going to fight oil wars, we must factor in the cost of those wars into the price of a barrel of oil.
google fan: thanks for your support.
Ed Man: well, i could be wrong about this. i read an article not too long ago which stated that there were some very "minor" spills associated with the hurricans but nothing of any consequence. i did not know about the "major" spill (as you say over 100,000 gallons), or, i never would have made that comment. if i can verify your reports (i will research this later), then i stand corrected and thank you for pointing this out. however, all that said, considering the strength of the 3 hurricanes, and that they hit damn near head on with the majority of Gulf of Mexico production and refining, i will still suggest that the oil industry has come along way from the days of old where they were having frequent oil spills even without storm activity. further, if we are going to allow the politicians to keep us addicted to foreign oil (which we have), we are going to have to suffer the environmental after-affects of such ill-advised policies. this means more drilling and more CO2 in the atmosphere. again, this is one reason why we need a comprehensive, long-term, strategic energy policy. nothing is more critical to the economic (and environmental) future of the U.S.A.
inthemoney: i agree. the problem here is the nature of the commodity. it is still supply and demand (current, as opposed to future). and, as long as oil supplies meet demand "today", the cost of storage and the commodity will be priced accordingly. that was what i was trying to warn against in the article. if we face a year or two or three of deflation pressures, which i think is very possible, the demand destruction could cause oil to drift further lower still. so, people will get used to the low gas prices again and act, in my opinion, irresponsibly. then, when (and if...) the economy ever does come back, not only haven't we made any progress on transitioning away from oil, but we also will face a situation where newer production projects have been put on hold due to the low price and credit market. i fear the next oil price spike is going to make $145/barrel look like a bargain, although it could well be years before we see it. when it happens, if the US hasn't made any progress away from importing 70% of it...we're hosed, again (IMHO).
old wizard: i agree, i am not happy with either candidate's energy policies as they are not comprehensive, not long-term, and lack the full strategic insights. that said, i simply cannot see rewarding the republicans with 4 more years after the last 8 years of fiscal, economic, foreign, tax, and domestic policy disasters. pickens is awesome, even if he would get rich on his proposal at least he has a plan that is rational, doable, and good for the country. however, the government could play a big role in this plan. just as the government's buildout of the interstate highway system paid big dividends and ended up, from an economics viewpoint, paying for itself many times over, so could the build out of the electrical transmission infrastructure. if we can't get the wind energy from the plains or offshore to the places that consume the electricity, it's all for naught. currently, there are big transmission issues on both the wind energy from the plains and the solar energy from the sw deserts. this is a case where the government should come in, put the energy department (if we actually had an energy department worth a damn) in charge of studying the problem, proposing the best transmission solution, declare imminent domain, and build the damn thing. it's exactly this kind of delay that is putting the US further and further behind in the race for alternative energy solutions, and thus deepening our reliance on oil from Saudi, Iran, Iraq, Russian, Venezuela and all our other "friends". anyhow, nice to see you commenting again.
One last comment regarding the greenwashing of the oil companies.
Have you really forgotten the Exxon Valdez? In Alaska we haven't, and no, the beaches haven't recovered. In fact you could successfully drill for (spilled) oil right now on the beaches of Prince William Sound. Also occasional hurricaines, are only one obstacle to offshore drilling. Up here we have moving ice packs, earthquakes, etc.
-- But it's OK to give them a trillion dollars a year (for six decades, current dollars) to fund a permanent war machine. Do they run that well? You simply parrot every stanza in the Republican hymnal.
Alex_G: " the obvious solution is to raise Federal gas and diesel taxes.
-- Europe has been doing this for decades, which is why they are so much less dependent on oil than we are. This can be made revenue-neutral as you suggest by lowering income taxes an equal amount. Way too sensible to ever happen here.
longoil: " One solution that gets little attention is conservation."
-- As the ad says, this is "the biggest no-brainer in the history of mankind." Regardless of what else we do, let's stop wasting finite resources.
CLH, you never cease to amaze me. Random noise, as usual.
Chris B: Very good point on the true full cost of energy. It might be good to think about the environmental cost along the same lines.
wrt to environmental aspects of oil, again, we have put ourselves in a corner and, economically, we cannot afford NOT to drill and produce our own oil. otherwise, we just keep sending more US dollars to our enemies, increase our trade deficit, and compromise our economic and national security. we must assume the risk. btw, i heard you guys had a mag 5 earthquake up there today. but the exxon valdez was a drunk pilot, not a lack of drilling technology. that said, of course there are earthquake and ice pack risks that, well, IMHO, have to be taken. i do agree we should begin the buildout of a hydrogen infrastruture, but not prioritized above natural gas for cars and trucks. i think water electrolysis to produce hydrogen from wind and solar should be used as a storage mechanism for when the wind or sun doesn't blow or shine...or, when there is so much wind or solar energy it cannot be readily absorbed in the grid. hydrogen could be generated to be used to generate electricity later. one comment was that molten salt was a better storage medium...honestly i don't know as much about that but have heard it is economical in some scenarios. that said, it isn't transportable or as relatively simple to use as hydrogen.
samadams: thanks man. i bought some sammies the other day..i can't afford guiness any more since i lost so much in the market!
kunst: nice rap up. thanks.
wizard: yup, the US could do anything we a real leader, a logically well presented rationale, and the unleashing of the brain power we possess. hopefully, once obama gets elected, he will be that leader we need so badly. wrt GE backing mccain, there is no doubt about this! do you ever watch CNBC which GE owns? man, joe kernen just frustrates the hell out of me. when he and david faber first came on, they were great. balanced out haines who was a real ass. now, the roles are reversed. kernen is the head guy in the morning, and the republican ideologue who rivals rush limbaugh in terms of influence. haines now has gotten real and even bought a mercedes smart car because of his concern about gas prices. i bet kernen has a hummer. what's amazing is how they talk about how obama will "socialize" america when they are sitting there everyday talking about how the fascist bush administration has taken over the banking, insurance, and national mortgage market (!). it's not socialism what bush is doing...it's "socialism for the rich", or, as i prefer, fascism. read my latest on that here:
thefitzman.blogspot.co.../
There is no disagreement with a need for a coherent energy policy. Unfortunately, it's most likely too late for this country to have it's power grid supported by nuclear energy.
Several execs I know in the utilty industry have said that is still too diffucult to get approval to construct a new nuclear power plant. I live in the state of Georgia. Environmentalists were recently able to block the start of a new natural gas fired power plant. They cited "cost" and consultant reports that indicated conservation could make up the difference. Never mind the local populace that needs the jobs and the future economic growth that the plant could generate. This mindset is why we don't have a coherent energy plan. Don't blame the Bush adminstration, that's the easy way out. Cheney put forth proposals for an energy policy back in 2001 and it was greeted with a yawn. By the way, does anyone know what they do at the Department of Energy? I don't.
The problem with these environmentalists is their short-sightedness.
All they see is, that they blocked a new source of CO2 emissions.
What they don't see is that this places higher demands on older existing coal fired plants further increasing CO2 and harmful emissions (i.e sulfuric acid). It also removes a new source of energy that could be used to power PHEV vehicles that would really reduce CO2 emissions and dependancy on foreign oil. Conservation is definitely a key piece of the energy dilemma puzzle, but not the entire solution.
There even is great opposition to solar and wind power. Several environmentalists oppose wind farms because of some bird casualties. Many also oppose solar farms because they feel they would clutter the pristine desert and should be located on rooftops insteads. It does not help when high profile individuals like Ed Kennedy secretly add poison pill clauses to a bill that would have approved a wind farm at Nantucket near his family home.