NumbersGuy

A123 Systems Looks Headed Back to IPO Price

I, like RR, thought sunstar was joking...

Is There Really a Global 'Cabal' Aiming to Dump the Dollar?

Seems like as a long term strategy having oil trade using a basket of currencies would be a way to slowly wean themselves off the dollar rather than doing it all at once. Maybe the currency basket is weighted based on the amount of oil each currency basket uses? So it starts weighted to the dollar but as China grows (and uses more oil) is slowly moves their way.

They don't just dump the dollar, but the oil countries can slowly wean themselves (probably they're driving it as much as the Chinese) and Chinese can still use all their dollars to buy oil in the medium term as well.

The Energy Efficiency Paradox

As someone above pointed out, using automobiles as an example for efficiency doesn't really cut it. In fact, MPG's on average went down over the last decade or so thanks to the popularity of the SUV, which was driven by strange exemptions to CAFE standards for light trucks. Market distortions at work,

I don't have the hard data in front of me, but California has had hard efficiency standards for 30 years. The argument that they haven't decreased energy use is solid, but the energy per capita use is much lower in California than the rest of the US and they have, as a result, avoided building power plants they would otherwise have needed.

Obama's Energy Bill: A Recipe for Economic Destruction

You need to explain those numbers. How does $0.237 Trillion (which sounds like more than $237 Billion) end up as $5.6 Trillion in 2036? Using your doubling number, it should be $0.474 Trillion annually at that point, which is a lot less than 20% of that year's GDP, no? It looks like you're taking a cummulative number and dividing it by an annual number, which doesn't make sense. Please explain.

In any event, there is a cost to the energy bill. I'm not going to deny that. But I'm not going to deny climate change science either. There is a clear risk of potentially catastrophic problems that society as a whole will face if we don't start to grapple with these issues. The Energy Bill is an attempt to start doing that. (If you're going to tell me that it's all a "hoax" then we can stop here. There's way more than enough objective scientific data to make it clear that a real quantifiable risk exists.)

On another note, blaming California's budget crisis on its energy policies doesn't fly. Blame it on a combination of a polarized legislative process and fiscal irresponsibilty. Energy costs, while higher in CA certainly, have little, if anything to do, with the State's fiscal crisis.

CA uses energy more efficiently than any state in the country. Higher costs have resulted in more efficiency and, on the down side, the loss of some energy intensive industries. But their early move into alternative energy has created an industry and a lot of investment in new businesses. Overall, I would argue it's a positive.

Yes, the Energy Bill will result in some "Economic Destruction", but have we forgotten Schumpeter? Creative Destruction is necessary in any vibrant economy. WM pushes the energy sector in a direction that it must eventually pursue, unless you are OK with the increasingly clear risk of a major shift in global climate. We can follow the rest of the world or we can try to take the lead (a little late for that frankly). It will be disruptive and costly to some, but an economic opportunity for others.

The US has always been blessed with an open economy that manages through these painful transitions relatively quickly, thanks to reasonable levels of labor mobility and capital markets that have been fairly adept at redirecting capital to new opportunities. Hopefully those strengths will help us through this next transition...

California: More than Just Economic Problems (Plus Some Potential Solutions)

I love my home state and always will. Sure it's kind of screwed up, but find me a place that isn't. On the fiscal side, we've been living a boom-and-bust cycle since Prop 13 made us very dependent on sales and income/capital gains taxes. I'm still amazed that during the Gray Davis era, some genius in the budget department suggested that revenues were going to keep rolling in at dot-com boom levels into the future. It didn't occur to anyone that when the market slowed down, so too would revenue? Nope. They decided the money would keep flowing and locked in some very expensive commitments. And Arnie hasn't truly bit the bullet. He wants to be liked too much. Do you know any politicians who don't?

I saw some data in a presentation a few weeks back about applications in the state for renewable energy installations. Now it was only applications and clearly not all of the projects that are applied for will ever get built. But in total, it looked like all those applications amounted to a very significant percentage of total peak load energy. I thought it was near 50%. I'd love to see that data again and hope you can find it and incorporate it into some of your future work.

The Pickens Plan Changes Its Strategy

There isn't really a change here. His point about trucks is not new. He's always said that natural gas is for trucks, but using LNG for heavy duty trucks, CNG for lighter duty short-haul vehicles, taxis that pass by central stations etc. Look at CLNE's filings for more on that....

Oil Bull Market on Hold, Demand Should Keep Growing

So subtracting out the US, it looks like demand worldwide grew by 1 million barrels per day per year in 08 and is forecast to do the same in 2009. How reliable, typicallly, is EIA data?

Latin American Selloff Offers Investment Bargains

Argentina was counting on soy prices staying high. It imports oil/diesel fuel from abroad. It has no oil for export. The point is valid, it's just a different commodity they were counting on.

Marc Andreessen on Financial Crises, No IPOs, and Obama

The point isn't so much that they deregulated these markets as that no one regulated the emerging derivative markets in the first place. This lack of proactive attempts to regulate the market occurred in both the Clinton and Bush administrations. If there's any single person most culpable (and the blame really should be spread quite widely) it would have to be Senator Gramm (yes until recently McCain's Treasurer) who was the adamant defender of "free markets" and fought to make sure that those new markets were not regulated. Good job Phil! How about those free markets now? Now we got a nationalized financial sector. That puts us in the category of Sweden!

A little preventative medicine (some sane market regulation) could have gone a long way to preventing a major illness later on.

Is the Peak Oil Theory Valid?

You can't be serious in thinking the the "geological rate of petroleum production" could possibly be equal to or higher than our rate of consumption? The oil we're consuming accumulated over millions or billions of years! And even your optimistic estimate stated that US reserves could supply the world for 30 years. Come on now....

I've heard a lot of arguments against the Peak Oil theory - and your argument that there are reserves out that we're not touching isn't totally unreasonable, though you don't address the increased cost of getting to those reserves. I believe we could get at them, but probably not fast enough to make up for the dropping supply from other sources. (OK maybe if we had started earlier...)

But drop your first argument - that's just ludicrous.

Food and Fuel: Brazil Breaks New Records

The problem is factoring the effect this may have on climate change. (And yes, I am taking it as a given - I'm going with the vast majority of the world's scientists, not the small group that denies it.)

To do a full economic analysis of that problem, we would first need to determine how much rain forest is being destroyed to make room for new crops. Then you have to determine how much carbon is lost, net, as a result of that deforestation and, assuming you believe the market cost of carbon, factor that into the analysis.

Many would argue (with some reason at this point) that the carbon market doesn't really reflect the reality of the climate change problem. In that case you can at least assess whether biofuels are helping alleviate or are making worst that problem.

But, in the end, I guess that's a separate question and doesn't really effect the fuels or food debate.

China Clean Energy Halts Biodiesel Production

I suspect it would still make business sense if they could get a fair price for the diesel. $700 per ton comes out to about $2.40 per gallon (293 gallons per ton). If they could get something closer to US diesel prices ($3.50 before you add the $1 per gallon credit which is a travesty of another sort), they'd probably still have a business.

Why Bush Doesn't Like Cap-and-Trade

You know it's almost surreal that people continue to deny that we're impacting the environment by pumping all this carbon into the air. But I'm not going to change anyone's mind on that topic and it really doesn't matter.

I could also talk about Peak Oil and point out that we need to wean our economy from oil for that reason. But that could lead to a counter productive argument as well.

So let's ust look at oil prices as they are today. Are they jumping because the dollar has risen or because Peak Oil is upon us and demand for oil continues to grow from Asia and other developing areas? Probably it's all three of those things and it doesn't matter really, because the prices are what they are.

So what are we going to do about it? We need to use energy more efficiently or the economy will be brought to its knees. How do we make that happen? A Cap and Trade System or an Energy Tax seem to be the two ideas on the table right now. We need to do that to remain competitive regardless of what you think about climate change or peak oil. That's a fact on the ground that we must deal with.

I prefer a tax as it's more "efficient" but that might not be politically feasible. So cap and trade is likely part of our future. Either works for me because it incentivizes people and businesses to use energy more efficiently which saves money and makes us more competitive. And that's a good thing, right? No matter what you think of the politics?

Telecom Argentina May Benefit from Mature Cellular Market

That's a great analysis with one caveat. I wouldn't look to a buyout anytime soon. The Argentine government is trying to buy back foreign owned companies (such as Aerolineas) and would make life miserable for (and probably just flat out block) any proposed Telecom buyer (unless the buyer gave some of the government's friends a piece of the action.)

It's Now 'Official': Ethanol Is a Scam

Come on huskerbob, tell that to rioting Mexican housewives who have seen tortilla prices go through the roof. Remember an increase of 10 cents per pound can have a huge impact on someone living in poverty in the developing world. It may not matter to joe sixpack in the US, who should probably drop a few pounds anyway. But to a large part of the world that increase does matter.

(I guess the problem to a large extent is that we have Sunilsixpack and Xaiosixpack competing with Joe for hamburgers, but that's another point.)