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Wednesday, February 10, 2010 8:15 AM EST
Why Obama has fallen from grace
There are many factors associated with Barack Obama’s plunging popularity. Botched health care reform certainly hasn’t helped. Neither has a near-double-digit national jobless rate, nor a $1.6-trillion budget deficit. But what outrages American voters most is the billions of dollars given to Wall Street investment bankers, who continue to live la dolce vita and flaunt their arrogance in taxpayers’ faces.
As I’ve argued before in this blog and in chapter 7 of my book, it wasn’t too-big-to-fail financial institutions but the interest rate shock from soaring oil prices that deep-sixed the economies of both the US and the rest of the oil-guzzling world. Interest rates didn’t just rise from around one per cent to almost six per cent because no one was minding the store at the Federal Reserve Board. It was soaring oil prices that did all that heavy lifting.
Thursday, February 4, 2010 4:46 PM EST
Why can't we build coal plants, too?
Don’t confuse North American voter skepticism about the recent farce in Copenhagen with indifference to environmental issues.
Photo ops for local schmoes trying to make it big on a world stage don’t abate a single ton of carbon going out into the atmosphere, and neither does anything else coming out of that environmental summit.
Nor could it, really, when over half the participants, including the most egregious carbon emitter of them all—China—didn’t even want to be there. With energy consumption per capita at a tenth of ours, the only thing that interests countries like China is emitting a whole lot more. That country may lead the world in clean wind power, but it also has more coal plants spewing emissions than the U.S., UK and Japan combined.
Monday, February 1, 2010 10:36 AM EST
The electric car: Turn out the lights
Will technology leapfrog depletion and save drivers from the cost of triple-digit oil? Every auto producer in the world has an electric car in the works; General Motors, of course, will start producing its Volt later this year. But in actuality, the car of the future is really a throwback to the past.
In 1899, an electric car was clocked going over 60 miles an hour. And a little over a decade later, a Detroit Electric managed to travel 211 miles on a single charge (by comparison, General Motors’ Volt will go just 40 miles on a single charge before its back-up gasoline engine kicks in.)
In an ironic twist of fate, it was the invention of the electric starter that all but killed the electric car, since you no longer needed the physique of a weightlifter to crank-start your internal combustion engine.
Tuesday, February 2, 2010 10:43 AM EST
Why the U.S. needs all the tar sands oil it can get
Governor Arnold Schwarzenegger and his Midwestern colleagues had better think twice before banning carbon-dirty fuels such as the oil made from Canadian tar sands. If they don’t like the fuel Canada has to offer, their only other choice is to get off the road entirely.
Like it or not, synthetic oil from Alberta’s tar sands is going to figure ever larger at American fuel pumps in the future (provided that it isn’t siphoned off to China by a pipeline to the west coast first).
American oil demand may be diminishing as more and more drivers take the exit lane, but available supply is shrinking even faster. Domestic production, formerly 10 million barrels per day, is already down by half. The longer the U.S. economy has run on oil, the more dependent it has become on energy imports. Only finding those imports is becoming more challenging all the time.
Tuesday, January 19, 2010 11:05 AM EST
A massive public investment in obsolescence
As North American taxpayers take a look at the gleaming new models on display at Detroit’s auto show this week, they might well ask themselves just why they poured billions of dollars into saving GM and Chrysler when no one else would.
Politicians, local car dealers, parts suppliers and the auto workers’ unions told them it was to protect strategically vital jobs in their economies. But far from being essential to our economic future, those jobs are rapidly becoming obsolete—at least in this part of the world, where they are being funded by taxpayers’ money.
With GM car sales in China up over 60 per cent this year and North American sales still down from last year, I know what I’d be doing if I were running the company. I’d take the bailout money given by the taxpayers of countries with shrinking auto markets, like the U.S. and Canada, and use it to build new car plants in China and other countries where car sales are booming. (GM already sells almost as many cars in China as it does in the US.)
But I’m sure the company promised not to do that.
Tuesday, January 19, 2010 11:05 AM EST
Why energy efficiency means higher consumption
Buddy, my furnace repairman, tells me it’s time to buy a new furnace. And I’d better act quickly if I still want to order the old mid-efficiency model. In the New Year, I have to buy a high-efficiency one, which, of course, costs twice as much.
Welcome to the brave new world of energy scarcity—it’s not only smaller, but also more costly. As energy prices continue to climb, you can expect to pay more, not less, for all the new energy-efficient cars and devices for your home.
But don’t count on actually saving any energy.
Friday, January 8, 2010 10:28 AM EST
How much longer will our Chinese food be delivered?
If you think you’re eating local now, you haven’t tasted anything yet.
Food and energy are intertwined at many levels, not the least of which starts right at the production stage. Behind the green facade of the farm gate lies one of the most energy-intensive industries in the world. From fertilizer to farm machinery, most modern agriculture is really about making hydrocarbons edible.
Tuesday, January 19, 2010 11:05 AM EST
Just how big a mortgage can you carry?
When money is free, it’s hard not to borrow it, even if the lender keeps warning you to be vigilant against debt. That’s exactly what Bank of Canada Governor Mark Carney has been telling Canadians while at the same time keeping their cost of borrowing as low as it’s ever been.
The obvious question, of course, is, if caution is warranted in borrowing, why is the cost of money so cheap? Since no one wants to pay more for their loans, particularly mortgage-holders, it’s a question no one bothers to ask Governor Carney.
But ask you should. Because the Bank of Canada’s free-money policy may lead you to places you’d rather not go.
Tuesday, January 19, 2010 11:05 AM EST
Why you won't want to rely on OPEC down the road
This is what you won’t be reading from the official press release following next week’s OPEC meeting in Angola.
Member states are guzzling tons of their own oil and have less and less stuff to export to you. Fortunately, since oil prices CL-FT are almost four times higher than they were a decade ago, those states can afford to export less because they get that much more for every barrel they do.
It’s a nice model if you’re Hugo Chavez. Not so nice if you’re a North American motorist.
Thursday, December 10, 2009 1:41 PM EST
Will tumbling natural gas prices fell oil as well?
With the price of gas now trading at a record low — one third that of oil (per unit of energy) — its hold over the price of its hydrocarbon cousin should be its strongest ever. Yet oil prices have not only resisted gas’ gravitational pull but have moved in the opposite direction over most of the year.
And with good reason.
To be sure, there is room for substitution between the two fuels. When natural gas NG-FTis cheap relative to oil, it encourages petrochemical producers to switch from crude to natural gas feedstocks. And it encourages households to switch from burning oil to burning natural gas to heat their homes. Cheap natural gas also encourages utility companies to switch from generating oil-fired electrical power to natural gas-fired power.
But what it doesn’t do is encourage operators of cars, planes, trucks, railways and ships to switch from oil CL-FTto natural gas. Not that they wouldn’t want to do it at today’s prices if they could, but unfortunately natural gas can’t be used as a transport fuel. And over 60 per cent of all the oil burnt in the world is used precisely for this purpose. On top of that, almost 90 per cent of the growth in world oil demand every year comes not from the need for home heating oil or for chemical feedstocks, but from demand for gasoline, diesel or jet fuel, for which there is no substitute.