I am currently on a week of vacation to celebrate family and friends, and will not have an active daily recap until Monday, July 7th. But I wanted to touch base from North Carolina on some of the recent movement in energy.
The main headlines this week are so far related to oil. The price is exploring further record territory by hitting $143.67 on Monday and may pass that soon due to a bullish medium term oil outlook report by the IEA today. Their latest report, which comes out each July, lowered their projections of demand growth over the next five years from 2.2% to 1.6% per year. But this demand destruction from higher prices was matched by a downward revision in projected supply, especially due to project slippage for major new oil production projects by 12-15 months as costs have recently doubled, especially hindering supply in Russia. They predict continued tightness in the oil market over the next five years, supporting record prices remaining. OPEC spare capacity is expected to roughly double by 2010 before falling to “negligible” levels by 2013. Such a scenario seems to support a continued climb for oil prices and raises the importance of our sustainable energy transition to keep these rising energy costs from crippling our economy.
And again, oil is not the only fossil energy rising to records. Coal traded internationally shot up last week by 5.8-10.9% at major ports in South Africa, Australia and Europe. The price in Europe broke $200 per ton for the first time ever. As oil and natural gas rise, there appears to be little chance that coal will not stay at current records or even rise further.
At my graduate alma mater, Princeton, many alumni stepped up to support innovative research in the energy field. The Barron Family (of alumnus Thomas Barron Class of 1974) contributed $4.5 million to the Princeton Environmental Institute to endow a professorship and a student prize celebrating commitment to environmental leadership in any field, Class of 1989 Paul Maeder and his wife gave $1 million to fund risk-taking faculty research in the energy field, Class of 1989 Dwight Anderson gave to support a tenured faculty position in energy and the environment, and Class of 1952 Gerry Andlinger gave $100 million to establish a center for energy and the environment within the School of Engineering and Applied Sciences. I’m excited to see what progress Princeton scholars can make toward the sustainable energy transition ahead and hope on-campus energy policies will continue to move forward toward becoming a national model as well (as Princeton SURGE, Greening Princeton, and other groups aim to support).
Again, I’ll be out most of the week but will be back in touch regularly next week as we figure out the best steps for people and institutions worldwide to transform our dependence on oil and other greenhouse gas-emitting fossil energies to an efficient utilization of renewables.