The EIA just released its monthly estimate of US oil consumption for August and the number is encouraging. Our peak monthly demand was hit in August 2005 at almost 21.7 million barrels per day (Mbd). By this past August, demand had slid 11% to ~19.3 Mbd. The last time demand was this low was 1997, and it is only Continue reading →
Pump prices for gasoline across the country fell another four cents this morning to average $2.589 per gallon. Current trends are poised to bring prices to $2.50 by election day. This shift has huge implications for US consumers, since we spend over half a billion dollars less every day than at the peak price of $4.11 in early July ($1.50/gallon*42 gallons*9 million barrels/day). Hopefully these savings can help get Americans’ finances in order to pay our debts down and get us out of the recession. The price may fall another 20 cents, but I see a medium-term floor for prices ~$2.30-$2.50 due to the difficulty to grow oil production at today’s price below $70 per barrel. And the glimpse of a draft IEA report had some sobering insight into long-term oil production. Continue reading →
It was just last week when I shared the great news of another record year for US wind power in 2008. The ~7 GW projected to come online this year is a huge feat all of us climate activists should celebrate. But the wind industry is not immune to the financial seizure gripping global markets. A leading US wind developer, Florida Power & Light (FPL), has given a first glimpse of the impact on wind’s growth for 2009. In the company’s third quarter report, FPL announced a 25% cut in 2009 capacity growth from their previous forecast. They now plan to install 1.1 GW of wind turbines (rather than 1.4 GW), ~15% lower than this year’s 1.3 GW projection. Assuming all wind developers will follow FPL and also cut their additions by 15%, US wind capacity will grow by Continue reading →
Today, Greenpeace International and the European Renewable Energy Council released “Energy [r]evolution: A Sustainable Energy World Outlook.” It is a followup to their early 2007 report that urged policymakers to ramp up efficiency and renewable energy deployment to stop climate change. This report has more detail, as it breaks down the energy portfolios of each region of the world. It also gives updates on the tremendous growth of renewables in 2007 and adds sections connecting its scenario to greater energy security in the developing context of higher fossil fuel prices. The report makes the case that their strategy would not only mitigate climate change and improve air quality, but it would also save consumers Continue reading →
OPEC took the middle road, cutting their oil production a hefty 1.5 million barrels per day (almost 5%). The cut was enough to have an impact in slowing oil’s price decline, but not so much it would considerably damage already flailing economies worldwide. In the short-term, their production cut was drowned by a dramatic fall in global stocks that has sent the Dow to the low 8,000s again.
Tomorrow in Vienna, OPEC will decide how much to cut their oil production in order to stop the rapid price fall since early July. OPEC produces almost 40% of the world’s oil and, more importantly, exports more than half of global trade in petroleum. Saudi Arabia largely holds the reins, since they produce and export more than twice the second largest OPEC player, Iran. Iran, Venezuela and Nigeria are estimated to need oil above $80 per barrel to provide enough revenue for their current natural budgets. While other members such as Saudi Arabia and Kuwait are thought to make ample revenue with prices as low as $55. OPEC remembers the collapse in oil’s price to below $10 after the 1998 Asian Financial Crisis and is determined to prevent a repeat performance during our current financial crisis. So, they are probably debating a cut between Continue reading →
As I mentioned in a mid-August blog, the American Wind Energy Association (AWEA) projects capacity growth in 2008 to surpass the dramatic record set in 2007. It’s nice to see AWEA’s third quarter report released today reaffirm this prediction even after September’s financial collapse. AWEA reports 1.4 GW installed throughout the US during the third quarter, making the year-to-date additions sum to Continue reading →
Mexico just reported that their production continued to rapidly decline in September. Cantarell production was 36% below a year ago at only 940,000 barrels per day, and total crude production was down 14% from last year at only 2.722 million barrels per day (Mbd). This was the lowest level since 2.55 Mbd in November 1995. Exports were down 37% from last year. The slide in production could finally be felt by PeMex and its home country since oil prices were back down toward year-ago levels. This lower production will seriously rock the federal budget of Mexico in the months to come — especially due to exports declining faster than production declines as domestic demand rises. Some Mexico production was shut-in over the Continue reading →