'Irrefutable Business Case' For Green Cars - Head Of General Motors Warns Of Coming Oil Scarcity

"The head of GM, Rick Wagoner, says there is 'now an irrefutable business case' for producing green cars. Mr Wagoner told the BBC that in future, all cars would have to be flexible enough to run on biofuels, hydrogen derived from electric power, or batteries which plugged into the electricity power grid. He warned that with the growth of demand for cars soaring in developing countries, it would not be long before the world ran out of petrol - at least at a price that car drivers could afford."
GM betting on a greener future
BBC Online, 8 January 2007

"The fact is that, despite all the public ballyhoo about global warming, both governments and private businesses, have been drastically reducing their investment in energy research over the past 20 years. The US Federal Government, for example, has halved its energy research and development spending and now spends $5 billion a year on energy research and development. The rest of the world’s governments between them spend about the same amount. This is one-fourteenth of the US Government’s military research spending and one sixth of its spending on medical R&D. The disparity is even greater in the private sector. Power generation companies on average spend just 0.5 per cent of turnover on R&D, compared with 3 per cent in the motor industry, 8 per cent in electronics and 15 per cent in pharmaceuticals. The British Government has proudly announced the creation of a new Energy Technology Institute, funded with £50 million a year of public money, but this is a tiny figure, given the importance of global warming and the vastly greater amounts spent by both public and private sectors in other fields of research. What these disparities suggest is a monumental case of market failure: markets are simply not sending the right price signals to motivate economic activity, investment and innovation in energy technology on the scale now required. The reasons for this market failure were presented in the Stern report: very long lead times in power generation projects; the collapse of oil prices in the mid-1980s; and the fickleness of political fashions on nuclear power. But whatever the causes of these market failures the implication is clear. Research, development and deployment of new non-polluting energy sources require and deserve far greater levels of public support."
Give us non-polluting energy — starting now
London Times, 23 November 2006

Skrebowskimegaprojects.gif (16149 bytes)

Graph Of Petroleum Review's 2006 Oil 'Megaprojects' Analysis With Peak Production In 2010
After Allowing For All Planned Major Oil Development Projects
Click Here To Download Pdf File Of This Analysis

"'We have 1,500 days until peak and tomorrow we’ll have one day less,' Chris Skrebowski, the editor of Petroleum Review, told the ASPO-5 crowd today. Skrebowski’s projections, which focus on oil flows instead of reserves, has the world peaking at between 92 and 94 million barrels per day. Unfortunately, he said, 'collectively we’re still in denial.'
It’s a tricky job to work up reliable projections, Skrebowski explained. 'Decoding IEA statistics is like decoding the Da Vinci code.' Complicating the matter is the overwhelming tendency among industry and government officials to propagate optimistic scenarios. 'We’ve deceived ourselves, albeit with good intentions, but with disastrous results.' The key he said is to examine what oil producers 'are doing, not what the chairmen and CEOs are saying.' Skrebowski said the idea of peak oil is straightforward: 'It’s real, it’s imminent and it’s going to be unpleasant.' Known for his detailed 'Megaprojects' report that looks at new oil fields coming on line, Skrebowski emphasized the importance of focusing on oil 'flows' rather than underground stocks or reserves. 'If you go down to fill up your car and were told to come back six hours later--or a month later--you get a sense for the problem. Reserves are only important when we can turn them into flows. Otherwise they are just an academic concept. The fact that huge amounts can be produced over time doesn’t mean it can meet the flow needs today.' Skrebowski joins a growing group that sees the peak occurring earlier than later. 'It can’t be far off,' he said. And the consequences couldn’t be more profound. 'We’ve built are entire society around oil. Everything depends on cheap and plentiful oil. We will have to change everything we do.'"
Day 1: Chris Skrebowski Sees the Peak in 1,500 Days
ASPO-5 Live, 18 July 2006

Petroleum Review Forecasts Global Oil Flows Increasing To 2010
So Is This A Time To Relax? Or A Time To Prepare?

"ECB [European Central Bank] President Jean-Claude Trichet said on Sunday there were risks of an inflationary spiral resulting from higher energy prices. 'We have a risk of second-round effects with the increases in oil (prices) that we have seen, pump prices,' he told France's LCI television. 'There is a risk of starting an inflationary spiral. There are non-negligible risks of seeing past increases come in progressively. They have not all come out of the pipeline,' he said."
ECB's Trichet sees risk of inflation spiral
Reuters, 28 January 2007

"The odd weather has created some unusual conditions in the oil market. For the past few years, the main worries for big producers have been security problems in the Middle East and Africa, and economic populism in Latin America. Despite these continuing pressures, oil prices plunged last week, dropping to $54.90 a barrel in intraday trading on Friday January 5th, the lowest price for over 18 months, though after the weekend prices rebounded a little on world markets. The best explanation seems to be the warm weather in both Europe and America’s north-east, the world’s largest market for home heating oil. Inventories are piling up, pushing down crude prices. Even if winter makes a belated appearance, the higher stocks will cushion upward price pressure, as well as the sort of supply shocks of recent years that have sent prices soaring. American demand may be depressed for another reason: several years of high oil prices are finally sinking into the country’s consciousness. Sales of fuel-thirsty SUVs are suffering, while hybrids and smaller cars have grown more popular. There is evidence that consumers and governments are pushing for conservation of heating oil too, with more efficient furnaces and higher standards required for home insulation. But demand is not the only side of the equation. Security problems for the big producers could send prices rising sharply again. And even if there are no big disruptions in Africa or the Middle East, OPEC will surely act if prices drop too low. The oil cartel’s public pronouncements have grown increasingly hawkish since prices peaked at over $78 in July and it has cut quotas since then.... The other unknown variable is the performance of the global economy in the coming year. Lower oil prices would improve matters—but if the economy strengthens, demand for oil will probably pick up. After this weekend, energy economists might have trouble judging which way the wind is blowing in the oil markets."
Keeping out of the cold
The Economist, 8 January 2007

"While oil companies reaped gargantuan profits in 2006 amid high prices, U.S. demand for petroleum dipped last year to below 2004 levels, a trade group said Friday.Total U.S. petroleum deliveries, a measure of demand, fell by roughly 1 percent to 20.6 million barrels per day, according to a report by the American Petroleum Institute. That’s down from 20.8 million barrels a day in 2005 and below the 2004 level of 20.7 million barrels a day. The group said the figures are preliminary and may be adjusted. The analysis was released one day after the Paris-based International Energy Agency estimated that oil demand in the world’s industrialized countries declined by 0.6 percent in 2006. Global demand rose in 2006 due to the strength of consumption in China and the Middle East, but the world’s appetite has grown at a slower pace for two straight years."
U.S. oil demand dropped slightly in 2006
Associated Press, 19 January 2007

"Will oil drop to $40? Or go back to $70? Or $80? There are no easy answers to this question, but let's see if we can frame some of the issues. First, demand is going to increase over time as an energy-hungry developing world needs more and more energy. Take a look at this chart from the Bank Credit Analyst showing the percentage of global oil consumption that comes from China and India. It is going from the lower left to the upper right, and only slowed down during the slowdown in global growth around 2001... Crude prices closed today at roughly $53, down considerably from the $77 of recent memory. Prices are down 10% over the last month. Why? Inventories are high and the northern hemisphere is having an unusually warm winter.... excess capacity is on target to rise to 4 million barrels a day in 2008, even with solid growth of 1.8% in world demand. There is a lot of new production coming online.... sometime next decade demand may indeed start to bump up against supply, but the price of oil today is as much political as it is supply and demand.... there is no 'normal' price for oil. It is still what a few men with willpower sitting around a table decide it is. Ultimately, OPEC will lose that power, as world demand grows past supply, but that is not this decade. At that point, the market will set price."
Should Oil Be $40 or $70?
GoldSeek.com, 15 January 2007

"For too long our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists -- who could cause huge disruptions of oil shipments, and raise the price of oil, and do great harm to our economy. It's in our vital interest to diversify America's energy supply -- the way forward is through technology. We must continue changing the way America generates electric power, by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power. We need to press on with battery research for plug-in and hybrid vehicles, and expand the use of clean diesel vehicles and biodiesel fuel. We must continue investing in new methods of producing ethanol using everything from wood chips to grasses, to agricultural wastes. We made a lot of progress, thanks to good policies here in Washington and the strong response of the market. And now even more dramatic advances are within reach. Tonight, I ask Congress to join me in pursuing a great goal. Let us build on the work we've done and reduce gasoline usage in the United States by 20 percent in the next 10 years. When we do that we will have cut our total imports by the equivalent of three-quarters of all the oil we now import from the Middle East. To reach this goal, we must increase the supply of alternative fuels, by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target. At the same time, we need to reform and modernize fuel economy standards for cars the way we did for light trucks -- and conserve up to 8.5 billion more gallons of gasoline by 2017."
President Bush: State of the Union Address
BBC Online, 23 January 2007

".... the United States has fallen down a very deep well, and it’s hard to get out. Last year, the United States imported 60 percent of the oil it consumed. If, as Mr. Bush proposes, we cut gasoline consumption 20 percent by 2017 — about 2.1 million barrels a day — then the share of oil imported will fall only by 4 or 5 percentage points..... Mr. Bush is also proposing an increase in fuel-economy standards and an increase in the production of ethanol and other gasoline substitutes, hoping to keep oil consumption relatively steady. Without such intervention, oil consumption is forecast to rise to just over 23 million barrels a day in 2017, from nearly 21 million barrels a day today. 'It’s an enormous challenge,' said John Felmy, the chief economist of the American Petroleum Institute, the industry’s main trade association. Production of ethanol from corn has already put pressure on food prices, according to some agriculture experts, but Mr. Bush’s plan involves tripling the production of corn ethanol, and making huge amounts of ethanol from cellulose, which is not now done commercially. Integrating that much ethanol into the fuel supply will involve many more rail-tanker cars or trucks, because ethanol cannot be shipped in conventional pipelines. In addition, the gasoline formula with which it is mixed has to be changed, or the mixture evaporates too easily, causing air pollution. The actual amount of ethanol produced will depend on what is technically feasible and on the price of oil. But at the rate of change suggested by the Bush plan, energy independence is about a century away."
The Long Road to Energy Independence
New York Times, 28 January 2007

"President Bush's hope to replace up to 15 percent of the gasoline Americans use with ethanol made from wood chips, cornstalks, grass, straw and the like will require scientific, technical and economic breakthroughs. Government and private laboratories are experimenting with techniques to extract ethanol more easily from plant materials composed of tough cellulose fibers, such as switch grass, but for now Bush's ambitions are far from reality. 'The private sector continues to work furiously, both on their own and in partnership with government,' said John Mizroch, an official in the Department of Energy's Office of Renewable Energy. 'But there have been no major breakthroughs.'.... [Bush has] pledged to increase the supply of renewable fuels to 35 billion gallons by 2017, five times more than is expected this year. Part of that increase would be ethanol made from cellulose.....Despite Bush's endorsement, there are more problems with so-called cellulosic ethanol than with corn-based ethanol.... However, the nation is bumping up against the limit of how much corn it can afford to use for fuel without driving up prices for meat, grain and sweeteners. Farmland best suited for corn-growing is limited and far from huge population centers, requiring expensive transport for ethanol. The fuel is too corrosive for pipelines, so it must be carried by truck or rail. Cellulose ethanol refineries could be closer to users. 'Absolutely, cellulose technology will be necessary to move beyond the limits of grain-based ethanol,' Dinneen said. To reach Bush's goal, more ethanol will have to come from cellulose than from corn, according to Mizroch. 'It will have to be 2-to-1 cellular,' Mizroch said. Unfortunately, making ethanol from cellulose is complex and costly. Corn-based ethanol is much easier... Mizroch said the Energy Department expected that the first full-scale commercial cellulosic ethanol plant would be producing 15 million gallons of fuel a year by 2012."
Bush's energy hope relies on major scientific breakthroughs
McClatchy Newspapers, 24 January 2007

"... you just got to recognize there are limits to how much corn can be used for ethanol. After all, we got to eat some. "
George W Bush
Whitehouse Press Release, 25 April 2006

'Starving the People To Feed the Cars'
Washington Post, 10 September 2006

[Extracts]

"High oil prices are much more than just a drain on drivers' pocketbooks or a sign of tough economic times ahead; they could also prove to be a leading indicator of the unraveling of our global civilization.That may sound unlikely, or melodramatic.

But consider this: Now, almost everything we eat can be converted into automotive fuel. And once the price of oil surpassed $60 a barrel last year, the business of transforming wheat, corn, soybeans and sugarcane into fuel for cars instead of food for people became hugely profitable. As crops that have long sustained us are diverted to provide fuel, we may encounter the same fate that brought down great civilizations of the past. Plans for new ethanol distilleries and biodiesel refineries are announced almost daily, setting the stage for an epic competition. In a narrow sense, it is one between the world's supermarkets and its service stations. More broadly, it is a battle between the world's 800 million automobile owners, who want to maintain their mobility, and the world's 2 billion poorest people, who simply want to survive. Whenever the food value of a crop drops below its fuel value, the market will convert it into fuel. Ultimately, this dynamic risks driving up world food prices, destabilizing governments in low-income nations and disrupting global economic growth....

The price of oil has more than tripled over the past four years, jumping from $20 to nearly $70 a barrel. Mainstream analysts talk about prices rising to $100 a barrel or more if major disruptions in supply occur -- such as the explosion of violence and chaos in the oil-rich Middle East. And even though the discovery of oil reserves last week beneath the Gulf of Mexico was hailed as a boost for the U.S. oil industry, it will only temporarily delay the ongoing depletion. The real news is that so few such discoveries are made.

These runaway oil prices are now driving biofuel production, once spurred mainly by government subsidies. Brazil, the world's largest exporter of sugar, converts half of its crop into ethanol for cars, contributing to a doubling of the world sugar price over the past two years. In Europe, where rapeseed is grown for both biodiesel and cooking, margarine manufacturers have asked the European Parliament for protection from the heavily subsidized biodiesel refineries.....

In some Corn Belt states, ethanol distilleries are taking over the corn supply. In Iowa, a staggering 55 ethanol plants are already operating or are planned. Iowa State University economist Bob Wisner observes that if all these plants are completed, they would use virtually the entire Iowa corn harvest.

With so many distilleries being built, livestock producers fear there may not be enough corn to feed animals, possibly leading to shortages in milk, eggs, beef, pork and poultry. And because the United States supplies 70 percent of world corn exports, importing countries -- such as Egypt, Japan and Mexico -- should be worried, too.....

Yet, no one in the United States or internationally is monitoring the escalating diversion of grain to fuel distilleries to ensure that it will not disrupt food supplies. Instead, a market free-for-all dominates, with commodities going to the highest bidder.

All of this is unfolding as the world's farmers are trying to feed 76 million additional people each year. In six of the past seven years, world grain consumption has exceeded production. As a result, the reserve of public and private grain stocks that we rely on as a carryover from harvest to harvest has fallen to the lowest level in 34 years.

There are alternatives to this food-based fuels scenario. The equivalent of a 3 percent gain in U.S. automotive fuel supplies from ethanol could be achieved several times over -- and at a fraction of the cost -- simply by raising automobile fuel-efficiency standards by 20 percent. We can also shift to highly efficient gas-electric hybrid plug-in vehicles. And if we invest in wind farms, feeding cheap electricity into the grid, cars could run primarily on wind energy, and at the gasoline equivalent of less than $1 a gallon.

Like earlier civilizations, we face a choice....."

".... the sudden rush to corn-based ethanol, which some liken to a new gold rush, is causing jitters among environmentalists at national and local level. Friends of the Earth US reckons that at best ethanol reduces emissions of global warming gasses by 13% compared with petrol, and if production plants use coal to heat the corn in the process of extracting its sugars, as many now do, there is no net benefit ..... Another anxiety is that continuous corn crops are more susceptible to weeds and diseases such as western bean cutworms, a moth caterpillar that attacks the ears of the plant. To control them farmers will have to use more pesticides or turn to genetically modified strains that are insect resistant."
The new gold rush: how farmers are set to fuel America's future
Guardian, 26 January 2006

"A. David Pimentel, a professor at Cornell University, published a paper in 2005 with Tad W. Patzek of the University of California, Berkeley stating that the corn-to-ethanol process powered by fossil fuels consumes 29 percent more energy than it produces. The results for switchgrass were even worse, the paper said, with a 50 percent net energy deficit. 'I’m sympathetic, and I wish that ethanol production was a net positive and a help to this nation,' Dr. Pimentel said in an interview. 'But I’m a scientist first and an agriculturalist second. I don’t think the U.S. will meet its goals with biofuels.' He also said the United States did not have enough agricultural land to displace gasoline with biofuels. 'Even if we committed 100 percent of the corn crop to making ethanol, it would only replace 7 percent of U.S. vehicle fossil fuel use,' he said. Others are far more sanguine. Arthur J. Ragauskas, a professor at the Georgia Institute of Technology and the co-author of a positive study about ethanol that appeared in the journal Science in January, said the nation could replace a third of its current fuel demands by focusing on cellulosic ethanol from forest products and agricultural residue. Mr. Slunecka of the Ethanol Promotion and Information Council said that Dr. Pimentel’s calculations did not account for the increasing efficiency of ethanol plants and rising yields of corn per acre."
Solution or Distraction? An Ethanol Reality Check
New York Times, 14 May 2006

"The difficulty is that plants do not collect very much solar energy. On average, plants collect one-tenth of one percent of the solar energy available. Photovoltaic solar cells collect at least 10 percent, which means 100 times the energy collected by plants..... Eighteen percent of all corn is going into ethanol production. We're getting 4.5 million gallons of ethanol. That's 1 percent of U.S. petroleum use. It's 1 percent. If we use 100 percent of U.S. corn, and we won't do that, but if we used 100 percent, what would that do for us? Six percent."
Biofuel Skeptic Extraordinaire - An interview with David Pimentel
Grist, 8 December 2006

"Shortages of suitable nationally grown crops could slow European moves to replace contaminating transport fuel with clean-burning, plant-based alternatives, industry sources said at a conference on Wednesday. About half the EU's members have already adopted the European Commission target of replacing 5.75 percent of transport fuel with biofuel alternatives by 2010. In many countries regular gasoline and diesel are already being blended at up to 5 percent with bioethanol and biodiesel respectively to reduce carbon dioxide emissions. Ludz Wilkening, managing director of German alcohol producer KWST KG said the 5 percent ceiling was roughly what available cropland could support now. 'We have nearly reached maximum production of rapeseed now. After that we have to import, but that is not the idea of officials,' he told a World Biofuels conference in the southern Spanish city of Seville. Existing subsidies for farmers to grow wheat on set-aside land should help provide grain for ethanol, but biodiesel ideally needs to be made mainly from rapeseed oil. 'Although it might be nice to see the whole of Europe covered with yellow flowers, it will be tough to grow much more oilseed than we are growing today,' said Jacques Blondy, head of refining and marketing and agricultural development at French oil major Total. 'We cannot achieve such ambitious goals without having other feedstocks. Probably we'll need to import some of those feedstocks.' "
Crop Shortages Could Curb European Biofuel Growth
Reuters, 11 May 2006

"China cannot afford to embark on industrial production of grain-derived biofuels because supplies of corn and other crops are needed to feed the country's 1.3 billion people. 'It would be a disaster for us if we depend on a huge amount of corn and other grains for energy,' said Zhai Huqu, president of the Chinese Academy of Agricultural Sciences, in comments quoted by the official China Daily. China, which relies mostly on polluting energy sources like coal, has set a goal of producing about six million tons of cleaner-burning substitutes such as ethanol, which is derived from corn, by 2010 and 15 million tons by 2020. But with prices of corn and other grains soaring as demand rises in China and arable land increasingly being swamped by development, top officials cast doubt on such goals. Vice Finance Minister Zhu Zhigang said biofuels should only be produced once the supply of grain exceeded demand, the newspaper reported. 'The government will impose strict controls on any biofuel project using grain as the raw material,' Zhu said."
Biofuels seen as a luxury China cannot afford
Agence France Presse, 12 December 2006

"... worried over surging crop prices China is now clamping down on the use of corn and other edible grains for producing biofuel. While it wants to support the growth of alternative energy sources, Beijing says the issue of national food security should take precedence over the country's green agenda.... surging demand for biofuel is now partly blamed for recent price hikes in the food market and for shortages in grain stocks. Wheat prices are at their highest level in a decade, due to poor harvests in key producing countries like the United States and Australia, while corn prices have surged by up to 20 percent in local markets.... As biofuel is produced from renewable biological resources, what government officials worry is that possible overcapacity may lead to a shortage of edible grains and feedstock supplies. This has already happened with cornstalk used in ethanol production. Cornstalk prices in China have jumped 500 percent to 30 US dollars per tonne since 2005. The same is now happening with the corn... Experts warn that if ethanol production continues to be corn-based, China will be forced to import the crop by 2008. Relying on crop imports is a sensitive issue as the government policy supports food self-sufficiency for the sake of national security."
Biofuels Eating Into Food Grain Stocks
Inter Press Service, 20 December 2006

The Clock Is Ticking
Gambling On If And When Cellulosic Ethanol Might Be Available

"The International Energy Agency's (IEA) World Energy Outlook (WEO) 2006... projected that biofuels were set to play an increasing role in road transport, providing up to 7% of the total consumption in 2030. To meet this demand, the IEA envisaged that the total amount of arable land required would be equivalent to at least the combined size of France and Spain.... But the WEO warned that the growing demand for food would limit the potential of the plant-derived fuel produced using current technologies. Yet the emergence of new 'second generation' technologies, which allow more of a plant's material to be turned into fuel, could allow biofuels to play a much bigger role in either of the projections outlined in the report's two scenarios, it said."
World risks 'dirty' energy future
BBC News, 7 November 2006

"Already many EU states are blending biofuels (mainly bioethanol and biodiesel) into conventional road transport fuels, although usually at low blend levels (ie only a few percent). These ‘first generation’ biofuels go some way to extend the oil-based fuels and to cut CO2 emissions, but their scope is limited in most cases by cost, availability and/or conversion efficiency. Biofuels grown in Europe do not currently save a very high proportion of CO2 emissions in most cases, and the quantities that can be produced are limited by availability of land. Imports are also available from a range of different sources outside Europe, butsome of these come from sources that are not sustainable (eg soy plantations on land cleared from rainforest).....'Second generation processes offer the prospect of using a wider range of feedstocks including woody (lignocellulosic) materials. This could entail using most or all of the source plants (eg wood and straw as well as seeds, nuts or pulses) and a wider range of waste materials (eg forestry waste, biodegradeable municipal solid waste). As well as more efficient utilisation of resources, these processes tend to be more efficient in energy terms, and for these reasons it is expected that they will typically offer greater CO2 savings atlower unit costs. The rate at which such fuels become available over the coming decades is subject to significant uncertainty...."
OVER A BARREL
Institute for European Environmental Policy, January 2007

"Karen Matusic, a spokeswoman for the American Petroleum Institute, an industry trade group, said in order to boost ethanol production to 35 billion gallons, 'We'd have to get behind something besides corn-based ethanol.' The most logical choice is the much-talked-about cellulosic ethanol, in which energy is squeezed from corn stalks, wood chips and other plant matter. But for now there are no commercial plants producing cellulosic ethanol, she said. To break down the hard cellulose in plants to get to material that can be converted to sugars requires a process that no one has been able to make economically feasible. As to when breakthroughs could occur, Matusic said: 'No one knows. Some say it would happen in a few years, others say it's decades away.' But Matt Hartwig, a spokesman for the Renewable Fuels Association, said a breakthrough to make cellulosic ethanol is likely to occur 'sooner than most people predict. There isn't an ethanol producer that we represent who isn't working on bringing that technology to a commercial scale.'"
Opinions mixed on Bush mandate for greater use of biofuels
San Antonio Express-News, 25 January 2007

"George Clooney says his new drama, 'Syriana,' could prove to be an example of Hollywood at its consciousness-raising best.... It has many interconnected story lines stemming from what 'Syriana' director-writer Stephen Gaghan says is the West's addiction to cheap foreign oil. The film is based loosely on 'See No Evil,' a memoir written by former CIA agent Robert Baer. Clooney plays Bob Barnes, a veteran CIA operative working out of the Middle East who suddenly gets fired. The underlying role of oil as the source of many world issues is 'certainly a discussion worth having,' Clooney tells Smith. 'It's worth talking about the issues. … At some point, we're going to have to address some of our involvement in all of this.'"
'Syriana,' Oil And The CIA
CBS News, 9 December 2005
(To find out what Clooney is doing himself about this, read the rest of this section)

Ethanol (Like Hydrogen) Requires Major New Distribution Infrastructure
Electric Vehicles By Contrast Use Existing Distribution Infrastructure - Just 'Fill Up' At Home From Your Existing Socket
So How Much Money Is Going Into Solar (And Wind) As A Source Of Power For This
Where The Potential Energy And Minimised Land 'Opportunity Cost' Gains Are Far Greater Than Biofuels?
Solar Can Be Harvested In Places Where There Is No Agricultural Production (Like The Desert Or Your Roof)
With Much Less Impact On The Global Food Supply

"Integrating that much ethanol into the fuel supply will involve many more rail-tanker cars or trucks, because ethanol cannot be shipped in conventional pipelines. In addition, the gasoline formula with which it is mixed has to be changed, or the mixture evaporates too easily, causing air pollution."
The Long Road to Energy Independence
New York Times, 28 January 2007

"If the boosters of ethanol master cellulosic conversion, they will then have to find an effective way to deliver large quantities of the new fuel to the market. Like water, it is held together by the powerful bonds between hydrogen and oxygen atoms, so ethanol cannot travel through most petroleum pipelines. If ethanol encounters water in the pipes, it will absorb the water and become unusable. It also dissolves dirty petroleum gum residues on the walls of pipes and tanks. Robert Reynolds, a consultant who has studied ethanol infrastructure for the Department of Energy, says ethanol would have to make up at least 30 percent of the gasoline supply to justify the expense of making current oil pipelines fit for sharing. Right now ethanol is used mostly as a fuel additive; about one-third of the gasoline sold in the United States contains a shot of ethanol (about 10 percent, typically) to reduce automobile emissions. That has given energy companies a chance to explore the transportation difficulties. Ethanol from places like Corn Plus travels by barge or railroad to distribution terminals, then is combined with gasoline at the rack where tanker trucks load up. To receive ethanol, these tank farms may have to add new railroad spurs, storage tanks, and blending systems. It costs roughly three cents to send a gallon of gas from the Gulf Coast to New York. Transporting a gallon of ethanol by train from the Midwest costs at least 12 cents, and the shipments are vulnerable to delays on the tracks.... Even ethanol's fans concede that building up the ethanol infrastructure depends on government support, at least for now...."
Life After Oil
DISCOVER Vol. 27 No. 08 | August 2006

"When General Motors unwraps the Chevrolet Volt for the press today at the North American International Auto Show, it will be revealing much more than the latest fantasy from its styling studios. Beyond its striking coupelike lines, the Volt is also a declaration of G.M.’s intent to mass-produce a new type of hybrid-electric vehicle, one that can drive up to 40 miles on batteries alone... For a 60-mile round trip, Mr. Lutz reasoned that the Volt would get the equivalent of 150 m.p.g. over all; the first 40 miles in pure-electric mode and the last 20 miles with the gas engine sipping fuel at a rate of 50 m.p.g. as it charges the battery. G.M. engineers, who estimated the Volt’s performance using computer simulations, said charging the battery from a 30 percent level would take about a half-hour while under way and up to 6.5 hours when plugged into a standard 15-amp household outlet. Similar overall ratings of more than 100 m.p.g. are claimed by advocates of plug-in hybrids. According to CalCars.org, the Web site of the California Cars Initiative and an independent advocate of plug-ins, 30 miles of battery-only driving at the average cost of 9 cents a kilowatt-hour in the United States would cost 81 cents, compared with the average $2.40 gallon of regular gasoline required to propel a relatively miserly conventional car the same distance.... The Volt’s estimated annual fuel savings of about 500 gallons, compared with a similar size 30-m.p.g. vehicle driving 15,000 miles a year, equate to $900, even considering the cost of the electricity, said Tony Posawatz, an engineering manager in the Volt program."
All the Technology Needed for 100 M.P.G.
New York Times, 7 January 2006

The Real Challenge Is A Cheap And Pollution Free Source Of Electricity
Solar Power Is A More Efficient Converter Of Sun Energy Than Biomass

"U.S. Department of Energy (DOE) Assistant Secretary for Energy Efficiency and Renewable Energy Alexander Karsner today announced that with DOE funding, a concentrator solar cell produced by Boeing-Spectrolab has recently achieved a world-record conversion efficiency of 40.7 percent, establishing a new milestone in sunlight-to-electricity performance. This breakthrough may lead to systems with an installation cost of only $3 per watt, producing electricity at a cost of 8-10 cents per kilowatt/hour, making solar electricity a more cost-competitive and integral part of our nation’s energy mix."
New World Record Achieved in Solar Cell Technology
US Department of Energy, 5 December 2006

"What about that other long-promised alternative-energy source, solar power? Technology Pioneer Nanosys of Palo Alto, Calif., thinks solar's day in the sun has finally arrived. The firm is developing tiny photovoltaic cells that can be incorporated into the fabric of roofing materials to provide power to homes and other types of buildings. Nanosys is combining the science of solar cells with the science of nanotechnology, which manipulates items as small as an atom to do everything from switching electricity to storing data to sensing the movement of a bridge that is beginning to weaken. Thanks to this, Nanosys can already embed microscopic photovoltaic crystals into plastic sheeting. One prefabricated Nanosys roof could generate enough electricity to run all the appliances in a typical home, including the washing machine, the toaster, the PC and the entertainment center. Electricity generated during the day can be stored in batteries for use at night. A single square meter of the solar-ready plastic will cost about $100 and last about 20 years, so a complete roof would cost a few thousand dollars. Nanosys' co-founder and head of business development, Stephen Empedocles, says that's a good investment, since the tiles will generate electricity at a cost of about 4¢ per kW-h, well below the 20¢ to $1 for traditional solar panels. Empedocles doesn't expect his product to reach market until 2006. With $70 million in venture funding from Arch Ventures, Polaris and Lux Capital, along with multimillion-dollar U.S. government contracts from the Defense Advanced Research Projects Agency, the National Science Foundation and the National Institutes of Health, the 35-person company should make it. With persistence and that old variable, luck, firms like Medis, Hydrogenics and Nanosys could see a big payback for giving power to the people. The way Lifton sees it, that would be one happy song."
More Power To You
TIME, 15 December 2003

"In a paper published on the Nature Materials Web site on January 9, senior author and Professor Ted Sargent, Nortel Networks -- Canada Research Chair in Emerging Technologies at the University of Toronto's Department of Electrical and Computer Engineering, and his team report on their achievement in tailoring matter to harvest the sun's invisible, infrared rays. 'We made particles from semiconductor crystals which were exactly two, three or four nanometres in size,' Sargent said. 'The nanoparticles were so small they remained dispersed in everyday solvents just like the particles in paint,' explains Sargent. Sargent's team then tuned the tiny nanocrystals to catch light at very long wavelengths. The result is a sprayable infrared detector....Polymer-based solar photovoltaic cells are one of the most highly anticipated fields in the solar industry these days. While current technologies on the market struggle to match their crystalline counterparts in terms of price-per-watt, researchers are on the hunt. Researchers like a team from the University of Toronto that recently announced a breakthrough in capturing light energy from beyond the visible spectrum....Sargent expects their research breakthrough could see commercial implementation within 3 to 5 years.... Professor Peter Peumans of Stanford University, who has reviewed the U of T team's research, also acknowledges the groundbreaking nature of the work. 'Our calculations show that with further improvements in efficiency, combining infrared and visible photovoltaics, could allow up to 30 percent of the sun's radiant energy to be harnessed, compared to six percent in today's best plastic solar cells,' Peumans said."
Solar Photovoltaic Breakthrough Taps Infrared Light
Renewable Energy Access, 11 January 2005

"Scientists have invented a plastic solar cell that can turn the sun's power into electrical energy, even on a cloudy day. The plastic material uses nanotechnology and contains the first solar cells able to harness the sun's invisible, infrared rays. The breakthrough has led theorists to predict that plastic solar cells could one day become five times more efficient than current solar cell technology. Like paint, the composite can be sprayed onto other materials and used as portable electricity. A sweater coated in the material could power a cell phone or other wireless devices. A hydrogen-powered car painted with the film could potentially convert enough energy into electricity to continually recharge the car's battery. The researchers envision that one day 'solar farms' consisting of the plastic material could be rolled across deserts to generate enough clean energy to supply the entire planet's power needs. 'The sun that reaches the Earth's surface delivers 10,000 times more energy than we consume,' said Ted Sargent, an electrical and computer engineering professor at the University of Toronto. Sargent is one of the inventors of the new plastic material. 'If we could cover 0.1 percent of the Earth's surface with [very efficient] large-area solar cells,' he said,'we could in principle replace all of our energy habits with a source of power which is clean and renewable.'... Other possibilities include energy-saving plastic sheeting that could be unfurled onto a rooftop to supply heating needs, or solar cell window coating that could let in enough infrared light to power home appliances....Ultimately, a large amount of the sun's energy could be harnessed through 'solar farms' and used to power all our energy needs, the researchers predict. 'This could potentially displace other sources of electrical production that produce greenhouse gases, such as coal,' Sargent said.... The biggest hurdle facing solar power is cost-effectiveness. At a current cost of 25 to 50 cents per kilowatt-hour, solar power is significantly more expensive than conventional electrical power for residences. Average U.S. residential power prices are less than ten cents per kilowatt-hour, according to experts. But that could change with the new material. 'Flexible, roller-processed solar cells have the potential to turn the sun's power into a clean, green, convenient source of energy,' said John Wolfe, a nanotechnology venture capital investor at Lux Capital in New York City. "
Spray-On Solar-Power Cells Are True Breakthrough
National Geographic, 14 January 2005

"Unlike other electric cars, the Tesla has two gears: one a high-torque option to take the car from 0-60 at maximum speed, the second offering a gentler rate of acceleration, taking the car up to its top speed of 130mph. Like the Lotus, the Tesla has a carbon-fibre body, but it is heavier - 900lbs of its total weight of 2,500lbs comes from its battery, made up of 6,831 liquid-cooled, lithium ion cells of the kind used to power laptops. Tesla promises that the battery can be recharged in around three hours, gives a range of 250 miles and has a life of at least 100,000 miles, after which it can be recycled.... Eberhard says he caved in, created a waiting list for the first 100 cars, and they sold in three weeks, for $100,000 each, with delivery due early next year. 'That's $10m in the bank,' says Harrigan, watching as the crowd of onlookers at Pebble Beach admires the car. The company was set up with $40m capital, more than half of it provided by another Silicon Valley entrepreneur, Elon Musk, the man who brought the world PayPal. Google's two founders also invested, with one of them, Sergey Brin, ordering two of the cars. George Clooney has paid for one (he also owns another electric vehicle, the Tango, a sort of four-wheeled motorcycle), and a host of other celebrity and industry types, whose names are apparently far too sensitive to be mentioned aloud. 'I have one on order,' Chris Paine tells me. Although not a celebrity, Paine has made a film called Who Killed the Electric Car?, an impassioned and convincing tale of big-industry skulduggery, big-money politics and the downtrodden consumer. The film's star is the EV1, an electric car produced by General Motors to satisfy the stringent emission controls introduced by California in the late 1990s and withdrawn just a few years later. 'I would never normally buy such an expensive car,' says Paine, 'but I wanted to be part of the wave. This is resurrecting the electric car.' Back at the Pebble Beach Lodge, a crowd gathers to look at the new arrival. 'Wow,' says a woman. 'Is it Italian?'... The crowd is full of questions and enthusiasm. It surely can't be long before the traditional behemoths of motor manufacturing start to notice the upstart. 'We have the big guys sniffing around, talking about buying technology, even hinting about buying the whole company,' says Harrigan. Ford, Chrysler and Nissan have all made the visit to Tesla's base in California and expressed an interest in the company. But for now, says Harrigan, the high-performance electric car market is probably going to remain in the hands of smaller, non-traditional companies. 'If we sold 2,000 cars in our second year that would be a huge success for us,' he says. 'For [the big companies] that would be a dismal failure.'... the electric car requires very little maintenance - certainly nothing like the multibillion-dollar industry fostered by the major car manufacturers..."
Batteries included
Guardian, 22 August 2006

"A week ago, I went for a spin in the fastest, most fun car I've ever ridden in—and that includes the Aston Martin I tried to buy once. I was so excited, in fact, that I decided to take a few days to calm down before writing about it. Well, my waiting period is over, I'm thinking rationally, and I'm still unbelievably stoked about the Tesla.... I've always marveled at how long the antique internal-combustion engine has survived. By 2006 standards, my car's power plant is a noisy, heat-blasting, poison-spewing monster with way too many moving parts. One spin in a Tesla made me realize that the gas engine might finally be on its last legs—and not because electric cars will help wean us from Saudi oil and save us from global warming. Rather, the Tesla Roadster is a rolling demo that proves electric cars now outperform their gas-guzzling counterparts in comfort, convenience, and, best of all, speed.... Eberhard got behind the wheel of a Tesla prototype and put the pedal to the metal. I was flabbergasted. In the passenger seat, I was wrapped in an all-powerful force that launched me forward with a perfectly even push.... Eberhard says traditional carmakers have failed with electrics for two reasons. First, they market them as 'penalty boxes' for environmental do-gooders and gas-mileage-obsessed penny-pinchers. Second, they just don't understand batteries. The Tesla's giant lithium-ion battery pack gives it the power to hit 60 in four seconds, to run 250 miles without a recharge, and to charge rapidly at its home charging base (a one-hour charge will take you 80 miles; it takes a 3.5-hour charge to go 250 miles). You can even plug into a wall socket at a roadside stop in a pinch. That makes the Roadster a viable commuter car and weekend day-tripper. The company claims energy costs as low as a penny per mile."
It's Electric! The Tesla Roadster—a hotshot sports car that runs on batteries
Slate, 27 November 2006

"Of course, an expensive two-seater isn't going to have much effect on an industry that sells 17 million automobiles in the US each year. Sure, every VC will have to get one, and George Clooney will probably be seen piloting one down Sunset Boulevard. But selling a few thousand cars won't help Eberhard build a dominant 21st-century car company. That's why he's already preparing a sedan, codenamed White Star, which could hit streets as early as 2008. Of course, the sedan won't be as lightweight or aerodynamic as the Roadster, so its range is likely to drop significantly. Eberhard's response: maybe with today's tech. But battery power is improving steadily, and several companies say they may soon double battery life. By the time the sedan comes out, he says, batteries will be ready to deliver: 'We're going to ride that technology curve all the way home.'"
Battery-Fueled Car Will Smoke You
Wired magazine, 19 July 2006

"In its February, 2006 edition, the prestigious and authoritative Scientific American Magazine takes a detailed look at the collaboration between Lucent Technologies Bell Labs and mPhase Technologies in developing a working reserve battery prototype that relies on a nanotechnology-based architecture. Titled, 'Miniaturized Power,' the four-page feature article notes that Bell Labs, where the transistor was invented, 'has now become involved with the reinvention of the battery' by shrinking electrodes to nanometer scales. ... Future batteries based on this technology have the potential to deliver far longer shelf life and better storage capacity than existing battery technology."
Scientific American Features mPhase Technologies Nano-Battery and Reports Progress in Bell Labs Collaboration
Nanotechwire.com, 10 January 2007

First It's Going To Be Necessary To Deal With Existing Vested Interests
Such As 'Big Oil' And 'Detroit' - But Also The Ethanol Lobby

"Recently George has heard his neighbours say they are taking the final step to turn this heartland of the Mid-West into the Cornbelt of America, ending the rotation of corn and soya bean that has become the norm over the past 30 years. What is motivating George's neighbours is the rising demand for ethanol, a biofuel that is mixed with petrol to bring down prices at the pump and, though not without controversy, to help reduce carbon dioxide emissions that contribute to global warming....on Tuesday night, George Bush placed a rocket beneath the alluvial plains of Iowa. In his state of the union address he announced, as part of his plan to move away from dependence on Middle Eastern oil, an unexpectedly dramatic goal of cutting the use of petrol by 20% over the next decade. To do so, he ramped up the target for production of alternative fuels to 35bn gallons a year by 2017. That's a fivefold increase on present targets, and would require alternative fuel producers to increase by seven times their current output.... In America the alternative fuel that dwarfs any other is ethanol; the plant used most often to produce it is corn; and the state that grows the most cornis Iowa....Ron Litterer is one of those farmers Mr Bush will depend on. He was the president's guest at the White House on Tuesday as a leader of the National Corn Growers Association. He now grows half corn, half soya bean, but next year will grow two-thirds corn to meet the ethanol demand. 'This is going to be good for the economy of Iowa. Demand for our crops for energy is bound to grow,' he says. But the sudden rush to corn-based ethanol, which some liken to a new gold rush, is causing jitters among environmentalists at national and local level. Friends of the Earth US reckons that at best ethanol reduces emissions of global warming gasses by 13% compared with petrol, and if production plants use coal to heat the corn in the process of extracting its sugars, as many now do, there is no net benefit.....Another anxiety is that continuous corn crops are more susceptible to weeds and diseases such as western bean cutworms, a moth caterpillar that attacks the ears of the plant. To control them farmers will have to use more pesticides or turn to genetically modified strains that are insect resistant."
The new gold rush: how farmers are set to fuel America's future
Guardian, 26 January 2006

"After three decades of surviving mostly on tax subsidies, the ethanol industry is poised on Tuesday to get its biggest endorsement yet as a potential homegrown alternative to gasoline.... For an industry once dominated by a single powerful producer, Archer Daniels Midland, ethanol has come a long way, joining the oil industry and producers of major agricultural commodities as an entrenched political force in Washington. But with dozens of new ethanol plants designed to turn corn into fuel coming online this year, the ethanol lobby is facing a critical point. The political reality is that corn's days as the chief crop for making the fuel are numbered. Corn-based ethanol can reduce America's dependence on foreign oil. But it does little if anything to improve energy efficiency, and the lobby's mounting concern is that relying on corn is leading to collateral damage in other parts of the agricultural economy and threatening the country's status as the world's leading corn exporter. The big increase in the works could even mean that consumers would end up paying more at the supermarket.... Today, to keep the ethanol train moving, ethanol makers are cozying up to the oil industry, forming political alliances and enlisting executives from companies like Chevron as they race to make the transition to 'cellulosic' ethanol made from nonfood crops. Otherwise, public support could turn against the fuel, which yields one-third less energy than petroleum-based gasoline and still relies on a federal subsidy to remain competitive.... With the influence of Dwayne Andreas, the longtime ADM chief executive, Congress passed an excise tax in 1978 that gave ethanol its primary subsidy, a tax credit worth 51 cents per gallon of ethanol, or $21 for each barrel of oil. Andreas had powerful friends in Congress, including Senator Robert Dole, a Republican from Kansas who rose to majority leader and who worked to retain the ethanol subsidy.In those early days, Andreas's influence and ADM's generous contributions to both Republicans and Democrats kept ethanol alive. The company also held greater sway within the Renewable Fuels Association because the organization charged membership dues in proportion to a producer's ethanol production. Even today, at around 20 percent of total ethanol capacity, ADM remains the largest producer."
Bush set to give ethanol industry its biggest boost yet
International Herald Tribune, 22 January 2007

http://www.cato.org/pubs/pas/pa-241.html

Cato Policy Analysis No. 241

September 26, 1995

Archer Daniels Midland:
A Case Study In Corporate Welfare
by James Bovard

James Bovard is an associate policy analyst with the Cato Institute. His most recent book is Shakedown: How the Government Screws You from A to Z (Viking, 1995).

Executive Summary

The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30

One of the most politically charged debates in Washington revolves around business subsidies known as "corporate welfare." A number of policy organizations have published studies examining the corporate welfare phenomenon: what qualifies as corporate welfare, how much it costs taxpayers, and how much it damages the economy. This study examines the dynamics of corporate welfare somewhat differently by investigating ADM as a classic case study of how those subsidies are obtained, how the welfare state encourages such "rent seeking," and how such practices fundamentally corrupt the political life of a nation. Congress's expressed desire to foster a free marketplace cannot be taken seriously until ADM's corporate hand is removed from the federal till.

Introduction

ADM is certainly the nation's most arrogant welfare recipient. And it is one of the few welfare recipients that spend millions of dollars each year advertising on Sunday morning television shows populated and watched by politicians. Chairman Dwayne Andreas's and ADM's success in farming Washington represents the rational result of contemporary government policies that turn elections into "an advanced auction of stolen goods," as H. L. Mencken quipped. Thanks to its multi-million-dollar hustling in Washington, a company that lives and dies on the generosity of the American taxpayer has managed to get itself revered as a great public servant. Although ADM is not the only corporation with its hand out in Washington, it is easily one of the most successful beggars on the block.(1)....

Although much has been written lately on ADM and its harvest of taxpayer dollars, the full scope of its parasitic relationship with the U.S. taxpayer has rarely been closely examined. This study provides that detailed examination as well as an insight into the political dynamics that encourage corporate leaders to profit, not by pleasing consumers, but by pleasing politicians. The study also examines the three main arenas for ADM's corporate rent seeking: the ethanol program, the sugar program, and subsidized grain exports.

Tithing at the Church of Subsidy

........

The Wall Street Journal declared on July 11 that "for more than two decades, Mr. Andreas has reigned as the prince of political influence."(5) The Washington Post described Andreas as "one of the great financial 'switch hitters' of American politics," meaning that ADM will bankroll any politician who supports ethanol or sugar subsidies regardless of political creed or ideological convictions.(6) Andreas has done a masterful job of diversifying his investments by carefully cultivating both Senate Majority Leader Bob Dole and Senate Minority Leader Tom Daschle. The New York Times in 1990 called Dole "ADM's staunchest ally on Capitol Hill."(7) The Wall Street Journal likewise recently reported, "In the Senate, Mr. Dole has been the chief promoter of the ethanol subsidy."(8) .....

Ethanol: The Great Agricultural "White Hope"

Nothing symbolizes ADM's political exploitation of Americans better than ethanol. Ethanol has become a magic obeisance button for politicians. Simply mention the word and politicians grovel like trained dogs, competing to heap the most praise on ethanol and its well-connected producers. Regardless of how uncompetitive the product may be, politicians have for years talked about ethanol as if it were the agricultural equivalent of holy water. Ethanol producers have received a de facto subsidy of nearly $10 billion since 1980--yet they continue demanding more, more, more.

Andreas has long sought to frame the ethanol issue in histrionic terms. Burning tax dollars to artificially jam ears of corn into gas tanks seems to have near-cosmic significance. In 1988 Andreas hailed ADM's ethanol operations as "a service to corn growers" and "a service to humanity."(27) Andreas declared in 1992, "This is the Midwest vs. the Middle East. It's corn farmers vs. the oil companies."(28) Ethanol producers view themselves, not as self- serving corporations at the federal trough, but as veritable Mother Theresas striving to save the world with clean air and renewable resources.

Ethanol is produced by distilling corn into alcohol. Ethanol is simply grain alcohol--"white lightning"--the same substance used to fortify MD 20/20 or gin. Ethanol can be mixed--one part ethanol to nine parts gasoline--to make gasohol. Tom Donlan, editorial page editor of Barron's, observed last year that the ethanol controversy is simply one more episode in the dispute over corn whiskey that has been going on since the birth of the American Republic: "200 proof corn liquor is still the same stuff for which western Pennsylvania farmers fought the Whiskey Rebellion of 1792. In this more complicated age, a new Whiskey Rebellion must be fought by aggrieved taxpayers" against wasteful ethanol subsidies.(29)

Although proponents of ethanol argue that such fuel is better for the environment and helps reduce America's reliance on foreign oil (while not at all incidentally providing a new market for corn farmers), the fuel itself is inferior to straight gasoline and the collateral benefits promised by supporters are fewer than meet the eye.... [CONTINUES]

"Last year America used a record 4 billion gallons of ethanol. There are now 97 ethanol refineries in our country, and nine of those are expanding. And 35 more are under construction. The ethanol industry is on the move, and America is better off for it. Many of these refineries are in the Midwest -- the Midwest because that is where the source of that -- the feedstock for ethanol comes from. That happens to be corn. But what's really interesting is there are new plants springing up in unexpected areas, like the Central Valley of California, or Arizona, or, of course, in the sugar fields of Hawaii. After all, sugar is also an important -- can be used for ethanol. As a matter of fact, it's a very efficient feedstock for ethanol. Ethanol required our support. In other words, to get this new industry going, it required a little nudge from the federal government. Since I took office, we've extended the tax credit to 51 cents per gallon for suppliers. We've created a new 10-cent per gallon tax credit to provide extra help to small ethanol producers and farmers; provided $85 million of loans and grants for the ethanol business ventures. In other words, this is a collaborative effort. The federal government has got a role to play to encourage new industries that will help this nation diversify away from oil. And so we're strongly committed to corn-based ethanol produced in America. Yet there -- you just got to recognize there are limits to how much corn can be used for ethanol. After all, we got to eat some. And the animals have got to eat."
George W Bush
Whitehouse Press Release, 25 April 2006

"Nothing says hot like an Arctic bidding war. Last spring Canada Southern Petroleum, a company with significant reserves inside the Arctic Circle, received a takeover offer of $7.50 per share, nearly a 60 percent premium on its stock price. By the time the company was sold four months later to another Canadian firm, it went for $13.10 a share. While some of that excitement may have centered on the company's proximity to Canada's tar sands project in Alberta, it was also cashing in on its position in one of the last places on earth thought to hold significant amounts of untapped oil and gas. While there is drilling in the Arctic on or close to shore, the sea under the polar cap is unlikely to remain largely untapped for long - governments and corporations are racing to carve up the Arctic oil pie....A new petroleum province will likely be needed if the world is going to both replace the output from current fields, many of which are declining, and keep up with worldwide oil demand that is expected to surge by more than 50 percent over the next 25 years. This underlay the tripling of oil prices since 2002."
The Arctic: Oil's last frontier
CNN, 25 October 2006

Already The Twin Spectres Of 'Peak Oil' And Climate Change
Are Beginning To Visibly Collide In The Arctic

"An enormous iceberg the size of central London is causing alarm among scientists, who predict that it could be on the move in a matter of months, posing a potential threat to shipping and oil rigs in Arctic waters. The two-million-ton, 25-square-mile block of ice is part of the Ayles ice shelf. Its existence only recently came to light thanks to satellite images from Nasa. Lying 30 miles off Canada's Ellesmere Island, it will be on the move in the summer, as temperatures rise and break up the surrounding pack ice. 'The potential issue here is that the ice island could go into the oil rigs in the Beaufort Sea,' said Dr Luke Copland, a specialist in ice masses based at the University of Ottawa. 'This hasn't happened in the past, but it could happen.'... Scientists blame global warming."
Ice island the size of London threatens rigs
Independent, 28 January 2007

"The European Commission is due to unveil a wide-ranging set of proposals on energy and climate issues. It will include targets on reducing greenhouse gas emissions and increasing use of renewables, and measures to free competition among energy providers.... A voluntary agreement under which car manufacturers promised to increase the efficiency of their products has not produced the results which the Commission wanted, and it may now propose a mandatory regime. In October the EU announced a set of about 75 measures aimed at increasing energy efficiency overall by 20% by 2020, and the Commission may urge setting a comparable 20% by 2020 target for renewable energy."
New EU path on climate and energy
BBC Online, 10 January 2007

"Mexico is as addicted to oil as heroin addicts are to their next fix: the country depends on oil for a large proportion of its energy needs, consumes it at an unsustainable rate and goes into debt to obtain it. Unless it changes its behaviour or finds a therapy that works, the prognosis is that it will experience a serious crisis. The problem is enormous, analysts told IPS. Mexico produces 3.3 million barrels per day (bpd) of crude, making it the sixth world producer; it exports 1.8 million bpd, and owns one of the 10 largest oil companies, the state monopoly Petróleos Mexicanos (PEMEX) -- but it is teetering on the edge of an abyss, they said. Local oil reserves are expected to last only nine years and eight months at current rates of production, according to precise calculations by experts, whereas in 2000 they were forecast to last 20 years and seven months. Besides, PEMEX is bankrupt. PEMEX has debts greater than its total assets, is undertaking very little exploration, its extraction costs are rising steadily, and most of its revenues go straight into the state coffers to finance 36.1 percent of the national budget, twice the proportion that it contributed 20 years ago."
OIL-MEXICO: Severe Withdrawal Symptoms Ahead
Inter Press Service, 25 January 2007

"The Bush administration wants Canada to bypass environmental rules to quintuple its export of oil sand crude to the United States. The two sides discussed the move during a January 2006 meeting in Houston, according to a transcript recently obtained and released by Radio-Canada, the Canadian Broadcasting Co.'s French network. Canada's natural resources agency and the U.S. Energy Department organized the meeting of government officials and oil company executives from both countries. Canada, the No. 1 oil exporter to the United States already, was urged to increase its production of crude from oil sands from 1 million barrels a day to 5 million barrels a day. Oil sands are deep geological sands mixed with oil that is separated at high temperatures. But the process is energy intensive and is Canada's largest emitter of new greenhouse gases."
U.S. urged Canada to increase oil sands
United Press International, 19 January 2007

"The progressive decline in Mexico´s capacity to produce oil is rapidly becoming more worrisome than the slump in global crude prices. According to estimates by the state oil company, Pemex, petroleum exports will decline dramatically during the Calderón administration. Pemex is anticipating a 13 percent drop in its crude exports over the next six years as Mexico´s proven reserves continue shrinking. Analysts contacted by EL UNIVERSAL agree that Pemex´s inability to increase production is due to waning reserves - particularly the Cantarell field in Campeche Bay which is the source of roughly 60 percent of the nation´s proven reserves - and incapacity to access potential deep-water wells. The first symptoms of a genuine oil crisis are becoming more and more evident. Documents acquired by EL UNIVERSAL indicate Pemex will be forced to cut back on exports to the United States. The reduction could reach 150,000 barrels per day in the next four years. In the final two years of the Calderón administration, the reduction could reach 500,000 barrels per day. Currently, around 1.5 million barrels of oil go to the United States daily.... According to Raúl Muñoz Leos, a former Pemex director, the primary problem lies in the rapid decline of Cantarell reserves and the failure to develop other fields. Muñoz said production levels rose steadily from 2002 to 2004, encouraging company directors to predict a continuation of this trend. 'We established a production goal of 4 million barrels a day by 2006, but by mid-2005 production levels began to decline,' he said. Although Pemex´s exploration budget was boosted to US$4 billion last year, the investment has yet to bear fruit. 'Since this sizeable investment has brought little in return, it might be time for us to learn from the experience of other international producers and redouble our exploration efforts,' he said. 'It is impossible to ignore the fact that our reserves are rapidly shrinking.' The latest official projection shows Pemex will be able to produce only 3.3 million barrels per day over the next 10 years."
Pemex predicts production drop
El Universal, 17 January 2007

"Kazakhstan's new prime minister criticized foreign oil companies Thursday and ordered the government to tighten control over their activities in the energy-rich Central Asian nation, the government said....Last year, Kazakhstan downgraded its long-term oil output forecast from 3 million to 2.6 million barrels a day by 2015 because of delays with development of Caspian Sea fields. The start of production at the giant Kashagan oil field is not expected before 2009-2010 because of technological difficulties. The international consortium let by Italy's Eni SpA had originally planned to start production in 2005. The Kashagan field in northern Caspian Sea, the world's last biggest oil discovery in the past 30 years, is expected to play a crucial role in filling a new pipeline completed in 2005 and designed to carry Kazakh oil to energy-hungry China.... In the past few years, Kazakhstan has been pursuing a policy to increase state assets in its vast energy sector that is currently dominated by Western investors."
Kazakh leader orders control of oil
Business Week, 18 January 2007

"China imported 145 mln tons of crude oil in 2006, up 14.5 pct from 10.82 mln in 2005, the General Administration of China Customs said in a statement published on its website."
China's 2006 crude oil imports 145 mln tons, up 14.5 pct - customs
AFX News, 11 January 2007

"Iran has ensnared itself in a petroleum crisis that could drive its oil exports to zero by 2015. While Iran has the third- largest oil reserves in the world, its exports may be shrinking by 10 to 12 percent per year. How can this be happening? Heavy industry infrastructure must be maintained to remain productive. This is especially so for oil, because each oil well's output declines slightly every year. If new wells are not drilled to offset natural decline, production will fall. This is what is happening in Iran, which has failed to reinvest in new production.... Another threat to exports is the growth in domestic demand. Iranian oil demand is not just growing, it's exploding, driven by a subsidized gasoline price of about 9 cents a liter. This has created a 6 percent growth in demand, the highest in the world. So Iran burns its candle at both ends, producing less and less while consuming more and more. Absent some change in Iranian policy, a rapid decline in exports seems likely."
Iran actually is short of oil
International Herald Tribune, 8 January 2006

"An energy crunch that chokes fuel supplies, dims the lights at homes and workplaces, and ravages Western economies may no longer be the stuff of 1970s history books. It could be a vision of the near future.The 1970s oil crisis gave Western countries a glimpse of what life is like when the energy supply isn't enough to go around. Worried that an even bigger crisis lies in wait, the European Commission is presenting an energy 'roadmap' on Jan. 10 that aims to steer the bloc's 490 million people in a different direction. The policies, of unprecedented scope, will carry a plain warning: High and volatile oil prices, surging demand, unreliable supplies and global warming compel Europe to reconfigure its energy supply before it's too late. It is Europe's response to one of the defining global problems of the 21st century. 'It's the biggest issue. It affects all of us. Just try living without energy for a few days,' said Elena Nekhaev, director of programs at the London-based World Energy Council, a non-governmental organization. The European Union, the second-largest consumer of energy in the world after the United States, is also the largest energy importer, looking abroad for just over half the energy it needs. Within 20 years, at current rates of consumption, the EU could depend on foreign suppliers for 70 percent of its energy, the Commission says... The European Renewable Energy Council, a Brussels-based industry group, says all but two of the European Union's 27 member states — Germany and Denmark — are shying away from binding targets for renewable energy production that are a central plank of the new policy.... In the meantime, the Commission wants Europeans to cut back on their energy usage, seeking a 20 percent reduction in consumption by 2020."
Europe lays out plan to tackle energy dilemma — but will governments and consumers balk?
Associated Press, 5 January 2007

"Norwegian oil and petroleum liquids production is expected to decline by about seven percent this year... Norway is the world's third-largest oil exporter, after Saudi Arabia and Russia, and is also the No. 3 gas exporter.... Even though the number of exploration wells drilled in 2006 doubled to 26 from the previous year, only four discoveries were made, the report said."
Norwegian oil production to decline in 2007, gas flows will continue to set records
Associated Press, 5 January 2007

"Iran is suffering a staggering decline in revenue from its oil exports, and income could virtually disappear by 2015 if the trend continues, according to an analysis published Monday in a journal of the National Academy of Sciences.... Iran earns about $50 billion a year in oil exports. The decline is estimated at 10 to 12 percent annually. In less than five years exports could be halved and then disappear by 2015, Stern said.... He said oil production is declining and both gas and oil are being sold domestically at highly subsidized rates. At the same time, Iran is neglecting to reinvest in its oil production."
Iran oil industry founders, report says
Associated Press, 26 December 2006

"China, hosting its first major energy summit on Saturday, urged top oil consumers to join together in the face of resurgent producer power and sought to paper over differences on how best to achieve energy security. Ministers from the United States, India, Japan and South Korea - nations that consume nearly half the world's oil - gathered in Beijing for the meeting, which marked a rare move by China to take a leadership role on global energy issues. 'We want to send out an important, positive message, which is: the world's key energy consuming countries plan to strengthen mutual cooperation,' China's top energy policy maker Ma Kai said. '(We will) promote conservation of oil, improvement of energy efficiency, strong development of oil alternatives, and reduce reliance on oil,' he added in prepared remarks to the forum."
China, at energy summit, urges oil consumers to unite
Reuters, 17 December 2006

"China will invest over one trillion yuan (about 127 billion U.S. dollars) in developing an alternative coal-based energy source to ease the country's dependence on oil imports, according to the National Development and Reform Commission (NDRC). The project aims to produce 30 million tons of liquefied coal and 20 million tons of dimethyl ether (DME) by 2020. Coal-to-olefin (CTO) output is expected to hit 8 million tons and coal methanol to reach 66 million tons."
China to invest 1 trillion yuan to develop oil alternative
Xinhuanet, 15 December 2006

"The North Sea will run out of oil and gas. The question is, when. The United Kingdom Offshore Operators' Association predicts that production will fall below one million barrels per day before 2020. The UK government's energy review said production will be reduced from just under 3.5 million barrels a day now to below 1.5 million by 2030.... Tony Mackay, the managing director of Mackay consultants, says: 'North Sea oil production peaked in 1999 and gas production in 2001. Both are currently declining by about 10 per cent per year and there is little chance of that trend being reversed. 'New fields continue to be discovered and developed, but are much smaller.'"
Dwindling resource of fuel for a solid future?
The Scotsman, 13 December 2006

"Few countries can match Iran in its ability to generate angst among Westerners. It appears determined to become a nuclear power. Tehran's Islamic leaders aid radical groups across the Middle East. And as the U.S. gets bogged down in Iraq, Iran's influence in the region is on the rise, fueled in large part by its vast energy wealth. Yet Iran has a surprising weakness: Its oil and gas industry, the lifeblood of its economy, is showing serious signs of distress. As domestic energy consumption skyrockets, Iran is struggling to produce enough oil and gas for export. Unless Tehran overhauls its policies, its primary source of revenue and the basis of its geopolitical muscle could start to wane. Within a decade, says Saad Rahim, an analyst at Washington consultancy PFC Energy, 'Iran's net crude exports could fall to zero. ' That's not to say Iran doesn't have abundant resources. The country's 137 billion barrels of oil reserves are second only to Saudi Arabia's, and its supply of gas trails only Russia's, according to the BP Statistical Review of World Energy. Getting it all out of the ground, though, is another matter. Iran has been producing just 3.9 million barrels of oil a day this year, 5% below its OPEC quota, because of delays in new projects and a shortage of technical skills. By contrast, in 1974, five years before the Islamic Revolution, Iran pumped 6.1 million barrels daily. The situation could get even tougher for the National Iranian Oil Co. (NIOC), which is responsible for all of Iran's output. Without substantial upgrades in facilities, production at Iran's core fields, several of which date from the 1920s, could go into a precipitous decline. In September, Oil Minister Kazem Vaziri-Hamaneh suggested that with no new investment, output from Iran's fields would fall by about 13% a year, roughly twice the rate that outside oil experts had expected. 'NIOC is likely to find that even maintaining the status quo is a mounting challenge,' says PFC Energy's Rahim."
Surprise: Oil Woes In Iran
Business Week, 11 December 2006

"Oil production in Southeast Asia will reach a peak in 2013 as fewer new fields are found, forcing the region to evaluate its dependence on crude, said Michael Smith chief executive of UK-based consultant Energyfiles Ltd. Crude oil output will hit an apex of 3.3 million barrels a day by 2013, compared to 95 million barrels a day of global production, said Smith, during a presentation at the OSEA 2006 conference in Singapore. Southeast Asia’s gas production will hit a total of 4.7 million barrels of oil equivalent a day at the same time before reaching a top level in 2020."
Southeast Asian oil output likely to peak by 2013
Bloomberg, 6 December 2006

"Costs for the oil sands project of Synenco Energy Inc. and China Petroleum & Chemical Corp. have surged 160 per cent and the companies plan to build key components in China to try to control spending.Calgary-based Synenco Wednesday said the mining and extraction portion of the Northern Lights project could cost $4.4-billion, more than double a previous estimate of $1.7-billion.... According to Tristone Capital Inc., Northern Lights could cost as much as $10-billion in total, which is in the range of current costs in the massively overheated construction arena around Fort McMurray in northeastern Alberta. 'There is no question that costs affecting capital-intensive oil sands projects have changed dramatically in just a few months — largely due to resource shortages — and our project's cost estimates have also risen,' said Todd Newton, president of Synenco. To combat inflation, parts of Northern Lights will be built by workers in China."
Oil sands partners to build in China as costs soar
Globe And Mail, 6 December 2006

"The U.S. government's top energy forecaster on Tuesday said it raised its estimate for world crude prices in 2010 by about 20 percent to near $60 a barrel due to delays bringing new oil fields on line. African producers like Angola and Nigeria and Latin American states like Brazil will be slower than initially projected in ramping up production from new projects, putting a squeeze on world supply, said Guy Caruso, administrator of the Energy Information Administration. 'It's clearly going to take longer now to bring on the new supplies and to have an impact on price than we were thinking a year ago,' Caruso told reporters."
Oil field delays mean higher 2010 crude price: EIA
Reuters, 5 December 2006

"Kazakhstan has downgraded its long-term oil output forecast because of delays at Caspian oil developments, senior Kazakh officials said Tuesday, according to media reports. Kazakhstan's Energy and Mineral Resources Minister Baktykozha Izmukhambetov said Tuesday, according to Interfax news agency, that planned oil production will reach only 130 million metric tons, or 2.6 million barrels a day, by 2015. Earlier in June, he had said that Kazakhstan had planned to reach the production of 3 million barrels a day, or 150 million tons, by that time. Kazakh Prime Minister Daniyal Akhmetov said Tuesday that the downgrade of long-term production forecast was related to delays in starting production at offshore fields. 'We have to realize that we have a delay in the program of developing the Caspian,' Akhmetov was quoted as saying by the Kazakh state news agency Kazinform. 'All our plans to reach oil production of 120 tons by 2010-2012 and 150 million tons by 2015 are in doubt because of it.' Akhmetov said that the delay would also affect Kazakhstan's macroeconomic indicators, without elaborating. Production at giant Kashagan oil field in the Caspian is unlikely to start before 2009-2010 because of technological difficulties related to the development. There have also been periodic tensions between the government and the developing consortium, led by Italy's Eni Spa (E), over issues such as Kazakhstan's acquisition of a stake in the project."
Kazakhstan downgrades long-term outlook for oil production
MarketWatch, 28 November 2006

"A rise in oil production from the Caspian, Africa and North America will ease OPEC's burden in meeting world oil demand in 2007, but an anticipated supply surge may not materialise. Producers outside OPEC may pump enough new oil next year to meet growth in world demand, unlike this year or in 2005, according to the International Energy Agency, as new fields come on stream."
OPEC's rivals set to pump more oil in 2007
Reuters, 23 November 2006

"The chief executive of Mexico state oil monopoly Petroleos Mexicanos, or Pemex, said Wednesday the company expects production at its Cantarell oil field to decline by an average of 14 percent a year between 2007 and 2015. Speaking to members of the Senate Energy Committee, Luis Ramirez Corzo said the average annual decline is equivalent to about 150,000 barrels a day. The offshore Cantarell, Mexico's largest source of crude oil, began declining in 2005 from a record 2.13 million barrels a day in 2004. Ramirez Corzo said output at Cantarell is expected to average 1.8 million barrels daily this year. Pemex is aiming to substitute Cantarell's declining output with production from other projects under way, he said. The main problem facing the state company is how to finance future projects, Ramirez Corzo said."
Mexico's Pemex chief: Cantarell oil field output to drop 14 percent a year
Associated Press, 22 November 2006

Archer Daniels Midland: A Case Study In Corporate Welfare http://www.cato.org/pubs/pas/pa-241.html [EXTRACT]

Archer Daniels Midland:
A Case Study In Corporate Welfare
http://www.cato.org/pubs/pas/pa-241.html
[EXTRACT]