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Fuel Freedom Staff

New Yorker: Low oil prices put Venezuela in a bind

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The New Yorker quotes Harvard economist and former Venezuelan government official Ricardo Hausmann’s cautionary words about Venezuela’s budget situation in the face of plummeting oil prices.

As Girish Gupta writes:

Serious concern remains that Venezuela will eventually default on some of the more than seventeen billion dollars it is due to pay in the next three years, or that its economic problems will lead to political crisis. Many industries, from airlines to pharmaceuticals to small retailers, are fighting for a limited supply of hard currency in Venezuela, which means that, so long as the current climate prevails, the country will be presented with decisions about whom to pay. “The problem in Venezuela is that they’re playing a game of musical chairs, and there aren’t enough chairs for all the players,” Hausmann told me. “My piece clarified to Wall Street the magnitude of the musical chairs.”

Some 96 percent of the nation’s foreign currency pours in from oil revenues, and falling crude prices mean the government, led by Hugo Chavez’s successor, President Nicolás Maduro, might not be able to provide as many services to the public as it did when oil exceeded $100 a barrel. For instance, the government subsidizes gasoline purchases for citizens — it costs only a few pennies for them to fill up their tanks — and this benefit costs the treasury some $12 billion a year.

Further cuts to services could mean more unrest in Venezuela. As Gupta writes:

Earlier this year, Maduro faced the biggest anti-government unrest the country has seen for a decade, but, even so, he denies that Venezuela is yoked to global oil prices. “The price of oil can go down to forty dollars a barrel and I guarantee to the people all of their rights: for food, education and life,” he said on state television in mid-October, adding that he expected oil prices to rise again. OPEC, however, does not seem keen to cut output.

 

Fuel Freedom Staff

North Dakota taking steps to use more of its natural gas

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North Dakota flares more than 25 percent of the natural gas it extracts from the Bakken oil-shale play. Not only is natural gas cheaper (i.e. not as profitable) than the oil that comes out of the same wells, there’s a lack of pipeline and storage capacity in that region. Texas, by comparison, flares only 1 percent of its natural gas.

But the state is taking steps to build the infrastructure to capture and use more natural gas. As Adam Belz of the Minneapolis Star Tribune notes:

A quiet transformation is underway, however, as the state bids to turn natural gas into a native business and drive down flaring.

A growing network of pipelines and processing plants has made North Dakota a recent target for billions of dollars of investment toward factories that convert natural gas into other products like fertilizer and plastic.

Fuel Freedom Staff

Breaking Energy: Kansas ethanol plant a big win in RFS equation

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While the debate rages about what the threshold for biofuels should be in the government’s next (and long-delayed) Renewable Fuel Standard, Breaking Energy’s Jared Anderson has a timely post about the makeup of the current RFS, as it was proposed by the EPA last November.

There are thresholds within the larger thresholds, and it looks like the cellulosic ethanol target will go down. But as Anderson notes:

“While the battle over the RFS continues, the cellulosic ethanol industry took a major step forward today with the inauguration of a commercial-scale plant in Hugoton, Kansas. The biorefinery has the capacity to produce 25 million gallons of cellulosic ethanol per year, which alone exceeds EPA’s proposed 17 mm gallon blending target under RFS. The plant also generates 25 MW of electricity, which supplies its own needs and provides excess power to the local community.”

Anderson signs off with:

“The RFS will remain controversial, but this new plant is a big win for the cellulosic ethanol portion of the equation.”

(Photo credit: Shutterstock)

Fuel Freedom Staff

Report: Electric car buyers hate the dealer experience

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Researchers at the Institute of Transportation Studies at the University of California at Davis have made a startling discovery: Consumers in the market for an electric vehicle hate dealing with the traditional car dealers that sell EVs.

Green Car Congress has a story on the UC Davis study, which found that purchasers of plug-in electrics were less satisfied with their experience with the sales departments at car dealerships than purchasers of traditional gas-powered vehicles.

And the feeling is mutual, it seems: Sales people at dealers that sell EVs alongside traditional cars often don’t like to take the extra time (for time is money) to explain the basics of how EVs work. As Green Car Reports notes, “Customers tended to be more discriminating, they said, which demanded more time and effort by the staff to answer questions and arrange test drives.”

The exception to the rule of customer dissatisfaction is Tesla, which doesn’t even use dealers: Buyers pick out the model they want in the showroom, then order online.

Arctic Leaf

Europe says yes to alternative vehicles

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Things have always been a little easier in Europe when it comes to saving gas and adopting different kinds of vehicles. The distances are shorter, the roads narrower, and the cities built more for the 19th century than the 21st.

Europeans also have very few oil and gas resources, and have long paid gas taxes that would make Americans shudder. Three to four times what we pay in America is the norm in Europe.

Thus, Europeans have always been famous for their small, fuel-sipping cars. Renault was long famous for its Le Cheval (the horse), an-all grey bag of bones that’s barely powerful enough to shuttle people around Paris. The Citroën, Volkswagen and Audi were all developed in Europe. Ford and GM also produced models that were much smaller than their American counterparts. Gas mileage was fantastic — sometimes reaching the mid-40s. A big American car getting 15 miles per gallon and trying to negotiate the streets of Berlin or Madrid often looked like a river barge that had wandered off course.

More Europeans also opt for diesel engines instead of conventional gasoline — 40 percent by the latest count. The overall energy conversion in a diesel engine is over 50 percent and can cut fuel consumption by 40 percent. But diesel fuel is still a fossil fuel, which have a lot of pollution problems and don’t really offer a long-range solution. So, Europeans decided that it’s time to move on to the next generation.

Last week the European Union laid down new rules that will try to promote the implementation of all kinds of alternative means of transportation, making it easier for car buyers to switch to alternative fuels. The goal is to achieve 10 percent alternative vehicles by 2025 over a wide range of technologies, removing the impediments that are currently slowing the adoption of alternatives. If everything works out, tooling around Paris in an electric vehicle within a few years without suffering the slightest range anxiety would become a reality.

By the end of 2015, each of Europe’s 28 member states will be asked to build at least one recharging point per 10 electric vehicles. Since the U.K. is planning to have 1.55 million electric vehicles. That would require at least 155,000 recharging stations, which is a pretty tall order. But members of the commission are confident it can be done. “We can always call on Elon Musk,” said one official.

For compressed natural gas, the goal is to have one refueling station located every 150 kilometers (93 miles). This gives CNG a comfortable margin for range. With liquefied petroleum (LPG) it will be for one refueling station every 400 kilometers (248 miles). These stations can be further apart because they will mainly be used by long-haul trucks travelling the TEN-T Network, a network of road, water and rail transportation that the Europeans have been working on since 2006.

Interestingly, hydrogen refueling doesn’t get much attention beyond a sufficient number of stations for states that are trying to develop them. There is noticeably less enthusiasm for hydrogen-powered vehicles than is expressed for EVs and gas-powered vehicles. All this indicates how the hydrogen car has become a Japanese trend while not arousing much interest in either Europe or America.

At the same time, Europeans are planning very little in the way of ethanol and other biofuels (they also mandate 20 percent ethanol in fuel). Sweden is very advanced when it comes to flex-fuel cars. They have been getting notably nervous about the misconception that biofuels are competing with food resources around the world — Europe does not have its own land resources to grow corn or sugarcane the way it is being done in the United States and Brazil. Europe imports some ethanol from America but it is also now developing large sugar-cane-to-ethanol areas in West Africa.

Siim Kallas, vice president of the European Commission for TEN-T, told the press the new rules are designed to build up a critical mass of in order to whet investor appetites for these new markets. “Alternative fuels are key to improving the security of energy supply, reducing the impact of transport on the environment and boosting EU competitiveness,” he told Business Week. “With these new rules, the EU provides long-awaited legal certainty for companies to start investing, and the possibility for economies of scale.”

Is there any chance that the public is going to take an interest in all this? Well, one poll in Britain found last week that 65 percent would consider buying an alternative fuel car and 19 percent might do it within the next two years. Within a few years they find the infrastructure ready to meet their needs.

Arctic Leaf

What Do Religious Patents And Pope Francis Have To With Reducing Oil Dependency?

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Israel has more patents per capita than any other nation in the world. Despite wars and tension at its borders, international investor interest remains high, particularly in high-tech industries. Indeed, high-tech industries continue to grow faster than any other industrial sector.

Okay. I have a serious question for questioning minds. The Jerusalem Post stated that pollution levels dropped by 99 percent on Saturday, Yom Kippur, a key Jewish religious holiday. The article indicated that nitrogen oxides decreased by 99 percent in the Gush Dan and Jerusalem regions and that other serious pollutants that affect health and well-being also dropped significantly. (Truth in advertising compels me to say that Israel has another holiday called Lag B’omer, where folks light bonfires to celebrate a wise sage in Israel’s past. Many also travel to the sage’s tomb. Both activities make air quality terrible. But understanding, apology, patience and penitence may result yet in friendlier environmental options.)

Wow, could Israel patent environmental behavior based in religion to secure a healthy environment? What would they patent? Perhaps, activities resulting from seeking forgiveness for previous driving and fuel related sins generating harmful pollutants. Asking forgiveness and apologizing are what Jews are supposed to do on the Holy Day. Or should they try patenting the environmental God, Himself or Herself, to make sure we have a major partner with respect to minimizing pollution in the environment. Here, they could include other possible partners like the scientists busy at work in Switzerland on the “God particle” in their patent.

Maybe Israel’s success with Yom Kippur behavior would lead Catholics, Protestants, Muslims, Hindus and Mormons to define and patent Holy No Drive Days or better yet, because of lessons learned from Israel and possible Israeli involvement, lengthier environmental behavior days, weeks, months or years. Because of the negative impact on the global economy, international security and the environment of the world’s present dependency on oil and oil’s derivative gasoline, perhaps all the major religions and even the minor ones could agree on a range of environmentally friendly behavior changing initiatives, particularly related to one of the largest pollutants of them all…oil. Each patent would be based on prescriptions written or derived from religious interpretation of each religion’s environmental norms and tenants and holidays. Here’s one: Just say no to gasoline and yes to use of replacement fuels. Tithings from believers or congregants would support the effort. Figure it out, enough long holidays and the world might begin to reduce levels of pollution and likely GHG emissions, as well as oil-based wars and tension. Maybe we could develop a whole set of religious patents, that once patented, would be capable of being used by any nation or religion and any group or individual free. You know, building good, Godly behavior.

No government subsidies, no new government regulations. If behavioral changes stick, based on religious initiatives, our grandchildren and their grandchildren could live in a better world. While, likely impossible and the idea of patenting good behavior is more humorous than real, the thought seems worthy of a prayer or two and lots of meaningful sermons as well as interfaith action.

Collaboration by churches, synagogues and mosques could influence governments to jump in and also play a leadership role. Clearly, religiously inspired guilt is often aspirational and motivational — sometimes politically. Combined with religiously inspired individual commitment concerning grassroots activity, it could secure secular support for the development and implementation of comprehensive fuel policies concerning environmental, security and economic objectives — like social justice.

Where might we go with this? Probably not very far. But think of it. We spend much time arguing about God, and often much less time achieving godliness through reforming institutional and our behaviors as good stewards of the world. If we could marshal (excuse the pun), the leaders of some of the major religions of the world to help reduce harmful pollution from gasoline, GHG emissions and wars related to oil, over time, amendments to individual and group activities could help “convert” the bleak forecasts concerning climate change and increasingly dirty air for the better. Additionally, such an effort could also lead to a reduction of tension in areas like the Middle East, and global and national economic growth based on the development and distribution of both transitional replacement and renewable fuels.

I don’t expect invitations to discuss the matter from religious forums or meetings. But seeking collaboration from the religious community to end dependence on oil is something to think about in terms of the “what ifs.” Maybe in this context, a respected celebrated religious leader like Pope Francis could be asked to try to bring together religious leaders and even some secular ones to at least begin to discuss initiatives across man- or women-made national boundaries.

The proposed agenda would link short-term coordinated strategies to use transitional replacement fuels such as natural gas, ethanol, methanol and biofuels with longer-term plans (with immediate efforts) to increase the competitiveness of electric and hydro fuels. For my religious colleagues and secular friends, it seems to me that beginning these discussions is a moral and practical imperative.