- “China National Nuclear Corp., the nation’s biggest nuclear plant builder, said a decline in the spot price of uranium will affect the country’s exploration for the fuel at home and overseas.” – Bloomberg
- “Petro-Canada, the country’s third- largest oil company, has delayed the C$25.3 billion ($20.6 billion) Fort Hills oil-sands mining project in Alberta because of rising costs and falling oil prices.” – Bloomberg
- “Somali pirates hijacked a Saudi supertanker loaded with crude hundreds of miles off the coast of East Africa.” – AP (Fill in your own global warming-piracy joke.)
- “[A] spatial shift of atmospheric circulations can accelerate global-warming-forced gradual changes, leading to a rapid change event.” – Zhang et al., GRL
Oil Closed Today at $55.15
You know when you’re a blog-writin’, energy wonkin’ wonk when you go bike riding with friends, and the whole thing turns into an energy policy riff. On the Internet. I’ll let Scot tell it:
I see at Bloomberg this morning that oil is $55 a barrel. $85 dollars down from $140, carry the one….that’s…a 61% decrease in about 135 days or so. Besides proving, once again, that I’d make a lousy commodities trader (and that most commodities trading analysts would make lousy commodities traders), what does it all mean?
I haven’t a clue, but doing a bit of bikeriding yesterday around the kitsch that is Mesa del Sol I saw big, shiny manufacturing centers looking pretty empty amid even emptier sunny Mesa. In particular, I came across this optimistic sign at the Advent Solar plant that read “Parking for Advent Solar Customers Only”. Sure it was Sunday, and almost everything in the whole planned development was empty, but given what my bikeriding friends told me about Advent, those parking space might not be filled for quite a while at $55 a barrel. European frenzy for solar energy or not.
Scot tells it about right, I think.
Raise That Gas Tax!
The Washington Post thinks you’re not paying enough for gas*:
In a perfect world, we’d like to see a gas tax that was the equivalent of oil at $100 per barrel. This would send a loud-and-clear signal to drivers to continue eschewing gas guzzlers for fuel sippers and mass transit. Automakers would get the message to speed up production of motor vehicles that meet or exceed the 35 miles per gallon by 2020 mandated by Congress last year. Instead of the money going to countries that have U.S. interests at heart in the same way a dealer cares about a junkie, the revenue would stay here — and it could all be returned to the American people in the form of tax rebates.
(via Greg Mankiw)
* $2.25 a gallon average in New Mexico today, down 3 cents from yesterday. Source: AAA
Collier on Global Food Prices
African maize
In recent years, the increase in demand resulting from gradually increasing incomes in Asia has instead been matched with several supply shocks, such as the prolonged drought in Australia. These shocks will only become more common with the climatic volatility that accompanies climate change. Accordingly, against a backdrop of relentlessly rising demand, supply will fluctuate more sharply as well.
In other words, it’s increased variability that’s the real climate-food killer.
(It’s not the major point of his piece. His central thesis, which you should go read, is that ethanol subsidies, hostility to large commercial farming and opposition to genetically modified food are, together, making people starve.)
Energy Research at the Weapons Labs?
I wrote a piece for this morning’s Albuquerque Journal trying to address what I think is a misunderstanding afoot in New Mexico about the future of Los Alamos and Sandia labs – the idea that they can shift to energy reserach as support for nuclear weapons spending declines. It ain’t gonna be easy:
During the presidential campaign, Barack Obama promised $150 billion over 10 years for renewable energy, and lab backers hope some of that money can flow into Los Alamos and Sandia.
But those within the federal energy establishment point to reasons why the potential may be less than New Mexico labs’ backers hope.
Sandia and Los Alamos are just two among 21 Energy Department labs and research centers. Many have stood on the sidelines watching while Sandia and Los Alamos saw their nuclear weapons budgets grow, and will likely think that it is their turn now. More importantly, other labs — most notably the National Renewable Energy Laboratory in Colorado — already specialize in the sort of work the Obama administration wants to fund.
Los Alamos and Sandia may be able to get a small piece of the action, one knowledgeable insider told me, partly by partnering with other energy research centers. But it is unrealistic to expect expanded energy funding to make up for any declines in nuclear weapons spending.
Letter from Bhutan
Jim Baca shares a delightful letter from his sister, traveling in Bhutan:
I was in a temple yesterday for a festival and observed about 60 nine-year old monks in training. The adult monks allowed the 4 of us to lean against the wall and watch. One of the teachers walked by me and whispered, “You United States?” I nodded “yes”. He then pulled aside his monk robe near his neck and on his tunic underneath, there was an “Obama ’08” button!
Cactus Fruit
A tray of cactus fruit, which Lissa is processing for later holiday treats. She harvested what must be about 50 pounds (~100 kg) from the prickly pear in the front yard this morning. The picture doesn’t quite do justice to the lovely purple color. She cooks it down and mashes it into a lovely juice – delicate flavor, gorgeous fuschia.
Understanding Does Not Equal Predictability
It is sometimes argued that if economists really understand something, they should be able to predict what will happen next. But oil prices are an interesting example (stock prices are another) of an economic variable which, if our theory is correct, we should be completely unable to predict.
Law of Supply and Demand Confirmed!
Suppy and demand isn’t just a theory, it’s the law.
Demand drops (EIA):
Price drops (AAA):
(I find that consumption graph from EIA incredibly compelling.)
Food Yet Cheaper
Global food prices continue to fall, according to the Economist, down 6 percent over the last month and now sitting 8 percent lower than a year ago. I assume this is good news for the hungry, who can afford more to eat. But what effect does it have on food producers in the world’s poor bits, and therefore on the long term development of poor world agriculture needed to ultimately address world hunger problems?