Stuff I Wrote Elsewhere

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Trying to get a better handle on New Mexico’s energy resources, I recently spent a bunch of time learning about coal here. The results, a broad overview story in today’s Journal business section, are an attempt to answer the underlying question of what effect permanently higher energy prices might have on coal mining in a state with modest production and deep reserves. The short answer is “not much”. We’ve just opened our first new coal mine in more than a decade, but a number of factors suggest we won’t see a large increase in coal mining here over foreseeable time frames, for a couple of major reasons:

  • Our coal is power plant coal, and we’re just not seeing more power plants being built right now. The exception here is Desert Rock, and the battle over Desert Rock’s carbon emissions and other environmental effects illustrates the problem with coal in both technical and political terms.
  • Our infrastructure doesn’t support significant coal exports. The best, easiest-to-mine coal is in the Four Corners area, which does not have the rail connections to make large-scale shipping possible.

The full story, along with two sidebars.

The Problem with Falling Oil Prices

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Falling oil prices are good for the US economy, right? I can fill up my tank for less, and the inflation rate won’t be quite so bonkers, right? James Hamilton on the dark side:

But really the key question for purposes of assessing the economic consequences of falling oil prices is, Why did oil prices fall? To the extent that it is due to the increased global oil production that we’ve been anticipating ([1], [2]), that is unambiguously good news for an oil importer like the United States. But I’m persuaded that another key cause of oil’s recent plunge has been economic weakness in Europe and Japan, which has meant both a stronger dollar and weaker global oil demand.

And weakness in global economic growth is a real threat to the U.S. economy. Exports are the one sector that seemed to keep the U.S. economy going in the second quarter. If you kick out the leg of a one-legged stool, prospects for stability are not too great.

The Crispness of Fall

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There’s a hint of fall in the air right now. They’re roasting chiles across the street from my parents’ house, and the temperature dropped below 60 a couple of times this week (16C).

I’ve been working on a piece for the paper on energy-saving steps you can take to get ready for higher natural gas bills this winter. EIA is forecasting prices up at least 20 percent this winter over last for natural gas heating (the dominant source here in New Mexico for home heating). PNM, which provides our natural gas, is forecasting slightly less of an increase, but definitely above last year.

We’ll have a snazzy package in the paper in a few weeks on the low-hanging fruit around your house for saving gas, but you really don’t need me to tell you what to do. Most of the stuff is obvious.

Desal Free-For-All

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From today’s Albuquerque Journal*, a thoughtful discussion of the risks posed by the current lack of regulation of desalination of deep brackish groundwater in New Mexico. The backstory is significant interest in drilling into deep aquifers around Albuquerque, bringing up brackish fossil groundwater, cleaning it up and using it to support continued growth that might not otherwise be possible with with current surface water and clean groundwater supplies:

If miles of new subdivisions are made possible by desalinated water, what will sustain those subdivisions if the water runs out?


Perhaps more disturbing of all, however, is the possibility that pumping the deep water could drain fresh-water aquifers above or contaminate existing supplies.

The West’s entire water-law tradition argues against unregulated, unlimited access by new claimants.

* Just to be clear, because there is often confusion on this point. I do cover water for the Journal, but did not write this editorial. The editorial page staff is separate from the news staff.

Global Oil Consumption Still Rising

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The United States has undergone a remarkable petroleum belt-tightening in the face of rising oil prices. We’re down 800,000 barrels per day over the first six months of 2008 compared to year-ago numbers, the largest drop in 26 years, according to EIA. But in global terms, oil consumption continues to rise despite the 2008 price increases, up 1.3 million barrels a day outside the major western economies.