The World has Passed Peak Oil, says Top Economist

The Nicholas Institute for Environmental Policy Solutions at Duke University

Despite high prices, crude oil production has stayed basically flat for roughly five years. It seems this is the all-time high-water mark, according to Fatih Birol, chief economist for the International Energy Agency. “We think that crude oil production for the world has already peaked in 2006,” he told the Australian Broadcasting Corporation. “I think it would have been better if the governments have started to work on it at least 10 years ago.”

At a European Parliament conference on peak oil, the European Commission’s director-general for transport and mobility policy warned if actions are delayed to reduce oil dependency, “we may be forced to drastically reduce all our mobility.”

Already, rising energy costs are taking their toll around the world, with U.S. economic growth stumbling and raising the spectre of stagflation, as well as, helping to drive up food prices in Latin America, and driving inflation in Europe.

Squeezing Renewables Through Bottlenecks

Renewable energy could, in theory, take over quickly from fossil fuels, according to a draft of a new report on renewable energy by the Intergovernmental Panel on Climate Change. The study says renewables could grow 20-fold in the next four decades—more than enough to meet projected demand. But in reality, the report argues, less than 2.5 percent of that potential will be put into place.

One of the bottlenecks in renewable energy production is the electric grid, argued another recent report, this one by the World Resources Institute. Idaho’s power grid, for example, could soon be overloaded by electricity from wind turbines, so the state’s Public Utilities Commission has suspended permits for all but fairly small turbines, cutting the largest allowable turbine 100-fold, from 10 megawatts down to 100 kilowatts.

Wind energy isn’t going away anytime soon, either, according to a study that estimated the effect of continued global warming on wind patterns over America’s lower 48 states and a portion of northern Mexico. By mid-century, most areas will see barely any change in their windiness, and those that will see a drop weren’t great sites for wind power in the first place, the researchers say.

Feed-ins Choked Off

The sluggish economic recovery is also hurting renewables, with the UK’s feed-in tariff—the subsidy for electricity that renewable energy systems produce and sell back to the grid—falling under the blade of budget cuts. The tariff has led to a surge in home solar installations. Now for larger projects, the government is planning to cut the tariff drastically—although projects installed before the August deadline will be grandfathered in.

To get in under the wire and secure the feed-in tariff, a community group rushed to secure funding to put up a bank of more than 500 solar panels on a brewery’s roof, which will keep the beer cool—and the excess electricity will be sold back to the grid. Although community power companies have been created before, such as a pioneering one in Germany, the effort claims to be the first in the UK. Despite their estimate that it will take investors 20 years to make a return, they have attracted widespread interest.

On the other end of the funding spectrum, money for the $24 billion International Thermonuclear Experimental Reactor in France was under question in the European Parliament. The project aims to develop a new source of energy through fusion of hydrogen atoms—the same process that powers the sun—but it has run far over the original budget.

Also on the chopping block are about $6 billion in annual U.S. subsidies for corn ethanol production. After proposals to cut these subsidies flat-out, a bipartisan group of farm-state senators made a counter-proposal of a gradual phase-out.

The U.S. Energy Information Administration, a key source of data on the country’s energy production and supplies, is also being forced to cut back, canceling many of its data collection efforts, including its annual compilation of national oil and gas reserves. The cuts could also hurt energy efficiency efforts, since the Administration is suspending updates to its widely used National Energy Modeling System, and canceling its Commercial Buildings Energy Consumption Survey.

Feds Push Emissions Cuts, Clean Energy

In other areas, the federal government is expanding efforts on clean energy and efficiency, with the first scorecards on energy and environmental performance, following the adage “you can’t manage what you don’t measure.” President Obama earlier set goals for 2020 of cutting federal greenhouse gas emissions from buildings and fuels by 28 percent, and indirect emissions (such as from flights) by 13 percent. The new scorecards suggest some progress toward that goal; compared with its 2008 baseline, they found a 2.5 million metric ton reduction in carbon dioxide.

Energy efficiency in buildings could also get a boost with the U.S. Environmental Protection Agency’s “Battle of the Buildings,” a competition to cut energy use drastically and cost-effectively. This year, 245 buildings are vying for the title, compared with just 14 last year.

U.S. government action on clean energy may expand nonetheless, with a new Senate bill proposing to create a new Clean Energy Deployment Administration to help finance renewable energy projects. Sen. Jeff Bingaman said in a statement on the bill, “We need to find a way to pay for [it].”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Obama’s Popularity and the Next Election may be Tied to Gas Prices

The Nicholas Institute for Environmental Policy Solutions at Duke University

Whenever prices at the gas pump soar, President Obama’s popularity takes a hit, he suggested at a private fundraising event—and which is backed up by a recent poll. House Speaker John Boehner argued high gas prices could even cost Obama the 2012 election.

Obama argued the long term solution is clean energy, but to try to help in the shorter term, though, the administration launched two new efforts. The Justice Department will conduct a probe into speculation in oil trading, to see if it is inflating oil prices, as Obama has claimed before. Also, a new federal program will aid homeowners in getting loans to pay for improvements that boost energy efficiency. “We’re making it easier for American homeowners to save money by saving energy,” Energy Secretary Steven Chu said.

A “Crazy and Unsustainable” Policy

With the 2012 Presidential elections approaching, some Republican hopefuls have lit into Obama’s approach to energy. To help with high oil prices, last week Donald Trump supports Libyan intervention if the U.S. can take their oil. This week, former Minnesota Governor Tim Pawlenty called for opening drilling in the Arctic National Wildlife Refuge as well as more offshore wells, while saying  Obama “sat on his hands” regarding drilling in America.

Despite calls to boost domestic fossil fuel production, “it is simply crazy and unsustainable to continue to subsidize the oil-and-gas companies when we need to reduce our deficit and invest elsewhere,” said White House Press Secretary Jay Carney. Several major oil-and-gas companies should report significant profit, according to the Associated Press.

Since the 2009 G20 meeting, Obama has been pushing for an end to fossil fuel subsidies around the world. Obama may be gaining traction on this issue, with Speaker Boehner saying oil companies “ought to be paying their fair share” of taxes.

Who Resurrected the Electric Car?

Electric cars have been resurrected, with the maker of the 2006 documentary “Who Killed the Electric Car” to film a follow-up, “Revenge of the Electric Car.”

While electric cars are still a minuscule slice of the auto market, the market continues to shift in larger ways, according to a new report. As the economy has recovered somewhat from the Great Recession, sales of most kinds of cars have risen. But sales of small cars, hybrids, and diesels (which are often fuel efficient) are growing much faster than car sales as a whole. Compared to the first quarter last year, this year sales jumped roughly 25 to 45 percent for various classes of more efficient cars, but rose only 7 percent for SUVs.

Western Water Woes to Deepen

Water supplies in the Western U.S. will only get tighter as climate change worsens, according to a new report from the U.S. Department of the Interior, which billed it as “the first consistent and coordinated assessment of risks to future water supplies across eight major … river basins,” including the Colorado, Rio Grande and San Joaquin. Flows in these three basins, the government report said, are likely to decline by 8 to 14 percent by 2050—a time frame in which future warming is largely already set by past emissions. In California, however, there’s large uncertainty about the impacts, making planning all the more difficult.

When it comes to moisture-loving fungi, climate change is already changing landscapes. Truffle-hunting dogs have turned up troves of the valuable fungi in Germany, where they were never known to exist before, a new study reports. Although the study was on expensive edible fungi, the findings could have much wider implications. “Without fungi, plants don’t work,” the study leader, a fungal ecologist, told Wired Science. “We know climates are changing and that fungal habitats are shifting. What we’re not certain about are the effects.”

Nuclear Power Protests Mark Chernobyl Anniversary

With progress slow on controlling Japan’s damaged nuclear power plants, farmers from the area protested against nuclear power, and thousands protested in France and Germany against nukes in their countries.

Meanwhile, NRG Energy announced it is pulling the plug on a nuclear power plant it was building in Texas.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Obama Aims for Elusive Goal of Energy Independence

The Nicholas Institute for Environmental Policy Solutions at Duke University

On Wednesday President Obama set a goal to cut oil imports by one-third in the next decade. It’s a goal, he acknowledged, that echoes calls for energy independence from every president since Nixon. But it’s time for the country to “finally get serious about a long-term [energy] policy,” Obama said.

One of the first steps, he said, is to boost domestic oil and gas production—in line with Republicans’ “drill, baby, drill” refrain that’s called recently for expansion of offshore drilling. The country will likely hear more from the administration about this, since a White House official told reporters on Tuesday that Obama’s speech is the beginning of a new “concerted focus on energy.”

Drastically reducing oil imports would be a historic turn, since imports have been on the rise in recent months—and have risen sharply over the past 40 years, as domestic oil production has fallen since its peak in 1970. From more than a dozen countries scattered around the world, the U.S. imports about 9 million barrels per day—about two-thirds of the oil it consumes, and about one-seventh of the oil produced outside its borders.

Andrew Revkin’s Dot Earth blog has a full transcript of Obama’s speech.

Blueprint for Innovation

The administration’s 40-page “Blueprint for a Secure Energy Future” shares details of other proposed measures, including cars with better fuel efficiency, increased ethanol production, and more clean energy. It calls for boosts in efficiency—but actual cuts in total energy use are hard to come by, a new U.S. Energy Information Administration report points out, as increasing numbers of gadgets have eclipsed efficiency gains.

The blueprint also calls for building a “smart grid,” but California utility PG&E has had a rocky start with its roll-out of smart meters. Some customers have feared the meters’ radio signals would harm their health, and now PG&E will disable the radio transmitters—but those customers will have to pay for manual readings.

While Obama’s energy blueprint calls for putting many well-established technologies into place, research continues on several cutting-edge energy-related technologies. Advances were announced last week on an “artificial leaf,” which uses sunlight to split water, creating hydrogen fuel. Meanwhile, the U.S. and U.K. announced $10 million in new grants for research aimed at improving on natural leaves to boost food and biofuel production.

Meanwhile, the U.S. Department of Energy is aiming to boost innovation with a new effort, “America’s Next Top Energy Innovator,” which will reduce costs and paperwork for start-ups to license patents.

U.S. states have continued to lead the way, with California’s Assembly passing one of the world’s most aggressive renewable energy standards, calling for a third of the state’s electricity to come from renewable sources by 2020.

In general, though, the U.S. is lagging on clean energy funding, falling behind China and Germany, according to a Pew Charitable Trust report. The report pointed out global clean energy investment is on the rise, reaching $243 billion in 2010, a new record high. China has also begun using a voluntary carbon trading system called the “Panda Standard.”

Germany’s Nuclear Fallout

The fight to control nuclear power plants in Japan continued, and the country may have lost the race to save one reactor from a meltdown, the Guardian reported.

In the wake of Japan’s disaster, Germany has been the country to change policies most drastically, with the Green Party toppling the conservative Christian Democrats in a major state election, and politicians calling to permanently shut half the country’s nuclear plants. The European Union’s energy commissioner said this nuclear backlash will mean more reliance on coal.

Juicing Up Cars

Meanwhile, with oil prices remaining high—hovering well above $100 a barrel—the members of the Organization of Petroleum Exporting Countries (OPEC) are set to mark a milestone this year, said Fatih Birol, chief economist of the International Energy Agency, with oil exports bringing in more than a trillion dollars.

Despite high prices at the pump, sales of fuel-efficient cars have stalled, according to the U.S. Environmental Protection Agency. One complaint about electric cars has always been their limited range on a single charge, but Secretary of Energy Steven Chu forecast that in about five years electric cars will be able to go 300 miles on a charge.

Tesla Motors, manufacturer of an all-electric sports car, is taking U.K. auto show “Top Gear” to court over battery range. The car maker claimed the show’s negative review was libelous, alleging the part when the car’s battery ran out of juice and was pushed to a garage was faked.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.