In July, Brazilian airline GOL became the first airline to use a new type of biofuel to power a commercial flight. The fuel in question was farnesene, which is made from sugar cane. And like the ethanol in your gasoline, 10% of the Florida to São Paulo flight’s jet fuel was made of this biofuel. But this isn’t the only biofuel you could see taking flight in the future.
Read more at: Motley Fool
Troy Hilbish, a tool hand for the oilfield servicing company Schlumberger, says while he didn’t know oil prices have been falling, he does know what falling prices mean. “If the oil prices go up, we drill more,” Hilbish says. “If they go down, we don’t drill as much.”
Read more at: NPR
Elon Musk would rather wait to put out an eagerly awaited product than push one out that’s not awesome.
That was apparent from the language used in Tesla’s Q3 newsletter, published Tuesday (emphasis ours):
We recently decided to build in significantly more validation testing time to achieve the best Model X possible. This will also allow for a more rapid production ramp
compared to Model S in 2012.In anticipation of this effort, we now expect Model X [the company’s forthcoming SUV] deliveries to start in Q3 of 2015, a few months later than previously expected. This also is a legitimate criticism of Tesla – we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term. There are many other companies that do not follow this philosophy that may be a more attractive home for investor capital. Tesla is not going to change.
Tesla’s earnings beat analyst’s expectations, but some weren’t impressed by the pace of deliveries by the luxury electric-car maker. Tesla said it would deliver about 33,000 vehicles in 2015, lowering its estimate by 2,000. John Thompson, CEO of Vilas Capital Management, said on CNBC’s “Closing Bell” program that Tesla is “grossly overvalued … A company making 33,000 cars is worth half of Ford Motor Company today.”
Still, Tesla’s stock closed at $240.20 Friday, down 98 cents for the day, but up from $230.97 since Tuesday’s earnings report. Ford closed at $14.17, down 2 cents.
(Photo: Darren Brode, Shutterstock)
Since the oil plunge began in June, speculation has been rampant that the Organization of the Petroleum Exporting Countries might act to cut production to keep prices from falling further.
The 12-member OPEC cartel is due to meet Nov. 27 for a regularly scheduled meeting. But some officials with the group, meeting informally this week in Vienna, told The Wall Street Journal that a per-barrel price of $70 — from the current level of about $80 — would trigger action.
The paper’s story Friday said:
“At $70 a barrel, there will be panic in OPEC. We have become used to living with $100 a barrel,” said one OPEC official, speaking on the sidelines of the meeting.
Chevron spent more than $3 million to back three candidates for city council in Richmond, Calif. But voters rejected all three, in favor of candidates who have been critical of the oil giant, which is the largest taxpayer and employer in the Northern California city.
Richmond, north of Berkely, is about 45 minutes’ drive from San Ramon, to the south, which is the headquarters for Chevron. As Al Jazeera America reports:
For years, Richmond was known in the San Francisco Bay Area simply as a hub of high crime, pollution, and poverty. Politicians here had unabashedly close ties to Chevron — until 2008, most local elected officials were sympathetic to the company, which maintained a desk in the city manager’s office through the 1990s. But city politics began to change in 2004, when McLaughlin won a city council seat and then, two years later, became mayor.
The city has since risen into the national spotlight several times, partly because of [former mayor and Green Party member Gayle] McLaughlin’s willingness to take on Chevron, which is Richmond’s largest taxpayer and employer. Last year, the city sued the refinery after a 2012 fire sent thousands to area hospitals complaining of respiratory problems. “We don’t see Chevron as the source of keeping our economy going,” McLaughlin said defiantly at the time.
In response, Chevron has gone to great lengths to try to regain public sympathy, and to oust its opponents from local office. Earlier this year, the company launched its own online news outlet, the Richmond Standard, which offers both daily stories on local events and a section called “Chevron Speaks,” where the company posts its views. In the weeks before the election, the company plastered local billboards and stuffed residents’ mailboxes with ads attacking McLaughlin and her allies and supporting candidates backed by Moving Forward, one of its Richmond-based political action committees.
The campaign tactics seemed to have backfired, because all three candidates supported by Chevron lost. Now six of the seven spots on the Richmond council belong to Chevron critics.
The CEO of Oklahoma City-based petroleum producer Continental Resources is so certain oil prices will rise again that the company announced it has eliminated its oil hedges for all of 2015 and 2016.
Harold G. Hamm, whose company is the biggest oil producer in North Dakota’s Bakken oil-shale play, is “basically betting the company on the belief that oil prices won’t sink much more than the 25 percent decline they’ve experienced since June,” Forbes reported.
In its press release, which , Continental said that by eliminating its outstanding hedges, it had boosted its fourth-quarter profit by $433 million.
In the release, Hamm said:
“We view the recent downdraft in oil prices as unsustainable given the lack of fundamental change in supply and demand. Accordingly, we have elected to monetize nearly all of our outstanding oil hedges, allowing us to fully participate in what we anticipate will be an oil price recovery. While awaiting this recovery, we have elected to maintain our current level of activity and plan to defer adding rigs in 2015.”
I began what turned out to be a highly ranked leadership program for public officials at the University of Colorado in the early ’80s, as dean of the Graduate School of Public Affairs. I did the same for private-sector folks when I moved to Irvine, Calif., to run a leadership program involving Israeli startup CEOs for the Merage Foundations. Despite the different profiles of participants, one of the compelling themes that seemed pervasive to both — for- profits in Israel and governments everywhere — was and remains building the capacity of leaders to give brief, focused oral presentations or elevator pitches (or, as one presenter once said, “how to seduce someone between the first and fifth floor”). A seduction lesson in oil economics in a thousand words or three minutes’ reading time!
Now that I got your attention! Sex always does it! During the last few days, I read some straightforward, short, informative articles on oil company and environmentalist group perceptions concerning the relationship between the price of oil per barrel and the cost of drilling. Their respective pieces could be converted into simple written or oral elevator pitches that provided strategic background information to the public and political leaders — information often not found in the news media — press, television, cable and social media — concerning oil company or environmentalist decision-making.
This is good news. Most of the academic and, until recently, media coverage of the decline of oil and gasoline prices generally focuses on the dollar or percentage drop in the price of oil and gasoline from a precise date … 3 months, 6 months, a year, many years ago, etc. And, at least by implication in many of its stories, writers assume decision-making is premised on uniform costs of drilling.
But recently, several brief articles in The Wall Street Journal, MarketWatch, OilPrice.com, etc., made it clear that the cost of drilling is not uniform. For example, there is a large variation internal to some countries depending on location and geography and an often larger variation between and among oil-producing nations. Oil hovers around $80 a barrel now, but the cost of drilling varies considerably. In Saudi Arabia, it is $30 per barrel or less on average; in the Arctic, $78; in Canada’s oil sands $74; and in the U.S, $62.
If you’re responsible for an oil company or oil nation budget, a positive cash flow and a profit, you are likely to be concerned by increasingly unfavorable opportunity cost concerning costs of drilling and returns per barrel. In light of current and possibly even lower prices, both companies and nations might begin to think about the following options: cutting back on production and waiting out the decline, pushing to expand oil exports by lowering costs in the hopes of getting a better than domestic price and/or higher market share, lessening your investment in oil and moving toward a more balanced portfolio by producing alternative fuels. If you believe the present price decline is temporary, and that technology will improve drilling cost/price per barrel ratios, you might consider continuing to explore developing wells.
Up to now, the Saudis have acted somewhat counterintuitively. They have created dual prices. Overall, they have sustained relatively high levels of production. For America, they have lowered prices to hold onto or build market share and undercut prices related to U.S. oil shale. For Asia, they have increased prices, hoping that demand, primarily from China and India, and solid production levels in the Kingdom, will not result in a visible drop in market share.
However, the Saudis know that oil revenue has to meet budget needs, including social welfare requirements resulting in part from the Arab Spring. How long they can hold onto lower prices is, in part, an internal political and budget issue, since oil provides a disproportionate share of the country’s public revenue. But, unlike the U.S. and many other nations, where drilling for tight oil is expensive, the Saudis have favorable ratio between production costs and the price of oil. Again, remember the cost of production in the U.S., on average, is about 100 percent above what it is in Saudi Arabia and some other OPEC nations. Deserts may not provide a “wow” place for all Middle East residents or some tourists looking for a place to relax and admire diverse landscapes, but, at the present time, they provide a source of relatively cheap oil. Further, they permit OPEC and the Saudis to play a more important global role in setting prices of oil and its derivative gasoline than their population numbers and their nonoil resources would predict. Lowering prices and keeping production relatively high in the Middle East is probably good for the world’s consumers. But as environmentalists have noted , both could slow oil shale development in the U.S. and with it the slowdown of fracking. Both could also interest oil companies in development of alternative fuels.
Oil-rich nations in the Middle East and OPEC, which control production, will soon think about whether to lower production to sustain revenues. In the next few months, I suspect they will decide to risk losing market share and increase per barrel oil prices. U.S policy and programs should be recalibrated to end the nation’s and West’s often metabolic response to what the Saudis do or what OPEC does. Support for alternative replacement fuels is warranted and will reduce consumer costs over the long haul and help the environment. It will also decrease America’s dependence on Middle East oil and reduce the need to “think” war as a necessary option when developing America’s foreign policy concerning the Middle East.
Methanol is a bit of a mystery. It is the simplest form of a hydrocarbon, one oxygen atom attached to simple methane molecule. Therefore, it burns. Methanol is one of the largest manufactured trading commodities after oil, and has about half the energy value of gasoline (but its high octane rating pushes this up to 70 percent). It is a liquid at room temperature and would therefore fit right into our current gasoline infrastructure — as opposed to compressed natural gas or electricity, which require a whole new delivery system.
Methanol made from natural gas would sell for about $1 less than gasoline. Methanol can also be made from food waste, municipal garbage and just about any other organic source.
So why aren’t we using methanol in our cars? It would be the simplest thing in the world to substitute methanol for gasoline in our current infrastructure. Car engines can burn methanol with a minor $200 adjustment that can be performed by any mechanic. You might have to fill up a little more often, but the savings on fuel would be significant — about $600 a year. So what’s stopping us?
Well, methanol seems to be caught in a time warp. It is the dreaded “wood alcohol” of the Depression Era. Methanol is poisonous, as opposed to (corn) ethyl alcohol, which only gets you drunk. (In fact, commercial products such as rubbing alcohol are “denatured” by adding methanol so people will not drink them.) But if methanol is poisonous, so is gasoline, as well as many, many other oil products. Yet methanol is somehow caught up in old EPA regulations that make it illegal to burn in car engines — even though it is hardly different from the corn ethanol that currently fills one-tenth of our gas tanks.
Methanol’s main feedstock is natural gas, and for a long time that was seen as a problem. “Methanol wasn’t practical because the price of natural gas was so high and we seemed to be running out of it,” said Yossie Hollander, whose Fuel Freedom Foundation has been promoting the use of methanol for some time. “But now that natural gas prices have come down, it makes perfect sense to use it to make methanol. We could do away with the $300 billion a year we still spend on importing oil.”
The EPA actually granted California an exemption during the 1990s that allowed 15,000 methanol-powered cars on the road. The experiment was a success and customers were happy but natural gas prices reached $11 per million BTUs in 2005 and the whole thing was called off. Only a few months later, the fracking revolution started to bring down the price of natural gas. It now sells at $4 per mBTU. Yet, for some reason the EPA has not yet reconsidered its long-standing position on methanol.
At the Methanol Policy Forum last year, Anne Korin of the Institute for the Analysis of Global Security (IAGS), made a very insightful remark. “I think methanol fares poorly in Washington precisely because it doesn’t need any subsidies or government assistance in making it economical. For that reason you have no big constituency behind it and no member of Congress crusading on its behalf.”
That may be about to change, however. China has a million cars burning methanol on the road and wants to expand. In the past few weeks alone, Texas and Louisiana have been hit with what is being called “Methanol Mania.” The Chinese are planning to build six major processing plants to turn the Gulf Coast into the world’s biggest center of methanol manufacture. One project will be the largest methanol refinery in the world, two times the size of one located in Trinidad.
All this methanol is intended to be sent back to China. The Chinese want to employ it as a feedstock for their own plastics industry, plus use it in Chinese cars. They will be shipping it the expanded Panama Canal, which will be completed in 2015.
But at some point someone in this country is going to look around and say, “Hey, why don’t we use some of this methanol to power our own automobiles.” At that point the methanol industry, along with the Texas and Louisiana, may have enough political leverage to get the EPA off the dime and see a decision about using methanol in our cars as well.
(Photo credit: Stockcarracing.com)
The Wall Street Journal reports today that U.S. oil drillers are scaling back on plans to drill new wells, amid the plunge in global prices.
Nymex crude dropped 77 cents a barrel to $77.91 Thursday.
Crude is down more than 25 percent since June, making it much less profitable to drill for oil in shale-rock plays.
As WSJ (subscription required) notes:
Continental Resources Inc., a major oil producer in North Dakota’s Bakken Shale, said Wednesday that the company wouldn’t add drilling rigs next year. ConocoPhillips Co. said that next year’s budget would fall below the $16 billion spent this year, dropping plans for some new wells in places such as Colorado’s Niobrara Shale.
Pioneer Natural Resources Co. signaled that it might delay adding rigs in Texas unless oil prices rebound.
“We’re in a battle with Saudi Arabia in regard to market share,” Pioneer Chief Executive Scott Sheffield told investors Wednesday. The Irving, Texas, company hasn’t announced its drilling plans for next year, but Mr. Sheffield said they would hinge on where oil prices stand in the next few months.
A study at Columbia University indicates that children who were exposed to high levels of air pollution from vehicles while they were in the womb were five times more likely to develop symptoms associated with attention-deficit disorder later in life.
As Scientific American reports:
The study adds to earlier evidence that mothers’ exposures to polycyclic aromatic hydrocarbons (PAHs), which are emitted by the burning of fossil fuels and other organic materials, are linked to children’s behavioral problems associated with Attention Deficit Hyperactivity Disorder (ADHD).
About 10 percent of U.S. children are diagnosed with ADHD, which can impair classroom performance, as well as lead to “risky behaviors and lower earnings in adulthood,” the Columbia researchers wrote.
The study, led by Frederica Perera, an environmental health scientist at the school’s Mailman School of Public Health, looked at the children of 233 African-American and Dominican women in New York City.
More from SciAmerican:
They measured the amount of benzo[a]pyrene bound to DNA – a biological marker for PAHs – in the mothers’ blood at the time of birth. Forty-two percent had detectable levels in their blood.
When the children were about 9 years old, parents filled out a questionnaire commonly used to screen for ADHD behavior problems. The researchers found that children whose mothers had the highest amounts of the PAH at the time of birth were five times more likely to show more behaviors associated with inattention than children whose mothers had the lowest levels. They were three times more likely to exhibit more total behaviors (inattention, hyperactivity and impulsivity) associated with ADHD.
Read more on the Columbia website.
