I don’t generally use this column to discuss the projects that I am working on. In fact, it’s been more than 2 years since I did. But I often get inquiries about where I am and what I am doing, so in today’s column I thought I would update readers who may be interested.
Since I graduated from Texas A&M in 1995 with my master’s degree in chemical engineering, I have worked for 5 companies in 10 different locations — including 3 foreign countries. Most of my work has been on energy projects. I am not going to run through my entire career here, but I will explain what brought me to my current job. If you want a full accounting, please refer to my CV.
From 2009 to 2014, I worked for a company in Hawaii called Merica International. Merica was essentially a holding company for a German entrepreneur who lived in Hawaii and invested in energy companies and technologies. Most of the published biographies for me still list Merica as my employer. In my role as Chief Technology Officer for Merica, I had the responsibility for conducting due diligence and making investment recommendations. When I joined the company, one of the major holdings was the German company Choren, which produced diesel from biomass. I first wrote about Choren back in 2008 before joining Merica. Long story short, as is often the case with new technology, startup issues dragged on and on and we finally made the decision to shut the plant down. I documented the timeline for these events in What Happened at Choren? CONTINUE»
Another Clinton Administration Likely
I know some people cringe at the idea, but Hillary Clinton is the current favorite to win not only her party’s nomination, but the presidential election in 2016. An online Irish bookmaker lists Hillary at 11/8 odds to win the presidency, followed by Jeb Bush and Donald Trump at 9/2 odds, and then Bernie Sanders, Joe Biden, and Marco Rubio at 8/1 odds. (You can even bet on Kim Kardashian at 1,000 to 1 odds of winning the 2016 presidential election).
Some will argue that her unfavorable ratings are too high, but all of the leading candidates have significant negatives of one kind or another. I imagine that Hillary Clinton versus Donald Trump could result in the highest voter turnout in U.S. history — much of it from voters trying to keep the opposing candidate out of office. Others have argued that someone will rise up and knock Hillary out of the lead. That was my exactly feeling 8 years ago during the Democratic primaries when Hillary was in the lead — that Barack Obama would not only win the party’s nomination but would go on to win the presidency. I felt like he could beat McCain, but I didn’t think Hillary could have beaten McCain in 2008. But I don’t see a Barack Obama in the wings this time around. I think it’s Hillary’s election to lose, even though a large fraction of the population loathes her.
Hillary on Energy
Given the circumstances, let’s take a look at Hillary’s energy proposals. As I pointed out during the 2008 election campaign, her energy policy proposals have been rife with pandering and flip-flops. Of course they all do it to some extent. John McCain wasn’t above a bit of both, flip-flopping on ethanol and pandering by proposing a cut in gasoline taxes leading up to the election. CONTINUE»
Photo Credit The Environmental Blog
Volkswagen was just caught cheating on emissions tests for some of its diesel-powered cars. As a result, their stock price has plummeted. I no longer have to deal with emissions tests because we own a 2006 Prius and a 2011 Leaf, neither of which require testing because one has a SULE (Super Ultra Low Emissions) rating and the the other doesn’t have a tail pipe.
You can’t fake acceleration or gas mileage, but apparently you can fake out emissions tests by installing software capable of detecting when an emissions test is being conducted (via the diagnostic plug in your dash board) that will lean out the fuel mixture and alter the timing (among other things) so the car will pass the test, returning it to normal when the test ends.
I was fooled. Following is a comment I made last year on this subject:
These are all valid points but controlling pollution is mostly a matter of innovation and engineering. You are not necessarily limited by thermodynamics. For example, compare the mileage of the very dirty 2006 diesel Jetta to the very clean 2014 diesel Jetta.
The Origins of Peak Oil Awareness
The scientific study of peak oil began in the 1950′s, when Shell geophysicist M. King Hubbert reported on the evolution of production rates in oil and gas fields. In a 1956 paper Hubbert suggested that oil production in a particular region would approximate a bell curve, increasing exponentially during the early stages of production before eventually slowing, reaching a peak when approximately half of a field had been extracted, and then going into terminal production decline.
Hubbert applied his methodology to oil production for the Lower 48 US states and offshore areas. He estimated that the ultimate potential reserve of the Lower 48 US states and offshore areas was 150 billion barrels of oil. Based on that reserve estimate, the 6.6 million barrels per day (bpd) extraction rate in 1955, and the 52.5 billion barrels of oil that had been previously produced in the US, Hubbert’s base case estimate was that oil production in the US would reach maximum production in 1965. He also estimated that global oil production would peak around the year 2000 at a maximum production rate of 34 million bpd. CONTINUE»
Why Make Predictions?
While there are actually other stories unfolding in the world of energy, you would never know that by my inbox. Most of the correspondence I have received in the past week is still related to oil prices, particularly following the recent huge rally in crude futures. A few readers also wanted to make sure that I noticed that one of my 2015 predictions had fallen last week. I will address that in today’s column.
For background, each year in January I make predictions for the upcoming year, and I provide the context for those predictions. (See My 2015 Energy Predictions). I have been doing this for several years, and at the end of each year I grade my predictions. As I have stated on many occasions, context around a prediction can be more important than the prediction itself. When I grade the predictions, I will talk about the context when I made each prediction, and the reasons the predictions turned out to be right or wrong.
But one reader asked why I would even attempt to make predictions given such uncertain conditions. I make predictions to set up a narrative that describes what I see unfolding in the energy sector, incorporating as much data as I can into making each prediction. While this is not an investment column, I am aware that some readers use it for investment advice. So without overtly recommending investments, I generally try to make predictions that are actionable. I will give 2 examples of that today, one of which is the prediction that failed last week. CONTINUE»
The July announcement from Chevy of its upcoming $38K, 200-mile range Bolt electric car may be of similar historical importance to Nissan’s announcement back in 2011 of the Leaf.
As the price of West Texas Intermediate (WTI) retests the $40 per barrel (bbl) mark, some pundits are again calling for WTI to fall to $15 or $20/bbl. The same thing happened earlier in the year when crude prices tested $40. Lots of people predicted $20, the price went to $60, and the $20 crowd went quiet for a while. Well, they are back:
“There is no evidence whatsoever to suggest we have bottomed. You could have $15 or $20 oil — easily,” influential money manager David Kotok told CNNMoney. “I’m an old goat. I remember when oil was $3 a barrel,” said Kotok, whose clients include former New Jersey Governor Thomas Kean.
Yes, and you could get a candy bar and soda for a nickel. But I will bet him $10,000 we don’t see WTI at $15/bbl unless he has access to a time machine. Today I want to address this argument. I got into a debate on this topic with a person yesterday, and I am seeing enough of these predictions that I thought it warranted addressing. Again. The $20/bbl argument goes something like this: Crude oil inventories are extremely high. U.S. oil production keeps rising. Demand is falling. Something has to give. CONTINUE»
Last December the Energy Information Administration (EIA) released its latest estimate of U.S. Crude Oil and Natural Gas Proved Reserves. Although natural gas reserves rose, the real story was crude oil reserves. The EIA reported that U.S. proved reserves of crude oil and lease condensate had increased for the fifth year in a row, and had exceeded 36 billion barrels for the first time since 1975:
There are two reasons for this increase in proved reserves. The first is that despite >150 years of oil production in the U.S., new fields are still being discovered. In March 2015 the EIA released its update to the Top 100 U.S. Oil and Gas Fields as a supplement to the December report. This was the EIA’s first update on the Top 100 fields since 2009. The most significant addition to the list was the Eagleville field (in the Eagle Ford Shale), which was only discovered in 2009 but is now the top producing oil field in the U.S. In addition to the Eagleville, there were 4 other fields in the Top 100 that were only discovered in 2009. Several others in the Top 100 were discovered in 2007 and 2008.
But the largest additions to reserves weren’t via new discoveries at all. The largest reserves additions have been a result of rising oil prices, and this is a source of frequent misunderstanding on the topic on reserves. CONTINUE»
I recently recieved two emails on the same day; one about more palm oil plantations usurping yet another tropical ecosystem, this time for highly endangered African Gorillas instead of Indonesian Orangutans, and the other from my local Sierra Club asking me to urge my elected representatives to reject a transportation funding bill that would not allow our Governor to mandate the consumption of biofuels. Instead, I wrote a letter to the editor of the Seattle Times expressing my opposition to a biofuel mandate (which, of course, wasn’t published). I put a copy of that rejected submission at the end of this post as an example of what not to send to the Seattle Times Op Ed department. CONTINUE»
According to the recently-released BP (NYSE: BP) Statistical Review of World Energy 2014, the U.S. was the world’s largest and most diverse energy producer in 2014. The Statistical Review ranked the U.S.:
- #1 in oil production
- #1 in natural gas production
- #1 in nuclear power
- #1 in wind power
- #1 in geothermal power
- #1 in biofuels
- #2 in coal production
- #4 in hydropower
- #5 in solar power
The U.S. is clearly an energy production superpower, but we are an even greater energy consumer. Thus, despite the large amount of energy production, the U.S. is not energy independent. Our position as the #2 coal producer behind China (not coincidentally) mirrors our #2 position behind China in carbon dioxide emissions. And despite the rapid growth of renewable energy in both countries, carbon dioxide emissions in both countries rose in 2014 (to a new all-time record for China). CONTINUE»