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U.S. needs oil sands as surge from shale bonanza seen overdone

E85 consumption remains the same despite incentives

Scott Irwin and Darrel Good, University of Illinois | Updated: 06/19/2013

In a recent post we examined price relationships that would allow E85 to be priced equal to its energy equivalent value relative to that of E10. We concluded that retail E10 prices, wholesale ethanol prices, corn prices, and D6 RINs prices at the end of the first week of June were conducive for competitive pricing of E85 at the pump. A continuation of favorable price relationships could result in an increase in E85 consumption and help fill part of the gap between the RFS mandate for renewable biofuels and the E10 blend wall in 2013 and 2014. Here we examine recent trends to determine if there is evidence that E85 consumption is actually increasing or likely to increase in the near future. We examine the following trends in search of that evidence: Retail prices of E85 relative to the cost of E85, Retail prices of E85 relative to its breakeven energy equivalent value with E10, E85 consumption, and Total domestic ethanol consumption. Figure 1 shows the relationship between the weekly Midwest retail price of E85 and our calculation of the cost of E85 for the period from February 8, 2007 through June 13, 2013. Our model for the retail cost of E85 is calculated as: [(0.74 X (the wholesale price of ethanol - blenders credit) + 0.26 X the wholesale price of CBOB) + $0.75]. click image to zoom As in our other recent posts on E85 we assume that E85, on average, consists of 74 percent E100 and 26 percent CBOB. We also subtract the ethanol blenders' tax credit from the price of ethanol when the credit was in effect over the sample period, which is based on the assumption of full pass-through of the credit from blenders to ethanol producers. Without this assumption the retail cost of E85 is well-above the market price of E85 much of the time. Finally, we assume that the wholesale-retail spread for E85 is $0.75 per gallon. Figure 1 reveals that the

Text of the Federal Reserve's statement Wednesday

Last Modified: June 19. 2013 2:36PM
Associated Press

(AP) Here is the statement the Federal Reserve released Wednesday after its two-day policy meeting:

Information received since the Federal Open Market Committee met in May suggests that economic activity has been expanding at a moderate pace. Labor market conditions have shown further improvement in recent months, on balance, but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has strengthened further, but fiscal policy is restraining economic growth. Partly reflecting transitory influences, inflation has been running below the Committee's longer-run objective, but longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. The Committee sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken

Top White House climate adviser vows Obama will act soon

By Zack Colman - 06/19/13 10:32 AM ET

President Obama's top climate adviser on Wednesday vowed that “meaningful” action on global warming was coming soon.

Heather Zichal, the deputy assistant to the president on energy and climate change, said she didn’t want to get “in front of the big man” and unveil specific plans during an event in Washington, D.C., hosted by The New Republic.

She spoke broadly, however, of bolstering energy efficiency, expanding clean energy on public lands and using various “tools” -- including the Clean Air Act -- to address climate.

Zichal’s comments come as speculation grows that the administration is preparing sweeping climate change proposals. Bloomberg reported that Obama has told donors he will take action next month.

Capitol Hill has been left guessing what the White House is cooking up on climate, though Zichal's comments shed some light on the plan.

Rep. Henry Waxman (D-Calif.), the top Democrat on the House Energy and Commerce Committee, told The Hill on Tuesday that he understands Obama will reveal his actions “soon.”

“What they’re going to announce, I don’t know,” said Waxman, who recently joined Sen. Sheldon Whitehouse (D-R.I.) to discuss climate issues with White House chief of staff Denis McDonough.

But any climate measures from the president will likely face opposition from Republican lawmakers who are wary of further regulations they say hamper businesses.

Many Republicans also dispute or deny the scientific consensus that human activity is contributing to global warming. Some disagree altogether that growing greenhouse gas concentrations are baking the planet, or that the world is getting warmer.

Obama in his State of the Union address though vowed to act on climate change if Congress does not, saying it would be a second-term priority.

Zichal said the president is focused on “depoliticizing” climate policy as he prepares to roll out

Obama calls climate change the ‘global threat of our time’ in Berlin address

By Ben Geman - 06/19/13 11:51 AM ET

President Obama on Wednesday called climate change the “global threat of our time" in a speech in Berlin.

Amid signs the White House is getting ready to unveil new executive-level steps to curb greenhouse gases, Obama linked fighting climate change to peace and justice while calling for bold action.

“Peace with justice means refusing to condemn our children to a harsher, less hospitable planet," he said in a speech at Berlin's Brandenburg Gate. "The effort to slow climate change requires bold action.”

Obama touted his first-term work on green energy and boosting auto efficiency rules, but added: “We know we have to do more — and we will do more.”

The White House within the next few weeks is expected to outline executive actions to be taken by the Environmental Protection Agency and other departments.

Obama’s climate aide Heather Zichal previewed the plan in Washington, D.C., on Wednesday.

Obama said Wednesday that a global climate accord is needed.

“With a global middle class consuming more energy every day, this must now be an effort of all nations, not just some. For the grim alternative affects all nations — more severe storms, more famine and floods, new waves of refugees, coastlines that vanish, oceans that rise. This is the future we must avert,” Obama said.

“This is the global threat of our time. And for the sake of future generations, our generation must move toward a global compact to confront a changing climate before it is too late. That is our job. That is our task. We have to get to work,” he said, according to a White House transcript.

United Nations-led talks are aimed at striking a new global accord in 2015 that would come into force in 2020.

But negotiators face huge hurdles in crafting a binding deal that can win support from developed nations, emerging economies and poor nations most at risk from rising sea levels an

California considers tripling number of refinery inspectors 41 PHOTOS

Posted on June 19, 2013 at 10:35 am by Houston Chronicle
41 PHOTOS
By Jaxon Van Derbeken
San Francisco Chronicle

San Francisco — California would nearly triple the number of oil refinery safety inspectors under a proposal on the governor’s desk that backers say would help close regulatory gaps that federal investigators found played a role in the fire at Chevron’s Richmond refinery last year.

One of more than two dozen budget-related bills — all expected to be signed by Gov. Jerry Brown by the end of the month — would require Cal/OSHA, the state’s main agency overseeing refinery safety, to make refineries in California pay for at least 15 new plant safety inspectors. Four more would be hired with existing funds.

Currently, the state has just seven inspectors. The added help would bring the total to 26 under the new budget. Still, even a beefed-up staff would likely struggle, critics say, given the huge task of assuring safety at the state’s 15 oil refineries and 1,600 other chemical processing plants.

“Tripling their staffing means a slightly larger fraction is going toward what is needed for safety — but it’s a step in the right direction,” said Greg Karras, staff scientist for the Communities for a Better Environment advocacy group.

Federal investigation: Board calls for tougher rules on refineries

A spokesman for Western States Petroleum Association said the trade group representing California’s major oil refineries “stands ready to work” with Cal/OSHA, the governor and the Legislature “to ensure that there continues to be a robust and well-trained” refinery safety effort.

In an interim report in April, federal investigators blamed the Aug. 6 fire — caused by the rupture of a corroded pipe and which sent 15,000 people to seek treatment for breathing problems — on weak state oversight that left Chevron free to simply monitor rather than eliminate corrosion risks at its crude oil unit.

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Summary of Weekly Petroleum Data for the Week Ending June 14, 2013

U.S. crude oil refinery inputs averaged over 15.5 million barrels per day during the week ending June 14, 2013, 294 thousand barrels per day above the previous week’s average. Refineries operated at 89.3 percent of their operable capacity last week. Gasoline production decreased last week, averaging 9.1 million barrels per day. Distillate fuel production decreased slightly last week, averaging about 4.7 million barrels per day.

U.S. crude oil imports averaged over 8.4 million barrels per day last week, up by 586 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 7.8 million barrels per day, 1.3 million barrels per day below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 556 thousand barrels per day. Distillate fuel imports averaged 87 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.3 million barrels from the previous week. At 394.1 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.2 million barrels last week and are also above the upper limit of the average range. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories decreased by 0.5 million barrels last week and remained in the lower half of the average range for this time of year. Propane/propylene inventories increased by 3.5 million barrels from last week’s revised total of 49.7 million barrels, and are in the upper half of the average range. Total commercial petroleum inventories increased by 6.8 million barrels last week.

Total products supplied over the last four-week

URL at talkstock

Autism Tied to Air Pollution, Brain-Wiring Disconnection

By Elizabeth Lopatto & Nicole Ostrow - Jun 17, 2013 10:01 PM MT

Researchers seeking the roots of autism have linked the disorder to chemicals in air pollution and, in a separate study, found that language difficulties of the disorder may be due to a disconnect in brain wiring.

Researchers from Harvard University’s School of Public Health found that pregnant women exposed to high levels of diesel particulates or mercury were twice as likely to have an autistic child compared with peers in low-pollution areas. The findings, published today in Environmental Health Perspectives, are from the largest U.S. study to examine the ties between air pollution and autism.

One in 50 U.S. children are diagnosed with autism or a related disorder, according to the Centers for Disease Control and Prevention. Children with autism may be unresponsive to people, become indifferent to social activity and have communication difficulties. A separate study from Stanford University and published in Proceedings of the National Academy of Sciences is the first to suggest that weak connections between brain regions for speaking and reward may be why.

“There isn’t a lot of data to strongly point at what are the root causes of the social deficits in children with autism,” Daniel Abrams, a postdoctoral research fellow at Stanford University in California, said in a telephone interview. “We think it has this important motivation and reward component to it.”

The cause of autism isn’t known, though genetic factors are thought to be important, according to the National Institutes of Health.

Previous Findings

The link to air pollution was initially made in 2006 by a group led by Gayle Windham at the California Department of Health Services. Another study, published in November 2012, also found links between air pollution and autism.

“People were skeptical” of the initial report from Windham’s group, said Marc Weisskopf, an

Another Hybrid Wind Power Plant Opening in Germany

Jun 18 2013 Published by Karl-Friedrich Lenz under European and German energy law

From this tweet by the always excellent Energiewende Germany I learned about an article titled “Hydrogen plant starts storing wind energy in Germany“.

As is clear from the title, this is another project to use wind energy in times where demand can’t keep up with supply to make some hydrogen from water. That is the future for storage of surplus renewable energy, since the existing infrastructure can store massive amounts of hydrogen gas.

The German existing gas infrastructure could handle storage of up to 200 TWh, which is much more than the about 30 TWh an electricity system of 100% renewable would need. But to get that capacity, people need to start building these kind of plants that store electricity from wind or solar as hydrogen. We still have a decade or two to go until renewable gets to 100%, but it is still a good idea to start early.

Enertrag has opened the first plant like this in 2011. At the time with a capacity of only 500 kW. The new plant reported on in that article has 2 MW. And it is operated by E.ON, one of the “big four” German utilities that used to show no interest in renewable energy and leave the investment in the sector to citizen projects.

As the article notes, only about 50% of the energy from the surplus electricity can be stored in hydrogen.

But that is of course not a problem. In the many time slots where demand can’t keep up even now, the electricity would be wasted anyway. And in the few time slots without wind and solar available (the occasional cold November night) that stored energy will have a very high value on the market.

Over this weekend, many countries in Europe saw negative electricity prices, with France and its inflexible nuclear plants reaching minus 4 cent per kWh. People were paid good money if they used electricity, helping to reduce the supply overload. In such a tim

Forecast: Cost Of PV Panels To Drop To $0.36/Watt By 2017

June 19, 2013 Nicholas Brown

The cost of photovoltaic solar panels is expected to drop another 36 cents per watt by 2017, according to new research by cleantech market research firm GTM Research.

While this drop in solar panel prices will help to make solar affordable to more people, which will increase the size of the solar market, this ongoing cost reduction means much more than that.

Currently, solar panels are backed up by natural gas and various other types of power plants on the electricity grid. However, solar panel costs of $0.36 per watt make it more feasible to install additional solar panels to back each other up instead of using any other type of power plant (for off-grid setups), reducing the need for batteries.

For example: If you need 1,000 watts of power, and your 1,000 watt solar panel generates only generates 50% of its capacity (500 watts) due to cloudy weather, that can be compensated for by using two of those 1,000 watt panels instead of one, so you could still draw 1,000 watts from that 2,000 watt (nameplate capacity) array.

As long as the solar panel array is generating more current than is being drawn from it, there is no power disruption or power fluctuation (provided that voltage regulation is used).

Each 1,000 watt panel would cost $360 without factoring in installation costs, but they would last about 6 times longer than batteries.

Assuming the batteries required are charged at their recommended rate, they would end up costing $1,980 and they would have to be replaced more frequently than the extra solar panel — plus, there is an installation fee for the batteries as well, except for DIY people.

Suddenly, that $360 sounds good. Even after factoring in the fees required to install that extra panel, it is likely still much cheaper than expe

Graph of the Day: Why the fossil fuel industry hates renewables

By Giles Parkinson on 18 June 2013

This article follows on from our story yesterday on Alinta, and the complaint by CEO Jeff Dimery that wind energy is “undermining the running regime of exiting thermal generation assets”. There is no doubt that it is. But while some could argue whether this is a good thing (early retirement of ageing polluting assets in a clean energy transition) or a bad thing (stranded assets, loss of value), it seems that it is inevitable as the world transitions to an energy system based around renewables.

This series of graphs – taken from an expansive presentation of energy data collected by Germany’s Franhofer Institute for Sustainable Energy – gives some insight into why the owners of fossil fuel plants hate this scenario. The growing impact of wind farms and solar panels in Europe, and in Germany in particular, are having a massive impact on energy markets – and the impact is very much more an economic one than a technical one. The same is true in Australia, as we discussed yesterday.

The first two sets of graphs represent the electricity output in Germany in weeks 3 and 4 of 2013, from January 14 to January 27. This is the way the fossil fuel generators would like the market to be. Demand is constant, the nuclear and brown coal generators operate with minimal variability, and even black coal generators enjoy relatively stable demand (and revenue) for most of the working week.

Gas is switched on and off as demand fluctuates (mostly between day and night), and the contribution of hydro, wind and solar is minimal. This mixture of baseload, peak load and some variable renewables is the way that most energy markets have worked for the past few decades.

Now let’s fast forward to just a few weeks ago. These next two graphs (below) tell us what happened in weeks 22 and 23, from May 27 to June 9. Germany’s 33GW of solar PV is now powering up, and larger fluctuations of wind pow

States warn EPA: Don't let lawsuits force new regulations

By Julian Hattem - 06/18/13 06:01 PM ET

A bipartisan group of state attorneys general are warning environmental regulators not to let threats of lawsuits force the release of new rules for carbon emissions from power plants.

Officials from 21 states sent a letter to acting Administrator of the Environmental Protection Agency (EPA) Bob Perciasepe claiming that threats to sue the agency for delaying the rules have "no legal merit" and should be ignored.

"Appropriate process should not be subjugated, and effective policymaking cannot be forced to fruition, by threatening litigation," the attorneys general write.

The signers fear that threats from 11 states, the District of Columbia and three environmental groups will force the EPA to issue delayed power plant emissions standards, a practice termed "sue and settle." Republicans and business groups claim that the tactic has allowed environmental organizations to force rushed regulations that are developed as court settlements behind closed doors.

In April, the states, D.C. and the environmental organizations separately notified the EPA that they were prepared to sue the agency within 60 days over delay of the rules.

The EPA proposed carbon emissions standards for new power plants last April, but has not yet finalized the rules. Climate advocates also want EPA to require standards for currently operating plants.

In their letter, the 21 attorneys general refute the other states' claims and assert that the EPA is only required by the Clean Air Act to update its standards "if appropriate."

"We therefore request that EPA refrain from allowing petitioners to unduly influence the policymaking process via settlement negotiations," they write.

This week, the states and environmental groups announced that they were delaying their lawsuits in response to indications that the White House will unveil a major climate change plan in July.

Attorne

US to open direct peace talks with Taliban

By Jeremy Herb - 06/18/13 08:21 PM ET

The Obama administration will open direct peace talks with the Taliban in Qatar in the next few days.

The startling announcement Tuesday came the same day four Americans were killed during a rocket attack at Bagram Air Field, outside of Kabul.

U.S. and NATO forces handed over the lead on combat operations in Afghanistan to Afghan security forces separately on Tuesday.

President Obama, who has made ending the decade-long Afghanistan War a priority, sought to tamp down expectations for the talks, while Republicans greeted the announcement with skepticism.

“This is an important first step toward reconciliation, although it is a very early step,” Obama said at the G-8 summit in Northern Ireland on Tuesday. “We anticipate there will be a lot of bumps in the road.”

Sen. Lindsey Graham (R-S.C.), however, argued the U.S. should not begin talks until the Taliban have been militarily defeated and the Obama administration has clearly defined its post-2014 U.S. troop presence.

“Talking to them now, before we make a commitment about a post-2014 footprint, is giving them a wrong signal,” Graham told reporters Tuesday. “The best way to talk with the Taliban is ensure them you will defeat them on the battlefield, and they’re not assured of that.”

Obama, who just weeks ago vowed to turn the page in the U.S. “war on terror,” said the process would not be “easy or quick” and would be pursued “in parallel with our military approach.”

“We, in the meantime, remain fully committed to our military efforts to defeat al Qaeda and to support the Afghan National Security Forces,” Obama said.

Officials emphasized talks would take place between the Afghanistan government and the Taliban, with the U.S. playing a side role.

“The core of this process is not going to be the U.S.-Taliban talks — those can help advance the process — but the core of it is going to be negotiations among Afghans, and the l

Critics challenge Obama administration’s plan for natural gas exports

Posted on June 18, 2013 at 3:55 pm by Jennifer A. Dlouhy

Pipelines run from the offshore docking station to four liquefied natural gas (LNG) tanks at the Dominion Resources Inc. Liquefied Natural Gas facility in Cove Point, Md. A domestic natural gas boom already has lowered U.S. energy prices while stoking fears of environmental disaster. Now U.S. producers are poised to ship vast quantities of gas overseas as energy companies seek permits for proposed export projects that could set off a renewed frenzy of fracking. (AP Photo/Matt Houston, File)
Pipelines run from the offshore docking station to four liquefied natural gas (LNG) tanks at the Dominion Resources Inc. Liquefied Natural Gas facility in Cove Point, Md. (AP Photo/Matt Houston, File)

Lawmakers and energy industry representatives were critical of the Obama administration’s approach to natural gas exports on Tuesday, with at least one trade group accusing the government of violating federal law in reviewing applications to sell the fossil fuel overseas.

At issue is the Energy Department’s decision last December to give priority to companies that had already launched a pre-filing process with the Federal Energy Regulatory Commission as part of their bids to build facilities to liquefy natural gas so it can be shipped overseas. The Energy Department is vetting those export applications individually; FERC’s role is evaluating the physical facilities.

Companies need both approvals to build the export terminals and start selling gas to countries that don’t have free-trade agreements with the United States. So far, just one firm — Houston-based Cheniere Energy — has cleared both hurdles, for its Sabine Pass liquefaction project in southwest Louisiana.

The goal of the Energy Department’s approach was fairness, insisted Christopher Smith, the assistant secretary for fossil energy, during testimony before a House subcommittee Tuesday.

“W

China 'Hair Stockings' May Help Scare Off 'Perverts,' Everyone (PHOTO)

The Huffington Post | Posted: 06/17/2013 4:18 pm EDT | Updated: 06/18/2013 2:14 pm EDT

This might be the strangest way of keeping aggressive men at bay, but we have to give it major points for being clever.

"Super sexy, summertime anti-pervert full-leg-of-hair stockings, essential for all young girls going out," @HappyZhangJiang describes the item on China's popular microblogging service, Sina Weibo.

They remind us somewhat of the less playful, more functional "anti-rape" lingerie developed recently by three engineering students in India. That garment is wired to deliver an electric shock to sexual attackers and can send an alert message, with GPS coordinates, to the attacked woman's friends and family.

The idea behind the hair stockings, we're guessing, is that lewd gropers wouldn't come anywhere near you. Tongue-in-cheek, but inventive nonetheless.

huffingtonpost

House passes controversial late-term abortion ban

By Pete Kasperowicz - 06/18/13 06:45 PM ET

The House voted Tuesday to impose a nationwide ban on abortions after 22 weeks of pregnancy, over Democratic objections that the bill represents a dramatic attempt by Republicans to restrict abortion rights.

As expected, the vote fell out mostly along party lines. The Pain-Capable Unborn Child Protection Act was passed in a 228-196 vote — just six Democrats voted for it, and six Republicans opposed it.

With limited exceptions, the legislation would ban the abortion of a fetus younger than 20 weeks old, or at 22 weeks of pregnancy under a different measuring system. The ban would be backed by possible fines against doctors, as well as prison sentence of as many as five years.

[color=#00CC00][b]As controversial as the bill is, however, today's House vote likely ends the process in Congress, as the Democratic Senate is not expected to consider it at all. President Obama threatened to veto the measure on Monday.[/b][/color]

Debate on the bill was tense on the House floor from the start, when Democrats asked why Rep. Marsha Blackburn (R-Tenn.) — who does not sit on the bill's committe of jurisdiction — was managing the bill. Judiciary Committee Chairman Bob Goodlatte (R-Va.) said it's acceptable under the rules of the House to allow "appropriate" people to manage the bill.

But several Democrats suggested it's because the sponsor of the bill, Rep. Trent Franks (R-Ariz.), made the controversial comment last week that rape usually doesn't result in pregnancy. Franks is on the Judiciary Committee, but he never spoke about his own bill during the hour-long debate.

They also said it was because Republicans have no women on the committee of jurisdiction and wanted to put a woman's face on the bill; Republicans never answered that charge.

Democrats said the lack of any input from women on the committee showed in the final product, and argued that the final bill is based on

Top industry lobbyist says US oil and gas production could grow even more

Posted on June 18, 2013 at 12:23 pm by Harry R. Weber

American Petroleum Institute chief Jack Gerard said Tuesday that U.S. gas prices and the unemployment rate would be higher if not for the tremendous growth in oil production in America over the last few years.

Gerard asserted during a meeting with the Houston Chronicle editorial board that keeping those measures from worsening is as important as creating a jobs boom and reducing pump prices.

“Think of what the unemployment rate would be if we didn’t have the job growth we are already seeing,” Gerard said. “We need to put it in context and think how much worse it would have been if not for what has been happening over the last four or five years.”

EIA: US daily crude supply could surge to 10M barrels by 2040

During his eight years in the White House, former President George W. Bush invoked a standard refrain during each of his State of the Union addresses: America is way too dependent on foreign oil.

In his 2005 address, at a time when the unemployment rate was at 5.2 percent and the country had just come off a year in which 2.3 million new jobs were created, Bush said enacting his pro-energy industry policies was “essential to expand this economy and add new jobs.”

Eight years later, the U.S. is producing record amounts of oil, energy firms are expanding their operations and the country is on a path to one day in the not too distant future becoming energy independent. Yet, the unemployment rate is at 7.6 percent and the country, through the first five months of the year, is on pace to add only about 2 million jobs in 2013.

Eagle Ford: Carrizo Oil & Gas hikes oil production projections

Gerard argued that there exists today a great opportunity to make the promises of the past come true. He urged the current administration to stand with the industry, rather than against it.

“If you want to see the energy performanc