Thursday, January 11, 2007

Exxon is coming to the table to negotiate on climate change

Exxon is signaling it's ready to negotiate on climate change and probably for its shareholders not a moment too soon. With Democrats trying to run Capitol Hill and California making significant strides toward reducing carbon emissions there and setting an example nationally, this could be the last big hurdle preventing a practical and market-driven policy to start reducing greenhouse gas emissions in the U.S.

Today's Wall Street Journal calls it a "subtle softening" but after funding dozens of skeptics to undermine climate change science, the move to the negotiating table is huge. Among the skeptics it has stopped funding is the Competitive Enterprise Insitute which last year ran TV ads saying carbon dioxide, the main greenhouse gas, is helpful to our environment. Exxon's pulled the plug on similar funding for at least five other skeptics this year.

Now comes the question of what type of carbon cap makes sense and what sectors of the economy and what types of companies should the cap apply to. Former Congressman Philip Sharp, now president of Resources for the Future, is quoted in the Journal piece saying Exxon now is "taking this debate very seriously."

climate change, global warming, Exxon, Congress, Resources for the Future, Philip Sharp, greenhouse gas emissions

Friday, January 05, 2007

Could demand for corn be twice as much as USDA estimated?

Earth Policy Institute eco-guru Lester Brown contends the demand for corn to fuel the growing number of ethanol distilleries throughout the midwest is twice as much as the U.S. Dept. of Agriculture estimated last February. He was quick to assert the emerging competition for corn between ethanol-blended fuels and food processsors could drive corn and other grain prices to record levels. And with that, in time, could come a consumer backlash against the ethanol industry and riots in lower-income countries that rely on grain imports.

The U.S. corn crop, according to a newly-released Institute study, accounts for 40 percent of the global harvest and supplies 70 percent of the world's corn exports. Brown called for a time-out on the licensing of new distilleries and a strategy to deal with the emerging food-fuel battle. "We need to make sure that in trying to solve one problem--our dependence on imported oil--we do not crate a far more serious one: chaos in the world food economy," Brown said.

ethanol, corn, Earth Policy Institute, Lester Brown, renewable energy

Policy makers willing to look beyond oil price slide

As spot and futures prices for crude oil -- $55 per barrel at this writing -- continue to slip due largely to warm weather in the eastern U.S. and parts of Europe, how much of a long-term vision will policy makers have in assessing the most productive ways to inspire sustainable energy investments? If they think lower energy prices negate the need, forward-thinkers need to stand up and persuade them otherwise.

$55 is an 18-month low on the New York Mercantile Exchange. Analysts agree the warm weather has more than offset recent OPEC production cutbacks. Pelosi said Democrats will work, according a Reuters report, to create "a new America that declares our energy independence, promotes domestic sources of renewable energy, and combats climate change."

oil prices, OPEC, renewable energy, Congress, Pelosi,

Thursday, January 04, 2007

$18 billion in U.S. rollbacks could fund alternative energy

As much as $18 billion in tax breaks could be in flux as the now Democratically-controlled Congress begins debate over how to boost "green energy" as today's Washington Post front-page story puts it. Solar Energy Indusry Association President Rhone Resch spotlighted the need to focus on 21st-century technologies by funding solar, wind and biofuels now and not later.

The three principal sources of money Democrats are eyeing include:
1. changes in future royalty payments on 1998-1999 leasesin the Gulf of Mexico, estimated to be as much as $11 billion; (see previous post on this blog);
2. rollbacks of myriad tax incentives for oil and gas producers, estimated to be $5 billion; and
3. changes in the treatment of exploration expenses from deductions taken the year they are incurred to capital expenditures spread out over the life of those assets; they are estimated to be as much as $2 billion.

Congress, energy, alternative energy, renewable energy, solar, wind power,Pelosi, biofuels, Resch