Clean Energy Coming, Gas Prices Rising
Daniel Yergin is the Pulitzer-winning oil historian/author of The Prize, chairman of Cambridge Energy Research Associates (CERA) and a steadfast energy optimist. Peakist wags at The Oil Drum have defined a "yergin" as CERA's predicted long-term oil index price of $38/bbl. Oil prices currently hover around 2.7 yergins, but Yergin and CERA still carry a lot of weight in the energy consulting biz. US News & World Report's "Beyond the Barrel" blogs that Yergin now sees renewable energy as a serious player in energy markets. Speaking at the Washington International Renewable Energy Conference, Yergin told attendees, "We are going through a period of what I call the 'great bubbling,' a high degree of innovation all across the energy spectrum… This is boosting the competitiveness of renewables and efficiency, and is also evident in terms of conventional energy." CERA forecasts that so-called clean power could supply between seven and 16 percent of the world's electric needs by 2030. That's a significantly greater percentage than U.S. government forecasts of 4.2 percent (which blithely include ethanol as clean energy). Meanwhile, gas prices continue to escalate. The AP reports they've ascended by near-as-dammit a dime in the last two weeks.
Around Columbus it has gone up about a dime or so. John
The Prize is a great read. Bottom Line: the quest for oil is the root of all evil.
CarShark - That's the $64,000 question. Unfortunately, it's like any bubble: we won't know how inflated prices were until they stop dropping. (For instance, we still don't know how inflated housing prices were in 2005, and we probably won't know for at least another year.) But I think the answer will be that the effects of speculation are less than we wish they were. The fundamentals are in place for long-term high oil prices. Demand is increasing in Asia, and new drilling is barely keeping up with depletion rates of current wells - and at any rate, most of the oil being discovered now is under miles of water, where it will never be cheap to produce. Such discoveries insure an ample supply of $150-a-barrel oil, but probably aren't cost-effective at $50 a barrel. The only thing I see bringing oil back below $50 a barrel is a worldwide recession - which of course will occur if oil prices stay high enough for long enough.