Energy Policy Information Center (EPIC)

100,000 Vehicles Closer to Energy Security

admin — Fri, 17 May 2013 20:20:25 +0000

Within the next few weeks, an unsuspecting car buyer will cross an important threshold, without even knowing it. Somebody will purchase the 100,000^th plug-in electric vehicle sold in the United States since the technology became commercially available at the end of 2010/early 2011. By our count, as of the end of April 2013, 95,234 plug-in vehicles have been sold. In the past few months, sales figures have exceeded 7,000 vehicles almost every month (with the exception of January and February which are typical annual lag-months for auto sales). It is entirely possible that the 100,000^th plug-in vehicle has already been sold.

The folks over at Plug-In America deserve credit for noticing this pending milestone, which demonstrates a major shift in how Americans are thinking about their personal transportation. So far, 100,000 families have chosen an alternative to the type of cars that they grew up with, and presumably, thought cars would always be. 100,000 families decided to choose an unfamiliar technology—and perhaps even pay more for it—because they believed in something better than gasoline. So far, they have been backed by the installation of 5,894 public charging stations, according to Department of Energy statistics. We don’t know how much fuel has been saved, but we know that it’s a lot, and that the number is growing. The road to 100,000 vehicles has not been as smooth and expeditious as some might have hoped, but there have inarguably been impressive accomplishments along the way. While not all of the startup companies which tried to tap into the electric vehicle movement are still producing EVs, the ones which have made it through the rocky initial stages are showing signs of progress and promise. The three biggest sellers—the Chevy Volt, Nissan Leaf, and Tesla Model S—are not only selling well now, but have set the stage for further market growth. The 2014 Chevy Volt, in addition to incorporating improved range and light-weighing technology, will be as much as ,000 cheaper than the 2013 model, and the Volt powertrain is being incorporated into an upcoming Cadillac model. Earlier this week, Nissan CEO Carlos Ghosn reiterated his support for the Leaf, and electric vehicles in general, while also expressing his long-term vision for an industry which thrives without incentives, based on the importance of the technology and consumer acceptance. Meanwhile, Tesla Motors’ share price has skyrocketed, the Model S Sedan has won Consumer Reports’ highest rating in history, and the company is selling shares in order to repay its Department of Energy Loan ahead of schedule. Furthermore, the public-private cooperation which has been so instrumental to the success of the electric vehicle movement continues. Just within the past week, AAA has launched a digital tool to help educate motorists about electric vehicles, while the State of Colorado extended its electric vehicle tax incentive through 2022, and expanded the definition of qualified vehicles to include plug-in hybrids such as the Volt. For a movement which has suffered so much negative press and naysaying, 100,000 vehicles is a huge accomplishment. Even in just the second year of the fledgling industry, the obituary was written many times, but our view is pretty straight-forward: this is only the beginning.

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

For decades, oil and gas development projects have enjoyed the benefits of a particular financing/taxing structure known as a Master Limited Partnership (MLP). MLPs—which originated in 1981, and have been used frequently by fossil fuel developers for oil, gas, coal, and pipeline projects ever since—are essentially a way to help attract private investment capital in a way which increases flexibility and reduces liability for investors and project developers. Some details courtesy of the U.S. Senate: “An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market. Whereas profit from publicly traded C corporations is taxed at both the corporate level and the shareholder level, income from MLPs is taxed only at the shareholder level because it is treated as a partnership for tax purposes. “An MLP consists of limited partners (investors) and general partners (managers). The limited partners — who can number in the thousands — provide capital and receive quarterly required distributions generally equivalent to shareholder dividends in a C-corporation. They play no role in the operation of the MLP, while the general partners manage the MLP's daily operations. General partners can take the form of another company or a group of individuals, typically holding a 2 percent ownership stake.” As of right now, MLPs are only used by “conventional” fossil fuel energy projects, and have been successful in this regard. The idea of expanding this structure to renewable projects is nothing new—in December 2011 when it appeared that public financing levels for renewable energy projects were aggressively debated (and some public instruments, such as the tax credit on corn-based ethanol production, were indeed ended) Third Way published a report on how expanding MLPs to include renewable energy projects provided an effective and inexpensive way to stimulate energy markets. More recently—and in the midst of a domestic production boom and a climate of fiscal austerity— Senator Coons of Delaware introduced the Master Limited Partnerships Parity Act, which simply extends the definition of qualified projects to include clean energy resources and infrastructure projects. “Specifically included are those energy technologies that qualify under Sections 45 and 48 of the tax code, including wind, closed and open loop biomass, geothermal, solar, municipal solid waste, hydropower, marine and hydrokinetic, fuel cells, and combined heat and power. The legislation also allows for a range of transportation fuels to qualify, including cellulosic, ethanol, biodiesel, and algae-based fuels, as well as energy-efficient buildings, electricity storage, carbon capture and storage, renewable chemicals, and waste-heat-to-power technologies.”

Now that you are a true expert on Master Limited Partnerships, there are three more important details to know about the MLP Parity Act: - The legislation has bipartisan support. The Heritage Institute released an Issue Brief last month stating “Congress should allow all energy project investors to form MLPs,” and legislators of both parties have voiced support for Sen. Coons’ bill. - Existing MLPs are not influenced. The parity act simply expands the definition which has been successfully written into the tax code to include more types of projects. - The legislation could do more to improve energy security. How? As currently written in the Tax Code, MLPs are already beneficial to domestic energy security because they create flexibility and capital for domestic energy projects. MLPs are restricted to certain types of energy projects by law—not by function. The first MLP was formed by Apache Oil Company in 1981 and the idea spread to other industries, such as restaurants and hotels. Formation of MLPs was limited to certain energy projects in 1987, and in the 2008 Emergency Economic Stabilization Act of 2008, was expanded to include biofuels. The MLP parity act would further update the law to include advanced biofuels (such as those from algae) which provide exciting opportunities to offset petroleum usage. However—while the MLP Parity Act is a common-sense measure to level the playing field between old and new forms of energy production, it should also include projects involving alternative-fuel vehicles and the materials needed to produce them. For example, as Tesla has demonstrated so well of late, the electric vehicle industry is new and dynamic, and this tax structure should be enabled for electric-vehicle production facilities (such as Tesla’s in Palo Alto, and Nissan’s in Smyrna Tennessee) which could also help encourage automakers to produce advanced vehicles in the United States instead of overseas. Furthermore, since MLPs already apply widely towards natural resource extraction projects, they should also be permitted for lithium mining projects, which can benefit the domestic production of lithium-ion batteries for EVs. These small additions to the MLP Parity Act would likely be in keeping with the intention of the legislation, while furthering its impact on our single most urgent energy issue—the monopoly of petroleum fuels in the transportation sector.

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Today saw a victory for energy security, electric vehicle owners, and the environment, as HB 1247, Colorado’s Innovative Motor Vehicle Tax Credit, was signed into law. While the State of Colorado is already an established leader in supporting adoption of electric vehicles, the new provisions in this bill extend the existing tax credit’s duration and apply it to plug-in hybrid vehicles such as the Chevy Volt and Toyota Plug-In Prius. Expanding the Innovative Motor Vehicle Tax Credit to these vehicles helps advance electric vehicle adoption and technology. Incentives such as this are needed because many drivers are turned off by the higher upfront costs of electric vehicles, in addition to being hesitant or unwilling to consider compromising the “range” of a gasoline car while battery and charging technologies continue to improve. Specifically, HB 1274 will:

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Robbie Diamond, Founder and CEO of SAFE and the Electrification Coalition, stated, “This bill will get more electric vehicles on Colorado roads and accelerate the transition away from oil and toward a diverse set of domestic fuels to power our transportation sector. That transition is good for consumers and local businesses alike, and will protect our nation from the economic and national security problems caused by oil dependence. Policy steps like this, combined with efforts like our Drive Electric Northern Colorado program, show that the state of Colorado is truly leading the way in the United States.” The Colorado tax credit of ,000 supplements a federal tax credit for electric vehicles of ,500. While both are beneficial individually, combined they create a truly impressive offset towards the higher initial costs of plug-in cars (it’s important to keep in mind that the costs of fuel and repairs for electric vehicles are far below their conventional counterparts; for full details, see the Drive Electric Comparison Calculator). Colorado’s clear leadership in supporting electric vehicle adoption was confirmed by a new study by the Southwest Energy Efficiency Project (SWEEP), which gives it an “A-“ grade for its state laws, showing that the state’s pro-EV policies make it a clear leader in the region. For more information about SAFE and the EC’s work in Colorado, visit DriveElectricNoCo.org, and follow @DriveElectricNC on twitter.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

In today’s Medium Term Oil Market Report, using stronger language than usual, the IEA said that it anticipates a “supply shock,” driven in large part by surging North American production and the light tight oil (LTO) boom. The agency believe this surge “could prove as transformative for the oil industry as was the rise of Chinese demand during the last 15 years.” What the media coverage has focused on (IEA sees U.S. oil shockwaves ousting OPEC as supply driver), (North American Oil Production to Dominate World Supply) thus far is a dramatic shift in the balance of power between the Middle Eastern production cartel (OPEC) and North America, in ways that are largely favorable to the United States. By the numbers: - Global oil demand growth will be modest, and average 1.1 mbd per year (1.2 percent) over the next five years, rising to 96.7 mbd by 2018. - Total global light-duty vehicle stock is projected to increase from 840 million vehicles in 2010 to over 1 billion by 2018. - Natural gas will start making inroads in transportation fuel demand, but will only reach 2.5 percent by 2018. - OPEC’s production capacity will rise by 1.75 mbd over the 2012-2018 period. - Global supply capacity will increase 8.4 mbd to 103 mbd by 2018, with 40 percent of the growth coming from American oil sands and LTO. - U.S. tight oil will grow 2.3 mbd by 2018, raising total U.S. crude output to 8.4 mbd. On balance, many of the changes this report discusses are generally favorable for the United States, and raise questions about how OPEC will manage its output moving forward. Even within the past six months, a number of significant events have undermined OPEC’s stability, with the two best examples being the terrorist attacks at the Algerian In Amenas facility which sidelined production while drawing international attention to greater security issues, and the continued failure to maximize Iraqi oil output. Projections regarding Iraq’s production have shifted significantly from the Special Report released in October 2012, which projected (in the High Case scenario) that Iraq’s production would reach 9.2 mbd by 2020, and 6.1 in the Central Scenario), yet the more tempered predictions in today’s report don’t anticipate production above 4.8 mbd until 2018. This is a significant downshift from the assessment of only 6 months ago, but is unsurprising based on continued setbacks including security issues, shortages of skilled workers, poor financial conditions offered to IOCs, and the infamous regional disputes between the KRG and Baghdad. It wouldn’t be surprising to see IEA walk back even further from the aggressively bullish projection put forward in the Iraq Energy Outlook. IEA also reports that the Iraqi government is looking to lower its production plateau target from 12 mbd in 2017 to 9 mbd in 2018—a dramatic downward revision straight from the horse’s mouth, reflecting the ongoing political and bureaucratic woes the country is facing. Thusly, it’s worth mentioning that while there will be slight production capacity increases occurring within OPEC, and North American LTO production will free up global supplies,, the fundamental dynamics of the market remain largely unchanged. That is: OPEC—and more accurately, Saudi Arabia—retains a significant enough share of global supply that the Kingdom maintains both the willingness and ability to buoy prices. Output fluctuations (left, from IEA’s April Oil Market Report) within the past few years are indicators of Saudi Arabia’s unparalleled ability to squeeze and contract its output. With production increases offset by growing emerging-market demand, the call on OPEC remains effectively unchanged through 2018, not falling below 29.1 (in Q2 this year, no less) and returning to at or above 30mbd for the remainder of the forecast period. Saudi Arabia has demonstrated its willingness to flex its production capacity by .5 mbd in as little as a month—and is presumably willing to do what is necessary to preserve the supply/demand dynamic which benefits its partners within OPEC by maintaining the prices it deems as “fair.” Therefore, it requires little “collaboration” among the cartel to manage global oil supplies, just the one swing producer to keep doing what it has done so successfully for so long.

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

“There is a better way. Rather than waiting for tomorrow’s technology, the federal government should use the tens of billions of dollars it spends today on trucking and delivery services to promote the alternative fuel technologies and fleets that currently exist. When energy security is on the line, the perfect need not be the enemy of the good. This is about smarter spending, not more spending. Additionally, the more encouragement today’s alternative fuel fleets and manufacturers receive from Uncle Sam, the stronger those alternatives are likely to become in the market, and the more able they will be to leverage any improved fuel technologies developed by a new R&D trust fund. And let’s start with trucking, one of the largest oil users, and a place where opportunity abounds. The United States has approximately 3.2 million heavy-duty trucks and 7 million medium-duty trucks. Together they burn 35 billion gallons of diesel per year – about 22 percent of the transportation sector’s total energy use.” In today’s Fuel Fix (the blogging arm of the Houston Chronicle), Gregory Staple and Brian Skretny of the American Clean Skies Foundation have written a great piece about how we can channel the money we already spend on federal fleets to reap energy security benefits. Take home message: as the private sector is already beginning to do, the federal government should leverage its own fleets and buying power to help scale-up alternative fuel technologies (and offsetting petroleum purchases/consumption, simultaneously). Many of the assertions and ideas in this piece are 100 percent true. Such as:

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

The piece sees this recommendation as the best immediate-term opportunity to gain some of the benefits which would be provided in the longer-term by the Energy Security Trust. As readers know, the Energy Security Trust is an idea proposed by SAFE in A National Strategy for Energy Security which was embraced by President Obama as a major legislative priority in his State of the Union earlier this year. As originally suggested by SAFE, the trust would expand oil drilling into currently restricted regions of Federal land and waters, and use some of the revenues to support research and development to improve technology of advanced vehicles and alternative fuels, “to shift our cars and trucks off oil for good.” This piece is absolutely correct that the Trust is a long-term strategy which won’t impact the vehicle offerings available to consumers for a number of years. However, while Clean Skies Foundation is spot on that the Executive Branch/OMB should take this near-term step—obviously, in our opinion, every branch of the government should be taking common-sense steps to combat oil dependence—the Trust is a far more comprehensive and its results would be more far-reaching. Furthermore, it will help advance technology improvements, instead of purchasing today’s technology. Thus, while these two ideas are complementary, near-term federal fleet purchases should not be considered a viable substitute by any stretch of the imagination, and the onus remains on Congress to move forward on the Energy Security Trust.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Over the weekend, an OpEd published in Bloomberg boldly proclaimed, “The Oil and Gold Booms are Over.” Written mostly from a finance perspective, the article focuses on the assertion that commodity prices follow predictable boom and bust cycles—which can be summarized thusly. Scarcity drives up prices, which drives investments into new extraction methods and resources, thus leading to a supply glut which normalizes prices. One of Ruchir Sharma’s biggest arguments in this piece is that in real value terms, commodity prices don’t actually rise, stating “For the last 200 years, the average price of commodities has followed this predictable cycle… with the result that real prices haven’t risen since 1800. […] Gold has just retained its value. The price today (about ,500 an ounce) is roughly the same as in 1980, when adjusted for inflation.” He notes that an exception can be made for oil and copper, which he states have “gained somewhat.” Since 1968 (which is the furthest EIA’s data on real prices goes), real oil prices have increased four-fold from to over 0/bbl. Chart:

While a looser global market will lead to some weakening of oil prices over the next few years (which is not only healthy but arguably essential for continued economic recovery) the current debate is more focused on whether Brent Crude prices dip significantly under the 0 “soft floor,” not whether they will decline to below /bbl. And for those who did not pay attention in history class, the spikes in the 1970s and early 1980s were not reflections of the market value of petroleum, but instead due to the OPEC Arab oil embargoes—forces which continue to inflate prices to this day, and remind us that the global oil market is not a free one. [As a quick aside—the author references copper as the other major commodity whose value has increased significantly over the past decades. A recent Wall Street Journal article reported that two companies have been slowly amassing much of the world’s copper supplies, drawing fears from manufacturers about access and price fixing. More research is needed.] This is just one example of how the author tries to lump petroleum in with other commodities in ways that do not reflect the unique role it plays in the global economy—and comparing oil price cycles to those of other industrial metals is a weak metaphor. Obviously, metals have particular properties giving them value, and each have some niche they play in industry or tech… but those properties (conductivity, strength/weight ratio, malleability) can generally be substituted by other metals or synthetic materials. Thus, it seems unreasonable to compare demand for silver from electronics manufacturers to demand for petroleum, of which every marginal price spike impacts every person and business which uses a vehicle with an internal combustion engine to get around. Petroleum simply does not have a lot of substitutes, and its demand is generally inelastic. And it also seems tenuous to paint every finite and valuable commodity with the same brush while only discussing oil and a handful of metals. What about helium, for example? The author’s central thesis seems to play off the idea that financial investors threw money into commodities as a proxy for investing in Chinese economic growth. And while there is a relationship between Chinese demand and the prices of the examples he enumerates (oil, steel, soybeans, and gold) and China’s slowdown will impact global demand, it is premature to directly link China’s economic growth rate to its petroleum consumption. Oil demand is driven by car ownership, and purchase rates are robust to say the least. Last month alone (April 2013), China sold 1.84 million vehicles (compared to 1.62 in April 2012). Beginning of this year, the Wall Street Journal reported that the Chinese Association of Auto Manufacturers projects 7 percent market growth in 2013, and China surpassed the United States as the world’s largest auto market in 2009. For the sake of comparison, it is worth mentioning that the United States has a per-capita car ownership rate of 777 vehicles per 1,000 people, and the current rate in China is 58.7—which has increased five-fold since 2000. The point being: don’t write off Chinese auto demand just yet. Sharma mentions this in passing, saying China is “working hard” on electric cars, but current adoption rates are negligible. Last night the Detroit Free Press reported that in 2012, China sold 3,000 plug-in vehicles (compared to 53,000 stateside). Again, that annual number of 3,000 is in the context of the 1.5-2 million cars being purchased by Chinese consumers every month. Chinese motorists are gun-shy on electric vehicles for a number of reasons: a lack of personal property and home-charging capabilities, in addition to higher upfront costs, are understood to be a massive impediment. Interestingly, while the author of this piece underestimates the forces driving global petroleum demand, he appears to have some understanding of its consequences. He states: “High commodity prices enrich a class whose corrupting influence is legend, and whose chief skill is the ability to secure the right political contacts. Meanwhile, high commodity prices, particularly for oil, squeeze the poor and the middle class, and act as a brake on growth in the industrial world. During the 2000s the U.S. fretted over the rise of corrupt oil tycoons and unstable dictators in nasty petro-states, and rightly so.” Over here at Securing America’s Future Energy, we fret about those dictators and regions every day, and so should you. But the point remains, while mild abatements in global demand and technological advancements might take some of the edge off of oil prices, to interpret this dynamic as the permanent end of the “oil boom” is extremely short sighted. There may be a reprieve of five or even ten years, but understanding how deeply oil price spikes harm our prosperity, it remains an imperative to pursue alternatives which can insulate us from future shocks, or we are simply letting history repeat itself.

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Energy Policy Information Center (EPIC).10 less than last month’s projection, and Energy Policy Information Center (EPIC).14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

Electric vehicles don’t always get the best press. Naysayers love to point out some of the recent struggles that industry faces (failures of start-ups, the range-anxiety consumers face, higher up-front costs which don’t work for every household budget). Detractors also like to draw attention to the fact that early EV sales did not always align with manufacturer and policymaker expectations. Their criticisms are largely premature, as there’s more to EV sales than meets the eye. By the numbers:

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

[caption id="attachment_4333" align="aligncenter" width="467" caption="April 2013. Click to Enlarge."][/caption] The take-home message is that consumers are clearly warming up to EVs—many of the vehicles currently available are only being sold in selected regions as OEMs gradually expand availability, while other are facing supply bottlenecks. For example, part of Tesla’s remarkable numbers comes from filling backlogged orders. HybridCars.Com speculates, “its sales are only limited by production capacity. If the company could produce more, it’s not a stretch to conjecture we could see something like 3,000 or 4,000 Model S sales for a couple months or more but of course that’s a moot statement; it will not happen due to production capability, but this is what we have with the phenomenon happening right now in Fremont, Calif.” In another example, Toyota’s plug-in Prius is not selling as well as one might expect given the strength of the Prius brand and the early sales figures, but the model is only currently available in 15 states—and was only released on that scale in March. Speculatively, the plug-in Prius could also be suffering from a low federal tax credit (of ,500 instead of ,500) due to the small battery size, despite the fact that its price point is higher than some competitors, such as the Nissan Leaf. The Leaf is also seeing strong performance this year, likely due to a number of factors such as continued improvements Nissan is incorporating into the model based on owner feedback, and more competitive pricing (thanks to lower costs due to the now-operational production facility based in Smyrna, Tennessee). 2013 aside, GM’s Chevy Volt has generally outperformed the Nissan Leaf for most of the short history of plug-in vehicle sales, but Nissan would not be wise to rest on its laurels. Last week, GM CEO Dan Akerson spoke about the company’s plans for the next generation of the most popular plug-in hybrid, including a sticker price cut of ,000-,000, and a significant decrease in the weight of the vehicle. GM is also making the most of its investment in the Volt’s technology, which is to be incorporated into the upcoming Cadillac ELR.

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

The U.S. trade deficit numbers for March are out, and the positive trends we’re seeing in recent months are continuing. Petroleum imports have fallen to the lowest level in 17 years: a truly welcome development for our energy security which has a number of positive effects throughout the economy. The total trade deficit decreased to .83 billion—an 11 percent drop from February’s 43.6 billion—led by a 4.4 percent drop in petroleum imports. We can likely anticipate to see further drops in next month's numbers, considering the especially low price of Brent crude throughout April—which dipped a number of times below 0 per barrel, the “soft floor” under global oil prices. The Washington Post reports that economists are expecting the trade deficit to narrow over the course of the year, both because of expected gains in U.S. exports, and continued growth in domestic oil production. In releasing the budget earlier this month, President Obama stated a goal of cutting net oil imports in half from 2008 levels by the end of the decade. Presumably, his intention is to cut 50 percent of imports by volumes, which would mean cutting imports from their current level of about 7mbd a further 1.5mbd to 5.5mbd. This is roughly equal to the amount of Iranian oil exports taken off the market through heavy international sanctions—to offer some context. Another factor which will help in pursuit of low net oil imports is continued increases in exports of refined petroleum products (the United States currently imposes a ban on exporting raw crude oil). An unanticipated aspect of the boom in U.S. light, tight oil is an abundance of high quality oil, close in nature to gasoline. Some producers and refiners are finding it economical to circumvent the ban by processing the LTO lightly and exporting it as a refined product. It will be interesting to see if this practice continues, and has any meaningful impact on the trade balance in petroleum. In related news, EIA’s Today in Energy this morning articulated the case that while domestic production has a meaningful impact on oil imports, the most important factor is transportation sector demand. In their three scenarios: High Net Imports, Reference Case (status quo), and Low/No Net Imports, the latter is driven primarily by significant reductions in light-duty vehicle travel/energy demand. Specifically: The reduced demand for energy in the Low/No Net Imports case is driven by significant reductions in light-duty vehicle travel that reflect both changes in consumer preferences and a general shift in mobility needs (for example, population shifts to a more urban setting where other transportation options are available). This analysis also assumes increased stringency in fuel economy requirements, coupled with a more rapid development of transportation technology that reduces cost and improves efficiency. This case also includes an expansion of alternative fuel markets across all transportation modes, including light-duty vehicles such as passenger cars, heavy-duty vehicles such as freight-hauling trucks, and rail, marine, and air transportation. In other words, we can drill baby drill to our heart’s content, but the kind of reductions we seek in oil imports won’t come without technological and social shifts towards cars which don’t rely on gasoline.

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (100,000 Vehicles Closer to Energy Security.10 less than last month’s projection, and 100,000 Vehicles Closer to Energy Security.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 17 May 2013 20:20:25 +0000

The folks over at Plug-In America deserve credit for noticing this pending milestone, which demonstrates a major shift in how Americans are thinking about their personal transportation. So far, 100,000 families have chosen an alternative to the type of cars that they grew up with, and presumably, thought cars would always be. 100,000 families decided to choose an unfamiliar technology—and perhaps even pay more for it—because they believed in something better than gasoline. So far, they have been backed by the installation of 5,894 public charging stations, according to Department of Energy statistics. We don’t know how much fuel has been saved, but we know that it’s a lot, and that the number is growing. The road to 100,000 vehicles has not been as smooth and expeditious as some might have hoped, but there have inarguably been impressive accomplishments along the way. While not all of the startup companies which tried to tap into the electric vehicle movement are still producing EVs, the ones which have made it through the rocky initial stages are showing signs of progress and promise. The three biggest sellers—the Chevy Volt, Nissan Leaf, and Tesla Model S—are not only selling well now, but have set the stage for further market growth. The 2014 Chevy Volt, in addition to incorporating improved range and light-weighing technology, will be as much as $10,000 cheaper than the 2013 model, and the Volt powertrain is being incorporated into an upcoming Cadillac model. Earlier this week, Nissan CEO Carlos Ghosn reiterated his support for the Leaf, and electric vehicles in general, while also expressing his long-term vision for an industry which thrives without incentives, based on the importance of the technology and consumer acceptance. Meanwhile, Tesla Motors’ share price has skyrocketed, the Model S Sedan has won Consumer Reports’ highest rating in history, and the company is selling shares in order to repay its Department of Energy Loan ahead of schedule. Furthermore, the public-private cooperation which has been so instrumental to the success of the electric vehicle movement continues. Just within the past week, AAA has launched a digital tool to help educate motorists about electric vehicles, while the State of Colorado extended its electric vehicle tax incentive through 2022, and expanded the definition of qualified vehicles to include plug-in hybrids such as the Volt. For a movement which has suffered so much negative press and naysaying, 100,000 vehicles is a huge accomplishment. Even in just the second year of the fledgling industry, the obituary was written many times, but our view is pretty straight-forward: this is only the beginning.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Where is Energy Security in the MLP Parity Act?.10 less than last month’s projection, and Where is Energy Security in the MLP Parity Act?.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 17 May 2013 13:57:19 +0000

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids.10 less than last month’s projection, and Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Robbie Diamond, Founder and CEO of SAFE and the Electrification Coalition, stated, “This bill will get more electric vehicles on Colorado roads and accelerate the transition away from oil and toward a diverse set of domestic fuels to power our transportation sector. That transition is good for consumers and local businesses alike, and will protect our nation from the economic and national security problems caused by oil dependence. Policy steps like this, combined with efforts like our Drive Electric Northern Colorado program, show that the state of Colorado is truly leading the way in the United States.” The Colorado tax credit of $6,000 supplements a federal tax credit for electric vehicles of $7,500. While both are beneficial individually, combined they create a truly impressive offset towards the higher initial costs of plug-in cars (it’s important to keep in mind that the costs of fuel and repairs for electric vehicles are far below their conventional counterparts; for full details, see the Drive Electric Comparison Calculator). Colorado’s clear leadership in supporting electric vehicle adoption was confirmed by a new study by the Southwest Energy Efficiency Project (SWEEP), which gives it an “A-“ grade for its state laws, showing that the state’s pro-EV policies make it a clear leader in the region. For more information about SAFE and the EC’s work in Colorado, visit DriveElectricNoCo.org, and follow @DriveElectricNC on twitter.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Medium Term Oil Market Report: The Fundamentals Remain Unchanged.10 less than last month’s projection, and Medium Term Oil Market Report: The Fundamentals Remain Unchanged.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Wed, 15 May 2013 14:37:11 +0000

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Spending Smarter—not Harder—on Energy Security.10 less than last month’s projection, and Spending Smarter—not Harder—on Energy Security.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about $1.50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top $30,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Don’t Write Oil’s Obituary Yet.10 less than last month’s projection, and Don’t Write Oil’s Obituary Yet.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Thu, 09 May 2013 21:18:26 +0000

Over the weekend, an OpEd published in Bloomberg boldly proclaimed, “The Oil and Gold Booms are Over.” Written mostly from a finance perspective, the article focuses on the assertion that commodity prices follow predictable boom and bust cycles—which can be summarized thusly. Scarcity drives up prices, which drives investments into new extraction methods and resources, thus leading to a supply glut which normalizes prices. One of Ruchir Sharma’s biggest arguments in this piece is that in real value terms, commodity prices don’t actually rise, stating “For the last 200 years, the average price of commodities has followed this predictable cycle… with the result that real prices haven’t risen since 1800. […] Gold has just retained its value. The price today (about $1,500 an ounce) is roughly the same as in 1980, when adjusted for inflation.” He notes that an exception can be made for oil and copper, which he states have “gained somewhat.” Since 1968 (which is the furthest EIA’s data on real prices goes), real oil prices have increased four-fold from $20 to over $100/bbl. Chart:

While a looser global market will lead to some weakening of oil prices over the next few years (which is not only healthy but arguably essential for continued economic recovery) the current debate is more focused on whether Brent Crude prices dip significantly under the $100 “soft floor,” not whether they will decline to below $40/bbl. And for those who did not pay attention in history class, the spikes in the 1970s and early 1980s were not reflections of the market value of petroleum, but instead due to the OPEC Arab oil embargoes—forces which continue to inflate prices to this day, and remind us that the global oil market is not a free one. [As a quick aside—the author references copper as the other major commodity whose value has increased significantly over the past decades. A recent Wall Street Journal article reported that two companies have been slowly amassing much of the world’s copper supplies, drawing fears from manufacturers about access and price fixing. More research is needed.] This is just one example of how the author tries to lump petroleum in with other commodities in ways that do not reflect the unique role it plays in the global economy—and comparing oil price cycles to those of other industrial metals is a weak metaphor. Obviously, metals have particular properties giving them value, and each have some niche they play in industry or tech… but those properties (conductivity, strength/weight ratio, malleability) can generally be substituted by other metals or synthetic materials. Thus, it seems unreasonable to compare demand for silver from electronics manufacturers to demand for petroleum, of which every marginal price spike impacts every person and business which uses a vehicle with an internal combustion engine to get around. Petroleum simply does not have a lot of substitutes, and its demand is generally inelastic. And it also seems tenuous to paint every finite and valuable commodity with the same brush while only discussing oil and a handful of metals. What about helium, for example? The author’s central thesis seems to play off the idea that financial investors threw money into commodities as a proxy for investing in Chinese economic growth. And while there is a relationship between Chinese demand and the prices of the examples he enumerates (oil, steel, soybeans, and gold) and China’s slowdown will impact global demand, it is premature to directly link China’s economic growth rate to its petroleum consumption. Oil demand is driven by car ownership, and purchase rates are robust to say the least. Last month alone (April 2013), China sold 1.84 million vehicles (compared to 1.62 in April 2012). Beginning of this year, the Wall Street Journal reported that the Chinese Association of Auto Manufacturers projects 7 percent market growth in 2013, and China surpassed the United States as the world’s largest auto market in 2009. For the sake of comparison, it is worth mentioning that the United States has a per-capita car ownership rate of 777 vehicles per 1,000 people, and the current rate in China is 58.7—which has increased five-fold since 2000. The point being: don’t write off Chinese auto demand just yet. Sharma mentions this in passing, saying China is “working hard” on electric cars, but current adoption rates are negligible. Last night the Detroit Free Press reported that in 2012, China sold 3,000 plug-in vehicles (compared to 53,000 stateside). Again, that annual number of 3,000 is in the context of the 1.5-2 million cars being purchased by Chinese consumers every month. Chinese motorists are gun-shy on electric vehicles for a number of reasons: a lack of personal property and home-charging capabilities, in addition to higher upfront costs, are understood to be a massive impediment. Interestingly, while the author of this piece underestimates the forces driving global petroleum demand, he appears to have some understanding of its consequences. He states: “High commodity prices enrich a class whose corrupting influence is legend, and whose chief skill is the ability to secure the right political contacts. Meanwhile, high commodity prices, particularly for oil, squeeze the poor and the middle class, and act as a brake on growth in the industrial world. During the 2000s the U.S. fretted over the rise of corrupt oil tycoons and unstable dictators in nasty petro-states, and rightly so.” Over here at Securing America’s Future Energy, we fret about those dictators and regions every day, and so should you. But the point remains, while mild abatements in global demand and technological advancements might take some of the edge off of oil prices, to interpret this dynamic as the permanent end of the “oil boom” is extremely short sighted. There may be a reprieve of five or even ten years, but understanding how deeply oil price spikes harm our prosperity, it remains an imperative to pursue alternatives which can insulate us from future shocks, or we are simply letting history repeat itself.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Short Term Energy Outlook: Gasoline Down, Nat Gas Up.10 less than last month’s projection, and Short Term Energy Outlook: Gasoline Down, Nat Gas Up.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at $2.75/MMBtu. Prices through 2013 have already been higher (reaching above $4 at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching $3.80 in 2013 and $4 through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at $100/bbl (STEO anticipates an average price of $101 through 2014) importing 5.7mbd would still mean we spend $208 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating $3.53/gallon through September ($0.10 less than last month’s projection, and $0.14 less than last summer’s average of $3.69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge.10 less than last month’s projection, and Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

[caption id="attachment_4333" align="aligncenter" width="467" caption="April 2013. Click to Enlarge."][/caption] The take-home message is that consumers are clearly warming up to EVs—many of the vehicles currently available are only being sold in selected regions as OEMs gradually expand availability, while other are facing supply bottlenecks. For example, part of Tesla’s remarkable numbers comes from filling backlogged orders. HybridCars.Com speculates, “its sales are only limited by production capacity. If the company could produce more, it’s not a stretch to conjecture we could see something like 3,000 or 4,000 Model S sales for a couple months or more but of course that’s a moot statement; it will not happen due to production capability, but this is what we have with the phenomenon happening right now in Fremont, Calif.” In another example, Toyota’s plug-in Prius is not selling as well as one might expect given the strength of the Prius brand and the early sales figures, but the model is only currently available in 15 states—and was only released on that scale in March. Speculatively, the plug-in Prius could also be suffering from a low federal tax credit (of $2,500 instead of $7,500) due to the small battery size, despite the fact that its price point is higher than some competitors, such as the Nissan Leaf. The Leaf is also seeing strong performance this year, likely due to a number of factors such as continued improvements Nissan is incorporating into the model based on owner feedback, and more competitive pricing (thanks to lower costs due to the now-operational production facility based in Smyrna, Tennessee). 2013 aside, GM’s Chevy Volt has generally outperformed the Nissan Leaf for most of the short history of plug-in vehicle sales, but Nissan would not be wise to rest on its laurels. Last week, GM CEO Dan Akerson spoke about the company’s plans for the next generation of the most popular plug-in hybrid, including a sticker price cut of $7,000-$10,000, and a significant decrease in the weight of the vehicle. GM is also making the most of its investment in the Volt’s technology, which is to be incorporated into the upcoming Cadillac ELR.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Trade Deficit in Petroleum Falls 4.4 percent in March.10 less than last month’s projection, and Trade Deficit in Petroleum Falls 4.4 percent in March.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 03 May 2013 21:27:36 +0000

The U.S. trade deficit numbers for March are out, and the positive trends we’re seeing in recent months are continuing. Petroleum imports have fallen to the lowest level in 17 years: a truly welcome development for our energy security which has a number of positive effects throughout the economy. The total trade deficit decreased to $38.83 billion—an 11 percent drop from February’s 43.6 billion—led by a 4.4 percent drop in petroleum imports. We can likely anticipate to see further drops in next month's numbers, considering the especially low price of Brent crude throughout April—which dipped a number of times below $100 per barrel, the “soft floor” under global oil prices. The Washington Post reports that economists are expecting the trade deficit to narrow over the course of the year, both because of expected gains in U.S. exports, and continued growth in domestic oil production. In releasing the budget earlier this month, President Obama stated a goal of cutting net oil imports in half from 2008 levels by the end of the decade. Presumably, his intention is to cut 50 percent of imports by volumes, which would mean cutting imports from their current level of about 7mbd a further 1.5mbd to 5.5mbd. This is roughly equal to the amount of Iranian oil exports taken off the market through heavy international sanctions—to offer some context. Another factor which will help in pursuit of low net oil imports is continued increases in exports of refined petroleum products (the United States currently imposes a ban on exporting raw crude oil). An unanticipated aspect of the boom in U.S. light, tight oil is an abundance of high quality oil, close in nature to gasoline. Some producers and refiners are finding it economical to circumvent the ban by processing the LTO lightly and exporting it as a refined product. It will be interesting to see if this practice continues, and has any meaningful impact on the trade balance in petroleum. In related news, EIA’s Today in Energy this morning articulated the case that while domestic production has a meaningful impact on oil imports, the most important factor is transportation sector demand. In their three scenarios: High Net Imports, Reference Case (status quo), and Low/No Net Imports, the latter is driven primarily by significant reductions in light-duty vehicle travel/energy demand. Specifically: The reduced demand for energy in the Low/No Net Imports case is driven by significant reductions in light-duty vehicle travel that reflect both changes in consumer preferences and a general shift in mobility needs (for example, population shifts to a more urban setting where other transportation options are available). This analysis also assumes increased stringency in fuel economy requirements, coupled with a more rapid development of transportation technology that reduces cost and improves efficiency. This case also includes an expansion of alternative fuel markets across all transportation modes, including light-duty vehicles such as passenger cars, heavy-duty vehicles such as freight-hauling trucks, and rail, marine, and air transportation. In other words, we can drill baby drill to our heart’s content, but the kind of reductions we seek in oil imports won’t come without technological and social shifts towards cars which don’t rely on gasoline.

Energy Policy Information Center (EPIC)

admin — Fri, 17 May 2013 20:20:25 +0000

Where is Energy Security in the MLP Parity Act?

admin — Fri, 17 May 2013 13:57:19 +0000

Colorado Expands Electric Vehicle Tax Credits to Plug-In Hybrids

admin — Wed, 15 May 2013 21:45:14 +0000

Specify that plug-in electric vehicles like the Chevy Volt and Ford C-Max Energi are included in the existing credit.
Change the credit calculation at the request of the Department of Revenue, to simplify administration and make it easier for dealers and consumers to understand the credit.
Extend the credit for innovative motor vehicles. The original 2009 bill specified the level of credit available through 2015; HB 1247 extends the credit for innovative motor vehicles including electric, plug-in electric, and CNG vehicles through 2022.

Medium Term Oil Market Report: The Fundamentals Remain Unchanged

admin — Wed, 15 May 2013 14:37:11 +0000

Spending Smarter—not Harder—on Energy Security

admin — Fri, 10 May 2013 18:59:26 +0000

Despite rapidly rising domestic energy production, oil imports will continue to cost us dearly, and constrain the country’s domestic and foreign policy options.
Companies are switching to natural gas because the fuel is about .50 cheaper per diesel gallon-equivalent than diesel. With many heavy-duty trucks traveling 100,000 miles per year or more, annual fuel savings can top ,000 per truck.
To realize these benefits – and to make a downpayment on alternative fuel R&D – the President should direct the government’s major purchasing agent, the General Services Administration, to work with other federal agencies and the Office of Management and Budget, to buy more freight and package delivery services from vendors who rely upon alternative fuel vehicles.
If Uncle Sam implements alternative fuel and other petroleum reducing preferences through such high volume purchasing, it will have large multiplier benefits nationwide in reducing the trucking sector’s oil consumption.
Existing laws and executive orders give the Administration all the authority it needs to kick start a new generation of alternative fuel transportation services. The President merely needs to use them. That could also send a powerful message to Congress that any new royalty-based R&D program will be supported by the government’s own buying power.

Don’t Write Oil’s Obituary Yet

admin — Thu, 09 May 2013 21:18:26 +0000

Short Term Energy Outlook: Gasoline Down, Nat Gas Up

admin — Tue, 07 May 2013 22:09:10 +0000

Today’s Short Term Energy Outlook held few surprises, except to reaffirm the nation’s new energy paradigm. By the numbers: Predictably, natural gas prices are projected to see some modest gains through 2014. Average Henry Hub Spot prices in 2012 were unsustainably weak, coming in at .75/MMBtu. Prices through 2013 have already been higher (reaching above at some points, providing a welcome breather for the natural gas industry), and STEO sees prices reaching .80 in 2013 and through 2014. This increase is despite a national production increase of .8BCFD/day, making it an indicator of robust demand growth. Domestically, crude oil trends will exhibit opposite characteristics. Total consumption is remaining roughly the same or abating marginally through 2013 and 2014 (hovering between 18.5 and 19mbd), but as domestic production continues to uptick, EIA projects that net oil imports will decline to an average of 5.7mbd through 2014, which is extremely close to President Obama’s goal of cutting net oil imports to 5.5mbd by the end of the decade (and 23% lower than the average in 2012—a huge drop in a matter of two years). But—lest we lose sight of the big picture—if global oil prices were to remain at 0/bbl (STEO anticipates an average price of 1 through 2014) importing 5.7mbd would still mean we spend 8 billion on petroleum imports per year. The international picture in crude oil also reflects fresh non-OPEC supply but—and this is what is largely overlooked in the recent energy news—global demand growth is still increasing. World liquid fuels production grew by .7mbd over the course of 2012, and is expected to reach 92mbd in 2014 (up from current levels of 89mbd). Demand increases (driven largely by China) are being met overwhelmingly by North America in general and the United States in particular, with marginal contributions from Colombia and Brazil, as well as regained North Sea output. For once, the United States is the producer meeting China’s demand—a stunning reversal of the longstanding trade paradigm between the two countries. Finally, motorists can look forward to a reprieve this summer – EIA downwardly revised its predicted gas prices, anticipating .53/gallon through September (Survey Says: Americans Care About Fuel Economy and Energy Security.10 less than last month’s projection, and Survey Says: Americans Care About Fuel Economy and Energy Security.14 less than last summer’s average of .69). Ideally, slightly dampened prices won’t lead to a demand rebound which would drive prices back up.

Plug-In Vehicle Sales Top 7,000 for April; Tesla Leading the Charge

admin — Mon, 06 May 2013 22:09:41 +0000

EV sales have exceeded 7,000 units for five of the past seven months, with the early-year dip attributable to cyclical lows in auto sales.
So far, the best selling plug-in of 2013 is Tesla’s Model S, having sold 6,850 cars, 2,100 of those in April (comprising almost thirty percent of all plug-in sales for the month)
While EV sales dropped off 6.5 percent from last month, this was better than the industry’s overall performance—sales of all autos fell 11.5 percent
EV sales are up an impressive 98.5 percent from April 2012 (while sales of all autos are down 8.5 percent)
24,951 plug-in units have been sold so far in 2013 (up 130 percent from Jan-April 2012, while sales of all autos are only up 6.9 percent compared to the first four months of last year)

Trade Deficit in Petroleum Falls 4.4 percent in March

admin — Fri, 03 May 2013 21:27:36 +0000

Survey Says: Americans Care About Fuel Economy and Energy Security

admin — Fri, 03 May 2013 21:09:58 +0000

Last week, the Consumer Federation of America released a report which largely flew under the radar of the media but explores an issue of critical importance for most Americans: fuel economy standards. As we know, American household spending on gasoline reached a new high of $3,000 last year—or almost 4 percent of income. As we reported earlier in this space, the burden of gasoline prices disproportionately impacts lower income groups, consuming over 12 percent of post-tax income for the lowest-earning quintile of the population. While global oil prices have witnessed a brief reprieve in recent weeks (and a well-supplied market is likely to maintain this trend to some extent throughout the coming months) it’s important to keep sight of the fact that 1) gas prices will inevitably spike again, and continue their longer-term trend upwards, and 2) factors other than high oil prices drive gas prices up, such as refinery disruptions (additives to prevent evaporation in warm weather can also factor; EIA had an interesting piece on this). Fuel economy standards could be considered a blunt policy instrument. Much of energy and environmental policy scholarship favors market-based policies to incentivize individuals and firms to behave in socially responsible ways. Fuel economy standards are not a market-based but rather a “command and control” mechanism which mandates that automakers achieve certain performance metrics within a determined time frame – and while many would argue that increased gas taxes would be the preferred mechanism to curb oil consumption and incentivize consumers to purchase more fuel-efficient cars, it can’t be said that CAFE standards don’t have a certain appeal. According to CFA: This is a rare example of bipartisan support for a program that works. In the past four years, the U.S. has lowered its oil imports more than at any time in the past thirty years, and increasing fuel economy played a big part in that remarkable turnaround. CFA performed a survey (according to industry standard, covering a representative sample of over 1,000 Americans) in order to tap into public opinion on fuel economy standards. The support was unambiguous. By the numbers:

80% strongly or very strongly support the higher standards being implemented through 2025
83% expressed significant concern about future gasoline prices
72% expressed significant concern about U.S. dependency on middle-eastern oil
88% say fuel economy will be an important factor in their next vehicle purchase
92% of Democrats, 87% of independents, and 77% of republicans support the higher standards

What the survey suggests is that consumers care quite a bit about fuel economy, because they care about both their personal expenses and foreign oil. But fuel economy standards are the blunt policy instrument, not the underlying problem. Further research needs to be done to determine how much Americans understand the real underlying problem, which is dependency on an imported, and globally priced commodity. We wouldn’t be surprised to learn that there is a large amount of public will for more aggressive steps to curb oil dependence… drowned out by unfortunate forces of political cowardice. Read CFA’s report here.