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Energy Independence Day

By Denise Bode — Fri, 04 Jul 2008 00:00:01 GMT

Happy Independence Day from EnergyMatters and the American Clean Skies Foundation. Today, we celebrate the birth of the greatest nation in the history of the world and it is more than appropriate that today, we consider our nation's continued independence. Presently, over 60% of the oil we use is imported from other countries - many of these countries are not exactly our biggest fans. We need to say goodbye to OPEC and their $140 oil prices and begin to address the transportation fuel crisis that American clearly faces. And I do not mean 10 years from now but today. Clean-burning affordable natural gas which costs half the price of gasoline when used for fuel in your car is a clear near term option. It uses the same engine being produced by Detroit with just some minor modifications and a new fuel tank. And with the natural gas pipeline system available everywhere in the US and in 70 percent of homes you can put a Phill unit in your garage ( a UL rated appliance just like your hot water tank) to fill up at home or have a cng pump installed at a gasoline station where lines are already there at most of them. With some encouragement, Detroit could build vehicles today to meet our needs and we could convert our existing vehicles, which are rapidly losing their value, to a cleaner much cheaper fuel.

And the most exciting thing about this is just when we need more natural gas, the American independent natural gas producer has discovered the key to unlocking natural gas from shale rock, the most common sedimentary rock in the world. Natural gas production is up more than 9 percent just since the same time last year. almost 99% of the natural gas we use is produced in North America and that is not changing particularly with new domestic supplies that are being discovered every week. With reduced dependence on oil and gasoline, it should take pressure off demand and help prices and our whole economy. This is not to say, of course, that American independence lies on the shoulders of switching to natural gas vehicles, but rather it is a clear short term solution. Independence Day represents everything that is great about this nation. We have some of the most amazing innovators in the energy sector right here in this country and we have the means today not 10 years from now to help American consumers. Policy makers should stand up and pay attention to what they are saying. Everyone is in harmony over the negative impacts of high gasoline prices to the economy. Americas future independence is our responsibility and if we're to maintain our independence, we have to make some very difficult decisions. One of those decisions will be whether or not we take action on American energy policy. I believe natural gas is the best near term solution to our crisis and part of our path to independence.

New Poll Indicates Changing Views on Energy and the Environment

By Denise Bode — Wed, 02 Jul 2008 00:00:01 GMT

Americans are rapidly changing their views on the environment. More people now view increased production of US oil and natural gas and new power plants as a greater priority than energy conservation. That is a big change from five months ago, according to a new survey. The poll released this week by the Pew Research Center shows nearly half of those surveyed — or 47 percent — now rate energy exploration and production, and building new power plants as the top priority, compared with 35 percent who believed that five months ago.

The Pew poll, conducted in late June, showed the number of people who consider energy conservation as more important declined by 10 percentage points since February from a clear majority to 45 percent. People are now about evenly split on which is more important. The number of people who said they considered increasing energy supplies more important than protecting the environment increased from 54 percent in February to 60 percent and the number of people who favor oil drilling in Alaska's Arctic National Wildlife Refuge also increased. The shift toward embracing more energy production was seen across different age and political groups, reflecting a change in attitudes among Democrats, independents, women, and young people — all groups that in the past have generally championed conservation over energy development.

Let's see how long it takes for political candidates to start changing their messages. Any attack on Iran would provoke an unimaginably fierce response and add to further turmoil to the already seething oil market, the country's oil minister warned yesterday. At the same time, Iran sought to calm fears that Tehran might cut oil deliveries to consuming countries, suggesting that Iran would continue supplying the market even if struck by Israel or the United States. Which makes sense because without their oil exports, their economy grinds to a halt.

The 'Why' of $150 Crude

By Denise Bode — Tue, 01 Jul 2008 00:00:01 GMT

Some commodity analysts are predicted that very soon, crude will hit the record-smashing $150 per barrel benchmark. With the International Energy Agency announcing that supplies will remain tight in spite of record prices and reduced demand, the market will continue to soar. Downsizing its estimate of how much oil will reach the market, the agency said supply and demand figures will be close through the next five years, despite lower overall estimated hunger for crude as the world adjusts to record prices and cuts its consumption. The IEA is the energy watchdog for the Organization for Economic Cooperation and Development, a grouping of the world's most industrialized countries. Its forecasts are considered to be the best gauge of where oil supplies and prices are headed. The Organization of Petroleum Exporting Countries maintains that the market is well supplied now. It blames crude's threefold price rise over the past three years on the weak U.S. dollar and on speculators.

With gas prices reaching deeper into motorists' pockets, attitudes about offshore oil drilling are shifting even in normally greener-than-thou California, with many individuals and at least one elected official advocating its expansion. An estimated additional 10 billion barrels of crude oil are projected to be available off California's coast, according to John Romero of the U.S. Minerals Management Service, as well as about 16 trillion cubic feet of natural gas. The agency estimates that nearly 18 billion barrels could be recovered if new offshore drilling were allowed in areas around the country, including Florida and New Jersey, where reserves exist.

Middle East Tensions Continue to Drive Oil Prices

By Denise Bode — Mon, 30 Jun 2008 00:00:01 GMT

Oil rose, trading near a record $142.99 a barrel, on speculation the dispute over Iran's nuclear program may disrupt supply from OPEC's second-largest producer. Pressure on Iran to end its uranium enrichment program and the falling value of the U.S. dollar may drive prices to $170 a barrel, OPEC President said over the weekend and of course, the markets are doing their level best to hurry and meet that speculation. Oil is headed for its biggest six-month gain since 1999 as investors shun equities for commodities, looking for a hedge against a weaker dollar and quickening inflation. The contract reached its all-time high of $142.99 a barrel on June 27 after the Federal Reserve left interest rates unchanged and showed no signs it will support the dollar any time soon. Oil has risen 49 percent this year. Add to that fact, John Bolton, former U.S. envoy to the United Nations has said that Israel would strike Iran between the presidential election in November and the inauguration in January and what you get is volatile markets, record prices at the pump and an increasingly weakened dollar.

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq, American officials say. The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism. In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said. It is unclear how much influence their work had on the ministry’s decisions.

At a time of spiraling oil prices, the no-bid contracts, in a country with some of the world’s largest untapped fields and potential for vast profits, are a rare prize to the industry. The contracts are expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron, as well as to several smaller oil companies. The deals have been criticized by opponents of the Iraq war, who accuse the Bush administration of working behind the scenes to ensure Western access to Iraqi oil fields even as most other oil-exporting countries have been sharply limiting the roles of international oil companies in development.

The Saudis' Crackdown on Oil Terrorists

By Denise Bode — Wed, 25 Jun 2008 00:00:01 GMT

OPEC kingpin Saudi Arabia has arrested 701 Islamists in recent months who were preparing attacks on oil industry installations, the interior ministry said on Wednesday. Security forces "carried out several operations against followers of the deviant ideology and arrested a total of 701 people of various nationalities," said a ministry spokesman quoted by the official Spa news agency. Of those arrested, "520 are still being held for their implication in the organizational and ideological plans of the deviant ideology." Deviant ideology is the term used by Saudi officials to describe Al-Qaeda. One of the reasons for high crude oil prices has been attacks and threats of terrorist attacks on oil installations in the Middle East. While this news has not made the mainstream media, it may have an impact on crude oil prices - but not much. Last week, we reported that Saudi Arabia is increasing their production output to stabilize world crude prices and this announcement from Saudi Arabian news agencies accentuates their attempt to show the world they are serious about both terrorism and crude oil stabilization. The aggregate result is yet to be seen on the markets.

Louisiana's governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, the most comprehensive and far-reaching state legislation in the United States, enacted to develop a statewide advanced biofuel industry. Louisiana is the first state to enact alternative transportation fuel legislation that includes a variable blending pump pilot program and a hydrous ethanol pilot program. The initiative will also give an efficiency boost to the ethanol industry in the state by supporting high yielding non-corn crops. The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of a comprehensive “field-to-pump” strategy as developed by Renergie, Inc., which utilizes high yielding, water-efficient sweet sorghum. The feedstock from other than corn must be derived solely from Louisiana harvested crops capable of a yield of 600 gallons per acre among other things. One of the significant strategies is the plan requires the feedstock to use no more than on-half of the water to grow corn.

Is Regulation the Answer to Oil Price Speculation?

By Denise Bode — Tue, 24 Jun 2008 00:00:01 GMT

In a scramble to find a fix for energy prices, Congress is zeroing in on speculators and the legal loopholes that some lawmakers say are adding as much as $70 to the price of a barrel of oil. Michael Masters, portfolio manager of the hedge fund Masters Capital Management, told a congressional hearing on Monday that with greater regulation oil prices could drop to $65 or $70 a barrel within about 30 days. Pension funds, Wall Street banks and other large investors that have no intention of taking delivery of fuel have increasingly pumped money into contracts for oil and other commodities as a hedge against inflation. Democratic House lawmakers said they intend to tighten restrictions on investors they blame for driving up fuel prices. Many Republicans, analysts and regulators, however, say soaring oil prices are a reflection of larger economic factors, including the falling dollar, unrest in the Middle East and increased demand from countries like China and India. Fixes in the works on Capitol Hill range from new constraints on speculators — including a 50 percent margin requirement on financial speculators, full disclosure of all trading by investment banks in all markets, and prohibiting investment banks from holding energy assets — to a bigger role for the Commodity Futures Trading Commission (CFTC).

School districts across the nation are finding themselves in a financial bind as a result of high transportation fuel prices. East Valley Arizona has seen diesel fuel prices rise 62 percent but their increase in appropriations from the state will more than likely be the customary 2 percent. So what are schools doing to cut costs? They are increasing vehicle maintenance, reducing field trips and doing away with idling altogether. But will it be enough in the long term to sustain the level of service parents have come to expect from school districts? Parents will more than likely find themselves faced with paying for the increased costs of school transportation one way or the other. Either they will start driving kids to school themselves or pay a premium for bus transportation.

Appealing to the Profit Motive

By Denise Bode — Mon, 23 Jun 2008 00:00:01 GMT

Sen. John McCain hopes to solve the country's energy crisis with cold hard cash. The Republican presidential nominee-in-waiting thinks the government should offer a $300 million prize to the person who can develop an automobile battery that leapfrogs existing technology. The prize would equate to $1 for every man, woman and child in the country. In a speech being delivered this week at Fresno State University in California, McCain is also proposing stiffer fines for automakers who skirt existing fuel-efficiency standards and incentives to increase use of domestic and foreign ethanol. Transportation fuel costs have skyrocketed and now the presidential candidates are starting to pay attention.

Last week, I reported that Saudi Arabia had promised to increase their production, but oil prices have not subsided. Saudi Arabia said Sunday it would produce more crude oil this year if the market needs it. The kingdom announced a 300,000 barrel per day production increase in May and said before the start of the meeting in Jeddah that it would add another 200,000 barrels per day in July, raising total daily output to 9.7 million barrels. Saudi Arabia's pledge fell far short of U.S. hopes for a specific increase. The United States and other nations argue that oil production has not kept up with increasing demand, especially from China, India and the Middle East. But Saudi Arabia and other OPEC countries say there is no shortage of oil and instead blame financial speculation and the falling U.S. dollar. Analysts said the meeting helped provide some clarity as to the size of spare OPEC capacity available. Saudi Arabia said it is willing to invest to boost its spare oil production capacity above the current 12.5 million barrels per day planned for the end of 2009 -- if the market requires it. And apparently, the market requires it.

US Reins in Gasoline Consumption: '70's Redux?

By Denise Bode — Fri, 20 Jun 2008 00:00:01 GMT

Lofty energy prices and a weak economy have combined in the past year to rein in U.S. gasoline consumption in what many experts believe will be an enduring shift in the way our nation burns fuel. But how that takes shape is yet to be determined. As gasoline prices continue climbing, demand has been heading in the opposite direction. So far this year, Americans have used less gasoline than they did in 2007, with demand since January dropping 1% from last year, according to the Department of Energy. During the energy crunch of the late 1970s and early 1980s -- the last time gas prices were close to current levels in inflation-adjusted terms -- consumers sharply cut back their gasoline consumption. When prices dropped, demand rose again, but at a slower pace because of the embrace of more-fuel-efficient foreign cars.

This time around, the breadth of change in consumption patterns is even more dramatic, and, if oil prices stay near current levels, the decline in demand could be more sustained. And we're thinking much more broadly now - developing CNG vehicles like my Honda Civic GX that I fill in my home. Honda also released their new Clarity - another alternative fuels vehicle. In a move that will certainly raise gasoline prices even higher, the Environmental Protection Agency's staff, under pressure to deal with climate change, is considering whether to set limits on greenhouse-gas emissions associated with gasoline and other transportation fuels. New fuel standards aimed at curbing greenhouse gases could have broad implications for oil refiners and the struggling automobile industry. Putting limits on greenhouse gases generated by fuels could result in higher prices for gasoline and push auto makers to develop vehicles that consume even less petroleum. As we have mentioned previously, auto makers in the United States are scurrying to answer the call with a myriad of alternative fuels vehicles such as hybrids and CNG vehicles. Honda America, Toyota, General Motors and Ford have all either developed or are in the process of developing vehicles that meet or exceed standards without government mandates. At energy matters dot us, we have links to a plethora of new automotive technologies.

Offshore Drilling's Political Implications

By Denise Bode — Thu, 19 Jun 2008 00:00:01 GMT

The pinch of rising gas prices is such a politically powerful symbol of an economy on the wrong track that the Republican Party's presumptive nominee, Sen. John McCain of Arizona, has shifted course to embrace offshore drilling, long politically taboo in coastal states. Even in environmentally minded Florida, Republican Gov. Charlie Crist, a McCain ally, is willing to "take a look" at drilling in the Gulf of Mexico as an answer to America's energy woes. Yet critics say the drilling that Bush and McCain propose offers only long-term prospects for new oil, and no immediate relief from record gas prices. Nearly 8 in 10 Americans call rising gas prices a financial burden, a Washington Post/ABC News poll found this week, and more than half said they are cutting back on driving as a result. Among families with annual incomes under $35,000, more than three-quarters call rising gas prices a "serious financial burden." In addition, less than one-third of those surveyed--30 percent--said they trust McCain to do something about gas prices as president. Fifty percent said they trust Sen. Barack Obama, the presumptive Democratic nominee, to do something about it.

Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power. Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat. The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

President Bush Renews Call to Open US Costal Waters for Oil and Gas Development

By Denise Bode — Wed, 18 Jun 2008 00:00:01 GMT

$4 a gallon gasoline has finally cause the tide to shift for offshore drilling. For a quarter-century, drilling for oil and natural gas off nearly all the American coastline has been banned in part to protect tourism and to lessen the chances of beach-blackening spills. Then gasoline prices topped $4 a gallon this summer. Drivers and others began clamoring for federal lawmakers to do something about the record price of oil, much of it produced in foreign countries. In response, President Bush is renewing his call to open U.S. coastal waters to oil and gas development, arguing that it's high time to battle high prices with increased domestic production. He is planning to ask Congress on Wednesday to lift the drilling moratoria that have been in effect since 1981 in more than 80 percent of the country's Outer Continental Shelf and to let states help to decide where to allow drilling. For their part, some lawmakers have their own plan: Legislation that would continue the ban into late 2009 was scheduled to be considered Wednesday by the House Appropriations Committee. Congressional Democrats, joined by some GOP lawmakers from coastal states, have opposed lifting the prohibition that has barred energy companies from waters along both the East and West coasts and in the eastern Gulf of Mexico for 27 years. Congress imposed the drilling moratorium in 1981 and has extended it each year since, by prohibiting the Interior Department from spending money on offshore oil or gas leases in virtually all coastal waters outside the western Gulf of Mexico and in some areas off Alaska.

Skyrocketing gasoline prices have made pricey hybrid automobiles a money-saving proposition for many British Columbia drivers, a new analysis by the British Columbia Automobile Association reveals. Despite hybrids having higher sticker prices, the BCAA analysis shows that buyers of some models could wind up with thousands of dollars in their pockets after five years of driving, compared with buyers of conventionally powered vehicles.

Oil Prices Fall Amid Concerns of Curbed Consumption

By Denise Bode — Tue, 17 Jun 2008 00:00:01 GMT

Crude oil declined for a third day amid concerns that slower economic growth will curb consumption of oil products. Oil has retreated more than $7 from yesterday's record of $139.89 a barrel. German investor confidence dropped to the lowest in more than 15 years in June as surging inflation hit Europe's largest economy. The U.K. inflation rate rose to the highest since at least 1997 in May, paving the way for higher interest rates. Here in the United States, we've seen very low unemployment rates however, there has been serious concern over the rising price of transportation fuel and the resultant climb in food prices as well.

As reported yesterday, Saudi Arabia has made the decision to increase their oil output and has called for a meeting on June 22 to help further stabilize otherwise volatile prices. But again, we're not expecting any real relief at the pumps until after the summer driving season is well behind us.

Toyota may have just taken the lead in a race to reduce the automotive industry's addiction to oil. Today in Japan, the auto manufacturer unveiled a car powered exclusively by hydrogen gas pumped through a fuel cell. The vehicle can travel more than 500 miles on a single tank of hydrogen, and the only byproduct produced by the car itself is water. The car faces obstacles to widespread adoption and use by the general public, however. Toyota could find only one place in all of Washington to fill a tank with hydrogen gas, a common problem for hydrogen-cell vehicles in most cities. While they await more hydrogen stations and work on perfecting fuel cells, car companies are racing to adopt certain attractive elements of the fuel-cell vehicle for their gas-electric hybrids. In particular, new designs for hybrids include the ability to recharge the car's electric cells. Ford is developing a plug-in car that it hopes to see on the road by 2010. They say that it will drive 30 miles on pure electricity, essentially allowing the car to attain a fuel economy of 120 miles to the gallon.

Saudis To Raise Production

By Denise Bode — Mon, 16 Jun 2008 00:00:01 GMT

Saudi Arabia will raise oil production to record levels within weeks in an attempt to avert an escalation of social and political unrest around the world. King Abdullah signaled the commitment to the UN secretary general over the weekend after the impact of skyrocketing oil prices on food sparked protests and riots from Spain to South Korea. Next month, the Saudis will be pumping an extra half-a-million barrels of oil a day compared to last month, bringing total Saudi production to 9.7 million barrels a day, their highest ever level. But the world's biggest oil exporters are coupling the increase with an appeal to western Europe to cut fuel taxes to lower the price of petrol to consumers. Saudi Arabia, which has called an emergency meeting of oil producers and consumers in the port city Jeddah next Sunday, says the energy crisis has not been caused purely by market pressures but by a speculative bubble. Saudi Arabia and Opec believe there are no shortages to justify the sudden surge in prices. Many Americans would tend to agree. Whether or not this decision impacts the markets is yet to be determined but don't hold your breath.

Protests against surging fuel prices which have triggered fears of political instability and a global economic downturn expanded in Europe and Asia on Monday, and Colombian truckers said they would join the wave of strikes. Protests by truckers, fishermen and other groups particularly vulnerable to rising energy costs have swept across countries from Spain to India and South Korea in recent weeks. Widening public anger has pushed oil prices to the top of the policy agenda in many states. A meeting of the world's richest nations warned at the weekend that soaring commodity prices may slice into growth, but failed to offer any plan to calm markets or quell mushrooming protests. On Monday, French truckers began blocking roads in the latest protest to pressure the government to help them cope with oil prices that have more than doubled in a year.

EIA: US Natural Gas Production Is On An Extraordinary Rise

By Denise Bode — Thu, 12 Jun 2008 00:00:01 GMT

According to the Energy Information Administration, natural gas production is breaking with historical trends and setting records with 9% growth overall. The large recent increases in supply came from across the Lower 48 States. But, more than half of the increase in natural gas production between the first quarter of 2007 and the first quarter of 2008 came from Texas, where supplies grew by an exceptionally high 15%. Other contributing regions included Wyoming with growth of 9%, Oklahoma with 6% growth, and Louisiana with 4% growth. Even production from the offshore Gulf of Mexico, which had been declining for years, increased 2% from first-quarter 2007 to first-quarter 2008. Natural gas production is increasing because of improved technology that has been developed over many years that includes unconventional sources as well as deep water production. Horizontal drilling is fast becoming the primary method used to produce gas from geologic formations like shale. Drilling and completing a horizontal well through shale has required improved technology, but these wells have become essential to the rapid economic development of unconventional resources in the United States.

Total U.S. proved natural gas reserves – resources that have been identified and tested and either have been or will be developed – have increased for the last eight years, and in 10 of the last 11 years. Recent drilling trends indicate continued growth, with a stronger concentration on unconventional resources like shales. What is important to note is the fact that we're seeing a 9% growth and even the EIA recognizes this reality. There are some unintended consequences of high gasoline prices.

Gasoline prices are at an all time high, and as a result some areas have reported reductions in the average amount vehicle miles traveled as consumers adjust driving habits. A number of influential highway officials have seized upon this news to advocate for a move away from gasoline tax-funded transportation networks to a system dominated by toll roads. On prices, crude oil is at $134 a barrel, natural gas is at $12 a thousand cubic foot and gasoline is $4.06 a gallon.

Flooding in the Midwest Causes an Upward Pressure on Ethanol Prices

By Denise Bode — Wed, 11 Jun 2008 00:00:01 GMT

Torrential rains and flooding in the Midwest could soon mean consumers face even higher prices for meat, eggs, dairy and other foods. And this comes at a time when we believed that it couldn't get any worse. The U.S. Department of Agriculture on Tuesday slashed its estimate for the volume of this year's corn crop because of wet and flooded fields, prompting corn prices to surge to new records on Chicago futures exchanges. Cattle futures prices also rose as traders bet producers would reduce herds - and future meat supply - in the face of mounting feed prices. It's part of the cause and effect element of the transportation fuel sector. The impact of the massive floods will be felt across the nation and consumers will find themselves shelling out more money for transportation fuel, food and services. Unfortunately, clear skies aren't in the mix as heavy rain is forecast for the Midwest later this week. Already, parts of southern Indiana, Illinois and Missouri have endured the wettest spring on record. The Department of Agriculture predicts a 10 percent decrease in corn yields from 2007.

The US Senate failed to pass a windfall profits tax on big oil-company profits and market speculators, as Republicans blocked Congress's first effort to address a record surge in oil prices. But it isn’t over. Sen. Byron Dorgan (D., N.D.) said Tuesday that Senate Democrats are working on a new energy package that would deal just with the issue of market speculation, which lawmakers suspect of helping drive up oil prices. In a sign that the package may have bipartisan appeal, Sen. Kay Bailey Hutchison (R., Texas) said Republicans might be open to such a plan, although they hope to pair it with increased domestic drilling.

Unjustified Oil Prices: Speculators Pushing the Market to New Highs

By Denise Bode — Tue, 10 Jun 2008 00:00:01 GMT

Saudi Arabia is indicating that they are actually concerned about what they call "unjustified crude prices." The Saudi oil minister has called for a meeting of producers and consumers to discuss the high prices of crude. Well, I'm a consumer and would love to be in that meeting. Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said yesterday oil supplies are ``largely sufficient.'' But of course, a managing director of Global Gestion in Paris believes that OPEC has limited ability to raise production over 2 million barrels per day. AMP Capital Investors in Sydney are more optimistic, however, stating that current prices aren't justified by supply and demand, but rather prices have become a classic speculative bandwagon with investors piling in with the hope of more gains ahead. AMP Capital wins the profound grasp of the obvious award. AMP also believes that oil may fall to about $100 a barrel within the next six months.

Algonquin Gas Transmission, a subsidiary of Spectra Energy, today announced it has submitted an application to the Federal Energy Regulatory Commission for its East to West Expansion Project. The project will direct significant new supplies of re-gasified liquefied natural gas from the eastern end of the Algonquin system into high-growth markets in the Northeast United States, including New England, New York and New Jersey, by November 2009. Spectra estimates that the East to West Project will increase the Algonquin system's current transportation capacity by more than 746 million cubic feet per day. The project is currently valued at $380 million. But the real value here is to consumers who have greatly desired affordable, abundant, clean burning energy in the northeast. Not only that, but the development itself will create new jobs and provide a boost to their economy.

Crude Prices Rise Even Higher

By Denise Bode — Mon, 09 Jun 2008 00:00:01 GMT

Drivers are paying an average of $4 for a gallon of gasoline for the first time. AAA and the Oil Price Information Service say the national average price for a gallon of regular gas rose to $4.005 overnight from $3.988. But consumers in many parts of the country have already been paying well above that price for some time. Gas is expected to keep climbing, putting greater pressure on consumers and businesses, because the price of oil is soaring in futures markets. Light, sweet crude shot up nearly $11 a barrel Friday and approached $140 for the first time. Along with higher fuel costs, consumers are also contending with higher prices for food and other goods because of rising transportation costs.

The price of crude oil is set to rise even further to $150 a barrel by the end of summer, Iran's representative to the OPEC oil cartel warned on Sunday. His comments came after New York's main oil futures contract, light sweet crude for July delivery, on Friday leapt 10.75 dollars a barrel -- its biggest one-day jump ever -- to close at a record $138.54. The rise was partly fueled by a warning by an Israeli minister about a possible military strike on Iran over its contested nuclear program. Iran, OPEC's number two exporter and the fourth biggest worldwide, has rejected calls from oil consuming nations for a hike in the output quota of the cartel, saying the high prices are not driven by fundamentals. Iran's President has also said that oil is priced too low and that the commodity should find it's "real value." Not to contradict Ahmadinejad too vehemently, but the truth of the matter is that there is no legitimate reason for high crude oil prices nor are there good reasons for $4 a gallon gasoline. Reports consistently indicate that supplies are steady, but what tends to drive the price of crude are speculators.

Natural Gas Infrastructure Makes Its Way to the Northern Plains

By Denise Bode — Fri, 06 Jun 2008 00:00:01 GMT

Norfolk, Nebraska may be getting the natural gas pipeline that developers said the city needed a year ago when plans for a $40 million soybean plant were scrapped when there was insufficient gas supplies. Norfolk officials this week announced plans to build a 54-mile natural gas pipeline. Nebraska Resources Company plans to build the pipeline and Aquila has agreed to ship gas through the pipeline to serve customers in Norfolk. They don¹t want to lose another business opportunity.

The planned pipeline would be an extension of a new, 140-mile pipeline that Nebraska Resources Company plans to build. The total cost of the entire pipeline is expected to be $85 million to $100 million. It could be completed in mid-2010. This is a similar problem that the northeast section of the nation has been facing for years and are just now beginning to seek relief through new infrastructure and pipeline projects. Consumers in northeastern states have been forced to struggle under the high cost of heating oil during the winter months.

The price of crude oil may be dropping, but consumers shouldn't expect gasoline prices to fall anytime soon. Since the end of March, skyrocketing oil prices have pushed up retail gasoline prices by more than 20%, so that prices at the pump hit records every week. In the past two weeks, however, oil prices have fallen back a bit.

General Motors Feels the Tide of a Changing Car Market

By Denise Bode — Wed, 04 Jun 2008 00:00:01 GMT

General Motors Corp. officially changed its old business model this week, closing four pickup and sport utility vehicle factories, announcing a new small car that could get 45 miles per gallon and shedding 10,000 jobs in the process. High gasoline prices are the ticket. In the past, costs generally were too high for Detroit automakers to turn a profit on small U.S.-built cars. But GM has lowered costs enough with new labor contracts and other measures to turn a profit. The new car likely would be priced higher than the Cobalt, close to $20,000. It would hit showrooms in the second half of 2010 and be powered by a 1-liter to 1.4-liter four-cylinder gasoline engine. GM said that with a manual transmission, it would get nine miles per gallon more than the current Cobalt, which gets up to 36 mpg on the highway. GM also announced that the board of directors has approved production of the Chevrolet Volt plug-in electric car, which GM plans to bring to showrooms by the end of 2010. Fully charged, the Volt could drive about 40 miles without using any gasoline, and a small conventional engine would recharge the vehicle, extending its range and allowing it to get the equivalent of 150 miles per gallon. Sounds good but may not be a fit for all Americans in all parts of the country. So, I would suggest that instead of going whole hog for small I would ask GM to think natural gas for those trucks and family vehicles.

I am driving my American made Honda natural gas powered internal combustion engine for which I payed $2 a gallon to fill and I can go 225 miles on a tank of nat gas. And I fill up at home why my Phil appliance. Many trucks and fleets around the country are easily switching to nat gas. And frankly, most families and small businesses need trucks and family sized cars. So instead of idling all these factories building vehicles that in many parts of the country are necessities, why not convert to building at least some trucks and family cars to use nat gas. Barack Obama sealed the deal for the Democratic nomination this week and in his speech Tuesday night, he made it clear that is serious about global warming. But we will see how serious, he did receive the endorsement of the United Mineworkers Union.

President Bush Lets His Views Be Known: The Climate Change Bill

By Denise Bode — Wed, 04 Jun 2008 00:00:01 GMT

Even before debate began on the first comprehensive climate change bill to reach the U.S. Senate floor, the White House said President George W. Bush would veto it in its current form. Bush himself slammed the bill, saying it would cost the U.S. economy $6 trillion. His estimate drew quick denials from those who support the legislation, including Sen. Barbara Boxer, a California Democrat and longtime environmentalist. The Bush administration has consistently opposed economy-wide measures to limit climate-warming emissions of carbon dioxide. The United States is alone among major developed countries in rejecting the carbon-capping Kyoto Protocol, which sets more stringent targets than the bill headed for Senate debate.

The bill's supporters maintain that the legislation's cap-and-trade provisions would create jobs and that the cost of doing nothing about climate change justifies action now. The bill would cap carbon emissions from 86 percent of U.S. facilities, and emissions from those would be 19 percent below current levels by 2020 and 71 percent below current levels by 2050, according to a summary of the bill's details released by the Senate Environment and Public Works Committee.

Kuwait will begin producing natural gas for the first time, but only for local consumption, the oil-rich U.S. ally said this week. Production will be raised to 175 cubic feet a day within 10 days, and the company aims to reach one billion cubic feet a day by 2015. While it pales in comparison to American natural gas production, it is significant for the Middle East nation because it shows their desire for diversification.

Ford Introduces the Global Car

By Denise Bode — Tue, 03 Jun 2008 00:00:01 GMT

Mexico’s President announced last week that Ford will build its new fuel-efficient Fiesta "global car" in suburban Mexico City and upgrade two plants here as part of a $3 billion investment, the largest in Mexican history by a foreign manufacturer. The decision is a major setback for the United Auto Workers union, which has pushed Ford and other manufacturers to invest in U.S. plants. But it was a coup for the Mexican economy after years of losing manufacturing jobs to China and other Asian countries. Industry analysts have long predicted that Ford would unveil a global car -- a subcompact designed to be easily built and marketed anywhere in the world -- but it was unclear until Friday which country would win the lucrative manufacturing deal.

As gasoline and diesel fuel prices have skyrocketed, Ford has suffered in particular because it relies strongly on sales of trucks and SUVs. Through April, light vehicles accounted for just 36 percent of Ford's sales, compared with about 60 percent at Toyota and Honda.

More good news for natural gas consumers, Brazilian state oil company Petrobras is studying a block in deep Cuban waters for possible exploration as part of broader cooperation with the Caribbean island. Seven foreign companies have signed exploration agreements with Cuban state oil company for over half of the 59 blocks available in the deep Gulf of Mexico waters of Cuba's economic exclusion zone fronting the United States. The US Geological Survey estimated the North Cuba basin could contain 4.6 to as high as 9 billion barrels of oil, and close to 1 trillion cubic feet of natural gas. Cuba produces the equivalent in oil and gas of 75,000 barrels per day, around 50 percent of its energy needs, importing the remainder from oil-rich ally Venezuela on preferential terms in exchange for health, education and other services.

High Oil Prices Engender a Sharp Rebuke from the American Consumer

By Denise Bode — Mon, 02 Jun 2008 00:00:01 GMT

The American people may have been getting what they have asked for, but just didn't know it. During continued volatility in oil prices, federal regulators announced that they had been investigating crude oil trading, storage and transportation for the past six months with a focus on possible futures market manipulation. The Commodity Futures Trading Commission, which normally keeps investigations confidential, said in a statement that it was "taking the extraordinary step of disclosing this investigation because of today's unprecedented market conditions." American consumers have been furious over they high cost of gasoline and talk shows across the nation have been flooded with phone calls demanding action.

Current market conditions have sent oil prices to record heights, adding to the U.S. trade deficit, hurting consumers and companies, and weighing heavily on the nation's economy. There are signs, however, that worldwide demand for petroleum products might be easing. MasterCard, the second-biggest credit card company, said this week that U.S. gasoline demand dropped 5.5 percent last week. Meanwhile, Indonesia, Taiwan, Sri Lanka and Pakistan have recently indicated that they would trim fuel subsidies and raise prices.

While prices are what they are, here are a couple tips to save gasoline. First, avoid prolonged warming of the engine - even on cold mornings. Second, avoid "revving" the engine needlessly, especially just before your switch the engine off. Tomorrow, we'll provide a few more tips for you.

Roundup: Fuel Taxes, Saudi Production, and the Craziest of Alternative Fuels

By Denise Bode — Thu, 29 May 2008 00:00:01 GMT

Two very surprising stories broke this week. First, U.K. Chancellor Darling said that he would offer increase in fuel taxes, to be introduced in October. That would further impact consumers there hit by the price of gasoline . And off the UK in the North Sea, two new developments were announced which is good news for consumers. The two new projects are due to start production in the first half of next year, producing up to 50,000 barrels a day at their peak. It should provided some relief but is still only be a tiny fraction of the 1.8 million barrels consumed daily by the UK. So higher prices for gasoline ahead even with some new oil production offshore.

Meanwhile, the world's leading producers say oil is too expensive and they plan to increase supplies,which is the second most surprising story. It was revealed that a source at Opec said its 13 members were uncomfortable with the current price of crude, which last week hit a record $135 a barrel. Based on present supply and demand, he said it should be fetching $60-$70 a barrel. And Saudi Arabia said it would increase production. The markets clearly do not agree with this source at OPEC because everyone believes that the run up on crude oil prices is here to stay, though it would be rather nice to hope that we might see $70 a barrel again.

The notion that vehicles powered by compressed air, organic waste or even water could usurp the place of the internal combustion engine might be dismissed as the stuff of science fiction. But an industry analyst says unconventional fuel sources are getting a once-over amid soaring gasoline prices, record-high crude and concern about climate change - testing automakers' ability to separate science from snake oil. North America's Big Three automakers - General Motors, Ford and Chrysler - are all moving toward fleets that will include natural gas as well as a mix of hybrid and electric cars and trucks.

Global Tensions Heighten Energy Worries

Denise bode — Wed, 28 May 2008 00:00:01 GMT

Iran's new parliament speaker warned that Tehran could impose new limits on its cooperation with the U.N. nuclear watchdog after a critical report from the agency. The country's former top nuclear negotiator, was overwhelmingly elected as parliament speaker this week. Moments later, he told parliament that a new report by the International Atomic Energy Agency was "deplorable." The unusually strongly worded report issued Monday said Iran may be withholding information needed to establish whether it tried to make nuclear weapons. His comments drew chants of "God is great" and "Death to America" from the chamber. In the past, Iran had extensive voluntary cooperation with the IAEA beyond its obligations under the Nuclear Nonproliferation Treaty, including allowing IAEA inspectors to visit its military sites as a goodwill gesture to build trust. But Tehran ended all voluntary cooperation with the IAEA, including allowing snap inspections of its nuclear facilities, in February 2006 after being reported to the U.N. Security Council.

What does this mean? Well, when there are increases in tension in the Middle East and let's face it, Iran is at the center, volatility in the energy markets is the aggregate result. Toyota announced Tuesday its third plant in Japan for producing batteries that are key components for the ''green'' cars. Just last week, it announced that it was building a second such battery plant. Toyota Motor Corp. has emerged as the world leader in hybrids with its hit Prius, which has sold more than a cumulative 1 million vehicles over the past decade. Sometime after 2010, it hopes to sell 1 million hybrids a year. For that, it needs to boost battery production as Honda Motor Co. and other automakers aim to catch up with their new gasoline-and-electric hybrids, a technology that is growing in appeal for the world's drivers as gasoline prices soar.

The Return of Your Small Car

By Denise Bode — Tue, 27 May 2008 00:00:01 GMT

Bigger might not always mean better even in Texas. For people unwilling or unable to trade in their gas-guzzling pickup trucks and SUVs, having a smaller, used car on the side seems to be the leading weapon in their fight against rising gas prices. Unfortunately, there seems to be a Catch-22 for the frugal minds hoping to save money by buying fuel-efficient cars. With gas prices getting dangerously close to $4 a gallon, a large number of small used cars are being sold. The high demand leads dealers to sell the coveted compacts at a higher price. A classic example of supply and demand. In Wichita Falls, Texas, automobile dealers are finding themselves making big profits on smaller cars, but are having a very hard time selling larger trucks and SUVs - both of which are being traded in for smaller, more fuel efficient vehicles. Interestingly enough, there is optimism from dealers and they believe that the skyrocketing fuel costs are only temporary and will probably ease after the summer driving season. We appreciate their optimism.

Spanish energy firm Gas Natural is promoting the use of natural gas as a vehicle fuel and is presenting its GN Auto business for the first time at the 2008 Madrid International Auto Show. Gas Natural has said that it is studying ways to encourage carmakers to adapt light vehicles to natural gas, with the aim of promoting the use of this alternative fuel in Spain, especially by private drivers. The company has said that more than 1,700 vehicles run on natural gas in Spain, mainly buses and waste collection vehicles, refueling in more than 40 service stations. Through its auto business, Gas Natural expects to manage filling station construction projects, from financial investment to maintenance and management, and already supplies compressed natural gas to the facilities. In February 2008, Gas Natural inaugurated the first public gas filling station in Valencia, Spain, which can be used by any vehicle that runs on the alternative fuel.

America at a Crossroads: High Energy Prices Collide with an Economic Slowdown

By Denise Bode — Thu, 22 May 2008 00:00:01 GMT

Wall Street pitched lower for the second straight session this week as record-high oil prices and a bleak economic assessment from the Federal Reserve deepened investors' worry that Americans may face several more months of rising costs and a shaky employment picture. High commodities prices have been a big source of anxiety for investors, as many retailers and credit card companies have noticed consumers paring back spending on discretionary items, including clothing and jewelry, to be able to afford necessities such as gasoline and groceries. Everyone is asking just what the answer may be, as though there is a silver bullet hiding in the American arsenal but there is not one solution. There must be a diversified energy portfolio that depends more on American sources of transportation fuels. Just as a perfect storm created the high prices, so must there be a perfect storm to ease the nation's burden. But the storm clouds may just now be starting to form.

As you prepare for this Memorial Day holiday weekend, here are a few tips to conserve your fuel. First, drive your vehicle as though you have an egg under your accelerator. Easing to a stop, smooth starts from a stop will dramatically reduce fuel consumption. Second, make sure your tires are properly inflated. Poorly inflated tires can reduce your fuel economy. Third, ensure your vehicle's fluids are changed every 3,000 miles or six months. Clean engine lubricants improve your gas mileage and extends the life of your vehicle. Lastly, and this may be difficult, try traveling when traffic congestion will be at a minimum. Most importantly, never forget what this holiday really means - we need to remember our men and women in uniform who have made the ultimate sacrifice for our freedom.

Congress Tries to Put the Pressure on OPEC

By Denise Bode — Wed, 21 May 2008 00:00:01 GMT

Defying a White House veto threat, the House on Tuesday approved legislation that would allow the Justice Department to pursue legal action against the Organization of the Petroleum Exporting Countries for conspiring to restrict supplies or drive up prices. It was the second time in a week that a majority of Republicans joined Democrats to support an energy measure over the Bush administration's objections and came as the average price for a gallon of self-serve regular set more records Tuesday -- $3.80 nationally and $3.976 in California, according to AAA.

Republicans and Democrats alike are feeling pressure from constituents in their respective districts so it's not surprising to see a bipartisan effort. Unfortunately, it's an easy out to blame OPEC for high crude prices and subsequent gasoline prices. Last week, Congress overwhelmingly voted to limit oil shipments to the government's emergency stockpile in hopes of putting more gasoline on the market. This week, lawmakers are bringing oil industry executives back to Capitol Hill for grilling. Politicians have expressed concern that speculators are forcing prices higher and Joseph Lieberman, the influential senator, said he was considering legislation to limit big institutional investors in commodities markets.

An Expanding Infrastructure Means Lower Prices for Consumers

By Denise Bode — Tue, 20 May 2008 00:00:01 GMT

Oklahoma, Texas, Arkansas and Kansas often forget just how good we have it where energy costs are concerned. While the national average for gasoline is at $3.80 a gallon, we're consistently below that price and where heating and power generation is concerned, being energy producing states, our costs are significantly lower than other regions. In the northeast, for example, the winter months are particularly tough seeing heating oil costs drain the pocketbook of residents. Well, help is on the way. Liberty Natural Gas has announced a joint venture with Canadian Superior Energy its $550 million Liberty Natural Gas Transmission Project as a new source of natural gas to meet the growing energy demands of the northeast. Liberty Natural Gas will be a deepwater pipeline system that receives gas fifteen miles offshore New Jersey, which subject to regulatory approvals, is expected to begin to deliver up to 2.4 billion cubic feet per day of natural gas by late 2011. Gas would reach consumers through existing or expanded natural gas infrastructure.

The U.S. Department of Agriculture released economic analysis that shows high energy prices, increasing global demand, drought and other factors -- not biofuels -- are the primary drivers of higher food costs. During a briefing on the case for food and fuel yesterday, U.S. Agriculture Secretary Ed Schafer pointed to the fact that oil prices have broken through a series of price ceilings this year. The National Biodiesel Board praised the Secretary for speaking out on the recent attacks on biofuels. "It is encouraging to see USDA documenting some of the real reasons for increased food prices. The American public is being duped on this issue." Duped or not, the higher costs of groceries is unmistakable.

Roundup: Abundant Natural Gas and Additional American Refinery Capacity

By Denise Bode — Mon, 19 May 2008 00:00:01 GMT

We have been saying that natural gas is American, affordable and abundant for weeks now and a government report last week underscores this reality. Natural gas in U.S. storage rose last week, rising above the five year average for this time of year. The Energy Department's Energy Information Administration said in its weekly report that natural-gas inventories held in underground storage in the lower 48 states rose by 93 billion cubic feet to about 1.53 trillion cubic feet for the week ended May 9. Natural gas prices, on this news, led losses in the energy sector with June futures trading 3.2% lower, it's lowest level in over a week. This report stands in stark contrast to much of the hyperbole we've seen out there regarding natural gas.

Since the Indiana Department of Environmental Management issued an air permit construction approval on May 1, BP has begun construction of additional American refinery capacity. The $3.8 billion investment to modernize the oil refinery and prepare it to process Canadian tar sands is the most expensive industrial development project in the state. In comparison, the new Honda plant in Greensburg, where it will produce 200,000 vehicles annually, will cost $550 million. On a vacant property at the north end of the refinery, the company is building a gas oil hydro treater, which produces an intermediate product that's later further refined into gasoline, Keilman said. The centerpiece of the Whiting upgrade is a process stage known as a delayed coker. It's a furnace where high temperatures are used to "crack" the long chains of hydrocarbons in residue into gas oil, which can be converted into transportation fuels. The project will increase the refinery's capacity to process heavy crude oil from Canadian tar sands by 260,000 barrels per day and increase gasoline and diesel production by 1.7 million gallons per day. BP estimates the modernization project will add about 2,000 contractor jobs during construction and 80 new permanent jobs.

Roundup: Biking to Work and Court Battles

By Denise Bode — Fri, 16 May 2008 00:00:01 GMT

Designating this week as "Bike to Work Week" might increase awareness of the value of commuting on two wheels, but it won't increase the number of people who leave their cars at home. Maintaining the upward trend in gasoline prices certainly will get more people looking in that direction. However, even as prices approach the $4 a gallon mark, high prices alone won't get people to embrace bicycle commuting. There are many obstacles - but those obstacles can be overcome if you're extremely creative. Some of the challenges include being able to clean up and change clothes after riding to work, living too far from work and feeling safe while sharing the road. Bicycling to work is obviously a great idea in urban settings but with our trend toward suburban sprawl, bicycling is just not practical.

The oil industry is bracing for courtroom battles to try to maintain its stake in the Alaskan oil fields now that the Interior Department has listed polar bears as a threatened species. About 15 percent of the nation's oil is being produced in Alaska. Soaring crude prices are pushing companies to look farther and farther offshore to seas which are frozen much of the year. Interior Secretary Dirk Kempthorne announced Wednesday that the continuing melting ice in Alaska means the polar bear is a species likely to be in danger of extinction in the near future. The oil industry says it's concerned the decision will fuel prolonged court battles over future oil exploration and production. The Interior Department's timing couldn't be worse because crude oil prices aren't easing any time soon and consumers are feeling the financial pressure at the pump and at the grocery store. This decision at this time could have much deeper ramifications than any of us realize.

Venezuela: Another Petro-Economy on the Scale of Saudi Arabia?

By Denise Bode — Fri, 09 May 2008 00:00:01 GMT

Venezuela's proven crude oil reserves have swelled to 130 billion barrels as of late April, marking a rise of 30 billion from its prior estimate, if you can believe these estimates! The Venezuelan energy minister said the South American state, which is a key member of OPEC, hopes to have its proven oil reserves certified at 235 billion barrels by 2009. Venezuela's new estimate of oil reserves puts the country in second place behind oil-rich Saudia Arabia in the league of countries controlling the world's biggest reserves. Saudi Arabia has the largest reserves of 236 billion, followed by Canada, Iran and Iraq. Venezuela through its national oil company CITGO is major oil exporter, especially to the United States. The leftist government of President Hugo Chavez forced multinational oil companies like EXXON Mobil and Conoco operating in the country to cede their operations to Venezuela. Rocketing world oil prices have enabled Chavez's government to reap a windfall in oil export earnings.

This week, the Energy Matters crew will be at the Alternative Fuels and Vehicles National Conference and Expo in Las Vegas, Nevada and will be bringing you insight as to what the industry is doing and how innovators are responding to America's transportation fuel needs. The annual conference features more than 200 speakers and is expected to draw 2,000 registrants for four days of activity, including workshops, sessions, networking, a Ride-n-Drive, a free public forum, and a trade show for fleets.

Big Savings: Fleet Vehicles and Alternative Fuels

By Denise Bode — Thu, 08 May 2008 00:00:01 GMT

Visitors at this week's GreenFleet Arrive ‘n’ Drive event at Rockingham Sweden are able to experience an impressive range of Volvo cars, including the new Volvo V70 2.5 FlexiFuel Turbo (FT) 200bhp police car, developed by Volvo to the specific requirements of the Emergency Services as part of its environmentally-friendly FlexiFuel offer. American law enforcement vehicles, conversely, are comprised of either the Dodge Charger with the big block Magnum engines, or the Ford Mustang GT - both are hardly economy vehicles. The new Volvo V70 2.5FT model is available to order in June 2008 and combines all the established benefits of Volvo’s unique V70 Police Specification build with the environmental consciousness of a FlexiFuel engine which, thanks to its turbo-charged power, means no compromise on performance either. The V70 2.5FT produces 300Nm of torque at 1500-4500rpm, a top speed of 130mph and 0 to 60mph in 7.6 seconds. Not quite as fast as the American Charger or the Mustang, but quick nonetheless. European police forces are very concerned about their "carbon footprints" and police fleet officers are very interested in the new Volvo. Fleets adopting vehicles powered by alternative fuels, such as E85 will see a variety of benefits. E85 will assist fleets in achieving a 20% reduction in CO2 emissions, a government target for 2010, without the need to change driver behavior, or compromising their driving enjoyment and comfort.

Brookhaven Tow, New York might convert all of its garbage trucks from diesel to natural gas, a move local officials say would cut back on harmful emissions and save taxpayers on fuel costs. The town is considering a contract with a California-based firm to build a compressed natural gas fueling station at the town's Medford landfill. Brookhaven officials could then approve a proposed $135-million contract with 13 private trash haulers. The contract requires the haulers to convert to natural gas. The move would carry a cost for taxpayers. The first year of the contract would cost about $19 million, while the final year of the current contract is about $17 million, Hubbard said. He said the cost of new equipment would be offset by fuel cost savings. Some town officials have lauded the switch to natural gas as a major step forward in the effort to go green.

Mad Money: Cramer's Crystal Ball

By Denise Bode — Wed, 07 May 2008 00:00:01 GMT

Mad Money's Jim Cramer believes that 2008 could be the year of natural gas. He also believes Democratic presidential hopefuls Hillary Clinton and Barack Obama should drop their windfall profit tax proposals for the oil industry, Jim Cramer told viewers of his "Mad Money" TV show Tuesday. Cramer said those proposals, in particular, would have a negative impact on natural gas drillers at a time when natural gas represents a clean, plentiful source of energy that could easily lead the country towards energy self-sufficiency until better alternative options are viable. Cramer extended his optimism to the entire natural gas sector. With the growth rates for a natural gas drillers averaging 15%, he said investors will be hard pressed to find such high growth in any other sector. He also mentioned the sector's excellent visibility as another plus. Let's be honest here; Cramer has been wrong in the past but his predictions for the natural gas market have been spot on. Think about this headline for a moment: "Oil prices rise to record near $123 a barrel on prediction of $200."

If only I had that kind of power, I would predict the Oklahoma Sooners would win the National Championship every year. Oil futures blasted to a new record near $123 a barrel this week, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages. Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks. A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of this week's buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say. The Energy Department raised its oil and gasoline price forecasts, but also predicted that high prices will cut demand more than previously thought.

The Fuel Cost Pinch: The Airlines Continue to Suffer

By Denise Bode — Tue, 06 May 2008 00:00:01 GMT

Rising fuel costs including crude oil near the $120 per barrel mark are forcing airlines to find ways to cut those expenses. Dallas-based Southwest Airlines Co. and Tempe, Ariz.-based US Airways and other carriers are flying planes at slightly slower speeds and taking other steps to conserve jet fuel. Flying planes more slowly burns less fuel, mirroring the same phenomena in motor vehicles.

US Airways, one of the major carriers at Dulles International Airport and Reagan National Airport, said it spent $823 million on fuel during the first quarter, a 50 percent increase from a year earlier. US Air lost $236 million during that period. US Airways has been slowing down its jets to help reduce fuel consumption, and CEO Doug Parker sent out a companywide letter in April stressing ways to save on fuel. Those include improving on-time performance so that airplanes are not wasting fuel on airport tarmacs before they depart, using one engine when taxiing, using lighter-weight service carts, consolidating maintenance operations involving motor vehicles, and asking airline employees to take fewer bags on trips.

With crude oil prices hovering at the record-breaking $120 per barrel and the summer travel season right around the corner, expect to see more conservation strategies being made public by the airlines. Four months after first hitting triple digits, oil breached $120 a barrel for the first time in a rally of unexpected intensity.

The New Boom: The Marcellus Shale

By Denise Bode — Mon, 05 May 2008 00:00:01 GMT

Landowners and natural gas drilling companies are not the only ones reaping the benefits from the natural gas boom in Northeastern Pennsylvania. Although just a handful of drilling operations exist in the region, according to the state Department of Environmental Protection, local businesses providing services and products to those working for natural gas drilling companies are profiting. Hotels, restaurants, markets and other shops have seen increases in business, dovetailing from the growing number of land representatives flocking to the region.

Local lawyers, financial advisers and environmental consultants are also in high demand. Landowners are having lawyers and environmental consultants review leases before signing. The money is pouring into the area because investors and companies believe that the Marcellus Shale, which stretches through Pennsylvania into Ohio and West Virginia, is promising. A study by geologists at Penn State and State University of New York at Fredonia reported the shale could contain 168 to 516 trillion cubic feet of natural gas. Technology allows for 10 percent of the gas to be recoverable. Many predict extracting natural gas from the Marcellus Shale will domino into an economic boom for Northeastern Pennsylvania. In Texas, where companies have drilled in a formation known as the Barnett Shale, about 55,385 permanent jobs were created in 2007.