A false sense of security
19 Nov 08 | Conservation, EnvironmentI continue to watch in amazement as fuel oil prices (and energy prices in general) plumet from there summer time record highs. Home heating oil has decreased by nearly 38%, from $4.80/gallon to the current price of $3.018/gallon.
The reason given on most news channels is the demand dropping off due to the bad economy. Maybe, but I have another theory. Demand is off by roughtly 5.2% over the same period last year. The price per barrel of oil has dropped from a high of $147/bbl to about $56/bbl today, or a decrease of 62%.
Something doesn’t quite add up here. Perhaps it has something to do with the less than transparent oil hedge fund speculation. In fact, the hedge funds came to light last summer, when congress considered banning the practice, but choose not to. So what is a hedge fund?
That is an investment that is betting on the price of some comodity will go up. The idea is to buy low, sell high. With oil, that was a pretty safe bet until recently. Some hedge funds completely collapsed, leaving investors holding the bag.
As oil prices began to fall toward the middle of July, these funds began to dump there crude holdings, thus, the market became very soft for crude which lead to the price collapse. So, was the the end of high oil/gas prices?
No, most experts agree that oil prices will go back up, even before the economy begins to recover. Indeed, OPEC has already cut production once to prop up prices. That effort was ineffective, so no doubt they will try again at their next meeting.
In the grand scheme of life, spending money, especially large amounts of hard earned cash, is always somewhat difficult. The exact perfect time to invest in a renewable energy system may never arrive. After all, there are many other things to spend money on, a new car, a new bathroom or kitchen, that trip the the Bahamas that you always wanted to take. However, wouldn’t it be nice to know that you are not being manipulated out of your money by wealthy hedge fund operators? Wouldn’t it be nice to know that you are not dependent on buying oil from people who don’t like us? Wouldn’t it be nice to know that you have lessend your impact on the environment, even if it did cost a little more in the short run?
In the coming months, we may be called upon to sacrifice for the good of our country. The time has never been better to install a renewable energy system, what better way to support the local economy, create jobs, reduce imports, reduce the trade deficite, improve the environment and take back control of your life.
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Tags: Commentary, energy costs, Environment
Home Energy Assistance Program (HEAP)
18 Nov 08 | Commentary, Conservation, EnvironmentMost HEAP (programs) are designed purchase heating fuel for those who can’t afford to buy it on their own.
To this, we should all say “Thanks, but no thanks.”
On the surface, it seems like a really good idea. After all, nobody wants to decide between heating and eating. No reasonable person would want to see somebody freezing to death. Low income families who can least afford to invest in energy conservation are particularly dependent on HEAP. This situation just perpetuates the cycle. Many low income families are renters, they cannot afford to do energy saving improvements to the dwelling that they occupy. Since the land lord is not incurring the utility expenses, there is little incentive for them to take any action.
HEAP should be geared toward energy efficiency improvements, not just paying for oil, electric, or gas. Land lords need to be encouraged to retrofit older buildings with energy efficient windows and doors, adding insulation, installing energy efficient lighting and heating equipment. There are millions of old buildings in the US that could use upgrades, the completion of which would save enormous amounts of energy annually. Those types of improvements will net the biggest bang for a buck. Instead of buying oil for one season, the HEAP money will improve the conditions inside the building for as long as it is standing.
It is really nice to see the fancy new Zero Energy houses, that is the future. At the same time, existing structures are, more than likely, not going to be replaced any time soon. Most older structures can be made reasonably energy efficient at some expense. This is a quick list of energy saving items that will quickly pay for themselves:
- Perhaps the easiest thing to do is to add blown in cellulose insulation to the attic. The material for a 1500 Square Foot attic (to R-49) costs about $850.00. Installation varies, but it should not be more than $4-500.
- Caulking, weather stripping and sealing. Easy to do, should cost about $1-200 tops.
- Adding blown in cellulose insulation to walls. More difficult than attic insulating as often access holes need to be drilled in the walls. Material costs depend on the size of the house. Total job costs between $4-7,000. Also, if the house was previously insulated with blown in cellulose, the insulation has a tenancy to settle, so it may need to be “topped off”
- Replacement doors and windows. Depending on the number and size of the windows and doors, can range from $4-15,000.
- Replacement of older furnaces and boilers. Most furnaces over 20 years old are inefficient by today’s standards. Replacement can save quite a bit of money on heating fuel costs. Usually between $3-6,000 depending on size and make of new equipment.
- Installation of energy saving devices such as programmable thermostats, out door temperature resets for boilers, temperature controlled steam vents for steam radiators, etc. These costs vary, but often the device will pay for itself within a year or two.
In addition to the tenants saving money on heating, the property owner will increase the value of the rental property by having a more energy efficient building. In short, these energy saving upgrades will be a much wiser investment than simply buying oil.
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Tags: energy efficiency, heating
Five Good Reasons to Install a Solar Energy System
02 Nov 08 | Conservation, Environment, Solar Electric, Solar Hot Water, solar thermalA friend of mine has a blog called “Today’s Green Construction.“ Todd is a principle engineer for a large construction company and when it comes to construction, he knows what he is talking about. Recently, he wrote an article called “OPEC is the Best Reason to go Green,” which I thoroughly agree with. That got me thinking about other reasons to go green and more specifically, to install solar systems.
So here they are, Five (really) good reasons to install a solar energy system:
- Energy independence. No two ways about it, solar systems save energy. If you heat your hot water with oil, propane, natural gas or electricity, you are almost certainly using fossil fuels. Some percentage of that is likely to come from imports originating in countries that don’t like us, except for our money. These countries include Saudi Arabia, Iran, Venezuela, and Russia. The less energy we use from those source, the less petro dollars that will have to use against us. My last customer stated “Every dollar that I don’t send to the middle east makes me happy.” Amen, brother.
- Cost savings. Saving energy means saving money. With fuel prices rising, all energy costs are going up, even domestically produced natural gas. Solar systems will pay for themselves many times over during their operating lifetime. By installing solar equipment, expenses are fixed at their current levels, so as inflation and other economic pressures cause prices to go up, a homeowner that has solar installed will be paying the same price as before. Remember when gas was $1.00 per gallon?
- Environment. Saving energy also means reducing emissions. This varies from fuel to fuel, but almost all fossil produce sulfur dioxide and nitric oxides, additionally, carbon monoxide, carbon dioxide, volatile organic compounds VOC’s and toxic metals can also be released into the atmosphere. Reducing energy also means reduction in energy used to extract energy being used. The fuel oil delivery truck uses diesel to bring the fuel to a building, that is energy used to supply energy.
- Green Jobs. The more demand for solar (and other green) equipment, the more jobs will be created right here in the United States. As a solar contractor, I only purchase equipment that is manufactured here. Last summer, when my normal supply of solar thermal panels dried up, I could have purchased panels made in Israel. I opted to wait for the US panels, even though it meant loosing business. Not that I don’t like Israel, I just thought that there was a lot of transportation overhead involved with shipping a panel from half way around the world, and I would rather support the company making products that I know here in the US.
- The future. The earth has a finite amount of oil and other fossil fuels. Some of those fuel, like natural gas (which is mostly methane) does regenerate, but in much smaller amounts through landfills and large manure digesters. Others, like oil and coal, do not replenish themselves. Most geologists agree that we are approaching or have passed the peak oil point, which is the point where oil extraction begins to drop off as resources are depleted. In order to maintain the society that we and our forefathers have built, a replacement energy system needs to be implemented, else we will find ourselves in a new dark age. Some predictions are dire, but that does not have to come to pass.
These reason also apply to wind power, geothermal, tidal, and all other renewable energy sources. Renewable energy is no longer alternative energy, it must grow into our primary energy source.
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Tags: photovoltaics, solar economy, solar thermal
Greenwashing Coal
16 Oct 08 | Commentary, EnvironmentWe have a serious energy problem our hands. I fear it will get worse before it gets better. We may need to build more coal fired electric plants to meet future demands for energy, especially if we migrate to electric vehicles. Hey, that electricity has to come from somewhere. Unfortunately, solar electric, either by harnessing heat to make steam or photovoltaics, is still a long way from being able to fill that demand.
To bridge that gap, we have but two choices, nuclear or coal. I am not sure what the lesser of those two evils are. That being said, please don’t tell me that coal is clean.
Coal is anything but clean; from its extraction to its final use, coal is dirty. From the mountain top removal sites in West Virgina, where environmental damage is almost indescribable, to the electric generation station billowing out not just CO2, but Sulfur Dioxide, Nitric oxides, Mercury, Uranium, Cesium and other heavy metals, the damage to the environment is nearly incalculable.
Ask the residents of the West Virgina coal region whether they are prospering along with the companies that mine the coal. Ask anyone living down wind from a coal fired power plant how they feel on a day to day basis. Look at the environmental record of both the coal producers and the power producers. Is this the kind of behavior we want to reward?
Somewhere along the line, somebody decided that all business was about greed. Being the good consumers that we are, we happy citizens followed right along and made our personal lives about money. After all, coal is cheap, the energy produced by coal is cheap, therefore it must be good.
There are, indeed, new technologies that greatly reduce the emissions of coal fired electrical power plants. These include things like scrubbers to remove nitric and sulfur compounds, CO2 capture and sequestration. These newer technologies are not normally retrofitted to older facilities. The average life span of a coal fired power plant is anywhere from 30 to 50 years. The plants that were previously built will continue to spew pollutants for years to come.
Not everything is about money. There are quality of life issues as well. Even if you live hundreds of miles away from any coal mines or power plants, eventually, the environmental damage will be so great that you will be effected.
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Tags: big coal, clean coal
The Truth about Offshore Oil Drilling
04 Aug 08 | Commentary, Conservation, EnvironmentYou have been hearing all sorts of things about drilling for oil offshore. The White House insists that it is the answer to at least some of our energy problems. Various news organizations have put out some interesting, if not slightly contrary and confusing stories on the subject.
I thought I’d boil it down to U.S. product vs. U.S. consumption.
Oil is a world wide market commodity, which means just because it was produced in the U.S. doesn’t mean it will be used here. Think of it as a huge jug with a bunch of straws stuck in it. Everyone sucks out what they need and then pays for it. That being said, I am going to analyze this as if it where only a U.S. problem, e.g. all oil produced, including the new offshore oil, will only be used in the U.S.
The offshore oil facts:
- The U.S. Department of Energy (DOE) proven non-producing reserves are 5.2 billion barrels (5,147,000,000) of oil. Some estimates show about 18 billion barrels (18,000,000,000) of recoverable oil in the offshore areas currently closed to drilling. Other estimates are much higher, about 78 billion barrels. For sake of argument, we will use The President’s numbers (18 billion).
- The U.S. currently uses 20.68 million barrels (20,680,000) of oil per day. This is projected to rise at 1.4% per year (source: DOE).
- The U.S. currently produces 5.064 million barrels (5,064,000) of oil per day. This is decreasing by about 1% per year (source: DOE)
- At current use rates, drilling in the offshore areas currently closed would provide about 2.4 years of oil (18,000,000,000 bl ÷ 20,680,000 bl/day = 870.4 days or 2.4 years ).
- It will take at least 10 years to bring the first oil well on line, by that time we will be using 23.77 million barrels per day and producing 4.58 million barrels per day. By this math, the new reserve could supply 938 days (18,000,000,000 bl ÷ (23,770,000 bl/day - 4,580,000 bl/day = 19,190,000 bl/day) = 938 days) or ~2.6 years of oil including current production.
Any way you slice it, clearly we have a problem. Drilling in offshore areas will give us 2.6 years of oil. The Arctic National Wildlife Refuge (ANWR) is though to contain about 10.4 billion barrels of oil. If drilling were allowed there, it would add 503 days (~1.4 years) to our oil supply.
Thus, the total Bush energy plan would add ~4 years of crude oil to our dwindling supply. Clearly not a long term plan. Even if we allow for reduced consumption due to higher prices, the outlook does not look good. During the first part of 2008, gasoline usage dropped by 1% over the same period in 2007. Overall demand for light sweat crude fell by about the same amount. For all the hullabaloo about high prices, not much of a dent.
Start thinking about this, plan ahead and be prepared. Perhaps nothing bad will happen, perhaps somehow energy use will be properly managed and everything will be okay…