The last few weeks have had lots of articles on oil and
energy. I've got to admit having a sinister glee in reading
all this and predicting the results. Mostly it is fun to
see the impact it is having on those in denial. I know
many people are depressed by this topic.. but as it
gradually creeps up we need to to evaluate its seriousness.
My prediction of inflation (if the current oil price increases)
is now one step closer. Here is the latest from DOE's Energy
and Information Administration:
----
It is becoming increasingly apparent that, so far as gasoline
markets are concerned, the United States is moving into
uncharted territory. For our current set of projections, and
particularly for the next month or so, the degree of
uncertainty concerning the likely path for gasoline prices is
particularly high." See the "Gasoline and Diesel Fuel
Update," prominently featured on the EIA home page at:
<http://www.eia.doe.gov/>.
----
Politically the impact of energy on the economy has been
getting lots of action. Clearly it is a concern and i'm
still confident my inflation prediction has a good chance.
The immediate impact of increased oil costs has already
hit, but the secondary hit will be the big one. Many products
and services today have most of their cost based on energy
and this will now begin to appear. Things like a can of
coke is mostly energy costs. I can't remember the exact
ratio but i think our agriculture systems imports ten times
the energy that is produced by the growing plants. In other
words our economic systems are leveraged by energy.
Here are some other energy related news items:
----
The National Association of Home Builders (NAHB)
Research Center, the Partnership for Advancing Technology
in Housing (PATH), and Energy Partners, L.C. have formed
a partnership to evaluate the use of fuel cells for use in
residential construction.
at: <http://www.nahbrc.org/aboutrc/pressrel/021100.htm>.
DOE announced last week the initiation of a five-year
research project to develop cleaner and more fuel-efficient
trucks
<http://home.doe.gov/news/releases00/marpr/pr00058.htm>.
DOE announced last week the award of $132.7 million in
state grants to help reduce energy costs for low-income
households.
<http://home.doe.gov/news/releases00/marpr/pr00057.htm>.
A new report by DOE's Energy Information Administration (EIA)
provides more information about fuel oil use. Roughly ten
percent of all U.S. homes use fuel oil for heating,
providing hot water, or other uses.
<http://www.eia.doe.gov/emeu/recs/recs97/recs022900.html>.
Last year, home expert Bob Villa and a team of volunteers
from Habitat for Humanity joined together to build a house in
Yonkers, New York, in less than a week. The "blitz build"
was featured on Bob Villa's "Home Again" television show,
which focused on many of the energy-efficient technologies
at use in the new home.
<http://www.bobvilla.com/aahome.htm>.
Secretary of Agriculture Dan Glickman announced that USDA's
Commodity Credit Corporation will provide up to $100 million
in fiscal year 2000 and up to $150 million in 2001 and 2002
in incentive payments to ethanol and other bioenergy
producers to expand the production of biobased fuels. See
the USDA press release at:
<http://www.usda.gov/news/releases/2000/03/0088>.
DOE has released its research and development portfolio for
fiscal year 2001, which includes an initiative to develop
ultra-clean transportation fuels. See the DOE press release
at: <http://home.doe.gov/news/releases00/marpr/pr00073.htm>.
DOE's Energy Information Administration (EIA) released its
"International Energy Outlook 2000" last week, with energy
projections through 2020. Under current energy policies, the
report projects world energy consumption growing by
60 percent from 1997 to 2020, with developing nations
increasing their energy use by 121 percent. According to
EIA, the growth in energy use will include a 70 percent
increase in electricity use and will drive a 41 percent
increase in oil consumption and a doubling in the use of
natural gas. As a result, EIA projects a 72 percent increase
in carbon emissions from 1990 to 2020. See the EIA press
release, with a link to the full report, at:
<http://www.eia.doe.gov/neic/press/press151.html>.
