Recent News: Happy Anniversary: Thirty-Five Years After the Oil Embargo

October 17th’s seen its share of historic events: The end of the Babylonian exile, Cornwallis’ surrender, the Great London Beer Flood, Al Capone’s tax conviction, the Mets won a World Series game.

But the biggest of all may have come October 17, 1973, when OPEC imposed the oil embargo against the West and first used oil as a political weapon. That led to a decade of supply shocks, rising prices, and a global energy crisis—but also to a new generation of small, fuel-efficient cars and a never-since-matched energy conservation effort in the U.S.

Thirty-five years later, the world is still on tenterhooks, waiting to see what OPEC does with the oil spigot. This time, though, an embargo isn’t in the cards—just an old-fashioned cut in oil supplies. The oil cartel will meet next week in Vienna, and will cut at least one million barrels of oil production per day, Qatar’s oil minister said. OPEC could cut further at its regular December meeting.

That’s probably a bigger cut than will actually be needed to balance global oil supply and demand and stabilize falling oil prices, Barclays bank argues. Demand for oil is plummeting with the economic crisis and will likely fall even more next year. And non-OPEC countries notoriously miss their oil-production targets. Which means the oil market will probably come into balance early next year anyway. But oil markets are impatient, and want balance now. Says Barclays:

In other words, and not for the first time, OPEC is likely to find that to stabilise the market it may have to cut far more than is strictly necessary to stabilise quantities […] The classic symptoms of a medium-term price overshoot following a short-term price undershoot do appear to be lining up at this point.

The outlook isn’t just limited to prices yo-yoing past equilibrium. OPEC aims to hogtie prices in the range of $70 to $90 a barrel, but that cheaper level of oil makes a lot of new exploration projects economically unattractive. The credit crunch is mothballing exploration projects, too. At the same time, production is steadily dwindling at plenty of existing oil fields. That combination means the world will likely soon face a supply crunch again in the next few years, Nobuo Tanaka, the head of the International Energy Agency, told Dow Jones Newswires:

“On the basis of the current structure of the supply side, there’s not enough investment to catch up with the demand side, so the price of oil is likely to rise over the medium to long-term,” Mr. Tanaka said.

The 1973 embargo first got the U.S. and other Western countries seriously thinking about new energy strategies. Thirty-five years on, has anything really changed?

Recent News: Americans for Clean Energy Applauds Renewal of Solar and Wind Energy Tax Credits

Grassroots organization links public's voice to Congress using Facebook.

Washington, D.C. (PRWEB) October 6, 2008 -- As part of the Emergency Economic Stabilization Act, Congress renewed the solar and wind tax credits. Americans for Clean Energy (www.americansforcleanenergy.org) (ACE) organized thousands of members in the months leading up to the Act to connect Congress with Americans across the country who want green jobs and a more secure energy future for the U.S.

Thousands of ACE members joined an ACE-created Facebook Group and made more than 20,000 calls to Capitol Hill. This effort is one of the first and largest political mobilizations using Facebook and social media.

"Renewing solar and wind tax credits will lead directly to thousands of good paying green jobs across the country, said Jack Hidary, Chairman of ACE, "We are also pleased that Congress has included a tax credit for plug-in electric vehicles. Our dependence on oil continues to grow and the adoption of plug-in vehicles is critical to achieving energy independence (www.americansforcleanenergy.org) for America"

"We mobilized thousands of members of our group using Facebook and other technologies," said Steve Boyd, Executive Director of ACE. "Our members called in to Congress at key points over the past several months to let our representatives know how important this issue is to them."

"By extending the solar credit for eight years, Congress has finally given the private sector the right signal - it is time to invest in renewable energy," said Josh Becker, co-founder and Board Member of ACE, "Solar manufacturing companies, as an example, have been reluctant to build out manufacturing plants in the US without a long-term market signal. Now they have one."

The Stabilization Act, signed into law this past week, provides for an eight year extension of the investment tax credit (ITC) for solar energy. With this eight year extension, solar manufacturers will for the first time be able to confidently invest in job creating operations in the U.S.

In addition to the solar tax credit, the package also includes a one year extension of the producer tax credit (PTC) for wind energy (www.americansforcleanenergy.org). Americans for Clean Energy will ask Congress to extend the wind tax credit in the next session.

About Americans for Clean Energy:

Americans for Clean Energy (www.americansforcleanenergy.org) is a bipartisan organization focused on renewable energy and clean technology. Americans for Clean Energy supports the increased adoption of solar, wind and other renewable energy sources, as well as clean transportation solutions. Americans for Clean Energy uses its Facebook group and fan page and other technologies to organize thousands of members. For the link to its Facebook group and more information please visit www.americansforcleanenergy.org.

Contact Info:

Steve Boyd

202-442-0442

Boyd.steve @ gmail.com

Tax credits clear final hurdle as House approves Wall Street bailout

The House today easily approved, and President Bush subsequently signed, a massive Wall Street rescue package that extends a slew of renewable energy and efficiency credits.

The House vote was 263-171.

The $17 billion energy tax package provides a one-year extension of the expiring production tax credit for wind projects and a two-year extension of production incentives for geothermal, biomass and several other energy types.

It also provides an eight-year extension of credits for investments in residential and commercial solar projects, and incentives for energy efficient homes and buildings, plug-in vehicles, biofuels, advanced coal projects and other technologies.

The alternative energy sector and environmentalists lobbied hard for extension of credits for various renewable power projects, warning that allowing the incentives to lapse would cost scores of jobs and slow deployment of technologies that are crucial to fighting global warming.

House Speaker Nancy Pelosi (D-Calif.) said the various energy provisions in the bill (H.R. 1424) would create and save a half-million jobs. An earlier version of the bailout bill without the energy tax credits failed in the House in a 205-228 vote on Monday. The Senate added the energy language and other tax provisions as a "sweetener" to attract additional votes in the House. A new jobs report from the Labor Department today and political pressure from the White House and presidential nominees also helped move some votes.

The bill pays for the energy tax breaks in part by limiting oil industry tax incentives, casting aside industry warnings that it could slow investment in domestic oil projects. The largest oil industry revenue-raiser would freeze the Section 199 deduction for the industry at 6 percent, which would raise an estimated $4.9 billion over a decade.

But environmental groups also suffered a loss, failing to convince lawmakers to strip several fossil fuel credits, including incentives for refinery projects to process oil shale and oil sands.

The bill is a major victory for the solar industry, which had lobbied for a long-term extension of incentives for the sector.

The wind industry avoided a lapse in the production tax credit, which industry officials claimed would have been devastating. The credit is key to financing wind projects, and project growth has fallen sharply when the credit has lapsed in the past.

Other provisions include $1.5 billion in credits for advanced coal projects that control carbon emissions, separate credits on a per-ton basis for underground storage of carbon dioxide from industrial sources, extension of credits for biodiesel production, and extension of credits for installing alternative fuel pumps at gas stations.

Efficiency measures include extension of credits for energy savings improvements in existing homes, efficient new homes, energy savings in commercial buildings and the manufacture of efficient clothes washers, dishwashers and refrigerators. Another provision provides accelerated depreciation for "smart" electric meters and grid equipment.

The bill also includes $3.3 billion for rural counties hurt by the decline in timber sales on federal lands. It would reauthorize the Secure Rural Schools and Community Self-Determination Act for four years, phasing down payments each year, and would readjust its funding distribution formula. It also includes four years of mandatory funding for the Payments in Lieu of Taxes program.

Renewable sector cheers, but wind power wants more
The solar industry applauded the bill. In addition to the eight-year credit extension, the bill removes a $2,000 cap on the size of the residential credit and makes other changes that the sector says will make residential and commercial solar more widely deployed.

"This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses, and communities," said Solar Energy Industries Association President Rhone Resch in a statement.

A wind industry official praised Congress but pledged to work for a longer extension of the wind credit, which was renewed for one year in the bill. The credit is now available for projects placed in service until the end of next year.

"We look forward to working next year with a new Congress and administration to fashion a serious long-term clean energy policy that increases domestic energy, increases our reliance on clean renewable energy, and creates jobs for Americans," said Greg Wetstone, a lobbyist for the American Wind Energy Association, in a statement.

Congress Passes Solar tax credit

California solar power companies are breathing a sigh of relief as Congress on Friday passed a solar tax credit that could provide billions in future funding.

The renewable-energy Incentive Tax Credit bill was attached to the larger $700 billion Economic Growth and Financial Stabilization Act of 2008, which passed on a 263-171 bipartisan vote and was signed by President George Bush a few hours later.

The tax credit portion of the law beefs up and extends an expiring tax credit for renewable-energy projects. It extends a wind power credit for one year, extends geothermal and biomass energy credits for two years, and provides incentives to the solar industry -- such as the removal of a $2,000 credit cap for residential solar installations -- for eight years, until 2016.

Other provisions include $800 million for clean-energy bonds. The total package is worth $17 billion over eight years.

Recent News : Economic crisis rattles cap-and-trade debate

Darren Samuelsohn, Greenwire senior reporter

With both presidential candidates vowing to proceed with aggressive climate agendas next year despite titanic economic woes, many experts are warning that those ambitious plans must be changed to reflect a diminished national appetite for new programs with hefty price tags.

"They have to keep it front and center in a way, but clearly the fiscal straitjacket already there will be strapped and pulled considerably tighter," said Norman Ornstein, a congressional expert at the American Enterprise Institute, a conservative think tank.

Several ideas could gain traction as promising revenue-neutral alternatives for curbing heat-trapping greenhouse gas emissions -- including carbon taxes or a "cap and dividend" system that recycles the program's revenue to taxpayers while promoting energy conservation.

Full Article At: Greenwire