[Rhodes22-list] Alternative Energy

[Hank]

Brad,

I've always understood that diesels didn't like to be stopped and started so
much.  do you think a diesel would work well in a hybrid where it could be
constantly started and stopped?

Hank


On 5/17/06, brad haslett <flybrad at yahoo.com> wrote:
>
> For those of you interested in alternative energy,
> here is a link to a site I get regular e-mail updates
> from:
>
> http://www.renewableenergyaccess.com/assets/newsletter/
>
> Read the article on European bio-diesel production.
> ADM's stock price has recently run-up on the ethanol
> shortage.  I still think corn based ethanol is a loser
> but sugar based ethanol is another matter (read the
> article on Brazil). ADM is also big in biodiesel in
> Europe. In 1979 when oil got to $80+ per barrel in
> today's dollars, I bought a VW diesel Rabbit that got
> 50 mpg.  Couple that with an electric hybrid drive and
> you could get 90 mpg.  This is off the shelf
> technology.  When oil gets to $100 per barrel (it
> will), the technology will come off the shelf. Below
> is an excerpt from a paper I wrote two years ago (oil
> was at $55).  I'm not precient, a seventh grader could
> have guessed where oil markets are heading.  There are
> only two things one needs to know about worldwide oil
> demand - China and India.
>
> Brad
>
> .....    The latest run-up in crude oil prices was not
> as lucrative for some mid-level producers as one would
> think because many companies hedged their production
> at price levels far below the eventual high mark of
> $55 per barrel. This should encourage airlines in the
> short run because oil producers do not think the
> current prices will remain at their present level.
> The longer-term forcast is not as comforting. Oil
> price forcasting is a tricky and often an elusive
> pursuit, however, observing how oil companies have
> responded to the most recent upturn in prices should
> give airline managers some insight to how the
> suppliers of the second most expensive input to
> airline operations think the market will behave.
> While oil companies are currently enjoying substantial
> profits from the rise in crude oil prices, few have
> stepped up discovery budgets far beyond what was
> previously budgeted.  This would indicate that they
> think the current situation is temporary and prices
> will return to "normal" in the near future. The bulk
> of both large and small production companies have used
> the excess cash from earnings associated with high oil
> prices to pay down debt, buy back stock, and reward
> shareholders with increased dividends rather than step
> up exploration.  While this should encourage airline
> managers that fuel prices are falling, the longer-
> term outlook in the oil industry should be cause for
> alarm.
>
> The concept of  "peak oil", that is the eventual high
> point of worldwide oil production, has been discussed
> since Colonial Drake's first oil well.  A Shell Oil
> geologist and later professor emeritis of geology at
> Princeton University, L. King Hubbert, wrote a
> scientific paper in 1956 which was derided by his
> employer and peers and became known as "Hubberts
> Peak".  Hubbert theorized that oil production lags oil
> discovery by roughly forty years.  Since discovery
> peaked in the US in the thirties, he predicted that
> production would peak in the early 1970's. US domestic
> oil production did in fact peak in 1970.  His later
> prediction was that since world oil discovery peaked
> in the sixties, world oil production would peak
> shortly after the turn of the century.  While it is
> still too early to tell with certainty, there is much
> evidence to indicate that his second prediction is
> eerily accurate as well.  As production peaks, crude
> oil prices will rise with a constant demand.  With the
> rapid modernization of China, and to a lesser degree
> India, world oil demand is rising rapidly at the same
> time production capacity is falling.  The history of
> oil prices has been one of a fairly stable trend line
> with wild but short lived swings away from the mean.
> If Hubbert's Peak prediction holds true, we may see a
> shift away from the fundamental futures forcasting
> models and a substantial rise in the baseline price
> range for crude oil.  This should give pause to
> airline executives and further encourage them to adopt
> hedging operations to smooth fuel cost fluctuations
> and earnings swings.  A majority of oil industry
> analysts believe that there is a fundamental paradigm
> shift in oil price trends.  Where in the past,
> volatility was due primarily to geo-politics; future
> price swings will be more a function of geology.  This
> new paradigm can be seen by looking at the reserve
> life index (RLI) of global oil reserves, a
> simple-to-calculate metric: total reserves divided by
> total production.  Simply put, the higher the RLI, the
> greater the oil market's long-term growth potential.
> The current situation does not look encouraging.  In
> the past 30 years, RLI has dropped from 119 years in
> 1970 to 47 years in 2004.  This trend is not reversing
> but in fact seems to be accelerating with some
> estimates that RLI will only be 20 years by 2020.
> This has a very ominous meaning for airline
> executives.  Where in the past oil prices have been
> determined by short-term political and economic
> factors, future prices will be a result of market
> recognition of the structural imbalance between demand
> and supply.  Detractors from this theory will point to
> "un-discovered" oil fields as the weakness in the
> Hubbert's Peak argument but the oil industry's
> reluctance to substantially increase discovery efforts
> during a period of high oil prices should give little
> comfort.  Most of the large and medium sized oil
> companies have chosen growth through merger and
> acquisition rather than the drill bit.
>
> The rising world demand for crude oil with a flat or
> declining supply of the raw product will have serious
> impacts across a broad spectrum of industries but
> perhaps none more so than airlines.  While many
> industries can switch to other sources of energy and
> raw materials, there is no substitute for crude oil
> derived jet fuel and no alternative fuels are expected
> for decades.  Prudent airline managers would be wise
> to closely follow investment and performance of oil
> companies to guage what direction long-term jet fuel
> prices are heading.  While no amount of hedging will
> stop this long term trend, the volitility of oil
> prices will most likely increase with more aggressive
> market speculation by traders as the spector of
> increasing demand along with falling supply
> develops.....
>
>
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