Energy/Environment – Page 77 – artdiamondblog.com

Southwest Airline Manages Risk Through Oil Price Hedges

Source of graphic: online version of the NYT article quoted and cited below.

(p. C1) Southwest Airlines, in danger for much of this year of losing its quirky dominance in the domestic airline industry, could soon be standing, once again, head and shoulders above the competition.
Better service? Happier and more productive workers?
Not this time. The reason for Southwest’s rapidly increasing advantage over other big airlines is much simpler: it loaded up years ago on hedges against higher fuel prices. And with oil trading above $90 a barrel, most of the rest of the airline industry is facing a huge run-up in costs, and Southwest is not.
Southwest owns long-term contracts to buy most of its fuel through 2009 for what it would cost if oil were $51 a barrel. The value of those hedges soared as oil raced above $90 a barrel, and they are now worth more than $2 billion. Those gains will mostly be realized over the next two years.
Other major airlines passed on buying all but the shortest-term insurance against high fuel prices, allowing Southwest executives a bit of schadenfreude.

For the full story, see:
JEFF BAILEY. “An Airline Shrugs at Oil Prices.” The New York Times (Thurs., November 29, 2007): C1 & C10.

‘A Southwest Airlines worker fueled a plane. Southwest’s chief said the hedges against rising fuel costs “bought us time to retool our company.”” Source of caption and photo: online version of the NYT article quoted and cited above.

Huge Oil Field Discovered Offshore of Brazil

“The Petrobras 54 platform was in Niteroi, Brazil, last August, before its deployment.” Source of the caption and the photo: online version of the NYT article quoted and cited below.

(p. C1) RIO DE JANEIRO — While some of the world’s largest oil producers, including Mexico and Iran, are struggling to remain exporters, Brazil is moving in the opposite direction. A huge underwater oil field discovered late last year has the potential to transform South America’s largest country into a sizable exporter and win it a seat at the table of the world’s oil cartel.
The new oil, along with refining projects under way by Petrobras, the national oil company, could eventually make Brazil a larger exporter of gasoline as well, adding to supplies in the United States and other countries where it is all but impossible to build new refineries.
The subsalt basin that contains Tupi, the new deepwater field estimated to hold the equivalent of five billion to eight billion barrels of light crude oil, is creating a buzz among the world’s largest oil companies. They have struggled lately to find global-scale projects worth investing in, even with oil touching $100 a barrel. Tupi is the world’s biggest oil find since a 12-billion-barrel field discovered in 2000 in Kazakhstan.

For the full story, see:
ALEXEI BARRIONUEVO. “Hot Prospect for Oil’s Big League.” The New York Times (Fri., January 11, 2008): C1 & C4.

“The Tupi deepwater field.” Source of the caption and the map: online version of the NYT article quoted and cited above.

Unintended Consequences of the Government’s Pushing Ethanol

Source of graphs: online version of the NYT article quoted and cited below.

(p. C1) Shopping at a Whole Foods Market in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons. Charles T. Rodgers Jr., an Arkansas cattle rancher, said normal feed rations so expensive and scarce he is scrambling for alternatives. In Oregon, Jack Joyce, the owner of Rogue Ales, said the cost of barley malt has soared 88 percent this year.

For years, cheap food and feed were taken for granted in the United States.
But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.
Among the favorite targets is ethanol, especially for food manufacturers and livestock farmers who seethe at government mandates for ethanol production. The ethanol boom, they contend, is raising corn prices, driving up the cost of producing dairy products and meat, and causing farmers to plant so much corn as to crowd out other crops.
The results are working their way through the marketplace, in this view, with overall consumer grocery costs up roughly 5 percent in a year and feed costs up more than 20 percent.
Now, with Congress poised to adopt a new mandate that would double the volume of ethanol made from corn, ethanol skeptics say a fateful moment has arrived, with the nation about to commit itself to decades of competition between food and fuel for the use (p. C4) of agricultural land.
(p. C4) “This is like a runaway freight train,” said Scott Faber, a lobbyist for the Grocery Manufacturers Association, who complained that ethanol has the same “magical effect” on politicians as the tooth fairy and Santa Claus have on children. “It’s great news for corn farmers, but terrible news for consumers.”
. . .
The price increases for corn have had a broad impact, both because farmers are planting more corn and less of other crops and because livestock producers are scrambling for feed substitutes. For instance, soybeans acreage planted this year was about 16 percent less than in 2006.
Feed costs have increased 25 to 30 percent in the last year, according to David Fairfield, director of feed services at the National Grain and Feed Association. He attributed virtually all of the increase to the demands of the ethanol industry
One consequence of the higher feed costs is rising competition for malt barley between livestock farmers, who want it for feed, and brewers, who need it for beer. Mr. Joyce, the Rogue Ales owner in Newport, Ore., said he has been forced to raise prices to pay for the additional costs of ingredients.
Mr. Rodgers, the Rison, Ark., rancher, said he used to feed his cattle a mixture of corn gluten and soybean hulls. But he said he cannot get corn gluten anymore, and the cost of soybean hulls has risen to $150 a ton from about $105 a ton.

For the full story, see:
ANDREW MARTIN. “The Price of Growing Fuel.” The New York Times (Tues., December 18, 2007): C1 & C4.
(Note: ellipsis added.)

“Jack Joyce, the owner of Rogue Ales in Newport, Ore., says the cost of barley has skyrocketed, forcing him to raise prices.” Source of caption and photo: online version of the NYT article quoted and cited above.

“Public Works Will Just Keep Going Round and Round and Round”

“Environmentalists like Takuo Sugisawa say that restoring bends to the Kushiro actually might cause more damage.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A4) KUSHIRO, Japan — In the early 1980s, engineers straightened out stretches of the Kushiro River, which had meandered some 100 miles under Hokkaido’s big sky here in northern Japan, flowing through green hill country and rural towns, winding through the nation’s largest wetland and this port city’s downtown before emptying into the Pacific Ocean.
Later in November, work is to start again. But this time bulldozers will be moving earth to put curves back in a stretch of the river that had been straightened out, restoring its original, sinuous, shape.
. . .
. . . Trust Sarun Kushiro, a private environmental group that was a member of the committee that endorsed the project but voted against it, said that the reshaping would have little positive effect and that the construction itself would harm the environment. Stanching the flow of sediments from farmland and forests upstream, at their source, is more important, it argued.
And in a case of the left hand’s not knowing what the right hand was stirring up, the Ministry of Agriculture had a project farther upriver that was sending mud and sand downstream, where Mr. Yoshimura’s ministry is to curve the river, said Takuo Sugisawa, 61, the trust’s secretary general. To rehabilitate farmland that had gradually become wetland, the ministry was draining existing land and moving earth there.
“The sediments flowing from upriver will quickly pile up where the river will be curved,” Mr. Sugisawa said, adding that they would eventually bury the Kushiro wetland. To prevent that, workers will eventually have to remove the sediments that are bound to pile up in the recurved stretch, he said.
“So in the name of river management alone, they will be able once again to create public works in the form of removing soil,” he said, walking along an asphalt road and across a bridge built to let trucks and bulldozers move earth for the curving project. “Public works will just keep going round and round and round.”

For the full story, see:
NORIMITSU ONISHI. “KUSHIRO JOURNAL; Forced to Run Straight, a River Must Now Twist.” The New York Times (Weds., November 7, 2007): A4.
(Note: ellipses added.)
A part of the Kushiro River where curves will be added back. Source of photo: online version of the NYT article quoted and cited above.

Source of map: online version of the NYT article quoted and cited above.

Government Biologists Spend Big Bucks Protecting Wrong Fish

“Without DNA tests, the rare greenback cutthroat trout, left, and the Colorado River cutthroat fish are difficult to tell apart.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 26) DENVER, Oct. 13 (AP) — State and federal biologists, who are smarting from research showing that they may have been protecting the wrong fish the past 20 years, are regrouping in their efforts to restore the rare greenback cutthroat trout to Colorado waters.

Tom Nesler, the state biologist, had hoped to see the fish removed from the endangered species list during his career. He concedes that might not happen if it turns out some of the greenback populations biologists thought they were saving are actually the similar but more common Colorado River cutthroat trout.

A three-year study led by University of Colorado researchers and published in August found that out of nine fish populations believed to be descendants of original greenbacks, five were actually Colorado River cutthroat trout.

The recovery effort was thought to be near its goal of establishing 20 self-sustaining greenback populations.

“Hey, science happens,” said Mr. Nesler with a shrug as he discussed the findings.

. . .

The Colorado Division of Wildlife has spent an average of $320,000 annually for the past five years to restore the greenback. Most of the money has come from state lottery revenue; no state tax dollars have been used.

. . .

“Science is not about proof and certainty,” he said, “it’s about testable hypotheses.”

For the full story, see:

THE ASSOCIATED PRESS. “After Possible ‘Oops,’ a Trout Rescue Project Regroups.” The New York Times, First Section (Sun., October 14, 2007): 26.

(Note: ellipses added.)

Chinese Price Ceilings on Diesel Fuel Cause Shortages

“Looking for usable coal at a cinder dump in Shanxi Province in China. Inadequate coal in the north limited power production.” Source of the caption and photo: online version of the NYT article quoted and cited below.
The article quoted below uses the word “tariff” in the sense of “price.”

(p. C4) HONG KONG — The Chinese government issued an “urgent notice” on Wednesday to the country’s power generators, coal companies and railways to address an electricity shortage that has led to rationing in more than a third of China’s provinces in recent weeks.
The rationing, mostly achieved by telling factories that their power will be shut off for a day or two each week, coincides with the annual frenzy of factory production to meet orders before shutting down for the Chinese New Year holidays, which fall in early February this year.
. . .
Power executives and government statements attributed the electricity shortfall this winter to a confluence of problems. Many of the problems appear to have their roots in the government’s imposition of a long list of price controls in recent months in an attempt to tamp down inflation, which reached 6.9 percent at the consumer level in November.
Trucks did not deliver adequate coal stockpiles to power plants before winter snows arrived in northern China, partly because of nationwide diesel shortages. Refiners had cut back on the production of diesel because price controls were forcing them to sell the diesel for slightly less than the cost of the crude oil needed to make it.
. . .
Low electricity tariffs, particularly for residential users, have been another problem.
The central government issued an official “suggestion” to provincial governments last fall that they not allow increases in electricity tariffs charged to customers, as part of national price controls.
Provincial governments have responded by freezing tariffs, and even reducing them in the case of Guangdong Province in southeastern China, the home of much of the country’s export-oriented light industry.
The low tariffs have made it uneconomical for oil-fired plants to operate, and many have stopped doing so.
“It makes absolutely no sense for anyone to run a diesel- or oil-fired plant. They’re all shut down,” said a power company executive in China who asked not to be identified because of the sensitivity of commenting on regulatory policies.
The executive added that even when ordered by the government to resume operating at a loss, many state-owned oil-fired plants had not done so, scheduling maintenance and repairs instead.

For the full story, see:
KEITH BRADSHER. “Pinched by Price Controls, Power Plants in China Scale Back.” The New York Times (Thurs., January 24, 2008): C4.
(Note: ellipses added.)

Local Food May Have Larger Carbon Footprint

“Produce at the huge Hunts Point Market in the Bronx. Researchers at the University of California, Davis, have been challenging assumptions about the carbon footprint of local foods versus those that are transported long distances.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 11) The local food, or locavore, movement has so much momentum that some of the food glitterati have declared that such food is better than organic.

But now comes a team of researchers from the University of California, Davis, who have started asking provocative questions about the carbon footprint of food. Those questions threaten to undermine some of the feel-good locavore story line, not to mention my weekend forays for produce. (A carbon footprint is a measure of the impact of human activities on the environment in terms of the amount of greenhouse gases produced.)

While the research is not yet complete, Tom Tomich, director of the University of California Sustainable Agriculture Research and Education Program, said the fact that something is local doesn’t necessarily mean that it is better, environmentally speaking.

The distance that food travels from farm to plate is certainly important, he says, but so is how food is packaged, how it is grown, how it is processed and how it is transported to market.

Consider strawberries. If mass producers of strawberries ship their product to Chicago by truck, the fuel cost of transporting each carton of strawberries is relatively small, since it is tucked into the back along with thousands of others.

But if a farmer sells his strawberries at local farmers’ markets in California, he ferries a much smaller amount by pickup truck to each individual market. Which one is better for the environment?

Mr. Tomich said a strawberry distributor did the math on the back of an envelope and concluded that the Chicago-bound berries used less energy for transport.

For the full story, see:

ANDREW MARTIN. “THE FEED; If It’s Fresh and Local, Is It Always Greener?” The New York Times, SundayBusiness Section (Sun., December 9, 2007): 11.

Recent Years Were Not as Hot as Thought

Source of graph: online version of the NYT article quoted and cited below.

(p. 19) Never underestimate the power of the blogosphere and a quarter of a degree to inflame the fight over global warming.

A quarter-degree Fahrenheit is roughly the downward adjustment NASA scientists made earlier this month in their annual estimates of the average temperature in the contiguous 48 states since 2000. They corrected the numbers after an error in meshing two sets of temperature data was discovered by Stephen McIntyre, a blogger and retired business executive in Toronto. Smaller adjustments were made to some readings for some preceding years.

All of this would most likely have passed unremarkably if Mr. McIntyre had not blogged that the adjustments changed the rankings of warmest years for the contiguous states since 1895, when record-keeping began.

Suddenly, 1934 appeared to vault ahead of 1998 as the warmest year on record (by a statistically meaningless 0.036 degrees Fahrenheit). In NASA’s most recent data set, 1934 had followed 1998 by a statistically meaningless 0.018 degrees. Conservative bloggers, columnists and radio hosts pounced. “We have proof of man-made global warming,” Rush Limbaughtold his radio audience. “The man-made global warming is inside NASA.”

Mr. McIntyre, who has spent years seeking flaws in studies pointing to human-driven climate change, traded broadsides on the Web with James E. Hansen, the NASA team’s leader. Dr. Hansen said he would not “joust with court jesters” and Mr. McIntyre posited that Dr. Hansen might have a “Jor-El complex” — a reference to Superman’s father, who foresaw the destruction of his planet and sent his son packing.

For the full story, see:

ANDREW C. REVKIN. "Quarter-Degree Fix Fuels Climate Fight." The New York Times, Main Section (Sunday, August 26, 2007): 19.

Early Humans Resiliently Innovated to Survive During Climate Cooling

Source of map: online version of the NYT article quoted and cited below.

(p. A6) Previous research had indicated that human ancestors had for ages depended solely on terrestrial plants and animals. Both fossil and genetic data show that modern humans evolved 150,000 to 200,000 years ago, but archaeological evidence for the emergence of modern behavior in technology, creativity, symbolic thinking and lifestyles is sparse.

But six years ago, at Blombos Cave, near Pinnacle Point, archaeologists uncovered 77,000-year-old tools along with pigments and engraved stones suggesting symbolic behavior, a sign of early creativity. Now, at the Pinnacle Point cave site, the shellfish remains reveal another important innovation.

. . .

Forced to seek new sources of food, some of the people migrated to the shore in search of “famine food.” At Pinnacle Point, the discovery team reported, they feasted on a variety of marine life, brown mussels, giant periwinkles and whelks.

So on the southern shore of Africa, Dr. Marean said in a statement issued by Arizona State, a small population of cave-dwelling modern humans struggled and survived through the prevailing cold, eating shellfish and developing somewhat advanced technologies.

For the full story, see:

JOHN NOBLE WILFORD. “Key Human Traits Tied to Shellfish Remains.” The New York Times (Thurs., October 18, 2007): A6.

(Note: ellipses added.)

Government Pushing Fluorescent Bulbs with Hazardous Mercury

Source of image: online version of the WSJ article quoted and cited below.

(p. D1) As part of the government’s focus on energy and the environment, Americans are urged to buy compact fluorescent light bulbs, which use only about 25% of the energy and last up to 10 times as long as traditional incandescent bulbs. Nearly 300 million such bulbs were sold in U.S. in 2007, compared with 100 million two years earlier, according to the Department of Energy.

. . .

Yet unlike traditional incandescent bulbs, these bulbs contain mercury, a metal hazardous to human health and the environment. Consumers are urged not to toss them in the trash. In some states, such as California, it’s illegal to throw them away; they must be recycled. Still, many cities and towns don’t have recycling programs for the bulbs, and consumers aren’t sure what to do with them.

For the full story, see:

SARA SCHAEFER MUÑOZ. “The Dark Side Of ‘Green’ Bulbs Disposing of Fluorescents, Electronics Releases Toxins; Companies Tout Recycling.” The Wall Street Journal (Thurs., January 24, 2008): D1.

(Note: ellipsis added.)

Global Warming May Give U.S. Access to Big Deposits of Oil, Gas and Minerals

The icebreaker Healy finished a new survey of the seafloor off the northern coast of Alaska. Source of photo: online version of the NYT article quoted and cited below.

(p. A16) A new survey by American oceanographers of the seafloor north of Alaska, completed last month aboard the Coast Guard icebreaker Healy, provides fresh evidence that the United States has much at stake in the region. The sonar studies found hints that thousands of square miles of additional seafloor could potentially be under American control. That floor might yield important deposits of oil, gas or minerals in coming decades, government studies have concluded.

So far did the sea ice pull back this summer that the expedition was able to scan the bottom several hundred miles farther north than in previous surveys, said the project’s director, Larry Mayer, an oceanographer at the University of New Hampshire. The team found long sloping extensions 200 miles beyond previous estimates.

Though more surveys will be needed to firm up any American claim, countries have a right to expand their control of seabed resources well beyond the continental shelves bordering their coasts if they can find such sloping extensions.

For the full story, see:

MATTHEW L. WALD and ANDREW C. REVKIN. "New Task for Coast Guard In Arctic’s Warming Seas." The New York Times (Fri., October 19, 2007): A16.