Washington, D.C. United States [RenewableEnergyWorld.com]
The latest figures from the Energy Information Administration show that net
U.S. electrical generation from renewable energy sources reached an all-time
monthly high in May 2009.
Combined, renewables accounted for 13 percent of total electrical generation
in the U.S. That level is 7.7 percent higher than in May 2008 (37,515,000
Mwh) and appears to be the highest monthly figure ever reported . But that
record will fall soon as the late summer numbers come out.
But wait . that's not all the good news .
Total net electrical generation in May 2009 from all sources showed a drop
of 4.1 percent from May 2008. Some of that is due to factories being closed,
however. Coal production is expected to fall by nearly 8 percent in 2009 to
the lowest level in 8 years.
When you combine a drop in total demand with a significant switch to
renewables then there is a double burden placed on the price of fossil fuels
- but this has not happened yet and the whole market for carbon based fuels
is poised for the biggest price crash ever. Big oil will try to portray this
as harmful for a fragile recovery, but can we believe them?
Even with peak oil, a switch in the USA which could be forced by political
pressure from both the farm and the Coal lobby (coal liquefaction ?) may end
up forcing OPEC into a corner. And we already see that there is industry
duplicity going on. Surprise, surprise. In this blog
http://www.insidefutures.com/article/110664/Giddy%20Oil!.html
.mention is made of a major drop in oil imports that led to a major "drop"
in crude supplies . as the American Petroleum Institute has blindsided the
marketplace by reporting a whopping 6.13 million barrels drop! No Way! As
the author implies IT DID NOT HAPPEN, except on the books of the API in
order to *prop-up prices* arificially. In a true free market, oil would be
much lower already; and we are delaying the inevitable.
Statistically when you forecast out the 7.7% year-to-year gains in
renewables, it only takes 10 years to totally eliminate fossil fuels, but of
course that will not happen. The scenario that seems most likely - due to
the big investment in solar cell output which will be coming online soon
(thanks to massive DoE loan guarantees) is that we will see further pressure
on domestic coal and natural gas pricing; in a time when we must preserve
jobs - and when you combine that with the political importance of the Farm
Lobby in maintaining biofuel output, and the domestic Coal lobby in using
coal for transportation fuel and the *diminished importance* of Big-Oil with
the present Admin, then it will be interesting to watch how the markets
unfold.
Needless to say - any technological breakthrough that were to occur now, in
the transportation sector - for instance that would further lessen oil use,
could be ruinous to OPEC pricing aspirations. There are a number of such
technologies that promise to do this. The psychological impact on oil
pricing would itself be huge if it looked like the emerging automotive
markets in China and India could manage with far less oil than OPEC
predicts.
The return of $20 oil has a nice ring to it.
Jones
