Syria drought and wheat harvest

Akin to Australia, Syria is suffering through a drought and subsequent poor wheat harvest. From an iReport at CNN:

The most recent Syrian estimates place the harvest at 2 million metric tons – less than half the 4.1 million ton harvest of 2007, and the 2007 harvest was almost 1 million tons below a peak harvest.

Even the mighty Euphrates is not immune to the drought, discharge has decreased and pumps run incessantly drawing water from the river. Syria has promised to aid Iraqi farmers with releases of water, but by the time the flow reaches the border the salt content has doubled.

There is mention of aquifers and reservoirs being drained as well.  Syria has purchased wheat on the world market to make up for shortfalls, as several other countries have.

I noted in another post that for several years, world wheat harvest has been less than use.  This cannot continue for long before there is a breakdown in the global market, as panic hoarding and further export bans would arise.

Kelley Green Book

Or actually, Kelley Blue Book Green. Not so catchy, but a good resource.  Several videos of interest, including test drives of the Chevy Fuel Cell Equinox vehicle, and the Ford Escape Hybrid for 2008.  Also a good source for articles, where I found this snippet about a Volt design change:

For openers, despite the additional displacement, it will deliver better fuel economy numbers in a steady-state operating mode and offer greater output. Beyond that, this new super-clean and efficient four-cylinder is inherently quieter, smoother, better balanced and will provide more seamless transitions when the Volt does changeover from pure electric to extender-enhanced modes. If that’s not enough, the engine is also lighter and less expensive to build than the turbo three-cylinder.

I am tempted to think that the cost reduction might be even more important then the weight reduction.  I really have my doubts that the can sell this car for less than $40,000 and make money.

The top10 green cars listed at KBB Green show that no 2008 non-hybrid is rated by the EPA as having better mileage than my 95 Honda Civic.  This is simply astounding.  Of course, there are real world reports of drivers getting closer to 39-40 mpg for both the Yaris and the smart.  I hope so.

Another post states that over 3,000 people have put down $500 deposits for the Aptera Typ-1 (why not Type-1?).  That amounts to around two years of production at the current target.  Perhaps it is a good thing that they are only going to sell in California to begin with!

Wheat woes in Australia

A victim of the severe drought in Australia has been its wheat crops. Last year the harvest was around 13 million tons. This year’s crop estimate began at a record 26 million tons, which helped to drive down prices. However, lack of rain that postponed crop planting in Australia, and floods in the US have driven prices back up somewhat, and reduced crop estimates:

Even after a nine per cent cut in its forecast of Australia’s 2008/09 wheat crop on June 17, the government is still forecasting a big crop of 23.68 million tonnes, up by more than 80 per cent on last year’s drought-affected crop.

Apparently, many farmers in Australia are literally betting the farm on this season’s crop. While the banks have helped with loans, if this years crop is a money loser, then many farmers will be broke, and the banks may not continue to give loans that they might never recover. Interestingly, the article claims that a few good harvest might result in foreclosures, as then there will be bigger farms with some money that can actually buy the foreclosed farms! Damned if you do, damned if you don’t I guess.

A scary statistic in the article is this:

This year might be the first time in years that the world produces more wheat than it consumes, Greentree said.

This hits a theme that I keep seeing in energy, food production, and water. The capacity margins are getting very slim, and a few seasons of bad harvest, or a natural disaster, or continued population growth are pushing the world very close to the point of continuous crisis.

Will the lights go out?

The Marshall islands are feeling the pinch from rising fuel and food prices. Things have reached extreme crisis levels:

The Marshall Islands said Friday electrical power in the small Pacific nation may be switched off in September when its fuel supplies are expected to run out, as high food and energy prices have begun to hit hard some developing countries, particularly small islands isolated from the rest of the world.

The future of many small nations, especially the ones in the Pacific that are dependent on shipping to provide fuel and food, is becoming more cloudy. Perhaps the only bright spot is that things might get so untenable on the smaller islands that they are evacuated before global sea level rise starts to flood them.

Pennsylvania Alt Energy Fund

Pennsylvania has authorized the creation of a $500 million fund to promote alternative energy. This blog post summarizes the details well. It seems to spread the wealth:

Pennsylvania Governor Edward Rendell has approved a bill that establishes a $500 million fund to support alternative energy projects. Special Session House Bill 1 authorizes the Commonwealth Financing Authority to borrow $500 million, most of which will be split into six funding sources relating to energy efficiency and renewable energy: $80 million in grants and loans for solar energy projects; $100 million in grants, loans, and rebates for up to 35% of the cost of solar energy projects at residences and small businesses; $165 million in grants and loans for alternative energy projects, excluding solar energy, at businesses and local government facilities; $25 million for wind and geothermal energy projects; $40 million to help start-up businesses involved in energy efficiency technologies; and $25 million in grants and loans to improve the energy efficiency of new and existing homes and small business buildings. An additional $65 million will go toward pollution control technologies and to help low-income families pay their energy bills.

While clean coal and waste coal fall under the alternative energy umbrella, that might have been necessary to get this passed. Sounds like a very promising program.

Peak Oil going mainstream?

First it was a front page article on the LA Times. Now the Washington Post has a multi-part series on peak oil. Could this mean the MSM is finally coming around? Well, maybe. Usually the language describing peak-oil advocates tends to portray them as weirdos or doomers. Still, these articles have some good information, and hopefully it will keep people from jumping back into their SUVs now that gas prices have fallen back some. Frankly, the language is pretty strong:

There is little prospect that drivers will ever again see gas prices retreat to the levels they enjoyed for much of the last generation.

and this snippet on reserve cushion was striking:

Just two decades ago, the world could pump 15 percent more oil than it needed. Today, that spare production capacity has practically vanished — it’s now about 2 percent beyond the world’s total daily consumption of 85.5 million barrels. That makes the market very sensitive to rumors about anything that might endanger existing production.

But now, the cushion is all but gone. And Saudi Arabia, which is home to what little spare capacity remains, has become reluctant to temper price increases by boosting production. Quite the reverse, the kingdom and its fellow OPEC members have trimmed production on those few occasions when prices showed signs of slipping, most recently in late 2006.

At least this repetition in the MSM should begin to catch the attention of the masses who tend to ignore the question of “where does this come from? How long will it last?” when they pick up a gas pump handle. There is even a decent description of how we are in the mess we are in today:

The low prices of the late 1990s also dampened the impetus for finding new supplies. Oil companies delayed exploration for new fields. Capital spending dropped 15 percent at the biggest oil companies in late 1998 and plunged as much as 70 percent at the smaller ones. Too few drilling rigs were built. And refineries weren’t expanded or upgraded, making it hard for them to use the lower-quality crude oils that have become a larger portion of supplies or to produce the right balance of products as gasoline use is stagnating and diesel fuel use growing.

Investment slackened just as finding new supplies was becoming more difficult and costly. Most of the world’s big, easy-to-tap fields have already been discovered and largely drained.

Perhaps the resulting conclusion, that there are no quick fixes to this problem, and the fact of declining petroleum production must be dealt with, will reach the ears of the general population. I am hopeful, but there is the tendency to tune out any news that might imply that hardship or sacrifices in lifestyle are needed. Also, the time to address these issues in a thoughtful, measured manner has probably passed. But the congresscritters in Washington do not have the stomach or spine to do anything until it reaches a crisis level. I do not really support T Boone’s plan for CNG vehicles, but at least he is getting attention as an oilman who is saying we can’t drill our way out of this mess.

Aussie power issues

An explosion at Varanus Island gas plant has caused severe power disruptions in Australia since early June. The plant produced about 30% of Western Australia’s natural gas. A large coal-fired plant (330 MW) that was shut down in late May for unplanned maintenance has been brought back online. Another is slated for restart soon. Hopefully this will ease pressure on the gas market, and allow for less use of diesel generation.

Emergency services and hospitals were given priority in power availability, and smaller businesses as well as mining operations, have had to operate on a day-to-day basis (Bloomberg):

Mining companies and small businesses have been scrambling to secure fuel since the blast after the government gave hospitals and other essential services priority.

Since the disruption, small businesses have been contacted by energy retailer Alinta Ltd., a unit of Sydney-based

The timeline for restarting the pipelines at Varanus Island is 57% by mid-Aug and the remainder by December. It will be interesting to see what sort of impact this has had (profit loss, business failures) when the dust settles.

China power issues

With the Olympics in Beijing fast approaching, the power crisis in China is growing. Now much of the coal based energy generation infrastructure is running on very tight supplies:

State Grid Corp. of China, which more than 1 billion people rely on for power, said electricity shortages have worsened because of inadequate coal supplies. Forty-six percent of the power stations connected to the distributor’s grid have coal stockpiles below the “caution line,” or seven days of consumption, data from the company showed today.

While it is a certainty that the lights will stay on in Beijing for the Olympics, the rest of the country might have to sweat it out!

PEMEX update

The (first wave of the) referendum on PEMEX failed convincingly, as expected. Not sure what effect it will have on Calderon’s proposal. Even though revenue at the company rose with rising oil prices, the government increased its large cut through “taxes”:

Profit was 16.7 billion pesos ($1.7 billion), down from 38.3 billion pesos a year earlier, Mexico City-based Pemex, as the company is known, said on its Web site.

Pemex’s tax bill jumped 61 percent to 231.7 billion pesos. The taxes eroded profit from the record price of the Mexican mix of crude sold on the international market. The average price of Mexican crude jumped 83 percent to $104.10 a barrel, boosting net sales 29 percent to 371.6 billion pesos.

Pemex taxes account for about 40 percent of Mexico’s budget. Labor and other costs also cut into earnings, the company said.

So, the government added roughly $88 billion pesos to its revenue. It is a shame that more is not plowed back into PEMEX for exploration and drilling. While Mexico’s exports have been declining, the 83 percent rise in revenue per barrel has increased total revenue to the government. I am unclear from this article if the effective tax rate has dropped, or the amount rose with rising revenue (minus increased operating costs).  Even if oil prices only level off, it will be interesting to see what effect it has on the government.

Apparently, US firms are eager to start drilling/producing near the US/Mexico border in the GOM. Brings to mind the virally popular phrase from “There Will Be Blood”: I DRINK your milkshake!

Energy Minister Georgina Kessel told reporters separately that Mexico is still in talks with the United States over deepwater fields straddling the U.S.-Mexico maritime border in the Gulf of Mexico.

Companies are poised to start producing at the fields from the U.S. side of the border as soon as 2010, she said, which could suck oil from Mexico’s side of the border.

Toyota hybrid concept

Just watched the video from the Britsh Motorshow at Whatcar, and they showed a Toyota concept that looks VERY much like the Flextreme concept (except you can see the back will be hatchback, not gullwing). I think this points to the fact that aerodynamics is where the concessions will have to be made to gain fuel economy.

The also showed a Ford Fiesta ECOnetic that is rated in the 76 mpg range. Even with the downconversion from imperial gallons to US, that would be sweet – might want to test that one against the Prius.