Oil Prices on the Rise

  • Stephen Schork says the rising prices are based more on investor momentum than anything else, and that there’s plenty of oil on the market.(Photo courtesy of the Federal Highway Administration)

Oil and gasoline prices are going up this summer. Lester Graham reports, it appears the higher prices are not caused by lower supplies.

Transcript

The Energy Information Administration’s new short-term energy outlook says gasoline prices will average about $2.92 this summer– hitting $3.00 or more in some regions. That’s about 50-cents a gallon higher than last summer.

The outlook also predicts oil prices to average $82 a barrel this summer. But, oil already hit $86 a barrel this week.

Stephen Schork with The Schork Report says… the government projections were put together about a week ago… and didn’t really anticipate the investors driving prices up this week.

“So this rally that we are seeing and this upward buy is based more on investor momentum than it is on underlying fundamentals. There’s plenty of oil on the market right now.”

The government says prices should remain relatively stable but rising… although is notes uncertainty over crude oil price forecasts remains high.

For The Environment Report, I’m Lester Graham.

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Oil and Prices at the Pump

  • Right now, we’re paying anywhere from 70 cents to a dollar more per gallon than this time a year ago. (Photo courtesy of the National Renewable Energy Laboratory)

Energy analysts say a glut of
oil means gas prices probably
won’t spike too much this year.
Rebecca Williams has more:

Transcript

Energy analysts say a glut of
oil means gas prices probably
won’t spike too much this year.
Rebecca Williams has more:

We’re paying anywhere from 70 cents to a dollar more per gallon than this time a year ago. The good news is, we’re not likely to see four dollar-a-gallon gas anytime soon.

“We’re not in a world with runaway oil prices.”

That’s Ruchir Kadakia. He’s a global oil market expert with IHS Cambridge Energy Research Associates. He says weak global demand is keeping oil prices in check for now. At the same time, supply is relatively high. He predicts oil won’t average much higher than 80 dollars a barrel for the next year or so.

“And so what that really means for the gasoline point is through probably 2011, we shouldn’t expect to see gasoline prices much above three dollars unless it’s for a short period of time maybe in the summertime for a few months.”


Kadakia says oil speculators can drive prices higher or lower in the short term. But he doesn’t think we’ll see any major price spikes over the long term.

For The Environment Report, I’m Rebecca Williams.

Related Links

Turbulent Fuel Prices Hit Airlines Hard

  • Airlines say that there needs to be more regulation on oil speculators. (Photo courtesy of NASA)

Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:

Transcript

Recent swings in the price of
crude oil are leading to more
trouble for the US airline
industry. Rebecca Williams
reports:

Even though oil futures are trading for half of what they were last summer, the airlines are not happy.

David Castelveter is with the Air Transport Association. He says wild price swings for oil make it tough for the industry to plan ahead.

“They hedge their fuel purchases when the price is high at a lower rate and if the price of fuel goes low then they’re hedged in at higher rates and it costs them money.”

Airlines would like to raise ticket prices, but, with the recession, they’re worried no one will buy them.

So instead, they’re trying to cut back on how much fuel they use. Airlines are retrofitting planes with winglets that cut fuel consumption.

But that takes money and time. So in the meantime, they’re also cutting jobs and routes.

The industry’s putting pressure on Congress to force more transparency in the oil futures trading market.

They’re hoping more regulation on oil speculators would mean fewer price swings.

For The Environment Report, I’m Rebecca Williams.

Related Links

Speculators Cause Spike in Oil Prices

The price of a barrel of oil has jumped
up from $45 to nearly $70 in just
three months. And gas prices have been
creeping up too. Rebecca Williams reports
these prices are out of sync with the usual
rules of supply and demand:

Transcript

The price of a barrel of oil has jumped
up from $45 to nearly $70 in just
three months. And gas prices have been
creeping up too. Rebecca Williams reports
these prices are out of sync with the usual
rules of supply and demand:

Right now there’s a huge glut of supply of oil – and at the same time, weak global demand for it.

Ruchir Kadakia is a global oil market expert. He’s with Cambridge Energy Research Associates.

He says speculators are driving oil prices up.

“People believe that with positive economic growth in the future there will be greater demand for oil. So they start to buy up oil in anticipation of that demand recovery.”

So these speculators are making money while most of the economy is in a slump.

But Kadakia thinks the realities of supply and demand will eventually catch up and drag oil prices back down.

“The pain we’re feeling at the pump today is probably going to be the worst we feel all this summer.”

He thinks gas prices might actually get back below two dollars a gallon.

For The Environment Report, I’m Rebecca Williams.

Related Links

Offshore Oil Estimates Don’t Add Up

  • The President already has lifted an executive ban on offshore drilling. He now wants Congress to lift its ban. (Photo courtesy of the US Department of State)

President George Bush says Congress
should remove the ban on offshore drilling
because there might be a decade’s worth of
oil off the US coasts. Lester Graham
reports that might be an optimistic estimate:

Transcript

President George Bush says Congress
should remove the ban on offshore drilling
because there might be a decade’s worth of
oil off the US coasts. Lester Graham
reports that might be an optimistic estimate:

The President already has lifted an executive ban on offshore drilling. He now wants
Congress to lift its ban.

At an Ohio factory, President Bush talked about wanting to find more oil in the U.S.

“One place where there is, the experts say is, a bountiful supply of oil, perhaps as much
as 10 years’ worth at current consumption rates, is the Outer Continental Shelf. That
would be offshore America.”

But the President’s numbers don’t add up.

The Energy Information Administration estimates off-shore there’s 18-billion barrels of
crude oil that are currently off-limits. The U.S. consumes more than seven-and-a-half
billion barrels a year. That means 18-billion barrels would only last the U.S. less than
two-and-a-half years – not the ten years the President suggests.

For The Environment Report, I’m Lester Graham.

Related Links

Investors Wary of Diesel From Coal

  • (Photo courtesy of the US Geological Survey)

The price of gasoline and diesel fuel from
foreign oil is making people think about other ways
to fill up. Lester Graham reports the coal industry
is pushing the idea of making diesel out of coal
from the US:

Transcript

The price of gasoline and diesel fuel from
foreign oil is making people think about other ways
to fill up. Lester Graham reports the coal industry
is pushing the idea of making diesel out of coal
from the US:

The technology to make diesel fuel out of coal has been around for a while. Germany
used it in World War II.

Recently, researchers at Rutgers and the University of North Carolina developed a
more efficient way to convert coal to diesel.

So, what’s stopping coal-to-diesel? Money and risk.

Coal to diesel is feasible – if the price of oil is above $50 a barrel. Oil is around $143 a
barrel right now. So, the money is good.

Phil Gonet is president of the Illinois Coal Association. He says now investors want
some government assistance.

“That guarantees that investors will at least get their money back if OPEC starts to play
around with the world price of oil.”

And make diesel from foreign oil cheaper than diesel from domestic coal.

For The Environment Report, this is Lester Graham.

Related Links

Daylight Saving Not Saving Much

We’ll be springing ahead three weeks earlier than usual this
year. Congress has extended daylight saving time because the
politicians say it will save energy. Rebecca Williams reports
critics are not so sure:

Transcript

We’ll be springing ahead three weeks earlier than usual this
year. Congress has extended daylight saving time because the
politicians say it will save energy. Rebecca Williams reports
critics are not so sure:


Fans of extending daylight-saving time say longer daylight hours
in the evenings will save energy.


But critics of the change say it might actually be a wash.


Ryan Kellogg is a researcher at the University of California
Energy Institute. He studied what happened when Australia
extended daylight saving time.


“They did experience decreased electricity use in the evening
hours when they had more natural light. But they also saw
increased use in the morning when people were waking up in the
dark. Those two effects canceled each other out so on net,
extending daylightn saving time didn’t save Australia any energy
at all.”


U.S. politicians have been predicting we could save the
equivalent of 100,000 barrels of oil a day by extending daylight
saving time. But critics say that’s misleading because most power
plants don’t run on oil.


For the Environment Report, I’m Rebecca Williams.

Related Links

A More Efficient Way to Make Ethanol?

The cost of oil is topping out near 70 dollars a barrel and the nation is sending billions of dollars to unstable foreign countries to get it.
With that
in mind, many Americans have begun to think about biofuels from domestic crops. Biofuels such as corn ethanol and soy diesel are the most popular right now. But researchers are looking into plants that don’t require the fertilizers and pesticides those crops need. The GLRC’s Richard Annal reports on one crop that could make ethanol much more efficiently:

Transcript

The cost of oil is topping out near $70 a barrel and the nation is sending billions of dollars to unstable foreign countries to get it. With that in mind many Americans have begun to think about biofuels from domestic crops. Biofuels such as corn ethanol and soy diesel are the most popular right now, but researchers are looking into plants that don’t require the fertilizers and pesticides those crops need. The GLRC’s Richard Annal reports on one crop that could make ethanol much more efficiently:


(sound of pouring liquid)


Researcher Timothy Volk is showing me some liquid that is on its way to becoming biofuel.


“So what comes out of this is a brown liquid.”


This murky brownish substance contains sugars that have been extracted from wood chips. Separating sugars from organic materials is an essential part in the production of the biofuel ethanol, and a new method being developed at the School might revolutionize that process. This lab is at the School of Environmental Science and Forestry in Syracuse, part of the State University of New York system. Everybody just calls the school ESF. What makes the process at ESF different is the use of water instead of harsh chemicals as a means of extracting sugar and the use of wood from a type of willow as stock material.


The extracted sugars are then fermented and used to produce ethanol. Mix 85 percent ethanol with 15 percent gasoline and you’ve got E-85. Several models of cars can burn E-85. It burns cleaner than petroleum based products, and reduces the dependence on foreign oils.


ESF’s Timothy Volk says this method differs from others being used, creates several by- products, and leaves very little waste material.


“What’s left over still looks like a wood chip. That could go to the paper industry, and you could still make paper out of it, or you could use that wood chip to produce renewable heat and power. One of the beauties of this is that from a ton of hard wood chips from the forest or willow or where ever it comes from you’re making multiple products and there’s not a lot left.”


For stock material ESF researchers are experimenting with the use of the willow shrub tree. This plant is native and grows to over ten feet tall. The researchers say willow beats corn hands down. You have to burn fuel to plant corn every year. Corn requires fossil fuel-based fertilizers, and you only use the corn kernels rather than the whole plant to produce ethanol.


Jim Nokas is one of the lead researchers on the project. He sees the willow shrub as much more commercially viable than corn-based production.


“The best calculations we have for every unit of energy put into this process you get anywhere from 11 to 15 units of energy out. Compared to the best data available for corn, for every unit of energy put in, one would obtain 1.67 units of energy out.”


In other words, producing ethanol from willow is about ten times more efficient than using corn.


Tom Linberg is a commissioner with the New York State Department of Agriculture. Linberg says he’s excited by the prospect of wood-based ethanol production, and sees growing a low maintenance crop like willow as a way for farmers to earn extra cash.


“I think it’s something that could provide an option for a lot of farmers or land owners to use vacant land. Try and get some income off of it whereas they might otherwise not be getting income off the land. It’s a fairly low impact crop. You know, you plant it once and you don’t really need to do anything else with it, and this is something they could have on the side. Brings in some extra income and, again, helps keep that land productive.”


Willow can be harvested 6 to 7 times before replanting is necessary. It has a year long growing and harvesting season, and provides high yields. With about 2 million acres of dormant farmland in New York alone that could be dedicated to willow production, Volk believes growing willow for ethanol would have a positive effect on the local economy that buying foreign oil cannot offer.


“The real benefit here then is we build them here and it’s locally produced material, so you buy it from the land owners, or the farmers that are producing willow, the people that own wood lots. You buy all that material locally from the local community. You produce the ethanol and hopefully then we are using it locally in the community, and instead of sending energy dollars out of the state we cycle them around the local community and get lots of benefits associated with them.”


The researchers say the willow-to-ethanol process will be ready for commercial application within two years, and if it proves commercially viable the timing couldn’t be better. With ethanol plants being built across the nation, the wood method could become an efficient alternative to corn-based production in many states.


For the GLRC, I’m Richard Annal.

Related Links

Trash Burning Can Threaten Human Health

  • Burning trash smells bad and it can create the conditions necessary to produce dioxin. If livestock are exposed to that dioxin, it can get into the meat and milk we consume, creating health risks. (Photo courtesy of the Minnesota Office of Environmental Assistance)

For most of us, getting rid of the garbage is as simple as setting it at the curb. But not everyone can get garbage pick-up. So, instead, they burn their trash. The Great Lakes Radio Consortium’s Lester Graham reports… that choice could be affecting your health:

Transcript

For most of us, getting rid of the garbage is as simple as setting it at the
curb, but not everyone can get garbage pick-up. So, instead, they burn
their trash. The Great Lakes Radio Consortium’s Lester Graham
reports… that choice could be affecting your health:


(Sound of garbage trucks)


It’s not been that long ago that people everywhere but in the largest cities
burned their trash in a barrel or pit in the backyard. That’s not as often
the case these days. Garbage trucks make their appointed rounds in
cities, small towns, and in some rural areas, but they don’t pick up
Everywhere, or if they do offer service, it’s much more expensive
because the pick-up is so far out in the country.


Roger Booth lives in a rural area in southwestern Illinois. He says
garbage pick-up is not an option for him.


“Well, we burn it and then bury the ashes and things. We don’t have a
good way to dispose of it any other method. The cost of having pick up
arranged is prohibitive.”


He burns his garbage in the backyard. Booth separates bottles and tin
cans from the rest of the garbage so that he doesn’t end up with broken
glass and rusty cans scattered around.


A lot of people don’t do that much. They burn everything in a barrel and
then dump the ashes and scrap in a gully… or just burn everything in a
gully or ditch. Booth says that’s the way most folks take care of the
garbage in the area. No one talks about the smoke or fumes put off by
the burning.


“I haven’t ever thought much about that. So, I don’t suppose that I have
any real concerns at this moment. I don’t think I’m doing anything
different than most people.”


And that’s what many people who burn their garbage say.


A survey conducted by the Zenith Research Group found that people in
areas of Wisconsin and Minnesota who didn’t have regular garbage
collection believe burning is a viable option to get rid of their household
and yard waste. Nearly 45-percent of them indicated it was
“convenient,” which the researchers interpreted to mean that even if
garbage pick-up were available, the residents might find more convenient
to keep burning their garbage.


While some cities and more densely populated areas have restricted
backyard burning… state governments in all but a handful of states in
New England and the state of California have been reluctant to put a lot
of restrictions on burning barrels.


But backyard burning can be more than just a stinky nuisance. Burning
garbage can bring together all the conditions necessary to produce
dioxin. Dioxin is a catch-all term that includes several toxic compounds.
The extent of their impact on human health is not completely know, but
they’re considered to be very dangerous to human health in the tiniest
amounts.


Since most of the backyard burning is done in rural areas, livestock are
exposed to dioxin and it gets into the meat and milk that we consume.


John Giesy is with the National Food Safety and Toxicology Center at
Michigan State University. He says as people burn garbage, the dioxins
are emitted in the fumes and smoke…


“So, when they fall out onto the ground or onto the grass, then animals
eat those plants and it becomes part of their diet, and ultimately it’s
accumulated into the animal and it’s stored as fat. Now, particularly with
dairy cattle, one of the concerns about being exposed to dioxins is that
then when they’re producing milk, milk has fat it in, it has butter fat in it,
and the dioxins go along with that.”


So, every time we drink milk, snack on cheese, or eat a hamburger, we
risk getting a small dose of dioxin. Beyond that, vegetables from a
farmer’s garden, if not properly washed, could be coated with dioxins,
and even a miniscule amount of dioxin is risky.


John Giesy says chemical manufacturing plants and other sources of
man-made dioxin have been cleaned up. Now, backyard burning is the
biggest source of dioxins produced by humans.


“So, now as we continue to strive to reduce the amount of dioxins in the
environment and in our food, this is one place where we can make an
impact.”


“That’s the concern. That’s the concern, is that it’s the largest remaining
source of produced dioxin.”


Dan Hopkins is with the Environmental Protection Agency. He says,
collectively, backyard burning produces 50 times the amount of dioxin as
all the large and medium sized incinerators across the nation combined.
That’s because the incinerators burn hot enough to destroy dioxins and
have pollution control devices to limit emissions. Backyard burning
doesn’t get nearly that hot and the smoke and fumes spread unchecked.


The EPA wants communities to take the problem of backyard burning
seriously. It wants state and local governments to do more to make
people aware that backyard burning is contaminating our food and
encourage them to find other ways to get rid of their garbage.


“(It) probably won’t be a one-size-fits-all solution, but by exchanging
successful efforts that other communities have had, we should be able to
help communities fashion approaches that have a high probability of
success.”


But public education efforts are expensive, and often they don’t reach the
people who most need to hear them. The EPA is not optimistic that it
will see everyone stop burning their garbage. It’s not even a goal. The
agency is just hoping enough people will find other ways to get rid of
their trash that the overall dioxin level in food is reduced.


For the GLRC, this is Lester Graham.

Related Links

Defense Department Re-Opens Cold War Barrel Mystery

  • The Department of Defense is working on cleaning up barrels dumped into Lake Superior. (Photo courtesy of the U.S. Department of the Interior)

The Department of Defense will re-open the case of 14-hundred mystery barrels secretly dumped into Lake Superior during the Cold War. The barrels were dumped in an area where the Red Cliff Band of Chippewa Indians have territorial rights. The DOD now has an agreement with the Red Cliff Tribe to investigate the weapons dump site. The Great Lakes Radio Consortium’s Mike Simonson has this report:

Transcript

The Department of Defense will re-open the case of 1400 mystery barrels secretly dumped into Lake Superior during the Cold War. The barrels were dumped in an area where the Red Cliff Band of Chippewa Indians have territorial rights. The DoD now has an agreement with the Red Cliff Tribe to investigate the weapons dump site. The Great Lakes Radio Consortium’s Mike Simonson has this report:


Documents show barrels of weapons scraps manufactured by Honeywell from 1958 to 1962 were secretly dumped by the U.S. Army Corp of Engineers a few miles east of the Duluth-Superior harbor.


Red Cliff Environmental Consultant Dave Anderson believes there is an imminent danger to Duluth’s water supply. The barrels are rusting away 100 to 300 feet deep near the city’s water intake. He says he’s found evidence of PCB’s and unidentified ash.


“Right now we know that there is more to these barrels than what has been disclosed in the past. That the barrels are not just scrap steel grenade parts. There are other wastes that are hazardous that are contained in the barrels and we now know that the barrels are leaking some of those substances.”


The DoD has awarded the Red Cliff Tribe a 105-thousand dollar grant to assess and further investigate this 20 mile square site and report the findings in October for possible clean-up.


For the GLRC, I’m Mike Simonson.