http://thearchdruidreport.blogspot.com/2008/10/tyranny-of-immediate.html

"The Tyranny of the Immediate"

"One of the great challenges that has to be faced in any attempt to make sense of history while it’s happening is the misleading impact of short-term trends. While the late housing bubble was still inflating, for example, soaring real estate values made it easy for most people to fool themselves into believing that it made sense to sink their net worth, and then some, into houses priced at even the most delusional levels. They had seen prices march steadily upwards, month after month and year after year, and that experience made it seem likely that the same steady march would continue for the foreseeable future.

Friday, October 24, 2008

Video at: http://www.cnbc.com/id/27356328

"OPEC Agrees on Sharp Output Cut, Oil Slide Goes On"
By Reuters 24 Oct 2008 09:38 AM ET

"An emergency OPEC meeting on Friday reached swift agreement to chop production by 1.5 million barrels per day (bpd) in an effort to halt a deep oil price slide.

International benchmark U.S. crude has slumped by close to 60 percent from a record high of $147.27 hit in July.

On Friday, it fell again to below $63 a barrel.

"The decision was straightforward," Saudi Oil Minister Ali al-Naimi said after the meeting. "OPEC will do whatever is necessary to balance oil markets."

In the world's biggest energy consumer the United States, oil prices and economic weakness have been major factors in the run-up to the November presidential election.

Washington was quick to criticize OPEC's decision.

"It has always been our view that the value of commodities, including oil, should be determined in open, competitive markets and not by these kinds of anti-market production decisions," White House spokesman Tony Fratto said.

For the Organization of the Petroleum Exporting Countries, the speed of the oil market's collapse after a record rally has stirred memories of the Asian financial crisis in the late 1990s.

OPEC's sluggish response then as demand disappeared and oil stocks mounted up helped to push oil to less than $10 in 1998.

"OPEC is showing it is not going to make that mistake again," said David Kirsch, a manager at Washington-based PFC Energy.

From Gary Hooser: http://garyhooser.livejournal.com/25661.html

Hawaii Energy Proposal - Transformational

The recent agreement reached between the State of Hawaii and HECO, the State’s primary energy provider has the potential to fundamentally transform the future of energy in our state.

Unfortunately the local newspapers chose to focus only on the sexy, expensive and potentially controversial proposal to lay an undersea cable between Maui County and the City and County of Honolulu.

The Honolulu Advertiser http://www.honoluluadvertiser.com/article/20081021/NEWS01/810210358/1001

The Honolulu Star Bulletin http://www.starbulletin.com/news/hawaiinews/20081021_Isles_power_up_clea...

Totally missing from the stories covered in local media were the provisions on decoupling and feed-in tariff. Also missing from the local news was the lifting of net metering caps, the raising of the Portfolio Standards, the removal of “efficiency savings” from the Portfolio Standard definitions, the restriction against the development of new fossil fuel generators, and numerous other innovative and forward thinking proposals.

This agreement represents the culmination of years of groundwork that has been set into place by the legislature and the recent efforts and very productive collaboration between the Department of Business, Economic Development and Tourism and the U.S. Department of Energy.

A summary of the agreement:
1) Agreement to an additional 1,000 MW of renewable energy resources on Oahu

Thursday, October 23, 2008
For all clickable links, see: http://alohaanalytics.blogspot.com/2008/10/oil-price-temporarily-low.htm...

Regarding recent posts here on the price of oil:

Looking for Good Information on Commodity Deflation
Oil Price Changing Short-term Outlook for Hawaii
KIUC Should Act on Limited Risk Hedging NOW
Why was there the Recent Run-Up and Down of Oil Prices?

Here are two more good new videos to watch on this:

Oil Seen Trading at $95 Bbl in 2009
Oil Prices Plummet

Regarding Budgetary Oil Price Floors for Individual OPEC Countries:

From: www.rgemonitor.com
"GCC Gov't Expenditure: Will Lower Oil Prices Endanger Budget Expansion?"

"2008 budgets expanded cautiously after overspending in previous oil booms led to period of underspending. Falling oil prices may cause governments to cut fiscal spending in 2009. The lowest breakeven oil price that would bring 2008-2009 budgets into balance is in Saudi Arabia ($30/bbl), followed by UAE ($40/bbl) and Qatar ($55/bbl). Therefore, that means that Saudi Arabia can maintain the current level of budget spending even if the oil price were to fall to $30/bbl. The highest breakeven is in Kuwait ($75/bbl), but that is mainly due to the one-off budget transfer of c.$20bn to capitalize the social security system in FY08/09. The average breakeven for GCC is $50/bbl (Merrill Lynch)

http://news.yahoo.com/s/ap/20081021/ap_on_re_us/hawaii_energy

Hawaii (HEC) Outlines Renewable Energy Goals
"Hawaii outlines renewable energy goals"

By MARK NIESSE Oct. 21, 2008

HONOLULU – "Hawaii's largest utility has signed on to a plan to move the state away from dependence on fossil fuels for electricity and ground transportation.

The goal is to create 70 percent of Hawaii's energy use from clean energy sources by 2030. Currently, the state gets about 10 percent of its energy from renewable sources.

Under the latest agreement, Hawaiian Electric Co. commits to not build any new coal plants, integrate up to 1,100 megawatts of renewable energy into the power grid and convert existing fossil fuel generators to biofuels using locally grown crops.

'We don't have years and years anymore to make these changes,' Gov. Linda Lingle said Monday. 'These are not hopes or dreams or wishes, these are our specific plans that we hope to achieve.'

The transition from fossil fuels to renewable energy is a major step for Hawaiian Electric, said Connie Lau, chairwoman of the board of directors for the utility, which powers Oahu, Maui and the Big Island.

'This is a historic moment for all of us, and it really does take us far beyond what our companies have done historically,' Lau said.

But some of the biggest ideas in the overall deal — including expensive undersea power cables to move wind-generated energy between the islands — lack funding or even cost estimates for how they'll become reality.

Sunday, October 19, 2008

"New Energy Economy Emerging in the United States"
by Lester R. Brown Earth Policy Institute October 15, 2008

"As fossil fuel prices rise, as oil insecurity deepens, and as concerns about climate change cast a shadow over the future of coal, a new energy economy is emerging in the United States. The old energy economy, fueled by oil, coal, and natural gas, is being replaced by one powered by wind, solar, and geothermal energy. The transition is moving at a pace and on a scale that we could not have imagined even a year ago.

Consider Texas. Long the leading oil-producing state, it is now also the leading generator of electricity from wind, having overtaken California two years ago. Texas now has nearly 6,000 megawatts of wind-generating capacity online and a staggering 39,000 megawatts in the construction and planning stages. When all this is completed, Texas will have 45,000 megawatts of wind-generating capacity (think 45 coal-fired power plants). This will more than satisfy the residential needs of the state's 24 million people, enabling Texas to feed electricity to nearby states such as Louisiana and Mississippi.

http://www.kedb.com/energyconference.asp

Presented by Kaua`i Economic Development Board in Partnership with the United States Department of Energy, County of Kaua`i Office of Economic Development, and Kaua`i Island Utility Cooperative

Saturday, October 18, 2008
http://alohaanalytics.blogspot.com/2008/10/why-was-there-recent-run-up-a...

The prior post here shows the graphs of what happened to oil prices over the past year. The question arises, "Why was there that run-up in price, and how did it happen?" The best article I have read on it is the following article. Basically the article characterizes what happened as a speculative run-up that was attempted by market makers to try to offset their 'mark to market' unrealized paper losses from mortgage derivatives and postpone the results from that...what the markets are now dealing with:

http://artvoice.com/issues/v7n40/crude
Cover Story
"Crude"
by Jed Morey

"Or, How Wall Street investment banks manipulated oil prices to try to save their hides, screwing American consumers and the rest of the world and breaking the economy anyway"

"To John Mack, it must seem like just yesterday that he received a $40 million bonus as chairman and CEO of Morgan Stanley, the largest bonus ever given on Wall Street at the time. That was at the end of 2006, a lifetime ago in the financial world, and things are much different now. Continued fallout from the credit crisis has forced Morgan into a corner and its chairman against a wall. It could be worse. Mack could have run Merrill Lynch, Lehman Brothers, or Bear Stearns.

Luckily, Mack is an oil man, in every sense of the word. Under Mack, Morgan Stanley has amassed a formidable group of companies involved in every aspect of the petroleum business, from refineries to home heating oil.

Friday, October 17, 2008

A little more than a month ago by chance I met Gary Bulson, Senior Engineer for the Hyatt Regency Maui Resort and Spa, mentioned in the article below. Have also been impressed with the leadership that the Hyatt Regency Kauai has been taking on related matters, particularly with solar and guest available recycling.

I compare this to another hotel here on Kauai that regularly left almost all of it's glass doors open on almost all floors, losing an untold amount of air-conditioning to the open environment. One, it was an incredible expense for the hotel not allocated to individual guests, and two, it was a huge waste of energy. All it would have taken to address is a quality control standard that all employees close any glass doors they saw left open by guests. But that was not done. Maybe it will be done in the future. Anyway, the Hyatt is providing great leadership on these matters throughout the state as with the following example:

"Hawaiian resort installs Inncom's ecoMODE system"
Oct 16, 2008 H&MM Week In Review

Niantic, Conn.--September 17, 2008--"The Hyatt Regency Maui Resort and Spa has become the first Hyatt property to upgrade its energy-management system with the environmentally-friendly ecoMODE option from Inncom..."
[Rest of article here: http://www.hotelmotel.com/hotelmotel/ArticleStandard/Article/detail/5592... ]

Aloha, Brad

Friday, October 17, 2008
For all graphs and clickable links see:
http://alohaanalytics.blogspot.com/2008/10/oil-price-changing-short-term...

Editor's Note -- An ABC Video has since come out on Oct. 20, 2008 on these matters: http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=10291122

"Oil Price Changing Short-term Outlook for Hawaii"

Don't blink while watching these financial markets, you might have missed the significance of what has happened to oil prices.

Of course here in Hawaii we see it at the gas pump, first time in more than a decade that gas prices don't seem to be "sticky" at high prices when the price per barrel of oil came down.

Oil was at it's all time high price per barrel this past July 11, 2008, at $147/barrel, when gas prices in much of Hawaii were about $5/gallon. The state was in real trouble at that point. Now with presumed deflationary events in the wider economy and credit markets, most consumable commodities have come down 30 to 50% in the past 3 months. Oil is at $71/barrel as of today, Oct. 17, 2008, and gasoline in Hawaii is below $4.00/gallon even on the outer islands.

Also of interest and importance, jet fuel is down 48% from its high in July 2008, now equal to the price that it was at in early Sept. 2007, when things started to go south. Marine diesel fuel (MDO) is down 30% from its high in July 2008. Other noteable commodities, such as steel and aluminium, are also off their highs.