2006 Review/2007 Outlook | Green Energy News

December 24, 2006 – Vol. 11 No. 40

2006 REVIEW / 2007 OUTLOOK.

Frankly, the view into the crystal ball for 2007 is a little cloudy. 2006 turned out to be so unpredictable that I’m wary about saying anything about what could or should happen in 2007. Much of what happens in 2007 depends on what happens with the US economy and what happens elsewhere in the world, meaning Iraq, and other hotspots as well.

It’s hard to imagine Iraq getting any better in 2007. The oil and the global economy are ultimately at stake of course.

The newly elected Democratic majority in the US Congress will likely take steps to add support to renewable and efficient energy, but those steps take months to argue, and more months (into 2008) to take effect. A guess is that Bush will sign whatever they come up with. Bush has generally supported green energy anyway. (Further, he signs nearly everything that comes across his desk.)

And anything from Congress on global warming beside renewables and energy efficiency? If they do, don’t thank them, thank the Department of the Interior (DOI) (which works under hat of the White House) for putting Polar Bears on the threatened, but not endangered, species list due to loss of habitat - melting Arctic ice.

The whole ice cap is expected to disappear, at least for part of the year, by 2040. That became clearer when days after the DOI Polar Bear announcement the story of a city-sized chunk of ice that had broken off Ellesmere Island in Canada, more than a year before, became front page news. The Arctic is closer to home than the Antarctic where big ice has been breaking away for some time.

Americans like Polar Bears. I guess they’ll become a rallying cry in 2007 to do something about global warming.

The most remarkable thing about the announcement was it was the first time that the Bush Administration admitted publicly that global warming was a problem.

So 2007 looks like a wait-and-see kind of year but keep your seat belts fastened in case of unexpected turbulence.

2006 was supposed to be another above-average year for Atlantic hurricanes that would have driven oil well above the $78 per barrel that it reached. Hybrid car sales and renewable fuels would have gone into the stratosphere. Instead, the Atlantic hurricane season was lackluster because of a weak El Nino and dusty dry air that blew off Africa sucking out necessary hurricane-forming moisture. Along with a slowing US economy oil dropped down to $60 a barrel or so where it is now. At that price gasoline in the US is well under $3.00 a gallon and thus the waiting lines for hybrids has disappeared.

(By the way, the Eastern Pacific hurricane season seemed plenty busy, but hurricanes there don’t get much attention since they often don’t touch land.)

No one saw the Israeli / Lebanon war coming. But as much as I was concerned that it was the beginning of World War III, and oil would head far north of $100 a barrel, it didn’t happen either. (Though tensions are still brewing there as elsewhere in the Middle East, of course.)

Early in the year gasoline prices at the pump shot upwards in the US, but it was mostly due to a shortage of ethanol in markets with boutique gasoline. Ethanol was substituted for MTBE as gasoline distributors ran to ethanol to keep themselves out of court for environmental concerns related to the chemical additive.

Soon after winter’s end in 2007 gasoline distributors will be adding ethanol again, but now they’ve had many months to prepare, so there shouldn’t be shortages of ethanol, but we’ll see. There should be some price increase associated with the changeover, however. I have no idea how much.

The 2005 Energy Bill gave a huge gift to the ethanol industry which spurred investment throughout 2006.

Of all the news from industry 2006 there’s one that stand’s out: General Motor’s announcement that it would build a plug-in hybrid for the US market. True, it’s just one offering, for now, but is a major shift from a company that crushed its electric vehicles just a few years ago.

More so, GM’s announcement signifies a major shift in attitude from major US corporations. They’re now thinking of survival in the face of oil instability and global warming and are looking to Washington to help if they can’t do it internally. Global warming could do serious harm to business as could the continued over-reliance on oil from unfriendly trading partners.

As John Simpson of the BBC put it “Firstly, it (2006) was the year when the world at large accepted the scientific arguments that global warming was the most serious threat faced by our planet. It was accepted that far from being a cyclical phenomenon, it had been created by our own reckless industrialisation.”