Crude oil prices have climbed the last two days, breaking $100 per barrel earlier today. This is because,as sellers flee the stock market, they are looking for safe havens in commodities. This, I think, is temporary, and that money will find more permanent homes (for oil,that is, not necessarily other commodities). The financial crisis almost certainly means a global economic contraction, which in turns mean decreased energy demand, which will result in lower oil prices.
Some links from Frank: A race is on to develop pipes for the transport of ethanol. This is the kind of investment money I expect to see dry up as oil prices decline. A major negative in ethanol is that it cannot piggyback on the existing petroleum infrastructure and requires massive new investment to create a duplicate system.
Meanwhile, some of the big ethanol firms are experiencing serious financial difficulties.
Frank also sends along an article about Tesla’s second vehicle. As the Instapundit noted yesterday, I’d like to see them get their first car into production. A lot of hype, a lot of promise, a lot of big plans . . . let’s see some actual production already.
Speaking of Instapundit, two links from there yesterday. First, Aquaflow Bionomic reports developments in it’s “Green Crude” efforts: “Green Crude is made from wild algae grown on human sewage, and as such, would not use valuable acres which could then be used to, say, grow more food instead of fuel. The company states that Green Crude produces 90 per cent less emissions than regular diesel, and in addition, it produces a great byproduct, clean Water for irrigation or industrial re-use.”
Also, moving from Green Crude to old, dirty crude, a company called Petrobanks Capri reports developments in new technology that will allow the more efficient processing of oil sands and heavy oil into better grade crude. The prospect of technological developments like this are why the imminent Peak Oil crowd are likely wrong.
Finally, from Open Markets, an interesting take on the fall of Lehman Brothers:
“Now, I am not saying that Lehman Bros fell because its MD was an enthusiastic environmentalist. It failed because of risky decisions made in the mortgage market. However, its failure – like Enron’s before it – demonstrates that attempting to trade in artificial assets that represent no real value is a supremely risky business. Carbon trading would be just such a risk, dependent as it is on fickle government action. Lehman Bros’ collapse should make Wall Street, utilities and investors equally wary of lobbying for such a market.”
