Most American consumers seem to gauge the state of the global energy crisis by the price they pay per gallon of gasoline. In fact, for years now prices at the pump have determined to a large extent how people view the economy. There is a logistical reason for this, as the rise of US dollar is usually prefaced by a dip in oil prices. Of course, in more recent years this has been compounded by actual crippling economic collapses that have taken this nation to the brink of a Depression. Put simply, the average consumer has very little information by which to gauge the state of our energy situation. Most people just assume it’s bad, and pray that gas doesn’t hit $5 a gallon.
The most recent report from the pumps is that gasoline prices are down. This comes on the heels of distressing prior reports that both crude oil and gasoline prices were expected to rise dramatically this summer. The North American bellwether stock West Texas intermediate peaked in February and has since fallen to about $90 a barrel for the first time in over six months. A similar story is being told by all the other major crude suppliers. If current conditions hold, we can expect a summer of ‘cheap gas.’
There are a number of possible explanations for this slump in prices. Many analysts point to increased production from hotspots like Libya and Saudi Arabia, worries over economic conditions in Europe, a temporary respite from Chinese growth, and a reinvigorated US dollar as influences. International politics and markets usually create the most noticeable impact on the prices of crude oil.
Still others point to a lull in the growing international dispute regarding Iran’s nuclear program. For years now, people have worried that Iran may eventually be angered enough by intrusions from the International Atomic Energy Agency to close the Strait of Hormuz. Hormuz is one of the most significant portals for Middle East oil and a major closure to it could cause rampant spikes in global oil prices. But in recent months there has been a considerable soothing of tensions between Iran and Western powers, so much so that some analysts point to this as a contributing factor as to why oil prices have dropped. This is not an issue that will soon go away, however.
Meanwhile the geothermal industry continues to give ambiguous signs of growth. Another new technology is enhanced geothermal systems (EGS) that utilizes a technique called ‘hydraulic fracturing.’ While only 91 MW of energy went live last year in the US, the number of plants has increased and the scale of their technological development has expanded. The Geothermal Energy Association reports that about 147 plants are presently being developed, which could collectively produce 5,300 MW of geothermal energy upon completion. The expansion is due to new technologies that are allowing producers to tap low-temperature reserves using fluid byproducts. Such co-production enterprises are in motion in four states: North Dakota, Wyoming, Louisiana, and Texas. A variety of green-focused companies based in Texas can be found by searching the newest generation of comparison sites like www.ShopElectricityRatesTexas.com.
Meanwhile solar energy in the US could be set to ramp up following a series of anti-dumping duties levied against Big China Solar. Chinese solar, which for years has been hedging the global market by peddling cheap panels in the US, has already seen a considerable hit in international markets. The bellwether for this was JA Solar (JASO), which has lost 85% of its market value in the last year, taking another huge hit. How this will bode for US solar is still unknown, as many US solar companies were dependent on the inexpensive prices of the Chinese panels.
In other oil news, Ottawa has opened 905,000 hectares of undersea offshore land to prospective energy companies. Canada, who has expressed eagerness for developing new energy options, has made several moves toward this end, including the Northern Gateway pipeline proposal. The push into the Arctic north could be a risky move though, as the payload acquired from the new petroleum fields may not provide actionable crude oil for decades.
Eagerness to drill for Arctic oil is not new. Just recently, in fact, ExxonMobil inked a deal with the firm Rosneft that would involve an oil exploration partnership. Other big names in energy, such as Apache, Shell, and BP are sizing up new Alaskan fields; ConocoPhillips has been testing for natural gas that could potentially be mined from Alaskan methane hydrates. Companies have been flirting with the idea of putting bids in on the Canadian area for years, but these plans were put on the backburner after the 2010 BP oil spill created a critical mass of activist outcry against the dangers of oil.
Speaking of which, British Petroleum recently solidified a deal with the EPA that would see the embattled energy titan spending hundreds of million of dollars contriving ways to reduce emissions at a US refinery and investing in new refineries. BP, who since the spill has been festooned with sanctions, lawsuits, regulatory restrictions and public backlash, may find itself mired in a public relations scramble to disassociate its name from ineptness and environmental irresponsibility.
Meanwhile, while international conglomerates turn up every stone in their search for energy reserves, consumers just want to know what gas prices will be like for the summer. Anxiety over dwindling supplies of petroleum and natural gas seem to be perpetually upstaged by dime-store financial concerns and election-year politics.
The green sustainability movement, buoyed by an uptick in consumer interest, continues to challenge efforts to drill for new oil, even while admitting that solar and wind power could not possibly satisfy the world’s energy demands. Yet. And in a world where energy use is up and expected to soar exponentially in the coming years as newly industrialized nations seek to mimic the US, Japan, and other consumer havens, it could just be that the real conversation about how we will manage the cost of energy with the demand for traditional first world lifestyles has just begun.
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