Wednesday, July 18, 2007

Energy prices to remain high

That's the verdict, at least, of a few recent news items.

First of all, the National Petroleum Council released a study (pdf of execsum here) which projected continued energy demand growth which will require the use of every available energy resource, dirty and clean -- very interestingly, they made a strong endorsement of energy efficiency as an energy source.

Secondly, this news that Goldman Sachs is projecting $95 per barrel oil by the end of the year, unless OPEC and other suppliers significantly boost output. Now, oil is just one energy source with limited direct impacts on many clean energy technology markets.

But thirdly, word came out that electricity consumption in Europe is continuing to expand at the same pace as GDP, despite significant efforts to promote efficiency improvements. And in the U.S., Citibank is advising their investor clients to abandon coal industry investments -- for a number of reasons including expectations of continued pressure to reduce carbon emissions.

It's a good time to already have a head start "up the learning curve". But caution, as always, is still warranted.

Cleantech VC deals so far this week:
  • Boston-area waste-to-energy startup Ze-Gen announced a $4.5mm Series A led by Flagship Ventures and including participation by VantagePoint Venture Partners.
  • SAGE Electrochromics, which has developed windows with the capability to quickly darken (to block light and heat, for significant energy savings) or clear up (for visibility) announced a $16mm Series B, led by Good Energies. Applied Ventures and Bekaert also participated in the round. The deal includes provisions for an additional $13mm in financing.
  • VentureWire reported that ImageTree, which is developing technology for forest inventory and management, has taken in $2mm in debt financing from BlueCrest Capital. The company's technology has applications in sustainable forestry and potentially for land-based carbon sequestration project monitoring.
  • UK-based Metalysis, which has proprietary technology for the production of specialty metals (for a number of applications including some in cleantech areas), raised a GBP 13mm round of financing from Environmental Technologies Fund, 3i, QinetiQ, Seven Spires, Chord Capital and Cambridge Capital Group.
Other news and notes: Most of this is outside of any VC's investment horizon, but it's a fascinating vision... Here's a useful presentation (note: link opens a pdf) describing Virgin Fuels' investment strategy, for those interested... Another relevant bplan competition -- the Oxford University 21st Century Challenge... Yet another article on why watertech is poised to attract VCs -- but VCs are having a tough time finding backable ventures (calling all entrepreneurs, we need you in watertech!!!)... Perhaps an unexpected problem for centralized utility-scale PV developers... Finally, your tax dollars at work, on a pretty nifty tech idea.

REMINDER for tomorrow's REBN-East networking event:
July 19th, at Flat Top Johnny's in Kendall Square, 6:30pm.
(Sponsored by Flagship Ventures)


Anonymous Anonymous said...

just passing this along re: The NPC report...

---------- Forwarded message ----------

Dear Friends of The Oil Drum,

I wanted to bring to your attention Stuart Staniford's post with his concerns in response to the National Petroleum Council's report released today, as well as some of our other recent posts.

Stuart writes in "The National Petroleum Council Report:"

"...the NPC put together a team who have a track record of being relentlessly overoptimistic, and the absolute trailing edge of concern about oil supply issues. What did they have to say? So, we could summarize this as "Peak oil is nowhere in sight; we think we can continue to grow oil supply in coming decades as we have in recent decades, but it's getting trickier and you a) better be prepared to grant all our various requests for assistance in pulling it off, and b) should start trying to use less of our products in case we can't quite manage it".


"the NPC report is saying that production will increase by around 25% over the next twenty five years, but this increase is entirely reliant on finding large amounts of new oil, mainly in the Middle East. Unfortunately, it is rather unlikely that the existing claims of oil reserves in the Middle East are true, and even less likely that massive amounts more oil can be found there. Even if it could, the Middle East is the least politically stable region of the world, and relying ever more heavily on it for critical inputs to our economy is likely to be fairly painful at regular intervals."

Stuart then takes a few moments to re-debunk some of the claims of the report in his post with his usual empirical approach. Lots of data and charts. :)


Robert Rapier also discussed some pieces of the NPC report in his post "Peak Lite Revisited:"

Robert writes....

While I believe that a global peak in worldwide oil production presents an unprecedented challenge to the way most of the Western world lives our lives, I do not believe that world oil production has yet peaked. However, in looking at the new oil capacity that is scheduled to come online, and contrasting that with the projected demand growth, it became clear to me over a year ago that demand was going to rise faster than new supply could come online.

This prompted me to propose the idea of " Peak Lite." It is "peak", because the symptoms will mostly manifest themselves as those of a true production peak: Not enough supply to meet demand. In fact, we have already passed the point at which there is enough $25/bbl oil supply to meet everyone's desires. But production can still grow in this scenario, which is why it is "lite". In that case, people may underestimate the significance of the problem.


Other recent work at The Oil Drum....

Gail Tverberg is putting together a small book of education materials to share on peak oil. The first two chapters are being edited by the TOD meatgrinder online right now! Here's the table of contents:


Chapter 1: What Is Peak Oil?
Chapter 2: Is This a False Alarm?
Chapter 3: Consequences of Peak Oil
Chapter 4: What Should We Do Now?
Chapter 5: Where Can We Get Reliable information?


Appendix A: How Oil Is Produced and Traded
Appendix B: Countries Already Reporting Energy Shortages
Appendix C: Rear Admiral Hyman Rickover's 1957 Speech "Energy and Our Future"
Appendix D: Discussion Questions for Classroom Use
Chapter 1:
Chapter 2:


Robert Rapier was one of the first people to call the ethanol craze out for what it is over two years ago. Now he's writing a chapter for a book on biofuels and he wants some feedback.

"As some of you may know, I am writing the renewable diesel chapter for a book on renewable energy. My submission is due at the end of July. The chapter is well underway, but I have a nagging feeling that I am forgetting to address something. So, I wanted to share the outline I have, and see if anyone has any comments. If you know of a substantial feedstock that I have missed, or can think of some things you think should be covered in a specific section, let me know."


Thank you for sending these around and sharing them on your sites. We really appreciate it.


About The Oil Drum: TOD is a community constructed with the purpose of bringing together intelligent people to have intelligent empirically-based discussions of the future of our energy supply. Most of our roster of editors and contributors possess advanced degrees (MAs, MScs, and Ph.D.s) from many disciplines including engineering, physics, other hard sciences, the social sciences, as well as other relevant fields. Our goal is to influence the discourse about our energy future by facilitating informed and analysis-based discussion about the future of our energy supply. (The Oil Drum currently averages over 12500 unique visits per day and over 30000 unique page views per day: ).

Simply put, we must push for a better discourse about, and understanding of, energy in the world--the geopolitical, political, and social aspects of a plateauing supply with ever growing global demand will have an impact on the daily lives, especially of those who are less fortunate. The question of when the "peak" will be--a question that can be debated by rational people, provided they had the requisite information--needs to be debated more forthrightly and in much more detail and with much more transparency and frequency than is currently the case. Too much is at stake not to do so.

The Oil Drum

11:56 AM  

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