Daily Archives: April 18, 2012

Oil speculator witch hunt, 2012 edition

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Michael Giberson

Steve Mufson at the Washington Post reports:

President Obama proposed measures Tuesday to step up oversight of energy markets and boost by tenfold the penalties for market manipulation, in an effort to blunt political pressure over the 20 percent increase in gasoline prices since the beginning of the year. [Links in source.]

Not that the administration has turned up any evidence of problems in the market:

A senior administration official said the president wants to increase the number of “cops on the beat” to stop illegal speculation and market ma­nipu­la­tion…. But neither Obama nor his aides pointed to any examples of such illegal activity or to any evidence that oil speculators had, in fact, been responsible for raising prices recently. The senior official said that oil prices have been rising mainly because of growing global demand and political uncertainty in the Persian Gulf. Obama cited “global trends” in his announcement. Lawmakers on both sides of the political divide have alleged that “speculation” is partly responsible for the jump in oil prices over the past year, but they have not offered any examples, either.

See also: the Wall Street Journal‘s article; the New York Times on the topic; and from The Nation, “Obama Announces Empty Crackdown on Oil Speculation.”

The Nation‘s piece is interesting, essentially claiming that the President is right on the merit of his proposals, but just pandering to the public with symbolic gestures since five out of six of his proposals require Congressional action the President knows he won’t get, and the President refuses to do the one thing he can do that would work (in the author’s view): telling the attorney general to start subpoenaing oil traders and begin actually uncovering oil market manipulation.

Of course you may recall that a year ago the President did tell his attorney general to constitute an Oil and Gas Price Fraud Working Group. Last month the Attorney General reported on its many great successes.

Just kidding, they’ve got nothing. Here is what the Attorney General actually said on March 9, 2012:

Since last April – when I established a new part of the Task Force known as the Oil and Gas Price Fraud Working Group – we’ve also been focused on identifying civil or criminal violations in the oil and gasoline markets, and ensuring that American consumers are not harmed by unlawful conduct.   This Working Group’s latest meeting was held at the Justice Department just this morning – and its members discussed a variety of topics, including the role of speculators in the market; recent reports and enforcement matters by various Working Group members – such as the FTC and the New York State Attorney General’s Office; as well as ways to improve information sharing between Working Group members and partners; and where we go from here.

I can also report that one of the Working Group’s members – the Federal Trade Commission – is currently conducting an investigation, with assistance from other Working Group members, into whether gas prices have been affected by any antitrust violation or market manipulation by refiners, oil producers, transporters, marketers, physical or financial traders, or others.  Working Group members stand ready to act if the FTC learns anything that implicates the laws they enforce.

So in short, they’ve held meetings, talked about stuff, and are working on better “information sharing” (always a popular task for interagency task forces because you get to have new processes requiring new paperwork so you can justify new staff to handle the added work load). Oh yeah, the FTC is conducting an investigation. (Which has been known since at least last December and so far no results. More from McClatchy on the OGPFWG. A blogger at Think Progress is seriously disappointed in the administration’s lack of commitment to rooting out oil market manipulators.)

Like before, a shameful, pandering witch hunt in search of short-term political advantage. (And by the way, the GOP is no better in their beating of the political drums trying to pin high gasoline prices on the President’s failure to approve the Keystone XL pipeline and reductions of oil output from federal lands.)

How green is your EV?

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Lynne Kiesling

On Monday the Union of Concerned Scientists released an analysis estimating the MPG equivalence of electric vehicles. The point of the analysis is this: taking as given an objective of greenhouse gas emission reduction, how do electric vehicles compare to internal combustion vehicles in that dimension? To do such an analysis requires comparing the GHG emissions across the two types of engines, taking into account that the electricity generation fuel mix varies across the country. Here’s how they did that:

Most drivers are familiar with the concept of miles per gallon (mpg), the number of miles a car can travel on a gallon of gasoline. The greater the mpg, the less fuel burned and the lower your global warming emissions. But how can such consumption be figured for electric vehicles, which don’t use gasoline? One way is by determining how many miles per gallon a gasoline-powered vehicle would need to achieve in order to match the global warming emissions of an EV.

The first step in this process is to evaluate the global warming emissions that would result at the power plant from charging a vehicle with a specific amount of electricity. Then we convert this estimate into a gasoline mile-per-gallon equivalent—designated mpgghg, where ghg stands for greenhouse gases. If an electric vehicle has an  mpgghg value equal to the mpg of a gasoline-powered vehicle, both vehicles will emit the same amounts of global warming pollutants for every mile they travel.

For example, if you were to charge a typical midsize electric vehicle using electricity generated by coal-fired power plants, that vehicle would have an  mpgghg of 30. In other words, the global warming emissions from driving that electric vehicle would be equivalent to the emissions from operating a gasoline vehicle with 30 mpg fuel economy over the same distance (Table 1.1).3 Under this equivalency, the cleaner an electricity
generation source, the higher the mpgghg . When charging an EV from resources such as wind or solar, the mpg equivalent is in the hundreds (or thousands) because these resources produce very little global warming emissions when generating electricity.

This map, from a New York Times feature on the report, summarizes the results:

The results reflect the regional variety in electricity generation fuel mix — hydro power in the Pacific Northwest increases the mpgghg there, as does the predominance of nuclear around Chicago. The results suggest that even in the coal-intensive Midwest and plains states, electric vehicles using coal-generated electricity outperform the standard 4-door 27 MPG sedan in the greenhouse gas dimension.

I found this analysis useful and informative. Frankly, I often take UCS analyses with a grain of salt, because they are an advocacy group and generally start their analyses with presumptions of catastrophic global warming that directs their conclusions, while I think it’s more scientific to make assumptions that weaken your conclusion so that you don’t bias your analysis toward your desired conclusion. This analysis, while still a piece of advocacy, presents the calculations and mpgghg comparisons in a more dispassionate fashion that I found informative. The New York Times also had an article on Sunday summarizing the report.