Karma’s a Botch

Posted on October 24, 2011 by Steve Maley

Image from Wikipedia.

Last week, we heard about the Fisker Karma, the new electric vehicle being built in Finland using a $529 million loan from U.S. taxpayers. Beneficiaries of this deal include one Albert Gore, partner in the “green” venture capital firm Kleiner Perkins Caufield & Byers.

Now Forbes contributor Warren Meyer weighs in with an analysis of the Karma’s true energy efficiency, rate in miles-per-gallon equivalent according to a DOE formula:

Update: Fisker Karma Electric Car Gets Worse Mileage Than an SUV

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Natural Gas: Ponzi Scheme, Pandora’s Box or Rubik’s Cube?

Posted on October 20, 2011 by Steve Maley

The New York Times descends even deeper into self-parody with its ongoing crusade against natural gas development.

Thursday’s installment:

Rush to Drill for Natural Gas Creates Conflicts With Mortgages

It seems that some mortgage lenders are beginning to balk at lending money secured by real estate if said real estate is under development for natural gas.

A credit union in upstate New York has started requiring gas companies to promise to pay for any damage caused by drilling that may lead to devaluation of its mortgaged properties. Another will make home loans only to people who expressly agree not to sign a gas lease as long as they hold the mortgage. …

However, the banking industry is only starting to appreciate the complexity and possible consequences, they added.

“It’s truly Pandora’s box,” said Cosimo Manzo, a vice president of First Heritage Financial, a mortgage services company in Philadelphia, during a presentation to Pennsylvania lenders posted online in July by a state credit union association. He also compared getting leases to comply with mortgage rules to solving a Rubik’s Cube.

[Emphasis added.]

That seems odd to me, a Louisianian, because around here mortgage lenders tend to view it as a positive if landowners have oil and gas wells on their property. Landowners are paid quite handsomely for lease rights, compensated for land and crop damages, and paid a generous share of production on any oil and gas removed from their property. Oil and gas development makes property more valuable, not less. Its owners more likely to repay their obligations with all that free cash flow.

So here’s a little free advice for my New York friends:

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Windmills are not healthy for bats, eagles and other flying things.

Posted on October 18, 2011 by Steve Maley

The giant Bird Cuisinarts are at it again. Only this time they’re killing bats. Well, a bat, but an endangered bat.

Windmills stopped at night after bat death

Thirty-five windmills at a western Pennsylvania wind farm have been silenced at night since a bat that belongs to an endangered species was found dead under one of the turbines.

The Tribune-Democrat of Johnstown is reporting the farm shut down the windmills overnight after the Indiana bat was found Sept. 26.

Shut it down at night. That’s a terrific idea. Wind’s main problem is that it is inconsistent, intermittent and generally unreliable. So where is our green energy going to come from at night?

Solar. At night. Really.

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Competence 2012

Posted on October 10, 2011 by Steve Maley

Maybe I’m all alone here, but I’m thrilled with the way the Republican field of candidates is shaping up for 2012.

Of course they all have faults. But there is one trait common to the three who have risen to the top: proven managerial competence.

I have my favorite, but I think we can agree that they all have a successful track record. Among these guys, you can back the flavor of competence that’s important to you.

Herman Cain represents turnaround CEO-competence. He knows about structuring a balance sheet, cutting costs, trimming staff in a downtrodden organization and hiring and empowering winners. He knows how to keep underlings accountable.

Mitt Romney offers investment banker competence, the ability to choose between winning and losing ideas, and the ability to identify the key strategic elements of success. He’s also been the Republican governor in a very blue state, and a successful Olympic organizer.

Rick Perry has demonstrated his competence in the public arena, as a candidate and governor of a vibrant and diverse state, one of the few success stories of recent years. Just as important, he understands that government has its limits and that any economic turnaround must be rooted in the private sector.

Any of these candidates will offer a stark contrast with the incumbent in November’s election. Continue reading →

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Nevada Geothermal: Solyndra Lite?

Posted on October 2, 2011 by Steve Maley

The New York Times reports on another Department of Energy green energy loan going bad. This one involves Nevada Geothermal Power, which generates electrical power using near-surface geothermal heat. After $79 million in loans and $66 million in outright grants, the company’s auditor has concluded that there is significant doubts about its ability to continue as a going concern.

In this case, Nevada Geothermal was unable to deliver electricity in the quantities that it had planned and contracted to sell. It has also encountered technical difficulty with well design and surface facilities that may require substantially more investment.

And like Solyndra, there are Democratic fingerprints at the scene.
Continue reading →

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Harold Hamm and the North Dakota Miracle

Posted on October 2, 2011 by Steve Maley

Unlike most of his peers, Harold Hamm didn’t get his start in the oil field with degree in geology or engineering. Hamm drove a truck. Maybe the lack of a college degree made it easier for Hamm to imagine the possible and focus on making it happen.

“Imagining the possible” allowed Hamm to build the nation’s 14th-largest oil company, Continental Resources, based in Enid, OK. (The company plans to move its headquarters to Oklahoma City in 2012.)

Hamm is the subject of The Wall Street Journal’s Weekend Interview: “How North Dakota Became Saudi Arabia“

Hamm and Continental are credited with unlocking the crude oil of the Bakken Shale of North Dakota and Montana. He believes it is possible that the Bakken’s ultimate bounty of oil will surpass Alaska’s Prudhoe Bay and may even reach 24 billion barrels, roughly equivalent to the current-day total proved reserves of the U.S.

I’m not sure I buy that, but I don’t feel like betting against Mr. Hamm, either. He currently ranks #33 on the Forbes 400, and if his success in the Bakken holds, he’ll soon be in Warren Buffett territory.

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Louisiana Gulf Coast Oil Exposition, Lafayette, LA Oct 25-27

Posted on September 30, 2011 by Steve Maley

@LAGCOE on twitter
LAGCOE Home Page

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Hubbert’s Peak or Yergin’s Plateau?

Posted on September 18, 2011 by Steve Maley

In 1956, Shell geologist M. King Hubbert correctly predicted that oil production in the United States would reach a peak around 1970. Since his Peak Oil theory fits so well with the Malthusian worldview of “Progressives”, anti-capitalists and anarchists, Hubbert has become a posthumous hero to the Left, an unusual role for a scientist polluted by the filthy lucre of the oil industry.

Hubbert's depiction of Global Peak Oil. From Wikipedia.

Peak Oil’s fundamental assumption is that the supply of oil is finite and fixed. The peak of the oil production curve is reached when half of the total resource base has been produced, so rate vs time exhibits a symmetric bell-shaped curve. Post peak, rate declines rapidly. Hubbert demonstrated a peak for oil production in Texas, and he extended his theory to correctly predict the time (but not the rate) of the peak for the U.S. World oil production is supposed to have peaked in the last five years or so.

But Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and a Pulitzer Prize-winning author, argues in a WSJ.com Saturday Essay that Peak Oil theory has a fatal flaw, which is rooted in Hubbert’s blind spot: economics. (H/T to Mark J. Perry and his excellent Carpe Diem blog.)

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Good News: Oil Drilling Off Florida Begins Nov. 1. Bad News: It’s in Cuba.

Posted on September 10, 2011 by Steve Maley

Hunting for Cuban oil. (Adalberto Roque/AFP/Getty Images)

While it’s been the subject of rumor, gossip and misinformation for the last several years, this time it’s real: drilling off the north shore of Cuba is scheduled to begin November 1. Six wells are planned to be drilled with this rig by the various international companies who own exploration rights off the north shore of the island.

…Spanish energy company Repsol and its partners are now bringing the Chinese-built [drilling rig] Scarabeo 9 to a site off Cuba’s northwest coast, where it aims to drill as soon as November at a depth of more than 5,500 feet, deeper than the blown-out well that spewed 5 million barrels of crude into the Gulf last summer.

The [rig’s] journey to Cuba will take two months, and once it arrives it will be put into operation almost immediately, said the official, who asked not to be identified. It will be used first as an exploratory well for a consortium led by Spanish oil giant Repsol YPF, which drilled the only offshore well in Cuba in 2004 and said at the time it had found hydrocarbons. [Source.]

The current trade embargo requires the operation contain less than 10% U.S. content. Of the major components, only the blowout preventer (BOP) is an American product (Cameron International).

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Louisiana Dems Field >>Zero<< Credible Candidates in Statewide Qualifying

Posted on September 8, 2011 by Steve Maley

Huey Long must be turning over in his grave. Qualifying closed today for Louisiana’s Fall 2011 statewide elections, and the once super-dominant Democratic Party has failed to field a single credible candidate for statewide office.

Not a single one.

Louisiana’s citizens have common sense. They understand that the policies favored by Washington Dems (on energy in particular) seem expressly designed to cripple Louisiana’s economy and kill Louisiana’s best jobs. They realize that there’s no real national role to play for a pro-life Democrat.

Just recently, Democratic registration fell below 50% for the first time in, well, ever.

Governor – Bobby Jindal will run against a field of nine opponents: four independents, four Democrats and one Libertarian. Two of the Dems are schoolteachers, and one of those is a self-described “Tea Party Democrat” who will try to outflank Jindal on the right.

Other than Jindal, the Governor’s race features a field of political neophytes and perennial also-rans. None of the challengers currently holds elective office. John Georges, who finished #3 in the 2007 Governor’s race, has decided to take his $10 million & go home rather than run again. Continue reading →

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