All right readers, you knew this was coming. My Bonnie lies over the ocean. My Bonnie will make rig workers flee. My Bonnie will slow gulf operations, and bring oil bears to their knees. Sorry about that but I just had to do it. Batten down the hatches! Oil is getting blown out of its recent trading range hitting a three month high. With tropical storm Bonnie lying over the ocean and good earnings supporting the stock market, commodities markets are zest and full of life.
Of course Dave Tolleris at Weather Risk seems to think that the storm, won't be that big of a deal the market was helped along by this storm track. The reason is that according to the National Hurricane Center this is a storm that could be heading right into the east end of refinery row where 43% of our nations refining capacity is located, not to mention of course the Gulf also is home to 11% of the nations natural gas production and near 30% of total oil production. The Gulf of Mexico is also the nation's largest oil import terminal.
Possible flooding and slowed imports and some worse case scenarios helped shorts in the marketplace start to cover. But if the storm does little damage, the market place can take comfort in the fact that petroleum inventories are in better shape than they have been in the past to weather the storm. With supply near 20 year highs the market may realize that this storm may not really have a lasting impact on price.
The other impact of the storm is that efforts by BP to cap the oil leak will be put on hold. Reuter's News reports that officials leading the effort said many of the vessels and rigs involved in the operation would prepare to move out of the system's path. While these actions might delay the effort to kill the well for several days, the safety of the individuals at the well site is our highest concern, retired Coast Guard Admiral Thad Allan.
To give the storm all the credit for the market performance would not be fair. The resurgent euro, strong data out of Germany and great earnings and another dramatic mood shift in the marketplace helped drive stocks and commodities. The bulls are back as Euro Bank stress tests seem to be a success at least in the mind of traders. Technically we can move higher and test the old highs but the rally will be dependent on a good market mood and no bad economic news. Well speaking of plugs could an electric car be in your future? U.S. Senator Byron Dorgan wants you to know that his legislation to promote the deployment of plug-in electric drive motor vehicles was approved by, an overwhelming bipartisan majority in the U.S. Senate Energy and Natural Resources Committee. Senator Dorgan calls his the Promoting Electric Vehicle Act of 2010 and says it would extend and expand national incentives to accelerate the introduction of electric cars and trucks throughout the country which he says will significantly reduce gas consumption and create more jobs here at home.
Senator Dorgan says it is his goal to put the nation on a path to electrify half its cars and trucks by 2030. Senator Dorgan estimates if he can do that the U.S. demand for oil by about one-third. Now of course I know that sounds good on the surface but has the government done a good job promoting electric cars? Well maybe too good in at least one case.
John Stossel of The Fox Business network reported back in December 2009 that after money from the stimulus bill was spent on destroying perfectly good cars and building an Airport for Nobody, the WSJ reports that government has found an even more ridiculous way to spend your money: free golf carts. The purchase of some models could be absolutely free, Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year.
Is that about the coolest thing you've ever heard? The golf-cart boom follows an IRS ruling that many golf carts qualify for the electric-car credit. Tony Colangelo, in Florida, calls himself golf cart man and is already advertising free carts. Golf Cart Man is referring to his offer in which you can buy the cart for $8,000, get a $5,300 tax credit off your 2009 income tax, lease it back for $100 a month for 27 months, at which point Golf Cart Man will buy back the cart for $2,000.
This means you own a free Golf Cart or make $2,000 cash doing absolutely nothing!!! Stossel goes on to say, I thought this giveaway was outrageous enough that it would embarrass Congress into killing the tax credit. I thought the media would be all over Colangelo, after the WSJ story. I was wrong. When we called him, he said, I've never had so many phone calls, But most of the calls come from potential golf-cart buyers.
Colangelo said he had received some e-mails from newspapers, but my researcher was the first reporter with whom he'd spoken. He also said the golf-cart credit is a very good thing. Good for the politicians: It's all [about] going green. They want all those gas vehicles off the street. They'd rather have the electric than anything. But is going electric really going green? What about the money you will have to spend to fix the power grid? What about the money it will take to build more infrastructures.
What about the rare earth metals it will take to make all of these batteries and what will we do with all the batteries once their usefulness is spent? Martin Lamonica of CNET writes that, The environmental benefits of electric cars are being questioned in Germany by a surprising actor: the green movement. But those risks don't apply in the U.S., the American electric-car lobby asserts. The German branch of the environmental group World Wildlife Foundation (WWF) has conducted a study together with IZES a German institute for future energy systems, on the environmental impact of electric vehicles in Germany.
Just like the U.S., Germany has an ambitious goal of introducing electric vehicles. Germany, which today has 41 million cars, aims to have 1 million electric cars or plug-in hybrid vehicles on the road by 2020. The conclusion of the study is that these electric cars only reduce greenhouse gases marginally. The study, which was published in German in March, has not been widely circulated in English.
The WWF Germany said a summary in English is set for publication this summer. What surprised us was that the carbon dioxide savings were so small, Viviane Raddatz, vehicle expert at WWF Germany, said in a phone interview from Berlin. In a best-case scenario, the WWF assumes that the 1 million electric cars or plug-in vehicles would be running on renewable electricity and used at maximum mileage. Electric vehicles do not yet have the range of regular cars.
The carbon dioxide emission reductions from these 1 million electrical vehicles in Germany's transportation sector would be only 1 percent, according to the study, and overall national carbon dioxide emissions would only be cut by 0.1 percent. That is not a very big deal, Raddatz said, adding that, it is not going to help us out of the transportation emission mess. A worst-case scenario would be that the electric cars would run on electricity from coal instead of from renewable sources. The good new is that the government may be backing off of cap and trade.
Reuters new reports that, Senate Democrats said on Thursday they will wait until September at the earliest to take up broad climate-change legislation, a potentially fatal blow to the White House push to curb greenhouse gases. The delay means Democrats have little time to advance the complex legislation amid intense political pressure in the weeks before November congressional elections. It also could derail global climate change initiatives, as the world's major economies and greenhouse gas emitters insist the United States play a leading role.
Senate Majority Leader Harry Reid said he plans to bring up a narrower energy bill next week that would revamp offshore oil drilling rules in the wake of the BP oil spill while returning to the broader legislation sometime after senators return from their summer recess in September. Unfortunately at this time we don't have a single Republican on board, Reid told reporters. And the truth is that Harry that you do not have the vast majority of Americans on board with this radical agenda.
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