Since the latter part of the 19th century, West Virginia has been at the forefront of American energy production.  Will this continue?

The American Recovery and Reinvestment Act (ARRA) contains billions and billions of dollars aimed at bringing about a “green revolution.”  If some of these initiatives are successful, they truly could revolutionize American and world energy production and consumption.  To help you understand the dramatic scope of the federal green investment, I have provided a partial list of initiatives below:

Department of Energy:

  • Advanced Research Projects Agency Energy (ARPA-E).  To foster research and development of transformational energy-related technologies.
  • Smart Grid Investments.  To improve electricity delivery and energy reliability.
  • Nuclear Science and Technology.  To pursue forefront nuclear science research.
  • Early Career Research.  To support energy researchers who are early in their careers.
  • Alternative Isotope Production Techniques.  To seek breakthroughs that will facilitate an increased supply of isotopes that are in short supply.
  • Integrated Biorefinery Operations.  To create biofuels and bioproducts refineries that can use a variety of feedstocks effectively.
  • Energy Efficient Information and Communication Technology.  To reduce the energy use of technology equipment.
  • Enhanced Geothermal Systems.  To improve energy extraction from geothermal sites and use of ground source heat pumps.
  • Hydroelectric Facility Modernization.  To improve hydroelectric power production.
  • Wind Turbine Drivetrains.  To design and construct a facility to test wind turbine drive trains.
  • Wind Energy Consortia.  To develop consortia between higher education institutions and the wind industry.
  • Advanced Energy Efficient Building Technology.  To support a wide range of research and development concerning energy efficient buildings.
  • Electric Drive Vehicle Battery and Component Manufacturing.  To increase production of batteries and electric drive components.
  • Truck Engines/Powertrains.  To improve truck engine energy efficiency.

Department of Labor:

  • Energy Training Partnerships.  To provide training and placement services in energy efficiency and renewable energy industries.
  • Green Capacity Building.  To build capacity of training programs to meet the needs of expanding green industries.
  • State Energy Sector Partnerships.  To develop and implement a green energy sector workforce plan.
  • State Labor Market Information Improvement Grants.  To improve data collection concerning energy efficiency and renewable energy industries.

Other:

  • Department of Transportation – TIGGER.  To reduce greenhouse gas emissions and energy consumption of public transportation systems.
  • Environmental Protection Agency.  To promote diesel emission reductions.

So where will the green revolution, if there truly is to be one, leave West Virginia?  The answer may depend on how quickly we can turn our hills and valleys green.  We’ll explore possible answers – and tie them into our Socratic analysis of mountaintop removal coal mining – over the coming weeks and months.

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It is refreshing to read that Gary Gensler, new chairman of the Commodity Futures Trading Commission (CFTC), says the CFTC needs to regulate speculative trading in oil and natural gas futures more strictly.  As a reminder, the CFTC foolishly began granting exemptions from the speculative trades limits in 1991, and speculative trading in oil futures orchestrated by some of the large investment houses led to the dramatic increase in gas prices more than a year ago … and gas prices again are on their way up.

By the way, look for a new report from the CFTC this month that REVERSES a finding that the gas price hikes were caused by supply and demand issues, not speculators.

Chairman Gensler’s telephone number is 202.418.5050, and his fax number is 202.418.5533 if you want to weigh in on this important issue.

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The oil bubble

Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock.

- Matt Taibbi

How was this bubble created?  Remember the four elements:

  • An Intangible Market.  Goldman Sachs peddled oil futures, not oil in the here and now.
  • A Broken Rule.  In 1936, the CFTC was given authority to regulate speculative trades in commodities.  In 1991 a Goldman-owned subsidiary was given an exemption from the speculative trades limit, and 14 other companies eventually obtained similar exemptions.
  • An Insider.  While Goldman’s “oracle of oil” was predicting a “super spike” in oil prices in the future …
  • A Hedge.  … Goldman was heavily invested in oil and profiting from the rapid increase in price in the here and now.
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Post Office Box 224
3288 Winfield Road
Winfield, West Virginia 25213
Phone: 304.541.0332
Fax: 866.783.0511
Email: dct@dctadvisors.com

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