Category Archives: Economics

A thousand barrel a second oil fix

The world, most notably the developed world, has a very large habit. Canadian Peter Tertzakian thinks the days of the easy fix are over. As Steve Raabe writes in the Denver Post,

North America’s dependence on oil will force higher prices and lifestyle changes in years to come, a leading Canadian energy analyst warned a Denver audience in a recent speech.

“Ultimately we will get to the point where (oil) supply is unable to meet demand in an economically feasible way. That’s the break point – something has to give,” said Peter Tertzakian, chief energy economist for Calgary-based ARC Financial Corp.

What will give, he said, is consumer behavior that until now has been motivated by cheap and plentiful energy. Out of necessity caused by tight supplies and high prices for oil, consumers will gravitate to fuel-efficient vehicles and increasingly embrace working at home in lieu of commuting.

Tertzakian noted that fuel-efficiency gains from new automotive technologies largely have been offset by consumer preference for trucks and sport utility vehicles.

“We’re suffering from vehicle obesity,” he told an audience at the Canadian Consulate General in downtown Denver. “The fleet gets heavier and heavier.”

Gasoline-electric hybrids are just a small part of the solution because they accounted for only about 1 percent of North American auto sales last year, he said.

“If every car buyer bought a hybrid, it would still take 14 to 15 years to replace the fleet,” said Tertzakian.

His new book, “A Thousand Barrels a Second,” refers to the current world rate of oil consumption. The book has been a best seller in Canada.

Tertzakian doesn’t align himself with the “peak oil” theory – the notion that world oil production will peak in coming years, followed by a gradual decline in which prices will keep rising.

However, he acknowledged that production of light, sweet crude oil – the type most favored by oil refiners – probably already has peaked and must be replaced by more expensive and harder-to-extract sources such as Canada’s vast reserves of oil sands, and perhaps in the future, Colorado’s oil shale.

His message of tight supplies, higher prices and the need to conserve and sacrifice used to rankle traditional oil and gas interests, many of whom believed that new discoveries and technologies would maintain strong production. That attitude is changing.

“Nobody in the industry disagrees that we will need development of alternatives and conservation,” said Marc Smith, executive director of the Independent Petroleum Association of Mountain States.

“We’re not trying to deliver the message that the salad days are here forever,” Smith said. “Price and supply strictures will cause changes in consumer behavior. But it’s a question of whether it will be a hard landing or a soft landing.”


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Colorado towns get setious about energy and climate

The City of Boulder and the Town of Carbondale may be on opposite sides of Colorado’s Continental Divide, but they are on the same page when it comes to increasing the use of renewable energy and addressing climate change.
Voters in both communities approved tax and debt questions to implement their respective Community Energy Plans.

In Boulder, voters approved ( 59% to 41%) an “energy use tax” on electricity use by residential and business customers of Xcel Energy.

According to estimates, homeowners will pay an average of $33 a year, businesses $37 a year and industrial customers $2,832. The tax would raise$ 5.5 million over five years and pay for efforts to reduce greenhouse gas emissions in Boulder.

The city has voluntarily agreed to meet the requirements of the Kyoto Protocol, which would require cutting the city`s emissions by 24 percent by 2012.

In Carbondale, voters approved the issuance (by a 4 to 1) of up to $1.8 million in Clean Renewable Energy Bonds (CREBs) to construct and operate two large-scale solar systems. The proposed systems would provide about 250 kilowatts (KW) of power. One of the systems would be the largest solar system in western Colorado.

“It’s great to have interest-free money at the municipal level, so we applied,” said Joani Matranga, an architect of the project and the ballot question, which takes advantage of a provision tucked into the federal Energy Policy Act that encourages renewable energy investment by rural electric cooperatives, cities and towns.

The Internal Revenue Service pays the interest with tax credits to buyers of the bonds. Xcel Energy, prodded by requirements of Amendment 37 (passed by Colorado voters in 2004), will help pay the principle on the bonds with incentives and rebates based on energy production.

Read the full article by Marilyn Gleason . . .

Boulder to vote on Carbon Tax

DENVER — Voters in Boulder, Colo., will decide Tuesday whether the city will become the first in the nation to impose a “carbon tax” on homeowners and businesses to fund efforts to reduce emissions that cause global warming.

If approved, the ballot measure would tax electricity usage and add about $16-$20 a year to the average residential electric bill. Businesses would pay an additional $46 a year on average, and industries an extra $3,226, according to Yael Gichon of Boulder’s environmental affairs office. The tax could raise $860,000 in the first year.

Gichon and Matt Baker, director of Environment Colorado, a Denver-based environmental group, say that if the measure passes, it will mark the first time a U.S. city has voted in favor of a carbon tax to combat global warming.

The levy is called a carbon tax because most electricity in the USA is produced by burning coal and natural gas, which emit carbon dioxide that contributes to global warming.

Climate Smart, a local group that supports the tax, estimates the average monthly residential electric bill of $63 would increase $1.38, or 2.2%. A medium-size office building would rise $33, or 0.6%.

Boulder, one of the state’s most liberal communities, has a long history of environmental activism, such as preserving open space, recycling and encouraging use of public transit. The town of about 92,000 residents is home to the University of Colorado and the National Center for Atmospheric Research. “We have probably more climate scientists living in Boulder than any other city in the world,” Mayor Mark Ruzzin says.

The City Council authorized the ballot measure to fund a city plan to reduce greenhouse emissions 7% below 1990 levels. To accomplish that, Boulder would have to cut emissions 24% by 2012. About half of the city’s emissions are attributed to burning fossil fuels for electricity.

Four years ago, the city adopted emission targets set by the 1997 Kyoto Protocol, an international agreement the United States has not ratified, to reduce greenhouse gases such as carbon dioxide.

“There is a strong environmental ethic in Boulder,” Ruzzin says. “People are looking to do the right thing, and the climate action plan gets us down that road.”

No group has organized in the city to oppose the tax measure, and even the Boulder Chamber of Commerce has endorsed it. Climate Smart expects to spend about $8,000 on yard signs and “a few newspaper ads,” volunteer Ken Regelson says.

Gichon says the tax would fund efforts to increase energy efficiency, spur the use of renewable energy such as wind and solar power, and encourage residents to drive less. The tax also would fund city-sponsored energy audits for residences, and educational programs on utility-sponsored rebates for installing energy-efficient appliances, light fixtures and insulation.

Many states have mandated special charges on electric bills to fund energy-efficiency and renewable-energy programs. And some city-owned utilities, including Fort Collins, Colo., have raised rates to pay for renewable-energy programs.

Add biking to the toolbox of business networking

On mountain trails and bike paths, businesspeople are breaking a sweat and brokering deals. For some, it has replaced golf and squash as a way to network, chat up clients or get one-on-one time with the boss.

The learning curve is easy because most people began riding bikes as children. The same can’t be said of golf, which can be maddeningly difficult.
 Read the full article in the Denver Post . . .

Boise going green?

First there was the news that Boise wanted to invest more in efficient transit.  Now come the announcement that Boise Mayor Dave Bieter is scheduled to sign the U.S. Mayor’s Climate Protection Agreement today.

Bieter would be the first mayor in the state and 280th in the nation to sign the agreement designed to reverse global warming. It calls for reducing greenhouse gases like carbon dioxide that a consensus of scientists worldwide say are contributing to climate changes.

“Even if non-human factors are involved, addressing human emission sources is most within our control and thus provides the best opportunity to address the problem,” Bieter wrote in a memo to the Boise City Council first reported Tuesday at IdahoStatesman.com.

The mayor is scheduled to make his announcement at noon today at the Banner Bank Building to illustrate that energy-efficient design is not only good for the environment but also makes good business sense.

Read the full article in the Idaho Statesman . . .

Boise Chamber of Commerce backs public transit tax

Move over Salt Lake and Denver. Taking a page out of the transit success stories in other larger intermountain west cities, Boise is trying to but the anit-tax, anti-transit sentiment of the state.

In an anti-tax climate, Boise Chamber of Commerce CEO Nancy Vannorsdel is pushing to empower voters to impose a half-cent sales tax for public transit in Ada and Canyon counties.

Vannorsdel, a former banker, acknowledges the chamber usually fights taxes. “I know, it’s an oxymoron,” she said. “We may very well be a recipient of that award. But the marketplace is changing. Workforce will be the No. 1 issue in the next 10 years. Getting people to and from work, and having them live where they want to live, is pretty important. Transportation has become a big issue for business.”

Vannorsdel and her board are allied with the Coalition for Regional Public Transportation, co-chaired by Home Federal Bancorp CEO Dan Stevens, former Idaho Transportation Board Chairman Chuck Winder and Caldwell Mayor Garret Nancolas.

They want to allow Valley Regional Transit, which has no taxing authority, to ask voters in November 2008 to back a half-cent sales tax. That would raise an estimated $964 million over 20 years to buy right-of-way from Boise to Caldwell, vastly improve bus service and start light-rail.

Their draft bill says a simple majority of voters in a transit district could approve a sales tax of up to a half-penny. It also would authorize bonds approved by a two-thirds vote.

The prospects for the bill, however, look dim. Proponents are watching the ongoing developments in Utah as Gov. John Huntsman said last week he’s considering a special session for lawmakers to consider the Salt Lake Chamber’s call for allowing voters to boost the existing transit sales tax. Voter approval in November could raise $17.7 billion over 10 years and accelerate the 2030 transit plan to completion by 2015. That would more than double light-rail mileage, build 45 miles of commuter rail from north to south, and add 175 miles of bus rapid transit, much of it on dedicated lanes.

That heartens Vannorsdel. “What’s so exciting about the Salt Lake model is it’s not an East Coast proposal. It’s right next door.”

Precisely. Salt Lake is our cultural sibling. Ridership on three new light-rail lines has doubled projections, and many Idahoans know the system. If Utahns have the intestinal fortitude to invest, get out of their cars and head off commuting nightmares, why can’t we?

Read the full article in the Idaho Statesman . . .

Vail Going Green?

Less than 10 years ago the Aspen Skiing Company introduced the first wind-powered lift in the American ski industry. In April, Skico switched to 100 percent renewable energy, followed this summer by Vail Resorts and the town of Vail.

Skico and Vail Resorts are leaders in the ski industry and, perhaps more important, for businesses of all kinds. Vail’s purchase made it the second largest corporate user of renewable energy in the nation.

The outdoor recreation industry is leading this green trend in part because of Patagonia, an apparel company that in 1998 became the first in California to buy all its energy for 13 buildings (including the headquarters) from newly constructed renewable energy plants.

More and more consumers make decisions about where to spend their money based on the company’s perceived environmental conscience. More companies are coming around to the viewpoint that green is gold.

Read the full article in the Aspen Times Weekly . . .