Lynne Kiesling
If you can see this post ... it's because you are reading KP through an RSS feed, which we appreciate greatly! I've just transitioned the site over to WordPress, and the Knowledge Problem url is still active, but the RSS feed has changed to
http://knowledgeproblem.wordpress.com/feed/
Please update your reader, keep [...]
Michael Giberson
On the greentechmedia site: "Texas Wind Farms Paying People to Take Power":
A power producer typically gets paid for the power it generates. In Texas, some wind energy generators are paying to have someone take power off their hands.
Because of intense competition, the way wind tax credits work, the [...]
Michael Giberson
A news release recently put out by the New York ISO - the organization that manages the electric transmission grid and the integrated wholesale power market in the state - observes that electric power prices are dropping along with fuel prices. The statement noted that power prices had [...]
Michael Giberson
Gasoline prices are making the headlines across the country (these headlines found via Google News):
Lynne Kiesling
While you are at the Chicago Tribune editorial page reading the local media commentary on our [sarcasm]humble and noble public servant Governor Blagoevich[/sarcasm], take a look at the sales tax calendar:
Here's the story: our Cook [...]
Lynne Kiesling
In the comments on Will Wilkinson's post to which I just linked, Ed Lopez offers a statement of philosophy that expresses my own beliefs more clearly and eloquently than I am capable of doing:
Your post is why I consider myself a philosophical anarchist. I would love to [...]
Lynne Kiesling
Tom Friedman and Don Boudreaux are making different, but complementary, arguments against the auto bailout.
If you think that you recognize Tom Friedman's argument in his most recent NYT column, you should: he is analyzing Better Place and its business model, which I did in this [...]
Lynne Kiesling
Yesterday when I was channeling my inner Jenny Holzer on the relationship between political power and corruption, I quoted James Madison in the comments:
In framing a government which is to be administered by men over men you must first enable the government to control the governed; and in [...]
Michael Giberson
In the news, reports that Steven Chu will be nominated to become the next U.S. Secretary of Energy. Chu, a physicist who won the Nobel Prize in 1997, has been Director of Lawrence Berkeley National Laboratory since August, 2004.
Tom Fowler at Newswatch: Energy observes that [...]
Lynne Kiesling
I was in Texas on Tuesday for a meeting with an electricity retailer, and when the CEO came in and greeted me with "nice to see you again; did you hear that your governor was just arrested?", I thought it was fallout from the long-standing investigation of Illinois political [...]
Lynne Kiesling
The KP Spouse and I have evolved a new rule over the course of the succession of fall bailout fiascos: whenever Barney Frank argues for something, the economically sensible and correct public policy is to do precisely the opposite of what he advocates.
[...]Michael Giberson
What does experimental economics have to say about asset market bubbles? Virginia Postrel provides an excellent (brief, readable, substantive) overview and interpretation in the December 2008 issue of the Atlantic.
[...]Michael Giberson
"Energy czar" is a term with a pedigree in the United States, being applied at least as early as December 1973 to William E. Simon, who Nixon appointed to head the Federal Energy Administration. The Time article in the link observes that Simon was advocating a 50 mph [...]
Michael Giberson
What is with all of the czar talk?
Most prominently in the news:
"House Speaker Nancy Pelosi touted the notion of a 'car czar' Tuesday to supervise an auto industry bailout, saying Big Three executives haven't adapted well to changing conditions," reports the Associated Press.
Who wants a czar? I believe [...]
Lynne Kiesling
Last Monday Mike asked "do you know what the car company of the future should look like?"
The various politicians and bureaucrats who have been wrangling over the auto bailout requests think they do. The management of the "Big Three" have a vision that their shareholders have authorized [...]
Lynne Kiesling
One of the most fascinating cases in environmental economics and business is Walmart. Over the past five years, Walmart has turned their famous supply-chain management sights on reducing the environmental impact of the products they sell while still keeping their costs, and therefore retail prices, as low as before. [...]
Michael Giberson
At Overcoming Bias, Robin Hanson discovers he can save money by mixing premium and regular gasoline rather than buying the mid-grade product, and if you buy mid-grade gasoline for your car then you may be able to save money too.
The opportunity to save depends on the relative octane [...]
Michael Giberson
No, I'm not in New Orleans, but at the Morgan Energy blog, Cheryl Morgan is blogging about her experience at the U.S. Association for Energy Economics conference. She has been kind enough to respond to my questions, so be sure to read the comments.
As of Friday morning:
Lynne Kiesling
One of the most interesting entrepreneurial developments in the past couple of years is Project Better Place, which has one of the most well-articulated corporate visions I've ever seen. Their business model: evolve beyond using oil-based transportation fuels by constructing a network of charging stations and battery [...]
Lynne Kiesling
Hi folks: comments are not posting, for some strange reason. They are showing up as published on the MT dashboard, but do not show up on the posts. If you have commented in the last 24 hours, your comments are still here, and Mike and I appreciate the conversation. [...]
Lynne Kiesling
There are still so many dimensions on which to oppose a taxpayer-funded bailout of the U.S. auto industry, the mind boggles ... let's start here: this Wall Street Journal article summarizes the current proposal from the "Big Three" U.S. auto manufacturers. This article provides a very useful set [...]
Michael Giberson
Geoff Styles, on OPEC and oil prices, "That $75 per barrel figure from OPEC is interesting for many reasons." Styles explains.
[...]Michael Giberson
From the Steven Mufson article in the Washington Post, The Car of the Future -- but at What Cost?:
Many members of Congress believe they know what the car company of the future should look like.
"A business model based on gas -- a gas-guzzling past -- is unacceptable," [...]
Michael Giberson
The Houston Chronicle has long been one of the best newspapers for energy news, perhaps why it is frequently cited here at KP.* (You can subscribe to an RSS feed focused on Chronicle energy stories.) Over the last few days:
Michael Giberson
Reuters reports from Moscow:
MOSCOW -- The world's top gas exporting nations will set up a formal organization at a December summit in Moscow, a Russian official said on Wednesday, but denied the new body will seek to copy OPEC's production quotas.
"No one is planning to regulate gas production [...]
Michael Giberson
Thanksgiving Day should be remembered not just as a day when we give thanks for our abundance, but more deeply and historically why we have this abundance. In our Thanksgiving Day celebrations, let us therefore tell one another the true origins of the thanksgiving and the great economic lesson [...]
Michael Giberson
Rebecca Smith reports in the WSJ:
An unexpected drop in U.S. electricity consumption has utility companies worried that the trend isn't a byproduct of the economic downturn, and could reflect a permanent shift in consumption that will require sweeping change in their industry....
The data are early and incomplete, [...]
Michael Giberson
Only after posting my earlier examination of the interaction of wind power, the production tax credit (PTC), and negative power prices in ERCOT did I discover a related analysis, "Curtailment, Negative Prices Symptomatic of Inadequate Transmission," by Michael Goggin, an American Wind Energy Association analyst, that appeared [...]
Michael Giberson
Platts reports an airline financial analyst as telling an industry group that hedging fuel costs is a waste of time.
The world's airlines should stay away from trading oil derivatives and hedging in general because the exercise had proven to be "a waste of time," the head of Asia [...]
Michael Giberson
If the energy-trading world were an iceberg, public markets like the New York Mercantile Exchange would be the exposed tip. The over-the-counter market would be the vast, hidden bulk.
So begins a good overview of energy trading from the WSJ, "Talking about trades," which actually reflects a passing understanding [...]
Michael Giberson
It is the sort of thing that makes me wish I lived nearer New Orleans and simultaneously wonder whether I'd ever get any work done if I did. From the WWOZ website:
WWOZ broadcasts the second annual Tuba Tuba Tuba music festival featuring a 30-sousaphone second-line, live band performances, [...]
Michael Giberson
What is with all of the negative power prices in the West region of ERCOT?
In the first half of 2008, prices were below zero nearly 20 percent of the time. During March, when negative prices were most frequent, prices were below zero about 33 [...]
Michael Giberson
Chris Davis at Discovery News: Powrtalk:
Automakers must be allowed to fail if they are to succeed. To date they've been supported just enough to muddle somewhere above the line of failure. But failure at least allows concrete recognition that the current model does not work. Creating the possibility [...]
Lynne Kiesling
Reason's Shika Dalmia has been making some libertarian-friendly Cabinet recommendations, and in her discussion of possible candidates for Secretary of Energy, she reminds us of a great idea floated jointly by Ed Crate of the Cato Institute and Carl Pope of the Sierra Club a few [...]
Lynne Kiesling
All of this Eric Holder gossip today unfortunately creates an opportunity for me to pick a grammatical nit: the plural of "attorney general" is "attorneys general", not "attorney generals". The "general" in "attorney general" is an adjective that modifies the noun "attorney". The plural attaches to the noun, not [...]
Michael Giberson
New York is about to find out whether zone pricing in gasoline markets is as bad for consumers as some people believe. Zone pricing is "a gasoline industry practice of selling the same brands and grades of fuel to retail sellers at different prices depending on the 'price zone' [...]
Lynne Kiesling
In yesterday's meeting in Chicago between President-elect Obama and Senator McCain, Mr. Obama said that they were going to discuss how to "work together to fix up the country". This language really rankles me. It also rankles Russ Roberts, whose comments on this remark reflect my dislike of [...]
Lynne Kiesling
Even those unaffected by this economic downturn are changing their consumption behavior, a pattern seen in prior economic downturns. This New York Times article by Alex Williams gives some details on the forms that these adjustments are taking among the wealthy:
"The era of conspicuous consumption, at least for [...]
Lynne Kiesling
Not being a macroeconomist I have little insight to contribute, but I do find October's 2.8% decline in the producer price index quite remarkable. Not only is this the largest decline on record, it is also larger than had been forecast for October.
And, as the Bloomberg article linked [...]
Michael Giberson
An excellent look at ExxonMobil in the Sunday New York Times. The article makes a strong case for the view that ExxonMobil is one of the best run large international corporations in the world.
The article observes that the company has reacted to recent record profits by, among other [...]
Lynne Kiesling
For the past 30 years the U.S. auto industry has been like your alcoholic Uncle Bob: his self-destructive habits seem beneficial to him, despite the harm they cause him and the pain they inflict on his family and friends. You want to help him, but don't know the best [...]
Chris Masse at Midas Oracle links to "How Companies Are Using IT To Spot Innovative Ideas," an article at Information Week. Among the examples cited:
...Starbucks uses the same voting platform, at MyStarbucksIdea.com, and took an online suggestion posted Oct. 7 by BillMac to offer a free cup of [...]
Lynne Kiesling
Opinions and analyses on recycling abound, from "it reduces our resource use and conserves landfill capacity" to "processing recycling uses more energy than not, and is therefore wasteful and inefficient". Of course there's some truth in these opposing views, and a case-by-case analysis is usually necessary to determine, on [...]
Michael Giberson
From the Star-Tribune in Minnesota, "Xcel looks to harness wind energy for use even when there's no wind ":
Next spring Xcel Energy Inc., the state of Minnesota and a Virginia-based technology firm will test the first battery in the country capable of storing wind energy.
Well, that's a bit [...]
Lynne Kiesling
Chris Carey's work at Bailout Sleuth is supremely important for holding the federal government accountable for its decisions and actions with respect to their financial bailout plans. He's carrying our water.
Especially after yesterday's change of federal strategy, much commented on elsewhere. I think Katharine Mangu-Ward sums it up [...]
Lynne Kiesling
[Yes, I am truly in real-world issue avoidance mode ...]
I love the occasional Wired articles on technology history, and this one is near and dear to my heart ... on 11 November 1856, Henry Bessemer received a U.S. patent for his steel production technology. The article also gives [...]
Lynne Kiesling
Due in part to my trying to process everything that's going on in the economy right now, and in part to my being in denial about some of it, my morning attention is drawn to this item: listening to your favorite music is good for your heart. In [...]
Michael Giberson
Jeffrey Ball at the WSJ's Environmental Capital blog describes Xcel Energy's first steps in bringing Vehicle-to-grid power into its SmartGridCity effort in Boulder, Colorado:
So far, it's pretty small potatoes, involving exactly one car and one plug. But boosters say it has the potential to revolutionize - and revitalize [...]
Lynne Kiesling
Two excellent economists offer advice well worth considering to Senator Obama.
Tyler Cowen's New York Times column stresses the importance of restoring confidence initially. Tyler makes a persuasive argument, although he does not offer any specific suggestions on how to do so; my fear is that the primary tactic [...]
Lynne Kiesling
Several commentaries over the past few days have discussed the intersection of an Obama administration and entrepreneurship. One that does so directly is Bret Swanson's opinion piece in Friday's Wall Street Journal, which casts President-elect Obama as an entrepreneur himself. Importantly, and correctly in my opinion, Swanson highlights [...]
Lynne Kiesling
The folks at reason do us a service, albeit a sobering and disturbing one, by tallying up all of the bailout promises as of Friday. The total to date:
Rough total: $2,063,800,000,000
That's a little over $6,800 for every man, woman, and child, or just under $15,000 for each of [...]
Michael Giberson
The post title is drawn from the conclusion of Roland Horne's essay, "The future of petroleum -- and of petroleum education." The essay runs through a peak oil explanation - citing advocates and critics of the concept - and offers a sort of mild endorsement of peak oil [...]
Michael Giberson
Recently Southwestern Public Service (SPS), a local utility affiliated with Xcel Energy, issued two RFPs seeking wind power and dispatchable power resources.
Among the language in both RFPs, an assertion that in evaluating the proposals "SPS seeks to diversify and minimize the development risk in its selected [...]
Michael Giberson
"Both voting and not voting are motivated by the thought that you are better than other people." --- Tyler Cowen
Or maybe you'd prefer to have Gordon Tullock's views on voting: Here is a link to a short video called "Voting Schmoting". [HT to Frederic Sautet.]
Michael Giberson
Texas, 33Lynne Kiesling
Head down, pencil moving as I work on a paper draft and a large mountain of grading ... but I have a Halloween playlist to keep me company:
Michael Giberson
Ray Fisman writes in Slate about recent research showing stock price movements before CIA-sponsored political coups that suggest insiders in the intelligence community were trading on classified information:
A recent study by economists Arindrajit Dube, Ethan Kaplan, and Suresh Naidu argues that those in on the planning process [...]
Michael Giberson
On October 16, FERC directed operators of regional transmission systems with integrated wholesale power markets (i.e. RTOs and ISOs) to take additional steps to accommodate participation of demand response resources, and to ensure energy pricing rules appropriately reflect shortage conditions. The new regulations also require the organizations to take [...]
Michael Giberson
The headline of this Q & A exchange in the Orlando Sentinel gets it right: "It's only price gouging if you do it occasionally."
Under Florida's price gouging law, "it is unlawful to sell essential commodities, which include food, ice, lumber and gasoline, for an amount that 'grossly [...]
Lynne Kiesling
Seriously, I laughed on Friday when I read the headlines and articles about how OPEC cut its production targets, and yet world oil prices fell.
Why did I laugh? Largely because it's a combination of factors that illustrates that market outcomes are consequences of the interplay of supply and [...]
Lynne Kiesling
I did not link to or comment on Jacob Weisberg's "The End of Libertarianism" Slate column last week, both because I thought it unprofessionally, factually incorrect, and because I have a strong rule about avoiding troll-feeding.
But sometimes even druck and mire bring valuable results. A few folks have [...]
Michael Giberson
A post by Andrew Demaria at Environmental Lovins descibes one vision for how electric cars could link up to the smart grid:
As I go about my evening's business, preparing some food before heading out to meet friends at the bar, I am oblivious to what is happening in the [...]
Lynne Kiesling
Tuesday was the 129th anniversary of Edison's invention of the incandescent light bulb, and Wired commemorated it with this very nice article. It tells the narrative well, from Humphrey Davy to arc lighting, with Edison using his telegraph profits to fund his research, to spending 14 months developing [...]
Michael Giberson
Typical offshore wind power projects -- actually there are not enough projects in existance to talk about "typical projects", so let's say "typical offshore wind power proposals -- envision embedding the turbines into the ocean floor. Not a problem off the U.S Atlantic Coast or in the Gulf, where [...]
Lynne Kiesling
Informing individuals about the resource use and environmental consequences of their energy consumption can be surprisingly difficult. Do you ever read the little flyers that your utility or your energy retailer puts in your bill? Nope, I don't either. But in general we're pretty clueless about our energy consumption, [...]
Lynne Kiesling
David Zetland, call your office! Here are a couple of thought-provoking water articles I've recently read:
1. Peter Gleick on water policy in Wired: 8 proposals, and not a single one says a single thing about improving price signals to discipline water use! How can he claim to [...]
Lynne Kiesling
Which is greener using a life-cycle analysis: walking to my nearby standard supermarket and buying standardly-commercial produce and meat, or driving the 5.4 miles (10.8 miles round trip) to Green Grocer and buying organic, locally-sourced produce and meat?
I suspect it's the former.
BUT (a) such a calculation ignores any [...]
Lynne Kiesling
University of Illinois law professor Larry Ribstein calls the financial bailout "Hayek's revenge":
Markets are bigger and more complex than any one set of regulators can comprehend, even Henry Paulson, ...
Thanks to Café Hayek for the link.
[...]Lynne Kiesling
This EcoGeek post addresses a pet topic of mine: if we are going to invest in renewable electricity generation technologies, we should start by coupling the energy-related benefits with other benefits, particularly at this point when renewables are not yet price-competitive.
Solar parking lot canopies are a great example [...]
Lynne Kiesling
Iceland's financial and banking industries are really in turmoil right now. Yesterday I heard good NPR story on what's going on in Iceland that can give you a sense of what's going on (although I agree with the commenter that Melissa Block characterizing Iceland as "a pretty backward [...]
Lynne Kiesling
I am unlikely to say anything more here about our current financial situation, its causes, and the policy responses to it. I'll give the likely-final word to Nick Gillespie at Reason:
"For 30 years," begins a New York Times story titled "Both Sides of the Aisle See More Regulation," [...]
Lynne Kiesling
This is the closest I'm gonna get to discussing politics at KP ... Glassbooth is a pretty cool web application through which you take a budget of points, allocate them among a set of policy issues to rank which issues are most important to you, and then state [...]
Lynne Kiesling
OK, this is seriously cool: Freehands gloves have thumb and index finger caps that flip back and are held in place with a magnet while you twiddle your device of choice. They come in fleece, stretch microfiber, and leather for your texting, listening, photographing, and emailing pleasure! And, [...]
Michael Giberson
Just a few months ago, oil prices were scrambling upwards and the sky was no limit. From the New York Times in May:
Arjun N. Murti ... foresees a "super spike" -- a price surge that will soon drive crude oil to $200 a barrel.
An analyst at Goldman [...]
Lynne Kiesling
With all of the blather about how an economic downturn will reduce the demand for oil, and with oil prices hovering around $80 right now, this WSJ Environmental Capital post is a welcome reminder that market processes are about the intersection of supply and demand. An economic downturn [...]
Michael Giberson
The U.S. Conference of Mayors trumpets a study predicting a boom in green jobs. (A green job, for this study, is a job "devoted to the reduction of fossil fuels, the increase of energy efficiency, and the curtailment of greenhouse gas emissions.")
According to a groundbreaking study establishing a [...]
Michael Giberson
The recent "first rough draft of history" will need some editing to smooth out the narrative.
Pity the poor newspaper reporters and headline writers who daily examine stock market movements and then try to write an account of what it all means.
Last Tuesday, the Wall Street Journal featured on [...]
Lynne Kiesling
In Monday's Washington Post, Sebastian Mallaby argues that blaming deregulation for this financial crisis is both false and dangerous:
So the first cause of the crisis lies with the Fed, not with deregulation. If too much money was lent and borrowed, it was because Chinese savings made capital cheap [...]
Lynne Kiesling
When Steve Horwitz says that we have to control the narrative in the wake of the bailout plan's approval, here's one example: following up on a link to a 2004 UCLA press release, I found this paper:
"New Deal Policies and the Persistence of the Great Depression: A [...]
Lynne Kiesling
Global economic weakness and the end of hurricane season mean that gasoline inventories are rising and prices are falling.
[...]Lynne Kiesling
In light of Tyler's observation yesterday that things are going badly if the Fed guarantees commercial paper, I offer without comment this news item:
The Federal Reserve announced Tuesday a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit [...]
Lynne Kiesling
Welcome to Hit & Run, Instapundit, and Volokh Conspiracy readers, and thanks to those respective parties for their links.
Pro Libertate's comment from Katharine Mangu-Ward's post yesterday that linked here wins my prize for the most erudite comment I have seen on our current political [...]
Michael Giberson
Great news! I was reading through some bailout, uh, rescue commentary this morning, and found this political advice from Joel Stein at the L.A. Times:
If I were in Congress, I'd hold out. Every representative who voted no on the bailout got something totally sweet in the bill that [...]
Lynne Kiesling
Fast recapitalization, removing the signaling penalty by having the government require banks to stop giving dividends in the short run ... those are the kind of policies that economists have been discussing, fleshing out, and encouraging over the past two weeks. Of course, the challenge to those proposals is [...]
Lynne Kiesling
Before I read the Senate version of the revised bailout plan, I generally agreed with Tyler Cowen: "The modified Paulson plan was better than nothing -- especially after the market had been scared -- but far from my first choice." I also generally agree with his conclusions [...]
Michael Giberson
Writing with a calmness and patience not typically seen when economists write about price gouging, here is Geoff Styles, at Energy Outlook, Gas Lines and Bank Runs:
...[W]ith a significant shortfall in deliveries along these pipelines, and US gasoline inventories that were already extremely low going into the [...]
Michael Giberson
The results from the first RGGI auction have been announced, coming in louder than a whimper, but softer than a bang. As the WSJ Environmental Capital blog reports, "Demand was actually pretty strong." About 50 million units were bid upon, while just 12.5 million were offered. The [...]
Michael Giberson
"We used to curse the wind," Max Watt said. "Now we love it."
The aptly named Max Watt is a Nolan County, Texas landowner benefiting from the wind energy boom. The quote is from a Reuters story describing how the boom in wind farm construction in west Texas [...]
Michael Giberson
Yes, Texas has a price gouging law, and yes the Attorney General recently has issued a press release warning against price gouging - actually multiple press releases (Sept 16, Sept 19, Sept 24; a second press release of Sept 16 noted that state hotel tax [...]
Lynne Kiesling
Cory Doctorow at Boing Boing alerts us to a new book on copyright by Neil Netanel, Copyright's Paradox. I haven't read it yet, but I trust Cory's recommendations, and pass them on to you without further comment as I put it on my "to read" list. Note [...]
Lynne Kiesling
I've been enjoying this new research from environmental economist Chris Costello and his two co-authors, Steven Gaines and John Lynham: "Can Catch Shares Prevent Fisheries Collapse?":
Recent reports suggest that most of the world's commercial fisheries could collapse within decades. Although poor fisheries governance is often implicated, evaluation of [...]
Lynne Kiesling
Today and tomorrow I'm at a antitrust law and policy conference at Northwestern, co-sponsored by the Searle Center on Law, Regulation, and Economic Growth and the Center for the Study of Industrial Organization. As you can see from the agenda, it's full of interesting papers from [...]
Michael Giberson
The Regional Greenhouse Gas Initiative held their first CO2 permit auction today. At the WSJ Environmental Capital blog, Keith Johnson said RGGI "is more likely to start with a whimper than a bang," and asks "Will it work?"
Johnson reports:
RGGI's first auction today, of about 12.5 million emissions permits, [...]
Michael Giberson
Robert Rapier at R-Squared Energy Blog noticed the EIA showing gasoline inventories at their lowest levels since 1967, and because consumption rates are higher now than in 1967, he pointed out that "days of supply" in inventory is probably at its lowest level ever. Rapier comments:
Someone asked during [...]
Lynne Kiesling
Last week at Freakonomics, Doug Diamond and Anil Kashyap had a great guest post to help put it in perspective, and I recommend it to all.
Yesterday Steve posted a link to a critique of Paulson's bailout plan by Luis Zingales. A must read. His conclusion:
Do we want [...]
Lynne Kiesling
One of the consequences of the current financial market upheaval is MidAmerican's buyout of Constellation Energy. See also the discussion at WSJ's Environmental Capital of this and other possible consequences for energy industries.
Keith Johnson at WSJ also thinks that this move shows an interest on Warren [...]
Lynne Kiesling
Without whom, there would be no induction-based generation of electricity, the modern electronic world as we know it would not exist, and I would have to write about something else. Three cheers to the genius of Faraday! And thanks to Wired for noting his birthday.
[...]Michael Giberson
On the last day of trading for NYMEX's October contract for crude oil prices jumped a record $16.37/barrel to close at $120.92/barrel. To some observers, the sharp movement on the last day of trading suggests a classic manipulative squeeze. From Bloomberg:
"This looks like a squeeze play,'' said Phil [...]
