Nobrainer’s Think Tank

Not that I’ve necessarily said it here, but elsewhere at least, I have said that our efforts to lower oil prices by cutting demand are potentially foolhardy. It sounds good in theory, but OPEC can pretty much offset whatever we do. If they match consumption cuts with output cuts then we shouldn’t expect the price to go to $30/bbl and stay there anytime soon. It looks like that might be happening.

The good news:

The International Energy Agency (IEA), an intergovernmental body which advises rich countries, thinks that global oil consumption will fall by 2.6m barrels a day (b/d) this year, or about 3%

The bad news:

OPEC has announced three separate rounds of production cuts since September in a bid to steady prices. In all, it has vowed to trim its output by 4.2m b/d. Analysts reckon its normally ill-disciplined members are indeed pumping some 3.3m b/d less.

If the US is any indicator, stocks of fuel have peaked and are starting to be drawn down, potentially reflecting the quantity-supplied-quantity-demanded imbalance.

EIA reported oil stocks as of May 27, 2009

That leaves [OPEC] with as much as 6m b/d of spare capacity to bring back into use should demand pick up. Saudi Arabia alone says it could pump 4.5m b/d more than it is now.

That’s good news because with that much spare capacity, people will be a little less likely to freak out.

In other oil/energy news, it took me a few minutes to figure out how the following paragraphs worked together. The interceding paragraphs, as well as all the following paragraphs, were all about oil and gas development.

The International Energy Agency on Wednesday repeated its warning that reduced investment in energy could result in future supply shortages and a new oil price spike in a few years’ time…

IEA chief economist Fatih Birol had already told Platts in a May 20 interview that lower investment as a consequence of the global economic crisis threatened future energy security as well as the effort to combat climate change.

For the life of me, I couldn’t figure out how oil and gas investment were important to combating climate change. It appears that one has to ignore that the whole rest of the article is written about oil and gas development and be careful to note that the opening paragraph only refers to general “investment in energy.” So there you go. News you can use. If you under-invest, you could end up with not enough.

Tonight I did crack and buy cracked and bought $20 worth of gas. I also bought some of my new favorite household items: compact fluorescent bulbs, or CFLs. Kroger has them marked down a lot if you have a Plus Card.

Even though it doesn’t always make strict economic sense, I do enjoy taking steps to lower my power bill. But I like these new light bulbs for reasons beyond energy savings. They are brighter per watt by a factor of four. They also last a lot longer than a typical incandescent bulb. What’s more, the most evil of giant retailers — I’m sarcastically talking about Wal-Mart of course — is making the sale of them a priority.

I particularly like the brightness per watt. Now I can get a lot more brightness out of power-limited light sockets. I have put 15W bulbs in my lamps that have a 40W max. I’m not maximizing my power savings, but it’s a trade-off I like. I also prefer to put them in my lamps since they will move with me when I leave this house. Although I did replace a 75W incandescent with 26W CFB in the bathroom here. It’s much brighter and a nice change.

Unlike the typical light bulbs, the lifetime is longer by a factor of 10 or more. The incandescent bulbs in my closet have a lifetime of 750 hours. The GE CFBs I bought are good for 8000 hours. My quick calculations show that, based on stated longevity, even if I’m swapping 15W bulbs for 40W bulbs, I’ll end up spending only half as much for lighting as I would otherwise. (Although that payback period may be way down the road). That also makes CFBs a good bulb to put in those hard-to-change light locations, especially ones that are on a lot.

What I don’t like about the bulbs is that despite being “instant on”, they may take a half-second to get fired up. However there’s no flickering or buzzing or anything. Also, the CFBs weigh more, which kinda screws up my swing-arm lamp. Some of the helical CFBs also are a bit bigger and don’t fit into all the same places that the incandescants do.

Hopefully with those nasty, big companies trying to mass-market the CFBs, however, their prices will go down even further. Personally, I don’t think Wal-Mart is trying to be completely altruistic. I think they’re trying to ease the energy crunch so that their own energy costs will go back down. But in this case it kinda works out for everyone.