TIME energy

Memorial Day Weekend Gas Prices at Lowest Point Since 2009

The average retail gas price on May 18 was nearly a dollar lower than on the same day last year

Consumer gas prices are at a lower point heading into this Memorial Day weekend than any comparable weekend since 2009, according to a government report.

The average retail gas price was $2.74 per gallon on May 18, nearly a dollar lower than on the same day last year, the U.S. Energy Information Agency (EIA) reported. Gas prices vary across the country, from highs of above $3.4o throughout California and in parts of Alaska to below $2.50 throughout much of the South and Midwest.

Read More: The Cost of Cheap Gas

Cheap consumer gas has been driven by low crude oil prices, though have prices have risen in the last few months. The EIA predicted that gas prices will fall in June as refineries across the country increase production. Retail gasoline prices is expected to average $2.51 per gallon during the third quarter of 2015.

Memorial Day, when many Americans take road trips, marks the approximate start of the summer driving season when gas prices often increase. The increase is at least in part due to oil companies complying with requirements that they produce a more expensive summer-grade gasoline.

 

TIME Innovation

This Simple Procedure Can Give Amputees Bionic Limbs

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

These are today's best ideas

1. With a simple procedure, amputees can have brain-controlled bionic limbs.

By Eric Sofge in Popular Science

2. Is Starbucks helping to rebuild America’s middle class?

By Amanda Ripley in the Atlantic

3. Now a satellite can tell you when a bridge is about to fail.

By the European Space Agency

4. We can get cheaper wind power from bladeless, vibrating turbines.

By Liz Stinson in Wired

5. Can learning machines predict the next pandemic?

By David Schultz in Science

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME energy

This Chinese Businessman Just Lost $14 Billion in Half an Hour

Ouch

You might think you’re having a bad day, but Li Hejun will tell you it could be a heckuva lot worse.

The chairman of Hong Kong-listed Hanergy Thin Film Power, a maker of equipment for the solar power industry, just saw $14 billion wiped off the value of his controlling stake in the company in a so-far unexplained end-of-day crash.

Li had become one of China’s richest men on paper after shares in his company nearly tripled in the first four months of the year, giving it a market capitalization of $40 billion at one stage. For comparison, the U.S.’s largest solar company, First Solar Inc. [fortune-stock symbol=”FSLR”], is worth $5.6 billion. But the company’s shares fell over 42% in the last half-hour of trading in Hong Kong Wednesday, before being suspended by the local market regulator.

The boom in Hanergy’s shares has raised eyebrows. Transparency about the company’s business practices is limited by the fact that most of its sales go to a single company–its parent, the privately-held Hanergy Group. That has fostered suspicions–denied by the company–that it may be overstating its financial strength.

The collapse appeared to be triggered by Li’s failure to attend the company’s annual shareholder meeting. In one of the more memorable corporate quotes of recent times, The Financial Times reported a company spokesman as saying that Li “had something to do” instead.

Sentiment towards China’s solar companies had been battered on Tuesday after one of Hanergy’s biggest rivals, New York-listed Yingli Green Energy Holding [fortune-stock symbol=”YGE”] said in its annual report that there was “substantial doubt” as to its ability to continue as a going concern, driving its shares down 37%. The company put out a statement Wednesday saying that the media had blown its comments out of proportion.

TIME energy

This Innovation Will Help U.S. Companies Win the Oil Price War

oil-drilling
Getty Images

Efficiency is the key

Although some U.S. oil companies are struggling with low oil prices, a new wave of innovation is hitting the oil patch, allowing for a significant reduction in drilling costs.

A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production. And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once. GE Oil & Gas has produced variable-use pumps that can be turned on and off in order to save energy versus the previous 24-hour a day operation cycle.

The end result of these actions is that per-barrel costs of oil have fallen to around $60 today versus $75 a year ago according to Citi analysts. And executives from oil companies are now forecasting that per barrel prices could fall to $50 or less before long. America has not yet lost the price war.

Now, one small Denver-based oil company has come up with a whole new model for producing in order to further drive down costs. Described as an “oil factory,” Liberty Resources LLC and its CEO Chris Wright have developed a novel method for extracting oil. The firm is starting out by doing everything it can to eliminate the need for trucks traveling to and from its site. The company notes that trucks are often an irritant with local residents and more importantly, they add significantly to the cost of producing oil.

To do that Liberty will build a series of pipelines to its massive 10,000 acre Bakken site. The firm has pipelines that carry water and gas produced by wells, as well as other pipelines to carry oil. This technique is called ‘centralized resources’ and while other firms like Continental have explored it to some extent, Liberty is pioneering the process. In essence, the firm is trying to bring the efficiency focus of industrial engineering to the production focus of petroleum engineering.

In addition, like Statoil and a few other larger oil firms, Liberty is also focused on creating a production process than can be stopped and started based on optimal production times, costs, and oil prices. This could be an invaluable capability. Take Russia for example. Russian oil wells will freeze if they are shut down, and the country lacks significant storage capacity. As a result, Russian oil producers cannot respond to price downturns.

Moreover, Liberty is developing the entire 10,000-acre site to be fracked at once with nearly a 100 oil wells operating simultaneously. By drilling multiple wells at once and controlling inputs and output supply, the firm has significant cost advantages versus traditional ad hoc production methods. Even employee costs are lower, with Liberty citing the use of a third less workers than a conventional production process.

So what is the combined result of all these efficiency improvements? Liberty says it will still make money even with oil at $50 a barrel. And the firm expects costs to keep falling as oil service companies become more efficient and lower their own prices. At these prices and efficiency levels, US production becomes competitive with virtually any other oil source. And if efficiency gains continue at this pace, the U.S. may weather the onslaught of Saudi oil much better than many expected.

This article originally appeared on Oilprice.com.

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TIME energy

How The Transportation Sector Is Moving Away from Petroleum

More than 8% of fuel used by the transportation sector came from non-petroleum sources in 2014

Transportation Fuel Sources
Courtesy of U.S. Energy Information Administration

The transportation sector is moving away from oil slowly but surely. Driven by growth in the use of biofuels and natural gas, non-petroleum energy now makes up the highest percentage of total fuel consumption for transport since 1954, according to a new report from the U.S. Energy Information Administration (EIA).

In total, 8.5% of fuel used by the transportation sector came from non-petroleum sources in 2014. Biomass from corn-based ethanol—still supported by generous government subsidies—represented the largest non-petroleum energy source and was used primarily to fuel cars and other light vehicles. Use of natural gas to operate pipelines followed close behind. The report also shows smaller but still significant increases in the use of electricity, biodiesel and natural gas in vehicles.

Climate change and fluctuating oil prices has made moving away from petroleum when possible a priority for governments and corporations alike. But it’s still uncertain which fuel will be the best and greenest replacement, according to Christopher R. Knittel, an MIT professor of energy economics . Ethanol, natural gas, hydrogen and electricity are all possibilities.

“We don’t know where we’ll be 50 years from now,” said Knittel. “There are four potential replacement for petroleum, and, ultimately, we don’t what’s going to win out.”

While the overall trend away from petroleum is encouraging—petroleum accounts for over a third of global greenhouse gases—the newfound reliance on biomass might be seen as a double-edged sword. Using ethanol, which is currently mixed with petroleum and represents around 10% of the gas sold for most cars in the U.S., provides only “marginal benefit” over petroleum in terms of greenhouse gas emissions, according to Knittel. Using electricity in the transport is generally better and cleaner, but the technology is still in its early stages. Where it does exist, as in Tesla cars, it’s often expensive and impractical for large-scale use.

TIME China

China Has Become the World’s Biggest Crude Oil Importer for the First Time

Holiday travel rush congests roads in Chinese cities
Feng lei—Imaginechina/AP Masses of vehicles move slowly during a traffic jam near the entrance to Lianhuo (Lianyungang-Khorgos) Expressway during the Labor Day holiday in Zhengzhou city, central China's Henan province, 1 May 2015.

The news reflects both China's soaring energy consumption and America's shale revolution

China is now the largest importer of crude oil in the world. In April, it surpassed the U.S., which has traditionally held the slot, with imports of 7.4 million barrels per day (bpd) or 200,000 more than the U.S., according to the Financial Times.

The news comes as a surprise because the Chinese economy has been slowing and just this weekend, in an effort to stimulate growth, the People’s Bank of China cut interest rates for the third time in 6 months.

Over the next few months, the U.S. and China may be in and out of the top spot, but because American imports dropped by about 3 million bpd in the last decade (thanks in large part to shale extractions) and because China’s purchases have boosted seven-fold, the Chinese should be the top crude oil importer on a long term basis.

China overtook the United States as the world’s top energy consumer in 2010 and is already the number one purchaser of many commodities, such as coal, iron ore and most metals.

TIME energy

Germany’s Nuclear Cutback Is Darkening European Skies

nuclear-power-plants-sunset
Getty Images

If Germany wants to phase out nuclear power, coal is the only realistic option

Germany’s influence in Europe is unquestionable, but it appears that some of its neighbors may be adversely affected by recent German decisions; and Greece is not the neighbor in question here. France has been reporting heavy levels of air pollution which authorities in the country are blaming on diesel cars there. But the real culprit may in fact be the renewed German penchant for coal power.

Up until a few years ago, Germany, along with France, was at the forefront of nuclear power use. But after the Fukushima disaster in Japan in 2011, the Germans were quick to begin phasing out nuclear power. In some countries, phasing out nuclear power would be easy, but in 2011, Germany obtained 25% of its power from nuclear sources. This nuclear power generated no carbon dioxide emissions of course, and little in the way of other forms of pollution. But after starting the phase out of nuclear power, Germany still needed to find a source of replacement power.

Renewables like wind and solar sound great in theory, but the sporadic nature of power generation from those sources makes them imperfect substitutes for the consistency of nuclear. In that sense then, battery solutions like that announced by Tesla last week, or the solutions from General Electric, may eventually provide a solution for Germany. But as of now, the grid battery industry is still too nascent to provide serious help to Germany.

Germany aims to generate 80% of its power from renewable sources by 2050 with nuclear being fully phased out by 2021. But given the costs associated with renewables and the challenge of replacing nuclear power efficiently, it is not clear that Germany will succeed in either of these goals.

With renewable energy sources facing generation consistency challenges, that has left the Germans with only a few alternatives for replacing nuclear power: oil, natural gas, and coal. Oil has been so expensive for so long that it never received serious consideration for new power plants. Natural gas on the other hand is cheaper per unit of power generated and it releases about half the level of carbon dioxide that coal does. These characteristics have helped to make natural gas the power plant feedstock of choice in the U.S. especially given the falling per MCF over the last decade.

In Europe though, in part because of concerns about fracking, much of the natural gas comes from Russia. And relying on Russian natural gas as a primary power feedstock can be a dangerous proposition especially given the geopolitical concerns about Russian involvement in Ukraine. Thus, the Germans have increasingly turned to coal as their power generation source of choice, especially U.S. coal. Today coal power plants are responsible for generating nearly half of Germany’s power, and numerous new plants are scheduled to come online in the next few years.

Overall, the increase in coal is likely to create a significant increase in airborne pollution and potentially stoke tension between Germany and its neighbors. But at the same time, if Germany wants to phase out nuclear power, coal is the only realistic option; a fact which some German politicians are starting to admit.

German increased reliance on coal could throw a lifeline to U.S. coal companies and manufacturers like Joy Global (JOY) and Caterpillar (CAT) that rely on coal miners as significant customers. While Germany is the eighth largest coal producer in the world, even with this production it still imports significant amounts of coal from the U.S. If the country continues its plan to phase out nuclear power, it is hard to see how it can avoid increasing its coal use dramatically which, in turn, should help to offset the decreasing coal use from the United States.

This article originally appeared on Oilprice.com.

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TIME energy

Fracking Chemicals Detected in Pennsylvania Drinking Water, Study Says

Marcellus Goliath Transforms Towns to Gas Trade
Ty Wright—Bloomberg/Getty Images Threaded drilling pipes are stacked at a hydraulic fracturing site owned by EQT Corp. located atop the Marcellus shale rock formation in Washington Township, Penn., U.S., on Oct. 31, 2013.

Researchers raise questions about the integrity of drilling wells in the Marcellus Shale

Environmental scientists have detected chemical compounds used for hydraulic fracturing, or fracking, in the drinking water of three Pennsylvania households, according to a new study.

Researchers at Pennsylvania State University said samples of drinking water contained trace amounts of 2-Butoxyethanol, a compound used in drilling fluid as well as household paint and cosmetics, the New York Times reports. The contaminant was found in such microscopic concentrations that it posed no immediate health risk.

Researchers say the discovery raises questions about the integrity of drilling wells in the Marcellus Shale, a vast subterranean natural gas field in North America, and industry claims that wells sunk thousands of feet below aquifers did not require the same steel and concrete encasements as wells closer to the surface.

[NYT]

TIME energy

Tesla Charges into Home Battery Market Despite Challenges

Tesla battery
m.msherman—AP Tesla battery

The firm hopes the world can disconnect from power plants and plug into millions of large, solar panel-connected batteries

(FOSTER CITY, Calif.) — Never lacking daring ideas, billionaire entrepreneur Elon Musk is determined to jolt the electricity market.

The CEO of electric car maker Tesla Motors hopes to park hundreds of millions of large, solar panel-connected batteries in homes and businesses so the world can disconnect from power plants — and he can profit. On Thursday night, before an adoring crowd and a party-like atmosphere, Musk unveiled how he intends to do it.

Musk took the stage at Tesla’s design studio near Los Angeles International Airport, an audience of drink-toting enthusiasts cheering him on, in a scene fitting for an audacious dreamer renowned for pursuing far-out projects. Colonizing Mars is one of Musk’s goals at Space X, a rocket maker that he also runs.

Now, he is setting out on another ambitious mission. “Our goal here is to fundamentally change the way the world uses energy,” Musk told reporters gathered in Hawthorne, California.

Although Tesla will make the battery called “Powerwall,” it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Musk’s cousins, Lyndon and Peter Rive. Musk is SolarCity’s chairman and largest shareholder.

As with Tesla’s electric cars, which start around $70,000, the battery might be too expensive for most consumers. The system will carry a suggested price of $3,000 to $3,500, depending on the desired capacity. Installation will be extra. That could discourage widespread adoption, especially for a product that may only have limited use.

“I don’t believe this product in its first incarnation will be interesting to the average person,” conceded Peter Rive, SolarCity’s chief technology officer. Rive, though, still expects there to be enough demand to substantially increase the number of batteries in homes.

Musk is so encouraged by the initial demand that he believes Tesla and other future entrants in the market will be able to sell 2 billion battery packs around the world — roughly the same number of vehicles already on roads. Although that may sound like a “super crazy” goal, Musk insisted it “is within the power of humanity to do.”

It will take a long time to get there. Tesla hopes to begin shipping a limited number of Powerwall batteries this summer in the U.S. before expanding internationally next year.

The long-term goal is to reduce the world’s reliance on energy generated from fossil fuels while creating regional networks of home batteries that could be controlled as if they were a power plant. That would give utilities another way to ensure that they can provide power at times of peak demand.

For now, the battery primarily serves as an expensive backup system during blackouts for customers like David Cunningham, an aerospace engineer from Foster City, California. He installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance.

Although Cunningham’s home has not endured a blackout in the six months that he has had the battery, it’s capable of running critical home appliances like lights and refrigeration and can be recharged by solar panels during the day.

“As long as a person has solar panels, it’s just a natural fit for the two to go together,” Cunningham, 77, said. “I consider it to be a whole power system right here in my home.”

Cunningham took advantage of state incentives that sharply reduced the battery’s $18,300 sticker price under the pilot program. He still paid $7,500.

“The value proposition now is around reliability and backup power more than it is around savings, but over time that may change,” said Shayle Kahn, an analyst at GTM Research.

The batteries are likely to become more useful if, as expected, more utilities and regulators allow power prices to change throughout the day based on market conditions. That way, the software that controls the solar and battery system will allow customers to use their home-generated power — and not expensive grid power — when grid prices spike.

Many commercial customers already buy power this way, and Tesla also announced battery systems designed for them, along with bigger battery packs that utilities can use to manage their grids. Analysts say these utility and commercial markets will probably be more promising for Tesla during the next few years than residential customers.

Several businesses, including Amazon.com and Target, plan to use Tesla’s battery storage system on a limited basis. Southern California Edison is already using Tesla batteries to store energy.

Tesla is building a giant factory in Nevada that will begin churning out batteries in 2017, so Musk needs to begin drumming up customers now. The spotlight may help Musk push policy makers and utilities to consider reshaping regulations so solar and battery storage could be more easily incorporated into the larger electric system, Kahn said.

Tesla’s ambitions already have intrigued homeowners like Mike Thielen, who installed one of the prototype batteries with SolarCity panels on his Redondo Beach, California, home last year. Although he hasn’t needed the backup power yet, he has embraced the concept.

“I think it’s brilliant,” he said. “I would consider upgrading to a more powerful home battery if they could figure out a way to get me totally off the grid.”

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