Mixed feelings on Ernesto

Such is the nature of our dependence on oil that it's hard to know how to feel about the latest economic news on tropical storm Ernesto. Oil prices fell (hooray!!) on Monday after Ernesto's strength was downgraded and forecasts suggested it will miss oil facilities in the Gulf of Mexico. On a less happy note for those of us who live in South Florida, Ernesto is now predicted to hit us instead (not again!!). It's hard not to feel just a little put out by the market reaction to our bad luck!

A barrel of light, sweet crude tumbled 1.90 dollars to 70.61 dollars on the New York Mercantile Exchange. Meanwhile, gasoline futures fell by 11 cents to 1.78 dollars a gallon and natural gas declined by 68 cents to 6.47 dollars per 1,000 cubic feet.

On the other hand, if South Florida is actually hit by a hurricane you can bet your bottom dollar that gas prices will in fact rise in the affected region. Of course that assumes there is any gas left at stations which were overrun with panic buyers in Miami today.

Maybe this will serve as yet another reminder that Florida needs to do something to diversify its energy supply. The Fueling Station spent Monday at the Florida Solar Energy Center in Titusville, the nation's largest solar energy research facility. (more on our visit coming soon) The Center's director, James Fenton,put the case for solar power very simply. "When a hurricane comes you don't lose power."
While the US is slowly waking up to the virtues of solar power, Fenton says it will take "more pain" before its full potential is realized.

Comments

[Melissa Meehan]

Jim Fenton is a very wise man. He made excellent remarks at the 2005 Energy Forum in Tallahassee. I am especially interested in his case for solar water heaters which I believe he called, "a no-brainer."

Florida has made some strides to provide incentives for folks to invest in solar power, but I would like to see more. An aggressive education and marketing campaign to raise awareness for renewable energy tax incentives and opportunities might do well. 150 solar roofs out of millions in Florida are not enough.

According to a chart that was distributed at the 2005 Energy Forum, heating, cooling, and hot water account for 55% of residential energy use. Swimming pools gulp up another 20%.

Florida has everything to gain from solar power and very little to lose. I welcome further discussion of distributed generation on this blog.

[Ed]

In response to the drop in oil prices:
In their address to congress, oil executives said that their enormous profits were just a proportional result of rising oil prices.
Whenever we see the price of oil go up, or even an event that threatens to raise the price of oil, gas prices seem to go up proportionately.
Yesterday we saw the price of oil drop by about 2.7%. On a $2.80 gallon of gas, that would be about $ 0.075. But of course, we won't be seeing those types of price drops.
I realize that the world isn't that simple, but the point remains - prices may rise on speculation but they never fall proportionately. Is there a study out there that tracks the rise and fall of gas prices against the price of oil? If I am wrong, I'd love to be shown - but I don't think that even the Exxon Institute for Energy Studies has the chutzpah to publish such a study.

[Frank McIntyre]

Florida needs a solar energy incentive program similar to California's Million Solar Roofs initiative signed into law this week. It will result in 3000MW of clean renewable energy over the next 10 years.

Florida's current incentive program is not sufficient. It effectively limits commercial systems to 25kW with the $100,000 cap and a company that has numerous facilities can only get one rebate. The commercial rebate should be $4.00/w with no cap and no limit on the number of rebates allowed. Of course that would mean that the program would need more money. Better yet would be a performance based incentive like in California where PV systems get $.39 cents per kwh for five years. A $1 per month surcharge (Public Benefits Fund, System Benefit Charge, whatever you want to call it) on all electric bills in Florida would provide millions for such a program.

The $5/w incentive for Florida manufactured components is a joke when it comes to PV systems because there are no companies in Florida that make PV equipment and no company will invest in Florida when there is only a $2.5 million incentive program.