I'm back in Paris, and trying belatedly to organise my thoughts after the last 5 days in Austin. Beyond the obvious pleasure for me to see friends I can meet only once a year, I've been trying to get an general impression of what happened at Netroots Nation. I was much impressed by Hunter's wistful and rather pessimistic musings on Thursday, but came reassured by what transpired throughout, and which, in my view, was eloquently summarised by Van Jones in his keynote speech on Sunday morning (it can be viewed here).

I remember 3 core points from what was a truly inspirational moment:

1. they had their chance, they messed up, "it's our turn (to clean up)"

2. consequently, the netroots need to move from a (successful) force of opposition to a force of proposition

3. energy and climate policy is at the heart of the clean up

Guess who's just been sighted at Netroots Nations?

So why is he here?

"I'm here to build a broader coalition of Republicans and Democrats disanchanted with government, and to reach out to young people"

"Barack Obama and John McCain both represent Big Government"

He also said that he heard that John McCain hates bloggers, and that's why he's here: not everybody hates bloggers.

(quotes and pictures with the help of Shockwave)

Al Gore is now giving a major speech in Washington, setting out an ambitious goal for the USA to produce all of its electricity from carbon-free sources by 2020. While I have not heard the speech yet, I thought I'd comment on the technical feasibility of the plan, and the underlying economics of such an endeavour.

from the Department of Energy's recently published study about bringing wind power to 20% of total generation

The short answer is: while 100% is probably unrealistic, it's not unreasonable to expect to be able to get pretty close to that number (say, in the 50-90% range) in that timeframe, and it is very likely that it makes a LOT of sense economically.

Initially on European Tribune, and also on the Oil Drum. UPDATE: see disclosure below the fold.

Each time I come to the US, it surprises me, even though I know it: I go to a store, buy a $0.99 cent, fork out a dollar bill, and get told I need to pay $1.04.

"Why does the sign say $0.99 when I have to pay $1.04?"
"It's the taxes, I only get $0.99 as announced"
"But I don't care who gets what - the price says 0.99 and I need to pay something different!"
"Go complain to the government"

Maybe the annoyance is about having to dig for change (or, just coming out of the airport with twenties from the ATM, being saddled with tons of change), but I can't help feeling that your system is fundamentally flawed and creates unnecessary grief.

In Europe, governments smartly recongised the problem and imposed that all featured prices must be all-inclusive, ie you pay what's announced, and it's the seller's problem to split that between taxes and his actual revenues.

US Treasury rescue for Fannie Mae and Freddie Mac

US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms.

The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.

Together, the two stockholder-owned, government-sponsored companies own or guarantee almost half of America’s $12 trillion home-loan market and are vital to the functioning of the housing market.

In a recent email:

with Jerome having had all his predictions fulfilled, he's actually out of editorial lines to push.

A good thing too.

I'm supposed to be in Lisbon on Tuesday (to discuss a financing of a 100MW wind farm in Portugal), in Paris on Wednesday (to finalise the documentation of 160MW of wind farms in France) and in Dusseldorf, Germany on Thursday (to discuss the financing of 400MW of offshore wind in Germany). And of course, as a good Frenchman, I should really be spending the next 3 weeks with my family, which is going on holiday in Normandy.

And yet I'll miss all of the above to be in Austin, Texas next week, because it's the only time of the year that I get a chance to meet a few of you guys face to face. Being busy at work has kept me from writing as much as I would have liked to in the past year (but then again, it already feels too much like I'm repeating myself), but it won't prevent me from comng over to see you guys.

Many of you have noted that my diaries persistently focus on bad economic or financial news, and often announce more to come. A few complain that I'm gloating over other people's misfortunes; some point out that it's too easy to be systematically negative, as I'll eventually be right, if temporarily (in a "broken clock" kind of way), but that means little; and many more are seriously scared by all my doom'n'gloom.

I'd like to note, for the record, that bringing up such bad news (the real estate crash, the increasing energy prices, the financial crisis, etc...) has a very real political purpose and is at the heart of what this website is about.

I've been mulling for a while the idea of doing a grand tour of the USA with my family, over a number of weeks (or months), staying over at kossacks' across the country, and visiting their favorite places all over the country.

This would not take place before next summer, or the following year, but I wanted to test the interest of kossacks for such an endeavor, and your willingness to offer me your hospitality for a day or more, given that I would not quite travel alone, bringing alone my wife and 3 kids (currently 9, 8 and 5), and that the whole trip would be liveblogged here on dKos, to see how long such a trip could be stretched.

so - take the poll, and tell me about the things worth visiting near your place!

New York Times, 14 October 2001
''If bin Laden takes over and becomes king of Saudi Arabia, he'd turn off the tap,'' said Roger Diwan, a managing director of the Petroleum Finance Company, a consulting firm in Washington. ''He said at one point that he wants oil to be $144 a barrel'' -- about six times what it sells for now.

As you may have heard, oil prices went above $144 this week.

City of Houston Gives Wind Power a Turn

HOUSTON -- The heart of the U.S. oil patch on Tuesday began using wind-powered electricity for about a fourth of its municipal power needs at a lower price than it is paying for power produced from coal and natural gas, city officials said.

The move shows how renewable energy's prospects are improving at a time of soaring fossil-fuel prices. Long derided as an expensive niche, wind power now is moving closer to the mainstream.

Yes, wind is cheap enough to be competitive head on with coal and gas - even as they aren't taxed for the pollution they cause or the carbon emissions they generate.

Another of my wind diaries.

It is oddly fitting that we touched $100 oil on 31 December and got halfway from $100 to $200 oil on 30 June - so we're on track to reach $200 oil by 31 December this year (in case you're wondering: +42% and again +42% from that level = +100% from the initial level).

It is also fitting that on that same date, the International Energy Agency published one of its gloomiest ever analyses of the oil markets, asserting that oil prices are justified by fundamentals

It said: “Like alchemists looking for a way to turn basic elements into gold, everyone wants a simplistic explanation for high prices,” bluntly adding: “Often it is a case of political expediency to find a scapegoat for higher prices rather than undertake serious analysis or perhaps confront difficult decisions.”

With gas topping $4 per gallon, and oil prices seemingly reaching new highs every week, promising more pain at the pump in the foreseeable future, energy policy is rightfully claiming its place as a major topic of the 2008 election. Indeed, John McCain gave a major campaign speech last week in Houston specifically on energy (the full transcript can be found here), and addresses the issue again this week in Santa Barbara and it is worth looking in more detail at how he describes the current situation, and what he is proposing.

This was posted on Pajamas Media two days ago, with the following title: McCain’s Energy Plan: Correct Diagnosis, Killer Prescription - John McCain seems to have identified our energy problems accurately. But are his solutions equally laudable? It is copied here below in full with their kind authorisation. This article was requested through the Oil Drum.

As you may have heard, oil prices have reached a new high above $140. I can already hear the outcry against speculators and their out-of-control games to enrich themselves at our expense.

Never mind that speculators have been caught shortselling oil (ie betting on a fall in prices) more than a few times in recent months. Never mind that spot oil prices, which require actual physical deliveries of oil at the end of each month, have behaved the same way as paper futures. Never mind that oil storage seems to not be increasing.

Nope, it is just too convenient, too irresistible and, let's say it, too comfortable an excuse that speculators are to blame. It's not our fault, we have our scapegoat. Our price increases are temporary, we'll soon be back to "normal" lows, as soon as (take your pick) speculators have been punished/oil companies are taxed for their profiteering/"fundamentals" are left toset prices.

This is just denial

There are A LOT of reasons why oil prices are going up. Let me show you just a few.

A Countdown to $200 oil diary

This is a re-run of a post written at the end of last year, with a few added comments (in italics).

An argument that has been regularly put to use on my doom-n-gloom diaries about the economy, the dollar or the oil situation is that I've been predicting some of these things (like a recession, or a housing slowdown) for so long that they are bound to happen at some point and thus my prognoses have little value. As the old joke goes, "economists have predicted 9 of the last 4 recessions"...

I went through some of my earlier diaries - those from early 2005 - as well as others from other bloggers, to look at what I had written then, and (pat, pat on the shoulder) I'm pleased to say that they were quite on target, and provide a decent explanation of what's been happening in recent months.

So to those that say: "who could have predicted this?", I'll respond quite directly: we did, on the blogs; and quite well, including the 'what' AND the 'how', if not quite the 'when.'

Saudi Arabia has announced, once again, that it was increasing production:

Saudi Arabia confirmed it would pump 9.7m barrels a day next month, an increase of 200,000 and the highest level in nearly 30 years, as it repeated its standard offer of extra barrels if customers demanded them.

The kingdom also reiterated its promise to expand production capacity, noting that it expects to achieve 12.5m b/d next year and could add an additional 2.5m barrels – if needed – after that with a massive investment programme.

And of course, we can believe them!

Saudi Arabia's oil production reaches 10.8 mln bpd

RIYADH, July 31 [2007] (Xinhua) -- Saudi Arabia's crude oil production capacity has reached 10.8 million barrels per day (bpd), the country's state oil company Saudi Aramco announced Monday.

(...)

Saudi Arabia is the world's largest oil producer and exporter and plans to raise its production capacity to 12.5 million bpd in 2009.

Climate Progress

The U.S. Energy Information Administration (EIA) recently did a detailed study of the likely outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).” The sobering conclusion:

The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.

And the impact of the projected 7% (!) increase in lower-48 oil production that might result in 2030 thanks to opening the OCS is … wait for it …

… any impact on average wellhead prices is expected to be insignificant.

The CEO of BP, Tony Hayward, has published, on the occasion of the publication of BP's statistical yearbook, an Op-Ed in the Financial Times with a pretty self-explicit title: Let the markets solve the energy crisis. But it's also very devious, as his ode to markets allows him to mix reasonable arguments with highly toxic ones, and it's going to be very hard to make the distinction that he is correct on some respects but not in others...

Basically his arguments boil down to 3 points: there is no speculation (prices are justified by fundamentals, markets work fine), renewable energy is not serious (too small, mostly), and there is no peak oil (plenty of reserves around). and of course, his solution is simple: oil majors are ready to invest and let market forces solve the supply problem, but political obstacles prevent them, and governments must therefore help by removing these.

What is true is that speculation is not to blame, and that there are political obstacles to investment today. The rest is not quite so true. And that mix, which I expect is deliberate, has one main subtext: "don't worry" (and don't try to move off oil).

Oh this is momentous:

ECB shrugs off Fed concern on dollar

The fight against inflation in the 15-country eurozone will remain the European Central Bank’s top priority even if that clashes with US attempts to prevent a further slide in the dollar, a senior official at the bank made clear on Monday.

35 years after John Connally's famous phrase ("the dollar is our currency but your problem"), not only have the Europeans managed to eliminate the problem, by creating a currency able to largely protect their economies from currency fluctuations, but they have finally - finally! - realised that they have solved the problem.