Big Oil on Peak Oil

Big Oil on Peak Oil
April 19, 2007 -- The Wall Street Journal Energy Roundup Blog

Energy Roundup and several other energy bloggers participated in a conference call yesterday with Red Cavaney, president and CEO of the American Petroleum Institute. Topics included peak oil, ethanol, the Canadian tar sands, refinery capacity and greenhouse-gas emissions caps.

Some highlights:

Cavaney is sanguine about the prospect of peak oil. He believes that, even after the world’s oil production hits its peak — whenever that happens — the downward slope of production will likely be gradual, rather than sharp. He also thinks much of the world is “under-explored,” suggesting the peak can be put off a little while longer with more exploration overseas. He also thinks hydrocarbons will always be with us, in one capacity or another. “Man left the Stone Age not because he ran out of stone. We’ll leave the age of oil, but it won’t be because we ran out of oil. It will be because other technologies have come in that will be more reliable and cost-effective.”

He claimed his industry is agnostic about the controversies surrounding global warming. “We’re not scientists or experts in that area,” he said. “But we have concluded there are sufficient signals that it’s important we get on with trying to mitigate the outcomes that may flow from path we’re on.”

He also expressed no preference for any of several potential congressional actions to limit greenhouse-gas emissions. But he also said he doubted a carbon tax would be imposed any time soon. “Most economists…say a carbon tax would be the most efficient way to maximize reductions,” he said. “But…if you talk to political advisors, that’s the last vote they’ll take.”

He was a little more heated in defending his industry against charges that it is standing in the way of a broader rollout of ethanol in the U.S. The Wall Street Journal reported earlier this month that oil-company policies make it harder for many service stations to stock a fuel called E85, a blend of 85% ethanol and 15% gasoline. And earlier this year, representatives of auto makers and the Clean Fuel Development Coalition told the Journal that oil companies weren’t doing their part to make ethanol more widely available.

Cavaney said such critics “have their own agenda.” The auto industry, he implied, has not taken ethanol use seriously, using flex-fuel vehicles and E85 primarily as marketing tools. He said his industry is doing everything it can to encourage ethanol use, but that corn-based ethanol will never be a widespread substitute for gasoline and cellulosic ethanol is still years away from commercial viability.

He also warned against relying on any one substitute for fossil fuels. “There is no one silver bullet,” he said. “Anybody that focuses that way will miss a lot of opportunities.”

Cold Turkey, by Kurt Vonnegut (1922-2007)

Excerpt from:
Cold Turkey
May 10, 2004 -- By Kurt Vonnegut

I am of course notoriously hooked on cigarettes. I keep hoping the things will kill me. A fire at one end and a fool at the other.

But I’ll tell you one thing: I once had a high that not even crack cocaine could match. That was when I got my first driver’s license! Look out, world, here comes Kurt Vonnegut.

And my car back then, a Studebaker, as I recall, was powered, as are almost all means of transportation and other machinery today, and electric power plants and furnaces, by the most abused and addictive and destructive drugs of all: fossil fuels.

When you got here, even when I got here, the industrialized world was already hopelessly hooked on fossil fuels, and very soon now there won’t be any more of those. Cold turkey.

Can I tell you the truth? I mean this isn’t like TV news, is it?

Here’s what I think the truth is: We are all addicts of fossil fuels in a state of denial, about to face cold turkey.

And like so many addicts about to face cold turkey, our leaders are now committing violent crimes to get what little is left of what we’re hooked on.

What Economists Can Learn From Evolutionary Theorists

What Economists Can Learn From Evolutionary Theorists
November 1996 -- By Paul Krugman
(From a talk given to the European Association for Evolutionary Political Economy)

To read the real thing in evolution - to read, say, John Maynard Smith's Evolution and the Theory of Games, or William Hamilton's new book of collected papers, Narrow Roads in Gene Land, is a startling experience to someone whose previous idea of evolution comes from magazine articles and popular books. The field does not look at all like the stories. What it does look like, to a remarkable degree, is - dare I say it? - neoclassical economics. And it offers very little comfort to those who want a refuge from the harsh discipline of maximization and equilibrium.[...]

Personally, I consider myself a proud neoclassicist. By this I clearly don't mean that I believe in perfect competition all the way. What I mean is that I prefer, when I can, to make sense of the world using models in which individuals maximize and the interaction of these individuals can be summarized by some concept of equilibrium. The reason I like that kind of model is not that I believe it to be literally true, but that I am intensely aware of the power of maximization-and-equilibrium to organize one's thinking - and I have seen the propensity of those who try to do economics without those organizing devices to produce sheer nonsense when they imagine they are freeing themselves from some confining orthodoxy.

Fuel taxes: An important instrument for climate policy

Fuel taxes: An important instrument for climate policy
July 14, 2006 -- By Thomas Sterner, Energy Policy, Vol. 35, Issue 6, June 2007 via Greg Mankiw

Abstract

This article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished. Fuel taxes have restrained growth in fuel demand and associated carbon emissions. Although fuel demand is large and growing, our analysis shows that it would have been much higher in the absence of domestic fuel taxes. People often assert that fuel demand is inelastic but there is strong research evidence showing the opposite. The price elasticity is in fact quite high but only in the long-run: in the short run it may be quite inelastic which has important implications for policy makers. Had Europe not followed a policy of high fuel taxation but had low US taxes, then fuel demand would have been twice as large. Hypothetical transport demand in the whole OECD area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date—yet this fact is not usually given due attention in the debate.

Gore, Gandhi, and Dioum

Al Gore at TED

March, 2008







Here is an excellent presentation on issues pertaining to the new environmental movement--global climatic disruption and resource constraints (in comparison to the previous environmental movement--biodiversity, toxins, air/water quality, and population). In the past, I have been skeptical towards Al Gore for a few reasons. The most prevalent being that he flies around the world, after leaving one of his mansions, to tell the general public to reduce emissions.



"You must be the change you wish to see in the world."

-Mohandas Gandhi



However, I am beginning to think less about his vanity and more about his ability to promote ideas in a compelling way.



"For in the end, we will conserve only what we love. We will love only what we understand. We will understand only what we are taught."

-Baba Dioum



He is one of many voices that need to be listened to as humanity attempts to reduce the tragedy of the commons and improve the living conditions for all of life.

ConocoPhillips First Major U.S.-Based Oil Company To Call For Emissions Cap

Conoco Calls for Emissions Cap (Subscription)
April 11, 2007 -- By Jeffrey Ball, The Wall Street Journal

Oil Producer Joins Effort To Shape New U.S. Policy On Greenhouse-Gas Limits

ConocoPhillips became the first major U.S.-based oil company to add its voice to the call for a federal global-warming-emission cap, in the latest sign that U.S. companies are jockeying to shape any legislation.

ConocoPhillips said it was joining the U.S. Climate Action Partnership, a group of corporations that have called for a U.S. emissions cap and have outlined broad principles that they want any cap to include. The group formed earlier this year, following the takeover of Congress by Democrats, whose leaders have said they want to legislate an emissions cap.

"We believe that the science is quite compelling and that climate change is certainly attributed to human activity and to the substantial use of fossil fuels," Jim Mulva, chairman and chief executive of Houston-based ConocoPhillips, said in announcing the company's position.

Exxon Mobil Corp., the world's biggest publicly traded oil company by market value, also has begun talking about what it wants any global-warming constraint to include, including market flexibility. But Exxon isn't saying it either endorses or opposes a federal cap. Said Dave Gardner, an Exxon spokesman: "The devil's in the details."

European-based oil giant BP PLC has endorsed a U.S. global-warming emissions cap. It is the only other oil company in USCAP.

ConocoPhillips's announcement comes amid mounting political and consumer concern about global warming and rising gasoline prices. The U.S. Energy Information Administration said yesterday that the global oil market is likely to remain tight -- and pump prices volatile -- during the summer driving season. Regular-grade gasoline should average $2.81 per gallon this summer, it said, compared with $2.84 per gallon last summer.

Companies like ConocoPhillips that are endorsing a federal global-warming cap are doing so largely in the belief that they can shape it to minimize the cost to them. Many companies, eyeing the proliferation of differing global-warming rules in places such as California and the Northeast, are concluding that a single nationwide cap will be less onerous than a patchwork of state rules.

A U.S. policy, they figure, would be easier to integrate into global-warming regulations being implemented in other countries where U.S.-based multinationals like ConocoPhillips also do business. That integration would make it easier for companies to satisfy any U.S. obligation by buying cheaper emission "credits" from the developing world, where the cost of projects to reduce or offset fossil-fuel emissions is lower. ConocoPhillips's Mr. Mulva stressed that his company wants a U.S. cap to "have linkages" to policies in other countries.

Mr. Mulva also said he wants to ensure than any federal emissions cap doesn't "create winners and losers" in the economy. But companies already are ratcheting up their lobbying push in Washington to influence the details of whatever cap emerges. That scramble is particularly intense among the industries likeliest to be hit: electric utilities, heavy manufacturers, auto makers and oil producers.

Transportation isn't likely to be hit as hard as the utility sector. That is because it is cheaper for the economy to curb a ton of emissions of carbon dioxide, the main global warming gas, by targeting utilities than by targeting cars and trucks. Still, the transport sector is likely to be hit. The bulk of that burden could fall either on fuel producers, which might be required to produce fuel that contains less carbon, or on auto makers, which might be required to engineer their vehicles so they burn less fuel.

In an indication of that tension, Mr. Mulva all but blessed a toughening of a policy the auto industry reviles: the federal government's decades-old requirement that each auto maker's fleet of new vehicles each year meets a minimum average fuel economy. "We need to do everything we can to just have more energy efficiency," he said, adding: "If that leads to higher requirements -- more miles per gallon in terms of the automobiles we drive -- that all does help in the more efficient use of energy."

The auto industry, for its part, is trying to push much of the burden onto others. It, too, has begun talking favorably about an economy-wide cap on global-warming emissions, which it figures is likely to go easier on the auto industry than would a significant toughening of the federal automotive-fuel-economy requirements.

Crop Prices Pushing Up Cost Of Food Globally

Crop Prices Soar, Pushing Up Cost Of Food Globally (Subscription)
April 9, 2007 -- By Patrick Barta, The Wall Street Journal

Soaring prices for farm goods, driven in part by demand for crop-based fuels, are pushing up the price of food world-wide and unleashing a new source of inflationary pressure.

The rise in food prices is already causing distress among consumers in some parts of the world -- especially relatively poor nations like India and China. If the trend gathers momentum, it could contribute to slower global growth by forcing consumers to spend less on other items or spurring central banks to fight inflation by raising interest rates.

Politicians in markets where food costs are a particularly sensitive matter are moving to counter rising prices before they take a bigger economic toll or fuel unrest. But it remains unclear whether those policies will be enough to contain the current pressures, or whether a longer-term bout of food-price inflation -- similar in ways to the recent climb in prices for oil and other commodities -- is in the offing.

One of the chief causes of food-price inflation is new demand for ethanol and biodiesel, which can be made from corn, palm oil, sugar and other crops. That demand has driven up the price of those commodities, leading to higher costs for producers of everything from beef to eggs to soft drinks. In some cases, producers are passing the costs along to consumers. Several years of global economic growth -- led by China and India -- is also raising food consumption, further fanning the inflationary pressures.

Food-price inflation has been climbing -- in some cases sharply -- in India, China, Europe, and even smaller economies like Turkey, South Africa and Poland. In Hungary, it is running at more than 13% a year, compared with less than 3% in 2005. In China, food prices are climbing at a 6% pace, more than three times the speed of a year ago. Prices are also up in Germany, Italy and the United Kingdom. They may even be picking up in Japan, the world's second-largest national economy, though the signs are tentative since overall prices there are only just starting to rise after a prolonged economic downturn.

The U.S., too, is seeing some stirrings, with food costs rising 3.1% in February from the year before -- a rate one percentage point higher than in mid-2005. Economists say U.S. food prices are expected to rise faster than the general rate of inflation this year. Wholesale prices of meat, poultry and eggs have already increased.

If the trend continues, U.S. consumers are likely to see higher prices at the supermarket for everything from milk to cereal to soda pop, since corn is used to feed livestock and make high-fructose corn syrup, a key ingredient in many soft drinks. A spokesman for the National Chicken Council, a poultry-industry group, recently testified to a congressional subcommittee that Americans should expect higher chicken prices because of what the group described as "the ethanol crisis."

Doomsday predictions of a major food shortage in China and elsewhere have circulated for years but haven't materialized. And some economists believe the recent increase in crop demand probably can be met without severely straining the global economy. They think prices could come back down over time, especially if some countries that have more land that could be put under cultivation -- particularly Brazil -- can greatly increase production. Technological advances, such as better seed varieties, could also help boost production to keep up with demand.

In the meantime, higher farm prices aren't bad for everyone. They could help boost incomes for the rural poor in developing nations, who have been bypassed by gains in the manufacturing and service sectors. In some cases, the rising demand for food also reflects the growing wealth of once-destitute populations around the globe.

So far, higher prices haven't sparked a major rise in overall global inflation, which remains relatively low and stable by historical standards. Moreover, food prices are notoriously volatile, and some of the increases are due to short-term or local factors that could reverse in time.

But many economists believe the forces causing the current bout of food inflation will persist, or recur in years ahead. Many countries are facing shortages of land and water that didn't exist during past food-price spikes, so they can't easily plant more to ease the strain.

Researchers at Swiss bank UBS AG note that average food prices in China have grown faster in the past five years than in the previous five, as more agricultural land is taken up for factories or high-rise condominiums. Changes in diets are also exacerbating the problem, as rising incomes allow the Chinese and consumers in many other places to eat more.

Some economists contend that China and India appear to be reaching a point at which nothing short of a bumper crop of key commodities will be enough to meet local needs and prevent further surges in food prices. In fact, China and India have achieved historically high production of some crops in recent years, only to see prices continue to climb.

Global grain stocks are at their lowest level in 30 years, after several years of strong global economic growth, and could become even tighter if farmers divert more crops to make ethanol or other fuels. By some estimates, about 30% of the U.S. grain harvest is likely to be devoted to ethanol production by 2008, up from 16% in 2006.

All of this puts the world's central banks in a bind. Although they have confronted spurts in energy prices, many of them haven't had to cope with prolonged increases in food prices since the 1970s. Since then, food-price inflation has remained relatively benign, even as incomes world-wide have climbed, allowing consumers to beef up their diets.

In more recent years, central banks have tried to ignore surges in food prices as long as they didn't get too out of hand, mostly because they tended to be short-lived. A change in weather, for example, could quickly turn a food shortage into a glut, sending prices tumbling.

But a more sustained bout of food-price inflation, if it emerges, could force banks to keep interest rates higher than they would otherwise be. India, for one, has increased interest rates several times over the past year in part to combat food-price inflation.

"In 1972, the last time grain stocks were this low, the story didn't end well in terms of inflation," says Carl Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y. In those days, inflation soared not just because of higher oil costs but also because of a global jump in food costs, all of which helped trigger a major U.S. recession and a global slowdown. "Food prices were an important part of what started [inflation] rolling" in the 1970s, Mr. Weinberg says.

But since the 1970s, the Federal Reserve and some other central banks have come to believe that they can avoid raising interest rates in the face of transitory increases in food and energy prices if they have established enough credibility as inflation fighters to keep such price increases from spilling over to the rest of the economy.

Today, the inflation risks may be greatest in developing economies. In the Philippines, food accounts for 50% of the basket of goods included in the consumer-price index, an inflation benchmark. In Thailand, it's about 35%, according to data from Macquarie Bank Ltd. In the U.S., food makes up only about 15% of the CPI.

In one bustling open-air market in downtown Shanghai, shoppers say they are paying as much as two times the price they paid last year for green vegetables, and the cost of meat and vegetable oils have also soared.

Such blows to the pocketbook "give us more pressure for daily life," says Xu Wen, a 53-year-old retiree who was purchasing some rolled noodles in a small shop last week. Already, she says, she and her husband are spending almost half their monthly income on food -- a percentage that continues to increase over time. "We ordinary people have no way out," she says. "This is something the government needs to be concerned about."

Government officials are taking pains to show they are addressing the problem. In December, Chinese Premier Wen Jiabao toured a Beijing supermarket to check up on prices, and China has begun limiting the construction of corn-based ethanol plants to ensure there is enough corn for humans and livestock. Chinese officials have even banned new golf courses on farm land and have been unwinding subsidies they once paid to grain distributors to sell excess corn overseas.

Still, analysts estimate Chinese stockpiles of surplus corn now stand at only about 30 million metric tons, down from more than 100 million tons at the end of the past decade, as demand picks up. (The Chinese government doesn't provide official estimates of its stockpiles).

That would imply that China only has two to three months of surplus supply based on current consumption trends, making the country highly vulnerable if it has a bad crop. Although China remains a net exporter of corn now, analysts believe it will become a net importer sometime in the next few years.

Some economists say China will have to take more aggressive steps to prevent future food problems. These changes could include allowing the proliferation of large -- but more efficient -- corporate farms similar to the ones that drove many small growers out of business in the U.S. in recent decades. Such a push would be extremely difficult for China because it needs to preserve jobs for the tens of millions of people who live in rural areas.

Pressures are also building in India. Monika Katyal, a 32-year-old homemaker, complains that she has had to cut back on purchases of many luxuries, such as cosmetics, as her family's monthly bill for groceries has climbed as much as 50% in recent months.

"I came here to do some shopping for myself, but now it doesn't look like I will be able to do that," she said recently, as she studied the price on a bottle of ketchup in a New Delhi grocery.

In addition to raising interest rates, Indian officials have also lifted import duties on corn and barred exports of wheat, to make sure supplies are available for domestic consumption.

But it isn't clear whether those and other moves will be enough to make a big difference in the long run. The main problem is that yields of some crops aren't growing fast enough to keep up with India's rapidly increasing food demand. India's corn production, for example, has climbed about 4% a year since 2001, says Amit Sachdev, a New Delhi-area agriculture-industry analyst, while demand has been increasing nearly 5.5% a year.

"If I look at the trend line, [it] indicates to me that the requirements are going up much faster than what you can produce" in India, he says.

Mexico Tries to Save A Big, Fading Oil Field

Mexico Tries to Save A Big, Fading Oil Field (Subscription)
April 5, 2007 -- By David Luhnow, The Wall Street Journal

Cantarell's Drop-Off Faster Than Expected; Turning to Technology

In March 1971, a Mexican fisherman named Rudesindo Cantarell took a few geologists from state-run oil company Petróleos Mexicanos to this spot, where he had seen oil slicks. Mr. Cantarell didn't know it, but he had stumbled across one of the largest offshore oil fields ever found.

A few decades and 12 billion barrels of oil later, the field that bears Mr. Cantarell's name is dying, and Pemex, as the state-owned company is known, is struggling to stave off the field's demise. From January 2006 though February 2007, Cantarell lost a staggering one-fifth of its production, with daily output falling to 1.6 million barrels from two million.

The oil industry was stunned. Cantarell, which currently produces one of every 50 barrels of oil on the world market, is fading so fast analysts believe Mexico may become an oil importer in eight years. That would batter Mexico's economy, which depends on oil exports to fund 40% of its government spending.

The continued deterioration of the world's second-biggest field by output would also put pressure on prices on the global oil market, where supplies are barely keeping up with growing demand as it is. And it would leave the U.S. even more dependent on Middle Eastern supplies -- and that much more vulnerable to political tumult in that region.

The demise of Cantarell highlights a global issue: Nearly a quarter of the world's daily oil output of 85 million barrels is pumped from the biggest 20 fields, according to estimates from Wood Mackenzie, a Scotland-based oil consulting firm. And many of those fields, discovered decades ago, could soon follow in Cantarell's footsteps.

It's widely believed that the world's biggest oil fields have already been found. In the decades leading up to the 1970s, the world discovered eight big fields that produced between 500,000 to one million barrels a day, according to Matthew Simmons, a veteran oil industry banker. During the 1970s and 1980s, only two were found. Since then, only one -- the Kashagan field in Kazakhstan -- has the potential to easily top the 500,000 barrel-a-day mark.

Two decades ago, about a dozen fields produced more than a million barrels a day. Now there are only four, one of which is Cantarell. The future of two others, discovered more than 50 years ago, remains in question. Some analysts speculate Saudi Arabia's Ghawar, the biggest field by far, could begin a gradual decline within a decade or so. Another, Kuwait's Burgan, is showing signs of maturity. In November of 2005, Kuwait Oil Co. lowered its estimate of the field's sustainable production level to 1.7 million barrels a day from 1.9 million a day.

Replacing big gushers is difficult. Industrialized countries, which tapped out their big fields years earlier, haven't been able to maintain output despite finding large numbers of smaller fields and investing heavily in technology. Alaska production, hurt by declines at the giant Prudhoe Bay field, dropped from 2 million barrels a day in 1988 to a current rate of about 900,000 a day.

'On a Treadmill'

"The world faces a situation where we have production from smaller and smaller fields trying to keep up with declines from the big fields like Cantarell," says Mike Rodgers, a partner at industry consulting firm PFC Energy in Houston. "You're on a treadmill trying to keep up, and you get to a point where you can't make any more forward progress."

Some industry veterans are more sanguine. They argue that technology and high prices are helping tap vast sources of so-called "unconventional" crude oil, such as Canada's tar sands. Plus, they say technologies will also delay any decline in big fields by dislodging billions of barrels of additional oil that used to be too costly or difficult to reach. In Texas and California, fields discovered in the late 19th century are still productive. "The world has managed depending on giant oil fields for the last several decades," says Khalid Al-Roldan, a visiting fellow at the Center for Strategic and International Studies, based in Washington, D.C.

But even if there is enough oil under the ground, the politics above the ground get in the way. The vast majority of the world's remaining big fields are in developing countries and run by government-owned oil companies, which are often less efficient than their investor-owned counterparts. State-owned companies in many countries, like those in Venezuela and Iran, are milked by their government for taxes, which reduces their ability to invest in new oil technology. Legal restrictions make it hard for national oil companies to work with foreign firms, cutting them off from techniques used in the rest of the industry.

Mexico's Pemex suffers many of these limitations. Its last two chief executives failed to persuade Mexico's Congress to remove foreign investment restrictions, which are embedded in Mexico's constitution and viewed as an embodiment of Mexican nationalism. Mexico's new president, Felipe Calderón, is expected to try to end the investment restrictions, but he too faces long odds.

Cantarell, like all giant oil fields, boasts an unusual geological history. Geologists say it may have been formed thanks to the asteroid that slammed into the Yucatán peninsula some 65 million years ago -- the same event that is believed to have led to the extinction of the dinosaurs. The impact caused giant cracks underground that allowed oil from previous millennia to accumulate in a single spot.

The field lay unnoticed until Mr. Cantarell, the fisherman, kept getting his nets smeared with oil as he trawled for shrimp in the 1960s. Assuming that the oil came from Pemex operations, he regularly hauled his oil-stained nets hundreds of miles to the nearest Pemex offices in neighboring Veracruz state to seek compensation. Finally, local Pemex officials say, the oil giant grew so exasperated with Mr. Cantarell that it went to check out his story.

The find was spectacular. Unlike most oil fields, which have a thin band of oil-rich rock that stretches for miles in every direction, Cantarell is shaped like a massive underground volcano, with huge amounts of oil in a relatively small place. While Saudi Arabia's Ghawar takes up about 2,700 square miles, Cantarell is just 70 square miles. From one platform, one can see the entire field.

Cantarell's formation made the field easy to exploit. It had so much initial pressure that Pemex's first well at the field produced 36,000 barrels of oil a day, compared with a few hundred barrels at most wells. The field is also in relatively shallow waters -- it is 50 yards deep. The water is so calm one can spot barracuda swimming between the platforms and there is no need for expensive deep-sea platforms. Today, Cantarell needs just 208 wells to produce the equivalent of one-fourth the entire U.S.'s oil output, while the U.S. needs hundreds of thousands of wells for a similar haul.

But the field's abundance also bred a sense of complacency. As is the case in many oil-rich countries, Mexico relied on oil to foot its current spending but gave little thought to what happens when the oil runs out. Last year, Cantarell was responsible for some $25 billion of the $53 billion that Pemex handed over to the government. The steep tax bill has left Pemex chronically short of cash to invest in finding new fields to replace its aging giant.

Cantarell produced about one million barrels a day from 1980 to the mid-1990s, when the field began to slowly lose pressure. This happens to all fields: They begin with enormous natural pressure because they are buried deeply beneath layers of heavy rock. But from the moment a well pricks a field and the oil is taken out, the pressure eases, like letting air out of a balloon.

Squeezing a Balloon

So in 1998, Pemex began injecting massive amounts of nitrogen into the field, which was the oil-field equivalent of squeezing a balloon from the bottom. Output more than doubled to a peak of 2.3 million barrels a day in 2004. That decision was hailed as a technical success, but it was just a temporary fix: It only sucked the field dry faster and set the stage for a steeper decline.

Now, Pemex's lack of money and technology is a handicap in managing the decline. The company didn't have any machinery on its Cantarell platforms to separate water from oil -- standard equipment for most of the rest of the industry. So when water from an underground aquifer began to creep into wells, a common occurrence in an older field, Pemex had to shut down the wells. The company closed any well where the water content rose to between 3% and 5% of the oil. By contrast, there are wells in Texas that are able to produce with 99% water.

"The water problem took us by surprise, but we are handling it," says Gustavo Hernández, Pemex's head of planning at the field. Standing atop an oil platform in the Gulf, Mr. Hernández says the company has overhauled platforms to handle water content of between 8% and 9% and is installing an additional water separation plant this year, allowing it to reopen more wells.

Last year, Pemex drilled its first horizontal wells at the field, something investor-owned oil companies have been using since the early 1980s. Horizontal wells bore down into a field like a traditional vertical well, but then spread out horizontally, extending for miles and allowing a single platform to suck up oil from a much larger area. Pemex plans to drill more such wells this year.

Pemex says steps like these, part of $2.4 billion in investment in the field this year, will slow the field's decline by about half of last year's pace. Instead of a decrease of 400,000 barrels a day, Pemex hopes Cantarell will lose some 200,000 barrels of daily output by year's end. After that, the company says Cantarell will probably continue to decline by roughly 10% a year, down to a daily average of 600,000 in 2013.

Pemex hopes to largely offset Cantarell's decline in the next three years by doing the same kind of nitrogen injection at its second-biggest producer, Ku-Maloob-Zaap, a collection of three fields within eyeshot of Cantarell's platform. (Its Mayan names translate to "nest," "good," and "charcoal.") But Ku-Maloob-Zaap, which is also ranked in the world's top 20 fields, will start its own decline in 2011, according to Pemex.

Pockets of Oil

That leaves Chicontepec, a massive onshore field in eastern Mexico that was discovered in the 1920s, but hasn't been fully developed because it is broken up into tiny pockets of oil that spread out over thousands of square miles in rocky terrain. Pemex says it will need more than 15,000 wells to fully tap the field -- a big stretch for a company that has drilled about 23,000 wells since it was formed in 1938. Developing Chicontepec is also difficult politically; there are scores of nearby towns that may take a dim view of oil production in their backyard.

For now, Pemex is doing what it can to keep Cantarell going as long as possible. A narrowing band of oil means that wells that are drilled at lesser depths have started to hit gas, which is less valuable than oil. Wells that are too deep hit greater amounts of water, which must be extracted from the oil before sale.

"It's a constant game of adjustment," says Mr. Hernández, the field's top planner. In most cases, Pemex tries to replace the production by re-drilling the same well either higher or lower. Still, Mr. Hernandez expects to lose 30 wells this year.

Benjamin Melo, manager of the Akal C platform, tries to assess the future by looking out across the field: "This has been a generous field. And there is still a lot of oil down there. But it won't last forever."

Biological Look At Marmosets And Chimerism

Funky monkeys (Subscription)
March 29, 2007 -- The Economist

Marmosets give birth to their genetic nieces and nephews.

It does not take a biologist to tell that there are two sorts of twins. Twins can be genetically identical or they can be as different as siblings that were born at different times. Most marmosets, though, fall somewhere in between. These small New World monkeys may be cute, but they are chimeras nonetheless. Like the monster from Greek mythology, many marmosets are a mixture of more than one individual. They are, genetically, both themselves and their sibling at the same time.

There are two other odd (and indeed cute) things about marmosets. One is that they are always conceived as twins. The other is that they are unusually caring towards one another. Fathers are particularly and peculiarly doting. Now Corinna Ross and her colleagues at the University of Nebraska have found evidence to suggest the former oddity explains the latter. They have done so by showing that chimerism extends to all sorts of tissues, including marmoset sex cells.

That insight arose when Dr Ross DNA-fingerprinted 12 types of tissue from 39 dead marmosets, in order to work out how frequently cells containing a twin's genome occurred in different parts of the body. Marmosets are not equal mixtures of two genetic individuals. They become chimeras not because their embryos merge but because more often than not their placentas do. They thus share their embryonic blood supplies. That allows them to exchange stem cells, which then develop into more specialised sorts of cell in their new bodies.

Chimeric cells were scattered everywhere, including the sex cells. This means that, in principle, a marmoset can either father (if male) or give birth to (if female) a baby that is its niece or nephew rather than its son or daughter.

To find out if this actually happens, Dr Ross turned her attention to living marmosets. She used hair, blood and saliva samples to identify chimeric animals among the 36 sets of twins in her colony. First, as she reports in this week's Proceedings of the National Academy of Sciences, she proved the marmosets made babies from their chimeric sex cells. This happened even when the twins were brother and sister rather than being of the same sex.

That is bizarre, because female mammals have two copies of the X chromosome, and males have one X and one Y. Any chimeric female that passed on her twin brother's genes must have developed eggs from an XY stem cell instead of the normal XX. Conversely, a chimeric male that passed on his twin sister's genes grew sperm from an XX stem cell, rather than XY. Dr Ross found examples of both.

This done, she tried to work out whether chimerism influenced parental care in marmosets. Zoologists think of caring for others as selfish behaviour, which animals only bother with to improve the chances of their genes being passed on to future generations. Creatures therefore help to bring up babies only to the extent that they believe they are related to them. In marmosets, caring means carrying, so Dr Ross recorded the time each baby marmoset was carried by its mother and by its father during the first fortnight of life. Mothers spent less time carrying those of their offspring who were chimeras than they did carrying those that were non-chimeric. Fathers, however, behaved in the opposite way.

Why that happened is not clear. But one possibility is that, in a species in which females routinely mate with several males, chimerism evolved as a way of duping males into looking after offspring that are not their own. Chimerism, in other words, might confuse a male who fathered one twin into thinking he is dad to both.

This could happen because a chimeric twin that grew from an egg which his sperm did not fertilise would nonetheless have some skin cells containing his genes. The scent-producing cells of that skin would give off pheromones signalling his paternity. Thus by mixing two fathers' genes between two infants, a female creates a situation in which both males consider it in their interest to care for both offspring—a double bonus.

US biofuels: A field in ferment

US biofuels: A field in ferment (Subscription)
December 7, 2006 -- By Katharine Sanderson, Nature

To move US biofuels beyond subsidized corn will be a challenge, reports Katharine Sanderson.

Critics of the US ethanol industry have long derided it as an environmentally questionable subsidy to Mid-western farmers that simply serves a transparently political purpose. Voters in Iowa, the buckle in the US corn belt, get first say in the process of choosing presidential candidates. All such candidates are in favour of turning corn (maize), which the state produces in abundance, into ethanol. This pre-presidential support is good for the Iowan economy, but not necessarily that great for the environment.

Studies that compare the energy that goes into making ethanol — expended during the harvesting, fertilizing and transporting of the corn to refineries, and then refining it — with the energy that is released when it is burned routinely show that the net gain is at best small. The American Coalition for Ethanol says that ethanol contains twice the amount of energy that is used to make it; critics see no net gain whatsoever.

This criticism has had little effect, and since 1980, US ethanol production has risen from an average of 6,500 barrels (1 million litres) a day to 260,000 barrels a day. Federal mandates call for a further doubling by 2012. But it is increasingly clear to many in the industry that the criticisms of corn-based ethanol have merit, and in 2006, the need for an alternative was given the highest profile it could get when President George W. Bush brought it up in his state of the union address. In order to improve US energy security, he said, his government intended to make cellulosic ethanol (ethanol made from the rougher and woodier parts of plants) a competitive biofuel within six years.

Corn stores
The advantage of an ear of corn as a source of ethanol (or for that matter as a bit of food) is that it is mainly starch, which is made up of sugars linked in a regular way with bonds that can be broken easily. Breaking the bonds between sugars and using yeast in the fermentation to produce ethanol is a straightforward task for the biorefineries. The disadvantage is that corn is a crop that needs a lot of inputs — fertilizers, water and pesticides — and that doesn't put as much of the sugar it creates through photosynthesis into its ears as one might wish. A lot of the sugar is instead turned into stalks and 'stover' — structural material rich in cellulose and considerably more difficult to break down.

Plants that store up a significant amount of energy in easily usable forms such as starch or sugar are exceptions, encouraged in their oddities by millennia of selective breeding — and of them all, only sugar cane grown in the tropics puts enough energy into its easily purified products to make bioethanol obviously attractive. Most plants put the bulk of the energy they store up from the sun into cellulose and a related polymer, hemicellulose, and woody plants add another substance, lignin, to the mix. Cellulose makes up the plant's cell walls and, like starch, it is a polymer of sugars containing six carbon atoms linked one to the next. Hemicellulose, on the other hand, is based on a five-carbon sugar, xylose, although it contains many other sugars as well; its various components are thrown together in messy looking chains with many branches. Lignins are huge crosslinked jumbles of organic molecules which reinforce cellulose and hemicellulose to turn them into wood.

The energy that the plants put in to making the bonds in these various substances could, in principle, be extracted by fuel makers. And these molecules — particularly cellulose, which is both the most abundant and the easiest to dismantle — are much more plentiful than starches and sugars. But they are also much harder for microbes to break down; if they weren't, there'd be no trees, just pools of green goo. As yet, there are no cellulosic ethanol refineries operating at full commercial capacity, and assessments of the technology's readiness for market vary a great deal, as do opinions on how to get there from here. Government incentives and tax breaks might be one solution, but big energy companies also have a role to play, as do the smaller companies that have already worked on developing the technology, but have not yet found the best ways of spreading and licensing it.

The most expensive part of making ethanol from cellulose is pretreating the biomass to make it accessible to the enzymes that will then cut the sugars from the polymers so that they can be fermented. Typical pretreatments reduce the feedstock's volume chemically using acids, peroxides and ammonia, often along with some form of mechanical pressing or shredding. Unfortunately, this is not a step that can be skipped to cut costs, says Charles Wyman of the University of California, Riverside, because high sugar yields are essential, and untreated biomass gives very low yields. "The only step more expensive than pretreatment is no pretreatment," he says. Instead, the hunt is on for pre-treatment technologies that involve fewer chemicals, require less energy and don't degrade the sugars that are set free in the process.

After the pre-treatment stage comes the snipping out of the sugars, which is the point at which biotechnologists think they can greatly improve on the current process. Abengoa Bioenergy of St Louis, Missouri, a subsidiary of the Spanish engineering group Abengoa, recently invested $10 million in Dyadic International, a biotechnology company that is concentrating on enzymes for degrading cellulose.

Based in Jupiter, Florida, Dyadic didn't start out as an energy company — in the 1970s it was a leading supplier of pumice for stonewashing jeans. But the enzymatic expertise it developed for distressing denim was then turned to a number of other ends. One of those was breaking down wood, a job that in nature largely falls to fungi. The company's research has centred on a filamentous mess of a fungus discovered by accident in a Russian forest that now, after ten years of processing and genetic engineering, makes up Dyadic's patented C1 fungal cell system. The fungus has been fully sequenced and encouraged to overexpress the genes that then make cellulases and xylanases — the proteins that break up cellulose and hemicellulose to produce fermentable sugars. "We have the world's most prolific filamentous fungus," boasts Dyadic's chief executive Mark Emalfarb.

Cellulose solutions
Emalfarb believes that the cellulosic ethanol market could eventually be worth $20 billion a year in the United States, and suggests that there is enough raw material available in the United States to produce 2.4 billion barrels of cellulosic ethanol a year. This is a bit more than half of what some estimates claim is needed to completely replace petrol as a fuel — the United States gets through some 3.3 billion barrels a year, but the energy content of ethanol is lower than that of petroleum.

The current leader in the cellulosic ethanol market, Iogen, also uses fungal enzymes. The company makes small commercial quantities of ethanol from straw at its pioneering cellulosic ethanol facility in Ottawa, Canada. As the first of its kind, this is an undoubted achievement. But even when it reaches its full capacity, which it is taking quite some time to do, it will be capable of producing only 2.5 million litres (16,000 barrels) a year, which is not a great deal.

Iogen chief executive Brian Foody is not worried. The critical steps for getting the right enzymes, the right pretreatment systems and the right yeast systems, have all been done, he says. "We just need to go through the nuts and bolts of the process." This means making sure that the demonstration plant works well enough to be replicated elsewhere — the company is looking to build new facilities in Idaho, Saskatchewan and Germany.

Iogen recently secured a $30-million investment from the bankers Goldman Sachs, bringing the total invested in it since the 1970s up to $130 million. But not all potential investors are convinced. "I don't really understand what Iogen is doing," says Matt Drinkwater, market analyst at New Energy Finance in London, UK. And his concerns are not unique to Iogen — many of the companies in the sector, he says, hold details of their processes so close to their chests that they are hard to evaluate, whether they be relatively small outfits such as Iogen or giants such as DuPont, which is also developing cellulosic ethanol technologies. Robert Wilder, who manages the Wilderhill clean energy index — the first such index to be accepted on Wall Street — agrees, but acknowledges the constraints that the chief executives of small cellulosic ethanol companies work under in terms of not tipping their hands to larger competitors.

Smells like green spirit
Perhaps because of these uncertainties over the technology's readiness, most of the money that has been invested recently in ethanol production both within the United States and beyond has been in the more traditional technologies. The sizable investments being made by agribusiness giant Archer Daniels Midland — the biggest ethanol producer in the United States and, perhaps tellingly, a company run by a chief executive who was recruited from the oil industry — seem mostly to be in traditional corn ethanol. The same applies to high-flying UK entrepreneur Richard Branson's recent investments in Ethanol Grain Processors of Tennessee and a new grain-based Californian ethanol venture, Cilion.

But there is some evidence that enthusiasm for investing in corn ethanol may be waning. Various ethanol companies that were riding high earlier in the year saw their stock slump after the summer when oil prices came down from their $78 a barrel peak.

This might mean the market is aware that, although subsidies may be able to keep it profitable for the time being, there is no way that corn ethanol can make a marked difference to long-term energy use in the United States. To make enough ethanol to start seriously displacing oil imports requires a process that can use cellulosic materials such as switchgrass, a tall prairie grass, or miscanthus, a grass imported from Asia, which provide far more tonnes of biomass per hectare than corn kernels ever can, and can be grown on land not suitable for conventional agriculture. Other sources could be farm waste or trees or newly engineered plants of some sort.. This leads to something of an investing impasse: the companies in the business at the moment make money; the ones that might take it to the next stage do not, in large part because no one has made the heavy capital investments needed for plants that make use of the technologies that have already been piloted.

One way round this is to invest across the board. This is the strategy pursued by Vinod Khosla, the Silicon Valley venture capitalist who is one of the founders of Cilion. Khosla is also involved in cellulosic technologies through two companies based in Cambridge, Massachusetts: Celunol, which has just started to operate its own pilot plant, and Mascoma, which concentrates on process engineering and which last month raised $30 million in second-round venture funding. Farther afield in the biofuels world, Khosla is also a major investor in Kergy, a company that turns biomass into fuel in a completely different 'thermochemical' way, using just heat and catalysts. For some observers, such as Dan Schrag, a geochemist at Harvard University, these approaches are more attractive than fermentation, not least because they need no witches' brews made from fiddly feedstock-specific enzyme. "When the dust clears, cellulosic ethanol is unlikely to be where we end up," he predicts.

To Drinkwater, investors such as Khosla, with their broad-based approach to the problem, are exactly what the industry needs to drive the market forwards and get it over the final bump it needs to clear before commercial success. Unfortunately, there are few such people. In their absence, many in the industry, not without self-interest, see the responsibility resting with governments to provide attractive tax incentives. "All forms of energy should face market prices that reflect the cost to society that they impose," says Foody. And to set those market prices, the right tax incentives and government mandates need to be in place.

But government incentives won't make the scientists any smarter, and observers outside the pioneering companies believe there is still basic work to be done before those companies, or their eventual competitors, make the process economically viable. Thus they welcome increasing levels of basic research from the government, such as the US Department of Energy's pledge of $250 million to set up two bioenergy research centres that are largely focused on cellulosic ethanol. The European Union has set aside E100 million (US$132 million) for cellulosic ethanol in its seventh Framework Programme on research.

Ethanol alternative
Companies large enough to afford it are also following the basic research route rather than placing early bets on particular technologies. BP has announced it will invest $500 million over ten years to fund an Energy Biosciences Institute, which will be a dedicated facility based at a university. The University of Cambridge, Imperial College London, Massachusetts Institute of Technology, Stanford, the University of California, Berkeley, and Lawrence Berkeley National Laboratory have all been mentioned as possible hosts — the final decision is expected in December.

One intriguing possibility for such research to pursue is replacing ethanol with another form of alcohol. The fact that ethanol is easy to ferment can blind people to the fact that it has almost as many inherent problems as a fuel as corn has as a feedstock. Its tendency to pick up water wherever it goes makes it hard to transport, particularly in pipelines. It's corrosive. It's more volatile than one might wish. And its energy density is low compared with regular petrol.

For these reasons, BP and DuPont are working with British Sugar to adapt their ethanol fermentation facility in East Anglia to produce butanol — an alcohol with four carbons in it, as opposed to ethanol's two. This requires training microbes in new tricks, but it is not as hard a problem as breaking down woody plant material. The East Anglia plant will use locally grown sugar beet as the feedstock, but in the long term the aim would be to use a cellulosic feedstock. "We accept that taking stuff out of the food chain is not the right way to go," says Robert Wine, a BP spokesman.

Drinkwater thinks that an industry demand for butanol as an end product could actually increase interest in cellulosic approaches. "Most refiners would be much happier to use butanol than ethanol," he says. If oil companies become confident in biofuel technologies, investors would in turn be more confident of the biofuels industry as a whole, giving the industry that elusive final shove that it seems to need.

Green shoots of growth

Green shoots of growth (Subscription)
December 7, 2006 -- Editorial, Nature

Energy from biomass is an idea whose time has returned.

Until the twentieth century, biomass was humanity's principal source of energy, heating our stoves and feeding our draught animals. Even today, roughly 10% of all our energy comes from biomass — far more than from any other renewable energy source or, for that matter, from nuclear fission.

But this use of biomass for energy supply is accompanied by many challenges. For one thing, it is often not all that renewable — the biomass sources that provide firewood to the world's poor, for example, are not being replanted. For another, it is very inefficient: gathering firewood takes a long time. The history of the past couple of centuries has been in large part one of people moving away from biomass as soon as they can afford to do so.

Three recent developments have spurred renewed interest in biomass, however. One is the need to reduce greenhouse-gas emissions. The requirement for other external energy inputs during biomass processing means that it often involves some net carbon emissions — but the amount of carbon dioxide given off by burning biomass is the same as that taken from the atmosphere by photosynthesis in the first place. If biomass projects could sequester carbon, either by enriching the soil beneath plantations or by storing any carbon dioxide produced in combustion, they could even be carbon negative — a unique selling point for this energy source.

The other two developments are the upward movement in the prices of oil and natural gas, and the related revival of concerns about the security of their supply. Most nations are seeking home-based energy sources that do not rely on political stability in the Middle East or Russia.

It seems unlikely that these factors will provide sufficient impetus to propel biomass energy to the very front rank of possible alternatives to fossil fuels. But biomass clearly has a potential role as part of a portfolio of energy sources for the twenty-first century.

If that role is to be fulfilled, two things need to happen. Nations have to build regulatory mechanisms that recognize the carbon benefits of technologies such as biomass — through emissions pricing, a carbon tax or a combination of the two. And intensive research needs to be conducted into both the efficient production of biomass and its conversion into useable energy.

One focal point for such research should be finding ways to grow biomass quickly and in an easily processed form while minimizing external inputs, such as fertilizer and pesticides. Another is the systems engineering of farms and ecosystems, finding ways to fit biomass projects into and around present land use and possible changes in farming practice.

A major attraction of biomass is that it is likely to benefit poorer countries, which tend to be in tropical regions where plants grow quickly. There is plenty of scope for more collaboration between developing countries on biomass research and development, both to meet local needs and for export.

But this requires consideration of the local and global ecological impact of biomass expansion. Vast tropical monocultures eating away at primary forests — as exemplified by the production of palm oil in Indonesia — will benefit no one, except those who profit from selling the fuel. In effect, such approaches take green subsidies from richer countries, and use them to despoil the tropics.

Similar problems afflict existing biomass programmes in the United States, where ethanol refineries often burn fossil fuel and are reliant on subsidized corn monoculture. More innovative approaches would include firing the refineries with agricultural waste, and feeding them with plants of many different species. Biomass energy should be developed energetically, but within the context of appropriate environmental policies, and using approaches that are both sustainable and cost-effective.

A twenty-first century science

A twenty-first century science (Subscription)
February 1, 2007 -- By Duncan J. Watts, Nature

If handled appropriately, data about Internet-based communication and interactivity could revolutionize our understanding of collective human behaviour.

Few would deny that many of the major problems currently facing humanity are social and economic in nature. From the apparent wave of religious fundamentalism sweeping the Islamic world (and parts of the Western world), to collective economic security, global warming and the great epidemics of our times, powerful yet mysterious social forces come into play.

But few readers of Nature would consider social science to be the science of the twenty-first century. Although economics, sociology, political science and anthropology have produced a plethora of findings regarding human social behaviour, they have been much less successful than the physical and life sciences in producing a coherent theoretical framework that can account for their discoveries. This is not because social scientists are less clever than their peers in other fields, but because social phenomena are among the hardest scientific problems to solve.

Social phenomena involve the interactions of large (but still finite) numbers of heterogeneous entities, the behaviours of which unfold over time and manifest themselves on multiple scales. It is hard to understand, for example, why even a single organization behaves the way it does without considering (a) the individuals who work in it; (b) the other organizations with which it competes, cooperates and compares itself to; (c) the institutional and regulatory structure within which it operates; and (d) the interactions between all these components. To draw an analogy with physics, one must solve the equivalent of quantum mechanics, general relativity and the multi-body problem at the same time — even string theorists don't have it that bad! Fortunately, recent developments in network science auger some hope for the future.

For the past 50 years or so, sociologists have thought deeply about the importance of interactions between people, institutions and markets in determining collective social behaviour. They have even built a language — network analysis — to describe these interactions in quantitative terms. But the objects of analysis, such as friendship ties, are hard to observe, especially for large numbers of people over extended periods of time. As a result, network data have historically comprised one-time snapshots, often for quite small groups. And most studies have relied on self-reports from participants, which suffer from cognitive biases, errors of perception and framing ambiguities.

The striking proliferation over the past decade of Internet-based communication and interactivity, however, is beginning to lift these constraints. For the first time, we can begin to observe the real-time interactions of millions of people at a resolution that is sensitive to effects at the level of the individual. Meanwhile, ever-faster computers permit us to simulate large networks of social interactions. The result has been tremendous interest in social networks: thousands of papers and a growing number of books have been published in less than a decade, leading some to herald the arrival of a 'science of networks'.

This label, unsurprisingly, has attracted its share of critics, and with some justification. Some of the ideas are not as new as sometimes advertised; many of the popular models are too simplistic to stand up to scrutiny; and even the more sober-looking empirical studies tend to use data that happen to be available, rather than obtained with a specific research question in mind. As a result, despite the avalanche of publications and breathless headlines, it is probably true that little has been learned about real social processes.

Nevertheless, the near future looks promising, especially if a few fundamental features of social networks can be emphasized. First, social networks are not static structures, but evolve in time as a consequence of the social and organizational environments in which they are embedded. Second, they are not unitary, but multiplex, meaning that people maintain a portfolio of types of ties — formal, informal, strong, weak, sexual, business and friendship — each of which serves different functions. And finally, network structure must be understood within the larger framework of collective social dynamics. People do not just interact: their interactions have consequences for the choices they, and others, make.

Studies that combine all these features are currently beyond the state of the art, but two of my group's recent projects indicate tentative progress. The first used the anonymized e-mail logs of a university community of around 40,000 people to track daily network evolution over a year as a function of existing network structure, shared activities (such as classes) and individual attributes. Dynamic data of this type may shed light on the relative roles of structural constraints and individual preferences in determining, for example, observed homogeneity of friendship circles.

The second was a Web-based experiment in which 14,000 participants were asked to listen to, rate and download songs by unknown bands. Some participants made their decisions independently, and others could see how many times the songs had been downloaded previously. Experiments of this kind measure not only the influence that individuals have over each others' decisions, but also the consequences of these individual-level effects on macro properties, such as the predictability of 'hit' products.

Clearly, the leap from these still simplistic studies to the 'big questions' of social science remains formidable. In this regard, cooperation between academic researchers and the large Internet companies who currently dominate data collection may be extremely productive. Although such collaborations will encounter challenges, including privacy and intellectual-property issues, the questions are too difficult to be left to intuition, or even experience, alone. We must start asking how the technological revolution of the Internet can lead to a revolution in social science as well.

Do We Tax Energy Enough?

Here is the link with audio and video of this great discussion as well as related papers by Hassett and Parry. I would recommend signing up for a free subscription to Resources by Resources for the Future as well as reading Greg Mankiw's blog. Below is an introduction to the discussion.

Do We Tax Energy Enough?
March 29, 2007 -- American Enterprise Institute For Public Policy Research

What are the advantages and disadvantages of carbon and gasoline taxes? Ian W. H. Parry of Resources for the Future and AEI’s Kenneth P. Green, Kevin A. Hassett, and N. Gregory Mankiw will examine the pros and cons of carbon and gasoline taxes, discuss possible levels at which they could be set, and compare taxation to regulation as an alternative way to address environmental concerns.