Rolling Stone Article

A few months back, Jeff Goodell, a contributing editor at Rolling Stone, contacted me with some questions about ethanol. Jeff’s name may be familiar to those in the energy business, as he is the author of Big Coal. (Jeff has authored several books, including Trapped, which resulted in an appearance on Oprah, Sunnyvale, and The Cyberthief and the Samurai, which is about hacker Kevin Mitnick.) What started out as a piece in Rolling Stone on Vinod Khosla ended up being a critical look at ethanol. And some of my comments even survived the editor’s hatchets:

Ethanol Scam: Ethanol Hurts the Environment And Is One of America’s Biggest Political Boondoggles

Don’t let the soft title fool you. Jeff pulls no punches. My comments are on Pages 2 and 3. Once again, Khosla’s scenario in which the world runs on carbohydrates is followed by mine in which I argue that you can’t mandate technology. The fact that this is in Rolling Stone should help build credibility with my wife and kids. It’s not the cover of Rolling Stone, but the story is on the cover (upper left). In fact, the cover goes to my all-time favorite band:

I can’t take credit for the best quote, though. I have to give that honor to Dave Juday. When asked about the 36 billion gallons of alternative fuels mandated by the energy bill, Juday said:

“It’s like trying to solve a traffic problem by mandating hovercraft. Except we don’t have hovercraft.”

Now that’s funny. I wish I had said that.

Incidentally, at one point during our exchanges, Jeff told me that Martin Eberhard, the CEO of Tesla Motors was reading this blog, and my exchanges with Vinod Khosla. Jeff wrote:

On a personal note, you’ll be amused to know that your name came up in a conversation I had a week or so ago with Martin Eberhard, the CEO of Tesla Motors (maker of $100,000 electric roadster). He was talking about the problems with ethanol, and he said something like, “There’s been a great debate about Vinod’s ideas on the web, on a blog called R-Squared. Have you seen that? It’s great! I want to hire that guy!” So if things don’t work out in Scotland, you can always head to Silicon Valley!

Yes, I was amused. Jeff wrote that on March 10th, and I have been waiting almost half a year for a chance to work it into a post. It makes me wonder just who might drop in now and again.

Tesla Motors. Well, I wouldn’t want to live in Silicon Valley, but I certainly think electric cars are the way we ultimately have to go. Maybe Tesla could just hire me to endorse the car and trash the opposition. Or maybe that’s been my angle all along, and is the reason I am arguing for an electric transportation infrastructure. It’s my exit strategy from Big Oil.

Martin, I presume my check is in the mail.

Google Solar, Hydrogen, and Farm Bills

I wanted to briefly comment on several issues. Some of them deserve their own essays, but I am too pressed for time.

Google Solar

If you are into solar, Google’s Solar Panel Project is incredibly cool. They provide real time data on their solar energy production. One thing that I have noticed is that the assumption of peak power times 5 hours to get the overall daily solar production appears to be too conservative. For instance, according to the link above, yesterday power peaked at 877 KW at 1 p.m., but total energy production yesterday was 7021 KWh. I have to multiply by 8 hours to get that. In fact, that’s been a pretty consistent theme this month. It may be that 5 hours is the appropriate multiplier in the winter, and that may be where it comes from. I will have to make sure I track their production this winter (as well as California demand).

Hydrogen

A number of people have written to me at various times and asked why I never debunked hydrogen. The reason is that I felt like it was already thoroughly debunked. When President Bush pushed hydrogen in his 2003 State of the Union address, I was actually working with hydrogen in a GTL application. Hydrogen does some interesting things with flame speed and auto-ignition temperatures that I was exploring. But I didn’t know all that much about the issues of hydrogen as a large scale transportation fuel. So, I thought “That sounds pretty good.” Then, I went to work the next day, dug out the DOE’s hydrogen road map, saw what the problems were, and where the technology stood, and I concluded that there would be no hydrogen economy any time soon - probably not in my lifetime. I mean, the technology has to leap huge gulfs in several areas, which is much different than only have one or two technical challenges to resolve. So, I didn’t give hydrogen much more consideration after that.

But it won’t die:

Hydrogen can replace gasoline, scientist contends

FLINT - Stanford Ovshinsky, founder and chief scientist of Energy Conversion Devices Inc. in Rochester Hills, told the Flint Rotary Club on Friday that the world has to convert to alternative forms of energy.

He said current internal-combustion engines in cars and trucks can be converted to run on hydrogen.

With hydrogen, he said, there’s no pollution, no climate-change issues.
“All you need for fuel is water,” he said “You don’t need the Mideast.”

All you need is water? Is he serious? How about an energy source to electrolyze the water? Why don’t we get our hydrogen from water right now (instead of from natural gas)? You need that as well. Free hydrogen doesn’t just hang about, waiting to be mined. Anyway, I was going to write a longer rebuttal, but my friend Chris Nelder beat me to it:

Fuel Cells and Hydrogen Are No Panacea

I’m going to make a prediction today: you will never drive a hydrogen fueled car.

Although hydrogen does indeed have some benefits in certain applications, it’s my task today to separate the reality of useful fuel cells from the hydrogen hype.

That may seem like a bold statement to you now, but by the end of this article, you’ll understand why.

I think he did demonstrate the point, so I will merely refer you to his essay for a good debunking.

Those Darn Farmers

I say that with tongue in cheek, because I grew up on a farm that my family still owns and operates. But this one struck me as funny:

House Farm Bill Includes Production Fee For ‘98-99 Oil Leases

WASHINGTON -(Dow Jones)- The U.S. House of Representatives included a measure that would impose a fee on production from controversial 1998-99 oil and gas leases in a farm bill it passed Friday.

Lawmakers have been trying since last the Congress to force the companies to renegotiate the leases, which omit royalty price thresholds, saying the omission could end up costing tax payers $10 billion in lost royalty payments.

The Government Accountability Office estimates that around $1 billion in royalties has already been lost as a result of the price-thresholds omissions, and that they could cost taxpayers an additional $9 billion in the future.

Although six companies - including BP PLC (BP), Royal Dutch Shell PLC (RDSA), ConocoPhillips (COP) and Marathon Oil Corp. (MRO) - have agreed to pay royalties on the leases on production from October 2006, they only represent a fraction of the total lease owners.

Around 40 companies representing 80% of the production haven’t agreed to renegotiate the leases, including Exxon Mobil Corp. (XOM), Total SA (TOT), Chevron Corp. (CVX) and Anadarko Petroleum Corp. (APC), according to Interior Department data. Democrats have been seeking royalty payments for all output from the leases.

While I do note that my own company has agreed to pay royalties, I can’t get past the irony that a farm bill would attempt to rectify the situation. Perhaps in the next energy bill, we can get rid of those darn sugar subsidies. I mean, come on. I can argue a case for corn subsidies. I don’t want our corn farmers to be put out of business by cheap imports (even though we get subsidized high-fructose corn syrup as part of the deal). But sugar? Give me a break. Aren’t we fat enough already without subsidizing the problem?

A California Solar Dilemma

After grappling with the thought experiment of replacing all of our electricity consumption with solar panels, the problem came into focus. This problem seems simple, but it isn’t trivial. As I mentioned, I have seen people approach this problem in several different ways, and after tackling it myself I believe that all of those approaches are wrong. So, I decided to produce a graph to help illustrate exactly how I see the problem:

Typical Solar Cell Power Curve vs. Actual California Demand Curve on July 12, 2003

The way I came up with this graph was by modeling the solar cell power curve based on Google’s Solar Panel Project, which they update daily for solar electricity produced. You can presume at this point some hypothetical number of panels to produce 36 GW at peak power. The reason for 36 GW is that I found a presentation that showed actual load behavior in California on a summer day in 2003, and peak power demand was 36 GW.

It became clear to me why some people are approaching this from different directions, and why neither answer is actually correct. One approach looks at peak demand, and installs enough solar panels to meet that. But as you can see, peak demand doesn’t correspond to peak output. The second approach looks at the demand for the entire day, and then attempts to produce that in 4 or 5 hours. That isn’t correct either. You need to produce the required daily output in the total area under the solar power curve. But, you need to be able to store it. And due to storage losses, you actually need to produce quite a bit more than you expect to be consumed in any particular day.

That, I believe, is the correct way to solve the problem. In all of the approaches I have seen as I have studied the problem, I haven’t seen this specific approach. Thoughts? Just eye-balling it, it looks to me - presuming you have a workable storage solution - that you would require about double the power of the peak demand number in order to produce the required energy each day. In other words, if that solar power curve topped out at 70 GW or so, that would be enough energy produced in a day to meet that demand curve.

I don’t have time to work on this any more right now, but I will come back to it. My chapter is due on August 1, and I am still tidying it up. But I think the next approach is to either integrate the area under the solar output curve, or approximate it as a square wave - and then develop the relationship to daily demand.

A Solar Thought Experiment

Note: This is a work in progress. I am modifying the calculations as I get constructive feedback. Credit goes to several people for that. I think I have figured out the best approach to solving this problem in my latest effort.

A comment over at The Oil Drum got me to thinking about what it might take to replace all of our current electricity consumption with solar power. There was an error in that calculation, and some of the information was dated, so I decided to do the calculation myself.

Here is the question. Considering only our electrical usage, how many square miles of solar panels would it take to supply that much demand? And how much would it cost? I actually have no idea how it’s going to turn out, but I want to document the results.

According to the EIA, electricity capacity in 2005 was 882,125 megawatts. That is the capacity required to meet peak demand. Actual demand was somewhat less at 746,470 megawatts.

I have been browsing through some performance numbers for solar cells, and I am finding pretty consistently that one square foot of solar cell can generate about 12.5 watts at peak power. Here is an actual cell from GE (PDF download) that produces 200 watts in 15.68 square feet (12.75 watts per square foot). So, let’s conservatively say 12.5 watts per square foot. To match U.S. electricity capacity would then require square footage equal to 882,125 million watts/12.5 watts/sq ft, or 70.57 billion square feet. This is equivalent to 2,531 square miles, or an area of 50 by 50 miles of nothing but solar panels.

That’s a lot of area to be sure, but it’s not an immediate deal-breaker. Next, I want to know how many square feet are available on houses in the U.S. This is going to be tougher, because only south-facing surfaces are going to relevant.

According to U.N. statistics, in 1997 there were around 100 million houses in the US (another PDF download). Given a population of 300 million, that sounds reasonable. In order to supply our electrical needs on rooftops, that requires the average house to have 70.57 billion square feet/100 million houses, or 70.57 square feet. That’s a square of 8.4 feet on a side. That seems feasible, but a lot of roofs won’t have any south-facing area. Still, it isn’t completely out of the question that we might supply our (current) electrical demands with just rooftop solar power. Of course we would still require conservation and higher efficiencies (both in solar cells and in our electrical items).

And as some readers point out, we have a lot more than rooftops. Of course we do. That wasn’t the point. I just wanted to see if there was enough rooftop space on houses. But we have lots of space on commercial buildings as well.

How Much Will It Cost?

I will take a stab at this as well. This is a bit more difficult, because it isn’t just the cost of 10 billion solar panels. We need to include all of the associated equipment plus the costs of installation. According to this site, you can probably assume conservatively $7 a watt. In large quantities, it might be less. But let’s go with $7. Taking our 882,125 million watt capacity number times $7 then gives $6.2 trillion. If the solar panels last 20 years (probably more, but then I am ignoring maintenance costs), that’s $309 billion a year (ignoring the time value of money, which is very simplistic).

To frame that problem, right now the U.S. uses 21 million barrels of oil a day, which is costing us $65 * 365 * 21 million = $500 billion per year (and climbing).

Anyway, it’s just a thought experiment, but I found it helpful to go through it so I have an idea of the challenge in front of us. There are many caveats. We can produce electricity from lots of other sources (hydro, wind, nuclear, biomass, even coal for now), so solar doesn’t have to assume the entire load any time soon. However, I haven’t even considered the increase in electrical demand that would be required from a mass move to electrical transport.

Definitely a Manhattan Project, but not one that is clearly out of reach. Just difficult, and in need of the right kind of leadership.

I will probably expand this calculation in the future to consider contributions from solar thermal, wind, hydropower, etc. In other words, determine how much solar would realistically have to contribute to offset just our fossil-fuel derived electricity.

What’s Wrong with Nuclear Power?

A couple of days ago I was reading the CNN/YouTube Democratic presidential debate transcript. Of course I am always interested to hear what the candidates have to say about energy. There were a lot of good comments, and the usual spattering of dumb comments. But I won’t dissect them right now. What got me to thinking were the comments of John Edwards (on Page 2):

EDWARDS: Wind, solar, cellulose-based biofuels are the way we need to go. I do not favor nuclear power. We haven’t built a nuclear power plant in decades in this country. There is a reason for that. The reason is it is extremely costly. It takes an enormous amount of time to get one planned, developed and built. And we still don’t have a safe way to dispose of the nuclear waste. It is a huge problem for America over the long term.

I also don’t believe we should liquefy coal. The last thing we need is another carbon-based fuel in America. We need to find fuels that are in fact renewable, clean, and will allow us to address directly the question that has been raised, which is the issue of global warming, which I believe is a crisis.

Following this, Barack Obama said that he favored including nuclear power in the mix, and Hillary Clinton said she was agnostic about nuclear power. She did play the “oil” card, which is to say that she thinks the solution to our energy problem is to take from oil and then let the government figure out how to spend that money on alternatives.

I have been accused occasionally of having various anti-nuclear views. This is amusing, given that I have never written anything negative about nuclear power. In fact, until this post, I didn’t even have a tag in this entire blog on nuclear energy. The main reason is that I am not well-versed in the pros and cons. My understanding is that the main pro is that nuclear can provide an abundant source of energy for quite some time. This is also a reason that I favor a transition to an electric infrastructure: We are going to run low on liquid fuels long before we run low on the ability to produce electricity.

As I understand it, the primary negative is still that we don’t have a good solution for dealing with nuclear waste. Obviously, we can’t just pile up waste indefinitely, and I am not sure how reactors around the world handle this problem. And of course historically there have been the occasional Three Mile Island and Chernobyl, which ensures that nobody is going to want a nuclear reactor in their backyard.

So, who is correct? My feeling is that we will desperately need nuclear energy in the not too distant future. But what about the waste problem? How do other countries deal with the waste problem? I presume France, with all of their nuclear reactors, must have a solution that the population is comfortable with.

For an extremely negative view of nuclear power, see the recently published essay by antinuclear activist Rebecca Solnit:

Reasons Not to Glow

CNN also presents a negatively slanted view in a just-published article, but they do discuss the waste issue a bit:

Going nuclear

But my own view is that we are going to need it in the mix.

What’s Wrong with Nuclear Power?

A couple of days ago I was reading the CNN/YouTube Democratic presidential debate transcript. Of course I am always interested to hear what the candidates have to say about energy. There were a lot of good comments, and the usual spattering of dumb comments. But I won’t dissect them right now. What got me to thinking were the comments of John Edwards (on Page 2):

EDWARDS: Wind, solar, cellulose-based biofuels are the way we need to go. I do not favor nuclear power. We haven’t built a nuclear power plant in decades in this country. There is a reason for that. The reason is it is extremely costly. It takes an enormous amount of time to get one planned, developed and built. And we still don’t have a safe way to dispose of the nuclear waste. It is a huge problem for America over the long term.

I also don’t believe we should liquefy coal. The last thing we need is another carbon-based fuel in America. We need to find fuels that are in fact renewable, clean, and will allow us to address directly the question that has been raised, which is the issue of global warming, which I believe is a crisis.

Following this, Barack Obama said that he favored including nuclear power in the mix, and Hillary Clinton said she was agnostic about nuclear power. She did play the “oil” card, which is to say that she thinks the solution to our energy problem is to take from oil and then let the government figure out how to spend that money on alternatives.

I have been accused occasionally of having various anti-nuclear views. This is amusing, given that I have never written anything negative about nuclear power. In fact, until this post, I didn’t even have a tag in this entire blog on nuclear energy. The main reason is that I am not well-versed in the pros and cons. My understanding is that the main pro is that nuclear can provide an abundant source of energy for quite some time. This is also a reason that I favor a transition to an electric infrastructure: We are going to run low on liquid fuels long before we run low on the ability to produce electricity.

As I understand it, the primary negative is still that we don’t have a good solution for dealing with nuclear waste. Obviously, we can’t just pile up waste indefinitely, and I am not sure how reactors around the world handle this problem. And of course historically there have been the occasional Three Mile Island and Chernobyl, which ensures that nobody is going to want a nuclear reactor in their backyard.

So, who is correct? My feeling is that we will desperately need nuclear energy in the not too distant future. But what about the waste problem? How do other countries deal with the waste problem? I presume France, with all of their nuclear reactors, must have a solution that the population is comfortable with.

For an extremely negative view of nuclear power, see the recently published essay by antinuclear activist Rebecca Solnit:

Reasons Not to Glow

CNN also presents a negatively slanted view in a just-published article, but they do discuss the waste issue a bit:

Going nuclear

But my own view is that we are going to need it in the mix.

What’s Wrong with Nuclear Power?

A couple of days ago I was reading the CNN/YouTube Democratic presidential debate transcript. Of course I am always interested to hear what the candidates have to say about energy. There were a lot of good comments, and the usual spattering of dumb comments. But I won’t dissect them right now. What got me to thinking were the comments of John Edwards (on Page 2):

EDWARDS: Wind, solar, cellulose-based biofuels are the way we need to go. I do not favor nuclear power. We haven’t built a nuclear power plant in decades in this country. There is a reason for that. The reason is it is extremely costly. It takes an enormous amount of time to get one planned, developed and built. And we still don’t have a safe way to dispose of the nuclear waste. It is a huge problem for America over the long term.

I also don’t believe we should liquefy coal. The last thing we need is another carbon-based fuel in America. We need to find fuels that are in fact renewable, clean, and will allow us to address directly the question that has been raised, which is the issue of global warming, which I believe is a crisis.

Following this, Barack Obama said that he favored including nuclear power in the mix, and Hillary Clinton said she was agnostic about nuclear power. She did play the “oil” card, which is to say that she thinks the solution to our energy problem is to take from oil and then let the government figure out how to spend that money on alternatives.

I have been accused occasionally of having various anti-nuclear views. This is amusing, given that I have never written anything negative about nuclear power. In fact, until this post, I didn’t even have a tag in this entire blog on nuclear energy. The main reason is that I am not well-versed in the pros and cons. My understanding is that the main pro is that nuclear can provide an abundant source of energy for quite some time. This is also a reason that I favor a transition to an electric infrastructure: We are going to run low on liquid fuels long before we run low on the ability to produce electricity.

As I understand it, the primary negative is still that we don’t have a good solution for dealing with nuclear waste. Obviously, we can’t just pile up waste indefinitely, and I am not sure how reactors around the world handle this problem. And of course historically there have been the occasional Three Mile Island and Chernobyl, which ensures that nobody is going to want a nuclear reactor in their backyard.

So, who is correct? My feeling is that we will desperately need nuclear energy in the not too distant future. But what about the waste problem? How do other countries deal with the waste problem? I presume France, with all of their nuclear reactors, must have a solution that the population is comfortable with.

For an extremely negative view of nuclear power, see the recently published essay by antinuclear activist Rebecca Solnit:

Reasons Not to Glow

CNN also presents a negatively slanted view in a just-published article, but they do discuss the waste issue a bit:

Going nuclear

But my own view is that we are going to need it in the mix.

What’s Wrong with Nuclear Power?

A couple of days ago I was reading the CNN/YouTube Democratic presidential debate transcript. Of course I am always interested to hear what the candidates have to say about energy. There were a lot of good comments, and the usual spattering of dumb comments. But I won’t dissect them right now. What got me to thinking were the comments of John Edwards (on Page 2):

EDWARDS: Wind, solar, cellulose-based biofuels are the way we need to go. I do not favor nuclear power. We haven’t built a nuclear power plant in decades in this country. There is a reason for that. The reason is it is extremely costly. It takes an enormous amount of time to get one planned, developed and built. And we still don’t have a safe way to dispose of the nuclear waste. It is a huge problem for America over the long term.

I also don’t believe we should liquefy coal. The last thing we need is another carbon-based fuel in America. We need to find fuels that are in fact renewable, clean, and will allow us to address directly the question that has been raised, which is the issue of global warming, which I believe is a crisis.

Following this, Barack Obama said that he favored including nuclear power in the mix, and Hillary Clinton said she was agnostic about nuclear power. She did play the “oil” card, which is to say that she thinks the solution to our energy problem is to take from oil and then let the government figure out how to spend that money on alternatives.

I have been accused occasionally of having various anti-nuclear views. This is amusing, given that I have never written anything negative about nuclear power. In fact, until this post, I didn’t even have a tag in this entire blog on nuclear energy. The main reason is that I am not well-versed in the pros and cons. My understanding is that the main pro is that nuclear can provide an abundant source of energy for quite some time. This is also a reason that I favor a transition to an electric infrastructure: We are going to run low on liquid fuels long before we run low on the ability to produce electricity.

As I understand it, the primary negative is still that we don’t have a good solution for dealing with nuclear waste. Obviously, we can’t just pile up waste indefinitely, and I am not sure how reactors around the world handle this problem. And of course historically there have been the occasional Three Mile Island and Chernobyl, which ensures that nobody is going to want a nuclear reactor in their backyard.

So, who is correct? My feeling is that we will desperately need nuclear energy in the not too distant future. But what about the waste problem? How do other countries deal with the waste problem? I presume France, with all of their nuclear reactors, must have a solution that the population is comfortable with.

For an extremely negative view of nuclear power, see the recently published essay by antinuclear activist Rebecca Solnit:

Reasons Not to Glow

CNN also presents a negatively slanted view in a just-published article, but they do discuss the waste issue a bit:

Going nuclear

But my own view is that we are going to need it in the mix.

What’s Wrong with Nuclear Power?

A couple of days ago I was reading the CNN/YouTube Democratic presidential debate transcript. Of course I am always interested to hear what the candidates have to say about energy. There were a lot of good comments, and the usual spattering of dumb comments. But I won’t dissect them right now. What got me to thinking were the comments of John Edwards (on Page 2):

EDWARDS: Wind, solar, cellulose-based biofuels are the way we need to go. I do not favor nuclear power. We haven’t built a nuclear power plant in decades in this country. There is a reason for that. The reason is it is extremely costly. It takes an enormous amount of time to get one planned, developed and built. And we still don’t have a safe way to dispose of the nuclear waste. It is a huge problem for America over the long term.

I also don’t believe we should liquefy coal. The last thing we need is another carbon-based fuel in America. We need to find fuels that are in fact renewable, clean, and will allow us to address directly the question that has been raised, which is the issue of global warming, which I believe is a crisis.

Following this, Barack Obama said that he favored including nuclear power in the mix, and Hillary Clinton said she was agnostic about nuclear power. She did play the “oil” card, which is to say that she thinks the solution to our energy problem is to take from oil and then let the government figure out how to spend that money on alternatives.

I have been accused occasionally of having various anti-nuclear views. This is amusing, given that I have never written anything negative about nuclear power. In fact, until this post, I didn’t even have a tag in this entire blog on nuclear energy. The main reason is that I am not well-versed in the pros and cons. My understanding is that the main pro is that nuclear can provide an abundant source of energy for quite some time. This is also a reason that I favor a transition to an electric infrastructure: We are going to run low on liquid fuels long before we run low on the ability to produce electricity.

As I understand it, the primary negative is still that we don’t have a good solution for dealing with nuclear waste. Obviously, we can’t just pile up waste indefinitely, and I am not sure how reactors around the world handle this problem. And of course historically there have been the occasional Three Mile Island and Chernobyl, which ensures that nobody is going to want a nuclear reactor in their backyard.

So, who is correct? My feeling is that we will desperately need nuclear energy in the not too distant future. But what about the waste problem? How do other countries deal with the waste problem? I presume France, with all of their nuclear reactors, must have a solution that the population is comfortable with.

For an extremely negative view of nuclear power, see the recently published essay by antinuclear activist Rebecca Solnit:

Reasons Not to Glow

CNN also presents a negatively slanted view in a just-published article, but they do discuss the waste issue a bit:

Going nuclear

But my own view is that we are going to need it in the mix.

This Week in Petroleum 7-25-07

Just a quick update on the highlights of the weekly EIA report:

U.S. crude oil refinery inputs averaged over 15.8 million barrels per day during the week ending July 20, up 172,000 barrels per day from the previous week’s average and the highest average since the week ending September 22, 2006. Refineries operated at 91.7 percent of their operable capacity last week.

Utilization is creeping back up, but still a good 5 percentage points short of where it normally is this time of year.

U.S. crude oil imports averaged nearly 10.4 million barrels per day last week, up 3,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.4 million barrels per day, or 66,000 barrels per day more than averaged over the same four-week period last year.

Oil imports are not quite in record territory, but remain strong.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.7 million barrels per day, the highest weekly average ever.

Wow! I just wonder if this isn’t an accounting artifact after last week’s inventory numbers came in really low.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) declined by 1.1 million barrels compared to the previous week. However, at 351.0 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories increased by 0.8 million barrels last week, but remain below the lower end of the average range.

Now, imagine that without record gasoline imports and you can see why imports have really kept us out of trouble this year (not that we are out of the woods yet).

Over the last four weeks, motor gasoline demand has averaged nearly 9.7 million barrels per day, or 1.2 percent above the same period last year. Distillate fuel demand has averaged nearly 4.1 million barrels per day over the last four weeks, up 2.8 percent compared to the same period last year. Jet fuel demand is down 3.0 percent over the last four weeks compared to the same four-week period last year.

I continue to be amazed that these gasoline prices have not impacted demand.

I spent a little while trying to resolve an apparent discrepancy in This Week in Petroleum. The report shows OECD oil stocks near the bottom of the average range. I watch this pretty closely, and I was sure they were in the middle of the range. That’s why I have been saying that Saudi can still rightly say that inventories are OK, therefore there is no need to increase production. But then I finally read for comprehension and noticed that the graph was only for OECD Pacific stocks. These are indeed close to the bottom of the range. Of course this is where Saudi has been enforcing a lot of their production cuts, so they may indeed soon have to open the taps (if they can), especially if oil prices continue to test $80/bbl.