Environmental Capital is taking a break for New Year’s, and continuing recovery on Friday. We’ll be back Monday, Jan. 5.

With crude oil prices continuing to tumble, is OPEC doing the unthinkable—actually sticking to reduced oil-production quotas?

Now, do it again (AP)

After a half-hearted start this fall to its output cuts, OPEC seems to have discovered a newfound discipline. OPEC oil production in December came in at an average of 27.1 million barrels—less than the oil cartel’s production ceiling of 27.3 million barrels, Bloomberg reports.

OPEC members rarely stick to their formal quotas—which helps explain tough language this month by OPEC heavyweights urging everybody to comply with lower production quotas in a bid to shore up oil prices.

“It’s surprising, but we’re living in desperate times, and OPEC is doing everything they can do,” Conrad Gerber, head of Geneva-based oil-intelligence firm Petro-Logistics SA, told us.

Saudi Arabia, OPEC’s biggest producer, has led the way so far after the cartel announced a third round of production cuts Dec. 17 in Algeria. But smaller OPEC members have chimed in with a steady drumbeat of promises to make their own cuts. Libya actually aims to reduce output even more than OPEC quotas call for; Ecuador’s president went on television to order foreign oil producers to cut back there. Even poor Angola, which was counting on increasing oil production this year, just adjusted its new oil-production targets to try to meet its reduced quota.

But the real heavy lifting is yet to come: OPEC aims to take an additional 2.2 million barrels off the market starting Jan. 1. That simply won’t happen, Mr. Gerber says, given that big oil producers have already committed to much of their January output. “The cuts will start in February at the earliest,” he says, and will take a few months to get up to speed.

Even then, there’s no guarantee that OPEC’s sudden burst of discipline will be a lasting thing. Producers outside the Persian Gulf regularly backslide on production promises anyway, and collapsing oil prices have only increased short-term budget pressures on countries like Iran.

“I’m not convinced all of [the new reduction] is going to happen,” Mr. Gerber says.

With crude oil a few hours away from closing the year with its first annual decline in 7 years, OPEC’s hopes of reversing that slide and bringing oil back to the cartel’s comfort level of $75 a barrel may rest on keeping one early New Year’s resolution.

Crude oil futures continued falling Wednesday to below $37 a barrel as the drumbeat of grim economic news keeps traders bearish on any near-term recovery of demand for oil, Bloomberg reports. Falling prices are really starting to bite: Iran hopes to phase out energy subsidies that cost the country $100 billion a year, the NYT reports.

Even with cheaper oil and gasoline, U.S. automakers are trying to ride the hybrid bandwagon. Ford unveiled the new Fusion, which gets better gas mileage than direct rivals, even if not quite as good as the Prius, in the NYT. Why won’t Congress just let Detroit build profitable cars? Saddling automakers with fuel-economy standards is “an idiotic scheme that has done little to reduce gasoline demand or oil imports,” frets the WSJ edit page.

Aviation took another step toward using renewable fuels, with a two-hour jatropha-fueled test flight by Air New Zealand. The flight was longer and included a richer mix of biofuel than an earlier flight by Virgin, but questions still remain about the ability of crop-based biofuels to make up a big share of global aviation’s fuel supply. The Guardian and the NYT have the details; Green Car Congress charts the test-flight in detail.

China could be on the verge of building the world’s biggest solar-power installation, with reports of a 1 gigawatt mix of photovoltaic and thin-film solar panels on the drawing board. But there’s only funding in place for the first 3% of the project, at Venture Beat. Environmental concerns also force China to re-jig its massive, $62 billion water-diversion project, in the WSJ (sub reqd.).

News potpourri: French nuclear concern Areva seeks permission to build a uranium-enrichment facility in the U.S., which along with two other proposed plants would provide enough fuel for the whole U.S. reactor fleet, in Reuters. California sues Washington over revisions to the Endangered Species Act, in the L.A. Times. Next year could be the best ever to overhaul your house with solar panels and the like, due to a rush of fat tax credits, if only you can scrape up the cash, in the WSJ (sub reqd.).

Finally, how green is Apple? Not quite as environmentally-friendly as many other computer makers, in the WSJ (sub reqd.).

Are environmental initiatives too important to be left to voters? That’s the issue raised by the squabble over congestion pricing in San Francisco.

That would be off-peak (AP)

Making drivers pay extra to drive downtown at peak hours may have failed in New York, but surely in environmentally-friendly San Francisco congestion pricing enjoys broad support? Not quite, notes the L.A. Times:

Such a plan might sound like a slam-dunk here, in the first American metropolis to ban plastic shopping bags — where officials considered tapping pet feces for fuel instead of sending it to the landfill, the mayor banned the use of city funds to buy bottled water (too much garbage), and the bicycle lobby is a force to be reckoned with. But reaction to the plan’s recent rollout has ranged from lukewarm to downright hostile.

Plenty of local residents are aghast at the prospect of paying $6 a day to drive into—or simply pass through—the city. Local businesses are worried the proposed plan, if enacted, would drive off shoppers and force an exodus to cheaper pastures.

Public opposition to congestion pricing in San Francisco echoes a theme that pops up whenever environmental concerns collide with greenbacks: Environmental ideas sound great, until people see the pricetag. California’s statewide emissions-reduction scheme is dogged by the same sort of public skepticism, some opinion polls suggest.

San Francisco spent years studying London’s pioneering congestion-pricing plan. Early opposition there turned to majority support within a few years, and both traffic and auto emissions have been reduced since the plan started.

But that’s not to say Londoners want to expand the plan to include even more neighorboods; the new mayor scrapped the proposed extension after public outcry this year. Other big British cities like Manchester are also having second thoughts about introducing pricing schemes after asking people what they thought.

So perhaps the key to introducing environmental plans that make life more expensive is simply not to ask in the first place, Tree Hugger notes:

Some people are questioning whether this kind of public initiative should be the subject of a vote at all. The London congestion charge was implemented by the former Mayor without a vote and has been a great success, despite the fears of business.

Something to think about as the next administration grapples with rejuvenating the economy and keeping its ambitious promises to start curbing greenhouse-gas emissions.

Crude oil futures fell below $40 as demand-side fears trumped geopolitical worries, and oil is poised for its first annual price decline in seven years. But the consensus outlook for next year is for oil to creep back toward $60 as OPEC production cuts take effect, both in Bloomberg.

Lower oil prices are humbling Hugo, Vladmir, and Mahmoud, notes the WSJ edit page, and the recipe for keeping oil prices low and those countries hobbled isn’t “wind farms or tougher emissions standards,” but simply a stronger dollar. Cheaper oil has also humbled Gazprom, whose ambitions of becoming the world’s biggest company have fallen by the wayside, in the NYT. But cheaper oil also hurts countries like Angola which rode a crude boom part-way out of poverty, in the WSJ (sub reqd.).

Computer giant Dell’s quest for carbon neutrality offers lessons for an economy aiming at the same goal, notes the WSJ (sub reqd.). Since it doesn’t tally all the emissions produced by suppliers or consumers, and relies on sometimes dubious offsets to clean up its carbon footprint, “the company is only neutralizing about 5% of the greenhouse gases that go into the making and use of its products.”

Energy’s rollercoaster ride in 2008 offers some other lessons, notes Energy Outlook—namely, that fundamentals are fundamental, demand as much as supply, and that higher oil prices don’t automatically make clean energy a slam dunk.

Greentech Media reviews the ups and downs for solar power in 2008, from policy miscues around the world to the long-awaited arrival of cheaper polysilicon. Wind power’s had its own ups and downs, especially in India, but battered turbine maker Suzlon keeps the faith, in The Guardian. FPL is the “Wal-Mart of wind power,” poised to clean up from increased government support and a consolidating playing field, at Barron’s.

Weatherizing old homes is the true low-hanging fruit for improving energy efficiency, and it actually delivers some of those promised green jobs, in the NYT. Some of those green jobs are also in the garage, as an increasing number of mechanics convert hybrid cars to plug-in hybrids to boost mileage, in the WSJ (sub reqd.).

The Tennessee coal-ash spill is loaded with nasty stuff, details the NYT, including more than 20 tons of arsenic and more than a million pounds of barium. But coal’s not going away: Sunflower Power in Kansas vows to try again to build twice-blocked coal plants in the Jayhawk state, in AP via the KC Star. Funding is still flowing in for coal-to-gas startups as well, at Venture Beat.

David Roberts at Grist is not buying the clean-coal-as-savior argument for American energy policy: “Only from an incredibly myopic perspective does a gigantic end-of-pipe waste containment technology for coal look like a reasonable energy solution.”

Finally, the big ball in Times Square gets even bigger and more environmentally-friendly, notes Green Inc. So why are they leaving it on all year?

Crude oil futures jumped for the second straight day to more than $42 due to violence in the Middle East and Chinese stockpiling of oil, helping offset weaker demand, Bloomberg reports.

The search for fresh sources of oil is igniting a showdown between Big Oil and Big Water in the Rockies, because no one knows just how much water will be needed to get oil out of shale, in the L.A. Times. The credit crunch is denting the pipeline for pipeline makers, as plans for new energy-infrastructure investment are shaved, in the WSJ (sub reqd.).

Cratering energy and commodity prices push Kuwait to nix a $17 billion deal with Dow Chemical which would have given the chemical giant access to cheap gas and cash to finance its takeover of Rohm and Haas, in the FT and the WSJ (sub reqd.).

As it searches for the right energy blueprint, the U.S. can do better than to create an alternative-energy bubble, argues nuclear-power advocate William Tucker in the WSJ (sub reqd.): “A prudent position for Republicans should be: ‘Carbon limits, yes, subsidies, no.’ If a carbon tax or cap-and-trade auction is imposed, use the revenues to reduce other taxes so it won’t cripple the economy. The thing to avoid is a wild, congressionally driven speculative boom in alternative energy.” New MIT research shows that a price on carbon won’t do much to spur renewables, but will push clean coal, at MIT Technology Review.

California’s newfound power over national environmental policy harkens back to Texas politicians’ dominance of Washington in the 1950s, notes the WaPo. What will that mean? The WSJ edit page worries about over-zealous environmental regulation: “Green groups have a history of rejecting cost-benefit analysis as a matter of ideology more than utility. They don’t trust business, and they believe that their own specific environmental goals are a higher public good than whatever is lost to society from exorbitant costs. But there is a price for everything in life, and reasonable regulation ought to include a judgment about relative costs and benefits.”

Despite all the economic doom and gloom, 2008 was not a bad year for clean tech. Earth2Tech rounds up the year’s highlights from a clean-tech perspective, including the election victory of Barack Obama, new clean-energy legislation, and record levels of investment.

Finally, energy efficiency doesn’t mean hairshirt lifestyles. German architects build “passive houses” that stay T-shirt warm inside without even using a furnace, in the NYT.

Environmental Capital is taking a break Dec. 22-26. We’ll resume posts on Monday, Dec. 29. Until then, happy holidays.

If you’ve got rugrats of a certain age, you don’t have to wait till January to gauge the country’s new environmental tenor. Just watch your kid’s school Christmas play.

The grinch was green

“Santa Goes Green” is the theme of elementary-school productions across the country, apparently involving plans to retool Santa’s sleigh into a more efficient electric model and getting Rudolph’s nose up to code, efficiency-wise. That’s got some people grinchlike already, by the looks of it:

I was not prepared when I was tricked into sitting through a half hour long political statement on “Global Warming.” I was not appreciative that my grand-daughter is being taught this unproven theory of mankind destroying the Earth, and that even Santa must do something to prevent its self-destruction.

Actually, Santa’s role is key. In a new children’s book with the same title, a little boy eschews toys and urges Santa Claus to throw his considerable weight behind the global warming fight in order to save his (presumably herbivorous) polar bear friend.

The book’s author, Anne Margaret Lewis, told USA Today that inspiration struck after reading a magazine story on melting glaciers with her 6-year old son:

“He asked how we could help the polar bears, so we started going around the house every time we left a room and shut the lights off. Then we would say, ‘We just saved another polar bear,’ ” she says. “I was trying to convince him that you can make a difference, and it worked.”
That got Lewis to wondering whether she could write a book that would pass along the feeling. “I wanted it to be about polar bears because of how it came to be,” she says. “And then I thought, who would a child think is the most powerful person who could help him do that? Santa. The story just started evolving.”

The book ends with a note from Santa to the “children of the world,” directing them to a website where the newly-green elf promises some climate-saving tips. But for folks horrified at the thought of indoctrinated children dashing off checks to Al Gore, the tips aren’t terribly ambitious or controversial: “Turn off the tap water while you brush your teeth; turn off the lights and the TV when you are through with them.”

No word yet on what kind of electricity is powering the web site’s servers.

Image credit.

President-elect Barack Obama’s initial Cabinet choices mollifed conservatives and disappointed liberals because of their centrist credentials—not to say outright continuity with the Bush administration.

But all the change Sen. Obama promised on the campaign trail has been packed into his nominations for his energy and environment team, which marks a massive break with the current administration.

In the last week, the president-elect has named a prospective new energy secretary; Environmental Protection Agency head; White House climate czar; interior secretary; and a green-jobs promoting labor secretary. The latest names to surface: Harvard professor John Holdren for presidential science adviser and Oregon State marine biologist Jane Lubchenco to head the National Oceanic and Atmospheric Administration.

Representing a collective pushback against the Bush administration’s environmental and energy record—especially when it comes to global warming—the resume-laden roster finally has progressives popping their holiday Champagne several days early.

Matt Yglesias, noting the new names, figures the new roster will bring the brain power to drive big and lasting change: “These two plus [DOE nominee] Steven Chu creates a very impressive Team of Scientists who hopefully will be listened to when pushes start coming to shove.”

Take Dr. Holdren, tapped to be the presidential science adviser. An outspoken advocate of tough action to fight climate change, Dr. Holdren promises to make climate change a much bigger White House priority than it’s been so far. He recently described U.S. policy on global warming as akin to “being in a car with bad brakes driving toward a cliff in the fog.”

Calling Dr. Holdren “another terrific choice,” Joe Romm is smiling as well: “[P]utting Holdren in charge of the ‘bully pulpit of science’ is just what the nation and the planet need if we are to have any chance of avoiding catastrophic warming.”

The latest nominations, coming on the heels of the previous picks, together spell an administration determined to regulate greenhouse-gas emissions and push for alternative sources of energy, even as a source of job creation.

A different question altogether is whether Team Obama’s energy and climate posse will be enough to overcome all the hurdles facing a wholescale reinvention of the energy mix of a coal-dependent nation that’s now smack in the middle of a recession.

The Bush administration rushed a $17.4 billion bottle of oxygen to the agonizing patients in Motown, giving General Motors and Chrysler until March 31 to prove they are “viable” companies. Does that mean greener?

$17 billion antifreeze (AP)

After the Senate failed to pass legislation providing short-term financial help to Detroit automakers, the Bush administration heeded their calls for cash with $13.4 billion now and the promise of an additional $4 billion early next year. The short-term government help comes with strings—the car makers will have to return the money if the companies are worthless by the end of the next quarter.

How to get to “viable”? President Bush presented the rescue package through the lens of a financial restructuring. He said automakers have to overhaul their retirement obligations, restructure their huge debt load, and rejig auto worker salaries to bring them in line with non-union auto makers. (Video here.)

Detroit says “viable” will come as part of a longer-term, industrial restructuring—with a special emphasis on building more fuel-efficient cars, including hybrids. General Motors thanked President Bush twice in a brief statement this morning, and said: “This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success. It will lead to a leaner, stronger General Motors, a GM that is… fully committed to leading in energy-saving vehicles and technologies.”

Ford Motor Co. didn’t need the money, but thanked President Bush anyway for bailing out its rivals. Ford says its own transformation “will continue to accelerate through aggressive restructuring actions and the introduction of more high-quality, safe and fuel-efficient vehicles – including a broader range of hybrid-electric vehicles and the introduction of advanced plug-in hybrids and full electric vehicles.” The company plans to invest $14 billion in fuel efficiency over the next seven years.

But the question remains the same as it was before the bailout. Retooling Detroit to make an environmentally-friendlier car won’t happen in a single quarter. During a recession, that kind of restructuring could become tougher to pull off at all, especially as oil and gasoline prices continue to fall, erasing memories of $4 gasoline.

Will the near-death experience and the $17.4 billion ultimatum be enough to both convince and enable Detroit to change its ways?