Pipe dreams or the winds of hope
By Dan Lauck
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Remember when service stations were running out of 2s for their gas price signs? Soon it could be 3s.
Three weeks ago, for the first time, the price of crude oil in the U.S. hit $60 a barrel.
"A year ago at this time ... in July of last year it was 40. Today, it's 62," says John Olson, a noted energy analyst. He says nobody saw this coming, but his research tells him it's not just a blip on the time line.
Oil is not coming down. Gasoline is going up.
"Unless people start riding bicycles or motor scooters," says Olson. "It's not a happy prospect out there."
Happy, no. But is this the point at which the world finally turns? When you find yourself buying the family scooter with the DVD for the kids? Or when bike lanes become as crowded as the freeways?
Well, maybe not.
Across the street from the gleaming tower that Chevron now calls home there is, on the 40th floor, a company of true believers in the wind.
"This project here is an $82 million project," says John Calloway referencing a map. "All those X's are our turbines."
In the long history of man's attempts to harness the wind, Calloway believes this will be one of man's successes.
"Wind energy, I believe," he says. "Could generate 15 to 20 percent of our electrical needs."
Calloway was running an oil exploration company 10 years ago when he realized the end was coming for big oil.
"I knew at that point that we were dealing with scraps," says Calloway.
It doesn't belch fire and require a wind depletion allowance, but wind power has its problems, too.
Think of the country's power system as 11 separate neighborhoods, each criss-crossed with neighborhood streets. But there is no transmission system like the interstate highway to get it across the country.
"South Dakota and North Dakota are like hermetically sealed. You get to the borders and there's no transmission beyond," says Calloway. "We need to have a long-term strategy."
If there was a long-term strategy it could lead to a bio-diesel plant.
It's basically taking animal fats and vegetable oils and turning it into the same carbon chain as petroleum diesel.
Steve McGuire runs the company appropriately named Safe Fuels, who says it's so safe you can drink it?
"This is vegetable oil. It's Crisco out of your kitchen," says McGuire.
Any vegetable oil, any fat will do.
It's evaporated, separated and zapped by a microwave in what they believe is the most advanced process in the world.
"They make wonderful stories, great cocktail party conversation," says Olson, who remains a skeptic.
But he adds, "if there ever was a time to develop … fuel cells and super conductive lines, it is right now."
With gasoline prices headed for the 3s, investors are itching to invest in the next generation's spindle top.
But which one is it? The only thing we know for sure is what one it isn't ... bike lanes.