Gov. Rounds announced today that an area near Elk Point is the leading contender for a new oil refinery. It is not clear what the plant will refine oil into. If it is gasoline it will be the first such new plant in about 30 years. The plant will generate about 1,800 jobs, which is good for our state.
Prof. Deneen has much to say, and little of it hopeful, about the future of the world price of oil. See here, here, and here. The picture he paints explains in part why the dollar is so weak versus other currencies. Having just spent a great deal of time in Great Britain, I can tell you that the dollar gets you about half a pound, or put differently, you can look at the price in pounds and double it to get the dollar amount. Thus, having rented a car (Vauxhall Astra, car nuts, 1.6 liter version), we paid about $7 a gallon for gas (roughly .969 pounds per liter, which by my calculations is over $7 a gallon at the exchange rate). Take note of this item from Prof. Deneen:
The easiest way to explain this is EROEI: "energy returned on energy invested." In its heyday in the 1940s, the U.S. was getting the equivalent of 100 barrels of oil for every barrel it invested in retrieving it. Nowadays we're fortunate if we get around 15:1, which is still pretty good. Compare to some other EROEI numbers: wind, 5:1; solar, 4:1; tar sands, 1.5:1; hydrogen, 1:1; and, my favorite, ethanol, approximately -1:1. That's right - the alternative energy future being pushed by our political leaders is a net energy loser, once you calculate the amount of petroleum inputs needed for fertilizer, pesticides, and processing. Can anyone say "government subsidies"?
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