“We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.

If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.”

Jimmy Carter in 1977. Drawn from this speech….

Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.

It is a problem we will not solve in the next few years, and it is likely to get progressively worse through the rest of this century.

We must not be selfish or timid if we hope to have a decent world for our children and grandchildren.

We simply must balance our demand for energy with our rapidly shrinking resources. By acting now, we can control our future instead of letting the future control us.

Two days from now, I will present my energy proposals to the Congress. Its members will be my partners and they have already given me a great deal of valuable advice. Many of these proposals will be unpopular. Some will cause you to put up with inconveniences and to make sacrifices.

The most important thing about these proposals is that the alternative may be a national catastrophe. Further delay can affect our strength and our power as a nation.

Our decision about energy will test the character of the American people and the ability of the President and the Congress to govern. This difficult effort will be the “moral equivalent of war” — except that we will be uniting our efforts to build and not destroy.

I know that some of you may doubt that we face real energy shortages. The 1973 gasoline lines are gone, and our homes are warm again. But our energy problem is worse tonight than it was in 1973 or a few weeks ago in the dead of winter. It is worse because more waste has occurred, and more time has passed by without our planning for the future. And it will get worse every day until we act.

The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation’s independence of economic and political action is becoming increasingly constrained. Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce.

The world now uses about 60 million barrels of oil a day and demand increases each year about 5 percent. This means that just to stay even we need the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years. Obviously, this cannot continue.

We must look back in history to understand our energy problem. Twice in the last several hundred years there has been a transition in the way people use energy.

The first was about 200 years ago, away from wood — which had provided about 90 percent of all fuel — to coal, which was more efficient. This change became the basis of the Industrial Revolution.

The second change took place in this century, with the growing use of oil and natural gas. They were more convenient and cheaper than coal, and the supply seemed to be almost without limit. They made possible the age of automobile and airplane travel. Nearly everyone who is alive today grew up during this age and we have never known anything different.

Because we are now running out of gas and oil, we must prepare quickly for a third change, to strict conservation and to the use of coal and permanent renewable energy sources, like solar power.

The world has not prepared for the future. During the 1950s, people used twice as much oil as during the 1940s. During the 1960s, we used twice as much as during the 1950s. And in each of those decades, more oil was consumed than in all of mankind’s previous history.

World consumption of oil is still going up. If it were possible to keep it rising during the 1970s and 1980s by 5 percent a year as it has in the past, we could use up all the proven reserves of oil in the entire world by the end of the next decade.

I know that many of you have suspected that some supplies of oil and gas are being withheld. You may be right, but suspicions about oil companies cannot change the fact that we are running out of petroleum.

All of us have heard about the large oil fields on Alaska’s North Slope. In a few years when the North Slope is producing fully, its total output will be just about equal to two years’ increase in our nation’s energy demand.

Each new inventory of world oil reserves has been more disturbing than the last. World oil production can probably keep going up for another six or eight years. But some time in the 1980s it can’t go up much more. Demand will overtake production. We have no choice about that.

But we do have a choice about how we will spend the next few years. Each American uses the energy equivalent of 60 barrels of oil per person each year. Ours is the most wasteful nation on earth. We waste more energy than we import. With about the same standard of living, we use twice as much energy per person as do other countries like Germany, Japan and Sweden.

One choice is to continue doing what we have been doing before. We can drift along for a few more years.

Our consumption of oil would keep going up every year. Our cars would continue to be too large and inefficient. Three-quarters of them would continue to carry only one person — the driver — while our public transportation system continues to decline. We can delay insulating our houses, and they will continue to lose about 50 percent of their heat in waste.

We can continue using scarce oil and natural to generate electricity, and continue wasting two-thirds of their fuel value in the process.

If we do not act, then by 1985 we will be using 33 percent more energy than we do today.

We can’t substantially increase our domestic production, so we would need to import twice as much oil as we do now. Supplies will be uncertain. The cost will keep going up. Six years ago, we paid $3.7 billion for imported oil. Last year we spent $37 billion — nearly ten times as much — and this year we may spend over $45 billion.

Unless we act, we will spend more than $550 billion for imported oil by 1985 — more than $2,500 a year for every man, woman, and child in America. Along with that money we will continue losing American jobs and becoming increasingly vulnerable to supply interruptions.

Now we have a choice. But if we wait, we will live in fear of embargoes. We could endanger our freedom as a sovereign nation to act in foreign affairs. Within ten years we would not be able to import enough oil — from any country, at any acceptable price.

If we wait, and do not act, then our factories will not be able to keep our people on the job with reduced supplies of fuel. Too few of our utilities will have switched to coal, our most abundant energy source.

We will not be ready to keep our transportation system running with smaller, more efficient cars and a better network of buses, trains and public transportation.

We will feel mounting pressure to plunder the environment. We will have a crash program to build more nuclear plants, strip-mine and burn more coal, and drill more offshore wells than we will need if we begin to conserve now. Inflation will soar, production will go down, people will lose their jobs. Intense competition will build up among nations and among the different regions within our own country.

If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.

But we still have another choice. We can begin to prepare right now. We can decide to act while there is time.

That is the concept of the energy policy we will present on Wednesday. Our national energy plan is based on ten fundamental principles.

The first principle is that we can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.

The second principle is that healthy economic growth must continue. Only by saving energy can we maintain our standard of living and keep our people at work. An effective conservation program will create hundreds of thousands of new jobs.

The third principle is that we must protect the environment. Our energy problems have the same cause as our environmental problems — wasteful use of resources. Conservation helps us solve both at once.

The fourth principle is that we must reduce our vulnerability to potentially devastating embargoes. We can protect ourselves from uncertain supplies by reducing our demand for oil, making the most of our abundant resources such as coal, and developing a strategic petroleum reserve.

The fifth principle is that we must be fair. Our solutions must ask equal sacrifices from every region, every class of people, every interest group. Industry will have to do its part to conserve, just as the consumers will. The energy producers deserve fair treatment, but we will not let the oil companies profiteer.

The sixth principle, and the cornerstone of our policy, is to reduce the demand through conservation. Our emphasis on conservation is a clear difference between this plan and others which merely encouraged crash production efforts. Conservation is the quickest, cheapest, most practical source of energy. Conservation is the only way we can buy a barrel of oil for a few dollars. It costs about $13 to waste it.

The seventh principle is that prices should generally reflect the true replacement costs of energy. We are only cheating ourselves if we make energy artificially cheap and use more than we can really afford.

The eighth principle is that government policies must be predictable and certain. Both consumers and producers need policies they can count on so they can plan ahead. This is one reason I am working with the Congress to create a new Department of Energy, to replace more than 50 different agencies that now have some control over energy.

The ninth principle is that we must conserve the fuels that are scarcest and make the most of those that are more plentiful. We can’t continue to use oil and gas for 75 percent of our consumption when they make up seven percent of our domestic reserves. We need to shift to plentiful coal while taking care to protect the environment, and to apply stricter safety standards to nuclear energy.

The tenth principle is that we must start now to develop the new, unconventional sources of energy we will rely on in the next century.

These ten principles have guided the development of the policy I would describe to you and the Congress on Wednesday.

Our energy plan will also include a number of specific goals, to measure our progress toward a stable energy system.

These are the goals we set for 1985:

–Reduce the annual growth rate in our energy demand to less than two percent.

–Reduce gasoline consumption by ten percent below its current level.

–Cut in half the portion of United States oil which is imported, from a potential level of 16 million barrels to six million barrels a day.

–Establish a strategic petroleum reserve of one billion barrels, more than six months’ supply.

–Increase our coal production by about two thirds to more than 1 billion tons a year.

–Insulate 90 percent of American homes and all new buildings.

–Use solar energy in more than two and one-half million houses.

We will monitor our progress toward these goals year by year. Our plan will call for stricter conservation measures if we fall behind.

I cant tell you that these measures will be easy, nor will they be popular. But I think most of you realize that a policy which does not ask for changes or sacrifices would not be an effective policy.

This plan is essential to protect our jobs, our environment, our standard of living, and our future.

Whether this plan truly makes a difference will be decided not here in Washington, but in every town and every factory, in every home an don every highway and every farm.

I believe this can be a positive challenge. There is something especially American in the kinds of changes we have to make. We have been proud, through our history of being efficient people.

We have been proud of our leadership in the world. Now we have a chance again to give the world a positive example.

And we have been proud of our vision of the future. We have always wanted to give our children and grandchildren a world richer in possibilities than we’ve had. They are the ones we must provide for now. They are the ones who will suffer most if we don’t act.

I’ve given you some of the principles of the plan.

I am sure each of you will find something you don’t like about the specifics of our proposal. It will demand that we make sacrifices and changes in our lives. To some degree, the sacrifices will be painful — but so is any meaningful sacrifice. It will lead to some higher costs, and to some greater inconveniences for everyone.

But the sacrifices will be gradual, realistic and necessary. Above all, they will be fair. No one will gain an unfair advantage through this plan. No one will be asked to bear an unfair burden. We will monitor the accuracy of data from the oil and natural gas companies, so that we will know their true production, supplies, reserves, and profits.

The citizens who insist on driving large, unnecessarily powerful cars must expect to pay more for that luxury.

We can be sure that all the special interest groups in the country will attack the part of this plan that affects them directly. They will say that sacrifice is fine, as long as other people do it, but that their sacrifice is unreasonable, or unfair, or harmful to the country. If they succeed, then the burden on the ordinary citizen, who is not organized into an interest group, would be crushing.

There should be only one test for this program: whether it will help our country.

Other generation of Americans have faced and mastered great challenges. I have faith that meeting this challenge will make our own lives even richer. If you will join me so that we can work together with patriotism and courage, we will again prove that our great nation can lead the world into an age of peace, independence and freedom.

Jimmy Carter, “The President’s Proposed Energy Policy.” 18 April 1977. Vital Speeches of the Day, Vol. XXXXIII, No. 14, May 1, 1977, pp. 418-420.

Amidst all the posturing about oil prices, it’s easy to assume no one saw $130 $135 $140 oil coming. Politicians urgently demand we open up drilling off coasts and in Alaska so that we can have a little more oil…10 years from now..maybe…and if OPEC doesn’t take a countervailing amount of oil off the market. In the meantime?

Now, here’s something really scary and it comes not from the sheiks, but from the accountants. The US Securities and Exchange Commission is seeking to classify oil sands as oil reserves, according to the Financial Times. ($) Why would they do this? The obvious reason is that ExxonMobil, ChevronTexaco, and ConocoPhillips don’t have enough real oil in the ground, so they have to find something else to gussy up their balance sheets.

In the 1960’s, 85% of the world’s proven reserves were open to exploration by the Big Oil. Today, with nationalization and other lockups, perhaps 10% remains. In 2004, Shell was caught playing games with its replenishment-to-production ratios, a key figure in an oil company’s long term sustainability and equity valuation. After Shell endured a management shakeup and restated its reserves downward by 20 percent, other majors adjusted their numbers downward as well

When they do find oil, it’s often in a bad place (e.g., Nigeria) or hideously expensive to extract (e.g., Jack Field, Gulf of Mexico) or clamped under an adverse production sharing agreement (e.g., Sakhalin), or some combination (Alberta oil sands). The absence of good drilling prospects has caused oil companies to invest their staggering profits profits in stock repurchases or just to pass them through as dividends.

For example, last year, ExxonMobil made $39 billion in profits; $34 billion went into share buybacks or dividends–neither of which produces a drop of oil. To give them the benefit of the doubt, if they could have used more to find oil, perhaps they would have.

Without access to reserves, oil is just a really tough long-term business, but one upon which our very civilization depends.

The new SEC action is in some ways encouraging, and in others, deeply frightening. Let’s get the frightening part out of the way: Alberta oil sands are a wretched energy source of last resort, and have been left alone (until now) for good reason. To get the oil, you have to scrape millions of tons of frozen muck out of the ground, spin it, and heat it. You have to extract heavy metals and dump them. You have to divert enormous amounts of water and pollute it, and then put it somewhere. The whole process may be causing epidemic cancer rates for those unfortunately enough to live downstream. The resultant oil from Albert has higher sulfur content than normal oil, so it’s even nastier when burned. The global warming consequences of this process are grievous. This is not light sweet crude. It’s horrible stuff that will almost certainly expedite planetary extinction. But it’s not under Arabia, there’s lots of it, and it’s all we got. So let’s count it!

Now that oil sands are counted as oil, it makes it may help to mask Big Oil’s predicament, at least to the uninformed, and perhaps to hasten and legitimize the extraction of oil from sands, at the expense of much more sensible renewable projects.

So much for the bad news, Mrs. Lincoln. The good news? Other proposed regulations “allow companies to disclose their ‘probable’ and ‘possible’ reserves to investors, compared to only “proved” reserves currently,” according to the FT. Perhaps this will facilitate greater transparency, as opposed to the byzantine extrapolations and calculations undertaken by Matt Simmons in his book Twilight in the Desert, which is perhaps the foundational book about peak energy.

The timing and rationale of the SEC’s action is curious. Why do it now? This benevolent change is being undertaken to counteract the pernicious influence of evil speculators, the Bad Guys of the Month. Says the SEC: “The more that precise, first-hand information from oil and gas companies is available to investors and the marketplace, the less that the marketplace is forced to rely solely (sic) upon information provided by speculators.”

There’s a piece of logic! Were it not for those speculators, the oil companies would have the courage to come forth and give us the whole unoiled truth! Thanks to these proposed regulations, Big Oil will discover gushers of valor and pony up the straight poop.

These days, it’s common when someone is looking to mete out responsibility for some misdeed, for those defenders of the accused to decry “playing the blame game.” While speculators are indeed probably contributing to the crisis, one cannot help but wonder about the oil companies and their politicians who, through acts of omission and commission, got us to where we are today–addicted to oil, but without a Plan B.

All in, coming just now, this is another disturbing development. What you measure, they say, is what you get. Now that we’re measuring oil sands, let’s hope we don’t get them any more than we are today.

See http://www.rechargepod.com/gotwind_orange_recharge_pod.htm

Plow through the excessive flash graphics to get to an interesting product….

Tortuous, adj. [M.E. Anglo-Fr.: L. tortosus < tortus, pp. of torquere, to twist], 1. full of twists, turns, curves, or windings; winding; crooked; hence, 2. not straightforward; devious; specifically deceitful; immoral, n. the 2007 ExxonMobil Corporate Citizenship Report.

English gives us two words, torturous and tortuous, that don’t mean quite the same thing although they share identical etymological DNA. It doesn’t take much to see how our enlightened European forebears could derive the word “torture” from the verb meaning “to twist.” But now, one beeswax-candle-fueled Enlightenment later, we have ExxonMobil, and the subject on the rack is the not some heretic’s shoulder joint, but the truth and, many would argue, the survival of Planet Earth.

ExxonMobil’s 2007 Corporate Citizenship Report (printed on 100% recycled paper, but NOT with soy inks) landed in my mailbox from the CorporateRegister in London, the world’s largest distributor of sustainability reports. Presumably, it also mails coal from Alequippa, Pennsylvania to Newcastle, England, but I have no evidence of that.

Since we are on the fourth grade subject of “citizenship”, let’s carry through with the infantilization theme and use “tortuous” and “torturous” in one sentence. Here’s my offering: “Reading the tortuous 2007 ExxonMobil Corporate Citizenship Report is a torturous experience.”

Why? Let’s open the cover….

On Environmental Performance:

Companies are responsible for managing the environmental impact of their operations. The issue of greenhouse gas emissions is being considered by a broader community that includes not only energy companies, environmental groups, and scientists, but also energy consumers, policy makers, and the media. ExxonMobil supports an increased awareness of how energy shapes our world as well as discussions on policies that seek to reduce greenhouse gas emissions. We continue to take action to reduce greenhouse gas emissions in our operations and to develop new technologies that enable more efficient energy use. We are also committed to participating in the continuing public dialogue on this important issue.

What a circumlocution of a circumlocution! I already am in orbit!

Companies are responsible for managing the environmental impact of their operations. The issue of greenhouse gas emissions is being considered by a broader community that includes not only energy companies, environmental groups, and scientists, but also energy consumers, policy makers, and the media. ExxonMobil supports an increased awareness of how energy shapes our world as well as discussions on policies that seek to reduce greenhouse gas emissions. We continue to take action to reduce greenhouse gas emissions in our operations and to develop new technologies that enable more efficient energy use. We are also committed to participating in the continuing public dialogue on this important issue.

Diffuse, deny, deliberate. Have you ever sat through a freshman philosophy seminar? I have, and 30 years on, the recovery progresses. One would expect something more beefy from gung-ho oilmen. Simone de Beauvoir, no wildcatter she, wrote with much more conviction (and more transitive verbs and concrete nouns) than these reticent roustabouts. They treat this subject as if they were tiptoeing through a landmine-laden oil field in 1991 Kuwait. What do they fear might explode?

Now, to this mushspeak let’s add a dash of courage, a sprinkling of principles, respect for truth, and passing concern for something beyond self-interest. Our ExxonMobil makeover would read as follows:

Companies [Say "ExxonMobil." There are no people in this paragraph! Is anyone home? Exxon seems intent on stepping away from this topic. Why might they see the topic "environment" as a gruesome traffic accident?] are responsible for managing [reducing] the environmental impact of their operations [and products]. The issue [It's a little more than an issue at this point. The elimination of the one-cent piece is an "issue." Environmental collapse in the air, on land and in oceans, the empowerment of evil dictators, collapsing economies, out-of-control defense spending, wars and genocide over oil, a horrific balance of payments, sacrifice of national principles in pursuit of oil--those are more than "issues". Most of the informed world believes "planet-threatening disaster in the making" would be more apt, and not strident enough.] of greenhouse gas emissions [climate change] is being considered [acted on with desperate resolve] by a broader community that includes not only energy companies [with ExxonMobil hopelessly in the rear], environmental groups [that Exxon habitually combats], and scientists [whose work ExxonMobil has been caught paying to pervert or thwart], but also energy consumers [who have no choice], policy makers [who are recipients of Exxon's self-serving largesse], and the media [which are mostly asleep]. ExxonMobil supports an increased awareness [no, action] of how energy shapes our world as well as discussions [the time for which has long since passed] on policies [though not actions] that seek to [will] reduce greenhouse gas emissions. We continue to take action [Do tell!] to reduce greenhouse gas emissions in our operations [But not beyond our operations; and only because oil is so expensive and this will increase profits] and to develop new technologies that enable more efficient energy use. [Last year Exxon spent $34 billion of its $38 billion windfall profits on stock buybacks and dividends. Dear reader, do you see any technologies in there? ExxonMobil is less transparent on this subject of new technologies than the rest of the Big 5.] We are also committed to participating [leading] in the continuing public dialogue [More talk! how about "urgent search for solutions"] on this important issue [planet threatening-crisis].

Under the environment section of the report, the only achievement noted is the assertion that the company has spent $1 billion to improve efficiency and reduce emissions since 2004. In perspective, that’s 1/140th of its profits over this period. There is nothing in there about building the next planetary fuel system, which, in the face of peak oil would lead to…

…the next section of this report, which bears the ironic heading “a long-term perspective.” This is an odd choice, not only because Exxon’s actions and inactions imperil all our our long term perspectives, but more narrowly, because Exxon has been unable to replace its annual oil consumption with new discoveries for most of the last 30 years.

We next see a section called “communication and engagement.” Last week, when I attended the Yale Governance Forum, an officer of the State of Connecticut’s pension fund asked a recently retired Exxon official on a panel why his company had failed to respond to her governance inquiries for three years’ running. He said, “It’s an issue we talk about and take seriously.”

The “talk about” piece is somewhat true. One needs only read about the recent Rockefeller uprising to see how hollow the rest of this claim, like many of ExxonMobil’s positions, truly are. I could not read more. It was like torture.

This week I had the distinct pleasure of spending a few hours with Nell Minow, the co-founder of The Corporate Library, and a Principal of Lens, a $100-million investment firm that took positions in underperforming companies and used shareholder activism to increase their value. BusinessWeek Online called her the “queen of Good Corporate Governance.”

Thus qualified, now know that she said that two things happened in governance this spring that will be seen as “monumental, absolutely seismic in the history of corporate governance.

First, a Washington Mutual director, Mary Pugh, resigned summarily after an angry shareholders’ meeting in April. The head of the board’s finance committee, Pugh stood accused of “fail[ing] to recognize and act in a timely manner on the risks to shareholder value presented by the housing bubble”, according to activist investor CtW, of insulating executive compensation from the impacts of the bank’s bad fortunes, and of questionable independence given the bank’s business relationship with her money management firm.

“There was always this thought that withholding a vote was a symbolic gesture,” Nell said. “AIG should have done this. I have been arguing for some time that Directors & Officers’ insurance premiums should be adjusted for directors who lose votes at shareholders’ meetings. It would reinforce activists and the silent majority who are told that their votes do not matter.”

The second event was the resignation of Jim Johnson from the Obama VP selection committee. As has been widely reported, “[Johnson] had received what may have been reduced rates on loans from Countrywide Financial Corp., a mortgage lender with business ties to Fannie Mae.”

The LA Times added: “He also has been criticized for compensation and other perks he received as an official of mortgage giant Fannie Mae and for compensation decisions made while he was a board member of United HealthCare, one of the nation’s biggest medical insurers.”

In this instance, however, she said bad corporate governance is “a Zoe Baird-nanny issue.” It was very significant to that a corporate governance issue could rapidly summarily derail a prominent government position.

Finally, a plug. While Nell says governance is great, her real passion is movies. Visit her site, Movie Mom at Beliefnet.

Over 500 people attended the Sustainable Brands ‘08 conference, just concluded in Monterrey, CA.

The website is impressive and well worth a visit. The one attendee with whom we spoke came back suitably impressed. In the early days, sustainable products seemed to be developed by hippies working in barns in Ashland, Oregon. What is striking about the new generation of such products is the slickness of the language and the marketing thinking, much of it taken and adapted from large non-sustainable brands that still dominate the marketplace.

You cannot argue with success or results. The new meme seems to be, “We’re better, not different,” so this is a good indicator or the long-term viability of better products and services.

As a sample of the quality of thought, consider the analysis presented in the Conference blog by an environmental consultant and a Morrison & Forster lawyer. Here are the Six Deadly Sins of Greenwashing:

The Sin of Fibbing – misleading customers about the actual environmental performance of products. A good example is “Energy Star Certified” – Energy Star does not actually certify products. The most grievous sin, fibbing is thankfully also the rarest, present in only 1% of claims reviewed, according to Case.

The Sin of No Proof – occurs when a company is unable to provide proof of claims. This is definite potential target for the FTC and could be subject to penalization.

The Sin of Irrelevance – refers to claims that are factually correct but essentially meaningless. For example, noting that a product is “CFC-free” when CFCs have been banned for years takes advantage of consumers’ lack of information.

The Sin of Hidden Tradeoff – focuses consumers on a single issue while ignoring or hiding other tradeoffs, causing the buyer to perceive the product’s environmental performance as better then it actually is.

The Sin of Vagueness – refers to claims that use meaningless terms. For example, one 100% petroleum brand listed “100% natural” on its label. When a person at the toll-free number was asked to substantiate the claim, the representative replied that oil comes out of the ground and was therefore “natural.”

The Sin of Lesser of Two Evils – occurs as a result of attempts to differentiate products as having the best environmental performance in their class. But can a case really be made for organic cigarettes?

Marc Gunther is one of the best progressive business writers. His blog describes a recent interview with Jim Rogers, the CEO of Duke Energy, on the subject of the Warner-Lieberman carbon credit bill which is likely destined to die in the Senate:

Jim Rogers…opposes Lieberman-Warner because it would require his company and others that aburn coal to spend billions buying permits. That seems fair, on the face of it; these companies are the polluters, after all. But as he notes, regulators urged utilities to build coal plants in the 1970s and 1980s. Their higher costs will be passed on to customers. And the revenues generated by auctioning permits are designated for a long list of Senators’ pet projects, some only tenuously related to climate change. It’s the ultimate in earmarks, he argues. Agree with him or not, it’s a potent political argument.

Nothing in life is simple.

Gunther indicates he is “coming around to Peter Barnes’s (Working Assets) cap and dividend plan, which would either auction permits or impose a carbon tax. Companies would raise prices to cover these costs, thereby providing a conservation incentive to consumers. The funds would be distributed on a per capita basis to citizens, like the Alaskan oil royalty program.

Not everyone is enamored with the plan. In lieu of action, at least there is talk. For now, talk is better than nothing at all.

It really didn’t take a Rhodes Scholar to see none of the four major oil companies have not been able to replenish the amounts oil they’ve been removing from the ground in any of the last 30 years. 4 companies X 30 years each = 120 company-years. 0 for 120 constitutes a trend, no?

While the car makers have geared up to sell in China–now the world’s second-largest consumer of oil and fastest-growing new car market–they didn’t see a compelling reason to connect those two dots. In fact, the interests of auto manufacturers and oil companies have long been joined at the pump. This Freudian image is a perfectly apt metaphor of their perennially cozy relationship.

Here we find ourselves on May 24, 2008. As we are wont to say these days, Who knew? The following “dispatches from the front” come from a single article in CNN. Given the long lead times available to predict what has happened, and the long lead times required to adapt to the new conditions, it represents as devastating an indictment of the current short-term-profit oriented market system as one could find.

• “The cars are literally just sitting, and it doesn’t matter how much you sell them for,” says Los Angeles used car wholesaler Jorge Fernandez, speaking of the SUVs and trucks nobody wants anymore. “It’s amazing. I’ve never seen it this bad, ever.”

• The really large SUV’s with V-8 engines that can get as little as 12 miles per gallon in the city — like the Cadillac Escalade, Ford Expedition and Chevy Suburban — are dropping in value by the thousands.

• Owners might owe $20,000 or more when the vehicle is now worth $12,000. It’s similar to an upside-down mortgage, and it may not make sense to try a trade-in. “What they might be doing is spending thousands of dollars to save hundreds,” says Jack Nerad, the executive director of Kelley Blue Book’s kbb.com. “Because if you make a trade, you’re most often going to spend more to make that move than you would just sucking it up and paying the extra gasoline prices.”

• Nationally, for the first four months of this year, truck and SUV sales are down a collective 24.8 percent. SUV sales plummeted 32.8 percent while pickups dipped 19.9 percent.

• Ford announced Thursday it was shifting production away from its longtime hallmark of pickups and SUVs in favor of smaller cars. In making the decision, Ford said it believes gas prices will remain in the range of $3.75 to $4.25 a gallon through the end of 2009. [Editor's Note: Ford has never yet found a way to build such cars profitably.]

Courts in California and Connecticut indicted 38 people on an intercontinental phishing scheme that had stung thousands of victims. “Phishing” refers to the practice of sending fraudulent emails to obtain bank information from gullible account holders.

The complexity of this Romanian-based phishing operation was extraordinary. Over a million fraudulent emails were unleashed from Europe, destined for the US. When the victims responded by inputting personal data on a fake bank website hosted on a commandeered computer in Minnesota, the data were harvested and sent to accomplices in New York. They then magnetically imprinted the credit and debit card data on other credit cards and even hotel keycards. “Runners” would then test them at ATMs. If the cards successfully pulled a person’s account balances, they were used to withdraw funds at other machines with very high withdrawal limits.

Some of the money was wired to Romania. The balance repaid the American alleged thieves.

This is how illegal business is done these days. It’s a far cry from bootlegging, though the same RICO statutes, originally written for Sicilian mafiosi, were used to bring this phishing party to justice. One wonders whether Al Capone, a low tech guy if ever there was one, could keep up.

The bipolar nature of the energy crisis took us down last year (rising oil prices), up at New Years (biofuels!), and back down again (biofuels = starvation). For example, the European Union is being pressed to reconsider aspects of its biofuels mandate as well as certain sources of biofuel (e.g., palm oil), because research indicates allegedly profound negative impacts not only on the environment, but also on food supplies. While that gets worked out, the political imperative of starving citizens is not to be minimized.

Could we be left only with Hobson’s choices? No Plan B?

Welcome, Jatropha curcus. Jatropha is a succulent plant native to South America that needs little water, lousy soil, and little to no fertilizer. It’s poisonous, but the bad news stops there. Its seeds yield 40% oil, which can easily be turned into biodiesel. It’s easily twice as productive as corn for fuel purposes, and needs far fewer inputs.

Jatropha can be intermingled with other crops; a New York Times story tells of a Malian farmer who doubled his income by planting every seventh row with jatropha. The plant halts soil erosion. Jatropha likes two feet of rain in a year, but it can withstand three years of drought by dropping its leaves. Best of all, it can be grown on heretofore unarable land in places like the Sahel.

BP and the British biofuel firm D1 Oils have invested millions of dollars in jatropha cultivation. Governments in India, Cambodia, and other developing nations are pushing Jatropha hard, as a simultaneous solution to energy needs, hunger, soil depletion, and rural poverty. One acre will yield about 325 gallons of biodiesel per year.

June 9-11 the world’s enthusiasts will huddle at the second Annual JatrophaWorld confrence in Miami. It figures to be an interesting event: green sustainability zealots will mingle with sellers of get-rich-quick business plans. So far, the problems with Jatropha include no apparent show-stoppers, only things that can be solved with a bit of research.