Oil tumbled in July 2015 like it has not done since the crisis of 2008. West Texas Internediate (WTI) is trading at $47.12 a barrel on July 31.
CNBC reported the drop in prices for July at 21%.
What this all means is that US motorists and truckers are driving more and consumption of liquid hydrocarbon fuels is way up over last year. In turn this means that US CO2 emissions for 2015 could again increase over 2014 as they did in for the previous two years (2013 and 2014). This implies that Dr. Moniz the secretary of Energy will have struck out with three strikes. Dr. Moniz is very busy defending the Iran deal and not very busy in lowering CO2 emissions. He killed coal and thought viola the CO2 emissions would plummet. Ernie The Coal Killer could be a sequel movie to The Bloomdoggle – Celsius 1960.
The price of copper, silver, gold, platinum, steel, and just about every commodity has dropped. This is great news for folks building solar farms. The capital required to build a 100 megawatt solar farm in say the Atacama Desert has dropped from $280 million to $160 million in three years. The solar panels did not drop much in cost but the balance of plant which is steel frames, copper wires, inverters, transformers, concrete foundations, and steel fences has dropped like crazy. I doubt that commodities will regain their former prices but some are betting that copper which now trades at $2.35 a pound will return to $3.50 a pound. Oil and iron ore prices will likely stay low for quite some time to come.
The drop in the cost of commodities is actually good for consumers but bad for the atmosphere. Low prices mean higher consumption which means higher carbon emissions. As an example electric power generation with high sulfur bunker fuel is now the low cost option for many developing countries and projects to burn renewable biomass to generate power are now uncompetitive against bunker fuel. Bunker fuel can be bought is Asia for $285 a metric ton.
Talking of Bunkers and less expensive rebar and concrete, it may just be time to build a shelter in my backyard in case of nuclear war. The president who is Neville Chamberlain on Sominex will allow the Ayatollah to have his bombs in a few years. A nuclear fallout shelter in a backyard can now be built for half the price it would have cost three years ago. I could build a swimming pool in the backyard but we have no water to fill it with and a swimming pool provides no shelter against mushroom clouds.
I wonder if Elon Musk will be the man to bring a Fallout Shelter to rich folks’ homes just as he has brought an expensive electric car and an expensive powerwall battery. He could be chairman of TSLA, SCTY, and KYAG.