Oil 1 Peak Oil 21


A2 Germany Economy – Wind Energy



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A2 Germany Economy – Wind Energy


High Oil Prices Spur’s German investment in wind energy
Jason McManus, Daily Galaxy Editorial Staff Writer, 6/7/08

‘The Rise in Oil Price Spurs Germany to Build Massive Wind Farms’, http://www.dailygalaxy.com/my_weblog/2008/07/the-german-gove.html


The German government has announced plans to build 30 wind farms in the North and Baltic Sea north of Germany with 2,000 windmills producing 11,000 megawatts of electricity. Each facility will cost $1.57 billion. The first farm will become reality this year. By 2030, a total of 25,000 megawatts are supposed to be produced when the grid of interconnected wind farms is finalized to increase the level of autonomy regarding foreign energy and oil supply. The wind turbines will be erected offshore in water up to 40 meters deep and connected to the mainland using cables, which are up to 100 km long. The rise in the oil price has made this all the more pressing and the interest from investors shows that it is economically viable. Germany's Bundestag or lower house of parliament passed a law last month aimed at increasing the amount of power generated by renewable energy sources like wind or solar power to 30 percent from the current 14 percent by 2020. Wind energy currently makes up seven percent of the nation's energy consumption. The new law was part of a long-awaited package aimed at fighting climate change agreed by Chancellor Angela Merkel's left-right coalition government. The government has agreed to honor a decision to close the country's 17 nuclear power plants by 2020 but remains divided over the issue.

A2 German Economy – Environment


Rising oil prices and emissions are cited reasons for Germany’s continuing environmental fiscal reform
Stefan Bach et al, Department of Economics, University of Oldenburg, 1-29-02

“The effects of environmental fiscal reform in Germany: a simulation study“


These findings are, of course, dependent on the underlying assumptions. One assumption which may be thought to have a certain impact on the results relates to world energy prices and to the exchange rate. The sharp increases in crude-oil prices have repeatedly been cited as an argument against continuing the environmental fiscal reform. Therefore, a sensitivity analysis with different assumptions concerning crude-oil prices and exchange rates was conducted (30 USD/bbl and 2.20 DM/USD instead of 20 USD/bbl and 1.75 DM/USD). In this scenario, the effect on emissions (relative to the altered reference case) was found somewhat smaller than discussed above, because in this scenario the Eco-tax implies a smaller percentage price increase. Consequently, the effect on GDP (relative to the altered reference case) is less unfavorable. The increase in employment is more pronounced than in our core simulations discussed above, since the labor cost reduction due to lower social security contributions is independent of the energy price and exchange rate assumptions. Another important assumption shaping the results relates to the way in which wage formation is modeled. In our core simulations we assume that the induced increase in employment does not trigger higher wage claims. If, instead, it is assumed that the trade unions react to employment growth by increasing their wage demands, this could significantly dampen economic growth and neutralize the positive employment effects. This result highlights a common difficulty of empirical policy modeling, namely that the way in which important actors and interest groups respond to policy reform may be difficult to capture by statistical methods. On the other hand, it reveals the importance of social consensus for improving the economic effects of the environmental fiscal reform and for facilitating the adjustment process. The employment findings show that—given an appropriate response of key actors in the labor market—the environmental fiscal reform can ease the situation on the labor market; it cannot, however, put an end to Germany's continued high unemployment.

Uniqueness- Oil Prices



Oil prices rising now

(Agence France-Presse, 7/15/08, “AFP: Oil prices near record high”, http://afp.google.com/article/ALeqM5iULbqz7a_RWOvuo-LtKNAkNzTERw)

LONDON (AFP) — World oil prices jumped close to record heights on Tuesday as the dollar slumped to an all-time low against the euro, and amid ongoing supply tensions including a strike in Brazil.

New York's main oil contract, light sweet crude for August delivery, gained 1.21 dollars to 146.39 dollars a barrel. That was close to the record high of 147.27 that was struck last Friday.

London's Brent North Sea oil for August gained 1.36 dollars to 145.31 dollars. Brent had jumped to an all-time high of 147.50 on Friday.

Global oil prices rising with no signs of slowing

(The Guardian, 6/10/08, “Oil Prices: Europe threatened with summer of discontent over rising costs of fuel”, http://www.guardian.co.uk/business/2008/jun/10/oil.france)

Amid expert warnings that the price of oil will remain high for years to come, soaring to perhaps $200 a barrel, a summit of the EU's 27 heads of government next week will reject short-term solutions such as the cap on VAT on fuel proposed by the French president, Nicolas Sarkozy. But, with surging food and fuel prices dominating their agenda, they will encourage national governments to adopt measures to cushion their impact on the poor and most vulnerable - for a limited period.

Uniqueness- Oil Prices



Oil prices hitting record highs and predicted to hit $200 a barrel

(The Economist, 5/7/08, “The $200 barrel of Oil?”, http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=11325132)



OIL briefly reached another record on Tuesday May 6th as West Texas Intermediate traded at over $122 a barrel for the first time. Ten years ago a barrel fetched around $15. The feeble dollar, soaring demand and supply constraints have all helped to push up prices by 25% in the past four months alone. And there is little sign of respite for worried governments and consumers. This week Goldman Sachs, a bank, predicted that oil could reach $200 a barrel before the end of the year.

World oil prices rising now and expected to continue

(Market Watch, 3/7/08, “New ‘Super Spike’ Might Mean $200 a barrel oil”, http://www.marketwatch.com/news/story/goldman-sachs-raises-possibility-200/story.aspx?guid=%7B4B702F7F-41F8-45F0-A133-630F12F2C764%7D)



NEW YORK (MarketWatch) -- With $100-a-barrel here for now, Goldman Sachs says $200 a barrel could be a reality in the not-too-distant future in the case of a "major disruption."

Goldman on Friday also boosted by $10 the low end of its 2008-2012 projected range for crude to $60 a barrel -- significantly lower than current prices, to be sure, but a possible mark for oil if "normalized" trends return to the marketplace.

With the dollar's fall continuing and financial markets roiled by the credit crunch, commodities like oil have been drawing the fancy of increasing numbers of investors. Accordingly, Wall Street firms have been eager to adjust forecasts to incorporate fresh data on the global economy and energy supplies.

Goldman analysts Arjun Murti, Kevin Koh and Michele della Vigna said prices have advanced more quickly than Goldman had forecast back in 2005, when it predicted a range of $50 to $105 a barrel as part of its "super-spike" oil theory.

"We characterized the upper end of the band as more likely to be driven by geopolitical turmoil and that recession was a key risk to our view," the analysts said. "In fact, oil prices have reached $100 a barrel without extraordinary turmoil, and the U.S. currently appears to be in recession."

Tacking on $15 a barrel to all of its oil estimates, Goldman now sees average selling prices of $95 a barrel for 2008, $105 a barrel for 2009 and $110 a barrel for 2010. The high end of its range is now $135 a barrel -- but Goldman hinted that prices could be headed even higher.

"As the lack of supply growth and price-insulated non-OECD demand suggest a future rebound in U.S. gross domestic product growth or a major oil supply disruption could lead to $150-$200 a barrel oil prices," Goldman said.

While saying it has a bullish long-term outlook, Goldman acknowledged that oil prices could correct from recent highs.


China Oil Prices Add On

2AC China Shell (1/3)





  1. Oil prices rising now and expected to soon hit $200/barrel

(LA Times, 6/28/08, “Envisioning a World of $200 a-barrel oil”, http://www.latimes.com/business/la-fi-oil28-2008jun28,0,5485259.story)
Three months ago, when oil was around $108 a barrel, a few Wall Street analysts began predicting that it could rise to $200. Many observers scoffed at the forecasts as sensational
, or motivated by a desire among energy companies and investors to drive prices higher.
But with oil closing above $140 a barrel Friday, more experts are taking those predictions seriously -- and shuddering at the inflation-fueled chaos that $200-a-barrel crude could bring. They foresee fundamental shifts in the way we work, where we live and how we spend our free time.


  1. Chinese oil dependence creates Chinese-U.S. tensions. Growing oil consumption on both sides in times of high prices and low availability will force competition.

(David Zweig and Bi Jianhai, Director of the Center on China’s Transnational Relations at the Hong Kong University of Science and Technology, fellow at the Center on China’s Transnational Relations, September/October 05, Foreign Affairs academic journal, “China’s Global Hunt for Energy”, http://web.ebscohost.com/ehost/detail?vid=1&hid=5&sid=09ea9420-be06-4eb1-98c5-e3bf6132ed31%40sessionmgr9)

Although China's new energy demands need not be a source of serious conflict with the West in the long term, at the moment, Beijing and Washington feel especially uneasy about the situation. While China struggles to manage its growing pains, the United States, as the world's hegemon, must somehow make room for the rising giant; otherwise, war will become a serious possibility. According to the power transition theory, to maintain its dominance, a hegemon will be tempted to declare war on its challengers while it still has a power advantage. Thus, easing the way for the United States and China--and other states to find a new equilibrium will require careful management, especially of their mutual perceptions.



Because China's extraordinary growth also increases its dependence on foreign resources, the Chinese government has developed a new sense of insecurity vis-à-vis the United States. An article published last June in the Beijing-backed Hong Kong newspaper Ta Kung Pao suggested that Washington might resort to economic tactics to contain China. Given the White House's current penchant for unilateral intervention and the loud voices in Congress calling China a military threat, Beijing might reasonably begin to fear that the United States will try to block its purchases of natural resources to destabilize it. Washington must be mindful of these worries and not exacerbate them needlessly.


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