I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
The Dow Chemical Company announced Wednesday that it would raise prices on all of its products by up to 20 percent, beginning June 1. In a news release, the company attributed the decision to ”…the extraordinary rise in energy and related raw material costs” and noted that the costs of energy and “hydrocarbon-based feedstock costs” have risen from $8 billion in 2002 to a projected $32 billion this year. The company reported a 3.3% drop in first quarter net income, while its first quarter energy costs jumped 42 percent from the previous year.
This action illustrates the indirect as well as the direct effects of fuel price increases on consumers, as Dow produces a wide variety of raw materials that go into finished products, such as paints and adhesives, textiles, electronics and cars, not to mention household detergents and disposable diapers.
Dow’s dramatic announcement to raise prices across the board is sure to get attention, but it comes on the heels of gradual price increases among its competitors, some of whom also explicitly lay the blame on rising energy costs. At a Goldman Sachs Basic Materials Conference on May 21, Mark Rohr, President of Albemarle Corporation said this:
…the real story, and I assume you’ve been hearing about that today and yesterday, is raw material inflation, energy inflation. I don’t know how to say it other than it’s just insane. We have more inflation hitting us this year than we’ve had cumulatively over the last three years. And the rate it’s going it may be cumulatively over the last four years pretty quickly.
Rising crude oil, rising natural gas prices are particularly worrisome, but what we also feel is that the—in the initial up tick in energy costs that occurred I guess now two years ago, a lot of that inflation wasn’t passed through.
He continued later in the meeting to say that inflation is happening across the board:
What we’re seeing today which is unprecedented in recent history anyway is you’re seeing everything inflate. Inflation used to be pretty molecule specific or segment specific…Today what you’re seeing is everything from logistics to MRO materials like pipes, valves, and fittings. All raw materials and energy is going up.
Dow Chemical blamed the inflationary pressure on the federal government, according to an Associated Press report.
“For years, Washington has failed to address the issue of rising energy costs and, as a result, the country now faces a true energy crisis, one that is causing serious harm to America’s manufacturing sector and all consumers of energy,” Andrew Liveris, Dow Chemical’s chairman and chief executive, said in a written statement.
The AP asked for a response from Senator Jeff Bingaman, and reported that:
David Marks, a spokesman for Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, said the New Mexico Democrat is aware of Dow’s concerns and worked to address them in last year’s energy bill by co-sponsoring an amendment to create a pilot program for companies to build green facilities that could use coal as their primary feedstock.
“Unfortunately, that amendment was not successful,” Marks said. “Sen. Bingaman and other Senate Democrats look forward to continuing to work with Dow, in this Congress and the next one.”
Long a major source of fuel for power plants, coal is increasingly seen as a source of fuel for the production of chemicals through a liquification process. Bingaman proposed a bill in June 2007 along with fellow Democrats that would have allowed up to $10 billion in direct government loans to cover part of the construction costs for plants that make diesel fuel from coal. The loans would have been contingent on the plants being designed to capture and store the carbon dioxide emitted during production, although other detrimental environmental and human side effects of coal production were not addressed.
In the United States, the development of “clean coal” technologies that pump carbon dioxide emitted from coal-burning power plants back into the ground rather than the atmosphere is seen by many as crucial for meeting global warming reduction goals.
The Natural Resources Defense Council, though, says that while the utilization of carbon capturing technologies in the coal mining industry is a step in the right direction, there’s no such thing as “clean coal,” especially when you include the dangerous nature of coal-mining as a profession and the extensive environmental degradation to the land and the water table.
