A weakened dollar and renewed tensions over pending sanctions against Iran caused a huge surge in the price of crude oil futures during Tuesday trading in New York.

The U.S. dollar slipped against the euro as the feel in the market was that the European currency had dropped too far in recent weeks in the wake of Greece’s economic problems. When the dollar falters, traders usually pour more of their money into commodity investments.

U.S. Secretary of State Hillary Clinton’s meeting with Saudi Arabia’s King Abdullah in an effort to lobby support from Gulf states and China for sanctions against Iran also heightened tensions in the oil-rich region. Iran is OPEC’s second-largest producer of crude oil.

Crude oil for March delivery rose $2.88 to settle at $77.01 a barrel at the close of floor trading on the New York Mercantile Exchange. Trading was rather light on Tuesday with Asia celebrating the Lunar New Year.

The 4 percent spike was the largest percentage gain since late September.

A top Saudi oil ministry adviser declared his concern that a peak in oil demand had already occurred, or would take place in the next decade, and said that his country, which relies heavily on income from its crude oil exports, is alarmed enough about it to diversify its economy by striving to become a leading alternative energy exporter.

“Talk of oil demand peaking is an alarm to speed up the economic diversification process,” Mohammed al-Sabban said on Monday at the World Economic Forum in the Saudi city of Jeddah. “The challenges facing Saudi Arabia are huge: we need to develop Saudis in order to be innovative, creative, to catch up with the rest of the world.”

More than a quarter of the youth in the country are unemployed, and the kingdom is trying to upgrade their scientific and educational institutions to further their knowledge which will help them expand their economy into other areas.

Al-Sabban also announced that his country will be launching its first carbon capture project by injecting carbon dioxide into the Ghawar oil field, the world’s largest oil field, beginning in 2012.

“The world cannot wait for us before we are forced to adapt to the reality of lower and lower oil revenues,” al-Sabban added.

The theory of “peak oil” is the point where oil extraction has reached its maximum levels and is entering a state of permanent decline. Experts differ on whether most oil producing nations have already reached their peaks in oil extraction, or, as al-Sabaan contends, if crude oil consumption will begin to slow as leading economic nations begin to rely more heavily on alternative and renewable energy sources.

“The world cannot wait," for the Saudis before they are "forced to adapt to the reality of lower and lower oil revenues,” Mohammed al-Sabban warned.

Saudi Arabia is currently extracting 8 million barrels of crude oil per day, with a reserve capacity of 4 million barrels per day more.

Gulf states, which rely on crude oil exports to cover as much as 90 percent of their budgets, need to begin looking into nuclear energy as an alternative, Adnan Shihab-Eldin, a former secretary general of the Organization of the Petroleum Exporting Countries (OPEC) told the audience in Jeddah. He noted that nuclear power would be economically viable even with crude oil prices just above the $40 per barrel range.

The Saudis, as the biggest oil producer in the 12-member organization, are widely considered to be the leader of OPEC and their comments are usually looked at as a sign of what the cartel as a whole is thinking.

Saudi King Abdullah recently launched a solar-power water desalination plant in its efforts to begin looking toward alternative energy. The country provides more than 18% of the world’s production of desalinated water.

As part of the American Recovery and Reinvestment Act (ARRA), the ‘Great Appliance Swap Out’ will be running through February 21^st, or until the $17 million in federal funds being granted by the U.S. Department of Energy (DOE) are used up.

“This program will provide a tremendous incentive for consumers all across New York to reduce their energy consumption while providing an important stimulus to our economy, and helping to meet the State’s ‘45 by 15′ clean energy goal,” New York Governor David Paterson said.

The state is learning from the mistakes of ‘Cash for Clunkers’, a federal program for enticing people to trade in their old gas guzzling automobile, which ran out of funds very quickly.

“Whenever someone downloads an application or someone calls up and has an application downloaded for them, we have a real-time counter on the website, so we’re really trying to avoid what happened this summer with cash for clunkers, where they go to buy an appliance and there’s no money left,”  said Mark Michalski from NYSERDA.

The appliances qualifying for the rebates are as follows:

• Refrigerators: $75 ($105 with a receipt certifying that the old appliance was recycled)

• Clothes washers: $75 ($100 with recycling recipt)

• Freezers: $50 ($75 with recycling receipt)

• Dishwashers: Rebates are only available for dishwashers when purchased as part of a three appliance package of appliances. This bundled purchase will qualify for a $500 rebate ($555 with documented recycling).

Appliances must have the ENERGY STAR® label, meaning that they are up to 30 percent more efficient than standard models on the market.

Many appliance retailers across the state are trying to capitalize off the program by assisting customers through the rebate process and having the paperwork on hand to fill out.

“It is a win-win for consumers because it will reduce the cost of big ticket energy efficient appliances and help lower utility bills for years to come,” said Assemblyman Kevin Cahill, Chair of the NY Assembly Energy Committee.

For more information, visit the Great Appliance Swap Out website.

A massive explosion rocked the gas-fired power plant, with confirmed fatalities and many injuries.

Middletown, CT - At least 5 people were confirmed killed after a huge explosion rocked a gas power plant shortly before 11:30am local time. Police and rescue services fear that there are ‘mass casualties’ as a result of the exploding gas pipeline, and the death toll is expected to rise.

“The reports vary from a few, several to possibly as many as 50 dead,” said Brian Albert from the local hospital.

Billowing smoke was seen rising from the 620-megawatt Kleen Energy Systems plant, located along the banks of the Connecticut river.

Witnesses and victims of the explosion said that there are many bodies buried beneath the rubble, with rescue services operating frantically to pull the survivors to safety.

Middletown deputy fire marshal Al Santostefano said that it was “a massive explosion” and noted that emergency responders had “confirmed fatalities,” though he declined to say how many.

The explosion could be felt from up to 15 miles away from the plant, with many area residents originally mistaking it for an earthquake. Middletown is located just 23 miles south of Hartford, the state’s capital.

“They were doing the firing of the engines this morning and so something went wrong and it blew up and flames came shooting up almost as tall as that stack,” a local resident told told WTNH-TV.

Governor Jodi Rell immediately activated the state’s emergency management center upon being informed of the blast, and the more than 100 firefighters on the scene have since extinguished the blaze that erupted from the explosion.

Rescue officials say that there is no further danger to the public and are now operating “in search and rescue mode,” according to Santostefano.

Republican Senator Lindsey Graham says that he won't go along with a "kick the can down the road approach” to the energy bill.

Senator Lindsey Graham, South Carolina’s senior senator, expressed his dismay at the idea that Congress should do an energy-only bill. He wants comprehensive carbon pollution legislation to be a part of any energy bill, because, as he sees it, the two issues are connected.

“I don’t think you’ll ever have energy independence the way I want it until you start dealing with carbon pollution and pricing carbon,” Graham told the audience. “The two are connected in my view—very much connected. The money to be made in solving the carbon pollution problem can only happen when you price carbon in my view.”

“So if the approach is to try to pass some half-assed energy bill and say that is moving the ball down the road, forget it with me.”

Graham’s pledge to work with his peers from across the aisle in support of carbon regulation may breathe life into the Democrats plan that was on life support after Massachusetts elected Scott Brown to the Senate, handing Republicans the precious 41^st seat needed in order to block much of the Democrats agenda.

Obama all but conceded in a town hall meeting this week that greenhouse gas pricing legislation was not likely to pass. “The only thing I would say about it is this: We may be able to separate these things out,” Obama said. “And it’s conceivable that that’s where the Senate ends up. But the concept of incentivizing clean energy so that it’s the cheaper, more effective kind of energy is one that is proven to work and is actually a market-based approach.”

Indeed, after hearing of Graham’s remarks, Obama was quick to heap praise on the Senator. He said that Senators John Kerry (D-MA), Joe Lieberman (I-CT) and Graham are “very thoughtful in terms of how they’re approaching this issue.”

But the senator is also having to deal with criticism from his own party and legislators from his home state who are against any sort of plan to tax carbon. He responded harshly to critics who say that he’s selling out. “They don’t listen to what I’m saying,” Graham said. “They just know that I’m working with Senator Kerry, and they don’t like it because they don’t like him.”

This isn’t the first time either that Graham has faced the ire of his Republican colleagues due to him veering from the party line. His close work with the late Massachusetts Senator Ted Kennedy on immigration reform caused much bickering between him and the more conservative members of his party.

The plan is to have liberals agree to more domestic energy development, which would include the construction of new nuclear power plants; offshore oil and gas drilling; using more coal, but in a cleaner manner; to go along with wind and solar, in exchange for assistance from Republicans and moderate Democrats in passing carbon legislation.

Graham also expressed dismay at what he sees as nuclear power being placed in the backseat. “82 percent of power in France comes from where? Nuclear. Surely we can be as bold as the French.”

“Trust me, you cannot be serious about cleaning up the environment unless you are serious about nuclear power. You cannot replace coal-fired plants with wind and solar—it’s 15 percent of the grid at most.”

Wind power is the leading source of new electricity generation in the U.S. along with natural gas.

The U.S. wind industry installed nearly 10,000 megawatts (MW) of new generating capacity in 2009 (the equivalent of powering 2.4 million homes), breaking all previous records, according to a report released today by the American Wind Energy Association (AWEA).

“The U.S. wind energy industry shattered all installation records in 2009, chalking up the Recovery Act as a historic success in creating jobs, avoiding carbon, and protecting consumers,” said AWEA CEO Denise Bode.

The industry was expecting a severe drop-off in wind development –as much as 50% from 2008 levels– followed by thousands of job losses, until it got a much needed shot in the arm with the funds it received from the federal government via the Recovery Act.

Nearly 2,000 operations and maintenance jobs were created by the new installations.

The total U.S. wind power generating capacity now stands at 35,000 MW, up 39% from 2008, and can now provide power to 9.7 million homes.

Texas (9,410 MW) consolidated it’s large lead amongst as the state with the most wind power installed. Iowa (3,670) was next, followed by California (2,794), Washington (1980) and Minnesota (1,809).

Wind turbine manufacturing, however, is still lagging, and many in the industry worry that it’s already slowing the industry’s expansion plans.

“But U.S. wind turbine manufacturing – the canary in the mine — is down compared to last year’s levels, and needs long-term policy certainty and market pull in order to grow,” said Bode. “We need to set hard targets, in the form of a national Renewable Electricity Standard (RES), in order to provide the necessary stability for manufacturers to expand their U.S. operations and to seize the historic opportunity we have today to build up a thriving renewable energy industry.”

The vast market for wind energy was evidenced in a detailed study by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) which concluded that with a large infusion of funds to upgrade the transmission infrastructure and installation of new wind projects, the eastern power grid could conceivably get 20% of its supply from wind by 2024.

“Twenty percent wind is an ambitious goal, but this study shows that there are multiple scenarios through which it can be achieved,” David Corbus, project manager for the study, said in a statement.  “Whether we’re talking about using land-based wind in the Midwest, offshore wind in the East or any combination of wind power resources, any plausible scenario requires transmission infrastructure upgrades and we need to start planning for that immediately.”

The eastern grid extends from the Plains states to the Atlantic states and down to the Gulf of Mexico.

As it stands now, America’s wind power fleet will avoid an estimated 62 million tons of carbon dioxide annually, equivalent to taking 10.5 million cars off the road, and will conserve approximately 20 billion gallons of water annually, which would otherwise be withdrawn for steam or cooling in conventional power plants, according to the AWEA.

Taxpayer money which was meant to be used to improve the nation's gas mileage, was spent on SUV's and pickup trucks like the Hummer H3T

The poster child of gas guzzlers, the Hummer, was among the vehicles purchased under the taxpayer funded Cash for Clunkers program.

Of the nearly 700,000 vehicles sold under the program, more than 32,000 of those were Chevy Silverado and Ford F-150 pickup trucks. 15 Hummer H3T four-wheel-drive vehicles were also purchased as part of the Cash for Clunkers program.

For consumers to receive the federal rebates of up to $4,500, the new vehicle they were purchasing had to have a better average miles per gallon than the old car they were trading in. In order to purchase a new SUV, minivan or pickup truck, the difference required was 2 miles per gallon. For passenger cars it needed to be at least 4 miles per gallon better.

The fifth most purchased vehicle was the Ford Escape, with 21,894 being sold. Honda’s SUV’s also did remarkably well, with upwards of 20,000 of their CR-V crossover models being purchased.

While the number of SUV’s, and other vehicles generally considered to be gas guzzlers, only made up a fraction of the total amount sold as part of the Clunkers program , it puts a stain on a program that was touted by the Transportation Department as having brought about vast improvements in fuel efficiency.

The Hummer, the poster child of heavy gas guzzling vehicles, is the most ironic of the lot, even considering the very few that were sold.

The Ford Escape was the fifth most purchased vehicle in the Cash for Clunkers program.

According to some consumer experts, the Cash for Clunkers plan was faulty to begin with in terms of helping the environment and conserving fuel. They contend that the nearly $3 billion of taxpayer money could have been much better spent elsewhere.

The cost to U.S. taxpayers came to more than $4,000 per car for each of the 700,000 vehicles sold in the program.

“For that much money, we could have gotten a lot more,” says Lisa Margonelli, who directs the New America Foundation’s Energy Productivity Initiative. “Consider this: Cash for Clunkers only required a fuel economy increase of 2 mpg over the original car, so the total mandated gas savings was about 38 million gallons of gas. The auto companies can raise the fuel economy of cars on the assembly line by that much at a cost of $500 per vehicle. So, we could have given our $2.87 billion to the auto companies to upgrade 5.5 million cars by 2 mpg or more, and bought ourselves a yearly fuel savings of 303 million gallons of gas.”

“If we’d made only cars getting 32 mpg or more eligible for the loans we could have saved 855 million gallons of gasoline a year. Much much more than 38 million,” she said.

A recent survey conducted by CNW Research, a firm specializing in automotive marketing research, revealed that more than 17 percent of new-vehicle customers who participated in the Cash for Clunkers program now harbor “some” doubt or “serious” doubt about letting a government subsidy convince them to go further into debt.

Chinese oil consumption is expected to grow by 20% in the next 6 years, and the country already imports more than half of what they currently consume.

The firms are taking a couple of steps toward getting a solid foothold in the market, such as extending loans to foreign companies. Rosneft, a Russian company, has made a deal with China to accept a $10 million loan in exchange for a percentage of the company’s output. Also, Petrobras (Brazil) has worked out a similar deal with China. Currently Petrobras is creating a new major oil field just off the coast.

In addition to extending loans to foreign oil companies, China has also expressed an interest in purchasing either part of Argentina’s YPF or the whole company for $14.5 billion, although the deal is far from set in stone. There is also speculation afoot that China may be looking to purchase a majority of the Rumaila oilfield in Iraq, a field that produces over 1 million barrels of oil each day, from BP.

There are several different reasons that China has been making moves to gain more control in the oil production business. First, China has managed to accumulate a large amount of cash. There is speculation that the unbridled spending from the United States government will have a serious negative pact on the value of the cash, so China is attempting to purchase these stakes in order to diversify their portfolios quickly without causing further destabilization of the US dollar.

Another reason that China has been making purchases is that they do not have much faith in free market economies, spurred by their failed attempt to purchase Unocal.

Currently, China imports over half of the oil used in their country, and they project oil consumption to grow by almost 20% in the next six years.

As for being a rival to western companies, China National Petroleum Corporation already has a production rate that is nearly equal to that of Exxon. With a growing stake in worldwide production, China is poised to be a serious contender in the global market.

Over four hundred stimulus grant proposals have been received by the United States Department of Energy for the purpose of setting up the proposed smart grid system. The DoE is planning to choose which proposals to go with in November, but right now they are still in the process of adding up the total amount of money that has been requested.

According to Todd Arnold, Duke Energy’s senior vice president of smart grids, “What’s critical for industry is we get out of pilots, and start building smart grids.” Currently they are serving about four million Midwest customers.

The maximum amount of money that is allowed to be requested stands at $200 million for the proposals that were closed on August 6th. Duke Energy put in a request for the full $200 million, and their goal is to take their original plan of having smart meters and automation systems connected to over 1.5 million users in six years, and reduce the time frame to four years. The users in their target area are from Kentucky, Indiana, and Ohio. Duke Energy also has plans to send off another proposal for advanced pilot systems to the tune of $14 million by late August.

A few days ago, Echelon Corp. agreed to purchase just under $16 million Networked Energy Services systems from Duke, which are scheduled for delivery prior to October 2009. According to Echelon, this deal could be the start of what will be sales of its NES systems that push the $150 million mark. Representatives from Duke Energy say that they liked “how [the Echelon system] gets data out of the meter to where we have a collection point on the network. We like their design of their metering infrastructure and the NES system’s handling of data at head end, managing the network and handling updates and applications on the smart meter.”

State officials in Vermont made an announcement on Thursday that the state’s utilities and regulatory agencies are prepared to go ahead with establishing a ’smart grid’, with or without federal funding. Of course, without the extra $66 million, the project will take far longer to get up and running.

Setting up a ’smart grid’ is a daunting task, which requires the installation of specialized electric meters in homes, running fiber optic connections to them, and setting up systems for gathering data from the meters. The idea behind the system is to use the data that is gathered to help reduce both the cost and use of electricity.

One of the potential issues with the new ’smart grid’ is the use of electricity to heat water in homes and provide heating and cooling. These issues have been problematic when formulating a plan to slow the usage of electricity in homes around the state. With emerging technologies, the smart grid would allow homeowners to use power for these things while both reducing carbon dioxide emissions in the generation process and without increasing demand during peak usage times.

The project, which is projected to cost around $133 million, would be completed in approximately three years with the help of federal funding. About half of the cost would be shouldered by the utility companies, with the other half coming from stimulus funds.

According to Mary Powell of Green Mountain Power, customers in Vermont are already up to speed on the savings that they will see from the smart grid. By using the smart meters and tracking usage, a homeowner would be able to adjust their power usage to off-peak times.

Another advantage of the smart grid is that a company can easily integrate renewable power sources into the system and activate them when necessary, unlike nuclear or fossil fuel sources, which run constantly.