The Oil Drum

Tonight, for your discussion, here's this piece:

Tim Iacono submits over at Seeking Alpha: Is Peak Oil Already Here? That seems to be the simplest explanation behind the most recent re-weighting of the Goldman Sachs Commodity Index as reported by the New York Post. The story reports a reduction in the amount of some energy commodities that the index will carry in 2007, this purportedly being linked to the recent plunge in the price of oil. There may be more on this subject here in the days ahead and Barry Ritholtz is on top of things so far with many related links, but here's a quick look at the latest developments in the continuing story of Goldman Sachs and energy markets...).

More posts of interest on this topic at Tim's blog.

Goldman Sachs has bet long on Green investments over the last few years. Investing in wind farms, solar energy and ethanol producers, building up a $1 Billion stake in renewable energy investments. The NY Times Editorial Page calls for more incentives to reward "green" investments. With the former CEO Henry Paulson of Goldman set to become the Treasury Secretary, it might be that rewarding green investments is an idea whose time has truly come.

If Washington is smart, it will throw its weight behind these efforts by providing the necessary incentives, whether as loans, direct grants or targeted tax breaks. But Washington is dawdling; several excellent bills designed to advance the development and wider use of various alternative fuels, cleaner cars and carbon-free power plants are languishing in the election-shortened legislative year.

I would add that perhaps setting some type of standard of what "green" is would be a big help, since I don't think there is very good evidence that ethanol from corn grown on factory farms is very environmentally friendly.

Dec. 19 (Bloomberg) -- Goldman Sachs Group Inc. analyst Arjun Murti, who roiled oil markets in March by saying crude may reach $105 a barrel, now says that may be conservative if the ``peak oil'' theory is right and world supplies are running out. (link)