Hope You Enjoyed Two-Week Era of ‘Cheap Oil’; Crude Price Leaps $25 in Biggest One-Day Jump

9/23 Update: Oil price falls today almost as much as yesterday's gain, which reportedly was caused by "a confluence of one-off circumstances and a re-interpretation of supply and demand issues."  That clears it up.

When oil slipped to $91.50 last Tuesday, we’re sure we weren’t alone in wondering how long the decline could this last before commodity traders said enough is enough.

“Enough” was today. Starting the day around $104/barrel, oil futures surged to $130 before dropping to nearly $121, “a record jump of $16.37,” according to the New York Times.

Today’s increase made up for almost 30 percent of the decline from July’s high of $147.27….and just as we started to get used to the modest decline in gas prices.

A-B-O

Anything But Oil is once again the mantra in Hawaii, the nation’s most oil-dependent state, where it’s burned to generate 78 percent of the state’s electricity. Today’s “anything” is wood chips from eucalyptus trees grown and harvested on the island of Hawaii, as described in the Honolulu Star-Bulletin.

The project’s backers must be counting on good growing conditions if they’re prepared to invest “close to $200 million” in their operation. Of course, wood burning has been around as a “technology” since our distant ancestors accidentally started the first forest fire.

We wish these entrepreneurs good luck with their project, which seems to be sized right for the Big Island, but satisfying the electrical demand of Oahu with wood chips could devour entire forests in no time flat.

We therefore hope for some good news about ocean thermal energy conversion from Hawaiian Electric one of these months. OTEC presumably would qualify for the “set-asides” that HECO recently mentioned for ocean energy technologies.

Since the tropical Pacific Ocean would be OTEC's inexhaustible energy source, plugging in sooner than later to that source would be just about the best A-B-O news we could imagine.