Drilling anywhere, any time: When in a negotiation, ask for the sky; perhaps you'll get half of it. So it is with the U.S. oil industry's chief lobbyist, Jack Gerard of the American Petroleum Institute. Interviewed by the Financial Times, Gerard says that the entire United States should be open for oil drilling, without exception. Just months after the unprecedented spill in the Gulf of Mexico, some might regard the position as a bit nervy. Not Gerard. "It is difficult to quantify how much increased production would affect imports," he told the FT, "but if companies had access to all U.S. areas now off limits, a substantial increase in domestic production would be possible." President Barack Obama has revived restrictions on offshore drilling on the U.S. East Coast, and new drilling in the Gulf of Mexico has been effectively frozen awaiting a decision on regulation of the area.

Another step toward speculation regulation: Three years ago, investor speculation rapidly drove global oil prices up to $147 a barrel, before it created a plunge to $32 a barrel. Amid another speculation-driven commodities price run-up, U.S. regulators have voted to impose caps on how much speculation a single investor can carry out. The vote in the Commodity Futures Trading Commission is not final -- that has to come later. But it would place position limits on bets on 28 commodities including oil, gas, gold, and certain foods. Such limits are required by financial-industry regulation approved by Congress last year.

Rare earths workaround: Toyota is trying to bypass a Chinese stranglehold on rare-earth elements by making cars that don't require them. Last year, China imposed a blockade on shipments of the elements to Japan, which uses them for high-tech products including missiles, windmills, advanced batteries, and hybrid vehicles. But blockades, sanctions, and shortages tend mostly to trigger inventiveness, and Toyota now says that it's close to a breakthrough in hybrid-electric motors that won't require rare-earth magnets, reports the Wall Street Journal. Rather than so-called permanent magnets, the motors would rely on electromagnets.

A new sultanate: Elections in the former Soviet Union are almost always scripted affairs -- in most cases, everyone knows who is going to win by a landslide before it happens. Such has been the case for the last two decades in oil-rich Kazakhstan, whose winner has always been President Nursultan Nazarbayev. But Nazarbayev appears to be dissatisfied with this state of affairs, and so a move is afoot to allow him to rule for another decade without the formality of the intervening two elections that are on the official calendar. The Parliament has voted to change the constitution to allow a public referendum on the question. If the referendum passes, Nazarbayev would be the first former Soviet leader to wholly dispense with the election charade.

Duke Energy's proposed $13.7 billion purchase of Progress Energy announced this morning could be a blow to Big Coal, which has ambitions to remain the planet's preeminent fuel for electric power. Both Duke and Progress have big ambitions for nuclear-fueled power plants, and Duke CEO Jim Rogers is among corporate America's loudest advocates for sharply slashed CO2 emissions.

Here is Rogers getting grilled by comedian Stephen Colbert:

Much in the climate change arena has gone topsy-turvy in the last two years. Back in 2009, China and India seemed to be among the main roadblocks to a global accord on reducing the emission of heat-trapping gases; now, China is aggressively lowering its growth of CO2 emissions absent corresponding cuts in the United States. Back then, it was an article of faith that the U.S. -- the world's second-largest CO2 emitter -- was going to put a price on carbon, and lead a global campaign against Arctic melting; among the leading such voices were corporate giants including ExxonMobil. Now, climate skepticism is ascendant, Republican leaders vow to halt Obama Administration policy to begin regulation of CO2 emissions, and corporate green-speak is heard much less in the halls of power, as Anne Mulkern reported at Greenwire.

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Fatih Birol, chief economist for the International Energy Agency, is among the most respected voices in energy. When he speaks, he can even get the OPEC folks to listen. So it is notable that Birol has hit the panic button on oil prices, not-so-subtly suggesting that OPEC increase production -- and that oil-consuming  nations moderate their appetites. "Oil prices are entering a dangerous zone for the global economy," Birol's told Sylvia Pfeifer in today's Financial Times.

Translation: Oil prices approaching $100 a barrel could take the wheels off the just-recovering global economic cart. Oil traders are driving such talk by upping the number of bets on higher prices that they're making in the futures market, reports Bloomberg's Asjylyn Loder. At one point on Monday, Brent crude -- the variety benchmarked in Britain -- soared to $96.07 a barrel on such bets, its highest price since October 2008.

Birol can't be ignored, and recovering global demand has most analysts agreeing with him. Yet, as this blog did last month, let's also consider the less-excited voices.

Phil Flynn at PFGBest, for example, thinks that government stimulus spending over the last couple of years has pumped up oil prices by $15 to $20 a barrel. So while speculators are driving up prices in a frenzy to cash in, politics are working against them -- there isn't political support for sustained stimulus spending any longer, so Flynn expects that air to go out of the price this year. Another moderating factor, according to Flynn, is that a lot of investors piled onto oil as a shelter from tanking stocks and bonds; now they will go the other way. "Even with all the bullish mania that has gripped the [oil] complex in recent weeks, the 2011 outlook, while still bullish, is obviously not as wildly bullish as recent market action might have you believe," Flynn told clients today.

Then there is Barclays Capital. The FT reported yesterday that Barclays is forecasting oil hitting $100 a barrel this year. But the Dec. 30 Barclays report that the newspaper quotes goes on to suggest that its analysts don't expect oil to average $100, but only to touch that price -- namely because OPEC will step in with higher production:

In our view, while it is probably already too late to prevent the market from hitting $100 per barrel at points in 2011, OPEC is likely to have to play a far more proactive role to dampen any potential explosive upside that may arise and ensure that quarterly and annual averages do not reach $100 per barrel. Indeed, we do expect OPEC to exercise control of that upside earlier in the cycle compared with 2008.

Then there are the outright bears. Petromatrix, a Swiss-based firm, looks at the fall in oil prices yesterday and so far today, and sees timidity. Petromatrix Managing Director Olivier Jakob told Bloomberg that prices could plunge to $80 to $82 a barrel if speculators flee the market in droves. "If there is some genuine profit-taking from large speculators, then we need to consider the risk for further downside," Jakob said.

Finally, Joseph Meyer, a current bull who writes over at Seeking Alpha, messaged yesterday to correct an O&G post quoting him on oil prices:

I said the price of oil could hit $200 in 2012, not 2011, and $300 in 2013. It's a normal mistake, nothing earth-shattering. I agree that prices currently are too high and the hedgers are getting carried away. But if the US and European economies start picking up by 2012, and assuming all things stay equal in the big emerging markets, then I think at one point we see at least a doubling of oil prices from current levels, driven by both fundamentals and by super-bullish fund managers. For the average American consumer, let's hope speculative oil prices are just a blip.

We regret the error, and side with Meyer on consumers.

FP's editors are rounding up predictions for 2011 from their bloggers, so here are a couple thoughts from me on my beat:

First, with Russia's petro-driven geopolitical power shaken underfoot by uncertainty in its key European natural gas market, Vladimir Putin will step up his two-year-long public relations campaign and announce that he will seek to return to the Russian presidency in elections scheduled in 2012. In a swap of the so-called "tandem" of Russian power, current President Dmitry Medvedev will declare that he will be honored to serve as prime minister.

Meanwhile, oil prices will flirt with $100 a barrel, but stay generally in the $80 to $95 range because global crude oil stockpiles will remain at historic highs. This will temper the price of gasoline at the pump, and help the global economic recovery advance. But another global speculative bubble will form, this time in metals, driven by these same expectations of economic growth. What these traders always seem to forget is that all bubbles eventually burst -- but no one knows precisely when.

For the last year, Deutsche Bank's Paul Sankey, one of the best long-range energy minds on Wall Street, has been distributing a series of provocative, deeply researched, and forward-looking notes to clients under titles like "The Peak Oil Market" and "The End of the Oil Age." Last week, Sankey produced a sixth note called "2011 and Beyond -- A Reality Check." Among the takeaways: As of 2010, the new electric car age is coming upon us faster than expected -- far beyond this year's conspicuous arrival of the General Motors Volt and Nissan Leaf, and the race among the world's industrial nations to dominate this technology. Converging even more rapidly, says Sankey, are far higher oil and gasoline prices, starting in 2012. Such shifts could have enormous geopolitical ramifications -- as a consequence, some countries will become poorer, and some richer, with corresponding impacts on their global influence.

Starting with the second forecast from this 59-page report, 2010 has seen a comparatively gentle respite in an otherwise unprecedented, decade-long period of turbulence in oil markets. According to Sankey, this calm is about to break.  Sankey's forecast is based on the salient factor of "spare capacity." (If you are already familiar with the term, skip to the next paragraph. If you aren't, read on.) This refers to how much oil the world's petrostates can produce above and beyond current demand. So for instance, Saudi Arabia pumps about 8 million barrels of oil a day, but has dug enough wells in enough new fields to produce 50 percent more than that -- or 12 million barrels a day -- if it needs to. That excess Saudi productive capacity of 4 million barrels a day, plus about 1 million barrels a day of extra productive capability elsewhere, adds up to a global surplus of about 5 million barrels a day of spare oil production capacity -- the available volume above and beyond the 87 million barrels of oil a day consumed around the world.

Price-setters -- meaning oil traders -- see a lot of spare capacity as a cause for calm. They remain serene in the face of bad weather, pirate attacks, or pipeline explosions -- the sort of events that, in the 2006-2008 period (when there was much smaller spare capacity) sent them into paroxysms of panic, and accordingly sent oil and gasoline prices through the ceiling. This was because no one could say whence oil would come to fulfill demand. Since the world now has a cushion, we have the relative tranquility of 2010.

But Sankey effectively says that it's been a false calm. Reality is about to strike, he says, based on the following math: Global spare capacity is actually not 5 million barrels a day, but 4 million barrels a day when one takes into account what countries really produce, versus what they report. From there, Sankey projects that global demand will rise by 2.5 million barrels a day next year, and an equal volume in 2012. Looking at the future through this lens, you can see how we will rapidly work through our spare capacity buffer, and arrive right back on the knife's edge.

Read on

In the discovery and development of the Jubilee oil field in Ghana, much media coverage has focused on how the west African nation might avoid the dreaded "resource curse." Also called the "paradox of plenty," the malady is thought to explain why countries richly endowed with oil often suffer from weak economies, corruption, and instability. The resource curse, according to the popular narrative, is about as immutable as gravity.

In their new book, Oil Is Not a Curse: Ownership Structure and Institutions in Soviet Successor States, Pauline Jones Luong and Erika Weinthal call this assumption into question, and put it under the microscope for close scrutiny. Luong and Weinthal -- professors at Brown and Duke universities, respectively -- argue that such countries suffer not from their resources, but from their institutions. The deciding factor in the success or failure of a petrostate, Luong and Weinthal write, is who owns the oil.

The authors make their case with a study of five former Soviet states: Azerbaijan, Kazakhstan, Russia, Turkmenistan, and Uzbekistan. Given the numerous variables at play in any global assessment of this issue, the approach cuts down the complexity by providing a clear and level starting point for evaluation. They assess the years between 1990 to 2005 -- a period they argue is largely neglected in resource curse literature -- and explore the different outcomes when the state owns the oilfields, and when it is turned over to private hands. Their findings? When oil is in private hands, the resource curse does not rear its head -- Kazakhstan being a prime example.

While we are all ultimately cursed by the finite quantity of resources on the earth, Luong and Weinthal argue that countries can make the institutional choices necessary to optimize them -- that well-endowed states are not victims of the resources themselves, but rather of their own failure to opt for fiscally strong ownership options. Among other petrostates, this is good news for relatively well-governed Ghana, as it seeks to become Africa's seventh-largest oil producer.

Angela Osborne is a graduate student in Georgetown University's Security Studies Program.

Five countries, oil entrepreneurs big and small, and activists of various types have all weighed in on the biggest remaining motherlode of energy on the planet: the Arctic. Climate change is opening up this region, which holds an estimated 25 percent of the world's remaining oil and gas, according to the U.S. Geological Survey. One principal question mark in this ballyhooed rush north has been the doubts of environmentalists, who note that in the case of a spill, the Gulf of Mexico would be child's play compared with the Arctic, where spills dissipate far less easily and cleanup efforts are far more difficult than they are on the Louisiana coast.

But this is just one of the challenges facing Arctic development. As the biggest oil companies in the world are finding, energy trends themselves are at least for now working against the Arctic. Specifically, billions and billions of cubic feet of natural gas could end up stranded in Alaska, Canada, and Russia because there is so much competing supply around the world.

In the Wall Street Journal, Phred Dvorak and Edward Welsch report on Canada's backing of a 740-mile natural gas pipeline from its Northwest Territories -- which border the Arctic -- to southern markets, including the United States. Called the MacKenzie Gas Project, this $16 billion pipeline has partners including ExxonMobil, Shell, and ConocoPhillips. The three major fields there hold the gas equivalent of 1 billion barrels of oil. Now, with the Canadian government's green light, the companies themselves must decide whether to proceed -- a matter the government says it will take up in about three years, once it figures out the precise costs and engineering requirements.

Read on

Oil prices are up today, another apparent notch in the belt of conventional wisdom, which is that we are on the way to another historic price spike -- $200 to $300 a barrel and $5 a gallon at the U.S. pump. The way this narrative goes is that these sky-high prices finally so aggravate U.S. consumers that they act on them: switching for good to hybrids and other high-mileage cars, weather-protecting their homes and buildings, and generally using much, much less oil. On the other side of all this, a decade or a bit more from now, we get a long, slow decline in global oil demand, paradise, and other fine things.

But is this valid? Not necessarily, if one considers a pair of reports out today from Barclays Capital, the research arm of the investment bank. Start with what leads people to such conclusions. First is the theory of peak oil: the evidence that we've just about reached the apex of our capacity to produce oil, and will be on a supply plateau of around 90 million barrels of oil a day for some time before the supply begins declining (global oil demand is about 85 million barrels a day). The other factor is that oil companies have in recent years curtailed their spending to find new oilfields. Together, these trends suggest that supply will stop keeping up with demand about mid-decade.

Where Barclays takes the punch away from this pessimists' party is a semi-annual survey of 402 oil and gas companies of all sizes around the world. Barclays finds that these drillers are back in the spending game. In what Barclays calls "The Original E&P Spending Survey" (sounds like a cheeseburger ad, right?), it finds that exploration and production spending is going to rise next year to almost half a trillion dollars. In precise numbers, that means $490 billion in spending, 11 percent higher than the measly $442 billion that will have been spent by the end of 2010.

Read on

Last week, you'll recall, WikiLeaks brought us the story of a meeting a year ago between Jerry Lanier, the U.S. ambassador to Uganda, and Tim O'Hanlon, an executive of Britain's Tullow Oil, which was trying to buy a stake in a pair of big Ugandan oil fields at the time. Lanier's cable paraphrases O'Hanlon as saying that two other companies had somehow swooped in and grabbed the deal out of Tullow's hands. The suggestion was that a Ugandan minister had been paid off.

Not so, say almost all of those mentioned in the Lanier cable. Last Friday, O'Hanlon wrote a letter to Ugandan President Yoweri Museveni, saying that Lanier got the story all wrong. He had heard the talk circulating of such backroom dealing, O'Hanlon wrote, but he never believed it. "I have no evidence implicating the honorable ministers in corruption and have no reason to believe that the rumors sweeping Kampala at the time were actually true," O'Hanlon wrote.

Amama Mbabazi (above), Uganda's security minister and the official named in Lanier's cable -- in which Lanier told his superiors that the United States might consider revoking Mbabazi's U.S. visa -- said he was equally perplexed by what the cable had to say about his relationship with Italy's Eni and Britain's Heritage Oil. He said:

These allegations are absolutely untrue. I have never received even an offer let alone payment from Heritage or ENI of that kind or for anything. However at that time there was report in The Times of London which did not name anyone but talked about corruption over the deal. What surprised me is that the embassy believes that the allegations are true and concluded that the deal showed signs of high level corruption in Uganda's oil sector. This is incredible. I am surprised they would make a statement like that without cross checking with me about my alleged involvement.

Eni also said that Lanier was far off the mark, and that it intended legal action against WikiLeaks. "ENI denies the serious allegations which are completely without foundation and has instructed its lawyers to initiate legal proceedings to compensate for any damage caused to the company's reputation," a spokesman told Agence France-Presse.

Italy's oil company Eni has long enjoyed a privileged position in oil and gas deals in both Russia and Kazakhstan. The company enabled Russia's dismantlement of Yukos, and has been Gazprom's top-tier partner in tightening its grip on gas supplies to Turkey and Europe. Allegations in one WikiLeaked cable that Italian Prime Minister Silvio Berlusconi and some pals have profited personally from this intimate relationship are not entirely surprising -- nor is it particularly shocking to read allegations of similar Eni activity in Uganda.

The details come in an unusually descriptive new cable released by WikiLeaks. The cable describes a Dec. 14, 2009 meeting between U.S. Ambassador Jerry Lanier and Tim O'Hanlon, vice president for Africa for Britain's Tullow Oil. We have written previously about scrappy Tullow, a serious player around Africa's Lake Albert region, which is believed to potentially contain more than 1 billion barrels of oil.

Here is the backdrop: Tullow was wishing to exercise a right of first refusal to buy the second half of two Ugandan oilfields in which it already held a 50 percent interest. But Eni somehow stepped in and, right around the time of the Lanier-O'Hanlon meeting, announced that it, and not Tullow, would secure the $1.35 billion purchase.  O'Hanlon asserted that he knew just how Eni had managed it -- the Italians had created a London shell company through which they were funneling money to Uganda's security minister, Amama Mbabazi.

This bit of news really irritated Lanier, who suggested that he was sick and tired of hearing of "corruption scandals" involving Mbabazi. From the cable:

Depending on the outcome of this major deal, we believe it could be time to consider tougher action - to include visa revocation - for senior officials like Mbabazi who are consistently linked to corruption scandals impacting the international activity of U.S. businesses, U.S. foreign assistance goals, and the stability of democratic institutions.

Lanier said in the cable that he planned to confer with the local British High Commission, plus the Irish ambassador, and talk about writing a joint letter to President Yoweri Museveni expressing their dismay "about these very troubling signs of high-level corruption in Uganda's oil sector, and advocating for the open and transparent sale of oil assets and management of future oil revenues."

We do not know if those meetings took place or if the letter was written. However, the deal was overturned just seven weeks later and given to Tullow under the same terms as Eni.

If you want to make some enemies in Nigeria, just say you're from Shell -- especially after Wednesday's WikiLeaks release. Cables from 2009 and 2010 indicate that the oil company -- the firm with the longest history and the most tarnished reputation in Nigeria -- has infiltrated government ministries, speaks of its Nigerian colleagues as amateurs, and seems to have U.S. diplomatic help in pushing its agenda through the national assembly.

Shell has been operating in Nigeria since 1936, and over the decades, it has been the most prominent international oil company operating in the resource-rich Niger Delta. Its mishaps are almost as old, but things took a particular turn for the worse in the early 1990s, when Shell was allegedly complicit in the government assasination of local environmental activists who were protesting the oil pollution in their communities. Shell was kicked out of those communities and only recently let back in.

Yet in a series of cables discussing Nigeria's Petroleum Industry Bill (PIB), an effort at sector-wide reform that has been held up in the assembly since 2008, it becomes clear just how much influence Shell still wields.

Shell -- and, according to the cables, all international oil companies operating in Nigeria -- are adamantly opposed to the legislation, as it stands to "reduce the corporation's [Shell's] overall value in Nigeria." As such, Shell told the U.S. ambassador that the company and its peers would be reaching out to diplomats from the United States, Britain, and Denmark to "convey points on the bill to GON [government of Nigeria] policymakers," a Feb. 10, 2009 cable recounts. In a meeting in October 2009, the U.S. ambassador asks "what the Embassy could do to help" with the congressional committee working on the bill. The ambassador also reminds Shell Managing Director Ann Pickard "that the U.S., U.K., Dutch and French Embassies had already made a joint call on [Nigerian national oil company] NNPC General Managing Director Dr. Mohammed Barkindo" regarding the bill. (Nigeria is was the fourth-largest OPEC oil supplier to the United States in September, the most recent month for which data is available.)

But more disquieting is the influence Shell wields within the Nigerian government. Pickard recounts direct meetings with former Nigerian President Umaru Yar'Adua as well as other top oil officials. This isn't unexpected. But in a meeting between the U.S. ambassador, Pickard points out that Shell is able to keep tabs on the Nigerian government's dealings with other oil partners China and Russia in part because "Shell had seconded people to all the relevant ministries and that Shell consequently had access to everything that was being done in those ministries."

Of course, there are damning revelations about the government of Nigeria's role in the slippery oil business as well. Shell alleges in the February 10 meeting that illegal oil sales go all the way to the top of the govenment: "Oil buyers would pay NNPC GMD Yar'Adua, Chief Economic Advisor Yakubu and the First Lady Turai Yar'Adua large bribes to lift oil."

Still, the revelations about Shell will likely overshadow those pertaining to the Nigerian government -- at least in Nigeria, where corruption in the government is a well-recognized fact. There, the cables will hammer one more nail into Shell's coffin as far as public opinion is concerned. It doesn't help that the company refers to its local colleagues in incredibly demeaning terms.  A cable recounting a Feb. 23, 2010, conversation with the U.S. assistant secretary of state for African affairs, Johnny Carson, recalls: "Amateur technocrats run the oil and gas sector according to Shell’s Peter Robinson. They believe that they can control the industry via spreadsheets and pushing through the PIB."

For a population that has lived for decades with oil -- to little benefit -- Shell's political obituary writes itself.

John Jennings, a former Shell chairman, once remarked, "Oil breeds arrogance because it's so powerful." And where arrogance and power meet stand the world's top oilmen, wielding obscene amounts of money and influence while providing the world with its most critical resource. Tom Bower's new book details how their behavior over the last two decades has made them some of the most hated and mistrusted people on the planet, and why that has had little effect on the world price per barrel.

In Oil: Money, Politics and Power in the 21st Century, journalist Tom Bower accepts and admires the logic behind the production and consumption of oil, and resists the temptation to proselytize about fossil fuels, peak oil, or the environment. Though some of his conclusions seem inevitable, he simply presents the evidence for readers to judge themselves.

Among his subjects are the senior leadership of the four major oil corporations (BP, ExxonMobil, Chevron and Shell), oil traders, politicians and Russian oligarchs. These heavyweights and their interactions provide the drama in Bower's narrative. Looming large above all are Lee Raymond of ExxonMobil and John Browne of BP, both of whom, Bower argues, possess the quintessential qualities of a good oil executive: intelligence, vision, vanity, and arrogance.

But it is John Browne who occupies center stage in Bower's work, and it is easy to see why. Ousted in a 2007 boardroom coup, Browne famously rebranded BP as "Beyond Petroleum." Browne sought to remake BP through aggressive cost cutting and an environmentally friendly vision. At the height of his renown in 2001, Browne was granted the title "Baron of Mattingley" by Prime Minister Tony Blair and, in addition to taking a seat in the House of Lords, began to sign his correspondence "Lord Browne." An employee absorbed from Amoco in BP's 1998 merger with the U.S. company responded to this perceived affectation, "I only believe in one lord."

Read on

Among the most literary of the diplomatic cables released this week by WikiLeaks come from the U.S. embassy in Kazakhstan. Of those, most interesting for me is the unusual, realtime window into the emotion, the ambition and the palpable anger embedded in the struggle for control of the country's oil and the power that goes with it in this nascent petrostate. Front and center on stage are among the biggest oilfields in the world -- Tengiz, Kashagan, and Karachaganak -- in addition to Chevron and Shell, President Nursultan Nazarbayev, and his powerful son-in-law, the princely Timur Kulibayev.

The takeaway: Not much has changed since Richard II.

One main pawn in the dramas is Maksat Idenov, a super-competent administrator who was put in charge of the Kazakh oil company KazMunaiGas, or KMG, but who is exposed in a pair of cables to be slow to grasp political reality: Nazarbayev obviously had flattered Idenov by telling him that his job was to administer the state's crown jewels -- its oilfields. And Idenov -- willfully ignoring the history of Nazarbayev conveying just such nonsense to one foolish minister after another over the last couple of decades in order to keep the trains running on time, while in fact his trusted son-in-law, Kulibayev, actually ran things -- had chosen to believe him.

Read on

In the coming weeks, we will see the rollout of the two most-watched entries in the global electric-car race, the Nissan Leaf and the Chevrolet Volt. Both are in the headlines today, and here is the detail that caught my attention: The Leaf, writes Nick Bunkley in the New York Times, will get the equivalent of 99 miles per gallon.

For months, a drumbeat of pessimism has threatened to drown out earlier optimism about the possibility of an electric-car juggernaut over the coming decades. Electric cars and hybrids will overwhelm power grids, we are told. Governments, specifically President Barack Obama and the leaders of most of Europe, Japan, and China, are too far ahead of consumers, warns the Economist. Few will buy a car that could stall on the way home from work, U.S. News predicts. At 24/7 Wall Street, Douglas McIntyre writes, "The dream of a highway populated by electric and other low emissions cars may be no more than hope. If wishes were horses, all the beggars would ride."

And yet, that figure -- 99 miles per gallon, calculated using an Environmental Protection Agency formula in which 33.7 kilowatt hours equals a gallon of gasoline  -- tips the scales a bit in my eyes. We've all been on the showroom floor, and after admiring the design lines of this or that model, we take a sharp look at the sticker, and the prominent display of the premier maintenance cost we will face, which is fuel. Consumer psychology is a tricky thing, but suffice it to say that the number 99 is a lot different from 28 or 36. The EPA hasn't certified what the Volt will get on the road, but it's going to be in the same ballpark, and I think that is going to turn a lot of heads.

In the Financial Times, Ed Crooks writes that Nissan CEO Carlos Ghosn is already doing a victory lap, arguing that his $5 billion bet on electric cars has been vindicated. That's a bit premature. But pay attention to the number 99. It's important.