Why energy independence won’t happen any time soon Posted by: McQ
on Friday, June 06, 2008
In 1972, the US imported 12% of its oil needs. Now we're near the 60% range. In those intervening thirty-something years, we, as a nation have done very little to address that problem.
R.J. Samuelson, addressing the proposed cap and trade program, provides a litany of why it is a bad idea. A cap and trade system essentially outlaws carbon (and will most heavily impact the poor), but there's an even more important point to be made. There is nothing to replace what is essentially banned:
Reviewing five economic models, the Environmental Defense Fund asserts that the cuts can be achieved "without significant adverse consequences to the economy." Fuel prices would rise, but because people would use less energy, the impact on household budgets would be modest.
This is mostly make-believe. If we suppress emissions, we also suppress today's energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or nonfossil fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won't automatically substitute. If the supply of electricity doesn't keep pace with demand, brownouts or blackouts will result.
At this point (nor anytime in the near future) we have no alternative fuels to switch too which can fill the capacity such cuts in carbon will demand just to keep us even, much less address the future demands of a growing economy. We haven't any real plans for increasing nuclear power. Cellulosic ethanol is not a commercially viable process. And wind and solar are hardly refined enough or big enough (or technologically advanced enough) to fill the bill.
We still have a huge need for oil and coal, at least in the short term, and we're ignoring the assets we have for the vaporware of the future. Maybe it's just me, but I usually don't sell my car until I have another car sitting in the driveway.
A perfect example, however, of what we face in the realm of bringing new carbon based assets on-line or refining them can be found, in all places, in Elk Point, SD. There, the citizens have voted in the majority to build the first new refinery in 32 years:
By a solid 58 percent to 42 percent margin, county voters approved Hyperion's request to rezone 3,292 acres of farm land for a new classification, Energy Center Planned Development.
The obvious advantage to everyone, of course, is the increase in refining capacity of the nation overall. More product into a market which is seeing increasing prices - and, promises Hyperion, it'll do so with the latest "green" technology:
Hyperion touted the so-called "green" technology in its proposed energy center, which it claims would be the world's cleanest. The refinery would process 400,000 barrels of tar sands crude a day from Alberta into low-sulfur gasoline, diesel and jet fuel.
Then there is the local economic impact in an area that could use it:
Supporters cited the once-in-a-lifetime economic opportunities the $10 billion project would bring.
An average of 4,500 construction jobs would be required over four years. With the refinery up and running, Hyperion pledges to create 1,826 full-time jobs at hourly wages of between $20 and $30.
But even with the vote approving the project (i.e. the democratic process at work), and even with obvious economic benefit to both the community and the nation, I have to wonder if it will ever be built:
While conceding defeat, opponents vowed to keep fighting the controversial project on every imaginable front, pressing on with a lawsuit it filed against the county over the zoning procedures and opposing Hyperion as it applies for a bevy of state and federal permits.
"We have strategies in place to slow or delay all the permit processes," Ed Cable, chairman of the anti-Hyperion group Save Union County, said after the vote.
And, of course, there are plenty of groups out there which will be happy to fund their fight against the will of the people.
This is a microcosm of why we find ourselves in the shape we do today. Because of it, we get further and further behind the energy power curve and are approaching the point where, in my opinion, this problem will become insurmountable. At some point we won't be in the shape to bring viable alternatives on-line (nuclear) nor will we have positioned ourselves to take advantage of the assets we presently have in abundance (oil and coal) for the short term.
What will suffer, of course, is the economy, as it falters and stagnates. And who will suffer? As is always the case when the economy goes south, those who can least afford it suffer the most.
We must wake up to the fact that our energy independence depends on a short-term plan of exploiting (in as environmentally friendly way as we can, given current technology) present carbon based assets as well as future plans to exploit viable alternatives (nuclear) as much as possible while we bring future alternatives on line to replace our carbon based fuels. However, the path we're on at present, as exemplified by what I think will happen (or, in reality, not happen) at Elk Point, SD, will only bring future economic disaster.
Your post got me thinking. For me, one of the most prominent signs of a third world country (having lived in 3 of them) is that the power supply is inconsistent. When you flip the light switch, something may or may not happen, or you may get some power but not enough (the "brown-out" you mentioned). If people continue to refuse to allow new power generation capability, I wonder how long before we reach that state in the US. California was close a few summers ago (having lived through it there), so I don’t think it is as far off as people might think at first.
That would have a horrendous effect on our "information-based" economy. When we no longer provide the best infrastructure in the world, we will lose a lot of our competitive edge, wrecking havoc on our economy.
"Fuel prices would rise, but because people would use less energy, the impact on household budgets would be modest"
They are assuming that energy use is discretionary, as in discretionary income. For middle and upper incomes this may be true, but for lower incomes this is obviously not true. Their argument also applies to such things as food. Bread at $50/loaf would have a modest impact on household budgets for the same reason. Of course the impact on health is another story. I assume their cure for that problem would be a massive increase in the food stamp program and Joe Kennedy’s boutique charity, Citizens Energy Corporation.
Since the impact on household budgets would be modest, perhaps we should call this a modest proposal.
Someplace there are two spooks from the former Soviet Union sitting across from each other with a bottle of vodka between them - the conversation goes something like this between slugs -
"My plan was genius! the Americans have bound themselves into knots with their slavish concern for the ’environment’. Our pawns in the green parties have done everything we desired, and more!"
"Yes, comrade, a pity your plans didn’t work out until many years too late, but, who could know? Still, a good plan, a good plan, To you!"
On the plus side, if things get bad enough, laws will be changed to make the endless series of challenges and delays, well... not endless, and a lot shorter.
Environmentalism* and NIMBYism are tenable only in the presence of enough surplus wealth (and that means energy) to make their costs affordable; in that respect they’re self-correcting problems*.
(* Environmentalism as a movement is a problem. Conservationism isn’t.)
I wonder why no one is asking the obvious follow-up question? We know that the 545 Federal elected officials are standing in the way. The question to ask is "Why?" Why are we ’saving’ our oil, oil-shale, coal and natural gas? Are we waiting for the rest of the world’s easily exploitable resources to be used up so that our ’elite’ have a monopoly? Nothing else makes much sense.
Sorry, baking bread will no longer be permitted because yeast fermentation releases too much CO2. Wonder Bread has already begun closing bakeries. Wine production will also be prohibited for the same reason.
Other industries such as iron works and cement plants will also be shut down in the name of Green. These four industries account for 1% of the annual CO2 deposits. Fossil fuels, another 3.6%, but hey, welcome to the eighth century.
I wonder why no one is asking the obvious follow-up question? We know that the 545 Federal elected officials are standing in the way. The question to ask is "Why?" Why are we ’saving’ our oil, oil-shale, coal and natural gas? Are we waiting for the rest of the world’s easily exploitable resources to be used up so that our ’elite’ have a monopoly? Nothing else makes much sense.
Juan,
Congress can’t think ahead when enacting, say, social security, or medicare. How are they going to think so far ahead on something like this?
Here’s an excellent summary showing that it is Democratic opposition that is consistently blocking moves towards energy independence.
Congressman Roy Blunt put together these data to highlight the differences between House Republicans and House Democrats on energy policy:
ANWR Exploration House Republicans: 91% Supported House Democrats: 86% Opposed
Coal-to-Liquid House Republicans: 97% Supported House Democrats: 78% Opposed
Oil Shale Exploration House Republicans: 90% Supported House Democrats: 86% Opposed
Outer Continental Shelf (OCS) Exploration House Republicans: 81% Supported House Democrats: 83% Opposed
Refinery Increased Capacity House Republicans: 97% Supported House Democrats: 96% Opposed
SUMMARY
91% of House Republicans have historically voted to increase the production of American-made oil and gas.
86% of House Democrats have historically voted against increasing the production of American-made oil and gas. http://www.powerlineblog.com/archives2/2008/06/020696.php
This is a microcosm of why we find ourselves in the shape we do today. Because of it, we get further and further behind the energy power curve and are approaching the point where, in my opinion, this problem will become insurmountable. At some point we won’t be in the shape to bring viable alternatives on-line (nuclear) nor will we have positioned ourselves to take advantage of the assets we presently have in abundance (oil and coal) for the short term.
Nuclear and coal are fine for electrical generation. But oil use is low in those areas. Almost negligible actually. And you won’t be using nuclear for heat generation and coal doesn’t seem all that practical for all but large facilities for heat generation either. I doubt the emissions issues makes it worth it either.
And the one place oil is essentially exclusive is transportation.
So increased nuclear and coal won’t impact the oil situation much at all.
It seems the big answers are 1) accept it and stay the course for now (which means consume less, pay more) 2) drill more
Number #2 is fine. It keeps more money in the US. But world demand growth could out pace increased output by the time max output is reached and then what do you do?
Number #1 is going to become untenable fast. The interweave between energy costs, transportations costs, product price for all products, and consumer behavior amplify the impact of oil prices.
"In fact, coal to liquids is ready to substitute for oil on the highway and in the sky. Yes, coal makes a huge difference to transportation needs."
Imho, CTL won’t make any progress under the next President whichever of the two it is considering processes are at best C02 neutral and more likely a C02 gain over oil.
And looking over some of the work on CTL, it looks promising, but does not appear as far along as cellulosic ethanol.
I firmly believe, after watching the last Senate hearings with oil company execs, that there was a full scale press to ram a "AGW fix" in the works, but don’t think that Warner-Lieberman is the only action in this regard. The hearings clearly showed that Congress, especially the Democrats, have no interest in pumping more oil any where in the US.
Nuclear Power coupled with electric cars is the only way to reduce the use of oil and carbon in any serious way. We have the nuclear technology, we just need a better battery. That said, I don’t think we will start building nuclear power plants on anywhere the scale we need until something happens.
That something will be the application of one of these carbon taxes/cap n’ trade costs into consumer products. Right now, the vast majority of people think that if people just recycle a bit, ride our bikes more, and use flourescent lights, we’ll be fine. They imagine a carbon tax maybe adding a few cents onto their bills.
These people are going to be in for a shock when they see their plane ticket include the carbon tax. That’s when it will hit them that this is not a good idea. Even if its revenue neutral, it will still force lifestyle changes that will not be very welcomed on a personal level. Sure, riding your bike to work sounds great, IN THEORY, but in reality most people don’t want to do that.
We can only hope a few states try to implement this before it goes to national to act as a canary in the mineshaft.
How about having more meaningful and tougher targets for automotive fuel efficiency? That could help to slow demand for gas in the future. It won’t ever put demand into reverse, but it could slow the rate of growth in demand. In 2006 the US used 175 bn gal of gasoline in 2007 the US turned 25% of its corn crop into around 3bn gal of gas (ethanol equivalent)which is about as much gas as US drivers wasted in traffic jams in 2004. So the most effective way of reducing dependence on foreign oil would be to make cars a little more efficient. If the average fuel efficiency of vehicles on the US’ roads rose from 17.9 miles per gal to 18.9 mpg, then the total volume of gas used would fall to 166 bn. Who’s for a Japanese micro car?
So the most effective way of reducing dependence on foreign oil would be to make cars a little more efficient.
I agree that making cars more efficient would help but Cars are not the problem. Try this on for size - stand alongside your nearest busy intersection and count the cars that go by in an hour. At the same time, count the SUVs and trucks.
BINGO! In many areas of the country, the truck/SUV outnumber cars by a wide margin. Most cars have fuel averages in the mid 20s for city and about 30 for highway. That is twice the fuel economy of automobiles in the 1970s. The big difference between us and Europe or Japan is the number of SUVs and trucks on the road versus cars. And trucks, unlike cars, do not have any mandated fuel efficiency requirements. Mandate economy standards for SUVs and trucks that approach that of cars and then you might have something. But so long as the American family can ride down the highway in their tricked out Suburban, you can kiss off conservation as a major aspect of the national fuel economy strategy.
