An Energy Policy that Makes Cents (and Sense)
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Advocates of the peak oil theory, such as myself, have a patriotic duty to propose solutions to the challenges of addressing peak oil. Before the policy is unveiled, there is first need for some discussion.
The challenges of dealing with peak oil are so daunting as to require strong government action (federal, state, and local). Some folks believe government should stay out of ALL business issues and let the "free markets" solve all problems. However, governments do have a role to play in very large endeavors affecting the entire nation. Raising and maintaining armed forces and the interstate highway system are two examples where government activity is and was required. Don't even get me started on the Fed's current activities with Bear Stearns (BSC), which I will address in a future posting. For now, suffice it to say that the challenges facing the United States as a result of peak oil are so daunting, and the economic threats are so serious, as to require the government to act in a substantial, urgent, and intelligent fashion.
Oil is at $100/barrel and rising; the US dollar is dropping like a rock; the S& P500 has done nothing in years, and inflation is high and rising. CEOs of major oil companies took the unprecedented steps to publicly say, at the World Economic Forum in Davos, that worldwide oil supply will not keep up with worldwide oil demand by the year 2015. That is only 7 years from now. If oil prices are $100/barrel today (while oil supply and demand are balanced), what will prices be in 2015? Regardless, it is well past the time to take action.
Since the US has no real energy policy today, the time constraints enforced by peak oil will require our new energy policy to be correct the first time around. I suspect we will not get a second chance. Below is an outline of a comprehensive energy policy that tackles the challenges of peak oil head-on. It will require sacrifice and present many challenges to the people of our nation. We must be up to the task.
- The first step in an energy policy that addresses peak oil is to start acknowledging the problem at the highest levels of government. No difficult problem can expect to be solved until it is first acknowledged. We need to make the words "peak oil" as prevalent on the lips of Americans as is "Britney Spears" or "Hannah Montana". Every citizen needs to know exactly what is at stake here.
- Although the policies listed below are, for the most part Federal initiatives, it should be understood that state and local governments, including the association of governors, should be major role-players. They are best able to address issues like mass transit in their cities, power generation and transportation issues which are unique within their boundaries, and other similar aspects of an overall energy policy which are best dealt with at the state and local levels.
- Since transportation is the US's largest use of imported oil (gasoline), we need to immediately increase tax incentives for highly fuel efficient vehicles. At the same time, we need to place *very* large penalty taxes on purchases of low mileage SUVs such as the Hummer. Yes, Americans are free to drive what they like, but if they chose to buy a vehicle that threatens America's economic prosperity and security they must be made to pay through the nose. The tax revenue from the sale of these idiotic vehicles will directly fund the the tax rebates for fuel efficient vehicles. That way, if your neighbor drives a Hummer, you can thank him for helping to pay for your Prius.
- We need higher fuel economy CAFE standards passed sooner rather than later. The recent legislation Congress passed on CAFE standards won't be fully implemented until 2021(!). Are you kidding me? The game will be over by then if we don't take more intelligent and immediate action. We cannot continue to let the US automobile lobby draft legislation governing mpg standards.
- American automobile manufacturers must receive government incentives to design and manufacture alternatives to the gasoline powered internal combustion engine. The assistance received will depend on the quality and timeliness of delivery of said vehicle, be it an electric, natural gas, or hydrogen powered solution. The goal should be for the vehicle to have a range of at least 300 miles per fueling and be manufacturable by 2012.
- Such an alternative vehicle solution will likely be powered by electricity. We therefore need a massive government led initiative to build out our non-oil and gas based electrical power sources and to update our electrical grid infrastructure. We need to free up natural gas for transportation and heating.
- Power sources that should be financially and otherwise encouraged by the government are nuclear, wind, and solar. We will need massive amounts of electricity from these sources, and we need to begin right away. Nuclear plants require long lead times to license and build and we should have started yesterday.
- Ethanol is a losing proposition in my opinion. It has probably saved some oil, albeit at what cost? The price of grains have skyrocketed causing real inflation at the grocery store for everything from bread to beef and chicken. Also, with the affects of global warming, the water requirements of ethanol will become a real issue. Government should stop subsidizing ethanol and instead put these subsidies on wind and solar energy as well as building out the electrical grid. Besides, ethanol actually encourages further use of gasoline and in some ways gives American's the impression that it is the "answer" to higher gasoline prices. It is not.
- The US has huge coal reserves, but coal is dirty. We need more research done in the area of coal-to-liquids and coal gasification so that we can harness the energy in coal without destroying our environment. I don't know if that is possible, but surely we need to find out. Soon.
- The Federal government, the state of Alaska, and Canada, need to get off their collective duffs and commit to building a much needed, and long overdue, natural gas pipeline from the gas fields of Alaska and Canada to the lower-48. This is such a common sense deal I get ill everytime I realize it is STILL not a work-in-progress.
- Conservation guidelines should be issued by the government and local utility providers. I cringe when I see huge displays of Christmas lights which burn all night long. It makes me realize how clueless most Americans are and what a long way we have to go. We should be penalizing such indiscriminate use of power.
- "Alternative fuels" should be encouraged but only after careful study of all relevant data. Ethanol is an example where short-sightedness, simple analysis, conclusions, and "bandwagon" jumping can end up with failed policy initiatives which are harmful to the overall objectives of a sound energy policy. (I don't consider wind and solar to be "alternative" energy sources. Wind is economically viable today, and solar be shortly).
- Lastly, as a country, we really need to evaluate our policy of not drilling for oil off the coasts of California and Florida as well as the existing drilling limitations in Alaska and elsewhere.
These then should be the central themes of a comprehensive energy policy. The policy needs to be drafted in simple unambiguous terms. The tax policies need to be long term and phased in/out in a sensible fashion so that business can plan their budgets accordingly without having to worry about the outcome of the latest election.
Now, my friends say, "Mike, what's with the nuclear solution, I thought you were an environmentalist?" Well, I am an environmentalist! Burning coal is simply killing the environment, period. CO2 is one issue, but the mercury being dumped into our water table is just as serious an issue to me. Anyone know the half-life of mercury? We have ignored peak oil for so long, we have no choice now but to license and build nuclear reactors as quickly as possible. Yes, I understand the issue of nuclear waste. That said, the Energy Department has been working on the technology to post-process spent fuel and make it less hazardous. We should increase research and development of all stages of nuclear energy. We will need all the non-oil energy we can get.
With respect to global warming, all I can say is this: peak oil has the ability to completely wreck our economy by the year 2015. Global warming, which I am in complete agreement with, does not have the power to wreck our economy for decades. So, which is the most urgent threat? Answer: Peak Oil. The solutions of either address both, but I bring up the distinction because it is a question of priorities and urgency. I surely wish Al Gore's recently announced "Alliance for Climate Protection" campaign would have instead funneled their 3 year $200 million Euro resources into a campaign called "Peak Oil Education and Policy". It would have accomplished the same end result, but done so in a way that would have mobilized solutions at a much quicker pace. I'd give anything in the world if people used the phrase "peak oil" as much as they did "global warming".
Another question I get is, "Hey Fitz, why would you allow drilling off the coast of Florida and California?". Well, the obvious answer is because we need the oil! Also, drilling technology has become much safer,ecologically, than in the past. Some people say, "Fitz, aren't we smart to hold onto these oil reserves and use other's oil first? Our oil will just get more valuable, right?". Well, I suppose that is one way to look at the issue. The other is that we continue to devalue our currency by sending billions out of the country every day to buy foreign oil. Also, it takes from 4-10 years to adequately bring an offshore oil field online. My fear is that we simply don't have the time to wait any longer.
Other friends say, "Mike, we simply can't economically afford to do as you suggest." My response is that we cannot economically afford not to do what I am suggesting. For years the US auto industry has complained about higher fuel-efficiency standards. They cried "It will be the end of US automobile industry!" Well, GM (GM) and Ford (F) got their way, yet they have continued to lose market share to Honda (HMC) and Toyota (TM) at such a rate that, I believe, they will be out of business, or at least completely marginalized, within the next 3 years. Instead of looking at peak oil issues and spotting a huge opportunity, they have insisted on building large SUVs and Hummers and ignoring reality.
It amazes me.
The other side of the business aspect is very positive. General Electric (GE) is the largest builder of wind turbines in the world, and would benefit greatly if a massive program of wind energy were to be put in motion. Also, the variability of wind power has a need for software programmers and utility companies to work on solutions for maximizing delivery and use of wind MW. There is huge potential for developers in this area. Today, many solar companies are profitable, growing, and creating jobs and hiring employees. Boone Picken's company Clean Energy Fuels (CLEN), which trades on the NASDAQ, is pushing the envelope in natural gas powered vehicles (NGVs) and the infrastructure to support them. Pickens also has a vision of an economically revitilized mid-continent with economic activity centered around wind power up and down the central plains where favorable currents swirl. Pickens is now building a huge windfarm in the Texas panhandle. Organizations like Shai Agassi's Project Better Place are taking the lead in promoting electric vehicles and a concept he advertises as a "virtual oil fields". In fact, an agreement was recently reached between Better Place, Renault-Nissan, and the State of Israel to begin a mass deployment of electric vehicles and the infrastructure to support them. The end goal being to eliminate gasoline powered automobiles from the country. My understanding is that Denmark has also reached a similar agreement.
The longer the United States waits to address the realities of peak oil, the harder the task will become. If we do not act soon, it will simply be too late and we will suffer a decrease in our standard of living which, I can assure you, the American people are not only not ready for but can scarcely imagine. We are already beginning to see the affects of peak oil today, and in the last few years. On the other hand, prudent action, while requiring sacrifice and hard work, can revitalize our country and usher in an entirely new era of economic prosperity. I certainly hope the next administration choses the later path. You, the reader, can make a difference by speaking directly with your elected officials on the issue. Send them an email today with a link to this Seeking Alpha article. Remember, it feels good to be a true patriot!
Disclosures: I do not own HMC, TM, GE, CLEN, and I certainly do not GM or F.
This article has 40 comments:
Dwyer
Tradable energy Quotas is a system that subsidises the frugal energy user and the heavy user does the subsidising.
Further the market works out the subsidy.
Further, the 20 year budget ensures consumption comes in on target.
Its good. Have a look if you have time.
s
The general process is called Integrated Coal Refinement (ICR) and can be researched easily online.
Reversal conversion of carbon dioxide to the atmosphere (creating greenhouse effect) has some active research in albedo modification through increasing cloud cover over the oceans. Here is a link to a basic paper on that proposal: ccc2006.ca/docs/Abstra...
- Just taking coal out of the ground ruins the environment; no need to burn it.
- Just like coal, nuclear doesn't make sense unless you ignore the pollution it generates and the lost real estate and water. In 50 years of trying the waste issue hasn't been solved; stop throwing money at lost causes.
- Additional coastal exploration for fossil fuels damages a key ecosystem from which we're getting food.
I could go on. My only point is: go back to the books, you have a lot more to learn.
Some additional thoughts:
We need to tap all available hydrocarbon sources. North America has some of the largest deposits of oil sands, coal and shale oil in the world.
There are processes available to convert these to fuel today at prices well below current crude prices.
The problem is the very large capital expenditures needed and the risk to these investments if crude prices were to fall.
The solution (not that I like gov. intervention but we have that already) is for Congress to pass a price support for all alternatives at say $60-65/B equivalent. This would allow the massive capital expenditures necessary to bring these (and other) alternative sources on-line.
And, it would cost the taxpayers nothing assuming crude prices remained above $65/B. Should crude fall to say $40/B, then, yes, taxpayers would support less than 20% of our energy needs at $65/B but the remaining 80% would be at $40/B for an average of $45/B. Would that not be better than the current price of $100/B?
And, if this policy were announced, crude prices would fall immediately - speculators would flee the futures market and crude producing countries would increase supplies to try to persuade companies not to invest in alternatives. They fear alternatives.
Seems like a win-win.
However, coal can be used and converted to fuel in an environmentally friendly way and the land returned to a better state than it was (reclaimed). We can develop energy in coastal areas without destroying them (it is happening elsewhere in the US).
You point is to limit these potential sources of fuel. So, I assume that you would rather pay $6-10 for a gallon of gasoline in the future and live in a world with a much lower standard of living. You cannot have it both ways.
I agree with almost everything else you said - I think it will be a long time before the majority of people will follow this good advice. Most of them are stuck in the denial phase of the whole peak oil - coming energy shortage. I would have to say when the consensus opinion changes to believing this is happening in the states I think there will be incredable anger in the general population. "I cant drive as big a car as my dad could" is going to push some people over the edge. I worry about that.
At least in Europe we have (mostly) accepted that we are no longer the rulers of the universe and (might) weather this particular storm a bit easier.
impaler
The first is the 'immediate' discovery of an as of yet unknown alternate source of energy that is on par or exceeds that of oil. Like the 'dilithium crystals' that power the Star Trek Enterprise. None of the current alternatives are scalable on a level that can sustain our current lifestyle and population or they are hazardous to our health and the longevity of the planet itself.
The other solution is mass enlightenment or an overnight evolution of our species that immediately allows us to realize that the civilization that we have created is simply not sustainable in the long run. This won't happen all on it's own. It might happen if the worst case scenario of peak oil becomes reality but there is no guarantee. What ever comes after the fall of this civilization may be even worse. Unbridled growth does not work on earth. The universe may be a different story. But we live on a planet where growth appears at least to be limited by natural forces.
So sit tight. Do what you can to prepare for the possibility. But don't forget to live a decent life today.
The price of oil is still cheap when we consider the amount of work this energy will accomplish. We are still using it to perform meaningless activities so the price must necessarily continue to rise until its true worth is valued. As the costs increase, purchasers will and are evaluating the importance of their uses and adjust accordingly by using less or demanding alternative and more efficient means to accomplish the same tasks.
Travel to places where peoples can't afford personal transportation and you will see that flexible, efficient, and plentiful public transportation does exist. We suffer from the opposite dilemma here. Because almost everyone can afford their own car, the roads can't handle it and the transportation system breaks down.
The next President must have a coherent energy vision in order to stimulate positive rather than reactive economic changes. This President's activities have done us the service of pushing oil prices so high that our grim energy future has at least caught our attention. With luck, the next administration will seize the opportunity to stimulate investment in a clean, efficient, and sustainable energy outcome. We need to figure this out, not just for now, but for all time.
just use the markets: cap and trade all CO2 production, including gas and diesel.
the markets will find the most efficient answer.
meanwhile, continue funding fundamental research no market would ever pay for.
Krause
scriabinop23.blogspot....
And on ethanol: scriabinop23.blogspot....
It's called a VW Polo BlueMotion. I saw it at our local racetrack (Mazda Laguna Seca) in Oct. The VW rep. said it will never will never be imported from Europe to the US (not good enough in crash tests he claimed).
The fuel efficiency secret? It has an improved 3-cyl diesel engine. OK, it takes 12.8 sec for 0 - 60 mph, but it will do well over 100 mph. We don't need to slow down on the freeway; we need diesels! (And better aerodynamics.)
Heck, I'd buy one, but ALL diesel passenger cars have been ILLEGAL to sell in California for years! This is the real reason these cars are not being imported or built by US car makers. It is about time those of us with our heads screwed on put a stop to environmentalism run amok.
Diesels clatter noisily; its been fixed. Diesels smell bad; the sulfur has been removed. Diesels emit more NOx; its been fixed. Diesel engines cost more; $200 or $300? Chump change! Diesels emit sub-micron particles; a red-herring of a health issue, but its been fixed at a small cost to fuel efficiency.
Diesels always have lousy acceleration? Would you like a 500 hp super sports car that gets 25 mpg? Audi has an R8 sports car with a V-12 diesel.
Finally, the killer solution (but more expensive) is the plug-in diesel electric car that could be run on soy oil, or peanut oil, or jatropha oil, as well as that nuke power plant. But first we've got to stop the environmental insanity.
One point that I don't agree on with Fitz is the issue of nuclear energy. I've seen a lot more press about it in the past year particularly with regard to people that traditionally would have been against it (like Fitz, I'm assuming). One disaster on the scale of Chernobyl---whether accidental or a terrorist strike---makes it not worth it to me, particularly as these are closer and closer to large populations.
Nuclear waste is not the only issue and the arguments I hear in favor of nuclear power do not convince me. My favorite is that nuclear power is "green". It's only green until there's a problem and it's kind of like saying that transporting oil in the Exxon Valdez didn't pose a threat to the environment...until it ran aground.
Truth About Nuclear Energy", by Gwen Craven.
Ms Craven was very anti-nuclear, even before the Sierra Club turned against it. She has however changed her mind. You can read her editorial about her book on Amazon:
www.amazon.com/Power-S.../
Some interesting facts about nuclear energy from her editorial:
-Uranium is more energy-dense than any other fuel. If you got all of
your electricity for your lifetime solely from nuclear power, your
share of the waste would fit in a single soda can. If you got all your
electricity from coal, your share would come to 146 tons: 69 tons of
solid waste that would fit into six rail cars and 77 tons of carbon
dioxide that would contribute to accelerated global warming.
- Spent nuclear fuel is always shielded and isolated from the
public. Annual waste from one typical reactor could fit in the bed of
a standard pickup. The retired fuel from 50 years of U.S. reactor
operation could fit in a single football field; it amounts to 77,000
tons. A large coal-fired plant produces ten times as much solid waste
in one day, much of it hazardous to health. We discard 179,000 tons of
batteries annually--they contain toxic heavy metals.
- A person living within 50 miles of a nuclear plant receives less
radiation from it in a year than you get from eating one banana.
Someone working in the U.S. Capitol Building is exposed to more
radioactivity than a uranium miner.
US energy production:
* 75% of that baseload electricity comes from power plants that
burn fossil fuels, mainly coal, and emit carbon dioxide. Toxic waste
from coal-fired plants kills 24,000 Americans annually.
* 5% comes from hydroelectric plants.
* Less than 1% comes from wind and solar power.
* 20% comes from nuclear plants that use low-enriched uranium as
fuel, burn nothing, and emit virtually no CO2. In 50 years of
operation, they have caused no deaths to the public.
I hope some of these facts have at least made you question your fears about nuclear power. Hopefully Ms. Craven's book will help you realize just how environmentally friendly nuclear power really is. Hopefully articles like the one here by Fitzsimmons, will make it clear to all American's how incredibly important it is that we build up our nuclear power generating capacity.
Michael Fitzsimmons, excellent articles btw! Keep up the good work.
Projects that don't pan out would get cut.This needs to be on the order of trillions of dollars of research for a decade or more.
One of the biggest tragedies of the Iraq war is that we will have spent $3 trillion or more by the end of the war and we will have not achieved peace in the middle east, nor democracy, and certainly not a reduction in terrorism, nor secure oils supplies.
What we will have achieved is the removal of a brutal and evil dictator, and it only cost $3 trillion.
That is money that should have been spent on National Energy security/research that would pay real dividends and economic benefits for decades.
It is both comedy and tragedy when Bush says "we need to break our addiction to oil". He has insured that we are addicted to oil by doing nothing.
Additionally, we should ban or tax incandescent light bulb sales and replace them with LEDs or at least CFLs. Also wasteful is using tank waterheaters instead of small on demand, point of use waterheaters. All buildings should have SOLAR water heaters or at least pre-heaters. They are cheap compared to photovoltaics (but I am a big supporter of PV.) No pools or spas should be heated any other way than solar (OK, also geothermal if available).
The biggest waste of electricity is the resistance generated heat in long power lines between the power plants and the end users. About 50% of what is generated is lost (according to National Geographic Mag). So locally generated energy is always more efficient, especially SOLAR, or in some localities, Wind.
Also, no one mentioned TIDAL or RIVER currents as a source of non-polluting power. Florida Atlantic Univ. scientists estimate the Gulf Stream, right off shore could supply most of the electric power needs of the state. Importantly, TIDAL power can be generated very close to the end users in the big coastal cities.
Finally, I believe the biggest reason the building insulation as well as solar and wind tax credits started in '70s were eleminated by the Repubican administrations that followed, is that once a citizen has an energy efficient home powered by solar or wind, he has been freed from big power and energy companies. Large scale adoption of alternative and locally generated energy would seriously cut profits for big companies (and save individual citizens lots of dollars). Of course, citizens don't make big campaign contibutions and big companies do. Politicians want to get re-elected. Now you see why very little has been done to solve the energy problems we all face.
Observe the sudden change in China allowed by that government's limitation on births to an incredible (to most countries) ONE child per couple. Little of the amazing improvements in education, standard of living, etc. would have been possible without that program, and of course, abandoning communism in favor of some free enterprise and capitalism (with a dictatorial government.)
Unfortunately, most people's religious and moral belief's will keep Democracies from ever adopting such a Draconian ,if logical, plan. Our love of freedom of choice combined with the average person's ignorance of the problems we face, let alone what solutions are best, creates a huge dilema.... Hum, that's kind of scary if we are to compete with China.
BUT , as is usual, the political will to act doesn't come into play until the situation is critical and, unfortunately, politicians don't recognize that the situation is critical NOW.
The above issues should be Labeled under National Security and implemented using whatever means is necessary including emminent domain.
Try replacing 250 million vechicles with multiple fuel usage engines. Its Too late now. Meanwhile, who is willing to buy a vehicle that can't be refueled when necessary. Rather than just a tax on Hummers, I would penalize the makers of these type of vechicles...say $50,000 on every such vehicle produced. Meanwhile change the mileage requirements to include every vechicle in the fleet rather than the overall fleet.
While, all-electric cars can be built right now, can our electrical grid handle the extra electrical demand even 50 million such vehicles would require?
No ladies and gentlemen, we are screwed,glued and tattooed.
What can we do over the next 10 years to solve the problem? SOLVE IT...nothing.
To help mitigate the oncoming disaster...mitigate not solve...the EPA must be abolished for the next 10 years or so, Coal fired plants must be mandated with major incentives to reduce emmisions but no penalties if they are not reduced...penalties can be introduced when our survival is ensured or better technology becomes an option. ANY state whose citizens try to employ the NOT IN MY BACKYARD policy and whose politicians support them will be cut off from all federal funding. National Energy Security is the priorty.
If a technology can be verified, it should be funded. The "no stone left unturned" policy.
We have to treat this like a knife at our collective throats. It will cost Trillions...so what...think in terms of what happens to our way of life if we don't.
While I think most studies show there is value to society from government funding of fundamental research, what Mr. Ftizsimmons is calling for here is a much more government-directed funding of specific technologies. Is there reason to hope that the outcome of such a grand project will be any different than it has been so far? According to a recent study by the Government Accountability Office (for a summary, click here: www.researchrecap.com/.../), "[W]hile DOE has spent $57.5 billion over the past 30 years for R&D on these [advanced energy] technologies, the nation’s energy portfolio has not dramatically changed—fossil energy today provides 85 percent of the nation’s energy compared to 93 percent in 1973."
Mr. Fitzsimmons, acknowledges that GM and Ford, because of their dedication to pick-up trucks and SUVs, "will be out of business, or at least completely marginalized, within the next 3 years." So, let them live with the consequences. Why should taxpayers come to their rescue? Rather than bail out the Big 3, the government should remove obstacles to Americans gaining access to more-efficient vehicles produced by other companies. In France, the energy-efficiency of the CURRENT new car fleet is already at the level of the much-vaunted U.S. CAFE standard for 2020.
In short, my sentiments are similar to those of MMarkkkk and vboring. However, MMarkkkk calls on people to drive at 55 MPH voluntarily. All well and good, and my father and I have tried it. It is down-right frightening to drive at 55 MPH when SUVs are zooming up to your tail at 80 MPH and then swerving around you at the last minute. (And once a state trooper pulled my father over for driving at 54 MPH in on a stretch of highway where the max speed limit was 55 MPH -- he wanted to know if something was the matter with his car!) Let's start, in other words, with enforcing the speed limits we already have!
However, I’m afraid I must agree with GH, Otis the impaler and hotdoggy. The most important issue is the survival of the planet. Well, of course the planet will survive; but humans just might not. I won’t go into this in detail; but the simple fact that we are on the verge of losing ¼ of all species should be enough to convince most folks – because we are all so interlinked that the loss of most of the rest will surely follow. If you doubt this – bees and butterflies are now dying off. Global warming will contribute heavily to the further losses, as will our very complicated, interconnected ecology.
It would be nice to keep things luxurious or even tolerable, but this will certainly go first, and only in small part because of peak oil. But to focus on that as the most urgent thing is truly short-sighted, even if it helps to ameliorate the transition. If we don’t prioritize around “global warming,” our children’s grandchildren will suffer greatly.
We need to be very careful indeed about our “solutions” – but we surely need them. We should be looking into everything that offers any possibility – both privately and via government But we need to look into these things very carefully. Too many of our so-called solutions have caused even greater problems.
I don’t think we dare use nuclear energy. And we should not drill offshore or further erode natural areas left, such as Alaska. It would be very short-sighted indeed, because once the harm is done, we can’t undo it. It’s too complex. We don’t even understand the full causes of global warming, nor why it is happening so much faster than we were expecting.
Over and over, we’ve heard that this or that is actually safe, that we’ve taken out the former bugs – only to find out the very hard way that we were wrong. After Three Mile Island, they came out with a report on why it happened. It was either due to: design flaw; to errors on how it should be operating procedures (if I remember that one right); or to human error. In other words, it could have the result of anything at all. We have learned one thing: we no longer hear much about how we will find out later how to take care of negative effects of things we do now.
As for doing “small” things, as individuals and as governments – we must, and they will help, if only some. They also will help to convince people that things are truly serious. (I have seen it scoffed at on Alpha within the last month.) It will also help people to not feel silly about doing what they can to lower energy usage, to care for the environment, and to save our planet.
At the same time, we have ignored many things that just might help, failed to research others, and ignored things we already know will help. An example: I lived in Sweden quite a while back. Their usual standard of living then was more comfortable than our middle class’ is even now. And their energy usage (in a really cold country with long distances between cities) was one-half –that’s not a misprint, folks -- of whatours was then. Of course, we now use far more.
Even so, we are going to have to sacrifice, and insofar as it isn’t solved by developing earth-friendly businesses, our economy may also have to be sacrificed. Tough! We may have to just make do if we want to survive.
I thank my european leaders for having been foreseeing in this regard. Our economy is seemingly still in much better chape due to several good policy's, and were more established in alternative energy, in fact ahead of shedule even. Were already much more energy effeciant, but that can only alleviate a small part of the issue. We have more windmils than we had envisioned before 2010 now already, but we have also set the target high for wind energy until 2020 and 2030.
Even then, there is no limit to thinking what possible energy needs well have in the 21'st century. I spit on the people here talking poppulation control regulations and the like's, what an inhumane and unethical thought, borders facism IMO. Humanity needs to be able to evolve and therefore it will need increasingly more energy.
Try to have vision, vision even beyond mere peak oil issue resolvement. Im in my twenty's, i should envision 50 years ahead. I see the premature robotic dreams they had in the late 20th century come to fruitation in my lifetime, automatization is already a fast growing bussiness, rudimentary robots exist and get better. Computers evolve and decent robotic AI's are not that far in the future at this speed. Think of how much labour we could do in the future if we mobilized our potential to create an near-automated economy. Such progress would even allow us to take space economicly serious. But in the end, to enable us to evolve in this path, well need energy, lots of it, hughe amounts. Energy will be the power by wich humanity will be able to advance further. And the cheaper you can make the energy, the more effeciant the base of the economy will be in a near-automated economy.
The ultimate power of Wind and Solar is that there be virtually no limit to how much output you can get out of it. And their effeciancy can be improved for decade's to come. The cost to wind and solar power now is just a temporarily concern, and even this it's very fastly becoming a moot point. In the future wind and solar will become much more effeciant than any other energy source, to the point that it will virtually cost nothing. The world will get covered by solar panels and wind mills in the decade's to come. Theyll supply the robot's that will work for a fraction of the cost of a human trough advanced technoligy.
In the end, it won't be the country with the cheapest human labour in mass that will become the most powerfull. there is a whole new economy to create with robotics, and it will be up to the first country that takes this vision really serious that will come the fruit of being the most advanced and productionaly potent.
I was told by a good friend recently that I am the most "confrontational&... person she knows. I accept this, and can only blame my engineering background for making me a stickler for details and my attempts to get things "right". That said, I am trying to be a better person, and not make things debate personal. In that spirit, I feel the need to respond to some of the comments on my article:
Virtual Optics: I am aware of coal gasification success, in particular the work that Sasol (SSL) is doing. I am concerned that the process is perhaps not as clean as you appear to believe it is. My understanding is that there was a similar effort under way here in the states and it was recently shuttled due to cost, water, and environmental concerns. I am not an authority in this area, which is why I didn't go into more detail other than to say "more research" since the US does have such large coal reserves.
GH: I am aware taking coal out of the ground is environmentally harmful. The problem I have is that the scope and magnitude of replacing over 20 million barrels of oil a day is so huge, and we have neglected the problem for so long, until it is now an immenent crisis, that we have to find a way to use our biggest energy assest (coal) in the cleanest way possible. I would LOVE to rely on only clean renewables, however, a back of the envelope calculation proves this utopian goal as completely impossible in the short term. I also take issue with your stance on nuclear power, for some of the same reasons. France is a good argument against your comments. Although everyone has alot to learn, I appreciate you letting me know that I do as well.
Mr Hurwitz: sustainability definitely deserved mention, and all I can say is "I forgot" to add it, and I agree with you. Aaron Wissner, whom I met after the WSJ article on him, is a pioneer in this area. See:
sustainabilityconferen...
widicusf: wrt your comments on natural gas, I respectfully disagree with you. Natural gas is indispensible! I would go further and suggest the US accelerate our LNG potential. Just because Russia and Iran control 51% (your number) of nat gas reserves surely cannot be an argument that we don't make use of what we have, and the huge reserves in Alaska and Canada. After all, that is my rationale for building the pipeline I suggested in the article.
vboring: wrt incentives, I respectfully disagree. The tax credits currently in place are responsible for what progress we are making on wind and solar deployment. Many companies doing work in this area are on record now saying if the 2008 tax credits are stopped by Congress, they will stop further deployment.
hotdoggy: plz see above comments wrt your nuclear issue.
RMax and others: on population control, I should have touched on the issue. As a human being, I would be opposed to enforcement of any restrictive policy. That said, in terms of education and potential tax penalties, I would be supportive.
THofler: couldn't agree more on your diesels comments. The tax incentives I recommended sure certainly be valid for these. That said, it shows how behind the US is in this area when manufacturers don't even bring these solutions to US markets.
ariesl: One of my bullets was conservation, and I proposed guidelines by the government and utility providers. Perhaps I should have gone into more detail, but it is such a no-brainer to me that I skipped over it. Of course, I agree with your comments.
Mr. Steenblik: You might have misunderstood me. I don't want the DOE to get taxpayer money. I want private industry and citizens to get the tax incentives. The DOE Is part of the problem here along with the EIA.
Marol: wrt your comments on the survival of the planet, of course I agree that the "survival of the planet" is in everyone's best interest. That said, a world that slips into economic chaos due to the neglect of the impact of peak oil will not be a very pleasant place to be, in my opinion. A clean planet where wars are being fought over oil and food is an interesting concept with which I would disagree with. I AM an environmentalist, afterall, I love my fly fishing and I like to drink clean water and breath clean air. It is incorrect to suppose my attempts at addressing peak oil issues mean that I am opposed to a clean environment. To not use nuclear energy is to put more of the "solution" on the back of coal, which is the single biggest source of the environmental problems we have today. I used to be against nuclear as well. More look at the magnitude of the energy gap left by peak oil convinced me that nuclear is a must. I am all for individual energy frugality, which is why I want "peak oil" on every American's lips, and for the government to lead in the education of our citizens. I live this way in my personal life. Regardless, we are all going to suffer a decline in our standard of living with respect to energy usage as the price continues to escalate. My suggested solutions to deal with peak oil are not to maintain our "luxurious" ways, is it to prevent a complete collapse of our economy which would lead us all into the abyss. Being a "pure environmentalist" without regards to economic realities is "pure folly." The two must be balanced and we must be realist and do the best we can to make intelligent tradeoffs. Please give me credit for pushing wind and solar.
1.) Proton-beam-induced fission of Thorium - how the world can have lots of electricity for 200,000 years:
en.wikipedia.org/wiki/...
www.inesap.org/bulleti...
einstein.unh.edu/FWHer...
2.) Voluntary driving at 55 mph on Illinois tollways it is unsafe. People come racing up on your arse and swerve away that the last second. The best compromise is to drive in the right lane of the interstate (I-90 for me) until you come upon a semi driving as slowly as you want to go. Then follow a polite distance behind. That way, everyone sees the slower semi and begins to plan to pass that larger, more visible vehicle; they therefore tend not to ride right up onto your bumper before doing so.
FYI, I have seen no evidence that truck drivers are slowing down. The only trucks I have seen driving at their legal, 55 mph limit are fleet trucks belonging to the Frito-Lay company. They go 55 and I happily follow behind them whenever I see them - which is on four occasions in the past two weeks.
I drive an ancient (1990), decrepit Geo Metro 5 spd, 1.0 liter on my 200 mile per day commute across the corn tundra of Illinois. I get 53 mph by driving slower than the legal speed limit whenever it is safe to do so. Why can you not buy a car today that gets this kind of gas mileage? Does anyone really think that they would not sell?
3.) Future automobiles: Yes, the Chevy Volt is nice to see, but it would also be nice to see a cheap, low-tech option similar to the Geo Metro using a small engine, possibly a diesel, with a super-aerodynamic shape. Such a car built today could probably be sold at the same price as a Chevy Aveo and get 75 mpg on the highway. A low price will do wonders to encourage rapid adoption and rapid reductions in overall consumption.
4.) Since nukes will be part of the solution, Canada and the USA should jointly fund the development of nukes designed to drive Fischer-Tropsch plants to convert their coal into liquid fuels, and also to wash and crack tar sands. Nukes are ideal for making the steam required for both of these operations. Nukes therefore make alot more sense than burning precious natural gas in order to produce liquids from the tar sands.
4.) There will be two Hubbert's Peaks. The first one is happening now due to the largely artificial restriction on supplies of crude that would have flowed from Iraq had Iraq not been isolated over the past 20 years. Had Iraqi fields been modernized and developed in parallel to fields belonging to its neighbors, there would be 10 million bpd more oil production capacity today than there is. But were that the case, none of the neighboring nations with peaking or post-peak fields would be raking in the gigabucks than they are raking in now. In fact, no one in the oil biz would be making quite as much money as they are today and no one would be seriously pursuing alternatives either for that matter. Enough said about the first peak.
The second peak is the real one and it might lie 20 years or more in the future AFTER all the deep oil lying in oceanic waters is developed. See these links:
www.geotimes.org/june0...
www.searchanddiscovery...
The past six months of news coming from Brazil confirms what an intelligent observer might gather from the combination of the two links above. Such an observer would then consider what the Brazilian news likely implies for the rest of the GOM, West Africa, the Canadian Scotian shelf, the vast areas around the Falklands. Yes, the oil is deep and it will not be as cheap to extract as Arabian oil has been or as Iraqi oil will be. But it is nonetheless very likely there in massive quantities, and possibly also in very light sweet grades, and in gas condensates that are so coveted by refiners.
On the basis of the probable availability and the probable production from these deepwater sources, I would venture to guess that the real, future Hubbert's Peak will be north of 100 million bpd and possibly as high as 150 million bpd if the CO2 problem proves to not be a problem, or if some kind of massive sequestration (like seeding ocean algae blooms with iron and phosphorus proves practical and beneficial.
www.sciam.com/article....
www.futurepundit.com/a...
www.climateoptions.org.../
news.bbc.co.uk/2/hi/sc...
news.bbc.co.uk/2/hi/sc...
One possible spin-off of fertilizing the ocean is that fisheries might thrive if the creatures at the base of the food chains thrive. OTOH, we could screw up big time and create a climatological disaster like the one foreseen in Greg Benford's book Timescape
JimG: You are, of course, absolutely correct in pointing out the geothermal omission, and I thank you for reminding me. Geothermal has huge potential, and although many of the known sources are in somewhat remote areas, what should be taking place by private and government geologists is a detailed study of the Earth to find those places where geothermal can most economically be utilized. It's clean, and it's soooo good.
User 134716: like your comments wrt nuclear energy being used to create the steam for the canadian tar sands. that said, the water to cool the reactor will, i suppose, need to come from the same river that is already being milked dry to process the sands, so i don't know if this model will work up there. worth investigating though.
With respect to your 1st and 2nd peak oil theories, be sure you are taking into account the existing decline rates. Prudoe Bay, the North Sea, and, it is thought, several of the biggest reservoirs in Saudi Arabia are now on the decline curve. Some as much as 7-9% a year, although some only 4% declines (with massive drilling efforts). Yes, it is true that Iraq has much greater potential, which is exactly why the US has boys dying there. Anyone who thinks it is about "democracy" or WMD needs their heads examined. One thing about Iraq that alot of people don't know is that much, even most, of the oil there exists under high pressure. That is, if you look at the wells in Saudia Arabia, you almost always see an electric motor there to pump. In many Iraqi fields, you merely stick a straw into the earth and the oil comes out of its own accord. Iraq is therefore the cheapest in terms of production costs. With respect to the newly found elephant fields (Chevron in the gulf, PBR offshore Brazil), yes, they are huge fields. However, Chevron's is in 7000 ft of water, and 20,000 feet further through the ground, some of it very hard rock). This is more than 5 miles which will have to be drilled from a point in the gulf many miles from shore, which will require tankers to transport. Further, it is the opinion of many geologist that this field is not one big reservoir, but instead, many smaller reservoirs - meaning each will need to be drilled, and we now that just one being drilled is a huge challenge. Earliest production is scheduled for 2013, and will be *expensive*. In the meantime, the decline rates of the existing fields continues. I don't know as much about the Brazilian field, but my guess is that it's not alot different in terms of challenges, but whether is it one big reservoir will make a big difference. Regardless, you must agree that the number of "elephant" discoveries has certainly slowed down in the last three decades, and that existing "elephant" fields are mostly in decline (with a few exceptions). So, I am not sure I agree with your two peak theory. I do believe that worldwide demand will, at some point in the near future exceed the 85 million BPD we currently get, but, I must agree with Jim Mulva, CEO of Conoco Philips, when he recently stated that he thinks man will most likely not exceed 100 million BPD production. With that in mind, and a quick look of the EIA's estimate of 150 million BPD demand target in the not too distant future, and you can see why I am concerned. I'd rather take the conservative approach and plan for the possibility that my analysis is correct, as to do otherwise, and be wrong, would be disastrous economically and, therefore, socially.
THANKS to everyone for their comments. I read them all, even if I did not respond to each individually. You guys give me hope for the future!
Best regards,
Mike (the author).
www.searchanddiscovery...
My apologies for any confusion caused by the incorrect link above.
Great discussions!
Pass the salt!
1) Patriots with the will and means for the Liberal viper pit in Washington should run for office. I have a friend running for Senate this year and I am running for Congress in 2012. The enviro lobby must stop and that means those of us with money won't be bribed off, we will run for office as Patriots only and if nothing else, expose nationally what is going on and the lack of action due to massive INVESTMENT profits on both sides of the aisle. This is the nasty elephant in the room no one wants to talk about. Politicians should not be allowed to own energy stocks while in office and for a period of two years afterwards.
2) The solutions written above would work but morality changes only with pain. Those at the top are not feeling it, meaning it is up to those of us at the bottom to change it. We're in for a real fight and expect lifelong scars to win this battle, people with power do not relinquish it easily.
3) Military misadventure must be expected while we draw down troops globally and focus inward domestically. In a world where rogue regimes have/are building nukes and dramatic food and energy increases, it is a matter of 'when' and no longer an 'if' they will be used as revolting populations provide dictators another venue for venting popuation rage - war. Same net result of Depression beginning in the 1930's. Adolph Hitler gets credit for ending the Great Depression. Think about that statement.
If the economy collapsed tomorrow due to such an awful but now very plausible reality, would you have enough supplies to surive for three to six month? Think in terms of 'what if my neighbors started starving?' Would you have the means to feed them all? Probably not. Have a back-up place to go with food and fresh water. If all goes well and we miraculously avoid the above, then think of it as nice recreational property and they are getting real cheap right now.
4) We must all pass this information along to friends and family whom have buried there heads in the sand, looking for Socialism bail-outs. We can innovate our way out of this mess but it will be a decade long process. Be prepared to help family and friends during some hard-times but if they ignore your warnings, we cannot feel bad when we escape to a getaway and get back to help them later on when we can. Sounds awful, but if I prepare and warn my neighbor and he doesn't listed, am I responsible for his/her death? Nope.
All sounds cryptic, but I am not retreating. I will have my family safely secured and then attack the morons in Washington by being amoungst them to hopefully kick asses into action.
ks
No one likes limitations, like no guns, no more than 1 child per couple, no vehicles less than 10MPG, etc. I feel that there is some humility that needs to be learned before it is too late. Sure we can make rules about everything, but it would be so much easier to have people be innovative about power savings by themselves. I see a streetfull of car dealers in my area each have 50-100 lightpoles lit up at night, so bright that at 4 miles away, I can barely see a dozen stars in the sky. There's no reason for this kind of waste. Most people don't turn off lights or computer monitors when they leave work. Why? Too lazy.
I have one comment to the previous poster that drives 200 miles through Illinois... Why? Nice of you to have 53MPG car, but you are still using 4 gallons of fuel every day. I use about a half-gallon, and I am ashamed. Except that the way to my work is between 2 large highways, and I can't use a bicycle there, otherwise I would consider it.
I had an idea a while ago to put air-cleaning panels on the side of the road, a bit like them ionic breezies. We could also apply a layer of solar panel on them, and get noise pollution, electric street lights, highway safety barriers, and cleaner air at the same time. Cleaning them is still a hurdle I haven't solved.
Kudos to PG&E to selling CFL's for <$1. I am replacing my bulbs one after another. Except I think that the larger part of my energy consumption is still poorly efficient refridgerators, and PC's that don't have true EnergyStar capabilities. PG&E might contemplate giving out refunds for power strips with motion detectors, as well as for EStar PC's.
I would like to buy a newer car with one of the 80-100MPG. I can't - they are not available yet. Why?
If the US gov't made a contest for cars, batteries, and super capacitors into mass production, first company to reach the next level of cost/efficiency gets $1B, you will see a lot of companies jump on the bandwagon. And make it an international contest.
Why can't we buy into a fund that owns GE (or other) windmills, and parks them in farmer's fields, gives the farmer a cut, and feeds the grid? All three parties would benefit.
I agree with many people in this thread. Let's flatline our oil consumption immediately.
But I do think we need to focus on the long-term future for our planet and humanity -- even at the cost of short-term problems, including many very serious ones. Yes, a world that slips into economic chaos due to the neglect of the impact of peak oil will not be a very pleasant place to be" -- no joke! But at least it will be a world, which our grandkids can try to improve. I agree, this is a great bunch of responses.
seekingalpha.com/artic... is another serious (if less polite) discussion. Bottom line: I am very encouraged to see investors taking these topics so seriously. And notice, notice! Bush has come out for stopping the increase in greenhouse emissions. (Not nearly enough, of course.) Moreover, he did it due to pressure from business leaders (I haven't yet read the story; saw it in Marketwatch) -- they are catching on, probably from three forms of self-interest: 1) money; 2) distaste for the coming social problems; and 3) support for the well-being of their descendants.
I am very impressed with the roadside ideas!
I too would love to see us all talking together -- brainstorming can often work wonders.
User "134716 here" -- I like that phrase enough to be tempted to change my own moniker to some number I would then immediately forget . . .
1. Self-reliance is vital.
1. a. Priority 1. Everyone plant a garden. It takes 3-5 years to become a competent gardener. It takes 2-5 years for many trees and berries to start providing crops.
1. b. Elect local block captains and organize emergency food storage and distribution in the event of a transport break-down, strike, terrorist attack, storm, etc.... Risks exceed 100%, uncertainty exceeds risk.
1. c. Practice deprivation. Two days a summer, have bike day to work for everyone. Close gas stations one day each weekend. Drop speed limits to 55 mph.
2. Free markets.
2. a. De-monopolizing communications infrastructure caused a radical re-tooling and cost savings.
2. b. Allow Feed-in Tariffs to create a free market. Power generation infrastructure is 69% inefficient (Livermore National Labs) because the regulatory monopoly protects that inefficiency from competition. Germany de-monopolized power generation infrastructure. At a latitude of Winnipeg Canada and the size of two mid-western states, now has more solar collectors than the entire United States. Last year Germans, at private risk, installed 4,000 megawatts of renewable power generation. California's highly subsidized regulated market has added 242 megawatts in the last 5 years. Free markets innovate.
2. c. Allow free market transportation networks. Regulated transportation is 80% inefficient (Livermore Labs) because current transportation is regulated and blocks innovation. CSX (railroad company) is currently running a TV add showing a Prius being loaded onto a rail care and state the can "move a ton 423 miles on a gallon of fuel." Yet ultra-light automated guideways, like Morgantown's Personal Rapid Transit (PRT), are blocked from deployment by urban planners. Morgantown's PRT was built to combat the 1973 Oil Embargo and has delivered 110 million injury-free, oil-free passenger miles. Bureaucrats have no checklist for innovation.
2. d. Stop worrying about CAFE standards; they are a red herring. We have the capacity, like Morgantown's PRT to change highly repetitive travel from a high cost capital event (car, gas, parking, real estate, etc....) to a lower cost service at 200 miles per gallon. Oil prices doubled in 2007, we have a 2X per year problem. CAFE standards are weak by 100 times, they are a .02X per year solution (50% increase in standards divided by 25 years to rotate the car fleet. We must preempt the problem, we cannot adjust it.
3. Women's rights and birth control.
4. Universal service for 6 months to strengthen the social fabric and train in civil defense.
I have studied peak oil for some time. Its great to have so many folks interested. My conclusion is that its too late to do anything that will avoid world chaos (read "The Long Emergency"). The reason is that some oil producing countries are going to start hoarding their oil for their own use. When that happens the oil market will explode. Humans are just too greedy, stupid and selfish to take rational steps to solve the peak oil problems. Big oil has been paying off congressmen for years to make sure that no meaningful conservation or alternatives are developed. Once the pain of starvation and lack of heat begin to be felt by American citizens is their anyway we can prosecute the big oil turkeys for leading us down the path to ruin?