An Energy Policy That Makes Sense, Revisited 90 comments
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On April 4 (2008) I published my first energy policy here on Seeking Alpha. Oil was around $100/barrel. Roughly one month later, oil is up another 20% and now over $120/barrel; the US dollar is dropping like a rock; the S& P500 has done nothing in years, and inflation, food and otherwise, is high and rising. CEOs of major oil companies took the unprecedented step to publicly say at the World Economic Forum in Davos, Switzerland 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 $120/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. Yet still no word from the President and Congress on a real energy policy to prepare and protect America from the realities of peak oil. Why?
I again submit a comprehensive energy policy below. It has been updated with the excellent feedback I received from the readers of Seeking Alpha. I commend you all for your interest, intelligence, and passion.
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. It needs to be implemented with the urgency of a “crash” program, like the Manhattan project. We must be up to this task. There is no alternative to failure.
- The first step in an energy policy that addresses peak oil is to acknowledge 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 a large component of imported oil usage (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 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 [as in NOW]. 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. Internal combustion engines should be required to satisfy the so-called “open fuels standard”. That is, they should be required to run on gasoline, ethanol, methanol, or any combination of these fuels.
- 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 alternative vehicle solutions will likely be powered, in part, by electricity. We therefore need a massive governmen- 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 NOW. 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 cost of grains has 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 in a cost effective manner. 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. ConocoPhillips and BP have committed to building this (no Exxon participation?). Governments and industrialist should support this effort. Planning and construction need to begin immediately and be accelerated.
- 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). Biofuels (cellulosic ethanol and methanol) surely have a significant role to play, but let’s not get emotional on the subject. Let the scientists and engineers make the call, not politicians. Geothermal should be utilized where appropriate and cost effective.
- 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 oil assets will take years to bring online, and we need to start NOW.
- We need to increase the tax on gasoline, not decrease it! I know this will not be popular, but we must discourage gasoline consumption. Meanwhile, the gasoline tax receipts should go directly to support wind, solar, and nuclear energy production.
- We need to develop electric mass transit for people and goods. The French have done it and power it with nuclear energy. The Germans have done it and powered it by solar and geothermal. The US again lags in energy policy. Aren’t Americans tired of falling behind Europe in terms of energy policy? Are Europeans really that much smarter than Americans?
- We need to encourage local sustainability in energy and food production. We need to encourage people to grow their own gardens, supply locally available solutions. We need to encourage population control both in the US and globally. Self reliance and frugality is required.
- Lastly, the citizens of the US must demand political leadership on this issue. As voters, we must make it clear that we will not re-elect politicians that continue to put the number one threat to US national security on the back burner. There is no issue that demands more political urgency than peak oil. Period. We need qualified and knowledgeable people to run for office on a platform that places an energy policy front and center.
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.
Windfall profits taxes on the oil companies is an idiotic idea and counter productive. We have an oil supply problem, so tax the US companies that are providing oil? This is madness.
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 rendering it less hazardous. We should increase research and development of all stages of nuclear energy. Bottom line is this: we face such a huge energy crisis 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. Now, the solutions of either address both, but I bring up the distinction because it is a question of priorities and urgency, If only people and media used the phrase "peak oil" as much as they do "global warming".
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 now. 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 chooses 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!
I firmly believe peak oil will be the dominant investment theme of the next few decades. ConocoPhillips (COP), Schlumberger (SLB), Neighbors Industries (NBR), StatOil (STO), and Chevron (CVX) all remain favorites of mine. For mutual funds, I recommend that people stick with Vanguard Energy (VGENX), Vanguard Precious Metals (VGPMX), and Fidelity Select’s Energy (FSENX), Energy Services (FSESX), and Natural Gas (FSNGX). For high yielding energy plays in 401k plans, the Permian Basin Trust (PBT) and Hugoton Royalty Trust (HGT) are attractive. I continue to advise investors to stay out of the broad S&P500, US Bonds, and to have some US dollar hedges in your portfolio. In addition to the energy investments above, I think one should have some precious metals exposure in terms of gold and silver bullion or with the GLD and SLV ETFs.
Disclosure: The author owns all of the above listed securities except SLV.
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This article has 90 comments:
The one energy resource that we have in abundance that is cleaner than coal is natural gas. Drilling technology has opened up very large shale deposits. Natural Gas could be a bridge fuel that could replace oil and coal in many applications thus reducing our need for more imported oil and starting to clean our environment.
How about developing cars and trucks that run on natural gas? New electric power plants will be built with natural gas as the fuel.
Eventually nuclear, hydrogen from nuclear, and synthetic fuels will dominate, but in the mean time I like the gas producers: APC, CHK, COP, DVN, ECA, EP, SWN, XTO. (I own shares of APC, CHK, COP and SWN)
Sad that we have no leadership in the government, which shows that politics and leadership are two different things.
I like microcaps in energy. At some point they will jump. I own DEJ, DNE, and Kodiak. Check them out. (I also own CXG in nat gas.)
Another religion, the Peak Oil cult, is based upon the twin myths that (a) hydrocarbons are so-called "fossil fuels" and (b) hydrocarbons were only formed twice in the history of the universe. The existence and profitablity of a company named Transocean (RIG) should be the final nail in the coffin of the "fossil fuel" hoax. The enhanced Enterprise-class drillships will drill in 12,000 feet of water and to 40,000 feet total depth, more than twice as deep as the mythological biogenic "oil window" and
the deepest fossil ever discovered.
The Peak Oil movement is a political movement and not a scientific one. A high commodity price does not mean global oil production has peaked. 86 million barrels per day is more than the world has ever produced and that's just a fact. Peak Oil is therefore a theory, not necessarily a reality, and absolutely not a certainty.
Hubbert and Deffeyes both life long Democrats. If they had their way there would never be another oil rig contructed on the face of the Earth. They are like Al Gore now that he cashed out of OXY. Meanwhile he flies around in jets with an entourage of gas guzzling Secret Service SUVs and the most energy inefficient home in America.
Yes it's important to acknowledge all theories which is also why it's important to acknowledge the theory of abiogenic petroleum origin and the possibility that petroleum is not a finite resource. Hydrogen is the most common element in the universe and carbon is the fourth most common element in the universe. Think about that for a moment.
Disclosure: long NOV, RIG, PBR, & HAL ... =)
"yet there are nearly no engineers in leadership."
Yes, I know you said "nearly no engineers", but I thought I'd paste this link anyway:
bartlett.house.gov/Bio.../
Congressman Bartlett has been beating the drum about energy scarcity issues for a long time. I've seen him on C-Span and he is as knowledgeable as anyone about Peak Oil. Here is a link to his page on energy policy. (Note the Hirsch report, which is must reading.)
bartlett.house.gov/Iss...
Maryland should be very proud to be represented by someone with such excellent and varied credentials.
www.setamericafree.org...
A Blueprint For U.S. Energy Security
And your worried about taxing the profits of oil companies?
Why? We are already giving oil companies $80 billion a year in tax credits and subsidies, making the oil industry just about the lowest taxed industry in the country at about 8%.
And then there are the other hidden costs of oil, largely paid for by tax dollars. we are talking hundreds of billions annually.
All told, about $800 billion annually including the subsidies.
What isn't paid for in taxes, is paid in the private sector, one way or another. And there's the over $300 billion that oil adds to the trade deficit, and you can see that oil already is ruining our economy.
www.setamericafree.org...
By comparison, congress is offering $6 billion for next year for solar, wind, geothermal etc combined.
And take a look at this proposal to achieve 69% solar powered electric grid, by 2050, spending less in public money than was spent on the high speed information highway, over about the same time period.
Scientific American A Solar Grand Plan
www.sciam.com/article....
I would emphasize solar thermal plants more than the concentrating PV that this proposal does, but it shows what solar can do.
Solar thermal plants can store heat to generate power at night. Molten salt seems like the best storage medium, it holds 99% of it's heat for 24 hours.
Here's what one company says about their solar thermal power plants.
"Solar thermal power plants such as Ausra's generate electricity by driving steam turbines with sunshine. Ausra's solar concentrators boil water with focused sunlight, and produce electricity at prices directly competitive with gas- and coal-fired electric power."
"All of America's needs for electric power – the entire US grid, night and day – can be generated with Ausra's current technology using a square parcel of land 92 miles on a side. For comparison, this is less than 1% of America's deserts, less land than currently in use in the U.S. for coal mines."
To see what's already happening with solar thermal, go to Green Wombat, where there are several articles.
blogs.business2.com/gr.../
Transportation- plug in hybrids. The average American driver would get 100 mpg overall, doing most of their commuting on battery power, and recharging for $1 at night. Energy experts say the grid can already handle the nighttime charging.
www.pluginpartners.org/
Nuclear may be appropriate in some locals, for lack of anything better, but overall, nuclear is a really bad idea.
It's dangerous
The Argonne National Lab says that an airplance crashing into a reactor could cause a complete meltdown, even if the containment building isn't compromised. Remember the twin towers?
Nuclear plants can cost $500 million each to dismantle when they're worn out.
"Nuclear plant owners are responsible for costs to dismantle retired units, dispose of waste, and decontaminate the site. Each unit has its own decommissioning trust fund, paid for by customers. Wisconsin ratepayers have spent $1.5 billion for the eventual decommissioning of the Point Beach, Kewaunee, and Genoa plants."
Transporting waste from all over the country to Yucca Mtn. Nevada is not only potentially dangerous, but expensive.
"Part of our electric rates go to payments to the federal Nuclear Waste Fund, which is intended to fund the construction of the Yucca Mountain repository in Nevada and pay for transportation of waste to the proposed disposal site. To date, Wisconsin customers have paid about $600 million into this fund." That's just one state
Nuclear power has no accountability for safety.
"The nuclear industry has long enjoyed limited liability for nuclear accidents under the Price-Anderson Act, which ensures that taxpayers, not industry, will pay for damages in the event of a serious accident."
Nuclear plants are not only slow to get up and running, but are expensive to build.
"Estimates of the cost to construct nuclear power plants are as high as $4,000 per kilowatt, as compared to about $1,400 per kilowatt for wind projects."
Nuclear doesn't make us energy independent. We import 65% of our oil and 90% of our uranium.
www.cleanwisconsin.org...
"The United States and Russia signed a deal that will boost Russian uranium imports to supply the U.S. nuclear industry, the Commerce Department said Friday…."
"The new agreement permits Russia to supply 20 percent of US reactor fuel until 2020 and to supply the fuel for new reactors quota-free.
So if, under a President McCain, we build a bunch of new nuclear reactors -- they could be fueled 100 percent by Russia.
I can almost hear Vladimir Vladimirovich Putin saying, "Excellent." " gristmill.grist.org/st...
Solar and wind are quicker to get up and running than both nuclear and coal.
And solar PV at the cutting edge is already cheaper than coal.
"Nanosolar’s founder and chief executive, Martin Roscheisen, claims to be the first solar panel manufacturer to be able to profitably sell solar panels for less than $1 a watt. That is the price at which solar energy becomes less expensive than coal.
With a $1-per-watt panel,” he said, “it is possible to build $2-per-watt systems.
According to the Energy Department, building a new coal plant costs about $2.1 a watt, plus the cost of fuel and emissions, he said."
from www.grinzo.com/energy/.../
Americans are being fed a bunch of dis-information about the supposed limitations of solar and wind. Large industrial interests, who want nuclear, coal, more oil, etc are distorting the conversation.
We are told that solar and wind are too intermittent. That hasn't been a problem for Denmark, which has 20% wind power.
"There are areas in Denmark and Germany who use more than 40 percent of their electricity from wind. From what I have read, they are less concerned about the intermittency than we are in the United States even though we aren't at 1 pecent yet. Why? Because we are told by the fossil fuel guys, hey, can't use wind, can't use solar, what about the intermittency. If wind gets up to 40 percent of the electricity we use and solar gets up to 40 of the electricity we use, the other percents of electricity we need can be made up from the fossil fuel plants that are still there. If they are run less at full power, they can last a long time. That can be your electricity `battery.'"
gristmill.grist.org/st...
And it isn't stopping Abu Dubai.
"Abu Dhabi is not content to just sell you the oil that fuels your SUV; now its going to sell you sunshine to keep your lights on and power your electric car when the internal combustion engine goes the way of the buggy whip. Masdar, the oil-rich emirate’s $15 billion renewable energy venture, and Spanish technology company Sener on Wednesday announced a joint venture called Torresol Energy to build large-scale solar power plants in Australia, Europe, the Middle East, North Africa and the United States."
They are eying the same American southwest, where the proposal in the SciAm article recommends that we Americans build solar power plants.
"The irony is too rich to leave unsaid: A leading oil producer invests billions in carbon-free energy while a leading consumer of fossil fuels - the United States - continues to subsidize Big Oil while offering only tepid support for green technology. It is inevitable that climate change will foster the rise of renewable energy - the only question is which countries and companies will profit from the new energy economics. It is entirely possible that the U.S. will trade energy dependence of one kind - on Middle East oil - for another - on Middle East and European solar technology - in the era of global warming. It’s no coincidence that most of the solar energy companies with contracts to build utility-scale power plants in California and the Southwest have overseas roots - Ausra hails from Australia, BrightSource was founded by American-Israeli pioneer Arnold Goldman, Solel is based in Israel and Abengoa is headquartered in Spain." from Green Wombat
"The greatest obstacle to implementing a renewable U.S. energy system is not technology or money, however. It is the lack of public awareness that solar power is a practical alternative—and one that can fuel transportation as well. Forward-looking thinkers should try to inspire U.S. citizens, and their political and scientific leaders, about solar power’s incredible potential. Once Americans realize that potential, we believe the desire for energy self-sufficiency and the need to reduce carbon dioxide emissions will prompt them to adopt a national solar plan"
from the SciAm article above.
How about some of the auto manufactures get real and present vehicles lighter in weight with smaller engines? That is how Europe responded to the higher fuel prices that were presented to them. There is an entrepreneur who presently is presenting a 3-wheel car (motorcycle) that carries 3 people and has a trunk for purchases. The inovative part is the engine which runs on Compressed Natural Gas and gets about 70 miles per hour. Why don't you present this type of fix and show the oil companies what you think of them, or, are they going to sink something like this like GM quashed the trolleys and red cars in southern California? And, the were only fined about $6000 for doing it but they got their gas burning busses on the streets of LA.
LOOK IN THE RIGHT PLACES!!!
wrt natural gas: the lower-48 and canadian production trends are not encouraging. that is why it is important to build the nat gas pipeline from alaska to the lower-48. also, i keep forgetting to mention LNG terminals in my energy policy - we need to license and build more of these! new york recently denied an application, and don't you know they will be the first ones to complain when nat gas prices begin to take off like gasoline prices are now. we need to be able to import LNG on both east and west coasts. i did mention nat gas as a transportation fuel. boone pickens is focusing on nat gas fleets, where the refueling infrastructure is more feasible. honda has a nice nat gas car, and there is a fairly cheap adapter owners can attach to their nat gas lines at home to refuel it. read about it here:
automobiles.honda.com/.../
pursley: so, the fact that the peak oil theory was predicted, and has been verified, for the largest oil reservoirs in alaska, the lower-48, the north sea, and mexico mean nothing to you?? the facts are this: currently worldwide oil production is ~85 million BPD. now, out of this, worldwide production must find an additional 4 million BPD of NEW oil every DAY just to keep up with the depletion rates existing fields to STAY at 85 million BPD. sure, there have been some elephant fields discovered lately (the first in a long while...) by chevron in the gulf, and two in brazil. however, all three of these fields are in deep water, deep rock, far from shore and existing infrastructure, and will take technology not existing today to bring into production and delivery. this will take 5-10 yr minimum. by that time, depletion rates at existing large reservoirs will be even greater than today. meantime, demand in china, india, russia, and the middle east will continue to grow. i mean, are you serious? this is a "liberal political conspiracy"? what are you smoking? actually, maybe you should smoke something. please, go online and look at the production rates of alaska's prudoe bay. also check mexican production at the cantrell oil field. check also north sea production depletion rates. not to mention the first verified peak oil theory, the US lower-48! man, get a clue. sorry to be so harsh, but you are so blinded by ideology you forgot to check your facts.
you talk about 2050 for an electric grid...man, we don't have that much time. sure, we need to plan for the future however, the CEO's of conocophillips, hess, and shell have all spoken publicly recently and said worldwide oil supply/demand d-day is 2015 (!). from the work i have done, i see no reason to doubt this, and if anything, i think it will happen earlier, perhaps 2013. if oil is $125/barrel now, what will it be in 2015? we are facing economic chaos very soon! that is why on a scale of urgency, peak oil simply dwarfs global warming and alot of other concerns, including your concerns on nuclear. i used to be against nuclear too. the bottom line to me is if we fall into economic chaos, it won't matter how "green" things are, it will be a very dangerous world to live in. that said, you don't have to sell me on solar, wind, geothermal - any alternative, i'm sold man!! we will need them all! however, just a back of the envelop calculation of the energy needed to replace 25 million BPD of oil at peak oil depletion rates - i mean think of it - we will need ALL non-oil energy sources, a huge buildout of the electric grid, and yes, nuclear to refuel the plug-in autos. the real problem here, from my view, is one of urgency. we simply started too late, and the last 8 years have been critical, and a total loss. had we made more progress to this point, perhaps i would go back to being anti-nuclear. at this point, i don't see that we have any alternative since the amount of energy needed is so huge. that said, i'm not even sure we can get new nukes online in time. it has just been a total failure of leadership by the US government when it comes to an energy policy. one thing is for certain, we have no time to lose.
chuck: i did mention nat gas powered transportation, as well as electric cars and electric mass transporation. why are you bangin on me man? i am on your side. in my previous articles, i mentioned Project Better Place's electric car work in israel and denmark. i mentioned boone picken's company that supports nat gas powered fleets. i mentioned honda's nat gas auto. i have looked in the right places...
Time is a commodity we can't make more of. All viable solutions need to be pursued, "pick lowest hanging fruit" with conservation being one that can be utilized immediately.
Help spread the news............
Fact is, people don't want to see the problem, and anyhow, it is much easier to pull a 'COMMY' and blame the oil companies.
Your points are well taken, FITZ. I commend you on your thought process. But: People won't buy it.
Here is how I think this is gonna play out.
First, I don't want to play the arrogant European here (We got a lot to learn from America/and we are only free peoples because of you guys),
but 3.51$ a gallon is so cheap, I just can't believe it. Every time I go on vacation, I usually go to the US, and I rent the biggest damn car there is (funny enough: last summer I was Dallas and rented a HUMMER)- because it is paradise for me.
So, before people really, really gonna start to think about this is, when gas cost 9 or 10 bucks a gallon.
It is the pain and nothing but the pain, the sheer necessity to change behavior, that brings change.
Darwin really got that right. Poetry socialists may like it not: In the end everything has to adapt to a changing environment or go under.
As long as gas is cheap - and don't get me wrong, it is cheap here in Europe as well, otherwise people wouldn't drive around in their convertibles for fun on a nice day like this - Detroit will figure it is more important to NOT get tough with their union buddies, instead of investing in R&D, Airlines will continue to ask their Unions for permission to become more profitable in order to buy at least on or two planes, that are up to date, when it comes to fuel consumption and so on...
Interesting, that the industries with the biggest need to improve are union dominated.
Bottom line: The market will take care of this. Should there be any government intervention, it will be aimed at the symptoms not the cause and will therefore be counterproductive.
Drive Diesel and save fuel!
Government is NOT an agent of the people - it is NOT "an institution of social service" or even "an amiable, though often inefficient, organization for achieving social ends" (Rothbard) - it is, by and large, as Albert Jay Nock put it, "a distributor of economic advantage, an arbiter of exploitation", or even more damning, in Rothbard's view "it is the systematization of the predatory process over a given territory. ...The State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively 'peaceful' the lifeline of the parasitic caste in society."
This is the entity to which you wish to turn for solutions? It will never be what you think it is, and therefore will never behave as you wish and hope for it to behave. Because this would be precisely contrary to its very raison d'etre. You are assuming a grizzly bear is a cute stuffed teddy bear. That's a lethal mistake.
Therefore, your proposal is at its core, fatally flawed.
The most important counter arguments to the abiotic theory involve various biomarkers which have been found in all samples of all the oil and gas accumulations found to date. The prevailing view among geologists and petroleum engineers is that this evidence "provides irrefutable proof that 99.99999% of all the oil and gas accumulations found up to now in the planet earth have a biologic origin." In this process, oil is generated from kerogen by pyrolysis. While, Thomas Gold hypothesized that bacteria exist deep within the Earth's crust, and are the source of the biomarkers, these bacteria have not been found, the natural abiogenic formation of high-carbon hydrocarbons has not been demonstrated, and evidence for the biotic origin of petroleum is abundant.
This can only loosely be classified as a theory (speculation would be a better term, or untested hypothesis), and it is one without any evidence whatsoever, whereas the standard view of petroleum biogenesis - which the vast majority of geologists hold - offers innumerable proofs. To hold the two up as peers is disingenuous to put it politely. It is yet another exercise in fantasy, intended to allow the holder of such a view avoid dealing with the unpleasant reality of peak oil.
www.financialsense.com...
The comments and views seem circumspect of our current economic and political environment, I strongly recommend this web site for any serious investor, or even anyone who wants to have an unbiased view on current affairs.
This is not going to be the walk in the park like in Iraq, but the mother of all wars. It's is fight for survival, it''s India or China or USA - all have nuclear capabilities.
Of course, the car companies have rejected my idea.
Please see my website safersmallcars.com
CrossingtheT: unfortunately i agree with you - americans, when it comes to energy policy, only seem to respond to pocket-book pain. equally unfortunate they usually respond in an incorrect fashion! i agree that gasoline in the US is too cheap, and that is why i proposed *increasing* that taxes on it, gradually over time to encourage movement away from it. the tax receipts going directly to alternatives.
ozzy43: one of the reasons for a central federal government is to tackle problems that society or industry cannot tackle (financially, logistically, or otherwise) on its own. examples are: stopping hitler, the manhattan project, the interstate highway system, and collecting and spending the money on these projects. an energy policy to prepare and protect the US against the realities of peak oil is every bit the challenge of these other endeavors, if not more so. if government doesnt lead the way with policy and tax iniatives, what is your solution? if you tell me "free market capitalism", i will tell you that "free market capitalism" is exactly what has put us in the dire straits that we are in today. that said, i AM a capitalist...unfortuna... even with oil at $126/barrel, i don't see the capitalists solving the problem. sure we have some wind and solar developments, but not nearly on the scale or the rate of deployment necessary to get us where we need to go by 2015 (or earlier in my view). ever watch CNBC? all those guys are in denail of peak oil, because they know the truth: if the equity markets were made aware of it, they would be contracting in a big way. yet, to ignore peak oil will make the contraction much sharper (and more dangerous) when it finally comes. the US government *must* be a leader on energy policy. if you continue to disagree after this explanation, i would love to see your solution - please write back and explain with more detail than your "cute teddy bear" analogy.
charliep: hey, i am all for the farmer! but arent farmers having a good time at the moment? land prices and crop prices are at all time highs? i am not against ethanol per se. my problem it's the bush administrations only sustaintive energy policy, and it is a mandate that is keeping gasoline prices artificially low, which continue to send the wrong message to america. americans think they have some kind of divine right to cheap energy which prevents us from taking a rational look at energy policy. with drought, higher demand for protein from developing markets, and population increases, i believe the american farmer will do very well in the years to come w/o huge ethanol incentives from the government. in the long run, not addressing peak oil will make costs for the farmer skyrocket: fertilizers, fuel, water, everything.
ozzy: interesting post you made. wrt oil formation, i have never bought the theory that oil is mainly decomposed dinosaurs which some have theorized. at 85 million barrels a day production, that would be a helluva lot of dinosaurs! i do believe that oil is constantly being formed. however, not nearly at the rate we are pumping it, and seldom in the large elephant type reservoirs with which we need to be discovering it in order to economically produce it. i totally agree that there are many people who come up with theories to contradict peak oil, starting from the point that they WANT to contradict peak oil (regardless of the true facts).
user145964: you are against government involvement like some of the other fellows. please, what is your solution? perhaps you guys prefer paying $10 or $20/gallon for gas with a US currency that continues to drop in value. because that is exactly where we are headed by doing nothing. part of the problem with the lack of a US energy policy, is that investors around the world can see that the US is exposed to peak oil more than anyone else. why invest in that a currency whose country using (and imports) more oil than any other nation on earth (25% of total oil production, with only 5% of the world's population). this is not sustainable.
user 169490: i am not against localized power, and state and local municipalities should be encouraged to use it if feasible. however, there are some technical details wrt financing, distribution, load shifting backup, payment etc. etc. that i am not sure i would agree are easily solvable. i think local distribution and supply are great for industry, and i think homeowners that can live off-grid should be encouraged to do so. that said, electrical power to supply alternatives to the gasoline powered internal combustion engine are going to be, simply put, *massive*. the figures i have seen show that not only is nuclear pretty much a central part of the solution, but that the grid must be built out to support delivery of these extra MW of supply to power transportation. look at france.
shopa: the idea for smaller, lighter, more fuel-efficient cars is exactly what a pentagon study back in the late 70's concuded during the oil crisis (however, it was a political crisis, not peak oil supply/demand). once the arabs turned on oil production and delivery to the US, oil dropped, gas dropped, and the pentagon report was shelved. wrt your extended rear bumper, have you concluded that most collisions are from the rear? the biggest problem to acceptance of small fuel efficient vehicles today is that people feel insecure when passed by a gas-guzzling hummer or likewise huge tuna boat. that is yet another reason to tax the hell out of such huge vehicles. if everyone drove a smaller, lighter, more fuel efficient vehicle, perhaps the insecurity issue would somewhat be negated. however, we will see gasoline prices force people to shift to smaller more fuel efficient vehicles - whether they want to or not.
this is simply a case of greed .. production is running at only 80/85%
but still we are in a crunch ?? LOL
I quote you"
CEOs OF MAJOR OIL COMPANIES took the unprecedented step to publicly say at the World Economic Forum in Davos, Switzerland that worldwide oil supply will not keep up with worldwide oil demand by the year 2015."
HELLO WHAT'S WRONG WITH THIS PICTURE ??? CEO's of major oil companies tell us there isn't enough oil to go around ??
Is this a Joke? this is like the tobacco companies telling us smoke is good for you.
Good.. then president Bush and his administration are a bunch of dick-less mobsters for not doing anything about this .. this is plain and simple, a criminal act by the oil companies and it's called extorsion.
Solution....... raise income taxes to oil/gasoline companies lower taxes on oil derived products
result : gasoline at $2.00 per gal. and heating oil at $1.25 per gal. those should be the pricing goals
"the biggest problem to acceptance of small fuel efficient vehicles today is that people feel insecure when passed by a gas-guzzling hummer or likewise huge tuna boat. that is yet another reason to tax the hell out of such huge vehicles."
Absolutely correct.. the fact that oil is not anywhere near depleted or depleting does not mean we need to waste it .
Also let us not forget the more important issue which is the state of our planet , oil, gasoline etc.. is a major pollutant and it is not getting any better. The technology to apply alternative energy to every day life is already available, if only we weren't ran by oil companies and a president and vice president with deep interests in oil, we would not be discussing this today. Just take a look at Europe were low emission, electric and overall smaller cars have been around for decades
That is true only if you grow corn .. if you grow broccoli it just plain suck
they pay the same price for fertilizers as you do but without the benefit
The Hall of Famers from the athletic world should be leading corporate America to compete in the golbal marketplace; High school dropouts who became multi-million dollar entrepreneurs should be running the US government and the federal agencies; whereas, the political class should be promoted to the American educational system beginning with the oversight of pre-schoolers.
i know corn is (also) used for cattle feed, now corn price tripled since the ethanol craze and the administration pushing it so much ... but now they are saying ethanol is not the answer and it's bad .. even more polluting LOL
they are also talking about importing cheap ethanol from Brazil because the corn to make ethanol here is too expensive ..
?!?!?!?!?? WTF
See this rather unusual discussion on youtube:
www.youtube.com/watch?...
I would be very interested in hearing what everyone thinks of Mr. Williams report.
"We are producing 86m barrels per day or so, more than ever produced." -- Warren Buffett
Is he lying?
World oil production
2006 - 85.17 mbpd
2007 - 85.20 mbpd
2008 - 86.94 mbpd
Source: IEA
Read it and weep.
A relative tight current supply due to underinvestment (oil was $8 a a barrel in 1999) does not mean global production has peaked.
Your claim that deep water fields "will take technology not existing today to bring into production and delivery" is propaganda based upon ignorance and misinformation. For example, the author of a recent Bloomberg article claims that 18,000 psi is a technological challenge. The author obviously has no understanding of the industry whatsoever. See here:
www.bloomberg.com/apps...
25,000 psi rated solution: www.slb.com/content/se...
According to Petrobras all the technology necessary is currently available: www.bloomberg.com/apps...
Also your claim that "this will take 5-10 yr minimum" seems to be grossly inaccurate. According to Petrobras they will begin production at Tupi in 2009. See here:
www.bloomberg.com/apps...
Furthermore, if you're going to use Alaska as an example of someplace that's peaked and in the same breath there is no political consipracy against drilling there, then I think I'll stick to my own stash because I don't want to be smoking what you're smoking.
It doesn't take a genius to figure out why US production peaked. Maybe if Democrats would let us drill in California, Florida, or Alaska.... Nope. No political conspiracy here. Move along.
But I'm the one blinded by ideology...haha. Open your mind, divorce your biases and emotions from your opinions, and stay mentally flexible. Step away from the Peak Oil literature for a moment and read the antithesis: Gold, Corsi, Clarke, etc.
As I said above: Hydrogen is the most common element in the universe and carbon is the fourth most common element in the universe.
The idea of a Manhattan project around our energy needs is right on the mark. All of your suggestions make sense and, ironically, that's a problem. You see, we know what at least what some of the solutions to our energy problem are, but may are all politically untenable. How do we get around this?
Nuclear: Plants should been started a few years ago. If we can't bury spent fuel rods deep in Yucca mountain, where can we? The American public is uneducated about the environmental and economic benefits of nuclear energy. The French get it though. I don't see nuclear happening any time soon in the US.
Solar: Gov't investment in furthering photovoltaic technology would be nice and there shouldn't be much political pushback on this proposal. It is making progress.
Wind: Clean and economical in certain regions. Downside: somewhat politically untenable due to local zoning and environmental regulations. The state of Massachusetts won't let a wind farm be built off of Cape Cod (Ted Kennedy and Mitt Romeny apposed this proposal by the way). It would ruin the view of the ocean (windmiles a few miles from the shore) that people with million dollar homes have. It also, theoretically, might kill a few birds. You know, the birds that just don't see that giant windmill in front of them.
Biofuels: The only thing that is economical is sugarcane. Bioethanol from corn has a negative energy balance. It takes more energy to produce the ethanol than it yields, leading to higher priced fuels and a LARGER CO2 footprint. Corn based ethanol is indeed a renewable energy...if you just exclude the electricity required for distillation and production of fertilizer...both of which come either from natural gas, coal or oil.
The face that we are using corn to produce energy is, simply, dumb and congress ought to know that. The technology, which requires a breathough in genetic engineering or separation processes, is not available to make it ecnomical or environmental.
Cellulosic ethanol: Far, far away. Technological breakthrough required. We still don't even fully understand how enzymes break down lignin. Maybe it shouldn't even been on the table for a Manhatten project.
Gas & Oil: Drilling anywhere on or off-shore of the U.S. properties is politically untenable. It is not possible at this time. No ANWR, no CO, TX, CA or coastal waters. So, we have no significant new supply of energy coming from the U.S.
So, our solution-by-default right now is to accept higher oil prices, higher inflation and a declining standard of living as China and India start to consume more energy and raise their standard of living.
Or, we can stop making ethanol from corn, start drill for natural, and start gov't investment in solar, clean coal and nuclear.
Seems like a long shot to me though...not until gasoline rises a few more dollars in price and our elected officials abandon the idea of taxing oil companies (they only have low-teens margins!) and come to realize that we have no policy on energy, and that the social and economica consequences are going to be more painful the longer we put off getting to a real solution.
Can we elect someone with real vision and leadership? Does anybody realize how import this problem is? What do we need to start doing right now?
It's our standard of living and social fabric that are at steak here.
But intellectual honesty is missing. Government HAS been much the problem, guided by both corporate greed (think ethanol mandates, coal synfuel and windmill/solar subsidies) and well intentioned zealots. So far, effective solutions have not been popular. Much more pain at the consumer level will probably be required before we can begin to make the compromises towards a rational energy future. Energy is BIG in the interest of the USA, and it has been evident for decades that oil and gas and even coal are being consumed at rates that cannot long be sustained.
What is evidently not popularly understood is the scale...the magnitude of the energy industry. Each year, nearly 4 tons of coal plus 4 tons oil plus 2 tons of natural gas is consumed by each resident in the USA. The long term displacement and replacement for this consumption is a massive undertaking, and would have been well underway if governments had not been intervening on behalf of every kook and nut. Was it really sensible to burn natural gas to make electric power? Is it really cost-effective to remove the last few percent of nitric and sulfuric oxides? Was it really desirable to dismiss nuclear power generation? Are wind and solar subsidies beneficial? Is ethanol and its cousins environmentally desireable? We have been using much dishonesty, forcing decisions through government regulation and mandated "solutions", and the results are evident. More of the same is not a good solution. But I don't see folks trusting energy industry professionals for answers. Maybe in our future Energy will always be just for dilettantes and politicians.
if the jack field in the gulf is so easy to produce with existing technology, how come chevron isn't pumping now at $126/barrel?
lower-48 oil production peak because the biggest reservoirs in the lower-48 hit peak production, and declined dramatically, just as the originator of the peak oil theory predicted (almost to the exact year).
the "peak oil" theory is a theory about production rates on a SINGLE oil reservoir, it is not a "global" theory. "peak oil" means as a SINGLE oil reservoir hits it's peak production level, production then begins to decline, and the depletion rates can be quite dramatic. here is the definition, as you apparently need to read it:
en.wikipedia.org/wiki/...
there is nothing in this definition that says that worldwide oil production will not increase! in fact, i myself, if you have read my articles, agree with those who say worldwide oil production will come close to reaching 100 million BPD maximum. obviously, that is an increase from today. the point you see incapable of understanding is that oil prices, just like other commmodities are set by supply AND demand. and demand is growing! china, india, russia, the middle east. all the slackening of the demand in this country by the recession we are in is being gobbled up as fast as possible by countrys that are growing.
if you want to continue to believe that there is an inexhaustible supply of oil, and that the US economy is not endangered by the realities of oil supply and demand, and that you actually know what the peak oil theory is, then, put your rose coloured glasses on and stick with your ideology. meantime, oil is at $126/barrel, has increased by 5x in 8 years, the US dollar is dropping like a rock, and so is the US economy. meanwhile, the trade deficit continues to be massive since we are sending all our money to the middle east.
Peak oil theory is a fact, it has been proven in the world's largest reservoirs over and over and over again. In fact, there is not one elephant reservoir in the world that I am aware of for which the theory is not true. If you are so sure that peak oil is NOT valid, please name me a major oil field in the world today that has NOT followed the peak oil reservoir theory.
Second:The two Peak oil and anti Peak oil warriors (just kidding) up there.
Brian Pursley: You can't pump the same barrel twice. Once a resorvoir has hit its peak, it has hit its peak. Sorry man, that's how it is. To paint a picture: It's like takin' a leak. The emptier your bladder gets, the less pressure (you know daily production).
Fitz: While it is difficult to produce UDW subs-salt reservoirs, it obviously not impossible. There are producing wells and I doubt that oil companies would spend a fortune on UDW projects, if there was no chance in hell for success. 20 years from now no one would have dreamed of developing such fields.
Everything works out as it should: High prices constrain demand growth and enable oil companies to develop new reserves.
Your claim that "the 'peak oil' theory is a theory about production rates on a SINGLE oil reservoir, it is not a 'global' theory" is laughable.
So what's the problem? OK I guess we're all happy then.
You say I need to read the definition of peak oil but apparently it's you who need to focus on reading comprehension. From the first sentence of the Wiki article you linked to: "Peak oil is the point in time when the maximum rate of GLOBAL petroleum production is reached, after which the rate of production enters its terminal decline."
www.geotimes.org/june0...
physicsworld.com/cws/a...
There are other wells to drill - if only Democrats would let us.
Look, folks, the author is right, we're all in this together. We all have terrific ideas about whether or not we're at peak oil and what to do about it. The problem is it's the electrics vs. the internal combustibles, the best types of ethanol, the offshore drillers vs. the greens, nukes vs. non-nukes, nat gas in cars or the power grid, coal vs. CO2, global warming fact or not, blue states vs. red, on and on and ON AND ON. Get the idea...?
Mr. Fitzsimmons has put together as sensible an argrument as I've heard for why we should be doing ALL these things simultaneouly. I don't know where energy prices are headed in the future, but I DO KNOW that our country was built on affordable energy, and it's VITAL to our future economic success and security.
We can get together and get behind this type of MACRO PLAN now and let the marketplace sort out the winners and losers, or we can wait for even higher prices and let the GOVERNMENT step in and do it. One thing I think we can all agree on is the latter would lead to disaster!
Some other insight: Biodiesel is viable, it's a chemical synthesis that doesn't have fermentation/distillat... at it's core like ethanol. That being said, is shouldn't be subsidised beyond it's true value. The Ethanol subsidies were/are so out of wack that most U.S. Ethanol was sold to Europe to double dip subsidies. Ethanol should simply be pursued where the end net valued use of the inputs is the most logical thing to do. Not much so for U.S. corn but for Central American crops the result is better. Pursue it where it works.
A significant,maybe most, of the U.S.'s Uranium production is owned/destined for Canada. The horse has left the barn.
Polychrystaline Solar has a long long way to go be part of the solution ($6/watt.) Probably way over subsidised. If you think $4 gas is expensive, you haven't experienced poverty until you try to fund a project to make that much energy via polychrystaline solar. I like the comment I heard that gas allows you to buy energy to move 3000 pounds 25 miles down the road in 30 minutes for $4. I hate paying the higher price but if someone offered to hire my labor to do that job I would ask for at least $1000, what would be your bid?
Wind is economically viable (~$1/watt) in the best locations, those locations' proximity to demand is sometimes the deal killer. I find windturbines a compliment to the landscape, kind of like the uniqueness of exotic cars. Science and progress in motion. Mine is painted to match the landscape and the community asks for tours not demolition. Also no dead birds in 4 years.
Solar thermal is also very viable (<$1/watt.) In different applications/locations it has less then 5 year payback even before tax incentives. 15%/yr guanteed is better than Wall Street offers. Every property owner should evaluate their situation for this opportunity. This is one of the low hanging fruits.
Solar concentrators are an important part of making solar in any form more viable.
As alternative electric supply increases it will be a nice compliment to Ground Loop Geothermal Heat Pumps. I see a breakthrough in smaller units that run 100% of the HVAC season supplying ~50% - 70% of load and lower cost traditional capital equipment providing the back up. I am just completing design of a barebones system for my home that will have ~3 year payback and cost under $3000.
Electric cars lower in weight, similar approach to the Heat Pump discussion. Commuters needing less than 25 miles per day have a winner waiting for them. On a lower budget, try electric bike ($200 to $1000.) Less than 1 penny per mile compared to $0.16/mile gas car. Compare travel time and cost to even public transport in cities.
Local food supply. How about shifting from maintaining the lawn to maintaining the garden? Probably no extra effort.
Conservation is a biggy. Another low hanging fruit. This means building methods and consumption technology, lifestyle, community support/cooperation, etc. With a good early start it doesn't have to mean noticeably lower living standards. If the time available to make improvements is wasted though then it probably will.
My soap box statement is simple: energize yourself to do something and help motivate others. Spread the word.
I was struck by your comment regarding the available uranium supply. Wall Street's not perfect, but why are they valuing uranium stocks so cheaply then?
I enjoyed many of the common sense personal energy ideas you advanced, and was fascinated by your discussion of inorganic oil. I need to learn more about that.
Thank you.
You're right about the D's, but even that can change. Gas at $6-8 would wipe out the D's and greens in Washington for awhile.
**worldwide oil demand will outstrip worldwide oil supply by 2015**
and that oil prices will skyrocket, with catastophic effects to the US economy if we do not adopt an energy policy to protect and prepare us from the effects of peak oil.
peak oil HAS occurred: it has occurred in every large oil reservoir that i know of (i am still waiting for you to name one oil reservoir where it has not happened). the north sea, prudoe bay, mexico'c cantrell fields, the largest fields of texas and oklahoma.
you seem to believe that because the US doesn't drill in ANWR or elsewhere that that is the main reason for supply/demand problems. do you think the rest of the world isnt trying to find oil? can you not acknowledge that the rate of discovery of elephant fields in that last 20 years has slowed dramatically in spite of increased techological advances? i mean come on, they are processing tar sands for christsakes. if oil was so abundant and easily obtained as you seem to believe, surely, someone somewhere in the world would find it in spite of US policy. i stand by peak oil. and it is happening now. if you dont like my rhetoric or explanations, just watch price. people have been arguing with me since oil went over $50/barrel. the best evidence i have of my correctness is price. oil is at $126/barrel now, and is oil is now the world's reserve currency (supplanting the US dollar).
If not, here are some other reasons. "We stole it, fair and square!"
By that I'm referring to what the Congress told the Alaskans when they agreed to allow us to create ANWR in the first place. They
PROMISED them they could get the oil out any time they wanted to. Naive believing the government, weren't they...?
Or how about Sen. Dorgan extolling the virtues of the Bakkens oil for the economy of N. Dakota...? Talk about chutzpah! He'll vote all day against ANWR, but he has no problem with X THOUSAND (that's right, THOUSANDS!) of oil wells covering the landscape of his home state.
Give me a break, pleassseeeee!
I hope threads like this get growing exposure, like Fitzman says, more so than B. Spears exposure. Slamming the Greens might not be good with that exposure. Many Greens I know are highly capable/informed people pursuing viable solutions as encouraged here. Their greenness is their motivation not their fear. Other less capable Greens are the say no to everything group and think they're accomplishing something preventing change.
Long PBR.
You're right about the greens. It's, if you will, the "neo-greens" in the Congress and public that get to me. I think there was a party called the "Know Nothings" of an earlier time... reminds me of them.
As regards uranium, I've read that the bulk of the world supply is in the U.S. and N. America. It can appear to be imported because we export it to have it processed and return it here to be used, as I understand it.
Another interesting element is lithium. Apparently the world supply is very thin and mined in places that are politically questionable. That's why I'm told nickel is a lot more abundant and about as good.
I agree with everything you say, except ANWR is hardly the "last remnants" of the U.S oil and gas supply. However, unlike Californians and Floridians, Alaskans don't mind sharing their oil wealth with the rest of us.
The truth is 85% of offshore U.S. oil and gas and much of our onshore energy resources are closed to exploration. It's a crisis of our own making, if you will.
The only way it's going to get better is if we agree to compromise. That way everyone gets a little something, rather than all of us getting a whole lot of nothing... except $6-8 a gallon gasoline.
With your enthusiasm for deep inorganic oil, has that camp ever tried to estimate the daily steady state supply? Maybe some factor of the volume or surface of the "reactor" in connection with the velocity of its path upward to within reach of the surface. Does that camp suggest deep oil is quite universally available or does drilling still need to be strategic to find the vents/seems at the deep depths? Does deep inorganic oil concede there will always be geopolitical oil pressure? What specifics going forward does deep inorganic oil believe?
Paulk,
I meant to say Cudos about your 500 day comment! Then add Deep Inorganic Oil potential and maybe you get a couple more hundred days....not to mention U.S. $$ staying home for a change.
My plans for next 500 days are helping domestic refiners make improvements, getting a tiny geothermal heat pump running, finishing process design of a medium size WVO to Biodiesel plant and maybe just beginning start-up, retrofitting insulation and radiant barrier in an older home, and getting the first harvest from recently planted fruit trees....... I'll take 500 days of breathing room anytime!!
Here's to the next 500 days, make 'em good ones :-)
Galewhitaker, there are so many conservation opportunities, if you know people not participating do what you can to motivate them. Point them to Fitzman's work, team up with them, change out incadescent lightbulbs, plant a tomato plant, anything.....
I've worked in the chemical and oil industry for over 20 years. 500 days is often how long it takes to get something significant done. You can't legislate that more be done in less time and you can't trivialize what does get done in 500 days.
If one finger plugs one hole for 500 days then another finger plugs another hole for another 500 days and then maybe in 1000 or 2000 days there is some improvement that an initial finger can be moved to a new hole is how technology and industrial improvement moves. It might seem painfully slow but it is what it is and therefore along with oil, time is a very valuable commodity to be utilized smartly.
The whole industrial complex has layers of improvement, discovery, set backs, successes, ongoing operations, etc. Sometimes just holding on is part of the solution. Not overinvesting resources in a bad path is as important as finding a better path.
Way back at the beginning, Fitzman made a good list of suggestions. All possible paths of progress need a chance to be evaluated. That requires time!
See what I mean about "neogreens," you can't even converse with them intelligently. They just make it up as they go along! Since there are an estimated 10 Bbl of recoverable oil in ANWR, the "500 days" number they use can only refer to our nation's TOTAL use of gasoline, not the 1 million gallons of gas a day forecast from ANWR. Dishonesty won't solve our energy crises, either...!
Hubbert, the father of the peak oil theory, used his theory on oil reservoir production curves to predict, in 1956, that US oil production in the lower-48 would peak between 1965-70. He was absolutely correct. The peak oil theory of INDIVIDUAL RESERVOIRS production curves, has been absolutely correct in predicting the depletion decline rates in (again, i have to state these fields, because you continue to ignore these important facts) prudoe bay, the north sea, the mexican cantrell fields, and now in a few of the largest reservoirs in saudi arabia.
The theory of peak oil does NOT say, as you keep repeating, that worldwide production of oil has peaked TODAY! That is the interpretation YOU are putting on "peak oil".
If oil is sooo abundant, and easily produced (as you appear to think), why are major oil companies toiling away in canada with huge trucks, digging up tons and tons of tar sands, processing them with huge amounts of steam, etc. etc. in a very costly process? Are these companies just stupid? I suggest if you know where all the easily accessable huge supplies of oil are that you imply, go get a job at these oil companies! They will make you a very rich man because you are obviously much smarter than all their geologist.
I am *still* waiting for you to name one oil reservoir of any size that has not followed the production curves predicted by Hubbert. You keep saying peak oil theorists are and have been wrong, but all the evidence is against you and, if you cannot name a reservoir that proves the peak oil production curve incorrect, i will assume, by default, that it is because you cannot name one.
The reason why companies are toiling away in Athabasca is because national oil companies (politics) controls the oil in most other countries. And as far as your remark to get a job at a national oil company, Saudi Aramco doesn't directly hire infidels and Petrobras doesn't hire foreigners: www.bloomberg.com/apps...
I do however own shares in PBR.
*Eugene Island 330*: www.science-frontiers....
aapgbull.geosciencewor...
Anyway, individual reservoirs peaking is irrelevant. What matters is global production.
As far as carbon, look up CTLF(Liquid Carbon Fuel). Clean carbon fuel.
1) peak oil reservoir theory is sound, proven, and accepted in the oil industry
2) a majority of existing elephant fields in the world today have already reached peak production and are in decline
3) the number of new elephant fields discovered in the last two decades have dropped dramatically. of the new discoveries, the oil is in deeper water, under more rock, and far off-shore making the economies of producing the oil more expensive
4) conclusion of facts 1-3: since the major fields of the world have reached peak oil and are declining, and since the rate of discovery of new elephant fields have slowed, and since the demand side of the equation with china, india, russia, and the middle east will grow it can only lead to one common sense action:
***** a comprehensive US energy policy *****
To do otherwise is simple stupidity and will lead us into an economic abyss from which we will never recover. We still have time (not much...) to deal affectively with this issue. However, people who think there is plenty of oil out there and nothing to worry about are the main problem in affecting action. It doesn't even matter that oil is at $126/barrel, the US dollar is dropping like a rock, the economy is in tatters, inflation is raging, and we have men (and women) dying in Iraq. You are whistling past the graveyard sir.
Thank you for saying we should be mindful to not "...overinvest resources in a bad path..." as we attempt to resolve our energy dilemma. I hadn't thought of this aspect of the issue in quite that way.
What we know about oil is that has been historically abundant, reasonably safe and, most important of all, that it works. As technology evolves, it will become less relevant as a fuel and more important for the other many benefits it provides us.
This discussion has been about oil's prospective replacements to operate the machinery that enables us to go about our daily lives. Assuming we can keep our government from taking us too far down any particular "bad paths" (...a prospect I'm not overly optimistic about given recent history), science and the marketplace will ultimately determine our fate (...I'm cheered by that!) in this regard.
As you point out, each of us needs to do our bit in our own way to help us get there. If we do our part, the importance and urgency of the problem will take care of the rest. Thanks for your informed opinions and calming demeanor on how to best try to comprehend this life altering matter!
1) Peak Oil is not accepted in the industry. If Peak Oil were accepted in the industry there would be no so-called "crisis." Rex Tillerson, Daniel Yergin, etc, all laugh at the idea of Peak Oil. All science in the world confirms that petroleum is abiogenic in origin and more abundandant than conventionally assumed.
2) The majority of the elephant fields in the world today have yet to be discovered or developed: peakoildebunked.blogsp...
3) Brazil alone has discovered 3 elephant fields in the past 6 months (Tupi, Jupiter, & Carioca). Therefore the rate of discovery of elephants is increasing dramatically.
4) Conclusion of facts 1-3: Obviously this is a religion for you and no data will be able to convince you otherwise.
I think I'll spend the rest of the day whistling past the graveyard and enjoying the Spring air. Maybe burn a few hydrocarbons just for the hell of it. Have a nice day.
While more people bidding for oil contracts they don't plan to take delivery on probably has a tendancy to increase contract price the liquidity and competition they offer the market is stabilizing. If only the entities taking delivery of oil were allowed to set the price there is more of an environment for price fixing. The more people bidding buy/sell for something the more likely to eventually have a fair price. Imagine how the global exposure of Ebay provides better pricing for everything compared to neighborhood garage sales. Better means higher for the seller when he has access to more bidders. Most of us are on the buyer side of oil so those better prices mean higher prices which doesn't feel better. But it means oil is priced at a sustaining price to provide for the future of oil as demand changes. The Fitzman article says prepare for that price to become unsustaining to the U.S. standard of living and political stability. Fairly priced alternatives brought to market can stabilize everything. That's what the U.S. and the rest of the world need to work on. $5 gas might be horrible, but doing nothing could result in $10 gas. Eliminating liquidity in oil is not a long term solution.
Somewhat related, the gov. researched the role of short sellers in the 1987 correction and found they were not a destabilizing factor.
A combination of rationing and taxes might be productive. Imagine current gas tax rate on your first ~40 gallons per month used and then steeply increasing taxes to purchase more gas. The same could be applied to natural gas, heating oil, etc. I got 40 gal/mo from 12,000 miles/yr in a 25 mpg car but any minimal basis could be used. Additional taxes used to assist alternative developments.
peakoildebunked.blogsp...
Thanks for the clicks to the sites covering the expanding world supply of oil. (That's another thing I didn't know about all this.) Unfortunately, the "neo-greens" here in the U.S. (...and a majority of their currently constructed Congress) wouldn't let us burn it if it showed up for two bits a gallon on the shelf at Wal-Mart.
That likely means we're going to see MUCH higher oil prices in the near term no matter the underlying supply (...I do better with economics and politics than science). Indeed, someone here suggested that oil has (at least temporarily) become the world's new dollar. That makes sense as well.
Of course, there's going to come a day when the price of gas is so high and the resulting debt from buying oil elsewhere has inflated our currency to the point where this political and economic bubble will burst and bring all this nonsense to an end.
Too bad Uncle Miltie (...Friedman, not Berle) is still not around to help get us through this a little more quickly with somewhat less pain. Nevertheless, it will be fascinating to see all this play itself out.
May 13, 2008: news.yahoo.com/s/ap/20...
SEN. MENENDEZ HELPS DEFEAT PROPOSAL THAT COULD LEAD TO DRILLING OFF THE JERSEY SHORE & PLAN FOR GAS PRICE RELIEF
Member of Energy Committee says drilling would threaten NJ environment, economy without any short-term effect on gas prices
WASHINGTON - Today, U.S. Senator Robert Menendez (D-NJ), a member of the Senate Energy and Natural Resources Committee, helped defeat a proposal in the Senate that could have led to drilling for oil up and down the U.S.'s East and West coasts, including areas near the Jersey Shore. He also helped pass a Democratic proposal to bring more immediate gas price relief by suspending the filling the Strategic Petroleum Reserve until the price of oil per barrel dips below $75.
Drilling amendment
"An oil spill that washes up on the Jersey Shore would be an environmental and economic disaster for our state," said Senator Menendez. ""The idea that opening up the coast to oil drilling would do anything to gas prices is ridiculous. It would take well over ten years to put the infrastructure in place and the risk of jeopardizing our $50 billion coastal economy far outweighs the minimal amount of oil we could expect in 2020 or later. With gas prices sky high and with the planet in peril, the answer is not to drill ourselves into a deeper hole. The answer is to become more energy efficient, develop alternative sources of energy and keep our planet intact."
The amendment to the Flood Insurance bill would have allowed petitions for leasing activities in the Atlantic and Pacific regions of the Outer Continental Shelf in order to tap recoverable oil in those areas. Exploration would occur off the shore of a state if that state's Governor petitions to have the moratorium on exploration lifted. Thus, even if New Jersey would not allow drilling, other nearby states might, which could affect the Jersey Shore. In the past, Virginia's Governor and legislature have expressed the desire to open up their waters to drilling. Virginia's waters include areas less than 100 miles from the Jersey Shore.
Oil reserve amendment
"We have no magic wand to wave and immediately make gas prices reasonable, but this plan at least brings some short-term relief. The practice of putting $125 per barrel oil in the ground is absurd and should be suspended. About 70,000 barrels of oil per day are put under ground in the Strategic Petroleum Reserve. The Reserve is about 97 percent full, and oil is now at about $125 per barrel.
In fact, the only provision in the Minority Leader's amendment that would do anything to lower gas prices is lifted directly from the Democratic Plan to lower gas prices. This is the provision to temporarily suspend filling the Strategic Petroleum Reserve.
In 2005, Republicans authored energy provisions that gave Exxon-Mobil and other Oil Giants lavish subsidies that totaled over $14 billion, and these companies are reaping the rewards with record profits announced every quarter. Exxon-Mobil recently announced $11 billion in profits over a three month period. To put that in context, this means Exxon-Mobil's yearly profit this year might well be almost twice the annual budget of the Department of Energy.
M. President, some claim that the way to lower gas prices is to end a bipartisan twenty-six year moratoria to open up the Outer Continental Shelf to oil exploration and just drill, drill, drill. But the Energy Information Administration (EIA) projects that even if we opened up the entire Outer Continental Shelf to drilling- Off the East Coast, Off the West Coast, and opened up the entire Eastern Gulf of Mexico, nothing would happen to gas prices. Why?
First because production would not begin before the year 2017. The infrastructure to drill for oil is not just a large oil platform, but a network of hundreds of miles of pipelines to transport oil from the platform, onto land and then on to refineries. This kind of infrastructure simply does not exist on the East Coast and in only limited exceptions on the West Coast.
The second reason why opening up all our shores to oil drilling will not lower gas prices is because by the time full production actually ramped up, in 2030, drilling off all of our coasts full tilt would only result in a whopping 3% increase in domestic production.
And even in 2030 as our continent is rung all the way around by oil platforms all of this new supply will be eaten up by a 7% increase in domestic demand. The Energy Information Administration (EIA) predicts that --- and I quote --- "any impact on average wellhead prices is expected to be insignificant."
So even opening up all of our coasts to drilling, will have no impact on gas prices at all. As you can see by this chart, the federal government has been issuing more and more leasing permits for drilling, but at the same time the price of gasoline has continued to rise.
In fact, over 80 percent of the resources in the outer continental shelf are already open for exploration! Since 2001, the Bush administration has issued over 100 new leases. Many of these leases are in the eastern Gulf where the oil industry already has much of the infrastructure necessary to go into production. But only 12 of these new wells have been drilled. The industry is only developing a small fraction of the area already open for drilling. Why isn't Exxon-Mobil pumping some of its profits into developing these areas? If companies are not interested in developing the large fields already open in the Gulf of Mexico, why is it so critical to open up environmentally sensitive areas to more drilling?
The New Jersey Shore is a priceless treasure my home state will protect at any cost, but the Shore also generates tens of billions of dollars in revenues each year and supports almost half a million jobs. *It simply makes no sense to jeopardize a tourism and fishing economy worth tens of billions of dollars in exchange for a cumulative total of only a half year's supply of oil. * The people of New Jersey cannot afford the risk of millions of gallons of oil washing up on our beaches.
One important way to address oil prices that I hope we will be debating more fully in a couple of weeks is to better regulate oil markets. Many analysts that have testified before the relevant House and Senate committees agree that based on pure supply and demand the price of oil should be somewhere between $50-70 a barrel. So, why are we hitting $125? In part it's because of excessive speculation on futures markets. And unlike other markets, such as the commodities involving corn or soybean futures, oil is being traded around the globe with little or no oversight by the US government. If the Enron disaster teaches us anything it should be that markets cannot be allowed to operate without real oversight.
Another important measure to bring short term relief to the pain at the pump is the amendment that would suspend filling the Strategic Petroleum Reserve at least through December 2008. We should stop pouring all that oil into a hole in the ground until the price of crude oil recedes to $75 or less. This will truly help drive gas prices back down by increasing supply and offer some immediate relief to Americans.
And as former CIA Director James Woolsey is fond of saying, by buying oil in such huge quanitites and at such high prices we are helping fund both sides of the war on terror.
The first thing we need to do is drastically improve fuel economy. In 1976, our cars and trucks got 13 miles per gallon. Because of the Arab oil crisis, we passed laws to improve the fuel economy of our passenger vehicles. From 1976 to 1981, we saw a rapid increase in fuel economy. In 1981, our fleet had improved to 21 miles per gallon. But since 1981, without the political will to improve fuel economy standards and the rising popularity of SUVs, the average fuel economy of our passenger vehicle fleet actually declined to 20 miles per gallon in 2006.
What would have happened if we had kept slowly improving the fuel economy of our vehicles from 1981 to the present? If we had increased fuel economy a modest 2% per year during that time, our new fleet of vehicles would now average 34 miles per gallon. While this is certainly a huge improvement over where we sit today, it was definitely achievable since this figure is still well below standards set in Japan which are over 40 miles per gallon.
Astonishingly, if we had followed this course, our current demand for oil would be over one-third less than it is today, down over 2 billion barrels of oil per year. Cumulatively, we would have saved over 30 billion barrels of oil. 30 billion barrels of oil is more oil than the entire proven oil reserves remaining in the United States. This means that this sensible and achievable policy could have saved us more oil than we could ever hope to gain from domestic drilling!
We also need tax incentives to increase the production and use of super-efficient vehicles already out there - like hybrids.We need a massive investment in cars that can run on sustainable alternative fuels like electricity or cellulosic ethanol. This country also needs to invest in our mass transit infrastructure.
You celebrate the benefit of low digit percent annual improvement in gas mileage and how its compound effect over years slowly amounts to something significant but you belittle the benefit of small continuous improvements in the U.S. and world's production of oil. Have you heard the saying that things are priced at the margin? A small growing decrease in demand along with a slow growing increase in production can have a huge price impact in a relatively short time.
Why do people need tax incentives to choose a vehicle with higher gas mileage in exchange for other performance issues? Fortunately different performance levels are competively priced. The Prius is not the answer for everyone. Highway distance drivers do not benefit much from Hybrids. Towing capacity is not available in Hybrids. Many people will benefit from Hybrids. Where the benefits exsist the market has options.
By voting against filling the Strategic Oil Reserve you are voting that oil prices will be coming down soon. Is that what you're complaing about? If your concern really is oil prices will continue higher, then filling at $125 vs over $125 is smart right?
Have you ever traded futures? Are you suggesting someone is cornering the oil futures? If everyone is acting independently then the futures market protects oil prices. You are free to open a futures account and buy or sell oil contracts as you please. The futures market is so open that you can buy or sell regardless of whether you have a supply or a means to take delivery. A huge intent of the futures market is meant for people with no intent of delivering or taking delivery. Is that the group you plan to regulate? Enron did not ruin the futures market, the futures market outed Enron as a poor company bordering a pyramid scheme.
Current oil prices are protecting the world's future energy supply not impeding it. Have you ever designed an oil rig or refinery or other productive piece of machinery that you're qualified to insult the time it takes knowledgeable people to get these things done?
The world has many fortunate energy input options to protect its future. If you're not technically qualified to help make that happen, stay out of the way.
1. NO AIRPLANE WILL CRASH INTO A NUCLEAR GENERATION PLANT.
(ONE RADAR CONTROLLED GATTLING GUN(OR 2) COULD PROTECT THE PLANT WITHOUT TO MUCH ADDED COST AND PROVIDE EMPLOYMENT FOR OUR RETURNING VETERANS.
2. ALL THE TOILET PAPER FLUSHED SINCE 1950 IS NOT REPLENISHING THE SAUDI OIL FIELDS. OR CAN I APPLY FOR FEDERAL MONEY TO STUDY THIS.
3. F-T PROCESS FOR COAL IS AVAILABLE FROM SSL -SASOL- I HAVE A SMALL POSITION.
4.WE ARE SHORT OF TIME AND WE HAVE TO MANY ATTORNEYS IN CONGRESS.
5.WE NEED TO FLUSH CONGRESS NOW....
DIEGOJAMES
PORTER RANCH ,CALIFORNIA
DIEGOJAMES
The US has been a net importer of oil for nearly 40 years. Predictions that we would become a net importer were around for nearly a decade prior to that. Despite this, we have had a domestic energy and economic policy that has encouraged the consumption of energy.
For many years we have not taxed gasoline nearly as heavily as other developed nations. Cheap gas encouraged the purchase of millions of automobiles a year. This kept the automobile industry busy churning out more and bigger cars, trucks, and SUVs. The automobiles were accommodated by new highways. This kept the highway construction industry busy building new ways for people to leave the cities and settle in the suburbs. The suburbs of course were busy enjoying a building boom, thus keeping the construction industry busy building 4000 square foot homes, shopping centers and office malls.
The end result of this is an infrastructure that demands we use much more energy than can possibly be produced domestically: natural gas to heat huge homes, unleaded gas to drive SUVs to work and shop, and jet fuel to fly us to destinations that could be well served by bus/train. We have been left with empty broken cities, mass transit that is inadequate, and non-existent rail service.
It was a good plan. The democrats must have figured that when prices got high enough they could finally fund the development of alternative energy. The republicans figured that this would be the opportune time to abandon environmental protections. Unfortunately either of these solutions as well as changing the infrastructure to be more energy efficient are many years and additional trillions of dollars down the road.
In the meantime, we can blame the Chinese and Venezuelans. We know that they use too much energy because their governments subsidize energy prices. Blaming third world countries for using too much energy is the ultimate in audacity. It is ludicrous.
Don't blame us if no one has been listening for all those decades. Environmentalists have been labeled as kooks for all of those years and now that the chickens have come home to roost, some of you want to blame the messengers. We woke up decades ago. Where were you?
Fitzman is right on that point. We , as a nation, have taken too long to become aware of the problem. If more had woken up earlier, we wouldn't be in such a mess now.
Oh well.
It's the oil industry, that lobbies to prevent alternatives from getting a head start. Yes, many oil companies now are pursuing alternatives, but it was their lobbying efforts that prevented the Dec 07 energy bill from taking 1/4 of their subsidies or $20 billion, which would have been used to extend tax credits for aternatives like solar and wind for eight more years. It was 40 Republican senators who stripped those provisions from the bill as well as blocking meaningful CAFE standards for cars. Of coure Dubbya would have vetoed it anyway.
More solutions:
Change much of our long distance freight hauling from trucks to trains. Trains are about 3 times as efficient.
Sail assist for ships. Parasails that will save 10-30% of a ships fuel cost are available. They work and are cheap. A ship can be retrofitted for $250,000. That's about 2 days lease rate on a large bulk carrier. They provide 6800 horse power and work on any point of sail that a sailboat uses.
Kiteship and Skysails are the two companies currently providing this technology.
www.skysails.info/inde...
www.kiteship.com/
Some cities have found that free mass transit pays off in the long run. Many hidden costs are eliminated or reduced, making up for the loss of revenue. Ridership increases.
Biomass to methane, from manure, sewage treatment and landfills. Kill two birds with one stone, preventing methane from becoming a greenhouse gas, and getting power out of it.
"Wild Rose Dairy in Webster Township, WI is home to an innovative renewable energy facility powered by cow manure and other organic waste. The farm is home to 900 dairy cows, and an on-site anaerobic digester creates methane-rich biogas from their waste, which is used to generate 750 kilowatts of electricity per hour—enough to power 600 local homes 24/7."
"Environmental Power’s Huckabay Ridge is the largest renewable natural gas plant in North America, if not the world. Huckabay Ridge generates methane-rich biogas from manure and other agricultural waste, conditions it to natural gas standards and distributes it through a commercial pipeline. The purified biogas, called RNG®, is generated by Environmental Power’s subsidiary, Microgy, and is a branded, renewable, pipeline quality methane product."
Enviromental Power press releases.
Wind is great, where conditions are right, like the great plains, great lakes area and parts of Texas. Wind will provide 180,000 miles of transportaton power per acre, but solar can produce 2 million miles of power per acre.
"In the US, the American Wind Energy Association forecasts that installed capacity could grow from 11,603 MW today to around 100,000 MW by 2020. In Canada, Emerging Energy Research predicts that installed wind capacity will expand from around 1,500 MW today to around 14,000 MW by 2015."
{from an article at altenergystocks.com by Charles Morand}
What would also help a lot would be to wean ourselve from our consumerism economy. Watch the video called "The Story of Stuff" to see how wasteful it is.
www.storyofstuff.com/
For more on plug in hybrids go here.
www.pluginpartners.org/
www.logicalscience.com.../ - a list of promising energy technologies
Bioplastics which are fairly new, could help solve the energy problem as well as a huge pollution problem. We use about 5-10% of our oil to make plastics. Then we throw most of them away and thus create massive polluton, with the oceans being particularly vulnerable. Check out what Metabolix is doing. They are the cutting edge in this new field.
They can actually grow switchgrass with the plastic already in the leaves and stems, WITHOUT genetically engineering the plants. What is genetically engineered is the bacteria, which digests the corn starch and sugars to make PHA biloplastic.
They can replace over half of existing plastics with bioplastics that are 100% compostable. In some cases the plastics have better properties than what they replace.
To see what plastics are doing to the sea go here.
www.algalita.org/resea...
www.algalita.org/pelag...
Tax on our income is over 50%. Large tax rates historically are the demise of on nation.
Our energy policy needs to be developed and implemented with these two factors in mind.
Fun fact. Without considering the cost of collection. Over a cow's lifetime, the methane it produces is worth more than the meat.
The only thing really that we as a nation have to fear is the United States Congress. Because they have a monopoly on power, they have the unique ability to frustrate Energy progress, or perhaps even add to the energy crisis they already created by creating a genuine catastrophy. [NOTE: Other catastrophies they have created include primary education (teacher unions law driven), public housing (crime/drug hell-holes), college tuition inflation (tidal subsidies), health uninsured (tax law driven), frivolous lawsuits (tort law driven), massive taxation (you, every one of you readers pays >50% if you count all your direct and indirect taxes), race relations (quotas), Iraq (maybe), Torture Porn/Hollywood (again, laws), Border Non-control (accusations of racist!!), overpaid CEOs (ironically, compensation limit laws) and so on and on. Congress creates most of our biggest problems and headaches we face. The ingenuity and common decency of most Americans then solve them.
The best we can hope for from Congress, is that they will spend less than half a trillion on subsidies, and will do no damage to the ability of the Engineers and investors to create new sources of energy--then let supply and demand and Adam Smith's invisible hand work its magic. If Congress will only huff and puff, but do no serious regulatory damage, we have a chance. An energy tax to replace taxes on emloyment, investment, ingenuity, risk taking, and growth would be helpful, but not indispensable.
Good Luck!
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