Events in Russia Could Push U.S. Toward a Clearer Energy Policy 48 comments
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I recently had lunch with a top U.S Department of Energy executive. He’s “in charge” of half the world - mostly the half that exports oil. This very charming individual was unable to define what the present U.S. energy policy is.
I suppose he understands, but cannot admit publicly, that our policy under the present nitwit administration is to give oil companies and oil supply companies, e.g. Halliburton, everything they want - tax breaks, drilling rights, lack of oversight - and to give the 44 farm-state senators a mandate for turning corn into ethanol, which produces little if any net new energy. In other words, our policy is to maintain our dependence on the internal combustion engine.
Voters - as we know because all the candidates are talking energy- clearly see the cost of oil dependence and want a new direction and a truly useful energy policy. But it’s been hard to be optimistic that we will get one because the executive branch is controlled by the oil industry and the legislative branch is so gridlocked and clueless that they have so far only come up with such harebrained schemes as suing OPEC or drilling for oil off the OCS or in ANWR or providing huge mandates and subsidies for ethanol. These may be “get re-elected” policies, but they do not solve our oil dependency.
But now the Russian invasion of Georgia gives me a new sense of optimism. It makes crystal clear the fact that the control of vast amounts of oil by dangerous governments means that OECD societies which must have that oil are powerless to resolve potentially war-and-peace sorts of international disputes - other than to give up. We’ve heard it said before in respect of Middle Eastern countries and Venezuela that our oil policies are only empowering our enemies. But Russia’s aggression in Georgia creates a new and much more tangible danger that could motivate us to move toward the security that energy independence offers.
The Russians are making it clear even to the average American that oil is putting us at great risk. We cannot envision NATO coming to the military aid of Georgia against a continuing Russian invasion and potentially a take-over of Georgia. Similarly we cannot envision NATO taking action against a Russian takeover of Ukraine or the Baltics or any other target the Russians may find attractive down the road.
The reason NATO is feckless, obviously, is that most if not all NATO countries must have Russia’s oil and gas exports. How can you go to war against a country you depend upon to supply you with the energy life support system you require? It is a contradiction in terms - sort of like going to war against your own body. This is such a clearly unacceptable global posture for the OECD that it must be changed. To do so will require a real energy policy.
The policy the U.S. - and our OECD allies - must adopt is very simple. We must free our transportation system from its use of oil.
In the U.S. we have enormous quantities of unconventional domestic natural gas that can help us transition our transportation system from oil. Compressed natural gas, CNG, can substitute for gasoline more quickly than electricity can, especially for truck fleets. The trucking industry should have tax incentives to switch to natural gas. We should require that over time gas stations in urban areas also offer CNG. We should also encourage cars to be “flex fuel” so they can use “CNG,” as Brazil has been doing for years thanks to a government mandate. (And which cars are built in Brazil by U.S. car companies.)
But electricity, not CNG , is the longer term solution. We must mandate that by a certain date all new cars be plug-in hybrid electrics “PHEV’s.” In the interim we must offer tax rebates for PHEV purchase and tax the purchase of non-PHEV’s. Those tax incentives should increase over time. Right now the battery costs of PHEV’s is excessive. That is why tax policies are needed to make them our standard.
If the U.S. moves aggressively toward PHEV’s such cars will become a global standard. Other OECD countries and even developing countries will see PHEV’s as the future and will move toward them as well. A PHEV still uses some gasoline - but the amount can be minimal. A car that is only driven locally - which is a huge percent of U.S. cars and an even larger percent in more densely populated countries - may use only electricity, depending on the size of the battery and the distance driven. With cars using PHEV’s and trucks using natural gas, there is enough fossil fuels to eliminate any energy emergency.
A transition away from gasoline will virtually bankrupt our Highway Trust Fund which gets its money from gasoline taxes. Therefore we must tax freight that moves by truck to fund highways. That tax will also make it clear that over time we are going to transition to electric powered trains for freight and as much as possible away from trucks - even ones that run on natural gas. To that end we should also offer incentives to electrify our railroads and to build more rail transport in our densely populated areas.
Such policies don’t offer an immediate fix. It will take at least a decade to achieve a significant reduction in oil use by cars and trucks and then another decade to virtually eliminate it. But the adoption of such policies will tell the Russians that their game is only temporary. When they see that the West is starting to move away from oil with a serious determination, they will not want to make oil even more expensive. Oil is the basis of their wealth and they will try to make it more attractive. They will become more cooperative.
The vision of an oil-free future will also let the U.S. go forward with optimism, which makes all the difference to economic vitality. Optimism is essential for growth.
The policies I am suggesting will create losers so they present steep political costs. But the fear that otherwise we are committing ourselves to a national defense nightmare vis-a-vis Russia - in addition to the other very substantial balance of trade risks and costs of oil dependency - could give our government the backbone it needs to finally move us forward away from oil.
We’ll never get there by yelling “climate change.” But we can possibly get there by yelling “The Russians Are Coming.” In fact the reality is that the Russians may very well be coming, as we now see in Georgia, if we don’t cut off our dependence on oil and therefore on Russia.
Will there be enough electricity? I think so. For one thing, most electrical “re-fueling” will take place at night when there are huge existing surpluses of electrical supply right now. For another, we’ll be transitioning to LED lighting which will save about 15% of our electrical use. Yes, we will need some additional capacity over time and will probably need policies to promote renewable solar, wind, local geothermal, and wave. Such technologies are available now. They will become much less expensive over the next five years.
A major side benefit of this new energy/national defense policy would be a renaissance for the U.S. economy. We would produce so many new jobs in the battery and automotive and rail transport and renewable electricity generation industries that we would see another American economic miracle. That is one of the benefits that would motivate other countries to join with us and adopt similar policies.
Interestingly, in the process of moving deliberately away from oil we would also solve the climate change problem. Without even trying.
Will it happen? With the right new leadership and a continuation of Russia overplaying its hand…there is hope now. But I still wouldn’t bet money on it yet.
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This article has 48 comments:
Oil is here forever,government can not and will not do anything about it,it all started more than 100 years ago and no one can change it,look at daily (1 minute) CL chart today,it shows how big traders want to have enough shorts that will cover it all in 1-2 weeks.
I day trade Oil/Nat Gas,have no long term opinion on it,I see reality and try to adjust to it with my trading,if reality will change I will adjust to that too.Atthe moment Oil looks as a good buy.
In the heavy emphasis on electricity, this topic is a bit light on nuclear power, i.e. not even mentioned so far. Meanwhile, we read that France - a somewhat more forward-looking country than one we could mention - gets 70% of it's electricity from nuclear.
Sad, isn't it?
xpat
Google and ye shall find!
Just to get you started, Sun straight down gives about 1200W/sq.meter and PV solar cells run about 29% efficient and the necessary inverter to make 120 AC from battery power is maybe 75%. Of course, said sunlight is free, so it's the capital and operating costs that'll get ya ;-)
More Googling will tell you that too!
TTFN.
Perhaps others can fill in the gaps.
With all my respect the major reason why NATO is "feckless" is obviously the simple fact that Russia is a nuclear superpower. It means Russia can literally annihilate NATO in a few hours with it huge nuke arsenal.
Also, I was disappointed to find on this board the same cheap dirty anti-Russian propaganda we can see on CNN, Fox News or AP about Russian-Georgian conflict.
The beauty of Seeking Alpha is its authors usually much smarter and more independent thinkers than their colleagues from mainstream "independent" mass-media.
Unfortunately, it seems to me the author of this article used cheap mass-marked CNN as a source of info about Russia-Georgia conflict instead of less hysterical and more intelligent sources like, say, Christian Science Monitor, The Economist, Time Magazine, Guardian, Times, etc.
And the last but not least.
If Russia wanted to "putting us at great risk", as author claims, it would have disrupted or at least approached major pipelines in Georgia. Russians didn't do that although they easily could do that and push oil prices to stratosphere. They didn't do that because I guess they wanted to send a signal to the West: "Guys, we play according to the rules. We don't fight YOU! We only fight your reckless bloody puppet that forgot how to behave yourself".
They didn't even overthrow Saakashvili, despite of his hysterical complains translated by American mass-medias, as Americans did with Saddam.
I'd suggest author to clear his brains from Cold War prejudice and stop seeing Russians as enemies. Prejudice, fear and hate are bad allies of analytical brains!
I heard rumours of 100 mpg. No, that can't be true, doesn't it? Downside again two drives necessary, a small tank for fuel and a small trunk?
The bottom line geopolitically is that the US stands alone (again), No point in relying on Europe or NATO. Sad to say, there is only one cure for American weakness: to cut the size of government in half, wind down the entitlement scams, bring the troops home. I do not expect it to happen. Pretty bleak outlook.
Assume 0.76 kW/hp
Sun is shining 60 deg on suncollector, efficiency following cosinus function cos (90-60) deg = cos (30 deg) = 0.866
1200 KW /m2
Sun/Power Conversion Efficiency 27 %
Inverter efficiency 75 %
Electro Motor efficiency 90 %.
Here we go
180 hp * 0.76 kW/ hp
----------------------... = 722 m2
(1.2 kW/ m2 * 0.27 * 0.75 * 0.90 * 0.866)
The sunroof is then 722 m2 * 11 ft2/ m2 ~ 7.945 ft2, just about the area of my lot at home. So, I am sitting in the dark, while my car is being fueled. This assumes the sun is shining of course.
Can we stop this please.
Part I. Chaper 2. Deteriorating Oil and Food Security
Part II. Chapter 11 Raising Energy Efficiency, and
Part II. Chapter 12 Turning to Renewable Energy
As an investor (since early '60s) I've found this resource very
informative (and exceptionally well documented). I recommend
that everyone read at least the chapters mentioned above, to get a grasp of where we are, where we will likely be in a few years, and
what can be done by individuals, corporations and governments
to change the trends and not-so-pleasant predictions.
It would be a set up for a hilarious "Peter Sellers" comedy if it wasn't destroying this economy.
Anyone think the pickens plan will get us there??
> jack
This is PRECISELY why we can't afford to have the Green Menace in charge of our energy future!
Fewer supplies and higher prices ahead!
And they LOVE it!
Meanwhile, back here on Earth gas is almost $4 a gallon, people have to take out loans to heat their homes this winter, and max out their credit cards to get to work. Not to mention the wars being fought all over the planet for increasingly scarce energy supplies.
(If you detect a sarcastic disconnect here, I can assure you it was intentional!)
They do very little with a very small budget.
Once upon a time, then, we must have had excellent engineering and construction skills. And sensible regulations that enabled us to actually build the stuff on time and at a reasonable cost. But no longer, I can assure you.
many of the items you suggest should be considered in formulating a USA policy/plan, which we desperately need. but such a plan/strategy would be fortunate to satisfy our needs in the northern part of our hemisphere. our leverage in this new economic/natural resource starved world is limited to our own needs/resolutions. the EU and other OECD nations must act on their own solutions. these nations together with others[African, Mid East, Asia] will deal with Russia as they choose. Russia will succeed/fail on their own world rlationships.
as a side note-- the highway trust fund is bankrupt, just as is the SSA trustfund. with the fungable unified budget, who knows which expense causes the yearly $billions shortfall debt and the total $trillions of debt we leave our childrenover their lifetimes?
better alternative--china natural gas[CHNG.OB]
If you want something resembling numbers go & read John Ryden at www.examiner.com/x-325...
He wrote an article here some months ago on Oshkosh Truck's new electric drive truck and the ultra-capacitor technology the trucks have. He analyzed the energy plans of both candidates with numbers and finds they are long on promise but short on delivery.
As long as it takes 45 minutes to an hour to commute to/from work,
there will be an excessive demand for energy.
What are the forces that drive urban sprawl? One is the desire for
our children to attend "better" schools. That, to me, implies there
is more than ample "racism" (racial discrimination). Or should I
call it "values discrimination".
If we can't/won't stop urban sprawl, we won't get control of our
excessive use of energy. Thirty minutes to drive to a hardware
store (WalMart) because all the mom&pop hardware stores have been driven out of business! Absurd, but true.
WalMart accomodates the principle of urban sprawl by having every
thing one "needs" in one central location. Perhaps we need vertical
residential communities sitting atop of a groundfloor WalMart. The lower floors would be for the "undesirables" with the uppermost
floors reserved for the wealthy. Schools would be online.
You are the first official SA Editor publishing my mantra (instead of Kudlow's, et.al).
Now, to beat your timeline, let's have a Manhattan Project or Moon Shot emphasis, be it from Boone and Warren or "I can't believe it" DC; we've already got a portion of Gore.
It only takes GE and Warren to electrify the railroads; and as you say, we only have to go BACK in time to put in electrified trolleys.
Stop the popcicle treat gimmicks of government (like carbon credits, tax credits, r&D deducts etc., and just go make the changes required - stop the camaflauge).
We need a few of "the buck stops here" Trumans, and Pattons, and Boones.
Seems like we've got a couple of good threads going here...
No, I'm not adverse to a Manhattan-style energy project on its face. But I haven't seen a PLAN yet that could lead to discernible results.
One thing about the invention of electricity, driving, flying, bridge building, bomb making, interstate highways, going to the moon, and computers, et al, is they ALL had a singular objective in mind and specific way to get there.
No one's even decided what KINDS of energy would be best, much less figured out HOW to make them work efficiently. If they made one of us King, we could build enough reactors in a few years while we electrified public transit concurrently. We could scrap corn tomorrow and replace it with sugar. (I don't know, but I think I just told you why none of that can be done presently.)
Boone's the closest thing we've got. He has a specific PLAN, and he knows EXACTLY how to make it happen. God bless him!
AndI I like the the concept "GRASS TANKS".
Along with "ELECTRIFIED RAILS".
And "ELECTRIFIED INTER/INTRASTATE FERRIES".
"BULK ELECTRIC STORAGE".
They all fit so well with SOALR AND WIND FARMS.
And make so much more sense than "DRILL, DRILL, DRILL" - DUH!!!
And beyond "BURN, BURN, BURN".
And I'm not a greenie.....
All anyone has to do is look at France (their nucs), Germany, Switzerland, Holland, Brazil, ETC., for energy LEADERSHIP that leads to INDEPENDENCE; or we can continue to accept our lack of LEADERSHIP (and be DEPENDENT ON BURING, BURNING, BURNING OIL, GAS, DIESEL, COAL AND NG, IN THE ICE).
Yes, plug in electrics! Nuke plants are coming, we know that one is more or less a given. Love biodeisel and liquified coal as well. We have 500 B tons of coal, enough for 100 years of deisel of the trucking industry , railways and you can tax that for road repairs.
Hydrogen appears to be 60,000 total vehicles on the road by 2012. Batteries are still a problem but I see more experiences posters here on that subject. I expect a guy in a garage tinkering figures it out (at least that sounds nice to have happen).
The American autos will stage there come backs on electric vehicles. Assume investing in cables and power regulator couplings or the like will probably be the best investment out of all the alternatives in 2012 for the several years.
We might as well feed Boone who will do something worthwhile vis-a-vis feeding all the others...................
We don't need to do the natural gas vehicles, except it will be the transition away from oil/gasoline, while we go warps-speed for the alternatives hybrids with solid state waste heat recovery to electric (SS-WHRe)
And biofuel hybrids with solid-state direct coversion of waste heat to electric drives will be the final answer.
The onboard storage device will be a GRASS TANK! Filled at the pumps the way we do gasoline/diesel/ethano... today. No battery, no H2, no LPG or CNG, no liquifaction/gasificat... of coal (add effort and energy to then burn them?? = duh!).
Careful who you talk to in DC, they may do what you ask.
Think bigger...................
Term limits; regulation should be created to forbid politicians to invest (includes family and friends) into agriculture, energy, housing or defense during term and two years afterwards. That would solve a lot. Would it ever happen? That's probably the real question :)
And to USHopeful, you are correct. "Not in My Backyard" syndrome is rampant. There are ways to incent those whom don't mind extra money in there pocket for eye sores. The Gridlock Economy by Michael Heller is a good read on this subject.
On Aug 19 10:38 PM nakedjaybird wrote:
> that's bails......
So what side of the fence are you? Go BOONE or SPILL SPILL SPILL?
Did you sign up?
Oil money for a country ususally lead to bad behavior by the country's leaders. They can use oil wealth to buy off the people of the country and build a military. Russia's military was in very bad shape, but now with oil prices high, they are building it back to something threatening.