Political Energy Policy Just for Laughs 32 comments
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"A good politician is quite as unthinkable as an honest burglar." – H. L Mencken
Drill here, drill now. Energy independence. Alternative energy. Our two Presidential candidates continue to bombard us with solutions – and most are pie in the sky fiction.
Alternate Energy – Private enterprise invests in things that are profitable. Most of the alternate energy options, such as solar or wind farms, in the USA have been used as tax dodges for the rich due to state and federal rebates, tax incentives and guaranteed high price energy purchase agreements. We all have been paying for this, and this is no different than the take over of Fannie and Freddie – the taxpayer is paying the bill. The current technology is not good enough yet. We need a major investment in R & D through joint research by universities and private industry. You can debate who pays for the research, but research is a massively cheaper investment then building a product which will not do the job. Let us not get into a situation where the rich laugh their way to the bank at taxpayers expense.
Nuclear Energy – What a joke. Half the people in America equate nuclear energy and the nuclear bomb. What the hell are we going to do with the waste? Newsflash …. I would rather live next to a nuclear power plant than a coal fired one but you will not like the reason why. There are proven technologies for dealing with the waste if we wanted to hear about them. I built nuclear generating plants when I started my career. But ignorance will govern, the licensing process would be painful, and the engineers to design the plants, the manufacturers to build the components, and the construction hands to build them literally do not exist. Even if America was willing, it would take at least 10 years from now to get the first one on line. This is a long term solution at best, and will only be viable with a consensus from the American people.
Reduce Imports – Watch the price of oil drop every day. Pretty soon you will see the SUV armies out in force. I was building nukes in the 70s during the great oil crisis. Oil went up and was expensive and never went down in price. Yet within a few years I was driving down the road in my muscle car paying a buck a gallon instead of 25 cents. We had our chance then and America voted with its wallet to continue its love with oil. Demand destruction only happens with a REAL cheaper alternative. Not an alternative you have to conjure up with incentives and smoke & mirrors.
Hybrid Cars – At our current level of technology, the only hybrid option at our doorstep is plug in battery. And of course it gets its power from electricity so we can use our alternate energy sources to make this electricity. And we are okay in creating some sort of toxic soup which will be created from all those batteries that last a year or two. We need R & D – not production.
Natural Gas – This is actually the only energy option which is readily available, relatively clean, and has adequate technology today to support wider use. We could make a pretty good sized dent in imports by converting cars. The economics are currently in place. This would probably need some government and state intervention at the beginning to develop and plan and build an infrastructure. To me this is the best chance for a short to medium term energy source to offset imported oil.
Energy from renewable sources– And for those of us who like taxpayer’s money going to the rich who will produce this renewable energy for subsidies, this would be a great option. The economies for production with our current technology are not there. But that is not my reason for opposing alternate energy. It is taking food from the poor. I have watched it drive up food prices, cut down rainforests, and replace crops which people can eat with crops people cannot eat. You are playing with fire if this option is pursued.
Climate Change – Anyone who does not believe climate change is here is dead from the neck up. Did man create this mess or it is a climatic cycle – this is a subject for discussion at the bar. I have personally been involved in projects which actually changed the climate. Man is the solution to climate change. An initiative to address climate change would pump money into an economy which is stalling. And I am against carbon offsets or another other faux remedies. We need a consensus plan which involves taxation and not incentives.
Drilling for oil – Please drill and deplete these oil fields so we can stop talking about it. They will be drilled eventually so let’s get this over with. There is no argument it would reduce a small percentage of imported oil beginning in five years time. Oh, don’t think the oil will start flowing tomorrow. The oil industry is in boom conditions. Offshore construction is backed up for years in the future. The more remote drilling locations do not have infrastructure which adds costs and time.
Conservation – It will take years for the effects of conservation to be felt so we need to start now. Raise new car’s fuel economy standards, institute a strict national building code relating to energy conservation features on new builds, and tax energy inefficient appliances,. The states can use their non-existing budget surpluses to retrofit existing houses little by little.
Another detail conveniently left out by the Presidential Candidates is that they do not have the authority to get any of these energy solutions implemented. Of course Congress does if you can stomach a solution coated with pork.
Oh, by the way, we are in an economic slump. How are we going to pay for this?
Disclosures: None
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This article has 32 comments:
I think the real answer is a combination of some of these options, maybe even regional solutions where wind, tidal, geo thermal make sense.
But whatever the solution is, it would require congress to get together, it would require those with a special agenda to get together, and it would require commercial enterprise to get together. Only the last has promise. The weakness of America is the inability of our political leadership to agree on a solution for anything and act on it....energy policy, health care, etc. They have failed us all....both parties.
DRILLING MORE WILL ONLY MAKE A SMALL DENT IN THE TRADE DEFICIT and SUPPLY/DEMAND SITUATION.
There is no doubt that eventually XOM and CVX will be back up to the 90's.
See:
www.crossprofit.com/vi...
and
www.crossprofit.com/vi...
For some reason, most seem to buy these two when they are at their peak. The time to buy is when they are 20+% below where they will be in several months from now. In the interim; the dividend isn't much, but it's still a dividend.
CrossProfit
Disclosure: no current conflicts (bias - long in the near future, for clients/associates)
I agree. I am surprised at how little this is mentioned besides tboons adds.
Nuclear's cheaper now, but wait until new plants are built (if they ever are). The regulatory costs for each run into the billions alone. Not to mention the additional billions in government guarantees the utility companies are demanding to build them in the first place.
To say that the federal government (with the assistance of their handmaiden environmental lobby) has screwed up energy production in this country is the UNDERSTATEMENT OF ALL TIME !!!
This would be some kind of bad joke (or Twilight Zone script) if we weren't living in the middle of it.
I have to admit, T Boone makes even more sense live and in person. Unfortunately, I think we will pi** this opportunity for change away, just like the early 80s. Big Oil and Big government have no incentive to change; no continuing revenue stream and no political contributions. That why all the alt energy bashing.
Like 9/11, we will wait for the catastrophe, and then do something (usually wrong). Nationalization of oil, similar to Fannie and Freddie
is already in the works. Government and industry will get theirs,
everyone else will be left to fend for themselves.
Oh, BTW, you live in a dream world if you think there is no resistance to wind farms. "They bother migrating birds", "the shadows disturb wildlife", "the noise bothers animals". Don't worry, if you want to do it someone will oppose it.
Corn ethanol does not drive up the price of food, that is BS. The cost of oil drives up the price of food. If the cost of food went up because of short supply, farmers would make more on the corn, instead they are making less after costs.
Ethanol from corn is not an alternative to foriegn oil, because of the large amount of oil that goes into fertilizer and tilling.
Ethanol from switchgrass, no fertilizer, no tilling just cut it once a year uses far less petroleum to produce. Ethanol can be made from any organic source, not just corn.
Ethanol, Nuclear, CNG, Wind, Solar are all parts of the solution, but yes, 10 years or more is the timeframe. It took us 100 years to dig this hole, there is no 6 month solution.
No, nationalizing the oil and gas industry isn't the worry. They don't need the government (other than to get out of their way).
But the $50 billion the Congress is "loaning" to the Detroit 3 surely qualifies. All together, they don't have that much equity.
Hold on now. The last I looked the price of corn was 3X what it used to be. And it still takes more energy to make a gallon or corn ethanol than it produces, unless the laws of biology and physics have been repealed.
We only have to look at Brazil if we want to see how ethanol CAN work. Derive it from SUGAR, not corn. Unfortunately, U.S. sugar farmers have gone in the other direction. They get their government subsidies through artificial price mechanisms and import tariffs.
Yet another stunning government failure!
I am astonished that NGV's are not discussed more about the potential impact it could have with a minimal effort and work on our consumption of oil.
Sure there are many things to be discussed about the best ways to implement everything but the technology is ready now and is being used in a small scale in this country and around the world but would have a very substantial impact for individuals and the country if we got together and did this on a large scale.
First, I think the country needs to become informed about what NGV's are all about and how this could be the simplest, most effective and quickest way to change our gasoline consumption and save money too!
Hopefully the media, a celebrity, the government, business or maybe even the politicans in this election will be start to make some noise about the potential with this and lets see if Americans want to show oil
we no longer have to be at their mercy.
Here's one hyperlink I found informative about NGV's from Canada, there are more just need to do some internet searches.
www.uniongas.com/about...
Ethanol (and other biofuels) don't drive up the price of food? Driving up the price of corn was the whole POINT of support of corn ethanol. That is why the National Corn Growers Association loves it so much, and fights so hard for continuation of the government subsidies and mandates.
If one measures effects of the diversion of corn to ethanol on final consumer spending (as measured by the USDA, 45% of which is weighted by the cost of meals eaten in restaurants), ethanol's impact on year-on-year price rises is modest in percentage terms (though still more than $10 billion in absolute terms). If one measures the effect of ethanol on GRAIN and OILSEED prices, however, the percentage is much, much larger. That is the measure that counts, by the way, for the poorest people in the world, who are spending more than 50% of their household income ($2 per day or less) on basic foodstuffs, not the highly processed, highly packaged stuff that we all buy in supermarkets.
See: papers.ssrn.com/sol3/p...
Alternate energy = heavily subsidized boondoggles. It is just throwing money at a problem so you can "feel good."
Nuclear energy = the best longterm solution which means, of course, that it is unfeasible. The gentleman is absolutely right, the engineers and construction people it would take to build nuclear power plants do not exist. It would take a decade to put that infrastructure in place. However, just because it would take a decade doesn't mean we should not do it.
Conserve = good idea and, unfortunately, that will take high energy prices. We need to keep oil at $100/bbl either by allowing the marketplace to do it, or putting government fiat in place.
Natural Gas = good shorterm fix. But, longterm, natural gas is going to be as hard to get as oil.
Hybrid cars = I don't know if I agree with him here. At some point you have to make them and with production a lot of R&D is going to be easy to justify. So, maybe a little tax incentive here makes sense.
If you would care to look beyond the edge of Island America, you might notice that that nuclear plants have been going up all over the world for a long time.
No offense, but as an engineer you should do your homework about our nation's NG reserves. As of this time, we have an 118 year supply at current rates of usage. And gas hydrates off our coasts, which will be in production in coming decades, contain 160X (!) the density of our present NG.
Today we are technologically able with much stretch to build a car which comes close to 60 mpg. what is stopping us is the road safety standards on collisions which add weight to the car, and possibly emissions standards. Think of the significant reduction in oil imports just through this item alone.
Steven Hansen
thefitzman.blogspot.co...
Failure to adopt something along these lines in the next year or so will be catastrophic to the US economy and our way of life as we enter an era of peak oil where worldwide oil supply will not keep pace with worldwide oil demand. For a country that imports 15 million barrels of foreign oil a day (and uses 21 million barrels), it should be obvious to any thinking human being what steps need to be taken, and taken very soon. The last 8 years have been a complete waste, and 2015 is d-day according to energy company CEO's. That is only 7 years away....
Also, you don’t understand the Fannie and Freddie situation. Though the taxpayer is currently bailing them out and it is a very large amount of money, it is a small amount of money compared to the economic benefit that those 2 have given to the US over the past several decades. Because they were implicitly backed by the federal government, they offered lower rate loans and higher risk products. The 30 year mortgage would not exist without these 2. Granted the companies were mismanaged lately under the eye (or lack of eye) of the Bush administration and Greenspan, but that doesn’t diminish what they added to the long term economy of the US.
So what if the solar and wind tax credits are not perfect by some people’s estimate (it seems like yours). The overall benefit far surpasses that. That benefit being the acceleration into the future of alternate energy. It goes back to the old saying: “What would you rather have? One million dollars or a penny that doubles every day for a month?”
Lets try something.
Let us, those of us that are responding to the article, put together a long term plan.
It will not please everyone but it will be a huge step in the right direction. Just to prove that folks who may differ can assemble a plan.
CNG is the quickest way to a bridge alternative fuel. We need a refueling infrastructure. The EPA certified engines both heavy and auto exist. We could bail out the weak 3 and we, the Government, would dictate where the dollars go. They build CNG vehicles. Ethanol needs to be pushed out in my opinion, but if consensus is that it to is a bridge fuel so be it. It has low BTU, is very corrosive, it is expensive to make and economically, is not the best bang for the buck. In Florida we have mandated 10% ethanol in our gas. I try my best to avoid buying it for our fleet due to is poor performance.
The folks who produce NG, along with the manufacturing entities and some private dollars, UPS and FED EX need a better infrastructure and own the highest percent of CNG vehicles, would be part of a consortium to build a CNG refueling infrastructure.
CNG Vehicles must be operated around a refueling hub because of the limited driving range.
Wind energy is a great way to get 15% or so of our electric energy, is relatively easy to convert power plants, lowers emissions by a large percent, and puts folks to work building the hardware, power grid, and NG lines. We have manufactures of the wind generating hardware in the U. S. A. T Boone's plan frees up NG for vehicle use. The debate over the amount of NG is pointless. We have enough to run a 10 to 15 year cycle to bridge us to..., and the effect on manufacturing CNG vehicles is minimal.
Ford, GM, Chrysler, Toyota, Honda, Cummins, DDC, John Deer, Cat, all these companies and others have EPA certified engines / vehicles.We missed the opportunity to do this once.
In the mid '80's through the state and FPL, there was a tax credit / rebate for solar power. The solar water heater business grew quickly, and left just as quick when the credit / rebate was removed. It is a no brainer to use solar for one of the highest domestic uses of power. This is a two-for, as it creates jobs and can be be put in place now.
I am interested in the use of a floating fuel tax for retail fuel purchases. It would be used to keep fuel at a more stable price, continue to encourage conservation, and generate dollars.
The technology for plug in vehicles and ways to reduce coals poor emissions are two areas that needs funding. The EPA has not put pressure on the electric companies to move forward with coals emission issues as they have with heavy vehicle / equipment. The diesel engine industry has made huge reductions in their emissions and this technology can be used for power plant emission reductions.
Doing the things we are certain will work is better than doing nothing at all.