ART005

An Energy Policy That Makes Sense, Revisited

Flyer,

Fun fact. Without considering the cost of collection. Over a cow's lifetime, the methane it produces is worth more than the meat.

An Energy Policy That Makes Sense, Revisited

Poet,
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.

An Energy Policy That Makes Sense, Revisited

Tom,

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.

An Energy Policy That Makes Sense, Revisited

Poet1,
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!

An Energy Policy That Makes Sense, Revisited

Pursley,

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.....

An Energy Policy That Makes Sense, Revisited

Paulk: My Uranium observation was not about world supply/cost but a follow up to an earlier post that the U.S. imports most of its Uranium. I am not familiar with $/watt nuclear though I have read Cradle to Grave analyses that say utility customers pay high prices. If a nuclear expert says nuclear holds its own I'm not really qualified to challenge that one. Some of the theme of this thread is domestic energry program and imported Uranium might not fit the bill. Maybe the U.S.'s nuclear program is the supply of U.S. mined Uranium going to Canada. There's a fun investment guideline of how the most consitent profiters of the old gold rush were the guys selling picks and shovels.

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.

An Energy Policy That Makes Sense, Revisited

I would like to suggest that Peak Oil and Endless Supply Of Inorganic oil are not mutually exclusive positions. Peak Oil from Hubbert relates extraction rate from a field proportional to what's in the field. As mentioned, world experience is that every field experiences Peak Oil. But there is strong evidence that fields recover, just not at the rate originally pumped. So the inorganic endless supply theory could be real along with Peak Oil. Meaning new fields can be pumped hard and fast while slow Inorganic Oil fails to maintain the field. Both positions can be correct and critically important. Peak oil says the world's growing demand for energy eventually cannot be met with the same continuous basis by oil. Inorganic oil says there will always be oil though the steady state rate might not meet future world demand as it does today (enough fields have not experienced peak oil yet.) So the basis of the original article is appropriate but there isn't the dooms day of a future with no oil. So big question for oil might be: What is the long term steady state supply of Inorganic Oil??? Match that up with the world's forecasted demand growth and you have the outline of a required future energy program. Oil is being recovered from depths beyond any hitorical organic presence. Did the oil seep down there while everything else in the world moves towards the surface, not away from it, or is Inorganic Oil for real? And maybe Dinosaur Goop is real, two sources, why not. I find the either/or organic/inorganic arguement unscientific. Address them separtely and prove/disprove individually.

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.

An Energy Policy That Makes Sense, Revisited

Very good article. And actually I don't think the status of Peak Oil really plays into the message. If supply of oil is organic and destined to be less and less then the problem is huge and hence the urgency descibed. If supply of oil is inorganic and not likely to decrease much going forward then still the growing demand creates the urgency described. The price of oil is market driven and maybe speculators have added a premium but none of the petroleum industry is a bubble that is going to just pop back to happy prices. If this is the inorganic plateau then it's still an economic problem.

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............