Ex-policymakers warn energy tsunami coming

Mr_Payne · July 22, 2008, 12:42pm

But Mr. Payne, you overlook the fact that the “price” of energy doesn’t equal it’s “cost.” The long-term consequences of fossil fuel burning are unfunded. If you added a tax onto every gallon to fund the kind of reclamation efforts we’ll need to see in coming decades as a result of global warming alone, the price would skyrocket. We subsidize fossil fuels by pretending that there’s no consequence to burning them and dumping the waste products into the air. But there is. That’s why the pure capitalist model always breaks down when it’s possible to run away from a part of the cost of the economic transaction. There really is no free lunch.
What it boils down to is that you’re “preaching” to the rest of the world that they have to suffer the consequences of your decisions.

As I said earlier, lead the way. If you don’t want to hurt the environment simply do not spend any money. The people who consume the least (all forms) are the ones who cause the least environmental damage.

The simple fact of the matter is that if we truly cared about the environment we’d stop human civilization. We do not, because we understand the benefits of high living standards. The goals of economic growth and environmental stability are diametrically opposed.

xiggi · July 22, 2008, 1:55pm

That is not necessarily true. What gets us into trouble is unmonitored economic growth. Cities are supposed to grow and they do; however, the absence of zoning would result in bigger problems --as cities without much of a zoning show.

In fact, there is a way to reach a better type of economic growth by being concerned about environmental stability. Many of the technologies based on alternative energy are more costly because they generate better sources of employment and are, at times, more labor intensive. Not a bad problem to have.

Curbing growth that simply leads to cheaper products and more garbage is not bad idea. For too long, we have measured EVERYTHING based on price, only to buy more of it, often to simply appease our needs to consume. Open your eyes and check your own closet, look at the saturdays’ garage sale, look at what we bought and never used. Is economic growth really sustainable if it based on more Wal-Marts filled to the rafters with cheap Chinese products that have the shortest lifespan possible?

There is a better economic growth … one that is based on spending the same amount of money for better products that more healthful and last longer. Our society views products that have a 30 year life but a 15 year payback as a … bad idea (read solar panels, for instance.) However, the massive switch to such animals would result in a better economic growth and one that is good for our planet. Unfortunately, what we want is something that is cheaper NOW and saves us money NOW … so we can turn around and drive our SUV to the Megamall more often, and buy more stuff we really do not need. As a country and individuals, we spend well above our means, and the saddest part is that we spend our hard money mostly on … junk.

The only good news that I see is that I am convinced changes will happen sooner or later. It wil take a couple of generations but it will happen.

Mr_Payne · July 22, 2008, 2:07pm

I disagree fundamentally. More labor intensive products means more spent on wages. That gives workers more money to consume with. An absolutely vicious cycle leading to ever more consumption. Consumption is the enemy if you care about the environment.

mapesy · July 22, 2008, 3:57pm

Earlier today, a Senate committee heard testimony on the Pickens’ energy plan. Gal Luft, executive director of the Institute for the Analysis of Global Security, told the committee that using natural gas as a viable alternative in transportation is a “spectacularly bad idea” because we would be shifting from one resource we don’t have to another resource we don’t have.

So what do we do to solve our energy problems? Nothing is perfect. It seems to me that a Marshall-type plan might provide the best–and perhaps most politically acceptable–solutions on a national scale.

Did anyone read MIT Prof. Richard Lester’s proposal? What do you think?

Here’s an excerpt:

So far Ive been talking about our energy problem. But this is incorrect. Because we really have three separate problems, each on its own very difficult to solve. And because the solutions to one will sometimes make the others worse, the overall difficulty is more than additive the whole is greater than the sum of the parts.

The first problem is the projected increase in the use of energy. Unless the world goes into a deep and prolonged recession, by the middle of this century global energy use will likely have doubled, and electricity use will have tripled, placing great pressure on energy supplies and prices.

And in case there is any doubt: whatever role speculators may be playing in the current oil price spike, the underlying issue here is growing demand.

This is an era in which hundreds of millions of people, perhaps even billions, are lifting themselves out of poverty into what we in this country might recognize as at least a way-station on the road to a middle-class standard of living, all within the span of a few decades. This is an economic accomplishment that has no precedent in all of human history, and we should celebrate it.

One of the consequences is sharply increased energy use. But in case anyone thinks that a tripling of electricity demand by mid-century implies irresponsible, profligate consumption, I point out that this would mean, roughly speaking, that the richest billion of the worlds population at that time would be using electricity at about the same rate that the average American uses it today, the middle 7 billion would be using it at a rate that the average Chinese is likely to reach in just a few years (or a bit more than a third of the average Americans usage today), and the poorest billion would still have no electricity at all. That is what a tripling of electricity demand by mid-century will mean.

The second problem is that for at least the next several decades the world will remain heavily dependent on the Persian Gulf for its premium fuels.

More oil and gas will certainly be found and produced in other parts of the world though perhaps not at a rate sufficient to offset the decline in existing fields. In any case these new supplies will generally be more costly, and because of the twist of geological fate which led much of the worlds low-cost oil and gas resources to be deposited in the Gulf region, that volatile area will continue to dominate the global supply picture for the foreseeable future.

**The third problem is of course that of climate change. **This may or may not be the most serious problem of all, but it is certainly the most complex when we consider the scientific, technological, economic and political aspects together as of course we must.

Much has now been learned about this problem, but many major uncertainties remain. So when the question is asked: how fast should we move to try to slow climate change? the answer isnt obvious.

Figuring it out will mean finding a strategy that strikes a balance between the increased economic cost of actions to reduce emissions, on the one hand, and the benefits of those actions (in terms of ecological and economic damage averted in the future), on the other. Unfortunately almost every element in that equation is uncertain. What is certain, though, is that the longer we wait to take action, the more costly the consequences will be. The clock is ticking, and it wont stop ticking simply because we cant or wont decide what to do.

The best chance we have perhaps the only chance --of solving these problems, of breaking out of this triple straitjacket of price, climate, and security pressures, is to accelerate the introduction of new technologies for energy supply and use and deploy them on a very large scale.

SlitheyTove · July 22, 2008, 4:34pm

We do produce natural gas domestically, and it is possible to produce it from novel sources. Methane seeping from landfills, and methane from algae farms, are only two such possibilities. Using natural gas as one energy source to bridge the distance from oil to SomethingElse isn’t a half-bad idea. Using it as the One True Answer for transportation fuel is less likely

mapesy · July 22, 2008, 4:59pm

A report from the All Party Parliamentary Group on Peak Oil in the British House of Commons discusses possible implications of peak oil. The group was set up in 2007 to review estimates of future oil production and consider the consequences of declining world oil production for the UK and world economy.

In particular, the report concluded that the energy crisis “has the potential to make poverty a permanent state for a growing number of people, undoing the development efforts of a generation. Communities across the globe are more vulnerable than ever, living in an unsustainable present and facing an uncertain future.”

Excerpt:

The world is on the brink of an energy crisis that has drastic implications for people in the developing world. As almost every aspect of modern life is sustained by cheap energy. The impacts of rising oil prices will be profound.

Energy security has become a political priority for governments world-wide, a priority which needs to be reflected in the field of international development.

… Many cities, and some nations, realise that global Peak Oil is not only inevitable, but imminent. This paper argues that contingency planning now and subsequent mobilisation of training and adaptation of programme design must be seen as a high priority.

This paper looks initially at Peak Oil and the likely political and economic impacts. Next it presents a series of proposals for practical strategies to build resilience in a time of sharply rising energy prices. Viable alternatives are offered in food production, human settlement design and local energy security.

Global oil production is reaching its peak, and critical decisions are needed to prepare communities everywhere for the dramatic and irreversible changes ahead. Carrying on with business as usual is no longer an option.

Peak Oil

<pre><code>* Modern society owes its growth to energy derived from fossil
fuels, and is almost entirely dependent on it.

Global oil production has remained level since 2005, despite
significant investment and rising prices.

Peak Oil is likely to occur in the near future: our challenge is
to mitigate its impacts and enable communities to develop
resilience and self-reliance.
</code></pre>

The political and economic impacts of energy scarcity

<pre><code>* High energy prices reverse MDG progress

Current oil prices are likely to cause global economic
recession

Peak Oil will impact the most vulnerable in developing
countries, at a time when the twin injustice of climate
change is already hitting hard

Reduced energy demand and alternative energy sources are
essential for economic and political security
</code></pre>

Impact of energy scarcity on humanitarian relief

<pre><code>* The current aid model is energy hungry and vulnerable to
energy scarcity

Capacity to provide assistance is dwindling as the world
economy is hit by soaring oil prices

The food crisis is set to deepen if modern agriculture
remains reliant on fossil fuels

As we strive to make poverty history the twin crises of
climate change and energy scarcity threaten to make it
permanent
</code></pre>

<a href=“http://www.appgopo.org.uk/events/06_110808/Impact%20of%20Peak%20Oil%20on%20International%20Development_final_20080708.pdf[/url][/quote]”>http://www.appgopo.org.uk/events/06_110808/Impact%20of%20Peak%20Oil%20on%20International%20Development_final_20080708.pdf

</a>

timely · July 22, 2008, 5:01pm

Well, there is hope on that front:
[An</a> Air Car You Could See in 2009: ZPM’s 106 MPG Compressed-Air Hybrid : Gas 2.0](<a href=“http://gas2.org/2008/07/15/an-air-car-you-could-see-in-2009-zpms-106-mpg-compressed-air-hybrid/]An”>http://gas2.org/2008/07/15/an-air-car-you-could-see-in-2009-zpms-106-mpg-compressed-air-hybrid/)

A long shot, but we can hope.

From xiggi:

I have friends who bought solar panels a few years ago. They were about $20K. How many people can afford to shell out that kind of money up front?

In our case, we live in a rural area along the Texas coast, and have looked into windmills. The prices have fallen some, so we may be able to swing one eventually, but when we initially priced it, there would be a 20 year return on investment…if the windmill needed no repairs during that 20 years. You would think there would be incentives out there for people like us who could meet some of our energy needs with wind or solar power.

xiggi · July 22, 2008, 5:14pm

All increased wages do not equate to more spending and consumption. I realize that it might be a foreign concept in this part of the world, but there is something called savings and investments. A few weeks ago, a story circulated about a giant mall that stands closr to empty in China because the local workers are saving most of their meager wages and not spending it in friovolous purchases.

Our country loves to spend what it has has and what it can … borrow.

xiggi · July 22, 2008, 5:23pm

The lack of REAL incentives for US citizens to purchase alternative energy products is what many have found so detrimental. Over the years, there have been tax incentives such as production tax credits for energy produced by windmills. I do not know, however, if they are applicable to individuals or only to qualified facilities.

I believe that you might find some help in evaluating how windmills or solar panels would work in Texas by contacting the DOE at nrel.gov or awea.org. I believe they have spreadsheet that show the potential savings. If you can trust people from the other side of the Red River, you might find the technical details available at [Bergey</a> Windpower Co., the world’s leading supplier of small wind turbines](<a href=“http://www.bergey.com/]Bergey”>http://www.bergey.com/)

As you may know, the commercial applications of wind power are booming in Texas.

Mr_Payne · July 22, 2008, 5:30pm

Assuming equal savings rate, more income does mean more consumption. Consumption is growing very fast in China. Looking at gasoline consumption, car buying, etc.

dstark · July 22, 2008, 6:37pm

Xiggi, I like your posts in this thread.

On a different note, after reading this thread, I think oil will be $75 a barrel within the next three years. (I might be a little high. )

mapesy · July 22, 2008, 7:29pm

xiggi said:

I’m not sure we can survive such high gasoline prices unless we invest billions in mass transit. Europeans can live without cars because of relatively cheap, widespread public transit options.

Many Americans are struggling with gasoline at $4 per gallon. If gasoline were to double in price without mass transit options, I think many middle- and lower-income folks would have trouble putting food on the table. Higher gasoline prices mean higher oil prices, which translates into higher costs for everything: transportation, electricity, food, heat, pharmaceuticals, plastics, clothing, etc.

Oil analyst Robert Hirsch believes oil will reach $500/barrel in the next 3-5 years. I have to wonder if we’d see a severe global recession well below that price, with a resulting greatly reduced demand for oil.

I absolutely agree that a period of high prices and sacrifices would help us realize the value of investing in “pipe dreams.”

dstark, I hope you’re right. That would buy us time. (On second thought, it might be better if oil prices remain at current levels or higher to spur meaningful energy policy changes.)

timely · July 22, 2008, 7:52pm

I lived in Europe for 3 years, and it is fundamentally different than the U.S. When the cities there started forming hundreds of years ago, they built their homes close together for security. Sometimes they even built walls around their cities. They don’t have a lot of suburbs. The cities are “tight” rather than spread out.

Mass transit works well for that. Rather than suburbs (at least in the areas I was most familiar with) there might be a few villages (also “tight”). So the train can run through some of the villages on the way to the city. People can walk from their home in the village to the train station, then from the train station in the city to work.

It’s not like that here. For the most part, we need cars to get from home to work, home to the grocery store, etc. We don’t live in tight little villages with a bakery, a grocer, and a meat market.

I think money would best be spent on low-tech mass transit, which is largely affordable. From the Houston Chronicle:

[Adaptation:</a> Painful gas prices are creating some authentic gains | Chron.com - Houston Chronicle](<a href=“http://www.chron.com/disp/story.mpl/editorial/5884030.html]Adaptation:”>http://www.chron.com/disp/story.mpl/editorial/5884030.html)

mapesy · July 23, 2008, 12:18pm

Legislation designed to curb oil speculation, backed by the Democratic leadership, advanced in the Senate yesterday.

Meanwhile, a federal task force released research yesterday that concludes speculators aren’t driving up the price of oil. Instead, the task force blames rising oil prices on fundamental factors like supply and demand.

The task force says investors more often changed their positions after oil prices moved and not before.

[Legislation</a> On Oil Speculation Advances In Senate : NPR](<a href=“http://www.npr.org/templates/story/story.php?storyId=92809579]Legislation”>Legislation On Oil Speculation Advances In Senate : NPR)

Speculators Aren’t Driving Up Oil Prices, Report Says: <a href=“http://www.nytimes.com/2008/07/23/business/23commodities.html?_r=1&ref=business&oref=slogin[/url]”>http://www.nytimes.com/2008/07/23/business/23commodities.html?_r=1&ref=business&oref=slogin</a>

xiggi · July 25, 2008, 1:38pm

[The</a> Real Question: Should Oil Be Cheap?](<a href=“Businessweek - Bloomberg”>Businessweek - Bloomberg)

The Real Question: Should Oil Be Cheap?
Expensive oil hurts, but there’s a business case to be made for a floor under the price of crude 

That’s why there is growing interest, from both the left and right, in a policy that uses taxes to put a floor under the price of oil. Above a certain levelsay $90there would be no tax. But if the world market price dropped below that, taxes would kick in to make U.S. users pay the target amount. 

Expensive energy is a powerful medicine. It may hurt when taken, but it brings long-term cures for a host of ills. It compels companies and people to put fewer miles on the car, ditch the SUV, or install more efficient heating, as Eastern Maine Medical Center in Bangor did: The hospital saves $1 million annually with a system it installed two years ago. 

High energy prices also water the flowers of innovation, making investments in alternatives pay off and juicing the search for more oil. The U.S. uses just over 20 million barrels of oil per day heating homes, powering industry, and fueling cars, trucks, and planes. Energy-saving initiatives, “could easily take 4 million to 5 million barrels a day of demand off the market in 10 years,” says Stanford professor Hillard G. Huntington, executive director of the Energy Modeling Forum, a group of energy experts.

The myth of unlimited energy took a tumble as oil prices soared. By 1980, crude had jumped to $103 per barrel (in today’s dollars). The country responded, buying smaller cars, passing stricter fuel economy standards, making industry more efficient, and boosting oil exploration and drilling. Americans learned to use half as much energy per dollar of gross domestic product as they did before the crisisgains that have paid off handsomely. “All the heavy lifting we did in the 1980s to reduce reliance on energy has made us less vulnerable to the energy shocks today,” says Tufts University economist Gilbert E. Metcalf. 

But that momentum toward greater energy efficiency was soon lost. Within five years, because of the substantial reduction in demand, the world was awash in oil. The Saudis slashed production from 9.9 million barrels per day in 1980 to 3.4 million in 1985and still weren’t able to keep the price per barrel from plunging below $11 in 1986 (the equivalent of $22 today). 

For two decades, oil prices stayed relatively lowwith predictable results. Americans bought millions of SUVs. Investment in alternatives, oil drilling, and efficiency withered. The National Renewable Energy Laboratory shut down its algae biofuel program. “In the U.S., we get fired up about doing something when oil prices are high, then when prices drop, we forget about it,” says Fred Tennant, vice-president for business development at PetroAlgae, a biofuel startup in Melbourne, Fla. 

Prices are sky-high again, and the invisible hand is pushing hard.

mapesy · July 25, 2008, 3:17pm

xiggi, I think a floor is a great idea on many levels, but what do you think it will take for Congress to act?

Our legislators still don’t get it. Rep. Roscoe Bartlett has given 48 hour-long floor addresses on peak oil since March 14, 2005–almost all of them to an empty house. Bartlett says Democrats don’t yet have a real interest in alternative energy and are interested only in drilling. He believes it will take a real crisis like $5/gallon gas plus a shortage for Congress to move.

Ex-policymakers warn energy tsunami coming

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