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Wednesday, April 30, 2008

Global Energy Flux

posted by on April 30 at 11:50 AM

I’ve tried to stay out of this little fight, but I have to jump in here.

(As a prelude, I think both Erica and Annie are smart and all three candidates energy policies are an embarrassment. As an example, corn-based biofuels are a fucking farce.)

This:

And she addresses some of the actual reasons gas prices are at record highs: Americaís refusal to dip into oil reserves, and OPECís stranglehold on oil production.

is wrong.


1. The strategic petroleum reserve is intended for, and should remain for, genuine supply shocks—sudden losses of major sources of oil. A nuclear war in the Mideast, a revolution in Russia, a massive earthquake destroying the Alaskan pipeline, a hurricane decimating the gulf oil platforms, New Orleans and Texas—these are good uses for the strategic petroleum reserve, not as a response demand-driven rises in energy costs. If we use up the reserve in a vain attempt to reverse long-term trends, we will be left without petroleum when we really need it. And we need it. Without petroleum, our society stops. No food at the grocery store. No clean water coming out of the taps. No lights. No heat. The reserve is absolutely necessary to keep our civilization afloat after an unexpected sudden hit in production, to give us enough time to scramble and find an alternative source or drastically ration.

Any politician than wants to use the reserve for short-term political gain—to drive down energy costs temporarily before a key election—is profoundly selfish and irresponsible.

2. With the rise of major new suppliers and alterative oil sources, OPEC plays an increasingly minor role in global energy production. Further, the oil reserves and production rates in most OPEC countries have already started their decline.

Let’s talk numbers. In 2007, the United States imported 13,439 thousand barrels of oil per day from foreign countries, down slightly from 13,707 in 2006. Domestic field production was about 5,103 thousand barrels per day in 2007. Therefore about three quarters of oil consumed in the United States is from foreign sources.

Personally I think this is a good thing. I’d much rather the United States consume other nations oil resources for as long as we can get away with it, saving our deposits for the future in which they will inevitably be more valuable than they are now. From a strategic point of view, it’s a decent trade-off. We keep an intrinsically valuable resource in our nation while sending off a fiat currency abroad. Far better than the trade deficit from China, in which we mostly receive shitty consumer goods.

But wait, you say, why should we send all this money to the Mideast! Only about 2,170 thousand barrels per day came from the Persian Gulf, or 16% of all imports, ten percent of the total. Imports from all OPEC nations were just shy of 6000 thousand barrels per day, or just under half of all imports, a third of all oil consumed.

The nation from which we imported the most petroleum? Canada at 2,426 thousand barrels per day. For those of you keeping track, that’s more than we imported from the entire Persian Gulf in 2007. Much of this was alternative petroleum sources, like oil sands. As I’ve written before, these alternative sources often come at a horrific environmental cost.

Which brings me to my final point. Probably the single most important technology to develop right now, if you care about protecting the environment and expanding energy reserves, is carbon sequestration. Coal, oil shale, tar sands and other dirtier fossil fuels are going to play in increasingly large part in global energy production. China and India are, right now, embarking on a massive expansion of coal-fired power plants. Italy and Germany, having banned nuclear power, are also on a coal-plant building spree. With carbon sequestration, at least, the emissions of these plants can be contained and the impact reduced.

Carbon sequestration, often absurdly wrapped under the term “clean coal,” remains a lab process. No one has invested in the R&D needed to make it commercially viable. We should. It’s the most obvious, the easiest and clearly most potentially effective way of reducing the impact of coming environmental and energy crises.

So, I give Obama credit for having a policy position that recognizes coal as an increasingly dominant source of energy worldwide, a policy that seeks to reduce the environmental impact of this reality—even if I think the majority of his energy policy is about as crappy as the others…

Updated:

Commenter arduous takes me to task:

First of all, I disagree that carbon sequestration should be our first priority. Carbon sequestration is far from proven, and like hydrogen vehicles, appears to be pie in the sky and somewhat of a red herring. The science isn’t there yet, and may not be there for a long while. Our first priority should be on alternative energy like solar and wind. According to Scientific American’s article entitled “A Solar Grand Plan” investment in solar could supply “69 percent of the U.S.ís electricity and 35 percent of its total energy by 2050.” Here the science is much more clear, and the technology is closer to being developed. Renewables HAVE to be our first priority….

Read what Tim Flannery has to say about carbon sequestration.

Even if you are right and he is wrong about carbon sequestration’s viability (and honestly I hope carbon sequestration is eventually viable because I think it would be another useful tool to have in our arsenal, shouldn’t we be focusing the bulk on our money on REDUCING emissions rather than something that MIGHT in a few decades be able to sap emissions out of the air?

Solar energy might be cheaper than oil in about FIVE years. We’re so close. It’s ridiculous to say that carbon sequestration should be our first line of offense.

To which I reply:

If I was elected president in 2000, I would have invested massively in solar and wind technology. Solar and wind power are among the very few energy sources with even the possibility of having a lower lifetime environmental impact—when considering producing the plant, running the plant and dismantling the plant—than fossil fuels.

I wasn’t president; arduous wasn’t. Bush was.

The policy decision worldwide—in India, in China, in Germany, in Italy and dozens of other nations—was to stick with coal for at least another thirty years. We didn’t make this decision. The lack of a viable non-fossil fuel technology right now, not five years from now, did.

The plants are going to be built, regardless if we get carbon sequestration working. So, although I don’t prefer carbon sequestration and I share the doubts that it’ll ever work on a commercial scale, it’s our best and last hope for dealing with the decisions already made.

Since we’re in fantasy land, if I were president today, I’d focus policy on the demand side of the equation. I’d progressively increase the gas tax over time, add in a fossil fuel windfall tax and use the revenues to invest massively in deploying existing energy efficient technology. Increase federal subsidies for mass transit. Invest in a West coast high speed rail corridor. Pay for homeowners to put in new insulation and windows, new boilers and air conditioners, new refrigerators and ovens and so on.

RSS icon Comments

1

If we just followed Canada's lead in using 1/20th of the money we waste in Iraq on bribes to install C02 scrubbers on all our existing and future coal plants, we could not only REDUCE pollution (net economic gain), we could REDUCE our global warming emissions and create American jobs at the same time.

And, the other secret is, you can reduce energy usage. Just ask a certain major city of Juneau, Alaska, about that.

We could also, instead of outsourcing car manufacturing overseas (net job loss, pollution from shipping (not counted by Kyoto, but will be by the EU)) - we could retrofit existing cars, trucks and SUVs (rolling stock that is) in the USA to get higher mpg. With existing technology, your average 19 mpg car can become a 29 mpg car - reducing global warming emissions one-third, pollution one-third, creating US jobs, and reducing net imports of oil.

But that would be ... prudent.

300 days and a wakeup.

Posted by Will in Seattle | April 30, 2008 11:58 AM
2

Thank you for that, Johathan. My wife's father was one of the inventors of carbon sequestration in the 70s. His perspective is basically that we have the choice to go back to the Stone Age, which isn't going to happen anytime soon, or implement technological solutions like carbon sequestration. Everyone in the world could trade their SUVs for bicycles and it wouldn't do anything more than slightly delay environmental disaster.

Posted by PJ | April 30, 2008 12:10 PM
3

Amen, Johnathan. You should also point out that the entire Strategic Petroleum Reserve amounts to a total of 58 days worth of oil. That's right, it wouldn't even last the summer. So tapping into that is about as dumb as a gas tax holiday.

Posted by F | April 30, 2008 12:16 PM
4

I didn't have time to read Erica's latest tome, but this statement of hers that Jonathan points out is colossally wrong on so many levels:

And she addresses some of the actual reasons gas prices are at record highs: Americaís refusal to dip into oil reserves, and OPECís stranglehold on oil production.

First off, it's just factually wrong. Our strategic petroleum reserve is a drop in the bucket. And as Jonathan notes, OPEC doesn't have the control it used to.

Oil prices are at record highs because of a little thing called "supply and demand." See China and India. See America's own increased consumption over the last 10 or 20 years. See the fact that oil is a finite resource.

Second, this statement is economically wrong. To suggest that these are the reasons gas prices are at record highs is to suggest that there's a scapegoat somewhere (OPEC) and that the solution to high gas prices is to just magically make gas cheaper.

One real reason gas is so expensive today is that our nation's policies have relentlessly tried to make it cheaper. The more you try to make it cheap in the short term, the more expensive it gets in the long term. Cheap gas is one of the reasons we have expensive gas and staggering oil company profits today. The more the likes of Hillary and McCain pander about making gas cheaper now, the more expensive it will get in the future--and the more opportunity politicians will have to pander about high gas prices in the future. In this respect, the vicious cycle of oil addiction is not much different from the vicious cycle of drug addiction.

Third, this statement is morally wrong. And this is what really doesn't make sense. This isn't the kind of thing that someone who claims to be an environmental and transportation activist would say. It's a talking point of the Rush Limbaugh, Glenn Beck, Ann Coulter crowd.

Posted by cressona | April 30, 2008 12:20 PM
5

Wow, thanks for posting this! It was very informative.

Posted by Hernandez | April 30, 2008 12:21 PM
6

Oh and your point about carbon sequestration is an excellent one. We have tons of cheap coal and sooner or later, we're going to have to use it. Carbon sequestration is the only to do so.

Just to nitpick, though: OPEC has an influence on world oil prices even if we don't buy a single drop from them. However, they don't have the power they once had, since they only produce 40% of the world's oil.

Posted by F | April 30, 2008 12:24 PM
7

Jonathan, I wrote a really long post which got snagged as spam because I linked to TWO articles (quel horreur!), so I don't have the time to rewrite it, but I really disagree with you on a number of points.

First of all, I disagree that carbon sequestration should be our first priority. Carbon sequestration is far from proven, and like hydrogen vehicles, appears to be pie in the sky and somewhat of a red herring. The science isn't there yet, and may not be there for a long while. Our first priority should be on alternative energy like solar and wind. According to Scientific American's article entitled "A Solar Grand Plan" investment in solar could supply "69 percent of the U.S.ís electricity and 35 percent of its total energy by 2050." Here the science is much more clear, and the technology is closer to being developed. Renewables HAVE to be our first priority.

Secondly, there are TWO huge issues we are dealing with and global warming is just one of them. Peak oil is in some ways the more critical problem. Here's the thing. Even if we stopped emitting carbon today, global warming would happen. So in a sense, it is more practical to be adapting and preparing for global warming (building levees, dams, etc.)

Peak oil though is a different beast. Because, as you point out, oil is a limited resource, and growing more limited as India and China start to develop, we HAVE to work on alternative energy and it HAS to be our number one priority. This is not just about energy either. This is about maintaining our global edge. If we do not do the proper R&D for alternative energy, Europe and Asia will, and we will be left in the dust.

Posted by arduous | April 30, 2008 12:30 PM
8

Maybe Joe Connolly will stop calling ECB an environmental radical since she wants greater oil production. Maybe when ECB is a guest on KUOW she will be introduced as a transit advocate who opposes building more roads but does favor more oil production, and cheaper gas. Maybe Erica's Stranger bio will mention that in addition to being a former vegan, she's also a former environmentalist.

Posted by elenchos | April 30, 2008 12:32 PM
9

looks like someone's been spending a lot of time sucking Ben Stein's cock lately.

Posted by josh bomb | April 30, 2008 12:40 PM
10

Read what Tim Flannery has to say about carbon sequestration.

Even if you are right and he is wrong about carbon sequestration's viability (and honestly I hope carbon sequestration is eventually viable because I think it would be another useful tool to have in our arsenal, shouldn't we be focusing the bulk on our money on REDUCING emissions rather than something that MIGHT in a few decades be able to sap emissions out of the air?

Solar energy might be cheaper than oil in about FIVE years. We're so close. It's ridiculous to say that carbon sequestration should be our first line of offense.

Posted by arduous | April 30, 2008 12:42 PM
11

Excellent article, Jonathan.

Will, Canada's environmental record is a TERRIBLE one, due entirely to one thing: Coal sands. The Alberta coal sands operation is single-handedly wiping out -- indeed, reversing -- ALL of Canada's carbon gains in other areas. And they've just gotten started. Canada's coal sands are as big a catastrophe as anything going on in China.

Posted by Fnarf | April 30, 2008 12:43 PM
12

Arduous.

You make excellent points, and I largely agree with you.

If I was elected president in 2000, I would have invested massively in solar technology. I wasn't president; you weren't. Bush was.

The policy decision worldwide--in India, in China, in Germany, in Italy and dozens of other nations--was to stick with coal for at least another thirty years. We didn't make this decision. The lack of a viable non-fossil fuel technology right now, not five years from now, did.

The plants are going to be built--regardless if we get carbon sequestration working. So, although I don't prefer carbon sequestration, and I share the doubts that it'll ever work on a commercial scale, it's our best and last hope for dealing with the decisions already made.

Since we're in fantasy land, if I were president today, I'd focus policy on the *demand* side of the equation. I'd progressively *increase* the gas tax, add in a fossil fuel windfall tax and use the revenues to invest massively in deploying *existing* energy efficient technology. Increase federal subsidies for mass transit. Invest in a West coast high speed rail corridor. Pay for homeowners to put in new insulation and windows, new boilers and air conditioners, new refrigerators and ovens and so on.

Posted by Jonathan Golob | April 30, 2008 12:54 PM
13

Coal, even if the carbon were sequestered, still comes at too high a price. The carbon released into the atmosphere is just an afterthought compared to the hell-scape that areas victimized by surface mining are left with. How do you like the idea of a permanent 7 billion gallon slurry pond behind an earthen impoundment higher than the Hoover Dam?

I don't know what the answer is, but it cannot be coal. Maybe nuclear, maybe massive subsidization of materials-science research for improving solar-cell efficiency, something. But we can't just look at CO2 pollution when we're talking about the environmental costs of energy production. The environmental ramifications for areas that have been involved in Mountaintop Removal mining are likely to be worse than the worst-case scenario for any future global warming.


http://en.wikipedia.org/wiki/Mountaintop_removal_mining

Posted by oljb | April 30, 2008 12:57 PM
14

A Stranger writer who knows the subject upon which he is holding forth. What a consistent pleasure to read he is.

Posted by laterite | April 30, 2008 1:03 PM
15

The specific tactics against global warming change with changing technology and changing global conditions, but what remains constant is that our leaders have a choice between telling people what they want to hear and telling them the truth. That Hillary is wrong about gas taxes is far less important than how wrong it is for her to be in a race to out-pander McCain. What's worse, she's weakening the the one candidate who is trying to get the public to swallow the bitter pill we have in store.

And even if you're not an environmentalist, do you really think she will hesitate to triangulate away labor issues, or gay issues, or women's issues if she sees an opportunity?

Posted by elenchos | April 30, 2008 1:05 PM
16

There are other ways to sequester carbon dioxide emissions. I have been working with a company in Israel that grows algae by feeding smokestack gas into ponds, and that algae has been turned into biodiesel. The algae can be grown right next to the powerstation (land there is usually cheap and not particularly desirable for growing crops).

With algae, CO2 emissions can be captured at source and used to make carbon neutral biofuels. Overall this approach yields a net carbon emission reduction, because of fossil fuel displacement.

Posted by boyd main | April 30, 2008 1:09 PM
17

Fnarf, you're right that Alberta is a massive environmental disaster, but you have to look at provincial differences within Canada. As of July 1, British Columbia will be phasing in a carbon tax and offsetting it with income tax rebates so that the result isn't regressive.

Sequestration is worth some research money, but I'm with those who say that we have to what we already know how to do first. Renewable electrical generation combined with conversion of most cars to plug-in hybrids will get us most of the way to our necessary emissions targets, and those technologies already exist. We just have to price carbon emissions to encourage the right investments.

Posted by Cascadian | April 30, 2008 1:09 PM
18

Jonathan - Well written. It continues to amaze me that the same politicians who continue to wear their badges of patriotism fail to account for the medium and long term implications (in both foreign and domestic policy) of their energy policies. They obviously do this in exchange for short term political gain.

The baby boomers often claim that Generations x, y an millennial are excessively narcissistic. Yet what we hear from them are policies that continue push out and impose great costs on future generations so that they can get elected and continue to consume at rates that we understand to be unsustainable.

I have just one point of contention with your post where you oversimplify the global oil market by equating the amount of oil that we import from middle east with the

The fact of the matter is as Oil is a global commodity our demand and the increasing demand of other countries places continuing upward price pressure on this commodity. A simple illustration of the principal is that the money that all the consumers pay for oil goes in to a pot that gets mixed up and then goes out to the suppliers to pay for their oil. We are not buying some different or alternative product from Canada (despite the differing production technique) its all oil. Thus while we may not actually be sending dollars to Saudi Arabia our demand and everyone elseís raises the return that they get on each barrel of oil. Thus we are all contributing to the inflow of currency to the Middle East, and Russia, and Norway, and Canada, and Venezuela.
Thanks for bringing this issue to SLOG it is something that more of us need to be thinking about.

Posted by First Time Caller Long Time Listener | April 30, 2008 1:10 PM
19

Jonathan Golob @12:

Since we're in fantasy land, if I were president today, I'd focus policy on the *demand* side of the equation. I'd progressively *increase* the gas tax, add in a fossil fuel windfall tax and use the revenues to invest massively in deploying *existing* energy efficient technology. Increase federal subsidies for mass transit. Invest in a West coast high speed rail corridor. Pay for homeowners to put in new insulation and windows, new boilers and air conditioners, new refrigerators and ovens and so on.

In terms of real-life potential presidencies, it's an easy argument to make that an Obama presidency would be, by far, the next best thing to a Jonathan Golob presidency. Not only has Obama held the line against the gas-tax holiday, he has acknowledged that a cap-and-trade system would not be a free lunch. On the campaign trail he has spoken repeatedly in favor of mass transit and high-speed, intercity rail.

What makes Hillary's gas-tax pander so discouraging in a way that dwarfs Obama's associations with the nuclear and coal industries is this: she tries to hold out the promise that there is such a thing as a free lunch. To (A) pander about cheap, painless energy solutions and (B) offer serious answers our climate and energy problems--this is an oxymoron. Hillary isn't just guilty of cognitive dissonance; she's guilty of willful cognitive dissonance.

Posted by cressona | April 30, 2008 1:14 PM
20

Cascadian, of course you're right -- but the thing is, for every "penny" of carbon BC saves with their new schemes, Alberta is blowing dollars. Canada is rocketing away from their Kyoto target, and it's coal sand's fault. That site up there is MASSIVE -- it's eventually going to be bigger than a lot of US states.

Posted by Fnarf | April 30, 2008 1:16 PM
21

@20 - ignoring Fnarf's continued lack of knowledge about Canada ... (hint: in Canada the Provinces have the legal constitutional total control of all natural resources within their boundaries, and the feds have zero rights and zero influence) ....

Basically, it's like blaming WA, OR, and CA for implementing global warming solutions and investing in alternative energy while TX and LA keep pumping out crud.

Want to cut Alberta's oil sands usage? Get a higher mpg vehicle or bike/bus/walk to work. But stop blaming them for supplying you with one of the drugs you want ...

Posted by Will in Seattle | April 30, 2008 1:21 PM
22

@15 - yes, Hils will triangulate away labor, gays, women's rights and energy policy if it helps her.

It's what she does.

It's what she always has done. And will continue to do.

Posted by Will in Seattle | April 30, 2008 1:24 PM
23

Tapping SPR for temporary political gain is stupid... Agreed.

OPEC is a player, but they don't control oil prices. Pressuring them to increase supply is useless... Agreed.

Carbon sequestration should be a top priority... WTF? Are you out of your mind?

Lets say, just for the sake of argument, that we solve all the technical questions, and discover a method to sequestrate carbon next year. I'll even throw in that it will cheap and easy (hah!). The insurmountable hurdle isn't the technology or the cost. The hurdle is this: where are you going to put it? You would need to be able to (safely and permanently) bury a volume of carbon the size of Lake Erie every year.

You might be able to find some place to bury it for a few years, if you're lucky. But you'd run out of realistic places to bury it pretty damned fast. You simply cannot sweep that much carbon under the rug, regardless of the technological feasibility.

Posted by Reverse Polarity | April 30, 2008 1:32 PM
24

1) People can conserve energy significantly if they're really hit hard in the pocketbook:

http://www.adn.com/news/alaska/story/390413.html

2) OK, so the (former) Soviets shouldn't be trusted with nuclear power plants, but the French seem to be doing OK, getting ~ 70% (?) of their power that way. However, don't forget Clock and Clack: "Nobody copies the French, and the French copy nobody".

Posted by Andrew Taylor | April 30, 2008 1:41 PM
25

Will, I'm not ignorant of Canada's brand of federalism. I'm also not stupid enough to somehow think that Alberta's dirty secret isn't part of Canada's energy situation. So, even though BC is as green as all get-out (as long as you ignore their shocking forestry practices) CANADA AS A WHOLE is a carbon-emissions disaster, and getting worse by the second.

If you want to talk about BC, talk about BC. But if you're going to continue to say "Canada" I'm going to continue to point out that Alberta is part of Canada whether you like it or not.

Posted by Fnarf | April 30, 2008 1:54 PM
26

I would vote for you.

Posted by Nay | April 30, 2008 2:26 PM
27

Apologies if this has been covered in the comments -- no time to read through them all -- but NPR yesterday had a couple of spots on why the gas prices are so high. On both spots, the experts they talked with refuted the idea that the current high prices is a result of typical supply/demand economics. Demand is down and supply is up. The likely cause is a result of the poor economy -- our dollar is down, which causes investors to flee to investments like gold and .... oil. Thus, the price of oil is driven up. Tada.

Posted by not deman | April 30, 2008 2:57 PM
28

tapping the strategic oil reserve - stupid ass

And further down plummets Erica's currency.
I'm going to have to take another pass at all her great transpo/enviro articles in my scrapbook and reevaluate

Posted by ho' know | April 30, 2008 2:57 PM
30

As Jonathan stated, the reason gas prices are so high has nothing to do with OPEC (a first time for everything, eh?). What hasn't been brought up is that the futures market for oil is what is driving up the prices. We allow a commodity so closely linked to our economy to be traded as easily and regularly as pork bellies. The government hasn't put in regulation to stop the rampant futures trading on oil stocks, and I am not sure why. Even the head of OPEC was quoted as saying that prices are over-inflated due to the stock market and not actual supply issues.

And wind and solar power is where we should be going, we have wayyy to much land mass and coastline to go with coal.

Posted by Original Monique | April 30, 2008 3:05 PM
31

Good point Original Monique @30. The speculation on oil, and the similar speculation on agricultural commodities, has made me reconsider whether 'cap and trade' approaches to CO2 emissions are really a good idea. Could speculation distort the true cost of pollution to the point where it may be more profitable to pollute than not?

Posted by boyd main | April 30, 2008 3:59 PM
32

@25 - again, you fail to understand we in the US have similar problems (speaking of forestry practices, how many COUNTIES did we flood this past Winter ...) - and the implications of what it means.

Complaining about global energy usage when we're one of the primary SOURCES of the demand side is fairly useless. It's like opening up ANWAR when we'd be better off saving it for later when oil is even more expensive.

Energy speculation, as @30 and @31 point out, is highly considered as a major problem, and has been the subject of numerous articles in the Wall Street Journal (including one yesterday) and Fortune, among others.

But we're unlikely to see hedge funds and speculators reined in or progress in reducing oil consumption, until Cheney and his lackey Bush have left the building and McCain is doing Cialis commercials.

Posted by Will in Seattle | April 30, 2008 11:08 PM
33

We need more research into controlled fusion. That is the only hope to save our asses in the long term, especially if we want modern civilization to continue. Otherwise, the new Dark Ages in 200 years (+/- 150). But WTF, we'll all be dead before it gets to that.

Posted by drewl | April 30, 2008 11:58 PM

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