More on Oil

There’s an article from the August issue of Forbes which paraphrases some comments from energy consultant Vinod Dar that had a quote that caught my eye:

To judge by actions, not words, the carbon-warming view hasn’t come close to persuading a political majority even in nations considered far more environmentally enlightened than China and India. Europe’s coal consumption is rising, not falling, and the Continent won’t come close to meeting the Kyoto targets for carbon reduction. Australia is selling coal to all comers.

That’s the dirty little secret that undercuts the advocates of “cap and trade” in their attempts to reduce the carbon emissions of (mostly) the developed world. The system hasn’t been effective where it’s been tried most enthusiastically. When you disaggregate the effects of exporting European heavy industry to China, “cap and trade” hasn’t done much at all.

Here’s another little snippet I found interesting:

No serious student of global politics can accept the notion that the world will soon join ranks behind Brussels, Washington and the gloomy computer and its minders. Dar is surely right when he says, “The U.S. and Japan will not tell Asia and Africa to choose poverty, disease, hunger and illiteracy over electricity.” Europe might, but nobody will listen. It won’t have moral authority until its own citizens are emitting less carbon than Bangladeshis. That won’t happen soon.

In the comments of my post yesterday on the price of oil and China’s role in pushing it up regular commenter Triumph quipped:

Dude, fossil fuels are not renewable. They will eventually run out.

The main thing we should be doing is shifting to a post-carbon economy.

Since Triumph freely intermingles satire with serious and occasionally thoughtful observations I wasn’t sure in which category this particular comment belonged. I’ll assume serious.

One of the things that bugs me about the inevitable ideological battles that develop on this subject is that, in their haste to swing brickbats at each other, both sides are missing critical points. Those who are eager for us to shift to a “post-carbon economy” are missing the sad fact that that won’t be possible for the foreseeable future.

The alternatives we have at hand for vehicle fuels are gasoline, biofuels made from food crops, and biodiesel made from waste. There just isn’t enough waste useable for producing biodiesel to made a big difference. Those who’ve gone in that direction have noted that prices are rising fast. Biofuels made from food crops wouldn’t be economically viable without the subsidies they’re receiving and the present generation of biofuels produce very little more fuel than they use in their production and, in some cases, they actually use more fuel to produce than they produce themselves. While biodiesel made from algae, cellulosic ethanol produced from switchgrass and other crops that grow on land too poor for use in growing food crops may be a solution for the future they aren’t here now and, unfortunately, may never be here. We just don’t know and subsidizing these second-generation biofuels for whatever reason just props up bad solutions, it doesn’t ensure good ones.

The problem is actually somewhat worse. We must power the current U. S. vehicle fleet and the current fleet requires gasoline. I’ve read ambitious plans to replace the existing fleet with electric vehicles (largely at federal government expense). The estimated cost of doing this is about $2 trillion. Unfortunately, even with the political will these plans won’t work.

In order to replace the total fleet over a period of ten years we’d need to produce completely electrical vehicles and their sales would need to be roughly double the current sales of hybrid vehicles every year over the period of the next ten years. We have no reason whatever to believe that production of electrical vehicles can be ramped up that fast and lots of reasons, namely the problems that all manufacturers have had producing batteries, to believe that it can’t. We’d also need to produce the additional electricity required and have a power distribution system capable of handling the additional capacity. Our current system won’t cut it.

The other side of this argument, the side that believes that all of our problems would be solved by drilling in ANWR or drilling off-shore, has a problem, too. From James Hamilton’s post to which I linked yesterday and, apparently, none of the commenters read:

But don’t forget, while you’re doing these calculations, you’ll need to meet Chinese demand for 2009, and 2010, and 2011…. Which, if you project the current trend and tried to satisfy entirely by cuts in U.S. consumption, would have us down to consuming zero barrels of oil in the United States in about 17 years.

Emphasis mine. There’s no way we’re going to escape the effects of the world price of oil and China’s influence on that price at that rate cf. my observations about the vehicle fleet above. Note, too, that China has us by the short and curlies simply by regulating the level at which they subsidize oil consumption. Their leadership, unlike ours, has the will and ability to do just that.

Just for the record my preferences are to increase domestic production, stop subsidizing ethanol production, and stop subsidizing gasoline consumption. I’m not opposed to a carbon tax. I think “cap and trade” is a lousy idea. The only way we should ameliorate the effects of rising fuel costs on the poor is by putting more money into public transportation (otherwise we’ll undo the effects of other policies we might put into place). I have no hopes that my preferences will prevail.

Meanwhile, I think we may be in for some very interesting times.

FILED UNDER: General, ,
Dave Schuler
About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging. He has contributed to OTB since November 2006 but mostly writes at his own blog, The Glittering Eye, which he started in March 2004.

Comments

  1. Triumph says:

    I can’t remember if I was being sarcastic or not–but we gotta remember that fossil fuels are not sustainable; it takes energy to get fossil fuels from the ground, refined, and distributed; there are alternatives to fossil fuel forms of energy; currently governments throughout the world subsidize fossil fuel consumption; less subsidy is made for renewable sources; our energy use is influenced by factors outside of supply.

    You are correct to point out the intransigence of fossil fuels in our current economic system. Bill McKibben talked about this 20 years ago in ”The End of Nature.”

    What we need is a multi-faceted energy policy that attempts--as its aspirational goal--to shift to post-carbon sources.  Pouring money into drilling speculation isn’t the most useful way of dealing with supply shortages.

    There are many cost-effective ways to increase efficiency, on the one hand--like reversing our federal transportation financing system, for instance. Rather than pouring money into carbon-intensive forms of mobility, less carbon-intensive methods should be privileged.

    Policy discourse that stops at ANWAR drilling or gas tax holidays is not too useful.

  2. Triumph says:

    I don’t know what happened with the font on my comment!

  3. Dave Schuler says:

    Yeah, basically my view is that we have so many subsidies on so many different things and activities that we can’t figure out what the heck effect they’re having.

    Besides the big problem (that the cost of the subsidies is de-centralized while the benefit of the subsidy is centralized which tends to mobilize a vitally interested constituency) another problem we’ve got is that every time prices rise people squawk so much that we lose the price signal.

  4. Bithead says:

    The who is subsidizing what seems an important issue that hasn’t been explored enough. As an example, Chian, who has recently dropped it’s subsidy of oil, which will of it’s very nature, lower the demand.

  5. mannning says:

    If you have ever been to Africa, or many other poor areas, you will have seen the massive use of small busses for transport to and from the cities at a price the people cay pay. There is a multi-stage network, where the first tier ends about 10 miles out, and at assembly points, other small busses take over to get the people closer to home, or the reverse. It appeared to me that there was only standup room, too! What we would call an 8-passenger vehicle is for them about 15.

    This is sort of akin to using HOV/shared rides to the max in the US, which is definitely going to increase in our future. In short, I agree that public transport will have to be greatly augmented in many ways, perhaps in medium cities by the return of electric-powered busses or trams.

    In the end, we will build more nuclear reactors to provide electrical power, and will let the biofuels slowly slide into oblivion, in my opinion. Productive land is getting scarce too, and will become exhausted without fertilizers, most of which is a byproduct of the oil industry. We need to have a truly comprehensive energy plan that is economically feasible, and not largely driven by big business alone.

    We see already in my city a great increase in the use of smaller cars, hybrids, motorbikes, scooters, and bikes themselves–which our average auto driver appears to hate with a passion. Bike lanes will come into fashion more and more. (Perhaps we should take lessons from the Dutch on how to cope with massive bike traffic.)

    I have observed, too, a somewhat startling thing here: people actually walking to work!

    I do hope that necessity will mother a cheap source of energy, real soon now!

  6. Dave Schuler says:

    The who is subsidizing what seems an important issue that hasn’t been explored enough. As an example, Chian, who has recently dropped it’s subsidy of oil, which will of it’s very nature, lower the deman

    That’s something of a constant theme for me. BTW, to put some perspective on China’s reduction of the gas subsidy (which I posted on at the time), gas still sells for under $2/gallon in China.

  7. Bithead says:

    That’s something of a constant theme for me. BTW, to put some perspective on China’s reduction of the gas subsidy (which I posted on at the time), gas still sells for under $2/gallon in China.

    Which is near on the price we could have it here, were we not insisting on every state having it’s own mandated formulation… one for winter and one for summer.

    Sorry, I fail to see the subsidy, there.

  8. anjin-san says:

    Productive land is getting scarce too, and will become exhausted without fertilizers

    If we work to reduce agribusiness and get the artificial chemicals out of the loop, this can be reversed. We now have a great deal of knowledge about sustainable farming, we just have to put it to work on a much larger scale.

  9. DL says:

    Mass transit might work in the cities,(don’t they have busses already?) but much of our society has evolved in part due to cheap gas) into semi-rural communities. It’s hard to mass transit people who have 1000 ft long driveways and make bulky purchases (that fund this economy) that only can be accomplished by private auto.

    Interesting that we’ve been sitting on the alternate fuels dream for decades now and no one seems to have created them yet. Perhaps if our scientists weren’t so busy chasing global warming propaganda for politically apportioned grant money they might have found the “Eureka” moment by now.

  10. Dave Schuler says:

    Productive land is getting scarce too

    Completely untrue. We’re losing about a million acres of prime farmland per year but it’s not due to depletion. It’s due to conversion to urban and commercial use.

    There continue to be millions of acres of prime farmland that are out of production. Although I oppose ethanol subsidies they’ve had benefits, too. Land that was out of production has been place in production and rate at which cropland was converted to other purposes has been reduced.

  11. Steve Plunk says:

    A hundred 1% solutions. Conservation, drilling for more supply to bridge the gap, non-subsidized ethanol, hybrids, flex fuel, oil shale, nuclear, wind, solar, coal. The list goes on and some things we haven’t even thought of yet.

  12. Michael says:

    The alternatives we have at hand for vehicle fuels are gasoline, biofuels made from food crops, and biodiesel made from waste.

    The problem is actually somewhat worse. We must power the current U. S. vehicle fleet and the current fleet requires gasoline.

    There is also Hydrogen, it’s actually pretty easy to convert a gasoline engine to burn Hydrogen, the difficulty is in the storage.

    Also, talk about post-Carbon is inaccurate. Carbon isn’t the problem, fossil carbon is the problem. Biofuels are all carbon-based, but they’re atmospheric-carbon based, not fossil-carbon based, so there is no net increase in atmospheric levels, and thus no net increase in global warming.

    In the end, we will build more nuclear reactors to provide electrical power, and will let the biofuels slowly slide into oblivion, in my opinion.

    In the end, yes. Biofuels will be beneficial in the near future though, so we shouldn’t abandon them just yet. Fission will also only get us so far, we need to figure out how to produce a sustained, exothermic fusion reaction.

    A hundred 1% solutions.

    If you spread the investments too thin, nobody benefits. We have a limited amount of capital we can invest in alternative solutions, and every solution has a minimum investment requirement. We shouldn’t bet the farm on just one, but we can’t bet on all of them either.

  13. Dave Schuler says:

    There is also Hydrogen, it’s actually pretty easy to convert a gasoline engine to burn Hydrogen, the difficulty is in the storage.

    I’m concerned about the scalability of hydrogen production. Right now to the best of my knowledge there are, basically, two alternatives for producing hydrogen: hydrolysis and reforming it from fossil fuels. The latter doesn’t solve the problem and I don’t know what the implications of doing the former at a large enough scale to make a difference might be (and I don’t think anybody else does, either).

  14. Michael says:

    I’m concerned about the scalability of hydrogen production. Right now to the best of my knowledge there are, basically, two alternatives for producing hydrogen: hydrolysis and reforming it from fossil fuels.

    I’m assuming you mean electrolysis, and it does solve the problem when you combine it with a renewable energy source that isn’t directly suitable for transportation, like solar.

    Mount a couple photovoltaic panels on your roof, and they’ll spend the whole day producing fuel for your car. Or, your local fueling station could do it, which would probably provide a greater profit margin than what they make off gasoline sales. You could even run it off the grid, and if you use a carbon-neutral source for the grid, you’re still getting an environmental benefit.

    Like I said, storage is the only real limiting factor in using Hydrogen for transportation.

  15. Dave Schuler says:

    Once again I see scalability as the possible sticking point. How scalable is the production of the photovoltaic panels?

  16. Michael says:

    Once again I see scalability as the possible sticking point. How scalable is the production of the photovoltaic panels?

    Well that’s kind of irrelevant to my proposal of using hydrogen as a transportation fuel. I used photovoltaic as an example, not a requirement, any source of electricity can be used, including nuclear, geothermal, hydro or wind.

  17. Steve Plunk says:

    I understand and appreciate Michael’s point. My point is to not focus so narrowly on big ideas that easily attainable yet small ideas and results are ignored.

  18. mannning says:

    So glad you read my remark that productive land is getting scarce as completely untrue. You conflated the fertilizer problem, which is real, with the land problem, which itself is very true, also on two counts: productivity decreases and its being taken out of production.

  19. mannning says:

    Here is one source that shows our land (and other resources)problem in what seems to be objective terms, and considering our population growth:

    http://dieoff.org/page55.htm

  20. mannning says:

    Here is a taste of the conclusions from the posted link:

    “Since any assessment is heavily dependent on the assumptions made by the authors, it is difficult to objectively predict the consequences of a population size of 520 million on the socio-economic structure of the United States. For instance, if future generations of American citizens are not concerned about ecological compatibility, they could decide to continue to boost agricultural yields per hectare even if they will have at that time a limited amount of arable land available (0.15 ha per capita). As a matter of fact, this is what all European countries are doing at present. Also Japan, China and Egypt, with diminishing supplies of land per capita, are degrading their soils and environments and becoming increasingly dependent for their food security on vanishing fossil energy stocks and imports.

    Perhaps it will be possible to feed 520 million U.S. citizen with 0.15 ha of arable land available per capita, but only for a short period of time since such a solution would not be sustainable because of dependency on fossil energy stock depletion and lack of ecological compatibility. Clearly, the costs of that choice would be immense in ecological and energetic terms and would represent a suicidal choice for the future of the country.

    As an alternative, it is also plausible that the option of intensifying agricultural production will simply not be there for Americans in 2050. This is a distinct possibility because fossil energy may have become too scarce and expensive, water resources at peril, and soils too seriously degraded to support the required level of agricultural production.

    In summary, 520 million Americans represent a number that does not fit with the concepts of sustainability, ecocompatibility, and long-term self-reliance. However, if the U.S. population reaches that size, nothing will be left to be done in 2050. The vital resources that enable agriculture to provide food security will be depleted and there is no way to replenish them. It is only by acting now that the United States can prevent a future disaster.”

  21. mannning says:

    “This is a distinct possibility because fossil energy may have become too scarce and expensive, water resources at peril, and soils too seriously degraded to support the required level of agricultural production.”

    Well Dave? Am I completely wrong still?