"Drain America First"

Jeff Frankel says Republican proposals to increase oil extraction within our borders are at odds with both environmental and energy security goals:

Offshoring is a More Dubious Policy, When the Question is Oil Drilling, by Jeff Frankel: President Bush yesterday removed a long-standing executive moratorium on off-shore oil drilling..., a move also supported by presidential candidate John McCain. ... No doubt ... that it is a political stunt. A Congressional ban on offshore drilling has been in effect since 1981, so the President’s action is moot. ...

[B]oth parties are responding (unsurprisingly) to the American public’s great sensitivity to short-term prices for gasoline (in the summer) and home heating oil (in the winter). No doubt high prices are causing a lot of hardship. ...But market prices are high today for a reason. What is the market failure that would call for government intervention in the oil market?

The most obvious market failures are the externalities that characterize air pollution and emission of greenhouse gases. These of course are reasons for higher prices, not lower. ...

I realize that higher energy taxes are politically out of the question at this point. But I could imagine legislation that would automatically raise energy taxes if and when oil prices fall, thereby putting a floor at recent levels and providing industry with the clear incentive to undertake the long-term investment in energy-saving equipment and technology that we badly need. Rebate the proceeds by fixing the AMT, or removing the payroll tax on low-income Americans, one answer to the income distribution point. ...

The other obvious market failure is national security, and here we come to ... the central point of my post. While Americans need to recognize that achieving complete energy security is an impossible goal, it should indeed by a national goal to reduce our dependence on imported oil. We could thereby reduce our need to fight messy wars in the Mideast and to coddle unpalatable autocrats worldwide. But, in the first place, conservation is the largest and most sustainable component of such a strategy. In the second place, as high as world energy prices are now by historical standards, this is not the worst-case geopolitical crisis that we should be seeking to protect our economy against. That worst-case scenario is a prolonged loss of world access to Gulf oil stemming from some combination of military conflict with Iran, anti-Western popular uprisings in the region, terrorism, and/or nuclear or radiological weapons.

Once the long-term goal of “energy security” policy is properly seen to be amelioration of the economic effects of such a disaster, the Republican policy of “drain America first” is seen to be precisely the wrong response. We don’t want to maximize current domestic production. Rather we want to leave the oil underground (or underwater) for decades, until we really need it, until we are so desperate that the economic benefits really do outweigh the costs. (The costs are chiefly environmental, of course. But the Republicans have often been keen on giving oil companies access to nationally owned reserves at prices that are even below market costs. Same as hard-rock mining for miners, subsidized water for farmers, and grazing rights on federal lands for ranchers. But the hypocrisy of anti-Washington self-reliance rhetoric in the Western states is another story.)  ...

The problem with Republican proposals to re-open domestic oil drilling is ... that we might truly desperately need the oil in 20 or 30 years, and so [we] don’t want to use it up over the next decade.

And if we have the leadership to begin seriously moving forward on developing alternative energy sources and implementing conservation measures, leadership that has been missing in the current administration, perhaps the value of those reserves won't be as high as we think when 20 or 30 years have actually passed.

Comments

[Bill Jefferys]

When I was a college freshman (unable to vote, it was in 1958) I learned about the oil depletion allowance, which basically rebated to oil producers some portion of the value of what they pumped to "compensate" them for "depleting" the value of their resources. This seemed to me to terminally stupid, from all sorts of points of view.

I wrote to President Eisenhower that this was pretty dumb, and said that we ought to be depleting the Middle East first, keeping our oil for when we'd really need it. Of course, nothing happened and I didn't even get a machine-signatured courtesy reply.

Well, I was politically naive, but I was right then and I fully agree with the article. It's still right. Unfortunately, now that we've run through most of our oil and given billions in oil depletion to the Hunts, the Pickenses and the others who were racing to run through our patrimony, it's a bit too late to shut the barn door.

[kthomas]

Bill, it;s never too late.

[2slugbaits]

Frankel forgot to mention the other Republican talking point concerning domestic production and that's the crazy argument about keeping the oil dollars in this country. As though I'd rather pay $5/gal and have the profits go to rich Texans instead of paying $4/gal for Saudi oil. As usual, the GOP takes a stupid policy and wraps it in the flag.

[Steve Athearn]

This article would have benefited from a bit of research, rather than simply drawing on the common wisdom. The problem for the United States is not just vulnerability to a disastrous cut-off of Gulf oil, but the basic predicament of overwhelming dependence on an exhaustible resource. Note that Gulf oil, too, is exhaustible, that its reserves have been massively exaggerated for years (according to all reasonable evidence), that the largest supergiant fields in Saudi Arabia, Kuwait, Iraq and Iran are all in terminal decline. Is it too much to ask that Gulf oil stop being written about in the terms of the Infinite World hypothesis? Instead of cant about "complete energy security" being an impossible goal, why not tell people the simple fact that Mexico, recently our third largest source of oil imports, is on track to reach zero net oil exports within three to five years due to the exhaustion of its Cantarell field, which no amount of investment can replace. Why can's writers be expected to be familiar with the fact that four of the five major sources of U.S. oil imports have shown declining net exports for both of the last two years - as have world net oil exports as a whole? (The fifth, Canada, showed declining net oil exports only last year. Though it is officially the leading source of oil imports to the U.S., that status is misleading, since Canada imports more than half the quantity of oil it exports to the U.S.)

Claims that we can drill our way to independence are terribly misleading, and articles like the present one make some good points (including calling attention to the "Drain America First" policies which the late M. King Hubbert was also fond of calling attention to). But public awareness has been badly served by the general framework adopted by most commentators.

For an example of what I would regard as a well-informed discussion of the pros-and-cons of increased offshore drilling (even if her conclusions in favor of drilling now are still arguable, of course), see Gail Tverberg's article here:

http://europe.theoildrum.com/node/4215

[Thomas Daulton]

There was a similar article on the blog "Beat the Press" awhile back, an interesting attempt to quantify future values of oil versus the environment versus the tiny effect ANWR would have on lowering gas prices.

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=06&year=2008&base_name=oil_vs_the_environment_what_is

A commenter with a small but dangerous amount of knowledge... (not Dean Baker, the blog owner), claimed:

"We could choose to leave the oil in the ground in hopes it would be worth more later, but in practice this is not what people who own reserves that can be produced economically tend to do. If you want to leave something worth $135 today in the ground for 20 years if your discount rate is 10% it needs to be worth $908 dollars when you produce it to break even. We can look at forward prices and see that there don't tend to be large expected returns for delaying the sale of oil. At least as far out as forward curves go. As Einstein said, the power of compound interest is a bitch."

I happen to disagree, but I can't fault the math -- my main point being that oil is pretty much invaluable as the basis of life-saving medicines and plastics, so basically in my view oil of $135 or $150 is a market distortion that has persisted for a century. We will be disabused of this distortion, eventually, when the Middle East can no longer increase their output to meet the demand from population growth. (This might take another 50 years, or, other data suggest it has already happened, as your main article implies.)

Anyone else want to give this subject a further economic analysis? Has anyone really done a more serious numerical comparison of the future value of oil versus environmental damage etc. ??

[robertdfeinman]

When things that seem obvious don't get done one has to consider why. Why has there been no new energy policy for the past 20 years? Why has there been no meaningful research on alternative energy vehicles? Why has there been no development of wind or solar?

To say that it is just the influence of big oil, doesn't seem an adequate answer. Neither does saying that the Bushies are enmeshed with big oil and Saudi Arabia. Even the most craven person would not trade the destruction of their society for some extra money. Where would they spend it?

I'm not sure what the reason for inaction is, but I think that oversimplifying the causes is making us fail to examine what other factors may be at play.

I also think that all the economic projections which hinge on assumptions about growth rate and discount rate are missing the point as well. If you have no food or fuel what does it matter how much your greenbacks are worth?

Perhaps the human race in just unable to visualize real catastrophe, that seems to be the best explanation for the lack of preparedness in New Orleans. The clubs that we hit each other over the head with have gotten bigger through the centuries, but our brains don't seem to have grown to match.

[Fred]

Our brains are plenty big. It is the underlying desires, rooted in physiology, which are primitive. There is nothing rational about preparing for the future, assuming your desire system generates a high enough discount rate that today is all that really matters today. There is even nothing necessarily rational about trying to stay alive, unless you truly have a desire to stay alive, and I don't think we humans do. What we fear and seek to avoid is bodily pain. We fear death mainly because we assume (quite reasonably) that the moments leading up to death will be very painful. But for all our talk of how we fear death, our actions indicate otherwise, and it's actions that count.

[2slugbaits]

Thomas Daulton,

I believe the usual approach that economists use for solving a problem of finding the optimal rate at which an exhaustible resource (oil) should be consumed is to use something called a Hamiltonian, or Dynamic Control Theory. This is a bit geeky, but the example of a girl trying to figure out how much cake to each day provides a pretty good intuitive sense.

http://www.aueb.gr/Users/kalyvitis/Waelti2002.pdf

[Jon H]

I figure the optimal time to use our oil is when someone else is likely to invade *us* for it.

[jim]

"achieving complete energy security is an impossible goal"... no, not really, we are merely unwilling to bear the cost. If we convert immediately to solar/wind/wave/nuclear/fusion/conservation, ROW consumes the remainder of the oil resource at prices generously reduced by our abstinence. In the end, ROW adopts those very same technologies, while we are years behind in economic growth. A better solution is for the G8 and China/India/Brazil to agree on a solution that shares the burden equitably in making this necessary transition.

[cm]

robertdfeinman: To address your question about the "destruction of their (?) society", let me point you to "after me the deluge".

[Movie Guy]

There is a wealth of information available which shows the considerable expertise and effort that has been applied to reducing energy usage in the USA. To pretend that nothing has been done during the past twenty years is to demonstrate considerable political posturing or ignorance of the factual information available. Now, that is not say that much more might have been accomplished. But we are much further along that some suggest.

The list of options includes all the usual suspects, and it may take a combination of improvements and further advanced technology application to satisfy the energy needs of the United States. I am of the opinion that it will take a significant combination of Go Forward initiatives, many of which are on the table as we speak.

The United States, as a nation, will not Go Forward on major energy consumption strategy changes until such time as the immature political posturing is replaced by (1) common sense, (2) intellectual pursuit, (3) market need adjustments, (4) more education related to energy consumption and conservation, and (5) 24/7 pursuit of such changes in laboratory, prototype testing, and pilot projects prior to mass production and introduction of whatever application is to be made available.

Those who have not studied in detail the levels of energy consumption changes by end use and end use product from 1972 to present day significantly distort the facts of how far the United States has progressed.

There are many Go Forward changes in energy consumption that will be addressed. One change which will not occur, unfortunately, is shifting household and white collar business electrical energy consumption from a 110-120 volt system to a 220-240 volt system. The energy savings of that effort would be very large, but it will not happen. It is one of the biggest mistakes undertaken in developing electrical system support in the United States. Anyone who is familiar with the cost differences between 110-120 and 220-240 volt power generation for single phase use will understand my position on this matter. It is no accident that Europe and other parts of the world operation on 220 volt systems for normal consumption usage.

As the U.S. does move forward on energy improvement or substitution initiatives, it will interesting to see which groups of people oppose the individual energy proposals. Someone in econ blogland should keep a running scorecard on the dissent. And let's not be dishonest and pretend that it is always the other group that's wrong.

When is the last time you turned your computer and monitor off, and made a conscious effort to pool your computer time into a block of activity in order to save energy?

Disclaimer 1: I do not turn my computer off unless I am not using it for a few hours. It does drop its energy consumption by engaging in "standby mode" within ten minutes of non-use as does the monitor.

Disclaimer 2: I am not selling my 1970 Oldsmobile 442 convertible nor my 1967 442 4-speed hardtop. Hell will freeze over first. I do not use them as B&F (back and forth) vehicles, so chill.

[Lafayette]

The public interest was monetized

MT: And if we have the leadership to begin seriously moving forward on developing alternative energy sources and implementing conservation measures, leadership that has been missing in the current administration

That "leadership" was sold down the river in the early days of this administration when Cheney convoked his Energy Task Force, an elephant that gave birth to a mouse.

All it did was to assure Oil, Gas and Coal Industries that this administration would do NOTHING to disturb their energy market hegemonies in the US. They were calling in the campaign funding chit. Dick was more than pleased to oblige them.

For leadership nowadays, one must look to Europe, which is going foot-to-the-floor to promote renewable energy resources by means of tax rebate on their usage for individual residential purposes. Also, the onus is on conservation by means of a "bonus malus" depending upon whether a new vehicle pollutes up to or beyond a certain standard.

SUVs suffer in France, for instance, from a tax "malus" that must be paid at purchase. Smaller cars enjoy a "bonus" in the form of a tax rebate. The effect is to shift the emphasis off larger cylinder vehicles.

The most important decision is what to do about COG (coal, oil and gas) Nexus which represents the major share of usage. (See here). Both are the principal sources of CO2 emissions. The answer is supposedly sequestration, but this is a costly process.

So, instead of thinking this "renewable energy sources" problem through to national action policy decisions, we are in a muddle going nowhere.

Italy just signed on to a major overhaul campaign to reintroduce the building of nuclear generators. Germany should do the same, but is hobbled by the Loony-Left Green Lobby that convinced past German administrations to do away with nuclear energy, whether once thinking of a viable alternative. Which is one good reason why they are loony.

Everyone has an opinion in the US, but no one a bona fide workable solution that can be translated into national policy. Largely because something has got to give, and these are privileges that have accumulated for decades on behalf of corporate vested interests. That's Mission Impossible because the K-street lobby-hounds would be all over Capitol Hill.

See where decades of pandering to Business Interests get a nation? Up sh*t creek without a paddle.

The public interest was monetized.

[Greg]

So many Americans look to technology to reduce fossil fuel dependence, when the economy needs to be spacially restructured. We need to reduce the sprawl of American society. Americans need to locate closer to jobs and retail outlets. Americans need to live in tighter clusters. The former will reduce the need to travel and the latter will increase the effectiveness of public transport.

It's so low tech that it's unAmerican.

says...

We need to reduce the sprawl of American society. Americans need to locate closer to jobs

A nice idea. But how do we do it? I bought a mobile home for its location reasonably close to my first contract job in Atlanta. That lasted 6 months. Since then, most of my jobs have had what I consider a long commute, in several different directions from where I live, although they aren't particularly long by Atlanta standards. I won't commute more than a certain distance, but I also can't be too choosy. I can't control where jobs are available, and I can't afford to move every time I get a job.

[btg]

"I happen to disagree, but I can't fault the math -- my main point being that oil is pretty much invaluable as the basis of life-saving medicines and plastics, so basically in my view oil of $135 or $150 is a market distortion that has persisted for a century. We will be disabused of this distortion, eventually, when the Middle East can no longer increase their output to meet the demand from population growth. (This might take another 50 years, or, other data suggest it has already happened, as your main article implies.)"

funny, i made a similar point here 2 weeks back - see http://economistsview.typepad.com/economistsview/2008/07/expectations-an.html

the short-term interests of individual economic actors and the long term interests of the society as a whole are often in conflict, and it is up to government to ensure that the latter is given appropriate respect... or else it would be perfectly OK for people to sell miliatry secrets to the enemy in a time of war!

[Movie Guy]

U.S. ENERGY POLICY

Here it is. And, yes, "developing alternative energy sources and implementing conservation measures" are outlined in the U.S. Energy Policy and subsequent policy doctrine, and records of accomplishments are available for review (see Department links below).

U.S. National Energy Policy
and here

U.S. Energy Policy Act of 2005

U.S. Advanced Energy Initiative

(continued)
.

[Movie Guy]

U.S. ENERGY POLICY

Here it is. And, yes, "developing alternative energy sources and implementing conservation measures" are outlined in the U.S. Energy Policy and subsequent policy doctrine, and records of accomplishments are available for review (see Department links below).

U.S. National Energy Policy
and here

U.S. Energy Policy Act of 2005

U.S. Advanced Energy Initiative

(continued in the following posts)

[Movie Guy]

U.S. Department of Energy

U.S. Office of Energy Efficiency and Renewable Energy (EERE)

(continued)

[Movie Guy]

(continued)

U.S. Environmental Protection Agency

U.S Department of Agriculture - Energy

U.S. Department of Interior

.

[Movie Guy]

Some may not like the current U.S. energy policy, but acting as though nothing is on the table is simply wrong.

I doubt that many of the objecting individuals have actually read the majority of the ongoing U.S. energy policy provisions, and efforts to improve not only conservation but also improve energy efficiencies in a multitude of applications, large and small.

[Ex-Worker]

If only the environmental interests who oppose production here, were interested in maximizing the value of US oil in the ground, this would be an interesting argument.

But at least Frankel seems to realize that sooner or later, every oil deposit in the US will be tapped.

At some point, probably now, arguing against resource utilization for the benefit of coastal residents' politically correct beachview will be a losing argument.

[Jim Harrison]

Unfortunately, a great many Americans believe that the only reason we've got a liquid-fuels problem is because those damned environmentalists won't let us tap what they assume are enormous oil fields. Calling for more drilling is therefore a winning political move for the Republicans. It is a practical impossibility to teach people about the realities of the situation because that would involve explanations more than two sentences long, not to mention arithmetic. Which is why I think the Democrats should also support expanded exploitation. Matching right-wing cynicism with our own is the only moral response here. Whatever environmental damage might occur because of offshore drilling, the risk is not so great as the existential threat to the country and the world of continued Republican misrule.

[ken melvin]

Rather drilling, to support our habit, we should be using less. The problem with conservation, as has been pointed out, is, that without restrictions on usage, it allows for greater usage as evidenced by energy and water. Those who think that we can drill our way out of this aren't much different that those who think we can grow our way out of our economic woes. They are the sort to buy bridges.

[2slugbaits]

Movie Guy,

A lot of the stuff listed in your links is pretty thin gruel. Telling the public about the Energy Star program? A public relations effort to tell homeowners that turning down the thermostat will lower heating bills? Telling agency heads and departmental secretaries to propose new ways of saving energy? Forgive me if I'm underwhelmed. And where there are specifics it's usually couched in bureaucratic doublespeak that makes it sound like gutting a program is really being committed to its success. As a govt bureaucrat myself I have learned to interpret the lingo.

[Lafayette]

MG: Some may not like the current U.S. energy policy, but acting as though nothing is on the table is simply wrong.

Have you been reading this forum? We've been all over this subject.

This is what lead-head proposes as his "energy strategy": the President’s Advanced Energy Initiative provides for a 22% increase in funding for clean-energy technology research at the Department of Energy in two vital areas:

1. Changing the way we fuel our vehicles. We can improve our energy security through greater use of technologies that reduce oil use by improving efficiency, expansion of alternative fuels from homegrown biomass, and development of fuel cells that use hydrogen from domestic feedstocks.

2. Changing the way we power our homes and businesses. We can address high costs of natural gas and electricity by generating more electricity from clean coal, advanced nuclear power, and renewable resources such as solar and wind.

Biomass fuels are indeed a far better alternative than corn. Unfortunately, they require massive processing plants to obtain a fuel that pollute the atmosphere with not that much less CO2 emissions. They are, after all, carbon-based fuels. Ditto “clean coal”.

Fuel cells run on hydrogen, which must be made by processes that are, themselves, not terribly efficient.

As for nuclear power, many countries are reluctantly turning to this option, since it is the least harmful to upper atmospheric pollution.

Lead-head had the opportunity of starting to build more nuclear reactors 8 years ago when he came to office. Cheney did nothing in his Energy Task Force, at the very beginning of this administration, to undertake this initiative. In fact, he spent a lot of effort keeping the records of this task force confidential citing Executive Privilege.

All this is much too little too late. These people should be pursued for malfeasance. They denied Kyoto as flawed and did nothing thereafter to embark on a renewable energy sources policy.

The sooner these dorks are gone from the scene, the better. We are way too late with a credible Energy Policy as it is.

[Movie Guy]

2slugbaits,

I doubt that you have read every key document regarding U.S. energy conservation and efficiency efforts. I doubt that you have read most of them.

The available timeline from 1972 to present demonstrates the initiatives that the U.S. has undertaken in reducing energy demand. The drop in end product applications and system needs is substantial.

Scoffing at the Energy Star program is similarly misplaced probably because you do not know its industry applications nor the scope of the effort including the recent initiatives per agreement with Europe's energy and government sectors.

For all the chatter on the blog, I have not seen anyone post links to the existing U.S. energy policy and programs supporting some of those initiatives.

I have not seen a detailed alternative energy policy posted during the past seven years.

There is no question that the U.S. will move forward with a revised energy policy and continued goals funding through the Congress, but the usual bitching on little blogs is typical of those who haven't worked on and presented an alternative detailed blueprint.

---

Lafayette and others:

If you can critize with such ease, you can apply more effort and present an alternative energy policy for the nation. Unless, of course, you're just too lazy or not well enough informed to do so.

After all, you have the perfect European model at your fingertips.

[Patricia Shannon]

That "Says" up there is me.

[Patricia Shannon]

http://www.sciencedaily.com/releases/2008/07/080710103907.htm

Water: The Forgotten Crisis
ScienceDaily (July 14, 2008) — This year, the world and, in particular, developing countries and the poor have been hit by both food and energy crises. As a consequence, prices for many staple foods have risen by up to 100%. When we examine the causes of the food crisis, a growing population, changes in trade patterns, urbanization, dietary changes, biofuel production, and climate change and regional droughts are all responsible. Thus we have a classic increase in prices due to high demand and low supply.

However, few commentators specifically mention the declining availability of water that is needed to grow irrigated and rainfed crops. According to some, the often mooted solution to the food crisis lies in plant breeding that produces the ultimate high yielding, low water- consuming crops. While this solution is important, it will fail unless attention is paid to where the water for all food, fibre and energy crops is going to come from.
...
Current estimates indicate that we will not have enough water to feed ourselves in 25 years time, by when the current food crisis may turn into a perpetual crisis. Just as in other areas of agricultural research and development, investment in the provision and better management of water resources has declined steadily since the green revolution. I and my water science colleagues are raising a warning flag that significant investment in both R&D and water infrastructure development are needed, if dire consequences are to be avoided.

The summary of 'Water for Food, Water for Life' is available at http:// http://www.iwmi.cgiar.org/Assessment

Anybody want to take a bet on whether we address this problem before it becomes a catastrophe?

[anne]

http://www.earthpolicy.org/Updates/2008/Update72_data.htm#table11

January 19, 2006

World Irrigated Area, Total and Per Person, 1950-2003

(Million Hectares - Square Meters Per Person)

1950 94.0 371
1955 114.4 413

1960 134.7 444
1965 149.8 448

1970 167.7 453
1975 188.1 462

1980 209.3 470 * High
1985 225.2 464

1990 245.2 463
1991 248.6 462
1992 254.9 466
1993 258.1 465
1994 260.1 462

1995 263.7 461
1996 266.0 458
1997 269.8 459
1998 271.4 455
1999 274.1 453

2000 276.3 451
2001 274.9 443
2002 277.2 441
2003 277.1 436

Note: Latest available data is for 2003.

[anne]

http://www.earth-policy.org/Books/Seg/PB3ch04_ss2.htm

June 4, 2008

Falling Water Tables, Falling Harvests
By Lester R. Brown

Scores of countries are overpumping aquifers as they struggle to satisfy their growing water needs. The drilling of millions of irrigation wells has pushed water withdrawals beyond recharge rates, in effect leading to groundwater mining. The failure of governments to limit pumping to the sustainable yield of aquifers means that water tables are now falling in countries that contain more than half the world's people, including the big three grain producers—China, India, and the United States.

Most of the world's aquifers are replenishable, so that when they are depleted, the maximum rate of pumping will be automatically reduced to the rate of recharge. Fossil aquifers, however, are not replenishable. For these—including the vast U.S. Ogallala aquifer, the deep aquifer under the North China Plain, or the Saudi aquifer, for example—depletion brings pumping to an end. Farmers who lose their irrigation water have the option of returning to lower-yield dryland farming if rainfall permits. But in more arid regions, such as in the southwestern United States or the Middle East, the loss of irrigation water means the end of agriculture....

[anne]

http://www.earthpolicy.org/Updates/2008/Update70_data.htm#table4

June 27, 2007

U.S. Installed Electricity Generating Capacity by Source, 2006

(Gigawatts - Percent)

Coal 314.1 31.8%
Oil 58.3 5.9
Gas 389.8 39.4
Nuclear 100.1 10.1
Hydro 99.0 10.0
Bio 10.0 1.0
Wind 11.1 1.1
Solar 0.4 0.0
Geo 2.3 0.2

Total 988.1

Annual Growth Rate, 2000-2006

Coal -0.1%
Oil -1.0
Gas 10.0
Nuclear 0.4
Hydro 0.0
Bio -0.1
Wind 29.3
Solar 1.0
Geo -3.1

Total 3.3

Notes: Installed capacity is from electric utilities, independent power producers, commercial plants, and industrial plants. Residential installations are not included.

[anne]

http://www.earthpolicy.org/Updates/2008/Update70_data.htm#table3

June 27, 2007

U.S. Electricity Generation from Coal-fired Power Plants and Share of Total Electricity Generation, 1950-2006

(Billion Kilowatt-hours - Percent)

1950 155 334 46.3
1955 301 550 54.8

1960 403 759 53.1
1965 571 1,058 53.9

1970 704 1,535 45.9
1975 853 1,921 44.4

1980 1,162 2,290 50.7
1985 1,402 2,473 56.7
1988 1,541 2,707 56.9 * High Percent

1990 1,594 3,038 52.5
1991 1,591 3,074 51.7
1992 1,621 3,084 52.6
1993 1,690 3,197 52.9
1994 1,691 3,248 52.1

1995 1,709 3,353 51.0
1996 1,795 3,444 52.1
1997 1,845 3,492 52.8
1998 1,874 3,620 51.8
1999 1,881 3,695 50.9

2000 1,966 3,802 51.7
2001 1,904 3,737 51.0
2002 1,933 3,858 50.1
2003 1,974 3,883 50.8
2004 1,979 3,971 49.8

2005 2,013 4,055 49.6
2006 1,987 4,053 49.0

[2slugbaits]

Movie Guy,

I'm not saying that there haven't been some significant conservation efforts; what I am saying is that most of those did not come about because of some stupid government energy policy paper. In fact, most government policies have tended to encourage energy consumption. For example, helping out the poor with home heating bills is a noble and worthwhile public policy goal, but let's not kid ourselves into thinking that it somehow reduces demand for energy. Quite the opposite. But yet that was listed as one of the major "conservation" accomplishments in one of your links. To the extent that people conserve energy it's because people respond to energy prices. When the cost of energy goes up, people use less of it. When the cost goes down, people use more of it. It's really fairly simple.

If government really wants to make a difference in energy usage, then it's going to take some tough actions, not the Powerpoint friendly stuff you provided in your links. Govt is going to have to impose carbon taxes or cap-and-trade, massively fund mass transit and massively disinvest in highway construction & maintenance. And those will be the easy things.

[benamery21]

Energy conservation results either from efficiency improvements, or curtailment of demand (i.e. reduction in standard of living). We need to decrease FOSSIL energy consumption without reducing U.S. standard of living, while increasing standards of living outside the U.S. This leaves out curtailment as a long term strategy. That leaves efficiency improvements, and increased production of non-fossil energy. Some may quibble with this view in the belief that without curtailment we will not be able to achieve sufficient reductions in (insert pet externality here). I disagree:

"Efficiency improvements" is a VERY broad category. Non-fossil energy resources are vast. We can do this whenever we decide to get serious.

BTW 2slugbaits: One of the ways that the poor are helped with home heating bills is thru the Weatherization program, which certainly does reduce demand for energy.

[benamery21]

A few old energy posts here for movie guy

Ignoring GHG emissions and other externalities completely, there are compelling economic rationales for a more energy-efficient U.S. economy. Most consumers and most business owners in this country make incorrect decisions about the net value of energy efficiency investment opportunities. If energy taxes make that value more apparent and drive improved energy efficiency, they will significantly improve the economic efficiency of the country.

Posted by: benamery21 | Link to comment | July 26, 2007 at 02:32 AM

benamery21 says...
Motor fuel taxes (oil, primarily for transportation, is 40% of our BTU consumption) in this country now pay only 1/3rd of DIRECT road costs. This is not be confused with direct federal hwy costs. Further, the inflation adjusted value per mile of fuel taxes has declined by a factor of 3 from the sixties. These direct costs do not consider the costs of traffic enforcement, pollution, invasions of the Middle East (strategically important chiefly due to oil), traffic accidents, etc.

Posted by: benamery21 | Link to comment | July 26, 2007 at 02:39 AM

benamery21 says...
Banks or states should require energy efficiency retrofits as a precondition of residential mortgages. The retrofits should be required to the extent that they reduce the LTV and/or to the extent that they reduce the monthly payment (including utility payments). Federal tax credits for energy efficiency construction should be counter-cyclical stimulus to the specialty contractor segment of residential construction during the housing slump. Such measures would also lessen the depth of the slump by improving affordability of loans and stimulating refinance and home-equity loan activity.

State utility regulators should require the sensible retrofit of virtually all existing coal plants with best available control technology for pollution reduction, rather than waiting on cap and trade to reduce emissions. People are dying of respiratory ailments now.

Congress should build 100,000MW of nuclear power plants on military bases, restart the breeder reactor program, and forget Yucca Mountain.

Congress should create a new "TVA" to build 200,000MW of federally owned wind power, a national transmission grid to distribute it, and 80,000MW of pumped storage to regulate it.

Congress should permit the addition of 20,000MW of available hydropower at existing dams in the West without reopening licensing of those dam projects. Congress should exempt micro-hydro from FERC regulation or make it a rubber stamp process.

Congress should subsidize the capacity expansion of the railroads and inland waterways to the tune of ~$100B each over the next 10 years.

Congress (to avoid freight diversion should efforts be led by port authorities) should tax punitively all freight leaving seaports by road rather than rail.

Congress should create a strategic natural gas reserve (shut in domestic wells and increase storage facilities) and mandate the management of physical hedging of both petroleum and natural gas to control market price volatility.

States (California in particular) should allow construction of offshore LNG gasification facilities and pipelines onshore.

Congress should repeal the Jones Act and allow coastwise shipping by non-American freighters. Simultaneously, the Feds should substantially regulate all shippers operating in U.S. ports thru treaty with foreign governments. Should flags of convenience refuse appropriate treaty terms they would be punitively taxed at U.S. ports.

Congress should modify CAFE to operate on a gallon per mile basis rather than a mpg basis. Congress should immediately raise CAFE 20% across the board and raise it an additional 2% per year for the next 10 years. Congress should start with the baseline fleet efficiencies of existing manufacturers, requiring improvements on those baselines. Requirements would converge as time went on.

Congress should relieve all domestic auto manufacturers of retiree pension and healthcare obligations, shifting those obligations to a trust fund payed for by a national vehicle sales tax to create a level playing field for all manufacturers. This would be in some ways like the Railroad Retirement Act.

Posted by: benamery21 | Link to comment | July 26, 2007 at 03:21 AM

benamery21 says...
Continued ...

Auto insurance should be paid by a gas tax. Traffic cops, too.

All CAFO's of significant size, all landfills, all wastewater operations, and all coal mines should be required to construct methane generation facilities under the Clean Air Act.

[benamery21]

A few more for movie guy...

Creating an energy economy which allows fuel switching and where substantial production reserves exist would effectively create energy independence.

If we drove plug-in hybrids and could switch from oil to electricity at will, the Saudis would no longer control the price of oil. Any short term disruption in oil production could be met from reserves or with increased electricity consumption and increased production from shut in natural gas to fuel that electricity consumption. It isn't free, of course, but neither are Middle Eastern wars.

Posted by: benamery21 | Link to comment | July 26, 2007 at 03:39 AM

benamery21 says...
BTW, to the corn ethanol knockers. You are correct that the net energy of U.S. corn ethanol is not good. However, 2/3 of the fossil fuel energy input is process heat used in the distilling process. Net energy would jump to above 3 if they just burnt corn stovers instead of natural gas. The plants are built to burn natural gas because it is a low capital cost investment and requires no change in farming practices, and because for the 1st generation plants with gas at $2/therm it was cheaper.

Posted by: benamery21 | Link to comment | July 27, 2007 at 07:29 PM

benamery21 says...
Free Exchange misses the point of 'energy independence' -- really oil independence. The problem isn't that changes in the world market (of any good) might cause adjustments in trade or domestic production, most goods are substitutable and we expect normal market forces to hold sway. The problem is that our entire economy has a structural dependence on oil. It doesn't matter how much oil we import, what matters is whether we have a substitute available or whether we are dependent on a supply subject to non-economic disruption. If fuel switching were possible for most oil consumption, we could import ALL of our oil and still be energy independent.

Posted by: benamery21 | Link to comment | July 27, 2007 at 07:51 PM

[Movie Guy]

benamery21,

Excellent points. I missed a lot while I was away last year.

I'm on board with you. Keep moving forward.

That information should be pulled together with other ideas for a formal presentation on the Hill or other audiences as you desire.

Thank you for your posts. That's what I am interested in noting in blogland - someone who is thinking.

[Lafayette]

Ben21: This leaves out curtailment as a long term strategy.

You got this key requirement wrong from the start. Meaning, all the rest is crap.

America and Americans are energy gluttons, as historical usage data indicates -- and which is the starting point of any debate regarding energy usage. This means they must curtail (meaning abate, abbreviate, abridge, chop, clip, crop, cut, decrease, diminish, downsize, halt, lessen, lop, reduce, restrict, retrench, shorten, slash, stop, truncate) energy usage.

Which translates directly to a profound alteration of the standard-of-living, as Americans have defined it with their wasteful of energy. In fact, it is denial of this fact that has brought America to the energy crisis in which it presently finds itself. Get it?

When you are singing off the same Hymn Book, do come back and participate in this obviously fascinating discussion.

[anne]

"BTW, to the corn ethanol knockers. You are correct that the net energy of U.S. corn ethanol is not good. However, 2/3 of the fossil fuel energy input is process heat used in the distilling process. Net energy would jump to above 3 if they just burnt corn stovers instead of natural gas. The plants are built to burn natural gas because it is a low capital cost investment and requires no change in farming practices, and because for the 1st generation plants with gas at $2/therm it was cheaper."

Reference???

[anne]

http://www.earthpolicy.org/Updates/2007/Update63_data.htm#table1

January 4, 2007

Corn consumption figures were calculated with the assumption that a bushel of corn yields 2.6 gallons of ethanol for plants currently producing and 2.8 gallons of ethanol in newer plants currently under construction, per industry statistics.

[anne]

http://www.earthpolicy.org/Updates/2007/Update63_data2.htm#table5

December 13, 2006

U.S. Fuel Ethanol Use, Corn Production, 2000-2007

(Million Metric Tons - Percent)

2000 16 of 252 6.3
2001 18 of 241 7.4
2002 25 of 228 11.1
2003 30 of 256 11.6
2004 34 of 300 11.2

2005 41 of 282 14.4
2006 54 of 273 19.8
2007 81 of 336 24.1

2008 114 of 325 35.1 *

http://www.earthpolicy.org/Updates/2008/Update72_data.htm#table14

January 23, 2008

U.S. Fuel Ethanol Use, Grain Production, 2000-2007

(Million Tons - Percent)

2000 16 of 340 4.7
2001 18 of 321 5.6
2002 25 of 294 8.5
2003 30 of 345 8.7
2004 34 of 386 8.8

2005 41 of 363 11.3
2006 54 of 336 16.1
2007 81 of 414 19.6

2008 114 of 400 28.5 *

* Grain for fuel ethanol assumes 80 percent of ethanol distilleries currently under construction will be completed to draw from the 2008 harvest projection.

Note: Values are for crop years which begin in September of the calendar year.

[Patricia Shannon]

We could reduce our "standard of living" by quite a bit, and still have a very good standard of living. And we would be healthier because we would be breathing and ingesting less pollution. Also, we might be less overweight. Even little things like taking a few steps to turn off an unneeded light add up.

[benamery21]

Lafayette:
Americans WASTE energy needlessly. Stopping that waste requires an increase in efficiency, curtailment is not necessary. Standard of living could easily be raised by intelligent efficiency investments which resulted in decreased energy consumption and expenditure.

For instance, weatherizing one's residence is an investment in efficiency with a short payback period for a majority of American households and with significant positive externalities.

[benamery21]

Anne: I'm not sure what you are asking for a reference on?
The following has some good info but don't take it as holy writ.
http://www.biomasschpethanol.umn.edu/DraftChapters/index.html

Do you dispute that 2/3rds of the input energy not contained in the corn is used in the distillation process (as opposed to farm and transportation inputs)? Refer to any of the net energy literature (Pimental is the most critical).

Compare the Brazilian cane process where the refinery actually produces a net energy from the combustion of ag waste (bagasse). What powers U.S. ethanol refineries? In the vast majority of cases, grid power and natural gas. Do you dispute this? If energy balance of corn ethanol is "near 1" then reducing input energy by 2/3rds will raise net energy to 3, yes?

Where does ag waste from corn harvest go? Typically, back onto the field to promote organic matter content of the soil.
Is this necessary? It depends. Stalk harvest is typical for silage. But for grain harvest, gathering the stovers requires changes in harvesting equipment and practice. Also, if typical U.S. tillage practices are utilized then removing all of the corn stovers each harvest may deplete the soil. If conservation tillage is practiced then this is no longer an overwhelming issue.

Are there enough stovers to offset plant energy needs? Yes.

Can stovers be combusted? Absolutely. Is it as easy to do as burning natural gas? No. It requires transportation and stockpiling of fuel. It requires more plant/capital (for fuel handling, combustion, and emissions control) and more O&M. It's a lot more like burning low energy (8000BTU/lb) coal/refuse from a process standpoint. Compare staffing levels and plant complexity at a coal plant to staffing levels at a natural gas plant.

[Lafayette]

Get the nuance

benam: Do you dispute that 2/3rds of the input energy not contained in the corn is used in the distillation process (as opposed to farm and transportation inputs)?

Do you dispute the fact that ethanol based energy emits just about as much CO2 as petroleum products?

So, what is all this bother about, pray tell? Unless we address the problem of climate warming, this tempest in a teapot exchange about biofuel costs is moot.

For the moment, the controversy regarding biomass fuels revolves around "reducing" net CO2 emissions, not doing away with CO2 emissions. Get the nuance?

[benamery21]

Lafayette: Yes I do dispute that. Brazilian sugarcane ethanol emits only about 1/9 as much net CO2 as petroleum products.

[anne]

"Brazilian sugarcane ethanol emits only about 1/9 as much net CO2 as petroleum products."

Please reference.

[benamery21]

Anne: I'm not writing a research paper or making extraordinary claims. What I have written in all cases was off the top of my head. You can use google just as well as I can. I haven't claimed anything that isn't common knowledge among my geek community. Here's a link to an article referencing an IEA study showing a range of 8-10 for net energy for Brazil sugarcane ethanol:
http://biopact.com/2006/10/brazilian-ethanol-is-sustainable-and.html

[Lafayette]

BA21: Brazilian sugarcane ethanol emits only about 1/9 as much net CO2 as petroleum products.

I don't dispute this figure. I first used it in this blog 6 months ago. Where have you been?

Sugar cane fields require replanting every seven crop years. Unlike corn, which requires replanting every year. The actual processing for both into ethanol emits probably the same amount of CO2.

Sugar cane was once widely planted throughout the southern US. But, it was given up, likely, due to the heavy labor costs. If we apply new methods of mechanization, as we have for farming cereals, then I am sure we could develop a viable ethanol industry from cane sugar.

But, we still are emitting pollutants into the atmosphere using ethanol. So, aside from bringing down the costs, what advance is it as regards Global Warming?

Pray tell, do explain that to us. It would seem that you are far too fixated on cost reduction and insufficiently upon alternative non-polluting new sources of energy.

We should have embarked on a massive nuclear generation program decades ago. But, after the Three-Mile Island incident, we decided, for reasons altogether unclear, to do absolutely nothing. Which suited mightily the vested interests of the oil, coal and gas industries.

Never underestimate Vested Interests in the decision-making of National Policy in America. Never.

[benamery21]

Lafayette: Le mieux est l'ennemi du bien
If sugarcane ethanol were sufficient to provide all of our energy needs, then the net CO2 would be zero, since roughly 11% of production would go to the energy inputs. Ethanol cannot provide all of our energy needs, and I have never claimed that ethanol was a magic bullet. However, your analysis of ethanol impact is flawed, since rather than stating that it has a CO2 impact of 1/9, one could as easily describe it as producing C02 free energy in a lesser amount (89%). It is not necessary for a process to be emission free to be CO2 neutral.

BTW, I work for a company which owns nukes and am supportive, as you might have noted several times in my comments here. There were very few people as upset as I was about Palo Verde 4 being mothballed. The current cost of nuclear internalizes American public antipathy in the regulatory process, which makes it uneconomic to construct. Until that is changed I don't see nuclear making a comeback. I have suggested doing an end run on this by creating a National Defense Strategic Energy project consisting of 100,000MW of nukes constructed on 25 military bases, but it seems unlikely in the current climate.

Note that I have also been a strong proponent of wind and pumped storage, as well as of reducing solar costs to the point of cost-effectiveness. Further, I have favored imposing emission reduction requirements on existing conventional power plants, resulting in internalization of a significant portion of current externalities.

Finally, efficiency is the ultimate emission reduction strategy, and I have come out here for increased fuel taxes, increased CAFE standards, subsidies for rail freight and inland waterway infrastructure, home weatherization, solar water heating, incentivizing ground-source heat pumps, utilizing waste gases from landfills, CAFO's, wastewater, and extraction industries, intracity transit, intercity high speed rail, carpooling initiatives, etc.

[benamery21]

Lafayette:
"The actual processing for both into ethanol emits probably the same amount of CO2."

I'm pretty sure I've corrected this here before, but 2/3rds of the energy input to corn ethanol (twice as much as the total input to sugarcane ethanol) occurs in this process, while the sugarcane refinery process not only supplies its own energy but exports electricity using bagasse as fuel.

[Lafayette]

ben21: I'm pretty sure I've corrected this here before

One could care less regarding your numbers about the relative costs of either means of ethanol production. Ethanol is NO remedy to Global Warming. Biofuels are a stupid bee-in-the-bonnet of the Farm Industry looking to make a profit from subsidies.

Developing sugar cane production in the US for ethanol does not make ecological sense. Period. It's just robbing Peter to pay Paul. Besides, we can probably buy the stuff cheaper from Brazil than invest in producing it.

Biomass at the limit, but not cereal crops as a source -- they are already in shortening supply. The money would be better spent on a belated program of Nuclear Generation and renewable energy sources.

[benamery21]

I have never advocated growing sugarcane in the U.S. to produce ethanol. I have advocated U.S. agricultural aid and subsidies to the developing world (although not recently here). Nor have most of my points addressed relative costs (as distinct from carbon efficiencies). I'm not sure if you are intentionally misunderstanding me or if I really am that hard to understand. As far as cereals being in shortening supply, from a global standpoint we are not close to the limits of our arable land. We have short-run supply problems and a lack of appropriate investment/policy in agriculture and infrastructure globally. Take a look at corn crop yields in Mexico, or crop transport infrastructure in Brazil.