A High School Mixer

6/14/08 — Flag Day

As a father and a grandfather, I should have the ability to share some fatherly advice. Well, in that these are points that I am pondering one must see such advice as really an attempt to get you to ponder along with me.

Today let’s ponder the energy mix and how policy could be directed in the most efficient and cost (direct costs and indirect costs such as the environment) effective ways possible. Just as when we went to High School mixers with the hope of finding the love our lives, reality showed us that there were a lot of choices to mix with and just enjoy the dance. In energy, the analogy of monogamy is not appropriate. However, living with the ever-changing mix is.

It appears that society has come to accept that hydrocarbons are not all that bad, especially with the rude awakening that the economy will need at least 80% of its energy supply mix coming from oil, gas and coal for decades to come.

The US is the Saudi Arabia of coal. There is a great deal of available oil offshore, albeit several years away from being gasoline and heating oil. Natural gas is also very abundant off shore and on shore in sands and shales. Add to this mix unconventional resources such as oil shale and tar sands, etc., and we realize there is a lot of these nasty polluting sources of energy right here at home available to us.

Certainly new technologies, such as clean coal, enhanced recovery, new ways to identify resources underground and advances in drilling and production will help in the production of conventional energy in the leanest way possible. Now add new unconventional sources of energy and the supply side of the equation, while quite volatile, the global economy should not run up against “Peak Energy.”

The key point to remember if not ponder is that history shows that the supply mix is constantly changing in response to available resources and technological innovation.

Low Hanging Fruit
For purposes of this discussion I am showing chart 4.13 from the report. Here we see that 30% to 40% of all energy that starts out as our basic supply ends up as waste. It goes up the smoke stack, heats the roadways or the room where we leave or computers on 24/7, but it does not end up as productive work.

Some of this low hanging fruit can be harvested (note to self, is this analogy really biomass?) and turned into useful energy through more efficient technical designs. There will be real costs to technological solutions. As with all innovations, a cost/benefit analysis will tell society which concepts will be winners and which are just pie in the sky hopes. In addition society must recognize that 100% efficiency is impossible.

A large portion can be converted to energy by changes in our social use of energy. This is the cheapest form of new energy but one of must difficult sources to tap. The more efficient we get with technology, the cheaper energy becomes. It goes against human nature to use less of the least cost item. Yet, what is required here is a cultural change in how society views energy and its usage.

Indeed, minimizing waste is not limited to energy; society wastes stuff everywhere. So you can see how hard making such a change will be.

The Energizer Bunny to the Rescue

The transportation sector is not only one of the most inefficient users of energy it is also one of the primary sources of pollution and green house gases. Any solution is this sector is going to take quite a lot of time while the stock of existing autos can be replaced. This will not be cheap, but it is an area where policy incentives can help. However, a one size fits all is doomed to failure.

Here the logical approach would be to encourage the bunny to plug in for a recharge on the east and west coasts and other major metropolitan areas where day to day driving is less than 100 miles. Other segments of transportation such as rural areas outside of these cities and in the mid-west and mountain areas along with fleet shipping etc. would rely on liquid fuels for now. Government’s role in this latter case would be to
support R&D for a new and improved bunny with the capacity of 500 miles and flash recharging.

Without addressing our interstate trucking fleet and other issues in transportation, the major issue with electric transportation will be how the additional demand on power will be met in a cost effective and environmentally responsible manner.

Albert Einstein to the Rescue

This leads our discussion to nuclear. Policy makers need to concentrate, or at least not only ply lip service, on he source of energy that can fill any new electric demand from our new and improved bunny, but also replace green house gas generating sources.

With or without a side agenda of acquiring military applications, the global desire for nuclear base load electric power is real. Can the US paranoia over waste and proliferation leave this country as the sole source of coal based global warming?

Energy policy in the nuclear arena needs to support R&D addressing nuclear waste, transition technologies toward fast breeder reactors and fusion. In addition the lead-time for permitting and construction must become much more efficient. A goal of the French level of 70% nuclear base load should be quite achievable and practical ways to meet the growing demand for power and non-polluting power at that.

Every BTU is Needed

The recurring theme in many of these ponderings is that the global economy will put to economic use every BTU that can be found or made available. This is the nature of the desire to improve one’s lifestyle. It cannot be nor morally should it ever be stifled. (See Economics is a Religion.) Only when the time comes where there is an excess supply of BTUs will society be able to truly choose between “alternatives.”

Therefore the pursuit of other energy sources such as wind, solar, hydro, biomass, geothermal, wave power and biomass, etc. will help feed the global economy’s appetite for energy. For the foreseeable future there is no bad BTU, only some forms that are more desirable if available. The key here is availability. I do not think the society will accept a policy that curtails its access to energy and costs it its ability for economic

That being said, policy makers need to be proactive in energy, and, therefore, economic growth. The go hand in hand and do not have to compromise the environment.

Can you live with this energy mix, its evolution and its consequences? If you buy into the idea that the global economy will put to uses every BTU it can find, I think we will have to. So what can we do to at least make this energy mix with its implied environmental costs as efficient and affordable as possible?

Click here for more information about Confessions of an Energy Price Forecaster: A 12 Step Program to Enlightenment

Click here for John Tobin's full bio


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