U.S. Energy Policy: First Face Reality

The U.S. only has about 3% of the world’s oil reserves, but demands 20% of current world production.

Richard T. Stuebi at Cleantech Blog, describes some solutions for the U.S. energy dilemma. Excerpts below.

Link: Cleantech Blog: When In A Hole, Stop Digging.

We complain about high energy prices, and ask the government to do something about it. When, in fact, there’s very little the government can do about energy prices. OPEC makes it abundantly clear that we are price-takers, not price-setters.

According to analysis by the U.S. Department of Energy, opening up new areas to drilling "would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.

Dr. Gal Luft, Executive Director of the Institute for the Analysis of Global Security, recommends moving to Fuel Flexible vehicles, so OPEC would lose its stranglehold on the U.S. economy. (Fuel Flexible vehicles: Gasoline powered vehicles able to run on a limitless variety of alcohol/petroleum blends with the addition of equipment that is about $100 per vehicle.)

Dr. Luft and other luminaries (e.g., James Woolsey, Robert "Bud" McFarlane) have formed the Set America Free Coalition to promote the Open Fuel Standard Act, which would require that 50% of all vehicles sold in the U.S. in 2010 must be fuel-flexible. According to Dr. Luft, the major automakers say this is doable.

The U.S. consumes about 25% of the world’s annual oil production, implying U.S. demand levels of about 21 million barrels/day (almost 8 billion barrels per year), but holds under its territory only about 2% of the world’s proven oil reserves of 1.2 trillion barrels. In contrast, the Oil Producing and Exporting Countries (OPEC) control almost 80% of the world’s oil reserves, yet produce only about 40% of annual oil supplies.

U.S. Energy Policy: Ignoring Facts

Richard T. Stuebi, BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, has a top 10 list of energy facts.

Link: Cleantech Blog: When In A Hole, Stop Digging.

Top Ten List of Energy Facts:

1. World oil production (which is essentially equal to consumption) is at approximately 85 million barrels per day, or 31 billion barrels per year — and has essentially remained at these levels continuously since mid-2005, even though oil prices have doubled (from about $60/barrel) since then.

2. The U.S. consumes about 25% of the world’s annual oil production, implying U.S. demand levels of about 21 million barrels/day (almost 8 billion barrels per year), but holds under its territory only about 2% of the world’s proven oil reserves of 1.2 trillion barrels.

3. In contrast, the Oil Producing and Exporting Countries (OPEC) control almost 80% of the world’s oil reserves, yet produce only about 40% of annual oil supplies.

4. OPEC production was 31 million barrels/day in 1973, and 32 million barrels/day in 2007, despite the world economy having doubled in the intervening years.

5. OPEC includes among its members the following countries that are unstable, corrupt and/or unfriendly to the U.S.: Saudi Arabia, Iraq, Iran, Venezuela, Nigeria.

6. The Middle Eastern members of OPEC represent over 75% of total OPEC capacity, of which the single largest player (without which the world oil markets would collapse) is Saudi Arabia, alone accounting for 22% of the world’s remaining proven oil reserves.

7. This year, the U.S. will send an estimated $700 billion to the Middle East to purchase oil — more than the U.S. defense budget (about $600 billion).

8. An unknown portion of these proceeds, but widely-agreed to be a significant amount, funds anti-American (and anti-women, and anti-Semitic, and anti-homosexual, and so on) sentiment — including outright terrorist activities.

9. About 99% of the energy consumed by the U.S. transportation sector derives from petroleum.

10. The vast majority of American citizens live and work in a manner requires oil-fueled transportation to maintain their basic lifestyles (commuting, shopping, etc.)

Energy: Paying Now or Paying Later

Sara Robinson at Orcinus on There Ain’t No Such Thing As A Free Lunch (TANSTAAFL):

Years ago, bars used to offer a "free lunch" as a way to draw customers. Of course, the drinks in those bars cost twice as much, so the lunches weren’t really "free" at all. Similarly, in complex systems, what looks like the cheapest solution to a problem often turns out to be the most expensive one in the long run. TANSTAAFL is a way of saying, "Don’t expect something for nothing — there’s always a hidden cost somewhere."

Fossil fuels have been a big free lunch, until we found out that there was no "away" with those, either. And now we’re going to get to spend the next 50 years trying to pay for that long lunch. There are a couple lunches that look considerably cheaper right now — biofuels and nukes among them — but anybody who thinks those are going to be free is kidding themselves, too.

Jim Jubak at MSN Money (U.S. economy’s fate in Saudi hands – MSN Money) describes the Saudi stranglehold on the U.S.:

I have bad news for anybody who thinks that this Saudi control over the U.S. and global economies is a brief phase that will end by itself. The decision among oil producers such as Saudi Arabia to shift away from being a mere producer of crude oil to becoming a producer of value-added products made from oil — such as gasoline, fertilizer and plastics — will prolong the economic clout of these countries. Saudi Arabia will go from being the low-cost swing producer of crude oil to being the low-cost dominant producer in gasoline, fertilizer and plastics.

The only thing that changes this game — that redresses the balance between supplier economies and consumer economies — is a change in the price signals that consumer economies send in response to price increases. As long as the response to an increase in the price of oil is an increase in consumption, then oil prices will drift higher at a pace set by the self-interest of oil producers. Those of us who live in the consuming economies will just have to hope that the Saudis and other oil producers efficiently milk consuming countries’ cash-cow economies.

On the other hand, if higher prices lead to less consumption because consumers become permanently more efficient in the ways they use energy, and because consuming economies adopt lasting sources of alternative supply (and don’t abandon them at the next dip in oil prices), then consuming countries have a chance to take back some degree of control over their own economies.

Do we really need alternative sources of energy?

Do we really need to cut back on energy consumption?

You know you’re a Green-Neck when…

You get excited when you see a hybrid car.

You like the way solar panels look on the roof of a house.

You download music to your music player instead of buying the CD — because it reduces pollution and waste.

You think people who drive Hummers are stupid.

You don’t use bug spray in your home.

You’d rather plant a bush than elect one.

You feel sorry for trees when they get cut down.

You know intuitively than global warming is real and caused by pollution.

You wonder how the people who run Exxon sleep at night.

You’d rather visit a mountain waterfall than a shopping mall.

You know that trout are the "canaries in the coal mine" for water quality.

You’d like to see the OPEC countries run out of money before they run out of oil.

Your mouth doesn’t salivate when you see a deer.

You hunt bears with a camcorder.

You know Cradle To Cradle does NOT involve babies.

You tinker with the power-saving features of your computer.

You invest in green companies even when their track record doesn’t look good.

You are suspicious about Wal-Mart selling organic food.

You don’t scare a snake in your backyard even when you have a shovel in your hands.

You can’t get all the stuff to be recycled into your car when its time to haul it off.

Green-Necks Unite!!!

Copyright © 2007 The Better Information Group, Inc.

US formulating Energy Policy

The Bush administration has appointed former ExxonMobil CEO Lee Raymond and the National Petroleum Council to chart America’s energy future.

Lee Raymond, chair of the National Petroleum Council, is to provide the administration with policy recommendations for the long-term direction of the nation’s energy policy. As chair, Mr. Raymond was granted the power to handpick the study’s leadership.

Why should we care? In the 1990s, Exxon Mobil began a multi-million dollar subversive disinformation campaign to undermine the science on global warming and delay action. The company vocally opposes U.S. energy independence and presses for deeper reliance on oil-producing nations such as Saudi Arabia where the company has sunk heavy investments. Raymond denies that oil dependence is a problem, and he considers renewable energy an uneconomical investment.

Americans Understand: Oil Money Funds Terrorism

Thomas Friedman, in an opinion column in The New York Times on Oct 13, 2006 entitled The Energy Mandate, cited an Aug. 27 survey of likely voters that asked the following question:

“Which of the following would you say should be the two most important national security priorities for the administration and Congress over the next few years?”

Here are the results:

42 percent – reducing dependence on foreign oil

26 percent – combating terrorism

25 percent – the war in Iraq

21 percent – securing our ports, nuclear plants and chemical factories

21 percent – addressing dangerous countries like Iran and North Korea

12 percent – strengthening America’s military

Does this suggest that the American public understands that as long as we continue to spend billions of dollars on oil in terror-supporting countires like Saudi Arabia (the origin of most of the 9/11 hijackers), Iran, Nigeria, and Venezuela, well-funded terrorists can continue their destruction of peaceful societies?