Storing Wealth in Uncertain Times

Charles Hugh Smith questions the whether gold is the best way to store wealth in the coming "Great Transformation", when oil becomes very scarce. (I remember how valuable gasoline was in the movie Mad Max 2: The Road Warrior). He suggests that having a convenient supply of energy and food are the most valuable sources of wealth in very hard times. Excerpts below.

Link: Of two minds: The Great Transformation: Trends and Cycles of History.

If we understand that "money" as a store of wealth is simply stored energy, then we reach another understanding of "the problem" and thus of the "solution."

Let's say that the fragile supply chain of remaining oil breaks down in a complex interaction of positive feedback loops. Oil would not just be costly; it would be unavailable to individuals. The government would undoubtedly ration what was left for essential services like agriculture, food distribution, police and hospitals, etc.

Let's say we anticipated this and responded not by hoarding gold but by buying a 100 KWhr/day solar power array, productive land in a mild climate, a store of fertilizer and a few electric vehicles to share with our family/community. We own zero gold but we own a power supply, the means to grow food and transportation that does not require petroleum.

Now would we sell these productive assets for gold? At what price, if they were essentially irreplaceable? What would we do with our pile of gold if we can't go anywhere, can't grow food and have no power source?

The holder of gold assumes that all goods can be purchased with a means of exchange holding a tangible value, i.e. gold or an equivalent commodity. But this may not be entirely true. Yes, we will sell some of our power/energy output for gold, but we will not sell our "wealth" i.e. the power plant for gold, which may or may not be able to buy a replacement. As a store of wealth, gold is no match for a productive source of energy.

The reason is "money" as a store of wealth is simply stored energy. From this point of view, fertilizer is stored energy. You may or may not be able to exchange "money" in any form for stored energy, for "wealth" is either stored energy or the capacity to generate energy sustainably. Everything else is merely a means of exchange.

Will gold hold more value as a means of exchange than paper money? If history is any guide, yes—but that's a different "problem" than building or storing wealth.

There are many other examples of "problems" whose solutions may well completely fail to address the structural challenges we face.

Why Are We Helping Saudi Arabia Build Nukes?

Congressman Edward J. Markey, in an opinion published in the Wall Street Journal, asks why we are arming an oil and sun rich Islamic country with nuclear energy. Does Saudi Arabia really need nuclear energy? How does Israel feel about this? Are we trading nuclear secrets for an increase in oil production? Will this come back to bite us?

Link: Why Is Bush Helping Saudi Arabia Build Nukes? – WSJ.com.

Last month, while the American people were becoming the personal ATMs of the Organization of the Petroleum Exporting Countries, Secretary of State Condoleezza Rice was in Saudi Arabia signing away an even more valuable gift: nuclear technology. In a ceremony little-noticed in this country, Ms. Rice volunteered the U.S. to assist Saudi Arabia in developing nuclear reactors, training nuclear engineers, and constructing nuclear infrastructure. While oil breaks records at $130 per barrel or more, the American consumer is footing the bill for Saudi Arabia’s nuclear ambitions.

Saudi Arabia has poured money into developing its vast reserves of natural gas for domestic electricity production. It continues to invest in a national gas transportation pipeline and stepped-up exploration, building a solid foundation for domestic energy production that could meet its electricity needs for many decades. Nuclear energy, on the other hand, would require enormous investments in new infrastructure by a country with zero expertise in this complex technology.

Have Ms. Rice, Mr. Bush or Saudi leaders looked skyward? The Saudi desert is under almost constant sunshine. If Mr. Bush wanted to help his friends in Riyadh diversify their energy portfolio, he should have offered solar panels, not nuclear plants.

Saudi Arabia’s interest in nuclear technology can only be explained by the dangerous politics of the Middle East. Saudi Arabia, a champion and kingpin of the Sunni Arab world, is deeply threatened by the rise of Shiite-ruled Iran.

The two countries watch each other warily over the waters of the Persian Gulf, buying arms and waging war by proxy in Lebanon and Iraq. An Iranian nuclear weapon would radically alter the region’s balance of power, and could prove to be the match that lights the tinderbox. By signing this agreement with the U.S., Saudi Arabia is warning Iran that two can play the nuclear game.

In 2004, Vice President Dick Cheney said, "[Iran is] already sitting on an awful lot of oil and gas. No one can figure why they need nuclear, as well, to generate energy." Mr. Cheney got it right about Iran. But a potential Saudi nuclear program is just as suspicious. For a country with so much oil, gas and solar potential, importing expensive and dangerous nuclear power makes no economic sense.

The Bush administration argues that Saudi Arabia can not be compared to Iran, because Riyadh said it won’t develop uranium enrichment or spent-fuel reprocessing, the two most dangerous nuclear technologies. At a recent hearing before my Select Committee on Energy Independence and Global Warming, Secretary of Energy Samuel Bodman shrugged off concerns about potential Saudi misuse of nuclear assistance for a weapons program, saying simply: "I presume that the president has a good deal of confidence in the King and in the leadership of Saudi Arabia."

That’s not good enough. We would do well to remember that it was the U.S. who provided the original nuclear assistance to Iran under the Atoms for Peace program, before Iran’s monarch was overthrown in the 1979 Islamic Revolution. Such an uprising in Saudi Arabia today could be at least as damaging to U.S. security.

We’ve long known that America’s addiction to oil pays for the spread of extremism. If this Bush nuclear deal moves forward, Saudi Arabia’s petrodollars could flow to the dangerous expansion of nuclear technologies in the most volatile region of the world.

While the scorching Saudi Arabian sun heats sand dunes instead of powering photovoltaic panels, millions of Americans will fork over $4 a gallon without realizing that their gas tank is fueling a nascent nuclear arms race.

PS: Atanu Dey  has an explanation:

All indications are that one of these days the US will have to take action against Iran for their ambition to develop nukes. In the meanwhile, the US is putting the next country — Saudi Arabia — in the pipeline for the same old routine: sell them technology, and then go invade them and take over the oil fields under the pretext that they have WMD.

It’s quite impressive. I am not only impressed by the American strategy but also impressed by the foolishness of the countries that fall for it.

Link: Iraq now, Iran next, Saudi Arabia for later

Does your state encourage Solar Energy?

The latest Freeing the Grid report from the Network for New Energy Choices rates the states.

I live in Georgia, a backward state for energy policy.

Link: Freeing the Grid

Ga netmeeting and interconnection

Net metering is a regulatory policy that allows people to sell electricity back to the grid from their own renewable energy facilities, such as a solar array or a wind turbine, incentivizing renewable distributed energy generation projects. The Energy Policy Act of 2005 pushed utilities to adopt net metering as a policy but enforcement and program design has fallen mostly to the patchwork of state utility regulators.

Interconnection: Each state regulates the process under which a generator can connect to the distribution grid. These policies seek to keep up the stability of the grid as well as the safety of those who use and maintain it. However, if not implemented properly, these policies may pose a barrier to the development of customer-sited renewable energy and other forms of Distributed Generation (DG). Customers who seek to generate their own electricity—with a photovoltaic (PV) system or wind turbine, for example—and hook up to the grid must first go through this interconnection process. Many customers encounter unworkable interconnection requirements employed by utilities. In some cases, the interconnection process is so lengthy, arduous and/or expensive that it thwarts the development of customer-sited generators—especially in the case of smaller systems.

Scientific American’s Solar Grand Plan

Scientific American describes how the U.S. can become energy independent. Excerpts below.

In the 1970s I remember futurists predicting that every home would have a computer by the year 2000. The pessimists pointed out, with very rational arguments based on the past, that a computer in the home was a ridiculous idea.

I hope there are leaders in the U.S. who are not obligated to oil companies that can adopt a transition to solar vision. We need a new strategy.

Link: A Solar Grand Plan: Scientific American

The U.S. needs a bold plan to free itself from fossil fuels. Our analysis convinces us that a massive switch to solar power is the logical answer.

Solar energy’s potential is off the chart. The energy in sunlight striking the earth for 40 minutes is equivalent to global energy consumption for a year. The U.S. is lucky to be endowed with a vast resource; at least 250,000 square miles of land in the Southwest alone are suitable for constructing solar power plants, and that land receives more than 4,500 quadrillion British thermal units (Btu) of solar radiation a year. Converting only 2.5 percent of that radiation into electricity would match the nation’s total energy consumption in 2006.

To convert the country to solar power, huge tracts of land would have to be covered with photovoltaic panels and solar heating troughs. A direct-current (DC) transmission backbone would also have to be erected to send that energy efficiently across the nation.

The technology is ready.

US Solar Map

Graphic - Key Concepts

  • A massive switch from coal, oil, natural gas and nuclear power plants to solar power plants could supply 69 percent of the U.S.’s electricity and 35 percent of its total energy by 2050.
  • A vast area of photovoltaic cells would have to be erected in the Southwest. Excess daytime energy would be stored as compressed air in underground caverns to be tapped during nighttime hours.
  • Large solar concentrator power plants would be built as well.
  • A new direct-current power transmission backbone would deliver solar electricity across the country.
  • But $420 billion in subsidies from 2011 to 2050 would be required to fund the infrastructure and make it cost-competitive.

Applications of Solar Energy

I’m a strong advocate of the benefits of solar energy — I’m waiting for the breakthroughs (like the microprocessor/PC in computing) that will revolutionize energy production. Here’s a summary of the current state of solar energy.

Link: A Solar Technology for Every Application | Alternative Energy Stocks

Tom Konrad at Alternative Energy Stocks writes:

To understand the future of any technology, you first need to understand its applications, which will lead to an understanding of the characteristics necessary to meet them. Broadly, solar power is used to produce heat for climate control and process heat, and for electricity, both on the grid and off.

Application Table

Application Category Dominant/Best Technology Other Technologies
Daylighting Lighting Windows, Skylights Light Shelves, Active systems
Space Heating Thermal Passive Solar Design Active solar thermal, especially if also used for other applications such as water heating.
Process heat/ Water heating Thermal Active Solar Thermal flat plate or evacuated tube
Distributed generation Electric Photovoltaic technologies
Off Grid Electric Non-tracking PV with battery backup
Central Power Generation Electric Concentrating Solar Power Concentrating PV, Flat plate PV
Dispatchable Power Electric CSP with thermal storage Others w/ battery backup
Intermediate Generation Electric All technologies, should be tracking or west-facing to make production align most closely to peak load.
Base load Generation Electric CSP with thermal storage Others w/ Battery backup

Electric Generation Technology Table

Technology Best uses Strengths Weaknesses
Photovoltaic
    Flat Plate Distributed, off grid Simplicity, Scalability Cost
       Crystalline Distributed Low maintenance, high durability Cost
       Thin Film Distributed, off grid Low cost; scalability Low efficiency
    Concentrating PV Sunny areas, Central installations Low cost Higher maintenance
Concentrating Solar Power (CSP)
     Solar Trough, CLFR, Solar tower Central Generation; peaking and intermediate power; base load capable. Thermal Storage, Cost Large Scale
     Dish Stirling Sunny areas, Central installations Low cost; can be hybridized with natural gas; Scalability Higher maintenance

DISCLAIMER: The information and trades provided here are for informational purposes only

Ted Turner and Ray Lane Address Solar Energy

Katie Fehrenbacher at Earth2Tech provides some quotes from the Solar Power 2007 convention on Sep 24, 2007. Ted Turner and venture capitalist Ray Lane spoke about solar energy. Excerpts below.

Link: The Mouth Of The South Turner And Kleiner’s Lane Go Solar « Earth2Tech.

Lane … said solar “is probably the single best opportunity for entrepreneurs to invent a way out of this problem [climate change].” He also called energy opportunities “the largest economic opportunity of the 21st century.”

Not to be outdone (his speech followed Lane’s), Turner called the business opportunity of energy the greatest “in the history of humanity.” “The entire world is going to have to redo its energy regime and solar is going to be a very big part of it,” he said.

The most compelling part of the two entrepreneurs’ speeches was their pleas for the industry to move quickly to invest in companies and innovate in clean energy. “We have to move at warp speed to stop using fossil fuels,” said Turner. Lane, channeling Kleiner Perkin’s Eugene Kleiner, said, “Panic, a lot of times, does produce.” And, we might add, earn a lot of returns.

A Critique of “An Inconvenient Truth”

Global Warming Hoax (can they be objective with that name?) points out some problems with Al Gore’s movie and slide presentation, according to their set of facts. I wholeheartedly agree with one conclusion from the report — see below.

Link: Global Warming Hoax: Facts and Fictions of Al Gore’s "An Inconvenient Truth"

The only way to reduce atmospheric CO2 would be to have solar panels on the roof of every house and building, windmills in every yard and electric cars in every driveway. It is something we will have to do anyway because someday the fossil fuels will run out. Doing these things will not require the political will that Al says people need to have. People will be more than happy to convert because it will save them the ridiculous amounts of money that people spend on home utilities and gasoline.

via Chris A.

How To Get Your Home Ready For Renewable Energy

Shane Jordan at Green Options offers some sound advice for reducing energy usage. Excerpts below.

Link: How To Get Your Home Ready For Renewable Energy | Green Options.

People get so caught up in the image of “free” power from the sun or the wind, that they forget that the cheapest energy is the energy you don’t buy. For every dollar you spend on home efficiency you will take three to five dollars off the cost of your renewable energy system. It is that simple. Use less energy; buy fewer solar panels to supply that energy..

Here is a quick check list of things you should have done before you even think about installing a renewable energy system on your home. In fact, these steps will save you money even if you don’t intend to install a renewable energy system on your home.

Lighting and appliances: Make sure you are using the most efficient lighting you can. That most often means compact fluorescent and perhaps LED lighting.

Insulation and weather sealing: You want your home to be as sealed as possible against both the cold and the heat. This means weather sealing windows and doors, or even replacing them if you have the money to more insulated ones. … I recommend that you get an energy audit. Many utilities or municipalities offer then for free or for a low fee. Even if you have to pay for one, it is money well-spent.

Roofing: If properly installed, a solar system will last at least 25 years. How old is your roof? If your roof is in need of new shingles, or needs other repair, there is no point in putting a solar system on the roof that is going to need to be removed in five years to re-shingle. It is much cheaper to install the solar system while you install the new shingles, than to do the two separately

Home owner’s associations and neighbors:
Do you live in a historic district? What is your HOA’s policy on wind turbines? Before you spend your money on the solar panels, invest in a little research and neighborly friendliness. Many historic districts were made in the 70’s during the first oil crisis, and many have bylaws dealing with renewable energy prompted by that crisis. Some only apply if your home is visible from the street. Some require a permit. Research is usually a lot cheaper than fines, or having to take down the system.

Heating system: Electric heat is not the way to go. That goes for electric water heaters as well. If money was no object, I would suggest you switch to radiant floor solar thermal heating. Not only will the bathroom floor be nice and warm in the middle of winter, but your cats will love it as well. If you can’t go with radiant floor, gas heat is the second best. One thing for sure: you want to have your heating system as efficient as money and resources will allow.

Once you have tackled all of these issues, THEN you are ready to call up your handy renewable energy installer and get those super-cool solar panels. Spending a significant amount of money on home efficiency improvements will radically reduce the size (number of solar panels, size of wind turbine etc) and therefore the cost of your renewable energy system. It will also lower your monthly bills, making the payback time on your investment that much quicker.

Catch 22: Heat churns in a vicious cycle

Coal burning power plants and vehicles emit particles that increase the greenhouse effect. Air conditioners need more power to cool homes and businesses as the atmospheric heat increases. Power plants burn more coal and emit more particles. The greenhouse effect increases…. solar home

Every summer I ask why we don’t have solar cells on our roofs, producing power for air conditioning and reflecting the sunlight that heats our homes. I am told that solar cells don’t look good on a house (perceptions will change). The local power company doesn’t allow connections to its grid (why not?). The return-on-investment of solar cells isn’t viable (maybe next year). Politicians don’t get wined and dined by solar lobbyists (true). And so nothing changes.

Our electric bill will be $400 for August. A few more years and it will be $1000 or $1500. We’ll be admiring the homes with solar cells when that day arrives.

Below are some excerpts from the Atlanta Journal Constitution newspaper about the heat.

Link: POURING IT ON: Heat churns in a vicious cycle | ajc.com.

The hotter and stickier it gets, the more we stay inside. The more we’re inside, the more electricity we use blasting the A/C. The more power we consume —- added to the traffic pollution —- the more soot- and smog-forming chemicals we add to the air. And that makes for still lousier air quality and even more reason to stay indoors. We’re fouling our own nest, in effect, and it’s a vicious cycle.

WHAT’S CAUSING THE BAD AIR?

Weather: Hot temperatures, stagnant air, no rain and little wind has created dome-like atmospheric conditions that keep pollution from leaving.

Traffic: Cars and trucks are the main cause of smog and probably the biggest contributor to soot pollution.

Power plants: Coal-fired power plants are major contributors to particle pollution, or soot. To a lesser degree they also contribute to ground-level ozone, or smog.

Everything else: With the air going nowhere, even backyard barbecues, lawn mowers and weed whackers are adding to pollution saturation.

17,546: Monday’s megawatt peak in Georgia
17,160: Last year’s peak (Aug. 4, 2006)
15,924: Highest daily peak in July

WHAT’S A MEGAWATT?

A megawatt measures capacity to produce electricity in an instant of time. Megawatt hours refer to the amount of megawatts used in an hour’s time.

One megawatt is enough to power 250 homes or a Publix or Kroger.
Forty megawatts would power one SuperWal-Mart or 10,000 homes.
Four hundred megawatts is enough to power 10 Super Wal-Marts or 100,000 homes.

No hassle solar energy for your home?

It seems too good to be true, so I’m going to investigate further. But if it works the way it says, it is a no-brainer. Read the features and benefits statement below.

Update: In researching this issue, I have found a number of naysayers. Here’s a link to an example, from a competitor. http://www.energybulletin.net/26022.html

From my research, I have concluded that this is a business model that will succeed if the executive team can overcome a number of conventional obstacles. I HOPE they can succeed because we are currently funding hostile countries and polluting our air and water by using fossil fuels.

Link: Citizen REnU Service Overview

Citizen REnU program packages solar power for you in a simple and smart way. Plainly put, the Citizen Corporation pays for, installs, owns and operates the solar installation. You don’t have to worry about maintaining the equipment or any of the other concerns that come with making an investment into solar power. All you are required to do is pay for the electricity generated from these panels, at a fixed rate that is at or below your current electricity price, for up to twenty-five years. Just take a look at some of the benefits that our customers will receive:

No upfront investment, no need to become a financial expert to justify your investment.
No waiting for rebates.
No headaches with the city and the utility; let us handle the engineering, procurement, and construction.
Performance-based contract means you only pay for what is delivered. And since the solar power you generate will reduce the need for electricity from your power company, your net payment should always be equal to, or less than, what you’re paying now.
Hassle-free operating and maintenance; it’s handled by the experts.
Actual hedge against future utility price increases: you can “lock in” your rates for the electricity generated from the solar system at your home for a period of up to twenty-five years, far longer than the guaranteed rates offered by other electricity providers.

Solar Savings Calculator

Service Territory and Rates

How Solar Energy Works

Frequently Asked Questions

The Citizen Corporation is presently limited in the areas that it can offer the REnU program. Our service territory is defined by the regions that have enacted net-metering legislation. That is because we want to make sure that our customers receive the full benefits of solar power without being penalized by their local utility.

As you can see below, even with the limitations, we have a sizeable service territory. It is likely that you are even within our territory and are eligible for the REnU program. However, in the event that you fall just outside of our territory at this time – because it is growing year after year, you can still participate in making clean energy a priority.

If you do not find yourself in our service territory, please take a look at our green energy program below. There you will find out how you can help make solar power a significant player in our energy mix.

Click on the map for a list of provider for each state (pop-up window)

Click on the map to see details
State-wide net metering for all utility types
State-wide net metering for certain utility types
No metering currently available