Tuesday, August 15, 2006

A call to arms

I’m going off the grid on a camping trip for a couple days but I wanted to throw something out for discussion. First of all, the United States is addicted to oil:

Petroleum products, especially motor gasoline, distillate (diesel) fuel, and jet fuel, provide virtually all of the energy consumed in the transportation sector. Transportation is the greatest single use of petroleum, accounting for an estimated 67 percent of all U.S. petroleum consumed in 2004. The industrial sector is the second largest petroleum consuming sector and accounts for about 23 percent of all petroleum consumption in the U.S. Residential/Commercial and the electric utility sectors account for the remaining 8 percent of petroleum consumption.

Demand for petroleum products in the United States averaged 19.7 million barrels per day in 2004. This represents about 3 gallons of petroleum each day for every person in the country. By comparison, petroleum demand averaged about 2 gallons per person per day in the early 1950's and nearly 3.6 gallons per person per day in 1978.
As consumption has risen, domestic production has dropped, leading to an increase in foreign oil importation:

The problem is that America's domestic petroleum production has significantly declined, from 10 million barrels a day in 1970 to about 5 million today. Our response has been increasing importation of oil, now more than 12 million barrels a day.
And where do these billions of dollars go? Right into the coffers of some of the worst regimes in the world such as Iran and Saudi Arabia who openly support Hezbollah, Hamas, and Islamic Jihad. Therefore, energy independence isn’t just a matter of economics but a factor in national security. It’s time to start thinking of energy policy as an extension of security policy and get serious.

And by serious, I don’t mean John Kerry’s amorphous call for a “Manhattan Project” for alternative energy (while blocking Cape Wind) or Hillary Clinton’s anodyne suggestion that more ethanol will solve everything. It’s time for solid action, so here’s the official Viking Pundit agenda for energy independence:

Increase the gas tax – Wow, this will be popular, but no other single action will reduce America’s oil consumption.
Open up ANWR for development – Charles Krauthammer calls ANWR the “poster child of cake-and-eat-it-too eco-petulance.” It’s time to put oil revenues in our own pocket instead of Iran’s.
End Saudi blackmailing – Saudi Arabia has agreed to keep the spigots open as long as they remain our top supplier. It’s time to steer clear of OPEC nations, consequences be damned.
Encourage tele-commuting – The Internet is here: no need to expend jet fuel and gasoline to get workers to and fro.
Develop nuclear – Hate global warming? Then let’s develop the only viable energy source that doesn’t produce carbon dioxide.
Stop the ethanol nonsense – We need an investigator unaffiliated with oil companies or environmental groups to assess whether ethanol is worth billions in federal subsidies.

But it is not clear that ethanol is a good economic or energy bargain. Producing it requires diesel fuel for tractors to plant and harvest the corn and fertilizers, and pesticides to allow it to grow, so it takes about seven barrels of oil to produce eight barrels of corn-based ethanol. But then more truck or rail fuel is required to deliver it, since there are no pipelines from corn country to urban areas, making shipping ethanol about double the cost of shipping gasoline. In the end ethanol may be a more expensive fuel. Sen. Charles Schumer (D., N.Y.) says there is no policy reason for ethanol: "If the ethanol producers and the corn growers weren't benefiting from this, we wouldn't be doing it."
Some of these initiatives will be unpopular but they have the virtue of being effective. We have got to stop pouring money into Hezbollah’s pocket through Iran. That’s all there is to it.

3 comments:

Anonymous said...

The United States is also addicted to air, water, food, housing, clothing, front yards with green lawns, swimming pools in the back, ice cream, and soda pop (just to name a few).

Let me know when you've turned off the air conditioner in the summer and heater in the winter, wash your clothes in the sink and get rid of the clothes dryer, and have turned your computer into a doorstop. Have you replaced your car with a bicycle yet?

Addicted to oil? No, we're addicted to life. Artificially raising prices through punitive taxes won't do much to make anything better. Europe does this and it hasn't helped anything.

Frankly, I'm surprised that the anti-Social Security guy is all hepped up on another tax.

As for your comment "We have got to stop pouring money into Hezbollah’s pocket through Iran," I certainly hope that for your camping trip you left your cars at home and went on bicycle. I'm not trying to be snide, just pointing out that words are cheap.

Our problem isn't our "addiction." Our problem is a political one where a vocal minority actively blocks viable options such as drilling at home and nuclear power. (The same way you're against ethanol -- I have no idea about or opinion as to the viability of ethanol, I just think it curious that you quote Charlie Rangle. Let me know when you consider his SSN opinions to be worth listening too.)

You can't solve a political problem with taxes or other punitive measures. And the solution isn't for us to cut back on camping trips or whatever other things we do to enjoy life. I agree with most of what you said, but think you're way off base on the rest of it. Anyways, I hope you read this after your camping trip and had a wonderful time. I envy you (and am happy to see that your "addiction" doesn't seem to have hampered your ability to enjoy life).

TM Lutas said...

Ethanol's fine if you make it from sugarcane instead of corn. Undo the quota system for sugar and you've got something there.

We know today how to turn coal into car fuel for $32/bbl. It's called Fischer-Tropsch (FT) and people have been working on this since WW I when scientists under the Kaiser invented the original process. We have a couple centuries worth of coal in the US. A lot of people got burned after 1979 when oil prices crashed and all the FT projects went belly up.

Hydrogen powertrains are coming. In four years we're going to have private companies (Ballard in Canada and GM in the US) able to make powertrains that run on hydrogen for the same cost as conventional internal combustion engines and providing the same range and performance. At the same time, the DOE is projecting improvements in electrolysis that will drive the current $6/gge (gallon gasoline equivalent) to below $3/gge *at the local gas station*. There's literally dozens of ways that you can get hydrogen but electrolysis is probably the least problematic and currently one of the most expensive.

Quietly, without a lot of fanfare, we've moved forward tremendously under this president and I wouldn't want to ruin the last bit by shoving everything into a government crash program when the slow and steady progress is going to solve the problem in 4-10 years without enlarging the government.

Use Google and look up the data. It's out there. Run a few calculations and spread the news. We're not doomed. We're just going to have to work pretty hard.

Anonymous said...

I work in the oil industry so I think I might be a wee bit more informed about this most important source of energy than your other commentators. The world isn't running out of oil but it is running out of cheap oil. The only easy oil left is in OPEC countries. Even if non-OPEC reserves were greater we simply don't have the skilled man-power to extract it. As an example, in Scotland we have a shortage of oil workers and that's with declining production. If we can't get more oil then we'll just have to use less. It would cost less money if Detroit produced more fuel efficient cars; European style cars would have more impact on on USA's oil imports than opening up Alaska's North Slope. And the only way to make American's use these cars would be to put up gas taxes. What about abolishing income tax and taxing people through gas instead? At least this is one tax you could choose to avoid (walk, use a bike)