American Elephants

Everything Old is New Again, Or Maybe Not! by The Elephant's Child
March 22, 2011, 10:36 pm
Filed under: Capitalism, Domestic Policy, Energy, Freedom, Statism | Tags: , ,

What we want is power. The more power we have, the quicker the work gets done. Robert Bryce points out in his book Power Hungry, that “we don’t care what energy is. We want what energy does. We would gladly fill our fuel tanks with jelly beans, marbles, or Hostess Twinkies if they could deliver the power needed to propel our Camrys and Suburbans to places like Wasilla or Waxahachie. We aren’t after energy, we are after what energy provides.”

Since September 11, 2001, we have been inundated with claims that we must radically change our energy, and we must do so immediately!  We must conserve!  All of our accustomed appliances must be changed to something more efficient. Efficiency is the new key. Out with the old toilets, buy new low flush ones, Out with the old showerheads, you must have one that delivers less water. Out with the old light bulbs,you need new ones that give poorer light, that will result in more money for GE. Out with the efficient old washing machine, you must buy new front-loading ones that do not get your clothes clean, and are twice as expensive because they are approved by Congress. And get rid of your old car and buy a new, electric-powered $42,000 Volt, we give subsidies to suckers.

We must  abandon all our existing systems of energy and switch to new versions of the oldest and most historical methods of generating power instead. What matters is that the new versions of primitive power can be called “clean” and “green.”  This matters because the old efficient sources of energy are “black” and “dirty.” Moving to clean and green things in a hurried transition is important because:

  • The United States should be “energy independent.” This will free us from the problems of the world energy market and increase employment here at home.
  • We cannot rely on oil from the Middle East—the Arab nations are not our friends—and recent events have the region in an uproar.
  • Cutting oil use will reduce terrorism. The funds we pay for Middle Eastern petroleum end  up in the hands of terrorists.
  • Hydrocarbons are bad. Their use produces carbon dioxide which causes global warming and is known as a pollutant. If we don’t kick our hydrocarbon “addiction” disastrous climate change will result.
  • We must overcome our “addiction” because we are running out of oil. The world will soon reach or probably has already passed it’s ability to produce increasing amounts of petroleum. “Peak oil” will produce a global economic meltdown because we have no substitutes.

You have probably heard all of these claims.  They seem plausible, but they are all myths. We live in an increasingly interdependent world. Oil is a global commodity.  Our two largest sources of “foreign” oil are our next door neighbors: Canada and Mexico.  The United States is one of the world’s leading exporters of oil, mostly refined into gasoline.  We have some of the world’s best refineries.  During the first six months of 2009, the U.S. exported an average of 1.9 million barrels of oil per day. In today’s world there is no such thing as “energy independence.”

There is no evidence that using less oil will somehow result in a lessening of the tactics of terror. Some oil producing states have ties to terrorism, but  they cannot be isolated from the global oil market. Europeans were feeling pressure because so much of their natural gas came from Russia, but new discoveries indicate that Europe has as much natural gas in shale formations as the U.S. does, and American techniques allow them to get it.

No matter how much the EPA wants to claim that carbon dioxide is a “pollutant,” it doesn’t pass the breath test. It remains what we breathe out with every breath. We are carbon-based life forms. Carbon is one of the building blocks of life, and were we to eliminate all carbon we would eliminate life.

“Peak oil” sounds scary, but the idea that we are or will run out ignores the fundamentals of the marketplace. Prices and technology combine to unlock hydrocarbons that were thought to be unreachable. On September 11, Repol announced a huge natural gas discovery in a water depth of 200 feet in Venezuela that may contain 8 trillion cubic feet of natural gas.  Anadarko Petroleum announced the Venus find offshore Sierra Leone, and the company believes much more may be found along the coast of West Africa.  Petrobras announced another major offshore discovery in Brazil. Israel has announced offshore natural gas discoveries.  Both America and Europe have announced major shale oil finds. Don’t bet against Julian Simon. (scroll down to ‘wagers’).

So all the demands for “efficiency,” for instantly adopting the old ways of energy production, for changing our sources of energy, for buying new appliances, for spending millions on a light rail program that doesn’t meet any cost-benefit test, don’t seem to make much sense. Efficiency produced by manufacturers to improve their product is one thing. Efficiency produced by regulations from Barbara Boxer’s Energy
Committee or the EPA are something else entirely. Top-loading washing machines do not even get clothes clean. All of this and all of the haste arise from the mistaken belief that CO2 in the atmosphere, produced by the way ordinary people live, is causing a disastrous warming of the climate.  It’s not.


Obama’s Energy Policy, Or the Lack of One. by The Elephant's Child

This last weekend, Energy Secretary Steven Chu appeared on Fox News Sunday.  Host Chris Wallace asked him about his expressed desire in 2008 that Americans be forced to pay more at the pump in order to wean them off gasoline. In the past Chu  has attempted to sidestep his previous comments, but this time he did not.  He embraced the strategy saying that his focus is to ease the pain of his energy policies by forcing automakers to make more fuel-efficient automobiles:

[W]hat I’m doing since I became Secretary of Energy has been quite clear.  What I have been doing is developing methods to take the pain out of high gas prices. We have been very focused in the Department of Energy on that.  And, in fact, the entire administration has been very focused on that.

So, the increasing of the mileage standards is one way of doing this.  A very concerted effort in electric vehicles, where we think within reach, within maybe four or five years, we could be testing batteries that can allow us to go 200, 300 miles on a single charge in a mass-marketed car.

The recent spike in gasoline prices following that huge spike in 2007,2008 is a reminder to Americans that the price of gasoline over the long haul should be expected to go up just because of supply and demand issues.  And so we should see the buying habits of Americans as they make choices for the next car they buy.

Secretary Chu suggests the energy policy of the US should be focused on more expensive vehicles that get better mileage. This is not an energy policy.  Sell your car and buy an expensive new one, while your government cuts off domestic supply to make gas more expensive.  This is a policy—long discredited everywhere it has been tried—called “Central Planning.” Master Resource has questions:

  1. For all the claimed deep energy expertise in the department and in our national laboratories, how come there are so little results from the approximately $150 billion poured into “energy R&D” since 2009?
  2. Are the assumptions that more spending will overcome technology hurdles and economies of scale will make the cost competitive in the commercial market really justified?
  3. Has an energy technology promoted by DOE ever made it into unsubsidized commercial application?
  4. How many technologies have been picked as “winners” by DOE or Congress, only to be proved higher in cost, lower in value, technically impractical, or environmentally unacceptable?

The correct answers are Um, No, No, and Quite a few.

Meanwhile the administration is encouraging Brazil to drill offshore in the deep waters of the Gulf of Mexico. [But we? I thought? ] The White House is making a deal with Brazil for the oil it  not allowing companies to produce here.  As the head of the American Petroleum Industry says: “The administration’s energy policy will add jobs for Brazil.” This makes sense because they don’t have an unemployment problem?

While we leave U.S. oil and jobs in the ground, our traveling president tells a South American neighbor that we will help them develop their offshore resources so that we can someday import their oil.   Go figure.

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