Fueling A Good Energy Policy

There is a clear need to reverse the course of our dependence on foreign oil imports.  In 1970, before the "Oil Embargo", the U.S. imported less than a quarter of our domestic use.  Today, that number is up to 65% and climbing.  We were at one time the world's largest oil producer at something like 20MM barrels of oil per day falling now to less than 5MM.  Oil rich states like Alaska and Texas are leading the decline.

Lets face it, we are at the mercy of a number of unfriendly countries such as Venezuela, as well as some in the Middle East.  Meanwhile, it appears the we have passed the point of world peak oil production in the last couple of years.  Oil is continuously harder to find and more expensive.  Offshore oil fields are being found, but MILES under water, making the cost of extracting it quite high and taking many years to get started. This is not the world in which Jed Clampett shot a gun and accidentally found a gusher!

We can't solve the problem overnight, but we CAN solve it if we commit to an intermediate to long term patchwork of programs that will bridge us into the future. 

Boone Pickens put forth a pretty good plan prior to the 2008 elections which had several excellent and well documented elements.  One was an increase in Wind Power, especially in the Great Plains which tend to produce the most amount of wind.  The cost of using Wind Power has fallen precipitously and estimates are that a KWH of wind could be produced at an all-in cost of only 4-5 cents.  Several countries in Europe, namely Denmark, (19%) and Germany(11%), provide wind to great benefit and doubling output every 3 years.  Our wind power, while growing exponentially, is still at about 1% of power usage. This is not part of the Obama Plan.


Another one of Picken's suggestions is the conversion of cars and larger vehicles to Compressed Natural Gas, a resource less depleted here.  The technology already exists and CNG is much cheaper than gasoline. According to the EPA, the Honda Civic GX is the cheapest internal combustion engine today.

He also suggests more use of Solar Power, especially in the corridor from Texas to California. Solar technology is becoming quite advanced and the price of panels has dropped nearly 40% in the last year alone! Unfortunately, while used to some extent by most countries, in the United States, it currently only provides less than one percent of our current power needs.

Pickens does not favor Nuclear although he doesn't say why not. If its due to safety, studies have shown that the mortality, or number of people killed,  of nuclear is far less than most believe.  It's  about 1% of the death rate associated with coal-powered plants and much cleaner.  France uses nuclear for 76% of it's electric power and there are a number of countries that provide more than 50% of their power usage from this source.  America, by comparison, provides just under 20% from nuclear.  The Obama plan, on the other hand, DOES promote nuclear and I hope that they do not get deterred by misguided environmentalists who have steadfastly stood in the way of any advancements in this arena for years.

Hybrid and electric cars are much less profitable than is believed.  Estimates are that the Prius, the most advanced of any hybrid, are smaller than on an Acura or Corolla.  Prices of the Prius are scheduled to rise next year and technology has continued to improve so it  IS viable and will continue to become more so.  The much ballyhooed Ford Volt, scheduled for 2011, is NOT expected to be anywhere near profitable, despite the company's claims that it will be their savior. The fact is that hybrids and electric cars need to go through many years of technological upgrades before the additional cost outweighs the benefits.  Toyota is light years ahead of Ford.

Finally, there is the Oil Shale debate.  Proponents claim that TRILLIONS of barrels of Oil Shale sit in the U.S alone and they're right. But I don't see it as a solution that can make much of a dent in the short or even intermediate term.  Shale oil is vastly dissimilar to crude oil thus requiring a retooling of refineries or other chemical modifications to make it similar to crude oil. It is heavily capital intensive and environmentally messy requiring in many cases a HUGE pit. But perhaps the biggest issue is that it requires massive use of water, a resource that is becoming more scarce and the water once used will need to be repurified in some manner.  Under current technology, it takes 3 barrels of water, itself a scarce resource, to produce one barrel of oil. To be fair, about 5 countries are exploiting shale already, China being the largest.

However, according to the Rand Corporation it will take 20 years to produce a mere 1MM barrels a day.
Therefore, it's still one for the labs and technology and not likely to put a huge dent in our "Energy Gap" anytime soon.

Finally, we should all take every step we can to conserve through methods like insulation  and more efficient use. That can be implemented immediately, and it is indisputably critical.

There are many more facets to this subject.  However, for the sake of brevity, I'll cover them in another essay down the road.

As always comments pro and con are always welcomed.

Marko's Take