Climate change and energy policy

Commentary

There is universal recognition that both conservation of fossil fuel resources and development of alternative energy sources will be critical in solving an incipient world energy crisis. These same policies are also recommended to curb alleged human-caused global warming.

So, although there is controversy about what effects these actions might have on global climate, there is little reasonable argument against implementing some of the advocated measures. But, unfortunately, there are zealots whose agenda is to throw the baby out with the bathwater, and immediately do away with all fossil fuel energy, no matter what the consequences.

Hypothetical statement from The Natural Resources Defense Council: The barbaric tradition of burning fossil fuels for energy, and resulting emissions of greenhouse gases must be immediately terminated to bring planet Earth back from the brink of climate disaster!

This is in large part what the whole global warming campaign is about for environmental groups, which despise any activities that cause disturbance of the Earth, with the exception of their own, and which particularly hate extractive natural resource industries.

This crusade reminds me very much of the Spotted Owl campaign a few years back, which was successful in stopping logging in much of the western U.S. In the end, the slam-dunk, “consensus” science was proven to be false, but there were no apologies to the regions where the economy was ruined. As the cause was sacrosanct, the end was worth any means. From this philosophy has risen a new slogan foisted upon us by the media, the “curse of natural resources.”

There are many things very wrong with energy policies throughout the world, but the biggest issue is to face reality. We might fantasize about energy nirvana (fossil fuels being replaced by hydrogen, wind, solar and other alternatives), but in reality, under the most optimistic scenarios we are not even close to achieving this goal, and might not be for decades, or longer. While constantly increasing the use of alternatives, and while diligently trying to develop new technologies, the world must recognize that we will be very dependent on fossil fuels for the foreseeable future, and act accordingly.

Let’s recognize some truths about fossil fuels. While these resources are not infinite, they are certainly abundant, and the world is not in danger of running out of them any time soon. Gasoline or diesel produced from petroleum are, by far, the most efficient fuels yet developed to propel motor vehicles. Coal, which occurs in great abundance, is used to generate a large portion of the world’s electricity. Natural gas, which is also plentiful, is a most versatile fuel. It can efficiently propel vehicles, provide heat and cooling for buildings, and be used to generate electricity. When it comes to pollution, all fossil fuels are not equal. Burning of coal produces the greatest emissions, while natural gas produces the least (about one third of coal emissions).

As we all know, with a rapidly developing world economy, there is increasing demand and competition for all energy resources, so it is imperative that countries that have abundant supplies produce them efficiently and responsibly, and trade them freely. But herein lies the rub. There are very few hydrocarbon-rich countries that do produce both efficiently and responsibly.

People can think what they want to about the “villainous” Exxon-Mobil, but I will tell you that if the world’s oil and gas industry had the capability to produce hydrocarbons as efficiently and responsibly as Exxon does, our problems would be greatly diminished.

Unfortunately, though, we are witnessing a regression toward state-controlled corporations taking over in countries such as Venezuela and Russia, in a world where government entities already prevail in large producing nations like Saudi Arabia, Iran and Mexico. These companies, often laden with political cronies, tend to be extremely inefficient, as is exemplified by Mexican national company, Pemex, which produces only a fraction of its potential, and that with substandard environmental controls.

Moreover, there is the ever-present threat of war in the Middle East, or regimes in places like Iran, Russia and Venezuela, which might use oil and gas to wage economic war, or instability in places like Nigeria, all of which can exacerbate an already bad situation. Fortunately, there are a few bright spots. Petrobras, the Brazilian national oil company is reasonably efficient, and Canada makes a mockery of the “curse of natural resources” as it sets an example for efficient and responsible private industry natural resource development, much to the benefit of Canadians and the world.

When it comes to bad energy policy, many nations can be cited, but none deserve it more than America, which, per capita, is the world’s largest energy consumer. America, along with Canada, leads the world in fossil fuel production and remediation technology, and the U.S. has large oil and natural gas resources. But by unnecessarily importing ever-increasing amounts of oil, gas and refined gasoline rather than producing more of these commodities from its abundant domestic sources, it weakens itself and fails to live up to its responsibility to world energy security.

U.S. energy policy

This policy, which has been in effect for decades, is predicated on erroneous assumptions. The first is that American fossil fuel resources are too trivial to affect U.S. demand. The second is that by not developing domestic fossil fuels, America is saving the environment. And the third is that available alternative sources can now supplant fossil fuels.

It appears that the Democratic Party philosophy, almost to the point of being a platform principle, opposes almost all new domestic oil drilling. They seem to believe that oil conservation and development of currently not viable alternatives, despite constantly increasing oil demand, will negate the need for the U.S. to ever increase domestic oil production. They have no apparent natural gas strategy at all except to oppose drilling for it in any regions where large new deposits might be discovered. It’s almost like someone telling you that production of your meat and potatoes is too environmentally unfriendly, and the stuff is not so good for you anyway — so let’s stop producing it. Just wait for the alternative foods we are designing, which might be available in 40 years or so, at what cost we’re not certain. As for the Republicans, they talk about developing domestic resources, but don’t have the courage to push the issue.

President George W. Bush has been particularly weak on this point. While advocating drilling of the huge oil/gas field under a small part of the Arctic National Wildlife Refuge, even with Congress under Republican control, he failed to push against the opposing political tide.

Then, before the 2004 election, for political expedience, he and then-Governor Jeb Bush blocked development of major gas reserves off the Florida coast. This was a betrayal, too, and constitutes a serious threat to the U.S. economy. Now, anyone who opposes drilling anywhere under the U.S. offshore can say if the president decreed no drilling off Florida, why should we do it here?

These policies lead to absurdities that would be comical if they weren’t so harmful. Just consider the moratoria on offshore drilling.

Poor Boston Mayor Thomas Menino faces the ultimate terror threat — giant tankers laden with liquefied natural gas (LNG) coming right through a densely populated area of Boston to Everett, where the LNG is re-formed into gas. The budget-busting solution to this problem of dismantling the plant and building it on an isolated offshore island would appear to be sensible, but there is a more fundamental issue. Why import the gas in the first place? There is a good geological probability of large natural gas deposits located under the East Coast continental shelf, which, if put into production, c
ould likely provide, at a lower cost, self sufficiency to this heavily populated region, with much less potential hazard than created by the LNG tankers. But while Mayor Menino bemoans the dangers, Massachusetts congressmen have for years blocked government geological surveys that could determine how much gas is out there. It would be environmentally incorrect, and if people knew what’s really out there, they might demand production.

Then there is California. To combat global warming, Governor Arnold Schwarzenegger intends to prevent California from using electricity derived from any new coal-fired plants anywhere. Nuclear would be a good substitute for coal, but Californians are against that. So the only realistic present alternative is to build cleaner-burning natural gas plants. And where will all of the natural gas come from? California has huge offshore natural gas deposits, but, to preserve the environment, Californians refuse to develop these resources. Rather, they want to import LNG from other Pacific nations. But no one wants a LNG regasification plant anywhere near California, so they propose to put this in Mexico and bring it up by pipeline. But then no one wants pipelines in California, etc.

In Florida, it’s the same situation; massive offshore natural gas deposits, which could help move the state and much of the southeast toward energy independence, are not being developed.

The offshore drilling moratoria are driven by so-called environmentalism, but is that what it really is about? Firstly, does offshore drilling equate to environmental degradation? There is, of course, always a slight risk of accidents, but these can be remediated, and areas where offshore drilling has taken place for decades have not been harmed. If Massachusetts, California and Florida politicians were really such staunch environmentalists, maybe they should have a look at the places from which they are importing. Are offshore Canada, Trinidad, Timor, or many other continental shelf sites where imports will come from any less environmentally sensitive than U.S. locales? Of course not — but who cares about the other guys’ backyards!

And in the matter of developing alternatives to oil: There is an old American political saying: how will it play in Peoria? Well, there could never have been a better curtain raiser there than the current ethanol-from-corn boondoggle. The use of ethanol as an additive and as a substitute for gasoline is wonderful, but all ethanol is not created equally. While a gallon of ethanol derived from sugar cane produces up to 10 times the conventional energy required to produce it, the ratio for a gallon of corn ethanol is only 1.3. Beyond that, there are the problems of excessive water requirements, and the difficulty in transporting it (it must be transported by rail car or truck tanker as it does not move well through pipelines).

And, of course, there is the issue of using a critical food source for fuel, and driving up the price of food, almost like burning the wood off your house for heat.

And to make this “economic,” there is a US51-per-gallon government subsidy simultaneous with a US54-per-gallon tariff on Brazilian ethanol efficiently produced from sugarcane, which can be brought to the U.S. by tankers. Moreover, substitution of ethanol for gasoline offers little in the way of decreasing net CO2 emissions.

An objective critique of U.S. energy policy by any honest person knowledgeable about the subject would have to conclude that it is so badly flawed that it might have been designed by saboteurs who were out to destroy America’s national security and its economic system. A hypothetical UN agency created to allocate world natural resources based upon nations’ needs balanced against domestic production capabilities, would certainly stop oil and gas imports into the U.S. until the country more fully developed its own sources.

So, what steps might the U.S. take to live up to its world energy production responsibilities while lifting itself out of an impending crisis, with due consideration for the environment?

Energy strategy

Many of the common sense environmental recommendations regarding transportation should continue to be pursued, such as more efficient vehicles, mass transit in urban areas, and better urban planning. It appears that gasoline and diesel will continue to be the prime fuels for vehicles for at least several decades, but here the world will eventually hit the wall of diminishing resources. This is where innovation of substitute fuels will be most necessary.

These might be as mundane as natural gas, or as exotic as cellulosic ethanol, but whatever they are, we must avoid the corn ethanol syndrome (counting cows by counting teats and dividing by four). The nation must quickly attempt to make an objective prediction of how much petroleum it will require over the next half century vs. how much alternative fuels can be economically produced to substitute for oil.

Then, if necessary, it must open areas now closed to production. These areas, such as the Arctic National Wildlife Reserve, The National Petroleum Reserve and other numerous offshore localities, contain as much oil resources again as the current known U.S. reserves. Also, refinery capacity must be increased if required to produce the needed fuel.

Special consideration must be given to natural gas. The world will probably depend on this most environmentally friendly fossil fuel long after conventional oil deposits are depleted. If the U.S. opened up its offshore to drilling, it could be self sufficient in this commodity for many decades thereafter. And remember the climate-influencing methane clathrates discussed in part 1 of this commentary (T.N.M. Oct.8-14/07).

Worldwide, these deposits of frozen methane, which occur in Arctic areas, and in areas along the deep edges of continental shelves, contain more than twice the amount of carbon than that contained in all the known fossil fuels on Earth. One area about the size of Rhode Island, off the shore of the Carolinas is estimated to contain 1,300 trillion cubic ft. of methane. (Total present proven U.S. conventional natural gas reserves are about 210 trillion cubic ft.) There is some development research work being carried out on these resources, and if it were to be successful, the potential is enormous — it could be the mother of all alternative fuel sources.

But for the U.S., it’s the same old offshore moratoria; unless they are lifted, much of this potential can’t be touched. The U.S. already has an enormous strategic and economic problem with oil imports. It would be calamitous to extend this same dependency to natural gas.

Regarding power generation, many environmental groups would suggest that because of high CO2 emissions, coal-fired power plants should be shut down immediately. The problem is that 50% of America’s electricity is derived from these plants. If you terminated them, the immediate alternatives would be cleaner burning natural gas or nuclear, which produces no greenhouse gas emissions.

Of course, it would be economic suicide to abruptly stop coal power plants. But it is possible to slowly replace them with technically improved coal plants, or with nuclear-powered plants. If they were to be replaced by gas-powered plants, the country would have to rapidly open locked up natural gas provinces for development. About 20% of U.S. electricity is generated by nuclear plants, and in other parts of the world, like France, nuclear is the dominant power source. Generally, these plants, which are the ultimate antidote to greenhouse gas emissions, have operated with remarkable efficiency and safety.

Yet, in the U.S., the same people who oppose fossil fuel energy are against any new nuclear development. After years of battling, a relatively simple underground storage site with so many safety redundancies that the chance of an accident would be less than your being hit by a meterorite, remains unavailable.

Those who want to do away with fossil fuel energy tend to push wind and solar energy
as a panacea. They are, of course, both currently viable, but have serious limitations in becoming dominant power sources. The problem with wind is exemplified by where I live, in the Pacific Northwest. We have very large wind farms, and they are effective, but they can’t be relied upon as a primary power source, as they are only about 35% efficient. For example, during times of our peak power demand (when it is very hot or very cold), we generally don’t have much wind. So unless we can reach the technology of large-scale storage of electrons (which might be a physical impossibility), wind power must be relegated as an auxiliary source, very effective if used in conjunction with a more reliable source, like natural gas. As for solar energy, again, it is very useful providing heat and power on a relatively small scale in areas where there is plenty of sunshine, but there are difficulties, possibly solvable, in major power generation.

Large-scale storage of heat is probably more doable than storage of electrons, but the principal problem appears to be insufficient concentration of energy.

The true energy nirvana would be development of the abundant element, hydrogen, as a major energy source. One would think that this would be easy — after all, people have been extracting hydrogen by electrolysis of water forever.

But there are huge problems, not the least of which is the amount of conventional energy required to produce the hydrogen on a large scale. Currently, most of the hydrogen produced is from my favourite fossil fuel, natural gas, but if you are going to manufacture hydrogen this way, say for vehicle fuel cells, it makes more sense just to use the natural gas itself for fuel. For a real hydrogen economy to be established, the hydrogen must be produced using non-fossil fuels (solar, nuclear etc.) to provide the energy to free the hydrogen. And then there are huge transportation problems, as well as storage problems. Some day, all of this might become a reality, but for the near future, it is a fantasy.

The seriousness of the U.S. energy dilemma cannot be overestimated. When one looks at history, the collapse of many great nations and empires resulted from systematic economic failure rather than military defeat, the latest example being the Soviet Union. If the U.S. continues on its current energy policies, there is a real risk of economic breakdown. The solution to the problem is multifaceted, and will require very good planning, organization and rapid action, none of which are now evident. The continuing necessity of fossil fuels in the near future, and natural gas into the distant future will require that these resources be developed.

At the same time, research must be encouraged to develop cleaner coal technologies, and alternatives such as solar, wind and cellulosic ethanol.

Particularly in the U.S., more nuclear power should be used. And the dream of a hydrogen economy should be pursued so that it might become a future reality.

The biggest obstacle to energy production in America is a wealthy elite class that masks itself with environmentalism. It’s not just the hypocrisy of these people with their multiple 20,000-sq.-ft. mansions and private jets, but the fact that they are opposed to almost every energy development. They oppose coal power, oil, gas and nuclear, and many of them, even wind power, particularly if it is anywhere near their properties. One would think they would be in favour of solar power, but just try to put in a large solar plant in the Mojave Desert! So with this ingrained opposition to everything, except their own business developments, do you suppose that they will not protest and obstruct the ultimate — hydrogen energy — if it is ever developed? There is unfortunately no way that America can ever have an effective energy policy and mollify this influential constituency.

–The author is a geologist based in Spokane Valley, Wash. He is author of the book Mountains of Ore and Rivers of Gold, available at www.amazon.com. Part 1 of his commentary appeared in last week’s issue.