(This was initially written in 2005. It’s dated, but still accurate and every bit as important)
Judging by all the furor about the cost of gas recently, nobody remembers the Arab Oil Embargo in 1973 and 1974. The cars back then were just as big, and they got worse gas mileage than modern SUV’s. And the price of gas may have been under fifty cents per gallon, but that’s about $1.92 today. Until recently, gas was cheap on that scale.
Overnight, cars shrank. Or at least the cars people actually drove. People went from talking about upgrading from 6 cylinder to 8 cylinder cars to trading those 8 cylinder cars in on 4 cylinder vehicles. This lasted until OPEC basically disintegrated in the mid 1980’s. Gas went from $1.30 or so ($2.25 today) per gallon back down to under $1.00, and only came up slowly from there. And overnight we had SUV’s popping out of nowhere. My marketing teacher when I went back for an Accounting degree told the class how there was more and more in proven oil reserves in the world all the time as a justification for using all he wanted.
Well, this ignores several factors. The first is that, however much there is, the oil supply is finite. Our “lake” of oil is limited, and once it’s gone, it’s gone. Even if the Earth was 99 percent oil by volume, there would come a day when it was gone. Well, the Earth is not 99 percent oil by volume. That there is apparently enough for the next several decades at current rate of use in no way changes the fact that someday, it will be gone. Finally, the reason why oil is such an attractive energy source: Unlike everything else on this list, it can be hauled around from the point of production to the point of consumption in more or less portable containers and used to power stuff pretty much anywhere by equipment available to the average individual. We’re not getting away from oil completely until we’ve got something else that meets this requirement.
Furthermore, there are other, better uses to which our children may need to put petroleum. Everything from building materials on the less important end to food on the more important end, depending upon factors we cannot determine at this point. We can recycle most other petroleum products, but not petroleum we use for fuel. I drive an automobile myself, but our current behavior is like a billionaire who converts his holdings to cash and burns the cash because he can. That we can currently afford this in no way alters the fact that our descendants will likely curse us one day because of it.
Yes, There are great untapped reserves. There are reasons for this. In every case, the world price to make them economically viable is above current market price. I’ve seen estimates that range from $50 or so per barrel on some stuff (and some of these reserves are being started up now), all the way up to $120 or $130 to make them economically viable. These reserves do no good if price is below economic viability. Nobody is going to produce oil in order to sell it below the cost of pumping it out of the ground. Even if the one trillion barrels of extractable oil in the article at the start of this paragraph is true, at 73.2 million barrels per day, that work outs to only 13,600 (thirty-seven years) days of world supply at current levels of usage. But current usage is increasing. It’s likely more like twenty to twenty five years. If Colorado is only one of a dozen such fields, that may work out to 150 years supply or all told. It still says “we’re going to run out, and there may be things our decendants wished they had that oil for.”
Furthermore, there are at least two bottlenecks in the stream of oil available to us. The first is getting it out of the ground. Even if it becomes economically viable, the fact that we have one trillion barrels of oil in the ground in Colorado does not mean that we can get it all any old time we want. Nor does it guarantee that foreign oil producers will remain stable politically (Iran and Venezuela are obvious current producers who are candidates for civil war, and the former central asian soviet republics around the Caspian Sea aren’t rock steady, either). So getting it out of the ground is subject to both technological and political constraints. It’s hard to pump oil faster than it will come out, and it’s even harder to pump at all when other people are shooting at you. It looks like we’ve got a capacity of a little over 80 million barrels per day right now, and are looking to expand that to about 101 million barrels per day by 2010. But projected Demand is expected to increase sixty percent by 2020. I realize that the time frames involved are different, but this paints a clear picture of demand increasing faster than supply in a time when we appear to have a larger than normal increase in supply capacity under construction. We can’t use it when it’s sitting in the ground. Somebody’s got to get it out first. And when demand rises faster than supply, Economics 101 teaches us that the result is rising prices.
The second bottleneck we have is refining capacity. We can’t use oil in the form that it comes out of the ground in. It’s got to be refined. Despite reports of intentionally limiting refinery capacity, a large portion of the refineries we do have have either been shut down by Katrina or are in Rita’s path. I think the future isn’t quite as calamitous as the folks over at Peak Oil are predicting, but the fact remains: we’re losing a lot of capacity at a time when we’re already running at full capacity, and no new refineries have been built since 1976. Our refinery capacity has decreased while domestic and world demand have increased. Result: shortages and price increases that are only going to get worse unless and until new capacity comes on line. Which will be years if not decades down the line as everyone agrees we need new refineries, but everyone also screams that they don’t want them anywhere in their neighborhoods. By the time the EPA and the courts rule on the matters, twenty years can easily have passed before construction begins, and there will likely be further problems from those most determined to keep them from their county after that.
Look at this projection of energy demand showing a 40 percent increase in petroleum demand by 2025 (coincidentally, twenty years from now). In such a case, price is likely to increase by a lot more than 40% if demand can’t keep up with supply. Ask youself how much you’d like $6 or $8 per gallon gas – in today’s dollars. Nor are we merely talking about gas. We’re talking about electricity and other power needs as well. We’ve watched how much California businesses have suffered due to rolling blackouts a few years ago. Transfer that to the country as a whole at a scale that California has not yet experienced, and watch what happens. In two words, economic disaster. Widespread inflation and unemployment to make the late Carter years seem like a dream of paradise by comparison. And before we move away from this point, here’s one more factor to consider on top of all that: Gasoline Supplies Threatened Anew as Texas Refineries Brace
For those of you such as myself who are ecologically minded, ecological nightmare as well. Poor hungry people trying to keep warm and feed their family don’t care that the spotted owl is endangered. They’ll shoot a whole family of them for food and burn down the tree with the nest to cook it and stay warm. Try and stop them, and they will kill you, shoot law enforcement, fight the army to the death. However overwhelmed they may be, the worst that can happen is exactly what will happen if they do nothing.
Okay, nightmare projection over for now. What can we do about it?
First, we can do what it takes to get refineries built. This means everybody has to give a little, and they have to give it now. Regulatory obstacles to refinery construction are popular, as it makes the NIMBY’s happy with the politicians who write laws and agencies who write regulations. It’s past time for this to change. Everybody is an environmentalist when it comes to their own neighborhood. But the refineries cannot be built in Generic Location USA, they have to have an actual address and physical location. First, pass laws that state that states, counties, cities and even neighborhoods that permit refinery construction get things like priority use of the products of that refinery get, discounts on the products, or even property tax rebates. Make them economically attractive to the neighbors.
Nothing is going to make them ecologically attractive, I’m afraid. But there’s got to be steps taken to cut through regulations and drastically shorten the time to approve construction. If you’re one of those people such as myself whom this really bothers, consider the alternative disaster I described above. You don’t get to pretend you’re living in a perfect world. That’s the child’s approach. If you want a say, come down out of the treehouse and pick a real alternative and deal with the consequences like an adult. If there’s anything that the environmental movement should have learned by now, it’s that environmental consciousness is a rich man’s concern, and only a rich man’s concern. Put the most avid Greenpeace activist in a situation where it’s eat a spotted owl or starve, burn a bristlecone pine or freeze, and the vast majority will do it, and they would be moral in doing so.
Now I want to take a moment to compliment the oil companies. Given the regulatory and legal hurdles we have made them jump over and through, they have done nothing less than an outstanding job of keeping us supplied and at a better price than we have any reason to expect. When I hear various bozos talking about alleged oil company collusions and conspiracies and such, and I ask for evidence, it always devolves into a complaint about gas prices and calls to regulate the price. It’s exactly comparable to the circular logic of the various anti-semitic groups. Newsflash: The laws of economics have not been repealed because you’re paying more than you like for gasoline. Regulating the price is the worst thing we could possibly do. If we set the limit price above market price, it will accomplish nothing except add some federal bureaucrats to the situation. Either costs or taxes or more likely both rise by an indeterminate amount, depending upon how obnoxious the regulations are. If we set it below the market price, we get shortages. Not enough oil available for sale in the United States. And because the price is artificially low, the alternatives to oil cannot compete as well economically, and they do not develop as much as they otherwise would. Result, insufficient energy to maintain our economy and our standard of living. But the europeans, chinese, indians, and rest of the developed and developing world would thank us very much for freeing up oil for their use and keeping allegedly free US Citizens from bidding on it above a certain price. All the more for them.
It is time we took as many steps away from oil dependency as possible. The standard line about wind and solar power is nice, but both of these fall woefully short. In all of California, there are three viable windmill farms, and whereas I think they’re beautiful, most of the citizens of the areas where they’re located consider them eyesores despite lower power bills. Well, going back to above points, tough. But this is still woefully limited.
The solar constant is 1370 Watts per square meter. But this is the total energy hitting the earth, which reduces to an average of 341 Watts per meter due to the fact that it hits only half the planet and that half is a sphere, not a flat surface. But that’s what strikes the upper atmosphere; in fact thirty percent is immediately reflected, and is further reduced to about an average of 1020 Watts per square meter, which reduces by the same calculations to an average of 255 Watts per square meter theoretically available at sea level. Mind you, this is a lot of power. Put 100 square kilometers of actually producing surface and it’ll generate up to 2.55 terawatts of electricity (okay, actually the theoretical limit is between 8 and 9 Terawatts when there’s an unobscured sun in the sky). But this has environmental consequences of its own. Take that average of 2.55 terawatts of energy out of the Mohave desert or off the surface of the ocean and put it in Los Angeles and you have a recipe for both environmental and climate change. This is about the energy of two small atomic bombs per second on average, albeit without the radioactivitiy. Nobody knows what would happen.
US Energy consumption in 2004 was 99.7 Quadrillion BTUs. A BTU is 1055 Joules. If usage was constant from second to second, this computes to an average of 3.34 Terawatts, or using a population estimate of 300 Million, 11.2 Kilowatts per person average usage. For the City of San Diego with a population of 1.3 Million, that’s an average energy usage of 14 Billion Watts plus, nearly forty for the county, and 450 for the state. So at first glance, it looks like 100 square kilometers would more than serve. But that’s average usage, every second of every day, and peak usage is a different matter altogether. Just as importantly, there’s the problem of getting it from where it is to where it’s going. We just don’t have the transmission technology to handle that kind of load. Not to mention the fact that the political and environmental opposition to a refinery may be more vehement, but it’s confined to a concentrated area that can be considered more or less a mathematical point. You’ve more or less got one fight on your hands. The opposition to power lines runs along a mathematical line of width w for the full length of the transmission lines, and if any opponents anywhere win, the whole line fails, and you don’t even start to build until you’ve essentially won everywhere.
Final problem with solar: it’s not available twenty-four hours per day, it’s subject to blockage, and we don’t have any good mechanisms for storing the kind of power we would need to. Stored energy requirements for overnight at half the usual usage equals 5600 kilowatts per person, for twelve hours. The energy storage required for a million people would be 241 Tera Joules – the size of a small atomic bomb. We can’t do this currently.
So we move the solar power to orbit. Needless to say, we can’t do this yet, but we need to learn how not only to build them, but how to transmit the energy back earthside safely. This would allow us to even out the load and increase the efficiency by a factor of as much as four, as a good orbit for them should be in sunlight pretty much constantly, and with good gyros and engineering, should be able to be held face directly towards the sun all the time. How long will this take to do? If we’d started back in the seventies when we first had the toehold, we’d likely be close by now. Serious estimate: twenty to thirty years minimum to build the stuff to get it up there and then engineer the solar technology we already have to that scale and that environment. People who are middle aged now may or may not see it accomplished in their lifetimes, even at current life extension projections. Not a viable short term solution.
Nuclear power is something we should also work on. Yes, it generates radioactive waste. This is a problem. Nonetheless, once built and fueled, a nuclear plant runs for years with output variable within broad parameters. It’s cheap, it’s reliable, and there are large supplies for a long time in nice stable countries. The real problem? It takes years to fight the NIMBYs and get the permits and more years to build the plant. This will work shorter term than solar power satellites, but not in the next ten years.
Geothermal has a lot of potential, but there are engineering problems. Geothermal needs to be generated where conditions are right. The conditions require termperature gradients, and the steeper the better. This means hot rock or water or whatever close enough to the surface to be accessible, rather than many miles deep. These sorts of conditions tend to happen in areas of geological instability. This means earthquakes are a major design problem, and when you have an earthquake you’re likely to lose this part of your energy supply right when you cannot afford to.
Finally, there’s biomass. This basically generates heat from decomposing matter by a process that’s basically composting. This one draws more objections from the neighbors than almost anything else, because it smells about like you’d expect it to. Newer technologies contain the smell, but escape happens, and whereas you can just not look at anything else, you can’t ignore That Smell when it happens. Not to mention the fact that we’re trying to reduce our biomass waste.
Then there are new technologies. Stuff we don’t know how to do yet. Controlled fusion is the one of these that everybody should know about. Eventually, we’ll figure it out. But there are still breakthroughs necessary before we even know how to do it right, much less make it commercially viable. You can’t whistle up genius to order and until someone makes those breakthroughs, this isn’t going to happen. One day it’ll be cheap and practically unlimited power, but today is not that day, and we don’t know when that day will be.
I have no idea about other sources of potential power generation. I don’t think antimatter is coming any time soon, nor vacuum energy, to use common real theoretical possibilities contained in science fiction. But I do know that they won’t be developed until they are not only practical, but economically viable.
The upshot? No single technology can handle the necessary increases in the short term. Indeed, it’s not certain that all of them together can. We need to develop all of these technologies to the maximum extent practical, right now. If this means cutting a few corners, both in regards to relaxing the more extreme environmental regulations and in regards to how far NIMBY suits are allowed to go, so be it. We need to get cracking. We’ve allowed ourselves to be complacent for too long about our energy supply. The alternative is much worse than the nightmare scenario I illuminated earlier. Literally everything in our economy depends upon having enough energy. If we don’t do what is required to make enough energy available, there will be shortages, and they will get worse, because every time we have a shortage that hurts our economy, we become less able to compete with those economies which have made the choices to keep up with energy demand. We get poorer, they get richer. They can afford more energy, we can’t afford as much, and we as a nation go though cycle after cycle of this, and the energy shortages get worse with every cycle to the point where only the most critical things get any at all. No energy, we go back to horse-drawn plows to farm. No energy, we can’t get the food to market while it is fresh. We definitely can’t store it the whole year around. All of the neat chemicals the farmers rely on to increase yields? Gone. All those wonderful fresh foods we’re accustomed to eating? Available for maybe a few weeks per year. Food production also plummets. Without energy and everything it does for food production, not only does the supply get smaller, but the distribution network collapses. We here in the US are fortunate in the amount of arable and productive land we have; I think we could actually survive, and the rest of the world certainly isn’t going to be so stupid as to let this happen to them. Nonetheless, the price of food here in the US goes up by a lot, and it goes up noticeably worldwide. Those less well off tighten their belts, and the amount of hunger and starvation in the US multiplies. Now as to our research industries, biotech, computer companies, chemicals, what heavy industries we’ve got left, what happens to them? They move overseas, where the enerygy policies aren’t so stupid as to constitute a bullet to their head. These companies may or may not invite their american employees to go along. Personally, I don’t think they’ll take very many, but they might decide to be generous.
It would also kill the climate for capital investment here. Right now, the banking, securities, and insurance industries are so efficient and so computerized that they’ve helped us create more jobs than we’ve ever lost to moving them overseas. But if the manufacturing and research companies go, these lose their capital base. Drastically less money to invest, and what they’ve got is far less efficiently used because the computers and transportation dries up.
Speaking of transportation, I shouldn’t have to tell adults this, but motor vehicles vanish or become much more and more progressively expensive. Everything from commuting to shopping becomes more time consuming, more difficult, and you have fewer options because now you have to walk, or maybe take a public conveyance drawn by horses, or if you’re really lucky, a light rail. Not only are there fewer jobs than people to fill them, but the only way to get to the ones that there are is to live near them.
All of those nice medicines we’ve got now? Gone, except for the very upper crust who travel to China and India, much like well-off foreigners come here now. Our medical people emigrate, as they have no problem convincing other countries that they will be productive citizens. Standards of health care plummet. Infant mortality and disease mortality skyrocket. Lifespan plummets to something like that of Mauretania. Our hospitals start to look like Cuban hospitals, and their ability to assist us in our times of medical need is greatly compromised.
The environment? We’d need to put more land into farming. Uproot the citizenry and plow over the suburbs. of course, but I’m not certain I want to eat wheat grown where people were throwing out their old oil. More likely, we’d take land that is currently reserved for parks or recreation area and turn it into farmland, especially where there is water, as our irrigation system depends upon energy.
Housing goes back to nineteenth century tenements if we’re lucky. You need to be within walking distance of work if you’ve got a job, or on a public transportation line. This means that land around jobs providers get relatively much more expensive, and we can’t afford the steel to build more than six stories up. So we go from 2800 foot McMansions back to 700 or 800 square foot apartments for families. The buildings themselves will be beehives of unreinforced masonry, and entire cities in earthquake zones die the next time they have one.
Women, be prepared to die in childbirth more often, suffer more complications we can’t deal with in pregnancy. And since more of the children will die, be prepared to have more children, because you want to be taken care of in your old age, which starts sometime around fifty. Abortion may still actually be legal, but I doubt it. If you don’t want the child, somebody looking ahead to their old age does. Our primary method for 99 percent of the population of surviving into what is now late middle age will be having children to take care of them when they are too feeble to perform the backbreaking work that agrarian economies such as I’ve described require. You’re an accountant, realtor, financial planner, a member of any number of office staff professions? Be prepared to become a dishwasher or a day laborer or a chicken plucker (or unemployed and destitute) in conditions that haven’t been seen since the turn of the twentieth century. Authors, writers, consultants, and college professors? The vast majority of you are among the unemployed as the national budget for your work (both private and governmental) shrinks to a fraction of its current size. Even if you have tenure, nobody will care. We won’t need office workers, and other countries have no shortage of you; they don’t particularly want you for a citizen. Oh, and employers have more power than they’ve had in a century, also. You think 5% unemployment is bad; wait until you see forty. The Mexican government uses the Rio Grande to keep Americans out.
Now for the next obvious point. All those wonderful people in China and India and Brazil and elsewhere? They want our current standard of living, too. Actually, they want better than that if they can get it, and they will unless they’re as stupid as we have been for the last forty years. Just because we’re stupid enough to make a choice that means we’re going back to a manual labor economy doesn’t mean they will. Matter of fact, I’ll bet money they don’t. This has implications. For the global economy, what happens when every one of six billion people is using 11 kilowatts of energy per capita? Demand goes up. Way up. Factor of ten or more up. The supply isn’t getting any bigger as we sit here; matter of fact, the chokepoints are becoming more pronounced. Price goes up, and what energy companies we have left are willing to sell even less to the United States because they’d rather sell it elsewhere. Our natural reserves will become our only source of foreign capital. And they’re not as great, and not as easily accessible without high energy, as they once were. We have a national debate about strip mining Yellowstone, which we decide to do. As a matter of course, we dam both Hetch-Hetchy (again) and Yosemite for hydroelectric. People start dying (again) from all kinds of conditions we haven’t seen in a generation as the strip mines we decide we need more of again have their effect on the environment.
I really hope I’m getting through to the environmentalists and capitalists among you. We can start being more hospitable to industry now, or we can go back in time 120 years within the next generation, and I don’t think we’ll ever get back to the point we are now, or even anything resembling what our alternative option of being a little more accomodating to industry looks like today, and the longer we wait and the more you stall, the worse the equilibrium is going to get.
Now I’m going to talk to the patriots, and the human rights activists, among you. Military power flows from economic power. So does every other form of geopolitical clout. No high energy economy, and we become about as relevant to most of the world as Brazil was sixty years ago. Our position atop the geopolitical pyramid is taken by China. Yes, the people who gave you Tianamen Square 1989, and ongoing racial and religious persecutions and forcible third trimester abortions, and executions of any determined foe of the regime they can get their hands on. The United States is far from perfect, but China’s modus operandi where it comes to human rights is their rulers are human and have the rights to do anything they want. The idea that the world will be better off if the United States is taken down a peg or removed from the board altogether is bullshit, and deep down most people in the civilized nations know it’s refined and concentrated bullshit. But among the less progressive nations of the world, Iran takes the opportunity for as much danegeld (in whatever form) as they can get, as does every terrorist organization we’ve hunted, and of course the nascent democracies in Iraq and Afghanistan collapse. Taiwan is toast; on the other hand without us Israel may finally develop the guts to deal with the Palestinian problem and nobody will give a damn except the Arabs. Nobody will help us; we can’t do anything for them anymore, and a lot of old alleged allies like the French and failed enemies like the Russians don’t bother to hide their glee. About the only bright spots are Japan and South Korea, which is too big and prosperous for North Korea to take down.
I could go on, but that’s the stick. We don’t take immediate steps to preserve our economy, it will happen, to a greater degree or lesser. On the other hand, we have the carrot: the continued growth of our society as our economy grows. More of what we’ve come to expect: increasing affluence, increasing lifespan, increasingly good environment despite relaxing a few regulations, increasing options for our citizens, etcetera, etcetera.
Well, what is it going to be? Are you going to make a choice and live with it like an adult, or are you going to be one of those reading this who is convinced there is a secret hidden formula for converting seawater into super-powered gasoline, and if only we can break the oil company monopoly we’ll all be living in paradise within a few years? The children among you may buy off on that bit of petulant fantasy, but the adults know that if there was such a formula the oil companies could easily become a hundred times wealthier by using it, and all without paying OPEC a dime.
Those who provide power are not your enemies. Whether you realize it or not, they’re among your very best friends. It’s time we started acting like it.
