22 October 2010

Quote of the Day

State Department spokesman Mark Toner clearly explains an energy policy reality:
"[Secretary of State Hilary Clinton explained that] we need cleaner energy sources and referred to the President’s agenda to seek cleaner energy sources, but until that time, we need to – frankly, to find energy sources in other areas as well, be they clean or dirty."
If only we could think of some way to accelerate investment in energy technology innovation.

9 comments:

  1. "If only we could think of some way to accelerate investment in energy technology innovation."

    Roger, while I believe your statement above was meant to be sardonic, as you no doubt recognize that the government today "accelerate(s) investment" in myriad technologic innovations through subsidies (taxes), this is not really the province of government, perhaps except in cases of true national security issues.

    When the government promotes a strategy, it is usually for an irrationial reason, aka politics. Witness ethanol and the inefficiencies it promotes. (http://www.nationalreview.com/exchequer/250637/obama-s-tax-cut-rich-oil-companies)

    Our great-grand children will live in an economy based upon fossil fuel, lacking some quantum discovery in solar/battery life, etc. And it is the best use of our resources today to let that quantum discovery be the result of a free market need, not "bend the curve" resource-wasting tax subsidies.

    So called "clean" energy is not a national security issue. It is an issue of spending huge sums of money to force currently impractical "solutions" on us, based upon (e.g.) the political clout of the likes of Archer Daniels Midland, Monsanto, and ConAgra.

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  2. -1-Greg

    "this is not really the province of government"

    Over the past centuries government has played a huge role in fostering and directing innovation. It is a philosophical debate whether government should or should not be involved, as it has been and will continue to. So I don't see much mileage in such abstract debates.

    In areas such as health, agriculture, defense, information technology and many others governments have pushed innovation, often with beneficial results, and sometimes not.

    The question thus is how public resources might be directed toward innovation in energy technology focused on goals of low costs, security of supply and access, lesser impacts etc. in a manner that meets common interests. And I'd bet that we could find some common ground on that question. Thanks!

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  3. The question you pose is a good one, but the catch is "common interests." The way the politcal system works makes this nearly impossible - too many "rent seekers." In industry it is often said that there are three legs on a project management stool - cost, schedule, and quality. You can have any two.

    So it is with energy, only the three legs might be cost, security, and impacts.

    Have a good weekend!

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  4. Good to see some energy reality. It's hard to see what the energy technological innovation is going to be, with governments rushing to pick 'losers' due to CO2 targets and climate alarmism.

    I think Nobel Prize winner George C Olah's 'Methanol Economy' looks promising.

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  5. Now we know that there are grown-ups in the Obama administration. This is a classic example of those times when you can't tell the people the truth. The responsibility of power means that sometimes you have to go against your stated policies. You can't come out and say it, for political reasons, but you have to swallow and do it. The CIA has explained the country's energy needs to Obama and his political boys, and they understand what needs to be done. Yes, the oil sands are nasty for the environment - and it doesn't matter. We need that oil.

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  6. Rather than trying to force development of specific energy technologies (clean or dirty), in my opinion the single most effective action the government could take would be to provide some assurance of stability in policy -- whatever policy that is. Let me give you two examples of projects that I have personally been involved with.

    As a result of the energy crisis of the 1970's, NSF, and later DOE, supported research in alternative energy sources. I got my Ph.D. in engineering supported by one of those projects, which was for methane production from solid waste and agricultural residue. By 1979, a pilot-scale plant, with a capacity of 100 tons/day of feedstock was constructed. But the program basically died when national energy policy changed with the change in administrations in 1981. Those who had invested in alternative energy programs -- no matter what the actual technology -- lost their shirts. In addition, those of us who had invested our time creating the necessary expertise were left with no real market for our services.

    In the mid 1980s, I helped design a major energy pipeline that would move crude oil from west coast oil fields to gulf-coast refineries. (It may be hard to believe, but the west coast of the U.S. was a net oil exporter at that time.) Initially, the project was all funded by small private investors. After the preliminary design work was complete and construction permits were obtained, the project was purchased and completed by the Goodyear Tire Company. The pipeline was built at a cost of about $1.4 Billion of their money. But then energy policy changed again. The citizens of California decided they would not allow oil drilling off the coast. (There's a LOT of oil out there...) Without that additional production on the west coast, there soon was no surplus oil to ship east. The pipeline eventually shut down and the equipment was sold off. Even if interest in off-shore California oil is renewed, the best method of transport is gone. Again, a policy decision adversely impacted a project that made good sense under the policy in place when the project was conceived, financed, and constructed.

    Why would ANY private investor (big or little) invest in a project that is likely to be a financial disaster, based on the policies that could be implemented with the next change in adminstration (or the administration after that)?

    Please note that this is not a beat-down of either the "green" philosophies or "drill-drill-drill" theory of energy production. I've worked for both teams! But these are big, expensive, time-consuming projects, with long time frames for achieve profitability. We've got to have a fixed target to aim for.

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  7. The Democrats just love the environment, don't they ?

    Following eight years of the glorious Clinton/Gore regime (which doubled the prison population), the USA was so totally dependant on coal, the senate voted 95-0 against Kyoto.

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  8. @Gerald

    Look on the bright side - while other countries are draining their oil reserves, we are keeping ours in the ground. When prices spike high enough, the people will be demanding Drill, baby, drill! And have no doubt - drill we will. We'll drill off California and Florida, and we'll drill in national parks.

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  9. @Mark B
    I've often tried to make the same point. While we should be making all reasonable efforts to conserve and replace oil - especially as it impacts foreign policy and petro-terrorism, areas which are now off limits to extraction are our real "strategic petroleum reserves". As long as relatively cheap foreign oil is available, we should keep as much in the ground as we can in the U.S. Even if a magical new and dense carbon-free energy source appears (Thorium/LFTR?), we are going to need oil for feedstock for the petrochemical industry for a long, long time.

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