Power Hungry (5 page)

As for terrorism, the very nature of the global oil market—the biggest, most integrated, most transparent market ever created—undermines the claim that using less oil will somehow result in a reduction in the tactics of terror. Although it's true that some petrostates have ties to terrorism—Iran being an obvious example—it's just as true that Iran and other oil exporters cannot be isolated from the global oil market. Terrorism isn't an ideology, it's a tactic, a cheap tactic, and it doesn't depend on petrodollars. In May 2009, the Rand Corporation, one of the oldest defensefocused think tanks in Washington, released a report concluding that America's “reliance on imported oil is not by itself a major national security threat.” The report went on to debunk the claim that oil and terrorism are related, saying, “Terrorist attacks cost so little to perpetrate that attempting to curtail terrorist financing through measures affecting the oil market will not be effective.”
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Many people may be worried about peak oil, but those concerns frequently ignore the fundamentals of the marketplace. Prices and technology are always combining to unlock hydrocarbons that were once thought unreachable. Let's look at just one month: September 2009. During that month alone, several companies announced major oil and gas finds. For instance, BP announced that its Tiber prospect in the Gulf of Mexico may hold more than 3 billion barrels of oil.
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That well was drilled in 4,100 feet of water to a depth of 35,000 feet.
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On September 11, the Spanish energy firm Repsol announced the biggest natural gas discovery in Venezuela's history. The discovery, located in the Gulf of Venezuela in a water depth of about 200 feet, may contain 8 trillion cubic feet of gas, the energy equivalent of about 1.4 billion barrels of oil.
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Five days later, Anadarko Petroleum announced the Venus find offshore Sierra Leone, and the company said that the geology of offshore West Africa appears favorable for hydrocarbons along a line some 700 miles long that goes through Liberia, Cote d'Ivoire, and Ghana.
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In addition, Petrobras, the Brazilian national oil company, announced yet another major offshore discovery. This one involved a big pool of hydrocarbons underneath more than 7,000 feet of water in the Santos Basin, an area south of Rio de Janeiro.
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Just for grins, let's suppose that Petrobras and the other big companies decided to suddenly stop looking for more oil. Even if that unlikely
event occurred, the world still has about 1.25 trillion barrels of proved reserves waiting to be tapped. That's a lot of petroleum—about forty-two years' worth at current rates of production.
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Sure, the world will one day hit its peak in oil production—or perhaps that peak has already passed. Whatever the case, we will keep using oil for decades to come, and our consumption will rise or fall depending on the price. Commodities have always been rationed by price. Oil is a commodity, and as the price of that commodity increases, the rationing of oil will become more pronounced and we will be forced to use petroleum more efficiently.

Global climate change and carbon dioxide emissions are the causes
du jour
. There is a widespread belief that if the people of the world do not unite to drastically reduce their carbon dioxide output, then catastrophic climate change will occur. In fact, some environmental activists have decided that the optimum level of carbon dioxide in the global atmosphere should be 350 parts per million. (By late 2009, the concentration was about 390 parts per million.) On October 24, 2009, the supporters of the 350 parts per million target conducted more than 4,000 synchronized demonstrations around the world. Their aim: to build a “global community” to support the 350 ppm goal.
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The chairman of the Intergovernmental Panel on Climate Change, Rajendra Pachauri, has said he is “fully supportive” of the 350 ppm goal.
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In November 2009, former vice president Al Gore, appearing on the
Late Show with David Letterman
, declared that unless the people of the world took drastic action to curb carbon dioxide emissions, it could be “the end of civilization as we know it.”
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Gore may be right. It's also possible that he's wrong. In many ways, Gore's opinion doesn't matter, because no matter how much the United States may want to lead the effort to reduce carbon emissions, it cannot, and will not, be able to substantially slow the increasing global use of coal, oil, and natural gas. Why? There are simply too many people living in dire energy poverty for them to forgo the relatively low-cost power that can be derived from hydrocarbons. (I will discuss carbon dioxide emissions at length in Part 2.) For proof of that, consider the per-capita carbon dioxide emissions in the world's most populous countries. From 1990 to 2007, the per-capita emissions of carbon dioxide in the United States fell by 1.8 percent. But during that same time period, per-capita emissions soared in Brazil, China, India, Indonesia, and Pak-istan.
Those five countries contain more than 3 billion people, and their energy-consumption patterns are being replicated in nearly every major developing country on the planet.

Source
: International Energy Agency, “CO
₂
Emissions from Fuel Combustion 2009,”
http://www.iea.org/co2highlights/co2highlights.pdf
, 90–91.

That reality was reflected in Copenhagen in December 2009 when leaders from 192 countries met for what the Associated Press called “the largest and most important UN climate change conference in history.”
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After two weeks of wrangling and lofty rhetoric, the meeting ended with an eminently predictable result: no legally binding agreement on any reductions in carbon emissions, only a promise to reduce emissions “individually or jointly,” and an agreement to meet again a year later in Mexico City to discuss all of the same contentious issues one more time.
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In short, all of these concerns, from worries that we have reached (or will soon reach) a peak in oil production and are (or will soon be) entering a period of inevitable decline, to the alarmist cries over impending global warming—and the supposed solutions to them—hinge on the belief that the transition away from hydrocarbons to renewable resources can be done quickly, cheaply, and easily.

That. Is. Not. True.

Tomorrow's energy sources will look a lot like today's, because energy transitions are always difficult and lengthy. “There is one thing all energy transitions have in common: they are prolonged affairs that take decades to accomplish,” wrote Vaclav Smil in November 2008. “And the greater the scale of prevailing uses and conversions, the longer the substitutions will take.”
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Smil, the polymath, prolific author on energy issues, and distinguished professor at the University of Manitoba, wrote that while a “world without fossil fuel combustion is highly desirable ... getting there will demand not only high cost but also considerable patience: coming energy transitions will unfold across decades, not years.”
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Indeed, energy transitions unfold slowly and are always under way whether we recognize them or not. Between 1973 and 2008, the amount of electricity generated in the United States with nuclear reactors increased by more than 800 percent. Nuclear power now accounts for about 20 percent of the electricity generated in America. But for the average homeowner whose immediate interest is in sweeping the carpet or baking a pie, that transition has been invisible. For the consumer, the electricity that comes out of the wall socket is a commodity. How it is generated is of little interest. The key concern for the consumer was, and continues to be, that electricity remain cheap and always available.

The $5-trillion-per-year global energy business dwarfs all other sectors of the economy.
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Given its size, and given that any major energy transition will take decades, we must carefully analyze the various energy sources to determine which ones can satisfy the Four Imperatives: power density, energy density, cost, and scale. Using those metrics will help us to confront the brutal facts, winnow out the pretenders, and increase the consumption of the winners.

But before we begin that winnowing process, we must take a look back in order to understand how we got to this place in U.S. energy history. That requires calling out some of the energy posers who claim to have the answers while also taking a hard look at the underlying causes of America's energy unease. And much of that unease comes from three factors: guilt, fear, and ignorance—the deadly trio that has been incarcerating the human mind for millennia.

Happy Talk

T
HE TELEVISION NEWS industry has a great term: “happy talk.” Producers work to make sure that every second of TV airtime is filled with scripted content. But try as they might, they often find themselves with several seconds of unfilled air time that must be made to look purposeful. On some occasions, in an effort to make their newsreaders appear more likeable to viewers, TV producers may ask the talking-heads to engage in some friendly banter to fill the airtime between news segments and commercial breaks. These chummy bits of patter are called—you guessed it—happy talk.

Over the past few years, Americans have been inundated with energy happy talk. And it has come from personalities ranging from Dallas billionaire T. Boone Pickens and former vice president Al Gore to
New York Times
columnist Thomas Friedman and media darling Amory Lovins, the chairman and chief scientist at the Rocky Mountain Institute, a Colorado-based think tank.

For Pickens, the bogeyman to be slain is foreign oil. For Gore, the villain is carbon dioxide. And while the sin to be cured varies with the preacher, the message of deliverance is largely the same: Repent. Give up those evil hydrocarbons and embrace the virtues of renewable energy before you face the eternal damnations of foreign oil, global warming, and a carbon footprint that's bigger than Boone Pickens' ego.

Lovins is among the most quoted purveyors of energy happy talk. In 2007, he wrote a short piece called “Saving the Climate for Fun and
Profit” in which he said that curbing carbon dioxide emissions “will not cost you extra; it will save you money, because saving fuel costs less than buying fuel.”
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In 2008, he claimed that the issues of “climate change, oil dependence, and the spread of nuclear weapons—go away if we just use energy in a way that saves money, and since that transition is not costly but profitable, it can actually be led by business.”
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Venture capitalist Vinod Khosla is another veteran happy talker. In May 2006, Khosla claimed that making motor fuel out of cellulose was “brain dead simple to do” and that commercial production of cellulosic ethanol was “just around the corner.”
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Ten months later, Khosla was once again hyping cellulosic ethanol, saying that biofuels could completely replace oil for transportation and that cellulosic ethanol would be cost-competitive with corn ethanol production by 2009.
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Alas, Khosla's crystal ball turned out to be somewhat cloudy. By late 2009, despite hundreds of millions of dollars in venture-capital investment in cellulosic ethanol companies, not one of those efforts had been successful in producing significant quantities of the fuel for commercial use.

In July 2008, Al Gore, winner of the Nobel Peace Prize, declared that the United States should “commit to producing 100% of our electricity from renewable energy and truly clean carbon-free sources within 10 years.”
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Four months later, in an op-ed in the
New York Times
, Gore said the nation must replace “dangerous and expensive carbon-based fuels with 21st-century technologies that use fuel that is free forever: the sun, the wind and the natural heat of the earth.”
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About that same time, Gore, along with a coalition of environmental groups called the Alliance for Climate Protection, launched a $300 million media campaign designed to stop global climate change.
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That campaign is backed by a number of websites, including
Wecansolveit.org
,
Climateprotect.org
, and
RepowerAmerica.org
. By early 2009, more than 2 million people had joined and had agreed to the statement, “I want to Repower America with 100% clean electricity within 10 years.” The “grassroots partners” behind the effort include the National Audubon Society, the Evangelical Environmental Network, and other groups.
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And then there's Pickens. The Dallas-based energy mogul is one of a long line of super-wealthy Texans endowed with a Messiah complex who have luxuriated in the national limelight by promising to deliver—pick
one or more of the following—better football (Jerry Jones, Dallas Cowboys); better basketball (Mark Cuban, Dallas Mavericks); a better president (H. Ross Perot, 1992 and 1996); better football (Boone Pickens, Oklahoma State University); and better energy policy (Pickens, again). On July 4, 2008, Pickens launched a $58 million media campaign aimed at promoting the “Pickens Plan.”
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The campaign launch included a barrage of TV ads starring the Texas energy baron, who begins the pitch with a syrupy drawl: “I've been an oilman all my life.... ” The centerpiece of the Pickens Plan: “By generating electricity from wind and solar and conserving the electricity we have, we will be free to shift our use to natural gas to where it can lower our need for foreign oil.”
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