[bcipiti]

Peak Oil: Catalyst for Change

Every year it becomes more apparent how much our economy revolves around oil. We just witnessed a record climb in the price of oil that pushed stocks down and helped slowed the economy. Then we saw a turn around as high prices and a slow economy lessened demand. But have we learned our lesson, or are we just going to fall back to our old habits?

We tend to be short-sighted when it comes to oil. Yes, the price may be going down a little now, but what happens next summer or the summer after that? If we are not there already, we will soon hit peak oil, and prices are only going to increase after that. The only benefit of our dependence on oil is that it brings energy to the forefront of the national debate. We are finally recognizing that we need alternatives, and not just for transportation fuels, but for power generation as well. The increasing price of oil appears to be the only way we will ever make change.

In the last twenty years, fuel efficiency in cars has stagnated. Our foreign oil dependence has increased from 40 to 60%. Additional electrical demand has been met with coal, natural gas, and increasing the capacity of exiting nuclear plants. Our renewable energy production more or less has not increased. But $4 plus gas may be the beginning of the energy revolution that government, industry, and environmental groups have not been able to initiate.

Transportation Alternatives

The revolution starts with alternative transportation fuels. We have already seen the beginning of the closing of large truck and SUV plants to make way for increased production of small cars and hybrids. Longer term, though, we need an alternative fuel, and the three key alternatives are biofuels, hydrogen, and electric cars.

Increasingly more studies are coming out about the downfalls of biofuels as a transportation alternative. It takes about as much energy to produce biofuels as we get out of them, and most of those energy inputs ultimately come from fossil fuels. Because of the fossil inputs, biofuels produce about the same amount of net pollution as oil. The land and water requirements are enormous, and we have already seen how corn ethanol has caused food price increases. All-in-all biofuels do not represent a step forward, and we have to question the desire to turn food crops into fuel when so many areas of the world are dependent on U.S. food for survival.

Hydrogen also has some key downfalls. The most obvious is that the technology for producing, distributing, and using hydrogen in fuel cells is still at least 20 years off. It would take a massive infrastructure change to make the hydrogen economy work. Yet the biggest downfall is one that has received little attention—the overall hydrogen economy will be incredibly wasteful of energy resources (as compared to biofuels and electric vehicles). The overall process of creating hydrogen in a power plant, distributing it, and converting it back to electricity in a fuel cell has many efficiency losses.

Electric vehicles then are the only remaining option that can make any real sense toward achieving a clean, economic, and independent transportation future. The infrastructure is already in place, and we are moving toward electric vehicles through the hybrid development path. Plug-in hybrids are expected to be available in the 2010 model year. The added cost of plug-ins and electric vehicles can be made up for since the cost of electricity is much cheaper than gasoline (on a price per mile basis). Yes, battery technology still needs to make some advances to increase cycle life, reduce costs, and move toward rapid charge, but hybrids provide an economic base in which to make those advances.

The Feedback Effect

Now we have to wonder, what does it mean if in five years our electrical grid starts getting taxed by the addition of plug-in hybrids and electric cars? From the environmental standpoint it only makes sense if we satisfy that increase in demand with emission-free power generation. Our grid is already at a tight generating margin. We are having a hard time keeping up with increased electrical demand due to population increases. The move toward more use of electricity for transportation could easily lead to electricity price increases if the utilities are not able to keep up.

Similar to oil, electricity prices could also be near a breaking point. Older nuclear and coal plants are able to produce power cheaply since the construction loans for the plant have been paid off. This has made it difficult for new plants to compete. On top of that, local communities continue to believe the “Not in My Backyard” philosophy, and environmental groups increase the cost of building new plants by making it more difficult to get licenses approved.

This atmosphere, combined with a potential large increase in demand from electric vehicles could be a recipe for price hikes and even brownouts and blackouts across the country. However, price hikes may be the only way to truly move us toward alternative power generation. Wind power is already economic in many areas, and slight price increases will allow wind energy to proliferate. Other renewable energy options like solar thermal and geothermal may also start to make an impact in select areas. Nuclear plants will become less risky to investors. And higher electricity prices may even make pilot carbon sequestration projects economic for clean coal energy.

Moving Forward

The great thing about our economy is that it knows how to heal itself. An energy recession could be painful, but eventually new companies and new technologies will win out. The move toward plug-in hybrids will decrease the pain of expensive oil. Becoming more accepting and learning to compromise on alternative power generation will prevent electricity price hikes. Blocking the construction of a wind farm to prevent a few birds and bats from getting killed is not looking at the big picture.

On average, gas prices are probably going to keep going up. We may see some electricity price hikes as well. But remember, the faster they rise, the faster we can move toward clean and independent alternatives.

-for more information, check out The Energy Construct.
www.theenergyconstruct.com

[killJOY]

The great thing about our economy is that it knows how to heal itself. An energy recession could be painful, but eventually new companies and new technologies will win out. The move toward plug-in hybrids will decrease the pain of expensive oil. Becoming more accepting and learning to compromise on alternative power generation will prevent electricity price hikes. Blocking the construction of a wind farm to prevent a few birds and bats from getting killed is not looking at the big picture.

On average, gas prices are probably going to keep going up. We may see some electricity price hikes as well. But remember, the faster they rise, the faster we can move toward clean and independent alternatives.

*Yawn.*

I've been listening to such flatulence for years. Y E A R S !

And what actual concrete steps have been taken?


NONE.

NOT.

ONE.

[Homesteader]

Now wait just a minute, didn't the U.S. congress in its omnipotence move to require efficient light bulbs by 2017?

Didn't they move to sue OPEC?

Didn't a couple of presidential hopefuls support a summer holiday for the gas tax?

. . .gasp, somebody stop me, I'm hurting myself.

[Rod_Cloutier]

Don't bet its going to be one or two years of calm till oil prices rise again as you claim. Humans are currently using 85 million barrels of oil a day, to carry that through and do the math 85 x 12 days= 1.020 billion barrels. A billion barrels of consumption of a scarce and non-renewable resource every 12 days is in no way sustainable.

I typical 'giant' oil field has 600 million barrels of oil in it or in other words a 1 week supply at currect rates of consumption. How many giant oil fields do we have to eat into before the rate of consumption becomes a problem?

A Saskatchewan oil company recently announced that they had found a major tar sands find in northwestern Saskatchewan having an estimated recovery of 1 billion barrels of oil- sounds like a lot?? Enjoy your additional 12 days -that's all this counts for.

I would guess that it will only be 8-10 billion barrels of additional consumption before peak oil hits full force- enjoy 3-4 months of calm.

[Homesteader]

JFK challenged the U.S. to put men on the moon in 10 years. Today it takes an act of congress to install efficient light bulbs in 10 years.

[Ludi]

have we learned our lesson, or are we just going to fall back to our old habits?

I'm more interested in what you yourself are doing to change your own life than some list of what "we" might do.

Tell us your personal changes.

Thanks.

[MadScientist]

pretty good post overall, may want to seriously revise that last paragraph though.

You dont address the very real issue of overconsumption.

The great thing about our economy is that it knows how to heal itself.

Are you suggesting our godly and omniscient economy is capable of providing for an ever expanding population and consumption rate?

That no matter how many humans we pack onto our planet the Lord Economy will find a way to provide for us?

Economy is not God. There are limits to growth. Advocating faith in the economy as opposed to personal responsibility is counterproductive.

[Gerben]

Are you suggesting our godly and omniscient economy is capable of providing for an ever expanding population and consumption rate?

Sure. Prices go up. People starve and die of poverty-related sickness.
Well we got some change. More smaller cars instead of SUVs. Hybrids. Electric cars will soon hit the roads. It works, but it might not work without some pain and suffering.

[Twilight]

Good stuff will happen in the future. All we have to do is wait.

That has graced many an editorial over the years. I am more interested in seeing energy conservation. It seems the industrial kind has only made more room for rollbacks in the individual kind. I will be more encouraged when I see savings made in the home, not pipe dreams about devising a new energy system.