Sunday, January 20, 2008

Comments Provoking Deep Thought

Peter made an interesting comment in our discussion under Hang On To Your Thermostat. He said, "US population growth is relatively low (<1%/yr) of which almost half is due to net immigration. Even halting population growth will not solve the global problem of resource utilization. It is economic growth that presents the problem in utilization of our current energy (and other) resources. Hence the need to expand to alternatives beyond fossil fuels (unless 3rd world countries remain underdeveloped, which I doubt anybody wants!)."

We were throwing around the idea of population control (don't worry, it's just a concept whose cultural history intrigues us, not an actual present day hope for involuntary enforcement) but that's not the focus of this post. Pete's comment got us to wondering about the reasons why we have failed to expand to alternatives beyond fossil fuels to date. Moreover that the economy is now being restricted, in a roundabout sense as a result of our failure to transition to a model of sustainability. After all, it's been nearly two years since the President declared, "America is addicted to oil." Ask yourself how far we've come. Although we're not touching on the immigration part of the comment, you can ask yourself how far we've come there too.

Energy has really become part of The American Dream. We don't picture our lives without it. As a result, much resistance comes from people across the board because they're simply not sure what they are going to lose as The American Dream transitions to an American Green Dream. And the fear seems to trickle through various levels of society. Like a kind of program we run on our collective subconscious "national hard drive." At all costs, we work to maintain the status quo in many cases. The present-day bull market cycle phase in commodities though is shaking up the economy, and rightfully so. The result to the end user naturally is a drastic price adjustment. Three dollar gas certainly appears to have more people focusing on this issue.

A concern for "economic growth based upon resource utilization under our current energy policies," is well founded, as it seems to us, here, that our country is already experiencing the beginning stages of economic erosion as directly related to our energy consumption. The greatest problem being steadily rising fuel prices forcing change. It's very likely that our current resource management plan, which now includes in its repertoire, President Bush personally begging OPEC to release more oil, is collapsing. Our country may continue to experience economic hits manifest in housing bubbles,technology and financial bubbles, restricted credit, economic injections and eventual bank restructuring. As the old model falls apart, our level of ease through the transition will be mostly tied to how quickly we can change and move toward the adoption of biofuels being cautious to never, "write off viable alternatives due to perceived deficiencies."

Perceived deficiencies" are just that. Perceived. And those perceptions have been marketed to us. In S. David Freeman's book, Winning Our Energy Independence, an Energy Insider Shows How, he explains a sense of cold-war pride as the underlying sentiment upon which the habits of American energy consumption were built. "In the 1960's, the idea of saving energy was indeed considered anti-American. When I was the executive assistant to the chairman of the old Federal Power Commission in the early 1960s, I remember the reaction of my boss Joseph Swidler to the staff's projection of the U.S. electric demand for 1980. He said, "Folks, this is lower than what the Russians are projecting. We're not going to let Russia beat us. Go back and give me a higher projection that shows the U.S. as a winner." And they did. We actually thought the more electricity we used, the better off we were. Electricity was connected to "living better electrically," the industry slogan. Freedman suggests leaders like Dick Cheney still subscribe to this kind of nostalgic, post WWII attitude. Freeman notes, "as late as 2001, Vice President Dick Cheney said that conservation was simply "a sign of personal virtue...not a sufficient basis for a sound, comprehensive energy policy."

In conclusion, we offer that economic growth under the previous model cannot continue, and it is already slowing down. However, for every action a reaction, for every cause an effect - a new economy will evolve from the old model, and there will be all kinds of niches to be filled. Overall, we're wasting precious time wrapping ourselves in the promises of worn out regimes.


Dave Gardner said...

I agree and am glad to see some recognition of the likelihood our current economic correction is the beginning of a major shift, reacting to the scarcity and cost of oil. I don't believe alternative energy sources are the panacea, though they certainly must be part of our reaction.

But to ignore population growth will be a mistake over the long term. Human impact on the planet is the product of population times per capita resource intensity. Recent news reports indicate increasing U.S. fertility rates. A one percent annual rate of population growth may not sound like much, but that rate will double a population in 70 years. So, IF we are lucky enough to halve our resource intensity via conservation, efficiency and (gulp) technology, if our population doubles we are right back where we started.

And how can we expect to tackle global population issues if nations like the U.S. think importing people is a great economic engine? Today several nations that are experiencing population decline, instead of celebrating, are instituting baby bonuses. At the very least, we all need to know the negative impacts of perpetual population expansion.

Dave Gardner
Hooked on Growth: Our Misguided Quest for Prosperity

Anonymous said...
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5 Myths About Breaking Our Foreign Oil Habit

By Robert Bryce
Sunday, January 13, 2008; B03

With oil prices still flirting with $100 a barrel, everyone is talking about the need for "energy independence." Late last year, President Bush signed the Energy Independence and Security Act of 2007; Sen. John McCain has declared, "We need energy independence"; and Sen. Barack Obama has called for "serious leadership to get us started down the path of energy independence."

This may all be good politics. But the idea that the United States, the world's single largest energy consumer, can be independent of the $5 trillion-per-year energy business -- the world's single biggest industry -- is ludicrous on its face. The push for energy independence is based on a series of false premises . Here are a few of the most pernicious ones.

1 Energy independence will reduce or eliminate terrorism.

In a speech last year, former CIA director R. James Woolsey Jr. had some advice for American motorists: "The next time you pull into a gas station to fill your car with gas, bend down a little and take a glance in the side-door mirror. . . . What you will see is a contributor to terrorism against the United States." Woolsey is known as a conservative, but plenty of liberals have also eagerly adopted the mantra that America's foreign oil purchases are funding terrorism.

But the hype doesn't match reality. Remember, the two largest suppliers of crude to the U.S. market are Canada and Mexico -- neither exactly known as a belligerent terrorist haven.

Moreover, terrorism is an ancient tactic that predates the oil era. It does not depend on petrodollars. And even small amounts of money can underwrite spectacular plots; as the 9/11 Commission Report noted, "The 9/11 plotters eventually spent somewhere between $400,000 and $500,000 to plan and conduct their attack." G.I. Wilson, a retired Marine Corps colonel who has fought in Iraq and written extensively on terrorism and asymmetric warfare, calls the conflation of oil and terrorism a "contrivance." Support for terrorism "doesn't come from oil," he says. "It comes from drugs, crime, human trafficking and the weapons trade."

2 A big push for alternative fuels will break our oil addiction.

The new energy bill requires that the country produce 36 billion gallons of biofuels per year by 2022. That sounds like a lot of fuel, but put it in perspective: The United States uses more than 320 billion gallons of oil per year, of which nearly 200 billion gallons are imported.

So biofuels alone cannot wean the United States off oil. Let's say the country converted all the soybeans grown by American farmers into biodiesel; that would provide only about 1.5 percent of total annual U.S. oil needs. And if the United States devoted its entire corn crop to producing ethanol, it would supply only about 6 percent of U.S. oil needs.

So what about cellulosic ethanol, the much-hyped biofuel that can be produced from grass, wood and other plant sources? Many in Congress believe that it will ride to the rescue. But the commercial viability of cellulosic ethanol is a bit like the tooth fairy: Many believe in it, but no one ever actually sees it. After all, even with heavy federal subsidies, it took 13 years before the corn-ethanol sector was able to produce 1 billion gallons of fuel per year. Two and a half decades elapsed before annual corn-ethanol production reached 5 billion gallons, as it did in 2006. But now Congress is demanding that the cellulosic-ethanol business magically produce many times that volume of fuel in just 15 years. It's not going to happen.

3 Energy independence will let America choke off the flow of money to nasty countries.

Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez's Venezuela. But the world marketplace doesn't work like that. Oil is a global commodity. Its price is set globally, not locally. Oil buyers are always seeking the lowest-cost supplier. So any Saudi crude being loaded at the Red Sea port of Yanbu that doesn't get purchased by a refinery in Corpus Christi or Houston will instead wind up in Singapore or Shanghai.

4 Energy independence will mean reform in the Muslim world.

The most vocal proponent of this one is New York Times columnist Thomas L. Friedman, who argues that the United States should build "a wall of energy independence" around itself and thereby lower global oil prices: "Shrink the oil revenue and they will have to open up their economies and their schools and liberate their women so that their people can compete. It is that simple." When the petro-states are effectively bankrupt, Friedman argues, we'll see "political and economic reform from Algeria to Iran."

If only it were that easy. Between about 1986 and 2000, oil prices generally stayed below $20 per barrel; by the end of 1998, they were as low as $11 per barrel. As Alan Reynolds pointed out in May 2005 in the conservative National Review Online, this prolonged period of "cheap oil did nothing to promote economic or political liberty in Algeria, Iran, or anywhere else. This theory has been tested -- and it failed completely."

5 Energy independence will mean a more secure U.S. energy supply.

To see why this is a myth, think back to 2005. After hurricanes ravaged the Gulf Coast, chewing up refineries as they went, several cities in the southeastern United States were hit with gasoline shortages. Thankfully, they were short-lived. The reason? Imported gasoline, from refineries in Venezuela, the Netherlands and elsewhere. Throughout the first nine months of 2005, the United States imported about 1 million barrels of gasoline per day. By mid-October 2005, just six weeks after Hurricane Katrina, those imports soared to 1.5 million barrels per day.

So we're woven in with the rest of the world -- and going to stay that way. Today, in addition to gasoline imports, the United States is buying crude oil from Angola, jet fuel from South Korea, natural gas from Trinidad, coal from Colombia and uranium from Australia. Those imports show that the global energy market is just that: global. Anyone who argues that the United States will be more secure by going it alone on energy hasn't done the homework.

Robert Bryce is a fellow at the Institute for Energy Research. He is the author of the forthcoming "Gusher of Lies: The Dangerous Delusions of 'Energy Independence.' "

Harry Brinson & Stacey Barrington said...


Thanks for posting another perspective. The article you posted seems to promote desperately hanging on to our unsustainable practices.

This article seems to completely ignore the fact that our growth, based on the presence of abundant oil, will be grossly limited by a demand which is now beginning to outpace supply.

If every country consumed as much as we do here in America, we would need several worlds to supply ourselves with the resources this article claims we cannot detach ourselves from. "The $5 trillion energy business" certainly needs us to believe that there is no other way to operate our systems. They are invested in the status quo because they are running a business, and smart business people need to generate profit. The problem these people are running into though is that their traditional business models simply don't work anymore. The hidden costs are beginning to bubble over on all sides of this petri dish experiment called cheap energy. Pollution (a subsidized cost), diminishing resources, aging infrastructures and continuous demand via growth are throwing all kinds of curveballs to the energy gurus. So far we're not sure they're flexing fast enough.

Now for the terror issue.

"The next time you pull into a gas station to fill your car with gas, bend down a little and take a glance in the side-door mirror. . . . What you will see is a contributor to terrorism against the United States."

Although we feel strongly about this issue, the above quote is a little unfair. We don't think a lot of people realize what happens when they fill their tank. They're just filling up trying to get to work. We gave up our car because we are very much against the current uses of the United States military as dictated by The Decider and VP Cheney. We also feel strongly about the pollution we are contributing to. We decided to deal with the dillema of bad governmental policies, rising gas prices, rising inflation, pollution and personal grievances by taking on the challenge of a lifestyle change.

The Post's article contains a lot of figures we've heard before, and appears to be accurate; however, this guy's got the fundamental idea all wrong. Buying oil and the associated petrodollars may not directly fund terrorist acts. He's right there. However, he's avoiding the connection between oil and terror as part of a symbiotic dance of power, religion, ancient tribal pacts and relationships as well as a whole host of peripheral underlying influences. It will never be, and never was, as black and white as the writer would like to make it seem. We occupy their soil to forge relationships, to "reform" Muslim thinking, to promote democracy, for whatever else we want to come up with, but no one should ignore our self-interested investments in the region because it has the potential to continue fueling our economic life-blood, oil.

Terrorism may increase or decrease depending upon how we all conduct ourselves. By the way, Canada's oil sands are quite difficult to convert to oil, expensive and energy intensive for the production. Mexico's largest field, Cantarell, is now on a rapid decline in production. Where will we turn in the next few years?

The article mentions nothing of the unbelievable power of solar, magnetics, hydrogen, geothermal, wind fields, the futuristic upper atmosphere style giant windmill, tidal power, nor the creation of thousands of green jobs. It seems sadly to focus on a desperation for bio that could, yes, compromise our well-being were the movement to take the course the author articulates.

Sustainable growth is not going to look the same as our current model. Sustainable growth includes world trade. Protectionism en masse can be as dangerous as avoiding reality by living under the illusion that things will always remain the same. The only guarantee actually is that things will always change.

What we would like to see is a realization on a global scale that our energy needs are ubiquitous and completely unbiased toward race. It is a link that people will begin to openly recognize that we share. It would be nice to see people stop saying how impossible it all is, and start celebrating the tons of existent possibilies. We all believe different things, but we all have very similar basic needs and energy is one of them.

Utimately, Anon, if we continue doing things on a business as usual scale and following articles that are full of holes like swiss cheese, nature will take care of cleaning us right up with the rest of the mess.

BTW, how about next time include some of your own thoughts. Robert Bryce has a lot of good points, but this article certainly doesn't exhibit his full scope. To learn more, check him out for yourself at the Institute for Energy Research or at

Good luck.

Dave Gardner said...

I have to take exception to one comment above from Stacey and Harry: "Sustainable growth is not going to look the same as our current model. Sustainable growth includes world trade."

News flash: there is no such thing as sustainable growth. Indeed, it is modern society's obsession with and insistence on perpetual growth that is the biggest cause of our climate change, energy crisis, and other environmental disasters taking place before our eyes.

Dave Gardner
Hooked on Growth: Our Misguided Quest for Prosperity