This diary is not meant for my usual readers - those of you that already understand that energy issues are going to overwhelm everything else in the coming years. This is for the indifferent, the skeptical, the careless.
You are not going to escape energy issues in the coming months and years, so you might as well get ready to talk about them.
- Peak Oil. All major oil companies have now acknowledged it.
- Nuclear. It's making a major come back.
- Carbon emissions & global climate change.
- Geopolitical conflict everywhere. Iraq. Iran. Russia. Venezuela. China.
- Domestic politics
The 2006 elections WILL BE about energy.
Peak oil
One of the best introductions to the topic is this article, which I commented in a diary this week end.
If that's too long, how about the words of the CEO of Shell, Jeroen van der Veer today in the Financial Times:
On top of concerns about high oil prices now comes the fear that we have reached "peak oil" and that global oil output will start to decline. Have we? If oil has peaked, do we face a future of growing energy shortages, rising prices and international conflict for supplies?
No one should underestimate the energy challenge. With continued economic growth, the world's energy needs could increase by half within 25 years. Unchecked, this will result in significantly higher carbon emissions. Many scientists agree that emissions from human activities are changing our climate and call for urgent action. The world's energy needs must be met while cutting carbon dioxide emissions.
But where are we going to find this energy? My view is that "easy" oil has probably passed its peak.
This comes on the heels of similar acknowledgements by ExxonMobil, by Bush's Secretary for energy Spencer Abrams, by Chevron and others.
It cannot be considered a secret anymore - everybody knowledgeable is talking about it, and the smarter rightwing think tanks are already working on the topic. In November, I flagged the issue (Let's hurry on energy policy or the Right will get there first), but it is becoming a gathering threat, as evidenced by more prominent articles from neocons or insiders:
America must end its dependence on oil by Robert McFarlane (Reagan's national security adviser) and James Woolsey (director of central intelligence, 1993-95)
A little over a year ago we helped organise an effort among a wide range of groups in the US to draw public attention to the potential for two emerging trends to bring down the global economy. These trends, which affect the price and availability of energy, are the greater-than-expected pace of increased demand for oil in China, India and other emerging markets and the threat of disruption of Persian Gulf supplies by a terrorist attack. They have helped push the price of oil to more than $60 a barrel with forecasters seeing little prospect of it ever going below $50 again.
The sober awakening to these two trends by governments and the oil industry was underscored by a new round in the debate concerning the "peak" of oil reserves - the top of the bell-shaped curve that represents the world's oil reserves and the lower production and higher cost of oil products that lie ahead when the peak is reached. Most experts agree that we will reach the peak within 25-30 years.
Because the impact of growing demand and dwindling supplies is long-term, it is not surprising that there has been only a cautious response to these factors from governments, with no noticeable action. It is less understandable that political leaders from Tokyo to London and Washington have failed to deal with the threat of a disruption in oil flows from the Gulf.
Energizing America by Frank Gaffney (military.com)
Mr. Gaffney formerly acted as the Assistant Secretary of Defense for International Security Policy during the Reagan Administration (...) and a national security legislative aide to the late Senator Henry M. Jackson.
One week from today, President Bush has an opportunity to make a truly historically significant State of the Union address. He can do so by setting forth a program for energy security that will play against type for a man from the "Oil Patch," by charting a course for setting America free of its dependence on oil. The time demands such leadership, the national security requires it and the American people deserve no less.
There are a number of compelling reasons for action: For starters, we in the United States, and the industrialized world more generally, are funding both sides in the War for the Free World. On the one hand, since we consume far more oil than is available here at home, we are obliged to import most of what we need from abroad. As a practical matter that means enriching with wealth transfers those who are the principal financiers of Islamofascist terror -- notably, Saudi Arabia and Iran. And, on the other, we are paying vast sums to protect ourselves against such terror.
(Note the title, which sounds very much like our own Energize America - A Blueprint for U.S. Energy Security (Fourth Draft))
The issue is acknowledged by all insiders. It has become visible to everybody via gasoline prices, higher heating bills, and rampant inflation at home, permanent tension with Russia, Venezuela and Iran on the international scene. Do you really think it won't have massive economical and political consequences?
Nuclear energy
One sector where peak oil (or more precisely, peak gas) is already visible is nuclear energy. Following the natural gas price increases in North America, gas is pretty much dead as a source of electricity - it's not competitive anymore against coal, wind - and nuclear. The recent gas dispute between Russia and Ukraine has reminded starkly those that willfully hid the obvious fact from their consciousness of how Europe is dependent on Russian gas for its electricity generation (Russia is just as dependent on European imports, but that's another story).
Wind power, clean, homegrown and price-competitive, is booming, but the big winners are coal generation and nuclear. The keenness of a number of countries to build new nuclear plants is at its highest in 30 years, and that translates in deals like this one:
Toshiba wins Westinghouse with $5bn bid
Toshiba, the Japanese engineering company, has won the battle for control of Westinghouse, the US power plant arm of British Nuclear Fuels, with a bid of almost $5bn (£2.8bn), more than double original expectations.
Toshiba was competing against General Electric of the US and Mitsubishi Heavy Industries of Japan, and in recent weeks the bidding had grown increasingly fierce.
(...)
When Westinghouse was originally put up for sale by BNFLin July, financial markets expected it to attract bids in the region of $2bn. But the revival of interest in nuclear power, particularly within the Bush administration, made Westinghouse a sought-after asset, and bids soon outstripped forecasts.
Westinghouse, which built almost half of US nuclear plants, and provided the license used to build all of France's nuclear plants, had been the "ugly duck" within various conglomerates in the past 10 years (sold by CBS to ABB, then to BFNL) - but it seems it is no longer an ugly duckling...
Carbon emissions & global climate change.
And before you start screaming about waste, terrorism and unfair subsidies, remember that the only alternative, for now, for baseload power, is coal. And many, including kos favorite Montana Governor Schweitzer, are keen to push coal as a source of clean fuel.
from the Shell CEo article
At Shell we are testing an environmentally sensitive way of unlocking the large potential of oil shale in Colorado using electric heaters to heat the rock formation and release light oil and gas. Coal gasification offers a way of using coal more efficiently, cleanly and flexibly. The resulting "syngas" can fuel efficient combined cycle power plants. It can also be used, with the same technology as gas to liquids, to produce high-quality liquid fuels. The world will need these resources. But they are more carbon-intensive and increase the urgency of finding ways of tackling carbon emissions.
So my vision is for "green fossil fuels" with much of their CO2 captured and sequestrated underground or in inert materials. In the medium term, this could be cheaper, more convenient and more flexible than alternative energies. A typical one-gigawatt coal-fired power plant produces the same carbon emissions as 1.5m cars. China alone is building about 17 of these plants a year. This is why sequestration should be a priority for power plants.
Coal is more plentiful than oil (although a major switch to coal could change that quickly), it's available at home, it's still relatively cheap. But it's incredibly dirty to produce and to use, and it is one of the biggest contributors to global climate change, that other massive challenge for the human race...
Geopolitical conflict everywhere
The USA are the biggest consumer and importer of oil, but China is fast catching up. The biggest oil and gas reserves are located around the highly unstable Persian Gulf. Irrespective of whether it is the main cause of the war in Iraq, oil is definitely part of the background of that conflict, and it is one of the main reasons why anyone cares about what's happening in Iran, like it is the one thing that makes us listen to Chavez in Venezuela or to Putin in Russia. Geopolitics, and the diplomatic efforts of the West, are essentially focused on energy issues these days - because it is the only way most of these countries can reallly threaten us or get us to care.
We waste energy outrageously, and thus they now hold us hostage. We have leverage of a kind over them as well, but it's not a comfortable relationship for either side, with us supporting corrupt and unpopular regimes, and these regimes having to manage a restless, hostile population with acquired tastes for oil-money-provided goodies.
It's a damn unstable relationship, with terrorism just one of its many ugly metastases, and very real wars already under way.
Domestic politics
Which brings us back full circle to US domestic politics.
- gasoline prices?
- Iraq?
- Republicans in cahoots with special interests (BigOil? BigCoal? Military-industrial complex?)
- jobs in energy-wasteful SUV manufacturing companies?
- WalMart and offshoring in China made possible by ultrasubsidized oil-burning transport infrastructure?
- the borrow and squander Bush/Greenspan economy made possible by the obligation for the rest of the world to own dollars to buy oil?
It's all energy-related. You'd better care, it's going to impact you, personally, very soon if it hasn't done it yet.
So bring your ideas for the YearlyKos Energy session, and come and help us draft the next version of Energize America when it comes out under Metoer Blades's name soon.