Energy independence is the wrong goal (Article)

[nmap]

Interesting article, especially with oil at $144.66 today - the author, Andy Grove, was CEO of Intel. The paragraph about conflict seems like an interesting assessment.

LINK (http://www.american.com/archive/2008/july-august-magazine-contents/our-electric-future)

Excerpts:

The availability of petroleum may well determine whether an economy grows or declines. You can see this striking relationship by comparing the rise of China’s economy with the rise in its demand for petroleum. The availability of petroleum can determine employment levels, which, in turn, for a nation like China, can determine national political stability.

As America’s energy situation began to change, so did our official energy strategy. In the early 1970s, President Nixon kicked off Project Independence, defining a national goal in his State of the Union address: “At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving.”

The failure to meet that goal was dramatic.


Oil-producing countries flex their muscles more and more openly. The elections in Ukraine led Russia to threaten to cut off natural gas supplies. The need to secure oil seems to have influenced China’s attitude toward the genocide in Darfur. In Venezuela, Hugo Chávez is using oil to gain political influence in the hemisphere. “The politics of energy is warping diplomacy in certain parts of the world,” said Secretary of State Condoleezza Rice in recent Senate testimony.

And it could get worse. Scratch the surface, and you find that oil has been a major factor in many wars. And it could be again. Today’s relationship between China and the United States, says Henry Kissinger, “is very similar to that of Germany, a rising country at the turn of the 20th century, and Britain, an established one.” Their conflict over resources “eventually led to war.” Listen to Lieutenant General William Caldwell, who heads the Army’s schools and training centers: “We are in a period of time in the world today where there is a shortage of resources.” Because of this, over the next 10 to 15 years, Army Chief of Staff General George W. Casey Jr. says we will face “an era of persisting conflict.”

[GratefulCitizen]

This hits on the issue.

Independence from foreign oil mattered when the USA was the primary consumer.
What matters now is the ability to rapidly adjust to price and supply shocks.

Encourage oil exporting countries to send their oil here, let's just make sure that supply interruptions and price spikes can't be used as diplomatic hammers.
Using less oil in this country amounts to a price subsidy for oil to other countries.


CAFE standards need to be junked. They're barking up the wrong tree.

Rather than mandating consumption limits, encourage flexibility.
Require all new cars to meet certain minimum standards for dual fuel/power capability.
But, instead of being overly specific, allow a range of options.

For spark-iginition engines, allow the dual-fuel requirement to be met by combinations of liquid hydrocarbons, electric (plug-in), gaseous hydrocarbon/hydrogen, methanol/ethanol, etc.
For compression-ignition engines in vehicles under 26000 lbs GVW, require true multi-fuel capability.
(Diesel, gasoline, kerosene, JP-5, vegetable oil, distilled turkey guts...)

Let the market decide which combinations work best.
(This also means refraining from subsidies/tariffs for ethanol!)

It's important not to require fuel consumption standards.
Engineers need some wiggle-room to develop the necessary technology and manufacturers need to be able to make products which consumers desire.
Emissions laws should be revisited with the goal of maximizing thermal efficiency within tolerable emissions limits.
Having a lower rate of emissions doesn't help much when you just burn more fuel to compensate for the created inefficiency. :rolleyes:

If the gov't wants to mandate efficiency, then actually mandate efficiency, not consumption (CAFE).
Go ahead and require a certain level of thermal efficiency in new engines.
If the fuel is going to being burned, just make sure it's being used to accomplish something.

Automatic transmissions should be taxed as a luxury item.
Hang up the phone and drive.


The main point:
Congress should quit trying to mandate results.
Rather, it should encourage the necessary technology and let the marketplace take care of results.

[nmap]

The main point:
Congress should quit trying to mandate results.
Rather, it should encourage the necessary technology and let the marketplace take care of results.

Well said and true!

[bailaviborita]

This hits on the issue.
The main point:
Congress should quit trying to mandate results.
Rather, it should encourage the necessary technology and let the marketplace take care of results.

Both posts very interesting, thanks.

I've heard some critisizm over Brazil's "flex" system and how it wouldn't work for us. On the other hand, I've heard that if only Congress would let Guatemalan and Haitian farmers sell their sugar here, we could do the flex thing better, since sugar is more efficient than corn. Any opinions on those ideas?

[nmap]

Both posts very interesting, thanks.

I've heard some critisizm over Brazil's "flex" system and how it wouldn't work for us. On the other hand, I've heard that if only Congress would let Guatemalan and Haitian farmers sell their sugar here, we could do the flex thing better, since sugar is more efficient than corn. Any opinions on those ideas?


Yes, Sir. I did some quick calculations; you might find them interesting.

A barrel of oil is 42 gallons.

Total global sugar production is: 161.7 million tons ( LINK (http://www.fas.usda.gov/htp/sugar/2008/World%20Sugar%20Situation%20May%202008%20.pdf)

One ton of Brazilian sugar cane can be concerted to 152 gallons of ethanol. For this calculation, assume similar efficiency without regard to origin. LINK (http://seekingalpha.com/article/73111-the-long-case-for-sugar-based-brazilian-ethanol-producer-cosan-limited)

So, we have 152 X 161.7 X 1,000,000 = 24,578,400,000 gallons of ethanol.

Total global production of crude oil is 85.54 million barrels per day. LINK (http://www.eia.doe.gov/steo)

So annual crude oil production is 85.54 X 365 = 31,221.1 million barrels per year.

Or:

31,221.1 X 42 = 1,311,328.2 million gallons per year

Or:

1,311,328,200,000 gallons per year

Dividing the two numbers,

Global sugar production converted entirely to fuel would equal less than 1.9% of the total.

It can be argued that diesel and gasoline consumption are only a portion of total crude oil consumption.

A 42 gallon barrel of crude, after processing generates 44 gallons of product, including 20 gallons of gasoline and 7 gallons of diesel. LINK (http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/oil.html)

Ratio of Gasoline and Diesel to barrels of crude oil: 27/41 = 0.61

So the total gobal production of crude times the ratio hints at global consumption of gasoline and diesel.

Global fuel consumption = 1,311,328,200,000 X 0.61 = 804,679,000,000

If we convert all global sugar production to fuel, we get:

24,578,400,000 gallons of ethanol

divided by

804,679,000,000 gallons of gasoline and diesel consumed

Or...slightly more than 3%.

Cane ethanol may help Brazil, but it won't do much for the world.

By the way - if peak oil theory is correct, we will, within a decade or so, start seeing declines of 4% or more each and every year.

Hence my conclusion - biofuels won't solve the problem.

[bailaviborita]

Well- at least it would put a dent in America's waistline...

Or does sugar have all kinds of products it goes into like corn does and would thus cause higher prices in all kinds of products?

I also heard it would be bad to go to sugar since that would end up getting more rainforest cut down...

[nmap]

Or does sugar have all kinds of products it goes into like corn does and would thus cause higher prices in all kinds of products?


I don't know, Sir.

My impression - although I cannot prove it - is that sugar cane would displace less profitable crops and lead to an indirect price increase.

[GratefulCitizen]

Both posts very interesting, thanks.

I've heard some critisizm over Brazil's "flex" system and how it wouldn't work for us. On the other hand, I've heard that if only Congress would let Guatemalan and Haitian farmers sell their sugar here, we could do the flex thing better, since sugar is more efficient than corn. Any opinions on those ideas?

Many vehicles in this country are already E85 capable.
My wife's van is 10 years old and can run on E85.

Congress is preventing foreign ethanol from being competitive in order to allow domestic farmers to take profits while they can.

IMO, the price of fuel will drop to a level which prevents profitability in ethanol.
Meanwhile, politicians are just spouting platitudes and waiting to see if the market will address the oil problem with convenient timing.

If the market is too slow, politicians will use crisis as an excuse to pay back their benefactors (ethanol subsidies...) and/or grab more power (taxing/rationing schemes).
If the market is fast enough, they will scramble to take credit for the results.
(threatened to nationalize the oil industry, voted for 55mph speed-limit, foreign policy votes concerning OPEC members, voted for opening up drilling, etc.)