ENERGY: THIS RANGER’S VIEW

6. June 2008 by Ranger.

Energy costs to the consumer, and the concerns for the environment associated with the acquisition of the sources to produce the energy necessary for industrial production of goods, farming, and the maintenance of human populations is now, and will be more so in the near future, a global issue impacting industrial development progress, food production, transportation of people and all goods, natural resources, and human populations in every country of the world.

The entire world, except for Venezuela, Saudi Arabia, Kuwait and a few others that are living over a sea of oil, are suffering with escalating fuel prices that are changing the life styles of people around the world, and driving up the cost of all goods, food, and services. Up to this point in time there have been a few protest demonstrations principally by truckers, but a steady decline in the availability of many food items, and serious riots are possible in the not too distant future as transportation costs continue to rise. American farms are instrumental in supplying wheat and corn around the world, but the quantities for export are being reduced by the rush to plant crops that will be used for ethanol production. That adds to the rising cost of field crop foods as the lands that formerly produced food are planted to produce ethanol. As I write this, a gallon of gasoline in American dollars in Turkey is $11.82, in France it is over $10, in the United States the price ranges from approximately $3.89 to over $4 a gallon. Around the world the price per gallon of gasoline is somewhere between $4+ to over $11 in American currency.

The economic impacts of high fuel prices are having a greater effect on less affluent countries, particularly in the developing world, which have less discretionary income. Food riots have already occurred in several places around the world. Some countries have imposed food price controls. If this economic crisis continues to escalate it could lead to starvation on a global level.

There are many factors contributing to the rise of oil prices. In late 2006, the price of a barrel of oil fell from $75 to $60, and the prediction was that the price would continue to fall. Major oil producing countries therefore avoided digging new wells since the mid 1980’s, when energy conservation drove down the price of oil. Their goal was to reduce supplies, which would increase demand. Terrorists and wars in the Middle East contributed to decreased imports. Terrorists and insurgent actions have increasingly targeted oil and gas installations to maximize their impact for political gain.

Most oil experts agree that the lighter sweet crude oil is far less available, and in the future the world will be more dependent on more expensive sources of heavy oil, which are available in quantity such as the massive Canadian tar sands. These are, however, a far less cost efficient source of heavy, low grade oil. The cost of production requires that the cost per barrel remains high. Years of poor leadership, short-sightedness and inaction by America’s lawmakers have contributed greatly to the situation all Americans are now experiencing, and it will get much worse before it has a chance to get any better. However, any improvement in the United States laws and development of new sources for oil production would take at least ten years or more even if our lawmakers agreed that solving America’s energy crises was the highest priority of our government.

So far I have only touched on some of the reported problems that contributed to higher oil prices and the effects on world economies, but what are the real issues at the center of the rising cost? How have OPEC, oil speculators, China and India, past and present American Presidential Administrations and Congress contributed to the crises?

OPEC has controlled a major portion of oil that goes into the world market, which creates a supply and demand problem that speculators are pleased to sell to the highest bidder. This creates a “feeding frenzy,” and a constant fluctuation in rising prices. Any excess oil that is available is easy to sell at high prices on the open world market, and China and India are eager to acquire it at any price.

During the time of the “Greatest Generation,” our government funded and organized scientists and civilians in a massive effort of American leadership and ingenuity to build the atom bomb and end World War II. Similar American leadership and ingenuity was demonstrated again under President Kennedy in the 1960’s that put Americans on the moon in a few years after President Kennedy funded and instituted a program to create more scientists and engineers.

We are now facing a world energy crisis that leaders should have known was coming since at least 1973 (remember the oil shortage and the gas lines). Some futurists knew an energy meltdown was inevitable long before that fuel shortage, but no administration from 1973 to the present, nor seated congressional leadership came forward with a program to fund research for private scientists and engineers to seek energy breakthroughs for America’s future. Ignored were the serious massive research of alternative sources and technology, additional refineries, oil developments and discoveries that we would need in our future for cleaner coal fired electrical plants, transportation (electrical or hydrogen vehicles and national railroad improvement), solar, hydrogen, wind, nuclear research or oil discoveries and refineries that would be required in the years ahead. What happened to America’s “can do” attitude?

It is even worse than just being inattentive and incompetent. Congress and past administrations have been actively at work purposely raising energy prices by preventing access to oil reserves, and encouraging ethanol production which increases greenhouse gases, reduces gas mileage, and converts food crops to fuel, which increases the cost of food and contributes to instability in lesser developed countries. It is estimated there are at least 402 billion barrels of oil that exist within America’s reach off the coasts of the Atlantic, Pacific, the Gulf, ANWR, the Colorado Plateau and other inland sources, but Congress has consistently declared the areas “off limits” to drilling. While Washington has prevented oil and gas exploitation off the coast of Florida, China is currently drilling for oil just 45 miles off the coast of that state.

Currently, either the desire to support their party at all costs to the country in order to increase their party’s chances of securing the presidency in the coming election, or the fact that congressional members are naively uninformed is making matters worse. The Democrats are claiming the oil companies already hold leases on 68 million acres of inland sources for oil. Democratic members of Congress constantly appear in the media asking the question “Why would the oil companies need more sources, when they haven’t drilled the acreage for which they currently have leases?” They, and you, should understand that when the oil companies bid on those leases they do not necessarily know there are proven profitable oil reserves under the ground. Further exploration and testing is required to determine if oil is present and in what quantity. You can be sure that at the current world prices per barrel, if it is there and profitable to extract it, the oil companies would be drilling for it. Instead, the Democrats would have you believe the oil companies are setting on it and waiting for some higher price of oil before drilling. At $135+ per barrel, that is an unbelieveable political lie to focus attention away from their incompetency and party unity as opposed to concern for America’s future.

The Republican Party candidate, John McCain, is also playing politics with the oil crisis in order to gain favor with the independent voters and the moderate Democrats in the coming election. McCain is opposed to drilling for oil in ANWR and equates that with drilling in Grand Canyon or the Everglades, which is an assinine comparison. Recently, he modified his position on drilling off America’s coasts, but buffers that “flip flop” of position by stating that the adjacent states must approve any such drilling.

Both parties are playing heavy duty politics at the expense of Americ’s future energy needs that can lead to economic chaos.

If we had a serious and sincere holistic energy policy incorporating research and development of all potential sources, the reserves of oil off America’s coasts and the “off limits” inland sources would significantly reduce our dependence on the 60% of foreign oil we import (and pay an enormous price for), and give America some “breathing room” to develop alternative energy sources that could reduce our nation’s oil and gas consumption. Without such a program there will be a serious degradation of the American lifestyle, and eventually riots in our major cities when the truckers can no longer afford to deliver food supplies, or the cost of those supplies in stores is too high for many people to afford them. In parts of the world there will be massive starvation, which could lead to conflicts and wars.

Time Magazine recently reported our government’s budget for all energy research including nuclear, wind, coal, solar and biofuels was $3.2 billion in 2006. The Pentagon spends that amount in a week! One of the proper functions of government is to create programs, laws and funding support to solve national problems such as Franklin Roosevelt did during WW II, and President Kennedy did to place Americans on the moon and become a leader in space exploration in the 1960’s. Since the early 1970’s that type of leadership and support has been extremely weak or absent. Instead, congressional emphasis has been to create laws that require ever increasing lower emissions and higher fuel mileage from automobiles, lower emissions from industrial plants and coal fired electrical plants, and generally force the industries to perform the scientific research and engineering necessary to meet those congressional requirements and stay in business. Additionally, by placing most of our known oil reserves off limits from exploration, and not encouraging research for all forms of new energy resources through adequate funding; our lawmakers have contributed to the escalating price of all forms of energy.

It is not realistic to think that many energy producing industries would be highly motivated to spend billions of dollars on research and developing alternative energy sources that might put them out of the business they are currently in. It is true that some corporations are investigating various alternative sources, but that is not their prime business. Adequate government funding of universities, private researchers, and those interested in new energy technology might have made a significant difference for the crises we are facing today if they had been at it for the past 34 years (1974-2008).

Brazil, a country that has been running on ethanol, has recently announced their discovery of 5 to 8 billion barrels of offshore oil, and in the pre-salt coast a much larger field containing as much as 80 billion barrels of oil. Producing ethanol from sugar cane as they do in Brazil has worked quite well.

The issue of biofuel production on a large scale in America and around the world is fraught with problems. The cultivation, production and use of biofuels on a local level might work in some areas of our country, but converting sunlight into ethanol is extremely inefficient and is questionable land use. It would require extremely large quantities of land be taken out of food production or natural area lands be converted for the production of biofuels, which raises a different set of problems causing higher food prices, reduced food exports, a release of carbon from the natural land clearing and could contribute to starvation in some parts of the world. A Princeton study in 2008 found that the production of corn-based ethanol nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years. Previous studies excluded the emissions from land-use change, where carbon storage and sequestration would be sacrificed by diverting land from existing uses. Conversion of cooking oils to biodiesel is practical, but not a complete answer to the needs of America, and certainly not the world.

Of course the reason for the limitations of air polluting industries, prevention of drilling for oil reserves off the U.S. coasts, and virtually no movement to nuclear energy for electrical production in the past 28 years are environmental concerns. World concern over greenhouse gas of excess carbon dioxide and the dangers of transporting and storage of nuclear wastes essentially has our congress hostage. One Senator on June 6, 2008, exclaimed that the “Senate is fiddling while the country heats up.” The Senate has effectively killed the Global Warming Bill, which was simply another bill designed to place further limits on industries that produce greenhouse gases, rather than a holistic energy package of research into hydrogen, solar, electrical fuel cells, wind generation, wave generation, allowing the drilling for off coast oil reserves, and technology research for cleaner burning coal plants. Our fuel producing companies haven’t built new American refineries for many years. That is a separate problem, because many states have different gasoline formulation requirements, and the current refineries cannot keep pace with the demands for so many formulations. This problem is compounded from winter to summer, and whenever there is a storm, like Katrina, that shuts down some of the refineries. As far as I know, Congress has never addressed this manageable problem. We shouldn’t need an excessive number of fuel formulations to run America’s automobiles.

Global Warming or is it Climate Change?

Is there global warming? Yes, I believe there is currently some global warming. However, there has also been global warming on Mars and Jupiter during the same time period. Earth has been heating and cooling throughout its existence. The big discussion today is global warming, and “doomsday” is ahead if we don’t limit the production of carbon dioxide world-wide. Carbon dioxide had increased to 0.038% from 0.028% prior to the Industrial Revolution. Interestingly, the average temperature of North America was 0.5 F. degrees higher during the period from 1900-1940, when there were far less emissions of CO2. In the 1970’s, for those of you that might remember, the “doomsday” prediction was another ice age is in progress.

Peter Gwynne of Newsweek wrote in 1976: “There are ominous signs the earth’s weather patterns have begun to change dramatically and that these changes may portend a drastic decline in food production – with serious political implications for just about every nation on earth. The evidence in support of these predictions has now begun to accumulate so massively that meteorologists are hard pressed to keep up with it.”

Numerous such stories were printed throughout much of the media warning of the coming “ice age.” Earth had gone through such a “Minnie Ice Age” from the 1700’s to the mid 1800’s, and thousands of people starved to death in Europe because of crop failures.

I believe the excessive production and release of carbon dioxide into the earth’s atmosphere can be a cause for some temperature gain. I also know that commercial growers utilize carbon dioxide to increase plant growth, because it is an important part in photosynthesis to produce sugar for the growth of plants: (6H2O + 6CO2—in the presence of sunlight—C6H12O6 + 6O2). What I do not know, and I am convinced no one on the planet knows absolutely, is that people are the primary cause for the current global temperature change that warrants further laws which will further drive world economies down as energy costs are escalating. Recently some 31,000+ American scientists sent a signed petition to the government exclaiming they did not believe that Al Gore’s movie was accurate, or that man was the central cause of global warming.

Cutting the carbon dioxide production to be safe, in case the computer models are correct, is a reasonable approach, but it is not cost free. And, during this period of rapidly rising oil prices, it could lead to economic disaster. Economic poverty would be rampant in China and India if they agreed to limit their CO2 emissions. However, there is virtually no possibility that neither China nor India would agree to halt their CO2 production.

Nuclear Energy

Believe it or not technology has advanced where there are adequate methods to safely handle and store nuclear waste. Likewise we have the capability to safely build and operate nuclear power plants. America has numerous ships safely operating with nuclear power, but our citizens only remember Chernobyl in Russia and Three Mile Island in Pennsylvania. Our congress and the courts have prevented the use of nuclear energy to be utilized in the United States for four decades, and here we are in an energy crisis that is escalating the price of oil almost daily, putting untold pressures on low income citizens to maintain a comfortable home heating level in winter, and increasing the cost of all forms of transportation which deliver people and supplies that serve our citizens.

Other areas of the world have developed their nuclear energy capabilities and are handling the nuclear wastes in a process call calcination. In 1996, the U.S. opened a waste processing plant in Aikens, S.C. at the Savannah River nuclear weapons complex. The waste is converted into cylinders of radioactive glass, which is then encased in steel containers and stored in an underground concrete vault. The glass is still radioactive, but it is no longer possible for the waste to leak into the soils, and there is no possibility of a chemical explosion.

Conclusion

We are headed for some tough times ahead because of the lack of leadership and consistent congressional failures. Their priority interest in putting their party ahead of the best decisions for the country, and  their prime concern for re-election are the reasons we are in the mess we are in today. Not drilling is a luxury we are unable to afford. Not having a concentrated effort on all fronts to develop alternative sources of energy is imperative to the future of America. Even if congress were to make energy their single most important priority, the years ahead will not be fun. It will take too long to recover to some level of normality.  Plan accordingly.

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