Tuesday, March 29, 2005

Energy: Crisis of Dependency

Editor's Note:The following is a paper by Kyler Robinson. The footnotes are not included but can be obtained by e-mailing rskiff@vermontcommons.org for a complete copy.

In the most recent years we have seen oil production increase rapidly at nearly the same rate as the growing demand. Oil is obviously the most widely used form of energy as it propels nearly every economy. There is thus an intricate link between oil and economy growth. Without energy, markets will not grow. Oil has also become a hot topic given the war on terrorism that surrounds the Middle East who has around two-thirds the total oil reserves in the world. By several accounts their oil reserves are much lower than posted and the world is headed for an oil peak within the next decade or as soon as a year. While there are many studies finding that oil is going to peak soon, or that oil will peak in over a hundred years, it seems clear that our basic understanding of the world with current technologies is far to great to fully comprehend. While it stands clear that oil is a finite source of energy that can be used up, energy policy has proven time and again that it is the market that drives energy trends. It is therefore most important that the market has multiple opportunities for new technologies so that any imminent threat of a decrease in energy production can be averted. Foreign oil is only going to be a possibility for a set amount of time. While scientists may argue over how long that time period is, the economy must turn itself to more renewable sources of energy, not solely because of sometime in the future, in order to have more control over their energy: the most important part of any companies foundation.

The rise of the dependency on oil can be chronicled with the rise of the industrial revolution and, in America, the rise of suburban lifestyle that is supported by industry moving throughout the country. While the documentary film “The End of Suburbia” discusses how suburbia has increased the need and use of oil, for commutes and to provide electricity to “McMansions,” the rise of oil also has a lot to do with the United States’ Military. Perhaps the most important part of a military is to have the energy to run it. This comes not only in the form of troops, tanks and bombers but also the fuel that is needed to keep them going. In the current war in Iraq, each Abrams M1 tank requires its own fuel truck to tag along while the fighter jets above burn through thousands of gallons of jet fuel each mission time they go on a mission. We also see that the military was a main part in the case for an interstate highways system that indeed encourages the type of urbanization and suburbanization sprawl that tends to follow interstates. With the military being a large consumer of oil it the rationality for controlling the Middle East becomes much more important in our foreign policy regardless about the politics surrounding the invasions. It is clear that this is very important for the future of the United States in that it gives us the upper hand when it comes to supply, mainly against the rising demand by China and India, so that the U.S. controls the source of power. Thus by squeezing a country out, they are unable to fight to control for more. However this oil still remains in a foreign country, but the principle of control remains the same.

While this is a rather cutthroat concept, control of ones energy is a necessary component to a successful system that is independent from other countries for its most basic necessity: energy. Though the last seven presidents have maintained that they will ease dependence of foreign oil, their energy policies have been largely ineffective in the main problem. It is instead the market that controls the trends as we have seen during these presidencies and it should be assumed that either radical new policies, which would most likely hurt the country economically term, or coerce the market into a better independence. Like the military controlling the Middle East oil for their energy companies should look to producing their energy at a much more local level by various renewable sources of energy. With or without the so-called oil peak, dependency must stop allowing them to cut down on bills that tie them to a currently unstable energy market so that their future does not depend on the cost of building their product. Even in a limitless oil supply, any interruption or price hike by OPEC means lower profit margins for millions of companies and economic devastation that often has led to recessions. In a market place with millions of companies, worldwide, it is appalling that “fewer than 500 global companies control most of the economic activity.”[1] By this pure fact it should be the obligation of these companies to each produce enough energy within their region to power their company forward.

Yet a switch as I suggest is not an easy concept to realize. Today there are many different renewable energy sources that are being debated, everything from hydrogen fuel cells to methane gas from corn and also more familiar sources of energy such as solar panels and windmills. How can one sort through these technologies and decide what is going to be the most advantageous? And how do you force a company to adapt when so many energy policies have failed? These questions are critical for anything to happen concerning the energy crisis of dependency on the Middle East. As I previously stated it should be the obligation for all of the big companies to reduce their use of oil by making guidelines for a certain percentage of total energy to be produced onsite or locally using renewable resources. Large corporations always have a business agenda and by having a quota to gently ease them off of oil and become dependent themselves the battle between the types of energy will be highlighted and better understood. Today many of the technologies are only affordable by the very wealthy and many of the nicest homes have been retrofitted with the latest technology to be self-sufficient. The reason isn’t about being a green friendly person when you are the person buying the $45 million dollar property[2] recently sold in the Hamptons with an 18,000 square foot main house that featured some of the latest energy smart technology. With the recent price hikes and blackouts it comes down to being independent for many of these people never even see their energy bill. In the same way that the rich are plunking down tens of thousands of dollars to become independent, so must companies. With a mandatory self-powering requirement, these technologies will become more competitive and at a lower cost as they now are part of this required sufficiency plan. Thus like many of the formerly expensive industry technologies, the average person will also be able to access and implement these technologies thus making the entire region more self-sufficient.

Enforcing this is of course essential to the success of such a plan. While many policies such as the Kyoto Protocol are good for some but not advantageous for the entire economy, competition with China being a key reason that the US didn’t sign on, there needs to be a cost-benefit supplementing the independence that economy will have. Why isn’t self-sufficiency enough? Because companies and people require incentives and reasons for drastically changing their current practices. Of the many ways to make sure that people follow guidelines of a self-sufficient energy society, the Department of Energy must be bolstered in terms of budget and manpower in order to maintain and help the switch. A step up program of percent dependency must be aligned with a multiple strike rule and hefty fines that after so many times results in large payouts and the risk of being shut down. It must be recognized that this is a plan that is not made by none-committal environmentalists and instead businessmen who want to save the economy billions over a period of time. It is important to stress is that this is not about a possibility of the oil running dry, however by this scare is a way to market the problem. As with the deforestation in Europe as they switched to coal and then oil and out of pure scientific standpoint, things change for survival.

As with many things, there are multiple answers for what energy source to turn to depending on the location. Windmills won’t work where there isn’t wind just as solar panels are useless to Alaskans in the middle of winter. Instead using different technologies catered to the given area is important. Solar panels work by collecting energy from the sun and extracting electrons from the radiation that allows this electricity to be used. The sun’s energy is one of the very few things that enter our ecosystem called earth and everything was impacted by it. While we use a very limited amount of the energy, its light, the other energy potential is enormous and after the initial set up cost minimal maintenance is needed. Because they have been used for a comparative long time the prices range from under $600 to over $30,000 for a single panel. Wind power is also a viable and old technology that has been used for many years. On the previously mentioned $45 million dollar home, they used a new heating and cooling technology called geothermal heating. The basics of the system (see figure below from http://www.waterfurnace.ca/Howitworks/cooling_system.htm) for cooling involve hot air from the building to be pushed in a cooling refrigerant area. Water is pumped deep [3]into the ground where it is naturally cooler and then brought to this area to cool down the air. The newly heated water (from the air) may then pass back into the system or some may be used to heat water for the house. This system is quite a brilliant use of the energy that is stored in the ground and cuts down the use of other energy for cooling, plus it has the added benefit of not requiring unsightly air conditioning units.

Perhaps the most exciting technology that will appear in coming years is hydrogen. “Hydrogen is the lightest and most ubiquitous element found in the universe. When harnessed as a form of energy, it becomes ‘the forever fuel.’ It never runs out, and because it contains not a single carbon atom, it emits no carbon dioxide” such as burning fossil fuels. The first step of a hydrogen economy are already coming as BMW has committed to producing a hydrogen version of their flagship sedan, the 760Li, whose V12 engine will be able to run on either gas or hydrogen. In a partnership with several other companies including General Motors and several oil giants they look to a hydrogen future. BMW argues that using energy from solar technology to in the process to get hydrogen, it becomes clear that this is a very good energy carrier. It is a very exciting and viable renewable energy source with water being its only byproduct. With their pledge for bringing hydrogen powered car to market within the current generation’s lifespan, comes experience with hydrogen from their first hydrogen-powered concept in 1979 up to last year’s hydrogen car that set nine FIA-certified worldwide records[4]. In addition their partnership has created several hydrogen fueling stations throughout Europe. While BMW focuses on hydrogen used through a combustible engine, allowing for backwards compatibility with gas, many other companies focus on hydrogen fuel cell technologies, which converts the energy stored in hydrogen into electricity to power an electric motor. While hydrogen represents a great future there are several strong disadvantages to it such as liquid hydrogen, one of the forms to store it, requires temperatures of 423 degrees below zero and the fact that each pound of liquid hydrogen requires about six kilowatt hours of electricity, with current technology a coal plant would produce the same amount of pollution as gas.[5] Thus hydrogen cannot be the soul solution as it is an energy carrier rather than a straight source, such as gasoline. Instead it must accompany other technologies such as wind and solar power. In future years and with a competitive market, it should not be unrealistic to expect another mass producer of energy to arise and trump all current technologies. Although the hippy-movement has cast a bad light onto nuclear power plants, they serve their purpose of generating high levels of power although uranium is still a necessary resource for their energy.

Another facet to smart energy is using more efficient products. In the Department of Energy’s recent press release they honor fifty companies that during the past year alone have saved consumers $10 billion dollars through their Energy Star program.[6] This is a powerful example of how energy reduction, with still good quality products, can save the consumer money. Paired with renewable energy, this dynamic duo will not only save consumers money but also reduce the dependency of on foreign fuels.

While there are more possible energy sources for the future the energy crisis is a crisis of our dependency on foreign oil. As prices become unstable and the rich turn to self sufficiency so must the rest of the economy starting from the top, the corporations, and then leading down to lowered prices that the average consumers can buy. This dramatic change will reduce our dependency on foreign regimes in an area of the world that dislikes us and most important gives us the ability to have a greater control of our domestic economy. This is a revolution that has all of the requisite benefits: a greater control of our economy, less dependency as a nation, less pollution, and cleaner energy. Oil was great for a period of time, but the era of oil is over, it stands clear that a competitive market with government support is necessary to fix a problem that has gotten worse and worse each year. A renewable economy allows for infinite growth and positive feedback from the environment and stability for society. It is thus the responsibility of this super-power nation to take the first step of dependency allowing so many positive products to arise as well.


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