Thursday, June 26, 2008

The start of a real energy plan for this country

I blog about Oil a lot because it's what runs the economy. I don't have anything directly to do with the oil industry anymore, but it's the foundation of American wealth. Read The Prize to know what I mean.

Four dollar a gallon gas is getting a lot of people steamed and I don't see many worthwhile ideas out there, so I'll throw out a few I think will work. All are based off current technology and have the most bang for the buck.

Here is what I think is the first step towards a real solution on energy. A lot of it comes from The Oil Drum and a local light rail proponent named Alan Drake.

First off, what we're dealing with is a result of supply and demand. Quit blaming the speculators or environmentalists. The crisis isn't going to go away anytime soon, either. Get used to it. 99 cents a gallon is never coming back. Prepare for a long, painful slog. There are no golden bullets that will solve the problem, but there might just be a few silver BB's out there. UPDATE 2- I think the market WILL come up with a solution. You just might not like it. Therefore, we should try and make the transition on our terms instead of having it forced on us. You have the luxury of complaining when there are options. Don't expect too much sympathy when we run out of options.

My first suggestion is develop a worldwide database of inventory and consumption data. Real time, streamed over the internet, if possible. Most oil pricing is done by the EIA calling up refineries around the US and figuring out what % output they are operating at, coupled with their inventories. Let's replicate this on a global scale. Markets thrive on information. More information will smooth out the peaks and the valleys. This will take a lot hand holding because, while everyone wants the data, but nobody want to reveal anything potentially embarrassing or giving a competitor an advantage.

Second, go electric rail. Electric, long haul freight can replace millions of barrels a day we burn on running 18-wheelers. Also, electrified light rail (like streetcars) should be built in a massive infrastructure build out akin to the original interstate system. An integrated system of streetcars and "inter-urbs" would cut demand by millions of barrels. Also, it's established technology that can be built surprisingly quickly (look at the streetcar boom in New Orleans and elsewhere during 1900-1910). Make the federal/local contribution level 90/10 for light rail and 50/50 (or 40/60, etc.) for highways and watch the transformation take place. UPDATE 2- Here is a white paper written by Alan Drake breaking the problem down.

Shrink cities. Eliminate mortgage write-offs for suburban houses too far away from the core. Turn old suburbs back into local farms for city.

Allow people to avoid rush hour traffic. A Prius gets 0 MPG stopped in bumper to bumper traffic. Wherever possible, allow 4 day work weeks. Encourage businesses to allow more workers to telecommute, at least on some days. You'd be surprised how many jobs could be shifted that way. You'd save another million barrels a day just keeping people from getting stuck in traffic.

Revamp refineries to process heavy crude. (Already happening in Texas and new refinery in North Dakota). Most of the new production will be heavy, sour crude instead of light, sweet crude.

NO MORE WARS! Nothing will drive up the price of oil like another resource war. Iraq has totally discredited the idea you can use the military to acquire more oil. There are too many things that can go wrong and oil supplies are too easy to sabotage (Saddam injected fuel oil into Rumalia to screw up US).

When it comes to ANWAR and the Outer Continental Shelf, drill them as late as possible, while still having existing infrastructure there to support it. Wait too long, must rebuild Trans Alaskan Pipeline System. Too soon is a complete waste. Should be used as "methadone" to get us off of our addiction, instead of feeding the habit. It will also shut up the "drill ANWAR and solve all our gas problems" buffoons.

My favorite idea: $1 a gallon gas tax, but $0.75 goes back in the form of a tax break. The remaining $0.25 is for electric rail and other mitigation strategies. $1 a gallon for 1,000 gallons a household (diesel + gasoline). Bump it up $0.33 cents every 4 months, with a $250 rebate sent each boost. Numbers are a bit rough, but I think they're in the ballpark. Encourage people to take the initiative. Encourage individual responsibility.

All of this is to be done with established technology. No "golden bullets." Put money into research, but there's no way to tell exactly what might come out. Remember, Penicillin was an accidental discovery. The first diesel engines were novelties that ran on peanut oil. No way to tell exactly what might happen. Best course forward is to encourage scientific thinking in everyone, not just scientists and engineers, but laypeople as well. Who knows? We might have a breakthrough in cold fusion or zero point energy. Don't bet the farm on it, though. The Manhattan Project was the exception, not the rule.

NOTE- I plan on adding links and fleshing this out later. It took a while to write, so I'll just throw it out there and worry about backing up specific points later. If you think part of it's bullshit, let me know and I'll get around to that specific part sooner rather than later.

UPDATE 1- Oops. Forgot to mention insulation of homes. $2500 to add insulation to an existing home has a ridiculously low payback period (2-3 years) and is your most bang for your buck.


Anonymous said...

And we have to drive smaller cars like in Europe where gas is 8 dollar a gallon. But in NO we would have to raise them so we could get thru the waters of a heavy rain. And we need bike paths and encouraging people to ride. I think we are one of the fattest cities in the country and with our flat landscape, biking would be ideal for people to keep in shape. And walk more. Don't wait for the space closest to the grocery store or mall. Take the big one a few more steps away. We will tumble to these things naturally if the predictions of gas prices come true.

Anonymous said...

Wait, I thought the solution was gas tax holidays, windfall profits taxes and drilling everywhere all the time?

Anonymous said...

And what about HEMP? Industrial HEMP can replace fossil fuels 100%. Don't believe me? Do a google search on "hemp" and "petroleum". You'll be amazed at who all badmouthed Cannabis and all the vested interests who worked together to ban the plant. It's the best cash crop that can be used for 26000 industrial uses. It is no coincidence that America fights wars for oil all the while banning the best and harmless source of oil and heeling for all of mankind for the past 70+ years.

Clay said...

Hemp isn't the solution to our oil addiction.