Killer Politics Page 10

  Let’s talk about energy. I said in a previous chapter that we all pay taxes that subsidize military involvement in getting oil from the Middle East. One estimate is that our actual cost per gallon of gas is closer to $10. Our latest incursion in Iraq may eventually cost us $3 trillion, according to economist Joseph E. Stiglitz, yet consumers didn’t save money. Prices at the pump hit $4 a gallon on Bush’s watch. The American taxpayer got it coming and going.

  America imports 70 percent of its oil—somewhere around 10 million barrels per day. About 5.5 million barrels a day comes from OPEC (Organization of the Petroleum Exporting Countries) nations. Most of the balance comes from Canada and Mexico. Ominously, according to Merrill Lynch, non-OPEC production has probably peaked to about 49–50 million barrels a day, and could slide to 47 million barrels a day by 2015. OPEC, which closely manages output, has been pumping around 30 million barrels a day.

  In the immediate future, petroleum is going to continue to play a big part in the energy picture. As a country, we are addicted to oil, much as a junkie is addicted to heroin. The difference is, when he knocks down someone’s door to feed his habit, the junkie doesn’t have an army. (Please, let’s not even argue the point that our interest in Iraq was about oil. If our goals were humanitarian, we would have been in Somolia, but their main cash crop is bananas, and we’re not addicted to bananas.)

  The problem is not just our junkie-like behavior; it is that there is another energy junkie in the neighborhood with a growing habit—China, which consumes about 7 million barrels a day and is getting thirstier by the minute.

  For the first time in history, in 2009, Chinese domestic auto sales exceeded those of the United States. All of those vehicles are going to be burning gasoline.

  Competition for oil forces prices upward, as it does any commodity. That’s exacerbated by speculation and market manipulation. But while the global thirst for oil is on the rise, most experts say production has peaked.

  I don’t know what happens when two desperate junkies are in the same room with the last needle full of smack, but I can predict what will happen if China and the United States get to that point. Geopolitics is one giant chess game, with countries continually positioning themselves to their best advantage. When it comes to the politics of oil, a finite resource, that chess game has already been lost. No one is going to win, but the longer we play, the better chance there is that the board will be overturned as fists begin flying. Both our economic and ecological salvation rests in our ability to go green.

  Getting more than half of our oil from OPEC is not a good business plan. These people are not our friends. In 1973, they turned the spigot off and sent shock waves through our economy, though we were only importing 15 percent of our oil from OPEC then as compared to more than half today.

  First things first—let’s stop doing business with OPEC as soon as possible by conserving, developing alternative energy sources, and producing more domestically. Because petroleum is used to make so many things—imagine if every bit of plastic suddenly disappeared from your home—it will play a role in our foreseeable future.

  To wean ourselves from oil, we have to conserve, become more efficient, produce more, or simply do without. It’s important that we subsidize alternative energies when necessary to ensure they have a fighting chance economically against the existing petro-economy, which, as I have noted, is surreptitiously underwritten by the muscle of the U.S. military. Ultimately, though, new technology has to make sense to the marketplace while meeting pollution standards. One thing we know for certain: The petroleum-based economy is a dead-end street. There is a limited supply and the damage to our environment has us at an ecological tipping point. So it makes sense for us to conserve and be more efficient before we try to drill our way out of trouble.

  What about “Drill, baby, drill”? Well, it’s dumb, baby, dumb to think we’re going to drill our way out of this. It’s simple math. We don’t have the domestic reserves to support our habit. Yeah, but what about Alaska? According to the Department of Energy, “there is a 95 percent probability that at least 5.7 billion barrels of oil may be technically recoverable from the ANWR Coastal Plain of the Alaska North Slope.” Peak production is estimated at 650,000 barrels per day. It’s hard for me to conceive that such a relatively small amount can have any impact—except on the pocketbooks of oil companies running out the string.

  I’m not saying we should abandon drilling, but we ought to transition to renewable energy. President Bush lifted the drilling ban on coastal waters that are believed to contain 18 billion barrels of oil and 76 trillion cubic feet of natural gas, based on seismic surveys in the late 1970s and early 1980s. Drilling is necessary during our transition away from OPEC oil and to green energy, but it is just part of the solution.

  IT ALL STARTS WITH CONSERVATION

  Since 61 percent of the oil we consume globally is for transportation, according to the Global Market Information Database (2007), we need to start there. I know Americans have a love affair with the car, but some things are going to have to change. Even as I write, automakers are shifting gears to electric cars. The Chevrolet Volt, expected to cost around $40,000, will get about 230 miles per gallon with a forty-mile range. The Department of Transportation says eight out of ten drivers commute less than forty miles a day, so it stands to reason that such vehicles could have a positive impact very quickly.

  For years, Wendy and I have driven an electric GEM car at our lake home in Minnesota. It’s like a large golf cart and perfect for scooting short distances. We love it. Plus, it’s built in Fargo, North Dakota, and we like to support our local industries.

  But ultimately electric cars will have to achieve the range of gasoline-powered vehicles. One key is battery technology. It’s an old technology, but improving it is crucial not only to extending the potential reach of an electric car, but also for changing the way we produce and consume electricity. I don’t think any one technology alone will free us from the petroleum habit, but the ability to store the power we create makes sense.

  Another one of the goals of the Obama administration is to make the existing electric grid, which is susceptible to cascading blackouts, more efficient. There are actually three power grids operating in the forty-eight contiguous states—one east of the Rocky Mountains, another from the Pacific Ocean to the Rocky Mountain states, and the third the Texas Interconnected System.

  In 2003 there was a giant blackout in the Northeast encompassing Cleveland, Toronto, Detroit, New York City, and thousands of communities in between. Traffic signals went dark. Subways stopped. People were stuck in elevators. Thousands were forced to walk across the Brooklyn Bridge. The outage persisted for days in some places, costing an estimated $6 billion in economic losses, according to the Department of Energy. It turns out the problem originated with an Ohio power company. Overgrown trees had come into contact with power lines.

  Not only is our grid susceptible to something as seemingly benign as overgrown trees, security experts believe that the system is wide open to cyber attack. In 2009 the Wall Street Journal reported that the Chinese and the Russians have infiltrated the grid and could take it out in the event of a war. Intelligence officials say cyber-spies have accessed systems operating everything from financial institutions to sewage. Obviously, these vulnerabilities need to be eliminated.

  A new “smart grid” promises to address a very inefficient system. Computer technology can help direct energy where it is needed. By providing instant feedback to customers through meters in their homes that will tell how much energy their appliances are using and the current cost, power companies will enable consumers to choose to use energy when demand is low and the price is cheaper. If you do laundry when demand is low, you can save. Brilliant in its simplicity!

  Other advances include the use of high-temperature superconductors to provide loss-less transmission of electrical power by using liquid nitrogen to keep the lines cool. That’s important to the energy market because often power
generated hundreds of miles away is cheaper than a more local source.

  While technology and other infrastructure investments should help us use electricity more efficiently on the grid, I believe that it can also make communities and individual households less dependent on it. I think the natural process will be for homeowners to seek energy independence from the grid through wind and solar power. It’s Back to the Future…. In rural America, before electric cooperatives energized farms, folks depended on generators and wind for power. Some systems involved batteries, which were charged by wind generators.

  Once again, we are seeing wind farms spring up.

  North Dakota has been called the Saudi Arabia of wind energy, and it is just one of many states that are poised to become big wind energy players. However, at the moment, we lack the infrastructure to really capitalize on this source. According to the Department of Energy, “while electricity demand increased by about 25 percent since 1990, construction of transmission facilities decreased about 30 percent. In fact, annual investment in new transmission facilities has declined over the last 25 years.”

  That hasn’t stopped companies from investing in niche areas where there is both wind and available transmission line capacity. In windy regions, companies are competing hard to lease land for towers, just as they do in oil countries before they sink wells. When large capacity lines are built, the wind industry will be able to shoulder a significant portion of our country’s energy needs.

  SCIENCE WILL LEAD THE WAY

  It’s hard to imagine where this necessary transition away from fossil fuels will lead and how it will transform the world. Will we use more natural gas in coming decades or will hydrogen fuel technology come on line sooner than we think? Perhaps we will become so proficient at creating solar and wind energy—and storing it—that it will become the dominant energy source. The answers to these questions all depend upon the ingenuity of scientific minds—and on the market.

  I’m optimistic and excited. I think green energy will be a major turning point in man’s evolution and that we are living on the cusp of that transition. The sooner we embrace the transition, the more hope I have. It’s an exciting time. Booms and busts relate closely to the cost of energy. Cheap energy drives progress. Our ability to create affordable alternative energy will have a lot to say about whether the Great American Boom is over or just moving into a new green phase.

  In an op-ed for the New York Times after Obama’s election, Al Gore said, “Here is the good news. The bold steps that are needed to solve the climate crisis are exactly the same steps that ought to be taken in order to solve the economic crisis and the energy security crisis. Economists across the spectrum—including Martin Feldstein and Lawrence Summers—agree that large and rapid investment in a jobs-intensive infrastructure initiative is the best way to revive our economy in a quick and sustainable way. Many also agree that our economy will fall behind if we continue spending hundreds of billions of dollars on foreign oil every year. Moreover, national security experts in both parties agree that we face a dangerous strategic vulnerability if the world suddenly loses access to Middle Eastern oil.”

  WHAT ABOUT COAL?

  Statistics from the Energy Information Administration show that “coal-fired plants contribute 45.4 percent of the nation’s electric power. Nuclear plants contribute 21.0 percent, while 20.8 percent is generated at natural gas–fired plants. Of the 1.2 percent generated by petroleum-fired plants, petroleum liquids represented 0.8 percent, with the remainder from petroleum coke. Conventional hydroelectric power provides 7.5 percent of the total, while other renewables (biomass, geothermal, solar, and wind) and other miscellaneous energy sources account for the remaining 4.2 percent of electric power.”

  I come from coal country. North Dakota is a major coal-powered energy producer. It’s cheap and abundant, but as a global industry, there are real drawbacks. The Sierra Club says, “Power plants are a major source of air pollution, with coal-fired power plants spewing 59 percent of total U.S. sulfur dioxide pollution and 18 percent of total nitrogen oxides every year. Coal-fired power plants are also the largest polluter of toxic mercury pollution, largest contributor of hazardous air toxics, and release about 50 percent of particle pollution.”

  According to the Sierra Club, power plant pollution is responsible for thirty thousand deaths each year. Additionally, power plants release over 40 percent of total U.S. carbon dioxide emissions, a prime contributor to climate change.

  I have friends and supporters in the coal industry, so I have a personal interest in seeing the industry come up with a viable solution to CO2 emissions. If we can do so, coal deposits in America are so vast we could become energy independent. But we are in the race of our lives. Scientists tell us if we do not begin reducing greenhouse gases now, climate change has the potential to dramatically and negatively change the way we live, to the point of a planet-wide catastrophe.

  But seemingly, profit trumps even the potential for global disaster, and the race is on to see how many power plants can be built before new regulations go into effect. As I write this in 2009, forty-three coal-fired plants are under construction to be “grandfathered in” before stringent new regulations go into effect requiring new plants to sequester half of their CO2 emissions. Up to now in this decade 5,600 MW of new coal-fired electric power have been added to the grid. The forty-three new plants will quadruple that—and produce more than 150 million tons of new CO2 emissions every year. That’s just wrong.

  Here, again, is an illustration of how the corporate me-first greedy mentality fails to discern the difference between what is legal and what is moral. It is a symptom of what has gone so terribly wrong in America—we’ve learned to justify greed.

  It isn’t the first time that the good intentions of lawmakers have been counterproductive. Ironically, the 1970 Clean Air Act, while regulating many pollutants, did not address CO2 because no one was talking about climate change then. The Clean Air Act controlled particulates and sulfur, but in order to implement this new, cleaner technology, coal power companies became less efficient and as a consequence sent more CO2 into the atmosphere.

  One of the most promising solutions anyone has come up with is to inject coal plant carbon dioxide back into the earth. Basin Electric Power Cooperative in North Dakota captures half of its CO2 when it processes coal into natural gas. The revolutionary coal gasification project cost $1.5 billion in the 1980s. However, to replicate it today would cost an estimated $4 billion.

  Duke Energy CEO Jim Rogers told 60 Minutes, “What we need in this country is what I would call a Marshall Plan. We rebuilt the economies of Japan and Germany after World War II. We need to rebuild our economy and transition it to a low carbon economy. We can do that. But it’s gonna take trillions of dollars to do it.”

  OTHER OPTIONS

  I have been supportive of the ethanol industry because I believe it has the potential to play a role in energy independence. I see it as an evolving technology—away from corn and to cellulose—but it may prove to be transitional and nothing more if electric cars improve enough or if hydrogen fuel cells become a reality. Toyota has plans to build a hydrogen-powered car by 2015. Even if it’s successful, the prospects for the new technology rest upon the construction of “hydrogen stations” across the country like there are gas stations.

  It is no surprise that the fossil fuel industry is lobbying hard against any legislation that will help green energy become more competitive. With them, it’s all about business, and they have a whole battalion of scientists who will tell you what you want to hear. But green energy is getting more competitive, and clean energy will win in the end. Electronic Business reports that soon “leading solar electricity providers in Spain will be able to produce solar electricity for as low as 10 cents per kilowatt-hour (kWh)—equivalent to the delivered cost of electricity from a new coal power plant.”

  If that is so, and that kind of efficiency can be replicated, it will impact the coal and nuclear industri
es. Naturally, when we start talking about energy, people come out of the woodwork in support of nuclear power. However, in a recent study, Amory B. Lovins and Imran Sheikh compared the cost from a new nuclear plant at 14¢ per kilowatt hour with that of a wind farm—7¢ per kilowatt hour. The study did not even address the costs of disposing of the nuclear waste. The government plan has been to store the deadly stuff underground at Yucca Mountain in Nevada. Quite naturally, citizens in the state are against it.

  I don’t see nuclear energy as a smart play—the risks are too great. Remember Chernobyl? It laid waste to land twice the size of South Carolina. But continuing to churn out greenhouse gases could be even more catastrophic.

  GLOBAL WARMING OR MAYBE A NEW ICE AGE?

  According to an Associated Press report after the 2009 Copenhagen international summit on climate change, leaders aim to cap carbon dioxide at 450 parts per million, which would concede an increase in the global temperature of 2.3 degrees Fahrenheit. We’re at 390 ppm now. The report quotes NASA scientist Cynthia Rosenweig, who says going above 450 ppm “will change everything,” adding, “It’s not just one or two things. There will be changes in water, food, ecosystems, health, and those changes also interact with each other.” She warns about coastal flooding, droughts, the death of coral reefs, and a chain reaction that would affect the food chain. Twenty percent of the world’s known species would be endangered.

  Scientists warn that we are approaching a point of no return when global warming will melt the Arctic permafrost, releasing even more CO2, triggering a cascade of events that will be irreversible.

  You’ll get similarly dire predictions from the Sierra Club and even our own stodgy EPA. The Sierra Club notes, “Average global temperatures have risen already by one degree Fahrenheit, and projections indicate an increase of two to ten degrees within this century” (emphasis mine). The EPA warns, “Increased greenhouse gas concentrations are very likely to raise the Earth’s average temperature, influence precipitation and some storm patterns, as well as raise sea levels.”