Alternative energy alone won't meet US needs

Interesting perspective: "Red, white & blue jobs" vs. "Green jobs". How about a discussion on how to solve our energy problems from a bi-partisan perspective?

States defer to Obama on energy

A recent report (starting on page 20) outlines the current situation and states' perception of what is to be done in energy.

"Power corrupts; absolute power corrupts absolutely"

And so it begins... "In the first sign of Democratic intraparty strife since the election, Rep. Henry A. Waxman (D-Calif.) has told colleagues that he plans to challenge the House's most senior member, Rep. John D. Dingell (D-Mich.), for the chairmanship of the Energy and Commerce Committee."

"Power corrupts; absolute power corrupts absolutely"

The Death of Capitalism?

Or... how a brief economic history informs our current economic situation

To be clear, I am a free-market, capitalist and believe very strongly that the market knows better than any government could. However, a few things have transpired that concern me greatly, and should bring pause to others:

[1] In response to the banking failures of 1929, two acts of Congress came to pass: the Glass-Steagall Act and Banking Act of 1935, which prohibited banks from investing and limited interest rates among other things.

In March of 1980, Regulation Q (from that time period) was repealed. The "Savings & Loan Crisis" ensued. (Ronald Reagan was president.)

[2] In 1999, other provisions prohibiting bank holding companies from owning other financial companies were repealed. Robert Kuttner (co-founder The American Prospect) has criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis. (In 1999, Bill Clinton was president.)

[3] The Bretton-Woods system of 1944 provided that the United States would maintain the dollar value of gold at $35 and the other national central banks would maintain the dollar value of their currencies. If all countries were fixed to the dollar and the dollar was fixed to gold, the fixed exchange-rate system was anchored to gold, a design that prevented monetary inflation.

In 1973 the Bretton Woods Agreement was effectively disbanded and gold increased to $140 an ounce. Inflation became rampant and in fact, stagflation (recession and inflation - the worst of both worlds) came into being. (Richard Nixon was president.)

[4] In 1944, the Bretton Woods Agreements took the U.S. Dollar off the gold standard. A major cause of oil (and gold) inflation has to do with the precipitously falling dollar - due in no small part on how our U.S. economy has been led (read Government spending). Or mis-led. By both democrats and republicans alike.

[5] In the strong economy of the 1950s and 1960s, we had utilities who were encouraged to find ever-more profitable ways to reduce energy costs. Passing a portion on to consumers while being allowed to keep some of it (in case we forget, they are called profits.). Now we seem to discourage this behavior. Since the 1973 oil embargo, we have viewed oil companies as the bad guys, and taxed their "excess" profits. The unintended consequence of this is that they did not invest as they could have, ramping up our dependence on foreign oil resulting in much higher gas prices.

[6] In the strong economy of the 1950s and 1960s we had smaller budget deficits, Republicans weren't in cahoots with Democrats (in spending our hard-earned $s), nor were they spending on hundred-million $ bridges to nowhere. Or multi-billion $s no-exit-strategy wars.

[7] In the strong economy of the 1950s and 1960s, utilities were rock-solid. Banks were rock-solid. Inflation was tamed. The United States led the world financially and morally. In ethical behavior. In Doing What Is Right.

[8] Outsourcing: From a business perspective, it "seemed" like a good idea to export our jobs to lower-wage (read lower-quality / lower-ethic) countries. But with contaminated pet food, lead in toys and counterfeit software and other products, we are finally waking up to the fact that not everyone has the same ethics as Americans.

[9] BRIC: Brazil, Russia, India and China are growing at such a rate that their economies are (also) driving up oil prices.

[10] Obesity and being a victim: Americans seem to feel the Government owes them a living. Including free health care. Which will require vast sums of money and cause further erosion in the value of the dollar. The deferred gratification that comes with longer life (later) due to better behavior (now) seems to be a difficult concept to grasp for most Americans.

If you put all these seemingly disparate facts / events together, one can see how this came about: Death by a thousand cuts: Those cuts being the erosion of profit as a true motivator (led by anti-capitalists), and one can see where this may head. Sooner than later. It is interesting that this contrarian view makes sense when unwinding unintended consequences caused by too much government meddling.

(Side note: Portland is a microcosm of this mismanagement: We are spending precious time and resources on naming streets and building bike paths instead of creating an environment where clean, sustainable businesses are encouraged to set up shop - to bring in a net in-flow of people to the community. Instead, we tax businesses and investors and only realize the unintended consequences after many move out.)

We have a choice in front of us. We have the talent, resources, capitalist (read free-choice) system and capability to lead the world: economically, technologically, politically and even morally.

Rearranging deck chairs on the Titanic seems to be the status quo from our political leaders. Voted in by a disenfranchised electorate.

The United States deserves more. Its citizens deserve more. And you deserve more.

We need leadership. We need focus. And we need to marshal our collective will and considerable resources to work together to solve all these problems, in a way that bodes well for our children and grandchildren.

Instead of the political parties trying to undermine one another, instead of the PUC disincentivizing utilities to find innovative ways to move to clean energy, instead of additionally taxing oil companies' profits - why not focus on what would solve many problems?

Why not focus our resources on incentivizing, supporting and even funding renewable energy technologies that would enable the United States to become a net-exporter of renewable energy? Not high-jobs-per-kilowatt-hour. But high-density, clean energy production.

A simple (simplistic?) solution is to move away from oil entirely and rely on electric vehicles, using renewable grid-electricity production. Yes, driving range is an issue. As is battery technology, but most of us drive fewer than the average range of current-technology plug-in cars. By converting even 10% to 20% of vehicle usage to electric vehicles, greenhouse emissions would decrease significantly, as would oil prices. These are business decisions, and it seems our car companies are a bit slow in "getting it".

Bottom line: The root cause of our economic problems is that we are a net importer - of goods and energy. No economy can withstand the hundreds of billions of dollars being sent to non-friendly states. The root cause of us being a net-importer is that in general, we are complacent. Yes lots of great people and organizations are doing lots of great things. But America appears to be in not only a cyclical decline but a long-term decline.

Solution:

As a free country (so far), you have the ability to vote with your signature and your dollar.

Government: Let's help Government become more responsible by only voting for those who "get" this notion and actually do something by focusing on the root cause problem: Becoming a net-exporter of renewable energy and renewable energy technologies. How do we do that? With your vote. In 1980, John Anderson ran on a ticket to solve our energy problems by adding a 50 cent per gallon gasoline tax. Had this been accomplished, those billions of dollars would have been spent to solve our oil dependency. He received 7% of the popular vote. Use your signature on a letter to your congressmen and women - to fund renewable energy technology development. Your children will thank you.

Business: Only buy cars that are electric or hybrid. That is, vote with your dollars. Use your signature to write the CEOs of U.S. car manufacturers to build plug-in electrics. Then buy them.

Repeat of 1970s!

"Those who cannot remember the past are condemned to repeat it." *

Here we go again: Delays in renewable / alternative energy initiatives are beginning.

* George Santayana

Perhaps it is time we do something!

"We can promote alternative energy sources and conservation, and we must. America must become more energy independent, and we will." — George W. Bush, State of the Union address, Feb. 7, 2001.

"The nation's growing reliance on imports of crude oil and refined products threatens the nation's security because they make us more vulnerable to oil supply disruptions." — Bill Clinton in an energy security statement on Feb. 16, 1995.

"Conservation efforts are essential to keep our energy needs as low as possible. And we must then take advantage of our energy sources across the board: coal, natural gas, hydro and nuclear. Our failure to do these things has made us more dependent on foreign oil than ever before." — George H.W. Bush in an address to Congress on Sept. 11, 1990, in the run-up to the Gulf War.

"We must take steps to better protect ourselves from potential oil supply interruptions and increase our energy and national security." — Ronald Reagan, in an energy security message to Congress on May 6, 1987, in which he raised concerns about "our increasing dependence on imported oil."

"This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation. ... Beginning this moment, this nation will never use more foreign oil than we did in 1977 — never." — Jimmy Carter in a television address on July l5, 1979, in which he announced temporary oil import quotas.

"I am recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifice, but it — and this is most important — it will work." — Gerald Ford, State of the Union address Jan. 15, 1975.

"Let us set our national goal ... that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy sources. Let us pledge that by 1980, under Project Independence, we shall be able to meet America's energy needs from America's own energy resources." — Richard M. Nixon, responding to Arab oil embargo, Nov. 7, 1973.

Google's solution

"The United States government has been unable to fix the country's energy problems," Google Chief Executive Eric Schmidt said, but the Internet giant on Wednesday proposed its own 22-year solution.

"We have seen a total and complete failure of leadership in the political parties of the United States," Schmidt said in a speech at the Commonwealth Club here. "We've been working on a plan to help solve this problem."

Politics in the way of renewables

Congress is (still) at an impasse on Renewables.

And so, it continues.

As one of the "potential futures" predicted in my new book*, the downward spiral of weak-dollar-induced higher oil-prices, coupled with our inability to innovate our way out of this problem is taking hold: "Obama says Wall Street bailout will cut his energy plan." Get ready for hyper-inflation as billions get pumped into our economy.

* The 21st Century Energy Initiative: How to Solve Our Energy Problems

How to Fix Our Economy and the Energy Crisis

With the economic meltdown in our economy, there is plenty of blame to go around. While we’ll soon be focusing on mortgage loan companies using risky methods, consumers biting off more than they can chew, Congress wanting to add more regulations (that hamper investments), and both presidential candidates blaming the other party, we might want to look a bit longer term. Both in the past and the future.

Perhaps we should ask ourselves how we got in this mess. Why aren’t we the economic powerhouse of the 1950s / 1960s anymore? To answer these and many more questions, you may want to read these:

=> How did we get in this mess? What decisions were made, by whom? And how can we learn from the past? Find out. And what about now?

=> And you think it’s bad, now? How developing nations will make the problem much worse, and why we need to make different decisions, now. A book excerpt on this train wreck can be found here. And details of the analysis can be found here.

=> Whoever addresses our energy problem – through real technology innovation and business model innovation – will win this election. You can compare the presidential candidates’ approaches, here. (With the detail, here.) Please check your congressional candidates’ views, too.

=> We need to innovate our way out: Create industries and technologies – to become a net-exporter of renewable energy technologies.

Seven Myths of Energy Independence

"Despite supposedly bold initiatives such as last year's Energy Independence and Security Act, America is no freer from foreign oil: Since 2006, imports have remained steady at about 13 million barrels every day, while the price for each of those barrels has jumped by $30. Our heavily subsidized ethanol refiners now use so much corn that prices for all grains have soared, sparking (food) inflation."

The 7 Myths (According to the article):
Myth #1: Energy Independence Is Good
Myth #2: Ethanol Will Set Us Free
Myth #3: Conservation Is a "Personal Virtue"
Myth #4: We Can Go It Alone
Myth #5: Some Geek in Silicon Valley Will Fix the Problem
Myth #6: Cut Demand and the Rest Will Follow
Myth #7: Once Bush Is Gone, Change Will Come

Independent voters will decide the next president of the United States.

Significant shifts in our thinking and behavior are needed to overcome this grand challenge. Not business as usual or government as usual. We need true, common sense leadership on this issue!

Those who like sausage and respect laws should watch neither being made.

Amazing: Off for a month.
Our Congress NOT at work: On Energy - on recess.
Pelosi's perspective.
Our Congress at work. It is not pretty.
And for a little fun: Cheney / Pelosi "blink-off". Guess who wins?

Crisis, schmisis: Let's go on a recess

The Oregonian editorial is spot on: "Lawmakers skipped home for their summer recess having done nothing to help this country, now or in the future, with its energy problems." To be fair, some lawmakers are trying to make a difference. It's just difficult to see, sometimes.

Our "leaders" should be ashamed of themselves!

When there are only two views* (instead of doing what is necessary to enable the U.S. to become energy-independent), bickering and partisan politics rules the day. Shame on Congress!

* Democrat & Republican

Desire for political power trumps need for renewable power. Again.

Once again, the "leaders" of this country are too busy blaming each other for the mess we are in, relative to energy. This is indeed shameful. And although it should be unbelievable, sadly, it isn't. It seems there is exactly zero compromise. The outcome will be exactly as it was after the 1973 OPEC-led oil embargo: Higher prices.

Please read "The Blame Game" portion of my new book (working title): "The High Price of Gasoline... and what to do about it: How to Solve the World's Energy Problems, Once and For All." Then get a copy to your Senators and Congressmen & women.

Are speculators to blame for the price of oil?

According to Rich Lowry, blaming speculators is a waste of time, and even illogical. Whatever we do, let's not discuss supply and demand. It might lead us to the "wrong" conclusion (i.e., different from our beliefs).

$4 a gallon? Really?

Bush's “plan” for renewables?

Spare change to start a Renewable Energy Technology Accelerator?

I wonder where one might find a spare $70 billion a year - to fund a Renewable Energy Technology Accelerator? Oh, here it is.

A Congressman speaks his mind on the unintended consequences of a recent bill

Time to socialize, er... nationalize, er.. take over the oil companies?

Here we go again! Only this time, look at the faces on Maxine's collaborators' faces when she... well... watch.

Pandering, redux

Both Hillary Clinton & John McCain appear to not understand the simple supply & demand relationship. Until addiction to oil is cured, expect more unrealistic and inconsistent promises.

"Can I buy your vote?"

It seems the presidential candidates are falling all over themselves to see who can send you more money - as a way to "help us out" of our economic problem. Since when is it the Government's job to help us spend more money - to "keep the economy going"? (Besides, if both the Republicans and Democrats think it's such a great idea that taxpayers have their own money back, why don't they just lower our taxes and spend more wisely... like we have to?)

More importantly, the effects will actually make our dependence on foreign oil worse, not better!

The sooner we allow our economy to go through its normal cycle, the sooner there will be downward pressure on the price of oil. Less economic activity = less use of oil = lower prices. So, by trying to buy your vote, the candidates are supporting the steep price of oil, which - guess what - puts downward pressure on the dollar, increases inflationary pressures and sets us up for a stagflationary cycle, ala the 1970s.

Where is John Anderson when you need him?

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House Energy Bill makes it to The Senate

You may want to see what you're spending your $307 (per average family) on:

The Energy and Water Development and Related Agencies Appropriations Act

Full bill can be read, here: http://thomas.loc.gov/cgi-bin/query/D?c110:3:./temp/~c11016UsAK::

TITLE 17 INNOVATIVE TECHNOLOGY LOAN GUARANTEE LOAN PROGRAM
"Subject to the Federal Credit Reform Act of 1990, as amended, during fiscal year 2008 commitments to guarantee loans under title XVII of the Energy Policy Act of 2005 shall not exceed a total principal amount, any part of which is to be guaranteed, of $7,000,000,000: Provided, That of that amount, $2,000,000,000 shall be available for carbon sequestration optimized coal power plants, $4,000,000,000 shall be available for projects that promote biofuels and clean transportation fuels, and $1,000,000,000 shall be available for electric transmission facilities or renewable power generation systems: Provided further, That pursuant to section 1702(b)(2) of the Act, no appropriations are available to pay the subsidy cost of such guarantees: Provided further, That the source of payments received from borrowers for the subsidy cost shall not be a loan or other debt obligation that is made or guaranteed by the Federal Government."
http://thomas.loc.gov/cgi-bin/query/F?c110:3:./temp/~c11016UsAK:e20693:

Rational behavior would get us rational solutions!

Apparently, Jon Anderson (1980) and Ross Perot (1992) were "too rational" for voters. Instead the best solutions we can come up with (in our polarized, two-party "system") have been fraught with unintended consequences. For an excellent article on how this could possibly be, click, here. And a little humor on this important topic!

Next president of the United States?

From Michael Bloomberg: "The politics of partisanship and the resulting inaction and excuses have paralyzed decision-making, primarily at the federal level, and the big issues of the day are not being addressed – leaving our future in jeopardy. We can accept this, or we can say – ‘Enough is enough!’ – and together, build a bright future for our country."

Full text can be found, here.

Careful how we approach climate change!

"Climate change is so wildly fashionable now that hardly anybody dares object to measures designed to combat it. But as the costs of such policies rise, that may not last. The more money governments spend on wasteful subsidies, the bigger the backlash is likely to be, and the smaller the chance of sustaining the political will needed to keep the world cool." The whole article.

Science vs. Politics: Part II

Pardon my rant, but isn't this obvious to the casual observer?...

Perhaps it's time we focus on the cause of the global warming, instead of the effect of global warming. Face it, burning fossil fuels, and/or replacing it with fuels that use more energy to create it - are the major cause of global warming. If we believe an ounce of prevention is worth a pound of cure, why aren't we marshalling national resources to create long-term, bi-partisan science-based solutions? (Yes, per the high-level plan outlined herein.)

Science vs. Politics, and the need to go green

Biodiesel is a great 1st step, but [1] at what cost? And [2] what about the other 90% of the solution to rid us of fossil fuel and its (security, political and eco-effects? Read The Economist article on Europe's lessons learned with bio fuel (so we don't make the same mistakes!)

Energy policy is going nowhere!

Paul Mulshine says it well!

The real problem?

The United States' free-market capitalist system is the best in the world. However, it has two built-in problems:

[1] With only a two-party system, ideas don't get vetted, they get polarized.

[2] With 2, 4, and 6 year election cycles, candidates don't talk about a 50-year vision*, they talk about things that help them get elected.

This situation focuses candidates on short-term, "arguable" positions... that get them elected, instead of dealing with real, long-term problems faced by U.S. citizens. It's the "way it is".

The only solutions to overcome these fundamental barriers to systemic energy (policy) improvement - is to have candidates who [a] reach out to the other political "side" - for real improvement, and [b] are capable of creating and communicating a long-term vision. Heaven forbid we actually [c] look to other parties** for lasting solutions to our difficult challenges!

Will real candidates please stand up***?

* For instance, of energy independence for our children and grand children.
** Take this quiz, and then see other political perspectives (centrists, statist, libertarian). Which rtuly aligns with your thinking?
*** How about a McCain / Obama ticket?

The best we can do?

Please read the House bill "Creating Long-Term Energy Alternatives for the Nation Act", and determine for yourself if this will actually help US get there! My take? The title conveys a spot-on message, however it seems the Act is being used to tell voters "We're doing something." - when in fact, it limits U.S. oil companies' ability to compete on the global playing field, and really does nothing to encourage investment in renewable energy sources! Net result? Same as the 1980's WPT: U.S. oil companies will be at a disadvantage relative to foreign oil companies. This provides us another unintended (i.e., bad) long-term consequence, while seemingly doing soemthing in the short term. Not only that, it will have the effect of lost jobs, due to less investment money! The exact opposite of the Democrats' desires.

A better approach might be to ensure that *all* producers are equally affected - by imposing a consumer-inducement to reduce fuel, while investing proceeds in alternatives... and define how the money will be spent. (i.e., a free-market-based, VC-type Energy Independence Fund, perhaps?)

New direction?

From the State of the Union:
"Extending hope and opportunity depends on a stable supply of energy that keeps America's economy running and America's environment clean. For too long our nation has been dependent on foreign oil. And this dependence leaves us more vulnerable to hostile regimes, and to terrorists -- who could cause huge disruptions of oil shipments, and raise the price of oil, and do great harm to our economy.

It's in our vital interest to diversify America's energy supply -- the way forward is through technology. We must continue changing the way America generates electric power, by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power. We need to press on with battery research for plug-in and hybrid vehicles, and expand the use of clean diesel vehicles and biodiesel fuel. We must continue investing in new methods of producing ethanol -- using everything from wood chips to grasses, to agricultural wastes.

We made a lot of progress, thanks to good policies here in Washington and the strong response of the market. And now even more dramatic advances are within reach. Tonight, I ask Congress to join me in pursuing a great goal. Let us build on the work we've done and reduce gasoline usage in the United States by 20 percent in the next 10 years. When we do that we will have cut our total imports by the equivalent of three-quarters of all the oil we now import from the Middle East.

To reach this goal, we must increase the supply of alternative fuels, by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target. At the same time, we need to reform and modernize fuel economy standards for cars the way we did for light trucks -- and conserve up to 8.5 billion more gallons of gasoline by 2017.

Achieving these ambitious goals will dramatically reduce our dependence on foreign oil, but it's not going to eliminate it. And so as we continue to diversify our fuel supply, we must step up domestic oil production in environmentally sensitive ways. And to further protect America against severe disruptions to our oil supply, I ask Congress to double the current capacity of the Strategic Petroleum Reserve.

America is on the verge of technological breakthroughs that will enable us to live our lives less dependent on oil. And these technologies will help us be better stewards of the environment, and they will help us to confront the serious challenge of global climate change. "

Stagflation starting?

As I predicted in 2005, stagflation* may be raising it's ugly head! If nothing is done to develop competing (renewable) energy sources, this could make the economic turmoil of the 1970s look mild.

* Do a quick web searh on the term - first coined in mid-197os, caused by... dramatic oil price increases. This time (with peak oil), it could be a lot worse.

State of the Union: Close but no cigar!

Some great things were said this time around*... however, the effort does not meet the promise: a "22%" increase in funding is insufficient to make any significant change. A 75% decrease from one region is not the same as becoming an exporter of energy!

Becoming a net-exporter of renewable energy should be our number one national priority. Many other solutions will come from solving overcoming this challenge:

> The safety & security of our nation - due to energy independence - will increase.
> Innovation - to solving myriad technology hurdles - will soar.
> Our trade deficit - will disappear.
> Our economy - will boom.
> Thousands of new jobs - will be added.
> Corporate profitability - will improve.

Please encourage your congressmen & women to present a bold initiative to solve this problem in our lifetime!

* From the State of the Union Address:
"Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, and more reliable alternative energy sources -- and we are on the threshold of incredible advances.

So tonight, I announce the Advanced Energy Initiative -- a 22-percent increase in clean-energy research -- at the Department of Energy, to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy.

We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.

Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past.

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