Saturday, July 12, 2008

What's in the Box? III - Energy.

Barack Obama has unveiled an energy plan, so let's check it for substance:

  • A $300 rebate for families to offset rise in gas prices. From the same man who dismissed McCain's proposed suspension of the federal gas tax for three months. I guess the difference is that the taxes keep coming in, and instead we borrow the money to fund the rebate.
  • A $150B federal investment for ten years in to renewable energy programs. No increased energy production, and no guaranteed results, but it will be exciting!
  • Reduce oil consumption by 3 Mbbl/day by 2018, and by 10 Mbbl/day by 2030. How, exactly? The "plan" calls for improving petroleum use efficiency by 50%. That's fifty percent. How? Magic? Because we want it to be so?
  • Development of "current leases" on federal land, with the claim this would double current domestic production - without the need for more offshore production nor ANWR. The Wall Street Journal has already shown that this frequently-parroted claim is a canard, relying on a fantastic extrapolation of current production on federal land. However, at least the Obamites concede that more domestic petroleum production is needed. They just need to realize that one has to drill where the oil is, rather than where one would like it to be.
  • "End excessive speculation in the oil markets". This is a bone to throw to the conspiracy and class-warfare cranks. It does not result in the production in a single additional barrel of oil.
  • Windfall profits tax on oil companies. See the previous point. The collected tax would then be doled out to the citizens to offset higher energy costs. Obama may want to break this gently to many of these same families whose 401Ks are invested in energy companies. Taking from one's pocket to give it right back - after Uncle Sam's cut of pork and waste.
  • Doubling the CAFE standards...within 18 years. I think the private sector can handle than one quite well now, thank you.
  • Nuclear power? No more nukes until Harry Reid allows the Yucca Mountain Waste Repository to be opened. Like we more nukes.

That's it. Very little in the way of rapidly increasing domestic energy production, but a great deal of central planning, research and study, taxation, and wishful thinking.

Not That Thing Again!

The calls are picking up for reinstating a 55 mph speed limit to conserve gasoline. For those of us that did a good deal of long-distance driving during the Sad Seventies when this federally-ordered limit was in place, it made for great discomfort and irritation. A typical fuel efficiency curve shows a decline above about 60 mph, but other variables such as aerodynamics and weight are also important.

For Americans that drive as part of their employment - like truckers - this 55 mph limit is onerous. It means an additional 21% time on the road to deliver a given value of goods, and is physically gruelling for truckers. For a two-hour business trip (140 mi) in a vehicle that gets 30 mpg at 55 mph, the loss of fuel economy driving at 70 mph is 5 mpg, or less than a gallon of gas for the trip. The time lost at the slower speed is over a half and hour. If the employee-driver is making minimum wage, the savings in fuel costs for a 55 mph limit is lost in additional employee wages in the increased drive time, and a half-hour productivity improvment is lost (it takes more to execute a business transaction of a given value rather than using that time to execute additional business).

We believe that finding additonal sources of transportation fuels - oil, natural gas, electricity, bio-fuels - is a more important task than Share-the-Misery ideas like a lower speed limit.

Wednesday, July 09, 2008

Maybe It's Too Obvious?

T. Boone Picken's plan to divert the natural gas (NG) used for electricity generation to fuel vehicles requires a supply of NG-powered vehicles, and NG refueling stations. There do exist a limited number stations (even a home-based refueling system), providing for the corporate NG vehicle fleets. What is astonishing is how the major automakers have cut their North American NG vehicle development efforts in the last few years, despite rising gasoline prices. Ford has cashed out of this business; apparently GM has no NG vehicles in the works for North America. Only Honda is offering a NG-powered passenger vehicle, the Civic GX-NG, in the United States.

Tuesday, July 08, 2008

Boone Picken's Plan.

T. Boone Pickens is kicking off a national campaign to reduce our $700B foreign oil habit (now approaching 70% of our oil consumption) by selling large-scale wind power generation. How? The goal is to produce 20% of our electricity needs with wind farms in the Great Plains, displacing the natural gas that is currently used to produce this electricity. This gas can then be used for cars and trucks (real CNG and LNG vehicles - not glorified golf carts - exist; GM sells them in Europe). If 20% wind generation can be achieved, and the gas applied to vehicles, Pickens then estimates that 38% of our foreign oil imports can be eliminated.

Note that the wind-electricity infrastructure will need to be large-scale; 200,000 megawatts will need to be generated. This translates into almost as many industrial-grade wind turbines on large "farms" stretching from Texas to the Canadian border. It will not be achieved with an ensemble of hippie communes with a windmill and some car batteries. Picken's plan will also require easements on land for transmission lines to reach out from the US interior to link with the rest of the grid.

We guess that these two aspects of Picken's plan - large corporate development and operation of the wind farms, and large-scale land development for grid expansion - will make the neo-Luddites and the Extreme Green crowd apoplectic. As Picken's plan is debated, we will watch with interest whether the Sierra Club, NRDC, and the other usual suspects embrace it or attempt to kill it.

Monday, July 07, 2008

Obama's Cynical Iraq Ploy.

Barack Obama now claims to be "refining" his position on Iraq, causing the Hard Left to void their bowels. He gained their rabid support because of his virulent anti-war stand, with an effective pledge to unilaterally and unconditionally withdraw US forces from Iraq within sixteen months...a "nuance-free" position. This was the issue with which he snatched the Democrat nomination from Hillary.

The Hard Left has nothing to fear: Obama's "refined" Iraq position is much more likely than not to be bait for sane Democrats and Independents to think that he's not such a delusional guy on Iraq. Obama was born and raised into the Hard Left, has made his national political bones with an extremely radical leftist view of Iraq, the War on Islamofacism, foreign policy, wealth redistribution, nationalization of health care, etc. As to the Radical Agenda, he is a True Believer. Once in power, he will throw the "refined" stand on Iraq under the bus. When he does so, he will no doubt give a very eloquent speech that will make Chris Matthews and Keith Obermann weep. And moderate Dems will be left holding guaranteed leases to the Brooklyn Bridge, and we can all contemplate the loss of thousands of brave Americans for nothing.

We fear that too many of our fellow Americans will be snookered by this fellow.
If it Quacks like Uranium...

Just so there is no misunderstandings nor disavowals: Iraq did have nuclear material, 550 metric tons of "yellowcake" uranium, that is now being removed and sent to Canada. To us that is a substantial component of a WMD program. Why wasn't this fact mentioned a few years ago when the various Iraq review reports were being advertised as refuting the existance of a serious WMD program?

Sunday, July 06, 2008


In the last few weeks much hot air has swirled around the suggestion that "speculators" have driven the surge in oil prices. Yet a review of the record on oil consumption and production for the last two decades clearly shows the hole that we chose to dig for ourselves:

  • World Oil Production Mbbl/day: 65.0 (1990), 85.0 (2007) (31% growth)
  • US Oil Production Mbbl/day: 7.5 (1990), 5.0 (2007) (-33% growth)
  • World Oil Consumption Mbbl/day 66.6 (1990), 87.0 (2007) (30% growth)
  • US Oil Consumption Mbbl/day: 17.0 (1990), 21.0 (2007) (24% growth)

The world demand for oil has grown by 20 Mbbl/day since 1990, of which the U.S. consumption growth has grown by only 4 Mbbl/day, and at a rate less than the world consumption growth. Meanwhile, we have crippled our own petroleum production during the same period of time. Furthermore, world oil production has now stalled at about 87 Mbbl/day, while world consumption growth continues unabated. The world's excess production capacity has also collapsed in the last several years (it has become utilized capacity), from 7 Mbbl/day to 2 Mbbl/day.

When we chose to destroy our ability to produce our own petroleum resources by banning expanded offshore drilling (despite dramatic improvement in drilling technologies in the last forty years) , what did we think was going to happen?