Change has happened, It is downright shocking how time has changed the energy landscape so swiftly, for peaking at 147/barrel just this past July, Goldman Sachs expects oil to drop to 30/bbl this quarter. I must warn you that they did predict oil would rise to 149 by the end of last year, missing by about 100/bbl. But our U.S. Department of Energy predicted that oil prices would average 43.25/barrel this year (it was 99.55/bbl last year), and further, projected that the price will be 54.50/bbl next year. That agency has historically missed the mark with uncommon regularity. What if, though, GS and the USDOE are right this time?
So absent any better prognostications, the following logic should prevail:
1...Over the past few years, the United States has annually used about 100 quadrillion Btus of energy. Let's toss away that dimension (but analyze in terms of a hundred), so of that sum, 40 was oil, 23 coal and natural gas each, 8 nuclear and 7 (a bit high, but it was 6 in 2003 and looms to hit 7 soon) renewable energy. Biomass was 3.6, hydropower 2.5 and everything else was noise, although wind power is up to 0.32 and rising. Note that our energy consumption has not gone up much (98 in 2003 and should have been about 100 last year), but, worse, renewables have barely increased a grand total of one (1) in that period, partly because hydropower has declined. Yes, a one percent improvement since 2003. IF OIL REMAINS UNDER 60/BBL FOR THE NEXT TWO YEARS, OR LONGER, INVESTMENTS IN MAJOR SUSTAINABLE RESOURCE PROJECTS WILL BE DELAYED AND THE WHITE HOUSE / CONGRESS WILL NOT PASS ANY ENERGY PROGRAM OF NOTEWORTHINESS.
2...If, however, our leaders fail to take decisive action, we will have missed an opportunity, for now is the exact right time to act on two items. First, add a 1/gallon gasoline investment surcharge. We moaned at 4/gallon gasoline when Europeans were paying more than 10/gallon. The national price for premium today is less than 2/gallon. A whole dollar only kicks the price up to 3/gallon. This fund would accrue about 125 billion/year. Work out the rebates and subsidies, but spend most of the revenues on renewable energy research, demonstration and commercialization. Any chance for this measure to be adopted by our Congress? Let me pass on this for now.
3...The second must, now, is for the G8 nations to agree at their 2009 Italian Summit on a 1 cent/pound carbon dioxide remediation duty linked to crude oil at 30/barrel, to proportionately increase such that the levy would be 5 cents/pound carbon dioxide at 150/bbl crude. Funds should be used by each country to install smart grids and accelerate renewable energy investments. At 1 cent/pound, electricity costs would increase for coal-fired electricity by 7 cents/kWh, making unnecessary any renewable energy tax credits and various nuclear perquisites, bringing into competitiveness wind power and utility scale solar thermal power. The sum collected could amount to about 200 billion/year just in the U.S. What are the odds for such swift action?
It all depends on the right crisis, as explained in my HuffPo of January 5. Absent any man-made or natural calamity, what can we then expect of the incoming Obama Administration? First, oil will apparently remain under 60/barrel for a couple of years. Second, millions probably won't perish from a terribly hot summer. Worse, there is a lot of misinformation being reported, including reports that the planet has cooled since George Bush has been President. The media likes to pick up these stories, confusing the masses on something that still results in really cold winters and sea level rise that cannot be appreciated, especially if you live in Kansas or D.C.
Thus, let me boldly state that, as much as the incoming Obama Administration has promised change, and they really meant well, all signs point to nothing significant happening for the next few years to combat the coming dual hammer of Peak Oil and Global Warming. Please prove me wrong! All focus, however, will need to be placed on our economic crisis. There might be a tepid cap and trade initiative and important bluster to re-do the Kyoto Protocol with American leadership, but that will be it.
Oh, yes, about the title. I could say that crazy ideas have been tossed around about capturing black holes to produce energy. This is nonsense. We can, though, toss conventional wisdom into a proverbial black hole and act with purpose. Yes, you can. Every one of you out there can help make that crucial difference by doing something progressive, for a change. Guidelines are provided in the Epilogue of SIMPLE SOLUTIONS for Humanity.
-The Dow Jones Industrial plummeted 248 to 8200. Most world markets fell the same or worse. Crude dropped almost 2 to 36.81/bbl. Gold decreased 9/toz to 813.-
