Archive for August, 2008

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More thoughts on Palin

August 31, 2008

Rick Brookhiser over at National Review’s The Corner blog is among a handful of Republicans who are not happy with McCain’s pick.  Brookhiser’s point #1 seems to indicate that the VP slot devolves solely to traditional foreign affairs, and if you are not versed in that, then you are an unserious pick.  Well, how does that fit Romney, whose choice would have been guided by economics?  Romney is not exactly a star in the foreign policy firmament.

There are other issues, and ENERGY is a major one.  Palin is, by far, the most experienced energy candidate of the 4 principles.  In addition to governing the nations top oil producing state, she also served as chair of the Alaska Oil and Gas Conservation Commission, the regulatory agency charged with overseeing Alaska’s precious nonrenewable natural resources.  The combined practical and executive experience on energy issues dwarfs that of the other candidates, and it stands in stark contrast to Joe Biden, who has been in the Senate long enough to have voted against the original Alaska Oil Pipeline in the 1970s.  When experience and judgement come up in the debates, that fact is going to leave a mark on the Old Pro.

Let’s also not forget that she  is not necessarily a blank slate on foreign policy.  One of the most pressing geopolitical problems of the 21st century will be one that no administration has had to deal with before – the melting of the polar ice cap and the consequent opening of the Northwest Passage.  Palin’s administration has the most direct experience in dealing with what will be a defining issue of our relations with our most important ally (Canada, with whom we share the world’s longest unguarded border and who supplies to us our largest foreign supplies of energy, both oil and hydro electric) as well as our most intractable foe, the resurgent Russia.

From my perspective as a geographer, I thought Pawlenty was McCain’s best option, simply for reasons of raw electoral arithmetic, but I concede that Palin has  some very strong hole cards to play in this debate.  Those who are writing her off may well be walking into a trap.

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A bit on Palin

August 29, 2008

I don’t know all that much about Governor Palin, John McCain’s selection as his VP.  However, I do know that she is strong on drilling, including the opening up of ANWR for exploration.  As the Biden selection led me to wonder whether that meant Obama would endorse “The Biden Plan” for Iraq, so does this selection lead me to wonder whether McCain will change his position on ANWR?

A couple of other tidbits I have come across this week that I’ll throw in here to close out the week.  First, which I found via the Instapundit earlier this week (and, Instapundit is a great source for finding energy technology stories), is a story about developments in the use of nanotechnology in the harvesting of solar energy.

Second, Megan McArdle at The Atlantic has an informative post on the prospects for the “Hydrogen Economy.” Note especially her warnings about the assumptions – on both the left and on the right – that simply investing enough money will create a substitute for petroleum.   In the near and well into the middle term, petroleum will enjoy a significant price and infrastruture advantage.  So, in the near and middle terms, maximize petroleum supplies will remain crucial, which brings us back to the selection of Sarah Palin as the GOP VP.  Of the four principles now engaged, I would say she is the best energy candidate so far.  Now, I’d like the two campaigns to give us a hint of who they would name as their Energy Secretary.  Personally, I think one of the best candidates in either party is Brian Schweitzer, and Obama could go a long way with me if he would use the Montana Governor to effect in this campaign.

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The distressing selection of Joe Biden

August 28, 2008

Now that I am finally back to near full strength (even though I am still not eating solid food), it’s past time for a substantive post.  We don’t do partisan or electoral politics on this blog, but we do do energy geopolitics, and there have been some momentous events in the past week that could impact EnerGeoPolitics in the broadest sense, so let’s go.

When I heard through a Vicodin haze last weekend that Obama had named Joe Biden as his VP, I thought I must be halucinating.  Biden, the entrenched insider, seems to be the antithesis of everything the Obama campaign had been preaching about bringing Change to the old Washington ways.  Further, Obama had used his early opposition to the war in Iraq as the  raison d’être of his campaign, and had used it as a sledgehammer against opponents who were not as pure in their opposition.  Now, here he was, selecting as his #2 man someone who, in his (paraphrased) words “had gotten wrong the most important foreign policy question of our generation.”

Of course, Obama is on the cusp of actual leadership, where lobbing critiques from the peanut gallery is a luxury he can no longer afford.  He has to deal with the reality that we are in Iraq, which necessitates moving beyond harping about how we got there and figuring out how to go forward.   His own “immediate withdrawal plan” which he submitted as a Senator was all for show – another peanut gallery grenade that was ultimately unloaded.  His advisors have spoken throughout the campaign of leaving residual forces of 40,000 or 50,000 or 80,000 troops for an unspecified period of time.  Behind the sloganeering, in reality, there is no Obama Plan for leaving Iraq.

But, there is a Biden Plan (actually, there isn’t – it is actually Peter Galbraith’s plan, but in yet another case of the intellectual pilfering for which he is known, Biden has appropriated as his own).  Joe Biden has been a consistent voice calling for the partition of Iraq into three separate federal units based on ethno-religious identity – roughly, a Kurdish north, a Shiite east, and a Sunni west.  Outside of a paniced bug-out from the region, I think this is the worst idea of all that I have heard.

Iraq sits in the center of the Strategic Energy Ellipse.  It is the most under-explored country in that crucial region, meaning the actual size of its immense oil and gas holdings are probably vastly under-reported.  The most important stratetgic objective for the United States in the next half century is to keep the flow of energy resources from this region as unrestricted as possible.  That means preventing the domination of the region by any state or group of states.

The current strength of the US in the region lies in the network of alliances and relationships with other like-minded nations.  Saudi Arabia and the GCC states all fear domination by an Iranian hegemon.  The Central Asian states fear domination by Russia.  The Turks have history with both Russian and Persian imperialism.  Versus Persian and Russian designs, the United States sits as the balancing power.  However, at the moment we begin to show weakness or inability to fulfill our role, all these nations will have incentive to begin making accomodations with one of the other players.  This would have dire consequences for the stability of energy supply and, consequently, to the stability of the global economy.  This is the basic fact underlying US military presence in the region – we have to be there, in one way or another.

The Biden Plan has the potential to seriously damage, if not destroy, many of the alliances the US has in the region.  To begin with, the Turks would be strongly opposed to the independent Kurdistan that the Biden Plan lays the groundwork for.  Next, the Shiite East would likely become a de facto puppet state of Greater Iran, and would probably renege on any oil revenue sharing deals with the other two states.  That would the leave the Sunnis in the west abandoned to a pile of worthless sand.  Our closest and most important allies in the region – the Egyptians, the Saudis, the various states of the GCC – are also primarily Sunni, and would see this as a profound betrayal.  They would also see how much it strengthens Iran and weakens the US – especially if we were to be punished by the Turks by being denied use of our bases there.  The advantages of allying with the US would be fundamentally weakened.

The tripartite separation of Iraq is a monumentally unthoughtful idea.  It begins with the premise of “let’s get out,” and seeks to find a pseudo-intellectual justification or cover for that act.  Leaving aside for now the fact that it would be an exercise in US sanctioned ethnic cleansing, it fails to examine the strategic necessities of the situation first, and to find a way forward from them.  It is ironic that Peter Galbraith said the biggest failure of US strategy in Iraq was “wishful thinking,” and then he went on to put forward this fantasy.

Maybe this is all meaningless, maybe the selection of Joe Biden does not mean an Obama Administration would endorse the Biden Plan.  For certain, realities on the ground have changed much of the tenuous rationale for the plan in the first place, but as of two weeks ago, Biden’s office told Mother Jones that he still fully supported it.  But it is clear that Obama himself does not have a plan for leaving Iraq, and his plan, such as it is, is one of the very few things that Biden really seems to bring to the electoral table.

Distressing.

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Coal Sequestration gets time at the DNC

August 27, 2008

Montana Governor Brian Schweitzer gave a speech in Denver last night that few will remember and those who do will likely recall as unremarkable. but he did talk about coal gasification with carbon sequestration.  This is a big thing and could put the Dems ahead of the Republicans on the energy issue.  CTL and CTG are the most economically viable of the alternative energies most likely to be available in the near future.  When you add carbon sequestration to the process, it also has a very positive environmental aspect.  However, coal has a lot of enemies in Schweitzer’s party, so it remains to be seen how far this goes.  So long as Rep. Henry Waxman of California maintains his position on CTL, CTG and sequestration, coal remains on the outs with the Democratic Party.

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Post courtesy of Frank Ganje

August 26, 2008

I am still recovering from my surgery and not allowed to be upright for too long a period.  Thankfully, Frank has provided numerous links over the past week to fill out a new post.  Your contributions to this site are invaluable and greatly appreciated, Frank.

First, an article on developments in solar power.  Frank also has the excellent idea of locating wind and solar generators near hydro-electric plants, using their electricity to pump water back into the reservoir, effectively storing that energy for later use.

A piece on hydrogen cars.

Rooftop solar panels in Arizona.

Environmentalists vs. Alberta Oil Sands

Natural gas production

Coal news

Russia and oil

India energy expansion

Finally, a discussion of oil and gas drill rigs.  I’ll post Frank’s email in its entirety, with links embedded.

Oil, gas rig count rises: The number of rigs actively exploring for oil and natural gas in the United States rose by eight this week to 1,998.
Houston-based Baker-Hughes Inc. reported that of the rigs running nationwide, 1,594 were exploring for natural gas and 395 for oil. Nine were listed as miscellaneous.
A year ago, the rig count stood at 1,816.
Of the major oil- and gas-producing states, California gained six rigs, Arkansas five, Oklahoma four, Louisiana three and New Mexico two. Colorado and Wyoming lost three rigs each, and Alaska and North Dakota lost one each. Texas remained unchanged.
Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.
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blogging break

August 20, 2008

I am going in for a minor surgery tomorrow morning, and thus taking a brief hiatus from daily posting.

I will be back up no later than next Tuesday, 8/26.

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The Strategic Energy Ellipse (map)

August 19, 2008

In response to several e-mail requests, here is a map of the Strategic Energy Ellipse which I have commented on several times.  The image is taken from Geoffrey Kemp and Robert Harkavy (1997) Strategic Geography and the Changing Middle East.  It is published here without permission, so I may have to take it down eventually.  FWIW, I believe Kemp is the person who first coined the term.

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Examining a popular canard

August 19, 2008

Both John McCain and Barack Obama frequently cite the billions of dollars that the United States spends on foreign energy sources as a massive wealth transfer to hostile regimes.  This is something of a canard.  The five largest sources of US oil imports all provide over 1 million barrels per day (based on 2007 figures from the Energy Information Administration).  These nations are

  • Canada (2.455 mbd)
  • Mexico (1.532 mdb)
  • Saudi Arabia (1.485 mbd)
  • Venezuela (1.361 mbd)
  • Nigeria (1.134 mbd)

Of these nations, only Venezuela can be considered hostile.  Nigeria is unstable, but friendly.  Saudi Arabia draws much criticism, but they are a decidedly friendly nation and a crucial strategic ally.  Canada and Mexico, of course, are our two most important allies (even if many believe that various European nations are more important, the proximity and the amount of trade with our North American neighbors means they shall always take precedence).

The next five largest import sources are:

  • Algeria (0.670 mbd)
  • Angola (0.508 mbd)
  • Iraq (0.484 mbd)
  • Russia (0.414 mbd)
  • Virgin Islands (0.346 mbd)

Yes, that is correct – the US Virgin Islands is a major oil source, sending more oil to the US than the Persian Gulf states of Kuwait,  Qatar, the UAE and Oman combined)  Again, of these five, only Russia currently can be considered a hostile nation.  Algeria, Angola and Iraq are all to varying degrees unstable, but they are not hostile.  And, as Iraq becomes more stable, the amount of exports they provide will increase substantially – it is the most under-explored nation in the Persian Gulf and may well hold reserves equal to or greater than Saudi Arabia.

In summary, only two truly hostile nations are among the top ten oil sources for the US.  The others are a combination of unstable but friendly nations and genuine allies.  Reducing our dependence on foreign imports actually hurts our friends more than our enemies.  Any major change in US petroleum consumption could even devastate the economies of Canada and Mexico.

Obama has softened his stance in one aspect by focusing on imports from Venezuela and the Middle East only,  but hardened it in other ways, be calling for an elimination of such imports rather than a reduction.  This is probably a non-starter, because those Middle East states he refers to are all allies – we currently import no oil from Iran or Syria, and every other nation in the region is currently friendly to the United States.  So, aside from Venezuela, this position actually punishes friends rather than hurting enemies.

Venezuela is too big a source to attempt to cut them out in the near term.  We could probably levy a tariff on Russian oil and find alternative sources to make up for the lost supply (we could come close to it domestically by building CTL plants for military fuel use and relaxing offshore drilling and other restrictions).

The call to reduce dependence on foreign oil imports is always a popular one, but it is not an easy one to accomplish.  Pretending otherwise is not the “Straight Talk” that one candidate espouses, nor the tough talk that the other is trying to demonstrate.

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The rising opposition to wind farms

August 18, 2008

Supporters like T. Boone Pickens push wind energy as a clean, efficient source of energy, but there are numerous downsides.  Price per KwH remains high, long term maintenance costs are unclear, and, of course, the inability of wind to serve as a base power source are the main drawbacks.  However, a growing opposition to wind farms based on their unsightliness and noise seems to be gaining strength.  There is the old story of how Senator Kennedy fought the establishment of an offshore wind farm in Nantucket Sound because it would spoil the view from his family’s Hyannisport compound.  Then, over the weekend, the Associated Press ran a report from upstate New York’s Tug Hill plateau detailing how dislike of the noise and look of local windfarm is dividing communities and even families.  Finally, yesterday the NY Times entered the fray with a story about the “wind mill gold rush” all over upstate NY, with charges of corruption seeding the arguments about noise and spoiled views.

It won’t provide an answer to corruption, but the Magenn company is looking for ways to solve the issues of noise and unsightliness.  They are developing a lighter than air, tethered wind power generating system that floats into the jet stream to collect a more constant and steady stream of wind.  It will certainly be less noisy than existing turbine farms.  The view pollution issue is a matter of taste – they will still be visible, but in the air rather than on the landscape.  They also begin to resolve some questions about wind’s ability to provide a constant source of power – winds in the jet stream are more constant, and the Magenn turbines can work at both lower and higher wind speeds than can traditional turbines.  Maintenance costs remain to be seen.

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Update on the Bakken Formation

August 15, 2008

Frank sends along a news item from the Grand Forks, ND Herald regarding the Bakken Formation, a shale formation in North Dakota and Montana that the US Geological Survey recently estimated held 3 to 4.3 billion barrels of recoverable oil.   In this new story, a geological engineer at the University of North Dakota says the ultimate total could be twice that, and perhaps several times greater.  The USGS estimate is based on a recovery rate of just 1%, but using new technology and estimating probable future developments and the recovery rate should be much greater than that.

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Links post

August 14, 2008

Another batch of interesting links sent by Frank Ganje:

North Dakota Carbon Credit program.

A burgeoning wind industry in ND.

A different take on the Russo/Georgian situation.

Ethanol industry initiates PR offensive.

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The Georgian Crisis and the Threat to the Global Energy Public Good

August 13, 2008

Larry Kudlow over at National Review’s Corner has a post up on the Georgia crisis that has what I think are some important misconceptions. First, you should note that Kudlow mis-attributes to Thomas Barnett a long quote that frames his argument. Barnett did not author the lines he quotes, they came from James Pethokoukis’ keyboard. Pethokoukis was simply referencing Barnett’s line about being “a former expert on the former Soviet Union.”

Pethokoukis’ general idea, I think, is incorrect. Reducing our dependence on energy from odious regimes would matter not a whit, because oil is fungible and we will be held hostage to energy prices no matter where we get it. Our chief sources already are (a) domestic (b) Canada and (c) Mexico. The cost of all that oil will go up whenever the global cost rises and falls.

The way to control those future shocks is to engage globally, not to disengage and try to hide behind an isolationist wall (and a false one, at that) of energy independence.

I’m a geographer, and the geographer’s perspective is usually left out of geopolitical discourse that has come to be dominated by the political half of the word. But, geography is fundamental and the most unchangeable aspect of geopolitics, and we ignore it at our peril. The facts of the matter are that

  • (a) we are fundamentally interconnected with the global economy;
  • (b) the global economy demands vast resources of energy;
  • (c) 70% of the world’s oil reserves and 40% of the natural gas reserves are held in the Strategic Energy Ellipse that stretches from the northern shores of the Caspian Sea to the southern terminus of the Persian Gulf.
  • (d)If we cede control of this region, then we cede control of our economy.

We have in place a superstructure of alliances in the region that we need to leverage to maintain our dominant role as the guarantor of safe and stable energy delivery to the world economy. In opposition to this classic Public Good, the Russians are pursuing a strategy of what I call “Energy Hegemony,” an attempt to dominate those deliveries for private rather than public good, while the Chinese are pursuing a modern form of Oil Mercantilism, seeking to lock up flows of energy for their own use. We cannot allow these private good pursuits to defeat the public good approach. If they do, the world economy as we know it will collapse.

This is the end to which US military power (and all the other forms of soft, sweet and sticky power that various schools champion) must be deployed. It is not about the freedom or democracy of this nation or that people. It is about ensuring the free flow of energy so the best possible environment for economic and political advancement can be maintained.

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Whither NATO?

August 13, 2008

The Bear is once again stalking the woods. Containing that bear is NATO’s raison d’etre. So, where is the NATO response? Unfortunately, our “traditional” NATO allies have been made energy cuckolds by Putin. They will not respond. Meanwhile, the newest NATO members – the Baltic States and Poland – have joined with rebuffed NATO candidate Ukraine to stand bravely with embattled Georgia. If NATO won’t act on this, what is the purpose of maintaining the alliance? Surely not so we can have them sitting behind barriers in Afghanistan, shackled by restrictive rules of engagement.

NATO will not act. It is time for the United States to circumvent them and institute strong bilateral agreements with the Ukraine, Georgia and Azerbaijan. Then, group those three with current NATO members Turkey, Bulgaria and Romania into a Black Sea Treaty Organization. Turkey controls all of the southern Black Sea shoreline, Bulgaria and Romania control the western shore, Ukraine the north, and Georgia a large portion of the east. Together, they dominate about 7/8 of the sea, leaving just a small area in the northeast that is Russian. The United States already bases aircraft in Turkey, it should redeploy others from the non-helpful NATO allies to each of the other 5 nations (including Azerbaijan on the Caspian) in the region, and dedicate a Black Sea Squadron for permanent basing in the Ukrainian port of Odessa.

The Russians have a decided advantage in land power in the region, but they cannot match US air or naval power. Luckily for us, those are the two branches of the military that are least stretched by Iraq and Afghanistan.

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Russia, Georgia and a Reformulation of Classical Geopolitics

August 12, 2008

A century ago, during the founding years of geopolitics as a discipline, one of the primary concerns was the differences between land powers and maritime powers. American naval strategist Alfred Thayer Mahan stressed the importance of naval power, while a British counterpart, Halford MacKinder, thought the advantage would tip to land power in the near future. MacKinder based his ideas on the developing railroad industry, which, he believed, had the capacity to bring a mobility to the Eurasian land mass which would surpass the mobility on the seas that maritime powers had used to dominate world politics for centuries. A one sentence summary of MacKinder’s position was that trains would trump steamships. Over the next century, MacKinder’s fears were proven to be unfounded, as the maritime powers of Great Britain and the United States have continued to dominate global politics ever since.

But, the old MacKinderian calculus is back in an updated form. Today, it is not the ability to transport troops and arms that is of concern, but the ability to transport energy. Located in the heart of the Eurasian land mass is a region dubbed the Strategic Energy Ellipse, a large swath of land stretching from the northern shores of the Caspian Sea to the southern terminus of the Persian Gulf. Within this region are the world’s largest concentration of energy resources – approximately 70% of the global reserves of crude oil and 40% of natural gas deposits. There are two ways to move these reserves out of this region to the industrial nations hungry for them – land based pipelines or maritime shipping. The United States, with its unchallenged naval might, can guarantee maritime deliveries of energy supplies around the globe, and draws important geopolitical support from many nations for doing so. Some commentators like to call America the world’s “Sheriff,” and believe the world support for US policies come from that strength but, in reality, it is only our ability to keep the energy flowing that allows us the often tenuous support that we get.

Now, for the first time, there is an alternative to the US as guarantor. For the landlocked Central Asian states of the former Soviet Empire, the maritime option is not available, and almost every existing pipeline route must traverse Russia. One of the few routes that does not transit Russia is the pipeline from Azerbaijan through Georgia and into Turkey. A defeated Georgia will make that pipeline Russian dominated as well. Our European allies rely on the energy delivered by these pipelines as much, if not more, than on the energy supplies delivered by tanker. Thus, they are more likely to bend to Russia’s will than to America’s. This is why the Ukraine and Georgia were denied membership in NATO – America wanted it, Russia did not. Russia won.

NATO is the formal structure of the geopolitical idea of Atlanticism - an alliance based on common borders of the Atlantic Ocean. Contra to Atlanticism, Russian geopoliticians have espoused a theory of Eurasianism. With the Russian dominance over Eurasian energy supply, it looks today like Eurasianism is ascendant, and Atlanticism is in decline.

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Big Set of Links

August 11, 2008

Frank Ganje has forwarded in a bunch of links over the past week.

Update on a coal gasification plant in Minnesota

Crow Tribe strikes deal to build CTL plant on tribal land

US is now the world’s largest wind power producer

Enviro groups sue to stop Canadian oil pipeline

North Dakota Sen. Dorgan proposes “Energy ‘Moon Shot’”

Iraqi government revives Saddam-era oil deal with China

Minnesota drivers encounter biodiesel supply problems

180 megawatt wind farm opens on ND/SD border

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Obama’s “1 million PHEV” by 2015 pledge

August 11, 2008

A key talking point from the Obama energy plan is the stated goal to “(p)ut 1 million Plug-In Hybrid cars – cars that can get up to 150 miles per gallon – on the road by 2015, cars that we will work to make sure are built here in America.”  My guess is that these numbers are based on General Motors’ specs for the much anticipated Chevy Volt.  The 150mpg is supported by the Volt’s estimated mileage numbers for those driving around 60 miles per day.  The 1 million number is less obvious.  GM hopes to have Volts begin rolling off the production line by 2010, and in early reporting was targeting around 100,000 units per year.  A sustained production run of that size would get you to about 1/2 of Obama’s commitment.  However, GM has recently drastically cut back expectations of the production run all the way through 2015, telling federal regulators that the Volt will be built in low numbers through 2015.  The limiting factor – for Chevy or any other automaker – is going to be the batteries, and that factor itself is two-fold.  First, can enough batteries be manufactured and, second, can the promised performance actually be met?  The point that Sam Abuelsamid from Autobloggreen made over a year and a half ago still stands:  “Regardless of the claims of battery makers, the technology to build an affordable battery that will last 100,000 miles, with minimal degradation of performance has yet to be demonstrated.”

You never know what kinds of engineering breakthroughs might occur in the next few years, but as of now, the “1 million PHEV” statement is more fantasy than attainable goal.  Which is actually a good thing, because it remains doubtful that the electrical grid can actually accommodate a large number of PHEV.  We need to upgrade the grid before we adopt PHEV in a serious way.

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Russia/Georgia scuffle could have major impact on energy prices

August 8, 2008

Georgia is a major transshipment point for oil and natural gas pipelines sending resources from the energy rich Caspian Sea area west to consumers in Europe. The Russian incursion into the internal Georgian struggle with South Ossetian separatists is more about Russia maintaining and expanding its domination over European energy supplies than it is about concern for the South Ossetians. Expect prices to increase dramatically if this situation lasts beyond the weekend.

While most of our “traditional” allies have been scarce, Georgia has been a steadfast ally in the Iraq war (see, for example, here and here). Those troops will be heading home now. The US is now in a difficult spot in how it will respond.

UPDATE:  The civil.ge website for news on Georgia, which I linked in the final paragraph of the original post with the news that Georgia is recalling its troops from Iraq.  An Associated Press report on that recall can be found here.  I am left wondering if the civil.ge website was taken down by a Russian infowar op?

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Comparing the two candidates’ energy plans

August 7, 2008

This is the first of several commentaries I will have on the two candidates’ energy plans.  Today, I just want to give a broad overview of my take.  You can find McCain’s energy plan, dubbed “The Lexington Project” (a reference to the Battle of Lexington Common that touched off America’s War of Independence in 1775 and an allusion to energy independence), here.

Obama’s plan, which does not have an evocative name, is most fully explicated here.

Of the two, I have to say that I prefer McCain’s “all of the above” approach.  However, I also have to say that, of the two, Obama’s is the more detailed.  Now, they both lack the level of detail I would like to see – there are no summary tables of BTUs and kWhs and, thus, no real sense that either candidate understands the scope of the issue.

Unlike Obama, McCain addresses climate change as a separate issue from energy.  Honestly, there really is not that much difference between the two on climate change end goals – McCain seeks a 66% reduction below 1990 emission levels by 2050, Obama seeks an 80% reduction (but he does not specify the base level) in the same time frame.  The primary difference is that Obama is, essentially, anti-fossil fuel and seeks to begin abandoning those energy sources in the near term and completely abandon them in the middle term.  McCain sees fossil fuels as a necessary bridge in both the near and middle terms, but seeks to clean them up as much as possible.

This is not an endorsement, but I think McCain’s approach is the more reasonable one.  There simply is not enough affordable and reliable energy available from alternative sources in the near and middle terms to get off fossil fuels as rapidly as Obama would like.  Oil, even at todays inflated prices (and at even higher prices in the future) is simply the cheapest, most versatile, and most easily transportable fuel available.  Plus, the petroleum infrastructure is intact, providing a further price discount over any other alternative, which infrastructure has to be built from the ground up.  Fossil fuels will remain the primary energy source for the world for the next quarter century, at a minimum.

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A discussion of PHEVs

August 6, 2008

Instapundit had a large post/discussion yesterday (with a brief update today) about plug-in hybrid electric vehicles (PHEVs) and their impact on the energy grid yesterday.    The biggest point that I would add is that it is dangerous to assume that all of the PHEV charging would be done in off-peak hours.  One reader astutely points out that a sizable percentage of the vehicles would likely be plugged in as soon as the driver got home, putting a massive strain on the grid between 5 and 7 PM.  In addition to this, there will be an unpredictable percentage that will, in fact, plug in to charge during peak hours.  Some will drive to work and plug in there, some will work from home and plug in there.  People are used to the convenience of filling their tanks with gas whenever needed, I doubt that there is going to be an instant creation of discipline to charge only at night (and, maybe, not even a gradual discipline).

The other thing to remember is that electricity is not free.  As people see their electricity bills climb, there will be a financial incentive to charge up at work (in addition to the convenience incentive) or anywhere else you can find an available plug that someone else pays for.  Bottom line, there will be some percentage of charging that is always being done during peak hours.  The specific level of that percentage is unpredictable, but the power grid is going to have to be expanded to account for both peak and off-peak charging.    And that means adding base power, not just relying on solar panels in parking garages or wind turbines during off peak hours.

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Obama’s SPR suggestion

August 5, 2008

In what was touted as a major energy speech yesterday, Senator Barack Obama was pretty thin on actual details.  His pledge to spend $150 billion dollars over 10 years to make America energy independent is mind boggling.  We can do a lot to lessen our reliance on foreign energy imports, but we will not become independent in 10 years, and it will cost a lot more than $150 billion to get there.  The Senator no doubt knows this, and that is why he left all specifics out of his “plan.”

This is not to say that he offered no specifics.  Among others, one thing that he was specific on was his idea to release 70million barrels of oil from the Strategic Petroleum Reserve (SPR) in an oil swap scheme.  This is just a bad idea.  The SPR is there for a specific reason – to cushion the nation in times of genuine emergency.  The ups and downs in the polls of a political candidate – I don’t care who it is – is not an emergency.  The politicization of the SPR has to be resisted.  I endorse the idea of an Oil Reserve Board put forward by David Victor and Sarah Eskreis-Winkler in the most recent issue of the journal Foreign Affairs.

The problem of high gas prices is not going to be solved by gimmicks, not Obama’s SPR plan nor McCain’s gas-tax holiday.  The problem is fundamentally a creation of the plateauing of global oil production.  This plateau, I believe, is artificial – there is plenty of excess supply, but the oil producing and exporting nations have a financial interest in limiting production in order to keep prices high.  The solutions are to:

  • (a) expand production by nations not in this informal cartel  (I call it informal because the formal cartel – OPEC – is joined by non-member Russia in the current production leveling).  Major producing nations not in the cartel are the United States (the third largest petroleum producer in the world), China, Mexico and Canada (numbers 5, 6 and 7) and Norway (number 10).
  • (b) development of alternative sources of energy and, especially, of non-traditional sources of crude itself.  This will likely cause the cartel nations to increase production, in order to drive the cost of crude down, which will make the use of non-traditional fuels economically non-competitive.  So, the money spent on developing these sources will be two-fold – first to lay the groundwork for their use in the long term, but primarily to put pressure on the cartel to boost production in the near and middle terms.
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