06.05.10
Posted in Energy - NonRenewable, Politics at 9:37 pm by steve
Who’s Bad?
From all the press about Obama and the oil well, you’d think that the President himself descended a mile beneath the Gulf and chewed through the steel pipeline with his own teeth. Had he actually done this, then I think one could argue that the oil spill in the Gulf was at least partly his own fault. But he didn’t. And it isn’t.
So why are political opponents trying to tar and feather Obama for the Gulf Coast oil spill? Let’s look at some possible reasons:
1) It happened on his watch. In 1883 Krakatoa erupted, sending 21 cubic kilometers of earth into the atmosphere. Chester Arthur was President of the US at the time. Despite this disaster, historians judge Arthur on his achievement in passing the Civil Service Reform Act. Lots of things happen on a President’s watch that are not his fault. Katrina itself was not Dubya’s fault. The disaster itself was not the problem. The lack of response was not even the problem. The problem was a rather wretched and deep denial that there was a problem. It was Dubya’s insistence that everything was under control when, in fact, almost nothing was being done. It was denial of a problem when there was a very real problem and denial of services by a federal agency whose reason for existence was to provide those services.
There is no such agency for oil spills. And there was no denial of the problem.
2) Obama advocated for offshore drilling. According to a book review in a recent issue of the Economist, a recent executive of Royal Dutch Shell argues that the reason for the spill is that US policy has forbidden drilling in easy places offshore; therefore oil companies must drill in difficult places. Had oil drilling along the eastern seaboard been allowed - as Obama advocated days before the disaster - BP would not have been drilling where it did in the Gulf. It’s a self-serving argument. It’s not clear that the depth of the well contributed at all to the problem. In fact, it is possible that a deeper well might have made control of the high pressure gas a little easier. So while agreeing with this executive would help our argument, we find it difficult to agree.
Still, it is one thing to advocate for offshore drilling in a responsible way. It is another to chant “Drill, baby, drill” like some mantra by a crazed sex addict. One is an act of reason; the other an act of mischievous passion.
Curiously, it is the people who yelled loudest “Drill, baby, Drill” who are most shrill in their criticism of Obama on this issue. So if we were to give them credit for possessing a shred of sanity, it is impossible that they would be arguing “We ought to drill offshore, but Obama is insane for advocating it.”
3) Katrina and Oil are both disasters to hit the Louisiana coast. Bush got blamed for Katrina; therefore Obama must get blamed for Oil.
In other words, it’s a habit of the mind. Habits of the mind are frequently quite illogical; and they frequently produce ideas that are completely false. But their effects can be quite persistent. So we need to look at this a little more closely.
Katrina is not Deepwater
What do these two events have in common.
1) They affected the Gulf Coast.
2) People were hurt.
3) The effect was big.
4) Someone was president at the time.
5) Both stories got a lot of attention from a bored press.
What is different about these two events:
1) Katrina was a natural disaster. The oil leak is a man-made one.
2) There were several days’ warning in advance of Katrina, none for the oil disaster. So the federal agency charged with preparing for natural disasters, FEMA, could have been doing something to make sure that it was ready to help if help were needed. No such agency exists for oil spills. Even if we were to assume it might be a good idea to cobble together such an agency (and it’s not) it would take years of political wrangling to get it operational.
3) The problem in New Orleans was the failure of a safety system for which the federal government had direct responsibility. The problem with the oil well was the failure of a company to adhere to the highest standard of safety processes. A Wall Street Journal investigation discussed in The Week clearly establishes nearly half a dozen distinct points at which BP departed from industry best practices, sometimes with stark criticism from their contractors. Even procedures required by the US government permit may have been ignored.
4) It is reasonable to make governmental entities responsible in helping to minimize damage during hurricanes and other natural disasters, it is reasonable to expect the government to be responsive when natural disasters strike. Agencies are charged with the task and their work is funded. It is not reasonable, however, to make governmental entities responsible for minimizing damage caused by man-made disasters, especially when those disasters are caused by profit-maximizing activities of companies that externalize the cost of failures. To do so tempts the most egregious abuses. Both the mortgage system bubble and the blown well in the Gulf are examples. Governments ought to step in not to save the institutions themselves, but to save American taxpayers from ruinous results. Sometimes, as in the case of TARP the one has required the other.
5) Bush attempted to use the Katrina disaster for grandstanding purposes; Obama has attempted to use the oil disaster as an opportunity to tighten up what little control the federal government has over the permitting process.
6) Bush supporters have, since Reagan uttered the incantation “Government is the Problem”, argued that less government oversight is unconditionally better. Such reasoning increased the probability of damage from events such as Katrina. Such reasoning increased the probability of an oil spill disaster such as the one in the Gulf. Such reasoning led to the deregulation of the banking industry that led to the need for the TARP program.
In short, it was the idea that “government is the problem” that underlay the real problem in both cases. That Obama opponents don’t immediately see this and capitulate on this dangerous mythology is testimony to the idea that hubris and deception too often trump reason and interest in the common good in US politics.
7) Katrina and events like it are inevitable. They are conditions of nature that arise regardless of how we behave. The question is in how to deal with them. The Bush Administration dealt with them by not showing up for a while. While we would like to believe that spills from offshore oil wells are avoidable - this is the first one in about forty years - they are likely to occur so long those who drill wells are not held to the highest standards and held accountable when they fail to adhere to those standards. In this respect, Obama has been showing up.
What ought to be baffling to most sane people is the idea that government has no place in regulating the behavior of oil companies; but that it is fully responsible for cleaning up their messes. What kind of a world does that create? A little more care in drilling probably would have averted this particular disaster. And that extra care might have cost a few millions of dollars. But instead, we have a spill that could cost billions in lost product and tens of billions to clean up. Limits on liability externalize that cost, shifting it to taxpayers. If oil companies had to pay more, they would have less incentive to cut corners, and the cost of oil production for them and for us could be a little lower, once the cost of big disasters is properly accounted for as a cost of production.
Oil Must Flow
Americans are totally dependent on oil. It is a dangerous addiction. And it is an addiction impossible to cure before the oil runs out. Until that time, even if we could spill enough oil into the oceans to kill every kind of marine life found there, we will be drilling for oil in the oceans. There is no other choice. To do otherwise means giving up most of the conveniences that we enjoy: things like food and water, good jobs, internet connectivity, and so on. Cheap energy got us all this stuff. And when cheap energy is gone, so will be the stuff. My grandparents lived without the aid of fossil fuel and theirs was a hard life filled with privation. I am not prepared to live it. Neither, I think, is the greenest of the radical greens.
So the oil must flow. What responsibility does Obama have? He has the responsibility to use the event to fix problems inside the federal government’s permitting office. He has a responsibility to use this event to frame America’s oil dependency as a problem. He has the responsibility to push for laws that hold oil companies liable for larger fines when they have some measure of culpability in oil spills.
Moral Hazard
Obama, however, has absolutely no responsibility to protect anyone from the fallout. While it is reasonable to see the government play a role in responses to natural disasters, it is less reasonable that the government should play a role in cleaning up disasters caused by failures of large corporations. TARP, for instance, was not about saving bankers from the consequences of their own bad decisions, it was about saving the American public from those consequences. The American government does not have the expertise to clean up oil spills. Nor is there any reason it should. If oil spills are to be a regular part of American life, then oil companies must be responsible for doing it themselves, or for funding third party efforts to do it.
It might be tempting to say that because no single entity has as many resources to clean up disasters as the federal government, that it ought to be the responsible party. In the case of natural disasters, it makes sense. But in the case of disasters caused by institutions that are acting irresponsibly in order to increase profits as is the case for banks and for oil companies, this line of thinking invites the very kind of excesses that cause disasters.
This is one slippery slope we cannot afford to slide down.
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04.09.07
Posted in Policy, Energy - NonRenewable at 5:44 pm by steve
Ought we to outlaw cows, ants, global warming and breathing itself?
A few days after the Supreme Court ruled that CO2 may be considered a pollutant, I received an e-mail from a leader of a prominent and effective public interest group. It asked me to call my senator and ask him to support a bill that would set a legal limit on CO2 emissions in the state of NJ. I will be the first to laud the people who drafted the bill and the people who support it for intending to do the right thing. They see CO2 as a problem. They acknowledge the link between CO2 and global warming, and the link between global warming and rising sea levels. They see that rising sea levels must inevitably threaten much of what holds value in NJ, its beaches, its low-lying areas. The highest point in NJ is just 900 some feet above sea level, and most of the state is much lower than this. Massive polar ice melts could permanently inundate large swaths of the state. Global warming is real. It is caused by CO2. It threatens NJ. Furthermore, NJ consumes a lot of carbonaceous fuel; certainly activities inside the state fuel the problem.
I agree completely that the generation of CO2 contributes to global warming. There are only a handful scientific questions whose resolution has been reached in the last century about which there is a broader and deeper consensus. I also agree that CO2 needs to be managed more wisely. Specifically, I agree that we need to generate less of it in the course of generating primary power, whether that is electrical power or the motive power for vehicles and machinery.
But I disagree with the approach. The problem is that it sets an artificial limitation on use. The problem of such arbitrary and artificial limits is, well, they are arbitrary and artificial. That tempts abuses. No. That’s wrong. We are talking about New Jersey. It promises abuses. It ensures abuses. Trivial caps will produce trivial and reasonably ignorable abuses. Meaningful caps must produce meaningful and not easily ignored abuses. Major caps will make life unbearable. And even major cuts made unilaterally will have no effect on the problem. No matter how one conceives such a bill, its only noticable and durable effect must be negative.
That means its a bad idea.
It amounts to legislating that people not breathe, for carbon dioxide is a waste product of the respiration of all animal life. If one sets an arbitrary limit on CO2, how does one assure that it is not met by smothering people? No, we don’t mean this as a serious argument; but it is the top of the slippery slope. Naturally, one would exempt the CO2 that is required to breathe, to exist. How could one not? A law that denies the legality of existence of all breathing creatures amounts to nothing but a farce. Now, what about the CO2 that is required to drive to work? Surely we cannot deny people that? Or to the supermarket? Surely one has to eat? Or the CO2 that is generated to light their houses? Or to warm them? Or to make their manufacturing jobs productive? Maybe we would unplug hospitals and police stations from the grid? But they have backup diesel generators that create more CO2 per kWH than the coal-powered electric power generating plants that they replace. So what activities would the caps outlaw?
We simply cannot get there from here. Capping is completely unhelpful.
Suppose, on the other hand, we were to artificially raise the cost of using fossil fuels until they are equal to the costs of other, more sustainable methods - methods that also do not generate CO2. Such a solution would drive people to choose power from sustainable sources. It solves the problem organically. People choose sustainable sources and by doing so switch from CO2 producing technologies to CO2 neutral technologies. Tax all sources of primary power deriving from fossil fuels to the point that people are indifferent about the two sources of power when judged purely from a cost standpoint. It’s simple. And it’s effective. It not only reduces CO2, it promotes sustainable energy solutions. And that is probably even more important than global warming.
We mentioned cows and ants. What about cows and ants? Where do they figure in? Well, global warming is caused by a number of gases of which CO2 is just one. Methane is another one. On a volumetric basis, methane is much more powerful as a global warming gas than CO2. It’s just that, except for raising farm animals for meat and milk, human activity is not responsible for the generation of much methane. And the amounts that are generated by these means have a smaller effect on global warming than does CO2. What are the sources of methane? 1) cows 2) ants 3) “methane ice”
Cows and ants house bacteria that break down carbohydrates in grasses and leaves that they eat, and these bacteria manufacture methane. The methane released is enough, on a global scale, to actually be worthy of consideration as a contributor to global warming, though a minor one. Methane ice is a solid that lurks on cool ocean floors. It stays solid by virtue of the high pressure of ocean depths and the cool temperatures there, especially in the polar regions. There is an area in Canadian territorial waters where there is so much of this material that it is considered to be a major energy reserve despite its remote location. But the material is found over a wide areas in ocean waters both cold and deep. These reserves contain far more methane than cows and ants can possibly release into the atmosphere. It is believed that a few degrees of warming might release huge amounts of methane from these deposits, accellerating global warming measurably. In short, one potential cause of global warming is global warming.
If we are to slavishly outlaw all the causes of the undesired effect, we must outlaw global warming itself. A little thought proves the idea of CO2 caps, well intentioned though it is, to be a little ridiculous. Any such proposed law violates a number of unwritten but crucial axioms about law. Among these axioms are,
1) a law must offer some hope of being enforcable. Enforcement must seem fair, not arbitrary.
2) if properly and fairly enforced, the law must have some beneficial societal effect.
3) the world that results from a fairly enforced law must not be universally perceived as being significantly worse than it was in the absence of the law.
4) one cannot outlaw acts of nature, rules of physics, mathematical relationships, facts, natural phenomena, stuff like that. Law is about regulating choices in human behavior for - moderating a human’s relationship to a defined social group or groups with other groups.
We have already argued that if CO2 caps were enforceable, they are by definition arbitrary in nature. If CO2 caps were part of a global strategy to manage CO2, then there would be hope of some good outcome. Requiring the US to participate in the Kyoto protocol and to work to encourage other non-participating nations to do the same would have some hope of producing a good outcome, though that is almost certainly not enough.
Simply capping CO2 production in NJ would put NJ residents at a potential disadvantage - if not in comparison to people in other societies, then in comparison to where they would otherwise be. And it accrues no permanent benefits for the cost. CO2 limits for the US might be more meaningful, but again, it can only be so to the extent that it forces us to choose more sustainable technologies. This we can do more effectively, I think, without the imposition of caps.
CO2 will continue to be released into the atmosphere until cheaper sources of primary power prevail. Or until the whole fossil-fuel fed monster collapses under its own weight. Caps will do less to move us toward the better of these alternatives than taxes on non-sustainable, CO2 generating sources of primary energy. Switching to other sources of power will accomplish the same goal without the problems of creating arbitrary shortages and violating our axioms that bound law.
Those axioms amount to hurdles not difficult for well-conceived law to clear. Caps on CO2 fail miserably clear any of the first three. And whether they mght clear the fourth depends on how such laws are written. If we are serious about preserving our environment, we need to do better.
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03.22.07
Posted in Energy - NonRenewable at 3:14 am by steve
Is Senator Imhofe (R-OK) advocating Communism? That’s what I had to ask when I viewed him trying to get Al Gore to pledge to use “no more energy than the average American” Gore recognized his question as a cheap rhetorical trick. He responded with an answer that makes a crucial distinction; it is not energy usage per se that causes CO2 and global warming, it is the burning of fossil fuels and the use of energy derived from that process. Use electricity derived from the wind or from solar or nuclear energy, and the global warming issues are mitigated.
Imhofe was not satisfied. He wanted a direct answer to his question. An argument ensued. Imhofe finally decided to ask questions and not let Gore answer. Very funny. Funnier still was the line of argument Imhofe wished to follow. He was arguing implicitly that Gore was trying to set himself up as a model and therefore ought to live as one. Gore was arguing that he actually was behaving responsibly.
If one followed the logic of Imhofe’s argument, it required nobody to use more energy than “the average.” But for that to be true, everyone has to use the same amount. When I was growing up, we called that Communism. Is Imhofe advocating Communism? Seems unlikely. It seems more likely that he was trying to set up a line of argumentation that would require that Gore choose between being a Communist and being a Hypocrite.
Is this the way we do public policy? This is not a hearing. Hearings are about establishing fact and debating policy. This is a lynching. Lynchings are about destroying people we don’t like, not because they broke the law or acted unethically, but because they are on the wrong side. Gore, fortunately, did not fall for it.
I happen to be much less sanguine than Gore about the possibility of a green future. I am unconvinced that we can change. And I am unconvinced that if we change we will do so in time to realize the putative benefits. Yet I support the notion that we must try. We need to act with determination. Fossil fuels are an addiction. One does not easily walk away from an addiction. That is the definition of addiction. But the purveyors of addictive goods extract more from their customers than do pueveyors of non-addictive goods. That is why we owe it to ourselves to work on sustainable energy. To free our necks from a stranglehold. It will improve both our breathing and our peripheral view.
Because of our addiction, purveyors of fossil fuels really don’t have to worry about US kicking the habit before things get pretty bad. Addicts don’t generally reform before they “hit the wall.” So why should energy companies worry if competing technologies are promoted? Imhofe and the rest of the lot would not need to deny global warming. They would only need to deny the necessity of interfering with free markets as did the Reaganites when confronted with sustainable energy proposals. So what’s the ruckus about over global warming? Why must Gore be crucified in the Senate? Why are free markets no longer sufficient to guarantee oil companies excess profits?
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11.13.06
Posted in Energy - NonRenewable at 4:32 pm by steve
If we extract things from the ground we invite disaster
- Hopi Saying quoted in Koyyanisqatsi
“Where does oil come from?” I asked my father.
“It comes from the ground,” he said.
“What happens when we run out?” I asked.
My father emitted one of those “oh you are so young and stupid” laughs. “You’ll never have to worry about that. There is plenty of oil in the ground.”
Conversation over.
That conversation occurred when I was four, some decades ago. I remember it like it was yesterday, because it was something I was genuinely worried about. I was living in a house with a stove that burned wood, a refrigerator that sipped propane instead of using electricity, rooms that depended on “Tilly Lamps” and hearthlight for lighting at night. And yet I understood the critical importance of oil.
Not so many months after that conversation, the small pond that delivered water for our baths and flush toilets dried up, and so too did the large galvanized tanks in which we collected our potable water. Some 40 miles away by rutted dirt road there was potable water. And a small tanker truck made the trip daily. The lives of the twenty missionaries and the several hundred lives of the boarding students they served hung by a single tenuous thread. And that thread was diesel fuel. If we ran out of fuel, or if that truck broke down, our only hope would be that a handful of people in the city 40 miles away might be willing to drive out in their cars and bring us back to a place that still had water. The students would have to walk tens of miles back to their villages where women with clay pots might walk most of the morning to fetch water for their families.
That was a land that I loved for all that it was, a collection of rocky outcroppings high on the plains of southern Africa. We enjoyed a remarkable closeness to nature. And nature, here, was spare but pleasant. Even the air smelled delicious, redolent of lantana or orange blossom, at least during the rainy season.
It was called the rainy season because during the dry season it never rained; but during the rainy season it almost never rained. During the year in question, my father took the opportunity to dig up the primordial muck from the bottom of the dry pond and till it into his sandy garden to improve the agricultural yield of the vegetable garden. The thick, black material was much richer in organic material and minerals than was the poor, sandy soil in our back yard. And it would grow bigger, healthier vegetables. It also hung on to water better, so irrigation was a little less important. I was impressed by his ingenuity and his entrepreneurial skills. But I was young and I had little use for vegetables, even though the only other things to eat were stringy cuts of oxen and oatmeal with worms.
Part of the unease I had about the pond muck was like the unease I had about the oil. There were several elements to the equation. One was the idea of digging up a resource and selling it at the cost of extraction, when clearly its value was a great deal more. Another was the opportunity cost. How do I know that I am going to use this resource in a way that might be better than someone else might who succeeds me? A third was the notion that a resource could be owned by virtue of claiming it.
In the case of the black muck, there is hardly any chance that anyone else would want the stuff. And, when the rains would come, its removal would mean that the small pond would have a little more capacity to hold water and that water might be a little more clear. So there would be social benefits that would accrue by virtue of its removal. If those social benefits were as big as the value my father received for his trouble, then probably everyone was better off for the effort, even if it meant a scarce resource was being used up.
But in the case of oil the value of the product was incalculable. Nor was it clear how its extraction per se benefitted those who were most closely related to it by virtue of their proximity to it. I understood that they might be compensated monetarily; but I did not understand how we would know whether that compensation was actually fair. Years of reading about capitalism and the laws of supply and demand have taught me completely how it works and why I ought to consider it fair. I understand the economic arguments well enough to occasionally catch prominent international publications being wrong, yet I find these arguments are completely unconvincing when we start asking questions about what happens to our children and our grandchildren after the resources on which we built their lives become unavailable.
Some years later and in a completely distant land, in one covered far past the horizon with crispy snow, in one plagued more usually with lack of sun than with lack of water, I discovered that my grandmother cooked on a stove fuelled by natural gas. And I remember experiencing the same kind of odd panic as when I learned about where oil came from. “Not to worry,” I was informed, “it is provided free by the gas company in return for extraction rights on this property.”
So, if I understand the situation, my grandparents, being simple farmers, had evidently traded what might have amounted to hundreds of thousands of dollars worth of natural gas, perhaps more, in return for perpetually free gas service.
On one hand I am filled with outrage by the idea that they might have been treated so badly. On the other hand, I have a kind of abiding respect for the determination they had to live a simple life, one unaffected by the trappings of consumerism.
It is wrong for me to assume that they were not smart enough or shrewd enough to have driven a better bargain, because if they had been so, they might not have chosen to do otherwise. More money would have made their lives a tiny bit more comfortable, but it could never have helped them live any longer. Nor could it have helped them be profoundly happier. As much as I am inclined to fault them for not negotiating a good deal, I am proud of them for having a vision of a life lived close to the land - not just in proximity, but in relational terms. They were neither victims of consumerism nor were they its exponents.
The perverse streak of rejecting modish behavior runs in my own family, but the conveniences offered by a life of cheap energy are ones that hardly any sane human is capable of rejecting. So while I understand the issues of energy - its relative scarcity and the problem of it being artificially wasted because it is so terrifically undervalued - I find myself immersed in the normal modern life. My greatest energy-saving contributions are 1) living in a well insulated home, 2) driving a relatively old but fuel efficient automobile and 3) replacing all my incandescent bulbs with fluorescent ones. These are not altogether trivial, but I wish I could do more.
For years I have either worked in some energy related industry or another or tried to stay well-read on the topics. Recently I have come to strongly sense the nearness of the very catastrophe my own father promised me I would not never have to worry about. It will hit during my own (expected) lifetime. The catastrophe is called “Peak Oil.” Google that term and read some of the predictions.
Peak Oil represents a point in time when the amount of oil pumped out of the ground decreases every day. And when this happens, the price must necessarily skyrocket. Before long, a lot of people who have built their lives around the assumed abundance of this resource will find that it is unavailable.
in 1956, Marion King Hubbert accurately predicted the peak oil production in the US, some time before that short conversation with my father. And his technique has been used to predict when peak oil will arrive globally. Some people believe that moment is now. Others believe it is still as far off as two decades from now. Either way, it is long past time to act as if oil is a seriously limited resource and make other plans. There is no question of if it will run out. The question is when. And the pain starts not when there is no oil The pain starts when there is less oil available this year than there was last year. That will definitely happen sometime within the next two decades. Some believe it has started. Whenever it does happen, civil strife is not far behind; and people start to hurt each other. Read Jared Diamond’s Collapse.
Collapse paints a picture of a number of cultures that overran their local environments. These cultures moved to new frontiers where resources were plentiful. They quickly reproduced, then they found that energy and food resources were not sufficient to support the population. What happened next depended on a number of factors, but some populations like the one in Chaco Canyon in America’s Southwest turned to cannibalism, and then disappeared altogether. Their distant neighbors, the Hopi, might have watched this happen and drawn on the experience of their neighbors to build their own mythology. Cannibalism was also a result of the exhaustion of resources on Easter Island. It is less clear whether cannibalism was part of the collapse of the Mayan civilization, but it is clear that environmental problems and resource shortages played a major role.
Our own culture depends so profoundly on artificial sources of energy that it is impossible in a short article to summarize them or to describe how profoundly everything would change if the supply were permanently disrupted. For example, North Americans depend directly or indirectly on corn for a huge share of our food. Corn produces cooking oil, flourrs, and starches. It is also used to make sweeteners and to feed cattle. Yet when one accounts for all the energy represented by the corn as food, roughly half of that amount of energy is derived directly from oil. It goes into the corn as the inputs of fertilizer and farm machinery cultivation. Take away the energy inputs to cultivate corn, and most of us would have to learn how to be farmers again.
But before we did, many of us would starve. And while we were waiting for the inevitable, we would not be able to drive our cars, refrigerate our food, light or heat or cool our houses. We would not be able to get food at the store because it would not be arriving on trucks or being shipped by railcar or airplane. Every bit of trade and commerce would break down for lack of energy. Everything we wanted or needed would be unavailable. It is not a pretty picture.
This suggests that when peak oil comes, sometime in the next twenty years, we had darn well be ready for it. Otherwise we will be living out the disasters of the Easter Islanders, the Maya, and the Chaco Canyon Indians. We will have proven ourselves to be far less attune to the forces of history than the Hopi.
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