Friday, February 24, 2006

The President's sudden conversion to energy policy

Welcome to Charge: the future of energy

by Daniel C. Sweeney, Ph.D

As I am fond of insisting to my friends, nothing can diminish the unconditional love I feel for George W. Bush whom I believe to be anointed by God to lead this country. Nevertheless, I would have to say that if anything could diminish that love, it would be what passes for an energy policy on the part of this Administration.

This week our President announced that the U.S. was on the verge of energy breakthroughs that would startle most Americans. That statement is as disingenuous as the famous “mission accomplished” nearly three years ago.

As an energy analyst I am inundated by such claims. Scarcely a day passes that I don’t happen upon some company I’ve not encountered previously announcing a “breakthrough”. Consequently my arousal threshold is becoming increasingly elevated.

I am reminded here of a luminous essay penned by the great French actor and critic Antonin Artaud entitled “No More Masterpieces”. Artaud was a radical modernist in the arts and he abhorred the notion of sacred masterpieces, particularly in regard to the theater. I feel similarly about “breakthroughs” in the energy business. We need to stop talking about them and expecting them to occur. Like artistic masterpieces they belong to the past. The last real breakthrough in energy was Nicola Tesla’s development of three phase alternating current in the late eighteen eighties. Since then it’s all been downhill.

I don’t mean there isn’t progress, but there aren’t breakthroughs. Here’s why.

Breakthroughs imply the notion of some outside-the-box kind of guy having a brainstorm that is quickly turned into a technology revolution because everything’s moving at Internet speed now. Things like that happen in the software world where the outside-the-box guys are simply writing code and all nighters fueled by plenty of cappuccino can result in a new search engine and a new way of life. Unfortunately, energy revolutions are not software downloads. They involve massive construction and mega mega bucks, not some mad money thrown together by a venture capital firm.

Let’s consider cellulosic ethanol which Bush is been promoting—I wonder who told him about that? A Canadian company called Iogen has been promoting some pretty interesting technology involving enzymes for several years, and there are various labs doing things with micro-organisms. Fairly low cost cellulosic ethanol probably is doable, but right now there is only one plant that’s even in the planning stage in the U.S., and that’s not due to produce anything for years. Most people who’ve studied the process think that even the most massive exploitation of available land resources for alcohol production could only produce about a third of the fuel used in transportation today, and building up the infrastructure for that would take decades.

And where’s the money going to come from? The financial community shows no likelihood of springing for ethanol on a massive scale, and here we’re talking about trillions, not billions. Is Bush just going to subsidize it and pump up the deficit some more? He’s already spending one half trillion on the military. Is he going to shift some of that away to energy?

Bush also visited the Ovonics Division of Energy Conversion Devices and talked that up. The Oshinksy family that runs the thing are really smart people and undoubtedly they’ve advanced the art of battery design considerably, but the fact is that the auto manufacturers are not developing the kind of plug-in hybrids that could significantly lessen dependence upon petroleum. Whatever battery breakthroughs are going to occur at Ovonics or elsewhere are pretty meaningless unless they’re widely adopted.

Bush’s so-called “clean coal” initiatives are another big joke and anything but breakthroughs. Unless you’re talking about coal gasification and/or sequestration, you’re just throwing words around. Truly clean coal involves everybody who is operating coal fired plants doing extensive retrofits which cost tons of money. Adding a scrubber just ain’t gonna cut it. No one is going to do the retrofits absent strong financial incentives, especially if they can lobby the legislature to pass bogus “clean coal” legislation that puts “voluntary compliance” measures in place. Incidentally, I can’t help asking myself why in God’s name would someone legislate voluntary compliance. You can always volunteer to pollute less if you’re so inclined. Older legislation didn’t oblige you to pollute. The market did, however. Plainly put, it’s a lot cheaper to pollute than to renovate your plant.

To return to our initial subject, technology breakthroughs, the fallacy here is that technological breakthroughs automatically diffuse through the industrial establishment. In fact there are countless examples of countries developing technologies and then doing nothing with them. England developed AC electrical power, albeit in crude form, before the U.S., but neglected to set up generating stations. An Austrian inventor made a vacuum tube amplifier the same year as the American Lee De Forest, but did not promote his invention. U.S. electronics firms developed discrete transistors, videocassette recorders, cellular telephones, and optical disc players and then let Japanese and European firms bring those inventions to market and profit by them.

Bush is partially right in his pronouncements concerning new energy technologies, however. A tremendous amount of research and entrepreneurial activity in the area of new energy technology is taking place in the U.S., but that doesn’t mean it is going to see expression in an altered energy regime.

If we as Americans had the national will, which we don’t, we could effectively address our energy problems with current technology and we could plan for incremental improvements that would ultimately make the task easier. The likelihood of that happening is very slight, however.

The problem is fundamental. Previous U.S. energy transformations well as transformations within other infrastructure technologies such communications and transportation were very largely market driven and rewarded investors with excellent short term and mid term profits. It’s difficult to see how a replacement technology within the energy sphere would do the same. And yet attempting to impose top down, command economy imperatives is fraught with a multitude of hazards. There are no inherent feedback mechanisms for stabilizing command economies other than infrequent elections, and they frequently pursue ill-conceived policies long after a market driven economy would have abandoned them. They’re also subject to corrupt practices.

In short the problems we’re facing have more to do with the nature of our society and our lack of a pre-existing model for an energy transformation that would free us from dependence on foreign fossil fuel. Technology itself does not constitute the biggest hurdle.


Yvonne said...

Editor's Note: Please consider the first paragraph to be the author's tongue firmly stuck in his cheek.

Solarbird said...

One thing I've been doing and telling other people who ask me for advice what to do is try to push through local planning changes. The best way to sell it that I've found is this: developers are currently required to plan for automobile users. They are not required to plan for pedestrian, bicycle, or other alternative forms of getting around, and the support structures that make these alternative forms useful. This is a strong subsidy supporting driving, and as such, is only one of many. Very few people will argue that only cars should get this "special treatment" and very few people will argue against designing for bikes and walking as well as cars. It passes the "reasonableness" test.

Another thing that has worked for me is pushing the idea that being car-dependent is a bad idea just in general. The idea that relying on exactly one and only one method for getting the things you must have on a daily basis is a very bad idea resonates pretty well in insecure times like now.

Neither of these weans people from cars, per se', but it helps set up the infrastructure that will allow people to explore the possibility. And in the event of crisis situations (or just sharply rising prices), will allow people to continue getting around, at least somewhat.