Tuesday, July 15, 2008

Energy Idea that Dipstick Politicians Should Love

Energy is on the tip of just about everyone's tongue. Gas prices are high, winter heating oil keeps chugging higher, solar cells are becoming cheaper for the homegamer to install in the Southwest, and even my homestate is witnessing municipalities waking up to the idea that coastal communities should allow their citizens to install wind turbines if they want to pay for it. I'm all for spreading out power generation and putting control into the customer's hands, and heck, transmission losses are reduced because of onsite power generation and use. Still, we are a long ways away from a solid basket of energy sources to power the future. We, as is the world, is still a coal powered place with lots of oil for transportation.

Part of our nation's problem is that we have companies and activists pouring millions of dollars into political parties to shape policy, that affects everyone, to meet their specific goals and needs. Enviros pour money into the Dems coffers to make sure we eventually live in hairshirts and eat grass. Prime example is California where they have not built a coal power plant in who knows when, but they suffer from rolling blackouts. Gee, I wonder why: increased demand, stagnant supply growth. The republicans are no better with their oil, coal and nuclear money (ever wonder why McCain is so pro-nuke; he's smart and well funded by them), which skews their views towards favoring those industries. Could there be a way to satisfy both of these lobbies, and benefit the nation? Here's a shot in the dark from one crank.

There are multiple issues at work. We have an issue of energy for electrical generation and CO2 issues. We then have the energy issue of transportation fuels. We have issues of energy generation and storage from intermittent sources, and of energy conservation. I like the T. Boone Pickens plan. The big reason is that it is an idea. We don't have a plan right now, and haven't had one ever really. It's usually just: get more energy. Pickens is trying to take advantage of our abundant energy potential in wind and help free up our natural gas usage to go to fueling our cars so we import less oil. He tackles both electricity generation and transportation fuels in one plan. Brilliant. Let me tackle energy as energy czar.....

Let's start with the here and now. We can't change overnight, but $4 gas sure is changing behavior rapidly. Let's go after the fat in our oil use first. Aggressive tax breaks for hybrid vehicles, PHEV and all electric 3 wheelers like the Aptera. If we could have them for SUVs for a decade, alt cars can get them as rich and as long as SUVs enjoyed them. Get rid of the tariff on sugar cane Brazilian ethanol and end our ridiculous corn ethanol subsidies (yah, food prices go lower). Study different metro areas for opening up commuter systems run by private companies. Let a private business determine if it is feasible and make them work it in areas that make sense. Offer up tax breaks for rail companies to develop regional rail systems between cities. Long distance rail travel is not feasible across the 3000 mile wide continent, but high speed regional systems in areas like the Bos-Wash corridor work. Could not the same be done between Chicago-St. Louis-Indidnapolis-Cincy-Louisville-Columbus-Cleveland? Start small with the super high speed trains like Chicago-St. Louis non-stop; hell get Bos-NYC a 175 mph train. Those distances are more in line with those fancy Euro systems. I once took an overnight train from Paris to Barcelona. Good experience, but that's the max I would want to be in a train (600 + miles). Lock in a gas tax that will create a floor in the price of gas so that gas does not get below $3.50. I decided that arbitrarily, but with the promise of gas never becoming "cheap" again, many folks will not slide back into SUV dream world. Here's the important part: use the tax revenue for developing battery technology which is critical for electric vehicles and for energy storage for the next step.

Sure, I just marked out major moves to destroy oil demand and added a gas tax so that the price will never dip below $3.50, but why not help prices a bit now? Sure, let's open up offshore drilling, allow for municipalities and states to decide if they want to reopen closed down refineries or build new ones, open up the gigantic, trillion barrels of recoverable oil shale in Colorado on federal lands, and reduce how much oil we have to import by increasing domestic supply. See destroy demand for step 1, and increase domestic supply for step 2. Now my argument to enviros is if the Norwegians and Brits are so environmentally friendly, how come they do offshore oil drilling? Busted. Don't worry enviros, I have something to make you feel all warm and fuzzy. Offshore and oil shale will need higher oil prices to be profitable, and projects will take a while to come online to make a dent in prices, so the current oil price climate is a benefit to these projects. These projects will help in the short term of 10-20 years.

See federal land rights and leases are going to generate big time money when companies like Shell start using oil shale deposits and wildcatters start drilling offshore. Let's set aside all of the land lease revenue dollars for alternative energy R&D, nuclear reactor subsidies, battery development R&D, electrical grid investments, tax breaks for alt energy companies. Let's also set aside some of those revenues to support breaks for consumers in colder regions who want to install geothermal and air heat pumps to heat their homes rather than use oil and nat gas. Those systems can be between 10-17K to install. I seriously recommend home heat pumps after using one the last year for cooling and heating. Amazing work if you have the area to support it, and since they work in Canada, I think they can work almost anywhere in America. Let's help folks north of the Mason Dixon line with some help in making that choice if they want to to change how they heat their home. Why not an entire cost of the unit tax break. We gave tax breaks for SUVs for years and that did nothing but move doctors, lawyers, and McMansion moms around. These heat pumps heat and cool homes. We would transfer the wealth from oil revenues into funds for the nascent alt energy sector of our economy. Let's have oil and nat gas revenues be the stepping stone to the future of alt energy and nuclear. Enviros would compromise on the oil drilling now, while everyone would see the benefit of a lower oil import bill, which is a large chunk of our trade deficit and reason of the debasement of the dollar. This move to partial and then almost a complete electrification of the transportation industry will be long term 20-40 years. Right now in reality, we need to set up the systems to offer alternatives that get people out of single person riding in a time convenient manner, and prepare the nation for a transition to an electric future like they used to show people when they visited Epcot center.

This would be absolute gold. If W came out and said, "I love me some oil, hmm, yeah, but we must use this oil revenue for alt energy investimications" it would be a big step by a pro-oil guy. If Obama or Pelosi came out and said the same thing only different, "I think we should use oil exploration & drilling today for funding the alt energy of tomorrow", it would be political gold. The political center cares about the environment, but it also cares about its wallet and having the lights on when they want (hint hint Obama, fuck off for telling me where to set my thermostat). This is what the state of Texas is doing as it has displaced California as the number oeen producer of wind energy in the 50 states. Texas!!! Enviros would love it because it is a long term idea to move us away from fossil fuels and limit CO2 levels. Everyone else can like a way to avoid paying at the pump with other modes of transportation, and help with energy sources that can directly help them without the variability of oil price swings. Pickens and studies say we have the potential to displace 20% of our electricity generation with wind power. An area the size of Ohio located in the southwest covered in solar cells and solar thermal plants could generate tons of electricity to displace our nat gas and coal fired power plants out West. We would still use coal and nat gas a bit, but in reduced roles. Electric companies would like this because they would receive help in forging ahead with alt energy investments to provide power on a mass basis without the fear of a solar burn out or anti-nuke demonstrations like happened after the last solar and nuclear boom. I think some electric companies have to fear the idea that solar PV and thin film is going to get so cheap that individuals in the southwesta nd southeast start buying PV and thin film with grid tie ins to reduce (or eliminate) grid usage and cut into electric companies' profits. As we transition our transportation fleet from an almost entirely liquid fuel basis to a mix of liquid and electric, and hopefully one day mostly electric, we need to have steady leadership that will produce some short term tangible changes while maintaining a long term focus. We needed to invest yesterday, but we can't. No use crying over what we cannot change, so let's start it in a way that helps us here & now and for the future.

No comments: