I only recently became aware that the 2009 Energy Conference put on by the Energy Information Administration has posted the audio and transcripts of all of the sessions. You can hear the audio or download the transcript from my session – Energy and the Media – here. I summarized the overall conference in two posts right after the conference:
My fellow panelists were Steven Mufson from the Washington Post; Eric Pooley from Harvard, (and the former managing editor of Fortune); and Barbara Hagenbaugh from USA Today. The panel was moderated by John Anderson of Resources for the Future (and a long-time reporter and editorial writer for the Washington Post).
There were questions on the oil price run-up of 2008 (and how the media handled the coverage), false balance in reporting, scale of biofuels versus petroleum usage, peak oil, and the role bloggers are playing now with respect to reporting news.
I will extract portions of my comments below, correcting the transcription as needed for clarity. (For instance, when I said I also write for The Oil Drum, it was transcribed as “aldrum.”)
Mr. Anderson: …subject of energy of the media, a rich subject if ever there was one. My name is John Anderson. I’m joined here by four people who are in the midst of that subject. From my left, Steve Mufson, who writes on this for the Washington Post, and incidentally was also a Beijing Bureau Chief of the Post for several years which turns out to have relevance to our subject. Eric Pooley, who had a long career at Time Incorporated. He was national political correspondent among other things, and managing editor of Time, and has recently been at the Kennedy School at Harvard. Robert Rapier, who resides over the R-SQUARED Energy blog which I and I suspect many of you pay attention to, and Barbara Hagenbaugh who covers economics and energy for USA Today.
I would like to start off by going around the table and asking about a piece of recent history clear in everybody’s minds — four dollar gasoline last summer, $147 oil. That was a huge story for several months. In retrospect, how did we do? Did we get it roughly right? Did we have the causes and consequences roughly right? And in retrospect, what could we have done differently?
My response to that one:
Mr. Rapier: I’ve got a stat counter on my blog, and it tells me what brought people in there and where they came from. “Why are oil and gas prices rising?” is probably the number one keyword search that brings people in. Sometimes ironically from the media, they want to know why oil and gas prices are rising.
I’m an inventory watcher, and I use the EIA data religiously every week when they put out the statistics. On Wednesday I go in and I look to see what oil inventories are doing, what gasoline inventories are doing because we have a pretty good idea of what the gasoline inventory situation is.
So in 2007 we had, I think it was ten or eleven weeks in a row, that gasoline inventories fell, and they fell well below the average range just as we were going into summer driving season. And I got in a little bit of a friendly banter back and forth with Doug McIntyre who wrote This Week in Petroleum at that time, he works for the EIA, and I said I think we’re heading for record gas prices by Memorial Day. He said that generally prices pull off before then and level off. And I said, “Yes, but look at the trend here. The gasoline inventory trend was like this.” I said, “Something has got to give here because demand is just about to pick up.” And sure enough, that’s when we hit $3.00 gasoline by Memorial Day.
In the world oil markets it’s a little bit more murky because we don’t always have good inventory data. Again, we do in the U.S. We’ve got pretty good data in the U.S., but gasoline — if you want to know what gasoline prices are going to do, pay attention to inventories, and the time of year. I mean, if gasoline inventories are low in the fall; it’s not such a big deal. Gasoline inventories low going into summer driving season, that’s something you better watch out for.
Hurricane season. Going into hurricane season you better have good inventories. And we didn’t last year, and that’s again — when the hurricanes started to come in, I warned people we’re going to see some gasoline shortages. And we did because the refineries went down. We didn’t have enough inventories on hand, and suddenly spot shortages.
I was then asked about peak oil:
Mr. Anderson: I hope the EIA is listening. There may be someone from the EIA here for all I know. Robert, you have dealt recently in your blog with the interesting question are we running out of oil? This is one that all reporters constantly have to deal with. How do you deal with that?
Mr. Rapier: It’s obviously a very controversial subject. And often I see very frequently media stories dealing with peak oil as we’re actually not running out of oil. We’ve still got a trillion barrels in the ground. So the issue is not running out of oil. We will never be running out of oil. We will have oil for one hundred more years. It’s can we get it out of the ground fast enough to keep up with demand growth? And that’s where the problem is going to lie in my opinion and forward.
We may see an oil production peak in the next three to five years. There are a lot of very authoritative people who believe that that’s the case. There are some people that would believe that renewables are going to come in and fill that void. I’m not one of those people. I believe it will — there will be a contribution, but if we have a world oil production peak in the next three to five years we’ve got a serious problem.
But again, it’s not about running out of oil. And that’s the most common misconception I see about peak oil when people write about peak oil. They want to debunk that by showing how much oil is left in the ground, and that’s what we’re talking about, issues like one trillion barrels of shale in Utah. The trillion barrels doesn’t help if it takes more than one trillion barrels worth of energy to get it out. In that case it’s useless. It takes a tremendous amount of energy to get that oil out. So we don’t have a trillion barrels of recoverable reserves, maybe a very small fraction of that because the energy balance on that is very marginal.
On the issue of there not always being black and white answers to some of the questions:
Mr. Anderson: Barbara, how does a reporter working from day to day deal with the problem of editors and readers who want sharp clear answers to questions like this that are very much in controversy and very often as Robert suggests aren’t even quite the right questions?
Ms. Hagenbaugh: It’s complicated, and you know, USA Today a lot of times, I’ve got this much space to do all that. So I mean, the most important thing is like Robert just said, there’s two sides to this story and this is always to try to bring that out. I sometimes — editors get frustrated with me because I don’t come out and say this is how it is and this is what the answer is.
On the question of false balance:
Mr. Rapier: I put the question to my readers on my blog and also at The Oil Drum where I write—I said, “Energy in the media, what do we need to talk about?” False balance, probably the most popular answer. One reader gave the example: “scientists discover that the earth is round: flat earth society disagrees.”
The problem is it’s not always clear who the flat earth society is especially in the new biofuels technologies. Algae into biodiesel, is that flat earth thinking that we’re going to be doing that on a grand scale within five years? I can’t even tell for sure early on. I have to really dig and dig.
Steve (Mufson) interviewed me about three or four years ago. It was very early on whenever I was writing about ethanol. He interviewed me for about an hour and one tiny snippet showed up in that story. And I thought, boy, that was a lot of work, but I understand why he did it now. Steve is one of the best writers out there on energy. He does his homework. It really takes a lot of discussion to determine whether I’m credible or a complete nut, and that’s what you have to do. And not everybody does that. And so you get some of this false balance reporting; lazy reporters who simply want quotes from both sides. It’s important for the reporters to really do research. And the good ones do, and the good ones don’t take the false balance approach.
Then came an exchange that was longer than I remembered it being:
Mr. Anderson: Robert speaks with some authority. He’s the one person on the panel, and one of the few people writing on this subject who has a technical background. He’s a chemical engineer, unlike most reporters. Steve, did you want to add anything to that?
Mr. Rapier: That means I can get away without wearing a tie, though, and people forgive me for that.
Mr. Anderson: What about ethanol? How should a reporter approach the future of ethanol? What are the questions he should ask?
Mr. Rapier: Energy in and energy out is very important, but it’s not the only important thing. And I give an example. Some people say that if it takes more than a BTU of a fuel to make a BTU of ethanol that’s a no go. It’s not really because coal, for instance, is quite cheap. So if you took two BTUs of coal to make a BTU of liquid fuel ethanol, from an economic standpoint maybe that’s doable. So the energy in and energy out is not the complete story.
Unintended consequences — I don’t think we spend enough time thinking about what can happen here. What are the things that can happen? Cellulosic ethanol -we turn all this biomass into cellulosic ethanol. What are the implications?
There was a story a while back. Michigan, they figured out they might not have enough trees to fuel this cellulosic ethanol plant because cellulosic biomass in general has a very low energy density. And that’s what I call the logistical problems of cellulosic ethanol. You have to go out farther and farther to fuel this plant. Do the calculations of a mid-size cellulosic ethanol plant; it is going to consume the equivalent of about one million mature trees a year. So think about a 20-year lifetime, 20 million trees, that’s a lot of biomass. And as you get out to the edges of that you’re burning up all your energy getting it back into the plant.
So, those are the kind of things I would question. Your logistics. How are you going to logistically pull this off? How many trucks in and out of days is that? And how in the future are you going to fuel this? A lot of the biofuel options we have are really recycled fossil fuel because they’re entirely dependent on fossil fuel. If fossil fuel prices go up —they have to go up because that’s what they are. They’re fossil fuel. And we really need to go to something — and I talk about the Brazilian ethanol example.
I’m a fan of Brazilian ethanol. I was in India last year, and they do the same thing. I went through a plant. They end up with a waste material at the plant that they have to dispose of bagasse It’s free fuel. Now we don’t have something — in Louisiana and Florida they could potentially do something like that, but the economics of selling molasses and sugar are better than turning it into ethanol, but they do the same thing. They’ve got all the bagasse, and they use it to fuel their plant. A model like that will work. And people sometimes say — and this is some of the false balance that we discussed earlier. Dan Rather, Frank Sesno out there saying, “I was in Brazil. I saw what they did. We can do the same thing.” The problem is we’ve got a higher population than Brazil. We use six times the per capita energy of Brazil. It’s completely apples and oranges.
So, no way can we emulate Brazil, but I see person after person saying the ethanol miracle in Brazil was done because the government set the mandates and they set the standards. What they don’t tell you is that the ethanol miracle really is about 90-percent oil. Ninety percent of their energy comes from oil, and Brazil makes a lot of oil per capita, and they’ve got a lot of oil reserves. That’s how the ethanol miracle in Brazil happened.
On the question of trying to sort what is and isn’t credible:
Mr. Rapier: It’s like Eric said, there’s a lot of garbage out there. And the thing is you can find an argument for any position you wish to make. I can support the flat earth position by things I find on the internet. I can go edit Wikipedia and then use that to support the point that I’m trying to make. So you really have to be careful and you have to know what’s credible, what’s not credible. It’s like drinking from a fire hose. There’s just so much information.
When I’m researching a story, I could take either side and I can support it.
It then went into Q&A from the audience:
Mr. Hall: Yes, Chris Hall, independent oil and gas producer from California. I enjoyed the discussion on ethanol because I think as an industry we spent $135 million to fight Proposition 87 which would have imposed a severance tax, but EIA and the country is focused on reducing our dependence on foreign oil by increasing investment in green energy. And yet the forecasts show the need as you referred to for large supplies of oil and gas and coal during the next 20 years. Meanwhile, the domestic fossil fuels are under attack in Washington, as well as state and local governments, to punish them for last year’s high prices, for polluting the environment, to raise funds to offset deficits, to pay for development of renewable resources, all of which appeal to the public. For example, the Administration 2010 budget would result in the elimination of most of the R&D budget from Department of Energy for the oil and gas industry, would increase 150 percent in oil and gas taxes and a 40 percent reduction in drilling by one account. This will only lead to less domestic oil supply for our needs. How can the media help explain the problem so that we just don’t make matters worse?
Mr. Rapier: I spend a lot of time writing about that kind of issue, and make no mistake I’m a big fan of alternative energy. I would like to see us produce all our energy domestically, but I’m a realist as well. I submitted a question to Secretary Chu yesterday. He did not take it, but it was along the lines of I find it very ironic that he is calling on OPEC to continue producing and at the same time domestic oil and gas has essentially no part in the Administration. So I agree with that. I think the reality is we’re heading down a path here where we’re likely to increase our imports because we’re going to disincentivize our domestic production.
And I know the administration is counting on renewable to fill that gap. I don’t believe that’s going to happen. I believe they will play a part. I believe we should continue to fund that, but I’d also like to see the Administration take a more realistic view of some of these forecasts. Seventy-nine percent oil and gas, maybe that’s not desirable, but that’s what it looks like it’s going to be. So we prefer to get that domestically, I think, as much to the extent possible, but I think we’re just going to be importing it more from OPEC when biofuel targets fall short. We’re going to be counting on Venezuela, and you’ll hear future energy secretaries continue to call on OPEC: “Please don’t cut us off.”
My friend Morgan Downey then asked which books I recommend:
Mr. Downey: Morgan Downey. Just written the book Oil 101. And Robert, I read in your blog this morning that a survey came out earlier this week that said that more than half of Americans could not name one alternative fuel. And is there a role for books and other slow media in improving the average person’s energy IQ and what books in oil would you recommend?
Mr. Rapier: Well, Morgan knows that I’m 250 pages into his book, which is a fantastic book, by the way. The survey you refer to, that was pretty disheartening to read that. I think 51 percent of people surveyed couldn’t name an alternative fuel. Thirty-nine percent couldn’t name a fossil fuel. Nineteen percent said I couldn’t care less. I think you’ll find and I see the same thing, interests waxes and wanes with oil prices. Oil prices are high. Gasoline prices are high. People want to know what’s going on. So the best thing for your book would be for gas prices to start setting new records this year. People will pick up the book and they want to know what’s happening? Why is this happening?
Mr. Downey: Any other books in oil you recommend, or what do you read?
Mr. Rapier: I read a lot of different view points. One of the first ones I ever read was Twilight in the Desert which I think is a good book. It has some faults, but it kind of brings attention to the potential issue with Saudi Arabia. So that was one of the early books that influenced me.
Within the industry, I’m reading technical books on refining. And this is what I told Morgan, that his refining section is incredibly detailed. I don’t think there is a popular book that exists like that with that kind of information. Within the refining industry I’ve got technical refining books, and those are the things that I read to — how do we troubleshoot the cat cracker – and you don’t go into that sort of detail, but for a lay person who really wants to be informed about energy, I can’t give your book a high enough endorsement. I think it’s a fantastic book.
Mr. Rapier: Gusher of Lies by Robert Bryce, I really like that one, too.
There was a question about fact-checking, which was the last thing I responded to:
Mr. Rapier: I have a big issue with fact checking myself. I saw that with the SPR, Strategic Petroleum Reserve. The rate of fill that was reported and picked up and reported and reported was wrong. I showed the actual numbers from the SPR. It was about half what the reported fill rate was. And those kinds of things annoy me. And I wonder why more people don’t. Somebody, somewhere calculated a number based on some monthly fill rate and extrapolated it for a year, and it was just wrong. And then everybody picked it up and just ran with it. So I sympathize.
Anyway, my contribution was only a small part of the whole, which I think went on for about an hour. I would have published this sooner, but only became aware of the transcript about a week ago.
When I was recently transcribing the interview that Vinod Khosla did for the Milken Institute, something he said caught my attention:
Hybrids are an uneconomic way to reduce carbon dioxide. If you go to hybrids or electric cars, your cost of carbon reduction is about $100/ton. If you have 10 ways of reducing carbon at $50/ton, why would you spend $100? My beef is not with hybrids; we are investing in hybrid batteries; there is a good market and we can make money at it. But do I believe it’s going to solve the climate change problem? No. Save yourself the five grand, and instead paint your roof white. You will save more carbon that way.
He then cited this paper by Art Rosenfeld at Lawrence Berkeley Lab: “White Roofs Cool the World, Directly Offset CO2 and Delay Global Warming“.
Yesterday, speaking in London, Energy Secretary Steven Chu picked up on that theme:
Speaking in London prior to a meeting of some of the world’s best minds on how to combat climate change, Dr Chu said the simple act of painting roofs white could have a dramatic impact on the amount of energy used to keep buildings comfortable, as well as directly offsetting global warming by increasing the reflectivity of the Earth.
“If that building is air-conditioned, it’s going to be a lot cooler, it can use 10 or 15 per cent less electricity,” he said. “You also do something in that you change the albedo of the Earth – you make it more reflective. So the sunlight comes down and it actually goes back up – there is no greenhouse effect,” Dr Chu said.
When sunlight is reflected off a white or light-coloured surface much of that light will pass through the atmosphere and back into space, unlike the infrared radiation emitted from the Earth’s warmed-up surface, which is blocked by greenhouse gases and causes global warming. “What we’re doing is that, as we put in more greenhouse gases, we’re putting in more insulation for infrared light. So if you make white roofs and the sunlight comes in, it goes right through that [insulation],” said Dr Chu.
The principle could also be extended to cars where white or “cool colours” designed to reflect light and radiation could make vehicles more energy efficient in summer. “If all vehicles were light-coloured, there could be considerable savings because then you can downsize the air conditioning… and downsizing the air conditioner means more efficient air conditioning and a considerable reduction in energy,” he said.
Asked about whether the US administration has any plans to manipulate the climate artificially using large-scale geoengineering programmes, Dr Chu said there were no such plans “at this time”. But painting surfaces white is one geoengineering proposal that he is taking seriously.
I have to admit that I haven’t read the paper, so I can’t comment whether there may be major flaws in the idea. It is certainly interesting, though I do wonder about the scale of painting everything white. But it would be a lot easier to paint roofs white than to go down some of the other pathways that have been floated for slowing carbon emissions. The only down side I can see is that I will have to spend more money on sunglasses. Just thinking about white roads makes my eyes hurt.
Because I am terribly snowed under, I am going to provide the summaries in pieces. But there are some other options if you want immediate gratification on all of the sessions. Professor Dave Summers – aka former editor ‘Heading Out’ at The Oil Drum – has several updates posted at Bit Tooth Energy. Neal Rauhauser, who is founder of the Stranded Wind Initiative, also published a summary over at Daily Kos. Eventually, I believe all of the presentations will be available as was the case for the 2008 Energy Conference.
Day 1 – Steven Chu Speech
I was quite looking forward to hearing from Energy Secretary Steven Chu, so I grabbed a seat up front. Chu started off by saying the DOE is the biggest source of science funding within the government, and that science and technology absolutely must solve the energy issue. The major thrust of his speech was that we must rein in carbon emissions to avoid a climate catastrophe, but he primarily focused on electricity. Chu correctly noted that imported oil has become a huge drain on the economy and that recessions typically follow oil price spikes, but there was otherwise scarce mention of liquid fuels. As Professor Summers points out in his summaries, the speech followed pretty closely a speech that Chu gave two years ago. In fact, he used quite a few of the same slides.
The first step that we need to take, according to Chu, is to make a big investment in energy efficiency. He would also like to double alternative energy production in 3 years, but again the talk was centered around electricity. Chu noted that solar PV will play a major – if not the major – role in energy 100 years from now. He also noted that we really need cheap solar cells with polymer backing. Of course most of our polymers are oil-derived, which is just another example of how we take for granted the role that cheap oil plays in enabling some of these renewable technologies.
When he did talk about liquid fuels, he discussed some DOE programs in which bacteria and yeast are feeding on sugars and producing gasoline and diesel. As I have noted before, I think production of fuels that can phase out of water is the right approach. This greatly minimizes the energy requirements for purification. It is technically very challenging, but there are some companies working on this approach.
Questions/comments were collected from the audience. I submitted a comment and two questions:
1. It seems ironic to me that the domestic oil and gas industry is being marginalized while at the same time you are pleased with OPEC for not cutting production. (What I was thinking but didn’t write: If you really want to see what it might be like to marginalize our own oil and gas industry, encourage OPEC to cut a couple more million barrels/day of production.)
2. Predict the year that cellulosic ethanol achieves true commercial viability. (I was really interested in his thoughts here, and whether he distinguished between gasification and true cellulosic ethanol).
3. What percentage of our transportation fuel will be biofuels in 2030? (Most projections show that it will still be overwhelmingly petroleum-based, and I wanted to see if he thought the same).
These questions were basically designed just to get a feel for whether I think his views are overly optimistic. However, he only took two questions from the audience:
1. What is most important – energy independence or CO2 reduction? Chu’s answer: He compared it to the game he played as a kid: Which would you rather be, blind or deaf? Of course they are both important, but I think the gist was that he considered the CO2 issue more pressing.
2. How does nuclear power fit into your plans? Chu’s answer: It must play an important role this century.
Following that, he exited out the back. I thought he had left the building, but when I stepped out to grab a cup of coffee I bumped into him. He had about 10 people lined up to shake his hand, so I passed on that opportunity. Maybe next time. But in an upcoming essay, I am going to address a theme that I think about often: What If I Am Wrong? It will essentially be about risk assessments (What If?), but I also want to pose the question to someone with Chu’s basic views, and ask about the consequences if he turns out to be badly wrong on some of his assumptions.
In the next essay, I will run through the rest of the conference by focusing on bits that I found interesting/odd/etc.
I will be shortly on a plane to D.C. where I will participate in the Energy Information Administration’s 2009 Energy Conference. I will update as I can via Twitter (RRapier) and possibly on Facebook, but not much from me here for the week.
Here is the opening lineup:
Welcome – Howard Gruenspecht, Acting Administrator, Energy Information Administration
My panel session is on Wednesday at 9:00:
Energy and the Media
Moderator: John Anderson (Resources for the Future)
Probably the only time those four institutions will ever been mentioned together. 🙂 I will summarize the high points upon my return.
As the previous post indicated, we in the U.S. have a pretty low energy IQ. One of the reasons is that energy stories are often reported in a very biased or uninformed manner, which tends to distort public viewpoints. For instance, you may think those evil oil companies are wrecking the world. You are entitled to your opinion, and admittedly the oil industry has done plenty to help forge those sorts of views.
However, in the U.S. we take an especially negative view of the oil industry relative to the rest of the world. Why? Odds are that your opinion has been shaped by stories like the examples in this essay. Make no mistake: Your views are carefully nurtured and cultured by various groups with agendas, often by publishing stories full of misinformation. (Full disclosure: I am attempting to influence your viewpoint here, but I am going to do so by pointing out shenanigans).
Here is a perfect example of a story in which words and examples were carefully chosen to convey a very specific (negative) viewpoint:
The Center for American Progress released a new report analyzing 2008 oil company profits and lack of investment in renewable energy, even while the companies spend millions of dollars on ad campaigns touting their emphasis on renewable energy.
Note the wording. There was a “lack of investment” in renewable energy, while they spent “millions of dollars” on ad campaigns. The problem with that line – as you will see – is that the “lack of investment” is in the billions, which dwarfs the millions spent on the ad campaigns. But I suppose “billions spent on renewable energy and millions spent on ad campaigns” doesn’t convey the desired negative impression as does “4% spent on renewable energy and millions on ad campaigns.” The first phrase would likely elicit a response of “Uh, OK.” The second one on the other hand? “Why that’s outrageous! Those misers!“
These kinds of stories also inevitably fail to note that the ‘miserly’ oil companies paid several hundred billion dollars in taxes as a result of those profits (if the stories mention taxes at all, it’s that the oil companies aren’t paying their ‘fair share’). According to the Tax Foundation, oil companies have paid out some $2.2 trillion in taxes over the past 25 years – far more than they earned over that time period. But such a misleading picture tends to get painted, that many may think this MoveOn.org petition is rational:
Stop subsidies for Big Oil
Think oil companies should pay their fair share of taxes? So does President Obama. In his budget, the President has proposed cutting billions of dollars in special subsidies and tax loopholes for oil and gas companies.
Just what is a fair share? Will it only be a fair share when oil companies are funding the entire U.S. government? But back to the initial article:
It should come as no surprise that last year’s record high oil prices also led to near record profits for big oil companies.
No, we were bombarded with headlines about it all the time. It should come as no surprise at all. So someone should tell this guy, who thinks it is a secret:
Little known fact: While most every other industry was falling to pieces last year, the oil industry posted record profits. ExxonMobil alone made $45 billion. So Obama, in his attempt to bolster the sinking U.S. economy, is likely not feeling too much sympathy for the industry as he goes after the clearly unnecessary tax credits the industry currently enjoys.
Another example of a highly misleading article (which actually led me to the MoveOn.org petition). Important to note once again that while other industries were falling to pieces and requiring multi-billion dollar bailouts, the oil industry was making big profits and paying big taxes; taxes in part which enabled those bailouts. But let’s continue to dissect the initial article:
Despite their soaring earnings, the big five companies were very stingy with investments in renewable and low-carbon energy technologies and fuels that would reduce oil dependence.
Media tracking group TNS Media Intelligence reported that $52.5 million was spent in the first quarter of 2008 along by the oil industry on greenwashing advertisements that boast about investments in wind and solar power or efficiency.
In fact, a CAP analysis of their investments reveals that the big five oil companies invested just an average of 4 percent of their total 2008 profits in renewable and alternative energy ventures.
So, let’s have fun with math. According to the story, 4 percent of total 2008 profits was spent on renewable and alternative energy. That amounts to $4 billion, which the writer considers “very stingy.” $52.5 million spent on advertising – which is only 0.0525% of 2008 profits – amounts to a “smokescreen PR campaign.” Just once I would like to see one of these articles stick in a line like “In fairness, spending on their tax bills amounted to 250% of total 2008 profits.”
What planet do these people live on? Oh, right. The planet where oil companies are run by psychotic madmen and profits go to a select few executives and insiders who conspire in smoke-filled rooms. The planet where novices ‘know’ that the industry should invest their profits into ventures that aren’t their core business, and which would likely cause their profits to vanish (potentially leading to a bailout scenario!) These people live in a cartoon world, but the problem is that most of the population lives there.
Voters have been conditioned to hate Big Oil, as Robert Bryce points out in:
While it’s unlikely that the general public’s attitude toward Big Oil will ever be changed, the public should recognize that Exxon’s profits have come along with an enormous tax bill and that those tax payments are helping governments all over the world stay solvent. According to the company’s income statement, the amount of taxes it paid in 2008 was 2.5 times as much as its net profit.
In 2008, Exxon’s tax bill averaged about $318 million per day. And it paid those taxes at the very same time that the whiz kids on Wall Street, the geniuses at AIG, and the mavens at Freddie Mac and Fannie Mae, were begging Uncle Sam for multibillion-dollar life preservers in order to prevent financial chaos. Exxon made huge profits—and paid record taxes—at the very same time that the U.S. financial system was undergoing near-fatal convulsions brought about by excessive speculation, uncontained greed, and a basic failure to provide goods and services needed by the overall economy. How many Americans really need credit default swaps or collateralized debt obligations? Now compare that number with the tens of millions of Americans who absolutely must have gasoline every day.
What about the original article at the Center for American Progress (CAP)? Funny story on CAP. I was invited to D.C. a few years ago for an energy conference, and I happened to be acquainted with the Director of Environmental Policy at CAP (which is a liberal think tank). I was invited to drop by and talk to CAP about the oil industry. Even though I expected a hostile audience, I was looking forward to it, because I thought I might be able to address some gross misconceptions. But at the last moment, my company decided that it wasn’t a good idea for me to make the trip as oil prices were at all time highs and they were worried that I might find myself in an awkward situation with the media. But, back to the original CAP article:
That certainly looks like a balanced title from an organization that describes itself as “non-partisan.” The strategy in the article is the same as the earlier article: Use a percentage to downplay the multi-billion dollar investments in renewable energy, and then quote the advertising money in “millions” to make it appear that more was spent on advertising than on renewable energy. But why must a truly non-partisan organization spin like this? Shouldn’t a balanced article mention the monumental tax bill that has been used in part to bail out other industries?
Worse, there are blatant falsehoods in the article itself. After noting that the American Petroleum Institute claimed that “most people support putting more of America’s oil and natural gas to work”, the CAP article claims:
And API’s assertion that “most people” support more oil and gas drilling is misleading at best. An NBC/Wall Street Journal poll asked “When it comes to addressing our energy problems, which one of the following do you think should receive the most emphasis?” (italics used for emphasis). Six of 10 respondents favored “developing alternative energy sources.”
Misleading at best? Hmm. Let’s have a look at the poll, shall we? On Page 26, we see Question 35:
I’m going to read you several steps that could be taken to ease America’s energy problems. For each one, tell me whether you think this is a step in the right direction, a step in the wrong direction, or if you do not have an opinion either way. And do you think this will accomplish a great deal or just a little in dealing with America’s energy needs?
How did people answer? While 92% felt that developing alternative energy sources would either accomplish a great deal or at least a little, 63% said the same about expanding areas for drilling for oil off the coast of the United States. Where I come from, 63% is “most people” and there is nothing misleading about the API making that claim. It is quite disingenuous, though, for CAP to suggest that API’s statement was misleading. CAP is either spinning or they didn’t read the survey very carefully. They have interpreted the question “Do you support this?” – which is the question API commented upon – as “Do you support this as your number 1 priority?” The ‘misleading at best’ charge aptly applies to CAP in this case.
I wish there wasn’t such an antagonistic relationship between the oil industry and Democrats. There is too much at stake. Historically, Republicans are more supportive of the oil industry, and in turn the oil industry overwhelmingly supports Republican candidates. (Or it may be the other way around; the oil industry supports Republicans who in turn support the industry). On the other hand Democrats (except for those in oil-producing areas) are generally hostile to the oil industry, which ensures that not much money from the oil industry will go to support the Democratic party (although Diane Feinstein has reportedly received $100,000 from the oil industry in the past decade).
My view that Big Oil and Democrats should find common ground has nothing to do with wanting to make nice with a new administration. My views are based on the belief that any intermediate success at achieving some level of energy independence must involve a large contribution from oil and gas. I think it goes without saying that oil and gas provide the overwhelming majority of our transportation fuel, and that they are forecast to provide the overwhelming majority for decades to come.
The problem is of course that some naively think they can marginalize the oil industry with punitive taxes, and alternatives will step up and fill the void. (To be clear, I also don’t subscribe to Newt Gingrich’s viewpoint that encouraging the development of shale oil will lead to energy independence). What will happen in reality is that punitive measures will discourage domestic production, which will quicken the pace of shifting our supply to imports. It is ironic that Steven Chu doesn’t seem to feel the need to work with our domestic oil industry, but warns OPEC not to cut production, and then is pleased when they don’t. I believe the blind spot in the present administration over the need to support our domestic producers will simply mean that future energy secretaries are even more beholden to OPEC.
This might change if we could have a more balanced discussion on our energy policy. However, I am keeping expectations pretty low. I have learned to do this when the topic is energy.
Slowly but surely I am getting sucked into the networking aspect of the ‘Web 2.0’ world. For a long time I ignored these sites, but have come to appreciate that they can be used to share links and ideas and to keep up with people/sites I am interested in.
I guess it started out with an invitation to join LinkedIn (My Profile here). LinkedIn is a social networking site for professionals, and I imagine it would be quite handy if one were searching for a job. As of this writing, I have 42 connections on LinkedIn, many people I work with now or have in the past.
Next came Facebook, which is more of a purely social networking site than LinkedIn. (My Facebook profile here). I typically provide some updates there, but I have to be careful that I don’t get sucked into endless chats. I usually pop in and out quickly to avoid that. I have 65 ‘friends’ on Facebook currently, including people I have never met, people who read R-Squared, classmates from high school and college, and even family members. I find Facebook to be OK for keeping up with friends, but it can turn into a real time-waster as there are numerous pointless games and such designed to keep people on the site for as long as possible.
Finally, I signed up with Twitter last week. (My Twitter profile here). Still not sure how that experiment is going to pan out. The nice thing about Facebook and Twitter is that I can provide short updates from my Blackberry. That is pretty handy when I am on the road. I plan to utilize both next week when I am in D.C. if I think there is anything of interest to report.
There are numerous other sites along the lines of the ones I have mentioned, but I think these will keep me busy enough for now. (If you think I missed an important one, please mention it).
To summarize, LinkedIn has proven occasionally useful and is good for keeping up with professional colleagues, but I think it would be especially useful for job seekers. Facebook is a good place to hook up with friends from 20 years ago, but it can also be used to share links and chat about particular areas of interest. Twitter is more of an experiment for me at this stage, but I plan to give it a workout next week.
Speaking of next week, it will largely be quiet for me as I attend the 2009 EIA Energy Conference. I just noticed today that Secretary of Energy Steven Chu is giving the keynote address. There are lots of other interesting topics to be discussed, so I will take good notes and provide an update after the conference.
In case you are just venturing out of your cave for the first time in a week, you are probably aware that President-elect Obama has announced his new energy team:
The team includes Nobel Prize winning physicist Steven Chu as Secretary of Energy, former EPA head Carol Browner to fill the newly-created job of Energy Czar, and Lisa Jackson to head the EPA. The focus of this essay will be on Dr. Chu, but I will comment briefly on the others.
Lisa Jackson is trained as a chemical engineer (as was the outgoing Secretary of Energy Samual Bodman). It should go without saying that I like to see technical people in roles like this, where understanding science and data are both critical. Carol Browner, while not trained as a technical person, has a lot of administrative experience within the EPA. Incidentally, I once met Mrs. Browner, as she was the person who presented my research group with the 1996 Green Chemistry Challenge Award at the National Academy of Sciences.
While I don’t know nearly as much about Browner and Jackson, Dr. Chu has a very long public record. I have been searching through his various publications, speeches, and presentations to get a really good view of the man. Here is what President-elect Obama had to say about Dr. Chu:
“His appointment should send a signal to all that my administration will value science. We will make decisions based on the facts, and we understand that facts demand bold action.”
If you asked me for a few characteristics that would top my list of desirables for the spot of Energy Secretary, I would want someone who is 1). Knowledgeable about a broad range of energy technologies; 2). Someone who is passionate about the subject; 3). Someone who isn’t highly partisan, and can work with diverse groups.
Dr. Chu’s record indicates to me that he easily fills these three criteria. Dr. Chu is currently director of the Lawrence Berkeley National Laboratory. Among his accomplishments there was to secure a $500 million partnership with BP to do alternative energy research. (See this story from Salon for more details.) This suggests someone who can work with industry on next generation energy technologies. I am not sure how quickly he feels we can transition away from oil, and therefore whether we need additional exploration and drilling. However, he has been outspoken over his opposition to coal, and his concerns about global warming. Some quotes on these topics from Dr. Chu. First, his position on coal is pretty clear:
“Coal is my worst nightmare.”
He favors nuclear energy over coal (it should come as no suprise that a physicist like Dr. Chu is pro-nuclear):
“The fear of radiation shouldn’t even enter into this.”
“Coal is very, very bad. Nuclear has to be a necessary part of the portfolio.”
Chu, who also is professor of physics and molecular and cell biology at UC Berkeley, said nuclear is the preferred choice to coal, pointing out that coal releases 50 percent more radioactivity than nuclear power plants.
His concerns over global warming have been well-publicized:
Consider this. There’s about a 50 percent chance, the climate experts tell us, that in this century we will go up in temperature by three degrees Centigrade. Now, three degrees Centigrade doesn’t seem a lot to you, that’s 11° F. Chicago changes by 30° F in half a day. But 5° C means that … it’s the difference between where we are today and where we were in the last ice age. What did that mean? Canada, the United States down to Ohio and Pennsylvania, was covered in ice year round.
So think about what 5° C will mean going the other way. A very different world. So if you’d want that for your kids and grandkids, we can continue what we’re doing. Climate change of that scale will cause enormous resource wars, over water, arable land, and massive population displacements. We’re not talking about ten thousand people. We’re not talking about ten million people, we’re talking about hundreds of millions to billions of people being flooded out, permanently.
He is no fan of corn ethanol:
We can indeed make fuel out of crops. Corn is not the right crop. The reason it’s not the right crop is because the amount of energy you put into making a fuel and growing the corn and fertilizing the corn fields and plowing the fields is within ten or 20 percent of the amount of energy you get by making it into the ethanol that you can put in your car.
Also, the amount of CO2 you create by growing corn is again within 20 percent of the amount of carbon dioxide you make by drilling and refining oil and putting into your car.
He favors higher gas taxes:
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Source.
From that same article:
Lee Schipper, a project scientist with the Global Metropolitan Studies program at U.C. Berkeley, hailed Obama’s nomination of Chu as Energy Secretary and praised his colleague’s support for higher gasoline taxes.
Schipper thinks Obama’s concerns about not placing additional burdens on America’s families can be addressed by agreeing to rebate all — or close to all — of the money raised by higher fuel taxes. “The answer is: raise the price of gasoline and give all the money back,” said Schipper.
He appreciates the need for greater energy efficiency (and like me, wants to be emperor of the world):
“I cannot impress upon you enough how important energy efficiency is.”
“Just refrigerator efficiency — bigger refrigerators by the way — saves more energy than all we’re generating from renewables [today], excluding hydroelectric power.”
“If I were emperor of the world, I would put the pedal to the floor on energy efficiency and conservation for the next decade.”
And finally recognizes that the U.S. can be a leader in new energy technologies, but are starting to fall behind in some areas.
“We have an option to be a leader in energy technologies, but we are not because our support system for that is on again off again. The future wealth of the United States will come from our ability to invent new technologies.”
“Americans take for granted that the United States leads the world in science. But we’ve lost many of these leads, especially when it comes to energy.”
“The U.S. is making it easier for other countries to catch up and pass us.”
So, let’s see. He has had a career devoted to energy, is clearly passionate about the subject, doesn’t favor making ethanol from corn, thinks we need higher gas taxes, favors nuclear power, favors alternative energy funding, is pro-science, and favors higher energy efficiency. That’s exactly how I would describe myself, so from my perspective he is a very good choice. I like his priorities. He has also been involved in research on cellulosic ethanol, and will likely send more research dollars flowing in that direction.
I think the issue that will generate some controversy is his very strong position on global warming. Not since Al Gore was Vice-President will there be such a staunch proponent of reducing greenhouse gas emissions at the highest levels of government. Global warming activists will love him. Skeptics probably won’t be quite so enthusiastic.
Here are the quick bios of the rest of the energy/environment team, courtesy of Wired:
Lisa Jackson, EPA head
Quick bio: Trained as a chemical engineer at Princeton, she has spent her entire career with government environmental agencies. She worked her way up through the EPA from 1987-2002, then moved to the New Jersey Department of Environmental Protection, eventually becoming its head in 2006. She was appointed as New Jersey Governor John Corzine’s chief-of-staff less than a month ago.
Carol Browner, energy czar
Quick bio: The longest-serving EPA administrator in the history of the agency, Browner is the non-scientist on the team. She came up through politics, working as Al Gore’s legislative director in the late 1980s, before heading the Florida Department of Environmental Regulation. She was appointed by Bill Clinton in 1993 to helm the EPA and left in 2001. Since then, she’s been a consultant with The Albright Group.
Her position: The new “energy czar” will coordinate (and politically shepherd) the President-elect’s various proposals around energy and the environment.
- Accsys Technologies
- air pollution
- airline industry
- airplane transportation
- Al Gore
- algal biodiesel
- alternative energy
- American Coalition for Ethanol
- American Petroleum Institute
- auto industry
- avoided cost
- Barack Obama
- Barbara Boxer
- Bill Gates
- Bill O'Reilly
- Bill Richardson
- biomass gasification
- Black Swan
- blend wall
- blog statistics
- Bloom Energy
- Bob Dinneen
- book review
- Brazilian ethanol
- Brian Schweitzer
- Business Week
- car pooling
- carbon offsets
- carbon sequestration
- carbon tax
- cash for clunkers
- cellulosic ethanol
- Changing World Technologies
- Chevy Volt
- Chuck Schumer
- climate change
- combustion engine
- compression ratio
- conspiracy theories
- corn prices
- Craig Thomas
- credit crisis
- crude oil
- curriculum vitae
- Cyclone Gonu
- dan kammen
- Dan Rather
- deepwater drilling
- deficit spending
- Dick Cheney
- diesel engine
- distributed energy
- domestic production
- Doug MacIntyre
- due diligence
- E3 Biofuels
- Ed Markey
- electric cars
- electricity usage
- energy balance
- energy consumption
- energy crisis
- energy independence
- Energy Information Administration
- energy iq
- energy policy
- energy security
- energy storage
- environmental regulations
- ethanol mandate
- ethanol prices
- ethanol production
- ethanol separation
- ethanol subsidies
- Exxon Valdez
- farm policy
- farm prices
- Financial Sense
- fischer tropsch
- food prices
- Fox News
- free energy
- fuel cells
- fuel efficiency
- game wardens
- gas inventories
- gas prices
- gas shortages
- gas tax
- gas wells
- gasoline blending
- gasoline demand
- gasoline imports
- General Motors
- genetic engineering
- Global Energy Holdings Group
- global warming
- Goldman Sachs
- green building
- green diesel
- greenhouse gases
- Growth Energy
- guest post
- Gulf of Mexico
- Harry Reid
- health care
- heating oil
- Hillary Clinton
- Hirsch Report
- hubbert linearization
- hubbert peak
- huffington post
- Hugo Chavez
- Hurricane Ike
- Hurricane Katrina
- Jamie Court
- Jeff Goodell
- Jeff Rubin
- jet fuel
- Jim Doyle
- Jim Kunstler
- Jim Mulva
- john benemann
- John Dingell
- John Edwards
- John McCain
- john simpson
- Jon Stewart
- jon tester
- Joseph Kennedy
- Judy Dugan
- ken deffeyes
- Ken Salazar
- kidney stone
- Krassen Dimitrov
- land prices
- Larry Page
- law enforcement
- Lisa Margonelli
- Mark Edwards
- Mark Jacobson
- mass transit
- Matt Simmons
- Media coverage
- methane coupling
- Michael Wang
- Money Morning
- Morgan Downey
- Nancy Pelosi
- Nassim Nicholas Taleb
- national debt
- National Geographic
- natural gas
- new york city
- nitrogen fixation
- North Sea
- nuclear energy
- ocean currents
- ocean thermal energy conversion
- off topic
- oil companies
- oil consumption
- oil demand
- oil discoveries
- oil exploration
- oil exports
- oil imports
- oil inventories
- oil lease
- oil prices
- oil production
- oil refineries
- oil reserves
- oil rigs
- oil shale
- oil spills
- oil watchdog
- oil wells
- opinion survey
- osmotic power
- Pacific Ethanol
- palm oil
- Paul Sankey
- Peak Convenience
- Peak Demand
- Peak Lite
- Peak Oil
- personal finance
- peter maass
- plasma gasification
- population control
- posting etiquette
- price gouging
- price manipulation
- profit margins
- Prop 87
- Public Citizen
- PVT Solar
- pyrolysis oil
- Rahm Emanuel
- range fuels
- rate schedule
- Ray Kurzweil
- reader submission
- Red Cavaney
- refining margins
- renal colic
- renewable diesel
- renewable energy
- Renewable Fuels Association
- Robert Bryce
- Robert Cohen
- Robert Hirsch
- Robert Menendez
- Robert Zubrin
- Rolling Stone
- Ron Wyden
- Sarah Palin
- Saudi Arabia
- shale gas
- smart grid
- solar drying
- solar efficiency
- solar hot water heater
- solar power
- solar PV
- solar thermal
- Solix Biofuels
- South Africa
- speed limit
- Steven Chu
- Strategic Petroleum Reserve
- sugar subsidies
- sugarcane ethanol
- summer gasoline
- survival training
- T. Boone Pickens
- tar sands
- Ted Kennedy
- Tesla Motors
- The Daily Show
- The Guardian
- Thermal Depolymerization
- thin film solar
- tidal energy
- Tim Hamilton
- Titan Wood
- TMO Renewables
- Tom Cruise
- topsoil depletion
- Tyson Foods
- Tyson Slocum
- United Kingdom
- universal health care
- Venture Beat
- Vinod Khosla
- wall street journal
- Warren Buffett
- water car
- water usage
- wave power
- Web 2.0
- wheat prices
- wind power
- windfall profits
- Windows Vista
- winter gasoline
- Yellowstone National Park
- zero point energy