This will be the third and final blog I will be writing on the book The Quest by Daniel Yergin. Below I will discuss the future of energy, including renewable energy. One form of renewable energy is the conversion of plants that we grow to ethanol that can be used to turn the engines of most types of vehicles and airplanes. Another is to convert the sun, wind, and movement of water to electricity.
At present, almost every renewable energy has a problem competing with hydrocarbons economically when the cost of pollution is not included. To generate electricity, nuclear fuel, coal and natural gas are cheaper than renewable sources unless tax incentives are in place. However, with oil now above $100 per barrel fairly consistently, we are not far from the point where sugarcane based ethanol is competitive with gasoline all the time.
Biofuel is the broad name for the creation of something that will replace gasoline. Sugarcane is the most efficient source of biofuel because everything else must be converted to sugar before it can be refined into ethanol. That is why the U.S. focus on using corn to convert to High Fructose Corn Syrup and then into ethanol is not cost competitive with Brazilian sugarcane. However, Brazil does not have enough sugarcane for the world. So there is room for others to move their agriculture in this direction. Meanwhile, research is ongoing, looking into the potential ways algae, various forms of agricultural waste, and weeds that grow on marginal land could be converted to fuel so that more corn is available as food.
Electricity is the holy grail of clean renewable energy and this is actually where the most of this book was directed. Electric cars would be the cleanest for the environment, but there is a great need for further developments in the technology before they will receive wide consumer acceptance.
There are two basic facts about electricity beyond transportation. The first is that we already use a lot of it and as the economy grows we will use more of it. The second is that electricity demand varies according to the weather and time of day. These facts mean that coal and natural gas will have to be used to generate electricity because renewable forms (other then hydro) need efficient storage batteries to be developed for when the sun or wind is not present. For the foreseeable future, all forms of sourcing electricity will have to be used to satisfy demand.
if there were a solution for nuclear waste, nuclear energy would be seen as an essential critical component by environmentalists. In fact, despite this problem, nuclear energy was gaining momentum as a non-CO2 emission source of electricity until Japan suffered its recent Tsunami generated radiation release and all political momentum for more nuclear energy stalled out.
The other big issue for non-CO2 emitting energy is “Not in my backyard” ism (“NIMBYism”). We don’t have a solution for nuclear waste because Nevada residents don’t want the nuclear waste buried in Yucca Mountain even though the desert offers the most stable environment for such storage. We will never have enough hydro, wind or solar unless a massive number of locations are found for each. Until there is a solution for NIMBYism, we will have to continue to burn coal and natural gas (generating CO2 emissions) to generate the electricity that the economy needs.
However, advances in technology are still likely outside the U.S. Research is ongoing almost everywhere there is a critical mass of educated people. But the U.S. is lagging. I was stunned to read in the book that in the U.S. spending on pure scientific research within corporations has been completely eliminated. Now, the U.S. government, primarily through the Department of Defense and the Department of Energy, is responsible for funding all basic scientific research within the U.S.
The time line is simply too long for the private sector to fund renewable energy research without any current returns. It took over 40 years to develop the scrubbers that remove SO2 from coal plants and prevent acid rain. It took 15 years to figure out an economical way to get methane from coal beds. In these times of difficult budgets, many people do not support government funding of this research but without it, the economic benefits of discovery will flow to other countries and leave the U.S. economy that much worse off. Such spending created the Internet and the economic benefits have repaid the taxpayer many times over already. It is not a large amount of money. The total 2008 Research and Development budget was equal to two weeks spending on the War on Terror.
As I discussed in the 2nd posting, much of the rest of the world (other than the U.S.) is committed to finding economical forms of non-hydro carbon energy to address the issue of global warming and pollution. In the case of China and India it is a necessity; because if they increase their standard of living based upon a hydrocarbon platform as the U.S. and Europe did, they will drive up the price of oil to levels that will both hold back their economic development and hasten the complete utilization of the global resource. There is now an on-going global race to develop the technology that we need to have sufficient energy and reduce pollution.
In conclusion, we are not going to run out of oil or any other hydrocarbon in the next 100 years because rising prices will generate technological developments that increase supply and motivate conservation. Technological progress will be made on global warming because the rest of the world wants such technology and even in the U.S., there are profits to be made from green activities. A Cap and Trade Policy would hasten U.S. based Research and Development (with jobs remaining in the U.S.) but such progress will be developed somewhere in the world for use everywhere if the U.S. fails to innovate. The U.S. will remain dependent on its current mix of electricity sources until technology improves and NIMBYism is overcome; progress will be made in small ways until there is a federal policy or when a renewable cost advantage emerges.
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