Whats the deal with energy?
Its clear that our civilization needs energy, and it needs it fast. Thomas Homer-Dixon has called energy the ‘Master resource” in his new book “The Upside of Down” , meaning that it is the keystone to all other resources and functions. A high energy cost, as we have seen so clearly in 2008, leads inevitably to higher costs for EVERYTHING. The good thing about higher energy costs, for those of us who accept basic science at least, is that higher costs for traditional oil leads inevitably to more money flowing into alternative energy research and exploration.
Energy is essentially ‘fungible’ which means essentially that one source is as good as another. Once reduced to electricity, coal power is as good as hydropower is as good as zero point energy (if it were viable). The only difference in standard economics is how much it costs to produce.
This is an example of the “Invisible hand” of economics, leading us inexorably to the promised land. High energy prices give people an incentive to create energy. If they believe that, with capital investment, they can create a technology or process that will produce energy marginally more effectively or cheaper than others, they will invest. Global capital, despite the insistence of Marxists everywhere, does not have a plan or an agenda. It merely seeks to use wealth to create more wealth. If money can be made selling ice-cream to Eskimos, they will invest. If money can be made selling rebellion, they will be more than happy to fund it.
Figuring this out is essential to changing the direction of this massive ship called western civilization. Whatever is to be done, it MUST be made to pay. No amount of moralizing or anxious hand-wringing will change that.
With this in mind, its clear that any reimagining of the future must include a balance sheet. Society will gladly stop using oil if a way to produce energy is found that is markedly cheaper.
Part of the answer is merely education. In truth, we are paying much more for oil than the price that appears at the pump or on your electrical bill. The Institute for Analysis for Global Security has analysed the real cost of oil. The U.S. Senate Committee on Foreign Relations is well aware of the hidden costs. In the preceeding analysis, the authors focus largely on security concerns, including the massive cost of the gulf war ($3 trillion) needed to secure future oil deliveries. Economists call these bills ‘externalities‘, but in any sane public policy debate they need to be brought forward and put front and center.
There are other externalities though, not figured into those estimates. Things its very difficult to put a price tag on. The mass of carbon dumped into the atmosphere is one such cost. How much DOES a 1 degree rise in global temperatures cost? As difficult as it is, putting a price tag on the damage done goes a long way to changing activities done by individuals and corporations. Even if the price tag is somewhat arbitrary, anything that moves the equilibrium price is something that is changing consumer behavior.
The Kyoto Protocol, specifically the carbon trading market it seeks to set up, is one example of putting a price on the externalities associated with carbon heavy activity. Unfortunately there seems to be some signs that the market is being exploited by unscrupulous developers, as detailed in the Mother Jones article “Turning Carbon into Gold“. (*Surprise! People try to take advantage of shit. Who would have thought? -ed)
In fact, the reality that people are ‘turning carbon into gold’ as Mother Jones alleges, is a positive sign. What it indicates is that there IS money to be made in carbon reduction. The strength and health of the economy is measured by the flow of wealth. If viable business can operate trading carbon reduction, and if this puts substantial downward pressure on carbon emissions, then it is a success. Many have stated the futility of the protocol, that its net effect will be minor at best. This might be true. It is also commonly heard that without the U.S. on board with Kyoto, its a useless piece of paper. However, as the Oxford Institute for Energy Studies correctly points out, it doesn’t matter. The countries that have ratified it include some big economic players, and its true purpose is to set up the market. The United States is eventually going to have to come on board, and when they do they will be taking advantage of a system with the bugs worked out in this round of the UN Framework on Climate change, of which Kyoto is just a part.
These markets though, are just beginning to take effect.
Overall, the cost of energy is still rising, and Kyoto will in the short term put upwards pressure on energy prices (pdf). Upwards pressure on energy prices, as discussed above, makes the logic of capital look for alternative energy sources.
Oilsands, mining an energy future.
Unfortunately, ‘alternative’ does not necessarily spell ‘better’. The strongest argument to that effect is the Alberta Oilsands development.
Alberta Tarsands
All across northern Alberta are hydrocarbon laden sands – oil sands or tar sands – also called bitumen in the industry. They sit just below the surface, and so, the cheapest and easiest way to extract them is to just roll off the topsoil (overburden) and dig out the greasy compacted sand. According to some estimates, the development of the oil sands could take away up to a quarter of the SURFACE AREA of Alberta, were they fully exploited.
One reason estimates of the remaining oil reserves vary so widely, is the disagreement over which oils to include in the ‘census’. Non-traditional reserves like that of the oilsands pushes the proven reserves up drastically. Oilsands became commercially viable at around $40 a barrel, everything over that is gravy. Including a lot of other sources, like oil-shales and coal in the u.s., pushes the available oil up even higher. When energy is priced at over $100 a barrel, there are a lot of sources that start looking attractive.
After the bitumen is dug up, it must be cooked, in a process that is very ‘dirty’, both figuratively and literally. Processing the oilsands into usable oil is very carbon intensive, and it despoils the land on a scale that industrial civilization has only heretofore imagined in our apocalyptic nightmares.
Post apocalyptic nightmare or the new face of Alberta? Both?
Newly discovered coal and oil bearing shales in the United States will require much the same activity to wrench out their black gold.
Methyl hydrates
Around every continental shelf, far out to sea, past even the quickly growing forests of drill rigs, is a frozen slushy-mud buried under the seabed. In this mud is the reason we have a climate and Venus has an opaque oven. Frozen methane, mixed in with water and assorted other hydrocarbons. Methyl Hydrates frozen on the shelves constitute an enormous amount of energy, and an enormous store of carbon. At $140 oil, with the fungible nature of energy, they are an almost irresistible treasure. If we begin tapping these sources, the sky is the limit as to how much carbon we can release.
Of course, someone is already trying.
“Japan will begin test drilling and extracting methyl hydrates — natural gas trapped in frozen water — in March. If the technology to harvest and utilize natural gas is successful, it could transform the face of the energy industry by making a globally abundant form of natural gas available to countries currently dependent on imports.” -Offnews.info
Energy Future
As mentioned above, there are many estimates of the amount of oil remaining. The evidence available seems to indicate that there is in fact a staggering amount. The problem it, it is all VERY DIRTY. It is not an oil collapse which is most dangerous in the long run, it is an unlimited supply. It makes the search for “REAL alternative energy sources all the more pressing. In the next decade or so, we will be building a new infrastructure to transition away from the standard oil economy into something new. It is vitally important then, that renewable green energy sources are found and developed.
Here is a researched presentation I gave detailing one possible alternative energy source:
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