Their Gamble, Our Win

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A recent news piece in the Wall Street Journal caught my attention. Entitled “Germany’s Expensive Energy Gamble,” it reports on that country’s new grand energy plan, the “Energiewende” (“Energy Revolution”). This is now at the top of Chancellor Angela Merkel’s domestic agenda.

Under this plan, Germany will spend a projected trillion euros — and we all know how government projections tend greatly to understate final costs — laying out a massive new network of high-tension lines to carry power from wind plants in the North Sea to the country’s heavily industrialized southern region. Merkel’s government is gambling that this titanic investment will pay off with cheap, inexhaustible energy.

So far, the dream of renewables replacing fossil fuels and nuclear power has delivered only nightmarish results.

While the EU has a set of rules requiring its member states to achieve a goal of 35% of their electricity from so-called renewables by 2025, Germany has set its goal to hit 40–45% by then and to exceed 80% by 2050. Again, this is without using nuclear power.

If achieving this does cost the German economy a trillion euros (about $1.4 trillion), that would equal about half the country’s annual GDP.

So far, the dream of renewables replacing fossil fuels and nuclear power has delivered only nightmarish results. Despite Germany’s history of no major problems with nuclear power, Merkel virtually shut down the nation’s nuclear industry after the Fukushima disaster. Today, only nine nukes remain open, and they are due to be shut down in about seven years.

The result is that over the past five years, electricity prices in Germany have skyrocketed 60%, because the subsidies for the highly inefficient wind farms are passed on to the consumer. German electricity is now over twice as expensive as America’s.

Even riskier for the German economy is the strain this is placing on the manufacturing sector, one of its key components.

As Kurt Bock, CEO of BASF — the world’s biggest chemical company and one of Germany’s biggest companies of any kind — put it, “German industry is going to gradually lose its competitiveness if this [energy revolution] isn’t reversed soon.

BASF, by the way, has every right to be frightened by Merkel’s energy scheme. The company’s main plant employs 50,000 people in Germany, and consumes as much power as all of Denmark. And Bock is not alone in his concerns. A recent survey by the Federation of German Industry and PricewaterhouseCoopers showed that three-fourths of executives at small- and medium-sized industries feel that the rising energy costs threaten German productivity. A survey by the US Chamber of Commerce showed that a similar percentage of American company executives with operations in Germany felt that the Energiewende made Germany less attractive as a place to do business.

While the unfavorable opinions of the manufacturers, either German-based or with German operations, should worry the German government, even more worrisome are the attendant industry actions.

BASF has announced plans to cut investment in Germany by 8.3% of its world total, shifting it elsewhere. SGL Carbon, another German manufacturer, has decided to triple its $100 million investment in its Washington state plant rather than expand its domestic operations, for the reason that electricity costs only one-third as much in Washington state as it does in Germany. And basi Schöberl GmbH will turn to France rather than Germany as the site of its new plant. (France, note well, has kept its nuclear power plants at full strength.)

As Daniel Yergin has put it, the Germans enthusiastically embraced so-called renewable power, viewing themselves as trailblazers, “But now the Germans look back and see there aren’t many people behind them.”

Meanwhile, as another WSJ piece documents, our own energy revolution continues to flourish — even in the face of an administration downright hostile to it — because ours is based on fossil fuels.

The article notes that while naysayers wrote off our fracking revolution under the theory that shale wells don’t produce for long and must be replaced with ever more wells, the fracking revolution enters its tenth year in fine shape. Shale wells have become far more productive.

For example, in 2013 the most fecund shale well produced, at its peak, 5.9 million cubic feet of natural gas per day. But last year — a mere decade later — the best shale well delivered an amazing 30.3 million cubic feet a day — a fivefold increase! And fracking oil wells have seen similar productivity increases over the last decade.

We have a grotesquely obtuse president, so we will no doubt squander this opportunity to get our manufacturing base to the heights it could reach.

In fact, the focus of the American oil and natural gas industry — which has become the world’s largest energy producer — is now on finding ways to get more from existing wells, as opposed to looking for new shale fields. So while the number of wells has remained roughly constant, the production has jumped.

All this has kept American natural gas prices at historic lows.

This would suggest to a shrewd president — if we only had one! — a national strategy for renewing our industrial sector.

The strategy would be to embrace the American energy renaissance. Take back the regulatory agencies, as well as the Department of the Interior, from the environmentalist activists. Return to issuing leases to develop resources, both offshore and on land, leases dramatically curtailed by the Obama administration. Return to selling public lands — the federal government still owns 28% of the 2.27 billion acres that comprise our national territory. And allow our oil and gas to be exported freely. At the same time, reinvigorate our nuclear energy power industry.

In other words, aim explicitly at allowing the market to drive our energy prices, both the price of fuel and the price of electricity. This would create a cornucopia of benefits.

It would add a massive number of new jobs, first in the energy sector, then, as that wealth spread, in every other sector as well. It would drive down the amount of money that vicious dictators such as Putin and terrorists such as ISIS use to maim and murder free people around the world. That would lessen the probability that young Americans will die to protect our interests.

But we have a grotesquely obtuse president, so we will no doubt squander this opportunity to get our manufacturing base to the heights it could reach.

Elections have consequences — alas! But people get the government they deserve.




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A Step Back From War

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On November 24, an interim agreement to limit Iran’s nuclear ambitions was reached between the P5+1 powers (Britain, France, Germany, Russia, China, and the US) and the Islamic Republic. Under the agreement Iran is obligated to:

  • stop enriching uranium beyond the 5% level, and take steps to downgrade its stockpile of uranium already enriched to the 20% level (at 20% it can be quickly converted to weapons-grade material)
  • allow inspectors better access to its nuclear sites, including daily inspections of the important facilities at Natanz and Fordo
  • halt development of the Arak heavy water plant, which upon completion would be capable of producing plutonium
  • build no new enrichment facilities
  • install no new centrifuges at its current facilities, or start up any centrifuges not currently in operation

Iran will be allowed to enrich uranium to the 3.5% level, as is its right under the Nuclear Non-Proliferation Treaty (the US interprets the NPT differently, but apparently has agreed to disagree with Iran on this, in effect conceding de facto that Iran has this right). Under the agreement Iran is also allowed to keep all of its existing centrifuges.

In return Iran will receive limited relief from the international sanctions regime which has crippled its economy. Some $6–7 billion worth of sanctions will be eased or lifted. Over $4 billion of this will come from the unfreezing of oil revenues currently held in foreign banks. No new sanctions will be imposed on Iran during the next six months (the lifetime of the interim agreement), so long as the Islamic Republic adheres to the terms of the agreement. The most crippling sanctions affecting Iran’s oil and financial sectors remain in place under the interim agreement.

There can be no question that ultimately the only alternative to negotiations is war. And war would be a catastrophe for both sides.

The US sanctions that will be removed can be lifted by presidential action — a key point, given that majorities in Congress remain suspicious of Iran. (Or, to put it another way, Israel and Saudi Arabia wield considerable influence over American legislators, while Iran has none.)

Is it a good deal? Yes, assuming that both sides are acting in good faith. The deal is an interim one with a six-month lifespan. Lacking progress on a comprehensive agreement, the US and the international community as a whole will quite likely ratchet up the sanctions pressure once more. We have not witnessed a “new Munich,” as some Israeli and neocon commentators have averred. It is quite simply the beginning of a badly needed dialogue between Iran and the West, one in which the interests of both sides may perhaps be found to dovetail. There can be no question that ultimately the only alternative to negotiations is war. And war would be a catastrophe for both sides.

This analyst feels certain that the P5+1 want to settle the Iranian nuclear issue peacefully, with Iran’s nuclear program at least frozen if not rolled back. Iran, it would seem, has been brought to the table by sanctions, particularly the very tough ones imposed since 2010. Self-interest rather than goodwill has brought the parties together, and self-interest is a much better foundation than goodwill to build a comprehensive agreement upon. Goodwill may follow in time.

There is little doubt that Iran has long sought, if not an actual nuclear weapon, at least the capability to produce one relatively quickly. Given the hostility that Iran has faced from the US, Israel, and the major Sunni Arab countries since 1979, its desire to become a nuclear power is understandable. Israel’s possession of a formidable nuclear arsenal (probably 200 or perhaps even 300 weapons) makes Iran’s effort seem puny by comparison. But again, it is Israel and not Iran that has widespread influence over the US Congress and American public opinion. On this issue the American viewpoint has been badly slanted in favor of both Israel and Saudi Arabia (two nations which are, in effect, allies when it comes to Iran), irrespective of US national interests. With this interim agreement the Obama administration has made a small beginning in redressing that dangerous imbalance.

In fact, it really isn’t the terms of this agreement that have disturbed the Israelis and the Saudis, but the very fact that an agreement was reached at all. The fear in both Tel Aviv and Riyadh is that an American-Iranian détente will follow, diminishing their influence over Washington. Would that it prove so! These two “friends” of ours have done considerable damage to America over the years. Our unconditional support for Israel has warped our relationship with the Islamic world, to our cost both economically and in terms of our national security. Saudi Arabia, by exporting radical Wahhabism (in an effort, so far largely successful, to deflect the fanaticism and violence of that movement away from the House of Saud), cost us dearly at 9/11 (15 of the 19 hijackers were Saudis) and thereafter. It is not too much to say that our interaction with these two countries laid the groundwork for the disasters of 9/11 and the Second Iraq War, and much else besides. The time is long overdue for a rebalancing of US policy toward the Middle East.

A truly national American policy would involve a radical break with the past, and a turn toward Iran and Shia Islam. The Iranian people, unlike the majority of Arabs (and particularly Sunni Arabs), are actually pro-Western to a great degree. This is quite evident to anyone who actually studies the country and its people, rather than relying on soundbites provided by cable news. It is true that the Islamic regime in Tehran has supported terrorist acts against the US in places such as Iraq and Lebanon. But it is equally true that this terrorism was motivated by raisons d’état, rather than religious fanaticism and anti-Occidentalism. A reorientation of US policy would bring such acts to a halt, whereas our frenemy Saudi Arabia is unable to prevent (indeed, has at times even secretly encouraged) Sunni terrorism against the US.

The US, under the leadership of President George W. Bush, put the Shia majority in power in Iraq, by means of war. Having embarked upon such a policy, we should, logically, extend it by demanding majority (i.e., Shia) rule in Bahrain. The next step, from the perspective of realpolitik, would be a US-Iranian condominium over the Shia-majority Eastern Province of Saudi Arabia, which coincidentally is where almost all of the Saudi oil is located. But of course we lack the statesmen or women capable of charting such a course.

A truly national American policy would involve a radical break with the past, and a turn toward Iran and Shia Islam.

To return then to the real world. This interim agreement opens the possibility of preventing a nuclear Iran without war. A US war against Iran would be a difficult proposition under any circumstances. Given the strain of a dozen years of fighting in Afghanistan and Iraq, there is a real danger of the US military cracking during an operation that, to be successful, would entail the commitment of considerably more resources than those devoted to the Iraq war. The economic consequences of such a war (including a major increase in the price of oil, and the choice between borrowing money or raising taxes to pay the war costs) would be devastating.And an attack on Iran, as former Sec. of Defense Bob Gates commented during the Bush administration, would create a wave of terrorism that might persist for decades. There is in fact no alternative to a diplomatic solution.

Will diplomacy succeed? As already mentioned, both sides appear committed to reaching an agreement. The West needs peace and quiet in the Persian Gulf; Iran desperately needs relief from sanctions. Therefore it would seem this interim agreement will be succeeded by a more comprehensive one. Even so, it may be that in the end we will find ourselves containing an Iran that retains a “breakout capability.” But if we could contain a Soviet Union bristling with nukes, then surely we can contain a power that may have the capacity to produce one or two or even a dozen bombs. The alternative, war, is a far bleaker prospect.

Its logic aside, I regard a successful diplomatic outcome as a 50-50 proposition at best. Very powerful forces, both inside the US and beyond our borders, are committed to keeping the US and Iran apart. They are prepared to do almost anything to prevent a US-Iranian détente. And I fear they will.




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Athena 4, Gaia 0

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From the start of the industrial revolution to the present day, many Green critics have decried the rise of technology. Gaia (Mother Earth) worshipers — Green neo-pagans — have viewed with alarm the dramatic rise in human flourishing, and the key determinant in this flourishing, which has been the development of plentiful energy. From the year 1800 to the year 2000, the world’s average per capita income rose tenfold (in real terms), while the world’s population rose sixfold, thanks to this productive and peaceful revolution. But the Gaia cult has resisted every step of the way.

During the past half century, the Gaia groupies have achieved tremendous political power in America and Europe. (They have yet not been able to dominate in Asia — one big reason Asia is so rapidly rising economically.) It is a struggle between those who embrace technological progress and those who reflexively and viscerally oppose it. The struggle can be viewed as a contest between Greek goddesses: Athena, goddess of wisdom and technology, is fighting Gaia, and Athena keeps winning — thank goddess!

Four recent reports of technological progress in energy production are worth noting. The first is about the fracking revolution, which I believe will be viewed by future historians as one of the major turning points in the evolving industrial age. It conveys the news that the largest American railroad, BNSF, is planning to test the use of natural gas as power for its locomotives. Currently, BNSF uses diesel fuel exclusively, and by its own estimates has the largest diesel-burning American fleet, second only to the US Navy.

It is not because but in spite of the neo-pagan policies of the Oval Office that we have the natural gas miracle.

The reason BNSF is considering the move is that because of the fracking revolution, natural gas is getting very cheap. Under current pricing, while a gallon of diesel fuel costs about $4, the same power can be produced for less than 50 cents worth of natural gas — though there are additional costs when you compress or liquefy it.

This is leading BNSF to follow other industries in moving toward natural gas. Utility companies are rapidly abandoning coal for gas, and manufacturers are moving toward it as well. Many municipal bus fleets have been using compressed natural gas (CNG) for years, and other commercial vehicle fleets (such as garbage trucks) are looking into switching to CNG. Already, tugboats are being fitted to run on liquefied natural gas (LNG). And long-haul freight companies are looking at LNG as well — in fact, Shell is planning to provide LNG in Ontario and Louisiana and distribute it at 200 truck stops.

The hurdle that BNSF faces is that it costs upwards of $1 million to retrofit a diesel locomotive to run on LNG as well, and BNSF has almost 7,000 locomotives to retrofit. So this conversion likely will take time, but given that the cost advantage of natural gas shows no sign of going away anytime soon, the conversion seems inevitable.

Lest anybody be addlepated enough to thank the current Green regime for this flourishing of clean, low-cost energy, let me disabuse him now. The crony-capitalist administration has placed all of its — oops! I mean, the taxpayers’ — money on solar and wind power, bankrolling numerous projects (headed by various Obama donors) that have gone nowhere but bankrupt. The EPA and the Department of the Interior have gone out of their way to stop drilling on federal lands. This is documented in a recent report from Marc Humphries of the Congressional Research Service. The report documents the fact that the fracking revolution has increased American natural gas production by 20% over the past five years alone — a total of 4 trillion additional cubic feet of natural gas pumped into the nation’s supply. But this overall increase hides a revealing disparity: while natural gas production on non-federal (mainly private) lands is up by 40% over this period, production on federal land has plummeted by 33%.

In short, it is not because but in spite of the neo-pagan policies of the Oval Office that we have the natural gas miracle.

But the miracle just might become even more miraculous. The second story about technological advances in energy production is a news release from the Japan Oil, Gas and Metals Corporation, which notes that it is preparing the first test of commercial production of natural gas from methane hydrate layers under the ocean. Essentially, methane hydrate is natural gas (methane) trapped in ice crystals along the ocean’s floor. This source of energy is estimated by some experts as potentially exceeding all of the world’s existing coal, natural gas, and petroleum reserves — combined! Developing the resource will be tricky, given the instability of the layers that have to be processed, but then, the minds of self-interested creative individuals are tricky as well.

The third technological development in energy production worth noting is the advent of a new type of nuclear (fission) reactor.

Nuclear power, of course, can’t get no respect from nobody. Despite its exemplary safety record in the US and other advanced economies (which always excluded, of course, the Soviet Union), people fear it. These fears were only intensified two years ago when a Japanese earthquake led to the destruction of four reactors at the Fukushima Daiichi power plant.

Actually, the quake — a massive magnitude 9.0 one that moved Japan’s main island eight feet to the east and shifted the Earth’s axis by six inches — didn’t destroy the reactors. They were ruined by the tsunami it generated (a tidal wave that destroyed 300,000 buildings and killed 20,000 people). Despite the fact that the reactors’ disaster killed nobody, sickened nobody, and is likely to cause few health problems in the future, organized pressure led to the shutdown of the country’s 53 other reactors. These reactors jointly produced 30% of the country’s electric power. As a consequence, last year Japan ran a record deficit ($78 billion) because it had to import more energy, increasing the cost of its manufactured goods, and reducing exports accordingly.

But nuclear power is by no means dead. There is a new company, Transatomic Power, that is perfecting a design for a molten-salt reactor — a design that may well cut in half the cost of future nuclear reactors. It is the high cost of building reactors, especially in the face of the dramatically dropping price of electricity from natural gas plants, along with the Green Regime’s preference for solar and wind power, that has been holding up the expansion of nuclear power in the US over the past few years. But this new reactor will probably reignite that expansion.

Molten-salt reactors were explored as long ago as the 1960s in the Oak Ridge Lab, but the design now being worked on would produce 20 times the power for the same size reactor. It would allow reactors smaller than the 1,000 megawatt behemoths currently running. Besides the smaller footprint, the reactor under design would save money because it could be factory-built (as opposed to being custom-built on site).

Its chief advantage, though, would be the use of molten-salt rather than water as a coolant. Water is the coolant used in all present reactors. The problem with water is that it boils at 100o C, whereas the fuel pellets in the core operate at about 2,000o C. So in the event of an emergency shutdown, unless water can be continuously pumped over the core to cool it, the water will vaporize and the core will melt down (as one did at Fukushima).

But the salt, which is combined with the fuel, has a boiling point much higher than 2,000o C. So if the reactor core starts to overheat, the salt will expand but not evaporate, separating the pellets and thus slowing the core reaction. In a complete shutdown, a stopper at the bottom of the core container would melt, and the molten fuel and salt would flow into a holding container, where the salt would solidify and encapsulate the fuel.

If global warming is real — as all good, pious Gaia supplicants believe — then it’s either nukes or solar and wind power, and the latter is clearly not economically viable.

The clever pups behind this innovative design are the cofounders of Transatomic Power, Leslie Dewan and Mark Massie, who are still only Ph.D. candidates at MIT. These two are Schumpeterian entrepreneurs of the best sort. America is lucky to have them, as the Chinese are also working on a similar design.

This all comes at a crucial time for nuclear power. For as a recent Wall Street Journal article notes, the fracking revolution has lowered natural gas prices so much that gas powered electrical plants are driving both coal-fired plants and many nuclear plants (especially the smaller ones, and the ones facing expensive repairs) out of deregulated markets.

For examples, Excelon has announced that it will soon close its Oyster Creek, New Jersey nuke, ten years before its license expires. And Dominion Energy has announced that it will soon close its Kewaunee, Wisconsin nuke, a full 20 years before its operating license expires.

Pricing makes the reason for this clear. The fixed costs to run a nuke are $90,000 per megawatt; the fixed costs for coal fired plants are $30,000; for natural gas fired plants, only $15,000. And, of course, existing nukes require intensive security and safety costs, precisely because of the risk of meltdown. In the first 11 months of 2012, natural gas plant output rose by 24%, while the output for nuclear powered plants dropped by 2.5%.

This all presents an interesting dilemma for the Gaia communicants. As natural gas prices continue low, gas will, absent extensive subsidies or other protection for other forms of energy, supplant nuclear power. Now, natural gas emits just half the carbon that coal does, but nuclear plants emit none. So if global warming is a hoax, we could easily go all natural gas. But if global warming is real — as all good, pious Gaia supplicants believe — then it’s either nukes or solar and wind power, and the latter is clearly not economically viable. All this is clear except to the blindest Gaia devotees (and the greediest Green crony capitalists).

And indeed, there has been an interesting schism in the Green faith. In a recent piece, the excellent science writer Robert Bryce calls this “the rise of the nuclear Greens.” He notes that an increasing number of Gaia votaries now support nuclear power. One prominent convert is British environmental activist George Monbiot, who has now admitted — belatedly, to understate it massively — that solar energy (in the UK, and by extension everywhere else) is “a spectacular waste of scarce resources,” and that wind power is “largely worthless.” Referring to the Fukushima disaster, he concludes, “Atomic energy has just been subjected to one of the harshest of possible tests, and the impact on people and the planet has been small. The crisis at Fukushima has converted me to the cause of nuclear power.”

Wow.

Monbiot now joins other Gaia disciples Stewart Brand, Ted Nordhaus, Michael Shellenberger, Mark Lynas, James Lovelock, and Patrick Moore (co-founder of Greenpeace) in favoring nuclear power. This is nauseatingly ironic: it was the environmentalist zealots who stopped the growth of nuclear power 40 years ago. But the pro-nuke Gaia devotees are still a distinct minority. Most of the cult still lights candles in front of wind and solar power.

The fourth interesting development concerns an energy source that has been tantalizing but elusive for many decades: fusion power.

A news report out of Europe indicates that an important international project is moving forward. The “Iter” (Latin for “the way”) project is a collaboration of 34 nations working on building a pilot fusion nuclear reactor. Nuclear fusion is, of course, what powers the sun and other stars. In principle, it offers a chance to provide virtually unlimited supplies of reliable, consistent energy at the levels needed to power an industrial economy. And it would provide that power from clean, nontoxic fuel (extracted from water), with no possibility of any kind of core meltdown.

The new Iter experimental reactor has received an operating license. It is projected to be the first fusion reactor (“tokamak”) to generate more power than it uses — ten times more, in fact. The Iter design would serve as the prototype for the first generation of commercial fusion power plants.

The foundations for the reactor are now being laid, but the work of putting together the million or so components (made at factories all over the world) will take a long time. The tentative date for firing it up is about 15 years in the future — though with a project of this enormity, it will probably be longer. And it has cost about $20 billion. However, it signals that by the second half of this century, commercial fusion power will be a reality.

That would be nothing less than the crowning achievement of the industrial revolution. It would be the human mind harnessing the power of the stars to secure permanent prosperity for our species.

In spite of the Gaia cult, Athena is ascendant.




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Iran: A Shaft of Light in the Darkness

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On June 14 Iran held a presidential election. Emerging as the winner was Hassan Rowhani, a cleric of relatively moderate views. Rowhani took over 50% of the vote in a six-candidate field, thus avoiding a runoff. Over 70% of the electorate turned out to vote, and large crowds filled the streets of Tehran and other cities to celebrate the election result.

By all accounts the election was free and fair, without the manipulation and fraud that marked the 2009 contest. Of course, the candidates for president were selected, or given permission to run, by Iran’s supreme leader, Ayatollah Ali Khamenei. Nevertheless, Iran is by Middle Eastern standards a functioning democracy. And Iranians are more pro-Western than any other people in the Islamic world, except perhaps the Turks.

The Iranian people have, through their votes, expressed a desire to re-engage with the West, and particularly the United States. This is hardly surprising, given the economic suffering caused by the sanctions under which Iran has been living since 2006. Rowhani, while ruling out direct talks with the US for the moment, appears to want some kind of deal on the nuclear issue that has plagued US-Iranian relations for more than a decade. He was Iran’s nuclear negotiator from 2003 to 2005, during the presidency of another moderate cleric, Mohammad Khatami. Khatami and Rowhani were responsible for Iran’s voluntary suspension of nuclear enrichment in 2004, a concession that brought no meaningful response from the US and its European allies. As a result, the hardliners in Tehran have been in the saddle since the Khatami presidency ended in 2005.

Iran will never agree to end uranium enrichment completely. Indeed, it has a right to enrich for peaceful purposes under the Nuclear Non-Proliferation Treaty. However, in the present environment Iran may be willing to limit enrichment to less than 20% (at 20% enrichment uranium can be converted to weapons-grade material relatively quickly), and allow meaningful international inspections of its nuclear facilities. Given that President Obama has categorically ruled out containment as a response to a nuclear Iran, this option seems to be the only one other than war available to us. War would be a catastrophe for both Iran and the US.

The US has been given something very rare in international relations — a second chance. During the Khatami presidency from 1997 to 2005, the US failed to seize opportunities for an American-Iranian détente. The Clinton administration was too timid; the Bush administration had no interest in improved relations. Given the importance of the Persian Gulf region, and Iran’s status as a regional actor, every effort must be made to reach a modus vivendi with the Islamic Republic. Rowhani’s decisive victory has given him weight to counterbalance the hardliners in Tehran. By reaching out to him we can perhaps tip the scales in favor of peace.




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Fracking, Jawohl?

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A recent Wall Street Journal piece indicates that the Germans are beginning to face the consequences of their devotion to the environmentalist faith. Two years ago, under pressure from their Greens, the German government announced that it would end its use of nuclear power, and move to the so-called “renewable” energy sources of wind and solar power. It stopped any expansion of nuclear power and started phasing out the sector, with six of its plants due to close over the next seven years.

But this Green revolution has resulted in the same problems that have been experienced everywhere else it’s been tried. Both wind and solar are massively more costly than even nuclear power, which is itself more costly than conventional power, derived from fossil fuels. This is because both the wind and the solar facilities are at best only intermittent (much of the time, the wind doesn’t blow and the sun doesn’t shine), and because the power source is comparatively feeble (winds don’t often blow very hard, and the sun is 93 million miles away). So you need huge installations that have their own environmental costs. All of this requires massive taxpayer subsidization.

In Germany, the subsidies are directly passed on to the consumers, which has resulted in German households seeing what were already some of the highest electricity rates in Europe soar by a staggering 40% in just the past five years. German families now pay 15% more than the average for the EU zone.

Not only are average consumers feeling the pain, but businesses are as well. As you might surmise, businesses that use a lot of energy (such as many manufacturers) are cutting back their investment in Germany.

Ironically, the move to terminate nuclear power has hurt the environment. Since the only scalable and affordable alternative is fossil fuels, mainly coal, Germany say its CO2 emissions actually increased last year by 1.6%. If it has to rely on coal to replace all the nukes it plans to shut down over the next seven years, these emissions — as well as the emissions of other major pollutants — will skyrocket accordingly.

So — surprise, surprise! — fracking is beginning to look good to both the German government and many of its citizens. And — again, surprise! surprise! — German Greens are rising in opposition. Like environmentalists here, they typically only support sources of power that don’t actually work very well.

The German government, seeing the problems that “renewable energy” is causing, now proposes to allow fracking so long as it is not near any water sources, nor in any national parks or other conservation areas, and is subject to regulatory oversight.

While Germany has nowhere near the amount of frackable natural gas as nearby countries such as Poland and Ukraine, it still has an estimated 50-year supply.

But the German government should be under no illusions here. No matter how tightly it regulates fracking, the Greens will oppose it. They will oppose it not because they fear it won’t work, safely and efficiently, but precisely because they know it will.

The hard core of the Green movement consists in many cases of nature-cultists, people who view humans as a blight on the otherwise pristine, garden-of-Eden planet. They want economies to fail, so that humans will die off.

These worshipers of Thanatos can never be happy with anything that helps humanity flourish.




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Green Dreams, Green Nightmares

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A rush of recent reports on energy has much to say about the fundamental foolishness of the green vision of energy production, the vision long regnant in academia, and the one that informs the Obama regime.

The green vision — really, the green dream or delusion — is that the world is running out of fossil fuels, and we need to switch to so-called renewable or sustainable sources, such as solar power, wind power, and biofuels. (These “renewable,” allegedly low-pollution green options never include nuclear or hydroelectric power, both of which are proven to be cost-effective and clean — a point to which I will return shortly). If we just embrace these “new” energy sources, the greens aver, jobs will just multiply magically.But if we continue to use fossil fuels, we are doomed to economic stagnation.

The first report is the happy news that the number of new American oil wells is increasing at a pace not seen in over three decades.

According to the major oil drilling company Baker Hughes, it installed over 800 new oil rigs last year, over twice the previous year's (2009) total, and a tenfold increase over the yearly average during the late 1990s.

These rigs are placed to tap so-called “unconventional reservoirs,” squeezed into shale rock strata. Ten years ago these shale oil reservoirs were written off, but the increase in oil prices and in the level of oil-drilling technology have now opened them up.

The story mentions several promising shale oil fields, including the Eagle Ford formation (stretching from southern Texas into northern Mexico), the Bakken formation (in North Dakota), and the Monterey formation (in California). These formations currently produce about half a million barrels a day. It is now projected that production will hit 1.5 million barrels per day in four years, the equivalent of what we currently get from the Gulf of Mexico, which is roughly about 30% of current total domestic oil production. This will go far toward making up for declining production from our conventional fields in Alaska and the Gulf of Mexico.

The Bakken formation is yielding oil faster than can be sent through pipelines to market, so the oil companies are shipping it by road and rail. The companies have had to open camps to house all the workers needed, and North Dakota has unemployment at less than half the national average (its rate is 3.8%, to be exact). As another article notes, the Bakken field produced 113 million barrels in 2010, up from 33 million the year before.

If the Bakken and Eagle Ford oil fields pay out as expected (they are projected to yield an eventual four billion barrels of oil), they will wind up as the fifth- and sixth- biggest US fields ever found. By 2020, shale oil fields could allow us to cut our imports of foreign oil by 60%, which (at $90 a barrel) is $175 billion less we give foreign dictators. And another article reports that the EIA estimates that with these new fields, American petroleum production will increase 14% by 2020.

A more recent news item gives us more detail about the new shale oil drilling technology. It involves drilling down and then horizontally into the rock, then pumping a mixture of sand, water, and small amount of chemicals in to crack the rock and loosen the oil molecules. Drillers figured out how to make the shale crack more extensively, and that made the extracted oil cheaper than had ever been thought possible.

This process, called fracking, has proven very effective in freeing natural gas, as I noted in an earlier piece. It is beginning to pay off big time in oil production as well.

With this method, new fields are being opened, such as the Leonard formation (which straddles New Mexico and Texas), and the Niobrara formation (which underlies Wyoming, Colorado, Nebraska, and Kansas).

Now, last year, as shale oil technology started proving itself a tremendously effective method for extracting oil, environmentalists immediately arose in opposition. Rep. Henry Waxman (D-CA) held hearings investigating fracking, and the environmentalist Left produced a documentary (Gasland) alleging that the technology was poisoning groundwater. But all the EPA studies have shown that fracking is safe, and even the Environmental Defense Fund seems comfortable with it.

So much for the death of petroleum. Turning now to renewable-green energy sources, some interesting stories are worth noting. Let’s begin with the report that France’s solar program is in trouble.

Two years ago, the French National Assembly passed a law requiring France’s national utility, Electricité de France (EDF), to buy all the power produced by newly installed solar panels at $745 per megawatt-hour, roughly ten times the market price for electricity. The goal was to increase the number of people installing solar panels on their roofs.

The Chinese-manufactured solar panels have a large “carbon footprint” — meaning they were produced by using large amounts of power generated by the burning of dirty coal.

The intended result was that applications for rooftop panel array connections rose — from 7,000 applications a year before the subsidiary to about 3,000 a day by December of last year. But there were unintended, though embarrassingly foreseeable, consequences. One was that the cost to EDF of buying solar power has exploded to $1.4 billion a year, and is threatening its financial health. EDF saw its stock drop by 20% in 2010 (compare that to a 3.7% drop for Europe’s Stoxx 600 Utilities Index). EDF is now $78 billion in debt, a situation that has caused it to defer modernizing its 53 nuclear reactors (which provide 75% of France’s electricity). And it has had to jack up the surcharge that consumers who don’t use solar panels have to pay.

A second consequence is that the solar panels are being purchased from China, thus shifting jobs from France to there. Worse, the Chinese solar panels have a large “carbon footprint” — meaning they were produced by using large amounts of power generated by the burning of dirty coal!

Then there is the report about an ethanol plant, Range Fuels, that in 2007 received startup subsidies of $76 million from the federal government and $6 million from the lucky state of Georgia, where it was supposed to open a plant making ethanol from pine chips. The next year, it got a loan for $80 million, guaranteed by taxpayers under the “Biorefinery Assistance Program.”

The reason the Bush administration started pushing this “advanced biofuels cellulosic ethanol” program (essentially, a program for producing ethanol from switch grass and other biomass) was that corn-based ethanol was already rapidly acquiring a bad reputation for excessive costs and a low yield of energy outputs. Cellulosic ethanol looked like a better prospect.

Georgia politicians were so excited by the smell of pork that they started calling their state “the Saudi Arabia of Pine Trees.” The Saudi Arabia of pine trees!

Well, guess what? Range Fuels just closed, having never produced even one shot of ethanol. Gone with the wind, as they used to say in Atlanta. And all the subsidy money gone with it.

Honest to God, you couldn’t make this stuff up.

 




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Very Green, But Not So Jolly

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Several recent stories indicate anew just how green the Obama administration is, and how much harm it is prepared to inflict on the country to further its environmentalist agenda.

First is the report that the administration is yet again reversing course on offshore drilling. Back in March, weeks before the BP oil spill, Obama’s Interior Secretary Ken Salazar announced that the administration would finally open the eastern Gulf of Mexico and parts of the Atlantic coast (in particular, the coast of Virginia) to oil and gas exploration. This marked a change of position for Obama. While campaigning for the presidency he said he would allow expanded coastal exploration and development (this as McCain was getting traction in the polls with “drill, baby, drill!”); but once elected, he reversed his position and refused to allow it.

So now we are back to no new offshore drilling (and a continuing moratorium on deepwater drilling). Karen Harbert, president of the U.S. Chamber of Commerce, put the situation aptly: “The Administration is sending a message to America’s oil and gas industry: take your capital, technology, and jobs somewhere else.”

The absurdity of this policy is underscored by the fact that gasoline nationwide is edging back toward $3 a gallon, and by the news that unemployment just went up to 9.8% nationwide, marking the longest period of over 9% unemployment since the Great Depression.

The second story is a study in contrast. It’s a report that China plans to spend over $500 billion to build 245 new nuclear power plants. This would mean adding nearly two and a half times as many as the U.S. has in total. As Zhao Chengkun, vice-president of the China Nuclear Energy Association, put it, “Developing clean, low-carbon energy is an international priority. Nuclear is recognized as the only energy source that can be used on a mass scale to achieve this.” While our administration dithers about constructing just one new reactor, the Chinese barrel ahead.

A third story concerns the ever-frisky EPA. It has just announced a dramatic increase in regulations on energy industries aimed at reducing greenhouse gases. Among the new EPA diktats is the requirement that the maximum allowable ground-level ozone level be dropped by up to 20%. Hundreds of American municipalities are struggling to comply with the existing maximum level, so tightening the standards still further will just bury those places financially. The Manufacturers Alliance/MAPI estimates that this new EPA regulation will cost America on the order of 7.3 million jobs and about a trillion dollars in regulatory costs within a decade.

It is doubtful whether this reduction in ambient ozone would result in any measurable gain in public health, much less in a gain big enough to justify the huge economic and human costs. But the Obama administration is full of green ideologues for whom such considerations matter little.

To be green means that you worship all life forms — except human beings.




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