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Elementary arithmetic beyond Joe Nocera’s grasp?

February 19th, 2013 · No Comments

New York Times columnist Joe Nocera has put up How Not to Fix Climate Change. In private correspondence, in bringing this to my attention, one person commented that reading this “lowered my IQ by 20 points,” another “elementary arithmetic seems beyond his grasp”, and third that the title should have been “demonstrating multiple levels of ignorance in a highly public way”. Nocera, in short, is arguing for Keystone XL using some arguments that quickly become head-scratching with even the briefest of scrutiny:

Let’s quickly tackle these points.

Like it or not, fossil fuels are going to remain the world’s dominant energy source for the foreseeable future, and we are far better off getting our oil from Canada than, say, Venezuela.

Sigh. Why does the New York Times editorial staff let such propagandist errors to go through. What is the basic point of the Keystone XL pipeline? To take DilBit (diluted bitumen) from the Canadian Tar Sands projects to Gulf Coast refineries and make them available for export into the international market place. Right now, upper Midwest refineries are buying DilBit at a discount from world prices because Tar Sands producers don’t have cheap and easy ways to get their product onto the world market (and into Chinese diesel fuel supply). Keystone XL will actually facilitate not just increased tar sands production but also the reduction of Canadian tar sands production in the U.S. market place and an increase in fuel prices in much of the Midwest.

the climate change effects of tar sands oil are, all in all, pretty small.

First, this basic argument is like saying ‘who cares if a kid pees in the swimming pool, there is a lot of water …’ Every increment, in and of itself, can be portrayed as somehow ‘small’ but there is the impact of many incremental inputs. 100 kids peeing … 1000?? When do you say no to pissing into waters where others want to swim?

And, well, contrary to Nocera’s shallow claims, the Tar Sands represent a lot of carbon emission risk. As per Scientific American’s reporting:

Alberta’s oil sands represent a significant tonnage of carbon. With today’s technology there are roughly 170 billion barrels of oil to be recovered in the tar sands, and an additional 1.63 trillion barrels worth underground if every last bit of bitumen could be separated from sand. “The amount of CO2 locked up in Alberta tar sands is enormous,” notes mechanical engineer John Abraham of the University of Saint Thomas in Minnesota, another signer of the Keystone protest letter from scientists. “If we burn all the tar sand oil, the temperature rise, just from burning that tar sand, will be half of what we’ve already seen”—an estimated additional nearly 0.4 degree C from Alberta alone.

Pretty small, Joe???

And, continuing with the misleading  and faulty logic and attacks on those trying to forestall tar sands development, Joe wrote

very clear about what they hope to accomplish. Oil companies have invested upward of $100 billion to extract the unconventional oil in the sands. A pipeline is the only way to export it. The Keystone pipeline is Canada’s Plan A. Plan B is a pipeline to British Columbia, which would get the oil to China. If the president blocks Keystone, and the First Nation tribes continue their staunch opposition to the western pipeline, then Canada will have the second largest oil reserves in the world — and no place to sell it. The assumption of the activists is that by choking off the supply of new oil sources like the tar sands, the U.S. — and maybe the world — will be forced to transition more quickly to green energy.

As Joe highlights in a set up to criticism of “activists” is that the tar sands are bottled-up in the central US and central Canadian market space without a truly cost-effective path to international markets.   And, if one thought getting Keystone XL approved is difficult, watch out for “plan B” dying in the face of First Nation opposition.

However, the point is not just what the companies have invested but what they might invest. Right now it is difficult and expensive to export DilBit, which sells at a serious discount into the Upper Midwest compared to world market prices. Keystone XL will create something like $40 million per day or over $10 billion per year in additional profit opportunities. With the ability to earn perhaps $20 more per barrel, would that not encourage more destructive Tar Sands operations and at an accelerated pace?

As KC Golden laid out, The Keystone Principle is quite simple: Stop Making It Worse!

Joe’s piece isn’t utterly wrong and perhaps he gets it partially.

The emphasis should be on demand, not supply. If the U.S. stopped consuming so much of the world’s oil, the economic need for the tar sands would evaporate.

True, if demand collapsed and if prices fell dramatically, then the incentive to devastate Canada’s boreal forests for expensive tar sands oil would collapse as well. Joe’s argument that we need lower oil prices to stop tar sands is perhaps the only one that’s actually correct. However, the reason why the oil companies are exploiting tar sands is precisely because we’ve run out of the cheap stuff and now need to go for the dirty and expensive one to feed our addiction. (Which, by the way, is proof (okay, strong evidence) in itself that high prices are not sufficient to reduce our demand massively.)

Truly, while there has been and continues to be a serious focus on reducing demand, there has become a serious recognition of a basic mathematical truth: if humanity exploits all of the carbon ‘on the financial books’ we have cooked the planet’s ability to support modern human civilization. There is not a single person involved in the efforts to forestall Keystone Xl who is not supportive of efforts to reduce demand (through efficiency, better planning, conservation, alternative fuels, etc …) even as they recognize the importance of stopping Keystone XL as part of the path toward constraining destructive Tar Sands exploitation.

like to see oil companies pay a fee, which would rise annually, based on carbon emissions. He said that such a tax could reduce emissions by 30 percent within 10 years. Well, maybe. But it would also likely make the expensive tar sands oil more viable

Okay, see some problems here?

A carbon fee — which makes any and all fossil fuels (including carbon) more expensive — is somehow going to make tar sands more viable? Please explain how making, lets say, every barrel of oil — due to carbon fees — more expensive by $25 will incentivize more tar sands production rather than foster drives for greater energy efficiency and alternative fuels? And, since tar sands exploitation has a higher carbon footprint than other oil production, wouldn’t this actually put tar sands at a competitive disadvantage with other lower carbon footprint options?  Isn’t such a carbon fee directly addressing Nocera’s claim that focus should be on reducing demand? In fact, the carbon fee would disincentivize investment in “expensive tar sands” because it would favor lower cost production (by definition), raise tar sands costs more than lower polluting oil options, and create financial uncertainty for investors and businesses considering 20, 30, 40 year implications of $10 billion+ investments. A carbon fee (especially one that is guaranteed to increase) would create tremendous uncertainty and would undermine tar sands oil viability in multiple ways.

Nocera states “the strategy of activists … is utterly boneheaded”. On reflection, what Nocera has provided an accurate depiction of his self-contradicting broadside against those working to foster paths to avert catastrophic climate disruption.

See: Why not Keystone XL. Clear reasons why Keystone XL is not in the U.S. national interest

UPDATE: Others’ reaction to Nocera:

A carbon tax is essentially a way for policymakers to increase the price of fossil fuels and curb consumer demand without giving producers more incentive to exploit harder-to-reach supplies. There are plenty of arguments for and against a carbon tax, but by itself, it wouldn’t give an added boost to pricey new fossil-fuel sources.

You might think an A-list business reporter for the NY Times would know basic economics. But not in the case of Joe Nocera. …

Last year, Nocera took exception to my saying he joined “the climate ignorati,” asserting that I was casting him as a “global warming denier.” But as I noted at the time, the ignorati are, as Google reveals, “Elites who, despite their power, wealth, or influence, are prone to making serious errors when discussing science and other technical matters.” The shoe fits.

But Nocera doesn’t seem to be a fan of basic economics, as he proceeds to misunderstand Hansen’s policy proposal and offer the laughably wrong argument that a price on carbon would increase the market viability of the dirtiest oil with the highest production costs.

Pro tip: Raising the price of a commodity does not improve its market position. In fact, raising the price of a commodity reduces demand for that commodity. This principle is known in economics as “supply and demand.”

Highly related,

If you want to argue that activists shouldn’t focus on Keystone, you can’t just establish that rallying around and/or blocking Keystone won’t reduce carbon emissions much. So what? Why not try it? Something’s better than nothing, after all. Even if it’s a total waste of time, that may be unproductive, but it’s not counterproductive.

No, you have to establish that the Keystone campaign is impeding or preventing something else better and more effective from happening. That’s what it means to say the Keystone campaign is counterproductive — that it’s detracting from other, superior climate efforts.

What are these other efforts, and how is a focus on Keystone impeding or preventing them? That’s the causal relationship folks like Revkin need to establish to make their case, but they are maddeningly vague about it.

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Tags: Energy