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Musings on “Energy Independence” …

May 23rd, 2017 · No Comments

The mistaken priority of “Energy Independence” is in vogue in no small part because of the recklessly dangerous and backwards-thinking Trump Presidential Executive Order on Promoting Energy Independence and Economic Growth. The EO does not directly define the term “energy independence” (the word “independence”, for example, is only in the title) but the implication is clear. In short, that EO seeks to maximize (private profits from) exploitation of U.S. fossil fuel resources while minimizing any barriers (such as protecting human health and the environment (whether streams, wildlife, land reclamation, or the atmosphere)) to that exploitation.

[update] From today:

that sparked this great reaction:

Recently, a journalist seeking to explore ‘just what is energy independence’ reached out for a conversation. After the fold are some musings as to ‘energy independence’, why it is simply a misleading term and rather absurd target, why energy resiliency/security/sustainability are likelier better terms, the power of efficiency, and how this EO really seems counter to any serious consideration or desire for energy independence and/or energy resiliency and/or energy security and/or energy sustainability.

Energy Independence is actually just a mediocre term.

The reality of the 21st century is modern economies are interdependent (even the most autarkic, such as North Korea, still have major reliances on and interactions with other nations).  What is “energy independent” in the face of that reality? That 100% of the used energy comes from within the nation’s borders? That 100% of the energy system come from within the borders? That 100% of the materials necessary for / related to ‘energy’ come from within the nation’s borders?

The United States imports not just crude oil nor just natural gas nor just …, but also much of the materials and equipment necessary to extract resources for delivering energy services (that includes not just steel pipes and electrical transformers and pieces for nuclear power plants and drilling equipment and control systems for oil refineries and …, but also solar panels (for ‘extracting’ electricity from solar radiation) and wind turbines (‘extracting’ electrons from blowing wind). Now, there are domestic sources for many (perhaps even most) elements of the ‘energy system’, but a simple truth:  our energy system is somewhat a true modern Tower Of Babel, constructed out of pieces from around the world.

Energy Independence — in an autarkic sense of the word, with zero reliance on other nations for a secure, reliable energy system — is simply an absurdity for any modern nation, including the United States.

Energy Resiliency, Security and Sustainability are simply better terms for capturing true objectives.

Putting aside those pesky little environmental challenges and all those externalities where Team Trump (and the GOP) simply rejects reality, Energy Independence is still a weak term not capturing a reasonable (educated/informed) perspective on what ‘we’ might wish to strive to achieve.

We would like to have an energy system

  • able to weather shocks — whether squirrels eating wires, (climate-change worsened) storm damage, terrorist attacks on pipelines, or a foreign power (or powers) seeking to disrupt energy supplies and prices (as per OPEC in the oil shocks).   Such a system doesn’t need to be ‘independent’ as opposed to judiciously secure from disruptions — enough domestic oil to weather an embargo, a transformer manufacturer in the United States (or a large enough supply of reserve transformers) to deal with disruption in the electricity disruption system, etc …
  • able to stand the test of time:
    • structured for continuous evolution and transformation to keep pace with the needs of an ever-evolving society.
    • sustainable in terms of resource use, financially (and, sigh, environmentally) …
    • sustainable indefinitely

Energy Resiliency/Security/Sustainability requires understanding the system, supply chains to support it, potential threats (natural or manmade, hard (technologies, resource constraints) or soft (business model changes) potential disruptors, etc …), and what would be required to maintain energy services (the society, the economy) in the event of those threats emerging as reality.

Energy Independence — as promoted within Trump’s EO and within the resurrected concept of ‘drill, baby, drill + mine, baby, mine’ — doesn’t meet those standards, not even close. On one simple point, there is a reality that at some point fossil fuel resources will run dry (putting aside, again, those pesky climate issues): building a system based on promoting accelerated use of those (by definition) limited resources simply isn’t sustainable in the ‘maintainability indefinitely test.

Energy Efficiency is key … and yet absent …

If one has any seriousness about ‘Energy Independence’ (even solely in terms of producing 100% of the fossil fuel resources required to meet US demand)/Resiliency/Security/Sustainability, energy efficiency is core to achieving the objectives.  The basic negawatts truth applies to oil: Every barrel of oil not required is one barrel of imports no longer necessary.  If Team Trump wants ‘Energy Independence’, part of the strategy and policy would be figuring out how to reduce demand even as/if working to increase domestic supply. Energy Efficiency makes ‘Independence’ easier to achieve.

The EO fails The Test of Time 

While one can argue about ‘how much oil is out there’, the truth is that (aside from some troglydyte thinkers and politicians) dinosaurs aren’t roaming the earth, ‘fossil fuels’ are not renewable on a human time scale, and the resources are limited.  (A side note, very highly recommend The Oracle of Oil, a biography of the analyst/thinker who is associated with the birth of Peak Oil.) A policy to accelerate exploitation of domestic fossil fuel resources truly seems counter-productive:

  • Prices are relatively low today and this policy burns US resources at a cheap price making the US economy and American security vulnerable to higher prices tomorrow.
    • A smarter policy might be to moderate US production, develop policies to squeeze more value from every drop of oil/ton of coal/btu of natural gas (efficiency), and rely on cheap imports —
    • Making others go through their resources while maintaining a secure domestic supply for longer.
    • Reduce US vulnerability to future price shocks.
  • If one truly wants a system that can pass ‘the test of time’, it almost certainly seems that a high renewables and development of fusion power systems would be the choice: the world (at least within the next few billion years or so) isn’t going to run out of sun, wind, waves, nor water (for fusion).

Hidden Implications of Burn It Now Promotion

There are a somewhat hidden element of a policy to ‘drill and dig to burn it now’. This policy promotion seems to implicitly accept several elements:

  • Climate policies will constrict fossil fuel use in the future.
    • Undrilled/unmined fossil fuels are at risk of becoming ‘stranded assets’, items on the books whose value disappears rather than representing future revenue/profits.
    • Thus, ‘let’s burn it now’ and cash in before someone actually puts policy in place that makes it clear ‘the party is over’ (as we will now deal with the consequences of our binge).
  • Technology is overtaking fossil fuels
    • Watching Team Trump, if one assumes ‘honesty’ in terms perspectives about solar, wind, and other renewables, it as if they haven’t actually examined the business reality for a decade or more.  They will discuss high prices, lack of reliability, etc … Well,
      • Germany has very high renewables penetration (wind and solar) and has far fewer electricity disruptions (and far higher power quality) than Americans face.
      • Solar (pv) and wind prices are plummeting — increasingly, in every more market situations around the world, these ‘intermittent renewables’ are beating out fossil fuel electricity generation on straight price shoot outs. And, these remain relatively young technologies — the prices will continue to fall.
        • Who would want to put up a coal plant or burn natural gas when solar hits 1.5 cents per kilowatt hour? (Likely by the mid-2020s, if not earlier, in high-quality solar resources areas like the Arabian Peninsula, the Chilean desert, southwest United States, …)
        • And, how many industries would switch their heat source from natural gas to solar in such an environment? (Think making ammonia fertilizer using clean electrons and water …)
    • Electric vehicles — with the (partial) exception of range — simply out perform gasoline engines. EV performance is improving and prices are collapsing. And, the vast majority of consumers show, once they have had at least a test drive, preference for EVs over traditional vehicles.  Some analyses show that EVs, alone, could carve out millions of barrels a day from oil demand by the mid-2020s.

If you were a strategic planner (who was totally unconcerned about pesky little problems like climate change) in a fossil fuel production firm and looked out to a future with (a) increased policy restrictions and (b) ever-lower price competitors and (C) rapidly emergent alternatives to your product, the necessary plan is pretty clear:  squeeze as much profit as possible out until such time as the ability to make profit disappears.

If you consider that equation while looking at Trump’s “Energy Independence” EO, it provides a different logic that could be behind this polluter-friendly and humanity-destroying concept for the U.S. energy system.


PS: By the way, the Trump ‘budget’ release gives another example of the absurdities re ‘energy independence’.  Selling off the Strategic Petroleum Reserve, as Mulvaney’s budget calls for, simply makes the United States more vulnerable to disruption (whether from international market turmoil, war, natural disaster, or …).

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Tags: Energy · Trump