Posts tagged with: oil

Blog author: jballor
Wednesday, December 13, 2006

A debate about the future of energy policy is being held over at sp!ked, sponsored by Research Councils UK. From their notice:

Expanding supply or managing demand?

In the opening articles, five commentators address the question from different viewpoints.

ADAM VAUGHAN, online editor, New Consumer magazine argues that saving energy is the way forward: ‘By taking a number of simple steps, consumers can save energy and money – and help save the planet.’

JOE KAPLINSKY, science writer, spiked, believes that we need to greatly expand energy supply: ‘The best thing that we could do for future generations is to build a new energy infrastructure, bigger and better than the old one.’

MALCOLM GRIMSTON, associate fellow at Chatham House, argues that we need to embrace nuclear power: ‘Nuclear energy remains the only proven large-scale option that can deliver major saving in greenhouse gas emissions.’

MARK JACCARD, professor of resource and environmental management at Simon Fraser University, Vancouver believes that fossil fuels, particularly coal, remain central to energy supply: ‘Zero-emission fossil fuels will remain cost competitive for at least a century.’

JIM SKEA, research director, UK Energy Research Centre argues that renewables are not a panacea to all our energy problems, but ‘A variety of renewable technologies may play an important part in energy generation in the future.’

spiked is keen to find out what readers think, and you can respond to the debate here.

I would also briefly mention that you can read a related article by me here, and that in general I think the options posed in the debates subtitle (reduction of use or expansion of supply) is similar to the options posed by the problem greenhouse gas emissions (reduction of emissions or increase of sequestration).

Most of the policy recommendations I’ve seen regarding CO2 emissions have focused on reduction of emissions rather than an increases in the rate and amount of carbon sequestration (in forests and so on). There’s a lot of work to be done on that latter point, especially if largescale reduction of emissions is untenable both politically and economically for the foreseeable future.

The blog Autopia passes along this NYT story outlining some of the fundamental challenges facing plug-in hybrid electric cars. The basic formula for the appeal of such hybrids is as follows: “The electric system runs mostly on coal, natural gas and uranium, all relatively plentiful. Cars run mostly on oil, oil and oil, which lately has been expensive. Wouldn’t it be nice to connect the two?” And as attractive an option as this might be, the NYT story writes that “despite the hopes of policy makers, engineers say there is no prospect of this happening in the near future.”

Coal Burning With Scrubbers

John Gartner is not so pessimistic about the short-term prospects for plug-in hybrids, and concludes, “The competition between the oil companies and electric companies will result in cleaner and more cost-efficient choices for consumers, and that we can all be happy about.”

But here’s the kicker for advocates of plug-in hybrids: The main source of electricity for the United States is fossil fuels, according to the DoE providing “nearly two-thirds of our electricity,” and more than half of that comes from coal. So it isn’t the case that moving from gasoline-powered engines to plug-in hybrids will move us away from the use of fossil fuels. It will, for the most part, simply shift the consumption from oil to coal.

That has some attractive national security implications, since “one quarter of the world’s coal reserves are found within the United States,” as opposed to our need to massively import foreign oil. It is on this basis that Frank J. Gaffney, Jr. argues, “It makes eminent sense to make as rapid a transition to those plug-in hybrids as we can.” This of course assumes that the withdrawal of international trade actually improves rather than worsens the prospects for international peace. Let’s leave that questionable assumption aside for now, which contradicts Bastiat’s observation, “When goods don’t cross borders, soldiers will.”

With respect to the “green-ness” of plug-in hybrids, their environmentally-friendly image belies the fact that such hybrids will to a large extent be running on the energy provided by coal. Until our nation’s electricity comes from renewable and alternative sources of energy, such as nuclear power, the environmental attractiveness of hybrids will remain illusory.

In a previous commentary examining some related aspects of these issues, I ask rhetorically, “Just how many coal-powered SUVs have you seen lately?” Well, if there were plug-in hybrid SUVs, they would to a great extent be coal-powered…and not so green as you might first think.

At the request of Andy Crouch, who is among other things editorial director for The Christian Vision Project at Christianity Today, I have taken a look at the editorial from The Economist’s special issue from Sept. 9.

To recap, Andy asked me, “what are your thoughts about The Economist’s special report on climate change last week, in which they conclude that the risks of climate change, and the likely manageable cost of mitigation, warrant the world, and especially the US, taking prompt action?”

He continues, “This is, obviously, a magazine with impeccable liberal economic (not to mention journalistic) credentials, and one of the sponsors of the Copenhagen Consensus that raised questions about the wisdom of prioritizing climate change. I believe they would not have taken this editorial position five years ago. Do you think they are mistaken in doing so now? What do you see as the salient evidence they missed, if so?”

The special report consists of a number of articles examining the issue of climate change and are available for purchase as a PDF set here. (more…)

Blog author: jballor
Thursday, August 10, 2006

“Throughout history, shortages of vital resources have driven innovation, and energy has often starred in these technological dramas. The desperate search for new sources of energy and new materials has frequently produced remarkable advances that no one could have imagined when the shortage first became evident.” So says Stephen L. Sass, a professor of materials science and engineering at Cornell, in today’s NYT op-ed, “Scarcity, Mother of Invention.”

He concludes, “If there is anything to be learned from history, it’s that we need to face the harsh reality of fossil fuel scarcity and begin something like a Manhattan project to develop clean, economical, and preferably sustainable new sources of energy. Just as importantly, we need to innovate on the side of conservation and efficiency.” While there is valid dispute about just which point we are at with regard to the scarcity of fossil fuels, the larger considerations stand.

I made a similar point in my most recent Acton Commentary, “Transcendence and Obsolescence: The Responsible Stewardship of Oil,” in which I argue that “human stewardship of oil and other petroleum-based fuels entails a responsibility to use the economic opportunities they afford to find and integrate other renewable, sustainable, and cleaner sources of energy, especially represented by the promise of nuclear power, into our long-term supply.”

On a related note, check out this WaPo story, “Md. County Offers Incentives To Boost Nuclear Operation”:

There may be growing acceptance of nuclear power, owing to concerns over global warming, dependence on foreign oil and skyrocketing energy costs. Some leading environmentalists are saying nuclear energy should at least be explored as a way to offset global climate change.

But Jim Riccio, a nuclear policy analyst with Greenpeace International, said nuclear power remains unsafe and is too dependent on government subsidies. He is keeping an eye on Calvert County developments. “No ifs, ands or buts,” he said. “Until the last dog dies, Greenpeace will be anti-nuclear.”

Today’s NYT editorializes: “a country that consumes one-quarter of the world’s oil supply while holding only 3 percent of the reserves will never be able to drill its way to lower oil prices, much less oil independence.”

You’ll often hear the complaint that Americans use more than their fair share of the world’s oil. We’re addicted to it, some say. After all, so goes the reasoning, we have less than one-half of one percent of the world’s population, but we “consume one-quarter of the world’s oil supply.” Seems wildly out of proportion, doesn’t it?

That is, until you take into account that the United States economy represents somewhere between 20 and 30 percent of gross world product (depending on how you calculate it). So the US also produces wealth that is wildly out of proportion to our share of the world’s population.

There is a real correspondence between economic power and the use of fossil fuels. That’s part of the reality I was pointing to in this week’s Acton Commentary: “Fossil fuels would thus have the created purpose of providing relatively cheap and pervasive sources of energy. These limited and finite resources help raise the standard of living and economic situation of societies to the point where technological research is capable of finding even cheaper, more efficient, renewable, and cleaner sources of energy.”

And here’s just one more side note. Without too much exaggeration, you could say that today’s electric cars are really coal-powered. If you look at the sources of electricity in the US, “coal provides over half of the electricity flowing into American homes.” That means that in one ideal world of the alternative fuel crowd, when you plug your car in, you’re plugging it in to a coal plant (this is also why the idea of consumer carbon credits is catching on). The energy and environmental issues in the world are about far more than “gas guzzling” SUVs.

Juliet Eilperin, “Bush Pollution Curbs Are Rated Equal to Clinton’s: Science Panel Says Proposed Cap-and-Trade System Will Help Clean Air,” Washington Post, July 24, 2006:

The report from the National Academy of Sciences, released yesterday, represents the latest effort to assess how best to reduce air pollution estimated to cause as many as 24,000 premature deaths each year. The panel concluded that an earlier Bush plan would have allowed pollution to increase over a dozen years, but it found that the administration’s more recent Clean Air Interstate Rule (CAIR) — which targets emissions from power plants in 22 states and the District of Columbia — would help clean the air over the next two decades.

The CAIR approach aims to reduce nitrogen oxide and sulfur dioxide emissions by 70 percent by 2025 at the latest, according to the Environmental Protection Agency, through a system that would allow utilities to sell and buy pollution credits as long as industry emissions as a whole stayed below a pre-set cap.

Cap-and-trade schemes may be better than command-and-control techniques, but maybe they’re not all they’re cracked up to be.

Hugh Ross, “The Faint Sun,” Facts for Faith, Reasons to Believe, 2002:

The timing of humanity’s arrival—near the end of life’s long tenure on Earth—may appear tragic at first glance. But a longer look suggests it may be viewed as a gift. Scanning the horizon of civilization—farms, ranches, towns, cities, and all the transportation and communication arteries linking them—one sees a plethora of building materials derived from nearly 4 billion years of life and death: gems, sand, steel, asphalt, concrete, copper, limestone, marble, plastics, etc. Most of the energy that drives civilization comes from biodeposits—oil, coal, wood, kerogen, natural gas, and so forth. Many of the fertilizers that support agricultural production also come from biodeposits—phosphates, nitrates, and such.

Such bountiful provisions powerfully indicate a Provider who carefully planned and prepared the planet through the ages for human life. They speak of a purpose for the human race. The Bible reveals a purpose that involves, yet goes beyond, the current “heavens and Earth.”

More here on the providential purpose for petroleum. (HT: John Linsley of RTB)

Associated Press, “Christian Ministry Wants to Build Turbines to Spread the Gospel,” The Church Report, July 23, 2006:

A Christian ministry group wants to build 36 wind turbines on the roof of a former steel company to generate money to help spread its message….

Energy produced by the turbines will be sold back to Wisconsin Energy Corp. through a buyback program.

More here on these so-called “Cuisinarts of the air.”

In this week’s commentary, “Transcendence and Obsolescence: The Responsible Stewardship of Oil,” I ask the question: “Why did God create oil?” I raise the question within the context of debates about global warming and the burning of fossil fuels, including Al Gore’s movie An Inconvenient Truth and the work of the Evangelical Climate Initiative.

I argue that nonrenewable resources, especially fossil fuels, “have the created purpose of providing relatively cheap and pervasive sources of energy. These limited and finite resources help raise the standard of living and economic situation of societies to the point where technological research is capable of finding even cheaper, more efficient, renewable, and cleaner sources of energy.” Nuclear power is one source that meets these criteria. The NRO blog Reconcilable Differences passes along this NYT magazine story about the potentially bleak future for nuclear power in America, “Atomic Balm?”

The point about nuclear energy is important because the burning of coal accounts for over half of the domestic use of electricity, and that high-profile campaigns like “What Would Jesus Drive?” paper over this key fact. I wonder “just how many coal-powered SUVs have you seen lately?”

Well, it turns out that there is technology that allows us to turn coal into oil, although it is costly and potentially ineffecient. Even so, the high costs of oil are currently turning this into a more feasible economic possibility. For more on this, see this NYT story, “Mining for Diesel Fuel; The Search for New Oil Sources Leads to Processed Coal” (TimesSelect required).

Read the entire commentary here.

You may have seen an op-ed in the NYT last week by Tom Friedman, who noted that when oil and gas prices go up, bad things happen in oil producing nations abroad. The tendency is for the oppressive regimes in oil producing nations to consolidate their power and be less responsive to the demands of their citizens when they have the added buffer of huge profits from the sale of oil.

And domestically many have made the claim that rising oil and gas prices are a bad thing. Many people’s pocketbooks have been hit hard, when they stop to fill up at the pump and over the course of the long winter. So many people are against high gas prices that politicians at almost every level have felt the need to respond and make some sort of gesture, token or substantive, to address the issue.

There’s no doubt that the poor, as in most cases, are disproportionately affected by high energy prices. People on fixed incomes often have trouble paying their utility bills when prices spike. Others who must commute to their jobs have trouble filling up the gas tank. Attention needs to be fixed on the people in these sorts of situations, and help should be there when they need it. It must be noted, too, that increased taxes have the same drawback as increased prices from market-pressures: they are regressive.

But for the vast majority of Americans, if addressed honestly, the rising cost of oil is more of an inconvenience than anything else. If people can afford to buy expensive new SUVs and large trucks, they can afford the pinch on their disposable income that higher gas prices mean.

Even so, the inconvenience does have the ability to change people’s behavior, and this is why I’m making the argument that high gas prices have the potential to be a good, albeit a costly one (so to speak). People might drive less, carpool more, walk to the corner store instead of driving, and so on.

But an even bigger point is this: as gas prices rise the cost relative to other forms of energy is bound to decrease. This is why so many environmental advocates have long been arguing in favor of some sort of hefty additional petroleum products tax, which would make other sources of energy more competitive.

But what so many fail to see is that the market can accomplish by itself what such artificial and authoritarian measures are intended to do. Clearly the price we pay at the gas pump includes a huge amount by way of taxes to the various levels of government. But when gas prices rise without an increase in the amount of government taxation, the market itself is making other cleaner and renewable sources of energy more competitive.

As the Cornwall Declaration observes, “A clean environment is a costly good.” This has never been more true than in the case of rising gas prices. The wealth created by market economies allows the creation of new, better, and more efficient technologies. And the market itself gives strong economic incentive to the pursuit of such endeavors, especially when oil prices are on the rise.

It’s high time that environmentalists stopped being so wishy-washy about the market. As Paul Jacobs points out, they like the market when the prices are high but hate it when they are low. On this inconsistency, Jacobs is right. But where he’s wrong, I think, is that arguing for the positive effects of the market in this case automatically means that you must otherwise be for increased taxation to accomplish the same goals.

Related Items:

“Bodies for Barrels,” The McLaughlin Group, May 5, 2006 (archived text of issue available here; search for ” Issue Two: Bodies for Barrels.”) Key quote from Tony Blankley: “I’m in favor of free markets. The people will go to smaller cars if they want them. And trying to force people to buy cars they don’t want is foolish. And anybody who wants to protect their family, particularly if you have children, you want them in a lot of steel around them. And that to me is the better call to protect your children – driving around in Suburbans and large vehicles.”

Tom Daschle and Vinod Khosla, “Miles Per Cob,” The New York Times, May 8, 2006. Another installment of the “governments create markets” fallacy.

Jordan J. Ballor, “Humanity’s creativity helps environment,” Detroit News, April 22, 2006.

Jordan J. Ballor, “Cashing in on Carbon Credits,” Acton Commentary, April 19, 2006.

You may have heard about the debate in Washington that erupted late last week, as Senate Democrats and Republicans sought ways to respond to rising gas prices. According to Marketplace’s Hillary Wikai, the majority Republicans settled on “a $100 gas-tax rebate to be paid for by drilling in Alaska’s Wildlife Refuge.”

Michigan Democrat Debbie Stabenow proposed “a $500 rebate but pay for it by cutting the tax breaks for oil companies.” She said, “We should instead put that money back in the pockets of the people paying the high gas prices.” But one other Democratic plan was to stop taking that money from the people in the first place, at least temporarily.

The NYT reports that “Democrats were pushing for a 60-day suspension of the federal gas tax of 18.4 cents a gallon, and the Senate Republican leadership settled on the rebate.” The short-term nature of the proposed solutions lead many to suspect that any of the proposed moves are simply pandering to the voters in an important election year.

Indeed, Congress has good reason to distract us from the reality of the situation. As Benjamin Zycher comments (text here), “Oil industry earnings per gallon were about 19 cents in 2005, and have increased to about 23 cents more recently. Federal and state taxes per gallon of gasoline average 46 cents. And so by all means, yes: Let’s have a debate about who is profiteering from the gasoline market.”

Of the two options, clearly suspension of the tax is preferable to filtering money through the government bureaucracy and letting it trickle back to taxpayers. But why make it temporary? If Congress really wants to address the rising price of oil over the long-term, the only thing it can really do is act on what it directly controls. Congress doesn’t control supply and demand, but it does control how much it adds in taxes to the price per gallon. Why not cut or suspend the federal gas tax indefinitely? States could do the same, by the way.

Here are some of the reasons that even the 60-day relief plan was tanked, given by Congressional staffers:

Those leaders and Finance Committee aides said many Republicans opposed the Democratic plan because they feared that oil companies, which pay the gas tax, would not pass savings on to the public, or that the laws of supply and demand would push the price up again.

There was also the probable opposition of House Republicans, who have been reluctant to jeopardize the flow of the gas tax revenue to the highway trust fund that underwrites road and bridge projects.

“Our folks thought it might amount to nothing for consumers,” said one aide who was granted anonymity to discuss internal leadership deliberations.

The first excuse is really just quite lame. If increasing demand raises the prices further, they would still be lower than they would be if the 18.4 cent tax were still in place. The second paragraph really tells the tale. If Americans are addicted to oil, maybe politicians are addicted to taxes.

Instead of being worried that the move might “amount to nothing for consumers,” the politicians are clearly more worried that any move to cut taxes would “amount to nothing” in terms of spendable tax revenue.

Placing limits on the levels of government taxation of gasoline would be a much more substantial and effective move than attempts to set price controls, as advocated in an online petition introduced by Michigan Governor Jennifer Granholm.

According to, Michigan gets nearly 20 cents (19.875) in tax revenue per gallon of gasoline sold, and this figure does not include the additional 6% sales tax that is tacked on.

Government leaders should never forget that they are entirely dependent on the productivity and labor of the nation’s citizens for their budgets. Their task is to responsibly and faithfully administer those funds, acting as stewards on behalf of the tax-payers. Attempts to point the blame for rising gas prices solely on oil companies, without acknowledging the basic role of rising demand and high levels of government taxation, is irresponsible and disingenuous.

Blog author: jballor
Friday, February 10, 2006

There’s something like a question of theodicy implicitly wrapped up in the debate about global warming among Christians. It goes something like this:

Why did God create oil?

One answer is that the burning of fossil fuels is simply a divine trap for unwitting and greedy human beings, who would stop at nothing to rape the earth. Another answer is that there is some legitimate created purpose for fossil fuels.

I’m inclined to think the latter, for a number of reasons. The first answer strikes me akin to the claim that God created the earth to look old…it just doesn’t seem like something God would do. It would cast doubt on the veracity of God, in whom there is nothing false. After all, I don’t recall the covenant with Adam having anything to do with burning fossil fuels.

One possible argument in favor of the first view is that God has created the world in such a way that wrong actions tend to bear negative consequences. The wisdom literature of the Bible attests to this natural order, in which evil bears its own fruit of destruction. But this would mean that fossil fuels were created only with the fallen state of human beings in view, as a check or consequence on human sinfulness (see the corollary at the end).

It seems much more tenable to me to assert that oil was created by God as a natural resource for human beings to use wisely and to steward well in the culturing of the world. It would be much more difficult to “fill the earth and subdue it” if we didn’t have cars and planes and ships to carry us about.

If this is the case, then oil, natural gas, and other petroleum products exist to be used by human beings, but just like any other thing, are to be used responsibly. For example, we can use or misuse food: we can gorge ourselves on it (gluttony), we can waste it, we can hoard it, or we can eat and grow and share food appropriately. Oil might well be a tool like any other, that can be used for good or ill.

Supposing that one of the inevitable effects of the human consumption of oil (speaking here only about engine combustion and not other uses of fossil fuels, e.g. to make plastics) is carbon dioxide emission which inevitably raises global temperatures and adversely effects global climate, what then is our answer to the question? Is there any legitimate use for oil left if this is true? Is oil the forbidden fruit of the twentieth century?

Or perhaps petroleum products are here as a transitional stage in human development, much like societies based on wood-burning sources of energy progressed into the usage of fossil fuels. In this case, petroleum products would have the created purpose of providing relatively cheap and pervasive sources of energy, which would raise the standard of living and economic situation of the societies to the point where technological research would find even cheaper, more efficient, renewable, and cleaner sources of energy.

I don’t think anyone is claiming that oil is going to be the primary source of fuel forever. It’s just the best we have right now. And most of the world, China, for example, is heading into the stage of development where use of fossil fuels is necessary and are not at the point of progressing beyond it.

A corollary: the issue of the creation of fossil fuels through animal death may or may not have an impact here. It’s an open question to me whether animal death existed before the Fall. Certainly some kind of death (plant) undoubtedly occurred, and some form of animal death (bacteria) probably existed as well. If oil is only the consequence of animal death which is itself the product of the Fall, perhaps the well is tainted, so to speak. You might be able to argue conversely, however, that this is an example of God bringing good from evil, so the origin of fossil fuels from animal fossils doesn’t seem to be definitive.