Dear Jim:
Let’s face it, most of our energy shortfalls are completely
self-imposed. Gone are the days of the 1950s when generations looked
to and planned for the future, built infrastructure and power plants
for the grand cities that would one day be. Now we in the US haven’t
built a new nuclear power plant since the Three Mile Island incident.
We’ve
turned against coal even though we have hundreds and hundreds of years
worth of the stuff or more. Ted Kennedy won’t let windmills go
up any more since they wouldn’t look nice to Ocean front property
owners in Massachusetts. We can’t drill in many parts of the
Gulf of Mexico because we don’t want to oil on Florida beaches.
We can’t
build a new pipeline in Alaska because we down in the Continental 48
[states] claim to care about the caribou, who all but a handful of
us will ever even see. Perhaps we should ask the good folks who live
in
Alaska
about
that, but my guess is, to the environmentalists, they up there just
don’t know what is good for them, so why give them the chance
to make a decision for themselves.
Since I was in grade school in the 1970s, we always had just 25 years
of oil left. I remember vividly I was taught the US would run out of
oil and landfill space by the year 2000. I resent that part of my education,
or should I say indoctrination. Most of it was wrong and politically
motivated then, as it is now. We have a lot of oil in the World, problem
is it gets tougher and more expensive to get to. The Middle East oil
is cheap to get to – it costs just 29 cents a barrel in overhead
costs, whereas in the North Sea, it’s more like $18 a barrel
for the rig. The difference between those two numbers is pure profit
to the Arab leaders, which is why they are so rich. The laws of economics
still serve us, especially with such inelastic demand (as price goes
up, supply doesn’t decrease very much). As the price goes up,
more and more exploration and new oil will be found, for it is now
profitable to do so. Old fields will be “reclaimed” as
they squeeze out more. Also, over time, people adjust and find substitutes,
and change the way they live, at least to some extent.
For survivalists, the most simple forms of energy are clearly solar
and wind. You can get systems for a few thousand dollars which will
give you bare bones service for a RV level
of electronic existence. You learn in a hurry to cut the waste and
get to minimum usage, which
is good after all. If you can actually tap into a water source, there
are some nice small hydroelectric systems. Here in Wisconsin, wood
is of course the common choice for heating, and would power a steam
driven generator. Steam is expensive, messy, noisy, smelly, and a pain
to watch over IMHO. If you are going to do it, I would opt to have
a large system that powered a group of homes. One person can run a
big one as surely as a small one. Other sources to be aware of are
methane based – some farms use manure to generate power. I would
be wise to know where such installations are for later, and these are
million dollar operations that are a couple megawatts. A sterling engine
would nice, but they are too inefficient, and nobody seems to make
a good one the right size. Otherwise, its diesel (with additive) and
propane generators for more of us, I suspect, which are both good long
term storage fuels.- Rourke
Dear Jim:
It appears we are running out of oil, but how much of a crisis this
will be can be debated endlessly. No one can predict the bounds of
human ingenuity and future technological advances in power generation.
The market's adaptation to oil scarcity will mean higher oil prices,
and a huge incentive to conserve and get creative with alternatives.
The "Limits to Growth" crowd cried wolf once before in
the 1970s, and still has egg on their face.
So, if I had to guess I would bet that the market would handle the
transition to nuclear power, shale oil, solar, wind power etc., etc.
with possibly some belt tightening, but no catastrophic disruption.
Unfortunately we don't have a free market in general, and especially
not in building nuclear plants. The government's regulatory delays
to go nuclear, or implement other alternatives, may easily put us in
a severe crisis. Count on the government to make it worse, as seen
in the recent discussion of ethanol - squandering scarce resources
on a net energy loser.
One thing I am pretty sure of is that the secondary or ripple effects
of a perceived energy crisis will probably be more damaging than the
crisis itself. Case in point, the U.S. military is in Iraq and Afghanistan
at least partially because of the government's perception of a looming
energy crisis. Ripple effect - the hemorrhaging of our finances in
the Mideast tarpit will make the economic and financial crisis we have
coming even worse. The chewing up of our military equipment in the
desert sand, will change the global balance of power with unpredictable
effects.
If they subsidize gas prices the free market will not give the right
signals to conserve and find alternatives. If they slap price controls
on energy, as in the 1970s, then we will really see shortages and disruption.
Longer term and more ominous, the conflict between governments to control
scarce oil could easily start World War III.
Bottom line, we probably have a crisis in the works. Could the free
market handle it, if left alone? Most likely. Will the government turn
it into a real crisis? Definitely.
Regards, - OSOM "Out of Sight, Out of Mind"
