KeystoneXL and New Energy Strategies in an Era of Abundance

10 thoughts on “KeystoneXL and New Energy Strategies in an Era of Abundance”

1. The new rural congress members – do they come from states with established biofuels processing plants? I looked at the map in your UCS link, and the most potential biomass resources do seem to come from southern plains, southern California, (like Darrell Issa's district), and along the Mississippi river.

   In other words, your basic red states. What is your sense of how visionary they are, how addicted to O&G production vs. biomass into conversion into biofuels?  I didn't see a map of production and biomass conversion facilities.

   I have great faith in the power of the pocketbook, and the Way of the Wallet. Are any of these conservative politicians, who live among such potential, seeing the dollar signs, or do they dismiss biofuels as treehugger nonsense?

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   1. I didn't have time to catalog the 100+ ethanol plants and correlate those to Senators, but in the top 10 ethanol states (IA, NE, IL, MN, IN, SD, OH, WI, KS, ND) Republican Senators outweigh Dems 13:7; if you add the next five in order of production (TX, MO, MI, TN CA) the Republican advantage moves to 18:12.  I also didn't have time to compare the Senate map to the biomass study, but the bulk of the biomass falls in the southeast, which would only exasperate the R:D advantage. 

      To your point, this is an issue the R's should be focused on if they really had an interest in energy security, job creation and turning the tables on OPEC with a fuel source that doesn't need a $100 crude oil market to be viable.  Of course, all of that is tongue-in-cheek; in the last election cycle, 4 out of 5 oil industry dollars went to Republican campaigns.  Today, House members that voted in favor of the Keystone received, on the average, eight times more oil lobby dollars than those who opposed it.

      Issa makes more money on his wealth every single day than his entire, annual Congressional salary – I doubt he cares much about anything but himself and his political ascension (particularly now that Boxer has made her retirement announcement).

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2. Just trying to get a sense of the dimensions of the problem, Michael. I know you're a busy guy. I'm capable of researching problems that interest me – haven't really delved into biofuels use yet.

   I still think economics, not ideology or concern for the planet or future generations, is going to tilt the balance of energy investment towards renewables. That's what's happening with the Keystone pipeline, which would seem to be a non-starter now. We need to be making those economic arguments with Republican elected officials, because we know that they're not going to listen to anything that sounds too "green", unless it's dollar green.

   Even if they are all taking oil money up the wazoo, some of them must listen to other lobbyists as well.

    

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   1. Didn't mean to come across as snarky…  I've been in a plane a good share of the day on flight that didn't have internet (First World problems!)  Winning these arguments on economics would be a no-brainer – if indeed we were on a level playing field.  Natural gas externalize it's costs (decrease in crop production, air, water quality and health); the coal industry gets to pretend they're cheap, even though we know, a result of a recent Harvard study, the external costs to society amount to over 16 cents/kilowatt hour.  Aromatics in gasoline (benzen, toulene and xylene), which could be displaces by advanced biofuels, is causing billions in health costs annually.  (keep in mind, EPA has had the authority for years to get BTX out of the supply). 

      Beyond the externalized costs these free-market patriots socialize, market access adds yet another layer of complexity.  For instance, Shell Oil has reserves that account for only a portion of their sales. So for them, given they make their profits on distribution and not extracting their reserves, they are more aggressive in supporting renewables.  The other side of this coin is Exxon, whose reserves account for 100% of their retail sales.  Every barrel of boifuels forced in to their system is a barrel of their own reserves that can't be developed.

      Remember, the initial 10% mandate was a grand bargain in Congress to get MTBE out of our fuel supply (a known carcinogen that had poisoned several water supplies).  The oil companies agreed to replace the MTBE with ethanol – and Congress gave them immunity on the MTBE leaks. Additionally, the oil companies got a significant 'blenders credit' to blend the ethanol in to their gasoline supply (apparently that must be a very difficult process….)  That credit amounted to billions of dollars for the oil and gas industry. 

      The industry knows that, based on several studies, that E-22 is the optimum blend for blended gasoline.  The industry has also shown that it's committed to making sure not a single new drop of ethanol gets in to the national supply.  So, not to sound like a broken record – but this has nothing to do with economics as viewed through a life-cycle analysis – and everything to do with maintaining their monopoly power in the marketplace.  They are the masters at privatizing their profits and socializing their costs.

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      1. PS: Speaking of having no wi-fi on my flights today…

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      2. No worries. People have to be much snarkier than that to offend me – you're a piker compared to the average seventh grade kid. I'm just trying to get better informed, and trying to think strategically. Safe travels.

          

          

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         1. There are four more things that have a direct effect on biofuels/renewable energy that you can add to the list in the event you get an itch to research this area:  1) Congress should pass the Master Limited Partnership Parity Act.  It is a provision in the tax code, written by oil and gas lobbyists, that only allows oil and gas to use this very efficient investment vehicle for projects.  2) Give us an Open Fuel Standard.  (bodes well for 'consumer choice'  3) mandate blender pumps at all retail locations.  The industry has been busy discouraging or refusing retail locations to implement these consumer-friendly pumps.   4) put a revenue-neutral carbon tax in place.  Tax them on 'what they burn, not what they earn'.  There are a number of good proposals out there for consideration. 

            Good information for the next time Thingy1 and 2 pretend they really do like green energy – they just don't want the government 'picking winners and losers'.  What a joke. The American consumer has made it clear that, when given the option to choose domestic, clean energy, they'll do it every time. A decade ago they did it because it was the right thing to do.  Today, they'll do it because it's the right thing to do. 

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            1. I need visual aids.

               I think I'm going to have to make a chart to tie all the dynamics together. I do want to understand it, before I attempt to talk or write about it, and I definitely do want to be able to drive a car in 20 years. I'll have to take your word on it that monopolistic interests are the main obstacle to a level playing field with biofuels.

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               1. The monopolistic interests are represented by the American Petroleum Institute; they occasionally get the Grocery Manufacturers Association (GMA) to carry their water for them on a PR front. 

                  Google these keywords in any combination and you'll find enough links to keep you busy for a very long time: 

                  american petroleum institute epa biofuels mandate E-15 aromatics

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3. A great piece by Rocky Mountain Institute's Amory Lovins:

   The Troubled Oil Business

   Like whale oil in the 1850s, oil is becoming uncompetitive even at low prices before it becomes unavailable even at high prices. U.S. gasoline (and electricity) demand has been falling since 2007 as more people drive thriftier vehicles fewer miles; the same is true in rich countries as a whole. Now major developing countries like China are shifting their energy strategy so quickly toward efficiency and renewables that global “peak oil” — in demand, not supply — could occur in this decade, not many decades in the future as the industry assumes.

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