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Energy policy: U.S. needs to show world the way
Matt Simmons, Houston Chronicle
If I were preparing a briefing for the president-elect on urgent energy actions needed in the administration’s first 30 days, it would read as follows:
• Be prepared for peak oil and gas. While the data is still imperfect, there is a high risk that global use of oil and gas is now at or beyond a sustainable level. While demand for both key fossil fuels still rages ahead, new supplies are struggling to grow fast enough to offset rising production declines from old (and very old) oil and gas basins.
For two decades, the number of exploration discoveries has declined and the size of the average new discovery also shrank. For the sake of the global economy, the United States needs to assume the leading role in guiding the world’s key oil consuming nations to a rapid change in the intensity of how we now use oil and gas.
It is impossible to predict any precise timing of when peak supply will be reached, nor the duration this peak output will stay at an “undulating plateau” before then going into what could be a steep decline. Hence, the world’s leaders need to assume we have no more than three to five years to make a transition to a post-peak oil and gas world.
A global energy summit needs to be convened by the end of the first month of the new presidency. At this summit, mandates must be instituted for how key stakeholders will begin reducing their use of oil and gas in ways that make a significant impact on this pending crisis.
• Revamping our electricity grid. …
• Fighting rust: How we rebuild our energy infrastructure. …
• Transforming a graying energy work force into a younger work force. …
• Leave no ‘supply source’ stone unturned. …
Modern energy (oil, natural gas and electricity) was the basis for creating the 20th century. But in the 21st century, we will have to learn how to live without consuming vast amounts of fossil fuels. The time to wake from these illusions is now. How these challenges are tackled will define the success or failure of this presidency.
Simmons heads Simmons & Company International, which has provided investment banking services to the energy industry since 1974.
(23 February 2008)
10 things the nation must do to avert an energy crunch (and protect the planet)
Editorial, Houston Chronicle
THE price of crude oil has topped $100 a barrel and could go higher. Rising demand for oil in India and China, combined with global bottlenecks in production and refining, could cause an energy crunch with the potential to disrupt economies and place public safety at risk.
At the same time, the burning of carbon-rich fossil fuels is creating greenhouse gases and causing temperatures and sea levels to rise. The United States is the world’s largest energy consumer and producer of greenhouse gases and must lead the way in the search for alternative sources of energy.
The following is a list of 10 steps the United States must take in order to avert an energy shortage and protect the environment.
1. Most of the oil consumed in the United States is for transportation. Congress recently raised fleet mileage (CAFE) standards to 35 miles per gallon. The mileage standard must continue to rise as swiftly as new technologies and concern for passenger safety allow.
2. Scholars and industry executives now agree that demand for oil will exceed supply in the next few years. U.S. energy needs demand that government and industry engage in a program to develop alternative energy sources – wind, solar and hydrogen, to name a few – that would rival the scale and national commitment of Project Apollo’s missions to the moon. Houston remains the world capital of energy technology and, as with the space program, is primed to play a major role in producing tomorrow’s energy.
3. The lead time for developing new energy sources will leave the United States dependent on the oil and gas industry for years, probably decades, to come. Industry should not be hobbled by a windfall profits tax that would only discourage exploration and production, limit supply and drive up consumer prices. Also, industry needs greater access to domestic oil reserves in the Arctic and off the East and West coasts. There is no reason why the western Gulf of Mexico and its adjoining states should solely bear the burden of supplying the nation with oil and gas pumped from beneath the sea.
(24 February 2008)
The Houston Chronicle has a bumper crop of articles on the energy crisis. A story with a local angle is: Boom and bust may be a relic of city’s past.
Energy policy: Drop ideas of independence
Jacqueline Lang Weaver, Houston Chronicle
The search for solutions to our energy challenges leads to one inescapable conclusion: There are no easy answers.
Regardless of who sits in the Oval Office next January, the reality is that world oil prices will never return to the “good old days” of the 1990s.
Domestic oil production reduces reliance on foreign sources, but our oil production peaked decades ago. Competing studies and conflicting expert opinions differ about the precise date of “global reckoning” – the year when conventional world petroleum supplies peak – but no one denies that day is approaching. Rather than worrying about whether “peak oil” will arrive in 2012 or 2032 (either way, it’s right around the corner for our children and grandchildren), our next president should focus the incoming administration on some basic energy realities.
He or she should start with dropping “energy independence” from the lexicon of the Oval Office. The United States consumes a quarter of the world’s petroleum, and it is unrealistic and misleading to suggest that we can sustain our consumption from domestic production alone.
…Energy diplomacy in an age of energy internationalization is the new game in town – and success will hinge on the skill of the people who play it.
The new team we install in Washington should understand that unilateral decision-making must end if the United States is to hold any hope of answering its energy needs in world markets.
Weaver is the A.A. White Professor of Law at the University of Houston Law Center.
(23 February 2008)
Interesting set of arguments – mostly similar to those made by the oil companies. They are sure to raise the hackles of environmentalists. No mention of the most cost-effective responses: efficiency and conservation. This is a jaw-dropping omission.
Sadly, Professor Weaver commits the logical fallacy of seeing “energy independence” as an all-or-nothing proposition. There are many good reasons for reducing the U.S. dependence on foreign oil, even if the withdrawal is never complete. -BA
