Entries Tagged as 'coal'

Choosing Our Energy Priorities

David Frum June 27th, 2011 at 9:28 am 20 Comments

Human Events offers a “Top 10″ list of reasons to think that President Obama favors expensive energy.

Here’s number eight:
8.  Stifles U.S. oil drilling, while subsidizing Brazil’s: The BP oil spill prompted the President to impose a drilling moratorium in the Gulf making deepwater drilling permits impossible to obtain.  So when oil companies moved their rigs to areas off the coast of Brazil where they were welcomed, Obama offered billions in US taxpayer money to aid the venture, creating new jobs in South America.  By refusing to allow U.S. energy sources to be developed, the President is ensuring increased reliance on expensive and volatile foreign oil.

I know this point about US oil vs. Brazilian oil has become a major right-of-center talking point.

But here’s the strange thing: if what you want is cheap oil, you want oil neither from Brazil nor from the Gulf of Mexico. The cheapest oil in the world comes from the Middle East: Saudi Arabia, Kuwait, and so on.

And as between Gulf of Mexico oil and Brazilian oil, Brazilian oil is the cheaper (but not cheap) alternative.

Human Events lambastes the Obama administration for delaying approval of a second pipeline to Canada’s oil sands. (That’s proof number nine.) But Canadian oil sands oil costs even more to produce than Brazil’s offshore oil.

The Human Events list nicely illustrates why US energy policy is such a mess. There are three different things we can want from energy policy, but we can achieve (at most) two at the same time.

We can have energy that is cheap: electricity from coal, oil from the Middle East. But cheap oil is not secure, and cheap electricity is not clean.

We can have energy that is secure: oil from North America and other politically reliable producers. But secure oil costs more than Middle Eastern oil.

Or we can energy that is clean: electricity from nuclear power or renewable sources; alternative sources of motor fuel. But those sources are not cheap. Electricity from solar sources costs between five and 10 times as much as coal-fired electricity.

So we have to make choices.

Choice-making begins with realistic understanding of the trade-offs. Green energy advocates want to conceal how very expensive their preferred policy will be. They talk about creating “green jobs” to distract attention from the impact of expensive energy on everybody else’s jobs.

But advocates of drilling in US coastal waters can be equally misleading, when they suggest we can lower prices by drilling more at home. The marginal cost of US oil greatly exceeds the marginal cost of Middle Eastern oil. We can enhance security by diversifying sources of supply, agreed. But there is only one world price, and that price is set in global markets in which the US will never again be the marginal supplier. Which means that the familiar formula “drill here, drill now” is not a formula to “pay less.”

It’s a good discipline for all of us to be explicit about rank-ordering our energy preferences. I’d say: security first, cleanliness second, cheapness third.

Which is why I favor intensifying US-Canada energy cooperation and shifting from coal-fired to nuclear-generated electricity. Carbon taxes would be a good mechanism to facilitate this shift.

Maybe you have a different rank ordering? Perhaps (as is implicitly the case for Human Events), cheapness first, security second, cleanliness third?

OK then. You’ll want to maximize imports of Middle Eastern oil, ignore nuclear power, and forget about the Gulf of Mexico.

Whatever your rank ordering, unless you think clearly about what you wish to achieve, you are very unlikely to achieve it.

Some Truths More Inconvenient than Others?

David Frum September 29th, 2009 at 11:17 am 67 Comments

Here is Paul Krugman this past weekend:

In a rational world, then, the looming climate disaster would be our dominant political and policy concern. But it manifestly isn’t. Why not?

Part of the answer is that it’s hard to keep peoples’ attention focused. Weather fluctuates — New Yorkers may recall the heat wave that pushed the thermometer above 90 in April — and even at a global level, this is enough to cause substantial year-to-year wobbles in average temperature. As a result, any year with record heat is normally followed by a number of cooler years: According to Britain’s Met Office, 1998 was the hottest year so far, although NASA — which arguably has better data — says it was 2005. And it’s all too easy to reach the false conclusion that the danger is past.

But the larger reason we’re ignoring climate change is that Al Gore was right: This truth is just too inconvenient. Responding to climate change with the vigor that the threat deserves would not, contrary to legend, be devastating for the economy as a whole. But it would shuffle the economic deck, hurting some powerful vested interests even as it created new economic opportunities. And the industries of the past have armies of lobbyists in place right now; the industries of the future don’t.

Nor is it just a matter of vested interests. It’s also a matter of vested ideas. For three decades the dominant political ideology in America has extolled private enterprise and denigrated government, but climate change is a problem that can only be addressed through government action. And rather than concede the limits of their philosophy, many on the right have chosen to deny that the problem exists.

Let’s test whose ideas are vested here. It ought to be unignorably obvious that the only near-term way to generate sufficient electricity while reducing the use of coal is nuclear power.

And yet… Krugman does ignore that particular inconvenient truth in this column and in so many others. In a 2006 exchange with readers, the Times columnist did have this to say:

William R. Mosby, Salt Lake City: Does nuclear energy have a part to play in mitigating global warming in the long term? Assuming it produces sufficient net energy and that fuel recycling/waste partitioning is used, nuclear energy could be one part of a non-CO2-emitting energy mix that would be sustainable for as long as a few thousand years, using the depleted uranium already in storage in the U.S. A great deal of research has already been done on the type of reactor and fuel recycling facility required to do this — the Integral Fast Reactor — but was canceled for political reasons in 1994.

However, those who see an urgent need to do something about global warming generally don’t talk about nuclear energy as a prominent part of the solution. Do they think that nuclear energy would be a bigger problem than global warming?

Paul Krugman: I was at a reception for Al Gore after a screening of his movie, and he was asked that very question. I thought his answer was very good. He said that yes, nuclear should be part of the mix, but it can’t be the main answer. And there are problems with nuclear we need to resolve: not just disposal of radioactive waste, but vulnerability to terrorist attack. In fact, as nuclear power becomes more common around the world, the possible misuse for weapons, terrorist or otherwise, will be a big problem. So unless there are some breakthroughs, nuclear power is only a piece, and maybe not a big one, of the solution.

But why can’t nuclear be the main answer? After all – there isn’t any other answer! Conservation can be incentivized through higher prices, yes. Solar and wind can contribute in some specialized niches. But remember, half of America’s electricity is generated by burning coal.  Only nuclear power is sufficiently cheap and scalable to replace so massive a power source. If your version of environmentalism cannot accept that truth, please kindly refrain from lecturing others about the blinding effects of ideology!