Jim Kingsdale has a post up that includes a longish piece by the financial deity Peter Lynch on the cost of energy. Please go read the whole thing, but let me present just a few snippets to entice you to do so:

In my opinion, “Energy” is the number one problem facing the U.S and the world as we move forward into the 21st century. In fact, I think that it may be the greatest problem that mankind has ever faced. All the other “problems” we hear about on the evening news – health care, social security, housing crisis, credit crunch etc. are ALL “small change” compared to the looming worldwide energy crisis. The problem facing us is so large that I am really beginning to believe that people, as well as, governments are simply in mass denial and refuse to believe the magnitude of the approaching problem. Keep in mind that reasonably priced, available energy is what gave birth to our mighty industrial revolution and is what separates the U.S. and the rest of the developed world from becoming third world countries.

This is a problem that CANNOT be ignored and must be addressed rapidly, with a detailed long term plan that MUST be based upon a comprehensive accurate evaluation and assessment. There is still time to move forward, but time is running out and we have to stop with the politics as usual and start to focus on what we ALL need to do for the common good.

What is the price you pay to purchase a gallon of gasoline for your car? Depending on what part of the country you live in, it is probably between $4.00 and $4.50 per gallon.

But what is the “real cost” of that gasoline? Does it count ALL of the direct AND indirect costs to the consumer, society and the nation of our continued and insane dependence on fossil fuels?

I think not.

Everyone knows the posted price, but very few realize or stop to think about the true costs. There are a number of “hidden” costs that most of us do not realize. It may not be obvious but we are quietly paying these additional costs every day. These additional indirect costs actually make the “real” cost of the gasoline and all other fossil fuel related items many times higher than it seems at first glance.

Unfortunately our government does not utilize all of the necessary cost components in order to arrive at an accurate “true cost” number. As a result, they are using a faulty equation, which, of course, will result, EVERY SINGLE TIME, in an incorrect answer and subsequently a fault ridden policy that is based upon error after error.

Some of these costs and associated penalties:

• Health Related Costs
• Air Pollution
• Water and Land Pollution
• Thermal Pollution
• Macro Economic Costs
• National Security
• Global Warming

[Lynch then addresses each item in the above list.]

We can lower our healthcare costs, reduce our air, water and thermal pollution, develop a more stable economy, create an enormous number of U.S. based jobs and become a far more secure nation if we just begin this inevitable process of evolution toward renewable energy sources - solar, wind, biomass, ocean power, energy efficiency and conservation.

We need to educate the American people about the real truth of the current situation and then apply, what has always been America’s greatest “assets” - technical ingenuity, creative innovation and our “can do” attitude.

Now you can see what the “real costs” of our addiction to fossil fuels are. We need to be preemptive and undertake this NOW, before we find ourselves in the midst of a worst-case scenario.

Please go read it all.

I’ve argued perhaps a billion or so times on this site that we need a wide range of actions to deal with our looming energy and environmental issues. We can’t rely on just a grass roots movement or just government action or just leave it all to “the free market”. We need them all, which means we have to be smart about how we combine their costs and benefits; we’re quickly running out of time for stupid or half-hearted measures.

Part of our action has to be expressing our collective will through elected officials, i.e. government action. The nastiest reality of all is that while some people will do what’s right on energy and environmental issues simply because they know it’s the right thing or they get satisfaction because doing it proves their moral superiority, not nearly enough people will act that way. For every member of the Sierra Club or Greenpeace (or regular reader of this site, frankly), there are many more Americans who want nothing more than the cheapest out-of-pocket expense for energy possible, and they reject everything else as a plot by the New World Order or environuts or (gasp!) Al Gore to take over their lives.[1]

Therefore, we need voters and consumers to educate and activate themselves, and force politicians seeking their support as well as corporations seeking their money, to adopt a longer planning horizon and a more enlightened approach and do the right thing.[2]

We also need people to make the myriad of changes I’ve been screaming about on this site for years, like using compact fluorescent bulbs, driving fewer miles, hunting down and killing electricity vampires[3], improving the insulation of their homes, using as little space heating or cooling as possible, etc.

And above all, Lynch is right: We need to do those things now.

(Lest anyone miss the enormous, neon sign hanging over this discussion, let me point to it explicitly: About four years ago when I started this web site and project, I chose the name “The Cost of Energy” precisely because I wanted people to adopt a more expansive and encompassing mindset and consider all the costs of our energy use, not just the immediate and obvious ones measured in cash flow.)

[1] And for the life of me, I have never figured out why the people who say such inane things believe for a moment that other people would want control of their lives. That’s a stupefyingly weird alloy of paranoia and egomania.

[2] For those of you who just laughed at the planning horizon and enlightened approach stuff, answer me this: How much better off would Ford, GM, and Chrysler be today if they challenged Toyota and Honda in developing hybrid vehicles in the 1990’s instead of dismissing it? For that matter, how much healthier would they be, and how many fewer people would they be laying off directly and indirectly, if they had simply put more emphasis on smaller, more efficient vehicles instead of binging on trucks for years, like an unsupervised kid in a candy store? It’s easy to be smug and make fun of calls for the kind of change in corporate boardrooms that I think we need, at least until corporations are greedy and willfully ignorant and then reality bites them on the ass. Then everyone starts wailing about “could GM really declare bankruptcy???” instead of treating this as a huge and very painful object lesson in how companies should be run.

[3] These are all those little things around your home that suck a little (or a lot of) electricity all the time, even when they’re not being used. Do you really need to have your cable modem and router turned on all the time? Do you need to leave your PC on 24/7, even though Windows doesn’t boot so much as it gestates? Walk through your house and do a quick inventory of what’s plugged in, and how often you really use it, and I’m willing to bet you’ll find a good $5 of monthly electricity you can painlessly eliminate. And if that’s too much trouble, then please send me that $5/month (PayPal to lougrinzo [at sign] rochester.rr.com), as I need it to keep this project afloat.

OK, not really. I’m not going to show you some financing trick or scam or miracle piece of engineering so you can buy or build a hybrid car at no cost. But I will show you how you can effectively get hybrid-like mileage out of your non-hybrid (and even boost the MPG of your shiny new hybrid), with no out of pocket expense, no modification to your car, and you can start the very next time you get behind the steering wheel.

The trick, of course, is hypermiling, the driving technique I’ve mentioned here numerous times in connection with my Scion xA, which gets over 40MPG, at least when I’m driving it. [Glances off-screen with raised eyebrows in the direction of Mrs. Lou.]

In short, hypermiling is changing your driving technique to get to your destination while consuming less fuel. You do this by keeping your car in top shape, accelerating less aggressively, sticking to the speed limit (what a concept!), coasting up to stops (when you can do so without interfering with or annoying other drivers), not idling, and generally being on the lookout for opportunities in your route and surrounding traffic patterns to avoid stops.

I most definitely don’t recommend the more extreme hypermiling techniques, like drafting behind trucks. There are things even I won’t do or recommend to others in the interest of higher MPG.

For more detail, see Wired’s hypermiling guide, and Wired’s feature article on hypermiling.

The average American driver, who drives with all the subtlety of King Kong carrying a blond up a skyscraper, can easily save 20 to 30% on their fuel bill, nearly the same savings usually attributed to switching from a non-hybrid to an equivalent hybrid.

“But, but, but… this isn’t fun!” I can imagine people shouting at their screens.

My fellow Americans: You know what it’s like paying for your current gasoline use at $4/gallon, and I bet you’re not enjoying it much. If you’ve never tried hypermiling, then I’m willing to bet that if you give it a good faith try–three or four days–you’ll find that it’s nowhere as onerous as it sounds and is way more fun than paying for all that extra gasoline. You might even (gasp!) come to like the challenge, as I do. And trust me, this is the opinion of a real speed freak. In years gone by I lived for fast cars and fast motorcycles, and 0-60 times and horsepower ratings were my first measures of almost anything on wheels. If I made this transition I’m sure you dear readers can do it, too.

In case it’s not obvious, let me spell out why doing this is a good idea:

• Even if you’ve already taken some of the steps we hear about all the time in the news, like using more public transportation and combining or eliminating errands, hypermiling is still a good idea, as it applies to every mile you do drive, regardless of the vehicle.
• Because hypermiling requires you to pay more attention to traffic signals and other vehicles, it makes you a safer driver. You’re actually focused on your driving and not your iPod or your iPhone or any other distraction in your iMe world. (My favorite bumper sticker seen recently: A cell phone with the red circle-and-slash symbol over it next to the text “HANG UP AND DRIVE”.)
• Less gasoline used = less gasoline bought = more money in your pocket. (Duh.)
• Less gasoline used = less gasoline burned = less CO2 emitted. Each gallon not burned prevents another 20 pounds of CO2 from going into the atmosphere where we’ll have to live with it for a very long time.
• Less gasoline used = less oil consumed = lower US trade deficit, less reliance on other countries for a critical resource, more oil left in the ground for the post-peak period when we’ll really need it. (The US consumes about 9 million barrels of gasoline every day. You can do your own projection of what the fuel savings would be if a significant portion of US drivers started hypermiling. Think the price of oil and gasoline would drop then?)
• Smarter, gentler driving means less wear on your car, particularly the brakes, which means lower repair bills over time.

I know what will happen, though. Virtually every one of you reading this will ignore my advice, keep driving like you’re coming down the main straightaway at the Indy 500 on the final lap. That means you’ll keep using more gasoline, emitting more CO2, and throwing away more money than is necessary, all because you think it’s too hard or not fun enough or whatever excuse you care to trot out.

So here’s my challenge: I dare you to prove me wrong and adopt these techniques. Show the cynics like me that American drivers are smarter than a sack of rocks, and that we can take steps that help ourselves and others, both now and in the future. Help turn hypermiling into the Next Big Thing, starting today, through your own driving and telling others about it. If you don’t I guarantee that when gasoline hits $5 or $6 or more in just a few years you’ll be hypermiling. Unless, of course, you have the right combination of money and luck to buy one of the very scarce (and very much in demand) EV’s or plug-in hybrids that will come on the market beginning in 2010.

You would be hard pressed to find a better example of why “timing is everything” in our quickly evolving energy markets than the Airline Armageddon that continues to unfold before our eyes. First, a quick overview of the situation with a focus on hedging of fuel prices by airlines (emphasis added):

Hedging Against $200 Oil:

Rising jet fuel prices—one of the industry’s biggest costs—have helped send seven airlines into bankruptcy this year, and more could follow. One exception to the sea of red ink so far is Southwest Airlines (LUV), which has saved billions since 2000 by successfully hedging against increases in oil prices. But with each rise in oil prices, that strategy gets more and more expensive.

…

A hedge is a financial instrument that allows investors to lock in certain prices to act as insurance against the possibility that the open-market, or spot, price of that commodity will rise. If the price then rises, the company gets a financial payoff that cushions the blow of higher prices. In this way, investors can actually make money using hedging as insurance, giving them an advantage over competitors in the marketplace.

Southwest is currently the only major airline with most of its fuel costs hedged at lower prices, largely because it is the only large carrier with the cash flow to do so. For 2008, 70% of its fuel needs are hedged at $51 a barrel. That means that while competitors have to contend with spot prices hovering around $120 a barrel, Southwest can buy oil at less than half that. Access to this discounted price means Southwest feels less pressure to pass on higher costs to customers, which could afford it more market share as competitors hike ticket prices.

…

Even an expert like Topping, who spends his days consulting with oil experts and poring over analyst reports, says he doesn’t know for certain where oil prices are headed. But for now, indications point upward, which justifies more hedging. “There doesn’t seem to be hope for a big price drop unless an unexpected dramatic event took a big chunk out of demand,” says Topping. While high prices are beginning to slow demand for oil in Western countries, developing nations like China and India have an ever-growing thirst for oil. Consider that the U.S. currently has 800 vehicles per 1,000 people, vs. fewer than 30 in China and India. As those countries’ economies ramp up—and as hundreds of millions of people seek their first cars—energy demand will also rise.

…

Indeed, many airline executives shy away from the risks involved. “I think airlines have been reluctant to hedge because corporate culture views futures as a gambling tool,” says Stephen Schork, an energy consultant in Villanova, Pa., and editor of The Schork Report, a daily energy newsletter. “But they’ve been reluctant to their own detriment. If you’re an airline without a significant hedge, you’re in a difficult spot.”

All this stuff about hedging vs. not hedging won’t matter if oil prices stay essentially where they are for years. (And just to be clear, I would consider a price retreat to, say, $100/barrel later this year before a big run up to $150 or $175 in 2009 to fall into the category of “essentially where they are”.) Eventually enough of the right people will figure out that oil isn’t going to be cheap anytime soon, and the practice of hedging will all but disappear, whether airlines consider it “gambling” or not.

Consider, by contrast, the car business. A gradual rise in gasoline prices will push people to more efficiently use oil for transportation–higher MPG cars, driving fewer miles, driving smarter, etc. The increased demand for more efficient cars pushes car companies to develop and make them, and the adoption of them and the other oil saving measures lowers the overall consumption of oil and moderates the price. Or so says conventional economic theory. If the price rise is much quicker, then we have what we’re seeing today, with a rapid shift to more efficient vehicles and the sales and prices of new and used light trucks plummeting. But even in that scenario, which we’re living through as I type this, there’s still a huge amount of low-hanging fruit for us to pick. Picking said conservation goodies isn’t always cheap or fun, but they undeniably exist, and exploiting them softens the blow of the oil price increase.

As the pressure from rising gasoline costs grows, so will the market response, in terms of the mainstream marketing of electric vehicles and plug-in hybrids, as in the plethora of such cars all set for the 2010/2011 time frame. This is the ultimate response to a high price, the wholesale demand destruction through a mix of adopting alternatives and abandoning the consumption completely.

Back to airlines. They can’t dramatically increase the fuel efficiency of their planes (equivalent to trading in a 20 MPG SUV for a 35 MPG sedan), or they would have done it years ago. So they’ve been forced to fly fewer and smaller planes in an effort to maximize seat utilization–as they say in the movie business, it’s all about putting butts in seats. They can also resort to using hypermiling techniques–flying slower, taxiing with only one engine, carrying as little excess weight as possible–but that results in a pretty small savings on a percentage basis.

Their only hope in the short run is to raise ticket prices or impose other fees and hope that not too many customers switch to train travel or skip flying altogether. Unlike cars, there really is no chance for an orderly (which is to say pleasant) transition while “the markets sort themselves out”, as economists put it, aside from the arrival of large scale alternative ways to fuel jets (lots of luck with that one) or a huge drop in world oil prices (likewise).

The bottom line: Airlines have less and less room to stand in the market, thanks to the growing use of oil for non-air-travel purposes around the world. There’s nothing to suggest that that situation will change anytime soon.

Recent posts with related articles on the discussion board (all open in a new window):

• Squeezed airlines clip wings
• How do you solve a problem like jet fuel?
• Airlines discover hypermiling
• BA left on the runway

Frequent correspondent EP sent along some real-world data regarding the power supplies in computers.

I’m posting it here in its entirety to stress the importance of “little” energy savings. Many people are focused on really huge, obvious savings, like increasing the US CAFE standards to something that will have an effect (the new ones are a bad joke), but the small changes can add up to a major benefit. Saving 10 or 20 watts on a PC power supply becomes very important when you have [1] many millions of them running, and [2] they’re running for hours every day, and in many cases 24/7. We have a pretty sizable amount of potential savings right there for the picking, as soon as we get serious about pursuing it.

(Speaking as someone who’s done far more than my share of Windows re-installs and upgrades, for myself and friends and consulting clients going all the way back to version 1.0, I wonder how many kWh of electricity could be saved every year if Windows booted in a reasonable amount of time and didn’t give people such a huge incentive to leave computers running around the clock. But I digress.)

Anyway, on to EP’s missive:

90% efficiency should be possible. Part of reaching that would be to stop chasing insanely powerful power supplies. My P4’s and AMD desktops and servers are between 40W and 160W power draw.

First some interesting sites. This one assumes a lot such as a 40W to 60W power draw with estimated savings of only 5W or so. In reality - my tests show 25% savings - even at low power levels like 60W. But these power supplies shine on a server or high end machine sucking back >100W - giving a payback of 2 years or less (asuming $0.10/kWh, computer on 24×7).

http://www.silentpcreview.com/article684-page5.html

The EarthWatts PS seems to have been released around OCT 2007 and I’d not heard of it - and I’ve been asking my suppliers for just such a power supply. Antec server cases I bought just 8 months ago had the older, much less efficient power supplies.

A web site with info about the 80Plus certifcation - this is just a PDF on it which Google found.

http://www.80plus.org/manu/psu/documents/CORSAIR-CMPSU-550VX-550W-Report.pdf

Ok - the numbers as I measured them.

Basically most computer switching power supplies are only about 65% efficient. I’ve seen exceptions - IBM Evo, Compaq micro case which were signif. more efficient (65W for the Evo and Compaq P4’s vs 100W for a P4 with a generic power supply).

The Antec I tested is PS-AN-EA380, $53 Cdn each (compared to about $30 for a run of the mill 300W power supply).

By “regular power supply” I mean older and non Earthwatt Antec, AOpen, SPI, DTK or other generic power supply.

Test case - P3 computer system
------------------------------

                Standby Draw   In BIOS   In Win XP

AOpen FSP250        4W            52W       52W

Antec Earthwatt     4W            36W       36W

Test case - AMD 2.4GHz Athlon 64 system with Cool 'n' Quiet 

enabled (double the power rating if Cool 'n' Quiet is not 

enabled and double it, nearly, again if it's not enabled on a 

dual core CPU)

-------------------------------------------------------------------

                Standby Draw   In BIOS   In Win XP

AOpen FSP300        7W            84W       59W

Antec Earthwatt     5W            64W       43W

I’m not impressed by the standby power draw. I was hoping that it would meet the 1W or less spec. But there is an aprox 25% improvement in efficiency of conversion from AC to DC. Part of this issue is, I believe, the actual amount of power drawn by the motherboard when it’s in standby.

For new servers I have - 153W in Linux for Core 2 Duo’s - the power draw would be reduced to 115W. Savings would be about $40/year in electricity alone. Other benefits include less load on the UPS, better uptime with the UPS, less heat generated (basically 25% less since server rooms don’t have monitors).

I’ve emailed to complain to SPI and AOpen about their horrible power supply efficiency. I’d heartily suggest that you all do that too. This is one of the easiest ways to cut costs, deal with heating and beat a path to a slightly greener future. Only Antec provided a phone line to complain to - SPI and AOpen only provided an email forum on their sites.

Sometimes, you see things online that explain why the peak oil and global warming deniers and delayers find it so easy to fight us.

Case in point, It’s Earth Day: “Go *!$# Yourself” (emphasis added):

Like personal carbon-offsets, a consumer’s purchase of “green” products is doing nothing to halt the accumulation of green-house gasses in the atmosphere, and arguably, many consumers in this country and other developed nations, with their preference for such things as fresh, if organic, vegetables in the winter and bigger, if “greener” houses, are inadvertently adding to the problem with their well-meaning purchasing.

…

Instead, if anything is to go viral starting today, I would suggest that it be to get really, really pissed. If we as a species are ever to address before it is too late our climatic self-destruction, we are going to have to get very angry at the short-sightedness of everyone from the suburban housewife who drives an over-size vehicle that gets 5 miles to the gallon because she can, to political leaders who blithely predict that technology will solve our problems at some point in some vague way. The only way for us to reduce significantly our continued over-consumption of fossil fuels is for them to become either actually or artificially (through taxation) so expensive that we are willing to assess risks, like women in a refugee camp, in a wholly different way. It will have to become scary to continue in our current state and that fear will have to translate into global, political action – where leaders will be just as concerned with telling their people that they are robbing the earth of cheap energy as they are of increasing food prices. So here’s something that you as an individual can do for a day: decide to become scary yourself.

For a day, even if for a day only because like most of you I don’t think continual anger is psychologically “sustainable,” get good and cranky when confronted with any reminder that this is Earth Day. Expletives could escape your mouths. Perhaps commit a mild act an act of vandalism or two. Be civilly disobedient or not, but register your anger and not your complacency. Be like Moses when the Israelites were worshipping their Baals after he brought them out of Egypt. Because green happy-talk just ain’t cutting it.

Excuse me? Purchasing greener products “is doing nothing to halt the accumulation of green-house gasses [sic] in the atmosphere”? Really? And the evidence to support that sweeping claim is… what, exactly?

When I was car shopping in 2006, I easily could have bought some monstrosity like a full-size SUV that gets 15 MPG and then driven it like the lead-footed morons I see on the roads every day. Instead I bought my oft-mentioned Scion xA, which, with a little help from hypermiling techniques, consistently delivers 40 MPG. That reduction in gasoline consumed and CO2 emissions of over 62% didn’t contribute to halting greenhouse gas accumulations?

And my use of CFL bulbs in every socket in the house, plus my greatly reduced use of air conditioning in the summer and heating in the winter (partially via zone cooling and heating)? No progress there? What about the fact that my wife and I pay more for our electricity to get 100% green electrons–all pushed down the wire to our home from wind farms and small hydroelectric facilities? I suppose all those steps somehow fail to reduce CO2 emissions, as well.

The author mentions organic vegetables out of season and larger, greener homes. Where is the evidence that such produce bought out of season are any worse for the environment than non-organics bought at the same time? I didn’t know before I read this posting that they were, and I still don’t know that–there was no proof offered, just a flat assertion. And how can anyone make sweeping generalizations about the environmental impact of larger but more efficient homes? Compared to what? A smaller home of the same efficiency? A home of the same size that’s not as efficient? Pick your assumptions and you get the answer you want. But without data to back it up, it’s just hot air and the kind of posturing that our shared enemies in this political fight love to use against us.

Five MPG SUV’s? Really? I yield ground to no one in my dislike of the use of unnecessarily oversize vehicles, but there’s no way I would make that ridiculous claim.

As for the contention that we should “get good and cranky when confronted with any reminder that this is Earth Day. Expletives could escape your mouths. Perhaps commit a mild act an act of vandalism or two,” I almost don’t know where to begin. Get upset with the deniers and the delayers? Damn right. I do that almost every day, and I desperately wish that more people would pay some bloody attention and get worked up to the point of uttering a few choice expletives. But “perhaps” resort to vandalism? Someone please tell me this is a very, very bad joke. That would be about the most counter-productive thing anyone who cares about energy and environmental issues could do. And oh, by the way, it’s not just dumb, it’s illegal.

The worst part of this post is the false dichotomy–we either get mad and force change or we engage in “green happy-talk”. What a Lutzian crock. What those of us on the right side of this issue must do is find as many ways as possible to reach out to others and educate them. You can’t elevate someone’s awareness regarding such large and genuinely scary issues from “blissful ignorance” to “educated, activated consumer and voter” (the mission of this site since day one, I might add) in one gigantic step. You have to build ramps and find ways to coax them along. For the frustrated and impatient true believers (and those of you who read this site know how often I fall into that category), it can be agony explaining to newcomers over and over again sunspots don’t cause global warming and the price of oil isn’t rising because “the oil companies are screwing us”.

We have to find ways to internalize that razor-edged emotional response and turn it into positive energy so we can continue fighting the good fight. We write, we give public presentations to environmental groups and schools, we proselytize until our friends avoid us at social gatherings, and we argue publicly with other enlightened individuals about strategy and tactics. It doesn’t feel like it at times, but that’s the path to victory in an inherently political process. First we get them on our side in sufficient numbers to generate the needed popular support for a cap-and-trade system or car feebates or a carbon tax or whatever policy measures are appropriate. Then we collectively force the politicians to do the right thing. (If you’re still carrying a grudge at that point, you can wallow in the fact that the people who don’t support you will be mad as hell that you found a way to make both the government and them do the right thing. Success truly is the best form of revenge.) That’s how Democracy works, not by swearing or making some sort of perverse and wildly counter-productive “statement” via vandalism.

Some people, even a few of those most dedicated to the cause (which I assume includes the author quoted above), might be tempted to dismiss Earth Day as a content-free exercise in “green happy-talk”, but I see it as a perfect chance to focus mainstream consumers and voters on our looming energy and environmental issues. Is Earth Day the one lever that we can use to move (or save) the world? Probably not. But given the urgency of the situation, I’d rather use (and re-use) that opportunity as fully as possible instead of throwing it away.

“Efficiency”? You know, the thing we used to call (gasp!) conservation, before that became so last energy crisis.

(As far as I’m concerned, there is only the slimmest sliver of difference between efficiency and conservation, and it has to do with intent. If you buy a more fuel efficient car because you like it, that’s (unintended) efficiency, but if you do it at least in part to reduce your gasoline consumption, then that’s conservation. To be honest, I use the terms interchangeably, except when I’m hanging out with the rest of the energy geeks at our favorite bar, Watt’s Up?. But I digress.)

Back on topic, the issue at hand is US views of efficiency/conservation measures. Specifically, I think we’re finally reaching the point where energy prices are inflicting enough pain on enough people–from individual consumers to business people to those managing budgets for almost any organization, like schools and religious institutions–that Americans are (finally!) willing to think explicitly about efficiency and how they can trim their energy expenses.

My initial reaction: It’s about freakin’ time, people.

My secondary reaction: I find it extremely sad that years of information, even in the truly pathetic US mainstream press, about the evils of our energy-profligate ways, from global warming to an insane level of oil dependence (often relying on countries that don’t like us), to a ballooning trade deficit (we buy about 1.4 billion dollars of oil every day from other countries, at current prices) weren’t enough to get people to budge a micron. It took $3.50/gallon, the latest mule kick to the forehead, to wake them up and start herding them, however slowly and halfheartedly, in the right direction.

All of this came to mind when I (and a few bazillion others, I suspect) received an e-mail from Marianne Lavelle at US News and World Report about a series of efficiency-themed articles they’ve published online:

• Putting Your Home on an Energy Diet
• Three Ways Businesses Can Save on Power
• Efficiency: the Unloved Solution That Works

Good articles, even if there’s not too much there that regular TCOE readers don’t know already.

The real value of these articles is that they’ll help spread the efficiency meme to all those US consumers who claim to be “too busy” to make even the slightest change to become more energy efficient, or who think it will be “too much of a hassle”.

And that’s where you can play a role, via a simple experiment. Tell your friends, neighbors, co-workers, and relatives about these articles. Tell them you’re tired of throwing away money and you’re making some changes to your home or workplace. Provide details, if possible–”I saved $5/month on my electricity bill and $15 on gasoline without really trying”. Ask them if they have any tips for spending less on energy, even if you’re sure they’re the last people on the planet who will conserve; if nothing else, the question might jump-start their own budget assessment process. Don’t mention Al Gore, global warming, peak oil, polar bears, or any of that. Just stick to the money angle, and see if you can get them to pay attention to the market’s latest mule kick and take some evasive action before the next one happens.

The fact that it will help them and everyone else on the planet can remain our little secret.

No, not about his ludicrous proposal to give US motorists a summer “holiday” from the 18.4 cent/gallon and 24.4 cent/gallon federal taxes on gasoline and diesel fuel, respectively. That’s the purest and lowest form of political pandering I’ve seen during the current 17-year-long election cycle here in the US.

The thing he’s apparently right about, given his gasoline tax vacation idea, is his admission that he “doesn’t really understand economics”. Considering that he’s the presidential nominee of one of the two major US political parties, that should be enough to [1] disqualify him (or at least hand him a landslide-scale loss in November), and [2] seriously call into question the judgment of anyone who supports him.

But back to fuel taxes.

A summer hiatus for federal fuel taxes is a stupendously, stupefyingly bad, and just plain stupid idea, for three reasons:

First, it adds about $10 billion more the US federal deficit. I know, I know–when you’re burning $12 billion a month in a war in Iraq and racking up hundreds of billions in deficit annually, $10 billion seems like chump change. But why add to the deficit when it only makes our energy situation even worse?

Second, you lower the price of a good and demand goes up. It’s part of that whole economics thing McCain “doesn’t really understand”. Right now, we can’t afford to encourage more gasoline and diesel fuel consumption, plus more CO2 emissions, even by a small amount.

Third, we can never forget how shortsighted consumers can be. People do respond to higher fuel prices, but because of the lock-in effects of commutes and the expense and hassle of replacing a vehicle with a more efficient model, those changes come very slowly. This is why the demand for gasoline is extremely price inelastic in the short term (meaning that for a given percentage increase in price you get a smaller percentage decrease in demand). Now that we see US consumers abandoning light trucks in droves, our number one priority should be to continue that trend to ensure fewer gas guzzlers are on the road when peak oil really sinks its teeth into us in just a few years, plus consume less gasoline and emit less CO2 now. Lowering gasoline prices by 18 cents would instantly reverse much of the progress made via months of rising economic pain. Truck sales would rebound as many people would leap to the erroneous conclusion that the “good old days of cheap gasoline” just might return, after all.

So, what should we do about gasoline taxes? Instead of ignoring them we should use them as a policy tool to accelerate the changes we know we need to make. We could use a new federal tax on gasoline to create a price floor that increases every year for at least five years. If the market prices gasoline below a given year’s level, then the federal tax makes up the difference. If the market price exceeds the floor, then the tax is limited to the current, 18.4 cents/gallon level. (And yes, this would ease competitive pressure on oil companies to keep gasoline prices in check–feel free to laugh derisively at this point–so we would have to add a windfall profits tax on them.)

Such a tax plan would give consumers far more price certainty than they have now. They would know, without doubt, for example, that for the rest of 2008 gasoline would cost at least $3.00/gallon, and at least $3.50 in 2009 and $4.00 in 2010, etc. The actual price could well go higher–nothing in this scheme would prevent a price spike from any of the multitude of above-ground factors that can and do jostle gasoline prices–but it would still provide a great deal of incentive toward fuel efficiency over the time span that a typical household plans on keeping a new vehicle. The result is less gasoline used, on average, in existing vehicles, plus people buying more fuel efficient vehicles which we’ll all live with on our roads for years.

As much as the US car companies would howl about this, it would help them, as well. They would gain at least as much certainty as consumers do, coupled with the same level of incentive to embrace the breadth and depth of change we all need from them.

Many people will object, and say that a much more equitable plan is one many people have talked about, namely a much higher gasoline tax offset by a reduction in payroll taxes. I would support that plan (as I’ve said on this site several times in the past), as well, provided we were fair in how the offset was calculated and implemented, and as long as we did something relatively soon.

Of course, no US politician will propose anything like these tax plans. They already passed the new, “tough” CAFE law (which I remain convinced will be completely obviated by market conditions long before 2020), so they will cling to the quaint belief that they’ve dealt with gasoline issues and then attempt to do nothing more on that front for fear of being seen as inconveniencing the car companies or, heaven forbid, imposing a new tax of any form.

According to their personal incentives, it’s best to do nothing, be politically safe in the short term, and help America run into peak oil at high speed–and accelerating, if John McCain gets his way–than to inconvenience consumers and voters with a plan to slow down or change course, even a little.

Here we go again–the latest round of oil price predictions are washing over us like a wave of uncertainty.

First, we have the US Dept. of Energy’s Short-Term Energy Outlook, which was updated just a few days ago with predictions of oil averaging $100.61 in 2008 and $92.50 in 2009.

Second is Citigroup and their projections of $96 for 2008 and $88 for 2009. As the Bloomberg article above points out:

The revision makes Citigroup’s 2008 forecast seventh- highest among 30 analyst estimates submitted to Bloomberg News. Merrill Lynch & Co. holds the highest prediction, with an estimate of $102 a barrel. Seven other banks have revised their price outlooks this month.

Third on our hit parade is a comment from Tim Guinness, an “experienced commodity investor”, that oil could potentially hit $150 in five to 10 years before falling back thanks to a demand shock. Notice that the above article quotes Guinness as saying something even more “shocking” (my term, not theirs):

He said: ‘The oil price is currently at around $106 a barrel, but energy demand from emerging economies is a near irresistible force, and we are unlikely to see a curbing of demand without a $150-$200 spike.’

Last, but not least is Lehman Brothers, which projects lower prices, with some additional views from Goldman Sachs and our friend, Matt Simmons:

Most investment banks have forecast the oil price will continue to rise but Lehman Brothers has opted to stick to its view prices will weaken “significantly” through the rest of this decade after peaking in 2008.

It forecasts crude oil will average at $105 in the third quarter of 2008 before settling down to $80 in the fourth quarter of 2008 and the first quarter of 2009. Figures from its Energy Special Report show the firm expects the price to average at around $84 from the fourth quarter of 2008 up to 2009.

Lehman Brothers’ stance contrasts with the views of other investment banks such as Goldman Sachs, which forecasts the oil price to reach $200 by 2010.

…

Simmons said global demand, despite the US financial turmoil, was now growing much faster than could ever be sustained – which would lead to continued high prices. Lehman Brothers’ prediction, on the other hand, is based on a study that shows demand from the OECD countries as well as China will drop.

It said OECD demand would fall by 100,000 barrels per day in 2008 and 2009 in contrast to its original projection of a 300,000 bpd one-off rise this year and flat demand in 2009.

“Combined with a minor downward revision to our original China demand projection, we now project total non-OECD demand growth of 1.2 million bpd this year, pulling 2008 total global demand up by 1.1 million bpd, a drop of 400,000 bpd from our original forecast in December,” the report said.

Over the longer term a number of leading indicators point to weakening prices as leading demand indicators trend downward, Lehman said.

“Many oil market bulls hold that emerging market demand will continue growing apace. However, even expanding Asian economies can show pullback, as evidenced by Japan and South Korea, which consume less oil now than at their 1973 and 1997 respective peaks,” the bank said.

So, what to make of this potpourri of petroleum prognostications?

Longtime readers are probably expecting me to climb on my soapbox at this point and scream and wave my arms about how insane it is to make such faux precise predictions. Those projections are laughable, in that they try to quantify (in the case of the US Dept. of Energy, down to the penny) something that’s susceptible to such a wide range of influences, including many in the political and weather arenas, that a correct projection is more akin to winning the lottery than making an accurate analysis.

It’s obvious why so many entities make these projections, of course–there’s a huge demand for them. The disposition of several small mountains of money depend on decisions that are influenced by “knowing” the price of oil in advance, even if everyone else “knows” it as well. So we all make believe that the crystal ball set can actually see not just into the future but around corners, and we tell ourselves that Here Be Truth. And then people like me blog about it and ridicule the whole process, while making my own projections. Ain’t life grand?

But back on point…

The general notion of oil prices remaining pretty much where they are in 2008 feels right to me, but only if we assume that we won’t have any inconveniently placed hurricanes, no new wars, no relevant terrorist attacks, etc. to jostle the chess board.

The conventional wisdom seems to be that nearly everyone is expecting a slight loosening of the market in 2009. I’m less confident in this view than I am in the 2008 projections. We very well could see the price decline slightly, based on some new production coming online and/or some slowdown in the rising oil demand from China and the oil exporting countries. But notice that our list of assumptions and the susceptibility of any projection to them are both growing; you could easily make an argument for non-US demand continuing to grow, coupled with ongoing declines in production from large, older fields resulting in the price of oil rising by another $10 to $20/barrel. And that’s without factoring in any further erosion in the US dollar. (While I’m on the topic–anyone care to guess what the swearing in of a post-Bush president will do to the US dollar? Pick your candidate and name your exchange rate!)

I think the most pertinent points made in the material I quoted above came from Simmons and his “oil is still cheap” shtick (which he finally expressed as something other than his endlessly repeated “15 cents per cup” metric; Matt: call me, we’ll work on some new lines), and Guinness’ observation that it will take a pretty high price, compared to current levels, to significantly cut demand.

On the latter point, note that in the US, even current record-high oil prices still leave US consumers paying nowhere near the same percentage of their income for energy that we did in the early 1970’s. People are complaining about gasoline prices now, but I very clearly remember how much worse it felt in the two oil shocks of the 1970’s/80’s. We will have to get to that level of economic pain before it forces many people to take the kind of easy, cheap, and painless conservation steps I type about here until my fingers bleed. Yes, a lot of early adopters and more enlightened consumers are making changes already (or never had to make them in the first place)–ask the Big Three how those truck sales are doing–but many more are still in denial and will remain there until the market delivers the second or third or fourth mule kick.

So hang on to your keyboards, people. As one of our frequent contributors reminded me the other day, our collective energy future will be a lot of things, but “dull” isn’t on the list.

In talking with various other writers and visitors to this site, the question of “OK, so where do you think we’re headed?” often comes up. Since I think this is a useful way to address all these interlocking issues in the energy + environmental arena, I will lay out my views on all the various sub-topics in two posts, beginning with this one.

Please note that in this sweeping exercise I’m focused mostly (but not entirely) on the US, and mostly (but not entirely) on the next 10 years. I also reserve my right, as detailed in the US Constitution, to be wildly, laughably, stupefyingly wrong.

Oil
The world production of oil will peak around 2011/2012. It won’t be a sharp peak-and-decline, but an undulating plateau as rising prices make it economical to bring ever more expensive supplies online and also constrain demand. In particular, those rising prices will provide the political pressure needed to make the US drill wherever we can find oil. And drill we will–ecologically sensitive offshore areas, ANWR, etc., will all be tapped, in time. The same basic conclusion applies to oil extraction in the Arctic or anywhere else on the planet. This is an inescapable conclusion once you accept that peak oil is real and imminent.

The price of oil will fluctuate a lot, with a generally upward path. There may be a slight dip in the next couple of years, but this will be a short-term anomaly, not a “return to the good old days of cheap oil”.

The biggest wild cards in oil demand over the next decade will be China and the domestic consumption of the exporting nations. Both of these factors could make the tight world oil market effectively much tighter from an oil importer’s viewpoint.

The war of words over peak oil will continue and get ever louder and more annoying. Every time someone finds a new oil field, it will be trumpeted by the cornucopians as proof that peak oil is “wrong”, and every shortage or price spike will be paraded around the blogosphere as proof that we’re all going to die shivering in caves in five years. I will continue to detest both groups and complain about them here, or on whatever online form this blog evolves into during the next decade.

Coal
The big political battle in the energy and environmental world will be in the building of new, non-CCS coal plants in the US, as the pressure to “do something” about coal will become overwhelming, even as CCS technology looks less and less promising.

The third rail of US enviro-politics will be what we do with the nearly 1,500 coal plants already in service here. No one will come up with a good plan to retrofit them with CCS (carbon capture and sequestration) technology, and any attempt to replace them with natural gas or nuclear or renewables will be an extremely hard sell, thanks to the sheer number of coal plants.

The US coal-fired electricity issues will be nothing compared to the growing mess in China. Getting Kansas to forgo new coal plants was a struggle; getting China to stop using coal in dirty plants will be virtually impossible.

As oil prices continue to rise, possibly with some supply interruptions added to the mix, the pressure to convert some of the US’ vast coal reserves into liquid fuel will be overwhelming. Can it be done in a way that doesn’t aggravate the global warming situation? Can it be scaled up to replace a meaningful portion of US transportation fuel demand?

Natural gas
The very general price trajectory will follow that of oil, but with less volatility and likely less of a percentage increase. But the overall scenario–higher prices, more difficulty in meeting worldwide demand, more exploration and development of previously off-limits or marginal reserves, and some perverse above ground factors (such as local opposition around the US to the building of new LNG terminals)–will look hauntingly familiar to anyone who follows oil issues.

It’s not clear to me how much new electricity generation will rely on natural gas. Utilities will like the greatly reduced CO2 emissions, relative to coal, but they’re probably quite nervous about the prospects for prices decades from now.

Ethanol
The boondoggle of starch-based ethanol in the US will continue. The political influence of corporate agriculture and Iowa (thanks to its early position i the US presidential primary process) will guarantee it.

Cellulosic ethanol will continue to develop, and we’ll likely see the first large scale plants online within five years. That’s when things will get interesting, as the market interaction between starch and cellulosic ethanol supplies, plus the change in the biomass supply infrastructure, all begin. Will we see land currently used for growing food converted to growing genetically modified poplars and switch grass? Probably not on a large scale, but such effects are influenced by so many other factors–public policy, world oil price, the food/fuel interaction potentially pushing some farmers to revert corn acres back to wheat and other grains–that it’s almost impossible to make a firm prediction.

Unless there is a stunning advance in cellulosic ethanol production (with a matching transformation of the infrastructure), it will become obvious pretty quickly that the US government mandate for producing 35 billion gallons of ethanol per year won’t be reached and was a ridiculous goal.

Hydrogen
Hydrogen fuel cells for cars will continue to draw lots of research money (i.e. government grants), and will never be able to answer the simple question: How can you fuel a significant number of such vehicles at a lower price/mile than plug-in hybrids or electric vehicles, and without creating an unacceptable amount of CO2 emissions? It may well take more than a decade for the hydrogen fairy tale to die.

Algae biofuels
This is one of the biggest unknowns in our energy future. Current work in this area seems extremely promising, and I would love to see algae farms popping up near coal plants worldwide turning some of those CO2 emissions into something that can then be refined into motor fuel. But how well will it really scale, and at what cost? This could turn out to be anything from a “niche of a niche”, a parlor trick technology that never makes a meaningful contribution to our energy needs, to a game-changing breakthrough. I’m optimistic, as it seems like the technology is simple enough and inherently scalable enough that it should be a significant player in just a few years.

US consumers
US mainstream consumers will continue to present a very mixed picture. Many more of them will become much more efficient in their transportation choices: More efficient vehicles, less driving, more use of public transportation, etc. Similarly, we’ll see a lot more interest in improving the performance of homes through better insulation, windows, and doors, more efficient heating and cooling systems, more adoption of solar thermal water heaters, plus more use of alternative strategies, including zone heating and cooling, using auto-setback thermostats, etc.

Some will even take the astonishing steps of educating themselves about energy and environmental issues and getting involved in the political process. They will write to their elected representatives, volunteer and vote for better candidates, and work to help educate others about the myriad of issues involved in our consumption of energy.

Sadly, not nearly enough Americans will take these steps. Many will continue to insist that high oil prices are just another example of “the oil companies screwing us” and spend all their time complaining about their gasoline and heating bills instead of taking action. There will be no end of peak oil and global warming deniers getting more than enough free press to help feed these perverse, uniquely American, tendencies.

US politicians and public policy
A far greater disappointment than US consumers will be US politicians. Nearly all of them will continue to shun “peak oil”, at least openly, and will focus on global warming and the every candidate’s favorite canard, “achieving energy independence”.

This head-in-the-sand approach is partially due to demographics–politics is dominated by old, rich people who have never studied economics or energy issues in any detail outside of the legislative process or campaigning for office, so they can’t grasp that such fundamental shifts are happening right before their eyes. But mostly it’s the influence of money, which badly warps the entire US political system in favor of those entities with the resources and the most to gain from buying politicians.

In this episode: electricity conservation, privatized nuke waste, mystery sea level rise, EDF press release

Intelligent Demand Response to Prevent Electricity Shortages, Brownouts and Blackouts:

Demand response isn’t a topic that comes to mind for most people when they think of energy conservation. When the summer sun is beating down, it’s stifling hot, and the air-conditioners are on full blast, we’ve all heard the requests from our local utilities to save electricity as electric power supplies get tight so, we voluntarily conserve energy, individually, to prevent power shortages.

Back in the “old days” — 10 years ago — companies participating in the early demand response programs did it the old-fashioned way, literally going around and turning off lights and equipment to consume less electricity, helping out their local utility to reduce their electricity consumption and prevent potential brownouts and rolling blackouts.

Very sophisticated, automation technologies — some introducing technology imported from Europe — are now being promoted by a number of companies, including Powerit Solutions. These technological advancements allow computers to make “intelligent” decisions for each individual industrial facility using demand response technology, carefully “shedding,” in progressive stages, the electrical requirements for each company. By acting in this “intelligent” manner, production is minimally affected until the energy squeeze crisis passes.

Demand response has proven tremendously successful for the utilities and big, electrical-grid operators in managing an impending, peak-power crisis. Though the technology is growing quickly in popularity with systems installed in more and more industrial companies, there is still a great deal of potential in the management of even more fundamental industrial energy loads.

See the article for more detail. Note that the author is the President of the company mentioned above, Powerit Solutions.

My general reaction to this article is: Welcome to our future. We live in a world where we emit far too much CO2 and other pollutants per unit of electricity we generate. That means we’ll be hard pressed to build up those technologies with very low or no marginal CO2 emissions/kWh, such as solar, wind, wave, tidal, geothermal, nuclear and CCS retrofitted onto coal plants as quickly as we’ll need them. One way to avoid some of the pain of this emerging market pinch is through conservation–and it goes far beyond changing your light bulbs.

While it’s true that we have a ridiculous amount of low-hanging fruit to pick in almost all areas of our energy use, it’s equally true that it will take a very different mindset than most people have today before we actually take those steps and exploit that untapped energy source. Modern industrial society has evolved in an era of absurdly cheap energy, including electricity and oil, and we’re suddenly faced with a sea change in the basic rules of the game that’s making our decades of experience and learned habits obsolete.

When people talk about energy issues they tend to fixate on oil and its most obvious use, transportation, and with at least some justification. But I’m increasingly convinced that the biggest challenge will not come from keeping goods and people moving, but in keeping the electrons flowing while we deal with the need to reduce CO2 emissions as well as the growing impact of past emissions, including drought, rising sea levels, and warming temperatures.

It bothers me deeply that so few people seem to be connecting these dots and talking about the larger picture, particularly the overlap of peak oil and global warming, which is where electricity generation lies.

DOE Idea: Going Private With Nuke Waste:

Energy Department officials trying to promote nuclear power are suggesting that private industry assume some responsibility for the country’s nuclear waste.

Edward F. “Ward” Sproat said Thursday that the idea could ensure more stable management and financial support for the long-delayed Yucca Mountain nuclear waste dump project in Nevada that he manages.

“I do think that providing some sort of an organization with legislative fiat that provides that stability and fixes some of these institutional problems is a good idea,” Sproat said after addressing a conference of nuclear regulators. “But it’s got to be done right.”

He heads the Energy Department’s Office of Civilian Radioactive Waste Management.

Even Yucca Mountain supporters say stability has been lacking at the 77,000-ton repository planned 90 miles northwest of Las Vegas. It is intended as the resting place for the spent reactor fuel and high-level defense waste piling up at power plants and other sites around the country.

…

A power point briefing prepared for lawmakers by Dennis R. Spurgeon, the Energy Department’s assistant secretary for nuclear energy, includes a slide showing a “nongovernmental entity” that would manage nuclear waste disposal and fees from nuclear utilities in concert with a still undeveloped recycling program supported by the Bush administration.

…

Yucca Mountain’s opening date has been delayed repeatedly since the original 1998 goal. Sproat had pegged 2017 as the best achievable opening date. But that has slipped and he could not give a new one on Thursday.

He did say that plans to submit a required construction license application to the Nuclear Regulatory Commission by the end of June are back on track, after coming into doubt this year because of Reid’s budget cuts.

Meanwhile, liability to taxpayers is surpassing $7 billion because the department contracted with utilities to take possession of their nuclear waste beginning in 1998.

Somebody tell me that this is a bad joke. Please.

Reservoirs keep sea levels down:

The water stored worldwide in reservoirs has stopped global sea levels by rising by more than an inch in the past half century alone, cutting the effects of global warming on ocean levels significantly.

A new study suggests that even though global sea level has been climbing steadily by 1.8 mm per year over the same period - a rate that is now increasing - the contribution from melting ice or thermal expansion may have been much greater than realised by scientists.

…

In the journal Science, the Taiwanese scientists point out that the total rise in sea level over the past century is due largely to ocean water expanding in volume as it warms up, and ice melt from mountain glaciers and Greenland and Antarctic ice sheets.

Subtracting the effect of thermal expansion from the observed rate of sea level rise should give a reasonable estimate of the rate of ice melting, but the equation leaves out the amount of water locked up in reservoirs, which stops run off into the oceans.

The researchers estimate that trapping the reservoir waters has artificially dropped sea levels by 30 millimeters over the past 50 years. Add that water back in, and suddenly the contribution of ice melt, or thermal expansion, or both, “plus some other unidentified causes,” must be higher than previously thought.

The latest climage change report from the Intergovernmental Panel on Climate Change report indicated that, after summing up all the known natural causes, scientists are still short of explaining fully the observed rise; “so the (man-made) reservoir impact actually makes the situation even worse - or more difficult to explain.”

I get a lot of e-mail from people asking why I’m so alarmed about global warming when peak oil is, as I say endlessly, likely only three or four years off. This article perfectly exemplifies why: We keep making discoveries about climate change and the environment and they’re almost universally bad news.

We don’t know exactly how bad the situation is. We don’t know for sure precisely how much we have to cut CO2 emissions and how soon. The conventional wisdom at one time was that CO2 had to remain below 500 parts per million. Now we’re talking about 450 as the “magic number”, but there’s already been talk that it might be 350–which we passed some time ago, given that we’re above 380 and still climbing.

But back on point: What do you think accounts for the mystery sea level rise? My hunch is that it’s the obvious candidates, accelerated melting of polar ice and other glaciers, plus thermal expansion of the oceans.

Related article, from 1996(!), about the same scientist talking about dam building: Dams for Water Supply Are Altering Earth’s Orbit, Expert Says

See also Melting glaciers bigger cause of rising sea levels than estimated for some detail about dams and glaciers, from an Indian perspective.

Statement on NAM-ACCF Analysis of Lieberman-Warner Climate Security Act:

FOR IMMEDIATE RELEASE

Contact: Tony Kreindler, 202-572-3378 or 202-210-5791 (cell)

(Washington – March 13, 2008) An analysis released today by the National Association of Manufacturers and the American Council on Capital Formation dramatically overstates the potential cost of reducing global warming pollution under the Lieberman-Warner Climate Security Act and ignores the severe economic impact of inaction.

“Unfortunately, we’ve seen this sort of scare tactic every time Congress takes up a major environmental law. The fact is, the dire predictions never come true,” said Steve Cochran, director of the National Climate Campaign at Environmental Defense Fund. “Instead of rehashing wrong assumptions about climate policy, it would be much more productive for NAM and ACCF to take a hard look at what it will cost if we do nothing at all.”

The analysis of S. 2191 released today is based on the National Energy Modeling System (NEMS) model, which is used by the Energy Information Administration. However, the “input assumptions” used by NAM and ACCF produce dramatically different results from other estimates – including previous EIA modeling of similar legislation and work done by the Massachusetts Institute of Technology.

The misguided assumptions used by NAM and ACCF include:

• No use of market tools to manage costs. This is directly counter to the provisions of the Climate Security Act, which provides for banking and borrowing of emissions allowances to keep costs down.
• Artificially limited use of offsets. The analysis caps offset use at 20 percent. This also is counter to the provisions of S. 2191, which allows 30 percent of reductions from offsets.
• Very limited carbon capture and storage (CCS). The modeling appears to assume that there will be few if any coal plants built with CCS, causing prices to go through the roof.
• Very limited use of renewable energy. In fact, the “low-cost” assumption about wind power (less than 5 gigawatts per year) is lower than the actual amount of wind power deployed in 2007 (5.244 gigawatts).
• Unreasonably high oil prices and no price response as a result of climate policy. MIT on the contrary predicts producer prices falling as a result of curtailed demand.

Most importantly, the analysis only looks at one side of the ledger. NAM and ACCF consider the costs of reducing emissions, but not the costs of inaction. According to recent studies by the University of Maryland and Tufts University, unchecked climate change will strain public budgets and impact jobs and competitiveness in every economic sector. According to the University of Maryland study, the most expensive climate policy for the U.S. is not having one.

About Environmental Defense Fund

Environmental Defense Fund is at the forefront of an innovation revolution, developing new solutions that protect the natural world while growing the economy. Founded in 1967 and representing more than 500,000 members, the group creates powerful economic incentives by working with market leaders and relying on rigorous science. For more information, visit edf.org.

And you thought all of our friends in the business community were going to play nice… why, exactly?

In this episode: measuring carbon, hydrogen backlash, flying cleaner, revenge of the NC’s, sea ice graphics

Carbon Confusion:

Next time you’re in a shoe store, pick up a pair of clogs or leather walking shoes from Timberland (TBL). Inside, right by the heel, you’ll find a single number that tells you how “green” the shoe is. This number is explained in a card in the shoe box that provides a 0-to-10 carbon rating. A zero means less than 2.5 kilograms of carbon and other greenhouse gases were emitted when the shoe was produced and shipped. And a 10? That’s a whopping 100 kg, roughly equal to the carbon released if you drive a car 240 miles.

There’s a simple premise behind the new label. Our everyday activities, whether making pancakes or jetting across the sky, are linked to the combustion of fuel, which releases gases that contribute to global warming. Timberland believes climate-conscious shoppers will buy shoes that help them cut their carbon count. And those same customers will feel more loyal to the brand because Timberland respects their wishes.

I can’t recommend this article highly enough.

It points to what I believe is “the” key trend that will shape our e+e future, from individual consumption decisions all the way up to the highest level of public and corporate policies: Transparency of environmental impact.

It really is this simple: We can’t accurately judge the impact of our consumption decisions if we can’t quantify them. As the old saying goes, you can’t manage what you can’t measure. And as I keep saying here, we need to replace mindless consumption with mindful consumption. The first step in doing that is to realize it needs to be done (i.e. “admitting we have a problem”), and the second step is to get the information needed to make better choices.

Hydrogen Cars Are Here. Now We Just Need A Fueling Infrastructure:

Hydrogen cars and their promise of a zero-emission, petroleum-free future are no longer the stuff of science fiction. Automakers have the technology largely nailed down and say vehicles like the Chevrolet Equinox FCEV and Honda FCX Clarity are poised to take us beyond gasoline. There’s just one hitch.

Where do we get the hydrogen? There are 36 hydrogen fueling stations in the United States, and two thirds of them are in California. Increasing that number in any meaningful way remains the biggest - and most pressing - challenge keeping us from traveling the hydrogen highway.

Yadda yadda yadda. More smoke and mirrors from the hydrogen crowd.

I’m linking to this one simply because of the reader comments, which are almost universally hostile towards hydrogen fuel cells for transportation. What a relief to see a discussion like this online, one in which I don’t feel an overwhelming urge to chime in and point out all the problems with hydrogen that I routinely talk about here.

Who knows–perhaps the message finally is getting out that hydrogen is a classic example of a beautiful idea slain by an ugly fact. Or, in this case, a whole basket of ugly facts.

Aviation industry must act fast on climate change: Airbus chief:

The aviation industry must act quickly to lower its own carbon emissions or face government regulation, the chief executive of European plane company Airbus wrote in a comment piece Thursday.

Writing in The Guardian daily, Tom Enders said that this year was a “moment of truth for aviation” where the industry could either take “significant action together … or as the time we lost control of our destiny and left it to others to ’solve’ our challenges for us.”

…

He said that European industry targets of cutting CO2 emissions by 50 percent, nitrous oxides by 80 percent and noise by 50 percent by 2020 compared to technologies available in 2000 were “within reach”.

The only real hope for them to reach major reductions in emissions of CO2 and other pollutants involves alternative fueling. You can’t capture the CO2 in-flight and then sequester it when you’re on the ground, and you can’t increase the fuel efficiency of airplanes enough to get to a 50% emissions reduction. (Airplane travel is already remarkably fuel efficient.)

What kind of alternative could that be? It would have to be some form of biofuel that removes CO2 from the atmosphere in the process of making the jet fuel, so that when it’s burned there’s very little or no net contribution to the atmospheric CO2 level. And doing that on a scale to get a 50% reduction across the board, at a time when we’re reeling from the effects of a horribly misguided biofuels boondoggle (i.e. corn ethanol), will be neither cheap nor easy.

Lower energy bills, longer lifecycle boost thin client’s green appeal:

Shifting from PCs to thin clients can save a company upwards of 25 percent in power savings, according to a newly released report from Forrester. The potential energy savings is driving IT execs to reconsider moving from trading in users’ thick clients for thin ones.

The lower power bills can be attributed to the fact that thin clients “consume anywhere from 6 to 50 watts — far less than the 150 to 350 watts used by typical PCs,” according to Forrester report, titled “Green Benefits Put Thin-Client Computing Back On The Desktop Hardware Agenda.” Less energy consumption, of course, also means fewer carbon emissions, which is becoming a greater selling point for eco-conscious companies.

Forrester points to a second green advantage that thin clients hold over PCs: a longer lifecycle. “Unlike PCs and laptops, which commonly have a three- to four-year replacement cycle, thin clients last an average of seven years. They slow down technology’s inevitable slide into obsolescence because they have fewer points of failure and rarely need upgrades.”

Yep.

For IT veterans, this is what used to be called an NC (networked computer), and before that it was (shudder) a “computer terminal”.

Sea Ice Yearly Minimum 1979-2007:

In 2007, Arctic summer sea ice reached its lowest extent on record - nearly 25% less than the previous low set in 2005. At the end of each summer, the sea ice cover reaches its minimum extent and what is left is what is called the perennial ice cover which consists mainly of thick multi-year ice floes. The area of the perennial ice has been steadily decreasing since the satellite record began in 1979, at a rate of about 10% per decade. But the 2007 minimum, reached on September 14, is far below the previous record made in 2005 and is about 38% lower than the climatological average. Such a dramatic loss has implications for ecology, climate and industry as new shipping lanes open.

See the linked site for a veritable icebreaker full of still graphics and movie clips related to Arctic sea ice.

Here we go again. I wrote about this one on May 7, 2007, and it’s back again: The well meaning but painfully clueless e-mail making the rounds about how we can all band together and force down the price of gasoline by boycotting ExxonMobil.

See that prior post for the full text of the e-mail plus my description of why it Just Won’t Work (complete with woefully outdated prices), which has essentially the same text as the note I got this morning.

The bottom line is: Please don’t forward this nonsense. You won’t be able to get people to cooperate, it wouldn’t work if you did, and it just makes you look gullible.

If you want to reduce the financial pain of the price of gasoline, here’s a thought: Instead of trying to organize some ridiculous mass movement, why not (gasp!) use less gasoline? Do that, and I absolutely guarantee that your gasoline expenditures will decline compared to whatever they would be if took no action. And if you can somehow convince enough other people to take similar action, then the demand for gasoline and oil will decline and you might just knock the price down a bit.

How can you save gasoline, you might ask? If only there were, you know, some sort of web page with an obvious name, like The Ultimate Guide to Hypermiling: 100 Driving and Car Tips and Resources, that had lots of tips and links to other sites, perhaps you could find a few tidbits worth trying out.

In this episode: RI and MN feed-in tariffs, OPEC stands pat, NM legislates efficiency, DenierCon 2008, EPA Follies Part 487

Rhode Island and Minnesota Craft Feed-in Tariff Legislation:

In a week of state action on feed-in tariffs, Rhode Island legislators have become the first on the east coast to launch debate on the policy. The tiny state’s move could have a big impact on other states on America’s eastern seaboard.

…

Representative Sullivan’s H 7616 follows a pattern that has now been replicated in several other states. The bill is based upon Michigan’s HB 5218 introduced by Representative Kathleen Law in the fall of 2007. Currently there are similar bills proposing a full system of feed-in tariffs in Michigan, Illinois, and Minnesota. There are also related bills in California though none following what has become known as the “Michigan Model”.

H 7616 Text

H7616 Status

In other renewable energy policy news, on Thursday, February 28, Minnesota State Representative David Bly, (DFL 25B) introduced HF 3537, which calls on the state to implement a system of renewable energy feed-in tariffs patterned after those in Germany.

See the article for more details and more links.

Feed-in tariffs are essentially a minimum price that utilities must pay for electricity generated by consumers, via solar panels, a small wind turbine, etc. They give consumers an incentive to become power producers, and they spread the cost of that new generation across the entire utility’s customer base.

Expect to see much more on this topic in the coming years in the US.

Crude Oil Rises as OPEC Agrees to Maintain Production Targets:

Crude oil rose above $100 a barrel as OPEC ministers agreed to hold production steady at a meeting in Vienna today.

The Organization of Petroleum Exporting Countries will maintain output, according to a delegate, speaking on condition of anonymity. Saudi Arabian Oil Minister Ali al-Naimi, who sets policy in the world’s largest exporter, said earlier that supply and demand are stable.

“Keeping production the same allows more flexibility for OPEC in the future as they can cut if the price comes down,” said Johannes Benigni, managing director of Vienna-based JBC Energy. He said prices may slide in coming weeks because of “reduced gasoline consumption in the U.S.”

…

“OPEC is going to play it safe,” Steven Schork, principal of Pennsylvania-based trading firm The Schork Group Inc., said in an interview in Vienna before the decision was made. “They want to cut but they’re going to make the correct psychological decision and announce no change today.”

New Mexico Act Requires Utilities to Save Energy:

New Mexico Governor Bill Richardson signed a bill on February 27 that requires the state’s electric and natural gas utilities to provide their customers with cost-effective energy efficiency resources. By 2014, the state’s electric utilities must achieve energy efficiency gains equal to 5% of their total sales in 2005, increasing to 10% of their 2005 sales by 2020. The utilities could achieve these gains through such efforts as a rebate program for energy efficient appliances, home weatherization programs, or programs to give away or discount compact fluorescent light bulbs.

To help the utilities meet their goals, the New Mexico Public Regulation Commission must identify and remove disincentives and barriers to such energy efficiency programs, including one key item: the commission must provide public utilities an opportunity to earn a profit on their energy efficiency programs. In fact, when such programs perform satisfactorily, the commission must provide a profit that “is financially more attractive than supply-side resources.” The new act allows utilities to recover their costs and any commission-approved incentives through either an increase in base rates or a special fee added to utility bills. The act also provides a mechanism for utilities to fall short of their goals, requiring them to justify the shortfall, to set new goals, and to gain commission approval for lowering the goals. See the governor’s press release (PDF 49 KB) and the full text of the energy act (PDF 48 KB).

Pop quiz, for all of you who think you know me: Which part of this news item dashed my hopes?

The Climate Skeptics Meet, and the Press Follows:

We’re having a tough time wrapping our brain around the Heartland Institute’s three-day “International Conference on Climate Change” that ended yesterday in New York City. Based on what we’ve read, “exasperated” might be the best word to describe our state of mind.

Actually, the fact that we are reading lots about this conference is in itself a part of the problem. But let’s back up for a moment. The Heartland Institute describes itself as a public policy think tank that promotes free-market solutions to social and economic problems. If those solutions include supporting tobacco companies, taking hundreds of thousands of dollars from ExxonMobil and promoting the idea that there is no scientific consensus on climate change, then yes, mission accomplished.

The scientists at RealClimate slammed this week’s event from the get-go, noting the astonishing number of ways that the meeting was unlike any other scientific conference. The list includes:

• Offering $1,000 to those willing to give a talk calling global warming into question.
• Allowing financial sponsors to select speakers, as opposed to an independent scientific committee.
• Bribing all elected officials with a free stay at the Marriott Marquis in Manhattan if they attended.

Go read the whole thing for more details (including links in the above text to backg