“Humanity at a Crossroads”

Since I work in the petroleum industry  I have a continuing interest in the energy situation both professionally and as a parent and consumer.  I have become very familiar with “Peak Oil”, the apparent phenomenon whereby our petroleum reserves are not be being replaced (discovered) at the same rate as they are being consumed.  This doesn’t threaten running out of oil in the near or even the distant future, but that as the economies countries such as China and India expand, and then eventually the rest of the third world comes on line as consumers, there may be a problem.  Well, as it turns out, there is actually plenty of hydrocarbon energy readily available, Coal is still our primary fuel for electric power generation and other stationary uses.  Natural gas, has long been a feedstock for plastics and fertilizers and for heating.  Because it was uneconomical to transport gas except by pipeline, we were flaring gas all over the third world, so we could get at the oil in the same formations.  With the right catalyst, you can can convert practically any hydrocarbon into practically any needed product, provided the market can bear the cost.

As we have recently experienced, the perceived “shortage” of  crude oil has allowed the futures market players to drive the price of crude from $30 to $70 and the price of gas at the pump from less than a dollar to over three.  Curiously, the volume of oil being traded at those prices was less that 5% of the total,  the vast majority of oil is produced under long term contractual relationships, which of course helped the major marketers bring in record profits since their raw material was at the old price and they were selling product at the “new”(current) market price.

And of course, with $70 prices being bandied about, traditional suppliers such as Venezuela, for instance, have seen an opportunity to want to renegotiate contracts or use the leverage for political purposes.  We have only just now begun to see that story play out.

Adam Smith wuld be pleased – Everybody was so busy making money from oil and gasoline futures, that those of us who had to make a decision to fill the gas tank or feed the kids, started to decide in favor of the kids and be creative about getting to work.  Then, almost overnight, the refiners found their tanks full! Faced with shutting down refineries (anathema to a refinery manager) decided to cut their prices. I read someplace that the really big players on the oil futures markets were the financial houses who saw it as easy money,  Wonder how they are doing now?

So, not surprisingly there has been a renewed popular interest in Renewable or Alternate Energy Technologies.  As in any emerging technologies, there has been a lot of “blue sky” claims and expectations, some perhaps with merit, some wishful thinking, and some pure snake oil.

For the last two years, I have helped a friend of mine give a course in “Global Energy” at St Thomas University, and even though the participants were expected to become somewhat knowledgeable in renewable or alternate technologies, the main emphasis, naturally, was on the petroleum industry.  This is after all, Houston, Texas and we had many excellent speakers from the Houston offices of energy giants and  their consultants and bankers, etc.  So, not surprisingly, although they were all knowledgeable in alternative technologies, the stockowners and customers are primarily interested in oil and the technologies that will put off the “peak oil” phenomenon as long as possible, and that’s what they talked to the class about. (nothing wrong with that, but it tends to limit your own inquisitiveness, when you hear the “experts” marginalizing what they weren’t particularly interested in.

For good reason:  Oil, until now, compared to other forms of energy has been cheap.  We know how to find it and produce it.  We, the industry, consumers and the taxpayer has made tremendous investment in tremendously advanced technologies that makes it possible to locate the oil and drill deeper and deeper  into the Earth, even in waters two miles deep.  None of this is cheap, but the large volumes of hydrocarbons found and produced, (the rewards) make it an investment with a reasonable degree of risk.

To my thinking, as much as I hated paying $3.00 a gallon for gas, perhaps this has expedited the arrival of the tipping point at which  the entrepreneurial  technological community and their investors detect that the consuming public is seriously interested in possibly cheaper, but also more reliable sources of energy for our homes, industries and transportation.  Furthermore, whatever you may feel about the climate’s apparent present warming trend  and the possible linkage to the greenhouse gas, carbon dioxide, Common sense, tells most of us, that even though plants and plankton love CO2, there is probably common sense, in not overloading  our planet’s ability to recycle the atmosphere, unnecessarily.  Whenever you burn something (wood, coal, oil, gas, ethanol, etc.)to produce energy you will also produce carbon dioxide. 

Well, I happened to watch a “Modern Marvels” segment on History Channel  on September 20, 2006 and I was pleasantly surprised to see that not everyone has been procrastinating in the development of sources energy that not only don’t add to the perceived carbon dioxide problem, but are putting other sectors of the economy into the energy picture.  We will watch the 40 minute video, “Modern Marvels: Renewable Energy” and will see the current progress  of wind, solar, geothermal, biomass, wave and tidal power which are already at working commercially and starting to take on a significant part of the worlds energy demand.  They are providing a practical foundation of future expansion and development, which I think will happen faster than most expect, but certainly not overnight.  This may well be the “inflection point ” where alternate technologies will begin to challenge the dominance of  hydrocarbons in the future, and the world should become a better place for it. And, we will use it to keynote this session and kick-off the discussion.

We will also talk about the energy industry in general and discuss some of the other technologies. as well. (How many can you name?)

For those of you who like to read ahead: (As usuual, I am pleased to offer the following enticements)

EIA – International Energy Outlook 2006
http://www.eia.doe.gov/oiaf/ieo/world.html

42. ECOLOGICAL HAZARDS FROM NUCLEAR POWER PLANTS by Dean E. Abrahamson
http://www.iucn.org/themes/ceesp/publications/SL/CT/Chapter%2042%20-%20The%20Careless%20Technology.pdf
Dean Abrahamson – bio
http://www.hhh.umn.edu/people/dabrahamson/

 www.rmi.org, where Amory Lovins seeks market paths
beyond dependence on oil.

www.dti.gov.uk/energy, where some the UK’s plans concerning paths to alternative energy generation are described.

And for your viewing pleasure:

 Bill Moyers is back on PBS! 
(Moyers on America, (http://www.pbs.org/moyers/moyersonamerica/index.html)
Wednesday nights at 9pm, 2 hrs.  This Wednesday the subject is “the Net at Risk”  (http://www.pbs.org/moyers/moyersonamerica/net/index.html)