Why US Energy Independence Won’t Happen Anytime Soon

In 1972, the US imported 12% of its oil needs. Now we’re near the 50+% range. In those intervening thirty-something years, we, as a nation have done very little to address that problem.

R.J. Samuelson, addressing the proposed cap and trade program, provides a litany of why it is a bad idea. A cap and trade system essentially outlaws carbon (and will most heavily impact the poor), but there’s an even more important point to be made. There is nothing to replace what is essentially banned:

Reviewing five economic models, the Environmental Defense Fund asserts that the cuts can be achieved “without significant adverse consequences to the economy.” Fuel prices would rise, but because people would use less energy, the impact on household budgets would be modest.

This is mostly make-believe. If we suppress emissions, we also suppress today’s energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or nonfossil fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won’t automatically substitute. If the supply of electricity doesn’t keep pace with demand, brownouts or blackouts will result.

At this point (nor anytime in the near future) we have no alternative fuels to switch too which can fill the capacity such cuts in carbon will demand just to keep us even, much less address the future demands of a growing economy. We haven’t any real plans for increasing nuclear power. Cellulosic ethanol is not a commercially viable process. And wind and solar are hardly refined enough or big enough (or technologically advanced enough) to fill the bill.

We still have a huge need for oil and coal, at least in the short term, and we’re ignoring the assets we have for the vaporware of the future. Maybe it’s just me, but I usually don’t sell my car until I have another car sitting in the driveway.

A perfect example, however, of what we face in the realm of bringing new carbon based assets on-line or refining them can be found, in all places, in Elk Point, SD. There, the citizens have voted in the majority to build the first new refinery in 32 years:

By a solid 58 percent to 42 percent margin, county voters approved Hyperion’s request to rezone 3,292 acres of farm land for a new classification, Energy Center Planned Development.

The obvious advantage to everyone, of course, is the increase in refining capacity of the nation overall. More product into a market which is seeing increasing prices – and, promises Hyperion, it’ll do so with the latest “green” technology:

Hyperion touted the so-called “green” technology in its proposed energy center, which it claims would be the world’s cleanest. The refinery would process 400,000 barrels of tar sands crude a day from Alberta into low-sulfur gasoline, diesel and jet fuel.

Then there is the local economic impact in an area that could use it:

Supporters cited the once-in-a-lifetime economic opportunities the $10 billion project would bring.

An average of 4,500 construction jobs would be required over four years. With the refinery up and running, Hyperion pledges to create 1,826 full-time jobs at hourly wages of between $20 and $30.

But even with the vote approving the project (i.e. the democratic process at work), and even with obvious economic benefit to both the community and the nation, I have to wonder if it will ever be built:

While conceding defeat, opponents vowed to keep fighting the controversial project on every imaginable front, pressing on with a lawsuit it filed against the county over the zoning procedures and opposing Hyperion as it applies for a bevy of state and federal permits.

“We have strategies in place to slow or delay all the permit processes,” Ed Cable, chairman of the anti-Hyperion group Save Union County, said after the vote.

And, of course, there are plenty of groups out there which will be happy to fund their fight against the will of the people.

This is a microcosm of why we find ourselves in the shape we do today. Because of it, we get further and further behind the energy power curve and are approaching the point where, in my opinion, this problem will become insurmountable. At some point we won’t be in the shape to bring viable alternatives on-line (nuclear) nor will we have positioned ourselves to take advantage of the assets we presently have in abundance (oil and coal) for the short term.

What will suffer, of course, is the economy, as it falters and stagnates. And who will suffer? As is always the case when the economy goes south, those who can least afford it suffer the most.

We must wake up to the fact that our energy independence depends on a short-term plan of exploiting (in as environmentally friendly way as we can, given current technology) present carbon based assets as well as future plans to exploit viable alternatives (nuclear) as much as possible while we bring future alternatives on line to replace our carbon based fuels. However, the path we’re on at present, as exemplified by what I think will happen (or, in reality, not happen) at Elk Point, SD, will only bring future economic disaster.

Cross-posted at QandO

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