Flashpoint: Cap and trade bill is NOT the evil of tyranny

By Craig Shumaker

Christopher Brown, where do we start? Somehow he has equated Cap and Trade with the evil of tyranny, (Flashpoint, Trib-Star, July 12). Seems to me that invading a sovereign country to control their 200 billion barrels of cheap oil is evil tyranny.

Most of his rant was standard no-government libertarian fantasy laced with the usual Ayn Rand totalitarianism scare tactics. Unregulating critical societal functions like banking, energy, and health care is not sustainable.

Mr. Brown made a lot of claims with “known facts” without a single clue as to where they originated — except for one. He claimed Spain’s cap and trade policy is horrible.

Spain doesn’t have a cap and trade policy. It uses feed-in tariffs. The two are quite different.

Google Spain and “cap and trade” and get 0.2 million hits — all at Web sites of conservative forums and news outlets, and all since Obama became president. Spain’s renewable energy policy is misnamed to discredit Obama’s energy bill.

Google Spain and “feed in tariff” and get 10 million hits.

But then, careless interchanging must be acceptable because, as Sarah Palin would say, “Details are not important.”

For this discussion, cap and trade policies are much more free-market friendly than feed-in tariffs. They allow latitude for industry on how to meet set standards. The trick is to set correct and doable standards. Cap and trade was used successfully in the 1990’s to reduce sulfur emissions from coal-fired power plants (www.edf.org).

Clean-coal advocates will brag about how much the utility industry has cleaned up its act in the past few decades. It was forced to. (They never go willingly.) The sulfur cap and trade policy has 100 percent compliance.

On the other hand, feed-in tariffs might be viewed as force-feeding to achieve faster adoption of renewable power generation. In this case, the government mandates utilities to accept and pay for renewable power while mitigating costs with government subsidies.

Spain’s difficulties resulted from overly aggressive feed-in tariffs causing an installation boom that went bust last fall. The country has backed away on that, according to RenewableEnergyWorld.com.

By the way, I used to work for General Electric. It’s not treason to back Obama. It’s good business by today’s campaign laws. Considering GE Wind is the only U.S. wind turbine manufacturer, selling more turbines will be a good thing. GE will also be selling more gas turbines, coal gasifiers, nuclear power plants and locomotives. They aren’t all that into toasters.

Why is Spain (and much of Europe for that matter) so aggressive with the adoption of renewables? The answer is not just global warming. Spain is a country with nearly zero in-ground energy resources, except for low-quality coal. Spain imports 98 percent of its oil and 99.75 percent of its natural gas. In my opinion, that is a far better reason than global warming to adopt renewable energy.

(This is where I agree with Mr. Brown. How can global warming be tackled when the largest carbon dioxide emitter, China, says it did not cause the problem and therefore will do nothing about it?)

From 2005 to mid-2008, the world’s production of crude oil held steady at just under 82 million barrels a day. That’s 40,000 gallons a second! During this time, oil prices more than doubled. Despite the high demand, more oil did not make it to market. The system was maxed out.

All toll, 33 of 48 oil-producing countries are in decline. The United States peaked in 1970. Even OPEC pumped its greatest amount of oil, not in 2008, but in 2006 (www.TheOilDrum.com).

The world uses four barrels of oil for every new barrel discovered. Nearly all worldwide oil agencies now agree that 82 mbpd (million barrels per day) may never be seen again. Since last fall, $100 billion worth of oil projects have been canceled.

Correspondingly, as the world turns away from oil, voluntarily or not, natural gas and coal will be consumed at a faster pace.

Despite the present day glut of cheap natural gas, production is expected to max out in about 10 years. Unlike oil, natural gas is usually consumed on the continent where it is produced. That said, an Alaskan gas pipeline will never be built as long as natural gas is selling below $4 per million Btu.

There is a common claim that the U.S. has 250 years worth of coal. That number comes from our recoverable reserves divided by the present rate of use. According to analysts quoted in Richard Heinberg’s new book, “Blackout — Coal, Climate, and the Last Energy Crisis,” the peak in U.S. coal production may be as soon as 2030.

Production is expected to increase significantly for numerous reasons. Production of high heating value bituminous coal has already peaked, and what is left is lower heating value coal. Capture and sequestration of carbon dioxide (if it comes about) will consume 40 percent of a power plant’s electricity. Those two reasons alone will double coal consumption.

We all have seen the television commercial with the tall thin blonde model telling us there is plenty of oil and gas right here in the United States. What she conveniently doesn’t tell us is the cost and timing. If it were cheap, it would’ve been used already. If drilling started today in ANWR, it would be 2019 before any oil flowed.

Shale gas costs $7 per million Btu to produce because the number of wells needed is five times that of conventional gas. Chesapeake Gas, the largest producer in shale gas, is on the verge of bankruptcy since gas prices have collapsed.

Oil from Canadian tar sands is an open-pit operation that mines two tons of tar sand per ton of oil produced. It also uses large volumes of water and natural gas. One barrel of crude oil from tar sand requires 1,000 cubic feet of natural gas to make synthetic crude. It is a lot cheaper to drill holes in a Middle Eastern desert.

The last administration knew all this. The Bush energy policy, as described in Chapter Eight of The National Energy Policy of May 2001 (and written by Dick Cheney’s infamous secret committee), was to secure energy sources at all costs to maintain “our American way of life.” That report stopped short of recommending invading countries to secure oil. But since that failed, we must move on to Plan B. That is hardly evil tyranny — but it is an attempt to preserve some sort of American way of life.

The bottom line is, eventually the world will run out of affordable hydrocarbons. Climate change or not, we will be forced away from fossil fuels sooner than many think. One way or another, energy costs will be higher.

Weaning ourselves off non-renewable fossil fuels now will be far more manageable than waiting for the day that things just stop working because we didn’t plan farther ahead than the next quarterly earnings report.

Craig Shumaker is a retired engineer with a doctorate in coal gasification. He is a former university professor and has 25 years industrial experience working in energy and materials research and development. A consultant, he owns land in an Indiana wind farm.

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