President Trump’s energy policy is doomed to failure as it comes into collision with economic reality.
S[/drocap]o President Trump wants America to pollute its way to prosperity. I refer, of course, to the latest executive presidential orders. The first is to allow the TransCanada corporation to build the keystone XL pipeline facilitating the transfer of tar sands oil from Alberta, Canada, to Illinois and Texas in the US.
Tar sands oil is the dirtiest most polluting oil on the planet; it requires considerably more energy to extract and process than conventional oil, which makes the economics of using it precarious, to say the least.
The second executive order is to rescind a moratorium on the sale of coal mining leases on federal lands. This is an attempt is to revive the coal mining industry and put miners back to work. Climate change! Well he doesn’t believe in that; it is a hoax got up by the Chinese to shackle America, so he believes. China’s Vice Foreign Minister, Liu Zhenmin, replied to that thus:
“If you look at the history of climate change negotiations, actually it was initiated by the IPCC with the support of the Republicans during the Reagan and senior Bush administration during the late 1980s,”
Mr President, this is not the way to make America great. These actions will drag the US backwards while the rest of the world moves forward into a clean renewable energy based sustainable future. These executive orders put America last, not first. In any case, if you really want to create jobs, the answer lies not in oil pipe lines or coal mining, but in renewable and energy saving measures, where more jobs can be created per unit of energy than in the fossil fuel industry.
Renewable Energy is becoming cheaper and cheaper, while fossil fuel is becoming more expensive as the environmental impacts of its use are factored in.
Even if one is to ignore the environmental impact of fossil fuels use, these decisions are economically unjustifiable. Consider this: photovoltaic (PV) solar cell prices have come down by a factor of 100 over the last 38 years, and down by a factor of 25 over the last 15 years.
By the time the pipeline is built and new coal mines opened and developed the cost of PV solar cell will have come down considerably. Onshore wind turbine generated electricity is already the cheapest available. Combine that with the rapid advances made in electricity storage devices and you have the perfect brew to knock fossil fuel out of the picture.
One need only look at Germany to see what can be done, where net-generation from renewable sources has increased from 6.3% in 2000 to about 34% in 2016. The commitment by Germany, the industrial powerhouse of Europe, to renewable sources of energy will drive innovation in design and manufacture that will accelerate the decline in fossil fuel use to levels low enough to make climate change manageable.
President Trump’s energy policy is doomed to failure as it comes into collision with economic reality. The advance of renewable energy sources is now unstoppable. So here is my prediction: the keystone pipeline will not get built and new coal mines will not be opened in the US or anywhere else in the world.
It is dangerously optimistic to believe that renewables will replace fossils at a rate fast enough to make a 100% transition before we are too close to their exhaustion. Price is still the determinant factor for most of the world in driving a transition to renewables and without taxation on fossils to bring their pricing up well above that of non-renewables the fossil fuels will remain “priced to sell” until they are gone and before we make the transition. Even though costs for PV and wind have dropped dramatically, the remaining barrier to implementing a 100% renewable 24/7/365 grid remains the challenges and costs of storage, especially long-term storage for these unsteady energy sources, and our most urgent renewable energy need is for transport fuels, that means energy that can replace oil…oil prices have dropped to levels where renewable transport energy solutions cannot compete. OPEC and Big Oil will do all they must to keep it that way, because that is the very nature of their business, until they exhaust their resources…about 40-50 more years to go on that, very little time indeed in view of the magnitude of what must be done. Without a fossil fuel tax to force fossil energy higher than renewable, the transition will not be achieved in time to prevent the collapse of modern exosomatic-energy-based economics. That, and not AGW (be it true or not), is the real and present danger, and we are in crisis right now!
Government price fixing is not a solution. Bureaucrats do not know better than the market with its pricing system how to direct scarce resources toward productive ends as determined by the will of consumers (i.e., all of us). All this can do is prolong the transition to clean energy.
Setting a correct enough, rational price on fossil energy need not be a matter for bureaucratic foolishness. We can already make quite good-enough estimates for the pricing of renewable alternatives and those then can become the reference point from which we set the prices on fossils. The market as it operates today is not an accurate guide for fossil fuel pricing because it does not account for the ever-increasing scarcity of fossil resources. The current market pricing of fossils is completely irrational, oil falling in price in spite of being continually burned-up every day at an increasing yearly-averaged rate. Since the price of oil is set so that it will sell, as it must be set by OPEC and Big Oil so that they maintain their revenues, their national economic and business lifeblood, it is not set as it should in theory be set by rational assessment of supply (reserves in the ground, not the oil that’s been pumped-out and stored in the tanks) versus demand.
THE MARKET IS FAILING TO GUIDE US TO THE RIGHT PATH AT A FAST-ENOUGH RATE TO AVERT ECONOMIC COLLAPSE. THE SAFE BET FOR THE SAKE OF OUR CHILDREN, NOT THE WISHFUL THINKING ONE, IS THAT IT WILL REMAIN THIS WAY AND WE WILL REMAIN MIRED IN UNNECESSARY WARS IN MIDDLE EAST AS LONG AS THERE IS OIL STILL THERE TO BE PUMPED.
By the way, if we set the price on oil, our primary transport fuel at this time, with reference to expected costs for producing Renewable Fischer Tropsch transport fuels (synthetic gasoline, diesel, jet A made using PV or wind energy) , it would need to be set at ~ $200-250/barrel. Doing this would then also force us to get much more efficient, stop driving the gas-hogs that we’ve been driving, and ultimately, even with the price of transport energy this high, our increased efficiency would mean we could be spending less on energy as % of GDP than we now do. Of course, there is also the potential of EVs to save transport energy, but only if the EVs are designed to be as efficient as they could be…Teslas are not the good example for this..they are actually less energy-efficient and much less lifetime cost-efficient than many economy cars and certainly much less efficient than e.g. the 100km/L VW XL1 hybrid. Yes, as the grid is now still by far mostly fossil-fueled, EVs actually just mean we burn more coal, but that amount of extra coal burned to charge EVs, if designed to be maximally efficient, would still be far less than the amount of fossil oil energy we now use, and that means less investment needed too in the renewable grid, investments that we should be funding with the fossil fuel tax.
The fossil fuel tax is not market distortive/disruptive but market corrective, and provides us with the mechanisms to establish the 100% renewable grid that we must have before it’s too late.
Ultimately, yes, the matter comes down to the will of the consumers…If the majority, due to ignorance, apathy, and wishful thinking, continue to drive energy-wasting vehicles and think that fossil prices will magically rise at a rate fast -enough to push transition to renewables quickly enough, then collapse is inevitable. Personally, I’m fully aware that the majority is still too ignorant, apathetic, etc, and I have no realistic hope for the political will to appear that would create the necessary fossil energy tax, and so I only say what i believe is right, and then I try to be as efficient as can be…After all, by the way, efficiency is actually one way, and any of us can do it if we want without waiting for a vote from the government, that we can probably push fossil prices up without taxation…Increased vehicle energy efficiency means reducing the demand for oil, less units sold by OPEC and BIG OIL means they must raise their prices per unit to maintain their revenues.