May 19, 2008 • Vol. 13, No. 34
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Main
That's what this amounts to, isn't it?
A group of Democratic Senators Tuesday threatened to block a multi-million dollar US arms deal with Saudi Arabia, unless the kingdom ups oil production and helps cut soaring gasoline prices.
The senators introduced a resolution of disapproval on the arms sale, as President George W. Bush prepared to head for Saudi Arabia, partly on a mission to contain runaway oil prices.
"We are saying to the Saudis that, if you don't help us, why should we be helping you?" said New York Democratic Senator Chuck Schumer.
There's another crazy idea floating around that might have a comparable effect to the Schumer proposal: increase domestic oil production. It might not offer the added features of the Schumer plan -- increasing our addiction to foreign oil, while at the same time interfering with foreign policy -- but I suspect the American people will be OK with that.
I wonder if the press will make this point when the bill comes up for a vote?
The push to expand use of nuclear power in the U.S. has gotten a favorable reception from those concerned about global warming, but other environmental groups have been cool to the idea. Recognizing that they're more likely to face oppositions from Democrats than Republicans, proponents of nuclear power are lining up an ally with clout in Democratic circles: unions.
As it plots a comeback in the United States, the nuclear power industry is cultivating a critical ally: organized labor.
The reasons are both practical and political. The industry's plan to build dozens of power plants requires thousands of workers, many of them with special skills that have become scarce during a more than 20-year hiatus in major construction. Good relations with unions could pave the way to steady labor supplies, smooth relations with workers, and more training programs to provide skilled labor.
Perhaps more important, the industry could use labor's clout with Democrats to help ensure support in Congress--and in a White House that could soon be home to a Democrat--for the substantial federal backing needed to help get plant construction rolling again.
This is a wise move by the industry, and one that could go a long way to moderating opposition in Congress to future plants. And given the extraordinary need in this country for domestic sources of power, it would be gratifying if one source, at least, can be expanded with relatively minor opposition.
Speaker Pelosi recently appeared with Larry King to discuss the rise in gas prices, but she doesn't seem to pump her gas very often. She's off on the price by about $1.00 per gallon. Remind me again, who's out of touch with ordinary Americans?
It might be helpful to review the climbing price of gas a little, since Speaker Pelosi seems to think President Bush is responsible. She says that when President Bush took office, gas prices were 'a dollar something' per gallon. According to the Energy Information Administration, the national average retail price -- all grades, all formulations -- was $1.51 per gallon in January, 2001. By January, 2007, when Nancy Pelosi became Speaker, that price had climbed to $2.21 per gallon -- an increase of 70 cents per gallon. Now we're up to $3.56 per gallon -- an increase of an additional $2.05 per gallon.
So to the extent that you apportion blame based on 'who's watch' the price rise took place under, gas prices rose 46% in the 6 years of the Bush administration before the Democratic Congress took power. They've risen an additional 135 percent in the 15 months since the Democrats took power. It seems the only logical thing for the president to do is to unilaterally restore Republicans to power, but I suspect Pelosi would object.
No worry though: the Democrats have a commonsense plan to get prices back under control. Perhaps some day they'll share it with the rest of us.
Bloomberg reports several potentially massive oil finds off the coast of Brazil:
Brazil's state-controlled Petroleo Brasileiro SA in November said the offshore Tupi field may hold 8 billion barrels of recoverable crude. Among discoveries in the past 30 years, only the 15-billion-barrel Kashagan field in Kazakhstan is larger.
Haroldo Lima, director of the country's oil agency, last week said another subsea field, Carioca, may have 33 billion barrels of oil. That would be the third biggest field in history, behind only the Ghawar field in Saudi Arabia and Burgan in Kuwait....
Flannery told clients during an April 16 conference call that 600 million barrels is a ``reasonable'' estimate and suggested Lima may have been referring to the entire geologic formation to which Carioca belongs.
This on top of a recent report by the USGS of at least 4 billion barrels of recoverable deposits in the Bakken formation straddling the North Dakota-Canada border. There may be as much as 15 billion barrels in the deep waters of the Gulf of Mexico, more than 10 billion barrels in ANWR, and there could be hundreds of billions of barrels in the Arctic.
The Bloomberg story says the Brazilian fields "could help end the Western Hemisphere's reliance on Middle East crude." That can't happen soon enough, and it won't, but this type of news does make one more skeptical of claims that we're running out of oil.
Bad news for Al Gore, great news for millions of impoverished Indians:
India’s Tata Power group just gained important financial backing from the International Finance Corporation, a branch of the World Bank, for its planned $4 billion, 4-billion watt “Ultra Mega” coal-burning power plant complex in Gujarat state.
The I.F.C., along with the Asian Development Bank, Korea, and other backers, sees the need to bring electricity to one of the world’s poorest regions as more pressing than limiting carbon dioxide from fuel burning. The plants will emit about 23 million tons of carbon dioxide a year, according to the I.F.C., but using technology that is 40 percent more efficient at turning coal into kilowatt-hours than the average for India.
It sounds like a lot of carbon, it's not. Forest fires in this country alone produce more than 10 times as much carbon every year, and each American produces about 22 tons of carbon annually (maybe more if you're shuttling back and forth to Norway to pick up Nobel prizes). New York Times global warming reporter Andrew Revkin lays it out pretty well: "The decision powerfully illustrates one of the most inconvenient facets of the world’s intertwined climate and energy challenges — that more than two billion people still lack any viable energy choices, let alone green ones."
Those people also don't have cars, but the same company behind this power plant is working to remedy that with the Nano, a $2,500 car that was debuted earlier this year. At the time, Anne Applebaum used the car as a peg for an excellent piece delving into the tensions between climate change and development. Worth reading if you didn't at the time.
Carter Wood points us to a new interview with Carl Pope, the Executive Director of the Sierra Club. Pope calls for expanded production of natural gas to help reduce the American dependence on foreign oil:
But among the fuels that you can use there are clear preferences and our preference is, obviously, use all the energy that we use really well. Use renewables as much as we can. Natural gas is the next-cleanest fuel, then we have oil and then we have coal...
So we’re trying to make sure that, first and foremost, we innovatively and creatively use whatever fuel we burn, but second that we rely primarily on the fuels that are the cleanest. And, among the fossil fuels, natural gas is at the top...
Our view is that we should actually let markets work. We should make it possible for the most efficient-energy sources to meet the largest part of our energy needs. There’s a lot of opportunity—people in the natural gas industry tell me—to produce more natural gas domestically by using new technologies, and we’re in favor of that...
I can't find any mention of natural gas in the energy section of Barack Obama's website, except for a brief mention of his plan to 'repeal tax breaks for the oil and gas industry.' Senator Clinton promises to 'flatten demand' for natural gas. It seems that fear of the base is so strong that no one can seek the Democratic nomination while recognizing that we can't conserve our way to energy independence.
It may be a lot to ask, but if the Sierra Club is willing to admit that we might need to produce more energy here in the United States, maybe the Democratic candidates for president could admit it as well.
Reading this report on a new piece of legislation proposed by Rep. Mike Ross (D-Ark.), it strikes me that there's far more room for compromise on environmental/energy issues than it might seem. Ross has proposed a massive investment in renewable and clean energy financed by the extraction of oil from ANWR and the Gulf of Mexico. The plan would also "create tax credits to build new nuclear power plants throughout the United States, with an aim of having 40 percent of the nation's power come from nuclear sources."
"We're not just trying to suck the oil out of the ground for no reason," said Ross, D-Ark. We're trying "to reduce our dependence on foreign oil and take the revenue from the sale of that oil and invest in all of these environmentally friendly and job-creating emerging technologies."....
Ross said the drilling in the Arctic and off the Florida coast called for in his bill would raise about $80 billion over 30 years. He said that money would be "more than enough" to fund efforts to expand tax credits to fight global warming, encourage renewable energy operations and help consumers buy plug-in electric and flex-fuel cars.
Whoever wins the election in November, there's going to be some attempt to address climate change. I tend to think neither party will be able to muster the political will for serious action once the enormous cost and uncertain benefits become clear to the public, but if they do, this is probably what it will have to look like.
John McCain doesn't support drilling in ANWR, but he's a strong supporter of nuclear energy and he's made investing in green technology a campaign theme. He also wants to see the implementation of a cap and trade regime to reduce greenhouse emissions. Obama holds essentially the same positions, only he's even more self-righteous than McCain on climate change and he's slippery on nuclear power (we need it, but we can't invest in it until every politically contentious issues is resolved and he doesn't have to risk taking a stand that would alienate voters).
Unfortunately for conservatives, this is where the debate has ended up--apparently we lost. Short of a decades long cold snap (fingers crossed), compromises will have to be made. And if liberals really believe their own hype on the issue, they'll have to compromise as well. Both candidates could mollify their critics by adopting a plan like this. McCain's opposition to drilling in ANWR drives conservatives nuts. If he wants cap and trade, the least he could do is throw us a bone on this one. And Obama's going to have to find some issue to move to the center on, it might as well be energy policy.
I think it all sounds like a pretty reasonable compromise.
HT: Glenn Reynolds, who responds to the proposal with a concise "good for them."
The wonders of nuclear fission never cease. Discharge from nuclear power plant turns Lake Anna into hot springs:
MINERAL, Va. -- As fisherman Roger A. Hanna Sr. sped across Lake Anna one morning this month, the air temperature hovered barely above freezing. But his digital water gauge registered a balmy 72 degrees.
On the Louisa County shoreline, the North Anna nuclear power plant draws on the man-made lake for coolant to condense steam inside the plant. The water, heated during the cycle, discharges into three lagoons and then returns to the lake, creating a hot springs of sorts here in central Virginia.
The result is a 13,000-acre reservoir with two parts: a cold one fed from the west by the North Anna River and a smaller, hot one near two reactors Dominion Generation uses to produce electricity via uranium fission. For those in the know, the hot part offers an extended resort season. Even as leaves were changing and homeowners were cutting firewood for the winter on a chilly Saturday, boaters, swimmers, jet skiers and water boarders in wetsuits took to the lake.
"Stick your hand in the water," Hanna said as his speedboat passed over schools of fish. Largemouth bass reproduce in larger numbers in the hot part, an attraction to year-round fishermen. Their habitat felt like bath water to the touch.
It is common to find boaters on the water through November. Some celebrate at Christmastime on the lake.
Authorities and locals stress that the lake, which straddles the Spotsylvania-Louisa county border, is perfectly safe.
"It's so regulated by everyone and anybody," said Irene Luck, who lives near the power plant and is a reporter for the Central Virginian, a weekly newspaper.
So when will Greenpeace show up and ruin everyone's fun?
Just for fun...this is how the AP describes Brazil's new oil find:
Last week, Brazil confirmed a monster offshore oil discovery and promising fields near the find, although full-scale extraction is unlikely until 2013 and will be very expensive because it is so far below the surface of the earth.
State-run Petroleo Brasileiro SA, or Petrobras, said reserves at Tupi field could be up to 8 billion barrels of oil equivalent, and initial production should exceed 100,000 barrels daily, though experts believe that will grow.
The DoE says the "expected" yield from ANWR would be significantly larger, but a quick search of Nexis shows the AP to be somewhat less enthusiastic about what they might otherwise describe as a mega-monster field. Here's the AP in May 2005 on ANWR:
barely more oil than the U.S. now consumes in a year.
As Brazil talks about becoming a net exporter of oil, and joining OPEC, the United States has even larger fields--so large they might replace entirely the amount of oil we import from Saudi Arabia--sitting untapped for fear of disturbing the caribou.
One of the key issues that Congress will need to address when it returns in September is legislation to restrict energy production in the U.S. It's not framed that way, of course. The legislation being considered is ostensibly supposed to help produce more energy, but that's not the effect it will have.
Among the myriad problems with the House bill for example, is that it allows anyone 'harmed' by global warming to bring suit against any federal agency that fails to reduce its greenhouse gas emissions as required in the legislation. Plaintiffs are specifically authorized to recover $1.5 million, and to be compensated for legal fees win or lose, as long as the court determines it to be 'appropriate.'
During debate on the legislation in the House, Congressman Darrel Issa described the provision like this:
Mr. Chairman, this piece of legislation is a license for an unlimited amount of suits against the government by the extreme environmental groups. In fact, this bill pays a $75,000 bounty on top of unlimited legal fees to anyone who sues the government even if, in fact, that suit is based on this body's failure to act. Yes. Lawyers will be telling us, by suing us, that we must do more, and there will be no controls. They can sue in all 92 locations around the country. They can sue for any reason. We will have to pay the bill. When they lose, too bad. When they win, they get paid for taking from us not only 100 percent of their legal fees but $75,000 on top of that.
This is a license for America to be held hostage by the trial lawyers. It was deliberate. It was slipped through the committee. They said it was going to be fixed. In fact, nothing has been fixed; and we have been prevented from having an amendment on the House floor. This is undemocratic, and the Democrats know it.
The Heritage Foundation's Ben Lieberman has written a short paper on the problems with the House and Senate energy legislation, and he manages to fill the paper with problems bigger than this--a sure indication of just how much harm these bills might do, if enacted.
Nuclear power is poised for a comeback, as consumers and electric utilities look for ways to meet the rising demand for energy in the U.S. According to the Department of Energy, Americans will use 41 percent more electricity in 2030 than they did in 2005, and hydrocarbons like coal and gas are not as attractive as they were a few years ago. Prices have increased, and Americans have become more concerned about global warming and greenhouse gas emissions. With even many environmentalists now favoring nuclear power as part of our energy strategy, it's clear the industry is headed for a revival.
National Journal gives a good all-around look at where things stand today. They report that federal regulators expect 3-5 applications for new nuclear facilities this year, and 8-10 next year. Assuming that this first swath of new generators moves ahead without major trouble, the number could increase after that. Major obstacles remain however, including financing, disposal of fuel, and environmental opposition.
With regard to financing, NJ says that lenders remain wary:
Before the utilities can put a shovel into the ground, they must persuade Wall Street to lend the millions of dollars they need to secure licenses and the billions they need to build. Industry officials say that the engineering, technical, and legal work required to pull together a license application can cost $100 million. The Energy Department, under a program aimed at encouraging companies to order new reactors, will share some of those initial expenses. After a company receives a license to build, the actual construction will probably cost $4 billion to $5 billion.
Most financial experts on Wall Street remain wary of making huge new investments in nuclear power. Bankers remember all too well the bad experiences of the 1970s and 1980s, when tangles of red tape, challenges from the public, and construction mistakes stretched out timetables for completing new plants and forced investors to write off billions. Some facilities were shut down without ever generating a single kilowatt of electricity.
Fortunately, the 'do-nothing Congress' that Democrats ran against in 2006 seems to have taken a major step toward solving the funding problem: The Energy Policy Act of 2005. That legislation offers both loan guarantees for new facilities--which increases the confidence of lenders in nuclear applications--and tax credits for energy generated by nuclear plants. While the licensing process was streamlined by Congress in 1992, no applications were made until after the Act was signed into law. Constellation Energy, for example, has submitted half of its application for a new nuclear generating plant at Calvert Cliffs, Maryland. Constellation's Senior VP says 'we had been interested in pursuing new nuclear... but it was really on the back burner until the Energy Policy Act was passed. The law provided the incentives needed for companies to look toward new nuclear as a source of emissions-free power.'
Nuclear waste disposal remains a more serious concern. Congress in 1982 ordered the Department of Energy to take possession of all the nation's spent nuclear fuel by 1998, with the goal of storing it at a single site, where proper disposal could be ensured. Over the vociferous opposition of the Nevada congressional delegation, Congress in 2002 passed legislation to create that storage facility at Yucca Mountain. The process continues to move forward in fits and starts; the facility might be licensed in the next 3-4 years. This poses a problem for some utilities, who now store spent fuel at the facility where it's generated. Further, Illinois, California, and some other states have adopted moratoriums on the construction of new plants until the question of permanent waste storage is settled. Some utilities regard this as a serious challenge, other aren't letting it stop expansion plans.
But a more serious challenge remains environmental opposition. Attitudes have clearly changed since the 1970s. The Nuclear Energy Institute, which lobbies for the industry in Washington, maintains a growing list of environmental advocates who back increased use of nuclear power, including Patrick Moore -- the co-founder of Greenpeace:
“[N]uclear energy may just be the energy source that can save our planet from another possible disaster: catastrophic climate change. … Nuclear energy is the only large-scale, cost-effective energy source that can reduce [CO2 ] emissions while continuing to satisfy a growing demand for power. And these days it can do so safely."
Many environmentalists share that view. But while Moore and others back nuclear power, the organization he helped found seems unconvinced. From National Journal:
Continue reading "Nuclear Power Returns, But Big Obstacles Remain" »
The New York Times expresses its disappointment that the United States has not ratified the Law of the Sea Treaty, which would allow the U.S. to contend with Denmark, Russia, and others for the rights to minerals under the North Pole:
The United States does not find itself in a strong position. Misplaced fears among right-wing senators about losing “sovereignty” has kept the Senate from ratifying the Law of the Sea even though the United Nations approved it 25 years ago. This, in turn, means that the United States, with 1,000 miles of coastline in the Arctic, has no seat at the negotiating table.
President Bush and moderate Republicans like Senator Richard Lugar, the ranking Republican on the Foreign Relations Committee, will try to remedy this blunder when Congress reconvenes. This would at least enable Washington to stake its claims to the continental shelf extending northward from Alaska. We may never need a share of that oil, but it seems foolish not to keep it in reserve.
It's nice to know that the Times believes that the U.S. should keep some oil in reserve. It's just that the Times does not believe that oil in reserve should actually be used. In its most recent editorial on the subject I could find, the New York Times editorialized against drilling in ANWR in 2005:
In addition to the familiar economic arguments - that the refuge is America's last great untapped source of domestic oil and is crucial to its competitiveness - Norton has emphasized that drilling technology has advanced to the point where billions of barrels of oil can be extracted without harming the refuge's fragile ecology or abundant wildlife.
Environmentalists beg to disagree. Where Norton sees undisturbed tundra, they see pipelines, roads and drilling platforms that would fragment wildlife habitats. But what troubles us most about President George W. Bush's fixation on drilling is what it says about the shallowness of his energy policy.
Why pass a treaty to enable a dubious claim for a reserve of unknown value, if you are dead-set against tapping the existing, known reserve you already hold? Perhaps conservatives ought to make a deal with the Times: as soon as you editorialize in favor of expanded drilling in ANWR, we'll take another look at the Law of the Sea.
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