I do not understand the concern about our "dependence on foreign oil." We depend on foreign oil because it is a good deal -- i.e., it's currently the cheapest way to satisfy our energy needs.Me being me, I took this as an invitation to analyze the claim above. (Most of this piece is taken from my reply which was directed conversationally at Jonathan, to whom I refer as "you". Readers should interpret accordingly.) Crude oil contains about 6.1 GJ/bbl, and is selling for about $60/bbl; call it $10/GJ in round numbers. After 10% refining losses you're up to about $11/GJ; burned in a diesel at 35% efficiency each GJ at the output costs you about $31/GJ, or about $0.11/kWh in crude at the port of departure (at $2.50/gallon and 140 kBTU/gallon it costs about $.17 at the pump per kWh of engine output). Gasoline cars average 17% efficiency, so those figures become 23¢/kWh of crude and 39.8¢ at the pump per kWh at the wheels (assuming 126,000 BTU/gallon HHV for gasoline). We may soon look back on $2.50/gallon petroleum with wistful nostalgia. (News from people of my acquaintance on the West Coast indicates that some already do. Premium no-lead in the Seattle area is a squeak under 3 bucks, and diesel in California is over. I'm happy that I can still fill my oil-burner for a smidge under two-fifty.) Solar PV power costs about 25¢/kWh and is dropping steadily (there may also be quantum jumps as new technologies come to market). Wind power is as low as 4.5¢/kWh and is also dropping as bigger turbines return more energy per dollar invested. Crude was a good deal at $15/bbl, but is no longer. Even if technical and political risks are ignored, it probably never will be again. It's time to move away from petroleum. I would already have moved, but there are no vehicles on the market that will let me "fuel" with electricity. I expect this to change well before the 2010 model year, but that doesn't help today. You don't even need to go AE [alternative energy] to benefit; if we had electric vehicles, we could use quite a bit less petroleum. Combined-cycle gas turbines turn fuel into electricity at about 50% efficiency; allowing 7% for transmission losses, 10% each for charger and battery losses and 20% at the motor, the overall efficiency would be 30.1%. Compared to burning fuel in a 17% efficient car you could burn the oil in CCGT plants, get 77% more miles per gallon and still have the steam-turbine exhaust for industrial process heat. (Calculating more directly, if you burned straight crude in a powerplant which scrubbed the sulfur and whatnot and achieved 50% efficiency, the output energy would be 3.05 GJ/bbl or 20.2 kWh/gallon. Given 7% transmission losses and 350 Wh/mile at the wall [about 35% more than the plug-in Prius+], an electric vehicle would achieve an effective 57.6 MPG.) Crude oil at $10/GJ burned in a 50% efficient powerplant produces power at 7.2¢/kWh fuel cost. If wind can substitute for 30% of this at 4.5¢/kWh, the average cost of the electricity would be 6.39¢/kWh (plus O&M on the CCGT). The effective "mileage" of the aforementioned electric car would be 82.3 MPG; the plug-in Prius using 262 Wh/mile would get an effective 102 MPG on its all-electric driving. Then you'd have all the air-pollution reductions coming along with that for free... can you list the market failures? A vehicle achieving 57.6 MPG is getting more than double the CAFE standard for passenger cars; 82.3 MPG is approximately triple. It appears that a change in the technology of transport energy delivery could cut the fuel required to run America's passenger vehicles by 2/3 with only a modest shift to renewables. It would also replace a great deal of imported crude oil with much cheaper domestic energy supplies which have little or no price volatility. The USA consumes about 134 billion gallons of motor gasoline per year (8.74 million barrels per day). Eliminating 2/3 of this would cut 5.83 million bbl/day of demand, or over half a Saudi Arabia. This in itself would reduce both world oil prices and price volatility.
The worst thing we could do would be to try and predict the future by shunting public resources, at the expense of economic growth, into this or that currently-favored technology.If you mean that we should stop shunting public resources into defense costs for oil producers and routes and charge them at the pump instead, I could not agree more. I can point to entire industries which have come to depend on that one market distortion, amounting to misinvestment of hundreds of billions of dollars. Our current transport energy system is penny-wise and pound-foolish. It evolved in conditions which are now history. It's time to recognize this fact and move on. What will happen if we do? Replacing 11¢/kWh petroleum with 4.5¢/kWh wind electricity will cut the cost of the inputs by more than half, of course. It will also make the future cost of the energy much more predictable. The usual product of lower costs and greater certainty is more investment and economic activity. The question has to be raised: why are soi-disant advocates of growth opposing one of the biggest engines of growth of this century? They should be its biggest fans.
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