Friday, May 02, 2008

Energy Policy 

For what it's worth, here's my idea of what a coherent and reasonable energy policy for the US should be:

First, work more seriously on conservation. To date we've been talking a good game, but haven't really embraced conservation on anything like the scale we could and should.

I think there's still a lot of relatively low-hanging fruit to be harvested in this area. For example, carpooling. When I'm driving on San Diego's freeways during commute time, I'd estimate that 80% of the cars I see on the road contain only the driver. Using public transportation more is another area where more energy efficiency could be gained. Telecommuting is yet another.

One big advantage of conservation measures is that they can be implemented quickly and often do not involve large capital outlays. Another big plus is that conservation is generally environmentally friendly. A big difficulty is that they require changing individual habits of long standing.

I am a firm believer that if you want a lot of people to do something in a particular way, you should make it relatively easy for them to do what you want, and relatively difficult/inconvenient to act any other way. (A caution, however: if you emphasize the difficult/inconvenient part, say by increasing parking rates or penalizing peak-hour electricity consumption, you'd better be willing to take the political heat for it.) It follows that every effort should be made to make it easy and convenient for people to carpool and take public transportation. I don't know what more can be done with respect to carpooling, but as to public transportation, the routes need to go between where people are and where they want to go, to be available at the times they want to go there, and the door-to-door commute time can't be much more than 120% of the commute time using a single-occupancy automobile.

The business community needs to help, too. Many businesses could be much more open to telecommuting without hurting either their productivity or bottom line. One of the problems I've had with public transit is working late. Sometimes getting out of the office 20 minutes later (not to mention an hour later) means you have to wait an hour or more for the next bus or train. That won't work. Workers who could use public transit have to be confident that they'll be able to get home within a reasonable time after leaving work, and that means either more frequent schedules or more dependable quitting times.

Second, the oil companies should be allowed--encouraged, even--to site and construct new refineries so that the total installed domestic refinery capacity exceeds anticipated demand by, say, 15 or 20%. This will allow the refiners to take equipment offline for maintenance and upgrades without causing fuel shortages. It also provides some insurance against terrorist attacks and natural disasters. The additional refinery capacity should be geographically dispersed so that an event like Hurricane Katrina doesn't cripple the system. There should be some direct energy savings from this, too, if newer refinery technology is more energy efficient than what is currently in use.

Third, open up our known petroleum resources to drilling, specifically ANWR and offshore off California and Florida. The environmentalists are hyping the danger of doing this, but the oil companies aren't stupid (if they were they wouldn't be making so much money), and they realize that any ecological disaster will hurt them badly in all kinds of ways, so their assertions that today's technology is environmentally safe should be given some credence. Even though any production from those new sources would be some years down the road, I think the fact that they are being developed would tend to stabilize oil prices.

Fourth, start constructing new nuclear power plants to supplant coal-generated electricity. Contrary to what the media hype (and people like Sen. Boxer) suggest, radioactive waste disposal is much more a political issue than a technological one. The environmentalists are loudly crying wolf here, too, but some of them are beginning to see that nuclear is better than coal and oil for the environment.

Fifth, start developing a plan for tapping into the vast tar sands and oil shale resources located in Colorado, Utah and Wyoming at competitive cost and in an environmentally sound manner. The BLM estimates that this resource amounts to nearly 5 times the proven reserves of Saudi Arabia. How much is ultimately recoverable is another story. This undoubtedly will require some technological improvements, if not breakthroughs, but these resources aren't doing us any good just staying in the ground. This would be a long-term resource, not to be developed for at least 20 years, more likely 50-100 years.

Sixth, develop clean coal technologies that minimize the output of greenhouse gases and other pollutants.

Seventh, provide public money support for research in energy related technologies, such as thermonuclear, solar, biomass and other renewables with the goal of making them both economically competitive and environmentally friendly over their entire life cycles.

My qualifications: Although I don't consider myself an energy policy wonk I do try to keep up on the issue. My early background is in engineering, with a few years involvement as a civilian with Navy nuclear power, and a few more years working for utilities in the area of power contracts. My later background is in law, with emphasis on asset based financing.

I recommend the book Hard Green by Peter Huber as a rebuttal to overhyped environmentalist themes that the media so dearly love to quote. Even if you don't agree with Huber, his book will make you think more broadly about the issue.

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