The U.S., despite today's 19 million + barrel total commercial inventory build (more than half of the build was caused by the shutdown of the Colonial pipeline - I am working on the details and will post soon) will have to address the shortfall in liquid petroleum fuels sooner rather than later. Too, the U.S will be stuck with massive deficit spending.
What to spend that deficit spending on?
- Build out the rail lines between the major cities on the east coast.
- Develop Tidal, Hydro, Solar and Wind electrical generation. These could be done in small units taking advantage of ALL local and seasonal generation possibilities.
- Develop backup nuclear electrical generation to function when the sun does not shine and the wind refuses to blow.
- Improve insulation of all public buildings, office buildings, and then homes.
- Develop networks for Community Supported Agriculture.
- Give Compact Florescent Bulbs away for free, and heavily tax the sale of incandescent bulbs.
- Improve the electrical grid to handle the increased load.
Cuts in spending will, of necessity, have to take place in ALL entitlement programs AND military spending. For every BTU we generate here that can be used to run our economy means one less BTU we have to protect as "American interests". The "peace dividend" could be substantial.
For those of you concerned about where the capital would come from:
No problem. Grant investors tax free capital gains and dividend status in these industries for 10 years, period CERTAIN, and then stand back, or you will get run over by the capitalists on their way in.
Income redistribution is an idea whose time has come and gone. We have a serious energy problem, and the people that solve it and the people that whine about EVERYTHING will be mutually exclusive subsets of individuals.
Back soon,
Mentatt (at) yahoo (d0t) com
16 comments:
Absolutely! The problems are political and regulatory. At $100 per barrel, there is plenty of profit potential in new energy sources. Get the government out of the way and the problem will be fixed.
The next bubble to be blown will be in alternative energies, as discussed in Harper's magazine. Everytime we had an economic bubble (tech, housing, etc.), someone found a new way to separate the dollars from the poor people scrambling to prop up their middle class existences. Wind, solar, wave technology ... watch all the money that will flood these industries. Watch the price of their company shares go up, and inevitably come down. All the alternatives to gasoline and diesel are lesser fuels. Gasoline, diesel and coal will continue to be the dominant fossil fuels. We'll just have to pay more for them.
A few thoughts
The east cost isn’t enough, it needs to be nationwide, electrified and double tracked so fast passenger trains can pass lumbering freight trains or two trains can go opposite directions without stopping. The soon to be out of work air traffic controllers could be retasked as rail traffic controllers to avoid collisions on a soon to be congested and frantic system
Don’t forget geothermal, most of the western US can drill to 5km and have all the steam they want to generate electricity for the cost of plant maintenance. If we are going to build a distribution system for wind power from the Midwest it will also support geothermal from the same region and the rocks are always hot so we only need nukes in the east if that. N.b. I think we should build some nukes weather they are absolutely necessary or not so we can diversify and maintain the knowledge base.
Insulation: Check these guys out. It looks like a great deal and I will be trying out their product at one of my facilities in a year or two.
Dan mentions geothermal for power generation. However, a lesser known technology which is real today is geothermal heating and cooling for homes. Its esentially a heat pump but it pulls its heat from the ground soil rather than the air and is vastly more efficient. Geothermal heating and cooling should be made code in all new construction and huge tax incentives should be provided for people to upgrade.
Also we need to look seriously at more viable sources of energy. I agree we need to pursue solar, wind, etc. But to do so without utilizing coal and natural gas would be suicide. There is going to be a transition. Solar and tidal are just not REAL enough at this point.
Ohh and we are going to have to junk suburbia.
>Ohh and we are going to have to junk suburbia.<
Great idea! It will be interesting to see how we junk 50 trillion USD of residential, transportation, & commercial infrastructure in which 150 million people live. Care to share the details?
And seeing that alternative energies comprise about 1% of the US energy profile, it will be interesting to see where the resources to make such a large scale investment in alternative technologies are going to come from.
Depending on the Bank of China and the Arabs to keep financing this party is not a very good idea. Especially since there is now a current DISLOCATION in the long-term Treasury market which could mean that foreign creditors are losing interest in USG paper. That means USG bankruptcy ahead...and a collapsing dollar which will drive up crude oil prices as well as long rates (bye bye housing market!)
"junk suburbia"
I was in Chengdu China last year and I realized after a while that there was not one building in the city more than 30 years old.
They had torn the whole city down and rebuilt it. Only a few tourists sites were old.
I think China had done this across the whole country. The old housing was unacceptable and they decided to rebuild.
And they did it even with their primitive commie economic system.
It will just take intelligent, rational leadership and pragmatic government policies.
And certainly no faith based, ideological economics.
In the short run, it will be compressed natural gas and offshore drilling to offset foreign oil. Then nuclear, and coal-to-oil using Fischer Tropf. Then nuclear refinery: www.liquidcoal.com which uses electricity and waste heat from a nuclear power plant to make the hydrogen and heat necessary to drive the coal-to-oil process. Coal will become too valuable as a feedstock for transportation fuel to burn in a fixed power plant.
All the while solar, wind and geothermal will gain some share. Solar will do especially well in the southwest, where electricity demand cycles with the sun. But, they are relatively expensive, and since they collect very diffuse energy, a lot of surface area must be covered. The "renewables" are 25 to 50 years down the road. We've got coal for 200 years if we replace the fixed power generation with nuclear, and we can still drive.
We'd better get real on this. How many of you reading this still drive a car? If you haven't given yours up already, why do you expect others to? We've got quite a few Al Gore wannabes here. Please, you stop driving first and let us know how it's working for you.
> Care to share the details <
We either junk suburbia or we junk our entire country.
Looks like it might be to late for the country as it is.
The resources are in the ground, the problem is political. If some government tries to displace 100,000,000 people and take their cars when an alternative exists, there will be a revolution. All you social engineers out there...
This is the downfall of Socialism. The elites who just know everything force their experiments on a no so willing populace. As the law of unexpected consequences takes its toll, people become poorer and less happy. At some point an uprising becomes likely. Different leaders at different times have taken various steps to counter the possibility.
Stalin put 20,000,000 in slave labor camps and worked them until they died.
Mao dragged between 10,000,000 and 100,000,000 into the street and murdered them outright in his cultural revolution.
Hitler distracted the dissidents by blaming all the problems on the Jews and killed them.
And the list goes on...
Ending suburbia is a non-starter. Any regime that pulls it off is a totalitarian nightmare that neither you nor I would want to live under.
1 Build out the rail lines between the major cities on the east coast.
Rail is the most energy efficient mode of transportation. Good investment.
2. Develop Tidal, Hydro, Solar and Wind electrical generation. These could be done in small units taking advantage of ALL local and seasonal generation possibilities.
We're in a crisis. Delay this.
3. Develop backup nuclear electrical generation to function when the sun does not shine and the wind refuses to blow.
And use the capital that we rescued form # 2 to build more nuclear and coal-to-oil
4. Improve insulation of all public buildings, office buildings, and then homes.
Only makes sense. In addition, switch from fossil fuel heat to electric using modern heat pump technology.
5. Develop networks for Community Supported Agriculture.
Every little town in New England has a Common. This is the vestige of shared, common grazing and farm land that was ruined by overgrazing and overfarming. Didn't work in 1680, won't work now.
6. Give Compact Florescent Bulbs away for free, and heavily tax the sale of incandescent bulbs.
The efficiency and price of compact fluorescents makes them a no-brainer now.
7. Improve the electrical grid to handle the increased load.
We've got a third world electrical grid now. Why improve it. We're moving down to join it! (Of course we should)
"We've got a third world electrical grid now. Why improve it. We're moving down to join it! (Of course we should)"
I blew my drink out my nose on this one.. So sad but so true..
Offshore oil drilling companies are going for firesale prices RIGHT NOW!
One of the best- PRIDE(PDE) Inc is going for $13.94 down from 48 earlier this year. PE of 2.5!
Transocean(RIG) is going for $65 down from 163$. PE of 4
Ensco Intl(ESV) is going for $32 down from 83. PE of 4
Diamond offshore is $66 down from 149. PE of 8.
Noble Energy(NBL) is 32 down from 105. PE of 9
Everything is risky now but we are going to start buying in this area. Happy hunting.
Now you're talking my language.
There's much more room for improvement on the conservation side of the energy equation than there is on alternative sources.
Someday that may change, but today, that's where we need to direct our energy.
Transport by river barge is a great deal more efficient than rail
I am surprised /Greg hasn't mentioned silvers role in energy efficiency as in superconductive transmission lines.. I am posting from my blackberry so comments will be short and sweet.
>There's much more room for improvement on the conservation side of the energy equation than there is on alternative sources.<
Apparently, people will fight and scratch for their suburbia. And as such conservation is really a joke.
I imagine that we will fight to maintain what we are used to. But in the end after thousands perish and our economy tanks reality will begin to set in and those who wish to go down with the ship will be abandoned.
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