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Where Will That Oil Come From? August 9, 2010

Posted by Afflatus in Energy.
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In the wake of the Deepwater Horizon oil spill, rage against the oil industry proliferated. Gas stations owned by British Petroleum were vandalized, and angry protesters organized in opposition to the company. Environmentalists clamored for BP, and the rest of the industry, to be brought to its knees. President Obama responded by reversing his policy 180 degrees from his March decision to open areas of the Atlantic to off-shore oil drilling; instead his administration imposed a 6-month off-shore drilling moratorium on all projects deeper than 500 feet. Due to the political climate, this moratorium is likely to be in place for more than just 6 months.

But before you cheer this moratorium on off-shore oil drilling, understand the larger context of the importance of off-shore operations to the US economy. In the US, petroleum provides most of energy for transportation and various chemical building blocks for industry.  In 2009, the United States consumed about 18 million barrels of oil per day (about 22% of total world consumption). Despite the recession reducing oil demand 9%, net crude oil imports were still roughly 12 million barrels per day in 2009. US oil imports would be significantly higher if it wasn’t for the expansion of off-shore oil drilling that took place in the past two decades. A nice graph from Geoffrey Styles’ Energy Outlook blog displays this trend:

As you can see, oil drilling in the Federal Outer Continental Shelf has saved the United States from having to import roughly an additional 2 million barrels of oil per day.

Where would the United States import that additional 2 million barrels of oil per day?

Canada supplies the United States with its largest portion of oil imports at 22%. However, Canadian crude is extremely dirty; over half of Canada’s oil comes from tar sands, an extremely dense, thick form of petroleum that must be melted before it can be extracted and refined. According to the EPA producing one barrel of oil from Canadian tar sands generates 82% more greenhouse gas emissions than does the average barrel refined in the United States. The other likely sources for increased oil imports to the United States are Kazakhstan, Angola, and Nigeria. These countries, as Lisa Margonelli points out, do not have “America’s strong environmental safeguards or the resources available to enforce them.” Kazakhstan did not have comprehensive environmental laws until 2007. Nigeria has suffered an oil spill equivalent to that of the Exxon-Valdez every year for the last 41 years!

So it seems the United States has a choice: drill in off-shore domestic waters under tighter environmental regulations or import the oil from abroad. Or does it?

Underlying this choice is the assumption that the United States’ voracious appetite for oil cannot be reduced. I reject this notion, and hope to explain in the coming weeks how the US could reduce its demand for oil cheaply through conservation and efficiency measures.

In the meantime, it’s worth understanding what a continued moratorium on off-shore oil drilling would mean. Oil is a risky business and it always comes from someone’s backyard!

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Enraged Eyes Turn From Soccer to Eskom June 13, 2010

Posted by Afflatus in Energy, Sports and Entertainment.
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The biggest fans missed the biggest moment and it’s an absolute tragedy! 15 minutes into the second half of the opening match between South Africa and Mexico, the big screen T.V. in Orlando, Soweto went black and never turned back on. The 3,000 fans who had gathered to watch a defining moment in their country’s history (as big as their first democratic elections according to many) were justifiably upset. According to the local paper, The Times, the fans stuck around and then left hugely disappointed. I, for one, would have been livid! In fact I am angry right now. This is a disgrace and it never should have happened.

I was pretty  mad when I learned I would be in an airplane flying from Mozambique to Johannesburg during this same opening match. Thankfully, the flight was moved 3 hours earlier so I was able to watch to the game in the Johannesburg airport. To understand the tragedy of the Soweto blackout, the atmosphere in South Africa surrounding that first game must be witnessed firsthand. People were dancing and singing in ecstasy when South Africa scored the first goal of the cup. Seemingly everyone in the Joburg airport was showing South African colors. If it wasn’t a jersey or face paint, they had a Vuvuzela, the deafening horns blown at football (soccer) matches throughout this country. The sheer joy, which so many people felt during that game, and especially during Siphiwe Tshabalala’s goal, is what those watching (or attempting to watch) in Soweto missed.

As a football (soccer) fan, I would have been devastated if I had missed even one minute of my country’s game; missing the last 35 would outrage me! In South Africa, blacks form the main support base of Bafana Bafana, the country’s football (soccer) team, while whites generally prefer rugby. However, as an Afrikaner told me last night, “right now soccer is everyone’s favorite sport.” This Cup can (and should) be a unifying force for this historically divided country. From what I’ve witnessed, the Cup seems to already be having that unifying effect, a very inspirational observation. Hopefully it will have that same effect in Brazil in 4 years.

But the Cup can only be unifying if everyone is watching. Tickets to the games are generally too expensive for blacks living in Soweto, a township outside Johannesburg. Unable to attend the games in person, watching on T.V. is their only option. Eskom, the publicly-owned electricity provider in South Africa, must make sure that this option remains available.

Eskom has failed its people. Its spokesperson has apologized profusely, and said that this will never happen again. But this guarantee is meaningless – all they are promising is to do their job properly, something they should have done in the first place. What truly will never happen again is the moment. And the moment is gone. It has been missed by 3,000 Sowetans. And this is the utter tragedy.

Now It’s Cash for Refrigerators August 25, 2009

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Yesterday marked the conclusion of the Administration’s Cash for Clunkers program; but as one rebate program winds down, another is preparing to begin. The new program will allocate $300 million from the American Recovery and Reinvestment Act for state-run rebate programs for consumer purchases of qualified home appliances.

This cash for refrigerators program – as many call it – will offer rebates from $50-$200 for purchases of high-efficiency household appliances which meet the Energy Star requirements established by the government in 1992.

The Secretary of Energy, Steven Chu, said upon the program’s announcement:

Appliances consume a huge amount of our electricity, so there’s enormous potential to both save energy and save families money every month. These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs.

Similar rebate programs already exist in over 25 states. The $300 million in federal funds, which come from the Stimulus Bill, will add money to the coffers of those programs, or will create entirely new programs in the other states.

This is an excellent program because upgrading our country’s old appliances will save energy, money (for both the utility and the consumer), and also improve the environment. Indeed, the latest refrigerators cost about one third the money, and use only one third the energy of outdated refrigerators (those made before 1993) according to Energy Star’s savings calculator.

The Department of Energy expects most of the funds to be awarded by the end of November. In order to successfully stimulate the American economy, it is paramount that consumers only receive rebates for appliances manufactured in America. In this way, American jobs will be preserved or created, and more money will remain in the hands of American consumers, companies, and governments.

This program is another example of Stimulus money being spent wisely and productively. At once the initiative will spur domestic production, increase employment, and make our economy leaner and greener. The Obama Administration should be commended for this initiative, which addresses multiple policy objectives in an integrated manner. More programs like this must be implemented in order to continue making positive steps towards revitalizing the American economy.

Oldies but Goodies May 15, 2009

Posted by Afflatus in Energy.
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I know the story about biofuels causing food prices to rise is old news, but while reading the wikipedia page on the World Bank I got diverted to an article in the Guardian which I thought I’d share.

The article essentially says that a World Bank report which analyzed the food crisis last summer found that the overwhelming cause was bad policy by Western nations. The report says that 100 million more people found themselves below the poverty line after food prices jumped as a result of the US and EU implementing energy policies centered on biofuels as a solution for reducing their dependence on petroleum. This is an atrocity.

The interesting thing was that this World Bank report was not published so that George Bush and leaders of the EU would not been embarrassed for their mistaken and (probably) hasty policies.

The article can be found here . I am not a big reader of The Guardian, although I am aware it is a left-wing paper published in Britain. I found the article to be clear, concise, and thorough. I appreciated the depth of its explanation of the World Bank report, which is something I often find lacking in the New York Times, my go-to newspaper.

Anyhowww, ya’ll should check out the article. On a slightly different note, does anyone have thoughts on the World Bank or IMF. Both institutions Joseph Stiglitz (and many others) has criticized for harming so called third-world countries, being a tool of the US, and/or hurting the environment, public health, and standards of living. Whhaddup?

Thomas Friedman et al. April 14, 2009

Posted by Afflatus in Energy, World Affairs.
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This morning I read Thomas Friedman’s article in the Sunday New York Times. He explains how Costa Rica has radically changed their energy policy, and is now gets 95% of their energy from renewable sources. It reminded me of one of his past articles where he essentially says the same thing vis-a-vis Denmark.

Similar articles appear regularly in the New York Times: they detail the more sustainable energy policies of other countries around the world. For good measure here is another that has stuck with me ever since I read it. It explains how the Irish government placed a tax on using plastic bags at a grocery store (as opposed to reusable cloth bags). This tax totally changed the culture surrounding plastic bag usuage, to the point where someone walking home with their groceries in a plastic bag would be glared at repeatedly.

So Ireland, Denmark, and Costa Rica all have superior – more sustainable – energy policies than the United States. What is the problem? Why can we not make drastic changes like them?

Is our country too big? Is there not enough public support here? Are not enough ordinary Americans willing to sacrifice (i.e. pay) to save the environment? Has the Right shifted the political spectrum as a whole to the right?

It is probably a combination of all of the above. Any thoughts? I do want to emphasize the last point: President Sarkozy, a center-right politician in France, would be called “a socialist” by most of the Republican party here. Sad isn’t it?

Stimulus Chart April 11, 2009

Posted by Afflatus in Education, Energy, Healthcare, History, Politics.
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Here is a chart that nicely breaks down the recent stimulus bill. I stole it from my friend Rob’s blog TheStocksBook.com which I’ve also added to our blog roll. You can click the photo to make the image larger.

stimulus-package2