Saturday, April 22, 2006

Bringing down OPEC...part III

We already have the technology needed to replace oil as an energy source and the alternative sources COST LESS than oil, so the conversion will actually produce profit. Read that sentence four of five times, because it needs to sink in before you read the options below.

In his book Over a Barrel Raymond Learsy cites Amory Lovins of the Rocky Mountain Institute of Colorado as a leading advocate and researcher into these alternate energy resources. Lovins’ proposal: an initial investment of $180 billion over ten years could save the nation $70 billion a year by the year 2025, thus it would pay for itself in under 3 years. Americans spent $285 billion dollars on transportation costs in 2000. You do the math. By 2040, Lovins asserts that the US could stop importing oil altogether, by 2050 we would only be using oil as a raw material for plastics. How? Keep reading.

1) Use oil more efficiently – We doubled our efficiency of oil use after the embargo of the 1970s. We can do it again. We can double our efficiency with an investment of $12 a barrel. For example, hybrid cars are more expensive to purchase, but the added cost is made up after only 3 years of driving. Another example, Trek Bicycle Corporation. They make the carbon fiber composite for Lance Armstrong’s racing bicycles. This is a lighter and stronger frame than any other on the market resulting in a third of the weight. This same concept could be applied to the auto industry. Lighter materials like carbon fiber, new steel alloys, and advanced polymer composites would cut fuel consumption drastically without sacrificing safety (yes, it HAS been studied). It would cost more up front, like hybrid cars, but would save more in the long run. The same ideas could also be used in heavy trucks and airlines
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Fuel efficient homes need to be built. Lovins, on a challenge by PG&E, built a home in Davis, California using high-end windows and extra insulation that actually cost $4500 less than a comparable non-energy efficient home but only consumed 48% of the energy!

He also built a home with solar heating via rooftop solar cells that saved 99% of the heating cost and resulted in a 90% reduction in electricity, with no loss of comfort! Why don’t we do more of this?

2) Develop a biofuel program – Brazil uses sugar cane for ethanol that fuels 4 million cars. This reduced their imports by $50 billion dollars. GM and Volkswagon currently sell "total flex" cars to Brazil that can use ANY pure or blended fuel, from 100% ethanol to 100% gasoline…we HAVE the technology. Why not use it? Well, the oil industry is a mighty lobbying power.

The only biofuel program the US has right now is nothing more than a way to subsidize farmers and agribusinesses for growing corn. But corn-based alcohol is too expensive, and without the government subsidies it would cost 52 cents more per gallon than gasoline. But switchgrass and woody crops like hybrid willow and poplar are a different story.

Liquid fuels from these sources cost far less, and are, of course, much cleaner burning. Not only that, but producing these crops would not interfere with food production, but would rather help farmers by preventing erosion associated with row crops.

New technology can get twice as much ethanol from these woody crops as corn and at less cost in both capital and energy. This ethanol program could generate over 700,000 new jobs (as it has done in Brazil). Government funded farm subsidies could be cut as profitable biofuel crops replaced subsidized grains, and farm income could triple.

This possibility hasn’t gone unnoticed. Shell and BP are looking into it.

So there it is, America’s way out from under the boot of OPEC. I highly encourage everyone to read Raymond Learsy’s book. You’ll never look at big oil and OPEC the same way again. This isn't a perfect solution, but it is the best option out there. To be honest, no one else seems to have a plan to get out from under OPEC's boot, and the status quo will lead us into economic disaster. Something must be done NOW.

1 comment:

WRBishop said...

I think the these are all great ideas which have been around for about 10 years. I think the following is a great idea as well let me know your thoughts...

Idea: Make it illegal to trade/speculate oil futures. This will keep the price of a barrel of oil at the "real" dollar amount set by a standard Supply/Demand curve. We are at an 8 year high as far as oil reserves are concerned so supply should not be an issue.