Senate 2012 Energy Report

Here's a general look at energy issues as we start the year:

Ethanol!

2012 starts with the lapse of ethanol subsidies - congratulations to Congress on this. Corn-based ethanol has always been a suspect alternative energy. It has less energy content than gasoline, there have been no good studies that prove beyond a doubt that it isn't a net energy loser given all the energy inputs to growing corn, and finally ethanol subsidies have been the target of an international outcry about displaced food production and rising food prices.

Iran!

Ratcheting up of U.S. sanctions and the increasing likelihood of some kind of EU oil embargo, and Iran's resulting sabre rattling will put upward pressure on oil prices in the early months of 2012 if not throughout the year.

Iraq!

A return to sectarian violence? We shouldn't be surprised if the situation in Iraq unravels in 2012 and if it negatively impacts oil exports, not that it's a sure thing, just that we won't be surprised.

Keystone xl pipeline

This is a marginal issue which will have no impact on energy in 2012 but will remain a minor political point throughout the presidential campaign. The pipeline of course has absolutely nothing to do with U.S. energy independence, but everything to do with tying Alberta synthetic crude production as closely as possible to U.S. demand and compensating for an ongoing decline in Mexican oil exports to the U.S. It is a significant energy security issue in the medium term, however, and conservative groups may be correct that the pipeline is ultimately in the national interest.

North Dakota!

The oil and gas boom continues in North Dakota, an economic bright spot of U.S. economic activity where the unemployment rate remains below 2%. A bubble may be forming in the North Dakota economy which is no doubt unsustainable in the long term, yet it's still fun to think about packing up the family and moving to some rural North Dakota town to dip a ladle into the vast lake of energy cash that has formed there.

One thing to note is that despite the hype, but also the very real energy boom there, it has not dramatically changed the macro-scale picture of U.S. oil production, which peaked in the 1970s. Expanding U.S. natural gas production however has killed the budding LNG industry. In the short term, there is no need now to build the vast LNG import terminals that were being proposed just a few years ago. But that time will still come. The decline profile of natural gas wells is rapid, and the fracking boom will be played out relatively quickly.

Energy demand in the U.S., EU and China

A likely EU-wide recession, continuing economic malaise in the U.S. and a probable Chinese economic slowdown will have a huge impact on global energy demand, and will probably prevent a runaway oil price spike this year like the 2008 superspike, barring sociopolitical upheaval in one or more oil producing nations. Also, the march of global population growth continues unabated, and Chinese economic growth could easily continue at a slower pace than before.[/b]

Oil prices

$100-ish oil is probably here to stay, and if the U.S./EU economies ever heat up again, we could again see oil price spikes. Also, political uncertainty in Iran, Iraq, Libya, Nigeria could all have a negative impact on oil prices throughout the year. In the U.S., gas pump prices will likely trend up through at least May.

Saudi Arabia

Saudi Arabia has mostly ended an unprecedented, multi-year, multi-tens of billions of dollars investment in its oil production to sustain its capacity in the face of declines at Ghawar, the world's largest oil field. At the same time, increases in domestic energy consumption threaten its ability to export even if they can maintain production capacity over the next decade.

Consequently, Saudi Arabia proposes a massive civilian nuclear power development program to free up more oil for future export. Could this effort be used as cover for a covert nuclear weapons program as well?

Nuclear power

As the fallout

 

The Navy is going to deploy a carrier group using a mix of biofuel and conventional fuel this year:

It's still pricey compared to using gas, but the cost has dropped fifty percent since 2009. Assuming that trend continues, there will be no practical reason to use conventional fuels by 2015 or so. Right now the military as a whole spends about 22 billion on gas; assuming the 2015 goal works out, you'd see 22 billion dollars of worth of guaranteed annual investment in biofuel technology every year after that.

 

A navy fueled by nuclear power, algae and chicken guts/poop would be pretty amazing.

 

There is at least one country in South America whose cars run on sugar ethanol, fill up for under a dollar a gallon, and sell us oil at the same time.

 

Forgot to specify-it wouldn't be just biofuel seeing that 22 billion a year-it'd be the whole of the green-energy economy, as the Army is planning to greatly expand its current solar/wind power uses to whole US bases.

 

I wish the nation as a whole had a strategic plan for energy, but I'm gratified that at least the U.S. military has one.

I'm skeptical that second generation biofuels will really pan out, but of course I hope it happens. Algae and stewed chicken gut fuel - these are still in the developmental stage and it will be decades before we achieve real economies of scale on anything like that. It will not become cost-competitive with petroleum in our lifetime, but it could become a viable but highly expensive way to fuel an energy-intensive modern military in a time of constrained resources, if such a time comes.

I look back to Nazi coal to liquid fuel projects developed when their access to oil fields was cut off. It was never cost effective, but they did it anyway because they had to. Biofueling the military is something you do when you're out of alternatives, or as a pilot project when you're into strategic planning. So, it's a good thing for now.

Nevertheless I believe wind and solar can be integrated into energy demands for the ongoing operations of a large military.

 

Oh, definitely. As an example, my brigade's new operating facilities get all their hot water off a grid supplied by solar panels. That's enough hot water for 3,700 soldiers to have hot water literally all day.

 

Very smart. Those are exactly the kinds of unsung efforts that will help us keep our military edge in coming decades.

I wonder what the average oil price this year will be. I suspect it will be the highest average price on record.

2011: $111/barrel annual average.

2008: $100/barrel annual average

so, on average last year's price beat out the year of the oil price spike.

I wouldn't be surprised to see a $115-$120/barrel average for all of 2012.

 

Nationwide Strike Begins in Nigeria Over Gas Costs

Gas prices doubled overnight as domestic fuel price subsidies ended on January 1. Now we have violent protests and people killed by riot police.

The problem for oil exporters is that fuel subsidies are an easy means of obtaining social control. When domestic consumption threatens export levels, those subsidies may become harder to maintain. Saudi Arabia is now facing this problem as well.

 

This is awesome.
http://spaceenergy.com/
[image=http://spaceenergy.com/i/front/Banner2.jpg]

 

That's pretty ingenious. Since it's in space, you can make the panels as big as you like. I suppose the atmosphere has a slight negative effect on collection of solar rays?

 

They list the challenges fairly openly:

Technical

-Improving launch capabilities and capacity
-Assembly of the full satellite in space
-Power transmission of this scale
-Managing space debris
-Managing solar winds

Commercial

-Obtaining all required regulatory permits and approvals
-Competition from new sources of energy or larger, better financed companies or governments that could enter the SBSP arena

They listed their top three technical challenges in the right order too. Launch capabilities, capacity and space assembly pretty much covers why we won't see commercialized space-based energy in our lifetimes.

The economic and energy costs of lifting large amounts of stuff into orbit are prohibitive. It's why we haven't been to Mars, why we don't mine the asteroids for raw material, etc., why the V and Battle Los Angeles aliens haven't come for our water. Cheap space-based energy is waiting for another technology, and that's cheap energy for delivering things to and from orbit.

 

Jabba, are you paying attention?
It's proto-Ringworld.
You should be over the moon, even if it's a long shot.

 

So what would qualify as cheap power for this? My first thought was the old space cannon ideas, but I think you'd need a nuclear reactor to get that to work.

 

A space elevator.
You know who's rumoured to be working on a space elevator?

You'll never guess.
Don't google it!

 

Arrgh, I've freaking heard about this, too. Japan?

 

Google!

And Japan.

 

Well, at least I got it half right.

Google sponsors a lot of advanced technology projects IIRC.

 

Anyone want to place a bet on which we see first - commercial fusion power or a space elevator? My bet is on neither in the next 50 years, although I'm unlikely to be around to collect.

Pop quiz: which are we most likely to see within the next 50 years? What will you choose? What will you choose?

1. A manned mission to Mars
2. Commercial fusion power
3. A space elevator able to cheaply lift heavy payloads into orbit

Personally I won't be at all surprised if we don't even see another manned mission to the moon in my lifetime, or that in my lifetime we end all efforts to keep a permanent manned presence in earth orbit.

 

Manned mission to Mars. It's getting fairly routine for unmanned missions to get there and ISS is giving us a lot of experience in dealing with extended periods of space habitation.

 

I wouldn't count on seeing any of those things within the next fifty years. Even if it were to become feasible, I'm not convinced the world will ever see a space elevator.

 

How this stuff compares to my time left on Earth is largely irrelevant, in my opinion. What's more important is whether or not there will be enough time left to make these technologies feasible in the first place; will it happen before we run out of the energy needed to make it happen.

And guess who's planning to go to the moon? Iran!

 

I understand ILM will help them achieve that dream in a very photorealistic fashion.

 

Indeed, Israeli land missiles might bomb Iran to the moon.

 

Or maybe just in orbit. We could celebrate the partial eclipse of the Moon by Iran every few years.