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Monday, April 25, 2011

Smarter Energy Policy Made Easy (3)

In the first and second posts on this topic, we investigated the drivers of electricity and heat energy and discovered that energy density and it's relationship to market density could and should determine how to allocate our limited public resources to encourage the development of renewable and alternative energy sources. In the area of transportation, the same drivers apply, but the complexity of the issue is much higher, and therefore, more difficult to properly manipulate with public policy.



If one is an advocate of smaller government, this is a hint that transportation energy usage and development might best be left to free market forces.

Conversely, if one is an advocate for active public policy to achieve specific goals. such as reducing global warming emissions, or reducing our dependence on foreign oil, this inherent complexity is justification for serious public sector investment and oversight of new transportation technologies.

And if one is a politician, you seek a happy medium.

Unfortunately, this last is what we have, and it leads us nowhere fast.

For example, last week, the administration made the second recent announcement in biofuel investment programs, a $30 million, three-year program to "...support research and development in advanced biofuels, bioenergy and high-value biobased products." Gee, that's getting quite a lot for only $30 million. The first announcement eleven days earlier was for a program providing  "...$12 million in funding for laboratory or small pilot-scale projects that support the development of advanced biofuels."

Pretty impressive, huh? $42 million in R&D and pilot plants to transform a market that sells for example, about $554 billion in gasoline every year, or about $1.5 trillion over the life of these announced programs. Sounds like a spit in the ocean to me...especially when you consider that about one-half of those program funds typically go to overhead expenses of the parties receiving the money.

But the announcements sound good, and they seem to support the politicians claims that they're taking rising gas prices and global warming seriously. They're doing something. Even if it's only placating political supporters, they are doing something.

One thing they are not doing, is producing a serious energy policy.

But here at Go Wood, we've helped them understand something that will make their jobs easier. Currently, they seem to be saying that they are trying to advance biofuels production as one part of a strategy to reduce oil consumption, for all the good benefits that brings us.

But having read the last two posts in this series, they know that they can make a much more dramatic impact on national oil consumption by reducing our oil-based electricity and heat production through alternative energy sources, including biomass, when appropriate. This reduction in oil demand will reduce global warming emissions and at the same time, relieve pressure on world oil prices and loosen the stranglehold certain foreign leaders seem to have on our economy.

Does it help electric car development and production? Or biofuels development? Not really...but should our government be interested in outcomes, or dictating the means of achieving those outcomes?

Smart Energy Policy Made Easy...

1) Match the energy density of electrical power generation technologies to the electricity market density of the region.

2) Encourage renewable and alternative heating technologies across the board, in order to reduce oil consumption in this huge sector.

3) Allow transportation alternatives to develop at realistic, economic, and achievable rates.

Heck, if it's really this easy, maybe the US Department of Energy wouldn't need all of that $30 Billion annual budget they just requested for next year....

2 comments:

li said...

This reminds me president State of Union Speech. "Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all ". and "Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail. "

Most of these renewable and fossil fuel will be used to generate electricity, seems like Electricity-based transportation is the main focus to lessen oil reliance in future......

Anonymous said...

Gubmint and How Gubmint Works

Once upon a time the government had a vast scrap yard in the middle of a desert. Congress said, "Someone may steal from it at night." So they created a night watchman position and hired a person for the job.

Then Congress said, "How does the watchman do his job without instruction?" So they created a planning department and hired two people, one person to write the instructions and one person to do time studies.

Then Congress said, "How will we know the night watchman is doing the tasks correctly?" So they created a Quality Control department and hired two people, one to do the studies and one to write the reports.

Then Congress said, "How are these people going to get paid?" So they created two positions, a time keeper and a payroll officer, then hired two people.

Then Congress said, "Who will be accountable for all of these people?"

So they created an administrative section and hired three people, an Administrative Officer, an Assistant Administrative Officer, and a Legal Secretary.

Then Congress said, "We have had this command in operation for one year, and we are $918,000 over budget. We must cut back." So they laid off the night watchman.

NOW slowly, let that sink in.

Quietly, we go like sheep to slaughter.

Does anybody remember the reason given for the establishment of the DEPARTMENT OF ENERGY..... during the Carter Administration?

Anybody?

Anything?

No?

Didn't think so!

Bottom line: We've spent several hundred billion dollars in support of an agency...the reason for which not one person who reads this can remember!

Ready?? It was very simple . . . and, at the time, everybody thought it very appropriate.

The Department of Energy was instituted on 8/04/1977 TO LESSEN OUR DEPENDENCE ON FOREIGN OIL.

Hey, pretty efficient, huh???

AND, NOW, IT'S 2010 -- 33 YEARS LATER -- AND THE BUDGET FOR THIS "NECESSARY" DEPARTMENT IS AT $24.2 BILLION A YEAR. IT HAS 16,000 FEDERAL EMPLOYEES AND APPROXIMATELY 100,000 CONTRACT EMPLOYEES, AND LOOK AT THE JOB IT HAS DONE! THIS IS WHERE YOU SLAP YOUR FOREHEAD AND SAY, "WHAT WERE THEY THINKING?"

A little over 33 years ago, 30% of our oil consumption was foreign imports. Today 70% of our oil consumption is foreign imports.

Ah, yes -- the good old Federal bureaucracy!!

NOW, WE HAVE TURNED THE BANKING SYSTEM, HEALTH CARE, AND THE AUTO INDUSTRY OVER TO THE SAME GOVERNMENT?

Hello!! Anybody Home?