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A “Crude” Awakening?

"[President Obama] talked about how China and Germany are way ahead of us in the race to dominate the energy technology business. He said the spill shows how unsustainable the increased costs and risks of this kind of exploration are." -- Mara Liasson, NPR News

On April 5, a methane gas explosion at Massey Energy's Upper Big Branch coal mine killed 29 people; it was the deadliest mining accident in four decades.  Investigations are still not complete - investigators have yet to be allowed into the mine to discern the cause of the blast.  But reports have surfaced from current and former Massey employees and regulators that suggest a culture of production over safety.

On April 20, an explosion aboard the Deepwater Horizon, an offshore oil drilling rig leased by British Petroleum (BP), set off a fire that left 11 people dead.  Two days later, the rig sank and crude oil began gushing from a broken pipe nearly a mile below the surface of the ocean.  Today, more than a month later, crude oil is still gushing from the broken pipe (at 12,000-25,000 barrels per day, it's estimated) and all of BP's efforts to date to stop the leak have failed.  Oil is now washing up on the shores of the Gulf Coast.

Q: What do those tragedies mean for the way we produce and consume energy?

The question that comes to my mind as I hear these reports is this: what do these tragedies mean for the way that we produce and consume energy?

I take care in going too far to say that the tragic loss of life and the devastating environmental consequences don't mean that we should stop using coal to produce energy, or oil to drive our cars and power our machines.  As a friend commented the other day, it doesn't mean that we should all trade in our SUVs for Priuses.  But these events should give us pause. 

I do think it's time we stop and consider the consequences of our heavy reliance on fossil fuels.  While investigations of both the Massey coal mine disaster and the BP oil rig explosion and leak are still underway, numerous reports have surfaced in both cases suggesting that safety measures were disregarded in a blind focus on the bottom line (more coal, more oil).

And the fact is that in an attempt to tap ever-scarcer natural resources we engage in ever-riskier extraction methods, like deepwater drilling.  If we had viable alternatives to oil and coal, would we be less inclined to pursue risky extraction methods, or more inclined to heed safety precautions?

Maybe, maybe not, but there are other good reasons to pursue alternative (non-fossil) forms of energy production.  One is that someday the world will need more energy than fossil fuels can provide.  The country that develops alternative forms of energy production will have tremendous first-mover advantage in exporting those technologies.  So far, the United States lags far behind China and Germany.  Another good reason to pursue non-fossil fuels is to reduce our negative impact on our environment.  Who wants to live on a dirty planet? And, we would certainly become less dependent on foreign countries to satisfy our energy needs.

So what's the solution? 

Nuclear is certainly one viable, tested-and-proven, non-fossil way to produce energy.  But it comes with a host of other issues, including enormous upfront costs and financing risks that dissuade many energy producers from pursuing the nuclear option.  And, there is always the debate about waste disposal.

Other than that, I don't see any national-in-scale, economically viable energy sources to fully replace fossil fuels.  APS, SRP and TEP are doing some exciting wind and solar projects, and ACC-regulated power companies are required by 2025 to deliver 15% of their retail energy sales from renewable sources.  But I don't see utilities meeting 100% of their peak and off-peak energy demands with existing wind or solar technologies.

That's why we need to borrow Thomas Friedman's analogy, 100,000 innovators in 100,000 garages (and more in the R&D labs of the nation's energy companies) looking for viable ways to produce energy differently.

We should also look to energy conservation.  I can't say it better than one of this blog's frequent commenters, econ101, in response to the post, "Is Energy Technology Our Last Chance?"

"What is amazing to me is the mad rush for renewables. It appears energy efficiency is mainly treated like the ugly duckling sister to ‘sexy solar.' I think APS conducted a study recently that examines the cost effectiveness of energy efficiency measures - most of which are superior to solar costs.

This would suggest it would be better for the Arizona economy if it could reduce production by 1 megawatt hour rather than switching that 1 megawatt hour from coal to solar generation etc.

Of course solar and energy efficiency don't have to be ‘rivals.'

It appears too much time, effort, and tax payer dollars are wasted on going gung-ho over solar when so much low hanging fruit remains. Maybe a solar panel is just sexier than wall insulation. . ."

The ACC also recognizes the value of conservation and has recently approved new rules that require the electric companies it regulates to reduce electric sales by 22 percent by 2020 - an aggressive target to say the least. To make investments in conservation an attractive option for utility companies and investors however, the ACC must also ensure that lower sales do not result in the inability to recover the fixed costs necessary to deliver power to customers, thus draining earnings.

Protestors have held signs reading "This is Your Crude Awakening" (and variations thereof) across the United States since more than ten thousand barrels of oil a day began leaking into the Gulf of Mexico more than a month ago.  I wouldn't read so much into the recent fossil-fuel tragedies.  But I also wouldn't write them off as opportunities to really launch the alternative energy revolution.  Here, in America.

What's your take?  Write a comment below -- no registration required.


Written on Thursday, 03 June 2010 12:24 by Gary Yaquinto

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