Wednesday, January 07, 2009

Stimulating the Economy with Energy

The primary reason for the economic meltdown can be traced to the worthlessness of subprime mortgages. But no one should underestimate how $147 a barrel for oil can dampen the world economy in a hurry. Yes, the price of oil dropped down into the 30s and then proceeded to jump more than 20% with Israel's invasion of Gaza. The thing to note is the instability of the world economy at the moment. If there's still any doubt, consider what's happening in Europe with gas supplies from Russia (via The New York Times):
On Tuesday, Aleksei B. Miller, the chief executive of Russia’s natural gas monopoly, Gazprom, said in comments broadcast on Russian state television that if Ukraine blocked the natural gas shipments, Russia would halt all supplies to the border.

By Wednesday morning, Ukrainian gas officials confirmed that all gas shipments from Russia had ceased.

Oleh Dubyna, the chief executive of Naftogaz, the Ukrainian national energy company, said Gazprom had halted all supplies at 7:45 a.m. Wednesday. But Mr. Miller said by that time that Naftogaz had already blocked the last remaining pipeline open to Europe.

Politicians in the United States talk about our dependence on foreign oil and then usually proceed to do nothing about it. Of course, despite global warming, growing scarcity of fossil fuel, rising costs, dependency on foreign oil, etc., a large number of Republican politicians continue to push for oil production while taking large contributions from the oil companies. This will only lead to increased economic instability. Not good.

The way to get off oil dependency is to get off oil dependency. And the way to stimulate the economy is to stimulate the economy. Experts, lawyers and public relations consultants are being paid hundreds of millions of dollars to make it all sound more complicated. This only encourages nonproductive, parasitic and unearned greed. Republicans are not the only ones engaging in this behavior but people like George W. Bush understands it all too well. In the wake of the Enron and Worldcom scandals, Congress managed to pass some business reforms and Bush managed to use his infamous signing statements to water down the bills. He also hired people who watered down or otherwise refused to enforce many of the nation's already existing business laws. The subprime mortgage crisis was not the result of bad business judgment, it was instead the direct result of increasingly criminal behavior in an environment of very little law enforcement. The point is that until Republicans get their house in order and dump most of the people who worked for Bush and most of the people who enabled Bush, anything they have to say about economics isn't worth squat. Hopefully there are a few Republican moderates and a few pragmatic conservatives who finally see the light.

We need to solve the energy crisis. We need to stimulate the economy (the Dow lost over 200 points today as it becomes obvious the economy is continuing to sink). Developing alternative energy and funding an economic stimulus ought to go hand in hand.

Priority number one in the energy sector is research, pure research funded by the federal government mostly through universities. I'm not expert enough to know where renewable alternative energy will go in the future. One of the best prospects at the moment is simply windpower. Because windpower is inconstant and plentiful in some areas and not so in others, we need better ways to store and transmit windpower. Like I said, we need research.

Ethanol has problems and I'm not sure if the problems can be licked. I saw a study awhile back that food for humans, oxen and horses produce an energy return on energy investment of 12 to 1. That's considerably better than anything we're getting from corn ethanol. But we need research in ethanol too.

Solar energy using photovoltaic cells has some serious return on investment problems. Solar reflectors are better but there are also issues. Still, The Oil Drum has an article on solar energy that's slightly encouraging. They discuss a solar energy facility in Arizona that's assumed to convert 15% of the energy from the sun. It's calculated that a fraction of Arizona could supply the entire electrical output of the U.S. Of course, that says little about the transportation needs which require considerably more energy. And then there's the issue that we'll need a great deal more electricity if we're to convert a significant portion of American transportation to electric vehicles.

Actually, another encouraging sign, the article is a year old, comes from Sandia Laboratories, of all places:
On a perfect New Mexico winter day — with the sky almost 10 percent brighter than usual — Sandia National Laboratories and Stirling Energy Systems (SES) set a new solar-to-grid system conversion efficiency record by achieving a 31.25 percent net efficiency rate. The old 1984 record of 29.4 percent was toppled Jan. 31 on SES’s “Serial #3” solar dish Stirling system at Sandia’s National Solar Thermal Test Facility.

The good news is that research might lead to working systems with much higher efficiency than the 15% for the Arizona facility. The bad news is that lack of research money since the early 1980s means it took 24 years to break the old record. We need to do better than that. Much better.

Not only do we need considerably more money for research, but we need to listen to people like Al Gore and start building our nation's new alternative energy infrastructure with the knowledge we already have. It will take money and it will stimulate the economy and begin moving us into the 21st century after eight wasted years.

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