Dana Blankenhorn

Big Threat to the War Against Oil

There is an enormous threat developing to the War Against Oil we all need to conduct in order to save the planet.

Low oil prices.

The price of crude on world markets has been cut in half over the last few months, as the recession we started with our Confederate Money spreads around the world. While the U.S. has responded appropriately, injecting new liquidity to partly make up for what has been lost, the world has yet to respond. The dollar is up against the Euro as a result.

Why is a lower oil price bad? If you spent the last year working on a plan to develop solar or geothermal or hydrogen energy, based on a price equivalent of $100/barrel oil, your project is now dead in the water. Your investors have pulled out and that energy won't be produced.

So long as energy prices are subject to the instant fluctuations of hedge funds and day traders, it is impossible to plan for new supplies.

The solution is simple, and it's time we went for it. As I have stated here many times, that solution is to set a floor price for oil.

The Key To The War Against Oil

The key to winning the War Against Oil will lie in the appointment of a new Energy Secretary.

The Department of Energy has been moribund practically since the day it was born, in part because the President who created it, Jimmy Carter, became so discredited he wasn't even asked to speak at his party's convention this week, despite two Nobel Peace Prizes.

It was designed to implement an industrial policy, but instead it became a political dumping ground, staffed by businessmen under Republicans and party hacks under Democrats.

We can't afford that now.

The Department of Energy must deliver research and policy to guide public and private investment toward a hydrogen economy. Since people really began recognizing the priority we have seen scam-after-scam-after-scam get funding, get publicity, and get power.

1. Ethanol is a scam. It raises food prices, and costs more in energy to produce than it delivers.
2. Clean coal is a lie. The technology does not exist, yet. It might one day, but until it does new coal investments are counter-productive.
3. T. Boone Pickens is a fraud. He wants government power, and subsidies, to turn West Texas into his own fiefdom, stealing and selling its water, running roughshod over property rights with special eminent domain laws.
4. Wind efforts are being wasted. Power lines lose half the power getting it to market. There is, as yet, no infrastructure to turn that power into hydrogen and get it to market.

That's not all. Nuclear power is making a comeback, even though we still don't know what to do with the waste, or even how to protect it against dirty bomb makers. Drill here, drill now advocates threaten to seize the capital we need to make the future and re-enslave us to the past.

I have a very simple plan for the next Energy Secretary:

Government's Role in The War Against Oil

Government should have a limited role in The War Against Oil:

1. Set rules and enforce the law. I've suggested a floor price for energy as the lightest-possible regulation. But there are many laws on the books concerning fraud, and patent rights, which deserve good enforcement, especially now.
2. Watch carefully and be alert for scams. We need honest advice on what's real, what's just someone looking for a hand-out, and what's an out-and-out scam. Oversight of the industry is absolutely vital, not just to stop scams but to point people into potentially-profitable directions.
3. Support basic research.  Corporations are great at applying basic research, but few have the wherewithal (or the talent) to do the basic stuff. They can support it, however. And so should the government. By supporting basic research government assures that the results go out to everyone.
4. Cheerlead and lead. Government at all levels offers a bully pulpit, which should be used. But government can also take the lead in increasing efficiency and providing a market for new energy ideas.

Al Gore as a King in New York

One of the most important, least understood stories of this year has been Al Gore's reluctance to endorse anyone. (Picture from The Atlantic, originally taken by the World Resources Institute under a Creative Commons license.)

There are all sorts of theories, but only one theory makes sense.

He has better things to do.

As I wrote in November, Al Gore is focused on market solutions to the War Against Oil. He has learned, through his work on An Inconvenient Truth and all the opportunities which flowed from it that the power of money can actually be greater than the power of government. He has also learned that money follows credibility.

During 2007 Al Gore signed some very, very interesting deals. He signed deals with venture capitalists, and hedge funds. The core of those deals was that Gore, and people working with him, would go through all sorts of alternative energy proposals, not just those in the market, but those seeking market funding and those still in the labs. He would offer his considered opinion on the validity of each idea, helping to make sure that capital flowed efficiently toward ideas which made the most sense. And he would profit from that.

Speed the Flow

One way in which the Internet can impact policy in the coming years is by speeding the flow of information and belief from the people to policy-makers.

In the TV age there can be immediate reaction, but only to one thing at a time. Subjects beyond what appear on the nightly newscasts are usually dealt with through elite interaction, which occurs more slowly and can become dominated by specific business interests (as opposed to the interest of business generally).

With the Internet, on the other hand, everything can be on the table, at all times.  When views change, not just among elites but among the people generally, the Internet enables this to be reflected back to policy makers, even on subjects previously left exclusively to elite lobbyists.

A great example of what I'm talking about here is The War Against Oil. Everyone agrees on the priority. Even Republican candidates in 2008 accept the premise of global warming. But throughout the political class there's a disconnect between what they're chattering about and what's happening here on the ground.

The Energy Fraud of 2007

The Democratic Congress labored mightily, they said, all through 2007, and they brought forth...this?

No new efficiency standards before 2020? A huge subsidy for ethanol, guaranteeing higher fuel prices? No breaks for alternative energy, and the tax breaks for oil stay in place?

Really? Well, if that's a War Against Oil, I got some waterfront property here in Atlanta to offer you. Trouble is, by 2020 it might just BE waterfront property, only sitting in a desert, and filled to the rim with refugees from what used to be Florida, and New York City, and 10,000 other places.

The only thing worse than this so-called energy bill is the self-congratulatory nonsense spouted by the Democratic "leadership" on its behalf.

Memo to Harry Reid, Nancy Pelosi, and Steny Hoyer. See you in hell, man. No, I mean that literally. Because that's what you're turning the whole planet into with this piece of garbage.

The Arctic ice cap is melting even faster than Al Gore warned it would. The Himlalayas may be glacier-free within a decade. Need a Clue what that means to the ocean level? It'll be on your front porch by 2015, Nancy, and over Steny's head a few years after that. Good luck finding a new place.

Rice Science Wednesday: Glycerin into Ethanol

Cuban-born professor Ramon Gonzalez and post-doc Syed Shams Yazdani have announced a way to turn glycerin into ethanol using a strain of E.Coli and intend to start commercial production next year.

Dr. Gonazalez has been focusing his research on using microbial agents as catalysts for chemical changes, and the press release on this went out in June.

It's now getting the big build-up because DFJ Mercury, a Texas seed capital firm, is now funding the transformation of laboratory science into practical profit. Plus it's another win for Rice in the War Against Oil.

This Week's Clue: It's 1977 in The War Against Oil

Following is the essay you can designate as Volume 10, Number 40  of This Week's Clue, based on the e-mail newsletter I have produced since March, 1997. It would be the issue of October 8.

Enjoy.

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Bob Metcalfe has great timing. (Picture from GigaOm's Earth2Tech.)

Metcalfe coined the term Ethernet, created Metcalfe's Law to calculate network effects, he's written an InfoWorld column, and he's become a savvy venture capitalist.

Now he's saying that what I call The War Against Oil is the place to put your money. He even has a Metcalfian term for what will result. The Enernet.

The Enernet is what you get when you combine green energy technology with the network effects of the Internet.

As I've said here, several times now, green energy does not need to be produced and consumed in the way we produce and consume hydrocarbons. Production can be dispersed.

Every home can have a windmill, or several, while every office building or warehouse can sport solar panels on its roof (and vice versa).

Geothermal operations are much smaller, and quieter, than oil refineries, and can be located closer to town. I can easily see such systems locating by sea coasts so they can turn excess energy stores into hydrogen and pipe that into cities for use by fuel cells.

A Democrat Energy Disaster in the Making

UPDATE: Almost ashamed to admit this but the man known to fans of the Austin Lounge Lizards as Gingrich the Newt agrees with me on this.

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The headline is the right-wing spin on an energy bill which passed the House today.

In this case they're right, but for the wrong reasons.

While the centerpiece of the bill feels right -- $16 billion in oil and gas tax increases to fund renewable energy and energy conservation -- the devil is in the details.

The details make this a very weak bill. More important, the whole assumption behind it -- that energy "supply" must be big, delivered from central facilities over long distance power lines -- is false.

The bill does not, as reporters claim, "increase taxes" on "energy producers." It simply recoups tax breaks that were not designed to be given, but were seized by energy company lawyers. At best, it works along the margins. Remember, $16 billion over 10 years is $1.6 billion per year. In the grand scheme of things, it's chickenfeed.

India and the War Against Oil

For Americans peak oil just means higher pump prices. We can get through by outbidding the world for the oil we need.

For India, not so much. That may be why India treats The War Against Oil far more seriously than we do. The former Ministry of Non-Conventional Energy Sources was renamed last year, to the Ministry of New and Renewable Energy, and a wide variety of energy forms are being tried-out.

According to a chart produced by the ministry, improved cookstoves have reached more of their potential than any other improvement, followed by biogas plants and small hydroelectric plants. The India Times reports that the minister, Vilas Muttemwar, has been in Europe at a Biofuels conference, noting that renewable energy companies there can be 100% foreign-owned.