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The Best Science Writing Online 2012
Showcasing more than fifty of the most provocative, original, and significant online essays from 2011, The Best Science Writing Online 2012 will change the way...
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"You might ask, what will the price of oil be? And the answer is, we don't know."
That's Steven Chu musing on oil at the second annual summit of ARPA-e in Washington, D.C. on March 1.
Chu is a man who knows a lot, Nobel laureate in physics, our nation's 12th secretary of energy. But given the world's increasing thirst for oil—and the demand for energy more generally—guessing black gold's future price is a speculator’s game.
This is not a new problem. Forty years ago, the U.S. endured its first oil shock and, as a result, reduced its use of oil by improving gas mileage in cars and researching alternatives. What happened? Increased exploration spurred by high oil prices paired with that drop in demand led to two decades of low oil prices.
Then we hit the snooze button and fell in love with the SUV. Bad news for the atmosphere—and the economy. We now import roughly $1 billion worth of oil every single day, a huge wealth transfer out of the country into, often, the bank accounts of our adversaries.
Now the residents of China and India are getting their first chance to fall in love with the automobile. Paired with much needed democratic revolutions in places like Libya that seems to be the recipe for cooking up even higher oil prices.
The real question is: what will we do about it this time? Here's what Chu suggests: "Let's take a longer term more measured approach to solving this problem." That means not panicking at high oil prices but investing in the invention of a different future for energy.
That's the purpose of the Advanced Research Projects Agency for Energy that Chu started two years ago. The goal is to turn scientific advances into deployable technology, like better batteries for the electric cars that could further reduce U.S. demand for oil and cheaper photovoltaics to produce the electricity that would go into those batteries.
"If you get renewables that are actually cost competitive with fossil fuels then it's a very very different world."
Of course, just like last time, truly rolling out these new technologies would ultimately have a significant impact on oil prices, potentially making it cheap again. So then the question becomes: will that lead us to remove the solar panels on our roofs like President Reagan did to the White House in the 1980s?
Chu, for one, hopes we don't hit the snooze button again. "Our national security is very dependent on our energy security. So, and I want to stress this, energy we create at home is wealth creation at home."
—David Biello
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22 Comments
Add CommentI agree with Secretary Chu. If we just stop the import of oil, our economy would become the greatest in the world and mass producing electric vehicles and charging stations that are clean energy produced would clean up our environment to our preindustrial age and that would save us a fortune in medical costs alone. So, who is stopping this from happening and why are allowing them to stop our advancement into the clean affordable energy age? Since we already have the technology, it shouldn't take us 40 or 50 years before we can start mass producing affordable all electric cars and clean affordable renewable energy like, solar, geothermal and hydro.
Reply | Report Abuse | Link to thisYes, this would prove to become a huge advantage, a win win situation.
Reply | Report Abuse | Link to thisWho's preventing us? The elephant in the room is none other than the military cartel. They have bleed the system dry. If we could channel the money that they go through in one year into this problem, we would be home free.
There is another powerful lobby which has worked diligently over the past couple of decades to slow our progress on renewables, and is still hard at work. The various branches of the fossil fuel industry have a vested interest in slowing the transition to renewables while they drag their feet to do the same. The original electric vehicle introduction in California was likely killed off by that lobby. And today the tea party gang in Congress are eager to stem the flow of support to wind and solar, supposedly to reduce spending, but more likely to maintain the status quo a while longer for the fossil fuel industry.
Reply | Report Abuse | Link to this"Here's what Chu suggests: "Let's take a longer term more measured approach to solving this problem." That means not panicking at high oil prices..."
Reply | Report Abuse | Link to thisUh huh. Meanwhile the administration he works for is getting ready to draw down the Strategic Petroleum Reserve in order to buy votes. Instead they should just let the price rise - if they really want new technologies and behavioral changes.
Ahhh, yes - the military cartel.
Reply | Report Abuse | Link to thisPerhaps you could explain exactly who and what makes up the military cartel, and exactly what actions this cartel is taking to preserve the fossil fuel industry and thwart renewable energy.
I always thought that we were preserving the fossil fuel industry by, you know, buying fossil fuels. In fact I think a lot of people (besides those in the military cartel) would like to see the fossil fuel industry preserved because they like, you know, affordable transportation.
I somewhat agree with you, "Soccerdad", but we can't just set by and let the price of oil and other fossil fuels rise. That would plunge our economy into another deep recession - the recession that was caused by the Bush reign and we would become an nation of poverty and disease. Gas prices are already so high that people who work at minimum wage jobs and have a family to care for can hardly make it to work, put food on the table and a roof over their head. If Obama pulled America out of Bush's two wars, we would save trillions of dollars, and if we stopped importing oil, we could save several trillion more dollars, and if we stopped giving incentives to the fossil fuel industry that is making billions of dollars of profit a year, we could save several trillion more dollars, and if we made the ultra rich pay their fair share of taxes, we would have a trillion more dollars. The Republicans say that they are for cutting the budget; let them cut these contributions and welfare hand-outs I just mentions and our country would be in great shape. We, again, would be the world economic power.
Reply | Report Abuse | Link to thisFossil fuel prices need to rise dramatically, via a carbon tax, with the proceeds all refunded to each person. This is the only way to provide the incentives needed for us to switch to renewable energy sources. It will involve some disruptions, but better disruptions we plan for and manage than disruptions inflicted on us by the countries we import from. Oil is only going to increase in price in the future, no matter how much we drill baby drill in Alaska, offshore, and in tar sands in Canada and the western US. We have alternatives, solar, wind, nuclear, that can help us leave the most difficult sources of oil in the ground along with much of the remaining coal (unless we really develop carbon capture and sequestration for coal, an expensive proposition). If we don't do this, we will pay much more down the road for relocating cities inland, and adjusting to an array of other disruptions caused by climate change. And we will have missed an opportunity to play a leadership role in the new energy technologies of the future. Rupert Murdoch is now bragging his News Corp parent company of Fox News has achieved carbon neutrality with their investments in energy conservation and renewable energy, and saved money in the process!!! If he can do it, so can the rest of us!
Reply | Report Abuse | Link to thisWhile I certainly agree with the development and utilization of alternative energy sources we have alternatives already available which can reduce and eliminate our dependence on foreign oil while we await the implementation of new energy sources. Today less than 5% of our motor fleet is diesel powered whereas in Europe they are well over 50%. Studies have indicated that if we could go to about 30% we would need no imported oil.
Reply | Report Abuse | Link to thisNo discussion on nuclear's capacity to address the immediate need for a modern infrastructure? And nuclear's next generation capacity to be a bridge to whatever the next stage in our energy reality will be: fusion, space based solar, matter/anti-matter...whatever our future is it is going to be beyond carbon. Getting there for real will be a trick but the actual science suggests that once there, at break even fusion, energy will become as ubiquitous and accessible as cheap internet is now. One will subscribe to a monthly access to as much energy as one can use...it might well end up being too cheap to meter and instead we'll just buy unlimited juice in whatever form is most easily distributed. It may seem like pie in the sky but no more than the internet and you tube was to the most astute predictors just 20 years ago, or less.
Reply | Report Abuse | Link to thisAnother automobile and oil industry lackey. Why does he not push mass transit? Because the auto and oil industry oppose it. It would solve all of our energy problems. Yet it is off the table.
Reply | Report Abuse | Link to thisI agree with Jimmywat...too much focus here on maintaining the status quo. What's wrong with a future of livable cities where active people live and have plenty of access to fresh produce? The cost of maintaining such communities is less, and the residents live fuller lives. Also, this discussion ignores some important practicalities. The impact of current coal use is ignored...the costs are hidden and the human damage goes unseen, as is the cost of the roads that we drive around on. There is also no mention of the fuel that goes into putting autos on the road. Like junkies, thoughts are all about the next fix. Unlike the fantasy world described here, such places I describe exist now, where carbon emissions are far lower than the USA, obesity is far less of a problem, people live longer, tend to live more as part of a community, and studies find higher levels of happiness. Vast tracts of land could be returned to nature or used to grow crops, cutting down on shipping and grocery stores packed with fake foods. There is already a new generation of farmers emerging in this country to supply great produce for expensive restaurants, but we could all live this way. I agree that there will always be a place for the personal vehicle, but must these machines control every aspect of our lives?
Reply | Report Abuse | Link to thisWe need to remember that trade isn't a "a huge wealth transfer out of the country". We purchase $4 gas because it's worth at least that much to us. We are getting a product in exchange for the money spent.
Reply | Report Abuse | Link to thisdubay.denis is right, a carbon tax (or simply a higher federal gas tax) could account for the negative spillovers fossil fuels produce.
But James, you are advocating that the government force alternative energy sources on us in nearly every post. The reason people aren't adopting alternatives is that they are more expensive than fossil fuels. The only way to really drive the switch is to allow fossil fuel prices to rise, then watch people go after smaller cars & electric cars and actually change their habits. You can't protect people from price increases in fuel and cut its use at ths same time. It violates the principles of economics.
Reply | Report Abuse | Link to thisMass transit should be one part of a complete solution but is not, in it self, the magic bullet. Mass transit works where there is less dispersed, fractured travel patterns uncomplicated by random time needs. A trip to the store that could be done in half an hour might take 3 hours if one had to depend on mass transit as is currently implemented. Individual mobility has been a factor supporting the economic strength of this country. However, the almost complete dependence of this mobility on fossil fuels is the major flaw to this mobility. Solutions should take this mobility factor into consideration if we are going to solve this problem without major disruptive shifts in our society.
Reply | Report Abuse | Link to thisDavid Biello asks, "what does [the price of oil] mean for the US Economy?"
Reply | Report Abuse | Link to thisWhat many are missing is the the US economy in the short-term is more important than the US economy in the long-term. This doesn't mean I don't care about future generations; it simply has to do with the basic economic principle of the time value of money. A robust economy in the late 1990s was the main factor in bringing our fiscal house in order rather quickly (much more quickly than any austerity measures could obtain).
Oil prices were a major culprit for our last recession. The crash of the housing bubble exasperated the recession, delayed the recovery, and created the jobless aftermath. There is overwhelming evidence that the price spike in 2008 was market manipulation by Goldman Sachs (but is doesn't make sense to prosecute when $1 trillion was spent on bail outs). The run-up of energy prices from 2005 had more to do with speculation than fundamentals.
Now we are having the same problems. Speculation accounts for most of the increase in price. The energy derivatives market is vastly greater than the physical market. The banks only became exempt from trading limits in the last decade. Prior to that regulations were more effective in proportionally limiting the size of the market relative to the trading done by producers and consumers (e.g. oil producers and refiners; farmers for ag futures, etc).
Limits on speculation must be enforced on all commodity exchanges and OTC commodity markets. Speculation is good, but it can not be allowed to crowd out the physical market. It is much easier for bankers and hedge funds to make money from manipulating the market than trying to predict fundamentals. You only get burned if you are not with the herd (remember Amaranth?).
Each bubble created by Wall Street gets worse: first the Dot-con, then the housing, next is the commodities. They use the new issues market to create the bubble in the secondary market: dotcom IPOs, mortgage CDOs, and now commodity index funds. You can't create a bubble without the retail investor. A decade ago it was almost impossible for the small retail investor to speculate in crude oil; now it is simple.
Joe Kennedy's "shoe shine boy" must be enticed into the market. I remember in 2005, many "shoe shine boys" saying real estate will keep going up because land is a limited resource. Yeah, that was also true in Japan in the 1990s. For energy it will be sold as a hedge against inflation and a flight to safety similar to gold.
It's another economy-destroying bubble.
The United States has plenty of untapped energy ressources. The biggest is high, medium or low-temperature geothermal energy, which can cater for ALL U.S. energy needs!
Reply | Report Abuse | Link to thisA second source is domestic trash and sewerage sludge which, with any biomass, can be pyrolysed to produce eco-fuels. And the list of lost investment opportunities goes on and on...
You can't legislate the problem away. You can't tax it away.
Reply | Report Abuse | Link to thisIf you really want to end reliance on gasoline for transportation, you have to offer a competitive alternative.
100 years ago, electric cars were locked in a struggle with gasoline cars for the market. The introduction of the 10 gallon fuel tank spelled the doom of the electric car.
Alcohol was used as a replacement fuel for some time. Gasoline was less expensive and more powerful. Congress allotted and mandated alcohol under Bush.
The revolutions in North Africa and the Middle East are greatly driven by hunger. Food was used to produce the Alcohol used in the US. Hunger from Mexico to Africa and Asia was the result. We can't both grow food and fuel for the world.
We need another solution. Hydrogen has been touted as a replacement for gasoline for generations. The problems are all worked out, except one. Generating hydrogen economically has always been a problem. I hope something like this can work on a large scale. Without displacing farmland.
Oil and gas can have a future if they are pyrolysed. Such pyrolysis seperates the carbon from the hydrogen in hydrocarbons. The carbon can be added to heavy clay or light sandy soils to improve their water retention capacities and therefore reclaim unproductive land. The hydrogen can be used to supply large quantities of energy, the only bi-product being water. Pyrolysis is cheap but needs more industrial-scale plant built.
Reply | Report Abuse | Link to thisYou guys are all missing the point. The issue is not whether it is good , bad or indifferent for the U.S. to import oil. The reality is that there is no substitute for oil, and furthermore, if it didn't already exist, we would have likely invented it. It is just that useful.
Reply | Report Abuse | Link to thisJamesDavis promoting the stopping all imports of oil and ridding the world of fossil fuels is the intellectual equivalent of asking "What color of Unicorn we shall I ride to work today?" Pathetically naive and silly, as you won't have a job to ride your Unicorn to.
For the U.S. or any advanced nation for that matter to switch from a low cost (and yes oil still is low cost compared to alternate energy forms and will be for the foreseeable future) to a higher cost base energy for it's activities is economic suicide. And it will have the effect of giving your competitors ANOTHER economic advantage over you, as if slave labour wasn't enough already.
The primary eco-naive objection to oil is AGW, which is DOA. Nobody really believes in the religion anymore, it is sooo turn of the century. The only real reason to switch is that it is creeping up in price and our economy is unable to function at those prices. So what to do?
Switch to natural gas. Cheap, abundant, clean, locally produced, secure. But it is a fossil fuel. No Unicorns, but there will be jobs.
Shoshin : I am 63. When I was a boy in England the only people who had cars were the middle and upper classes. Yet we working class people lived perfectly well without cars.
Reply | Report Abuse | Link to thisUnfortunately England followed the great american dream economic model, which has turned out to be the great american nightmare.
Let's ignore the energy lobby and get back to energy savings which is the real definition of economy.
Limiting "speculation" on futures markets is a bad idea.
Reply | Report Abuse | Link to thisFirst, any participant in the economy should have the opportunity to hedge against the rising cost of oil (or other commodities) and the inflation this entails. To buy this hedge requires speculators.
Second, the real cost of consuming oil must include the opportunity cost and risk of not having oil in the future. Hitting $146/bbl may well be the all-in cost of oil consumption. Just as there is a time value of money, there is a time value of oil. Would you like to pay $150 now and inflation adjusted $150 in 2020, or $100 now and $400 in 2020? This is the consumption trade-off we are trying to make.
Third, high futures prices drive investment into alternatives. If you can acquire a technology that will deliver in five years the crude oil equivalent of $150 or less, then selling a future at $150 or above can effectively finance your project today.
Fourth, the flow of capital into sustainable fuels applies downward pressure on oil prices today. OPEC knows that the spot price must stay below $90/bbl to forestall serious investment into alternative energy. If anyone is "manipulating" the market, I would recommend that OPEC sunk the price as quickly as they could to drive investors out of renewables. At least, that was the effect it had. Investors lost alot of money, and right, renewables are languishing for lack of investors.
Finally, it is far too easy to blame contrarian speculators when markets turn ugly, but most often they are simply correcting a market that is mispriced. When banks buy up crude and pay rent to store it in ocean liners, they are excerising a very blunt, costly, and short-lived strategy. It's cheeper for oil producers to leave oil in the ground than for banks to stock pile. Had banks not closed this gap, the oil producers would have enjoyed the uncontested benefits of foot dragging and selling futures at even higher prices. This was foiled only because speculators cut off surplus profit while injecting rapid capital into alternatives.
In the post-peak world, the only way to keep oil prices as low as possible is to invest heavily in biofuels. The price of crude can only rise as high as the price of biocrude.
High arctic oil development will be haphazard and not fairly because some nation-states do not wish to play by thet rules of fairly dvvying up the jurisdictional boundaries where geographic spaces underwater are consigned to united nations agreed upon law that states that drilling must procees vertically downward toward the earth's centre and not at an angle into one's neighbour's geographic boundaries stealing some of the neighbour's oil reserves without agreeing with the neighbour on what to do about fairly sharing the reserver brought up if if infringes on one's neighbour's boundaries, say: if the reserve if partly midway in both neighbour's geographic spaces, say it might be conceivably in the boundary lines of two or even three or more neighbours. But think not that this will be settled fairly as nation-states are, in general,impatient and wish for market entrepreneurial development as fast as possible before another neighbour jumps in and and gets a piece of the action, albeit if one is removing a discovered oil reserve before the United Nations with its dillying and dallying and dipomatic niceties get around to impractically not keeping in mind the fact that a direct settlment is required fast as starting to draw on a reserve in several or more neighbours' backyards can be taken out and kept as possession is nine tenths of the law or something like that is that not the case?
Reply | Report Abuse | Link to thisIf a precedent has not been established yet for a newly discovered prospect of oil well reserve of unknown extent underground and under arctic ocean in disputed not yet clarified what will be the jurisdictional boundaries to be fairly established, in the United Nations settlement of mutually agreed boundaries, then siphoning off oil will occur and by the moment that fair settlement has been mutually agreed upon the oil has already been taken out by the well equipped nations and the other nation-states are left with dribs and drabs of little or no consequence all just because nation-states do not wish to play fair ball according to the rules of the united nations organization already pro-actively drawing up the fair mapped out boundaries and then putting in place a policing system of punishing with stiff monetary fines wrongdoer nations. Do you think that the united nations organization would get its act together? and in the united nations assembly come up with universally drawn up agreement applying to all high arctic nation-states in close probably overlapping boundaries of consignable geographic space set aside for peaceful use by nation states?