Friday, April 28, 2006

'Alternative' energy sources are not viable

Stop subsidizing nonsense projects and let the market work

by StFerdIII

No war for oil! Too bad. I wish there was and more of it in fact. Owning and controlling oil is necessary. It is akin to owning and controlling your own money. Would you want fascists, or pagans controlling your bank account? Or any resource that is necessary for living? But our foreign policy allows this. Insane. And how about those crying tree huggers? The media and left wing scream in pain while waving globaloney warming protocols in the air demanding that we ‘must’, as a duty to our grandchildren and in obedience to the mother earth pagan cult, replace oil with something or other. They are pretty vague about the something-or-other that will fill up their SUV tomorrow or heat their homes. But the solution they smugly assure us is of course in more big government programs, more regulation of energy intensive industries, more taxes on fuel, and massive subsidies for everything from car batteries, to wind power, to solar power, to corn based gasoline fuels. Billions have been wasted on such programs and pay-offs, and outside of Hollywood exactly zero people are lining up to buy alternative fueled cars. These subsidies have been nothing less than political patronage, political buy-offs and a cheap way to buy the green vote. They should be stopped immediately.

So the price of oil is $73 per barrel. Who cares. Let supply and demand work. If the scare-mongerers are right and oil will run out in 2 years, or 10 years, or 80 years or 5000 years or whatever the latest scare projection is than good. As supply dwindles, prices will rise, and oil firms will reinvest profits into other energy sources. As oil supplies tank then other innovative firms and entrepreneurs will step in with new, economical replacements that will allow the modern economy to keep on functioning. Sending subsidies to friends in the farming, agro-business, and Hollywood-friendly solar and wind industries might buy some votes, some political support and make the granola eating media shut up but it is bad economic and political policy. All these state managed support and ‘pick a winner’ programs do is destroy the pricing mechanism in the market. By destroying the pricing mechanism you distort the advent of invention, progress and new technology replacing old methods. It is not very bright.

One needs to ask a simple question - why should we replace oil? Contrary to media nonsense oil is clean, it is portable, it is easily refineable and it can be adapted to build a variety of products from kerosene to diesel fuel. Contrary to the claims of chicken-littles there is plenty of oil in the world – the problem for the West is that we don’t control enough of it. Oil is abundant, our society runs on it, and we need more it. One would assume for example that oil execs know better than anyone what the real level of supply is though that is probably debateable given the historical dimwittedness of oil exec forecasts. The current estimation is about 1 billion barrels of crude remains on the planet. But this is what they said in 1960 before massive projects were discovered. The current yearly burn rate of oil is about 90 billion barrels. So we have about 10 years left one would assume. But this is what the ‘experts’ said in 1980 and when that was proved wrong they repeated the same again in 1991 before the first Iraq war. You remember that war. It was supposed to result in such a decrease in oil supply that all western economies would immediately regress back to the dark ages. It is now 2006 and we are still waiting. The old ‘we only have 10 years left before oil runs out’ is getting very old indeed. Yet that seems to be the cry of choice. It has been proven wrong every year since 1920.

Technology makes the world go around and makes it a lot greener too. There is no comparison on any scale in cleanliness between the world of today vs. 1950 vs. 1850 vs. 1550. Our world today is incomparable cleaner. Wealth and technology makes for a greener world. If you don’t believe me take a tour of a post-fascist Soviet country. The mandate to stop creating wealth and modernity is now embedded in the earth goddess cult which now wails about globaloney warming. Thirty years ago they were of course crying about globaloney cooling. But no matter. Contrary to the globaloney warming activist claims, so-called ‘warming’ trends have more to do with natural cycles and distances from the sun than anything wrought by man. About 95% of greenhouse gas emissions [CO2 and methane] are caused by the natural biomass for instance. You could wipe out the entire human race, starting with the media and environmental ‘class’, and little would alter in the natural rhythm of temperature changes. But the chattering media and their big government friends have never been interested in reality. Better to create a crisis. Oil is the same. Let’s make up stories on collusion; excess profit taking; price-setting; oil depletion and mass extinction of species. The more disasters we can dream up the more government programs and political control can be enacted. Hooey.

Oil is the modern world. No other resource can equal the enormous impact oil has had on so many people, so rapidly, in so many ways, and in so many places around the world. Oil in its various refined derivative forms, such as gasoline, kerosene, and diesel fuel, has a unique combination of many desirable and useful characteristics. These include a current availability in abundance, a currently high net energy recovery, a high energy density, ease of transportation and storage, relative safety, and great versatility in end use. Oil is also useful as more than an energy source. It is the basis for the manufacture of petrochemical products including plastics, medicines, paints, and myriad other useful materials. Finally, the asphalt ‘bottoms’ from refineries have converted millions of miles of muddy trails around the world into paved highways on which transport vehicles fueled by oil run.

If alternative fuels arise to replace oil, then let the market work out which technologies, at which price points, and at what levels of supply. We don’t need smarmy politicians pouring billions into corn farms to buy the green vote, or screaming that oil is going to destroy mother earth. Message to the granola bar eating class: the world is in better shape now than ever. Our problem is that we are managed by hypocrites who should be rejoicing that gas is now $73 per barrel – instead of complaining that it cost too much to fill up their SUV. Without new refineries, the ability to drill and discover new oil supplies and without a masculine foreign policy to directly control our most precious resource, you will just have to grin and bear it sweetie. In the mean time stop throwing money at bad ideas.