Wednesday, June 22, 2011

Point, Counterpoint: Industrial Energy Consumption

A very succinct evaluation of today's energy policy comes from the Council of Industrial Boiler Owners. While some good points are made here, there's also a gap in the logic. My comments are below this quote:

"One of the goals/objectives of the Obama Administration has been to delink fossil energy from Gross Domestic Product (GDP). So far it looks like they have been pretty good at it. The only thing we hear in the news is usually about good renewable energy, energy efficiency, and how these will create new jobs requiring new and different education/knowledge. We never hear about the increasing cost of energy associated with the new technologies, but hear the negatives associated with and fossil energy product, dirty coal, high priced oil, the potential damages from drilling for Marcellus Shale Gas, and the food and timber for fuel with pre-fossil biofuels. All the current activity regarding energy legislation, funding and DOE tends to revolve around buildings and commercial activities, lighting technology, smart grid, and doubling the Auto Mileage Standards to name a few. When they talk about energy efficiency, they do their absolute best to stay way away from any consideration of Combined Heat and Power, probably the single best technology for maximizing efficiency, albeit, through the use of fossil fuel combustion. What we will probably see is legislation on efficiency for everything but industrial energy. However, nothing may happen. There is current controversy over a natural gas subsidy bill that will provide subsidies to Natural Gas companies for developing the infrastructure to use natural gas as a transport fuel to increase demand and increase the cost to industry who use it for both fuel and feedstock. One thing for sure, as the cost of energy increases, the prospect for energy efficiency applications improves. The old adage comes to mind, 'Follow the Money.' It is interesting to watch the dynamic of how the players and rent seekers are moving to raise the cost of fossil energy to levels where renewables are now justifiable and fossil energy is eventually delinked from the GDP."

This commentary suggests that we should resist alternative energy development because it's making traditional fossil fuels more expensive. If you believe that fossil fuel supplies are limitless, you can ignore this entire discussion. If not, we need to think about where energy will come from after the fossil fuel tap runs dry. A policy of continued reliance on fossil fuels is like the drunkard's cure for a hangover: just keep on drinking. Increased dependence on fossil fuels is a formula for energy starvation. People in some countries understand this; as fossil fuel supplies are depleted, successful economies will be those that prepare themselves by make increasing use of renewable alternatives. But it won't happen over night. To ease the transition, we will make increasingly-efficient use of traditional fuels. Efficient (less wasteful) capacity also reduces the magnitude of capital investment needed for energy systems. That frees up capital for investment in other areas of the economy.



At 11:17 AM, Blogger Sid Abma said...

Hi Christopher
Leaving comments here is not easy.


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