Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

01 January 2019

Why Natural-Gas and Electric Cars are Vital for our National Security


[For a New Year’s Day update/endnote, click here. For the source of Facebook’s discontents and how to save democracy from it, click here. For Democrats’ core values, click here. The Last Adult is Leaving the White House. Who will Shut Off the Lights? For how our two parties lost their souls, click here. For the dire portent of Putin’s high-fiving the Saudi Crown Prince, click here. For updated advice on how to drive on the Sun’s power alone, or without fossil fuels, click here. For a 2018 Thanksgiving Message, click here. For a list of links to recent posts in reverse chronological order, click here.]

The most salient fact about oil, aka “crude oil” or “petroleum,” is that it’s running out. It’s not running out in some great bye and bye. It’s not even running out on the same extended time scale as the horrendous global warming caused by burning it and other fossil fuels, namely, most of our newish twenty-first century. Instead, it’s almost certain to run out—at least to the extent of causing cataclysmic global economic and social disruption—before children born this year reach retirement age, even early retirement.

According to our own “official” Energy Information Administration, “the global supply of crude oil, other liquid hydrocarbons, and biofuels is expected to be adequate to meet the world’s demand for liquid fuels through 2050.” That’s bureaucrat-speak for “we don’t think oil will run out before 2050.” But 2050 is now only 31 years away.

My own, independent calculations, made in 2013, were a little more optimistic. Depending on how much the Saudis and other OPEC members have fudged their reserve numbers, I calculated that global oil supplies would last between 18 and 43 years from then, or between 13 and 38 years from now, five years later.

The EIA’s own “comfort number” of 31 years is well within that range. But what if it’s 20% high? That 20% amounts to six years, so we would have just 25 years, a bit more than a single generation, to convert wholesale to substitutes for oil. We would have to do more than just find them; we’d have to put them into widespread, day-to-day use.

The EIA’s summary assessment cautiously notes “substantial uncertainty about the levels of future liquid fuels supply and demand.” It also observes that “[o]ver time, global reserves will likely increase as new technologies increase production at existing fields and as new projects are developed.”

Unfortunately, neither uncertainty nor new technologies offer the United States or its democratic allies hope for significant extension of oil’s runout deadline. The reason is that those nations collectively control only a small share of known global oil reserves. In my own calculation, for example, assuming that OPEC‘s estimates of non-OPEC reserves were 50% low—a huge upward correction—only extended the calculated oil-runout time by six years out of 37, or 16%. So maybe, instead of the EIA’s 31 years, we have as many as 37.

To see this timeline in perspective, consider the Chevy Volt. GM announced plans to produce the car in volume over ten years ago, and I rashly promised to buy one. A decade of dithering and three generations of improvements later, I leased one last fall. Only after those improvements was the car, in my view, ready to meet the needs of the vast majority of non-business drivers in America.

So chalk up at least a decade to developing a single good product that could help us make the transition from oil to other sources of energy for transportation. What about changing our entire energy infrastructure, as Germany is valiantly trying to do with its Energiewende? Hadn’t we better get to work?

It gets worse. The Russians have a strategy for world economic domination, aka “becoming a major global power” again. It doesn’t involve their world-destroying arsenal of nuclear weapons (except as a deterrent) because we have them, too. It does involve cornering a large fraction of the world’s remaining oil reserves to use as economic and political levers.

There are several online lists of oil reserves by country (see this one from 2016 by the CIA, this one from OPEC, and this one by Wikipedia), one of which overstates the reserves a thousand-fold. But if you use the correct numbers, you rapidly conclude that Russia and petro-states now under Russian domination, or at least heavy Russian influence, already account for significant fractions of global oil reserves.

With the United States withdrawing from Syria and almost withdrawn from Iraq, Russia may soon claim hegemony over both Iran and Iraq. Together, the three nations by themselves account for about 23% of global oil reserves. With the US becoming more estranged from Venezuela every day, and Russia having bought almost half of Venezuela’s national oil company and making diplomatic overtures and big loans, Russia might soon control about half of Venezuela’s oil reserves of 300.9 billion barrels—the largest reserve of any single nation. In that case the Russian bloc’s share of global oil reserves would jump to just under one-third. If Russia could extend its regional dominance further to Libya and the UAR, its bloc would control 41% of global oil reserves.

All this makes clear the cynical and practical reason for our morally disgraceful pussyfooting around Saudi Arabia’s thug-in-chief, Crown Prince Mohammed bin Salman. If Saudi Arabia forsakes American arms for Russian ones, which it can easily afford, it, too, may fall under Russian hegemony. Adding its oil reserves—second only to Venezuela’s—to the Russian bloc’s would bring the bloc’s share to 56.9% of the entire world’s.

In the bad old days, long before fracking, the mostly Middle-Eastern nations that now comprise OPEC dominated global oil production. By themselves, and for entirely political reasons, they were able to make global oil prices surge, followed by interest rates as high as 18%, for several years during the 1970s. The right blamed the resulting “stagflation” on Jimmy Carter. But as I show graphically in another essay, the real reason was the so-called Second Arab Oil Embargo, in which OPEC tried to use its oil cartel as a political weapon.

Fortunately, the hangover from that embargo didn’t last long. Soon North Sea oil came on line, the US began to learn to conserve, and Japan used high-mileage cars as a means of penetrating the US car market. No doubt US diplomats, in private, also leaned hard on the Saudis, giving them the choice of having the world’s sole superpower (and its arms) on their side, or of making a powerful enemy. The Saudis and other Arabs also learned economics and so how to milk the cow of global commerce without killing it.

Under the resulting pressure and awakening, the Saudis apparently decided to become our “friend.” We accepted them as such despite their supporting Wahhabi extremists and their Madrassas all over the Middle East and South Asia, which preached the gospel of jihad that underlay, and still underlies, the entire phenomenon of Sunni terrorism. Thus did our choice of “friends” lead directly to 9/11, the rise of Al Qaeda, and the creation of the Islamic State, not to mention the utter destruction of Syria and Yemen.

But a Russian-controlled and dominant oil cartel would be an entirely different animal from OPEC. Both individually and collectively, the small states that make up OPEC are militarily and economically weak. Not so Russia. If Russia decided to use its control over a dominant share of the world’s oil reserves, no military or economic suasion could change its mind. It could do to the free world’s economy what it briefly did to Europe’s natural-gas supply when it wanted to curb Ukraine’s independent-minded democratic government, incidentally wounding Europe’s economy.

We can’t resolve or avoid these problems by force. We don’t want to trigger Armageddon with the Russians. Nor do we want to start another world war. As the disastrous waste of our blood and treasure in Afghanistan and Iraq teach us, the limited force we can apply with the grudging consent of our people (and without inciting nuclear war) simply won’t work against a global and nuclear power like Russia.

So as a nation, we are left with three clear choices. We can use diplomacy to coddle and kow-tow to the Saudis—a brutal, medieval monarchy trying to dominate the twenty-first century using the oil under its sands as a weapon. We can revive “gunboat diplomacy” and imitate the Russians in our own hemisphere, essentially taking over Venezuela and thereby giving up any pretense of morality or leading by example. (The Russians already may have put this ploy in check by buying up half of Venezuela’s reserves.) Or we can turn to our own abundant supply of fracked natural-gas (in the short term) and electricity (in the longer term), as substitutes for oil in by far its dominant use: transportation.

It’s not hard to see which of these three options is less risky and more assured of success. We could follow Germany into our own Energiewende, converting our cars and trucks to run on other sources of energy than oil, first natural gas and later electricity. In so doing we could probably join forces with Australia, Britain, China, Canada, Europe (the whole EU), Japan, New Zealand and South Africa—all of which, together with us, command a grand share of 15% of the world’s proven oil reserves.

We can do this with known technology. We don’t need to invent nuclear fusion in a bottle, to perfect liquid fluoride thorium reactors, or to perform some technological miracle. All we need is the political will and the smarts to make the conversion with known technology.

The alternatives are to debase ourselves before thugs or to engage in many more “forever” wars over resources, like those from which President Trump has just decided to extricate us, to our military brass’ chagrin. It goes without saying that President Trump’s desire to leave our Middle East wars is in stark contradiction to his repeated insistence that oil in particular and fossil fuels in general are our national energy future.

New Year’s Day Update/Endnote: There’s another good reason why natural-gas and electric cars are shrewd investments in national security. During our new twenty-first century, warfare may take entirely new forms. Those new forms might include conflicts among major powers, which nuclear deterrents have effectively precluded for seventy years. Among the new forms of warfare that could circumvent the nuclear deterrent would be cyber-warfare and cyber-sabotage, which could wreak economic and social havoc without (directly) killing people or even permanently destroying property or infrastructure.

In these more subtle forms of warfare, oil-based transportation energy systems would be far more vulnerable to attack than natural-gas or electric systems, simply because oil infrastructure is more centralized. Oil requires refining for use in transportation, while natural gas and electricity do not. So oil refineries and the major pipelines that bring crude to them constitute convenient “choke points” for attack. In comparison, natural gas and electricity are and can be far more decentralized and therefore harder to attack.

Imagine, for example, trying to degrade transportation in a community or region by cyber-sabotaging a system in which every neighborhood or even every home had its own gas-fracking wells, windmills or solar arrays, supplying energy for cars locally. In a century of cyber-attacks, distributed and independently operated energy systems would provide the most robust form of civil defense.

Footnote 1: The thousand-fold quantitative errors in this post are so bizarre and obvious that one wonders whether it constitutes yet another piece of Russian disinformation, designed to induce Americans to think “We have millennia worth of oil in the ground, so let’s not worry about who controls it.”

Footnote 2: I calculated all the share numbers in this essay from the CIA’s exhaustive 2016 list of proven oil reserves by country. Although the numbers are two years out of date, the end-of-2017 numbers wouldn’t substantially change the results. For example, the United States’ year-end reserves for 2017, namely 39.2 billion barrels, exceed the CIA’s 2016 tally of 36.52 billion barrels by only 2.68 billion barrels, or 0.16% of the global total for 2016.

Footnote 3: A simple graph from the EIA shows that fuels for transportation and heavy equipment—gasoline, jet fuel, and the portion of distillate fuel oil used for diesel and not heating account for about two-thirds of crude oil use in the United States. (See also this more detailed accounting.) Chemical feedstocks, industrial gases and fluids, and other space-heating products account for the rest.

Footnote 4: According to the CIA’s talley, China, which has 20% of the world’s population, has oil resources of only 25.62 billion barrels, or 1.5% of the global total for 2016, namely, 1,658.6 billion barrels. That gives China a strong incentive to use alternative technologies, even stronger than ours. Without alternatives, China’s economy will be at the mercy of OPEC, the Russian bloc and any other oil cartel that might arise in the future.

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