by Robert Bryce
Though natural gas offers enormous near-term potential, our long-term energy plans must include nuclear—and before going further, let me be clear about where I stand on nuclear power: If you are anti–carbon dioxide and anti-nuclear, you are pro-blackout.
There is no other low- or no-carbon form of electricity generation that can provide relatively large amounts of new power generation at a relatively agreeable cost and do so relatively soon. And the key word in that sentence is “relatively.” There is no question that nuclear power will be expensive. It will also require substantial governmental involvement if it is to be safe and affordable. And though nuclear power has big up-front costs, particularly in comparison with several other forms of electricity generation, it also provides the essential always-on power that our society demands. It is the only existing source that offers a long-term, large-scale, zero-emissions alternative to coal- and natural-gas-fired power generation. Obama understands this—or at least he appears to. In an April 2009 speech in Prague, he said, “We must harness the power of nuclear energy on behalf of our efforts to combat climate change.”15
Despite Obama’s statement, and despite the ongoing political push for more low- or no-carbon forms of energy, environmental activists remain adamantly opposed to nuclear power generation. In 2005, some three hundred environmental groups—including Greenpeace, the Sierra Club, and Public Citizen—signed a manifesto that said, “We flatly reject the argument that increased investment in nuclear capacity is an acceptable or necessary solution.... Nuclear power should not be a part of any solution to address global warming.”16
That position ignores nuclear power’s many benefits. Nuclear power not only has zero carbon-dioxide emissions, it also produces very small amounts of waste, requires little real estate, and provides large quantities of always-on power. It does, however, come with two significant drawbacks: Nuclear power plants are expensive, and they take years to build and put into operation. Thus, achieving a substantial increase in nuclear power production in the United States will take decades. In the meantime, natural gas provides the most attractive option.
Together, natural gas and nuclear are essential to the ongoing decarbonization of the world’s primary energy use, a trend that has been ongoing for about two hundred years. Decarbonization, the trend favoring fuels with lower carbon content, is occurring because energy consumers are always seeking cleaner, denser forms of energy that allow them to do work cleaner, faster, and more precisely. Embracing N2N offers a no-regrets energy policy that will lead to further decarbonization while providing multiple benefits to the United States and the rest of the world.
The structure of this book follows the basic outline contained in the title. In Part 1, I discuss our hunger for power, how much we use, where it comes from, and why our desire for power of all kinds continues to increase. I show that the deluge of criticism about how Americans “use too much energy” is off base, and I describe the sheer scale of our power consumption, explain why we use hydrocarbons such as coal, oil, and natural gas, and show why we’ll keep using them for a long time to come.
In Part 2, I debunk many of the myths that people believe about “green” energy by showing that renewables are not the solution to our environmental problems. I demonstrate that wind power is the electricity sector’s equivalent of the corn ethanol scam. Like ethanol, wind power is a subsidy-dependant juggernaut that is the antithesis of “green.” I show that wind power has not and likely will not make substantial cuts in carbon dioxide emissions, and I take a hard look at a country that—in theory, at least—is supposed to provide a model for the United States and other nations embarking on wind power: Denmark. I have some fun at the expense of T. Boone Pickens by exposing the false claims contained in “Pickens Plan,” and I show why the hype over ideas such as carbon capture and sequestration, cellulosic ethanol, and electric cars is just that—hype.
In Part 3, I demonstrate why N2N makes so much sense. I look at the megatrends that favor natural gas and nuclear, provide a brief history of the U.S. gas business, and explain how the U.S. natural gas industry has unlocked galaxies of methane from rocks that were once thought to be impossible to tap. I also explore the technologies that could enable us to address the problem of nuclear waste and those that could help us to revive the U.S. nuclear sector.
That’s the outline. But before going further, let me add one other important point about my perspective in this book: There’s no political agenda at work here. I am neither Republican nor Democrat. I’m a charter member of the Disgusted Party, a raging centrist, and a recovering liberal. My energy policy is simple: I’m in favor of air conditioning and cold beer. My motivation for writing this book comes from a desire to break through the energy happy-talk so that the United States can have a serious discussion about its future. Energy realities are not dictated by the ideologies of the Left or the Right. They are determined by the laws of physics and the brutal realities of big numbers.
In one of the best-selling business books of all time, Good to Great: Why Some Companies Make the Leap ... and Others Don’t, author Jim Collins explained the factors that separate great companies from the also-rans. Among the most essential was that companies that do well confront the brutal facts.17 In a section called “Facts Are Better Than Dreams,” Collins said that successful organizations had a rigorous process of disciplined thought. While making strategic decisions, smart companies “infused the entire process with the brutal facts of reality.”18
We must confront the brutal facts about energy. But as we do so, there’s plenty of reason for optimism. If we are smart, we face a bright future; that future need not be one of energy shortages and energy crises, but instead can be one of energy abundance. The key words in that last sentence are “if we are smart.” And that’s the challenge. Over the past few years, American voters have been bombarded with nonsense about energy, and much of that nonsense has been embraced. One reason the American public has believed the nonsense is that many of us are woefully ignorant about science and math. Add in a dollop of guilt and a few drams of fear, and it becomes apparent why the United States is in such a quandary.
But first things first. Before we can debunk the nonsense, we must understand the difference between energy and power.
PART I
OUR QUEST FOR POWER
CHAPTER 1
Power Tripping 101
WE DON’T GIVE A DAMN about energy. What we want is power.
Differentiating between the two is essential. Here’s the simplest way to do so: Energy is the ability to do work; power is the rate at which work gets done.1 The more power we have, the quicker the work gets done. And in our speed-obsessed world, we are constantly finding ways to use more power—from a handful of electrons racing through the thinnerthan-a-human-hair circuits of a microprocessor to the vast quantities of thrust developed by the jet turbines on a Paris-bound 767.
We don’t care what energy is. We want what energy does. We would gladly fill our fuel tanks with jelly beans, marbles, or Hostess Twinkies if they could deliver the power needed to propel our Camrys and Suburbans to places like Wasilla or Waxahachie. We aren’t after energy, we are after what energy provides. And what energy provides is power. We use energy to make power. We convert energy—measured in barrels of oil, tons of coal, and cubic feet of gas—into power, which we tabulate in watts or horsepower.
Much, if not all, of human history can be seen as the pursuit of increasing amounts of power. Whether it’s the Egyptians and the Mesoamericans coordinating and harnessing hordes of human muscle to build the pyramids, the use of horses in warfare, Hannibal’s use of elephants to cross the Alps in 218 B.C., the first use of steam to drive a piston, the gallop of General George Patton’s tanks across France in the summer of 1944, or the Saturn V rockets (which produced 160 million horsepower, or 120 gigawatts) that catapulted American astronauts to the Moon, there has been a consistent, millennia-long effort to find and utilize more power.2
Power al
lows us to do things that make us happy, wealthy, and comfortable. Power gets us up in the air and down the road. Power fetches the e-mail, makes the coffee, and bakes the cake. Power allows us to cut the grass, roast the turkey, cool the beer, fly to Rome, and, of course, keep the lights on. While those facts may seem self-evident, here’s the essential truth about our power-driven world: The overwhelming majority of the power we use comes from hydrocarbons because they can provide us with the reliable and abundant power that we desire.
Today, 90 percent of the horsepower we use (or, if you prefer, 9 out of every 10 watts) comes from the burning of oil, natural gas, and coal.3 And the key attribute of hydrocarbons is their reliability. Renewable energy is dandy, but it simply cannot provide the gargantuan quantities of always-available power that we demand at prices we can afford. The production of electricity from the wind and the sun will continue growing rapidly in the years ahead. But those sources are incurably intermittent. As Stewart Brand, the environmental activist and creator of the Whole Earth Catalog, put it during a lecture in mid-2009, “wind and solar can’t help because we don’t have a way to store that energy.”4 Given our inability to store the energy that comes from wind and solar, those sources will remain bit players in our overall energy mix for the foreseeable future.
After two decades of studying the energy business, I believe those points about energy and power are self-evident. They are not based on ideology; instead, they are grounded in basic physics and basic math. I’m not opposed to environmental protection. Far from it: I’m a birdwatcher and a beekeeper. But now that I’ve reached middle age, I’ve finally learned how to use a calculator. Using that device—as well as a bunch of Excel spreadsheets and basic textbooks on physics—has forced me to become a realist on energy issues. And therein lies my frustration: As I’ve become more pragmatic, our public discourse about energy and energy policy has gone the other way. Discussions about energy matters—which are usually accompanied by arguments about climate change—have devolved into a vitriolic, divisive mess where facts and reasoned argument are largely ignored. In their place we hear vituperative attacks on the “deniers,” adolescent arguments about whose fault it is or isn’t that the climate is changing, and outlandish claims about the speed with which the United States can (or should) transform its multitrillion-dollar energy and power delivery systems into “greener” ones. Scientists, journalists, and analysts who dare question the apocalyptic predictions of the global warming alarmists are likely to feel the electronic wrath of bloggers such as Joe Romm, the self-appointed Savonarola of the Al Gore acolytes.5
Since September 11, 2001, the United States and the rest of the Western world has been inundated with claims that we should radically change our energy (and power) diet, and do so immediately. We’re told that we should abandon our existing systems for something new, something that’s low-carbon, solar-powered, wind-powered, or, better yet, powered by the energy sector’s single most desired element: unobtanium.
It doesn’t seem to matter where the new power will come from as much as it does that we all agree that moving to something else—anything else—is a really good idea. We must, we’re told, make a hurried energy transition, because:• The United States should be “energy independent.” Doing so will free us from the vagaries of the world energy market and increase employment here in America.
• We can no longer rely on oil from the Middle East. The suppliers in the region—and Saudi Arabia, in particular—are not our friends. And the Second Iraq War provides further evidence of our unhealthy obsession with the region.
• Cutting oil use will reduce terrorism. This is a favorite claim of neoconservative politicos such as former CIA director James Woolsey and his fellow traveler Frank Gaffney, the head of the Center for Security Policy, a right-wing think tank based in Washington, D.C. In January 2007, Gaffney declared that “some of the hundreds of billions of dollars we transfer each year to various petroleumexporting nations wind up in the hands of terrorists. This is not simply an addiction. It is a death wish.”6
• Hydrocarbons are bad. Using them, says one Sierra Club official, is “fossil fuelish.”7 If we don’t kick the hydrocarbon habit, we’re told, disastrous climate change will result. Burning coal, oil, and natural gas releases carbon dioxide, which causes global warming. Therefore, hydrocarbons must be replaced with something else, or we will all burn in hell, or something just like it.
• We must quit using oil because we are running out of it. The world will soon reach—or has already passed—its ability to produce increasing amounts of petroleum. This peak in oil production presages a global economic meltdown because we have no substitutes for oil.
These claims seem plausible, and in some cases, they are being put forward by credible people. But they are largely based on faulty assumptions. The promoters of these arguments have gained traction in recent years because the overwhelming majority of the American public simply isn’t equipped with the facts. The arguments are often designed as flag-waving, emotional appeals that are accompanied by a big dose of fear, and as a consequence the U.S. public has been primed to believe that an overhaul of our energy system is not only essential, it’s patriotic and spiritually righteous, it’s good business, and it will once and for all cure the problems of halitosis and premature baldness.
Here’s the reality: Whether the issue is oil imports, carbon dioxide emissions, or a peak in global petroleum production, we live in an increasingly interdependent world.8 With regard to oil and imports, the promoters of energy autarky ignore a myriad of inconvenient truths. Among them: During the first six months of 2009, the United States exported—yes, exported—an average of 1.9 million barrels of oil per day.9 At that level, U.S. oil exports are on par with countries such as Angola and Venezuela.10 Of course, the vast majority of those exports are refined products, not crude. Why has the United States become a major player in the international oil market for refined products? Because U.S. refineries are among the best in the world, and they can produce the types of fuels the global market demands. Thus, the United States, the world’s biggest importer of oil, is also one of its biggest exporters, and it has been a major exporter for years. So here’s a tip: The next time you hear somebody promoting “energy independence,” grab your wallet. Whatever they are proposing to achieve that delusional goal will surely cost you money.
As for terrorism, the very nature of the global oil market—the biggest, most integrated, most transparent market ever created—undermines the claim that using less oil will somehow result in a reduction in the tactics of terror. Although it’s true that some petrostates have ties to terrorism—Iran being an obvious example—it’s just as true that Iran and other oil exporters cannot be isolated from the global oil market. Terrorism isn’t an ideology, it’s a tactic, a cheap tactic, and it doesn’t depend on petrodollars. In May 2009, the Rand Corporation, one of the oldest defensefocused think tanks in Washington, released a report concluding that America’s “reliance on imported oil is not by itself a major national security threat.” The report went on to debunk the claim that oil and terrorism are related, saying, “Terrorist attacks cost so little to perpetrate that attempting to curtail terrorist financing through measures affecting the oil market will not be effective.”11
Many people may be worried about peak oil, but those concerns frequently ignore the fundamentals of the marketplace. Prices and technology are always combining to unlock hydrocarbons that were once thought unreachable. Let’s look at just one month: September 2009. During that month alone, several companies announced major oil and gas finds. For instance, BP announced that its Tiber prospect in the Gulf of Mexico may hold more than 3 billion barrels of oil.12 That well was drilled in 4,100 feet of water to a depth of 35,000 feet.13 On September 11, the Spanish energy firm Repsol announced the biggest natural gas discovery in Venezuela’s history. The discovery, located in the Gulf of Venezuela in a water depth of about 200 feet, may contain 8 trillion cubic feet of gas, the energy e
quivalent of about 1.4 billion barrels of oil.14 Five days later, Anadarko Petroleum announced the Venus find offshore Sierra Leone, and the company said that the geology of offshore West Africa appears favorable for hydrocarbons along a line some 700 miles long that goes through Liberia, Cote d’Ivoire, and Ghana.15 In addition, Petrobras, the Brazilian national oil company, announced yet another major offshore discovery. This one involved a big pool of hydrocarbons underneath more than 7,000 feet of water in the Santos Basin, an area south of Rio de Janeiro.16
Just for grins, let’s suppose that Petrobras and the other big companies decided to suddenly stop looking for more oil. Even if that unlikely event occurred, the world still has about 1.25 trillion barrels of proved reserves waiting to be tapped. That’s a lot of petroleum—about forty-two years’ worth at current rates of production.17 Sure, the world will one day hit its peak in oil production—or perhaps that peak has already passed. Whatever the case, we will keep using oil for decades to come, and our consumption will rise or fall depending on the price. Commodities have always been rationed by price. Oil is a commodity, and as the price of that commodity increases, the rationing of oil will become more pronounced and we will be forced to use petroleum more efficiently.
Global climate change and carbon dioxide emissions are the causes du jour. There is a widespread belief that if the people of the world do not unite to drastically reduce their carbon dioxide output, then catastrophic climate change will occur. In fact, some environmental activists have decided that the optimum level of carbon dioxide in the global atmosphere should be 350 parts per million. (By late 2009, the concentration was about 390 parts per million.) On October 24, 2009, the supporters of the 350 parts per million target conducted more than 4,000 synchronized demonstrations around the world. Their aim: to build a “global community” to support the 350 ppm goal.18 The chairman of the Intergovernmental Panel on Climate Change, Rajendra Pachauri, has said he is “fully supportive” of the 350 ppm goal.19 In November 2009, former vice president Al Gore, appearing on the Late Show with David Letterman, declared that unless the people of the world took drastic action to curb carbon dioxide emissions, it could be “the end of civilization as we know it.”20