Energy Issues Today

Since I conceived this blog, I've surfed the internet quite a bit to get a feel for what is out there in the field. What I observed is pretty interesting and in some cases, shocking. What follows are some of these observations and my effort to help explain some energy issues:

1. There is great hunger out there for free, or cheap energy. This, in itself, is good, but the underlying tone and reasons for this hunger are a bit worrisome. Most believe that today's energy is outrageously expensive. This is true only in the light of comparing it to recent history. It is cheap compared to the 70's and dirt cheap compared to all of history prior to the petroleum era. Can you imagine what it would have cost to push a 2000 lb car 30 miles before oil? So much that it would be unthinkable for anyone other than a king to even consider it. And yet we can do it for approximately $2.50, less than half an hour's wages at minimum wage. Prior to oil, an ordinary person would have spent a substantial part of their day trying to provide basic energy for cooking, keeping warm and moving about. In fact, for the past century we have been treated to such cheap energy, we cannot imagine the relatively expensive energy of 99% of recorded history. And that cheap energy has created, and still creates, the prosperity we now enjoy. But ultimately prices are a function of their effect on supply and demand, and on this basis, current prices are actually about right. For more on why this is true, see my previous post on how much energey will cost.

2. There is a perception that energy prices are manipulated, or there is some conspiracy. This is true to the extent that everyone out there who owns or can generate energy will try to get the best price they can for it, just like for any other commodity. However, there are far too many suppliers out there for anyone to control the price. Energy is an internationally traded commodity and there are dozens of major oil companies out there, along with thousands of smaller suppliers. And, that is just for oil. Consider all the other potential sources from solar to nuclear to coal and you have hundreds of thousands of suppliers and billions of customers. Energy costs will fluctuate wildly, based on supply and demand and the nature of the short and long term markets discussed in a previous post, but no single entity is even remotely able to control the world price of energy.

3. Very few people out there have enough scientific or economics background to reasonably evaluate their options. While I've been on the fence previously about our educational system, this revelation is certainly an indictment of that system. There is so much snake oil out there and so little ability to evaluate it, I wonder how we can survive as a society. I see people out there claiming they can run your car on water. I see others talking about generating power with a turbine connected to the discharge of a pump ( a perpetual motion scheme, so outrageous the US Patent office rules out awarding patents for them). I see folks confidently talking about spending tens of thousands of dollars on solar panels, when a few thousand in insulation and efficiency improvements would produce the same result.

4. Most relate free energy to attractive economics. In reality, most energy is free at its source. Oil was created by natural forces and is free for taking by the owner. There is enough solar energy falling on 200 square miles of the earth's surface today to satsify all current demand. I could go on and on similarly for nuclear fuel, coal, wind, tidal, wave, geothermal. The cost for making it available for use is a function of who owns it and how expensive it is to gather it. An understanding of science and economics is needed to evaluate it and to effectively bring it to market.

I hope this raises understanding of our energy issues, or at least has you thinking about it. I believe our ability to continue to create prosperity depends on this understanding. To the extent we fail to come to grips with these issues, our standard of living will begin to decline.