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Two Additional Hurdles to Oil Independence: Fear of Inconveniences and Tax Aversion June 12, 2010

Posted by Michael Hoexter in Climate Policy, Energy Policy, Green Transport, Sustainable Thinking.
Tags: , , , ,

(Photo: Thomas Faivre-Duboz/Wikimedia Commons)

A couple weeks ago, I sketched out an Oil Independence Plan for the United States that was based on a combined move to more efficient uses of petroleum as well as a much more aggressive move to oil- (and natural gas-) independent infrastructure, than is currently proposed in existing legislation in the US Congress. [Since posting that plan, Craig Severance has written an equally ambitious and more detailed plan which can seen here.  I also didn’t reference Boone Pickens’ “Pickens Plan” which is an Oil Independence Plan that relies heavily on natural gas and tractor trailer trucks fueled by natural gas.]  The most immediate motivation for such a plan, which we should have embarked upon 35 years ago anyway, was of course the oil disaster in the Gulf as well as the muted and unambitious response to that disaster by the Obama Administration. [There are now rumors that Sen Jeff Merkley may be producing a plan to reduce oil demand in the US which will be announced shortly]

I asserted in that post among other things that planning was a critical missing element in our policy arsenal and that only a plan, and not the cap (cap and dividend, cap and trade) instruments under consideration, would bring the necessary resources to bear in a timely manner.  Not only has there been a failure to plan for the demise of oil as our primary transport fuel, there has been a fundamental failure to accept planning as part of the legitimate role of political leadership.

After outlining this plan in the same post, I identified 6 hurdles which President Obama or another future leader of such a plan to radically reduce our oil dependence would face.  Those hurdles are:

  1. Market Idealization vs. Planning
  2. Deficit Worries and Hysteria
  3. Balancing the Interests of Stakeholders/Mixture of Public and Private Enterprise
  4. Many Americans’ Love of Expansive Resource Use
  5. The Biofuels Distraction
  6. Corporate Funding of and Influence in Politics

Two additional hurdles occurred to me but I felt these deserved their own post.

Hurdle #7: Unwillingness to Accept Inconveniences (or the Prospect of Inconvenience)

This Las Vegas drive-thru wedding chapel is at one extreme of the love of convenience in consumer society. What in most countries and contexts is a lengthy and demanding process of vetting by and meeting with family and clergy is here simply a trip around a driveway without having to get out of your own personal vehicle. The " March of Convenience" tends to orient us towards a single purpose at one time rather than locate us in a web of social relationships and traditional practices with all the possibilities and constraints that that entails. (Photo: Norman Walsh)

The economic history of the last 100 years in developed nations might be called the “March of Convenience” as activities that used to take hours, like procuring and preparing food or traveling to a nearby city, now take minutes.  “Convenience” means the use of a device or the design of a way of life enables desires to be more easily fulfilled.  Fossil fuels have had a critical role in powering almost all of the conveniences that we enjoy, either directly in automobiles or indirectly via a partly fossil-energy powered electric grid.  Americans have led the way in the “March of Convenience”, adopting consumer devices on a mass scale more quickly than other countries, though in recent years we have lagged in many areas of consumer device adoption.

While Europeans, Japanese, and increasingly others in fast developing Asian countries, enjoy many conveniences that Americans do not (better public transportation for one), the American way of life is particularly dependent both on the automobile and the oil-powered delivery truck because of the structure of our towns and cities and the lack of oil-independent infrastructure.  Convenience in America, has come to be defined by easy use of the automobile for either long or short trips to stores, work, and entertainment. The hundred year old trend in real estate development towards sprawl has kept Americans in most locations almost entirely dependent on the automobile.  Additionally “just in time” supply of retail and wholesale goods has become a business practice that demands air freight or relatively energy-inefficient trucking transport for many locations that are not located on major rail lines.

The proposed Oil Independence plan as well as, in my estimation, the plan offered by Craig Severance, would involve a period of one to two decades (or longer) within which, for some trips, people might need to sacrifice some time or convenience in order to avoid using increasingly pricey and eventually scarce oil.  This might mean waiting for others in a carpool or Internet-brokered ride-share, or taking bus service or using a shared van.  It may take 25% or 50% more time to do certain tasks.  For some people, the isolation of their cars is far preferable to any contact with others, so the notion of sharing space with others will be considered a major inconvenience.  These people will, if they are able, pay a higher price for convenience, as the price of oil is bound to go up either via market forces or taxation or both.  Nevertheless, in time, those who prefer self-driven solitary transport and have middle to high income will be able to buy battery electric vehicles or plug-in hybrids.

On the other hand, there are tradeoffs other than cost which eventually may become incentives for others not to use a self-driven vehicle:  when one isn’t driving one can work, socialize or read using our increasingly multi-functional mobile communications devices and networks.  The provision of workable transportation alternatives is key to the success of any of these plans.   While some offer the hope of a “drop-in” solution for oil (a fully-realized battery electric vehicle infrastructure and fleet of tens of millions of BEVs) this is not likely to be scaled up in time to radically reduce our oil demand with no inconveniences.  Depending on increased or the same level of convenience is a liability for a serious plan to get off oil before both its depletion, before more deepwater environmental disasters, as well as to avoid climate tipping points.

There are aspects of an Oil Independence Plan that typically will attract more attention and therefore funding, those which usually offer an increase in convenience for many transport users.  A TGV or Shinkansen-class high speed rail network (>160mph average speed) (which is just one of the solutions in my and others’ Oil Independence Plans) represents a net increase in convenience over the status quo for most trips up to 500-600 miles.  On high speed rail with Internet access, one is offered a more luxurious ride than either in a self-driven vehicle or experiencing the inconveniences of air travel.  The less “sexy” 90 or 110 mph freight or passenger rail may be more difficult to “sell” because they do not in their design offer the promise of increased convenience over the status quo for those who are particularly devoted to automotive travel (where traffic isn’t a problem).

Another area where there is a fairly transition is where the charging or battery-swap infrastructure has been built for battery electric and plug-in hybrid vehicles.  These will represent at least an equal level of convenience to gasoline powered vehicles for most local trips, though the technology is not as mature as that for electric rail.

Perhaps more frightening to politicians and to anxious consumers is the mere prospect of change of any kind in the relatively pampered automotive lifestyle that we currently inhabit with gas at somewhere around $3.00/gallon.  The actual changes involved in an Oil Independence Plan will with time offer net benefits or at least a livable but more sustainable lifestyle but to those who are clinging to the “edge” or to office, any change seems frightening.  The attack campaigns by elements of the political Right, by incumbent industries, or others who base their appeals on fear are almost pre-programmed for efforts that even suggest that people should loosen their grip on the steering wheel.

Some of these fears might be premised on a fear of strangers, “other people” in general or class prejudices.  The automobile dominated lifestyle has enabled people to live in relative isolation from each other.  Becoming used to dealing with and coordinating movement with others may be a challenge for some.  . While the prospect of sharing rides or public transit is uncontroversial for some and almost a sign of personal virtue, at least in the way of advocacy, there are many, many Americans who are either horrified by this notion or would, when push comes to shove, resist having to enact these virtues rather than simply advocate them.

As with the other hurdles, leadership and planning are required to overcome this hurdle.  Planning is going to be required to provide Americans with alternatives to automobile travel, per expansion of mass transit, as well as funding more novel systems like internet ride sharing or automated pod-cars.  Higher gas prices, whether by market forces or by the imposition of taxes would drive the change faster but only a visionary and persuasive leader is going to be able to convince Americans to accept higher fuel taxes.  The offense and defense against inevitable attacks from the anxious and the defenders of the status quo is to engage consumers/citizens/businesses in an epic quest to change our way of life and put it on more sustainable basis.  The missing element is principled leadership in both speech and example which would ideally come from the President or another national leader.  As it currently stands, the Presidency of Barack Obama has not attempted to engage in such a quest; partial or half-hearted movements towards these goals would expose leaders to attack from those who cling fearfully to present satisfactions and our way of life as it stands.  The best defense in this case is offense and commitment to a better future.

Especially with a rise in the cost of fuel, businesses used to “just in time” delivery from distant suppliers may need to reconsider their business practices and inventory strategy.  Long-distance rail freight may not in the first years be able to reproduce the speed of long-distance tractor-trailer trucks which can choose the most direct routes between supplier and buyers.  For local delivery however, the transition to battery power is fairly easy for small and medium duty trucks with shorter ranges.

There are “Peak Oil” narratives, associated with figures like Richard Heinberg or James Howard Kunstler that based on an extreme version of this change in lifestyle, within which society becomes radically localized and many institutions collapse into a friendlier version of the world of “Mad Max”, the 1979 Australian film which portrayed a dystopian future. I don’t share the pessimism of some in the Peak Oil community but their arguments and warnings cannot be dismissed out of hand.  With the cautious and unimaginative leadership shown in the last month here in the US, the likelihood of social collapse or at least a radically downsized society (an outcome which some would find a positive development) is higher rather than lower after a peak in oil production.

The largely mythical notion of a painless transition between one industrial and energy-related way of life and the next holds out the notion for policy makers that they just need to wait for innovation to deliver a new technology that offers only benefits and no tradeoffs.  Economic historian Jeremy Greenwood chronicles how throughout the last two hundred years the acceptance of technologies that we consider to be superior happened over a period of decades in which there were struggles between interest groups and losses of economic benefits as well as gains from the new technologies.  The fantasy of a “drop-in” technological replacement for the internal combustion engine continues to make it difficult for leaders to face hard choices.

Hurdle #8:  Tax Aversion and the Retreat from an Ethic of Social Responsibility

The current "Tea Party" interpretation of the 1773 Boston Tea Party is that it was simply a rebellion against "too much" taxation. The more standard textbook interpretation has been that it was a rebellion about "taxation without representation". A more economic historical view was that it was an anti-monopoly rebellion by colonial merchants against the advantages conferred on the East India Tea Company by the British Crown ; the Tea Act of 1773 was actually a tea tax reduction that made the East India tea cheaper than the competition. (Image from John Gilmary Shea, 1886 Story of a Great Nation New York:Gay Brothers and Company)

Another hurdle to oil independence is tax aversion bordering on tax phobia.  While, in the previous list of hurdles, I underlined the importance of public finance of transport and energy infrastructure, I left open the possibility that deficit spending would be the primary means of financing this infrastructure.  I pointed this out only as a short-term fix during our current deep economic slump.  In better times, tax financing will be crucial to keeping deficits and inflation in check.  Taxes will need to rise on both the well-to-do and also the middle class as counseled by a growing group of economists that NY Times economic columnist David Leonhardt has grouped in his fictitious “Club Wagner”.  Of course tax rates have at times been too high in certain places and times and levied unfairly upon certain activities or groups but now is not one of those times for most tax brackets and taxable entities in the US.

Tax paying and voting are the two main pillars of what ordinary citizens can to do to express a sense of group or social responsibility, the idea that “we are in this together”.  Attacking tax-paying in general as an evil in itself, as has become common, is an almost direct attack on a spirit of national or group responsibility.  Excessively high taxes can stifle individual initiative but excessively low taxes can fray the ability of a society to meet large scale group challenges requiring government investment.  Unfortunately there is no generally agreed-upon economic model of how to set optimal tax rates that accommodates both of these concerns, so tax rates are raised and lowered according to changes in political fashion and power dynamics.

In addition to being a source of funding, the aversive effect of tax is also one of the stronger mechanisms we have to shape our own group behavior via the use of incentives and disincentives.  Pigovian, a.k.a. “sin” taxes, are means of limiting the use of resources or engaging in activities which are not illegal but are considered to have high social costs.  Many conservative economists prefer Pigovian taxes to income taxes under the rubric “tax what you don’t want”.   A significant carbon tax would be one of the most efficient means to limit carbon emissions and fuel taxes of sufficiently high levels curtail the use of various fuels.

To enact significant new Pigovian taxes, these too require a sense of social solidarity or at least a broad social agreement that some activity should be limited at some initial or ongoing monetary cost to society.  One of the key weapons we have in reducing oil consumption is to levy higher taxes on oil.  Ian Parry of Resources for the Future rightly points out that, like an upstream carbon tax, oil should be taxed at the well-head rather than downstream as a fuel tax.  While a upstream carbon tax is preferable as it would include oil, natural gas and coal for addressing GHG emissions, relative to a simple gasoline tax an oil tax has greater coverage as it also would start the search for alternatives to oil in industrial processes and home heating, which makes up 23% and 5% of oil demand respectively.

We have just gone through a 30 year period in the US within which income tax rates have been cut dramatically, particularly on the wealthiest Americans, justified with reference to the largely discredited theories of Arthur Laffer (that tax cuts increase government revenues via economic growth) as well as supply-side, “trickle-down” theories associated with highly influential “Reaganomics” associated with his first budget director David Stockman.  The accumulation of private wealth and therefore productive investment was thought to be smothered by the top level marginal tax rates of post-WWII America;  by allowing rich people to accumulate more wealth it was thought that more would be invested and the economy would grow. Progressive taxation (the taxation of the wealthiest at a higher rate than the less wealthy) and taxation in general have been treated as taboo and as damaging to the economy since the political triumph of Reaganism.  The raising of taxes even slightly became highly politicized as the ideal of a low-taxation, small government society has remained the implicit ideal for politicians in both political parties.  Despite the small government ideal, government has continued to grow though often in ways that are not the social welfare driven “Big Government” that the followers of Reagan have attempted to pillory.  Furthermore savings rates, one of the advertised benefits of lower taxes, have continued to plummet in the US.

The American economy has grown in this period of low taxation but these increases have come largely in the service sector and particularly in financial services.  Low taxation, in combination with a trade policy that undermines domestic production relative to other countries has led to super-consumption, massive increases in private and public debt, trade deficits, investment in and inflation of the value of real estate, and speculative excess in paper assets.  The economic booms of the 1990’s and the early 2000’s that low-tax advocates like to point out as benefits of reduced tax rates has come at the expense of manufacturing capacity, at least in the US.

While taxes are never popular, almost no one stands up now in favor of taxes, despite professed concern about deficits.  Every politician believes that if they were to be the one to raise taxes, they would lose the next election.  With some justification, American taxpayers under 65 feel that they don’t get much benefit from taxes, as there is no comprehensive universal social programs other than for elderly people.  The government spends money on an elaborate military, the world’s gendarme, which offers few direct benefits to Americans domestically.  American industrial and trade policy has allowed jobs to be off-shored, so the government has not exactly stood at the side of the American worker.  President Obama’s health reforms will not be tax-funded with the exception of the expansion of Medicaid, which again biases America’s social spending in favor of distinct disadvantaged groups rather than as a generalized universal principle of social solidarity.

Both the Pigovian side of  (oil and carbon) taxation as well as the revenue generation component are critical for a rapid reduction in oil demand.  An ambitious leader, I’m hoping President Obama, would have to tackle this by “reversing the ethical valence” of popular perceptions of tax-paying and thereby also some of its emotional valence.  To do this, he would need to discuss tax paying as an expression of social responsibility, social solidarity, and responsibility to the future, not merely as a subtraction of monetary funds from one’s perceived economic well-being. To date, the President has tended to reinforce the individualized ethical framework of the low-tax world-view by continual efforts to court those who believe only in individual private initiatives rather than social initiatives.  This “pragmatism” continues to undermine Americans’ fragile sense of social solidarity.

Eight hurdles: Too Many?

While six substantial hurdles was a lot, eight hurdles is even more.  Is it too much to ask of us, our government and President to meet this challenge?

In my mind, this is the matter of, as mentioned above, a “reality principle” that cannot be ignored, so hurdles must be overcome no matter how many of them exist.

However, the path is somewhat easier than my presentation of these as individual free-standing hurdles would suggest.  Many of these hurdles “stand in bunches” or can be surmounted if our leaders adopt a new stance.  Leaders attempting to push the US off its oil addiction need to invoke the following general principles, which in turn will allow these hurdles to be taken as groups:

  1. Re-affirm our sense of social solidarity and social responsibility
  2. Emphasize social and individual resilience over sensitivity to minor hardships like carbon or oil taxes, hassles of coordinating transportation with others over self-driven automobile centered transportation.
  3. Affirm the role of government as a tool for the realization of national ambitions and the necessary backstop for market failures

Within this context, many of the eight hurdles become easily surmountable if the “general case” has been made for these principles.

We can reduce our dependence on oil with sufficient coordinated effort.  With this effort will come a great sense of accomplishment in an era where it had been thought that this kind of challenge was no longer part of the American Dream.


The Deepwater Oil Spill Exposes a Persistent Failure to Plan and Failure to Lead May 16, 2010

Posted by Michael Hoexter in Climate Policy, Efficiency/Conservation, Energy Policy, Green Transport, Renewable Energy.
Tags: , , , , ,

The 1969 Santa Barbara Oil Spill catalyzed the environmental movement in the US and inspired some important legislation but did not lead policymakers to take the next step and start the long process of weaning the US from its oil dependency (Photo: Unknown)

President Obama is facing with the explosion of the Deepwater Horizon,  a “local” disaster that exposes a deeper, endemic crisis in US energy policy and the US economy as a whole.  As he has been in office for still just 16 months, Obama does not bear primary responsibility for this ongoing crisis but he has only recently, a couple weeks after the accident, publicly hinted at the “elephant in the room”:  the obvious connection between the undersea oil volcano and our equally obvious need to transition from using oil as our primary transport fuel.  Simple reference to the Kerry-Lieberman climate bill that encourages more offshore drilling does not constitute an answer to our oil dependence.

Unfortunately public rhetoric and policy discussions that hinge on the notion of a dependence on “foreign” oil play the role of a “shortstop” in keeping the discussion from going to the heart of the problem.  The idea that oil produced on American shores will somehow differentially serve American consumers overlooks the international nature of the oil business with total offshore oil reserves destined never to make much of a difference in the overall price and availability of oil.  Estimates put the total reserves of offshore oil in US waters at 18 billion barrels conventionally recoverable and an additional 58 billion barrels “technically recoverable”.   While this oil, if extracted, would just be sold on the world market, it equals the equivalent of 11 years of consumption for the US at our current oil consumption rate of 8 billion barrels/year.   Subtracting the huge costs of oil spill cleanups and damage, most of the economic benefit of offshore drilling would accrue to oil companies and secondarily to state and federal governments in harvesting royalties, however the latter are going to be left “holding the bag” for the really, really big costs.

To ground this discussion in reality for just a moment, the 2009 US DOE Transportation Energy Data Book attributes to the US 2% of the world’s oil reserves, 8% of production, and 24% of consumption while the rest of the non-OPEC world comes out just a little better at 29%, 48% and 67% respectively.  Conventional natural gas is not a much more promising energy source for the future with the US having 3% of the reserves, 18% of the production, and 21 % of the consumption.  In the US, transportation accounts for 70% of all petroleum use and 24% for industrial uses.  Consumption of petroleum for transportation in the US is 84% for road transportation with around 65% for cars and light trucks and 18% for medium and heavy trucks.  Airplanes use 9%, shipping 4.2%, and rail 2.0%.  Even if we consumed petroleum and natural gas in proportion to worldwide production, there are credible predictions that we are somewhere in the neighborhood of the worldwide peak in production whether today or in a decade’s time.  Even if there were two more decades until the peak and we looked away from oil’s climate and local pollution impacts, would it be justified for our generation to run through this exhaustible resource?

The ballooning US trade deficits are attributable in the last decade approximately 55-60% to outgoing payments for petroleum imports but with the 2008 price spike, oil’s proportion climbed to 65%.  With oil prices once again ascending the petroleum related component of the US trade deficit will continue to climb.  With the last US trade surplus in 1973, the total US trade deficit has since 2003 stayed in the range $500B to 800B per year.

Turning back to politics, the President, whether by his own inclination or badly counseled by his advisors, has since taking office had a tendency to let the issues be defined for him rather than shaping policy with original view of his own.  He has approached health care, financial reform, and climate and energy as though there was some pre-formed wisdom which he simply needs to allude to or tap into in order for the American people and Congress to understand.  Erring on the side of being too laid back, perhaps partaking of the Spirit of Aloha, has not always served him well:  to get health care across the line he had to shed the “cool customer” image to actually win the votes in Congress.

The apparent rationale for his laid-back approach to issues, so commentators say, comes from overlearning what is considered to be a mistake of the early Clinton White House.  Clinton’s hands-on approach to policy is supposed to have alienated Congress and doomed Clinton’s health care efforts.  Obama has taken the opposite tack and can claim at least passage of a health care bill, though it is not clear yet how positive an achievement this will be considered when it actually takes effect.

What is missing so far in the Obama Presidency is the President taking the role of educating and perhaps changing the public’s views on important issues, which have been heavily colored by a very strong and organized counter-reform messaging machine.  The President has shied away from using the “bully pulpit” and allows Congress, which is considered by the public at the moment to be corrupt and untrustworthy, to shape the terms of the debate.

With the approach to a climate and energy bill this year, post-health care, the President opened up with a tactic rather than with a strategic plan for energy.  His announcement in March that he would lift the ban on offshore drilling in parts of the Gulf and the East Coast was a means of gaining support from Republicans for the ever more amorphous climate and energy package which is currently in the Senate.  Meanwhile, with so many issues and concerns, it is safe to say that energy is not top-most on most people’s minds in the Great Recession.

But the President has so far treated this as a case of another industrial accident for which liability can be assigned to the owner or commissioner of the oil rig, BP.   President Obama has not even advanced to the rhetorical level of George Bush’s 2006 State of Union where Bush declared America “Addicted to Oil”, despite Bush, in action, being responsible for gutting the regulatory agencies that may have prevented the spill.  While nominally a more “liberal” President and not from the oil patch, Obama has not presented a tangible vision of a post-oil society and, in combination with his preferred policies and speeches, the public is left mired in the oil-dependent present.

Discussions about who is to blame, who will pay, and what can be done in the Gulf to recover from the spill are important but are ultimately distractions from the most important question:

What will the US do to wean itself from its oil dependency?

In media accounts, the effort to make this a conventional tale of corporate or regulatory malfeasance is becoming the favorite of supposedly hard-hitting television journalists.  Yet these interviewers avoid looking into the frightening “maw” of our economy’s fatal dependence on oil.  The President is also looking away, focused as he is on technical and regulatory “fixes” for the offshore drilling disaster.

The upcoming climate bill in the Senate is being sold as an effort to reduce our dependency on oil and other dirty fuels but it contains few aggressive provisions to get us there.  The just released details of the bill, indicate that it’s mild cap and dividend provisions may slightly raise oil prices (starting in the area of $.10-$.20/gallon and increasing by 3-5% over inflation per year).  And offshore drilling provisions are in the current draft, offered now as an opt-out for states that wish to keep the ban in place.   As a whole, the bill postpones until the 2020’s any serious moves to cut emissions and focuses on the implementation of coal carbon capture and storage rather than more promising renewable technologies and grid enhancements.  Ironically, Senator Kerry has mentioned on TV, as if this were a sign of his seriousness, that he had been working with the oil industry on this bill.

If we assume the best intentions of the President and the Congressional leadership, one single legislative session or bill cannot undo 30 years of negligence and foolish disregard in the area of energy.  Whatever his ultimate goals and political commitments as President, Obama, if he endeavored to “do the right thing”, would have a number of hurdles (described below) to overcome.  However right now, he, his Administration and his Congressional allies are managing just a few cosmetic moves in the direction of change. On the issue of oil use and oil dependence, the bill and the Administration’s efforts are weak.

I am proposing here a stronger response that deals directly with America’s oil dependency.

A Strategic Energy Plan for Oil-Independence and Carbon Mitigation

A serious effort to get off oil will involve an equal emphasis on battery electric and grid-tied or grid-optional large vehicles like this trolleybus. The de-electrification of public transportation, while greeted by some as progress, now appears to have been a big mistake. (Photo: Adrian Corcoran)

The only solution to our oil dependency and the inevitable disasters that come from a mad rush to extract as much oil as possible from the earth is to create a strategic national energy plan that addresses both our oil dependence and our climate concerns.  A plan is required because changes in the transportation and energy system involve the coordination and arrangement in a sequence of certain key activities and infrastructure changes, for which market mechanisms, the current “default” preference for policymakers of both Left and Right, are ill-equipped.  Such a plan would also be the occasion for leaders of government to show and exercise leadership rather than look around for a lucky break or well-meaning private actors and companies to step into the breach.  Turning to planning is unfortunately now in America a politically fraught move but there is simply no alternative, if we want to have a sustainable economy, whether in the narrow economic sense or the broader ecological sense.

A growing chorus of corporate leaders and former government officials is calling for an electrified, oil-independent transportation system for national defense reasons as well as environmental ones.  Recently Bill Ford, chairman of Ford Motor Company made the connection between national security and oil, indicating that Ford’s product roadmap will focus on electric drive vehicles in the future.  James Woolsey, former CIA chief under Clinton, has been a long-time advocate of electrification for reasons of national defense.

Other nations are rapidly moving away from oil through plan-based efforts by governments in coordination with the private sector, even as almost every other country is starting from a position of less oil-dependence than the US.  The Chinese leadership, as is well-known, is very concerned about the effects of oil shortages and prices on China’s economic development.  China is in the process of building an extensive high-speed rail network (to Europe too)and is as well working on developing a lead in the area of battery powered vehicles.  President Obama mentioned in a recent speech China’s ambitious rail program as an analogue to his efforts in the US but I believe he knows that there is no comparison between the scale of their efforts and our much modest ones.  Japan and Switzerland have almost entirely electrified rail networks and France has the goal of electrifying its entire rail network by 2025.  Russia, despite its plentiful oil reserves, has electrified the Trans-Siberian and Murmansk lines of its railways in the last 10 years.  Denmark, Japan, France, and Israel all are executing plans to build widespread electric vehicle charge and battery-swap infrastructure.  By contrast, US freight and passenger transportation in all modes is almost totally dependent upon oil, leaving the US vulnerable to political and geological disruptions of supply and price spikes (see Alan Drake’s proposal for a comprehensive electrified train system for the US).

Two Pronged Strategy:  Efficient Use and Oil-Independent Infrastructure

There are two prongs to getting off oil which also share a common path.  One prong is increasing the efficiency of oil use in the US via increasing the person or freight miles traveled per unit petroleum consumed.  The other prong is building an oil-independent transport infrastructure and oil-independent vehicles.  Investment in routes on the path common to both should be favored over those that commit us interminably to oil.

The dream of a quick-fix, a “drop-in” technological solution that will simply replace oil has proved to be elusive and has so far found little basis in the science of energy.  So the proposed solution has a number of parts and involves tradeoffs and some large initial costs.  However, the invitation is there to any readers to find a better, presently available solution and publicize it.

Efficient Use:

  1. Levying a gas tax or price stabilization tax that insures that drivers can plan on a minimum gas price going forward on an ascending schedule.  Instead or in addition, a carbon tax or fee would disincentivize coal use as well, though might be supplemented by a gas tax to reduce gas use. (the Kerry Lieberman bill’s cap and dividend provisions will raise gasoline prices imperceptibly in the first few years).
  2. Enable full use of existing passenger rail and bus transportation infrastructure via adequate funding to increase schedules, keep current fare levels.  Determine via market surveys and statistics optimal service levels for each route.
  3. Encourage shared ride and shared vehicle programs and services using Internet and mobile phone resources to coordinate and develop ride-sharing social networks
  4. Mandating idle-stop systems (a.k.a. “mild hybrid”) on all new trucks and cars as of 2013.  Comprehensive idling reduction program at all truck stops, including incentivizing “shore power” electric hookups and retrofit kits. Mandate Cold ironing facilities at all shipping berths by 2015.
  5. Incentivize Transit Oriented Development via federal incentives for zoning changes at the local government level and developer and homeowner tax incentives.

While focusing on efficient use alone seems “pragmatic”, it actually does not have nearly the appeal and long-term economic stimulative effect of building an infrastructure that moves passenger/driver miles and freight ton-miles off of oil permanently.  To focus on efficient use without building for the long-term is an incomplete strategy.

Oil-Independent, Carbon-Independent Infrastructure:

See Drake et. al. for a slightly different more detailed proposal

  1. Double or multi-tracking the US rail system on all but low traffic lines enabling consistent speeds of 110 mph on non-high speed lines for freight and passenger trains.
  2. Stepwise electrification of rail infrastructure to 100% electric traction.
  3. Building on an accelerated basis dedicated high speed rail lines per the US HSR Association’s recommendation: http://www.ushsr.com/hsrnetwork.html
  4. Electrification of 80% of government vehicle fleets using a variety of battery charging technologies including trickle charge, rapid-charge and battery exchange technologies.
  5. Extended tax incentives for corporate vehicle  fleet conversion to battery power or for plug-in hybrids.
  6. Rapid build-out of a super-grid supportive of renewable energy development throughout the US.
  7. A robust regime of incentives for renewable energy development (advanced feed in tariffs based on cost recovery plus reasonable profit with descending incentives for projects in later years).
  8. Electrification of high traffic bus routes via either trolleybuses or streetcars.
  9. Build out of light rail and regional rail networks to interconnect high and medium density cities and suburbs.
  10. Corporate tax credits for build-out of tele-presence (e.g. Cisco’s product here) technologies and to encourage tele-commuting and tele-meeting

While technologies could evolve in the future that might alter the relative proportions in the above plan, these policy proposals and programs rely on technologies that are available today, some of them with a track-record of over a century.  However, the goal of getting off oil, let alone fossil fuels has not been a priority of US industrial development and government policy, so our rail and transport networks have remained dependent on the happenstance of oil extraction and the oil markets.

Substantial and Insubstantial Hurdles that Delay Us

If our country does not first slide into a state of permanent second or third-class status, it is inevitable that we in the US will move to a post-oil, post-carbon transport system incorporating most of the largely electric-drive technologies listed above.  However this should not lull our current leadership into complacency or half-measures, because sliding into a state of decay and dependency is a distinct possibility.  Will Obama be the President to lead us there, as Eisenhower was the President who built the Interstates?  Or will he be the President who excited hope, talked a good game but gave too much discretion to fossil fuel interests? We can be the last nation in the world to wean ourselves off oil, massively in debt, and always be in the position of borrowing know-how from others or we can start to move “on our own power” towards a position of leadership in this area.

The current Senate climate bill sees most of what is proposed above as distant pipe dreams rather than near future realities.  Most of the electric vehicle provisions in it are termed “pilot programs” with greater favor shown to natural gas vehicles and mild oversight for unconventional natural gas extraction.  Public transportation and rails are given little or no mention.

Leadership will be required to push ahead to the solutions based on what is already known about the physics and technology of transport and energy, instead of stopping at the half-way measures or the dead-end technologies that depend on fossil fuels.  True leadership involves anticipating and overcoming hurdles.  I have listed below the main hurdles which present themselves to whomever, I hope President Obama, decides to place the American economy on a sustainable energy basis.

Hurdle #1:  Market Idealization (Market Fundamentalism) Vs. Planning

One of the greatest hurdles is the ongoing influence of market idealization (or “market fundamentalism“) in Washington in general, on both sides of the aisle in Congress and in the White House.  In the era of market idealization over the last 30 years, planning, especially government planning, got a bad name as markets were supposed to constitute all of economic life as well as being perfect and complete economic institutions.  Through his sojourn at the University of Chicago, one of the centers of market idealization, President Obama was exposed to an environment that celebrated a view of markets as self-sufficient, self-regulating institutions which perhaps continues to color his view of planning and government’s role.

The use of “cap” legislation, carbon pricing, or emissions targets does not substitute for planning because such unspecified “plans” to achieve quantities of emissions reductions cannot substitute for the sequence of timed and specified actions that constitute a plan.  Emissions caps or targets suggest that the market will find its way without planning.  In some areas this works better than planning but in transportation and energy infrastructure, not so much.

Some major problems with markets are that they don’t price in future risks or distant future rewards very well in many sectors, including energy and transport, and, when unregulated, tend to focus market participants on their most immediate concerns.  Markets also do not produce all the conditions for their own survival and continued profitability.  Governments have historically stepped in to provide people and markets with structure for transactions that threaten to undermine trust between market actors.  Additionally, governments of most nations with complex economies provide public goods like infrastructure that enable longer term social and economic goals of both private and public actors to be achieved.  While market-like institutions can be imposed upon the “natural” monopolies of the electricity and the rail businesses, these market reforms do not generally orient these businesses to rapidly change their infrastructure but rather focus them on squeezing value out of existing assets.

Planning can originate from private and non-profit actors as well as from government though this does not release governments from the duty to initiate or help structure plans that effect diverse sets of stakeholders.  The Desertec Initiative is an example of a large-scale international energy plan that has originated in the private and non-profit sectors.  The Desertec Foundation and the Desertec Industrial Initiative (DII) are working on building a renewable energy supergrid that spans Europe, North Africa and the Middle East in order to provide renewable electrical power to the area, balancing wind and solar resources across the region.  Munich Re, a large re-insurance company based in Germany, concerned about environmental and climate risk in the future and along with a consortium of electrical utilities and technology companies, including Siemens, ABB, Abengoa, MAN Solar Millennium has created the DII.  Whether the impulse to plan has come from the private sector or from government, government needs to be involved in making sure that large scale energy and transportation plans serve national interests and are executed and financed in a transparent and fair manner.

As market idealization has been also a particularly fervent form of anti-Communism, government involvement in planning has been associated in the minds of US politicians and sections of the public over the past 30 years with centrally-planned Communist economies.  Due to these still largely unchallenged views of market idealists, politicians making the argument for planning will need to run the political gauntlet of being accused of being a Communist (or, as is common in the precincts of the Tea Party and Fox News, a fascist).  Unfortunately, academic economists too have also been lax in making the case for government planning beyond Left-Right ideology.  Republicans and Democratic Presidents and other government officials between 1940 and 1980 did not generally have to justify their use of planning but since 1980, planners and planning advocates have needed to keep a low profile.

So presenting a full-on Oil-Independence Plan from the side of government would present the President with either having to make a two-stage argument (first for a role for planning and then for the plan) or to compress the two together in one artful package.  The latter is not inconceivable but, our President, so far, has shown more interest in pointing out how much he has in common with the Republican Party that has been almost completely captured by market idealists.

On the other hand, almost everybody in contemporary American politics is for energy independence and national defense.  It is not a stretch to imagine our centrist to right-leaning Democratic President reaching across the aisle to push for a “Oil Independence Transportation Plan”.  This would require preparation, research and political leadership by the President, the Administration and Congress but is eminently do-able.  Thus a brilliant and principled politician, maybe even our current President, could present this plan as a combined act of patriotism and long-term economic good sense.

Hurdle #2:  Deficit Worries and Hysteria

Given that we are in an economic downturn and tax revenues will not be able to be boosted substantially, a post-oil transport infrastructure built in a timely manner will probably involve deficit spending.  Some parts of this system can be built and financed privately and paid back via user fees while others will have the status of public goods, like roads, that will need to paid for via taxes and or potentially inflationary deficit spending, i.e. printing money.

We have been facing a rise in public debt and budget deficits over the course of the Bush administration and the first part of the Obama Administration.  The current level of the public debt stands at approximately 60% of its maximum in relationship to GDP at the end of WWII (108%).  Misinformed politicians, pundits, and financiers take this as an occasion to stir hysteria that is stoked by a combination of fabrications and partial truths about the potential impact of budget deficits on the American economy.   Economists, such as Paul Krugman, Dean Baker and Joe Stiglitz, who have studied economic history and effects of deficit spending on jumpstarting the economy, have attempted to correct these misguided views of deficit spending in the context of a severe economic downturn.

This graph of the "gross" and not the usually cited public debt (now at 67%) indicates that excluding the first year of the Obama Administration the last four Democratic Presidents reduced the gross federal debt while the last four Republican Presidents increased it relative to GDP. In general, economic depressions and wars tend to increase the federal budget deficit.

Deficit hysteria seems to have a strong political component to it, as these fears remained largely dormant in the Republican Administrations that have run up large debts in the past.  As a preventative, those who are opposed to a strong government role in the domestic economy (though generally not to military adventures) have attempted to intimidate the President and others by warning of runaway budget deficits.  There are now some more severe budget problems in other countries (Greece for instance) and the differences between the US situation and these countries are played down to intimidate those who would want to spend deficits on building US domestic economic growth.

While those who stir deficit hysteria tend to be closed-lipped about their large-scale political and economic agenda, they generally are opponents of all government-provided social services and government-led economic initiatives preferring to reserve these functions for private enterprise.  Deficit hysteria implies the idealization of markets, though is a more sophisticated variety that acknowledges that there is “some” role for government, only to minimize that role in every proposal, due to fear of budget deficits.  Unfortunately President Obama has some vulnerability to deficit hysteria, in that he has not come out vigorously in defense of government’s role in the domestic economy, preferring instead to adopt an attitude of compromise and conciliation with people who talk as if there is no legitimate role for government social programs or in the domestic economy.

While budget deficits need to be monitored closely, the US has luckily somewhat more flexibility than many other countries to engage in deficit spending.  A very strong case can be made that deficit spending to help finance a post-oil transportation infrastructure is a very good use of public funds and also shows nations that hold our debt that we are spending in ways that will improve our overall competitiveness and resilience as a nation.  Deficit spending in this way actually works to reduce our trade deficit which is in most years larger than our budget deficit and largely attributable to oil imports.

Hurdle #3:  Balancing the Interests of Stakeholders, Mix of Private and Public Enterprise

The French SNCF is a public benefit corporation that runs and owns the French trains and stations. In order to open up the rails to competition the rails and rights of way are owned by another government-owned company, the RFF, enabling, theoretically, private train companies to compete with SNCF on the same tracks. (Photo: Wikimedia Commons)

An Oil- and Carbon-Independence Plan will require the participation of a number of stakeholders some of whom will be less than enthusiastic participants in this ambitious effort.  The railways in the US are ambivalent about the ambitious plans of advocates for either high-speed rail or electrification.  Like other large infrastructure-dependent businesses, these usually risk-averse corporations make money by squeezing value out of their existing infrastructure and sticking to decades-long incremental capital investment strategies.  Additionally, and ironically, railways, our cleanest and most efficient means of transporting freight even with diesel traction, haul the dirtiest fuel, coal, to power plants of the large coal-burning utilities; the largest source of revenue for railways is coal transport accounting for 21% of 2007 revenue with intermodal (container) being the fastest growing segment.

Left to themselves, the US freight railways would not be able to undertake nor necessarily see it in their short or medium-term interest to electrify their railroads nor embark on a massive program of track build-out.  The railways are in favor of tax incentives to help them continue capital improvements but these alone will probably be not enough to double and triple track mileage. The railways own their own rights of way and are currently entirely self-funding and compete largely on price and capacity with other freight modalities.  In order for massive public investment to be possible, the railways would have to develop an entirely different relationship with the federal government.

If they were intent on executing a Post-Oil transport plan, policymakers would need to lead the railways into a new relationship or perhaps buy some of them out, in part or in full. The massive level of public investment required to enable the railways to carry triple the freight plus 20 to 30 times the passenger volume would transform their capital base with largely public funds or public guarantees to be able to undertake the risk.  Such action would require a combination of vision, leadership and negotiation skills from the side of government.

As diesel locomotion (actually diesel-electric) is still a very efficient method of hauling freight and passengers relative to other modes of transportation, the transition to an Oil-Independent infrastructure could be achieved in two stages:  first railway track build-outs that are electricity-ready and then the electrification of those railroads as a separate project.

An alternate route towards oil-independent transport is possible that “deals in” the trucking industry but requires the adaptation of several existing technologies and an alteration to the interstate system: Using hybrid dual-mode trolley long-distance trucks on dedicated lanes of the interstate that also have a backup generator or battery pack that enable easy on and off and grid-detached travel.  There are no technological breakthroughs required to do this but it needs the backing of a government or government-funded research program that seriously studies electrification of lanes of interstates and the high speed attachment and detachment of trolley poles or pantographs to overhead lines.

Designing and executing an Oil- and Carbon-Independence Transport and Energy Plan would also not necessarily inspire the other large conservative infrastructure-based companies, the power utilities, to join in the spirit of the enterprise.  Similarly to the freight railways, utilities wring value from a decades-old infrastructure and generally adopt change very slowly.  Particularly challenging for many US utilities is a transition away from coal which accounts for approximately 50% of electricity generated in the US.  Selling electricity to railways may be an additional source of revenue but also would involve new infrastructure and might require new generation, which would need to be low- or zero-carbon.  A portion of the electricity demand from railways may be supplied by federal power generation facilities, perhaps by a newly founded Railways Power Administration, modeled on the Western Area Power Administration or similar.  Passenger railway power demand would require daytime generation which would coincide with solar but freight would add to baseload demand as it would operate around the clock.

A clear expression of purpose and demonstration of intent by government leaders to reduce oil demand in the US is a prerequisite for successful negotiation with stakeholders in shaping the post-oil future.  So far the President and Congressional leaders haven’t shown the guts and independence of mind to work this out with industry stakeholders.

Hurdle #4:  Many Americans’ Love of Expansive Resource Use (and Disregarding the Consequences)

Different cultures tend to have differing attitudes towards the material world and what is considered attractive or desirable in the use of resources.  In Japan, with one of the world’s highest population densities, cultural preferences include a focus on small, sometimes intricate objects.  Traditional agriculture in China is highly space- and resource-efficient.  In Europe, culture has emerged from similar resource constraints, for which it is much admired throughout the world.  In the US, we have through a large portion of our early history, not had to deal with as many resource constraints, including a belief that more abundance is always around the next bend.  Europeans came here in search of “El Dorado” and we have had the tendency to believe in “Virgin Land”, either physically or virtually, into which we could move if we “messed up” or wanted to leave our original physical context.

President Jimmy Carter wore a cardigan in some TV addresses to show that he was practicing energy conservation during the winter at the White House. Even though he was presenting Americans with a prudent message, in hindsight with the triumph of Reaganism and reactive resource- and energy-profligacy, our image-obsessed culture has held onto Carter's slight awkwardness, school-teacherly manner and absence of swaggering machismo rather than the content of his message.

The electoral defeat of Jimmy Carter in 1980 by Ronald Reagan and the subsequent growth of a culture of reactive anti-environmentalism has impressed politicians with the dangers of appearing to “wear the cardigan” rather than use resources “like you just don’t care”, yielding a culture of reactive or revived profligacy.  Contrarian anti-environmentalism both on the Right and in the apolitical Center has meant a return for many to the energy and material use patterns with which Americans grew up until the 1973 OPEC Oil embargo.  Because of the political defeat of Carter (for a number of reasons), the 1985-2001 return of cheap oil, and the 2001-2009 Bush Presidency, few politicians have attempted to experiment with what is possible in the way of communicating a stance that counsels wise use of resources while retaining a sense of American identity.

Obviously, we will need leaders to set an example and attempt once again to join the American spirit with an awareness of the earth’s limits and wise use of resources.  Expansive plans to create a post-oil infrastructure can be combined with measures that suggest that the America of the future will not lay waste to the earth.  The ability to break up the cultural “forced choice” between abstemiousness versus expansiveness will involve creativity on the part of political and cultural leaders. Whether the Obama Administration is up to the task and has the will to engage in this vital transition to a new kind of American identity remains to be seen.

Hurdle #5:  The Biofuels Distraction

A few years ago, using biofuels as an oil substitute were treated seriously by some environmentalists and became a big favorite of politically powerful agricultural lobbies.  Since then, it has dawned on most of the environmental movement plus more and more policymakers that biofuels are a poor source of fuel and environmentally may be under many conditions worse than using oil.  The net energy yield, plus land use, plus water use put into making ethanol or biodiesel from dedicated crops rather than waste products turns out to be a net negative for the environment and economically disruptive for food production.  To produce mechanical energy from sunlight it is far more advantageous to erect solar panels or use wind turbines in agriculturally marginal areas, which would occupy far less space, have far lower environmental impact, and produce far more energy.

Unfortunately, in the American heartland, it is difficult, in the absence of renewable electricity policy that is attractive to farmers and higher prices for food crops, to turn away from support for biofuels and the overproduction of corn for that purpose.  While perhaps research may turn up a more sustainable biofuel, a strategy based on biomass production for biofuels other than as a subsidy to farmers is unjustified.  There may in the future be niche uses for some future biofuel process but these will not serve the vast energy demand currently served by oil. A gradual shift to a sustainable agriculture policy that addresses the economic concerns of farmers without continuing our unsustainable corn policy would be the long-term solution.

As an immediate strategy, the policymakers would need simply to slowly back away from biofuel subsidies, while a compelling and well-explained alternative for farmers and farm-belt politicians is developed.

Hurdle #6:  Corporate Funding of and Influence in American Politics

A recurrent theme throughout the last year and half of reform attempts has been the notable influence of incumbent industries and their lobbyists in influencing politicians in Washington of both parties.  While there are many corporations that stand to benefit from an Oil- and Carbon-Independence Plan, these have not yet made common cause and many see their short-term interest in the energy and transport status quo.

The likelihood of formulation and implementation of a plan with the longer term interests of the US in mind, would be greater with corporate money taken out of politics to a very large degree, as then lobbyists would more likely to be seen as advisors and industry representatives rather than represent the co-“employers” of legislators.  This is not to say that there aren’t politicians who bravely stand up now for the long-term view of what is best for the overall American economy.  It can only be hoped that more politicians show this type of courage on a number of policy fronts and, as well, in the service of campaign finance reform.

Are There Any Other Options?

Those who read these recommendations with a jaundiced eye may say:  “You expect too much from government” or “this will never happen”.

My response:  Short of the United States slumping into further energy dependency, accelerated trade deficits, inflation due to spiraling oil prices and accelerated climate change worldwide, what are the other options?

If you have another workable option please share it with me or, better yet, the Administration and the world.

Standing on the side of the fishermen and the wildlife of the Gulf is not an act of excessive and unrealistic belief in human goodness, an underestimation of our energy demand, or an exaggeration of the sensitivity of natural systems.  It is simply the recognition of the unwinding of a model of economic and energy development that has run its course.

Cap and Trade: A Tangled Web… A Project-Based Alternative – Part 4 November 5, 2009

Posted by Michael Hoexter in Efficiency/Conservation, Energy Policy, Green Transport, Renewable Energy.
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In the first two parts (part 1 and part 2) of this post, I discussed cap and trade as well-intentioned but a fundamental misapplication of the permit trading policy framework.  I also went on to identify 11 basic elements of any climate policy regardless of instrument.  In the third part, I describe a package of mostly familiar policies that integrated together will have a far more profound effect on emissions that the cap and trade system.  In this, the last part, I offer a second alternative to cap and trade which I believe is the most aggressive and secure approach to cutting emissions, though does not exclude elements of the package in part 3.

Project-Based Carbon Mitigation Policy (PCMP):  A Heterodox Climate Policy Framework

I’ve redesigned an approach that is not entirely new but has been sidelined in current high-level climate and energy policy discussions.  I’m calling it Project-Based Carbon Mitigation Policy– PCMP.  Instead of or in addition to starting with an abstraction like a carbon price, PCMP starts with specific large-scale regional, national or global projects that with greater than 95% probability will cut emissions substantially within the next few years; these projects implement technologies and processes that are known to directly replace fossil fuel use, directly reduce demand for fossil fuel or, with some agreed-upon degree of certainty, sequester carbon emissions. A goal and timeline are set for the reductions based on the implementation of that technology or process then PCMP reverse-engineers the economic and social policies that will enable the project to take place in a timely manner.  PCMP does not exclude nor discourage the use of abstractions like price mechanisms and society-wide or global targets but it starts with the security and relative certainty of projects that are technology- and process-based, supervised by some responsible party or regulator, and funded.   PCMP may end up being a route to a set of policies very much like the Comprehensive policy discussed in Part 3.  A PCMP policy approach also openly acknowledges the role of government leadership in achieving carbon emissions reduction goals, an attitude which has been shunned in recent history in the US and elsewhere.

Viewing projects as the fundamental element of policy also allows necessary supporting infrastructure that facilitate many types of emissions reduction to become the object and focus of high-level climate policy.  Build out of the electric grid and electrification of transport are key to a zero emissions industrial/post-industrial society though, due to the variable carbon intensity of electricity production their exact contribution as separate individual projects cannot be quantified.  A combined approach linking low- or zero-carbon electrical generation with electrification of transport would qualify as PCMP projects.

Carbon mitigation projects based on tested technologies and processes are the only assured means of cutting emissions, along with their supporting infrastructure.  Carbon pricing may influence projects to be initiated but the projects themselves are the primary building blocks of policy.  The focus on what might be called “secondary” or tertiary levels of climate policy has, in my observation, interfered with or at least obscured the importance of these primary on-the-ground projects.

The most directive end of the PCMP project spectrum would be a government program, funded by tax revenue, that uses “command-and-control”  to push through a project that is vital to our ultimate survival as a society implemented either by government contractors or via government employees.  On the other end of the spectrum in terms of directiveness are rulings, changes in tax law, and the institution of technology and process standards that will tweak existing market behavior.  A PCMP project will have a target emissions reduction by a certain date; optimistic goals should be shunned in favor of “worst case” scenarios to ensure that goals are met or exceeded.  Incentives should be aligned for the project leaders, whether they be public or private employees, if they achieve or, better, exceed emissions targets.

Many existing government programs in the area of environmental protection already are project-based policies in that an existing technology, set of technologies or process is chosen for implementation but, to date, not taking the next step to target specific carbon emissions reductions.   In the US, we have a number of house weatherization programs including a grant program for low-income homeowners and rebate programs for other homeowners.   To convert these into PCMP programs, one would need to make specific greenhouse gas mitigation goals and a timeline, tuning the policy instruments to achieve these reductions along the stated time line.  However, the notion behind the PCMP concept is that policies that support one or another project may be generalized to a sector-wide or economy-wide policy or have knock-on effects.  National policies or international agreements would be “reverse-engineered” to support key projects as priorities.

Project-based Policy, Infrastructure and Synergies between Technologies

The building of new infrastructure or its supervision, key to carbon mitigation, almost always falls to government, which undertakes the building of infrastructure on a project by project basis.  The emphasis on market solutions to climate change, which focuses on influencing the decision-making of individual market actors ignores the fact that most infrastructure is built by government planning and programs that anticipate rather than respond to economic demand.  One way to understand the sequence of events in  building infrastructure is perhaps best summarized by the line: “build it and they will come”.   Within this Hollywood formulation, what is captured is the ability of physical infrastructure to create or support markets as well as influence behavior beyond the influence of prices and goods for sale.

The carbon price signal, either the clear carbon tax version or the muddied cap and trade variety, will not by itself initiate the building of new infrastructure in a timely manner, especially if we consider the politically likely (low) level of the carbon price in the next few years.  Even if we look to the history of infrastructure for market behavior shaping infrastructure (“Go West, young man” and the US railroads), in the face of catastrophic climate change we are looking at an accelerated implementation of new infrastructure as replacements for serviceable but polluting infrastructure, requiring a pro-active government role that anticipates rather than responds to trends and price signals.

In addition, basing policy on or limiting policy discussion to carbon pricing alone has been a way to say:  “we don’t know what the solutions will be”.  However, besides ignoring the key role of infrastructure, this is, at this point in history, disingenuous and more importantly time-wasting.  As I have pointed out in two posts I wrote over a year ago, we now have about 24 technologies or processes that together could cut carbon emissions by at least 90%.  These technologies and processes ranged from CSP with storageinternetworked wind powerwith hydroelectric storagetransport electrificationafforestation, to even voluntary (partial) veganism.  Eventually much celebrated technologies like building-integrated photovoltaics will also play a major role.  Other, more “traditional” climate policies that may be established more generally like a carbon price may aid the implementation of a PCMP policy but the combination of a carbon price and PCMP projects will achieve emissions reductions most rapidly.  The project-based approach starts with a core of concrete intended outcomes in the way of realized projects but then welcomes and expects follow-on effects both from the realization of these projects and from the facilitating generalized policies like a carbon tax or fee.

Many of the gains associated with the most powerful of the 24 technologies, with a couple exceptions, are based on synergies between different technologies, not the solo implementation of those technologies.  The impact of electric vehicles on total emissions varies a great deal depending on the type of generation that is used in a particular area of the globe.    A carbon price will help urge this process on but will not of itself incentivize the creation of these synergies.

In renewable electricity generation there are some synergies between technologies, for instance between hydroelectric storage and wind power, which would need to be integrated in a planned manner across numbers of jurisdictions.  These synergies between technologies can only be realized rapidly via integrated resource planning with adequate financing.  Grid operators have already engaged in integrated resource planning anyway throughout the over 100 year history of the electric grid.  Linking this planning with carbon mitigation is a step towards the PCMP policy framework.

Prospective PCMP Projects (US)

PCMP Example #1: CSP with Storage

One of the few standalone, scalable renewable energy technologies that can directly replace fossil electricity generation one-for-one is Concentrating Solar Thermal Electric Power (CSP) with thermal energy storage (TES).  With sufficient transmission and judicious siting, CSP with storage could supply almost all the world’s energy using a small percentage of the area of the world’s deserts.   DESERTEC which is a large CSP investment and policy project for Africa, the Middle East, and Europe, could be configured as a PCMP with specific targets for replacing fossil generation.

The example PCMP project below applying CSP with thermal storage provides close to certainty in emissions reductions and can be accelerated with increased funding.  This contrasts dramatically with the lack of control over emissions under carbon pricing alone inclusive of cap and trade with its false “certainty”.  Effective carbon pricing would catalyze this type of development but would not “cause” it as would a targeted program focused on implementation of the technology.

CSP with TES – American Southwest/West of Mississippi

Region: 6 US States (California, Arizona, Nevada, Utah, New Mexico, Texas) – Replace Energy Production in 19 Western US States.

Emissions Reductions Source: Replace fossil electricity production by specified gas and coal power plants by 241 million MWh/annum by 2020 in the WECC, SPP, MRO and ERCOT grids (50% natural gas/50% coal) without addition of new fossil generation. By 2030 replace 1200 million MWh/annum fossil generation in NERC.

Technology: Concentrating Solar Thermal Electric Power with Storage (Capacity factors from 35% to 70%)  – 50GW installed by 2020, 250 GW installed by 2030 – mean capacity factor >50%.  Formation of CSP industrial base to replace fossil generation.

Target CO2 Emissions reductions from 2007 baseline: 181 million metric tonnes C02/annum by 2020, 905 million metric tonnes CO2/annum by 2030.

Finance mechanisms: guaranteed $.10/kWh rates (inflation adjusted) for 20 years for electricity sales plus $(2 + capacity factor/.25)/W (2010-2013), $(0.5 + capacity factor/.25)/W (2014-2017), $(capacity factor/.50)/W (2018-2020) innovation grant funded through carbon tax/fee (adjusted for the effect of the 30% Investment Tax Credit).  Favorable tax treatment for mothballing and early retirement of fossil generation.

Project Team: US DOE responsible leading industry stakeholder committee (US EPA, Fish and Wildlife, plant developers, utilities, grid operators, state and local political leaders, environmental advocates).

Supporting national and international policies:

  1. Carbon tax/fee facilitates implementation.
  2. Infrastructure: Renewable energy “smart”/supergrid
  3. Guaranteed Rates for Renewable Energy
  4. Contracting with Stakeholders for Greenhouse Gas Reduction Targets
  5. Special Master to Determine Compensation for Retired or Semi-retired Fossil Power Plants
PCMP Example #2:  Combined Renewable Energy Power Plants

A combined renewable power plant connects a diverse set of renewable generators that together produce electricity according to the demands of grid operators and ultimately grid users.  More complex than CSP with storage, this technology is still emerging though simply a matter of organizing existing technologies via smart, renewable-energy oriented transmission network.

Combined Renewable Power Plants – US

Region: All US States (can be generalized to almost any region of the world)

Emissions Reductions Source: Replace fossil electricity production by specified gas and coal power plants by 241 million MWh/annum by 2025 in NERC grids (50% natural gas/50% coal) without addition of new fossil generation. By 2035 replacing 1200 million MWh/annum in NERC.

Technologies: Wind, Solar (CSP, PV), HydroelectricGeothermal, Marine/Wave Energy, Biomass, internetworked generators to load centers, “smart” grid management technologies.

Target CO2 Emissions reductions from 2007 baseline: 181 million metric tonnes C02 by 2025, 905 million metric tonnes CO2 by 2035.

Finance Mechanisms: Bundled wholesale feed-in-tariffs with performance bonuses based on load-responsiveness of combined renewable power plants.  Amount of tariffs as yet undetermined and would vary with renewable resource intensity.

Project Team: US DOE responsible leading industry stakeholder committee (US EPA, Fish and Wildlife, plant developers, utilities, grid operators, state and local political leaders, environmental advocates).

Supporting National and International Policies:

  1. Carbon tax/fee facilitates implementation.
  2. Infrastructure: Renewable energy “smart”/supergrid
  3. Guaranteed rates for renewable energy/feed-in tariffs
  4. Contracting with stakeholders for GHG reduction targets
  5. Special master to determine compensation for retired or semi-retired fossil power plants
PCMP Example #3:  Home Weatherization

The US Department of Energy has a goal of weatherizing over 1 million homes as part of the 2009 American Recovery and Reinvestment Act, a.k.a. the 2009 stimulus package.   This investment of $8 billion dollars is divided between $5 billion for grants via the states to weatherize homes of low-income homeowners and $3 billion dollars for rebates to other homeowners for weatherization upgrades to homes.  The low-income grant program will limit grants to $6500 worth of work per home.

A review of the standard weatherization packages in 2002, indicates that the full package that would cost in the area of $5000-$6500 could cut from up to 7.5 metric tonnes of carbon emissions per year per house in high emissions/high heating demand areas like the Midwest, in particularly inefficient houses.  In areas with lesser heating and cooling demands,  like the Western US, the savings would be maximally 2 tonnes for an inefficient older, small single-family dwelling but the price tag would only be in the order of $2500/home.

However looking at the components of these packages there are certain measures that have much higher carbon reduction return on investment than others, most notably air sealing, programmable thermostat installation, water heater resets, low flow shower heads, and compact fluorescent lighting.  An additional reduced package of these high impact measures would cost from $1000 to $1500 per home leading to emissions reductions of about 2 metric tonnes on average, to as many as 3.4 metric tonnes.  It is possible to design then a “rapid” first-pass program of reducing emissions that would triple or quadruple the number of homes visited per unit expenditure.  Later, a second program could revisit these homes to address the remaining issues like inefficient refrigerators, furnaces, insulation and water heaters that have substantial returns in reducing carbon but are more expensive.

In a few years time, we may have better measures based on among other things passive house technology, which may enable “deep energy retrofits” of existing houses that enable greater energy and emissions cuts with similar or lesser investment.  In these cases, PCMP projects such as this one can revise their targets upwards.

Accelerated Home Weatherization Program with Carbon Targets

Region: All US States (start with high heating/high cooling areas)

Emissions Reductions Source: Reduce domestic combustion of fuel oil, natural gas, reduce domestic demand for electricity, especially at baseload.

Technologies: Building envelope air sealing technologies, insulation, high efficiency fluorescent lamps, refrigerators, water heaters, furnaces, programmable thermostats.

Target CO2 Emissions reductions from 2007 baseline: 60 million metric tonnes by 2020 from 30 million homes, 120 million metric tonnes by 2030 from 60 million homes.

Finance Mechanisms: Tax revenues fund low-income homeowner/renter grants (up to $6500 per home) and consumer rebates for energy efficiency upgrades.

Project Team: US DOE and state weatherization programs, utility officials.

Supporting National and International Policies:

  1. Carbon tax/fee funds and facilitates implementation.
  2. Contracting with stakeholders for greenhouse gas reduction targets
  3. Decoupling investor-owned utility income from energy sales
  4. National and state mandates for energy efficiency
  5. Green building and energy efficiency certifications/standards

A PCMP project once it is approved, organized and financed can move immediately to the generation of detailed design, operational plans and the begin of construction or implementation. The reverse engineering portion comes in figuring out how to get to the point where the technologies or processes can be implemented.  The key difference between a PCMP (aided perhaps by other policies) and a policy that essentially remains entirely agnostic about solutions is that a PCMP adds a stated intention and tasks a skilled project team to achieve a concrete material change in the processes that generate greenhouse gases.  Then policy is built partially around that intention and the project team that is tasked with realizing that intention.

The PCMP approach is I believe the most aggressive and gives those who will be ultimately held responsible for protecting the climate, the world’s governments, maximal ability to accelerate efforts if needed.  To achieve the very ambitious 350 ppm goal and follow  the “Emergency Pathway”, the PCMP approach would have the best chance.

Good Intentions Alone No Longer Suffice

Cap and trade has been a convenient mechanism for politicians to avoid fundamental but necessary conflicts while giving themselves and others the impression that they are “doing something” about climate change.  As the first international climate policy, it has attracted a community of people that have seen it as the sole alternative to inaction, therefore undeservedly has become a magnet for the good intentions of both the uninformed and the somewhat-better informed.  The “cap” is a reassuring physical metaphor that suggests a level of control over emissions which, as I have demonstrated, the policy itself undermines.  As cap and trade appears to address 5 of the 11 domains of climate policy, it is seductive for politicians to try to set up a “one stop shop” as a means to address the climate and energy problem.

However, there are much better policy frameworks out there of which I have shown two examples.  Cap and trade’s fatal ability to insulate the ultimate decision-makers from the process of pushing for emissions cuts on the ground can be avoided in a number of ways.  Above, I demonstrated a project-based policy framework that I called PCMP, which builds policy from the ground up and puts at the center the key role of developing zero-carbon infrastructure in addition to price-based instruments that influence investment and behavior.  Or, in part 3, I showed how  it is possible to implement a nine-part composite of simpler but synergistic policies that is more flexible, will be more effective, and ultimately more comprehensible to the public at large than cap and trade.  Crucially this set of policies does not give away or obfuscate governments’ responsibility to protect society and the environment.

The cap and trade policy is a twisted remnant of a political era in which government was supposed to pretend that it wasn’t really government.  It has fooled no one except some of its supporters.  Government must be decisively and centrally involved in the implementation of carbon policy and there must be a rapid re-discovery of the value of good government in leading society through difficult times.  Furthermore cap and trade as an instrument contains within it an open invitation for corruption and “capture” by powerful financial interests with few incentives to make concrete investments in the energy or land-use future.  Any effective climate policy must establish clear guidelines and openly acknowledge government’s supervisory role in the transition to a new energy economy.  I wish there were more shades of grey in this regard, but there aren’t.

No set of policies is, however, a magic bullet if there is not strong popular support for decisive action on climate and popular acknowledgement of the necessity for government’s leadership role.  As it currently stands in the United States, the public still is woefully misinformed about climate, with for instance, a prominent pair of columnists for the New York Times perpetuating “global cooling” myths in their latest book.  Against this background, climate policy appears to be a partisan affair rather than actions of the human community as broadly defined as possible that are based on our best science.  If cap and trade is presented as the only alternative, this further undermines the cause of climate action and government responsibility because of the fundamental flaws in the policy.  The equation of cap and trade with good intentions on climate action must be irrevocably broken.

Ultimately, political leaders must campaign with passion for the future of our planet and our societies, with empathy for the economically downtrodden and dispirited, informing the public about the alternatives available to minimize the impact of our two century fossil fuel bacchanal.  Within the context of a better informed citizenry, only then can an effective climate and energy policy truly take effect, though the time to start on both campaigns is now.

Cap and Trade: The Tangled Web… A More Effective Alternative – Part 3 November 5, 2009

Posted by Michael Hoexter in Efficiency/Conservation, Energy Policy, Green Building, Green Transport, Sustainable Thinking.
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1 comment so far

In Part 1, I offered a critique of cap and trade in its existing implementations  and located key flaws which make it highly unlikely that it will achieve its emissions reduction goals, even if somehow it is strengthened.   In part 2, I highlighted two problematic aspects of cap and trade and then went on to examine what are the fundamental challenges of climate policy.  Then I offered a list of the general features of any effective climate policy.

Turning to positive solutions rather than criticsms, I will offer here two main options, the first one mainstream and the second heterodox and project-based;   both of which are easily configured for quicker and more certain emissions reductions than via cap and trade.

Comprehensive Climate and Energy Policy Package with Carbon Tax/Fee

Climate policy has emerged with a focus on markets and changing market behavior (ignoring infrastructure development to a large degree), so the “mainstream” approach below would also transparently give responsible parties control over the process.  While the “one-stop shop” aspect of cap and trade overextends this already misapplied policy, a package of interacting measures that are, with fairly straightforward calibrations, guaranteed to cut emissions quickly can easily be put together.  The below policy package avoids handing off climate and energy policy to an unaccountable carbon market and invite undue influence by financial traders. It also has the potential to be much more effective than a cap and trade centered policies.  On the other hand it is “market-based” in that it relies on the more accurate carbon tax/fee price signal to shape market behavior rather than cap and trade’s muddy signal.

1)      Emissions-Reduction Path with Targets:  Set an emissions-reduction path with target goal posts (2015, 2020, 2025, etc.):  Not the reassuring “cap” metaphor but an analog to the cap without the false reassurances that it contains.  The target or path could be expressed in terms of an average carbon-intensity for economic activity that yields the same path.  Using a carbon-intensity target allows adjustments to be made so efforts to cut emissions do not shut down industries before they are able to transition to lower carbon alternatives.  I would recommend the “emergency pathway” as defined by Greenhouse Development Rights that uses the 350 parts per million carbon dioxide target, though others may object to its ambitious goals.

2)      Carbon Fee or Tax:  Set a carbon price in the form of a carbon fee or tax fixed but rising year by year that will, according to at first estimates and then experience, reduce emissions along the path.  If the tax does not yield the necessary cuts, increases in the tax/fee levels will be accelerated.  A tax or fee enables companies to calculate the value of carbon emissions and make the actual investments that will cut emissions rather than deal with a broad range of expected carbon permit values, as would result from cap and trade.

  1. Calibration –  A carbon tax would be calibrated to achieve the emissions targets along the path in bullet “1” though overachieving will be encouraged.  If tax levels inflict damage on economic well-being or capacity, tax levels may be reduced, though it is to be expected that there will be periods in which some economic pain will be inflicted by the tax to encourage better economic decision-making and innovation.  Expectations need to be set from the outset that some pain is involved in transitioning to a more sustainable economy, though excessive pain is to be avoided.
  2. Revenue stream – There are arguments among tax/fee advocates (as well as cap and trade advocates for the revenues from permit auctions) about where the revenues should go.  Here are my recommendations:
    1. One third of the carbon tax revenues should be used to dampen the effects of the costs of rising energy prices on the poorest, preferably via energy efficiency upgrades to housing (modeled on weatherization programs).
    2. One third should be used to help fund infrastructure that enables a zero carbon future (electric trains, electric transmission)
    3. One third will go into a international carbon trust which will fund development products, changed agricultural practices, forest maintenance and growth efforts with strict performance standards and baseline assumptions.
  3. Exemptions and Credits – Some argue against any exemptions and credits, seeing a flat tax as simpler.  However, I, as an example, believe taxing certain activities that cut carbon is counterproductive.  Additionally I want to show that it is possible to develop and regulate cross-border certified emissions reduction credits in a tax system if such a credit sub-system ends up being desirable.  I believe however that these necessary accommodations to the complexity of the situation are much more transparent and can lead to more productive dispute resolution than via the arcana of the trading system.
    1. It makes no sense to levy the full carbon tax level on the very infrastructure projects that lead to carbon neutrality.  If a construction project embeds fossil emissions in a zero-emission technology (electrification of a train system, renewable energy infrastructure), then the emissions from construction equipment or concrete making for that project should be at least partially exempt.  Alternatively there could be a percentage exemption depending on the level of carbon reduction achieved (coal to natural gas conversions).
    2. Just as with the current offset market it might be made possible to sell certified emissions-reduction credits that represent emissions reductions in other areas or other countries.  These credits would need to be rigorously certified and limited to only a certain fraction of carbon tax liability.

3) International Agreements – Utilizing existing international institutions, nations around the world can come to agreements on both monetary fees for carbon emissions and overall emissions reduction targets.  The addition of a monetary amount will force action by governments and businesses more rapidly than the abstractions of the carbon market. Agreements will focus on:

  1. Worldwide Emissions Targets and Path
  2. International Carbon Price(s) – Calibrated to achieving emissions targets, the international carbon price will be closer to actual microeconomic decision-making than permit pricing system of cap and trade. Choices are either a unitary price or a development-adjusted price depending on level of development.  Some countries may be more “entitled” to pollute given their lesser historical contribution to total atmospheric concentrations of carbon.  On the other hand, despite an “entitlement” to pollute more, some developing countries may want to go “cold turkey” and use the higher carbon tariff of the developed countries to spur sustainable development at home.
  3. Carbon tariff regime – with differential taxation in different countries, countries would levy tariffs upon importation either up to the amount of the unitary international carbon price or up to the amount of the development-adjusted carbon price.  While this contradicts “free trade” orthodoxy, under an international agreement there should be no problem in levying this type of tariff.  The WTO can be outfitted to handle disputes and generating agreements carbon tariffs and integrating climate policy with trade.
  4. International Standards and Best Practices –  Agreement on standards, certifications, and grading systems for energy efficiency and low emissions technologies (see below)

4)     Zero-Carbon Infrastructure Development– While the Obama Administration has embarked on pieces of this, a full-scale climate policy would front-load spending, including deficit spending, on building zero-carbon infrastructure and energy generation.  The main source of funding would come from tax revenues and use fees.  This area is largely neglected by the cap and trade instrument.

  1. Renewable Energy Supergrids and regional grids –  Link high renewable energy areas with demand centers via development of a HVDC and where appropriate high voltage AC transmission.
  2. Renewable Energy Zones –  Expedite environmental impact studies for high value renewable energy zones with strong sun, wind, geothermal resouces.
  3. Feed-in-Tariffs – Funding of private, community and household investment in renewable energy generators via clean energy surcharges to electric bills.
  4. Electric Freight Transport System
    1. Grade-separate and improve existing freight railbeds
    2. Add additional tracks to high traffic railbeds to allow more rail freight
    3. Electrify all high and moderate traffic rail routes
  5. Electric Passenger Transport System
    1. Build high speed rail backbone
    2. Enable improved track-sharing between freight and passenger traffic for lower-traffic routes.
    3. Build electrified bus and tram routes in high density/high-traffic city environments.
  6. Electric Vehicle Recharge Infrastructure
    1. Trickle charge (220V and lower) public charge network
    2. Battery-swap infrastructure
    3. Fast-charge (480V and higher) public charge network

5)      Best Practices, Certifications, Standards and Rulemaking–  Develop for most economic sectors, a set of best practices and standards that are based on cutting emissions as well as other elements of sustainable development (conservation of the earth’s natural wealth).  Standards would be either voluntary or mandatory depending on the level of imposed costs of meeting these standards by market participants and the existence of alternatives to meet the overall goals of the standards.  Rigorous standards like the passive house standard should be encouraged as well as graded standards that represent a “path” to carbon neutral solutions.  In certain vital areas, standards may be come laws to rule out certain practices that are simply unacceptable.  An example of the latter could be a moratorium on new coal power plants.

6)      International Afforestation Program –  Using revenue streams from carbon fees and tariffs, generate local solutions to maintaining living biomass.  Carbon taxes or other disincentives may be levied on activities that release excess carbon into the atmosphere.

7)      International Agricultural Carbon Sequestration Program –  Using revenue streams from carbon fees, incentivize low-emission, high sequestration variants of agriculture and food practices.  In the future, once a baseline for carbon sequestration may be achieved, carbon taxes may be levied on high emission forms of agriculture.

8)      Black Carbon Reduction Program – One of the more tractable climate problems though still a challenge is to introduce existing emissions control technology or develop alternatives to combustion of hydrocarbons and biomass that produce soot or black carbon.  We already have  most of the technology to limit soot emissions from internal combustion engines and factories.  More challenging is coming up with culturally-acceptable solutions for cooking with wood in less developed countries.

9)      International Technical and Scientific Cooperation – Create the equivalent of an international energy and climate research fund that supplements the work being done on national levels towards specific technical solutions to emissions.  Could develop in conjunction with IPCC WG III.  One area of research should be emergency measures like geo-engineering.

If adopted as a package, the above measures address all 11 generic elements of carbon policy and have none of the 10 drawbacks of cap and trade.  This approach transparently identifies governments as the responsible parties for reducing carbon emissions.   This comprehensive climate and energy policy does not interfere with their ability to respond to changing climate circumstances and removes unaccountable financial markets from the core of climate policy.

The (Renewable) Electron Economy as the Solution to the Oil Crisis: A Summary for Policymakers – I August 4, 2008

Posted by Michael Hoexter in Efficiency/Conservation, Energy Policy, Green Transport, Sustainable Thinking.
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Lines formed at gas stations during the 1973 OPEC oil embargo

Lines formed at gas stations during the 1973 OPEC oil embargo. In the near future, rationing is more likely to take the form of high prices rather than through limits on consumption.

This is the first in a short series on how we can build an energy future based on our best science and no longer critically dependent upon exhaustible and polluting fossil fuels.

Too often, discussions of our future energy system simply reflect the current array of political forces in Washington or the novelty-hungry attention of the media and not the long-term viability of technologies and proposed solutions. As the price of oil is the most pressing issue from a short-term perspective, I am starting this series of policy briefs with how the energy used in transport on land can be transferred from liquid fossil fuels to cleanly generated electricity; in the second part I will address how we can create the conditions for powering the grid in the post-fossil fuel era.

Oil Supply: Speculation and Long-Term Trends

We can all now agree that it has been the ultimate in shortsightedness to continue building a society founded upon burning ever increasing amounts of easily exhaustible resources. Not only is it highly visible petroleum at the pump but, behind the scenes, the vital energy for agriculture and freight transport that now depend upon the output of oil wells, mostly located abroad. In the US in particular, we have had a twenty-five year hiatus in facing this reality through political, cultural and corporate resistance to change, which means that Americans are starting the race far behind the starting line. In addition, as it turns out, the burning of these fossil resources alters the global climate and creates local pollution and health problems. There are other ills and challenges in our world but currently fossil fuel addiction is one of the most pressing but also, fortunately, soluble problems.

Open Outcry Futures Trading

Talk of a speculative bubble in oil is a distraction from the fundamental reality of a widening gap between increasing transport energy demand and static or dwindling supply of liquid hydrocarbons. Those who put their faith in speculation as the driver of punitively high oil prices come from two divergent camps. Some are wedded to the energy status quo by a conservative, jaded view of energy alternatives and function as defenders of the fossil fuel energy industry establishment (the business commentator Larry Kudlow comes to mind). A more surprising group are populists and left-leaning analysts who always use the formula “qui bono” (who benefits) to locate the responsible parties for any social ill. These critics of oil companies and oil sheiks continue to promote the illusion of an endlessly abundant and forgiving Nature, which is despoiled not by our combined global thirst for energy but solely by a thin layer of greedy profiteers, who can be punished or pushed aside thereby making the problem go away. We can safely expect oil to continue to climb in price even if we are now currently in a period where emotions have driven prices higher than actual supplies would warrant as some continue to profit from the price run-up.

Beyond speculation, suggestions that we can drill and refine our way out of the inevitable decline of oil that we have known for a long time to be in finite supply anyway, function as populist pandering or as short-term profit-maximizing calculus by parts of the oil industry. Members of the latter group, in a profits-over-ethics mode, would like us to continue to depend on oil as long as it is profitable for oil producers, which will be the case until a fundamental break with petroleum use in transportation is organized; obviously scarcer but more expensive oil will continue to be a cash cow unless a new post-oil transport system has been built. There is fundamental conflict between backward-looking portions of the petroleum industry and the general health of our economy and environment, a conflict which must be decisively resolved by policymakers and the voting and buying public in favor of new, cleaner energy sources in the next few years.

On the other hand, realistically, oil production and supply will need to remain a concern for a few more decades, yielding a very delicate but extremely important political challenge. On the political side, Republican Presidential candidate John McCain has relied on common wishes that more domestic oil production through offshore drilling will somehow eliminate or significantly soften the inevitable price spiral upward. Such drilling will only have an impact 10 years hence at a point when worldwide demand will have still further outstripped supply and prices will be in a comparative sense stratospheric. Not quite drawing a clear political front on this issue, Barack Obama has lately been attempting to accommodate the popular appeal of offshore drilling by suggesting that new drilling would support energy alternatives.

Oilman T. Boone Pickens has become a fan of natural gas and wind

Oilman T. Boone Pickens has turned his attention to natural gas and wind

Natural gas with its lower carbon dioxide emissions per unit energy is occasionally touted as an “alternative” fuel but it too can easily be exhausted; in fact, production in natural gas wells tapers off very rapidly as compared to its solid and liquid fossil brethren, making price spikes and shortages all the more likely in a turn to natural gas. The stock-picker Jim Cramer praises natural gas as an investment and T. Boone Pickens, in his new heavily marketed energy plan, trumpets it as an automotive fuel, as we are sure to use more of this dwindling lower-carbon resource, but it is not a sustainable alternative to oil. Relying on natural gas as a climate or energy solution is the modern definition of a Faustian bargain: highly profitable for some but costly for most economic sectors, our society as a whole and our atmosphere.

Differentiating Short-Term and Long-Term Solutions

This is one of my fathers favorite jokes

Depending on oil has discouraged planning in the area of energy and transportation.

The impulse to jump on the natural gas or intensified oil exploration bandwagons will distract policymakers by confusing short-term and longer-term solutions. Fluctuations in supply of these hydrocarbons may create a temporary plateau in prices but no enduring relief. In the short-term, within the next two or three years, steps can be taken to ameliorate what may be, in the energy and transport areas, a grim period. It is here that I part company with some of the doom-and-gloom predictions about economic collapse that originate from some Peak Oil enthusiasts. While I agree with some of the more pessimistic predictions about oil and natural gas supply and pricing, there are short-term, rapidly deployable solutions at least for passenger travel and some freight that will soften the blow.

Effective short-term solutions include

  1. Fiscal support for intensified operations by existing public transport – Federal and state governments will need to help local and regional transit agencies to increase their schedules to serve more riders without raising ticket prices substantially.
  2. Development of Internet- and cellphone-based ride sharing businesses and services. Local development of van-pooling services also enabled by Internet and cellphone-networks.
  3. Development of transport centers or nodes for public transit and ride sharing with municipal and regional oversight to increase efficiency and security.
  4. Opening of lanes of local streets to lower speed vehicles including neighborhood electric vehicles, scooters and bicycles.
  5. Designating space or facilities in buses and trains for small freight hand trucks and bicycles.
  6. Development of transport demand study tools using the Internet to fine-tune and coordinate transport policy and new transportation businesses

These solutions will not provide the same level of spur-of- the-moment convenience as we might find in the recently past era of cheap fossil fuels and widespread personal vehicle ownership. The transport of medium and larger quantities of freight will also require more capital intensive, longer-term solutions. Nor will these short-term solutions provide the same utility of future innovations in electric vehicles and an EV public and quick-charging infrastructure. Some, used to traveling in their own personal space, will not avail themselves of these stopgap options until they feel more economic pain through still higher gas prices.

The Five Transport Energy Solutions and One Imperative

There are five fundamental options to move into a post-oil, post-natural gas energy world and one imperative:

  • Imperative A: End-Use Energy Efficiency and Conservation. We will have to invest less in new energy supply if we get more from the energy we use (efficiency) as well as act and plan in a way that recognizes the limited nature of natural resources (conservation). The electron economy scenarios have the greatest potential for end-use energy efficiency. The short-term measures above will also increase efficiency.
  1. The Renewable Electron Economy: electric vehicles, stationary devices, and new electric transport infrastructure powered by electric generators using renewable energy and the associated energy storage challenge.
  2. The Nuclear Electron Economy: electric vehicles, stationary devices, and new electric transport infrastructure powered by electric generators using nuclear energy (with or without fuel reprocessing), with associated security risks, waste and dependence upon fissionable fuel supply.
  3. The Coal CCS Electron Economy: electric vehicles, devices and new electric transport infrastructure powered by electric generators using coal with carbon capture and sequestration, a technological “maybe” dependent upon coal supply.
  4. The Coal to Liquid (CTL) Transport Economy: converting coal to liquids (sometimes via the Fischer-Tropsch process), burned in internal combustion engines leading to climate disaster and resource exhaustion.
  5. The Biofuel Transport Economy: Aggressive expansion of unregulated biofuel production for land transport will almost certainly lead to ecological and social disaster. Biofuels, sustainably produced, especially from wastes, will have a niche in aviation and marine propulsion.

Sub-option for Solutions 1, 2 and 3: The Hydrogen Economy is parasitic on the Electron Economies, reducing net usable energy by two-thirds for the purpose of having a compact liquid/gaseous fuel extracted by energy-consuming electrolysis. A Hydrogen Economy therefore requires a 2 to 3 fold increase in the amount of and therefore the capital investment in the required clean electric infrastructure to support renewably produced hydrogen. (There are currently even more expensive renewable ways to extract hydrogen from water using very high concentrations of sunlight that do not use electricity as an intermediary).

Any of these five transport energy supply solutions will be made much more feasible if aggressive end-use efficiency measures are pursued in parallel; therefore the imperative of energy efficiency.

Narrowing the Field

To simplify matters, we can eliminate options “4” and “5” as the costs of climate, ecological, and social disaster outweigh the benefits of a supply of liquid fuel that is not petroleum-based. Analyses that only consider liquid fuels divert the debate , intentionally or unknowingly, from more promising solutions; it is astounding how some commentators can discuss these options as if a continued supply of liquid fuel for transport was somehow worth enormous ecological and human sacrifice.

Lamborghini easily converted this gas guzzling Gallardo to use biofuels.  Yet the ecology and economic effects of producing the fuel for such a car have been called into question by most studies.

Lamborghini easily converted this gas guzzling Gallardo to use ethanol yet producing biofuel from food crops for such a car has, in most analyses, shown more negative than positive ecological and economic effects .

Building on early optimism about biofuels from environmentalists, the biofuel lobby, unfortunately, has a great deal of influence in the United States. This is a truly tragic state of affairs in American politics, as many farmers and farm-state politicians have tied their political and economic hopes to this option. Biofuel mandates have pushed up the price of crops and created an incentive to plant and overplant corn as well as other potential biofuel crops. As fuel prices push up food prices, these prices are further elevated by the transfer of prime farmland from food production to fuel production. Without cutting biofuel incentives and mandates, there will be no countervailing influence to conserve the soil or return land to food production. Talk of cellulosic ethanol or other future innovations in biofuel production function currently as an entering wedge for the current unsustainable variety.

The only savior for biofuels is a rigorous eco-certification program that excludes the conversion of food crops to fuels, mandates soil and water conservation, and privileges the use of waste streams for fuel. Under such an international eco-certification program, biofuels will have a role as clean marine, aerospace and specialized land transport fuels.

Luckily, the coal-to-liquids option has few advocates and so far little political support. If however, petroleum prices continue to rise and so-called “skeptics” of global warming continue to be well represented in the US Government, there may be various support schemes for coal-to-liquid that are inserted into legislation. Unlike the biofuels solution, coal to liquids would “work” to move a large group of vehicles for a few decades not unlike our current vehicle fleet, but with enormous climate sacrifice as it represents an increase in carbon emissions over even the current sorry state of affairs.

In the next installment of this series, I will explore which of the three electron economy scenarios will predominate. As each scenario varies only in the manner in which electricity is supplied, i.e. generated, and not used, the below recommendations about how to create a secure post-oil transport system using electricity could apply to all three.

Getting Off Oil: A Three-Pronged Approach

Oil is far from an “evil” but an undervalued resource that has been squandered on tasks that could be much more efficiently achieved through the use of electric drive transport. Cheap oil has enabled individual and family mobility and autonomy at a low price but these uses now compete with more critical uses of oil in commerce, industry, and agriculture. As we shall see with greater investment in electric transport and infrastructure an equivalent level of mobility in most arenas can be achieved through electric drive transport. Electricity can be generated via a number of different methods, some of which are sustainable and have low or zero emissions.

  1. Electrified Rail and Roadways – In the last few months, decisions have been made in Washington to spend billions of dollars on bailing out financial institutions that made the wrong bets in the housing and housing securities markets in search of guaranteed or higher than average profits. To get off oil, we will need to make public and private investments in productive assets that
    This European high speed train receives its power through the overhead catenary wires.

    This European high speed train receives its power through the overhead catenary wires.

    enable transport to be powered by electricity, a much more durable and secure investment. Electrification of railways and key roadways, first in urban centers and then interurban roads, will allow trains, freight and large passenger vehicles to function independently of oil supply. As electric or dual mode locomotives on electrified rights of way are more capable than the majority locomotives in the US, the diesel electrics, fairly inexpensive sets of financial incentives may be sufficient to encourage private railways to electrify. Compared to the other electric options, electrification of rail and local roadways is the most highly developed and highest capacity electric transport option, though the least publicized in an age fixated on new technology. This option has slipped under the radar, as, for instance, Andy Grove, the Intel co-founder and now an advocate of the electrification of transportation, omitted to mention this option in his recent Washington Post editorial on the subject.

  2. Plug-in Hybrids/Extended Range Electric Vehicles – The most likely substitutes for small and medium sized vehicles used mostly for local trips but with some longer-distance usage are PHEVs/EREVs such as the upcoming Chevy Volt. In their simplest configuration, these vehicles will be driven by an electric motor that can propel the vehicle for as many as 40 to 60 miles on
    GMs Chevy Volt will be one of the first production Plug-In Hybrids which GM is calling an Extended Range Electric Vehicle or EREV

    GM's Chevy Volt will be one of the first production Plug-In Hybrids which GM is calling an "Extended Range Electric Vehicle" or EREV

    stored grid electricity (therefore the “plug-in” part) in a medium-sized battery and can switch seamlessly to using petroleum or other liquid fuels from its conventional fuel tank to run either a generator or small engine to propel the vehicle on longer trips. PHEVs will benefit from new generations of batteries that are more compact than lead acid; however a future revolution in battery and quick charge technology may narrow the scope of usefulness for PHEVs. Many auto manufacturers are now planning or actually developing PHEV models, including GM and Toyota. PHEVs in wide deployment could reduce petroleum usage by as much as 60 to 70%.

  3. Battery Electric Vehicles/Battery Exchange and Quick Charge Infrastructure – A new generation of battery electric vehicles are now being developed with lithium ion batteries that can have ranges of up to 250 miles or can completely recharge within 10 minutes. The Tesla Roadster, a high end sports car with a 225 mile range is just being delivered to customers; Tesla’s British competitor with a 160 mile range, the Lightning GT, will recharge in 10 minutes from a 480 volt outlet, making its recharge time approach liquid refueling times. Tesla, Renault-Nissan, and Mitsubishi are all planning
    The Introduction of the Tesla Roadster has sparked a revival of electric car projects by many major carmakers as well as by start ups.

    The Introduction of the Tesla Roadster has sparked a revival of interest in electric cars by many major carmakers as well as by start ups.

    mid-market or economy electric vehicles with varying ranges all using higher energy-to-weight ratio batteries than lead-acid batteries. Other makers are making short-range vehicles for lower speed city use with the older lead-acid battery technologies. Some are planning to build quick charge or battery swap infrastructure to allow electric vehicles to travel unrestrictedly with short charging or swap stops. As is, battery electrics with even traditional lead-acid batteries can do many important tasks that are now the province of petroleum-powered vehicles.

One of the strengths of this three-pronged approach is that it does not hang its hat on any one technology, distributing risk between three paths. Also by acknowledging the uses of existing battery technology and on-grid transport options, the plan doesn’t depend crucially on innovation in batteries or chargers and their manufacture yet also would take advantage of the opportunities offered by these technologies and their future path of development.

Towards the Post-Oil Society

The tripartite approach allows our society to cut oil demand and dependence substantially within a decade, much more quickly than a sole reliance on electrification of the autonomous vehicle fleet through sales of battery-electric and plug in hybrid vehicles. Combining these vehicles with the already well-proven and easily scalable technology of vehicles that use trolley poles or a pantograph to draw power from the grid while in motion, allows policy makers to take a leadership role when required to supplement the emerging market for personal or corporately owned electric vehicles. Most world leaders with a future orientation recognize a global energy crisis of enormous proportions where electric transport has a crucial role. In an under-publicized speech, British Prime Minister Gordon Brown already sees in electrification of transportation both a business opportunity for the UK and a more general solution to living in a post-oil world.

Advances in battery and ultracapacitor technology and manufacturing technologies are inevitable but the timing of their widespread adoption will substantially lag demand for them. Insistent demands by concerned consumers that Tesla Motors or another manufacturer create in the next few years a battery electric vehicle that is

The secretive Texas company EEStor is claiming that it will produce a revolutionary electric energy storage device, though it has continued to push out the timeline for actual commercialization.

The secretive Texas company EEStor is claiming that it will produce a revolutionary electric energy storage device, though it has continued to push out the timeline for commercialization.

priced at the level of gasoline powered economy cars are as of today wishful thinking. Batteries, however, will remain far more advanced and widely available than hydrogen and hydrogen fuel cells. Though hydrogen may have a future role, the focus on hydrogen by policymakers and automakers has functioned as a distraction from electric technology, the clear next generation in powering transport. Unfortunately commercial interests that a decade ago wanted to delay the emergence of electric transport, held onto hydrogen as the next thing to, seemingly, prolong the era of profitable petroleum powered vehicles.

The tripartite strategy allows policy makers to respond more immediately to the demand for oil alternatives by implementing programs that build out grid-powered transportation infrastructure for freight and passenger traffic using “off the shelf” technologies. Policymakers can create incentive packages, issue bonds or levy taxes for the necessary work to keep America moving. Incentives for private companies to invest in electric transport infrastructure can be designed. Beyond its easy scalability requiring few to no technical advances, powering vehicles directly from the grid is highly efficient because power is used directly after generation rather than diminished a fraction through charging and discharging a battery. Using that extra fraction of power for the convenience of storage is well worth it in many contexts but is not necessary for all transport tasks.

Building Electrified Rights of Way

There are now a number of plans emerging on a national, continental and local level to electrify transportation in part. Alan Drake, a contributor to a number of energy and transport websites, has devised a plan to electrify 36,000 miles of vital freight

Most of Americas rail freight is pulled by diesel electric locomotives along non electrified rights of way

Most of America's rail freight is moved by diesel locomotives on non-electrified tracks; with an electrified train system the energy of trains braking could be captured for use by other trains.

railways in the US and increase the speed of rail freight; higher speed freight allows an easier commingling of freight and passenger traffic on the rails. A high speed (electric) passenger rail line is now being proposed in California to link San Diego and Los Angeles with San Francisco and Sacramento. Public transit advocates have created visions of how various cities could be transformed with expanded subway or light rail networks, many of which unfortunately require larger per mile investments than simply electrifying existing rails and roadways.

Building of new heavy and lighter rail infrastructure is inevitable but a rapid start to electrification will work with existing rights of way, tracks and roadways. As an exercise, imagine your own local area or, as the America 2050 plan calls it your larger “megaregion” and visualize where are the highest traffic areas where we could rapidly transfer people and freight from petroleum dependent to electric transport.

An Example: Moving the Northern California Megaregion off of Oil

In the America 2050 plan, there are two California Megaregions with the Northern shown in Green

In the America 2050 plan, there are two California Megaregions with the Northern shown here in green, the Southern in ochre.

The Northern California megaregion, in which I live, extends over a huge square of land centered on one side on San Francisco, San Jose and Oakland, approximately 250 180 miles per side extending into northern Nevada. The size of this region and the sprawl within it has been enabled by cheap petroleum transport energy despite its foundations in the pre-oil era. On the other hand, Northern California is better prepared than many areas of the Western and Midwestern US to transition to an electricity-based transport system because of existing investments in concentrated freight and passenger transport and some denser core and corridor areas of residence and business. The transition will be more challenging for the “Arizona Sun Corridor”, the “Piedmont Atlantic” and the “Florida” megaregions with their still greater sprawl and dispersion of economic activity.

An inventory of existing electric transport assets in the Northern California megaregion yields the following:

  1. the highly successful regional BART (Bay Area Rapid Transit) system, a 3rd-rail driven commuter rail system for which there have been several expansion plans, that are now again made more likely.
  2. Three light rail systems in the City of San Francisco, in the City of Sacramento and in the Santa Clara Valley around San Jose.
  3. A trolleybus system in the city of San Francisco
  4. The venerable San Francisco cable car

These electric transport assets are largely focused at the traditional center of the area San Francisco and are currently designed for passengers and their hand-carried freight. There are however multiple existing non-electrified rail assets in the region for passengers and freight running on freight companies rights of way. These include:

  1. the Caltrain commuter train on the Union Pacific right of way from San Francisco to San Jose and Gilroy
  2. the Capitol Corridor regional trains from Oakland to Sacramento
  3. the ACE train from San Jose to Stockton
  4. Amtrak service linking major centers in the megaregion as well as tying the megaregion to the Southern California and Cascadia megaregions to the north and south.
  5. Freight rail service on the many active railways on both major trunk and also spur lines throughout the region serving industrial and commercial customers.

Electrifying many of these existing routes would further insulate Northern California from dependence upon oil markets. In addtion, the region’s Metropolitan Transportation Commission’s rail plan, announced in 2007, recommends track expansion in addition to that needed by the statewide High Speed Rail proposal. In this plan are efforts to separate out where possible freight and passenger rail to allow each to proceed on its own most efficient schedule. Grade separating rail in densely populated areas is an additional expense that with higher traffic becomes an enormous boost in the quality of life and quality of rail service. While as of last year these recommendations may have seemed like pie in the sky to some, events in the oil markets have made such efforts an ever higher priority.

Less expensive per mile and more rapidly deployed are electrified roadway systems,

While the wealthy and tech-friendly Santa Clara Valley around San Jose will probably lead the nation in electric car purchases, building 4 or 5 new electrified rights of way for trolleybus or light rail will insulate more Valley residents and visitors from the vagaries of the oil markets

While the wealthy and tech-friendly Santa Clara Valley around San Jose will probably lead the nation in the adoption of private electric cars, building 5 or 6 new electrified rights of way for trolleybus or light rail will insulate the operations of the Valley's public transit authority from the oil markets.

now used with trolleybuses but capable of accommodating dual mode electric trucks outfitted with trolley poles or pantographs. Focusing on passenger traffic, the Northern California megaregion can supplement the railed systems of travel by building at least one electrified lane for trolleybus traffic on major thoroughfares, connecting with rail transport resources. A listing of these routes for the Northern California megaregion would extend perhaps to 50 major street routes of 10 to 30 miles in length and would supplement existing rail infrastructure. These trolleybus routes can either be operated as Bus Rapid Transit in a segregated lane or can commingle with other traffic, part of the flexible appeal of trolleybuses. In addition trolleybuses can operate in residential neighborhoods in the evening and at night without disturbing residents. Almost any bus route could be electrified, though it makes sense to start with the highest traffic routes.

Once any strategy of electrification is recognized as the primary means of powering ground transport, blue ribbon panels of technical, financial and transport analysts can be convened to determine what mix of rail and roadway electrification systems might best serve to fulfill our current and anticipated future transport needs. One of the priorities of the next Administration ought to be a study of long-distance roadway electrification versus the building out of electrified railway networks inclusive of the expense of improvement of existing railbeds and building new sets of parallel tracks in high traffic areas. Another factor involved in these studies would be the anticipated rate of improvement in mobile energy storage technologies and their manufacture.

PRT advocates believe that people will prefer traveling in private pods routed automatically to their selected destination station on the PRT network

PRT advocates believe that people will prefer traveling in private pods routed automatically to their selected destination station on the PRT network

Another electrified alternative is Personal Rapid Transit or PRT. Still an emerging concept, PRT may use either electrified rights of way or batteries in an automated system of electric “taxis” on guideways. A large PRT system would be unthinkable without advanced information technology and highly reliable automated controls. PRT advocates claim an overall lower environmental impact for their technology over traditional mass transit. PRT critics believe that no PRT system will be able to handle rush hour traffic volumes. The first true PRT system is being built for use at London’s Heathrow airport.

The grouping of shared and rent-able forms of transport around the main transport arteries and stations will further increase the utility and efficiency of the transport system. In France, there are free shared bicycle services clustered around transport hubs (Velib) and there are also proposals to introduce a shared electric car service with similar depots scattered around French cities. Van pool and ride-sharing services can grow based on determining where are the centers of transport demand and need.

Electrification of high traffic rights of way is one of the top priorities for both national security and energy security. Alan Drake, in focusing on the already-profitable freight business and rights of way, proposes that minimal federal incentives can stimulate large private investment in electrifying tracks owned by the large railway companies. Publicly owned rails or roadways would require debt financing or budgeting for construction directly from tax revenues for local, state or federal governments.

Promoting Battery and Plug-In Hybrid Electric Vehicles

Governments can play a key role in promoting electric vehicles by buying electric vehicles en masse and helping develop battery electric and plug-in hybrid electric fleets and fleet systems. With current technology, battery electric trucks could already function as postal delivery trucks. Beyond the gasoline hybrid, government service vehicles should be mandated to be electric or PHEV/EREVs with few exceptions. As is proposed in a recent bill in Congress, government can offer tax incentives or rebates to individuals and corporations for buying individual or fleets of electric vehicles. Government can also provide the test bed for developing quick-charge and battery swap systems, especially with fleet vehicles.

Public trickle charge locations at 110/220 volts, quick-charge stations at 480volts and battery exchange infrastructure are another area where local, state and national policy can make a difference. The standardization of public charge plugs, for instance, will allow electric vehicle manufacturers to make vehicles with a higher value to the end consumer, by allowing any vehicle to charge at any public charging station. Government and industry may also need to standardize the battery pack-to-vehicle interface to allow interoperability between more battery packs and more electric vehicles with battery pack exchange capability. Low-interest loans may also enable electric utilities and property owners to install an electric account-linked or pay-per-charge vehicle charging infrastructure of the near future in multifamily dwellings and paid parking structures.

Aviation, Marine and Special Use Fuels

The energy density (the energy content to weight ratio) and energy storage capacity of liquid hydrocarbons will remain for the foreseeable future vital for ships, aviation, remote environments and applications where the substantial heat byproduct of an internal combustion engine is desirable. In these contexts, petroleum products will continue to be dominant until we have developed ways to produce bio- or synthetic fuels that do not substantially interrupt food supplies, exhaust water supplies, or endanger the fertility of soils. Luckily, our use of petroleum as a transport fuel is driven five to one by on-land use, so we will reduce our petroleum demand and our greenhouse gas emissions by transitioning to the Renewable Electron Economy as rapidly as possible.

Concentrated and Smarter Settlement Patterns

Peak Oilers predict with steep rises in oil prices that suburbia will depopulate and collapse.

"Peak Oilers" predict with steep rises in oil prices that suburbia will depopulate and collapse.

Those who have long predicted a rapid escalation in oil prices with severe social and economic effects, when and if they turn to advocating solutions, suggest that ultimately a post-oil society will have a stronger community focus than the anomie of suburban and widely dispersed rural settlements. James Howard Kunstler, who envisions the collapse of suburbia after a catastrophic rise in oil prices, advocates for what might be called a new urbanism or smart growth, where people live in more tightly concentrated but humanely designed cities and towns.

There is however a contradictory current within the same group which suggests that people will need to become more self-reliant, growing their own food, preparing to become more self-sufficient autonomous units that do not require petroleum-based transportation to live. Such a current would suggest that people would use land in a more distributed manner, allowing for larger garden plots around living spaces perhaps leading to an new survivalist agrarianism.

The two contrasting scenarios proposed are based on two different notions of what is ultimately a more resource and energy efficient way to live: more concentrated settlement is built around more efficient consumption while somewhat more distributed settlement suggests that production and consumption should co-exist in the same space. It is unknown the degree to which one or the other of these visions will predominate in the near and medium-term futures.

The tripartite approach to electrifying transport concentrates some transport tasks along main electrified rights of way while leaving open the degree to which people and the machines they operate can range off of the grid using batteries or liquid fuels. Demand for transport and goods traffic along these main corridors will remain high even in times of crisis or in a theoretically more dispersed population of part-time farmers. Neither more efficient consumption nor a commingling of consumption and production is necessarily favored. I have explored in one installment of my series on the Renewable Electron Economy the possibility for farmers to use electricity to do many farming tasks that are now petroleum dependent.

In any case, it is premature to predict massive internal migrations and collapse of whole economies as oil prices continue to climb, especially if these three paths towards electrifying land transportation are pursued aggressively and effectively by government and industry in the next few years. Additionally short-term measures to increase the efficiency of our transport system as outlined above can be implemented rapidly by a combination of public agencies and private companies that recognize the opportunity to provide people with more effective and more efficient transport choices even in an era of more expensive energy.

The Renewable Electron Economy XVII: On-Grid and Grid-Optional Transport, ”Parachute” for a $140/Barrel Oil Society July 2, 2008

Posted by Michael Hoexter in Energy Policy, Green Marketing, Green Transport, Renewable Energy, Sustainable Thinking.
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TGV high speed electric trainCurrently, vehicle-makers, researchers, investors and green technology analysts are involved in a high-stakes game of developing and investing in various battery chemistries and designs which may yield the result of more energy dense, longer-lasting, and less toxic batteries or ultracapacitors. It’s a good thing that more and more social and financial resources are pouring into electric transport and energy storage solutions. Still others are investing in and legislating in favor of solutions that have a more limited future, the biofuel and hydrogen fuel cell options, which unfortunately still have public and political support out of proportion with their short and medium term ability to drive a sustainable transport system. As other analysts and I have already highlighted, these liquid fuel solutions are highly inefficient in converting renewable energy into a fuel. They require vastly more natural resources and man-made instruments to capture an equivalent amount of usable renewable energy than does a electric generation/electric storage/electric drive solution.

But, in actuality, we don’t HAVE TO have better batteries to build the infrastructure for a livable, sustainable society. Sure it’s going to be nice but we should spread out our electricity-driven transport investments and development efforts. Before transport planners and consumers gave themselves over completely to fossil-fueled transport, we used to build electrified rights of way for trains and trolleybuses, which now look all the more attractive in an era of rising petroleum costs. Using electrical energy from the grid to power moving vehicles is an established technology that has received too little notice in our efforts to exactly reproduce the conveniences of the now closing fossil fuel era.

Thus, while better batteries are going to continue to be developed, on-grid and grid-optional vehicles will be a key component of a petroleum-free, carbon-neutral transport system. Grid-powered vehicles are already a mature technology so no breakthroughs are required. Thus, if we are serious about getting off petroleum and cutting our carbon emissions, developing a system of transport attached to a grid increasingly fueled by renewable energy sources can function as a “parachute” until more compact, durable and cheaper systems of mobile electrical energy storage can be developed.

On-Grid Transport and Renewable Energy

Transport of people and goods is now precariously dependent upon the output from oil fields and to a lesser extent natural gas deposits, which contribute to climate change. Building out our existing transport infrastructure with tested and easily modified grid technologies, allows us to use the limitless energy of renewable energy sources to generate electricity and drive land-based transport starting today and extending into the indeterminate future. While there are drawbacks to tying transport to the grid, these disadvantages are dwarfed by the mounting problems and expense associated with oil-based transport fuels.

In addition, predicating our transport future solely on the development of mobile energy storage (batteries/ultracapacitors) is putting all our eggs in one, albeit a promising, basket. The batteries are here, sort of, but we have not yet mass-produced battery electric vehicles in quantities that we will require to address our transport needs. There is no question, on the other hand, that we have the technical capacity to build and use on-grid vehicles to address many of our transport needs with no breakthroughs and no exotic materials. On-grid vehicles are already doing much of the heavy lifting in the area of transport in many industrialized countries. Why for the sake of embracing the “latest” or the “new” should we turn our backs on success?

The more developed and economical battery or ultracapacitor technologies become, the less we would need to depend on on-grid vehicles. On the other hand, I don’t believe we are in a position right now to only choose one “perfect” seeming future solution to the massive climate and energy challenge facing us. The challenge is too great and there are multiple excellent alternatives that will enable us to move beyond fossil fuels.

Already, zero emission vehicle and energy systems are here and functioning, often without much fanfare. The trolleybuses and light rail system of San Francisco’s Muni use hydroelectric power to power them. Calgary’s C-train system (pictured above) buys wind-generated electricity to power its light rail cars. Other electric train systems may not draw power from such clean sources, but it is only a matter, then of building renewable generators and energy storage systems to power these systems as well.

Who’s Buying?

The publicity that battery developed and battery-dependent vehicles have generated relative to on-grid vehicles has a lot to do with the fact that we live in a society and economy that has been moved in the last 60 years towards individual and familial consumption and away from public infrastructure investment. In absolute terms, battery-based solutions deserve substantially more media attention than they get as, for example, the New York Times, the US “newspaper of record”, has been functioning essentially as a public relations arm for automakers marketing hydrogen vehicles. In the consumer market, powerful interests supporting biofuels and hydrogen fuel cells have overshadowed battery electric and plug-in hybrid electric vehicles (PHEVs/EREVs) in the media beauty contest to date. Still, in the world of electric transport, autonomous battery vehicles are the way that people prefer to imagine the future, as a battery electric vehicle, perhaps with quick-charge capability, will mimic what a fossil fueled vehicle would do.

If we rank the amount of media attention that the various electric transport alternatives receive, we put battery electric and PHEVs/EREVs first, then a distant second are new battery electric utility vehicles like trucks and, in last place, are electrified trains and trolleybuses, which, I suppose for the novelty-hungry press are considered “old hat”. This post, I hope will be one attempt to remedy this balance.

One element that reduces publicity for the on-grid alternative is that there are relatively few actual buyers for a massive transport infrastructure in even the best circumstances. Only governments or large private companies will invest in an electrified right of way for obvious monetary reasons as well as possess the legal right to build over or transform a route/road/railway of any length. There are also no giant companies that are yet significantly invested in building the electrical infrastructure, at least enough to suggest to the general public, governments or corporate buyers that this is an important solution for our energy and transport challenges.

While the existing grid-tied alternatives have not been fully brought into public consciousness, a fan-base exists for the sole new monorail-based technology called Personal Rapid Transit or PRT. Because of PRT’s newness and some other potential benefits, there are occasional articles that discuss this technology that will be installed at London’s Heathrow Airport to transport travelers to parking from Terminal 5.

Electrified Rail

The electrification of railways has for a century been the sign of the maturity of a rail route or railway system; the highest traffic routes in the world all tend to be electrified. If given the budget, most designers of rail systems would choose electrification over diesel. The electrification of a rail line costs more initially than simply building a non-electrified line but electric locomotives or “multiple unit” electric motorized trains (with motors in rail cars distributed throughout the train like many commuter trains and subways) are much longer lasting and energy efficient than train propulsion units that rely on internal combustion. Electric motors are simply more durable than internal combustion engines, which must endure millions of internal explosions throughout their lifespan. Electrification also allows for railways to use regenerative braking by returning electrical energy to the grid while braking; one train going down a hill can help power another train going up a hill. Electric locomotives are quieter, can be much more powerful, and, of course, do not emit any pollutants at the point of use.

Beyond the world of strictly electric locomotives there has been an interesting convergence of internal combustion engines and electric motors, that predated the recent convergence of these two types of traction in automobiles. Most fossil fueled locomotives are “diesel electric”, using a diesel generator to make electricity that drives the electric traction motors that turn the wheels. Some locomotives are “dual-mode” allowing the train to operate on either an electrified track or a nonelectrified track. Diesel electrics are the equivalent of a “serial hybrid vehicle,” while less common dual-mode locomotives are the equivalent of plug-in hybrids, using either a liquid energy carrier or electricity for locomotion.

There are two predominant systems for electrifying a railway: overhead wires and a third rail. Overhead wires are usually used for long-distance trains and for higher power applications while commuter and urban rail systems sometimes use the third rail. Other than higher voltages/power, overhead wires have the advantage of putting some distance between the electrical circuits and ground-based challenges including flooding or human interference. Third-rail systems are more compact and avoid the visual effect of overhead wires and towers over the railway. In the future, it may be possible to also use track-embedded linear induction motors that can propel railcars through the use of magnetic fields. An advantage of linear induction motors is that they would not pose the same electrocution danger as a third rail system, as electrical contacts are not exposed.

High speed rail, where trains travel in excess of 120 miles per hour (200 km/h) and as high as 200 miles/hour (320 km/h), can compete in terms of convenience and speed with airplane trips of up to 400 miles when all legs of a journey are considered. Europe and Japan now have fairly extensive high speed rail networks and there is now a proposal in California to build a high speed line from San Diego to San Francisco and Sacramento that at least theoretically could reach a maximum speed of 220 mph. High speed rail requires the building of special rail routes with very slight turns, low grades, smooth railbeds with welded rails. The fastest scheduled rail segment (of the French TGV) averages 173 mph (279 km/h) while the railed speed record also belongs to a specially prepared TGV that achieved 357 mph (574.8 km/h) in 2007 on an ordinary high speed route in France.

In America, where most areas are starting from a deficit of passenger rail options, the cachet of high speed rail projects may distract from building a functioning (electric) regional and commuter rail system where appropriate. With a wider dispersion of population such as in the West or between major business centers like New York and Chicago, high speed rail projects will be a more feasible and practical option. One could imagine, for instance a high speed line that ran from New York to Chicago with stops in Pittsburgh and Cleveland. On the other hand such a route would benefit from coordinated regional lines from surrounding cities, as well as a local train system. Because of the low friction of rails, ordinary express trains can maintain speeds of well over 100 mph on well maintained tracks which are fairly straight.

A systemic approach to rail is preferable to a sole focus on single marquee projects that advertise an intention but may overshadow equally useful regional and local rail projects. California’s High Speed Rail initiative is a good start but it is only the starting point for improving rail infrastructure in the West.

The electrification of trains does not in itself solve the multiple problems associated with transferring more people-moving and freight tasks from the roads onto rails. A railway can typically carry more freight or passengers per unit area than a road system yet a bi-directional dual track corridor is less flexible than a multilane highway, which can carry both passenger and freight vehicles. In the United States, railways are oriented mostly towards freight while in Europe, passenger rail predominates to the detriment of freight. As anyone who has traveled on Amtrak outside the Northeast knows, heavy freight and passenger traffic do not mix well on rails, so a stable solution would be to have separate passenger and freight tracks in most situations. High speed rail adds an additional set of tracks on routes where this is feasible. A high volume of rail traffic can also interfere with road traffic and interfere with surrounding communities unless grade separated and with pedestrian overpasses or underpasses.

Building more sets of rails, reviving existing rails, grade-separating road and rail and then electrifying those rails are all projects that require large public and/or private investment. The extent to which the United States or for that matter other advanced industrialized countries will pursue a strategy of pushing most transport onto rail will depend, in part on both the commitment to rails as well as a cost accounting of the alternatives and the need for immediate action on climate, energy and transport.

Magnetic Levitation (Maglev) Rail

While the land speed record for passenger rail is still held by the TGV, magnetic levitation rail holds out the possibility of trains that can cruise at a higher rate of speed than ordinary rail. While ordinary trains on well-maintained rails encounter very little friction as compared with wheeled transport on roads, magnetic levitation reduces to practically zero the friction of the train with the track by lifting the train up over the surface of a specially prepared track through the force of electromagnets that repel each other. It is not yet clear whether the additional expense and energy requirements of a maglev system have a significant enough advantage over a high speed rail system to warrant those one-time and on-going expenditures. The only maglev train in operation is a shuttle between Shanghai city center and Pudong airport, a 30 km (18 miles) trip that is covered in 7 minutes, 20 seconds, reaching at one point 267 miles per hour (421 km/hr). There is a controversial proposal that a maglev line be built between Disneyland in Anaheim California and Las Vegas, though such a project seems designed more as a tourist attraction than a replacement for either road or high volume air traffic. Maglev is yet another step into the realm of high profile newer technologies that while potentially promising, are even longer-term prospects than building a functioning rail network of any description.

New Electrified Urban and Commuter Rail

Even in the United States during the cheap fossil fuel era, some urban and commuter rail projects were built as a sign of urban revitalization and smart development efforts. While subways were usually built in the pre-1970 era of massive infrastructure projects, surface rail projects, sometimes called light rail have been built more recently in cities like Portland that were modeled on European street rail systems. These rail projects can operate both above and below ground, thereby blurring the distinction between subway and surface rail. Los Angeles’ Metro light rail system with underground and surface segments, which initially was considered by critics to be an expensive feel-good project, may start to become more useful to Angelenos as high oil prices start to take their toll.

While light rail is popular with commuters, there are controversies associated with it, including whether to grade-separate light rail from automobile traffic and pedestrians. While the initial selling point of light rail was its lesser expense than subways, grade separation adds considerable additional expense. A controversy in Los Angeles about a new line to the West Side, now splitting formerly allied transit advocates, illustrates some of the tough issues associated with the degree to which streetcars are integrated or separated from traffic.

The implementation of regional or suburban commuter rail on existing tracks would seem to be less expensive, though coordinating and balancing passenger traffic with freight traffic remains a challenge. The electrification of stretches of rail will require coordination between private freight companies that own the rights of way and the public agencies that now run US passenger rail.

Electrified Roadway Systems


Trolleybuses are one of the “sleeper” solutions to our climate and energy concerns in urban, suburban and even medium-sized towns. Almost any bus route can be turned into a trolleybus route with the installation of overhead wiring, making them substantially less expensive per mile to build than rail-based systems. Trolleybus systems were most popular in the middle of the 20th century and remain particularly widespread in cities of Central and Eastern Europe. The advent of cheaper and more flexible diesel bus systems led to a decline in trolleybuses which of course require the greater initial capital expense. In the US, trolleybus systems are operating in San Francisco, Seattle, Dayton, and Boston. Dayton has used electric public transport for now almost 120 years continuously.

Trolleybuses are ordinary buses with an electric motor instead of a diesel engine and twin trolley poles on top that connect the bus to the electric grid. Because electric motors have greater torque than equivalent diesel engines trolleybuses are well suited for very hilly cities and are equally good at flat stretches with excellent acceleration and high power-to-weight ratio. Negatives for trolleybuses, as for all transport systems using overhead wires, are the visual appearance of wires and designing the system to enable buses to pass each other. Transit riders also prefer riding smoother railed systems and while trolleybuses avoid the smell of diesel buses still share the ride quality of other buses. Also trolley poles can come off the wires requiring manual or automatic pole replacement. As climate and energy concerns rise in importance, the drawbacks of trolleybuses start to seem trivial or mere technical challenges.

Bus-Rapid Transit and Trolleybuses

Bus Rapid Transit (BRT) is a system that segregates bus traffic from other traffic, allowing buses to achieve average speeds closer to 20 mph including stops rather than the more typical 8 mph in regular traffic. BRT can be applied to any buses but if combined with Trolleybuses, BRT allows trolleybuses to achieve faster travel speeds through crowded urban and suburban streets than when intermingled with traffic. The much studied transit system of the Brazilian city of Curitiba makes extensive use of BRT.

Grid-Optional Road Vehicles

A very exciting area of growth despite little attention has been the development of “dual-mode” or hybrid road vehicles that can travel attached to the grid or can use a battery or diesel engine to travel independently of the grid for a few miles or many miles. Newer trolleybuses now have a battery pack that allows these buses to travel a few miles on battery power alone. Currently in operation in Boston is a dual mode diesel and electric trolleybus called the Silver Line, which travels from Logan Airport as a diesel bus then attaching within a minute to overhead wires to traverse a dedicated BRT/subway into the center city. While currently something of a novelty, this type of re-attachable vehicle will have a vast set of applications in a world of diminishing oil and rising climate concern. One can imagine long-distance trucks that take advantage of grid electricity on stretches of highway, detaching from the grid to make deliveries and then returning to use grid electricity on truck routes.

Electrified Highways

With grid-optional road vehicles that can detach and reattach to the grid either in staging areas or on the go comes the possibility for road-going dual mode trucks and buses to use the grid to travel long distances just as do trains but with greater flexibility. An electrified highway with overhead wires allows all-electric or dual-fuel large road-going vehicles to travel long distances without carrying large batteries. A challenge in such a set up would be maintaining voltage levels in such a wire as demand for power would be unscheduled unlike that experienced in a closed train or trolley system. The power management system as well as the attachment and reattachment devices for such vehicles would require some development and testing. Electrified highways could enable the continued usage to something approaching their capacity of existing highway infrastructure in tandem with railways in an era of ever more expensive fossil fuels.


As suggested above, a trolley or pantograph can be mounted on any vehicle with a electric motor as a means to connect the vehicle to the grid for energy. Trolleytrucks have been used in urban delivery and in mining operations. If electric wires can be strung over or next to a field, tractors could use trolleys rather than batteries to do work in the fields. 18-wheelers and other long-distance trucks would be naturals for using a trolley, if catenary wires are strung over highways. An energy storage medium, either a battery or an electric generator using liquid fuel, an electric motor, and a trolley to tap into electric can allow any vehicle with tires to become a grid-optional vehicle.

Personal Rapid Transit

A new system of public transport has been under study for the last 20 years that seeks to combine the best of private vehicle use with public transport. Personal Rapid Transit or PRT uses advances in computer control and satellite navigation to create a system of automated 4-6 person lightweight vehicles or “pods” on an elevated or ground-based track that can be entered by passengers at a number of stations around a network-like system. Passengers then select a destination and the vehicle then takes them to the selected end-station. Personal rapid transit has, at least in theory, the potential to be one of the most energy efficient means of transporting people in suburban or dispersed urban areas, as vehicles are only activated and use energy when there is demand for them. By contrast scheduled mass transit can usually only achieve at best a load factor of 20-30%, meaning that on average 70-80% of seats are empty on buses, trams, and subways. Especially at off hours, mass transit will generally operate at low load factors.

By contrast PRT in theory offers the possibility for higher load factors and lower energy use, especially at off hours, as each “pod” might contain only 2 to 4 seats. PRT also offers the possibility for a variety of sizes of “pod” depending upon the size of the group, though this variety would add to the complexity of PRT stations. Theoretically PRT could approach a load factor of 50% and lower overall system energy use with 24 hour availability.

PRT however is a controversial concept as its advocates have often portrayed mass transit in pejorative terms that confirm the prejudices of individual vehicle owners that riding with strangers is a dangerous and unpleasant affair. In Austin, TX, advocates of a light rail system and those of a PRT system were diametrically opposed and highly critical of each others’ plans. The lack of experience especially with rush hour conditions make PRT plans seem at the moment more theory than practice. The idea that PRT would require a new system of suspended guideways at height of approximately 20 feet over ground might be more intrusive than the ground-level transit options it attempts to replace.

It may be that in a post fossil fuel age that mass transit and PRT might both have a place in an electric transit system. PRT’s strength at off hours may complement mass transit’s strengths at rush hours.

Pulling the Ripcord

Battery electric vehicles are coming and will enable a new age of sustainable automobility. However, it will be a long time before we can store anything close to the amount of energy in diesel fuel in the same weight and volume in a battery. To enable electricity and eventually renewable electricity to power transport as soon as we need it, an electric transport infrastructure that directly powers trains, trolleybuses, streetcars, and perhaps other work vehicles from the grid will enable commerce to continue without a dependence on scarce fossil fuels.

To do this, governments and large companies involved in transport need to start planning for and investing in the post-fossil fuel world. It requires a leap but, given the chaos that fluctuations in oil markets can deliver to our economy, the leap to an electric transport infrastructure is a necessary one. In California, we have an opportunity this fall to the take the first step, but this is only a first step on a long road. Government should take the lead, as building the transmission and distribution infrastructure for electric transport requires the reach and authority of government. On the other hand, supplier firms can help create markets for their products and services by alerting government officials to current and near-future technical possibilities.