Get Smart about Your Energy Future

First Published: 2012-06-14

I’m going to try to have an honest conversation about our energy future, climate change and what it means for you as a member of the generation that will have to live with the consequences of today’s energy policy choices. My goal is to present an argument based on easily verifiable facts and to appeal to your common sense.

On October 31, 2011, the world’s population reached 7 billion. By the middle of this century the population could be close to 10 billion. Consider also that about 1/3rd of those folks have never flipped on a light switch. There should be no doubt that we must all be concerned about how the world will meet its energy needs in the future. There may be no greater challenge facing mankind.

A Review of History

The youths of today are being told that by the time they are my age the world will no longer be powered by fossil fuels. That’s the same story they were telling me in 1973 when Saudi Arabia suddenly got miffed about the Yom Kipper War and created a crisis by suddenly shutting off our oil supply. In those years, the “scientific consensus” was that the world was running out of oil, the earth was cooling, fossil fuels were to blame and we were all going to freeze to death unless we kicked our addiction to fossil fuels.

We were told that we needed to find alternatives to fossil fuels, and fast! President Jimmy Carter declared that we would be out of oil by 1990 and said that developing alternative energy was the “moral equivalent of war.” The challenge was considered too important to leave to market forces so the government intervened with massive tax-payer subsidies in an attempt to find alternatives to oil. That thinking led to the 1977 National Energy Plan in the United States, an attempt at central planning that failed miserably. We are still heavily dependent on foreign oil.

Fast forward to today, and we see the situation has not changed much, except that now the “scientific consensus” is that the earth is getting hotter rather than colder and that humans are to blame. Once again we are told the world is running out of oil and we are all doomed unless we find alternatives to oil, gas and coal … fast! And guess what … we are also being told again that the job is too important to be left to the free-market entrepreneurs, that government must intervene and subsidize the alternative energy initiatives with huge tax-payer subsidies.

The doomsayers in the 1970’s were remarkably wrong then, and I will wager that the doomsayers of today will be wrong too. In the last 35 years the world has consumed more oil than three times the known oil reserves when Jimmy Carter made his declaration. And the known oil reserves today are more than double what they were then.

Climate Change

The mainstream media has a penchant for being alarmists when it comes to promoting the junk science of global warming. I have read much of what has been written on the subject for the past many years and have a thick file on the subject. My investigations and research have convinced me that the claims by the mainstream media, the environmentalists and the socialist politicians are deliberately intended to mislead the public in order to further their personal agenda, one aimed at controlling your life and taking more of your hard-earned money.

I agree with those who say that planet earth is warming. The rate of warming has been about 1 degree during the last 100 years—the same rate of warming that has occurred since the end of the last “Little Ice Age,” a period during the 16th to the 19th century.

And yes, research has indicated that carbon dioxide in the upper atmosphere has increased during the same period from about 250 to about 380 parts per million (that’s 0.00038). That means that the gas we exhale and the gas that plants need to grow is a small trace making up only one out of every 2,500 molecules in the atmosphere. Nevertheless, it is an important element because without it the earth would be a lifeless ball covered in ice.

Some scientists think that humans are responsible for that small increase; however, there is little agreement on how much warming might occur in the future, or how much might be due to man, or what the impact of that warming might be, or how we might all adapt to a modest increase in warming. Mark Twain said we should respect those who seek the truth, but be wary of those who claim to have found it. I am wary.

Water vapor is the most important greenhouse gas, and much more potent than CO2; so if CO2 is a “pollutant” then water vapor is a much greater pollutant—an absurdity. Scientists do not agree on how to include water vapor, clouds, precipitation and evaporation in their computer models. Some believe that clouds amplify the effect of CO2 and others believe that precipitation beneficially acts as the earth’s thermostat to control warming and cooling.

Several highly respected scientists believe that adding CO2 to the atmosphere may be beneficial because it increases biodiversity and helps plants grow. There is no wide-spread consensus or agreement.

Dr. William Gray, head of the University of Colorado’s tropical meteorological research and prediction center for 40 years has recently concluded that their seasonal hurricane forecasts of the last 20 years have not proven to be accurate. Do you really think that politicians and environmentalists can truthfully predict what planet earth is going to do decades into the future? Don’t be fooled.

“Cap and Trade”

Although the scientists have not yet reached a consensus, it does not prevent many politicians and environmentalists from continuing to deny reality and be doomsayers to further their own agendas. Under their proposed carbon dioxide regulation—so called “cap and trade”—government would tax carbon energy to encourage companies to invest in lower carbon technologies. The added costs would be passed on to consumers and the cost of almost everything would go up because most of what we consume contributes to our carbon footprint.

In essence, it’s a tax on how we live our lives, and it will be a windfall for government revenues. The goal is an 80% reduction in emissions by 2050. If you do the math you will discover that to achieve the goal, your carbon footprint will have to be about 2 tons per year. The last time an individual’s carbon footprint was that low was in about 1620 when the Pilgrims arrived on our shores. Therefore, if the politicians and the environmentalists have their way, by the time you are my age, you young folks will not be allowed to use anything made with fossil fuels! Fortunately, it won’t work until we have alternative energy sources that are economically acceptable, but this will not prevent wasteful spending in an attempt to deny reality unless you stand up and object.

What about wind and solar energy?

The reasons alternative energy such as solar and wind will not make a significant contribution is not about our desire to make it happen or lack of technical innovation; rather it is about the immutable laws of nature and thermodynamics. These physical laws recognize that the usefulness of energy (its ability to do work) decreases over time and space. This is common sense. Thus, by the time sunlight reaches the surface of the earth, it is highly diffused and thus, has lost much of its useful energy. The energy in wind is also highly diffused and unpredictable. Trying to harness energy from wind and solar is like trying to make hydroelectric power from the rain.

When energy is highly diffused like solar and wind it is not economically feasible on a large scale, and never will be because it requires massive investments to concentrate solar and wind energy into a form that’s useable on a meaningful scale, such as supplying base-load power on the grid. Besides, the wind does not always blow and the sun does not always shine.

For example it takes about 500 windmills occupying about 40,000 acres of land to generate the same amount of energy as one 1,000 megawatt clean-energy, low-carbon gas-fired power plant. As of September 2010, the largest photovoltaic solar power plant was located in Sarnia, Ontario. It requires 950 acres of farm land containing 1.3 million thin-film photovoltaic panels to produce 80 MW of energy. It would take about 12 of these plants to generate the same amount of energy as one gas fired power plant. These thin film panels are only about 15% – 20% efficient; the other 80% of the energy goes into the atmosphere as heat. The large state-of-the-art El Dorado solar plant near Las Vegas operates primarily on natural gas; the solar energy supplements the gas power when it’s available — in fact, it is a misnomer to call it a solar plant.

Wind and solar together contribute less than one-half of one percent of our energy consumption in N. America, and if the contribution is doubled and then doubled again in the next decade it will still only represent an insignificant percent of the total.

It should be no surprise that there is a worldwide building boom in new coal and gas-fired power plants—about 200,000 MW in total, including about 30 plants under construction in the US that will burn over 70 million tons of coal per year. They will all be needed to meet the world’s demand for energy.

Trillions have been spent on infrastructure to support our energy systems—production platforms, power plants, distribution systems, transportation systems, including our cars and trucks and airplanes. Changing that infrastructure to accommodate alternative energy systems will take decades and massive new investments. To be clear, we need all the solar and wind power the markets can deliver; however, they are not “alternatives” to fossil fuels; at best they can supplement fossil fuel if they are at prices we can afford.

Realize that the world’s demand for energy is going to grow about 30% to 50% during the next two decades. The world will need all the energy it can produce—oil, natural gas, coal, nuclear, solar, biofuels and geothermal. There are no near-term alternatives. The US government’s own forecast indicates that fossil fuels will continue to supply about 85% of the world’s energy demand for the next several decades. We are all going to suffer greatly if it’s shut down.

Let’s get efficient.

The quickest and easiest ways to reduce our dependency on fossil fuel is to improve our energy efficiency, stop wasting so much of it, and conserve more. We should also get over our irrational fear of nuclear energy. It can be the safest and cheapest form of energy because it is readily available and the highest concentrated form of energy there is.

When we say fossil fuels we naturally think of oil; however, natural gas provides about one-fourth of the energy needs in N. America. Natural gas emits about half as much carbon dioxide as coal when used to generate electricity. When natural gas is used to power cars and trucks the carbon emissions are cut by about 30% and NOx emissions are cut by 90%. When used to heat your home, natural gas cuts carbon emissions by 30% to 50% compared to fuel oil or electricity. And besides all those benefits, the cost of natural gas is significantly less than the cost of oil and gasoline.

The US Intergovernmental Panel on Climate Change recommended that low carbon natural gas be used instead of oil and coal to provide energy in many applications. In 2008, the energy industry discovered how to release huge amounts of natural gas from shale. The known natural gas resource base now exceeds 100 years of supply and it’s getting bigger. Furthermore, it is relatively easy to convert coal-fired power plants to clean-burning, low-carbon, domestic-sourced natural gas without massive new investments in infrastructure.

Greater use of natural gas is an efficient and effective way to continue to use readily available fossil fuels economically while waiting for technical breakthroughs in other alternative energy sources.

Let the free market work.

Surely, by now we should have learned from history that free-markets are best able to determine how much energy gets used, what type of energy is used, and where, how and by whom energy gets used. No form of energy is perfect and only individuals operating in a free society can determine the advantages and disadvantages of the different forms of energy. Again and again, governments have failed remarkably in their attempts to make these decisions on your behalf as they quietly pursue their own agendas through central planning. The proper role of government is to maintain a civil society that protects your individual rights and make sure that free markets are allowed to work.

Don’t under-estimate mankind’s adaptability.

Keep in mind that mankind has proven to be remarkable adaptive to his environment. Approximately 1/3rd of mankind lives in tropical climates where temperatures routinely exceed 100F. Similarly, many live in the far north where temperatures are below zero most of the year.

Polar bears too, are remarkably adaptive. They have survived dramatic climate changes for thousands of years. During the “medieval warm period” (1000-1300 AD) large portions of the artic glaciers disappeared and yet the Polar bears did fine. They do not die from drowning; they die from gun-shot wounds. Nevertheless, the latest Canadian government survey of polar bears roaming the vast Arctic expanses of northern Quebec, Labrador and southern Baffin Island show the population of Polar bears has jumped to 2,100 animals from around 800 in the mid-1980s. In other words, quit worrying about the Polar bears and instead, worry about how you are going to afford to heat your home and drive your car in the future.

Our dilemma is our inability to reconcile our prosperity and way of life with our environmental ideals. We want our cake and eat it too. We don’t like being dependent on foreign oil, but we put our own domestic oil off limits to exploration and development. We hate paying $4 or $5 per gallon for gasoline, but we haven’t allowed a refinery to be built in N. America in over 30 years. We expect the lights to come on whenever we flip the switch, but we don’t want coal, the source of about 40% of our electricity. Hydro power provides much of our electricity, but we don’t want to build anymore dams because the environmentalists think they are inconvenient for the fish.

My generation has been fortunate in being able to live during a time of relative freedom and abundant energy that we could afford. This situation allowed our way of life to advance to a much higher level of self-actualization.

I wish you too freedom, prosperity and abundant supplies of environmentally-friendly energy at prices you too can afford. Whatever you do, do not take abundant freedom or energy for granted … you have to be part of the solution because both are being eroded.

The energy debate must continue; hopefully, my remarks will provoke and contribute to informed discussion and good choices about your energy future.

Respectful and intelligent comments welcomed.

Mr. Marwood has over 40 years of international business experience, including 30 years working with the Caterpillar organization in the USA, Europe, Africa, the Middle East and Asia. Born and raised in Canada, he obtained a MSc. Degree (engineering) from the University of Guelph and later, an MBA degree from the University of Chicago.

During the past 15 years, he has successfully led several turnaround and restructuring assignments for a variety of Canadian businesses in the high-value capital equipment industry. Mr. Marwood is certified as a Six-Sigma Deployment Champion and has used the methodology to improve sales and profit growth.

Recently, he started his own consulting firm, MMARCO International Services Inc., specializing in strategic consulting, executive coaching, international marketing, business planning, restructuring and turnarounds for SMEs.

He has long-standing ties with the private and public sectors and has served several organizations in a variety of capacities throughout his international career. Mr. Marwood is currently is serving the community as a member of the Board of Directors of WEtech Alliance Network, Downtown Windsor Business Accelerator, and Windsor-Essex Community Health Centre, as well as the LBA. He is also a coach and mentor for the University of Windsor’s Centre for Enterprise and Law and the New Canadians Centre of Excellence Inc.

Mr. Marwood recently published Professional Nomad, a memoir that recounts his on-the-job successes, failures, and frustrations intertwined with recollections of personal adventures, alongside reflections on ethics, morality, spirituality, and the epidemic of mysticism that destroys the lives of so many. Professional Nomad is not only a reference for those aspiring to a successful career in international business; it is a blueprint for a flourishing life—personal as well as professional—one lived with passion, determination, and ultimate satisfaction.

Help support The Nassau Institute