President Elect Obama is trying to solve the financial crisis and issue a new energy policy. He will need much helpful advice from advisors in economics and energy. Previous correction measures to financial market crises and to energy consumption and supply have failed. After announcing his economic team, Mr. Obama must select the energy team. It is important that he seizes the moment and finds qualified energy practitioners.
Economics is often called the dismal science because of an article written by Thomas Carlyle more than 150 years ago. In it he proposed mockingly to reintroduce slavery to control labor markets. During modern times, this moniker proves to be a prophetic choice. Modern economics have, after all, brought us not only free markets and unimaginable monetary rewards for the few chosen ones, but have also produced the great depression of 1931, the world financial crisis of 2008, and 12 recessions in the intervening 75 years.
Just imagine a similar performance record for airplanes, skyscrapers, nuclear power plants, and bridges!
The financial damages inflicted by systemic deficiencies in our economic infrastructure are unbearable and must not be tolerated any longer. These deficiencies are manmade and are caused by regularly failing institutions. Yet, we not only continue to support these institutions, but bail them out without conditional provisions that prevent them from paying irrational bonuses to their management and using the bailout funding for starting the engineering of the next recession, depression, or financial crisis. Crises are the occasions when the chosen cash in.
Obama has committed himself to bring change to our country. He has promised to address the lingering energy crisis during his presidency. It now appears that he too is following the battle cry of the unholy alliance between industry and environmental groups and is demanding the conservation of energy to save the planet. This demand is not based on scientific facts but on belief in dismal science. It also will waste billions of dollars spent for doomed-to-fail conservation efforts.
Energy conservation and Cap and Trade concepts cannot save our planet from overheating, cannot slow sea level rise, cannot prevent climate changes, and cannot save animal and plant species from extinction. However, they will significantly increase profits of energy companies and will assure that energy costs will continue their only occasionally interrupted rise into the sky.
In 1997, a comparably small number of industrialized countries in Europe and across the world signed the Kyoto Protocol. The signatories to this agreement committed themselves to reduce their greenhouse gas discharges and especially their carbon dioxide emissions in future years. Virtually all of these emissions are produced by fossil fuel combustion.
In the years following, the USA, China, India, and many other countries refused to sign because of the glaring deficiencies of the Kyoto provisions. These dissenting countries proved to be right.
The signors of the Kyoto agreements were absolutely correct on one count; the continuation of fossil fuel based carbon dioxide emissions will destroy our Earth. Unfortunately, their understanding of energy science was flawed. They made the same mistake our economists continue to make. Continuing with deficit spending and increasing leverage of financial institutions forever cannot save national economies and prevent financial crises. Similarly, continuing the discharge of fossil fuel emissions forever cannot stop global warming and related damages.
We must face reality. Conservation can at best slow atmospheric accumulation of carbon dioxide. It cannot halt global overheating. The Obama administration will hopefully have at least one qualified, influential scientist, who can debunk the prevailing beliefs in conservation and carbon taxation. Global overheating can only be stopped by ending all fossil fuel combustion permanently!
What are the available options? Fossil fuel reserves with the exception of petroleum are still plentiful. However, petroleum is getting scarce, consumption of petroleum is accelerating, and petroleum reserves will run out during the next fifty to seventy years. As long as we burn petroleum products we add to accumulated carbon dioxide in our atmosphere. Burning all our remaining petroleum reserves will double or triple past global warming.
Fortunately, we have access to two energy sources that can provide plentiful, affordable, emission-free energy for centuries. These energy resources are sun radiation and nuclear fuels. Sun energy does not produce any pollutants or wastes. Sun energy is inexhaustible. Nuclear fuels will last at least for another century, are still inexpensive, but produce radioactive waste. This waste must and can be managed. There is one unmatched advantage to these two energies; they will stabilize atmospheric carbon dioxide emissions and will end global warming.
There is one major drawback to these energy sources, too. Both energies must be converted into energy forms that world economies are accustomed to use. Nuclear fuel can be converted into electricity. Sun energy can be converted into electricity and into irreplaceable liquid fuels.
Why are we not installing facilities for converting these savior energies and stop burning fossil fuels?
The reasons are economical, political, financial, and cultural. A few explanations may be helpful.
Installing a nuclear power plant is expensive and may last ten years. Additionally, political and cultural forces in society are trying to prevent the proliferation of nuclear technologies.
Conversion of sun energy into electricity is technically not as far advanced as nuclear energy conversion. Well managed efforts for closing technology gaps can produce needed results in less than a decade. Developmental technologies like wind power conversion and direct conversion of sun energy into electricity can be installed immediately. Electricity produced with commercially available conversion equipment will at first be considerably more expensive than presently generated electricity. A reasonably large number of facilities must be subsidized initially to further advance technologies and reduce equipment costs. Continuing installation activities will also encourage development and demonstration of energy storage.
Converting sun energy into liquid fuels is still in its infancy. Only proper management and funding can develop needed technologies in ten to fifteen years. Initial evaluations indicate that liquid fuels converted from sun energy can be produced for about fifty dollars per barrel.
Why has this technology not been developed earlier? This question is difficult to answer. The question falls into the same dismal category as inquiries into the causes for the periodic recurrence of depressions and financial crises.
Answers are by definition irrational.
The Electric Car Crapshoot
Electric cars are promoted as saviors of the energy crisis. Unfortunately, they are expensive, will not reduce foreign oil imports, and will contribute to continuing, global overheating. The US needs a new, science based energy policy. Taxpayers must demand development of thermally more efficient combustion engines. Production of renewable, affordable, and storable liquid fuels must be pursued by an independent government agency.
Saving Jobs by Saving General Motors
General Motors is facing bankruptcy and liquidation. Only a drastic, deeply cutting reorganization can save the company from certain death. Investors, board, management, and union are responsible for past decay and must be removed. Board and management must resign. Investors must sell their stock. Union members should receive a negotiated buyout. A new, reenergized, unshackled, and internationally competitive company must reemerge.
Free Advice to Congress on Rejuvenating the Big Three
The automotive industry is facing financial meltdown. In return for a bailout the industry must rejuvenate itself. The US can ill afford to import automobiles and defense systems from foreign countries and pay with currency borrowed abroad. The industry must be re-energized with new organizational concepts and new products. Scientific energy efficiency goals must replace political mandates. Renewable fuels must keep the industry viable.
