by Jerome a Paris
Fri Nov 10th, 2006 at 09:01:14 AM EST
Here we go (via an interview of Al Hubbard, director of the National Economic Council, in the Financial Times):
'Energy independence' on Bush agenda
The Bush administration will soon launch a big "energy independence" initiative, likely to include renewed emphasis on biofuels, as part of an attempt to regain the political initiative following the mid-term elections.
Political analysts say a bold energy initiative could help Mr Bush regain some political momentum, while buttressing Republican support in the farming states of the west and the Midwest, where Democrats made inroads.
This is exactly what needs to be avoided: the topic of energy independence grabbed by the Republicans and Bush, and the focus put exclusively on producing more.
"I actually think from talking to Democrats they have the same concerns we do," Mr Hubbard said. "They are concerned about energy, and recognise that we need to accelerate our efforts to cure our addiction to foreign oil."
He said Mr Bush wanted to ensure there were the right "incentives to invest" in alternative fuels.
The rest of the article discusses various technologies to produce ethanol and other biofuels, which so far seem to be the sole focus of this new initiative.
I find this deeply worrying, for the following reasons:
- the focus is only, as can be expected from the Republicans, on producing more oil or oil-equivalent. There's no intention to focus on energy efficiency and conservation in any way
- the focus is essentially on biofuels, which is unrealistic as an energy solution (of course it's smarter politics) and will ony serve to bring more subsidies to energy production, when what is desperately needed is less subsidies, or at least better focused subsidies. The agribusiness is the only sector I can think of where the economics are more distorted than the energy world, so bringing it into the picture can only make things worse, not improve them;
(On distortions, note these two articles today, on how badly ag. subsidies worsen the world water situation and about Archer Daniels Midland's attempts to barge onto the subsidy teat);
- by making it appear that the energy crisis can be solved in a painless way for drivers, this perpetuates the impossibility to bring about real policy changes - those focusing on demand reduction
But hey, The Bush administration is in good company. The International Energy Agency, via its newly updated "World Energy Outlook" (its yearly analysis of the energy markets), is essentially suggesting the same solution despite dire and increasingly shrill warnings abotu the gravity of the situation:
Reliance on oil 'sets us on path to crisis'
The world is on a course that will lead it "from crisis to crisis" unless governments act immediately to save energy and invest in nuclear and biofuels, the International Energy Agency warned yesterday.
In an apocalyptic forecast, Claude Mandil, the agency's executive director, said that our current path "may mean skyrocketing prices or more frequent blackouts; can mean more supply disruptions, more meteorological catastrophes - or all these at the same time".
The IEA said the oilfields on which Europe and the US had come to depend to reduce their reliance on the Organisation of the Petroleum Exporting Countries would peak in the next five to seven years.
The three countries on which the world will depend most for its future oil supply, Saudi Arabia, Iran and Iraq, are also among its most unstable.
The EIA forecasts on future oil production have already been called full of shit by the CEO of Total, the French oil major (and the fourth largest worldwide after ExxonMobil, BP and Shell), and have been contested by others (including myself - that story is about the EIA, the US DoE body, not the IEA, but both have pretty similar numbers).
Although the IEA focuses, like Bush, exclusively on alternative energy sources (nuclear and biofuels in their case), there is an unescapable reality that we are going to need to reduce our consumption of oil pretty soon that percolates through their report, and that this is most likely to happen through skyrocketing prices if we do not preempt the change.
Biofuels will only provide a small fraction of the needs (at a pretty high cost), and will not be a magic bullet. Focusing on them as a priority is short-sighted and essentially useless.
But in the meantime, the theme of energy becomes a presidential issue, and the Republicans get to set the agenda there.