YET ANOTHER BUBBLE
One of the most over-used solutions to many of our recent national problems have been met with a clarion cry by supporters from multiple constituencies to just "Go Green".
The rallying cry has been pushed as the answer to so many of our problems from the environment to energy, to our currently sagging economic picture. Going Green has becoming a mainstream band-wagon, with politicians, business-folk of all stripes and sizes, the media and the scientific community, along as passengers. All this is a good thing, but we need to be careful that we don't get carried away again.
Joe Weisenthal of Clusterstock has a post that encapsulates the current situation well:
The basic idea: Through alternative energy, we can achieve energy Independence, choking off cash from our enemies. Nice idea, but riddled with problems..."
Fast forward, and now the big concern is the crumbling economy. Once again it seems the solution to our problems happens to be "green".
Both candidates for President have promised scads of green jobs, even though the promises don't really make any sense."
Especially egregious is the way both Presidential candidates promise millions of "Green Jobs" to mainstream folks like Joe the Plumber and Joe Six-Pack, as Joe of Clusterstock notes in a post from a week ago:
As of last year, the US oil and gas industry employed 1,772,000 workers in
all categories, spanning exploration & production, refining,
transportation and distribution. Nor are they all engineers and
highly-paid drilling specialists. Nearly half this figure was
associated with employment in service stations. Collectively, these 1.8
million people produced, processed and delivered fuels carrying 33 quadrillion BTUs of energy, or "quads", to US consumers and businesses. That's a third of total US energy consumption and 46% of US energy production. On average, it equates to 18.6 billion BTUs per worker, or 3,100 barrels of oil equivalent each, annually."
In order to come up with a comparable productivity metric for renewable energy, we need to make some assumptions about how much this sector will produce when it reaches its anticipated employment of 5 million Americans.
It must be a lot more than the 1% or so of electricity and
7% of gasoline currently supplied by wind, solar power and ethanol. If
we combine the 36 billion gallons per year of biofuel targeted for 2022 under the federally-mandated Renewable Fuel Standard with the 20% of net electricity generation from wind by 2030 posited by a recent DOE study,
as a proxy for all new renewable electricity, the total equates to
roughly 14 quads per year.
And that's giving the kilowatt-hours from
renewable electricity the benefit of a gas-fired turbine heat rate,
rather than the normal engineering conversion, which is 2/3 lower. The resulting productivity figure works out to 2.8 billion BTUs per green energy worker, or 470 barrels of oil equivalent per year.
On that basis, we should expect that the average energy productivity of this huge new renewable energy sector would only be about 15% of the productivity of the current oil and gas industry."
But it's symptomatic of a misguided focus on jobs, rather than efficiency or productivity."
Going Green is unquestionably a very good thing for the country over the long-term, with so many advantages and benefits. Let's just not over-hype it like we did so many other good things, like the promise of the Internet, the benefits of low-interest rates, the advantages of middle-class home ownership, the use of derivatives for better, more efficient markets, and how the iPhone will really change our lives.
Just this time, let's try and not to create a "Green Bubble" like all those other Bubbles, which started with good intentions and the promise of a very good thing in the long-term.