Energy units
BTUs (British Thermal Unit)
1 BTU = heat necessary to raise 1 lb. of water from 60º to 61º F. @ sea level mean
atmospheric pressure
1 Quad = 1015 BTUs
Joules
1 joule = “the amount of work done by a force of one newton moving an object
through a distance of one meter”, where
1 newton = amount of force required to accelerate a mass of one kilogram at a rate
of one meter per second
Roughly, the energy to raise a small apple overhead
Watts (electricity; kilowatts, megawatts, gigawatts, terrawatts...)
1 watt = 1 joule of energy per second
(1 watt-hour = 3600 joules)
Barrels (crude oil)
1 bbl = 42 gallons = 5,800,000 BTUs
Therms (natural gas)
1 therm ≈ energy equivalent of burning 100 cubic feet of natural gas
1 therm ≈ 100,000 BTUs
Energy Flow, 2008
(Quadrillion Btu)
Petroleum Flow, 2008
(Million Barrels per Day)
Natural Gas Flow, 2008
(Trillion Cubic Feet)
Coal Flow, 2008
(Million Short Tons)
Electricity Flow, 2008
(Quadrillion Btu)
Considerations of Energy Policy
●
●
Long-standing objectives
●
Macroeconomic stability
●
National Security/Security of Supply
Emergent objectives
●
Environmental (Pollution & Climate Change)
●
Ethical (sustainability)
Energy Policy Considerations: 1) Macroeconomic stability
$120.00
12.0
$100.00
10.0
$80.00
8.0
$60.00
6.0
Oil Price (constant $s; left axis)
Unemployment (%; right axis)
$40.00
4.0
$20.00
2.0
$0.00
0.0
1960
1970
1980
1990
2000
2010
Energy Policy Considerations: 1) Macroeconomic stability
Energy Policy Considerations: 1) Macroeconomic stability
(EIA Price Projections)
Energy Policy Considerations: 2) Security of supply
●
Geopolitics
●
U.S. embargo of Japan ‘40-’41
●
OPEC embargo of U.S./Europe ‘73
●
Iranian Revolution ‘79
●
Russia’s energy politics with natural gas ‘08
●
etc.
Energy Policy Considerations: 2) Security of supply
Energy Policy Considerations: 2) Security of supply
Energy Policy Considerations: 3) Climate Change
●
“Anthropogenic GHG emissions”
●
Primarily from fossil fuel combustion in
–
Electricity
–
Transportation
Energy Policy Considerations: 3) Climate Change
New wrinkle: Climate Change
Energy Policy Considerations: 4) Sustainability
Petroleum
Natural
Gas
Coal
CONSUMPTION
RESERVES
EXHAUSTION
Thousands of bbls/day
2008
Proven Reserves
(billion bbls.)
Estimated years until
exhaustion:
85751
1332
42.557
Billions c.f./yr (2008)
Proven Reserves (trillion c.f.)
Estimated years until
exhaustion
110362
6212
56.287
Thousands of short
tons (2008)
Proven Reserves (millions
short tons)
Estimated years until
exhaustion
7238208
930423
128.543
Energy Policy Considerations: 4) Sustainability
Energy Policy
Obviously, we’re highly vulnerable to supply shocks
- short-run DD is less elastic than long-run DD
How do we currently address this vulnerability?
- military defense of supply lines
- promote “energy independence” through domestic resources:
- offshore oil (“drill baby drill”)
- nuclear power
- coal
- renewables
- “negawatts”
Energy Policy
(cont’d.)
Does success in the current strategy sow the seeds of failure in the
future?
When energy prices are kept low, behavior adapts to:
- buy/drive bigger cars
- live farther from work
- build bigger houses, less-well insulated
- generally: lock in future energy expenses that make us
more vulnerable, not less
When we promote domestic sources of exhaustible resources
it amounts to a policy of “Drain America First”!
Energy Policy
(cont’d.)
1) To promote macro stability:
- end dependence on volatile international commodities
2) To promote security of supply:
- promote development of domestic resources
3) To promote climate stability:
- promote substitution away from fossil fuel combustion
4) To promote “sustainability”:
- raise prices to reflect MUC (not just MEC)
Policy Implications?
1) Tax fossil fuels to raise the price
2) Promote (through subsidies and market access policies) non-fossil
fuel domestic resources such as
a) wind, solar, geothermal
Note: policies to promote coal & nuclear work against \the
“sustainability” objective, though they promote the other 3
In Conclusion...
...
...
...and...