Fueling America: We need a Strategy.

This week we celebrate Independence Day in America. Ironically, we're more dependent than ever before.  We live in a global economy where the lines between independence and interdependence blur noticeably.

There are many circles through which the world is linked.

This week the NY Times ran an interesting article on why flooding in the upper mid west might have a big impact on the price of fuel in the future.

Floods that wipe out corn crops limit the availability of raw stock to be converted into ethanol, thus driving up the price of fuel.  Corn is a less-than-attractive base for ethanol because it is a primary feedstock for cattle and poultry.  When there isn't enough corn to feed the livestock,  the price of food goes up, not only in transportation, but in the basic cost of protein. Because the US exports considerable amounts of beef and poultry, the rain in Iowa can drive up the cost of chicken in Shanghai.

America needs a diversified, comprehensive energy strategy. Ethanol is part of it, but needs to be based on high efficiency raw stocks like switch grass, which do not compete for food resources.  We also need sources of renewable energy that aren't so highly influenced by weather.   Hydrogen is one such source, if derived from wind energy and water.  Syn fuels such as Dimethyl Ether (DME) produced from coal is another. Part of the strategy might be to lower import taxes on Brazilian ethanol.   Frankly it would be good for the Americas if the US had another major energy source other than Venezuela in this hemisphere.

The United States needs a combination of fuels and production methods that allows the country to leverage our assets such as coal, farming efficiency and technology to get away from imported oil. This is the number one issue in America to me.  Democrat or Republican, whomever has the best strategy for energy will get my vote in November.

I see this as a national issue deserving of the urgency that John F. Kennedy put into putting a man on the moon. We need a combination of academia, industry and government to push this forward.

Research universities to help do the pure R&D, Industry to develop the fuel, farmers to grow the feedstocks, Industry again to create the vehicles to consume the new fuels Congress to give tax credits to help fund the development and the transportation industry to move it all around. We also need the Environmentalists.   

Environmentalists, mind you not the crazies, but science based groups to not only watchdog the development, but also to help industry and government identify the natural impacts of green development.  Things like working with wind turbine makers to help identify bird and bat species that might be killed or injured by the blades. Designs that are complimentary to nature need to be developed and deployed.   Raptors are particularly susceptible. Fewer raptors means more rats. More rats means less corn.  Less corn...less ethanol.   Its a circle.

This is the key strategic issue for the 21st century.  We have no need to be in the Middle East when we can fuel America at home.

Eric

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Comments

[Clement Wan]

I think it's remarkable that McCain has been one of the few politicians that is willing to go into places like Michigan to flog free trade but he has flipped on corn based ethanol in Iowa.

The one cool idea that I like from McCain is the use of prizes instead of subsidies or direct investments trying to bet on what the best technology will be. I'm no sure if you're familiar with the Progressive Automotive X-Prize which was patterned after the Ansari X-Prize for private space crafts. That could do more for energy prices than any politician can.

It is insane though that the US government would limit exploration and development of oil when it needs it the most (Obama is especially guilty of this). Politicians seem not to understand that if the markets anticipate greater supply in the future it will drop demand today.

I really don't think that the situation is nearly as bad as to expect the government to "do something" particularly given the billions that are now going into research for the simple fact that oil prices are so high (for some amazing tech check out biofuels made by bioengineered e-coli or www.nanosolar.com which is now supposedly producing commercially viable solar). Unfortunately I think the reality is that almost anything politicians do in the short term may feel good (e.g. dragging CEOs before congress), but do no good, or worse, result in higher prices in the long run. Not being American, I don't envy your choice - with both politicians advocating policies of intervention and populism.