Professor Mark J. Perry's Blog for Economics and Finance
The chart above is from the "BP Energy Outlook 2030" (p. 18) and shows the historical and estimated future mix of world energy sources through 2030. Some key points: 1. In the future, natural gas usage as a share of total energy will increase, oil usage will decrease, and coal's share of energy consumption will be about the same, and those three hydrocarbons will converge in 2030 at about a 28% share for each energy source. 2. Renewables (including biofuels) will increase in importance as a source of energy, but by 2030 will only represent about 5% of total world energy consumption. 3. Hydro, nuclear and renewables will converge at about a 5% share of energy usage for each source. Bottom Line: BP's projections for energy shares through 2030 is more evidence that a new world energy map is emerging thanks to advances in drilling technologies like fracking and the abundance of natural gas, and the new energy map will be increasingly centered not on the Middle East but on the Western Hemisphere as Daniel Yergin pointed out recently in the Washington Post. The projections also demonstrate that renewable energy will continue to play a very minor role as a future energy source over the next several decades, and even massive taxpayer subsidies won't change that reality.
Peak Oil may be better understood as Peak Demand. Thanks to private-sector innovation, fresh supplies of energy are flooding markets. The public sector, as best characterized by federal agencies such as Commerce, USDA Defense, Homeland Security and the VA, just consumes more to produce less every year. The private sector can solve the USA's energy "problems." We don;t need the mandated GOP ethanol program, a rural sop. We don't need Obama's Solyndra, which was crony capitalism. We need free markets.
Benjamin: "We don't need the mandated GOP ethanol program ...We don't need Obama's Solyndra ...We need free markets."Furthermore, the government doesn't have to do anything. Free markets will emerge as soon as governments stop preventing them from emerging.
Of course, it would be wise to remember that this is an "all else being equal" type scenario. The shares could easily change if a technological breakthrough came along and suddenly solar energy became cheaper and more efficient than gas and oil.
"Furthermore, the government doesn't have to do anything."This is what I find amazing. You'd think the free market would be the government's great boon. Think about it: you don't have to do anything, don't have to spend a penny, and everything happens as it should and everyone is made better off. Than the politician could say "See? Look what I did without spending a penny!"
BP "predicts" about as well as they drill.Europe is in Recession, Japan is Contracting, The U.S. is tottering on the brink, and Gasoline is $0.27/gal Above the Year Ago Price, which, itself, was the All-Time High for this time of year.Call it "peak oil," peak demand, or call it a pickle; We're in a World of Trouble.
Rufus IIAre we in a world of hurt? Have you gone to cngvehicles.net?You can buy a CNG van, right now, today, off the lot for under $15k. And drive around on natural gas. Oh, such a world of hurt---except we get cleaner air and lower costs.
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That's right, Benji, I could. But 320 Million other Amercans couldn't. We have "sufficient" nat gas, right now, for present uses. But, how would it look if we were trying to run 10% of our automobiles on it (as we are, presently, with ethanol?)What would a "Nation-wide" NG Fueling Infrastructure cost? What do those people that have spent $4,500.00 to convert their vehicles do when nat gas spikes again, thise time to $20.00/kcuft, or higher?That's the kind of silly, magical thinking that will keep us immobilized as the natural devolution of energy supplies in a "Non-OECD Spike in Demand World" kicks us dead in the butt.
Jon Murphy: "Than the politician could say "See? Look what I did without spending a penny!"Ah, but there's the rub. The voters would say "See? All this happened without you doing anything. It seems that you, and the job you do, are unnecessary.The free market makes most government unnecessary. Politicians hate it. That's why Keynesian policies are so popular with government - not because they make sense, but because they require those in government to "do something".
"We don;t need the mandated GOP ethanol program..."...On what planet did this happen pseudo benny?There's more of split at the GOP on ethanol...Milwaukee Journal Sentinal: GOP group wants curbs on ethanolSenators tie production to increases in food pricesBy Joel Dresang and Thomas Content of the Journal SentinelMay 6, 2008New YorK Times, June 14, 2011: Most Democrats banded together with farm-state Republicans to defeat the effort by Senator Tom Coburn, Republican of Oklahoma, who along with his allies charged that federal ethanol supports are wasteful and unnecessary and are increasing the cost of food by inflating the price being paid for corn...
"We don;t need the mandated GOP ethanol program, a rural sop." -- "Benji"The ethanol program was initiated by the Democrats - Jimmy Carter and a majority Democrat congress. Here's a tip, if you think that you actually know something, you don't. Look it up.
Bush sets goal for US of 75% cut in Middle East oil imports· Ethanol as substitute fuel to end gasoline 'addiction' Julian Borger in WashingtonThe Guardian, Tuesday 31 January 2006President George Bush has admitted the US is "addicted to oil" but pledged to reduce its dependence on Middle East imports by three quarters by 2025, largely through the development of ethanol fuel for cars derived from wood chips, vegetable matter and grass."By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past," Mr Bush declared in his state of the union address to Congress early today.The president named the ambitious scheme "the Advanced Energy Initiative" and said it would involve a 22% increase in federal research into clean fuels. The research would also aim at developing "zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy", Mr Bush said.But the most important goal was changing the fuel that powers America's cars, which account of 75% of all oil production according to administration figures. "It is the elephant in the room when it comes to the energy issue," Dan Bartlett, the president's media adviser, said in a briefing before the speech.Successive administrations have promoted the use of corn ethanol as a subsidised fuel additive, in part as a means of support to American farmers. But President Bush said the ethanol US scientists were exploring would come from "wood chips, stalks, or switch grass [a tall, tough grass mostly found in marshes]". "Our goal is to make this new kind of ethanol practical and competitive within six years," he declared."Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75% of our oil imports from the Middle East by 2025."Jeez, this sounds like Obama today, minus the boner for ethanol. The ethanol program is a rural subsidy and thus primarily a GOP lard bucket. You guys think Bush was a socialist Muslim too? After all, he made a point of attending a mosque after 9/11--and wanted government programs to solve the "energy crisis."
Europe is in Recession, Japan is Contracting, The U.S. is tottering on the brink. Actually, none of that is true. Europe is not in a recession, just experiencing slower growth. Japan, however, is in a recession but about to return to pre-recession levels. The US is not tottering on the brink: our economy expanded 4.2% in 2011 (I'm using US Industrial Production as a benchmark. It's revised less often than GDP, comes out monthly, and correlates perfectly with GDP). Faster growth will occur in 2012. The USLI is growing, the PMI is over 50.0, bond yields are sending positive signs, construction is rebounding, a whole host of industries are above their pre-recession levels of productivity, the US economy added over 1.5MM jobs in 2011, and consumer default rates are at their lowest level since 1995.All due respect, Rufus II, I think I'd trust BP right now over you since you failed to notice these rather key facts.
The entire Democrat/environmentalist project is focused on needlessly raising the cost of energy for the average consumer:Already weary of high gas prices and 9.1 percent unemployment, many Americans are about to get another kick in the wallet thanks to large increases in their electricity bills. From Alaska to Georgia and Wyoming to Florida, utilities are seeking permission to pass on hundreds of millions of dollars in new charges to customers to help upgrade aging infrastructure and build new or retrofitted power plants that comply with tougher environmental regulations, a Daily Beast review of regulatory filings has found. "¦ The Beast's review of regulatory filings found at least 16 utilities covering 6.1 million customers are seeking rate hikes of 5 percent or more. Almost half of those want increases of 10 percent or more. ... [M]ore than half the states have imposed new clean-energy standards that require utilities to feed in renewable sources. Older systems can't handle variable power sources such as wind and solar, and therefore require significant upgrades. "¦ Utilities also are facing more stringent environmental regulations. The Environmental Protection Agency is considering a variety of new rules that would affect electricity generation, essentially forcing utility companies to shutter their coal plants or invest hundreds of millions in scrubbers that remove toxins from the air. [Yes, they are calling CO2 a "toxin"] -- The Daily BeastOf course, the media will make sure that most Americans never understand why their energy costs are increasing, other than to suggest that the problem lies with greedy energy companies.Funny, we never here leftists, like "Benji" complaining about "green energy" subsidies, a sop to Democrat Party cronies.
Like I said pseudo benny, the GOP was split on ethanol...New York Times, February 2, 2006: Politically, both parties on Capitol Hill displayed a lack of enthusiasm. Democrats said Mr. Bush had opposed foreign oil reduction targets in last year's energy bill, and Republicans questioned the practicality of relying on ethanol and other alternatives...
"Of course, the media will make sure that most Americans never understand why their energy costs are increasing, other than to suggest that the problem lies with greedy energy companies"...Good point che...Networks Barely Criticize Obama's Disastrous 'Green Jobs' PoliciesCriticism excluded from 92 percent of network news reports, despite bankruptcies of federally subsidized companies.By Julia A. Seymour Monday, August 22, 2011 10:25 AM EDT
She is Dead-I am a mostly a free marketeer libertarian type. The fact that I revile the GOP as a refuge for poltroons and hypocritical grifters does not mean I am liberal.I just commented that Obama's Solyndra fiasco was "crony capitalism." Ergo, I criticize Dems as well. I wish for 33 percent cutbacks in every federal agency, excepting Defense, Homeland Security and the VA, which should take larger cuts. I like Ron Paul. How "liberal" is that? Make of that what you will, but you strike me as an abject GOP apologist, who wears partisan blinders over rose-colored glasses, seeking to make Utopia with infinite Ben Franklins in Afghanistan or Eatcrapistan or wherever GOP warmongers want us next.
Benjamin.. it does not matter...once you criticize the GOP, right-wingers, you are, by definition a "liberal".;-)here's something that caught my attention in that report:" Non-OECD energy consumption is 68% higher by 2030, averaging 2.6% p.a. growth from 2010, and accounts for 93% of global energy growth."more demand.....
"Benji",Ethanol subsidies are not a "sop to rural voters". Inflated U.S. corn prices, the result of ethanol subsidies, undercut the competitiveness of U.S. cattle, hog and poultry producers. The increased demand for fertilizer by corporate farms growing crops for ethanol drives up prices, increasing costs for small farmers. So, what the government gives with one hand it takes away with the other. What's more, almost all farm subsidies go to large corporate producers whose shareholders live, overwhelmingly, in urban areas of the country. You could eliminate almost all farm subsidies tomorrow and 90 plus percent of farmers would not even notice. Like I said, if you think that you know something, you don't. Look it up.
"The fact that I revile the GOP as a refuge for poltroons and hypocritical grifters does not mean I am liberal."He's right here. Many Libertarins (myself included) hate both political parties with equal rancor.
"I am a mostly a free marketeer libertarian type. Blah, blah, blah ..." -- "Benji"That little tantrum would mean much more if we didn't have years of your sycophantic pro-Obama, pro-national health care posts.Here's just one example:I wonder if profits and health care mix that well.If we go all-private care, your insurer will basically say that elder insurance will either cost $100k a year or more, or they can use private-sector death panels.Or your deductible is $110k a year.Might be time to throw in the towel, and go the top-down Euro route, and cut our health bills in half, btw.-- "Benji"Carpe Diem has a search function. Or did you forget that?So, please no more bullshit.
We'll plant about 4 to 5 Million Acres More corn this year, and we'll Still be paying landowners Not to Plant 30,000,000 Acres.But, maybe we'll have a nice "War for Oil" going in Iran by Fall. That'll help, eh?
She is Dead-What I write about private-sector health care is true. When I speak of top-down Euro care, I am thinking about what will actually happen in the USA, except probably worse.Without subsidy, families will not be able to keep elderly alive. Ergo, euthanasia. I face up to that fact, and I accept it. If the GOP cannot face up to that--and they can't-- then we might as well go to the less costly Euro model. The most-expensive model is the one we have now. You keep Grandma alive several months past her expiration date, and I (taxpayer and ratepayer) pick the table for $250k. Yes, give me the Euro model over the current USA model.That said, I prefer free markets as the solution.
Here some news today, and I hear no GOP temper tantrums over this one. Biofuel maker ZeaChem lines up $232M loan award from USDABy Ucilia Wang Jan. 26, 2012, 9:00am The long-promised but perpetually fledging biofuel industry still remains a big focus of government support. The U.S. Department of Agriculture announced Thursday that it's made a conditional commitment for a $232.5 million loan guarantee to ZeaChem to build the company's first commercial-scale refinery to turn plants into fuels and other chemical products.This is the same USDA program loan guarantee program that delivered a loan guarantee to now defunct biofuel maker Range Fuels. To date none of the next-gen biofuel companies have produced advanced biofuels at any commercial scale, despite hundreds of millions of funding in venture capital and government funds.The loan guarantee will enable ZeaChem to build a plant in Boardman, Ore., which could produce 25 million gallons per year of products. At least 51 percent of the plant's production will be cellulosic biofuel (including ethanol) and the rest will be chemicals such as acetic acid and ethyl acetate, the USDA said. The total cost of the project is around $390.5 million, the USDA added.When this one busts, we will not hear a peep from She is Dead. Actually, She is Dead won't even criticize this loan--it's okay, it's going to a rural, GOP area.
"The U.S. Department of Agriculture announced Thursday that it's made a conditional commitment for a $232.5 million loan guarantee to ZeaChem ..." -- "Benji"Remind us all again, "Benji", who is currently in control of the Department of Agriculture? Ooops. When this one busts we will have the same group of morons in the Obama administration to thank who pissed away more than $1.2 trillion in a failed economic stimulus. Here's just one of your "free market", "libertarian" remarks concerning that travesty:True, adding regs onto an industry, or mandating renewable energy, does not by itself create jobs.On the other hand, when we reach a state that even interest rates at zero will not stimulate job growth, then government stimulus pending can create jobs."Benji"As for the rest of your nonsense, I am not in favor of government subsidies of any kind, period. But then you knew that because I've been consistently clear about where I stand.
Well pseudo benny and larry g your point man on the "venture socialism' track yet again proved the old saw that 'liberals want someone else's money to finance their stupid ideas'...From the Hill: Obama-backed electric car battery-maker files for bankruptcyWho cares if another $118 million extorted tax dollars goes down the crapper, eh?
Is the chart in Dollars or Therms?
let me know when the green subsidies reach the scale of ethanol and sugar.
BP's projections for energy shares through 2030 is more evidence....Since when are projections evidence of anything? And if BP was off by 50% when stating the depletion rate for existing oil fields why should we accept these projections as credible? My own guess is that nuclear and coal will go up far more than projected while renewables will turn out to be uneconomic.
Try this one on for size larry g and isn't ethanol one of those 'green energy' thingies?From Casey Research: Green Energy Is a Financial Parasite(1st paragraph)Any politician who talks of a green, utopian US "“ where wind and solar produce most of our energy, electric cars put power back into the grid, green fields of corn produce clean fuels, and millions of Americans work in green technology factories "“ is creating a fanciful vision so far detached from reality it should really be called a lie. Such tales are designed to encourage a public that is increasingly despondent about the future, but the policy moves that have been made in support of these fantasies have cost taxpayers tens of billions of dollars. Much of it is money that will not be repaid, because a whole whack of the companies and industries that accepted green grants, loan guarantees, and tax credits have turned out to be complete failures...
About Me Name: Mark J. Perry Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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