US Energy by Source

I just found a cool graph on the EIA’s website that lays out the sources of the USA’s electricity generation.  The one downfall is that it does not take into account the 2 billion kilowatt hours of small-scale solar like residential rooftops.  Quite honestly, it wouldn’t alter the chart all that much considering the whole green section of this chart represents roughly 200 billion kWh.  Let me know what you think – are you surprised? do you want to learn more?  Hit me back.

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Gas Prices (again)

Mrs. Greenbacks asked me an interesting question this morning, “Do you think the recent drop in gas prices has anything to do with the election this year?”  The short answer is – No.  It is probably a dream of every President to be able to control gas prices in an election year, but the simple truth is that they do not have that ability.  The oil market is a worldwide phenomena driven by consumption, much of it coming from emerging economies.  I explained some of the reasons in an earlier post – What goes up.  The only thing POTUS can do to ease pain at the pump is to open the Strategic Petroleum Reserve, but even that wouldn’t make much difference.  As of 6/8/12 the SPR had approximately 695 million bbls in the quiver – about 36.5 days worth at current usage rates.  Even if President Obama ordered a full drawdown of the SPR we could only withdraw 4 mil bbls per day for up to 90 days when the rate would slow.  However, tapping into the SPR to ease high gas prices defeats the purpose of the reserve in the first place.  Energy efficient cars and smarter cities would have a much bigger impact on the price of gas.  However, as less consumption forces the price of oil to go down, we must not fall into the trap where we increase usage again.

The Balance of Power

Few things effect international relations more than the balance of power.  Whether it be water or oil, the first societies to harness the potential of these commodities enjoy the creation of wealth and goods such as cropland in the case of water and industry in the case of oil.  Eventually each sector is going to grow and the demand for the input will outgrow the supply, leading to price hikes that make that commodity even more desired.  Problems exist when the source of these commodities are located outside of that nations borders.  The balance of power is then transferred from the first-mover user to the upstream producer of that commodity.  This is where it gets interesting.  The choice then becomes whether to use soft power (such as diplomacy, aid, or economic development) to gain influence over the producer or hard power (military action, sanctions) to force them to act.  Only by reducing demand for the commodity in question can the consumer nation wrestle back control from the producer nation.  This could include finding a substitute, developing new technology, or learning to use that resource more efficiently.  In the case of water, there is no substitute.  Downstream nations must learn to make the most out of every drop that they have.  This includes studying what crops to plant domestically and supplementing others through trade.  New technology such as desalination plants could also help secure access to clean water, but it will take an economic toll.  In the case of oil, there are several substitutes such as biofuel, natural gas, and plug-in hybrid cars, but while we further explore these technologies, squeezing the most out of every drop seems to make the most financial sense.

Water, Water, Everywhere . . .

 “Many of the wars this century were about oil, but those of the next century will be over water.”

Ismail Serageldin
Chairman of the World Commission for Water in the 21st Century and senior World Bank official

While most of my writing thus far has been focused on sustainability and the economy, I recently read a great book by Steven Soloman called Water: The Epic Struggle for Wealth, Power, and Civilization that shows that the scarcity of clean, potable, freshwater is going to be one of the greatest challenges of the 21st century and promises to redefine international relations between the Haves and the Have-Nots.  Historically there has been a link between access to freshwater and population growth, but over the past hundred years the overuse and poor management of this vital resource has left many natural aquifers in very bad condition.  The heart of the water epidemic is the fact every person, animal, and plant requires water to live.  Up until now, there has been enough freshwater to meet the needs of the population.  However, new evidence shows that humans may now be using water faster than it can be replenished into the aquifers.  The alarming dark side of this humanitarian divide include over 1.1 billion people – almost one-fifth of all humanity – who lack access to at least a gallon per day of safe water to drink.  Some 2.6 billion – two out of every five people on Earth – are sanitary Have-Nots lacking the additional five gallons needed daily for rudimentary sanitation and hygiene.  Far few still achieve the minimum threshold of 13 gallons per day for basic domestic health and well-being, including water for bathing and cooking.[1]  There are also over 3.3 million deaths every year from water-related heath problems such as diarrhea, dysentery, malaria, dengue fever, schistosomiasis, and cholera.  Not surprisingly, lack of freshwater runs hand in hand with insufficient food production and malnutrition since agriculture is such a water intense industry.  Persistent water shortages threaten governments both on the domestic front from social unrest as well as internationally through territory disputes, military threats, and trade patterns. 

Oil can be replaced by a growing number of alternatives including renewable energy but there is no alternative to water.  In your quest for sustainable living, please remember that water is the foundation of life and for the first time in history, in danger of leaving some inhabited regions dry.  This is a problem on a massive scale, but it can also be navigated effectively by understanding the issue and the reasons for it.  Hopefully the existential threat of water scarcity is enough to force nations into dialogue over their resources as well as how populations can be more efficient. 


[1] Solomon, Steven.  Water: The Epic Struggle for Wealth, Power, and Civilization.  New York: Harper Perennial, 2011.  Print. p. 370.

What Goes Up, Must Come Down

“Mr. Greenbacks, Back in March you said oil prices are on the rise and we could see $5 gas by summer.  What happened?”

Well, Europe happened. . . and China happened.  So basically, fear has taken over.  When I posted Pain at the Pump back in March, Europe was but an afterthought for the world’s markets.  After years of worrying about Greece, people began to forget about it and concentrated more on the good news rather than the risks that lay ahead.  Then all of a sudden Greece became a very real and imminent problem.  Spain and Italy also contributed to this fear and finally it appeared that China was going to come in for a ‘Hard Landing’ – meaning that their rapid growth rates of >10% a year may not continue.  China in fact has been the engine that has been driving most of the worlds consumption, whether it be oil from the Mid-East or Africa, iron ore from Brazil, or coal from Australia.   So now fears of a new global turn-down seem very real, hence the drop in crude prices.  As of 6/6/12, the spot price of BRENT and WTI have come in to $100 and $84 respectively.  This drop will soon reflect in lower prices at the pump, but lets not forget what $4/gal of gas felt like.  Lets use this opportunity to continue our push for more efficient usage of our resources.  After all, this too shall pass, and the economy will begin to grow again.  When demand kicks up you will see an increase in prices yet again, and we will be back to square one.

European’s Guide to the EU

What EU country do you think is the hardest working?  What about the most corrupt?  On May 29th, the Pew Research Center did a study on the attitudes among the populations in various countries in the EU.  I found this chart absolutely fascinating!  While the chart speaks for itself, the results (5 of 8 countries believe their government is the most corrupt) tell me that the population is losing trust in their leaders.  Not a good thing at such a volatile moment.  Let me know what you think:

Reinventing Fire – Transportation

Back in March, I promised you a review on Amory Lovins’ new book Reinventing Fire.  Well, Mr. Greenbacks delivers!  Sort of.  This book is an absolute monster – a game changer of dramatic proportions . . . and I only have limited time on my hands between work and school to share it with you.  So, I am going to dissect this book and write about it in stages, but in return, you have to keep checking in and giving me feedback – letting me know if you think this is something we, as a country, can do and what challenges we might face.  Reinventing Fire is rational, thorough, and extremely impressive.  I think we all owe it to ourselves to hear Mr. Lovins arguments, maybe THE BEST I have read thus far. 

The first sector of our economy that Mr. Lovins takes on is transportation, and he does so with panache.  Currently the US uses 13 million barrels of oil a day on our transportation needs.  Thats almost a billion dollars a day, every day, and much of it is wasted on low mpg vehicles.  In order to get the most mpg from our cars, we need a complete revamping of the car building process.  Using integrative design and advanced materials such as alloys and carbon fiber we can dramatically reduce the weight of the frames, using stronger, heavier metals only where it is needed.  Composites allows for even lighter and stronger frames that can be molded instead of assembled, thereby reducing costs and parts.  The integrative design means that a lighter body allows for a smaller engine and so forth, further reducing weight and costs.  The final boost in efficiency is created by switching to an electric powertrain (engine and transmission – what makes the car move), that can be run on battery power, fuel cells, or a hybrid engine.  Electric motors are lighter, smaller, cheaper, quieter, cleaner, and more efficient, and can even recover more than half of the energy lost as heat from the brakes.  By taking these actions, we should have no problem not only reducing demand for oil for personal transportation, but eliminating it all together. 

The biggest issues that I see with this transition is the costs associated with the new materials and ways of thinking.  However, we can overcome this by utilizing economies of scale and ramped up production.  Please keep in mind that these ideas are based on currently existing technologies and will create new jobs as these industries expand.  It should also be noted that innovations will abound as we being to master these new processes and technologies, thereby creating more room for improvement.  So what do you think, can we do it?   

235 mpg