First, can someone tell me why philosophy isn’t taught in high school?  Is there some reason we think we need to shelter kids from life’s great questions until they’re older? I never taught the subject formally, though I tutored quite a few undergraduates while I was in graduate school, which often caused me to wonder how I would construct my own “101” course if I happened to be in that position, and at what age group I would present it.

What happened when mankind evolved to the point, about 10,000 years ago, that we had a solid grasp on basic agricultural principles, and so no longer needed to roam, hunting for and gathering food in a nonstop life-and-death struggle? What happened when we started to look up into the heavens — and the questions started to flow: Who made all this stuff? Why are we here? What happens when we die?

I’d certainly get the kids into questions like that – “speculative philosophy” as it’s called.  But I wouldn’t do so at the expense of “moral philosophy,” whose questions are different, though no easier: What is the nature of our responsibilities to others? What does it mean to say I have a “right” to do or have something? A “duty?” And from what do these rights and duties come? The bible? Our conscience? The mores of our group?

I bring this up because the debate about energy really unfolds along these lines. It boils down to this:

If we really don’t have a duty to anyone but ourselves, we can serve the world’s energy needs very well with fossil fuels. Yes, we’re running out of oil, but not right this minute. Yes, fossil fuels more generally are ruining our health and our environment, but they’re by far the cheapest way to power our civilization at this point in time. People who scoff at the idea of a duty to others say, “Look, we can generate baseload electricity with coal at about three cents a kilowatt-hour.   If that creates a problem, that’s too damn bad. Until someone can beat three cents, we’ll burn coal. ”

Yes, there is no doubt that we can do that. But don’t all people have certain rights — and others among us certain duties — that make this a more interesting question?

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It’s certain that 6600-pound Hummers will not occupy an important position in the way we transport our bodies and our “stuff” in the coming years.  But where exactly are we going?  And who’s going to make a buck in the process?

I hope you’ll be able to join us for our next webinar, 10 AM PST on Friday, Feb. 10th: “The Future of Transportation,” in which I’ll be interviewing Dan Sturges.  Dan’s life is dedicated to developing and promoting a complex and dynamic set of solutions built around overhauling the way we move ourselves and our cargo around the surface of the planet.  He shares my belief that our current conception of transportation — redundant, heavy, bulky, and fossil-fuel-reliant – is simply unaffordable in every sense of the word. It’s not economically sound to the individual consumer, and it’s exorbitantly expensive to society as a whole, both financially and ecologically.

In this lively discussion, Dan will explain how mass transit, car-sharing, ride-sharing, and micro-rentals can begin to reduce car ownership.  He’ll talk about introducing small, light, and inexpensive urban transportation, while encouraging walking and bicycling, and the use of information and communication technology to make these blended solutions convenient and appealing, thus ensuring the consumer-citizen adopts these concepts enthusiastically.

I certainly hope you can make it.  Here’s the sign-up form:  http://2greenenergy.com/free-webinar/

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This article is submitted with the hope that it will set the tone for a series of others that will follow by covering the origins of the petroleum industry in the United States. The main objective of these pieces is to provide the reader with a historical understanding of shocks in oil prices. Later on, other writings will cover more recent material on the subject and a final piece will offer the reader some predictions of what the future of oil prices might look like in the short, medium and long term.

The task at hand is ambitious, but its value is considerable. Everyone feels a pinch when the prices at the pump crawl higher and higher with no end in sight. History has repeatedly proven to be the best thing we have to go on and that’s exactly what we’re going to do. As a result, we will establish a solid foundation from which we will make an educated guess about the future of the oil industry and what it means for civilization.

We will not cover the geological origins of petroleum here and we’re not going to enter the environmental debate. The scope of this paper is centered on the origins of the commerce of oil in the U.S and only that.

The search for the beginnings of the petroleum industry in the United States takes us back to the middle of the 19^th century in Titusville, Pennsylvania where Edwin L. Drake drilled the first commercial oil well. In 1859, after months of hard labor, Drake found an exploitable reservoir of oil at 69½ feet below the ground. His operation produced twenty-five barrels¹ of oil per day at a selling price of $0.50 a gallon as was reported in Derrick’s Hand-Book of Petroleum published in 1900 ($20.00/barrel). In today’s dollars, oil was selling for roughly $500 a barrel at that time and there were no shortages of buyers. The trade of oil was obviously very lucrative and soon after Drake’s success, the area was swarming with people from all over the country with the desire to make fortunes. The boom motivated a massive drilling effort that eventually oversupplied the market and led to a collapse in prices going as low as a dime a barrel. The oil business had lost its appeal and many prospective millionaires abandoned it by closing their taps.

It is worth noting that during its early stages, the petroleum industry was particularly exposed to cut-offs in supply much like the markets were in the 1970s and even more so today. The period between 1859 and 1862 serves as a powerful example of the upward pressure of high prices on supply. It is clear that stocks followed prices more than they followed demand back in the early 1860s and that, to say the least, is a subtle concept.

The impressive decline that brought oil at record lows was followed by a sharp reversal as the Civil War intensified and kerosene lamps became more abundant. A noticeable decline in yields from existing wells combined with the abandonment of supply sites considered unprofitable and high demand gave way to the first spike in oil prices.

Another important factor of the high demand of petroleum came in the form of taxes. Alternatives to oil as an illuminant such as alcohol were heavily taxed in comparison, giving petrol a strong competitive advantage. Other substitutes such as turpentine oil simply became too expensive because of unusually high demand caused by the war. From late 1861 until the end of the Civil War during the summer of 1865, the prices of oil had increased fourfold, but due to the confluence of several factors such as the lack of economical alternatives, buyers were ready to pay the price, whatever it may be.

We have intentionally left out the specific numbers and overcomplicated charts because we believe they would contribute very little to our effort. The main drivers of the 1862-1865 oil shock are the increase in demand in commodities caused by the war effort, the lack of commitment from the suppliers as a consequence to the downfall of prices motivated by the flood of the markets and the taxes that favored oil to its already established substitutes. One could expect that the industry would learn from this first boom-bust cycle and adjust itself accordingly, but as we will see, these cycles will permeate the trade of oil much like the cycles of other commodities and the economy as a whole.

1. Ida M. Tarbell, ” The History of The Standard Oil Company”, (McClure, Phillips and Co. 1904), p.10

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This article, I hope, will set the tone for a series of others that will follow by revealing the origins of the petroleum industry in the United States. The main objective of these pieces is to provide the reader with a historical notion of shocks in the oil business in order to better understand the background of fluctuations in petroleum prices. Later on, other writings will cover more recent material on the subject and a final piece will offer the reader my predictions of what the future of oil prices might look like in the short, medium and long term.

The task at hand is ambitious, but its significance is enormous. Everyone feels a pinch when the prices at the pump crawl higher and higher with no end in sight. History has repeatedly proven to be the best thing we have to go on and in doing so, we will establish a solid foundation from which we will make an educated guess about the future of the oil industry as a whole and what it means for civilization.

THE FULL ARTICLE WILL BE AVAILABLE ON: December-19-2011

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In response to my recent piece on electric vehicles, a few readers sent me  John Peterson’s position on the subject. Thanks, but I’m already quite familiar with it.  John’s a brilliant, honest, and levelheaded guy; in fact, I plan to visit him in Switzerland when I’m in Europe next spring. Having said this, I disagree with him here.

For starters, the concept that EVs are overhyped and destined to failure because “Cheap Beats Cool” does not ring true of the auto market generally. Since the dawn of the automobile, and certainly since World War II, cars may be about sex, or about the wish to appear affluent, but they certainly aren’t about getting around as inexpensively as possible; “cheap” really isn’t the motivating force here.

If John lived in the U.S., he’d see what we all do here: Porsches, Mercedes and BMWs pulling into the parking lots of law offices and movie studios. He’d see Chevy selling Corvettes to young people, and Cadillac selling the Escalade to people who feel the need to drive something the size of a studio apartment. But what happens when “green” becomes “cool?” It’s anybody’s guess, but mine is that the OEMs won’t be able to build EVs fast enough.

Another few items to consider here:

1) It’s true we won’t have $800/barrel oil – or even $300/barrel oil — but keep in mind that we actually have found and extracted most of the easiest to reach crude in the Earth’s crust. Barring a deep and enduring global recession, we will have to deal with the additional costs, both financial and ecological, of getting fuels from unconventional sources.

2) There are scenarios in which “We The People” force the oil companies to pay for some of the externalities of what they’re doing: creating lung disease, supporting terrorism, causing long-term environmental damage, prosecuting never-ending wars, and pushing the U.S. ever closer to bankruptcy.  Even John would admit that it’s at least conceivable that we as a country could start to question the validity of borrowing an incremental billion dollars a day and sending that wealth offshore to empower our enemies.  If any of the above happen at a significant level, you’ll have EVs so fast you won’t know what hit you.

3) Lithium-ion is only one set of battery chemistries; I’m betting that zinc-air represents a far superior solution.

4) There are 25 million multi-car families in the U.S. alone, where one car essentially never exceeds the 100-mile range of a Nissan LEAF. Charging infrastructure, though it will evolve over time, is not the huge gating factor it’s sometimes misunderstood to be.

In any case, I have tons of respect for John, but I’m betting he’s wrong here.

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Albert Einstein left us a number of gifts, most obviously his landmark breakthroughs in theoretical physics. The other, in my estimation, is the utter truckload of pithy philosophic quotes about mankind’s role in the universe.  If you’re looking for something that will keep you out of trouble for a few hours, check this out – there are ten full pages of them.

Perhaps the most often quoted is this:

We can’t solve problems with the same kind of thinking we used to create them.

… which is often invoked by environmentalists to suggest that we’re foolish to count on the fossil fuel and nuclear industries to deal with the pollution and other externalities that come along with their products.

I’m with you all the way, good sir, and suggest that a combination of new modes of thinking are in order here:

1) Environmentalism itself, inspiring more and more people to act responsibly vis-a-vis the natural world

2) Energy conservation per se, making wholesale reductions in consumption, driven by building retrofits, mass transit, electric vehicles, etc.

3) Renewable energy – biting the bullet and making the investment in a clean energy future

Again, thanks to the ultimate man of ideas.

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By any standards, the folks at the Sierra Club have been terrifically effective at leaning on government with respect to environmental policy. On November 10, the Obama administration announced that it would order a new environmental review for the Keystone XL tar sands pipeline — just days after thousands of Sierra Club members and other activists encircled the White House to protest the project.

I thought it would be appropriate to thank President Obama for this wise decision, which I did using this link here.  You may wish to do the same.

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Here’s an NPR spot on Bellingham, WA and their new rail terminal that will facilitate the shipment of enormous quantities of coal from Montana and Wyoming to China. Understandably, locals are not happy. Though some folks are salivating over the jobs that will be directly associated with building and operating the terminal, others fear a loss of tourism, as this historically pristine and eco-conscious spot loses its charm and becomes a temporary home to trains of coal cars, each one over a mile long, running 24 hours a day, seven days a week.

Proponents assure community activists that all sorts of high technology will be deployed to minimize the coal dust that would otherwise coat the landscape and nearby Puget Sound. But most Bellinghamians aren’t thrilled to see their town become noisier, and associated with the dirtiest of all forms of energy.

It certainly does seem a shame that mankind can’t find a better way to conduct itself than mining coal out of the middle of the United States, shipping it by rail to Bellingham, and putting it on barges bound for China, where it will be burned in plants that belch forth their deadly fumes.

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I’ve been preparing to make a few videos for newcomers to the subject of clean energy that answer basic questions on renewable energy, fossil fuels, nuclear energy, and the energy-related challenges we face.  I’ll be recording a series of short talks, aided by graphics, that point out that all our energy sources go back to the Big Bang, and come forward through time to us as follows:

Solar power is nuclear, of course, as all that hydrogen that became our sun billions of years ago undergoes fusion and emits enormous amounts of energy. That which we accumulated over hundreds of millions of years as fossil fuels (ancient biomass) we extract and burn as oil, coal, and natural gas. That which we receive right now, or in the very recent past, we have the potential to harvest as renewables: photovoltaics, concentrated solar power, wind, new biomass, run-of-river hydro, ocean current, and wave.

Tidal and geothermal are two energy-related products of the Big Bang that don’t derive from the sun. Tides are caused largely by the moon, which was created by a huge collision shortly after the formation of the Earth. Geothermal energy actually has four different causes (the energy of impacts, friction from heavier elements migrating toward the core, radioactive decay and compression due to gravity) — all of which stem, however indirectly, from the mass and energy released in the Big Bang.

Nuclear energy comes from splitting some large atoms that resulted as simpler elements combined after the Big Bang. Here, I’ll point out that nuclear reactions are perfectly safe when they occur 93 million miles from us – on the sun, where they belong.  Though, as we’re slowly learning, this is not necessarily the case down here where we live.

Coincidentally, Bill Paul, our renewable energy finance guru, has been working along a similar vein, and sent me this masterpiece, a site on environmentalism for kids. I hope you’ll check it out.

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Many years ago I donated 90% or so of my neckties to charity as I almost never wear  one anymore.  But I’m glad I didn’t get rid of them all, as here I had a rare opportunity a couple of weeks ago when I was in New York City and taped an episode of  “Getting Your Money’s Worth,” in which I discuss renewable energy with show host Judith West.  (The video displays better on Internet Explorer than other browsers.)

It was actually quite a rocket ride, where Judith asked about solar, wind, fossil fuels, electric transportation, and a range of other subjects concerning the politics of clean energy.

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