Energy speech is call-to-action for sustainability experts

I enjoy a good speech, always have. I particularly enjoyed this one. We've waited a long time for Obama to roll out his energy plan.

Unfortunately, without more bipartisanship in Congress, it will be very hard to fund. There's going to have to be a lot of pork mixed in with the greens. That's how I see the ethanol thing, actually, a big fat pork-pie that buys votes and congressmen in corn country.

So much for the patriotic heartland of America. But at this point, I'll take whatever works.



Appendix: Here's a post I wrote to Andy Revkin's NYT blog on this topic this morning:

It was a good speech. I enjoyed it. There are hidden, controlling, realities, though, realities that I'm sure the staff are aware of, but that don't make good soundbites. Any future plan for energy is going to have to navigate these realities like rocks in the water. Most of them are to do with price points in markets for capital goods that consume energy, where energy-efficient and clean energy alternatives are now available.

The biggest is oil price. If I do some econometrics and derive empirical price points for oil over supply, model out demand growth at roughly 2/3rds of global GDP growth, and look to see the impacts on supply, accounting for reserves and even growth in the current rate of discovery, I get a steady increase in the price of oil. This isn't "peak oil" theory: production doesn't need to peak to see the price rise. We just need an increase in demand relative to supply. But this reality will condition markets for substitutes. Lots of currently expensive substitutes will look pretty good in just a few years time if present trends continue. Gas for transport, wind, solar, and fourth generation nukes for electrical power, heat pumps and super-insulation, hybrids and battery electrics that are all just a bit too expensive now will seem a lot cheaper.

So on the basis of price alone we could see a large reduction in imports in the next fifteen years. Global oil production may increase, but we won't be using it because we'll have cheaper alternatives.

On the question of buildings that use 90% less energy, these things are real. We've already built one prototype and are building another this year. They cost more than conventional buildings but don't require lifestyle changes on the part of inhabitants. The trick will be to train up architects and other folks in the building industry. The excess price will then come down, too. I've seen this happen. A prototype 2,000 square foot passive solar house that cost about $800K to develop is now available as a modular home for $250K, with the added incentive of massively reduced utility bills, and greatly increased home comfort. The problem, the rock to navigate, to overcome is price, but there's also education.

Another example is household solar. The price of panels keeps dropping. The price of installation and inverters remains high. Recently I noticed some Chinese grid tie inverters on the market that undercut current market leaders. Rooftop solar is currently cost-competitive with grid power in large scale installations (box stores) in California with subsidy. But it wouldn't take much for it to be cost-competitive in other sunny states soon, in smaller installations a little time after that, and eventually without subsidy. Price, and education, because it takes some knowledge to crunch these numbers.

I could go on but readers have heard much of this before from me. Main point -- Obama has Adam Smith on his side. Grumpy old Adam wins every time.