InspireSeattle Minutes: January 6, 2007

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Meeting Minutes from inSPIRE Social on January 6, 2007

We had our first social event of 2007 at Candy and Jule s place on Alki Beach. We had a great turnout with thirty eight guests to hear our guest speaker, Greg Rock. Thanks so much to Candy and Jule for opening up their home!

Important Announcements!
Moral Politics TV: inSPIRE member Bill Alford, host of Moral Politics, the Public Access Television show, took a few moments to tell us about the upcoming season. Bill is always looking for interesting guests to discuss key political issues of these days and encourages inSPIRE members to send him ideas and contacts for the 2007 season.

Moral Politics puts its lens where politics & morality intersect. The program is dedicated to frank even confrontational dialog on noteworthy issues ignored by mainstream media, yet impacting citizens. Moral Politics cablecasts "live" at 8 PM most Fridays. Tune to Comcast channel 77 (Millennium 29 in some locales). Alternatively, view the internet stream at http://209.90.224.6/scanlive. The show cablecasts for twenty-eight minutes weekly from the Seattle Community Access Network (SCAN) studio at 1125 North 98th Street.

Moral Politics focuses on moral, nation-enhancing, confrontational discourse for a Progressive America. Past shows have included experts discussing many key issues including clean elections, AIDS, healthcare, the case for impeachment of President Bush, payday loan sharks, Christian electioneering, prison reforms, family planning and many more. Elected office holders, political candidates, activists, lobbyists, journalists, bloggers, professors, engineers, ministers, legal scholars, soldiers and physicians have been among the guests. The many Friends of Moral Politics make on-going shows possible. Bill Alford is soliciting help from inSPIRE, including any suggestions, donations, crew & production support as well as the recommendation of this forum to groups & leaders. Contact Bill at billyalford@gmail.com. Again, the show airs on Channel 77 Friday evenings at 8:00PM.

Eric Oemig, Washington State Senator! inSPIRE s own Eric Oemig took a moment to thank everyone for the help they provided in his successful campaign for the Washington State Senate representing Kirkland and the 45th District. How fantastic is that?!!! Eric s swearing-in ceremony was Monday, January 08, 2007. Already Eric is being swamped with meeting requests as lobbyists make their way to his office door. Eric already has sixty meetings set for the upcoming days, and surprisingly none of these are with actual constituents! Eric encourages both constituents and inSPIRE members to come visit him in Olympia.

Eric s committee assignments include Vice Chair of Government and Elections, as well as membership on the Ways & Means, Education (K-12 & Early Learning) and the Water, Energy, Environment (& Technology) committees.

Once again, congratulations to Eric!

Keynote Speaker, Sustainability Engineer, Peak Oil Expert and co-founder of The Green Car Company, Greg Rock! (www.greencarco.com)

Greg is also the founder of Sustainable Solutions, a consulting company which advises political and business leaders how to protect their social and economic investments from rising energy prices. Greg is a resource management expert dedicated to many different aspects of sustainability including: green transportation, building design, and energy production. Greg s work has led him to become a local leading expert on Peak Oil.

What is Peak Oil? Peak Oil is one of the very top issues facing our world today, and could lead us towards extreme economic as well as geopolitical crises. Yet Peak Oil is only vaguely understood by most people. Greg provided us with a Peak Oil 101 class to bring us up to speed. Much of Greg s talk was augmented by interesting charts and graphs. These notes will attempt to capture some key elements contained within the charts. Understanding that not everyone has Microsoft PowerPoint capability, I have not included Greg s charts in these minutes. If you would like a copy of Greg s charts, please let me know and I will send them to you.

In a nutshell, Peak Oil is the term that represents reaching the world s maximum rate of oil production. Peak Oil does NOT mean that we are about to run out of oil . Rather, it is the term that indicates we are no longer able to continually increase the world s oil production rate, I.E., we re at the top of the production curve. Many experts think we ve already hit the Peak Oil production point. Many experts in the oil industry think it is at least twenty years away. In either case, the ramifications of Peak Oil are dramatic.

There are different approaches to forecasting oil production and supply. A basic approach is to analyze the trend of oil discoveries (discoveries of new oil reserves) and project this out. In 1956 one of Shell Oil s top Geophysicists , Dr M. King Hubbert, analyzed oil discoveries in the US and from this data predicted that US oil production would peak around 1970. Back then the US was the largest oil producer in the world. Hubbert was ridiculed and laughed at for his prediction. In the early 70s US oil production peaked at 11 billion barrels/day. Today US oil production is at about 5 billion barrels/day. Hubbert was almost exactly right with his prediction.

About the time that the US was hitting peak oil production Americans also experienced the OPEC action that curtailed oil imports (1973 timeframe). Next, the overthrow of the Shah of Iran disrupted oil exports from Iran. These events hit America hard, as well as other oil importers, such as Europe. Europe responded by beginning to build an infrastructure to conserve oil requirements, thus lessoning their dependence on foreign oil as well as lessoning the negative environmental consequences of burning fossil fuels. America responded very differently than Europe.

America became a large net oil importer. America worked the geopolitical issues to restore our ability to obtain the oil imports we wanted. In addition, to avoid future shocks to our oil supply, America developed an excess capacity of oil, an oil buffer of about 7% over annual usage. Dramatic increases in American imports were able to offset America s reduction in domestic oil production. Unfortunately, America s demand for oil also continued to increase significantly and has continued to increase at around +2% oil demand growth per year.

Today, America s oil buffer or security premium has shrunk from 7% to about 2%. Most people think that this security premium is to protect Americans from possible terrorist strikes on our oil supply line. This is not the case. The primary reason for this security premium is for protection from less violent possibilities, such as Peak Oil. This buffer protects Americans from price volatility due to oil supply disruption.

Worldwide oil discoveries peaked in 1962. In other words, it s likely that all the really big oil fields, or easy oil , have been mostly found. New discoveries tend to be oil in places much more difficult to extract (such as deep oil ) or of oil that is a much lower quality. This type of oil is much more costly to extract and to refine and is slow to recover. In the past, roughly only about 25% of the total oil was extracted out of a typical oil deposit because the remaining oil was too difficult and costly to obtain. Now, due to increased pricing of oil, it is becoming cost effective to go after some of this more difficult oil. Other less efficient oil sources, such as oil shale and tar sands, are now receiving investment.

To accurately predict today s remaining worldwide oil supply, one needs accurate data. Unfortunately, the Saudi s see no advantage in providing their oil customers accurate oil supply data, so we don t know for sure just how much oil is left. Somewhere around 65% to 70% of the proved oil reserves in the world today are in the Middle East, with the majority of these in Saudi Arabia. So, Saudi oil deposits matter, a lot.

The consumption of oil in the United States impacts the world in a very big way. While the US s 300 million population is less than 5% of the world total (6.5 billion), Americans consume roughly 25% of the world s annual oil usage. Also, America sets the standard for good living , if you will, I.E., many developing countries aspire to an American lifestyle. So, how America responds to energy/oil usage has a huge impact on the world.

China is a huge country at approximately 1.4 billion people, and China is working hard towards economic development and an improved lifestyle, which includes a big demand for energy. China s energy consumption is growing at 20% per year. India, with over 1 billion people, is also becoming a big energy user. However, America uses 7 times more energy than China and India combined! With over 400 million cars on American roads, America has developed a lifestyle totally dependent on cheap energy for independent transportation.

When will Peak Oil actually occur in the world? Of the 54 oil producing countries, 36 have already peaked. Many experts predict Peak Oil will occur about 2010, +/- 5 years. Some experts think Peak Oil has already occurred. Oil industry people, that clearly have a bias to keep people buying their product, claim Peak Oil won t happen for years, but even some of these forecast define years as Peak Oil occurring around 2025 or 2030. The US Department of Energy presented a report in 2006 that indicated Peak Oil occurring in 2015. So, the notion that we ve got 200 years of oil is very misleading because it implies there is no need to take action due to diminishing oil reserves/production/availability. The peaking of natural gas production is also occurring, adding to our energy woes.

What will be the consequences of Peak Oil? Of primary consideration is its impact on prices, both in dramatically rising energy prices as well as price volatility. Although oil is the primary fuel for transportation purposes (both personal and as well as transportation of goods and services), it is also used for many other things, including home heating, plastics, pharmaceuticals as well as in food production. For our society to function correctly, we clearly depend on oil.

Restrictions on oil supply will likely result in competition for remaining oil reserves by consuming nations. Consuming nations may possibly invade producing nations (editorial comment: continue invading ), we may see civil war in producing nations, and, given the importance of oil in our world today, possibly even nuclear war. Greg showed a map of US military installations in the Middle East. This was striking. US military bases literally surround Iran. One wonders, even with a US pull-out from Iraq, if the US would ever abandon these military bases in the region with so much of the world s oil supply close by.

With the coming of Peak Oil, a variety of actions are needed. One is the development of alternate energy sources. There are clean alternatives as well as dirty alternatives . There are not many alternative liquid energy sources. Many alternative energy sources are useful for producing electricity, for example, but are not useful for transportation needs unless transportation technology significantly changes. It takes quite a long time to make the big changes in our basic systems. If America was to begin today to seriously move towards hybrid technology for automobiles, for example, it would take 20 years to rollover 50% of the current US fleet of 400 million autos. It would also take at least 20 years to move to new alternative energy sources. So, the longer we wait to begin making these big changes, the more of a crisis we create.

Clean alternatives to oil include biodiesel and ethanol. An alternative to natural gas are methane digesters. Alternatives to electricity include solar, wind, hydro, tidal and geothermal energies.

There are many dirty energy alternatives, which may be much more actively pursued than the clean alternatives due to economic considerations, I.E., they re cheaper to obtain. If one doesn t include the environmental impact of using dirty energy sources when assessing which energy source to pursue, then the cheaper alternatives win out.

Dirty alternatives to electricity include coal and nuclear energy. Dirty alternatives to natural gas include coal bed methane as well as LNG. Dirty alternatives to oil include tar sands, coal to liquid, oil shale and gas to liquid. Due to production processes, etc., use of these dirty alternatives can produce 30% to 40% more carbon dioxide (CO2) than just using oil. CO2 is the primary cause of global warming. The US today doesn t officially recognize CO2 as a pollutant (Editorial comment: or for that matter, the existence of global warming), so this HUGE negative will likely be severely downplayed to the American public.

Looking at efficiency ratios to see what is the better source of alternative energy, I.E., looking at each option s net energy return , calculations show that conventional oil provides approximately a 7 to 1 return (I.E., for one barrel of energy spent, one can extract seven barrels of oil). Using this same method, tar sands and coal to liquid are at 5 to 1; biodiesel is at 3 to 1; ethanol is at 1.5 to 1 and oil shale is at 1 to 1 (I.E., with today s technology it s not worth working to extract and use oil shale because it takes as much energy to produce it as one obtains from it). Investment in technology can improve these ratios. But, as with everything, this will take both money and time.

When faced with much higher energy costs or having to admit global warming is an issue that needs to be dealt with, what choice will most Americans make? Today, in most places around America, sadly most Americans are not aware or caring about this issue. Seattle s awareness and concern is not typical throughout America.

Greg talked about the strong need for consistent groundrules to be utilized when analysis is completed on energy options, otherwise a wide array of contrasting outcomes are likely. Marketing comes highly into play in this game. People with economic incentives (E.G., they re on big oil s payroll) can easily twist data to desired outcomes. These people tend to have big budgets to then go advertise their findings and convince the American public nothing needs to change. As an example, the US government has found that at today s consumption rates America has enough oil to last 250 years. But consumption is held flat, in fact it is increasing at 2% per year. Taking a 2% per year increase in demand into account, this reduces coal reserves to 90 years. Then, if we begin to convert coal to liquids to use for transportation purposes the supply is reduced to just 60 years worth of coal. President Bush frequently quotes the first point that we have 250 years worth of coal and ignores the other relevant factors.

It s extremely likely we CAN T fill our energy gap with alternatives. So, focus is needed on two other areas: efficiency and conservation.

On the efficiency side we can do many things. For example, we can move towards green building designs that use much less energy. We can move towards energy efficient lighting. We can move towards highly efficient vehicles (smart cars, hybrids, diesels, etc.).

Conservation does NOT equal efficiency! Conservation is more important. On the conservation side we can work to reduce our demand for energy. These lifestyle changes will also save us BIG money! They include turning down the thermostat, living in smaller homes, reducing our consumption of all products that embody energy (buying locally, etc.), driving much less, etc.

On the policy side we can support the construction of an energy efficient infrastructure, including real public transportation, green buildings, bike paths, etc. We can also support the increase in energy prices through the reduction of tax breaks to oil companies, as well as raising the fuel tax.

What? Support raising the price of energy?!! Our problem is that in our society, and with most people s lifestyles oil is livelihood . It is at the core of our consumption patterns. So, with a reduction in the supply of oil due to Peak Oil the price of energy will spike upwards to the level that is necessary to balance supply and demand. In other words, energy may need to get really expensive to reduce energy demand to a new lower supply. Also, a relatively small shortfall of supply with oil back in the 1970s, due to OPEC, lead to a 100% to 200% price increase! Americans can t afford this price volatility with today s lifestyles. In 2006, the average American spent 110% of their earnings! I.E., America currently has a net negative savings rate. And this is with relatively cheap energy! What will happen if energy prices spike? Peak Oil will likely bring extreme price volatility, severely inhibiting ones ability to plan and run a business. Other big challenges include our building habits towards large, urban homes (sprawl) with low density, requiring folks to commute in their own cars.

Considering the huge impact oil price volatility and price increases will have on America s economy and people, why support increased energy prices today? So that America can begin the process to ease Americans away from the concept of cheap energy and the resulting lifestyle cheap energy has created. Some serious planning today, as well as some gradual changes, will be much more palatable and achievable then potentially massive shocks in 5, 10 or 20 years.

Greg closed his formal talk with emphasizing that change must come from a consumer driven movement. Government can t, and most likely won t conserve energy for Americans. The most powerful vote we have is with how we spend our dollars. If we don t buy it, it won t be built. If we buy it because it s cheaper and we don t consider the ramifications (editorial comment: I.E., we shop at Wal-Mart), change will not happen. Consumers can choose to buy local, to buy organic, to buy bio-fuels, to buy renewable energy (http://www.seattle.gov/light/green/greenpower/), to buy less and to boycott non-organic foods and petroleum.

Questions (which enthusiastically continued until Dave cut them off at 10:00PM!) captured many other key, related issues, such as population issues, Gross Domestic Product issues, water issues, etc. Sadly, as always, the note-taker got tired and stopped writing

For more information one can visit Greg Rock s websites at:
A. Green Vehicles: www.greencarco.com
B. Peak Oil, Sustainability, and Europe Blog: www.sustainabilitywatch.com
C. Greg s paper on the Net Energy Profit Ratio: www.netepr.com
Also, to find out the location of local bio-diesel suppliers, go to http://www.biodiesel.org/.

Many thanks to Greg Rock for his informative and important talk!

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