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Help support AmericanEnergyIndependence.com The Cost of American Energy Independence
How much will energy independence cost the American people? Before the answer can be given and understood, the definition of energy independence needs to be clarified. It is important to first understand that independence does not mean closed borders or isolation. The dictionary definition of independence is: “freedom from outside interference and the right to self-government.” Energy Independence means energy sovereignty; a concept that should be thought of much like we think of national independence. For example, the USA has interdependent relationships with other countries, both economically and militarily — however, if America’s economic or military “interdependence” becomes “dependence” to the point of undermining national sovereignty, there will be a public outcry... much like we see today regarding America's oil dependence. Global economic interdependence should always mean balance of trade—a mutual benefit that recognizes and honors the economic sovereignty of all partner nations. Economic sovereignty and trade balance should always include the right to know where and how profits from trade are used. If a trading partner allows its global economic profits to give aid to international terrorism, then the offending trading partner is guilty of abusing the economic trust implied in the very idea of global interdependence. Extremists on the political Right mistakenly believe that energy independence will mean a retreat from global economic interdependence, a direction that would disrupt the global free market and lead America toward economic and political isolationism. In contrast, extremists on the political Left mistakenly believe energy independence will mean independence from all hydrocarbons and nuclear energy. Green extremists confuse energy independence with environmental issues. Energy and environmental issues do converge in the issues of resource sustainability and environmental pollution, but otherwise energy independence is not an environmental issue. American Energy Independence is about national sovereignty. The fact that over 80 percent of the world’s petroleum is now controlled by countries that have the power to manipulate supply with impunity goes directly to the notion of sovereignty. Middle East nations that supply oil to the world believe it is their sovereign right to extort outrageous profits which they allow to fall into the hands of terrorist organizations. For this reason, it is understandable the American Public believes it is their sovereign right to demand that their government take action to insure the development and availability of alternative fuels; an action that will force a return to the “balance” that defines global interdependence. How much will energy independence cost? American Energy Independence is both an ideal and a physical reality, like freedom (like our national independence). For example, if you want to know the cost of freedom, you would first need to look at the economic cost of the things that make freedom possible, such as the Military. Then you could easily find the cost of things like tanks or boots or ammunition, etc. Our national legal system also makes freedom possible, because it enforces the Bill of Rights when individual freedoms are threatened. for that reason, all costs associated with our national Justice system are also part of the price of freedom. Like the cost of freedom, when attempting to find the cost of American Energy Independence, the first thing to do is make a list of the things that would make American Energy Independence possible. Then the cost of the things that would make energy independence possible could be calculated as separate and distinct expenses. The USA is generally self-sufficient in the areas of electricity generation and natural gas, although there are political problems in those areas. Therefore, the cost of “energy independence” can be narrowed down to how much it would cost the USA to replace foreign oil with domestic alternatives. American Energy DEPENDENCE is synonymous with dependence on foreign oil. President Bush said in his 2006 State of the Union Address, “we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology.” Advances in new technology will break America's oil dependence. The President continuied, saying “...we are on the threshold of incredible advances.” The cost of American Energy Independence will be equal to the cost of “Independence from foreign oil”. But, not all oil is used for energy. Oil is also used for making plastics and synthetic fabrics, the soles of our shoes, etc. However, the USA imports more than 10 million barrels of oil everyday and, the USA uses more than 10 million barrels of oil everyday to make gasoline, diesel and jet fuel. So, America's “addiction to oil”, is a problem that can be solved by finding a solution to America’s dependence on petroleum (oil) to make transportation fuels. Let's look at the cost of gasoline. The USA consumes about 140 billion gallons of gasoline each year (about 380 million gallons of gasoline per day). If the average price of gasoline is $3 per gallon (over a year), then Americans will spend about (3 x 140 =) 420 billion dollars per year for gasoline. This means that whatever alternatives replace gasoline, Americans are already spending about 420 billion dollars per year to fuel their cars, so that money will be available to pay for the cost of the alternative fuels. The USA could save billions of dollars per year if it was not paying for the security of Middle East oil. The cost of U.S. Military operations in the Middle East are hidden costs of gasoline, which are not charged to the consumer at the pump. If the money the USA spends to protect and insure the flow of oil from the Middle East was put into the production of alternative fuels, then the “expense” of converting to alternatives would be less by that amount. If America could produce transportation fuels (gasoline, diesel and jet fuel) from its own natural resources, other than crude oil, America would be energy independent. And, the cost of American Energy Independence would then equal the cost of producing homemade (homeland) alternatives to petroleum based gasoline, diesel and jet fuel. Some people believe, or want others to believe, that Oil Independence is impossible. Like former Exxon Mobil chairman Lee R. Raymond who said, in a speech at the Woodrow Wilson International Center for Scholars, that energy independence is impossible and the very idea of American energy independence is a myth. Did Lee Raymond tell the truth? No, Lee Raymond did not tell the truth. He may sincerely believe there is no alternative to oil, but everyone knows that U.S. oil dependence has been very profitable for Lee Raymond and Exxon Mobil. It is important for every American to also know that it is indeed possible to completely replace gasoline with alternatives. Anyone can prove this by understanding a unit of measure called Gallon of Gasoline Equivalent or (GGE) and perform the following arithmetic exercises: A typical gallon of gasoline has an energy value of about 114,000 BTU per gallon. Convert 114,000 BTU to equivalent in Kilowatt hours. The result is: 114,000 Btu = 33.410 kilowatt hours. This means that one gallon of gasoline has an energy equivalent of 33.4 kilowatt hours of electricity. In a similar way the energy equivalency between gasoline and hydrogen gas can be found. Convert one gallon of gasoline to the GGE in hydrogen. The result is: One gallon of gasoline has about the same energy as one kilogram (1000 grams, which is about 2.2 lbs.) of hydrogen gas. Why is this important? Because the previous example proved that 33.4 kilowatt hours of electricity is equivalent (in energy) to one gallon of gasoline (114,000 BTU); this means 33.4 kilowatt hours is also equivalent (in energy) to one kilogram of hydrogen gas. Scientists know this because the common unit of energy, the joule, can be used to measure all the seemingly unrelated types of fuel and energy, and convert the energy value of one to another. Electricity can be used to produce hydrogen gas from water at about 70% efficiency (33.4 divided by .7 equals 47.7), which means about 50 kilowatt hours of electricity can produce and compress and deliver one kilogram of hydrogen gas to your car. (Storage of the hydrogen onboard your car is another question/problem). How does this information apply to American Energy Independence? It provides the mathematical foundation for proving that, if the USA wanted to spend the money, all 140 billion gallons of gasoline consumed each year could be replaced with 140 billion kilograms of hydrogen gas. Why would the USA want to do that? Because the internal combustion engine can use hydrogen gas in place of gasoline. And, all of the internal combustion engines on the road today, that use gasoline, can be converted to use hydrogen gas. (see also: eTec-Roush Hydrogen ICE Silverado Truck and Intergalactic Hydrogen) Americans may not want to convert their cars to run on hydrogen gas,
but know that it can be done today, using existing technology. Yes,
there
are
problems
and
considerations,
but
KNOW that it can be done. Seven trillion Watts produced
continuously for 1000 hours equals 7 trillion kilowatt hours. The Solar
Energy web
page provides detailed information about how to generate more than
7 trillion kilowatt hours per year
in the Southwestern USA desert using existing concentrated solar
energy technology. The United States can produce over one trillion barrels of synthetic fuels from its vast coal and oil shale reserves. One trillion barrels of synthetic fuel, at the current rate of oil consumption, could replace 100% of U.S. oil requirement and would last the USA for more than a century, long enough to develop renewable alternatives to completely replace hydrocarbon sources of fuel. A guarantee from the U.S. Government
to purchase Synthetic petroleum (fuels) made from American coal
or oil shale for $50/barrel (if the supplier could
not otherwise receive a higher price) would stimulate
the largest capital investment in U.S. history.
The question still remains unanswered: What will energy indepenence cost the American people?
American energy independence will not cost any more than what America is already spending to develop, protect and deliver existing sources of oil from around the world. If the USA can “save” the money now spent by the U.S. government directly and indirectly (and by the U.S. economy via hidden costs) to sustain the global oil economy, then the savings would be like money “earned” according to Benjamin Franklin. That “income” would pay for the cost of oil independence. How much can be “saved” and how much will oil independence cost? The U.S. Military has spent hundreds of billions of dollars attempting to “secure” Middle East oil – albeit in the name of “freedom and democracy”. In addition to the Military expenses, U.S. consumers are also paying higher prices for their gasoline along with other “hidden” fuel costs that have increased the price of everything consumers buy. War in the Middle East threatens oil production and delivery. Oil has been selling above $100 per barrel because uncertainty in the Middle East has created fear of oil shortages and supply disruptions in the global oil market. Freedom from oil dependence would end the uncertainty, and end the need for the expense of “securing” Middle East oil, saving the U.S. taxpayer an enormous amount of money... more than enough to pay for the Cost of American Energy Independence. If the American people were willing to set a guaranteed minimum price of $50 per barrel for synthetic petroleum made from USA coal or oil shale, then the Cost of American Energy Independence could be defined by the cost of subsidizing a new American synthetic fuels industry. Giving investors a guaranteed minimum price, which they could depend upon, would insure that all investment capital came from private investors, and not from direct government spending. The cost to the American taxpayer would only come when oil drops below $50 per barrel; then the synthetic fuel sales would be subsidized to make up the difference between the market price for oil and the $50 minimum guarantee. How would subsidizing a U.S. synthetic fuels industry save American taxpayers money and free America from oil dependence? The answer is this: Every barrel of synthetic fuel produced in the USA would displace a barrel of natural petroleum either directly or by reducing demand for natural petroleum on the world market. Every barrel of oil replaced by USA synthetic Crude reduces demand for Middle East oil by an equal amount, and thereby reduces Middle East oil income, having a direct impact on the funds flowing to Islamic terrorist. Without finances, Islamic terrorist front organizations cannot effectively recruit and train and spread their propaganda. Cutting off the terrorists' funds would cripple their organizations, which would then allow the U.S. to reduce its Military operations, saving billions of dollars per year. If the U.S. Government guaranteed a floor price of $50 per barrel for synthetic fuel made from U.S. natural resources (not exclusively coal and shale), then investors would jump on the opportunity to produce a domestic replacement for oil. When the new synthetic fuel industry begins to threaten Middle East oil suppliers, they will lower the price of their oil. (Saudi Arabia can sell oil for five dollars per barrel today without losing money.) If Middle East oil begins selling for $40 per barrel (for example), and U.S. synthetic fuel is forced to sell at the same price [in the domestic U.S. market] in order to be competitive, then the U.S. taxpayer would be obligated to pay the difference of $10 to the USA synthetic fuel industry for every barrel that they sell for $40. Let’s say the new synthetic fuel industry produces ten million barrels per day, then the U.S. government would be subsidizing ($10 x 10 million barrels=) one hundred million dollars per day. Multiplied by 365 days = (100x365) $36, 500, 000, 000 (thirty-six billion five-hundred million) dollars per year. In this example, American Energy Independence would cost just under thirty-seven billion dollars per year. Is that too much? • Ask how much Homeland Security costs — is
that too much? Is there anyone who still cannot see the connection between the flow of oil money into the Middle East and the flow of terrorism out of the Middle East? Demand for oil in the West has created oil wealth in the Middle East. Oil wealth in the Middle East finances militant Islam. Without demand for oil from the West, the Middle East would have nothing. They have no other source of income. And don’t be fooled, the rising demand for oil from China is really only Western demand for the products that are now being made in China… without the West’s demand for products, China would not need to import oil. The U.S. taxpayer must see that subsidizing a synthetic fuel industry in the USA would be the most cost effective form of national security that money can buy. Of course, for this to succeed there would need to be an export ban on U.S. synthetic fuels. Otherwise the American taxpayer could be suckered by manipulation of the global oil market. For example, Saudi Arabia could drop the price of their oil to $10 per barrel, and then offer to buy and resell 20 million barrels per day of U.S. synthetic fuel on the world market for $10 per barrel. The Saudi's would neither make nor lose money doing this —and they have a Trillion dollars in cash to support their lifestyle while they drain the U.S treasury via the government subsidy (punishment for threatening their oil dominance with synthetic fuels). In this scenario, the U.S. synthetic fuel industry would not be hurt, but the U.S taxpayer would be subsidizing the world oil economy. An argument could be made that under this scenario the Saudi's would have no cash flow and their “welfare economy” would burn through their trillion dollar savings very fast. Perhaps it would be worth it. A bankrupt Saudi Arabia could no longer finance Wahhabism, the fundamentalist Islamic movement that has its roots in the extreme Islamic Takfiri ideology —a religious belief that encourages its followers to use violence as a means to achieve their goals. The examples above show that America has choices—gasoline can be replaced by alternatives using existing technology, and Lee Raymond at Exxon Mobil was not telling the truth. The Cost of American Energy Independence is more political than economic. When the American people demand their government enact energy independence, it will happen. Opponents of synthetic fuels believe its production will double the amount of CO2 produced by the coal industry, because coal or other hydrocarbons would be burned to produce the hydrogen needed to make the synthetic fuels. If that objection is genuine, and not merely a ruse designed to block future use of hydrocarbons solely for ideological reasons, then the opponents have nothing to fear. If they become proponents of synthetic fuels produced by a hybrid process that uses renewable hydrogen exclusively to convert the heavy hydrocarbons (coal, oil shale and tar sands) to synthetic fuel via hydrogenation or coal liquefaction, then no CO2 would be released to the atmosphere during the production process, because hydrogenation is done in the absence of oxygen. The hydrogen can also be produced by nuclear energy which, like renewable energy, produces no CO2 emissions. References: Articles:
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Copyright © 2003-2008 Ron Bengtson. Boise, Idaho USA |
The
answer can be found in Ben Franklin's wise old adage: “A penny
saved is a penny earned” — Benjamin Franklin 