Populist movements don't build themselves ...

... It doesn't matter what the "horse race" outcome of the campaign is, if we fight the campaign. Fighting it, we learn how to fight. Learning how to fight political battles, we become citizens again. Becoming citizens again, we reclaim the Republic that lies dormant beneath the bread and circuses of modern American society.

Sunday, June 20, 2010

Sunday Train: Can the US get its Energy Freedom Act Together?

Burning the Midnight Oil for Living Energy Independence

Here we are:
  • a long, long way from full employment and full capacity utilization, when only the ignorant and ideologically insane would imagine any general objections to increased government spending on useful long term
  • and with a gusher in the Gulf reminding us that the Oil Companies are lying liars and listening to their assurances and advice leads to disasters at best and calamities at worst

... and yet there is a genuine question whether or not the Federal government will take the bit between its teeth and push ahead toward funding a 21st century oil-free transportation system.

While it is a fun thing to imagine different institutions to see through the development of different alignments, lurking in the background is the worry: what if our body politic is just broken, and this time we cannot do what needs to be done?

The Dread Specter of Deficit Errorism

The main reason for concern is the problem of Deficit Errorism: people engaged in magical thinking of one sort or another who work under a fantasy model in which the Federal Government faces a finance constraint on the spending of its own sovereign currency. This malignant fantasy once again raised its ugly head in the recent Senate vote on extending Unemployment Benefits:
Resolving the impasse that has pitted deficit concerns against traditional social safety net programs provides an object lesson on how hard it is for Congress to legislate at a time when public anger over government spending is growing but the appetite and need for government programs has not waned.

And where does that "growing public anger over government spending" come from? Its stoked by well researched memes irresponsibly spread by corporate media. Find out that people are angry about government bail outs of big banks, and then find a way to direct it to generate poll results that scare Senators into voting against extending unemployment benefits.

Throwing the Baby Out With the Bathwater on "Energy Independence"

But, "oh! That is just the GOP = Generosity of Oil Party". Yet then to listen to Rachel Maddow declare:
Want to know why Energy Independence is still a goal ...? Its because its not a real thing.

Bull excrement. Of course its a real thing. Its because we have talked about it but not done anything about it.

Well, she qualifies this, but then launches into the silly red herring that has so taken the centrist and progressive blogosphere, that cutting our net oil imports down to zero would not be accomplishing anything because "oil is fungible".

The fact that oil is fungible of oil has nothing to do with why every President elected since 1968 except Jimmy Carter has been lying to the American People when pretending to be pursuing Energy Independence. They've been lying about Energy Independence because they have been proposing to pursue it with policies that are incapable of achieving Energy Independence

Oil was just as fungible in the 1940's and 1950's as it is today, and we were Energy Independent then and addicted to imports now.

Bulk wheat, rice and corn is fungible, but a country that is food self-sufficient cannot be starved into submission, no matter how much cross trade they have in any cereal grain or how much they tend to export one crop an import another. A blockade or disruption of external supplies can never be the cause of famine in a food self-sufficient country.

Dependency matters. Dependency is a loss of freedom of action. No matter how much the authors of political fiction that pass as foreign policy speeches for so many elected officials wish to imagine that US military might makes us mighty - we are a giant with shoulders of steel and feet of clay.

Before the 1970's, the United States has never been dependent on outside countries for food or energy or transport or shelter. It is true that at one time we were dependent on outside countries for the equipment required to maintain a manufacturing industry, and worked very hard to eliminate that dependency. And then, once we had ... we were not a wealthy country, we were in income terms at best a middle-income country ... but we were an independent economy, free to pursue our own national interests as we saw them.

But since the 1970's, increasingly, not. Since the 1970's, we have been trapped by our addiction to imported energy.

It is true that this is about oil, and ideally we would target zero oil consumption in 20 years ... but if we achieve 80% to 90% reduction in oil consumption and simply get back to an oil surplus, and at the same time avoid becoming dependent on some other imported energy source ... that would be real, genuine, energy independence.

The reason that the Republicans in the last campaign were lying is because we already tried Drill Baby Drill, and we got our oil imports reversed by tapping lots of little pockets of hard to obtain oil, and then the ongoing decline in our old big oil fields reversed that and imports started exploding again. They were lying about the safety of offshore oil production, but more critically they were lying in pretending that tapping every single oil field physically in reach despite all safety hazards and environmental impact could not conceivably reverse the decline in our oil production.

The Democratic position was not so much a lie as a clever bit of rhetoric that meant far less than it sounded like. Obviously, being in the Western Hemisphere, the US tends to buy more oil from producers like Venezuela and Nigeria and Angola than from producers like Saudi Arabia and Iraq and Iran. So promising to get "independence from Middle Eastern oil" was just empty campaign rhetoric. Its not Energy Independence unless its independence from Imported Oil.

Or, perhaps, if Energy Independence has be ruined by far too many people led to think it has something to do with using using less than 1% of total world oil production on top of our existing 10% of oil production to feed our oil habit consisting of 25% of world oil production ...

... if too many people think that "Energy Independence" means covering a 15 cents on the dollar budget shortfall with less than a penny on the dollar in resources ...

... then hell, call it "Energy Freedom".

An Independent US Economy Requires Oil Free Transport

60%~70% of our oil is imported, 60%~70% of our oil is consumed in transport. If we do not do a serious full court press for Oil Free Transport, then as we experience the coming series of serious oil price shocks - the ones that will let people know that $4/gallon was a pre-earthquake tremor, and by no means the main event - our Economy is screwed.

It really is that simple. While the Generosity of Oil Party sells one after another fantasy simplification of reality, and the Democratic Party establishment seems to aim to make every policy proposal into a hopeless muddles so nobody can tell how far short it has fallen of the lofty campaign rhetoric ... here, at least, we do have a simple, true no matter what the economic conditions are, stable place to plant our flag.

Recession? We need work. We need the government to spend money to directly or indirectly put people to work. But we are a dependent economy, so we do not have the freedom we once had: if our dollar melts down, gasoline and diesel prices will skyrocket and our economy is screwed.

Solution? Spend money on things that will reduce our dependency on oil. Then there is on the one hand less reason for speculators to dump dollars, and on the other hand less damage done if they do.

Overheated economy leading to inflation? In the face of demand-driven inflation, we need to increase productivity and increase productive capacity. The short-circuit to a classic wage-price inflationary spiral is to cut producer price inflation, so that rising wages do not force an equal increase in prices leading to pushed for "catch up" wage increases and so on.

Solution? The simplest, most easily accessible sources of increased efficiency are the massive energy waste build into our transportation and logistics system.

Imported cost inflation? This is the easiest of all: all three episodes of substantial imported cost inflation that we have experience, in the 70's, early 80's, and just recently, have been due to oil price shocks. Reduce our dependency on imported oil, reduce our exposure to oil price shocks.

Getting Around Deficit Errorism

Paradoxically, the malignant fantasies that lead politicians into Deficit Errorism leave the door open for getting serious about oil-free transport.

The thing is, over the long term, the shift of our transport from inefficient oil fed systems to more efficient, domestically powered alternatives will have a stimulus impact just because we are importing less oil. What we need is to get the ball rolling.

So we can fund this with dedicated taxes and other revenue sources, setting up Development Banks that allow borrowing against future dedicated revenue streams. If done right, the bill is in formal terms balanced budget - and of course in terms of the national economy an overall surplus, because cutting our energy imports is a real saving to our national economy.

So, just hypothetically: take the Cantwell / Collins carbon auction system with a 75% Social Dividend built in. Instead of a free for all for the other 25%, allocate 10% according to the location of employment in affected industries, and 15% to subsidizing Connie Mae financing of carbon reducing spending by consumers and businesses. Since Connie Mae financing is primarily funded by the reduced energy cost of the financed projects, the leverage of putting 15% of carbon permit auction revenues is tremendous.

And then, allow five times the present annual Social Dividend to be allocated to Connie Mae financed spending. Now instead of just offsetting the cost of the carbon permits, the system is leveraging more business nationwide for qualifying Connie Mae financed spending.

Then, add to that same bill a 1% plus 5 cents per gallon import tariff on imported petroleum and all petroleum products were countries have a free hand on setting import tariffs. Devote 20% of the revenue to individual accounts for cities, counties and reservations in oil-free transport systems. Devote 20% to each of four Line Development Banks to develop national "Steel Interstate" rail corridors providing electric freight rail, including 100mph rapid freight rail, from coast to coast, combined with a national network of Long Haul HVDC grid to grid transmission lines to connect all domestic renewable electricity resources to the grids serving the nation's electricity consumers.

In rough terms, that is from a quarter to a third of the way there. So fracking pass the bill and get to work on the next one.

The Question Is Not Whether It Can Be Done ...

This is not a theoretical question. This is not something that requires development of amazing new technologies. This is not something waiting for breakthroughs.

Enough breakthroughs have already been made.

New developments would, of course, be nice. Under mature technology, this will rely heavily on utility scale wind power and point-of-use solar power, supplemented by some utility scale peak solar power. Under mature technology, this will rely heavily on electric catenary and trolley-wire rail and trollery-wire/battery trolleybus transport systems, complemented by suburban infill to support pedestrian and cycle access, and supplemented by pluggable hybrid electric buses.

And if we start doing it, that may well not be the final shape of things, because if we start doing things, we may end up finding some new ways of doing things that as they mature take over in unexpected ways.

But even without any big technological advances, we can get this, in terms of the available, already proven hardware. Hardware is not the problem.

What is subject to doubt is whether we can get our act together. We have a clear and straightforward goal to aim at. A goal that our politicians have been lying about and paying lip service to for years. And our decades of time to slowly edge toward a solution has been completely wasted in a combination of phony policies and aggressive counter-attacks from the vested interests who are on the wrong side of history.

But can we get our act together? Can we seize this moment, shed our Addiction to Imported Oil and pursue Energy Freedom?

Midnight Oil ~ River Runs Red