Gasoline Tax – Wrong / Oil Import Duty – Right

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Our congress critters in Washington are talking about a 50ยข a gallon gasoline tax as an incentive for people to reduce consumption. All this will really do is further screw the little guy and tank whatever might be left of our economy. The problem with this approach is that it doesn’t encourage the development of alternative energy sources.

Our dollar isn’t worth squat, and the reason for that is that we import a huge percentage of our energy needs, while no longer exporting a significant amount of manufactured goods. Being the worlds food supplier is what used to save our butts from total collapse, but the rest of the world has been learning how to grow their own food and so that’s no longer balancing our imports.

To add insult to injury, many major corporations have outsources services, things like customer support, to foreign countries where the labor is less expensive.

The sad thing about the energy situation is that we have no lack of raw materials right here at home. Really, we need to get off the oil teat, but that is hard to do with all of our capital going to foreign countries to purchase the stuff, so returning to domestic production is a first step since it will keep the capital at home, and if we do it correctly we can also encourage the switch to clean renewables at the same time.

If I were King, that is if I were in George Bush’s shoes, instead of spending three trillion on a war and killing and maiming a bunch of people, I’d slap a $20/barrel import duty on foreign oil. Instead of just reducing consumption, which to be sure is not a bad goal if it can be done without totally tanking the economy, but thanks to five years in Iraq, right now it can not, this approach would encourage the production of domestic sources and renewables by making them economically competitive. It would be good for the dollar because it would reduce imports. By encouraging domestic production, it would make jobs here at home which would be good for the economy. By encouraging alternative energy sources it would be good for the environment.

Let’s look at what we have here that could solve our energy woes, because we have a lot of alternatives. First off, we have oil! Yes, shock, I know. The thing is, it’s not as cheap to extract as oil in Saudi Arabia or Iraq if you don’t count the three billion in tax payer money used to steal it, but it’s here, lots of it.

There is another issue with domestic oil though, much of the close to the surface easy to get at stuff is heavy sour crude. US refineries are not equipped to deal with heavy sour crude. Venezuela has similar quality oil, yet, they meet their own energy needs and export a huge amount of refined goods. Citgo gasoline up here, that’s Venezuelan gasoline. They build the refineries needed to refine the stuff.

Now here’s a rub, we have approximately the same amount of the same quality oil as Venezuela in southern California alone! But we’re just letting it sit there, because we haven’t got the refinery capacity to deal with it. And our oil companies won’t build the capacity when they can extract oil from the ground for under $8/barrel from Saudi Arabia and Iraq and the US taxpayers foot the bill for the war required to steal it.

If we added another $20/barrel to import the stuff and took away the tax payer financed war to procure it, building refineries capable of dealing with heavy sour crude would all the sudden start to look real attractive. We’ve got several trillion barrels of oil locked up in tar sands and oil shale. The oil companies tell us this is too expensive to process. Yet, they’re doing it in Canada, extracting, decoking, and cracking to make lighter products, all for under $20 low value American dollars a barrel for existing installations, around $35/barrel when you include the capital costs of new capacity (which is rapidly growing). There are also some small firms that are extracting oil shale oil for around $14/barrel. There is no reason that can’t be scaled up.

What people don’t understand is that the diminishing production in the US has nothing to do with the Hubert curve, it has nothing to do with half the resources being exhausted. What it has to do with is oil fields in the middle east where you can poke a hole in the ground and the stuff squirts out under pressure. Those fields are diminishing and now pumping and steam injection and other techniques are often needed but there is more deeper and there is also much heavy crude that nobody wants because of the lack of refinery capacity to deal with it.

I mentioned that it is mostly heavy crude here; the easy to get at stuff. But there is some light sweet crude still available however it’s deep and generally drilling through bedrock is necessary to get at it. Several super giant fields of this nature have been discovered recently. They weren’t discovered until recently because until recently nobody drilled through bedrock or basement rock because oil of biological origin doesn’t exist there. Oil of biotic origin can only be found in sedimentary deposits.

But natural gas, oil, and solid hydrocarbons are all produced, in abundance, in the Earth’s mantle. Some of it seeps to the surface and can be extracted without drilling deep but most of it remains deep within the Earth requiring deep drilling to extract. The technology for drilling deep enough has only recently been available in the United States. It’s been available in Russia for a number of years and it’s what allowed them to become the worlds second largest oil producer and for a short time, before the Russian government confiscated a good portion of Yukos assets, the worlds largest. They’ve done it by drilling through granite bedrock to tap abiotic oil below.

Generally speaking, deep abiotic oil tends to be of the light sweet variety because the lighter components have been trapped and haven’t had a chance to evaporate off or disperse.

Here in the United States, this abiotic oil is just starting to be tapped; wild cat oil prospecting company Wolverine Oil drilled deep in parts of Utah that Chevron had declared barren and they found oil, lots of oil, and not just any oil, but the desirable light sweet crude. A super giant field containing light sweet crude has also recently been discovered in the Gulf of Mexico about 175 miles from New Orleans, and this involved first going through five miles of water, and then a number of miles through the ocean floor crust. Abiotic oil from the mantle is what’s being tapped and again it’s light sweet crude. Mexico has found a similar super giant field, and so has Brazil off of it’s coast. This stuff exists in great quantities all over, it just happens that the ocean crust is thinner and it’s easier to get at there, but still difficult and expensive.

The point is, we have plenty of oil domestically, the only reason we import oil, is that it is cheaper to obtain from foreign sources if all the real costs, the cost of the war, the impact on the value of the dollar that results from having a negative trade balance, aren’t considered. The oil companies don’t incur these costs so they don’t care. But if we slap a $20/barrel import duty on imported oil, they’ll start caring.

Now what else can we do? Well, let’s look at a huge amount of wasted energy in this country, night time electricity production. You see, nuclear plants can’t be throttled down at night because it takes too long to get the nuclear chain reaction back up to a higher level again and there is tremendous thermal mass involved as well. Thermal mass and boiler dynamics also make it difficult to throttle coal fired plants. Because nuclear and coal together provide 71% of the US electricity generation, we have a huge wasted capacity surplus at night.

There is enough surplus in fact to provide all of the energy we use in the daily commutes of the entire US. We could displace the majority of oil used for gasoline by converting to plug-in hybrids or all electric vehicles with enough range to handle our average commutes. In other words, we could eliminate the importation and burning of all that oil used to make all the gasoline we use for commuting, eliminate all of that carbon dioxide production, without generating a single gram of additional carbon dioxide or nuclear waste producing electricity because all of that carbon dioxide and nuclear waste is already being produced but the energy is simply being completely wasted. This is really nothing short of criminal.

Our politicians keep telling us, replace your incandescent bulbs with compact fluorescents and save the planet but that will do nothing towards stopping these HUGE systematic energy wastes and that’s what we need to address. If we did this, we could eliminate oil imports, the cost of oil would plummet, and our economy would benefit and we would decrease carbon dioxide emissions in a huge really substantial way instead of kind of barely.

What else can we do that will save huge amounts of money? Well, about 17% of the energy put into the grid never comes out the other end, and this is largely because of the losses in long distance AC transmission lines. We could eliminate about 90% of those losses by converting those lines to DC transmission. At the same time we would increase the capacity of the grid, because converting to DC eliminates phasing issues that result from line sag caused by thermal loading. We’d eliminate electromagnetic radiation from those long distance transmission lines and the leukemias and other cancers that go with it. We’d eliminate the susceptibility of our grid to space weather and avalanche grid failures. For any line longer than 300km we’d save money in the process. The problem, thanks to deregulation, nobody wants to pay for grid improvements. If we eliminated 15% of the losses in the system, that would enable us to shut down more than half of our natural gas fired plants; that natural gas could be turned into liquid fuels via the Fischer-Troppe process displacing even imported oil.

We have enough wind sites in just three states to provide the power needs of the entire country, if we had a sufficiently robust grid to distribute the power and if the wind was consistent, but it’s not, and there in lies a problem with wind power.

But it’s a solvable problem, if we build 3x as much wind power as we need and distribute that geographically, then somewhere there will always be wind and enough capacity; however, having to overbuild by 3x ruins the economy of wind power, unless you can do something else useful with it, and you can!

There are two technologies at present that can take carbon dioxide, water, and electricity and turn it into butynol, an alcohol that unlike methanol and ethanol, can be burned in existing gasoline engines without modification and actually generally provide better power and mileage than gasoline. It also produces only about 3% of the emissions that gasoline produces in the same car. It is thus an ideal fuel for existing gasoline cars. It can also be mixed with diesel, although how much can be mixed depends upon the cetane requirements of the diesel engine because butynol has a cetane rating of only about 25 where most diesel engines require around 45. However, added to biodiesel, it can actually raise the cetane rating. Butynol also can be substituted for diesel in turbines such as jet aircraft engines, and many of the gas fired power plants could also burn butynol. Initially, these plants could be placed near coal fired plants and use the CO2 produced to produce liquid fuels instead of being released in the air. Yes, it would be released when the fuel is burnt, but if conventional fuels were burned, they would have produced CO2 in addition to that produced in the coal plant.

As wind power production increased coal plants could be taken off line. As the supply of CO2 from coal fired plants becomes scarce, we could sequester the carbon dioxide from the atmosphere and start reducing the carbon dioxide in the atmosphere. This could be done by a variety of methods, chemical means or fractional distillation of liquified air.

The Bussard Polywell fusion reactor is close to being a power producing reality; the last research reactor before a naval propulsion reactor is build, has been built and if it tests out, a 100 MW naval production reactor will be next. These cost about 1/1000th of what it costs to build a Tokamak fusion reactor or a nuclear fission power plant and produce only helium as a waste product. Further, there is enough fuel available to provide for our energy needs for around 15 billion years. There are no exotic materials required to build these, superconductive magnets aren’t required, no nuclear waste produced, no danger of an explosion or melt-down. These would be safe to build in cities, where any waste heat could be used for domestic or industrial heating.

They are small and light enough that they could find applications in large aircraft or space craft. They could make terraforming a practical reality in a short time frame by allowing huge amounts of energy to be applied to the problem.

In the Western US we have huge geothermal resources; enough to power the entire country if they were fully exploited. Mother Earth is always producing heat internally and gets kind of pent-up if it can’t find an escape route and we end up with Mt. St. Helens, so why not exploit this resource to the fullest and use all of that energy for useful things rather than allowing it to devastate hundreds of millions of acres.

The nuclear industry really needs a revamping, both because it could provide much cleaner and more abundant energy but also to get rid of the transuranic waste instead of trying to store it for 50,000 years which is just plain hocum. All we are doing is creating a disaster for future generations if we don’t deal with this problem now.

The beauty is we have the technology to do it. A type of reactor known as a fast-fission reactor, one that uses fast neutrons instead of thermal neutrons to induce fission, can burn all of the actinides, the long lived transuranic waste products. A conventional one-pass reactor only utilizes about .7% of the natural uraniums energy potential, this type of reactor with a closed recycling cycle, could use 96%, in other words, it would get 137 times more energy out of the same fuel while producing waste that is only hot for 300 years instead of 50,000 and while reducing the waste volume by a huge amount. There is even technology that could take the longest lived isotopes in fission products and reduce those to products that will decay in less than twenty years, and energy could be extracted in the process.

The type of reactor necessary to do this would use helium gas, liquid sodium, lead, or liquid salts as a coolant. This is necessary because water acts as a moderator and slows neutrons. Operating at a higher temperature this reactor would be more efficient thermally and produce less waste heat.

In many other countries, instead of cooling towers, the waste heat is piped to cities and used for residential or commercial heating. This is something we should be doing in this country instead of just dumping that waste heat into huge cooling reactors and heating rivers downstream from the plant.

Solar energy is also becoming cheaper, particularly some new thermal solar schemes using cheap plastic Freznel lenses for concentration of solar energy. Because there is a 90% correspondence between solar energy availability and electrical load, this type of power production can be very economic. The more power we produce from renewables, the more CO2 production we can offset.

One last thing we really should do is electrify our railroad system. North America is the only continent in the world that is still backwards in this respect. This makes us dependent upon diesel fuel for our railroads. Electrifying it would allow them to run from whichever energy source is the least expensive at the moment and would insure the ability to get food to our tables and move products about the country. We really need to get away from dependency on a single fuel for our very survival.

Take a moment to write your congress critters and help instill these ideas into their head. We can’t keep doing business as usual, it isn’t working.

Category: Future

5 comments on “Gasoline Tax – Wrong / Oil Import Duty – Right

  1. It is NIMBYs who are preventing refinery construction.

    In any case we are currently operating at only 85% of refinery capacity when the optimum is 90%.

    Gasoline use is declining due to higher prices.

    And the dollar is rising.

    I really hate when I do a post and circumstances change after I write a post.

  2. This issue isn’t one of raw refinery capacity, the issue is one of the right type of refinery capacity.

    Most of the US refineries are only capable of dealing with light sweet crude. Heavy sour crude requires additional sulfur removal capacity and cracking capacity to break the heavier molecules into lighter more useful molecules. It is the capacity to process heavy sour crude which we lack.

    Light sweet crude that is easy to get at is becoming scarce, you can get it if you drill deep, but that is expensive.

    Heavy sour crude is abundant and easy to get at, but we haven’t got the proper type of refinery capacity to utilize it in this country.

    Yes, NIMBY’s are always a problem, as a country and as a planet we have to get over that somehow and start thinking in terms of what is best for the entire planet.

  3. Glad to see you still around. I loved the orginal EskimoNorth BBS. I’m also happy to see this website, as far as I’m concerned the more people who put forward the deep oil fact, the more the myth and comedy of peak oil crumbles. The very phrase of fossil fuel is pretty recent, and is science based on ignorance. Who ever dreamed that up is probably still laughing. Thanks again Nanook.

  4. I do actually believe we are close to peak oil, but not because we’ve used half of what is in the ground, rather for the same reason we’ve passed peak coal, better, cleaner, but also more economical energy sources are emerging and because a handful of people are beginning to realize that there are some negative environmental consequences that are potentially enormous. As I’ve stated, I don’t think the most pressing issue is global warming, but rather ocean chemistry, anoxia more than anything else. I also don’t believe we are the only cause and maybe not even the most significant cause, there are significant changes happening that would be happening even if we weren’t contributing CO2 to the atmosphere.

  5. Well said! I’ve have thought this way ever since 9/11 but I have never heard anyone else make the point that “cheap” mid-east oil is actually supported by billions of taxpayer dollars spent on mid-east foreign aid and military enterprises. It would be interesting to make a rough calculation of the dollars-per-barrel subsidy (total dollars spent to keep mid-east oil flowing divided by total barrels imported from the mid-east). I’m not sure it’s as high as $20 but maybe it is. Even if it is only $5 a barrel, we still have to consider the political cost of mid-east interventionist policies with respect to our European allies. I have also not heard the case made so well for domestic production and refining and I have never heard anyone raise the topic of abiotic petroleum, which has intrigued me ever since I read an article about Thomas Gold’s theories in Atlantic magazine back in te late ’80s. We need more people to be informed about what we can do to get economically and politically independent from the middle east. Unfortunately the two major political parties don’t have any new ideas. The Republicans want to stay on the course of political and economic disaster, while the Democrats want us to forgo a comfortable modern lifestyle and instead live in unelectrified biodegradable grass huts, riding bicycles to work.

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