White House Chronicle

News Analysis With a Sense of Humor

  • Home
  • King’s Commentaries
  • Random Features
  • Photos
  • Public Speaker
  • WHC Episodes
  • About WHC
  • Carrying Stations
  • ME/CFS Alert
  • Contact Us

Europe and Its Slippery Energy Slope

December 3, 2013 by White House Chronicle 2 Comments

BRATISLAVA, Slovakia — Europe, at present the world's largest market and largest economic bloc, is decline and living standards are in danger. That was the sober message at an energy conference here, delivered by a battery of speakers from across eastern Europe.
 
The narrative is that energy is what is dragging Europe down – not low birthrates and pervasive social-safety networks, but increasing dependence on expensive energy imports and hopelessly tangled markets.
 
Although delegates gathered to discuss the particular problems of eastern Europe, many had comments about the energy dependence across Europe; its labyrinthine regulations in nearly all 28 countries, its inability to form capital for large projects like nuclear, and governments intruding into the market.
 
The result is a patchwork of contradictions, counterproductive regulations, political fiats and multiple objectives that leave Europeans paying more for energy than they need to and failing to develop indigenous sources, such as their own shale gas deposits in Ukraine and Poland. It also leaves countries dependent on capricious and expensive gas from Russia, unsure of whether they can build needed electric generating plant in the future and poorly interconnected, sometimes by both gas pipelines and electric lines.
 
Good intentions have also had their impact. The European Commission has pushed renewable energy and subsidized these at the cost of others. The result is imperfect markets and, more important, imperfectly engineered systems.
 
Germany and other countries are dealing with what is called “loop flow” – when the renewables aren't performing, either because the wind has dropped or the sun has set, fossil fuels plant has to be activated. This means that renewable systems are often shadowed by old-fashioned gas and coal generation that has to be built, but which isn't counted toward the cost of the renewable generation.
 
With increasing use of wind, which is the most advanced renewable, the problem of loop flow is increased, pushing up the price of electricity. Germany is badly affected and the problem is getting worse because it heavily committed to wind after abandoning nuclear, following the Fukusima-Daiichi accident in Japan.
 
Frank Umbach, associate director of the European Center for Energy and Resource Security at King's College, London, said energy costs in Germany are now driving manufacturing out of the country and to the United States.
 
Umbach said that as Britain de-industrialized 15 years ago, Germany was beginning to go the same way. He said Britain had been able to sustain itself through financial services and other service sector jobs, but that was not a prospect for Germany, the industrial mainstay of the European Union. Now Britain, with its new nuclear policy, is trying to re-industrialize, he said.
 
Umbach urged that Europe get serious about shale gas and even burning coal. His argument was that there are environment safeguards available and that more are being developed, such as the new less environmentally assaulting techniques in hydraulic fracturing (fracking) used to extract tightly bound natural gas from shale formations.
 
Several speakers said the region has to face the reality that it is no longer able to generate the capital it needs for liquefied natural gas terminals, nuclear power plants and unconventional gas recovery in Ukraine, Poland and in the Black Sea offshore Romania and Bulgaria.
 
Many countries, particularly in eastern Europe, still balk at foreign ownership of their energy infrastructure and have actively driven away investment. Poland, for example, has frightened off shale gas developers from the United States by insisting that as the resource is developed, 50 percent of the developing company must be ceded to the state. The companies left.
 
In other places, the Czech Republic, for example, landowners have no claim to the resource under their land; that remains the property of the government and, therefore, they are hostile to any development on their property, whether it is for oil, gas or minerals.
The United Kingdom, by contrast, declared a spokesman for its energy ministry, Hergen Haye, is open for business. That means if the Americans, the Chinese of the Middle Easterners want to “buy into” Britain's new nuclear undertaking, “they are welcome.”
 
Europe's sad energy situation was summed up by Iana Dreyer of the EU Institute for Security Studies. She said Europe is still the largest trading bloc in the world, the largest economic machine and the largest market, but that it is slipping. By 2030, she calculated, Europe will have slipped to No. 3, behind the China and the United States, unless it can untangle its energy Gordian knot.
 
Europeans here cite the United States as the way to go in energy. It makes a body feel good. — For the Hearst-New York Times Syndicate

Filed Under: King's Commentaries Tagged With: alternative energy, coal, electric generation, energy, European Union, liquefied natural gas, LNG, nuclear, shale gas, Slovakia, wind power

New Oil Discoveries Threaten Obama’s Energy Strategies

March 4, 2010 by White House Chronicle 5 Comments

 

“When an irresistible force such as you

“Meets and old immovable object like me

“You can bet just as sure as you live

“Something’s got to give …”

— Johnny Mercer

When Johnny Mercer penned those words, he was speaking of love not politics, and not the politics of energy. But he could have been.

In energy, there are two great forces that collide: public policy and the market. Despite the love affair of recent decades with markets, neither is always right.

Consider the struggle between old energy –market-tested and with a mature infrastructure — and new, alternative energy.

Public policy, under Republicans and Democrats, has sought to discourage the nation’s ever-greater dependence on imported oil (about 60 percent). But the market has sung a siren song, tempting us to more oil consumption.

Back in the 1970s, when we imported only 30 percent of our oil, the country was frightened into making great efforts in research and development to find alternatives to oil. Most of those concentrated on oil substitution and new ways of making electricity. None of the new ideas penetrated the market in any serious way, with the possible exception of wind, and that took many years to gain general acceptance and to overcome institutional and technical issues.

The Big Enchilada, oil, proved to be recalcitrant. President Jimmy Carter wanted to make it from coal; a nascent ethanol industry was tentatively testing the forbearance of government in seeking tax breaks and subsidies.

The search for a way out began after the Arab oil embargo of 1973-74, and reached a zenith with the Iranian Revolution of 1979. Many well-intentioned programs were undertaken, concentrating primarily on coal — coal as a gas, coal as a fluid and the improved combustion of coal.

But it was then, as it is now, a wild time for new entrants. Dozens of projects were funded including magneto-hydrodynamics, in situ coal gasification, garbage to electricity, battery research, cryogenic transmission research and energy storage in fly wheels.

Some, if not a majority, of the projects were pure science fiction.

The energy establishment favored not so much the new as the duplicative. Its members leaned to coal, oil shale, more oil and gas leasing and more nuclear. The old Mobil Oil Company paid a whopping $212 million for a Colorado oil shale lease without regard to how it could be worked.

Across the Southwest, banks lent to every energy project that came through the door. Natural gas got short shrift because it was wrongly thought to be a depleted resource.

Then in the mid-1980s, Saudi Arabia opened its oil spigot all the way (10 million barrels a day) and the market annihilated expensive energy from new sources. With gasoline cheap again, SUVs hit the roads in giant numbers; a string of Southwest banks collapsed; and the energy debate turned not to changing consumption but to deregulation, facilitating profligate use across the board.

The market spoke and it shouted down concerns about national security or technological substitution. Public policy surrendered to the market. Despite fine speeches from secretaries of energy on the danger of exporting our security and our money, the market continued its advocacy of excess.

The George W. Bush administration identified our vulnerability in oil and identified a looming crisis in electricity. But it faltered when it came to government coercion of markets; for example, getting more nuclear plants built.

Bush himself fell for the temptations of ethanol from corn and the possibility of switch grass. Now these are under threat from new discoveries of oil off Brazil and far greater estimates of oil production from Iraq. In fact, Iraq is being touted as a rival to Saudi Arabia with Brazil right behind it.

The Obama administration is hell-bent on getting off old energy. It loves “alternatives” and it’s committed to doing something about global warming.

But in research, money does not equal results. While the Department of Energy is chock full of money for new energy research and development, cheap natural gas and new potential oil from unexpected quarters may do to Obama’s new energy hopes what it did to Carter’s: undermine and expose them to ridicule.

Public policy may again be pushed around by the irresistible force of the market, even if it is not serving the national interest.

 

Filed Under: King's Commentaries Tagged With: alternative energy, biofuels, Brazil, gas, Iraq, nuclear, oil, President Barack Obama, President George W. Bush, President Jimmy Carter, Saudi Arabia, U.S. energy policy

  • « Previous Page
  • 1
  • 2

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
Can Our Waterways Provide a New Source of Baseload Power?

Can Our Waterways Provide a New Source of Baseload Power?

Llewellyn King

This article first appeared on Forbes.com Virginia is the first state to formally press for the creation of a virtual power plant. Glenn Youngkin, the state’s Republican governor, signed the Community Energy Act on May 2, which mandates Dominion Energy to launch a 450-megawatt virtual power plant (VPP) pilot program. Virginia isn’t alone in this […]

The Problem of Old Leaders — Churchill’s Sad Last Years in Office

The Problem of Old Leaders — Churchill’s Sad Last Years in Office

Llewellyn King

Old age is a thorny issue. I can attest to that. As someone told my wife about me, “He’s got age on him.” Indubitably. The problem, as now in the venomously debated case of former president Joe Biden, is how to measure mental deterioration. When do you take away an individual’s right to serve? When […]

How Technology Built the British Empire

How Technology Built the British Empire

Llewellyn King

As someone who grew up in the last days of the British Empire, I am often asked how it was that so few people controlled so much of the world for so long? The simple answer is technology underpinned the British Empire, from its tentative beginnings in the 17th century to its global dominance in […]

Make Public Broadcasting Great Again by Shaking It Up

Make Public Broadcasting Great Again by Shaking It Up

Llewellyn King

The animus that has led President Trump to order an end to federal funding of PBS and NPR isn’t new. Public broadcasting has been an irritant to conservatives for a long time. Conservatives say public broadcasters are biased against them, especially PBS; they are a kind of ground zero for all things “woke”; and they […]

Copyright © 2025 · White House Chronicle Theme on Genesis Framework · WordPress · Log in