Discussion: Continued

The railroads want to see coal plants developed, but they object to mine mouth generation as a way to avoid the rail transportation of the coal.

The environmentalists simply object because of the environmental aspect of the coal fired energy production.

The way these groups object to coal and nuclear development is by objecting to major improvements in the Transmission System across the U.S. If a major “Direct Current” transmission system was developed it would allow large blocks of electricity to be moved from coast to coast with reasonable line losses. This would improve the overall efficiency of the electricity system, but it would also provide an “Interstate Electricity Highway” that would allow coal producing areas to cost effectively construct new major facilities and would avoid the NIMBY areas of the U.S.

What the environmentalists appear unwilling to recognize is that the development of a national “Interstate Electricity Highway” would also provide for the expansion of the Wind, Solar, Geothermal and Hydro-Electric industries.

Geothermal, as an example is generally located only in the western U.S. If a major transmission system was developed, all areas of the U.S. would benefit from the development of geothermal energy, thereby reducing some of the need for fossil generation.

Wind energy suffers from a lack of reliability. This factor could largely be eliminated through the construction of a major transmission system since wind project location diversity would provide an average amount of wind generated energy at all times.

Solar Thermal generation would also benefit from this same phenomenon.

If the environmental community was willing to recognize these factors they might re-think their opposition to a major interstate transmission system. Railroads and local IOUs will not be satisfied by this logic but the rate paying public would enjoy the benefits of reasonably priced electricity across the nation.

The development of wind, solar, geothermal and hydro-electric electricity would significantly reduce the need for natural gas generation. The development of mine mouth coal or nuclear electricity would reduce the need for natural gas base load generation.

The results of these changes in the electricity supply industry would reduce natural gas demand to a level that might re-balance the supply and demand equation for natural gas without the construction of LNG terminals.

In addition to the elimination of the need for LNG ports, the construction of a major transmission system would create many thousands of U.S. jobs and would reduce the overall cost of electricity to both individuals and companies.

3. Outsourcing energy jobs:

It is simple to conclude that purchasing oil from the middle east is not outsourcing, but that over simplification can be argued. Oil is simply a form of energy that can be displaced by other energy sources. Specifically, ethanol and bio-diesel are direct substitutes for imported oil.

Therefore, any oil that is imported that could be provided through the production of either ethanol or bio-diesel is a form of outsourcing of potential U.S. jobs.

It is estimated that the U.S. could annually produce more than 10 billion gallons of ethanol and as much as 5 billion gallons of bio-diesel. This production would create jobs across the U.S. that would displace negative balance of trade monies that are being sent off-shore.

Since these figures represent less than 10% of the gasoline and diesel fuel being currently consumed they are not significant to oil industry profitability. On the other hand, this energy capacity reduces the need for expanding U.S. refinery capacity and for importing additional fuel as demand continues to grow.

The question also should be answered concerning actually reducing demand for gasoline and diesel fuel. The major consumers of gasoline are the nation’s automobiles. The production of Hybrid vehicles by U.S. manufacturers would, over time, either reduce or keep the gasoline consumption constant. U.S. manufacturers of automobiles have been slow to move into the manufacture of Hybrid automobiles and trucks, but with gasoline prices at all time high levels, it is possible that they may finally get started.

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