Wednesday, November 10, 2004

READER RESPONSE -- Sen. Coleman on ANWR drilling

Posted by Craig Westover | 3:04 PM |  

Reader Mark Wernimont sent me a reply he received from Sen. Norm Coleman in response to his request for the Senator’s position on drilling in the Alaska National Wildlife Refuge (ANWR).

In his e-mail, Coleman is pretty straightforward about his support for an amendment to 2004 Budget Resolution that “prevented consideration of oil exploration in ANWR as part of the budget process.” He couches that opposition by describing the ANWR debate as “a detour from the road we ought to be traveling if we want to maximize environmental protection, energy independence, and economic development dividends.” He throws his support to “renewable energy, including ethanol, biodiesel, wind, and even livestock waste.”

Cato Institute’s director of natural resource studies , Jerry Taylor, thinks Sen. Coleman’s support for ethanol subsidies in lieu of additional oil production is “dubious.” In his response to Mark, Coleman leaves out any mention of a real and ongoing debate over whether it takes more energy to produce ethanol than is yielded by ethanol when it is used, and an argument about whether ethanol is a “net consumer” or a “net saver” of petroleum.

In short, Sen. Coleman is playing the “seen” versus the “unseen” game identified by Frederic Bastiat in the 1800‘s -- one of the good things to come out of France. Sen. Coleman shows us the observable (seen) benefits of renewable energy, but ignores the unseen antecedents and consequences of those “benefits.”

What are the benefits of Sen. Coleman’s proposal? He wrote to Mark --

“ Our legislation would displace more than 1.6 billion barrels of oil . . .reduce the nation’s trade deficit by more than $34 billion, increase our gross domestic product by $156 billion, create more than 214,000 new jobs, expand household income by an additional $51.7 billion, and increase net farm income by $6 billion annually. With fourteen ethanol plants already having more than half a billion dollars in positive economic impact on Minnesota, imagine the impact on our State alone under this legislation.”
Wow! That should get one’s nibblets shaking. Unfortunately, while doing the math, Coleman ignored the science that ought to, but doesn’t support it.

Energy analysts talk about a fuel’s “net energy value” (NEV). It is derived by subtracting all of the energy consumed in the process of producing a fuel from the energy available after it has been produced. Taylor defines the case relative to ethanol production --

In the ethanol debate, one estimates the amount of energy available in one galleon of ethanol and then subtracts from it the energy required to plant, fertilize, harvest, transport, distill, ferment and process the corn required to produce that gallon of ethanol. We can then add in energy credits for certain marketable by products of ethanol production (e.g. animal feed). If the resulting value is positive, then ethanol is a net energy producer; if it is negative, then it is a net energy consumer.”
Determining the values for the inputs into ethanol production is difficult, but not impossible and not unnecessary to the formulation of sound energy policy. Taylor is involved in such a study at present, and while the study is incomplete, he writes me that --

“It is already clear to me that the NEV for ethanol is almost certainly negative and that it probably requires more oil to produce ethanol than is required to produce gasoline. Even if I am wrong about the latter, the amount of oil saved by ethanol is very small indeed.”
The reality of the “benefits” of ethanol production proclaimed by Sen. Coleman is that for the unseen additional cost of ethanol production, society receives roughly the same amount of useable energy that we get today, without reducing dependence on foreign oil or significantly reducing environmental dynamics. All the senator’s legislation accomplishes is transferring prosperity from one part of the economy to another -- from around the country to (surprise!) Minnesota. Overall, spending more and getting the same is net loss to the country’s economy.

Just a word about the Senator’s wind and livestock waste initiatives, which he claims contribute to reduced dependence on foreign oil. This is a more “dubious” proposition than his ethanol legislation.

Only 2 percent of America’s oil consumption goes to electricity generation -- most oil goes to transportation or is used in the production of various chemicals, plastics, and lubricants. Renewable energy is primarily dedicated to electricity production. Even were this market to grow, that growth would have very little impact on oil usage.

In addition, producing electricity from renewable sources is far more expensive than from natural gas or coal. The cheapest form of renewable energy today is biomass. Unfortunately, a comprehensive review of existing scientific literature finds that the environmental impact of biomass fuels is that they impose more environmental damage for every kilowatt of energy produced than nuclear power, about the same as natural gas-fired electricity, and only slightly less than caused by coal-fired electricity.

In other words, as Taylor notes, forcing the biomass issue does neither the economy nor the environment any good.

In his e-mail to Mark, Sen. Coleman notes that “renewable fuels offer a lot of promise -- a promise I want to help become a reality.” Therein lies the real problem. Coleman is after career advancement and a legacy, and no one ever achieved either by saying “no.” Good science -- hell, good governance -- demands that the senator respond to his constituents with both sides of the issue and what convinced him to choose one over the other. In this case, Sen. Coleman failed.