The False Promise of Green Energy (Prof. Andrew Morriss - Acton Institute)

all right I hope everybody can hear me okay good all right well I want to do uh two things uh today in the time we've got and the first is I want to kind of give you some broad context about energy issues because much of the debate we have in this country about energy policy is occurring without reference to facts and so it's important to first look at some of the facts and then I want to uh take some of those facts and talk about uh some of the claims that have been made about green energy in particular all right so uh I first want to give you a a flavor I probably don't need to but I want to give you a flavor of some of the religious uh debates on this and this is a quote from uh The ecumenical patriarch Bartholomew the of Constantinople I'm an Orthodox Christian so I thought I'd pick on my own church uh rather than somebody else's and this is his uh a recent statement of his about energy he says our creator granted us the gifts of sun wind water and ocean all of which may safely and sufficiently provide energy ecologically friendly Science and Tech Technologies discovered Ways and Means of producing sustainable forms of energy for our ecosystem therefore we ask why do we persist in adopting such dangerous sources of energy by which he means oil and coal and nuclear and natural gas and things like that now um since I co-wrote this book called The False promise of green energy you probably already know that the ecumenical patriarch and I don't see eye to eye uh on this and I think he's asking the wrong questions here and I'll just tell you a a a brief uh anecdote that I think really illustrates uh a difference in approach uh so he wants to be known as the green patriarch he's embraced this uh label uh long time ago I was a lawyer uh in rural West Texas and I was driving across West Texas and I got a uh I could only get one radio station and it was a a radio preacher and he was telling a story about faith healing it was really an interesting story and he said you know I have this colleague uh and he and I were talking and he was telling me how one one day as he was preparing to give a very big sermon uh he had a terrible headache and uh he and his wife got down their knees and prayed to God to lift this headache from him so that he could deliver this important sermon and I said to him you arrogant person God Gave You aspirin why do you need a personal Miracle uh to do this uh God gave us energy uh and he gave it to us to use uh he didn't give it to us uh to admire in the ground right he gives a lot of things to but I think that he gave us resources to put to use and I want to that's the the framework from which I'm coming from I don't think uh we need to ask for a miracle that solar power becomes economically feasible I hope someday it does but for now he's given us resources that are cheap and clean and easy to use now the second point this is a quote from Richard Darman and I promise I won't show you too many wordy quotes but Richard Darman who is director of om under the first President Bush and uh Republicans always get beaten up for being anti-environment and Darman said uh we are all environmentalists the president is environmentalist Republicans and Democrats are environmentalists Jane Fonda and the National Association of Manufacturers Magic Johnson Danny DeVito Candace Bergen The Golden Girls bugs money and the cast of tears are all environmentalists and what he meant by that there's there's some truth to this what he meant is there is Broad agreement in American society indeed in the world that the environment is a good thing we all live in it we like beautiful things we don't like pollution it's it's there's no Pro pollution party there's no one out there advocating destruction of the environment right it's not uh the guy with the The Thin Mustache and the black hat uh villain type thing right so our debates are about tradeoffs our debates about whether or not we want to do a little more of this or a little more of that we are debating a very fine points in terms of how to clean up the environment what's better there are no easy answers to any of these questions uh wind power chops up birds and it spoils the landscape uh as Ted Kennedy would have told you since he fought vigorously to prevent wind power within sight of his home right wind power makes a noise that drives neighbors crazy as the people who have passed zoning ordinances to zone out wind farms in their neighborhoods will tell you um so there are trade-offs right wind power is not obviously a a pure uh environmentally good thing now natural gas has trade-offs right the all these things have trade-offs so we're talking about which of the harms that will happen are the smallest harms and which of the benefits are the largest benefits we're not debating between the evil guy who wants to destroy the environment uh and and and that so the these protesters who get out there and you know they're they're demanding green jobs and no coal and climate Justice and so forth uh have a very narrow one-sided view of the issues and what we need to respond to that with is context and and look at the facts and look at the tradeoffs that we're making and debate those tradeoffs so let me give you an illustration of those tradeoffs I'm an economist I love graphs all right so uh you know those of you having sort of flashbacks to college and and and looking for the exit we've locked the doors in the outside um th this is a graph of emission standards for volatile organic compounds from vehicles from cars and trucks right and so this is 196 5 when the first standards were put in and this is 2010 you'll see that this line is essentially approaching zero and that you could draw the same graph for every one of the major pollutants that EPA regulates in every case we cannot make the internal combustion engine any cleaner we have gotten we are ASM totically approaching zero for those of you want to use big words right we're getting you can't make a car cleaner except by making it higher mileage right and there are trade-offs in making cars higher mileage they have to be lighter which means they're not as safe which means that our children riding in the back seat are more likely to be squashed by a truck things like that so we have to tra make these tradeoffs we have made cars and trucks as about as clean as they can get um and that is uh we are now debating very tiny improvements when we we fiddle with it in 1965 we were talking about pretty big improvements we already did all those we did all the cheap ones actually if we wanted to clean the air up the best thing we could do would be to buy up old cars in Mexico and set subsidize their purchase of new ones because our old cars end up in developing countries where people value transportation and and and are willing to accept the dirtier cars just as we were when we weren't as Rich uh so uh the the most if we there's these cars are still running around the third world and we sent them some cleaner ones they'd be happy to drive them as long as we paid for them but what we do instead is we debate can we get even closer to zero there so that's that's one thing it's all about tradeoffs the other context that is really really important that the left never talks about and I think that we have to talk about and that we don't talk about enough is my favorite graph and I see a few people here from last night uh uh from the Tea Party group so they're going to have to look at this graph again because I show this to everybody this is the best graph ever I didn't make it uh another Economist did so we're starting at 1,000 BC going up to now and this line here is the per capita income uh of the world's population all right and it's set at one is the standard of living in 1800 and the point is that from 1,00 BC to 1800 it doesn't change much from a th000 BC from the earliest dates we have records to 1800 everybody in the world lived awful lives they were all poor you could be a king you might be a little above the line you could be a peasant you're a little bu one everybody lived at a at a very sustainable level because it was just enough food that you replace the population right so if the population got a little bit bigger people had to die off or you had to eat less and eventually when you start eating less you die off so we all stayed pretty much there around 1800 in Britain and the Netherlands first and gradually elsewhere something amazing happened which we call the Industrial Revolution and for the developed world we went up like this to the point where today we have 16 times the material well-being in the industrialized world that everybody in the world had in 1800 right that's that's really amazing that's a huge number this little line here is the rest of the world that didn't industrialize it's subsaharan Africa and Asia they they kind of went down a little bit but they're still around the 1800 level right so there's so a billion people in the world are still living down here there's a great book The Bottom billion that talks about them the rest of us went up here now these people would also like to go up here and turns out doing stuff like giving them private property rights and stuff helps with that um but that change right one of the consequences of that change one of the things that made this possible was the use of energy uh so it's it's using energy that has given us the lifestyle we have and I'm not just talking about driving your car there's energy embedded in everything you have if you take medicines energy is em embedded in Pharmaceuticals if you uh you know the clothing you wear energy is embedded in those things about half the cost of pharmaceuticals comes from the energy cost of making them just as one example there's a wonderful report from the American Enterprise Institute that we summarize in the book that talks about that and just to dramatically show that a couple things this is the human development index on this act you want to be higher so here's the United States up here we're up high on the human development index so uh the better uh all me measures of well-being nutrition lifespan Medical Care things like that higher that way this is per capita energy use right the green countries which are the industrialized countries the US Canada Japan Netherlands UK and so forth we have high human development uh Industries and we also use a lot of energy poor countries have low energy use and they also have low human development indexes now that it's correlation not causation but I think that it's not too much of a stretch to say there's a connection between having the availability of energy and having lives that are that are uh not uh horrific right I mean nobody wants to live in Congo they don't have an illegal immigration problem right people aren't going there so so down here where there's low energy use per capita there's also low quality of life so this is this is just electricity you could do this for all forms of energy the point is right that we as as we use energy people's lives get better and when we talk about our social Mission as a church we usually talk about trying to improve the lives of people in places like this and making energy more expensive does not improve their lives it condemns them to stay in that place right so the goal should be to sort of help these people into into that just as one example uh the largest source of air pollution in the world today anybody know what that is no no no not the country the largest thing that makes pollution bur power not cold burning power plants manure burning biomass in homes uh that that causes indoor air pollution that affects predominantly women and children because they're the ones in the home the men are smart they get out and go to work in the fields away from the air pollution indoor air pollution is the biggest air pollution problem we face in the world it affects primarily women and children developing countries if you replaced those stoves in their homes stoves that we're talking about Open Fire basically with a stove an electric stove a gas stove whatever that would improve air quality that would improve the quality of life that would improve the lives of the poor if we care about the poor we should want to do that and we've got some examples in the book of technologies that do that very in expensive Technologies right we don't have to build a giant power plant and pipe power to their house we can get them uh sort of biog gas digestors in their in their um Villages and and produce things but we can also get them uh natural gas fir power plants we got lots of natural gas around the world there's a lot we can do to make these people's lives better most of it involves energy just to bring it home to here this is a map of of the travel times from New York City in 1860 so each line is a day so one day I think we're about on this line there's either two or three days to get from New York City to here in 1860 but Michigan's got three I mean it's hard to get up into Upper Michigan in 1860 it takes a long time right I got here in a day less than a day I was on a plane I was comfortable I had food not too much food but at least I had some nuts and something to drink uh which was much better than riding in a covered wagon across here in 1860 right it is possible right and that has improved our lives that improves our lives in many ways we can go visit family we can visit friends friends we can be tourists we can do all sorts of things because energy has made Transportation uh cheaper and just the last one this is the uh number of hours it takes to get light uh so uh you know back uh in 8,000 uh BC uh it took uh you know sort of almost a 100 hours of work to get any get an hour's worth of light uh so that was you know you had to really work hard right to go gather the wood and like that by now uh it takes almost uh almost no time for you to get light right you flick on the switch and your electric bill you have to work a few minutes to pay for an hour's worth of light today so we've made possible for people to have light well what does that mean that means you can read at night right you can you can read now hopefully you're reading the Bible but maybe you're reading you know whatever it is you're reading um you can surf the Internet we we've improved our lives in so many ways that we take for granted and most of those ways are tied to energy all right so energy is important that that was probably an easy thing to convince you of since you came to this talk um this is a messy graph but it's a good one it's from the Energy Information Administration I urge you to look at their web page they have a terrific web page especially the kids uh for school reports who can who can quarrel with government statistics all right so uh I'm going to I'm just going to point out the major features here that even people in the back can see but uh we've got an earlier version of this is in the book and you can get it off their website all right here are sources of energy so petroleum natural gas coal renew including Hydro right which actually environmentalists don't like a large Hydro we we're reducing our hydroelectric capacity in this country uh and nuclear right so the size of the block gives you a sense of how much that contributes to total energy we get about 37% of our energy from petroleum about 25% from natural gas 21% from coal eight from renewable and about nine from uh nuclear over here is what we might do with it so we have transportation uh Industrial residential commercial and electric power so electric power uses up about 40% of our energy these lines that connect it you can see this in the book and and I'll just of describe a couple of this line here from nuclear power goes to electric power and is a 100 by that means 100% of our nuclear power goes to generate electricity which is common sense we don't have small nuclear power plants that's what's going 21% of our electric power comes from Nuclear So if you turned off all the nuclear plants in the country tomorrow we'd be missing 20% of our electric that's a big chunk uh renewable energy about 50% goes into electric power that's Hydro for the most part and then we have about 14% goes into Transportation fuels that's things like ethanol and biodiesel only 4% though of our transportation fuels are Renewables right 4% so you hear a lot about the rapid growth in Renewables well you can grow a lot from 4% and still not get anywhere right so it's you give your kid a penny and when they they've saved up a quarter they've grown a lot right they've grown 25 times they still don't have enough money to buy anything um so uh 94% of our transportation fuels are from petroleum so we will be using petroleum for a long time for that and we need to recognize that fact and deal with it not uh come up with fantasies about uh other kinds of energy and then just the same way this is from the International Energy administ agency right so it was even better than the US government would be an international agency so this clearly could be in a school report um this is from 1980 to 2020 so projections this is uh fossil fuels uh uh in the black and this green bit is non-fossil sources so all energy use fossil you see virtually all of our energy is fossil fuels and there's a sort of slowly growing band of non-fossil all right so let's break down the nonfossil non fossil turns out to be almost entirely nuclear hydro and biomass I burning wood and things like that right so again we're projecting some growth and this is the wind and solar now break that down and here's what wind and solar looks like and we're about here right uh getting ready for this big takeoff and and so in the future it's going to grow really fast it's not growing really fast now it's gonna but pretty soon it's going to grow really fast right and when it does gr really fast it gets really big so if you just look at this one you say wow it's getting really big that's a tiny piece that's this little teeny piece of this little tetiny piece right it's just not going to be making a substantial contribution to world energy needs right and if we pin our hopes on this we are uh engaged in fantasy and reality is that the cheap clean energy sources we have now are natural gas based if you add into that coal nuclear and um petroleum which each have side each have uh downsides to them right nothing's perfect if you add those in that's virtually all of our energy needs uh going forward so there may be some contribution and it's quite possible that someone is going to invent some incredible new technology at some point I have great faith in human Ingenuity I'm also virtually certain that person doesn't work for the federal government right somebody somebody's going to invent something that's how we got these forms of energy people invented stuff uh and they're going to do it uh the uh the last uh big fact I want to give you concerns uh just world energy demand and again I apologize for those who were here last night because I like this graph so much I show it to everybody 1900 to 2000 this line is the number of cars per uh 10 thousand people in the United States and uh by about now we're a little more than 800 cars per thousand people right so uh in the US today there are about 800 cars per thousand people all right so that's that's sort of a benchmark the various dots are other places in the world at different times so for example Western Europe in 2005 has about 600 cars per thousand people right now that's and so they're about we can read down they're about where the United States was in 1970 now the reason Western Europe has fewer cars uh per person than we do is uh twofold one Europe is smaller and there's not a lot of parking right it's crowded old cities and so the advantages of a car are are lower they have robust uh public transportation systems because they're high it's very dense uh and so the benefits of not having a car are higher using the car is expensive because Europeans tax gasoline at a much higher rate than we do and so when you see higher gas prices in Europe it's not because oil costs more there it's because the governments tax it at a much higher rate so it's more expensive to operate a car so fewer people have cars all right so Western Europe in 2005 is about 1970 levels for the United States all right so that that's a range uh of where they are they're about 600 uh cars per thousand uh this is China in 2005 they're about where we were in 1915 right so China is about where the United States is in 1915 now I think China looks a lot more like the United States and it does like Europe we have pictures of China is very crowded and so forth that's the coastal uh cities like Shanghai and places like Beijing most of China is big and spread out so there are vast areas of China where there's not going to be a bullet train there's going to be a car uh and every Chinese person I've met and I teach in China and I've met quite a few uh wants a car now uh they're they're very interested in having Better Lives shockingly it turns out Chinese people are just like American people they want better lives for themselves and their families and one element in a better life for most Chinese people is acquiring a car and they don't want uh uh they don't want a used American car they want a new car they want it to be nice they want to have air conditioning they want an MP3 player they've got iPhones it's very sophisticated Demand right so whatever they do they are not staying at 1915 levels of cars that's just not happening right China's growing fast we don't really know how fast they make up the numbers but it's really is growing fast right so uh let's say they get to Western Europe levels let's just just like Western Europe and I think that's implausible I think they're much more like us uh in terms of the the physical geography of the country and so it's much more plausible I think they're going to be more at American levels but let's just say they they go to Western Europe levels that would be going from 25 cars per thousand people to 500 cars per thousand people right that's an enormous increase now let's say they all buy hybrids also implausible because hybrids are expensive um and if you're going to spend extra money on a car in China right now you're buying a car that has more features not that simply costs more but let's say they they all buy hybrids um so that maybe the effective demand for fuel is half of what the 500 level is they're going to be using a lot of fuel and we haven't even talked about India yet or the rest of Asia which is all growing rapidly in which there are lots of people who would like to have cars uh so the rest of the world is catching up to us right Europe's probably not going to get a lot more cars but uh Asia is and so is Latin America and Africa if they if they get development too a development brings a desire for personal Mobility which is what a car is it's something that all human beings want and uh and seek to improve their lives and so there's going to be much more demand for energy in the future right even if they're driving hybrids which I don't think they're going to all right now I don't think there's anything particularly Christian about suggesting that foreigners forgo the benefits that we've enjoyed I don't think that's a a very Christian attitude to say well you know uh bad luck for you you develop late so you don't get to have this stuff um and I don't I don't think we want to do that if you think about energy demand these are some numbers from uh again an International Energy agency uh report over the next 25 years 90% of the projected growth in global energy demand is outside the oecd right the organization for economic cooperation development the developed world right so the rest of the world is going to be where the demand for energy is coming so in some sense it almost doesn't matter what do because we can tell the Chinese not to do stuff and they just don't listen um uh the global passenger car Fleet is going to double uh reaching almost 1.7 billion cars by 2035 right all those almost all those cars are going to appear somewhere else right even if we all had a car each we'd only be looking at a sort of 25% increase here uh the changes are coming and they're coming in the rest of the world and we're going to have to adapt to that uh and part of that is that the be thinking about energy markets AS Global markets that we are participating in all right now here's a couple more numbers this is the cost and again it's from a government study uh looking at the cost a system levelized cost so taking all the costs that you spend in building the power plant so forth uh to generate uh electricity from a variety of things and I've arranged them from cheapest to most expensive uh so uh to generate a megawatt uh it's in 2007 constant dollars natural gas about $84 right that's the cheapest the most expensive is solar photovoltaic at almost $400 that's a big difference right so we've got a whole bunch of things inance so coal and natural gas uh depending on which form you get and we've got there's even more information in the book about this which $84 to $104 per megawatt uh nuclear is about 107 uh geothermal about 111 and then we start getting a big bump wind 41 offshore wind 230 solar thermal that's where you uh are heating up the water directly about 260 four and solar photovoltaic about 400 so let's say these get much more efficient 10% that would be a signific increase in efficiency right they're still a lot more expensive than these other Technologies and these other Technologies get more more efficient too right they don't stand still so we can get improvements across across the board on this so there's uh a a a a pretty high cost to this technology right we're told that these things are great assuming they are great they're very expensive right now so I wanted to try to connect that to a religious theme uh the parable of talents I'm sure you all know that one that's the the one free market types like to trot out all the time right where Jesus tells the story of the master who gives the money to the various servants and the the bad servant is the one who buries the money in the ground and does nothing with it and he brings it back and the master says uh you know uh you're you're an evil and lazy slave uh you know and this this servant has said you know I was afraid of you I knew that you were very mean and so forth and so I just hit it because I was really afraid I'd lose it and he said uh you did that you should have deposited my money with the bankers and on my return I would receive my money back with interest and he cast them out to the outer Darkness all right so that's the bad one we're doing something worse in energy we are borrowing from our children to pay for these Technologies right not paying for it and I'm not going to pay for it because I we borrowed the money to do all this stuff from China and we'll be paying it back when my children are paying it back so my children and my grandchildren are funding this and the question I ask when I debate green green energy Advocates and I never get an answer I can never get them to answer this question is when do I have to stop paying tell me how much longer I have to pay we have been promised since the Carter Administration that in just a few more years with a few more billion we will have these marvelous techn ologies for you these magic technologies that produce energy out of sunlight and wind and there are no downsides there are downsides there's a lots of lots of bad stuff going on with the producing these things very environmentally damaging but the point is they never stop taking the money and they're now taking it from my children and I object to that it's one thing to rob me it's another thing to rob my children and my unborn grandchildren right my children aren't even married yet but there there's going to be grandchildren at some point we're clear on that we we've explained that to them and when the grandchildren get here I want them having to pay back money for cylindra for whistle for robots that whistle Disney tunes right think about this the cylindra factory was built in California the highest cost business environment in the United States a brand new Factory there are empty factories in Michigan and Illinois and Ohio that they could have bought for pennies on the dollar instead they built a brand new Factory in California and they put in robots that whistle Disney Tunes now I don't know what the Disney feature cost maybe it was a little bit I know that no entrepreneur would spend spend his own money on whistling Disney Tunes how many people have been to Disney how long did it take you to get it's a small world out of your head right we pay money to avoid Disney Tunes this is not right right this is not being a good Steward right this is cast often in in religious circles in terms of stewardship that is that being a good Steward to take our children's money and that's what we're doing we're taking our children's money and giving it to politically connected people that's what cindra was that's what off fisar is and so forth that's what the Chevy vault is right and economics can help here Thomas Woods who wrote a marvelous book called The Church in the market about sort of market economics and and Catholic thought he said you know I don't I'm an economist I can't talk about Theology and you you really were taking a chance inviting a law professor right who's normally analogized to the Pharisees in biblical stories to talk theology but you know we can help with the EC economics right we can help uh the church with the economics if they're having a little trouble with the economics we can sort of explain it the Chevy vault is an amazing engineering accomplishment it just costs too much let's not even talk about you know whether it's actually environmentally good right I mean you're you're fueling it up from a coal power power plant it's not clear that environmentally it's a great thing they forgot the law of supply and demand right when it's really expensive and these are expensive even with each of us kicking in 8,000 bucks uh uh on the the credit and each of us kicking in for the the development of it the law of supply demand it turns out the demand's just not there and you have to take that into account we we must take uh economic laws into account or we're being bad stewards another example of this um is uh the um biofuel mandate so um this is actual biofuel consumption the green part down here is corn-based ethanol this stuff up here in other colors are forms of ethanol that do not exist yet uh yet uh companies that sell fuel are required to use them uh indeed so if you if you saw this in the paper this year for the F the first mandate kicked in this year the fuels don't exist so they couldn't be sold so the the companies were fined right so oil companies are being fined for not selling non-existent fuel I'm a lawyer so that makes sense to me but for you yeah that's crazy right that that's just crazy uh uh now there is an answer to this right so uh economics is a dismal science I'm certainly a dismal person that's what my children say when I tell them they can't have something but uh there is there is an answer so let me just give you two uh positive stories and then uh we'll open it up for questions so positive story number one um uh refrigerators now that's kind of a weird choice but uh let me just tell you I love refrigerators I'm a a huge fan of refrigerator I grew up grew up I was a kid in the 60s I remember my mom defrosting the the refrigerator right so we had to take everything out put in an ice chest let the ice melt tempted to get a knife and pry it off if you did that you're in danger of puncturing the sides all sort of bad things happen it was messy nobody liked doing it you waited until the frost was really thick Nobody Does that anymore right the reason we don't do that anymore is our refrigerators are self-defrosting the children in the back are looking oh God here you know when I was young we walked uphill to school both ways so how how does it refrigerator defrost you ever think of that it heats up the walls it melts the frost so your freezer heats up and then it cools down again that uses energy right it's convenient it's great it's a fabulous thing my mother was so excited when she finally got a frost free refrigerator right and so that that kind of technology so energy use that's this line has been going up for refrigerators from uh after World War II uh to 1972 and those of you who are around then will remember why that happened I'll come to that in a minute so energy is getting more why is it getting more well the size is getting larger right from World War II on the size of refrigerators has been getting larger so they take more energy and they get features like be becoming frost free and making ice right we had to make ice and tray uh uh you know nobody does that anymore now it's you know the ice maker cold water comes out of it hot water comes out of it all sorts of stuff right the ice is crushed up for you all sorts of things right um all which take energy we've added all these features that take energy and things that were unimaginable in the 70s are commonplace right so now today I have a refrigerator that makes ice and delivers cold water and crushes the ice and stuff like that that wasn't you know only the maybe like Elvis Presley might have had that and probably his like had a guy who crushed the ice and dumped it through a thing nobody had this stuff then right so they've gotten better so they they got they got bigger and they're still getting bigger and they were using more energy to all us and then suddenly they started using less energy and the reason they started using less energy is energy got more expensive we had the Arab Oil Embargo price of energy went up and people said you know I love the big refrigerator I like the ice maker and stuff but I also want it to Cost Less to operate and people who saw people who make refrigerators saw I can sell more if I cut that here's the price the price is going down so the price of these things is falling they're getting bigger they have more features and they're becoming more efficient right and that happened without any government mandates this point is before any government rules about refrigerators right and the slope of the line doesn't change so for non Economist that says whatever the whatever the government in here didn't have an impact right it's it's going down at pretty much the same rate you can label stuff there's actually wonderful stuff by a guy named indor Golani showing that air pollution uh that this sort of line exists for all kinds of air pollution and this point is always before the government the national government did anything it's basically when you point out to people there's a problem uh they do something about it uh turns out and the government comes in later and takes credit so that's a really great story right the marketplace delivered more efficient things that are better better better in every Dimension right every refrigerator today is better than a refrigerator 1970 so we should embrace change uh this is an early cell phone this is even preg Gordon gecko right Gordon gecko had the brick this thing is a brick with its attached brick so you had two bricks this was an an early IBM PC right that I lusted after that computer my first computer was a kpr 2 anybody have a kpr 2 all right 191k drives uh you know it was a it a metal suitcase it weighed 40 lbs it was portable uh I you know I I S of walk like this for years from hauling it around it was very exciting and one of my professors in graduate school had this uh and that was a a tremendous thing I I really wanted that but all I could for was a CPR T which cost $22,000 right I had to work hard to get that kpr 2 with a 300 bod modem you know so my phone does everything those things did and more right and this is much better and it cost me $200 right and $200 today instead of $22,000 in 1990 I it's you know it's like $1,000 in 1990 right so so this is tremendous progress right this applies to energy as well and so the last we have not fixed microphones so speakers can't wreck them um the last thing I want to tell you about is is is is about improving gasoline all right so uh this is a a Spitfire from World War II that's an oil refinery from World War II and and this is this is an amazing story that I think uh is definitely undertall you have to really dig into World War II history books and oil industry history books which are kind of a weird thing to read together uh to find this story out so uh oil uh gasoline was originally uh a waste product right so John D Rockefeller monopolized oil refineries to make kerosene which was the the number one product that was being made out of oil which was used for lighting in homes and uh fuel for stoves and things like that and kerosene is a very light component of oil so when you take a barrel of oil right you you s divide it up into fractions and there's the heavy hydrocarbons that you have to break up and there's the light ones which are easy to burn so kerosene's a very light one and that's what he was making and gasoline people threw it away uh and so I you actually go back and look at pictures of early refineries and they just dumped the gasoline into a a stream so it was a it was a pollutant and they threw it away Rockefeller actually bought a company that made gasoline stoves uh to try to create a market for this now gasoline is is kind of explosive and so it's not a good cook fuel that investment did not pan out right fortunately Henry Ford comes along and gets the automobile industry going and there's demand for gasoline so by 1910 we're actually short of gasoline so 1910 you would hear the same thing you hear today which is we're running out of gasoline we're running we don't have enough we were the largest oil producer in the world at that point we're running out of gasoline what are we going to do well some uh people say well you know if we could get more gasoline out of a barrel of oil that would be good so they they they applied some technology to it and lo and behold they get a little more out of it and there was also a quality issue so gasoline varied highly between relatively low Octane and higher octane higher octane more energy content your engine doesn't knock this is probably a theoretical problem to anyone under the age of 50 but it used to be that engines would sort of make this noise and it was it was seen as a bad thing and and and they were being less efficient so uh we had something called the octane wars in the 1920s and early 1930s uh companies were competing to deliver for higher quality gasoline uh and and they did standard oils in fact named Standard Oil because the notion was that their products were the same everywhere you went which is a radical idea right this is a McDonald's of gasoline and kerosene and and because quality VAR so highly all right so so we get this octane war going so in the in the mid-30s a new technology is invented called catalytic cracking which can be seen there so you take a catalyst and put it in with the oil and and you apply pressure and energy to it in the form of Heat and the molecules break apart right so you take the big heavy molecules and break them into smaller ones and if you apply enough energy to oil you can break up the molecules and recombine them as you see fit and this made more of the nice light fractions gasoline out of the barrel of oil so you're getting more gasoline per barrel uh this was introduced in 1936 at that time at the beginning of the 1930s 100 octane fuel was a reference chemical that you use to calibrate your equipment right and it cost $25 a gallon so you certainly weren't putting it in your car it's $25 in 1931 right so this hundreds and hundreds of dollars today um and in the mid-30s the uh Army airc was looking ahead and everybody could see that war was coming and they knew that airplanes were going to play a role and they so wanted to get some designs going for aircraft for uh the army aircore so they went to the oil companies and they said what's the best fuel you can make at a reasonable price uh because that that's going to affect the kind of engines we designed it's going to affect how much equipment we can put on the plane if you have a more powerful engine you can get more guns more bombs and so forth on the plane and uh the in particular uh Royal Gul shell a Royal Dutch Shell and um uh Standard Oil of New Jersey which had uh were Pioneers in this cataly cracking said well we got this new technology and we think it'll work pretty well you tell us how much you want to buy you guarantee you'll buy it we'll make the stuff uh and they said well we really like 100 octane aviation fuel uh and we we can't we don't want to pay very much for it so I said okay how about 25 cents a gallon yes we commit to buying you know a very large amount of this said you got a deal uh so uh from its commercial introduction in 1936 the first catalo cracker went online 1936 1940 they were producing 122,000 barrels a day of uh of 100 octane fuel by 1944 we're producing a million right uh and the reason I put a Spitfire up there was uh getting the 100 octane fuel to Britain uh during during the sort of really dark days after after France fell uh when as the Battle of Britain is being fought German Pilots actually wrote that they thought they were fighting new planes because the British planes and performance improved so much from the better fuel so they were able to climb faster they were able to carry heavier weaponry and when you read the sort of oil company World War II literature now of course they got an incentive to portray it this way but say you know in a sense the oil industry helped win the Battle of Britain right they wouldn't have been able to outfight the liftwo if they hadn't had this fuel that made the superior performance better now you needed really good Pilots you needed the bravery and all that kind of stuff but that Innovation which happened totally in the private sector save the world from the evils of of Nazism and uh that is I think an example of what we get the Innovation we get when we leave the energy industry alone or we give them performance targets and ask them to meet it but don't try to dictate the choice of technology and unfortunately largely what this administration's policy and actually going back long back Administration policies have been the history of US Energy policy is to make it be about uh helping special interests uh it's not about helping uh setting targets it's not about getting improvements it's not about leaving the market alone it's about dictating a particular technology a particular firm particular uh resource is going to receive uh not just our money but our children's money and I don't think that's a particularly Christian thing to do I don't think it's Christian to borrow from the future and saddle them with debt uh to develop to even if we were trying to develop good stuff right I mean we were trying to do do the right thing it wouldn't be appropriate to ask our children to pay for it um it's certainly not appropriate to ask them to pay for paying off uh the president's friends uh which is largely what energy policy has been under both both Republicans and democrats for a long time uh so I think it's time that we have an energy policy that focuses on reality that focuses on helping uh uh helping set uh clear goals that going to improve our lives and that does so without burdening our children thank [Applause] you

Channel: Acton Institute

Views: 730,545

Keywords: Acton Institute, Green Energy, Wind, Solar, Power, Solar Energy (Industry), Gas, Natural Gas, Coal, Oil, Andrew Morriss, Natural Gas (Industry), Coal Energy (Industry), Petroleum Energy (Industry)

Id: _YiM7Gf_snQ

Length: 42min 8sec (2528 seconds)

Published: Tue May 01 2012