Fuel Freedom: Ending oil addiction

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Transcript of Fuel Freedom: Ending oil addiction

  • 1. Fuel Freedom Foundation, September 2011

2. Money and Power:How much is too much? What? Thats it?$7TWorld Gold 3. Money and Power:How much is too much? Yes, it is only 7 trillion dollars. You should have asked for all the money in all the banks in the world. .$7TWorld Gold 4. Money and Power:How much is too much?Yes, it is only 7 trilliondollars. You should haveasked for all the money inall the banks in the world..$14T$7TWorld Gold All Bank Deposits 5. Money and Power:How much is too much? That still does not seem like much. How about owning the shares of all the public companies?$14T$7TWorld Gold All Bank Deposits 6. Money and Power:How much is too much? That still does not seem like much. How about owning the shares of all the public companies? $58T$14T$7TWorld Gold All Bank Global Market Cap Depositsof Listed Co. 7. Money and Power:How much is too much?You know whats funny?If you really want to ownsomething, you shouldhave chosen to be theowner of all the debtfrom every governmentin the world. (Although Iam not sure what itwould really be worth) $58T$14T$7TWorld Gold All Bank Global Market Cap Depositsof Listed Co. 8. Money and Power:How much is too much?$102T $58T$14T$7TWorld Gold All Bank Global Market Cap World Gov. Depositsof Listed Co.Debt 9. Money and Power:How much is too much?Genie, Is that the mostanyone can own?$102T$58T$14T$7TWorld Gold All Bank Global Market Cap World Gov. Depositsof Listed Co.Debt 10. Money and Power:How much is too much? Not even close. There is one thing that is worthmore than all the financial$102T instruments in the world. WORLD OIL RESERVES! $58T$14T$7TWorld Gold All Bank Global Market Cap World Gov. Depositsof Listed Co.Debt 11. Money and Power:How much is too much? $102T $132,000,000,000,000$102T $58T$14T$7TWorld Gold All Bank Global Market Cap World Gov. World Oil Depositsof Listed Co.Debt Reserves 12. Money and Power:How much is too much? $102TOh My... $132,000,000,000,000$102T $58T$14T$7TWorld Gold All Bank Global Market Cap World Gov. World Oil Depositsof Listed Co.Debt Reserves 13. Petroleum has a monopoly on transportation fuel Transportation is the driver of world commerce World commerce is the driver of the globaleconomy Conclusion: Petroleum has a monopoly on theglobal economy When you have a monopoly on the globaleconomy you can name your price! 14. Everything you need to knowabout US energy use at a glance 15. US Energy Flow Cost, Sources and Use, 2010Supply Sources Demand SectorsDomestic Petroleum Transportation is ourCost: ~$200Bmost fuel intensivesector with 52% of the cost TransportationCost Cost: $370B52%Imported Petroleum Cost Cost: ~$300B70%Biofuels Cost:~$5BIndustrial23% Cost: $165BNatural Gas 21%Cost: ~$150BResidential & Commercial11% $80BCoal: ~$30B4% Electric PowerRenewables & Nuclear14% 4%Cost: $101B~$30BData from the Dept. of Energy 16. US Energy Flow Cost, Sources and Use, 2010Supply Sources Oil is used mostly for Demand Sectors transportation. OnlyDomestic Petroleum1% is used to generateCost: ~$200Belectricity.94%Transportation CostCost: $370B72%52%Imported Petroleum Cost 3% Cost: ~$300B70%1%3%Biofuels Cost:~$5B Industrial 23%Cost: $165BNatural Gas 21%Cost: ~$150B Residential & Commercial1% 11%$80BCoal: ~$30B4%Electric PowerRenewables & Nuclear 14% 4% Cost: $101B~$30BData from the Dept. of Energy 17. US Energy Flow Cost, Sources and Use, 2010Supply SourcesDemand SectorsTransportation uses oilDomestic Petroleumalmost exclusively!Cost: ~$200B94%Transportation CostCost: $370B 72% 52%Imported Petroleum Cost 3% Cost: ~$300B70%1%3%Biofuels Cost:~$5B Industrial 23%Cost: $165BNatural Gas 21%Cost: ~$150B Residential & Commercial1% 11%$80BCoal: ~$30B4%Electric PowerRenewables & Nuclear 14% 4% Cost: $101B~$30BData from the Dept. of Energy 18. US Energy Flow Cost, Sources and Use, 2010Supply SourcesDemand SectorsDomestic PetroleumCost: ~$200B94%Transportation CostCost: $370B72%52%Imported Petroleum Cost 3% Cost: ~$300B70%1%3% Coal, nuclear andrenewables, a mereBiofuels 8% of our national fuel Cost:~$5B budget, generate 81%Industrial 23%of our electricity. Cost: $165BNatural Gas 21%Cost: ~$150B Residential & Commercial1% 11%$80B48%Coal: ~$30B4%Electric PowerRenewables & Nuclear33%14% 4% Cost: $101B~$30BData from the Dept. of Energy 19. US Energy Flow Cost, Sources and Use, 2010Supply SourcesDemand SectorsDomestic PetroleumCost: ~$200B94%TransportationIn other words, our energy CostCost: $370B 72% 52%Imported Petroleum Cost problem is3% Cost: ~$300B70%petroleum-for-transportation,1% 3%NOT coal-for-electricityBiofuels Cost:~$5B Industrial 23%Cost: $165BNatural Gas 21%Cost: ~$150B Residential & Commercial1% 11%$80B48%Coal: ~$30B4%Electric PowerRenewables & Nuclear33%14% 4% Cost: $101B~$30BData from the Dept. of Energy 20. On the red corner we have the Drill BabyDrill and nuclear energy On the blue corner we have the globalwarming with solar and wind Who is right? 21. New mass urbanization in China is driving oildemand at a breakneck pace But new oil is harder to find, takes longer todevelop and requires a lot more capital Even with the current record level of domesticdrilling oil is still too expensive 22. Not really There may be a 1,000 years of oil supplyat $1,000 a barrel The question is how much oil is thereat $50 a barrel ? $50 a barrel is equal to gasoline at $2.50 pergallon and to the current cost of gasolinealternatives 23. PETROLEUMCOAL Use: transportation Use: electricity Direct cost: ~$500 billion Direct cost: ~$30 billion Greenhouse: #1 emitter Greenhouse : #2 emitter Urban pollution: #1 Urban pollution: >#2 Substitutions: cheap Substitutions: expensive Production: 60% import Production: 0% import Supply risk: high Supply risk: very low Out of control pricing: This decadeIn 200 years 24. Nuclear power generates clean electricityIt is a replacement for coal, not for oil Solar power generates clean electricityIt is a replacement for coal, not for oil Wind power generates clean electricityIt is a replacement for coal, not for oil 25. If the red corner doesnt get itand the blue corner doesnt get it What do we do?We need to break oils monopoly on transportation 26. Natural GasMethanol EthanolBiomass ElectricityAlgaeAlgae 27. All are domestically produced All generate American jobs All emit less greenhouse gases And all are less expensive than gasolineSo how come the price signal fails to change themarket?Remember oils monopoly on transportation?Turns out there is more than one monopoly 28. Gas StationsPetroleum ExclusiveOnly CarsRelationship with Big Oil EmissionsRegulations 29. Open the CarFuel Supply to Other Competition FuelsSimplify EmissionsRegulations 30. Require new cars to be GEM(Gasoline, Ethanol, Methanol) flexible fuelknown as Open Fuel Standard Continue the support structure for earlyadopters of plug-in hybrids and electric cars Encourage fleets and long distance haulers toconvert to Compressed Natural Gas ormethanol Remove regulatory barriers for increased fuelefficiency 31. Require oil companies to buy all types ofAmerican fuels, rather than paying them toadd ethanol Use legal action to break the fuel supplycollusion Phase out tariff on imported ethanol Remove regulatory barriers for a nationalmethanol industry (from natural gas) 32. Update EPA regulations and vehicle warrantyrules to allow Use of various fuel combinations and CNG Use of aftermarket conversion kits Use of locally produced fuels Use of aftermarket fuel efficiency accessories 33. What about electric cars? 34. Electric cars are the long-term solution Battery production ramp-up time can be aslong as 20 years What is the chance of major oil shocks withinthe next 20 years? We need interim solutions in the form ofalternative liquid fuels 35. Dont we run into the issue of food vs. fuel? 36. From 2005 to the middle900of 2008 it seemed that350800there was a correlation 300700between ethanolproduction and corn price250600500200400150300 100200 5010000Monthly ethanol production (1k bbls) (left axis)Crude Oil (petroleum) - Monthly PriceMaize (corn) - Monthly Price per ton 37. All the while ethanol production continued900350 to increase800 300700 250600500200400150300 100200 5010000Monthly ethanol production (1k bbls) (left axis)Crude Oil (petroleum) - Monthly PriceMaize (corn) - Monthly Price per ton 38. However, thiscorrelation was amirage - once oil price900collapsed so did the350800 price of corn 300700 250600500200400150300 100200 5010000Monthly ethanol production (1k bbls) (left axis)Crude Oil (petroleum) - Monthly PriceMaize (corn) - Monthly Price per ton 39. 900350800 A recent World Bank study 300700showed that energy cost is 250600 the largest variable infarming, therefore the price 200500of food tends to fluctuate400 with the price of oil150300 100200 5010000Monthly ethanol production (1k bbls) (left axis)Crude Oil (petroleum) - Monthly PriceMaize (corn) - Monthly Price per ton 40. We are not advocating for ethanol or methanol We are not advocating for electric cars We are not advocating for CNG We know we need reliable domestic oil productionBut More than anything, we need to open the fuelmarket to competition Competition will free the American innovativespirit to find better, cheaper, less pollutingsolutions 41. Doing nothing could: Bring $200 oil and the specter of the Greater Depression Trigger a global resource warfare Reducing our oil burden by half while switching toAmerican fuels would: Save the US consumers over $4 trillion a decade Increase US global competitiveness Increase GDP growth by an extra 1% a year Free 15%-30% of the US defense budget 42. I pledge that my next car will be a Fuel Freedom Car capable of running on something other than petroleumFuelFreedom.org