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TECHNOLOGY BREAKDOWN: Embracing the N-Word, or Desperately Seeking Fusion
Without a doubt, the thing on everybody's mind these days is the rise in oil prices, or to be more specific, the price of one the many products produced from crude oil – gasoline. With the average price of a gallon of gas at $3.00, that is no surprise. While Americans are focused primarily on the price of gasoline, what the public seems to be largely unaware of are the secondary effects of the recent spike in oil prices. Considering that nearly 80 percent of the food products sold in America are transported by truck, while people are moaning about the price of gasoline, not much lamentation is heard about the rising price of food. Beyond that, let us not forget that the petrochemicals (largely by products of the oil refining process) are primary ingredients in everything from pesticides to plastics, the price of oil has a more profound effect on the lives of people in industrialized nations than the pinch currently felt at the gas pump.
Therefore, the effect of sharp spikes in the price of oil, such as we are currently experiencing, have a more profound effect on the poor than any other members of society. Given that, the silence of those so-called “champions of the disadvantaged” (you know who I'm talking about) on the subject is deafening. Perhaps it is because adequately addressing the issue almost immediately goes beyond pointing fingers, and requires people from various circles to actually work together for the common good. Another reason for the silence might be because said leaders realize there is no effective leverage that consumers have to force oil companies to lower prices. Contrary to the “GAS WAR” email that people are circulating around the internet says, there is no way to effectively boycott the big oil companies. The infiltration of petrochemicals into everyday life makes it so. Let's assume people actually did stop buying gas for one day. Are they going to sit in the dark as well? Aside from transportation, a big part of the increasing demand for oil is diesel fuel for electrical power generation. We have already mentioned plastics, pesticides, and fertilizer as areas where the demand for petrochemicals is increasing, so unless you're going to stop eating, buying clothes (by the way, those $250 Jordans down at the Foot Locker and Champs are made entirely from materials derived from petrochemicals), growing food, or using anything made from plastics, any talk of boycotts is sheer folly.
In an effort to address the rising prices at the gas pump, the congressional Republicans and President Bush have proposed handing out vouchers for $100 to alleviate the pain of rising gas prices. At its current level, that $100 will barely buy ONE tank of gasoline, and in the case of those people whose cars demand premium unleaded, it won't even buy a single tankful of gas. So Bush & Co. want to buy everyone a tank of gas this week. What about next week and the week after that? Another point in Bush's plan is to suspend deliveries of oil to the strategic oil reserves throughout the summer to effectively put more oil on the open market in an attempt to drive prices lower by increasing the supply of available oil. Interestingly enough, six years ago, then Texas Governor George W. Bush criticized President Bill Clinton for doing the very same thing under the same circumstances, saying that such action “compromised national security”. Curious actions from a president who seems to tie everything to national security, wouldn't you say? Other parts of the Republican sponsored plan include repealing tax breaks given to oil companies, along with a 60 day suspension of the 18.4 cent tax on gasoline and 24.6 cent tax on diesel fuel charged to consumers.
Right now, according to Department of Energy statistics, Americans consume about 7.5 billion barrels of oil per year, and of that 60 percent of it is imported. Last summer, I wrote a column on the oil shortage and looked at the impact of the developing world's impact on the global oil supply as well as possible alternatives to oil that could be investigated. Today (May 2, 2006) Exxon-Mobil CEO Rex Tillerson said Tuesday there is little lawmakers can do to combat rising energy costs and urged consumers to reduce demand by using less. Tillerson also indicated that Exxon-Mobil was investing $20 billion over the next five years to develop new sources of energy. That sounds pretty impressive until you remember that Exxon made $8 billion in profits just from January to March alone. If you take into account the increasing global demand for oil, those profit numbers will not significantly drop over the next few years (partcularly given the political and military instability of the Middle East region). So extrapolating the profit numbers out, it is reasonable to expect that over the next fove years, Exxon-Mobil will have amassed in the neighborhood of $140 billion - $160 billion in profits. So over the next five years, according to the Exxon CEO, the oil giant is devoting about 20 percent of its profits towards the generation of new energy sources. While the company is likely spending a lot more money of getting the gooey stuff out of the ground, it is [mildly] encouraging that they are considering investment into other alternatives.
Speaking of alternatives, just what are the alternatives to the oil economy? Last summer (September 8, 2005) I wrote a column on the post Katrina oil shortage and the potential for renewable energy sources and their potential impact on emergent developing countries (think India and China) as well as poorer nations. One subject that I didn't broach in that article was the N-word: nuclear power. Over the past few years, considerable progress has been made on the design of what has come to be known as “ball bearing reactors”. However, the problem with conventional nukes is that the net return from fission reactors is rather small. This is because of the amount of energy it takes to create the fissionable material. Aside from the rather low net energy return from nuclear reactors, there is the ennvironmental impact problem. The other kind of nuclear reaction, fusion, is another alternative. Currently the International Experimental Thermonuclear Reaction (ITER) located in New Jersey has sustained energy output of approximately 410 megawatts.
One of the reasons that President Bush allowed India to become part of the “nuclear club” is ostensibly to create a scenario where the option of using nuclear power will provide India with the infrastructure it needs to sustain its growing industrial base, while at the same time reducing their [India's] growing appetite for oil. Indeed, if a relatively environmentally friendly design for Tokamak fusion reactors become real, embracing the N-word may not just be a thing for the developing world, but also for us in the States as well.
Russell de Pina is a Principal for n2active, a technology consulting firm located in Houston, TX and Long Beach, CA. Russell can be reached by email at rdepina@n2active.com
