Chevron and Its Claim of Energy Efficiency

First, two caveats.

1. Just about every oil company in the world, including Chevron, is under attack for one reason or another. Sometimes the attacks have legitimate reasons behind them and sometimes the attacks are rhetorical overkill. My post is more in the category of simple reality check.

2. Chevron doesn't have the aggressive anti-environmental record of Exxon and it doesn't have the aggressively hypocritical reputation of British Petroleum (BP) which for some years touted its environmental record while not being so green behind the scenes. Chevron isn't as bad as some oil companies but it's still an oil company. And oil companies need good public relations these days no matter who they are.

I noticed an ad the other day in Technology Review, February 2010. The ad is on page 2 and part of it reads:

At Chevron, we've focused on energy efficiency for decades. Since 1992, we've improved the energy efficiency of our own global operations by 28%. And with Chevron Energy Solutions we help other businesses and governments do the same—from Colorado where we're upgrading municipal buildings to reduce energy costs by 24% to 30%—to Pennsylvania where we're helping schools reduce their energy bills by more than a million dollars a year.

I don't argue the basic honesty of what's being said except to say that it's incomplete and therefore misleading. Energy efficiency is real as well as important if you're installing LEDs or weather-proofing buildings. But such things are not the only energy efficiency games in town.

The truth is that it's getting harder and harder to drill for oil. It takes more money, people, equipment and, yes, energy to create energy. That's efficiency going in the wrong direction.

Also, as oil companies find less and less light sweet crude, they have to turn to heavy oil which is clearly less efficient to refine. To turn heavy oil into gasoline requires high heat and high pressure, both of which take more energy.

Finally, most of what an oil company produces is used to provide fossil fuels for transportation. But cars based on diesel and gasoline are not as efficient as cars that use—or mostly use—electricity from power companies. Fueling a battery by plugging into the power grid is far more efficient than fueling a car with gasoline.

Even when power grids get their energy from plants that burn fossil fuels, electric cars are still more efficient. In the long run, however, power plants are going to have to switch to sustainable forms of energy such as solar and wind.

The Chevron ad begin with the sentence: "Every dollar invested in energy efficiency today could return two dollars in energy savings." Again, energy efficiency of the kind Chevron is promoting happens to be important. But eighty years ago a dollar's worth of energy invested in an oil field produced a hundred dollars worth of energy.

Today, in Texas, some oil wells now use more energy than they produce. Why? Because arcane laws, subsidies and tax rules make it profitable. On the other hand, there are wind turbines that return 30-60 dollars of energy for every dollar of energy invested. Something needs to change.

Although there are plenty of oil wells in the world that return excellent net energy, the reality is that worldwide the net energy per barrel of oil drops yearly as more energy is required to produce that barrel. Oil is refined into many different products and we as consumers can't easily see how energy is used to make energy but let me offer a rough metaphor of sorts: for every 100 gallons of gasoline we put in our cars, we used to give the oil companies a gallon back to go out and find more oil, pump it, refine it and transport it to our gas tank. Now for every 100 gallons we put in our cars, we have to give back anywhere from 3 to 10 gallons depending on who's providing our oil (if you get your gas exclusively from those handful of inefficient Texas wells, you might as well get a horse!).

Oil companies are going to be in business for many years to come simply because it's going to take at least twenty years to build a truly efficient energy infrastructure that is sustainable and sensible, but the oil companies, Chevron included, are going to have to change.

Reenergizing the American Economy

Wealthy Republicans these days talk a lot about free enterprise and competition but don't particularly believe what they're saying. They don't want competition. They want a free hand in acquiring a sweetheart deal from the government. They don't particularly care which government it is: ours or maybe the Chinese. These wealthy Republicans wave the American flags while shipping American jobs overseas. And they do lots of business with governments deeply involved in the business of their countries. Ironic, isn't it?

If one looks at the history of the last 120 years, what many wealthy Republicans want are monopolies and guaranteed profits. For years, the best sweetheart deals over the long haul were found in South America. Then Eastern Europe was the next best venue for such deals. Now with the rape of American industry in full swing, the best deals are with the Chinese, Indians and a number of third world countries willing to pay big bucks up front. For a time, average Americans seemed to gain some benefit from the low prices that were the result of such wheeling and dealing. But it was only for a time. Seen any low prices lately? Wealthy Republicans have discovered low wages and fat profit margins. Welcome to the new economy.

Actually the new economy has been around for more than thirty years. The truth is that people noticed but didn't notice. It began with hostile takeovers that took American companies with lots of American jobs and turned them into lean operations that didn't have the R & D to keep their place in the world economy. Too much money was going into the pockets of people who were already rich but who couldn't seem to get enough. This kind of stuff still goes on. In recent years, many newspapers have been destroyed by such corporate raiders who fail to notice that newspapers need all the resources they can muster to survive the arrival of the Internet Age.

There's actually a myth that American ideas are what's keeping the American economy afloat. Like all myths, there's a grain of truth to it but the current myth is tied to a business superstition that you can't make a profit unless you set up a factory in Vietnam or Malaysia or whatever country is currently paying the lowest wages. It's part of a canard that big corporations throw around: We are in the business of ideas! Sure. Big corporations often buy their ideas from small corporations who get their ideas from university researchers looking for venture capital. Eventually the big corporation gets its big hands on the equipment of the small corporation, unscrews the stuff from the factory floor and ships it overseas for someone else to make. With an unemployment rate of 9.4%, America's empty factories now extend from Los Angeles to Jersey City. In the long run, selling generations of American know-how cannot keep the economy afloat.

The weird thing is that Ronald Reagan seemed to get that Americans not only need to lead in the best ideas but they need to lead in at least a few key areas of manufacturing. That is, after all, how we became great in the first place. Now, like most Republicans, Reagan seemed to have the idea that what the United States needed was a lot of poor workers with no bargaining power and no safety net. But unlike the Republicans of today, he actually felt the government sometimes needs to get involved in business. Reagan in particular stimulated the computer sector. In the 1980s, the United States was behind Japan in certain areas of computer technology. But Reagan felt technology was a national priority and even a national defense issue. And some years later Al Gore and Bill Clinton got it when they helped the Internet boom any number of times (No, Gore didn't invent the Internet as Republicans pretend that he claimed, but he did help it with a number of issues; actually Republican politicians and pundits of this era aren't good at inventing anything useful but they are admittedly fairly good at inventing nonsense).

For eight years, George W. Bush sat on his hands as it became obvious we had an energy problem. In the last year of his presidency, oil rose to $147 a barrel. Oil rose so high that oil prices were a factor in the economic meltdown of last September. Very quickly, oil started going the other way as America stopped going places and as the rest of the world fell into a steep recession. Nobody was buying oil and a barrel of oil dropped to the low 30s. Unfortunately, conservative lunkheads who have trouble paying attention started traveling again and buying big cars. The Los Angeles Times have noticed the climb in prices:

At some stations in the state, $3 gasoline was old news. A Mobil station in Goleta, near Santa Barbara, was charging $3.69 a gallon; a Chevron in Shoshone, near Death Valley National Park, was posting $3.66; and a 76 on the Westside was posting $3.59...

Death Valley? Now there's a metaphor. Look, the energy crisis is here. It's not going anywhere soon. During a recession, the use of oil drops. So does the price. But that doesn't mean the problem has gone away. So far, it's not clear that a significant majority of Americans get it. Maybe a small majority get it. But for things to change a majority of business people need to get it as well.

Here and there, one sees some glimmer of hope in the business community. There are people out there who get it, who have ideas, who have the know-how or who are close to getting the know-how if—and this is a big if—they can get help bringing their ideas to the market. This requires money. The problem is that if we wait around for big business to do something, the ideas and initiative and jobs will simply go overseas. The smart thing to do is to do what Reagan did in one of his few truly smart moves: get the government involved in stimulating new technology, this time in the alternative energy field. Here's an article from CNNMoney that offers a glimmer of hope:

Thousands of jobs are riding on Ener1's efforts to build the best car battery in the world.

The start-up firm is the only U.S. company able to mass produce batteries on American soil for an automobile industry poised to make a monumental shift from gasoline to electric power.

(snip)

The company has applied for a $480 million government loan to expand its facility and hopefully allow it to land a big contract. If that happens, Ener1 says it will go on a hiring spree.

Maybe Ener1 deserves the loan and maybe not. But I know there are hundreds of small American companies that deserves such loans and that will be the backbone of a new energy sector that will power American jobs. This is the future. Not the business as usual we've seen for thirty years. Americans jobs depend on companies that develop and use American talent. Let's hope Barack Obama gets it. Let's hope obstructionist Republican fossils get out of the way. It's time for the future to arrive in America.

John Edwards Speaks on Poverty and Critics

A Republican pundit who criticizes John Edwards for being rich is a ridiculous sight to behold given how much the Republican Party is the party of greed. To watch people in the media act as if a Republican talking point still has validity this late in the game after six years of corruption, incompetence and ideological indifference to the fate of millions of American is embarrassing to watch, particularly since so many of these mainstream media types are financially doing quite well and are themselves more interested in staying on top that acting in the public's interest.

There are plenty of exceptions in the media, of course; here and there are people who pay attention. Bob Herbert of The New York Times will surely be writing about the various presidential candidates but here's what he has to say on John Edwards:

The scene was immensely more appealing than the overly scripted televised "debates" that feature sleep-inducing nonanswers from an army of candidates browbeaten by moderators wielding stopwatches.

New Orleans has not been a hot topic at those upscale gatherings. Much of the city is still in ruins, still in "terrible shape," as Mr. Edwards noted. During a lengthy interview that followed his talk with the local residents, he told me that what had been allowed to happen to New Orleans was "an embarrassment for America" and that as president he would put the power of the federal government squarely behind its revival.

He said he would appoint a high-level official to take charge of the rebuilding, and he would have that person "report to me" every day. He said he would create 50,000 "steppingstone jobs," in parks, recreation facilities and a variety of community projects, for New Orleans residents who have been unable to find any other work. And he said, "We're also going to have to rebuild these levees."

(snip)

It's true that promises from politicians come at us like weeds on steroids. But the nation would get a clearer picture of the character, integrity and leadership qualities of individual candidates if the press would focus more intently on matters of substance.

As a rule, we're much more interested in gaffes than in the details of a candidate's position on a complex issue. We're much more interested in sound bites than in sound policy.

That should change. We should give the candidates time to speak. And we should listen.

Much of the media isn't really interested in the future of America; they're interested in circuses and media events and ingratiating themselves with powerful people and are more than happy to help someone like Bush put on meaningless photo op stunts like finding another group of bozos intent on attacking America with delusional schemes that even a movie producer would be embarrassed to use except in a lame comedy. Americans have the right to expect more from a powerful media.

Here's more on Edwards from AP writer Mike Glover:

Presidential candidate John Edwards said Monday it's silly to suggest that his wealth and expensive tastes have hurt his credibility as an advocate for the poor.

(snip)

"Would it have been better if I had done well and didn't care?" Edwards asked.

Edwards noted that some of the most acclaimed anti-poverty advocates came from privileged backgrounds, including Franklin Roosevelt and Bobby Kennedy.

"You could see and feel the empathy they had," said Edwards, speaking from his home in North Carolina during an interview on Iowa Public Radio.

Edwards, a former North Carolina senator, has made poverty a central issue of his campaign for the Democratic presidential nomination and recently released a book on the subject, "Ending Poverty in America." He also has formed a center for the study of poverty issues at the University of North Carolina.

Edwards could easily have mention John Kennedy whose Peace Corps was very much an anti-poverty program, though in the third world; the Peace Corps also led to a domestic anti-poverty program called Vista. Teddy Roosevelt's reforms led to bringing the robber barons under control and strengthening the middle class and giving more poor Americans a chance. Let me add that Franklin Roosevelt was particularly good at fighting poverty and one of the things that made him a good fighter was that he knew there were wealthy people who were responsible and generous but he also understood the dark side of his economic class and he understood their games and their dishonest rationalizations for their behavior ('it's just business, you know?').

In contrast, we currently have a president who genuinely doesn't care about the poor: witness his response to Hurricane Katrina. Bush's first response is always to help his wealthy friends. He might listen to someone who is poor for the sake of photo ops but when it comes time to do something, nothing happens. That is the nature of most politicians in the Republican Party these days and this is despite the fact that may rank and file Republicans believe poverty issues should be addressed.

Bob Herbert is right; we need a media less interested in recording the ins and out of political games and more interested in finding out what the issues are, what candidates have to say and how America might address these issues. The last thing we need is a free press sticking its head in the sand like Republican ostriches.

Tom Vilsack and the American Dream

Governor Tom Vilsack brought his presidential bid to Sioux City, Iowa. Vilsack is not the most dynamic Democratic hopeful in the field but he hit an interesting note on the American dream. Here's Bret Hayworth of the Sioux City Journal with the story:

Northwest Iowans got a glimpse of a different Tom Vilsack Wednesday.

After coming to know Vilsack during his two terms as Iowa governor -- he still has eight days left as governor -- political junkies turning out to see him at the Elks Lodge in Sioux City heard him talk about fiscal responsibility, aiding education and improving access to health care and health insurance.

(snip)

...Vilsack contended he is the Democrat who can right America's ship after years of failed leadership under George W. Bush.

He said a majority of American youth "do not believe in the American Dream" and that they can achieve it. He said it's becoming more difficult for the middle class to make due in the early 21st century as well.

"We need an economy that works for all of the people," he said, pointing to the need to become energy independent through renewable, homegrown energies, to reduce the 47 million Americans without health insurance and to make tougher federal budget decisions rather than running up the federal debt.

It hits a nerve with me that a majority of young Americans do not much believe they have a future. It also resonates with my knowledge of the history of the 1930s—and that's a bit of a shock. Vilsack should develop that theme more and also the theme that he can bring hope to America's young.

It would not surprise me if other candidates start picking up some of this theme for their own campaigns.