Future Energy: How the New Oil Industry Will Change People, Politics, and Portfolios
Author: Bill Paul
Publisher: John Wiley & Sons, Inc. (2007)
Reviewed By: Jason Hayes, M.E.Des., Communications Director, American Coal Council
Oroginally web-published: Thu, 2007-10-18 14:15
Energy supplies are tightening and prices are skyrocketing. Civil unrest, conflict, and acts of terror – often related to the free flow of energy – are spreading around the world. Environmental concerns and our ability to produce and use energy efficiently only serve to compound the challenges. As greening markets and environmental regulation make energy development, generation, and transmission more expensive and more difficult, pressures increase. Sitting atop of it all are the fears of climate change; rising sea levels, famine, drought, pestilence, and the list goes on.
If you have turned on the news or opened a newspaper in the past several years, that opening paragraph should outline much of what you will have read or heard. If one concentrated solely on the media headlines and sound bites, they might be tempted to throw up their hands, move to the hinterlands, and become a hermit.
However, there are a few remaining optimists out there. Despite the challenges our society faces in providing affordable, abundant, and clean energy sources to meet our meteoric growth in demand, there is still hope. Bill Paul's Future Energy provides one starting point in the search for new, abundant, and affordable energy sources (or information about those sources).
To be honest, Future Energy was a bit of a surprise to me. When I first picked it up, I expected to find another 'how to' book. I expected policy and politics and instructions detailing Paul's thoughts on “the best way” to obtain energy for our future. Again, I was surprised because while Paul does provide many ideas and suggestions on how things could be done, he clearly did not write Future Energy as an instruction manual. Instead, it reads as more of a 'who's who' in the buildup of the next generation of energy producers.
Paul runs through a detailed list of companies that will make up the “New Oil Industry.” In fact, Appendix A of the book could be described as basic reading for anyone seriously interested in investing in future energy development. True to his journalistic roots, Paul quite thoroughly and fairly investigates most – if not all – of the emerging energy trends and provides names and websites for any company he deems worthy of second or third looks by investors. He gives fair reviews of these energy sources, considering their costs and likely ability to play a role in energy production. Then he moves through a mix of established and emerging players, reviews 15 categories of energy technologies, and ranks 100 companies on their ability to play a significant role our future energy.
The most interesting portion of Future Energy was Paul's assertion that the actual 2006 price of gasoline was over $11 a gallon. I won't steal Paul's thunder by revealing everything that went into his cost calculations. However, he argues that the defense-related expenses required to ensure the free-flow of oil, along with lost economic activity incurred by sending money out of the U.S. to the banks and governments of other oil-producing companies represents a significant hidden cost to all American energy consumers.
Unfortunately Paul does not recount how many of those banks and oil-producing companies are sending a lot of that money back to the U.S. in the form of wages, capital, and investments. That returning investment does serve to limit some of these financial impacts. However, Paul does have a good point that developing domestic resources will do more to benefit the economy overall.
Coming from a coal perspective and knowing that coal-to-liquids (CTL) is competitive with oil at around $45 - $50 per barrel – which leads to $2 to $3 gas at the pumps – $11 gas makes the choice to develop and use our massive domestic coal resources for energy production (such as CTL) a no-brainer.
Many in the environmental movement or the more socially-conscious (so-called) will criticize Future Energy and Paul for some of his bedrock assumptions. For example, he takes as a basic fact that economic growth is a good – or necessary – thing and that we will need to continue supplying abundant and affordable energy to meet American and worldwide energy demand. Additionally, his choice of the Chevrolet Corvette as embodying the “spirit” that should motivate the new oil industry should prove especially galling to some.
Those criticisms should, however, be balanced against the reality that the developed world is doing more with less and doing so much more efficiently than it ever has. For example, our air is cleaner than it has been in decades and we have more forested area than when Columbus first landed. We enjoy unparalleled abundance and are learning to have that abundance while still maintaining healthy environmental conditions. At the same time, suggestions by some environmentalists – such as Gar Smith of the Earth Island Institute who once argued that there's “a lot of quality to be had in poverty,” and that allowing developing countries to use electricity would “destroy” their cultures – will be rejected outright by those currently enduring that poverty. Therefore, Paul's prediction that demand for cheap, abundant, and clean energy will continue to grow in both the developed and developing world is worth paying attention to.
Future Energy is a worthwhile foray into the notion that we can move beyond our traditional use of oil and gas. We can find new ways and new technologies to make new fuels and energy sources. This book doesn't provide us with all the answers, but as I noted above, it wasn't meant to. It offers up some helpful hints and thoughts on what our future energy sources could look like and then provides detailed lists of emerging technologies and the names of companies that are likely to be leading the way to make those technologies an every day reality.