April 9, 2020 § 3 Comments
A webinar conducted by the Research Triangle Cleantech Cluster this week, in which I participated, triggered this piece. Some points made by the other three panelists Ivan Urlaub, Renee Peet and Gary Rackcliff are reflected here, but I take responsibility for this product.
For purposes of this discussion, energy falls largely into two buckets: electricity and oil and gas derivatives. In the last two months or so, the price of oil has halved. Part of the driver was the Saudi/Russia spat, which is likely to end soon because neither can live with USD 23 (price at the writing) oil for long. But the “shelter at home” policy in much of the world has slowed industrial output to a dull idle. Gasoline and jet fuel use has plummeted. Electricity usage has dropped. Here we will discuss the likely longer-term implications, especially as relating to energy. Some of the issues addressed arise from questions that were asked in the webinar mentioned above. Here is a crack at a list of outcomes that I see as highly probable. A modicum of support is also offered for the assertions.
- Electricity from renewable sources will not take a hit, except for diminished access to capital due to federal loan paybacks and the availability of workers for production and installation. An uptick in this space is possible, in which case closer attention to storage will be required.
- Distributed electricity production, with associated microgrids, will remain unaffected, except for capital constraints. Non reliance on a grid makes this segment attractive for resiliency in the face of disasters such as forest fires and hurricanes, but that sort of resiliency is less applicable to this disaster. To the extent that current deployments are in underserved communities, especially in low- and middle-Income countries, oversupply is unlikely because the supply usually just barely keeps up with demand, or the potential demand of increased productivity.
- Electricity suppliers with a heavier footprint in smart features, such as remote monitoring of home usage, are benefitting during this crisis because so much service can be provided without deploying personnel. Post crisis enthusiasm for these features, leading to wider adoption, is likely. This can only help with resiliency as well and ultimately with enterprise profitability. Compared to other power industry investment, the scale of this one is small.
- Oil prices will hover in the range USD 30-50 per barrel, with possible excursions to USD 25, with considerable volatility. For the first time in a Very Long time, Texas producers may agree to a cap on production. The Texas Railroad Commission, which has had nothing to do with railroads since 2005, regulates the industry. Prior to OPEC, they were the determinants of oil price. Production controls, whether mediated by the TRC or not, are likely to return. Were that to happen, and if Russia and the Saudis reciprocate with production cuts, oil price could well be in the upper reaches of the range noted above, once the economic recovery is in full swing. The US government has also announced a purchase of 77 MM barrels of oil for the Strategic Petroleum Reserve (SPR). Since the SPR is depleted by about that amount, this would top it up. The average cost of the current reserve is USD 28. If they go through with it (funding for it is in doubt) the new oil will likely be at a similar price. I have blogged previously that the SPR is not really needed any more, that shale oil in the ground is the reserve, but this could help prop up the price at a bargain cost.
- In not agreeing with OPEC on production restraint, Russian intent was to kill US shale oil. Shale oil will be wounded, but not killed. As in the last plummet in oil prices in 2015, highly leveraged players will declare bankruptcies. The properties will be scooped up by the major oil companies for dimes on the dollar. With deep pockets, the majors will simply keep shale as a portfolio item and unleash when profitable.
- The short- to medium-term reduction in shale oil production will reduce associated gas production. After the winter of 2020, natural gas prices will begin to firm. This firming will not be enough to reverse the attrition in coal demand for power.
- Electric vehicle (EV) adoption rate will not materially be affected by the drop in gasoline prices, no matter how sustained. The fully loaded cost of EV fuel is dominated by cost of amortization of the batteries. At a battery cost of USD 100 per kWh, as forecast by Elon Musk for next year (he actually said 2020, but I will cut him some Queen Corona slack), a 200 mile range EV will have a fully loaded cost of about USD 1.50 per gallon equivalent. This is based on a lot of assumptions, but the electricity “variable” cost is between 17% and 30% of that figure. The main takeaway is that unless gasoline price drops to a sustained USD 1.50 or lower (unlikely in most of the US, very unlikely in California and incomprehensible for Europe), gasoline pricing will have little influence on EV adoption. If a battery swapping model is adopted (where the consumer does not own the battery and swaps a charged one at each “fill”), the pay as you drive concept will be appealing, with lower car purchase cost and lower per mile cost.
- EV adoption rate is on the upswing, but still hard to predict. Oil and gas companies would do well to diversify their portfolios into electricity, which has other markets as well. This has indeed been happening for a while. But wind and solar don’t fit the core competencies of these companies. A relatively new entry is scalable geothermal energy. The operations are not only a fit, but oil (and oil service) companies are uniquely positioned to speed up the entrée and scale. Once in their portfolios, they can balance them based on the EV adoption rate, much as they currently do with their oil versus natural gas components.
- Remote working will have some measure of sustained adoption post apocalypse. It is being “field tested” by outfits that may not have used the mechanism in the past. Some may find that it is cost effective. I remember when Shell Oil went to a 10-hour day, four days a week, in Houston to reduce commute miles and associated emissions. Remote working is that on steroids. During this emergency each company will have sorted out which functions (and persons) are suited to this approach. They can take an informed view on adoption.
- Virtual meetings will have an even greater adoption rate. Technology has kept improving, but inertia or conservatism has kept adoption down. Now, with the enforced testing regime, informed decisions will be made. I see a strong uptick in this area. Winners are IT connectivity companies. Losers are airlines. Business travelers are the most profitable passengers on a plane.
- Both the above will reduce use of oil derived liquid fuel. Depending on scale this demand destruction could materially affect the price of oil. Natural gas pricing will remain unaffected; different markets served.
One, somewhat off topic outcome is rise in public empathy, and possibly altruism. When behaviors such as these are entrenched for months, they are more likely to stick. This is good. The (positive) irony would be if the pandemic caused “a contagion of good example” to spread. From an entrepreneurial standpoint, innovations in enabling this trend could be effective.
April 9, 2020
March 30, 2020 § Leave a comment
Social distancing is a catchy phrase. The distancing part is easily understood. However, the implication is that all communication requiring bodily closeness is driven by social triggers. This is not necessarily the case. Business transactions entail close contact, especially in the west. The shaking of hands, the exchanging of pleasantries and the ice breaker along the lines of “so, how ‘bout them Sox” (that particular line will be shelved for 2020, it seems, which is likely all to the good for the red variety of Sox, what with overpaying for injured stars and all), all require close bodily distance, the most egregious, under the circumstances, being the hand shake.
Today, in most places in the world, “shelter at home” orders discourage interaction based primarily on social objectives. Sanctioned are trips, albeit careful ones, to the grocery stores, gas stations, hardware stores, pharmacies and curbside pickup of food at restaurants. All these demand a measure of bodily proximity, which can easily be managed to minimize distance between individuals. Shown below is an image from India, where the shopkeeper is taking steps. Note the appropriation of a portion of the road!
Source: bangka.tribunnews.com retrieved March 30, 2020
Our farmers market in Carrboro, NC, did not go to these lengths. But they separated the individual farmers by about three times the usual separation, instituted one-way pedestrian traffic (super decision whose value is immediately obvious: distancing is harder in cross flow), instructed all farmers on protection measures including produce handled only by glove equipped farmers* and dictated inter-customer distance, with roving enforcers. Note, however, this was business distancing, not social, in the main. The non-buying, chatting customer holding up the line last Saturday, comes to mind. But, all good, nobody had anywhere to go anyway.
Social interaction, on the other hand, being expressly forbidden in person, has found avenues, new to some. This is important. Social connectivity may be more critical than ever. Uncertainty is rife due to lack of information, poor information and information with agendas. Just discussing with someone helps, especially if one lives alone. All of us ought to be resolved to connect with someone each day. Technology helps, but simple phone calls may work better for some. Zoom parties are fully in play, as are virtual baby showers, birthdays and all manner of celebrations. They may never replace the real deals, but then again, there is that chance. Nothing substitutes for the warmth of direct personal contact (when permitted). Hopefully, virtual social contact will be the exception in normal times.
Certainly, if Zoom (used generically here, take your pick on Skype, BlueJeans or any other) meetings prove effective even in business settings, two outcomes may outlive the emergency. One is the increased appetite for remote workplaces. This is already a trend, but the effectiveness could expand this, especially to businesses that did not already use the option.
The other is a decreased need to travel for meetings. This last has always been on the cards with the ever-increasing sophistication in information technology. But there is nothing quite like an extended “pilot test” to drive home the value. Airlines and hotels will be the losers if this sticks. Global warming could be a winner here, but only if the shift is large scale (aircraft have fewer options on fuel substitution than do automobiles). On the home front, the forced pilot test could make some couples realize that they were not as compatible as they believed. Pervasive uncertainty and the need to make coordinated decisions will not help with frayed tempers. Wiser counsel, or just another ear, would help. This returns us to the need for social network access. The opposite of social distancing, but without physical proximity.
India Prime Minister Modi recently made note of the distinction in his radio program Mann ki Baat, which loosely translates from the Hindi into “Something to think about”. He referred to “increasing social distancing but reducing emotional distancing.” Take your pick on alternatives to “social distancing”. My Aussie nephew’s suggestion is “physical distancing”.
*You can’t touch this from “U can’t touch this” performed by MC Hammer 1990, written by MC Hammer (Stanley Burrell), Rick James and Alonzo Miller
March 19, 2020 § 2 Comments
If enough of the light was at ultraviolet wavelengths, the virus would die. This light, however, is an attempt to explain some of the science behind the virus and its effects. I fully expect you folks to obtain fact or inference checks from physician scientists and am prepared for the comment onslaught.
A general caution is that very few sites, including this one, ought to be relied upon without verification. The reputable sites include the National Institutes of Health (NIH) and in particular the National Institute of Allergy and Infectious Diseases (NIAID), the Center for Disease Control (CDC), and the World Health Organization (WHO). Other sources are sites at top medical schools such as at Johns Hopkins, Stanford and Harvard.
First the nomenclature. COVID-19 is the disease resulting from the virus. The virus is from the general family of coronaviruses, with this variant being named SARS-CoV-2. SARS stands for Severe Acute Respiratory Syndrome. The name being a bit of a mouthful, the WHO often refers to it as the “COVID-19 virus”. The virus is related to those responsible for the recent outbreaks of SARS in 2002-2004 and Middle East Respiratory Syndrome (MERS) in 2012.
Structure and function
In common with other coronaviruses, they are spherical, with protein spikes sticking out about 12 nanometers (nm). Resemblance to a crown informs the corona name. They also have a striking resemblance to the fearsome medieval weapon, the mace. In size they are reported to be in the range 50-150 nm, which places them roughly in the ultrafine classification of airborne aerosols. However, deposition fractions in various parts of the respiratory tract cannot be presumed to be similar to those of particulate matter, even those coated with organic molecules.
SARS-CoV-2 transmission electron microscopy image, courtesy NIAID-RML
The image is of a virus isolated from a US patient. The spiky proteins attach to receptors in human cells. The mechanism is not unlike a lock and key. The key of the virus protein needs a receptor lock to attach in order to then enter the cell. Another analogy is docking of a spaceship to a space station. Once this docking happens, the virus can enter the human cell. Then it can replicate in the human cells and the disease is well on its way. Recent research has shown that the receptor for SARS-CoV-2 is the same as that for the SARS virus. That is the good news, because we know a lot about the original SARS. The not so good news is that the binding affinity for this virus is ten to twenty times greater than for the original SARS (Wrapp et al. 2020). This could explain why the human to human spread appears to be greater than was noted in the SARS outbreak. Furthermore, despite the similarities in the structure and sequence of the protein spikes of the two viruses, three antibodies developed for SARS were not effective in binding to the SARS-CoV-2 protein spike.
A feature of the SARS-CoV-2 virus is that it is enveloped by a lipid (fat) layer (the “crown” protein extends beyond the lipid layer). In this aspect the structure is like that of influenza viruses and the other coronaviruses (and unlike the diarrhea inducing rotavirus). This is fortunate because soap and water will kill it. Soap has a hydrophilic head and a lipophilic tail. The tail penetrates the lipid layer and pries it apart, thus leading to the destruction of the viral genes, with all the fragments being washed away by the water. This mechanism of action underlies the most important public health guideline for minimizing spread, washing of hands in soap and water for at least 20 seconds, taking care to wash between the fingers. Hand sanitizers are believed effective if they contain at least 60% alcohol. They too remove the lipid layer and cause the disintegration of the virus.
Except for the hand cleaning discussion, I did not get into disease avoidance. For the rest you need to go to one of the reputable sites. But I will note that my limited examination of the literature shows a flurry of scientific activity on several fronts. These include studies of the immune response, development of a test to verify the presence of antibodies (UK), testing of intensity reduction drugs (example Tamiflu for influenza), and research on the ultimate prize: vaccines. Keep in mind that folks are rushing to publish, in order to get the information for others to use, and so findings may be subject to revision. The study linked above is based on a single patient, but still instructive. With all the stuff out there, caveat emptor!
Reference: Wrapp et al., (2020) Science 367, 1260–1263
Vikram Rao, March 19, 2020
March 17, 2020 § 2 Comments
Energy showed up in the Democratic Presidential Debate, albeit not as a central issue; COVID-19 took care of that, closely followed by the ghosts of past senate votes. Sanders wanted elimination of fossil fuels; I was not clear whether this referred only to domestic production or also domestic use. For purposes of argument I will assume both. There was little doubt that production was a target, because he called for an end to frac’ing, which is the primary means for domestic oil production. But he also mentioned electric vehicles, giving weight to the second category.
When challenged by Sanders on the frac’ing issue, Biden used the time-honored debating technique of answering the question he wanted to hear. Incidentally, this direct questioning of each other was tolerated and added spice. Biden’s response was along the lines of Obama era policies: no drilling on federal lands and similar prohibitions. Sanders too used the same technique during the climate change portion. When asked by the moderator how he squared his banning frac’ing with the evidence that frac’ing was responsible for carbon reduction, through displacement of coal-based electricity, he simply ignored the question and gave some response that I forget. He missed a bet by not proffering a “yes, but” response getting into the risks to human health, largely unrealized, but good debating material. The pluses and minuses are in my 2016 book Shale Oil and Gas, the Promise and the Peril. RTI Press will send you a free soft copy if you let me know.
How relevant was all this to the primary process? Probably not much. A quick search of opinions on the debate shows almost no mention of the points raised above. I suspect Sanders raised the issues largely because they resonated well with his constituency. Banning frac’ing is a classic progressive rallying cry. Or used to be. Virtually zero mention in the talking head analyses indicates something.
But, will energy be a significant issue in the title bout? Depends on who has the Democratic nomination. Sanders would certainly make climate change an issue; Biden may as well, but likely not as stridently. Sanders will use it to attack fossil fuels and frac’ing. Trump’s support of the oil industry is solid, including permitting drilling on federal lands. Nevertheless, he did, inexplicably, applaud the recent plummet in the price of oil, because it enabled cheaper gasoline.
Biden, on the other hand, will likely evade oil and gas altogether. If this issue comes up it will be because the Trump camp raises it. The only real policy differences with Trump appear to be on drilling (and likely, frac’ing) on federal lands and the Arctic (which will not involve frac’ing). As to the latter, the likelihood of any oil company action in the Arctic at even USD 70 oil is minimal. The reason is that developments in the Arctic, even the slightly more benign versions in the Alaska National Wildlife Refuge (ANWR), are expensive. They would require stable high prices. The recent near halving due to COVID-19 combined with the Russia/Saudi spat will provide scant comfort. Used to be that wars were the primary reasons for volatility. Now we have added a pandemic.
One final word on the issue of oil, gas and sustainable alternatives. I have opined in these pages that oil must be displaced with dispatch in the transportation sector, and certainly the electricity sector. If you are experiencing a doubletake on the second point, note that the Saudis currently use nearly a million barrels per day to produce electricity. Diesel generators are the backups to power interruptions in innumerable locations. In transportation, electric vehicles are the future. But hurdles remain to speed the transition. A complete transformation is at least 15 years away, 10 if we do most things right. In the interim, continued domestic oil production is a national security issue.
Natural gas is a different story. Cheap natural gas from shale was arguably one of the most significant reasons for recovery from the recession of 2008. The chemical industry relying on natural gas as a raw material, returned to our shores in droves, bringing jobs and prosperity. Cheap natural gas rapidly displaced coal and dramatically reduced US carbon emissions. The US stopped importing LNG, and this effectively dropped gas prices worldwide. Russian ability to use gas as a weapon of political will in Europe was severely curtailed.
These are facts and inferences that politicians of all stripes must internalize. Also, that no form of energy comes without baggage. Finally, affordable energy raises all boats of economic prosperity.
Vikram Rao, March 17, 2020
“You may be right, and you may be wrong” from You May Be Right, 1980, performed and written by Billy Joel
March 11, 2020 § 3 Comments
Saudi Arabia and Russia are playing a game of chicken with the price of oil. After collaborating for a while in the cartel that came to be known as OPEC Plus, Russia did not agree to production curbs, even with the Saudis carrying most of the water. The Saudis dropped their price to gain market share. Today (March 11, 2020), the US benchmark West Texas Intermediate plummeted to USD 32 from about USD 60 at the start of the year. This is a light oil. Heavy crude, as from Canada, carries a discount in the vicinity of 25%. Many operations, especially those heavily leveraged with debt, will be unsustainable.
Two factors are in play here. The COVID-19 inspired reduction in industrial output and dampener on travel already put downward pressure on oil. The Russia-Saudi spat merely poured fuel on the fire. Russian breakeven price is USD 40, and the Saudi one is USD 80 (due to social costs; the production cost is in low single digits). So, logic dictates this situation to not be long lived. Even if one of them blinks, the other factor will still depress oil usage.
The associated recession is different from that in 2008. Low demand was the big issue then. This time the demand, spurred by low unemployment, is present and the supply is the issue, driven in large measure by China producing less goods during the COVID-19 crisis.
An interesting aspect of the situation is that one could expect natural gas prices to rise. They have been depressed due to oversupply. Excessive natural gas production has been an unintended consequence of shale oil production. This oil, being very light (mixture of relatively small molecules) has a proportion of even smaller molecules associated with it. These molecules are methane, ethane, propane and butane, in the main. Collectively, these are known as wet natural gas. The hot (perhaps not for long) Permian basin produces 2.2 billion cubic feet per day (bcfd) of this stuff with each 1.0 million barrels per day (bpd) of oil. Until recently, the US was adding 1 million bpd of oil annually. That additional “associated” gas was softening the gas market. Expectation of continued shale oil increase heralded continued softness. All that may change now.
The print edition of the New York Times (March 10, 2020, B1) has a story on the oil standoff and the impact on US shale oil. Curiously, an associated image is that of Shell’s partially constructed ethane cracker in Beaver County, PA (the product will be ethylene and associated plastics). By implication (there is no explanation in the text) this will be compromised. On the contrary, it is likely to command more guaranteed feedstock. Ethane is a biproduct of “wet” shale gas, which is plentiful in that portion of western PA. Shale gas development will likely get a lift from the firming of prices, and wet gas is more profitable. That means more ethane supply for the cracker. And possibly at lower prices; natural gas liquids prices are usually pegged to oil price.
In an odd twist, the Saudis announced a major entrée into shale gas production. With 200 trillion cubic feet in reserves, they plan to produce 2.2 bcfd of shale gas by 2036. This appears to be very wet, with 10 gallons NGL per mcf gas, which places it on the higher end of the richness scale of US deposits. The liquids will be used to make chemicals, while the dry gas is destined to be burned for power. That is the principal driver: to replace about 800,000 bpd of oil currently used to generate electricity. That oil will now be available for export, adding to the glut (when it happens). Shale oil has been a thorn in the side of the Saudi led OPEC. Now, the Saudis plan to use the underlying technology to make more of their oil available for export. US service companies will be doing the work. Ironies abound.
March 11, 2020
PS The blog is back!!
January 2, 2019 § 1 Comment
A recent story notes that natural gas drilling in 2018 has dropped by 87.7 %, from a peak in 2008. Over the same period, natural gas production has increased by 58%. Natural gas drilling is down to a whimper, but natural gas production continues to grow, year on year. Had the gas production been from conventional offshore reservoirs, one could have hypothesized that a few large gas fields dominated production, despite fewer wells being drilled. But most of the drilling for natural gas in this decadal period has been in shale, which does not produce high volumes, but each well is relatively inexpensive. Before we launch into the explanation of the seeming anomaly, consider the impact of the result.
Natural gas production, largely from shale, was arguably the single biggest reason for lifting the US out of the last recession. In the decade prior to the recession, US gas prices had fluctuated wildly from USD 2 per million BTU (MM BTU) to as much as USD 15 per MM BTU. Nothing dampens the spirit of investors in capital driven industries more than unpredictability in the price of the key raw material. Consequently, major industries, methanol producers for one, fled to countries with sustained low gas prices, such as Trinidad. When shale gas went on the market in high volume, prices dropped, and stayed low, in the vicinity of USD 3 per MM BTU. With predictions of sustained low prices, predictions which have held up now eight years later, industry returned to the US. Liquified natural gas (LNG) imports were no longer necessary, and shortly thereafter, the US became an exporter of LNG. For every citizen in the US, a lower fraction (sizable for many) of take-home pay went towards transportation and home heating and cooling. The savings were spent on goods and services. The recession was in retreat.
Shale oil picked up and became a major force by about 2013. In 2015, the high production halved the world oil price and OPEC was marginalized. The low oil price, together with the low natural gas price, contributed to the economic gains and a record stock market. But gas prices stayed low despite steep reduction in gas exploitation, because gas supply continued to be high. Curiously, and seemingly paradoxically, the reason is the steeply increasing oil production over the decade. Over roughly the same period as the decline in gas drilling, oil production has increased from 5.0 MM bpd in 2008 to 11.6 MM bpd in 2018. Now for the explanation as to why that caused gas production to rise.
Crude oil comprises of a mixture of molecules, with the bulk of them conforming to the formula CnH2n+2, where n is an integer. Oil molecules break down over time in the host environment of high pressure and temperature. The most thermally mature state is methane, with n=1. Ethane, propane and butane, with n=2,3 and 4, respectively are the next more immature. Shale oil is very light, as defined by API gravity. Accordingly, the n’s are low numbers relative to heavier oils. One could reasonably expect shale oil to be associated with some molecules at higher thermal maturities. This is known as associated gas, and usually comprises methane in the main, together with the somewhat larger molecules with n=2-4 and more. Canadian heavy oil, on the other hand, could be expected to have little or no associated gas. More shale oil production automatically means more shale gas production.
Recent data from the Permian, the hottest oil play in the US today, indicates that every MM Bpd of oil would have associated with it 2.2 billion cubic feet per day (bcfd) of gas. If this statistic is taken to apply to all shale oil, as a first approximation, on would expect gas production to be 14.5 bcfd greater in 2018 than in 2008, from this source alone. That translates into 5.3 tcf per year. With no let up in shale oil production in sight, natural gas will continue to be produced. Expect, therefore, for natural gas prices to remain at low to moderate levels, and a boon to the economy. Shale gas drilling is, metaphorically speaking, dead, or at least a shadow of its formal self. But natural gas remains the reigning monarch in assuring a healthy economy.
August 21, 2018 § Leave a comment
The US administration appears to have fired a salvo against carbon mitigation. We will examine the facts and muse on the likely true impact of the government action. A recent story discusses the implications of a directive seemingly buried in a memorandum on fuel economy standards from a month ago. I am unable to find the one memorandum, but earlier documents for public comment are clear on a couple of measures, which are quoted in the linked story. These include, freezing fuel economy standards to 2020 planned levels.
Ironically, this comes at a time when completely unprecedented forest fires rage worldwide. Since this was more or less predicted by earlier temperature rise models, the increased frequency of fires is believed to have anthropogenic origins, as noted in a recent PNAS paper. The impact of forest fires is profound. The economic privation is high as is the long term impact on health.
Health impact of emissions from combustion
Even climate change deniers must accept the epidemiologically supported finding that airborne particulate matter (PM) is responsible for 6.5 million premature deaths, annually, worldwide. Nearly two thirds of the mortality figure is attributed to wood burning for cooking and heating. Forest fires are country cousins, in terms of type of particles emitted. They are spectacular and frightening, but in the overall scheme, currently account for minor contributions to airborne particulates. But, to the extent they are driven by temperature rise, this contribution can only increase, even as other anthropogenic PM diminishes due to interventions.
Over 80% of airborne particulates are sourced from either the creation or use of energy. On the consumption side, the biggest contributor in the US and Europe urban communities is automotive exhaust. While diesel gets all the press, gasoline also is a contributor, particularly of ultrafine particles, which are especially toxic. Both also produce NOx and organics, which are responsible for atmospheric reactions with the particles, often involving ozone and mediated by photochemical action, rendering them more toxic. There ought to be little dispute that reducing these emissions ought to be a federal objective. Two measures can accomplish that: engineered mitigation of emissions, such as better diesel particulate filters, or decreased use of fuel. The objective of using less fuel, while obtaining the same utility, can only be attained with better engine efficiency.
Implications of the new guidelines
One of the directives is the relaxing of fuel economy standards, by holding them constant at 2020 levels. This runs counter to the point made above, regarding means to reduce the impact of airborne particulate matter. Since no companion guidelines are provided regarding PM capture, on these grounds alone, the new guidelines are unfriendly to the goal of reduced particulate emissions. Admittedly, mortality figures associated with PM in the US are small compared to the world figure noted above. A recent paper estimates it to be 138,000 annually in the early 21st century, about 5.1% of total deaths. That is more than double those attributed to influenza and pneumonia, for which serious intervention measures exist.
In the linked story, the memorandum is quoted as stating that growth of natural gas and other alternatives to petroleum have reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy.” The gist of the story is that the administration believes that conserving oil is no longer in the national interest. Without doubt the proliferation of cheap shale gas has allowed many commodities to be made profitably from natural gas, instead of from oil. Since the US is a net importer of oil, such use of gas does reduce oil import.
However, due to shale production the US is already the leading producer of oil and gas. Nevertheless, it still imports oil, while also exporting both fluids. A lot of this trade is with Canada and Mexico. I predict that within five years North America will be self-sufficient in oil and gas. Accordingly, from the standpoint of national energy security, conservation is not needed (provided we don’t emasculate NAFTA in the energy sector). But the plea in this blog is that it is needed to preserve the health of the citizenry. And it is not conservation, per se, that we seek. Simply, the more prudent use of energy for no less gratification. Drive the same miles, stay just as warm (or cool), but do it more efficiently.