Could we finally stop the insanity over biofuels? They are nothing more than a gimmick created by the purveyors of corn seeds. Dirty, unstable, costly, increases the prices of thousands of other products and extremely dangerous from a carbon cost perspective. Great stuff.

Not.

I’ve been looking at the hot button issues for blogs like this one for the coming year- not predictions but rather the stories that are unfolding right now, at the beginning of the year. When I started this blog a few years ago there was some debate about warming but the effects and proposed solutions were not totally clear. Now we’re seeing direct effects almost daily around the globe and starting to understand that dealing with this disaster is a global economic challenge rather than a political one. This hodgepodge of stories supports this contention:

• Switchgrass ethanol study shows that this source returns 540% of the energy required to grow and refine it. Corn returns something like 50%. Corn ethanol is not viable.
• The introduction of the $2500 Nano car in India and other emerging economies is going to have a profoundly negative effect of energy prices and generate enormous new emissions as the number of cars on the planet explodes.
• We’re using 2.9 million barrels of oil per day more than 6 years ago, globally. If you think oil at $100 is a story, think about oil at $200. When demand goes up and supply goes down, prices skyrocket.
• Automotive technology is poised for an explosion of innovation this year with the Tesla electric sports car, fuel cells, new biological hydrogen extraction techniques, highly efficient hybrids and plug-in hybrids and more. What does this tell us? That the conspiracy theories of the past that said oil and car companies were killing and/or stifling innovation were true- this stuff didn’t just appear out of thin air.
• Greenland Ice Sheet Scares the Crap Out of Climate Scientists. We’ll be watching the ice globally this year, especially in Grenland where the volume of water held in stasis by the ice sheet is equivalent to the entire Gulf of Mexico (!). Estimates for ocean rise by 2050 due to rapidly accelerating melting and calving of the ice sheet range from 2-6 meters. Goodbye virtually every coastal city worldwide including our nation’s capitol (anyone remember the flooded national Mall last year, New York’s subway floods and the ongoing national shame of Katrina?)
• The weather. It’s impossible to describe how big this story is. Here in Rochester, NY, the famously chilly winter upstate area was 70 degrees earlier this week, breaking all records. Killer tornados in the midwest in January, winter storms with CAT 4 winds (140 mph+) in the Pacific Northwest. Droughts in the southwest and southeast with no reserve water supplies. That’s just this week, folks.
• Water, water, nowhere. Only 1 in 500 Chinese have free access to potable drinking water. In much of the world it is worse. Yes, they have to buy drinking water and it’s not cheap. Repercussions of water issues cross all geographic and economic boundaries.
• Carbon costs. We’re going to have to start measuring the carbon costs of virtually all of our activities and products if we’re going to startle people into awareness of how their own actions are worsening the problem of climate change. I’m not buying organic milk that is shipped across the country when I can get local milk for half the price, dollars and carbon-wise. Look at what you buy and how far it came to get to you. And don’t forget the packaging.
• Freegan culture and the Chinese product backlash. Because of the Chinese toy scandals a lot of parents who don’t have time to worry about environmental issues are questioning the provenance of the products they buy and the immediate response is ‘I’m not buying Chinese’. A secondary response is the rise of freegan culture that says ‘I’m not buying things I don’t need and when I do need something I’m going to look for used or free stuff’. You don’t have to dumpster dive, there’s a huge thrift shop culture out there. Do you really need a new blender when your neighborhood Goodwill probably has ten perfectly good ones for a buck or two?
• Home and automotive energy costs crush economy by limiting disposable income. We’re paying five times as much as ten years ago for heat/AC and gas, yet incomes have not risen much. When you take $300-400 more out of a typical family’s monthly budget because of energy costs that money does not flow into the economy.

These stories are just the ones at the top of my awareness today. There are dozens more, so many in fact, that it is daunting to even write a quirky blog about climate change- it is overwhelming in the reach and impact it already has. Nevertheless I’ll be at it again in 2008.

“Experts say the sharp growth, if it continues, means several of the world’s most important suppliers may need to start importing oil within a decade to power all the new cars, houses and businesses they are buying and creating with their oil wealth.”

According to this NYTimes.com article,  the economies of oil rich countries are growing so fast that they are becoming their own fastest growing markets. This increases the squeeze on countries like the US as more and more global demand will keep the price of oil rising. If we’re in Peak Oil (using the last 50% of supplies) then this feedback loop will only speed up the rate at which we run out of fossil fuels. Given that our entire economy requires access to cheap fuel to operate, we’re in serious trouble. Yet our representatives in Bali this week are obfuscating and generally refusing to accept any kind of mandated carbon caps.

I’ve long believed that political solutions to the climate crisis will be limited in their impact primarily because of the very short attention span of most politicians, i.e. until their next election and due to the influence peddlars in DC, most of whom are ex-politicos. If we’re going to solve this huge global problem then the markets will have to be the drivers of change.

One big factor in this is our own pocketbooks- we know from the oil crisis in the seventies that it took average Americans screaming bloody murder over gas prices and shortages to see any big change in energy policies. So what will it take now? Let’s look at where gas prices might need to go to drive change.

Gas at the pump prices are about $.30/gallon higher on average than six months ago. assuming an average MPH of 23 this means it costs us about $.013 more per mile to drive. If you drive an average of 1200 miles per month, this increase cost you $15.60 more per month than you would have paid six months ago. Probably not enough to really anger a lot of people in the US.

If we’re at $3.30/gallon now, at what price point do we start getting concerned and/or angry? $4/gallon gas would take another $36.40 out of our monthly budgets (on top of that 15.60). Is this a price tipping point? How about $5/gallon- another $52./month? That might do it.

Admittedly, this is a simplistic calculation. Let’s look a little further. There are approximately 200 million licensed drivers in the US, driving 240 million registered passenger vehicles. If these 200 million drivers are each shelling out an extra $1200/year for fuel (based on $5/gallon pricing), that’s $240 billion that is not entering the ecomomy- it’s being sucked up by the oil industry. Is a quarter of a trillion dollars in lost purchasing power, annually, enough to wake this country up? I sure hope so because it’s coming. They’re already there in Europe.

Finally some other related stories: The recent riots in Myanmar (aka Burma) were triggered by the government removing subsidies on gas prices. They went from pennies a gallon to dollars a gallon overnight and the country exploded. In Venezuela, nut case dictator Hugo Chavez (I’m a liberal but I don’t buy into this guy for a second- nothing but a petty tyrant), subsidizes gas so the populace only pays $.07/gallon. This is the classic ‘bread and circuses’ tactic used to keep the populace blissfully unaware of reality.

Oil is never, ever going to cost less, no matter what new fields are found. We have to change our entire society to end our dependence, quitting cold turkey so to speak.