The Environment?more facts and opinion
Brian Trumbore
President/Editor, StocksandNews.com

Continuing with my environmental theme of the past few weeks, following are some notes I found in separate articles for a new publication called The American.

"Fact and Opinion on Energy and Environment"

Question: Thinking specifically about the environmental movement, do you think of yourself as??

Active participant in the environmental movement?14%
Sympathetic, but not active?48%
Neutral?.29%
Unsympathetic toward the movement?7%

[This was from a Gallup/USA Today survey in March 2006?so I imagine the numbers are tilted even more to "active participant" one year later.]

Question: Thinking about what is said in the news, in your view is the seriousness of global warming generally exaggerated, generally correct, or is it generally underestimated?

Generally exaggerated?33%
Generally correct?29%
Generally underestimated?35%

[Source: Gallup Organization, March 2007]

U.S. Primary Energy Consumption by Source, 2005

Petroleum?40.1
Natural Gas?22.6
Coal?22.9
Renewable Energy?6.1
Nuclear Electric Power?8.1

U.S. Energy Consumption by Sector

Transportation?28.0
Industrial?20.9
Residential & Commercial?11.2
Electric Power?39.9

When Americans are asked about the top priority for policymakers today, only small numbers choose the environment.

Question: Which one of the following issues do you think should be the top priority of the federal government?

The war in Iraq?35%
Healthcare?15%
Job creation?15%
Terrorism?13%
Illegal immigration?8%
Reducing the deficit?5%
Environment?3%
Energy/cost of gas?2%

[Source: NBC News / Wall Street Journal, Jan. 2007]

Question: How would you rate the overall quality of the environment in this country today?

Excellent?5%
Good?35%
Only Fair?49%
Poor?11%

[Source: Gallup Organization, March 2006]

Steven Hayward, scholar at the American Enterprise Institute (a conservative think-tank) had a separate Q&A for The American, from which I've selected just a few.

What is energy independence?

Hayward: "It's usually a synonym for energy self-sufficiency - the idea of the United States supplying all, or nearly all, of its own energy needs. The public reacts enthusiastically to the idea in polls, which is why every president since Richard Nixon has announced independence as a distant goal.

"We seldom hear self-sufficiency lauded in connection with other essential goods, like automobiles, airplanes, food, or medicines. The U.S. currently imports about one-fourth of its timber-required for building homes and printing newspapers, books, and magazines. But we don't hear calls for 'ending our dependence on foreign timber.'"

Why do some people think we should worry more about where we get our energy than about where we get other important resources?

"The short answer is OPEC, the Organization of Petroleum Exporting Countries. From the first oil shock of the 1970s, American consumers have disliked the fact that Middle Eastern oil exporters can manipulate prices by acting as a cartel. In addition, there's political concern that American oil purchases from corrupt Arab and Muslim countries may be funding terrorism. These concerns have been extended to Venezuela, Nigeria, and other shaky or erratic regimes, which could cause disruptions in supply.

"There are some large misperceptions behind this popular view. Much of the public, for instance, believes we get most of our oil from Saudi Arabia and other politically troubled nations. In fact, in 2005, the most recent year for which the Department of Energy has statistics, the U.S. imported 5 billion barrels of oil, with only 11 percent coming from Saudi Arabia. [Canada is the leading foreign supplier at 16 percent and Mexico is second at 12 percent. Venezuela is essentially level with Saudi Arabia.]
[Source: Energy Information Administration, U.S. Department of Energy]

How important is oil, compared with other kinds of energy?

"Oil certainly poses unique political challenges, but it accounts for about two-fifths of total American energy use, almost entirely in the transportation sector. The main use of energy in the U.S. is to produce electricity, where oil plays a tiny role. Half of our electricity is generated from coal, which the U.S. has in abundance. Natural gas and nuclear power together account for almost 40 percent of our electricity. Hydropower and other renewables (solar, wind, etc.) supply the last 10 percent. A small amount of U.S. natural gas and coal is imported - the gas from Canada, the coal mainly from Latin America - but nearly all the energy sources for electricity are homegrown."

Since we actually get only about one-eighth of our oil from Middle Eastern countries, why not just stop buying from them?

"Oil is a fungible global commodity. If we stopped buying oil from Saudi Arabia and the Gulf States, and made up the difference with more from Canada and other nations, the effect on the world oil price would be negligible. And switching our suppliers would not reduce our vulnerability in the event of a Middle East disruption.

"Imagine that the U.S. is not buying any of Saudi Arabia's oil and the Saudis, attacked by terrorists, have to stop selling oil altogether. Then other countries that depend on Saudi oil - Spain and France, say - will scramble to buy Nigerian oil to replace Saudi. The excess demand will push up the price of oil, not just in Nigeria, but also around the world. Indeed, even if the U.S. were completely supplied by its own domestic oil, the domestic price would still rise sharply in the event of a Saudi disruption because other oil importers would be desperate for our oil."

How should we think about energy security going forward?

"A sensible policy goal would be not independence, but diversification: a portfolio of energy technologies and global supplies that minimizes the economic and political risk of disruptions from any particular region or energy source.

"A diversification strategy can recognize that, even if supplies are precarious, the case for free trade in energy is just as strong as for any other commodity or economic activity. Energy independence, which could also be described as energy protectionism or isolationism, is a counterproductive goal. By limiting ourselves to only what we can make at home, we make ourselves poorer.

"If a desire to reduce greenhouse gas emissions motivates us to discourage oil consumption, we should avoid the temptation to provide specific subsidies to particular alternative approaches. A carbon tax, which would use the market to decide how and where to reduce greenhouse gas emissions most efficiently, would be preferable."

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One last segment on this general topic next week.

Brian Trumbore