Oil Peak Facts and Policies Energy Policy Gary

Oil Peak, Facts and Policies Energy Policy Gary Flomenhoft, Fellow Gund Institute Lecturer, Community and Intl. Development http: //www. uvm. edu/giee

Work Done in the U. S. Economy, 1850 -1970 Labor Domesticated Animals Fuel

Composition of U. S. Energy Use Percent of total energy use 100 75 coal wood oil 50 gas 25 animal feed electricity 0 1800 1825 1850 1875 1900 1925 1950 1975 2000

WORLD ENERGY 2004

Net Energy

Hubbert Oil Cycle Marion King (MK) Hubbert

The Epoch of Fossil Fuel Exploitation Trillion kwh per year (after Hubbert, 1969) 300 200 100 -5 Stonehenge Built -4 -3 -1 -2 0 Mayan culture Steam Parthenon Engine completed Pyramids Iron in constructed Black Middle Death East Inquisition Magellan's Circumnavigation +1 +2 +3 +4 +5

US Oil Extraction

World Oil Extraction

Oil Reserves

US Oil Extraction

World Oil Extraction

World Oil Extraction

Source: Boyle, et al, Oxford Press

Oil consumption by area

OIL AND GAS LIQUIDS ASPO Scenario

World Oil Extraction

World Oil Flows

Oil Producers: 98 countries www. lastoilshock. com

Oil Producers: 64 from 98 in decline, 60 terminally www. lastoilshock. com

Oil Watch Monthly: October 2007 http: //www. theoildrum. com/node/3087

Business As Usual-EIA

Business As Usual-EIA

1960 -1980 Predictions

1975 -1983 Predictions

Real Price of Oil 1869 -2007

$145 $56. 34 May 18, 09

World Oil Extraction

Dumped Gas Hogs 1974 Lincoln~8 mpg 1974 Corolla~30 mpg

1980’s 2 nd Wave of EVs Jet Industries: Citi-Car (Beaumont) Electricar Lectra “Better batteries 10 years away”

WORLD ENERGY

(61% FF=8. 8%FF) 8. 8+1. 6+1= 11. 4% Fossil Fuels

How VT Heats 86% Fossil Fuels

How People Move-USEIA

Gas Hog Tax Credit Hummer H 1 Sticker price $106, 185 Current law Equipment deduction $25, 000 Total tax deduction* $60, 722 Bush economic plan Equipment deduction $75, 000 Total tax deduction* $88, 722 * Includes bonus tax write-off enacted by Congress in March 2002 and a deduction for normal depreciation. Sources: Detroit News research, IRS, Taxpayers for Common Sense

Source: EPA

Policy Recommendations: Guidelines 1. Eliminate perverse incentives-make money! 2. Provide positive incentives-account for externalities. ie: putting a price on carbonmake money or revenue neutral. 3. Regulate (higher mpg) 3. Spend money The playing field is NOT level. Fossil Fuels have 100 years of subsidies, ignoring external costs, and a huge lobby in DC. Don’t expect the “free market” to take care of it.

WHAT TO DO? Reactive or Pro-active? WHAT DON’T WE HAVE? • Oil-zero • Coal-zero • Nat Gas-not much (landfills) Why promote consumption of something we don’t have? * Conduct an audit of perverse incentives promoting FF use. Eliminate perverse incentives.

WHAT TO DO? DEALING WITH PEAK OIL IS GOOD FOR • Climate Change • Vermont Economy • Should do it anyway

WHAT TO DO? Provide incentives Ex: Germany Policies, Market-based Instruments: 1. 1999 Tax & Rebate on Fuel (tax cut): Diesel/gasoline $1. 79 -2. 48/gallon Funds rebated to payroll taxes-89%, efficiency, and RE 2. 2005 Cap/trade for CO 2 -powerplants and industrial heat 3. 1991 Feed-in Tariffs: Wind=$. 1149, PV=$. 6385, hydro=$. 1055, biogas=$. 1551 • No costs to government Results: • PV Industry: 2715 MW installed, 52% of world total, 40, 000 employed (US has 360 MW installed or 13% of Germany) • Wind Industry: 22, 247 MW, 28% of world total, 82, 000 employed (United States 16, 818 MW) • Biomass sector 95, 400 employed Total: 217, 000 employees in RE ~107, 000 FF & nuclear

WHAT TO DO? Reactive or Pro-active? WHAT DO WE HAVE TO WORK WITH? • Trees • Farms • Cows • Land • Wind • Sun • Big and Small Hydro • Smart People • Indigenous Energy Industry • Entrepreneurs

WHAT TO DO? Electricity • VT Yankee = 550 MW CT River Dams-567 MW. • Dams = $160 Million/year revenue. • Buy the dams. Use eminent domain if necessary • Fast-track small hydro-up to 400 MW • Approve more wind farms • More Wood chip plants • Etc.

WHAT TO DO? Heat • All-fuels efficiency/ weatherization • District heating and co-generation • Biodiesel heating fuel • Wood and wood chip/pellet heating • Building codes requiring passive solar, thermal mass, window insulation, Solar hot water • Wood stoves • High Performance Schools Energy Program • Cap/dividend on carbon-heating fuel

WHAT TO DO? Transportation • Hybrids • Plug-in hybrids • Electric vehicles • Alternative fuels, ethanol, methanol (flex-fuel), biodiesel • Trains • Public transit-Jitneys • Bike/pedestrian paths • Tax/rebate on fuels • Cap/dividend on carbon-vehicles

WHAT TO DO? Agriculture • Don’t turn food into fuel • Biodiesel: waste oil, algae, non-food crops Methane digesters: “Cow-power”

Crisis or Opportunity We will shift from Fossil Fuels. Will we be Pro-active or reactive? It’s up to you.