Facing the future

 

I'm really not much on doomsday scenarios.

Having been born and reared in Dallas, Texas - and living through the death of John F. Kennedy - I've heard enough conspiracy theories to last a lifetime.

I'm also not a prophet "nor the son of a prophet" (ref.: Amos 7:14), so I claim no prognosticative abilities.

So, why should I tend to side with those who are concerned that "Peak Oil" is now here with us (or, even worse, that we're already on the downward slope)?

Perhaps because it's logical to assume a finite resource can eventually be exhausted (or so nearly so that its economic use is no longer possible).

Right now, my biggest worry is not the literal end of oil, but the end of "easy oil" - the point where most of the world's known petroleum reserves will have given up their (relatively) simple to obtain and inexpensive to process, high quality, light sweet crude oil. You know; the good stuff.

What will remain, for the most part, is an estimated three trillion barrels of heavy oil, which, at current consumption levels, might last the world another century.

Granted, Rice University's chief of the Energy Forum in Houston, Amy Myers Jaffe (for whom I have a great deal of respect), tends to see this as a ray of hope. Quoted in today's Wall Street Journal, she said that "when people talk about how we're 'running out of oil,' they're not counting the heavy oil." She emphasised the "huge amount of resource" remaining, and is convinced that "it's just a question of developing the technology" to get it. And, I might add, to do so economically.

Unfortunately, that's the rub. This molasses-styled goop is not easy to collect, nor is it easy to process. In fact, based upon our current abilities, we'll be able to recover only about 400 billion barrels (of that three trillion total) for less energy than it takes to acquire and refine the raw material. Beyond that point, we'd be (shall I say) permanently "out of gas." Our resource will have become a "sink." Frustrating, to be sure; but, the first law of thermodynamics is fairly unforgiving.

This is one reason why several of the middle eastern nations, led by Saudi Arabia and Kuwait, are now experimenting with various technologies, including steam injection, to enable profitable extraction of the heavy crude. Of course, steam production requires two main ingredients: fuel (which is already an isssue, or we wouldn't be fretting about our sources of petroleum) and water (which, in case anyone's forgotten, isn't very abundant in desert settings!). To be sure, the Persian Gulf is full of water, but it's pretty salty - and to prepare it for use in a boiler will take (wait for it...) additional ENERGY!

(sigh)

In the meantime, global oil consumption jumped almost 3% last year, primarily due to increasing demands from China and India.

This is the future we need to face, soberly and with steely determination.

Surely, it all seems a bit overwhelming; however, railroad technology can offer some solace. Trains should certainly play a central role when developing tomorrow's plans.

Ours is a technology that deserves its reputation for energy efficiency. If it was possible to replace 10% of all personal, non-commutation motor vehicle trips with rail-based passenger service (of every stripe) and 10% of existing interstate truck traffic with intermodal freight trains, we could theoretically save in the neighbourhood of 400 million barrels of oil every year - the approximate amount we import from Saudi Arabia (our second largest source).

Naturally, dumping any sizeable number of passenger miles onto the existing national network would completely overwhelm it. In the same way, there isn't enough room on the freight side for such a traffic influx. Therefore, it would take a concerted effort, including a serious financial investment, to make a real dent in roadway traffic levels.

If that investment is based upon government policy (either proactive or reactive), then public money should be involved. That's because our railroads are in business to earn a profit. If they can remain profitable given the current set of circumstances, then any change in their operational realities should either be based upon sound economic principals or include adequate capital from the public coffers.

Many question the cost; but, to me, the ultimate question is not one of affordability. After all, even if money was no object, it wouldn't make sense to expand the system - either with conventional, dual-purpose (freight and passenger) infrastructure or with dedicated, high-speed, passenger only lines (or both!) - if such an expansion failed to accomplish its stated goals. On the other hand, if - based upon LOGIC and REASON (in the political arena?!) - our national aspiration was to make railway alternatives honest-to-goodness players, perhaps something along the 10% figure previously mentioned, then it should be relatively easy to isolate adequate sources of funding.

If things like energy efficiency and environmental stewardship are real issues, we have a responsibility to seriously consider public investment to address them - beyond throwing Amtrak a few bones here and there and designing transit systems in a vacuum. If those things amount to little more than warm, fuzzy, feel-good sound bites, then we need to grow up (for once!) and give it all a rest!

We can ignore the facts and just hope all our problems go away. We can adopt the attitude of those whom columnist Paul Krugman decries: people who are willing to deny responsibility and "eat the future." We can continue looking toward the recent past for our answers. We can refuse to think...or at least refuse to think beyond the next quarter or the next election cycle.

I'd rather face the future knowing I did everything in my power to adequately prepare for it.

 

 
  • Well, Garl, you've gone and done it again.  You make sense, and along the way, you undoubtedly have pissed off the tea party adherents who apparently believe there is such a thing as a free lunch.  The want everything a modern progressive society has to offer as long as they don't have to be progressive themselves or have to pay for it.  I fear the situation will have to get considerably more dire before the know-nothing ideologues in Congress will do anything meaningful about U.S. energy policy.  Keep up the good work.  If enough of us hammer these people enough times, we just might penetrate their thick skulls.

    Government will be forced to take an active role for the simple reason that if it doesn't we have no certainty that what results as energy policy will really serve our society well.  

  • Garl,

    I too thoroughly enjoyed this piece.  We, as an industry, are clearly not doing enough to educate taxpayers.  I have relatives who regurgitate some of the rhetoric they hear on the most conservative "news" channels.  It borders on brainwashing.

  • Railroads effectively stopped communicating or telling their story to the public at large when they exited the passenger business.  It was felt then, and continues to be believed today, that the best communication effort was directly to rail freight customers.  Railroads today increasingly are involved with the public at large, as the grants for public-private partnerships show.  Consider this comment one vote cast for the railroad industry to take a new look at its communications strategy and tactics.

  • Garl...

    Excellent comments; focused, concise and real. Wish our public and private sector leaders had enough curiosity (and perhaps some good luck) to find thoughts and ideas like these instead of only the information their "staffers" and favorite talking heads consistently feed to them.

    The historical and ongoing "AMTRAK" debate seems to be stuck in the "public vs private spending" groove. That may be a little like continuing the debate of whether whale bones or steel make better corset stays. If the ladies aren't buying either one, seems like a moot point.

    Regardless of how we got from way back then to now, seems like the real debate is where to go from now to some point in the future. Developing a successful rail passenger system that addresses all the issues you mentioned and actually provides travelers with a good experience and helps promote commercial development will mandate spending from BOTH sectors. The private sector, including the Class 1's, needs to find true economic reasons to partcipate and invest.

    From my point of view, the government's role is not neccessarily to sustain and protect AMTRAK indefinitely but to create the conditions where the private sector will see opportunity and make the investments needed to partcipate and compete. I don't like riding on airplanes any more but I like the idea that publicly constructed airports and runways and public safety and traffic control rules provide a platform where the airlines can offer services and compete for business.

    My best guess is that if "government" can find a balance between encouragement and opportunity to industry while protecting public values, passenger rail will take off. If not, the spending debate over AMTRAK will just continue.

  • This is the resurrection of a four-month-old series of comments.  Since Garl posted his original essay about the only thing that has changed is that our federal government has become even more dysfunctional that it was in May.

    As for Garl's original essay, I am satisfied that the world will eventually run out of oil.  If it has not settled on a new/different form of energy, well, then it's going to be a cold, dark planet, won't it?  Actually, I'm more sanguine.  The seismologists and others who do such things seem to be finding new oil fields and not just those with expensive heavy crude.  So the day of reckoning is being pushed back constantly.  But it will come, none the less.  We do have to deal with the obstinately stupid among us who refuse to even acknowledge that human activity is changing the climate (one can make an effective argument that the disastrous wild fires in Texas have been made worse by the drought that has afflicted Texas.  

    As for the idea that government might create the environment where private investment would involve itself with passenger rail, I won't be holding my breath waiting for that and I advise all PR blog readers/participants to not hold their breath either.  Passenger rail service does not pay its way anywhere in the world.  In some places it does cover above the rail (avoidable cost) expenses from passenger revenue, but noplace does it cover fixed and variable cost.  And I know of no investors who will risk their capital on a line of business that simply cannot earn a real profit.  This is a bit of alchemy in which Rep. Mica (R-FL), chairman of the House T&I Committee likes to engage.  If any of you get the opportunity, ask him how much of his money he's investing in rail passenger service.  He talks about his love of rail, but his actions are simply 180 degrees off.  

    As for government involvement in other forms of transportation, I wait skeptically for the day when Congress (Mica, again) asks the trucking industry to pay its allocable share of the cost of building and maintaining highways that the public provides them, or that airlines pay the full cost of the airports the cities and regional authorities provide them.