National Commentary

The Peak Oil Crisis: Capping Carbon

Seventeen years after the Kyoto Protocol was drafted, it appears that the U.S. is moving toward taking action to limit the nation’s emissions of greenhouse gases.

Last week, with White House blessing, the U.S. Environmental Protection Agency issued a preliminary decision that carbon-dioxide emissions from burning fossil fuels constitutes a danger to the public. The ruling was in response to an April 2007 Supreme Court decision that said the government could restrict the emission of heat-trapping gases under the Clean Air Act if it found them a danger to health and welfare.

The importance of this decision cannot be overstated for, as all sides are well aware, it has the potential to lead to major changes in the amount and cost of fossil fuel energy consumed in the United States. This week, the Congress began hearings on what is certain to be a lengthy and brutal struggle between those who believe that global warming is at least partially caused by carbon emissions and those who don’t. The battle lines are being drawn with climate scientists and their supporters talking of irreversible, earth-destroying “tipping points” and those opposed claiming the economy will be devastated with needless taxes and expenses.
Some are skeptical that, considering all the pressure industry lobbyists will bring to bear, meaningful legislation can be passed. There is already a movement underway to delay any new regulations until after the economy recovers. The problem, however, is that in the wake of the Supreme Court decision, the Obama administration now has the authority to regulate greenhouse gas emissions under the Clean Air Act without Congressional action. Given the choice between the legislative process and the Obama EPA, even the most ardent opponents of regulation would rather take their chances with the Congress where political pressures can be focused.

Another factor in the equation is the next UN climate conference that will take place in Copenhagen in December. If the world is to have any hope of convincing the Chinese that they must reduce emissions, the U.S. is going to have to show up with its own plan firmly in place.

The centerpiece of the 600-page bill the Democrats have introduced in Congress would restrict emissions by some 80 percent over the next 40 years using cap and trade for power plant and industrial emissions. Alternatives and objections to this approach are flying in all directions so it is far too early to tell what will come out of the legislative process – and when.

Our interest is just what the impact of these U.S. efforts to limit emissions will have on the peak oil crisis. The answer, of course, varies from major to minimal depending on the timing and provisions of any new regulations. For instance, any bill that does not take effect until after the current economic crisis is over, and robust economic growth resumes, would be meaningless. Similarly a bill that delays serious emission cuts for decades would be irrelevant.

There would seem to be two general approaches to cutting emissions. The simplest and cheapest would be to simply burn less fossil fuel. The American Council for an Energy-Efficient Economy says that electric power consumption could be reduced by 20-30 percent without any serious economic consequences. Further reductions are possible, with increasing costs and pain, but not necessarily civilization-ending. The reduction should be easy to implement through a combination of public education, and “excessive consumption” taxes. New taxes, however, would provoke a major political storm, given the state of the economy. That they would be avoidable by simply reducing consumption in accordance with national goals would unfortunately carry little weight. Lower consumption, however, might turn out to be the only feasible solution if the economic situation continues to worsen.

The other general approach would be an effort to remove and sequester the carbon and other harmful gases from the emissions of industrial facilities and increase the efficiency of fossil fuel burning equipment. The big disadvantage is that the technology for carbon sequestration and some other processes is still a ways off, and is likely to be very expensive to implement.

It appears as if the balance between global oil depletion and the faltering world economy will soon be joined by emission caps as yet another factor that will determine the availability, use and price of liquid and other fossil fuels in the years ahead. At present all we know for sure is that world oil production reached a peak last summer and has been dropping ever since as economic conditions cut the demand for liquid fuels. We know that investment in exploring for oil and developing new fields has dropped substantially making it likely prices will rebound higher should there be an economic recovery in the next few years.

Some foresee an economic rebound later this year, while others say that the global economy has been so badly damaged that an economic recovery will take a long, long time and is likely to be in a form that nobody expects or recognizes.

Just how emissions caps would fit into all this is impossible to say. If the global and more particularly the U.S. economies continue to contract, there simply may not be enough money to implement very expensive carbon sequestration programs or build cleaner cars in quantity. The demand for fossil fuels could even decline precipitously with the economic situation. A future Congress could decide that rationing fossil fuel consumption is the only feasible way to reduce carbon emissions without incurring unacceptable costs.

The climate scientists tell us the world needs to make substantial reductions in greenhouse gas emissions as soon as possible. Nevertheless, there is going to be heavy resistance from those who feel that restricting emissions will put them at an economic disadvantage – no matter how temporary. The pendulum is swinging, however; polling shows that some 75 percent of Americans now consider it to be a serious problem,
Over the next six months, the hearings, debates and votes in the Congress will tell us how far we have come.

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