WHAT MATTERS WEBLOG

Barack Obama, just sworn in as the 44th President of the United States of America, is facing a world of challenges like hardly any of his predecessors since Franklin D. Roosevelt. Long-term problems ranging from peak oil, global warming and a shift of power to less stable regions of this planet are being overshadowed by the effects of the global financial crisis. The entire world economy has become unstable and even one of the wealthiest nations in the world, Great Britain, a member state of the European Union could face bankruptcy. Britain has focused too much on the financial sector. The City of London prospered during the boom in the financial sector and the Channel Islands like Jersey, where numerous hedge funds, offshore trusts and private-equity firms are operating, just one hour by plane from London’s City Airport, helped to attract investments from potentates, conflict regions and corrupt government officials worldwide. Now with the crisis eroding the basis of Britain’s new-found wealth and exposing frauds, the British economy is on the verge of collapse.  The service sector, especially financial services and insurance, accounts for the largest part of GDP while manufacturing has been declining steadily in the past decades. The manufacturing sector lost its importance as formerly state-run noncompetitive companies failed. Consequently, the bulk of Britain’s income used to come from London’s financial district. However, since London is one of the world’s leading financial centers, the City and the entire country are overly exposed to the current crisis. The value of the British pound has taken a very serious beating. It’s to be seen whether the UK can afford it’s arrogant attitude towards the euro any longer.

Jersey, image by NASA

Of course, President Obama’s priority will be fixing the U.S. economy. Therefore, he plans to spend more than one trillion dollars to get the economy moving again. Next to tax cuts, a large share of the money from this gigantic stimulus package will be spent on energy and infrastructure projects.

Obama said that this would be the biggest government investment since the interstate highway system launched in the 1950s.

Obviously, multi-billion dollar investments into the power grid as well as in the maintenance of highways and bridges are long overdue. The drinking water system as well as waste water treatment systems need to be updated. On top of that, the telecommunications system also should be improved since American broadband services are simply too slow in comparison with Japan, Taiwan and numerous other countries.

EPA reports indicate that a few hundred billions of dollars will be needed just to do the absolutely necessary maintenance work and updates to the aging infrastructure which was built in the 1940s. Past U.S. governments simply ignored the problem while the water pipes under the streets have been rusting away. As you can see on www.watermainbreakclock.com there are more than 700 water main breaks on an average day in North America.

To no one’s surprise, the entire U.S. infrastructure is in need of a drastic overhaul. This however is an excellent opportunity in regard to the upcoming energy crisis. Europe is primarily dependent on oil and gas from Russia, the United States depend on fuel imports from OPEC countries - including Iran and Venezuela.

As can be seen on http://daily.sightline.org/daily_score/archive/2009/01/20/record-fuel-spending-in-2008, the U.S. states of Washington, Idaho and Oregon spent about $30 billion last year on fossil fuel imports from other parts of the world. These three states have a combined population of about 12 million which is about 3.96% of the U.S. population. Without paying too much attention to the different situations in other states, the entire United States must have spent at least 757 billion dollars on fossil fuel imports. Though some states like Alaska and Texas have domestic oil production and coal can be found in several areas, the energy consumption per capita is usually much higher in the Southeast and in other parts of the country than in Northwestern states.

The measures the Obama administration is about to take to spur the economy can lay the foundation for future growth if the money is spent wisely.

In fact, a kind of “Green New Deal” is exactly what America needs to overcome the current crisis and most important, find a new source of income. As Obama has mentioned many times, no one can afford spending more than he’s making in the long term. Neither can the United States. The out-of-hand trade deficit is one of the key threats to recovery. Imports may no longer exceed exports that significantly. Certainly, Americans will have to consume less and start saving. But more important and more intelligent is to boost the American export industry. The U.S. could really need an export hit, a new industry that is earning real money and creating millions of jobs. A new industry that can hardly be outsourced. It’s likely that energy technology will be exactly that industry that can create millions of jobs, generate enormous revenue, reduce greenhouse gas emissions, strengthen America’s position by reducing the dependence on oil imports and help to renew America’s reputation in the world.

I can assure everyone that the country that will be the leader in energy technology, in green tech, will have a powerful export sector since virtually all the world will need smart solutions to the energy challenge. The leader in energy technology will have a cleaner air, a better reputation and virtually no dependence on fossil fuel imports.

Just imagine what could be done if the 757 billion dollars that the U.S. spent on fossil fuel imports in 2008 were spent at home, on energy research, on intelligent and efficient technology, on smart power grids, on wind turbines, on solar panels, on geothermal energy projects, on efficiency improvement programs, on electric cars, on education… Every single dollar spent on oil imports is gone, leaving behind nothing but CO2, smog and unforeseeable consequences for the climate. Every single dollar spent on a U.S.-made electric car, on a solar panel, on a wind turbine, on  research, etc. is an investment with a high return.

During the campaign, Obama announced a plan to invest $150 billion in the next 10 years to advance bio fuels, renewable energy and clean coal power plants to create 5 million new jobs AND save the environment. A few months back, he said in a speech that he wants to “ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025“. Furthermore, he proposed to reduce oil imports by 35% until 2030.

More than ever in these turbulent economic times, massive investments into the renewable energy sector make sense and have significant positive implications for the larger economy.

To encourage more private investment into renewable energies, it’d be beneficial to guarantee that investments made will not be lost. Especially given the banks’ reluctance to lend money, I consider this step necessary and affordable.

To ensure the quick adaption of more sustainable, intelligent ways to run cars, heat homes and power electric gadgets, as much as possible should be done decentralized. President Obama might let states set their own pollution standards which former President Bush denied. (http://money.cnn.com/2009/01/29/news/economy/obama_fuel_efficiency/?postversion=2009012917) Decentralized energy generation based on renewable energy sources will likely play an important role. Thin-film solar cells can easily be integrated into the facades of skyscrapers, biomass and geothermal energy are especially suitable for rural areas. Thermal insulation helps to reduce the energy consumption of homes. This is a vision which I found on a website of the U.S. Department of Energy:

“By 2020, fuel cells will be intimately integrated in buildings, part of a flexible portfolio of options for meeting energy needs and/or supporting the grid.”

Stationary hydrogen fuel cells could replace oil-fired central heating. On the same site, I found what is the long-term objective of a shift towards green energy technologies: “a prosperous future where energy is clean, abundant, reliable, and affordable”

In addition, huge, modern, clean coal-fired power plants and nuclear energy will be needed to make sure that energy prices won’t get out of hand. On- and offshore wind farms also need to be part of the energy mix.

Since the supply of wind and solar power heavily depends on the weather conditions, we need technology to store the generated electricity when there’s an oversupply. Perfectly suitable for this purpose are electric cars with high-capacity lithium-ion batteries. Most electric cars will be recharged overnight when demand for electricity is generally lower than on the day. However, wind energy generation at night can be strong, so the excess electricity could be stored in the batteries of electric cars. Simultaneously, whenever there’s an oversupply of electricity, it could be used to break water molecules into hydrogen and oxygen. The hydrogen could be used to power hydrogen cars. Generally, there are two kinds of hydrogen-powered cars: In a car with a fuel cell, the hydrogen’s energy is converted into electricity which is used to power an electric motor. In contrast, in hydrogen vehicles without a fuel cell, the hydrogen is burned like gasoline in a combustion engine and the resulting mechanical energy pushes the pistons up and down to move the car.

To sum up, it’s perfectly clear that under President Obama, a large number of new jobs in the renewable energy sector will be created. In the President’s first weekly address from January 24th, he says that his program “will invest in our most important priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.” The shift towards a greener energy economy is not only a contribution to the efforts to limit the effects of global warming, but it’s also a strategic national security objective. The byproduct will be reliable economic growth, strong exports and well-paid jobs for people from all walks of life. Demand for clean energy technologies will be huge considering the fact that most notably China will need to embrace new technologies due to the enormous damage the country’s economic rise has done to its environment and the fact that China can’t import enough oil at affordable prices to enable its citizens to adopt an American lifestyle.

This entry was posted on Sunday, February 1st, 2009 at 12:21 AM and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.