The Winter/Spring of 2011 will go down in history for two major events. Both of them will end up having a huge impact on how Americans view energy sources in the future. I’m referring, of course, to the latest round of unrest in the Middle East and to the earthquake, tsunami and subsequent nuclear power plant crisis in Japan.
I’ll discuss the Middle East first. So far, authoritarian regimes in two non-oil exporting states in the region have been overthrown and replaced by transition governments pledging to oversee a move to a more democratic and open regime. It remains to be seen what will happen in Yemen, another non-oil exporting state, as it teeters on the brink of failed state status. The regimes in the oil exporting states seem to all be willing to use massive amounts of force against any demonstrators. Libya’s Qaddafi seems poised to reconquer the eastern provinces of that country. The Saudis have already cracked down on their own population and are in the midst of a crackdown on Bahrain’s population. The unrest itself is making oil prices spike in the short run. If this period of unrest becomes a longer term problem of continued instability (a fairly likely outcome if you ask me), then we can expect periodic disruptions to the oil supply from the Middle East. There is a lot of talk about the Straights of Hormuz being a choke point for oil exports from the Persian Gulf states. But Gulf of Aden (between Yemen and Somalia) is just as important. If Yemen becomes a full fledged failed state, that water way would become even more plagued by piracy than it already is. This could force oil tankers on their way to the US and Europe to run a gauntlet of pirates and political instability all the way from Basra to the Suez Canal. I doubt this would lead to a cutting of the oil supply lines but it would make it more costly to transport the stuff and I have every confidence that the Big Oil companies would figure out how to pass those additional costs onto consumers. Rising and consistently high oil prices will increase political support for any alternative to imported oil. The Republicans will try to make this into a justification for “drill baby drill” but we all know that domestic oil reserves are simply incapable of making a dent in the price let alone significantly reducing our dependence on imported oil. In the final analysis, the only alternative to imported oil is something other than oil. It might mean a shift to natural gas but even that will need to be largely imported. That means that a long term solution to our energy needs will have to depend on some combination of wind power, solar power, biofuels, hydroelectric and nuclear energy which leads us to …
The tragic situation in Japan. The Fukushima plant seems on the verge of a meltdown. US authorities are openly second guessing the reserved reports from the Japanese. I’ve seen comments from US experts to the effect that the Japanese should just give up on saving any of the plant at all and get to work on a cement “sarcophagus” to entomb the ruined and toxic fuel rods as soon as possible. This is part and parcel with an ongoing drum beat in the US news media that is largely serving to spread the idea that the situation in Japan proves that nuclear power is fundamentally unsafe. I’m no physicist but it seems to me that much of this criticism of nuclear energy as a hole is exaggerated and unjustified (perhaps Dr. Strangelove would care to elaborate on these issues in the comments). Certainly putting nuclear power plants in earthquake and tsunami prone areas is a bad idea but if the Fukushima plant had been in the American Midwest and suffered a direct hit from an F5 tornado, I doubt we’d be talking about a meltdown. In any case, this is largely irrelevant in the short term because the political environment for nuclear power just got A LOT worse in the US.
All this adds up to a potential “I told you so” moment for President Obama. A key part of Obama’s agenda has long been investment in future technologies, especially alternative energy and infrastructure upgrades such as “smart grid” technology. In 2009, Republicans often scoffed that it was a waste of money and their criticism often stuck in people’s minds because oil prices were temporarily low due to the global recession. But now, with oil prices rising again, investments in anything but oil are looking like a pretty smart thing to have advocated. The Republicans will be left to criticize Obama for agreeing with them that nuclear power should be part of the future mix and renewing their chant of “drill baby drill.” But both of these Republican strategies have no real substance behind them. On nuclear power, Obama has two obvious ways out of the Republican accusations. First, he can say Republicans are even bigger fans of nuclear energy than he ever was. Second, he can offer a reasonable sounding compromise by reviewing any nuclear power plant in an earthquake zone and dare the Republicans to demand an outright moratorium on nuclear energy. On “drill baby drill” Obama also has two obvious responses. First, the BP oil spill in the gulf was not only a traumatic demonstration of the dangers of unrestricted oil drilling in the US, it made for good TV making it ready made for political ads in 2012. After all of that all that is left if Obama’s original agenda of increased government support for research in alternative energy technology and infrastructure upgrades. It should be clear to any thinking person that sooner rather than later, our country will not be nearly as dependent on fossil fuel technologies as it is today. We have a choice, not between the status quo and a fossil fuel free future but between a future of our own making or one that we will have to buy from China. Obama is 100% right to push hard to invest in alternative energy sources and he should use the events of this winter to underscore his advantage on the issue.