Dec 17, 2007
In talk in Wilton: Expert says oil conservation cheapest 'new energy' around
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With gas prices skyrocketing and the words “clean energy” on the lips of many, Professor Kit Smith said while the world isn’t running out of oil, it certainly may be running low on the cheap version and the time to conserve is now.
“Conservation is clearly the cheapest form of new energy,” said Mr. Smith. He said while there had been some new discoveries of oil recently, such as eight billion barrels off the coast of Brazil, “this is difficult, expensive oil” to acquire because it is a mile underwater and three miles underground.
Mr. Smith is an adjunct professor at business school at the University of Connecticut’s Stamford campus. He has more than 38 years of experience in the investing world, much of that spent with General Electric. He spoke at the Wilton Library on Wednesday, Dec. 5.
But while the world is running out of cheap sources of oil, that hasn’t stopped 39.8% of the world’s energy from coming from petroleum, whereas 6.8% comes from renewable sources, he said.
Of those renewable sources, biomass, which is wood, garbage and other waste, makes up 48%, while hydro power makes up 42%. The rest of the renewable energy comes from geothermal, wind and solar, which comprises 5%, 4% and 1% of the renewable energy used respectively, he said.
The price of oil is influenced in part by geopolitical tensions, Mr. Smith said. He pointed to the fact that 61.7% of oil is located in the Middle East, controlled by many countries not viewed as allies of America.
Other countries, such as Venezuela and Nigeria, have internal problems that can at times make oil difficult to obtain, Mr. Smith said. Venezuela for its part invests much of its oil revenues in social programs rather than in reinvesting it in oil production, making it at times difficult to fully tap the nation’s oil resources. Nigeria, due to internal strife, at times sees disruption in its oil production, he said.
In addition, in Venezuela the oil is high in sulfur content, making it more difficult to refine.
The only nation Mr. Smith named as having the ability to produce more oil than it currently does is Saudi Arabia.
“They can flood the market, they can pull out of the market” and thus wield the most power of the countries in the Organization of the Petroleum Exporting Countries, or OPEC.
One of the diagrams he produced showed a wedge between American domestic production of oil and American consumption of oil.
“It just keeps growing,” said Mr. Smith, while stating that in a few years China will be the biggest consumer of oil.
Other sources
Beyond oil, Mr. Smith looked at several other forms of energy, such as nuclear, ethanol and clean energy sources. He said he did not believe nuclear energy was as vulnerable to terrorist threats as one might think and also saw some possibility for the expansion of nuclear power.
In talks with experts, “they all said a 747 could fly into a nuclear plant and not cause an explosion,” said Mr. Smith of the safety of nuclear energy.
He said ethanol was more inefficient than gasoline, as it gets 25-30% fewer miles to the gallon than gasoline, and was also under attack as a source of energy by livestock companies, food companies and third world countries. This is because 450 pounds of corn is needed to make 25 gallons of ethanol, he said.
Sources of clean energy, such as wind and solar, have seen some expansion, but still have a long way to go to reach the levels of other forms of energy, he said. The largest wind energy center in America produced two-thirds of the energy a nuclear plant produces, while taking up 69,000 acres, he said.
A total of 11,000 new photovoltaic cells were installed in 2007, indicating an increase in solar energy. He said solar makes the most economic sense for new construction because much of the cost of that form of power is in the installation. However, despite gains by clean energy sources, “coal, oil, natural gas will remain indispensable” for the future, he said.
In order to address the energy challenges of tomorrow, Mr. Smith advised moderating demand, diversifying the sources energy is derived from, strengthening energy security and addressing carbon restraints.
“There is no single, easy solution” to those issues, he said.
© Copyright 2008 by Hersam Acorn Newspapers
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