Cutting down trees for biofuels?

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Lynne Kiesling

Cutting down trees to generate biofuels to substitute for fossil fuels can’t make sense in terms of carbon accounting, can it? I never thought so, but apparently some people have contended that it does. This Project Syndicate essay from Bjorn Lomborg addresses the question, and I think it’s worthy of consideration not just because I think his argument is persuasive (which may reflect the quality of the argument or my confirmation bias, take your pick), but also because he provides several links to published papers that suggest that such strategies may actually increase GHG concentrations.

His point is more important and more subtle, though. What happens when deliberate cultivation of biomass crops changes the land use and moves agricultural production to other plots of land?

But the biggest problem is that biomass production simply pushes other agricultural production elsewhere. Studies are just beginning to estimate the impact. In Denmark, a group of researchers estimated by how much various energy crops would reduce CO2 emissions. For example, burning a hectare of harvested willow on a field previously used for barley (the typical marginal crop in Denmark) prevents 30 tons of CO2 annually when replacing coal. This is the amount that proud green-energy producers will showcase when switching to biomass.

But burning the willow releases 22 tons of CO2. Of course, all of that CO2 was soaked up from the atmosphere the year before; but, had we just left the barley where it was, it, too, would have soaked up quite a bit, lowering the reduction relative to coal to 20 tons. And, in a market system, almost all of the barley production simply moves to a previously unfarmed area. Clearing the existing biomass there emits an extra 16 tons of CO2 per year on average (and this is likely an underestimate).

So, instead of saving 30 tons, we save four tons at most. And this is the best-case scenario. Of the 12 production modes analyzed, two would reduce annual CO2 emissions by only two tons, while the other ten actually increase total emissions – up to 14 tons per year.

Rather than displace agricultural production (with all of the attendant distortions in other markets that would arise), I tend to think about doing research in and exploring technologies for biomass waste recycling. Things like anaerobic digesters to process dairy waste and use it to generate electricity. In that case you are generating two benefits — electricity for consumption and waste management — so the combined value of those two benefits may make a more costly technology economical. Here are some suggestive numbers about that net benefit from Wisconsin, although I caution putting too much credence in them.

“The U.S. Current Natural Gas Situation”

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Michael Giberson

What do changes in the domestic U.S. natural gas market have to tell us about the world oil market? Hirsch, Bezdek, and Wendling wrote, “The North American natural gas situation provides some useful lessons relevant to the peaking of conventional world oil production.”

Here is their assessment of the North American natural gas situation:

U.S. natural gas demand is increasing; North American natural gas production is declining or poised for decline as indicated in references 53, 54, and 55. The planned U.S. expansion of LNG imports is experiencing delays. U.S. natural gas supply shows every sign of deteriorating significantly before mitigation provides an adequate supply of low cost natural gas. Because of the time required to make major changes in the U.S. natural gas infrastructure and marketplace, forecasts of a decade of high prices and shortages are credible.

Hirsch, Bezdek, and Wendling, “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management,” (2005) p. 36. (Commonly referred to as the “Hirsch Report.” References 53, 54, and 55 are the US EIA Annual Energy Outlook 2000, a 2004 CERA report on gas supplies, and an Oil and Gas Journal article also from 2004.)

US EIA,

US EIA, “Projected natural gas prices depend on shale gas resource economics,” Today in Energy, August 27, 2012.

Indeed, forecasts of a decade of high gas prices were credible, as many energy experts agreed. But as it has turned out about a year after the report was published U.S. natural gas production began a period of sustained growth, and high gas prices lasted only about 3 years. The planned expansion of LNG imports has turned into a pressing desire to export North American natural gas to Europe and Asia. As of May 17, 2013, two export licenses have been approved and 19 more applications are under review at the US DOE.

Makes me wonder what Hirsch, Bezdek, and Wendling think about the peaking of world oil production now. One clue, from 2010, suggests they no longer draw analogies from the North American gas market when discussion world oil production.

Friday Music Fun: Radar vs. Wolf

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Lynne Kiesling

Some Friday fun listening from Nashville-based Radar vs. Wolf, a video from their debut album!

Radar vs. Wolf singer/songwriter James Bratton recently wrote a post on Bleeding Heart Libertarians articulating his particular take on political philosophy, and it’s a take I find congenial. Especially this part:

Why would I give them the legal power to regulate my whole life? And why would I claim for myself the power to regulate anyone else’s life?

… F.A. Hayek referred to such a mindset as “the pretense of knowledge.”

It is insanity for one person to put this kind of trust in another man or group of men, especially men who believe we exist solely in order to serve the “greater good.” Public choice theory and history have shown that “benevolent” men set above others are subject to the same faults and selfishness as the rest of us, regardless of the good intentions with which their offices were created.

That’s a pretty succinct articulation of my belief.

Happy Friday!

Course video 3: David Ricardo on rent and on trade

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Lynne Kiesling

David Ricardo: Principles of Political Economy & Taxation from Lynne Kiesling on Vimeo.

You may know David Ricardo for his pioneering analysis of comparative advantage as the foundation of mutually beneficial specialization and trade. Ricardo’s work goes farther and deeper than that, exploring (among other things) the determinants of rent accruing to fixed inputs like land, the distribution of income among landowners and labor, and the effects of taxation. Ricardo’s excellent analyses arise from his economic context of trade blockades during the Napoleonic Wars, and the ensuing Corn Laws that Parliament passed to block the importation of inexpensive grain to compete against those politically powerful landowners.

Course video 2: Adam Smith’s Wealth of Nations

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Lynne Kiesling

Here’s the second video for my history of economic thought course: a synopsis of Adam Smith’s Inquiry Concerning the Nature and Causes of the Wealth of Nations. The video gives an overview of the entire work (except for Book III, his stage theory of history), and I hope it entices you to read some or all of it for yourself!

Adam Smith: An Inquiry Concerning the Nature and Causes of the Wealth of Nations from Lynne Kiesling on Vimeo.

How cool WAS that? Not that cool, it turns out.

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Michael Giberson

While digging through the KP archives looking for another old story, I can across a 10-year old post titled “How cool is this?“

(Let me warn you now that there isn’t much more to this 2013 post other than to observe that not every cool-sounding technology in 2002 turned out to work. You already know that; you can stop reading now. -MG)

What seemed pretty cool at the time was a new bladeless turbine that the inventor said would drastically reduce costs in a number of applications. The Hydrogen Renewable Energy Enterprise, LLC in Hawaii was reportedly very excited about the possibilities and signed up to be the exclusive seller of the technology.

Since I hadn’t noticed bladeless turbines taking over the world, I wondered what became of the technology. Unfortunately, other than a bunch of press release inspired news reports from about 10 years ago, not a lot of information is findable online about Hawaii-based The Hydrogen Renewable Energy Enterprise, LLC.

Utah-based International Automated Systems, Inc. (IAUS), developer of the bladeless turbine technology appears to be still around. In addition to the bladeless turbine, the company has developed products including a automated self-checkout retail system and a fingerprint identification system. The newest technology seems to be a solar energy thermal system which can be used with the bladeless turbine. The company website lauds its solar technology as “Years Ahead of Schedule” and costing less than “the World Government’s goal for solar power cost per kilowatt by the year 2020.”

In June 2009 Renewable Energy Development Corporation contracted with Needles, California to supply the town with solar power based on the IAUS technology. In an interview published in November of 2009, REDCO owner Ryan Davies touted the IAUS technology, saying, “All of our engineering reports and research data indicate that this technology will be significantly more efficient than PV. We’re quite excited about it.” A year later REDCO was pleading with Needles to boost the $128 per MW price in the contract after REDCO “discovered … fatal flaws in the technology they were going to use. Those flaws included cost and efficiency issues.” In 2012 REDCO filed for bankruptcy.

Neldon Johnson, President and CEO of IAUS, is quoted as saying he thinks the technology would have worked, had Davies and REDCO attracted enough investment. Maybe, but IAUS has apparently attracted a detractor online who has collected information about the company: See http://www.iausenergy.com, particularly the page http://iausenergy.com/NewsHistory/index.html, and don’t miss the website’s collection of photos from the IAUS solar pilot plant west of Delta, UT.

That’s about it. No real surprises.

 

Course video 1: Smith’s Theory of Moral Sentiments

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Lynne Kiesling

For the past few months I’ve been working with some talented and creative folks at Northwestern University Academic Technologies to produce some videos for use in my History of Economic Thought course. Over the next few weeks I’ll be releasing them here, and they will be available on my Vimeo page. Please distribute them widely (they have Creative Commons attribution + non-commercial licensing)! Please also leave comments, questions, suggestions, related readings, etc. so we can extend the learning environment far and wide.

Adam Smith: Theory of Moral Sentiments from Lynne Kiesling on Vimeo.

In The Theory of Moral Sentiments, Adam Smith asserts that humans have an innate interest in the fortunes of other people and desire for sympathy with others. Humans are complex individuals in Smith’s theory – rightly motivated by self-interest, but also by the innate sociability and desire for sympathy from and with others that he observed empirically. Sympathy, which Smith defined broadly as fellow-feeling with the situations (not just the emotions) of others, forms the foundation of our moral judgment.

I’m intrigued by Smith’s concept of sympathy. Smith’s model of sympathy is a process of coordination between the self and others. The Smithian sympathetic process has three essential characteristics: sympathy as a synthesis of empathy with judgment based on reason, a spectatorial/external perspective on one’s own behavior and the behavior of others, and an innate capacity for imagination that enables individuals to place themselves in the situations of others. This sympathetic process leads to coordination of expressions and actions across individuals, resulting in harmony and social order. That’s an important sense in which TMS forms the philosophical and psychological foundations of Smith’s later works, especially the Wealth of Nations.

Another subject in TMS that undergirds WON and later work in economics is Smith’s discussion of justice and beneficence. Smith argues that (commutative, or negative) justice is necessary in order to have a peaceable and productive society, while beneficence is nice but not essential. From this argument he concludes that provision for the enforcement of commutative justice is a proper role of government, an argument he will pick up in Book V of WON.

I discuss both of these subjects in the video.