Here's a new year's wish: less wishful thinking about energy.
Wishful thinking scrambles energy governance. Yet it's inevitable. Energy is too political ever to be immune from it.
But wishful thinking can be held in check. The challenge is great. It requires more than quaint efforts to "educate the public." It requires heroic struggle against virulent skepticism.
The energy industry, especially the oil and gas industry, especially in the US—the single largest energy market in the world—should make the effort. It can begin by suppressing its own wishful thinking.
Self-sufficiency
Appeals still issue from the industry and its supporters in politics for energy self-sufficiency in the US. It won't happen. The US needs too much energy. The energy is economically available in too much abundance in trade to justify sacrifice on behalf of energy self-sufficiency.
Related to the self-sufficiency theme are appeals for less reliance on a particular country or region for imported oil. The usual country is Saudi Arabia and the usual region, the Middle East.
Where oil imports are concerned, diversity of sourcing is good. It promotes competition and enhances security, both worthy goals. What matters most, however, is that oil be freely available in trade at market prices. For as far into the future as anyone can see, the Middle East, led by Saudi Arabia, will account for a commanding share of oil sold internationally. They possess the reserves, production capacity, and incentives to hold that position.
Dependency on Saudi Arabia and the Middle East is a fact of economic life for the US and for other major importers, no matter how much Saudi or Middle Eastern oil any one of them directly receives. The inescapable fact of general dependency on oil from abroad should influence policy-making more than dependency on oil from a particular place. A policy goal of importers who understand this should be to function as reliably as buyers as they need exporters to perform as suppliers.
Wishful thinking about where oil originates tends to come from people who support the oil and gas business on most issues. A different but more influential variety of wishful thinking comes from people who don't. It's the belief that industrial economies can work without burning hydrocarbons and incurring associated environmental costs.
The belief has scored policy successes such as subsidies for nonhydrocarbon fuels and mandates for their sales. Although measures like that force inefficiencies into economic systems, the costs so far are fairly low. Experience with the technologies and economics of solar energy, wind power, and other alternatives to fossil fuels is worth some sacrifice.
But the popular sense is strong—articulated recently in a nationally distributed essay by no less an energy expert than the actor Robert Redford—that the US can quit using oil and gas at acceptable cost. In this view, a combination of renewable energy and conservation can replace fluid hydrocarbons. It's only a matter of political will.
That's more than wishful thinking. It's dangerous fantasizing.
Energy supply from renewable sources will continue to grow. But it will at no time soon represent more than a small fraction of all energy consumed in the US—or in any other developed economy. Against even aggressive assumptions about renewable supply and conservation, consumption will remain overwhelming.
Wishful thinking about nonhydrocarbon energy must yield to thermodynamic as well as economic reality. Yet it continually gives rise to unrealistic hopes about, for example, automobiles powered by electricity. The appeal of electric vehicles is that they don't burn gasoline. Yet the electricity must come from somewhere, largely the burning of hydrocarbons.
Hydrogen hope
Hope is migrating—and not without justification—to hydrogen as a source of energy for transportation. But hydrogen doesn't come free. Its production, depending on the process, requires large inputs of electricity or hydrocarbon feedstock. So hydrocarbons don't disappear if cars in significant numbers come to be powered by hydrogen. They just shift position on the energy-conversion sequence.
With energy, people and governments do have choices. But they can't, as acts of political will, change the natural laws that govern energy use or the geologic history that determines where oil and gas occur. Expelling contradictory wishes from energy politics would be a triumph.