Alberta farmers are facing a shortage of diesel fuel at harvest time. Alberta’s energy minister says that he has asked refiners how they intend to prevent such shortages in the future, and that he looks forward to hearing their responses. Meanwhile, farmers wonder if new pipelines heading south to US refiners will mean even less fuel for them in the years ahead — “Oil capital of Canada? Give me a break!,” one farmer said.
Yahoo! News just featured a story about how American carmakers are reviving a trend that waned (for American buyers) in the 1980s: the diesel car. Yes, they’re more fuel-efficient, but the more diesel cars on the road, the greater the demand — demand that is already straining supplies in oil-producing regions where diesel powers drilling rig generators. Is biodiesel a good solution? Maybe, but I hope you’re prepared to pay more for the thousands of products that use soybeans, because there isn’t enough used cooking oil to power American’s personal vehicle fleet. http://autos.yahoo.com/news/diesel-comeback–model-tally-set-to-double-for-2014-184447278.html
Another acute diesel shortage has struck, this time in Malaysia. Government subsidies for the fuel have contributed to overuse and to black market hoarding, which drives up the price. The politically unpalatble solution would be to allow prices to rise to reflect diesel’s actual scarcity — a tough sell in a relatively poor and developing nation. The shortage has affected everything from supplies of palm oil to flight schedules in neighboring Singapore.
Last night, gas prices reached $8.88 in a medium-sized midwestern American city.
Actually, they didn’t. A new fueling station that is nearing its grand opening was testing its sign, and left it on overnight with this price posted. Already in Europe, the average cost for “petrol” or “benzene” is about midway between this price and the curren prevailing US price, after adjusting for currency and difffering standards of measure (in Europe, gasoline is sold by the liter). This is mostly due to taxation, but it also has to do with Europe’s greater dependence on increasingly expensive and unpredictable Mideast and African sources of oil and gas.
In the short term, North America is benefitting from a boom in natural gas and shale oil production. This has had major consequences for diesel prices in oil-producing regions and the states bordering them, driving them up, but for the most part it has kept average North American fuel prices down. What will happen when more of these newly-exploitable resources are depleted? When the increased pollution and social problems in oil-producing areas raise the cost of doing business? And why is this station not even bothering to sell diesel at this point, when its competitor across the street offers it at every pump?
I don’t have all the answers, but I do know two things: For various political and economic reasons, acute diesel shortages will persist worldwide. And overall prices for petroleum fuels are on the rise. $8.88 per gallon isn’t that far away for North Americans. Few want to contemplate this, but I’m afraid that it will be our reality sooner, rather than later.
My local post office has, by my count, fourteen of these in an area currently open to the public. There appear more beyond a fence where postal delivery trucks are kept. I believe the small delivery vehicles run on gasoline, while the larger trucks that haul items to and from the central processing facility downtown run on diesel.
Initially, I assumed that these electrical outlets were installed during the 1970s energy crisis in order to provide charging stations for electirc trucks. Actually, they were used to power heaters that helped make sure that diesel engines could turn over in cold weather.
But could they be used again by more modern plug-in hybrids? Could even larger trucks be hybridized to run on diesel/natural gas/electric? And could the financially strapped Postal Service make some extra cash by leasing these charger spaces out to neighborhood residents with hybrids, or to a company like Zipcar? These are all very interesting questions…
Artificially low prices tend to lead to shortages. Egypt’s government subsidises diesel fuel, made from crude that is imported from abroad. (Most of Egypt’s grain is imported, too — a stark contrast to ancient times, when it was a net grain exporter to hungry Rome.) Egypt is using its dwindling dollar reserves to pay for dwindling food imports from grain-exporting countries. What happens when grain stocks (currently around four months) and the cash run out? Will Egpyt be able to afford her current diesel subsidies?
She probably won’t — not without a gift of crude or refined product from a friendly Arab petroleum exporting country. But that would mean fewer barrels to sell to the rest of the world — at a higher price, to cover the cost of the donation. If you think that what happens in the rest of the world doesn’t matter to you, think again: we live in a globalized marketplace for crude oil and diesel.
The Wall Street Journal has announced that BNSF railroad, a significant portion of which is owned by Berkshire Hathaway president Warren Buffet. This is welcome news and is a small step toward alleviating the diesel shortage and helping to depress prices, but will it really make that much of a difference? According to the article, railroads only account for six percent of all diesel usage in the United States. Buffet’s railroad, while the second-largest single purchaser of diesel after the US Navy, still accounts for only a fraction of that six percent. Getting trucks to switch to diesel will be much costlier and will require much more infrastructure. But it’s a good start. Kudos to Burlington Northern Santa Fe for making it. BNSF Switching to natural gas
T. Boone Pickens has proposed converting America’s truck fleet to natural gas. Now Shell is taking a major step toward making this practicable in Canada and the USA. Natural gas prices are (temporarily) near historic lows, and diesel prices are near record highs, with acute shortages still being felt. Will this relieve the pressure? Natural gas will probably mean some compromises in power, but it burns much cleaner and it’s currently much cheaper. Will the majority of American trucks become diesel/natgas flex-fuel vehicles over the next decade, or is this just a fad?
Al Qaeda is on the move again, attacking a remote natural gas plant in Algeria in recent weeks and taking several hostages, some of whom are still missing. How long before they hit an oil facility? Recall that that Osama bin Laden’s goal, stated in 1998, was that the world oil price should be at least $144 per barrel. Ten years later, in 2008, his goal was acheived. Only the financial crisis that triple-digit oil preciptiated helped force the price back down (temporarily). It’s likely that bin Laden had less to do with it than geology and oil consumers’ addiction did. But political instability does make the problem worse. Bin Laden’s antagonization of the great, blundering powers of the Western world certainly helped constrain supplies: Iraq is still producing less oil than it did before the George W. Bush administration launched the Iraq War, and political infighting among increasingly autonomous Kurds and the central government is holding up oil flows. Sadaam Hussein would have just gassed the people in Northern Iraq — Kurds, Turkmen, or Arabs &madsh; who got in his way. Democratic governments don’t have this option.
Diesel shortages are still a problem in Egypt. Political freedom tends to lead to greater consumption of resources. Political instability tends to lead to stress on institutions, including the refining industry, that provide them. Egypt has gotten a dose of both in the last two years. Shortages are the inevitable result.
We’re all due for this, sooner, rather than later. The heaviest oil consumers in the world burned through their endowments decades ago. American conventional crude production peaked in the early 1970s. New discoveries in Alaska were too small to make up for the shortfall, and there is evidence that these are declining, too. All that’s left is in extremely environmentally sensitive areas that are also cold and extremely difficult to work in. There’s still plenty of unconventional petroleum, but the baseline price has to stay higher in order to cover production costs. As we transition from unconventional petroleum liquids to tight oil and petroleum solids, our oil will get increasingly expensive to extract and refine, increasingly dirty and stressful on our environment. We’re all going to have to learn to use less oil per capita, something Americans, with their libertarian leanings and sense of entitlement to endless economic growth, are going to have the hardest time coming to grips with.
Many optimistic Americans think that windpower (too intermittent), solar (same problem), coal (not as portable or energy dense), natural gas (cleaner to burn, but often polluting to extract and less energy dense and subject to the same depletion problems as oil), or nuclear energy will deliver us from having to make hard choices about re-orienting or transportation networks and economy to use less petroleum. Nuclear, especially, is the realm of techno-fantasists, and has been since the 1950s. “Too cheap to meter!” they proclaimed in the 1950s, as if any power company would ever neglect to somehow meter and charge you for the electricity you use &madsh; and besides, the infrstructure needed to deliver that power still costs something. Now that uranium and plutonium have proved to be so toxic and the waste so difficult to dispose of, and are in increasingly short supply, the sci fi fanboys and girls have moved on to thorium energy. Thorium is more abundant. It’s less dangerously radioactive outside of a nuclear reactor. It’s also pyrophoric — which in layman’s terms means it can easily start a huge, extremely powerful fire. For that reason alone, the costs of transporting it are likely to be as high or higher than conventional nuclear fuels. And once in a reactor, thorium produces radon-220 and uranim-232 as waste products. Radon 220 is a toxic gas that is difficult to control, and U-232 is one of the most dangerous isotopes of uranium. Stable isotopes of plutonium can be safely handled in a glove box for several minutes with only light shielding. U-232 is so nasty that one of its few positive side effects is that even slight contamination of a mass of U-233 being used by a terrorist making his own nuclear bomb could kill him before he finished. That’s right, thorium fanboys: Your pet power generation method discharges stuff that even nuclear suicide bombers are scared of. And even if you could produce cheap, abundant thorium energy, where are you going to get all the lithium and rare earth metals that we’d need for all of our purely electric cars? And what would you use to grease the axles? Do I even want to know? Ditto for the hubs of windmills, or anything else we can think of trying. Even my bicycle uses oil, and while I’ve substituted linseed oil for some applications, I still need petroleum-based oil for the hub and grease for the bearings.
So what else can we do? It’s simple: ride bicycles more, ride trains, and wear sweaters, just like our grandparents did. It wasn’t such a bad life. Drive a roadster around on Sundays if we can afford the payments and the gasoline. We’ll all probably have to pay more in taxes and share more things communally. Privacy, like air travel, will become more of a luxury — you might have to share a sleeper car with a bunkmate, and shower in a stall like I did in my dormitory before they revamped it into private apartments. But let’s face it: we’ve already destroyed privacy with Facebook and other sites. When we have less choice in the matter, maybe we’ll all learn to value privacy again, what little we have left.
But this isn’t like joining AA. We can’t just give up oil completely and go cold turkey. We’re stuck with it. We just can’t take it for granted. We need to appreciate its infinity of uses and great energy density the way Native Americans used do with the large game animals that fed and clothed them and fueled their fires. And we’re going to have to make painful choices about rationing and about drilling in what little pristine wilderness and deep ocean space we have left. He’s a glimpse of what it’s likely to be like:
Most of the recent diesel shortages worldwide have been caused by sharp spikes in demand caused by additional diesel-powered vehicles hitting the road in China, or new oil wells coming online in the Baaken Shale in the United States. Others have been caused by supply disruptions, like refinery failures or closures in the UK and Australia.
In Syria, rebels are fighting President Bashar al-Assad and Assad is fighting back by bombing both military and civilian targets. Caught in the crossfire is Syria’s fragile fuel infrastructure. Unreliable supplies lead to hoarding, which leads to further shortages and hoarding. Transit of refined fuel from neighboring countries is greatly reduced, and more expensive to conduct.
This situation is entirely political: years of Assad’s repression are finally being met with open, violent resistance — and further repression. The choices were entirely political. Yet one wonders: what political (and military) choices will be made in other countries that depend on diesel fuel when diesel becomes more difficult to get? When enough trucks are sidelined, will people start resorting to violence to get the diesel that they need? And will those who still have it respond in kind? What will the government do?
Hopefully it will never get to that point. But we all need to be smarter about how we use diesel, and begin to seriously consider alternatives.