Energy

Master Resource Reprises My Takedown of the National Academy of Sciences' Energy Projections

How is America's Energy Future looking nine years after I first panned it? Not so good.

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Andrey Popov/Dreamstime

Master Resource, the pro-market energy blog, has just published an item that revives and recaps a Reason piece I wrote back in 2009. My article took apart two studies by the National Academy of Sciences (NAS) that purported to project the next 30 years U.S. energy production and consumption. I know it's bit geeky, but I confess it's one of my all-time favorite articles.

So how are the NAS's projections looking nine years later? In many respects, not so good. For example, U.S. annual natural gas production was projected to rise from 19 trillion cubic feet in 2007 to 20 trillion cubic feet in 2020. Actual production for the 12 months ending in October 2017 was 26.4 trillion cubic feet. Domestic production of oil would supposedly rise slightly from 5.1 million barrels per day in 2007 to 6.2 million barrels in 2020. In October 2017, U.S. oil production hit the highest level ever at 9.67 million barrels per day.

The NAS predicted that power plants using natural gas would supply 610 terawatt-hours of electricity by 2020. (One terawatt-hour is equivalent to the energy produced burning nearly 600,000 barrels of oil.) In 2017, burning natural gas generated more than double that amount: 1,277 terawatt-hours of electricity. Overall, the NAS expected Americans to consume 4,308 terrawatt-hours of electricity annually by 2020. Perhaps, but current consumption is just over 4,000 terawatt-hours.

The NAS panel also advocated the construction before 2020 of between 15 to 20 new demonstration or retrofited fossil-fuel power plants using carbon capture and sequestration (CCS) technologies. The idea is to bury the carbon dioxide emitted by such plants rather than let it float into the atmosphere where it would exacerbate man-made global warming. After spending $3 billion on the technology, the largest such demonstration plant in the U.S. located in Kemper Mississippi abandoned CCS last year, leaving only the Petra Nova plant in Texas still gamely pursuing CCS technology.

When it comes to the NAS' natural gas and oil projections, some readers might be more forgiving. How, they may ask, could the NAS experts have foreseen the fracking revolution? But that's precisely the point. Entrepreneurs and innovators acting in markets are far smarter than any panel of experts. Rather than devising plans, pathways, and projections, public policy should focus on freeing up markets so innovators can solve problems unforeseen by expert panels.

The Master Resource version is kind of my greatest hits. If you'd like to see the full-strength analysis, click on through to my original piece: "How Green Is Your Crystal Ball?"

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  1. No one likes a braggart. But I’ll let it go because it’s you Ron.

    1. Its nice break from Shikha nonsense.

      Plus, its good that people stand up to TOP MEN, make their case using reason and evidence, and are proven correct over the TOP MEN. I will pat Ronald on the back for that.

      1. Shikha is also standing up to TOP MEN, since the TOP MEN want to kick out the dreamers.

  2. “Entrepreneurs and innovators acting in markets are far smarter than any panel of experts.”

    This is a bait-and-switch. You criticized the panel of experts for not predicting future technology. Do entrepreneurs predict the future better than panels of experts? No, they just find new ways to make money. (They also will only care about externalities like environmental damage incidentally to the primary goal of making money.)

    Most of this says the NAS predictions were too optimistic. What are we supposed to do with this information?

    1. We’re supposed to put LESS faith in Government Almighty, and the Doom and Gloom that They predict for our future, and MORE faith in the unorganized, non-centrally-planned, “Chaos and Badness” that follows from simply allowing human creators to be free!!!

      Look at markets, look at biospheres. No one tells the grasses how many C-O-2 molecules to turn into sugars, no one tells the bunny waaaabbits how many blades of grasses to eat, and no one tells the wolves how many bunny waaaabbits to eat. Somehow, through the hidden order in chaos and badness, DESPITE the lack of a 5-year plan, IT ALL WORKS OUT!

      So, give human creators FREEDOM to create, and do NOT hold them to a schedule… Though I am personally scheduled to have a creative-genius-insight at 2:30 PM on the 8th of the upcoming February… And let it be free!!! And good things will come!

      1. It doesn’t all work out for the 99%+ of species that go extinct. Want us to be next?

        1. You mean by natural events because that’s how 99% of the species went extinct.

          1. Most species went extinct because of climate change.

          2. Yes, and that natural process was being held up as something to celebrate for its ability to generate order.

            It’s not actually all that efficient at doing that.

    2. T: You really don’t understand markets do you? You really kind of desperately need to read Hayek’s “The Use of Knowledge in Society”. From the essay:

      The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources?if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

      “knowledge … never exists in concentrated and integrated form” means that expert panels will most likely fail as did the NAS panels I critiqued. Seriously, take the time to read the essay. You’ll be glad you did.

      1. The vast majority of posters here don’t understand the basics of climate science, and I don’t see you harassing them with reading lists.

        I read and rejected Hayek before I left high school. Nonetheless, we should all celebrate. Capitalism won. We use markets for these utilitarian ends on a constant basis. That does not exist in a zero-sum situation with expertise and planning, however, which we also employ for utilitarian ends.

        1. Aw Tony, you don’t understand most things.

        2. I have a different interpretation than you do. Experts making predictions about the future are not as accurate as a system that is perpetually receiving feedback to refine its operation. My take: no shit Sherlock. That’s like saying climate models from 2008 are not as good at predicting the temperature today as a thermometer is.

          I think the point of the article is to remind everyone that a system that can continually integrate data is better at characterizing something than a system without the benefit of refinement from feedback. This is one of the strengths of the market. Central planning has its own set of advantages, but this is at the expense of accuracy.

          1. Re: JunkSience Junk,

            Tony believes in experts, not feedback systems that rely on market signals driven by self-interest. He’s like a Creationist who can’t fathom a world without a wise Overseer.

            1. OMS: Unfortunately, that does seem to be case.

            2. “feedback systems that rely on market signals driven by self-interest” … are god.

          2. I think the idea that the market (whatever you mean by that) better predicts the future than experts is laughable. Why would we ever have catastrophes like 2008? A handful of experts either predicted that or guessed right about it, but the market not only failed to predict it, it was the culprit.

        3. T: With respect, if you rejected Hayek that means you didn’t understand what he was saying.

          With regard to climate science, I always do link to findings that underpin the arguments I am making – I hope that at least some readers will take the time to evaluate the studies upon which I rely, but ….

          1. One of theses incarnations, Ron will have to get around to reading Harvey Brook’s CONAES report.

            They dont make Energy Crises like they used to.

          2. Ron, since you are all read up on this, what is your opinion of the potential catastrophic release of methane from permafrost methane clathrate deposits?

              1. I wasn’t talking about the continental shelf deposits, but the permafrost deposits. Also, those links say nothing about what would happen is substantial warming of a few degrees happened. I am not really worried, because if this danger is there, it will not be in our lifetimes. Nevertheless, our grandchildren might worry.

        4. Tony:
          “The vast majority of posters here don’t understand the basics of climate science, and I don’t see you harassing them with reading lists.”

          Yeah, Bailey. The personal attention you’re giving Tony is completely unfair! I am stomping my feet with massive, massive diarrhea at the unfairness of it all!

        5. The vast majority of posters here don’t understand the basics of climate science …

          Tony doesn’t even understand the basics of science.

          1. Tony gets all science narratives from the HQ and they were at a #metoo rally.

    3. Re: Tony,

      This is a bait-and-switch.

      That’s a lie.

      Do entrepreneurs predict the future better than panels of experts?

      Entrepreneurs risk more, so their incentive os to get it right. Experts only risk having Bailey rubbing it in their faces.

      Most of this says the NAS predictions were too optimistic.

      You’re not supposed to read your mobile device while standing on your head, Tony. That’s dangerous.

      They also will only care about externalities like environmental damage incidentally to the primary goal of making money.

      So they’re also immoral besides not being as good soothsayers as your beloved bureaucracies.

      Keep it up. Don’t change a bit, my child.

      1. They’re supposed to be (a)moral. Their job is to enrichen shareholders, not protect the environment out of the goodness of their hearts.

        There are some things that we invented government to do because there was no other way to do it. I’ve dealt with sociopaths before, so I appreciate that it’s futile to even bother explaining why a society should not be based entirely on amoral processes.

        1. Communist countries don’t have shareholders yet they have the worst pollution.

        2. You can vote morally.

          You can’t do business morally.

          This is known.

  3. Back in 2008, before Ron wrote his masterpiece (monsterpiece?) in 2009, I told EVERYONE THAT I MET, that, “That Ron Bailey, he’s my MAIN MAN, and he can see the FUTURE!”

    Did ANYONE listen to me?!?!? No… Pretty sad, I’d say…

  4. Making predictions, especially about the future, is hard. It’s easier to make predictions about the past because you can just “adjust” the numbers as necessary to prove your point.

  5. Markets, entrepreneurs and capitalism; the environment and humanities bestest friends ever.

  6. Master Resource Reprises My Takedown…

    What move did you use? The drop toe hold? The leg sweep? Double wishbone?

      1. The Jacket does not concern itself with legs.

  7. Peak Oil!

  8. OT: Journalists remain notoriously unbiased

    The worst one is still the soy-boy, beta-male and human cue-ball at CNN (you’ll see). But others do give him a run for his money.

    1. Using soy-boy is awful, man. You can do better.

  9. Domestic production of oil would supposedly rise slightly from 5.1 million barrels per day in 2007 to 6.2 million barrels in 2020. In October 2017, U.S. oil production hit the highest level ever at 9.67 million barrels per day.

    I have this lingering suspicion that maybe this peak oil thing is every bit as mythical as overpopulation, or Silent Spring.

    1. There might be a point where all oil on Earth is nearly used up. Nobody knows when that will be nor has it arrived yet. Furthermore, there is nothing that says that a technology cannot be invented to create oil out of its basic elements. Anyone who takes these “scientific predictions” as gospel are not big fans of the scientific method if you ask me.

      As to overpopulation, that is another fallacy if you mean how many people will fit on Earth or above it. A general term of quality of life for humans, plants and animals living in relation to how many humans can live on Earth can be entirely different. I think the Earth has plenty of people on it and we are doing pretty good. I think the USA has a bit too many people living here but ~330M people allows for good trading and national defense with some overcrowding sometimes. I would not want 1B people in America as it would be too crowded for my tastes.

      Nature has a way of adjusting itself. Overpopulation would be fixed by one errant meteor hitting a population center. Otherwise humans will adjust how many kids they have and when they want to die to their tastes.

      1. “Furthermore, there is nothing that says that a technology cannot be invented to create oil out of its basic elements”

        As I recall, Exxon-Mobil was working on a process to produce oil from algae at one time.

        I don’t know if they’re still working on it or gave up.

  10. I know Tony and some other lurkers here might not like the profit motive of entrepreneurs, but it keeps them accountable and honest; “experts”, who are almost entirely in academia and government, never need to be. They too are driven by profit-if a problem like climate change is solvable or not as bad as their end-of-days scenarios, then they will have a hard time justifying their jobs or funding.

    1. Tony and his like have heard your good points made before.

      Capitalism provides the signals that show how bad socialist is, so they must destroy free market any way they can.

    2. Your last sentence is pure conspiracy theory bullshit. You’d have to call into question all of science if you actually believed that.

      But nobody’s criticizing the profit motive of entrepreneurs. But it is a very narrow window on the world, and it’s simply not sufficient by itself to make it go round. Humans plan and rely on expertise all the time. Market forces can motivate the building of a bridge, but they won’t build it. I’m not the one suggesting a zero-sum problem.

      So what should be happening is science, even evil government-funded science, should be taken as input in the market, which, if it’s so amazing at predicting the future, should be all over fixing the problem if only for the sake of stability. Except it’s not good at predicting the future, even the short-term, and its actors are only interested in making short-term profits. Again, which is not bad, but if that’s all we have to work with then we will eventually destroy ourselves, and then there will be nobody around to be genius entrepreneurs. Sad.

      1. “Market forces can motivate the building of a bridge, but they won’t build it. ”

        Sure they can – and have done so for a very long time.

        They’re called private toll bridges.

  11. How, they may ask, could the NAS experts have foreseen the fracking revolution?

    In 2009 how could they have missed it?

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