June 27, 2007

API Conference Call On Energy IQ (Update: Take The Quiz!)

I joined a conference call conducted by the American Petroleum Institute (API) on an "energy IQ" survey they recently conducted, and their overall energy policy. The API represents the energy providers in the US; they effectively help shape the public debate over energy policy on behalf of their members.

In this call, the API argues that the policymakers and opinion leaders don't have a firm grasp on the facts on energy, and more worrisome, neither do the consumers. They used Harris to survey consumers to find the gaps in knowledge that create misunderstandings and unreasonable expectations. This was an Internet study of 1,333 adults in the US, weighted for region, age, ethnicity, and economic strata.

Two conclusions emerged, according to the pollsters. First, most Americans "know very little about where energy comes from," and even less of distribution issues. In fact, they seemed unwilling to hazard guesses, opting for "not sure" in larger proportion than expected. Last, when they got answers wrong, they got them wrong to the largest extent, indicating not just ignorance but flat-out misinformed.

Only one in 10 correctly identified Canada as our largest importer. Most overestimated the imports from the Middle East by a factor of 3-4 times reality. People also overestimate the profits of energy companies; 42% guessed that the oil companies 12-16% profit margin, instead of the correct 9.5% profit margin. They seriously underestimated the amount of reinvestment into their companies.

Most of the details aren't all that significant. After all, oil is a fungible market, and it makes only a little difference where our supply originates. A shutdown of any source, even one we do not utilize, would create havoc in the global market and spike oil prices. The API acknowledges this, but want to show how misconceptions can affect energy policy -- and I suspect that they're most concerned about tax policy most of all.

The API made a comment about how energy independence would be an unrealistic expectation "for several decades to come". One reason is the energy infrastructure in the US. How do you distribute the new forms of energy? Ethanol can't use pipelines, for instance, and mass transportation eats into its efficiency. It will take decades to actually build the coal-liquefication facilities, and so on. The API supports nuclear energy, and it can tie right into the existing grid, but construction and storage still puts this years out.

UPDATE: Here's the survey by Harris. Take the quiz yourself and post your answers in the comments -- or check your energy IQ against the answer sheet at Energy Tomorrow. The questions are in the extended entry!

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Comments (10)

Posted by vet66 | June 27, 2007 10:57 AM

Just for the sake of argument, how about using the ubiquitous car dealers to distribute hydrogen to hydrogen powered vehicles? Since global warming is an issue, where do the environmentalists stand regarding the use of coal versus nuclear energy in the production of electricity?

The list goes on leading right up to the question as to how servious we are about changing our lifestyle, whether it be corporate, consumer, or both!

Posted by Al Maviva | June 27, 2007 11:38 AM

Hey, you're missing the big upside to all this energy ignorance.

Once the ethanol market really gets rolling, it will take care of our obesity problems for good.

Posted by Al in St. Lou | June 27, 2007 11:43 AM

My ten answers: 1-1, 2-3, 3-3, 4-3, 5-2, 6-2, 7-4,
8: Crude price--18%, Refine and distribute--56%, Taxes--26%
9-3, 10-4, 11-4, 12-2, 13-3, 14-2, 15-5, 16-5, 17-5, 18-2 (but I cheated), 19-3, 20-2

Now, I'll go check my answers.

Posted by Al in St. Lou | June 27, 2007 11:56 AM

Okay, here's my score: I only got five right, and I got two of those right because I'd just read the correct answer in Captain Ed's post.

Posted by jane nb | June 27, 2007 1:15 PM

I'm not interested in changing my lifestyle one bit. Not one iota.

Give me daily hot showers, high speed internet at home, my own personal vehicle to take me where I want to go when I want to go, a wide variety of nutritious foods from across the globe in my grocery store, and high tech medicine when I or my family gets sick.

Out of a sense of good stewardship I CHOOSE to recycle, I CHOOSE to purchase food at my local farmer's market, I CHOOSE to turn off lights I'm not using at home, and if I could afford it I'd CHOOSE to drive a higher mileage vehicle (as long as it could hold 3 hockey bags).

"I" choose - I'm not forced to do it because of some gov't agency or phony Gulfstream liberal tells me to do so. Me, myself, I.

So bring on the energy transmission grids, the tanker trucks full of gasoline, medical waste and pesticides. They are all the unsightly products of wealth and prosperity the likes of which the world has never seen. And we live longer, better lives because of all of it.

The free market economy, led by lots and lots of "I's" will make any of these decisions in the most economical fashion possible.

When consumers are ready for high mileage vehicles...they will be ready for us. When more people value organic produce and are willing to spend money to purchase it...more acres will be planted. And so on.

My dad was in the local utility industry for years in my hometown. These survey results don't surprise me at ALL. Most Americans are abysmally ignorant of any of the infrastructure needed to maintain our daily lives.

The "post-industrial utopian agriculturalists" are perhaps even more clueless.

Any idea what all those horses ('cause we won't be driving), pigs ('cause we'll all need to supply our own food sources) and cows (we'll all need to catch cowpox so we won't get smallpox - no high tech medical care like vaccines) will do to the water supply and global warming? Lotta methane in those backyards....

Posted by Jose Sanchez | June 27, 2007 1:48 PM

I just got through reading a Popular Science article on producing bio-diesel oil from algae. The article claims that this source of bio-diesel fuel could, over time, replace all 150 billion gallons of fossil-based transportation fuel currently used in the United States. It was only in the last couple of paragraphs of this Popular Science article that the author asked how much algae oil had been made in this way. When she reported that the technician showed her a flask containing a few drops of yellow oil it became quite obvious that this was just another ridiculous hair-brained scheme that Popular Science had became enamored with over the years. And, indeed, the concept was developed during the Jimmy Carter presidency and was canned in the 1990s as it went nowhere. Now it was being resurrected.

It seems to me that we should reserve our farmland, orchards and ponds for the production of food for the world’s population. Conversion of food-corn to ethanol is probably a little less efficient than shoveling corn or any other crop into the furnace and burning it for heat. By the same token, if successful, it seems to me that it would be better to use the oil produced from algae for food purposes rather than for fuel purposes. In the meantime we ignore potentially vast, safe and proven nuclear energy technology in favor of politically-correct bio-fuels, hydrogen and wind and solar energies.

Jose Sanchez

Posted by MikeD | June 27, 2007 2:34 PM

People, particularly those on the left, hold onto their scapegoats tenaciously. Do not, I repeat do not, contradict their largely erroneous preconceived notions or they will have no place to focus their anger, no one to blame for injustice, no excuse for their outrage, no demons to condemn, no capitalists to excoriate. It is all Halliburton, blood for oil, the nefarious neocon cabal, GWB, and price gouging of the poor. More than anything else, however, if reality is different than delusion permits then there will be no one to blame for victimhood, no excuse for cultivated ignorance, and no explanation for philosophical failures. And that would be truly disastrous!!

Posted by Paul A'Barge | June 27, 2007 4:06 PM

...it makes only a little difference where our supply originates

with respect to price you should have added.

There are many other factors where the origin of our supply makes a huge difference (at least to me).

Thus, I would be willing to pay more if we could guarantee that not one joule of energy would come from outside our borders. And, I'd like to see us adopt a 10 year plan to make this happen.

Posted by rulen | June 27, 2007 5:18 PM

I only got 5 right. I'm so embarrassed since I live in the Energy Capital of the World, Houston Texas. I've read several ads from Chevron in the last few months discussing these very issues in the Houston Chronicle. Chevron had to pay for an ad to get people thinking, because the Chronicle sure wasn't gonna do them any favors. Even in your own back yard, the MSM wants to go after you.

Posted by doug in colorado | June 28, 2007 8:32 AM

Hey, vet66, to answer your question, car dealers may seem ubiquitous if you live in the city but its a mighty long way between them out in the country...and most would have to tear up the sales lot to put in storage and the cryogenic cooling required...Oh, and by the way, did you know the stuff is kind of explosive?

Hydrogen is only a vector, a means of storing and delivering energy...it has to be made from water using ...what?...electricity, that's right...and electricity is made from...what?...coal, natural gas, hydro and nuclear (and there are conversion losses each time you change energy vectors)...and the available surplus plant capacity in any of those is? Right, negligible. And how long does it take to get the environmental impact statements done and overcome protests through the courts for major new nuclear or even coal facilities? Right...ten years or more if the Greenies and NIMBY folks get involved. Wonder why we haven't built any new oil refineries or nuke plants in the last twenty or more years? Environmental impact assessment and legal protests.

Sorry...Hydrogen is a non-starter for now....not to mention what can happen when you have a collision with a hydrogen tank truck or a hydrogen fueled car...Remember the Hindenburg. The storage, handling and transport technology still needs to be developed.