Some interesting graphs from a paper on Australia's energy future [pdf]. The paper focuses on energy usage in the stationary energy and transportation areas. Coal is cheap in Australia and forms most of our electricity energy production. It is also a heavy carbon emission emitter when burned. Nuclear power is an option, but it is another centralised technology. If government is going to pick winners, it should favour a decentralised power production system. This will be the best long term solution, the most innovative, and by its structure, more resilient to failure and disruption.

Greenhouse Emissions

The stationary energy production sector is the largest emitter of greenhouse gases according to the report. Non-energy emission sources are the second largest with transportation third. This does not show concentration however, and transportation is highly concentrated. I can recall Sydney having brown haze sunsets where smog hung about ten kilometres off the coast. Then again, folks out in Muswellbrook might complain of pollution from time to time. I can recall being surprised when driving out there, just how quickly the big coal stations appeared.

Why is stationary energy production such an issue? It is probably because we burn a lot of brown and black coal.

Brown coal is the least purest form of coal and contains a lot of moisture. A by-product of burning coal is sulphur, which inevitably reacts in the atmosphere to create sulphuric acid. Apparently coal has been going through a boom period, with India and China burning more and more of it. Like other energy sources, it is in demand. Coal allows Australia to be a net energy exporter.

Absent from Australian stationary energy production is nuclear power. The last time this was raised with any vigour was in the 1970s, and was partly because of foreign policy and military reasons. This Nuclear issues Briefing page argues that nuclear energy is cost competitive with coal for stationary energy production in Australia. The page notes;

A factor which may put nuclear energy back on the local agenda is the possibility of emissions trading or a carbon tax to assist the achievement of emission reduction targets for carbon dioxide. A modest carbon tax or equivalent emission trading value of $37 per tonne ($10/t CO2) translates into 1.0 cents/kWh for electricity generated by black coal. (European Emission Trading Scheme prices were around EUR 15/t CO2 early in April 2005.)

The page also compares some other statistics;

• Coal now provides 78% of Australian electricity
• Gas now provides 13% of Australia's electricity
• Uranium at present provides no energy in Australia but 16% of the world's electricity

Coal, gas and uranium are all abundant in Australia. Natural gas remains abundant for the moment. This is why energy is cheap in Australia. Capitalism is the process of economic commodification. When given an abundant source to start with, in a free market, capitalism will ensure it is cheap. Taxing it wont change that.

I couldn't find if Australia places a tax on coal. I could not find any mention of it, so have to assume by its absence that it is not. It is peculiar that petrol consumption by transportation is taxed, but coal and gas consumption by industry is not.

Nuclear Energy remains a centralised energy production source. It will still suffer concentration of pollution, and have high start-up capital costs. In terms of carbon emissions it is superior to coal. Stationary energy is best dealt with through a decentralised means. If government is to pick winners and losers here, then it must encourage landowners, home-owners and individuals to collect energy and pump it back into the grid.

As people try to maximise their energy collection new innovations will come from them. Centralised solutions stagnate innovation by making it a cost, and then separating their R&D from their production. Decentralisation is the only sensible, sustainable, and long term way out of the costs, both obvious and external, of fossil fuel driven stationary energy production.

But Wait, There's More ..

Also found with interest, that Australia has a Greenhouse Office . I did not know that.

Hartcher writes about the current pressures on oil prices around the globe in an article titled; "The pain of oil addiction hits home" . However he contradicts himself late in the article, and exposes the conundrum of oil and petrol energy, its current high prices will only make it more plentiful on the world market. We cannot use capitalism to escape oil dependency as; one, capitalism makes scarcity abundant; and two, we currently have no other option.

Hatcher writes on external costs of oil;

In 1980, as the world struggled to overcome the oil price shock of the late 1970s, Jimmy Carter declared what would become known as the Carter Doctrine, declaring Persian Gulf oil to be a "vital interest" of the United States. He told Congress that Washington would use "any means necessary, including military force," to keep the oil flowing.

Australia carries its own military cost for oil. Our Collins class submarines, Orion P3Cs and F111s are for projection of power across the North-West shelf, particularly where Australian and Indonesian oil conflicts may arise.

Hatcher also writes;

Today the world oil market is sending this simple signal: the world is short of energy. This will force change on a world that is otherwise not terribly interested in giving up its addiction to cheap oil. The high oil price is already encouraging more exploration for energy around the world;

There is the nub. Whether it is the coal sands in Canada, or some new engineering process which makes cracking some other form of oil cost-efficient, we are not replacing it. Higher prices won't translate to humanity moving away from the oil economy. It may if the cost of oil jumped by 1000%, but it isnt. At worst it will be 100%, which can be tempered by governments dropping some of their taxes on it.

Capitalism commoditises the scarce. Whatever non-drilling form of oil we find will be turned into a cheap oil commodity. New engineering processes will ensure that the cost of production keeps dropping. New technologies will drop the price of distribution. We will be back to where we were in the nineties quick-smart; cheap oil as far as the eye can see.

It will have to be a disruptive technology. Fund the scientists and engineers! Drop taxes on any startup which is in the non-oil energy market. Let people buy research bonds in decentralised energy projects. Anything. Otherwise we will just make oil cheap through new methods, and nothing will change, except salaries increasing to cover the cost of petrol at the pump.

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The ABC reports that Australia is negotiating with China on how exported uranium will be used. Australia is the second biggest exporter of uranium, and China is facing an energy crunch. There is the chance for Australia to benefit technologically from its resources in this instance.

With worries of Peak Oil, and other emerging economies, such as India and Indonesia putting pressure on the world's energy supplies, China has started researching other forms of stationary energy. Namely pebble bed reactors.

Physicists and engineers at Beijing's Tsinghua University have made the first great leap forward in a quarter century, building a new nuclear power facility that promises to be a better way to harness the atom: a pebble-bed reactor. A reactor small enough to be assembled from mass-produced parts and cheap enough for customers without billion-dollar bank accounts. A reactor whose safety is a matter of physics, not operator skill or reinforced concrete. And, for a bona fide fairy-tale ending, the pot of gold at the end of the rainbow is labeled hydrogen.

Australia will face its own energy crunch, and the centralised coal and gas system will not be able to be decentralised fast enough. A new centralised technology will have to come in until what we centralise now (water, sewer and power) becomes decentralised through new technologies and attacks/disruptions against centralised systems.

The pebble bed reactors look like a good technology to bridge that gap. In trading uranium, Australia is asking that;

There has to be very, very stringent safeguards so that all radioactive material can be accounted for, and none will be diverted to weapons production.

So I think there's a lot of detail that will have to be agreed to, which will make that process transparent. I don't think the Chinese will be shy or reluctant to go down that route. Their need is genuinely for electricity production.

China has enough nukes to cause everyone fits as it is. Instead of carrying on like doves, maybe we should extract a higher price from energy starved China - that of technology. Australia should muscle in on the Chinese research programs for pebble bed reactors and turn them into partnerships with Australian scientists, engineers and researchers. Programs with true technology sharing. That would carry benefits beyond dollar amounts for Australia.

The NSW Department of Energy, Utilities and Sustainability has an interesting report [PDF Warning] on using generator testing at peak times to contribute to handling peak demand.

From the report;

One of the many aspects of DM [Demand Management] that has been effectively employed overseas is to coordinate the use of standby generators to reduce the net demand on the electricity supply system at times of peak load. These generators are idle for most of the time, but need to be tested (typically about once a month) to ensure their reliability.

In principle, offering incentives to owners of standby generators to co-ordinate the testing of some standby generators during a few hours of peak demand each year could improve supply reliability.

Unsurprisingly the telecommunications sector had the most generators that could be included in such a program.

• Telecommunications : 52% of total MVA
• Office Buildings : 25% of total MVA
• Retail : 7% of total MVA
• Broadcast : 6% of total MVA
• Hospitals : 3% of total MVA
• Misc : 8% of total MVA

Much of the Generator work is outsourced these days, so coordinating it to peak times may be an issue there. Even so it is a good example of systems thinking and trying to effectively use a distributed network of power generators.

On PDFs and Government

A final word. This PDF has security protections on it, one of them being Content Copying or Extraction . The paragraph above that I blockquoted was typed out by me. As was the data in the unordered list. It annoyed me that I could not cut and paste the information, but the security settings were not an obstacle to me copying the information in the PDF.

Government needs to get wise. Firstly, public information should be easily cut and paste. It is for public dissemination. They should be wrapped that someone is talking about their study, not trying to hide it or protect it from being used at all.

Secondly, PDFs are hostile to the internet. They are ugly to use, impossible to read, and by-pass all the normal browser methods of reading, finding and parsing information. They are bad. Very bad.

Note to government; stop using them. The native format on the web is HTML. Publish in that format.

Not politics but we do have an energy topic; and energy usage plays in important role in modern social self-organisation. A graph of my household Kwh usage for 2006.

I am currently in the Northern Hemisphere which accounts for the electricity being high in summer when the air conditioner gets a workout. The gas usage is also high through the late autumn, winter and early spring when temperatures drop.

Gas is not as expensive per Kwh as electricity is, but both have volatile rates which go up in peak periods. So the energy bills in summer and winter end up being about the same despite the graph suggesting that gas would be the higher bill.

This house has central heat/air which is pumped through the house by ductwork. The furnace is in the basement and the air conditioner is outside. I am thinking at this stage that the simplest methods to reduce consumption would be to put in a digital thermostat which can be programmed to allow for lower temperatures at night. The current one is analogue.

With the electricity usage it might be worth updating the air conditioner to a more modern one (I think the current one is about nine years old) which is more energy efficient.

Plenty of tips in the links below:

• Reduce energy consumption in winter
• Reduce energy consumption from air conditioning
• Strategic Tree Planting

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Joseph Tainter has an interesting essay titled Complexity, Problem Solving and Sustainable Societies. His thesis is that humankind, in order to solve practical problems, increases the complexity of the systems that go toward a solution. Over time this complexity needs to be subsidised by increasing energy - lest they collapse.

Tainter includes a discussion of Rome in his thesis. As Theophile Escargot argues, Rome hung around for so long that you can fit any model into its collapse:

[T]he Decline of Rome is a useful ground for arguing absolutely anything. Want to build up defence spending? Argue the Roman empire fell because it didn't secure its borders against the barbarians. Don't like immigration? Argue that their mistake was letting Visigoth asylum-seekers settle inside the Danube border after fleeing the Huns. Like free trade? Argue like Pirenne that the Arab restriction of trade routes did for it. Don't like religion? Follow Gibbon and say it was weak-minded Christianity that softened it up.

Tainter's argument is that complexity, and ability to problem solve with increasing complexity is a restraint on a society and economic system. The only way it can be overcome is with external energy inputs. Humans generally choose a simpler and easier method where they can, but often, there is no choice but to become more complex and usually through greater "differentiation, specialisation and integration".

Tainter describes complexity as an economic process as it "levies costs and yields benefits" and as such is an investment that has a quantifiable return. Humankind has generally chosen the cheapest, easiest and least complex solution first. But once that is exhausted increasingly complex solutions are found with diminishing returns. A good example is oil extraction. Most of the easy oil deposits have been found, so now we drill offshore and are even contemplating using the oil shale in Canada for energy.

In terms of Rome we have looked at Peter Turchin's model of Asabiya which describes the cycles of collective action. More recently Chalmers Johnson's thesis that empire leads to undemocratic forms which are inefficient and lead an empire into long decline. Not to forget Jared Diamond's ideas of social collapse.

Tainter describes Rome's increasing complexity and diminishing returns in terms of how the ruling class responded to military crisis. It taxed heavily, established greater bureaucracy, built more and more fortifications, doubled the army and devastated the economy:

The empire came to sustain itself by consuming its capital resources; producing lands and peasant population. The Roman Empire provides history's best-documented example of how increasing complexity to resolve problems leads to higher costs, diminishing returns, alienation of a support population, economic weakness, and collapse. In the end it could no longer afford to solve the problems of its own existence.

Interestingly he discusses industrialisation, which was the rise of the British Empire, though Tainter does not mention it that way. The overpopulation and denuding of forests for energy led to the use of coal. The easy deposits were mined, so deeper and deeper shafts were driven but that led to ground water issues. Which was solved with steam powered pumps. He writes:

What set industrialism apart from all of the previous history of our species was its reliance on abundant, concentrated, high-quality energy. With subsidies of inexpensive fossil fuels, for a long time many consequences of industrialism effectively did not matter. Industrial societies could afford them. When energy costs are met easily and painlessly, benefit/cost ratio to social investments can be substantially ignored (as it has been in contemporary industrial agriculture). Fossil fuels made industrialism, and all that flowed from it (such as science, transportation, medicine, employment, consumerism, high-technology war, and contemporary political organization), a system of problem solving that was sustainable for several generations.

So energy subsidises complexity, to the point that complexity's true cost and diminishing return on investment can be hidden. Such that Tainter writes that for our ability to solve problems with greater complexity, "the availability of energy per capita will be a constraining factor".

Is Australia in Iraq for oil or is it because of the Great and Powerful Friends doctrine [GAPF] of foreign policy? In my opinion, while energy security plays a minor role, it is predominantly because of the latter.

There has been a media and blogger gotcha moment when Brendan Nelson mentioned that armed intervention in Iraq was related to securing energy supplies. We know that the Carter Doctrine from 1980 stated clearly that the US would use military might in the Gulf region if American national interests, read energy interests, were placed in danger. So any politician who denies there was a strategic interest in securing the region for energy purposes is being dishonest. Nelson was stating the obvious there.

But what does it have to do with Australia? Other than oil producing nations such as Venezuala (and until recently Indonesia) who buy off their populations dependence on government good-will through the subsidy of oil, America and Australia are two of the lowest cost energy nations on the planet. Certainly amongst the OECD nations, taxes and the cost of energy are extremely low in both the US and Australia. So we do have an interest in a stable Middle East and a breaking of energy cartels such as OPEC.

There still remains the question why we bought into the US military invasion of Iraq. That cannot be understood without a discussion of the foreign policy doctrine which has guided Australian policy making for the last century; the "great and powerful friends" doctrine or GAPF.

Australia has three competing foreign policy doctrines; the GAPF, the Engagement doctrine and International Liberalism. None of them are pursued absolutely, but they have dominated at different times the policy making decisions of Australian governments.

International Liberalism found a dominant voice under Doc Evatt after WWII. It sought to stop violence between nations by communicating openly and having a forum where international politics could compete in an environment that did not lead to brinkmanship or the breaking off of diplomatic relations. This is the basis for the United Nations which Evatt had a large hand in the construction of. Doc Evatt and Sam Burton were pretty blunt about the open communication component of it too, dispensing with diplomatic niceties and double-speak, often shockingly so.

Engagement is a very modern doctrine which Gareth Evans pursued. It seeks to leverage all the intangible soft power such as social, cultural, economic, diasporans and immigrants into national political power. The basis for it is that unless there is complete engagement by all aspects of the national character then security is impossible. It is a policy well suited to globalisation. It has its origins in Asian Engagement which is associated with Paul Keating, but stretches back to Australian support for Asian decolonialisation after WWII and Percy Spender's Colombo Plan.

Those two doctrines have had to compete with the GAPF; though at all times foreign policy has comprised a mix of the doctrines, the GAPF has been the one that has dominated policy making, while not absolutely, sometimes very close to being so.

The 'great and powerful friends' doctrine gets its name from a Robert Menzies speech but it was Billy Hughes in 1919 at Versailles who established it. The basis for the GAPF is that Australia makes its foreign policy subservient to the powerful friend in return for military security and preferential economic treatment. At the time the GAPF was Britain. Hughes was concerned that Australia was undefendable unless the Royal Navy could protect it; his other issue was that he believed, incorrectly, unless there was absolute loyal to Britain, then Canada would get greater access to the British markets for wheat. At the time Britain was a major export market for Australian products.

This was policy practiced by all governments including John Curtin in WWII. It is odd, Curtin's statement that "we look to America" without "any pangs" relating to our traditional relationship with Britain is seen as some watershed in Australian politics. It is not. It is the GAPF doctrine just with a new friend. WWII made it obvious that British blue water supremacy was gone, and replaced by American naval power.

Menzies tried to realign Britain back as the powerful friend, but it was obvious that America was the new western power. Percy Spender had his finger on the rhythms of cold war politics far better than Menzies did, it would have been interesting if Spender had the numbers to become PM. The 50s would have been far more interesting for political historians. Menzies was left promoting Briton culture in Australia while extending the GAPF militarily to the US.

Since Menzies Australian governments have embraced the GAPF uniformly, probably the only break being Keating's government who placed Engagement as a higher priority, but even then, the GAPF played a strong role in policy making. Just as Howard has had to embrace Engagement with China and International Liberalism with East Timor. They all play their role at different times.

The main problem with GAPF is that its three major premises are all based on fallacies. The first is having a subservient foreign policy. This does not isolate or inoculate Australia from bad decision making by the powerful friend. The most recent example of the powerful friend getting it all wrong is the invasion of Iraq. But there have been others in the past; for instance Ford and Kissinger knowing about the invasion of East Timor and not telling Malcolm Fraser; and the Australian involvement in the establishment of a dictator in Chile.

Related to this is the assumption that Australia can influence American policy by its subservience. As the examples above show, international politics is based on power, and the US is often belligerent in how it plays power politics - and why shouldn't it be? The US is the dominant economic, military and political power. Pretending that Australia can influence American policy is setting a national leader up for failure and denying the realities of international power politics. Tony Blair is a good example of this.

The military component of the doctrine finds itself mythologised in the ANZUS Treaty. This was negotiated by John Foster-Dulles specifically to stop Australia 'doing a Curtin' should there be a global war with the Soviet Union. ANZUS is a statement that the US will protect Australia in the case of a global war so that Australia will leave its troops in the Middle East and North Africa - and not bring them home - like it did in 1942.

ANZUS has been sold in many forms to the electorate, recently as the "US Alliance" and meaning more than it really does. When the September 11th attacks occurred and Howard enacted a clause in it, there was a pause from Washington, along with a thank you and a curt reminder that it meant no reciprocal obligations from the US if Australia is hit with a terrorist attack. It was seen as a blatant and clumsy attempt by Australia to force the ANZUS Treaty to be relevant in a post Cold War environment.

ANZUS is myth now, and is a hydra of Australian politicians making that will only end in disappointment when the US inevitably ignores it for reasons of power politics. We saw that level of frustration when the US did not want to take part in the UN mission to East Timor. It has led Australia and Australians to have a sense of entitlement for American involvement in Australian military issues. Which is another negative for the GAPF.

The final fallacy is that the GAPF brings economic benefits. In the last election the Free Trade Agreement with the US was talked up as being a direct result of Australian involvement in Iraq. It was not. Any nation who was prepared to give in on agricultural quotas and who would change their intellectual property laws to match the US's (including the DMCA) got one. Bilateral FTA agreements were US Trade policy; not a result of Australian foreign policy subservience. Singapore and Chile got FTAs despite opposing the invasion of Iraq, and Costa Rica got one, while supporting Iraq, but not sending any forces.

The GAPF is predicated on failure. The only reason I can see for it still being pursued is because it allows for lazy foreign policy, and has been built to mythical standards in the electorate that it is hard to dump it democratically. Then again, Evatt and Evans pursued differing doctrines and the sun didn't stop shining on Australia.

So back to the oil question.

John Howard and John Curtin have probably been the purist supporters of the GAPF doctrine. Securing energy in the Gulf is in American interests, hence it is in Australian interests both indirectly through the GAPF and directly for Australia as a low cost oil nation. Are we there for oil? Tangentially but not really.

Australia is there because of the GAPF doctrine.

There has been a gas pipeblast in Mexico which local rebels have claimed responsibility for. These are examples of John Robb's global guerillas. Because the cost of warfare has decreased so much, the heavily centralised political, urban and economic structures are unnecessarily exposed to shock and delivery failure. Energy is one of those susceptible systems.

Australia is uniquely situated to decentralise two very susceptible systems; water and energy. Because Australia periodically goes through water failure where the big central systems such as dams cannot meet demand; then there needs to be a decentralised approach. Rain tanks and conservation being the obvious.

This decentralisation has obvious advantages; one it reduces the cost of local government as water becomes primarily a household responsibility, two, conservation becomes one of personal responsibility, and three, it isolates the water supply from a centralised disruption such as drought, salination, poisoning, terrorism, etc.

Energy is another where Australia is well situated. The sun is a massive producer of energy we just have not worked out to harvest it efficiently and cost effectively yet. However, if we start seeing centralised failure of energy delivery systems, it will become cost effect quickly. There will be the same advantages from a decentralised (and networked) approach to energy as there is to communications and water.

The same goes for our political structures. Australia unfortunately has moved to a heavily centralised federal government. It dominates taxation, policy and revenue. This is a structural weakness in the current environment. Like water and energy, decentralised political structures protect against shocks and central failure.

Australian politics need to decentralise and remove power from the national government in order to increase the health and robustness of the Australian political system.

Nanosolar now has their $1 per 1W cells in production. Their first eighteen months of output is already spoken for.

They have made the advances through manufacturing process improvements rather than solar technology itself. Nothing wrong with that. Through microprocessors our cars have become more efficient and safer. Most of the advances in batteries in the last decades have been because of improvements in manufacturing rather than chemical technology.

Nanosolar is going after the MegaWatt market so you won't see these cells on your roof next year. There is a lot of money in installation and integration of UPS systems into datacentres. The Engineering for it is huge. I suspect this is true for the installation and integration of power systems as well.

As a friend commented:

So not this xmas, nor next, but someday... the solar pup-tent, for that off-the-grid hippy on your gift list

When we can make a decentralised grid where the urban apartment and suburban home become the main sources of production for energy then we will see some amazing innovation in social organisation as the centralised and capital intensive energy structures are deprecated.

This is a blame the government and oil companies type of op-ed, however it has some interesting figures in it.

In January of this year, the U.S. used 4% less petroleum than we did a year ago. (Oil demand was down 3.2% in February.) Furthermore, demand has been falling slowly since July of last year.

In 2003 I payed $1.50 USD a gallon now I am paying $3.50 a gallon. The price increase was both was sudden and constant. It was blamed on a number of issues, Katrina, Iraq, China, India, tornadoes, vacation driving, you name it. However it appears that refineries in the US have twice as much in reserve each month than they did a year ago and ethanol, while putting pressure on food prices, is alleviating demand. This isn't being seen at the petrol pump.

This is the problem; even with pricing doubling in five years and the US cutting back consumption, it is still an oil economy simply because oil is so cheap - even when it is expensive by modern standards. Europe pays about $8 a gallon for their oil yet its economy and transportation system are still base on oil and its resultant infrastructure. European cars, while smaller, are still burn oil. Even when oil is made artificially expensive through government taxes it is still very cheap. This is not going to change anytime soon.