[Webstral]

I’d like to know more of the details that are hidden from general view. For instance, I have read that the Saudis don’t have the kind of liquid cash reserves they once did. Other members of OPEC may not have the reserves for a long term price war, either. If the dropping price of oil results in a major disruption, the global economy could go back into recession. The Saudis and OPEC have to be sensitive to this. Capturing control of a reduced market may look good in the long term, but not everybody can afford to think long term. The bills that accumulate during a price war will have to be paid.

Odd as it may sound, this is the time for us to go whole hog into transitioning from a fossil fuel economy to an electricity-and-synthetic natural gas energy economy. The keystone of making this happen is getting a Manhattan Project type of effort going on bringing down the energy costs of electrolyzing water. Right now, the energy requirements of electrolysis amount to 180% of the energy one gains from combining hydrogen and oxygen. If the energy requirement can be brought down to 150%, the economy of storing [the energy value of] electricity as synthetic natural gas will be transformed. If the research to make this happen costs $20 billion, it will be a pittance compared to the money we spend on the fossil fuel economy. Once we can store electricity as SNG in a cost effective fashion, everything can change.

There will be some losers in all this. The immediate losers will be the coal industry. When surplus renewable electricity can be stored as SNG in a cost effective fashion, then the death knell for coal fired electricity will have sounded. Exports may still be possible, but other countries will catch on to the value of using renewables-to-SNG to secure their own electricity independence fairly quickly. While I am unsympathetic to the shareholders, who compete in the free market after all, I am concerned about the impact on labor in the coal mining parts of the country. For this reason, I would support adding a jobs retraining appropriation along with the research project. It should not be very hard to figure out how many jobs would be eliminated as a result of a cessation of coal mining, then figure out how many of these jobs need how much retraining before the labor can be repurposed. Retraining all of these people would cost a pretty penny. Perhaps money could be set aside to retrain 1/3 or ½ with the understanding that attrition of this labor pool through retirement or the cost-free transition of some of them to other mining jobs or even other admin and chemical industry jobs would cover a significant portion of the remainder. If the money were made available on a first-come first-served basis, some of the dithering might be avoided.

Such a breakthrough also will be a problem for the Russians in the long term. Once developed nations are synthesizing their own natural gas, there won’t be a lot of demand for one of Russia’s principal exports. Petroleum will still be needed for all the purposes besides burning it for energy. There definitely will be a decline in demand, though. So when and if we can crack the code on more energy efficient electrolysis, Russia is going to have to figure out another way to bring in hard currency.