…Or your own lying eyes?

PR has its limits. You can only create so much belief in the face of a persistent, contradictory reality.

As the shale frenzy has bubbled along, stories about a United States and/or North American resurgence in oil production have been pushed in major media outlets from the Wall Street Journal to the New York Times and all manner of blogs in between. At the same time, domestic prices at the pump remain stubbornly aloft.

Since economic “law” dictates that ample supply should result in lower prices rather than the upward trend we’re experiencing, there must be other factors at play, right? Anxiety over threats of war with Iran, commodity speculators, Big Government rules that hamstring drilling and the insatiable greed of Big Oil are all trotted out as the proximate cause of this seeming paradox. But for these transient, man-made issues, the storyline goes, we’d be swiftly on our way to Newt Gingrinch’s $2.50-or-less-a-gallon Promised Land. We are, after all, sitting on trillions of barrels of technically recoverable oil and 100 years of natural gas, right?

Those seeking the true contours of the energy landscape we’re traversing would do well to remember that good answers start with good questions. So, take a look around and ask yourself a few. If we are actually awash in oil:

  • Why are major airlines conducting flight tests of planes with biofuels?

The actions by the organizations cited above are not inconsequential. They represent major commitments of money and effort, and, in the case of the auto companies, a major directional shift for their businesses. If energy independence and a gushing supply of oil were just a few more horizontally drilled and fracked wells away, would these entities really be pursuing strategies that hedged their futures increasingly away from reliance on petroleum?

So, who are you going to believe; the hyped assurances of investment banks and oil companies, or your own lying eyes?

Where’s that confounded bridge?

Hey, want to buy a bridge? How about a bridge fuel? It burns cleaner than coal for generating electricity, can heat homes and power a truck or a car. Best of all, we’ve got an embarrassing surplus of the stuff priced so low it’s sinful. It’s natural gas from shale, and it’s the answer to our energy problem for the next 100 years while we figure out this alternative energy stuff.

Or not.

The rosy assessments above are based on current consumption levels and an overly optimistic estimate of what we can get out of the ground at anything resembling a reasonable cost. In addition, the dollars don’t add up. The fracking that produces shale gas is expensive and when successful yields a short gusher of gas followed by a steep drop off, requiring a re-frack and repeat. It’s “an unprofitable treadmill.” The sheer number of wells drilled in the fracking frenzy has created a gas glut on the domestic market and, in turn, low prices that cannot support the expensive production model. Most companies producing shale gas are relying on steady inflows of investment cash to support their profit-challenged efforts.

Already used for cooking, heating homes and hot water as well as generate electricity and to provide feedstock for industry, expanding these uses of natural gas and creating new ones – such as in fleet trucking and even personal vehicles – is usually cited as a key way to put the shale gas glut to good use; lowering our national carbon footprint and increasing our energy independence. The big hope for producers, however, is in export. Clearing a few political and regulatory hurdles and building new facilities would allow for natural gas export in liquid form to foreign markets like Great Britain, Northern Europe and even Asia.

All of which would raise consumption levels well above current levels, reducing, in turn, the projected years of supply. Some estimates suggest shale may provide fewer than 30 years of additional natural gas supply when all is said and done. And as the glut diminishes, users will begin to be exposed to the true dollar costs of fracking extraction.

As this process plays out, a major concern is the effect on alternative energy. Another three decades of embracing the fossilized status quo aren’t going to help us achieve energy sustainability. People are fundamentally change-averse. Tales of “100 years of cheap energy under our feet” will resonate. And if the hype lures investment capital to shale companies, what does that do to the attractiveness of investment in green tech companies? Will cheaper natural-gas-fired electricity generation put further funding pressure on large-scale solar and wind projects?

If markets pick winners, then it’s hard to understand how an embrace of shale gas creates a bridge to a new energy regime, rather than to a familiar dead end. It’s time to stop digging for scraps in the past and find a new way forward.

Fallout, fatalities and news cycles

The media business moves in ever-faster, shallower coverage cycles, pursuing stories with a simple tension that creates a sense of urgency in readers and viewers such that they will stay for the commercial, buy another issue or click into the full story.

The speed of the news cycle and the need for this clear, simple tension obscures even the most important stories once they evolve past urgency into more subtle or complex territory. Take the Fukushima nuclear disaster. It’s been a year since the tsunami hit and the multiple reactor meltdown incidents, so the story is getting a brief, anniversary return trip to the news cycle; a trip down disaster memory lane, some “lessons learned” and some heartening bits on people rebuilding.

There is a story to be told about the ongoing disaster in Fukushima, an important one that might prompt a very useful discussion about the role and shape of nuclear power in the United States even as the first new plant in over 30 years is licensed in Georgia. But the story out of Japan has become more complex and open-ended, lacking simple tension, a clear ending point and gripping images of containment buildings exploding and helicopters dumping seawater on seething rubble.

After Fukushima Daiichi exploded and melted down, a consensus emerged that, while terrible and problematic, the damage was ultimately manageable and nuclear power a safer choice than many traditional power sources. Coal, for instance, was calculated to have killed many times more people per watt of electricity generated than nuclear. Coal mining has killed lots of miners over its long history as a leading energy source and its use has certainly resulted in types of air pollution that have a well understood casual relation with life-shortening conditions such as asthma. Clear and simple.

Less clear and simple, however, are the mortality effects of long term exposure to various types of radioactive fallout and debris. Radioactivity at lower levels is invisible to human senses. Tracking radioactive fallout and its effects is bereft of the clear and simple tension that the media relies on to drive news cycles and its bottom line. Oh, you can still find those efforts happening, they just won’t be part of the news cycle informing our public opinion and debate.

For the link averse, the early indications from Fukushima are not comforting.  Take this podcast interview, for example. In it, it is noted that a medical examination of almost 4,000 school-aged children showed thyroid “lumps” in about a third. Apparently that’s rather unusual. Those kids aren’t dead; they may well live on just fine for decades. If they are, perhaps, tracked by curious medical investigators or scientists and found to have shortened lifespans due to increased incidents of cancers often associated with exposure to radioactive isotopes that may generate a story or two. But those stories will not inform our current understanding of the dangers posed by nuclear power and the handling of its associated waste. Some other story with a more clear and simple tension will be driving the news cycle. Count on it.

The sensible center

Often, PR is about driving consensus. Other times, it’s definitely not. Sometimes controversial issues are controversial by design. You want a “rational discussion” on climate change? So does ExxonMobil.  How else to ensure that everyone reading, watching, etc., this rational discourse understands first and foremost that there is much to debate and, therefore, the best course of action is to do nothing.

IClimate Changef you have not, you really must take the time to read Naomi Oreskes and Erik Conway’s excellent book, Merchants of Doubt. It does a first rate job of detailing the parallels in strategy, tactics, language, funding, organizations and even individuals between the efforts of tobacco companies to obfuscate the link between smoking tobacco and cancer and the efforts of certain industries to promote doubt about human-caused climate change.

Big Tobacco was never interested in proving that smoking cigarettes wasn’t addictive or didn’t cause cancer. Yes, they made statements to that effect, issued studies and paid for “science” on these topics, but the goal never was to “prove” anything.  The goal was to provide another “side” to the story. Providing a veneer of credibility for that other side by funding studies, scientists and other “experts” fed an ongoing debate which, in turn, justified holding off on doing, well, anything. As the debate churned on, the cigarettes churned out and the toll in health and lives added up. Funding the ongoing rational debate was just a cost of doing business.

Today, the same tactics that kept Big Tobacco in escalating quarterly profits for decades after serious medical concerns were first expressed have been adopted by industries with a lot to lose if an enlightened public were to rationally engage with the well documented science behind anthropogenic global warming. And those tactics are likely to be just as successful.

Why? Because people typically respond to uncertainty with inaction. Why upend the entire economy and Our Way of Life if the science isn’t sound or settled? Better to do nothing, than make the wrong decision. Want to paralyze a population? Gin up a rational public debate.

The experts involved in studying climate change believe in the clarifying power of rational debate and the media love to cover a debate (seriously, how many Republican primary debates are we up to now?).  Both likely see this process as the best – and necessary – way to get at the truth of the matter. The parties driving this process, however, aren’t concerned with getting at the truth of the matter.

But by all means, insist on a rational debate to hear “both” sides of the climate change issue. ExxonMobil would appreciate it.

I know it when I see it

Unlike advertising, well-executed PR doesn’t hit you over the head. Rather, it becomes an organic part of the public conversation, shaping and directing it, often by defining key terms and setting acceptable boundaries of thought and belief. So, as a professional in the field, it is with no small amount of interest that I have watched a recent rash of stories popping up in some fairly weighty mainstream outlets – Bloomberg BusinessWeek, for example and Forbes.com – declaring that new developments in unconventional oil sources, primarily shale, have finally – or, perhaps, once again – disproved the Peak Oil “theory” that purportedly states we’re running out of oil.

This rash of Peak Oil denial articles has the earmarks of a classic PR push. How so? Well, sifting through the stories, I see a characteristic attempt to shape the conversation by redefining key terms and setting boundaries of discussion. A couple examples:

  • Peak Oil = running out: This shows up in a number of the articles and, for those who follow the issue, it’s an obvious misstatement. Peak Oil is primarily about rates of production, secondarily about the cost of those production rates and then about the net energy yield from that production. But that’s complicated. More casual readers won’t stay with a complicated discussion. An effective PR approach is to simplify the complication in a way that bolsters your position. In this case, inaccurately portraying Peak Oil as a claim that the world is “running out” of oil makes it credible to point to expensive, low flow rate sources like tar sands and shale oil as proof that we’re not.
  • It’s a Theory: A favorite from the playbook, you may recognize it from efforts to discredit the teaching of evolution. The American public, generally speaking, has a poor understanding of how science defines and uses terms. What most people call a theory, science might call a hypothesis – more akin to speculation or, at best, an educated guess. In the natural sciences, the term “theory” is applied to concepts whose explanatory powers comport accurately and consistently with empirical observations. But, again, that’s complicated. Going with the common misconception and consistently associating Peak Oil with the term theory subtly, but powerfully, discredits it in the mind of the casual reader.

So, why the rash of articles now? From a PR standpoint, it may have had something to do with a recent article in the prestigious journal, Nature, in which two respected scientists declared that Peak Oil was not only real, but already here. In PR we call this an appeal to authority. Casual readers likely don’t have access to Nature’s pay wall to read the article or follow the work of either scientist who authored the piece. But, the casual reader will place more credibility in the Peak Oil “theory” if it’s reported that an august publication has published an article by two respected scientists in support of it. If you’re in the fossil fuel extraction business, that’s a five-alarm PR emergency.

Government picks winners, goes sailing

The United States Navy has grand green ambitions. It aims to replace fossil fuels with renewable biofuels in 50 percent of its missions by 2020. In pursuit of that goal, the Navy is planning what is commonly called a demonstration exercise (some might call it a dry run, but the ocean is really wet, so that would probably sound odd) next summer off of Hawaii.

To create a 50-50 mix with fossil fuel for that mission’s planes and ships, the Navy recently placed an order for 450,000 gallons of biofuel with a company called Dynamic Fuels. That company is actually a joint venture between two publicly traded companies – the agribusiness behemoth Tyson Foods and a smaller outfit called Syntroleum Corporation that has specialized in gas to liquids and coal to liquids technologies.

The Dynamic Fuels site says they have a proprietary process in use at a plant, “near Baton Rouge, utilizing its technology to turn animal byproducts such as beef tallow and pork and chicken fat into renewable diesel.” That plant, the site says, may one day be capable of churning out some 75 million gallons of biofuel per year. (Fun fact, the United States uses somewhere in the neighborhood of 140 billion gallons of gasoline per year and about 60 billion gallon of diesel a year.)

So, chicken fat ahoy? No, the Navy order is too big for that. Dynamic Fuels will instead be processing algae-based oil supplied by another company, Solazyme, that the Navy has also bought from – in smaller quantities – in the recent past.

The Navy will pay Dynamic Fuels about $26.60 a gallon for the biodiesel; many times higher than the cost the Navy typically pays for traditional diesel. Some quick math tells us the final order will come to about $12 million. Seems kinda pricey, but according to this story, just last year the Navy paid $242 per gallon for a much smaller biofuel order. So, that’s progress, right?

Yes, yes it is. And progress often comes at a price above the going market rate. So thank goodness the Navy understands the threat that reliance on a finite vital resource represents to its way of life (and/or death) and is willing to pay those higher prices as an investment in companies that demonstrate they might have a promising solution.

Blame it on Hollywood?

“So the world ends Wednesday?”

That was a colleague’s snarky rejoinder to my explanation of the oil export crisis and the implications for our energy future. Perhaps my explanation was off. Or perhaps we’re all suffering from a Hollywood-induced relevance deficit. Human response systems are really good at spotting and dealing with near-term problems. If it’s not a clear and present danger, it’s not relevant and therefore not motivating. Hollywood understands this and formulates its films to capitalize on it – particularly the action and disaster ones.

In a typical Hollywood disaster flick, the world crisis is glaringly apparent – and personally relevant – to viewers within the first 10-15 minutes of the opening credits and will be resolved within about 120 minutes. The real world doesn’t work that way, of course. However, our media-mediated lives often create a bleed-over of Hollywood-style expectations. No category five hurricanes raking the East Coast flat on a weekly basis? Well then, no climate change, obviously. Plants and animals shifting their ranges in response to climate changes is a subtle thing, ill-suited for hardy action heroes like Bruce Willis and Vin Diesel.

This lack of near-term urgency makes it tough to change behavior on important issues like climate change and carbon-intensive lifestyles. People tune out long-term problems. Clearly your warning to them has no relevance to their particular life.

That is the challenge for those in green tech seeking to motivate people. Rather than reflexively grabbing for a “Save the Planet” positioning, stop and look closer for angles that make what you’re offering relevant to issues your target audience is grappling with.

Have an all electric car that makes polar bears want to hug people who own one? Great, but I’m pretty sure that’s not relevant to anyone concerned about rising gas prices and the fact that increasingly complex internal combustion engines and their drive trains are making regular maintenance an expensive proposition. Electric cars are also kinda cool and hip. People like to be cool and hip, even if it costs more. Just ask Steve Jobs.

Find what’s relevant, match it with what you have on tap and then sell. Maybe even get Vin Diesel to star in the commercial.

Insulating against revolution?

insulated coolerIn New England where I’m writing this, insulation is typically thought of as a way to keep the cold out and heating costs down. In hot climates, however, it’s a way to keep the air conditioned cold in and the hot out. Think of your beach cooler keeping the ice from melting and, in turn, your beer cold. Same concept.

A recent Reuters story notes that the Saudi government is undertaking an ambitious program to cut energy use by some 40 percent, “largely by enforcing investment in insulation”. So, why the Saudi push to insulate? They need the money – specifically, the money made selling oil. The Reuters story quotes a Saudi official noting that 70-80 percent of their energy use goes to air conditioning and they use oil to generate the majority of their electricity. With a growing population and an extreme dependence on fossil fuels to subsidize the amenities of a comfortable life (cheap electricity, plentiful food, cars, roads, etc), the Saudis are staring at a classic export land problem.

Almost half of Saudi Arabia’s GDP is directly related to oil exports. Some 75 percent of its government revenue comes from the oil industry. The more oil the Saudis use, the less is available for export, even as production from their aging oil fields slowly declines. The reduction in exports helps push up prices on the open market, increasing cash flow which encourages domestic economic growth and energy use. Eventually, this domestic demand increases enough to materially reduce revenue from oil exports, squeezing subsidies that support things like cheap and plentiful food and fuel. Exposing the national population to unsubsidized prices is politically perilous. Hello Cairo.

Saudi marketIran is caught in a similar rock-and-a-hard-place bind. Indonesia dropped out of OPEC in 2008 when declining production and increasing consumption pushed it from being a net exporter to net importer of petroleum.

So, what does the export land issue mean to us, the oil importers? We don’t generate much electricity in the United States with oil these days, but it certainly is vital to our transportation system. Whether by car, truck, train or plane, our consumer lifestyle is powered by petroleum. Gasoline, diesel and kerosene move everything from people, food and building materials to toys, toothpaste and auto parts. As oil prices rise, transportation costs increase, putting a drag on an already weak recovery. Hard to insulate our way out of that.

Mind the Gap

Just this year, government agencies around the globe, from the United States to Germany to New Zealand, have generated studies warning that world oil production is within a few years of peaking. Projections for peak world oil demand, however, don’t match up with the projected peak in production.

That mismatch is a problem which only gets worse once past the peak. Current world oil production models see a bumpy plateau that lasts a few years and then a decline rate of about five percent a year sets in as a lack of new discoveries fails to make up the difference. The gap between supply and demand quickly becomes a chasm.
Renewables – wind, solar, biofuels – are seen as a way to erase that gap, but practical realities intrude. Take wind and solar. They really aren’t drop-in replacements for most oil uses; most notably in transportation where some 70 percent of oil gets used. Electric cars are still in their Model T era (fancy dashboard electronics aside) and lack the nationwide infrastructure for refueling, maintenance and repair that took decades to build out for gasoline and diesel vehicles. Biofuels also have a number of shortcomings as petroleum replacements, starting with their lower energy density per unit and moving on to their small scale of production that will limit their ability to make any significant contribution to closing the gap.

So, how best to narrow the gap? Well, at the outset, peak oil largely presents a liquid fuels and transportation problem. A real focus on driving efficiencies into the transportation sector would be a good place to start. We’ve lived large for decades because energy has been cheap. That needs to change and the good news is that it can. Trains, for instance, are far more efficient for long haul freight, even if it’s a diesel locomotive doing the pulling. Shorter distance delivery can be done by electrified trucks. On the gasoline passenger car front, 40 miles per gallon is becoming the new 30 mpg here in the United States. And, of course, getting more people on better trains that go more places would be a big help.

The real gap, ultimately, might better be seen as the one between our current scale of living and the one that our current mastery of physics can support. Fortunately, work continues apace on that front, too.

A greener alternative to ethanol? I’ll drink to that!

Following up on my co-generation/symbiosis post from earlier this summer, I came across a great example of this principle in action the other day. This story explains how scientists at Edinburgh Napier University in Scotland have developed a way to turn two byproducts of whiskey production into a more-than-viable alternative to corn ethanol. Treading on stereotypes for a moment, I have to say this sort of discovery would seem destined to have been made by a Scottish or Irish scientist.

The article explains that the biofuel made from the byproducts, butanol, packs 30 percent more energy per unit than does ethanol, can be easily blended into gasoline at refineries, requires no modification to engines that use the blended fuel and does not pick up water, making it far easier to handle and use than the hydrophilic ethanol. This is all terrific, and from a symbiosis standpoint, the really good news is that it’s derived from a waste product created by a useful, needed, everyday manufacturing activity.

Truth be told, this isn’t the first time I’ve come across this sort of useful byproduct in distilling. CNET’s Martin LaMonica covered a story last year wherein Sierra Nevada Brewing entered into a partnership to turn its beer making leftovers into a feedstock for a home ethanol start-up. Out on the road, distilling byproducts are already helping save money while improving safety. Read all the way to the bottom of this Wall Street Journal article from 2009 and you’ll see that leftovers from the rum-making process are an effective supplement to road salt.

So while drinking and driving don’t mix, distilling and driving may be a rather different story.