Sunday, January 14, 2007

More on Energy, Economics, and just plain saving

The earlier post on Ethanol generated some spirited discussion over here at the Eagle and Child. It seems I should do more energy related topics (since the Arts series doesn't seem to be generating much interest -- never fear, I'm still plowing ahead with the arts -- it's a topic I'm interested in working out -- more on that tomorrow, perhaps).

Smythe (welcome to the Eagle and Child, by the way -- good to hear from old high school friends) made some very interesting comments about the impact of increased ethanol production on agriculture. Unless I miss my mark, her comments were based in real experiences in Brazil. Brazil moved to an ethanol based fuel system several years ago (see the wikipedia article) -- but one of the problems they encountered was in their agricultural practices. Many farmers in Brazil still practice slash and burn techniques that leave the soil depleted and pump a lot of smoke into the air. Of course, such practices were abandoned in the United States after the dust bowl travesty of the 1930s. But she raises an interesting point about unintended consequences coming froma spike in demand of one particular product.

John, on the other hand, took issue with the concept of government mandates driving this exploration into ethanol, preferring instead a market driven approach toward such fuels.

Both Smythe and John have points -- interestingly, the Cincinnati Enquirer had an article today demonstrating there is a market demand and the demand is driving exploration into more than simply ethanol. The article is about Proctor and Gamble's exploration into alternative sources of energy for fueling their supply chain. According to the article, increases in fuel expenses have cost this Fortune 500 company over $1.5 billion dollars in the past two years. They've been able to absorb the costs, but such costs are driving them into looking at alternatives. The first paragraph mentions a non-oil based steam plant that Proctor is building in Mexico to power almost all their operations in Mexico. "This unit in Apizaco, Mexico, will open this summer and will virtually eliminate P&G's reliance on the country's power grid. It's one of the early generations of what P&G hopes can be new energy sources for some of its plants that will help reduce its dependence on oil to generate steam and electricity."

However, being the shrewd outfit that P&G is, they are not putting all their eggs in one basket "Proctor is studying windmills in Europe, solar power in California, and even methane gas generated from a local landfill in the Midwest, said Keith Harrison, global product supply officer. The movement extends to raw materials as well. Procter has experiments underway in Malaysia and Indonesia to produce raw materials from palm oil that eventually could help make ingredients in shampoo, detergent, or other products."

If a market behemoth like Proctor is putting it's weight behind finding alternatives to petroleum use, you can bet a few things 1) they will likely succeed in generating a number of options that really work 2) they will develop a number of alternative lines of business in the energy providing sector -- likely spinning them off because they're not a part of their core consumer products business 3) somebody's going to make a lot of money -- and it will likely not be people in Saudi Arabia, Venezuela, or Norway (top oil producing countries).

I feel the pain of rising energy costs as well -- we just purchased a new washer/dryer set (it was about time -- our old ones were wearing out). By choosing an upright washer, we save over 40% on the amount of water used -- and without an agitator, my shirts will suffer much less wear and tear. We also chose low energy consumption models, giving us a significant energy savings over the life of the washer/dryer. I've written earlier about use of compact flourescent bulbs in our home (we had our first one burn out yesterday -- after 6 years of use!).