Hill's economic forum (part 3): energy dependence

This session was excellent: an incredible set of panelists in terms of both array and knowledge; a discussion that was well-moderated by my buddy Kyle Forinash (a physics prof at IUS); a lot of interesting facts about energy use and extraction; and some provocative looks into the future of energy technology.

The panel included Jim Stanley (the president of Duke Energy Indiana), Bob Babik (director of the GM public policy center), and David Rollo (a knowledgeable city council member from Bloomington). Babik was the optimist-- along the lines of an economist with faith in market processes to deal with exhaustible resources through conservation (with higher prices) and technological advance (responding to the profit motive). Rollo was the Malthusian-- along the lines of an environmentalist with little faith in markets and technological advance, some faith in government, and a passion to conserve resources. Stanley was in between-- appropriate as someone in a private sector industry heavily regulated by the government.

Kyle knows a lot about this (broad) field and did a great job in asking questions (to begin and follow-up), interjecting knowledge where appropriate, and handling tough/hostile questions from the audience.

-98% of electricity in Indiana is produced with coal
-17-18% of energy in the U.S. is nuclear; in France, it's 85%
-the current limits of biofuels in terms of energy efficiency (energy extracted vs. energy needed to produce it)-- but Babik made a great point about the possible/probable gains in energy efficiency of biofuels after we've done this for awhile

-from Babik, the beginnings of hydrogen car technology-- but from Forinash and Rollo, the seeming limits (again, the energy required to turn hydrogen into fuel)
-from Babik, updates on the electric car and hybrids combining electricity (for short trips) and gas (for longer trips)

Three other observations:
-Rollo favored subsidies for rail and light-rail. He may well be correct that rail is more efficient transport than trucking. But this is best handled through appropriate taxes on trucks (aligning with the costs they create for roads) rather than subsidies for trains.
-In responding to the observation that fuel economy is virtually unchanged over the last 20-25 years-- while cars have gotten 30% larger and quicker: Babik noted that fuel efficiency must have increased by the same amount. Car companies are equally effective in moving us around in bigger and faster cars. Babik pointed to consumer preferences as the "driver" for such cars in the market. (No one noted another contributing factor: the lower gas prices of the last 25 years-- until recently.)
-Babik was strangely ok with CAFE standards (something Baron advocates). He said the proposed regulations were modest and thus, not problematic-- and even good, because they would encourage the market to go the proper way. In a sense, such regulation is no problem since it will be imposed on all companies. In another sense, they may disadvantage American manufacturers relative to foreign manufacturers who have shown a greater ability to build more fuel efficient cars. But perhaps Babik also realizes that struggling car manufacturers could probably get such restrictions waived or relaxed if they were pinching them too much.

I don't suspect Hill will duplicate this effort in the middle of a campaign season. But regardless of who wins the 9th District in 2008, Hill's inaugural forum effort is worth repeating.