The current litmus test for being on the side of the energy angels seems to be the trinity of "fire Schlesinger, favor a synfuels crash program and keep prices down." This successfully relieves one from having to face the unpleasant reality of having been expelled from the paradise of low-cost, abundant, reliable energy.
It is a mood shared by legislators who would rather be wrong than do nothing and want to close the Department of Energy but are ready to undertake a multi-billion-dollar program. The air is full of references ot World War II synthetic rubber plants, the Manhattan Project and Apollo. Why not the "energy moonshot?"
Why not? Because it confuses a one-time highly localized scientific technological "spectacular," designed, funded and used by the government, with a vast, permanent industrial enterprise that must eventually prove itself in a situation where it competes with alternatives. One of these would be a changed consumption level and mix, such as would emerge either from the real rather than the controlled and subsidized prices of current energy supplies, or from modest subsidies conceded to new energy sources as long as price-controlled fuels remain artificially depressed. The investment cost of a synthetic liquids industry producing 1 to 2 million barrels per day would range between $30 billion and $60 billion (not counting future inflation-caused cost increases). Would it not make sense to ask what else such sums to be committed in the next five to six years might buy for us and with what effect on oil imports? Surely, a heck of a lot of insulation in buildings!
When the synfuels enthusiasts tell us that "we have done it before" - synthetic rubber, Manhattan Project, moonshot - they not only neglect to mention that they were hardly projects destined for the ordinary marketplace where competition rules, but they are also less forthcoming about the dimensions and the setting. Consider these items:
To produce 1 million barrels a day, we must find 20 sites for 50,000 barrel-a-day plants, each larger than a large oil refinery (the country has been able to find only one single acceptable location for a new grass-roots refinery in the last 10 years!).
Each 50,000-barrel plant would use up three times (a 100,000-barrel plant, six times) as much coal per day as a 1000-megawatt coal-burning power plant.
Since no such plants have ever been built, there should be room for learning (has the history of the nuclear power industry, with its never-ending retrofits and down times told us nothing?). Thus, the idea of even a 1 million barrel-a-day industry by the mid-1980s is ill-conceived and guaranteed to maximize cost, quite apart form the likelihood that even the first such plant would probably not be delivering oil till late in the next decade - regardless of whether we build few or many. (Building 20 to 40 simultaneously would merely maximize wastefulness and delay.)
None of the contemplated investment includes investment in supporting industries, availability of managerial manpower, etc., and, of course, this timetable does not provide for litigation. Synfuel enthusiasts may smell the consensus in the air, but would consensus persist when theory is translated into practice and the first shovelful of excavation dirt is dumped?
There are good reasons and bad for getting on with a synthetic-fuel capacity. To learn and to have something to gradually replace depleting oil and gas resources, should other sources disappoint us, is a good reason; a multi-billion dollar "moonshot" enterprise as a short-term means of influencing the oil market is a bad one. Here, frustration speaks more loudly than logic. We are angry because we can no longer have things on our terms. We regard prices as a problem, not a solution. We think it wiser to fix the speedometer than learn the true speed. And so we turn from the humdrum business of adjusting ot higher costs and prices to the technological spectacular. We are kicking the table leg when we should learn to avoid colliding with it in the first place.