The end of Las Vegas
Why alternative energy sources won't save us in the post-oil age

BY KEVIN CAPP

The room beamed with good intentions and positive thinking. So many ideas and innovations. You just had to believe.

On Aug. 27, inside the Dialogue Center at the Las Vegas Springs Preserve, the much-hyped $250 million beacon of alternative energy possibility, U.S. Sen. Harry Reid told the small group of concerned citizens and green business people in attendance that the time had come for Nevada to go renewable and lead the nation toward a clean energy future. Everybody agreed it was the right thing to do.

As Al Gore has said over and over, the planet is sick, and carbon dioxide emissions are to blame. Only hard-liners with a lefty bone to pick deny a big, fat storm's brewing. The rest of us, including the good-hearted folks at Reid's energy meeting, know global climate change is the real deal, and we'd better get to work and stop secreting massive amounts of black smoke into the fragile atmosphere. Yes, goes the mantra, it's time to go green, to substitute our use of fossil fuels for alternative energy supplies, and keep on keepin' on with business as usual. Simple as that.

"Global warming is here. Why? Because of fossil fuel," Reid told the audience. "So what we need to do is stop using fossil fuel." But, he added, "People need to be incentivized to do this."

To that end, and to his credit, Reid has been doing a lot more than doling out platitudes. In a torrent of press releases, he has announced his opposition to three proposed coal plants; hailed a decision by the Bureau of Land Management to lease 123,000 acres of Nevada land for geothermal exploration; sung the praises of a Senate energy bill that he says will ramp down our oil use and ramp up renewable use; and, most recently, highlighted a report that shows coal is an unpopular energy source as a means to push the Silver State into a leadership position on all things renewable. (His only flaws seem to be a decidedly non-green coddling of a politically supportive Nevada mining industry, and helping developer Harvey Whittemore build a giant suburb in the middle of nowhere.)

Yes, the man's got ideas.

So did the folks at the meeting. They talked about all the usual, obvious solutions. We should harness the power of the sun; use soybeans and fry grease to run the cars; create a hydrogen economy; and all the other stuff Americans have been hearing about of late to lower those nasty emissions destroying Mother Earth. Best part is: We'll get to continue living the same way -- tooling around in our cars, relaxing in our air-conditioned homes. Only now we'll finally be treating our old Momma with some respect while we do it.

Green smoke

Many energy experts say this a dangerous myth, one that will prevent us from adapting to a monumental change with no historical parallels. While it's surely imperative we clean up our act in the name of preserving our planet, a potentially even bigger issue than that of global climate change is staring us down: an oil shortage.

These critics say the American way of life as we know it is on the wane. They say our addiction to fossil fuels and all of the glorious achievements that accompanied our discovery of oil back in the mid-18th century have convinced us that the way we live is an inalienable right that will continue on into eternity. Because we have technology. Because we have ingenuity. Because we're Americans.

Fact is, none of that matters in the face of geology, experts say. Oil is a finite, fast-diminishing and, perhaps more importantly, unique resource that no amount of so-called alternatives can replace. Even if they could, we may already be too late to put together a plan.

"The renewables are not ready," says Jan Lundberg, an oil industry analyst. "They are not going to deliver energy the way cheap oil used to."

James Howard Kunstler, one of the most prominent speakers and prolific writers on the impending oil crisis, says of the push by Reid and other politicians to switch out energy sources: "What they are doing right now is blowing green smoke up the public's ass."

What's more, the issue isn't necessarily whether we run out of oil, but what happens when shortages throw the cost of energy into a schizophrenic tizzy of price spikes punctuated by brief, illusory drops, says Richard Heinberg, author of The Party's Over. Many credit him with being one of the first intellectuals to bring this issue to public light. "It's going to go up in a stair-step fashion, because oil usage is seasonal. March, April next year, we'll probably see softer prices. But softer in comparison to what? A few years ago, a soft price was $20."

Now oil hovers around $80 a barrel, a jump from around $60 earlier this year. "Reflect on what this is going to mean to the airlines and tourism in Las Vegas," says Kunstler. "You're going to be dealing with an increasingly tapped-out public. They're simply going to have a lot less money to toss into the casinos."

The endgame is even more frightening, surreal and just plain unimaginable. As oil peaks and prices soar, these experts say it will mean nothing less than the end of our air-conditioned, central-heated, car- and airplane-dependent neon metropolis, and it's coming soon, green revolution be damned.

A peak oil primer

"As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented." -- from "Peaking of World Oil Production: Impacts, Mitigation, & Risk Management," a report commissioned by the U.S. Department of Energy, published February 2005

Although it's written in the sterile language of bureaucrats, the Hirsch Report -- named for its lead author, veteran energy analyst Robert L. Hirsch -- nevertheless paints a dark portrait of a world in disarray, if we don't act soon enough to wean ourselves off oil. While the term may sound like the name of some exotic religion, peak oil is a fairly straightforward concept that belies its devastating consequences for industrialized nations, which depend on access to cheap oil for almost every aspect of daily life, from getting to work on time to locating the ingredients grandma needs to make her famous apple pie.

Consider: Nevada, with its relatively small population of 2.5 million people, consumed almost two million barrels of petroleum in 2004 for asphalt and road oil alone, according to the Energy Information Administration, the statistical arm of the Department of Energy. That's a fraction of the more than 48 million barrels we gobbled up that year for everything from jet fuel to gas for cars. With growth, our demand will only increase.

Because it means the point at which all of the world's reserves are depleted by half, global peak oil spells doom for meeting that demand by creating an unstoppable downward trend in the amount we can pump into our bigger-is-better economy. Compounding the problem is that, as we move farther down the slope, the more energy -- fueled by oil -- it takes to get less and less.

However, as the Hirsch Report notes, "It is important to recognize that oil production peaking is not 'running out.'" Indeed, even after peak, there will still be oil left. The problem isn't total depletion so much as it is the turbulent ride toward it.

Predicting when this will happen is tough going for myriad reasons. For example, no politician -- including President George W. Bush, who once employed energy-investment banker and peak oil expert Matthew Simmons as an advisor-- wants to tell his constituency that life as they know it is kaput. And no oil company exec wants to admit to shareholders they're invested in an industry in decline, especially as it earns record profits.

Despite such problems and others on the geopolitical stage (the Saudis, for example, closely guard their most sensitive state secret: how much oil they have left), experts have constructed a plausible window of time when peak might occur, which doesn't bode well for Vegas. According to the Hirsch Report, "Even the most optimistic forecasts suggest that world oil peaking will occur in less than 25 years." There are others who say it's already happened.

Peak oil commentator Heinberg points to the latest figures released by the International Energy Agency, which shows the global production of liquids dropped by 854,000 barrels per day from August 2006 to August 2007. In addition, we're pumping out 1.53 million barrels per day less than the all-time high of 86.13 million extracted in July 2006. Translation: The sun may have already set on our ability to meet world demand. (The latter number, according to a report released earlier this month by the Association for the Study of Peak Oil & Gas, stands at more than 20 million barrels per day for crude oil in the United States alone.)

This is not good.

Running that close to the bone means any systemic shock -- a hurricane that damages drilling platforms in the gulf, a terrorist attack on oil pipelines in Nigeria, an unexpected cold snap in the northeast -- could cause prices to skyrocket, impacting everything from costs at the pump to costs at the grocery store. What's worse, the less oil we have, the less it takes to zap the price upward.

It's an inevitable part of peaking, says Byron King, formerly a geologist with Gulf Oil, which was absorbed by Chevron, and now an energy and natural resources analyst with Agora Financial. "We've built an entire industrial civilization around [oil]," he says. "Now the question is: Can we transform it fast enough?"

The great green hope

"More electric energy, whether from renewables or coal, does not address the liquid fuels crisis posed by globally peaking crude oil. There is no green energy economy around the corner." -- Jan Lundberg

Harsh words, especially given our collective faith in so-called energy alternatives and the magic of the market. This doesn't, however, translate into zero options for electrical power, especially in Nevada, where an abundance of sources ripe for exploitation exist, many of which are on display at the Springs Preserve.

Cruising around its 180 acres of clean-burning infotainment, one gets bright-eyed with optimism about our ability to adjust in the face of an inexorable oil decline.

Above the parking lot sits an array of solar panels capturing energy all day long. Attached to the building are a total of eight "cooling towers" that essentially act as swamp coolers, sucking in hot air through a moist membrane and releasing it back out in cool blasts, even in summer.

Meanwhile, high windows shaded by awnings ensure "you're not getting the direct heat that comes along with the sun shining," says spokesman Jesse Davis. And this catalog of green goodies doesn't even include the insulation, which is composed of renewable materials that even sound eco-friendly, such as "straw bale" and "rammed earth."

While Davis says "we can't generate all of our power naturally," about 70 percent of it is generated on-site. He adds, "We live in one of the most hostile environments anywhere. And because of that, it requires more energy consumption. It's all about ensuring Las Vegas has a sustainable future."

Currently, Nevada's primary energy sources are anything but sustainable, since we rely largely on natural gas and coal to supply electricity, according to the Energy Information Administration. Same goes for Vegas. According to Nevada Power, 37 percent of its plants generate electricity via natural gas, and 63 percent use coal. The outlook is gloomy for both, but for different reasons.

Because coal is quickly becoming the bastard child of energy sources, with almost two dozen proposed coal projects getting axed since 2006, according to the Department of Energy, the future in our new, climate change-conscious world looks somewhat dim for the resource that launched the Industrial Revolution.

Not so with natural gas. Its future looks grim for the same reason oil's does -- supply scarcity. Recently, Southwest Gas Corporation delivered a report to the Nevada Public Utilities Commission warning of long-term supply problems in the face of a 4 percent increase in sales per year in Southern Nevada. The report also noted there was no conservation program on line to address it.

Heinberg says this isn't unique to Nevada -- it's a national catastrophe in the making. "We're facing a natural gas train wreck. We're basically drilling all the time, and we're getting less in return. That means you got to drill more and more wells. Yet the amount that's being produced is stagnant and really declining."

This is just one part of the fossil fuel saga, and one that should be remembered anytime someone mentions trading our use of conventional oil for natural gas. As the Hirsch Report flatly states: "Because of the time required to make major changes in the U.S. natural gas infrastructure and marketplace, forecasts of a decade of high prices and shortages are credible."

Thankfully, there are alternatives being developed. But, again, the question is: Will they be ready in time to head off peak oil, and, perhaps more importantly, will they provide the same level of energy? It depends on who you talk to, and what scenario is imagined as we push toward a re-shaping of our energy policies and infrastructure.

Robert Boehm, director of UNLV's Center for Energy Research, says we'll see a future powered by a variety of energy sources, as there is no one replacement for fossil fuels. He points to a massive solar project at Nellis Air Force Base anticipated to generate more than 25 percent of its power, as well as various projects he's involved in using solar energy.

Eventually, development of solar panel technology, especially storage, will allow us to run the Strip and beyond, he says. Plus, "after two or three years, you've usually paid off the energy that you've used to make it."

Still, the trouble is that solar is expensive compared to, say, coal, which makes many people shy away from investing in it -- at least until that magical market catches up to the times, and forces costs down. Boehm says technology needs to catch up, too. "The larger the system, the harder it is to store electricity. Your batteries have to get really large. And batteries are still problematic."

Heinberg adds that the photovoltaic panels used to harness the sun's energy are composed of rare elements such as gallium and indium "that are depleting pretty rapidly. There's just not that much in the earth's crust. If we're talking about replacing all the coal plants with photovoltaics, we find ourselves" coming up short.

Yet Reid publicly stated as recently as June: "If we were to develop the solar resources of just 90 square miles of Nevada, we could have the power requirements of the entire nation."

Lundberg says the assertion is "totally misleading, because loss over transmission lines is massive." Adding, "One thing to keep in mind is that a hell of a lot of petroleum energy goes into making solar and other energy alternatives." Meaning, if oil is scarce and thus more expensive, so is everything associated with it, including solar energy.

Another possibility is geothermal energy, especially in Nevada, which former oil geologist King labels "the Saudi Arabia of geothermal power." It's a commodity energy company Ormat specializes in.

Ormat's Public Policy Manager Paul Thomsen says geothermal is a win-win for everyone: It's clean, consistent and self-sustaining once it's found.

Here's how it works: You find a hot spring, geyser or some other similar source, drill a hole around 2,000 feet deep, bring up the hot water, install a heat exchanger (basically a tube and shell pipes close to each other), which then heats "working fluid" like an old radiator with a glass of water on top. This, in turn, expands when it's vaporized, generating pressure enough to turn a turbine. The energy is then captured and used again, says Thomsen.

The rub -- one of them, anyway -- is geothermal exploration is costly, because geologists must first search for a suitable source, then drill a "million dollar hole in the ground," says Thomsen. And guess what? Drilling requires petroleum.

But Thomsen says once the plant is running "it's entirely geothermal. We use the drill rig one time."

Nobody thinks in the post-cheap oil world we'll rely on one energy source the way we currently rely on fossil fuels, which provides more than 85 percent of everything we take as a "natural" part of life -- from electricity to transportation. Over the next 20 years, demand is expected to increase "even with aggressive development and deployment of renewable and nuclear technologies," according to the Department of Energy.

Says Thomsen, "Ormat's position is that [geothermal] should be part of a larger portfolio."

King likes Ormat, and he likes geothermal. But, again, the problem is one of timing. "On the backside of peak oil, your energy costs are going to be more expensive. Whether it's a geothermal well or an oil well or a gas well ... the cost of all your inputs are going up. It's going to be a lot harder because everything is going to be more expensive."

Not to mention the time associated with bringing a major project to fruition. "You don't do this stuff in two or three years. This is long term." Adding, "We need crash programs."

As for wind, many say it doesn't give much of a return on energy-invested, since storage when the fans aren't turning is still a problem -- not to mention that the turbines are composed largely of steel (read: coal) and carbon composites.

Bottom line, says Kunstler: "Without cheap air conditioning for virtually everybody, places like Las Vegas and Phoenix will not function." Adding "What we're really in the process of seeing is the beginning of a big campaign to sustain the unsustainable, and it will end in tears."

Car wrecks and plane crashes

"We've designed cities with sprawl in mind. Look at Phoenix, look at Las Vegas. We've built a country where everything is 45 minutes away from everything else." -- Byron King

Travel to Summerlin, and what do you see? Rows and rows of houses whose only real variation is size and the shade of beige. And there's another constant: They're inhabited by commuters, car owners who can't live without their vehicles. This is the legacy of suburban sprawl and the construction of the infrastructure -- highways, gas stations, repair shops -- that attends it.

All that driving leaves us here in our strip-malled, McHoused, multiple-laned valley car dependent to such an extreme as to make life near-impossible without them. Fretting about gasoline prices, not to mention the earth-killing fumes spewing out of the tailpipes, are the ancillary benefits to the way we've chosen to inhabit our desertscape. When peak oil hits, experts say car travel will be among the first things we reduce as our pockets tighten.

How will the California weekend warriors get here then?

Matthew Gregori has a partial solution: biodiesel. It's made from a variety of sources, from vegetable oil to soybeans to animal fats, not crude oil extracted from the earth and refined in plants. "We're not tied down to anything," he says of Biodiesel of Las Vegas, where he's vice president of development.

What's more, biodiesel is cheaper than standard diesel, burns cleaner and isn't subject to the kind of shocks the oil market regularly experiences. Still, he admits it's not a panacea: "It's going to be part of a larger scheme toward energy independence."

Perhaps the cleanest scheme to maintain our auto-centric lifestyles is hydrogen. (It's one that President Bush supports, having set aside $243 million for fuel cell research in 2006.) Boehm says that "while hydrogen is a very arguable topic," it's a plausible solution, since hydrogen atoms are abundant, as they're attached to many others, including those of fossil fuels. Good news is, it's also found with water -- you just have to separate the hydrogen atom.

"In a sense, it's like electricity -- electricity you have to make. You don't find it laying around," says Boehm. "You basically fill up one tank with water. You take it to the electrolyzer and it would make hydrogen out of it. You fill up another tank with your hydrogen. At least conceptually, you got a really renewable kind of source. Practically, there is some issue though."

One is that in a water-starved (or starving) desert city like ours setting up a battle between, say, whether you drink and whether we drive is "not a trivial concern," says Boehm. Plus, he continues, "You still got a lot of infrastructure to put in."

If we're staring at fast-diminishing oil reserves that are causing prices to skyrocket, let alone a major supply interruption that suddenly leaves us on or near empty, such a massive, long-term undertaking may not make it in time. Which means we'll have to find another way to get the groceries on the shelves and the kids to soccer practice.

That's, of course, the beauty of biodiesel, not to mention other "natural" sources we're hearing a lot about lately -- the existing infrastructure is basically there. Most wouldn't argue the benefits of recycling fry grease for use in transportation (although, as Heinberg notes, "There's only so many McDonald's restaurants"), but almost everyone agrees growing fuel is a disastrous "alternative." The reason? It sets up a basic competition between what we eat and what we burn in our tanks, which is why King calls it "deathanol."

All these pros and cons make it tough to figure which way to go. "Swapping out the motorized vehicle fleet is going to take 15 to 20 years at least," he continues. "If we knew what were going to swap it out into."

The plane truth

"We don't have planes that will run on anything but jet fuel." -- Richard Heinberg

Airplanes are another matter with even fewer options than cars in a peak oil world. Park on the north side of Sunset Road, just west of Eastern Avenue, and what do you see? Plane after plane landing and taking off from McCarran, often delivering that most precious of Vegas commodities -- tourists.

Currently, 25 percent of the airlines' operating costs is devoted to jet fuel, says industry analyst Ron Kuhlmann. And with the rise of fuel, of course, comes the rise of ticket prices, which could significantly cut down on those 38 million visitors we receive yearly.

Says King, "Las Vegas relies on the ability of people to get there cheaply and easily, which may not be the case in a world of expensive jet fuel."

So what about alternatives? None are currently in use. Billionaire Richard Branson, owner of Virgin Atlantic Airways, is attempting to develop airplanes that run on biomass -- that is, fuel made from organic material -- to help ease complaints about greenhouse gases, but, as Kuhlmann says, for that to happen, "We'd better get busy and build some more earth." In other words: Its limited supply will make it ridiculously expensive.

While electric cars are certainly possible as replacements to the combustion engine (though moving from lead-acid batteries that are prone to "crap out" needs development, says Boehm), the airline industry isn't there yet. "There are some people working on it," says Heinberg. "But they're talking about two-seaters, and that's still pretty much in the future."

Nevertheless, Kuhlmann remains optimistic about the prospects for the airline industry to adjust. He says when jets were first developed, they were terribly noisy, causing many people to complain, so the engineers came up with quieter engines. As such, the airlines' fuel woes will be subject to the same sort of creative force, he says. "If they show they need it, they will build it."

Kunstler says that's the most common misconception about how to pull ourselves out from the oil drain. "So many Americans, including people who ought to know better, have drunk this Kool-Aid telling them that technology will be used as a substitute for energy. That's going to be the cornerstone of the trouble."

This is the end

"Both Phoenix and Las Vegas were developed in places that have poor prospects for supporting large numbers of people, and it was enabled during a brief period of history solely by cheap energy. We are now leaving that era behind." -- James Howard Kunstler

It's anybody's guess how the slide down what King labels "the backside of peak oil" will go, but no one doubts the seriousness of the situation. "The Hirsch Report is all I need to let people know that you can't start reacting to peak oil once it hits. When they say severe economic hardship, that's bureaucratic language that they've had to tone down. They can't say the shit's gonna hit the fan," says oil industry analyst Lundberg.

When you consider how much we depend on oil not only in Vegas, but in the whole country, the prospect of a decline and all its attendant catastrophes becomes clear. From pesticides used in industrial agriculture, to plastic sandwich bags used in suburban homes, to the IV tubes used in hospitals, the fulcrum of the entire U.S. economy is petroleum, and lots of it.

Although we may not recognize it when peak oil finally dawns, the repercussions will be massive. Says King, "Certainly, within the next five years, we're going to feel something. Things are going to feel different. And a lot of it is going to depend on who gets the naming rights."

Will we blame it on Mexican oil reserve supplies suddenly slumping off? A continued housing crisis? A hurricane? "For as bad as Katrina was, there was still enough slack in the system," continues King. But now: "World demand is up, world supply is static. Another Hurricane Katrina ... would probably push things over the edge [so] that we would never get back to the way it was."

In Las Vegas, such a scenario would undoubtedly result in a population contraction, a mass exodus of necessity to other states not unlike that which occurred after Katrina. But, worries Heinberg, "How welcome they'll be I don't know."

Adds Kunstler, "Places like Phoenix and Tuscon and Las Vegas will be faced with problems beyond many of the problems faced by other cities." And the alternatives, even if they're developed in time, won't save us. "We are not going to run Wal-Mart, Walt Disney World, and the interstate highway system on any combination of alternative fuels. Instead, reality is going to compel us to make very different arrangements for the major activity of daily life."

Especially in the unstoppable city of Las Vegas.