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Management Side
Technical Side
Fear and Ignorance
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The current turmoil in energy supplies is affecting the pulp and paper industry as well as all other aspects of life. What we need to do is step back and consider what is really causing this turmoil.

We are definitely at an inflection point as far as obtaining energy from familiar sources is concerned. The turmoil in the Middle East, the depletion of petroleum sources in places acceptable to explore for oil, and the continued rise in demand for “portable” energy, that energy needed by moving objects, has put strains on the system. It is right and good that we look for alternatives to make up for the shortfalls in supply and demand, and look for ways to reduce demand.

These opportunities, however, have brought about some negatives, including a new crop of charlatans of the type that always appear when a “gold rush” condition exits, hysteria, and dislocations in other supply and demand issues (such as food).

What we have failed as society and humankind to fully grasp, is, however, even more important. First, the oil sands of Canada, second only to the reserves of Saudi Arabia, make money when oil is over USD 45/barrel. The only issue there at the moment is how fast production can be ramped up. The oil sands produced nearly a million barrels of oil per day in 2005 and are expected to top out at around 5 million barrels of oil per day. Most of us are ignorant of this source of energy.

We are afraid to drill in some areas. It is estimated by some sources that as much oil exists off the continental shelf of the United States as has ever been found on land. However, most of this is off limits due to fear of spills and fear of unsightly rigs. Proposals have been made to drill off Florida, for instance at a distance so far as to keep the rigs, if not over the horizon, at least so far away they cannot been seen from shore. Hysteria keeps this option off the table.

And finally, there is nuclear. More people have been killed mining coal in the United States this year than have ever died from nuclear accidents here (26 vs. 0).

The current issues sum up as an unwillingness to use nuclear power that is clean, safe, economical, and available primarily due to the fear and ignorance of the general public.

I will be discussing the entire energy issue in greater depth and from the point of view of the pulp and paper industry in the 01 December issue of "The Thompson Private Letter."


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