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Economics Of Agriculture And Natural Resources

Question 1 Energy use trends

Figure 1 Primary energy consumption of the USA 1635 - 2007

1.Trends (1 pt each, 17 pts)

What was the percent change (estimate) in US consumption? (eg Earlier year energy / later year energy) or use this website: https://www.skillsyouneed.com/num/percent-change.html

Although the early dates show zero energy describe that and how you would explain the change. Coal is completed for you. Also it is correct to state that the percent change is “effectively zero.” The first 260 years are done for you.

From 1635 – 1895 (260 years)

Coal - According to the graph, the use of coal was approximately zero from years 1635 – possibly 1815. Estimating year 1815 to be 20 Mtoe, percent change from 1815 to 1895 = ((100-20)/20)*100 = effectively a 400% increase in 80 years.

Petroleum – Based on the graph above, the usage of petroleum was approximately zero from years 1635 until 1895, where percent change was effectively zero. This is likely since Petroleum was not used in America until the year 1895 so no energy consumption in Mtoe would be recorded. Percent change is zero as energy usage, or lack thereof, remains constant throughout this time period.

Natural Gas – According to the graph, the use of natural gas was approximately zero

from years 1635 to what appears to be 1890. During that time, natural gas had not yet

been harnessed as a primary energy source in the US and thus no substantial energy

consumption in Mtoe would be recorded. Estimating year 1890 to be 15 Mtoe, percent

change from 1890 to 1895 was ((20-15)/15) x 100 = 33.3%, effectively a 33% increase in

5 years.

Nuclear – Based on the graph, the usage of Nuclear energy was approximately zero

from years 1635-1895, where percent change was effectively zero. Nuclear energy was

not used in the US until much later, in the early 1990’s. Since energy usage remained

constant (at zero Mtoe) throughout this time period, the percent change remains zero.

Hydro – According to the graph, the use of Hydroelectric energy was approximately zero from years 1635-1890, where percent change was effectively zero. Estimating year 1895 to be 10 Mtoe, percent change from 1893 to 1895 was ((10-5)/5)) x 100 = effectively a 100% increase in 2 years.

Biomass and Fuelwood – Based on the graph, the usage of Biomass and Fuelwood was approximately zero from years 1635 to 1721. Then usage steadily increased until

peaking at year 1870 at around 80 Mtoe. Estimating year 1870 to be 80 Mtoe, percent

change from year 1721, where usage was approximately 20 Mtoe = ((80-20)/20)) x 100 =

effectively a 300% increase in 149 years. Following year 1870 and up to year 1895,

biomass and fuelwood energy consumption decreases, with year 1895 approximately 50

Mtoe, effectively a ((50-80)/80) x 100 = 37.5% decrease in 25 years. This downward

trend appears to coincide with the emergence of other energy sources in the industry,

as around this time period, consumption of coal and petroleum increase.

From 1895 – 1945 (50 Years)

Coal -

Petroleum –

Natural Gas –

Nuclear –

Hydro –

Biomass and Fuelwood -

From 1945 – 2005 (60 years)

Coal -

Petroleum -

Natural Gas -

Nuclear –

Hydro –

Biomass and Fuelwood -

2. Trend Analysis (20 pts)

2a. Explain why natural gas consumption increased so dramatically beginning in 1945. Cite at least one article or reference. (10pts)

2b. Explain why oil consumption declined in the 1970s. Cite at least one article or reference. (10pts)

Figure 2a US net electricity generation Figure 2b US coal production

Figure 3 US average coal prices and recoverable reserve 1950 - 2005

Examine the trends of natural gas and coal in 1955 to 1975 in Figure 1.

2c. Describe the trends of the two energy sources. Do they appear to interact? (5 pts)

2d. Now examine Figures 2a and 2b. Describe what these two figures show. Does this support what you see in Figure 1. Explain. (5 pts)

Examine Figure 3

2e.Look up the definition of “recoverable reserves?” What is the definition? (5 pts)

2f.Describe the trends in Figure 3 from 1971 – 1983. Make sure to talk about all the data lines: price (nominal and real), and reserves. Consider the recoverable reserves “potential supply.” (5 pts)

3 Application of policy to trend analysis (10 pts)

Corkery, Michael. (March 20, 2016). As Coal Future Grows Murkier, Banks Pull Financing. The New York Times. https://www.nytimes.com/2016/03/21/business/dealbook/as-coals-future-grows-murkier-banks-pull-financing.html

Based on the information, data and the article reviewed, how would you respond to this quote and the idea that environmental regulation alone caused coal decline?

“Tougher regulation under former President Barack Obama put additional stress on the coal industry by requiring power plants in some cases to undertake expensive upgrades or shut down. On Tuesday, the EPA said Obama’s plan to curb greenhouse gas emissions from power plants was “overly prescriptive and burdensome.”

DiChristopher, Tom. (August 21, 2018). “Trump administration reveals greenhouse gas rule for power plants to replace Obama-era plan.” Accessed at:

https://www.cnbc.com/2018/08/21/epa-reveals-greenhouse-gas-rule-for-power-plants-to-replace-obama-plan.html

4 Corn and ethanol

Access the NASS website for corn statistics https://www.nass.usda.gov/

1) Go to “Data And Statistics” in the green menu at the top

2) Under “Explore Statistics” select “Crops and Plants”

3) Under “Choose a Commodity,” “Sector” select “crops”

4) Under “Group” select “field crops”

5) Under “Commodity” select “corn”

6) Under “Choose Data Items,” Select “Corn – Acres planted”

Access the data at the top “National Statistics for Corn”

4a.What is the percent increase or decrease in “Corn Acres planted” from 1900 – 1990? What was the percent increase in corn production from 1990 – 2017? (10 pts)

Under “Charts and Graphs” access corn Acreage by year. You should see a graph from 1999 – 2019.

4b. Viewing this graph there appears to be a 24 % increase in corn harvested and a 20% increase in corn planted in years 2006 – 2007.

What 2005 policy may have caused an increase in corn production? (5pts)

4c.Can you find data to support foreign oil dependence decreased during the period 1990-2017? Summarize briefly and cite the data or article to support change in foreign oil dependence causes in the last 20 years. (10 pts)

4d. Read the article Splitter, Jenny (Oct 25 2018). Food vs. Fuel What Trumps Ethanol Policy Means for the Food System https://www.forbes.com/sites/jennysplitter/2018/10/25/food-vs-fuel-what-trumps-ethanol-policy-means-for-the-food-system/#4ee221a04c38

Is this an unbiased article? Why or why not? (5pts)

What are your thoughts on non-renewable and renewable energy after learning more about policy interaction? (3pts)

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