American Energy Independence

American Energy Independence

 

A powerful idea is spreading through America. It is a call to this generation to take action and decide the course of history by declaring and fighting for American Energy Independence.

Following the 1973 Arab oil embargo, the idea of energy independence captured the imagination of the American people. Then during the 1980's, increased automobile fuel efficiency and new oil discoveries created a surplus of oil on the world market, and America’s enthusiasm for energy independence faded into memory. Now, more than thirty years after the oil embargo, re-awakened by the terrorist attack on 9/11 and war in the Middle East, the idea of American energy independence has returned with a vengeance, becoming a powerful force shaping the political views of a new generation of Americans.

Oil is no longer viewed as just another commodity. In the minds and hearts of the American people, oil has become associated with terrorism, political corruption, corporate greed, and global warming.
The 1973 Arab oil embargo interrupted the flow of oil causing severe gasoline shortages and long lines at gas stations. The embargo exposed America's growing oil dependence and gave the American people their first warning of the price they would pay for continued dependence on imported oil. The 1979 Iranian revolution interrupted the flow of oil again — this was the second warning, signaling the urgent need for American Energy Independence. The 1991 Persian Gulf War was a military intervention to stop one dictator from taking control of Middle East oil — this was the third and most severe warning. Failure to make energy independence the nation’s highest priority after the Gulf War demonstrated that the United States did not have the political will to free itself from dependence on foreign oil.
September 11, 2001 was a preview of America's future – one possible future.
America stands at a crossroad, a choice between two very different futures. One choice leads to increased dependence on foreign oil and a future dominated by terrorism and war. The other choice leads to American energy independence and a world economy that is no longer desperate for oil.
In 1973, Middle East oil producers embargoed shipments to the United States in response to the Yom Kippur War. At the time, the USA imported about 35 percent of its oil. Since then and through six different Presidents, America’s dependency on foreign oil has increased to more than 60 percent.
Today, the world consumes over 80 million barrels of oil every day (over 30 billion barrels per year); the USA alone consumes over 20 million barrels per day (over 7 billion barrels per year). At an average price of $60 per barrel, the global petroleum industry is a 1.8 trillion dollar a year business. Development of alternative energy to free the world from oil will create a seismic shift within the economic foundation of the world.
Energy is not oil. Energy can be taken from other natural resources. Oil is merely a convenient source of energy. With the help of new technology, America’s energy needs can be obtained from sources other than petroleum.
American technology has put a man on the moon, mapped the human genome, and successfully landed robotic exploration vehicles on Mars. It seems reasonable to believe that American scientists and engineers could also develop environmentally safe alternative energy technology that would free America from oil dependence.
Unfortunately, some people want to discourage investment in alternative energy, arguing that oil is cheaper than other sources of energy; therefore, they argue, alternative energy will not be competitive in a free market economy.
When the rules of the free market undermine the security and prosperity of the nation, the American people need to change the rules. A free market is the engine of prosperity and economic growth, but unrestrained greed can hurt people; for example: Enron. Unrestrained greed, dishonest executives, foreign oil monopoly, the added expense of protecting the country from terrorism, and the fact that the Global Economy is far from being a level playing field, all work together to undermine the security and prosperity of America.
In the next twenty years, if American oil dependence is allowed to continue as it has in the past and the price of oil continues to be high as expected, more than Five Trillion Dollars will be transferred from the United States economy to foreign countries in exchange for imported oil. If U.S. oil imports average 12 million barrels per day at $60 per barrel, over the next twenty years, the total amount will be $720,000,000 per day times 365 days equals $263 Billion per year [rounded], times 20 years equals $5,260,000,000,000 which is Five Trillion Two Hundred and Sixty Billion Dollars. If the U.S. fails to curb its oil appetite, imports will grow beyond 12 million barrels per day by the end of twenty years, and shrinking global oil reserves combined with increasing global demand for oil will cause the average price per barrel to exceed $60.
It is time for America to lead the development of new energy technology that will free the world from dependence on oil. Freedom from oil dependence will cut-off the flow of oil money to the Middle East and put an end to the financial support of militant Islam.
The global expansion of militant Islam is financed by Middle East oil wealth. In the U.S. oil means gasoline. Every time you fill your gas tank, some of the money will find its way into the hands of Islamic extremists who are planning the next terrorist attack.
Is there anyone who still cannot see the connection between the flow of oil money into the Middle East and the flow of terrorism out of the Middle East?

“The rise of terrorism by militant Islam against the United States and the West coincided with the rise in oil prices of 1979-80 and the subsequent transfer of hundreds of billions of dollars from the West to Muslim countries.” – Max Singer, senior fellow, The Hudson Institute.

Co-ops and consumers work together to lessen our dependence on foreign fossil fuels.

Co-ops and consumers work together to lessen our dependence on foreign fossil fuels.
In the early 1970s, animated ditties began airing between cartoons on Saturday morning TV. Called Schoolhouse Rock, the catchy tunes taught kids the function of conjunctions, multiplication, science and more. In one about electricity, the voice-over whimsically mused, "Now, if we only had a superhero who could stand here and turn the generator real fast, then we wouldn't need to burn so much fuel to make electricity … electricity."

Some 30-years later, we still could use that superhero to power us up. But, that's not going to happen. The nation must still rely mostly on coal, nuclear and natural gas for its electricity.
Just as we did in the 1970s, the United States is facing an energy crisis. This one, though, runs deeper than oil embargoes.
New competition for the world's limited oil and natural gas supplies is increasing global demand like never before. Reserves are dwindling. These and other factors are forcing energy prices to skyrocket here at home. It's affecting not just the fuel for our cars and homes, but it's driving up electricity costs, too. A new world is emerging. The energy decisions our nation makes today will have huge implications into the next century.
Most of the natural gas and oil Americans use comes from foreign sources. Much of our oil is from the Middle East. Instability there is forcing the United States to once again focus on energy independence. "Nothing," said Sheldon C. Petersen, the CEO of the nation's electric cooperatives' financing co-op, "… is more important to our national security than achieving this goal."
In a speech before the nation's co-op leaders in February, Petersen added, "Our entire relationship to oil needs to be re-thought in the light of the geopolitical realities we face." He said, "We need a ‘total energy makeover' that includes coal and nuclear, as well as a higher percentage of renewables in the mix."
Earth Day this month focuses on protecting our planet. This year it's more important than ever for Indiana's electric co-ops to point out the many things we all can do to help our planet environmentally that also help our nation break its dependence on foreign energy sources. These things include creating renewable energy sources, using coal more cleanly and educating consumers about energy efficiency and conservation.
Watts from waste
Garbage: we make it; bag it; curb it; and then watch it get hauled away by the garbage truck on trash day. Now, some of it is coming back to us — in the form of cleaner electricity.
Seven electric generating stations are being powered by the waste gas at six landfills around northern and central Indiana. The plants are owned by Wabash Valley Power Association, the Indianapolis-based cooperative power supplier to 22 electric co-ops in the northern half of Indiana and five in Ohio, Michigan and Illinois.
In a partnership with Waste Management of Indiana, which operates the landfills, the plants create enough electricity for over 10,500 homes and businesses. The power is distributed by participating REMCs/RECs to consumers through an innovative program called "EnviroWatts."
Developed by Wabash Valley six years ago, EnviroWatts is a brand of electricity generated through alternative, renewable sources like biomass. It is offered to consumers of participating co-ops throughout Indiana and to co-op consumers in Kentucky and Ohio, too.
The newest landfill facility, EnviroWatts Liberty near Buffalo in northern White County, was dedicated in October 2005.
"Wabash Valley is taking a waste product that nobody wants and turning it into something for which there is a growing demand," said Jack Landrum, CEO of White County REMC which provides power to the landfill. "The more power REMCs like ours can obtain through biomass sources like landfill generation, the less we'll need to generate with nonrenewable fossil fuels such as coal and natural gas."
Landfill gas is created when organically-rich garbage placed in sanitary landfills decays. Over half of this gas is methane. Typically, the gas is collected in wells and burned off as giant flares. Now, at these six EnviroWatts landfills, it's piped to the on-site electric plants. Each plant is powered by four Indiana-built Caterpillar engine-generators. Using the clean-burning gas as fuel, these engines each turn out about 800 kilowatts.
Other EnviroWatts plants are in Logansport, Wyatt, Michigan City, Portland and Danville. At Danville, two plants work side-by-side. Two more plants are planned at Michigan City and Wyatt.
In general, "green energy" costs more to produce than the low-cost coal-generated electricity Indiana relies most on. Consumers who sign up for EnviroWatts pay a penny per kilowatt-hour more. This premium generally adds less than $5 a month to the consumer's electric bill. EnviroWatts consumers know, though, their co-op is purchasing environmentally-friendlier energy to meet their needs and that they're supporting future growth of alternative energy sources.
"I love the EnviroWatts program," said Ken Ritchey, general manager at Tipmont REMC. "Everybody agrees we need to move to alternative sources of energy, and our members generally support that kind of thing."
He's not kidding. Over a thousand consumers have signed up for EnviroWatts across the Wabash Valley systems. Over 80 percent of them are Tipmont REMC consumers. The co-op provides electricity to 24,000 consumers in parts of eight counties in the Lafayette/Crawfordsville area.
Tipmont puts EnviroWatts' penny premium into a special environmental fund. Much like the Operation Round Up program many co-ops have, a separate board oversees Tipmont's EnviroWatts fund to makes grants that benefit the environment in the communities Tipmont serves. To date, some $40,000 has been granted to garden clubs, youth and civic groups and others to plant trees and native grasses, clean up the Wabash River banks, create environmental education materials and much more.
In Jay County, where a new EnviroWatts plant was added outside Portland last year, schools have already been teaching the benefits of renewables to students. Cindy Denney, director of marketing and customer services at Jay County REMC, sees it when she and co-workers take the co-op's educational program into their local schools. She said they focus on renewable resources. "It's amazing how many kids are already aware of what the renewables are all about."
The landfill plant, Denney said, generated even more local interest in the biomass fuels. Tours of the facility are offered. "Most people were glad they were using the methane for electricity rather than just burning it up," she said.
"Waste Management's landfills are located in the same rural areas of Indiana where our member cooperatives serve homes and businesses," said Keith Thompson, Wabash Valley's vice president of power production. "This partnership is a win-win proposition.
"It's economically-priced power," Thompson said, "and it's just the right thing to do."
Watts from cleaner coal
While alternative energy sources like landfill gas make good use of a waste byproduct, all the new renewable sources combined only generate a tiny fraction of the electricity that America uses today. Only after you toss in everything else — nuclear, natural gas, oil and hydro — do you then equal the power of coal.
Coal, America's most plentiful energy resource, accounts for half of the electricity Americans use. In Indiana, coal provides over 95 percent of our electricity. No serious discussion about our nation's goal of energy independence begins without coal in the mix.
Electric co-ops run some of the cleanest coal-fired plants in the nation. Hoosier Energy REC, cooperative power supplier to 17 co-ops in the southern half of the state, operates two coal-fired stations. The plants are equipped with state-of-the-art technology to meet or exceed the minimum clean air requirements for emissions.
New technologies are in the works to make coal even cleaner and more efficient. One cutting-edge technology is already being used right here in Indiana producing electricity for some 150,000 co-op consumers.
Early last year, Wabash Valley became co-owner of a "gasification" plant in West Terre Haute. The plant, sgSolutions, is one of only two in the nation that chemically transforms coal or petroleum coke into synthetic natural gas. The gas is then burned to generate electricity.
The emissions from the high-tech plant are cleaner than a conventional coal plant because the gasification process removes pollutants from the fuel source before the gas is burned. Conventional coal plants capture pollutants from the combustion gases after the coal's been fired.
Built in the 1990s, the plant was originally part of a demonstration project through the Department of Energy's Clean Coal program. The technology exists to remove even the carbon dioxide from the plant's emissions.
"It's definitely the future," said Thompson at Wabash Valley.
Watts from wasting not
No fuel that requires combustion — coal, natural gas or oil — is going to be emissions free. That goes for power plants; the engines in our cars; natural gas furnaces or gas water heaters; and wood-stoves, too. That's where we all can come together to make a difference.
We are already using energy efficiency and conservation techniques to meet our growing electric demand, Kateri Callahan told electric cooperative leaders in a forum at their national meeting in February. Callahan is the executive director of the Alliance to Save Energy, a Washington, D.C.-based group promoting energy efficiency worldwide. She estimates the United States would be using 40 percent more electricity than it does today if energy-saving measures had not been put in place the past 30 years.
"The good news is," she said, "we ain't done yet! The energy we waste today is our greatest energy resource for tomorrow."
While much of our nation's energy future will rely on promising technologies still being developed, including things like hydrogen fuel cells, conservation and energy efficiency are things we can do today. (See the sidebar at right.) When we conserve, we save money on our energy bills; we save our resources; our nation doesn't rely as much on foreign fuel; and the Earth's environment is less affected.
"God gave man a planet that is beautiful and can supply all of our needs," energy-efficiency expert Doug Rye told Hoosiers at a co-op-sponsored seminar last year. "We have a responsibility to take care of this gift called Earth.… We can provide our energy needs if we simply conserve and change our wasteful ways."
Bringing in the nationally-known Rye to speak is one way co-ops promote conservation. They also turn to experts within their own ranks. Bob Geswein, an energy efficiency specialist from Harrison REMC, conducts home energy efficiency seminars for consumers and builders at his own co-op in Corydon, and also travels the state for other groups. Through March, he had already conducted 22 this year.
"The message we've been preaching for a long time has become very fashionable," Geswein said. "We will not have the luxury of consuming energy tomorrow at the same rate we have in the past. We won't be able to afford it."
His seminars focus on ways to improve the thermal boundaries of a home. This increases comfort and reduces the size of the system needed to heat and cool the home. Reducing the size of the heating/cooling system reduces pollution, too. Geswein noted a 5,100-square-foot home built to the top level of the Department of Energy's "Energy Star" program will produce almost 34,000 pounds of carbon dioxide a year less than an equally-sized home built to minimum required building code standards.
Other co-op conservation programs include:
• Touchstone Energy homes — participating co-ops statewide offer energy-efficient home programs to consumers. The programs outline various construction requirements to ensure new or existing homes meet or exceed efficiency standards used by Energy Star.
• Demand-side management — a Wabash Valley conservation program that enables consumers to actively participate in not using electricity when electric demand is at its highest. This lessens the need to build new power plants.
• The Environmental Education Center — an environmental and energy education program and facility at Hoosier Energy's Merom generating station. Hoosier Energy also offers a free Web-based lending library to educators.
• Soybean power — several Indiana co-ops use soy biodiesel, a cleaner-burning blend of fuel, in their fleet of utility trucks; last summer Tipmont REMC began using soybean-based oil rather than petroleum oil in its overhead transformers atop utility poles along its power lines.
• Energy advisors — co-ops around the state have energy advisors available to help consumers with home energy audits and advice.
What we can do …
By finding new energy sources, innovating ones we have and conserving, Americans have the power to drastically cut our demand for foreign fossil fuels within the next 25 years.
As Sheldon Petersen reminded co-op leaders: "We're a can-do nation … and anything we've set our mind to, from conquering fascism … to putting a man on the moon … to lighting up rural America … we've managed to achieve.
"This new goal of energy independence shines the spotlight directly on rural America and its vast resources.… And our electric cooperatives will be part of the infrastructure that supports this initiative," Petersen said.
It won't take a superhero to make us energy independent, or the planet greener. But it will take all Americans working together.

SAVE THE DAY!
Ways you can save energy, money, the American way and the world
• Turn off everything not in use: lights, TVs, computers, etc.
• When cooking, keep the lids on pots. Better yet, use a microwave oven instead.
• About 15 percent of an average home energy bill goes to heating water. To save hot water, take five-minute showers instead of baths. Use cold water for laundry and save up to $63 a year — detergents formulated for cold water get clothes just as clean.
• Lower the temperature on your water heater. It should be set at "warm," so that a thermometer held under running water reads no more than 120 degrees.
• When buying new products, look for the Energy Star® label, found on more than 40 different products such as TVs, refrigerators, air conditioners and more.
• Incandescent light bulbs are outdated; 95 percent of the energy used goes to heating the bulb. Replace your five most used light bulbs with Energy Star compact fluorescent bulbs. These light bulbs use two-thirds less energy and last up to 10 times longer.
• Stop the air leaks in your home by caulking around doors, windows and other gaps along the home's foundation.
• Replace your old gas furnace with a new high-efficient electric system. Electric heat pumps are three times more efficient than the best gas furnaces; geothermal systems are five times more efficient than gas.
• Replace your old gas water heater with a new high-efficient electric one. The best gas water heaters are around 60 percent efficient. Super-insulated water heaters, like a Marathon, are almost 100 percent efficient and have a lifetime warranty.

ACHIEVING ENERGY INDEPENDENCE

ACHIEVING ENERGY INDEPENDENCE

 

No strategy for American security is complete without a plan to end America's dependence on Mideast oil. Today, the American economy depends on oil controlled by some of the world's most repressive regimes. This leaves our economy dangerously vulnerable to nations that do not share our interests. America too often is silent about the practices of some governments because we depend on oil they control. John Kerry, John Edwards and the Democratic Party believe a strong America must no longer rely on the cooperation of regimes that do not share our values. We believe a strong America must move toward energy independence. In the Bush Administration, energy independence doesn't get a thought.

Their energy policy is simple: government by big oil, of big oil, and for big oil. This Administration let oil industry lobbyists and executives write our nation's energy policy in secret. They even went to the Supreme Court to stop the public from learning what they were doing. They've done nothing as gas prices have soared to record levels. Even the Administration's own economists have found that their energy plan will do nothing to reduce gas prices. This President's approach to energy policy leaves America shackled to foreign oil, dependent, vulnerable, and exposed. John Kerry, John Edwards and the Democratic Party believe in a better, stronger, more independent America.

We are committed to achieving energy independence, and we know we can do it. Our ingenuity and determination built the cars we drive and the bridges we use. It electrified rural America in the 1930s, and took us to the moon in the 1960s. Our resolve helped conquer polio. It's this simple: When we see a problem, we roll up our sleeves and solve it. And that's what we pledge to do now. Achieving energy independence will improve our ability to protect our values and interests in the world. It will reduce energy costs for our families. It will create high-paying new jobs. And it will improve our environment and make our people healthier.

Harnessing American ingenuity to create renewable energy. Our plan begins with commonsense investments to harness the natural world around us-the sun, wind, water, geothermal and biomass sources, and a rich array of crops-to create a new generation of affordable energy for the 21st century. By mobilizing the amazing productivity of America's farmers, we can grow our own cleaner-burning fuel. We support tax credits for private sector investment in clean, renewable sources of energy, and we will make ethanol credits work better for farmers. And we will ensure that billions of gallons of renewable fuel are part of America's energy supply while striving for strong, national renewable energy goals. Creating the energy-efficient vehicles of tomorrow.

We support creating more energy-efficient vehicles, from today's hybrid cars to tomorrow's hydrogen cars. We support the American people's freedom to choose whatever cars, SUVs, minivans, and trucks they choose, but we also believe American ingenuity is equal to the task of improving efficiency. We support improving fuel standards, and because of the challenges this poses, we will offer needed incentives for consumers to buy efficient vehicles, and for manufacturers to build them. We are also committed to developing hydrogen as a clean, reliable domestic source of energy. Our economy cannot convert to hydrogen overnight, so we will fund research to overcome the obstacles to hydrogen fuel and continue our other efforts to achieve energy independence.

Moving beyond OPEC. We can improve our energy security in other ways. We will seek more diverse sources of oil around the world and here at home. We support balanced development of domestic oil supplies in areas already open for exploration, like the western and central Gulf of Mexico. We support the expansion of new infrastructure to develop supplies from non-OPEC nations like Russia, Canada, and nations in Africa. We will increase efficiency of natural gas use, develop the Alaska natural gas pipeline, and enhance our nation's infrastructure to help supply natural gas more effectively. Electricity. We will work to create new technology for producing electricity in a better, more efficient manner.

Coal accounts for more than one-half of America's electric power generation capacity today. We believe coal must continue its important role in a new energy economy, while achieving high environmental standards. Working with the coal industry, we will invest billions to develop and implement new, cleaner coal technology and to produce electric and hydrogen power.

We will also work to make sure that our people have access to an affordable, secure, and reliable supply of electricity at all times. We support mandatory, enforceable reliability standards. We also support public-private partnerships to make our power systems more flexible, resilient, and self-healing-and more environmentally friendly than ever before. Government as a role model. The federal government is the largest single consumer of energy in the world. We will cut the federal government's energy use and challenge local governments, corporations, universities, small businesses and hospitals to do the same. Our commitment to conservation.

A balanced energy policy must create real incentives for energy conservation in our homes, our offices, our factories, and our infrastructure, saving money and improving security even as it creates good jobs and rebuilds our communities. With sixty-five percent of the world's oil reserves in the Middle East, we cannot drill our way to energy independence. But we can create, think, imagine, and invent our way there. And we will create jobs, help our environment, and build a stronger country as we do.

The energy debate - how honest are we about energy

 

The energy debate - how honest are we about energy

 

The energy debate has moved into a new level of public awareness. It is a debate, however, that I believe has not really begun - not in real terms, at least. While Iraq may appear in more headlines these days, the climate surely must be running a close second. We draw a big circle around news stories about the "climate" - especially climate change. Or when the words "greenhouse gases," "carbon" or "renewable" appear. After all, understanding these words - what they mean, what they represent, what they portend for the future - effectively outlines our future.
We should be preoccupied with other words, as well: excellence, efficiency, teamwork - and most importantly, safety, reliability and ethics. It is our job to keep the lights on at a reasonable cost and to do so without harm or injury to anyone. We must do so within the quilt work of laws and regulations that govern our business and our conduct.
People rely on our industry to produce power 24 hours a day, seven days a week. Under the best of circumstances, a power outage is merely a huge inconvenience: Your computer or television becomes totally useless. The food in the freezer is at risk. Did you buy any batteries? Are there matches to light the candles? There are also circumstances that are more serious: People in hospitals and retirement facilities, for example, can ill afford to go without power.
Keeping the power on - or having employees go out into the worst weather imaginable and work with highly charged electrical wires and equipment in order to turn the power back on - requires a great deal of training, skill and caution. Our customers by and large appreciate this fact.
Tyranny of the Immediate
There is a concept that some call the tyranny of the immediate: Worry about today, and tomorrow will have to take care of itself. We see it all the time when people outside our industry think about energy. It is a trap that can compromise our future if we are not careful.
Our single greatest challenge in energy is to break free of the immediate and do what will serve our long-term social and economic interests. But we must first discuss energy in real terms.
We take too much for granted, especially at a time when energy demand grows at an alarming pace.
Flash Back 30 Years
We should have learned in the months and years that followed October 6, 1973: the day Syria and Egypt invaded Israel. Within two weeks, representatives of the Organization of the Petroleum Exporting Countries gathered in Kuwait and hiked the price of crude from $3 a barrel to $5 a barrel. Soon the oil embargo was on, and America was facing an energy crisis. Lines of cars started forming at the pumps, hoarding began, fights broke out and a great national debate ensued.
Another milestone was April 20, 1977. That is the day when President Jimmy Carter, standing before a joint session of Congress, unveiled his National Energy Plan and called for the "moral equivalent of war." Carter's plan was to reduce reliance on imports and move the public away from a heavy reliance on oil and toward more use of coal. He hoped that we could develop clean and renewable resources while avoiding environmental damage and giving America energy independence.
That was 30 years ago. We lost that "war," of course. Congress, controlled by the president's own party, largely rejected Carter's proposals, and a national energy policy was sacrificed for the benefit of parochial concerns.
The cards, as Duke University economist Crauford Goodwin wrote back in 1981, were "stacked heavily in favor of the status quo. The public and media memory was short, the tyranny of the immediate decisive."
President Carter was not solely to blame. In the immortal words of cartoonist Walt Kelly's Pogo: "We have met the enemy and he is us."
Now, here we are in 2007. Are we about to do the same dance we did in 1977? Will we wave our arms a lot but end up just chasing each other in a circle until we get tired and do something else? Will we fall short of developing a substantive and realistic energy policy? Unfortunately, not a lot has changed since 1977.
It is a problem partly of democracy and partly of the media, too. The press tends to dramatize a big problem in the most simplistic terms possible. Much of what people know or think they know comes from the media, typically in 30-second sound bites or video clips sandwiched between TV commercials.
The gap between real and imagined knowledge of energy issues is stunning sometimes. This is not just with everyday, uninformed average citizens, but also with energy policymakers who often participate in disjointed, confusing and polarized debate.
This lack of understanding stems partly from some long-standing misperceptions. The media perpetuates them, some politicians reinforce them, the public frequently buys them and the energy industry has not done an adequate job of refuting them, largely because of poor credibility with the public.
In a recent cover story for Atlantic Monthly, writer Greg Easterbrook discussed climate change. "If the Earth's climate changes meaningfully," he wrote, "there could be broad-based disruption of the global economy unparalleled by any event other than World War II." That is blunt, but about right.
Big public choices are hard to make under the best of situations because there are consequences when changes are made. These changes, no matter how necessary, are made far more difficult, however, when we are not honest with ourselves.
Take conservation, for instance. It is a great concept and a worthy, necessary objective. But conservation is not something you do - it is about choices. Big-screen plasma televisions take about two and a half times more electricity than a regular, old-fashioned TV. Consumers like plasma TVs. Stockholders like plasma TVs. But do plasma TVs and conservation join in perfect harmony? Not easily. Again, it is about choices. It is about winners and losers and potentially living differently. That is the implication of a let's-get-serious energy debate.
Thirty years ago, the debate over energy broke down due to three factors:
• Exploration of offshore oil and gas reserves fell prey to arguments over states' rights.
• Increased coal usage clashed with concerns over environmental damage.
• Issues arose about national security and economic growth.
Nobody spoke on behalf of the long term. It fell victim to the tyranny of the immediate. Does that sound familiar? Will we ever have total energy independence? Absolutely not.
We live in a global economy, where many energy markets are interconnected - especially oil, and increasingly natural gas. International energy trade is one of the few forces capable of bringing nations together. Of course, the expansion of our domestic energy supply base makes good sense. But complete independence from the world market is simply not possible. Energy interdependence is a more realistic and compelling goal.
There are no quick fixes or silver bullets to remedy our energy woes. Changing America's notions about energy will take a huge commitment of time, money and cooperation among government, industry and the educational community. It could take decades to accomplish.
It will not be easy. More of the same old energy politics will not do. Lawmakers are like many people they represent: Energy is not an issue until there is none available or until the price goes up. Watching the media monitor oil prices will give you whiplash. The press alternates between panic and indifference according to the price at the pump.
Demand for Power Keeps Increasing
In Northern Virginia, demand for power has grown 40 percent over the last decade and is projected to grow another 8 percent by 2011. The entire state will experience about 4,000 new megawatts in additional demand just over the next 10 years. Nationwide, we will need about 300 gigawatts of new electric-generating capacity by 2030. That is an industry measure. A gigawatt is 1,000 megawatts, or enough to power about 800,000 new homes. It is a tremendous amount any way you describe it.
Add it all up and translate it into dollars, and the industry estimates that it could cost more than $275 billion to meet the nation's growth. Additional tens of billions of dollars will be required for new "big wires" and "small wires" - transmission, facilities and expansions in distribution.
There is more: Environmentally, the emissions limits continue to tighten. The industry projects about $50 billion in compliance costs for nitrogen oxide, sulfur dioxide and mercury from now through 2025.
We also realistically expect the regulation of greenhouse gases in the not-too-distant future, a view reinforced by policy statements from the leadership of both major political parties. Controlling carbon dioxide (CO2) emissions from fossil fuels will be expensive.
The bottom-line impact on power generation in the United States may range from $70 billion to $300 billion. Total industry spending for environmental improvements and new energy infrastructure could be anywhere from $400 billion to $650 billion. That is more than the entire amount of the market capitalization of all the electric utility companies in the United States. In other words, the industry must spend more on new generating plants than the entire value of all electric companies in the United States. It is a daunting challenge.
But there is some optimism. The electric utility re-regulation bills that are waiting to become laws in the Virginia General Assembly provide the right kind of incentives to help keep customer bills down and reliability up.
Also commendable is the Energy Policy Act. This federal statute provides production tax credits for new nuclear facilities using advanced technologies. Although the bill specifies that only the first 6,000 megawatts of the nation's new nuclear capacity will be eligible for the credits, it is a step in the right direction.
We still need an effective national policy that allows us to tap all of our energy supply options, promotes conservation and efficiency and fosters a business environment that is conducive to timely investment in new energy infrastructure.
In stark terms, the competition for capital is intense, and the stakes are high.
The industry is racing in its role as protagonist to influence the outcome in a constructive way - one that promotes mutual consumer-investor benefit and the economic needs of America. As a work in progress, the ending has yet to be written.
Somehow, some way, we must look beyond the horizon - beyond the immediate. Over the next 25 years, the overall demand for electric power in the United States is expected to jump by 50 percent. The commercial sector will lead the way, propelled by the growth of big-box stores, longer hours and more energy-intensive equipment. The global appetite for power is even greater. Worldwide electricity consumption will double over the same period.
The challenge centers not solely around the demand for power or the manner in which we make it, but also in how we move it. The nation's overtaxed network of high-voltage electric lines - the national grid - was not built to handle the demands we currently place upon it. The power grid was quilted together in the 1930s and was designed to move power over relatively short distances. It is now common to see transactions occur in regional markets that cover hundreds of miles.
In short, the grid that we rely upon to move power about the country faces unprecedented problems delivering power, especially when demand soars during periods of extreme heat or cold.
Climate Change
Finally - and this goes back to the core issue - with issues like climate change, greenhouse gases and the threat to the global environment, today's energy debate is just as challenging as it was 30 years ago. There is now widespread agreement that the climate is changing. There is not widespread agreement about what to do about it or even how we should begin. Here is a clue: It begins with China, India, South America, Africa and yes, the United States. That is because the issue is not called "local warming" or "national warming." It is called "global warming."
This is the grand challenge of our times, on a scale never seen previously. Climate change is a global issue that calls for global cooperation. At a minimum, the United States needs a policy that is national in scope - one that embraces energy in its totality and does not look for convenient villains. We have to be honest about ourselves, about what we want and about what we are willing to change.
The expense of regulating CO2 will be enormous. There are currently no viable CO2 control technologies on the market, and it could take decades and huge R&D investments to develop them.
The big question that lurks behind the debate is: "Who is going to pay?" The answer is all of us, because the costs involved will be reflected either in the price of energy products or the taxes we pay.
Diversification is the linchpin. We must utilize all of our energy sources - coal, nuclear, oil, gas, hydro and renewable sources - and undertake much more aggressive conservation and energy-efficiency efforts. We do not have the luxury of limiting ourselves to a few sources of energy while excluding others.
Limitations in Alternative Energy Sources
We also must keep the proper perspective about our energy supplies. So-called alternative sources, including wind, solar, fuel cells, ethanol and bio-diesel fuels hold great promise for the future. But they are expensive. A single wind turbine can cost $2 million. In fact, present investments in wind turbine technology are largely a bet that federal policy will change and essentially subsidize them.
The push is on for renewable sources of energy. This is a valid issue as long as we talk about it in realistic terms. Solar energy, like wind, provides intermittent and unpredictable power. Because electricity cannot be stored on a large scale, wind and solar are unsuitable as 24-hour-a-day sources of energy. At this stage, it would be more accurate to call these supplemental rather than alternative energy sources. They are simply not ready to replace the fossil fuels - coal, oil and natural gas - that currently account for about 80 percent of the world's energy supply.
We also must have realistic expectations about conservation and energy efficiency, which is the amount of energy used per dollar of gross domestic product. Current U.S. energy policy restricts development of our domestic oil and gas resource base, including the Atlantic and Pacific outer continental shelves and federal lands in Alaska and the Rocky Mountain Basin. This is the Achilles' heel of America's energy dilemma. The value Americans place on self-sufficiency is oddly absent in government energy policies. The United States is a nation rich in natural resources, yet it restricts access to large tracts of it. Few countries have similar limitations.
Coal and nuclear power must be part of the solution, too. Coal is our most abundant domestic fuel source. It produces half of our electricity, and its price is less subject to volatility. Several companies are exploring the construction of a new clean-coal station in southwestern Virginia. Congress must do its part by channeling more federal research funds into the commercialization of these high-efficiency advanced technologies.
There is currently renewed interest in nuclear power, as well there should be. New nuclear plants will solve many of the nation's energy problems. Nuclear power is a safe and clean energy source.
Utilities and their investors expect adequate financial rewards to bring the electric grid into the 21st century and support our high-tech economy. To that end, in Virginia, for instance, the General Assembly recently passed policy changes that represent a highly encouraging departure from the norm. The legislature resisted the tyranny of the immediate and voted to enact a policy based on what is coming: namely, a future where Virginia homes and enterprise continue to demand more power.
More than a half-century ago, President Harry S. Truman commissioned a blue-ribbon study to take stock of American resources and energy needs. The final report, called "Resources for Freedom," urged Americans to start preparing for the energy demands of the 1970s. "As a nation," the report said, "we have always been more interested in sawmills than seedlings." What happened from that point on? The sawmills prevailed, and the 1970s arrived. A great debate ensued, we talked a lot about energy and then we got over it. Any effort to prepare for the long term was lost in the rush to accommodate the here and now.
Now, more than 30 years after the great energy crisis of the 1970s, we are again in the midst of a great debate. There are some new aspects - climate change being the most prominent - but we are largely faced with the same challenge: Can we free ourselves from the tyranny of the immediate? Can we look into the future, see what is headed directly at us and act in our own best interest? Can we do it differently this time?
We can and we must.