Monday, January 29, 2007

A Response from CARE’s Energy Council
Regarding President Bush’s Energy-related Comments in the
2007 State of the Union Address

Within the energy industry there are diverse opinions as to what needs to be done to solve America’s energy issues. What we all agree on is that something does need to be done to create an “energy security” for the United States. At CARE we call on a variety of experts to help us present the public with the complete energy picture. Here we have gathered several responses from our Energy Council members. These experts may be quoted and are available for additional comment and/or interview. Tell us what think by posting your comments.

Reduce or “conserve.” It has not worked and will not worked.

What bothered me the most was this: “We must continue changing the way America generates electric power, by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power.”

This has nothing to do with our importing of oil and will not make us less dependent. We use essentially no oil for power generation. This is a gross mistake repeated by John Kerry in the last election. Who is advising these guys? Solar and wind? Solar electricity would cost 20 times the cost of natural gas or coal electricity. Wind, at least twice as much.

Unless we address the transportation issue by electrifying it (and I don't mean just electrical cars or hybrids) we cannot address the dependence issue.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy TribuneHouston, TX

I fully agree with the President's comments regarding our over-dependence on foreign energy sources and its implications for our economy and security.

In terms of implementation, the reduction of gasoline usage by 20% seems a worthy goal, and particularly if that displaced gasoline is directly associated with oil imports. Presumably this would be done by some combination of efficiency improvements and fuel substitution. For the latter, there appear to be four realistic technology options, of which two were specifically addressed in the President's message:
1. Biofuel (derivation of liquid fuels from plants): This approach for displacing imported oil is being successfully applied in South America and would appear to have significant potential in the U.S. Corollary benefits would accrue to U.S. farmers.
2. Electric Power: In studies I have followed, Plug-in Hybrid Electric Vehicles (PHEVs) appear to offer the greatest near-term potential for substituting electrical energy for gasoline or diesel fuels. In addition to allowing the use of energy sources that are environmentally more desirable (in the President's words, ". . .clean coal technology, solar and wind energy, and clean, safe nuclear power."), the overall efficiency of fuel to mechanical energy conversion is apparently improved through the use of electricity relative to present internal combustion engines. Electric Power Research Institute (EPRI) studies have indicated that a significant fraction of our transportation energy requirements could be met by electricity with only a modest electric-only range (e.g., 50mi). The key to increasing this range is further improvements in electrical energy storage and this should be given very a high priority in research.
3. Coal to Liquid (CTL) Fuels: Implied, but not overtly included in the President's comments is the potential to employ our vast coal reserves as a source of the liquid fuels that cannot be eliminated by efficiency or substitution. This option is presently being utilized in South Africa, where some 40% of liquid transportation fuels are coal derived.
4. Nuclear-Produced Hydrogen/Oxygen for Liquid Fuels: The U.S. is presently in the early stages of developing the Next Generation Nuclear Plant, a high-temperature reactor which is intended to demonstrate the production of hydrogen and oxygen from water using nuclear energy. The resulting hydrogen can be utilized in the processing of crude oil to transportation fuels, effectively substituting nuclear energy for a portion of the fossil energy in the resultant fuels. When combined with the CTL process, above, the use of nuclear-produced hydrogen and oxygen would significantly increase the fraction of coal-derived carbons that end up in the finished fuel and essentially eliminate byproduct carbon dioxide from the CTL process.

Given the importance of energy to our economy and security, I would hope that all of the above options are pursued aggressively and in parallel to demonstrate their potential. In the end, the market will determine which is the most cost effective.

In closing, I have heard proposals similar to the President's several times before (for example, after the oil embargos of the mid-1970s). I hope that this time we will finally take it seriously and act accordingly.

Scott R. Penfield, Jr., Registered Professional Engineer with 35 years of experience in energy production and utilization
Carthage, TN
The Bush proposals in his Sate of the Union Address were another step back from a free-market energy policy, one that puts consumers and taxpayers ahead of special interests.

Mandates on fuel efficiency, increased quotas on politically favored energy sources, and enlarging the Strategic Petroleum Reserve are not good news from a president who is very much on the defensive on energy. I am concerned that doubling the Strategic Petroleum Reserve, for example, will give the federal government greater influence over oil prices, and even possibly led to policy promiscuity whereby a measure like price controls would be imposed on the oil industry given the “cushion” of using the reserve if supply became short.

Robert L. Bradley, Jr., President, Institute for Energy Research
Houston, TX
I applaud the President for his recognition that a diverse energy supply is a secure energy supply, while also understanding the importance of stepping up our domestic oil supply. I think the President missed an opportunity to start becoming less reliant on foreign oil by not stressing the immediate impact that conservation can have on the situation. Everyone can conserve and it does not cause a dime. Without conservation as an essential element of this plan, we are destined to remain in this energy challenge. 35 billion gallons by 2017 sounds great, but is not achievable without new technologies. These technologies can only come about through increased research and development dollars, not less, as the President's budget proposes.

Bob Gallagher, President, New Mexico Oil and Gas Association
Santa Fe, NM

For once that Bush may be on somewhat the right track. I agree that we need to curb our oil consumption (although 20% sounds absurd – more likely we should just be trying to avoid increasing it by 10%, which is far more likely); I’m just not sure that Ethanol is the way to go. My magazine has published a number of articles on the subject and I (at least at this time) don’t see any real ways that Ethanol can be used to augment our fuel sources. I think that if we can find ways to use nuclear power (or other non-imported fossil fuel, e.g. coal) as an energy source for the creation of Ethanol or other fuels (from trash for example), it might work, but the fact remains that so long as we make biofuels from plants like corn, we will be tied to also using oil products to create them, and in doing so, the involved energy conversion will be poor at best. I still think that the best option is to electrify our transportation system. While in the short run this will lower some of the convenience of our current system, it would immediately diversify our energy demand portfolio (electricity can be generated from many sources that don’t need to be imported). In the long run many of the short-term inconveniences should be solvable.

Bush is absolutely right that our dependence on foreign oil makes us vulnerable to extremists in the Middle East and Venezuela, I’m just not sure it can be helped. However, his plan to increase America’s SPR while in the short would raise oil prices, would act as a means to curb the short term abilities of outside countries to influence the American economy by using oil prices.

Alexander M. Economides, Publisher, Energy Tribune

We at IAPNM fully support the president's objective of diversifying the nation's energy base, so long as it makes economic sense. It seems reasonable to increase the capacity of the Strategic Petroleum Reserve, which could be very helpful in providing relief during a short-term supply disruption. I was especially glad to hear the president say that the nation needs to "step up domestic production." However, the one thing I always find discouraging about these kinds of speeches is that the president and others talk about oil as if it were a bad thing. No, it's not good for our nation to be overly dependent on a single energy source. However, it's unnecessary and even dangerous for politicians to not also recognize that oil is the greatest commodity ever discovered, one that has given birth to every modern necessity and convenience. If we suddenly lost all of our, even half of our oil...our entire society would collapse into chaos. Oil, and the people who produce it, deserve a lot more respect than what's been coming out of Washington these days.

Johnny Knorr, President of Independent Petroleum Association of New Mexico

1 comment:

Larry Vance said...

I commend the President for his recognition that energy dependence and global climate change pose serious challenges that need to be addressed. Without question, we are overly dependent on foreign energy resources (read oil) and need to carefully examine alternative energy resources and renewable energy sources as we move in the direction of a new fuel standard. The President’s proposal to develop more renewable energies, double the strategic petroleum reserve, develop coal and nuclear power, and increase domestic oil exploration points us in the right direction. President Bush’s words are positive; now we need action behind them.

Let’s take a look at one piece of the energy puzzle: domestic oil supply exploration. Specifically, let’s look at the potential contribution oil shale could make to domestic energy supplies and what’s being done to encourage exploration in this area.

According to the U.S. Department of the Interior, the United States holds the largest known concentration of oil shale in the world – an estimated 1.2 trillion barrels. Let’s put that into perspective: at current levels of consumption, the 1.2 trillion barrels of recoverable oil shale represents 200 years of domestic oil supply.

The vast quantities of oil shale – primarily on Federal lands in Colorado, Utah and Wyoming – prompted the Bureau of Land Management in 2004 to establish the Oil Shale Research, Development and Demonstration program. Under BLM authority and supervision, small tracts of Federal lands are leased for oil shale research, development, and demonstration. To date, the BLM program has granted leases only to big oil companies and may have missed some opportunities by overlooking smaller companies and new technologies. Our company, for example, has a patent-protected oil shale processing system that could potentially revolutionize the recovery of hydrocarbon products from oil shale deposits and was left out of the program. In light of the President’s comments, isn’t it time to consider opening up more Federal lands to responsible, new, environmentally-sensitive technologies and alternatives in our exploration?

We need to act and move forward aggressively on domestic oil exploration and renewable energies. With the right technology and economics, oil shale resources could contribute significantly to the domestic energy supply. No technology should be left behind in this endeavor, as it is an issue of national importance.

Larry Vance
Chairman & CEO of Earth Search Sciences, Inc. The company’s subsidiary, Petro Probe, focuses on the use of technology in the search for and production of hydrocarbon products.