Energy Security Now A National Buzzword

Government Get Serious About Source Diversification, Private Sector Technology Looks Promising

Hurricane Katrina’s aftermath has left thousands of Gulf Coast Americans helpless. The full extent of the tragedy’s economic consequences will remain unknown for some time but one thing is clear; approximately 10 percent of America’s total oil refining capacity was crippled in addition to damaging pipelines that send the fuel to the northeast and mid-west parts of the country. In Katrina’s immediate aftermath the price of oil broke the $70 per barrel mark and the price is expected to remain above $60 per barrel for an extended period of time.

In the wake of Hurrican Katrina, an oil tanker is docked at a Marathon refinery along the Mississippi River outside New Orleans. Gulf refineries were hit hard by the storm. (David J. Philip/AP)

President George W. Bush, in full recognition of America’s grave concern over rising energy prices, signed the Energy Policy Act of 2005 into law on August 8. Furthermore, the concept of energy security was discussed in a serious way for the first time since the early 1980s. Energy policy and private industry are slowly engaging each other together to explore alternative energy sources to achieve America’s future energy security while lessening the impact on the environment.

In March, a bipartisan list of 30 former government officials sent a letter to President George W. Bush under the banner of the “Energy Future Coalition”, urging him to place greater emphasis on America’s dangerous dependence on foreign oil and to create an economic environment suitable for increased investment in the various renewable energy sectors. The signatories, including such former officials as National Security Adviser Robert C. McFarlane, Director of Central Intelligence R. James Woolsey and Assistant Secretary of State for Global Affairs Timothy Wirth, requested the President ask Congress to fund new initiatives to curtail U.S. oil consumption by increasing efficiency and developing petroleum fuel alternatives at a level proportionate with other national defense priorities. Incentives, including tax credits to spur production and purchase of advanced efficiency vehicles, the construction of facilities for alternative fuel production from domestic resources and the adoption of alternative liquid fuels at existing fueling stations, were advocated.

As crude oil prices broke the $60 per barrel barrier for the first time in history, fears increased that turmoil and conflict in the major producing areas of the Middle East, and attacks on the pipelines in Iraq and Saudi Arabia would play havoc with the U.S. economy. Seventy percent of oil imported into the U.S. is consumed by the transportation sector and disruptions in oil production have a ripple effect reaching the American consumer through immediate hikes in gas prices at the pumps. In December 2004, Osama bin Laden, via an audiotape broadcast by Arab satellite channels, called on his supporters to take their holy war to the oil industry and disrupt Persian Gulf oil supplies to the U.S.

President Bush holds The Energy Policy Act of 2005 after signing in New Mexico Aug. 8. From left: Alliance Vice Chair Rep. Ralph Hall (R-TX), Rep. Joe Barton (R-TX), Sen. Pete Domenici (R-NM), and Alliance Vice Chair Sen. Jeff Bingaman (D-NM).

President G.W. Bush recently emphasized the government’s role in leading the fight to create an energy-efficient America. On June 15, 2005, as the keynote speaker at the 16th Annual Energy Efficiency Forum in Washington, D.C., the President said that the American people understand gas prices are not going fall overnight, but “they’re not going to tolerate inaction in Washington as they watch the underlying problems grow worse...To address the root causes of high gas prices, we need to take four important steps toward one vital goal - and that is making American less dependent on foreign sources of oil.”

Spurred by steadily increasing demand, American energy policy and newly developed technologies are being brought together with a new urgency. The Energy Policy Act, the first national energy plan in more than a decade, intends to promote residential energy efficiency and set new minimum energy efficiency standards for consumer and commercial products while working to reduce federal government energy usage. Tax credits are to be granted for wind, solar, and biomass energy and the Act repeals outdated laws that discourage investment in new infrastructure. It also calls for consumer tax credits for energy-efficient hybrid, clean-diesel, and fuel-cell vehicles.

The Act codified into law the essence of the 2002 National Security Strategy (NSS). The NSS called for the United States to strengthen its energy security “and the shared prosperity of the global economy by working with our allies, trading partners, and energy producers to expand the sources and types of global energy supplied especially in the Western Hemisphere, Africa, Central Asia, and the Caspian region.” The document noted that economic growth must be accompanied by efforts to stabilize greenhouse gas emissions and cut U.S. emissions by 18 percent per unit of output by the year 2012. To do so, the White House advised increased spending to $4.5 billion on research and new technologies to address the issue of climate change.

Terrorists Drive Up The Cost of Imported Energy

The United States has spent more than $1.16 trillion to purchase foreign oil over the past 30 years. The Institute for the Analysis of Global Security (IAGS), a non-profit, Washington-based organization focusing on energy and global security, estimates the cost of securing U.S. access to Middle East oil at $50 billion annually, which include the continual U.S. military presence in the Middle East. As developing states such as China and India increase their demand for oil, not only will the market price for oil rise, but the American presence in the Middle East will need to be maintained - if not increased - to ensure that sufficient quantities of oil reach U.S. soil.

A burning oil pipeline at Hit, Iraq, 93 miles northwest of Baghdad, following insurgent sabotage June 22, 2003.(AP Photo/Ali Haider)

It is taken as axiomatic that terrorists understand attacks on pipelines in Iraq and Saudi Arabia can have extreme negative effects on the United States economy. Gal Luft, IAGS executive director, said rising oil prices in the U.S. reflects the “fear premium” that can be attributed to any uncertainty that may prevent oil from reaching the consumer. This includes terrorist attacks on oil pipelines, increasing energy demand from countries such as China and India, and natural disasters such as Hurricanes Katrina and Rita. “There is no exact dollar amount that can be added to the price of oil due to the uncertainties that exist,” Luft said. “It depends on the investor and those watching over the markets and their view of what may or may not affect the markets.” In the past year, attacks on oil pipelines in Iraq have decreased in comparison to previous years, to which Luft attributes the fact that attacking previously damaged pipelines does not achieve terrorist goals. As the number of targets decreased the number of attacks also decreased. Unfortunately, he said, more than 100 million barrels of oil per year are prevented from reaching the global market due to terrorist attacks, and if those barrels could be added into the system, “we would see a decrease in oil prices of approximately ten dollars a barrel.”

In the past 40 years, a spike in oil prices has always led to an economic recession in the U.S. Despite the fact that much of the petrodollars leaving the U.S. end up in Middle East accounts and are eventually spent on American goods by consumers in the oil producing countries, there is fear that continued deterioration in relations between the Muslim world and America could result in a boycott of the U.S. dollar by shifting transactions to the euro. It has been reported that both OPEC and Russia are considering switching to the euro as the payment currency for oil sales. “Both of those moves would fulfill jihadists wishes,” said Luft.

What is the Future of Middle East Oil?

On April 26, 2005, world oil prices fell when Saudi Crown Prince Abdullah bin Abdul Aziz hinted that his country could increase oil production. Experts suspect, however, that Saudi reserves are exaggerated and, in fact, declining. Energy analyst Matthew Simmons, chairman and CEO of Simmons & Company International, a specialized energy investment-banking firm, believes the Saudi fields are on the verge of a production collapse. In an interview with the online Environment & Energy Television (, produced by Environment & Energy Publishing, LLC, Simmons declared that the Saudi oil fields will soon lose the “high reservoir pressure that keeps a fabulous amount of oil flowing from a small number of wells.” Officials at Saudi Aramco, the state-owned production company, claim that new technologies will allow them to increase production and create access to new oil fields.

The true condition of the OPEC oil fields is unknown to outsiders. Peter Maass’ August 21, 2005 New York Times article “The Breaking Point” pointed out that OPEC quotas, which were imposed in 1983, were based on each member’s overall reserves. The more reserves a member claimed, the higher their quota would be therefore more revenue for the country. “It is widely believed that most, if not all, OPEC members exaggerated the sizes of their reserves in order to have the largest possible quota - and thus the largest possible revenue stream,” Maass wrote.

Technology has enabled oil producers to push the illusion that oil supplies will last forever, while the reality is such that decline curves, some occurring at surprisingly rapid rates, are inevitable. David Goodstein, professor at the California Institute of Technology and author of the 2004 bestseller Out of Gas: The End of the Age of Oil reported the number of oil discoveries peaked in the 1960s whereas in the 1980s OPEC changed its quota for how many barrels of oil each country could pump. Goodstein says that during that time world reserves “should have decreased by 200 billion barrels...instead, they’ve increased by about 400 billion barrels.” It is uncertain when world oil production will peak, but when it does, it “will not be artificial and it will not be temporary.”

What About ANWR?

The House energy bill, passed in April, tackled the oil supply issue with language allowing for exploratory drilling in the Arctic National Wildlife Refuge (ANWR). In 1980, President Jimmy Carter signed the Alaska National Interest Lands Conservation Act (ANILCA), which designated much of the Refuge for a wilderness area. However, the coastal plains of ANWR were set aside for future consideration of its oil resources. The wording in the House energy bill called for drilling in no more than 2,000 acres of the ANWR refuge, representing 0.01 percent of the 19.6 million acre refuge. In 1987, the Department of the Interior, in a report on the gas and oil potential of the coastal plains, estimated the presence of 600 million barrels (on the low end) to 9.2 billion barrels (on the high end) of recoverable oil reserves in the coastal plains. These are estimates, however, and proponents of ANWR oil exploration say only drilling exploration wells will accurately show what is available. While not included in the Energy Policy Act, there will be attempts to approve drilling in ANWR through other legislation this fall.

Nuclear Power

Private industry is not blind to the changes affecting the sources of the nation’s energy supply. Energy companies are recognizing that to remain firmly invested in traditional energy sources such as coal and oil is risky. In order to mitigate the risks and remain at the top of the energy business large companies are investing heavily in clean and renewable fuels in anticipation of stringent regulations on emissions and efficiency. Nuclear “A secure energy future for America must include more nuclear power,” President Bush told the Small Business Administration April 27, 2005. Concern over nuclear proliferation concerns and the creation of additional lucrative terrorist targets, however, are significant obstacles to new nuclear plant construction.

Nuclear power plant. Cooling towers release only steam. Two cylindrical reactor containment structures are seen in foreground.

As of May 12, 2005, there are 440 nuclear power plants operating in 31 countries with an additional 24 under construction. The laws regulating the production of nuclear energy and tracking methods to secure uranium used must be tightened and updated before further nuclear power plants are built, according to Henry Sokolski, executive director of the Nonproliferation Policy Education Center and a former deputy for Nonproliferation Policy in the Office of the U.S. Secretary of Defense. Sokolski predicts that, “in 20 years [the United States] will have as much nuclear energy as [it] has today.” There is currently a window of opportunity to tighten the security surrounding nuclear energy.

Clean-coal technology is an oxymoron for many environmentalists who believe not enough emphasis is being placed on other newer forms of clean energy and that “clean-coal” is not clean enough. The United States generates about 52 percent of its electricity from coal - providing $350 billion in annual revenues for coal-powered utility companies. The Bush Administration’s FY2006 budget request to Congress contained a clean-coal-power initiative and funding for the “FutureGen” program - utilizing integrated gasification combined-cycle technology (IGCC) - a demonstration project to create hydrogen and electricity from coal. The FutureGen project is expected to take 10 years to complete and cost $1 billion.

Clean-Coal Technology

The IGCC gasifier uses carbon-based raw materials reacting with steam and oxygen at high temperatures and pressures to create a synthetic fuel. Nearly zero air pollution is emitted. To date, however, no utility company has built a commercial IGCC plant due to technological uncertainties, according to a report by the Center for Energy and Environmental Studies at Carnegie Mellon University. Uncertainties include equipment sizing parameters, requirements for initial catalysts, and the unit costs of wastes and fuels, which are difficult to assess for new advanced technologies as performance of a new technology is often based on limited experimental data from small-scale testing. George Rudins, the Department of Energy deputy assistant secretary for coal, believes that economic incentives, including tax-breaks, are key in the development of IGCC plants.

Engineers believe that a new catalyst may present an important step toward using the nation’s coal supply to power alternative fuel vehicles and utilities. The most widely-used catalyst is derived from iron and chromium, a toxic metal. Chromium is released as a by-product and when the material has reached its lifetime, expensive disposal methods must be used.

Ohio State University engineers have developed a new chemical catalyst, which increases hydrogen production without using toxic metals that are common to other catalysts. Umit Ozkan, a professor of chemical and biomolecular engineering at the University, explained that the new catalyst uses combinations of iron, aluminum and other metals to yield hydrogen from carbon monoxide and water. The tests found that this catalyst performs 25 percent better than commercially available alternatives. Ozkan believes that hydrogen can become the ultimate fuel for the transportation sector and hopes to efficiently create hydrogen from coal. Ultimately, the technology could place the U.S. on the road toward the rumored “hydrogen economy” and alleviate need for expensive gasoline.

Concentrating solar power plant.

The challenge is finding a market for the clean-coal technology plants. It wasn’t until the 1990 Clean Air Act Amendment’s call for a 50 percent reduction in sulfur dioxide emissions that utility companies made reductions at all. Dallas Burtraw, a senior fellow at Resources for the Future, a non-profit concerned with energy policy, said that there is a lot of hope placed in clean-coal technologies because the near future is likely to consist of a carbon-controlled economy. “Clean-coal technology gains would seem to be an incentive to achieve carbon reductions in the near term, but the Administration’s unwillingness to use carbon-reduction-enforcing measures in the short term is allowing industry to miss a lot of [opportunities].” Burtraw believes that uncertainties about the types and extent of future regulations make present action very risky and highly unlikely.

Paul S. Fischbeck, director of the Center for the Study & Improvement of Regulations (CSIR), a joint research center in the Department of Engineering and Public Policy at Carnegie Mellon University and the Institute for Risk Analysis and Risk Communication at the University of Washington, says that the vast majority of utility executives for whom CSIR conducts seminars expect carbon regulations within the next 20 years. The problem, he says, is that “they don’t have any idea what shape or form it will take or when it might be enacted. The cost of uncertainty makes people afraid to act. It is too risky.” It appears clear that, until the future is somewhat certain, utilities will continue to use current technologies, according to Chemical and Engineering News, February 23, 2004.


Solar energy is one of the cleanest methods of energy production currently available. According to the “Clean Energy Trends 2005” report, published in March of 2005 by Clean Edge, a clean technology market authority, the market for solar photovoltaic (PV) energy will grow from $7.2 billion in 2004 (from $4.7 billion in 2003) to $39.2 billion by 2014. Photovoltaic solar energy receives the most attention out of all available solar technologies. The solar cells used for this technology are made of semi conducting materials, such as those in computer chips. When the sunlight is absorbed into the materials the solar energy knocks electrons loose from their atoms. As the electrons flow through the material, they produce energy.

Though photovoltaic solar energy is the most popular, concentrating solar power (CSP) is receiving more attention from the renewable energy community. Concentrating solar power technologies use reflective materials such as mirrors to concentrate the sun’s energy. This concentrated heat energy is then converted into electricity. CSP’s high-temperature capabilities make it attractive for other energy sources as well. The government’s Sandia National Labs (SNL), the University of Nevada, and General Atomics, a San Diego-based provider of advanced technologies, are looking to use the energy from CSP to produce hydrogen from water.

Wind Energy

The wind resource of the United States is tremendous. Using today’s technology, there is sufficient wind flowing across America to provide enough energy for the entire country. According to the American Wind Energy Association’s report on the current status of wind power in the U.S., North Dakota alone could supply over 40 percent of the nation’s electricity needs. At present, however, only one percent of the nation’s electricity is supplied by wind energy and only “under an aggressive growth policy perhaps six percent of the nation’s electricity could be supplied by wind power by 2020.”

Modern wind turbine undergoing onsite assembly. Crane vehicle gives scale of enormous size.

Cristina Archer and Mark Jacobson of Stanford University suggest that using the results of testes sources of strong winds to strategically capture wind energy could generate enough power to satisfy the world’s energy demands. The researchers collected and analyzed 7.500 wind surface stations and approximately 500 more balloon-launch stations in order to establish global winds speeds at 300 feet above the earth’s surface (the hub height of modern wind turbines). Nearly 13 percent of the stations analyzed reported an average wind speed strong enough to use for power generation. Fifteen miles per hour is the wind speed considered acceptable for economically feasible power generation. North America was found to have the greatest wind power potential, with Northern Europe, the southern tip of South America and the island of Tasmania having significant wind speeds at the turbine blade height.

The researchers found that the locations where these wind speeds (called Class 3 winds) were found could produce 72 terawatts of energy. One terawatt equals 1 billion watts. They believe that capturing only a small fraction of the energy could produce 1.6-1.8 terawatts of energy, which is the equivalent of global electricity usage in 2000. Energy in this capacity would require over 500 nuclear reactors or thousands of coal-burning plants. Twenty percent of the potential wind energy, once converted to electricity, could meet the global electricity demand. But significant barriers exist to harnessing energy at that level. The prospect of thousands of giant turbines dotting American horizons has prompted opposition.

Denmark’s Kappel wind farm along the Baltic Sea, one of many that dot the small European country.

The Energy Policy Act extended the Production Tax Credit of 1.8 cents per kWh offered to the wind energy industry by three years. The Senate also, for the first time, voted for a federal Renewable Portfolio Standard (RPS), which will require 10 percent of the electricity generated by investor-owned utilities be created from renewable energy sources such as wind and solar by the year 2020. The extension of the tax credit will create over 5,000 new megawatts of clean, renewable energy through the year 2007 and will also generate over 100,000 new jobs across the United States.

Additional wind power may result from growing consumer demand despite objections on aesthetic grounds. On April 26, the Long Island Power Authority and FPL Energy applied to build a 140-megawatt offshore wind energy park southeast of Jones Beach State Park and southwest of Robert Moses State Park. The facility is to consist of 40 state-of-the-art wind turbines. Initially, the power from the park was to be channeled to LIPA’s total energy bank to be distributed equally among customers.

Map showing the offshore location of the planned Long Island wind energy park.

There was such enthusiasm from the customers for zero-emissions energy, however, that consumers will be able to choose to continue receiving energy from the LIPA or they can buy the wind-power directly from the offshore energy park. LIPA Chairman Richard Kessel said that, “it seems that people who are really enthused about the prospect of Long Island having a facility that will produce a significant amount of wind-generated power want to be a part of the effort to break OPEC’s hold on our energy supply by buying alternative energy supplies.”

It is estimated that power from the wind park will save 13.5 million of barrels of oil per year, and will prevent 235,000 tons of carbon dioxide, 489 tons of sulfur, and 221 tons of nitrogen oxide from being emitted into the air.

Transportation: Plug-ins, Hybrids, and Biofuels

Half the automotive fuel in the United States could be replaced with ethanol from renewable agricultural crops and forest wastes, University of Florida researcher Lonnie Ingram declared in May 2005. Ingram, a professor of microbiology with U of F’s Institute of Food and Agricultural Sciences, has developed a genetically engineered E. coli bacteria that converts biomass (all pant and plant-derived materials including manure and other farm wastes into fuel. “We can reduce our dependence on imported oil and lower the price of automotive fuel by reformulating our gasoline with ethanol derived from inexpensive farm wastes,” he said. “Ethanol will stretch the nation’s fuel supply and make gasoline burn more cleanly. Gasoline-ethanol blends also boost the octane rating of automotive fuel.”

Ford Think plug-in electric car.

By year’s end, more than 4.5 billion gallons of fuel will be manufactured from cornstarch nearly three times the amount produced in 2001. Prof. Ingram expects his new technology could more than double this figure. In 2006, a 30-million-gallon biomass-to-ethanol plant will be built in Jennings, Louisiana by BC International. The plant will use the technology developed by Ingram and bagasse from local sugar mills as a feedstock. After harvest, the cane is transported to a sugar mill where it is squeezed and cooked to extract the sugar sucrose. The leftover material is called bagasse. It is cellulosic biomass waste material. Although some bagasse is burned to produce heat for the sugar mill process, a large fraction of this material is considered excess and is provided to BCI for the cost of transportation.

Governors from 33 states, gathered under the banner of the Governors’ Ethanol Coalition, issued a report on the future of ethanol in the United States in April 2005. “Ethanol from Biomass- America’s 21st Century Transportation Fuel: Recommendations” stated that “national security is linked to energy through the dependence of this country and many others on imported oil - much of it located in politically troubled parts of the globe,” and that “the safest and cheapest way to mitigate these risks is to set and achieve a goal of providing at least five percent of the nation’s transportation fuel from ethanol by 2010, and to produce at least eight billion gallons of ethanol a year by 2012.” The report states that the use of cornstarch and high-level sources for ethanol production may increase the cost of corn and therefore low-level sources of ethanol production must be found. Ingram’s new technology appears to provide the answer to their request. The Coalition recommends the implementation of a national security renewable fuels act and the introduction of performance-based incentives. Additionally, the coalition recommends that Congress support policies in favor of more flexible fuel vehicle standards, and aim to make all vehicles become fuel-flexible, in hopes of achieving an 85 percent ethanol fuel.

Prominent biomass uses today include ethanol and biodiesel fuel additives and process heat and power generation with paper mill and forestry residues.

In addition to using alternative fuels to reduce the need for foreign oil, many in the auto industry are focusing on battery and wheel mechanisms to create more fuel-efficient cars. Luft, the IAGS executive director, wrote on July 30, 2004 for Energy Pulse, an online forum for leaders in the power industry, that the utilities industry could provide the solution. Luft is a proponent of plug-in hybrid cars. Taking a step further than the hybrid vehicles currently on the market, the plug-in hybrid is equipped with a battery that can last for 20 to 50 miles of driving and can be charged using a standard electric outlet. Additionally, plug-ins have a regular gasoline engine and a fuel tank, which the vehicle can automatically and seamlessly switch to when the battery power runs out. This offers the consumer the same driving range as traditional vehicles. “Since 50 percent of the cars on the road in the U.S. drive 20 miles a day or less,” Luft said, “most of the driving in a plug-in is fueled by electricity. Overall, plug-ins can reduce gasoline use by 85 percent.”

Charging the cars at night or during the middle of the day, “when electric utilities have a great deal of excess capacity, plug-ins will enable utilities to sell electricity at off-peak hours thus increasing the use of existing capacity and generating more revenues,” said Luft.

“America leads the world in technology - and we need to use that technology to lead the world in fuel efficiency,” President George W. Bush declared on June 15, 2005 in his speech to the 16th Annual Energy Efficiency Forum.

By JINSA Editorial Assistant Chloe Feinberg.

Copyright JINSA, © 1999-2005.
All Rights Reserved.

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