The Status of Energy  

Source: Kenton Shepard

REPORT to the SECRETARY of ENERGY

In response to a request from Secretary of Energy Samuel Bodman for a report on the general status of energy in the U.S., the National Petroleum Council submitted a comprehensive report dated July 18, 2007. The report, entitled “Facing the Hard Truth’s about Energy”  was widely viewed by environmentalists as being overly conservative which, considering the contents of the report, is alarming…

Summary excerpt:

“Over the next 25 years, the United States and the world face hard truths about the global energy future:

• Coal, oil, and natural gas will remain indispensable to meeting total projected energy demand growth.
• The world is not running out of energy resources, but there are accumulating risks to continuing expansion of oil and natural gas production from the conventional sources relied upon historically. These risks create significant challenges to meeting projected total energy demand.
• To mitigate these risks, expansion of all economic energy sources will be required, including coal, nuclear, biomass, other renewables, and unconventional oil and natural gas. Each of these sources faces significant challenges including safety, environmental, political, or economic hurdles, and imposes infrastructure requirements for development and delivery.
• "Energy Independence" should not be confused with strengthening energy security. The concept of energy independence is not realistic in the foreseeable future, whereas U.S. energy security can be enhanced by moderating demand, expanding and diversifying domestic energy supplies, and strengthening global energy trade and investment. There can be no U.S. energy security without global energy security.
• A majority of the U.S. energy sector workforce, including skilled scientists and engineers, is eligible to retire within the next decade. The workforce must be replenished and trained.
• Policies aimed at curbing carbon dioxide emissions will alter the energy mix, increase energy related costs, and require reductions in demand growth.

The Council proposes five core strategies to assist markets in meeting the energy challenges to 2030 and beyond. All five strategies are essential—there is no single, easy solution to the multiple challenges we face. However, we are confident that the prompt adoption of these strategies, along with a sustained commitment to implementation, will promote U.S. competitiveness by balancing economic, security, and environmental goals.

The United States must:

• Moderate the growing demand for energy by increasing efficiency of transportation, residential, commercial, and industrial uses.
• Expand and diversify production from clean coal, nuclear, biomass, other renewables, and unconventional oil and gas; moderate the decline of conventional domestic oil and gas production; and increase access for development of new resources.
• Integrate energy policy into trade, economic, environmental, security, and foreign policies; strengthen global energy trade and investment; and broaden dialog with both producing and consuming nations to improve global energy security.
• Enhance science and engineering capabilities and create long-term opportunities for research and development in all phases of the energy supply and demand system.
• Develop the legal and regulatory framework to enable carbon capture and sequestration. In addition, as policymakers consider options to reduce carbon dioxide emissions, provide an effective global framework for carbon management, including establishment of a transparent, predictable, economy-wide cost for carbon dioxide emissions.”

The DIFFICULTIES of ENERGY PROJECTIONS

Trying to forecast the future of energy is like trying to nail Jell-O to a tree. Energy statistics are approximate at best. Countries, companies and organizations all have reasons for wanting to present statistics in ways which will benefit them. Generally, no means exist to confirm statistics such as proven reserves with much accuracy.

Energy forecasts are even less accurate because energy supply and demand are subject to such a large number of future variables such as:

• Rates of US/world economic growth
• Economic/ political stability
• Foreign investment climate
• International energy policy decisions
• Advances in technology
• Changes in consumption patterns
• Discovery rate of new resources
• Future energy price changes
• Accurate data from energy producers
• Changes in weather patterns

CONCLUSION

The world energy situation is experiencing the beginning of a period of change which in the future may affect the lives of Americans to a major degree. The change will not be rapid, but eventually, the easily-accessible, inexpensive petroleum which has fueled the US economy since the early 1900’s will become increasingly scarce and expensive. Maintaining future power supplies without disruptions will require making changes in the ways we produce and consume energy. Failure to address these problems will result in future disruption of energy supplies,  damage or weaken the U.S. economy and hinder the capacity for U.S. military response.