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Energy Security Current Issue What the 9/11 Commission missed One of the main conclusions of the 9/11 Commission is that in order for the U.S. to prevail in the war on terror it must develop a multidisciplinary, comprehensive, and balanced strategy, which integrates diplomacy, intelligence, covert action, law-enforcement, economic policy, foreign aid, homeland defense, and military strength. IAGS' Gal Luft argues that a key component is missing. The Connection: Water and Energy Security Allan Hoffman, former associate and acting deputy assistant secretary for Utility Technologies in the Office of Energy Efficiency and Renewable Energy of the DOE and IAGS Advisor, explains why water and energy security are inextricably linked. Watch Saudi Arabia in Crisis IAGS' Anne Korin presented a strategy for reducing U.S. dependence on Saudi oil as part of a conference hosted by the Hudson Institute on July 9, 2004. Watch the event (Anne's presentation starts at 02:38:35.) On the technology front How utilities can save America from its oil addiction Utility companies which have traditionally viewed themselves as providers of "power" for lighting homes or powering computers, can now break the dominance of Big Oil in the transportation energy sector and introduce much needed competition in the transportation fuel market. Gal Luft explains how. Comparing Hydrogen and Electricity for Transmission, Storage and Transportation Study: Coal based methanol is cheapest fuel for fuel cells A recently completed study by University of Florida researchers for the Georgetown University fuel cell program assessed the the future overall costs of various fuel options for fuel cell vehicles. The primary fuel options analyzed by the study were hydrogen from natural gas, hydrogen from coal, and methanol from coal. The study concluded that methanol from coal was the cheapest option, by a factor of almost 50%. Major improvement in fuel economy and range of Honda's fuel cell vehicles The 2005 model Honda fuel cell vehicle achieves a nearly 20 percent improvement in its EPA fuel economy rating and a 33 percent gain in peak power (107 hp vs. 80 hp) compared to the 2004 model, and feature a number of important technological achievements on the road to commercialization of fuel cell vehicles. Biodiesel fueled ships to cruise in Canada A Canadian project will test the use of pure biodiesel (B100) as a fuel supply on a fleet of 12 boats of various types and sizes, 11 boats on pure biodiesel (B100) and one on a 5-percent blend (B5). IAGS is a publicly supported, nonprofit organization under section 501(c)3 of the Internal Revenue Code. IAGS is not beholden to any industry or political group. We depend on you for support. If you think what we are doing is worthwhile, please Support IAGS. All contributions are tax deductible to the full extent allowed by law. Property of The Institute for the Analysis of Global Security © 2003-2005. All rights reserved. Back Issues |
Yogi and Gasoline
Said a famous NY Yankee, “Its déjà vu’ all over again”. Just when we thought Yogi (as an affable stand-in for our erstwhile political leaders) was enjoying his retirement, he’s floating the idea that the solution to our liquid fuels challenge with the Middle East is based upon a new concept, making usable liquid energy forms out of indigenous U.S. supplies of carbon, a.k.a. coal. Well Yogi, there’s a big, big difference between technological feasibility and political will and that difference makes all the difference.
Geopolitically, it’s all about emerging consumers. China and India, two countries with over 30% of world’s population, are driving the current crisis. Increasing liquid fuels demand from China and India is the principal reason why crude prices are spiraling, as demand is forecast to outstrip supply. As these countries experience rapid industrialization, the demand for liquid fuels will outpace the supply of crude oil, keeping the cost of crude very high for some time. And we keep getting reports that both China and India are keen to make energy deals and invest to build a more secure supply of liquid fuels. While the world watches, both China and India are embarking on long-term dependence on Middle East crude oil. To counter this impending disaster, I advocate a two step strategy that minimizes U.S. pain and the need for immediate investment, while improving crude oil supplies and lowering price pressure. The first step requires convincing both China and India that their best long-term fuels strategy is to convert their indigenous coal supplies into methanol. This investment program will provide local jobs, a cleaner environment, and drastically reduce their long term reliance on fickle Middle East nations. A major program by both countries will require U.S. technology, equipment and personnel skills, allowing us to establish best practices for the production facilities, transportation, and use of methanol for automobiles, while repatriating bloated foreign reserves of U.S. dollars, especially from China. And while these countries make this strategic investment over the next 25 years, crude oil suppliers will gradually lose pricing power. The second step is for the U.S. to build its own coal to methanol facilities, allowing 15-25 years to make the full conversion, after first assisting China and India. This long-term conversion window will keep U.S. aggregate financial risk lower and allow slow but steady progress to avoid operating in a crisis mode. This time window will also allow U.S. energy companies to more purposefully plan and make sound financial decisions with less government involvement. If government involvement is required (and it may be), tax incentives and other risk reducing inducements can be phased in gradually, as we adjust to a changing liquid fuels supply, reducing the need for economic shocks and other dislocations. But, my biggest concern in implementing this two step liquid fuels strategy is the same disappointment I faced twenty five years ago – the lack of political will. If we can’t sustain the will to implement this long term strategy, we will be faced with a continued reliance on unreliable suppliers, high costs, and, yes, more armed conflict. We need to be smarter this time and have some backbone. As Yogi said: “When you come to a fork in the road, take it!” Peter J. Vanderzee spent ten years in the energy industry and was a project manager for a $1 Billion Synthetic Fuels project. Top |
Energy Security
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