Americas Energy Choices 2012 Edition

8/2/2019 Americas Energy Choices 2012 Edition

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www.AmericanSecurityProject.org 1100 New York Avenue, NW Suite 710W Washington, DC

Aeca Eeg Chce

Adew Hllad2012 Ed

In Brief:

Americaneedsmoreenergyofallsorts,butespeciallyelectricity.

By2035,U.S.electricitydemandwillincreaseby25%.

By2050,allpresentU.S.electricity-generationpowerplantswillneedtobereplaced.

Wehavetomakechoicesonwhatenergymixweneedinthefuturethepresentsituationisgeopolitically,environmentally,andeconomicallyunsustainable.

Americasenergychoicesshouldbeconsideredinlightofthreeconcerns:

- Energy Security

- Economic Stability

- Environmental Sustainability

erearethreebroadcategoriesofenergytochoosefrom:FossilFuels,NuclearEnergy,andRenewablepower.Withineachofthesecategoriesareabroadrangeofchoices,eachofwhichwillhavepositivesandnegativesineachofthethreeareas.

efollowingpaperlaysoutthefacts,matchingthe10mostimportantenergychoicestotheconcernstoallowpolicymakerstomakeinformeddecisions.

Andrew Holland is the Senior Fellow for Energy and Climate at the American Security Project.


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AmEriCAn sECurity projECt

Aeca Eeg Chce

Thirty-sevenyearsago,PresidentRichardNixonannouncedanationalgoalthatbytheyear1980,theUniteStateswillnotbedependentonanyothercountryfortheenergyweneedtoprovideourjobs,toheatouhomes,andtokeepourtransportationmoving.1

Sincethis1974StateoftheUnionaddress,giveninthemidstofanembargoofoilexportstotheUnitedStatesandallies,somesortofenergyindependencehasbeenastatedpolicyofeveryPresidentialadministration.Regardlessofthrhetoric,however,theUnitedStateshasnotcomeanywherenearenergyindependence.

Today,energypolicyisbackatthecenterofnationalaairs.Partlythisisbecauseonceagain,forthesecondtimeinthryears,theglobalpriceofoilhasjumpedtonear-recordterritory.

eurgencyoftheenergydebatetoday,however,isaboutmorethansimplygasolineprices.EnvironmentalconcernsarbringingtheverybasisofAmericasenergysystemintoquestion:theevidencethathumanfossilfuelusecontributesclimatechangebecomesmoreunequivocaleveryday.

Americasforeignpolicyisconstrainedbyquestionsofenergysecurity,assupportfordemocraticrevolutionsacrosstArabworldhastobebalancedbyapreferenceforstabilityinthemajoroilproducingnationsaroundthePersianGu

EnergyinfrastructureacrosstheUnitedStatesisshowingitsageasthepowergridstrugglestomeetdemandandpowplantsnearretirement.Meanwhile,advancesinnewtechnologiesholdthepromiseofplentifulenergyrequiringlittlenofuel;butsignicantresearchfundingisrequired.

Policymakerswillhavetoaddressthesechallengeswhilealsoprovidingfora15%increaseintotalenergydemanacrosstheUnitedStates,includinga25%increaseinelectricitydemandby2035.Allofthiswillhappeninawor

where total energy demands are expected to increase

by50%,drivenbyunprecedentedeconomicgrowthindevelopingcountriessuchasBrazil,China,andIndia.

esechallengesaresignicantbutnoneofthemareaquestionofyesorno,either/or,doordonot.Instead,how the United States meets those challenges willrequirechoicesstrategicdecisionsaboutinfrastructureinvestment, government policy, researchfunding,andevenforeignpolicy.

esechallengescannotbemetbyslogansorpoliticalsound-bites.eseareimportantdecisionsrequiringaninformedandwide-rangingdebatenottrenchwarfareoversmallissues.etimeforrhetoricandposturingonenergyissuesisswiftlyapproachingitsend.etimeforaction,ortheconsequencesofinaction,isapproaching.

Source: EIA Annual Energy Outlook 2011, http://www.eia.gov/forecasts/aeo/MT_intl.cf


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Assessing Americas 21stCentury Energy Choices

Today,theUnitedStatesfacesaseriesofchoicesthatwilldeterminehowitseconomyispoweredtomeettheneedsofthe21stcentury.HowAmericachoosestoreplaceandexpanditsenergysupplywillaectthehealthoftheworlds

environment,Americasnationalsecurity,andthewell-beingoftheU.S.economy.However,thepoliticaldebatedoesnothaveaneectivevocabularytodiscussthecostsandbenetsofdierentchoices.

Policymakerstoooftenmakeargumentsaboutenergybasedonwhichwillsellthebestinordertotadecisionalreadymade.Instead,policymakersshouldlookattheoptionsandweighthetradeosforeach.Becausetherearetradeosdecisionmakersshouldnotpretendtherearesilverbulletsthatwillautomaticallybringcheap,clean,domesticenergytoall.

ispaperwillattempttooutlineamatrixofpolicychoicesforthegovernment,utilities,andtheprivatesectortoconsider.

ItwilllookattendierentoptionsforhowtofuelAmericaseconomy,eachofwhichwillbeconsideredinlightofthreeconcerns:

(1) Energy Security;

(2) Economic Stability; and

(3) Environmental Sustainability.

Sometimesthesetermsaresimplybuzzwords,soitisimportanttospecicallydeneeach.

Energy Security

Analytically,energysecurityisdiculttoquantify.PresidentJimmyCarterdenedenergysecurityina1977speechasindependenceofeconomicandpoliticalactionininternationalaairs. 2eUnitedStatesshouldbeableto

deneitsinterestsoverseasindependentlyfromhowitusesenergydomestically.

Importantly,energysecuritydoesnotmeanenergyindependenceinthesensethatalloftheenergyusedintheUnitedStatescomesfromwithinitsborderswithoutinternationaltrade.isisneitherobtainablenordesirableinaglobalized

world.Inaddition,energysecuritydoesnotdependonthepercentageofsupplythatisimported.Inaworldofgloballytradedcommodities,itisnolongerpossibletobetrulyenergyindependent:evendomesticallyproducedenergysourcesaresubjecttouctuationsinglobalcommoditymarkets.

Sincetheoilpricecrisesofthe1970s,theriskofabsolutesupplyshortageshasbeenreducedsignicantly.ecreationoftheInternationalEnergyAgency(IEA)anditsrequirementthatallmembercountriesholdoilstockscapableof

replacing90daysworthofimportsactsasabueragainstdisruptionsinoilsupplies.eU.S.StrategicPetroleumReservecansubstitutefor,onaverage,75daysworthofoilimportsasofJune2011,andprivatelyheldreservesaccountfortheadditionaldaysofimports.3

Althoughspeculatorsaresometimesblamedforinatingprices,thedeepeningofinternationalfuturestradingmarketsallowspricesignalstogivewarningsofimpendingsupplyanddemandimbalances.Today,then,fortheUnitedStates,energysecurityconcernsarenolongeraboutphysicaldisruptionsinsupply.eseconcernsstemfromthepossibility


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thatactionsinforeignpolicywillleadtopriceincreasescausingundueharmtoeconomicgrowth.

Keepingthisismind,thispaperdenesenergysecurityastheabilityforacountrytoactinitsforeignpolicyindependenofhowitusesenergydomestically.

Obtainingenergysecurityactuallydoesnotcomefromincreaseddomesticproductionalone:itcomesfromexibilicompetition,andredundancy.Ifasourceofenergysupplyiseasilyreplacedbyeitheradierentfueltypeoradiere

source,thenacountryisinsulatedfromsupplyshocks.U.S.foreignpolicyshouldbedeterminedbyitsinterests,nothowitgeneratesitsenergy.

Economic StabilityItseemsclearthatalldecisionsaboutenergypolicymustconsiderprice.eUnitedStates,though,isoneofthemoenergyintensivedevelopedeconomies,whichmakesitseconomyvulnerabletopriceuctuations.

Lowpricesattheexpenseoflittlebueragainstuctuationsinpricebothupanddowncanbemoreharmfulthahigherpricethatisstableoverthelong-term.Upwardpriceshocksharmconsumersbyactingasatax,butdownwapriceshockscanharmproducersaswellbyundermininglong-terminvestments.

Whenpricesarelow,consumersareencouragedintodependency,onlyincreasingtheeconomicdamageifpricesspiupwards.ebestexampleofthisisthattoday,Americandriversarefeelingthepainofgasoline-dependencythatyeoflowpricescreated.

Whendecisionmakersaredeliberatingaboutenergychoices,therelativepriceofeachdecisionisacriticalcomponeHowever,short-termfuelpricescannotbethereasonthatlong-termdecisionsaremade.Whendeliberatingonaenergychoice,itseconomicstabilitydenedashowenergyaectsthehealthofthecountryseconomyoverthelotermshouldbeanimportantconcern.Producersandconsumersshouldbeabletomakerationaleconomicdecisioindependentlyofpriceuctuationsornegativeexternalitiesfromenergy.

erefore,itismoreimportantforanenergychoicetobemadethatwillprovidelong-termeconomicstabilityrathethanprovidingonlyforlowpricesatanyexpense,particularlyifthosepricestendtobevolatile.

Economicstabilityshouldbeprioritizedabovelowpricesbecausethepursuitoflowpricescangivelicensetoproductoignoreothercosts.By ignoringtheseexternalities,particularlypollution,thepursuitof lowpricescancausenoeconomiccoststoariseelsewhere,forexampleinreducedhealthfrompollutedairandwater.

Environmental Sustainability

Whilethereremainsadeeppoliticaldivideinthiscountry(andfewothers)aboutwhetherman-madeemissioarecausingtheclimatetochange,thedebateinthescienticcommunityisnolongeraboutwhetherhumansa

causingclimatechange,buthowmuchthoseemissionsarehurting.

emostcontroversialdebatesamongscientistsareaboutthesensitivityoftheclimatetoincreasedconcentrationsogreenhousegases.However,evenifpolicymakersareskepticalofthescienticbasisforthetheoryofclimatechange,prudent,precautionarycourseinthefaceofuncertaintywoulddemandthatsomeactionbetaken.

Afterthe2008election,inwhichbothBarackObamaandJohnMcCainsupportedgovernmentpoliciestocapan


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ultimatelyreducegreenhousegasemissions,environmentalistshadhopedthattheU.S.Congresswouldaddresstheproblemofclimatechange.However,theproblemsofamajorrecession,shiftingstancesonthetruthbehindclimatechange,andcompetinglegislativeprioritiesmeantthattheWaxman-Markeybillto capgreenhousegasemissionspassedbytheHouseofRepresentativesinJune2009wasnevertakenupbytheSenate.

Eventhoughthereisnodomesticlawlimitingcarbonemissions,theU.S.Government,underbothPresidentsBushandObama,hascommittedtoanumberofinternationalagreementstocapandreduceemissions,expressedthrough

statementsattheG-7,theG-20,andtheUNsCopenhagenAccord.

Climatechangehasdeepimplicationsforenergypolicy.efossilfuelstheUnitedStatesusestoproduce83%ofitsenergyarethemaindriverofclimatechange.4erefore,anyplanthatlookstoreduceemissionswillrequireeitherreducingthetotalamountofenergyproduced(eitherthroughgainsineciency,orabsolutedeclinesinenergyused)orreplacingalargeportionofenergyproductionwithemissions-freepower.

Astheworldssecondlargestemitterabout5,638millionmetrictonsofcarbonemittedfromenergygenerationin2010(18%ofglobalemissions) 5 the U.S.willplayan important role indetermining whetherthe worldcansuccessfullypreventdangerousclimatechange.

Environmentalsustainabilityisaboutmorethanclimatechange,however.

LocalenvironmentaleectsofenergyproductionareasimportantormorethanclimatechangetohowtheUnitedStatesmakesitsdecisionsaboutenergyproduction.Decisionsonhowstrictlytolegislateandenforcepollutionlimitshavesignicantimpactsondecisionsabouthowtoproduceenergy.Environmentalsustainabilityinenergygenerationandextractionarecriticaltothefeasibilityofanyenergysystem.

eextraction,throughminingordrilling,offuelsandmineralsnecessaryforenergyproductioncanhavenegativeeectsonthelocalenvironment.eseexternalitiesincludespills,watercontamination,andairpollutionallofwhichcanbeharmfultothehealthofpeoplelivingandworkingaroundextractionsites.Howenergyproductionaectslocal

watersuppliesandlocalairqualitywilldeterminehowthepublicacceptsnewenergydevelopments.

Anenergysourceshouldbedenedasenvironmentallysustainableiftheproductionanduseofitdoesnotcauseundueharm.Whetherthatharmistolocalecosystems,theglobalatmosphere,watersystems,neighboringbusinesses,orhumanhealth,anenergysourcewithsubstantialexternalitiesisnotsustainableoverthelongterm.

Environmentalsustainabilityandeconomicstabilityarecloselylinkedoverthelong-term,becausean energychoicethatharmstheenvironmentwilleventuallycostmore.Itmaybetruethatpollutingcanreducecosts,justasthrowinggarbageoutanapartmentwindowischeaperthanpayingforgarbagecollection,butoverthelong-termbothwillproveunsustainable.isisbecausepolitical,regulatory,andlegalpressurewillbebroughtagainstpollutionsourcestobothreduceeuenceandcleanupanycontamination.

WhenmakingachoiceofhowtopowertheAmericaneconomyforthefuture,decisionmakersshouldclearlyarticulatehoweachpotentialsourceofenergyaectsnationalenergysecurity,economicstability,andenvironmentalsustainability.


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Options for Americas Energy Use

AccordingtotheEIA,theUnitedStatesistheworldslargestuserofenergy,consuming18.6%oftheglobalannenergysupplyin2008.6

A description of Americas future energy choicesmust begin with how the United States uses andproducesenergynow.LawrenceLivermoreNationalLaboratorysowchart(Figure1)showshowtheU.S.energyusein2009.ischartshowstherelativesizeandimportanceofeachsourceofenergy,aswellashoweachenergytypeisused.Analyzingthechartleadstosomeimportantconclusions,suchastheseparationofenergybetweenthatusedforelectricitygenerationandthatusedfortransportationandthestaggeringlyhighamountofrejected(wasted)energy.emajordrawbackofthechartisthatitisastaticsnapshotofenergyuseitdoesnotshowgrowthordeclineover time. Nevertheless, it provides an importantbaselineforthediscussionofthedierentfueltypes

thatfollows.

Source: Lawrence Livermore National Laboratory, https://fowcharts.llnl.gov/

Source: EIA International Energy Statistics, http://www.eia.gov/capps/ipdproject/IEDIndex3cm?tid=44&pid=44&aid=2


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I. Fossil Fuels

FossilfuelsmakeupthelargestportionofenergyproductionintheUnitedStates.Petroleumproducts,coal,andnaturalgasaccountedfor83%oftotalenergyproductionin2009.EachhasdierentphysicalpropertiesthathavegiventhemverydierentrolesinAmericascurrentenergymix.

Itisnotamistakethatfossilfuelsarethedominantsourcesoffuelintheindustrializedworld.ecombinationoflowpricesandhighenergydensityhavemaderstcoal,thenoilandnaturalgas,thepreferredchoicesforenergyproductionforover200years.islong-termusagegivesthosefuelstwocenturiesofbuilt-inadvantageintheformofinfrastructurebuilttouseandtransportthesefuels.Itisnotenoughtosaythatbecausefossilfuelsarecheap,theyalwayswillremainthebestchoice.

Risingglobaldemandforallsourcesoffossilfuelsisdrivenbypopulationgrowthandtherequirementsofaburgeoningmiddleclassindevelopingcountries.Meanwhile,althoughgeologists,economists,andanalystscontinuetoargueabouthowmuchcoal,oil,orgasremainsbeneaththeground,bydenition,suppliesoffossilfuelsarenite.

Together, increases in demand coupled withconstrained supply will inevitablylead topriceincreases. It is onlyaquestionofwhenfossilfuelsarenolongertheeconomical.

esethreemajorfossilfuelsallpresentsignicant,thoughdierent,challengestoAmericanenergysecurity,economicstability,andenvironmentalsustainability.

Sincetheverybeginningoftheindustrialrevolution,whenthecitiesofEnglandwereturnedblackbycoalsoot,ithasbeenclearthatburningfossilfuelshaveacosttothelocalenvironment.ispollutionisnotonlydangeroustoecosystemsandwildlife;ithasalsoprovedtobedetrimentaltohumanhealth.IntheUnitedStates,industrialpollutionfromfossilfuelswasoneofthemainreasonsforthecreationoftheEnvironmentalProtectionAgency.7

Overthelastthirtyyears,advancesintechnology,suchasthecatalyticconvertoronautomobilesandadvancedscrubbersinpowerplants,havereducedtheamountoftoxinsreleasedintolocalairandwatersupplies.However,itisonlywithin

thelastthirtyyearsthatscientistshavebeguntoprovethattheemissionsfromfossilfuels,especiallycarbondioxide,arealsocausingtheclimateoftheentireEarthtochange.Sofar,thereisnotechnicalxtothis:theonlywaytopreventfossilfuelsfromemittinggreenhousegasesintotheatmosphereistonotburnthematall.

e result of two centuriesof increasing fossil fuel use is that the concentration of carbon dioxide in the earthsatmospherehasrisenby4%fromabout275partspermillion(ppm)toarecord391ppmin2011andthattheEarthsaveragetemperaturehasrisenbyaboutonedegreeCelsius.8

eUnitedStateshas a responsibilityasthesecond largestemitter ofgreenhousegasesin the worldto reduce itsemissions.Innovationandnewtechnologiesareincreasingtheeciencyoftheenginesandpowerplantsthatburnfossilfuelsmeaningthatlessfuelandfeweremissionswillproducethesameamountofenergy.

However,anyeortstoreduceemissionsmustrealizethatyoucanonlygosofarwithfossilfuels.If83%ofAmericasenergycontinuestocomefromfossilfuels,thentheearthwouldlikelybestuckonatrajectoryofwarming3or4degreesabovepre-modernlevelsfarbeyondwhatclimatescientistshavedeemedasasafelevel.9


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1. Oil

Oilaccountsfor35%oftotalenergyuse.Whileverylittleofthatisusedtoproduceelectricity,itisthedominantfufortransportation:94%oftheenergythatpowersAmericancars,trucks,trains,andplanescomesfromburnin

fuelsrenedfromcrudeoilinaninternalcombustionengine.

e dominance of oil for transportation comes from its unique physical properties that make it well-adaptedtransportation:ithasahigheramountofenergyperkilogramthancoal,butbecauseitis inaliquidform,itiseastransportable,unlikenaturalgaswhichrequiresspecializedcontainment.

Oilalsoenjoys an eective monopolyon transportation because its century-long dominanceof transportationhresultedinalargeandecientinfrastructurededicatedtoextracting,rening,anddistributingcrudeoilandthefue

thatarerenedfromit.

Energy Security

FortheUnitedStates,dependenceonoilforitstransportationisadirectthreattoenergysecurity;concernsaboutth

impactonthepriceofoilareanimportantfactorinforeignpolicydecisions.

eUnitedStatesproducesmorethanhalfoftheoilitconsumes(netimportsare47%onconsumption)with20ofimportscomingfromitsNAFTAneighborsofCanadaandMexico,butthepriceconsumerspayforoildependsglobalmarkets.10

Evenif the UnitedStatescouldproduce100% oftheoilitused,Americanconsumerswouldstillbevulnerabletoglobalprice uctuations based on supply disruptions in unstableregions.Forexample,theriseinoilpricesduetotheSpring2011 revolution and civil war in Libya have impacted

Americanconsumers,eventhoughLibyanoilexportstotheU.S.composelessthan1%ofallimportsin2010.11IntegratedglobaloilmarketsmeanthatproducingmoreoilwithintheUnitedStateswillnoterasesecuritythreats.

Solongas30%ofglobalproductioncomesfromtheMiddleEast(12%fromSaudiArabiaalone,or10millionbarrelsperday)andsolongasithasover50%oftheworldstotalprovenreserves,AmericanforeignpolicyintheregionwillcontinuetofollowtheCarterDoctrine.12Firstpromulgatedin1979,itstatesthatbecauseofitsoilreserves,anattemptbyanyoutsideforcetogaincontrolofthePersianGulfregionwill

beregardedasanassaultonthevitalinterestsoftheUnitedStates.13

Source: EIA, Petroleum and Other Liquids,http://www.eia.gov/petroleum/data.cm


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Economic Stability

U.S.dependenceonoilfortransportationharmsitseconomicstabilityasmuchasitharmsitsenergysecurity.Inadditiontothelong-termproblemsofsupplyanddemand,oilsuersfromtheshort-termproblemofpricevolatility.Overthelastfouryearsalone,theglobalpriceofoilhasuctuatedfromanaveragepriceperbarrelof$69in2007toapeakof$147inJuly2008,backdownbelow$35inJanuary2009,thenbackupabove$120perbarrelinApril2011. 14isconstantuctuationharmsconsumersandbusinessesbecauseitimpairstheirabilitytoplanforthelong-term.

AsecondproblemofeconomicstabilityinAmericasrelianceonoilisthedependenceonimports.

eUnitedStatessendshundredsofbillionsofdollarsoverseastopayforoil.eUnitedStatesconsumedover$1.45trillionworthofoilin2010,ofwhich$680billionwasspentonimports. 15Withouttheseimports,theU.S.tradedecit,whichwas$497billionin2010,wouldnothaveexisted. 16atcapitalcouldbeusedforinvestmentathome.eexportofthiscapitalhastheeectofdrivingdownthevalueofthedollar.Coupledtogether,volatilityandimportdependencemeanthatrapidpriceincreasesactasataxincreaseonconsumersbutinsteadofthistaxincreasebeingusedtopaydownthebudgetdecitorinvestdomestically,50%ofitissentoverseas.

Environmental SustainabilityGreenhousegasemissionsfromoilandpetroleumproductsaresinglelargestsourceofcarbonemissionsintheU.S.17

Oilproduces164,000poundsofcarbondioxideemissionsperbillionBritishthermalunit(Btu)ofenergy--40%morethannaturalgas,but21%lessthancoal.18

eU.S.governmenthasinstitutedpolicies,suchastheincreaseinCorporateAverageFuelEciency(CAFE)standards,whichwillreducetheamountofgreenhousegasemissionspermiletraveled.ispolicywillproducetechnologicaloptionsforreducinggreenhousegasemissionsbyimprovingautomobileeciencyandbyincentivizingautomakerstolookforcleanerormoreecientfuelssuchasethanolorbiodiesel.

Althoughproducingoildomesticallyisgoodforeconomicstability,thereisatradeo.Drillingforoilcanproduceoilspills,liketheexplosionoftheDeepwaterHorizonplatformin2010whichkilled11workers,shutdownshingacrosstheGulfofMexico,andcouldultimatelycost$20billiontocleanup.19

Asexplorationforoilexpandsintomoredicult-to-accessareas,suchasdeepunderwater,intheArctic,orintheoilsandsofAlberta,Canada,itisclearthattherewillbeagreaterriskofenvironmentallydamagingspillsduetothetechnicalcomplexityofoperatingintheseareas.

e American public will have to make a choice of whether it accepts the risks of environmental damage fromincreaseddrilling.Politiciansandthepublicshouldnotbesurprisedwhenfutureaccidentshappeninsteadproperriskmanagementproceduresshouldbefollowedtominimizeboththeriskofanaccidentandthecostwhenonedoes

happen.


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2.Coal

Coalprovides21%oftotalenergyuseintheUnitedStatesandisthesinglelargestsourceofelectricpower,providin48%ofelectricitygeneration.Onlyabout7%ofcoalisburnedforanythingotherthantheproductionofelectrici-mostlyforindustrialusessuchassteelproduction.

IntheUnitedStates,thelargeststatesforcoalminingareWyomingandWestVirginia,whichannuallyproducemothanhalfofalldomesticcoal.20About$1.5billionworthofcoalisimportedeveryyear,althoughtheU.S.runsatrasurplusincoal,withaboutthreetimesthatamountexported.21

Energy Security

Coal,unlikeoil,isalmostentirelyproducedfromdomesticmines,anddoesnotpresentthesamesecuritythreatsasoMoreover,unlikeoil,coalisnotbeenaneasilytradablecommodity,duetoitssizeandweight.

evalueofcoaltoAmericanenergysecurityisevidentfromthehighprioritythatpresidentsfrombothpartiesgaveitduringthe1970senergycrises:PresidentsNixon,Ford,andCarterallinitiatedpoliciesthatfavoreddomesticcoproductionforelectricitygeneration.

eUnitedStatesisestimatedtohave249yearsofrecoverablecoalreservesatpresentratesofconsumption.Coalwoulbeanearlyoptimalchoice,forpurelyenergysecurityreasons,wereitnotforthefatalawsofitsenvironmentalansafetyrecord,whichwillbeexpandedonfurtherinsectionsbelow.22

Economic Stabilityedominanceofcoalinutility-scaleelectricitygenerationisbecauseminingandtransportationhashistoricallybeecheap.

Sincethe1970s,technologicaladvancementsallowedfortheconstructionoflarge,high-volume,coalpowerplantswhigherthermodynamiceciencythanolderplants,enablingmoreenergytobeconvertedtoelectricityandlesswastasheat.

Source: U.S. Coal Overview 1949-2009, EIA, http://www.eia.gov/coal


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For example,the largest coalpowerplant inthe country - the Rockport plantin Spencer, Indiana- iscapableofproducing2600MWofelectricity,twicethecapacityofanaverageAmericannuclearpowerplant.23Itusesover9milliontonsofcoalperyear.

However,thelong-termcheapnessofcoalasasourceofelectricpowermaybebeginningtocometoanend.Railroadstransportmostcoalproduction,andincreasingdemandsontrackalongwithindustryconsolidationmeanthattheycanincreasedeliverypricesofcoal;forsomecoaldeliveries,transportationcostsaccountfor50%ofthepriceofdeliveredcoal.24


epriceofcheapcoalisapparentinvisitstominingcountry,wheremountaintopshavebeenremovedandpeoplearelesshealthy.Coalminingremainsthe7thmostdangerousjobinthecountry.25

Burningcoalistheworstoptionforgreenhousegasemissions,producing208,000poundsofcarbondioxideemissionsperbillionBtuofoutput.26Coalalsocontainspollutants,includingmercury,lead,andsulfur.Manyofthesepollutantscanberemovedinthesmokestackbymodernscrubbertechnologies.However,thereisnotyetatechnologicalxforreducinggreenhousegasemissions.

erearepilotprojectsinNorwayandGermanythataretestingcarboncaptureandsequestration(CCS)technologyasawaytoremovegreenhousegasemissionsandsequesterthemunderground.eyhavenotyetdemonstratedthatthisisasafe,long-termoption.ItalsoispossiblethattheenergylostbycapturingandsequesteringthecarbondioxidewillmakecoalpowerplantswithCCStechnologymorecostlyandinecientthancompetingpowerplants.

Coalmayalsobetheworstoptionfortheenvironmentalandhumandamageitcauseswhenitismined.Coalminingreleasestoxicsulfuricacidintolocalgroundwatersupplies,destroyslocalecosystems,andharmshumanhealth.GreaterenvironmentalregulationsandtheincreasinguseofcoalfromWyomingsPowderRiverBasin,whichhaslessaveragesulfurcontentthanEasterncoal,meanthatthesenewcoalpowerplantsdonotemitasmanyacid-raincausingpollutants.

3. Natural Gas

Naturalgasprovides25%oftotalenergyuseintheUnitedStates,and19%ofelectricityproduction.Itisusedforelectricityproductionaswellasdirectlyinhouseholdsandbusinesses.It isalsoa veryimportantsourceoffeedstockforfertilizer.

In the last decade, new technology, particularly the commercialization of hydraulic fracturing (fracking), hasrevolutionizednaturalgasproductionintheU.S.Frackingallowsnaturalgastrappedinshalerockformationstobereleasedandcaptured.ishasledtonaturalgasproductioninareasofthecountry,suchasPennsylvaniaandColorado,

whereithadpreviouslynotbeeneconomicallyfeasible.Becauseofthenewshalegastechnologyproduction,totalnaturalgasextractionhasincreasedby21%from2005through2011.

Energy Security

ecommercializationofshalegastechnologyhasrevolutionizednaturalgasproductionintheUnitedStates,easingconcernsaboutenergysecurity.Estimatesoftechnicallyandeconomicallyrecoverablegasresourceshaveskyrocketed


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becauseofthefrackingtechnology.

eU.S.EnergyInformationAgency(EIA)estimatedin2010thattheUnitedStatespossessesatotalnaturalgaresourcebaseof2,552trillioncubicfeet(Tcf )ofpotentialnaturalgasresources.AtcurrentratesofusetheUnitedStathasreservesfor110yearsofnaturalgas.ereissomedisputebetweenagenciesovertotalreserves,butthenumbersaremuchlarger.

Before the boom was apparent asrecentlyas2006therewaspressurefromnaturalgasuserstobuildmoreliqueednatural gas (LNG) terminals in orderto import gas.27 Now, however, thoseterminals are increasingly being used toexportgas.Injusttenyears,from2000to2010,U.S.exportsofnaturalgashaveincreased by over 350%.28 e naturalgasboomintheUnitedStatesisnotonlygoodforAmericanenergysecurity,butit

hasalsohelpedAmericastradingpartnersandalliesespeciallythoseinEuropethatrelyonRussiangasimportstodiversifytheirfuelsources.

Economic Stability

Naturalgasisnotaseasilytransportableascoaloroil.Becauseitisagas,itrequiressignicantinfrastructureinvestmeninpipelines,liqueednaturalgasfacilities,orfueltankstotransportit.ismeansthattherearenotuniedmarketsfogaspricesofgasdeliveredtoafacilityvarysignicantlyaroundtheworld,andindeedindierentareasofthecountry

ispriceuncertaintyhasgivenutilitiessomeconcernaboutmakinglong-termcommitmentstousingnaturalgasasbaseloadpowersource.Instead,gaspowerplantshavebeenusedasback-upgenerationfortimesofpeakload.

efallingaspricesintheU.S.thathasaccompaniedtheshalegasboomhasbeguntostimulateinvestmentinnewgaspowerplants.However,electricutilitiesareverysensitiveaboutmakinglong-terminvestmentsthatrelyonnaturalgafuelwithahistoryofsurprisepricechangesbecausetheyareoftenpreventedbystatelawsandutilitycommissiofromincreasingconsumerrateswhenfuelpricesincrease.

eeconomicstabilityofnaturalgasasanenergysourceisstillanopenquestion,butifpricesremainhistoricallyloinvestorsshouldbeexpectedtotestitslong-termviability.


Burning natural gas ismore environmentally friendlythanany other fossil fuel because it burnscleaner with lepollutantsandnomercury.Itsgreenhousegasemissionsare117,000poundsofcarbondioxideperbillionBtu;44%lowerthancoaland30%lowerthanoil. 29ismeansthatifallelectricityproductioncurrentlyusingcoalnowwerswitchedtogas,totalU.S.greenhousegasemissionswouldbeabout10%less.

Inaddition,naturalgaspowerplantsareexcellentpartnerstorenewablepower.Becauserenewablegenerationisby


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naturevariable,itisimportanttohaveareadyreserveofreliablepowerfortimeswhendemandexceedssupply.Modernnaturalgaspowerplantsareabletoeconomicallyturnonando,unlikecoalornuclearplantsthatrequirelongleadtimestoheatupandcoolo.Forthesereasons,naturalgashasbeencalledabridgefueltoenablegreateruseofrenewablepowerinthegrid.

Althoughburningnaturalgasisrelativelyclean,thereisanongoingdebateabouthowdangeroustheminingofgasisforlocalairandwatersupplies.Hydraulicfracturingrequiresthatlargeamountsofwaterandchemicalsbeinjected

deepintotheearthathighpressures.ereisajustiablefear,andsomeevidence,thatthechemicalsinthefracturingwillleachintowatersupplies.30Properlydone,thechemicalsshouldnotgointothewatersupplybecausethefracturingtakesplacefarbelowthewatertable.

Withmorethan460,000wellsoperatingintheUnitedStates,however,itisimportantthathighstandardsaremaintainedacrossthecountry.Furtherstudy,increasedtransparency,andtightoversightatallstagesofthedrillingprocessshouldbeembracedbybothregulatorsandindustry.

Frackinghasotherenvironmentalconcernsbeyondthepossiblepollutionofwatersources.Peoplelivinginareaswithnewdrillingreporthigherincidentsofasthma.Inaddition,new drillingrequireslargeamountsof water,increasing

waterscarcityinareasalreadyunderwaterstress.Finally,newfrackingprojectsintheUnitedKingdomhavebeen

suspendedbecauseofconcernsaboutearthquakes.31


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II. Nuclear Power

N

uclearpoweristheexpressionofEinsteinsfamousequation:E=MC2,orEnergy=MassxSpeedofLigsquared.ismeansthereisatremendousamountofenergylockedinthenucleusofeveryatom.isenercanbereleasedinoneoftwoways:bysplittingtheatom(ssion)orbyfusingtwoatomstogether(fusion).

Humanityrstunleashedthefullpoweroftheatomwithresearchthatledtothebuildingoftherstatomicbombs1945.Shortlythereafter,in1952,athermonuclearhydrogenbombwastestedbytheUnitedStatesresultinginthrstman-made(thoughuncontrolled)fusionreaction.

Aftertheworldsawthedevastationthattheatomic bomb could bring, some foresawthat the same power unleashed by nuclear

weaponry could be harnessed for peacefulpurposes.Inthishope,PresidentEisenhower

begantheAtomsforPeaceprogram,witha1953 speech to the United Nations saying,the miraculous inventiveness of man shallnotbededicatedtohisdeath,butconsecratedtohislife.32

4. Nuclear Fission

Americanciviliannuclearpowerbeganin1955,whentheAtomicEnergyCommission

askedforproposalsfromtobuildnuclearreactors

toproduceelectricpowerfromnuclearssion.By1960,3civilianpowerreactorswereinoperation.Twentyyearslatby1980,87reactorswereinoperationaroundthecountry.

However,the1979accidentatreeMileIsland,inwhichanuclearreactorscoremelteddown,andquestionsabothecostandeciencyofnuclearpower,slowednewconstruction.After1980,over100reactororderswerecanceledanfourteenalreadyoperationalreactorswerepermanentlyshutdown.

Today,atotalof104reactorsareoperationalaroundthecountry,withacapacityof101.0gigawatts.In2009,nucle

energyprovidedabout20%ofthecountrystotalelectricitygenerationand9%oftotalenergy.33

ereisonlyonenuclearreactorcurrentlyunderconstructionintheU.S.Othersareawaitingpermittingand

nancing,butforecastsofanuclearrenaissancehavenotyetcomeabout.Oneareathatcouldseegrowthnuclearreactorconstructionissmall,modularreactors;theTennesseeValleyAuthorityrecentlysignedaletteofintenttobuilduptosixsmallreactors.enumberofthesetypesofnuclearpowerplantscouldincreassincenancingwillbeeasiertocomebyandconstructionwillnottakeaslong.

Source: EIA, Nuclear and Uranium, http://www.eia.gov/nuclear/data.m


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Energy Security

Fromatraditionalenergysecuritypointofview,increasinguseofnuclearssionreactorsforelectricitywouldgiveastrongboosttonationalenergysecurity:itsfuel(uranium)iseitheravailablefromdomesticmines,orfromdecommissionednuclearweapons.

However, nuclear power does present more

traditional threats to security. Nuclear powerplants close to population centers, such asNewYorksIndianPointreactor,arepotentialterroristtargets.

Economic Stability

Originally, nuclear power was envisioned asa cheap source of plentiful electricity mostmemorably, it was described in 1954 by theheadoftheAtomicEnergyCommission,Lewis

Strauss,astoocheaptometer.34

Unfortunately,thathasnotprovedtobethecase.

Unlikefossilfuel-poweredelectricitygeneration,mostofthecostfornuclearpowerisxed,inup-front infrastructure costs. Once a plant iscompleteandrunning,thevariablecostoffuelonlyaddsasmallamounttothepriceofelectricitygenerated.

Historyhasshownthatthebudgetfornewnuclearreactors,alreadyhigh,isveryoftenexceeded.Anassessmentof75ofAmericasexistingreactorsshowedpredictedcoststohavebeen$45billion,buttheactualcostswere$145billion.35ecountrywiththemostrecentnuclearpowerconstructionexperience,India,showsthatcostsofitslast10reactors

haveaveraged300%overbudget.Oncebuilt,however,anotedbenetofnuclearpoweristhatthepriceofelectricityisstableandpredictable.

Spentfuelisalsoadrainongovernmentresources.Underthe1982NuclearWastePolicyAct,theU.S.governmentwastocreateapermanentstoragesiteforradioactivespentnuclearfuelbyFebruary1998.irteenyearslater,thefederalgovernmentisnoclosertomeetingthisrequirement;asaresult,utilitieshaveleddozensoflawsuitsforover$6billioninclaims.Ofthis,thegovernmenthasalreadypaid$956million,andithasspentnearly$170millionsimplydefendingitself.DepartmentofEnergystatisticsshowthatnewlawsuitsandothercostscouldeventuallypushthegovernmentslegalliabilitytoover$16billion.36


Nuclearpower,bothfromssionandfusion,doesnotproducegreenhousegases.Forthisreason,someenvironmentalistsmostworriedaboutclimatechangehaveshiftedfromtheirtraditionaloppositiontonuclearpower.IftheUnitedStates

producedthesamepercentageofitselectricityfromnuclearpowerasFrancedoes(77%),itwouldproduce19%fewergreenhousegases.

Althoughtherearenopollutingemissionsfromexisting(ssion)nuclearpower,thatdoesnotmakeitcompletelyclean.


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Spentnuclearfuel,whichcanconsistofradioactiveuranium,plutonium,orthorium,presentslong-termthreatsfroradiationcontamination.Afterspentnuclearfuelisremovedfromthereactor,itisplacedintemporarywatercoolinpoolswithinthereactorfacility.iswasnotintendedtobepermanent,butthegovernmentsfailuretondalontermstrategyforstoringspentnuclearfuelmeansthatmostofAmericasradioactivespentfuel63,000tonsofnucle

wasteisstoredon-site.37

5. Fusion

Fusionhasnotseenthesamesuccessasasourceofenergytodate.ebasicfuelforfusionishydrogen,andenergyproducedbyforcingtogethertheatomicnucleiofdeuteriumandtritium(twoformsofhydrogen)toformheliuAgreatdealofenergyisreleasedbythisreaction:onepoundoffusionfueliscapableofyieldingasmuchenergyasicontainedin10millionpoundsofcoal.

erstpatentrelatedtofusionenergywasissuedintheUnitedKingdomin1946.Sincethen,therehavebeennumberofsignicantbreakthroughs,includingcontrolledfusionreactions.Uptonow,theproblemsofhowtocontatheintenseheatandpressureneedforasustainedfusionreactionhavepreventedfusionreactionsfromachievingtpointwheremoreenergywillbereleasedfromthereactionthanisbeingusedtoinitiateandcontrolit.

Recentadvancesinlaserandmagnetictechnology,however,haveraisedhopesthatfusioncouldbecomeanewsourceoelectricityoverthemedium-term.ScientistsfromtheLawrenceLivermoreNationalLaboratoryinCalifornia,workiunder the auspices of the National Nuclear Security Administration at the National Ignition Facility (NIF), hapredictedthattheywillbeabletoachieveafusionreactionthatgetsnetenergygainasignicantmilestoneusingadvancedlasersforcompressionandcontainmentbytheendof2012.38

Energy Security

Fusion power has the potential to

alleviateconcernsaboutenergysecurity.Fueltopowerfusionpowerisavailableinseawater.

e downside risk on energy securitycomesfromnotinvestinginresearchanddevelopment.Ifothernationaleortsinothercountries, particularly competitorcountries like China, are successful incommercializing fusion reactions, then

they will sell the technology abroad, attheexpenseoftheU.S.

Importantly,dependenceontechnologyandinfrastructuredonotraisethesameenergysecurityconcernsasdependenceuponimportedfueldoes,buttheywill


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certainlyexertacost.

Economic Stability

Bringingfusionpowertoalevelthatitiscommerciallyviablewillrequiresignicantresearchanddevelopmentspending,estimatedatabout$35billionovera15-yearperiod(or$2.33billionperyear).39isisasignicantoutlay,butforcomparison,thecostoftheManhattanprojectwasapproximately$22billionincurrentdollarsover5years,andthe

Apolloprogramwas$98billionover14years.40

Oncecommercialized,powerplantsarelikelytorequireahighinitialconstructioncostandlowoperatingcosts.Fusionhasthepotentialtobealong-termsourceofenergy,butitwillrequiresignicantandsustainedinvestmentinordertomeettheengineeringandscienticneedsrequired.


Fusionpowerdoesnotproduceradioactivewasteatnearlythesamelevelasssion.Infact,developingfusionmayactuallyhelptosolvetheproblemofspentnuclearfuel.PhysicistsattheUniversityofTexasatAustinhavedesignedanewsystemthat,whenfullydeveloped,wouldusefusiontoeliminatemostofthewasteproducedbyssionnuclear

powerplants.

Pairingssionandfusionreactionswouldalsoallowthedangerousradiationtobeabsorbedbyfusionreactions,therebyusingtheharmfulradiationfromssionreactionstopowerfusionreactions.Inthisway,fusioncouldhelpthelong-

termenvironmentalsustainabilityofexistingU.S.nuclearpowerplants.


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III. Renewable Power

Beforethewidespreadadoptionoffossilfuelstwohundredyearsago,renewablesourcesofpowerweretheonenergysourcesavailable.Manytownswerebuiltonornearriversinordertotakeadvantageofthepowerrunningwater.

Wind was the prime mode of power for watertransportation.Biomassisjustamoretechnicalnameforburningwoodforheatorlight.Inthe21stcentury,inaneorttoreturntoanenergysystemthatismoresustainable, limitless, and is less likely to provokeconict,humanityisreturningtoitsoriginalsourcesofenergy.istime,though,scientistsareusingthecombined technology and innovation of the 21stcenturyinordertobetterharnessthesesources.Renewablepowerincludespowergeneratedbywater,

wind,thesun,plants,orthenaturalheatoftheearth.Together,thesevepowersourceshydro,wind,solar,biomass,andgeothermalaccountfor8.2%oftotalenergygenerationintheUnitedStates,and10.8%ofelectricitygeneration.

edierent fossilfuelor nuclear sourcesofenergyeach present separate challenges or concerns aboutenergysecurity,economicstability,andenvironmentalsustainability.However,thepositivesandnegativeforthesethreecriteriaarelargelysharedacrosseachofthe

vetypesofrenewableenergysource.Forthatreason,thischapterwillbrieygiveashortoverviewofeachtype of renewable power, followed by a discussionof the shared concerns about renewable power forenergysecurity,economicstability,andenvironmental

sustainability.

6. Hydropower

H

ydropower is the largest renewable source ofenergyintheUnitedStates.Itproduces7%of

thecountryselectricitypowerin 1950,itproduced30%of thecountryspower.eGrandCouleeDamontColombiaRiverinWashingtonisthelargestelectricitypowerplantinthecountry,capableofgenerating6.9gigawaofelectricity.41

However,thereislittleroomforgrowth.Hydroelectricplantscanonlyoperatewhereriversprovidesuitableamounofpotentialenergy,andmostofthebestsiteshavealreadybeendeveloped.Consequently,conventionalhydroelectgenerationgrewsteadilythroughthe1970s,peakedin1997,andhasbeendecliningforthelastdecade.

Source: EIA, Renewable Energy Consumption and Electricity Preliminary


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oughthereareotherformsofhydrogeneration, like underwater run oftheriverturbines,theirmaturitydoesnot approach the level of traditionalhydropower,andtheirdevelopmentis

speculative.

One area of hydropower that couldprove to be an area of growth istidal power. Like conventionalhydropower, it generates electricityusing the kinetic energy containedin water currents. ere are severalmechanisms for generating tidalpower,rangingfrombarragesthatlooklike traditional hydroelectricdamstostreamgeneratorsthatactalmostlike

undersea wind turbines to oatingbuoys that use wave movements togeneratepower. elargestcurrentlyoperatinggeneratorisinSihwaLake,SouthKoreawitha254MWoutputcapacity.IntheU.S.thereareestimatesthatthereisenoughwaveandtidalpotentialtopower15-30%ofAmericasenergydemand,butcostandsitingarechallengesthatwillneedtobeovercome.45

7. Wind

Windpoweroverthepastdecadehasbeen the fastest growing source

of American energy. For the ten yearsto 2009, wind had an average annualgrowthrateof32%.Today, itaccountsfor2%ofelectricitygeneration.42

Large scale wind farms are beinginstalled across the county. Oshore

wind farms are being installed rapidlyin some European countries, but inthe United States, only two are in the

planningprocessandnonehavebegunconstruction. Wind farms placed farenoughoshorecanovercometheoftencited opposition to wind that comesfromconcernsaboutobstructedviewsinonshorefarms.


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8. Solar

Solarpoweris lessutilizedthanwindin the UnitedStates.In 2010,it accounted for only .03%oftotalenerproduction,withmostofthatgoingtohouseholduses,suchassolarheating.43Utility-scaleelectricitygenerationtheUnitedStatesfromsolarcellsisstillafar-odream.Europeangovernmentshavebeeninvestingmoreheavilyingovernmentpoliciestopromotelarge-scalesolarpower.

erearetwomainwaystoproduceelectricityfromthesun.erstisthroughphotovoltaiccellsthatcapturesunlighonsiliconandtransformitintoelectricity.

esecondiscalledconcentratedsolarthermal.Inthismethod,specializedmirrorsareusedtofocustheheatandligofthesunonacentralcorethatisheated.eheatfromthiscoreisthenusedtogeneratesteam,turningaturbineancreatingelectricity.ebenetofthisformofsolarthermalpoweristhattheheatofthecentralcorecanbemaintainsothatpowercanbegeneratedevenwhenthesungoesdown.

9. Biomass

Generatingenergyfrombiomassistheabilitytouseplantsforfuel.iscanbeassimpleasusingwaste-woodfrosawmillsorpaperfactoriesinresidentialheatingsystemsoritcanrefertotheprocessofreningcornintoethanthatisthenblendedintogasoline.

EthanolisthemostimportantofthesefuelsintheUnitedStates,butothercountrieshavemadebiodieselmadefromoilseedsandpalmoilsignicantpartsoftheirtransportationfuels.Givengeneroussubsidies,corn-basedethanol,blendeintogasoline,providesabout4%oftheenergyusedintransportation.

Advancedformsofbiodieselincludeproposalstorenefuelfromalgae.

10. Geothermal

GeothermalpowercomesfromtheEarthsnaturalheat.Residentialgeothermalsystemsincludesimpleheatpumthatusethesoilsconstanttemperaturetohelpkeephouseswarminthewinterandcoolinthesummer.Geothermalonautility-scaleisastable,long-termsourceofenergy,butonlyincertainareaswherethecrustoftheeartisthinandvolcanicorseismicactivityishigh.eUnitedStatescurrentlyhasthemostinstalledgeothermalelectricgenerationcapacityinternationally,withapproximately3.1gigawattsofonlinecapacity.

AsofApril2011,geothermalelectricpowergenerationisoccurringinnineU.S.states:Alaska,California,Hawa

Idaho,Nevada,NewMexico,Oregon,Utah,andWyoming.elargestproducerofgeothermalenergyisCaliforniawith83%ofnationalgeneratingcapacity.44


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Energy Security

Anyformofrenewablepowerpresentsfewconcernsaboutenergysecuritybecausetheydonotuseafuelthathastobeimported.

Somecomplainaboutdependenceonimportedsolarpanelsorotherenergy-producinggoodsfromChina,butthisisnotthesameasenergysecurity.Unlikedependenceonacommoditylikeoil,importingsolarpanelsforexampleconstituteaone-time-onlyxedcost.Oncethecostisborne,thereisverylittlevariablecostforgeneratingrenewableenergy.esameistruewhenconcernsareraisedthatimportinglithiumforadvancedbatterieswillonlyreplaceimportsfromunstableVenezuelaorIraqwithimportsfromunstableBolivia.isislikewiseafalseargument,becausebatteriesshouldbetermedasaxedinvestmentcost,notavariablecost,likefuel.Whiletherearegoodeconomicargumentsfornotbeingreliantonimportsofmineralsorrenewableenergymaterials,therearefewvalidsecurityarguments.

Aneconomythatreliesonrenewablepowerforitsenergyneedswillbeabletomanageitsforeignpolicyindependentlyofhowitutilizesenergy.

However,giventheseparationinfuelsbetweenelectricitygenerationandtransportation,policymakersshouldnotbedeludedintothinkingthatincreasingrenewableelectricitygenerationwillautomaticallyincreaseenergysecurity.ere

alsoneedstobeacoherentstrategytousemorerenewablepowerintransportation.Onlybygivingconsumersachoiceabouthowtofueltheircarswillpolicymakersbeabletobreakthegripthatoilhasontransportation.

IntheUnitedStates,transportationisprimarilybyautomobiles,soanyproposaltousemorerenewableenergyintransportationmustbeginbyeitherelectrifyingtheautoeetorsignicantlyincreasingtheavailabilityanduseofethanolandbiodiesel.

Economic Stability

Renewablepowerreceivessubsidies,andinsomecases,verygenerousones.Ofthevetypesofrenewablepower,onlyconventionalhydroelectricisconsistentlycompetitiveoncostofgenerationwithfossilfuels.However,thedemonstrated

benetsofgeneratingelectricitywithoutusingapollutingfuelareabenetthatthegovernmenthasaninterestinpromoting.

eproblemwiththerenewableproductiontaxcreditandanyothersubsidiesisnotthatthegovernmentispickingwinnersandlosers,butthatitschoicesareinconsistent.Forbusinessesandutilitiestomakemulti-yearinvestmentsinlarge-scalerenewableenergy,theyneedmorecertaintythantheconsistentbipartisanbrinksmanshipoverwhethertoextendthesesubsidiesforonemoreyear.

Inareasofthecountrywithconsistentandstrongwinds,installingnewwindturbinesisalreadypricecompetitivewithnewfossil-fuelgeneration,withoutsubsidies.However,windpowerpresentstwoproblemsofeconomicstability:intermittencyandgridstability.Toovercometheseproblemswillrequiretheelectricitygridtomodernizefromits19th

centuryrootsintoamodernsmartgrid.

Withasmartgrid,installedenergystoragefacilities,suchasbatteriesorywheels,willstoreelectricityfortimeswhenitismostneededandcomputerscandirectelectricityalonglong-distancehigh-voltagelinesfromareaswherethewindisblowingtoareasthatneedelectricity.

AsmentionedintheFossilFuelschapter,thissmartgridshouldbepairedwithnaturalgasturbinepowerplantsthat


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caneasilyincreasepowertomatchuctuatingloadlevels.Hydroelectricpowercanalsobeeasilystoredfortimesofpeakload.

Solarpowerseconomicbenetisitscompactnessandversatility.Itdoesnotrequirelarge,expensivesolararraysgeneratepower.Instead,smallunitscanbeinstalledtoosetthecostsofelectricity.Withproperlegalregulations(nimplementedinallstates),consumerscaninstallsolarpowerontheirpropertylikelyontheirroofanddefraythemonthlycostofelectricity.Attimesoflowhouseholdusage,theycanevenselltheelectricitybacktothegrid.


Ingeneral,renewablepowerproducesnogreenhousegasemissions.However,thatdoesnotmeanthattheyarewithoenvironmentalcontroversy.

Americasethanolprogram,forexample,iscomingunderintenseandjustiedscrutiny.erearesignicantquestioaboutthelifecycleemissionsofethanol.Eventhoughitcomesfromplants,heavyinputsoffertilizeranduseoffosfuelstoproduceandtransportitmeanthattheminimalbenetinreducedgreenhousegasemissionsmaynotbeworthesubsidiesethanolproductionreceives.Cellulosicethanol,whichisderivedfromgrassesorothersortsofherbaceo

plants,isnotyetinwidespreaduse.Onceitcommerciallyviable,thistechnologyshouldaddresstheenvironmensustainabilityandtheeconomicconcernaboutusingfoodforfuel.

emainenvironmentalproblemswithrenewablepowercomefromthesizeofitsfootprintanditsimpactsonlowildlifeandecosystems.eGrandCouleeDam,forexample,oodeda125squaremilearea,displacingthousandsandpermanentlyendingtheannualsalmonrunuptheColombiaRiver.

Large solar power plants planned for the California deserts are currently coming up against opposition froenvironmentalistswhowanttoprotectendangeredwildlifefromhumanencroachment.

eenvironmentaloppositiontothesitesofsomerenewablepowerplantscomesdowntoprioritization.Isthehealt

oflocalecosystemsmoreimportantthanpromotingnewtechnologiesthatcouldpreventthemanydangersassociatewithclimatechange?


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Conclusions

T

he challenges facing America on how to produce and use the energy it needs foreveryaspectofmodernlifearenotnew.elasttimetheUnitedStatesfacedaseries

ofchoicesaboutitsenergypolicywasintheenergycrisesofthe1970s,whichweretraumatic to the United States,with oil price spikes, shortages of gasoline, ination, andnuclearscares.Decisionsaboutenergyproductionandusemadeinresponsetothesecriseshadfar-reachingconsequencesforAmericasenergyinfrastructure,itseconomy,anditsforeignpolicy.

Today,Americaisfacingsomeofthesamechallengesasconcernsaboutenergysecurityareonceagainatthetopoftheagenda.However,thenewcomplicationdealingwithachangingclimatemeansthatgreenhousegasemissionsareanaddedconcern.

Noneofthechallengesareinsurmountable,buttheydorequirethatpeopleingovernmentandintheprivatesectormakechoicesandpriorities.Simplyretainingthestatusquoprovidesintolerably high levels of risk to energy security, economic stability, and environmentalsustainability.

eUnitedStatescannotaordaforeignpolicythatcontinuestobeworriedaboutdistantoilmarkets.Itcannotallowthedollartocontinuetobedebasedbysending$680billionperyeartoforeigncountriessimplytobeallowedtodrive.Itisdangeroustoallowgreenhousegas

emissionstogrowunchecked.

To meet thesechallenges will requirepolicymakers tomake some decisions and set someprioritiesthatwillnotalwaysbepopular.But,inthelong-term,theyareinthebestinterestsofthecountry.


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Endnotes

1 ToreadallofPresidentNixons1974StateoftheUnionAddress,see:http://stateoftheunionaddress.org/1974-richard-nixon(accessedJune22,2011).

2 ToreadallofPresidentCarters1977AddressonEnergyPolicy,seehttp://www.pbs.org/wgbh/americanexperience/fea-tures/primary-resources/carter-energy/(accessedJune22,2011).

3 UnitedStatesDepartmentofEnergy,StrategicPetroleumReserveProjectManagementOce.Dataavailableathttp:/

www.fe.doe.gov/programs/reserves/spr/index.html(accessedJune22,2011).4 Forafulldiscussiononthemaindriversofclimatechange,seeIntergovernmentalPanelonClimateChange(IPCC)FourthAssessmentReport,WorkingGroup1,ePhysicalScienceBasis(2007).

5 USEnergyInformationAgency(EIA),EmissionsofGreenhouseGasesintheUnitedStates2009.Reportavailableathttp://www.eia.gov/environment/emissions/ghg_report/pdf/0573(2009).pdf.

6 InternationalEnergyAgency(IEA)KeyWorldEnergyStatistics,2008Reportavailableathttp://www.iea.org/textbasnppdf/free/2008/key_stats_2008.pdf.

7 EnvironmentalProtectionAgency(EPA)OriginsoftheEPAhttp://www.epa.gov/aboutepa/history/origins.html(ac-cessedJune22,2011).

8 NationalAeronauticsandSpaceAdministration(NASA),OceofGlobalClimateChange,KeyIndicators.Dataava

ableathttp://climate.nasa.gov/keyIndicators/index.cfm#co2.9 Wynn,Gerald,4degreeswarminglikelywithoutCO2cuts-studyReuters,September28,2009,http://www.reutercom/article/2009/09/28/idUSLP228193(accessedJune22,2011).

10 EIA,PetroleumandOtherLiquids,U.S.ImportsbyCountryofOrigin.Dataavailableathttp://www.eia.gov/dnav/petpet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm.

11 ibid.

12 EIA,WorldOilProduction,SaudiArabia.Dataavailableathttp://www.eia.gov/countries/index.cfm?view=production

13 Yergin,Daniel, ePrize:eEpicQuestforOil,Money,andPower,NewYork:Simon&Schuster,1991.

14 EIA,PetroleumandOtherLiquids,WorldCrudeOilPrices.Dataavailableathttp://www.eia.gov/dnav/pet/pet_pri_

wco_k_w.htm.

15 ibid.

16 U.S.DepartmentofCommerce,InternationalTradeAdministration,TradeStatsExpress.Dataavailableathttp://tse.export.gov/TSE/TSEhome.aspx

17 EIA,EmissionsofGreenhouseGasesintheUnitedStates2009.Reportavailableathttp://www.eia.gov/environment/emissions/ghg_report/pdf/0573(2009).pdf.

18 EIA,VoluntaryReportingofGreenhouseGasesProgram.Dataavailableathttp://www.eia.gov/oiaf/1605/coecients.html.

19 DeepWater;eGulfOilDisasterandtheFutureofOshoreDrillingFinalReportoftheNationalCommissionotheBPDeepwaterHorizonOilSpillandOshoreDrilling,2011.Reportavailableathttp://www.oilspillcommission.gov/nal-

report.

20 EIA,Coal,CoalProductionandNumberofMinesbyStateandCoalRank.Dataavailableathttp://www.eia.gov/cneacoal/page/acr/table6.html.

21 U.S.DepartmentofCommerce,InternationalTradeAdministration,TradeStatsExpress.Dataavailableathttp://tse.export.gov/TSE/TSEhome.aspx.

22 EIA,ANNUALENERGYOUTLOOK2011.Reportavailableathttp://www.eia.gov/forecasts/aeo/pdf/0383(2011).p


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23 EIA,ElectricPowerAnnual.Dataavailableathttp://www.eia.gov/cneaf/electricity/epa/epaxlle1_2.xls.

24 EIA,eCoalTransportationRateDatabase,Dataavailableathttp://www.eia.gov/cneaf/coal/ctrdb/database.html.

25 MostDangerousJobsinAmericaCNN/Money,http://money.cnn.com/galleries/2010/news/1004/gallery.Most_dan-gerous_jobs/index.html(accessedJune22,2011)


27 Mufson,Steven,AsNaturalGasGlutLooms,ProducersEyetheWeathereWashingtonPost,June16,2006,http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR2006061502062.html(accessedJune22,2011).

28 EIA,NaturalGas,ImportsbyCountry.Dataavailableathttp://www.eia.gov/dnav/ng/ng_move_impc_s1_m.htm.


30 Urbina,IanRegulationLaxasGasWellsTaintedWatershitRiversNewYorkTimes,February26,2011,http://www.nytimes.com/2011/02/27/us/27gas.html?pagewanted=1&_r=2&hp(accessedJune27,2011).

31 Shalegasfracking:MPscallforsafetyinquiryaftertremorsBBC,June8,2011,http://www.bbc.co.uk/news/uk-eng-land-lancashire-13700575(accessedJune27,2011).

32 EisenhowerPresidentialArchivesDraftofthePresidentialSpeechBeforetheGeneralAssemblyoftheUnitedNationsNovember28,1953.Availableathttp://www.eisenhower.archives.gov/research/digital_documents/Atoms_For_Peace/New%20PDFs/Atoms_for_Peace_Draft.pdf(accessedJune22,2011).

33 EIA,NuclearandUranium,U.S.NuclearStatistics.Dataavailableathttp://www.eia.gov/cneaf/nuclear/page/operation/statoperation.html.

34 AbundantPowerfromAtomSeen;Itwillbetoocheapforourchildrentometer,Strausstellssciencewriters,NewYorkTimes,Sept.17,1954.

35 GreenpeaceInternational,eEconomicsofNuclearPowerSummer2007.Reportavailableathttp://www.green-peace.org/raw/content/international/press/reports/summary-the-economics-of-nucl.pdf.

36 Sapien,Joaquin.WhileNuclearWastePilesUpinU.S.,BillionsinFundtoHandleItSitUnusedProPublica,March30,2011,http://www.propublica.org/article/while-nuclear-waste-piles-up-in-u.s.-billions-in-fund-to-handle-it-sits-unu/single(ac-cessedJune22,2011).

37 BlueRibbonCommissiononAmericasNuclearFutureDraftRecommendationsMay19,2011,http://brc.gov/index.php?q=announcement/brc-releases-its-draft-recommendations-may-13(accessedJune22,2011).

38 eNationalIgnitionFacilityeBostonGlobe,October8,2010,http://www.boston.com/bigpicture/2010/10/the_national_ignition_facility.html(accessedJune22,2011).

39 AmericanSecurityProjectFUSIONENERGY:AnOpportunityforAmericanLeadershipandSecurityJanuary24,2011.Reportavailableathttp://americansecurityproject.org/wp-content/uploads/2011/01/White-Paper-on-Fusion-Final-21.pdf.

40 Stine,DeborahD.eManhattanProject,theApolloProgram,andFederalEnergyTechnologyR&DPrograms:AComparativeAnalysisCongressionalResearchService,June30,2009.Reportavailableathttp://www.fas.org/sgp/crs/misc/RL34645.pdf.

41 EIA,ElectricPowerAnnual.Dataavailableathttp://www.eia.gov/cneaf/electricity/epa/epaxlle1_2.xls.

42 ibid.

43 ibid.

44 ibid.

45 USDeptofEnergy,TappingintoWaveandTidalOceanPower:15%WaterPowerby2030Jan27,2012http://energy.gov/articles/tapping-wave-and-tidal-ocean-power-15-water-power-2030


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Bldg a new Aeca Aeal

Te American Security Project (ASP) is a nonpartisan initiative to educate

the American public about the changing nature o national security in the

21st century.

Gone are the days when a nations strength could be measured by bombers

and battleships. Security in this new era requires a New American Arsenal

harnessing all o Americas strengths: the orce o our diplomacy; the might o

our military; the vigor o our economy; and the power o our ideals.

We believe that America must lead other nations in the pursuit o our

common goals and shared security. We must conront international

challenges with all the tools at our disposal. We must address emerging

problems beore they become security crises. And to do this, we must orge a

new bipartisan consensus at home.

ASP brings together prominent American leaders, current and ormer

members o Congress, retired military ocers, and ormer government

ocials. Sta direct research on a broad range o issues and engages and

empowers the American public by taking its fndings directly to them.

We live in a time when the threats to our security are as complex and diverse

as terrorism, the spread o weapons o mass destruction, climate change,ailed and ailing states, disease, and pandemics. Te same-old solutions

and partisan bickering wont do. America needs an honest dialogue about

security that is as robust as it is realistic.

ASP exists to promote that dialogue, to orge consensus, and to spur

constructive action so that America meets the challenges to its security while

seizing the opportunities the new century oers.

www.aecaecec.g

Americas Energy Choices 2012 Edition

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Transcript of Americas Energy Choices 2012 Edition