We are today standing at a crossroads of sorts when it comes to the energy that our nation needs to fuel its continued economic growth and prosperity. While the relatively inexpensive fossil fuels on which we have depended for more than a century are in finite supply, there is an infinite supply of renewable sources of energy, including nuclear, solar, wind, bio, and water. However, in many cases, tapping these unlimited supplies of energy will cost considerable funds — particularly in the near term — to develop and exploit.

I personally have a great interest in the promise of biofuels and the potential role they will play in supplying an increasing portion of our future energy needs. If you have any doubt at all about their importance, I would simply ask you to follow the money. Exxon Mobil — the largest petroleum refining company in the world — is placing bets on the future of biofuels, most notably its recent investment of more than $600 million in a new photosynthetic algae biofuels program run by Craig Venter.

In this first in a three-part series on a long-term energy solution for our nation, I consider where we’re at today — the good news, and the bad. In the second part of the series, I survey the major alternative sources of energy and consider their promise (and potential failings) for the future. Finally — in the third and final part of the series — I will drill deep into biofuels, specifically algae-based biofuels.

The Current Situation

When you talk about energy in this country, you’re mostly talking fossil fuels: petroleum, natural gas, and coal. According to Energy Information Administration data, the contribution of the various sources of energy in this country in 2009 breaks out as follows:

  • Liquids 38.2%
  • Natural gas 23.8%
  • Coal 22.5%
  • Nuclear: 8.4%
  • Hydro: 2.6%
  • Renewable Non-Hydro: 4.5%

The liquids category includes biofuels and other conventional (petroleum) and unconventional (shale oil, oil sands, etc.) liquid fuels; however, biofuels currently constitute only about 1 percent of the total. Looking at the big picture, we currently rely on fossil fuels for about 83.5 percent of our energy needs. So-called alternative, renewable sources (non-nuclear and hydro) currently provide for less than 5 percent of our energy needs today.

The Good News

It’s clear that no matter what we do in the near term, we will depend on fossil fuels for the vast majority of our energy needs for years to come. Fortunately, there will still be plenty of reserves available for us to tap for the foreseeable future. According to Energy Information Administration projections, by 2030, the contribution of the various sources of energy in this country will break out as follows:

  • Liquids 36.6%
  • Natural gas 22.1%
  • Coal 23.4%
  • Nuclear: 8.3%
  • Hydro: 2.6%
  • Renewable Non-Hydro: 7.0%

In addition to the greater role of renewable non-hydro sources of fuel (increasing from 4.5 to 7 percent of the total), biofuels also comprise a greater share of the liquids category than they do today — growing from about 1 percent of the total to about 5.4 percent of the liquids category. Compared with fossil fuels, this is still a very small portion of the total. However, it will continue to grow as new sources of biofuels are discovered, and current sources are further developed and exploited.

The Bad News

Of course, our dependence on fossil fuels is unsustainable in the long run. Fossil fuels are a finite resource, and they are being depleted at an ever-increasing rate as the world’s hunger to feed the needs of industry and day-to-day living continues to grow. According to the Department of Energy, world energy consumption from all sources is projected to increase from 472 quadrillion BTU in 2006 to 552 quadrillion BTU in 2015 and 678 quadrillion BTU in 2030. This constitutes a total increase of 44 percent from 2006 through 2030.

There is no shortage of oil industry watchers who believe that we are rapidly approaching worldwide peak oil production, that is, the point at which future oil production will be in permanent decline. Our nation reached this point in 1970 — since then our oil imports have risen dramatically to make up for the decline in domestic sources of oil. Globally, it is currently anticipated that we will reach peak oil production sometime within the next 40 to 100 years. Of course, no one knows for sure.

We must therefore work to develop new, alternative sources of energy to be ready for the day when fossil fuels are in short supply — or prohibitively expensive. In the next part of this article, I will explore the major alternative sources of energy to determine which hold the most promise for our nation.

7 Responses to “A Long-Term Energy Solution (Part 1 of 3)”

  1. 1 Bryce Johnson

    My sources of data on the time of the world peak in oil production indicate that it is not in the future, but in the past. Monthly world oil production has not exceeded that which occurred in December, 2005. That may have changed, of course, but it was still true eighteen months ago.

    Biofuels from crops (corn, switchgrass, etc.) produce very small, or perhaps even negative net energy and most serious energy analysts have already dismissed this source. The algae source, however, still seems to be a viable alternative.

  2. 2 Ron Knecht

    Dr. Beyster,
    Great topic and I hope you will also address the water budget for the various energy solutions. I expect we will run out of potable water before fossil fuels and so cannot afford water intensive solutions like ethanol. Also would be interested in the scaling factors on alternative energy sources. For example, is an affordable supply of lithium adequate for 3 x 10 to the 7th car batteries?
    Ron Knecht

  3. 3 Jordan Becker

    Bob – peak oil is a complex and controversial topic because it is hard to define as a single metric. This often leads to heated debates over the justification for investments in renewable energy (i.e. if oil is not really peaking, what is the urgency to invest in the development of renewable sources?). I would suggest there are two temporal metrics that are important to separate when analyzing peak oil:

    1. The time at which the rate of production & consumption (assuming they are roughly comparable in a naturally functioning market) begins to exceed the replenishment of reserves from new discoveries.

    2. The time at which absolute production (i.e. extraction/recovery) begins a perpetual decline due to the exhaustion of reserves.

    Most peak oil definitions I see are aligned with #2 above. However this is very hard to predict because nobody knows when we will stop discovering new reserves. It seems that each time a new report declares we have reached a decline in reserve replacements, a new major reserve discovery is soon reported. BP announced a major new discovery in the Gulf of Mexico only ~2 weeks ago (see: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7055818)

    I think #1 (rate of production/consumption vs. reserves replenishment) is the more useful metric to discuss, however this is also tricky because it depends on market economics (and indirectly on the geo-political climate) and therefore is equally difficult to predict. The price of crude has oscillated > /- 300% over the last 3 years which induces similar oscillations in production, capital invested in new exploration, and consumption (or conservation). But these induced oscillations in response to crude oil prices have a hysteresis lag because of the time it takes for consumers to modify their consumption behavior, and time it takes for oil producers to deploy new capital for drilling, production and new exploration.

    Yet another complexity is that the distribution of fossil fuels produced varies with crude oil prices. For example the shale oil and oil sands that you described in the “unconventional liquids” category are generally not produced/extracted at all when crude prices are low because they are dis-economic to produce. But when crude prices escalate these otherwise non-viable fossil fuels suddenly become viable to produce.

    The other side of this equation that is important to include is the environmental cost of consuming more fossil fuels. Even if we had an infinite supply of fossil fuels we could not continue to consume it at the ever escalating rate that we and our rapidly industrializing neighbors in Asia are consuming. The cost associated with green house gas mitigation becomes a material added cost to the consumption of fossil fuels (I think Ron Knecht suggested the depletion of potable water supplies as one example on your blog). You itemized the contribution of coal consumption as ~23% of our total active consumption, but we actually have sufficient coal reserves to power the US for >300 years. However we could never achieve these coal consumption rates without incurring unacceptable environmental damage and cost.

    While it seems I may be over-complicating this, my point is that no matter how you analyze peak oil, all logic paths lead back to validation of your starting thesis… which I will restate as “independent of whatever happens with the supply of fossil fuels, in order to support continued industrialization and economic growth the world has no choice but to reduce the fraction of fossil fuel consumption and increase the fraction of renewable sources in the overall energy mix.”

    Thanks for the enlightening comments and I look forward to reading your future installments on this topic.

    Jordan Becker

  4. 4 Dr. Beyster

    Ron: Thanks for your comments on my blog. I’m not an authority on batteries, so I don’t know if we’ll run out of lithium or potable water before we have satisfied our energy needs. I’ll ask some of my smart friends what they think and report back. — Bob

  5. 5 Dr. Beyster

    Bryce: I quite agree with you that there is a lot of hope for the algae biofuel energy source for the future. There are some scaling problems, however, due to the size of the ponds necessary to grow the algae and the expense involved in manufacturing fuel. Pilot plants are now in the works — we should begin getting answers within six months or so. — Bob

  6. 6 Dr. Beyster

    Jordan: Thanks for your detailed explanation of peak oil. I think we’re basically in agreement. It’s a tremendously interesting subject, and I plan to follow it because of its importance. However, I may devote some of my future blog comments on other subjects, such as the global counterterrorism situation or global warming if I think there’s anything useful I can contribute. — Bob

  7. 7 Blake Escudier

    At one time – the person who could first make fire – that is – construct fire through their own action – this person must have been considered the most powerful person known.

    How many years later – and human civilization is still searching for better ways to create energy. Yet looking at our present sources of energy creation – humanity is robbing Peter to pay Paul. After all – Mass can neither be created nor destroyed – only altered in form.

    Thus, when considering E=mc2 – the resulting byproducts from energy creation may either benefit or harm humanity. – Energy is naturally occuring on earth – yet the present knowledge to utlize for human capacity is limited. Therefore humanity creates its own energy without much regard for byproduct (altered forms of mass) effects. Even some of the mentioned renewable energy sources have byproduct in the form of waste. Another issue is present limited knowlege for building capacity with the known sources that have relatively little harmful byproducts.

    Where does the solution for meeting humanity energy needs come from – if the solution is twofold – meeting capacity AND preventing harmful byproducts? –

    Since I’m not the scientist I can’t begin to elaborate on the present known potential souces – believing in entrepreneurship I will quote Einstein:

    “A new idea comes suddenly and in a rather intuitive way. That means it is not reached by conscious logical conclusions. But, thinking it through afterwards, you can always discover the reasons which have led you unconsciously to your guess and you will find a logical way to justify it. Intuition is nothing but the outcome of earlier intellectual experience.”

    It is my belief that our government should continue to support various research programs as these are the most likely sources for discovery. If the government becomes complacent and only drives energy policy for savings and innovation on present energy sources – meaning the most used sources today – innovation for new sources will be reduced and harmful byproducts of energy creation will continue to accumulate.

    The world is dependent upon energy – not oil, not coal, not natural gas – these are just the present sources for human creation of energy. With government policies supporting research – our present scientists will develop a positive self-efficacy towards finding solutions – and the younger generations will be more likely to choose science for careers – thus opening the door for more intuitive thoughts on energy and sources of creation.

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