by Robert Bryce
All of those possibilities are exciting, and they should find a ready market. While I believe that natural gas and nuclear power offer the best short- and long-term energy options for the future, I’m also bullish on solar. That said, I’m leery of making sweeping pronouncements. My wariness is, in part, a product of seeing how the shale gas revolution has swept away much of the conventional wisdom about the future of the U.S. gas industry. In the span of about three years, from 2005 to 2008, the industry swung from fears of gas shortages to a glut of gas. Looking back even further provides evidence of another disruptive technology. In 1882, Thomas Edison built the first central power station on Pearl Street in New York City, and within eight years, there were 1,000 similar stations operating all across the country.
Similar technological disruptions may lie ahead. They could include a breakthrough in energy storage technology or perhaps the discovery of a massive new oil field. A drop in oil demand combined with excess oil production capacity would result in a major drop in the price of oil—and that price decrease would immediately undermine the push for alternative energy efforts. I’ve made clear my position that hydrocarbons will persist for many decades to come, and yet I know that I could be proven wrong. As Voltaire said, “certainty is absurd.”
At the end of my last book Gusher of Lies, I offered a few suggestions about energy policy. As I look at some of those suggestions today, roughly two years later, I find that my positions haven’t changed.a But given those suggestions, I need to outline the gist of the N2N Plan.
When he announced the Pickens Plan, Dallas oil baron T. Boone Pickens said that “an idiot with a plan is better than a genius with no plan.” Unlike Pickens, I don’t have $60 million to launch a media drive to promote N2N, but perhaps that’s okay, because my plan isn’t as complicated as his. In fact, the N2N Plan has just four concepts:1. Promote natural gas and nuclear power through targeted use of tax incentives.
2. Encourage oil and gas production in the United States.
3. Continue promoting energy efficiency.
4. Continue working on renewables and energy storage technologies such as batteries and compressed-air energy storage.
That’s it. The N2N Plan doesn’t make any promises about reductions in foreign oil, or carbon dioxide emissions, or anything else. Further note that the last two items don’t even really need to be stated. The United States, and the other countries of the world, will keep pursuing efficiency, renewables, and energy storage because those areas have always attracted capital. We don’t need to tell entrepreneurs and engineers to make more efficient machines. They do it on their own because they are interested in making money. Huge amounts of capital—including billions of dollars courtesy of U.S. taxpayers—are going into the energy storage business because batteries, hybrid cars, and electric cars all have some potential for displacing some hydrocarbons.
Although the United States should be encouraging more production of oil—and of natural gas—within the United States and in its offshore waters, the Obama administration and leading congressional Democrats have threatened to repeal a pair of tax breaks that oil and gas industry officials believe are essential. Obama’s 2010 budget called for the elimination of the expensing of “intangible drilling costs,” which allows energy companies to deduct the bulk of their expenses for drilling new wells; it also called for ending “percentage depletion,” which allows well owners to deduct a certain amount of the value of their production in a given year. In May 2009, Obama called the tax treatments “unjustifiable loopholes” that do “little to incentivize production or reduce energy prices.”9 But getting rid of those tax breaks now, just months after the U.S. natural gas sector has unlocked enormous quantities of shale gas, makes no sense whatsoever. Fortunately, common sense appears to have triumphed and the tax breaks remain in place—at least for the time being.
Given that it’s in America’s long-term interest to promote nuclear power at home, it must also take a leadership role globally on the issues of nuclear safety, regulation, and proliferation. Therefore, my first suggestion, and perhaps the most important one, is for the United States to support the one organization that is already set up to do that on the international level.
Vigorously Support the IAEA
The damage done by George W. Bush, Dick Cheney, and their cronies to the reputation of the United States in the international arena will last for decades. Bush and Cheney tarnished America’s image on a variety of issues, including the use of torture against prisoners and adherence to human rights principles and the rule of law. But when it comes to energy issues, few things have hurt America’s long-term credibility more than the Bush administration’s steamrolling of the International Atomic Energy Agency in its headlong rush to unleash the dogs of war on Saddam Hussein’s Iraq.
Prior to the invasion of Iraq, top Bush administration officials repeatedly claimed that Iraq was trying to build a nuclear weapon. On September 7, 2002, Bush himself falsely claimed that the IAEA, the lead global agency in dealing with proliferation issues, had issued a report saying that Iraq was just six months away from developing a nuclear weapon.10 A few months later, on January 27, 2003, the director general of the IAEA, Mohamed ElBaradei, told the United Nations Security Council that there was no evidence of a nuclear weapons program in Iraq and that the aluminum tubes that were a focal point of the U.S. disinformation program “would not be suitable for manufacturing centrifuges” needed to enrich uranium.11
ElBaradei, of course, was right. After the invasion, the U.S. military never found any nuclear weapons or weapons of mass destruction in Iraq. But that didn’t stop the Bush administration from belittling the agency and ElBaradei. In 2005, John Bolton, whom Bush had nominated to be America’s ambassador to the UN, said that the IAEA’s declaration that Iraq didn’t have a nuclear weapons program was “simply impossible to believe.” That same year, the Bush administration tried to have ElBaradei replaced.12
In 2005, ElBaradei was awarded the Nobel Peace Prize,13 and in 2009 he told Time magazine that the “most dissatisfying moment of my life, of course, was when the Iraq war was launched. That hundreds of thousands of people lost their lives on the basis of fiction, not facts, makes me shudder.”14 Although ElBaradei left the IAEA in late 2009, the Vienna-based agency remains the essential international agency for nuclear issues and is focused solely on those issues. ElBaradei played a critical role in the international negotiations aimed at heading off a military confrontation with Iran over its nuclear aspirations, and his replacement will have to take a similar high-profile role.15
For the United States to embrace N2N, it must be committed to vigorous international regulation and policing of the nuclear sector. That means closer monitoring of the fuel being used by the growing number of nuclear reactors as well as increased efforts at ports and other locations to detect any radioactive materials that could be used for nefarious purposes.
Created in 1957, the IAEA was set up as a global “atoms for peace” agency under the aegis of the UN.16 It now operates on a budget of about $400 million per year.17 But it needs more money, political support, and technology. The United States should help to provide all three.
President Obama has indicated that he wants more international nuclear cooperation. In his April 2009 speech in Prague, he said that he wanted to “build a new framework for civil nuclear cooperation, including an international fuel bank, so that countries can access peaceful power without increasing the risks of proliferation.”18 That’s an easy speech to make. But making that kind of program into a reality requires having a strong, credible, forceful IAEA—and no country is more important in making the IAEA credible than the United States. That is nothing new. Supporting the IAEA has been in America’s long-term interests since the end of World War II.
In 1946, U.S. Undersecretary of State Dean Acheson (who became secretary of state in 1949) asked David Lilienthal, the head of the Tennessee Valley Authority, to chair a panel to advise President Harry Truman ab
out nuclear weapons.19 That same year, Lilienthal headed the production of a document known as the Acheson-Lilienthal Report, which concluded that the world had entered a new era in which nuclear technology would be widely known and understood. It said flatly that “there will no longer be secrets about atomic energy,” and it declared that, given the potential destructiveness of nuclear weapons, there must be “international control of atomic energy” coupled with “a system of inspection.”20
Today, more than six decades after that document was written, the need for international control of nuclear materials, along with reliable systems of inspection of nuclear facilities, remains essential. In fact, the need for a strong IAEA has never been more obvious. The United States must—repeat, must—be a leader in giving the IAEA all of the authority it needs to finally make the objectives of the Acheson-Lilienthal Report into a reality.
End Iowa’s Monopoly on the Presidential Primaries
Iowa has unilaterally insisted that it must have the first presidential primary. As a result, a tiny percentage of a tiny percentage of people in a relatively small, rural, agricultural state have undue influence over the selection of the person who will become president of the United States. And that also makes Iowa ground zero for the corn ethanol boondoggle, a farm subsidy program that masquerades as an energy program. (Iowa calls its primary a “caucus,” but it is, in reality, a primary.)21
Barack Obama was pro-ethanol when he went to Iowa, the biggest corn ethanol producer in the United States, and his win in the Iowa primary was key to his winning the White House. His key contenders—John McCain and Hillary Clinton—were both ardently opposed to the corn ethanol boondoggle until they decided to run for president. Once they launched their campaigns for the presidency, both of them became ethanol evangelicals because they understood the need to win in Iowa.
The United States must reform its presidential primary system. The first step in doing so is to reduce Iowa’s importance in the selection process. The state’s powerful agriculture lobby has corrupted our presidential selection process and in doing so has made support for corn ethanol a litmus test for any candidate aiming for the White House. One of the first steps in reforming our energy policy must be the elimination of the corn ethanol outrage. But that won’t happen as long as Iowa maintains its stranglehold on the presidential primary system.
Elect More Engineers and Push Science, Technology, Engineering, and Math
France is run by engineers. The United States is run by lawyers. And that difference goes a long way in explaining why France has a forward-looking energy policy and the United States has, well, no stated energy policy at all.
Engineers build things. Lawyers sue people who build things. One of the greatest challenges in the making of a smart, forward-looking, no-regrets energy policy in America is the paucity of knowledgeable people in positions of power on Capitol Hill and in Washington who truly understand energy.
Congress is dominated by lawyers who want to make policy and write super-long, super-complex bills. The 2005 Energy Policy Act, for instance, was 550 pages,22 and the Energy Independence and Security Act of 2007 was 310 pages.23 In 2009, the House passed another energy bill, the American Clean Energy and Security Act, that amounted to 1,428 pages.24 When printed out on standard paper, the 2009 bill (also known as Waxman-Markey) creates a stack nearly 7 inches tall. These mammoth bills are written by lawyers, for lawyers (and of course, lawyer-lobbyists). The result is an ever more fragmented and complicated U.S. energy policy that has little effect on overall energy-consumption patterns.
The over-abundance of lawyers in American government can be seen by looking at the Senate. In 2007, 60 of the 100 senators had law degrees, 25 and in 2009, only 3 had engineering degrees.26 The House had exactly 1 registered professional engineer in 2009: Joe Barton, a Republican from the Dallas–Fort Worth area.27 (Just for reference, the House had 13 medical doctors, and the Senate had 2 doctors.)28 Barack Obama is a lawyer, and so was Bill Clinton. In France, the most prestigious school is probably the École Polytechnique. In the United States, it’s Harvard Law. France has about 46,000 lawyers (about 1 for every 1,300 citizens),29 whereas the United States has about 1.1 million (about 1 for every 280 citizens).30
If the United States is to move forward in a constructive way on energy policy, it must begin putting more people into positions of power who not only like to build things, but who are also scientifically literate and numerate. Unless or until there is greater numeracy among policymakers, the nation will continue to get lousy energy policy promulgated by lawyers who have no concept of physics, numbers, scale, or, most essentially, the difference between energy and horsepower. As Stan Jakuba has told me many times: “People will take years to debate an energy issue but not a semester of physics.”
Of course, electing more engineers and fewer lawyers will require us to have an education system that is capable of producing more students who are savvy in math and science. And given the parlous state of the American education system, particularly when it comes to mathematics, this challenge is particularly daunting. The United States must get more serious about teaching science, technology, engineering, and mathematics. America’s future competitiveness depends on it.
Emulate Iran and France
If the United States is going to embrace N2N, it must emulate some of the energy policies of Iran and France.
Though that statement will anger many flag-waving Americans, the simple truth is that those two countries are embracing natural gas and nuclear power. Of course, Iran’s pursuit of nuclear power has led to widespread controversy, with the true intentions of the country’s leaders under suspicion—but that only further underscores the need for a strong IAEA, the only international agency with the capability of assuring that Iran does not use its nuclear facilities to build weapons, as well as the credibility to make its findings heard in the international arena. And although some critics argue that Iran doesn’t need nuclear power, the country’s electricity demand is soaring. Between 1990 and 2008, Iran ranked eighth in the world in terms of the speed of growth in electricity demand.31 Over that time span, Iran’s electricity generation nearly quadrupled—and given the country’s young population (the median age is twenty-seven), that electricity demand will almost certainly continue its rapid growth.32
Regardless of Iran’s nuclear plans, the data show that both Iran and France have dramatically increased their consumption of natural gas. At the time of the Arab Oil Embargo, France was getting just 8 percent of its total primary energy from gas. By 2008, that number had risen to 15 percent. Meanwhile, gas accounted for 27 percent of Iran’s primary energy back in 1973, and thirty-five years later gas was providing 55 percent of the country’s primary energy.
Iran has launched the world’s most aggressive natural-gas-vehicle adoption plan. Between 2007 and 2008, the country tripled the number of NGVs on its roads. By mid-2009, Iran, the biggest auto producer in the Middle East, had about 1.5 million NGVs on its streets and was adding new NGVs at a rate of about 100,000 a month. Between the summer of 2008 and mid-2009, Iran more than doubled the number of NGV-refueling stations on its roads, bringing the total to about 1,000 locations—approximately the same number as now exist in the United States.33 At this rate, Iran will surpass Pakistan as the country with the most NGVs before the end of 2010. (Pakistan has about 2 million NGVs.)34
Before going on, let me state the obvious: It will take years to add significant numbers of new NGVs to the U.S. auto fleet. Moreover, even a hundredfold increase in the number of NGVs in the United States will not result in “energy independence” or put much of a dent in foreign oil imports. But just as Iran is putting its copious quantities of natural gas to use in its transportation sector, it makes sense for the United States to increase utilization of natural gas as a way to hedge against potential oil price increases.
One promising technology that could make NGVs more viable is the use of “adsorbed gas tanks.” Adsorption occurs when a gas or liq
uid accumulates on the surface of a solid, and adsorption technologies facilitate the storage of natural gas at far lower pressures, about 500 pounds per square inch, than those required in standard natural gas tanks, which generally store gas at more than 3,000 pounds per square inch. Two universities—the University of Missouri and the University of California, Los Angeles—have developed adsorption technologies that are awaiting commercialization.35 Substituting adsorbed natural gas tanks for high-pressure tanks (which are akin to scuba tanks) would lower costs and allow carmakers to conform gas storage tanks to the shape of the vehicle.
Regarding nuclear power, no other country has embraced the atom as tightly as France. In 1973, nuclear power was providing just 2 percent of France’s primary energy. By 2008, that percentage had risen to 39 percent, the highest rate of any country. Today, France is the world’s most nuclear-dependent nation, getting nearly 80 percent of its electricity from its fleet of fifty-nine nuclear reactors—the majority of which have a standardized size and design.36