by Sue Kleeman

31-05-05

The phrase "securing US energy supplies" is usually taken in a narrow sense: protecting US production and transportation infrastructure from terrorist threats. But protecting our energy supply, which means protecting the way we do business and the way we live our lives, really involves much more. US energy security is a balancing act -- bringing voracious energy demands into line with reliable energy supplies.

Although we are less energy-intensive than we used to be -- our energy use per dollar of GDP has declined -- our dependence on diminishing energy resources and on foreign energy, especially oil, cannot be ignored in the quest for energy security. It just makes sense to increase the diversity of the US energy portfolio; diversity is always a hedge against uncertainty.

Encouraging supply diversity/using "home-grown" power
A diverse energy portfolio contains an array of indigenous supplies, stable imports from friendly sources, and the distribution infrastructure necessary to get energy supplies to regions that need them.

Today, the United States relies on natural gas to meet about a quarter of its energy needs. The nation is well-supplied with gas; 85 % of our supply is produced at home and the rest is imported from Canada. Natural gas prices are rising because production costs are increasing, but gas prices also fluctuate in response to local supply shortages caused by transportation bottlenecks and a lack of storage.

Gas storage facilities provide a balancing function, relieving congestion on pipelines during high-usage periods, and levelling production requirements, improving both reliability of supply and lowering the cost of production. Currently there are more than 400 underground gas storage sites, mostly in the Midwest and Southwest.

The physical requirements of gas storage are exacting, but at least 50 new storage projects are expected to be completed by 2008. Storage construction often goes hand in hand with pipeline construction. For example, in Washington and Oregon, storage is under construction to support the Northwest Pipeline; this additional support will enable the pipeline itself to be expanded in the future.

The 300,000 miles of gas pipeline now operating in the United States will need to be augmented over the next 20 years. Pipeline construction is under way in many parts of the country, including the Northeast, where eight pipeline projects should help open up the region to more natural gas supplies. Particularly welcome was the recent extension of service from Dracut, Massachusetts, to the Boston metropolitan area on the M&N Pipeline. For the first time, Canada's Sable Island gas could be transported as far south as the Boston area.

Another important project is the Kern River Transmission system expansion that allowed the transportation of natural gas and coalbed methane from fields in northern Wyoming and Montana to the West Coast. During the past two years, at least 85 pipeline projects were completed in areas thatneed them most, making this important fuel available to more regions of the country.

The United States also has adequate electric generation in place to meet its current national needs; however, the transmission and distribution system has occasionally been a problem. The 180,000 miles of high-voltage transmission lines that carry electricity are in need of upgrading and expansion. The Northeast blackout was a wake-up call to utilities to undertake transmission upgrades. New electric generating capacity will be required to meet future demand -- up to 500 new units in 20 years. Key to energy security is the fuel choices for these plants.

Natural-gas-fired generation now accounts for less than 20 % of fuel used for generation, but was the fuel of choice for nearly 90 % of the capacity under construction during the past 10 years. However, due to rising costs and the supply bottlenecks described above, natural gas is losing favour to another old standby -- coal.

Coal has serious environmental drawbacks but two of its best features are putting it at the forefront once again. Coal is mined locally and it is relatively cheap, costing roughly one-sixth the price of natural gas. Utilities have received the message: More than 90 new coal-fired power plants are in various stages of development in three dozen states.

Moreover, coal plants that use local mining operations can create powerful economic incentives that sell the project. One recent example: Five of Virginia's electric utilities formed a consortium to explore the development of a large coal-fired electric power station in Southwest Virginia. The consortium plans on using Virginia coal in the plant.

Not all utilities are looking to coal to fire their generation plants. Alliant Energy recently announced plans to add 100 MW of wind generation to its supply portfolio in Wisconsin, bringing the company's total wind-generated energy plant to around 450 MW. Other utilities are taking advantage of the reduced cost of alternative generation technologies and are adding biomass, PV (photovoltaic), and hydro to their energy portfolios.

Even nuclear energy is contributing to reducing our demand for foreign fossil fuel. Although proposals to construct new nuclear plants generally result in controversy, upgrading the 100 existing nuclear units has been quietly under way for some time, increasing nuclear generating capacity by up to 10 %. And the Department of Energy's Nuclear Power 2010 program is studying the development, licensing, and construction of the next generation of nuclear plants in the United States.

One participant in the DOE's study is the TVA, which provides electric power to more than 8.5 mm people in the Tennessee Valley through 158 local power distributors. The TVA is bringing online the nation's first nuclear reactor of the twenty-first century in May 2007, with the restart of Unit 1 at the Browns Ferry Nuclear Plant in Athens, Alabama. The TVA is also in the midst of an aggressive program to improve air quality, spending $ 1 mm a day to reduce emissions from coal plants.
While US electric utilities and the manufacturing sector have reduced their oil consumption, the transportation sector's demand for oil continues to grow and will account for about 75 % of petroleum demand in 2025. Today over half of our oil usage is from often-troubled foreign sources; however, new technologies are creating opportunities for other countries. Canada, and Alberta, in particular, with its vast oil sands, is expected to be a major producer of oil in the future. Oil production that becomes less concentrated in a single region increases the overall security of energy supplies.

The government's role in energy security
Protecting the production and distribution infrastructure is important for energy security. Energy producers, in cooperation with federal agencies, have stepped up the protection of their energy systems. For example, the National Energy Regulatory Commission works closely with DOE and the Department of Homeland Security to protect the industry from both physical and cyber attacks. The federal government, however, has not been as successful in helping curtail energy usage, which could significantly improve energy security.

Kateri Callahan, president of the Alliance to Save Energy, makes the case: "Energy efficiency is our country's greatest indigenous energy resource... Our studies show that energy efficiency and conservation measures are... contributing more than coal, more than nuclear, and even more than oil to meeting our country's thirst for energy."

Many experts believe that the savings from energy-efficiency improvements so far are a very small portion of what is economically viable. However, achieving these savings requires a coordinated effort by consumers, energy producers, and government to make them work.

Some states have stepped up to fill in the leadership gap. California has joined with Oregon and Washington in approving plans to tighten state building energy codes by 15 % over 10 years and to increase efficiency standards for appliances not now regulated by the federal government. At least 25 other states are also pursuing some type of energy-efficiency and conservation measures. For example, in January, Nevada Governor Kenny Guinn announced plans to implement a set of policies outlined in the "Nevada Energy Efficiency Strategy" that could save Nevada energy consumers nearly $ 5 bn over the next 15 years.

Consumers and businesses are important, too
Businesses and other energy consumers need to do their part to ensure future energy security. The American Council for an Energy-Efficient Economy (ACEEE) concludes in a recent report, "Consumption will continue to constrain supply [in the near future]... the only practical near-term option for rebalancing the market is to decrease demand by expanding energy efficiency and conservation and also renewable energy." ACEEE estimates that gas prices now forecasted could be reduced by nearly half in 2009 if energy-efficiency measures were implemented now.

Smart businesses are not waiting for the government or the energy industry to show them the way. Firms all over the country are taking advantage of improved "second-generation" energy-efficiency technologies and generous energy-efficiency rebates. A report written by the World Resources Institute documents the energy-use-reduction strategies of major Northeast corporations.

One of them, Citigroup, found that improving the efficiency of its lighting and HVAC systems at its 270 retail branches in New York, New Jersey, and Connecticut was now economically feasible. Its net retrofit costs of $ 2 mm were recouped from energy savings within one year by reducing its electricity and natural gas consumption by 15 %.

Other companies are taking different routes to minimize fossil-fuel dependence. Kodak installed a wind turbine at its Kodak Park facility, and Johnson and Johnson is now one of the largest corporate consumers of solar PVs in the country. Supermarket retailer Giant Eagle opened an 80,000-square-foot supermarket in Ohio that uses 30 % less energy than comparable supermarkets and has more than 50 % of its electricity supplied through wind generation. The University of South Carolina recently opened an energy-efficient dorm complex that uses 45 % less energy than a conventional residence hall of the same size and cost no more to build.

When it comes to energy security, all contributions are welcome. Improving energy supply security is a joint endeavour between energy suppliers, the federal and state governments, and energy consumers themselves.

The payoff is reduced dependence on foreign fossil fuels, increased supply reliability, and lower energy bills.

Source: www.area-development.com