November 20, 2008
Thoughts on an Energy Policy for the New Administration
by Allan Hoffman, U.S. Department of Energy
This country needs a good debate on energy policy. While there are many
divergent views on what that policy should be, I thought it would be useful
to begin my thoughts by identifying a set of "facts" on which most people
can agree. So here goes.
I would start by recognizing that people do not value energy itself but
rather the services that energy makes possible. These services include
lighting, heating, cooling, delivery of clean water, transportation of
people and goods, communication, entertainment and a variety of business
activities. It follows that it is in society's interest to provide these
services with the least energy feasible, to minimize adverse economic,
environmental and national security impacts. Energy has always been critical
to human activities, initially in the form of human and animal labor and
fire, but what differentiates modern societies is the energy required to
provide increasingly high levels of services.
Population growth and increasing levels of per capita consumption will drive
increasing global energy demand in the 21st century. While not preordained,
this increase will be large even if the citizens of other countries do not
achieve U.S. per capita levels of consumption. Important components of this
increase will be in transportation, the fastest growing global energy
consumer today (more than 90% of transportation is currently fueled by
petroleum-derived fuels) and electrification, which increased dramatically
in the 20th century and will increase in the 21st century as well. An
important driver of this continued electrification will be the substitution
of electricity for liquid transportation fuels.
Today's world is powered largely by fossil fuels (coal, oil, natural gas)
and this will continue well into the 21st century, given large reserves and
devoted infrastructure. Nevertheless, fossil fuel resources are finite and
their use will eventually have to be restricted. Cost increases and
volatility, already occurring, are likely to limit fossil fuel use before
resource restrictions become dominant and increasing geographic
concentration of supplies in other countries raises serious national
security concerns. In addition, the world's current energy delivery
infrastructure is highly vulnerable to natural disasters, terrorist attacks
and other breakdowns and energy imports constitute a major drain on U.S.
financial resources and allow other countries to exert undue influence on
our foreign policy and freedom of action.
Fossil fuel combustion releases CO2 into the atmosphere (unless captured and
sequestered), which mixes globally with a long atmospheric lifetime. Most
climate scientists believe that increasing CO2 concentrations alter earth's
energy balance with the sun, contributing to global warming.
Nuclear power, a non-CO2 emitting energy source, has significant future
potential, but its wqidespread deployment faces several critical issues:
cost, power plant safety, radioactive waste storage and weapons
nonproliferation.
Globally, energy is not in short supply — e.g., the sun pours 6 million
quads of radiation annually into our atmosphere (global energy use: 460
quads).
There is considerable energy under our feet, in the form of hot water and
rock heated by radioactive decay in the earth's core. What is in short
supply is inexpensive energy that people are willing to pay for.
Renewable energy (solar, wind, biomass, geothermal, ocean) has significant
potential for replacing our current fossil fuel based energy system. The
transition will take time but we must quickly get on this path.
Accepting the above, I would recommend the following elements for a national
energy policy:
*
Using the bully pulpit, educate the public about energy realities and
implications for energy, economic and environmental security.
*
Work with the Congress to establish energy efficiency as the cornerstone of
national energy policy.
*
Work with the Congress to provide an economic environment that supports
investments in energy efficiency, including appropriate performance
standards and incentives. This includes setting a long-term, steadily
increasing, predictable price on carbon emissions (in coordination with
other countries) that will unleash innovation and create new jobs.
*
Consider setting a floor under oil prices, to insure that energy investments
are not undermined by falling prices, and using resulting revenues to
address equity and other needs.
*
Work with the Congress to find an acceptable answer to domestic radioactive
waste storage, and with other nations to address nuclear power plant safety
issues and establish an international regime for ensuring nonproliferation.
This includes examination of non-traditional nuclear fuel cycles.
*
Establish a national policy for net metering, to allow individuals and
companies to sell electricity to the grid and thus remove an important
barrier to widespread deployment of renewable energy systems.
*
Provide incentives to encourage the manufacture and deployment of renewable
energy systems that are sufficiently long for markets to develop adequately
but are time-limited with a non-disruptive phaseout.
*
Aggressively support establishment of a smart national electrical grid, to
enable more efficient use of electricity nationally, to facilitate the use
of renewable electricity anywhere in the country, and to mitigate, with
increased use of energy storage, the effects of solar and wind energy
intermittency.
*
Support an aggressive effort on carbon capture and sequestration, to
ascertain quickly its feasibility to allow continued use of our extensive
coal resources.
*
Remove incentives for fossil fuels that are historical tax code legacies
that distort energy markets and slow the transition to a new, renewables-based,
energy system.
I look forward to a stimulating debate, one which has been too long in
coming.
Dr. Hoffman is Senior Analyst in the Office of Planning, Budget and
Analysis/Office of Energy Efficiency and Renewable Energy, U.S. Department
of Energy (DOE). During 2002 and 2003 Dr. Hoffman was detailed to serve as
Senior Advisor to Winrock International's Clean Energy Group, with special
responsibility for water-energy issues. In 1990 he served as the DOE's
Associate and Acting Deputy Assistant Secretary for Utility Technologies,
with responsibility for a US $300 million RD&D program (solar, wind,
biomass, geothermal, hydropower, ocean, energy storage, hydrogen,
superconductivity).
Dr. Hoffman has also served as U.S. Representative to and Vice Chairman of
the International Energy Agency's Working Party on Renewable Energy. He
holds a Bachelor of Engineering Physics degree from Cornell University and a
Ph.D. in physics from Brown University.
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