Energy Policy vs. Energy Plans

Some interesting comments on yesterday's posting got me thinking about what optimism and pessimism mean in the context of increasing the contribution of renewables and other alternative energy in a reasonable amount of time. More to the point, what kind of energy mix could we expect to fall back on, if we should find ourselves missing a significant chunk of our oil imports, either as a result of a geopolitical event, or due to the impact of depletion on global supply?

Answering that question requires wading through a host of big uncertainties, and it really calls for a scenario approach, rather than straight-line reasoning. That's more than I can take on in one day's posting, but I feel safe suggesting that we will need a much more aggressive energy plan than the one implicit in the current forecasts from the Energy Information Agency of the Department of Energy. Their 2005-25 reference case would have us using 1/3 more oil by 2025, while importing 60% more of it. At the same time, they don't see the energy contribution of renewables growing by enough even to cover what will be lost in the decline of domestic oil production, or to prevent renewable energy falling as a share of total consumption by 2025. This is not a slam on the DOE, because that's probably a reasonable status quo forecast. However, it doesn't constitute an acceptable national plan for energy. I'd also argue that it's out of synch with worldwide trends driven by climate change and two globalizing "billionaires."

If the DOE's view represents a floor for alternative energy, where is the ceiling? While there might not be any laws of physics preventing wind and solar power from ultimately providing most of our energy, several issues will limit their contribution over the next 20 years. The cost of energy storage is a big factor in this calculation, and we must assess how long it would take a breakthrough in this area to go from laboratory to low-cost, mass production. I'm not an expert on technology development cycles, but 10-15 years doesn't sound too long. If that's the case, then even with a continuation of the steady cost reduction trends for both wind and solar, their intermittent nature will impede their penetratation of the power market. Nor does that address our need for non-oil transportation fuels, which by 2025 might include a modest component of hydrogen. Despite this "pessimism", I expect both wind and solar to grow dramatically in the next decade, with results that should be noticeable at the scale of our national energy statistics.

The divergence betweeen the status quo future and what's realistically possible highlights an important distinction between the Energy Policy Act of 2005 and a true national energy plan. Plans include goals, as well as the means for achieving them. What we need are explicit, quantified national goals, and these would have to include things like the following:

• To reduce our use of oil as a fraction of the total energy we consume, e.g. from 40% down to 35% by 2025.
• To increase the contribution of non-hydroelectric renewable energy from less than 1% today to 5% by 2015 and 15% by 2025.
• To shift our energy imports from being 85% oil-based to 50% gas-based, including LNG and synthetic liquid fuels produced from gas.

Now, these still might not seem like aggressive goals to a real optimist, but achieving them in the real world would be an enormous stretch, even with ample R&D funding, government incentives, and an increase in the gasoline tax. Whether or not we'd hit these targets on time, this is what it would take for "alternatives to be in place," as I suggested yesterday. I'm also reminded of the portion of JFK's quote about going to the moon that we rarely include,

"...and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too."