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May 23, 2013
What Now for Energy? After recent disasters, is there any room for optimism in the U.S. energy outlook? Experts say yes, but, as always, offer caveats. BY EVA KAPLAN-LEISERSON
In the U.S., finding safe and clean ways to quench our energy thirst is a critical issue—for national security, economic well-being, and the environment. We've been looking for solutions for decades, but there remains no one answer. Nuclear power, which has faced cost and safety concerns, is now under even greater scrutiny. Coal, oil, and gas pollute the earth. Yet clean, renewable sources, such as solar and wind, can be cost-prohibitive and work only intermittently. So where do we go from here? Technical experts and policy specialists are actually optimistic about our ability to solve this challenge. They're less sure about our will. What must be done? What's the outlook? Everyone has an opinion; here's a sampling of prominent options. Energy Efficiency In its 2009–11 reports, the America's Energy Future committee of the National Academies named energy efficiency the nearest-term and lowest-cost option for U.S. energy consumption, especially over the next decade. According to the AEF committee, deploying energy efficiency technology just in buildings could eliminate the need to construct any new electricity-generating plants in the U.S. other than to address regional supply imbalances, replace obsolete assets, or substitute more environmentally benign solutions. The committee found that accelerated deployment of energy efficiency technologies in the buildings, transportation, and industrial sectors could reduce energy use by 15% in 2020 and 30% in 2030. AEF Committee Chairman Harold Shapiro, professor of economics and public affairs at Princeton University, points out that energy efficiency provides "major wins…and we don't need to invent anything new." Albert Thumann, P.E., executive director of the Association of Energy Engineers, agrees. He stresses that energy efficiency technology can be applied today and offers a fast return, versus 5–10 years to build a fossil fuel plant. "There's absolutely no downside in energy efficient technologies," the NSPE member says. "They should be in the forefront of any energy policy." President Obama's 2012 budget would double investment in energy efficiency technology over 2010. Natural Gas According to the Energy Information Administration, which doubled its estimates of recoverable domestic shale gas last year, natural gas supplies could now last 110 years, compared with nine years of oil reserves. EIA projects that the shale gas share of U.S. natural gas production will reach 45% by 2035. The increase in supply has also cut the cost of the energy source by half over the last three years, which may make natural gas a good solution not only to back up renewables but also to export. But natural gas, like other options, is not a perfect answer. It still emits carbon dioxide when burned—about half as much as coal—and hydraulic fracturing generates a large amount of wastewater. In addition, some say the process contaminates drinking water supplies with chemicals and naturally occurring radiation. The Environmental Protection Agency is beginning a study on the potential health and environmental issues. Harold Shapiro wishes the America's Energy Future effort had looked more closely at natural gas. He believes the solution has few drawbacks when used as a substitute for oil and coal. And by increasing our use of natural gas, industry can buy more time to develop cleaner energy options. AEF committee member Doug Chapin, principal at energy-focused MPR Engineering, believes that if the price of natural gas stays low, anyone who wants to build new, quick power generation capability in the U.S. is going to look first to that source. Although he points to "legitimate potential environmental concerns," he expects to see more gas generation plants built in the near term while nuclear and coal may be pushed back. Nuclear Most agree it's too early to tell, but countries worldwide are revisiting the issue. Italy halted plans to restart its nuclear program for a year, China suspended project approvals pending safety checks, and Germany is considering phasing out nuclear entirely. In the U.S., President Obama's 2012 budget had requested $36 billion in loan guarantees for nuclear power, seen as a key technology to move toward clean energy. While nuclear's long-term prognosis in the country is unclear, it's certain to face a critical eye. The Nuclear Regulatory Commission, tasked with ensuring the safety of commercial nuclear power plants, has launched a review following Japan's crisis. It will look at lessons from that country with updates in 30, 60, and 90 days, as well as over six months. NSPE member Tom Boyce, P.E., branch chief in the regulatory guide development branch of the NRC, says that, as an engineer, he personally feels comfortable with the current nuclear fleet's safety. Operating performance has continued to improve over the last 20 years, he explains, with automatic shutdowns declining. Boyce believes nuclear will likely retain its 20% share of the U.S. energy mix. "There's no panacea for any of this," he notes. "If we go in the direction of clean energy, I think nuclear has to be considered." Energy engineer Albert Thumann points out that nuclear is clean energy if the industry can solve waste disposal issues, "which has never been done." But since the U.S. can't afford the environmental drawbacks of fossil fuels, he says, nuclear will still have to be part of our portfolio. He believes additional scrutiny and safety concerns may increase the costs of building nuclear plants even more than current $2 billion–$6 billion estimates, however. Doug Chapin, whose company has provided technology solutions to every U.S. nuclear plant, says that right now no option is so dangerous that we should discontinue it. Instead, people need to keep in mind the dangers of any particular technology they're working with, he says, and how to address them. Technology solutions under development provide additional hope. Passive systems that don't require operators or electricity for cooling during crises may become more popular, Boyce believes. However, retrofitting existing systems for passive cooling would be costly. Bechtel Corp., which has built more than half of the 104 U.S. nuclear plants, is one of several companies working on small modular reactor designs. They are cheaper and quicker to build, and don't need cooling systems because heat isn't concentrated in one place. Bechtel will design and construct plants for the Generation mPower venture; the first is scheduled to deploy in Tennessee in 2020, depending on regulatory approval. According to Boyce, such new technologies have time to proceed while evaluating recent events. President Obama's 2012 budget would help support design and licensing for new small modular reactor designs. Renewables Cost is one major concern with solar power. The Department of Energy's SunShot initiative aims to reduce the price by 75% and make it cost-competitive by 2020. The program is providing funding to support advanced photovoltaic manufacturing processes. Land is another issue;however, solar installations can be located offshore. Thumann explains this option is being explored off the coast of Massachusetts. The Department of Energy recently provided funding to a Seattle company, Principle Power, to develop its offshore WindFloat technology. It combines a floating wind turbine with wave energy converters to generate energy from both sources. And the Bureau of Reclamation, in its study of government-owned dams and other facilities, found 70 to be economically feasible and environmentally sustainable for hydropower. The Department of the Interior called this the largest source of renewable electricity generation in the U.S. Although renewable energy doesn't create greenhouse gasses, focusing on the environmental benefits is the wrong approach, says Paul Dickerson, former chief operating officer for the DOE Office of Energy Efficiency and Renewable Energy. Dickerson, a partner with law firm Haynes and Boone's Clean Tech practice group, explains that China is investing heavily in clean energy to gain a competitive advantage. With 350 million people moving into cities in the next 15 years and needing both energy and jobs, the country is spending $760 billion over the next 10 years. But innovation is the U.S.'s game, says Dickerson. He sees an opportunity for large oil and gas companies to not only diversify with new energy sources, but also provide smaller companies expertise in delivering long-term capital projects on budget. "We need to find ways to encourage 'varsity athlete' energy companies to come in the game to help new energy companies succeed," he says. Outlook Peter Blair, a systems engineer and executive director of the National Academies' Division on Engineering and Physical Sciences, believes that engineers will play a key role in the development, commercialization, and integration of emerging solutions. He thinks the fundamental finding from AEF still stands: Yes, we can effect transformational change if we want to. ARPA-E (the Advanced Research Projects Agency-Energy), first funded with $400 million from stimulus legislation, is driving transformational energy R&D. The fiscal year 2012 budget request would invest $650 million in ARPA-E as well as double the number of Energy Innovation Hubs, which bring together experts from various sectors. A new DOE initiative, America's Next Top Energy Innovator, will cut the cost and paperwork for companies to purchase the government's unlicensed patents and bring technologies to the marketplace, as well as feature top entrepreneurs in an ARPA-E showcase. And every five years, the Department of Energy's new Quadrennial Technology Review process will lay out energy challenges, outline principles for optimizing DOE activities, offer roadmaps for technologies, and discuss ways that organizations can collaborate. According to Peter Blair, this effort will use the America's Energy Future effort as a point of departure for specific technology planning. He explains the DOE might also ask the Academies to update the AEF reports. But Dickerson stresses that in addition to technology, policy is critical. The former DOE staffer says U.S. leaders tend to respond reactively, failing time and time again to give the industry the long-term, durable policies that companies and investors need. In his January State of the Union address, President Obama proposed a plan for increasing clean energy sources to 80% of the country's mix from 40% by 2035. These sources include wind, solar, biomass, hydropower, nuclear, natural gas, and coal with carbon capture and sequestration. A Clean Energy Standard would give electric power plants credits for generating electricity from clean sources. Plants could bank those for later use or sell them to other companies. The strategy would be paired with energy efficiency policies such as appliance standards and tax credits. In addition, at the end of March the White House released its Blueprint for a Secure Energy Future. It outlined the president's pledge to reduce the 11 million barrels of oil imported each day by one third in 10 years and provided a three point energy strategy: develop and secure America's energy supplies, provide consumers with choices to reduce costs and save energy, and innovate our way to a clean energy future. Much remains up in the air about U.S. energy plans while budget negotiations continue. However, in the midst of tough economic times, says MPR's Chapin, people need to think long-term and devote money to this issue. Charles Holliday, P.E., National Academy of Engineering member and Bank of America chairman, quotes a line from former Lockheed Martin chairman and CEO Norm Augustine: "If you're worried about the plane being too heavy, you don't throw an engine off." In other words, this is exactly the wrong time to not be spending money on energy, Holliday explains. Augustine chaired the Academies' Rising Above the Gathering Storm committee, which examined U.S. competitiveness; Holliday also served on it. The two are teaming up on a new project: the American Energy Innovation Council, joining business leaders experienced with major change to help foster economic growth and reestablish U.S. energy leadership. The group has released a report with five recommendations, including creating a politically neutral Energy Strategy Board—located outside government and made up of industry experts—that would develop and monitor a National Energy Plan. Like Dickerson, Holliday indicates the need for consistency. He believes we need to work three levels simultaneously: short-term efforts with quick payoffs such as energy conservation, mid-level steps requiring additional research like natural gas, and then major breakthroughs. The council wants business and government to partner, with companies providing scalability and government contributing investment. AEIC's report urges $16 billion per year in clean energy innovation funding, an increase of $11 billion, that would be tied to performance goals and free from political influence. "If [this] recommendation is not adopted, our other recommendations will not matter much," says the report. "Reliance on incrementalism will not do the job." While there are no quick fixes, the White House Blueprint stresses that we have a resource that the rest of the world can't match: American ingenuity. And Charles Holliday says we've taken on more difficult tasks. For instance, with 1970s technology, an iPod would've cost a billion dollars and been as large as a building. If you'd described a current iPod then, he says, people would've called you crazy. "Talking about making solar energy two to three times more efficient, it's a lot less of a leap of faith." The concern of many of these experts is not the technology but the drive to take the necessary steps. As Chapin puts it, his Chinese friends say the best time to plant a tree was 20 years ago. The next best time is now.
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