This article presents conclusions I’ve reached in an extensive investigation of the energy situation in the U.S and worldwide. I started this investigation over three years ago, after being invited by the Loveland Rotary Club to give a talk about alternative energy sources. However, I soon decided that understanding the role and realties of alternative energy sources requires a good understanding of the overall energy situation. Hence the long delay while I gathered and assimilated much relevant information. The following is an extended version of a talk I gave to the Rotary Club on April 11, 2006.

The title I chose early on, “The Era of Abundant Cheap Energy Has Ended,” now seems all the more appropriate. More importantly, some people believe the energy situation is the most serious problem facing the entire world. There is a huge range of opinions about what can and should be done and the outcome. Some believe we can and should quickly eliminate the use fossil fuels, via conservation and efficiency measures and development of renewable energy sources. Others believe that civilization will soon come to a horrible end because of an imminent sharp drop in the supply of crude oil, and some even predict a nuclear-war over control of oil supplies. Some disagreement is not unusual, because the energy situation has long been huge, multi-dimensional, complex, uncertain, ever-changing, and controversial. But I don’t know of a time when the opinions differed so widely.

Unquestionably, the world faces two enormous challenges in the energy arena. One is to supply the huge and fast-growing energy demands of all countries quickly enough to avoid global economic chaos and strife. The other is to produce all that energy without doing too much harm to the earth’s environment and climate. Some people believe these challenges are mutually exclusive—that the search for and use of much more energy will inevitably cause grave harm to the earth and future generations. I disagree, for two reasons. First, I believe energy shortages are a more-imminent threat than the environmental and climate threats. Second, given time, the human race usually manages to rise to a challenge, once it recognizes it and decides to take concerted action. But that point hasn’t been reached yet, and whether there will be enough time to take the necessary actions is very much in doubt.

Five realities must be faced in dealing with these two challenges. First, the global population will grow for years to come, and that, along with rapid economic development in many nations, will inevitably increase the global demand for energy. Second, no nation can both develop its economy and mitigate the adverse effects of growth unless it has a strong economy—and it can’t have a strong economy without an adequate energy supply. Third, most of the energy now used throughout the world comes from fossil fuels-- and that can’t be changed significantly for many years to come. Fourth, the total worldwide resources of all fossil fuels are finite and therefore are dwindling as time passes. That’s especially true of crude oil and natural gas, which, along with coal now supply almost 90% of all the energy used worldwide. Fifth, for a long time to come there will be no way to produce large amounts of energy without doing some damage to both the environment and the climate.

Inevitably, then, many very difficult and expensive decisions, choices, tradeoffs, and compromises will have to be made, not just in this country but all around the world. There are numerous indications that most people do not realize what lies ahead. It’s way past time for people to become better informed about the current and future energy situations.

To that end, and to put what comes later in perspective, I will summarize some relevant facts, many of which are not generally understood. The world now uses about 400 quadrillion (one thousand trillion) BTU’s of energy each year-- not including the large unmeasured amounts of wood and animal wastes, etc., that are used in some undeveloped countries. Four hundred quadrillion BTU’s is a hard number to relate to. If all that energy came from crude oil, it would amount to about 200 million barrels per day. To visualize that, think of a million railroad tank cars being filled, moved, and emptied each day.

Actually, only about 37% of the energy used worldwide now comes from crude oil, with natural gas and coal supplying about 24% and 27%, respectively. Our oil usage is somewhat higher, about 40%. Both worldwide and in the U.S. fossil fuels supply about 88% of all the (measurable) energy used, with rest coming from nuclear, hydroelectric, geothermal, biomass, wind, etc.

Last year the U.S. used about 22% of all the energy used worldwide—down from 25% in 2000. Because the U.S. population is only about 5% of the world total, some say we use way more than our share. Many are also very concerned that about 60% of the oil we use is imported and that percentage is increasing as our production decreases. Less-well known is that about 15% of both our gasoline and natural gas are now imported. All these dependencies are legitimate concerns, but they aren’t easily changed.

On the other side of the balance, the U.S. uses energy more effectively than most nations, producing almost 30% of the world’s GDP, and that effectiveness is steadily increasing. Moreover, while the rate of increase of usage here and in other “mature economies” is decreasing, it is increasing very rapidly in the “emerging economies,” especially China and India. While our total usage increased only 1% from 2000 to 2005, China and India’s combined usage increased 51% and the total world usage increased almost 14%! The Department of Energy predicts the total usage by the emerging economies will exceed that of all mature economies by 2025 and the total world usage will increase about 50% by 2025, with fossil fuels continuing to supply about 88% of the total.

I cite these numbers partly to show that while total world energy usage is enormous and growing very rapidly, our portion of the total is shrinking. I draw four conclusions:
1) we are not alone in depending on fossil fuels,
2) our dependence and that of the entire world cannot be reduced quickly or easily,
3) new energy sources must grow at very high rates for a long time before they can supply a significant portion of global energy usage,
4) whatever the U.S. does or doesn’t do will not determine the global outcome.

The largest and fastest-growing use of energy in this country is for generation of electricity. That now consumes about 40% of total usage, almost half again as much as the 28% used by all forms of transportation. Since 1980 our electricity usage has increased 64% while transportation usage has increased only 42%. More about the significance of this later.

Though not commonly understood, the gasoline used in passenger vehicles and light trucks now accounts for only 40% of all the oil we use, and thus is only about 16% of our total energy usage! So increased mileage standards, use of hybrid vehicles and ethanol, etc., won’t do as much to solve all our energy-related problems, including CO2 emissions, as some believe.

The rest of this article summarizes some more-specific conclusions I’ve reached. Though I can’t elaborate on how I reached them, all are based on much investigation and analysis. All are much condensed, some are very controversial, and I am more confident of some than others. Very importantly, all of them deserve much fuller and more accurate explanation than is now available to most people.

As you read what follows, please keep in mind the facts on energy usage cited above--they will heavily influence whatever is done to change the energy situation. Also understand that my conclusions reflect my belief that the replacement of current energy sources will inevitably be constrained by natural laws and realities that control the conversion of energy from one form to another--e.g. the Laws of Thermodynamics and other engineering and economic “laws” and realities.

* My first conclusion is that largely because two of the major sources of the energy used worldwide-- crude oil and natural gas-- are dwindling resources whose availability must eventually decline, and partly because the worldwide demand for energy is increasing very rapidly, the era of abundant cheap energy has ended.

* Next, the global production of oil will not suddenly cease. Instead, it will eventually peak and begin a long decline. Nobody knows for sure when the peak will happen. Past opinions of “experts” have ranged from many years ago to Thanksgiving Day of 2005, and current opinions range from tomorrow to forty years from now. For what it’s worth, my opinion is that the peak won’t come for at least another fifteen to twenty years. But even that may not be enough time to develop adequate substitutes.

* The increasing worldwide energy demands will cause energy prices to trend upward for the foreseeable future, especially crude oil. As before, natural and geopolitical disruptions will cause occasional price spikes and oil shortages even before the production peaks.

* The law of supply and demand has not been repealed. So the U.S. must continue to compete with the rest of the world--especially China and India--for the global supply of crude oil—paying the going price, whatever it is.

* The U.S. is likely to run short of natural gas before crude oil, because of limited domestic production and import capability, due largely to environmental restraints. Too few are aware of this prospect, which would have very serious consequences. I decry the fact that largely for environmental reasons so much natural gas, our most valuable energy source, is being burned to produce electricity. Mainly because of the massive scale of global energy usage, there are few measures for easing the price and supply problems for at least the next several decades. No silver bullets now exist for solving the longer-term problems. For many years to come the problems can only be mitigated-- if appropriate actions are taken soon enough.

* The U.S. and the entire world should strike a rational balance between maintaining energy sufficiency in the near and intermediate terms and protecting the environment and climate in the longer run.

* The U.S. alone can’t overcome the energy supply problems of the world—at most it can lead in some areas, provide technology, and possibly provide some funding.

* Similarly, whatever the U.S. does to reduce CO2 emissions is likely to have little effect on the course of global warming, because the total worldwide emissions of CO2 are likely to continue at high levels for many years. Adhering to the Kyoto Protocol, which is proving to be ineffective, would have been prohibitively costly for the U.S. and would have had very little effect. The best prospects for significantly reducing our CO2 emissions are
1) to build more nuclear power plants, and
2) build new types of coal-fired power plants that enable sequestering (capturing) CO2, which can then be pumped underground or into the ocean. All things considered, the best way to deal with global warming is likely to be to mitigate its effects, not attempt to prevent it.

* While many conservation and efficiency measures are possible and warranted, they alone will not be sufficient to solve the coming energy supply problems. Increasingly-more total energy production will be needed from now on-- it’s essential to worldwide economic development and stability.

* Large volumes of substitutes for the liquid fuels now made from crude oil, e.g. ethanol and bio-fuels, are not likely to be available for at least ten years, probably much longer. When all factors are considered, ethanol produced from corn is not an acceptable supplement, so biomass sources are likely to replace corn as the raw-material for ethanol production.

* Not all “alternative” energy sources are renewable. For many decades to come the world will be unable to meet its energy needs by use of only renewable sources. Too many people believe the only alternative sources that should be employed are the renewables: wind, solar, bio-fuel, and so forth. Actually, most bio-fuel sources are not truly renewable--they consume land, water, and fertilizer, none of which are renewable, and probably some net energy from other sources.

* The belief that the world can transition to a “carbon-free” mode--one free of fossil fuels-- is hopelessly unrealistic unless and until a way is found to harness the two Holy Grails of energy production:
1) nuclear fusion, which so far keeps moving beyond reach, and
2) massive capture of solar energy, which also looks to be many decades away.

* Because energy production from renewable sources will be relatively small for many years, other alternative sources must be developed in the interim. These include much increased use of nuclear power, more and better use of coal, and greatly increased use of unconventional” petroleum sources, such as tar sands, heavy bitumen and possibly shale oil.

* Next is one of the most important points I want to make—the one often misunderstood by those who address the energy situation. Liquid and gaseous fuels are entirely different from electricity, and they supply different end uses. Wind, solar, and nuclear power produce only electricity, not transportation fuels. It probably will be many years before it will be possible to use electricity—directly or indirectly--to supplant most vehicles that use liquid fuels.

* Accordingly, liquid fuels made from coal and other heavy fossil fuels appear to be the most feasible and affordable sources of large amounts of additional transportation fuels for the next several decades.

* New nuclear plants should be a major source of additional electricity, along with more coal-fired power plants. Over time, conventional coal-fired plants should be supplemented by “clean-coal” plants that employ the IGCC (Integrated Gasification Combined Cycle) process, which is both more efficient and enables sequestration of CO2.

Hydrogen is not a source of energy. It must be made from other energy sources, currently mostly natural gas, at a substantial net energy loss. Hydrogen is only a potential carrier of energy, and its main asset is that it does not produce CO2. Large–scale production of hydrogen is not likely to be feasible unless and until extremely cheap electricity is available--perhaps through nuclear fusion--to enable splitting water into hydrogen and oxygen. Even then, many safety and other problems must be overcome before hydrogen can be distributed on a large scale. Consequently, fuels cells employing pure hydrogen are not likely to supplant conventional liquid fuels for transportation uses for many years, if ever.

* In line with all the above, our energy usage and related problems fall into two largely-separate categories:
1) electricity production and
2) liquid fuels for transportation. The distinctions between them need to be much-more widely recognized, because the approaches to each are very different and our electricity usage already exceeds transportation usage and is growing more rapidly.

* Also consistent with all the above, but lacking space to explain further, I believe the U.S. need not and cannot become independent of imported oil and natural gas for many years.

* Looking very far out in the future, many decades from now, solar power will almost certainly become the primary source of energy. The sun is the earth’s only truly inexhaustible energy source. But many technological and economic hurdles will have to be overcome before enough solar energy can be captured to divorce the earth from fossil fuels and nuclear power.

* A multi-faceted global approach will be essential if the coming energy problems are to be dealt with effectively. It must include increased production of the current major energy sources (fossil fuels and nuclear), conservation and efficiency improvements in all sectors, and development of multiple new energy sources. The various single-focus “solutions” favored by many people, especially renewable sources, will not be enough.

* In this country and elsewhere, public awareness, understanding, and support, plus a non-political approach, will be essential. Worldwide cooperation on a scale never before seen will be needed to cope with the consequences of both the decline in fossil-fuel supplies and the environmental/climate effects. As now constituted the United Nations is not likely to be capable of accomplishing that.

I don’t expect everyone to agree with all of my assessments, at least now. But whether or not I’m right on all points, I’m firmly convinced that the lack of understanding is so widespread, the disagreements are so extreme, and so many issues have become so politicized, that there is currently no really sound approach for dealing with the situation. That’s true all around the world. The leaders of most nations are either too busy with other problems or are not knowledgeable enough to know what to do, or lack the power to initiate the appropriate programs.

Here in the U.S., many legislators are not well-enough informed—and some are too beholden to special interests--to enact the proper legislation. That’s shown by the fact that the Congress took almost five years to pass a compromise energy bill that is flawed in many ways, as are many recent proposals. So my goal is to encourage people to become better informed, in the hope they will then influence their legislators to make sound decisions. While some of those decisions should be to enact constructive legislation and provide subsidies and/or funding, some should be to reject counter-productive approaches and allow the free-enterprise system and innovators to function.

Everything done to shape the future energy system should conform to the indisputable reality that energy is the lifeblood of modern civilization. The energy industry is one of the largest--and perhaps the most important--in the world, and global energy use is growing exponentially. Without heavy use of energy-- mostly from fossil fuels-- the developed nations could not have progressed as they have in the last two centuries. Inevitably, though, the future will be much different, as the global energy demand increases rapidly and the supplies of crude oil and natural gas eventually decline. Filling the resulting “energy gap” from new sources will require an enormous effort by many nations. It will take many years, and if accomplished it will be a monumental accomplishment, beyond anything I know of in human history.

During the long transition period the U.S. and the rest of the world will have no choice but to continue heavy use of fossil fuels. Accordingly, I must disagree with President Bush and others who say Americans are “addicted to oil,” implying that “addiction” can and must soon be cured. Instead, I say that Americans-- and much of the rest of the world-- have become extremely dependent on abundant supplies of cheap energy from all fossil fuels, not just oil. Many wasteful habits must change, especially in this country, but those who believe cheap energy is their birthright must drop that incorrect and unsustainable misconception.

Over time the entire world, especially the United States, must and will adjust to higher energy prices. Higher prices are not just inevitable-- they will slow demand growth and are necessary to finance the development of new energy sources. Furthermore, there is something much worse than higher energy prices: energy shortages. So I strongly disagree with those who believe the best solution to the coming problems is a drastic reduction of energy use, either voluntary or forced. In this country that would drastically reduce our economy and standard of living. In many other countries it would stifle much-needed economic development and prolong human suffering--a path those countries won’t take voluntarily.

Accordingly, I’m convinced the best way to meet the coming energy challenges is to find “acceptable” ways to greatly increase total global energy production from multiple sources--including but not only fossil fuels--sooner than later. By “acceptable” I mean approaches that strike a rational balance between increasing energy production, quickly, and avoiding excessive environmental/climate impacts. The entire world must have more energy, and like it or not, it cannot be had without some undesirable consequences.

The outcome will depend on the nature, scope, and timing of a myriad of actions all around the world. Success is not guaranteed. It won’t be accomplished quickly, cheaply, or without significant lifestyle changes. It can’t be accomplished only by establishing stringent governmental regulations, or by imposing punitive taxes on energy producers, or by enacting mandates that ignore the realities of feasibility and economics, or by employing only environmentally-friendly approaches. The obstructionist attitudes of NIMBY and BANANA must be abandoned, along with other relics of the era of cheap energy.

Devising effective policies for shaping the energy future will require at least five essential ingredients:

a) agreement on direction and goals,
b) public and governmental commitment,
c) adequate technology,
c) much money, and
d) time.

With the possible exception of time, none of these now exist in sufficient amount, either in this country or worldwide, and the time is getting shorter every day.

If I were King, I’d start by fashioning a rational consensus on the first ingredient—agreement on direction and goals. The first step would be conducting an expert, objective, non-political assessment of what approaches are technologically feasible now, which are likely to become feasible fairly soon, which can provide very large amounts of energy sooner than later, and which are likely to be reasonably acceptable, both economically and environmentally. That assessment should be fully compatible with all the “Laws” I mention earlier. While very difficult to achieve, such a consensus would be necessary to guide the difficult decisions that would have to follow. But I’m not King and won’t be around to see the outcome, so good luck!

T L Gore Loveland, CO 12/03/06