[The following article outlines some of the facts of oil depletion and proposes hydrogen as a solution. The editors of this site have little faith in hydrogen as anything approaching a total solution to peak oil. Energy must be invested to turn water into hydrogen (H2), so hydrogen is better considered as a form of energy storage (a highly problematic one at that), not an energy source. The various problems with the ‘hydrogen economy’ are well documented in the articles Why Hydrogen is No Solution by Michael Ruppert, Lots of Hot Air About Hydrogen by Joseph J. Romm of the LA Times, and the website Fuel Cell Folly -AF ]

Fear drives the political myth of energy independence!  John Whitaker coined the phrase “Energy Independence” back in 1973.  Today, it is often used by candidates offering a better idea or touted by incumbents outlining complex “roadmaps” which are neither understandable nor helpful in the day-to-day survival for the common man.   When President Gerald Ford asked America to seek “Energy Independence” in 1974, Hydrogen was a renewable resource with a twenty-year delivery date.   The paranoia of scarce oil supplies and the gas-lines with alternate days of operation did little (three years later) to sustain a national sense of urgency despite President Carter’s gathering of Governors and energy experts to write America’s first Energy Plan. Ronald Reagan’s sought to assure reasonable priced, available energy by setting the market forces free to seek their own level… the “unintended consequence” was destabilizing OPEC providing time for America ‘s energy experts to bring on line those alternatives promised in 1974.  

Today, thirty years after Ford, twenty years after Reagan and four years after Clinton, America’s roadmap to energy independence is an ever shrinking quagmire no closer now than in 1974.  Nuclear Power reprieved for 5-8 years electrical transmission lines are on life support.  Since the last Presidential election foreign oil imports have gone up 5%, alternative and renewables touted 30 years ago have come and gone or not arrived at all.  Hydrogen is now 10 years past due with the Department of Energy and the National Academy of Science recalculating its arrival somewhere on the roadmap, 35 years away. 

For the last thirty years America ’s National Attention Deficit Disorder (ANADD) has failed to sustain its concentration on any particular path or finish any effort begun.  Soon four divergent forces will “squeeze America ” to the brink of economic and political collapse.  Never far is always the issue of electrical reliability and cost.  Peaking oil supplies will soon become economic terrorist targets.  Natural gas supply already suffering from eco-tech paralysis will fail to meet demand.  Failure to provide offsets for nuclear contributions continues to challenge mid term energy reliability.

The cost and availability of oil will be impacted by “peaking”; natural gas supply will fail to meet production and supply demands; nuclear offsets aren’t being addressed and the failure of transmission lines to be replaced or upgraded are all rapidly coming together in a short period of time and will cause rocketing prices and supply disruption.  Any of which alone is troublesome but in combination will create economic and political instability.

The re-analysis of Hubbert’s Peak along with many recent reports suggests that Saudi Arabian oil “peaked” a few months ago. The implication for Saudi oil “peaking” is that once peaked the Saudi’s are on the other side of the production curve.  Once an oil producer has peaked they have little elasticity other than cost and production levels.  The new challenge for a peaked nation is to figure out how much to charge to maintain their economy as their supply declines.  The Saudi’s can no longer indefinitely maintain increased production to off set price and supply considerations for the U.S. and its allies.

One of the tools the U.S. has used to maintain price of oil (for home heating oil and gasoline, jet fuel etc.) has been to increase the supply of cheap natural gas.  Natural gas provided an elastic tool that could be manipulated.  Over the last three years domestic consumption has exceeded the combined ability of exploration and production using up the production capacity of Canada .  Liquefied Natural Gas offers some cushion but considering it only accounts for 1% of the market it is unlikely that it can provide a significant amount of excess supply any time soon.  So, natural gas as an elastic buffer is used up.

Despite the effort to maintain the current contribution of nuclear energy by extending the license of those plants whose license was to expire after twenty years of operation, new plants or nuclear technologies haven’t been funded or invested in despite an administration with a majority in congress.  What fuel source will replace the 16-22% of the electrical power provided by nuclear commercial power plants in the next 10 -20 years?   Nuclear facilities require billions of dollars each and 8-12 years to build.  The permanent storage of spent fuel is no closer to resolution than 25 years ago. Yucca Mountain has become a nuclear football.  

In the electrical supply community deregulation has proven to be a prescription for systems failure and cost deferral.  Power suppliers learned early after deregulation that transmission maintenance could be deferred. The disruption by marginal contributors is a nuisance but and a resource drain but the deferral of installing new transmission lines is more than enough economic incentive to offset the nuisances.  Consider the typical example.  A factory requests power supply, existing transmission lines are hooked up, there is no economic incentive to upgrade transmission lines given economic uncertainty of the client. However, overall the quality of the transmission lines continue to decline until one day soon the weight of failing to change and maintain the transmission lines will exceed their operational viability.  Soon, the grid will go down.  By the time the government in whatever election cycle realizes it and reinstitutes regulation the damage will be done and core industrial sectors will be grounded for lack of power.  Thousands will become unemployed and a depression like no other will envelope America .

Simply put, America is being squeezed because some foreign oil countries are peaking (removing the elasticity enjoyed by foreign oil use), natural gas is under explored, production can’t meet demand causing rising price and availability issues (also removing the elasticity of natural gas), offsets for nuclear (nuclear or other) aren’t being moved on fast enough to make a 10 year impact either on existing production or future production, and the electric transmission lines are falling apart and not being replaced. 

Given these forces coming together, one of three things will happen.

First, the American voters will reject the incumbent because in this election year; the cost of gas at the pump will go from $1.90-$2.10 for the summer upwards to $2.50 by fall, home heating oil prices will hit an all time high from $1.15 today to $2.00 by November, the Terrorism tax (amount added to the cost of energy for market instability, added insurance and physical protection) will exceed $20.00 per barrel by October.  Add in any supply disrupting event and domestic supply could be impacted by 10%.  The trickle down effect will once again create gas lines and paranoia of vulnerability.  World wide availability of oil and rapidly rising cost will thwart economies ( China ) and cause third world economies to implode.

Second, because of fear of instability and a wish for continuity the American voter will retain the incumbent but not without extracting real time implementation of specific actions designed to retain control of availability and cost.  For example; in the Midwest, high production quotas for methanol, national joint ventures for IGCC’s in coal states, producing power and hydrogen for dual use applications, preparation for disruptions of gasoline supplies and voluntary program for distribution – how Strategic Petroleum Oil Reserve ( SPR ) will be used to help bridge the gap and a national decision on construction of new Nuclear power plants and storage.

Third, pooled economies (combined resources of states and wealthy individuals) will manipulate American cost and supply causing disruption and chaos in delivery and a chain reaction of impacts on the American economy.  The spiral down effect of such an action would create an economic crash reminiscent of the ’20’s.  In this event it won’t much matter who is elected because the ability of the U.S. to thwart leveraged economic terrorism against it takes too long and by the time it could respond the crisis would be in mid-event.

So how do you identify the squeeze play and turn it to your advantage?  We shouldn’t be surprised that we are being squeezed.  We are responsible for most of it.  America ‘s solution must involve a national awareness and sustained commitment (in excess of our attention span — how long it takes to get our power back on or gas in our car).  Most experts don’t believe they will.  Beginning with simple acts of conservation and people passionately involved, isn’t enough. It requires government tax breaks for production and investment for alternative technology use and application.  It requires a serious look at multi-national oil companies and their interests over our national interests.  Most importantly it requires planning in anticipation of the dwindling supply and increased cost for energy in the coming months. 

Congressman Bartlett in a discussion of the Hydrogen Economy in a technical session held at the recent TECH TRENDS Conference in Pittsburgh in August 04 clearly had his finger on the pulse when he said “what we need is a Manhattan type Hydrogen project”, to yield the promised hydrogen energy source in time to help the common man and this country’s economy.

Fear drives the instability of once reliable, affordable energy.  The unintended consequence of failing to achieve energy independence has been that in putting it off we have created a crisis of the “crisis” perhaps exceeding any ability to fix it. 

Believing we should move now to assure an uninterrupted availability of fuel the President should go after Hydrogen with an entrepreneurial passion and knowledge that what is good for Joe Citizen will be good for America : 

  1. The President should propose and work with Congress to pass a 100 Billion dollar tax investment, production and credit program to assure no one is left behind in being able to afford Hydrogen Hybrid vehicles and back up power generating plants, the hydrogen infrastructure distributed energy, fabrication, manufacturing parts, equipment and value added components to the Hydrogen infrastructure.
  2. The President should ask Congress appropriate to one Billion to the Department of Commerce he should direct DOE to work under the Dept of Commerce requirements on all Hydrogen infrastructure projects.
    1. By executive order establish an independent Hydrogen Infrastructure office under the department of commerce, to direct the Hydrogen Economy initiative (including a SBRI type program for all size companies and universities for hydrogen generation and distribution projects).
    2. Direct non-weapons National labs to support Commerce directed priorities on a “crash” basis.  Provide Commerce full oversight and sign off of the Lab and DOE Hydrogen budgets.
  3. Fund DOE Alternative Energies initiatives above the earmark levels.
    1. Initiate coal producing hydrogen generation plants, utilizing best available environmental systems.
    2. Fund programs that will improve the emission filtering system to create more acceptable limits with a 2-3 year time frame.
  4. Direct Transportation and Commerce to work with industry to set up strategic H2 generation plants within major markets for ease of distribution using off the shelf technologies, replacing with evolutionary technologies as they become available.
  5. Direct Transportation to work with industry to create refueling stations utilizing today’s safe technologies i.e. liquid / gas/ mini-generation plants to jump-start the utilization (including working with congress to identify appropriate investor and production credits).
  6. Provide automotive manufacturers with tax incentives to jump start production of hybrids and development of the all H2 powered fuel cell vehicles.

Alternative fuels will become reality and the economy will get a must-needed infusion when our individual interest and concern is sustained for more than a day, week, or month. The military will finally realize substantial gain without targeted investment.

As a nation we fear nothing, as individuals we fear being without.  It is our personal paranoia that will drive economic instability and a crisis of confidence in leadership.  The odds are good the Republicans will loose the Senate.  The House is a dead heat.  The presidency will go to the best attorney’s when it comes to counting the votes.

Doing business as usual will allow Japan to leap into a Hydrogen technology lead rekindling the technology desperation of Sputnik.  The ability to go step-wise into the Hydrogen economy will offer the consumer control over our paranoia and available supply of fuel to continue our life style.  It will allow consumers the choice over what we choose to purchase and pay-for versus the inability to control our destiny.  Americans are control freaks (what freedom gives you) we will complain of the escalating costs but will choose vehicles that offer some degree of control over our life style.  Hydrogen efficiencies at $3.00 a gallon will trump current technologies at $3.00 a gallon.

In the midst of the “dog days of summer” America is being squeezed by divergent forces…oil provided by peaking nations whose national interest lies elsewhere; insufficient natural gas exploration keeping pace with demand; electric supply teetering on infrastructure collapse; erosion of significant production supply (nuclear) with no alternative offset; and the potential economic terrorism caused by resources beyond U.S. control and for which the U.S. is unable to be offset with our Strategic Petroleum Oil Reserve ( SPR ).  In the fall we will see how well we have prepared, how well we have understood the crisis we have made and how well we have read our roadmaps, knowing that roadmap chart paths and distance… not how long it will take us to get…around the corner.