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US energy policy - Aug 9

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Many more articles are available through the Energy Bulletin homepage


Gas Prices Alter Habits of Many, but Far From All

Kirk Johnson, NY Times
... Americans are deeply divided in their responses to high gasoline prices, as they are on so many other things, including politics, class and culture.

Researchers, pollsters and ordinary Americans in interviews on Tuesday said they saw no broad national experience or commonality of sacrifice when it came to gasoline, even when the nation endured a jolt like the one from Alaska.

Wealthier people have more choices than others in how and whether to adapt - to drive just as much or buy an expensive hybrid vehicle. Hispanics, lower-income households, urban residents and younger people, according to a national poll by the Pew Research Center, are more likely to change their behavior by carpooling or using mass transit.

There are often regional disparities, too; the West Coast, for example, is likely to be hit hardest by the closing of Prudhoe Bay, experts said, because the Alaskan oil mostly feeds refineries in the West.

Even ethanol, the alcohol additive that is being used more frequently as a component in the nation’s fuel supply, can be a point of division. Environmentalists like the additive because it pollutes less, but some energy experts say that ethanol-gas mixtures are less efficient as a fuel and may be leading to more gas consumption. Some ethanol is in about a third of the nation’s gasoline supply, up sharply from last year.

In the Pew Research survey of 1,182 Americans - 1,048 of them drivers - 55 percent said they were driving less because of the recent increases in gasoline prices. The poll, taken from June 20 to July 16, had a margin of sampling error of plus or minus three percentage points.

Yet Americans’ overall gasoline appetite has barely budged. Total use this year is up about one-half percent to 1 percent compared with 2005, according to federal figures - a slower rate of growth than in the past, but hardly the mark of a nation with its foot fully on the brake.

There are anecdotal glimpses of a drop in driving
(9 Aug 2006)


Old thinking on energy

Editorial, Balitmore Sun
Three-bucks-a-gallon gasoline has transformed the energy debate in Washington from what Marylanders might see as a principled if abstract battle over drilling in Alaska's wildlife refuge to the most serious threat in 25 years of oil rigs rising off Ocean City.

Short-term politics of a tumultuous election year have driven Congress to contemplate lifting a ban on coastal oil and gas exploration that's been in place for a quarter-century and until this year had been considered sacrosanct.

Differences between a sweeping House measure and a more narrow Senate proposal mostly focused on the Gulf of Mexico may be impossible to resolve before Congress adjourns in the fall. What's really needed, though, is a completely different approach.

The worst feature of this legislation is that it's so backward, so ostrich-head-in-the-sand, so 1950s. The nation's energy future doesn't lie with plundering seacoasts and other precious natural resources for ever-more-meager supplies of polluting fossil fuels.

The 21st century will be marked by an international race for new fuels and new technologies that will be clean and green, say serious thinkers on the topic, including Rep. Roscoe G. Bartlett, a Western Maryland Republican, who called the drilling legislation a deceptive diversion.

Mr. Bartlett and a growing chorus across the political spectrum are calling for the kind of focused effort that produced the atomic bomb in World War II and put a man on the moon in the 1960s. And yet the Republican-led Congress would not allow a floor vote in the House or Senate on proposals to require higher vehicle fuel-efficiency standards - a step estimated to save more oil than coastal drilling produces in decades.
(4 Aug 2006)


Federal officials look outside their own bureaucracies for alternatives to oil dependence.

Original title: Pipelines and Stovepipes
Katherine McIntire Peters, Govexec.com
If politics makes for strange bedfellows, then so too does a perceived national crisis. How else to explain the unlikely collection of federal officials attending a series of seminars aimed at sparking new ideas for addressing what President Bush has termed America's "addiction" to oil. Like members of a 12-step program meeting to share fears and coping mechanisms, federal officials from agencies as disparate as the Fish and Wildlife Service and the Defense Intelligence Agency have been meeting to discuss everything from energy conservation measures to the viability of renewable fuels.

What's notable about the meetings, which have taken place monthly since March in a hotel ballroom in Arlington, Va., after business hours, is that attendance is voluntary. That hundreds of bureaucrats, congressional aides, energy company executives, environmentalists, think tank analysts and consultants have willingly given up leisure time to hear speakers such as former CIA director James Woolsey extol the virtues of hybrid engines and investment banker Matthew Simmons argue that Middle East oil is running dry, says much about the thirst for substantive discussion in Washington about energy issues.

The seminar series, billed as an interagency learning opportunity, is titled, "Energy: A Conversation About Our National Addiction" and is organized by the Defense Department's offices of Force Transformation and the Undersecretary for Acquisition, Technology and Logistics. The idea, says Robert D. Holzer, outreach director for the transformation office, was to get people talking across government. Whether their primary concerns are global warming, environmental conservation, economic vulnerability or national security, attendees share a common belief that the nation must reduce its dependence on foreign oil.

That a Pentagon office would sponsor such an initiative is not surprising - the Defense Department accounts for 1.7 percent of U.S. oil consumption and is the single largest buyer of oil worldwide, exceeding the purchase rates of many nations. But other federal agencies also are under pressure to reduce oil consumption. The 2005 Energy Policy Act requires that the federal government overall derive 7.5 percent of energy from renewable sources by 2013.
(1 Aug 2006)
I couldn't find this article posted yet on the govexec.com website. The next event in the series is described in the next item. -BA


Dept. of Defense series on "Our National Addiction" - Sept 18 "Outlook for nuclear"

DOD, Naval Postgraduate School
Energy: A Conversation About Our National Addiction
An Inter Agency Learning Opportunity

Nuclear Energy 2006: Status and Outlook
Admiral Frank L. "Skip" Bowman, (USN, Retired)
President & CEO, Nuclear Energy Institute

Monday Sept 18th, 2006 6:00 to 8:30 pm
Doubletree Hotel, 300 Army Navy Dr, Crystal City, VA

The DoD Under Secretary for Acquisition, Technology and Logistics and the Office of Force Transformation are pleased to invite you to attend the sixth of a monthly series on "Energy: A Conversation About Our National Addiction." This Conversation series explores the central role energy plays in achieving national and program goals.

Congressman Roscoe Bartlett, cofounder and cochairman of the Congressional Peak Oil Caucus and Defense Energy Working Group, spoke at the second Energy Conversation on April 24, 2006. More information about his presentation and this series is available at the Energy Conversation website.

This presentation will illustrate the performance and benefits of today's 103 commercial reactors in the United States; examine the prospect for growth in the nuclear energy sector; and. review important used fuel policy issues on the federal and state level. Wall Street, congressional and other decision-maker perspectives regarding new nuclear plant construction will be presented while emphasizing the need for expanded U.S. baseload electric capacity as part of a diverse energy policy that meets our nation's electricity requirements and environmental goals.

Why is the DoD hosting this series? Just as the Defense Department played a critical role in forging the information revolution in past decades, so can the Department play a similar critical role in fueling the energy revolution in coming decades. Why are you invited? Because there are positive and negative outcomes of decisions you make dependent upon your understanding of energy. We are all stakeholders in addressing the efficiency, conservation, secure sourcing, and cost reduction of energy. It is complicated with no easy answers. There are NO SILVER BULLETS. Come learn with us.

... For more information and to register, please visit www.nps.edu/cebrowski/conversation.html or send an email to energy@cna.org with the subject "Send Registration Link." We'll reply with the link.
The Energy Conversation is open to the public and members of the media. Please forward this invitation to others you think might be interested.
Future session dates * Oct 16th * Nov 13th * Tues Dec 12th
(Aug 2006)


Mexico's energy problems hurt U.S.

Morris R. Beschloss, The Desert Sun (Palm Springs, California)
America's energy doomsday clock could be inching closer to midnight with the news that Mexico's primary oilfield may be ready to crater. If these dire predictions turn out to be correct, such a development could deal a body blow to the United States' desperately needed oil supplies.

With 2006 demand calling for 22 million daily barrels, domestic U.S. supply is down to less than 8 million barrels a day. Of the average daily imports exceeding 12 million barrels, Mexico has been counted on to deliver 20 percent of that amount. In fact, additional offshore discoveries in the Gulf of Mexico were expected to add to that total. However, due to the excessive depth of these reserves, and the prohibitive cost of extraction, Mexico is not capable of pursuing that option at this time.

Compounding this problem, energy experts now believe that the Cantarell Oil complex, which had reached 2.1 million barrels a day two years ago, is now in sharp decline. It could be as low as 520,000 barrels a day by the end of 2008, with further downturns after that.
This unexpected shrinking of the world's second-largest oil complex, which has made up the lion's share of Mexico's production of 2.5 million barrels, jeopardizes about 90 percent of Mexico's exports, most of which are headed for the U.S. Only America's northern neighbor, Canada, which is expanding its oil sands capacity, may be left to make up this shortfall.

However, a similar crisis could be developing at the world's largest oilfield, Saudi Arabia's huge Ghawar complex, the only one in the world eclipsing the size of Mexico's Cantarell. Like Mexico's giant offshore development, Ghawar is also starting to be plagued by the incursion of seawater.

Despite vehement denials by Saudi officials, some reputable analysts have indicated that three of Saudi Arabia's five major sources of 9 million daily barrels of oil production could also be on the wane.

The 266 billion barrels that the Saudis have claimed as their part of the world's 1.2 trillion barrel reserves have never been verified by independent geologists.
With oil supplies currently tight and demand on the upsurge worldwide, such a combination of implosion in the world's two largest oilfields could prove to be catastrophic for the U.S., since Saudi Arabia supplies five percent of America's imports.

Other energy chickens may also be coming home to roost in America. International oil acquisition policy which has depended on the world's multi-nationals to assuage the increasing demand/supply imbalance is proving increasingly inadequate. The much-touted national Strategic Petroleum Reserve holds barely enough oil to cover a one-month supply in case of a national emergency.
(6 Aug 2006)
Jeffrey Brown writes: "Remarkably honest MSM article on Cantarell & Ghawar." Related article in the Wall Street Journal: Mexico's Biggest Oil Field Sees Decline. Excerpt:

"The data show that Cantarell, the world's second-biggest field after Ghawar in Saudi Arabia, is living up to what is known within the state oil apparatus as a worst-case scenario, detailed in an internal oil company report that suggested earlier this year the field's output could fall by nearly 75% by the end of 2008."

Note that based on a Hubbert Linearization (HL) plot, Mexico (like the world) is 50% depleted--the same point that the Lower 48 started declining.

The problem that the US has is that, according to the WSJ, production from both Venezuela and Mexico is falling, while domestic consumption in these two countries is rising rapidly, so net exports from these two key US suppliers are being squeezed from two directions.

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