[The Vector] The Department of Energy Weighs In

The U.S. Department of Energy (DOE) released a FACT SHEET on March 30^th in concert with the President’s speech.

First, the good news (in my opinion.) I tend to agree with the statements of the FACT SHEET in the section entitled “Innovating our way to a Clean Energy Future:”

Creating Markets for Clean Energy. The FACT SHEET concludes that in order to move capital off the sidelines and into the clean energy industry (which creates jobs), we need to give businesses and entrepreneurs certainty and a clear signal. The Clean Energy Standard (CES) aims to achieve 80% of our electricity from clean sources by 2034.  Bravo. Recognizing that businesses will not act in uncertainty, and setting a clear goal is commendable.

Cutting Energy Bills through Efficiency. Increasing efficiency is a given – conserve and use wisely what you do have.

Staying on the Cutting Edge through Clean Energy Research & Development.  The Department of Energy tells us that through ARPA-E (Advanced Research Agency-Energy), more than 100 cutting-edge programs are in play. I regularly visit ARPA-E with interest and it reports on interesting work and advances. I am not sure how the budget requests to double funding will play out, and if Venture Capital and the private sector will advance or should be/will be more involved. That goes back to having a long-term policy and plans that business feel comfortable with.

Now to the outline by DOE on the goals of reducing oil imports which are not all as clear to me.

1) Reducing oil imports

            a. Expand safe & responsible domestic oil & gas production. This includes safety reforms since Deepwater Horizon. OK, but it doesn’t address the issue of our reserves and supply of oil.

            b. Identifying underdeveloped resources. DOE says there are unused oil & gas leases, and in a recent report said 70% of offshore leases are inactive.  Well yes – between the moratorium, new rules, poor capital markets and uncertain business environment, this is not surprising. The report also doesn’t acknowledge that to develop leases, millions and billions of dollars and years are needed.

2) Securing Access to Diverse & Reliable sources of Energy.

DOE says the U.S. is acting to moderate global oil demands, secure additional supplies of fuels and working with partners to increase oil production in a manner that ensures safety. I am uncertain how this helps decrease oil imports or what it really means – and I am probably wrong, but the sentence wreaks of war.  And how exactly do we “moderate global oil demands” as the largest user of oil and definitely NOT a leader in efficiency or renewable energy? However, the report also said we are increasing sustainable bioenergy production (good except for corn ethanol in my opinion) building a new framework for nuclear energy (bad in my opinion), and promoting energy efficiency (good).

3) Developing Alternatives to Oil, including Biofuels and Natural Gas.

Some of the most effective opportunities are in our backyard, says the FACT SHEET, and I do agree – in part. Natural gas has a great role to play. If one looks at T. Boone Pickens plan to convert the big 19 wheeler trucks to natural gas – vehicles that are too large and heavy for battery power – and how natural gas can be used in many applications, this is great.

But I abhor the whole corn ethanol play. The report says “corn ethanol is already making a significant contribution to reducing our oil dependence…” Really?   Other biofuels hold so much promise and should be supported.  But corn ethanol?  I wrote why I am against this is my book and in several Vector posts.  If you want to know why I object, click through.

4) Cutting costs at the pump with more efficient cars & trucks.

The report mentions setting historic new fuel economy standards; it also says the U.S. is paving the way for advanced vehicles. The President wants 1 million electric vehicles on the road by 2015 and the 2012 budget proposes a $7,500 tax credit for consumers, grants for communities that adopt EVs and funding for advanced battery tech.

5) Federal Fleet – lead by example.

The federal government has more than 600,000 fleet vehicles. Obama is calling for action that by 2015, all vehicles purchased will be alternative-fuel including hybrid and EV.

 The entire energy discussion couldn’t be more important but how will it develop?