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Saturday, February 04, 2006

Bush Highlights Energy in State of the Union Address - Admits "America is addicted to oil"

President Bush delivered his annual State of the Union Address this week [full text here]. A full four paragraphs and a whole 2 minutes and 15 seconds were devoted to discussing his energy policy proposals during which he openly recognized that "America is addicted to oil, which is often imported from unstable parts of the world."

To address this issue, Bush proposed that the United States cut its oil imports from the Middle East by 75% by the year 2025. Announcing that "the best way to break this addiction is through technology," Bush used the speech to announce a new Advanced Energy Initiative - a 22 percent increase in clean-energy research.

President Bush called for innovation in two key areas: energy generation and transporation. To address the former, Bush proposed increased investment "in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy." To address transporation, the President called for increased "research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen" as well as cellulosic ethanol. Bush called for "additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass" and announced that it was his goal "to make this new kind of ethanol practical and competitive within six years."

Here are energy focused paragraphs of the speech:

Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, and more reliable alternative energy sources -- and we are on the threshold of incredible advances.

So tonight, I announce the Advanced Energy Initiative -- a 22-percent increase in clean-energy research -- at the Department of Energy, to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy. (Applause.)

We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years. (Applause.)

Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. (Applause.) By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle Eastern oil a thing of the past. (Applause.)

At first glance, this almost looks like leadership on energy policy finally coming from the federal government ... almost. Upon closer examination, however, Bush's new 'ambitious' Advanced Energy Initaitive isn't quite as exciting as you might have hoped.

The 75% Solution

First off, is a 75% reduction in imported oil from the Middle East really that bold a goal? In actuality, only 2 million barrels per day (bbl/d) or about 16% of the aproximately 12 million bbl/d of oil imported to the United States comes from the Middle East (the bulk actually comes from Canada, Mexico and Venezuela). So a 75% reduction in Middle Eastern oil only amounts to a 12% reduction in oil imports or about 1.5 million bbl/d. It amounts to an even smaller chunk of our total oil consumption, currently at just over 20 million bbl/d. At that level of oil thirst, Bush's '75%' figure amounts to just 7.5% of total oil consumption. That's hardly a bold "move beyond a petroleum-based economy."

Now, don't get me wrong, 7.5% isn't nothing. It's at least moving in the right direction - our current course of (in)action has us heading towards an increase in oil consumption by 2025, not a decrease.

Of course, 7.5% doesn't really compare to the full potential of some of the technologies Bush mentioned in his address, including cellulosic ethanol and biofuels, plug-in hybrids and electric vehicles (and simple fuel efficiency which was conspicuously absent from Bush's speech).

Additionally, specifying a 75% reduction in imports of Middle Eastern oil leaves the door open to simply shifting the imports to other countries so there's no guarantee we'll even see that 7.5% reduction in oil use.

Of course, considering Peak Oil, we may not even be able to buy those 1.5 million bbl/d from the Middle East by 2025 anyway. As Byron King wrote for the Energy Bulletin, that 75% 'goal' may actually be more of a prophecy. Referencing Peak Oil concerns, King writes, "There is no way that the US will be importing as much oil from the Mideast in 2025 as it imports today. And there is no way that the nations of the Mideast will be exporting as much oil in 2025 as they are exporting today."

Considering recent news about half of Kuwait's oil reserves 'vanishing' overnight and the prize oil fields of Middle Eastern nations reaching peak production, King may not be too far off. Interestingly enough, there was no mention of Peak Oil in Bush's address.

Also, if reducing oil imports is our goal, then where was the mention of a gas tax - probably the most effective way to encourage conservation and efficiency. Of course conservation and efficiency - almost always the most cost effective and easy to implement solutions to reducing consumption - weren't mentioned either.

And on a side note, what the heck does generating more power from clean coal, nuclear, wind and solar have to do with oil imports? This isn't the 1970s, Mr. Bush, when we used to burn plenty of oil for electricity generation. Now days, only 3% of our oil use goes to electricity generation while transportation accounts for over 2/3rds of total oil use. Unless you are proposing a complete transition to an electric vehicle fleet powered by clean domestic energy sources - now that would be real energy leadership - what do nukes have to do with oil? I think you meant to say that these technologies are crucial to mitigating the effects of global climate change ... oh wait, you didn't mention global climate change either ... my bad ...

The Advanced Energy Initiative

So what policy action is Mr. Bush proposing to achieve his 'bold' vision to "move [us] beyond a petroleum-based economy"? The short answer is, the Advanced Energy Initiative (AEI), a 22% increase in Deparment of Energy funding for a variety of clean energy generation and alternative transport fuel research programs.

Green Car Congress breaks down the funding proposal nicely:

Funding proposals to support the Advanced Energy Initiative in the President’s 2007 Budget will include:

  • $150 million—a $59-million increase (65%) over FY06—for the Biorefinery Initiative, the purpose of which is to help develop bio-based transportation fuels from agricultural waste products, such as wood chips, stalks, or switch grass.

  • $30 million—an increase of $6.7 million (29%) over FY06—to speed up battery development for hybrids and plug-in hybrids.

  • $289 million—an increase of $53 million (22%) over FY06—to accelerate the development of hydrogen fuel cells and hydrogen-powered cars.

  • $281 million for the development of clean coal technologies. The President had committed $2 billion over 10 years to speed up research in the use of clean coal for power generation. The 2007 Budget request will nearly complete that $2-billion promise 4 years ahead of schedule, according to the White House.

  • $54 million for the FutureGen initiative—a public-private partnership to develop an emissions-free coal plant. (Earlier post.)

  • $148 million for a new Solar America Initiative—an increase of $65 million (78%) over FY06—to accelerate the development of solar photovoltaic cells.

  • $44 million for wind energy research—a $5-million increase (13%) over FY06 levels.

  • Here's how it breaks down graphically:

    So what do we have here? First, I'd like to point out that this is one of the first mentions in a major policy address by the president or anyone amongst the Republican leadership that I am aware of that highlights cellulosic ethanol and plug-in hybrids and electric vehicles, perhaps the most promising short to midterm solutions to our oil addiction.

    However, let's look how the funding breaks down to see where the priorities of this initiative lie: on the alternative fuels end of things, hydrogen gets twice as much dough as biofuels and ten times as much funding as advanced battery research despite the fact that a commercializable hydrogen vehicle, much less the infrastructure to fuel it is still decades away. And on the electricity generation end of things, clean coal (including the FutureGen project) gets twice as much funding as solar research and nearly seven times more funding than wind.

    Now one might argue that because wind, solar, biofuels and batteries are such viable near term alternatives, they deserve less funding. We ought to put our research dollars to work on those technologies, like hydrogen, that still need a lot of work.

    This is a valid argument for hydrogen, I suppose, if you ultimately think that a hydrogen economy is our long-term goal (a view that is certainly open for debate at this point). However, if you believe that plug-in hybrids with their liquid fuel from cellulosic biofuels and their electricity from clean domestic power sources could do the same job as hydrogen in much less time using existing distribution infrastructures, you might counter that we ought to put our money in our best options and that the hydrogen funding is a waste of money ...

    Furthermore, unlike hydrogen, clean coal is not some far off technology. In fact, if you glance over at the Energy Blog's coal archives, you'll quickly recognize that clean coal - or Intergrated Gasification Combined Cycle - is already undergoing commercialization, despite the fact that the DOE's FutureGen 'demonstration' project is still years away from completion. Coal gasification and carbon sequestration are both relatively mature technologies - the former being invented by Germany to fuel the war effort during WWII and the later being used by the oil industry to increase output from declining oil fields (they call it enhanced oil recover or EOR).

    Compare this to the solar industry which is currently working hard on a number of potentially revolutionary solar technologies including silicon-free thin-film PVs, solar concentrators, organic PVs and nano-scale engineering like quantum-dots. Each of these technologies offers to bring to price of solar power down into a competitive range and could further the dream of ubiquitous distributed solar power. Shouldn't we be focusing our attention on these technologies then? Let's pump funding into the most promising new solar technologies and help bring them to market faster.

    The same goes for advanced battery technology as compared to hydrogen. Battery tech is right on the cusp of developing to the point where full electric vehicles and certainly plug-in hybrids are viable. Shouldn't we focus our attention on brining these technologies, which only recieved an additional $6.7 million as part of the AEI to market quickly, rather then funneling almost ten times that much money into hydrogen research.

    Finally, much like the slightly misleading '75% oil reduction' figure discussed above, the AEI's '22% increase' in research funding is also misleading becuase it comes shortly after Congress passed budget cuts to renewable energy and alternative fuels research that were approved by President Bush. The New York Times reports:
    The Energy Department will begin laying off researchers at the National Renewable Energy Laboratory in the next week or two because of cuts to its budget.

    A veteran researcher said the staff had been told that the cuts would be concentrated among researchers in wind and biomass, which includes ethanol. Those are two of the technologies that Mr. Bush cited on Tuesday night as holding the promise to replace part of the nation's oil imports.

    The budget for the laboratory, which is just west of Denver, was cut by nearly 15 percent, to $174 million from $202 million, requiring the layoff of about 40 staff members out of a total of 930, said a spokesman, George Douglas. The cut is for the fiscal year that began on Oct. 1.
    The budget cuts came as part of the 'defecit reduction' budget cut measures passed by Congress at President Bush's urging (meanwhile, Bush continues to call for increased tax cuts and lobby against letting his existing tax cuts expire ... gosh, it certainly makes sense to me to lower taxes while trying to cut the deficit and while waging a war in the Middle East costing hundreds of billion of dollars, not to mention the unending 'War on Terror').

    So, Mr. Bush, how much of this new bold Advanced Energy Initiative is simply restoring things to the way things were before you axed the budgets of our nation's best alernative energy research centers?


    While I have to be happy that President Bush is at least undoing some of the budget cuts he has already made to alternative energy research and perhaps even added some dough to the pot, there's no reason why anyone truly interesting in seeing a sustainable energy future should be satisfied by the president's speech.

    His goals - what a mounts to a 7.5% reduction in total oil consumption - and his methods - a 22% increased in alternative energy spending, part of which merely undoes previous DOE budget cuts - are hardly 'ambituous' or 'bold' as Mr. Bush's political strategists might want us to think.

    The president's speech is notable more for what it doesn't say than what it does:
  • where is the mention of Global Climate Change or Peak Oil, the two most pressing driving factors encouraging - no, demanding - a transition to a sustainable energy future?;
  • where is the mention of a gasoline tax to actually encourage conservation and efficiency?;
  • where is the announcement of a new nation-wide renewable porfolio standard to encourage the actually construction of new renewable electricity generation?;
  • where is the announcement of a bold target to have 30% of all cars on the road by 2030 powered by a mix of domestically produced electricity and cellulosic biofuels?;
  • where is the truly bold call for a 50% reduction in foreign oil by 2025, rather than a 12% reduction (i.e. 75% of Middle Eastern oil) that could simply be shifted to imports from other non-Middle Eastern nations?

  • In short, where is your bold energy plan for the future, President Bush? This certainly isn't it!


  • Full text of the 2006 State of the Union Address

  • [I realize that this is hardly a timely post on the State of the Union address and that the speech's energy portion has been well covered by now. I apologize. I began this post on Wednesday morning but real life reared its ugly head and prevented me from completing it until Saturday. However, I couldn't let such an important public address on energy issues slide by without interjecting my two cents, however tardy they are... I hope this was still worthwhile reading. Of course, if you are down here reading this, you probably weren't too bored by the post so I guess it wasn't that redundant after all... Cheers!]


    Jesse Jenkins said...

    Jigar brings up another excellent point that I overlooked. President Bush has promised to make regulation and permitting easier for the nuclear, coal and oil refinery industries, but has done little to break down similar barriers for the wind and solar industries. Another clear indication of exactly where Mr. Bush's priorities really lie.

    Heiko said...

    Don't worry about the delay. One of the things I like about blogs is that one doesn't have to be so slavish about reporting "news", ie what happened during the last 24 hours. In-depth analysis takes time.