In a Sputnik moment, the U.S. could develop the ‘capacity’ for energy independence

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Print this page by Edward L. Flippen

President Barack Obama declared it’s a “Sputnik moment” in his State of the Union address.  He’s absolutely right, at least with respect to America’s energy policy.

As war erupts in Libya, civil unrest continues to brew in the Middle East and the world reels from Japan’s earthquake, tsunami and nuclear disaster, no one knows what tomorrow will bring.
One thing we do know – Americans’ demand for oil will continue to grow.  We already consume 19.6 million barrels of oil a day, half of which are imported. About 45 percent is for gasoline, 15 percent is for diesel, heating and jet fuel, and the rest is used to manufacture a diverse array of products including plastics, synthetic rubber and food additives.

The U.S. Energy Information Administration estimates that U.S. demand for oil will increase from approximately 20 million barrels a day in 2011 to 28 million barrels in 2025. 
The obvious answer to U.S. vulnerability is energy independence.  The difficult question is how to do it? 

If there is an answer, it’s the tried and tested American way.  We need to bring together our best and brightest, harness the limitless capabilities of our research institutions and invest whatever it takes.  The result would not be that much different from the actual Sputnik experience: the creation of billion-dollar industries, new technologies with applications heretofore unimaginable and, critically important in the fragile American economy, thousands of new jobs.

The events that followed the 1957 launch of the Soviet Union’s small earth-orbiting satellite galvanized the U.S. to respond. With the subsequent creation of NASA, the race was on, and we broke new ground launching astronauts into outer space. Their spaceships orbited earth, and ultimately these pioneers walked on the moon.
As the president acknowledges, the Sputnik moment is upon us again.  There is a new race before us — this time challenging our ability to ensure critical energy supplies — critical for a robust economy and critical for our national defense. 

Unfortunately, past commitments have left us at the back of the pack.  Seven U.S. presidents have signed legislation to foster energy independence, starting with Truman in 1946, Eisenhower in 1954, Nixon in 1973, President Ford in 1975, Carter in 1978 and George H.W. Bush in 1992.  Next, between 1993 and 2001, President Clinton announced initiatives to stabilize greenhouse gas emissions and increase sustainable energy technology.  In 2005, President George W. Bush signed another Energy Policy Act aimed at encouraging energy efficiency and conservation, promoting alternative and renewable energy, reducing U.S. dependence on foreign energy sources and promoting nuclear energy.  In 2007, President Bush signed the Energy Independence and Security Act, which increased automobile fuel economy standards, provided taxpayer funding for biofuel development and revised standards and provided incentives for increased energy efficiency in public buildings and lighting. 

Most recently, in 2009, President Obama signed into law the American Reinvestment and Recovery Act, a $787 billion economic stimulus package that provides, among other things, energy development incentives such as tax credits, direct grants and financing assistance.  Clearly, desirable outcomes from decades of energy-related legislation include less reliance on foreign oil, reduction of greenhouse gas emissions, an increase in clean coal technology and a more efficient, reliable and secure transmission grid. 

Despite these efforts, there has been only a marginal improvement in energy security.  While America constantly rethinks its energy policy, other countries are moving ahead to develop “green” technology for their own internal deployment and to export.  For example, India is developing cutting-edge wave technology with pending construction of a tidal power project, and Denmark continues to outpace the United States in offshore wind-installed capacity produced by nine offshore farms and more than 300 turbines. One U.S. company, Chevron,  is the largest producer of geothermal energy in the world; however, the company’s prominence is mostly because of its operations in Indonesia.  Meanwhile, Iceland is the world’s largest exporter of geothermal technology and expertise, and Germany produces 17 percent of its electricity utilizing solar, wind, hydro and bio gas generation sources compared to 8 percent in the U.S. 

First Solar Inc., a company based in Tempe, Ariz., recently announced the largest solar project in the world in a joint venture with China.  Although this investment by China in “green” technology ultimately will be subsidized by taxpayers in the U.S. and other western countries where it’s exported, even China is moving forward in the development —  in fact, investing nearly double what the U.S. invests in “green” technology.

Nothing less than a Sputnik response is required by the president and Congress to catapult the U.S. to the forefront in the race for energy security and independence.  And a Sputnik response does not imply enacting climate legislation that could potentially jeopardize an already fragile economic recovery.  Providing for U.S. energy security requires a Sputnik moment of “technology commitment” —  technology that will provide the U.S. with energy independence while cleaning up the air, land and water for our children and their children, and ensuring energy for our national defense.

President Obama said in a speech on energy security at Georgetown University on March 30 that it’s a “tumultuous time for the world.”  How right he is.  We are at war in Afghanistan and Libya, and we are nurturing protests in other parts of the Middle East — protests of governments the U.S. has been dealing with for decades.  Even if democracies emerge, no one can know what type of government these protests will produce — witness the election of Hamas in Palestine in 2006.

At the same time, a U.S. ban on off-shore drilling along the Atlantic and Pacific coasts, a moratorium on deep-water drilling in the Gulf, decreasing shipments on oil supplies through the Trans-Alaska Pipeline system and only a 60-day supply in the Strategic Petroleum Reserve all threaten to disrupt America’s supply of energy produced by fossil fuels.  Meanwhile, world oil prices percolate near $100 a barrel and regular gas in the U.S. is at or near $4 a gallon at the pump.

President Kennedy’s goal to close any illusion of a space technology gap between the Soviet Union and U.S. was met with Neil Armstrong’s “one small step for [a] man; one giant leap for mankind.”  Today, President Obama has established the goal of 80 percent of U.S. energy coming from clean generation sources by 2035.  We can do it with U.S. technology or by importing the technology.  The president has made the choice about “clean energy.”  Now, the choice is whether to be a clean energy developer and “exporter” or to be a clean energy “importer,” particularly given that the EU and others are rethinking their energy policies in light of the devastation in Japan.  In fact, Japan Prime Minister Naoto Kan recently announced that his country’s energy policy needs to “start from scratch.”  Surely, the opportunity to catapult the U.S. to the energy (including nuclear) technology forefront is now, i.e., this is a “Sputnik moment.”  Respectfully, the ball is in the president’s court.
1 http://www.eia.gov/renewable/annual/trends/

Flippen is a lawyer for McGuireWoods LLP in Richmond and a lecturer in Energy Regulation and Policy in the Nicholas School of the Environment at Duke University and, in the fall, at the University of Virginia School of Law. He’s also an honorary senior research fellow in the Durham Energy Institute at the University of Durham, England.

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