In This Issue
Our Energy Future
June 1, 2002 Volume 32 Issue 2

Powering the Future

Saturday, June 1, 2002

Author: Pete Domenici

President Bush’s decision not to sign the Kyoto Protocol was good for the energy future of the United States.

Although energy policy has taken a back seat since the terrorist attacks of September 11, the attacks highlighted weaknesses in the ability of the United States to withstand challenges to critical infrastructures. These attacks will force us to redouble our efforts to protect our population and the dependent infrastructure. Energy is in the class of systems to which we must direct careful attention to identify and mitigate threats.

In a sense, the attacks of September 11 set a new standard against which future terrorist activities will be judged. Unfortunately, we can be sure that terrorists will now set their sights on causing even greater disruption, loss of life, and human tragedy. That goal may, unfortunately, draw them towards using weapons of mass destruction or towards attacks on major nodes of our infrastructure on which many lives depend.

And yet we can't lose sight of our continuing energy challenges. Last year, blackouts in California were front-page news, and there was much talk about the crisis in energy. The situation has eased since then thanks to mild weather and increased conservation. Some have argued that the Senate should reconsider its stance toward the Kyoto Protocol, but the Kyoto Protocol is more of a political document than a serious attempt to solve a serious global issue.

The very real impact of terrorism will depress economic, and as a derivative, energy growth for a period of time. Although the urgency of an energy crisis has abated somewhat, the basic facts haven't changed. This nation and the world are facing immense shortfalls in energy in the short term and even more so in the long term.

Global Prosperity
World population will grow from the current 6 billion to around 10 billion in the next 50 years. The population of undeveloped nations will double from 4 to 8 billion in 50 years. Even if increases in per capita energy use around the world are modest, global energy needs will skyrocket. Some have argued that it is wrong for the United States, with 4 percent of the world's population, to account for about 25 percent of the world's GDP. Such arguments miss the point. America should be celebrating the strength of our system and our economy, which provides a standard of living that is the envy of the world. Even with the current setback in economic growth, the United States has a marvelous economic engine.

Certainly many elements have supported American growth--a free, democratic society; a judicial system that roots out corruption; a strong banking system; a strong middle class; and an innovation system in which entrepreneurs can explore new ideas for new products. A fundamental element of our economic strength has been cheap, reliable energy. Without energy, the U.S. economy would collapse.

In one respect, we can agree with those who criticize America's share of the world's GDP--namely that the United States should be helping to build up the economic strength of the rest of the world. America should be sharing its experiences and helping other nations strive towards our standard of living.

There are many reasons for wanting the economies of the world to reach our standards. For one thing, the American economy depends on having strong trading partners, and countries with high standards of living need the high-tech products that our companies produce. In the long run, a prosperous world with higher standards of living for more people may be the best possible defense against global terrorism.

Kyoto Protocol

By 2010, the Kyoto Protocol would place strict caps on greenhouse gas emissions for developed countries, especially the United States. Careful evaluations of the targets for the United States have shown that they would simply not be achievable without crippling the American economy. Kyoto puts no restrictions on greenhouse gas emissions of developing nations, despite the fact that their emissions will soon exceed those of developed nations. Kyoto would have the effect of crippling the American economy in favor of other economies of the world. That's why the Senate voted 95 to 0 on the initiative led by Senators Byrd (D.-W.V.) and Hagel (R-Neb.) to reject the Kyoto Protocol, even before it was submitted to Congress.

Despite the headlines in the media about President Bush's announcement, all he did was restate the conclusion of the Senate. It's interesting that many of the senators who have criticized the president were part of that unanimous vote. If there is any doubt about the political nature of the Kyoto Protocol, one need only examine the recent Bonn meeting on that subject. At that meeting, there were still no limits on emissions from developing countries, but the penalties for developed countries that fail to meet their targets were dropped. In addition, one of the best options for new energy without greenhouse gases, nuclear energy, was dropped from consideration. It seems amazing that, at Kyoto, the Clinton administration managed to conduct the entire negotiation without ever mentioning nuclear energy. At least it was mentioned at Bonn, but only to ban its use in meeting emission targets. Consider also that France supported the Kyoto Protocol and the Bonn agreements, despite the fact that France generates 76 percent of its electricity from nuclear energy. These observations confirm the harsh reality that the Kyoto Protocol is nothing more than a sadly flawed political document, not a realistic path to solutions.

Prosperity beyond Kyoto
The U.S. Senate should stop arguing over "who lost Kyoto" and congratulate itself for not being trapped into signing it. At the same time, the Senate must recognize that the goal of limiting global greenhouse gas emissions is appropriate and begin to look for credible approaches that will not destroy the American economy. America needs to provide a blueprint for the world that identifies tools to combat global warming. Growth and prosperity in America are possible without global warming, and Americans can help provide those same benefits to the rest of the world.

As a country, America should provide worldwide leadership in eliminating the threat of global warming by making a long-term commitment to the development and use of clean energy sources. This goal should be accomplished through partnerships with our friends and allies, especially in developing countries. President Bush should lead this new initiative by accelerating American research and building international partnerships for joint development of clean sources of energy--renewables, clean fossil fuels, nuclear energy, and hydrogen-based fuels. As the United States transitions to improved technologies, its partner nations would also be building up their energy infrastructures with the latest and cleanest technologies.

America should seize every opportunity to help developing nations around the world achieve much higher standards of living, but they simply will not be able to do that without reliable electricity supplies. Each nation should make its own choices of energy sources, exploiting its own strengths. For example, America has abundant natural gas--which will make a huge contribution to a cleaner future. Other nations may be well positioned to exploit solar or wind resources. At the same time, every nation will need diverse energy supplies and must not rely on a single energy source. Through this program each nation could make its own choice.

America has a choice. We can leave the poorest countries to their own devices and let them develop whatever energy they can, or we can offer substantial help and partnerships to help them develop sources that are not only reliable and reasonably priced, but also clean. It's in America's best interest to do this because, in the end, we all share the same air. And, as noted earlier, countries with strong economies will be our best trading partners.

"Beyond Kyoto" Legislation
The Senate is working on legislation towards this vision. A recent Senate bill would set aside $1 billion in loan guarantees to provide clean technologies for other nations. The bill would also establish joint research programs with developing nations to help them evaluate clean technologies. The proposal specifically favors projects in developing countries. For a developed country, the bill would require that, in a joint program, the other nation match the U.S. contribution. For a developing country, the U.S. would fund the research program and cover 90 percent of the loan guarantee costs. With this vision, America can achieve global "prosperity beyond Kyoto" and help other countries develop and use clean energy sources as they build their economies. As we move away from rhetoric over Kyoto's impossible short-term goals, we must build a solid foundation for long-term progress--a foundation that promises global prosperity.

Energy in the United States
We must focus not only on international energy issues, but also on our own energy policy. Our country and president were criticized at the recent meeting in Bonn because America generates 25 percent of the world's greenhouse gases--gases that are increasingly suspected of causing global warming. Many world leaders voiced concerns about the president's statements against the Kyoto Protocol.

Let's look at the record more closely. It's true that our 4 percent of the world's population generates far more than 4 percent of the greenhouse emissions. If you consider that America produces 25 percent of the world's GDP with about the same percent of global greenhouse gas emissions, you would draw difference conclusions.

Critics argue that America has not done enough to reduce greenhouse gas emissions--and they are right that a lot more can be done. But we have made immense strides that we should be proud of. We have also demonstrated that far greater efficiency is possible. In fact, since 1973, the U.S. economy has grown by 126 percent, while energy use has increased by only 30 percent. Critics who argue that we must hobble our economy to cut greenhouse gas emissions are way off base.

America can have prosperity and cut its emissions. The president's National Energy Policy describes research programs and tax credits to do just this. The recent Energy and Water Development Appropriations bill approved by the Senate provides excellent research funding. The president has been criticized because his National Energy Policy does not emphasize energy efficiency and conservation. But the critics are wrong. The National Energy Policy places a tremendous emphasis on energy efficiency. For example, if the current ratio between energy use and GDP were maintained, 77 percent more energy would be required by 2020. But the policy supports strong measures to improve efficiency and projects that we would actually need only about 29 percent more energy.

That National Energy Policy also addresses the very serious problems of the supply side of the energy equation. Estimates are that consumption of crude oil alone will increase more than 30 percent by 2020, with a disturbing fraction of that oil coming from regions of the world where the war against terrorism may disrupt supplies. And demand for natural gas is projected to grow dramatically as large numbers of new gas-fired electricity plants come on line.

Domestic oil production does not come close to meeting America's needs; in fact, it's down 40 percent over the last 30 years. In that same period, imports increased by a factor of 2.5 to about 57 percent. Our ability to refine oil appropriately has also declined; in the last 20 years, total refinery capacity has declined by more than 10 percent.

The Nuclear Option
There is one important option for increasing the production of clean energy that cannot be ignored--and that is nuclear energy, which already accounts for more than 20 percent of American electrical production. Nuclear energy provides this power without emitting airborne pollutants, with amazingly high reliability, and with costs even lower than coal.

Estimates are that, despite significant efforts to improve conservation and efficiency, we will still need to increase our electricity capacity by about 45 percent over the next 20 years. There can be no doubt that nuclear energy must be one key mode for meeting our future electricity needs. There are no credible options available to take its place.

Extensive legislation has been developed in the Senate to support and encourage future nuclear energy development. The legislation includes provisions supporting current nuclear plant operations, new plants, fair evaluations of nuclear energy, and better solutions for nuclear wastes.

Our current national policy for handling spent nuclear fuel is simply to put it in a permanent repository. The argument that this approach best serves our nation is not persuasive. After all, "spent" fuel still contains at least 95 percent of its initial energy content, and technologies are available to recycle that fuel and extract significantly more energy from it. These advanced approaches can not only recover the energy content, but can also dramatically reduce the toxicity of the final waste products.

Research and development are being done on advanced fuel cycles that could provide dramatic future benefits to taxpayers. These might involve reprocessing, now done routinely in many countries, and a process called transmutation, through which the toxicity of the final waste form placed in a permanent repository can be reduced to below the level of toxicity of the original spent fuel. The goal is to make waste products no more hazardous than the original uranium ore. The physical principles underpinning reprocessing and transmutation are sound, but the details of the economics and environmental impacts require further study to determine if this is the best path for our nation.

The Senate has advocated research and development on new types of reactors, such as Generation IV reactors, which would be very different from current reactors. They would be passively safe and absolutely incapable of a meltdown no matter what the circumstances. They would produce less waste and be more resistant to proliferation than our current reactors. They could also be much smaller than current plants, which means they could be buried to render them invulnerable to terrorist threats. They could be simple enough to be mass produced in factories. Cost projections suggest that these systems could rival the costs of natural-gas-fired plants.

There's no simple panacea for addressing the world's future energy needs or even those of just our country. The immense challenges facing the United States and the world will require careful attention to production, conservation, and efficiency. Where production is needed, we should focus on options that produce emissions as close to zero as possible. Nuclear energy should be a significant part of our overall energy portfolio, but the overall distribution of clean energy sources in that portfolio should be driven by the economics of each energy source.

America should seize the opportunity to move beyond arguments over the Kyoto Protocol toward strong programs to assist developing nations with new clean sources of economical energy. As we strengthen their economies, we will also be building a world in which the threat of terrorism can be vanquished and stability and peace will be possible for all peoples.

About the Author:Pete Domenici is the U.S. senator from New Mexico. This article is based on a presentation given at the Technical Session of the NAE Annual Meeting in October 2001.