Energy Sources: History, Selection, and Transitions

Development and Transition

Vaclav Smil of the University of Manitoba states that "energy transitions are deliberate, protracted affairs…that span generations." He also notes that the energy of today is produced primarily by inventions of the period from 1868 to 1914: steam turbines, internal combustion engines, thermal plants, and hydroelectric generators, along with gas turbines and nuclear reactors of the 1930s and 1940s (174). Numerous improvements have been made to increase efficiency and reliability, as well as bring down costs, but the major advancements took place 60 to 140 years ago.

Today in the U.S., the research and testing of an innovative idea requires funding from a private investor, a research group, and/or the federal government. Feasibility studies and the building of a pilot plant draw the attention of investors. New industries (along with established ones) benefit from federal subsidies and tax credits.

Our interest in energy independence and non-fossil fuels follows the price and supply of oil (175) (Figure 14). Expensive oil or an unstable supply causes developed nations to buy less foreign oil and to develop conservation measures and alternative fuels (37). Low prices maintain the status quo.


Figure 14. Oil prices, 1861 – 2006.


After the oil embargo of 1973, the federal government began funding research in alternative fuels and renewable energy with the Solar Energy Research, Development, and Demonstration Act of 1974 (176). Funding by the U.S. Department of Energy was also made available for the development of ethanol from corn and cellulose, biodiesel from soybeans and algae, and geothermal and wind energy (84, 176). The Public Utilities Regulatory Policies Act was approved in 1978, which promoted cogeneration (dual-purpose electrical plants), renewable energy, and small-scale power projects (176). Subsidies and tax credits for biofuels and other sources were also established. These efforts promoted the commercial-scale development of ethanol, biodiesel, solar, and wind power plants. But many programs were dropped when the price of oil fell in the mid-1980s. Many ethanol producers went out of business by 1985 (176). Interest and federal funding for alternative sources declined through the 1990s.

Here is an example of this dilemma: In order to reduce our dependence on foreign oil, Texas oilman T. Boone Pickens has been promoting a plan to install wind farms throughout the Great Plains, along with a new power grid (47). This would allow for a shift to compressed-natural gas-powered vehicles, primarily trucks, buses, and utility vehicles, by freeing up 20 percent of the natural gas used in electrical power generation. He points out that natural gas is a cleaner fuel than gasoline or diesel, and that the U.S. has large natural gas supplies. Due to the recent drop in natural gas prices and the credit crisis, however, Pickens’ plan for his own 4,000 MW wind farm in Texas is now on hold (177).

In a 2008 interview, author Thomas Friedman indicated that a floor price for crude oil would encourage investments in alternative energy (178). He states that the government must reshape the market and promote alternative fuels by making fossil fuels more expensive. "Because leaders write rules, rules shape markets, markets give you scale" (178). A cap-and-trade program for carbon emissions or a carbon tax would also make cleaner fuels more competitive.

When asked why the U.S. has not led in the use of new energy sources, editor and author Fareed Zakaria said in the same interview, "The rhetoric we hear is that the market should produce new energy technologies. But the problem is, the use of current forms of energy has an existing infrastructure with very powerful interests that [have]… ensured that the government tilt the playing field in their favor, with subsidies, tax breaks, infrastructure spending, etc." (178).

In Europe, Brazil, and Japan, governments, not the markets, have led the way in energy development (179, 175). Worldwide, governmental policy support comes in several forms, including targets and mandates, feed-in laws, capital investment subsidies, long-term production tax credits, and public financing and loan guarantees (116). In 2007, 66 countries had policy targets for renewable energy (116).

Recently in the U.S., federal and state mandates for the use of ethanol and electricity from renewable sources have been approved, including the Energy Policy Acts of 2002 and 2005. About one-half of the states now have energy portfolio standards that require the use of clean energy. The American Recovery and Reinvestment Plan of 2009 includes a provision ensuring that 10 percent (vs. the current five percent) of the nation’s electricity be generated by non-hydro renewable sources by 2012, increasing to 25 percent by 2025 (180). A new, comprehensive federal energy policy is being developed. This will encourage investments in both power grids and energy sources (181).

In spite of the recent developments, Vaclav Smil is skeptical that a transition from fossil fuels to renewables will be made for many decades (182). He points out that the scale of the shift is enormous, considering the huge amounts of energy involved (see also 43 and 183). Also, we are attempting to move from high energy-density fuels like crude oil (at 42 MJ/kg) and coal (about 25-30 MJ/kg) to fuels that contain less than half that amount. Many more and larger production facilities would be required, and a large amount of land would have to be dedicated to energy production. Also, the problems of intermittency, energy storage, and distribution have yet to be solved on a large scale. Still, Smil states that these hurdles can be crossed with investment and determination (182).

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