President Bush, in recently unveiling his national energy plan, warned that we face an energy crisis that could torpedo the economy, drag down our standard of living, and imperil the national security.
It all made for dramatic sound bites on the evening news, but the current “crisis,” unlike the Arab oil embargo of the 1970s, is not one of supply. It is, rather, one of price, for which the president's plan offers little hope for short-term relief, and not surprisingly, given his and Vice President Cheney's big oil heritage, is heavy on injunctions to let market forces work and to relax environmental and other regulations to allow oil, gas, and coal industries wider latitude in seeking new supplies.
Much attention has been focused on ways to make the United States less dependent on imported energy, but it's a road we've gone down before with scant success. When the '70s Arab embargo was resolved, petroleum supplies became plentiful, prices dropped, and the once-urgent goal of greater energy sufficiency quickly was relegated to Never-Never Land. Today we import 58 percent of our petroleum.
Could that figure be reduced by finding new U.S. supplies and by concentrating on greater use of alternate energy sources such as methanol, biodiesel, and nuclear? Undoubtedly. Will the United States have the resolve to do it, even though the imported oil industry again increases supply and reduces price? It's anyone's guess.
But one can reasonably expect that the petroleum industry will not exactly rejoice at losing market share, however small, to ethanol, biodiesel, and other alternate fuels that come from sources they don't own or control.
It's not that there isn't plenty of oil to fuel our SUVs/airplanes/whatever, for a long, long time. The hang-up for the United States is that the bulk of the easily-obtainable oil is in the hands of nations that can, if they wish, turn the petroleum spigot to a dribble and/or increase the per barrel price significantly (as they've done over the past year or so, helping send pump prices to record levels).
Right now, things are looking fairly good for alternate fuels. Thousands of farmers have invested in cooperatives that last year produced 40 percent of the 1.6 billion gallons of ethanol derived from 600 million bushels of corn. Almost three dozen ethanol plants in the United States are in the process of expanding their facilities, and construction of nearly that many more new plants is planned over the next two years, boosting capacity by 1.4 billion gallons. (And while opponents scream about tax breaks for methanol, consider that to the U.S. petroleum industry hasn't built a single new refinery in a quarter-century, despite some $10.7 billion in tax breaks over the last 10 years.)
One significant boost to ethanol usage could come in California, where federal clean air regs require the use of gasoline with an oxygen-enhancing additive, either ethanol or MTBE (methyl tertiary butyl ether). But because of concerns about MTBE contaminating groundwater supplies, the state plans to ban its use starting the first of 2002. A bill has been introduced in the senate to phase out MTBE completely over three years and require that by 2011 fuel for cars and trucks contain at least 3 percent renewable energy such as ethanol. That would rise to 5 percent by 2016. Boosting ethanol production to meet the 3 percent energy content would require 3 billion bushels of corn.
Although most of the focus on ethanol manufacture is based on use of corn as a feedstock, it can be made from any number of materials; not widely publicized is that nearly 13 percent of the 2000 grain sorghum crop went to ethanol production, and that amount is expected to increase this year.
Several states are pushing legislation to require all state-owned diesel-powered vehicles to use soydiesel, and many cities are powering their buses with cleaner-burning biodiesel (the only alternative fuel to have passed the rigorous health effects testing requirements of the Clean Air Act).