Energy battle raging in U.S., former energy czar says, The Trucker10/01/05
BOSTON — There's an energy battle raging in the U.S., plain and simple, former Secretary of Energy Spencer Abraham told delegates to the American Trucking Associations' Management Conference and Exhibition on Oct. 17.
"We have on one hand a virtually infinite level of demand and on the other side we have a limited amount of resources that can be attained and developed in affordable level," Abraham said as he delivered the conference's keynote address.
And standing right in the middle of the fray are a number of self imposed constraints that are fueled by the "political process" and the "not in my back yard" mentality of many Americans, the latter a faction led by those who want more energy availability but don't want to be part of the production process, he said.
"Our challenge is to build new energy facilities," said Abraham, who served as energy secretary during President George W. Bush's first term. "There have been no new oil refineries built since the 1970s so there is no spare refinery capacity in the U.S."
The fact that there are no new refineries is the country's own doing, Abraham said.
"Because of environmental concerns, we have made much of our coast ines and federal lands off-limits for production of natural gas and oil," he said. "We've made it difficult to meet the growing demand levels because of the unwillingness to engage in investing in new resources and the licensing of these industries, compounded by these environmental regulations."
In addition, emissions restrictions will have a profound impact on the cost of energy produced, he said.
Abraham acknowledged that the recent catastrophic hurricanes along the Gulf Coast have sparked an extreme concern for growing fuel prices, but said the country was quickly heading for a day when it wouldn't take a catastrophe of that proportion to send prices spiraling upward again.
"The International Energy Association estimates that between today and 2030, the global demand for energy will increase 60 percent," he said. "The Department of Energy estimates the demand for oil will increase from today's 85 million barrels of oil a day to 121 to 130 million of barrels a day by 2025.
"That's a gross increase of between 45-55 million barrels a day and that doesn't take into account for natural attrition of current supply sources," Abraham said. "If you ask any expert where that's going to come from, I haven't found anyone who can give a clear answer to that question."
Abraham also said it was important for the U.S. to develop more nuclear power resources.
"Today, 21 percent of power in our country comes from nuclear power," he said.
"Because there have been no new power plants built since 1970, by 2020 that percentage will decline to 14 percent and when those plants run their lifetime, it will fall to zero."
As those percentages fall, power companies will turn to oil and natural gas to generate electricity, further stretching the oil supply.
"The bottom line is this," Abraham said. "For too long in this country, because energy was available and affordable, we have not made tough decisions to make the energy supply stable and affordable."