Fueling the Future
Air Date: Week of April 16, 2004
Energy specialist Arjun Makhijani says that the Bush administration currently has no comprehensive energy strategy at a time when the U.S. needs one most. He talks to host Steve Curwood about the future of energy supply and production, and why he finds most promise in wind as an energy source.
CURWOOD: Welcome back to Living on Earth. I’m Steve Curwood. This week, we’re focusing on the nation’s energy policy and politics. So far, we’ve talked mostly about the politics and the controversy over the secret records of the White House Energy Task Force led by Vice President Dick Cheney.
Now we turn our attention to the future of energy production and use in the United States. Joining me is Arjun Makhijani. He’s president of the Institute for Energy and Environmental Research in Takoma Park, Maryland. Arjun, what kind of policy came out of the task force led by the vice president?
MAKHIJANI: Well, you know, the Bush administration, actually, I think, did one service, whether you agree with the content of the Energy Task Force work or not. It’s that they, for the first time since the Carter administration, they put energy policy in the center of the national agenda. But really nothing much other than lawsuits have come out of that Energy Task Force because we still don’t have an energy policy. The Bush administration has tried to get an energy bill passed, but it’s been too controversial, too divisive to get anything done.
CURWOOD: Well, but surely the administration does, in fact, have a de facto, if not explicit, de jure policy. What is the operating policy of the administration at this point?
MAKHIJANI: Well, the operating policy is to leave it to the oil and coal companies, and they’ll supply whatever energy is demanded. And, as a result, oil imports are going up and the use of coal is going up. And what the government is doing is relaxing the standards for air pollution to allow the suppliers of energy to generate as much and use whatever fuel they find convenient. They’re also relaxing the vigilance in regard to re-licensing of nuclear power plants, and we may actually see new nuclear power plants for the first time ordered since 1978.
CURWOOD: All right, now talk to me a bit about the supplies for the non-renewable energy. First, tell me about natural gas.
MAKHIJANI: Well, we consume an enormous amount of natural gas. Most of it is domestically produced and some of it comes from Canada. So, natural gas, for the moment, actually happens to be in fairly tight supply because in the last few years more and more of the electric power plants that have been built have been using natural gas as a fuel. A few years back, natural gas was quite cheap. It’s still fairly cheap but natural gas prices have approximately two and a half times or tripled in the last couple of years. So these power plants that use natural gas, actually, are now producing fairly expensive electricity and have pushed the natural gas supply against a very tight demand.
CURWOOD: What about what’s in the ground? Is there plenty of it around for us to use for the years ahead or is it something that might go away fairly soon?
MAKHIJANI: Well, there is a fair amount of natural gas in the ground, actually more than oil, both in North America and around the world, according to current estimates. However, some of it is like oil, it’s in remote areas like Alaska and the northern territories of Canada. And there’s some available in the continental United States, but a lot of it is being produced in environmentally unsound ways.
There’s been particular attention to the environmental damage from what is called coal bed methane, where you have large reservoirs of methane, or natural gas, associated with coal. And then it’s being pumped out of there along with pumping out very, very vast quantities of water that are just discharged onto the surface, causing a fair amount of damage. And so, right now, natural gas production is being pushed in the United States in fairly environmentally damaging ways from new sources.
CURWOOD: Let’s talk about oil, and particularly about oil supplies. Recently, I heard that some of the large companies are having to restate their reserves to say that they have less oil than they thought, to be able to refine and sell to customers. Just how much oil is there out there?
MAKHIJANI: There’s actually, in my opinion, a lot of oil in the world. This doesn’t mean oil is a limitless resource – it’s not. There are about a trillion barrels of proven oil reserves in the world, and there’s a lot more there in areas that have yet to be explored.
For instance, the proven reserves in Iraq are estimated to be about a 100 billion barrels, but most of Iraq hasn’t been explored yet, and it’s geologically known to be favorable in terms of oil. And there’s probably another hundred billion there. It’s the same in Saudi Arabia. Saudi Arabia has about 250 or 260 billion barrels of proven reserves but, really, the pools of oil in Saudi Arabia are so vast that all that oil is being produced from only three pools in a very limited area. And most of Saudi Arabia hasn’t even been explored because it’s so expensive.
And so, I think there’s actually quite a lot of oil in the world, unlike many other environmentalists. We have a very big problem that’s somewhat different. I think we’re going to run out of the capacity of Mother Earth to take carbon dioxide from oil burning a lot before we run out of liquid fuels.
There are, of course, some oil reserves in the United States but the U.S. is one of the places where there does not appear to be, at least economically, recoverable large, new sources of oil. The Alaska National Wildlife Refuge has, probably, quite a bit of oil but it’s not enough to make a significant dent in the U.S. consumption scene.
CURWOOD: So, be clear. How much oil is there?
MAKHIJANI: Well, it could produce a million or a million and a half barrels a day. But oil consumption in the United States is increasing at about two percent, which is 400,000 barrels a day every year. So, just the growth in oil consumption would swallow up the additional production from Alaska in a year or two.
Now, there’s where oil profits, I think, have been very central to dictating the debate. Because, while it won’t make much security difference in terms of imports, even if the reserves are only five billion barrels, and you make five dollars of profit per barrel, that’s still 25 billion dollars of profits. And that’s a lot of money.
CURWOOD: Just briefly, speak to me about central Asia oil and the politics that are involved, perhaps, with getting that oil.
MAKHIJANI: What is going on now in central Asia is actually very dangerous because all of the five nuclear weapons states who are permanent members of the Security Council have their eyes on the oil and gas in the region. The United States, France and Britain as part of the European Union, and the rest of the European Union, China. And Russia actually doesn’t need the oil, it’s an oil exporter, but it’s interested in controlling the oil because it doesn’t want people – states – from outside the region to control those resources.
And so, there is actually the old version of the great game, what was called the great game in the 19th century, for control of central Asia that is going on now. But all of the five states that are supposed to be looking after world security as members of the Security Council are actually competing with each other for control of central Asian oil. And they’re all nuclear armed, so I think it’s more of a touchy situation than most people realize.
CURWOOD: I’d like us to turn to coal now. As I understand it, there’s plenty of coal here in the United States, that there’s more than adequate supply for hundreds of years. And we get half of our electricity from this. The coal industry has said let’s use our asset, and that they can clean up coal so that we’ll be burning clean coal in the future. What do you think of that assessment?
MAKHIJANI: Well, you know, we do rely on coal a lot. And I think we’re going to continue to rely on coal to some extent for some time. The energy system is a big economic ship that is very difficult to turn around in a short time. I mean, nuclear energy contributes much less than coal but, you know, a lot of people would like to see those power plants shut down. But you can actually not do that overnight. It would collapse the electricity grid in Illinois, for instance, or in parts of the south of the United States.
It’s going to be difficult to reduce coal consumption even though coal is a primary contributor to greenhouse gas emissions from the United States and in other countries – in China and Russia and India, for instance. Some aspects of coal use can be cleaned up. You can install sulfur dioxide scrubbers, and that has been done. But it’s very difficult to actually clean up some of the problems associated with coal mining, like mercury and so on, and the damage that is done to sensitive environments as, for instance, in the Appalachians and so on.
I do think that coal does carry a security value for the United States. I think that it should not be completely eliminated from the energy scene but reduced significantly. Because it is a kind of hedge against the many security issues associated with the import of energy.
CURWOOD: What about nuclear power? It doesn’t add to global warming, and there are new technologies that people say are much safer than what we’ve had in the past.
MAKHIJANI: The issue with nuclear energy is that Main Street doesn’t like nuclear energy, and Wall Street doesn’t like nuclear energy. The bankers just don’t want to finance new nuclear plants because they’re too risky and too expensive. Not too risky, necessarily, in technical terms – they’re too financially risky.
The administration has – and the Clinton administration before it, also – relaxed the rules for extending the licensing of existing power plants. And I believe that’s also a kind of sleeping risk because the Nuclear Regulatory Commission is relaxing its safety vigilance, and it’s re-licensing these power plants for 20 more years beyond their licensed life without actually doing thorough inspections for leaks, for cracks, for system stresses.
As a result, those companies that own nuclear power plants, and have kind of written off the capital cost to the consumers, are now making money hand over fist. It’s true that nuclear power plants don’t emit carbon dioxide and this is big advantage. However, there are other ways to deal with getting rid of carbon dioxide emissions.
CURWOOD: Arjun, let’s talk about renewable energy now. What would you say the role of wind should be in a national energy strategy here in the U.S.?
MAKHIJANI: Well, let’s look at the size of the resource. Just in the Midwest and the windy belt – North Dakota south to Texas – the total amount of wind energy available is about two and a half times the total electricity generation in the U.S. Or, if you want to compare it to oil, it’s about as much as all the oil production in all the members of OPEC, the Organization of Petroleum Exporting Countries. So it’s a very, very, vast resource that I think could be central to addressing many of the energy policy and environmental issues that we have today.
CURWOOD: Well, if there’s this much wind, as much wind in this country as all of the oil that OPEC pumps, and it’s cost effective – why don’t we have it? Why don’t we have a wind industry here like is growing in Europe?
MAKHIJANI: Well, I think there are a couple of reasons. One of the central reasons is that, you know, the windy areas are in North Dakota and South Dakota and in the panhandle of Texas and so on. You actually have to collect that wind electricity with a transmission infrastructure and build a grid that’s good enough and strong enough. You know, one of the things that we learned in the California energy crisis or in the Northeast, is that we have bottlenecks in electricity grids in the United States. And unless we address the transmission issues, we’re actually not going to be able to harvest this wind energy and bring it to the consumers because it is dispersed. It can be done.
CURWOOD: How much would all this cost?
MAKHIJANI: Well, you know, it would cost a lot of money. It depends on how much wind energy you want to harvest. The question is – would you see, would Steve Curwood see a difference in his electricity bill if we did this? And the answer to that is no. If we harvested wind energy properly and built the transmission lines, the final consumer cost would not change.
CURWOOD: What interest is there in wind energy development in the Bush administration?
MAKHIJANI: Well, they’ve had some. They have asked to continue the kind of a tax subsidy to wind energy called the production tax credit that was in the energy bill and now is in some other legislation. We don’t lobby so I don’t remember the name of the legislation. But they have tried to include the previous sort of tax credits for wind energy. But they haven’t gone out to bat in new ways, in the really big way for wind energy that I think it deserves. When you look at the Cheney energy plan, there was some discussion of wind energy but the transmission infrastructure as it was proposed in the energy plan was not really linked to the development of wind energy compared to its potential. The infrastructural questions were mostly related to the interests of existing electricity generators who depend on coal and gas and nuclear, and towards oil.
CURWOOD: Let me ask you about solar energy. You’re very excited about wind energy, but not terribly excited about solar. Why?
MAKHIJANI: Well, it’s not that I’m not excited about solar energy. It’s that solar energy is still pretty expensive and it needs different kinds of policies and has different kind of potential. A little bit of solar energy can actually be married to wind energy in desertic areas like Arizona and semi-desertic areas like New Mexico because sometimes when the wind doesn’t blow you can complement it with sunshine. But you can’t do that very much because solar cells are still very expensive.
At present, we have extremely pressing environmental and security problems associated with our present energy system. And these problems are on the time scale of five years and ten years. And we need large scale efficiency improvements and large scale deployment of new energy sources that will alleviate these problems with oil and natural gas and coal and nuclear. And the only other large energy source that’s out there that can do that is wind. And so I think the potential of wind can be realized in the short term, and solar energy can become a very good partner to wind energy but it’s going to take more time.
CURWOOD: Arjun Makhijani is president of the Institute for Energy and Environmental Research in Takoma Park, Maryland. Thanks so much for taking this time with me today.
MAKHIJANI: Thank you so much, Steve, for asking me.
[MUSIC: Frifot “We Sold Our Homesteads” SUMMERSONG (Caprice Records – 1999)]
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