National Energy Independence (NEI) Plan

The NEI Plan: Ending All America’s Oil Imports in Twelve Years; Ending Fossil Fuel Use by 2050 while Building a Self-Funding 21st Century Energy System

This web page is provided as a service by Fiscal Associates to the NEI Plan sponsor, IDOC/North America, Inc. Nonprofit sponsorship of “The National Energy Independence (NEI) Plan” is provided by IDOC/North America, Inc., a 501(c)(3) nonprofit educational institution incorporated in 1969 under the laws of New York State specializing in institutional programming, information exchange and issues of public policy that promote the values of free, democratic societies. All rights are retained by Fiscal Associates of Newark, Delaware.

Danger Hiding in Plain Sight

[The main graphic, mid-page below, allows jumps to anywhere in this web page. The following two columns of text form an overview.]

Thinking Macro: Goals

Macro Blindness: America's financial meltdown and its energy crisis share features. In the financial sector, there was lots of evidence; solutions were absent. With energy, solutions are overabundant. Both situations share a common theme: macro blindness.

The Energy Danger is not yet clear to all: America is headed toward unaffordable energy at a speed faster than the nation can respond. See "Thinking Macro: Dangerous Prices."

It's The Price,...: A catastrophic and permanent rise in world prices can occur in weeks. Absent WWII-style measures, ability to respond is glacial; with such measures, first stage response can be accomplished in a decade and second stage in several decades.

Missing Goals: Like the financial crisis, all the indicators are present but few leaders are recognizing the gravity or the immediacy of the danger. All manner of "plans" are proposed, few of which meet two reasonable and achievable energy objectives:

  • Independence of all 28 Q-Btu of imported oil within 12 years. [U.S. oil use in 2007, 40 Q-Btu; imports, 28 Q-Btu]
  • A totally new energy system by 2050 that encompasses supply, demand, and infrastructure; emissions to be less than 15% of 2005 levels on an "eliminated" (not "mitigated") basis, energy that is domestically sourced, flat and inexpensively priced; and a system capable of massive expansion to meet mid-century needs.

Two Questions: Thinking macro, assuming America must wean itself of foreign oil and build a new energy system, all at the same time, two quesitons emerge:

  • #1. Should the nation entrust its most strategic resource and a major source of domestic wealth to energy companies, or to any private enterprise? Energy firms are not transparent, are international, do not put the public first, and have a different objective from protecting the public: maximizing profits. These same companies have placed America in a (costs so far) $14 trillion polluting energy straitjacket and offer no price guarantees. Can the virtues of private enterprise be harnessed while keeping at bay the conflicts of interest?
  • #2. Given the recent track record of private industry in the energy sector, is any firm trustworthy or capable enough to manage the enormous size of a new national energy system?

Macro Blindness

The financial meltdown can be instructive about the energy danger. "Why didn't the experts see the financial disaster coming?" In retrospect, all the micro evidence needed was in plain sight to the public, financial operatives, and regulators. Yet, many were blinded to the overall (macro) dangers. [More] The experts (and the public) were not willing to stretch their minds around the whole problem and come to the conclusion that Herb Stein voiced many years ago: 

"Things that can't go on forever, don't."

Macro blindness is a result of false macro assumptions, the ideas about how to organize and how to draw conclusions from the micro evidence. The cure for macro blindness is rigorous rethinking of the propositions thought to be true without examination, one's core assumptions.

An example: a chastened Chairman Greenspan, once America's Oracle of Finance, said in October 2008 under congressional questioning, that--since the meltdown--he has found a "flaw" in his "ideology," his "world view of 40 years," and he has reexamined his assumptions (about the self-regulation of markets).
Too late.

In the energy sector, it is time to rethink assumptions before the meltdown, before it is too late. The current situation, poised for a fall, perhaps a catastrophic one, has a precedent.

In the 1980s, in in the wake of two oil price shocks in the previous decade, the U.S. responded with measures (many no longer available) that caused the price of oil to drop. Jimmy Carter--the last president with an energy plan--was voted out of office, the solar panels he had installed on the roof of the White House annex were removed; "light truck" laws were rewritten to exempt SUVs from the gas guzzler tax; and America abandoned its best opportunity to deal with "the energy issue" on a non-emergency basis. Instead, the nation embarked on an almost two decade-long "summer" of "The Little Piggy Whose House Was Made of Straw."

An awakening arrived in the summer of 2008, when oil prices spiked at $147 per barrel, a tenfold increase in a decade, totally missed by the DOE. The next event is likely to be much more serious. Before the recession caused drops in the world demand for oil, the second event appeared likely within six years.

Although micro indicators about the growth of China and India were in plain sight for all to see in the 1990s, the experts told the public that "there will always be oil" and opined about "the fair price," usually a lower price than the current one. xxx

Recently, a few observers--while assuring the public that "there will always be oil"--have correctly appended the dangerous words, "...at some price." In November 2008, Steven Chazen of Occidental Petroleum assured the public that there will be plenty of oil...at $250 per barrel, yet few grasped that oil at this price might destroy the economy.

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Thinking Macro: Dangerous Prices

How high a price for oil is enough to make a catastrophe? It's like asking, "How many unregulated credit default swaps and securitized toxic mortgages endanger the economic system?" The answers vary with when:
...before the meltdown? ...or after?

Using 2007 prices and volumes for oil (oil is not the only problem fuel) consider a few benchmarks for the world:

Consumption, 85 million barrels per day;
GDP, $65,610 trillion.

As a percentage of world GDP,

  • $10 oil is 1%;
  • $100 oil is 4.7%;
  • $150 oil is 7.1%;
  • $200 oil is 9.5%; and
  • $300 oil is 14.2%.

At what price per barrel does oil become a threat to the existence of the world economic order? A Princeton geologist, Kenneth Deffeyes, picked a reasonable number:

Oil production obviously cannot consume 100 percent of the world's income. My intuitive, uninformed guess is that it cannot go above 15 percent. If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy.

Moreover, world numbers based only on oil prices and volumes wildly underestimate the damaging effect of oil imports to the U.S. economy. To capture the true cost of the "oil tax" that Americans pay each day, a series of Oak Ridge national Laboratories' studies have identified three categories (plus military costs, which the ONRL economists exclude). "Wealth transfer," the tithing to the petrostates, is only about 1/3 of the ORNL total costs.

Foreign oil dependency costs America, at $100 per barrel, $0.7 trillion per year, $7 trillion for ten years. Imagine what the costs are at prices above $100, or at Mr. Chazen's $250 per barrel. Yet, these enormous numbers have not yet penetrated planners' thinking. For example, yearly $0.7 trillion costs of foreign oil dependency should be mandated in every "cost effectiveness" computation for removing dependency through wind and solar, but it is somehow omitted by the "experts." A rounding error, perhaps.

Cheap oil, even imported oil (at costs below an arbitrary level of 1% of U.S. GDP), has been essential to America's growth to great power status. However, at levels above 1% of GDP, oil represents

  • an economic drag due to the high price for oil,
  • a drag compounded by balance of payments implications,
  • a drag further compounded by the need to borrow much of its cost from the Chinese

These sum to a sea anchor effect with the consequences of a tax. Like a tax, the cumulative effect of oil dependency can slow or reverse economic progress. Americans hate taxes. Oil at high prices is not only a tax, it is a tribute tax paid overseas, often to people who despise the same Americans who pay at the pump. What is the catastrophic level? $100? $150? Mr Chazen's $250? Prof. Deffeyes' $300? We don't know, but the effects can become catastrophic. No patriot would want to expose the nation to discovering the hard way--the way Americans discovered the threshhold cost of toxic mortgages.

The signals are clear for anyone willing to wrap one's mind around the whole problem. The nation has been warned--not once (the 1970s), but a second time (summer 2008). The warnings are formal in this publication (below) and informal.

Informally, T.Boone Pickens has pointed out that oil prices will return with a vengeance as soon as the world recession ends, to over $200 a barrel--9.5% of world GDP. He is not alone, but still largely ignored. Instead, the focus of energy policy is dispersed and muddled among many "solutions," some without a quantitative nexus that relates the size of the "solution" to the size of the problem. Others focus on climate change and ignore oil dependency. Some offer "principles" without a plan. Others offer assertions without evidence. There are very few with quantitative models that relate the national capacity of a resource--wind, biomass, or natural gas for example--to the virtues claimed for it.

Plans could use the focus that follows from a clear statement of goals. The working goals for this web page are above: first, eliminating oil dependency as rapidly as possible; concurrently, building a clean energy system.

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Cover xx
The NEI Plan:
Hiding in Plain Sight (Introduciton)
Five Major National Threats:..
... Foreign Oil Dependency - $0.7 Trillion
...
Oil Shock $ 5-8 Trillion
....Oil Price Disaster-15% World GDP
....Natural Gas and Coal are Limited
....Climate Change
NEI Plan: Mandates from Threats
... End Oil Dependency in 12 Years
....End Fossil Fuel Use by 2050
Strategies
... Short-term must serve long-term
... Eliminate, Not Mitigate Emissions
... Renewables Phase Out Fossil
... Electric Cars Phase Out Gasolin
Organization
... Financed off the Federal Budget
... Job Creation for SCTL-B Plants, Cars
... Managed as a National Utility: NEIA
... Military Implications
Realistic
... "28 Q-Btu" to End Oil Dependency
... Natural Gas and Coal are Limited
Means
... Electric efficiency is essential
... Electrify Light Vehicles (3x sales)
... Renewable Infrastructure is essential
... Generation by Wind and Solar
... Heavy Trucks: SCTL to Biofuels
... Fossil Is Essential for Transition
Goals or End States
... End of Transition: 12 Years
... 21st Century Energy System
Transition Overview
Comparison with Other Plans
Documents to Download
Credits

To Recap:

  • America's foreign oil dependency exposes the nation to great risk of a pricing catastrophe. Oil--at some price--has the capability of inflicting great harm on the world's economies. Exactly which price or for how long it must hold to crash the world economy is not known. The critical range is likley about $200-$300 per barrel, about 15% of world GDP.
  • Yet, oil company executives talk of (catastrophic) $250 oil as reasonable.
  • The world fossil energy system needs $26.3 trillion just to get to 2030, yet its leaders offer no assurance of affordable prices in 2030.
  • When protecting the public from catastrophic events, hope is not a plan. Hoping that oil will not cross the $250 or the $300 threshhold is folly. Action is necessary now.

Thinking Macro: Outsourcing Energy

The nation has outsourced a strategic resource, energy, to three entities:

  • (a) International energy companies,
  • (b) Petrostate leaders who, even today, are cutting oil supplies to raise the price, and
  • (c) "International markets" that set the price of fuel, even fuels mined from U.S. federal lands.

In spite of the adminssion before Congress by Chariman Greenspan that his "ideology was wrong," some Americans still accept the unexamined assumption that "private industry" is the most efficient allocator of taxpayer resoruces.

In the case of energy, this proposition fails close examination.

Macro Motives: Reflect on the wreckage from the toxic mortgage debacle, the Enron/Arthur Anderson collapse, the refusal of banks to lend money in spite of TARP funds received, and the payment of TARP money to AIG employees for bonuses and a gold-plated conference. These actions underscore the reality that the leaders of businesses are not motivated by protection of the taxpayer. Their loyalties lie with profit and the favor of the corporate board.

By the same token, energy company executives are driven by quite different rewards and motives than simply using the resources in federal lands for the best interest of the citizens to whom the resources belong. Their interest is in extracting profits from the resources, their high compensation, and maintaining the support of the corporate board.

Macro Accountability: Ask, as have recent Congressional committees, why a particular federal gas or oil lease has not been drilled and the answer will be that it is none of the taxpayer's business. Ask for disclosure about finances. Imagine the answer: "Sorry, that information is proprietary."

While such responses are legal, a macro question is in order: national resources belong to the citizens of the nation; what specific performance of the energy companies and the petrostates gives Americans confidence that the nation should entrust a strategic resource--energy--to unaccountable middle men whose loyalty is not to America's citizens, but to maximize profits?

Macro Goals: Given the two goals listed at the outset,

  • (a) Elimination of oil dependency in 12 years
  • (b) A 21st Century energy system.

Does the fossil system show the potential to achieve either goal?No. What can it promise? It can only deliver, at fluctuating and ever-higher prices which are determined offshore, barely enough fuel to serve Americans. Neither of the two goals are met by the fossil system.

Magic: Thinking macro, ask what magic is there in "private business" or "world markets" that automatically serves the citizen best? Is it not reasonable to look at what value a citizen receives for each dollar spent on energy?

Thinking Macro: Value Received

Trends, for all to see: Fossil fuel costs per unit energy, by any measure, have risen sharply over the last decade and are likely to divert more and more of the nation's wealth. At the same time, the world will need $26.3 trillion of capital investment just to get to 2030 (not 2050). America consumes about 1/4 of world supplies; thus, its share is $6.6 trillion by 2030. This figure is on top of the ~$14 trillion already spent on the existing fossil infrasturcture such as wells, tankers, pipelines, mines, refineries, coal trains, and storage. Total capital for the U.S.: $20.6 trillion, paid by citizens at the pump and the plug.

Performance: In return for this money, the middle men to whom America has outsourced energy supply--the energy companies and the petrostates--have achieved the following:

  • The fuels sold to the public are related to global climate change, cause environmental harm [one model shows 17,000 premature deaths each year due to coal-fired electrical plants alone], yet do not compensate vicitims.
  • Prices are out of U.S. control, even for fuels extracted from U.S. lands. "World markets," nudged by OPEC production restrictions, determine price.
  • The profits of oil companies are the highest in history.
  • On top of a sunk capital cost of of $14 trillion for U.S. fossil infrastructure, asking for an additional $6.6 trillion to get to 2030 (which will be paid by citizens at the pump).
  • Unable to provide a stable price structure for fuel.
  • No guarantee of any given price in the future. $50? $100? or Mr. Chazen's $250?  Anything is possible.

Continuing to think macro, prices will continue to rise, pollution will continue, and then--one day--reality must be faced. By mid-century, fossil energy demand will have far outstripped supply. The next unit of fuel will cost more than the nation can afford. At that point, America will not have enough gas, oil, or coal to make the transition to a 21st Century energy system.

It will be like the last fisherman on Easter Island, cutting down the last tree from which a fishing boat could be made.

Alternatives: What alternatives exist? Start by re-thinking the energy problem. It has three parts.

Thinking Macro: (all) Three Parts

A comprehensive analysis of the whole energy problem involves three areas which should be examined, quantified, and molded into a strategy. The areas include

  • (a) Demand,
  • (b) Supply,
  • (c) Infrastructure.

The object of the analysis is to find ways to stabilize energy costs, source energy domestically, minimize long-term costs of energy relative to GDP, and eliminate (not mitigate) as many sources of emissions as possible.

xxxxxxxxx.

mid-century energy demands will outstrip fossil capability. Focus on rates.

(a) Demand: Though America and Europe can be expected to have only modest increases, world demand increases for energy are driven by China (7%), India (4%), and other emerging economies.

The Energy Information Agency, EIA, World Economic Outlook (WEO) sees

  • [To 2030] "...energy demand increasing at the rate of 1.6 percent year on year until 2030 -- a overall increase of 45 percent. The WEO estimates this will cost $26.3 trillion, but it says the 'credit squeeze' threatens to undermine investment which could create energy supply problems in the future.
  • [To 2030] The WEO continues: "Demand for coal will rise higher than any other fuel while oil demand is expected to rise from 85 million barrels per day to 106 mb/d by 2030."
  • [To 2050] U.S. Demand for energy by 2050 will be vastly more than today. The population will increase from 300 million to 439 million; global climate change is forecast to cause droughts in the midwest; and there will be water shortages. The latter two will require massive energy applications for desalination and irrigation. The fossil system will be--simply--inadequate to the task.

(b) Supply: Many analysts consider reports of fossil "reserves," particularly oil, to be manipulable and unreliable. Instead, it is prudent to focus on rates of supply ("production").
Also useful: once a field goes into decline, it can never again produce at a higher rate. Also note that almost all the "new" "finds" like Brazilian oil, the Bakken Fields, and "new" natural gas in Texas and Appalachia have been on the books for years. Focus on rates of supply and demand; these can be checked.

  • The WEO forecasts a demand for oil of 106 mb/d by 2030, but this is looking like a fantasy. In August 2008, Christophe de Margerie, the chief executive of the French company Total, said the world would be hard-pressed to raise supplies [rate] beyond 95 mb/d by 2020.
  • In August of 2008, rates of increase in demand for oil exceeded the rate at which oil could be delivered, which has been flat at 85 mb/d since 2005. Prices rose to $145 before the recession restricted activity.
  • Gas and Coal are not unlimited, and their prices have quietly tracked oil price increases. The electric utility industry has xxxxxxxxxx

(c) Infrastructure

map the growth of world demand for each fossil fuel,

There is an erie sameness. There was no shortage of micro indicators for the fiscal collapse. There is no shortage of micro indicators for the coming energy crisis. What is in short supply is leaders who are willing to stretch their minds around the whole problem. The resulting conclusions have become a mishmash of wildly unrealistic and self-contradictory plans, a clutter of good intentions. For example:

  • The nation needs a "smart grid" to use renewable energy, but no public plan requires realistic energy storage [see CAES] that will smooth fluctuating wind and solar to base load quality. The best that is offered is car batteries, thus limiting renewable energy in a future energy system to between 0% and 20%, rather than a more desirable potential of up to 100%.
  • Some plans eliminate coal as priority one, but eliminating coal before eliminating oil dependence will bar the quickest path to total energy independence and--because lack of a quick path delays final conversion--will likely increase total emissions over time.
  • America imports 28 Q-Btu of oil, but it will supposedly "get off imported oil" by saving 7 Q-Btu in ten years while China and India, after the recession, will resume 7% and 4% growth. They will simply say, "Thank you very much," and use that 7 Q-Btu for their own development.
  • Eliminating oil dependence (and about half of energy related emissions) is not possible without the 13.4 Q-Btu (48% of 28 Q-Btu) to be gained by converting 239 million light trucks and cars to advanced electric vehicles. Yet few "plans" specify such a conversion.

ddd

Defining a Solution

The Naysayers

The clutter extends even to the naysayers. For example, Robert Bryce, author of "Gusher of Lies: The Dangerous Delusions of 'Energy Independence,'" a book that is billed as one that "...exposes the false promises of energy independence and explains why the U.S. must continue to use and buy foreign energy."

points out the weaknesses of corn ethanol and (less persuasively) the limits of biomass liquid fuels.

Gusher of Lies: The Dangerous Delusions of "Energy Independence" Author: Robert Bryce


"In Robert Bryce's "Gusher of Lies", he exposes the false promises of energy independence and explains why the U.S. must continue to use and buy foreign energy."

Price....

share the same national population and and the same leadership pathology: macro blindness.

The financial crisis can be a cautionary tale about energy.

The NEI Plan

inte

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxn

Those same Americans—distracted by the meltdown on Wall Street, the collapse of auto manufacturers, recession, and two wars are only vaguely aware of a coming pair of energy disasters: (a) potentially catastrophic fuel price crises and (b) global climate change. The energy threats are clearly of a national security nature, and should be addressed with urgency. Moreover, there is a mismatch between the rapidity with which energy threats will materialize and the extended time it takes to respond.

Any reasonable response is likely to include two tasks.

[a] First Task: Foreign oil dependency burdens the nation today in three ways. America's first task must be to eliminate the risks and potentially catastrophic consequences of dependency, reducing imported oil from 28 Q-Btu to zero (or close to zero) in the most rapid fashion possible. This is "Track A" of the NEI Plan, 12 years.

[b] Second Task: Global climate change is in process. The second—and concurrent—task is permanently eliminating 86% of America's contribution to global climate change. This is "Track B" of the NEI Plan, 40 years.
--

Threats

Five energy threats are represented by two items above—[a] and [b]—and are documented in more detail below. At the moment, America has a liquid fuels (oil) price crisis, a natural gas and coal supply problem, and an intense environmental problem.

Threats are always probabilistic. Nations seldom have the luxury of making choices based on totally accurate predictions. Nor is the search for perfect safety likely to be useful. The threats do not occur in a vacuum; they occur in a world system of interrelated moving parts and uncertain information. Looking to 2020 and 2050, oil dependency and climate change loom.

First, foreign oil dependency is an immediate threat, given that an effective response will take a decade.

  • Reserves: World "reserves" of oil, gas, and coal are the subject of dueling experts, "Peak oil" versus "Cornucopia" theories. Such discussions of "reserves" tend to be irrelevant, biased, and often unverifiable. For example, when the Hormuz Straits close, "reserves" are unaffected but the price skyrockets. Thus, America has an oil price crisis.
  • Supply: Rates of supply, coupled with rates of demand, determine price. Moreover, unlike "reserves," rates of supply (production) can be verified.
  • Demand: World oil demand rates are not static, but increase due to the effect of emerging economies like India (4% annual growth) and China (7%). These patterns are poised to resume when the recession ends.
  • Trends: Oil production supply rates are increasing every day, but the production increases have been offset by depletion of fields around the world. Obviously, once a field goes into decline, it can never again increase its rate of delivery.
  • Claims: Some authors, like Deffeyes, state that the maximum supply rate was achieved in 2005. Others note that if there is no limit to the price, there is no limit to the amount of oil to be found.
  • Insight: Both claims are profoundly unsatisfying. If one recalls that the price of oil increased tenfold in the decade beginning in 1998, and that $300 per barrel oil represents 14% of world GDP, it follows that oil pricing has the capacity to beggar the world or trigger war. Both claims point to the same end point well before 2050: a lack of oil—the basic transportation fuel—stifling world growth through catastrophic price increases, shifting power and resources to the petrostates, and denying America an essential component of its superpower status: cheap and plentiful energy. The replacement?  A massive tax paid to the petrostates.

Second, climate change, if it can be reversed, will require worldwide effort that only American leadership can enable. Moreover, reports show a constant pattern: changes are taking place faster than predicted. Action should follow suit.

Principles and End Points

There is no shortage of well-meaning reformers, and each tends to pursue a particular point of view. Each approach undoubtedly has its merits. The net is all manner of "cures" for America's "energy problems." Some of these approaches are examined below, but first, clear thinking is required about urban legends, realities, and principles.

Selected Urban Legends

  • "Energy cannot be stored on a commerical scale." False. Compressed air energy storage, CAES, is the existing lowest-cost technology to store renewable energy and "smooth" it to base load standards, making it available 24/7.
  • "There may be plenty of wind and solar in the midwest and the west, but it cannot be useful in Maine." False. High voltage direct current, HVDC, power lines can transport energy from Arizona to Washington, D.C. with losses of only about 10%.
  • "Renewable energy is intermittent and thus cannot replace base load coal or nuclear": false. See the previous two items.
  • "Wind can replace coal generation": False, not even close. See the "Realities" section, below, which details the numbers involved.
  • "Biofuels can fuel all U.S. light trucks and cars": False. Biofuels can barely fuel all the heavy trucks. See "Realities," below.
  • "Solar energy potential is about the same as wind": False. Solar alone can provide more energy than America will ever need.

Realities

  • Energy Use Totals: America uses about 100 Q-Btu of primary energy. See: DOE 2007 Energy Graphic.
  • Energy Sources Totaling about 100 Q-Btu:
    • Oil: 40 Q-Btu (18.96 million barrels per day for a year).
    • Natural Gas: 23 Q-Btu
    • Coal: 23 Q-Btu (burning 1 billion tons of coal per year generates 50% of U.S. electricity)
    • Renewable: 7 Q-Btu (mostly hydro)
    • Nuclear: 8 Q-Btu.
  • Energy Source Candidates: Dominant options are wind (first, about 15%) and solar (the rest) to replace 100 Q-Btu.
    • Biofuel Potential for the U.S.A.: about 7 Q-Btu. Some might argue as high as 10, some argue only 5. See Perlack.
    • Total Wind Potential for the USA: about 15 Q-Btu.
      • A recent DOE analysis concluded that wind energy can provide "20% of U.S. Electricity Needs by 2030."
      • Since U.S. electricity consumes about 40 Q-Btu of energy, 20% is only 8 Q-Btu.
    • Solar Potential for the USA: essentially unlimited. A 91x91 mile square piece of Arizona desert with solar collectors can yield (net, at a wall plug on the East Coast) enough energy to replace all coal burned for electrical generation, 20 Q-Btu.
  • Energy Efficiency Candidates: only permanent changes are considered. These save energy via efficiency or replacement. Only a few samples are included; others, like buildings, aircraft, trains, and other candidates are recognized but omitted.
    • Electric drive vehicles offer between a 2.5:1 and a 3:1 efficiency advantage over internal combustion engines. If all light trucks and autos are replaced with advanced electric vehicles (hydrogen or plug-in hybrid electric). Savings: 13.4 Q-Btu.
    • Convert heavy trucks to biofuels. 5 Q-Btu.
  • Transmission and Storage efficiencies:
    • HVDC power lines from Arizona to Washington, D.C. are about 90% efficient, losing only about 10% enroute.
    • CAES "smooths" fluctuating wind and solar energy to base load quality. Efficiency is ~60% (~40% total in-out losses) for existing (since 1978) technology; ~70% for adiabatic technology. An adiabatic system is under test in Europe.
  • Perverse effects:
    • With oil at $100 per barrel, foreign oil dependency is a $0.7 trillion annual drag on the economy, yet this figure—$7 trillion over ten years—is usually excluded from consideration of "cost competitive" for measures that would end it.
    • Implementation of a foreign oil dependency reduction strategy will reduce world prices and sap willpower to complete the program.
    • Recession depresses oil use and reduces prices. Instead of utilizing the few years of low prices to build the needed systems, American leaders are most likely to use financial hard times as an excuse for inaction.

    Principles

    • Electricity: there is wide consenus that a 21st energy system—encompassing generation/collection, transmission/storage, and uses—must be all- or mostly-electric. Fossil fuels will become progressively more and more unaffordable due to scarcity, price, and environmental costs. Whether the light vehicle transportation fuel will be batteries or hydrogen, the energy system must be all- or mostly-electric.
    • The goal of any energy plan must be
      • Permanent. Stopgap measures will be needed for transition but cannot be confused with solutions. By the same token, mitigation and elimination are different. Mitigation (of foreign oil use, of greenhouse gas emissions) is temporary. Elimination is permanent. And any solution must be nearly fully working by 2050.
      • Comprehensive. The components are obvious: management; non-emitting energy sources (wind, solar, hydro, nuclear, and other renewable energy); transmission/storage (renewables can only replace coal if integrated storage is used); and transformation of use (xxxxxxxxxxxxxxxxxxxx
      • Specific and Quantitative.
    • Priorities: Foreign Oil Dependency exposes America to sudden catastrophic costs, costs that can preclude countering global climate change by stealing the resources necessary to build a new energy system. Thus, when there is a choice of priorities, eliminating foreign oil dependency must come first.
    • Realities
    • p

      End Points

      Start with where America needs to go, End Points; 12 years (2020), and 40 years (2050) hence are reasonable targets.

      First, how big must the system be in 2050?

      Energy Requirements in 2050:

      • Energy use normally tracks population. The U.S. Census Bureau forecasts a population increase from 300 million in 2008 to 439 million in 2050, a 46% gain. Even with efficiency advances due to the use of advanced electric vehicles, other new demands will require more energy simply due to population increases.
      • Global climate change is forecast to cause doughts in the midwest and increased population will require more food to be farmed. These changes will likely require massive amounts of additional energy for desalination and for long-distance movement of water for irrigation.
      • The fossil system—heavily stressed today—will be unlikely to come close to meeting these new demands at reasonable or predictable cost.

      The End Points:

      • By 2020: Energy developments under the control of a National Energy Independence Authority (NEIA); free of foreign oil dependency (28 Q-Btu of oil reductions); domestic heavy truck diesel at a predictable price of $2.00 per gallon (plus tax); light trucks and cars largely converted to advanced electric (plug-in hybrid or hydrogen); a National Grid (HVDC/CAES) built out to serve most of the nation; wind power built out; 7 Q-Btu of biofuels from biomass replacing coal to liquids; solar ready for build-out; and emissions diminished from 2008.
      • By 2050: Advances from 2020 to 2050 (light vehicles fully converted to advanced electric; A 21st Century Energy System, encompassing non-emitting generation, energy storage (CAES), transport (HVDC), and use. Energy systems largely emission-free, almost infinitely expandable, domestically-sourced, cheap, and stable priced, a true 21st Century energy sytem. Emissions at 16% of 2005 levels.

      Parsing the Choices

      Recognize Time Frames: The return of high oil prices, even catastrophic prices, is likely as soon as the recession eases. Unless one wishes to bet the farm on plentiful world oil and low prices forever, elimination of oil dependency must take first priority.

      Recognize False Choices:

      • To eliminate oil dependency requires 28 Q-Btu of oil reduction (all imported oil), not 7 Q-Btu (the Middle East plus Venezuela).
      • To achieve either of the End Points will require the electrification of light vehicles (13.4 Q-Btu) within about a decade. While energy savings will

      Pick Something that Works. With What will work, what won't, what is proved technology.

      Sequence Matters: Getting to the End Points will require selecting the best strategies in the correct sequence. For example, it is possible to concentrate so hard on eliminating coal early that the nation will be unable to achieve either energy independence or reduction of CO2 emissions to 84% of 2005 levels.

      Be able to apply a time frame, using data.

      "Cost efficiency"

      "We need to save energy."

      "Algae to oil; high efficiency solar panels; concentrated solar storage; energy from satellites to Earth; roll-top roofing solar panels..." and other wonders are all unproven choices.

      "Rooftop solar; private windmills;

      "Market mechanisms should lead us to energy independence."

      Price volataility.

      Savings, zero sum with Chinese.

      Biofuel capacity for U.S. Perlack study.

      The NEI Plan was developed using a few practical rules to narrow choices.

      The net effect in the summer of 2008 was a world oil delivery system that could not meet demand. The result was oil peaking at $147 per barrel, then world demand collapsing along with the world economic recession.

      The choices available to deal with energy threats

      Practical standards—

      Briefly, what are the options/alternatives available to America? What are the choices among them? They fall into a number of clusters.

      Here is an overview:

      • [a] America uses 40 Q-Btu of oil each year and imports 28 Q-Btu, 70%. The foreign oil dependency threats to America already exist; more can materialize in a week; a real world oil price crisis—the permanent return of oil prices above $100 or even $200-$300 per barrel is almost certain wtihin a decade. In the decade following 1998, oil prices increased more than tenfold from a low of $12.80 per barrel in March of 1998 to over $100 a decade later. Who is to say that a similar price rise is not highly likely to happen again when the worldwide recession ends?
        The response to oil dependency, construction of plants to exploit domestic fossil energy sources to provide 7 Q-Btu of liquid fuels from coal and the extraction of another 4 Q-Btu of oil from depleted wells (all at no increase of CO2), the expansion of existing infrastructure, and the development of 7 Q-Btu of biomass sources, will take about 12 years.
      • [Common to both] Spanning the elimination of oil dependency and the eliminiation of America's contribution to climate change, lie two measures that are solutions to both problems.
        • The electrification of light trucks and autos (13.4 QBtu), which—if vehicle production increases from 17,000 (2007) to 30,000 for 10 years—can enable most of the transition to electric vehicles to be made in 12 years.
        • Implementation of conservation (no value given, due to the temporary nature of conservation). Every saving will buy more time before the pricing crisis, but it will only be temporary because Chinese and Indian growth will swamp any savings. In effect, they will say, "Thank you very much," and fill the void left by U.S. conservation.
      • [b] Global climate change is a massive threat, and the externalities from burning fossil fuels are not yet generally recognized and funded. For example, one study from Harvard estimates that 17,000 additional early deaths result each year from the burning of coal in power plants. What are these lives worth? What will year 2080 dikes for New York and Florida cost? What would a reasonable sinking fund—taken from (supposedly cheap) coal generation income today—for these expenses be?  
        The response to global climate change—building a new energy system—takes decades of construction and costs trillions of dollars. The current system cost about $14 trillion and $5.4 trillion additional will be required to get to 2030. A new 21st Century system will cost less, will deliver more energy for less, and can be paid for off the federal budget in the same manner as any public utility—bonds paid for from a portion of energy sales.

      utilizing fossil fuels for transition while building the renewable infrastructure to eliminate, not "mitigate," America's contribution to global climate change. Solutions to climate change—which will take much longer than a decade—must be integrated into any plan. However, if allowed to dominate the planning, allowing global climate change considerations to predominate choices can short-circut success in eliminating oil dependency.

      How, and in what sequence, national leaders grapple with this destructive pair will determine how they will be viewed in history. While sufficient domestic transitional fuels currently exist at affordable prices.

      Today, the nation faces a liquid fuels problem compounded by natural gas, coal, and biofuel limits that cannot sustain the doubling of use that would accompany a serious attempt to replace oil with domestic liquid fuels.

      . Leaders who focus on the wrong threat first, or who fail to anticipate the price crisis to come are unlikely to survive their current term.

      McIntosh, Alabama in 1991, Huntorf (Germany) in 1978,

      Liquid fuels, gasoline, diesel, and jet fuel, come from oil. The history of oil can be interpreted as follows:

      The cost of the current fossil infrastructure for the U.S. is about $14 trillion: [list]

      The recent track record of private industry in the energy sector

      Occidental Petroleum president and CFO, Stephen I. Chazen, noted in November 2008, that if there is no limit to what the world can pay there is no limit to the amount of oil.

      "At some price, as far as we can tell, you can always extract more somehow. If you knew the price was going to be $100, you would extract more than if you knew the price was going to be $60, because you can afford to put more in the ground to do that. And I think that's the real question. Is there plenty at $30 a barrel? The answer is no, I don't think so. Is there plenty at $250 a barrel? The answer is yes, I think so."
      http://online.wsj.com:80/article/SB122660974344125631.html?mod=dist_smartbrief

      However, using 2007 economic numbers, $300 oil is 14.2% of the world's GDP; $250 oil is 11.8%; $21 oil is 1%. In 1998. oil was under $10 per barrel. At what point does energy stop being an accelerant for growth and start being a sea anchor for the economy? At what point do the dangers posed by oil and fossil fuels exceed their value?  Many Americans believe that the tipping point has been reached.

      Reasons that discussion of reserves tend to be irrelevant. Bad data. Bias. Rutledge. Rates are verifiable. Quote from above: "World "reserves" of oil, gas, and coal are the subject of dueling experts, "peak oil" versus "cornucopia" theories. Such discussions of "reserves" tend to be irrelevant, biased, and often unverifiable."

      Deffeyes at Princeton. Link.

      Oil production obviously cannot consume 100 percent of the world's income. My intuitive, uninformed guess is that it cannot go above 15 percent. If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy.

      Kenneth Deffeyes
      Current Events
      May 27th, 2008
      Oil Production, Oil Price
      http://www.princeton.edu/hubbert/current-events-08-05.html

      How big is the problem? Multiplying production (barrels per year) times the oil price (dollars per barrel) gives a total cost in dollars per year. It's an enormous number; tens of trillions of dollars per year. To put a scale on it, the three thin curves on the graph show the oil cost in contrast to the total world domestic product; the annual value the goods and services added up for all the world's countries. The three curves show the oil cost at one percent, two and a half percent, and five percent of the total world economic output. At $130 this morning, we are at six and a half percent.

      Oil production obviously cannot consume 100 percent of the world's income. My intuitive, uninformed guess is that it cannot go above 15 percent. If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy.

      CAES

      Source: Vasilis Fthenakis, CAES for Enabling PV and Wind; opening session, 21 October 2008, Columbia University "CAES Scoping Workshop. Enabling Solar and Wind Energy Technologies on a Grand Scale."

      http://www.clca.columbia.edu/papers/CAES_WorkshopReport_web.pdf

      Abstract: Over the last year solar and wind have been the fastest growing segments of the U.S. and certain European energy markets. Although deployment of solar and wind in the U.S. can increase ten or twenty-fold from current levels without the need of adding storage, eventually, storage will be required for these technologies to become the major constituents of our energy mixture. Furthermore, incorporating storage in the system improves the flexibility of the grid to incorporate PV and wind generated power.

      Most energy storage systems are expensive, either in capital outlays or in energy losses incurred while storing and retrieving energy. For example, batteries are costly, flywheels are suitable for short-duration storage only, pumped hydro has geographical limitations and superconducting electricity storage is experimental.

      However, compressed air energy storage (CAES) is a technology that is economical for large bulk storage and can provide cycling capability, regulation and quick start for both peak and base load applications. It has been recently proposed (Solar Grand Plan) that large scale PV-CAES and wind-CAES deployment can enable these technologies to provide most of our energy needs. However, questions remain on the feasibility of such a grand plan. This workshop will focus on investigating potential technical, geographical and
      economic constraints associated with large CAES deployment and on determining R&D and field testing needs at the NY state and national levels.

      Summary of various plans

      Oak Ridge National Labs' Oil Dependency Studies by Greene, et. al.

      To capture the true cost of the "oil tax" that Americans pay each day, a series of Oak Ridge National Laboratories' studies have stated that there were not one, but four cost components to America's foreign oil dependency. Only one, (a) "wealth transfer" (the tribute), is captured by prices and volumes. The remaining three--which must be added to the tribute price are (b) the "drag" effect on GDP, (c) "macroeconomic adjustment," and (d) defense costs. Excluding defense, these three costs totaled in 2005--with prices for the Oak Ridge models held constant at $13 per barrel oil--$280 billion.

      An excellent extract from the Oak Ridge analyses is at: link. http://www.econbrowser.com/archives/2006/06/more_on_the_cos.html

      Model: Coal-fired electrical generating plants cause 17,000 early deaths each year in the U.S.

      EIA: Projection. The IEA has issued its energy report. The following is the press release (November 18, 2008): http://www.cnn.com/2008/TECH/science/11/18/iea.weo/index.html

      The WEO expects China and India to account for over half the incremental energy demand, while the Middle East is predicted to become a major new demand center. Cities worldwide will increase their share of energy demand from two thirds to three quarters by 2030. Almost all of the increase in fossil-energy production will occur in non-OECD countries.

      Projection: more.

      The new WEO projections -- which assume no new government policies -- see energy demand increasing at the rate of 1.6 percent year on year until 2030 -- a overall increase of 45 percent. The WEO estimates this will cost $26.3 trillion, but it says the "credit squeeze" threatens to undermine investment which could create energy supply problems in the future.

      Demand for coal will rise higher than any other fuel while oil demand is expected to rise from 85 million barrels per day to 106 mb/d by 2030.

      Margerie:  NY Times, 18Aug08:

      At a recent conference in Madrid, Christophe de Margerie, the chief executive of the French company Total, said the world would be hard-pressed to raise supplies [rate]beyond 95 million barrels a day by 2020. link

      Fossil Reserves Unreliable

      Water shortages and Desalination:

      When asked by Rep. Waxman if his ideology pushed him to make bad decisions, Alan Greenspan said that he found a "flaw" in his governing "ideology," his world view of 40 years, that has--since the meltdown--led him to re-examine his thinking.

      Links, including video:
      http://www.npr.org/templates/story/story.php?storyId=96070766
      http://www.youtube.com/watch?v=CQ6WgiHq3CE

      "Why didn't the experts see the financial disaster coming?"
      In retrospect, the financial micro indicators were obvious. Households and the government were borrowing too much; the administration and the federal reserve chairman believed that "markets will regulate themselves," e.g., somehow ideology trumps greed; "liars' loans" were offered on easy terms, toxic loans were bundled and sold as securities, the securities were represented to be investment grade bonds; and investment banks operated on the bigger fool theory. Yet, almost all of the experts who knew about most of the micro pieces of what was going on were blind to the macro danger. They were macro blind. In the minds of the experts, the micro indicators did not add up to risk of a macro catastrophe.

      Measures available in the 1980s that are no longer available:

      • The oil market is no longer a monospony, dominated by the U.S. Emerging markets, particularly China and India, are accounting for the world growth in demand.
      • There was a move to natural gas, no longer available.
      • Changes in industrial technology were made, and once made, cannot be made again.

      1. background

      2. why energy indep has appeal and

      3. The motives behind

      4. De-carbonization

      The NEI Plan

      The NEI Plan is a direct descendant of "A Solar Grand Plan," (SGP) in the January 2008 issue of Scientific American, by Zweibel, Mason, and Fthenakis. All these authors have contributed insights to the development of the NEI Plan, but particular recognition is due to James Mason, an energy economist, who contributed the models and energy insights upon which both the SGP and the NEI Plan are based.

      Until publication of the NEI Plan the Solar Grand Plan was the only plan before the public that actually achieved a transition to a domestically-sourced 21st Century energy system permanently eliminating global warming emissions by the U.S. Unfortunately, it took 75 years, far in excess of the threats coming the nation's way. There are five of these energy threats, three related to oil dependence and two more.

      The NEI Plan, based on quantitative models, responds to two dangers to the nation, foreign oil dependence and global climate change. It uses fossil resources, while they exist at affordable prices, in order to transition to a clean, domestically-sourced, and limitless energy system. The Plan ends oil dependency in 12 years, and, along with substatnial massive job creation, the Plan cuts national CO2 emissions permanently to 16% of 2005 levels.

      Many other plans exist. Most are included within the NEI Plan. We would like to see any other plan that achieves the end states listed above within the time frames above, with self-funding.

      Five Major National Threats

      America's vulnerabilities have developed over half a century and the leadership from both parties. These vulnerabilities include three types of oil-related exposure, the finite nature of natural gas or coal, and global climate change.

      The Foreign Oil Dependence Threat: Three Clear and Present Dangers

      However, the SGP did not address the three urgent national security threats to America posed by oil dependency, each far exceeding the risks to the nation of enemies in Iraq and Afghanistan.

      All the threats except for global climate change are based on price, and price is determined by the rate of flow of oil, gas, or coal.

      • Foreign Oil Dependence. According to an Oak Ridge National Laboratories analysis of oil dependence by Greene, et.al., oil dependence is an $0.7 Trillion annual drag on the economy (based on $100 oil).

      • Lugar: World Oil Choke PointsA sudden oil shock—for example, the closing of the Hormuz Straits, or a successful attack on Ras Tanura, the major Saudi oil port, or interruption at one of many "Choke Points" around the world shown at right) can cost from $5-8 Trillion. The illustration at right comes from Senator Lugar's web site. During his term as Chair of the Senate Foreign Relations Committee, he called for hearings about the effects of oil dependence on America's security.

      • The "Train Wreck" scenario, an inability of rates of world supply to meet world demand, can permanently elevate oil prices above $200 per barrel.

        2007 World GDP was $65.61 Trillion; 2008 world demand for oil is about 85 million barrels per day. A price of $300 per barrel would be 14.2% of world GDP. One analyst noted, "If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy."

        It can happen. In 1998 oil was under $15 per barrel; in 2008, ten years, it was $140.

        2007 growth rates were led by China (11.4%), India (9.2%), and Russia (8.1%). These point to demand increasing faster than the world oil system's maximum rate, which is likely to be in the 85-95 million barrels per day range. When it does, oil prices will rise permanently higher. As soon as the effects of the world recession clear, the threat of the Train Wreck scenario will recur. There is no permanent way to avoid the threat without transforming the U.S. energy system, including transportation.

      In short, America is in danger and must act quickly. Already burdened by oil dependency of $0.7 Trillion each year, the nation is exposed daily to an oil shock, and probably has less than a decade before either or both of the second and third oil-related threats: an oil shock or the Train Wreck scenario. The results would be catastrophic for the nation and the world.

      Allowing these vulnerabilities to exist for four decades has been national security malpractice.

      Natural Gas and Coal are Limited

      First, some new facts and a refresher on some old facts:

      • America burns 1 billion tons of coal annually (20 Q-Btu) to generate half of the U.S. electricity.
      • The other 20 Q-Btu come from 104 nuclear plants and hydro.
      • Renewables (wind and solar), can't replace base load coal, nuclear, or hydro-generated electricity because they are intermittent power and need storage to make the current steady and reliable 24/7. Without an infrastructure designed for renewables will remain a trace source. See the discussion of the NEI Plan's renewable Grid, below.
      • Cars and light trucks burn 13.4 Q-Btu in the form of (mostly) gasoline.
      • Heavy trucks burn 5 Q-Btu of oil in the form of diesel.
      • The maximum ethanol capacity for the U.S. is about 7 Q-Btu, enough to fuel trucks (when fully scaled) but not light vehicles.
      • Coal to liquids (gasoline or diesel) can temporarily replace imported oil but this path is unsustainabile and would require more than doubling the total coal mined in the U.S. See xxx
      • Coal to liquids (CTL) is considerably more dirty than simply refining oil, and the the sequestration of CO2 in underground cavities has not yet been tested—and such a test will reqire 20 years to prove the sequestered CO2 will not escape into the atmosphere.
      • After a resource peaks, by definition it can never again deliver the resource at the same rate as before or at the peak. Therefore, given constant or rising world demand, the time when fossil fuels start to become unaffordable is around the time of the peak for the resource. Price is the issue, not remaining reserves.

      It appears America is poised to repeat history. In 19th Century Britain, the "experts" consistently forecast coal at 3 times (3x) the remaining actual value. On the graphic at right the circles show the estimates, starting with "800 years" in 1871 and diminishing until reserve collapse in about 2000. Only when coal was in collapse did the estimates become correct. British Coal

      To show that America is not immune, the same pattern was repeated with United states domestic oil in the mid-20th Century. Now, the oil, gas, and coal industry spokesmen assure the public that there is "plenty" of the fossil fuel remaining. However, these are now world markets. When Britain ran out of coal, it imported coal. Today, world demand for fossil fuels is increasing due to population growth and the rise of China (7% energy use growth), India (4.5%), and other nations. So far, delivery of fuels has met demand. But when the rate of world supply is surpassed by increasing demand, there is nowhere else to go to get more of the fuel.

      As with oil, "plenty" of reserves is not the issue. It's price. Once a resource cannot meet the rate of demand, the price goes up. The point of sharp price rises comes a lot sooner than reserve collapse.

      For example, some plans use Coal to Liquids technology to substitute for imported oil. According to recent analysis, attempting to use coal to replace the 13.4 Q-Btu of light vehicles (trucks are another 5 Q-Btu) will drive coal to become uneconomical before mid-century.

      By contrast, the NEI Plan uses a coal to liquids technique that fuels the trucks, actually slightly reduces CO2 emissions, and then—when the coal becomes too expensive—converts to biofuels. See SCTL-B, Synergistic Coal to Liquids, then Biofuels.

      Natural Gas X
      Another trend to examine is natural gas.

      The graphic at left shows

      • In pink, the production per well
      • In blue, the number of wells.

      While there have been new "finds" in the U.S., the uses for natural gas (an excellent fuel) will likely deplete it as shown in the next graphic, below.

      The red line, below, is oil; blue is natural gas, and black is coal.

      The best estimates available for the NEI Plan show that America will face three waves of fossil fuel depletion, led by oil.

      The heavy lines show the peaking of oil, then gas, and then coal. The light lines show the price effects.

      The timings of these "waves" have been incorporated in the NEI Plan so that an alternative will be in place before the resource begins to fail. The exception, as discussed above, is oil. 12 years, the shortest time to real independence, is a long time when exposed to the ongoing costs of $0.7 Trillion per year and risks of an oil shock ($5-8 Trillion), or the Oil Train Wreck Scenario.

      WavesAmerica is not in an enviable place. Many industry experts claim, just as the British Coal experts claimed in the 19th Century, that the supply is limitless. If these predictions are wrong and the estimates in the graphic at right are correct, America has very little time to build a substitute for fossil fuels.

      Accelerated use of coal accelerates climate change.

      Coal to liquids for the light vehicle fleet's 13.4 Q-Btu would more that double the billion tons of coal a year America burns. Such a program of independence could well destroy the transitional fuel needed to move to a 21st Century energy system.

      To be sustainable, a destination at the end of a coal to liquids (gasoline or diesel) program is necessary. Simply using coal to fuel vehicles until the coal is exhausted, along with world oil, is a path to disaster.

      The nation could well find itself a modern version of the tribe on Easter Island that cut down the last tree.

      The NEI Plan is based on the reasonable assumption that the risk of being wrong about "reserves" of any fossil fuel is too great to take.

      The Global Warming Threat

      The probability that man-made global climate change exists far exceeds the probabilities justifying America's going to war in Iraq in 2003. Global climate change demands the same attention and resources. Cited below are three examples of the evidence: a report of a team led by James Hansen, director of NASA's Goddard Institute for Space Studies, the Stern Report, and the United Nations Intergovernmental Panel on Climate Change (IPCC) fourth assessment report.

      Even if the probabilities are not 100%, the penalties for guessing wrong are so high that action is justified today. It is fortunate that the NEI Plan can "solve" America's contribution to global climate change by building a new energy system. This eliminates, not mitigates the sources replaced by the current fossil-intensive system.

      Danger, global climate change

      When a danger arrives slowly, incrementally, it is easy to ignore. Some deny the danger, some pretend it does not exist. In retrospect, perhaps some day those leaders will be viewed as the historians now view Neville Chamberlain's actions at Munich, returning with a promise of "Peace in our time."

      The graphic at right spans 1959-2059. One vexing question about global climate change is "how much is too much" CO2 in the atmosphere.

      The graphic shows the slow rise of atmospheric CO2 on a "business as usual schedule" (red curve), and the change if the U.S. (not the rest of the world) would adopt the NEI Plan (blue curve).

      The vertical black line is 2008, and one can see that the limit of 350 parts per million, ppm, suggested by Dr James Hansen, director of NASA's Goddard Institute for Space Studies, as the long-term maximum for world levels has already been crossed.

      One observer noted,

      "Acting alone, Americans cannot curb climate change. Yet unless the United States acts, the chances of effectively addressing this global threat is nil."
      [Bacevich, p 180]

      Following is some of the evidence, starting with an excerpt from CNN, November 26, 2008.

      • "LONDON, England (CNN) — A team of international scientists led by Dr James Hansen, director of NASA's Goddard Institute for Space Studies, say that carbon dioxide (CO2) levels are already in the danger zone.
      • "Concentrations of CO2 in the atmosphere currently stand at 385 parts per million (ppm) and are rising at a rate of two ppm per year. This is enough, say the scientists, to encourage dangerous changes to the Earth's climate.

      • "As a result we risk expanding desertification, food shortages, increased storm intensities, loss of coral reefs and the disappearance of mountain glaciers that supply water to hundreds of millions of people.

      • "The report, "Target Atmospheric CO2: Where Should Humanity Aim?" appears in the latest edition of the Open Atmosphere Science Journal and brings together the expertise of ten scientists from the United States, the UK and France."

      Emissions

      Roughly, half of America's greenhouse gas emissions come from tailpipes; the other half occurs when a billion tons of coal are burned annually to produce half of America's electricity.

      • Tailpipe emissions require conversion of the light vehicle fleet (13.4 Q-Btu) to advanced electric vehicles and trucks (5 Q-Btu) to biofuels.

      • There are approximately 600 coal-fired electrical generating plants in the U.S. The plants represent a capital investment of around $360 billion, and their retirement is not a trivial matter.

      • Any plan to eliminate America's contribution to climate change must eliminate, not mitigate, emissions from all possible sources. At right, the NEI Plan eliminates, not mitigates, all but 16% of 2005 level CO2 emissions by 2050.

        NB: This graph is consistent with the one above it, showing world CO2 concentrations. One nation alone cannot solve a world problem.

      The Stern Report is the most authoritative assessment of the costs of global warming. It forecasts disruptions of catastrophic scale. From the extract below, the disruptions will be "on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes." Following are quotations from the Executive Summary.

      • "The Stern Review on the Economics of Climate Change, the most comprehensive review ever carried out on the economics of climate change, was published on October 30 2006 and was lead by Lord Stern, the then Head of the Government Economic Service and former World Bank Chief Economist."

      • "Executive Summary"

        "The scientific evidence is now overwhelming: climate change presents very serious global risks, and it demands an urgent global response.

        "This independent Review was commissioned by the Chancellor of the Exchequer, reporting to both the Chancellor and to the Prime Minister, as a contribution to assessing the evidence and building understanding of the economics of climate change.

        "The Review first examines the evidence on the economic impacts of climate change itself, and explores the economics of stabilising greenhouse gases in the atmosphere. The second half of the Review considers the complex policy challenges involved in managing the transition to a low-carbon economy and in ensuring that societies can adapt to the consequences of climate change that can no longer be avoided.

        [The Summary continues] "...actions over the coming few decades could create risks of major disruption to economic and social activity, later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes. Tackling climate change is the pro-growth strategy for the longer term, and it can be done in a way that does not cap the aspirations for growth of rich or poor countries. The earlier effective action is taken, the less costly it will be."

      The United Nations Intergovernmental Panel on Climate Change (IPCC), issued its fourth assessment in 2007. It stated that climate change events are developing more rapidly than projected, making forecasting difficult since the targets are continuously moving.

      NEI Plan: Mandates from Threats.

      Decision Time

      The five threats, listed above, sum up to this:

      America is like a surfer paddling out toward a wave that is looming to a destructive level. The only option is to paddle toward the wave, hoping that will be possible to punch through to the other side before the wave crashes on the sufer.

      Ignoring the wave, or pretending it's not there are foolish options.

      Likewise, the fossil energy system is becoming unusable, unaffordable, and dangerous.

      Three waves loom: oil first, then natural gas, and then coal.

      Decisions need to be made. America must end oil dependency and end fossil fuel use.

      End Oil Dependency in 12 Years

      End Fossil Fuel Use by 2050

      ===========================================

      Strategies

      Eliminate Oil Dependence First

      Short-term must serve long-term

      Eliminate, Not Mitigate Emissions

      Renewables Phase Out Fossil

      Electric Cars Phase Out Gasoline

      Organization

      Financed off the Federal Budget

      Job Creation for SCTL-B Plants, Cars

      Managed as a National Utility: NEIA

      Military Implications

      Realistic

      "28 Q-Btu" to End Oil Dependency

      Natural Gas and Coal are Limited

      Means

      Electric efficiency is essential

      Electrify Light Vehicles (3x sales)

      Renewable Infrastructure is essential

      Generation by Wind and Solar

      Heavy Trucks: SCTL to Biofuels

      Fossil Is Essential for Transition

      Goals or End States

      End of Transition: 12 Years

      21st Century Energy System

      Transition Overview

      Comparison with Other Plans

      Documents to Download

      Credits

      ====================Stop Here

      America's Choice

      The fossil system has served the nation well, but it is now obsolete and a danger to national energy security. It has become the tail that wags the dog.

      Response: NEI Plan

      America spends about

      If it were possible to implement the NEI Plan in an instant,

      30 years into the future, the results would be a new, more competitive America.

      • A giant electric network, fueled by free wind and some solar (the full build-out of solar will take until 2050), with CAES, compressed air energy storage, to condition the renewable energy into steady, reliable, base load current, available 24/7.
      • The combination of

      The NEI Plan consists of three parts and two tracks. Transition, the most difficult part, is

      Financing the grid

      First, avert the three clear and present dangers from oil dependency

      • There are three perils stemming from America's 70% foreign oil dependency: the annual costs, the ever-present potential for an oil shock, and the "Train Wreck" scenario.
      • America uses 40 Q-Btu of oil (19 million barrels per day) per year, 70% of which is imported. Eliminating oil dependency requires the reduction of oil imports from 28 Q-Btu to zero. For example:
        • 28 Q-Btu is a high hurdle. Imports from Saudi Arabia, 1.418; Venezuela, 1.120; Nigeria, 1.028; and Iraq, .479; all these together only total 4.045 mmbbl/d (8.535 Q-Btu), and are just 30% of the needed 28 Q-Btu.
        • It is not possible to reach 28 Q-Btu without converting the light vehicle fleet (13.4 Q-Btu of oil reduction) to advanced electric drive vehicles, either hydrogen fuel cell powered cars like the Honda FCX Clarity or plug-in hybrids like the Chevy Volt. The Honda has a range of 230 miles and torque similar to a BMW; the Chevy is planned to be for sale at the end of 2010. Links to the manufacturers' web sites are between the pictures.

      Click link at left for Chevy Volt web siteClick link at right for Honda FCX Clarity web site

      Links:

      left Honda

      and

      right Chevy

      ...
      ...
      • No plan prior to the NEI Plan has achieved the needed 28 Q-Btu of oil import reduction in 12 years without vastly increasing emissions. The NEI Plan achieves this reduction with a slight reduction of emissions by combining existing techniques in a combination called SCTL-B, described below.
        ...

      Second, global climate change

      Transition, Two Tracks

      To achieve these two goals, elimination of imported oil in time (12 years may be too long) and elimination of emissions (it may already be too late) to avert global climate change, the nation must come together on a World War II basis.

      • The environmentalists must accept the intelligent use of 700,000 tons annually of lignite coal to liquids in order to enable 5 Q-Btu of domestic fuel production for trucks while biomass capacity of 7 Q-Btu is assembled and grown to replace the coal.
      • The coal and electrical generating industries must accept the phasing out of all coal generation of electricity over the period shown on the graphic above, 2012-2050.
      • The oil industry must accept the transition to advanced electric vehicles, while being asked to exploit domestic oil resources to their utmost during 12 years of transition in order to stem declines in domestic oil output.

      The NEI Plan is the only national energy plan that achieves the following:

      • Although some plans claim to eliminate oil dependency,
      • Although some plans
      • Although some plans
      • Eliminates oil dependency in 12 years through a practical transition plan
      • Is self-funding (by energy sales through the system at 13.5 cents per kWh until its bonds are retired, then at 5 cents per kWh)
      • Defines a national transformation of energy source, use, and infrastructure by 2050

        The NEI Plan:

        The NEI Plan uses the insights of the SGP to craft a response to end oil dependency quickly, in 12 years. Ending America's contribution to global climate change takes longer, to 2050.

        use and system

        to a 21st Century system by the end of this century, the NEI Plan—based on the urgency of America's peril—makes a mad dash for energy security while fossil fuels are still affordable.

        The NEI Plan is based on a World War II urgency. It builds a national utility that is the largest public works program since the Eisenhower Interstate Highway System, paid for by bonds which are paid from energy sales through the system (which will be on the order of $2 Trillion per year by 2050). The organizing agency is the National Energy Independence Authority, NEIA, an organization whose members will be selected for competence and national commitment. The NEIA has fast track authority—supervised by a special court to protect the public—to manage America's transition to a new transportation and energy system. The NEIA will let contracts for and supervise the bond funding, design, construction, and management of a 21st Century system.

        NEI Papers:

        The Plan is book-length, in draft, and not yet publicly available. However, this web page provides documents that give a clear picture of the outlines of the Plan and its rationale. Also attached are some additional documents that may be helpful. The following are available:

        • The NEI Plan Highlights displays the structure of the book to follow: title, credits, draft contents, highlights, facts and misconceptions (with a section at the end on job creation), [the main chapters and appendices are omitted], and endnotes for the highlights.
          Link. [(At link, "save target as.") Document length: 50 pages; Size: 2.6 mb]

        • Count to 28 is a working paper that amplifies on the Highlights. The document compares a number of plans offered to the public, using a 28 Q-Btu standard. The standard flows from the problems involved with actually achieving energy independence. America's imported oil totals 70% of its oil use of 40 Quadrillion Btu, or 28 Q-Btu. Thus, total oil reductions through alternative supply, reduction of demand, and transformation of energy use must total to 28 Q-Btu.
          Link [(At link, "save target as.") Document length: 8 pages; Size: 202 kb]

        Each publication is in both Adobe "Portable Document Format," PDF, and in normal web browser format (HTML).   Most computers today have the free Adobe Acrobat Reader already installed.
        To download and install the reader, click the logo at right:      

        Inquiries:

        • E-mail:
        • Or, write us:
          Fiscal Associates
          16 Fairfield Drive
          Newark, DE  19711.