Permanent Energy Crisis
And the solution we keep ignoring.
Mar 17, 2003, Vol. 8, No. 26 • By WILLIAM TUCKER
Meanwhile the transportation system is still hopelessly hitched to oil (accounting for half our consumption). The total mileage driven by American cars has tripled since 1970. Government-mandated fuel efficiencies have only made it cheaper to drive. Alternate technologies are still far over the horizon. A hybrid electric-gas auto developed by Toyota and Honda has shown promise. The vehicle gets 70 mpg and does not use additional electricity. (It recharges off the flywheel.) The car is selling in Europe and Japan and could make a big impact if it catches on here.
The hydrogen car, on the other hand, remains a will-o'-the-wisp. Environmentalists have pushed it for a decade and President Bush scored a publicity coup by embracing it in his State of the Union address. But there is no free hydrogen in the world. Supplies will come from either (1) the electrolysis of water, which requires electricity, or (2) stripping hydrogen from natural gas. Rather than being a source of energy, hydrogen is simply a carrier of other energies.
So essentially, we're back where we were in 1975. Coal, oil, and natural gas all have their limits. And the one obvious alternative that offers a way out--nuclear power--remains stuck in neutral.
The private energy companies that have taken over the nation's nuclear fleet over the last decade have performed a miraculous revitalization, adding the equivalent of 25 new 1,000-MW generators simply by making improvements on old plants. Security has also been vastly improved. Unlike 100-story buildings, nuclear containment structures are designed to withstand the full impact of jumbo jet airliners. Yet despite these advantages, no new plants have been commissioned.
"We're very encouraged by the approval of Yucca Mountain, and the Tennessee Valley Authority is planning to restart Browns Ferry 1, which was closed in the 1980s," says Marv Fertel, senior vice president of the Nuclear Energy Institute. "But as for new construction, we're still testing the regulatory environment."
Meanwhile, Democrats are still beating up on the oil industry. Noting that refineries are operating at 87 percent of capacity instead of their usual 92 percent, Senator Chuck Schumer of New York has accused the industry of deliberately holding back supplies. The refineries responded that operations are lower simply because there isn't enough oil around. Senator Joe Lieberman has argued for an immediate release from the Strategic Petroleum Reserve to ease prices for homeowners. Secretary of Energy Spencer Abraham said he would harbor the 600-million-barrel cache for a real emergency.
While the Democrats pander to their big-oil-hating base, the real impact is being felt by oil-dependent industries. In February Dow Chemical postponed a planned expansion because of rising gas prices. American Airlines, which will spend $200 million extra on fuel this quarter, may be headed for bankruptcy.
All this is bad news for the economy. As Stephen Brown, director of energy economics at the Dallas Federal Reserve Bank, warns: "Nine of the last ten recessions have been preceded by sharply higher energy prices." Maybe it's time we started taking energy seriously.
William Tucker is a columnist for the New York Post.