The road to national energy security

Despite the pressures of global climate change, oil topping $100 a barrel and demand for energy increasing, the DOE’s Samuel W. Bodman insists that it’s a good time to be Secretary of Energy. The source of his optimism: that behind the complex challenge facing the nation, he also sees a solution coming together.

The sensitive and intricate condition of today’s national energy security comes from a variety of pressures: concern over America’s heavy dependence on oil, the apparent need to find and develop new energy technologies and sources while augmenting traditional energy sources, and the realization that energy security and climate change have become inter-related challenges.

In an address to The Washington Post Company Energy Conference in November, Department of Energy Secretary Samuel Bodman explained how the current global energy predicament breaks down into three basic components. The first is the rapidly rising demand for energy. Projections already estimate that global energy consumption will increase by over 50 percent by 2030; in terms of electricity alone, US demand is projected to double in the same timeframe, with global demand nearly doubling. The second factor is the US economy’s heavy dependence on fossil fuel, and particularly imported oil, which contributes directly to the third factor: that most of the world’s fossil fuel supply exists in unstable areas of the world. “This instability manifests not only in terms of our safety and security, but also in terms of inefficient commercial activity,” he says. “In order for any market to function well and fairly, we need stable regulatory improvements – we need transparency, we need adequate protections for physical and intellectual property, and we need systems for rooting out corruption.”

In addition, he points out that positive investment climates need to be maintained around the globe. While sustaining a healthy marketplace is a critical component, the larger challenge at hand is sustaining and improving the health of our environment. The correlating issue of global climate change, which will only grow more severe with time, requires immediate change and action on a global scale, including cleaner and more diverse sources of energy.

While the magnitude of the challenge at hand is obvious, Secretary Bodman also sees a solution taking shape. He identifies the critical component parts of the solution as the national imperative to act; having the federal policies in place to increase national investment in R&D to break overdependence on fossil fuels; and the critical role of the marketplace.

Clearly, the national imperative to act is the most important element of any successful strategy. While the commitment of the American people is evident, there is still room for improvement. “The truth is that the largest source of immediately available new energy is the energy that we in this country waste every day,” points out Bodman. Promoting energy efficiency in every way possible – whether it be in homes, vehicles or offices – is an essential first step, and there are a number of ways to conserve more energy: keeping current with vehicle maintenance, properly insulating homes, choosing energy efficient appliances and compact fluorescent light bulbs, considering fuel-efficient vehicles or public transportation, and even participating in an energy assessment program.

Even replacing just one light bulb can make a difference. According to Bodman, if every American home replaced just one incandescent lightbulb with an Energy Star qualified bulb, it would save enough energy to light more than three million homes for a year. This would also translate to more than 600 million dollars in annual energy costs and would prevent greenhouse gases equivalent to emissions from more than 800,000 automobiles.

Industry initiatives
To encourage further efforts by the American people, the federal government has also taken responsibility for action to combat the global security challenge, evident through the existing series of federal policies to increase R&D investments to help break the nation’s overdependence on fossil fuels. One example is the American Competitiveness Initiative, which includes a significant set of increases for federally funded research in the physical sciences arena – including areas like super computing, nanotechnology, advanced nuclear reactor technologies and fusion energy. Ongoing critical investments in these areas will be evident over time as advances are made and new technologies developed.

Another critical initiative Secretary Bodman cites is the Advanced Energy Initiative. “We have laid out an aggressive strategy to expand the availability of renewable energy and alternative fuel,” he explains. “Our goal is to identify the technologies that could have the greatest impact on the marketplace in the relatively near future.” An array of technologies fit this bill, including cellulosic ethanol, advanced hybrid vehicle technology, hydrogen fuel cells, solar power and high-efficiency wind power.

To get such technologies pushed from the pipeline to the marketplace, however, will require strategic collaboration on behalf of industry and academia with the federal government. Many initiatives have already been set in motion to foster such collaboration. “We are employing a range of collaborative models, including cost-sharing partnerships and loan guarantee programs, which allow us to fund innovative technologies that are commercially viable and share some of the risk that the private sector is unwilling to undertake alone,” says Bodman.

Programs already initiated cover a range of technical areas including solar technologies and advanced biofuels. In fact, Bodman’s department has already selected 25 projects in the solar energy field for funding through the initiative. In total, the Department of Energy is providing up to $20 million in funding – and with industry cost-sharing, the total public-private investment will be over $30 million.

Another key federal initiative in the works is the Twenty in Ten program, with the goal of reducing projected US gasoline consumption by 20 percent by 2017. The President has also submitted legislation to Congress to increase the renewable fuel standard to displace 15 percent of America’s gasoline consumption and up to the equivalent of 35 billion gallons of alternative fuels in the same timeframe.

An aggressive challenge
While some believe producing that much alternative fuel in the next decade may be overly ambitious, Bodman maintains it is just what is needed. “This is the very definition of an aggressive challenge,” he admits. “If we are to truly expand our energy horizons, then we must set the bar high. We must bet on technology and we must signal to private investors that our policy environment supports sustained investment in renewable and alternative fuels.

Despite the great emphasis on renewables and alternative fuels, Bodman points out that our nation’s economy is and will remain heavily dependent on fossil energy. In light of the nation’s abundant coal supply, the challenge on the table is to find ways to use it more cleanly and efficiently. One method of doing this is through the development of carbon sequestration capacity. In October, the Department of Energy awarded funds for the first three large carbon sequestration projects in the US, which will conduct large volume tests for the storage of one million or more tons of carbon dioxide in a deep sea line reservoir. Over the next 10 years, the DOE plans to invest $197 million for the project. “Collectively these formations have the potential to store more than 100 years of CO2 emissions from all major sources of pollution in the US and will help enable us to one day use coal without emitting greenhouse gases into the atmosphere,” Bodman explains.

Even as more alternative and renewable energy sources become viable and new ways are discovered for producing fossil energy more cleanly, we must still reach out to existing and more immediately available sources of energy. In this respect, Secretary Bodman calls for expanded access to safe and emission-free nuclear power – and doing so in a manner that responsibly manages waste and reduces risk.

The controversial and sensitive issue of further developing nuclear power obviously presents a number of risks and challenges. “At present, nuclear power is the only mature technology that can supply large amounts of emissions-free base load power to help meet expected growth in demand,” Bodman says. “If we are talking about what is available to order right now that would have a material effect on our ability to produce homegrown clean power, we’d have to talk about nuclear power.”

Not since the 1970s has the US licensed construction of a new nuclear plant – but the government is working on changing that and is in the process of implementing federal risk insurance or stand-by support for nuclear plants, as well as working on loan guarantees to remove some road blocks around the next generation of nuclear plants.

Progressive partnerships
In the context of major nuclear expansion around the globe, the US has put its foot forward by introducing the Global Nuclear Energy Partnership, established to facilitate the worldwide expansion of nuclear energy for peaceful purposes in a safe and secure manner.

Secretary Bodman brought to light the recent GNEP ministerial meeting he hosted in September, where 16 nations signed on to the GNEP statement of principles that put in place the framework for fostering nuclear expansion, with a common goal of creating reliable fuel services that will provide a viable and economic alternative to the spread of sensitive nuclear technologies. “The partnership seeks to take advantage of the best available fuel cycle approaches to recycle spent nuclear fuel, to reduce the amount of waste and to tap the unused energy that exists in this bad fuel,” Bodman summarizes.

On the back of critical federal initiatives comes the third component of a successful national strategy, which is the role of the marketplace. “ For the first time we are seeing the venture capital community putting sizeable amounts of energy into entrepreneurial companies in alternative energy business.”

Bodman’s perception of a thriving clean energy market was backed by the statistic he drew out that in the third quarter alone, the clean tech sector – including alternative energy and conservation technologies – witnessed record investment levels of $844 million, an 80 percent increase over the previous quarter. The numbers attest to the private sector’s recognition of financial opportunity but also the opportunity to contribute to the nation’s greater energy security and help make a positive environmental impact.

The private sector’s interest and commitment, the federal policies in place and the national impetus to act on behalf of the American people are strong forces merging to tackle the looming challenge of our nation’s future energy security. “We have forward-looking leadership and funding commitments from Washington, we have the dedication and ingenuity of American scientists and engineers, we have the innovative power and the unmatched capital of the private sector, and we have the commitment of the American people to achieve together what none of us can accomplish alone,” Bodman says.

Still much work remains and it will be a difficult challenge to overcome, but with the makings of a solution in place, Secretay Bodman is optimistic about our national and global energy situation. “We are seeing a convergence of forces that tells me our nation is on the path to a cleaner, affordable and more secure energy in future.”

Dr. Samuel Wright Bodman was unanimously confirmed as the 11th Secretary of Energy on January 31, 2005. Previously, Secretary Bodman served as Deputy Secretary of the Treasury. He graduated with a bachelor’s degree in Chemical Engineering from Cornell University, and then earned an ScD at Massachusetts Institute of Technology. He served as an Associate Professor of Chemical Engineering at MIT and began his work in the financial sector as Technical Director of the American Research and Development Corporation, a pioneer venture capital firm. From there, Secretary Bodman went to Fidelity Venture Associates, a division of Fidelity Investments. In 1983 he was named President and CEO of Fidelity Investments, and a director of the Fidelity Group of Mutual Funds. In 1987, he joined Cabot Corporation, a Boston-based Fortune 300 company with global business activities in specialty chemicals and materials, where he served as Chairman, CEO and as a director. Over the years, he has been a director of many other publicly owned corporations. He is a former director of MIT’s School of Engineering Practice and a former member of the MIT Commission on Education.