ENERGY POLICY LEADERSHIP

Brice DallySeptember 16,

2008CBE 555

Outline

Intro Bush Policy Obama and McCain Proposals Pickens’ Plan Conclusion/Discussion

Relevance

Energy Crisis Environmental Economic National Security

Informed Voter Impact to ChE Job Market Informational, not Persuasive

Current Energy Usage

Energy Policy Leadership

New Deal or Space Race situation Business as usual without the right

leadership

President Bush’s Plan

Unveiled at 2006 State of the Union

Advanced Energy Initiative (AEI)

22% increase for clean tech Fuel for vehicles Power for homes/business

American Competitiveness Initiative (ACI)

Over 10 years $50 billion for R&D funding $86 billion for tax incentives

Federal R&D Distribution

In 2009, Energy accounts ~1% of Federal R&D spending

DOE Bush Proposed Budget 2009

Total ~ $25 billion

AEI Budget, $3.2 billion

AEI Goals

Vehicles 40 mile range solely on battery Cellulosic ethanol competitive with corn-

based by 2012 H2 fuel cell available to public by 2020

AEI Goals

Homes and Businesses Complete $2 billion commitment to clean-

coal, bring to marketplace Global Nuclear Energy Partnership to

address spent fuel, proliferation, work on new tech

Improve solar pv cells to be competitive by 2015

Expand access to wind energy

Twenty in Ten

Reduce gasoline usage by 20% in ten years (2017) 35 billion gallons of renewable and

alternative fuels Corn ethanol, cellulosic ethanol, biodiesel,

methanol, butanol, hydrogen, other alternative fuels

8.5 billion gallons saved by fuel economy regulations Improvement in 2010 to 2017

Bush Accounting of Alt. Fuels All fuels are treated equal on

a per volume basis, except diesel gets a 1.5x credit.

32 billlion gal / 213 billion gal projected = 15% reduction

5 years behind schedule according to DOE projections

CreditEtOH- Corn 15EtOH-Cellulosic 7.2EtOH- Import 3EtOH- Other Feedstock 0.5BTL diesel 2.9 4.35Biodiesel 1.3 1.95Total 32 billion gal

Quick Check

(32 billion gal gas)(125000 BTU/gal) = 4e15 BTU

(25.7 billion gal EtOH)(84000 BTU/gal) = 2.1e15 BTU (2.9 billion gal BTL)(128000 BTU/gal) = 3.7e14 BTU (1.3 billion gal Biodiesel)(128000 BTU/gal) = 1.7e14 BTU Total = 2.7e15 BTU / (125000 BTU/gal) = 22 billion gal gas

replaced

22/213 = 10% reduction

Fuel Economy

Current avg = 20.2 mpg Improve to save 8.5 billion

gal gas 8.5 billion gal/213 billion gal

= 4% (not 5%?) New mpg =

(20.2 mpg)(213 billion gal) 213 billion gal – 8.5 billion gal

= 21.0 mpg Federal policy needed?

Congress Acts

Changes fuel economy standard to 35 mpg by 2020.

Gas saved =213 billion gal – (20.2 mpg/35 mpg)(213

billion gal)= 90 billion gal saved, a 40% reduction

Alternative fuel policy stays the same “Twenty in Ten” becomes “Fifty in

Fifteen”

Bush’s Last Energy Policies… Off shore drilling Oil shale

1.5 trillion barrels in CO, UT, WY basin ANWR Refinery projects

149 refineries, none built in last 30 years Speed up governments review of

improvements

Obama and McCain

Originally focus of talk, but limited numbers available

Campaign promises vs. actual policy…? Latest poll statistical dead heat

Cap-and-Trade Program

Cut emissions 80% below 1990 level by 2050

Auction 100% of credits, everyone pays

Cut emissions 60% below 1990 level by 2050

Phase in auction over time, relies on past emissions distribution

Obama Supports McCain Supports

Cap-and-Trade

Government sets a cap on total emissions of CO2

Companies/groups issued credits which give the right to emit a certain amount

Trading occurs by over-polluters buying from under-polluters

Government uses some/all revenue to fund Energy Policy

Issues include enforcement and allocation of credits

Off-Shore Drilling

Maybe would consider as part of comprehensive plan

Calls for lifting ban of Outer Continental Shelf

Immediate price relief

Obama Reluctant McCain Supports

Potential of Off-Shore Sites

Production from Off-Shore Drilling Commercial production estimated to start in 2013

(locating and developing wells) assuming legislation passed today

Estimates of production from 200,000 (Energy Information Administration) to 1 million barrels a day (Oil Industry group)

Taking best case scenario, 1 million barrels would increase world’s daily supply 1%

Over long term, a standard economic model shows a 1% increase in production yields a 3% decrease in gas price, assuming others don’t cut production to maximize profits

$4 gal of gas reduced to $3.88 Worth the risk?

Fuel Economy Standards

4% mpg improvement per year

1 million plug-in hybrids by 2015

$7000 tax credit All new vehicles flex fuel

by 2012

More effectively enforce current mpg standards

$5000 for carbon-neutral, graduated for lower emissions

Calls for more rapid change than current 50% flex fuel by 2012

Obama McCain

4% Annual Improvement

New mpg = (20.2 mpg)exp(.04*t)

Nuclear Power

Should explore, but not a great option Safety Storage Big government subsidies

Want 45 new plants by 2030 Ultimately increasing to 100

new plants Best reactors in US produce

about 10 million MW-h annually

100 plants @ 10 MWh = 1 billion MWh

1/4.2 = almost 25% of 2007 total electrical generation

Obama Opposes McCain Supports

Other Policy Highlights

Total investment of $150 billion over ten years Bush spent $15 billion in eight years

10% of electricity from renewables by 2012, 25% by 2025.

Clean coal, Smart Grid, Alaka Pipeline

Weatherize 1 million homes annually

60 billion gallons advanced biofuels

$300 million prize to improve battery technology for transportation- 30% current cost

$2 billion annually for clean coal

Tax credit equal 10% of wages spent on R&D

Obama McCain

Pickens’ Plan

DOE says 20% of power can come from wind, cost $1 trillion

This could replace natural gas in electrical production

Use domestic natural gas for transportation fuel to replace foreign oil

Accounts for 38% of imports, saving $300 billion annually

Conclusions

Once in office, much more accountable for realistic policy

Between two current candidates, Obama has put forth more details thus far

Both promise more $$$ than currently used

References

http://www.whitehouse.gov/ http://www.energy.gov/news/ http://www.nsf.gov/statistics/infbrief/nsf08312/ http://www.eia.doe.gov/basics/quickoil.html http://www.eia.doe.gov/ http://www.barackobama.com/pdf/

factsheet_energy_speech_080308.pdf http://www.johnmccain.com//Informing/Issues/ http://www.grist.org/candidate_chart_08.html http://www.eppo.go.th/ref/UNIT-OIL.html http://www.slate.com/id/2197283/ http://www.nei.org/ http://www.pickensplan.com/

Discussion

Thank you

Any questions/comments???