[Graeme]

Mideast Oil Forever?

$this->bbcode_second_pass_quote('', '[')i]More than eleven years ago, as a young Republican Congressional majority threatened deep cuts to renewable energy research and development programs, The Atlantic Monthly published the following article, "Mideast Oil Forever?," by Joseph Romm and then Under Secretary of Energy Charles Curtis. As oil pricing pushes closer to $100 a barrel -- and in fact, may hit that milestone before the end of the year -- it's worth looking back at this early and influencial piece of analysis published back in April 1996.

Donald Hodel, who was a Secretary of Energy under Ronald Reagan, has said that we are "sleepwalking into a disaster," and predicts a major oil crisis within a few years. Irwin Stelzer, of the American Enterprise Institute, says that the next oil shock "will make those of the 1970s seem trivial by comparison." Daniel Yergin says, "People seem to have forgotten that oil prices, like those of all commodities, are cyclical and will go up again." James Schlesinger, who was the Secretary of Energy under Jimmy Carter, has said, "By the end of this decade we are likely to see substantial price increases." In March of last year Robert Dole, the Senate majority leader, said in a speech at the Nixon Center for Peace and Freedom, "The second inescapable reality of the post-twentieth-century world is that the security of the world's oil and gas supplies will remain a vital national interest of the United States and of the other industrial powers. The Persian Gulf...is still a region of many uncertainties...."


That leaves one solution for reducing consumption: the technological approach, which draws on America's traditional leadership in research and development. Here tremendous progress has been made. Given the uncertain nature of long-term, high-risk R&D in leapfrog technologies, the prudent approach is to explore a number of possibilities. The DOE has invested in the development of cars and trucks that are highly fuel-efficient, along with cars that run on electricity, on liquid biofuels from crops, crop waste, and municipal solid waste, or on natural gas.

This scenario, a highly credible one given Shell's reputation, is tantalizing, because it holds out the possibility that the world could within a few decades begin to realize the dream of nearly pollution-free energy. Consider also that the United States, which is now the leader in most areas of renewables technology, could simultaneously reduce its dependence on foreign energy supplies, reverse the trend toward an ever-increasing energy trade deficit, and capture a large share of what promises to be perhaps the largest new job-creating sector of the international economy.

Yet according to Shell's numbers, annual sales in renewable-energy technologies may hit $50 billion in 2020 and almost $400 billion in 2040. In the later year such an industry would support several million jobs.
Moreover, as said above, the United States will be importing $100 billion worth of oil annually ten years from now. With prudent federal investment today, that might be the peak, and we might then see a gradual decline as U.S. technology and domestic fuels, including homegrown biomass, replace imported oil.