Fuels of the future

Indy Star
August 27, 2006

Reducing America's dependence on foreign oil isn't just about the current pain at the pump. More important, it's about national security, economic expansion, conservation of natural resources and environmental protection.

Which alternative fuels hold the most promise? How quickly must the U.S. convert to new fuels? What are the long-term strategic and economic implications? At the request of Sen. Richard Lugar, experts will gather for a national energy summit Tuesday at Purdue University to discuss those questions and more.
In advance of the summit, we asked Purdue President Martin Jischke, Amy Myers Jaffe of Rice University's Baker Institute for Public Policy and Sue Cischke, vice president of environmental and safety engineering at Ford Motor Co., to explore issues surrounding the nation's energy needs.

By Martin C. Jischke

U.S. must break its addiction to foreign oil
The time is now to chart a strategic plan to make America less dependent on foreign oil.
The reasons -- geopolitical and economic -- have never been so clear or so compelling. As Sen. Richard Lugar states, "We must do it if for no other reason than our own security. A majority of the world's oil reserves are controlled by troubled nations, leaving the world vulnerable to manipulation."
The United States -- with 4.6 percent of the world's population -- produces 17.5 percent of our planet's energy, but it consumes 23.6 percent. Events of the past several years have made it clear that we cannot continue to tolerate this domestic undersupply and over consumption.
Fortunately, we have the means to correct this imbalance -- if we make a strong commitment to the solution. We depend on oil for about 40 percent of our energy, and we have both the technology and the resources to reduce that dependency. America is blessed with the richest farmland anywhere. We also have ample supplies of coal. These vast resources can be converted to liquid fuels to run our vehicles, factories and farms. If we move with enough conviction, America -- with Indiana leading the way -- can produce enough bio-based and coal-derived energy to significantly reduce the need for oil imports.
This reduction ultimately would reduce the price of oil on the world market and decrease the enormous costs of security now needed to keep oil moving through global markets. American farmers and the coal industry would benefit from the increased demand for their products. Because biofuels are a renewable resource and coal supplies are so large, this would not be a short-term fix. It can change the numbers in America's favor permanently.
As Gov. Mitch Daniels points out in his recent message about our state's energy strategy, Indiana already has more than 40 gasoline pumps that offer E85 fuel, several ethanol plants and the world's largest soy biodiesel facility. The state recently established a "BioTown," in Reynolds, a town in White County that strives to use biofuels for all its energy needs.
Biofuels transform renewable plant materials -- such as corn, soybeans, trees and even manure -- into transportation fuels and gas. Our state's ethanol fuel industry already is a role model for others. Just two years ago, Indiana had one ethanol-producing plant. This year, we have 11 ethanol plants, three biodiesel plants, and more are planned. The Purdue College of Agriculture and our Laboratory for Renewable Resources Engineering lead the Midwest University Consortium for Sustainable Biobased Products and Bioenergy.
Ethanol is produced from fermentation of starch and sugars and, in the United States, about 90 percent of ethanol comes from corn. During the past 25 years, ethanol has been an industry that existed on government subsidies -- now $2.5 billion annually nationwide. However, with oil prices around $70 a barrel, for ethanol to be profitable we need only modest price guarantees, not subsidies.
Indiana is rich in coal resources, too. The Hoosier state is part of the Illinois Coal Basin Deposits, which hold more than 130 billion tons of coal, representing 25 percent of the national coal reserves and enough to meet the current U.S. coal demands for more than 100 years. Coal can be converted to various forms of energy.
Clean-coal technology research at Purdue's Coal Transformation Laboratory in Discovery Park's Energy Center shares an $85 million federal Department of Energy grant with Illinois and Kentucky to further develop clean coal technologies. Research also is focusing on developing liquid coal for transportation and other uses.
Indiana is doing more than studying clean-coal technology and biofuels to make America less dependent on foreign oil. Purdue and other universities, as well as the state and industry, are investing expertise, time and funding to develop or convert:
Biomass conversion to biogas. Using technology to produce electricity from animal waste and other biomass.
Wind turbines for high-efficiency wind power and decreased noise.
Nuclear power that uses "passive cooling systems," that will keep operating during electrical power interruptions.
Solar energy efficiency improvements with low-cost production of solar cells that collect sunlight and generate electrical energy.
Electrochemical methods and hydrogen energy systems that change the way we generate, store and use energy.
The state's political, educational and business leaders are ready to create a new future of alternative fuels. Indiana can lead the way, but we need a national commitment as well. Together we can make the future secure.
It's time for a declaration of energy independence.
Martin C. Jischke is the president of Purdue University and serves on the U.S. President's Council of Advisers on Science and Technology.

Security at risk without changes

By Amy Myers Jaffe
It's pretty scary to think that American mobility could become more vulnerable to Middle East instability than ever before, but that's a real possibility. Security of U.S. energy supply will be highly influenced by international events in the coming years. Recent terrorist schemes and military conflicts in the Middle East have thrown a spotlight on the inherent risks associated with heavy reliance on oil supplies from the Middle East. But, disturbingly, experts agree that world dependence on Middle East oil is likely to grow rapidly in the future.
America imported 12.9 million barrels in 2004, or about 63 percent of total consumption of roughly 20.5 million barrels. That is up from 35 percent in 1973. The share of imported oil is projected to grow close to 70 percent by 2020, with the United States becoming increasingly dependent on Persian Gulf supply. U.S. imports from the Persian Gulf are expected to rise from 2.5 million barrel (22 percent of total U.S. imports) in 2003 to 4.2 million barrels (62 percent) by 2020, according to forecasts by the U.S. Department of Energy.
Previously, the industrialized West counted on the countries of the Persian Gulf and Venezuela to make the billion-dollar investments needed to meet rising global demand. But those countries are no longer investing sufficient amounts to meet the expected rise in oil demand in the United States, China and elsewhere. Expecting this reluctance to invest to change suddenly because that would suit American drivers is absurd; refusing to prepare for the opposite is clear folly.
Many Persian Gulf nations currently face both internal instability and future succession problems, boding poorly for future security of supply. Al-Qaeda has targeted vitally important oil facilities in Saudi Arabia, and Iranian assertiveness on its pursuit of nuclear weapons and international terrorism hangs over oil markets like a sword of Damocles. Any broadening of the conflict between Sunni and Shia populations in Iraq and beyond would be particularly threatening to oil supplies since large Shia populations sit on top of oil production not only in Iraq, but also in Saudi Arabia, parts of Kuwait and in Iran.
The rise in future U.S. oil imports will center squarely on the transportation sector that represents more than two-thirds of total petroleum use and will constitute over 70 percent of the increase in demand. Rather than leave American mobility at the mercy of events in the Middle East we cannot control (a fact that the war in Iraq so painfully demonstrates), we need to mobilize backup alternative fuel solutions as quickly as possible. The fact that this cannot be implemented overnight isn't an excuse to do nothing.
We are a can-do nation. Americans would like a choice of automotive fuels -- one that mirrors the way we currently can select from over a dozen energy sources to generate household electricity. The technology already exists. We have the capability to create hybrid automobiles that can run more efficiently on more than one energy source, including a combination of electric battery, gasoline and biofuels. Our car companies are producing flexible fuel vehicles that can run on biofuels for Brazil, but could do more to get such cars on the road in the United States at an added cost of only $40 per vehicle. If I could plug my car in at home and charge my battery, an Arab oil cutoff would not leave me stranded because almost all electricity is generated in this country without oil. If someday we could generate that electricity with solar roof panels, we could kiss Middle East oil goodbye.
Given the high stakes, waiting for the market to deliver energy security seems like a long process. California has passed emission targets that would force automakers to pony up better technologies more quickly. Japan both subsidized its car companies and poured federal dollars into public and private research and development to get hybrid cars off the drawing board and into car dealerships. A levy on a portion of energy company profits not being reinvested to create future supplies might be one way to fund a national effort. A large consumer tax on purchases of gas-guzzling vehicles would be another way to find the revenues for a serious energy program.
We cannot ensure that Middle East oil supplies will be there to meet world demand. But we can control our own consumption through regulation, conservation and technology development. The longer we wait, the more likely the transition will be forced by painful events instead of national will.
Jaffe is the Wallace S. Wilson Fellow in Energy Studies at Rice University's Baker Institute for Public Policy.

Infrastructure needed to support hybrids

By Sue Cischke
Energy powers the industrial and manufacturing growth of the United States. The energy supply disruptions of last summer, increases in global demand, and geopolitical concerns have led to significantly higher energy prices and consumer angst at the fuel pump.
Our nation's energy challenges can be properly addressed only by an integrated approach: a partnership of all stakeholders, including the automotive industry, the fuel industry, government and consumers.
From an industry viewpoint, it is critical to note the significant steps already taken to improve the fuel efficiency of our products. Fuel economy rates in cars increased by more than 100 percent since the mid 70s, for trucks and SUVs the rates increased by 53 percent. We are now moving ahead with a range of technological solutions simultaneously, because there is simply no single solution, no "silver bullet." We are working to accelerate the commercial application of advanced vehicle technologies, including flexible fuel vehicles (FFVs), hybrids, advanced clean diesels, hydrogen-powered internal combustion engines and fuel cell vehicles.
Two years ago, Ford launched the world's first gasoline electric full hybrid SUV and we will expand that technology to other vehicles in our lineup. In addition to hybrids, we believe that greater use of renewable fuels like ethanol, a domestically produced, renewable fuel, will help reduce reliance on foreign oil. FFVs are able to operate on up to 85 percent ethanol, or gasoline, or any mixture in between -- providing customers with an option to choose between E85 and gasoline.
As a whole, U.S. automakers will have produced a total of nearly 6 million FFVs by the end of this year. If all of these vehicles were operated on E85, over 3.6 billion gallons of gasoline a year could be saved. That's like saving a full year of gasoline consumption in a state such as Missouri or Tennessee. E85 can play an increasingly significant role in addressing our nation's energy concerns. It is a pathway for today with the ability to make an impact now.
Recently, the auto industry has committed to doubling the number of bio-fuel capable vehicles by 2010. But there is a problem. Even though the volume of E85 vehicles continues to grow rapidly, there are less than 800 E85 fueling stations in the U.S, out of more than 170,000 retail gasoline stations nationwide. The infrastructure must be expanded, but without the strong support of fuel providers, we cannot move forward far enough or fast enough.
Policy makers also have a key role. We would like to see government incentives to encourage the oil industry or others to accelerate E85 infrastructure investment as well as more research and development for advanced vehicle technologies and renewable fuels.
There is even a role for the consumer, because in the end, it will ultimately be consumers' choice of vehicles, how many miles they drive and their driving behaviors that will determine how much motor fuel we consume.
The challenges are considerable, but not insurmountable. We have to ensure that our business is sustainable by making vehicles that continue to meet the changing needs of the 21st century. That's a responsibility all automakers owe customers, shareholders and employees. But at another level, all of us have the opportunity to do something about energy independence, and that's a responsibility we owe to future generations.
Cischke is vice president of environmental and safety engineering at Ford Motor Co.