Within the energy industry there are diverse opinions as to what needs to be done to solve America’s energy issues. What we all agree on is that something does need to be done to create an “energy security” for the United States. At CARE we call on a variety of experts to help us present the public with the complete energy picture. We have gathered responses from many of our Energy Council members. For presentation in the PowerLine, their comments have been edited and are abbreviated. Their complete comments can be found on CARE’s new Energy Blog. Please visit the CARE Blog, read their complete responses and add your own thoughts!

Reduce or “conserve.” It has not worked and will not worked. What bothered me the most was this: “We must continue changing the way America generates electric power, by even greater use of clean coal technology, solar and wind energy, and clean, safe nuclear power.” This has nothing to do with our importing of oil and will not make us less dependent. We use essentially no oil for power generation.
Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy Tribune
Houston, TX


I fully agree with the President's comments regarding our over-dependence on foreign energy sources and its implications for our economy and security.

In terms of implementation, the reduction of gasoline usage by 20% seems a worthy goal, and particularly if that displaced gasoline is directly associated with oil imports. Presumably this would be done by some combination of efficiency improvements and fuel substitution. For the latter, there appear to be four realistic technology options, of which two were specifically addressed in the President's message:
1. Biofuel (derivation of liquid fuels from plants)
2. Electric Power
3. Coal to Liquid (CTL)
4. Nuclear-Produced Hydrogen/Oxygen for Liquid Fuels
Given the importance of energy to our economy and security, I would hope that all of the above options are pursued aggressively and in parallel to demonstrate their potential. In the end, the market will determine which is the most cost effective.

I have heard proposals similar to the President's several times before (for example, after the oil embargos of the mid-1970s). I hope that this time we will finally take it seriously and act accordingly.
Scott R. Penfield, Jr., Registered Professional Engineer with 35 years of experience in energy production and utilization
Carthage, TN


The Bush proposals from last night were another step back from a free-market energy policy, one that puts consumers and taxpayers ahead of special interests.

Mandates on fuel efficiency, increased quotas on politically favored energy sources, and enlarging the Strategic Petroleum Reserve are not good news from a president who is very much on the defensive on energy.
Robert L. Bradley, Jr., President, Institute for Energy Research
Houston, TX


I applaud the President for his recognition that a diverse energy supply is a secure energy supply, while also understanding the importance of stepping up our domestic oil supply. 35 billion gallons by 2017 sounds great, but is not achievable without new technologies. These technologies can only come about through increased research and development dollars, not less, as the President's budget proposes.
Bob Gallagher, President, New Mexico Oil and Gas Association
Santa Fe, NM


For once that Bush may be on somewhat the right track. I agree that we need to curb our oil consumption. He is absolutely right that our dependence on foreign oil makes us vulnerable to extremists in the Middle East and Venezuela, I’m just not sure it can be helped. However, his plan to increase America’s SPR while in the short would raise oil prices, would act as a means to curb the short term abilities of outside countries to influence the American economy by using oil prices.
Alexander M. Economides, Publisher, Energy Tribune
Houston, TX


We at IAPNM fully support the president's objective of diversifying the nation's energy base, so long as it makes economic sense. The one thing I always find discouraging about these kinds of speeches is that the president and others talk about oil as if it were a bad thing. No, it's not good for our nation to be overly dependent on a single energy source. However, it's unnecessary and even dangerous for politicians to not also recognize that oil is the greatest commodity ever discovered, one that has given birth to every modern necessity and convenience. If we suddenly lost all of our oil...no, even half of our oil...our entire society would collapse into chaos.
Johnny Knorr, President of Independent Petroleum Association of New Mexico


The President’s proposal to develop more renewable energies, double the strategic petroleum reserve, develop coal and nuclear power, and increase domestic oil exploration points us in the right direction. President Bush’s words are positive; now we need action behind them. One piece of the energy puzzle is the potential contribution oil shale could make to domestic energy supplies and what’s being done to encourage exploration in this area. The United States holds the largest known concentration of oil shale in the world – an estimated 1.2 trillion barrels. At current levels of consumption, the 1.2 trillion barrels of recoverable oil shale represents 200 years of domestic oil supply. In light of the President’s comments, isn’t it time to consider opening up more Federal lands to responsible, new, environmentally-sensitive technologies and alternatives in our exploration? We need to act and move forward aggressively on domestic oil exploration and renewable energies. With the right technology and economics, oil shale resources could contribute significantly to the domestic energy supply.
Larry Vance, Chairman & CEO of Earth Search Sciences, Inc.

How many times have you said that about a book you know you should read—or even one you want to read? Various executive book summary services exist to help you glean from a leading business or motivational book with a minimal investment of time. A top-executive recommends one of these services as it allows the time strapped person to “read a book a week.”

While these services are a valuable tool, they do not touch any of the energy industry related books you may have been hoping—and even needing—to read.

As a service to our CARE members (currently available to all subscribers) we offer Editorialized Executive Book Summaries. We call them “editorialized” as they have been carefully summarized with the energy industry in mind. Rather than offering a simple overview of the content, we have done the summary with an eye for specific information that is vital to your world: energy.

You can access this quarter’s summary on Energy: The Master Resource by Robert L. Bradley, Jr. and Richard W. Fulmer by clicking on the book’s title anywhere in this section. You can read the summary online or print it out to read at your leisure.

As we add additional titles to the CARE Editorialized Executive Book Summary Library, they will be archived on the website and will be accessible for all CARE members. New members will be able to go back through the archives to access previous reviews. To make this service more valuable to you, please let us know books you’ve been trying to find the time to read. We’ll read them for you and provide you with a CARE Editorialized Executive Book Summary. Let us hear from you at info@responsiblenergy.org. Do you like this addition? Do you have a title you’d suggest for summarization?

CARE is honored to add this excellent book: Energy: The Master Resource to our list of resources. It is full of valuable information and detail. Each claim is fully documented and the book features many charts, graphs and color photos. Due to the nature of the “summary,” all of these extra details have been omitted. For complete documentation, we encourage you to read the entire book. It should be required reading for everyone—not just those in the energy business. Even our non- industry members will find this book fascinating reading. It offers a broad view of the industry while not being mired in techno jargon.

In our December newsletter, we told you about ConocoPhillip’s town-hall style meeting in Albuquerque. In January, Shell Oil came to town and CARE was, again, there. Executive Director, Marita Noon, heard John Hofmeister, President of Shell Oil, speak on “How the U.S. Can Ensure Energy Supply for the Future.”

Like ConocoPhillips, Shell realizes that the industry has not done a good job of explaining the challenges of providing energy—including how gas prices are set, and how the focus today is on supply and the focus of tomorrow must be the diversity of supply. Given the current climate in the U.S. regarding energy, Shell has realized that there is an urgent need to discuss these issues and answer tough questions. With a goal of sharing information regarding meeting the energy challenge, they have embarked on a 50-city tour for the purpose of meeting and talking with a wide variety of people. On January 24th Albuquerque was one of those cities.

Energy security has gained a higher public profile and it was certainly a primary topic in John Hofmeister’s presentation. He defined energy security as, “Affordable, available, for generations to come.” His comments paralleled CARE’s stated purpose: “to safeguard the development and availability of abundant energy."

One of the primary battle crys of his message was regarding the “available” portion of his definition. Hofmeister said they are, “Always banging on the door of congress for more access.” Because vast amounts of Federal lands are off limits, they cannot be developed which results in having to import more of the oil we use.

He said, “When it comes to conventional oil and gas, the United States is blessed with billions of barrels of untouched oil and gas still in the ground. Some estimate 75 billion of conventional oil and gas remains to be developed. Some would say it’s closer to 100 or more if we look at the entire Outer Continental Shelf of the United States. If we look at the federal lands, which are restricted to production of oil and gas, the known reserves are between 75 billion and 100 billion depending on how you want to try and look at it. In addition there are tens of billions of conventional oil and gas still in development in the Gulf of Mexico, regions that we know; areas that we have access to, which remain to be produced. So when it comes to conventional oil and gas, there’s plenty still out there, if we can have access to it. We’re pleased that the Congress recently decided to grant access to eight-plus million acres in the Southeast Gulf of Mexico, about 125 miles off the coast of Florida. That’s very helpful. It’s the first new access that we’ve had in 25 years in the Gulf of Mexico, but we appreciate that that is now available to us. We appreciate also that the President lifted a moratorium on Crystal Bay, off the Southwest coast of Alaska, which enables us to have access in new areas of Alaska which were previously restricted. These are important moves forward which help the energy security issue.”

Hofmeister believes energy security is a “perception problem,” because the reality is we have plenty of energy. In addition to the traditional energy that is unavailable for development, there are vast amounts on nonconventional sources. Some of those he addressed include oil shale, LNG, clean coal, bio fuels—even wind, solar and hydrogen cells.

Another area that Hofmeister brought up that is congruent with the CARE message is education. He said, “Energy is not taught in our schools. We teach virtually everything else people need to know in life— language, mathematics, science, history, social science—we teach everything that children need to know about for the future. What about energy? Energy as we described is the source of our way of life and the source of our economic strength. But we don’t teach about it—where it comes from, how it’s used, how it can be managed socially responsibly.”

We applaud Shell’s efforts to educate the public with the energy realities we face today. While few real answers were offered beyond a sound bite, it is clear that Shell is working to make people aware of the energy challenges and opportunities we have today. The more people know, the more they will understand the complete energy picture.

While the energy industry, environmental groups and government may disagree on the methods used to reach the target, most everyone seems to agree that we are shooting for the same mark: energy security for America and less dependence on foreign sources for oil—especially when they profit governments who work against U.S. interests.

David Victor, a senior fellow at Freeman Spogli Institute where he directs the Program on Energy and Sustainable Development asserts, “If you look at where the revenues are going from Iran, Venezuela, and so on, there’s a long list of folks who are doing things that are contrary to our interests with the money that ultimately is coming out of the pockets of American consumers, Dealing with that is job one.” In his State of the Union Address, President Bush follows the same thinking. He said, “For too long our nation has been dependant on foreign oil. And this dependence leaves us more vulnerable to hostile regimes and to terrorists. It’s our vital interest to diversify America’s energy supply—the way forward is technology. We must step up domestic oil production in environmentally sensitive ways.”

President Bush’s comments prompt us to look at one of those technological advances that have the potential to move us closer to this common goal. And it is one that is quietly moving forward in the midst of the noise about wind, solar and bio fuels. This “alternative” can fuel a passenger jet.

In late December energy news was made. For the first time in thirty years, the Interior Department granted leases for oil shale extraction experiments for projects in Northwestern Colorado. The parcels chosen for research and development projects were awarded to three companies with Shell Oil’s plans having the most maturity. Since 1996 they have been testing new processes on private land with enough success to warrant moving forward. These new leases will allow Shell to continue their ongoing research.

Producing fuel from rocks—organic marlstone—is not a new thing. Hundreds of years ago oil shale was used as a direct heat source, much like coal. In the late 1800’s a liquid fuel from oil shale, know as kerogen (which can be converted to oil), was produced and used through the 1920’s when crude oil was successfully drilled resulting in far less expensive production. Back in the 70’s, during the Carter Administration, oil companies received billions of dollars in alternative-energy subsidies to produce oil from a stretch of desolate looking land in Colorado’s Piceance Basin. At that time, the technique used to produce oil was far too expensive—both economically and environmentally—to be commercially viable. The rock had to be mined, transported to a processing facility where it is pulverized and heated to separate the oil from the waste material. When the price of oil dropped, so did the oil shale’s momentum and the projects died.

Pessimists proclaim that, “the rocks are stubborn, an illusive bonanza, promising much, delivering little. Oil shale’s history is one of delusions leading to disappointments.” These comments are well founded as extracting oil from shale is no simple task, explaining why the reserves remain almost completely undeveloped to date. But emerging technology, as advocated in the President’s speech, offers hope for unlocking the awesome potential using a new approach that does not destroy the landscape and may be economically practical. Shell Oil is one of the leaders in this ongoing effort. They did not leave Colorado back in 1982 when others quit. Shell engineers—without government subsidy—have developed a method for baking the rock within the ground. This process called in-situ (in-ground) conversion process (ICP) involves inserting electric heating rods, then pumping the melted oil to the surface.

While Shell has been working on oil shale for 25 years, they began testing ICP in 1996 on private land. Their tests have been successful enough to move the project forward. Shell, and others, had to submit detailed development plans to the Interior Department prior to being awarded the leases. Shell’s initial experiment with ICP produced 1,700 barrels of oil that is equal to the American Petroleum Institutes quality scale for making jet-fuel, diesel and gasoline—putting naysayer’s comments, that “oil shale is the poorest of fossil fuels, containing far less energy than Cap’n Crunch,” to rest.

Not only does the ICP produce a higher quality fuel than the strip mining method, it is also has significant environmental advantages. ICP does not involve open- pit mining; it requires fewer refining steps; allows access to deeper resources; provides higher recovery efficiency than previous oil shale processes; and does not produce the large tailing piles of spent shale that leach into surface waterways.

Shell’s work, known as the Mahogany Research Project—named for the mahogany layer of rock that lies beneath Colorado, Utah and Wyoming, can now continue due to the leases granted in December. Jill Davis, Public Affairs Representative for the Mahogany Research Project says, “The leases for oil shale are just the first step. We’ve gained access to the land via the lease, but not a permit from the State (DRMS) to do the construction, production, etc. This is a mining operation according to state law, not an oil and gas operation, so it requires a mining permit.”

Shell is not the only player in this game. Petro Probe, a private petroleum company based in Montana, has received a patent for a different field-tested in-situ system. Their’s is a closed system—with nothing going into the atmosphere. It produces primarily gas— not oil—and has interesting advantages including producing water suitable for agriculture. Larry Vance, Chairman and CEO of Petro Probe’s parent company, says, “It would be a travesty not to develop one of the United State's largest reserves of hydrocarbons and we have every intention of performing our field test this year to establish our cost.”

C. Stephen Allred, assistant secretary of the interior for land and minerals management, says, “These oil shale (research, development and demonstration leases will help us determine how industry might develop this tremendous resource effectively and economically.” Shell believes that ICP will allow them to produce oil in the range of $25-30 per barrel— though there are no production predictions at this time.

With an estimated two trillion barrels of oil thought to be recoverable through this process—nearly four times Saudi Arabia’s current reserve—oil shale could change the entire geopolitical and economic map world. The United States would instantly have the world’s largest oil reserves. So much that we’d never have to worry about Saudi Arabia or Hugo Chaves again. Instead tanks would be lined up waiting to export America’s bounty to the rest of the world.