Segment 2 Of 3 Previous Hearing Segment(1) Next Hearing Segment(3)
SPEAKERS CONTENTS INSERTS Tables
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71–798PS
2001
THE NATION'S ENERGY FUTURE: ROLE OF
RENEWABLE ENERGY AND ENERGY EFFICIENCY
HEARING
BEFORE THE
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
FEBRUARY 28, 2001
Serial No. 107–24
Printed for the use of the Committee on Science
Available via the World Wide Web: http://www.house.gov/science
COMMITTEE ON SCIENCE
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HON. SHERWOOD L. BOEHLERT, New York, Chairman
LAMAR S. SMITH, Texas
CONSTANCE A. MORELLA, Maryland
CHRISTOPHER SHAYS, Connecticut
CURT WELDON, Pennsylvania
DANA ROHRABACHER, California
JOE BARTON, Texas
KEN CALVERT, California
NICK SMITH, Michigan
ROSCOE G. BARTLETT, Maryland
VERNON J. EHLERS, Michigan
DAVE WELDON, Florida
GIL GUTKNECHT, Minnesota
CHRIS CANNON, Utah
GEORGE R. NETHERCUTT, JR., Washington
FRANK D. LUCAS, Oklahoma
GARY G. MILLER, California
JUDY BIGGERT, Illinois
WAYNE T. GILCHREST, Maryland
W. TODD AKIN, Missouri
TIMOTHY V. JOHNSON, Illinois
MIKE PENCE, Indiana
FELIX J. GRUCCI, JR., New York
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MELISSA A. HART, Pennsylvania
J. RANDY FORBES, Virginia
RALPH M. HALL, Texas
BART GORDON, Tennessee
JERRY F. COSTELLO, Illinois
JAMES A. BARCIA, Michigan
EDDIE BERNICE JOHNSON, Texas
LYNN C. WOOLSEY, California
LYNN N. RIVERS, Michigan
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
BOB ETHERIDGE, North Carolina
NICK LAMPSON, Texas
JOHN B. LARSON, Connecticut
MARK UDALL, Colorado
DAVID WU, Oregon
ANTHONY D. WEINER, New York
BRIAN BAIRD, Washington
JOSEPH M. HOEFFEL, Pennsylvania
JOE BACA, California
JIM MATHESON, Utah
STEVE ISRAEL, New York
DENNIS MOORE, Kansas
MICHAEL M. HONDA, California
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C O N T E N T S
February 28, 2001
Witness List
Hearing Charter
Opening Statement by Representative Sherwood L. Boehlert (NY–23), Chairman, Committee on Science, U.S. House of Representatives
Opening Statement by Representative Ralph M. Hall (TX–4), Ranking Member, Committee on Science, U.S. House of Representatives
Opening Statement by Representative Lynn Woolsey (CA–6), Ranking Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Opening Statement by Representative John B. Larson (CT–1), Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Opening Statement by Representative Sheila Jackson Lee (TX–18), Member, Subcommittee on Energy, Committee on Science, U.S. House of Representatives
Panel:
Mary J. Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration, U.S. Department of Energy
Oral Statement
Prepared Statement
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Biography
Kenneth K. Humphreys, Senior Staff Engineer, Energy, Science, and Technology Division, Pacific Northwest National Laboratory
Oral Statement
Prepared Statement
Biography
Financial Disclosure
John P. Holdren, Professor, Harvard University; Chair, President's Committee of Advisors on Science and Technology (PCAST), Energy Research and Development Panel
Oral Statement
Prepared Statement
Biography
Financial Disclosure
Joel Darmstadter, Senior Fellow, Energy and Natural Resources Division, Resources for the Future
Oral Statement
Prepared Statement
Biography
Financial Disclosure
Discussion:
Steps to Improve Energy Efficiency and Increase Use of Renewables
Incentives
EIA Assumptions
Education/Information
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Impacts of Energy Conservation/Efficiency
Fossil Fuel Supply and Market Factors
Cellulosic Biomass
Hydrogen/Fuel Cells
Impacts of R&D Funding Cuts
Energy Use Per Capita
Future Oil Costs
Future Natural Gas Prices
Conservation Efficiency and the Effect of Prices
Energy Conservation and Efficiency
Environmentally Damaging Fuels
Significance of Man-Made CO Releases
Hydroelectric Power
More Efficient Computers
Climate Change Theory and Energy Policy
APPENDIX 1: Answers to Post-Hearing Questions Submitted by Members of the Subcommittee on Energy
Mary J. Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration, U.S. Department of Energy
Answers to Questions Submitted by Republican Members
Accuracy of EIA's Forecast
Role of Tax Incentives
Factors in Use of Best Available Technology
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EIA Energy Cost Projections
Answers to Questions Submitted by Congressman Lamar Smith (TX–21)
Renewables Ranking
Geothermal Efficiency
Deep Gas Potential
Renewable Percentage of Total Energy Supply
Answers to Questions Submitted by Democratic Members
Projected Household Energy Use
Price Effect on Industry Energy Use
Municipal Solid Waste Gas
Kenneth K. Humphreys, Senior Staff Engineer, Energy, Science, and Technology Division, Pacific Northwest National Laboratory
Answers to Questions Submitted by Republican Members
21st Century Scenarios
Climate Stabilization Scenario
Stabilization Scenario Mix of Fuels
Developing Technology Goals
PNL and EIA Forecasting Compared
Answers to Questions Submitted by Democratic Members
Efficiency Improvement Forecasts
Year 2001 Fuel Mix
Energy Demand Elasticity
Climate Stabilization Scenario
Energy R&D Funding
John P. Holdren, Professor, Harvard University; Chair, President's Committee of Advisors on Science and Technology (PCAST), Energy Research and Development Panel
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Answers to Questions Submitted by Republican Members
Research, Development, and Deployment Priorities
Carbon Dioxide Control
R&D Funding
DOE Program Evaluation
Answers to Questions Submitted by Democratic Members
Evaluation of PCAST Report Based on Present Conditions
Creating Renewable Energy Market Penetration
Increasing Biomass Ethanol Supply
Joel Darmstadter, Senior Fellow, Energy and Natural Resources Division, Resources for the Future
Answers to Questions Submitted by Republican Members
Solar Technologies Markets
Renewable Energy Policies
Answers to Questions Submitted by Democratic Members
The Role of Federal Government R&D
Tax Credits and Portfolio Standards
APPENDIX 2: Additional Material for the Record
Letter from John Kane, Vice President, Nuclear Energy Institute, to Chairman Sherwood Boehlert, Committee on Science
Letter from Dr. Ned R. Sauthoff, President, Institute of Electrical and Electronic Engineers (IEEE)—USA
Energy Efficiency Policy—IEEE Position
Solar and Renewable Electricity—IEEE Position
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Financial Disclosure—IEEE
THE NATION'S ENERGY FUTURE: ROLE OF RENEWABLE ENERGY AND ENERGY EFFICIENCY
WEDNESDAY, FEBRUARY 28, 2001
House of Representatives,
Committee on Science,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in Room 2318 of the Rayburn House Office Building, Hon. Sherwood L. Boehlert (Chairman of the Committee) presiding.
Committee on Science
U.S. House of Representatives
Washington, DC 20515
Hearing on
The Nation's Energy Future: Role of Renewable Energy and Energy Efficiency
Wednesday, February 28, 2001
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Witness List
Panel
Mary J. Hutzler
Director,
Office of Integrated Analysis and Forecasting,
Energy Information Administration,
U.S. Department of Energy
John P. Holdren
Professor, Harvard University;
Chair, President's Committee of Advisors on Science and Technology (PCAST),
Energy Research and Development Panel
Kenneth K. Humphreys
Senior Staff Engineer,
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Energy, Science, and Technology Division,
Pacific Northwest National Laboratory
Joel Darmstadter
Senior Fellow,
Energy and Natural Resources Division,
Resources for the Future
Section 210 of the Congressional Accountability Act of 1995 applies the rights and protections covered under the Americans with Disabilities Act of 1990 to the United States Congress. Accordingly, the Committee on Science strives to accommodate/meet the needs of those requiring special assistance. If you need special accommodation, please contact the Committee on Science in advance of the scheduled event (three days requested) at (202) 225–6371 or FAX (202) 225–0891.
Should you need Committee materials in alternative formats, please contact the Committee as noted above.
HEARING CHARTER
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COMMITTEE ON SCIENCE
U.S. HOUSE OF REPRESENTATIVES
The Nation's Energy Future: Role of
Renewable Energy and Energy Efficiency
WEDNESDAY, FEBRUARY 28, 2001
10:00 A.M.–12:00 P.M.
2318 RAYBURN HOUSE OFFICE BUILDING
I. Purpose
On Wednesday, February 28, 2001, the Committee on Science will hold a hearing on ''The Nation's Energy Future: Role of Renewable Energy and Energy Efficiency.'' The purpose of the hearing is to address three questions: (1) What are the current and projected near- and mid-term contributions of renewable energy and energy efficiency to the Nation's energy mix? (2) Have renewable energy and energy efficiency performed as expected, and if not, why not? (3) What programs and/or policies are needed to ensure that renewable energy and energy efficiency achieve their potential?
The panel witnesses include: (1) Ms. Mary J. Hutzler, Director, Office of Integrated Analysis and Forecasting, Energy Information Administration, U.S. Department of Energy; (2) Professor John P. Holdren, Harvard University, Chair, President's Committee of Advisors on Science and Technology (PCAST) Energy Research and Development Panel; (3) Mr. Kenneth K. Humphreys, Senior Staff Engineer, Energy, Science and Technology Division, Pacific Northwest National Laboratory; and (4) Mr. Joel Darmstadter, Senior Fellow, Energy and Natural Resources Division, Resources for the Future.
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2. Background
Affordable energy is essential to the Nation's continued prosperity. Volatile world oil markets, soaring natural gas and electricity prices, and energy shortages in a number of parts of the U.S. have replaced the relatively low energy prices enjoyed over most of the past two decades. In addition, there are increasing concerns about the environmental impacts of energy use, particularly with respect to climate change.
Consequently, energy is again on the front burner of the Nation's and the new Administration's agenda. President George W. Bush recently announced the creation of a high-level energy task force headed by Vice President Richard Cheney, and the Congress is expected to begin work on comprehensive energy legislation that will include energy research, development, demonstration, and commercialization measures under the jurisdiction of the Science Committee.
These factors have led to a renewed interest in the role of renewable energy and energy efficiency. Renewable energy-e.g., sunlight, wind, hydro, geothermal, and biomass-offers the promise of clean, abundant energy for many applications, although hydro, particularly large-scale hydro, is controversial in its own right from an environmental perspective. Energy efficiency focuses on ways to use energy more productively, so that fewer energy resources are needed. Energy efficiency-including the use of new and improved technologies, conservation management techniques, financial incentives, regulations, and standards-can be considered an energy alternative to both conventional and renewable energy sources.
Current and Projected U.S. Energy Supply/Demand
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Demand by Sector
According to the Energy Information Administration (EIA), U.S. energy consumption in 1999 totaled 96.1 quadrillion Btu(see footnote 26) (Quads) in four sectors: transportation, residential, commercial, and industrial. As shown in Table 1, EIA's December 2000 Annual Energy Outlook 2001 (AOE2001)(see footnote 27) projects U.S. energy consumption in 2020 to total 127 Quads—a 32.1% increase—for its ''reference case.''(see footnote 28) EIA projections incorporate efficiency standards for new energy-using equipment in buildings, as well as efficiency standards for motors mandated through Federal law.(see footnote 29)
84
71798d3.eps
EIA's AEO2001 reference case provides the following projections by sector:
Transportation sector energy demand is projected to increase 46% from 1999 to 2020. Within that increase, however, the share of gasoline is expected to decline from about 60% to 55%, while the shares of diesel and jet fuels are expected to rise. EIA's projections incorporate expected higher new vehicle efficiencies, which are offset by increases in travel.
Residential sector energy demand is projected to increase 27.5%, with the most rapid growth coming from computer, electronic equipment, and appliances.
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Commercial sector energy demand is projected to increase 33%. Computers and office and telecommunications equipment are expected to account for most of the rise.
Industrial sector energy demand is projected to increase 24%, with increasing use of electricity and natural gas. Non-energy-intensive manufacturing is expected to grow at nearly three times the rate of energy-intensive manufacturing. Cogeneration capacity is projected to increase by 19 billion watts (gigawatts) by 2020.
Demand by Energy Source and Delivery
Table 2 shows how U.S. energy demand is projected to be met by oil, gas, coal, nuclear, renewables, and electricity imports for EIA's AEO2001 baseline case; Table 3 shows in what form energy is to be delivered to consumers; and Table 4 provides a detailed breakdown of U.S. electricity generation by energy source.
71798e3.eps
71798f3.eps
EIA's AEO2001 reference case provides the following projections for conventional energy sources:
Between 1999 and 2020, oil demand is projected to grow 33%, led by growth in the transportation sector, which accounts for about 70% of U.S. oil consumption. U.S. crude oil production is expected to decline from about 5.9 million to 5.1 million barrels per day. To make up for declining domestic production and increased demand, oil imports should increase from about 51% to almost 64% of U.S. consumption by 2020. The average world oil price is projected to fluctuate over the period, eventually reaching $22.41 per barrel in 2020.
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Over the same period, U.S. coal consumption is projected to increase 22%, with electricity generation constituting nearly 90% of the demand for coal. The average minemouth price of coal is projected to decline from $16.98 per ton in 1999 to $12.70 per ton in 2020 due to increasing productivity in mining, a shift to lower-cost western production, and competitive pressures on labor costs.
Natural gas demand is projected to grow by 62% by 2020, primarily as a result of rising demand for its use in electricity generation. The average wellhead price of natural gas is projected to fluctuate and reach $3.13 per thousand cubic feet in 2020. Technological improvements in natural gas exploration and production are expected to slow price increases.
Electricity demand is projected to increase 45% and average electricity prices to decline from 6.7 cents to 6.0 cents per kilowatt-hour in 2020. Electricity industry restructuring is expected to contribute to lower prices through reductions in operating, maintenance, administrative, and other costs.
About 393 gigawatts of new generating capacity is expected to be needed by 2020, both to meet growing demand and to replace retiring nuclear plants and fossil-fueled units. Of this new capacity, 92% is projected to be natural gas-fueled combined cycle or combustion turbine technology. The share of natural gas for electricity generation is projected to increase from 16% to 36%, and the share of coal to decrease from 51% to 44% because of industry restructuring. Nuclear's share is also projected to decline almost 40% as nuclear capacity is taken out of service because of operating license expirations. No new nuclear units are expected to become operable by 2020 because natural gas and coal plants are projected to be more economical.
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Renewables
Table 5 shows the AEO2001 projected renewable electricity generation by source. In 2020, about 55% of renewables are used for electricity generation and the rest for dispersed heating and cooling, industrial uses (including cogeneration), and fuel blending.
71798g3.eps
The use of renewable energy technologies for electricity generation is projected to grow slowly in the EIA AEO2001 reference case because of the relatively low costs of fossil fuel-fired units and because of the advantages electricity restructuring confers to less capital-intensive natural gas technologies. States with renewable portfolio standards, which specify a minimum share of generation or sales from renewable sources, contribute to the expected growth. Growth in renewable fuel consumption, including ethanol for gasoline blending, will be primarily as a result of State mandates.
Hydro's share of the electricity supply from renewables is expected to decline to 67% in 2020, compared to 80% in 1999. Although a net 600 megawatts of new hydropower capacity is expected to be added, it does not offset the projected decline in generation from existing facilities, as increasing environmental and other competing needs reduce their average productivity.
Most of the projected growth in renewable electricity generation is expected from biomass, landfill gas, geothermal energy, and wind power. The largest increase is projected for biomass, with cogeneration accounting for more than one-half of the expected growth. Dedicated biomass plants and co-firing in coal plants account for the remainder. Electricity generation from municipal solid waste, including landfill gas, is projected to increase 72% by 2020. No new capacity additions are projected for plants that burn solid waste, but landfill gas capacity is projected to grow by 2.1 gigawatts.
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Geothermal energy capacity is projected to nearly double. Intermittent generation from wind power is expected to increase in the near term as a result of the extension of the Federal production tax credit through 2001 (at 1.7 cents per kilowatt-hour) and by additional State incentives. Total wind capacity is projected to more than double by 2010, but capacity additions are expected to slow after 2010 without additional incentives. High capital costs, lower output per kilowatt, and intermittent availability are among the competitive disadvantages of this technology relative to conventional generating technologies. Grid-connected photovoltaics are projected to add nearly 900 megawatts but should remain small contributors to overall electric power supply. Off-grid photovoltaics, which are not included in the projections, are expected to continue to increase rapidly.
EIA has also produced an AEO2001 ''high renewables case'' that assumes more favorable characteristics for non-hydro renewable energy technologies than in the reference case. These assumptions include: (1) a 24% average reduction in capital costs by 2020 relative to the reference case; (2) lower operations and maintenance costs; (3) increased biomass fuel supplies; and (4) higher capacity factors for solar and wind power plants.
While more rapid technology improvements are projected to increase renewable energy use, the overall lead of fossil-fueled technologies in U.S. electricity supply is not expected to change. Total generation from non-hydro renewables is projected to reach 242 billion kilowatt-hours in 2020, compared with 146 billion in the reference case. About 51 billion kilowatt-hours of the projected difference is from additional intermittent wind capacity and 41 billion is from additional baseload geothermal capacity. Solar central station technologies are projected to remain too expensive, but small-scale photovoltaics are expected to grow more rapidly.
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The projected increase in renewable energy use in the high renewables case reduces fossil fuel use relative to the reference case projection, lowering projected carbon dioxide emissions by 14 million metric tons carbon equivalent. Retail electricity prices are not projected to change significantly from the reference case.
Energy Efficiency
As noted earlier, energy efficiency-including the use of new and improved technologies, conservation management techniques, financial incentives, regulations, and standards—can be considered an energy alternative to both conventional and renewable energy sources.
One measure of energy efficiency's role can be captured by energy intensity, measured as energy use per dollar of gross domestic product (GDP). Between 1970 and 1986, energy intensity declined at an average annual rate of 2.3%—from about 19,000 Btu to 13,000 Btu per dollar—as the economy shifted to less energy-intensive industries and more efficient technologies. Per capita energy use also declined by nearly 4%. During this same period, total U.S. energy consumption grew by about 14%, with increases in the transportation and residential/commercial sectors of 29% and 26%, respectively, and a decrease of nearly 4% in the industrial sector.
Between 1986 and 1999, which had slower price increases—and price declines in some sectors—and growth in more energy-intensive industries, intensity declines moderated to an average of 1.3% per year. Total U.S. energy consumption grew by 19%—almost 6% in the transportation sector, 7% in the residential/commercial sector, and 6.5% in the industrial sector. Per capita energy use also increased by nearly 10%.
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AEO2001 projects energy intensity to decline at an average annual rate of 1.6%—from about 10,900 to 7,700 Btu per dollar in 2020, a drop of nearly 30%—as efficiency gains and structural shifts in the economy offset the expected growth in demand for energy services. GDP is estimated to increase by 86% between 1999 and 2020, compared with a 32% increase in primary energy use. Relatively stable energy prices are expected to slow the decline in energy intensity, as is increased use of electricity-based energy services. When electricity claims a greater share of energy use, consumption of primary energy per dollar of GDP declines at a slower rate, because electricity use contributes both end-use consumption and energy losses to total energy consumption.
Although residential energy consumption is projected to increase by 28% overall between 1999 and 2020, some 75% of this growth is related to increased use of electricity. Under current building codes and appliance standards, however, energy use per square foot is typically lower for new construction than for the existing stock. Building shell efficiency gains are projected to cut space-heating demand by nearly 10% per household in 2020. In addition, a variety of appliances are now subject to minimum efficiency standards, including heat pumps, air conditioners, furnaces, refrigerators, and water heaters. For example, current standards for a typical residential refrigerator limit electricity use to 690 kilowatt-hours per year, and revised standards are expected to reduce consumption by another 30% by 2002. Energy use for refrigeration has declined by 1.8% per year from 1990 to 1997 and is expected to decline by about 2% per year through 2020, as older, less efficient refrigerators are replaced with newer models.
The pace of energy growth in the commercial sector is expected to slow compared to its pace over the past three decades. Energy consumption per square foot is projected to increase by a modest 0.1% annually, with efficiency standards, voluntary government programs aimed at improving efficiency, and other technology improvements expected to balance the effects of a projected increase in demand for electricity-based services and stable or declining fuel prices.
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Since 1970, the use of more energy-efficient technologies, combined with relatively low growth in the energy-intensive industries, has dampened growth in industrial energy consumption. Consequently, total energy use in the sector grew by only 7% between 1978 and 1999 despite a 43% increase in industrial output. These basic trends are expected to continue.
Perhaps the Nation's greatest energy challenge is the transportation sector, which accounts about 70% of U.S. oil consumption and more than can be produced domestically. Transportation is responsible for about a third of U.S. carbon dioxide emissions, and autos, trucks, and buses are one of the largest sources of local and regional air pollution. Although the other demand sectors have greatly reduced their dependence on oil, the transportation sector is still nearly 97% oil dependent and is projected to remain over 95% dependent in 2020. While fuel efficiency standards doubled new car mileage between the mid-1970's and the mid-1980's, fleet averages for personal vehicles have been dropping in recent years as more and more consumers are switching to minivans, light trucks, and sport utility vehicles. In addition, vehicle miles traveled have been increasing, putting additional pressure on oil supplies.
AEO2001 projects advanced technologies-gasoline fuel cells and direct fuel injection, as well as electric hybrids for both gasoline and diesel engines-to boost the average fuel economy of new light-duty vehicles by about 4 miles per gallon (mpg), to 28.0 mpg in 2020. Larger percentage gains in efficiency are expected for freight trucks (from 6.0 mpg in 1999 to 6.9 in 2020). New automobile fuel economy is projected to reach approximately 32.5 mpg by 2020, as a result of advances in fuel-saving technologies, such as advanced drag reduction, variable valve timing, and extension of four valve per cylinder technology to six-cylinder engines, each of which would provide between 7 and 10% higher fuel economy.
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Carbon Dioxide Emissions
AEO2001 projects that energy-related emissions of carbon dioxide—the principal greenhouse gas of concern—will increase from 1,511 million to 2,041 million metric tons carbon equivalent between 1999 and 2020—a total increase of 27% and an average annual increase of 1.4%. This projection includes certain voluntary actions to reduce energy demand and emissions, but does not include future legislative or regulatory actions that might be taken to reduce carbon dioxide emissions.
Bottom Line
The bottom line is that if EIA's AEO2001 reference-case projections of near- and mid-term contributions of renewable energy to the Nation's energy mix prove reasonably accurate, renewables will continue to play a relatively minor role through 2020. Alternatively, the contributions from energy efficiency, as measured by improvements in energy intensity, are much greater. The principal issue facing the Nation is finding the right mix of programs and policies that will ensure that renewable energy and energy efficiency achieve their full potential.
Chairman BOEHLERT. It is a pleasure to welcome you here for the first Science Committee hearing of the 107th Congress. This is the first of three Full Committee hearings we will be having on the Committee's priorities. Next week, we will explore K–12 science and math education, and the following week, we will review the science of climate change. And I was pleased to hear the President deal with our three priorities last night, education, energy, and the environment.
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The President made the case last night that we need a comprehensive energy policy, and today's hearing is designed to start figuring out how to develop a piece of that policy. The premise of this morning's hearing is simple: Everyone agrees that renewable energy and energy efficiency need to be part of a comprehensive energy policy. But there hasn't been much discussion yet of how to draw on the full potential of renewables and efficiency.
This hearing is an effort to open that discussion. To do that, we have invited a Panel of highly regarded government and academic witnesses. We very consciously chose not to invite any advocacy groups to today's hearing—not those from the conventional or renewable energy industries, not those from industry or environmental groups. Those voices are essential to the discussion and will be heard at follow-up hearings, but we wanted to open with experts who could offer a broad overview, unencumbered by a mandate to promote any interest's particular point of view.
This kind of broad conversation is frankly long overdue. Because the real ''energy crisis'' is not the current situation in California or the price spikes in natural gas or heating oil, serious as those problems are. The real problem is that nationally and globally, our energy profile is irresponsible and probably unsustainable, environmentally, economically, and from a national security point of view. We have simply got to figure out a way to depart from the business as usual energy scenarios and do so in a thoughtful, gradual way that strengthens our economy.
In my own Congressional District we have taken small steps in that direction with a new wind farm established in Madison County, with Ford Motor Company and Baker Electromotive assembling electric vehicles for the post office in my home County of Oneida, and with Orion Bus manufacturing hydrogen and CNG buses. But these isolated steps, while important and beneficial to the local economy in my area, hardly amount to a national policy in and of themselves.
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My goal this year, is a shared goal, I might add, is to help develop and implement a national energy policy that starts from the assumption that renewables and, even more significantly, efficiency, are the keys to our energy future. They can't just be an afterthought, a few marginal measures tacked on to a bill to keep ''those folks'' happy. A comprehensive policy has to truly be comprehensive and innovative. Its foundational principle can't be more of the same.
That is why in this Committee we are starting our energy discussions with renewables and efficiency. They are literally not an afterthought. And I look forward to hearing from our witnesses how we can turn our commitment to a truly comprehensive energy policy into a workable, productive, prospering reality. Thank you.
[The prepared statement of Chairman Sherwood Boehlert follows:]
PREPARED STATEMENT OF CHAIRMAN SHERWOOD BOEHLERT
It's a pleasure to welcome you all here for the first Science Committee hearing of the 107th Congress. This is the first of three full Committee hearings we will be having on the Committee's priorities—next week we will explore K–12 science and math education and the following week, we will review the science of climate change. And I was pleased to hear the President deal with our three priorities—education, energy and the environment—in his speech last night.
The President made the case last night that we need a comprehensive energy policy, and today's hearing is designed to start figuring out how to develop a piece of that policy. The premise of this morning's hearing is simple: everyone agrees that renewable energy and energy efficiency need to be part of a comprehensive energy policy. But there hasn't been much discussion yet of how to draw on the full potential of renewables and efficiency.
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This hearing is an effort to open that discussion. To do that, we've invited a panel of highly regarded government and academic witnesses. We very consciously chose not to invite any advocacy groups to today's hearing—not those from the conventional or renewable energy industries, not those from industry or environmental groups. Those voices are essential to the discussion and will be heard at follow-up hearings, but we wanted to open with experts who could offer a broad overview unencumbered by a mandate to promote any interest's particular point of view.
This kind of broad conversation is frankly long overdue. Because the real ''energy crisis'' is not the current situation in California or the price spikes in natural gas or heating oil—serious as those problems are. The real problem is that, nationally and globally, our energy profile is irresponsible and probably unsustainable—environmentally, economically and from a national security point of view. We have simply got to figure out a way to depart from the ''business as usual'' energy scenarios and do so in a thoughtful, gradual way that strengthens our economy.
In my own Congressional District we have taken small steps in that direction—with a new wind farm being established in Madison County and with Ford Motor Co. and Baker Electromotive assembling electric vehicles for the Post Office in Oneida County. But these isolated steps—while important and beneficial to our local economy—hardly amount to a national policy in and of themselves.
My goal this year is to help develop and implement a national energy policy that starts from the assumption that renewables and, even more significantly, efficiency are the keys to our energy future. They can't just be an afterthought—a few marginal measures tacked on to a bill to keep ''those folks'' happy. A comprehensive policy has to truly be comprehensive—and innovative. It's foundational principle can't be ''more of the same.''
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That's why in this Committee we're starting our energy discussions with renewables and efficiency. They are literally not an afterthought. And I look forward to hearing from our witnesses how we can turn our commitment to a truly comprehensive energy policy into a workable, productive, prospering reality. Thank you.
Now, before I turn to the Ranking Member of the Committee, Mr. Hall of Texas, just let me outline how we are going to proceed. For Full Committee hearings like this, the Chair and the Ranking Member will have 5-minute opening statements and then we are going to go directly to the witnesses. The witnesses will each have 5-minute opening statements, but it is the Chair's intent not to be absolutely rigid on that, but we would appreciate if you would respect the basic thrust or objective, literally 5 minutes. Then we will go to the questions and answers.
We thank the witnesses for appearing here today. You are valuable resources for the Committee. And what we are going to try to do is limit and be strict on the time from this side of the podium, because we are not here to hear ourselves talk. We are here to learn what is on the mind of the expert witnesses we call before the Committee. And when we are talking about experts, it is my pleasure now to turn to an expert, the Ranking Minority Member, gentleman from Texas, Mr. Hall.
Mr. HALL. Mr. Chairman, I thank you, and I thank you for your comments and approach. You have a very decent approach to the operation of this Committee and we—it has worked well so far. I consider you, if not the eminent leader of the environmental thrust in this Congress, as one of the major leaders. And, as you know, there was talk about me maybe being the Energy Secretary for a while. It was in the papers. It was a little ridiculous because I can't type or take shorthand or—and would refuse to sit on George Bush's lap.
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But seriously, if I had been selected for that and had I been really stupid enough to trade my 7- and 8-hour days for 20-hour days, I would have come to you and I would have asked you to go to the sensible environmentalists of this country, who are citizens first and care about this country first, though they are a little nutty off here on the environment, like I am a little nutty off on this side about drilling. We have to have somebody like you in the middle that draws us together.
And I would like for you to bring them into our circle, impress upon them that we can kick California around and say you are getting what you had coming to you, and you haven't helped yourself. We can do that so long, but sooner or later we've got to be sensible and cooperative with a fellow state and come to their aid and to their support. This Committee and this Congress have to support California. We can't afford to see them go the way that they are going now and the way that some people hope they will go by letting them, what, freeze and starve in the dark? Well, that is not my attitude and I hope that is not this Committee's attitude.
I think you could talk to them about a place to drill on that North Slope, some areas to drill, like in—on our coastlines, where we don't really think that an offshore rig looks nearly as bad as a troop ship laden with our youngsters fighting for energy in a faraway land when we have energy right here, if we could draw on it. I want to talk with you about that later. I have used, I think, about a minute of my time. I want to yield to the Energy Subcommittee Ranking Minority Member, Lynn Woolsey for the remaining 9 minutes of my time if—I may ask unanimous consent to do that.
[The prepared statement of Ralph M. Hall follows:]
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PREPARED STATEMENT OF CONGRESSMAN RALPH M. HALL
Mr. Chairman and Members of the Committee—
I thank you for holding this hearing today and making energy one of your top priorities. While you and I may differ over some of the details in an energy program, I'm looking forward to working with you as we sort it out.
We each have our constituent interests to represent, and out of the give and take of the legislative process, I know will come an energy program that we can embrace. I won't take any more time today, other than to express my appreciation for your openness and way you intend to run the Committee.
With that, let me yield the remaining time to our distinguished Energy Subcommittee Ranking Minority Member, Lynn Woolsey.
Chairman BOEHLERT. The gentlelady is recognized.
Ms. WOOLSEY. Thank you. Thank you, Mr. Hall, for yielding and for saying some good words about California. And——
Mr. HALL. It was difficult.
Ms. WOOLSEY. Well, all right. And, Mr. Chairman, I want to especially thank you for having this first Full Committee hearing of your chairmanship focused on renewable energy and on energy efficiency. Since you have, and I have read your first—some of your first—speeches said that these first few hearings are designed to highlight the initiatives you want the Committee to make its mark on. As the new Ranking Member of the Energy Subcommittee, I am particularly pleased. And, like you, I believe passionately in the need for renewable energy sources and energy efficiency programs and that we will and must take a lead role in this issue.
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As a Californian, and a member from one of the most environmentally conscious districts in the country, Mr. Hall, hearing about drilling off our coast doesn't sit well at all. But I bring a special interest in expanding the role that renewable energy sources and energy efficiency will play in meeting our future energy needs.
Certainly, the energy shortages that we in California are experiencing are proof enough why Congress must raise the stakes in search of alternatives to conventional electricity generation and to focus on conservation and efficiency. Obviously, we aren't doing enough, and that is what I hope this Panel is going to talk to us about today, what we really need to be doing.
Since passing the National Energy Policy Act in 1992, Congress has generally ignored energy issues. But the power problems in California, as well as the increased natural gas prices and gasoline throughout the country, have pushed energy back to the top of our Nation's agenda. So I am interested in hearing what this panel has to say today. And I would like to know if the panel believes that a major reason for our current energy situation in California is tied, in any way, to a lack of alternative power sources.
I have been told that in the Federal—if the Federal Government, in the mid-'90's, had held California power companies to their commitment to invest in renewable energies, we could now be generating energy for as many as 1.4 million additional residents. And that was a great missed opportunity. So, Mr. Chairman, I am looking forward to hearing from the Panel and working with you and Mr. Hall on putting together an energy policy that really focuses on alternatives, renewables, and energy efficiency. Thank you.
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[The prepared statement of Lynn Woolsey follows.]
PREPARED STATEMENT OF THE HONORABLE LYNN WOOLSEY
Mr. Chairman, I want to especially thank you for having the first full committee hearing of your chairmanship focus on renewable energy and energy efficiency. Since, as you have said, these first few hearings are designed to highlight the initiatives you want the committee to make its mark on—as the new Ranking Member of the Energy Subcommittee, I'm especially pleased! Like you, I believe passionately in the need for renewable energy sources and energy efficiency programs to take a lead role.
As a Californian, and a member from one of the most environmentally conscious districts in the country, I bring a special interest in expanding the role that renewable energy sources and energy efficiency will play in meeting our future energy needs. Certainly, the energy shortages that we in California are experiencing is proof enough why Congress must raise the stakes in search of alternatives to conventional electricity generation and a focus on conservation. Obviously, what we are doing isn't enough.
Since passing the National Energy Policy Act in 1992, Congress has generally ignored energy issues. But the power problems in California, as well as the increased price of natural gas and gasoline throughout the country, have pushed energy back to the top of our nation's agenda. I'm interested to hear from today's panel if a major reason for our current energy situation is tied to a lack of alternative power sources.
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I've been told that if the federal government in the mid-'90s had held California power companies to their commitment to invest in renewable energies, we could now be generating energy for as many as 1.4 million additional residents. What a missed opportunity!
One solution to our energy crisis can be found in R&D and innovative applications of R&D. For too long, demand-side solutions like energy efficiency and conservation were associated with images of personal sacrifice—like turning down the thermostat and having to walk around bundled in sweaters. However, despite the recent energy woos in California, we've been working to find smarter and more innovative ways to use energy efficient technologies and conservation measures.
For example, several Marin County communities—including Mill Valley, San Rafael and Novato—are currently moving forward on plans to install new energy-efficient traffic lights that use 10 to 20 percent of the electricity currently needed. In Sonoma County, the City of Santa Rosa is working on a project to send 11 million gallons of its reclaimed wastewater to the Geysers geothermal plant each day. When completed, the Geysers steam fields will displace 85 megawatts of fossil energy. The Sonoma County transit department is also building a landfill gas conversion facility that allows excess landfill gas to be used as alternative fuel for their buses.
My colleagues, and guests, investments in renewable energy sources, conservation and energy efficiency technologies like these will protect us from more blackouts and skyrocketing energy bills. We must ensure that R&D like that in my district can be borrowed and adapted in other states. I believe that there is an important role for the federal government to encourage research and bring clean, efficient and renewable technologies to market. While federal involvement won't solve our energy problem overnight, a long-term commitment from Congress and this Committee to alternative energy and energy efficiency is a smart way to prevent further energy crisis.
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I look forward to actively working with you Mr. Chairman and Mr. Bartlett to champion more creative ways to enhance research on renewable sources and deployment of new technologies and conservation approaches. Mr. Chairman, it's a great pleasure to know this is a priority for you and this Committee. I pledge to work closely with you and Mr. Bartlett to move a legislative agenda that prominently features these goals.
Thank you.
[The prepared statement of Representative John B. Larson follows:]
PREPARED STATEMENT OF THE HONORABLE JOHN B. LARSON
Mr. Chairman, in 1999, the United States imported an average of nearly 11 million barrels of oil per day from foreign countries to meet our domestic energy needs, totaling nearly 4 billion barrels over the course of the year. Even at 1999's comparatively modest average price of $15 per barrel, that adds up to more than $60 billion spent on foreign oil. With the average price of a barrel of crude oil at $30 last year and with average daily imports remaining roughly the same, America's expenditures to purchase foreign oil increased to more than $120 billion last year.
That is more than twice what the federal government currently spends on education programs, twice what we spend providing veterans benefits, twice what we spend improving the nation's transportation infrastructure and fostering community and regional development, and equal to what we spend on international affairs, general scientific research and development, justice programs, agriculture programs, and natural resource and environmental programs combined.
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I believe we must break this cycle of dependency, and strengthen our economy by turning this level of spending back to domestic sources. The spread and use of new, efficient, energy producing technologies, such as fuel cells, has the opportunity to create a contribution in economic growth and in job creation every bit as significant as the development of the high tech industry during the last decade.
Having introduced legislation in the last Congress to begin addressing these critical issues, I look forward to hearing the testimony and insights of this esteemed panel.
[The prepared statement of Representative Sheila Jackson Lee follows:]
PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE
Chairman Boehlert and Ranking Member Hall, thank you for this important opportunity to discuss our nation's energy future as it relates to renewable energy and energy efficiency.
This is the first of three hearings to be held by the full committee, which speaks to the level of importance this issue has for the nation. It is proper that the House Science Committee explore the issues of our nation's energy future as our nation ponders its growing need for energy. The United States does need to develop a long term national energy policy, which will be in effect regardless of the changing dynamics of energy supply and demands.
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As you know, I represent the 18th Congressional District of Texas, which is located entirely within the City of Houston and the home of such energy and energy related companies such as Reliant, Enron, Vaalco, Equilon, Motiva, Equiva Trading, Equiva Services, Edge Petroleum Company, Houston Exploration Company, Altra Corporation, and dozens of other exploration, American Rel-Fuel, and Enercon Engineering. This District can claim well-established energy producing companies and suppliers as well as, those engaged in renewable energy exploration and development.
Today, our society is in the midst of major sociological and technical revolutions, which will forever change the way we live and work. We are transitioning from a predominantly industrial economy to an information-centered economy. While our society has an increasingly older and longer living population the world has become increasingly smaller, integrated and interdependent.
As with all change, current national and international transformations present both dangers and opportunities, which must be recognized and seized upon. Thus, the question arises, how do we managed these changes to protect the disadvantaged, disenfranchised and disavowed while improving their situation and destroying barriers to job creation, small business, and new markets?
The cost of doing business globally has increased because of higher oil and natural gas prices. We know that energy is a key component of economic expansion. Today we are faced with several questions which will determine our nation's response to energy: In the new technology based economy will old economy staples like supply and demand of energy have clout in determining economic good times or bad times? How will the changing global economy deal with growing demands for energy and shrinking sources? Are alternative sources of energy or renewable energy viable options for the 21st Century?
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We are here today to discuss the current status of the energy industry, both domestic and international market changes, but most importantly we will discuss how the current energy situation has effected consumers.
Prior to this meeting today, I held a fact-finding hearing in Houston, Texas on October 2 of last year to address the energy crisis and its impact on consumers and businesses in my District. I wanted to listen to what producers, suppliers, and consumers were experiencing due to the current energy crisis in our nation. I wanted to take from that discussion valuable insight that might be helpful to me in encouraging the House leadership to take up legislation that I hope will address many of their concerns.
Issues surrounding the use of renewable sources of energy and our nation's energy future are real. The problems associated with unpredictable weather patterns have been experienced by different regions of our nation's with deadly consequences.
In the summer of 1995, one of the coolest summer's on record over 600 people died the City of Chicago from heat-related causes. There was an unusual weather pattern in the form of an El Niño during that winter and an La Niña during that summer, which led to unusually cold weather in some parts of the nation while at the same time other parts of the nation experienced unusually hot weather. As a result the Cook County medical examiner found that heat was a contributing factor to the deaths of 625, mostly elderly people in the Chicago area.
Unfortunately, the weather has made news in the State of Texas last year, where an historic number of consecutive days over 100 degrees were recorded by dozens of Texas communities. Houston Continental Airport recorded 20 days over 100. The record temperatures last summer also cost lives in the City of Houston and around the state.
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That heat emergency led to my working with all public and private efforts to provide heat relief to the City of Houston's elderly, and very young population, which were at the greatest health risk under the extreme weather conditions. This resulted in the creation of the Houston Heat Relief Team and helped to provide vital services to those who were not being reached due to a disjointed efforts on the part of well meaning groups.
We have seen days like the summer of 2000 before, nearly 30 years ago, the defining events of the 1970s were oil shortages: first in 1973, then again in 1977. At that time waiting in long lines for short supplies, many Americans realized for the first time how central a role energy plays in the good life. . .and how vulnerable some forms of energy are to political vagaries. The origins of this energy crisis can be traced back to OPEC's price increases on oil, responding to President Nixon's new economic policy announcement on August 15, 1971. While that action raised some speculation of energy shortages, American dependence on imported oil continued to grow. The winter of 1972–73 presented the first evidence of serious energy problems. Nixon, adamantly opposed to a national policy of oil conservation, responded to the crisis by encouraging expansion of American domestic production, approving funding for the controversial Alaska pipeline, and incentives for exploration, production, and development of nuclear power as the nation's alternative to fossil fuel energy.
As you are all aware, utility deregulation, environmental policy, and fossil and alternative energy research and development have all been front-line issues during the 106th Congress. In addition, states such as California, Tennessee and Indiana are the proving grounds for the new utility paradigm, where competition will hopefully bring large and small consumers alike, cheaper prices.
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We have all seen the tremendous economic growth experienced by our nation over the last eight years. But this growth has come at the expense of growing energy demands to sustain the tremendous engine of our national economy.
The Clinton Administration's response was to release 30 million barrels of oil from the nation's strategic oil reserve; the release of $400 million in Low-Income Home Energy Assistance Program funds; directed the Environmental Protection Agency to help states identify ways to use different kinds of home heating oil while minimizing environmental consequences and the President directed Federal agencies to make early contractual commitments to purchase heating oil this winter so the wholesalers will have confidence to build inventories in advance. The energy crisis did not end with the Clinton Administration, but continues for states like California who are left to shoulder the burden of energy shortfalls alone.
The Congress and the Bush Administration must do its share to relieve the suffering of Americans due to this energy crisis. The 107th Congress should provide the additional funds to address low income home weatherization funds. The House has since Fiscal Year 1994 under funded our nation's weatherization assistance program.
The current Administration is proposing a $2 TRILLION tax cut plan, but we cannot judge the merits of this proposal with so many questions regarding the future of renewable energy research and development left unanswered by the policy formulation process.
It is my hope that we will provide a good blueprint of our nation's energy needs and its prospects for meeting those needs in this new century.
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Thank you.
Chairman BOEHLERT. Thank you very much. That is a shared objective. And I want to compliment the gentlelady and the distinguished Ranking Member for keeping right on schedule.
Now, it is my pleasure to present our panel for today, consisting of Ms. Mary J. Hutzler, Director, Office of Integrated Analysis and Forecasting, for the Energy Information Administration, U.S. Department of Energy; Mr. Kenneth K. Humphreys, Senior Staff Engineer, Energy, Science and Technology Division, Pacific Northwest National Laboratory; Professor John P. Holdren, Harvard University and Chair, President's Committee of Advisors on Science and Technology Energy Research and Development Panel; and Mr. Joel Darmstadter, Senior Fellow, Energy and Resources Division, Resources for the Future. As has been indicated, you each have 5 minutes, and we would appreciate summarizing your more comprehensive statement and allowing more time for a good interchange between the two. Thank you very much. Ms. Hutzler, you are up first.
STATEMENT OF MARY J. HUTZLER, DIRECTOR, OFFICE OF INTEGRATED ANALYSIS AND FORECASTING, ENERGY INFORMATION ADMINISTRATION (EIA), U.S. DEPARTMENT OF ENERGY
Ms. HUTZLER. Mr. Chairman, and, Members of the Committee, I appreciate the opportunity to appear before you today to discuss renewable energy and energy efficiency in the United States.
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The Energy Information Administration is an autonomous statistical and analytical agency within the Department of Energy. We are charged with providing objective, timely, and relevant data, analysis, and projections for the use of the Department of Energy, other Government agencies, the U.S. Congress, and the public. We do not take positions on policy issues. We produce data and analyses that are meant to help policymakers determine energy policy.
The projections in this testimony are from the Annual Energy Outlook 2001, which provides projections and analysis of domestic energy consumption, supply, and prices. These projections are not meant to be exact predictions of the future. They represent a likely energy future, given technological and demographic trends, current laws and regulations, and consumer behavior.
With respect to our projections for the future, we expect total energy consumption to increase at an average annual rate of 1.3 percent. This is a lower growth rate than we have experienced since 1983, when energy consumption grew at a rate of 1.7 percent per year. We have seen energy consumption decline twice in the past 30 years, in the mid-1970's and in the early 1980's, both occurring due to oil price increases.
The lower energy growth that we are forecasting is partly a result of improved energy intensity, which is the green line on this graph. Energy intensity, measured as energy use per dollar of GDP, has declined since 1970, most notably when energy prices have increased rapidly. Between 1970 and 1986, energy intensity declined at an average rate of 2.3 percent per year, as the economy shifted to less energy-intensive industries and more efficient technologies.
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Without significant price increases and with the growth of more energy-intensive industries, the intensity declines slowed to an average of 1.3 percent per year between 1986 and 1999. Through 2020, we project energy intensity to decline at an average annual rate of 1.6 percent as efficiency gains and structural shifts in the economy offset growth and demand for energy services.
Our Reference Case assumes continued improvements in technology for both energy consumption and production based on historical rates of improvement. To demonstrate the amount of technological improvements that are embedded in the Reference Case, we have represented a case where all future choices will be made from equipment and vehicles available in 2001. This results in an average decline in energy intensity of 1.4 percent per year, compared to the 1.6 percent per year in the Reference Case. In this case, stock efficiencies improve over the forecast when new equipment is chosen to replace equipment that is retired and as the capital stock expands.
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Energy consumption grows at a rate of 1.6 percent per year in this case, which is much closer to the historical rate of 1.7 percent experienced since 1983. If, however, technological improvement occurs at a faster rate than historical levels, we could see aggregate energy intensity decline at a rate of 1.9 percent per year. Such technology improvements could result from increased research and development, but they are not the most optimistic improvements that could occur.
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My next slide shows this for the residential sector. Here I display the 2001 Technology Case and the High Technology Case, but also a Best Available Technology Case. This case assumes that the most energy-efficient technology is always chosen by consumers, regardless of cost. In this case, in the residential sector, energy consumption could be 22 percent lower in 2020, than compared to the Reference Case.
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Consumer choice is probably best demonstrated in the transportation sector, which is our fastest growing end-use sector. Historically, the average efficiency of new automobiles has increased from about 16 miles per gallon in 1975 to 28 miles per gallon in 1986, staying in the 27 to 28 mile-per-gallon range over the next decade. The efficiency of new trucks also improved by about 7 miles per gallon in this time frame.
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While we expect the average new vehicle efficiency to improve by 4 miles per gallon in the forecast, improvements in the average efficiency of the fleet is slowed by stock turnover and consumer choice. The average stock efficiency of all light-duty vehicles is projected to increase by only 1 mile per gallon, reaching 21.5 miles per gallon in 2020. This is due to projected low petroleum prices and higher personal income which increase the demand for larger, more powerful vehicles.
My next figure depicts renewable energy consumption and compares it to consumption of other fuel sources. Renewable energy consumption has increased from 4 quadrillion BTU in 1970 to an estimated 6.6 quadrillion BTU in 1999. We project that it will increase to 8.3 quadrillion BTU in 2020, an average annual growth slightly more than 1 percent from 1999. The share of total energy consumption for renewables we project to stay about 7 percent through 2020. In 2020, about 55 percent of all renewables are used for electricity generation and the rest for dispersed heating and cooling, industrial uses, and fuel blending.
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Electricity generation from renewable sources is projected to increase by 15 percent between 1999 and 2020 in our Reference Case. Renewables decline from a 10b percent share of electricity generation in 1999 to 8b percent in 2020. However, generation from renewables, other than hydroelectricity, is projected to almost double by 2020, increasing from a 2 percent share of total generation today, to a 3 percent share in 2020.
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As can be seen from the chart, most of the projected increase in renewables is expected from biomass, landfill gas, geothermal energy, and wind power. State mandates and other incentives, including Federal production tax credits for wind generation, encourage most of the growth in renewables in the earlier part of the forecast period.
We also evaluate a high renewables case, which is shown on this chart. That case assumes more favorable characteristics for non-hydroelectric renewable generating technologies than in the Reference Case. In this case, generation from non-hydroelectric renewables, other than co-generation, is about doubled that of the Reference Case.
Further penetration of renewables is slowed by the total cost of renewable generation relative to fossil-fired technologies. In this chart, you can see that wind generation in 2020 is about 4.6 cents per kilowatt hour, compared to natural gas combined cycle generation, which is around 3.8 cents per kilowatt hour.
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In conclusion, over the forecast period, we expect total energy intensity to continue to improve at a rate that falls between the rates we have seen over the past 30 years. Increasing demand for energy services is offset to some degree by energy efficiency improvements, some of which occur due to equipment standards. The use of renewable sources of energy is expected to increase, however, at a relatively slow pace, due in part to the relative costs of these technologies compared to fossil-fueled technologies. Thank you, Mr. Chairman, and Members of the Committee. I will be happy to answer any questions you may have.
[The prepared statement of Ms. Hutzler follows:]
PREPARED STATEMENT OF MARY J. HUTZLER, DIRECTOR, OFFICE OF INTEGRATED ANALYSIS AND FORECASTING, ENERGY INFORMATION ADMINISTRATION, U.S. DEPARTMENT OF ENERGY
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to appear before you today to discuss renewable energy and energy efficiency in the United States.
The Energy Information Administration (EIA) is an autonomous statistical and analytical agency within the Department of Energy. We are charged with providing objective, timely, and relevant data, analysis, and projections for the use of the Department of Energy, other government agencies, the U.S. Congress and the public. We do not take positions on policy issues, but we do produce data and analysis reports that are meant to help policy makers determine energy policy. Because we have an element of statutory independence with respect to the analyses that we publish, our views are strictly those of EIA. We do not speak for the Department, nor for any particular point of view with respect to energy policy, and our views should not be construed as representing those of the Department or the Administration. However, EIA's baseline projections on energy trends are widely used by government agencies, the private sector, and academia for their own energy analyses.
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The projections in this testimony are from the Annual Energy Outlook 2001 (AEO2001), published by EIA in December 2000, which provides projections and analysis of domestic energy consumption, supply, prices, and energy-related carbon dioxide emissions through 2020. These projections are not meant to be exact predictions of the future, but represent a likely energy future, given technological and demographic trends, current laws and regulations, and consumer behavior as derived from known data. EIA recognizes that projections of energy markets are highly uncertain, subject to many random events that cannot be foreseen, such as weather, political disruptions, strikes, and technological breakthroughs. In addition to these short-term phenomena, long-term trends in technology development, demographics, economic growth, and energy resources may evolve along a different path than assumed in the AEO2001 reference case. Many of these uncertainties are explored through alternative cases in the AEO2001.
ENERGY CONSUMPTION TO 2020
Total energy consumption is projected to increase from an estimated 96.1 quadrillion British thermal units (Btu) in 1999 to 127.0 quadrillion Btu between 1999 and 2020, an average annual increase of 1.3 percent. Energy consumption in the United States increased from 67.9 quadrillion Btu in 1970 to 81.0 quadrillion Btu in 1979, with a downturn in 1974 and 1975 during the first oil price increase. During the early 1980s, energy consumption again declined to 73.3 quadrillion Btu in 1983, due in part to the second oil price increase. Since 1983, energy consumption has been generally increasing, with an average annual increase of 1.7 percent through 1999.
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Total renewable energy consumption, including ethanol used in gasoline, is projected to increase from 6.7 quadrillion Btu in 1999 to 8.5 quadrillion Btu in 2020, an average annual growth of 1.1 percent (Figure 1). Renewable energy consumption in the United States has increased from 4.1 quadrillion Btu in 1970 and has included primarily hydroelectric power, wood, and waste, with small amounts of geothermal and other renewable sources. The share of total energy consumption that is derived from renewable sources is projected to be 7 percent in 2020, approximately the same share as in 1999. In 2020, about 55 percent of renewables are used for electricity generation and the rest for dispersed heating and cooling, industrial uses (primarily cogeneration), and fuel blending (Figure 2).
The projections incorporate promulgated efficiency standards for new energy-using equipment in buildings, as authorized by the National Appliance Energy Conservation Act of 1987 and periodically updated by the Department of Energy, and for motors, as required by the Energy Policy Act of 1992. Since AEO2001 included only those laws, regulations, and standards in effect as of July 1, 2000, the new standards for residential clothes washers, water heaters, and central air conditioners and heat pumps and commercial heating, cooling, and water heating equipment issued in January 2001 are not included. In addition to the impact of efficiency standards, improvements in efficiency are projected as a result of expected technological improvement and market forces.
Transportation. Transportation energy demand is expected to increase at an average annual rate of 1.8 percent to 38.5 quadrillion Btu in 2020 and is the fastest growing end-use sector. The growth in transportation use is driven by 3.6 percent growth in air travel, the most rapidly increasing transportation mode, and 1.9 percent annual growth in light-duty vehicle travel, the largest component of transportation energy demand, coupled with slow growth in vehicle efficiency.
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Historically, the average efficiency of new automobiles has increased from 15.8 miles per gallon in 1975 to 27.9 miles per gallon in 1986, staying in the 27 to 28 mile range over the next decade (Figure 3). The efficiency of new light trucks, including vans, pickup trucks, and sport utility vehicles, also improved from 13.7 miles per gallon in 1975 to 21.4 miles per gallon in 1986, remaining at about 21 miles per gallon for the next decade. While the average efficiency of all new light-duty vehicles is expected to increase from 24.2 miles per gallon in 1999 to 28.0 miles per gallon in 2020, improvements in the average efficiency of the fleet is slowed by stock turnover (Figure 4). From 1999 to 2020, the average stock efficiency of all light-duty vehicles increases from 20.5 to 21.5 miles per gallon. With fuel efficiency standards for light-duty vehicles assumed to stay at current levels, fuel efficiency is projected to improve at a slower rate through 2020 than it did in the 1980s, due to projected low fuel prices and higher personal income which are expected to increase the demand for larger, more powerful vehicles. Average horsepower for new cars in 2020 is projected to be about 55 percent above the 1999 average, but advanced technologies and materials are expected to keep new vehicle fuel economy from declining.
Advanced technology vehicles, representing automotive technologies that use alternative fuels or require advanced engine technology, are projected to reach nearly 2.7 million vehicle sales (16.7 percent of total projected light-duty vehicle sales) by 2020 (Figure 5). The leading technologies are gasoline hybrid electric vehicles, followed by turbo direct injection diesels, and alcohol flexible-fueled vehicles. The use of renewables in the transportation sector, specifically ethanol, is projected to increase at an average rate of 3.6 percent per year between 1999 to 2020. This represents a doubling of the use of ethanol to 0.24 quadrillion Btu by 2020. Ethanol in the form of E85 is consumed primarily by light-duty flexible-fueled vehicles and dedicated E85 vehicles, but the majority of ethanol is used for gasoline blending, about 87.5 percent in 2020. All alternative fuels are projected to displace about 203,000 barrels of oil equivalent per day by 2020, or 2.1 percent of light-duty vehicle fuel consumption.
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Residential. Residential energy consumption is projected to increase at an average annual rate of 1.2 percent, reaching 24.4 quadrillion Btu in 2020. The growth is led by energy demand for a variety of electricity-using equipment and appliances (Figure 6). Residential electricity use is projected to increase at an annual rate of 1.9 percent. The energy intensity of households, measured as delivered energy consumption per household, was 155 million Btu per household in 1970, generally declining through the 1980s to a low of 102 million Btu per household in 1990 (Figure 7). Delivered energy use per household is expected to increase slightly from 102 to 107 million Btu per household between 1999 and 2020, an average annual increase of 0.2 percent. Primary energy use per household, including all losses associated with the generation and transmission of the electricity used in the sector, increases at a slower rate, 0.1 percent per year, due to the increasing efficiency of electricity generation. Total energy use per household is expected to increase from 184 to 188 million Btu per household between 1999 and 2020, an average annual increase of 0.1 percent. Total energy use per square foot of floorspace is actually projected to slowly decrease at an average annual rate of 0.1 percent between 1999 and 2020, in part due to equipment standards, which help to increase the efficiency of residential appliances (Figure 8). However, it is also expected that new homes will continue to increase in size, consistent with recent trends, leading to the increase in energy consumption per household.
Energy use for space heating, the most energy-intensive end use in the residential sector, grew by 1.8 percent per year from 1990 to 1997. Future growth is expected to be slowed by higher equipment efficiency and tighter building codes. Building shell efficiency gains are projected to cut space heating demand by nearly 10 percent per household in 2020 relative to the demand in 1997.
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A variety of appliances are now subject to minimum efficiency standards, including heat pumps, air conditioners, furnaces, refrigerators, and water heaters. Current standards for a typical residential refrigerator limit electricity use to 690 kilowatthours per year, and revised standards are expected to reduce consumption by another 30 percent by 2002. Energy use for refrigeration has declined by 1.8 percent per year from 1990 to 1997 and is expected to decline by about 2.0 percent per year through 2020, as older, less efficient refrigerators are replaced with newer models.
The ''all other'' category, which includes smaller appliances such as personal computers, dishwashers, clothes washers, and dryers, has grown by 5 percent per year from 1990 to 1997 and now accounts for 30 percent of residential primary energy use. It is projected to account for 40 percent in 2020, as small electric appliances continue to penetrate the market. The promotion of voluntary standards, both within and outside the appliance industry, is expected to forestall even larger increases. Even so, the ''all other'' category is projected to exceed other components of residential demand by 2020.
The AEO2001 reference case projects an increase in the stock efficiency of residential appliances, as stock turnover and technology advances in most end-use services combine to reduce residential energy intensity over time. For most appliances covered by the National Appliance Energy Conservation Act of 1987, the most recent Federal efficiency standards are higher than the 1998 stock, ensuring an increase in stock efficiency (Figure 9) without any additional new standards. Future updates to the Federal standards could have a significant effect on residential energy consumption, but they are not included in the reference case. New efficiency standards for clothes washers, water heaters, central air conditioners, and heat pumps were finalized in January 2001; however, a 60-day review of the standards was ordered in early February.
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For almost all end-use services, technologies now exist that can significantly curtail future energy demand if they are purchased by consumers. The most efficient technologies can provide significant long-run savings in energy bills, but their higher purchase costs tend to restrict their market penetration. For example, condensing technology for natural gas furnaces, which reclaims heat from exhaust gases, can raise efficiency by more than 20 percent over the current standard; and variable-speed scroll compressors for air conditioners and refrigerators can increase their efficiency by 50 percent or more. In contrast, there is little room for efficiency improvements in electric resistance water heaters, because the technology is approaching its thermal limit.
Commercial. Commercial sector energy consumption is projected to increase at an average rate of 1.4 percent annually, to 20.8 quadrillion Btu in 2020. Similar to the residential sector, electricity consumption for telecommunications, computers, office equipment, and other appliances is the fastest growing area, with total commercial electricity demand increasing at an average annual rate of 2.0 percent. Delivered energy consumption per square foot of commercial floorspace was 147 thousand Btu in 1970, declining generally through the next two decades, reaching a low of 118 thousand Btu per square foot in 1992 (Figure 10). In the projections, delivered energy consumption increases from 121 thousand Btu per square foot in 1999 to 129 thousand Btu per square foot in 2020, an average annual increase of 0.3 percent, due in part to growth in office equipment and other electronic devices, although growth is moderated somewhat by equipment standards. Similar to the residential sector, primary energy consumption in the commercial sector is expected to increase at a slower rate of 0.1 percent through 2020, from 249 to 253 thousand Btu per square foot.
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Currently, the combined residential and commercial buildings sectors use about 0.5 quadrillion Btu of renewable energy, primarily wood consumed for residential space heating and secondary heating. This is not expected to change through 2020. Renewable energy is also used in applications such as ground-source heat pumps that use geothermal energy for heating and cooling and photovoltaic (PV) solar systems that generate electricity. The use of geothermal and solar energy in the buildings sectors is projected to grow 2.0 percent per year from 1999 through 2020. The market share for residential ground-source heat pumps is projected to double by 2020 although that share is projected to remain below 1 percent over the forecast horizon. Grid-connected PV solar systems on buildings are projected to comprise over 750 megawatts of distributed generating capacity by 2020, aided in large measure by programs such as Million Solar Roofs that promote growth in the PV market.
Industrial. Industrial energy demand is projected to increase at an average rate of 1.0 percent per year, reaching 43.4 quadrillion Btu in 2020. Total industrial output is expected to grow at an average rate of 2.6 percent per year; however, the fastest growing industrial sector is non-energy-intensive manufacturing with an average annual growth of 3.3 percent. Energy-intensive manufacturing and nonmanufacturing have growth rates of 1.2 and 1.6 percent, respectively. This structural shift in the industrial sector, combined with ongoing efficiency improvements, helps to moderate the increase in industrial energy demand. Industrial energy intensity, measured as consumption per dollar of output, declined sharply following the oil price shocks of 1978–1979, from a high of 10.1 thousand Btu per 1992 dollar of output in 1979 to 8.2 thousand Btu per dollar output in 1987 (Figure 11). Subsequently, the rate of the decline moderated. Over the period 1978 to 1999, industrial primary energy intensity declined at an average rate of 1.4 percent per year. From 1999 to 2020, intensity is projected to decline at a rate of 1.5 percent per year from 7.4 to 5.4 thousand Btu per 1992 dollar of output.
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The share of total industrial output attributed to the energy-intensive industries is projected to fall from 23 percent in 1999 to 17 percent in 2020. Consequently, even if no specific industry experienced a decline in intensity, aggregate industrial intensity would decline. Figure 11 shows projected changes in energy intensity due to structural effects and efficiency effects separately. Over the forecast period, industrial delivered energy intensity is projected to drop by 26 percent, and the changing composition of industrial output alone is projected to result in approximately a 19 percent drop. Thus, two-thirds of the expected change in delivered energy intensity for the sector is attributable to structural shifts and the remainder to changes in energy intensity associated with projected increases in equipment and production efficiencies.
Consumption of biomass byproducts in the pulp and paper, lumber, and food industries accounts for most of the renewable energy consumed in the industrial sector. Biomass consumption is projected to increase from 2.2 quadrillion Btu in 1999 to 3.1 quadrillion Btu in 2020, a 1.7 percent average annual growth rate. Biomass often is used in cogeneration, the simultaneous production of useful thermal energy and electricity. The higher projected availability of biomass leads to additional biomass-based cogeneration capacity, which is projected to increase from an estimated 4.6 gigawatts in 1999 to 7.5 gigawatts in 2020, a 2.3 percent average annual growth rate.
Total Energy Intensity. Total energy intensity, measured as energy use per dollar of gross domestic product (GDP), has declined since 1970, most notably when energy prices have increased rapidly (Figure 12). Between 1970 and 1986, energy intensity declined at an average rate of 2.3 percent per year as the economy shifted to less energy-intensive industries and more efficient technologies. Without significant price increases and with the growth of more energy-intensive industries, intensity declines moderated to an average of 1.3 percent per year between 1986 and 1999. Through 2020, energy intensity is projected to decline at an average rate of 1.6 percent per year as efficiency gains and structural shifts in the economy offset growth in demand for energy services. Energy use per person generally declined from 1970 through the mid-1980s, and then tended to increase as energy prices declined. Per capita energy use is expected to increase slightly through 2020, as efficiency gains only partly offset higher demand for energy services.
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Electricity Generation. During the 1960s, electricity demand grew by more than 7 percent per year, nearly twice the rate of economic growth (Figure 13). In the 1970s and 1980s, however, the ratio of electricity demand growth to economic growth declined to 1.5 and 1.0, respectively. Several factors have contributed to this trend, including increased market saturation of electric appliances, improvements in equipment efficiency and utility investments in demand-side management programs, and more stringent equipment efficiency standards. Throughout the forecast, growth in demand for office equipment and personal computers, among other equipment, is dampened by slowing growth or reductions in demand for space heating and cooling, refrigeration, water heating, and lighting. The continuing saturation of electricity appliances, the availability and adoption of more efficient equipment, and efficiency standards are expected to hold the growth in electricity sales to an average of 1.8 percent per year between 1999 and 2020, compared with 3.0 percent annual growth in GDP.
Generation from both natural gas and coal is projected to increase through 2020 to meet growing demand for electricity and offset the decline in nuclear power expected from retirements of some existing facilities, for which continued operation is not economical compared to the cost of a new generating facility. Coal remains the primary fuel for generation; however, the share of coal generation is expected to decline from 51 to 44 percent between 1999 and 2020. Although coal use for electricity generation is expected to increase, natural gas use is expected to increase at a more rapid rate. Assumptions about electricity industry restructuring, such as higher cost of capital and shorter financial life of plants, tend to favor the less capital-intensive and more efficient natural gas generation technologies. The natural gas share of total generation is expected to increase from 16 to 36 percent between 1999 and 2020. Historically, consumption for electricity generation by fossil-fired generators has increased at an approximately equivalent pace with generation; however, largely due to the expected penetration of natural gas-fired, combined-cycle technologies, fuel consumption is projected to grow at a slower rate than fossil-fired generation as efficiency improves (Figure 14).
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Total grid-connected electricity generation from renewable sources is projected to increase from 389 billion kilowatthours in 1999 to 448 billion kilowatthours in 2020. Renewables decline from a 10.5 percent share of electricity generation in 1999 to 8.5 percent in 2020. Generation from renewables other than hydroelectricity is projected to increase from 77 billion to 146 billion kilowatthours by 2020, increasing slightly from a 2 percent share of total generation in 1999 to a 3 percent share in 2020. Conventional hydroelectricity is expected to decline slightly through 2020, as output from existing facilities declines. Most of the projected increase in renewables is expected from biomass, landfill gas, geothermal energy, and wind power (Figure 15). State mandates and other incentives, including the Federal production tax credit for generation from wind, encourage much of the growth in renewables in the earlier part of the forecast period.
Further penetration of renewables is slowed by the total cost of renewable generation relative to fossil-fired technology. Despite cost reductions that are projected over time, the total cost of wind generation is expected to remain higher than that of either coal or natural gas-fired combined cycle generation through 2020 (Figure 16). However, all nonhydroelectric renewable electricity generation is projected to grow at a faster rate than all conventional energy sources of generation, with the exception of natural gas. If, in reality, future natural gas supplies and prices are different than projected in AEO2001, the expected outlook for renewable sources of energy could be different.
ALTERNATIVE CASES
In order to show the impact of alternative assumptions concerning the key factors driving energy markets, we include a number of alternative cases in AEO2001, including cases with more optimistic assumptions for renewable generating technologies and cases varying the assumptions about the rate of improvement for energy-consuming technologies.
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High Renewables. A high renewables case assumes more favorable characteristics for nonhydroelectric renewable generating technologies than in the reference case, including lower capital, operations and maintenance costs, increased biomass fuel supplies, and higher capacity factors for solar and wind generation. The assumptions in this case approximate the renewable energy technology goals of the U.S. Department of Energy. Under these assumptions, total generation from nonhydroelectric renewables is projected to reach 242 billion kilowatthours in 2020, compared with 146 billion kilowatthours in the reference case, increasing from 2.8 percent of total generation to 4.6 percent (Figure 17).
Alternative Technology. Another alternative case assumes more rapid improvement in new technologies for end-use demand, through lower costs, higher efficiencies, and earlier availability for new technologies, relative to the reference case, as well as more rapid improvement in the costs and efficiencies of advanced fossil-fired and new renewable generating technologies. In the high technology case, aggregate energy intensity is expected to decline at an average rate of 1.9 percent per year from 1999 to 2020, compared with 1.6 percent per year in the reference case (Figure 18). As a result, projected energy demand in 2020 is 8 quadrillion Btu lower than in the reference case, reducing carbon dioxide emissions to 1,875 million metric tons carbon equivalent in 2020, compared to 2,041 million metric tons carbon equivalent in the reference case (Figure 19). Such technology improvements could result from increased research and development, but should not be considered the most optimistic improvements that could occur with a very aggressive program of research and development.
The AEO2001 reference case assumes continued improvements in technology for both energy consumption and production; however, it is possible that technology could develop at a slower rate. In the 2001 technology case, it is assumed that all future equipment choices will be made from the equipment and vehicles available in 2001, with new building shell and industrial plant efficiencies frozen at 2001 levels. New generating technologies are assumed not to improve over time. As a result, the average decline in energy intensity is reduced to 1.4 percent per year from 1.6 percent per year in the reference case. Efficiencies improve over the forecast period as new equipment is chosen to replace older stock and the capital stock expands; however, projected energy demand in 2020 is 6 quadrillion Btu higher than in the reference case, increasing carbon dioxide emissions to 2,157 million metric tons carbon equivalent.
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Figure 20 displays the impact of different assumptions about technology development in the residential sector alone. In the 2001 technology case, 3.1 percent, or 0.8 quadrillion Btu, of additional energy is required in 2020. In the high technology case, 6.0 percent, or 1.5 quadrillion Btu, of energy is saved in 2020 due to the earlier penetration of more efficient technologies. In a best available technology case, it is assumed that the most energy-efficient technology is always chosen in the forecast regardless of cost. Under this assumption, energy consumption in the residential sector is 22.5 percent, or 5.5 quadrillion Btu, lower in 2020 relative to the reference case. In the commercial sector, using similar assumptions, the 2001 technology case requires 2.4 percent, or 0.5 quadrillion Btu, more energy in 2020 than in the reference case (Figure 21). In the high technology case, commercial energy consumption in 2020 is reduced by 3.5 percent, or 0.7 quadrillion Btu, from the reference case, and, in the best available technology case, consumption in 2020 is reduced by 14.1 percent, or 2.9 quadrillion Btu, relative to the reference case.
Energy Policies and Programs. Due to the policy neutrality of EIA, we do not propose or advocate any particular policies and programs. We do note that, in general, there are a wide range of policies that could alter the energy future described in the AEO2001 by encouraging the development and adoption of more energy-efficient and renewable technologies and stimulating production of domestic energy resources. Such policies include, but are not limited to, programs to foster research, development, and deployment of technologies, government-industry partnerships, voluntary programs, tax credits and other financial incentives, and minimum appliance efficiency and renewable standards.
Conclusion. Over the forecast period, we expect total energy intensity to continue to improve, however, at a slower rate than experienced at other periods in the last twenty years. Increasing demand for energy services is offset to some degree by energy efficiency improvements, some of which occur due to equipment standards. The use of renewable sources of energy is expected to increase; however, at a relatively slow pace, due in part to the relative costs of these technologies compared with fossil-fueled technologies. Technology costs or fossil fuel prices that differ from those in the projections could alter the outlook for renewables. These forecasts also incorporate an expectation of efficiency improvements in both demand and supply although different paths for technological development and other incentives could lead to slower or more rapid efficiency gains.
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Thank you, Mr. Chairman and members of the Subcommittee. I will be happy to answer any questions you may have.
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BIOGRAPHY FOR MARY J. HUTZLER
Mary J. Hutzler is the Director of the Office of Integrated Analysis and Forecasting (OIAF) at the Energy Information Administration (EIA) in the Department of Energy (DOE), where she is responsible for EIA's mid- and long-term analysis and forecasting projects and the National Energy Modeling System. She previously held the position of Director of the Electric Power Division, where she was responsible for the Department's electric power statistical information systems and EIA's analysis of electric power issues, including the impact of legislation and regulation on electric power markets. Other EIA positions that Ms. Hutzler held include Chief of the Data Analysis and Forecasting Branch, Coal Division, and Director of the Long-Term Energy Analysis Division. Prior to joining DOE, Ms. Hutzler was with the Logistics Management Institute (LMI), where she worked on military readiness for the Assistant Secretary for Manpower, Reserve Affairs, and Logistics, Department of Defense and on energy models for EIA; and with the Institute for Defense Analysis (IDA), where she developed models for military operations for the Joint Chiefs of Staff. Ms. Hutzler received a B.A. in Mathematics from Adelphi University in 1970, an M.A. in Applied Mathematics from the University of Maryland in 1972, and she has completed her coursework for a Doctor of Science Degree in Operations Research at the George Washington University.
Chairman BOEHLERT. Thank you very much, Ms. Hutzler. And, incidentally, just a warning to all, this is only temporary, this voice of mine, that usually is fuller. Mr. Humphreys.
STATEMENT OF KENNETH K. HUMPHREYS, SENIOR STAFF ENGINEER, ENERGY, SCIENCE AND TECHNOLOGY DIVISION, PACIFIC NORTHWEST NATIONAL LABORATORY
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Mr. HUMPHREYS. Chairman Boehlert, Mr. Hall, and Members of the Committee, I am pleased to be here this morning to speak with you about our long-term energy modeling work. The Committee specifically invited Dr. Jae Edmonds, or a member of his team, at Pacific Northwest National Laboratory, to talk about the long-term energy modeling work we have conducted over the past 20 years. My name is Ken Humphreys. I have a background in energy technology and work closely with Dr. Edmonds at the laboratory.
The modeling framework we use is based on the principle that all technologies, whether they are renewable, energy efficient—energy efficiency, nuclear, or fossil-based, compete in the marketplace based upon price and performance. Thus, market competition ultimately determines the market share that any particular technology enjoys.
Of the emerging long-term energy challenges, we see cost effectively addressing the issue of climate change as the issue that will require the most fundamental transformation of our energy system over the coming century. It is through the lens of cost effectively addressing the issue of climate change that I will discuss a couple of scenarios, a business-as-usual case, a climate constraint case, and the role of energy efficiency in renewables in each. May I have the slides, please?
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This relatively simple figure—slides, please. Okay. This relatively simple figure is based on an extremely complex analysis. The ''Y'' axis shows global carbon emissions. On the ''X'' axis we see time, from now through the year 2090. Three scenarios are shown, each represented by a carbon emissions curve. The only major difference between each of these scenarios is the energy technology portfolio that underlies them.
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The top curve is referred to as a technology freeze scenario. It represents the resulting carbon emissions in the United States and world if we adhere to technology of today to meet our energy demands of the future. The middle curve assumes dramatic enhancements were made to the existing energy infrastructure to increase its energy efficiency, and that technologies we already have in the R&D portfolio are successfully developed and compete in the marketplace as viable technologies. This middle scenario is consistent with what energy modelers refer to as a business-as-usual scenario or a reference case. This scenario assumes that there is no climate constraint influencing our energy system.
The third and bottom curve in this particular chart assumes that we develop an energy infrastructure that puts us on an economically efficient pathway to ultimately stabilize atmospheric concentrations of CO. From this chart, if we only look at the first 30 years, now through 2030, there doesn't appear to be much difference between these scenarios. However, if we look at the balance of the century, the full magnitude of the challenge reveals itself.
As you can see, the technology portfolios we put in play today cast a strong influence over the future. Again, the upper curve, where today's technology will take us; the lower curve, economically efficient pathways that head us toward a stabilized CO concentration.
First, I would like to talk about what fills the gap between the top two scenarios. That is, what are the technologies we need, or are we counting on, just to achieve a business-as-usual future? These are technologies that, I believe, we all know. There is a strong play for renewables. Nuclear power and energy efficiency play an extremely strong role. While these technologies penetrate around the world, let me say a few—provide a few quantitative characteristics for what this means for the United States.
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By 2050, we are expecting a 45 percent improvement in energy efficiency in all end-use sectors—residential, commercial, transportation, and industrial—pretty extraordinary level of improvement. By the year 2100, renewables make up 20 percent of the U.S. energy mix in a business-as-usual future, however, fossil fuels continue to dominate the mix. All these technologies are things that we are counting on just to achieve business-as-usual in the future.
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Now, let me shift my attention to the lower gap. And that is, what closes the gap between business-as-usual and a scenario where we may choose to address climate change. In that gap, is it technologies we know or is it novel technologies? Well, the answer is what fills that gap, some of both. We see large amounts of novel carbon capture technology penetrating the marketplace that helps fossil fuels retain a significant market share.
We also see, in a climate-constrained world, that solar, hydro-efficiency and nuclear play a critical role in filling the gap. But perhaps even more important, their primary contribution comes from just getting us to a business-as-usual future.
In a climate-constrained world, biomass triples its penetration in the lower gap, bringing the total U.S. renewables penetration to approximately 40 percent of the energy mix.
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In summary, we believe that a 50- to 100-year planning horizon is required if we wish to fully understand what technologies are strategic while minimizing long-term costs. In spite of extraordinary gains in energy efficiency, U.S. energy demand will double over this century, and we will ultimately need to meet that demand. Renewables are a vitally—vital, critical component of solving the future energy challenge. It is also important to recognize that there is no silver bullet. Fossil fuels, nuclear, still play a role. So we need to invest in a diverse R&D portfolio. And, finally, we need to increase our focus on technological breakthroughs and effectively managing R&D if we are to have any budget increases related to energy R&D. Thank you.
[The prepared statement of Mr. Humphreys follows:]
PREPARED STATEMENT OF KEN HUMPHREYS
Chairman Boehlert, Mr. Hall, and Members of the Science Committee—I am pleased to be here this morning to speak to the results of our long-term energy modeling work and the role of renewables and energy efficiency in our energy future.
The Committee specifically invited Dr. Jae Edmonds of Pacific Northwest National Laboratory(see footnote 30) to talk about the energy modeling that he and others have been working on over the past 20 years. Dr. Edmonds is in Africa for a long-standing professional commitment with the Intergovernmental Panel on Climate Change. My name is Ken Humphreys. I am an engineer at the laboratory and work closely with Dr. Edmonds as part of his energy modeling team.
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In 1985, Dr. Edmonds of Battelle and Dr. John Reilly, now of M.I.T., published the book entitled: Global Energy. This book crystallized many of the ideas that had developed over the preceding decade following the energy crisis of the 1970's. Dr. Edmonds and Dr. Reilly integrated together the concepts of experts from around the world and developed the theoretical foundation for what was to become our long-term energy model. This model, known as the Edmonds-Reilly-Barns model, is now highly regarded within the global modeling community, academia, and industry. It has been extensively peer reviewed and is used by many organizations around the world. Our current work is supported by a balanced set of government organizations and private organizations from around the world.
This century the energy system will face many new challenges that are not fully accounted for today in our energy R&D portfolio. Of all the challenges, we see cost—effectively addressing climate change as the issue that will require the most dramatic transformation of our energy infrastructure. For the last three years, in cooperation with 14 collaborating research institutions and with the guiding hand of 22 prestigious scholars, industry leaders, and non-governmental organizations, we've used our global energy modeling capability to examine possible energy futures with and without a climate constraint. We've done this for 14 global regions, including the US.
Figure 1 presents estimated global carbon emissions over the coming century for three scenarios. All three scenarios have the same economic and population growth assumptions. That is, the global economy increases more than 7-fold and population nearly doubles. The only major difference between the scenarios is the energy technology portfolio that underlies the scenarios.
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The middle curve is associated with the Intergovernmental Panel on Climate Change ''business-as-usual'' future. It is comparable to ''business-as-usual'' scenarios used by the International Energy Agency, World Energy Commission and others. The upper curve assumes that the world meets increased energy demand over the coming century with existing technology. The point of showing these two curves today is to illustrate the incredible amount of technological change that is assumed to take place in scenarios that many organizations in the energy modeling field frequently refer to as ''business-as-usual''. Some quantitative characteristics associated with the U.S. component of the ''business-as-usual'' scenario (i.e., the middle curve) include:
End-use energy efficiency in all sectors and regions of the world are projected to improve at 1 percent per year. This assumption implies a 45% percent improvement in energy efficiency in all sectors and regions by 2050.
After accounting for these dramatic improvements in energy efficiency, overall energy demand still increases globally by a factor of 5 and in the U.S. by a factor of 2.
By 2100, all renewables make up 20% of the U.S. energy mix, but 80% of U.S. energy needs in 2100 are still supplied by fossil fuels—down from 90% in 1995. Fossil fuels remain the dominant fuel.
The third and bottom curve on this figure represents an economically efficient pathway that ultimately stabilizes atmospheric concentrations of carbon. We choose the goal of ''stabilizing concentrations'' because that is the goal that is set forth in the United Nations Framework Convention on Climate Change, a treaty which the U.S. Senate and 183 other nations have ratified and is now in force as international law.
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Some quantitative characteristics associated with the U.S. component of the ''stabilization'' scenario include:
Energy prices are higher and therefore overall demand for energy somewhat lower.
The most important contribution that energy efficiency, solar, wind, and nuclear make is that they enable us to achieve the dramatic gains already embedded in our ''business-as-usual future''.
Advanced carbon capture and sequestration technologies enable significant amounts of fossil-based fuels to maintain a large market share.
Nuclear technologies penetrate the market heavily internationally, but unless it regains its public acceptance, it does not penetrate the U.S. market.
In a climate-constrained world, large-scale commercial biomass triples in penetration over a ''business-as-usual'' case and is particularly important in the latter part of the century.
In summary,
Over this century, populations will increase 50 to 100% and the global economy will grow seven to ten-fold. This growth will require extraordinary amounts of energy.
Energy efficiency, renewables, nuclear, and fossil technologies all play an extraordinarily important role. When it comes to meeting our future energy needs, but there is no silver bullet. It takes a portfolio of technologies to meet our future energy needs at minimum cost.
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The overall costs of providing for a robust energy future are minimized when a 50- to 100-year time horizon is taken and near-term technology goals are set. On a global basis, a systematic long-term strategy appears to save many trillions of dollars and the U.S. shares directly in these savings.
Current investment in energy research and development do not appear adequate to meet the challenges of the 21st century. However, increasing R&D budgets in the public and private sectors will only help meet the challenges of the 21st century if we simultaneously increase our attention to breakthrough technologies and increase the effectiveness with which we perform R&D.
For reference, attached is the Executive Summary for the initial phase of the Global Energy Technology Strategy Program. A copy of the full report and additional supporting references are available at http://gtsp.battelle.org.
Biography for Kenneth K. Humphreys
Mr. Ken Humphreys is a Senior Staff Engineer at Pacific Northwest National Laboratory.(see footnote 31) He leads project teams that work in partnership with sponsors to create value through the incorporation of sustainability concepts into their business and technology development processes. His work also includes leading a major Laboratory initiative on carbon management technologies covering bio-based products, microtechnology, fuel cells, carbon capture, and sequestration technologies. Mr. Humphreys has fifteen years of experience working in the fields of technology development, environmental management, and energy analysis.
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Mr. Humphreys leads the U.S. Technical Advisory Group for ISO 14048 on life-cycle assessment data. He is a frequent invited speaker on topics related to carbon management, life-cycle assessment, and incorporating sustainability concepts into product design. He was recently recognized by R&D Magazine for leading the team that created one of the Top 100 products of 1998—Software that supports the design of sustainable products and processes.
RELEVANT EXPERIENCE
PEMEX Value Chain Assessment. Mr. Humphreys is the technical lead on a project to characterize the energy, environmental, and economic aspects of twenty major functional operations that are spread across the PEMEX (the Mexican National Oil Company). As part of the project, major feedstocks, products, water, steam, other utilities, and environmental releases at four facilities are being examined to ascertain where improved technology would help add increased value to PEMEX's operations.
Life-Cycle Assessment (LCA) Software Development. Mr. Humphreys was the project manager for several development projects and a commercialization effort that culminated in the release of Life-Cycle AdvantageTM, a software tool that supports the application of life-cycle assessment. The software and its underlying mathematical algorithms were recently recognized by R&D Magazine as one of 1998's Top 100 technological achievements. This highly visible effort included the participation of seven major U.S. industries. The software helps evaluate the energy consumption, water releases, air emissions, and solid waste issues associated with products and processes.
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Energy/Environmental Life-Cycle Assessment (LCA) of 1,4–Butanediol. As part of a R&D effort to develop bio-based routes for producing 1,4–Butanediol, Mr. Humphreys led a study that examined the life-cycle energy and environmental consequences associated with production of 1,4–Butanediol from natural gas-based feedstocks versus corn-based feedstocks. The study addresses air releases, water consumption and use, and solid waste issues associated with the alternative chemical production technologies.
Life-Cycle Assessment (LCA) Handbook for Energy Systems. For the U.S. Department of Energy's (DOE) Office of Planning and Assessment, Mr. Humphreys led the development of a life-cycle assessment methodology for energy systems. The effort emphasized life-cycle inventory assessment (i.e., characterizing water, air releases, energy and solid waste associated with various technologies).
Energy/Product Life-Cycle Assessment (LCA) Symposiums. With the financial sponsorship of DOE and the organizational sponsorship of the American Institute of Chemical Engineers, Mr. Humphreys chaired two symposiums: one on fuel/energy life-cycle assessment and one on product life-cycle assessment. These were the first forums to bring together representatives from the energy and the product LCA peer communities, which had previously operated relatively independently and unaware of each other's activities.
Input to Federal Legislation Addressing Life-Cycle Assessment (LCA). Mr. Humphreys provided technical input for use by Congressional staffers who were preparing the legislation that directly addressed the application of LCA with the Federal Sector and hosted a LCA workshop that included participation by Congressional staff. Leading LCA experts from twenty-two U.S. and international organizations participated in the workshop.
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Advanced Battery Technology Life-Cycle Cost Analysis Project. Mr. Humphreys had the main technical role in this project which involved determining the life-cycle economics of battery storage technologies. This project developed the most extensive reference document available on the life-cycle economics of load-leveling, stand-alone, and electric vehicle systems. The document has received significant visibility within the international advanced battery community.
Aluminum-Air Battery Operating Economics Study. Mr. Humphreys' involvement in this project consisted of determining the costs associated with the operating cycle of an electric vehicle powered by an aluminum-air (Al-air) battery. The effects of state-of-the-art aluminum production techniques, the use of high quality aluminum alloys, and various vehicle service cycles are key parameters that were examined to determine the operating economics and electrical efficiency of the Al-air battery-powered vehicle.
EDUCATION
B.S., Petroleum Engineering (1986), West Virginia University
M.Eng., Engineering Management (1994), Washington State University
SELECTED PUBLICATIONS AND PRESENTATIONS
Shankle, S.A., and K.K. Humphreys. In Press. The Application of Life-Cycle Assessment to Federal Energy Purchases. U.S. Department of Energy. Washington, DC.
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Owen, J.W., K.K. Humphreys, et al. 1997. Life-Cycle Impact Assessment: State of the Art. Society of Environmental Toxicology and Chemistry. Pensacola, Florida.
Humphreys, K.K., M. Placet, and M. Singh. August 1996. ''Life-Cycle Assessment of Electric Vehicles in the United States.'' Intersociety Energy Conversion Engineering Conference. Washington, DC
Evers, D., S.F. Freeman, K.K. Humphreys, et al. June 1996. Streamlined Life-Cycle Assessment of Bio-Derived 1,4–Butanediol versus Petroleum-Derived 1,4–Butanediol. PNL–11213. Pacific Northwest National Laboratory, Richland, Washington.
Freeman, S.F., K.K. Humphreys, et al. June 1996. ''Use of Streamlined Life-Cycle Assessment for Technology R&D Investment Analysis.'' Air and Waste Management Association 89th Annual Meeting & Exhibition. Nashville, Tennessee.
Anderson, R.G., K.K. Humphreys, B.W. Vigon. November 1995. ''Application of Life-Cycle Assessment to Design-for-Environment and Pollution Prevention.'' Seminar on Environmental Management Systems—The Industrial Context. Singapore Ministry for Environment. Singapore.
Humphreys, K.K. February 1994. ''Life-Cycle Assessment: An Industrial Approach to Integrating Energy, the Environment, and Economics.'' PNL–SA–23528. Pacific Northwest Laboratory, Richland, Washington.
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Humphreys, et al. July 1993. A Technical Framework for Life-Cycle Assessments of Energy Systems. Pacific Northwest Laboratory, Richland, Washington.
Tyson, K.S., C.J. Riley, K.K. Humphreys, et al. November 1993. Fuel Cycle Evaluations of Biomass-Ethanol and Reformulated Gasoline. NREL/TP–463–4950. National Renewable Energy Laboratory, Golden, Colorado.
Brown, D.R., K.K. Humphreys, and L.W. Vail. June 1993. Carbon Dioxide Control Costs for Gasification Combined-Cycle Plants in the United States. PNL–SA–22634. Pacific Northwest Laboratory, Richland, Washington.
Placet, M. and K.K. Humphreys. 1991. ''Environmental Tradeoffs Associated with Various Energy Pathways: A Total Energy Cycle Assessment Approach.'' PNL–SA–19619, Pacific Northwest Laboratory, Richland, Washington.
Humphreys, K.K., et al. 1991. System Engineering Cost Analysis Capability: Technical Reference Manual. Pacific Northwest Laboratory, Richland, Washington.
Stiles, D.L. and K.K. Humphreys. 1991. System Engineering Cost Analysis Capability: Cost Data Documentation. Pacific Northwest Laboratory, Richland, Washington.
Humphreys, K.K. and D.R. Brown. 1990. Life-Cycle Cost Comparisons of Advanced Storage Batteries and Fuel Cells for Utility, Stand-Alone, and Electric Vehicle Applications. PNL–7203, Pacific Northwest Laboratory, Richland, Washington.
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Humphreys, K.K. and D.R. Brown. 1990. Cost and Energy Consumption Estimates for the Aluminum-Air Battery Anode Fuel Cycle. PNL–7230, Pacific Northwest Laboratory, Richland, Washington.
Williams, T.A., K.K. Humphreys, et al. 1990. ''Potential Impacts of CO Emissions Standards on the Economics of Central Receiver Power Systems.'' PNL–SA–17245, Pacific Northwest Laboratory, Richland, Washington.
Coomes, E.P., K.K. Humphreys, et al. 1990. ''Space Power Generation and Distribution Program Basis Document. Volume 2: Technical Appendices.'' PNL–7162, Pacific Northwest Laboratory, Richland, Washington.
Humphreys, K.K. and D.R. Brown, 1989. ''The Life-Cycle Cost Notebook: An Encyclopedia of Advanced Battery and Fuel Cell Costs.'' PNL–SA–17308, Pacific Northwest Laboratory, Richland, Washington.
Shay, M.R., D.L. Stiles and K.K. Humphreys (major contributors). 1989. ''Systems Integration Modeling System (SIMS) Exercise: Report on Demonstration of SIMS as a Decision-Support Tool. Scientific Applications International Corporation, McLean, Virginia.
Humphreys, K.K. 1988. Cost Database for Solar Thermal Technologies. Internal DOE Document, Pacific Northwest Laboratory, Richland, Washington.
Humphreys, K.K. 1988. Evaluation of the Routine Nonradiological Risks to Workers and Public in the Waste Management System. Internal DOE Document, Pacific Northwest Laboratory, Richland, Washington.
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Williams, T.A., K.K. Humphreys, et al. 1988. Characterization of the Fixed Mirror Distributed Focus Solar Thermal Concept for Electricity Generation. PNL–6129, Pacific Northwest Laboratory, Richland, Washington.
Humphreys, K.K., and D.R. Brown. 1987. ''Life-Cycle Cost Projections for Utility Load-Leveling Systems''. PNL–SA–14873, Pacific Northwest Laboratory, Richland, Washington.
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Chairman BOEHLERT. Thank you very much, Mr. Humphreys. Dr. Holdren.
STATEMENT OF PROFESSOR JOHN P. HOLDREN, HARVARD UNIVERSITY, AND CHAIR, PRESIDENT'S COMMITTEE OF ADVISORS ON SCIENCE AND TECHNOLOGY (PCAST), ENERGY RESEARCH AND DEVELOPMENT PANEL
Dr. HOLDREN. Mr. Chairman, Members, ladies and gentlemen, I thank you for the opportunity to appear today. My written statement and biography have been submitted for the record. I want to say that the views I am expressing here today are my own, not necessarily those of the organizations I am connected with. In this oral statement, I am going to try to both supplement and summarize the numerology and recommendations in my written statement in 14 brief points, about three points per minute.
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First, our country and the world are entering the 21st century facing a formidable array of energy-related challenges. Those include the provision of affordable and reliable energy supplies sufficient to sustain and expand prosperity. They include limitation of the financial drain, the vulnerability to oil-price shocks, and the potential for armed conflict associated with overdependence on foreign oil. They include reduction of the air pollution burdens from combustion of the fossil fuels that still provide 85 percent of U.S. energy supply and 78 percent of the world's. And they include avoidance of the intolerable degrees of global climate change now understood with increasing confidence and clarity to be the consequence of business-as-usual growth in fossil fuel use in this country and around the world.
Second, the development and deployment of advanced technologies for clean energy supply and for increased energy end-use efficiency, are the keys to meeting all of these challenges.
Third, although the private sector can and will do much of what is required in this domain, government's participation in research and development, in demonstration, and in encouraging selected kinds of deployments is also needed. This is so in large part because the energy challenges I have mentioned are laden with externalities and public goods not reflected in the economic balance sheets of individual firms and consumers.
Fourth, although development and deployment of better technology is a large part of the answer, there is, as Mr. Humphreys has already said, no silver bullet out there, no single silver bullet that can do the whole job. We need to invest in a portfolio of improved energy options, demand side and supply side, short term and long term, sure things and long shots. We need more efficient cars, homes, offices, and factories. We need advanced technologies for finding and harvesting and burning fossil fuels. We need more affordable renewable energy technologies. We need safer and more proliferation-resistant nuclear energy systems, and we need to try to develop fusion.
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Fifth, this having been said, it has to be added that in the end we will not want to utilize every possible way to supply energy or every way to save it. The ratio of benefits to cost will be more favorable for some options than for others, where benefits include expandability and longevity of contribution and costs include environmental impacts and risks, as well as the monetary costs. A major reason for developing better energy options is to be able to reduce reliance on those that are less attractive.
Six, the government's involvement should be strongest where the potential public benefits, not reflected in private returns on investment, are largest. And the government should be most interested of all in options that address more than one of the major challenges at a time, options that can limit oil import dependence and improve air quality and reduce greenhouse gas emissions, for example.
Seventh, on these criteria—and this is the seventh point—energy efficiency options and renewable energy options are particularly deserving of increased government support. They score very high on public benefits, expandability and longevity of potential contributions and simultaneous leverage against multiple challenges.
Eighth, the importance of the efficiency option has been underlined by three decades of compelling experience. My written statement shows that from 1970 to 2000, improvements of the overall efficiency of the U.S. energy system, measured as real GNP divided by primary energy supplied, saved some 2b times more energy than the growth of all sources of supply combined.
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Ninth, as indicated in my written statement—this is the ninth point—the 1997 energy study that I led for the President's Committee of Advisors on Science and Technology concluded that with appropriate investments in energy efficiency R&D and policies favoring deployment of the results, the efficiency improvement performance of the last 30 years could be matched or bettered in the next 30.
Tenth, the growth of renewable energy supplies over the past 30 years has been much less impressive than the growth of the contributions of energy efficiency. While efficiency in the year 2000 was saving 79 quadrillion BTUs per year, compared to what energy requirements would have been in that year under 1970 efficiency levels, renewables in 2000 were supplying only about three quadrillion BTUs per year more than they were supplying in 1970.
Eleventh, the major reason for this limited growth in renewables was cost. Although the costs of many renewable energy technologies fell dramatically in the period, the cost of energy from fossil fuels was so low in the 1990's that most renewables still could not compete in most circumstances. But the cost of energy from renewables continues to fall. And with suitable investments in R&D and accompanying demonstration and deployment programs, it could fall even faster, while the cost of energy from fossil fuels is likely to rise in the decades ahead, and, even more so, if fossil fuels are made to pay, as they ought to be, for their carbon emissions.
Twelfth, the potential contributions from renewables in the decades immediately ahead are substantial. According to the 1997 PCAST study, one particularly promising renewable fuels technology alone, ethanol from cellulosic biomass, could be displacing 2b million barrels a day of oil by 2030. In the electricity sector, the PCAST study estimated that wind energy alone could be supplying as much as 1,100 billion kilowatt hours per year by 2025, nearly twice as much as was coming from natural gas in the year 2000.
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Thirteenth, the energy scenarios developed out to 2020, in the 2001 edition of the Energy Information Administration's Annual Energy Outlook, about which we have already heard this morning, are, as you have seen, considerably less optimistic than the PCAST study was about the potential contributions from energy efficiency improvements and from renewable energy technologies. The reason for that, I believe, is that the EIA study did not consider the possibility of world oil price increases by 2020 above $28 a barrel, or natural gas prices above $3.70 a million BTU, or mine-mouth coal prices above $13 per short ton, where all those prices are in 1999 dollars. And it did not consider the possibility of major policy changes that would have the effect of sharply increasing the incentives for expanding the use of nonfossil fuel options.
Fourteenth, the last point, the 1997 PCAST study recommended—in light of the large potential contributions and high leverage against energy-linked threats to public welfare offered by continuing increases in energy end-use efficiency and expanded use of renewables—it recommended that a substantial fraction of the additional effort in a strengthened Federal R&D portfolio ought to be devoted to those two areas. Of a recommended year 2001 budget of $2.2 billion in as-spent money for all energy supply and energy efficiency R&D, PCAST proposed that $770 million should be going to efficiency and $620 million to renewables, but the actual appropriation in Fiscal Year 2001 totaled only $1.7 billion instead of $2.2, of which $600 million was for efficiency and $375 million for renewables. These shortfalls are unfortunate.
I hope that the arguments presented here today will encourage this Committee to work with the Bush Administration to provide very substantial increases in these appropriations for Fiscal Year 2002. The amounts of money involved are modest. The entire energy supply and energy efficiency R&D budget, recommended by PCAST for Fiscal Year 2002, could be funded with about 2 cents per gallon out of the Federal gasoline tax and the returns to the public welfare would be very large. Thank you very much.
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[The prepared statement of Dr. Holdren follows:]
PREPARED STATEMENT OF JOHN P. HOLDREN
MR. CHAIRMAN, MEMBERS, LADIES AND GENTLEMEN: I am John P. Holdren, a professor at Harvard in both the Kennedy School of Government and the Department of Earth and Planetary Sciences. Since 1996 I have directed the Kennedy School's Program on Science, Technology, and Public Policy, and for 23 years before that I co-led the interdisciplinary graduate program in Energy and Resources at the University of California, Berkeley. Also germane to today's topic, I was a member of President Clinton's Committee of Advisors on Science and Technology (PCAST) and served as chairman of the 1997 PCAST study of ''Federal Energy Research and Development for the Challenges of the 21st Century'' and the 1999 PCAST study of ''Powerful Partnerships: The Federal Role in International Cooperation on Energy Research, Development, Demonstration, and Deployment''. A more complete biographical sketch is appended to this statement. The opinions I will offer here are my own and not necessarily those of any of the organizations with which I am associated. I very much appreciate the opportunity to testify this morning on this timely and important subject.
Introduction
The comprehensive review of U.S. federal energy research and development that I chaired for the White House in 1997 was carried out by a panel of 21 senior individuals from industry, academia, and public-interest organizations. In addition to members with experience and expertise across the full range of energy options—fossil fuels, nuclear fission and fusion, renewable energy sources, and increased end-use efficiency—it included others of senior research, management, and policy-advising experience outside the energy field (including a former chair of the Council of Economic Advisors and a former CEO of Hewlett-Packard), who held no prior brief for increasing federal energy research. The panel concluded (1, p ES–9) that
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Energy-technology improvements, achieved in the United States and then deployed here and elsewhere, could:
lower the monetary costs of supplying energy;
lower its effective costs still further by increasing the efficiency of its end uses;
increase the productivity of U.S. manufacturing;
increase U.S. exports of high-technology energy-supply and energy end-use products and know-how;
reduce over-dependence on oil imports here and in other countries, thus reducing the risk of oil-price shocks and alleviating a potential source of conflict;
diversify the domestic fuel-supply and electricity-supply portfolios to build resilience against the shocks and surprises that an uncertain future is likely to deliver;
reduce the emissions of air pollutants hazardous to human health and to ecosystems;
improve the safety and proliferation-resistance of nuclear-energy operations around the world;
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slow the build-up of heat-trapping gases in the global atmosphere; and
enhance the prospects for environmentally sustainable and politically stabilizing economic development in many of the world's potential trouble spots.
The panel noted that the public benefits of these outcomes, beyond the private benefits to energy firms that invest in achieving them, warrant public investments in energy-technology innovation supplementing the efforts of the private sector; and it argued that the federal government's investments in this category at the time of the review—FY 1997—were ''not commensurate in scope and scale with the energy challenges and opportunities that the twenty-first century will present'', taking into account ''the contributions to energy R&D that can reasonably be expected to be made by the private sector under market conditions similar to today's'' (1, p ES–1). The PCAST panel recommended, accordingly, a substantial strengthening of the federal energy R&D portfolio, ramping up DOE budget authority for R&D on end-use efficiency, fission, fossil, fusion, and renewable-energy options from a total of $1.3 billion in FY 1997 to $2.1 billion in FY 2003 (expressed in constant 1997 dollars). The following table shows the distribution of the proposed increases.
These budget recommendations—putting 85% of the real annual increment in FY 2003 compared to FY 1997 into efficiency and renewables—were unanimous, notwithstanding the diversity of energy (and nonenergy) backgrounds represented on the panel and notwithstanding the history of disagreements among the different energy constituencies about funding priorities. The unanimity on the panel emerged from detailed joint review and discussion of the content of the existing programs, the magnitudes of unaddressed needs and opportunities, the current and likely future role of private industry in each sector, and the size of the public benefits associated with the advances that R&D could bring about. Efficiency and renewables received the bulk of the increment because they scored high on potential public benefits and on R&D needs and opportunities unlikely to be fully addressed by the private sector.(see footnote 32)
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In what follows here, I will discuss, for both the efficiency and the renewables sectors, the opportunities as seen by the PCAST panel, and I will try to explain, in so doing, some of the reasons that PCAST appears to be more optimistic in its stance on renewables and efficiency than the Energy Information Administration is in the forecasts out to 2020 in the latest Annual Energy Outlook (4). At the end, I will offer some observations on measures, beyond R&D, that I believe would be warranted in pursuit of increased contributions from efficiency and renewables and the public benefits that such contributions would bring.
Efficiency
In the period from 1955 to 1970, the energy intensity of the U.S. economy stayed essentially constant, at about 19 quadrillion Btu per trillion 1996 dollars of GDP. From 1970 to 1980, a period marked by the Arab-OPEC-induced oil-price shocks in 1973–74 and 1979, the energy intensity of the economy fell at an average rate of 1.7% per year; and from 1980 to 1985 (at the beginning of which period the real world oil price was nearly six times its 1972 value) it fell 3.5% per year. In the decade from 1985 to 1995, the rate of decline of energy intensity in the United States slowed to about 1.0% per year. From 1995 to 2000, the rate of decline has been 2.7% per year.(see footnote 33)
The improvements since 1970 in the overall energy efficiency of the U.S. economy resulted from a complex and changing mix of increases in the efficiency of energy transport, oil refining, and electricity generation, transmission, and distribution; increases in the technical efficiency of energy end-use in space conditioning, household and commercial appliances, manufacturing, and the transport of passengers and freight; and a transition from a more-energy-intensive to a less-energy-intensive mix of productive activities in the economy.(see footnote 34) From the overall numbers alone, however, it is easy to calculate that if the U.S. economy of the year 2000 had been generated at the energy intensity of economic activity that prevailed in this country in the period from 1955 to 1970, the United States would have used 177 quadrillion Btu of primary energy in 2000 rather than the 98 quadrillion Btu actually used. The rate of reduction of energy intensity of the U.S. economy averaged over the whole 30 years from 1970 to 2000 was 2.0% per year.(see footnote 35) The annual energy savings attributable in the year 2000 to this decline in energy intensity compared to the 1955–1970 value (amounting to 177 – 98 = 79 quadrillion Btu per year) is more than two and a half times larger than the total increase in U.S. energy supply from all sources in the same period (which amounted to 98 – 68 = 30 quadrillion Btu per year).
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The fact that reductions in demand due to reduced energy intensity of economic activity were far larger between 1970 and the present than increases in energy supply goes a long way toward explaining the interest of the PCAST energy panel (and most other analysts of the energy situation) in determining and exploiting the potential for continuing improvements in energy efficiency in the decades ahead. The other pillars underpinning this interest are the economic and environmental attractions of energy-efficiency improvements, across a wide range of circumstances, compared with available means of increasing supply. On this point the 1997 PCAST report stated (1, p ES–15):
Increasing energy efficiency has an extraordinary payoff. It simultaneously saves billions of dollars, reduces oil imports and trade deficits, cuts local and regional air pollution, and cuts emissions of carbon dioxide.
The PCAST study set forth specific goals for a bolstered program of energy-efficiency R&D in the years immediately ahead as follows (1, p ES–15):
Buildings. To fund and carry-out research on equipment, materials, electronic and other related technologies and work in partnership with industry, universities, and state and local governments to enable by 2010: (1) the constructing of 1 million zero-net-energy buildings; and (2) the construction of all new buildings with an average 25 percent increase in energy efficiency as compared to a new building in 1996. Additional longer term research in advanced energy systems and components will enable all new construction to average 70 percent reductions and all renovations to average 50 percent reductions in greenhouse-gas emissions by 2030.
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Industry. By 2005, develop with industry a more than 40 percent efficient microturbine (40 to 300 kW), and introduce a 50 percent efficient microturbine by 2010. By 2005, develop with industry and commercially introduce advanced materials for combustion systems to reduce emissions of nitrogen oxides by 30 to 50 percent while increasing efficiency 5 to 10 percent. By 2010, achieve a more than one-fourth improvement in energy intensity of the major energy-consuming industries (forest products, steel, aluminum, metal casting, chemicals, petroluem refining, and glass) and by 2020 a 20 percent improvement in energy efficiency and emissions of the next generation of these industries.
Transportation. By 2004, develop with industry an 80-mile-per-gallon production prototype passenger car (existing goal of the Partnership for a New Generation of Vehicles C PNGV). By 2005, introduce a 10-mpg heavy truck (Classes 7 and 8) with ultra low emissions and the ability to use different fuels (existing goal); and achieve 13 mpg by 2010. By 2010, have a production prototype of a 100-mpg passenger car with zero equivalent emissions. By 2010, achieve at least a tripling in the fuel economy of Class 1–2 trucks, and double the fuel economy of Class 3–6 trucks.
The report concluded that these efforts ''complemented by sound policy, can help the country increase energy efficiency by a third or more in the next 15 to 20 years.''
An increase of one third over a 15-year period would constitute an average rate of improvement of 2.7% per year, equal to what the United States achieved from 1995 to 2000 and considerably better than the 2.0% per year 1970–2000 average. An increase of a third over a 20-year period would correspond exactly to 2.0% per year. For comparison, the ''reference'' scenario in the Energy Information Administration's 2001 Annual Energy Outlook entails an average rate of reduction of energy intensity between 2000 and 2020 of 1.6% per year, along with real economic growth averaging 3.0% per year (4, p 7).(see footnote 36) It is instructive to consider the difference between the EIA's ''reference'' value of a 1.6% per year decline in energy intensity compared to the lower of the PCAST figures, 2.0% per year (corresponding also to what was actually achieved between 1970 and 2000). When applied to the period 2000–2020 under the ''reference'' economic growth assumption of 3.0% (real) per year, the EIA rate of decline in energy intensity of 1.6% per year yields primary energy use of 129 quadrillion Btu in 2020; a 2.0% per year decline in energy intensity over this period yields primary energy use in 2020 of 119 quadrillion Btu, cutting 10 quadrillion Btu off the increase. If a 2.4% per year decline in energy intensity could be achieved in this period (still not as high as the 2.7% per year actually achieved for 1995–2000), primary energy use in 2020 would be 110 quadrillion Btu, 19 quadrillion Btu below the EIA ''reference'' case.
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Why was PCAST more optimistic about energy-efficiency potential than the most recent EIA Annual Energy Outlook appears to be? It is important to understand, first of all, that neither of these studies is making unconditional predictions. Their scenarios depend on assumptions, variously explicit and implicit, about a variety of factors that will influence rates of economic growth, rates of technological innovation, and the rates of application of available energy-efficiency technologies. The EIA reference case assumes that the world oil price in 2020 will be about $22 per barrel—compared to $17 per barrel in 1999 but $27 per barrel in 2000 (all of these prices in 1999 dollars)—under world oil production of 117 million barrels per day (compared to 76 million barrels per day in 1999) and an OPEC share of this production reaching 49% (up from 40% in 1999). The highest world oil price in 2020 in any of the EIA scenarios is $28 per barrel (1999 dollars). As best I can tell, moreover, the EIA scenarios do not account for the possibility of policies much more aggressive than today's for promoting energy end-use efficiency, nor for any ''future legislative or regulatory actions that might be taken to reduce carbon dioxide emissions'' (5, p 6).
The PCAST study did not develop explicit scenarios about future energy prices and policies, but I believe it fair to say that most if not all of the PCAST panelists would have considered the range of possibilities for the world oil price in 2020 to extend considerably above the figures considered by the EIA. The panel also concluded that ''there is a significant possibility that governments will decide, in light of the perceived risks of greenhouse-gas-induced climate change and the perceived benefits of a mixed prevention/adaptation strategy, that emissions of greenhouse gases from energy systems should be reduced substantially and soon'' (1, p ES–10). And its assessment of what could be achieved in the way of energy-efficiency improvements over the next two to three decades was conditioned on the full implementation of its recommendations for increased federal R&D in this area, as outlined above. The increases in DOE's energy-end-use-efficiency R&D budgets actually achieved since the publication of the PCAST report have fallen considerably below what was recommended, as well be seen in a moment.
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Renewables
What have been the changes in the U.S. energy-supply mix and what has been the role of renewables in this evolving picture? The changes in U.S. primary energy supply from 1970 to 2000 are summarized in Table 2. Table 3 shows, in a similar format, the changes in the electricity-generation sector in the past 10 years. Renewable energy contributed 6.0% of U.S. primary energy in 1970, rising to 7.3% of a larger total in 2000. The renewable share of U.S. electricity generation was 11.6% in 1970, falling to 9.6% of a larger total in 2000. The contribution of non-hydro renewables to electricity generation was 2.0% in 1990, rising to 2.5% in 2000. Clearly, the interest of PCAST and other groups in the prospects for a large contribution from renewables over the next few decades is based—in contrast to the case of energy efficiency—more on hopes for the future than on the experience of the recent past.
The PCAST study noted that the principal obstacle to more substantial deployment of renewable energy options has been the high costs of the energy delivered by these technologies. It found grounds for optimism in the sharp declines in these costs, for a number of the renewable options, over the preceding two decades;(see footnote 37) and it concluded that continued and expanded investments in public- and private-sector R&D on renewables—together with measures to move these technologies along the learning curve through increased purchases under, e.g., renewables portfolios standards—could allow renewable energy technologies to ''become major contributors to U.S. and global energy needs over the next several decades'' (1, p ES–22). The focuses and goals of the expanded Federal effort in R&D on renewables recommended by PCAST were described in its report as follows (1, pp ES–22/23):
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Wind. Reduce by 2005 wind electricity costs to half of today's costs, so that wind power can be widely competitive with fossil-fuel-based electricity in a restructured electric industry, through R&D on a variety of advanced wind turbine concepts and manufacturing technologies.
Photovoltaics (PV): Pursue R&D that would lead to PV systems prices falling from the present price of $6,000/kW to $3,000/kW in 5 years, to $1500/kW by 2010, and to $1,000/kW by 2020. R&D activities should include assisting industry in developing manufacturing technologies, giving greater attention to balance of system issues, and expanding fundamental research on advanced materials.
Solar Thermal Electric Systems. Strengthen ongoing R&D for parabolic dish and heliostat/central receiver technology with high temperature thermal storage, and develop high temperature receivers combined with gas-turbine based power cycles; goals should be to make solar-only power (including baseload solar power) widely competitive with fossil fuel power by 2015.
Biopower. Enable commercialization, within ten years, of advanced energy-efficient power-generating technologies that employ gas turbines and fuel cells integrated with biomass gasifiers, building on past and ongoing R&D for coal in such configurations, and exploiting the advantages of biomass over coal as a feedstock for gasification. These technologies could be widely competitive in many developing country markets and in U.S. markets that use biomass residues or use energy crops in systems that derive coproducts from biomass.
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Geothermal Energy. Continue work on hydrothermal systems, and reactivate R&D on advanced concepts, giving top priority to high-grade hot dry-rock geothermal; this technology offers the long-term potential, with advanced drilling and reservoir exploitation technology, of providing heat and baseload electricity in most areas.
Biofuels. Accelerate core R&D on advanced enzymatic hydrolysis technology for making ethanol from cellulosic feedstocks, with the goal that between 2010 and 2015 ethanol produced from energy crops would be fully competitive with gasoline as a neat fuel, in either internal combustion engine or fuel cell vehicles; coordinate this development with the biopower program so as to co-optimize the production of ethanol from the carbohydrate fractions of the biomass and electricity from the lignin using advanced biopower technology.
Hydrogen. Carry out R&D on hydrogen using and producing technologies; coordinate hydrogen-using technology development with proton-exchange-membrane fuel-cell vehicle development activities in the Departments Energy Efficiency program. Give priority in hydrogen-production R&D to co-optimizing the production of hydrogen from fossil fuels and sequestration of the CO separated out during the production process, in collaboration with the Fossil Energy program.
Hydropower. To sustain and increase over 92,000 MWe of hydro capacity, additional R&D is needed to provide a new generation of turbine technologies that are less damaging to fish and aquatic ecosystems. By deploying such technologies at existing dams and in new low-head, run-of-river applications, as much as an additional 50,000 MWe could be possible by 2030.
The largest hope for near-term growth in the contribution of renewables to the nonelectric sector rests on liquid fuels from biomass. The PCAST study estimated that an aggressive program to produce ethanol from cellulosic biomass could be displacing 2.5 million barrels per day of oil by 2030 and over 3 million barrels per day in 2035. The PCAST report also identified other biofuels options for this time period without attempting to estimate their potential quantitatively. This indicates that the 2.5–3 million barrel per day range by 2030–35 is not an upper limit. The EIA scenarios, by contrast, only show about 125,000 barrels per day of motor-fuel displacement by ethanol in 2020. As in the case of the EIA's relatively modest expectations for energy-efficiency increases over this period, this minimal result for biomass ethanol can be attributed above all to the EIA's assumptions of (a) moderate world oil prices and (b) the absence of aggressive policies to reduce either oil-import dependence or greenhouse-gas emissions.
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The Clinton Administration's initiative on ''Promoting Bio-based Products and Technologies'', announced in August 1999, posed a target of tripling use of energy and products from biomass in the United States by 2010. (This would include the use of biomass for electricity generation and cogeneration, as well as production of high-value chemicals.) Inasmuch as biomass energy use in this country in 1998 was about 3 quadrillion Btu per year, the stated goal implies an addition of 6 quadrillion Btu per year by 2010, equivalent in energy content to almost 3 million barrels per day of crude oil.
In the electricity-generating sector, the EIA's reference scenario for 2020 has coal-fired electricity generation increasing to about 2300 billion kWh from its year—2000 value of 1950 billion kWh, while natural-gas-fired generation increases to nearly 1600 billion kWh from its year—2000 value of 620 billion kWh. Nuclear energy declines to about 570 billion kWh from its year—2000 value of 760 billion kWh, because of retirements of some of the existing nuclear power plants in the absence of replacement by new ones.(see footnote 38) renewable-based electricity generation in aggregate stays roughly constant. The contribution of conventional hydropower stays roughly constant at 300 billion kWh per year, and the nonhydro renewables increase from about 95 billion kWh in 2000 to about 145 billion kWh in 2020. A ''high renewables'' case presented in the EIA study has the nonhydro renewables contribution reaching about 240 billion kWh in 2020 (still barely over 10 percent of coal's contribution in the ''reference'' case), with biomass providing about 110 billion kWh of this, and wind and geothermal about 60 billion kWh each.
Again, these EIA estimates of renewable-electric potential are conservative, in my view, because the EIA study did not consider the possibility of world oil-price increases above $28 per barrel, or natural-gas prices above about $3.70 per million Btu, or minemouth coal prices above about $13 per short ton (all prices in 1999 dollars), or the possibility of major policy changes that would have the effect of sharply increasing the incentives for expanding the use of non-fossil-fuel options. The 1997 PCAST study made some estimates of what might be achievable from renewable-electric options under prices or policies that encouraged these options very strongly, and the resulting figures were far higher than those in the EIA scenario: they included as much as 1100 billion kWh by 2025 from wind systems with storage technologies, similar quantities by 2035 from photovoltaic and solar-thermal-electric systems with storage, 800 TWh by 2035 from biopower, and 1500 TWh by 2050 from hot-dry-rock geothermal. These are described as possibilities, not predictions, but the figures are indicative of very large potential.
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Concluding Observations
The overall technical potential to reduce U.S. oil-import dependence and greenhouse-gas emissions through the use of a wide range of currently available and still to be fully developed energy-efficiency and renewable-energy options is clearly very large.(see footnote 39) The question is how much of this technical potential will be realized in practice, by when. The key to expanded use of the currently available options is incentives. The keys to achieving the potential of the emerging options are, first, research, development, and demonstration; and, second, incentives to help bring about the commercialization and widespread deployment of the innovations that result from research, development, and demonstration.
R&D should be the easiest part of this equation with respect to gaining approval and finding the money, inasmuch as it is so inexpensive. As already noted, total U.S. federal spending in FY 1997 for energy-supply and energy-efficiency R&D totaled only about $1.3 billion, an amount that could be raised by a tax of 1.3 cents per gallon on U.S. gasoline sales. Yet even the modest proposals of PCAST to raise this amount by a bit over 50 percent, in real terms, between FY 1999 and FY 2003 have met with considerably less than total success. The fate of the PCAST recommendations, up until now, is summarized in Table 4 (where the figures are in as-spent rather than constant dollars, for ease of comparison with government budget documents). For the most recent year, the efficiency appropriation is at a respectable 78% of the PCAST recommendation, but the renewables appropriation is only at 60% of the recommended level.
Putting in place an array of price and non-price incentives and other policies that will encourage deployment of energy-efficiency, renewable-energy, and other advanced energy technologies in proportion to their public benefits will be even more difficult. We ought to have, in my view: tighter Corporate Average Fuel Economy standards (or their equivalent in voluntary fuel-economy agreements with auto manufacturers); expanded use of renewable-energy portfolio standards and production tax credits; energy-efficiency standards and labeling programs for energy-using equipment in residential and commercial buildings; and much more. Perhaps most importantly, in my view, the incentives relating to our energy deployments are not likely to be ''right'' until we bite the bullet and implement either a carbon tax or its equivalent in the form of a tradeable carbon-emissions permit system. This will not be politically easy, but growing recognition of the climate-change perils of ''business as usual'' expansion of the use of conventional fossil-fuel technologies, by the United States and by others, will eventually compel taking this step. And we would be better off to take it sooner, rather than later.
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I thank the Committee for the opportunity to put these views before you.
References
(1) President's Committee of Advisors on Science and Technology, Energy Research and Development Panel. Federal Energy Research and Development for the Challenges of the 21st Century. Washington, DC: Government Printing Office. November 1997. http://www.ostp.gov/Energy/index.html.
(2) John P. Holdren. ''U.S. Vulnerability to Oil-price Shocks And Supply Constrictions. . .And How to Reduce It.'' Committee on Governmental Affairs, United States Senate, Oversight Hearings on Recent Oil-Price Increases. March 24, 2000. http://www.senate.gov/?gov—affairs/032400—holdren.htm.
(3) John P. Holdren. ''Improving U.S. Energy Security and Reducing Greenhouse-Gas Emissions: What Role for Nuclear Energy?'' Hearings by the Subcommittee on Energy and Environment, Committee on Science, U.S. House of Representatives. July 25, 2000. http://ksgnotes1.harvard.edu/BCSIA/Library.nsf/pubs/energysecurity
(4) U.S. Department of Energy, Energy Information Administration. Annual Energy Outlook 2001. Washington, DC: Government Printing Office. 2001.
(5) U.S. Department of Energy, Energy Information Administration. Monthly Energy Review. Washington, DC: Government Printing Office. January 2001.
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(6) International Energy Agency. Indicators of Energy Use and Efficiency. Paris: OECD/IEA. 1997.
(7) Joel Darmstadter. The Role of Renewable Resources in U.S. Electricity Generation—Experience and Prospects. Climate Change Issue Brief No. 24. Washington, DC: Resources for the Future. September 2000.
(8) DOE Interlaboratory Working Group on Energy-Efficient and Clean Energy Technologies. Scenarios for a Clean Energy Future. Report ORNL/CON–476, LBNL–44029. Springfield, VA: National Technical Information Service. November 2000.
(9) United Nations Development Programme, United Nations Department of Economic and Social Affairs, and the World Energy Council. Energy and the Challenge of Sustainability. New York: UN Development Programme. September 2000.
Biography for John P. Holdren
John P. Holdren is the Teresa and John Heinz Professor of Environmental Policy and Director of the Program on Science, Technology, and Public Policy in the John F. Kennedy School of Government, and Professor of Environmental Science and Public Policy in the Department of Earth and Planetary Sciences, at Harvard University. He is also a member of the Board of Tutors for Harvard's undergraduate major in Environmental Science and Public Policy; Distinguished Visiting Scientist and Vice Chair of the Board of Trustees at the Woods Hole Research Center; and Professor Emeritus of Energy and Resources at the University of California, Berkeley (where he was co-founder in 1973 of the campus-wide, interdisciplinary, graduate-degree program in Energy and Resources in which he served variously as Vice Chair, Chair, and Chair of Graduate Advisors until 1996).
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He is Chair of the Committee on International Security and Arms Control of the National Academy of Sciences, a member of the Board of the John D. and Catherine T. MacArthur Foundation, and was a member from 1994 to 2001 of President Clinton's Committee of Advisors on Science and Technology (PCAST). He chaired PCAST panels on protection of nuclear-bomb-materials (1995), the U.S. fusion-energy R&D program (1995), U.S. energy R&D strategy (1997), and international cooperation on energy (1999); and in 1996–7 he co-chaired with E. Velikhov the U.S.-Russian Independent Scientific Commission on Plutonium Disposition (reporting to Presidents Clinton and Yeltsin). He also chairs National Academy panels on the spent-fuel standard for plutonium disposition, on the Comprehensive Test Ban Treaty, and on U.S.-India energy cooperation.
He is the author of about 300 articles and reports on plasma physics, fusion energy technology, energy and resource options in industrial and developing countries, global environmental problems, impacts of population growth, and international security and arms control, and he has co-authored and co-edited fifteen books on these topics—including Energy (1971), Human Ecology (1973), Ecoscience (1977), Energy in Transition (1980), Earth and the Human Future (1986), Strategic Defences and the Future of the Arms Race (1987), Building Global Security Through Cooperation (1990), Management and Disposition of Excess Weapons Plutonium (2 vols., 1994 & 1995), The Future of U.S. Nuclear Weapons Policy (1997), and Conversion of Military R&D (1998).
Holdren earned bachelors and masters degrees from M.I.T. in aeronautics and astronautics (1965 and 1966) and the Ph.D. from Stanford University in aeronautics/astronautics and theoretical plasma physics (1970). Before joining the UC Berkeley faculty in 1973, he worked on satellite and missile technology at the Lockheed Corporation, as a plasma physicist at the Lawrence Livermore Laboratory, and as a Senior Research Fellow in the Environmental Quality Laboratory and the Division of Humanities and Social Sciences at the California Institute of Technology.
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He is a member of the National Academy of Sciences and the National Academy of Engineering, and a Fellow of the American Academy of Arts and Sciences, the American Physical Society, the American Association for the Advancement of Science, and the California Academy of Sciences. In 1981 he received one of the first MacArthur Foundation Prize Fellowships; in 1993 he shared the Volvo Environment Prize with Paul Ehrlich; and in 1994 he received the Forum Award of the American Physical Society (''for promoting public understanding of the relation of physics to society''). In December 1995 he delivered the Nobel Peace Prize acceptance lecture on behalf of the Pugwash Conferences on Science and World Affairs, which he served as Chair of the Executive Committee from 1987 to 1997. He received the 1999 Kaul Foundation Award in Science and Environmental Policy, the 2000 Tyler Prize for Environmental Achievement, and the 2001 Heinz Prize in Public Policy.
Dr. Holdren was born in Sewickley, Pennsylvania, and grew up in San Mateo, California. He is married to Dr. Cheryl E. Holdren, a biologist. John and Cheryl live in Falmouth and Cambridge.
Next Hearing Segment(3)
(Footnote 26 return)
One Btu is the amount of heat energy equal to the heat needed to raise the temperature of one pound of water at one atmosphere pressure and at 39.1 F by 1 F. One quadrillion Btu is approximately equivalent to the annual energy consumption of 9.85 million U.S. households.
(Footnote 27 return)
See http://www.eia.doe.gov/oiaf/aeo.html. EIA states that ''[t]he projections in AEO2001 are not statements of what will happen but of what might happen, given the assumptions and methodologies used. The projections are business-as-usual trend forecasts, given known technology, technological and demographic trends, and current laws and regulations. Thus, they provide a policy-neutral reference case that can be used to analyze policy initiatives.''
(Footnote 28 return)
EIA's reference case is based on the results from its National Energy Modeling System (NEMS) and on Federal, State, and local laws and regulations in effect on July 1, 2000. It also assumes, among other things, that long-term U.S. economic growth averages 3.0% per year through 2020. EIA also focuses on four other cases that assume higher and lower economic growth and higher and lower world oil prices than in the reference case.
(Footnote 29 return)
These include those mandated by the National Appliance Energy Conservation Act of 1987 and the Energy Policy Act of 1992, including the refrigerator and fluorescent lamp ballast standards that become effective in July 2001 and April 2005, respectively. These are the only standards that are finalized with effective dates and specific efficiency levels.
(Footnote 30 return)
Pacific Northwest National Laboratory is a Department of Energy multi-program national laboratory operated by Battelle.
(Footnote 31 return)
Operated by Battelle for the U.S. Department of Energy
(Footnote 32 return)
The emphasis on efficiency and renewables in the proposed budget increment and in this testimony is not intended to detract from the importance of government R&D efforts in the other energy sectors. When sectoral shares are computed as percentages of the proposed FY 2003 budget (in constant 1997 dollars) as opposed to shares of the FY 1997-to-FY 2003 increment, they are: efficiency 36.5%, renewables 27.0%, fossil 17.9%, fusion 13.6%, and fission 4.9%. In the PCAST panel's judgment and in mine, all of the government R&D efforts represented by these amounts are essential for a balanced portfolio, taking into consideration the opportunities for—and potential public benefits from—advances in the indicated sectors and the likely pattern of R&D investments by private firms. I discussed the potential and PCAST recommendations in the fossil and nuclear areas in other Congressional testimony last year (2, 3).
(Footnote 33 return)
These figures are derived from Tables 1.1 and 1.5 of the Energy Information Administration's Annual Energy Review for 1999 (5), updated with figures for 2000 from the EIA Monthly Energy Review for January 2001 (6). Year 2000 figures were extrapolated from the January-October 2000 data available in the latter report.
(Footnote 34 return)
The most detailed available analysis of the relative contributions of these factors in the United States and other OECD countries in the post-1970 period is the 1997 International Energy Agency report, Indicators of Energy Use and Efficiency (6). See also the 1997 PCAST report (1).
(Footnote 35 return)
The rate of real GDP growth in the United States from 1970 to 2000 averaged 3.2% per year, while primary energy use grew only 1.2% per year.
(Footnote 36 return)
This report's ''high economic growth'' scenario entails real economic growth at 3.5% per year 2000–2020 and energy intensity declining at 1.8% per year. Its ''low economic growth'' scenario entails real economic growth at 2.5% per year 2000–2020 and energy intensity declining at 1.4% per year.
(Footnote 37 return)
This is consistent with the findings of more recent detailed work at Resources for the Future, which found that the rates of decline in the costs of renewables have generally met or exceeded projections over the past quarter of a century, although their rates of penetration into the energy-supply mix have been lower than expected because of the (largely unexpectedly) low costs of the conventional alternatives in recent years (7).
(Footnote 38 return)
Without license renewals for many of the existing nuclear plants, the decline of nuclear's energy contribution would be even steeper. See (3).
(Footnote 39 return)
In addition to other studies already cited here, notably detailed and compelling analyses of this potential are available in the November 2000 report of the DOE Interlaboratory Working Group on Energy-Efficient and Clean Energy Technologies (8) and, at a global level, the September 2000 report of the United Nations World Energy Assessment (9).