Engineering Inc. - March/April 2007 - (Page 8)

M A R K E T WATCH Road to Energy Independence Runs Through Engineering By Joe Salimando V iews on America’s energy future vary, depending on whom you ask. Amory Lovins, CEO of the Rocky Mountain Institute and an expert in efficient energy principles, believes we can make smarter use of energy. Vinod Khosla, the well-known venture capitalist and co-founder of Sun MicroSystems, believes we can end crude oil imports by turning switchgrass into ethanol. And Vice President Dick Cheney says we need to build many more power plants, including nuclear. How’s that for a wide range of business, economic and political viewpoints? And still other proponents are out there, with additional ideas on how the United States can get to an energy-independent future, including the “hydrogen future” that President Bush has advocated. Despite the range in opinions, all the proposed solutions to America’s energy problems will require a heavy dose of engineering expertise. Can We Free Ourselves? One might not necessarily believe the U.S. can achieve an import-free energy status—in 2025, or 2050 or even by 2100. However, there are several truths that must be factored into the equation. Cheap, easily accessed supplies of crude oil are being drained. We might not hit “peak oil” by 2010 or even later. But oil will be much more expensive in the future, even if the political/religious 8 ENGINEERING INC. strife in the Middle East somehow magically dissipates. Competition for crude oil will increase with “new” heavy importers. China’s middle class is growing, and this burgeoning population will need their own automobiles. Today, there are 862 vehicles for every 1,000 people in the U.S. The most recent available data for China was 15 cars per 1,000 people. But China currently is undergoing an industrial boom as road building and automobile manufacturing are being conducted at accelerated rates. Potential substitutes for imported crude oil include ethanol, biodiesel, coal-toliquids and a host of other “flowing” alternatives—not to mention the electric car (and hybrids), solar power, wind power and much, much more. What is clear is that the increasing U.S. population and energy demand, combined with dramatic increases in Asian demand, will further erode global reserves. The highly regarded energy consultancy Cambridge Energy Research Associates (CERA) ran into this reality in the process of issuing an anti-peak-oil report in late 2006. Projections show that around 2035, production of “conventional oil,” or oil extracted from traditional oil wells, will peak and then begin to decline (see Figure 1). Figure 1 Undulating Plateau versus Peak Oil Bad News With the Good Last fall, when the U.S. Department of Energy issued its Annual Energy Outlook 2007, it offered specifics on nuclear power’s growth from 2005 to 2030. The projection assumed: ■ 3 gigawatts (gW) of additional nuclear power plant capacity upgrades; ■ 9 gW of new capacity (“built primarily in response to EPAct 2005 tax credits”); and ■ 3.5 gW (“added in later years in response to higher fossil fuel prices”). The DOE report says that nuclear power output will grow from 780 billion kilowatt hours (kWh) in 2005 to 896 billion kWh in 2030. But while opportunities seem to abound, the DOE report says nuclear energy’s share of total U.S. electricity generated will actually fall, from 19 percent two years ago to 15 percent in 2030. The good news is there could be 15.5 gW of new nuclear plant capacity and upgrades that might make it onto drawing boards. Even with those additions, however, the U.S. seems destined to fall further behind its own potential in nuclear generation. More Than Power Plants Electricity is vital to the daily operations of a growing nation. But will we have enough power to accommodate growth? Maybe not, says the North American Electric Reliability Council (now officially designated as the “Electric Reliability Organization” of the U.S.). In its October 2006 report, NERC noted that “electric utilities forecast demand to increase over the next 10 years by 19 percent (141,000 mW) in the United States … but project committed resources to increase by only 6 percent (57,000 mW).” MARCH / APRIL 2007

Table of Contents for the Digital Edition of Engineering Inc. - March/April 2007

From ACEC to You
News & Notes
Legislative Action
Market Watch
Cover Story: Alternative Energy
The Greening of Wal-Mart
Re-Energizing the Industry
The BIM Boom
Help Wanted: Leaders for Tomorrow
The Path of Perseverance
ACEC/PAC Achieves Record Fundraising Year
ACEC Annual Convention
Helping Firms Manage Healthcare Costs
Facilities Management for A/E Firms
Business Insights
Members In The News
One on One

Engineering Inc. - March/April 2007