The United States has weathered high energy prices amid changing world conditions in the past. But a new factor has entered the equation that creates a very different energy reality today, Clay Sell, Deputy Secretary and Chief Operating Officer at the U.S. Department of Energy, said in his speech, “A New Energy Reality,” during MITEI’s Energy Futures Week in January.
“There’s a third factor we’ve never seen before,” Sell told a packed audience at Bartos Theatre. “That is the challenge of global climate change and the prospect that we’re going to have to meet increasing demand [for energy] in a carbon-constrained environment henceforward.”
Sell said the role of government policy and regulation will be increasingly influential in the energy field over the coming decades, and that presents yet another challenge. He quoted Einstein’s comment, “Politics is more difficult than physics.”
“Certainly in the energy business, where often inventing the technology and engineering the solution is the easiest thing to figure out, trying to crack, negotiate, and anticipate what is . possible in the political space often proves to be our biggest challenge,” he said. The Department of Energy, the largest funding institution in the physical sciences, has long ties to MIT.
Sell said many different factors influence the energy business today, including global trends, foreign affairs, trade concerns, and environmental concerns.
“Each nation’s sense of energy security shapes its sense of national security, which affects its national behavior,” he said. A hard reality nations must face is that demand for energy could end up outstripping supply. Over the last 25 years global demand for energy increased by about 60 percent, and it is likely to increase another 60 percent over the next 25 years, but over a much larger base of users.
Sell noted that China, a nation of 1.2 billion people, has 30 vehicles on the road for every 1,000 citizens compared to 800 vehicles per 1,000 for the United States, with a population of 300 million. “Many [people] estimate that over the next 25 years, China will go from 31 million vehicles on the road to 200 million,” Sell said. Add to that hundreds of millions of the new $2,500 “Nano” cars from Tata Motors in India expected to hit the roads in the coming decades.
In addition, there are 1.6 billion people in the world who don’t have access to the modern conveniences afforded by electricity. “From a moral standpoint we want countries to grow and develop and get access to electricity, but a consequence of that is the projection that global demand for electricity will double in the next 25 years. So energy demand outstripping supply is a reality,” he said.
The world’s energy infrastructure also is larger and more dispersed than in the past, with linkages between continents. “As a result the energy infrastructure is more vulnerable than it’s ever been to terrorism,” Sell said. “And as we’ve seen energy prices rise over the past four to five years, we’ve seen an increasing trend toward resource nationalism in countries with the greatest and richest resources.” He said some countries are limiting access by oil and gas companies that have money and technology to invest.
Sell also emphasized an influential report from the National Petroleum Council, “Facing the Hard Truths about Energy: A Comprehensive View to 2030 of Global Oil and Natural Gas,” released in July 2007. The report involved 350 energy experts from 19 countries in all energy sectors. In the past, the Council typically released reports citing regulatory barriers that, if removed, would allow the oil and gas industries to meet all energy needs. But the 2007 report marked an about face: it embraced biofuels, efficiency, and a global carbon management scheme.
The Council report embraced six “hard truths”:
Sell said many other recent reports support the same conclusions. “The political commitment to do something new and different needs to be restored,” he said of the U.S. government. “We’ll get our security from a variety of energy supplies.”
Sell said institutions like MIT can make a big difference in producing reports and technology to help change the discussion in Washington. He quoted MIT President Susan Hockfield’s comment that “MIT will be a catalyst for transforming the energy landscape.”
Said Sell, “That means you’re going to have to help us all transform the political landscape.” MIT already has a good start with three studies he said helped to quickly change the political dynamic. One report in 2003 reviewed nuclear policy in a way that Sell said is “a hopeful example of how good work can begin to change the debate. Democrats and Republicans on both sides of the aisle are now recognizing that nuclear power has to be part of this nation’s future and many nations’ futures around the world.” A 2007 MIT report on coal helped the DOE improve its policies on carbon capture and sequestration. And a 2007 report on geothermal energy prompted the DOE to restart a program it had killed just two years ago because it thought the prospects for new technology were limited.