Thursday, July 19, 2007

NPC Report: Facing The Hard Truths About Energy

Jul 18: A major new report by the National Petroleum Council (NPC) says that, “Accumulating risks to the supply of reliable, affordable energy” require an integrated national strategy. The 422-page report entitled, Facing the Hard Truths about Energy: A Comprehensive View to 2030 of Global Oil and Natural Gas, delivered to Energy Secretary Samuel Bodman indicates that, “Over the next 25 years, the United States and the world face hard truths about the global energy future,” that will require “all economic, environmentally responsible energy sources to assure adequate, reliable supply.”

Unique in its scope, the 18-month study of global energy to 2030 involved more than 350 experts from diverse backgrounds and organizations -- the majority of them from outside the oil and gas industry. Bodman said the report “is different from other studies. It usefully identifies strategies for consideration by policy and decision makers at all levels of government and industry." The report says, “The world is not running out of energy resources, but many complex challenges could keep the world’s diverse energy resources from becoming the sufficient, reliable, and economic energy supplies upon which people depend. These challenges are compounded by emerging uncertainties: geopolitical influences on energy development, trade, and security; and increasing constraints on carbon dioxide emissions that could impose changes in future energy use. While risks have always typified the
energy business, they are now accumulating and converging in new ways.”

The report identifies five core strategies for meeting future energy challenges: (1) Moderate the growing demand for energy by increasing efficiency of transportation, residential, commercial, and industrial uses. (2) Expand and diversify production from clean coal, nuclear, biomass, other renewables, and unconventional oil and natural gas; moderate the decline of conventional domestic oil and gas production; and increase access for development of new resources. (3) Integrate energy policy into trade, economic, environmental, security, and foreign policies; strengthen global energy trade and investment; and broaden dialogue with both producing and consuming nations to improve global energy security. (4) Enhance science and engineering capabilities and create long-term opportunities for research and development in all phases of the energy supply and demand system. (5) Develop the legal and regulatory framework to enable carbon capture and sequestration (CCS). In addition, as policymakers consider options to reduce CO2 emissions, provide an effective, global framework for carbon management, including establishment of a transparent, predictable, economy-wide cost for CO2 emissions.

One of the important, so-called "hard truths" about the global energy future over the next 25 years relates to the concept of "energy independence. The report says, "'Energy Independence' should not be confused with strengthening energy security. The concept of energy independence is not realistic in the foreseeable future, whereas U.S. energy security can be enhanced by moderating demand, expanding and diversifying domestic energy supplies, and strengthening global energy trade and investment. There can be no U.S. energy security without global energy security." Among five other "hard truths" identified are that "coal, oil, and natural gas will remain indispensable to meeting total projected energy demand growth;" and "Policies aimed at curbing CO2 emissions will alter the energy mix, increase energy-related costs, and require reductions in demand growth."

Senate Energy & Natural Resources Committee Chairman Jeff Bingaman (D-NM) commented on the report and said, "“This report underscores the urgency for America to move faster and go farther to secure its energy future. I agree with its conclusion that greater energy efficiency is required throughout all sectors of our economy. I also am pleased that the study recognizes the need to boost science and engineering and create long-term opportunities for R&D in all phases of the global energy system. The Senate faced and addressed those ‘hard truths’ in the energy bill (HR.6) [
See WIMS 6/22/07] it passed last month, and in the America COMPETES Act (S.761) that currently is being conferenced. Building a cleaner and more energy self-reliant future is a grand challenge for our country and I hope this study energizes us to keep making progress toward that important goal.”

The NPC is a Federal advisory committee to the Secretary of Energy. The sole purpose of the Council is to advise, inform, and make recommendations to the Secretary on matters relating to oil and natural gas or to the oil and natural gas industries. The Council membership of approximately 175 persons is selected and appointed by the Secretary of Energy. Individual members serve without compensation as representatives of their industry or associated interests as a whole, not as representatives of their particular companies or affiliations. In selecting the membership, special attention is given by the Secretary to assure a well-balanced representation from all segments of the oil and gas industries, all sections of the country, and from large and small companies. The Council also has members with interests outside of oil or gas operations, including representatives from academic, financial, research, Native American, and public interest organizations and institutions.

Access a release from NPC (
click here). Access report materials as distributed at July 18 Council meeting (click here). Access an Executive Summary (click here). Access the complete report (click here). Access a webcast archive of meeting and press conference (click here). Access the NPC website for additional information (click here). Access the complete remarks of Secretary Bodman (click here). Access a release from Senator Bingaman (click here). [*Energy]