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By Paul Notari

August 2007

Experts agree that world oil production is at near peak today and could well fall off dramatically within the next decade. Yet world oil demand keeps growing as China, India, and many other developing countries dramatically increase their oil consumption. In addition, oil supplies are being curtailed or threatened by political and terrorist activities in many foreign oil-producing countries such as Iran, Iraq, Saudi Arabia, and Venezuela. Put together, these events threaten to produce a major increase in petroleum costs with serious economic repercussions throughout the U.S.

This country today consumes about 21 million barrels of crude oil per day, about 14 of which are used for transportation. The remaining 7 million are used for heating and the manufacture of chemicals and plastics. The distressing fact is that more than 13.4 million barrels per day are imported. The only way to solve the problem is to address both the supply side and the consumption side of our oil dilemma without any biases or prejudices.

Increasing Supply
On the supply side there are several avenues that could relieve the situation. The first avenue, of course is to increase our domestic oil supply more than enough to offset the ever declining oil production in the lower United States. All things considered any substantial increase in our domestic supply will depend upon how successful we are in finding new oil deposits offshore and/or in previously unexplored land areas, and on how soon we can develop a practical means of producing substitute fuels.

Synthetic fuel from coal and oil shale are possible answers but their high cost and environmental problems must first be overcome. Biofuels is another answer but it has its shortcomings as well, especially if the fuel is being produced from corn. Since nearly as much liquid fuel is consumed in the production and transportation of corn ethanol than is produced, only the NET (fuel out minus fuel in) can be considered when determining its true displacement of gasoline. A more promising biofuel is cellulosic ethanol; that is, ethanol produced from cellulosic matter such as municipal waste, farm waste, switchgrass and the like. Other processes utilizing biomass lipids, animal fats, and algae as ethanol feedstock also show great promise. The problem is that a practical means of producing ethanol on a commercial scale by any of these methods is still unproven and may be as many as 3 to 4 years away. Further in calculating gasoline displacement, consideration must be given to the fact that ethanol has only about 70% of the energy value of gasoline. Thus it takes 1.4 gallons of ethanol to displace 1 gallon of gasoline.

Reducing Consumption
The bottom line is this: if we are to make a significant impact on oil imports, even with a dramatic rise in substitute fuel production, we would have to reduce our petroleum use substantially. It is true that our commercial airlines, trains, buses, freight trucks, and farm machinery consume large quantities of jet fuel and diesel fuel. Furthermore the amount of oil necessary to heat buildings and produce petroleum-based products such as plastics, fertilizers, and chemicals is enormous. However, in deference to rising crude oil prices over the last several years, most private companies and homeowners are already beginning to take steps to reduce their consumption on their own.

This leaves private auto transportation fuels as the principal target for further reducing consumption. All things considered, the only realistic way to curtail consumption is to increase the average mpg of our 235+ million cars and light-truck fleet over the next fifteen years from the current average of 21 mpg to 36 mpg. The ideal goal would be to phase in new high-efficiency vehicles to replace all low-efficiency vehicles as they are removed from service over the period.

Path To Foreign Oil Independence
If we are to relieve our oil independence in the near future (say 15 years) we must act NOW. To reach total independence in this time frame we as a nation will have to meet the following objectives:

Objective No. 1… Reduce our transportation oil consumption by almost 44% or some 6 million barrels/day.

Action… The federal government should gradually increase CAFÉ standards over the next 15 years to an average of no less than 36mg for ALL passenger vehicles including SUVs, minivans, and light trucks. Special rebates should be given to car buyers to purchase hybrid cars and, better yet, plug-in hybrid cars once they become commercially available. The rebates should also apply to electric vehicles (EVs) and even to diesel autos that meet certain fuel efficiency standards. In addition, the government should launch a massive Apollo-scale public relations campaign, along with an innovative financial incentive program, to convince car owners that it is in not only in their own best interest, but in the national interest as well, to change their automobile preferences from SUVs, minivans, and light trucks to smaller, more efficient vehicles.

Objective No. 2… Increase our domestic oil production some 21%; that is, from the current level of 7.5 million barrels/day to about 9 million barrels/day.

Action… The federal government should expand its financial support of R & D for the development of economical and environmentally sound methods of producing synthetic oil via coal liquefaction and/or extraction from oil shale. It could also open up some public lands for drilling, but only with tight restrictions ensuring as little intrusion as possible into the surrounding landscape.

Objective No. 3… Produce more biofuels, hopefully as much as a net 4.3 million barrels/day, which will displace approximately 3 million barrels/day of petroleum.

Action… The federal government should increase its support of research and development, as well as offer substantial tax incentives, for the production of ethanol from cellulosic matter, algae and other non-food feedstocks. Also, it should continue to offer strong incentives for the production of biodiesel from waste oils and non-food feedstocks. On the other hand, it should reduce the incentives for the production of ethanol and biodiesel from corn and soybeans.

Objective No. 4… Reduce the amount of jet fuel, diesel and all other oil derivatives used for air and rail transportation, for busing, for trucking, for heating and, to a large extent, for the manufacturer of chemicals, plastics and other products. We need to reduce this consumption by some 23%, or about 2 million barrels/day.

Action… The federal government should offer tax incentives to airlines, railroads, and trucking companies encouraging them to increase the fuel efficiency of their transportation systems. Admittedly, the market is already pushing many of these private companies in this direction but added incentives may hasten their adoption. In addition, homeowners and builders should be given tax rebates for purchases and installation of fuel-efficient oil furnaces. Incentives should also be offered to manufactures to cease using petroleum as a feedstock wherever possible in chemical and plastic manufacture.

Objective No. 5… Economize on our travel in every other way we can (car-pools, fewer road trips, shorter commutes, greater use of public transportation) with the aim of further reducing oil consumption by about 1 million barrels/day.

Action… The federal government should aid local governments in footing the cost for more mass transportation systems in large metropolitan areas. State and local governments should pass new zoning laws and create incentives for better urban planning of all new real estate developments to ensure less travel between home, stores and places of employment.

This adds up to the magic number of 21 million barrels/day, which is the total level of oil consumption in the United States today. Meeting these targets will make us oil independent.

These may appear to be near impossible goals, and maybe they are. But we must strive to achieve them as best we can. If we fall short we will still be far ahead of our current business as usual scenario and will reduce our oil imports appreciably. If we do nothing, we will be doomed.

A Domestic Job Bonanza
By pursuing the actions cited here, the U.S. will reap more than a million new domestic jobs in biofuels and synthetic oil production, new oil field development, and auto manufacturing…a great means of bringing needed jobs back from overseas.

The forgoing article is a synopsis of a more comprehensive report published earlier. For the full report go to the website: http://paulnotari.wordpress.com. To contact the author send e-mail to paulnotari@cs,com

Paul Notari is past Chair of the American Solar Energy Society and its Renewable Fuels and Transportation Division. In 1980, as head of the Technical Information Branch at the Solar Energy Research Institute (now the National Renewable Energy Laboratory), he was the organizer and publisher of Fuel From Farms, one of the first textbooks on ethanol production technology. The publication was widely distributed throughout the nation and is recognized as one of the primary movers in the launching of today’s ethanol industry.