THE NATIONAL ACADEMIES SUMMIT ON America’s Energy Future

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THE NATIONAL ACADEMIES SUMMIT ON America’s Energy Future SUMMARY OF A MEETING Committee for the National Academies Summit on America’s Energy Future

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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. Support for this project was provided by the Department of Energy under Grant Number DE- FG02-07-ER-15923 and by BP America, Dow Chemical Company Foundation, Fred Kavli and the Kavli Foundation, GE Energy, General Motors Corporation, Intel Corporation, and the W.M. Keck Foundation. Support was also provided by the Presidents’ Circle Communications Initiative of the National Academies and by the National Academy of Sciences through the following endowed funds created to perpetually support the work of the National Research Council: Thomas Lincoln Casey Fund, Arthur L. Day Fund, W.K. Kellogg Foundation Fund, George and Cynthia Mitchell Endowment for Sustainability Science, and Frank Press Fund for Dissemination and Outreach. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the organizations that provided support for the project. Library of Congress Cataloging-in-Publication Data National Academies Summit on America’s Energy Future (2008 : Washington, D.C.) The National Academies Summit on America’s Energy Future : summary of a meeting / Steve Olson and Robert W. Fri, editors. p. cm. “Committee for the National Academies Summit on America’s Energy Future.” Chronicles the discussions of the summit held in Washington, D.C. March 13-14, 2008. Includes bibliographical references. ISBN 978-0-309-12478-2 (pbk.) — ISBN 978-0-309-12479-9 (pdf) 1. Power resources— United States—Congresses. 2. Energy policy—United States—Congresses. I. Olson, Steve, 1956- II. Fri, Robert W. III. Title. TJ163.15.N365 2008 333.790973—dc22 2008044488 Available in limited supply from: Board on Energy and Environmental Systems National Research Council 500 Fifth Street, N.W. Keck W917 Washington, DC 20001 202-334-3344 Additional copies of this report are available from the National Academies Press, 500 Fifth Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313 (in the Washington metropolitan area); Internet, http://www.nap.edu. Copyright 2008 by the National Academy of Sciences. All rights reserved. Printed on recycled stock Printed in the United States of America

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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examina- tion of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. www.national-academies.org

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COMMITTEE FOR THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE ROBERT W. FRI, Visiting Scholar, Resources for the Future, Chair RICHARD A. MESERVE (NAE), President, Carnegie Institution for Science LAWRENCE T. PAPAY (NAE), CEO and Principal, PQR, LLC MAXINE L. SAVITZ (NAE), General Manager, Technology/Partnerships, Honeywell, Inc. (retired) HAROLD T. SHAPIRO (IOM), President Emeritus and Professor of Economics and Public Affairs, Princeton University, and Chair, Committee on America’s Energy Future, Technology Opportunities, Risks, and Tradeoffs America’s Energy Future Summit Staff PETER D. BLAIR, Executive Director, Division on Engineering and Physical Sciences JAMES ZUCCHETTO, Director, Board on Energy and Environmental Systems MARTY A. PERREAULT, Director, Roundtable on Science and Technology for Sustainability GREG EYRING, Senior Program Officer, Division on Engineering and Physical Sciences DOROTHY MILLER, Christine Mirzayan Science and Technology Policy Fellow LaNITA JONES, Program Associate, Board on Energy and Environmental Systems STEVE OLSON, Consultant Writer DEREK VOLLMER, Associate Program Officer, Science and Technology for Sustainability Program America’s Energy Future Project Staff PETER D. BLAIR, Executive Director, Division on Engineering and Physical Sciences JAMES ZUCCHETTO, Director, Board on Energy and Environmental Systems KEVIN CROWLEY, Director, Nuclear and Radiation Studies Board; Staff Officer, America’s Energy Future (AEF) Study Committee JOHN HOLMES, Senior Program Officer, Board on Energy and Environmental System; Staff Officer, AEF Electricity from Renewables Panel 

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EVONNE TANG, Senior Program Officer, Board on Agriculture and Natural Resources; Staff Officer, AEF Alternative Liquid Transportation Fuels Panel MADELINE WOODRUFF, Senior Program Officer, Board on Energy and Environmental Systems; Staff Officer, AEF Energy Efficiency Panel GREG EYRING, Senior Program Officer, Division on Engineering and Physical Sciences, AEF Committee Coal, Oil, and Natural Gas Subgroup SARAH CASE, Associate Program Officer, Board on Energy and Environmental Systems; AEF Committee Transmission & Distribution and Nuclear Subgroups DOROTHY MILLER, Christine Mirzayan Science and Technology Policy Fellow LaNITA JONES, Program Associate, Board on Energy and Environmental Systems, AEF Study Committee JONATHAN YANGER, Senior Program Assistant, Board on Energy and Environmental Systems, AEF Panels National Academies Office of Communications BARBARA KLINE POPE, Executive Director, Communications and the National Academies Press STEPHEN MAUTNER, Executive Editor, National Academies Press ANN MERCHANT, Director, Outreach and Marketing TERRELL SMITH, Senior Communications Officer i

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Foreword A confluence of events is producing a growing sense of urgency about the role of energy in long-term U.S. economic vitality, national security, and climate change. Energy prices have been rising and are extremely volatile. The demand for energy has been increasing, especially in develop- ing countries. Energy supplies, and especially supplies of oil, lack long-term security in the face of political instability and resource limits. Concerns about carbon dioxide emissions from the burning of fossil fuels, which currently sup- ply most of the world’s energy, are growing. Investments in the infrastructure and technologies needed to develop alternate energy sources are inadequate. And societal concerns surround the large-scale deployment of some alternate energy sources such as nuclear power. All of these factors are affected to a great degree by government policies both here and abroad. To stimulate and inform a constructive national debate on these and other energy-related issues, the National Academy of Sciences and the National Acad- emy of Engineering initiated in 2007 a major study, “America’s Energy Future: Technology Opportunities, Risks, and Tradeoffs.” The America’s Energy Future (AEF) project was organized to respond to requests from the U.S. Congress, in particular from Senate Energy and Natural Resources Committee Chair Jeff Bingaman and Ranking Member Pete Domenici as well as House Science and Technology Committee Chair Bart Gordon and Ranking Member Ralph Hall. Phase I of the project is structured to provide authoritative estimates of the current contributions and future potential of existing and new energy supply and demand technologies, their associated impacts, and projected costs. It will also serve as the foundation for a Phase II portfolio of subsequent studies at the ii

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iii FOREWORD Academies and elsewhere focused on more strategic, tactical, and policy issues, such as energy research and development priorities, strategic energy technology development, and policy analysis. Phase I of the AEF project will produce a series of five reports designed to inform key energy policy decisions as a new U.S. President assumes office and a new Congress convenes in 2009. The AEF effort to date has benefited from a large number of recent projects conducted by various organizations that have explored technology options for shaping future energy use. Some of these study results conflict and reflect disagreements about technology potential, particularly for technologies such as biomass energy, energy efficiency, renew- able electric power generating technologies, nuclear power, and advanced coal technologies. A key objective of the AEF series of reports is to resolve conflict- ing analyses of technology options to help facilitate a productive national policy debate about the nation’s energy future. The AEF project is being generously supported by the W.M. Keck Founda- tion, Fred Kavli and the Kavli Foundation, Intel Corporation, Dow Chemical Company Foundation, General Motors Corporation, GE Energy, BP America, the U.S. Department of Energy, and by our own academies. A key milestone in the AEF project was the National Academies Summit on America’s Energy Future, which was convened on March 13-14, 2008, in the National Academy of Sciences Auditorium in Washington, D.C. The summit provided an opportunity for discussion of recent major studies by key principals of those studies as input to the AEF study committee and panel deliberations. This summary report, the preparation of which was overseen by a subgroup of the Committee on America’s Energy Future (see Appendix A), chronicles the rich and varied presentation that occurred at the summit. Information on the speakers at the summit is given in Appendix B, and the agenda for the summit is included as Appendix C. Ralph J. Cicerone, President Charles M. Vest, President National Academy of Sciences National Academy of Engineering Chair, National Research Council Vice Chair, National Research Council

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Preface O n March 12, 2008, the price of a barrel of light crude oil exceeded $110 for the first time in history. The next day, more than 800 peo- ple gathered in the auditorium of the National Academy of Sciences Building and over the Internet for the 2-day National Academies Summit on America’s Energy Future. While the summit was designed to examine a broad range of energy sources and timeframes ranging years and decades into the future, record-high prices of oil were a constant reminder that the future is fast approaching. As Department of Energy (DOE) Secretary Samuel Bodman said in addressing the summit, “The price of oil is so high that it has gotten everybody’s attention.” The summit was conducted as the inaugural event in a major initiative at the National Academies, the America’s Energy Future (AEF) project. A joint effort of several divisions within the National Academies, the AEF project has two phases. Phase I, an examination of the performance, costs, and potential impacts of existing and near-term energy technologies, will provide a base of information for a Phase II consideration of related policy issues such as managing climate change, ensuring energy (and, particularly, oil) security, and developing and deploying advanced technologies that will help meet those chal- lenges. The Phase I effort will culminate in a full study report by the Committee on America’s Energy Future, supported by three separately appointed panels whose work will be detailed in three separate reports (see Appendix A). Conceived and carried out as a collaborative effort between the AEF proj- ect and the National Academies Office of Communications, the summit was held to stimulate discussion and debate in advance of the 2008 U.S. elections. ix

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x PREFACE It brought together many of the most knowledgeable and influential people working on energy issues today (see Appendix B). In addition to Secretary Bodman, government speakers included Senator Jeff Bingaman, DOE Under- secretary Ray Orbach, and Department of State Undersecretary Reuben Jeffery. James Schlesinger, the first secretary of energy, brought a valuable historical perspective to the meeting, while Ged Davis from the World Economic Forum in Geneva and José Goldemberg of Brazil offered international perspectives. Several speakers who have recently led important national and international studies on energy issues—including Robert Marlay (Climate Change Technol- ogy Program), Rodney Nelson (National Petroleum Council), Ernest Moniz (Massachusetts Institute of Technology), Paul Portney (University of Arizona), Michael Ramage (ExxonMobil [retired]), John Holdren (Harvard University), Steven Chu (Lawrence Berkeley National Laboratory), and Amory Lovins (Rocky Mountain Institute)—summarized and elaborated on their previous work. Other representatives of higher education, industry, and the nonprofit sector provided informative and provocative analyses of a very broad range of issues. The result was an incredibly rich gathering of intellectual capital. Full biographies of the speakers, videos of their presentations, and copies of their slides are available at the AEF project website, http://www.nationalacademies. org/energy. The website also contains links to other energy-related activities and to many reports and other documents available from the National Academies. The present report, the first in the AEF Phase I series of five reports, was prepared by Steve Olson in close collaboration with a subset of the Committee on America’s Energy Future. It summarizes what was discussed at the summit but cannot cover all topics that the committee thinks are important. Nor does the report necessarily reflect the views of the committee. The report is orga- nized thematically rather than chronologically, and so points made by some speakers appear in more than one chapter. It also reproduces some of the slides shown at the summit, some of which have been slightly altered for clarity. Even over the course of 2 days, not all of the topics associated with energy could be discussed at the summit. For example, renewable sources of energy were covered briefly but not thoroughly, and international considerations received less attention than did U.S. policies and scenarios—gaps in coverage that are necessarily reflected in this summary. Nevertheless, the speakers at the summit covered a very broad range of topics, from economic development in China to ethanol production in Brazil to the anticipated effects of recent U.S. legislation on greenhouse gas emissions, in talks loosely organized around three major themes: energy security, energy and the economy, and energy and the environment (see Appendix C). In particular, several speakers examined recent actions and the need for future actions in the context of calls for policy reforms from major national organizations. They pointed out that some progress has been made on some issues. Yet the challenges facing the United States, other

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xi PREFACE developed nations, and the developing world remain immense. Meeting the need for energy without irreparably damaging Earth’s environment will require technological and social changes that have few parallels in human history. As this summary makes clear, the energy problem is hard—much harder than projects with straightforward technological objectives like the Manhattan Project or the Apollo Project. As Senator Jeff Bingaman said at the summit, “Energy policy does not have a single goal. It is extremely complex and mul- tifaceted. . . . We run a real risk of heading in the wrong direction in energy policy if we try to oversimplify the issues, if we try to overstate the potential of any single energy initiative, or if we try to understate the difficult nature of the energy problems that we face.” Despite such difficulties, the discussions at the summit were largely opti- mistic. Many advanced technologies outlined at the summit hold great promise. There are immense markets for green technologies around the world. Interna- tional cooperation can help to unify the efforts of national governments. The challenge is to convert concern into action. The energy problem is solvable, but not without tremendous effort and good will on the part of individuals, organizations, and nations. Robert W. Fri, Chair Committee for the National Academies Summit on America’s Energy Future Peter D. Blair, Executive Director Division on Engineering and Physical Sciences, National Research Council

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Acknowledgments T his report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: R. Stephen Berry (NAS), University of Chicago, Jan Beyea, Consulting in the Public Interest, Marilyn A. Brown, Georgia Institute of Technology, Douglas M. Chapin (NAE), MPR Associates, Inc., Ged Davis, International Institute of Applied Systems Analysis, Mildred R. Dresselhaus (NAS/NAE), Massachusetts Institute of Technology, William Fulkerson, University of Tennessee, and Kurt Yeager, Electric Power Research Institute. Although the reviewers listed above have provided many constructive com- ments and suggestions, they were not asked to endorse any statements made by speakers at the summit, nor did they see the final draft of the report before its xiii

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xi ACKNOWLEDGMENTS release. The review of this report was overseen by Elisabeth M. Drake (NAE), Massachusetts Institute of Technology, and Robert A. Frosch (NAE), Harvard University. Appointed by the National Research Council, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the committee and the institution. The National Academies Summit on America’s Energy Future was a major event involving many individuals across the National Academies organization whose contributions are gratefully acknowledged. These individuals include Clinton Alsip, John Bavier, Chris Benson, Katherine Bittner, Sheryl Bottner, Virginia Bryant, Dana Caines, Mark L. Carter, Sumana Chatterjee, Annie Drinkard, Molly Galvin, Penelope Gibbs, Sylvia Gilbert, Sally Groom, John Horan, Julie Ische, Jim Jensen, Maria Jones, William Kearney, Patrice Legro, Dorothy Lewis, Matthew Litts, Alphonse MacDonald, Rachel Marcus, Scott Maslin, Francesca Moghari, Shellie Myers, Neo Pardo, Patsy Powell, Dustin Pusch, Moises Ramirez, Cortney Riese, Barbara Schlein, Olive Schwarzschild, Sharon Segal, Brett Simmons, Priya Sreedharan, Ariel Suarez, Mario Velasquez, Chris Watson, Sue Wyatt, and Johann Yurgen.

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Contents PART I THE CURRENT CONTExT 1 A GROWING SENSE OF URGENCY 3 Increasing Demand and Constrained Supplies, 4 Continued U.S. Reliance on Foreign Sources of Oil, 7 Growing International Consequences, 8 A Necessary Urgency?, 10 2 THE CHALLENGE OF GLOBAL WARMING 11 Scenarios of Future Climate Change, 12 Steps to Be Taken, 15 The Relevant Time Scales, 18 3 THE DEVELOPING WORLD—THE CASE OF CHINA 20 China’s Energy Use in a Global Context, 21 China’s Contribution to Climate Change, 22 Policy Initiatives in China, 24 U.S.-China Cooperation, 26 x

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xi CONTENTS PART II ENERGY SUPPLIES 4 PETROLEUM AND NATURAL GAS 31 The Hard Truths About Oil and Gas, 32 Confronting the Hard Truths, 38 5 COAL 39 Taking Carbon Capture and Sequestration to Scale, 40 Moving Forward with Demonstration Projects, 42 6 NUCLEAR POWER 44 The Economics of Nuclear Power, 44 Reprocessing, 45 The Disposal of Spent Fuel, 46 Fusion Energy, 48 7 BIOFUELS 49 Ethanol Production in the United States and Brazil, 49 Second-Generation Technologies, 55 Land Use, 56 8 OTHER RENEWABLE SOURCES OF ENERGY 59 Solar Power and Wind Power, 59 Enhanced Geothermal Energy, 60 Advanced Energy R&D, 62 PART III ENERGY USES 9 TRANSPORTATION 65 Prospects for Improvement, 65 Vehicle Technologies, 66 Initiatives Under Way, 71 Hydrogen as an Energy Source, 72 10 BUILDINGS AND INDUSTRY 77 Conservation in California, 78 Saving Money by Saving Energy, 79 Transferring Technologies to the Developing World, 80

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xii CONTENTS PART IV MEETING THE CHALLENGE 11 PATHWAYS TO A SUSTAINABLE FUTURE 85 Electricity Technology in a Carbon-Constrained Future, 88 Reducing U.S. Greenhouse Gas Emissions, 93 12 THE PUBLIC SECTOR RESPONSE 103 Actions Taken by the Bush Administration, 106 Actions Taken by Congress, 117 Cap and Trade Versus a Carbon Tax, 124 13 THE ROLE OF THE PRIVATE SECTOR— 128 THE CASE OF GOOGLE Renewable Energy, 129 Hybrid Electric Vehicles, 131 14 BARRIERS AND POTENTIAL 133 Reasons for Optimism, 136 Contributions from Scientists and Engineers, 137 Communicating with the Public, 138 REFERENCES 139 APPENDIxES A America’s Energy Future Project 143 B Speakers at the Summit 148 C Summit Agenda 157 D Units of Measure and Equivalences 161

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