Government Funding to Help Curb Our Energy Crisis

Energy Crisis Insider: Can Government Work? It has in the past. It can do so again.

Editor’s Note: Here’s the latest installment from EcoWorld Editors-at-Large John Hulls and John Joss’s “National Energy Plan.” The writers envision the federal government funding a hydrogen “backbone” pipeline, fueled by energy from windmills, photovoltaic arrays and other renewable sources. This installment describes the U.S. federal government’s successful efforts in the 1940s and 1950s to build oil and natural gas pipelines, setting a precedent for action today.

An amazing aspect of recent political history is how Newt Gingrich and his ilk, up to the present day, convinced themselves and the American public that Government can do nothing successfully. This ‘Newtering’ of American political thought has huge implications for the nation’s energy policy and overlooks that, repeatedly, the Federal Government has taken a leadership role in energy development. It needs to do so again, to create the Hydrogen Backbone of the New National Energy Plan that will benefit all citizens and enterprises for the next 50-100 years (and also provide huge and legitimate benefit to the energy industry). Some aspects of the national interest, such as utility services, transcend private profit motives.

Are there two sides to this story? Can the ‘bumbling’ Federal government take a leadership stance? Should we always rely on ‘swift, efficient, private industry’ to work not only for reasonable profit but also for the national interest? Consider history, and the creation of America’s natural gas industry.

Take a trip back in time . . .

It is 11 December 1941, four days after Pearl Harbor. Hitler has directed Admiral Doenitz and his U-boats to attack the tankers carrying virtually all the oil from loading docks in the Gulf of Mexico to consumers in the Northeast. Attacks on tankers carrying oil across the North Atlantic for the Royal Navy and aviation gasoline for the beleaguered Royal Air Force have reduced fuel reserves in England to a few days. The outcome of the war itself is in the balance. Backlit by Miami’s lights, where hotel owners have refused to douse the lights during tourist season, the easily recognizable tanker profiles stand out like arcade targets for the waiting U-boats. On the Atlantic City beaches, people watch for the explosions and massive glare of blazing tankers. The U-boats are sinking tankers at four times the rate at which they can be replaced. Brave men are dying. Disastrous shortages on all war fronts seem inevitable.

President Roosevelt calls on Interior Secretary Harold Ickes, a man hated by the oil industry for his anti-monopoly stance, to solve the problem. Blackouts are imposed and coastal convoys formed. But the brilliant stroke is the wholesale change of the industry’s means of transportation. Authorizing use of crucial steel supplies for a project the petroleum industry says is doomed to fail, the government builds two pipelines—”Big Inch” and “Little Inch”—to carry oil from Texas to the East Coast, in one of the great, unsung engineering feats of WWII. In less than one and a half years, “Big Inch” is carrying more than half the East Coast’s oil 1,250 miles from the Texas oil fields; soon “Little Inch” is carrying gasoline and refined products to New England. Ickes is promoted to Petroleum Administrator for War, the “Oil Czar”. By the war’s end, over 42% of American oil moves through government-owned and -financed pipelines.

Inching Forward. More Government energy action-and success

The government is not finished with “Big Inch” and “Little Inch” to rationalize the energy industry. As the war ends, the House Armed Services Committee decides that the risk of depending on foreign oil is unacceptably high, presaging OPEC-created crises, Saddam Hussein and Desert Storm by half a century. They see the solution in the thousands of plumes burning across Texas night skies, as annoying and ‘worthless’ natural gas, a ‘waste’ by-product of oil production, is flared off. They tell the industry to collect and sell the natural gas to reduce dependence on foreign energy. Led by Defense Secretary James Forrestal, the government sells “Big Inch” and “Little Inch” to the Texas Eastern Transmission Company on the condition that they carry natural gas to East Coast markets. They also allocate scarce steel to build “Biggest Inch,” the El Paso Natural Gas Pipeline from Texas and New Mexico to Los Angeles (the very same pipeline so controversial in the energy crisis of 2001).

The birth of the natural gas industry

Did it matter? Was an industry created? Commercial natural gas, long considered an orphan waste product, went from virtually zero until by 1950—just three years after the program started—the market for natural gas was 2.5 trillion cubic feet per year, saving nearly a million barrels of imported crude oil per day. And enriching private industry in the process.

History shows that Government led the energy industry effectively. Winston Churchill, in his “History of the English Speaking Peoples,” credits much of America’s success on the Federal Governments willingness to invest in infrastructure to create new industries and markets. That is what the Government must do now. Just as it created the pipeline industry and the natural gas industry, it must lead the way to a sustainable energy infrastructure for the Millennium.

By taking the lead in promoting the Hydrogen Backbone, ( articles of February 8, 15 and 22, 2001, and EcoWorld: National Energy Plan) the Government will create a whole new aspect of the energy industry, as they did with the “Inch” pipelines and natural gas. Much of the technology exists, delivering surprising economic advantages which we will discuss in the next installment. Implementation is merely a matter of leadership and management.

‘Dirty Harry’ wins a small battle but loses (along with us) the war

Meanwhile, on the energy insider front, Clint Eastwood went to Sacramento recently to get the government to “make his day” on a fair shake for photovoltaics, such as those he installed at his Monterey Peninsula golf course. They did so, but vigilant utility lobbyists got the legislators to make sure the fair treatment lasts only until 2002. If the State had let the rules stand, so that PV could be financed over a 10-year period, we might have ended the energy crisis without the IOU’s (Investor Owned Utilities) or the State spending a cent. But then the utilities wouldn’t get to profit. Clint, go on back and explain to them in words they can understand.

Does PV really haul the freight? For a fascinating article on how PV power is competitive under the existing rate structure with a combination of net metering and time-of-day purchase, see the current (June/July) issue of Homepower entitled “Practical Solar” by Phillipe Habib. It is a well documented, fascinating story that gives details of rates, metering and structuring a system to make PV pay, along with a between-the-lines look at the perfidy of certain utilities . . .

‘Deep Volt’ strikes again, to the heart of the matter

Back to Deep Volt and the computer-controlled grid. The New York Power Authority is installing a FACTS-type technology to enable the State Independent System Operator to balance two major power lines feeding from Quebec Hydro to New York-one through Albany and one through the Catskills-moving hundreds more megawatts through a system at near capacity with the obsolete control technology. Even San Diego Gas and Electric is purchasing four units (from Mitsubishi, in Japan) to bring hundreds of extra megawatts into Southern California. Both these systems are still a far cry from the promise of FACTS/computer-controlled national grid , but they’re a step in the right direction. But the technology players are all foreign-Siemens, ABB and Mitsubishi-despite the technology signposts erected by EPRI in Palo Alto, California and by thyristor technology owned by General Electric. Do we really want to let others lead the way on this technology?

For more history of the oil and gas industry, read Daniel Yurgin’s excellent, Pulitzer Prize- winning book, The Prize, the Epic Quest for Oil, Money and Power. For more information on the computer control of the grid, including information on the New York project, see MIT’s Technology Review magazine July/Aug issue, “A Smarter Power Grid,” which shows how deregulation will bring ever larger numbers of independent power generators, who will not collaborate effectively, to create even more instability on an already overloaded grid.

EcoWorld - Nature and Technology in Harmony

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