The USA possesses the world’s largest reserves of “unconventional” oil — coal, and oil shale — estimated to be the equivalent of 1 trillion barrels of oil or more. One trillion barrels of synthetic fuels produced from American coal and oil shale could supply the U.S. with an additional 15 million barrels of oil per day for the next 180 years. Future technology could double or triple that amount. Why, then, is the USA exporting its wealth to foreign countries instead of using the money to develop synthetic fuels from American coal and shale? Why are U.S. citizens allowing it?
Synthetic fuels would be produced in America today if the U.S. synthetic fuels industry had been supported and developed back in the 1980s. Why was that effort discontinued?
In 1984 President Ronald Reagan cut-off government funding for the new U.S. synthetic fuels industry because he believed U.S. synthetic fuels would be too expensive, relative to falling oil prices in response to the 1980s worldwide oil glut. Reagan’s National Energy Policy was crafted by his economic advisors who believed world oil prices would continue to remain low.
Reagan’s energy policy worked, and oil prices remained low for many years (primarily because the Reagan Administration allowed U.S. oil companies to continue importing foreign oil into the U.S. without limits or restraint, increasing foreign oil dependence from less than 30% in 1984 to over 60% today) but now the inevitable has happened. The USA is caught once again, unprepared to fuel its own economy.
Ronald Reagan’s energy policy lacked long-term vision — his actions ended all hope for a viable U.S. synthetic fuels industry and eliminated U.S. competition for Middle-East oil.
Two years later, in 1986, President Reagan signed into law the Consolidated Omnibus Budget Reconciliation Act of 1985 which abolished the Synthetic Liquid Fuels Program. It was estimated that less than $8 billion was actually spent on the program. Today, the U.S. is spending more than $8 billion every month in Iraq. [The nonpartisan Congressional Budget Office (CBO) has estimated the cost of the Iraq war is about $9 billion per month.]
Ronald Reagan left office in 1989, so why should he get all the blame? What about George H. W. Bush and William Jefferson Clinton? They held office after Reagan, so they could have reversed his policy; why didn’t they?
President George W. Bush did attempt to reverse Reagan’s policy. In 2005 Bush asked Congress to fund a synthetic fuels plant for the U.S. Air Force that would have insured a secure domestic supply of jet fuel for military aircraft — why did Congress fail to support the president’s request?
The Defense Advanced Research Projects Agency (DARPA), an agency of the United States Department of Defense (DoD), has estimated that the cost of a 100,000-barrel-per-day 21st-century Coal-to-Liquids (CTL) synthetic fuels plant will be about 6 billion dollars.
For the price of the Wall Street bailout — $700 billion — the DoD could build more than 100 new CTL plants, which would produce over ten million barrels of CTL synthetic fuel per day — Creating millions of U.S. jobs, directly and indirectly; and stopping the export of $400 billion per year to foreign governments in payment for their oil. The money would remain in this country, invested in US communities and families.
Today, the U.S. Air Force is making every effort to develop synthetic fuels, but the efforts have been blocked by the U.S. Congress because of environmental concerns.
“We don’t want new sources of energy that are going to make the greenhouse gas problem even worse,” said House Oversight Committee Chairman Henry Waxman, D-Calif. In a letter to Defense Secretary Robert Gates, Waxman wrote that a promise to control greenhouse gas emissions from synthetic fuels was not enough. Waxman cited Section 526 of the 2007 energy bill that prohibits federal agencies, including the U.S. Military, from purchasing synthetic fuels unless the fuels emit the same or fewer greenhouse gases as petroleum.
Prohibits a federal agency from entering into a contract for procurement of an alternative or synthetic fuel, including a fuel produced from nonconventional petroleum sources, for any mobility-related use (other than for research or testing), unless the contract specifies that the lifecycle greenhouse gas emissions associated with the production and combustion of the fuel supplied under the contract must, on an ongoing basis, be less than or equal to such emissions from the equivalent conventional fuel produced from conventional petroleum sources.Section 526 of the Energy Independence and Security Act of 2007, signed into law by President Bush on December 19, 2007.
Section 526 was inserted into the 2007 energy bill by U.S. Congressman Henry Waxman (Who was then Chairman of the House Committee on Oversight and Government Reform1) for the purpose of blocking military sponsorship of synthetic fuels made from USA coal and other domestic hydrocarbons: “including a fuel produced from nonconventional petroleum sources,” which refers to oil shale, tar sands, and heavy crude. (Nonconventional hydrocarbon resources in the USA hold more than one trillion barrels of oil equivalent.)
Henry Waxman’s influence, through Section 526 of the Energy Bill, will block U.S. progress toward energy independence similar to Ronald Reagan’s opposition to synthetic fuels. Waxman’s goals may be different than Reagan’s but his actions are equally short-sighted.
Energy independence and climate change are separate issues. Americans need to understand the relative priority. Climate change is a sustainability issue that must be solved as the world progresses toward complete global modernization. In contrast, global oil dependence is an immediate threat, a clear and present danger. Metaphorically speaking, the threat of greenhouse gas emissions is like the threat of cancer from prolonged cigarette smoking; In contrast, the threat of oil financed terrorism is like a coiled rattlesnake immediately on the path in front of a day-dreaming hiker.
Beginning in January 2009, with the 111th Congress, Henry Waxman became the Chairman of the House Energy and Commerce Committee. On June 26, 2009, the House of Representatives passed the Waxman/Markey climate bill (HR 2454) which, if the Senate had passed the bill too, and the President had signed it, would have permanently blocked the development of all USA-heavy hydrocarbons.
In January 2011, with the 112th Congress, Republicans took back control of the House and Waxman was demoted to Ranking Member of the House Committee on Energy and Commerce.
It is a basic lesson of chemistry that the energy needs we meet today with petroleum can be met by other hydrocarbons, including coal, tar sands, and oil shale, for which there are centuries’ worth of supplies, and environmentally sound methods of production available today or within economic reach. Natural petroleum has a cost advantage as a liquid fuel but the cost of making synthetic [fuels] petroleum from coal or tar sands is modest and likely to fall substantially if carried out on a large scale and with appropriate research and development.
The alleged cost advantages of natural petroleum over synthetic [fuels] petroleum have probably already disappeared when we recognize the U.S. is paying a fortune in finances and blood for Middle East oil that is not counted in the price at the pump. The dollar costs of U.S. military operations in the Middle East attributable to policing the energy flows are tens of billions a year, if not $100 billion (£ 57 billion) or more. This amounts to a hidden subsidy to oil use of ten dollars or more per barrel exported from the region.– America’s disastrous energy plan By Jeffrey Sachs, director of the Earth Institute, Columbia University. Published in Financial Times, December 23, 2003.