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Dinner SPeecH

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Energy Policy and the Role of Technology in National Security1 a.D. romig, Jr. WitH arnolD B. BaKer Sandia National Laboratories Albuquerque, New Mexico Global security is a dynamic, complex system of systems. From one perspec- tive, it is a global/national political-economic-technology system. From another, it is a defense, intelligence, and security system. From yet another perspective, it is an energy (coal, oil, natural gas, and renewables) and environmental system that interacts with our economies, demographics, technology, and national and geopolitical systems. Consequently, U.S. energy security requires thoughtful analysis and global engagement in all of these interrelated dimensions, rather than just the “energy” or “energy-environmental” dimensions. As a practical matter, globalization, growing international interdependencies, and geopolitics set the context for meaningful discussions about energy security. 1 Sandia National Laboratories is a multiprogram organization operated by Sandia Corporation, a Lockheed Martin Company, for the U.S. Department of Energy National Nuclear Security Administra- tion, under contract DE-AC04-94AL85000. 2 Dr. Romig is executive vice president, deputy laboratories director for Integrated Technologies and Systems, and interim chief operating officer, Sandia National Laboratories. Dr. Baker is chief economist, Sandia National Laboratories. This is an extended abstract of the keynote address by Dr. Romig to the National Academy of Engineering U.S. Frontiers of Engineering Symposium, University of New Mexico, September 18, 2008. 14

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10 FRONTIERS OF ENGINEERING For example, the economic balance of power in today’s global economy appears to be shifting from current “developed” economies (members of the Organisation for Economic Co-operation and Development, or OECD) to “devel- oping” economies, such as China and India. OECD members currently account for more than half the world’s GDP (on the basis of purchasing power parity, or PPP), up from only 30 percent in 1700. When current economic trends are extended to 2050, OECD members’ share of world GDP could very well decline to approximately 30 percent, while current non-OECD members would account for 70 percent, as they did in 1700. At the same time, the U.S. share of world GDP in 2050 could decline from the current 20 percent (PPP basis) to 10 percent, while China’s share could grow to 30 percent, up from about 10 percent today. This economic power shift is being driven by growing global economic integration and interdependency, despite continuing protectionist threats. In the future, nations will be both more competitive and more cooperative. In a more competitive world, the scope of national policies with major economic impact may become increasingly limited, while the need for clear domestic consumer- producer energy price signals and consistent energy-security, environmental, and economic objectives and policies will become more important. Driven in part by the Internet and economic integration, the world has become increasingly complex geopolitically (Figure 1). While the U.S. remains Geopolitics Have Become More Complex Close Democratic Elections U.S. Needs Coalitions Make Tough Decisions Difficult China DPRK Russia Pakistan Iran Iraq Governments Getting More Into the Marketplace Middle East Critical to U.S. Security FIGURE 1 Map showing the increasing complexity of geopolitics. Source: Sandia Na- tional Laboratories. Romig Figure 1 R01394 portrait above landscape below

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11 ENERGY POLICY AND THE ROLE OF TECHNOLOGY IN NATIONAL SECURITY the world’s only superpower, it increasingly needs coalitions to support its global security efforts, such as in the Middle East, Afghanistan, Iran, and North korea, in dealing with emerging Russian adventurism, and in domestic and international financial markets. All of these engagements are critical to U.S. security. And, while close elections and partisan politics make forging a national consensus on complex issues such as energy security and climate change difficult in democratic countries, autocratic governments such as in Russia and Venezuela have returned to the energy business and are aggressively using energy as a tool of national policy. At the same time, the character and nature of global conflicts have changed, and they will continue to evolve. For example, in the current geopolitical environ- ment physical force alone may not resolve conflicts, and philosophical differences may be irreconcilable. Terrorism has become a reality, and an “unwillingness to kill” is viewed by some as weakness. yet geopolitical and national security systems remain flexible to minimize conflict and permit economic development to progress. Between 2005 and 2030 (Figure 2), world energy demand and carbon emis- sions are expected to grow more than 50 percent, and consistent with the economic trends previously mentioned, developing countries will account for 80 percent of that increase according to the Energy Information Office. In 2030, liquid fuels, mostly petroleum based, would account for 33 percent of world energy demand, down slightly from 36 percent today. The share of coal would grow from 27 percent today to 29 percent, while the share of natural gas would remain at approximately 23 percent. Since renewables (including hydroelectricity) and nuclear power would remain at 8 and 6 percent respectively, the share of global energy from fossil fuels would remain at 86 percent. From an energy-security perspective, it is important to note that today’s fos- sil-energy reserves are geographically concentrated. Some 60 percent of proven oil reserves are in the Persian Gulf and Russia—not the most stable regions in the world. Saudi Arabia, Iran, and Iraq account for 20, 10, and 9 percent, respectively, while Russia accounts for 5 percent. This same region also accounts for 68 percent of proven natural gas reserves. Russia has 27 percent, while Iran and Qatar have 16 and 15 percent, respectively. Hence disturbances in the Persian Gulf and Russia will not only affect world oil markets, but will also affect the world natural-gas markets, as the international market for liquefied natural gas grows. Coal is more widely dispersed geographically. The United States has 27 per- cent of proven reserves, while Russia, China, and India have 17, 13, and 10 percent each. However, because burning one BTU of coal releases 80 percent more carbon dioxide than a BTU of natural gas, and about 40 percent more than a BTU of oil, increasing restrictions on coal use are likely to be imposed in some countries. Fortunately, according to the International Energy Agency (IEA), while the world produced some trillion barrels of oil by 2005, there are about 4.5 trillion barrels of oil yet to be produced. This includes OPEC Middle East oil, other con-

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Romig Figure 2 R01394 portrait above broadside below 12 Carbon Dioxide Energy Demand Emissions 800 50 45 700 40 Nuclear 600 35 Other 500 30 Natural Gas Non-OECD 400 25 20 300 Q uad rillio n B TU s Coal 15 200 Billion Me tric T ons CO2 10 OECD 100 Liquids 5 0 0 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030 FIGURE 2 Graphs showing estimated increases in world demand for energy and in carbon emissions by 2030. Source: U.S. DOE EIA (2008).

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1 ENERGY POLICY AND THE ROLE OF TECHNOLOGY IN NATIONAL SECURITY ventional oil, heavy oil and bitumen, oil shale, oil in the Arctic, and increases in oil from enhanced recovery techniques.3 Most of this oil can be produced for less than $50 to $70 per barrel ($2004). In addition, and not counted in these totals, are liquid fuels that can be produced from coal, natural gas, and biological materi- als. However, it will take time, some improved technologies, and sizable capital investments to bring these various liquids on stream. The same IEA study indicated that known resources of natural gas will last for many years. While 80 trillion cubic meters (TCM) have been produced, 370 TCM, or more than 120 years supply at current consumption rates (2.9 TCM/year) remain. In addition, there are at least 248 TCM of nonconventional gas from coal- bed methane, tight gas, and gas shales remaining. (Reliable worldwide estimates for nonconventional gas are not available, so these resources could be two to three times larger.) In addition, between 1,000 and 10,000,000 TCM of gas are locked in the form of hydrates in the seabed and permafrost, but their recovery status is unknown. Simply having reserves and the ability to extract them, however, does not guarantee a secure supply that will not be disrupted. Physical protection of energy infrastructure—pipelines, tankers, and electricity—presents some unique security challenges, because infrastructure components are widespread, highly visible, and accessible. Many transportation and delivery nodes and links are exposed and in unstable and/or unfriendly regions. In addition, growing energy markets and inte- gration will stretch infrastructure systems and add complexity to their operation and security. Nonetheless, we are making progress. We already have a wide range of tools, with more in development, to help protect energy infrastructure. Research and development programs are under way to make advanced bio- fuels from algae and cellulosic ethanol cost competitive and to explore “sunshine to petrol” (Figure 3), an advanced concept that would use solar-energy-powered catalytic reactors with water and carbon dioxide to make synthetic gasoline. Such technology would be key to minimizing our carbon footprint. Although energy security is a challenging problem, the policy on global cli- mate change is even more of a problem. To stabilize the atmospheric concentration of carbon and other greenhouse gases at current levels, which would ensure that human influence on climate would get no worse than it is today, would require a 50 to 90 percent reduction in current emission levels, according to the Intergov- ernmental Panel on Climate Change.4 In effect, without carbon sequestration, the world would have to reduce its current use of fossil fuels by 50 percent or more; and unless developing countries like China also reduce their current use of fossil fuels by this amount, then the U.S. and the rest of the world would have to make even greater reductions. 3IEA, Resources to Reserves—Oil and Gas Technologies for the Energy Markets of the Future, 2005. 4 IPCC, Climate Change 200 Synthesis Report, 2007.

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“S2P: Sunshine to Petrol” 14 FRONTIERS OF ENGINEERING Carbon-Neutral Renewable Gasoline or JP8 Proof of Concept demonstrated for Splitting CO2 & H2O with a Solar-driven Chemical “Heat Engine” – Needs R&D to further investigate viability Chemical synthesis of Gasoline from the Solar Products and Conventional Chemistries. Conventional Chemistries from Syngas to Gasoline Solar-Thermochemical CO2 reduction and H2O Conventional splitting infrastructure Net 10% of Solar Energy Stored in Chemical Bonds of Gasoline Selective absorbers recover CO2 from the Atmosphere (needs invention for economic viability) FIGURE 3 Work is being done on producing a carbon-neutral, renewable gasoline. Source: Sandia National Laboratories. Nuclear energy, through an integrated nuclear-power enterprise, can play a significant role in both energy security and in reducing carbon emissions. Sandia is helping to bring this about through efforts to ensure the safety and security of nuclear facilities, to solve the nuclear waste problem, to provide innovative nuclear-power options, and to help prevent nuclear proliferation (Figure 4). The latter issue will become increasingly important as nuclear power grows world- wide. More enlightened ways of managing the nuclear fuel cycle and nuclear waste will be key to minimizing our nuclear footprint. Although our current near-term options for dealing with energy (especially oil and natural gas) security and carbon emissions are limited, we believe that a range of technology innovations will ultimately enable significant advances in energy security and reductions in carbon emissions (Figure 5). These advances will both enhance energy supply and reduce energy consumption, help improve the security of our energy infrastructure, and help reduce the carbon footprint. These advances will include high-performance computing, advanced robotics, advanced modeling and simulation, and microelectronic systems. Some governments and automobile companies are working toward a future hydrogen economy, which they believe will address many of the current energy- security and environmental issues related to our reliance on fossil fuels. A hydro- gen economy could improve a number of current problems by reducing our oil dependence on the Middle East and Russia, reducing our fossil-based carbon

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We Support the Integrated Nuclear 1 Power Enterprise ENERGY POLICY AND THE ROLE OF TECHNOLOGY IN NATIONAL SECURITY Solving the Ensuring Nuclear Facilities Nuclear Waste Problem are Safe and Secure Preventing Nuclear Proliferation Improving Nuclear Power through Innovation FIGURE 4 Illustration showing the components of an integrated nuclear-power enterprise. Source: Sandia National Laboratories. A Range of Technology Innovations Will Enable Romig Figure 4 Advances in Energy Security, Including Infrastructure R01394 Protection, Energy Supply, and Consumption portrait above landscape below For example: • High performance computing, including quantum Quantum information computing for ultra-secure communications Solving the Ensuring Nuclear Facilities processing • Advanced robotics Nuclear Waste Problem are Safe and Secure • Advanced modeling and simulation • Micro-electronic machines and systems Micro-robot Preventing Nuclear Proliferation Improving Nuclear Power FIGURE 5 Technology innovations for a secure energy future. Source: Sandia National through Innovation Laboratories. Romig Figure 5 R01394 portrait above

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1 FRONTIERS OF ENGINEERING emissions, and helping to overcome “fixed resource” limitations of fossil fuels and their uneven distribution among countries. However, many hurdles would have to be overcome, such as onboard hydrogen storage, the lifetime of fuel cells, hydrogen production economics, lack of a hydrogen infrastructure, and carbon capture and storage, if the hydrogen is derived from fossil fuels. As a result, hydrogen fuel and vehicle systems are unlikely to have meaning- ful market penetration until at least the mid-2020s. In the meantime, automobile manufacturers and others are seriously interested in developing and marketing a wide range of plug-in hybrid and battery-powered electric vehicles that may substantially decrease the use of petroleum-based fuels for automobiles. Although only a limited number of models is available today, most auto companies plan to offer additional models and options by 2010. From a longer-range perspective, several advanced technologies are on the horizon that could very positively affect our energy system. Nanotechnology, in particular, has the potential to change energy supply and demand in ways we have only begun to consider. For example, solid-state lighting using quantum dots could cut power use for lighting by half. Ultra-high-strength, lightweight nanophase materials could improve car and airplane efficiency substantially. Nanoparticles and nanoarchitectures for energy conversion and storage may offer solutions to low-cost fuel cells and batteries. SUMMARY AND CONCLUSIONS The world economy and energy markets will become increasingly integrated and interdependent, although clearly the risk of “pull-back” and protectionism remains. Based on current trends, energy use and carbon emissions will increase substantially, driven by the developing world. In the near to medium term, the potential for supply shocks and price instability in oil and natural gas will increase. In addition, nuclear power will grow, and nuclear technology will spread, increas- ing the risk of proliferation. Defense and military complexity will also increase, as will requirements for sound, timely intelligence. However, at the same time, major new energy-technology platforms based on renewables could transform economies and lead to the emergence of other energy markets. As both economic competition and cooperation intensify, the appetite for high-cost public policies in the United States that are inconsistent with com- petitor countries will likely become more limited. At the same time, the need for consistent energy-security, environmental, and economic objectives and policies will grow. The protection of energy infrastructure will continue to be a critical com- ponent of national security, and tools are being developed and improved to help provide that protection. Systems analysis, enhanced intelligence, and, as a last resort, military force may be brought to bear; and new technologies will enable new creative solutions to enhance protection even further.

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1 ENERGY POLICY AND THE ROLE OF TECHNOLOGY IN NATIONAL SECURITY During the transition to more advanced energy and environmental technolo- gies, international flexibility, cooperation, and partnering in many areas, including defense, intelligence, nonproliferation, public policy, and science and technology investment, will be critical to avoiding disruptions in energy supplies. Flexibility, cooperation, and partnering will also be necessary to support international eco- nomic and political security, improve the health and well-being of the developing world, and provide a foundation for global and regional economic prosperity and environmental sustainability. READING LIST British Petroleum. 2007. BP Statistical Review of World Energy 2007. June 2007. London, U.k. EIA (Energy Information Administration). 2007. International Energy Annual. June 21, 2007. Wash- ington, D.C.: U.S. Department of Energy. EIA. 2008. International Energy Outlook 2008. Washington, D.C.: U.S. Department of Energy. IEA (International Energy Agency). 2005. Resources to Reserves: Oil and Gas Technologies for the Energy Markets of the Future. Paris, France: OECD (Organization for Economic Cooperation and Development). IPCC (Intergovernmental Panel on Climate Change). 2007. Climate Change 2007 Synthesis Report. November, 2007. Geneva, Switzerland: IPCC. Maddison, A. 2001. The World Economy: A Millennial Perspective. Paris, France: OECD.

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