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\ \ I'' ' v P R O D U C T I O N. C O N 5 U M P T I O N. A N D C O N S E Q U E N C E John L. Helm Editor National Academy of Engineering NATIONAL ACADEMY PRESS Washington, D.C. 1990
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National Academy Press . 2101 Constitution Avenue, N.W. . Washington, D.C. 2~)418 NOTICE: The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel or- ganization 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 Na- tional Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and rec- ognizes the superior achievement of engineers. Dr. Robert M. White is president of the National Academy of Engineering. This publication has been reviewed by a group other than the authors according to a National Academy of Engineering report review process. Inclusion of signed work in this publication signifies that it is judged a competent and useful contribution worthy of public consideration, but it does not imply endorsement of conclusions or recommendations by the National Academy of Engineering. The interpretations and conclusions expressed in this volume are those of the authors and are not presented as the views of the council, officers, or staff of the Academy. Partial funding for this effort was provided by the Andrew W. Mellon Foundation and the National Academy of Engineering Technology Agenda Program. Library of Congress Cataloging-in-Publication Data Energy: production, consumption, and consequence / John L. Helm, editor. p. cm. "National Academy of Engineering." Companion volume to: Technology and environment. Based on a symposium entitled An energy agenda for the 1990s, held at the Arnold and Mabel Beckman Center of the National Academy of Sciences and Engineering, Irvine, Calif., sponsored by the Program Office of the National Academy of Engineering. Includes bibliographical references. ISBN 0-309-04077-9 1. Power resources Congresses. I. Helm, John L. II. National Academy of Engineering. Program Office. III. Technology and environment. TJ163.15.E5384 1989 333.79ódc20 Cover: Toni Simon, Fusion', oil on canvas. Courtesy of the artist. Copyright (I) 1990 by the National Academy of Sciences Printed in the United States of America 89-13364 CIP
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Symposium Advisory Committee WILLIAM F. KIESCHNICK' Chairman, Director and Chief Executive Officer (retired), Atlantic Richfield Company RICHARD E. BAL~HISER, President, Electric Power Research Institute PHILIP BRAY, Vice Chairman and Managing Director, Renewable Resource Systems, Inc. HARVEY BROOKS, Professor of Technology and Public Policy, Emeritus, Kennedy School of Government THEODORE ~ BURTIS, Director, Sun Company, Inc. FLOYD L. CULLER, President Emeritus, Electric Power Research Institute W. KENNETH DAVIS, Former Deputy Secretary, Department of Energy FREDERICK J. ELLERT, President, Ellert Consulting Group, Inc. JAMES L. EVERETT III, Chairman and Chief Executive Officer (retired), Philadelphia Electric Company ROBERT ~ FROSCH, Vice President, General Motors Research Laboratories, General Motors Corporation JOHN H. GIBBONS, Director, Office of Technology Assessment WILLIAM R. GOULD, Chairman Emeritus, Southern California Edison Company MICHEL T. HALBOUTY, Chairman and Chief Executive Officer, Michel T. Halbouty Energy Company FRED L. HARTLEY, Chairman Emeritus, Unocal Corporation WILLIS M. HAWKINS, Senior Adviser, Lockheed Corporation THOMAS H. LEE, Professor, Massachusetts Institute of Technology WILLIAM S. LEE, Chairman and Chief Executive Officer, Duke Power Company HENRY R. LINDEN, Executive Adviser, Gas Research Institute PLATO MALOZEMOFF, Chairman Emeritus, Newmont Mining Corporation WALTER J. McCARTHY, Jr., Chairman and Chief Executive Officer, Detroit Edison Company RICHARD M. MORROW, Chairman and Chief Executive Officer, Amoco Corporation WILLIAM ~ NIERENBERG, Director Emeritus, Scripps Institute of Oceanography THOMAS H. PIGFORD, Professor of Nuclear Engineering, University of California, Berkeley ERIC H. REICHL, President (retired), Conoco Coal Development Company . . . an
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DONALD G. RUSSELL, Chairman and Chief Executive Officer, Sonat Exploration Company GLENN ~ SCHURMAN, Retired Vice President, Chevron Corporation CHAUNCEY STARR, President Emeritus, Electric Power Research Institute JOHN E. SWEARINGEN, Retired Chairman, Standard Oil Company (Indiana) JOHN ~ TILLINGHAST, President, TILTEC RICHARD F. TUCKER, President, Mobil Oil Corporation ALVIN M. WEINBERG, Distinguished Fellow, Institute for Energy Analysis, Oak Ridge Associated Universities DAVID C. WHITE, Ford Professor of Engineering, Director Energy Laboratory, Massachusetts Institute of Technology HERBERT H. WOODSON, Dean of Engineering, University of Texas ALDEN P. YATES (deceased), President, Bechtel Group, Inc. 1V
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Preface The global supply of fuels and other sources of energy is more than adequate to meet present needs. The deliverable supply, however, is constrained by the interplay of public policy, technology, environmental concerns, and economic forces. Over the past two decades, the focus of effort has been on managing the deliverable supply of energy in the face of sometimes opposing global and domestic forces. In this volume a group of leading authorities on energy and related environmental issues explores some of these emerging and evolving forces. The organizers of the symposium on which this volume is based have opted to examine these issues in a framework different from the traditional one, usually structured by supply sector. Instead, analysis of the energy system has been approached from the perspective of demand and supply interac- tions, environmental effects, and evolving vulnerabilities and opportunities. Implications for energy strategy have been distilled from these perspectives. This approach prevented the synoptic coverage of all the possible supply sectors; topics such as coal-based technologies and solar energy systems have not been addressed in depth. Several major themes emerge from this volume. Of significance are the views of how supply and demand factors interact and the influence of technology on them. The shaping of demand by the growing role of electricity is discussed. The geopolitics of development, transportation, marketing, use of fossil fuels, and their regional and global environmental effects is the framework for examining the vulnerabilities of energy price v
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V1 PREFACE volatility, the uncertain future role of methane, and possible consequences of continued disarray in the nuclear industry. The strongest theme in this volume is the growing importance of envi- ronmental concerns in planning the global energy system. Paradoxically, the pursuit of abundant supplies of energy, so vital to the economic well-being and to the general welfare of humankind, creates the dilemma that present modes of energy use also threaten serious environmental deterioration. Our knowledge of the causes and consequences of various environmental phe- nomena varies widely. However, it is becoming clear that the production, distribution, and consumption of energy by industrial societies generate unwelcome planetary environmental loadings. This volume explores this relationship. A companion book of the National Academy of Engineering, Technology and Environment (J. Ausubel and H. Sladovich, eds.) explores more broadly how technology can be used to manage humanity's ever more intimate relationship with the environment. This book is based on the symposium "An Energy Agenda for the l990s," the first of an inaugural series of symposia to celebrate the opening of the Arnold and Mabel Beckman Center of the National Academies of Sciences and Engineering in Irvine, California. The symposium and planning effort were guided by William F. Kieschnick, who chaired the symposium advisory committee and a steering committee consisting of Richard E. Balzhiser, W. Kenneth Davis, John H. Gibbons, Thomas H. Lee, Henry R. Linden, Glenn ~ Schurman, and John ~ Tillinghast, to whom we are indebted. The committee was assisted by NAE fellow John L. Helm, who served as editor of the symposium papers that have come to make up this volume. This project was carried out under the auspices of the Program Office of NAE, directed by Jesse H. Ausubel and more recently by Bruce R. Guile. We are also indebted to Jay Ball for assistance in organizing the symposium and related activities, to Samuel R. Rod for assistance in the review process, and to H. Dale Langford and Belle R. Janson for their work in preparing the manuscript for publication. ROBERT M. WHITE President National Academy of Engineering
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Contents Energy Planning in a Dynamic World: Overview and Perspective. . William ~ Kieschnick and John L. Helm 1. SUPPLY, DEMAND, AND REAPPRAISAL Energy in Retrospect: Is the Past Prologue? Alvin M. Weinberg Energy Efficiency: Its Potential and Limits to the Year 2000 John H. Gibbons and Peter D. Blair Implications of Continuing Electrification...... Chauncey Starr 2. ENVIRONMENTAL ISSUES Global Environmental Forces .............. Thomas C. Schelling Regional Environmental Forces: A Methodology for Assessment and Prediction ......................... Thomas E. Graedel The Automobile and the Atmosphere . John ~ Shiller ∑ . V11 . .21 . 35 f .52 ....75 ....85 ........ 111
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. . . V111 CONTENTS 3. EVOLVING VULNERABILITIES AND OPPORTUNITIES Managing Volatility in the Oil Industry... John ~ Bookout The Uncertain Future Role of Natural Gas. William 1: McCormick Jr. European Natural Gas Supplies and Markets Hennck Ager-Hanssen Future Consequences of Nuclear Nonpolipy.. Richard E. Bakhiser 4. IMPLICATIONS FOR STRATEGY Energy, Environment, and Development.. William D. Ruckelshaus What to Do About CO2 -- - - - - - - - - John L. Helm and Stephen H. Schneider Achieving Continuing Electrification ... Wallace B. Behnke, Jr. Regional Approaches to liansboundary Air Pollution............. Peter H. Sand Efficiency, Machiavelli, and Buddha..... Robert Malpas Contributors ..... Index...... .145 ..... 165 .... 173 .... 184 .. . 205 . 213 ...238 ....246 ........ 265 . . .279 . . .285