1
Introduction

Context

Adequate, affordable energy supply and efficient energy use are indispensable ingredients of the economic well-being of individuals and nations.

(PCAST, 1997, p. 1-1)

Energy is the lifeblood of modern societies. It is critical for transportation and communication, industrial and agricultural production, climate-conditioned buildings and vehicles, and automobile-oriented suburbs. Without a supply of energy at the turn of an ignition key, we would not have planes, trains, and automobiles. Without a supply of electricity at the push of a button or the flick of a switch, we would not have elevators, telephones, televisions, computers, electric lights, or modern heating and cooling systems. In short, a complex system of energy supply and distribution has helped to transform our society dramatically in the last 100 years. By reducing the time required for travel, by reducing the time required to complete a task, or by changing the nature of interaction, energy services have changed our personal trajectories through space and time and thus our lives. Energy, which is a means for social ends rather than an end in itself, makes possible a high quality of life, characterized by prosperity and security. Given the role of energy in our economy, it is no surprise that affordable, abundant, and reliable energy supplies are of crucial interest to national policymakers.

A hundred years ago, the major sources of energy in the United States were coal, fuelwood, and animal power. Coal, the new king, was the source of power



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--> 1 Introduction Context Adequate, affordable energy supply and efficient energy use are indispensable ingredients of the economic well-being of individuals and nations. (PCAST, 1997, p. 1-1) Energy is the lifeblood of modern societies. It is critical for transportation and communication, industrial and agricultural production, climate-conditioned buildings and vehicles, and automobile-oriented suburbs. Without a supply of energy at the turn of an ignition key, we would not have planes, trains, and automobiles. Without a supply of electricity at the push of a button or the flick of a switch, we would not have elevators, telephones, televisions, computers, electric lights, or modern heating and cooling systems. In short, a complex system of energy supply and distribution has helped to transform our society dramatically in the last 100 years. By reducing the time required for travel, by reducing the time required to complete a task, or by changing the nature of interaction, energy services have changed our personal trajectories through space and time and thus our lives. Energy, which is a means for social ends rather than an end in itself, makes possible a high quality of life, characterized by prosperity and security. Given the role of energy in our economy, it is no surprise that affordable, abundant, and reliable energy supplies are of crucial interest to national policymakers. A hundred years ago, the major sources of energy in the United States were coal, fuelwood, and animal power. Coal, the new king, was the source of power

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--> for the nation's expanding railroads, for the steel industry, and for steam boilers that powered big industry. Electricity was still a new invention. Except for kerosene in the home, traditional energy systems were the order of the day for most Americans (Table 1.1). Over the past 100 years, energy development and use have changed American life through the technologies they power. Most of these changes resulted from the growing use of two forms of energy: (1) liquid fuels from petroleum, which powered the automobile era that began in the 1920s, and (2) electricity, which has grown steadily throughout the century and now powers the information age that began in the 1970s. Oil and natural gas have displaced coal for industrial and home heating uses, but coal remains a major contributor to electricity generation (Table 1.1). Oil and natural gas are the fuels of choice especially in industry and transportation. Meanwhile, electricity reaches into nearly every home and nearly every aspect of life. Even though the mix of energy sources has changed considerably in the last 100 years, the United States still depends on fossil fuels, which supply approximately 86 percent of the nation's primary energy needs (Figure 1.1). Just as the mix of energy sources that fueled the United States changed in the last 100 years, so too will it change in the next 100 years. How it changes will depend on changes in technology and society between now and then, and the details of change are difficult to predict. A forecaster in the late nineteenth century would have found it difficult to imagine what would happen in the next 100 years: the primacy of the automobile, truck, and airplane; the mechanization of agriculture; the relationship between electricity and such new technologies as the computer and television; the appearance of new energy technologies such as nuclear power; the use of petroleum and coal as industrial feedstocks; the con TABLE 1.1. Comparison of Primary Energy Sources in the United States, 1880 and 1997   Percentage of Total Energy Source 1880 1997 Coal 57 23 Biomass 35 3 Oil 4 39 Gas 4 24 Hydropower 0.1 4 Wind, solar, geothermal <0.1 0.5 Nuclear - 7 Note: Percentages sum to more than 100 due to rounding. Source: Dewhurst et al., 1955; EIA, 1998, p.8; Schurr et al., 1960.

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--> Figure 1.1. U.S. energy flow (quadrillion Btu), 1997. Source: EIA, 1998.

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--> cern with energy efficiency and environmental protection; and the growing energy needs of developing countries. The task of making accurate predictions of the mix of future energy sources is made more difficult by the fact that we do not know exactly how debates will unfold on such topics as the perceived risks of particular energy sources, environmental effects of one source of energy versus another, and possible impacts of different energy sources on global warming and climate change. As a result, several studies of national energy policy recommend that the United States preserve multiple options for energy supply by adopting a portfolio approach to energy technologies and to investment in energy research and development. [For example, see the following three reports: Federal Energy Research and Development for the Challenges of the Twenty-First Century (PCAST, 1997); Energy R&D: Shaping Our Nation's Future in a Competitive World (SEAB, 1995); and Comprehensive National Energy Strategy (DOE, 1998a). A portfolio approach avoids reliance on any single energy source and capitalizes on improvements in energy technologies that affect supplies and efficiency of energy use. A portfolio approach is also prudent as the world economy becomes more competitive and as world markets become more interconnected. Future energy decisions of the United States will increasingly have an international frame of reference. Currently, more than 50 percent of the oil consumed by the United States is imported (DOE, 1998a). Production from domestic oil fields peaked in 1970 at about 11 million barrels per day, with demand at about 14 million barrels per day as Figure 1.2 indicates. Since then, domestic production has slipped to 9 million barrels per day and the fraction of imported oil has risen steadily. In 1996, the United States spent $64 billion to buy oil on the international market (PCAST, 1997). The cost of oil imports is expected to rise further if predictions that imports will increase to 60 percent of oil consumption by 2010 are fulfilled (DOE, 1998a). The geopolitics of energy has played an important role in international relations in this century, as the 1973 oil embargo, 1978 Iranian revolution, and 1991 Operation Desert Shield-Desert Storm illustrate. At a conference held in December 1997 in Kyoto, Japan, international negotiations took place about global greenhouse gas emissions, which are intimately connected to the supply, use, and environmental effects of fossil energy. Energy prices, impacted by international events outside the control of the United States, are watched closely by industrial and agricultural users whose costs of production are influenced by energy costs. Individual consumers, who are now accustomed to historically low gasoline prices, react strongly to any price rise or to proposals that energy be taxed to meet environmental or other national policy goals. It is no surprise, therefore, that energy issues are of significant interest to those charged with formulating national and international policy. Successful policy development will require creation of a comprehensive, flexible national energy strategy (DOE, 1998a) that addresses the full range of

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--> Figure 1.2. Past and projected U.S. oil imports in millions of barrels per day, 1950–2015.  Source: PCAST, 1997, p. 1–8. energy-related supply, economic, environmental, and security challenges facing the nation. Many of the questions that arise in the development and implementation of this strategy will have a significant geoscience component. Can the decline in domestic oil production be slowed appreciably by increased exploration in Alaska? Do geologic formations in the United States contain enough natural gas to allow significant substitution of gas for coal in order to reduce carbon dioxide emissions, and for how long? Can these additional oil and gas resources be recovered at costs competitive with other energy sources? How much coal of a given quality can reasonably be recovered and at what cost? Which coal will require the greatest expenditure to control acid-mine drainage? What energy resources are to be found on public lands? Can methane hydrates in ocean sediments and in the Arctic tundra be a significant source of natural gas? Is it likely that coalbed methane will supply more gas to American consumers in the future? What is the distribution of rich oil shales in the United States? If concerns about global warming lead to renewed interest in nuclear power, what domestic uranium resources are available, and how will the problem of disposal of high-level nuclear waste impact the decision to once again embrace nuclear power? Finally, cutting across these questions, what is the national interest in maintaining a significant domestically produced component of total energy requirements? Questions such as these are connected to the geological settings of the natural resources themselves. The cost of coal recovery is influenced by the thick-

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--> ness of the coal seams and the thickness of the overburden. How much oil may be present in geologic formations depends on whether nearby source rocks have been buried deeply enough to generate oil and whether there are porous rocks to trap the oil that forms. How much oil can be recovered often depends on the variability of the sedimentary rocks in which it is found. Answers to these and many other questions are the focus of the United States Geological Survey (USGS) Energy Resources Program (ERP), the subject of this report. If American policymakers are to respond rationally to the energy challenges that the nation faces in the next century, they will need access to objective, dependable scientific information about the portfolio of choices available. As they consider the inevitable changes that will occur in the energy mix in the years to come, they will call extensively on the expertise available at, and data created by, the ERP. Consequently, the USGS and its ERP must be prepared to respond in a timely way to policymakers on the availability and suitability of energy options to meet future needs. Energy Resources Program The ERP is one of nine major programs within the Geologic Division (GD) of the USGS. According to the Budget Justifications and Annual Performance Plan, FY 1999, for the USGS, the ERP . . . provides the most up-to-date and comprehensive analysis of oil, natural gas, and coal resources of the Nation and World and produces digital energy resource information that facilitates land use, energy-policy, and environmental decisionmaking. Research on fossil energy resources includes assessments of the quantity, quality, and geographic locations of natural gas, oil, and coal resources, as well as estimates of energy resources availability and recoverability based on geological, technological, economic, and policy constraints. (DOI, 1998, p. 168) The ERP pursues energy resource and related environmental research within the context of three integrated themes or subprograms: national coal resource investigations and assessments; national oil and gas resource investigations and assessments; and world energy investigations and assessments. Study and Report This study was undertaken in recognition of the critical role to be played by the ERP in the energy future of the United States. It was requested by the GD of the USGS. In 1997, Dr. P. Patrick Leahy, chief geologist of the USGS, invited the National Research Council (NRC) to conduct an independent and compre-

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--> hensive review of the ERP. Accordingly, in December 1997, the NRC's Committee on Earth Resources, which operates under the aegis of the Board on Earth Sciences and Resources within the Commission on Geosciences, Environment, and Resources formed the Panel to Review the U.S. Geological Survey's Energy Resources Program. The panel consists of 11 geoscientists and resource experts from industry, academia, and state agencies. Its members have recognized expertise in energy resources; petroleum and coal geology and geochemistry; geophysics; sedimentary petrology; geodynamics; environmental geochemistry; energy assessments; petroleum, mining, and geological engineering; and energy economics. (Brief biographies of panel members are provided in Appendix B.) The panel was asked to consider the mission, role, balance, effectiveness, and future directions of the ERP. The charge to the NRC panel included five specific questions: Is the scientific mission of the ERP appropriate for a federal earth-science agency? Is the role of the program clearly defined in relation to other federal agencies and are the program's responsibilities consistent with its mission? Is the program appropriately balanced between resource and environmental issues? Is it appropriately balanced between research and assessment activities? Has the program proven effective in addressing energy resource issues of national importance? How should the program's activities, scientific and technical expertise, and infrastructure evolve to meet future needs? Accordingly, the aim of this report is to provide guidance to the USGS about the present and future directions of its ERP. More specifically, the report reviews and recommends improvements to the program in relation to the energy challenges of the next century. To answer these questions, the panel held four meetings between March and August 1998. These meetings included presentations from staff of the ERP and other USGS programs, briefings from representatives of state and federal agencies, and discussions with leaders from industry and nongovernmental organizations. The panel also received written responses to questions about the ERP from stakeholders. (The individuals who provided the panel with oral or written input are identified in Appendix A.) As background, panel members reviewed relevant USGS and ERP documents and materials through July 1998; pertinent NRC reports, including Energy-Related Research in the U.S. Geological Survey (NRC, 1988) and Mineral Resources and Society: A Review of the U.S. Geological Survey's Mineral Resource Surveys Program Plan (NRC, 1996); and other technical reports and published literature. Chapter 2 of this report reviews the role and mission of the ERP, including its relationship to other government energy programs. Chapter 3 addresses ques-

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--> tions of program balance. Chapter 4 examines program effectiveness and evolution, and describes the strengths and opportunities for improvement of current programs. Chapter 5 summarizes the panel's findings and recommendations. Throughout the report, major conclusions and suggestions are printed in italics and recommendations in bold type.