March 26, 2011

Will the GOP scuttle the second U.S. Manhattan Project?

Tex Carter, CEO of biofuels developer New Planet Energy, reports that he recently participated in a roundtable discussion with a Republican congressman about funding for biomass conversion technologies (CTs) for the creation of biofuels. He was told that these loan guarantee programs were on the list of top ten expenses that the GOP is seeking to cut from the national budget through the Continuing Resolution 2011.

This is penny wise and pound foolish in the extreme. If the GOP had decided to cut the Manhattan Project from U.S. Dept. of War funding during WWII, would they have been ready to accept responsibility for the consequences of being second in the development of atomic weapons?

Texas-oil President Bush used the platform of his 2006 State of the Union address to make the following assertion - "America is addicted to oil, which is often imported from unstable parts of the world." He could not have been more clear. Our energy dependence on oil is like an addiction that jeopardizes American national and economic security.

Oil is the life's blood and the Achilles heel of the U.S. economy. Curing addictions requires finding non-addictive substitutes. The only renewable substitutes for gasoline are biofuels.

In agreement with Bush's pronouncement, a bipartisan House and Senate voted in 2007 to pass the Energy Independence and Security Act (EISA) that defined what quantities of alternative fuels would be mandated by the federal government to help wean America off foreign oil. Calling for development of new technologies to provide liquid alternatives to oil products, EISA is the modern equivalent to a Manhattan Project.

By seeking to cut conversion technologies from the budget, the GOP appears to be saying that Bush was wrong in calling the oil dependence "an addiction" and party members were wrong to give EISA their support.

Between 1942-1945, the Manhattan Project cost $2 BILLION dollars (roughly $60 BILLION equivalent in 2011 dollars). The government mandate in this case was totally government funded and managed throughout the RD&D of the project development. Many expensive failures were accepted as necessary to find the right process for building atomic weapons. Being the first "to market" with atomic weapons and their vast explosive potential would probably insure military victory. The consequence of not being first probably meant capitulation to foreign adversaries who won the race.

While we are not now on a wartime footing comparable to WWII we are witnessing the folly of a dependence on oil including armed conflict. Desert Storm was fought to stop Saddam Hussein's power grab for control of Middle East oil in Kuwait. Operation Iraqi Freedom was NOT about the perceived threat of weapons of mass destruction. It was about something far more dangerous longterm - consolidation of the control of oil by rogue nations and terrorist groups who could destablize global access to oil.

This war has become the longest, sustained military operation in the history of the United States - at a significant cost. The cost is compounded by the largest transfer of wealth in the history of mankind - from countries that need oil including the United States to those that produce and export oil.

The imbalance of power between have and have-not nations is disrupting political and economic stability worldwide. A 2007 Rice University study of The Role of National Oil Companies in International Energy Markets underscores the risk - "The gap between the high ranking of national oil companies’ resource holdings and the ranking of the world’s largest oil and gas production operating companies highlights a potential source of supply instability in world energy markets. The fate of emerging national oil companies, their strategies and policies, will have a substantial, long term impact on the pace of resource development in the coming years... Many of these emerging national oil companies are bankrolled or have operations subsidized by their national governments, with geopolitical and strategic aims factored into investments rather than purely commercial considerations."

The recent unrest in Egypt and oil-producing Libya shows the direct relationship between political instability in these regions and the price of oil. The correlation between oil price control and tyrannies has been widely discussed - "Oil-exporting countries become less free and democratic as oil prices rise, and their leaders are enabled to enrich themselves without investing in their people."

Dr. Gal Luft is the executive director of the Institute for the Analysis of Global Security (IAGS) and author of several books about U.S. energy security. He and the equally eloquent Anna Korin co-wrote a book titled "Turning Oil Into Salt: Energy Independence Through Fuel Choice." As long as there are powerful "strategic commodities" in the world - like salt in the 19th century and oil in the last 100 years - there will be dangerous political imbalance between nations that have the commodity and those that need it. The cure is to reduce the strategic impact of the commodity - the way that salt as a preservative was rendered a mere condiment by the invention of electric refrigeration. We must similarly render oil "boring" by providing renewable, clean alternatives at the pump - namely, biofuels.


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