Renewable Energy Set to Explode...with Government Backing

By Chris Nelder
Thursday, December 28th, 2006

A bomb went off in the renewable energy world two months ago, but almost nobody heard it. It has stunning implications for the energy business, both the traditional hydrocarbon side and the renewable side.

Maybe it’s because it was in the form of a 90-page policy paper from the Council on Foreign Relations (CFR)—the kind of stuff that makes a normal person’s mind wander and eyes glaze over after a few minutes.

Well, I’m not a normal person (ask anybody!). Despite its pedantic prose and lugubrious language that only a policy wonk could love, I read it.

And after reading it, you could have pushed me over with a feather. This is HUGELY significant stuff. And yet, even today, two months after it was published, a Google search on the title of the report yields a mere 300 references to it—all of them, it seems, from peak oil blogs and related sites.

I found not one mention from a single recognized media source. Newspaper, TV, major news sites . . . nada.

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The report is entitled “National Security Consequences of Oil Dependency” and was written by a special task force of the CFR. Now, if you don’t know much about the CFR, you should stop and Google them right now, because they are part of the cabal that, literally, runs the world. The elite of the elite. The power center of government and business everywhere.

To demonstrate the seriousness of the report, the task force was chaired by two former CIA directors, James Schlesinger and John Deutch. (You may have come across similar efforts by another former CIA Director, James Woolsey, who has also made national energy security his personal ambition.)

Here are just a few choice excerpts from the report (emphases mine):

  • The U.S. government has failed to pay sufficient attention to energy in its conduct of foreign policy or to adopt a consistent approach to energy issues.
  • The issues at stake intimately affect U.S. foreign policy, as well as the strength of the American economy and the state of the global environment. But most of the leverage potentially available to the United States is through domestic policy. Thus, the Independent Task Force devotes considerable attention to how oil consumption (or at least the growth in consumption) can be reduced and why and how energy issues must become better integrated with other aspects of U.S. foreign policy.
  • The challenge over the next several decades is . . . to begin the transition to an economy that relies less on petroleum. The longer the delay, the greater will be the subsequent trauma. For the United States, with 4.6 percent of the world’s population using 25 percent of the world’s oil, the transition could be especially disruptive.
  • The voices that espouse ‘‘energy independence’’ are doing the nation a disservice by focusing on a goal that is unachievable.
  • The central task for the next two decades must be to manage the consequences of dependence on oil, not to pretend the United States can eliminate it.
  • While reducing U.S. oil imports is desirable, the underlying problem is the high and growing demand for oil worldwide.

They then spend considerable time debunking these widely-held “myths” about energy:

Myth #1: The United States can be energy independent.

Myth #2: Cutting oil imports will lower fuel prices.

Myth #3: Large Western companies like Exxon Mobil, BP, Shell, and Chevron control the price of oil.

Myth #4: There’s plenty of low-cost oil ready to be tapped.

Myth #5: Renewable energy and nuclear power can quickly reduce dependence on oil and gas.

And finally, they gave some policy objectives:

• Increase efficiency of oil and gas use;

• Switch from oil-derived products to alternatives;

• Encourage supply of oil from sources outside the Persian Gulf;

• Make the oil and gas infrastructure more efficient and secure; and

• Increase investment in new energy technologies.

They go on to call specifically for increased government R&D backing of new energy technologies, including higher fuel efficiency innovations, plug-in hybrids, ethanol, synfuels, and advanced nuclear designs.

Wow. What a bunch of tree-huggers those CIA guys are, huh?

In short, this policy paper is an unequivocal affirmation of the reality and the significance of peak oil. It is a sharp critique of hypocritical U.S. foreign policy that pretends to be about freedom while deploying its troops not where freedom is threatened, but where there is oil.

And best of all, it is a stirring call to action for the government to invest a lot of R&D money, without regard for return on the investment, in all kinds of fundamental energy alternatives and efficiency technologies.

As a guy in the renewable energy investing business, well, I could scarcely imagine a better Christmas present.

But the CFR isn’t the only organization that’s (finally) on point about energy policy. Here are a couple of other news bites you might have missed:

  • Eighty House Members signed a letter to President Bush seeking substantially higher funding for renewable energy and energy efficiency in the White House’s 2008 budget request. Meanwhile, energy consumers and producers, including six oil and gas trade associations, have formed “a coalition of coalitions,” called the “Energy Initiative,” to develop national energy policy recommendations.
  • A panel of U.S. renewable energy industry experts recently estimated that the U.S. could produce, at a minimum, 25% of the country’s electrical energy requirement with renewable energy by 2025, making the “25X25 proposal feasible, reasonable, and doable.”
  • The European Commission will nearly double its target [to 20%] for the adoption of renewable energy in 2020, versus its [12%] goal for 2010.

To top it all off, just the other day, on the front page of the Wall Street Journal, there was a story entitled “Choke Points—As Threats to Oil Supply Grow, A General Says U.S. Isn’t Ready,” wherein a former Air Force general who was the deputy commander of U.S. forces in Europe, Central Asia and Africa was interviewed about his continuing efforts to secure the supply lines of oil from the Caspian Basin and the African coast. How’s this for a startler:

Back in Washington, Gen. Wald has joined forces with a movement that some are calling the “green hawks.” Prominent former policy makers and retired armed-forces officers, they argue that a tough military and foreign policy won’t be enough to ensure energy security, and the only real solution lies in changing consumption at home.

If the major policymakers and military men in the U.S. are agreed that reducing domestic consumption is the only solution, then surely even the knuckleheads in the Congress and the White House can’t be too far behind. It’s past time to consign Cheney’s derision of energy conservation to the dustbin of history and start making some tracks to the future.

Finally, the time has arrived to get our foreign policy objectives aligned with our energy policy objectives and come clean about our reasons for being in the Middle East. Let’s face it, their main export isn’t broccoli, and when the CFR says it’s OK to admit that, it’s OK.

Finally, the government seems ready to step up to the renewable energy challenge and deliver. Almost exactly one year ago, the U.S. government laid off a substantial fraction of the workforce at the National Renewable Energy Laboratory, citing budgetary constraints. Perhaps now we can put such idiocy behind us for good.

Finally, we can come clean about our hidden subsidies to the traditional hydrocarbon industries and start encouraging the right solutions rather than the wrong ones. Big Oil doesn’t need tax relief—even Bush has admitted that. It’s time to let the Invisible Hand go to work on the real solutions we need.

I’m so excited about the future of renewable energy, I can hardly sit still long enough to type this. A new day is dawning. Let’s roll!


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