James Schlesinger, who was the nation's first secretary of energy, had a grim analysis of the nation's current energy predicament this morning at an energy summit in Washington, D.C., sponsored by the National Academy of Sciences. Schlesinger, now a senior adviser to Lehman Brothers and chairman of the nonprofit engineering organization Mitre, predicted that energy prices would continue to rise and declared that the United States would never see energy independence as long as it depended on the internal combustion engine. Excerpts from his remarks:
We regularly hear that we must ensure that energy supplies are abundant, affordable and secure—an aspiration devoutly to be wished [quoting Hamlet]. These criteria or shibboleths—to be exact—are not likely to be achieved. We are not going to have energy security. What we are trying to do is fashion a set of policies that limit or mitigate energy insecurity. And we have done fairly well in that regard, most notably with the Strategic Petroleum Reserve.
On the question of affordability—remember, the price of energy will continue to rise, and what the public expects, and what political leaders may promise with regard to affordability, will not transpire.... [Energy] will be available at whatever price clears the market.
The energy independence that in the 1970s was talked about by three presidents—coal was at the root of it. Coal was America's ace in the hole. America was the Saudi Arabia of coal. For reasons I need not dwell on, we know now that coal, as the main route to improving energy security, is open to continued question.... Do not chase the will o' the wisp of energy independence.
We are not going to reach energy independence as long as the U.S. depends on the internal combustion engine.
Schlesinger said that he would not get into the question of "peak oil"—whether oil is running out—and added that those who believed it was were ignoring the impact of technological improvements motivated by higher prices. "Some of the arguments about peak oil are theological," he said. However, he went on to sound much like a peak oiler—pointing out that most of the world's oil came from super fields discovered decades ago that were now in decline. Also, he noted the National Petroleum Council's observation that conventional oil production would plateau because of the geopolitical limitations on access to oil.
"But whatever the reason, bear in mind we face a painful transition to the future in which we hit a limitation or a plateau on the ability to produce crude oil, and we might begin to effectively make adjustment now rather than later," he said. If the world continues on its current path of oil use, we must find and develop the equivalent of nine more Saudi Arabias, Schlesinger said, adding, "I think the probability of being that successful is very low."
Schlesinger had one note of optimism: "The solution is technology. We are giving a big helping hand to technology by getting the price of oil up to $110. That has stirred a lot of entrepreneurial juices—indeed, entrepreneurial juices in Silicon Valley. Google has promised to devote its efforts to renewable resources by making them economic. A Cambridge, Mass., firm [A123 Systems] has promised developments on lithium ion batteries. Cellulosic ethanol will come, and [the] beauty of it is it will overcome what I shall delicately refer to as the defects of ethanol production from corn."