Established 1845

January 1974

Volume 230

Number 1

The President’s appeal for U.S. energy self-range options that are open to the here considered in a "taxonomic" approach

by David J. Rose

Contemplating the energy crisis in their chilly homes this winter and facing an economic turndown stemming from fuel shortages , Americans increasingly wonder where it all went wrong . Had no one foreseen the problems that in retrospect receive so many glib explanations , that now require emergency correction because long-term guidance was and that cannot be truly ameliorated for many years ? Il should have been obvious to the oil companies , the electric utilities , the automobile industry , Congress , the White House and the universities that without adelquate energy an industrial society must throttle down .

The problem is large enough , once it is recognized holistically . The getting , refining , distributing and consuming of fuels , distributing and consuming of fuels account directly for about 10 percent of the nation’s economic activity , or about $125 billion per year out of a gross national product approaching $1,300 billion . That is almost equal in dollar value to all of agriculture , food processing and food distribution , activities long recognized as requiring intellectual organization and balance , even to having their own department in the Federal Government . It might therefore seem that the development of a rational , long-range energy polycy would be the first order of any nation’s business . That the U.S. never had such a policy and is still without one can only be regarded as a major social faiure .

In fact , the energy crisis not only was predicictable but also was in its general nature predicted . For one thing the petroleum industry is short of domestic refining capacity by about three million barrels per day . Its spokesmen give environmental restictions on siting as a principal reason . The short-term demand for fuel , however , is well known to be highly inelastic ; this means that a small shortage leads to large price increases . Thus not by any collusion but by a little bening neglect the petroleum industry could improve its lot substantially . Compounding the difficulty , and against advice from many sources , the industry has allowed tax credits and other incentives to increase its dependence on overseas refinery capacity . The automobile industry has paid virtually no attention to fuel conservation . The Federal Covernment has developed little capability to collect data on fuel demand and resources and has been content with petroleum-industry data . Few in decision-making positions in Government or industry paid attention to the scarcity of low-sulfur fuel as they promulgated environmental standards . Federal agencies responsible for developing nonpetroleum fossil fuels (particularly clean fuels from coal , which might have provided not only earlier relief but also competition to petroleum fuels) have been virtually starved while tax funds have been lavished on nuclear reactors . Few universities and public-information groups found it either interesting or rewarding to illuminate the issue . Our present difficulties were largely caused not by ignorance but by irresponsibility .

The President has announced a set of mandatory regulations , effective January 1 , desingned to reduce consumption of heating oil , gasoline and jet-aircraft fuels by 1,7 millions barrels per day , or slightly less than 10 percent of last year’s average daily demand . Even with this reduction , the President said , available supplies will still fall 7 percent short of the anticipated demand , so that "additional actions will be necessary " . A predicted ultimate shortfall of 17 percent is largely attributed to the oil embargo imposed by the Arab states . As a longrange response to the Arab action the President proposed "Project Independence 1980 " , which he defined as " a series of plans and goals set to insure that by the end of this decade Americans will not have torely on any source of energy beyond our own ".

Such an ambition seerns una chievable without the application of Draconian measures , and probably would be unwise besides . Lack of policy has in effect encouraged substantial foreign dependence . Estimates show that to achieve hernispheric (not domestic) self-sufficiency by 1980 means closing an energy gap of nine millions barrels per day . Conceivably this might be achieved by combining the strict consercation of energy with the rutless exploitation of all the energy resources tappable within the short span of six years . That would mean a sharp curtailment in the booming

demand for oil (recently growing at 7 percent per year) , the accelerated depletion of known oil field , the accelerated depletion of known oil field , intensified drilling offshore in the hope of a major strike , the relaxtion (if not the total abandonment (if not the total abandonment) of environmental-quality standards n unrestricted strip-mining and a wholesale shift from oil and a wholesale shift from oil and natural gas to coal , particularly for electric-power generation . Between now and 1980 it will be vurtually impossible to build more nuclear-power plants than those already on the drawing boards . It is also unrealistic to expect any substantial production of crude oil from coal or oil shale by 1980 . It is estimated that to achieve a capacity of five million barels per day synthetic oil from these sources would cost $50 billion and take eight to 10years . Solar and geothermal energy can make no important contribution in the near future . And power from fusion reactors cannot end of the century .

This preamble brings us to the point of asking what the energy problem is , instead of only what went wrong . It there is ancy excuse for the nation’s being confronted with an energy crisis , it can be found in the sheer richness of the energy problem . The scale of the problem is too vast and its time horizons are too distant for it to fit the customary behavior of the institutions charged (or left) , to deal with energy . For example , industrial rates of economic return lead to time horizons only five to 10 years hence , but the problems themselves have a much longer lifetime , and the rewards for solving many of them accrue only to the public at large and not to specific industries . Thus even if the U.S. could descern and immediately adopt the wisest set of actions to meet the present crisis , energy problems would still persist . Some measures and actions now proposed are part of a countinuing series that , if sensible, will-bring gradual progress and improvement but never total "solutions". Thirty years from now energy will still be a serious topic ; only the details will change .

U.S. ENERGY SHORTAGE was clearly predictable at least two years ago when the domestic supply of fucls began for the first time to fall sharply behind the rising total demand for energy . Domestic production of naturel gas and crude oil reached an all-time high in 1972 and has been failing since . The oil and gas curves plotted here incude a rising fraction of imports and oil shale . The individuel curves for hydroclectrice power and fuels add up to yield total demand . The widening gap between domestic supply and total demand is accounied for almost entirely by the domestic shortage of oil , as is illustrated on the next page . (The two illustrations closed follow the projections made by the Shell Oil Company.)

Analyzing alternative solutions to technical problems and weighing their consequences has an increasingly fachionable name : although useful for naming the task to be performed , is hardily a recipe for now to go about the task . When the problem concerns a subject as multifaceted as energy , in which technology , economics , resource allocation and social goals all interact , it becomes extraordinarily difficult to balance costs and benefits and reach a national con-

sensus . For one thing , many goals naturally oppose one anpther , such as cheap coal and minimum land distrubance . It is hard for a partisan of one view , no matter how conscientious , to assess opposing views . At the crudest level , to recognize the validity of an opposing view tends to weaken one’s own . More intractable kinds of intellectual imbalance arise when advocates of a particular option attract a band of adherents who , in their overenthusiasm ; convert the option into a crusade .

U.S. DEPENDENCE ON OVERSEAS OIL cannot be eliminated in the foreseeble future except at what would seem to be prohibitive coast . It is estimated that the U.S. will have to import some 16 millions barrels per day of oil from overseas in 1990 , of which at least Africa . Just to reduce this figure to eight million barrels per day the U.S. would have to build plants capable of producing six million barrels per day of synthetic crude oil from coal or shale , at an estimated cost exceeding $50 billion . This would be virtually as much oil as the U.S. is expected to pump from all its domestic wells in 1990 . The broken lines in the projections for the U.S. and Alaskan North Slope indicate how even their oil output will fall if there are no further discoveries . The curve for total supply is made up of barrels of varying B. t.u. content ; depending on source , hence the total corresponds in B.t.u. content but exactly in barrels , to the oil curve in the illustration on the preceding page .

What is needed , among other things , is some overail taxonomy of energy : a listing of the options in a logical hierarchy , so that national debate leads to public illumination and eventually to more satisfactory choices . Unforortunately no unique taxomony exists , but any reasonable one is better than none ; one hopes though study of the taxonomy to achieve some degree of insight . Then better decisions will follow . Here I attempt a taxonomy based primarily on technological issues based primarily on technological issues , but it will soon become apparent that some currently popular ideals lack merit .

The technological discussion proceeds best from the particular to the general . One begins by comparing the simplest technical options (one component with respect to another , say) . After that one compares alternate strategies for so on , thereby constructing a succession of so on , thereby constructing a successsion of ever more complex intellectual assemblies . Each highter stage of assessment tends to bring in more nontechnological issues , such as environmental coast , resource use or social purpose .

Let us start , then , at a reasonably simple level and choose a topic : Comparison of various nucléar methods for generating nuclear power , attranging the options to produce a structure resembling a mobile , the kind that hangs from a hook on the ceiling ( see upper illustration on page 26 ). The mobile has two main segments : one labeled "Fuission" and the other "Fission" . Of the two general routes to nuclear power the latter will probably not be available until after the end of the century . The fission branche of the century . The fission branch of the mobile divides : convertes (present technology ) and breeders (future technology ) . Under converters there are two subclasses : light-water reactors and the more advanced high-temperature gas

the 1980’s , and beyond that , perhaps , the gas-cooled fast reactor .

The mobile analogy is useful because it presents specific technological "varieties" as options at the bottom of the structure ; at the bottom of the structure ; at the next hiher level the options are between species of devices and at still higher levels the options are among genera , families , orders , classes and phyla . Thus mobile establishes a taxonomic ordering of alternatives . In making assessments one gives least weigght to the individual items at the bottom of the structure and increasingly more weight to options available as one moves upward . As in constructing actual mobiles , one must buid the structure and balance the items from the bottom up .

What weights , in development dollars , are actually being given to elements in the nuclear-power mobile at the present time ? Between fission and fusion the funding ratio is about five to one : $400 million for fission reactors to $80 million for fusion reactors . The ratio is roughly appropriate to the distant time horizon for fusion as well as to its remaining uncertainty . If and when fusion power becomes more certain , it will require more development funs than fission power did ; fusion is technologically as far beyond fission was beyond coalburning .

The principal imbalances appear in the fission program itself . The gas-cooled reactor has been delayed for lack of development funds . The light-water devices were developed either with Federal money (as part of the nuclear-submarine program of the Westinghouse Electric Corporation ) or with conscious acceptance of initial losses (such as those incurred by the General Electric Company in promoting the boiling-water reactor) . The high-temperature gas reactor may actually be safer than the water-cooled reactors , more economical of uranium resources , more economical of uranium resources , more efficient (meaning that less waste heat is rejected to the environment ) and perhaps even echeaper to build (although not all these advantages are confirmed ) . Its development lagged because its sponsor , the General Atomic Division of General Dynamics , could not afford to accept losses on the initial units . Now that General Atomic is part of the Gulf Oil Corporation that limitation has been removed  ; a first reactor nears operation and six more are on order .

A different and more serious imbalance applies to the breeder-reactor program . Its budget of $320 million in the fiscal year U.S. research and development expenditure on energy and more than a third of the Federal effort . The breeder’s chief advantage over present reactors is fuel economy . Whereas present reactors depend on fission of the rare uranium isotope U-235 , the breeder can utilize U-238 (99,3 percent of all uranium) by converting it into fissionable plutonium . To be sure , uranium cost will rise appreciably by the end of the century if a breeder reactor is not developed , but since uranium costs are only a small fraction of the total coast , delivered electric-power costs would not rise more than a few percent . Thus a demonstration breeder reactor for the U.S. is less urgentily needed than the Atomic Energy Commission , the White House and Congress have maintained . Europe and Japan , far poorer than the U.S. in reserves of fossil fuels and somewhat reasons than we do to vevelop all formes of nuclear power , incuding power from breeder reactors .

In addition to pushing the breeder concept faster than the facts warrant , the Government has put virtually all its support behind the liquid-sodium-cooled version , allotting only $1 million per year to Guif General Atomic’s gas-cooled fast breeder . The relative promise of the two concepts is in no such disparate ratio . Still worse , concentration on only one technological device is risky and unwise .

A similar assessment can be made with respect to generating electric power from alternate energy sources . Again the options can be arranged in the form of a mobile (see lower illustration on page 26 ). Some of the options that have been proposed can be dismissed out of hand . For example , it is easy to calculate that if a low dike were buits around the entire U.S. to harness all the tides , the resulting electric power would only satisfy the needs of a city the size of Boston . To supply the U.S. electric needs by wind power would require windmills 100 meters high spaced a few kilometers apart over the entire country . Most of the suitable hydroelectric sites are already developed . ( Hydroelectric generators now account for 10 percent of the U.S. electric-power supply .) It is clear that tides , winds and falling water are not solutions to the nation’s energy problem .

The heat of the earth’s interior is vast but normal flow of it to the surface is small . It has nonetheless been of steam and hot water have a potential for supplying about txice as much power as the U.S. currently obtains from hydroelectric sources .

Gaing in popularity is the notion of drilling holes to reach kilometer-size bodies of hot rock that lie anomalously near the surface . There are perhaps 1,000 such bodies in the geologically active western U.S. , enough to satisfy the region’s power needs for a very long time . The injection of water might both fracture the rock and jack up the strata to facilitate percolation . Steam would be withdrawn though separe exit holes . The idea is not unattractive , but there will be problems . Since hot water dissolves many minerals , it will ne hard to keep cooler piping free of mineral deposits . Moreover , percolation channels tend to become englarged where the flow is greatest , thus leading to large mass flow poor heat transfer . Such difficulties are well know to the driller of deep wells .

Solar energy is a different story . It is plentiful and free , but the problem is to collect it efficiently and economically . A million-kilowatt plant , equal in output to the largest conventional generating station , would requal in output to the largest conventional generating station , would require a collection area of 100 or more square kilometers , depending on the efficiency of conversion . That might seem to put such options beyond consideration , but a coal-burning plant , obtaining its fuel from strip-mining of coal seams half a meter thinck , will cause the same area to be stripped in 25 years . With available technology a solar-energy power plant would cost between five and 10 times as much as a coal-or nuclear- power plant. Advocates believe the cost would fall sharply with suitable engineering development .

The idea of converting solar energy the electric power in space and beaming it down to the earith at microwave frequencies would provide energy around the clock , fair weather and foul . To be economically feasible the cost of available components would have to be reduced by a factor of about 100 and the cost of putting the components in orbit by a factor of about 10 , over and above the economies promised by the space shuttle . Beyond that there is worry about the long-term effect of low-level microwave power on life near the receiving antennas , which would have to cover tens of square kilometers . Meanwhile terretrial solar energy , including wel-

come applications of it for domestic space conditioning and water heating , enjoys for the time some reasonable exploration : $12 million in Federal funds in the fiscal year 1974 .

In assessing the available options for generating electric power a corrosive and ill-constructed debate has developed between some vocal advocates and critics of fossil fuels and nuclear fuels . The costs of generating electric power have been rising more sharply than the general price index for two reasons : the dramatically increasing cost of nuclear reactors and the need to use low-sulfur fuels in conventional power plants (or to add suilfur-recovery equipment ). Except where low-sulfur coal is plentiful and cheap , nuclear electricity now tends to be cheaper than fossil-fuel electricity . Moreover , the disparity in price will probably increase if air-quality strandars force more restictions on fossilfuel plants and as clean fossil fuel becomes steadily more expensive.

Several issues enter the discussion , some of them spurious . The clandestine and irresponsible use of nuclear-weapons material is quite unikely to be pretented by this country’s refraining from installing nuclear -power reactors . The core issues is environmental : Which type of power plant is actually , or potentially , more hazardous ? It is my opinion that the environmental and epidemiological evidence stongly favors nuclear-power plants . The Atomic Energy Commission has spent more than $1 billion exploring the health and other environmental problems of nuclear energy . Although its record is not perfect and more remains to be done , a huge amount of information has been made public . The nuclear hazards are fairly well recognized and widely advertised . Principally they are associated with uranium mining and processing , whith long-term waste disposal and with accidents .

PROVED WORLD RESERVES OF CRUDE OIL total 562 billion barrels , distributed geographically as snown here , More than half of the proved reserve is consentrated in five Middle East states . The U.S.S.R. and Chins together possess about 10 percent of the total . The entire Western Hemisphere hass 13 percent . The estimate for the U.S. includes 10 billion barrels from the Horth Slope of Alaska . The National Petroleum Couneil estimated that at the end of 1970 some 385 billion barrels of oil remained to be found on U.S. territory or immediately offshore . This in turn was believed to represent about half all the oil ultimmately discoverable . For the worl as a whole N.P.C. estimates that proved reserves can total world consumption of energy between 1975 and 1990 , equivalent to some 1,200 billion barrels , is not so alarming as might otherwise appear . In fact , naturel cruyde oil will probably be supplyng at least 60 percent of the world’s total energy demand even in 1990.

Conversely , the Department of the Iterior , which has cognizance over coal and its technology , has spent hardly anything on the general environmental and epidemiological hazards of burning coal , leaving the problem largely to the Department of Health , Education , and Welfare and the Environmental Protection Agency . Thus the hazards of fossil fuels have been little stidied or publicized . The data that do exist show that the total social coast of generating energy with fossil fuels has vastily exceeded the coast associated with nuclear fuels per unit of energy , at least with the environmental and work standards that applied through the 1960’s.

For example ; Lester Lave and Eugene

Seskin of Carnegie-Mellon University and Thomas A. Hodgson of thez Cornell Medical College present data impying that the pre-1968 health cost to New Uorkers from unrestricted coal burning in power plants was several thousand deaths per year , plus uncounted non-fatal disabilities of varying severity . Some 50,000 American coal miners are currently disabled with black-lung disease . To these social costs must be added the despoliation of by strip-mining .

These social costs , which appear to be more than 100 times higher than the equivalent nuclear costs per unit of energy , will no doubt be reduced as environmental standards rise , but the cost of putting fossil fuels on an even environmental foouthing with nuclear fuels seems prohibitive . Meanwhhile debate has consentrated on the more publicized nuclear hazards and has led indirectily to lowered air quality as a resuit of the construction or retention of fossil-fueled plants . We see here a clear case of unbalanced debate and consequent faulty decisions arising from an initial imbalance in available information . When the public is presented with a balanced picture of the consequences of burning fossil fuels , I feel sure there will be an accelerated movement toward nuclear power and much more caution about relaxing environmental standards during energy shortages .

We now pass to the next level in our hierarchical assessment , the allocation of primary energy resources among users (see upper illustration on page 27 ). The electric-utility industry and transportation each take about 25 percent of the nation’s fuel supply ; another 20 percent is required for space heating and 30 percent is consumed by industry (which also takes about 40 percent of the electric power generated) . Here at the level of dividing up the national energy budget it is again fair to ask whether the relative effort to develop better options matvhes the relative needs .

U.S. RESERVES OF COAL OIL SHARE , URANIUM vastly exceed the world’s proved reserves of crude oil , as depicted to the same scale on the opposite page . The U.S. coal resource of 1,600 billion tons is defined as half of the coal estimated to be present in beds as thin as 14 inches at depths of up to 4,000 feet . About 10 percent , or 150 billion tons n exists in beds comparable in thickness and depth to those being mined today . The principal deposit of oil shale is in the Green River Formation in Colorago , Utah and Wyoming . Some 55 billion barrels of shale oil are readily recorerable in seams more than 30 feet thick containing more than 30 gallons of oil per ton . The reserves of uranium are computed od the basis of use in present-daty reactors . When breeder reactors are available , the reserve will become essentially limitless . Fuel for fusion , if it ever becoms practical , is likewise limitless . With an enormous effort the U.S. might reduce its energy consumption 10 to 15 percent below the figure represented by the bottom baz.

Again the answer is no and coal once more serves as a good example . Fossil fuels , in spite of their drawbacks , will be needed for many years , not only for the generation of electric power but also for transportation , for home heating , for industrial purposes and so on . Coal , together with the oil shale of western Colorado and the tar sands of western Canada , is a unique North American reserve of fossil fuels . In a period of ever increasing prices and ever descreasing security the two are the only resources capable of replacing imported fuels until better and more nearly inexhaustible resources can be rationally developed . The U.S. Geological Survey estimates that the U.S. possesses 1,6 trillion tons of

recoverable coal in bends at least 14 inches thick , lying no deeper than 4,000 feet . The total is equivalent to 500 times the total U.S. energy consumption last year and more than 20 times the energy the U.S. will consume between now and 1990 ( see illustration on preceding page ). Of course, only a fraction of the coal reserve , perhaps no more than a third , is reasonably recoverable with existing technology at acceptable coast .

At present , however , coal provides only 18 percent of the nation’s energy needs , a fraction that has dropped with time . (In 1900 coal supplied 70 percent of the nation’s energy , and as recently as 1950 it supplied 70 percent of the nation’s energy , and as recently as 1950 it supplied 36 percent ) . Most present modes of coal extraction and use have been socially , environmentally and epidemiologically damaging . In this respect the technology of coal Languishes . Oil shale may be an even worse environmental problem , but these and other difficulties are has the will to demand correction .

Coal and oil shale (perhaps tar sands too , with the appropriate consideration of Canadien interests ) now appear in their proper light : as raw materials for synthetic-fuel industry that can limit economic and political threats from abrouad . The domestic cost of producing low-sulfur crude oil and deliverring it to the East Coast of the U.S. has been about $3,75 per barrel (42 gallons) until recently , but has risen to just above $5 . Until last fall approximately the $3,75 price was charged by overseas suppliers , mainly through the operation of the Organization of Petroleum Exporting Countries (OPEC) , even though the actuel cost of producing and shipping crude oil from the Middle East is only a fraction of that figure .

With the recent outbreak of war in the Middle East the Arab states raised prices substantially , and then several of them cut off supplies to the U.S. Saudi Arabia cut its total exports 20 percent and raised price of recoup ; Libya raised the posted price of her product from $4,604 to $8,925 a barrel. Such prices , of course , can scarcely be maintained under normal conditions . Nevertheless , withir the next 10 years the U.S. can expect to be paying $8 or more per barrel (in 1973 dollars) for imported crude oil. Even if the price were to rise no higher , the annual U.S. bill for foreigh oil in 1985 could reach $40 billion , if imports rise to the 15 millions barrels per day given in some estimates (see illustration on page 22 ).

Even worse is the threat of eternal political blackmail , which can only be met with determined action by the U.S. One such possibility is establishment of a substantial synthetic-fuel indystry . Between now and the early 1980’s there would be enough time to develop environmentally acceptable methods for producing oil from coal , and perhaps from oil shale as well , at less than $7 a barrel . At the same time programs now under study will probably lead to the production of clean synthetic naturel gas from coal at , say , $1,20 per 1,000 cubic fest , equivalent in energy cost to petroleum at $7 a barrel.

NUCLEAR REATORS

ASSESSMENT MOBILES display in simple , easily grasped from the various technical options available for doing a specific job or reaching a specific goal . Such mobiles are best constructed from the bottom up . A mobile for energy policy might be ""assembled" , as shown here , by cousidering first the devices available or potentially available for producing power from nuclear reactions . Lightwater reactors have been generating commercial power for 15 years ; the first high-temperature gas-cooled reactor is nearing completion . Both are simple converters , that is , they consume the rare uronium isotope U-235 . Breeders , now under development , will produce more fissionable material than they consume . The U.S. has budgeted $320 millions this fiscal year for development and construction of a liquid-metal fast-breeer demonstration plant . The gas-cooled fast breeder , on the other hand , will receive only technological feasibiluty of fusion reactors the U.S. will spend $80 million this fiscal year. Conrolled fusion is unlikely to provide significant amounts of electric power before the end of the century.

ELECTRIC-POWER GENERATION

NEXT STEP IN ASSESSMENT leads to a larger mobile that includes sources of energy nesides nuclear materials . The actual assessment considers the availability of the source , methods for exploiting it and cost . Tides and winds are readily shown to hold little promise . Geothermal and solar energy are potentially unlimited sources but the technology for exploiting them is rudimentary .

The implementation of such a strategy would be neither cheap nor simple , even if it is a good option . One can ask , "How much syncrude is enough ? " and thereby

raise a host of other qustions . To build the capacity needded to produce five million barrels per day (perhaps a third of the projected 1985 imports ) would cost about $40 billion . Although that is no more the U.S. spent in the 1960’s on space ventures , its impact on the ecnomy (particularly the construction industry) will be vastly different . Many difficult questions will have to be answered . What will be the impact on the engineering and skilled-labor market ? How will other patterns of investment (investment in housing for example ) be affected ? What will be the impact on the coal-mining industry ? On water resources ? What are the alternate strategies ? At $7 per barred how much more petroleum can be produced in the U.S. and its sea-bottom surround ? More than 80 percent of the original U.S. petroleum reserve is still in the ground , and more is available with increased effort , but finding and extracting a substantially increased fraction would be very difficult .

International impacts are no less complex . Whether an increased U.S. production capacity would force OPEC prices to remain below $7 per barrel is hard to say , because the U.S. represents only a fraction of the world market . On the other hand , OPEC is not a monolithic structure , and temptation for one OPEC country to abandon the consortium would be great. If that were sure to happen , the U.S. syncrude industry would have to have been buite to stand largely idle . Underpriced by Arabianoil , it would be an economic and political weapon designed by Federal policy not be used , in the same sense that the Department of Defense builds weapons systems not to be used . Other in ternational questions relate to such maters as whether Western Europe and Japan will remain dependent on the Arab states , will turn to the U.S.S.R. (which is belieted to be proved in) , or will turn even more to nuclear power . Questions such as these , which are difficult to frame , let alone answer , make the energy problem what it is .

Even if the U.S. does not elect to facilities , coal-extraction technologies call for major improvement . It seems feasible to develop a fully automatic techology for mining coal underground . Where strip-mining remains the method of choice , the land can be properly restored ; not a technological one . In many of the empty regions where coal is strip-mined land sells for not more than $200 per acre , expert where coal is present . To reclaim the land properly may cost $5,000 êr acre in Applachia and perhaps $10,000 or more per acre in some Western states , because of the arid climate and the need for long-term care . In contrast , the value of the coal in a two-foot seam in Applachia may be $40,000 per acre and that in a 50-foot seam in the West may be $1 million per acre . Clearly the reclamation costs are small compared with the sale price of the coal but large compared with the normal sale price of the land . A social decision , one not based entirely on microeconomics ; must be made on the value of the land to the land to the society as a whole .

The preceding assessment applics only to the next 50 or 100 years , certainsly not longer . It would be compounding tragedy to convert any large fraction of the domestic coal reserves to liquide or gascous fuels when coal hydrocarbons are so much valuable as chemical raw materials . Eventually , as the U.S. and the world switch to energy technologies based on virtually inexhaustible resources-fission , fusion and solar power-coal will no longer be needed as a major fuel source .

I have dwelt on the coal question because it is an excellent example of issues that have deep roots both on technology and in society and that cannot be resolved without serious and simultaneous attention to the consequence of various options . I shall discuss only brieffy other issues associated with the allocation of primary energy resources . The U.S. is currently spending about $1,5 billion a year for research and development on new energy options . The total is only about 1,5 percent of the sum that the energy "industry" contributes directly to the graoss national product and is thus well below the average research and development expenditure in other technological sectors of the economy . The small scale of the budget for energy research and development is a strong clue to what has gone wrong . Of the $1,5 billion more than half goes toward the provision of electric power , where the options are the best order . An impalance arises not because electric-power developments receive too much attention but because other areas have received too little .

We now move to the highest level in this hierarchical assessment of energy : energy provision v.energy utilization and conservation ( see lower illustration above ). All the energy provided (the prodigious sum of 1,9x 10 B.t.u. per day for the U.S. , or 11 kilowatts continuously for the every person ) goes some-where , and its rational use is only now receiving appreciable attention . The efficiency with which less than 5 percent for the ordinary incandescent lamp to perhaps 75 percent for a well-maintained home furnace . The automobile engine (particularly since the installation of emissio controls ) has an effeciency of less than 20 percent . Modern fossil-fuel power plants are more than twice as efficient . On the average probably less than 35 percent of all the B.t.u.’s consumed end up as comfort heat , useful work or visible light . Low as the figure is , it has probably quadrupled since 1900 . Up to the present time the allotment of the funds for developing more efficient energy converters has been paltry : perhaps a few percent of the total $1,5 billion budget for energy research and development .

ENERGY PROVISION

ALLOCATION OF PRIMARY ENERGY RESOURCES is considered at the next higher level of assessment . Generation of electric power , tranportation , industry and commercial and domestic consumers take roughly equal shares . In terms of and use the electric energy is divided between industrial , commercial and domestic use , whih little for transportation .

ENERGY

HIGHEST TIER IN MOBILE balances energy provision with energy utilization and conservation . The U.S. neglected the right of the mobile until the energy crisis arose .

The imbalance is beginning to be coreted . For several years a few Federal

organizations have quietly and penuriously been studying how energy might be better utilized : the Ntional Bureau of Standards , the Office of Emergency Preparedness and the Oak Ridge National Lboratory . Stimulated by real fuel shortages , their concern has become popular , reinforced by the enthusiasm of the environmentalists and conservatioists . An Office of Energy Conservation was established in the year , with an annual budget of $6 million.

Some energy-conserving and dollar-saving options are straightforward , easy to apply and have now received attention : lower automobile speed limits , year-round Daylight Saving Time , a reduction in "cosmetic" lighting , lowered thermostats and so on . A less well-kown energy -saving option is the use radial tires , which can reduce gasoline consumption 5 to 10 percent (because of reduuced friction between the tire and the road ). Other options are easy to envision but more difficult to adopt : lighter automobiles , for example , and commercial buildings designed to achieve comfort with minimum energy consumption .

The study utilization has languished for simple reasons . Until now energy has been so reasons . Until now energy has been so plentiful and so cheap that there has been little incentive for people to be frugal . It has not been easy for the individual to perceive that his bargain in energy entailed large costs to the society as a whole . And even when the society as a whole . And even when the fact is pointed out to him , the individual rightly sees that any personal sacrifice he might make has only a minuscule effect in ameliorating an environmental problem . The second big reason for the neglect of energy conservation is that industry is richly rewarded for selling energy and energy-consuming devices .

The various assessment mobiles I have discussed so far can be assembled into one large mobile that includes all the options laid out hierarchically (see illustration on these two pages ) . In this arrangement one can see that utilization and conservation , on the right half of the mobile , merits as much attention and effort as all the options dangling in five tiers on the left half of the mobile . Yet one small line at the bottow left , the liquid-metal breeder reactor , represents an option that receive $320 million in Federal and private development funds this year : 20 percent of the entire national budget devoted to energy options . What the mobile dramatize is an embarrassment of blank space , where options are that they have received little attention .

Several suggestions for ameliorating future energy difficulties have appeared in this discussion , coming mainly from reffection on new technical options , on conservation methods and on international economic relations . We can see several other strategies being implemented in some measure today . One approch involves a modified laisser faire , leaving parts of the problem to be solved in the marketplace ; with increasing scarcity rising prices will bring supply and demand into some kind of balance and less energy will be wasted . To be sure , energy prices have been too low , but overreliance on this approach would work a hardship on many people .

Another strategy is to expand domestic exploration and production of petroleum fuels .The rocks of the continental shelves seem quite similar to the typical sedimentary rocks of the U.S. and Canada , so that are believed to contain rich petroleum deposits . It is extremely risky to assume , however , that the offshore reserve is adequate to meet an unchecked demand . It should be noted that the much-debated Trans-Alaska pipeline will at its peak carry only two million barrels per day . That amount will not provide much relief from a predicted import requirement of 11 million barrels per day in 1980 . Even where an oil field is known to exist it takes from five to seven years to bringt it into production . And on the continental shelf off the U.S. eastern seaboard the first hole remains to be drilled ; the existence of oil is simply conjectured .

Another strategy that is currently prominent is application of regulatory and other measures to limit energy use : taxes , allocations , rationing and outright bans . The strategy has the advantage that it can be designed for prompt effect . It is the only approach with this feature , and it is therefore invoked in this winter of fuel emergency . We should be aware , however , that such measures generally represent the failure of past policy (or the lack of any policy at all ) and that the consequences of stringent regulatory actions are hard to predict . For example , the 1971-1973 controls to combat inflation were a substantial failure . The National Energy Emergency Act sent to Congress on November 21 of last year relies heavily on emergency controls , and it will have little to do with rational long-term energy policy . On the other hand , regulations designed for long-term constructive effect have their place in a coheren energy policy .

ELECTRICITY

COMPLETED ENERGY MOBILE in grossly unbalanced . The attention given to energy provision far outweighs the attention to utilization and conservation . For projects concerned with energy provision the U.S. is currently spending some $1,5 billion per year .

One may hope that from some combination of all these possibilities a better energy program will emerge , involving the Federal Covernment , state governments , industry and other sectors . Clearly the days are gone when parts of the problem could be denied or ignored , as for example when energy utilization were

iggnored by the President’s office until the middle of last year.

To chose any particular combination of energy strategies without much thought and analysis would be to compound the difficulties . An adequate national energy policy must of course rise from basic decisions made by or on behalf of the country as a whole , decisisons concernng national security , costs , the present and future quality of life and so on. When those decisions have been made , a planner can set down tentative desiderata-not yet firm decisions -about operational strategies . They would include the degree of dependence on foreign oil supplies , environmental standards and the balance between exploitation and conservation of natural resources . Only then can planners arrive at detailed strategies to achieve selected goals : the technology of nuclear power , new types of automobiles and so on . The proccess is obviously not straightforward ; decisions at each level affect conditions both above and below .

These new intellectual and technological thrusts have their organizational counterparts , and the arrrangements for dealing with energy , at least at the Federal level , are being swept away . In general the old ones were not impressive . Federal energy policy consisted mainly of a stong nuclear program (coming from a strong Congressional Joint Committee on Atomic Energy , and a legacy from earlier military programs) , a fovorable attitude toward petroleum companies (direct U.S. tax credits for foreign royalty payments , depletion allowances and so on ), the benign neglect of coal and several fairly successful regional programs (the Tennessee Valley Authority , for example ) . Technical activities were mainly in the Atomic Energy Commission ; some were in the Department of the interior and some were scattered in other agencies . Regulatory commissions were only party effective .
< For example , the Federal Power Commission set natural-gas prices so low as to simultaneously destroy exploration initiatives and create an insatiable demand) .

All of this now changing rapidly . It is clear that more central coordination is required than the fragmented energy groups have managed heretofore . The optimum degree of coordination , however , is an important question . Too little can accomplish little ;
too much can throw the operations of agencies and groups with legitimate energy interest into disarray . At least there is need for the coordination of policy , and Governor John A. Love’s former Energy Policy Office seemed to be doing that .

In jettisoning the Love office , the President sought a two-level approach . At the level of preparing technological options he proposed an Energy Research and Development Administration . This was to combine the energy-related activities of the various Federal agencies . The chairman of the Atomic Energy Commission , at the Presiden’s request , came up with a $10 billion , five-year program for the development of alternative energy technologies .
These proposed expenditures include many projects already planned . At the policy and executive decision level the President proposed a Federal Energy Administration , to be headed by William E. Simon . Arrangements the development of technological options , while giving the executive group freedom to pick and choose and to transcend narrow technical arguments . Congressional bills to implement these measures were introduced in the Congress by Senator Henry M. Jackson and Representative Chet Holifield .

Also at both the technological and policy levels Senator Jackson’s own bill (S.1283) aims at each of these technological and policy functions ; through the allocation of $800 million per year of new funds for non-nuclear research , coordinating activities of the AEC , the Department of the Interior , the National Aeronautics and Space Administration and the National Science Foundation .

In the House , meanwhile , Representative Mike McCôrmac and his Subcommittee on Energy have considered not only a Department of Energy (not far from the President’s ERDA-FEA proposal ) but also the establishment of an intervated Department of Science ad Technology . That is a still broader concept , requiring more public debate .

Whatever the administrative outcome , I personally favor an authority that will decide about rationing (I favorthat too ) and other short-term measures . Simultaneously such an authority should make a creful assessment of the longterm possibilities before committing the nation to sorme very expensive acts of commission or ommission . The technology of energy conservation , the development (but not yet massive deployment ) of new fuel from coal and oil shale , the full environmental costs of various fuel options all deserve careful study - not forgetting the important international repercussions of a change in the fuel-consuming habits of the U.S.

The role of energy is too pervasive and the interest of the participants are too manifold for any expectation that there will be a simple consensus . It can nonetheless be hoped that the national debate will give rise to a better common understanding of the problem . Then some steps can be takem in the direction of probable improvement , and from that new vantage the view ahead will be a little clearer than before .

ENERGY

About a fifth of this entire sum is devoted to work on a single mechanism , the liquid-metal fast breeder , which is represented by a single box at the extreme bottom of the mobile .