American Energy Security
Ken Nemeth: nemeth@sseb.org
Gary Garrett: garrett@sseb.org
The United States faces a liquid transportation fuels crisis and a dependency on foreign fuels that must be reduced in order for
the U.S. to become energy independent and energy secure. Oil is in increasingly short supply. Oil and derivative product prices
have soared to record levels over the recent past.
A national mission to achieve energy security and move toward liquid fuels independence could:
- reduce risk and lower oil prices and oil price volatility;
- facilitate an industrial boom, enhancing economic growth and creating millions of jobs;
- foster new technology;
- help eliminate the trade and budget deficits;
- ensure affordable energy for citizens;
- ensure strategic fuels for the military; and
- establish a reliable domestic energy base on which to rebuild U.S. industries to be globally competitive.
AES Phase 1
Phase I of the American Energy Security (AES) Study, begun by SSEB in 2005, developed a comprehensive plan for the United States to establish energy security and independence using domestic resources. The study focused on the production of alternative oil and liquid transportation fuels, including coal, biomass and oil shale. The plan also emphasized the need for improved domestic Enhanced Oil Recovery (EOR) programs using carbon dioxide injection and storage, increased voluntary transportation fuel efficiency and sensible energy conservation.
Some of the recommendations from the Phase I report are:
- Extend the $0.50/gallon alternative liquid fuels excise tax credit;
- Provide accelerated cost recovery to alternative fuel plant owners;
- Incentivize refining of alternative liquid fuels;
- Provide explicit Department of Energy (DOE) authority and appropriations for loan guarantees;
- Fund the Military Alternative Fuels Testing and Development Program;
- Authorize and fund military purchases of alternatives fuels under long-term contract;
- Eliminate the $10 million cap for tax exempt industrial development bonds;
- Provide regulatory streamlining for the production of alternative liquid fuels;
- Establish a self-sustaining government corporation to provide market risk insurance;
- Expand the Strategic Petroleum Reserve (SPR) Program to include alternative liquid fuels products;
- Provide incentives for existing ethanol plants to convert to coal; and
- Provide incentives for enhanced oil recovery and enhanced coalbed methane recovery using carbon dioxide captured from alternative fuel plants.
Several of these recommendations already have been put into place.
AES Phase 2
The purpose of Phase II is to explore and assess four energy and security related issues beyond those of liquid fuels, including:
- Energy Resources,
- Climate and Productive Uses of Carbon Dioxide,
- Electricity and
- Transportation.
