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July 2001
Vol. 10, No. 07,
pp 57–58, 60.
Regulations and You
The apparent energy shortage

Alternative fuel technologies can be used successfully to avoid supply concerns.

figure 1
Figure 1. Resources used in the production of electrical energy in the U.S. (based on 1998 total kilowatt-hours).
The highly publicized California energy crisis and volatile gasoline prices have increased consumers’ awareness of their dependence on the petroleum industry. Currently, over 90% of the U.S. electricity supply comes from the combustion of fossil fuels (i.e., coal, oil, and natural gas) and nuclear power generation (see Figure 1). While the U.S. coal reserve is estimated at 290 billion tons (enough to last another 230 years at current production levels), there is an increased concern about the adverse environmental effects associated with its combustion, namely SOx, NOx, and CO2 emissions. Crude oil is less important for electrical energy production; however, it is used in the manufacture of 97% of all transportation fuels.

Top officials at the American Petroleum Institute have stated that the numerous government policies regarding the discovery, production, refining, and transport of energy are superfluous and bear primary responsibility for our growing reliance on foreign imports (1). Indeed, the current status of the petroleum industry shows a complete transformation from the 1950s, when the United States produced half of the world’s oil supply; last year, 56.6% of the total crude used in the U.S. was imported (2). This dependence on imported petroleum has a significant effect on the taxpayer. It is estimated that the military spends $1 billion to $70 billion per year to protect the oil shipping lanes leading from the Persian Gulf (3).

Government Regulations
The EPA has set rigid guidelines for both the petroleum refining industry and the emissions that are allowed from the combustion of its final products. Since 1970, the most significant environmental statutes affecting refineries have been geared toward altering the product formulation to reduce end-user emissions. Without question, the Clean Air Act of 1970 and the amendment of 1990 have had the most significant impact on the petroleum refining industry. These statutes authorize the EPA to set National Ambient Air Quality Standards for sulfur dioxide, nitrous oxides, carbon monoxide, ozone, nonmethane hydrocarbons, opacity, and the amount of total suspended particulates in the ambient air (2). To maintain these rigorous standards, major capital investments continue to be made by refineries as well as industries using their products (e.g., automobile manufacturers).

The petroleum industry must also follow rigorous EPA regulations concerning waste disposal that include the Resource Conservation and Recovery Act, the Clean Water Act, the Safe Drinking Water Act, the Comprehensive Environmental Response Compensation and Liability Act, the Emergency Planning and Community Right-to-Know Act, the 1990 Oil Pollution Act and Spill Prevention Control/Countermeasure Plans, and the various other state statutes. Hence, it is not difficult to ascertain that petroleum refining is currently the most heavily regulated of all industries.

Current Renewable Uses
Earlier this year, the EPA waived enforcement actions against power plants and small diesel generators that exceeded federal pollution levels. The agency has also relaxed some environmental rules that would normally restrict the use of natural resources in order to control emissions. Although these measures would temporarily ease the energy shortage, our nation would have to “settle” for greater environmental pollution simply to build more petroleum-based power plants. Further, with the stringent environmental regulations that are going to be enforced during the next few decades, it is becoming more apparent that our energy supply must be diversified with renewable resources that are largely underutilized at present.

Hydropower is the most heavily used of the renewable options; in fact, more power is generated from water in the United States than from either petroleum or natural gas sources (see Figure 1 at top of page). The largest growth period for this technology came between 1921 and 1940, after which time hydropower supplied 40% of the power generated in the United States. It is now estimated that 36 states have a significant source of undeveloped hydropower potential (4). Although this neglect may be attributed to environmental impacts and relatively high initial investment costs, associated benefits such as low operating costs and the absence of pollutant emissions are not easily matched.

Table 1: Comparative cost of various electricity-generating resourcesa.
Resource Cost (cents/kWh)
Wind (with PTC) 3.3–5.3
Natural Gas 3.9–4.4
Wind (without PTC) 4.0–6.0
Coal 4.8–5.5
Geothermal 5.0–8.0b
Hydro 5.1–11.3
Biomass 5.8–11.6
Nuclear 11.1–14.5
Solar 12.0–20.0c
(a) www.awea.org/pubs/factsheets/cost.pdf
(b) www.eren.doe.gov/geothermal/geopowerplants.html
(c) www.eren.doe.gov/pv/program.html
Table 1 compares the current costs associated with generating power from various renewable resources to the most inexpensive traditional methods (i.e., natural gas and coal combustion). A federal wind energy Production Tax Credit (PTC) has resulted in a rapid expansion of wind technology in recent years, and this development will probably continue until the extended deadline of December 31, 2001, has expired. Although California gave birth to the modern U.S. wind industry, studies indicate that at least 16 states have a greater wind potential. Last year, the European Wind Energy Association released a study that projected that 10% of the global electricity supply will be met by wind power by the year 2020. However, it remains to be seen whether the aggressive series of global developmental targets and government policies can be finalized before then.

Geothermal power plants produce electricity by withdrawing hot water or steam from heat reservoirs deep within the Earth. Since no fossil fuels are burned, geopower represents another clean alternative; it is estimated that a plant generating geothermal electricity will yield 1000 to 2000 times fewer carbon dioxide emissions than a fossil fuel plant of comparable size (5). The Department of Energy (DOE) created the National Renewable Energy Laboratory to focus on lowering the delivered cost of electricity that has been generated geothermally. Currently, all geothermal power comes from hot water withdrawal; technology is now being developed to widen the supply through extraction of heat contained in dry rocks deep below the Earth’s surface.

Although solar energy is attractive from a zero-emission standpoint, a major obstacle still preventing widespread use is the associated cost. Research continues in the area of lowering the price of conversion cells as well as increasing their lifetimes and efficiencies. On the basis of progress made through research initiatives, the DOE has recently proposed an electrical generation cost of less than $0.06/kWh for solar power by the year 2030.

Ocean Thermal Energy Conversion (OTEC) also taps solar energy. This technique uses the ocean’s natural thermal gradient to drive a power-producing turbine. As long as the temperature gradient between the warm surface water and the cold deep water is greater than 20 °C, an OTEC system can generate a significant amount of power using various heat-exchanger systems (6). It is proposed that in the next decade, OTEC could be competitive in four world markets via locations ranging from Hawaiian and other Pacific islands to floating plants that could transmit their electricity to shore by submarine cables (7).

The DOE also supports research and development efforts related to two novel technologies: hydrogen storage and high-temperature superconductivity. Hydrogen-based energy is an extremely attractive option because hydrogen has a heat of combustion that is 2–3 times greater than that of other fuels, and the only by-product of its combustion is water vapor. Researchers are investigating the possibility of using superconductivity to replace the traditional modes of electrical transmission on a scale viable for electrical utilities. These initiatives exploit the resistance-free electron flow exhibited in superconducting media. However, both technologies are still hindered by their associated costs and technological constraints.

Biomass, or organic matter such as wood, crops, or even municipal waste, currently contributes about 4% toward generating the total U.S. energy supply. By combustion of this organic matter, or capturing methane from sources such as landfills and agricultural manure lagoons, an inexhaustible source of energy can be produced with fewer emissions than result from petroleum combustion. The use of waste products that are currently becoming a storage problem yields an additional benefit. However, although biomass combustion would not result in quantifiable SOx emissions, it would still yield significant amounts of NOx, CO2, and CO, depending on combustion efficiency. Further, if nonorganic crops were used as a stock source, residues from pesticides or herbicides could be released into the atmosphere. However, the EPA has recently demonstrated that fuel cells can convert methane from sources such as landfills into electricity without the need for pyrolysis (8). Clearly, this is the direction that this type of technology must follow in order to maintain our environmental objectives.

Supply Solutions
Although some industries suggest that the U.S. energy shortage may be resolved simply by constructing more natural gas and petroleum facilities, this alone would hardly represent an environmentally responsible solution. In contrast to fossil fuels, alternative energy sources are constantly replenished. In addition, they offer a clear benefit in that little or no pollution is generated in converting them to electricity. With so many available options for our nation’s energy supply, it is clear that any supposed “energy crisis” could easily be averted through the careful use of our natural resources.


  1. The American Petroleum Institute: www.api.org.
  2. Profile of the Petroleum Refining Industry; EPA Office of Compliance: Washington, DC, 1995.
  3. Koplow, D. Federal Energy Subsidies: Energy, Environmental, and Fiscal Impacts; Alliance to Save Energy: Washington, DC, 1993.
  4. A list of undeveloped hydropower potential by state: http://hydropower.inel.gov/facts/potentl.htm.
  5. Environmental and Economic Impacts of Geothermal Energy; U.S. Department of Energy, Geothermal Energy Program. www.eren.doe.gov/geothermal/geoimpacts.html.
  6. Ocean Thermal Energy Conversion, National Renewable Energy Laboratory (Introduction). www.nrel.gov/otec/what.html.
  7. Ocean Thermal Energy Conversion, National Renewable Energy Laboratory (Markets). www.nrel.gov/otec/markets.html.
  8. Trocciola, J. C.; Healy, H. C. Demonstration of Fuel Cells To Recover Energy from an Anaerobic Digester Gas—Phase I. Conceptual Design, Preliminary Cost, and Evaluation Study; EPA Research and Development: Washington, DC, 1995.

Bradley D. Fahlman is the director of advanced laboratories in the Chemistry Department at the University of California, Irvine. Send your comments or questions regarding this article to tcaw@acs.org or the Editorial Office 1155 16th St N.W., Washington, DC 20036.

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