Shaping Energy Technology Transition

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Executive Summary A transition of the U.S. energy economy from hydrocarbon dependence to one that is based on sustainable energy technologies will strengthen the U.S. economy, enhance national security, and minimize the environmental impact of energy consumption. Failure to make this transition could be devastating to the future security of the United States. Effective public policies to implement this transition must be incorporated into a comprehensive National Energy Plan that fosters innovation in sustainable energy generation, distribution, and energy conservation. Technological innovation, and supporting public policies, will entail a two-pronged approach – implementing conservation policies and substitution of sustainable energy sources in place of conventional hydrocarbon energy sources. Several sustainable energy sources are well developed technologically (e.g. wind, solar, geothermal) but will require supportive policies to become economically competitive with hydrocarbon fuels. Other sustainable energy sources (e.g. hydrogen, wave, tidal, ocean current) will require aggressive policies to support further development and implementation. Reduction in energy consumption may be realized through policies that support conservation and efficiency, infrastructure technologies such as smart grid and distributed generation, energy storage, and renewable energy heating/cooling systems. Under almost all transition scenarios, hydrocarbon fuels will continue to be essential in the near term. As conventional fossil fuels (oil, gas, coal) become scarcer, development of other hydrocarbon sources, such as oil shale or tar sands, may become economically feasible. Regardless of the source of hydrocarbon-based energy, technologies such as carbon sequestration must be implemented in concert with the transition to these sources in order to abate their adverse environmental effects. Two case studies in this report—biofuels and cold fusion—demonstrate that current energy policymaking has not always led to an optimal solution for maximum public welfare benefit. The biofuels case is viewed by many as an example of energy policy that did not necessarily take into account all relevant economic and environmental factors, such as water supply, soil erosion, and increased use of fertilizers and pesticides. Cold fusion represents a case in which negative public policies, despite a continuing possibility that the phenomenon may eventually be found to be “real,” may not necessarily serve the long-term public interest. Independent interviews of more than two dozen energy experts from industry, academia, and government agencies confirmed the findings of background research and presentations by outside speakers: 1) energy policy is at least as important as any other policy area; 2) the United States should transition away from hydrocarbon-based energy sources; 3) continued dependence on hydrocarbons may threaten national security and xxi

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