Old Policies Make Shift From Foreign Oil Tough

Still, some argue that there's no single solution, and ethanol could play a partial role. But at the moment, Suppes points out, it's economically viable only because the federal government subsidizes its production to the tune of about 50 cents per gallon. And then other governmental agencies tax it, once again tilting the playing field in favor of foreign oil, Suppes says.

In their report to the American Institute of Chemical Engineers, Suppes and Storvick pointed out that industry is also a major roadblock to finding alternatives to foreign oil. Alternatives are out there, they believe, but the companies that could bring them to market aren't all that interested.

"When I first got into this, my father-in-law goes, 'Well, if it's such a good idea, why aren't the oil companies doing it?'" Suppes says. "He's an educated man, so I looked into that.

"When an oil company has 10 years of reserves in the ground, it doesn't make any sense at all for them to spend billions of dollars today to produce [synthetic] oil they don't need," he says. "So they would be the last ones to invest in this."

Profit Patience

What is needed, Suppes argues, is the kind of alliance between government and industry that got the development of Canada's huge reserves of tar sands underway. Back in the 1970s, long-term investments were made without the expectation of immediate paybacks, he says.

Today, all these years later, Canada gets about one-third of its oil from the tar sands buried in northern Alberta, much of which comes to the United States. Had investors expected to get their money back quickly, as is the case in today's risky alternative energy market, that never would have happened, Suppes says.

That has led some experts to push for widespread development of the resource, which could make Alberta the Saudi Arabia of tar sands. But that's no painless solution.

Tar sands are essentially just what they sound like. A thick, sticky goo trapped in rock and sand below the ground. It takes strip mines to get at the goo, called bitumen, which must then be heated with steam and hot water, and then processed with caustic chemicals. It can be an environmental nightmare.

And all that takes a lot of energy, leaving the end product very close to being a net loser of energy, not a producer.

Meanwhile, the nation pins its hopes on hydrogen, which could also be a net energy loser, and some miraculous breakthrough that will make our transition simple. There are some technologies on the horizon that could improve the picture, notably a new process for making oil from garbage, but it remains to be seen whether any of them will work on the kind of scale needed to fuel this very hungry nation.

The most likely scenario is very little will be done. A lot of chatter, but not much action.

"I have a feeling the country is going to continue to pay a very high price before we finally figure it out," Suppes says. "I just hope the price isn't extremely high."

Lee Dye’s column appears weekly on ABCNEWS.com. A former science writer for the Los Angeles Times, he now lives in Juneau, Alaska.

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