Written by William F. Pickard   

Last week, on the ides of March, the White House released a paper entitled “What You Need to Know About the Energy Security Trust”. This is an entity envisioned by the President but not yet created by the Congress, so its outlines are hazy. But, in brief, its concept involves placing in a Trust those revenues paid by “oil and gas companies” for exploitation privileges on public lands and waters. This Trust would support long term research for the promotion of such desirable developments as cheaper lighter fuel tanks for natural gas, advanced batteries for electric vehicles, cleaner biofuels, and breakthroughs on technologies such as fuel cells. Over a period of ten years, the Trust would receive and expend two billion dollars: that’s $200 million per year. This cash would presumably flow directly from the exploiters to the Trust’s coffers, would be off budget, and technically would not be incurring “extra costs”. The plan thus far sounds enchanting. But let’s probe more deeply *:o)

Is this new money in the sense that it comes from revenues not currently flowing along ordinary budgetary channels? If it is, where does it come from? Does it come from new exploitation schemes? Does it come from renegotiating leases? Does it come from coal mining and hydroelectric developments on Federal lands?

If it is not new money, if it is just relabelling, if it is just robbing Peter to pay Paul, then hypersensitive bleeding-hearts within the Electorate may suspect they are being buncoed. Money discreetly siphoned off from already cash-strapped activities would leave a lot of people feeling abused. For example, simply freezing the budgets for agricultural subsidies or disaster relief could yield tens of millions every year. On the other hand, money raised by closing tax loopholes that 99% of the Electorate never heard of could also yield the required cash. And maybe such draconic measures will be necessary. The point is that the Electorate unequivocally deserves to know UP FRONT who takes the hit!

The next doubt is more substantial. In 2011, the wholesale cost of oil, gas, and coal consumed in the United States ran in aggregate to about 760 billion dollars. That’s roughly 5% of the GDP. It is also roughly 3800-fold what the White House proposes that the Trust disburse. Likewise, 200 million is only a minuscule 0.026% of what we spend for fossil fuel.

It is a given that the Age of Fossil Fuel is now drawing swiftly to a close. Fossil fuel was a one time dowry graciously provided Mankind by its creator: and when it’s gone, it’s really, really gone. And, yes, nobody knows when the close will come. But a survey of seven different recent projections by scientific experts reveals that: optimistically, peak coal will occur around 2050; peak oil is occurring right around now; peak gas will occur around 2035; and extremely serious depletion of everything will occur by 2070. Energy is the sine qua non of our economy: without ample supplies, everything falls apart. If there is even a 10% probability that these projections might be correct, shouldn’t our government instead be increasing spending on energy research, development, and demonstration by more than a meager 0.026% of our fossil energy expenditures. The Electorate could, with some justification, regard this pittance as an insult.

Just this week the American Society of Civil Engineers came out with its quadrennial Report Card on America’s Infrastructure. The good news is that we got a D+. The bad news is that it would cost around 500 billion dollars a year from now until 2020 to make the sorely needed upgrades. By comparison, for redoing our energy infrastructure from fossil fuels to renewables, we might get by on only 300 billion a year (give or take a factor of two) from now until 2070.

But the real challenge is that, historically, a major switch in mankind’s fuel source has yet to occur in less than fifty years. So we’d best get America’s switch to renewables into kick-butt gear during this presidency. Barack Obama has a choice. Bite the bullet on energy and maybe rise to the heights of FDR. Or kick the can and end up being classed back in pack.


William F. Pickard is a Senior Professor at Washington University in Saint Louis, a professional engineer, a frequent contributor to refereed engineering and science journals, and an expert on sustainability and energy.