'Hard Facts: An Energy Primer' (New IER educational effort launched)

By Daniel Simmons -- April 30, 2012

Energy, the master resource, enables high living standards and promises future progress in virtually all areas of human betterment.

Energy heats our homes, lights the night, fuels our transportation, and powers our machines. Affordable energy improves economic efficiency and keeps the cost of goods and services down. All of us as consumers and as business people save money.

Low domestic energy prices create high-productivity jobs at home up. Energy made American great as a key input for a (relatively) free economy, and today’s home-grown energy boom can help keep America great.

Appreciated another way, energy plenty allows us to spend more time with our families and friends–and less time merely working to survive. Moreover, by making transportation less costly, affordable energy gives us greater freedom to live, work, and play how and where we want.

There are, however, a number of challenges to maintaining a sufficient supply of affordable energy. Seemingly every year there is a new energy bill in Congress that alleges to fix our energy problems. The flawed premises of these bills result in misplaced, repeated calls for a new national energy policy in place of greater reliance on free-market forces.

Energy policy would be greatly improved if policymakers took into account the actual energy landscape. Far too often, energy bills are based on incorrect assumptions, such as the notion that new, revolutionary technologies, such as affordable cellulosic ethanol, are just around the corner if only the federal government provides the energy industry sufficient mandates and subsidies. Time after time, experience has shown that the government cannot force new technologies to market.

Policymakers should take time to understand the facts about energy and the obstacles to making it affordable and reliable given its critical role in our lives and our economy. America is home to vast natural resources, but many of our energy policies are built on the notion that energy is scarce and becoming more scarce.

The reality is that we have more combined oil, coal, and natural gas resources than any other country on the planet. We have enough energy resources to provide reliable and affordable energy for decades, even centuries to come. The only real question is whether we will have access to our abundant energy resources, not whether sufficient resources exist.

What follows are many key facts , hard facts, that energy educators must stress to the citizenry, media, academics, and lawmakers. The fact list begins with fossil fuels, continues with renewables and nuclear energy, and then looks at energy efficiency and environmental issues. (For the full IER report, see here)

 Fossil Fuel Facts

• In 2011, the United States produced 23.0 trillion cubic feet of natural gas,1 making it the world’s largest natural gas producer. 2

• In 2011, the United States produced 5.67 million barrels of oil, making it the world’s third largest oil producer. 3

• Proved conventional oil reserves worldwide more than doubled from 642 billion barrels in 1980 to more than 1.3 trillion barrels in 2009. 4

• The United States is home to the richest oil shale deposits in the world—estimates are there are about 1 trillion barrels of recoverable oil in U.S. oil shale deposits, nearly four times that of Saudi Arabia’s proved oil reserves. 5

• The United States has 261 billion tons of coal in its proved coal reserves. These are the world’s largest coal reserves and over 27 percent of the world’s proved coal reserves. 6

• The United States produces nearly 1.1 billion short tons of coal a year, making it the world’s second largest coal producer.7 China produces over 3.5 billion short tons a year. 7

• The United States has 486 billion tons of coal in its demonstrated reserve base, enough domestic coal to use for the next 485 years at current rates of consumption. These estimates do not include Alaska’s coal resources, which according to government estimates, are larger than those in the lower 48 states. 8

• The federal government leases less than 3 percent of federal lands for oil and natural gas production—2.2 percent of federal offshore areas9 and less than 5.4 percent of federal onshore lands. 10

• The world could hold more than 700 quadrillion (700,000 trillion) cubic feet of methane hydrates—more energy than all other fossil fuels combined. 11

Renewables and Nuclear

• In 2011, wind power produced 1.2 percent of the energy used in the United States. 12

• In 2011, solar power produced 0.1 percent of the energy used in the United States. 13

• Total federal subsidies in fiscal year 2007 were $24.34 per megawatt hour for solar-generated electricity and $23.37 per megawatt hour for wind, compared with $1.59 for nuclear, $0.67 for hydroelectric power, $0.44 for conventional coal, and $0.25 for natural gas and petroleum liquids. 14 In fiscal year 2010, the subsidies were even higher. For solar power, they were $775.64 per megawatt hour, for wind $56.29, for nuclear $3.14, for hydroelectric power $0.82, for coal $0.64 and for natural gas and petroleum liquids $0.64. 15

• In 2011, hydroelectric power contributed 3.3 percent of the energy used in the United States and 7.9 percent of the electricity. 16

• Today, there are 104 nuclear reactors in the United States and construction began for all of these reactors prior to 1974. 17

Energy Efficiency and Environmental Indicators

• Since 1970, the six so-called “criteria pollutants” have declined by 63 percent, even though the generation of electricity from coal-fired plants has increased by over 180 percent, gross domestic product has increased by 204 percent, energy consumption has increased by 40 percent, and vehicle miles traveled have increased by 168 percent. 18

• Energy use per person in the United States fell 12 percent between 1979 and 2010 from 359 million BTUs to 317 million BTUs per person. 19

• Energy intensity—energy consumption per dollar of GDP—fell by 52 percent between 1973 and 2011. 20

• In 2010, China was responsible for 24 percent of global carbon dioxide (CO2) emissions. In comparison, the United States, the second largest emitter of carbon dioxide, emitted 17 percent of the global total.

• China’s CO2 emissions increased by 167 percent between 1999 and 2009, while CO2 emissions from the United States decreased by 4.4 percent over the same 10-year period. 21

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1 Energy Information Administration, Monthly Energy Review, Table 4.1, http://www.eia.gov/totalenergy/data/monthly/pdf/sec4_3. pdf

2 BP, Statistical Review of Energy 2011, p. 22, http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/ reports_and_publications/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_ report_2011.pdf.

3 Energy Information Administration, Monthly Energy Review, Table 3.1, http://www.eia.gov/totalenergy/data/monthly/pdf/sec3_3. pdf

4 Energy Information Administration, International Energy Statistics: Crude Oil Proved Reserves, http://tonto.eia.doe.gov/cfapps/ ipdbproject/iedindex3.cfm?tid=5&pid=57&aid=6&cid=regions&syid=1980&eyid=2010&unit=BB.

5 Task Force on Strategic Unconventional Fuels, Development of America’s Strategic Unconventional Fuels Resources—Initial Report to the President and the Congress of the United States (Sept. 2006), p. 5, http://www.fossil.energy.gov/programs/ reserves/npr/publications/sec369h_report_epact.pdf; US Geological Survey, Oil Shale and Nahcolite Resources of the Piceance Basin, Colorado p. 1, Oct. 2010, http://pubs.usgs.gov/dds/dds-069/dds-069-y/. The Task Force on Strategic Unconventional Fuels estimated that U.S. oil shale resources were 2.1 trillion barrels. In 2010, the USGS estimated that in-place resources in the Piceance Basin were 50 percent larger than previously estimated (1.5 trillion barrels versus 1.0 trillion barrels). The addition of these 0.5 trillion barrels makes U.S. in-place oil shale resources a total of 2.6 trillion barrels. Previous estimates put the total economically recoverable oil shale resources at 800 billion barrels. Assuming the same rate of recovery for these additional 0.5 trillion barrels brings the total recoverable resources to 982 billion barrels of oil resources.

6 Energy Information Administration, International Energy Statistics, http://www.eia.gov/cfapps/ipdbproject/IEDIndex3. cfm?tid=1&pid=7&aid=6

7 Energy Information Administration, International Energy Statistics-Coal-Production, http://www.eia.gov/cfapps/ipdbproject/ iedindex3.cfm?tid=1&pid=7&aid=1&cid=regions&syid=2000&eyid=2010&unit=TST.

8 Energy Information Administration, Annual Energy Review 2010, Table 4.11, http://www.eia.gov/totalenergy/data/annual/pdf/ sec4_23.pdf a U.S. Geological Survey, Alaska Coal Geology, Resources, and Coalbed Methane Potential, Nov. 2005, http:// pubs.usgs.gov/dds/dds-077/.

9 See Bureau of Ocean Energy Management, Regulation and Enforcement, Offshore Energy and Minerals Management, http://www.boemre.gov/offshore/. According to the administration’s website, the outer continental shelf is 1.76 billion acres (http://www.boemre.gov/ld/PDFs/GreenBook-LeasingDocument.pdf page 1) and only 38 million acres are leased (Department of Interior, Oil and Gas Lease Utilization – Onshore and Offshore, http://www.doi.gov/news/pressreleases/loader. cfm?csModule=security/getfile&pageid=239255 page 4). That is a mere 2.16% of the entire Outer Continental Shelf.

10 According to the Department of Interior, 38 million acres of onshore lands are leased for oil and natural gas production. See Table 3 in Department of Interior, Oil and Gas Lease Utilization – Onshore and Offshore, http://www.doi.gov/news/pressreleases/loader. cfm?csModule=security/getfile&pageid=239255 According to the Congressional Research Service, the federal government owns just over 650 million acres of land. See Appendix A. Congressional Research Service, Major Federal Land Management Agencies: Management of Our Nation’s Lands and Resources, May 15, 1995, http://www.ncseonline.org/nle/crsreports/natural/ nrgen-3.cfm. The federal government also controls an additional 58 million acres of federal mineral estate below privately owned surface estate. See Bureau of Land Management, Split Estate, http://www.blm.gov/pgdata/etc/medialib/blm/wo/MINERALS__ REALTY__AND_RESOURCE_PROTECTION_/bmps.Par.98100.File.dat/SplitEstate08finalWeb.pdf.

11 U.S. Geological Survey, Natural Gas Hydrates-Vast Resource, Uncertain Future, http://pubs.usgs.gov/fs/fs021-01/fs021-01. pdf and Department of Interior, Gas Hydrates on Alaska’s North Slope Hold One of Nation’s Largest Deposits of Technically Recoverable Natural Gas , Nov.12, 2008, http://www.doi.gov/archive/news/08_News_Releases/111208.html.

12 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/mer/pdf/pages/sec1_7.pdf

13 Id.

14 Energy Information Administration, Federal Financial Interventions and Subsidies in Energy Markets 2007- Chapter 5: Electricity Subsidies Per Unit of Production (April 2008), p. 106, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap5.pdf. See also Institute for Energy Research, Subsidizing American Energy: A Breakdown By Source, July 30, 2008, http://www. instituteforenergyresearch.org/2008/07/30/energy-subsidies-study/.

15 Energy Information Administration, Direct Federal Financial Interventions and Subsidies in Energy in Fiscal Year 2010, July 2011, http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf and http://www.instituteforenergyresearch.org/2011/08/03/eia-releases-new-subsidy-report-subsidies-for-renewables-increase-186-percent/

16 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/mer/pdf/pages/sec1_7.pdf and http://www.eia. gov/totalenergy/data/monthly/pdf/sec7_5.pdf

17 Matthew L. Wald, Nuclear ‘Renaissance’ Is Short on Largess, NEW YORK TIMES, Dec. 7, 2010, http://green.blogs.nytimes. com/2010/12/07/nuclear-renaissance-is-short-on-largess/.

18 Environmental Protection Agency, Air Quality Trends, http://www.epa.gov/airtrends/aqtrends.html.

19 Energy Information Administration, Annual Energy Review p. 13, Table 1.5, http://www.eia.gov/totalenergy/data/annual/pdf/ sec1_13.pdf

20 Energy Information Administration, Monthly Energy Review, http://www.eia.gov/totalenergy/data/monthly/pdf/sec1_16.pdf

21 Energy Information Administration, International Energy Statistics, http://tonto.eia.doe.gov/cfapps/ipdbproject/IEDIndex3. cfm?tid=90&pid=44&aid=8.