October 15, 2006 - Renewable Energy A Necessary Goal

A week ago I talked about the fact that OPEC, with it’s million-barrel per day production cut, is again proving to the free world that we are held hostage by those oil producing countries. As a followup this week, I offer the argument that 2006 will be a hallmark year in our effort to cut our dependence on foreign energy.

It started with the President’s State of the Union message in January and culminated this past week in St. Louis, scene of the first-ever Renewable Energy Summit. And what a Summit it was...with just about every source of renewable energy represented. Fifteen-hundred people representing ethanol, bio-diesel, wind power, solar energy, the conversion of livestock waste into energy and more were in attendance. They represented companies, university researchers, government officials, agricultural producers and their organizations, even the petroleum industry all working toward one goal, to produce more of our own energy. Keynoting the opening session were Secretary of Energy Sam Bodman and Secretary of Agriculture Mike Johanns. President Bush appeared at the closing session to repeat his State of the Union call for energy independence.

But again, it was pointed out there are some common challenges. First of all, the petroleum industry faces a major problem in zoning and environmental regulations that must be met before construction of a new refinery can begin. That alone can take years and cost millions of dollars. The same challenge is faced by ethanol and bio-diesel plants as well as wind farms and nuclear power generators. We all profess a desire for clean cheap energy as long as it is not produced in our backyard.

In her presentation at the Summit, Patricia Woertz, Chief Executive Officer of Archer Daniels Midland in Decatur, Illinois commented on the growing need for renewable energy to replace oil when she stated “the world would need four new refineries a year to keep up with projected growth in fuel consumption over the next decade and that probably won’t happen.”

That signals potential ethanol use in the U.S. could surpass some current estimates of about 14-billion gallons a year and those estimates are based on ethanol being blended into about 10% of gasoline consumption and don’t even consider increased use of E-85. She said “ the market should grow further than that. The question is not whether the market is sustainable for renewable fuels, but how big it can be. This is a foundation for a new era of energy.” That should answer those who are concerned about overproduction.

I thought the St. Louis Summit showed creativity and unity in the renewable energy industry and finally, a commitment to do more than just talk about the energy challenge.

My thoughts on Samuelson Sez.