According to some pundits, responsibility for the recent run-up of gasoline prices can be laid on the doorstep of the administration for working to increase the nation's Strategic Petroleum Reserve rather than seeking to soften the blow by dumping what amounts to 0.02% of the world's oil market into the nation's gas pumps as has been done during election years in the past. Of course, you might ask just what affect this token gesture might have at the pump, but a better approach might be to ask what has happened to dropkick last summer's $22/gal. forecast into the vast wonderland of failed expert predictions.

The first thing that should grab your attention is the huge increase in demand for petroleum, not only here in the US where the economic growth over the past 10 months has been nothing short of stunning, but also - have you been watching? - in China, which has now leapfrogged over Japan to become the world's second largest market for petroleum. Nor does the thirst for oil stop there as not surprisingly the rest of Asia, spurred by China's economic recovery, has jumped on the bandwagon as well.

OK, you say, demand is on the rise. Won't that spur activity on the supply side of the equation? Well it should come as no surprise that OPEC's reaction to the weak dollar has been to tighten down on supplies, driving the cost of oil to greater than $28/bbl - this at a time that the US reserves are still trying to stage some semblance of a recovery from last year's disruptions in Venezuelan production.

Care for a couple more bolo punches to the solar plexus? How about Russian Premier Putin's crackdown on oil production in the wake of scandal at the Yukos, the country's largest oil production company? Still not enough? Well, for good measure, let's toss in Royal Dutch Shell's 20% downgrading of its reserve estimates.

Luckily for the power industry, you might comfort yourself, the issue is about petroleum, not gas - unless you think that maybe the global demand for energy resources is going to have an impact there as well.

Walking the Talk

I'm not above preaching to the choir about the need for us to make a strong move toward energy self-sufficiency, but since such talk has all the urgency of dog-bites-man, I think it is more reasonable to take a different tack. Let's start by recognizing something that's so patently obvious it's easy to overlook - that the world has undergone a fundamental change in its economic orientation during the past decade and we don't seem to be keeping pace. After more than half a century of being the eye of the economic storm, we now find ourselves headed for the periphery with no apparent will to carve for ourselves a leadership role within this sea of change.

While the handwriting has been on the wall for more than that - indeed we've been the architect and prime mover when you get right down to it - the US, Western Europe, and Japan no longer exercise oligopic control of the world's energy resources. Instead we find ourselves reduced to being just another mouth to draw sustenance from an increasingly crowded trough.

Equally obvious is the fact that voluntary measures lacking either sticks or carrots have shown little propensity to make a timely or meaningful impact on the situation. The gulf between demonstration program and full-scale operation - often referred to as the "Valley of Death" for commercializing such projects - makes it easier for us to behave as if the future will just sort of "hang out" in the hope that something magic will happen in the nick of time to save the day.

Connecting Some Dots

Several years back when our companion publication, MSW Management, blew the cover off the use of MTBE as an oxygenate for automotive fuels, we suggested that this was a great opportunity for converting the organic fraction of our municipal solid waste stream to ethanol as a replacement. While certainly possible - and, to my way of thinking, a superior option - sufficient investment was not forthcoming within the waste community. Instead it was the US Department of Agriculture that stepped up with subsidies for converting crops - notably corn - to ethanol to replace MTBE.

While I'm not convinced that converting prime land and water resources from foodstuff to energy production makes good sense in the long run, there is little doubt that the activity helped overcome the barriers to making the process commercially viable. Even more importantly, it has shown that with the sufficient amount of political clout and a clear target on which to focus, seemingly impenetrable barriers can be breached.

Now to cut to the chase: If you believe as I that there is an implicit relationship between the development of alternative energy resources and distributed generation - one that is fostered in no small measure by the recognition that the tremendous fuel demands of our present grid system all but rule out institutional change - it seems to me that it is incumbent upon us to bring this nexus to the attention of the public.

It is not acceptable that we allow our elected officials to flail around politically with a subject so vital to our national interest. We are well beyond the point at which the notion of low-cost energy should be the focal point of debate. Instead we're at the point where the issue is energy, yea or nay. For distributed energy to contribute to our nation's energy future in a meaningful way we must make the relationship between distributed generation and sustainable resources so explicit that our public officials will adopt a cornerstone in their energy debates.

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DE - May/June 2004