" Lighten up a little bit. It's only the end of the world." — Samuel T. Anders
Let's break down energy spending in the stimulus package.
- $43 billion will be spent on all energy projects.
- $2 billion will be spent on battery research.
- $400 million will be spent "to encourage electric vehicle technologies".
- $700 million will be spent on federal & state purchases of fuel efficient vehicles.
- All together, only 7.2% of the energy spending goes toward reducing liquid fuel consumption.
$2.4 billion will be spent on R&D for electric vehicles. Over 90% of the new energy spending goes toward an "efficient and reliable" electricity grid, adding renewable sources to the grid, Energy Star appliances, house weatherization, etc.
"The chance that a smart grid will significantly reduce our oil consumption in the next 20 years is very close to zero."
Painfully admitting … oil will remain the world's primary transportation fuel for some time. Clearly, we aren't moving to a hydrogen economy quickly, and renewables are not on a path to replace oil in the next 50 years.
Chu is convinced—and rightly so—that we in the United States can not drill our way out of our dependency on imported oil. His view—again, this is correct—is based on our meager reserves and production rate relative to our consumption, which made up 23% of global demand in Q2, 2008. (chart below from Chu's powerpoint)
The idea we will be riding:
DOE's spending priorities should come as no surprise to you now that you understand where Obama and Dr. Chu stand. They assume we have anywhere from 20 to 80 years to solve the liquid fuels problem as appropriate efficiency measures are put in place over time. So we can add an implicit assumption that explains recent energy spending.
I have not discussed biofuels because these lie at the heart of Chu's techo-optimism. I will discuss Chu's Helios Project next week.
Until then, you may want to bone up on 4th-Generation biofuels.
If you think Chu's plan is just so much pie in the sky after you've studied problem, you are not alone.
Please read full By Dave Cohen