ymarkov | Human Ingenuity: Energy

How Green Is Your Crystal Ball?

The National Academy of Sciences tries to predict America's energy future. Again.

Ronald Bailey | August 4, 2009

The National Academy of Sciences (NAS) recently dusted off its 30-year-old crystal ball and gazed into the future of American energy use. Its findings were released last week in report titled America's Energy Future: Technology and Transformation. The experts on the panel are slightly stoic and guardedly optimistic. In 10 to 25 years—"with a sustained national commitment"—they say, the U.S. will be able to achieve "energy-efficiency improvements, new sources of energy, and reductions in greenhouse gas emissions through the accelerated deployment of existing and emerging energy-supply and end-use technologies."

This particular mode of divination harks back to a similar effort back in 1980, when the NAS issued a similarly ballyhooed report, Energy in Transition, 1985 to 2010. That report took four years to assemble and involved 350 of America's smartest energy researchers, engineers, and economists. Before we take the new findings too seriously, let's see how 1980's experts have fared three decades on.

The 1980 report heavily emphasized conservation, and noted that coal and nuclear fission were the "only readily available large-scale domestic energy sources that could even in principle reverse the decline in domestic energy production over the next three decades." The report was extremely pessimistic about petroleum, stating that "world supplies of petroleum will be severely strained beginning in the 1980s." Government-funded research on synthetic coal-based fuels was trumpeted as a great source of hope.

The 1980 report offered six scenarios for calculating the hypothetical total primary energy use for a country with a population of 280 million in 2010. The scenarios ranged from "very aggressive" federal policies aimed at reducing energy demand paired with quadrupled energy prices and 2 percent annual growth; to moderate with doubled energy prices and 2 or 3 percent economic growth; to essentially unchanged 1975 policies, stable or decreasing energy prices, and 2 percent growth.

So how well did the NAS foresee America's energy future back in 1980? Well, for starters, energy prices did not quadruple or even double over the past 30 years.

According to the Energy Information Administration (EIA), the real price of electricity in 1975 was 9.2 cents per kilowatt hour (in 2000 dollars) and it was 9.28 cents per kilowatt hour in 2008.
In real dollars a barrel of oil cost $48 in 1975. In 2009, the price has so far averaged $43 per barrel.
In real dollars, a gallon of regular gasoline averaged $2.21 in 1975 and in August 2009, the EIA reported that regular gas was going for an average of $2.51 per gallon.

And the good news is that the U.S. economy grew at slightly more than 3 percent per year on average since 1985—not the pessimistic 2 percent rate envisioned in five of the six scenarios considered in 1980.

The NAS scenario in which energy prices remained essentially unchanged while the economy grew at a 2 percent rate projected that the U.S. would be using 130 quads of primary energy by 2010. (A quad is a quadrillion British Thermal Units (BTUs) which is equal to the amount of energy in 45 million tons of coal, or 1 trillion cubic feet of natural gas, or 170 million barrels of crude oil.) The 1980 NAS scenario in which the economy grew at 3 percent per year while energy prices were double their 1975 rates projected slightly less than 130 quads of energy consumption by 2010.

As we now know 30 years later, energy prices remained essentially flat and the economy grew at 3 percent. The 1980 report noted that "more rapid economic growth...implies higher energy consumption." Had the assumptions behind the 1980 NAS scenarios been accurate, Americans should be using far more than 130 quads of primary energy by now.

What actually happened? According to the EIA, the U.S. uses just 98 quads of energy today up from around 80 quads in 1980.

The rest at http://www.reason.com/news/show/135213.html