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The Energy Crisis: Is It Solvable?

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I recently spoke at a business school on the east coast and the title of my discussion was "The Energy Crisis: Is It Solvable?" I want to share some thoughts from my discussion with these very bright and engaged students.

I give many talks on energy. I speak to Wall Street, in Washington and outside the U.S. For reasons I do not understand, many in our country do not get or refuse to get my simple message -- America must use all of its abundant domestic resources (not just corn) and all of its technologies to produce alternative fuels if we really want to reduce our dependency on foreign oil. However, I cannot tell you how refreshing and encouraging it was that these students viewed my message as a "no brainer."

In my lead off with the students I shared with them how much energy is consumed worldwide and who uses the vast majority. We then discussed where the reserves are located and the timing of major discoveries. It did not take too long for the group to understand that the world and in particular the U.S. has a real supply and demand imbalance. America consumes 25% of the oil in the world and produces 4% of the supply. Moreover, the percentage we produce is continuing to decline. Eighty percent of the world's reserves now reside in government controlled companies and that trend is continuing to grow. We spend $1 billion per day on foreign oil and our U.S. Air Force's fuel expense has risen over $3 billion annually in just 2 years, meanwhile, we continue buying oil from nations who don't particularly have the same values as we have and some of whose leaders are openly hostile to our interests.

Unlike too many others, these students easily and rapidly grasp the notion that America is in a real bind and unless we use all of our domestic resources and our technologies, America's situation will only get worse.

I run a company, Rentech Inc., that will use its technology to convert a wide array of domestic feedstock or inputs (biomass, coal, natural gas, trash) to the cleanest diesel and jet fuel in America. I mentioned that America has a 200 year supply of coal and certainly enough biomass in this country to fuel our planes and keep the economy moving. I suggested to the group that it was and is completely irresponsible to bypass coal as a resource for clean burning jet fuel and diesel. If we use all of our abundant domestic resources to produce alternative fuels we can add to our supply and produce fuels that are dramatically cleaner than traditional fuel.

Although the technology is not yet fully developed, many policy makers believe that non-food, often called cellulosic, ethanol will play a key role in reducing our dependency on foreign oil. However, these same policy makers seems not to understand that the technology exists today to produce cellulosic diesel and jet fuel.

It was a delight to see that these students understood that America should put its shoulders behind all of its alternative fuels and get moving. Remember, by the time our children are in their prime--oil as we know it won't exist and yet some policy makers seem to be blind to this fact.

Technology can get us out of this situation; all we need is some common sense as it seems these students have. I did not debate global warming and the students didn't either. What was clear to the students and to me is that we can and should use the alternative fuel technology that exists today to reduce our dependency on foreign oil AND to reduce global warming. Foreign companies and countries around the globe seem to understand that alternative fuel technology will enable us to do both. However, in the U.S we are still debating not whether but how much cleaner alternative fuels must be than traditional fuels. While some policy makers continue their search for the perfect solution, America is failing to deploy alternative fuel technologies that are not only much cleaner than traditional fuels but also available today. The pendulum has swung too far in a direction that if common sense were applied as these students had figured out -- we could move forward now to create jobs, clean up the environment and reduce our dependency on foreign oil.

I hope policy makers and other opinion leaders in the U.S. will soon get what these students and foreign countries and companies already understand. All we need to do is to have students, scientists and industry work together to bring our exist alternative fuels technologies to the market place. I agree with the students this really is a "no brainer.