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June 29, 2012

William Perry: U.S. has technology to break dependence on foreign oil within 10 years

By Mark Golden

STANFORD, Calif.—The United States can and likely will greatly reduce its dependence on imported oil within 10 years, former Secretary of Defense William Perry said Friday when speaking at the Silicon Valley Energy Summit at Stanford University.

The reduction in oil consumption generally will benefit not only national security and the economy, but reduce U.S. emissions of greenhouse gases, which contribute to global warming, said Perry, who chairs the U.S. Secretary of Energy’s advisory board currently. The reduction in consumption of foreign oil in the near term depends on continued advances in the technology and commercialization of electric cars, new types of biofuel, production of natural gas and nuclear power, he said.

“Despite promises to end our dependence on foreign oil from every president since Eisenhower, energy research spending by the U.S. government has been small, sporadic and on a downward trend since 1981,” said Perry, who was President Bill Clinton’s defense secretary. “The good news is we have already started to turn around this dismal picture, starting in 2009.”

Perry, who gets more than 100 miles per gallon from his plug-in hybrid car, said that significant use of electric cars will depend on lower car prices and breakthroughs on battery technology. Improved batteries would allow electric vehicles to operate more efficiently and go greater distances between charging cycles. Perry expressed confidence that the Department of Energy’s relatively new advanced research program, along with other research programs, are making progress on battery technology and that the technology will be available within five years for electric cars to take over a large part of the automobile market.

Also, for traditional combustion engines, the U.S. and other countries can and likely will develop cellulosic biofuels to replace gasoline, Perry said. Such biofuels are made from things like agricultural waste, paper and grasses, unlike ethanol, which is made from the important food sources of corn and sugar.

The end of dependence on imported oil must not come with an increase in greenhouse gas emissions, which would happen if the U.S. does not stop burning coal to generate electricity, Perry said. Some 40 percent of U.S. electricity is generated from coal, which is down from about 55% ten years ago, but Perry said climate change demands continued reduction. Switching from coal will rely on expansion of natural gas-fired, nuclear and, ultimately, solar and wind power.

“I believe we must move on all three,” said Perry. “Solar and wind are still too expensive and I believe it will take at least five years to get solar, especially, cost competitive, and it will take 10 to 20 years to get from the current 1 percent of our electricity to 10 percent.”

Perry, who spends a significant amount of his time working to reduce the proliferation of nuclear weapons, acknowledged that an expansion of nuclear power globally complicates the proliferation issue, particularly in countries like North Korea and Iran. But the reduction in cash flows to OPEC countries, including Venezuela, and Russia would improve on balance both national and economic security for the U.S. and other nations. Technologically, he cited the development of the small modular reactors used by the U.S. Navy, which have a “stellar safety record,” to civilian use as a possible avenue for a U.S. nuclear renaissance.

Natural gas, which the United States is producing vast amounts of due to hydraulic fracturing technology, still emits carbon dioxide, noted Perry, but it does so at about half the rate of coal, so it should replace coal-fired electricity until renewable energy technologies mature.

In response to a question at the one-day conference, Perry said that ending dependence on foreign oil for him does not mean 100 percent domestic oil production because Canada is a welcome supplier and because a small amount of oil imports from OPEC countries and Russia would not have the coercive impacts of today.

In addition, Perry said much of his outlook could be applied to European countries and to China, which would be critical to addressing the issue of climate change. Poland and Ukraine, for example, are developing shale gas with U.S. help. As for China, Perry called upon former Secretary of State George Shultz, who was in attendance, to describe a recent meeting Shultz had with the future premiere of China. Despite its building of coal-fired power plants at a very rapid pace currently, Shultz said, China is acutely aware of both the local pollution effects as well as the global issue of climate change.

Li Keqiang, expected to become China’s next prime minister, “was very much on top of this issue. He was quite knowledgeable on shale gas. He knows the areas where it is in China, and he said it’s very important that we use this technology carefully so we don’t have some big scandal or event that stops it,” Shultz said.

At the top of Perry’s list of things that could go wrong and derail his forecast for breaking the U.S. dependence on oil imports is also some environmental disaster from hydraulic fracturing. Things that could go right, which he did not assume for his optimistic forecast, a significant breakthrough in solar power or electric car batteries, or “the government could really surprise me and adopt a tax on carbon,” said Perry.

“On balance, the things that could go right are more likely, I think, than the things that could go wrong,” he concluded.

The Silicon Valley Energy Summit, which is hosted annually by Stanford University’s Precourt Energy Efficiency Center, covers the best practices, technological advances and policy developments related to more sustainable energy use.

(Mark Golden works in communications at the Precourt Energy Efficiency Center at Stanford University.)

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Media Contact: Mark Golden, (650) 724-1629, mark.golden@stanford.edu