Newsletter - February 13, 2006

 

PEABODY ENERGY JOINS AMERICAN ENERGY SECURITY STUDY

          Peabody Energy President Gregory H. Boyce announced today that the world's largest coal company has committed $50,000 and staff support to the Southern States Energy Board's American Energy Security Study.  The St. Louis based energy giant strongly supports the conversion of coal, oil shale and biomass to liquid transportation fuels, lessening the dependence of the U.S. on foreign oil and the unstable governments that control oil prices.

          Along with a growing number of experts, Peabody‘s leadership sees coal playing a major role.  "Some people call coal the bridge to the future.  I believe coal is the future.  The United States has the world’s largest coal reserves.  Coal fuels more than 50 percent of U.S. electricity.  Coal used for electricity generation has tripled since 1970, while emissions have been reduced by more than one-third.  And coal is the fastest growing fuel in the world," said Gregory H. Boyce, Peabody’s President and Chief Executive Officer.  "Coal stands ready to be converted into natural gas, diesel fuel, jet fuel, even hydrogen. Coal should also be used in the production of ethanol.  We call it 'Btu Conversion,' and it has the ability to transform abundant American coal into a range of useful, high-value, clean energy forms – even as we reduce our reliance on foreign oil and liquefied natural gas." 
          The American Energy Security Study is a national initiative led by the Southern States Energy Board, an interstate organization of 16 states and two territories whose members are governors and state legislators, with a federal representative appointed by the U.S. President.  The action plan being devised by the Southern States Energy Board study team focuses on the rapid development of an alternative oil and liquid fuels production base in America utilizing our vast domestic resources that include coal, oil shale and biomass.  The plan also will emphasize the need for increased transportation fuel efficiency, sensible energy conservation, and improved domestic enhanced oil recovery programs using carbon dioxide.
          "On August 29, 2005, the Southern States Energy Board held its 45th Annual Meeting and the need for a groundbreaking study was front and center“ explained Ken Nemeth, Executive Director of SSEB.  “Our Board unanimously approved this national study to examine American energy security, especially in light of the escalating costs of liquid transportation fuels and their tremendous impact on our businesses, the consuming public, and the economy. "
          Additional partners in the study include the Commonwealth of Kentucky and EnviRes, LLC.  The U.S. Army National Automotive Center and the Department of Energy-Naval Petroleum and Oil Shale Reserves will also be participating.
          One of the main postulates of a white paper released by SSEB in July 2005 is that the United States is not facing an "Energy Crisis" but a shortage of liquid transportation fuels.  This paper also states that:

  • “The U.S. faces three serious oil-related risks:  The first is that world oil production may soon peak and begin a steady decline, creating major world oil shortages; the second is excessive dependence on OPEC and on other unstable foreign oil suppliers; the third is rapidly increasing global competition for oil from China, India, and other nations.” Supply disruptions from natural forces (like Hurricane Katrina) and terrorist acts are a fourth concern.

  • “To mitigate these unprecedented risks and to provide for future economic prosperity and national security, the U.S. must reduce its growing dependence on foreign oil suppliers by producing its own transportation liquid fuels.”
          A copy of the American Energy Security Study Outline, and the supporting White Paper, can be obtained from SSEB’s website, www.SSEB.org.
          The lofty price of crude oil and its derivative products, including gasoline and heating oil, offer indisputable evidence that America needs a better energy policy.  It is almost universally accepted that the 2005 Energy Act falls far short of the mark.  The American Energy Security Study will develop a comprehensive plan to rapidly scale up the domestic production of alternative transportations fuels.  It will guide and support this plan with robust macroeconomic analysis.  Policy tools will be analyzed in detail, with recommendations made to catalyze the rapid roll out of an American alternative liquid fuels industry.
          Our expert study panel believes that implementation of this plan will create another industrial boom for America, and dramatically strengthen national security (see “VISION AND LEADERSHIP” below).  Conversely, ignoring it may lead to very hard times. 
          President Bush recognized the critical need for bold action when he announced the “Advanced Energy Initiative” in his State of the Union address last week, wherein he set the goal to “to replace more than 75 percent of our oil imports from the Middle East by 2025” (see full energy segment transcript below). 
          We invite you to join us in support of the American Energy Security Study.  See "BECOME A PARTNER" below.
 
   STUDY LAUNCHED: EXECUTIVE PANEL MEETS

          The first meeting of the study’s Executive Panel was held on Friday, January 20, 2006 at Department of Energy headquarters in Washington, D.C.  Goals and objectives of the study were discussed, and task timelines established to complete the study by a June 31, 2006 deadline.

          The study will focus on:

  • an oil market analysis and forecast;

  • U.S. resource assessment of biomass, coal, oil shale, CO2 enhanced  oil recovery;

  • technology assessments and cost estimates for biomass, coal and oil shale to liquid fuel production plants and  CO2 injection enhanced oil recovery;

  • forecasts and analysis of the U.S. economy under various scenarios to include aggressive implementation of alternative liquid fuel production;

  • the environmental challenges and benefits associated with rapid scale-up of domestic alternative liquid fuels production, and

  • policy recommendations to stimulate growth of the alternative liquid fuels industry while protecting the environment.

          The U.S. is endowed with quantities of alternative oil resources that rival, and perhaps exceed, total worldwide conventional oil reserves.  Trillions of tons of American coal, oil shale, and renewable biomass are available to be converted to premium quality liquid fuels using existing and rapidly emerging technologies.  The following DOE table shows the magnitude of our fossil alternative liquid fuel resources.  Add to this the potential for 500 millions tons (or more) of biomass that can be converted to liquid fuels annually.

 

 VISION AND LEADERSHIP    

 

   On June 8, 2005 Robert Addington, a successful entrepreneur with interests in alternative energy technology, met with Ken Nemeth of Southern States Energy Board to discuss their energy vision for America.  Addington (on right in photo) has been working on a plan for energy independence since the mid-1970s.  “America can and must become energy secure and independent,” Addington explained.  “We have the most plentiful resources of oil in the world in our coal, oil shale and biomass.  We have the technology.  And we have the capital.  The only missing ingredient is national will.”

          This eventful June meeting marked the beginning of a strong partnership between Addington and Nemeth, based on a common belief in America’s tremendous and unrealized energy potential, and in the growing need to better utilize our vast resources.  At the end of the meeting Robert and Ken agreed to jointly establish a comprehensive alternative energy study and plan for the U.S.  They have been unrelenting in this pursuit.  Both continue to invest time and money in the study, having already funded the vast majority of its development costs.
          To help establish an aggressive yet achievable plan, Addington and Nemeth have assembled an impressive team of expert executive panel members and consultants.  This diverse and experienced professional team is introduced below.
          The study’s Executive Panel is comprised of representatives from Southern States Energy Board, U.S. Department of Energy-Naval Petroleum and Oil Shale Reserves, the Commonwealth of Kentucky, EnviRes, LLC, the U.S. Department of Defense, the U.S. Army National Automotive Center, University of Kentucky-Center for Applied Energy Research, Mitretek Systems, Management Information Services, Inc., General*Bioenergy, Augusta Systems and Peabody Energy.
          Primary consultants for the study are:
          Management Information Services, Inc.:  Dr. Roger Bezdek and his team of economists will perform extensive macroeconomic analysis and forecasting for the study.  They also are acting as the study integrator.  MISI is an economic research firm with extensive experience in quantitative analysis of energy, the coal industry and coal markets, oil and liquid fuels markets, and the environment.  They also have expertise in an array of energy sectors:   transportation, commercial, residential, agricultural, utility, and manufacturing.  MISI specializes in economics, statistics, finance, and forecasting.  Its staff includes former senior officials from private industry, the federal government, and academia.  For two decades, the firm has analyzed and forecast the economic, environmental, and energy effects of proposed legislation, government programs, energy policies, and alternative energy technology programs, and has conducted numerous analyses directly applicable to this project.  MISI has assisted hundreds of clients, including Fortune 500 companies, nonprofit organizations and foundations, academic and research institutions, and state and federal government agencies including the National Academy of Sciences, the National Coal Council, the Center for Energy and Economic Development (CEED), the White House, the U.S. Department of Energy, the U.S. Environmental Protection Agency, the Department of Defense, and the Energy Information Administration.
          MISI is currently working on a multi-year project for the Department of Energy’s National Energy Technology Laboratory that is examining world oil peaking and feasible U.S. mitigation strategies, including coal-based substitute liquid fuels options.  In addition, MISI has extensive experience working with the National Coal Council and CEED on a variety of issues relating to the SSEB project.  This related work will facilitate and complement MISI participation in the SSEB study.
          General*BioEnergy:  Phil Badger and his experienced staff will manage all biomass aspects of the study.  Mr. Badger and his consulting firm specialize in the use of biomass resources to produce energy and other products.  He is an MBA and a registered professional engineer (agricultural engineering), with 15 years of experience as the Tennessee Valley Authority manager of the U.S. Department of Energy’s Southeastern Regional Biomass Energy Program (SERBEP).  He currently serves as Southern States Energy Board’s biomass advisor and as a consultant to numerous government and industry clients. 
          MitreTek Systems, Inc.:  Dr. David Gray and his clean-coal technology staff will develop economic profiles for a variety of coal-to-liquids and combination coal and biomass-to-liquids polygen plants.  They have developed an in-house resource of comprehensive, totally integrated computerized simulation models of coal-based plants for the production of transportation fuels, chemicals, hydrogen, and electric power.  These models simulate the performance of the plants from feedstock to refined products and include complete estimates of construction, capital, and operating costs with resulting project viability assessment. They work for an impressive assortment of national and state government agencies, and private industry.

          Augusta Systems, Inc.:  Patrick Esposito and his staff will undertake the “Environmental Challenges and Benefits” and carbon dioxide Enhanced Oil Recovery” segments of the study.  Augusta Systems provides technology research and development and technical consulting to industrial, commercial and government clients in the energy/environmental and defense/aerospace sectors.  Dr. Esposito brings more than 30 years of engineering and energy technology experience to his role as leader of the Augusta Systems team.  A former university professor, federal researcher, and consultant, Esposito holds a Ph.D. in engineering.  In addition to overseeing consulting projects for an array of government, military and industry clients, Pat serves as the energy advisor to Governor Joe Manchin of West Virginia.

          DoD and DOE Participation:  Tony Dammer, Director of the DOE-Naval Petroleum & Oil Shale Reserves group, serves on the executive panel.  He will make his group’s comprehensive work on oil shale economics and resources, including their National Oil Shale Model, available to the study group.  Mr. Dammer’s team of consultants will also be available, as necessary, to provide additional oil shale information for the study.  Members of the DoD-OSD Clean Fuel Initiative, and the U.S. Army RDECOM-TARDEC National Automotive Center, are also serving on the executive panel.  They will provide valuable insight regarding national security issues and military needs and objectives for domestic alternative liquid transportation fuels.

BECOME A PARTNER - Join the study

          As we approach full funding of this $600,000 study, we seek further diversity of our sponsorship base.  Contributions of as little as $5,000 and $10,000 are welcomed from industry, government and non-government organizations that can lend expertise and energy to our effort.  Of course, larger amounts would be most helpful.  To find out more please contact Ken Nemeth, Executive Director of Southern States Energy Board at 770-242-7712 or James Mayer, President, A. J. Mayer International at 717-359-0693. 

          You can also help by forwarding this newsletter to your associates, referring to it in your company newsletter, etc.  Anyone can subscribe by sending a request to AJMayer-Intl@comcast.net.  This, and future American Energy Security newsletters will also be posted on SSEB’s website, www.SSEB.org.

PRESIDENT BUSH’S STATE OF THE UNION ADDRESS

        Full Transcript of Energy Comments

        “Keeping America competitive requires affordable energy. Here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.  The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, more reliable alternative energy sources -- and we are on the threshold of incredible advances.
        So tonight, I announce the Advanced Energy Initiative -- a 22 percent increase in clean-energy research at the Department of Energy, to push for breakthroughs in two vital areas.  To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants; revolutionary solar and wind technologies; and clean, safe nuclear energy.  We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen.
        We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks, or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.

        Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.  By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.”

*  Southern States Energy Board represents Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, and two U.S. territories, the Virgin Islands and Puerto Rico.  The American Energy Security Study is a national initiative.

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