THE NATIONAL MINING ASSOCIATION JOINS THE AMERICAN ENERGY SECURITY STUDY

          We are pleased to report that the National Mining Association has joined  the American Energy Security Study as a $50,000 sponsor.  The National Mining Association (NMA) is the voice of the American mining industry in Washington, D.C.  They are the only national trade organization that represents the interests of mining before Congress, the Administration, federal agencies, the judiciary and the media.

          NMA's membership includes more than 325 corporations involved in all aspects of the mining industry including coal, metal and industrial mineral producers, mineral processors, equipment manufacturers, state associations, bulk transporters, engineering firms, consultants, financial institutions and other companies that supply goods and services to the mining industry.   They provide a forum for all the diverse segments of the mining industry to come together and advocate public policies designed to protect and expand opportunities for domestic mining.

POLICY MAKERS STUDY BRIEFING

          The SSEB's Executive director, Ken Nemeth, and other study managers have begun an active program to brief key members of Congress in Washington D.C.  The following "three pager" has been prepared to support this effort.  This descriptive piece introduces the study and outlines four policy initiatives that would help to stimulate a domestic alternative liquid fuels production industry.

The American Energy Security Study

by the

Southern States Energy Board

Developing A Plan to

Rapidly Scale up Domestic Alternative Oil Production

Using Our Vast Resources of Coal, Biomass and Oil Shale

We ask for your support

SSEB is an interstate compact organization comprised of 16 states and two territories, whose members are governors, state legislators, and a federal representative appointed by the U.S. President.  On August 29, 2005, SSEB’s Board unanimously approved this study.  Member governors and legislators are standing ready to support resulting policy initiatives and recommendations.  We invite you to join them in support.

·         The United States can and should become energy secure and independent by 2030.

·         This nation faces four serious oil-related risks: 

▬        Excessive dependence on OPEC and on other unstable foreign oil suppliers;

▬        Conventional oil supplies are not meeting dramatic increases in world demand;

▬        Rapidly increasing global competition for oil from China, India, and other nations; and

▬        Supply disruptions from natural disasters (and potential terrorism).

·         Tightening oil markets and near record high prices have brought America’s oil vulnerability back into focus.  Hurricane Katrina recently demonstrated how quickly oil supply disruptions can impact the country.  More serious supply disruptions will likely occur in the future, caused again by natural forces like Katrina, or by terrorist acts, or purposeful rationing by the OPEC cartel and rogue nations such as Iran and Venezuela. 

·         New oil discoveries are not keeping up with oil consumption. 

·         America faces a serious liquid transportation fuels crisis.  To mitigate these unprecedented risks and to provide for future economic prosperity and national security, we must reduce our growing dependence on foreign oil suppliers by producing our own liquid fuels.

·         While some refer to the oil risks and challenges America faces as an “energy crisis,” this is misleading.  We face the ominous prospect of crippling oil and liquid fuel shortages and soaring prices.

·         One goal of the SSEB study is to show how America can replace approximately five percent of U.S. imported oil each year for 20 years, beginning no later than 2010.  A key to this plan will entail building multiple alternative liquid fuel plants each year.  This will require an enormous effort and commitments from industry, government, and the American people.  Though a very ambitious goal, it can and must be achieved.

·         The U.S. is endowed with quantities of alternative oil resources that rival total worldwide conventional oil reserves.  Trillions of tons of American coal, oil shale, and renewable biomass resources are available to be converted to premium quality liquid fuels using existing and rapidly emerging technologies. 

·         By producing environmentally superior transportation fuels from near-zero emissions plants (which can recycle, utilize, and/or safely sequester CO₂), the United States will set an example for the world.  Liquid fuels produced from coal, oil shale, and biomass have very low to zero sulfur, low particulate and NO_x emissions, and higher performance characteristics than their conventional distillate counterparts. In addition, the plants that produce the liquids can be carbon-capture capable.

·         The SSEB study will focus primarily on the rapid development of coal/oil shale/biomass-to-liquid fuels production. Other elements of a comprehensive energy security program will be examined as well.  Improving transportation fuel efficiency, especially in vehicles, sensible conservation, renewable resources, and initiatives to increase conventional and non-conventional domestic oil production must all play a part.

·         Commercial enhanced oil recovery successes using CO₂ flooding suggest that American oil and gas production can be dramatically increased by this method.  Miscible CO₂ flooding can revitalize certain mature oil fields.  In addition, CO₂ injection into coal and oil shale deposits is an emerging technology that can increase natural gas production from these sources.  At present, limited availability of CO₂ supplies severely constrains this production enhancing technique.  However, coal, oil shale, and biomass-to-liquids plants will produce and capture large quantities of CO₂, which can be sold to oil and gas producers for such productive uses.  Thus, the CO₂ generated by these plants can be put to a positive use, while at the same time permanently and safely sequestering the gas in reservoirs deep beneath the earth’s surface.  In addition, the petroleum residuals generated by oil and gas producers can be upgraded to liquid fuels in the new carbon-to-liquids plants.

·         Commercial coal-to-liquid fuels (CTL) technologies have existed for decades.  Sasol, a South African company, currently provides almost 30 percent of that country’s liquid fuel needs through coal conversion.  It does so, profitably, in the open market.  America can and should follow the Sasol model, which clearly demonstrates that it is not only possible but also highly profitable to rapidly ramp-up production of high quality liquid fuels from domestic coal.  Sasol was created with support from government to decrease dependence on foreign oil.  The company quickly outgrew its need for government assistance.  Sasol serves as a model for America.

·         Another model of success, Alberta, Canada, is now second only to Saudi Arabia in proven oil reserves and ninth in the world in annual oil production.  This is the result of successful development of Canadian oil sands.  Alberta is a tremendous alternative liquid fuels success story.  It began with Alberta’s government deciding to promote the development of this resource, and not giving up.

·         America has tremendous opportunities to develop multi-source energy complexes that co-produce liquid fuels, natural gas substitutes, hydrogen, electric power, process heat, energy crops and petrochemicals.  Some are calling these facilities of the future “Alternative Energy Farms” or “AEFs.”  They will include various integrated combinations of alternative energy production units, including:  coal-to-liquids/gas/electric/chemicals/steam, ethanol, biomass-to-/gas/electric/chemicals/steam, biodiesel, hydrogen, and oil shale-to-liquids/gas/electric/chemicals/steam.  Wind, solar, fuel cell, and hydro modules are also possible.  Alternative Energy Farms will more fully and efficiently utilize local natural and waste resources, process heat, infrastructure, product blends, manpower, technology, land, and capital.  Resulting synergies can significantly improve resource utilization and efficiencies, thereby lowering production costs.  Environmental benefits will abound.

·         The economic, national security, and environmental advantages of establishing a thriving domestic alternative liquid fuels industry vastly outweigh the development costs.  In contrast, doing little or nothing subjects America to energy supply disruptions and to potentially severe economic consequences.

·         Embarking on a national mission to achieve energy security and move toward liquid fuels independence will not only reduce risk and lower oil prices and oil price volatility, it will also facilitate an industrial boom, create millions of jobs, foster new technology, enhance economic growth, help to eliminate the trade and budget deficits, insure affordable energy for our citizens and strategic fuels for our military, and establish a reliable domestic energy base on which to rebuild our domestic industries to be globally competitive.

·         America has the natural resources, the financial resources, and the technology to achieve U.S. energy security, freedom, and independence.

• Extend the transportation tax credit on alternative transportation fuels.
• Provide for the expensing of alternative energy plants in the first year of operation for tax purposes.  
• Establish a self sustaining government corporation similar to OPIC, to insure against predatory pricing from OPEC and others.
• Initiate regulatory changes that will expedite siting and permitting of production facilities, mines and necessary infrastructure.

From May 2005 Survey Conducted by

Yale Center for Environmental Law and Policy

Top Concerns: Dependence on Imported Oil

Yale Environment Survey, May 15-22 2005, 1002 interviews

• Americans are more concerned about our dependence on imported oil than about global warming, air pollution or contamination of soil and water.
• Democrats (70%), Republicans (68%) and Independents (66%) all agree, this is a very serious problem.

GASIFICATION - offering near-zero emissions production of diesel fuel,

jet fuel, gasoline, hydrogen, fertilizers, electricity, and much more

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.

Past American Energy Security newsletters are posted on SSEB’s website at http://www.sseb.org/AES/AES.htm