HighLight Heading
June 2004
Opening session panel
See "Action needed now to deal with U.S. energy and greenhouse gas challenges" for background information on the article below.
Heywood was joined by Professor Alfred Marcus of the University's Carlson School of Management, and Eivind Stenersen, chief engineer of fuel cell and new business development with Donaldson Company, based in Bloomington, Minn.
Marcus said a host of factors are leading us into the direction of oil shocks akin to those of the 1970s: environmental issues such as global warming, political unrest in the Mideast, and the rapid growth of China and the rest of Asia.
Eivind Stenersen and Alfred Marcus
If we look at the situation comprehensively, he said, there are a variety of things we can do. He agreed with Heywood that the prospect of a hydrogen economy is very long term, and advocated hybrids as a short-term strategy. Forging other technologies such as biotechnology is also critical, he said, to create "some kind of new, biotech crop engineered with optimum properties for fuel production and less impact on the environment." This joining of technologies is also very important in areas such as engine advancements and materials science for body efficiencies. "Technology is our only hope if we want to have the same lifestyle of the past," Marcus said. He also reminded the audience that the role of mass transit cannot be forgotten and that we must understand the full life-cycle, cradle-to-grave impacts on our environment.
In sum, while there currently is no crisis and he cannot predict when prices could quadruple, "that prospect is more imminent than ever before, and we must talk about it as a society and prepare for it."
Stenersen noted that about 17 percent of the world's population drives a car. "In this country we do it in excess, in big cars driving long distances, and now part of the other 83 percent...are starting to do it," he said. Some estimates suggest that by 2020 fuel use in China and India could be 50 percent higher than today.
His concern with alternative fuels and hybrids is that their use will be more than offset by increased demand for energy. Fuel-cell vehicle technology is about equivalent to where internal combustion engine vehicles were in the 1920s, he said, and they are not as robust or durable. "We'll have an incredible shortage of oil in the relatively short future," he predicted, a problem the market will address through very high oil prices.
Asked about the role of regulations, Marcus said he believes U.S. gas taxes must be closer to those in other countries, which would improve our economy in the long term, spur technology growth, and create new jobs. Stenersen countered Marcus, saying his experience in high-tax Norway left him less in favor of taxation. Realistically, he said, the huge demand for oil, especially by China, will make gas so expensive that higher taxes won't be needed to decrease consumption and spur new technologies.
Heywood added that the danger is to let technological change dominate. "We must learn to do many things at once, some of which will be technical, some related to the vehicle, some with new fuels, but others dealing with behavioral patterns." He also said we cannot wait for high gas costs to trigger change because the market is too unpredictable and, because of the urgency, we need to get started now.