Peer Review Board

The dawn of a new millennium represents a symbolic point of reference for viewing the lessons of the past and predicting the promise of the future. In 1999, Washington Policy and Analysis (WPA) began a thoughtful analysis of the United States' national energy priorities in the context of such key factors as national security, environmental quality and energy efficiency. We asked tough questions about the national energy outlook: Will the current energy mix serve our future needs? What surprises may be lurking on the horizon? What is the optimal energy mix for best serving our national interests?

For more than a decade, WPA has prepared comprehensive studies of the U.S. and global energy outlook, using a combination of energy modeling, scholarly research and market analysis. As we surveyed key trends in the U.S. energy sector, we saw the promise of new technologies and the challenge of changing market structures. In particular, the pivotal role natural gas could play in meeting our future energy and environmental priorities was abundantly clear although the path to achieving this optimal energy future was not.

We realized that without careful long-term planning and implementation of enlightened energy policies, we could end up with a dirtier, less efficient and precarious energy mix. With this in mind, WPA approached the American Gas Foundation for support in our study of the U.S. energy future. The results of our investigations were revealing and insightful. While many contemporary studies continue to hype the use of natural gas in central station electricity generation, our analysis shows that direct use of natural gas offers the prospect of a vastly more efficient economy. "Fueling the Future" represents a new vision for the fuller utilization of natural gas and ultimately for the development of a rational national energy policy for the 21st century.

This is not the first time that WPA has challenged conventional wisdom about natural gas. In 1988, WPA projected a growth in gas usage that exceeded estimates by most analysts at the time. While the 1988 study was viewed as "wildly optimistic," current data demonstrates that we actually might have understated the demand for gas. The expanding role of natural gas came from a combination of regulatory reform, more effective exploration and production techniques, and timely market penetration by efficient end-use technologies. A subsequent policy paper published in 1992 looked further ahead, stressing the need for research and development on fuel cells and other visionary technologies.

These two natural gas studies were the result of collaboration among WPA and scholars from MIT, Princeton, the University of Texas and other key institutions. The studies showed that achieving a 25 quad future was not only possible, but also highly desirable from the points of view of the national economy, the environment and national security.

This most recent study, "Fueling the Future: Natural Gas & New Technologies for a Cleaner 21st Century," differs from most gas studies in its focuses. We devote much attention to how and where gas might be used in the four major U.S. consumption sectors as well as in generating electricity for end-use. As with past studies, WPA asked distinguished experts to advise and review the project findings. These distinguished individuals include one of the nation's preeminent geologists, a former science adviser to President Clinton, a leading expert on air pollution and the organizer of the Rio summit. WPA also solicited the views and expertise of industry representatives to test the "real world" validity of our analysis.

Joining us as co-author of this third study is Gregg D. Renkes, former staff director of the Senate Committee on Energy and National Resources and president of the Renkes Group, who provided critical input on legislative and regulatory policies condicive to greater use of natural gas

A summary of the study results follows. A more comprehensive technical report may be obtained by contacting WPA at (202) 965-1161 or [email protected].

We would like to thank those individuals who have advised and assisted us in this endeavor—and particularly Joseph Dukert for his keen analysis and review throughout the study.

We encourage you to thoughtfully review the results of this study and to work to ensure that appropriate state and federal policies are pursued to stimulate natural gas demand and overcome obstacles to enhanced gas use.

Washington Policy and Analysis (WPA) is an international consulting firm specializing in energy, environment, trade and technology issues. WPA's founding partners, Scott L. Campbell and William F. Martin, both served in the Reagan-Bush administration in various high-level positions. Campbell served as President Reagan's director of the Office of Policy Planning and Analysis at the Department of Energy, and on the National Petroleum Council under President Bush. Martin served as President Reagan's deputy secretary of energy and executive secretary to the National Security Council, and was executive director of the 1992 Republican Platform Committee.

The American Gas Foundation was incorporated in 1989 as a 501(c)(3) tax-exempt charitable foundation. It strives to educate key audiences about natural gas by providing training and educational programs and conferences, and conducting charitable and other activities.

Fueling the Future: Natural Gas & New Technologies for a Cleaner 21st Century" was completed with the assistance of the following experts:

Dr. William Fisher is professor of geological sciences and interim director of the Bureau of Economic Geology at the University of Texas at Austin. Fisher served as assistant secretary of the Interior in the mid-1970s and has been an active member of the White House Science Council, the Outer Continental Shelf Advisory Board to the Department of Interior, and the National Petroleum Council.
"Long- term trends in ever-increasing energy efficiency have put the United States at the threshold of a methane economy. With vigorous development and application of technology, the ample natural gas resource base of the nation can be converted to producible reserves at attractive costs and in volumes sufficient to meet a much enlarged demand, thus allowing us to realize the tremendous benefits of a methane economy."

Dr. John H. Gibbons is a former science adviser to President Clinton (1993 to 1998). Previously, Gibbons served as the director of the Congressional Office of Technology Assessment. Gibbons is currently the Karl T. Compton lecturer at Massachusetts Institute of Technology and senior fellow at the National Academy of Engineering.
"The ancient Jewish people told of the gift of manna that rained down from heaven to give them sustenance in the wilderness. Modern man benefits from another substance, partly cosmic in origin and partly stored up in the earth for many millennia through photosynthesis and anaerobic digestion. This modern manna is natural gas. It is of such high quality that, through using advanced technology, it can provide energy services and useful chemicals at a very high efficiency and low environmental cost."

Dr. Nancy Kete is director of the Climate, Energy and Pollution program at World Resources Institute (WRI). Previously, Kete worked as a senior policy analyst in the Office of Air and Radiation of the U.S. Environmental Protection Agency before becoming deputy director of the Office of Atmospheric Programs.
"Natural Gas provides a strong front line defense against global climate change. Natural gas is a vital bridge between today's energy mix, dominated by coal-fired centeral power stations and gasoline-powered cars, and our energy future, where hydrogyn, fuel cells and renewable energy resources will meet our energy needs. Greater use of natural gas, and better total energy efficiency can reduce greenhouse gas emmisions over the next few decades and the buy time still needed for new energy technologies to mature."

Maurice Strong is chairman of the Earth Council and senior adviser to the United Nations and the World Bank. He was secretary general of the landmark 1992 UN Conference on Environment and Development in Rio de Janiero. In addition to public service, Strong has had a distinguished career in the energy sector and served as chairman of Petro-Canada and Ontario Hydro.
"This study makes a compelling and well-reasoned case for expanding the role natural gas plays in the U.S. energy economy, the means by which this can be achieved and the advantages of doing so."
"Especially noteworthy is the emphasis on 'total energy efficiency,' or TEE, as the most practical and effective means of achieving a significant (17%) increase in the natural gas component of a 'clean energy portfolio.' From my own experience at Ontario Hydro, I strongly support the case the WPA study makes for TEE and its benefits in both environmental and economic terms."
"I also applaud the emphasis the study places on the economic and security benefits of a major increase in the role of natural gas for meeting domestic energy needs."

Paul A. Elbert, executive vice president, Unicom Corp. formerly president & CEO, Natural Gas, Consumers Energy Company