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Fueling the Hydrogen Economy: Energy Independence Now

Environmentally benign technologies can meet the president's hydrogen plan.
Fortnightly Magazine - July 1 2003

2003, this has created a bull-market mentality-an anticipation of long-term gas price levels substantially above the $1.80-$2.80/million Btu Henry Hub range from 1995-1999 [4]. The war with Iraq also temporarily destabilized oil prices (although OPEC did a remarkable job in minimizing these fluctuations), which further destabilized gas prices because of the impact of fuel switching.

One unfortunate consequence of this instability in natural gas supplies and prices since the 2000-01 California energy crisis has been the cancellation or deferral of many gas-fired power generation projects using primarily the 60 percent (lower heating value) efficiency combined-cycle technology, in which about two-thrids of the power is generated in one or more combustion turbines, and the other third in steam turbines driven by steam generated with the waste heat from the combustion turbine exhaust. The EIA anticipated that total U.S. combined-cycle generating capacity would increase from 46.2 MW in 2000 to 301.4 MW in 2025 [7]. This would create environmental benefits because carbon dioxide (CO 2) emissions from gas-fired combined-cycle systems are only about one-third those of inefficient coal-fired steam-electric plants, which still provide about 55 percent of U.S. power supply [7]. In addition, gas-fired generation also emits negligible or readily controllable conventional pollutants that are under regulation by the Environmental Protection Agency.

Obstacles to Full Exploitation of Gas and Oil Reserves

One of the obstacles facing U.S. producers are the obstacles they face in gaining access to oil- and gas-rich federal lands in the Rocky Mountain region. A joint study by the Departments of Interior, Energy, and Agriculture of the five basins straddling the Rocky Mountains region revealed a truly astounding estimate of their potential [8]. One hundred and thirty-eight Tcf of natural gas and nearly 3.9 Bbbl of crude oil reserves can be technically recovered from 59 million acres of federal land. This rises to 226 Tcf of gas and 6.3 Bbbl of crude oil once another 44 million acres of non-federal lands in the five basins are included. These reserves estimates are based on a study by the U.S. Geological Survey, which identified an equally astounding 183 Tcf-roughly the current value of proved natural gas reserves in the United States-of recoverable natural gas in the same areas [2]. Thus, constraints on domestic gas and oil exploration and development are not in the public interest. Although some 41 percent of the federal lands in the Rockies are completely closed to drilling, the vast majority of the hydrocarbon reserves are in areas where producers have some access [8]. In fact, an estimated 57 percent of oil and 83 percent of gas reserves are available under standing leasing terms, and this rises to 85 percent of oil and 88 percent of natural gas reserves if leases with various manageable degrees of restrictions are included. But the focus on leasing in this study did not take account the numerous obstacles producers routinely confront in the permitting stage. In any event, this study illustrates that we need to reach an understanding among the various interest groups that develops a rationale for greater U.S. self-sufficiency in hydrocarbon