24: Energy Issues
04-03-2006
Gas Prices (last updated October 25, 2005)
U.S. retail gasoline prices have increased dramatically in recent years, with retail gasoline prices increasing from about $1.00 a gallon in January 2002 to $2.20 in April 2005. Prices jumped to $3.04 per gallon in the wake of Hurricane Katrina, which struck the Gulf Coast states and the oil refineries there, and then declined to $2.56 per gallon by late October.
Prices as of early September 2005 were highs even when inflation is taken into account; gasoline in the 1970s cost around $3 per gallon when adjusted. The following graph was developed from Energy Information Administration data from early August 2005 and does not reflect the post-Katrina price jump.
Sources: Data on historical gas prices is available via the Energy Information Administration on-line here. Inflation-adjusted data is available as an Excel file on-line here.
Energy Consumption in the United States (last modified November 15, 2001)
Oil Supply in the United States (last modified November 15, 2001)
Surprisingly, domestic oil production was the source of most of the petroleum used in the United States up until 1994, when imports surpassed production for the first time. Now, about 60 percent of U.S. petroleum comes from overseas, and 20 percent overall comes from Persian Gulf nations such as Saudi Arabia.
Strategic Petroleum Reserve (last modified December 30, 2001)
Created in the wake of the 1973-74 oil embargo, the Strategic Petroleum Reserve is a complex of four federal sites that store about a half billion barrels of crude oil in deep underground salt caverns along the Texas and Louisiana Gulf Coast. Such stockpiles help reduce the United States' vulnerability to interruptions in its oil supply.
Currently, the Strategic Petroleum Reserve holds about 540 million barrels of crude oil; its current storage capacity is 700 million barrels and its highest inventory was 592 million barrels in 1994. On November 13 2001, in the wake of the September 11 attacks, President George W. Bush ordered the Secretary of Energy to increase the reserves to full capacity using principally royalty oil from federal offshore leases. Before Bush's order, the SPR's capacity had been maintained at levels around 550-600 million barrels since the late 1980s, but the cushion it provides has gone down as the United States has increased gas consumption and become more dependent on petroleum imports; the reserve's supplies could meet U.S. oil needs for 115 days in 1985, and just 53 days in 2000.
Oil can be withdrawn from the SPR for sales in the event of a national energy supply shortage or for test sales, and it can be exchanged with oil producers who will replace the supplies either simultaneously or at a later time. Such drawdowns take 15 days from presidential decision to entry into the marketplace, and up to 4.1 million barrels can be withdrawn a day for 90 days; the Reserve reportedly could release oil into the market continuously for nearly a year and a half.
There has been only one emergency drawdown of the SPR for the sale of crude oil. In January 1991, as the United States began attacks against Iraq in retaliation for its invasion of Kuwait five months earlier, President Bush ordered the release of crude-oil supplies to help stabilize world oil prices. Ultimately, 17 million barrels were released.
Oil has also been released several times as exchanges with private companies. Most recently, in September 2000, President Clinton ordered the release of up to 30 million barrels of crude oil to relieve domestic shortages and stabilize heating costs. This move was criticized by some as a political move to help presidential candidate Al Gore. In any case, any oil released at this time was to be replaced by oil companies a year later when prices were expected to be lower.
Sources: The Department of Energy's Strategic Petroleum Reserve website, available here.
Gasoline Prices and Taxes (last modified November 21, 2002)
Gas prices in the United States remain far below what they were in the late 1970s and early 1980s and have largely remained constant in recent years. Taxes on gasoline in the United States made up about 27 percent of the price of gasoline in September 2002, lower than in other leading countries, according to statistics by the International Energy Agency.
Gasoline in other countries is much more expensive than in the United States, largely due to higher taxes that can make up most of the price to consumers. The pre-tax price of gasoline in the United Kingdom and the United States is about the same, but gasoline taxes in the United Kingdom are about 8.8 times as much as in the United States, thus making gasoline 3.3 times as expensive. Similarly, higher taxes in other countries make gasoline much more expensive : France's gasoline taxes are 7.3 times as much as in the United States, Japan's 4.8 times, and Canada's 1.9 times.
Such relatively low gasoline prices help explain the growing demand for petroleum in the United States. Demand fell in the late 1970s and early 1980s, but has now surpassed that earlier period. At the same time, oil sources have shifted, so that the United States now imports more oil than it produces domestically, increasing the country's reliance on foreign oil even more than before. Now, about 60 percent of U.S. petroleum comes from overseas, and 20 percent overall comes from Persian Gulf nations such as Saudi Arabia.
Permanent storage of high-level radioactive waste, Yucca Mountain (last updated July 10, 2002)
Around the United States, high-level radioactive waste is currently stored in 131 temporary storage facilities in 39 states, 10 of which are shutdown reactor sites for which security would otherwise not be required. In all, more than 161 million Americans reside within 75 miles of locations where waste is stored.
Under plans begun in the early 1980s, such waste would be moved to a permanent facility in the Death Valley region of Nevada which would be more isolated geographically and geologically than their current storage facilities and which is expected to accept waste for 100 to 300 years and store such waste for 10,000 years. These plans were developed over twenty years of research and cleared major legislative hurdles in 2002.
On February 14, 2002, Secretary of Energy Spencer Abraham formally recommended the deep underground site at Yucca Mountain for development, and President George W. Bush submitted the recommendation to Congress the following day.
However, Nevada Governor Kenny Guinn vetoed the recommendation on April 9, but both houses of Congress passed a resolution overruling the veto within a few months of the veto; the House did so on May 8 and the Senate did so on July 9. The State of Nevada had established a legal fund dedicated to stopping the Yucca Mountain project; this fund had $6 million as of mid-March 2002 ($4 million from the state legislature, about $1.5 million from Nevada's cities and counties, and some from private contributors).
Now that Congress has overriden Nevada's veto, Energy Secretary Abraham will submit an application to begin construction of the facility. Even if the Yucca Mountain site's application were to be approved immediately, the facility will take years to construct and will probably not be operational until sometime in or after 2010.
The federal government began debating what to do about radioactive waste in the 1950s (the first commercial nuclear power plant became operational in 1957). Finally, in 1982, Congress passed the Nuclear Waste Policy Act (NWPA), which adopted geologic disposal as the United States' long-term strategy for isolating radioactive wastes safely. The NWPA directed the Department of Energy to identify potential sites for the first repository, and that all disposal activities would be funded by a fee on the commercial generation of nuclear power, which goes into the Nuclear Waste Fund.
In 1983, the DOE selected nine candidate repository sites: Yucca Mountain in Nevada, two sites in Mississippi, two in Texas, two in Utah, one in Washington, and one in Louisiana. The DOE then began narrowing down the choice from these nine candidates to three and finally to one, but Congress decided in 1987 to direct the DOE to focus solely on its leading candidate, Yucca Mountain.
Since then, the DOE has conducted studies confirming that Yucca Mountain would be a suitable repository for nuclear waste. Yucca Mountain is located in the Death Valley region, which is a closed hydrologic basin so that water would drain inwards and not into any rivers or oceans. Yucca Mountain is more than 90 miles from Las Vegas, and thus farther away from a major metropolitan center than most nuclear facilities.
The facility will be built so that waste can be retrieved, in case alternative methods of disposal become more viable over the next few centuries. Some alternative methods presently include reprocessing spent nuclear fuel and the accelerator transmutation of nuclear wastes (which reduces the amount of long-half-life actinides in spent fuel), but both methods produce high-level radioactive waste as well.
Spent nuclear fuel is the byproduct of producing electricity from nuclear power. Nuclear fuel generally consists of small pellets of enriched uranium, which are packed into tubes that are then bundled together to form nuclear fuel assemblies. These assemblies are then placed inside a nuclear reactor where the nuclear fission process takes placed, which produces heat that is used to generate electricity.
Fuel assemblies are used for about 18 months before they no longer produce enough heat energy to sustain a nuclear reaction. But because they still emit radiation, such spent fuel assemblies must be isolated for thousands of years until the radiation decreases to acceptable levels found in nature.
Spent fuel assemblies are initially stored at the reactor site in specially treated water pools lined with concrete and steel; the water cools the spent fuel and shields workers from radiation. Assemblies are then sometimes stored in dry storage systems, such as casks made of heavy concrete or steel.
Civilian nuclear reactions had produced more than 40,000 metric tons of spent nuclear fuel by 1999, and the total inventory is expected to reach 62,000 metric tons by 2010.
Almost by definition, spent nuclear fuel and other kinds of radioactive waste would not be useful for terrorists seeking to build a nuclear explosive device, since such materials can no longer produce fissile reactions. Still, such materials do produce radiation and heat, and thus are dangerous to public health unless properly stored and disposed of.
Even if the fuel assemblies were not spent, commercial reactors use low-enriched uranium, which is composed of only 3 to 5 percent uranium-235, the fissionable isotope used in nuclear reactors or weapons; the uranium from fuel assemblies would have to concentrated to more than 90 percent uranium-235 to be weapons-grade material. Any terrorist seeking to build a nuclear device thus would be better off targeting Russian stockpiles of highly-enriched uranium, which US-Russian cooperative efforts are trying to reduce (for more, go here).
For more on how such waste would be transported to Yucca Mountain, go here.
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Transportation of Radioactive Waste (last updated April 3, 2002)
For a 30-year period beginning around 1970, the government and industry groups have transported more than 10,000 spent nuclear fuel assemblies in more than 2,700 shipments over more than 1.6 million miles. There have been a handful of accidents involving transport vehicles, but none has ever resulted in the release of any harmful amount of radioactive material.
Spent nuclear fuel is the byproduct of producing electricity from nuclear power. Nuclear fuel generally consists of small pellets of enriched uranium, which are packed into tubes that are then bundled together to form nuclear fuel assemblies. These assemblies are then placed inside a nuclear reactor where the nuclear fission process takes placed, which produces heat that is used to generate electricity.
Fuel assemblies are used for about 18 months before they no longer produce enough heat energy to sustain a nuclear reaction. But because they still emit radiation, such spent fuel assemblies must be isolated for thousands of years until the radiation decreases to acceptable levels found in nature.
Spent fuel assemblies are initially stored at the reactor site in specially treated water pools lined with concrete and steel; the water cools the spent fuel and shields workers from radiation. Assemblies are then sometimes stored in dry storage systems, such as casks made of heavy concrete or steel.
Around the United States, high-level radioactive waste such as spent nuclear fuel as well as waste from the production of nuclear weapons is currently stored in 131 temporary storage facilities in 39 states. In all, more than 161 million Americans reside within 75 miles of locations where waste is stored. If a proposed permanent facility is built at Yucca Mountain in Nevada, waste would be transported there .
Transportation of nuclear waste is strictly regulated, both as to how spent fuel is packed and how it is taken from one point to another.
As for packaging, spent nuclear fuel is shipped in containers or casks that shield and contain radioactivity and dissipate the heat. These casks are extremely durable; they must be able to withstand a free drop equivalent to hitting a hard surface at 120 miles per hour, a sharp puncture impact, a fire at 1475 degrees Fahrenheit, and immersion in deep water without a breach. A cask is pictured below:
As for transportation itself, the Department of Energy provides formal notification of the shipment of high-level radioactive materials to the Nuclear Regulatory Commission, the Department of Transportation, and to the governors of all states through which the material is transported. All routes are surveyed by the Nuclear Regulatory Commission and are limited to specific interstate highways, and all shipments are tracked by the satellite-based automated system TRANSCOM and involve check-ins every two hours.
In addition, the Price-Anderson Act provides up to $9.43 billion to cover claims arising from accidents in which radioactive materials were released. The Department of Transportation also requires motor carriers to have at least $5 million in private insurance coverage that would be made available in the event of other accidents.
Spent nuclear fuel would be of little use to any terrorists who sought to build an explosive device since, by definition, the fissile activity in the fuel has depleted enough that it cannot provide the basis for a fissile explosion.
Even if the fuel assemblies were not spent, commercial reactors use low-enriched uranium, which is composed of only 3 to 5 percent uranium-235, the fissionable isotope used in nuclear reactors or weapons; the uranium from fuel assemblies would have to concentrated to more than 90 percent uranium-235 to be weapons-grade material. Any terrorist seeking to build a nuclear device thus would be better off targeting Russian stockpiles of highly-enriched uranium, which US-Russian cooperative efforts are trying to reduce (for more, go here).
Nonetheless, terrorists could still accomplish other goals with an incident involving spent nuclear fuel, such as causing a radiological incident or embarrassing a government.
South Carolina vs. Department of Energy (last updated June 26, 2002)
The recent conflict between South Carolina and the federal government over the transportation of nuclear material stemmed from efforts to close a Colorado site involved in developing nuclear weapons during the Cold War.
In 1997, the Department of Energy designated the Rocky Flats Environmental Technology Site in Colorado as a site for accelerated cleanup and closure by 2006, four years ahead of schedule, a move that would save an estimated $1 billion and would move nuclear material to more secure facilities elsewhere in the country. On April 19, 2002, Energy Secretary Spencer Abraham specifically authorized the transfer of six metric tons of surplus plutonium from Rocky Flats to the Savannah River Site in South Carolina for eventual conversion into nuclear-reactor fuel.
Arguing that the transportation of nuclear material into South Carolina was unjustified and would pose new risks of terrorist attack, South Carolina Governor Jim Hodges challenged Abraham's decision in federal court in May 2002. Rejecting the governor's arguments, Federal District Judge Cameron McGowan Currie entered a judgment in favor of the federal government on June 13, 2002, two days before the first shipment possibly could have arrived.
Nonetheless, the very next day, Gov. Hodges issued Executive Order No. 2002-14, which declared a state of emergency in South Carolina. Noting the recent detainment of Jose Padilla and the allegations that he was thinking of developing a so-called "dirty bomb" that would irradiate an area, Gov. Hodges prohibited the transportation of plutonium on South Carolina roads and highways and ordered the South Carolina Department of Public Safety to prevent such material from entering the state. He even sent law enforcement officers to a crossroads near the Savannah River Site to check trucks for any plutonium shipments.
Less than a week later, on June 20, 2002, Judge Currie declared Hodge's order null and void, sternly noting that the governor's action was clearly unconstitutional and was not permitted under federal law. The court also noted that Hodge's deployment of law enforcement the day before the earliest shipment could have occurred indicated that "this action may have been intended primarily to gain media attention."
Hodge agreed to abide by the court's order.
While defending its actions in court, the Department of Energy argued that storing the surplus plutonium at the Savannah River Site would benefit the entire country by allowing greater security measures at a smaller number of sites, and because it would allow for a quicker cleanup of the Rocky Flats facility. The court accepted these reasons as worthy of consideration, though it rejected other reasons offered by the government.
South Carolina's situation involved nuclear material from weapons-production facilities but is still largely analogous to recent discussions about the transportation and disposition of nuclear waste from civilian facilities. First, Congress is considering approving the development of a permanent repository at Yucca Mountain despite opposition from the State of Nevada. For more on Yucca Mountain, go here.
Second, it is worth noting that there have been many shipments of spent nuclear fuel without any significant incident. Over a 30-year period, the government and industry groups have transported more than 10,000 spent nuclear fuel assemblies in more than 2,700 shipments over more than 1.6 million miles. While there have been a handful of accidents involving transport vehicles, none has ever resulted in the release of any harmful amount of radioactive material.
Alternative fuels (last modified September 21, 2002)
Alternative fuels still have a long ways to go before significantly reducing gasoline consumption in the United States.
Despite advances in alternative fuels, gasoline and diesel gas are still the main source of transportation fuel consumption. Gasoline (not including reformulated gasoline) comprised 74.5 percent of total transportation fuel consumption in 2000, diesel gas 22.7 percent, and all alternative fuels (including reformulated gasoline) just 2.8 percent.
Not counting reformulated gasoline, there are several kinds of "true" alternative fuels, which altogether comprised 0.2 percent of total fuel consumption in 2000. Some types are listed below, in order of their share of the total fuel consumption in 2000.
- Liquefied petroleum gas (0.150 percent). A mixture mostly containing propane, LPG is a by-product of natural gas processing or petroleum refining. It is a gas at room temperature but a liquid when compressed.
- Compressed natural gas (0.058 percent). Natural gas, which is a mixture of hydrocarbons extracted from underground reserves, is used as an alternative fuel either in compressed or liquefied forms.
- Liquefied natural gas (0.004 percent). Natural gas, which is a mixture of hydrocarbons extracted from underground reserves, is used as an alternative fuel either in compressed or liquefied forms.
- Methanol-gasoline blend (M85) (0.004 percent). Methanol is a liquid alcohol fuel made most commonly from natural gas, and it is used as alternative fuel in several different forms, the most common being a blend of 85 percent methanol and 15 percent gasoline.
- Ethanol-gasoline blend (E85) (0.002 percent). A liquid alcohol fuel that can be made from biomass feedstocks, ethanol is used as an alternative fuel as part of a blend of 85 percent ethanol and 15 percent gasoline. Ethanol has had strong political support among Midwestern farmers.
- Electricity (0.001 percent). Electric vehicles are of three types: battery-powered, fuel cell, and hybrids. Battery-powered electric vehicles use electricity on onboard rechargeable batteries, fuel cell vehicles convert chemical energy into electricity, and hybrids may use fuel cells along with a gasoline engine. Electric vehicles outnumbered gasoline-powered automobiles at the beginning of the 20th century, but became less popular once cheaper methods of using gasoline were developed.
Other forms of alternative fuel being used or developed explored include biodiesel fuels (made from natural sources such as vegetable oils and animal fats), hydrogen gas (being developed for use in compressed or liquid forms), P-series (a new kind of liquid fuel for spark-ignited engines), and solar energy (not yet in public use).
Sometimes considered an alternative fuel, reformulated gasoline (RFG) is gasoline that has had oxygenates added to reduce toxic emissions. RFG is used much more than true alternative fuels, comprising 92 percent of the alternate fuel consumption in 2000, and the Clean Air Act of 1990 requires its use in the cities with the worst smog pollution. The most common additive is methyl tertiary butyl ether (MTBE), followed by ethanol. Such reformulated gasoline comprises about 92 percent of alternative fuels used in 2000; MTBE-based RFG comprised 69.4 percent, and ethanol-based RFG comprised 22.6 percent.
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