BOSTON, Mass. - The Honourable Spencer Abraham, former secretary for the U.S. Department of Energy, told members of the American Trucking Associations the current energy crisis is essentially self-ind...
TOPSY TURVY: ATA president and former Kansas governor Bill Graves spoke to members about the "mixed bag of successes and failures" the trucking industry experienced in 2006.
BOSTON, Mass. – The Honourable Spencer Abraham, former secretary for the U.S. Department of Energy, told members of the American Trucking Associations the current energy crisis is essentially self-induced and projected a bleak future if changes aren’t made to the country’s infrastructure and policies. He delivered his keynote speech at the ATA’s Management Conference and Exhibition in Boston Oct. 17.
Abraham, whose stint with the Department of Energy began in January 2001 as part of George W. Bush’s government, said he was not always the energy advocate he is today. In fact, he once served as a co-sponsor to eliminate the department altogether.
But once Spencer took his post, he soon realized the significant challenges in the energy sector.
“I was incorrect in the need for the Department of Energy,” he told the group of industry executives.
He said the instability of the energy marketplace became all too apparent during his government service, with the prices of fuel taking a nasty spike upward, as well as the infamous blackout in the summer of 2003.
“The problem is we seem to have an infinite amount of demand with a finite amount of resources,” he said.
But Abraham conceded that many of the energy woes now faced by North Americans are often self-imposed restraints. For one, no new nuclear plants have been built since the 1970s. Despite the nation’s unwillingness to welcome nuclear power, Abraham said that investing in nuclear is vital and may hold the key to many of the country’s present energy troubles.
“If we don’t do anything, the total amount of power produced by nuclear will decrease…meaning other venues will have to pick up the slack,” he said.
One of the main problems holding back further development of nuclear technology is a sheer lack of places to store the waste it produces. Abraham said that burying the waste deep underground is a proven solution, as tests for possible fallout from volcanic or seismic activity have shown the waste will remain undisturbed with no threat to life above ground. However, legislation problems have impeded this process at the moment.
As well, North Americans are using more fuel than ever before. Abraham estimated that the total number of barrels of oil used in America per day could rise to about 130 in the next 20 to 25 years. He also said the overall need for energy will increase by 30 per cent in the same time period if current trends continue.
Fuel price spikes have occurred not only because of mere consumption coupled with recent natural disasters like Hurricanes Katrina and Rita, but also because of a lack of a national diesel fuel standard which generates inconsistencies in regional prices and localized supply shortages. With local supplies running thin, Abraham estimated that 25 per cent of natural gas will have to be imported in the near future.
In order to balance this startling trend, Abraham said there is a significant need for better investment in biofuel. Because of a continuing dependence on import oil and domestic restraints on energy production, biofuel represents a very affordable alternative that’s within reach – it just needs to be legalized.
Overall, Abraham said that the U.S. has under-invested in domestic refining capacity increasing its dependency on foreign sources of crude oil and refined petroleum products – despite the fact that U.S. oil refiners operated at near full capacity. Abraham concluded that the government needs support from the trucking industry as it moves to better the energy crisis.
Abraham called and the industry answered.
On Oct. 18 at the ATA’s executive meeting in Boston, members unanimously endorsed an energy resolution outlining the organization’s efforts to combat escalating fuel prices and help shape a comprehensive national energy plan. The resolution calls for increasing the diesel fuel supply; improving the balance between environmental concerns and fuel efficiency; eliminating boutique diesel fuels; and endorsing the limited use of biodiesel as part of the national diesel fuel standard.
“Given the trucking industry’s reliance on available and affordable diesel fuel to move America’s goods and products, we urge the government to act quickly and strongly on our suggested initiatives,” said ATA president and CEO, Bill Graves. “Our current economic conditions require strong actions as part of a comprehensive national energy plan that enables us to deliver America’s goods. The national economy depends upon a healthy and viable trucking industry.”
Few industries feel the pinch of rising fuel costs more directly than trucking, with commercial trucks consuming about 50 billion gallons of fuel each year. At current prices, the trucking industry is projected to pay a record $85 billion for diesel fuel this year, a record $23 billion more than in 2004.