Kindling new US energy resources

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Anthony Mihalsky drives 100 miles each day, commuting from a suburb north of the Californian city of Los Angeles into the city centre each morning and back again at the end of the day.

It is not an unusual distance in LA – this is a city built for cars.

Sure, the freeways are often congested, but, as far as I could see, the culture of the middle-classes and the affluent in LA is to shun any public transport on offer.

But Anthony has made some important changes to his life in recent weeks.

With petrol prices hovering around four dollars per gallon, he decided to trade in his large four-wheel drive vehicle in exchange for a smaller sedan.

He also shares the ride into work with his friend Mike in order to cut costs.

A new reality.

They are California kids facing a new reality – that the big cars their parents enjoyed may be a thing of the past.

Anthony says: “Back then it was all about muscle cars, and who had the coolest car, whereas today its all about fuel efficiency and the most economical car.”

The small changes Anthony has made to his life are being replicated by millions of people in the US this summer.

The newspapers are full of stories of how more people are taking public transport, riding bicycles, or car-pooling. Energy has suddenly become the issue of the campaign.

John McCain, the Republican presidential candidate, is pushing nuclear power.

Car concerns

But the real heat and fury has been around the issue of whether to lift a ban on off-shore drilling for oil.

The Republicans argue that the estimated 18 billion barrels of oil in US waters are a resource the country cannot afford not to exploit.

Many Democrats point out that lifting the ban on drilling now would have little or no immediate impact on international oil prices.

In the meantime, for US car manufacturers these are desperate times.

For years, the so-called “Big Three”, Chrysler, General Motors and Ford, have poured resources into making large gas-guzzling four-wheel drives or sports utility vehicles (SUVs), helping to create a situation whereby the US, with only five per cent of the world’s population, is responsible for 25 per cent of all oil consumption.

The car companies say they were just responding to demand from the US consumer.

But that was in the era of cheap oil. Today the forecourts of American car dealerships are full of unsold SUVs and the Big Three’s share of the US car market has just shrunk to a record low.

General Motors, which reported a $15.5 billion loss in the last quarter, says sales of its larger vehicles have fallen by 23 per cent this year.

It is laying off thousands of people, closing down SUV plants and looking to sell its Hummer brand.

Radical solutions

We went to the state of Detroit and Motor City, to see what solutions GM can come up with to survive in this new environment.

For years, car manufacturers in Detroit resisted legislation intended to make cars more fuel efficient.

Now, belatedly, they are working on radical solutions. GM is pouring huge resources into an electric car, the Chevvy Volt, which it hopes to have on the market by late 2010.

The Volt will run on a rechargeable battery, which will power it for 40 miles. After this, it switches over to a petrol engine.

Given that most people in the US commute less than 40 miles a day, the economic, and environmental benefits could be dramatic.

Bob Boniface, one of the engineers at GM working on the Volt, agrees that his team is “under pressure”, although he denies that the company’s future depends on the success of the project.

Whatever happens, he sees fundamental changes in the US car industry as inevitable.

“Let’s face it, the economy has changed”, he says. “The price of fuel has gone up, energy security is a big concern, CO2 [carbon dioxide] emissions are a big concern.

“It’s a perfect storm coming together and there are a lot of reasons why getting off petroleum as a propulsion source make sense.”

Aiming high

In fact, all over the US today there is a race to develop renewable energies, and a furious debate on the relative merits of biofuel, biomass, solar power, wind power and hydroelectricity.

We travelled into the brutally hot Californian desert, to Palm Springs, where we met Dr James Walker, President of the American Wind Energy Association.

The valley outside Palm Springs is a forest of hundreds of towering white wind turbines.

Are they ugly? Some people think so, but Walker argues that wind is about to come into its own.

There has been, he says, a “convergence” in wind’s favour; the technology is getting cheaper, investors are putting more money in, and everything has been given a “tremendous urgency” by climate change fears and the rise in oil prices.

He hopes that, with government tax support, wind power will provide 20 per cent of US electricity by the year 2030.

That might sound ambitious, but perhaps he is right to aim high.

The US is waking up to the scale of its enormous energy challenge, but it is going to take very brave leadership to push the country in a new direction.

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