April 21, 2006 3:22 PM PDT

A long road to a clean planet, academics say

PALO ALTO, Calif.--Earth Day is almost here, and academics at Stanford University would like to remind you that cleaning up the planet won't be easy.

Oil prices and demand will likely continue to rise over the next several years and widespread adoption of clean energy alternatives will take quite a bit work, according to speakers at an economic forum held here at the university on Friday.

"I think we are entering a watershed era where we can expect high levels (of oil prices) not just for a transitory period, but for an extended period," said Jim Sweeney, a professor of management science and engineering at Stanford. "We are still dominated by the traditional sources of energy. If you want to deal with global climate change, you must come to grips with oil used in transportation and coal used for electricity generation."

Oil right now hovers around $70 a barrel and will stay at those levels through 2009, he said. It will decline to around $67 in 2012, according to data from the futures market.

Much of the profit from selling oil, moreover, will go overseas. ExxonMobil is often described as the largest oil company in the world, but it actually ranks No. 14 in terms of reserves. Thirteen national companies, including Aramco, sport larger reserves.

To compound the problem, more oil is coming from highly unstable countries like Chad, Iran, Angola, Russia and Venezuela, where political changes could throttle supply.

The challenge of moving away from fossil fuels is multifaceted. For one thing, many governments have not adapted their policies rapidly to encourage clean technologies. Progress does exist. Brazil has invested billions into producing ethanol out of sugar cane, so that it now gets about 40 percent of its transportation fuel from it.

In the U.S., however, fuel efficiency standards haven't been improved significantly since the mid-1980s, Sweeney said. Ethanol has recently been promoted somewhat heavily in the U.S., but it's only available in a few hundred gas stations.

Alternative technologies often also need subsidies to thrive. Hydrogen, for instance, costs about twice as much to produce as natural gas, said Gerald Rothwell, a professor of economics at Stanford.

"If we don't have a tax on CO2 emissions, it is going to be very hard to find investors for hydrogen," Rothwell said.

In addition, hydrogen is not completely clean, he added. Although hydrogen cars don't release greenhouse gases like CO2, manufacturing hydrogen generates quite a bit of it, Rothwell said. Currently, most manufacturers generate hydrogen by combining methane with water and heating up the mix to 815 degrees Celsius.

The reaction, though, produces 9.3 kilograms of CO2 for every kilogram of hydrogen. Sequestering CO2 underground is just evolving. Right now, hydrogen manufacturers mostly just release the CO2 into the atmosphere.

Perceptions about the costs of alternatives also play a part. Although many venture capitalists have begun to plunk money into solar and other technologies in recent years, investors generally have been pretty skittish, according to Eva Regnier, a researcher at the Naval Postgraduate School.

"People aren't investing into alternative energies because oil prices and electricity prices are really, really volatile and they don't want to make the commitment," she said. In reality, the price swings aren't as volatile as many believe, she added.

Moving toward alternatives also will take time. Even if solar and wind power grow twice as fast as the economy as a whole, they will provide only about 1 percent of the world's energy needs by 2030, predicted Michael Boskin from the Hoover Institution.

A whole-scale shift away from oil "would be impossible without causing an immense and long-lasting worldwide recession," he said. "But it doesn't mean that we can't make progress."

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