Woolsey said during a session called "Energy, Seciruty and the Long War of the 21st Century) that, because we're so dependent on oil and two-thirds of it is in the Persian Gulf, oil dependency is a security issue. While America's electric grid is vulnerable (remember how one tree in Ohio plunged many states into darkness a few years ago?), and terrorists are smarter than trees), at least the grid is here in the U.S. where we can control and modify is. That gives us - and plug-in hybrids (PHEVs) - the advantage.
Continue reading after the jump.
Because oil is easy to transport, and because it has a high energy value, a lot of the global infrastructure has been set up to use oil, Woolsey said. A successful terrorist attack on Saudi sulfur refineries (something Al Qaeda tried last year) could take billions of barrels off the market for a year or two while the refineries are rebuilt. This would "certainly" push the price of a barrel of oil up to $200, Woolsey said, and then there would be a lot of pressure to find alternatives. But, in the '70s and again in the '90s, when there was an interest in alternative fuels, the Saudis drove the price of a barrel of oil down (to about $5 and $10, respectively) and the interest faded. Because of this price fixing ability (only two of the top 10 oil producing states are democracies), "oil does not operate on a free market," Woolsey said.
The end game is that most green car alternatives look good on a spreadsheet when compared to a $30 barrel of oil. Woolsey said he doesn't expect the Saudis to try and drive down to cost of oil to wipe out the cellulosic energy firms because they can't, in the end, beat 1-2 cents a mile electricity. "The chance that they would embark down that course if we have a vigorous plan for PHEVs is unlikely," he said.
The other threat to oil supplies is riding sea levels from global warming – remember, transportation is second to electricity generation to CO2 emissions. Woolsey said that paying for gas not only gives money to madrasas to teach Pakistani kids to become suicide bombers, but also contributes to global warming, so we're losing on both fronts.
So what are the alternatives?
Woolsey said that hydrogen should not be on the front burner for alternative fuel research. He said one estimate is that it will take a trillion dollars to put a hydrogen fueling network in place. He said he tends to think that the only way that hydrogen is useful for transportation is for fleet vehicles with a central fueling station. Offshore drilling is another option, but doing so in ANWR is not a good idea (because of the environmental issues and the vulnerability of the pipeline). Offshore drilling is better (if done right) and finding oil in tar sands may well work, too, but CO2 emissions are high and these facilities will need to operate in such a way as to capture and sequester a large amount of the carbon.
Two things that are the most interesting and the most potentially creative for creating early change, Woolsey said, are two relatively inexpensive types of fuel. The first is turning biomass or waste products into ethanol or butanol. Butanol can be used in pipelines and has the same amount of energy as gasoline. Also, diesel products from waste are being created, and some of them are being refined further into gasoline. We're not just talking about a single process, but a group of strategies moving away from petroleum not only in fuel, but also for chemicals, Woolsey said.
The second process to focus on is plug-in hybrids. Woolsey said he thinks that most Americans are going to like the idea of having the flexibility of driving on low-cost electricity most of the time while having liquid fuel in the tank (hopefully ethanol or biodiesel or biobutanol) as a back-up, which gives America a market for both electricity and biofuel as transportation fuels. Electricity is also an incredible bargain, he said, for in some parts in the country, overnight charging is as low as 2 cents a kWh. Even in areas where it's more expensive on average, it still translates to 1-3 cents a mile, vs. 10 cents a mile for gasoline. Consumers will think that driving at 1/5th the cost is "not bad" and most consumers, those who don't drive more that 20 miles a day, will keep their little bit of liquid fuel in the tank for a long time. Also, this model gives the utilities and consumers and agribusiness a way to work together.
As for the overall chances for success, Woolsey said he senses a mood in the country like at the start of the Internet boom, where a lot of smart people and a lot of venture capital are moving forward. Plus, he said, to bring PHEVs to market, each family's investment in the PHEV infrastructure will be nothing but an extension cord.
That last bit is, to me, a serious simplification, but Woolsey is a strong advocate for PHEVs, and he's someone people listen to. We'll be checking in with him again and again over the years, I'm sure.