Where Our Energy Will Come From

From seabed gas to pebble-bed nukes, a scouting report on tomorrow's sources.

The way we produce and consume energy hasn't changed much in decades. Sure, you might spot the occasional hybrid gas-electric car or a high-tech windmill. But research in the field hasn't been energetic. No surprise there: Except during the crises of the '70s, fossil fuels have usually been cheap and abundant. The next few decades promise to be vastly different. Driven by escalating prices, geopolitical instability, global warming, and pollution, governments and companies around the globe are stepping up the hunt for new ways to power the economy. The ambitious goal: plentiful, clean, and secure forms of energy and less wasteful ways to employ them.

The effort spans everything from hydrogen-powered cars to safer nuclear reactors to solar power, efficient lighting, and methane from the ocean floor. Of course, some of the efforts may never pay off. The nearly $10 billion spent by the U.S. Energy Dept. on nuclear fusion research, for example, has borne little fruit. And private companies might unplug their energy research if prices drop again. Still, the pressure for breakthroughs is stronger than it has ever been. "We must find alternatives," says Amos M. Nur, a geophysics professor at Stanford University, who calculates that world oil output is near its peak. "If we don't, we'll soon be in big trouble."

Here are some of the technologies that could make a difference in the next couple of decades:

HYDROGEN REDUX

As far back as the late 1700s, city streets, public buildings, and homes in Europe were lit with a hydrogen-rich gas derived from baking coal. Town gas, as it was often called, remained widely used in much of the world until the early 1900s, when the marketplace moved to natural gas or electricity. Now, governments of many industrialized countries are trying to bring hydrogen back -- this time as the motor fuel of the 21st century.

The move to hydrogen has already begun -- slowly. Major carmakers have developed engines that can run on the lighter-than-air element instead of gasoline. They also know how to manufacture fuel cells that combine hydrogen and oxygen to generate electricity, with double the energy efficiency of the internal combustion engine. Iceland, which has abundant geothermal energy for separating hydrogen, already has hydrogen-powered buses and filling stations. The government there has vowed to switch the entire economy over to hydrogen within 50 years.

Even hydrogen proselytizers acknowledge, however, that immense obstacles remain. What's still lacking -- and essential -- is a cheap, nonpolluting way to generate the energy to derive pure hydrogen, which comes from either water or hydrocarbon fuels such as methane. Also, on a horsepower basis, fuel cells cost five times as much to make as internal combustion engines. And the fuel tank in today's prototypes takes up the whole trunk.

In the U.S., the Energy Dept. is spending $1.7 billion over five years to chip away at these problems. Researchers have already cut fuel-cell manufacturing costs by 95% since 1990. If they can reduce those costs further, the payoff could be big. If just one in 100 cars and light trucks in the U.S. were fueled by hydrogen, 4 million gallons of gasoline would be saved every day.

PEACEFUL NUKES

A new nuclear race is under way, and this one is peaceful. As early as next year, rival quasi-governmental teams in China and South Africa aim to begin building commercial-scale atomic reactors that would depart radically from current designs. A similar plant in the U.S. could be close behind: Introducing the PBMR, or pebble-bed modular reactor.

Today's nukes are behemoths that use rods of uranium undergoing fission to make superheated steam, which in turn drives turbines to generate electricity. PBMRs, for their part, are compact units fueled by thousands of ceramic-encased orbs of uranium, each about the size of a billiard ball, which heat a chamber of helium to spin the generators. By using helium instead of steam, the plants should be at least 35% more efficient. Pilot projects have shown the design to be inherently safer: The ceramic shell locks in radioactive by-products, and the nuclear reaction slows as the chamber gas gets hotter, a safeguard against a meltdown.

Pebble-bed modular reactors aren't perfect. They still produce nuclear waste that would remain dangerously radioactive for ages. But industry and government are starting to rethink nuclear power as other fuels lose favor. Without new technology, coal is on the outs because it's dirty and emits greenhouse gases, while cleaner-burning natural gas has become pricey. Uranium is inexpensive and doesn't dirty the air.

Authorities in China and South Africa expect to have demonstration plants online around 2011. China, in fact, is talking about building over the next 20 years 30 such reactors to meet surging demand for electricity. In the U.S., the Energy Dept. is planning to sponsor a PBMR in Idaho, with a 2012 startup target.

METHANE MOTHER LODE

The U.S. is producing about the same amount of natural gas as it did 30 years ago in spite of soaring demand. Improved technology can't overcome the depletion of fields. As a result, natural-gas prices in the U.S. have more than doubled since 1999. The solution could come from a surprising place: the sea bottom.

Buried just below the ocean floor along the continental slopes as well as in the Arctic permafrost are vast deposits of crystallized natural gas suspended in ice, known as methane hydrate. The U.S. Geological Survey reckons global reserves of methane hydrate contain twice as much energy as the world's proven deposits of oil, natural gas, and coal combined.

But no one has yet figured out how to exploit this energy source economically. Methane hydrate is too dispersed among the sediment to be pumped to the surface like gas or oil. Dredging doesn't work well, either, because it would mean scooping up tons of muck and hoisting it to the ocean surface for separation.

Working with the Energy Dept., ChevronTexaco Corp. (CVX ) is heading an international consortium that has identified sites in the Gulf of Mexico that appear to contain storehouses of methane hydrate. The oil giant plans to sink wells next spring to bring up core samples and get a better idea of how to recover the gas. Energy-short Japan and India are also digging into methane hydrate. Researchers hope to hit pay dirt by 2025.

INTERIM SUPPLY STRETCHERS

Incremental innovations in other arenas could tide the world over until these longer-term solutions are realized.

Imports of natural gas could ease the supply squeeze within a few years. Following the example of Japan, South Korea, and Western Europe, American energy companies have filed plans for some 40 ship terminals that would allow for a vast increase in imports of super-cooled, liquefied natural gas on specially made ships. Sempra Energy (SRE ) is furthest along. The San Diego company plans to begin building an LNG receiving terminal in Louisiana and another in Baja California later this year. By 2007, the company says, at least three terminals will be completed.

Other companies are working on lighting technologies that extend power supplies. Many municipalities are installing signs with clusters of light-emitting diodes instead of incandescent lights. They consume one-tenth the electricity and last up to 100 times as long. General Electric (GE ), Royal Philips Electronics (PHG ), and other companies are racing to come up with affordable diodes that will work in regular room settings.

Solar power is advancing, too. Photovoltaic panels -- thin sheets of semiconductors that turn the sun's photons into electricity -- are becoming more common in Japan and Germany, where governments are funding research, and in developing areas such as rural India and Nigeria, which often lack an electrical grid. As costs sink and efficiency rises, solar power could be "a huge opportunity," says Stephanie A. Burns, CEO of Dow Corning Corp., the leading producer of silicon for solar panels. "We're right on the cusp between what's an engineering project and what's a real product," adds Daniel P. McGahn, executive vice-president at Konarka Technologies Inc., a Lowell (Mass.) company that is trying to build solar power capacity into a wide variety of products. "We want to cut that final wire."

Decades from now, the world's commuters may still be driving gasoline-powered cars. And power plants, retrofitted to further reduce emissions, may still be burning coal. But who knows? Given the potential of the energy projects under way, they may be as rare as hybrid vehicles and windmills are today.

By Michael Arndt

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