Atlanta, Georgia Remarks at the Presidential Energy Technology Seminar.

THE PRESIDENT. Thank you, everybody. It's good to be home.

SUMMARY OF FIRST SESSION

DR. PRESS. Mr. President, we have convened this energy technology seminar at your request. We've gathered the Nation's leading experts to brief you on how American science and technology can contribute in the years ahead to help alleviate our .energy problems. The Government research and development budget in energy is of the order of $4 billion per year, and the energy security trust fund will increase this substantially. Industry, universities are making substantial investments in energy research and development.

This, then, is a report on what the dividends of these research and development investments are likely to be. I believe you will see that domestic sources of energy can become available in the years ahead that will help reduce our energy dependence on foreign imports, will strengthen our economy, and will improve our national security.

So far, we've been running some 2 hours in these energy briefings, and I would like to spend a few minutes summarizing what has already been said this morning.

Energy conservation plays a key role in our energy strategy. It reduces our dependence on imported oil. It is cost-effective. It yields results more quickly than developing new energy supplies.

Dr, Edward Jefferson, who's the vice president of dupont Company—Dr. Jefferson, would you stand?—gave us a presentation this morning on the remarkable progress in conservation by American industry. In the past 4 years, there has been a saving of some 1 million—the equivalent of 1 million barrels of oil per day due to industrial conservation. And the chemical industry has one of the best records in conservation.

This is important, because the chemical industry uses some 8 percent of our total energy consumption. In 1978 alone, that industry has saved 130 million barrels of oil through conservation, and their goal is to effect a 30-percent reduction in energy required per pound of product by 1985.

And Dr. Jefferson described some of the measures that that industry has taken to achieve this goal; for example, the cogeneration of power and steam. In the generation of electric power, there's been a lot of waste heat. That waste heat is now converted into steam and used by the industry. They have better instruments to control the generation of power. And with more research and development, they will be able to substitute raw materials derived from coal and shale oil to replace as the feedstock for that industry the oil that is currently being used.

Our second speaker was Dr. Henry Linden, who's president of the Gas Research Institute. The U.S. energy consumption is of the order of 80 quads, and one-quarter of that today comes from natural gas. Dr. Linden suggested that the contributions of natural gas will grow in the next 20 years from 20 quads to 30 quads, and that's equivalent to an addition of 5 million barrels per day.

The largest source of this growth will come from the so-called unconventional natural gas. These are resources that are plentiful, perhaps as plentiful as the conventional gas that we've been used to, but they haven't been tapped in the past because of technological or economic reasons. Much of this gas occurs in tight formations, formations which are so impermeable that the gas doesn't flow readily to the producing wells. As a result of research and development programs, methods have been developed to fracture rocks, to make rocks more permeable so that the gas is more readily available in the future.

Dr. Linden estimates that there may be as much as 1,200 quads of natural gas, conventional and unconventional, available to us, and this is of the order of 40 to 50 years of supply at the current rates of usage.

Our third speaker was Dr. Lawrence Ybarrondo, who's Director of Water Reactor Research at the Idaho National Engineering Laboratory of the Department of Energy. He is an expert on nuclear reactor safety.

Nuclear energy accounts for some 13 percent of our electric power generation. And in some places, such as Chicago, 50 percent of the electric power comes from nuclear energy. In 1978 this was equivalent to about 1.6 million barrels of oil per day. However, nuclear reactor safety is the key element to the future of nuclear power. And Dr. Ybarrondo described how science and technology can further increase the safety of existing reactors and facilities. For example, he proposes to implant more sensors in the reactor and in the plant so that we can have better knowledge of the state of the facility on a continuing basis. These larger numbers of sensors, measuring the physical properties, the temperatures, the pressures, and the flow rates and so on, will be monitored by computerized systems which collect, organize, and display the data instantaneously on the state of the plant.

The computers can verify the plant readiness to cope with any potential emergency. In the case of an emergency, this system would allow the operators to make constructive choices of what to do, and the computer would predict the outcome of all of these various choices.

This technology is actually state of the art; it's being done today in other industrial sectors—the aerospace industry and so on. It's being done today on test reactors in Idaho. So, this is certainly an important avenue for improving our reactor safety.

The fourth speaker this morning was Dr. Douglas Balcomb, who is in charge of solar programs and conservation at the Los Alamos National Laboratory. Some 30 percent of our energy use goes to heat and cool residential and commercial buildings and to provide hot water, so conservation and the use of the Sun in this area is extremely important.

Dr. Balcomb showed us some remarkable examples of residences in which conservation and the use of the Sun in a passive way has led to clean, cost-effective energy use. These technologies, he points up, are available now. They make use of all sorts of new materials and devices and new design concepts in building homes. The investments in conservation and passive solar can lead to extremely attractive residences, and these investments will save sufficient energy to pay the homeowner back in 10 years.

The fifth speaker, and the last speaker in the morning session, was Dr. Norman Hackerman, who's president of Rice University and Chairman of the National Science Board. He spoke about enhanced oil recovery.

Some 450 billion barrels of oil have been identified in place in the United States, but only one-third can be recovered by present technology. We leave twothirds of it behind in the ground by present methods. That's 300 billion barrels of oil that's left behind. That's more oil than Saudi Arabia possesses, and that's all in the ground in this country. If we can find ways to produce this oil, to induce it to move through the ground to the producer wells, we would gain an enormous additional source of energy. Dr. Hackerman believes that research and development will enable us to recover perhaps 10 percent of this immobile oil. And if we do this well—and that's only 10 percent of what we leave behind—this would be equivalent to three to four Alaskan oil fields.

And he told us about the different techniques we might use; for example, the injection of water and gases, such as carbon dioxide, increasing the temperature of the rock formations to make the oil flow more readily, and then injecting chemicals to loosen this immobilized crude oil so that we could pull it out.

This is a brief summary of the papers that have already been presented, and if you want to question or if any of the panelists or recipients of this briefing want to question some of these speakers, now would be an appropriate time.

INDUSTRIAL ENERGY CONSERVATION

THE PRESIDENT. I'd like to ask Dr. Jefferson how the other industries are doing in our country? I know that you spoke for the chemical industry, but is this a unique achievement, or are the other generic types of industries doing an equivalent job?

DR. JEFFERSON. Well, Mr. President, most of the industries have met or surpassed the goals that were set in the program developed by the Federal Energy Administration and the Department of Commerce 4 years ago. So, in essence, most industries are doing well.

THE PRESIDENT. Do you think the 30-percent goal by 1985 is the optimum that you all can achieve? Is that goal high enough?

DR. JEFFERSON. Well, that goal relates only to energy conservation. As you know, the chemical industry uses a great deal of petroleum and natural gas as raw material. The savings that can be achieved in the raw material area are additive to this as are, also, savings that would accrue from moving away from the scarcer petroleum and natural gas over to more plentiful fossil fuels. And all these three are getting attention.

THE PRESIDENT. I presume, since you've been so enthusiastic about it, that one of the motivations is cost-effectiveness and it has been a matter of saving for you

in production costs and—

DR. JEFFERSON. Yes, sir.

THE PRESIDENT. It's been a profitable thing?

DR. JEFFERSON. Yes.

THE PRESIDENT. Thank you very much. I might have some other questions later.

UNCONVENTIONAL GAS

Dr. Linden, one of the most doubtful issues that I had to face a few months ago when we were putting together our energy proposal for Congress was the unconventional gas production. We had estimates all the way from half a million barrels a day by 1990, up to 2 1/2 million barrels a day by 1990.

Within the constraints of predictable cost for production, compared with present projections, what would be your best estimate of how much we might realize from the unconventional gas sources by 1990? My parameters may not be good ones.

DR. LINDEN. The two resources, Mr. President, that are the most immediately developable are the Devonian shales in Appalachia and the tight sands in the Western Rocky Mountain States. Nearly all estimates that have been made indicate that there are on the order of 200 trillion cubic feet or quads of gas in these two sources, available at prices somewhere between $4 to $5 a million Btu at the wellhead and—which is equivalent to something like $24 to $30 a barrel, which is a price which we are afraid will soon be reached in terms of OPEC oil imports.

Several studies done for DOE and for us have indicated that somewhere between 5 and 8 trillion cubic feet from these sources alone could be produced as early as 1990 and, perhaps, as late as 2000. So, we're talking about supplements in the 2¼-million-barrel-a-day to 4-million-barrel-a-day range. Your particular initiative, the oil import reduction program, calls only for 1/2 to 1 million barrels a day equivalent by 1990.

I am very confident that we will meet this goal, in view of the legislative actions and regulatory actions that have been taken or proposed by you. So, we are quite confident that this will be exceeded under current conditions.

THE PRESIDENT. That was the most conservative estimate that we made, and it was done deliberately because of the doubt about the effort that would be underway. What is the degree of effort now being explored in getting these unconventional gas sources realized?

DR. LINDEN. We have large well drilling programs, wells of opportunity, and, actually, research wells in all of the four resources.

In the Devonian shale, there is a large drilling program jointly by industry, DOE, and my own organization. In the western tight sands, some very extensive stimulation work, hydraulic fraction work is underway.

In the geopressured zone, gas in the gulf, we have a 10-well drilling program underway, and you, I think, participated in launching of a project to recover gas from coal seams for rural development. So, we are making good progress. And DOE is currently spending on the order of $65 million a year on unconventional gas R&D, and we have proposed that it should be boosted to something on the order of $100 million.

But with these initiatives and the very heavy involvement of industry, as well, on a cooperative basis, I think we are well launched to realizing these targets.

THE PRESIDENT. SO, to summarize, you would say that by 1990 we have an excellent chance to have, say, 2 million barrels of oil equivalent per day at prices at least competitive with synthetic fuel costs?

DR. LINDEN. Absolutely.

THE PRESIDENT. That's much higher than we had anticipated or projected.

DR. LINDEN. Thank you.

THE PRESIDENT. Thank you, Dr. Linden.

NUCLEAR SAFETY

Mr. Ybarrondo, I just had .one question to ask. To what degree are you working with Dr. Kemeny and his committee? They'll be coming to me now, within the next month, with recommendations derived from the Three Mile Island incident about how nuclear power can be made more safe and operating and design features might be incorporated. Are you, or others associated with you, working with them on it?

DR. YBARRONDO. Indirectly, Mr. President. Some of the technical staff members to the Kemeny Commission have contacted us, and they have asked us to examine various options, for example, that the operators took during the course of the Three Mile Island incident.

Primarily, they're addressing the what if questions—"What if the operator did this in lieu of something else?" And we have been asked to make some computer code calculations for them. Those calculations are in process.

THE PRESIDENT. Is the computer control technique cost-effective? Does it replace enough personnel so that a power company looking for cost savings would initiate it?

DR. YBARRONDO. I'm not sure that it would specifically reduce the personnel enough to result in significant cost savings. But the use of the computer to look at potential defects and to allow them to operate the plant more efficiently, to decrease the downtime of plants due to mechanical failures or human errors would certainly be cost-effective.

THE PRESIDENT. One of the major problems with nuclear power now is the percentage of downtime, is it not?

DR. YBARRONDO. Yes, sir. It is.

THE PRESIDENT. What does that run—30, 40 percent, that high?

DR. YBARRONDO. On the order of that. The availability of the plant is not as high as it could be.

THE PRESIDENT. So, if the Kemeny report should recommend—I'm not anticipating-increased personnel from which could be derived increased safety, then the computer use would be more attractive under those circumstances, would it not?

DR. YBARRONDO. I believe so.

THE PRESIDENT. Thank you very much.

DR. YBARRONDO. You're welcome.

ENERGY CONSIDERATIONS IN BUILDING

DESIGN

THE PRESIDENT. I'd like to ask Mr. Balcomb one question. I'm not putting all the burden on you, but it seems that one of the major unfulfilled opportunities is to get the AIA with all the architects in the Nation and the major builders—to commit themselves in just standard designs of homes and public buildings to incorporate energy-saving features. To what degree is this being done? It's one of the things that I advocated in, I think, a national meeting of the architects in Atlanta when I was Governor. But I just wonder if the architects as a group are pursuing this without the customer asking for it necessarily. Can you answer that for me?

DR. BALCOMB. The AIA themselves have instituted a small program of seminars, directed specifically at their members, to teach them about passive solar design and energy conservation options. There are other signs. The recent April issue of Progressive Architecture, which is the leading magazine in that field, was entirely devoted to energy-conscious design, both related to energy conservation and solar applications.

In looking at the response to other seminars and information, instructional media and so forth, the response of the architects has been very good. A lot of this is coming from public demand. They are getting a lot of people walking in the door who want to do it. So, I think it is happening, yes, sir.

THE PRESIDENT. Well, there's no question that the customer is well served with an increase in insulation or decrease in window space or thickness of walls and so forth, with increasing prices of energy, right?

DR. BALGOMB. No, that is certainly not questioned. I have not seen an example where it's been done where it was not cost-effective.

THE PRESIDENT. That's one of the things that I and other public officials might do, including yourself, is to get this to be just a routine sort of thing for new building designs, instead of it being a hit or-miss proposition. I may be underestimating what's already been done, but it seems that that's the right field for initiating these kinds of energy savings in buildings-at the initial stage of design and construction.

DR. BALCOMB. A survey of current practices done in '75 indicated that there is quite a good response—and everyone was surprised at the extent to which there is an increase in the standards which buildings are being built in response to the situation.

THE PRESIDENT. Thank you very much.

ENHANCED OIL RECOVERY

Mr. Hackerman, I had one question. I'm sorry I came in late. I probably would have gotten this from you if I had been here. You said that—part of Dr. Press' summary—that 10 percent of the oil could be recovered. Is that 10 percent of abandoned fields or is that an increase of 10 percent in a field that's under productivity?

DR. HACKERMAN. Well, either way, it's 10 percent of what would be left after full depletion.

THE PRESIDENT. Gould you go back into an abandoned field and then still get that 10 percent?

DR. HACKERMAN. That's right, Mr. President.

THE PRESIDENT. Would that 'be cost-effective?

DR. HACKERMAN. Yes, at the way things are going, it would be cost-effective.

THE PRESIDENT. I see. [Laughter] That's the good news and bad news in one sentence. [Laughter]

Thank you.

COAL SYNTHETICS

DR. PRESS. The first speaker of this second half of our seminar, Mr. President, is Dr. Lawrence Swabb, who's vice president of the Exxon Research and Engineering Company and is one of the experts in our country on synthetic fuels derived from coal.

DR. SWABS. Mr. President, Secretary Duncan, Dr. Press, ladies and gentlemen:

I will discuss the technology for converting coal to synthetic fuels. And I also have some good news and some bad news. The good news is that the technology for commercial-size plants' is available to change coal to gaseous products, such as synthetic natural gas, and into liquids, such as gasoline and fuel oil. In addition, research is moving ahead to develop even better technology.

The bad news is that the cost of these synthetic fuels will be higher than the prices we are now paying; just how much higher is uncertain.

Direct burning is the most efficient way to use the energy in coal, ,but gaseous and liquid fuels are cleaner and much more convenient to use. Our modern society has a large demand for these kinds of fuels—for transportation, for heating our homes, and for industry. With the large reserves of coal in the United States, coal synthetics represents a potentially large contribution to supplying these needs over the next 50 to 100 years.

Research on coal synthetics has increased dramatically in the 1970's. In my talk, I will cover the objectives of this research. These are: one, to lower the cost of making synthetics; two, to increase our ability to use most U.S. coals; three, to produce the products needed by consumers. In dealing with this third objective, I will briefly describe how coal synthetics are made. The fourth research objective is to ensure that environmental standards can be met as the synthetics industry is built. My final remarks will include an outlook for the impact of new research results.

Coal synthetics will be expensive. A typical commercial-size plant would cost one-and-a-half to three 'billion dollars if it were built today. A coal liquids plant of this size would be capable of supplying the gasoline and home fuel oil needs of a city of about 1 million people. The estimated cost of the products can vary over a wide range, depending on a number of factors such as plant size, the type of coal, financing method, and many others.

It appears that synthetic natural gas would cost much more than today's maximum price for new natural gas. If produced today, synthetic gas from a relatively low-cost western or gulf coast coals would be 15 to 30 percent higher than the price of imported crude. Methyl alcohol made from these coals would be in the same cost range, and the cost of other coal liquids would be higher.

About half of the cost of the synthetics is related to the large investment for facilities and equipment. About 20 to 95 percent is the cost of coal. Another 20 to 95 percent is the cost of other expenses such as wages, utilities, and supplies.

One item that contributes to the operating cost is the fact that one-third to one-half of the energy in the coal is used in the operation of the plant. Now, these costs are only estimates. The actual costs of synthetics will not be known until specific plants have been designed, built, and operated. Obviously, the high estimated costs are a barrier to building these plants.

Goal is located in many places in the United States, and almost every deposit is unique. Bituminous coals, shown in red, are found in Appalachia, the Midwest, and the Southern Rocky Mountain regions. Sub-bituminous coals, shown in blue, are found primarily in the West. Lignite, indicated by the green areas, are in the West and the gulf coast. One of the technical challenges is to ,be able to convert this wide variety of differing quality coal into synthetics. To do this, we need to learn more about the chemical structure of the coal and how it reacts to form gases and liquids. Coal scientists are learning more about these areas by using modern, sophisticated research equipment and techniques.

In gasification, coal is reacted with oxygen and steam at high temperatures. The products are carbon monoxide, hydrogen, and some methane and other gases. After removing impurities. the gas can be used directly as fuel or raw materials for industry. To make synthetic natural gas, the carbon monoxide and hydrogen can be reacted together in an additional step to make more methane. This then can be mixed with natural gas for home heating.

Coal can be gasified either underground, where the coal naturally occurs, or on the surface after the coal is mined. In underground gasification, oxygen and steam are compressed and injected into the coal deposit. The product gas finds its way to a production well, and it flows to the surface where it is purified. Underground gasification will be most useful for deep coal deposits which cannot be mined by conventional methods. This technology is still in a very early stage of development.

Surface gasification is being used on a commercial scale in other countries. Several different types of gasifiers are used. Each has its own set of advantages and disadvantages. For example, some will work better with certain coals and not with others. In general, all of them gasify the coal with steam and oxygen in specially designed reaction vessels, and the coal ash is discharged either dry or as a molten slag. Product gases are purified before they can be used as fuel. Gasification research is aimed primarily at improving these gasifiers by various techniques and approaches.

In coal liquefaction, there are two types of processes. They are called indirect and direct. Both will produce either all liquids or a mixture of gaseous and liquid products.

In an indirect process, the coal is first gasified, then some of the product gases are reacted to form either liquid hydrocarbons or methyl alcohol, also known as methanol. The liquid hydrocarbons make good diesel and jet fuel, but the gasoline component is low in quality. Methanol is a potential transportation fuel. To use it widely, however, would require changes in engines and fuel supply systems. Therefore, a new process is being developed to convert methanol into gasoline. Methanol would also be an excellent fuel for gas turbines used to generate electricity. The technology for commercial-size plants is available today to make both indirect liquids and methanol.

Direct liquefaction is not fully developed. But progress is being made in several large research projects. Direct liquefaction involves grinding coal to a small size, mixing it with oil from the process, and reacting it with hydrogen at high temperatures and pressure. The liquid products make an excellent gasoline component and acceptable heating oil and fuel oil. Direct liquefaction also requires gasification of the residue to make the hydrogen needed for the process.

The samples in the bottles illustrate the quantity of gasoline and fuel oil that can be obtained from this amount of bituminous coal in the direct liquefaction process. These liquids were actually obtained as products from a small pilot plant.

Overall, about 100 gallons of liquids can be produced from 1 ton of coal. Both indirect and direct liquefaction processes will be needed in the future to use the various kinds of coal and to produce different kinds of liquid products.

Synthetic fuels plants will be large and complex installations. In many respects, they will be similar to petroleum refineries. Plants producing either liquids or gas will likely be located near coal mines to minimize the cost of moving the coal from the mine to the plants. However, air quality, water supply, ash disposal, and physical size requirements will also play a major role in determining where these plants will be located.

The technology to meet today's environmental standards is available for cleaning up the gas in water discharge streams, also for controlling dust, and for disposing of the solid waste. This technology is already in use in refineries and electric powerplants and improved technology is the subject of a number of research programs. We've estimated that the cost for environmental protection would be roughly 15 to 20 percent of the total synthetics plant investment.

Finally, f would like to comment on the outlook for new technology. At the present time there is a substantial research program in this country on coal synthetics. A large program will continue to be needed because of the diversity of the coals, the locations, and the products. The primary target will continue to be cost reduction. Realistically, I believe a 20- to 30-percent lower cost, exclusive of inflation, can be expected over the next 20 years. This will not be easy to achieve, but improvements in gasification and liquefaction technology as well as in the purification steps can be expected.

New catalysts are the best hope for these improvements. Also, we can expect gradual improvements in equipment design, materials of construction, and process control systems as coal synthetics plants are built and operated. The best technology available will be used in a neverending striving for lower costs.

In summary, coal synthetics are costly, but they are an important option for highquality fuels, particularly for transportation and home heating. Large coal resources have the potential to supply U.S. needs for synthetics for many decades. Costs can be reduced through advancing technology, and progress is being made.

Thank you, Mr. President.

THE PRESIDENT. I think it might be better for me to wait until after the presentations.

BIOMASS

DR. PRESS. Shall we move next, then, to Dr. Thomas Stelson. Dr. Stelson, whom you know, is vice president of research at Georgia Tech, and he will tell us about biomass and its contribution to our energy needs in the future.

DR. STELSON. Mr. President, distinguished guests, ladies and gentlemen:

I'm delighted to have this opportunity to speak a little bit about the energy potential of biomass. Even though oils and gases and coals vary in character, biomass varies even more. It's a general name for a complex and diversified group of materials that are produced by living organisms. And these organisms have the capability of converting solar energy and other materials into forms of stored energy. In fact, on a geologic timescale, biomass is the source of coal and oil and gas as well.

On a short timescale all biological materials can be converted into energy, and they can be converted into all forms of energy—gas, liquid, or solid. So, the possibilities are enormous. There are literally millions of materials and many possible projects that could convert them into useful energy forms.

The two characteristics that are probably different is that biomass, like solar, is a renewable energy source. But it's a little better than direct solar in that it's stored in biological form, and it can be used without the daily or annual cycles that create problems in solar energy utilization. The other thing that's, I think, very interesting about biomass possibilities is that it's very small-scale in its opportunities, and it can be very labor-intensive and can contribute more than any other form, except possibly conservation, to job opportunities and employment.

First slide, please.

Any material—wood, grass, grain—can be converted to energy and generally can be converted fairly efficiently. So, biomass is energy stored in living organisms that then die, and can be used. And it's a very distributed source; it's not like certain highly localized sources where you have to drill or mine the material. It's generally distributed across the country and is similarly correlated with agricultural production opportunities or forestry production opportunities. Next slide.

Typical examples are agricultural residues. In the harvesting of grain, the straw or the stalks and leaves are potential biomass energy sources. Forest residues are particularly fruitful opportunities, because in typical harvesting in a forest, about one-half of the material is left as residue on the forest floor.

There can also be developed specialized energy crops, woody materials, that have particularly good and desirable energy characteristics. And specific crops can be developed for specific types of energy products, just like specific crops are developed for specific grains.

The opportunities for research and science and technology here are enormous, because there are great unknowns. Next slide.

This is what I'm talking about with respect to residues. Many people immediately assume when you talk about biomass that the Earth is going to be completely denuded, and particularly they might fear a similar occurrence to what has happened in the sub-Sahara area. But, for example, in the State of Georgia, where there is fairly good data, we grow here about 6 quads of biomass per year. The State uses in all forms of energy—coal, natural gas, hydrofuel oil, and wood-about 1 quad of energy a year.

Our goal in the near term in this State is to develop about one-quarter of a quad from biological materials or biomass. This would only be about 4 percent of what's grown. So, it would be a very small portion of the total growth. Next slide.

There are very good near-term possibilities. Probably the best is forest residue, and that is where the greatest success has been achieved so far. The agricultural wastes are also a very good opportunity, and particularly damaged material-spoiled grain, grain that is damaged in any form by vermin or by chemicals—is essentially the same as a feedstock for energy.

So, there is a national estimate that about 20 percent of all grain is damaged to the point where its use is reduced, and this is a great opportunity for utilization. Next slide.

One of the characteristics of biomass is just like agriculture and forestry. It's very regional, and the solution for one section of the United States is probably not going to be a good solution for another section. Thus, national programs that would be uniformly applied across the country probably aren't useful.

There is a great need for fine-scale technological development that accommodates the peculiarities of each region. Next slide.

To .illustrate the two—the secure and the labor-intensive characteristics of biomass, the State of Georgia again, where we have fairly good data, imports about $3 billion of energy a year. By "import" I mean across State boundaries—coal, oil, natural gas. If we could displace within 5 years about one-quarter of this with biomass, this would be a new industry in this State having a value of products of $750 million with a very large employment possibility.

This we consider a big new industry, one that has a $30 million annual activity. So, the economic possibilities on a local scale are tremendous. Next slide.

Currently about 1 1/2 to 2 quads of biomass are being utilized by industry. Quite a bit more is being used in residential energy development, but there's not really a good data base for that. It's probably around a half a quad. So, on the total there would be something like 2 to 2 1/2 quads currently in use.

Almost all of the industrial use is in forest-based industries, where they use much of their own waste material on where they have large acreages of forest materials.

Next slide.

THE PRESIDENT. Would that include wood-burning stoves?

DR. STELSON. This does not include wood-burning stoves or any residential utilization; only industrial. The residential is probably somewhere around another half quad.

Biomass can be converted probably most easily into space-processed heat or for direct combustion for power or any other purpose or in the gasification of it.

Now, generally when you gasify biomass you cannot ship it long distances in pipelines, because it has in it heavy constituents that would condense and gum up the pipeline. So, typically we're talking about gasification at the point of use. Also, of course, biomass can be and is a very good source of liquid fuels for transportation use; that is, ethanol and methanol. And gasohol is now a very popular development.

Next slide.

This is just an illustration of what can be done. This is a textile mill in Alexander City, Alabama. It converted from fuel oil to wood, wood chips. And even though, because of unknowns in the technology, they essentially converted coal equipment to wood use and they way overdid the air pollution control system, so that the actual effluent is below 10 percent of allowable standards—in spite of some of these difficulties, the full capital cost was recovered in about 4 years. And there are literally hundreds of thousands of opportunities like this that could be repeated across the country.

Next slide.

This shows you the delivery of wood chips. This mill uses about 400 tons a day. They come in in a truck like this, which is tilted into their supply bin.

Next slide.

In the near term, in 5 or 10 years, the potential from wood—and that's the highest potential area—is from about 3 1/2 to 5 quads. And from grains, which is more limited and which provides also competition with food sources, the potential is about 1/2 to 1 1/2 quads, and that is more uncertain, because it depends upon the price of grain which fluctuates more.

Next slide.

The long-term—and by that I mean approximately 20 years—the wood potential is—these are what I would call reasonable, conservative estimates—is about 5 to 7 quads, grain about 1 to 2 quads, and others. By others, I mean aquatic biomass, special plant material, energy plantations, and things of that type. And that's perhaps 2 to 4 quads.

So, you can see the potential in 20 years is about 8 to 13 quads. And if the national use were 100 quads, this would be 8 to 13 percent, which is quite a significant development in the energy picture.

Thank you.

THE PRESIDENT. In general, I'll defer questions, but what's the estimated cost in barrels of oil equivalent? I know it varies widely, but what kind of range-say, the plant in Alabama?

DR. STELSON. It would be, right now in that plant—the cost was less than half of the cost of oil. Now, of course to the owner of the plant, he was interested in the rate of return on his capital investment, because he had to add capital to get that, so on and so forth. But in terms of fuel—gasification of wood, for example, in the southeastern part of the United States is probably competitive with natural gas right now.

THE PRESIDENT. What's the holdup?

DR. STELSON. Well, it's sort of a chicken-and-an-egg situation, in that if you're an industry that doesn't have a lot of wood, you're rather hesitant to invest capital to put in a wood-utilization facility, because you don't know if the supply system is going to be there. And if you're in the supply business, you're not going to invest in a lot of delivery mechanisms if you don't have any customers.

And so, I think it's got to be worked up at a fine scale, where you start plants like this and you build a supply-and-demand system that then escalates into a big energy industry.

THE PRESIDENT. Don't hesitate to let Charlie Duncan know what we can do to help. [Laughter]

DR. STELSON. Thank you.

FRONTIER OIL REGIONS

DR. PRESS. Our next speaker, Mr. President, is Dr. Bill Menard, who is Director of the United States Geological Survey and one of the world's leading marine geologists. He will describe some new frontier oil regions.

DR. MENARD. Thank you.

Good morning, Mr. President, ladies and gentlemen. I'd like to speak to you about the contribution that can be made to our oil problems by the discovery of what might be called unconventional oil fields. They're just unconventional because they're in places we haven't drilled. And one of the reasons we haven't drilled is that many of them are much deeper, in fact, than we can drill at present.

Of course, any energy scenario assumes that we will find more oil. It's assumed that we will find thousands or tens of thousands of tiny oil fields within the contiguous 48 States, where we've explored so much. It's assumed that we will find larger fields in the over thrust belt in the Rockies that's now opening up. It's assumed that we'll find giant fields in the Continental Shelves and in Alaska.

You'll notice that the less we know about the area the greater the fields you expect to find. And the reason for that, in fact, is that when you begin to explore an area, you find the big fields early. And as time goes on and you explore more, you find smaller ones.

Well, those assumptions are made. I want to talk to you about a region that isn't included in the energy scenarios, a region that nonetheless offers great promise. The region is the oil potential of the deep sea beyond the Continental Shelf. Hollis Hedburg, a distinguished oil geologist, and colleagues have recently summarized their estimates, and I think there's a growing consensus to this effect of the potential of this region.

They find in a general way that there is about the same amount, the same area, the same amount of potential oil-bearing sediments in the deep sea in the adjacent Continental Slope as we have in the oilbearing basins of the United States.

Estimating how much oil is in a region you haven't drilled yet is a very chancy business, which I'll touch on when I try to make a more detailed estimate. But in a very general way, the best you can say is that one volume of sedimentary rock that is known to have hydrocarbons in it has as good a chance as another. If you were to make the only kind of guess you could make about what's out there, there's probably as much in the deep sea in the adjacent Continental Slope in the way of oil as there is in the areas we've already explored in the United States. Now, that doesn't mean you can get it out, because of course it has to be in very large fields to have any potential for economic development.

How do we know very much about this region? It's because for the last 30 years, the United States and other countries, the United States oceanographers funded by the Office of Naval Research and the National Science Foundation have been out making sub-bottom profiles of the sea floor with increasing degrees of sophistication and penetration. In addition, for the last 10 years, we've been drilling, through the JOIDES program and its followups, down through several thousand feet of sediment in the deep sea. So, we know something about the potential source rocks out there, and we know a great deal about the sub-bottom structure.

The oceanographers drilling out in the deep sea have never drilled in the regions where the greatest oil potential exists, the edges of the Continental Margin. They haven't drilled in the deep Gulf of Mexico, except one preliminary hole. They haven't drilled in the promising places where the sediment is thickest and the oil potential is great. That might seem irresponsible of the oceanographers, and as one of them I would have to accept that. But it really isn't. The reason they haven't drilled is that the deep sea drilling ship, the Glomar Explorer, does not have a potential to drill safely in places where you expect oil and gas. They don't have blowout preventers, they don't have the risers and so on.

So, the region is unexplored by scientists for the very reason that they think there is some potential for oil and gas there. The advisory committees won't permit drilling. At the same time, industry has been extending out from the Continental Margin from the very shallow water out deeper and deeper, and it can now drill out in depths or—there's drilling right now off New Brunswick at a depth of 4,875 feet, I think it is, varying with the tide. And it has a potential to go out even greater.

We have reached a point now where the oceanographic information about the potential of the deep sea is overlapping the potential to develop that industry has brought out at increasing cost into deeper water. What would be ideal now would be to find a potential site for drilling, a prospect which would give us opportunity to evaluate the entire deep sea in a way that would encourage us to go out at greater cost into deeper water.

Ideally for our country, such a prospect would be clearly under U.S. jurisdiction. It would have the characteristic that it could be explored by existing commercial equipment, it could be explored relatively quickly, if we wanted to, and it could be explored at reasonable cost. And if the exploration was promising, it should have the characteristic that it's capable of very large yields at reasonable prices, and within a decade.

Now, there appears to be such a prospect in the area of the mid-Atlantic region which is off the—or the so-called Baltimore Canyon. I'll show you some illustrations in a moment—not quite yet-show you what this prospect is like.

The prospect is a giant reef. Now, there isn't any reef in the area now, but there used to be. There used to be a reef in this area at the same time that there were reefs in the Reforma and the Campeche bank areas off of Mexico, the same general period which we can sum together as the Mesozoic period, which, for those of you who aren't geologists, is more or less when there were dinosaurs around. A hundred to 140 million years ago is this particular period. At that time, there was a reef that ran along the edge of the Continental Shelf, just as it does now in the Great Barrier Reef off Florida.

That reef is not known to have been continuous—because we don't have that much data, because the oceanographers weren't looking for this. They just found it while studying the general characteristics of the Continental Margin. There may be gaps. In fact, there certainly are gaps we don't know about in Central Mexico. But where we do have the information, it looks as though a reef extended from these highly petroliferous new discovery areas in Mexico, around through the Gulf of Mexico, and up the Atlantic Coast.

It comes up in the mid-Atlantic region, the Baltimore Canyon region, into water that's only 6,000 feet deep. It lies there under sediments that are themselves about 6,000 feet deep. The reef is about 20,000 feet thick in the region, which means, of course, since the reef always forms at sea level, that while the reef was forming, the sea floor sank by 20,000 feet, and the sediment accumulated as it did so. The reef is about 15 miles wide in this area; it's 150 miles long, and of course, it keeps going out of the area in both directions, since it runs intermittently all the way down from Mexico to Canada.

The oil-bearing potential we do not know for sure. If the reef was elevated at any time so that it was deeply weathered, cavernous channels were cut into it, then the oil potential would be very high. There's no evidence that the area was elevated due to plate tectonics or the movement of the continents. So, if it was elevated, it was because sea level sank, and that means that the whole reef that existed at that time was exposed and the whole thing at that time would have been eroded. And you would have had a vast cavernous system as a potential storage place for oil. But we don't know that happened. Since it's at sea level and sea level does go up and down, it's reasonable, but we don't know that it happened.

We don't know that the temperature of the potential source beds, which have been discovered by the oceanographic drilling, ever got high enough to mature a large quantity of the oil. On the other hand, we do know from the drilling that has gone on in the Baltimore Canyon area that oil and gas are present there, and so we know that the temperature somewhere in the region got high enough to be productive.

Now, I'd like to show you a series of five slides, and then try to give you some evaluation of the prospect for the site. The first slide will show you the North American Continent and how the sea floor would look if you took the water away. Actually, it wouldn't be these colors on the sea floor, because mapmakers tend to make everything out there blue. Parts of it would be red and parts white, but the relief would look the way this shows.

I think North America looks clear enough. The great deposits of sediment that Hollis Hedberg and the other oil geologists and the oceanographers have identified lie—the ones we're particularly interested in, in here, and a great thickness in the Gulf of Mexico because of the sediment, the mud and sand that pour out of the Mississippi River and have done so for the last 140 million years. The little bumps out here are saltdomes, they occur out in the deep sea, as well as in Louisiana and Texas, and other regions, and, of course, they are the sites of a great deal of production of oil.

This is the Baltimore Canyon area in here, the mid-Atlantic region. We're going to focus on it.

Next, please.

Just to show you what a modern reef looks like—this is in the Bahamas, actually-the Great Barrier Reef would extend on in a straight line much farther, but this is the shallow reef. Waves are breaking. Just about at sea level, you find an occasional gap, a pass where water goes in and out, deep on this side, shallow here. And in ancient reefs comparable to this one in almost every way, except that there were different animals living in them, and plants, large oil fields have been discovered in association with the crest of the reefs on the deep side and on shallow side.

Next, please.

This is the leasing area, the mid-Atlantic region. The blue areas show areas that we've already leased, tracks. The line running down here is the edge of the Continental Shelf, where the sea floor begins to—instead of being almost flat, begins to slope off in the Continental slope.

The Continental slope will look quite steep in the next illustration I'll show you, which is the profile along here, but that's because there's vertical exaggeration. The actual slope is a matter of 2 to 5 degrees in most places. You wouldn't have any trouble walking up it.

These COST holes—they do cost, but that stands—it's an acronym for Continental Offshore Strategraphic Test—and these are holes where oil companies band together. They get permission from the Government to drill. And anyone who wants to get the information that's acquired can do so, and if a discovery is made of oil or gas, why, then we make an announcement of it. If there isn't a discovery, why then, only those who bought the information get to know what's in there.

A discovery was made here. Now, that's rather strange, because these holes are drilled away from structures where you expect to find oil and gas. It's only after the oil companies and the geological survey have agreed that that's about the last place you'd find oil or gas that you're allowed to drill. [Laughter] And nonetheless, gas was found here in more than measurable quantities. So, it does look to be quite a promising area.

Of course, there was gas announced by Texaco and by Tenneco here—and oil by Tenneco. The yellow is this Mesozoic reef. The first figure we saw that had yellow on it, we tended to call it the yellow reef. But it sounds a little too much like the yellow road in the Wizard of Oz. So, we took to calling it the Mesozoic reef. Next please.

This is a profile, an actual geophysical record showing the sub-bottom, and it's one of thousands of such records we have around the continental margins. The oil companies must have tens of thousands. The characteristic of these records is every year they get better and every year you wish that all the old ones you had were capable of showing you what the new ones do. By this time you acquire the information in a very complicated way that gives you a lot of signals at once, and then you do signal processing and computer enhancement and a lot of things that nobody could dream of very long ago.

With these records, you can see these lines in here and they are reflectors, and some of them, Cretaceous and Jurassic together, are just more details of the Mesozoic. So, this is what I'm talking about, this period in here when all these rocks were deposited. This being a reef, this yellow area, this means since the reef animals grow only at sea level, this used to be at sea level. It's down 20,000 feet now. The top of it, as you can see, is about 10,000 feet. The sea floor here is about 6,000. Over here it's 4,900, and that's about the depth that is now being commercially drilled. This is where the same drilling apparatus is capable of drilling right now.

This is how deep it can drill—in fact, a little farther out with small modifications which are in the mill at present.

Next, please.

This shows the reef that I told you about. It extends from—this is the Campeche region, where the offshore discoveries are going on one after another with what the Mexicans must look upon as quite satisfactory monotony—another oil field is discovered every time you drill.

This is the Reforma area, and the reef in fact splays out in here. The reefs aren't all at the same time, mind you, some are-we've got from 100 to 140 million years-is a 40-million-year span. But the reef we just looked at in that profile was around for a large part of that time. And then here are the Golden Lane fields, of some of the first fields discovered in Mexico. The most productive wells ever known were in this area—240,000 barrels in 1 day. Of course, they didn't last forever.

Then there's a gap in here, and then we can trace the reef—fair continuity, it goes out here and it's lost. And here it is off the east coast of the United States and is last seen going off Canada.

That's the end of the slides. Thank you. Lights, please.

How do we evaluate this track? Well, let me say, to begin with, that the art of evaluating—or again, that the art of evaluating is fairly poor. In the best known area of the United States, the chances of finding an oil field, a commercial oil field, with an exploratory wildcat drill is now 1 in 7. That's the area we really know a lot about. The chance of finding a field that has 100 million barrels in it is 1 in 2,000. It might sound as though oil finders aren't very confident, but the reverse is true. It's because they've been exploring the region for 100 years and they've found everything that they now have such difficulties. If they didn't have difficulties now, they would have been incompetent for 100 years.

So, the odds of finding something out in deep water, even though unexplored, may be considerably better than that, and especially the odds of finding a giant field, because the odds of finding a giant field in the dry United States, 48 States, are very close to zero. These may be high odds, but they must be acceptable. We don't hear very much about oil companies going broke. [Laughter]

The only way we can guess what's in that reef, evaluate it, is to compare it with regions that have been drilled, such as the ones in Mexico and Texas and the other giant reefs around the world. We have done that recently, and it's our estimate that in the yellow area, the Mesozoic reef that you saw off the Baltimore Canyon region, there is something like 1 to 6 billion barrels of oil, producible oil; that is, we heard earlier you leave half to twothirds of the oil in the ground, and so we assume there's twice to three times that much. But producible oil, 1 to 6 billion barrels.

DR. PRESS. Dr. Menard, one more minute, please.

DR. MENARD. Yes, I know. For the whole region along the Atlantic Coast we estimate 2 to 15 billion barrels. If it's elevated, the amounts would be larger. If the oil was never mature enough, there may be none. But those are the best estimates we can give. We estimate the cost of producing, if you could do it right now, would be $15 to $20 a barrel. Tests can be made within 12 to 15 months if rigs are available, the rigs exist.

It costs twelve to fifteen million dollars a well. The exploration can be done by industry in a program comparable to the COST well program drilling cooperatively by industry. And we're offering the area for lease almost immediately, or it can be done by a consortium of universities and the Government in the way it's been done in the deep sea. Or, of course, it can be done in some combination. Thank you.

THE PRESIDENT. IS it going to be done? You said it can be. Are the plans made for the exploratory wells to be drilled?

DR. MENARD. It will take—we cannot do it with the existing oceanographic equipment. The oil companies can do it right now. They have the option of doing it. But whether they will or not is their option. If the Government chooses to pursue it by itself, it could 'be done either by leasing the same drilling ships that industry would use, the entire area could be tested in a matter of a few years, with the first holes, 10 holes, something of that sort, or you could modify the Glomar Explorer, a ship which the U.S. Government already owns. It's lying idle for lack of a suitable project. At a cost of about $70 million, the ship could be outfitted, refitted and outfitted in something in 2 to 4 years. So, it could drill indefinitely at almost any depth you would want in the ocean. It could test the Gulf of Mexico as well as this reef.

THE PRESIDENT. Is the technology available to control ruptures at that depth?

DR. MENARD. Yes.

THE PRESIDENT. Spills?

DR. MENARD. There is not technology to produce below about 5,000 feet yet, but with the decade—after the initial discoveries, with a decade to extend out from 5,000 to greater depths, I'm sure that could be developed.

THE PRESIDENT. Thank you, sir.

DR. PRESS. Mr. President, we are working with the Department of Energy and the National Science Foundation, with OMB, and investigating seriously the possibility of converting the Glomar Explorer for this kind of a drilling.

AUTOMOTIVE ADVANCES

Our next speaker will be Dr. Dale Compton, who's vice president for research of the Ford Motor Company, and he will tell us about automotive advances.

DR. COMPTON. Mr. President, Secretary Duncan, Dr. Press, and ladies and gentlemen:

I'd like to cover three main topics in my discussion with you this morning: First, a brief review of what has already been accomplished by the domestic automobile manufacturers in terms of reducing the energy of their products; second, some of the technical developments that should make further vehicle fuel efficiency improvements possible; and third, a quick look at some questions that must be answered if we're going to accomplish that. Could I have the first slides, please?

During recent years substantial improvements have been made in the efficiency of the power trains used in our motor vehicles. At the same time, the average weight of domestically produced cars has been reduced by about 650 pounds.

The combined effect of these two actions has produced the improvement in the fuel economy shown on this slide, a dramatic increase of over 40 percent. The use of these vehicles by the American public has already saved over 500 million barrels of oil. Of course, this saving will continue to grow as new fuel-efficient vehicles replace older cars and as even more fuel-efficient cars are introduced in the years ahead.

Frankly, I believe no other industry in the world has yet demonstrated such exceptional energy-saving progress. Before considering the opportunities for further improvement in vehicle fuel economy, I'd like to comment briefly on what I think is a common misconception, namely, that foreign-built cars are technically ahead of U.S.-built cars in terms of fuel economy.

This chart, which plots the combined city urban cycle fuel economy, the so-called metro highway fuel economy, as a function of vehicle inertia weight. You will note that—and this is EPA data for the year 1979, as published by them-note that the dotted curve representing imports lies below the line for the American-built cars, except at one inertia weight where they are essentially equal.

Let me now turn to a consideration of the technical opportunities that may exist for further improvement in fuel economy. As a basis for this discussion, I will use plots similar to the previous one of fuel economy versus vehicle inertia test weight.

The line represents the average fuel economy of the 1979 U.S.-made gasoline powered cars, as published by the EPA. A change in weight moves one along the line, a change in power-train efficiency moves one vertically away from' the current technology line. And thus a new power-train technology that works for all engines in all inertia weight vehicles would move us above the current line.

Please note that a point on this line gives the fuel economy of a vehicle at a specified weight. This graph cannot be used to determine or project corporate average fuel economy, because the sales mix of small, medium, and large cars is such a dominant force in determining this.

Now, several technical changes can be expected to provide improvements in the average overall efficiency of the present power train. For example, better fuel control, better combustion chamber design, increased use of electronic control systems, turbocharging with reduced engine displacement while maintaining constant performance, and improved transmissions through the use of torque converter lockups in overdrive will also contribute. And if these improvements could be used for all vehicle weight classes, this would lead to fuel economy improvements shown here by the upper curve—an increase of about 15 percent over current power trains. Of course all of these improvements will not be possible on every weight class, and neither is it likely that all of these improvements could be introduced simultaneously.

I've carried forward to this plot. the dark line from the earlier side and have marked it "current conventional." Now, there are two other piston engine technologies that may become available in reasonable quantities by 1985—the diesel and the stratified charge gasoline engine. In both of these engines, the fuel is injected into the combustion chamber. The first of these I will discuss is the gasoline version of the stratified charge engine, which at Ford is called PROCO, for program combustion. The slide shows this, and my associate is presenting you with a model of this combustion chamber.

You'll see that there is an injector for the fuel at the center, for directly injecting the fuel into the combustion chamber; you see that the piston has a unique cup design; you see that there are two spark plugs per cylinder. The process is controlled in such a way that the combustion is initiated in the cup, and then spreads out into the total chamber.

A higher compression ratio and a very lean air-fuel ratio provides a 15- to 20-percent improvement in fuel economy over the current conventional engine. This is indicated by the upper curve. This engine type also has the capability of meeting the 1981 Federal statutory emission levels for hydrocarbons, carbon monoxide, and oxides of nitrogen, and it has a particulate emission level below the proposed 1983 standard. The earliest practical introduction date by Ford is '84, assuming a successful pilot production run in 1980.

The second piston engine technology is the diesel engine. This slide shows the combustion chamber of the Oldsmobile 5.8-liter diesel engine that is just now going into production. In this case, the fuel is injected into a prechamber down into the combustion chamber, which will ride below here. The model will show that a bit clearer.

This is a high-compression engine, of course. In terms of its fuel economy, the middle line on this chart indicates the fuel economy that present diesel engines achieve, assuming that the vehicle has the same performance as a gasoline-powered vehicle at the same inertia weight.

The line is essentially the same as the line shown on the previous slide for PROCO fuel economy improvements in the range of 15 to 20 percent. But many of the diesel-powered vehicles available today do not achieve the same performance as their gasoline-powered counterparts. And the top line represents the fuel economy achievable by some currently available diesel-powered vehicles whose performance, as measured by acceleration, is 50 percent worse than a comparable gasoline-powered vehicle.

You see the improvement in fuel economy that's achieved by the reduction in the performance. It should be noted that diesel engine manufacturers have testified that current diesel engines cannot simultaneously achieve the '81 Federal statutory emission levels for hydrocarbons, carbon monoxides, and oxides of nitrogen, and also meet the proposed levels for particulates in all weight classes.

Unless new control technology can be developed which does not have a major effect upon fuel economy, diesel usage may be restricted to vehicles of very low inertia weight, in this region and to the left. It can be expected, however, that the excellent fuel economy of both PROCO and diesel can in time be further improved through many of the same actions mentioned in conjunction with the improved conventional engine that we discussed earlier.

THE PRESIDENT. Dr. Compton?

DR. COMPTON. Yes, sir.

THE PRESIDENT. Is the reduction in performance so onerous or unpopular that the motorists would not buy it at this time? That's one part of the question. Is that how the so-called Moody Mobile gets its increased performance, or is it a different change?

DR. COMPTON. Well, there are two parts to that question, Mr. President. These four points represent the vehicles that are being sold in the United States today. And so there is a market for them, and people are buying them. Whether that is a performance level that the average consumer will accept, I think, is unclear.

THE PRESIDENT. Well, is that just low acceleration?

DR. COMPTON. Low acceleration, yes, sir.

THE PRESIDENT. I see.

DR. COMPTON. In the case of the Moody Mobile, there is an additional change that's made in that. That is a turbocharged engine, and it's down-sized. As a result, it will get somewhat better fuel economy than this. I might just add, though, that in our studies and as reported by the EPA, we have been unable to meet the emission standards with that type of vehicle. We call it the 3,000-pound vehicle, and we have not been able to reduce the emissions to the level that it could be certified.

THE PRESIDENT. IS that apparently an insurmountable obstacle or something that—

DR. COMPTON. We continue to work on it. It is not clear to us, though, that it is possible within the current levels, within the current restrictions imposed by the certification process.

Now, beyond these versions of the piston engine, several alternative powerplants are under development. The nearest term prospect appears to be the electric. While currently available batteries severely limit the size and range of such vehicles, extensive research programs are underway that have the prospect of providing a much improved range under reasonable driving conditions. Vehicles with a range between 70 and 100 miles may be available by the late 1980's. Cost, durability, and safety of electric vehicles are all issues that must be resolved.

Other alternatives include the high temperature gas turbine and the Sterling. And both are currently under development with the assistance of funds from the Department of Energy.

This is a slide of the Chrysler automotive turbine engine that's been jointly developed with the Government—and while we have a model, it's very difficult to carry that to you for you to examine, but you can see the principal elements of it, there's a compressor, there are turbine wheels, there are diffusers.

The next generation of such turbines, if they are to find extensive usage in automobiles, will require ceramic components. We have a couple examples of those. These are the stator turbine wheel, made from ceramics. Of course these are in the very early stages of development and are far from ready for consideration for production. While progress is being made on both of these engines, it appears unlikely that either can be in large-scale production before the late 1990's or the early 2000's.

But we recognize that vehicle weight is as important to fuel economy as is power-train efficiency. This is the trend that can be expected to occur ,in the use of materials. Note the increases expected in plastics, aluminum, and high-strength steel. This, coupled with some further vehicle down-sizing, will probably reduce average vehicle weights by another 500 pounds by 1985 for a further increase in fuel economies of about 10 percent. We believe that weight reductions beyond this level, beyond the 1985 level, will not be possible using conventional materials unless the utility of the vehicle is very seriously reduced. Therefore, space age materials are being investigated that may allow further reductions without a change in utility.

Prominent in this research is the study of graphite fiber reinforced plastics,. and here are two examples. The first example—I'll show you :another in a moment-demonstrates the potential weight savings of these compounds, 73 percent in this one case. Presently the cost of these materials is prohibitive, and the available supply is insufficient to allow consideration for large-scale use. But if these and other problems can be solved, the use of this material could :allow several hundred pounds more weight to be removed from a vehicle, thus allowing further weight reductions while maintaining utility. It appears unlikely, however, that the graphite fiber reinforced materials can achieve significant usage before the year 1990.

THE PRESIDENT. Because of cost or what?

DR. COMPTON. Because of cost and availability.

Now, there are many substantial technical and economic questions that must be answered as we proceed to improve fuel economies. First and foremost is cost. Ford estimates that the cost of the average vehicle will have to increase by $600 to $800 just to incorporate those technologies that we think can be in production by 1985, and that's in '79 dollars. Investments totaling many billions of dollars will be needed.

Equally important is functional utility. We must not destroy the vehicle characteristics that make the cars and trucks useful to people. We must not reduce the size to such an extent that the utility suffers. Then there is the continuing concern over the health effects of engine emissions, especially those from diesel engines. Will certain engines be precluded from use or will controls be needed whose cost and fuel economy penalties make those engines unattractive? Ways must be found to ensure vehicle safety without increasing vehicle weight, for as I've said repeatedly, increased weight reduces fuel economy. Concern also exists about the maintenance and serviceability of the power train, the increased complexity could further raise the cost of maintenance.

And finally, there's the question of timing. It has been Ford's experience that 5 to 7 years is the minimum time needed to put a new engine or transmission of reasonably conventional design into production. Further, if each of the automobile manufacturers in the country were to decide today to replace all of its engine and transmission facilities, it would take about 10 years to accomplish this task because of the very real capacity limits of our machine tool suppliers.

The availability of alternative fuels deserves special mention. In reducing national dependence upon imported petroleum, fuel economy improvements must be coupled with a vigorous program to increase the availability of liquid fuels from alternative sources. While other speakers have addressed this issue in some detail this morning, I want to emphasize that a specific synthetic fuel may be best suited to a particular engine, and the sooner that we know what fuels will be available and in what time frame, the better each vehicle manufacturer will be able to do its job of having the proper engine available for the use of that fuel.

It is also important to come to grips with the issue of how to measure energy efficiency of cars and trucks. Since various fuels have energy contents per gallon that are greatly different from gasoline, the simple measure of miles per gallon will not continue to be an adequate measure of efficiency. For example, we may need to use something like Btu's per mile. Lights, please.

What is the fuel economy future? Customer demand for good fuel economy stimulated by rising and realistic energy prices and availability concerns will keep fuel economy at the top of our product priorities. And over the longer term, continued efforts in basic research related to automotive technology, hopefully, will increase the opportunity for major improvements in vehicle efficiency.

This of course is the basis on which we and others in the industry and Dr. Press' office are working together in an effort to formulate an industry-government automotive research program that will concentrate on some of these fundamental research issues.

To conclude, our industry's products will have achieved a 100-percent improvement in efficiency by 1985. I believe that significant improvements in fuel efficiency will indeed continue beyond that. But we must recognize that the gains will probably be gradual, that there are some high technical risks, and that progress will be increasingly expensive. Thank you, sir.

THE PRESIDENT. I know we're running a little short of time, but is there any work being done on what are the possibilities for the burning of gases that are presently emitted?

DR. COMPTON. There has been research. You are speaking of the exhaust gases or gases as a fuel?

THE PRESIDENT. Both. I was particularly thinking about the correlation between cutting down emissions, undesirable emissions.

DR. COMPTON. The problem with using gases as a fuel, such as hydrogen, is not so much with the vehicle as it is with providing a distribution and storage facility nationwide. There are also weight penalties associated with carrying it on board the vehicle.

The combination of those appears to us to make it unattractive as a mobile source of fuel.

THE PRESIDENT. Theoretically, it's possible.

DR. COMPTON. It is certainly possible. There is not a theoretical limit to burning hydrogen on board a vehicle. It is a question, though, of whether the overall system is better served to use the hydrogen in other ways than for the vehicle.

PHOTOVOLTAICS

DR. PRESS. Our last speaker this morning, Mr. President, is Dr. John Goldsmith, vice president of the Solarex Corporation, and formerly in charge of solar photovoltaics research at NASA's Jet Propulsion Laboratory, and he will tell us about photovoltaics.

DR. GOLDSMITH. Good morning, Mr. President, ladies and gentlemen. It is indeed a pleasure to be here this morning. In my presentation this morning, I'll try to brief you very quickly on the status of photovoltaics, where it is at the present time—technologically, economically, in the world, and what might be done in terms of improving that technology so that it might in the future become a contributor to our national energy needs.

To get into the topic, I'd like to very briefly describe for those in the audience who may not be familiar with photovoltaics. If one takes a very common material, which is—what is made up of this particular wafer that I have in my hands, you note that it's about 3 inches in diameter and about ten thousandths of an inch thick. This is made of silicon, the second most common element in the crust of the Earth. If impurities are placed in this, tiny amounts of phosphorous and boron, this material becomes electrically active, that is, that when photons, light is emitted and is impinging upon this piece of material, it activates the electrons inside of this silicon, and the solar cell becomes an energy producer, it converts the sunlight into electricity. And it does it directly, which is very different than any other form of solar energy conversion technology that certainly we talked about today.

Now, that principle of direct solar energy conversion means that it does this without any moving parts, without any emissions, without any pollution, without any vibration, and because it does it electronically, meaning that there is no chemical reactions going on within it, its lifetime is indefinite; it can go on for many, many years.

I have a very brief demonstration of what photovoltaic technology may be. This is a very simple illustration of this principle. This material has now been made into a solar cell by the addition of those impurities. It's placed in the top of this cube, and wires have been now placed from the top and the bottom of the solar cell to a little electric motor inside the cube. And if we turn on the light, which would simulate the Sun, we see that there is a direct conversion that goes on. And by simply cutting off the light, the electricity stops.

This principle has been developed, it's very modular in nature—the more solar cells we add together, the more power we derive. There is no complex interaction between the solar cells, which makes it look like as we increase the number of solar cells, we're going to get less power than you would anticipate; quite simple, electrical summations of these solar cells together.

Now, I have some slides I'd like to very quickly show you to further develop this thesis.

In this first slide we see a cutaway of ,,'hat a solar cell really is. This is a very simple, thin piece of material covered with a window in order to protect the surface of it from contamination, dust, and make it easy to clean. A solar cell by itself, as we have seen, is not in itself able to sustain a complete system, that is, that when the Sun goes away. Of course, we must have energy in order to provide the energy in the evening, for instance. And this is done by a conventional technique such as a storage battery.

A solar cell, such as this, plus some means of controlling the amount of energy which is coming out to charge the battery, is something that we would conventionally be able to use, for instance, in our home. And this is one of the very interesting aspects of what photovoltaics may offer. That is the distributed form of energy conversion that people may put on to their houses. It would take, for instance, about 500 square feet of a solar array on a southfacing roof in order to provide enough energy to power a typical American home.

At present cost today, it costs on the order of around $50,000 for that size of a power system, and therefore, in today's technology and today's economics, that's, of course, quite impractical. But it doesn't have to be there, and we'll develop this thesis further.

The technology of solar cells became quite developed during the space age, and one of the best examples of that technology was in the use of solar cells in powering our Skylab space station. This was nominally a 24-kilowatt power system. It was in orbit for over 6 years, and in that period of time it was the only source of power for the entire Skylab—much more complicated kind of a power system than ever we would need in our home.

In that 6 years, there was unmeasurable degradation of that power system in the hostile environment of space.

Solar cells since 1973 have had a great interest in its application relative to terrestrial purposes, and here we see it being used on a tower in the Gulf of Mexico for navigation aids in order to operate lights, to blow horns, and to warn oncoming ships about its presence.

It's used frequently in isolated areas, such as this particular system which is in the Mojave Desert, which is used by the California Highway Patrol for radio relay purposes. It is being used quite successfully. It is being used now in developing countries. In this particular application, it is being used in Senegal in order to pump water, where people in the past have had to carry the water on their heads many miles to the village.

It's being used in the United States for water pumping—in this particular case, on a Navajo Indian reservation in Arizona. An even more sophisticated application of photovoltaics is coming along again on an Indian reservation in Arizona, the Papico Indian reservation, in which a photovoltaic array is providing a great deal of the energy requirements of this particular Indian tribe, not only for water pumping but, as indicated here, for refrigeration, for operating lights, for their communications, and so forth.

Progress in the use of photovoltaics has been very good and has been stimulating a great deal of interest in terms of looking at it for near-term types of needs when the price comes down further than it is at the present time. We'll talk about that price in just a minute. Such things, for instance, as large irrigation purposes. This is a 25-killowatt system which is being studied in Meade, Nebraska, in order to irrigate these cornfields, which are immediately behind this photovoltaic array.

I'd like to now talk a little bit about what has happened in terms of photovoltaic technology and begin to develop a dialog associated with why we believe that that technology can be improved and why it may eventually reach a point where it might be useful for large scale terrestrial applications.

To summarize, however, before we get to that one point. This generally tells us about the major characteristics of what photovoltaics are. It's the direct conversion of Sun's radiation to electricity. Its intrinsic reliability seems to be very well demonstrated by the many applications that it has been experiencing over the past 20 years since it became of very serious interest. That it is modular, as we have indicated, that there is a relative absence of environmental impacts, in fact, particularly a silicon photovoltaic array would 'be amongst the most benign of all types of power systems that we could consider. It has a large technology base, it has based a lot of its technology on the billions of dollars which have been developed and invested in the semiconductor industry over the past 30 years.

What has happened as far as price is concerned? And what we see is a very complex type of a graph. It is what we call, in engineering terms, a log-log plot. It's something that we have to be very careful about interpreting, but it's plotted in order to try to show what kind of relationships have existed between the price of the product and the quantity of the solar arrays which have been produced and commercially sold in the United States. And when we plot them on a log-log plot, we see that there's a relatively straight line being formed. The question, of course, is can that line continue?

We note that this is now a number when it is plotted in constant 1975 dollars, it is a cost now which has gone from the space type solar array systems which were greater than maybe $300 per watt, to prices now less than $10 per watt. But the question is, is how far down can you extrapolate that kind of a technology. Do we really believe that it can go much further than it is at the present time? And I think that the likelihood that it can with existing technology is not good.

That things have progressed greatly because of the advent of mass production, larger quantities of sales have indicated the value of significant investments in mass production kinds of equipment and those things have been primarily responsible for the kinds of improvements that we've got. But in order for us to go much further, we're going to have to bring on new technologies, technologies which are not at the present time extrapolations from the semiconductor technology which has been the base of this thing up to the present time.

Another important and interesting point about this is that in the United States we have, or we are dominant in both the industry and the technology, and of the market of solar arrays being produced and sold in the world, the United States exports 50 percent of all those uses of photovoltaics around the world. Let me rephrase that.

Of the total number of sales of photovoltaics which are primarily made in the United States, 50 percent of them are outside the United States, which then gives us some additional incentives in terms of this technology relative to our balance of payments.

I'd like to very simply try to utilize the basic information that's on this graph, but plot it in a different way in accordance with a time base.

Now, we see here a plot of the reduction of solar power or solar photovoltaic power to the present time. And we are going to use that same extrapolation down to a continuum. That curve, which I have indicated, is the learning curve that has been developed so far in photovoltaics, is very analogous to the learning curve that has been used in the electronics industry.

There's a good likelihood that that kind of a learning curve can be sustained. And if we do continue along that kind of a path and we plot against that the utility price for energy which would be derived from a utility system for a distributive-like power system, like for a particular home, and put it in the context of what a photovoltaic array might have to be in order for it to be competitive with that utility power, we find that our most optimistic curve intersects that line around 1986.

So, when might photovoltaics become a significant contributor? When might it reach a point where it might compete with utility power? We believe the optimistic curve, the fast-growth curve for that. We may begin to be able to see it around this 1986 time period. Certainly not everyone agrees with that kind of a number. I think that there is very good agreement that the likelihood for continued reduction of photovoltaic prices is very good. When it will reach this particular point in competition with utility power, it certainly could be sometime longer than that, and it will depend upon the innovation and the invention of American industry, I believe.

Now to try to understand very quickly why I believe that the technology can be improved, I will in a very short manner try to acquaint you with the way that photovoltaics are made at the present time. Those wafers that I had indicated in my earlier remarks are made in a very tedious kind of way. One takes very highly pure silicon and melts it at 1,600 degrees Fahrenheit. Then one drops a seed of silicon into that molten silicon and begins to withdraw it with a meniscus of that silicon attached, and then very slowly, at the rate of around 2 inches per hour, one withdraws the seed and rotates it in one direction while you rotate then the pot of molten silicon in the opposite direction.

So, after several days of growth perhaps, one has several feet of ingot of silicon that one then takes and very carefully cuts wafers from it.

Now, that particular technology can be significantly improved, we believe. There are ways of pulling faster. There are ways of growing the ingots larger. There are ways of cutting much more efficiently; in fact, even with this technology, it may be possible to even reach the goals that we're talking about.

But suppose instead we are able to cast the silicon as a brick, as one would cast in a foundry, or instead be able to pull a ribbon of silicon directly out of the melt. Or perhaps, even better than that, suppose we are able to make a photovoltaic material that we could spray, literally spray on to low-cost, perhaps a glass substrate, and that in itself could make a photovoltaic device.

In fact, all of those technologies are viable, and they're all being demonstrated in various ways, and they're all being worked on in many programs throughout the United States.

In this last viewgraph, I have tried to indicate the various kinds of what I will call the leading technologies that we're investigating as far as photovoltaics is concerned. The bellwether is the Czochralski technology, showing an 18-percent commercial approach which is presently commercialized.

The next one in terms of its commercial readiness is what we call an uncrystalline or semicrystalline ingot, which is a cast technology, where we literally cast bricks. That has just been newly commercialized. There are some cadmium sulfite technologies which are potentially going to be commercialized in the near future, which are thin, film-spray types of approaches.

The potential of having so many approaches all pointed towards our same goals, all having the viability, many of them having the viability of reaching our objectives, gives us some confidence that we may be able to get photovoltaics into the ballpark of being a competitive energy system for our long-range electrical needs.

So, in conclusion, photovoltaics continues to look promising as a possible alternate energy source. Perhaps as early as 1986, some impact may begin to be seen. And, in the meantime, it is finding a growing world commercial application. It works; it's reliable, particularly in areas where utility power has not yet penetrated, photovoltaics is finding its greatest interest.

Thank you, Mr. President.

THE PRESIDENT. Dr. Goldsmith, there's been a lot of publicity this past week—and I'm sure you noticed—about the chemical process for producing the silicone single crystal. I understand that it's been done from several sources, but it didn't show up on your last chart. Does it have a breakthrough potential, or is it just one of many with approximately equal potential?

DR. GOLDSMITH. Well, the process, I believe, that has been given the most publicity during the past week was the process which was reported by the Stanford Research Institute.

THE PRESIDENT. Yes.

DR. GOLDSMITH. I personally am not that familiar with that particular process to be able to comment that it really offers the breakthrough potential that we're looking for. However, there are other very interesting technologies which are very similar in nature, that is, that it has great breakthrough potentials coming from other organizations that I do know about that look quite encouraging.

For instance, the Union Carbide approach looks to me to be a very interesting, and an approach that deserves a great deal of attention, as well as a similar kind of a technology at the Tell Memorial Institute.

So, I don't think we're hurting for techniques for purifying silicon, which is the Stanford Research Institute technology.

THE PRESIDENT. IS the purification of silicon in the production of the crystal the most expensive part of the process? Is that where the breakthrough on price is likely to come?

DR. GOLDSMITH. It's one of the most important—when we try to do an analysis of where the cost elements are in growing or making a solar array, we would find that about one-third of the price will be wrapped up in this—when we get to the point where it's a competitive alternate system—that one-third of the price will be wrapped up in that purified silicon material.

DR. PRESS. Mr. President, the report had indicated that silicon accounted for 20 percent of the material cost of solar cells now, and with this, the new development that you were referring to, it would be reduced from 20 percent to 2 percent.

THE PRESIDENT. Thank you very much.

My first reaction is one of appreciation to Dr. Press for setting this seminar up, for Joe Pettit and those at Georgia Tech, for making it possible for us to assemble here, for Charles Duncan, who has enormous new responsibilities, for promising me that he'll carry out all the opportunities that have been presented, and especially for the panelists, who've given what I consider to be an exciting and extremely interesting presentation of some of the possibilities in resolving our energy problems.

I don't think there's any argument with the fact that the cheapest and best way to meet our goals of reduced dependence on imported oil is through conservation, and this is an area that has not been adequately explored.

The technology is present, the primary obstacle has been convincing people that it's a worthy effort. I've spent a good bit of time the last 2 or 3 days talking to Members of Congress, who are home in their districts or in their States all over the Nation, and almost invariably, when I've called the Members of Congress in the House and Senate, they say that there's sometimes a startling new realization and interest on the part of the American people that we do have an energy problem and that it can be solved if we all work together.

It's not been possible in the last 2 years to convince American people that it's a worthy subject for them to explore and for which they can make a contribution. So, I think conservation is something that we need to emphasize, first of all. There's obviously an exciting possibility that within existing natural resources that our Nation possesses, that we can increase productivity both in the percentage of the materials that we extract in coal mining, oil production, natural gas, geothermal, and also in new methods of producing materials which, in the past, have not been economically feasible, but with the new higher prices of energy on an international basis, that they are, indeed, competitive and which can use technologies long extant.

We also, of course, are interested in, and I think the public is completely sold on, the possibility for solar energy use and that of replenishable supplies. One of the most intriguing to me was that Georgia now produces 6 quads of energy in biomass. And I've got several acres of- [laughter] —of scrub oak trees that I would like to contribute to the process at a minimum cost. This is the kind of thing that I believe is worthy of greatly escalated exploration.

New England, obviously, has done a great job in publicity surrounding the use of wood-burning stoves, which is one use of biomass, but the conversion of waste products is an exciting possibility.

I was given some data the last time I went up to New England that just the waste from their forests that's left on the ground could meet a substantial portion of their energy requirements in New England. And, as you know, they are very heavily dependent on imported oil at a rapidly increasing cost.

There is no way that I can see that many of these possibilities can be explored-ranging all the way from biomass, the insulation of low-income families' homes, the scientific and research developments that must be a prerequisite for advances in new techniques, the promotion of these procedures in the public's mind—without the passage of proposals to the Congress for financing. The windfall profits tax, which would leave an adequate reservoir of funds for the oil companies to explore for conventional gas and oil, has to be the basis for these scientific and other opportunities. And I hope that all those who are interested, including the oil companies themselves, other producers of energy, the consumers, the Members of Congress, interested public officials, will join in without further divisive debate or delaying tactics, and get the energy package passed. We've been long overdue on it.

And my own belief is, my conviction is that our Nation has the scientific and technological ability. Our free enterprise system, with its innate competitiveness and innovation, is ready, and I think we can forge a very enlightened relationship between Government, with the initiative of guaranteed prices, guaranteed markets, for new synthetic fuels that would be very productive.

The proposals that we've made to the Congress would involve a minor Government involvement, for instance, in the production of new kinds of fuel, synthetic fuels. I think out of 80 possible projects that would be included in the new energy production corporation, a maximum of 3 out of the 80 would be operated potentially by the Federal Government, and if any of those 3, or all of the 3, were viable projects for the private sector, then the Government would defer to the private sector for the production of those synthetic fuels. The reason for including just that small number was that some are likely to be so experimental in nature and so distant from cost-effectiveness, if they are even successful, that there must be some limited Government role.

But the desire that I have as President to see government and private industry, scientists, technicians, engineers, our free enterprise system, both in production and experimentation, working with an enlightened American public is very important.

I hope that the press, who are represented here today, will make a maximum effort to report to the American public what has been delivered to us.

Many of these reports are fairly basic. I was acquainted with some of the data before I came, but it's very important for the American people in general to be well educated on what the possibilities are.

There's no reason for discouragement. I'm convinced that our Nation has the capability of overcoming the energy challenge, and to the extent that we can succeed with conservation, with solar energy of all kinds, with the extraction of existing American supplies of natural gas and oil, increased use of coal in an environmentally acceptable fashion, we can minimize our dependence on those technologies that might have potential adverse economic effects—synthetic fuels, nuclear power, and so forth.

So, I think the ordering of priorities and an enlightened public, a comprehensive energy policy approved by the Congress, and the cooperation of all Americans, particularly between the private sector and government, in my opinion, are a very hopeful prospect for the future.

I'd like to again express my thanks to the distinguished panelists who have been so kind as to acquaint us with some few facets of energy technology potentials for the future and also to express my thanks to all those who participated with this.

I will personally follow up with Dr. Press, my science and technology adviser, with Charles Duncan, the new Secretary of Energy, the other members of my administration, in the ideas that have been presented here, and others that come to me.

And I'm very grateful for the chance to live in a country that's been so generously endowed with natural resources and with the free enterprise system, and a system of society that lets the innovation of individuals contribute collectively to reaching an exalted and very important goal.

The rest of the world is watching us. I think many of the less developed nations and even the advanced Western nations will naturally defer to us in some of these areas, and when I meet with other leaders, in economic summit conferences and on a bilateral basis, I always explore the possibility for cooperation. There's no restraint on the exchange of basic research data even when it applies to automotive design, for instance, which is a highly competitive field. And I found them to be very excited about it.

The solvent refining processes for coal that might be explored in the near future in West Virginia and Kentucky, for instance—at least in West Virginia—will be jointly financed by Japan and Germany. This shows that there can be an exchange of both financing and scientific and technical data across international boundary lines. So, the possibilities are .broad, and I think we can legitimately keep our hopes up that we will triumph in this very challenging test of our Nation's will and capability.

Thank you all for letting me be part of it. I've learned a lot. I know everyone here has, too.

Thank you very much.