In the previous post, we talked about Energy Independence and the two Candidate’s positions.  Those who weighed in on the subject seem to agree that: 1) this is important; 2) neither campaign is giving enough priority to it; and 3)neither campaign has it exactly right.

JSV suggested a budget of $200 billion a year (taken from DoD budgets) as a place to start to truly attack the issue of sustainable energy including alternative fuels/true renewables. I think this would be both physically possible and politically possible and I like the idea a lot. From my experiences in the military and selling product to the government, we could ‘find’ $200 billion in efficiencies/priority changes. Politically, except for the backlash from bureaucrats whose jobs would be threatened by such ‘efficiencies’ the base of taxpayers would applaud a well defined and well communicated plan for Energy Independence. So how would we spend the $200,000,000,000? I have a couple of suggestions:

1. Contract with GM, Ford, and Chrysler to produce an electric automobile that would have a range of 200 miles plus, a recharge time of 15 minutes or less, and a lifetime of 100,000 miles without engine or battery replacement.  The target price for the car would be $25,000 per unit.  Each of the three companies would be given $10 Billion per year for two years to have the vehicle ready for the road. An independent panel would be chosen to evaluate and choose the winning design.  The winning design would be awarded a contract for two years to supply 80% of the planned purchases of sedans by the Federal Government.  That is somewhere in the area of 150,000 cars, at $25,000 each is a contract for two years of$7.5 Billion.  If the terms of the contract were that all cars would have to be manufactured in the USA from a minimum of 75% USA components (by value).  This would have the side benefit of helping to ‘rescue’ the USA auto industry and would create or save a lot of private sector jobs.

2.  Solicit Proposals for the award of two contracts to compete similar to the above in the area of wind power generation.  The goal would be to produce a demonstration windpower generation station of at least 100 MW that could be replicated on a grander scale for a cost (exclusive  of land and power distribution infrastructure) of per $0.025 per KWh.  Each contract would be for approximately $5 Billion per year for two years with the prize being the opportunity to build and operate on Federal land a Gigawatt Energy Farm.  

3.  Do number 2 above for solar power production.

4.  Do the same thing with wave energy but at a lower cost – instead of a $5 Billion contract to two companies, make it 3 companies at $2 Billion each.  

5. Contract with 3 companies for $5 Billion each to produce an electricity storage device (battery) sized no larger than 3 cubic feet, nor heavier than 200 pounds and capable of replacing current battery systems for automobiles (200 mile range, etc.).  Etc. Etc.

6. Offer a similar contract for point-of-use, residential, power generation capable of 5KW that would sell for $3,500 per KW plus installation.  This could be wind, solar, chemical or something we are not now considering.  The purpose would be to eventually decentralize power generation/distribution.  The contracts would be for $500,000,000 each and would be available based on evaluation of the proposal/business plan.  There would be 10 such contracts available per year.

Consider a prize for development of a Top-of-telephone-pole wind generation system capable of tie in to the grid.  Similarly a prize for batteries for hand tools with 4 times the current capability for the same size and weight.  This could go on for a long time without reaching our $200 Billion per year limit.

Each of these contracts/prizes would have restrictions on the source of the labor and materials to concentrate the expenditures (minimum 75%) in USA companies and physical in-USA production.  The Federal Government would have to step in and grease the permitting process on numbers 2, 3, and 4 to allow them to reach their targets in two years from contract date.

None of this (with the possible exception of the point-of-use 5KW systems) addresses the infrastructure/centralization problem with much of our power production and use.  Let’s save that for a future post.

Add all this up and you spend less than $80 Billion a year to start (hardly enough to bail out a couple of Wall Street Financial Houses).  I think this would stimulate a great deal of that famous US ingenuity and we would have solutions instead of hot air.  If this fails we just give a $100 Billion prize to the entrepreneur who can show us how to harness for a useful purpose all the hot air generated by politicians each year.

Let me know what you think of these thoughts.