Framed by dire news on the financial front, the global energy picture appears equally disheartening.
And yet, Pete Holman is convinced that the solutions will come.
"There's no question we can solve this," said Holman, an energy consultant with Caterpillar and the featured speaker at Yellowstone Valley Electric Cooperative's annual meeting yesterday morning in Billings.
"This may well be the key issue in this country for the next few decades," he said. "And we don't want to screw it up."
Holman opened his presentation with ominous statistics. The U.S. consumes roughly 20.5 million barrels of oil a day, but produces only slightly more than 5 million barrels a day. The U.S., India and China, which account for 39 percent of oil consumption, hold only 4 percent of the known oil reserves. Europe is running low on natural gas, its main source of energy. Meanwhile, the Russian federation and the Organization of Petroleum Exporting Countries, which together control more than 75 percent of the world's proven oil reserves, have talked about joining forces.
Holman named four challenges facing our energy future: generation, transmission, efficient use of energy and finding ways to store energy.
He admitted the task seems daunting, but he said he sees hope on several fronts. He spoke of America's rich coal reserves and the need to find economical ways to sequester carbon dioxide. He talked about wind power, nuclear power and photovoltaic options. In the desert Southwest, he said, a system has been devised whereby a closed loop carries a liquid across the face of a convex mirror. The mirror's reflective surface "magnifies" the sun's heat on the closed loop, which in turn heats water into steam to generate energy. "It's clean, and it doesn't use a lot of water," he said.
Besides creating energy, he cited the need to use energy-efficient methods and materials in construction. He said he takes heart that Silicon Valley techies will invent ways to circumvent current energy obstacles.
He even pointed to preliminary research investigating the possibility of splitting the carbon atom from carbon dioxide - thus rendering the carbon for fuel and releasing the oxygen as a harmless gas.
"There's no one magic string in the violin," he said. "I think we need to add strings to the violin."
On a more regional front, Yellowstone Valley Co-op's general manager, Terry Holzer, summarized the past year and offered an overview of what lies ahead. Addressing the afternoon crowd of nearly 600, Holzer acknowledged rate increases of 7 percent to 7.5 percent for the past three years. He attributed those increases both to the increased cost of power and continued growth of the co-op and facilities. Projections estimate that continued rate increases could total between 50 percent and 100 percent by 2030, when it's been estimated that demand for generating capacity will increase by 35 percent.
"But we're still competing with surrounding utilities," Holzer said, noting that residential rates at YVEC remain 6 percent lower than rates at NorthWestern Energy and irrigation rates run 35 percent less.
Holzer also provided an update on the Highwood Generation Station, which is proposed to be built in Great Falls but would supply power for members of Yellowstone Valley Electric Cooperative and several other electric co-ops in south-central Montana.
Since its conception in 2004, the cost of the proposed coal-fired plant has jumped 78 percent - from an estimated $450 million to $800 million. Roughly estimating that the cost of carbon capture could run another $400 million, the total project could easily carry a $1.2 billion price tag, Holzer said.
Auditor Richard Matusiak reported that the Rural Utility Service recently denied federal funding for Highwood, which prompted CoBank to call in its $10 million line of credit on the project. Yellowstone Valley Electric's share came to $7.098 million in 2007, up from $1.889 million in 2006.
Art Weiss, a co-op member with more than two decades experience in power and petroleum engineering, suggested that bonds for Highwood be made available to co-op members.
"That way, we put our money where our mouth is," Weiss said. "I want to see that plant built, because if it's built, it'll stabilize my rates as well as the rates of everyone else here."