Energy Overview

"TrueFuel™ is the Answer"

Energy Overview

To better understand the full significance of TrueFuelä by Advanced Energy Research Corporation, we can look at our past, present and future energy situation.

From the Beginning

If we were to imagine man’s progress as a historical time line of energy use spread out before us, we can see that the energy time line begins with the discovery of fire. Moving forward in time into thousands of years past, you can see man burning wood and oil from plants.

Move forward into recent centuries and you can now see man starting to use coal. Coal fuels the industrial revolution – steam engines, railroad trains, houses, etc.

Petroleum

Now move up to about one hundred years ago. See petroleum discovered in Pennsylvania. We can see the growth of the oil business. We notice the Standard Oil monopoly. We watch the growth of the large international oil companies.

Now move into the last half of the Twentieth Century. You see the rise of nuclear energy, growing to 8% of energy use. The growth of nuclear energy stops after the Three Mile Island and Chernobyl disasters. Suddenly, you start to notice more and more problems associated with petroleum.

You look at this time, and you find yourself becoming alarmed by the oil price increases and Oil Embargo of the mid-1970s. You see the massive economic disruption from the Oil Embargo. You see the lines at the gas stations.

Pollution

As you move forward from there, you see more and more problems associated with pollution from oil and coal – air pollution, acid rain, massive oil spills like the Exxon Valdez, and global warming.

You now see the United States spending more and more on military costs in the Middle East. You notice wild swings in oil prices make it impossible to predict energy costs. You see the California energy crisis right at the turn of the century. Yet even though you see these problems growing and growing without end, you notice just how much the world stays hooked on oil and fossil fuels. You see attempts at using other forms of energy. You also see that renewable energy accounts for only 7% of all energy. Half of that renewable energy is hydroelectric power. Dirty fossil fuel has 85% of the market.

The Present

Move into the present and look now at the year 2003. The President has just announced a huge investment in the hydrogen economy. You also see us in Iraq. Oil prices coming off near-record highs. Concern about fossil fuels has never been higher. There are fears of energy security, hatred of the U.S. in the Middle East, and fears of global warming and other pollution disasters. The United States spends hundreds of billions per year for foreign oil. The United States also spends $100 billion on the war in Iraq and will spend tens of billions more per year to rebuild Iraq. The U.S. will also spend tens of billions per year on pollution expenses associated with the use of oil. The real total cost of a barrel of oil approaches $50 per barrel.

The Future

What will happen in the future? What would happen if the energy situation keeps getting worse?

As we move forward on the energy time line into the future, we can see the good news – large oil finds outside of the Middle East come on line, the Iraqi oil fields are in friendly hands, more use of natural gas, more money going into fuel cells. However, we find that the bad news is worse and worse. The bad news inevitably overwhelms the good news. The United States reliance on foreign oil grows to two-thirds of U.S. consumption. World oil use grows by two billion barrels per year. The fast growing Asian economies alone eat up 45% of this growth. Third-world countries rapidly industrialize until their energy use rivals the energy use of the developed countries. China’s dependence on foreign oil grows from 22% to 77%. Europe’s dependence on foreign oil grows from 52% to 79%. U.S. Dependence on foreign oil grows to 66%. Reliance on Middle Eastern oil becomes a danger and a source of international friction for all countries. As more and more people try to seek a solution in natural gas, natural gas prices climb to new highs.

Worse yet, sometime after 2010, world oil production peaks. Oil becomes more and more expensive to recover. Saudi Arabia, with a very cheap cost of production, becomes the producer of last resort. Saudi Arabia has two-thirds of the world’s oil reserves and one-third of its natural gas reserves. Oil prices begin an inevitable and irreversible climb to record levels and beyond. Oil price increases create economic disaster and political instability.

The inherent problems in photovoltaic and wind power limit their expansion. Photovoltaic power requires large investment and expensive storage. Wind power looks like it requires less investment -- until you take into consideration energy storage and transportation. Even with government programs to ramp up wind and solar, they will not likely exceed one percent of energy production by 2020. Solar power costs the equivalent of $100 per barrel of oil.

What about the money invested in the hydrogen economy – fuel cells? As you look down at the years from 2003 forward, you notice the inherent limitations in the hydrogen economy starting to surface. Hydrogen is expensive to make. Making hydrogen the cheapest way – steam reformation – gives off pollution. Making hydrogen with electrolysis is clean but the electricity used must come from fossil fuels or nuclear power. Storing and transporting hydrogen doubles the cost. We try to produce hydrogen on-site with electrolysis. However, getting electrical power to the electrolysis machines would require us to quadruple the electrical power infrastructure. Nuclear power tries to present itself as the solution to provide electricity for electrolysis to make hydrogen. However, the nuclear industry is beaten back by safety concerns and the realization that de-commissioning nuclear power plants is prohibitively expensive.

We begin to see clearly what we have always somehow known. Global oil production peaks and begins its inevitable decline within a decade of the year 2000. Now it becomes painfully clear: renewable energy systems have the potential to generate no more than a tiny fraction of the power being generated by fossil fuels. We are running out of oil. We have no viable alternatives. The energy infrastructure is so large that it will take decades to implement any alternative to fossil fuels. It is too late.

Moving forward, we find a truly grim future. We can see the economy slow as energy prices rise. Pollution is largely unchecked. We see that the world is hooked on foreign oil. There are no other workable solutions. We have no way out.

We remain vulnerable to political problems in oil producing countries. The Arab oil producing countries are antagonized by our invasion of Iraq. The U.S., Europe, China and developing countries all need Middle Eastern oil badly, as does the U.S. Conflict grows. Saudi Arabia is under enormous pressure.

What will happen after oil production peaks just as demand is exploding? What will happen as the limitations of other energy solutions surface? What will happen as our energy position gets worse and worse?

So we can now see that our energy future is grim unless there is a real change. We must have that change now.

At the end of the time line, looking back, you know that we need energy that is cheap, clean and renewable.

We believe that the more you look at TrueFuel by Advanced Energy Research Corporation now, the more you can see that there might be some hope for our energy future. The energy markets are $1 trillion per year. Hope exists only if we make a large investment now in TrueFuel. TrueFuel must become a large percentage of our energy mix. Only then can we look forward to a future of energy independence from foreign oil. Only then can we look forward to a future of predictable energy costs. Only then can we see a future of reduced pollution. When we see that TrueFuel is the answer, and we decide to make TrueFuel a reality, we can look back on this decision as being the start of the turning point. We can now look back and see how things continued to get better and better after we decided that TrueFuel is the Answer.