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President Bush Discusses New US Energy Policy: ABI Research Asks, Will It Be Enough To Affect Oil Dependence?

Posted on: Wednesday, 1 February 2006, 12:00 CST

In yesterday evening's State of the Union address, President Bush announced the Advanced Energy Initiative -- a 22% increase in clean energy research at the Department of Energy.

The effort is designed to change how we power our homes and offices: "We will invest more in zero-emission, coal-fired plants, revolutionary solar and wind technologies and clean, safe nuclear energy."

Bush also mentioned an increase in research into pollution-free cars using hybrid, electric, ethanol and hydrogen-based technologies. He suggested incentives in the form of a tax credit for research in private-sector companies. The president gave one notable goal: "to replace more than 75 percent of our oil imports from the Middle East by 2025."

What would be the fallout of such an initiative? "I don't think there are many in the automotive or energy industries that wouldn't enjoy a tax credit or additional funding from the DoE," offers ABI Research analyst Dan Benjamin. "There is no question that fuel cells and hydrogen are a notable technology to enable clean, efficient transportation, provided that there is plentiful non-oil electricity that can be used to re-form the hydrogen fuel. As much as work is needed on fuel cells themselves, more is needed on hydrogen formation and storage."

Is this type of initiative ready to jump-start an industry? "Probably not," suggests Benjamin. "But I'm more discouraged by what the President didn't say." The analyst suggests that while more research is needed for some technologies, there are others that could be useful sooner and in a more significant way. "Wind, solar, and distributed cogeneration technologies are already readily available. What would be more useful for these sectors is direct incentives to encourage the purchase of the product. The President didn't mention distributed cogeneration, possibly the most promising technology of all. Instead of burning fuel for electricity at a power plant and again at home for heat and hot water, burn fuel only at home to create heat and simultaneously generate electricity using a technology like a microturbine. Conceptually, this nearly doubles fuel efficiency. And microturbines are available now."

What firms and technologies will be most affected by the President's initiative? ABI Research covers the affected markets through a number of research offerings, including "Sub-Utility Stationary Power", "Hybrid Electric Vehicles,""Commercial Hybrid Electric Vehicles,""Fuel Cells for Vehicles," and "Hydrogen Infrastructure". They are available as part of the firm's Emerging Technologies Research Service and Automotive Systems Research Service.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call +1.516.624.2500.

Source: Business Wire

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