I was at the Federal Reserve Bank energy seminar a few weeks ago.   Stephanie Battles from the EIA (energy information administration) divison of the department of energy gave a presentation.

She stated that in 1971 the estimated oil reserve for the world was 200 billion barrels.   Since that time we have pumped 400 billion barrels.   The current world oil reserve is now estimated at 209 billion barrels- higher than it was in 1971.

As the price of oil went up it encouraged new investment in R +D and technology.   This lead to the discovery of oil in the Gulf of Mexico- a very large source of oil today. (Hurricane Ivan did a number on the the gulf causing a temporaty shortfall last year)

Who knows how much oil is in Alaska- or other parts of the world. As the price of fossil fuels goes up it will spur new investments and discoveries.

Alternative fuels are coming down but still too expensive.   A few facts:   My utility makes energy for an average price under $20 per MW.   The other large utility in our state has an average price to produce energy at $30 per MW (per the Public Service Comission web site)   Wind energy in my state sells for $58 per MW.   Biomass is $50 per MW. Solar $80-$100 per MW.   These are the actual numbers from existing contracts.   While alternative energy is coming down in price, it is still not at levels where we can switch over large amounts of energy.   I am co-lead on a voluntary renewable energy program that we will launch in 2006.   If successful, it will be one of the 5 largest voluntary programs in the country.   I am opposed to mandatory programs.

In national web seminars on energy, Global Solutions calculates that it will take $53.4 billion in investment to produce 52,729 MW that are needed just to satisfy the mandated state requirements by 2020.   (about 20 states have mandated requirements between 2005 and 2020.   Wind is estimated to make up 76% of the new energy requirements) I have serious doubts whether these investments can/will be made.   I don't see how these mandates standards will be met.

I am meeting with the president of McKenzie Bay (windmill company) later this week.   Maybe I will have more information on wind and how he sees the future.