Water and Energy Crisis Looms on Horizon â€œResearch into capturing ocean energy is where oil and gas were in the early 1950s,â€ says Matthew Simmons, above. Ocean Energy Institute After several years existing solely in the mind of Matthew Simmons and his energy colleagues, the Ocean Energy Institute finally is establishing a home. Bob West, a member of the institute's board, confirmed on Saturday that the institute will be opening an office in the Breakwater Marketplace in Rockland. "We are doing renovations on the fourth floor," West said, "and should be open within the next several months."



Simmons first announced his vision for an Ocean Energy Institute in December 2006, with plans to base it in the former MBNA building on the Rockland waterfront. The building had just been purchased by Simmons, Stuart and Marianne Smith and two other investors, but it was subsequently rented to Boston Financial Services.



For its first years of existence, the institute existed as a virtual entity, without a physical location. During that time Simmons and George Hart, the institute's sole employee, drafted a business model for the organization and explored the many different forms of energy potentially derived from the ocean. The initial focus was on wind energy, Simmons said. "We helped convene on wind energy projects and then we are moving on to other energy from the ocean [such as geothermal, oil seeps and tidal]," he explained.



A new Ocean Energy Institute web site (www.oceanenergy.org) explains that among the organization's goals are the fostering of collaborative research and development teams for ocean energy projects and providing venture capital to seed commercialized ocean energy ventures. The Ocean Energy Institute lists among its "team" members Habib Dagher, director of the Advanced Engineered Wood Composites Center at the University of Maine and a leading proponent of offshore wind projects; Wickham Skinner, former professor at the Harvard School of Business and St. George resident; Philip Conkling, president of the Insland Institute; and Don Perkins, president and chief executive officer of the Gulf of Maine Research Institute.



Sporting a delicate windmill as a lapel pin, Simmons started off by reflecting on the concept of sustainability, a current buzzword among energy development experts. "More and more people around the world are beginning to wonder, "Does the globe have a sustainable strategy?'" Simmons said. "It's all about sustainability. Sustainability means protecting or improving our living standards. And without abundant water and energy, we are not sustainable," he said. "There's no question that our oceans are energy's last frontier."



Referring to Maine's year-round island communities, Simmons noted that by definition "islands rarely have adequate local resources to be sustainable. Iceland is the only one with sustainable energy because it has abundant geothermal resources. No others have been able to do it."



Simmons said that the critical resources in the world's future economy will be energy and potable water. Population growth will exacerbate the demand for both resources. "Energy is the most serious scarce resource among many right now," Simmons explained. "In my opinion peak oil is past tense. What I'm also worried about is that peak global gas is also past tense. Black coal is heavily depleted and so we have probably now seen the peaking of fossil fuels entirely."



"In the United States I suspect we will be at 350 million people by 2030. That number will be much larger in other regions of the world, " he continued. Simmons noted that presently in China there are 18 cars per 1,000 people, while in the United States the figure is more than 900 per 1,000 people. Demand for automobiles will continue to rise in China as well as in Brazil, India and other developing countries, leading to further depletion of fossil fuel resources.



"The bigger concern is the scarcity of other resources, starting with water," Simmons said. "If oil is precious, water is priceless."



"Gravity drip water is scarce. Desalination is difficult and energy intensive. All water extraction methods require energy-intensive pumps," said Simmons. "Global water demand has grown by a factor of six this century, twice the rate of population growth."



This scarcity becomes particularly ominous when



one considers the linkage between energy and water. Just three percent of water of the earth is freshwater, noted Simmons, much of that sequestered in ice sheets and glaciers. A large amount of the freshwater available is used to produce energy.



"The energy industry uses an enormous amount of water," Simmons said. Referring to a table of water use by different types of energy producers, Simmons pointed out that nuclear energy uses a huge amount of water for cooling purposes. Shale gas extraction is also a massive water guzzler. He noted that the Barnett Shale Gas field (a natural gas field located in Texas) has used 70 billion gallons of potable water in three and half years. "Americans may eventually live without oil. But there is no substitute for water," Simmons said.



Ocean Energy Institute founder and energy investment banker Matthew Simmons gave an hour-long keynote address at the Island Institute's 2009 Sustainable Island Living conference on Saturday morning at the Strand Theatre in Rockland. Simmons titled his talk "The Gulf of Maine: What Lies Beyond the Fossil Fuel Horizon," but his presentation ranged far outside the Gulf to encompass the globe.Sporting a delicate windmill as a lapel pin, Simmons started off by reflecting on the concept of sustainability, a current buzzword among energy development experts. "More and more people around the world are beginning to wonder, "Does the globe have a sustainable strategy?'" Simmons said. "It's all about sustainability. Sustainability means protecting or improving our living standards. And without abundant water and energy, we are not sustainable," he said. "There's no question that our oceans are energy's last frontier."Referring to Maine's year-round island communities, Simmons noted that by definition "islands rarely have adequate local resources to be sustainable. Iceland is the only one with sustainable energy because it has abundant geothermal resources. No others have been able to do it."Simmons said that the critical resources in the world's future economy will be energy and potable water. Population growth will exacerbate the demand for both resources. "Energy is the most serious scarce resource among many right now," Simmons explained. "In my opinion peak oil is past tense. What I'm also worried about is that peak global gas is also past tense. Black coal is heavily depleted and so we have probably now seen the peaking of fossil fuels entirely.""In the United States I suspect we will be at 350 million people by 2030. That number will be much larger in other regions of the world, " he continued. Simmons noted that presently in China there are 18 cars per 1,000 people, while in the United States the figure is more than 900 per 1,000 people. Demand for automobiles will continue to rise in China as well as in Brazil, India and other developing countries, leading to further depletion of fossil fuel resources."The bigger concern is the scarcity of other resources, starting with water," Simmons said. "If oil is precious, water is priceless.""Gravity drip water is scarce. Desalination is difficult and energy intensive. All water extraction methods require energy-intensive pumps," said Simmons. "Global water demand has grown by a factor of six this century, twice the rate of population growth."This scarcity becomes particularly ominous whenone considers the linkage between energy and water. Just three percent of water of the earth is freshwater, noted Simmons, much of that sequestered in ice sheets and glaciers. A large amount of the freshwater available is used to produce energy."The energy industry uses an enormous amount of water," Simmons said. Referring to a table of water use by different types of energy producers, Simmons pointed out that nuclear energy uses a huge amount of water for cooling purposes. Shale gas extraction is also a massive water guzzler. He noted that the Barnett Shale Gas field (a natural gas field located in Texas) has used 70 billion gallons of potable water in three and half years. "Americans may eventually live without oil. But there is no substitute for water," Simmons said. But energy is available from seawater, argued Simmons. "That's why the University of Maine, the Department of Energy and the Ocean Energy Institute are launching a Manhattan Project," he said, referring to the government research project that invented the atomic bomb during World War II. He said that the offshore wind energy development center, recently approved by the Department of Energy, is likely to be located in the midcoast area. "Research into capturing ocean energy is where oil and gas were in the early 1950s," Simmons declared.



The Ocean Energy Institute is now examining the possibility of an offshore wind farm in the Gulf of Maine that would create liquid ammonia for use in existing internal combustion engines. The electricity generated by each individual wind turbine would be used to split seawater into hydrogen molecules which, combined with nitrogen, would form liquid ammonia (NH3). "Liquid ammonia has no carbon footprint. And the byproduct is desalinated water. At room temperature it replaces oil and gas in aviation fuel and diesel," Simmons said. Rather than run expensive electricity cables beneath the sea to the land, liquid ammonia could be loaded onto ships and transported at low cost throughout the country.



Creating a fuel that can be used immediately, without costly retrofitting, is key to successfully transitioning from fossil fuels, Simmons argued. "There are 280 million vehicles now [in the United States] with internal combustion engines. It took Toyota ten years before they finally had a million Prius cars on the road," he said.



In answer to a question from the audience after he concluded his talk, Simmons spoke of specific changes he thinks must be taken by society as a whole to husband the world's remaining energy resources. "I am not in favor of electric cars [because of the net energy cost to convert existing fleets to the new models]," Simmons said. "The first thing is we should end long-distance commuting. Let people work where they live and pay by productivity. We should end global food and rely on local food. In my opinion, it is the energy content that will end global food." He said that the cost to obtain increasingly scarce fuel in the future will preclude international or transnational transport of food via truck. "Plus we won't have fertilizer because we will have an energy shortage," he added [commercial fertilizer is based on petroleum].



How we and our products move across the country will also have to change, Simmons continued. "We will move people and goods by vessel first, light rail second," he said. "I would envision in ten years, if we play our cards right, you would see up the east coast a ferry system delivering people rather than I-95. You need a new vessel fleet to do it but we are going to be forced to do that." But energy is available from seawater, argued Simmons. "That's why the University of Maine, the Department of Energy and the Ocean Energy Institute are launching a Manhattan Project," he said, referring to the government research project that invented the atomic bomb during World War II. He said that the offshore wind energy development center, recently approved by the Department of Energy, is likely to be located in the midcoast area. "Research into capturing ocean energy is where oil and gas were in the early 1950s," Simmons declared.The Ocean Energy Institute is now examining the possibility of an offshore wind farm in the Gulf of Maine that would create liquid ammonia for use in existing internal combustion engines. The electricity generated by each individual wind turbine would be used to split seawater into hydrogen molecules which, combined with nitrogen, would form liquid ammonia (NH3). "Liquid ammonia has no carbon footprint. And the byproduct is desalinated water. At room temperature it replaces oil and gas in aviation fuel and diesel," Simmons said. Rather than run expensive electricity cables beneath the sea to the land, liquid ammonia could be loaded onto ships and transported at low cost throughout the country.Creating a fuel that can be used immediately, without costly retrofitting, is key to successfully transitioning from fossil fuels, Simmons argued. "There are 280 million vehicles now [in the United States] with internal combustion engines. It took Toyota ten years before they finally had a million Prius cars on the road," he said.In answer to a question from the audience after he concluded his talk, Simmons spoke of specific changes he thinks must be taken by society as a whole to husband the world's remaining energy resources. "I am not in favor of electric cars [because of the net energy cost to convert existing fleets to the new models]," Simmons said. "The first thing is we should end long-distance commuting. Let people work where they live and pay by productivity. We should end global food and rely on local food. In my opinion, it is the energy content that will end global food." He said that the cost to obtain increasingly scarce fuel in the future will preclude international or transnational transport of food via truck. "Plus we won't have fertilizer because we will have an energy shortage," he added [commercial fertilizer is based on petroleum].How we and our products move across the country will also have to change, Simmons continued. "We will move people and goods by vessel first, light rail second," he said. "I would envision in ten years, if we play our cards right, you would see up the east coast a ferry system delivering people rather than I-95. You need a new vessel fleet to do it but we are going to be forced to do that." X