Supporting Material

The following are quotes, excerpts and general supporting documentation related to the need for alternative forms of energy.

Notable Quotations

"Without a clear, coherent energy strategy for the nation, all Americans could go through what Californians have experienced, or worse…..the aim here is efficiency, not austerity…the nation cannot simply conserve or ration our way out of the situation we are in." Vice President Dick Cheney Presidential Task Force on Energy (Associated Press General Meeting May 2001)

"A number of leading geologists and oil consultants are publishing the results of a new study…their calculations suggest that global production of cheap crude oil - the lifeblood of the global economy - could peak before the year 2010, but no later than 2020." - Jeremy Rifkin, "The Hydrogen Economy"

"To talk about "the hydrogen economy" is to talk about a world that is fundamentally different from the one we know now. A hydrogen economy will mean a world where our pollution problems are solved and where our need for abundant and affordable energy is secure…and where concerns about dwindling resources are a thing of the past." - Spencer Abraham, U.S. Secretary of Energy (from U.S. Department of Energy National Hydrogen Energy Roadmap Nov. 2002)

Today, the North American and much of the Western world's power supply industry is in a state of crisis, although perhaps not as "visible" on a daily basis as the Oil Crisis of 1973. In the United States, domestic energy production peaked in 1970 and has been steadily decreasing since. The current system cannot continue to attempt to fulfill the rising demand by an energy-hungry Western world combined with many rapidly developing, expanding Third World nations. Presently, we consume about two barrels of conventional crude oil for every new barrel discovered. The negative effects of continuous fossil fuel use on the global environment are being felt in every corner of the Earth, as we continue to desperately search, produce and burn more fossil fuels. Since the majority of electric power in the U.S. originates from fossil-fuel fired generating plants, an increase in energy production equals a proportionate increase in emissions of carbon dioxide and other pollutants, which contribute to the global warming problems. Serious geo-political concerns (currently the politically unstable, volatile Middle East controls about 30% of all known oil reserves), the availability of abundant new fuels, rising exploration, production and retail costs of natural gas and crude oil all demonstrate that reliable, secure, affordable energy sources are needed now, not in thirty years.

An ideal solution would be one that increases domestic power output without the requisite increase in fossil fuel burning and resultant effluence. A new economic model, based on affordable, reliable, domestically-produced hydrogen, would resolve the world's fundamental energy supply, security, pollution and greenhouse gas emission issues. Recent legislation in California and across much of the U.S. has mandated much more stringent controls on automotive emission standards, forcing every automaker to scramble to reinvest shrinking corporate profits into new hydrogen and fuel cell powered cars and trucks - many of which will not be launched for mass production for several years, and much later if the supply and distribution of hydrogen is limited to much lower levels than we currently have for gasoline and diesel. General Motors and Toyota are leading these efforts, GM having publicly revealed a new hydrogen fuel cell concept car at the September 2002 Paris Car Show and at the Detroit Auto Show in January 2003. One of the primary stumbling blocks of this hydrogen usage model in the automotive fuel cell segment is the prototypical "chicken and egg" scenario. What must come first - thousands of hydrogen-fueled cars and trucks on the road or the widespread distribution of inexpensive fuel to power them? Currently there are no public commitments from the major fuel retailers to convert the over 176,000 retail stations across the United States to delivering hydrogen until there is enough true demand. And if there were, full conversion and deployment could be several years away.

The field of alternate energy has largely surfaced out of this energy supply and production crisis, endeavoring to provide an economically-friendly, yet energy-viable solution. The alternate energy industry is most well known for its research and development on the fuel cell, popularized by more than forty fuel cell firms across North America and Europe. Though fuel cell companies do produce clean power and some trade publicly with established capital values in the billions of dollars, the practical application of the technology is significantly limited due to the high installed cost, especially for PEM-based fuel cell organizations. For this reason, the fuel cell has not been widely adopted as it is simply not an economically feasible solution in such applications as home and commercial energy, automotive, fleet transportation, stationary, government/military and micro/portable fuel cells.

The stage is set: Alternate Energy Corporation owns an affordable, reliable, scaleable, on-demand, high-grade hydrogen production process that is capable of handling many of these complex energy needs, globally.

A Brief History of Blackouts

The current global energy situation has been deteriorating for many years, resulting in many massive failures of the existing power supply system:

The Great Northeast Blackout of 1965

More than 80,000 square miles and over 30 million people throughout eastern U.S. and Canada are left in the dark for many hours.

The New York Blackout of July 1977

After multiple lightening strikes knocked out power to all of the New York City area, 8 million people were left without power . This blackout triggered mass arson and looting across the city, costing businesses and residents millions in damages.

The Northwestern Blackout of 1996

Transmission lines sagged into a grove of trees, causing an electrical short that knocked out power to more than 4 million residents of Oregon, California, and several other western U.S. states.

Eastern North America August 14-15, 2003

Over 50 million people lose power, some for days across the Midwestern U.S., around the Great Lakes and into Canada, apparently due to a technical problem with a series of transmission lines called "The Lake Erie Loop". The biggest power failure in U.S. history cost hundreds of millions of dollars in lost business, and crippled many key facilities for days.

October 2, 2003 Italian blackout blamed on falling branch

A storm-tossed tree branch that hit Swiss power lines helped trigger a massive blackout covering almost all of Italy. It trapped thousands on trains and even forced the Pope to use a back-up generator to proclaim his new cardinals.

The blackout underlined the dangers of Italy's reliance on imported power. It was Italy's worst power cut since the Second World War. Most of the country's 58 million people were affected - more than in North America's biggest blackout, which left 50 million people without power in Canada and the United States on August 14, 2003. As experts tried to determine the cause, none of the three countries involved wanted to take the blame. Swiss and French energy officials said the responsibility was Italy's, while the Italians noted that the power cut came from France. Initial investigations indicated a chain reaction that started in Switzerland and moved through France.

August 28, 2003 London, England

A massive power outage occurred in many parts of London on August 28, 2003. It was the largest blackout in South East England since the 1987 storm, affecting an estimated 500,000 people Even before the blackout, the UK media was anticipating a UK equivalent of the 2003 US-Canada blackout, which occurred two weeks earlier (August 14) and affected about 100 times more people. For example, on August 15, The Daily Express had reported that the National Grid might not be able to cope with predicted power surges in the winter of 2004.

On the day of the blackout London Mayor Ken Livingstone declared the situation a "catastrophic failure of our electrical power system".

The Demand for Alternative Energy

Based on the energy demands and growth in all major market segments (Commercial, Industrial, Residential and Transportation), plus the geographic energy demands of both the developed Western nations and the high growth developing Asian and other markets, AEC has a very real long term opportunity to capture share of a multi-trillion dollar industry.

Recent research highlights indicate that:

• World energy consumption is projected to increase by 54% from 2001 through to 2025. To note, total net energy consumption in developing Asian nations, primarily China and India, will almost double from 139.2 quadrillion Btu in 2001 to estimated 265.9 quadrillion Btu in year 2025. Source: U.S. Department of Energy, Energy Information Administration International Energy Outlook 2004 Report.
• Today, total global energy consumption is 404 quadrillion BTUs (consists of 24% U.S., 10% China, 7% Russia, 5% Japan, 4% Germany). Source: U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2004 Report.
• Many of the world's leading geologists and oil industry consultants have calculated that global production of crude oil from existing and known recoverable reserves (the current lifeblood of the global economy), will likely peak between year 2010 and 2020. Source: The Hydrogen Economy, Penguin Putnam Inc., New York, Jeremy Rifkin Chapter 2.
• In the U.S., total net generation of Electricity is 3.72 trillion kWh (consisting of generation from: Coal 51%, Nuclear 21%, Gas 16%, Hydro 6%, Oil 3%, Renewable forms 3%) Source: U.S. Department of Energy, Energy Information Administration, 2001 Annual Energy Review.
• Globally, electricity generation is expected to nearly double between years 2001 and 2025, from 13.3 trillion kWh to 23.7 trillion kWh. Strongest growth is projected for countries in the developing world (e.g. China and India) where net electricity consumption is forecast to rise by 3.5% per year, compared with a projected average increase of 2.3% per year worldwide. Source: U.S. Department of Energy, Energy Information Administration, International Energy Outlook 2004 Report.
• Electricity sales are divided into 3 primary market segments: Residential use 35%, Commercial 32%, Industrial 33%. To note: per capita energy use is projected to increase and the projected demand for total energy services in year 2025 is noticeably higher than in 2004. The average U.S. home in 2025 is expected to be 6% larger, and to use more electricity more intensively. Personal highway and air travel per capita are expected average 2.2% and 2.3% growth per year, from 2002 to 2025. The growth in demand for energy services and primary energy use per capita is projected to increase by 0.7% per year each year through 2025. Source: U.S. Department of Energy 1002 Annual Energy Review.
• U.S. Energy Consumption by sector (in billion kWh):

Sector:	Yr 2001	2004	2010	2025
Commercial	515 bKwh	526 bKwh	603 bKwh	758 bKwh
Industrial	947 bKwh	951 bKwh	1,047 bKwh	1,261 bKwh
Transportation	786 bKwh	827 bKwh	948 bKwh	1,212 bKwh
Residential	591 bKwh	631 bKwh	675 bKwh	765 bKwh

Source: U.S. Department of Energy, Energy Information Administration. Year 2001 figures are actual; 2004, 2010 and 2025 are estimates.

• U.S. Energy consumption is projected to increase in all end-use sectors, with highest growth rate expected for the commercial sector at 2.2% per year from year 2002 to 2025, compared with 1.6%for industrial and 1.4% for residential electricity demand. Residential demand, which grew faster in the past two decades, varies by season, weather trends, day and time of day. The projected growth in commercial and industrial electricity demand from 2002 to 2025 will require significant additions of baseload generating capacity. Source: U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2004.
• The fuel cell and distributed hydrogen market will grow from a current $700 million industry to $13.6 billion within 10 years. The combined three high growth clean energy markets (fuel cell and distributed hydrogen, wind power and solar PV) expanded from $9.5 billion in 2002 to $12.9 billion in early 2004, to an estimated $92 billion market in 2013. Source: Clean Energy Trends March 2004 Report, Clean Edge Inc.

Sources:

Washington Post, "Fight Ahead on Emissions - McCain, Lieberman Plan Push for Greenhouse Gas Limits", Eric Pianin, Tuesday, January 7, 2003; Page A04
National Energy Policy, Chapter 1 - Taking Stock: Energy Challenges Facing the United States
UTC Fuel Cells Website - FAQ Section, http://www.utcfuelcells.com/commercial/faq.shtml
US Department of Energy Website, 2001 - Total US MegaWatt (MW) Demand - http://www.eia.doe.gov/emeu/cabs/usa.html#elec