The NEI Morning Clip File

Here are some of the news clips we're reading at NEI this morning. The United States will join South Korea on a project to develop a next-generation nuclear reactor that promises to produce large quantities of hydrogen at a low cost. The project is part of an effort to make South Korea's economy hydrogen-based by 2040, as reported in Monday's afternoon clip file.

Korea Atomic Energy Research Institute and Doosan Heavy Industry and Construction Co. are pushing to set up a joint nuclear hydrogen research center in cooperation with General Atomics, a U.S.-based nuclear technology company.

The center will aim to build key components that will allow the futuristic nuclear hydrogen system to work efficiently and economically, [said an official with South Korea's Ministry of Science and Economy].

Other benefits that can be derived from the cooperative venture include getting first-hand experience of the U.S. company's extensive experience in this field.

General Atomics is the only company in the United States that has been working on the new reactor system since the 1970s and is an integral member of the U.S. Department of Energy's nuclear hydrogen initiative and the next-generation nuclear plant.

A memorandum of understanding is expected to be signed in the next few months, with research centers being built in General Atomics main office in San Diego and at the Korea Atomic Energy Research Institute in Daejeon, about 164 kilometers south of Seoul.

Rep. Pete Hoekstra (R-Mich.) praised the recently passed Energy Policy Act of 2005 as a "market basket" of energy incentives during a visit yesterday to Cadillac, Mich. After arriving in a Ford Escape hybrid, Hoekstra acknowledged that "there's no quick fix for gas prices. The only silver lining is [that the energy bill] will force us to seek alternatives and hopefully force us to seek domestic alternatives."

"The short-term problem is going to exist but in the medium term, three to five years, there could be a significant change," he said.

With gas prices being one of the biggest issues he has heard since Congress broke for the summer, Hoekstra said there is a possibility for amendments to the bill to further encourage hybrids automobiles.

The plan also includes incentives for oil companies to find new sources of fossil fuels in the United States. Because of the need for oil now, Hoekstra said it makes sense to explore closer-to-home alternatives.

Overall, the bill has a long-time frame because it takes time to make the incentives work. Some say it may not be aggressive enough but Hoekstra said a more aggressive bill would have a hard time getting through Congress.

Purdue University is creating an energy research center -- funded by the new energy bill -- where scientists will work to reduce the nation’s reliance on foreign oil by developing biofuels, solar and wind power and other alternative energy sources.

The new Energy Center will bring together more than 75 Purdue experts who will initially work on bio-fuels and clean coal technologies.

... Energy Center interim director Jay Gore said the center will work to shift the nation from its reliance on oil, now at record-high prices, as its primary energy source. Among the projects will be refining energy storage technologies, including superior batteries, power electronics and renewable energy devices such as solar cells.

Researchers also will work to harness the wind, make nuclear energy safer and work on bio-energy projects that turn renewable plant materials into fuels such as ethanol.

“Our challenge is to prepare for a transition from the imported fossil fuels to other energy sources and energy independence,” said Gore, who is also the associate dean for the Purdue College of Engineering.

Oil prices continue to ease -- $66.02 is the current price per barrel. Gasoline fell to $1.9823 per gallon.

Analysts said prices would continue declining in the short-term, as the summer driving season draws to an end and the U.S. shows healthy stocks of crude. But bullish sentiment was expected to return in the long-term with the approach of winter in the Northern Hemisphere.

"We just have to get used to the probability that oil is trading in a much higher range and for much longer than previously expected, and an upper price ceiling is almost impossible to determine at this moment," said Alex Scott, oil analyst at Seven Investment Management in London.

A monthly report released Wednesday by the Organization of Petroleum Exporting Countries said the pace of oil demand is expected to rebound next year, supporting long-term bullish arguments.

"Average world oil demand for 2006 is projected to grow by 1.6 million barrels a day or 1.9 percent to average 85.2 million barrels a day," the report said. "This slightly higher forecast is due to the slightly more optimistic view of the world economy for the coming year."

... Markets remain shrouded in uncertainty over supply disruptions that could affect output when demand peaks during the Northern Hemisphere winter. A stream of refinery outages in the United States sent markets into a frenzy in recent weeks as oil prices zoomed to new highs.

Come back this afternoon for more news from the NEI Clip File.

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