Energy is one of the most critical issues of our time. As demand for it rises, how we procure it and what it costs consumers and our planet must be part of the public discourse.
Yet whenever the topic of energy surfaces, tensions arise. The acceleration of the modern era has profoundly changed the way we view and use energy. In addition, the current paradigm of political discourse is all-but-civil. But, let’s be clear: we can’t afford to veer off on political tangents if we want to have productive discussions about energy.
Renewable sources are critical to future-proofed energy infrastructures. To be frank, we’ll need to rely on each energy type to modernize and energize our economy, now and in the future. Specifically, each sector will create jobs, generate income, and distribute wealth in all parts of the country.
To talk about energy effectively, we must stop politicizing it. We need to talk with each other, not at each other. Intrinsically, energy makes life better. It allows us to light our homes, drive our cars, and create amazing things together. Abundant, affordable and diversified energy is critical to our future.
The Power of Renewables
Today, renewables represent a small fraction of the overall energy mix. But by 2035, renewables may make up 50% of our energy consumption. When we talk about horizon-scale predictions like these, it’s easy to lose sight of the present. Today, even in their semi-infancy stage, renewables are impacting our lives.
Renewable energy adds over 550 thousand jobs to the economy — particularly in the Midwest. Of those jobs, 45% come directly from solar. As more rural electric co-ops (customer-owned utilities) come into being, the number of jobs in local communities will rise. Renewables can add value to rural regions that often experience a job drought.
Production capacity in wind energy has also been on a steady increase in these areas in the past few years. Wind farms create rental income for farmers who lease land for turbines, and in turn, this provides tax revenue for local governments.
Still, renewables can’t handle all of our energy needs in the immediate future. Don’t get us wrong; we strongly support renewable energy. And, we aren’t alone in our enthusiasm for it. For example, Google has well over 50 current renewable energy projects, while Tesla lives and breathes renewable energy. Tech giants like Apple, IBM, and Microsoft also have renewable energy investments. In other words, renewables are a critical part of our nation’s energy portfolio.
However, renewables alone can’t handle all of our current needs. We still need conventional energies in the mix. Oil, gas, and nuclear aren’t going away anytime soon. In fact, they’re set to increase in use over the next few decades.
Oil and Gas
McKinsey predicts that oil and gas will continue to play a prominent role in our energy mix for the next few decades. Not only have we spent hundreds of years building critical oil and gas infrastructure, but gas and oil continue to be one of the most cost-effective ways to power modern infrastructures.
Still, reliance on oil and gas doesn’t necessarily equate to using conventional processing and acquisition methods forever. Major producers like Oxy, BP, Shell are having legitimate conversations about sustainability and implementing important initiatives to support it.
To date, BP has invested over $5 billion a year on projects like its Reduce, Improve, Create (RIC) framework. Meanwhile, Shell is investing in carbon reduction and capture technologies, and Oxy is investing in low-carbon economic initiatives. As these major companies continue to fund clean energy programs, the smaller companies will follow suit.
The Permian Basin in Texas is still America’s largest producer of oil and natural gas. Upgrading infrastructure and getting the product to market efficiently is critical for America’s large cities. Sure, everyone wants a healthy planet. However, talking about carbon reduction is just as important as talking about future-driven energy mixes.
Nuclear is an interesting element of the energy mix. It isn’t a growing sector but still retains its importance. Some futurists like Bill Gates firmly believe that nuclear is the world’s best option as a future energy source. And, he’s certainly not alone in his thinking. Nuclear has the very real potential to be an environmentally benign energy source.
This past year, for instance, Connecticut included two nuclear power plants in its “zero-carbon” energy contract program. It will be interesting to see if other states add nuclear power to their energy mix.
You don’t need to own a Tesla or an all-electric Ford Mustang to get on the fuel efficiency bandwagon. Engine-maker Cummins recently announced a new sustainability initiative, with impressive goals set for 2030 and 2050. Its focus is on creating a net-zero carbon future through facility upgrades, supply chain efficiencies, and sustainable products.
Putting Up the Money
Talking about energy is important but finances shouldn’t be left out of the conversation. Several enterprise firms have taken the initiative and set an example by investing in new energy plays. Here are just a few examples of companies investing in early-stage energy projects across many sectors:
- BP’s investment in Belmont Technology, an artificial intelligence provider for oil and gas exploration
- GV and Comcast Ventures’ investment in Dandelion Energy, a geothermal provider
- Total and Equinor’s investment in Level10 Energy, a renewables marketplace
- NTT Docomo and Statkraft’s investment in Metron Labs, an energy analytics platform
- APICORP and Equinor’s investment in Yellow Door Energy, a solar leasing firm
- Tepco’s investment in Zenobe Energy, an energy storage consultant
Energy will always be a supply and demand game. And, prices will fluctuate as market conditions and political winds change. Thus, the latest oil and gas downturn doesn’t necessarily spell the end of fossil fuels.
That said, each downturn represents an opportunity for all energy firms to think differently about the future. The future, rightly, will rely less on oil and natural gas than it does today.
A Constructive Conversation: How to Talk About Energy
We aren’t asking for 100% consensus among all energy players. But, what is critical in the conversation about energy independence is that we agree to look at all options as we consider the impact on people and the planet. We should avoid taking a “one-or-nothing” approach when an “all-of-the-above” approach will better serve us.
In the end, how we talk about energy matters. As we enter a new decade, we welcome a new era of healthier, more collaborative discussions about energy independence. The goal isn’t to realize our ideals but to thrive in whatever reality meets us.