Recently, the New York Times hosted a conference that gathered a range of panelists, from environmental activists to energy industry insiders, to address challenges and opportunities in meeting our current and future energy needs. The fascinating event highlighted the latest thinking about how we produce and consume energy and what side effects occur due to society's choices in fuel sources.
Much has changed in the past couple of years. As energy guru Daniel Yergin noted, wind energy isn't an 'alternative' energy source anymore because there are now over 45,000 megawatts of installed wind capacity, providing three percent of our energy mix. Yes, that sounds small, but it's a significant amount and its energy capacity is growing faster than any other energy source. Renewable, yes, but alternative, no longer.
Predictably, hydraulic fracturing, or fracking, was a hot topic for the day. Industry reps agreed that regulation is necessary for companies that frack to help the industry to avoid pollution. Good news to hear; let's hope the rest of the oil and gas industry concurs. On the same panel, Mark Brownstein, chief counsel of the Energy Program at the Environmental Defense Fund, noted that fracking is already subject to federal clean air and water rules, but a lot of regulation has to come from the states themselves. New York State has a moratorium on fracking, in partial response to concerns raised in Pennsylvania about water contamination and other pollution related to the fracking process.
Tomorrow's energy will certainly be cleaner and increasingly renewable, but all eyes are watching what contribution natural gas will play.
Fracking has also contributed to the drop in the price of natural gas. On the day of the conference the price of natural gas dipped below $2 per MMBTU. That put the price equivalent at about $12-$15 for as much energy as is contained in a barrel of oil as compared to over $100 for an actual barrel of oil today. That of course begged the question: in the future, will we drive electric or natural gas powered cars? Natural gas and electric cars are now both fairly cheap to fuel, though fueling with electricity can be time consuming and fueling up with natural gas will be a new experience for consumers. A few panelists agreed that natural gas seems a bit more likely to be used in fleets of vehicles (think buses and delivery trucks) while electric cars will be still competing with standard gasoline autos as they face the chicken and egg problem with what to build first, the vehicles or the charging infrastructure.
On a panel about subsidies, a solar industry representative defended the "training wheels" subsidies that they receive, while noting that they should go away eventually. The Nuclear Energy Institute agreed, noting that all energy subsidies should have a sunset clause, like some of the government support that the nuclear industry received in its first few decades.Amy Myers Jaffe, director of the Energy Forum at the Baker Institute, was generally not a fan of subsidies, but did acknowledge their utility in research and development of technologies.
Thinking long term, panelists were largely supportive of solar energy, though projections for the technology to take off varied from a few decades to over a hundred years. Those projections were mostly dependent on how long the panelists viewed the supply of cheap natural gas and whether the advent of better (using nanotechnology or improving efficiency or a combination) or cheaper solar technologies occur in the near term. Phil Radford, executive director of Greenpeace USA, believes that cheap natural gas will collapse the coal industry, but in a post-coal world, natural gas prices will inevitably rise, ushering in the clean energy economy. Lester Brown, founder of the Earth Policy Institute, has a similar vision adding that compounding factors like increases in food prices, rising population and climate change will make a push for decreasing the carbon in our energy sources.
In all, it was an interesting and informative day. My takeaway: energy for tomorrow will certainly be cleaner and increasingly renewable, but all eyes are watching what contribution natural gas will play.