Power costs are stable. Gas prices decreased markedly in 2014 Oil futures are low compared to 2013 and earlier. . Production is constant. Low energy likely is fueling an economic expansion. Gas economy in vehicles is at an all-time high. Fuel efficiency lowers GHGs and cuts oil imports. America is less reliant on foreign oil. We have more money in our pockets. Utility power costs and vehicle costs are lower. Generator operations are lower. Life is great. Or is it?
Well, that depends on who you talk to. Politicians in states with in oil and gas based economies are scrambling to deal with large deficits in their budgets. The railroads are not happy over the Keystone pipeline vote. Green energy manufacturer are unhappy. Environmentalists are unhappy. Heck even the Koch brothers are probably not completely happy
The first issue is methane gas. Pipelines and fracking operations lose about 6% of the gas. A Washington Post article estimates 8 million metric tons of methane is lost each year. That is where we are trying to capture and transport it. The Bakken fields lack pipelines for gas, so much if it may be flared. The amount of fracking will continue (Florida Power and Light has said it will get into the business – but outside of Florida), so more exploration will likely lead to more methane escaping. Why do we care? Methane is 22 to 80 times the greenhouse gas that carbon dioxide it (depending on who you talk to). It accounts for 9% of GHG emission in the US – a third of that from the oil and gas industry. That gas is concentrated in the western US which makes them ripe for regulation.
Enter cap and trade. The cap and trade “industry” has been opposed by the oil and gas industry for years. However there are a number of groups –from Indian tribes to NextEra Energy are posed to benefit from cap and trade (C&T) rules. They have reduced their carbon footprint enough that they can sell carbon credits. It is doubtful that this Congress with pass C&T legislation, but much of the regulatory focus could be shifted if C&T was in place. C&T could accelerate green energy efforts.
Green energy folks want continued subsides or policies that encourage increased green power supplies, improve technology and reduce prices – all at the same time. Rolling out a major change in the energy picture is a huge investment that will not gain traction without policies to encourage it At least for now, green energy creates more jobs per KW-hr than conventional oil and gas, primarily in research and development and product manufacturing. Sewing up the patents would portend positively for America in the 21st century, much as sewing up the car, gas engine, and nuclear patents did for the 20th century. He who owns the technology should benefit. Unfortunately that isn’t the Koch brothers who are unhappy with green energy but are happy that lower oil prices might decrease the competition in the future when oil prices inevitably rise. But America would be better off in a non-oil based economy in 50 years if we developed an energy policy to address these issues with a long-term view.
However, that would take a lot of business and political leadership to overcome some of those who do not want change. These are people who have more money than the Concord coach makers who could not fight the technology change to automobiles in the early 20th century. It also takes a vision of what America should look like in 50 years. We might be short on those visionaries. And how will utilities be a part of it.