Just over a year ago, President Obama lamented, "Presidents and politicians of every stripe have promised energy independence, but that promise has so far gone unmet."
But perhaps energy independence is not the issue, according to panelists at a conference hosted by The New York Times on Wednesday.
“For the past three decades, energy independence has been the holy grail,” said Jim Rogers, president and CEO of Duke Energy. “But it’s the wrong question. We need to think about new energy systems in an interdependent way.”
Instead of independence, the more important word is security. But security has many sides, according to Rogers and others on the panel. The electricity in the U.S. is almost wholly provided by domestic sources, mostly coal and natural gas. For electricity generation, it is about price security and to some extent environmental security. For the transportation and liquid fuel sector, it is about national security. But it is also about environmental security, as the Deepwater Horizon disaster so clearly demonstrated. There was less agreement, however, on how to move toward cleaner, more domestic fuel sources across the board.
“We can’t let perfect be the enemy of good,” said Carol Browner, former energy czar to the Obama administration. She noted that with the new fuel economy standards for light vehicles and heavy-duty trucks, nobody got exactly what they wanted, but everyone, including car makers, legislators and environmentalists, got enough of what they needed in the bargain to move ahead.
Much of the discussion focused around technology and policy. Rogers argued that technology, whether for fracking or renewables or smart grid, can shift the U.S. energy equation. Technology is evolving in spite of regulation, but nearly everyone on the panel agreed that the federal government needed to send clear signals to the market that would spur investment in cleaner technologies.
None of the Americans on the panel could imagine a future like that here, but between energy efficiency and stronger signals about carbon in the future, progress could be made. “The Holy Grail is the development of the technology, and then technology will drive policy and policy won’t drive technology,” said Rogers. He also felt that the technology does not just have to come from our own soil. He pointed to cheapsolarpanels from China, which he felt should drive renewable growth here in the U.S.
“I think energy efficiency can be a key contributor to energy independence,” added Steve Nadel, executive director, American Council for an Energy-Efficient Economy. “By 2050, we could reduce energy use 40 percent to 60 percent compared to business as usual through energy efficiency.” He noted that energy efficiency is cheaper than even natural gas.
But natural gas, and fracking, came up again and again -- no surprise since T. Boone Pickens was on the panel. He noted that energy independence is stupid if you look north to Canada, which supplies us with significant amounts of oil. He felt many states were doing adequate jobs in regulating natural gas, but he too is looking toward the feds. “All I’m looking for from Washington is some direction,” he said in regards to his wish to see a heavy-duty liquid natural gas fleet, which he felt was an alternative to not being dependent on OPEC.
The panel at times echoed a conversation at the Energy Innovation Summit in Washington, D.C. last month between Bill Gates and Steven Chu regarding a carbon tax. Maybe we don’t need one today, tomorrow or even in a decade. But both gentlemen argued that a carbon tax that might kick in 20 or 30 years from now would push the energy economy in a different direction.
In Germany, that has already happened. “The concept of base load disappears in Germany” in the coming decades, said Jochen Flasbarth, president of the Federal Environment Agency in Germany. While Duke Energy’s Rogers cautioned against too much of a reliance on natural gas in electricity generation, Flasbarth noted that his country, which pays far higher electricity prices than the U.S. and lacks domestic energy resources, expects to become less concerned about base load as it finds a way to make renewables work all of the time.
Only Pickens noted the cost of energy in the U.S. is incredibly low compared to other regions of the world. “We’re going around crying with a ham on our shoulder about $4 gasoline,” he said. “But Europe pays $9.”
The unspoken reality is that to get to a place of energy security, and not independence, it will take a huge economic and technological investment that many Americans seem unwilling to bear. “The dream is getting the balance right between reliability, affordability and clean,” said Rogers.