In the American Petroleum Institute’s latest State of American Energy report the lobby group touted the fact that the United States is now the world’s largest producer of natural gas, the world’s leading refiner of petroleum products and could soon become the leading producer of oil.
What came as a surprise was that API praised the rise of renewable energy resources, too.
"The U.S. is in the midst of a new era in domestic energy abundance characterized by rising use of renewable energy and increased oil and natural gas production that is strengthening our economic outlook and enabling America to emerge as a global energy superpower," said Jack Gerard, API president and CEO, in the report’s introduction.
The report goes on to note the essential rolesolar wind, nuclear, hydropower, geothermal and biomass will play in meeting America’s future energy needs. Taking a new tack, API partnered with other energy lobby groups to produce the chapters unrelated to oil and gas, including the Nuclear Energy Institute, the National Hydropower Association, the American Wind Energy Association and the Biomass Power Association.
“Few things threaten America’s future prosperity more than climate change,” begins the solar section, written by the Solar Energy Industries Association (SEIA). “But there is growing hope. Every 2.5 minutes of every single day, the U.S. solar industry is helping to fight this battle by flipping the switch on another completed solar project.”
In a document written by the primary lobby group for the largest oil and gas producers on earth, including Shell Oil Company, BP America and ExxonMobil, this is fairly remarkable.
A promising collaboration
According to Ken Johnson, SEIA’s vice president of communications, API asked the solar industry to participate in its annual report last September. “We had never collaborated on anything like this before, so there was a little trepidation in the beginning,” he said.
Typically, industries that present themselves as low-carbon alternatives to dirty, polluting energy resources don’t align with oil, gas and coal.
But the experience, it turns out, was a positive one. API allowed SEIA to write its own section with no edits, other than for style. From SEIA’s perspective, this new alliance may mark a turning point.
“We see it as a clear recognition by the oil and gas industry that solar is now a mainstream energy source and an important part of America’s energy future,” said Johnson.
“To its credit, API understands the need for our nation to have a balanced and growing energy portfolio,” he added. “And we believe that any meaningful ‘all-of-the-above’ energy approach needs to embrace the importance of renewable energy sources, including solar.”
While SEIA has heavily criticized the Koch brothers and some of their supporters in the past, it hasn’t had an adversarial relationship with API in particular.
The U.S. energy landscape is changing dramatically, with clean energy resources are increasingly competing with natural gas to produce the nation's electricity. But the oil industry is not in direct competition with solar, wind and hydro, per se. Oil predominantly fuels transportation, providing more than 90 percent of energy consumed by the sector.
As of September 2014, oil made up 3.97 percent of total electricity generating capacity, but it is seeing very little growth. Solar, meanwhile, represented 36 percent of all new U.S. capacity in the first three quarters of 2014. According to GTM Research, cumulative solar capacity in the U.S. reached 16.1 gigawatts in the third quarter of last year, bringing solar’s share of total electricity generating capacity to 1.38 percent. And that number continues to grow.
If anything, coal is the odd man out in this new energy future. No coal plants were added through the first nine months of 2014. Under proposed EPA rules to reduce carbon emissions at new and existing power plants, coal could be in accelerated decline.
Uniting with other industries under the banner of an “all-of-the-above” energy strategy could be a shrewd move for solar, which is still viewed by some as a leftist, treehugger cause. This new positioning could be particularly advantageous for the industry with Republicans holding a majority in both houses of Congress and federal incentives winding down.
According to Johnson, inclusion in the API report gives the solar sector additional “street credibility” with policymakers, many of who have traditionally been aligned with fossil fuel interests.