The clean tech green energy sector is hurting badly – along with the rest of our economy. A lot of promising new firms are on life support and finding it very difficult to raise desperately needed venture capital. This is not in our nation’s vital national self interests. We need to be laying the foundations for future growth now, and there is no time to waste. I would argue that this is a paramount issue of national security that it is not just about jobs or being “green,” but that it is an urgently vital necessity for our country’s future security. This is not an optional choice. It is not a luxury…. a nice to have kind of thing. This is the very life blood of our country…. of our industrial society.
An industrial society needs energy, and lots of it. America needs to urgently begin a national crash program of investing in domestically controlled renewable energy supplies, such as wind and solar, right now, while we still have a little breathing room to begin laying the foundations for a new American energy economy. It is a matter of national security. Without a reliable source of domestic energy our nation will become the hostage of far away unstable lands, and our country will rapidly decline. The US has the wind and the solar resources that can rapidly begin to fill the gap of collapsing oil energy supplies, if combined with an aggressive investment in energy efficiency and in the smart grid that is adapted to these kinds of supplies. However, this will only occur if we lay down a green economy infrastructure down now…. while we still have the ability and critically – the energy — to do so.
One Word… Oil
The reason I make this urgent argument can be summed up in a single word, OIL. It seems like there is no problem; prices have fallen at the pumps right? In actuality, our world and our nation is facing a huge looming oil crisis in the very near future. The era of cheap, plentiful oil is over ,and our nation is ill prepared for the coming sudden oil shock that will strangle our economy the minute it starts to recover, and energy demand begins to grow again.
Oil is a very inelastic commodity. In plain English, this means that demand for oil will fall very little as prices rise, much less so than for doughnuts, for example. The growing economies of the world are demanding more and more of the world’s oil for their own industrial infrastructures and consuming classes. For example, in 2003, China overtook Japan as the world’s second largest consumer of oil after the US. Consider this statistic. By 2010, India will have 36 times more cars than it did in 199o; China will have 90 times more, and by 2030 it will have more cars than the United States, according to the Energy Research Institute of Beijing. Demand for oil is growing globally, and notwithstanding the current economic crisis, it will soon resume growing again. however, supplies are not growing, nor can they grow.
Oil Production has Peaked and is in an Irreversible Global Decline
The limits of the age of oil have been reached and it is all downhill from here. Many petroleum insiders have pegged the world’s peak oil production to have already occurred somewhere around last year in 2008. Most of the world’s most important mega fields are in steep decline. Cantarell, off the Yucatan in Mexico, which was the world’s second largest field peaked in 2004 and is now declining at a very sharp rate. It dropped 15% in a single year, in 2007, according to Pemex official production estimates. Mexico has historically been one of our nation’s most important suppliers of petroleum. The Ghawar field in Saudi Arabia , which is by far the largest oil deposit ever discovered on planet earth, is also thought by many to be in steep decline; the exact amount of that decline is not know because the Saudis closely guard oil geology statistics as a national state secret. There are reports of increasing salt water intrusion; this a sure sign that the field is reaching the sunset of its productive life. Over the last two years, Saudi production has been declined by about a million barrels per day. The Saudis claim that these are due to cuts in response to weak demand, however it should be noted that the big drop off in production coincides with the period of sharply rising oil prices.
As Soon as The Economy Begins to Recover It Will Face an Oil Price Shock
This unchangeable reality of declining global petroleum supplies, coupled with a pent up demand for energy in growing new economies, means that the very minute the world begins to climb out of the current very deep recession it is now experiencing, it will be hit a with gut punch of rocketing energy prices that will strangle any recovery, almost as soon as it has begun. Just imagine what a price of say six or seven dollars a gallon would mean for our economy.
We Can Build an Energy Bridge for Our Future and Its Color is Green
The continental US has some excellent wind resources and wind energy is a relatively mature technology that could rapidly be ramped up to much higher levels of production than it is currently providing. In fact, the United States has enough wind resources to generate electricity for every home and business in the nation. According to the U.S. Department of Energy National Wind Technology Center at the National Renewable Energy Laboratory, the cost of wind generated electricity has by now fallen to somewhere between 4 and 6 cents per kilowatt hour, which is in the same price range as electricity from coal fired power plants.
The US is also has some of the world’s best solar power resources in our southwest regions. Although solar thermal and solar photovoltaic are not as far along down the price curve as wind energy is, they compliment wind energy, and provide a second renewable energy leg to stand on. The costs of both solar thermal and solar photovoltaic electric energy generation are falling very rapidly, and are now beginning to approach the all important milestone of grid parity, which is the average cost of electricity on the current grid. Solar power is also very suited for home and water heating. Both passive solar heating and active systems can be used to replace our current reliance on fossil energy for doing these things in many areas of the country.
To read more about how the cost to produce solar PV modules is rapidly falling see our article on this subject: Cost to Produce Solar Cells Brought Below $1 per Watt.
In addition some of the cellulosic bio-fuel research shows promise of contributing to our liquid fuel needs. There is a growing interest in using aquaculture algae as a bio-fuel crop to produce high energy density liquid fuels that are especially critical for aviation especially.
A Smart Grid for Green Energy
Both wind and solar will require a massive federal investment in a Smart Grid that is able to distribute, store transient surpluses and mitigate peak demand in order to really be able to make a significant contribution to our country’s energy security. This is a perfect Marshall Plan type project; in many ways, it would be like the federal funded highway system begun by President Eisenhower. Building out the Smart Grid will also help us use energy more efficiently smoothing out the troughs and peaks of supply and demand.
The Low Hanging Fruit is Energy Efficiency
Energy efficiency sometimes — somewhat playfully called negawatts — is definitely the low hanging fruit. Our country can become much more energy efficient. To the extent that we do become efficient, we reduce our exposure to energy price shocks. Buildings, homes and offices, factories, stores, warehouses, etc., now consume huge amounts of energy for lighting, heating and cooling. Increasing buildings’ energy efficiency by adding insulation, double glazed windows and energy efficient lighting is something that can be done now. Doing so could provide immediate jobs for millions of under-employed workers in the trades and that will prepare us to survive in a world of rising energy prices. The gas guzzling trucks, cars and SUVs that clog our country’s roads need to be replaced by vehicles that go further on less gas, and rely increasingly on electric energy – produced by the wind in Kansas, or the sun in Arizona rather than on oil produced in Saudi Arabia.
In our article Green Buildings the Brick and Mortar of the Green Economy we explore how our nations buildings could use green building techniques and energy efficiency to vastly reduce their energy consumption while also improving water quality and the urban environment.
There is Good Reason for Having Hope, but We Need to Act Now
There is hope for our nation finding a way to ensure its energy security and forge a new kind of prosperity. However, in order to realize it, we need to act now. We need to act together, urgently, as a nation with a unity of purpose. Our country’s very survival is at stake. If we ignore our energy problems, and pretend that they do not exist, we will be risking a collapse of our general well being as we very suddenly run out of the blood that is needed by any technologically advanced society – the blood of energy. If we seize our destiny and muster our national resources, we can rapidly build out the infrastructure for a new energy economy, and nurture the growth of the critical industries that will power that future . So, when the next big oil shock slams into the world, our country will be well placed to not only weather it, but to lead the world towards a future that does not depend on burning fossil carbon and endangering our planets biosphere with global warming. However, we need to act decisively and begin acting now. There really is no more time to waste.
