Addressing America’s Energy Challenges: The 3 Keys to Success

There is a path to economic health, and it is through energy—a clean, safe, reliable, and affordable way to drive real economic growth.

From economic and political turmoil around the world, to a stubbornly slow climb back from recession here in the United States, it can sometimes seem as if the news is all bad. It is troubling to me that some people see these conditions as the new normal. I don’t accept that, and neither should you.
Here’s a bit of good news: There is a path to economic health, and it is through energy—a clean, safe, reliable, and affordable way to drive real economic growth.
There is perhaps no economic force today with greater potential to positively influence the future of Americans than our country’s energy providers. A recent Citigroup study, for instance, estimated that an abundant, secure supply of domestic energy—and the associated reduction in energy price volatility—could add 2 to 3% to real GDP and 3 to 4 million jobs by the year 2020.
While national security, energy, and the economy are often discussed in abstract, academic terms, every decision made in these areas has real consequences in the lives of real families, businesses, and communities. How do we address America’s energy challenges? Establish a national energy policy that leverages the full portfolio of energy resources, makes energy innovation a priority, and restores America’s financial integrity.
#1 Leverage Our Full Portfolio of Resources
Making use of America’s full portfolio of energy resources is crucial. With respect to electricity, that means natural gas, renewables, and energy efficiency, as well as the workhorses of nuclear energy and 21st century coal.
Over the past few years, technological advances, expanding supplies, and falling prices have all boosted fuel diversification and led to a boom in the production and use of natural gas. The International Energy Agency estimates that shale will comprise 25% of U.S. oil and 50% of U.S. gas production by 2035, leading to hundreds of billions of dollars in cost savings for consumers.
I am enthusiastic about natural gas, but it is not a panacea. The old saying about not putting all your eggs in one basket applies here; we should be cautious about overreliance on any one fuel source. There’s too much uncertainty over how environmental, infrastructural, and market-based factors will affect the long-term availability and price of natural gas.
Renewables are another growing area of the full portfolio. Over the past year alone, global consumption of renewable energy has experienced double-digit growth (including a 28% increase in solar use in the United States), continuing a trend of expansion.
Like any energy source however, renewables have limitations. Issues with reliability and affordability prevent them from being a practical near-term, large-scale alternative to traditional types of generation. But renewables are part of America’s energy future and should be employed wherever it makes sense for customers.
We also must keep moving forward with energy efficiency. I take a broad view of efficiency and think of it in terms of “energy productivity.” If our economy is healthy and growing, standards of living should improve. When this happens, energy consumption increases. From that perspective, using more can be a good thing. In other words, use less when you can and more when you should.
Natural gas, renewables, and energy efficiency, as important as they are, do not make for a full portfolio. An energy-secure America also requires nuclear energy and 21st century coal, which together are the most reliable and affordable sources of capacity available.
Nuclear energy should be a national imperative. It’s a proven solution that currently provides about 20% of our nation’s electricity. It is also emission-free, reliable and affordable—key attributes that will drive economic growth for decades to come.
Then there’s 21st century coal. For a variety of reasons, coal has fallen out of favor as an energy resource in America. But the United States is blessed with the world’s largest supply of coal, and we have to find ways to keep it viable.
There is a way forward for coal in America and it starts with innovation. Over the last two decades, domestic energy firms have invested $90 billion in clean-coal technologies that reduce emissions and provide affordable electricity to consumers. And new processes are being developed that utilize previously unused resources like native lignite (a low-density form of black coal) to provide energy to millions of Americans while more efficiently utilizing natural resources.
#2 Make Energy Innovation a Priority
New production methods such as lignite use are great examples of what I mean when I talk about energy innovation as the second principle of a national energy policy. It’s about tapping into the deep well of American ingenuity for the creation and delivery of energy. In this area, energy firms are meeting the call; since the turn of the 21st century, America’s technology-driven energy industry has invested more than $2 trillion in U.S. capital projects and research and development to advance all forms of energy, including alternatives.
But we can’t do it alone. Energy innovation needs to be established as a national priority.
#3 Restore America’s Financial Integrity
The third principle of a sound national energy policy is restoring America’s financial integrity. We need a healthy economy, one that promotes growth for all Americans. It starts with restoring responsibility to America’s budget and enacting tax reform that is simpler and fairer. And it must provide predictable, secure markets that support the large capital investments required for a strong energy infrastructure.
With this type of sensible national energy policy, we have an opportunity to build a better future for America, one in which everyone has access to clean, safe, reliable, and affordable electricity. The security and well-being of generations to come depend on us making this vision a reality.

By Thomas A. Fanning

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