Energy industry looks toward cleaner future
The state of America’s energy industry is solid, growing and generally on board with calling for bipartisanship in Congress to keep it headed in that direction, according to panelists during the Jan. 28 session of the 17th Annual State of the Energy Industry Forum hosted by the U.S. Energy Association (USEA).
Capitol Hill lobbyists from across the investor-owned, rural electric cooperative, natural gas, petroleum, nuclear, mining, and solar energy sectors highlighted what each has already done to contribute to a cleaner future and what remains to be done moving forward.
Their comments follow President Joe Biden’s executive order earlier this week to create a climate task force that will develop a government-wide action plan for reducing emissions; steer federal procurement to renewable energy; require all federal agencies to consider the climate in their decision making; prioritize federal lands and water for clean energy development; and speed up permitting of clean energy and transmission projects.
Such actions, the panelists said, are part of the Biden administration’s plan to simultaneously help the federal government rebuild the U.S. economy and address climate change.
Right now, said Tom Kuhn, president of the Edison Electric Institute (EEI), the energy industry “is going through a transformation which I don’t think anyone would have deemed possible a decade ago.”
“We have now committed totally to moving toward making energy as clean as possible and doing so as fast as possible without compromising our affordability and reliability,” said Kuhn, whose organization represents all U.S. investor-owned electric utilities.
Currently, almost 40 percent of the nation’s electricity comes from carbon-free sources, said Kuhn, adding that carbon emissions from the American power sector have hit their lowest level in more than three decades. And while that level continues to fall, he said, “the journey is far from over” and EEI member companies have committed to as much as a 50 percent reduction over 2005 levels in carbon emissions by 2030 and an 80 percent reduction by 2050.
Kuhn and others noted during their panel summaries that it will take a combination of technologies to continue this trend, including zero-carbon technologies like nuclear, solar, wind, storage, natural gas, and energy efficiency. “I am very, very convinced that we will get there,” said Kuhn.
American Petroleum Institute (API) President and CEO Mike Sommers agreed, noting that the U.S. already leads the world in emissions reductions since 2000 thanks to greater use of natural gas and advancements in technology and innovation. “Our industry has already reduced methane emission rates by nearly 70 percent in the largest producing U.S. regions,” Sommers said.
Regarding solar, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said two tracks are planned to continue growing the sector: to increase market opportunities by enacting policies and clearing obstacles to protect existing markets, open new ones, and ensure long-term health demand for solar products; and to mitigate business risks by identifying and addressing any and all risks.
Likewise, American Gas Association (AGA) President and CEO Karen Harbert said that as the nation faces the current financial crisis brought on by the COVID-19 pandemic, “natural gas will not only continue to provide an affordable energy option for the nearly 180 million Americans who rely upon it, but it will be essential for our nation and this administration to achieve our shared emissions reductions and environmental goals.”
The ongoing pandemic, as well as the catastrophic weather events of 2020, have proved “the essentiality of energy,” said Harbert.
Bring on the new stuff
New carbon-free technologies also are needed at a faster pace for the energy industry to reach its goals for a clean future, the panelists said, including carbon capture, hydrogen, new nuclear plants, advanced renewables, and utilization, among others.
“I foresee a future where the tax code will be continued to be utilized to encourage all types of new technology and we think it’s important that electric cooperatives have the ability to be part of the solution in deploying those technologies,” said Jim Matheson, chief executive officer of the National Rural Electric Cooperative Association (NRECA).
EEI’s Kuhn said the industry got a decent start last year when Congress passed the energy bill, “but we’re going to need a lot more research and development on these carbon-free technologies to move forward, so we’re counting on working with Congress to make that happen.”
API’s Sommers added that while oil and gas today make up about 60 percent of the global energy mix, and despite increasing investments in renewables and concerns with emissions, the two sectors still are projected to make up about 50 percent of the global energy mix by 2040.
“Today’s alternatives don’t consistently offer the energy density, scale, transportability, availability, and the affordability required to be widely accepted,” Sommers said. “While society will move towards lower-carbon sources of energy as technology improves, oil and gas will continue to play an important role in the long-term energy mix.”
Playing with politics
Along with the right technologies, the right policies are needed to turn the goal of a 100-percent clean energy future into reality, said EEI’s Kuhn.
For example, in both chambers of the 117th Congress, “the razor-thin margins will require bipartisan cooperation to achieve major clean energy and climate legislation,” he said. “Hopefully, maybe that can happen.”
SEIA’s Hopper pointed out that Biden’s recently signed executive order addresses several solar industry priorities, including a boost to federal procurement of clean energy, and investments in manufacturing, transmission, and siting and permitting.
“The order’s focus on environmental justice is also particularly important in this moment of climate reckoning,” she said, “because it will ensure that 40 percent of the overall benefits from federal climate investments go to disadvantaged communities and establish key benchmarks and tracking tools to make that happen.”
NRECA’s Matheson echoed that sentiment, pointing out that rural electric co-ops serve 92 percent of persistent poverty communities in America, so the issue of environmental justice “is a big deal for us. It’s in our DNA.”
Matheson also said that some of the policy issues that he thinks the Biden administration may look favorably upon for his sector include new financing regulations that end certain penalties for refinancing, tax incentives for new technologies, initiation of an infrastructure bill that allows for “going beyond transitioning the electric grid” and includes investments in resilience, innovative technologies and broadband.
But not all energy sectors are thrilled about the president’s order.
“Only eight days into his term, it is disappointing to report that we find ourselves in a posture of strong opposition. But we have no choice,” said API’s Sommers. “President Biden’s energy policy actions have completely undercut his message of unity and his mandate for economic recovery.”
API, which represents America’s natural gas and oil industry, thinks that Biden faces some clear choices. “Energy abundance or foreign dependence. American jobs or overseas jobs. Economic revival or small-town decline. Progress or retreat,” Sommers said. “Thus far, President Biden is on the wrong side of a number of these consequential choices.”
For example, Sommers said that federal lawmakers in Washington, D.C., may see it as an “easy call” to make bans on leasing, such as what happened with Biden’s order to halt work on the Keystone XL Pipeline. “But up close, you see it’s a lifeline to local economies, governments and schools,” he said. “The surest way to bring recovery to a stop is to remove affordable, homegrown energy from the picture with more regulations, more taxes, more restrictions on access.”
All of the panelists pledged to work cooperatively with the Biden administration and Congress on continuing to improve the state of the energy industry.
