Why America Is Headed For Higher Energy Costs And Less Reliable Systems … And How You Can Stop It!

Why America Is Headed For Higher Energy Costs And Less Reliable Systems … And How You Can Stop It!

In the quest to accelerate a low carbon future, the United States has found itself at a critical crossroads. The court of public opinion and its policy implications has created challenges in reliability, affordability and, ultimately, realizing the goal. With an increasing population, mitigating climate change requires more than a race to renewables; we must move toward an energy portfolio that delivers sustainable energy options that result in affordable energy, economic growth, and solutions that positively impact the environment.

The United States has the opportunity to lead the world in reducing GHG emissions. Delivering on this vision requires us to engage engineers and scientists who conduct pragmatic research in addition to leveraging the experience and leadership of energy experts, those who have been running systems for decades, and who know how to maximize the functionality of existing assets. Here, we look into five reasons why the U.S. is heading for higher energy costs and less reliable systems.

1. Illusion of Technology Magic

The Problem: The energy sustainable triangle requires a connected system. Efforts to integrate renewable energy have been somewhat successful, but they often fail to plan for adequate baseload generation that backstops intermittent energy sources such as wind and solar when they can’t perform as planned. Failing to plan for an integrated energy system leads to inefficient, high emission stop-gaps that can result in higher carbon intensity, hampering long term sustainability goals.

Determining the problem we are trying to solve is an essential first step. We have an emissions problem, not a fuel problem. A small but loud faction of the environmental community seeks a wholesale switch to renewables, specifically wind and solar. However, the key to unlocking reduced emissions and a lower carbon intensity footprint includes planning for a clean baseload and exploring new pathways of existing products and processes that utilize natural gas and emerging fuels.

Increasing efficiency and novel utilization of our energy system can have a positive, immediate impact on carbon intensity. It’s about getting more out of each unit of energy we produce.

What Needs to Happen: Reducing carbon emissions is not just about generating less carbon but reducing carbon intensity. This approach requires focusing on efficient processes, limiting methane leaks, and ensuring that electric grids plan for and can rely on natural gas when intermittent sources like solar and wind fail to meet demand. Additionally, reducing emissions now for energy intensive industrial and petrochemical plants with net negative solutions, like carbon capture and storage, offers an unrivaled opportunity to provide technology and investments for the public’s good. At some point, we will need to do more than minimize emissions; we will need to incorporate solutions that address the concentrations already in the air and the world we live in.

Solution: There is no one solution; we need to design an energy portfolio to move forward pragmatically. Opportunities to create energy that fit the challenges at hand abound. Energy efficiency is an immediate priority while powering baseload generation with natural gas will continue to lower emissions. Additionally, partnering high energy intensity industrial products like cement, steel and petrochemicals with technologies like carbon capture, utilization and storage (CCUS) can provide the impetus for further significant emission reductions.

A diversified portfolio of natural gas and renewables, complemented with net zero technology, can be designed to reduce carbon intensity now and provide long term climate benefits.

2. Energy Impotence

The Problem: Energy security is both a domestic opportunity and a responsibility. National security issues include energy sources and the infrastructure that underpins them, like our pipeline infrastructure, the electric grid and energy storage. The ability to deliver a consistent supply of energy at an affordable price in an environmentally sound and safe way is challenged due to the lack of a strategic plan for how the United States should produce energy. Add to that increasing geopolitical instability, and energy security rises as an imperative that if not prioritized, risks both national security and economic growth.

What Needs to Happen: The United States is a geopolitical powerhouse. We have an amalgamated abundance of diverse fuels and technological expertise. This affords the U.S, and our allies, an unencumbered energy source.

Energy security should be a cornerstone of energy policy and frameworks. Energy security means more than just an uninterrupted power supply; it’s about keeping energy affordable and ensuring an energy reserve. The carbon intensity of U.S. gas is markedly lower than foreign sources, making domestic production a viable and cleaner option globally.

Solution: America has, and will continue to be the global leader in developing clean energy innovation and responsible natural resource production. The world can be safer and more secure if we prioritize using fuels from secure countries. As such, the United States is a critical participant in our country’s and the world’s energy evolution. We must prioritize domestic production and investment in diversified energy sources, ensuring affordability and security. Our country can safeguard its energy supplies by supporting U.S. production and employing newer, clean technologies.

Our ability to create a future with less carbon and more energy for the benefit of society globally is a tough needle to thread. Still, it’s possible by using America’s entrepreneurism and wealth of resources like natural gas, emerging fuels like RNG and hydrogen, and technologies like CCUS and direct air capture (DAC).

3. The Last Piece of Pizza

The Problem: There are billions of people worldwide who depend on energy, and at least a billion more who need access to it. Even in the United States, a highly developed society, there are people who live in energy poverty. This fact presents an enormous challenge: The ability to scale the quantity of energy while securing a stable, affordable framework that protects the environment. Any viable solution must be global, interconnected and economically sustainable. Currently, in the U.S., every source of low carbon fuel is the recipient of significant subsidization resulting in trillions of dollars in tax credits for wind, solar and batteries. Meanwhile anti-fossil fuel ideology and “feel good” policy impedes investment in technologies that can reduce carbon globally, the kinds of technologies that make a real difference.

What Needs to Happen: If energy emissions were compared to a pizza, the developed world has consumed most of the pie. Essentially we have one piece left. As a result, global collaboration is mandatory to reduce emissions, meet the increasing need for energy, and provide access that will downscale energy poverty.

Our energy strategy must be evaluated through three lenses: relevance, scale, and impact. Climate mitigation that results in energy deprivation or energy poverty – domestically or in developing nations – is immoral. Domestically, the United States has the geology, the capability and the responsibility to develop systems to make a global impact. The grid of the future needs to be designed on dispatchable power, the kind that is there when you need it ALL the time, and in a manner that provides carbon neutral energy, affordably.

Solution: Fundamental to successful decarbonization is accessible, reliable, affordable energy. If you have energy, but you can’t count on it, then it is of little value. On the other hand, if you have it, and can count on it, but it’s out of your price range, you don’t really have it. Affordability for citizens and how they heat or cool their homes, but also industries, is paramount for cost competitiveness in a global marketplace. Without these components, we don’t have a platform to work from.

The United States has led the world in reducing emissions. We now have the opportunity to translate that success globally. We must take full advantage of the fact that American resources, energy producers and manufacturers are among the most carbon efficient in the world and innovative American companies are developing technology solutions to drive down emissions across the economy. Still there are many emission sources that cannot easily be replaced or electrified, so carbon capture and utilization provides the opportunity to provide a significant impact in a way that allows us to continue to provide products and services in a safe and inherently secure manner.

The work that is being done today with net zero technologies must be supported with policy that leads to full scale commercialization. Energy dense fuels and carbon capture can bring the most energy in the most affordable way, and provide the energy we need now and in the future.

4. Lack of System Resilience

The Problem: Over the last four decades, the public’s concern about climate change has steadily increased. The trend line is clear; the general public wants action. Consequently, politics surrounding energy has ramped up. The two parties are polarized on the issue of energy and, in general, the public is in three camps: One that wants to eliminate fossil fuels at any cost; a second suspects climate science doesn’t justify the alignment of capital and required change; and a third that seeks more information.

Beyond the divergent positions, energy, the systems that deliver it, and innovation utilized in the energy evolution, are technical and complicated. Accordingly, most people are happy to let presumed experts recommend the solution. Unfortunately, experts that are not agnostic to the fuel source or technology present solutions focused on intermittent sources. Our current energy systems’ lack of resilience and adaptability exposes us to vulnerabilities from extreme weather events, physical and cyber attacks, and other unforeseen circumstances.

What Needs to Happen: We need energy density as much as we need carbon free energy. A diverse portfolio of technologies is vital for a resilient energy system. The energy industry has a long history in innovation. Today, we have not reached the technological breakthrough required for utility scale battery storage. We have not ensured the security of supply of rare earth minerals, and we have delayed the development of critical infrastructure in pipelines and the power grid.

Solution: Building cyber resilience is critical. Furthermore, exploiting the benefits of existing gas infrastructure can boost resilience and reduce emissions. Energy storage solutions can address the intermittency of renewables, thereby enhancing system reliability.

5. The Complex Web of Regulation and Commercialization

The Problem: During World War II, a combined effort of the government and the petroleum industry allowed the construction of two pipelines to carry oil from Texas to Midwest and East Coast refineries. Known as the Big Inch and Little Big Inch pipelines, they aided the Allies’ winning of WWII. This collaboration and cooperation demonstrated many years ago changed the world. We have the same opportunity today to change the world by providing global stability, reducing energy poverty, and using energy dense fuels and carbon capture technology to energize the world in a carbon neutral way.

Unfortunately, pipelines have become flashpoints in discussions of climate change. Amid the protests and debates, it’s easy to forget how heavily the United States’ economy relies on existing energy pipelines, little alone how critical new pipelines will be to producing reliable and affordable energy to meet growing societal demands in an environmentally responsible manner.

The current fragmented regulatory pathway and subsidies for renewables distort the energy market, discouraging innovation and maintaining an energy illusion. That illusion is neither efficient nor sustainable.

What Needs to Happen: Across the board, companies, politicians and the public are looking for answers. We must look at emissions first and then at the technologies. Clear and consistent government policies allow operators to build a roadmap and set strategic priorities. A policy that leads to the availability of energy dense fuels and the commercialization of technologies that provide carbon neutral or carbon negative solutions provides an avenue for energy growth, maintains quality of life, and facilitates global carbon neutrality.

Solution: Federal permitting needs to be streamlined. Rate designs must be innovative to account for fluctuating temperatures, escalating costs and new technologies. A technology neutral policy would enable the effective incorporation of various low and zero carbon technologies.

By acknowledging these challenges and taking proactive steps, the United States can transition to a more sustainable, affordable and secure energy future. It’s a collective responsibility that requires efforts from industry, government and the public. We are at a critical juncture, but there is still time to steer the course toward a sustainable energy future.

Large solar and wind farms can be unpopular locally due to land use and aesthetic issues. The ideological tension between free market and government regulated energy systems creates significant barriers.

While renewable energy sources like solar and wind farms are largely supported, their expansive land and resource requirements and accompanying infrastructure often face local opposition, complicating efforts toward widespread adoption.

A lack of resilience and adaptability in our current energy systems exposes us to vulnerabilities from extreme weather events, physical and cyber attacks, and other unforeseen circumstances.

Author Profile
Suzanne Ogle
CEO - Southern Gas Association

Southern Gas Association (SGA) CEO Suzanne Ogle provides perspective on policy, legislation and current events, as well as ideation that looks at the natural gas industry holistically (instead of just from the perspective of a producer, transporter or distributor) in order to spotlight the interconnectedness of the industry. In general, Ogle seeks to expand the energy conversation and help educate people on a realistic way to have an energy future that includes the use of natural gas as a way to lower emissions and address the energy needs of underserved populations.

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