March 17, 2011 • Current Events, Emerging Technology, Perspectives

The Changing Energy Landscape

by Kevin Cowart

As we look to the future of our energy landscape, signals increasingly seem to point to a dynamic reworking of the face of energy. Here are just a few indicators warning of markets primed to shake up conventional wisdom.

Political Discourse
Politicians and lobbyists are increasingly focusing on energy management and energy sustainability policies. Perhaps the prominence energy played in President Barack Obama’s 2011 State of the Union address is the best indicator of the impact energy is set to have on our political, social, and economic futures.

President Obama’s energy thesis: “Instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

Nuclear Power
Signs had been pointing toward much of this investment going toward nuclear power. That is until the recent tsunami caused a potential nuclear plant meltdown threat in Japan. Now, voices are being raised on both sides of the debate:

Senator Joe Lieberman: “I think it calls on us here in the U.S….not to stop building nuclear power plants but to put the brakes on right now until we understand the ramifications of what’s happened in Japan.”

The White House: Mr. Obama continue[s] to support nuclear power.

So, is nuclear energy out of the game? The politics are still in the air (as we all hope radiation remains out of Japan’s), but the elegance of this energy source will likely drive it forward.

It certainly does not hurt that Bill Gates is now leading a nuclear power charge, while also hoping to revolutionize the industry similar to the way he did personal computing.

Oil
With the Middle East and North Africa (MENA) in a prolonged state of turmoil and revolt, oil has rallied over 20% since mid-February (only a month ago). This dramatic increase has only fueled the fervor of calls for a move by the U.S. toward oil independence.

Some think shale oil may provide a significant boost in this regard. These observers are forecasting that shale oil could reduce oil imports by more than half (see here or here).

Significant concerns, however, still swirl around the drilling techniques used to unearth this shale oil, especially regarding the amount of wastewater created and the impact this technique may have on current water supplies.

Natural Gas
Natural gas is currently benefiting from the unease in the nuclear energy market. This commodity’s current market lows caused by swelling supplies are also garnering an increasing amount of market share for natural gas, especially in electric power generation.

In fact, Big Oil is predicting that natural gas used for US power generation will nearly double over the next 30 years. They also see gas set for the fastest fossil fuel growth in both production and consumption over the next two decades.

Many also see a move to increased natural gas utilization as a smart long-term move as well for America’s energy management policies. The environmental and economic advantages, in their eyes, mean that “natural gas may be America’s most ignored blessing.”

In fact, these advantages appear so great to some that they are saying natural gas will do more than renewables to limit the world’s green house gas emissions.

Coal
Never fear coal market, Big Oil forecasts the quadrupling of coal-generated power in the Asia Pacific region. Accompany this with a projected overall 60% increase in coal consumption from 2005 to 2030 in non-OECD countries, and coal lovers appear set for years to come.

Now, the increased competition from natural gas in the North American electric power generation market is forecasted to push down coal prices in the states in the near term. Even still, the EIA is forecasting increased 2012 growth for coal-fired electric power generation, albeit only a small 2.6%.

To mix the pot even more, UBS is calling coal (not natural gas) the big winner from the current Japanese nuclear crisis.

Renewable Energy
The designers of the new WindMade™ logo and wind power advocates argue otherwise. They hope their green product label will drive consumer demand for renewable-based products and supply chains.

Long-term political, scientific, social, and economic questions all exist for renewable energy. Even still, renewables enjoyed record global investment in 2010.

At least renewable energy advocates know they have a partner in rain, which has helped hydropower steal market share from natural gas in the Northwest.

© 2011 Summit Energy Services. All rights reserved.