With natural gas prices low and supplies high, we are decades away from being able to wean ourselves off fossil fuels and move to renewable energy, but there is no reason for dismay.
There seems to be a knee-jerk reaction to render the renewable energy-versus-fossil fuels debate in black and white terms, in a one-or-the-other symposium.
A sudden “switch” to clean energy is not possible; rather it must be a gradual introduction of renewable energy sources combined with an increase in domestic fossil fuels production.
Renewable energy is a natural revolution that will indeed take place, however slowly. But for now, it is responsible for only a very small percentage of energy production. Renewable energy accounts for less than 12% of total energy consumption in the US, according to the Energy Information Administration (EIA). The EIA’s figures for 2010 show that natural gas and coal each accounted for 22% of US energy production, followed by crude oil at 12%, nuclear energy at 8%, biomass at 4%, natural gas plant liquids at 3%, hydroelectric power at 3%, and geothermal/solar/wind at 1%.
Natural gas remains the dominant energy source and that will continue to increase in the coming decade. Fossil fuels will remain the key source of energy for decades to come, but at the same time, renewable energy will continue to develop until it can compete on the market.
There is no way around the fact that market and environment must be in line in order to see a shift to renewable energy, and this alignment takes time. For now, the market favors natural gas and it is impossible to force big business to shift to renewable energy when natural gas prices are so low. It is also impossible to convince the average consumer to go along with this.
Interestingly, a technical report from EIA released earlier this month showed that total US carbon dioxide emissions for the first four months of 2012 were lower than they have been in 20 years thanks largely to the natural gas boom. How can a fossil fuel contribute to lowering CO2 emissions? The answer: “indirectly”. But this is a critical point. The natural gas boom made it possible for big companies to shift away from the use of dirtier coal precisely because it made the switch affordable and even cost-effective.
Nowhere is the power of the market more visible than through the natural gas boom. And this coal-to-natural gas shift was the first step towards cleaner energy; it may seem like a small step, but there can be no skipping of steps.
This does not mean that natural gas is the answer to our climate concerns. It simply means that the market is dictating forward movement, one step at a time. This particular step was achieved rather quickly, with coal producing half of US electricity in 2005, down to 34% in 2012.
A shift away from natural gas to renewable energy sources such as wind and solar must follow the path as the coal-to-natural gas shift. For now, renewable energy technology is costly, but prices are dropping so the trend is moving in the right direction, though experiencing frustrating ups and downs. The US remained one of the world’s fastest growing wind markets in 2011, and wind power represented 32% of all new electric capacity additions in the US last year. It also accounted for $14 billion in new investments.
It is not necessary to pick a “side”. There are no sides in the clean energy debate, there is only balance, without which renewable energy cannot form a realistic future. Renewable energy is a natural and necessary progression, but it cannot happen overnight. The natural gas boom should demonstrate how this balance works and allow for some optimistic insight into the future of renewable energy along this same path.
By. Jen Alic of Oilprice.com
Jen Alic is a geopolitical analyst, co-founder of ISA Intel in Sarajevo and Tel Aviv, and the former editor-in-chief of ISN Security Watch in Zurich.